On this call, we'll review the results, discuss our outlook, and then host a question and answer session. Yesterday afternoon, we posted results for the first half of 2026, in which we generated adjusted EBITDA of $2.2 billion. These results reflect the CF Industries team's strong operational performance and a tight global nitrogen supply-demand balance, which was further strained by the conflict with Iran. We operated our available ammonia capacity at nearly 98%, enabling us to meet demand from our domestic, retail, wholesale, and cooperative customers who supply North American farmers.

We also continue to be disciplined as we evaluate high-return projects across our network to unlock further value. As you saw in our presentation, we have raised our mid-cycle EBITDA and free cash flow expectations. Right now, we believe the market views a disproportionate amount of our EBITDA and free cash flow growth primarily through the lens of short-term geopolitical friction in the Middle East. Higher global capital costs have structurally raised the incentive price required for new global nitrogen capacity, lifting CF Industries' baseline mid-cycle earnings power while reinforcing the value of our existing manufacturing and distribution network.

Our ability to operate at high utilization rates during disruptions enhances our stable mid-cycle return profile above and beyond the strong free cash flow generation already embedded in our outlook. This, in turn, augments our ability to invest in high return projects and return capital to shareholders. Global prices rose significantly as an already tight supply-demand balance was further constrained by supply disruptions from the conflict with Iran. In North America, agricultural demand remained strong through most of the first half of 2026, led by ammonia and urea.

What went well
  • Q2 2026 net earnings attributable to common stockholders of $727 million, or $4.73 per diluted share, with EBITDA and adjusted EBITDA both at $1.2 billion.
  • Strong operational and safety performance: operated available ammonia capacity at nearly 98% in the first half and reported a trailing-12-month incident rate of 0.16 per 200,000 hours worked, well below industry averages.
  • Raised mid-cycle outlook, lifting baseline mid-cycle EBITDA to roughly $2.9 billion (free cash flow ~$1.7 billion), rising to about $3.3 billion EBITDA by 2030 as Blue Point, decarbonization and other in-flight projects contribute.
  • Returned nearly $1.3 billion of free cash flow to shareholders over the trailing 12 months (10.6 million shares repurchased for $958 million plus $314 million of dividends); board raised the quarterly dividend 20% to $0.60 per share in July.
  • Blue Point advanced: all necessary permits received, nearly all long-lead items ordered, module fabrication set to begin later this year and construction expected to start in August.
  • Strong July fill-program participation built a substantial UAN order book extending into November (average price near $300) and set up a strong expected fall ammonia season; ~10% of first-half ammonia volumes were low-carbon, earning an average premium of more than $20 per ton.
What went wrong
  • Demand softened late in the quarter: customers slowed purchases in June as the nitrogen channel drew inventories to very low levels, with purchases deferred in regions such as Brazil, India, Australia and Southeast Asia.
  • Urea prices corrected sharply in Q2, reverting toward Q1 lows (U.S./NOLA prices fell below the prior year) on rumors of Middle East peace and trader liquidation despite globally tight supply.
  • Q2 fixed costs rose about $75 million excluding volume and gas effects: roughly $10 million from distribution/logistics (barge-to-rail mode mix and higher rail rates) and about $60 million split between higher purchased-ammonia costs and fixed-cost absorption from Yazoo City being down.
  • Took an additional $23 million impairment in Q2 on Yazoo City equipment (nearly $50 million cumulative), and pushed the site's restart to the first half of 2027 from late 2026 due to extended electrical-gear procurement timelines.
  • UAN availability was constrained during Q2 by the pivot to more urea and DEF production, building inventory to be worked down in the back half, and 45Q carbon-capture/CO2 volumes ran lower because of the Ammonia 6 turnaround at Donaldsonville.

More on CF Industries Holdings, Inc.

Reported 2026-08-06 · figures from the CF Industries Holdings, Inc. Q2 2026 earnings call.

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