Good day, ladies and gentlemen, and welcome to the First Quarter 2021 CF Industries Holdings Earnings Conference Call. My name is Beth. I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of the presentation. [Operator Instructions] I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick with CF, Investor Relations. Sir, please proceed.

Good morning and thanks for joining the CF Industries' first quarter 2021 earnings conference call. I'm Martin Jarosick, Vice President, Investor Relations. With me today are Tony Will, CEO; Chris Bohn, CFO; and Bert Frost, Senior Vice President of Sales, Market Development and Supply Chain. CF Industries reported its first quarter 2021 results yesterday afternoon. On this call, we will review these results in detail, discuss our outlook and then host a question-and-answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available on our website. Also, you'll find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website. Now let me introduce Tony Will, our President and CEO.

Thanks, Martin, and good morning, everyone. Yesterday afternoon we post our financial results for the first quarter of 2021 in which we generated adjusted EBITDA of $398 million. These results are really the story of nitrogen prices that increase throughout the quarter, somewhat offset due to lower production and corresponding sales volumes. There were a lot of things happening during the quarter, such as winter weather driving up LNG demand and corresponding gas prices, and one very large winter storm event in the U.S. But if you take all these impacts together, they roughly offset each other. Let me provide a bit of color on our response to these events. But I'd like to refer you to slide six and seven in our posted materials. Back in February, meeting the Presidents' Day Weekend, an extreme winter storm hit the U.S. Gas suppliers in the several of our locations curtail gas deliveries and we were informed that we would likely face force majeure hard shutdowns. Our team mobilize quickly, discussed various options, and decided on the following course of action. Given we're facing the loss of gas delivery in to our plants and would be shut down anyway, we opted to effectively sell the gas we had contracted for back to our suppliers by net settling our gas delivery contracts at prevailing market prices. We also reduced operating rates to minimum levels at some plants that we're still receiving gas, and sold the excess gas above those minimum levels back to suppliers. The result was a gain on sale of gas of $112 million. Slide six provide some details of how we mitigate gas price risk and how the February storm affected gas prices. However, there were pretty significant impacts for operations as a result of the shutdowns that freeze us.…

Thanks, Tony. As we look at the first quarter and into the foreseeable future, we believe that positive conditions in the global nitrogen market are likely to prove resilient for some time. Since late 2020, global commodity crop prices have been rising steadily driving strong nitrogen demand. Global urea prices rose alongside this demand and prices for other nitrogen products followed. Our team did a good job of capturing these opportunities in the first quarter, especially as they dealt with the impact of the severe winter weather on our production volume. I will note however, that our UAN segment results do not fully reflect the positive environment at hand. We continue to face challenges there from subsidize Russian UAN imports that have depressed prices in North America. Coming out of the first quarter, the spring application season in North America has progressed very well. Nitrogen prices have remained high, demand is strong and supply is tighter than the market expected. As we look further out, positive agricultural fundamentals are setting up an extended period of strong margins across the entire value chain. Strong global demand for all major commodity crops has resulted in low stocks to use ratios and higher commodity crop prices. Given where those ratios are, as well as the continued robust demand for commodity crops, we do not believe stocks will be replenished in just one growing season. In fact, if you look back to the last time we had stocks to use ratios, this low, it took several growing seasons to recover, as you can see on slide nine. As global stocks recover slowly, commodity crop prices should remain higher for some time, supporting strong financial conditions for all aspects of the channel, from producers to wholesalers to retailers to farmers, to green originators, to green…

Thanks Bert. For the first quarter of 2021, the company reported net earnings attributable to common stockholders of $151 million or $0.70 per diluted share. EBITDA and adjusted EBITDA were $398 million. The trailing 12 months net cash provided by operating activities was approximately $1.5 billion and free cash flow was approximately $1.1 billion. These results reflect generally higher year-over-year prices, partially offset by lower year-over-year volumes and higher realize natural gas prices. They also reflect how we offset the challenges we faced in the first quarter through management actions. As Bert described, the nitrogen pricing outlook through the rest of the year is very favorable in comparison to last year. Partially offsetting this benefit will be a number of factors. We expect gross ammonia production to be around 9.5 million to 10 million tons compared to 10.4 million tons last year. This reflects the impact of the plan turnaround activities and the production we lost due to the weather. This level of production, along with lower inventories to start the year will likely result in the company selling between 19 million and 19.5 million product tons this year, compared to over 20 million product tons last year. We also expect our natural gas cost will be higher compared to last year. Based on forward curves, we would expect our average MMBtu price at the end of the year to be similar to 2018 or 2019. Finally, we anticipate that our capital expenditures for this year will be in the range of $450 million. This will be much closer to our capital expenditures in 2018 and 2019, reflecting a return to normal level of plan maintenance and turnaround activities. That said, the positive nitrogen industry conditions we have described should support expanded margins for the company compared to 2020, driving significant free cash flow this year. We will continue to invest in growth in line with our clean energy strategy. The recent announcement of our partnership with thyssenkrupp on our Donaldsonville Green Ammonia project was an important step forward in our efforts. The cost of this project fits within our typical annual capital expenditure budget. We also continue to advance discussions with other potential partners for green and blue ammonia, validating the broad opportunities we believe will be available in the future. In March, we repaid the $250 million remaining on our senior secured notes that were due in December. As we remain focused on investment grade, and positioning the company to execute our clean energies growth strategy, we'll continue to evaluate opportunities to further reduce gross debt over time. We will continue to return cash to our shareholders through our quarterly dividend and opportunistic share repurchases at attractive levels. With that Tony provide some closing remarks before we open the call to Q&A.

Thanks, Chris. Before we move on to your questions, I want to thank everyone at CF for their fantastic efforts during the quarter, especially the time when many of our employees were still working remotely. I am particularly proud of our teamwork and collaboration, critical thinking and data driven decision making, and our agility at recognizing and capitalizing on disruptions in the market. We are very optimistic about where the company is positioned. We believe our first half results will be strong. And our outlook for the remainder of this year and into next year is very positive. Nitrogen industry dynamics for producers in North America are the most favorable we've seen in years. This along with the progress we were making on our clean energy growth strategy positions us well to create shareholder value in the near and longer term. With that operator, we will now open the call to your questions.

Thank you, sir. [Operator Instructions] As a courtesy to others on the call, we ask that you limit yourself to one question. Should you have additional questions, we ask that you re enter the queue and we will answer additional questions as time allow. Your next question is from Joe -- our first question is from Joel Jackson from BMO. Your line is open.

Good morning, everyone.

Good morning, Joel.

Tony, I know you don't really give guidance. It would seem like Q2 is setting out extremely well, when we think about order book lags and where nitrogen prices have trended across the quarter in Q1 into Q2. Can you give us a little bit of color on how good Q2 could look versus Q1? Like could we see 50% higher earnings in Q2 versus Q1? So any color you can add would be really helpful to understand how well prices -- stronger price are going into your P&L?

Yes, Joel. As you mentioned, I'm not going to give real firm guidance, but just a little bit of color here. Gas price is behaving itself in North America. So our cost structure is kind of where we expect it to be. And gas prices internationally have really blown out. So the TTF price in Europe, the JKM price in Asia, it's very high. So to bid production into the marketplace in those regions requires strong nitrogen pricing. And that not only sets up really well for Q2, but I would anticipate that that's going to be, and Bert is going to get into this, I'm sure later, that's going to mean that the reset in terms of what our fill program is -- our expectation is that'll be quite a bit higher than it's been in recent years. So, I don't think this ends at Q2. I think we've got a really strong rest of the year in front of us. And in fact, based on, as Bernard talked about the stocks-to-use ratio, and it taking more than one growing season to recover. We think this is at least into 2022, if not beyond, so we're really excited about it.

Your next question is from John Roberts from USB. Your line is open.

Thanks. Could you discuss the UAN results. It looked like there was some something unusual that happened there?

No, I think it's a reflection of several things like I articulated in the prepared remarks. We have had an influx of low cost subsidized Russian UAN consistently and that's pressure, obviously, all of the importing regions, which is East Coast, Gulf Coast and West Coast. And then, I think you have to remember, we're coming out of a pandemic. And when we were in 2020, it was a risk off market for globally. And so you saw low prices in different regions and inability or not a desire to maybe to purchase at first. And so we had a low price environment in Q3, Q4, and into Q1. And then our situation, I think, as well as others, you have logistical assets that move as well as plant production, even with the disruptions that you have to keep moving. And so we always have a forward book on. The prices started moving up for UAN, mid Q1. And so you're not going to have an immediate price realization anyway. And so we expect to see more of that in Q2. And then as Tony mentioned, the reset will be at a different level than it has been, and we expect that to be very positive. So more thing or better things to come, we think. And we're watching all the variables and keeping our focus on that.

This is Chris, John. The other thing I would add is. In the UAN segment there, it's a little misleading gross margin there, because the items that Tony spoke about, the natural gas settlement, we put was booked all to ammonia, where those higher maintenance costs and fixed costs write-offs were against all the product lines. So if you adjust sort of that out, you're closer to something that's more similar to what it was last year during Q1.

That's helpful. And then could you discuss the competition between the industrial markets and the agricultural markets for ammonia, because you've got industrial recovering here at the same time?

Yes. So I think industrial caught up. We had lost our spring program in December. And then prices moved up also in Q1. And so we have a fairly attractive Q2 Ag application season, not only volumetrically, but you're right, prices improve. And I think that's going to reflect well for the fall. Fall application takes place in November. And we would project today based on corn prices and availability, that that price will be very attractive. On the industrial side, that's a reflection of globally and really for all the products; urea, UAN, ammonia nitrate and ammonia, we have a very tight market. And as Tony articulated driven by energy cost differentials, high cost producers it has been attractive to import and buy and decrease or even stop that production of ammonia, that quickly tightened up the global ammonia market in the Baltics, Blacks as well as in Tampa, and you've seen prices move up to above $500. It's been many, many years since we've been at that level. Yet healthy margins on the phosphate side. So the phosphate producers are trying to acquire enough ammonia for their operations. And then you've had a recovery economically, which is driven the industrial demand for synthetic fibers in different areas along the Gulf Coast, as well as globally, you're going to see a tight ammonia market through this year and probably into next. And I think you're right, the competition for that time, there's a portion of our book that's consistent with industrial demand. And then we normally get a better margin uplift from Ag, but we'll be watching that and moving appropriately, or as necessary to capture that opportunity.

Your next question is from Adam Samuelson from Goldman Sachs. Your line is open.

Thanks. Good morning, everyone. So maybe, Bert, to your point on -- the cost curve has deepened pretty materially. I'm trying to think one, with $9, Eastern European Gas. How do you think about that kind of helping set a floor price at NOLA? It's below where it is now. But it's well above where it's been the last couple of years, I'd imagine. And against that, how do I think about the ammonia and UAN kind of end values? Seems like those spreads versus the urea and value have returned to more normal levels here in the last couple months, where they've been pretty depressed for the last couple of years. I'm just trying to think about how you think about that going forward?

Yes. So your question on setting a floor at NOLA, I would kind of take it to a global, it sets a global floor. And you're going to see that in the -- we've already seen in the India tender that was open this morning or yesterday, and the prices that reflect probably an AG number of 320 to 330, a metric ton FOB. And you have significant amount of demand that needs to be covered without heavy inventories globally. So coupled with expensive, or a high cost producers now having an inability to export or participate in the export market, low inventory levels globally, a need for Brazil and India to consistently be in the market and purchase from now from this point forward. And then, you'll get into -- our season will pick up later on in the year. You have a very good platform for a very healthy floor level, probably higher than what people are anticipating. emergence:

Your next question is from Ben Isaacson from Scotia Bank. Your line is open.

Thank you very much and good morning, everyone. Quick question on UAN again. You keep talking about subsidized Russian UAN imports. You saw what Mosaic did on the phosphate side. Can you talk about whether that's something you guys are exploring or will explore in terms of potential countervailing duties?

Good morning, Ben. Yes, in reference to the comments, it's just a fact. And so I just wanted to lay out there that situation that has taken place. And you're right from the Mosaic situation that was subsidized gas. And so, I just think as more we've had several questions reflecting the poor UAN performance. And when you peel back the onion and look at that, there's a direct correlation to the incoming product, and the resulting nature that drove down prices, so it's just more to inform you.

And that, I'd say, Ben, the other thing I tack on here, which is the ammonia that goes into MAP and DAP is a relatively small percentage of the aggregate total cost of production. The gas that goes into producing UAN is 70$ or 80% of the cost of production. So when FTC found that there was subsidized gas and therefore duties that the Russians needed to pay, if that's true on MAP and DAP, it should be doubly true in UAN. So I'd say it's something we're continuing to take a hard look at.

Your next question is from Vincent Andrews from Morgan Stanley. Your line is open.

Hey. This is Steven for Vincent. Thanks for taking my question. Just wanted to ask a question on the carbon capture initiative. And whether or not there was kind of any more color to provide around substance and timing in regard to those discussions, and anything of that nature would be much appreciated?

Yes. I think it is something as we talked about that we continue to have conversations with quite a few different people who are looking to partner on that. And it's really because of, I would say, the ability are actually what we're doing today by capturing our CO2. There are lot of industrial organizations today do not have that capture. So we have a net position where we're already removing the CO2 from our ammonia stream and capturing that. So that puts us ahead of a lot of other parties from that. But we're being diligent as we look at what opportunity we want to join. There is no known right now at this particular time classics permits that have sequestration points. But there is obviously a tax credit also for EOR. So I would say right now we continue to explore those opportunities and we're talking to several parties on that.

And I'd say not just the Donaldsonville but there's opportunities in a number of places across our network, including both of our plants in the UK.

Your next question is from Steve Byrne from Bank of America. Your line is open.

Hi, good morning. This is Luke Washer on for Steve. So you guided ammonia shipments this year to 19.5 million to 20 million tons. And I guess just thinking about the outages that you had in 1Q, how are your ammonia plants running right now as you enter into 2Q? And how does that set up the cadence of your shipments over the course of the year?

So, it wasn't ammonia shipments that we were talking about between 19 million and 19.5 million, its total product shipments, ammonia production is kind of 9.5 million to 10 million tons. We tend not to break out sort of current operating status of our plants. That's one across the entirety of the network is just one of those things that we believe is kind of competitively sensitive. So we tend not to provide a real time update on all of that. But I think our guidance reflects both the increased level of turnaround. So we had this year versus last year. And on the fact that we did have a big winter storm event that didn't have some knock on kind of outages associated with it. So when we look at those two things together, we feel pretty comfortable about the guidance that Chris provided both in terms of ammonia production for the year and an aggregate sales volume in terms of product tons for the year.

Your next question is from Michael Piken from Cleveland Research. Your line is open.

Yes. Just wants to get in a little bit more in terms of your thoughts. I know you mentioned that you expect higher seasonal lows. How are you thinking about summer fill for UAN. And just in terms of balancing the desire to keep imports out versus the more favorable supply demand backdrop? And I guess, in phosphate, there's already been some fill. A little bit of sales done. When you sort of expecting to come out with a fill price? Thanks.

Yes. When you look at summer fill, we've had different programs for different years, depending on when demand materializes, what our situation and what the kind of the opportunity is for inventory. And we believe this year, because of the tail that's needed for applications, that you're going to have a later season than normal. The latest we've gone is August, the earliest we've gone as June. So I would tend to be on the latter side of that spread for moving the or announcing the field program. Inventories are going to be low for all products. And just looking at the imports to-date and the production to date, feathering in what was lost in the winter storm in February amongst the different producers. And again, we're projecting 91, 92 million acres, when you look at it today, and talking with some of the different participants in the grain markets, you're probably going to be leaning or at least me personally leaning more towards 94 million acres. And then, as I talked about earlier, additional applications for yield, you're going to have a very robust demand coming probably -- starting, it's already has started and pulling contracts early. So I don't see big inventories. And you're going to need to fill those inventories because on the back of this year and the back of this yield, if it's even average or good, we're going to have to repeat that in 2022. And so, when you're looking at the fill programs, as well as the fall application of ammonia, I'm not going to give a price today. We've had several customers asking us for that. But we expect it to be at a higher level. One, because it's worth it. Nitrogen is what's going to give you yield. It's at a good value. And as I said earlier, every one of the value chain, even at whatever levels we come out with is at a healthy profitability level and balance sheet position. So this is a very good time for our industry. And we're going to be excited to launch our full program and work with our customers to make it a success for them as well as us. Beth, do you want to go to the next question?

Yes, sir. Your next question is from Andrew Wong from RBC Capital Markets. Your line is open.

Hey, good morning. Thanks for taking my question. Just following on an earlier question about just the coming quarters. I know it's hard to give us guidance. Can you just help us maybe qualitatively understand how much volume was sold forward into Q2 and Q3? And how we should think about realized prices versus some of the pretty high prices we're seeing in the market today, given the nitrogen prices have kind of moved up pretty quickly and pretty sharply. So that can kind of throw the expectations or unrealized prices off sometimes? Thank you.

Yes. So qualitatively, I think I mentioned on the last review, we're in a very, very good environment. So that's kind of the statement that's giving you the guideline. Quantitatively, we don't have anything sold for Q3. And we'll be looking at that and assessing it as we move forward. For Q2, as I said earlier, when we always have a book going into the quarter, and we have been active every day in the market, if you do your channel checks, we're selling, we still have products to sell for Q2. So there are different products move at different times. And ammonia is generally first. And so those programs are part of our program was sold in December and part of it was left open for this period. And then you move into urea and UAN for wheat and then as you move further north and we're just starting those applications in the north as well as Canada. That's for ammonia and that will move then to urea and UAN. The bulk of the UAN market will be in the latter part of May and early June. And we think we're well positioned for that also and have tons available for the pivot run which is your irrigated runs as well as the rice run. So more to come. But we like where we are.

Your next question is from Mark Connelly from Stephen Inc. Your line is open.

Good morning. This is John Rider on from Mark. So, we saw a fairly normal seasonal swing to coal this winter in China and as far as we can see a pretty normal shift back where are you seeing Chinese operating rates right now? And what are you assuming in your global forecast for Chinese operating rates in the rest of 2021?

I'll start, John with coal, Chinese coal. There had been a lot of discussion about Chinese coal softening and specifically anthracite over the past year. And what you've seen is it's been relatively consistent at about $160 per metric ton. Therefore, really on an energy equivalent, we've seen the seven to 750 per MMBtu , equivalent of gas on that. So from a Chinese perspective, we've continued to see them be the marginal producer, but as Bert mentioned, in his remarks, we started to see here is with the expansion of energy differentials is that you're actually seeing Eastern European and Asian be equivalent to those marginal producers and a widening of the cost curve in that fourth quartile along with the deepening of the slope. So I'll let Bert talk maybe about what type of exports he's expecting for this year from China.

Yes. Specific to China, and obviously, we're following it, because they do represent roughly 10% of the export market, and Yara [ph] have been the marginal producer that expanded contract, as pricing allows, and have been active participants in the India tenders. So on a percent of capacity, we estimate, just like some of the publications, they've been in the 70, 71 72. And that would be laying out for the year, about 56 to 57 million tons of production. As exports, we're estimating around 5 million tons. But the thing we have to remember and pay attention to is consumption in China. Consumption in China over the last four years has risen from 48 million tons, we estimate to 52 million tons. So an additional 4 million tons. What is happening? Well guess what? They need to also fertilize for yield. And the tremendous imports that have taken place in China of corn and soybeans this year, is a reflection of their inability to produce that. One, it's a shortage of water, and soil. But it seems to me that they're now trying to take care of some of that, at least for the next growing season. So positive dynamics out of China, that as a 5 million ton exporter, and I think the majority of that will go to India. We're expecting India this year to be a 10 million ton importer. So the swings and the ability to move the market out of China is not the same than it was, let's say, six or seven, eight years ago.

And I think point Bert, we are seeing increased economic activity within China. And so, that means, on the industrial side, there's more usage, it goes to your -- Bert's point on consumption. And the other thing that we're watching very closely, and Bert mentioned this about India, is our expectation is that domestic production in India is going to be down. And therefore, based on consumption, they're going to be larger importers, which likely China is going to take a big piece of that. So, again, we're very constructive not only in terms of the overall SME [ph] balance, but with energy differentials, where they are and the costs of the high end where it is that suggests, a very favorable nitrogen pricing deck for North American producers.

And one last thing you got to remember about China. In the last three years, there have been 12 million tons go offline and closed. That's a significant move. When you're adding this year we estimate of exportable tons, 2.5 million tons. And so the closures which will continue, make China basically a domestic producer with a marginal ton that's coming out. That's okay.

Your next question is from Rikin Patel from Exane. Your line is open.

Hi. Thanks for taking my questions. And just firstly a follow up on the market and your comments on India. I think you said production is expected to be down this year. How does that play into your expectations or views on some of the new plants that are ramping out there right now? And then secondly, just on free cash flows in keeping with the guide for $450 million of CapEx this year. Can you just help us understand the phasing of that into Q2 and H2? And then secondly, on customer advances, I saw there was a slightly higher step up this quarter. Does that mean that we can assume a higher outflow in Q2? Thanks.

Yes. So I'll deal with a couple of those and then I'll turn them over to Bert and Chris. On the India front, there's been a number of new plants that have started up over the past couple of years, [Indiscernible] and Matix and, and others, and what we have not seen as an aggregate increase in the amount of domestic production. So, it looks like as some new production comes on, some older productions either curtail, they're taken offline, and particularly with where LNG is trading right now, our expectation is that in most cases, it's going to be cheaper based on the efficiencies or the inefficiencies of some of those older plants to import domestically trade or globally traded urea as opposed to try to run those. There's also as we understand it's been because of the impact of COVID and what's going on over there right now, real challenges on supply chain and labor issues. And so, again, our understanding is, our expectation is for the full year, we don't anticipate there to be excess production coming online on a net basis in India. I'm trying to remember the other questions.

The other question was on capital expenditures?

Yes. I mean, in general, we like to do turnarounds during the portion of the year where pricing is the lowest. So that suggests kind of end of the second quarter and into the third quarter. And then, we'd like the plants to be kind of up online, again, fully running, so that we can hit fall application of ammonia and kind of pre stock for Q1 and Q2. So, most of the time, as you get into the back end of Q2, and most of Q3, that's where the vast majority of our turnaround expenditures happen, at least at the plant level.

Yes. I think if you look at our historical quarterly spend on CapEx and use that Tony mentioned, we're pretty set when we're taking plants down and doing the turnaround work, that would be a good proxy to allocate where you would see that fourth, fifth this year.

And if you look at India over the last six or seven years, they basically produced between 24 and 24.5 million tons since 2015 year-in, year-out even as Tony said with the addition of these new plants, and from our channel check, they're late. And they don't -- when they do come up, they don't run a capacity, they don't come immediately up to 100% of capacity. So this is a multiyear issue. And we're still seeing multiyear growth in import that may not continue at the current pace, but it's going to maintain a healthy level in the foreseeable future.

And then on the customer advance front, as Bert indicated, we have not taken a bunch of Q3 orders right now. So the customer advances that are on the books are really for Q2 deliveries. So to your point, as we go ahead and fulfill those orders, we'll get the rest of the cash in. But our expectation is that customer advance number will correspondingly get whittled down. And Bert also talked earlier about kind of thoughts on timing, which for launching fill, it also corresponds to a new bank of kind of customer advances in orders that he's looking more likely than not toward the later end of the window as opposed to the earlier end of the window. So all of that suggests a lower customer advance number is we're kind of working our way through the quarter.

Your next question is from Roger Spitz from Bank of America. Your line is open.

Thanks. Good morning. Regarding your comments in the prepared remarks, on your focus on it ratings, are you specifically pushing for an IQ rating from agencies? And what have they been saying to you about what it might take to get that rating? What do you need to do?

Yes, so Good morning, Roger. Thanks for the question. Related to as we are looking at getting back to investment grade, the one thing we believe right now is our metrics are in place for investment grade. If you look at what we've done, just recently here, you're taking our gross debt down to $3.75 billion and really our net debt under $3 billion. That puts us on an LTM at 2.1 times net debt to EBITDA. And with the strong outlook we see happening here in the market, not only as Tony and Bert mentioned, through 2021. But in the 2022. We see an opportunity not only to invest in sort of our growth projects, but also take down a little bit more debt, and also return cash to shareholders as well. So I think we'll probably want to take down a little bit more debt, and we believe that should be able to get us to investment grade. What we're hearing from the rating agencies is really just to see how the market develops. And I think right now, what we're seeing is a very strong, not only this year, but in following year.

Yes. I think the other thing I would just add to that Roger is, as we got into kind of the spring and into the summer of 2020 last year with a big kind of risk off position in the equity market and some real questions in terms of what was going on in demand. Broadly, the rating agencies were taking a very conservative view of materials and industrials. And there was a lot more downgrades or negative watches than there was anything positive. And although our results were down a little bit sequentially in 2020, over 2019, demand for our products remained really strong. And it was really a pricing environment. And as Chris said, based on the pricing environment that we're seeing now, and this is a prolonged period, along with continued reduction in debt. I think we have a very strong argument even without taking down incremental debt, the word investment grade company at this point, but we're continuing to have those conversations, I wouldn't say they're quick to respond. They tend to be fairly risk averse. So they want to see that its there for the long run before they make a move like that and give us the bump up. But we're optimistic that'll happen here sometime soon.

Ladies and gentlemen, that is all that we have for questions for today. I would now turn the call back to Martin for closing remarks.

Thanks, everyone, for joining us today and we look forward to speaking with you on upcoming conferences. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.