Tony Will
President and Chief Executive Officer at CF Industries
Thanks, Martin, and good morning, everyone.
Yesterday afternoon, we posted results for 2021, in which we generated adjusted EBITDA of $2.7 billion, net cash from operations of $2.9 billion and a Company record free cash flow of nearly $2.2 billion. These results were made possible by the exceptional performance of the CF Industries team. We managed through two severe weather events in North America, completed the highest level of maintenance activity in our Company's history, navigated runaway gas cost in the U.K. and adeptly responded to a rapidly changing marketplace for our product. Consistent with our do-it-right culture, we did all of this safely. Our year-end recordable incident rate was 0.32 incidents per 200,000 labor hours, outstanding by any measure, but truly remarkable given the challenges of the year.
Several of the factors that drove these terrific results in 2021 are expected to persist into the foreseeable future, namely strong demand, high-energy spread differentials and outstanding execution by our team.
Let's start with the robust demand component. Significantly improving grain prices drove strong agricultural demand while global economic recovery led to high industrial use as well. With December corn trading at $5.90 this year and $5.56 for next year, we see strong ag demand for at least the next two years. On the economy-driven industrial demand side, the last two years have seen inflation -- the last two months have seen inflation at 7% year-over-year, and that doesn't appear to be slowing down. So the combination of strong ag and industrial demand, suggests overall global demand for nitrogen will continue at a torrid pace.
Energy spread differentials between North America and high-cost Europe and Asia production exceeded $20 per MMBtu for most of the fourth quarter, which provided the opportunity for us to achieve record margins for our products. As we look forward, the energy spreads continue in the $18 to $20 range for the balance of this year and remain well above $10 for '23 and '24. Those energy differentials provide an extremely attractive environment for North American producers and give us a lot of confidence about our continuing cash generation potential. On top of this backdrop of very strong demand and high energy spreads were a set of factors that negatively impacted global supply in '21.
Turnarounds and maintenance activity originally scheduled for 2020 was deferred into '21 because of the COVID pandemic and a desire to keep employees safe by limiting contractors coming on site. The catch-up in maintenance activities last year took an unusual amount of production out of the global supply. Two significant weather events in North America, Winter Storm Uri and Hurricane Ida further reduced production. The natural gas price spike in Europe and Asia, exceeding $30 per MMBtu for weeks at a time, caused plans to curtail or shut down in those regions, further reducing supply. And adding to these pressures, several important producing countries, in an effort to ensure nitrogen availability and affordability in their home markets, enacted export limitations or outright bands, including China, Russia, Egypt and Turkey. The result was significantly constrained supply at the exact time demand was surging, which led to the predictable outcome of rapidly increasing nitrogen prices. These dynamics came to a head in the second half of the year, and in particular, during the fourth quarter of '21 when global nitrogen prices reached record highs. This provided the market opportunity for the Company to deliver an all-time record quarter, both in terms of EBITDA and free cash flow.
This enabled us to return $800 million in capital to shareholders through share repurchases and dividends. We paid $500 million of long-term debt and returned to investment-grade credit ratings, while adding roughly $1 billion of cash to the balance sheet. As I said earlier, we believe the market dynamics of last year have plenty of runway ahead. To this environment, we bring unique capabilities honed over the past decade. Our investments in people, safety and growth have built the industry's highest-performing manufacturing network, as shown on Slide 6 of our materials. Slide 10 underscores how this advantage is amplified by the low-cost position that North American natural gas provides us. As a result, we are able to capture the significant margin opportunities in front of us.
Now, let me turn it over to Bert, who will discuss the global nitrogen outlook in more detail. Bert?
