Nutrien Ltd. Aktie

Greetings, and welcome to Nutrien's 2026 First Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A.

Thank you, operator. Good morning, and welcome to Nutrien's First Quarter 2026 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form.

I will now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments.

Good morning, and thank you for joining us today to review our first quarter results and the outlook for our business. The ongoing Middle East conflict has disrupted global fertilizer and energy markets, resulting in higher global benchmark prices and input costs. Despite heightened geopolitical uncertainty, Nutrien's strategic priorities, capital allocation approach and full year guidance remain unchanged. We continue to focus on what we can control, including operating our assets safely and reliably and serving our customers efficiently. Our first quarter results reflect this focus on operational excellence. We increased upstream sales volumes to 6.5 million tonnes, lowered controllable cash costs and delivered strong performance in our downstream retail business.

These results highlight the capabilities of our world-class operations, extensive distribution network and strong customer relationships built over many decades. In potash, we achieved a record sales volume of more than 3.5 million tonnes in the quarter, an indicator of the continued strength in global demand. We increased production from our low-cost 6-mine network and progressed mine automation investments that have proven to deliver safety and cost benefits. Our potash assets position Nutrien as the most reliable global supplier with a high-quality and low-risk resource base.

In Nitrogen, we attained an ammonia operating rate of 92% in the first quarter and increased sales volumes of upgraded nitrogen products to agricultural markets from our North American plants, demonstrating the benefits of recent debottleneck projects. Our reduced natural gas cost reflects having 100% of our production from low-cost North American nitrogen plants.

In Retail, our network was well positioned to meet strong crop input demand in our core markets. We continue to execute growth initiatives, including expansion of our proprietary products business, network optimization projects and tuck-in acquisitions. In the first quarter, we allocated approximately $45 million to complete a high-quality tuck-in acquisition located in the U.S. Corn Belt with a strong strategic fit within our distribution network. We also progressed portfolio reviews that are being pursued to enhance asset quality and provide greater focus and investment to assets with the strongest returns, free cash flow contribution and competitive advantages.

As previously announced, we are reviewing strategic alternatives for our phosphate business and remain on track to solidify the optimal path in 2026. The review includes completing a detailed assessment of individual assets and alternative configurations for our phosphate business. In parallel, we are progressing a sale process and received significant initial expressions of interest.

Second, we continue to evaluate all strategic options for our Trinidad nitrogen operations, including exploration of a sale of the facility. This work is aligned with our focus on strengthening our core North American asset base. Lastly, we are reviewing each component of our Brazilian business as we assess the best way to participate in the market's long-term growth. As part of this review, we have commenced a sales process for our Brazilian soybean seed business that is expected to be completed in the second half of 2026.

Now turning to the market outlook. Middle East exports are a critical part of global fertilizer and energy trade with the ongoing conflict having the most direct impact on nitrogen and phosphate supply as well as associated feedstock cost and availability. The conflict has directly impacted over 30% of global urea trade and approximately 25% of ammonia and phosphate trade that relies on the Strait of Hormuz to access global markets.

Elevated natural gas costs and reduced LNG availability have also impacted nitrogen production and costs for producers in Asia, Europe and other key regions. For phosphate, higher sulfur and ammonia input costs have pressured margins and resulted in lower global operating rates. Looking ahead, the path of supply normalization will be shaped by this pace of 3 key factors. First, a full reopening of Strait of Hormuz and key trade routes is required to allow stranded product to reach global markets.

Second, in the event that the conflict is resolved, production assets that have been idled would require additional time to restart, albeit with some level of operational uncertainty. Finally, a portion of capacity that is currently offline due to damage either at production sites or upstream will take several months and, in some cases, years to return. Taken together, we expect the normalization of nitrogen and phosphate supply is likely to be uneven. The conflict has not directly impacted potash supply, and we continue to see strong potash demand across all key global regions. We maintained our forecast shipment range of 74 million to 77 million tonnes, with demand trends expected to test existing global operating and supply chain capabilities through 2026.

Global potash benchmark prices increased over the past few months have been commensurate with the strong fundamentals as well as increased freight costs.

With that overview, I'll now turn it over to Mark to provide more detail on our first quarter financial performance, guidance assumptions and capital allocation priorities.

Thanks, Ken. As Ken described, our operating performance has progressed well to start the year, and our full year guidance ranges remain unchanged. Adjusted EBITDA in the quarter increased to $1.1 billion, reflecting strong customer demand, higher global benchmark prices and solid execution in our upstream and downstream businesses. Retail adjusted EBITDA totaled $108 million in the first quarter, which is typically a seasonally slower period for our retail business. We saw increased demand across our core geographies in the first quarter, resulting in higher crop nutrient sales volumes and stronger proprietary products gross margins in the U.S. and Australia.

Importantly, our expense reductions achieved over the last 2 years have been maintained as first quarter expense changes were driven by higher downstream sales volumes. We've maintained our full year retail adjusted EBITDA guidance range of $1.75 billion to $1.95 billion. We continue to expect high single-digit growth in our proprietary products gross margin in 2026, supported by the launch of new products, organic growth in our core retail geographies and the expansion of our international business.

Similar to prior years, we expect first half retail earnings to account for approximately 70% of the full year total. In potash, we delivered adjusted EBITDA of $578 million in the first quarter, driven by higher global benchmarks and record sales volumes. Nutrien has an extensive midstream distribution network serving key markets across North America and internationally, one of our key competitive advantages.

We utilized this network to deliver over 3.5 million tonnes of potash in the quarter and expect annual sales volumes of 14.1 million to 14.7 million tonnes, in line with our historical average share of global shipments. Capitec is fully committed through the end of June, and we anticipate a similar split between offshore and domestic sales volumes in the second quarter compared to the prior year.

Our Nitrogen operating segment generated adjusted EBITDA of $482 million in the first quarter, primarily due to higher global benchmarks. Our sales volumes reflect no production from Trinidad and New Madrid as reflected in our annual guidance assumptions. This was partially offset by higher upgraded product sales volumes directed to domestic agricultural markets from recently completed debottleneck initiatives. We maintained our annual nitrogen sales volume guidance range of 9.2 million to 9.7 million tonnes, which includes execution of planned turnarounds at 3 facilities in 2026.

Prior to the onset of the conflict in late February, approximately 35% of our second quarter planned nitrogen sales volumes were committed, a similar percentage compared to the prior year. In phosphate, we generated adjusted EBITDA of $57 million in the first quarter. Higher sulfur input costs offset the benefit of higher global benchmark prices and sales volumes compared to the same period of 2025. The business demonstrated reliability improvements in the quarter with a 20% increase in production volumes compared to the prior year.

Our phosphate sales volume guidance remains unchanged. However, we expect further pressure on phosphate margins in the second quarter due to elevated sulfur and ammonia input costs. As we look forward to the remainder of 2026, we expect free cash flow to be supported by tight global fertilizer supply and demand fundamentals, business improvement and organic growth drivers, combined with a rigorous focus on optimizing our portfolio. Alongside strong operational performance, we view consistent capital allocation as essential to enhancing our competitive position. To that end, our capital expenditures guidance for 2026 remains unchanged at $2 billion to $2.1 billion.

Last year, we completed share repurchases of approximately $550 million and reduced adjusted net debt by approximately $600 million. We intend on continuing to repurchase shares on a ratable basis with a pace of approximately $55 million per month thus far in the second quarter, and we see opportunities to further strengthen the balance sheet in 2026.

I'll now turn it back to Ken for final comments.

Thanks, Mark. Nutrien is well positioned to generate value for shareholders under any market scenario. We operate low-cost and reliable upstream assets, a midstream network that has the reach and flexibility to capture efficiencies across the value chain and a downstream network that is positioned to reliably serve growers with a comprehensive portfolio of value-added products and services. We continue to take purposeful steps to simplify the business, strengthen and grow our core asset base and improve capital efficiency. These priorities are designed to drive structural free cash flow growth and generate sustainable returns through the cycle.

To close, I'm encouraged by the team's execution in the first quarter and positioning of the business for the remainder of 2026 as we continue to stay the course on our strategic and capital allocation priorities.

With that, we'll be happy to take your questions.

[Operator Instructions] First question comes from Andrew Wong from RBC Capital Markets.

I wanted to ask about the longer-term implications that you see from the Iran war and the Strait being closed. We've had 2 major fertilizer food shocks now in less than 5 years. Are you seeing countries that are net fertilizer and food importers looking to build up more inventories? Could that drive more demand that's a little bit more elevated in the next year or 2?

Andrew, thanks for the question. Yes, there's a lot to unpack there, obviously, given that it's still early days in terms of questions like building inventory, we're still short of product given what's going on in the Middle East. But we sort of think about it, given the impacts with more than 30% of global urea trade being impacted 25% of ammonia, 25% of phosphate.

You sort of think of it over 3 time horizons where we're watching milestones for each signpost costs, for each -- and of course, the first one is just the opening of the Strait of Hormuz and the inventory that's caught upstream of the Strait in the Persian Gulf and the pace at which once, of course, the war is over, and we're all hoping and watching for that, the pace at which those volumes come to the customer unload and then get back into being filled back up again, another one sort of normalization of logistics and trade following the opening of the Strait of Hormuz. So that's one. Two is, of course, we know that a significant swath of production in the Middle East is not operating at the moment. And so we'll be watching very closely for signposts that say those facilities are starting back up. We know that start-up of those type of facilities can be bumpy.

We have experience with that ourselves. And so the pace at which we sort of see normalization of operations to the extent that, that's possible on the back of normalized logistics. So that would be the second piece. And that, of course, would be a bit further out in time. And then third would be watching for actual damage of physical infrastructure, whether that's on nitrogen production facilities themselves or on gas, natural gas production, of course, the damage in the South Pars gas field, 20% of the Qatar LNG facility that won't be back up online for 3 to 5 years. That has serious implications, obviously, for these huge export markets, Europe and South Asia and Southeast Asia that are dependent on Qatar gas.

So those 3 things and the pace at which that happens and what that means for volumes, we can't say at the moment. What we can say is we believe it's going to be tight for a period of time here, given just the huge role that the region plays. I will say that other ones to watch in the market. And I think consistent with what you're saying about inventory building is, for example, India has established a task force now on nitrogen and devising plans in light of how much natural gas they import and their own nitrogen infrastructure to ensure that they get the volumes.

Similarly, China looking to restrict urea exports. We're seeing 3 million to 4 million tonnes perhaps compared to the 5 million tonnes last year, Europe facing $16 TTF pricing and depending on Tampa ammonia, whether that's an economic endeavor or not. So there's a lot of moving parts there, Andrew. Again, we're watching those sort of 3 -- those 3 sort of milestones as it relates to opening of this strait, normalization of production and then what happens with actual infrastructure damage. But we would say that we expect prices to be tight for some period of time.

Your next question comes from the line of Vincent Andrews from Morgan Stanley.

Wondering if you could speak a little bit more to what you're seeing in retail, both for the remainder of the Northern Hemisphere season, but also how you think the back half of the year would play out. We're definitely sensing some investor concern about farmers' economics and thrifting and things like that. So if you could talk about sort of what, if anything, you're seeing on that and what gives you the confidence to stay within the guidance range for the year? And maybe just a reminder of what we saw last time around when maybe in the post Russia-Ukraine time period when we had some high prices as well.

Yes. Thanks, Vincent. So yes, maybe I'll just say a few words about what we're seeing thus far into the year and then hand it over to Mark for our guidance assumptions and what gives us confidence to maintain our guidance range of $1.7 billion to $1.95 billion in EBITDA out of our downstream business. So I'd by saying notably, corn prices have been hovering for December corn up to $5. And so that is a bit of a tailwind. And that's true for soybean prices as well. We have seen strengthening. Thus far into 2026, we've had strong customer engagement with our grower customers, and that's been in line with price expectations, prior expectations.

And it's supported by above-average planting progress for this time in the year and the need to replenish crop nutrients in the soil given the huge corn and soybean crop that was taken off last year. So we're maintaining our estimate of acres, 94 million to 90 million acres of corn, 84 million to 86 million acres of soybeans. And this far into the year, we're not seeing farmers switching. So again, maintaining those ranges and therefore, maintaining our own guidance ranges.

I'd just say, again, growers are going to do what they need to do to maximize yields in this environment. We saw that with our proprietary products business in the first quarter and in April as well. And we've seen healthy, again, healthy crop input demand over the first 4 months of 2026. So on balance, up to this point, and on average, that's what we've seen so far in 2026. For the balance of the year and our guidance assumptions, I'll hand that over to Mark.

Thanks, Ken. Look, I think Ken summed it up pretty well. I think the main punchline is that the business is performing well. We've seen strong customer engagement year-to-date. We feel very confident in the midpoint of our guidance and the range that we laid out to start the year. And the majority of the assumptions that we laid out at the start of the year actually remain the same across the business. Just to reiterate, we expect high single-digit growth in our proprietary products gross margin this year. And again, that's coming from new product launches in North America, increased demand in core retail geographies and the expansion of our international business and our business in Australia.

We assume that favorable weather in Australia and a stronger livestock market over last year will result in some improvement there. And of course, our continued efforts to manage cost across the business. If there's been any changes or small shifts, it's that I think relative to February, we would now anticipate that higher crop Nutrien gross margins on a per tonne basis would be ahead of our prior expectations. And we think that will at least offset any potential reduction in demand we might see, which is primarily in phosphate, as we've talked about, and some higher fuel expenses as a result of the war in the Middle East. But if you step back and look at the business as a whole, we don't really see any change to margin expectations across our other product segments, and we've largely maintained our acreage projections, as Ken said. So you sum all that up, and we feel really good about the guidance for the year and what we're seeing from customers so far this spring.

Your next question comes from the line of Joel Jackson from BMO Capital Markets.

I know you don't give a lot of guidance, but could you talk about like you would think with the better price we've seen in nitrogen, there's a lot of puts and takes, the better price of nitrogen, some better price in potash. Like are you feeling better about this year's outlook and earnings than you were 3 months ago? Maybe you can try as best as possible to kind of bucket some of that? And why didn't you raise the retail EBITDA guide? It would seem like you may get some markup in inventories. It would seem like you get something better from a higher commodity price environment. Maybe you can just elaborate on that, please.

Thanks for the question. Yes, I think it's fair to say we are feeling better than at the start of the year. And as you, I think, appropriately put it, there's a few reasons for that. If we talk about potash and the very strong global demand that we're seeing, our 74 million to 77 million tonnes that we're maintaining and that's low inventory starting the year in Brazil, multiyear lows. We saw that in China as well with a very early settlement in February at $349, and yet Chinese inventory is going to remain low at sort of 2 million tonnes at the port. I mentioned the huge crop that came off in 2025 and the need to replenish that for our part. We had a fully subscribed winter fill at $355 a short tonne and our latest posted price is $385 a tonne.

Southeast demand is strong. So we look around the world and on potash, we're constructive, and we've seen that in some firming in the price, and that really is owing to the potash fundamentals, the fact that potash continues to be the most affordable of the crop nutrients and the fact that potash is certainly less impacted than other crop nutrients given what's going on in the Middle East. So as you said, looking at the different sort of buckets, that's one, and we're constructive on nitrogen. Our plants are running well in this environment. And so with prices where they're at, given this conflict in the Middle East and some of the discussion that we've had about the duration, the potential duration of that, yes, we've been constructive on nitrogen.

Our focus will continue to be to safely and reliably run those plants now with half of them enjoying Henry Hub pricing and the other half enjoying AECO pricing. And phosphate is a different story. We've talked about that. Phosphate is challenged for all the reasons that we talk about, sulfur pricing, ammonia pricing and a market that was frankly tight even prior to this conflict in the Middle East. So that will continue to be a challenge for us. And then Retail, and you mentioned our Retail guidance. Yes, we're watching the spring. We're not through the planting season yet. And so there are a lot of things can happen yet through the planting season. We are absolutely constructive on our retail business. That's the reason we've maintained our guidance range, but we're not going to, at this stage, in the planting season and in the year, start to make prognostications about how the balance of the season could go. We are just confident in that range.

Your next question comes from Hamir Patel from CIBC Capital Markets.

In Brazil, you pointed to a process for the soybean seed business coming to fruition in the back half. What's your latest thinking on the total opportunity to improve returns in Brazil? And what portion of that would be the soybean seed business?

Yes. Thanks, Hamir. What I'll say is that the soybean business itself we'd sort of say is immaterial in the context of materiality. But yes, we are pursuing a sale of that. If we look at the broader business that we have on the ground in Brazil and the actions that we've taken, which we've talked about, idling blenders, selling of the 5 -- idling 5 blenders have sold 3, the steps that we've taken on cost reduction and reducing head count in that part of the world to focus on collections, the idling of unproductive locations, 64 of them and getting that business into a position where it's albeit small, generating a bit of EBITDA. And in the backdrop of all that, yes, making portfolio decisions, seeds is one of them.

Our proprietary products business continues to do well in Brazil, and we continue to focus on that, which leaves our retail operations in Brazil. And that really is going to be the focus of the balance of 2026 is how it is that we think about exiting that Retail business. And we're just working on that at the moment. Brazil continues to be a core market for us. It's a growing agricultural region. We supply a lot of potash to that part of the world, one of the largest. And we know that that's going to continue to grow as the Brazilians open up more acres, which they do every year and with all the infrastructure build-out required to get those volumes in land onto the acres. So again, Brazil, very important for us, supply of fertilizer potash and proprietary products, the balance of it, well, we intend to have some conclusions on at least the plan by the end of this year.

Your next question comes from Ben Isaacson from Scotiabank.

Just a quick question on rising freight, logistics and overall cost inflation. Can you talk about your ability to keep your netbacks stable or rising? And once the Iran war winds down and the Strait of Hormuz opens up, will there be improvements? Or have you -- or do you expect to see structural changes? And ultimately, will this just be passed on to customers? Or will there be a temporary risk to your margins?

Yes. Thanks, Ben. The reality for our upstream business is that these are highly commoditized competitive markets. And so as we look at moving products around the world and increased freight prices, which is true, that plays into sort of the commodity space and the industry's cost to serve. At the moment, we would say that certainly for potash and for nitrogen, the increased freight costs are being more than offset by what we're seeing with prices. And again, in potash, that's the fundamentals at work and those were at work prior to any conflict in Middle East.

And then for nitrogen, that is clearly a result of what's going on in the Middle East. So that's more than offsetting the freight cost. Whether it's a structural shift in freight costs, I think it's fair to say we don't know. We're watching that closely, but the questions around any risk premium to product that comes out of the Middle East now and even in post-war environment and insurance costs and crewing ships and all those things. We'll be watching that closely, but I think it's fair to say at this stage, we don't know. Maybe I'll pass it over to Mark. We are -- Ben, we are watching our own fuel costs closely and freight and shipping costs closely in order to make sure that we're managing that to the best of our ability. But Mark, maybe you want to say a few things about that.

Yes. Thanks, Ken. I don't have a lot to add. I think Ken really nailed it at the beginning of the conflict as it relates to our own fuel consumption in the business, as we mentioned this morning in retail. We've been really looking at finding efficiencies, optimizing and offsetting those cost increases where we're seeing them, and we think we're doing a good job of that. And as we mentioned, it really hasn't affected our view of the business as we're still very constructive on our retail outlook and have maintained our guidance at midpoint, as Ken said. And then on the potash side, Ken also framed it very well. It's really the supply-demand fundamentals that are at work.

And we've seen a slowly firming price prior to the conflict, and that's continued. And so while we've seen some marginal increases internationally, primarily in the cost to serve, we think those are being more than offset by the recent strengthening in prices we've seen as a result of tight supply-demand fundamentals in international markets. And so at this point, we feel like it's really the market forces at play. And as Ken said, we can't really look beyond the conflict to what will happen. But at this point, we see positive signs for the business.

Your next question comes from Chris Parkinson from Wolfe Research.

I just want to get back to the global potash markets. When you take a step back and you look at whether it's Latin American all season, it seems like things are doing better than expected. Southeast Asia, I thought you initially thought it could be down. It seems like it could actually be flat to up. The United States had a little bit of delayed reaction, but products are moving. Is there any reason to believe that would be below the midpoint of your guidance? Is there potential upside? I'd love to hear your perspectives on that, especially given Canpotex is sold out through the end of the second quarter.

Yes, Chris, I think you characterized it quite well. If you look market to market, we are seeing strong shipments, and we're seeing low inventories, which means that product is going to ground. And if we look at the markets where we had anticipated growth this year, markets like Latin America, like India, like China and even a little bit in North America, we see that coming -- happening. It's playing out that way. And so it does give us confidence in that 74 million to 77 million tonne range. I will say that when -- we believe when you get to the higher end of that range, we start to see operating rates and global logistics being tested.

You sort of start to hit a ceiling here. So you get to that upper end, it could be that the constraint then becomes operating rates and logistics. In the meantime, yes, Southeast Asia is strong. They had built some inventory last year. So we had sort of flat from last year. But to your point, palm oil is MYR 4,000 per tonne. There's palm plantations are doing well. And then we have $390 per metric tonne for standard grade in that part of the world. So we've seen some strengthening there. And again, it's the most affordable of the crop nutrients. So Chris, that has given us the confidence to maintain our 74 million to 77 million tonnes. Last year, it was 74.5 million. Do we think it's going to be more than last year? Things appear to be playing out that way.

Your next question comes from Steve Hansen from Raymond James.

I just want to follow up on the prior question, actually. And just in the event that the sales prospects do improve through the year, how do you feel about your ability to flex at the operational level, just considering all parts of the value chain and the actual operations themselves, the logistics of the West Coast, et cetera. I mean, how do you feel about the ability to flex up if the demand warrants?

Yes. Thanks for the question, Steve. We feel good. We feel good about our ability to produce. And we've guided this year, 14.1 million to 14.8 million. We've talked about sort of the 15 million tonne operating capacity. But of course, given our warehousing and volume of product that sits under roofs all over the continent, I mean we have the ability to flex inventory as well. We have our turnaround schedule in our potash business laid out. We always have a little opportunity perhaps to flex that as well.

So we have some tools in the toolbox that we can flex and meet the needs of our customers. So when we think about that top end of 77 million tonnes, for example, and the role that we would play in that, which sort of reflects the top end of our own guidance, we feel confident.

Your next question comes from Duffy Fischer from Goldman Sachs.

Question just around 2 of your strategic reviews. So your phosphate business in Trinidad, the events in the Middle East, obviously, are making the pie in Trinidad a lot bigger, whether that's to split that and share that with the government or to offload that asset to somebody else. Is that helping the process there, do you think? Is it demonstrable enough that it moves the needle? And same question for phosphate. I mean, obviously, it's a little bit more mixed there. You've limited global supply of phosphate with what's happening in the Middle East, but you've hurt the cost position on sulfur. So the Middle East stuff changed either the direction of either those 2 strategic reviews in your mind?

Yes. Thanks for the question, Duffy. I would say that first of all, we're in the market with both of those portfolio reviews. And so we'll see. We are testing the market as we speak. With respect to Trinidad, I think the question becomes, is there confidence around developing additional gas in the region in light of what's going on in the Middle East, of course, some of the major E&P companies are having that discussion.

Does that give someone who might be interested in acquiring the asset more confidence? It could, but that remains to be seen as we test the market. It's the same story in phosphate. We're out -- we're testing the market remains to be seen. We know that in this -- given the current environment, something has to change. It's an unsustainable environment for the phosphate business. And so we'll be watching that closely.

In the meantime, we have significant interest in our phosphate assets that we saw that immediately after we talked about testing a sales process, and that interest has remained ever since. So yes, we'll see what happens and its early days in those discussions. We'll see what happens. But given the interest in our phosphate assets, given the potential for gas development in and around Trinidad, we'll be working hard on maximizing the value of those assets.

Your next question comes from Jeff Zekauskas from JPMorgan.

Your urea prices moved up very nicely. So when I look at your ammonia prices year-over-year, maybe they're up $60 a tonne. Is there a reason why they're not up more in that the ammonia market has really been pretty strong? I think the movement at some of your competitors has been a little bit higher. Can you talk about your general ammonia values? Is there something constraining? Is there opportunity coming up?

Yes. Thanks for the question, Jeff. I mean urea, ammonia, ag, industrial, different movement there, but I'll pass it over to Chris Reynolds.

[ Ben, ] thanks for the question. What we do like about our Nitrogen business is the diversity we have between those finished ag markets and also the industrial markets. And as you know, about 60% of the products we produce in our nitrogen portfolio go towards that ag market and 40% industrial. So we like that. We like, obviously, the cost position we have in North America, given the gas fundamentals. And so we've got good diversity there. In terms of that mix between ammonia, urea, UAN pricing, we're not concerned about that. We have industrial contracts that are linked to the Tampa index. And obviously, that moved up quite significantly recently.

And so again, we feel good about our position in both of those main markets and also our cost position. So no concerns there. And as Mark mentioned in his prepared remarks, I've been really pleased with our operational reliability in nitrogen as well.

Your next question comes from Ben Theurer from Barclays.

A lot of ground being covered, but I wanted to get your views as to what potential implications weather phenomenon and being talked about some of things such as El Nino -- super El Nino could have as it relates to the demand, particularly in South America, which tends to be hit hard if something like that were to happen. So what does that do to like your outlook, particularly in retail as we think through the main planting season that is yet to come in South America?

Great. Thank you, Ben. And yes, as usual, we're looking at the different parts of the world and bread baskets of the world and the markets that we serve and the weather. And it's once again a mixed bag. But maybe I'll hand it over to Jason Newton, our Chief Economist, to talk about sort of our assumptions and what we're seeing.

Yes, as we look at our -- the markets that we're in, we don't expect to see any major impacts in North America or South America, particularly in the growing season that we're going into now. So no major areas of concern driven by typical trends from El Nino. The areas where you typically see impacts from a weather perspective from El Nino are Southeast Asia, in some cases, India and Australia. But Australia is going into the planting season, much better soil moisture generally than was the case a year ago.

Your next question comes from Edlain Rodriguez from Mizuho.

Ken, a quick one for you. I mean there are concerns out there that as nitrogen prices have surged, like farmers will try to lower the fertilizer basket costs. And typically, this might come at the expense of potash and phosphate in terms of application rates. Like what's your view of that? And is that a risk that you contemplated for the rest of the year or early next year?

Yes. Thank you, Edlain. What I can say is we are not seeing that across nitrogen and phosphate, the crop nutrients you mentioned. I will say we've seen some of that in phosphate, and we've seen a bit of that here in the spring in phosphate as well. But as it relates to nitrogen and potash, again, we have not seen that. We've seen what we would call an active normal spring thus far into the year. We've had strong grower engagement and the volumes are moving. We have corn acres, we don't speak shifts there. So 94 million to 96 million acres, and that has a certain nitrogen requirement right there.

We look out over the balance of the year and sort of the post-emergent application, we're having -- we're expecting a constructive setup here for the balance of the year. And farmers, again, just looking to maximize yields in this environment, especially in a year after significant crop nutrients were extracted from the soil from this huge corn and soybean crop. So that's what we're seeing, Edlain, and that's how we're kind of thinking about the balance of the year.

Your next question comes from Mike Sison from Wells Fargo.

When you think about 2Q and kind of where nitrogen urea prices are setting up, do you sense that these levels are peakish in nature? And then when you think about beyond the conflict and things start to normalize a little bit, do you think that prices because of the damages that potentially are out there and the time it takes to bring it -- to get everything back on that they could stay elevated into maybe potentially next year and beyond? Or how do you see the longer-term impact from the conflict?

Yes, Mike, thanks for the question. I think I just -- I would go back to what we talked about earlier in terms of the signposts that we're watching for as things, if we can use the word normalize in the region. The reality is, again, these are highly commoditized markets. And frankly, prior to the conflict in the Middle East, markets that were relatively balanced with the exception of phosphate. But if it's in nitrogen, we're talking about relatively balanced. This is a huge supply shock that we're experiencing at the moment. I think there's no question about that, especially in the time of the year when the Northern Hemisphere farmers are getting out and planting their crops.

How this plays out into the future, I think, is related to those signposts. And I think the big one, Mike, to your question is just how much -- perhaps 2 things, just how much infrastructure damage there is in the region. And for a market that was balanced prior to that damage, what does that mean for the tightness of supply and demand? And perhaps two, any risk premium that the world might place for the time being on shipping out of that region? And what does that mean for freight costs, insurance costs, all those things or even geographic diversification to the extent that, that's possible among the customer base. So I think to your question, we would say duration, we don't know as this plays out and could be uneven in terms of opening of the Strait of Hormuz, normalization of production and then ultimately repair of infrastructure. But to your point, could we see an elevated price environment into 2027, that's certainly one of the possibilities.

Your next question comes from Lucas Beaumont from UBS.

So I just wanted to talk about Retail. So I guess, both for yourselves and for the industry more broadly there. So as we kind of come out of the season here, I mean, are you anticipating challenges, I guess, in refilling inventory into the channel, I guess, for the industry and for growers given just where the pricing dynamics are currently on nitrogen and phosphates.

So I guess with growers kind of potentially expecting that prices are high and then they may come down as we sort of go through the year, it seems like, I guess, the incentive to sort of purchase and refill in the near term is going to be depressed. And then I just wanted to just kind of get your view on how you see that flowing back into the wholesale market on the nitrogen side. Is that going to create a large kind of demand air pocket as we sort of move into the middle part of the year that we should think consider as well?

Thanks, Lucas. I'll say, coming into the season, of course, we had purchased all of the product that we needed for our grower customers right through the channel. And so from an inventory perspective, we were well set up for the spring planting season. As we come through the spring planting season, again, we turn back to Nutrien that reaches right through that value chain. So our upstream business producing potash and our Nitrogen business, which North American plants and servicing North American customers reaching right through on to farms in North America and how it is we think about refilling the channel, we have a lot of confidence. But Chris, maybe you want to say a few more words about that.

Yes. Lucas, thanks for the question. As Ken alluded to, you think about the infrastructure we have from a distribution point of view. And we're expecting not just our own distribution from a retail point of view, but that of our wholesale customers as well to be very empty as we come towards the end of the spring. And so we're not concerned about containment or things backing up. There's going to be room to put that product even if there is a little hesitancy to start filling immediately after the spring season.

But I think like everyone, like we've talked about on this call, a lot is going to depend on the length of the conflict in the Middle East, when does the Strait fully reopen, get a better understanding of those production facilities and that supply of product. And I think the industry as a whole is going to be watching that and then making those purchasing decisions based on that. But we feel very confident in terms of our production, our capability, but then more importantly, our distribution network that can be ready to be deployed even if, as I said, there's a little hesitancy at the start of that summer fill period.

Your next question comes from Mazahir Mammadli from Rothschild & Co Redburn.

I just have one question on the Nitrogen segment. So I appreciate you've communicated that the nitrogen -- the Trinidad operations have been shut down and the gas supply agreement has expired. I'm just curious, is there a scenario where perhaps Nutrien strikes an agreement with the Trinidad government, perhaps in coordination with U.S. or Canada government to temporarily at least restart production because those volumes are kind of desperately needed in the market. I'd be curious to hear your opinion.

Yes. Thank you, Mazahir. What I'd say is we are in the market in a sales process at the moment. And in the meantime, gas availability and gas pricing continues to be a challenge in Trinidad. Some port fees that are being charged to us that remain -- continue to be a challenge and the access to the port associated with those sort of back fees continue to be a challenge. And we have conducted a safe shutdown of the facility and like I say, in the market now and through a sales process. So that's our focus at the moment is engage with prospective buyers in the region or otherwise to see what the value of those assets would be.

Your next question comes from Laurence Alexander from Jefferies.

You alluded to the impact of higher sulfur costs and sulfuric acid. Could you break out kind of what your sensitivity is there? And more importantly, could you dig into how you think the industry could handle or adapt to the Strait of Hormuz being closed for longer? We've talked with other companies with exposure to sulfur, everyone seems to have the view that the fertilizer complex is the one that's going to adjust. And curious, how you think that such an adjustment might happen?

Yes. Thanks, Laurence. Just in terms of specific sensitivity to sulfur costs, it does take -- and then I'll hand it over to Mark to talk more broadly about some of the potential adjustments that you cited. It's kind of a 1:1 ratio sulfur to a tonne of P205. So when you do the math, and this is just a general sensitivity kind of rule of thumb, there's a $25 increase in sulfur costs. It's about a $35 million reduction -- earnings reduction for our phosphate business. So $25 increase, up $35 million down. But Mark, do you want to maybe talk a little bit about the second part of Laurence's question?

Sure. Thanks, Ken. Laurence, I think Ken answered your direct question in terms of how the sensitivity feels within the Nutrien phosphate business. I think more generally, we just reiterate the comments from an overall industry perspective that when we look at our business and we look at what's happened with the conflict in the Middle East, the reality is that ammonia and sulfur benchmark prices or input costs have risen more than finished phosphate pricing since the beginning of the conflict. Hence, our comment in our prepared remarks that ultimately, we believe that as we enter the second quarter, we're going to see elevated pressure on phosphate margins.

As Ken also alluded to in a prior question, we don't see the situation as sustainable. And ultimately, we don't believe that this can be sustained for a long period of time. But in the near term, that is the challenge, and Ken laid out the financial sensitivity. On your second question about the fertilizer complex adjusting or adopting to a new reality around the Strait of Hormuz closure, I think when you go back to the comments that Ken has made earlier in the call, the reality is the world is just so dependent on fertilizer and inputs for fertilizer, including sulfur and energy and raw materials coming from the Middle East that there's no easy adjustment to what we've seen here.

Given the sheer volume across nitrogen products, phosphate products and energy that we have exiting the region, it really is on that time horizon that Ken has laid out. Even with the reopening of the strait, that could take some period of time to normalize. But in the absence of that, we expect that you'll continue to see very tight supply-demand fundamentals for nitrogen and phosphate.

There are no further questions at this time. I will now turn the call back over to Jeff Holzman.

Thank you for joining us today. The Investor Relations team is available if you have follow-up questions. Have a great day.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good afternoon. My name is Jeff Holzman, Nutrien's Senior Vice President, Investor Relations and Financial Planning and Analysis. Before the start of today's meeting, we would like to outline the agenda and various procedures and guidelines. In terms of agenda, our Chair, Russ Girling, will call the meeting to order and address various preliminary matters. The items of business to be voted on will then be moved to be followed by formal discussion and a brief general shareholder question-and-answer session. Registered shareholders and proxy holders of record are now able to submit comments or questions via the Messaging platform on your screen, and the electronic ballot for voting is also now available on your screen.

You are encouraged to submit any comments or questions and complete your ballot in advance of the Q&A session. Voting will then close, and the Chair will report the voting results. During the formal discussion and Q&A portion of the meeting, comments or questions will be read aloud before being addressed. And the name of the submitting shareholder or proxy holder may be disclosed. Comments or questions that are redundant or that have inappropriate language or otherwise unduly disruptive to the orderly conduct of the meeting will not be addressed, and questions that are not part of the formal discussion of the meeting's items of business may not be addressed.

If, during the course of the meeting, we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as possible. Finally, I would like to remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve risks and uncertainties discussed in our filings with securities regulators. A number of factors and assumptions were applied in the formulation of such statements, and actual results could differ materially.

For additional information with respect to forward-looking statements, factors and assumptions, we direct you to Nutrien's public filings. I will now turn things over to Russ.

Thank you very much, Jeff. Good afternoon, and welcome to Nutrien's Annual Meeting. My name is Russ Girling, and I am the Chair of the Board of Directors. The meeting will now come to order. As Chair of the Board, I will act as Chair of this meeting. In the event that I am disconnected from the meeting as a result of a technical issue, Mr. Seitz will assume the role of Chair of the meeting. I'm appointing Clint Weiland, the company's -- Corporation's Assistant General Counsel and Assistant Corporate Secretary as the Secretary of the meeting. With the concurrence of the meeting, I appoint Jennifer Oliver of Computershare Investor Services to act as scrutineer.

I have been informed by the scrutineer that we have shareholders present or represented by proxy who hold a sufficient number of shares to constitute a quorum. I therefore declare that there is a quorum at this meeting. The scrutineers' report will be kept by the Secretary with the records of this meeting. This year, Nutrien used notice and access to deliver its annual financial statements and meeting materials. And as a result, the notice of the meeting and the proxy circular are accessible on Nutrien's website and under Nutrien's profile on SEDAR+ and EDGAR.

I've received the affidavits of publication of the record date for this meeting and the distribution of the notice and access notice and the proxy form. I direct that a copy of the notice, together with proof of service, be kept by the Secretary with the records of the meeting.

I now declare the meeting regularly called and properly constituted for the transaction of business. The first item on the agenda is the presentation of the comparative consolidated financial statements for the year ended December 31, 2025, and the report of the auditors. In accordance with the Canadian Business Corporations Act, the statements are presented to the meeting, but no other action is required with respect to them.

It is now in the order to move to today's formal items of business, I will move each item, and I've been advised that Mr. Seitz and Mr. Weiland, both proxy holders in attendance today, that they would be prepared to second each of the motions I so move. Accordingly, unless there are any objections, I take such motions as seconded with no further action needed.

Voting on the applicable items of business to come before today's meeting is being conducted by a single electronic ballot that is now available, and voting will close approximately 30 seconds following the conclusion of the formal discussion and Q&A session. Once the voting closes, the scrutineer will tabulate the results of the vote for each matter.

All of the items identified in the notice of meeting will now be moved. First is the election of the directors. The management proxy circular sets forth the background of each nominee and the qualifications considered in making director nominations. This year, 12 candidates listed in the management proxy circular will be nominated for election today. The proposed nominees are: Christopher Burley, Maura Clark, Michael Hennigan, Miranda Hubbs, Raj Kushwaha, Consuelo Madere, Keith Martell, Aaron Regent, Ken Seitz, Nelson Silva, Carolyn Tastad and me, Russ Girling.

Thank you to all the nominees for agreeing to stand for election. I move to formally nominate as a director each of the proposed nominees. As there are no nominations in accordance with the advanced notice requirements of the company's general bylaw, I declare the nominations now closed. I will also move to elect each of the 12 named individuals as directors of the corporation.

As advised earlier, I will take such motions as seconded. Formal discussion, if any, will take place once all of the items of business identified in the notice of meeting have been moved.

The next matter on the agenda is the appointment of the auditors. I move that a resolution being -- be approved reappointing KPMG LLP Chartered Accountants as the auditors of the corporation to hold office until the close of the next annual meeting or until a successor is appointed and take such motion as seconded.

The next item of business before the meeting today is the consideration and approval of the nonbinding advisory resolution accepting the corporation's approach to executive compensation disclosed in the management proxy circular. I move that such resolution be approved and take such motion as seconded.

The motions are now open for formal discussion and general shareholders -- all shareholder questions will now be answered. Jeff, as you see them, please read any comments or questions that we need to address?

There are no comments or questions to be addressed.

Discussions of the items of business and our general Q&A are now closed. Accordingly, there is now 30 seconds remaining for you to complete your ballot, after which your ballot will be automatically submitted. As a reminder, you can vote for or against the election of each of the 12 director nominees; for, withhold in respect of the appointment of KPMG; and for or against the nonbinding advisory resolution regarding Nutrien's approach to executive compensation. We'll play a bit of music in the background here during the final voting period and then come back to you.

[Voting]

Based on the proxy tabulation results provided by the scrutineer regarding the matters to be voted on, with respect to the resolutions regarding the election of each of the individuals nominated as directors, I declare that each of the 12 nominees is elected as a Director of the corporation.

With respect to the resolution reappointing KPMG LLP as auditors of the corporation, I declare this resolution carried. With respect to the nonbinding advisory resolution accepting the corporation's approach to executive compensation, I declare this resolution carried.

There being no further business, I move that the meeting be terminated and take such motion as seconded. I declare the motion carried and the meeting is now terminated.

In conclusion, I'd like to note that Ken and our executive team will host our first quarter 2026 conference call to discuss Nutrien's results and outlook tomorrow at 10:00 a.m. Eastern Time. Thank you again for taking the time to join our meeting today and your continued support of Nutrien, and have a great day. Thank you.

For the sake of kicking the conference off, we'll get going. So Ken and Mark, you just came off a very strong quarter, reported earnings last week, clearly capitalizing on the favorable Nutrien backdrop. So maybe we want to start off a little bit, if you want to rehash the year that was 2025 and where the company stays, and then we'll dive in and start there.

Yes. Thanks, Matt, and good morning, everyone. Good morning, Steve. It's good to see you. I think like everyone, it's good enjoying seeing Steve. Yes. So 2025 was a good year for us. And I would say that, that is true even though we obviously had some headwinds in North American agriculture, and we could talk about corn, soybeans and canola up in Canada. But at the same time, had reasonable, I would say, prices in our fertilizer business.

And looking at Potash, we can talk about the market, certainly what we saw happen with nitrogen. And obviously, the phosphate market was in a place that -- where we saw prices well above mid-cycle levels. I think what I would say is in that environment, the backdrop for us it just continues to be that we're in a space, the agriculture industry where the demand for food just continues to grow. And we can talk about growing population and a decreasing rate of arable land expansion, absolutely everywhere that I go in the 50 countries, the 50-odd countries that we send our products, there's just this ongoing realization that farmers, governments can do more with the complement of land that they're farming.

And that more is obviously seeds and germplasms and highest quality technologies there. It's killing weeds and it's killing bugs and it's balanced fertilization. So with the backdrop of a growing demand for just about everything that we do, we sit on what we believe are the highest quality assets upstream of an acre, and that is -- starts with our downstream business, our retail business, and that is serving over 600,000 grower accounts in North America and Australia, Brazil, it's our midstream assets that we've built out supply chain logistics, more built out than I would say, anyone else in the world. And then that is backed up by the largest footprint of fertilizer production in the world.

And again, asset quality that we believe is top tier. We have been focusing on our business, I would say, with a renewed focus on a few things. One is portfolio, and Mark can talk about the work that he and his team has done to just focus on free cash flow asset by asset and sort of upgrading the portfolio accordingly. And that body of work has led to some projects that we have in flight, on calling some of the portfolio, and we can talk about that, Matt. I know you have that on your list of questions. We've been focusing on cost and even getting ahead of our $200 million SG&A target, which we achieved last year and heading into 2026, knowing that there'd be more that we can do. And there certainly is more we can do in terms of pulling out cost.

And then just continuing to grow the business. So we increased fertilizer production again last year by $1.3 million. We increased our downstream earnings by $300 million. And again, when we do -- every year, we've got those retail earnings growing at 5% or 6%. We believe that's kind of structural in nature. And again, pulling out cost and then focusing on capital. That's been, I would say, the work that's been going on through 2024, 2025 and absolutely will be the focus of 2026. And that sort of culminates in the sources and uses of cash discussion. In other words, capital -- disciplined capital allocation. Maybe, Mark, you want to say -- talk a little bit about that.

Yes, Matt, I know we'll get into some of this more. But I think just to build on what Ken said, I think 2025 was a foundational year for Nutrien in terms of really setting a tone from a capital allocation standpoint in terms of what investors should expect from us. And as Ken said, that's capital discipline. We've taken $600 million out of CapEx over the last few years. You saw that in our numbers. From an investing CapEx standpoint, we've really simplified and focused the company in terms of where we're investing, things that we're good at in our core business where we have core structural advantages, and we can grow the company with accretive investments.

And then from a return of capital standpoint, just that discipline that Ken talked about, including the introduction of ratable share repurchases as part of our framework to grow free cash flow per share across cycles, paired with steady growth in dividends per share. And so I think all the things that Ken said in terms of operational performance, controlling what we can control, doing what we say we're going to do, set the tone in terms of a very disciplined capital allocation strategy that was on display in 2025. And I think the punchline for capital allocation is that investors should expect more of the same from us in 2026. So Matt, maybe hand it to you to...

As opposed to passing that microphone back and forth, I'll just -- I'll stand up here. I mean, if we want to start on the retail business, 2025, the guidance and the outlook catches that kind of $1.9 billion EBITDA target towards the high end. But it also opens the door for some flattish performance year-over-year and clearly, farmer profitability is not extraordinary, and there are some headwinds. But you're also going through a number of company-specific actions to boost profitability. So as we look at kind of the high and low end of that range, it feels difficult at least for us to kind of get down to that lower side, given what you have going on. So can you just walk through maybe the puts and takes on...

Yes. So I'll hand it over to Mark to just provide the sort of list of assumptions on the high end and the low end. But yes, I think you sort of alluded to it there, Matt. When we originally set the Investor Day target of $1.9 billion to $2.1 billion, there were some, of course, assumptions about, I don't know, call it, historical averages or normal weather and normal agricultural patterns. And as I started out saying, it's -- last year, we saw where corn prices were and that record corn crop that came off and really kind of around the world in 2025. It's true that, that pulled an extraordinary amount of crop nutrients out of the soil, but certainly, the yields were there, and we saw the impact on corn prices with soybeans, obviously, the trade war with China buying today really less than half of what they were buying just a few years ago, and that's up from zero prior to striking a deal.

So the soybean farmers have been -- in U.S., Brazil have been feeling that. And if it's North America, we're talking about, obviously, canola with China has been a huge challenge as well. So we can -- that's a North American story. We can go around the world, and there's some pockets where it's better, some pockets where it's worse. But certainly, for our core retail business, that's been part of the story. Australia has been a story about weather and dry conditions. So here we are in it's less than ideal agricultural environment. Obviously, funds from U.S. government are helping, but that's certainly part of the story and maybe Mark, do you want to just provide sort of the top end, low-end assumptions?

Sure. Happy to do that. And Matt, I think I'd just double back on the comment that Ken made earlier. When you look at where we set the bar at Investor Day, we were about $1.45 billion in 2023 in retail EBITDA. And so the midpoint of our 2026 guide implies about $400 million of EBITDA growth over that time period. As Ken said, we think it's structural because of the changes we've made. So notwithstanding the tough environment, the growth has been quite impressive. I think notwithstanding that, based on what Ken said and our outlook for the environment, obviously, it's incumbent upon us to provide the best view that we can to investors based on the world we see around us.

That said, at the midpoint of our guidance, we're going to be growing the business about 6% on an EBITDA basis year-over-year in that kind of environment. And as we said on the call, there's a few core anchoring assumptions on that. I think, one, at that midpoint, we would expect that you've got kind of mid-single digits fertilizer volume growth year-over-year, and that's informed by the fact that we had an early cutoff to the fall season with snow in the U.S. in December that sort of stopped that field activity.

Importantly, we see high single digits proprietary product growth in 2026. And that's obviously part of that engine of ratable growth in retail that Ken talked about, and we see a great opportunity, both on the CP side, but our nutrition business, which has been growing at a very good clip over the years. And so that's embedded at the midpoint of our guidance. The other would be that we experienced some tough weather conditions in Australia last year. We assume a normalization of those conditions. And then in terms of what we can control, an assumption that we continue to look at cost takeout opportunity across all of our geographies, which has been a core part of what we've been doing over the last few years in that structural growth.

And then lastly, I would just say on the CP side, generally for Crop Protection in our total shelf, looking at kind of mid-single digits gross profit growth with some of the recovery there, including weather and in our business. So really, you could toggle any of those assumptions to figure out where you are in the high and low case is always the case. Weather is a factor in our business. But we think based on the environment we see that we've set the bar appropriately for that growth. And I think importantly, when you cast out beyond 2026, as Ken said, we think those drivers are structural in nature. So we think that mid-single-digit growth for our business, which we've achieved over the last number of years is something we can cast forward into the future, such that this is a growth story for Nutrien.

Tuck-ins have been kind of a [Technical Difficulty] that profile. Tuck-in acquisitions probably have slowed a little bit. And obviously, the portfolio in general is shifting. As you think about Nutrien's retail footprint, right, we've talked or you've talked openly about Brazil and whether that business has earned a position. Obviously, Australia has had its own issues, some more recently weather related. But as you look at what that business ultimately -- like the footprint over time, what are you expecting? What's your 5-year vision for that plan?

Yes. I would say that when we -- as Mark just explained, when we think about guidance or our next set of targets that might be a few years out, we're not assuming that we do a certain number of tuck-ins that are going to stack EBITDA, and we'll come out the other end having achieved the target. For us, it's always -- and maybe it's a statement of the obvious, but it's always about the quality of the opportunity and whether that opportunity is going to meet both our strategic objectives, and you talked about it, Matt, sort of like what's your footprint? Where do you crave to have better access in the name of both the synergies associated with that acquisition, but then our ability to grow organically beyond that.

And then finally, looking at the network that every time you complement that network with a tuck-in of some storefronts, how you can optimize the network after you've done that acquisition. And there's actually more and more work that we're doing in that regard to understand, well, when you do that tuck-in, actually, is there an optimization exercise that reaches right from that branch all the way through our midstream assets, all the way through up to our production -- crop nutrients, fertilizer, nitrogen, NPK products.

So again, strategic fit and then, of course, the financial metrics and certainly, IRRs, but doing more and more payback as well in terms of when you're going to see $1 of positive cash flow from these things. Applying that sort of that lens to tuck-in acquisitions over the last 1.5 years has led to fewer tuck-in acquisitions, exactly as you said, Matt. Now we'll always look at those, but I would say we're really scrutinizing them in a way just more and more in a way that maybe we haven't in the past. And it's only not in the context that we haven't been scrutinizing, but some of our criteria is changing. So that today, in terms of the retail regions where we serve farmers, the focus really will be on North America, probably the U.S. There are parts of the U.S. where we'd like a greater presence. Corn Belt is a good example. It's really sort of dominated by the co-ops. So it's difficult.

But we'll -- we did a few last year, and we have a few in the pipeline this year. And we'll look at Australia as well, albeit our market share in Australia is really quite substantial. Brazil, Brazil is a region where we're, as you say, has Brazil earned the right to be in the nutrient downstream portfolio. I think we're coming to the conclusion. The answer is actually no. And the reason for that is that we simply have better uses for our capital. When we look at the performance of that business and when we project out what we think it will do, even if the thing is cash flowing in a positive way, which it hasn't over the last couple of years, it's -- it is -- we're coming to the conclusion that there's just, like I said, better uses for our capital than Brazilian retail. So we may be going -- and we'll have some conclusions on that this year, but we may be going the other direction in Brazil.

It feels like -- I mean, you're not alone, right? There's retrenchment in Brazil. People are trying to figure out the best way to compete. We've got nutrient mines and processing facilities closing or being sold, retail businesses going bankrupt, closures of retail footprints in general, retrenching of sales strategies across different companies. I mean, maybe take a minute or 2 and just try to articulate why competition in Brazil is so hard. And for a market that's generally expected to be a growth engine for the next few years, how do you -- how has your opinion changed on how you're actually going to be able to participate profitably?

Right. And I think to your point, Matt, there's been a bit of a reckoning there, and that will continue. Still a very exciting agricultural market that we can serve through our -- what we would just describe as really our core business, fertilizer, proprietary products. And retail, obviously, North America, Australia, but not necessarily Brazil. But I'll hand it over to Mark, whose team has been hard at work on collections and certainly focusing on our business down there and our business improvement plan over the last few years. So Mark, maybe you want to talk about Matt's question.

Sure. Thanks, Ken. And I think, Matt, on the more fundamental question about the industry, I mean, you look back over the last couple of years, there have been some structural changes in Brazil. So I think you go back to what happened during the Ukraine-Russia war at the outbreak, there was a stocking up of fertilizers during COVID, there was a stocking up of chemicals. And there was a fairly painful de-inventorying process for the whole country in the ag supply chain, certainly on the input side to get through that. And that took the better part of a couple of years to move through that.

At the same time, the price volatility, some of the economic conditions in agricultural markets also caused a shift to more just-in-time purchasing behavior at the grower level. You couple that with interest rates in Brazil going from 2% to 15% and the cost of working capital has gone up exponentially. And all of that has created a fundamentally different cost structure for the industry and a different set of behaviors in the market, which has led to a lot of the things that you talked about in terms of some of the challenges in Brazil. In response to that, we did everything that we thought was appropriate in terms of shuttering locations, closing blenders, taking cost out of our system, actually shrinking our business to get better, leaning more into proprietary products, as Ken said.

And when you look at the results of that on a year-over-year basis, we went from just under negative $80 million of EBITDA in our downstream business in Brazil in '24 to being right on target at about breakeven earnings in 2025 and actually some positive cash flow. That said, we have about $0.5 billion in invested capital there today. And as Ken said, breaking even is not the definition of success in Brazil. So when we step back and we think about Nutrien's exposure, as Ken said, by far, our most material exposure to Brazil is Potash through Canpotex and Nutrien's relationships in the country. That's a very profitable business. Credit risk is minimal. We've operated that business successfully for years. And as Ken said, we love that business. We have exposure to the growth in the Brazilian market in a very profitable way that's sustainable and growing.

As Ken also mentioned, proprietary products is an engine we think can be very successful without some of the same challenges that the retail channel is presenting to us, which takes us to retail and my comment on the invested capital and with that free cash flow and the returns lens that we have, really having to earn its right in the portfolio, which takes us to what Ken said, which is the analysis in 2026 of our options, what the future looks like there and where the dollar is best deployed for a shareholder, which is the work that we're doing now. So we do see all the positives about Brazil. I think it's really an exercise in positioning Nutrien with those core businesses of ours where we have strong competitive advantages to get leverage to that growth in the right ways.

Okay. I appreciate that. I want to pivot a little bit. And Ken, you mentioned something that I'm just thinking about in general as it relates to the fate of the U.S. farmer or I should say like the fate of the U.S. soybean farmer, right? Because Brazil is stepping in, in a much more material way as a global source of soybeans. China is more than happy to purchase from Brazil. They're using it as a trade tactic, certainly in negotiations. What -- I mean, near term, would we see -- or do you expect farmers to maybe shy away from switching to soybeans because there's a concern about having a market for it? And if we look 5 years down the road, if Brazil keeps this path, like what is ultimately you think the path for the soybean out of the U.S.? Because if we get supplanted, it creates a little bit of a conundrum for our farmers, both from like a normal healthy crop rotation side of things, but also just financial flexibility.

Yes. We actually had the head of the American Farm Bureau Federation come up to Canada last week and talk to our Board. And some of it was about exactly this. And yes, I think there's a lot of concern about -- among the U.S. growers about never getting that Chinese market back to where it was at 25 million tonnes of soybeans and that the Brazilians are happy to supply that volume. I think stepping back from the entire -- that sort of localized discussion, you look at global grain stocks-to-use ratio, which has been for the last several years, well below the 10-year average with the crop that came off last year, we're sort of at average levels in terms of stocks-to-use ratio.

I think that if you believe that grains and oilseeds are global markets, which they are, ultimately, it becomes a zero-sum game. And when the Brazilians are supplanting the Americans and the head of the Farm Bureau Federation said this last week, the Americans go and look for new markets. They look for the markets that the Brazilians vacated. That's always bumpy. It's always volatile. And we've lived this with our fertilizers. It's also more expensive because you typically go to your backyard or go where logistically, it makes most sense for any of these suppliers. I think there is that transition in some ways underway.

In the meantime, the Americans -- U.S. growers going to plant corn and soybeans, they are. I mean, we're saying 94 million to 96 million acres of corn next year and sort of high 80s in terms of soybeans. In other words, historical levels as this transition takes place. So I'm not going to count out the U.S. soybean farmer. It's obviously some of the best technologies, best yields, best farm practices in the world that can compete, and it is a global market. So I think in the meantime, we're in a bumpy period here for sure. The last thing I'll say is what the U.S. government has done with the $11 billion announcement just prior to the holidays, some of the relief in the one big beautiful Bill Act and even now Congress, I think considering some more for the U.S. farmer, that really obviously helps through that, if you can call it a transition.

I appreciate that. I asked this kind of to pivot a little bit. I asked this on the earnings call, about Trinidad, right? I understand the gas availability issues and clearly, the Trinidadian government is putting pressure to extract more economics in the form of gas prices. And based on the return profile, it's not really a tenable solution. And so the asset is down. As I think about the long-term optionality, right, and we talked about the Venezuelan government changeover, how do you think about the decision to decommission? Is decommission on the table? Or is it just care and maintenance for the next few years? Because the plant wasn't unprofitable. It was maybe breakeven or the returns weren't there on a cash basis, correct me if I'm wrong. Obviously, that could change if gas prices move up. But -- where does your mind go as it relates to the longer-term optionality of that plant? And does it really change with what we've seen in Venezuela? Did you wake up that morning saying, wow, this is a little bit different? Or was it like, we'll see.

No, I think it's a very good point you're making. I mean, I think -- first of all, we sort of haircut the probability of Venezuelan gas coming anytime soon. New additional full gas on the island there in Trinidad, it's always 3 years out. And it's been 3 years out since I joined Nutrien. And then next year, it's going to, I believe, be 3 years out. It's just extraordinary uncertainty around what's happening with Venezuelan energy and then building a pipeline on the seabed over to the island there and then the complications associated with feeding energy on the island, obviously, the industrial complex, which we're part of and then exports with their LNG terminals and the competition among those 3.

I think the change -- the one change that you'd see with full complement of gas would be we've been throttling our plant, 75%, 80% operating rates because we don't get gas to run our plant. But your point, Matt, is a good one is that if it's uneconomic at 100%, uneconomic at 80%, it's kind of uneconomic at any level of gas supply, and that's because of cost. That's because of what the Trinidad government told us just in the fall of last year, and that is your gas costs are going up. Your access to the port and port fees are going up. And I get it, the government of Trinidad and the island has their own needs, their own challenges, but it simply renders our plant uneconomic. And so we made the decision to shut it down. We're talking to the Trinidad government right now. I would say everything is on the table in terms of our outlook, but maybe I'll let Mark talk about how we're sort of seeing that assessment through 2026.

Yes. I don't have a lot to add to what Ken said. I mean I think he's painted the picture of the backdrop really well. And so back to your point, Matt, I think at the end of the day, there's a lot of human resources, management attention, capital risk, all those things you bear when you run an operation of that size. And so ultimately, when we look at free cash flow that was already stressed from this facility, I think Ken has said a number of times or myself on our public commentary and calls, notwithstanding that it generates EBITDA from a free cash flow standpoint because of all the reasons that Ken just cited, it's very negligible, less than 1% of total free cash flow at old, more attractive cost structures, which if everything is going up, I think just puts further pressure on that picture.

So when we think about the focus of the company and we step way back, we've been stewarding all of our assets, the portfolio review process, looking at free cash flow, looking at free cash flow volatility, stability, growth, returns on invested capital, management attention such that our portfolio is a portfolio that cash flows in any market environment and the profile of Trinidad that Ken just described really doesn't fit that picture. And so as Ken said, like the other items that are under portfolio review for us, phosphate, Brazil, we'd like to make a decision on Trinidad in 2026 based on the factors that we see. But obviously, there will be a number of factors that play into that. But I think the philosophy of the company is very clear, and this is a situation that doesn't fit the portfolio in its current state.

And this is maybe a little bit of a circular reference here, but ammonia has been pretty tight. Clearly, we've had some geopolitics at play, some asset inconsistencies. But there was a little bit of a difference between what you had kind of mentioned on the earnings call in CF as it relates to what the expectations are around ammonia. I think you were in the camp that ammonia stays tighter. At BofA, we're a little bit more concerned about the ammonia market. But what is ultimately feeding that? And is there any -- I mean, presumably, if the expectation is tight, does that lean for the Trinidad to stay? Or is it like almost 2 entirely separate conversations?

Yes. I think the situation we described is highly bespoke to our operations on the island, the government context, the cost structure that Ken talked about. So that decision was driven entirely by those factors. You've got a confluence of things happening in the ammonia market today. I think like you, we would have entered the year expecting ammonia prices to ease based on the fundamental factors, supply and demand globally that we saw in front of us. There was expectations of new supply in North America, which those start-ups have been bumpier than expected. You've had plant outages, less production, some of those issues on the Trinidad Island generally across the whole industry. You've had issues elsewhere in the world.

And notwithstanding all of that, you've had very high gas prices in Europe as well, which tends to be the marginal cost-setting mechanism for the Tampa ammonia contract. So we continue to say that the nitrogen market has been supply driven. So the combination of outages, supply crunches, geopolitical uncertainty and risk coming into the market, all of that has kept a bottom under ammonia prices. And by definition, those things can't be predicted. So here we are in a tighter-than-expected ammonia market to start the year.

And to parlay that, right, like bumpy commissioning. Obviously, there's concerns around potash supply kind of next year with Jansen and I mean, maybe towards the back half of next year. And similar expansion work kind of in the Eastern former Soviet Bloc, right? How do you assess the risk to that market? What's your view ultimately on how this tonnage filters into the market? How -- I mean, I don't want you always to comment on somebody else's business, right, but kind of want you to comment on somebody else's business at the same time.

Yes. We obviously think hard about that. So we're happy to comment on our assumptions around how we see sort of things playing out between now and end of this decade, early next. And yes, of course, as demand continues to grow, and I'd start out by saying that food and food security and governments realizing that food security is now national security in light of all this geopolitical uncertainty and risk. And hence, the growth that we've seen in fertilizer volumes and potash has been absolutely part of that story. We talk about 2.5% average annual growth rates. And while that's not, of course, linear, if you step back and look at it over the last 10 years, it's been exactly that.

And even since -- and Mark mentioned the sort of the volatility that was created by the conflict in Eastern Europe and volumes were way up, shipments were way up in light of supply concerns only to come off the following year in light of extremely high prices. And so that was a blip in that sort of, if you could call it, 2.5% average annual growth rates. In the meantime, we've had 4 years of potash demand growth in a row. We're saying this year, we're going to grow again. And we're right back on what we would call sort of trend level demand growth as if the conflict in Eastern Europe never happened. And we expect that obviously to continue to go through the end of the decade, early next and beyond.

So that when you get to the end of the decade, we're in an 80 million to 85 million tonne market. We're saying 74 million to 77 million tonnes this year, about 1 million tonne growth from -- at the midpoint from what the number -- shipments numbers came in last year. And it's important to note that when we talk about shipments, we're not seeing inventory build either. And so shipments is equaling consumption. And so when we say 4 years in a row, demand growth, that's certainly part of the story is when you don't see inventories building, you don't have a year where there's destocking. They just -- it continues to go to ground. And we can talk about what we're seeing in China, particularly in terms of volume growth, and it's really quite extraordinary. So that's the demand side of the equation.

And then to your point, Matt, you sort of look at the supply stack and you go, well, how is that demand consumption going to be met? And there's obviously sort of the incumbents and their plans, albeit there's some depletion among the incumbents, and that would be true for -- absolutely true for Chinese domestic production, for example. We see that every year coming off. And of course, we all know that, that has been on the books that we've known that, that's going to happen. Indeed, it is.

So you've got the current supply stack with depletion and then some new tonnes, as you say, Matt, and yes, we have assumptions about new production coming out of Russia over the period. And yes, we have assumptions about new production coming out of Belarus and maybe 1 million tonnes more out of Laos, albeit certainly with risk as you've seen the challenges in Laos and their ability to bring on volume, given sort of the really difficult geology that they're dealing with.

And yes, we have Nutrien and our plans to continue to grow our volumes, which we have been over the last -- since -- again, since I joined the company, every year increasing production. And this year, we'll be about just over -- or about 14.5 million tonnes with 15 million tonnes of capacity. Again, that's growth again from last year. And so we talk about our 19% to 20% market share.

We believe we'll maintain that. It costs us about $200 a tonne in CapEx to bring on that next tonne. And we can get to 18 million tonnes with -- those CapEx levels. That would be today, the only benchmark I have is that new mine that's being developed in Saskatchewan, which is probably $3,000. Well, probably it is. It's announced. It's $3,000 a tonne for that greenfield development. In other words, our next tonne is extraordinarily competitive from a CapEx point of view. And then from OpEx, we talk about the work we're doing on mine automation and our ability to fight back inflation and stay at that $60 cash cost per tonne, which would be among the most competitive produced tonne in the world.

And then we can talk about the investments we're making in logistics. We've just announced a new terminal off the West Coast of the U.S., Washington State, where on a delivered basis, again, we're going to continue to be among the most competitive. So we're going to be there with our tonnes. As it relates to Jansen and BHP's project there, let's see, announced new production -- start of production next year, 2027, ramping up to their Phase 1 volumes by end of the decade, early next 4 million tonnes.

But I keep saying 4 million tonnes in an 80 million to 85 million tonne market, frankly, we think the market is going to call for those tonnes. We are going to need those tonnes. The last thing I'll say is everything I described is if all these operating rates and mines work properly, if we're looking at announced plans, they're on the books, this is the way it's going to work. When we look back decade after decade, the market usually loses 6 million to 7 million tonnes per decade. And that's just unforeseen events. And it sort of happens ratably. And whether it's a sink hole or a mine flooding, you're going to talk about exactly what's going on in Laos with water, geology and mine flooding, we lose 6 million to 7 million tonnes.

So when we think about sort of the base case between now, end of the decade, early next, we call it kind of a balanced market as it is today. But as it relates to sort of skewness toward is there upside to that market or downside? We skew to the upside actually because we think that everything has to work properly in order for it to be a balanced market. And the history would tell us everything doesn't work properly all the time.

I don't know if I'm happy to open it up. We've got a few minutes left. If anybody in the audience has a question, I'm happy to kind of entertain. Otherwise, I did want to just talk a little bit about capital calls because to your point, you've got a pretty attractive return on CapEx. You're net talking about probably closures of footprint more so than adding. So Mark, as you think about the cash profile of Nutrien, like mine automation. Maybe that's a good example of something where you're investing in, but none of that is like large dollars. So if I look out over the next few years, are there any major capital calls or investments that Nutrien will ultimately make?

Yes. Thanks, Matt. I mean the short answer is no. But I think you go back to Ken's vision for the company and really what's been manifested here over the last couple of years, and it's, again, back to simplifying and focusing the business, really focusing on operational performance, operational excellence and then just being exceptionally disciplined, thoughtful and intentional about capital allocation. And that's really founded into the capital stack. So when you go back to some of the decisions we've made over the past couple of years, I mean, I think the cancellation of the Geismar Clean ammonia expansion is a good example of that. The thought of having CapEx risk that is that multiyear in nature with a very uncertain market backdrop was not something that we felt was in the best interest of a Nutrien shareholder, and there were far better alternatives for that capital. In our core business with things we're good at with lower risk or just giving the capital back to shareholders directly.

So when you look at our capital allocation priorities for '26, I think it's a blueprint for what the next several years could look like for us. And so if you look at CapEx, once again, we've guided to $2 billion to $2.1 billion. We've held that level that's well below the Investor Day target. In there is about $1.65 billion of sustaining CapEx, which we've done a tremendous amount of risk-based work to hold that number back in a safe and reliable way for the business. We've got about $400 million of growth CapEx. And as you said, it's not any large multiyear chunky projects. It's automation in potash, finishing our nitrogen debottlenecks and the retail priorities that Ken talked about. So beyond the $2 billion to $2.1 billion in CapEx, we've got about $0.5 billion in capital leases. The dividend continues to be about $1 billion. And really, the marginal dollar today is going towards that ratable buyback program for shareholders.

And so I think there's a couple of important points to zoom in on. One, with the divestitures that we made last year of Profertil and Sinofert, that allowed us to get the balance sheet in an even stronger position. We paid down over $600 million in debt. We like where we're at for where we are in the cycle today with a lot of optionality. And when we look at what Ken talked about earlier in terms of that steady earnings growth in the company with ratable improvements in fertilizer volumes and reliability, ratable growth in the retail business, continuing to pull cost out of the business, we think the structural earnings base for the company just continues to grow and increase the amount of cash available for allocation.

So there's upside to the amount of cash we can return to shareholders over time. And as we buy back the stock, it allows us to grow dividends per share without touching dividend expense. So that formula, that blueprint is something that Nutrien shareholders can expect to continue to see from us. And we don't have any projects on the horizon that are multiyear or chunky in nature, and we don't see any today. And if we do see something, the lens we will take is, is that better for a Nutrien shareholder than just giving the capital back? And the whole goal of that entire framework is growing free cash flow per share across cycles, which all of the ways that we're deploying capital today do. So I think that's a very consistent approach. It's a shared philosophy inside of Nutrien. It's based on the vision that Ken set out and shareholders can depend on us to continue to do that.

All right. I appreciate it. Thank you, both Mark and Ken, for leading off the day and for joining us. So we'll end it there.

Thank you, Matt.

Thanks.

All right. Good morning to day 2 of the Mining Conference, day 4 for some of us. Our first session this morning with Nutrien is -- with Nutrien, of course, the largest fertilizer producer, a large retail player as well.

Let's welcome Ken Seitz, President and CEO, to the stage. We're going to do a fireside chat. So if you want to submit questions, please go on the app, and we'll weave them in. Ken, why don't you kick off maybe like a few minutes, state of the union, what's going on with Nutrien in the markets?

Yes. So thanks, Joel. Thanks for the invitation. Good to see you, and thanks, everyone, for joining. Yes. So Nutrien, we're in the agriculture business, and it continues to be the case that the world demands more food. And we sort of talk about that from time to time, but we like to remind that there's still 800 million food insecure people on the planet and that every year, farmers, governments, families learn how to do more with the land that they have. And they do that by agronomically choosing better practices. And so that's seeds and germplasms and killing weeds and killing bugs and of course, balanced fertilization. And we see that. We see that every year that as farmers get better, as they become more knowledgeable, as they apply best practices, they frankly use more of what we produce.

So that -- and among all that, we have and we really believe and are proud of the fact that we have the highest asset quality to serve those growers as they seek to improve yields. And so that starts with our downstream business, access to over 500,000 grower accounts where we're serving those customers, those farmers every day with all the inputs and services that they need to maximize yield. And that, that downstream business then built out with supply chains, logistics, transportation, unparalleled, I would say, on the planet to serve those customers and then wholesale customers in over 50 countries around the world. And then, of course, that -- all of that infrastructure backed up by, as you say, Joel, the largest network, highest asset quality for fertilizer production on the planet.

We're proud of those things and find ourselves in a growing market where, again, our volumes continue to grow and our earnings in our retail business continue to grow. We believe that, that's structural. We saw that in 2025, again, where we added 1.7 million -- 1.3 million tons of fertilizer volumes, structurally grew our retail earnings by $300 million and pulled another $200 million out of cost.

Entering 2026 and looking at guidance, we believe that there's opportunity, again, to structurally grow those earnings out of our downstream business to maintain improved asset quality and to grow our fertilizer volumes once again, and we've guided accordingly. I would say that sitting above all of that work as it relates to margin improvement, as it relates to pulling out cost and growing -- structurally growing earnings and volumes and free cash flow, we're focusing on ongoing capital allocation discipline. And that comes in, obviously, mindset around the dividend, stable and growing.

We returned 30% more cash to shareholders last year, buying back our stock and with the dividend. We pulled $600 million out of CapEx to date where we continue to guide at that $2 billion to $2.1 billion and the balance sheet in a place that we're really quite comfortable. The last thing I'll say, Joel, is particular focus at the moment is on the portfolio. When I talk about asset quality, quality of earnings, free cash flow conversion, always looking to upgrade that. And as we comb through the portfolio, we see opportunity to upgrade. And so we've done some things last year, $900 million in divestiture proceeds. And this year, working through another set of strategic reviews on Brazil, on Trinidad and on our phosphate business.

Definite to talk about the portfolio because you've been very active in talking about things you want to do. But let's maybe start a little high level there are questions here, and thanks for -- questions, keep doing it. I've seen -- look, the sentiment for the U.S. farmer right now seems negative. There's lots of negative articles written every week. I feel like I'm reading about whether it's liquidity or balance sheets, whatever. How do you at Nutrien view the state of the U.S. farmer? And how does that affect your business and how you plan?

Yes. So it has been challenged. There's no question, and you go to a few parts in the U.S. and the South where weather challenges combined with commodity prices that coming out of the last few years are obviously quite a bit lower. We're just talking about this yesterday and looking at our retail business and how farmers are thinking about the spring planting season, we're saying 94 million to 96 million acres of corn again and whether we're going to see some of the challenges that farmers are having in our business.

And a couple of things. I would say in terms of challenged accounts with growers, again, we've got our nutrient financial business and our downstream business that really is in -- across North America, Australia, Brazil. We're not seeing sort of bad accounts that would be above what would be typical for this point in the cycle. So it's usually 0.5% to 2%. We'd like to be at 1.4% today. We're not seeing anything that's majorly alarming. So that's one. Two is, yes, there was some bad weather in the fall. So you're looking at how farmers are going to put down crop nutrients. And because of the bad weather, we weren't able to get on to the land here in the spring here, they're going to catch that up. Indeed, we're expecting even seeing volumes move now.

We ran our winter fill program in our potash business. It was oversubscribed. And so we're seeing volumes move now that would tell us that farmers are planning to plant the way that they always do. In the meantime, yes, you're looking at a little bit of strength in soybean prices, corn prices that would kind of be at the 10-year average. So they're not $6 at the moment, but at the 10-year average. And so you put it all together, combined with some government assistance and certainly in the U.S., that $11 billion that the Trump administration announced just prior to the holidays there and perhaps some additional dollars coming from Congress this year.

And then again, some help from the One Big Beautiful Bill. There's enough there that we believe that farmers are staring into the spring again, looking at their pocket books and saying, I'm going to plant corn the way that I always do, and I'm going to do the things I need to do to maximize yields in this environment. So as the sort of the current cycle bottomed out, let's see. Grain stocks-to-use ratio is kind of back at the 10-year average. But what we're seeing heading into the spring here is we're expecting it to be a normal spring.

You talked about governments. There's a lot going on in the U.S. government, obviously, every day. But we see a lot that sort of are impacting on the periphery, what you guys do, right? We see potash and phosphate, they're critical minerals. We see DOJ, USDA talk, let's go look at if there's oligopolistic structure, any kind of structures across crop inputs. Sometimes yourself and other peers get named. What do you think about all that? And does it mean anything for you? Or you're not sure?

Yes, it's definitely meaningful, and we take that all very seriously. I think what we say is that we exist in a highly competitive world. And that's just a fact. You see that in all of the work that we do on cost discipline and we can talk about mine automation in potash, for example, where we're making those investments so we can stay on the left of the cost curve because we need to compete.

We're talking about building a new terminal on the West Coast of North America, and that is related to costs and the need to compete. This is a highly competitive environment. It wasn't that long ago, as you know, Joel, that -- if we're talking about potash prices, we're below that top producer at the end of the cost curve. Those things happen in a commoditized world. We're in a point in the commodity cycle now where we would call it sort of on potash, a little below mid-cycle pricing.

Yes, phosphate is certainly above and nitrogen is somewhere on mid-cycle pricing. These things ebb and flow. We go in when we get asked the question by any government go in and we say, here it is. This is a highly competitive market, a highly competitive world. We need to compete. These are the things that we do. And by the way, making investments to the tune of hundreds of millions of dollars every year to expand those volumes in a growing market, we make investments to add additional volumes to the market. And we can do that economically because of where we sit on the cost curve.

So the story for us is you put that all together and you say, I mean, there's nothing in the form of anything untoward here. In fact, it's the opposite of that. We're doing everything in our power to compete.

If you talk about the portfolio and really trying to look at if you can whittle down the lower-performing assets from a returns perspective, talk about selling phosphate or restructuring phosphate, you're doing work on that, looking -- rethinking Brazilian retail and other Brazilian businesses, what you're going to do with Trinidad now that you're still in negotiations for a gas contract. Can you talk about progress you made on those initiatives? How do you think the year is going to play out? What might we hear about first?

Yes. So just going one by one, if we just talk about phosphate. So we are doing all of the things that you would expect that we would be doing in the context of a strategic review. And so as we -- the last quarter sort of announced or talked about our plans for strategic review, it was everything from restructured operations. And so what could restructured operations look like? It's looking at product mix and does this make sense? It's looking at life of mine at these different assets that we have and asking the question, do we extend those reserves because we can in the region? Do we think about progressing toward decommissioning here or there? Or is there a possible sale of these assets at the other end of the continuum and everything in between.

We are pulling together all of the data information that we need to for the one end of the continuum, and that is a possible sale. Information memorandum and data room and pulling together all of the operational data capital, all those things you need to assemble where somebody can come and have a look and make an educated estimate of whether that can make sense for them or not or again, on the other end of the continuum, restructured operations. Where are we at? We expect that next quarter, we'll be able to come to the market and start testing.

On Trinidad, yes, continue to -- the operation is shut down, continues to be shut down. We are talking to the Trinidad government, which is in the midst of negotiating with the upstreamers at the moment. And so not able to really understand their cost base before they can come talk to us about provision of supplying of natural gas to our plant, talking about access to the port, which, as we talked about in 2025 was limited for us given increased port fees. And so working with the Trinidad government to better understand, is there a package here, port fees, access to port, cost of natural gas that can make sense for Nutrien. And that we -- I don't know the answer to that. We're still talking to the Trinidad government about that.

In the meantime, we're exploring all of the alternatives for Trinidad. What we saw last year, though, is that the balance of the network had stepped up. We were operating rates above 90%. We're able to meet all of our customer needs with our network ex Trinidad. This year, we're staring at natural gas costs that are 50% Henry Hub, 50% AECO. That is a structural advantage in our business that without Trinidad improves. Those margins improve. We're looking at all this. In the meantime, we're in a buoyant nitrogen market, the buoyant ammonia market, buoyant urea market. And so let's see about Trinidad. But again, the priority at the moment is working through some of these challenges with the Trinidad government, which has been a slow process.

Then finally, you mentioned Brazil, Joel. Yes, we've been soul searching, looking at each other at Nutrien, asked the question, how do we best access this exciting agricultural market. We're obviously the biggest supplier of potash into that part of the world, and we'll continue to be. And looking at infrastructure, investment, customers, how do we preserve that ability to continue to grow with the Brazilian market. They're going to add more acres again this year, 2% probably to the current complement of arable land.

So we know when we're going to do potash. We know we're going to do proprietary products and particularly crop nutritionals in that part of the world. It's this retail question that, as you know, Joel has been challenged. And at the moment, we're just -- we're assessing whether -- how and whether that retail presence is required and necessary for us to achieve our overall objectives in Brazil. And we expect to have some conclusions on all of these files this year, 2026.

Lots of questions on potash. Let's talk about that. So like you said potash prices are sitting around good, below mid-cycle, but good, maybe Goldilocks. Can you talk about the markets a bit? Like it looks like price a little bit weaker in U.S., pretty strong offshore markets. How would you look at it?

Yes, I think that's right. I mean I mentioned our winter fill program in the U.S. that was oversubscribed. We were quite pleased with that. And when it was done, we went up 20. And so on a short ton basis, yes, a little bit less than the 3 -- equivalent of a metric ton at the sort of $370 that it is in Brazil. But these markets sort of ebb and flow depending on what's going on internationally and supply and demand regionally. What I would say is Brazil, as you say, Joel, has been kind of just a bit below mid-cycle. I mentioned $370. It might move up or down $3 a ton, it seems every week, but we're in and about that range. And we -- they ended their season with historically low inventories in Brazil.

And hence, that's some of the strength in pricing as the Brazilians seek to rebuild inventory. It still continues to be the case that it's a bit hand to mouth in that part of the world. So it's why we see some of the increased volatility in Brazil that we might -- as we compare to previous years, we're seeing a bit more volatility because when the Brazilian step out of the market, they step out of the market, when they step in sort of step in a big way and replenish those inventories.

And again, inventory is being replenished. We had a historically early contract with the Chinese that $349 helped us set the floor as usual globally, but it just speaks to the low inventories that we're sitting at ports and inland in China and the need for the Chinese to come get that contract in place, get those volumes flowing. We know that Chinese domestic production is declining. It's been that way for years. It continues to decline. We know that the [indiscernible] supply into China has been challenged, geotechnically challenged production challenges. And you put that all together and the Chinese continue to look to seaborne imports, continue to look for rail from Russia and hence, with depleted inventories, the early contract settlement.

We expect the Indians to follow here soon that, again, as it relates to inventory and the need to get volume into the country. Chinese are taking it all at the moment because they have a contract and the Indians are going to have to step in and do the same. So market to market, you step back from all that, Joel, and you say, we talked about North American agriculture.

You go globally, palm oil continues to be very strong. Coffee cocoa continues to be very strong. You can go region to region. And we're expecting, again, we're saying 74 million to 77 million tons, again, potash volume growth, demand growth globally again this year. This will be the fourth year in a row. And of course, we're going to play our part in increasing our production.

I don't necessarily want to ask the Jansen question, but the people want to ask Jansen question in different permutations. Jansen was always so far off. Now it looks like they're going to have first tons -- reiterate its first tons and maybe by the second half of '27, maybe become meaningful end of '28 in potash or 2029. It's getting there. How does that change the market, your positioning? Or do you have to wait until they're on the market and then reassess that?

No. Again, you sort of step back, look at the potash industry over the last, I don't know, 15, 20 years and ask the question, is it growing? And it just continues to grow. And it's not linear. But on average, it's kind of that 2.5% average annual growth rate. And that has been, on average, extraordinarily consistent, again, 4 years in a row. We're back to trend level demand, what we would call trend level demand and demand growth after all the volatility associated with the conflict in Eastern Europe.

When you look now to the end of the decade, early next and you say, well, probably an 80 million to 85 million ton market continues to grow. It's going to need additional tons. And so we do all the demand growth we stack and where we see the tons coming from. And we have our own lens that we look through for that. We don't just take everyone's publicly announced volume growth. We haircut as we see fit, and we factor that into the supply and demand stack and then what role Nutrien plays in the context of supply-demand in a balanced market.

And through now end of this decade, early next, we see a balanced market. And we would say we're in a balanced market today, and we see a balanced market through that time period. I think importantly is we apply our lens, we do. But if you look at every 10 years announced plans, what people expect to do, there's usually about 6 million to 7 million tons of supply destruction of some form in that decade-long period, and that is mine floods or collapses.

Did you find a sinkhole or...

Well, I'm not -- I wouldn't wish that on anyone. I'm just saying on average, those are the things that happen. So as we apply our lens, but then once we do everything kind of has to work pretty well in order to meet that growing demand. And so while we call it a balanced market, there's a version of this future and probably skewed to that where actually, it could be even tighter.

If I think about how you model potash forecast, typically, you'll come up with a global shipment number and then you'll say, well, Nutrien should get 19% to 20% market share, something like that. As Jansen comes on in the next couple of years, is it safe to say your projections would be 19%, 20% becomes -- I don't know the number, 18% to 19% or something like that. Like, you'd still say 19% to 20% is...

No, we're not changing our plans. I mean, again, you look at our ability to expand this kind of the $200 a tonne CapEx, brownfield investments at our current 6-mine network. And we're not talking about lead times that are measured in the decades or we're talking about lead times and it's mining machines and conveyance. I mean, the shops are built, the mills are built, some infrastructure investments on surface as it relates to loadout capability required. But you add that all up, it's $200 a tonne, that would be an order of magnitude less than a greenfield site.

You can ask the question, in that mix, can Nutrien compete? And we can absolutely compete. And you look at that cost curve, I mean, there's some production to the right of that cost curve that we'll see. But in the meantime, no Nutrien plans to -- we plan to be in the market the way that we always have been.

I got a question on long-term retail segment growth algorithm. Before doing that, maybe you could talk about 2 or 3 years ago, you gave a 2026 retail guide of getting around $2 billion EBITDA, $1.9 billion to $2.1 billion. You're going to come in this year now in your latest guidance around $1.85 billion. So maybe $150 million below your kind of expectations. Can you first explain sort of what you thought a few years ago, what ended up happening to be a little bit lower? And then maybe we'll talk about going forward.

Yes. I would say probably the assumptions that we made a few years ago, and we started talking about this at the start of this, Joel, was some assumptions about just a bit better ag environment compared to the one that we've maybe just coming through and the challenges facing obviously, the North American farmer, whether it's corn in the U.S. or whether it's canola in Canada and other challenges globally that agriculture has faced with some assumptions about just a bit better ag environment that -- how does that translate then translates into our proprietary products and the uptake of those things. It translates in our ability to continue to organically grow.

And so when we talked about the $1.9 billion to $2.1 billion last year and how we're -- sorry, in 2024 as a target for this year and how we're guiding this year, the delta is probably mostly just the ag environment. I think importantly, if you look at what we have done over that period, I mean, it is growing and we believe structurally growing earnings by $400 million in that business over that time frame.

You look at how we're guiding this year, again, it's growth -- earnings growth in our retail business, and that's organic growth, it's network optimization. It's continuing to grow our proprietary products that we continue to stack and we call structural in nature. That we get excited about. We're talking about -- we're planning an Investor Day again this year in the fall, and we'll be talking about exactly that at our Investor Day again this year.

So if I think about the growth algorithm going forward in retail, let's say, let's ignore tuck-ins for a second. What would you think is kind of the growth algorithm? You may have to talk about whether Brazil is in and out of that, but it's not that big part of the business. And then if we layer on tuck-ins, how would the growth algorithm change?

Yes. I mean, I don't like to hardwire sort of tuck-ins as something that's going to stack earnings only because we're very selective about that. It depends on the environment that we're in and the opportunities that come our way. What I would say, Joel, is one is, again, proprietary network optimization. We continue to see the opportunity to grow probably at the same kind of rate. If you look at the last 5 years, we can probably project that forward as a similar growth rate.

I think importantly is part of the equation in earnings growth in our retail business has been the opportunity to pull out cost. And it's really, really very significant. That comes in the form of looking at unproductive branches and closing them. It comes in the form of just overall SG&A and efficiency and productivity. We've had a particular focus on that in our retail business. We believe there's more there to be done. And it's in the context of a competitive landscape, changing ag environment, but it's also in the context of just productivity and efficiency, the investments we're making in technology that are going to improve productivity, pull out costs. And so I think when you put it all together, we can sort of say we believe in the same kind of growth rates in our retail business that we've seen over the last 5 years projecting that forward.

So the stock has been working quite nicely lately. People are starting to hit the story a bit more, hopefully, the last little while. What do you think wrapping up the next minute here, what do you think people get wrong on Nutrien that you'd like to speak about?

I think -- I don't know that people are getting it wrong, Joel. I think it's just continuing to talk about what I started with, that is we're in a growing market, and that has been quite ratable for some period of time. And yes, it doesn't happen, like I say, linearly, but it has been happening. Among that, we believe we have the highest quality assets in the business upstream of that acre. That quality is -- we can talk about asset quality from a number of perspective, quality of earnings, really to convert to cash. That quality is growing, and that's by continuing to comb that portfolio and ask the question, can we improve?

In the meantime, pulling out cost. I think that when you put that all together, it's a story that says there's an opportunity here with what Nutrien currently has under its roof just to continue to improve. And then there's an opportunity for Nutrien to continue to grow in a market that's growing. Those 2 things put together has been, I think, certainly part of the story.

Thanks, Ken.

Yes. Pleasure, Joel. Thank you.

Greetings, and welcome to Nutrien's 2025 Fourth Quarter Earnings Call. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A.

Thank you, operator. Good morning, and welcome to Nutrien's Fourth Quarter 2025 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form. I'll now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments.

Good morning, and thank you for joining us today to review Nutrien's 2025 results and the outlook for the year ahead. At our Investor Day in 2024, we outlined an ambitious 3-year plan with clear performance targets that included increasing upstream fertilizer sales volumes, growing downstream retail earnings, reducing operating costs and optimizing capital expenditures. Our results reflect the strong execution of this plan, contributing to higher earnings and free cash flow, lower net debt and increased cash return to shareholders.

In 2025, we generated adjusted EBITDA of $6.05 billion, up 13% from the prior year. We delivered record fertilizer sales volumes of 27.5 million tonnes, utilizing the strength of our end-to-end supply chain to efficiently serve our customers. We raised our potash sales volume guidance twice during the year and strong offshore demand offset a shortened fall application window in North America. We achieved 49% potash mine automation, a significant accomplishment that provides safety benefits and further strengthens our low-cost advantage.

Our potash controllable cash cost averaged $58 per tonne for the year, below our $60 per ton goal. We increased nitrogen sales volumes to 10.9 million tonnes and achieved a 4 percentage point improvement in ammonia operating rates, supported by reliability initiatives and the completion of low-cost debottlenecks. Excellent performance from our North American nitrogen plants helped offset the impact of a controlled shutdown of our Trinidad operations in the fourth quarter. In phosphate, our operating rate averaged 87% in the second half of 2025. Reliability improvements and a strong commercial footprint enabled us to deliver within our guidance range despite lower North American demand in the fourth quarter.

Our downstream retail adjusted EBITDA increased to $1.74 billion through decisive cost reductions, strong proprietary margins and solid execution of our Brazil margin improvement plan. Our unwavering focus on controllables allowed us to manage through weaker agricultural commodity markets and persistent geopolitical volatility, ultimately delivering results consistent with our guidance set at the beginning of the year. We surpassed our $200 million annual cost savings target and reduced capital expenditures to $2 billion, well below our Investor Day target of $2.2 billion to $2.3 billion. As a result of these efforts, we have structurally grown free cash flow, strengthening the company today and providing significant headroom for capital deployment going forward.

At our Investor Day, we also communicated a plan to simplify our portfolio with the goal of concentrating our capital on assets with the highest quality earnings and cash flow streams. We initiated this journey in 2024 by canceling our Geismar clean ammonia project and divesting smaller noncore assets. In 2025, we put further rigor to the analysis of our portfolio by comprehensively evaluating each asset on the merits of free cash flow contribution, return on invested capital and relative competitive position. This review highlighted assets that could be optimized or monetized while sharpening our focus on improving capital efficiency. Where an asset did not meet our threshold or was not a strategic fit, we took action and generated approximately $900 million in gross proceeds from divestitures.

We utilized the increased free cash flow and proceeds from noncore asset divestitures to progress 2 key capital allocation priorities. We reduced short-term debt by over $600 million compared to the prior year and continue to position the balance sheet as a strategic asset that provides flexibility to act countercyclically. We also delivered a 30% increase in cash returned to shareholders in 2025. This was achieved through the execution of ratable share repurchases throughout the year, an approach that is aligned with our focus on driving growth in free cash flow per share. The reduction in share count also supports our long-standing track record of providing shareholders with a reliable and growing dividend per share while keeping total dividend expense broadly stable.

To summarize, our performance in 2025 demonstrated resilience and consistency in an evolving environment. We expect to build on this momentum in 2026 with a focus on delivering growth from our core businesses and maintaining capital allocation discipline. In addition, we will continue to advance portfolio initiatives in 3 key areas. First, as previously announced, we launched a review of strategic alternatives for our phosphate business in the fourth quarter of 2025 and are on track to solidify the optimal path in 2026. Second, we continue to assess options for our Trinidad nitrogen operations and focus on enhancing our core North American assets, improving the margin profile of our nitrogen business. Lastly, we made significant progress on our retail margin improvement plan in Brazil over the past year.

However, macroeconomic headwinds have kept returns below what we would view as appropriate to support the capital deployed there. We will continue to take actions to drive improved performance in 2026 while actively reviewing alternatives for each component of our Brazilian business in the optimal way to participate in the long-term growth in this market. I will now turn it over to Mark to speak in more detail on our 2026 outlook and capital allocation plans.

Thanks, Ken. As Ken highlighted, our 2025 results reflect excellent operating performance paired with prudent cost management and capital optimization across the company. As we look ahead to 2026, we see constructive fundamentals for our business. Potash demand is projected to grow for the fourth consecutive year in 2026, supported by strong relative affordability, large nutrient removal and low channel inventories. We've seen good engagement across all major markets with most benchmark prices approximately 20% higher compared to 12 months ago. We anticipate relatively tight fundamentals through 2026 as trend line demand growth is testing existing global operating and supply chain capabilities.

Our potash sales volume guidance of 14.1 million to 14.8 million tonnes is consistent with our global demand projection. Canpotex was committed through the first quarter much earlier compared to the past several years, and our domestic winter fill program was very well subscribed. As a result, we expect first quarter sales volumes similar to the same period of 2025 and selling prices that reflect the year-over-year increase in benchmark values. On a full year basis, we expect controllable cash cost per ton at or below our goal of $60 per tonne. Global nitrogen markets are currently being influenced by supply issues, while demand is expected to grow in line with historical rates, driven by increasing use in agricultural markets such as Asia and Latin America.

Global ammonia markets remain tight due to project delays and planned outages, while strong seasonal urea demand and geopolitical uncertainty have pushed urea values higher. Our nitrogen sales volumes guidance of 9.2 million to 9.7 million tonnes is supported by reliability initiatives and low-cost debottleneck projects and assumes no production from Trinidad and New Madrid in 2026. These facilities accounted for approximately 1.6 million tons in 2025 or approximately 15% of our nitrogen segment sales volumes. However, they contributed minimal free cash flow.

Our cost structure in nitrogen now reflects production tied entirely to AECO and Henry Hub gas, raising the margin profile of our business and providing greater stability to our cash flow. In phosphate, we expect continued reliability benefits to support higher sales volumes with guidance of 2.4 million to 2.6 million tons. The majority of the year-over-year volume growth is projected in the first half. However, we also anticipate elevated input costs to pressure margins in the near term. Retail adjusted EBITDA of $1.75 billion to $1.95 billion represents continued growth in our downstream business, consistent with historical rates. The midpoint of our range is underpinned by 4 key items. First, we expect high single-digit growth in our proprietary products gross margin in 2026, supported by the launch of new products, organic growth in our core retail geographies and the continued expansion of our international business.

Second, we expect a mid-single-digit increase in our North American crop nutrient sales volumes with margin rates similar to 2025. The recovery in volumes is driven by the need to replenish soil nutrients following a record crop and a shortened fall application window. Third, we assume improved weather conditions in Australia that are expected to drive higher crop input demand compared to the first half of 2025. And finally, we continue to drive cost management efforts across all of our geographies, which is expected to support incremental EBITDA margin improvement. We see the majority of these drivers being structural and supportive of growth in retail earnings beyond 2026. Now turning to capital allocation. For 2026, our priorities remain unchanged. We expect cash from operations to be supported by constructive fertilizer market fundamentals and organic growth drivers that I highlighted in each of our operating segments.

Further, we ended 2025 with a working capital build due to the delayed timing of customer purchases. We expect the majority of this to unwind in 2026, supporting a meaningful improvement in cash conversion. Our capital expenditures guidance of $2 billion to $2.1 billion is consistent with 2025 and approximately $200 million below our Investor Day target. We've committed capital to sustain safe and reliable operations and to progress a set of targeted growth investments that have a strong fit with our strategy, provide returns in excess of our hurdle rates and have a relatively low degree of execution risk.

Our most recent dividend declared yesterday marks the eighth consecutive year we've raised the dividend per share, and Nutrien's Board of Directors has also authorized the repurchase of up to 5% of our outstanding common shares over the next 12 months. We've repurchased shares at a pace of approximately $50 million per month year-to-date, and shareholders should continue to expect that ratable repurchases will be a consistent staple in our capital allocation framework going forward. I'll now turn it back to Ken for closing remarks.

Thanks, Mark. Over the past 18 months, we have taken purposeful steps to position our organization as one that is committed to excellence and determined to deliver industry-leading results. We have streamlined leadership structures, established clear accountabilities and centralized functions and decision-making. As a result, Nutrien today is an organization that is leaner, more disciplined and better positioned than ever to deliver on its potential.

We have aligned the company around a proven set of strategic priorities, simplifying our business, driving operational improvements and maintaining a disciplined approach to capital allocation. I believe our unrelenting focus on these strategic priorities is delivering clear results and positioning Nutrien for long-term success. I'm proud of what we have achieved and excited about the extraordinary potential to build on this momentum. In closing, 2025 has been a defining year, and our focus in 2026 remains unchanged. I want to express my sincere appreciation to our 25,000 employees for their focus, hard work and dedication.

Thank you all for your time, and we would be happy to take your questions.

[Operator Instructions]. The first question comes from Joel Jackson from BMO Capital Markets.

Wondering if you could bridge us -- I know you for a couple of years, you held the guidance range for this year for retail to $1.9 billion to $2.1 billion. So let's call that $2 billion. You're planning to deliver $1.85 billion this year, that's $150 million. Could you bridge us when you think about the last couple of years, the differences there? And maybe when you do that, could you please highlight proprietary products, Brazil, North America, retail tuck-ins that got you to $1.85 billion for this year?

Yes, you bet. Thank you. So the 2026 target is about $150 million above where we are midpoint for 2026 sits today in our guidance. And then there's a few reasons owing to that. One, the main driver is we have assumed the macro fundamentals would be modestly better than they are today. And I think that would be most of it. And so that the result is a bit slower proprietary product growth, and we've been a bit more selective on tuck-ins. And because of modestly -- sort of modestly lower ag fundamentals or poor ag fundamentals, we have taken action in service of 2026 EBITDA.

And so what have we done, we've paired growth of the market with what we've seen in the market, and that is accelerating our cost reductions. We've talked about that. That's Latin American restructuring and the Brazil margin improvement plan. We've closed underperforming assets. That's 50-plus locations, both in North America and Australia. We've reduced headcount by over 400 positions. We've restructured noncore and unprofitable businesses.

So we've really taken action on the cost reduction side. We've optimized our capital expenditures. We've increased the contributions from Nutrien Financial and certainly better working capital management. And we see additional opportunity on the working capital front as well. So that -- since 2023, we have increased earnings in our retail business by $400 million. And I think an important point there is that we believe that, that's structural. So that's 6% growth rate beyond -- up until 2026 and beyond. So we look at the business and we say, yes, ag fundamentals modestly sort of not where we had thought that they would be. We react with cost reductions and business improvement. And through all that, we've increased EBITDA in our retail business by $400 million structurally since 2023.

Your next question comes from Chris Parkinson from Wolfe Research.

Can we just go over real quick the demand dynamics that you're seeing in potash markets? I think most people are pretty decent on the supply. But just what surprised you? What's been in line with your expectations, where you think inventories are? It just seems like there are a couple of moving parts, which we'd like to keep track on. So any color there would be very helpful.

Yes. Thanks, Chris. So we're projecting 74 million to 77 million tonnes this year. So up about 1 million tons from what actually happened last year. And at that level, we're starting to reach sort of thresholds where it tests operations and supply chain capabilities. We do believe that underlying consumption is meeting shipments so that there hasn't been a large inventory build. If you look at that sort of record early settlement in China, it's very strong evidence of depleted inventories and same thing in Brazil, where domestic inventories are at multiyear lows.

So we -- again, we see that shipments is equal to consumption when we say 74 million to 77 million tonnes because we don't see inventory building. As a result, we've seen good prices. Brazil at $375 and again, low inventory. Our U.S. winter fill program, we were fully subscribed at the price there now $355 per short ton. Southeast Asia is firm at $375, albeit there's some inventory there on a strong program -- purchasing program last year. India, $349, and we do expect India to come forward with an earlier settlement given that there's a lot of volume now going to China and the Indians are going to have to step in as well.

So that Canpotex with the volume moving offshore is also now committed through Q1. So Chris, I think for the fourth year in a row now, we've seen demand growth, and it's getting from the demand destruction of 2022 to 2023 right back on to trend level demand here into 2026, fourth year in a row, 74 million to 77 million tonnes where inventories aren't building. In other words, consumption is equaling shipments and probably reaching a point where you're -- again, you're starting to test supply chain and operating capabilities, hence, some of the firming that we've seen in price.

Your next question comes from Hamir Patel from CIBC.

Ken, given the high end of your production -- potash production guidance range would be close to your current capacity. How do you think about how quickly you could bring on additional potash brownfield capacity in your system? And when might you look to action further capital projects there?

Yes. Thanks, Hamir. Yes, the beauty of having 6 mines is that we have just a solid understanding of where that next ton is going to come from and certainly at what cost. And so as we map out our trajectory of volumes, not just this year and next, but over the medium term, we have a very strong sense of where they're going to come from, when we can bring them on and at what cost. And so yes, Hamir, this year, we have 50 million tons of capability.

And as the market grows, we have line of sight today to just continue to grow with it. When we say 19% to 20% market share in a growing market, again, we have line of sight to continue to expand our volumes as the market grows. 6 mines, these investments are rather granular. It's conveyance, underground, it's mining machines. And so we can do those as long as we get the purchase orders in for those mining machines in time the turnaround and installation of those things, we can move that relatively quickly.

Incredibly low capital costs. Again, we talked about that $150 to $200 per tonne. That would be, what, 10% of what a greenfield investment would be. The last thing I'll say is not to underestimate the benefits of mine automation as we expand our production volume. As we said in the comments, we cut half of our ore in either fully autonomous or remote mode. And the safety benefits, absolutely. But the productivity benefits and the flexibility benefits associated with automating these mines, it's really proving out. So that when we talk about, as you say, we're expanding volume consistent with the way the market is growing and our maintenance of market share, our ability to do that pace at a low capital and maintaining our $60 cash cost per tonne, we see that all coming together really very nicely as we sort of innovate on mine automation.

Your next question comes from Ben Isaacson from Scotiabank.

Just a quick question on Brazil. You generated a loss, I believe, in '24, and you were close to a breakeven in '25. Can you talk about the expectations for '26? What is the upside case? Or what are the swing factors there? What should we expect out of Brazil?

Yes. Thank you for the question, Ben. The Brazilian market continues to be challenged, I would say. Yes, we have been making great progress on our margin improvement plan. We've talked about idling blenders and closing unproductive locations and rationalizing workforce and focus on collections. And that's all yielded results that, as you say, Ben took us from a loss-making position in 2024 to making a bit of money in 2025. And if we look into 2026, again, given the ongoing challenges in that country, I would describe it as sort of modest improvement over what we did in 2025.

And in light of some of those modest improvements and in light of the ongoing challenges in Brazilian agriculture, we continue to assess and reassess our presence there, whether it be with seeds, certainly with proprietary products where we see opportunity to grow. But on the retail front as well, what is the best way to approach the Brazilian market. We know we're going to be supplying potash there forever, and we're going to be a meaningful supplier there. So when we put that all together, I suspect there will be changes to sort of how we operate in Brazil in 2026, and we're just working through that now.

Your next question comes from Vincent Andrews of Morgan Stanley.

This is Justin Pellegrino on for Vincent. I was just hoping you could kind of discuss the proprietary product mix in retail again. Is there a level that you're looking to achieve at some point in the distant future? Is there a target percentage mix? And then can you kind of just frame for 2026 and beyond what the drivers of below or above expectations would be for that percentage mix?

Yes. So thank you for the question, Justin. And yes, we do have growth aspirations as it relates to proprietary products. I mean it's growing to about a gross margin of about $1.2 billion to date. And that's been -- we've been experiencing sort of high single-digit growth rates over the last 5 years, and we expect that to continue for all kinds of reasons.

So yes, we do have growth aspirations, and that's true for the shelves that we currently put those products on the innovations associated with new products, and we are introducing new products this year and then looking abroad as well, international markets where we're seeing some green shoots in terms of our ability to supply in different agricultural regions. But Chris, did you want to say any more about proprietary?

Yes. Justin, thanks for the question. Part of that growth story also is that, for example, we're going to be introducing 26 new products here in 2026 as part of the proprietary products range. And as we look across the health of the grower today, their focus is very much on yield. And when you think about sort of the average to maybe a little below average crop commodity prices today, that's where their focus is. And their growing confidence in these proprietary products to help that yield outcome just continues to grow, as we said, not just domestically in North America, but also growing internationally as well. So a big component of our growth, as we've mentioned this morning, is around that proprietary products range, and we feel very good about that long into the future.

Your next question comes from Andrew Wong of RBC.

So in the retail guidance, you're assuming a mid-single-digit growth in crop nutrient volumes in North America. Just curious, how does that differ in your view across like nitrogen, potash and phosphate? And how does that take into factors such as crop switching between corn and soybean and versus the need for nutrient replenishment after the really strong yields last year?

Yes. Thank you, Andrew. And yes, we're saying for corn, 94 million to 96 million acres and for soybeans, 84 million to 86 million acres. So -- and we're now staring down at some catch-up with crop nutrients going down on the ground from a wet fall or weather challenged fall. Indeed, we had about a $300 million working capital build in the fourth quarter, which we expect to be released onto the ground here in the first half of the year.

In terms of fertilizer mix, I wouldn't say that it's going to be different than what we've seen in previous years. I think it's going to be a balanced fertilizer mix. I mean it's true that the -- that North America took a record crop out of the ground last year right across the board, corn and soybean. So there was a lot of crop nutrients removed out of the ground last year, and those need to be placed. But I wouldn't say that we're looking at a mix that's anything different than we've seen in historical years. So that we expect that the gross margin contribution from fertilizer in our retail business this year should be about $1.5 billion.

Your next question comes from Steve Hansen of Raymond James.

Recognize it's still early here, but any incremental thoughts on the optimal path for the phosphate strategic review? And maybe just give us an update where you're at and time lines that you might be starting to put together, again, recognizing it's still early.

Yes. Thanks, Steve. No, no conclusions on optimal path. We are -- and you phrased it well. We are still in the midst of a strategic review. And when we announced it last quarter, we said that, that could be anything from sort of revised operations all the way through to a sale. We are preparing. Our team is preparing for the typical market testing process to gauge interest in those assets. I can tell you at this stage, we have had significant inbound, significant interest in entering a discussion around those assets.

But we're not in a position to do that until we have all of our ducks in a row as it relates to data information and characterizing -- clearly characterizing the assets so people can understand what the business is and the state of the assets and all those things that you go through. So we're in a -- we expect to be in a position in the next quarter where we'll be out in the market doing exactly that market testing and gauging what may be done there. In the meantime, parallel bodies of work to understand when we say revised operations, what do we mean by that? We have different assets here. There's Aurora with an extended life of mine, White Springs with a life of mine that's just early into the next decade, but with additional resources in the area that we're having a look at and then there is our feed plant.

So -- so when we say revised operations, what might we do with those assets and everything in between that then, Steve, in terms of sale assets and revised operations. So certainly, we want to have conclusions. We want to be able to tell you here in 2026, what's the plan, but we're just working through that at the moment.

Your next question comes from Lucas Beaumont of UBS.

So I just wanted to follow up on the potash costs. So I mean the controllable cost kind of came in at $58 a tonne this year. I mean it was a bit up year-on-year, but similar to sort of what you've done a couple of years before that. So I mean just going forward with increasing production profile, sort of what you're doing on the automation front, how do you sort of see those costs trending into 2026 and beyond?

Yes, Lucas, it is our goal to keep that number at $60 per tonne cash cost per tonne. And we define that as controllable cash cost. But yes, per tonne for the foreseeable future. And why do we say that? It's -- we're in an inflationary environment. We've been successful fighting back inflation with the things that you just described with mine automation, which is our mining machines get further and further away from our conveyance shafts, we were able to put our machines either in teller mode where you don't have operators traveling many kilometers underground to get to the equipment. They're just sitting on surface, operating machines or in the case of Rocanville, fully autonomous machines just tunneling around underground on their own to flip the switch, those -- that yields obvious productivity benefits, which goes right to that $60 or less cash cost per ton.

And yes, we're absolutely -- we talked earlier about our market share in a growing market where we'll expand volumes, and we're expanding more volumes over a fixed cost base, which, of course, contributes to helping us fight back inflation for that $60 target. So great question, Lucas. We've been proud of our ability to be at that $60 or less, and the plan is to keep it there.

Your next question comes from Matthew DeYoe of Bank of America.

I have 2 for you. So I wanted to gauge your thoughts on the Trinidad asset and particularly given the changeover we've seen in Venezuela. I know the Dragon pipeline could have a potential implication on Trinidad and gas supply, but I also don't know how much stock you want to put into something like that. And then on the retail business, if I look on a 2-year stack, seed sales are down like 7.5%. And maybe this is overly simplistic, but if I were to assume prices in there, too, maybe volume is down 10%. Maybe that's not right. But why do we see this kind of headwind on the seed side, specifically for revenues in retail?

Good. Well, I will share a few thoughts on Trinidad, and then I'll hand it over to Mark and Chris to provide some thoughts on seed. So Trinidad, gas availability, I mean, Matthew, it's a great question. Obviously, a lot of activity in the Caribbean there. But I would also say a lot of uncertainty. And I think that maybe that's an obvious statement. Yes, the ability for Trinidad to operate those industrial plants on the coast and certainly supply domestically for energy and then LNG as well requires full gas, full complement of gas, and that has to come from Venezuela.

And as you know, those discussions have been taking place over years now where you sort of unlock what was once sanctioned Venezuelan gas, build the pipeline over to the industrial complex in Trinidad and liberate Venezuelan gas either for LNG or for the industrial complex along the coast there and one of those is our plant. I don't have significant confidence for the near to medium term given that there will be ample gas supply over to the island of Trinidad from Venezuela, and it's just owing to that sort of level of uncertainty as it relates to the region. So as we have looked at, there's a number of factors at play here.

Obviously, our plant has been throttled at 80% because of lack of gas for some period of time. In addition to that, now, we're facing increased costs for the gas and the natural gas companies has been very clear that gas prices are going up in an environment where we really don't make any money off our Trinidad plant's 3% of earnings and 1% of cash flow. And so for us, that was and is untenable and hence our plan to shut down. We are working with -- we continue to talk to the Trinidad government about whether there is a path forward here on affordable gas access to port at affordable fees and one that would allow us to operate at some, albeit slim margin. In the meantime, we have move to sort of revised operations where we're taking care of our idle plant with the core workforce. Over the coming months, we will look at -- continue to look at these alternatives and try to seek an arrangement where we can run this plant, but we'll see. So more to come on that front.

Matthew, it's Mark speaking. So on your second question on retail seed sales, I think there's 2 primary drivers of that. One of them would be intentional and strategic and within our control and the second, probably more out of our control and weather related. So on the first factor, as we've implemented the margin improvement plan that Ken spoke to in Brazil, some of that has involved moving away from lower-margin seed business, managing our expense profile, which while seed sales have declined, it's made the overall business healthier, as you've seen and generated significant improvement in Brazil, and that was a very intentional choice to improve the nature of our business operations there. The second would be the historic weather events that we saw in the U.S. South in the first half of 2025, which really resulted in a complete washout of some of the areas of the Delta and other places where we tend to have very high seed share and strong proprietary cotton and rice businesses.

And as we spoke about that in the first half of last year, that clearly had an impact on seed sales, and we would expect some of that to reverse this year on that second factor. If we step back from seed, we go back to some of the comments that Ken made this morning. Over the past 2 years, notwithstanding those challenges, we look at the broader retail business, earnings have grown $300 million of EBITDA despite those challenges. And when we look at the broader proprietary business, we grew by about 5% in 2025. And as we've said, we think that business will grow again by high single digits in 2026. So again, we think some of the seed sales related to weather will reverse themselves. And from a broader retail standpoint, for those items within our control, we continue to drive strong business performance and growth.

Your next question comes from Edlain Rodriguez of Mizuho.

Ken and Mark, we've seen what happened with phosphate when prices are too high. There was a pullback in demand in 4Q. Any concerns that something like that could happen in potash? Or is it that potash supply/demand is balanced enough that we are unlikely to see a fly up in prices?

Yes. Thanks, Edlain. And yes, I mean, I think you're absolutely right. We saw that in the fourth quarter as it related to phosphate. Indeed, for our phosphate business, we felt that as well. We were able to manage through that with some -- with the commercial team and we're still within our guidance range. But it is true that their farmers pulled back on phosphate. On potash, it continues to be the most affordable crop nutrient. And if we look at the supply and demand balance for 2026, we do see some demand growth, and you can see that as we look to the -- our estimate of shipments $74 million to $77 million, up from the midpoint -- sorry, the numbers from last year at $74 million to $75 million.

So demand growth, but we also see some new tonnes coming into the market from various places. I mean some would be our own but we see some additional tonnes coming in from FSU countries, maybe a little bit from Laos. Some of that's offset by declines in China and Chile. But we expect that, that combination of sort of smaller tonnes from these places, including our own when we talk about increasing production by 200,000 tonnes from last year, that we find ourselves in a somewhat balanced market. Let's see if we get into the higher end of that demand range, what the supply chains are able to handle.

We do believe we're getting up to some of those more challenged numbers when you're at the top of the range for supply chains and maybe even for operating rates. But in the meantime, we're experiencing what we call balanced market, and you see that reflected in the price, $375 in Brazil, $348 in China, $375 Southeast Asia and a relatively stable market. So I think it is a different story than the phosphate story.

Your next question comes from Kristen Owen of Oppenheimer.

I wanted to come back to the topic of your Brazil retail channel and just sort of ask you what the long-term strategic value is there, just given some of the previously discussed market challenges and I think you've alluded that, that business doesn't meet your internal hurdle rates. So is there some action that you could take to further narrow the gap versus your initial 2024 Investor Day guidance or maybe even recast those targets ex Brazil, so we can understand what that stand-alone business looks like?

Yes. Thank you, Kristen. And I would say that given that Brazil is really not contributing anything in terms of earnings or cash that the retail number is one ex Brazil. But at the same time, yes, I take your point about our future there and whether everything we're doing in Brazil makes sense for us. And so that's, again, the work of 2026. We've been pleased with our Brazil improvement plan. We've talked about that. And that met expectations for last year. It certainly did. So a lot of heavy lifting, but we got there. And we're on a similar path in 2026, but we are reviewing our seeds business and whether that's appropriate that that's within Nutrien or maybe better off in someone else's hands.

We do have conclusions on our proprietary product business in Agricen down there where we do see opportunity to grow, and it is certainly synergistic with everything we're doing -- everything else we're doing with Loveland products. And we can sell those products on shelves all over Brazil, not just necessarily our own. We know that we will be a large supplier of potash into Brazil and a growing supplier and that, that will continue. That leaves really the retail business. And yes, we're struggling with how to think about our retail presence in Brazil, whether that business can meet our financial thresholds that we expect when we deploy capital, whether there's better places to deploy capital. And if we come to that conclusion, what we might do with those retail assets. That's the work underway at the moment, and we'll have more to talk about that through 2026 and certainly some conclusions on those answers in 2026.

Your next question comes from Duffy Fischer of Goldman Sachs.

Just a question around your U.S. retail business. Investors have quite a lot of concern about the increase in Chinese generics in ag chem. We've seen a lot of pressure in Asia and Latin America so far. Do you see them trying to come direct in the U.S. trying to get labels, one? And then two, if they're not doing that, do you see them just kind of putting more pressure with lower-priced generics running through the retail chain here, but kind of dragging down ag chem? Is there a structural change happening there in your view?

Yes. Thank you, Duffy. And yes, we do see some generic pressure, not the likes of what we see in some other parts of the world like Brazil, but we do see some. But I'll hand it over to Chris.

Ben, thanks for the question. And as Ken said, we are seeing a little bit of that enter the market today, some of that direct-to-grower model. But what we really like there as we think about the future is, again, our proprietary products range. And like the -- as I said, the introduction of 26 new products this year. We've got a pipeline there. We're going to continue to develop going forward with our current supply partners. And so we like our position. We like the breadth of our network. We like the relationship we have with our growers as we continue to move those products. And so we don't see that sort of direct model today as a significant threat, and we really like the position we have with our proprietary product range.

Your next question is from Ben Theurer of Barclays.

I wanted to follow up on broader capital allocation and specifically on the share buyback. So over the last 2 years, you bought back 5% of shares outstanding, and you're basically saying now you could do up to 5% this year, which seems to be a decent increase. What are like -- what were internally like the alternatives looking creating maybe the dividend more or going more towards the share buyback? What were like the thought processes behind particularly where the stock price is right now?

Yes. Thank you, Ben. Yes. So we did renew the NCIB. The Board approved that yesterday at a level of 5%. Last year, we were buying back our stock at a rate of about $50 million a month. And here in 2026 is probably depending on how the year unfolds, but I think it's probably a good number to use for 2026 as we watch the year unfold. How we think about the buying back -- return of cash to shareholders via the buyback versus the dividend, we continue to use the word stable and growing on the dividend, but of course, buying back our stock actually has allowed us in total, all the time long us to buy down the dividend. But Mark, maybe you want to say -- provide some additional color there.

Sure. So yes, I'll just add a few points to what Ken mentioned. I think first and foremost and most importantly, our approach to capital allocation in 2026 will be entirely consistent with what shareholders have seen from us in 2025. So if we go through the high-level components of our capital allocation stack, we'll have total CapEx once again of $2 billion to $2.1 billion. That will be comprised of roughly $1.65 billion of sustaining CapEx and roughly $400 million of investments and growth CapEx. Capital leases, we expect to be consistent at about $0.5 billion. As Ken said, keeping dividend expense roughly stable at about $1 billion, and that leaves share repurchases. And so a real focus for us since the latter part of 2024 has been introducing ratability in that share repurchase program.

And as Ken said, the 5% authorization is really just our authorization to be in the market. Last year, we bought back about 2% of the stock. And when we look at our run rate so far in 2026, we've been doing about $50 million a month in repurchases. And we think that level of ratability makes sense for us. So those would be the major capital allocation priorities. I think it's worth noting that this is all anchored by a very strong balance sheet. And through strong performance in asset sales in 2025, we were able to tune up the balance sheet and put ourselves in an even stronger position by paying down over $600 million in debt. So we feel good about where that sits right now, and that will support our ability to make good on these capital allocation priorities all through the cycle in all types of market environments. So I'd say the punchline here is just continue to expect from us, what you've seen from us so far over the last year.

Your next question comes from Jeff Zekauskas of JPMorgan.

It looks like your inventories were, I don't know, $500 million higher in the fourth quarter than you wanted them to be. What is it that happened at the end of the year that led to that inventory build? And are there implications for the first quarter?

Yes. The big one with Jeff, would be weather. And so farmers just weren't able to get out and put down a normal fall application season. So it wasn't normal. And as a result, that those inventories, working capital carried through into 2026. So that would be one. Two is proprietary products. We held some proprietary product inventory that is still on the books that -- again, we expect in 2026 that we'll release those products and that will be released working capital. Those would be the big ones.

Your next question comes from Mike Sison of Wells Fargo.

Just curious, I appreciate the EBITDA sensitivities for potash and nitrogen. It feels like the base case is somewhere in the middle of those charts. But is that the case? And then what sort of gets you -- since you've given the wider range, what do you think drives it to the higher end of those charts and to the lower end of the charts this year, if at all?

Yes. I mean, as we look at our guidance ranges, when we talk about volume on potash, it really is good weather, leads to strong demand in the regions that we serve and outgoes more crop nutrients. And the lower end of that range would be the opposite of that would be challenged weather and inability to get out of the land. So that's on the volume side. On the price side of potash, it's the classic supply and demand discussion. And we just talked about 74 million to 77 million tonnes. Weather, if you get into the higher end of that range, that's what puts pressure on supply chain and operating rates and whether the market can actually supply those volumes, which, of course, would put pressure on price and hence, again, be at the top of that range. If you go over to nitrogen for us, it's at our plants, it's operating rates.

So higher operating rates, higher volumes and lower operating rates, lower volumes. It's true that we have 3 turnarounds this year, which we're going to be executing. That's a heavy turnaround year for us. And so when we talk about operating rates, it requires a strong execution across those turnarounds. We've planned well for those so that we expect we will have operating rates that would be analogous to what we saw last year, which is very strong. So that's on the volume side of nitrogen pricing, you go over to urea, you've got strong Indian demand, strong demand across the table actually, but you also have some supply uncertainty, particularly as it relates to what's happening in Iran and that geopolitical uncertainty.

So urea prices are tight at the moment given those supply and demand dynamics, and we see a world where that could persist for a bit longer here in 2026. On ammonia, seasonally lower volume in ammonia right now. We've had some production come back online. Gulf Coast, although going for a planned shutdown, so ammonia, yes, ammonia prices have been strong, but with some seasonal weakness, we see ammonia prices weakening a little bit. But over the course of 2026, yes, you're looking at the right bar, the right charts and as volume and price, we think -- we would say we're constructive across the board.

Your next question comes from Dave Symonds of BNP Paribas.

Just a bit of a conceptual one. I noticed that LNG Canada is ramping up. Are you expecting any impact on AECO gas prices from that? And is there anything you can do to mitigate the impact?

With the shift of Trinidad coming down, we were enjoying now 50% of our fleet being exposed to AECO gas and 50% of our fleet being exposed to Henry Hub. With Trinidad running, it was about 20% Trinidad, which is indexed to Tampa ammonia, and the other 80% divided between Henry Hub and AECO. The effect of Trinidad coming down and now just being exposed to North American natural gas has been to reduce sort of our effective gas price quite dramatically. So we like -- given that North America continues to be structurally advantaged on gas costs compared to places like Europe, we really, really like where our high-quality assets are sitting and running at the moment.

As it relates to LNG and LNG Canada, we've talked about sort of the flattening world as it relates to natural gas pricing and LNG moving over the planet and what that means for that structural advantage in North America. We believe that the North American structural advantage persists mostly because there are almost infinite volumes sitting on the continent in a very, very cost-effective way to extract those. So we believe that there is that structural delta that persists. LNG Canada or other LNG, yes, might work to flatten that, but we're very pleased with sort of the structural advantage we have.

There are no further questions at this time. I will now turn the call back to Jeff Holzman for closing remarks.

Okay. Thank you for joining us. The Investor Relations team is available if you have follow-up questions. Have a great day.

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Greetings, and welcome to Nutrien's 2025 Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A.

Thank you, operator. Good morning, and welcome to Nutrien's Third Quarter 2025 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts.

Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form.

I will now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments.

Good morning. Thank you for joining us today to review our results, strategic priorities and the outlook for our business. Through the first 9 months of 2025, Nutrien delivered structural earnings growth through record upstream fertilizer sales volumes, improved reliability and higher retail earnings.

We raised our 2025 potash sales volumes guidance range for the second time this year and maintained the midpoint of our retail adjusted EBITDA guidance, highlighting the stability of this business throughout 2025. At our June 2024 Investor Day, we communicated a set of strategic objectives and targets that we believe provide a pathway to increase our earnings and free cash flow.

Our results through the first 9 months show significant progress towards achieving these goals. Starting with our upstream operating segments. We increased fertilizer sales volumes by approximately 750,000 tonnes compared to the same period last year. These results highlight the capabilities of our world-class operations, extensive distribution network and strong customer relationships that we have built over many decades.

In potash, we delivered record sales volumes in the first 9 months. We increased the percentage of ore tonnes cut with automation to over 40%, maintaining our position as one of the lowest cost and most reliable global potash suppliers. Our nitrogen operations achieved a 94% ammonia utilization rate through the first 9 months, up 7 percentage points from the previous year. Our operating performance demonstrates the significant progress we are making on reliability initiatives across our Nitrogen business.

Within our Downstream Retail segment, we delivered 5% higher adjusted EBITDA in the first 9 months by driving down expenses and growing our proprietary product gross margin. We remain focused on efficiently supplying our growers with the products and services they need to maximize returns. As previously communicated, we are on track to achieve our $200 million cost reduction target 1 year ahead of schedule. These efforts contributed to a 5% reduction in SG&A expenses through the first 9 months of 2025.

We lowered capital expenditures by 10% on a year-to-date basis through optimization efforts focused on sustaining safe and reliable operations, along with a highly targeted set of growth investments. Delivering on these structural growth drivers, reducing expenses and optimizing capital spend has supported our ability to further enhance return of cash to shareholders. We allocated $1.2 billion to dividends and share repurchases in the first 9 months, representing a 42% increase from the prior year.

To put this all together, Nutrien is demonstrating significant progress across all our strategic priorities, delivering higher earnings and cash flow while increasing shareholder returns. At our Investor Day, we also communicated a focused approach to simplify our portfolio and review noncore assets. To date, we have announced the completion or have agreements in place for the divestiture of several noncore assets, including our equity interest in Sinofert and Profertil as well as smaller assets in South America and Europe.

These divestitures are expected to generate approximately $900 million in gross proceeds. We intend to allocate the proceeds to initiatives consistent with our capital allocation priorities, including targeted growth investments, share repurchases and debt reduction. We continue to assess assets on the merits of strategic fit, return and free cash flow contribution. As a result, we have initiated a review of strategic alternatives for our Phosphate business.

This process will include evaluating alternatives ranging from reconfiguring operations, strategic partnerships or a potential sale. We intend to solidify the optimal path forward for our Phosphate business in 2026. In October, we completed a controlled shutdown of our Trinidad Nitrogen operations due to uncertainty with respect to port access and a lack of reliable and economic gas supply.

Our Trinidad operations were projected to account for approximately 1% of our consolidated free cash flow in 2025, a contribution that has been under pressure for an extended period of time. We continue to engage with stakeholders and assess options to enhance the long-term financial performance of our Trinidad operations. Each of these portfolio actions are driven by a focus on enhancing the quality and consistency of our earnings, improving cash conversion and supporting growth in free cash flow per share over the long term.

Now turning to the market outlook. In North America, harvest is in the late stages of completion with the pace supportive of a normal fall fertilizer application season. In line with the stronger plant health season we experienced in the third quarter, we expect a record crop will support the need to replenish nutrients in the soil. Summer crop planting in Brazil started at a faster-than-average planting pace, which has supported crop input demand and increased potash purchases since the beginning of the fourth quarter.

In August, we increased our global potash shipment projection for 2025 to a record 73 million to 75 million tonnes. We expect demand will continue to grow at the historical trend level in 2026 with potash shipments forecast between 74 million and 77 million tonnes. This would mark the fourth consecutive year of demand growth, an indicator of the stability we are seeing in global potash markets.

Our positive outlook is formed by strong potash affordability, large soil nutrient removal from a record crop and low-channel inventories in most major markets. This is most evident in China, where reported port inventories are down by more than 1 million tonnes year-over-year. In addition, we anticipate limited new global capacity additions in 2026 with announced project delays and remain constructive on supply and demand fundamentals.

Global nitrogen supply challenges are expected to support a tight supply and demand balance going into 2026. Ammonia markets are currently very tight due to plant outages and project delays, and we anticipate the emergence of seasonal demand to further tighten urea market fundamentals. I will now turn it over to Mark to review our results, full year guidance and capital allocation priorities in more detail.

Thanks, Ken. As Ken described, our third quarter and year-to-date results highlight strong execution on our strategic priorities and supportive market fundamentals. Nutrien delivered adjusted EBITDA of $1.4 billion in the third quarter, a 42% increase compared to the prior year. In potash, we generated adjusted EBITDA of $733 million in the third quarter, which was higher than last year due to higher net selling prices.

Potash prices remained affordable on a relative and absolute basis, which supported sales volumes near record levels for the quarter. Our year-to-date controllable cash cost of product manufactured was $57 per tonne, which was slightly higher than the prior year due to lower planned potash production and increased turnaround costs.

At these levels, we continue to track favorably against our goal of maintaining a controllable cash cost that is at or below $60 per tonne. We raised our full year potash sales volume guidance to 14 million to 14.5 million tonnes, supported by strong offshore demand. Canpotex is now fully committed through year-end, and we anticipate a similar split between offshore and domestic sales volumes in the fourth quarter compared to the prior year.

In nitrogen, we generated adjusted EBITDA of $556 million in the third quarter, an increase compared to last year due to higher net selling prices and higher sales volumes. We advanced planned turnaround activities at our Redwater and Borger nitrogen facilities and achieved ammonia operating rates that were well above the same period last year.

Our nitrogen sales volume guidance range of 10.7 million to 11 million tonnes reflects the assumption of no additional sales volumes from our Trinidad operations for the remainder of the year. Reduction in Trinidad volumes is expected to be partially offset by the continued strong performance of our North American nitrogen operations.

In phosphate, we generated adjusted EBITDA of $122 million in the third quarter as higher net selling prices and sales volumes more than offset increased sulfur costs. Our phosphate operations achieved an 88% operating rate in the third quarter as reliability and turnaround activities completed in the first half led to a significant improvement in performance.

Our Downstream Retail business delivered adjusted EBITDA of $230 million in the third quarter, up 52% from prior year. We saw strong crop input demand across the U.S. corn belt, consistent with our previous expectations for a strong plant health season, providing Nutrien with the opportunity to efficiently serve growers in their efforts to maximize crop yield.

Our full year retail adjusted EBITDA guidance was narrowed to $1.68 billion to $1.82 billion, reflecting the continued stability of this business and execution of our strategic growth initiatives in 2025. We expect North American crop nutrient volumes to be slightly higher in the fourth quarter and per tonne margins similar to the prior year.

Our expense reduction initiatives and Brazil improvement plan continue to be in line with previous expectations, helping offset the gain on asset sales and other nonrecurring income items realized in the fourth quarter of 2024. Turning to capital allocation. Last year, on the third quarter call, we discussed our plans to optimize sources and uses of cash as we introduced a refreshed capital allocation framework.

We've taken decisive actions to execute our plans and our priorities remain consistent. From a uses of cash perspective, we're focused on sustaining our assets on a risk-informed basis and further evaluating opportunities to optimize spend as we complete our portfolio optimization initiatives. We're also investing in a narrow set of growth initiatives that have a strong fit with our strategy, attractive returns and a lower degree of execution risk.

And we continue to build on our long track record of stable and growing dividends per share and are deploying capital towards ratable share buybacks that provide for more consistent returns of cash to shareholders. As an illustration, through the first 9 months of 2025, we repurchased shares at a rate of approximately $45 million per month and anticipate a similar run rate on a full year basis.

As we enhance our structural cash generation capabilities and deploy proceeds from the announced divestitures, we also expect to meaningfully lower our net debt position by year-end and gain greater flexibility to allocate capital through the cycle. I'll now turn it back to Ken.

Thanks, Mark. We have a constructive outlook for our business, which is supported by expectations for healthy crop input demand and growth in global potash shipments in 2026. We continue to progress our strategic initiatives and take actions to simplify our portfolio, enhancing earnings quality, improving cash conversion and supporting growth in free cash flow per share over the long term.

These features underpin Nutrien's competitive advantages and offer a compelling investment case for our shareholders. Finally, I would like to share an update on the advancement of our succession planning process. After an outstanding 30-year career at Nutrien, Jeff Tarsi will be stepping back from the leadership role of our Downstream Retail business at the end of 2025.

I'm pleased to announce that Chris Reynolds has accepted the leadership position for our Downstream business beginning in 2026. Chris has been with the company for 22 years and has held senior leadership positions in our sales, potash and commercial functions. He brings deep knowledge of our business and the markets we serve across our downstream network. Jeff will remain with Nutrien in an advisory role to support the transition and execution of our downstream strategic priorities. We would now be happy to take your questions.

[Operator Instructions] The first question comes from Andrew Wong from RBC Capital Markets.

So just regarding that Phosphate business today. How would you say cash generation for that business compares to the rest of your business? Are there certain parts of the Phosphate business that maybe are better cash generators than others? And then just regarding that strategic review, is there -- is this about the business maybe just being better suited to run a different way? Or is there something specific about the phosphate assets or the phosphate outlook that's prompting the review?

Yes. Thank you, Andrew. At our June 2024 Investor Day, we talked about this focused approach to simplify our portfolio, with the focus really being on quality of earnings and free cash flow over the long term, and that's absolutely relevant to your question. It is true that we produce phosphate out of White Springs and Aurora. But at the same time, it's only contributing about 6% of our EBITDA.

So as we looked at it, it compels us to do a strategic review. And of course, this is on the heels of some of the portfolio of the work that we've been doing, disposing our Sinofert shares, the process that we're in to close Profertil by the end of the year and other noncore assets.

And that's all adding up to about $900 million to date. For our Phosphate business, and again, to your question, we're looking at a range of alternatives across our strategic review. And that could be everything, yes, from revised and reconfigured operations with the goal of maximizing and optimizing free cash flow and strategic partnerships that we'll be looking at and the sale as well. We'll be looking at all those alternatives, and we expect to have some conclusions about the path forward in 2026.

Our next question is from Ben Isaacson from Scotiabank.

Mark, I have a question for you. You've worn the CFO hat for a little over a year now. I was hoping you could reflect on what initiatives you've undertaken or what's changed in your role? And then as part of that, last summer in '24, targets were set for 2026. And now as we're 7 to 8 weeks out from the start of '26, can you just give us a check-in on just some of the big targets that were set and how those are tracking?

Ben, thanks for the question. So I'll maybe just start by reiterating some of the comments that Ken and I provided in our prepared remarks this morning. So as you noted, Ken and our team, we laid out a set of objectives and targets at the Investor Day in June 2024. And as we've said this morning, those were focused on levers to drive structural growth in earnings and free cash flow over time.

If you look at the progress we've made on a year-to-date basis and our full year guidance, I think you can see we've made very significant progress on those initiatives. If you look at upstream fertilizer sales volumes based on the midpoint of our guidance for 2025, we're on pace to deliver 1.4 million tonnes of volume growth compared to the baseline we set at Investor Day from 2023 results.

And obviously, this has come from a few different areas. There's been a focus on reliability, debottlenecking projects in nitrogen and then utilizing our existing potash capacity. And all of those are, of course, very low capital intensity initiatives, and they've got strong cash margin contributions.

From a downstream perspective, we set targets to grow earnings through a number of levers, including expanding proprietary products, our network optimization, expense management, margin improvement in Brazil and bolt-on acquisitions, primarily in North America. And if you look at our progress to date versus that 2023 baseline, we're projecting that there will be $300 million in retail EBITDA growth at the midpoint of our 2025 guide.

And we're pleased with that, and we think that's something that can continue over time. In terms of cost discipline, as Ken mentioned, we set a $200 million cost reduction target for 2026. We're a year ahead of schedule on that. And of course, we're always looking for more. And also, as Ken mentioned, we've completed or have agreements in place to divest noncore assets as part of our portfolio review that will have generated once closed about $900 million over the last year.

And these are assets that didn't fit the strategy, weren't consistently generating cash flow for Nutrien. And so we're pleased with that as well. So all of these initiatives feed into that objective that Ken talked about in terms of increasing structural sources of cash flow. And then, of course, beyond this, as Ken has just mentioned, we've announced a strategic review of the Phosphate business, and we continue to assess our options at Trinidad.

And all of that's in the spirit of increasing quality and resilience of free cash flow. From a uses of cash perspective, we set a target at that Investor Day that you highlighted to reduce CapEx to $2.2 billion to $2.3 billion. And as you know, we've overachieved on that target through optimization efforts. Our guidance this year is $2 billion to $2.1 billion, and we're focused on maintaining discipline in this area moving forward.

And then finally, one of the items you've heard us speak about over the past year quite a bit is to further enhance our cash returns to shareholders, primarily through more ratable share repurchases. Through the first 9 months, we increased return of cash to shareholders through dividends and share repurchases by 42%, and we've ratably bought back shares at that pace I mentioned of around $45 million per month.

And Nutrien shareholders should continue to expect that ratable repurchases are going to be a part of a consistent staple in our capital allocation framework going forward. So as Ken said and I've said, we think we've made a lot of progress over the past year on our strategic priorities. We're continuing to take actions to enhance our competitive position, and we believe this will drive structural growth in free cash flow per share over the long term.

Our next question is from Hamir Patel from CIBC Capital Markets.

Ken, beyond the strategic alternatives review of phosphate, whatever plays out in Trinidad and the divestitures you've already announced, do you see any other meaningful opportunities for noncore asset sales over the coming years?

Yes. Thanks, Hamir. No, that -- I think for the time being, we're really focusing on the things that we've talked about. And so we've talked about phosphate, obviously, working very hard on the Trinidad file and assessing options as we go forward there and making sure that we carry on with our improvement plan in Brazil.

Those would be the three big areas of focus, I would say, going into and through 2026. And again, as Mark just described, expecting that as we progress through that work, really an improvement in quality of earnings and free cash flow.

Our next question is from Joel Jackson from BMO Capital Markets.

Maybe a shorter-term question. Maybe talk about the fall season. You talked about maybe crop nutrient demand being up year-over-year in Q4. Maybe talk about for the fall season. Maybe talk about 85% expectations a few months ago. How is this fall playing out? It's been an early harvest, but there's a lot of uncertainty going on. One of your large competitors is talking about seeing phosphate demand deferral, which may also lead to potash demand deferral. Can you comment on all that, please?

You bet, Joel, thanks for the question. Yes, we haven't changed our -- the midpoint of our guidance in our Retail business, as you know. And we're staring into the fall, which the next 2 weeks will be kind of critical for that. As we've mentioned, we're on track in Brazil for this year.

Here in North America, we're coming off a strong Q3, good plant health season for both crop protection and crop nutrition. Heading into the fall here, yes, we expect that nitrogen volumes probably up. Potash volumes may be a bit flattish from last year and perhaps phosphate volumes a bit down. But it's a few days into November here, Jeff, I'll pass it over to you.

Yes. Thanks, Ken. Yes, so we -- as you would have seen in our results, our growers stayed very engaged through the third quarter. In our business, Ken mentioned very strong plant health sales in that quarter as growers were working to protect yields. And I mentioned that because we're just at the completion of harvest now and crop yields look very strong, especially across corn and soybeans.

Strong crop yields lead to what we need to replenish for going into the '26 crop. We're doing a lot of soil testing right now. Our largest 2 weeks of application are the week we're in right now and this following week. And to date, weather looks favorable. From that standpoint, we're seeing pretty robust action right now out in the field. A lot of anhydrous going down and then of course, our dries P&Ks as well.

But I'll remind people that growers footfall applications out in order to get ahead of the next year's crop. And corn looks strong again for '26. And so growers are going to want to get out ahead of that in the best way that they can. And as Ken said, I think in our projections at the midpoint of our guidance, we just got slightly elevated volumes compared to last year. And if you remember last year, we got -- we did get into some weather issues, especially as it related to anhydrous ammonia.

Our next question is from Chris Parkinson from Wolfe Research.

Great. Just real quick, when you take a step back on your nitrogen strategy, could you just kind of go through how you're thinking about the intermediate term in terms of what facilities kind of can make up a little bit of that gap based on what cadence you were seeing out of the T&T assets in 2025? And perhaps a quick comment on just how you're thinking about the longer-term strategy. I mean are you interested in assets? Would you ever consider a greenfield again? Perhaps that's still a question. But just an updated thought process would be very helpful.

No, that's great. Thank you, Chris. I mean as you know, I think we've been working on reliability issues in nitrogen and challenges that we've had there and deploying meaningful sustaining CapEx and focusing on some of the bad actors in our portfolio and our fleet.

And those -- that's yielding results with the 94% operating rate that Mark mentioned earlier. We're also working on our ongoing debottlenecking and brownfield initiatives that are adding tonnes. When we talked about 11.5 million to 12 million tonnes at our June 2024 Investor Day, certainly part of those volumes were coming from those debottlenecking and brownfield initiatives.

And we have more opportunity there as it relates to expanding our nitrogen volumes. And we would look at those opportunities, which would be low CapEx, high-margin opportunities prior to certainly looking at something like a greenfield opportunity. In the context of the broader portfolio, which, of course, includes Trinidad, I mean, as we speak, high operating rates in our fleet ex Trinidad are helping to make up some of the difference with our Trinidad operations being, of course, shut down, as you know.

In Trinidad itself, we are looking at our various alternatives, assessing options because we do need line of sight to stable and economic gas supply and, of course, access to port. So we're working -- talking to the Trinidad government about what those sort of optimal operating conditions might be. And again, as I say, assessing our path forward.

Stepping back from it all, our Investor Day targets, 11.5 million to 12 million tonnes next year, that did include us achieving our full complement -- the 12 million tonnes, our full complement of natural gas supply in Trinidad. The 11.5 million tonnes, the math there would say that you sort of get the 80% of our gas complement in Trinidad to get to that 11.5 million tonnes, depending on the outcomes in Trinidad now, we'll see as our operating rates come up in the balance of our fleet, and we chart our path forward on the island there in Trinidad.

Our next question is from Vincent Andrews from Morgan Stanley.

Could you speak a little bit about the Latin American, maybe more specifically the Brazilian environment, just both as we exit this year and into next year, I see you're projecting another year of growth there for potash shipments.

But maybe you could just sort of talk to the credit conditions and the incremental financing terms in terms of how fast you're able to get paid down there still? And what gives you the confidence that, that market can grow again in '26 off of very high levels despite the challenging farmer economics and limited credit that's available?

Yes, thanks for the question. So yes, I think the most important point for us is that our -- we're on track with our improvement plan in Brazil. And that's included the things that we've talked about, the shattering of our -- idling of our five blenders. We've talked about unproductive locations and having closed 54 of them now, workforce reduction, 700 people.

But to the question, also allocating resources with a real focus on credit and credit collection. And that is, again, largely playing out as we had assumed here in 2025 and hence, part of the story of being on track with our improvement plan. As it relates to growth in agriculture in Brazil, we have seen, once again, a 2% increase in Brazil from last year. Last year, 47 million tonnes of fertilizer went in land on to Brazilian farms, and that's up again 2% this year.

And it's the case that looking at corn and soybean prices, Brazilian farmers continue to do the things that they need to do to maximize yield and appropriate application rates are part of that story. So we've been here before, but year-over-year, the Brazilian farmer with expanded acreage and a focus on yield continues to import more volumes. And of course, we, as Nutrien and Canpotex have been the biggest part of that story, now the largest supplier of potash into Brazil. The last thing I'll say is we continue to focus on our proprietary products, also experiencing growth on Brazilian farms, and that will continue to be a focus of ours as well.

Our next question is from Steve Hansen from Raymond James.

If I'm thinking back in time when you've actually divested a phosphate asset, I think you've really tried to retain much of the strategic value through some longer-term offtake, at least in the initial term. In the context of the current review, really what is the optimal outcome for you?

It sounds like all options are on the table, but have you thought about trying to maintain access to the supply as it relates to your integration benefits? You're just looking for someone to cut you a check. How do we think about the optimal outcome here for you as you go through this review process?

Yes. No, thanks, Steve. And actually, it's really everything, all of the above. So we will look at a range of alternatives as it relates to, as I mentioned earlier, reconfigured operations, partnership sale and could that include some form of contractual arrangement. I suppose that's possible. But I can tell you what we will be solving for is free cash flow.

And yes, we could probably achieve that in a number of ways. It's early days for us and we just announced their strategic review. The time is good for that. Obviously, what's happening in the phosphate market, the focus on mineral that's as important as they come in the U.S. and of course, the focus on -- in the U.S. on domestic security of supply for something as critical as phosphate.

So the time is right for us to announce this. And now that we've announced it, we can talk freely about these strategic options and do the full review assessment. Again, we expect to have line of sight to that in 2026. So we'll have more to talk about.

Our next question is from Kristen Owen from Oppenheimer.

A couple of things on the Retail business. First, anything that maybe shifted from 2Q to 3Q? I know we had some weather issues. So anything that maybe went a little bit better than expected once we account for that timing shift?

And then separately, I wanted to ask about your proprietary products, the growth opportunity there, particularly now that one of your large customers is going through a bit of a restructuring themselves, if that offers an opportunity for you or if there's any real change with that large customer in the retail business?

Yes. Thanks for the question, Kristen. I'll hand it over to Jeff to talk about, as you say, any questions, any shifts between quarters, I think the answer there is not really. And then certainly, on proprietary product growth, I think I know the challenge that you're pointing to, but the growth that we're experiencing would certainly be independent of that. But Jeff, over to you.

Yes, Kristen, as far as any kind of shift from Q2 to Q3, no, everything is pretty much going as we've expected this year, especially as it relates to when we capture revenue and margin from that standpoint. You've always got some give and takes in there, but there would be nothing material from that standpoint.

On the proprietary side of our business, proprietary products continues to be a very strategic growth driver for our business. We just finished a very strong third quarter as it relates to proprietary products. In the third quarter here, we had significant increase in margins on our nutritionals and biologicals, which again is very impressive. And we also had an uplift to margins in our crop protection side of our business as well in the quarter.

And if I look at our portfolio of proprietary products today, I think we're sitting in a good place. I think we basically have what we need from that standpoint. We've got a very strong seed play as it relates to proprietary products, Dyna-Gro and Proven varieties. We've got a very strong play on our crop protection side of the business, and we continue to talk about our nutritional and biologicals.

And I think as we go into 2026, you're going to see us introduce over 30 new products globally in our business. About half of those are going to be crop protection products. We're going to introduce seven new nutritional products and several seed treatment products. So again, that's going to continue to be a strategic growth driver for our business, very critical to the growth that we talked about, especially as we reach out into '26.

Our next question is from Matt DeYoe from Bank of America.

This is Salvator Tiano in for Matt. So I want to go back to the phosphate strategic review. And specifically, there was one of the options, not the sale of -- or partnership, but the reconfiguration of the business. And can you clarify a little bit what does this mean? Would you, for example, try to make products more for the feed or the food market or even try to do something like purified acid for LFP batteries? And also, can you remind us what are your ore reserves in phosphate?

Yes. No, thanks for the question. And so reconfigured operations, I think, means probably everything that you just described. And again, we're looking at that at the moment. We have, as I think you probably know, we have improved reliability rates at our Phosphate business. We have reduced costs, and we have diversified our product mix.

We've done all those things. At the same time, phosphate still only contributes, as I mentioned earlier, 6% of our EBITDA. So when we use the words reconfigured operations, it is exactly, as you say, looking at life of mine at both White Springs, Aurora, assessing how we best exploit the remaining reserves. There's also additional reserves in the area. So we're looking at all those things. And again, we'll have more to talk about on the path forward as we conduct the review.

Our next question is from Jeff Zekauskas from JPMorgan.

You've stressed share repurchase as a use of capital for you. I think over a 10-year period, the average price of Nutrien is $57. And if it turned out that 5 years from now, the price of Nutrien was still $57, would it be a mistake to repurchase shares or not?

Yes, thanks for the question, Jeff. And, yes, I would say that our strategy now as it relates to return of cash to shareholders, of course, we use the word stable and growing dividend and ratable share repurchases. As we look at the word ratable, we'll always assess whether in the moment, at the time, based on our outlook, based on our assessment of value, whether that makes sense. So it's not with the blinders on at all times, just charging forward, we do think about value as we deploy our share buyback programs.

Our next question is from Edlain Rodriguez from Mizuho Securities.

Ken, so when you look at all the puts and takes in the different nutrients right now, like what's your sense of like near-term pricing movement? I mean which one do you think is better positioned to see an uptick in pricing or do prices need to take a breather from where they are now?

Yes. Thanks for the question, Edlain. It's just going back to the fundamentals and understanding in potash, when we say 74 million to 77 million tonnes and looking at how we're going to supply as an industry, how we're going to supply into that range. I mean at the midpoint, that's about 1.5 million tonne increase from 2025. And that would include probably some supply additions from FSU, maybe 0.5 million tonnes from Canada, 0.5 million tonnes -- and then Laos. And of course, we know Laos -- adding 0.5 million tonnes out of Laos would be a real challenge, I think, given some of the existing challenges in that part of the world.

So you look at the level of crop nutrients that have been pulled out of the soil in 2025, you look at the affordability of potash today, and importantly, you look at channel inventories in potash and really being at average or at below average levels, I mean, China is a great example of that, where port inventories are down 1 million tonnes from last year. And so we're constructive on potash heading into 2026, and it's for all of those reasons.

Similar story in ammonia and urea, I mean, export restrictions in China on urea having been eased. But just through the summer here, we saw strong demand out of India and now heading into the fall here, seasonal demand, which we expect and probably as we speak, are seeing some firming in urea pricing. And then on ammonia, I mean, on the supply side of the equation, there's all kinds of challenges there and even our own Trinidad operations, which are shut down this year.

I would say phosphate probably will continue -- and again, looking at the supply and demand balance, it will probably continue to be tight. I know that potash -- sorry, phosphate prices are elevated compared to historical average levels. But at the same time, it's a supply story. And while we might see some reduced phosphate volumes going down here in the fall, given where phosphate prices and therefore, affordability is at, we might see some of that. We expect that, like I say, into 2026, the market will continue to be tight.

Our next question is from Michael Doumet from National Bank.

So you've completed a few acquisitions, and you expect to have leverage come down in Q4. And then again, I think next year, another potential divestiture if that happens. Any way you can frame out how much debt you'd like to repay before you consider introducing maybe some additional flexibility into how you're thinking about capital allocation/your share repurchase program?

Yes. You bet, Ben, thanks for the question. And so yes, we will end the year having paid down -- reduced some debt. That's true even while we've increased returns -- cash returns to shareholders, as I mentioned earlier, by over 40% compared to last year. And yes, heading into 2026, we'll see how the year plays out and some of the things that we've announced and how we're thinking about proceeds among our capital allocation priorities. But I'll hand it over to Mark maybe just to provide a bit more detail.

Sure. Thanks, Ken. So look, I think you step back and think about the priorities we've articulated, capital discipline, cost discipline, the overall focus on free cash flow and really being able to do that on a through-the-cycle basis, really regardless of market conditions. So we've built the strategy, built the capital allocation and returns framework to really be consistent across cycles such that Nutrien will generate structural free cash flow at any commodity price that we can foresee and have consistent abilities to deploy that capital.

So when you look at the actions we've taken to enable that, I think the track record is strong over the last year. Specifically on your question, part of being able to support that framework across the cycle is having debt in an appropriate position. We haven't changed our perspective that BBB flat from a rating standpoint is the right place for us. But as we look through a cycle, we think that at roughly mid-cycle prices, we should be roughly 1.5x adjusted net debt to EBITDA.

And when we get into a trough, although we can go higher than this, we think 2.5x is probably the trough that we'd like to see when we get to the bottom of the commodity cycle such that we have abundant optionality to take advantage of those moments, return capital to the shareholders and do all the things that we need to do.

So what you've heard us articulate today is that with the benefit of divestiture proceeds and the strong cash flow from operations that we're going to see in 2025, we're going to take a step closer to that. And we think we'll be getting in the ballpark. Of course, as we move forward and Ken articulated, we're always going to be looking at the best use of deployment for the cash that we have that maximizes value for our shareholder. So we believe we're on the right track with that.

Our next question is from Ben Theurer from Barclays.

On some of the commentary you already made in regards to the Trinidad assets. Now I was wondering if within the asset review, aside from what you've talked about, phosphate and then obviously, we have the Trinidad decision pending. How you think about the rest of your portfolio? Are there any other assets that you would consider for divestiture or any sort of like an adjustment here given where the market conditions are in the different locations?

No. Thanks for the question, Ben. And it's the case and will be the case that we'll be perpetually reviewing our portfolio. And again, we're talking about our objectives of earnings quality and free cash flow per share and being able to structurally improve those metrics over the long term.

As I mentioned earlier, at the moment, consuming our attention is phosphate, is Trinidad and is our work in Brazil. We -- among our divestiture program today, we've talked about our -- to date, we've talked about our Sinofert shares, talked about Profertil. There are a few other smaller assets that we've divested of in Europe and in Latin America.

And would there be other smaller assets that we would look at sort of cleaning up in the portfolio? There would be. But there would be nothing that I would describe beyond those three areas of focus today that I would call material. And so again, today, the big things that we need to focus on and talk about are phosphate, Trinidad and Brazil.

Our next question is from Lucas Beaumont from UBS.

I just wanted to clarify a couple of things. So I guess just on Trinidad to start with, so to the extent that remains shut down into 2026, what's the sort of fixed cost base there on EBITDA that will be impacting you? And then just secondly, I saw your potash shipment outlook for North America is flat year-on-year into next year. So are you guys assuming that you don't get any kind of demand destruction impact there at all?

Yes. No, on Trinidad, we'll see, Lucas. We're certainly not prognosticating that we're going to be shut down into 2026. We're just -- we're working through that at the moment and looking for those optimal operating conditions where, again, reliable and affordable gas supply and access to ports and in those discussions today. So those discussions will be ongoing.

Trinidad contributes less than 1% of our free cash flow. And so it is from that perspective, in terms of the overall contribution, it's de minimis. As it relates to potash volume growth, I think the best way to think about it is the potash market continues to grow. And we had talked about after some of the demand destruction that we saw, the conflict in Eastern Europe, the return to trend level of potash demand.

And indeed, that is exactly what we have been experiencing for the last few years. And given everything that we're seeing on crop nutrient removal from the soil on channel inventories and overall affordability for potash, we expect trend level demand to continue into 2026, and that's why we say 74 million and 77 million tonnes.

And for our part, you can think about us participating in that demand growth in the way that we always have. And so sort of that 19% to 20% market share. And so as we look at how we're going to guide into 2026, it will be doing exactly that kind of math. And as you know, with our 6-mine network and our capability to continue to grow our volumes at a very competitive capital, we'll continue to pace along with growth in the market.

Our next question is from Jordan Lee from Goldman Sachs.

Just another one on the Trinidad closure. You mentioned that it contributes a small amount of free cash flow. Can you discuss the different possibilities you see for that asset? Do you think there would be interest if you were to try to sell it? And is that something you are considering?

Yes, thanks for the question, Jordan. What I'll say today is just the things that I've reiterated, and that is we're searching for an optimal path forward here as it relates to our operating configuration in Trinidad, which is dependent on arriving at, as I say, reliable and affordable supply of natural gas in the region, and access to ports so that we can export the volumes off the island. That's the focus for today.

Thank you. There are no further questions at this time. I will now turn the call back to Jeff Holzman for closing remarks.

Okay. Thank you for joining us today. The Investor Relations team is available if you have any follow-up questions. Have a great day.

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Greetings, and welcome to Nutrien's 2025 Second Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A.

Thank you, operator. Good morning, and welcome to Nutrien's Second Quarter 2025 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information.

Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form.

I'll now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments.

Good morning. Thank you for joining us today as we review our performance in the first half of 2025, progress on our strategic priorities and the outlook for our business. Our first half results featured record potash sales volumes and nitrogen operating rates, lower expenses, reduced capital expenditures and increased returns of cash to our shareholders. We raised our 2025 full year guidance for potash sales volumes while maintaining all other operational guidance ranges.

At our Investor Day in June 2024, we communicated a pathway to structurally improve our earnings and free cash flow through strategic initiatives across the portfolio. We also shared key operational and financial targets to measure our progress. Our results through the first half of 2025 demonstrated significant progress towards achieving these goals.

Starting with our upstream operating segments. We increased fertilizer sales volumes by more than 400,000 tonnes compared to the same period last year and realized higher net selling prices. These results highlight the capabilities of our world-class operations, extensive distribution network and strong customer relationships that were built over many decades. We continue to prioritize investments that further strengthen our ability to cost effectively supply the growing needs of our customers.

In potash, this includes advancing mine automation projects that enhance efficiency, flexibility and most importantly, safety benefits at our sites. In the first half of 2025, we mined over 40% of our potash ore using automation. This is within our 40% to 50% target range for 2026.

Our nitrogen operations performed exceptionally well in the first half, achieving a 98% ammonia utilization rate. The focus on reliability projects at our nitrogen sites have yielded clear and favorable results. Further, brownfield debottlenecking efforts are now complete at our Redwater and Geismar plants that will add 150,000 tonnes of annual production capacity.

Within our downstream Retail segment, well-defined growth opportunities continue to be progressed, along with network optimization initiatives that resulted in a 6% reduction in expenses in the first half. As previously communicated, we are ahead of schedule on our company-wide $200 million cost savings target and expect to achieve this goal in 2025.

Capital expenditures in the first half of 2025 were 18% below the prior year as we optimized capital to sustain safe and reliable operations and progressed a set of targeted growth projects. We allocated $786 million to dividends and share repurchases in the first half, representing a 49% increase from the prior year.

To put this all together, Nutrien generated higher earnings and cash from operations driven by supportive fertilizer market fundamentals and execution of our strategic priorities. We lowered costs and capital expenditures through efforts to simplify and focus our business, and we significantly increased the distribution of cash to shareholders. We believe these actions build upon the strength of our world-class asset base and position the company for strong performance into the future.

Now turning to the market outlook. Global fertilizer fundamentals have strengthened in 2025, leading to higher benchmark prices across nearly all products. Potash prices increased at a steady pace since the beginning of the year, driven by trend demand growth that is testing global operating and supply chain capabilities. The settlement of potash contracts with India and China and favorable economics for key crops grown in Southeast Asia is expected to support demand in standard grade markets in the second half of 2025.

We had a solid uptake on our potash summer fill program in North America and anticipate stable demand in Brazil. As a result, we have raised our 2025 full year global potash shipment forecast to 73 million to 75 million tonnes. Beyond 2025, we see a constructive outlook for the potash market. We expect demand growth in line with historical trend levels and limited new capacity additions in the near term. Recent industry announcements further highlight that building new capacity requires significant time and capital and often comes with the risk of delays.

Global nitrogen markets are being supported by supply-side challenges and strong seasonal demand from markets such as India. Nitrogen prices in the U.S. have been further supported by low domestic inventories and trade flow shifts, which we anticipate continuing in the second half of 2025. Phosphate markets remain tight due to limited supply, including Chinese export restrictions. We expect global shipments in 2025 will be constrained by supply availability and a weaker grower affordability for phosphate fertilizer could impact demand.

We continue to closely monitor supply and demand developments for ag commodities and farmer sentiment in our key markets. Crop input demand in North America was strong in July as farmers focused on maintaining optimal plant health and yield potential. Based on current projected crop yields, we expect large nutrient removal will support the need to replenish nutrients in the soil.

Brazilian soybean acreage is expected to increase by 1% to 3% in 2025, driven by strong international soybean demand. Growers in Brazil have been more active purchasing crop inputs in advance of the upcoming spring planting season compared to the prior 2 years. Overall, we continue to see a solid backdrop for our business in the second half of 2025 and are well positioned to serve our customers.

We're operating the most extensive network of assets across the ag value chain, and we'll continue to focus on factors under our control to optimize free cash flow under any market conditions.

I will now turn it over to Mark to review our results, full year guidance, and capital allocation priorities in more detail.

Thanks, Ken. As Ken described, our second quarter and first half results highlight strong pace of progress towards our Investor Day targets. Nutrien delivered adjusted EBITDA of $2.5 billion in the second quarter, up 11% from the prior year, while cash provided by operating activities rose by 40%. In potash, we generated adjusted EBITDA of $630 million in the second quarter, well above the prior year due to record sales volumes and higher offshore net selling prices.

Our North American net selling price was down from the same quarter in 2024 but up $36 per tonne from the first quarter of 2025 as we benefited from price increases following our winter fill program. Our first half controllable cash cost of product manufactured was higher than the prior year due to lower planned potash production and increased turnaround costs.

However, we continue to track favorably against our goal of maintaining a controllable cash cost that is at or below $60 per tonne. We raised our full year potash sales volume guidance to 13.9 million to 14.5 million tonnes due to the strength of first half sales and increased visibility on the second half order book.

Canpotex is fully committed for third quarter sales volumes and has a significant order book in place for the fourth quarter. We had a favorable response to our domestic summer fill program and anticipate a similar split between offshore and domestic sales volumes in the third quarter compared to the prior year.

Our nitrogen operating segment generated adjusted EBITDA of $667 million in the second quarter, up from last year due to higher net selling prices and sales volumes. Our nitrogen plants operated very well, achieving a 98% ammonia operating rate in both the quarter and the first half. We have maintenance scheduled at our Redwater and Borger nitrogen sites starting in the third quarter that will reduce our planned second half ammonia operating rates to around 85%. Overall, we anticipate higher year-over-year operating rates on a full year basis and have maintained our nitrogen sales volumes guidance at 10.7 million to 11.2 million tonnes.

In phosphate, we generated adjusted EBITDA of $92 million in the second quarter, with higher net selling prices offset by lower sales volumes and higher sulfur input costs. We completed two successful turnarounds in the second quarter and have operated at higher rates since the completion of this planned maintenance, positioning our phosphate business to deliver increased sales volumes and lower operating costs in the second half of the year.

Our downstream Retail business delivered adjusted EBITDA of $1.15 billion in the second quarter, up 2% from the prior year. We saw strong crop input demand in the U.S. Corn Belt, consistent with our previous view that a slower start to field activity in March would be made up in the second quarter. This strength was partially offset by unfavorable crop protection product mix shifts, dry weather in Australia, and wet weather in the Southern U.S. that impacted planted acres. A loss of rice and cotton acres in the South was a primary contributor to the reduction in our proprietary seed sales in the second quarter.

We've maintained our full year Retail adjusted EBITDA guidance of $1.65 billion to $1.85 billion, with the midpoint of the range underpinned by four key items. First, as Ken mentioned, we saw strong North American crop input demand in July and anticipate higher crop nutritional and crop protection purchases in the third quarter compared to the prior year. Second, we assume an open fall season in North America and project fertilizer volumes up approximately 5% compared to last year, which had a shortened application window due to wet weather.

Third, timely rains have improved winter crop planting prospects in Australia, and the outlook for crop input demand looks more favorable for the second half of the year. And finally, our margin improvement plan in Brazil remains on track, and we expect to generate increased year-over-year earnings through network optimization initiatives. To summarize, we delivered higher earnings and cash flow in the first half of the year, and we see clear momentum for growth on a full year basis, supported by higher upstream fertilizer sales volumes, net selling prices and downstream Retail earnings.

In terms of capital allocation, our priorities remain consistent. We are focused on initiatives that support the achievement of our 2026 performance targets, optimizing investments in working capital and continuing to review noncore assets on our balance sheet, all of which we expect will enhance sources of cash flow over time.

From a uses of cash perspective, we have committed capital to sustain safe and reliable operations and forge a narrow set of growth opportunities that have a strong fit with our strategy, are expected to provide returns in excess of our hurdle rates, and have a relatively low degree of execution risk.

We have a long track record of providing a stable and growing dividend and intend on enhancing the return of capital to shareholders through more ratable share buybacks through the cycle. We remain disciplined in our approach to maintain a strong balance sheet and prioritize capital towards opportunities that we expect will deliver long-term growth in free cash flow per share.

I'll now turn it back to Ken.

Thanks, Mark. We have a constructive outlook for our business as global fertilizer market fundamentals have tightened in 2025, supported by strong demand, persistent supply disruptions and project delays. We demonstrated strong operational performance and execution on our strategic priorities in the first half of the year, structurally improving Nutrien's earnings and free cash. We continue to strengthen our highly competitive asset base across the ag value chain and remain committed to disciplined capital allocation to maximize long-term value for our shareholders. We would now be happy to take your questions.

[Operator Instructions] The first question comes from Chris Parkinson from Wolfe Research.

At the beginning of the year, there's a little bit of a debate on potash supply being offline and the market and price appreciation being more of a supply-driven market. And towards the end of the first half, it became more evident that it was more of a demand-driven market. But it seems investors are still on edge, given some belief that half-on-half supply is going to dramatically improve and basically curb upside to prices or even lead to declines. Can you just give us your updated thoughts on those specific dynamics, especially out of the FSU and then kind of how that sets up for the 2026 market?

Yes. Thanks, Chris. Yes, so talking specifically about potash, if we -- looking globally, we're seeing very strong demand. We saw a return to trend level demand last year coming out of '22 and '23. And that's certainly the case this year where we've raised our expectations for the market to 73 million to 75 million tonnes. So that would be the strongest demand that we've seen in the market.

And we also have confidence that, that potash is going to ground because we don't see inventories elevated really in any market around the world, and actually, in several cases, we see inventories below average levels. Part of that has to do with the fact that potash is still relatively affordable. It's the most affordable crop nutrient. And as you say, with that strong demand, it is testing the ability of the market to supply both in terms of mine production but also the supply chain as well and so at the intersection of that very strong demand and -- and what we're seeing on the supply side of the equation, which -- and you asked about FSU tonnes.

So we don't see any material change in FSU tonnes coming to the potash market. At the intersection of those things, we see the strengthening that we've seen in the potash price. And we think we're in a good spot as it relates to the potash price. In here and now, we've had our summer fill program, which we had strong uptake. We're fully committed in North America through Q3 and are now placing tonnes in Q4 at or up $20. Similarly in offshore markets, fully committed through Canpotex through Q3 and heavily committed now into Q4.

So again, a very strong signpost that for 2025, our 73 million to 75 million tonnes and our raised guidance that we have -- we're constructive on those things. It is true that we're looking at North America now for the balance of the year. And obviously, with a very large corn crop that we're seeing in the U.S. and certainly, a large crop in Brazil, we've seen some pressure on ag commodity prices and farmer grower margins. At the same time, here into the third quarter, we have seen strong field activity. We've seen good engagement, strong demand.

And again, that's evidenced by our commitment levels in North America on potash and certainly, we're seeing some strength into the fall in nitrogen as well. So -- but your question was on potash. Put it all together, Chris, we were constructive on 2025. And then your question about heading into 2026. Again, given where inventory levels are at, where we don't see elevated inventory levels that -- with potash being affordable, growers are going to be looking to replace the large amount of crop nutrients that are going to be pulled out of the soil with this big crop.

Your next question comes from Andrew Wong from RBC Capital Markets.

Maybe just touching a little bit on what you just touched on at the end of your answer on affordability like what's your sense on farmer sentiment and health today, just given some of the recent softness there? And how does that change in fertilizer affordability impact purchasing? And maybe more specific to just the dynamic between nitrogen, phosphate and potash because prices for all three have moved in different directions, which we haven't really seen for a very, very long time. So how does that impact farmer decisions on what fertilizers to apply?

Yes. Thanks, Andrew. Yes, and certainly, as I mentioned, we are seeing some pressure on ag commodity prices, corn, soybeans, and on grower margins. For the first half of the year, things kind of played out the way we had expected in the Corn Belt in the Western U.S. and Canada and Brazil, was really the Southern U.S. where it was wet and in Australia, where it was dry where we saw some pressure, and we're feeling some of that now into the second quarter.

That said, again, we're seeing strong uptake in the third quarter and field activity in -- and in Australia, while it was a slow start given a dry beginning of the planting season for their winter crop, they've gotten some rain in July here, which now we've seen increased activity. But I'll hand it over to Jeff to talk a little bit more about that. And then maybe, Chris, if you want to talk about those dynamics between NP&K that sort of affordability discussion.

Yes. Thanks, Ken. And as you mentioned earlier, I mean, we continue to see very strong engagement from our growers as we go into the third quarter. If I'm looking at the areas that were not affected by weather in the first half of the year, then we would see most of those regions have performed basically in line with what we thought. We mentioned the Corn Belt, our Western U.S. business, Canada and Brazil from that standpoint.

You mentioned the Corn Belt specifically, we saw our tonnage up about 9% for the first half of the year. And as I look going into the third quarter, we see -- again, we see growers investing dollars to protect their yields right now. And when you get in a low price environment, growers going to really push for yields in that type of environment. And we see that happening right now from the plant health standpoint and from a nutritional standpoint.

Yes. Thanks, Jeff. And Andrew, as we think about the domestic market and that balance between NP&K, as Ken mentioned, we -- there is a big crop growing out there that's going to pull a lot of nutrients out of the ground. Our midstream customers are telling us they need to prepare for what they believe is going to be a good fall application season. This crop is developing well. We do believe that subject to weather, there will be an open window there for growers to get out and apply fertilizer in the fall, especially in the Midwest.

And as Ken said, potash remains the most affordable nutrient. So what our customers are telling us is they're preparing for a good fall across NP&K. As you've noticed, yes, these nutrients have moved in different directions a little bit in terms of pricing so we'll be watching how that's balanced in the fall. But overall, we're getting ready and our customers are getting ready for a good fall application period.

Your next question comes from Joel Jackson from BMO Capital Markets.

If I could just harp on the retail demand or fall demand question in North America a little bit more. Like I know that's the biggest determinant. I think I know that the biggest determinant in the fall season is just how big -- how good the weather is, the open season comments you said, I know that, okay. So are your comments just really about that, that it looks like the weather is going to be good and that's the largest determinant of a fall season, not necessarily affordability? That's my first question.

Okay. And the second question is just as you think about Brazil and Retail, how confident are you that you'll be able to shift next year to getting back to a $50 million, $60 million, $70 million, $80 million EBITDA run rate versus maybe breakeven this year? And what are the drivers to get there?

Thank you, Joel. And I think you've actually articulated that well, that heading into the fall here, given the signposts that we're seeing and that we've talked about as it relates to good engagement so far in Q3 and certainly we saw that in July. And the crop that's coming off, it's going to pull a lot of, again, fertilizer soil nutrients out of the ground. And the discussions that we're having with our customers and where inventory levels are at, that given an open application season, yes, we expect to have a decent fall. But that's dependent on weather exactly as you said -- we're expecting fertilizer volumes to be up 5% from last year. You may recall that we had a compressed application season last year. And so where the crop is at today and some being harvested, as we speak, things are pointing to an open fall, and that's good for seeing volumes go to ground.

As it relates to Brazil, what I'll say is our Brazil improvement plan is on track. We've talked about the decisions that we've made as it relates to shuttering of plans. We've reduced headcount there. Our focus on collections, our focus on inventory management and shuttering of blenders, all of those things now contributing for us to get to sort of a breakeven, somewhat even perhaps positive EBITDA level here in 2025. And we expect that trend to continue into 2026, where obviously, the market needs to continue to cooperate, but that we expect that we'll be in the positive next year.

Your next question comes from Ben Isaacson from Scotiabank.

If we move past fall demand and start thinking about 2026, if corn and soy prices hold about $4 and $10 respectively over the next little while, what are the risks to each of your segments if farmer economics stay where they are in the Americas? How much downside do you think we have in which divisions? And the reason I'm asking is you talked about potash being affordable, but on the other hand, some would argue that potash is typically a lower ranked crop input. So I'm just trying to triangulate that.

Yes. Thank you for the question, Ben. And yes, it's true. I'm already starting to think about 2026. And growers will get this crop off and they'll be looking to get ready for next year and another big crop, and we'll see where corn and soybean prices are at. But if we go commodity to commodity, again, we see ongoing strength in potash demand. And the way it's been growing, as I said earlier, on trend.

Heading into 2026, we believe that to be true as well. And it's just step change in demand in places like China, Southeast Asia with MYR 4,200 palm oil prices and a mandate of palm oil -- clean fuel mandate of 40%, moving from 35%, very strong demand in Southeast Asia. We look at Brazil, where last year they consumed 47 million tonnes of fertilizer. This year, it will be 48 million tonnes of fertilizer. And so we can go market to market. And of course, North America, again, we see a lot of crop nutrients coming out of the soil.

On the demand side of the equation, we see strength. And then on the supply side, I won't call it a challenge, but we have seen project delays, and we have seen the ability of the market to meet these demand levels. And at that intersection, we see where prices are at and prices are strong. Prices are in a good place right now because as I said earlier, it's affordable, but at the same time, we like to see volumes moving to our customers at these levels. And so we see that carrying into 2026.

On nitrogen, we've seen, again, strong demand and the Indians having difficulty procuring urea, while at the same time, Chinese limiting urea exports and certainly not getting back to sort of historic average levels out of that part of the world, which has meant strength in urea markets combined with some supply disruptions certainly out of the Middle East. And that would be true for ammonia, where we -- again, we see a bit of seasonal weakness at the moment, but given some challenges, supply challenges out of Russia and the Middle East and some of the new project challenges out of Russia and the Gulf Coast, there's been supply issues there as well, and we'll see about European gas pricing as compared to North America, where the delta is still $8 or $9.

And again, we head into 2026 and we expect that those dynamics will persist. I think we can talk about phosphate. Yes, phosphate prices are elevated. We're watching for any of the grower reaction to higher prices here into the fall and how that translates into 2026. Again, strong demand over phosphate and supply side issues. So you can go nutrient to nutrient and heading out to 2025 and 2026, we'll see how the international growers feeling. We'll see what happens here in North America. But overall, Ben, we feel constructive.

Your next question comes from Vincent Andrews from Morgan Stanley.

Wondering if you could talk a little bit about your own expectations for your potash production going into next year. It sounds like you're anticipating another year of shipment growth for the industry. And the commentary for a while now has been that you're looking to take your traditional market share. So what incremental capacity would you look to add into next year?

Yes. Thanks, Vincent. And this year, you've seen our guidance range, which we've upped, so just over 14 million tonnes at the midpoint. And we would say that, we look at the way we've built out not just our mine production but now our supply chains and ability to get to customers, that we have 15 million tonnes of installed capacity, although not obviously staffing to those levels because the lead time for staffing is such that we can watch the market and, as it evolves, bring on operators to continue to liberate tonnes.

That will be the same philosophy for next year, where you can expect that as the market grows and we've talked about this 2.5% average annual growth rates on trend, which is where we are today, that we will grow with the market and maintain market share. We will bring on those operators and we'll produce those tonnes. Again, we have the flexibility with our 6-mine network. We've made those investments in our supply chain to get to our customers. That gives us the flexibility to expand tonnes into this growing market.

Your next question comes from Steve Hansen from Raymond James.

Just a broader question about the portfolio. How do you feel about the portfolio from an optimization standpoint today? You've gone through a process of divesting a few noncore items here in the South, not just recently. Is there more to do there on that front in terms of like further optimizing or streamlining the core versus noncore? How do you view that as an opportunity or is it even a priority today?

Yes. Thanks for the question, Steve. And I will say we're probably never done looking at the portfolio and understanding how to optimize free cash flow per share and return on those assets. Absolutely true that we have done quite a bit of work on that front already, whether it's the process that we're in, in Profertil right now, divesting of our shares in Sinofert, which we've talked about.

We've actually gotten some rid of some smaller immaterial assets, some in Italy. We've sold a blender in Brazil. I just provide those as examples of us just continuing to really be rigorous across the portfolio insisting on performance. And not in a position today to talk about further portfolio changes and how we're going to manage that. But what I can say is, yes, we're absolutely looking at opportunities to continue to upgrade that portfolio in the name of free cash flow per share and a return on those assets.

Your next question comes from Jeff Zekauskas from JPMorgan.

Your gross profits per tonne in North America and crop nutrients is kind of flat, even though the different commodities have performed pretty well. And in general, in your Retail segment, you seem to be doing a good job of cutting SG&A costs but not so much making progress on the gross margin. Is that just weather? Are you satisfied with your general performance? What are the dynamics around gross profits and SG&A levels?

Yes. Thank you for the question, Jeff. And there's a number of moving parts there. We are pleased with our progress certainly on the cost side of the equation, and there's more to do there. We know that, and we expect carrying out through the balance of the year. That will be part of the story is ongoing focus on reductions in cost. But maybe I'll hand it over to Jeff to talk more about just margins on fertilizers and what we're seeing through the balance of the year.

Yes. If I just walk through the segments from a margin rate perspective, our crop protection margins actually were surprisingly a bit better than we anticipated coming into this year through the first half. And we think we see an opportunity to expand that a bit more in the second half.

If I look at our margins on fertilizer, if you look at it from a global basis, we are flat year-over-year. And that takes -- you got to take into effect that we strategically made decisions in Brazil to lower our tonnage there and go to a different marketing -- direct marketing concept versus going through those blenders that we've mentioned several times that we idled. And that brings a lower margin profile on those tonnes. I think we're down -- we strategically plan to be down about 200,000 tonnes through the half, and that's basically what we're off from that standpoint.

And we are in a -- as we talked about several times today, we're in a competitive environment. So I'm pleased with where we are today from a margin perspective. I think as we get an opportunity to get more of our nutritionals into our mix, which, again, we've seen a very strong start in July, I think we'll see that margin per tonne pick up a bit. And then on the seed side, our margin rates on seed are in line with our expectations as well. That was more of a volume story. But we're continuously working to try to get our margins up. We talk about the second half of the year and we talk about controlling our controllables. And one aspect of that is working to continue to expand our margins across all of our crop input segments.

Your next question comes from Kristen Owen from Oppenheimer.

Somewhat of a double-click or follow-up on that prior one, thinking specifically to this EBITDA bridge for the first half of the year. You've noted the more favorable environment in July. I'm just wondering if there's anything here in this bridge, whether it's crop protection products or maybe even on the expenses, that shifts around in the back half of the year. Anything that turns from a bad guy to a good guy. Just how to think about that bridge for the back half.

Yes, certainly, at the higher level, it's the things we've talked about but I'll hand it over to Jeff for that double-click.

Yes, for the second half of the year and I think I mentioned it just a minute ago, controlling our controllables will be at the top of our list. We also think, again, that we have an opportunity to convert more acres on our full year nutritionals, which we really like a lot. We like our portfolio as it relates to that. A heavy, heavy focus on the expense side of things. I think through the first half, we were able to take 6% out. We expect to continue with that effort in the second half of the year.

And again, Ken mentioned Australia. We've got some -- we had a very tough half from a weather perspective there. We see improvements there. We think that's going to bring us some opportunities on the proprietary side of the business as well as we go into second half of the year.

Your next question comes from Edlain Rodriguez of Mizuho Securities.

Just a quick question on potash, Ken. So I mean, I think a comment I've heard somebody say, like what is wrong with potash? As you note, it's surprisingly like the most affordable nutrient, now lagging behind both phosphate and nitrogen. But seriously, do you prefer being in that position? Or do you want to close the price gap between potash and the other nutrients? And related to that, I think like last week, we saw a small decline in potash prices in Brazil. I mean, that's like the first drop in almost a year. Does that mean anything to you or you just think it's just a blip?

Yes. Edlain, thank you for the question. So we -- again, we're constructive on the potash market and we like when potash is affordable for growers. And when it is, we see record potash demand and consumption. That's what's playing out today. And again, that meeting the supply side of the equation, that intersection clears the market and what has been kind of 10-year average historic level potash prices, those are healthy prices for us. And again, we're constructive on that.

So heading into the fall here, and we've talked about North America, but globally, whether it's Southeast Asia and palm plantations or whether it's step change in China, what we're seeing in -- on the macro level in Brazil, and yes, North American fall -- an open fall application season in North America, like our volumes are moving, our mines are producing, our unit cost of production is going to be below $60. And again, that's where we like to be.

In Brazil, they're getting ready to plant soybeans here in September. There's been a bit of a seasonal lull in Brazil, that's true. We've seen a bit of softening in the price, but we expect there's going to be a lot of volume moving again and going to ground as they plant soybeans in that part of the world. So overall, Edlain, I certainly appreciate the question. But no, we are constructive on where the potash market is today.

Your next question comes from Ariana Milin of CIBC Capital Markets.

With relatively better pricing for ammonia over upgraded nitrogen products in North America, do you see the potential for a shift to greater ammonia use as a source of nitrogen in the fall?

Yes. Thanks for the question, Ariana. That's just no, but Chris, do you want to just explain that a bit?

Yes. Thanks for the question. As we look at that fall, it will be dependent on how growers are thinking about what they're going to plant next year. And if they're going to put ammonia down in the fall, that would mean a commitment to planting corn. So we'll wait and see. I mean, sometimes these growers make this decision on combine and what they're thinking about for next year. But we don't see a material shift in terms of the nitrogen product going down this fall. We think that will be at about average levels. I would say that we are seeing low inventory levels of UAN right now. And we are thinking that there's going to be some strength in that price as we look towards the fall season.

Your next question comes from Matthew DeYoe of Bank of America.

I apologize if I missed this earlier, but seed sales obviously pretty weak through 1H in Retail and maybe that's just cotton in the South or whatever. But as you think about -- or can you provide a little clarity on price volumes there? And then as we set up for next year, assuming more -- if it is the South, right, if weather is more cooperative, do we get a -- you expect to get that volume back pretty well, I guess? I'll leave it there.

Yes. No, Matt, thanks for the question. I think you said it. We did see some crop mix shifts in that part of the world. But Jeff, do you want to just dive into that a little bit?

Yes. Thanks, Ken. Yes, the seed revenue is 100% around two factors. First, we saw a significant prevent plant in our Southern region. Our Southern region is our largest share of seed in North America. And so when you have something like prevent plant, it can have a dramatic effect on seed revenue. So those acres actually did not get planted. I would expect 100% of that to return next year.

That forecasting that we would have a spring not unlike what we had this last year, which was in that area was one of the wettest springs in the last 150 years. We also saw crop mix changes and that's primarily around cotton. And due to some of the economics around cotton and across the South, we saw a lot of cotton acres. If you're in Texas, a lot of cotton acres converted to sorghum or milo and -- which is a much less significant from a revenue perspective. We'll have to see year-over-year what cotton commodity pricing does. I would anticipate in Texas, we would see some of those acres return, but it's way too early to predict that right now.

Your next question comes from David Symonds of BNP Paribas.

Yes, if I could just come back on Jeff's question. If I look at the average selling price in the crop nutrient segment of Retail, it's up 2% year-on-year, whilst into the third quarter, the potash NOLA benchmark, for example, is up 20%-plus year-on-year. So is there a catch-up pricing benefit in the second half for Retail?

Jeff, if you want to take that?

Yes. And some of that's reflected from a standpoint of -- and I've said this many times with as many tonnes as we move through these markets, we have to layer in our purchasing. And so we would have -- for the tail end of the season, we would have been buying into a market that was much higher priced from that standpoint. And that affects margins as well from that standpoint. We feel like we're well positioned going into the fall. We don't think we're overly aggressive from that standpoint.

And I'm going to allude back to many of the things that were said here today, we talked a lot about having a really large corn crop. We also have a really large soybean crop, and -- which removes a lot of nutrients as well. And so we do see some opportunities in the back half of the year. We talked about it. If we get an open fall, then we see an opportunity to move about 5% more volume into that market, and we hope we can do it as well by expanding some margins.

Your next question comes from Lucas Beaumont of UBS Financial.

Just going back to potash, I mean, you've mentioned that you see -- have seen sort of some challenges in the market meeting the demand level this year from a supply perspective. So I think just looking to 2026, if we get another year of normal demand growth, where do you kind of see the supply coming from? And if you think the market is going to struggle to meet that and you want to kind of maybe flex up and take more than your 20% share, when would you kind of need to push the button on those staffing decisions you mentioned?

Yes. Thanks for the question, Lucas. And yes, it continues to be the case that we've seen those FSU tonnes come back into the market. We've seen some new tons coming out of Laos. Although the rate of growth out of those -- that part of the world has slowed. And we've seen, as we mentioned earlier, project delays that certainly are going to impact next year and beyond.

And so strong demand meeting supply, we kind of call the market in balance at the moment or close to being in balance and heading into next year. We have a few other producers that can probably, on the margins, expand production a bit. And certainly, we would be one of those as well, Lucas. And so I would say with what we're intending for next year, which, as I mentioned earlier, is the strategy to maintain market share, grow with the market as it grows, meet the needs of our customers who are growing at that rate as well and bringing on people to produce accordingly.

That's our plan. And again, we expect to be in a strong market next year, given the demand fundamentals and the fact that supply is right around that demand level, we'll be right around that demand level and certainly, as project delays continue to persist.

Your next question comes from Ben Theurer of Barclays.

I wanted to follow-up real quick on capital allocation as we look into it. So you had a significant improvement in terms of free cash flow generation versus a year ago, but at the same time, it feels like there's a little bit of a slowdown on the share repurchase program. So I just want to understand like how you think about these purchases in regards to like just dividend versus investments and share repurchases.

Yes, and thank you for the question, Ben. No, no slowdown on share repurchases. We've been buying at about a sort of $45 million per month level. And I think for the balance of the year, that's a good way to think about it as we -- as the year has unfolded for us and certainly as we continue to be quite constructive on how it's unfolding. With respect to sort of the broader philosophy around capital allocation, dividends and share repurchases, I'll hand it over to Mark to provide more detail.

Yes. Thanks, Ken. Maybe just stepping back a bit and reiterate a couple of comments that both Ken and I have made this morning. I think first and foremost, continue to focus on generating increasing structural sources of cash for the business. So we continue to see strong operational performance, and that was evident here in the first half for us. So growing underlying earnings across the entire business in line with our Investor Day targets, and we feel like we're making good progress on that.

As Ken has also mentioned and I have as well, continuing to look at a really rigorous approach to working capital optimization and shedding assets in the portfolio that don't generate the types of returns that we want. And so over time, we think all of those things will grow cash. More specifically to your question on capital allocation, our priorities are consistent and they haven't really changed.

So again, if you look at our CapEx profile of the year, $2 billion to $2.1 billion with $400 million to $500 million of that focused on a very narrow set of growth priorities that we continue to execute against. And more specifically with respect to return of capital, as Ken said, as the philosophy around share repurchase really over the past year has been ratable buybacks over time, and we want that to be something that is a staple in our capital allocation framework over time and through cycles.

And as Ken mentioned, that roughly $45 million per month run rate is something that we see as being sustainable and balanced through the remainder of the year. You mentioned the dividend. With respect to the dividend, the philosophy has also not changed there. We like the absolute level of the dividend from a cash outlay standpoint, and we believe that as we continue to repurchase the stock of the company, we'll be able to grow dividends per share over time just as we have this year. And amongst all of that, we believe we can continue to strengthen the balance sheet. So it continues to be just a disciplined, focused and balanced approach on capital allocation.

Your next question comes from Richard Garchitorena of Wells Fargo.

Maybe just wanted to touch on the cost progress you've made, roughly almost $200 million in cost savings expected this year. Should we expect additional buckets? Do you see further upside potential in that target? And how are you thinking about additional cost savings in '26?

Thank you for the question, Richard. Yes, we had set ourselves a $200 million cost reduction target by 2026 and it's really targeting SG&A. And thus far, we would say we're going to certainly achieve that in 2025, so ahead of the schedule. And about half of that coming out of our Retail business and about half of it coming out of our corporate SG&A. Is there more to be done? The answer to that is also yes, and maybe I'll hand it over to Mark just to provide a little more color.

Sure. Thanks, Ken. So as Ken said, we're beginning to see those expense rationalization activities really show through in our results. As we showed in our earnings presentation, if you look first half over first half, you can see over $100 million or just over $100 million in expense down versus last year in the first half. And so I think there's tangible evidence that the efforts that we've made are showing through.

And as Ken said, that's really been focused, about 50% in the Retail business across the rationalization activities we've undertaken in Brazil. Closures of underperforming locations in North America, regional consolidation of storefronts and optimization in Australia, and in our corporate functions, just continuing to be disciplined about simplifying and focusing the organization and that's resulted in SG&A opportunities. So as we continue to move forward, as Ken said, we're quite bullish. There's going to be more opportunities for us as we continue to explore opportunities, and we'll have more to say on that in the future.

There are no further questions at this time. I will now turn the call back to Jeff Holzman for closing remarks. Please go ahead.

Thank you for joining us today. The Investor Relations team is available if you have any follow-up questions. Have a great day.