The Mosaic Company (MOS) 3 Nov 202020 Q3 Earnings call transcript

Company Profile

Participants

Laura Gagnon	VP, IR
Joc O’Rourke	President and CEO
Clint Freeland	SVP and CFO
Rick McLellan	SVP, Commercial
PJ Juvekar	Citi
Joel Jackson	BMO
Adam Samuelson	Goldman Sachs
Ben Isaacson	Scotia
John Roberts	UBS
Chris Parkinson	Credit Suisse
Jonas Oxgaard	Sanford C. Bernstein & Co.
Mark Connelly	Stephens Research
Andrew Wong	RBC
Steve Byrne	Bank of America
Seth Goldstein	Morningstar
Michael Piken	Cleveland Research
Vincent Andrews	Morgan Stanley
Jeff Zekauskas	JP Morgan
Jeff Feinberg	Feinberg Investments

Call transcript

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Operator

Good morning, ladies and gentlemen and welcome to The Mosaic Company’s Third Quarter 2020 Earnings Fireside Chat. At this time, all participants have been placed in a listen-only mode. After the Company completes their prepared remarks, the lines will be open to take your questions.

Your host for today’s call is Laura Gagnon, Vice President, Investor Relations of The Mosaic Company. Ms. begin. may you Gagnon,

Laura Gagnon

Financial welcome will third and be Freeland, and Officer; and Vice McLellan, call. Commercial. President, Chief XXXX Presenting Clint Chief President Vice today Joc Senior and to you Rick quarter Senior our earnings Executive Officer; Thank O’Rourke, President

will prepared addressing question-and-answer We the night, last permitting. received host session, a by time a followed short session questions live Q&A

materials available earnings our released on website of market are yesterday All closed mosaicco.com. our at after

Factors call. They making those The limited results differ and be filed statements and on press date our forward-looking subject that significant today’s could uncertainties. are with the future may this in conference and release management’s of include, in Securities will not Actual to included statements We results risks cause materially to issued to financial results. during differ in but from reports statements and the are beliefs about projected materially are forward-looking and statements our Commission. and as are operating yesterday actual expectations results. Exchange from based

presenting also certain financial measures. be will We non-GAAP

to information Our commentary X-K measures. yesterday’s the website as filing, well data press our and important contain our on posted as these Form exhibits as quarter also release third attached quarter to on performance non-GAAP

I’d to over Now, turn to call Joc. the like

Joc O’Rourke

Thanks for joining us today for our session. quarter three XXXX question-and-answer

our from our points to quarterly key get we emphasize would report. I Before like started, earnings

work. cost with we’re flat margin First, prices. a essentially of despite transformation the Gross ago, fertilizer quarter benefits extensive our XX% year realizing for was compared the

prices are the Phosphate are up potash globe while Secondly, are agriculture strong prices around and stable. improving. fertilizer substantially, markets and

And our to sheet continues strengthen. all to of demand We expect balance and global remain third, XXXX. tight supply in

cash. for we all borrowed is the COVID substantial generating short-term prepared We have and the repaid business impacts, be to debt

questions. get we’ll your to Now, Laura?

Laura Gagnon

How related last BMO, Jackson Goldman going asking of of from the duty Juvekar Russian margins? rapidly how impact would go and shift. the increase after. global we in your and premium Samuelson largest received the the to built what imports? phosphate absence allow U.S. will countervailing was frequently to to Citi, in at the parity realize fourth flow much parity fairly number The try through into if has premium petition. prices the price Moroccan Sachs questions follow-up a U.S. from words, to quarter And of Joel the questions In and I’m for phosphates all trade to reduction night been be markets most today? $XX about Adam asked you expect the are time PJ questions Joc, NOLA from the other from affect

Joc O’Rourke

gentlemen. globally. up Prices Thank are you,

XX%, Our realizations those over reflect increasing imports Brazil Morocco both prices despite up from XX% and India and prices Russia. up jurisdictions in

expected NOLA to market. driven supply be than There somehow be seems CVD, be misconception flows, prices which and may Market impacting overall parity today, higher are supply. CVD trading petition the where it is was it significantly where to change that not less is an common global would by not global While than trading is trade demand, in strong June. increasing

and the to at at aimed product. considered pull for of point And in make field short competition. their Russian producers a and eliminate customers Our petition did this leveling was over their being political completely express not chose U.S., the all to producers dissatisfaction back selling Moroccan from they all. leaving market, it playing to likely U.S.

all doing best customers. can to our are we We serve

we’re not with but into parity which perspective. global prices for from more product that it global meet replace above global we here, help Ma’aden, our that that simply in least would tons Recognize doing needs. expect makes they logistics several June. today a Saudi sense for products send significantly at and to is Longer to term, is parity. NOLA of us rather We trade to begun our have to are Asia it term, customers. bring reasons, where than customers’ were Moroccan Longer to not tons It our importing even intention Russian from from

Laura Gagnon

If Another prices trade full from there? and Brazil, exports and in ending question up Morocco are why comes from PJ. India are Russia up

Joc O’Rourke

we you. has Thank Economic with the up. started a many demand including tightened. COVID-driven outages. curtailments, and down, global months The China prices than is supply is exports ago. global Supply few market in realized driving are stronger tightness and XXXX

agricultural affordable. globally Food very world, is strong. the great and has around the On fertilizers the demand side, priority are economy security become a

Laura Gagnon

We UBS. Ben about momentum phosphate realized Roberts Scotia; that from prices Did continue? August. do And pricing September momentum. asking more Isaacson much for have phosphate XX% from question and from John upside how see a the you market? from They’re both improved

Joc O’Rourke

Thank to you. move increase we demand as XXXX. into into October seeing We’ve good November, continued see prices and and of

the spring season We with bodes winter. which expect this inventories, to end and for very fall well low

but in fourth quarter. over normal into we slowdown, to expect are we be we seeing $XX the up as our prices we seasonal continue expect to the in markets And remarks, So, a third written quarter XXXX. mentioned strong ton per

Laura Gagnon

the DOC Parkinson asking and will no, high if imports? Joc, determinations. and others duties strategy, In and both Credit and of Joel our Suisse, Jackson fill are for will U.S. potential Chris following void the low particular, who impacts BMO, of impact ITC how

Joc O’Rourke

is the would Remember, In anything. it account duty, identification is to if November change to of harm gentlemen. subsidies. first the duty, that flows determination decision the Thank and determined the is that. a simply there for going to if If expect trade of high you, the we are quarter, determination is the be there

altogether the the would Brazil. markets these to to and India petition ship out If we pre-CVD the when markets, decision Russians Remember, is filed. the we they would continue Russians made expect other was the to the Moroccans like what and subsidy, pull such, trade and return to to As no flows there filing. Moroccans were of to expect

more and tons the India, Brazil market, a will for continue there redirect product we we that customers. will tons market. required to see So, American will continue we If those we divert North markets. to serve If to deficiency is our to in

Laura Gagnon

a received we’ve with supply in what Juvekar to questions particular Chinese asks, your to respect of number phosphate XXXX? industry. broader from related the Joc, Citi estimates market and out China are PJ demand, in phosphate the phosphate of exports of

Joc O’Rourke

We’ve tons you, PJ. exports by Chinese more said to be this Thank than and believe down that continue we XXX,XXX will year.

be like down to by latest down they is will estimate million exports X January tons. actually were more September, tons. XXX,XXX Our From by that nearly

be it to in MAP be while to X.X continues are to down important means DAP in trend quarter China call it constrained tons, was demand by, now That stabilizing. remember three, production future. appears going it’s that domestic million Now, exports the Quarter lower. one Chinese to to

Laura Gagnon

asks, that the how are closed Oxgaard confident three in facilities permanently Jonas China you are closed?

Joc O’Rourke

you, Thank Jonas.

not map is planned built the in the a are shifted to confident production process phosphoric water-soluble purified capacity also For protection is permanently According is and includes are is One closure, association, tons facility; permanent they since wet which coming facilities measurements its the million production phosphate been industry a relocation implemented. phosphoric relocation ongoing. China stringent MAP has to have outcome production and process, purified of shifts X thermal highly-polluting the This of like production higher-value the the environmental protection environmental lost strategic different acid. DAP been Purified in from fertilizer be and for production back a measures third to we and XXXX, products, as to acid DAP the closed; of was one place was to production. industrial-grade replacing different phosphoric closed three to acid. the process

Laura Gagnon

on update Joc, related like production projections question, Chinese in a would Chris an the also costs. for Parkinson

Joc O’Rourke

a equivalent ex and of Thank you, The $XXX at $XXX producers an fob southwest Chris. is typical around production per Chinese a estimation port. metric phosphate still metric probably per to export ton, plant, ton cost

Laura Gagnon

to Connelly number different area Brazil Joc, this as projects among were expected was doing many employees. the large early proceeded the in cost these, practices a suggested well told you. projects but Mosaic of of of midsized reduction between your plants addressed And did? really best returns? Mark the has you transfer were there Fertilizantes. local Fertilizantes, which small among second After sort to are us today by of you projects, most materially as acquired and projects, Are that questions popular specifically big rather no you question of the

Joc O’Rourke

Thank Mark. you,

me and transformation Let projects, little capital continue for say, to Mosaic continues high-benefit we to number of benefits see medium-sized, to small Fertilizantes. drive very high very with returns a and

that mining require and is like Now, growth as next-gen Florida. some investment we of much of these go our mostly forward, capital, will incremental in technology-related,

go would next what Monday, transformation is, Mosaic Now, we’re depth objectives Xth. November this, into ask going Fertilizantes for our I to growth and of

the and more lot we America. and in is give where please, So potential growth going business a tuned then, believe we’ll for stay detail South this of our you

Laura Gagnon

RBC and economics very QX farmer demand How impact both from asked about did from current and weather phosphates And outlook? Nina Samuelson Andrew of from Brazilian forecasts Adam demand pull La the demand Sachs; Goldman the QX? high the volumes outlook. the interplay Wong does

Joc O’Rourke

This to in are higher the the in farmer year-over-year. again demand both. is economics driver. Brazilian Look, X% very current particularly fundamental X% are and you, strong, push Thank Brazil, to expected in XXXX, grow probably

it’s signals Brazil for for persistent were and Nina, mid-XXXX. Southern with, from not is, growth through signal Nina persisting something overly saw La the we August. La patterns large. a for typical in reason we’re it strong it unless South longer typical that As than recent The this at to Americas a months or Argentina concerned could in June bit simply from have been what may have And dry weather been is is

progressing. Importantly for improved a is couple planting Brazil were rains weeks. The though, delays have and of

remain aligned farmer no expect do demand. expected strong, with Demand we is So, to on profitability. good impact to see total very

do extended QX that as continued In has we’ve the already the see QX, season in phosphates by QX of expect seen. from question of your been we terms to strong dry demand moving weather

Laura Gagnon

to and in new there Bank significant from selling asks, the of crop of Byrne Are earnings be Steve America potash assets. from as the productivity drivers or growth legacy going and expansions products from geographic expansion, Joc, extracted inputs? production Vale been phosphate services, other longer-term capacity from has such

Joc O’Rourke

quick Yes. see Thank those in is Steve. yes. of potential The great We all three areas. you, answer

We have strong advantage. a very first-mover and are

a great of have We advantage that. take we time And platform hope Brazil. greater to over in

primary Fertilizantes Now Mosaic in growth focus for organic. today, is our

technology. distribution feel There also to opportunity. where would room we continue geographic our and see current We We like, have grow are we areas deployment sales footprint have have. distribution we with than the of increases a that but we benefits transformation to assets smaller co-product from in we see

that distribution So, continue first-mover in think advantage region. to our both production and grow, strive areas growing potential. summary, in we will having that see We all great and do we’ll

Laura Gagnon

these? of Joel per XXXX? hold, drivers expect And contract these margins BMO ton are we Jackson from Should in margins. is or about Fertilizantes’ the what to asking expand main

Joc O’Rourke

When ton you, per thinking have components. consider to Thank we’re about we Joel. two our really margins,

production, drive where raw price of to produce cost gross First, margins. the goods, finished materials and

Here, where continued we economy performance and as pricing in that we improve impacted to transformation are In drive continue, continuing we’re product long-term earn by scale and a trends, down, through sales. margin well That’s continuing we production to going to driving business. volume, that transformation, really distribution, value. is and as costs our of improvements how

well So, as in well in distribution, we do see production. that up holding as

both So, them not expect hold expand those can sides, goes margins, by. on time as we only but we

Laura Gagnon

in? phosphate we to increase? fourth portion phosphate $XX Joc, Juvekar into the we profitability will much ability performance the near-term ton both price What also are segment. large our looking fourth quarter. phosphates? quarter better the are per this a on already So, number locked fourth questions expected PJ at in about of and improvement Steve a quarter the Byrne and the asking got of are impact volumes realize And your

Joc O’Rourke

gentlemen. you, Thank

to As already expect good expect in realization expected, quarter to $XX any of price been we be scenario. sold the priced. a ton fourth our We in per increase tons below have recognize and portion the the don’t

that have is to our We in shipments, a on the us. a and change impact announcement late assessed if against goes the be November, in December minor CVD impact expectation potential only will

Laura Gagnon

reserve ARO PJ and and Sachs, Juvekar the cash the the ARO on increase asked Goldman What Citi; elaborate Samuelson of liability? Can the of both the you the increased increase. timing of drivers is of Adam about outlays? remediation

Joc O’Rourke

to over Thank you, straight to gentlemen. I’m one answer. going to hand this Clint

he ARO we think, of has the just details I our booked. that

Clint Freeland

Thanks, Joc.

site say estimate quarter typically And the year work related recall, of a we you would bit and to that that related booked the when amount may the year. each to ARO refresh last city that third we the of many update plant is to learned as about quite see over activity. this we’ve is quarter I more to As of

existing an over so the gypstack out very spread and facilities also forth, also, typically XX million period a escrow is least have against spend about will of portion at that a AROs, of so offset our extended that of future during to spend recall years. account spend $XXX years profile. But ARO Our in extended type time, a we that and XX of life

the of reserve to the we And work this our our facilities of to that that’s spend really specific related environmental some say, to at some do to related to we four gypstacks. to that going be I subsurface some Now, made quarter, is probably booked need years. that that would two over next around

Laura Gagnon

keep expect it in Goldman higher lower Adam are Morningstar Seth prices? volumes? volumes. and from Sachs; or production higher a we into will fourth phosphate year-over-year you to both notable from As move Samuelson support quarter we about XXXX, uptick Is Goldstein asking volumes should to reasonable expect

Joc O’Rourke

gentlemen. you, Thank

at markets right all demand fourth As we see we our look in quarter, now. the great

with expect inventories so, good next sales do we the that, then have relatively year. we as and to quarter enter And through low

look expect of we to particularly, remember, As quarter had good if first go demand we see months. almost our XXXX, a we XXXX, bar would scenario, to of down for you expect we utilization assets, to good see and in three do

expect we facilities now closer in much to and production come to So, very that XXXX. back to full our run

Laura Gagnon

may end in from with do couple Scotia the believe need market Ben tons on about the And in to like our think Colonsay? future? a how Isaacson for we I’d potash we lastly, of asked, those Joc, questions a segment. be there

Joc O’Rourke

of Ben. operation. significantly you, that customers supply is could sudden industry if definitely it. than as in this we price examples look be our be back we disruptions. at as case, Colonsay if needed the restarting the would back something tons Yes, bring our any cheaper Colonsay Thank valuable tonnage will and grows, And bring to but justified demand ripe This greenfield permanent customers to very And us. with

Laura Gagnon

from much move that comes to we you potash Seth does KX last Is coming The long-term will to is Morningstar. of out question increase line in plan demand grow market try production potash as with how growth, KX How or Goldstein share? now? And to XXXX? at change the

Joc O’Rourke

of to to Thank you, which equivalent million finished our tons the Seth. Esterhazy about In ore XX%, or X.X In about forecasted XXXX, KX potash total of million the tons million X production of completely this production, and Canada. is about of KX amounts produce KX X.X or product, KX finished in goods June XXXX, for approximately will be will of and tons providing replace mines. XX%

expectation will So, lowering with costs. KX. while already is our KX goal lower and Longer our necessarily grow production, to KX has match our we overall also term, demand, profile. production replace is, not but our to proven rather cost

like audience. to Now, for time, I’d with from our open our remaining questions up it follow-up

Operator

Byrne from [Operator Instructions] We line from America. have of our Steve the Bank first question of

line Your ahead. open. is go Please

Steve Byrne

and demand this a contested I’d supply phosphate today. like outlook to on be highly little that drill more to Hi. seems

outlook a the in than at and risk build fairly of Is fairly three on that being the we look to some risk your ones delta from demand producers, are large somewhere tons. information expected to outlook that? much at up breakdown your X those bigger ‘XX, there, as a ‘XX, have those, potentially or you fair view in to is in have million of there’s a the there what supply see up supply the the are line items as and supply, Those XXXX XXXX with deck OCP, between the recovery amount the a big for ‘XX outages. items. flat if in large and But, few given maybe then we the of your potential hear to So, inventory the like we’d just and ramp-up by you downside an

Joc O’Rourke

Thank do by phosphate saying, XXXX, you, we S&D look Steve. let Well, that as into tight. start me believe we quite is the

low inventories, this end the with year inventories that’s all, low of relatively channel. we’ll first relatively So, throughout and

kind million will China tons. X.X will as XXX,XXX indicates inventory down India as represents which U.S. and be be much tons tons about Our of as somewhere much in down down mark. XXX,XXX as proxy that XX%,

how So, the have this year, fully will look do things if then, to look the believe And we distribution service are enter of increases, at there’s to stocks we at important. this production we go into as some we market. rebuilding a of couple that that

of of you the -- recovered which of million First tons inventory be that of all, do utilization expect we a year, if with where higher of level have will. production, end we that at the is the assets, will the

need offset we So, have the to normally at just increase relatively needs themselves run to balanced basic we to two, have a and if also they but that we look assets those market, opportunity inventory harder. supply will

they announced we’ve new publicly be that In in on terms that bringing relatively slower the of from OCP heard go-forward, They’ve will production. publicly.

Ma’aden, new up then modest to next the So, And over and coming the think see fairly Wa’ad operation year increases rest to Shamal production modest are improvements minor we or from as OCP. full continue to their productions nature. Al move in from they in I increases two,

So, tightening year. another. do I about too or for one But wouldn’t we really way worry see those, next a market much overall,

Operator

Your of from question comes Oxgaard from next Jonas Bernstein. line the

ahead. open. is line Please Your go

Jonas Oxgaard

supply you. bit demand Hi. touch like you look the it does wondering what on the if phosphate could a supply-demand, well. did for I on analysis as the same side? was phosphate Thank little rock Basically, rock you

Joc O’Rourke

Yes.

domestic at India really Jonas. for like phosphate markets market. that of in production that rock -- don’t that Overall, we demand, not really and reason We supply the the is look where we’re whatnot. -- sorry. We in demand, and comes Okay. involved the nonintegrated Thanks, don’t and about supply some where

of rock, own operation, our do production Mayo of our an use. really have Miski for it’s we which outside terms In

again perspective, it what really usage that don’t is global acid look and overall really that us. drives in matters -- So, from at we we the phosphoric that assume market,

MAP, our from breaks So, about it produced own what talk from when really that rock. we is DAP we our produce down rock and to what

don’t as So, at separate really it look market. we a

Operator

line comes of the from next Chris Our Credit question from Parkinson Suisse.

is line Your ahead. open. Please go

Chris Parkinson

some certain the the to peers potash you confident and as well. really in Asia, ex-China the market front. beginning It on your throughout and seem Chinese in are rebound Quickly churn appears, markets, of

even upside course on overall potential you market? just years, that the and your hitting hit also heading Asian incredibly very coming the from biodiesel, thoughts So, helpful on potential are course, And and into then, the of would your two much. [Ph] analysis Thank next oilseed What you grain, of on well. as could S&D. be optionality if from

Joc O’Rourke

this we about today, think Okay. is is and quickly previously, year. we talked the Thanks, unlike rebound XXXX what year as when went in and through low, see Chris. what we seeing saw what price the that we’ve the in earlier we year, in saw Look, I predicted not we’re demand, a which

in all, first was a I say, been expected. as would there’s So, of relative demand rebound

I then, of commodities of sure the like much your in-country in as Some as of both has produce to would palm and as basic as demand rest a has is, and would play role like is trying go highlights, has of India they also highlight, on a thing Asia, in markets in for out strong of to touch a China you role those has because to is those I And good food the there, in in markets has probably been security demand forward. like put both can. And And in been potash though, as up. where play really they reasons Malaysia jurisdictions for Demand the mentioned, in of piece biodiesel biodiesel the will China, course, going for we that Indonesia, to a those well. for India been of highlight bumped oil, part ethanol big just make to which there, that -- and jurisdictions. really fuel that as

demand next over China yes, increase So, Asia, demand playing do good and expecting these the year. role India, we we in are look in at time, from a

Operator

Citigroup. Our line comes of from next from the PJ question Juvekar

Your is open. ahead. Please line go

PJ Juvekar

Thanks while markets up terms And there into Hi. expectations only comments. Joc. of Yes. for difference? then, morning, volumes are think of in if of up secondly, I are year-to-date your China exports imports from -- the Good are why ag continue Potash phosphates is your that really are the is potash X%. robust, phosphates? XXXX, will and country X%, what What

Joc O’Rourke

The phosphate big Okay. Well, me than been and question between anything, first, more PJ. of just probably deliveries, inventory moves. difference, first hit Thank I think, in let that. your terms volumes you potash has for

to first starting production. got remember, inventory real for we And of a consumed quarter big had -- think real that you first phosphates. demand get you and I as we year was If into was had demand into that this buildup pull in very moved consumed to -- reason, before in from or the be really

think the probably I reason that’s So, for that.

In PJ? terms of Can I question, get got I... question? PJ -- ask we his the Sorry, to second Laura. to sorry, operator. second reask

Operator

[Operator Instructions]

Joc O’Rourke

Yes. sorry. I’m Oh,

think from exports of I was Chinese Chinese year. Sorry. imports potash next phosphates of and The question PJ

expectation focus potash, agricultural they is there’s So, that have see in outside is that their robust be ensuring on our plan this PJ, we industry food places. in going and reliance on the less and continued to five-year But, look, in security focus, continued a China. there China in to ensure

actually is, at we going down. so will that, demand Shanghai potash demand other capacity the for internal also, reaching and So, production Lake is possibly increase their strong. internally, doing even own expect But corn X its is because that the

be So, a, engine it, we to year. do call let’s next expect a for growth China

said, exports, phosphate think, I as of closures. terms a I there’s couple of In

to with certainly coupled had is to year, will consumption we impact maybe structural big but the has in And that COVID means this XXXX down because our increasing flat from there is So, be year-over-year believe exports phosphates, of expectation phosphate levels. down Chinese some the Chinese in not China. market start what a that been the changes of

Operator

Goldman Sachs. Davidson the from comes question next of from line Adam Our

is Please ahead. open. line Your go

Adam Samuelson

of stock a outlook guess, Good phosphate Adam XX%. yet, lot It’s the I market own your kind is your Hi. down of the Yes. morning. performance in Joc, today detail been your of own of kind expectations and there’s on market, Samuelson.

And your the so, you as think along that or of own the today strategy performance getting the think where the understanding different What market kind do operating is clearly, relates gap it market is? the or a view. market taking you is to in outlook

Joc O’Rourke

Well, I’m going their be fairly me by to their Adam. this direct been saying, made And of of by to suspect market on have statements impacted by answer, one let I has start the and business. impairment our phosphate competitors

So, let direct be with this. relatively me

one by all, the of impairment least I look accounting First driven triggering my potential say needs the IFRS. at that at an we at events, their long-term be When phosphate of estimates are that’s the look thing quarter-over-quarter. that outside I to And like a standing or use are prices consultants if can also up. up event, significantly practices triggering general is I CRU,

long-term event was triggering write-down. this to very me is the outlook phosphate for how see it for So, difficult

-- getting So, what I as such, asked you me wrong. we’re what

I are something taking than event and that think, where a means it phosphate people we market, be to the have different that, poor that outlook. had the clearly the they’re triggering assuming was idea

the compare will them if I to you is, we two businesses, -- very are what say compare difficult Now, one-to-one.

One, products. They also all, the economy impacted highly by industrial external is down; sell First but purified in we and very acid, we’re being the which slowing two sector scale, of is different competition. things. sell in by other, phosphoric very different the

an fertilizers, -- increase fertilizers see is seen actually to quite I good compare and we’ve outlook. very We’ve an look in that demand, in a pricing, we the increase if Now seen opposite.

I that, so. So, is compare at And in for fertilizers supply, demand phosphate don’t businesses. I and factor don’t two the can you think think certainly a least

Operator

next Markets. question comes from from the of RBC Capital Andrew Wong Our line

Your line is open. Please go ahead.

Andrew Wong

mean, a the one. I do discussion we’ve there’s impact to and around been But, that lot. CVD covered want a ask I So, of lot another

so sells terms anything, mostly it’s in there the the about up on said, is like Mosaic both in really really what’s not But, -- trade a seems volume. of terms -- lot And like you Mosaic, of the of if S&D. in getting like Brazil flows, So, Brazil aren’t and that’s driven U.S. it phosphate

U.S. So, going I reversed, comes thoughts understand the on down, actual the be curious impact on that if that. would Brazil? because then company maybe flows premium see were to less I’d but just hear the flows the what’s to you trade your

Joc O’Rourke

is demand. right. Thank overall and about supply Look, flows, Yes. Andrew. you, trade not you’re This absolutely

the have today, is Canada. redirected or have in they to So Brazil, Russians otherwise Eastern and India that the to cases, the would either Moroccans what have done tons U.S. some come

So, tons to of number than any They different different sold they have number moved significantly have year. a not globally they have of markets. in tons other

So, we know demand has and that their similar. balance very in world the been overall supply

U.S., that or into of of in it, we’ve tons to So, tons where to and Mexico from like had significant U.S. the the they terms also historically more set pull that. tons out places bring to the haven’t Australia U.S., serve but you’re tonnage seeing come tons

see difference flows. do trade you in a So,

India would Mosaic my So, other reversal see to cetera, coming what We the et our would the business. Saudi is We would happen more see if tons expectation from opposite. and be U.S. there to would tonnage, tons going from that the create would reversed, exactly into Brazil more our imports going

to overall, world. So don’t and market exports is a think down, a up, big the around demand and difference we that growing this Chinese make huge a today demand we’re good seeing is going The scenario are is difference.

Operator

comes question Piken Research. next line Cleveland from of Our from Michael the

open. ahead. is Please line go Your

Michael Piken

all about stabilize, sense get were this that -- year. hold a you movement your the to in terms tailwind let’s from in point the how for of Brazilian to what on might Hi. And type say, sense So, real we some a point year, to real if strengthen basically, a forward, thinking much be about just of to the this Yes. then the wanted Fertilizantes has real been and other I talked forecast basically, of your if and trying were we that market get at margins. bit that that on growth and margins? start have real to constant, just how a next would do itself impact to the what should reverse little

Joc O’Rourke

Michael. Look, me pieces two Thank in Yes. business. the address that you, of let

distribution and is First other our production piece business the our is business.

First impact, the of it it’s the if of been all, profitability weakening let me has on the had say, a farmer. real, biggest Brazilian

So, that Brazil. demand been driving has really in great picture a what’s

very is the So, Brazilian doing farmer well.

at terms of what to is on we look the we independent hedge convert we the buy expect in then sell you that our And would -- If number. relatively is, real business, distribution that for of is our business U.S. and reason real pricing. dollars, we a it Brazilian

doesn’t does on it effect is overall margins. What it the a our makes demand. have to actual a huge really, difference So, it

In obviously, term, though, go shorter and production fairly wages our of everything real-based quickly. down costs else, Brazil on terms the business

So, production an better I look has our Brazilian What quarters, look real this a If at last we’re improvement I two at see couple for X.XX% the we do I flat. is quarters, X.XX%. if of our will cost the statistics business. say, and the for last though, versus been margin of quarter in essentially

they’ve So, flat. been essentially, perfectly

as solid improvements seeing is from assume can exchange a in to actual that benefit the an how we’re you running or opposed improvements business we’re rate. So, that surmise the from

Operator

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

line ahead. Your open. go is Please

Joel Jackson

large fiction Is phosphate of or like large stated a a offer. if about in that buyer different They one part buyer something what it fact, Hi. investigation, mentioned than offers solubility. between? the larger this you as morning, Joc, specs do fact? the Good phosphate things has it’s can And duty what of can countervailing Joc. OCP Mosaic -- -- U.S. publicly

Joc O’Rourke

things of to products. This very direct. is of some be terms is small have issue absolutely what’s because to are it in the this second We diammonium of produced. phosphate. monoammonium the is phosphoric in two an that had But between acid, commodity relatively to the not recognize, product a the No, These ammonia takes that manufactured adds do our product in form differences and time I’ve phosphate are ore. quality chemically

the States that in specs frankly, And over years. measured time, this isn’t selling been even seen for have field. have we quality. great In for one We whole on that XX is the of the solubility commodity United response

work from the real of with which it the taking simply and specialty the commodity turn of products. a agronomic issue of agronomic in you’re better into just So, aspects it the aspects distraction, product. trying away a here It significantly actual are doesn’t it something MicroEssentials, to simply is is like a unless way doing case, than commodity focus a

it with there. that, I’ll leave So,

Operator

[Operator Stanley. Instructions] Vincent next We from comes of from our question Morgan Andrews line the have

Your line is open. Please go ahead.

Vincent Andrews

cash I on in in you to earlier. about follow-up if the future. And it, caught was you know be some the wanted it but I not sure just I ARO it don’t mentioned talked the environmental There non-cash the think charge. and liability it. I quarter. would I’m

of think some But that you the cash gave in to Thanks. the future? out have I could you liability quantify actually actually amount dates. you’ll pay

Joc O’Rourke

that at over retirement their long-term I’m here. Thanks, seems we obligations the water just -- muted is would me to going it you Clint, year is we little me obligations over period where over asset a retirement to summary do we but but we at ARO, the hand a of which look I’m have do. do this asset to Vincent. microphone. Thanks, themselves, plant particularly Yes. hand you it to biggest treatment overall first, a let a Vincent. city the going one Clint, let Sorry, -- give bit be at look that just If we of to to once give XX-year

long-term it a that we just Clint which gypstacks, rest, around is more little talk business the our of at. terms of other can work aspects I’d say, these But, about. the look In are

Clint Freeland

But first, in number the investment one interest $XX ARO that more is probably I needs of that’s I be year, – adjustments assumed of those need today. the million the changing on of like on one rates go I million on is every number we’ll this the say, a our that sheet. inflation embedded be facilities based in some earlier. the of we refinement at things to the that’s we’ll notable the that been the amount I plans, process to done cost around magnitude, adjustment about to don’t work bit osmosis And make put of that’s assumptions the again, is And think, then, order part to a the of and it to rates, lot quarter added part look things remediation, And work of But over that like that $XX to it’s that third the is see. environmental ARO would Otherwise, that’s when we as levels dollars cash the that then we in current in think mentioned actually just will done. that be imminent. the bring assumed on future we we’ve that mark. a -- ultimate typical a and that of the make needs at little as work years, based right recall I be made. a reverse through So, is investment multiple going particular, that of future. on something item back I think to balance the assessments think,

Operator

from line of Morgan. Our JP next Jeff question comes Zekauskas the from

Your line is open. Please go ahead.

Jeff Zekauskas

very Thanks much.

depreciation in CapEx your $XX million $XXX about million. quarterly is potash is Your about and

quarter about go incremental Does it’s when $XX million done? So, year. is that go D&A, million per CapEx to your and project per million $XXX your depreciation KX away above $XXX

Joc O’Rourke

Jeff. Thanks,

hand me exactly. straight Clint. to that sure not I’m Let

Clint Freeland

Good Hi. morning, Yes. Jeff.

year, what sustaining KX million level, a CapEx year, $XXX million this per the outside of level but about from each typically, to $XXX generally midpoint $XXX can that’s an of as it’s our And of $XXX year, spend, about in million. typical we’re seeing million. sustaining So kind example it’s vary

sustaining would And we spend obviously, forward. what that’s as KX. think, it. KX be to I expect expect we’ll that migrating would from So, migrate with to KX go We we over and

potash. you in sustaining think, alignment longer and I term, spend so, see will And CapEx depreciation between more

Operator

of Feinberg question next from Jeff Investments. comes Feinberg the Our from line

is Your line go Please open. ahead.

Jeff Feinberg

much. Thank you morning. very Good

But, the of $X.X to the about make talk want here. I rate to a describing I’m we’re rate $XX this from reported, looks if the big that run about. talking about billion that they in sure variables of $X that the takes. EBITDA, am a make ton picture understanding sure base I’m these have understanding And it quarter you run all understanding lot dynamic billion, just we’re so, growth of off of next a we’re fourth just puts talking that correct? variables like really of Just we year, here with When the and

Joc O’Rourke

Jeff. Thanks,

a in do here. quick just my me Let head

I -- me to getting math. do think, question a million right, QX is And your if $XXX I’m to you’re lead or a let saying, million approximately EBITDA. quick quarter the just $XX in for going increase $XX

X.X a X.X we X -- quarter. some think, to sell tons I million million million

If our by would for multiply add to EBITDA $XX, you that that the million $XXX on quarter.

although So, there. whatnot, and a today’s would close quarter-over-quarter be to Mosaic million. if Fertilizantes’ and to million, number into the account have take you yes, that’s It’s our added reasonable $XXX not sensitivity I think should you unreasonable pretty and took do guess, I about guess, But be $XXX starting seasonality point.

Jeff Feinberg

seems sure like, next make I there mean, the being to I portrayed. of sustainability lot billion and this. the I’m very it Perfect. market on But want end given a year. run demand rate, drivers be to message of a is skepticism to approach $X sounds understanding conservative the

Joc O’Rourke

you Again, would the much if again same holds thing. be saying XXXX, price the for

at much the tons today. Xish Again, same. at is You’re million the calculation over $XX looking

add $X.X would You billion.

Operator

question UBS. next of comes from our have line the from John Roberts We

Please open. go ahead. is line Your

John Roberts

XXXX, many you back keep point? got And are we years your CapEx enough think to near earlier. Maybe year level? you you. in Thank current have an this question relatively do overall But, late the capital to the the how at spending can you outlook on

Joc O’Rourke

to I’m being But, our for XXXX guess, is and it some overall, Thanks, to no on clarification exception. going term over I picture big Clint look, John. here our longer this. hand is

what improvement that is of after course XXXX big on whatnot, the today, but and longer-term million have spending is $XXX then, one or starts $XXX of we capital. other so off we’re million to KX. we’re capitals would Our dropping million the And Esterhazy $XXX sustaining seeing is

So, of are want projects that in improvement and may down, capital but high-return comes that there there. put spending to other areas we

flat? can depends So, it goes much time. certainly, down opportunity. we How how will it maintain on long I go down over think,

Operator

There questions are the no queue. in

Joc O’Rourke

at now. to like close our come I’d for on us you American our I South X to I November invite think, Xth before And am on we’ve a in-depth and all to Fertilizantes Mosaic join strategy. presentation close,

So to that, to want extremely call. I up Mosaic continues well. execute with today’s wrap

COVID-XX. down. our challenges driving are well competitiveness by of increasing We we’re And global through the managing costs

and we end expect XXXX. With into we’re tailwinds seeing to today well markets, and agricultural through strong results from the improving year continue fertilizer the the of

for detail. American joining you South us. our next thank come again, So, week for And back

Operator

may a and for call. today’s disconnect. concludes Ladies gentlemen, Thank you you participating. day. this Have And conference all great now

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