Greetings, and welcome to Nutrien's 2025 Second Quarter Earnings Call. 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.

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?

Thank you, Chris. Regarding potash, we are observing strong global demand. After returning to trend levels in 2022 and 2023, we have raised our market expectations to 73 million to 75 million tonnes this year, which would represent the strongest demand we've seen. We are confident that potash will be utilized effectively as inventories are not elevated in any global market, with many cases below average levels. This is partly because potash remains the most affordable crop nutrient. The strong demand is testing the market's ability to supply, both in terms of mine production and the supply chain. We do not anticipate any significant change in FSU tonnes entering the potash market. Consequently, we have seen a rise in potash prices, placing us in a favorable position regarding those prices. We have had a successful summer fill program with strong uptake, and we are fully committed in North America through the third quarter and are now placing tonnes in the fourth quarter at or above $20. Likewise, we are fully committed through Canpotex in offshore markets and heavily engaged in the fourth quarter as well. This is a strong indicator for 2025, with our raised guidance reflecting our positive outlook. Looking ahead to the remainder of the year, particularly in North America, the large corn crop in the U.S. and significant crop in Brazil have put some pressure on agricultural commodity prices and farmer margins. Nonetheless, we have seen robust field activity and strong demand during the third quarter, which is evident in our commitment levels in North America for potash and increasing strength in nitrogen for the fall. Overall, we are optimistic about 2025. As for 2026, with current inventory levels remaining low and potash being affordable, growers will likely seek to replenish the substantial amount of crop nutrients removed from the soil due to the significant 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. 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 long time. So how does that impact farmer decisions on what fertilizers to apply?

Yes, thank you, Andrew. As I mentioned, we are experiencing some pressure on agricultural commodity prices, particularly corn and soybeans, which is affecting grower margins. In the first half of the year, the situation unfolded as we anticipated in the Corn Belt across the Western U.S., Canada, and Brazil. However, the Southern U.S. experienced wet conditions and Australia faced dryness, leading to some challenges that are carrying into the second quarter. On a positive note, we are observing robust activity in the third quarter. Although the planting season for Australia's winter crop had a slow start due to dry conditions, recent rainfall in July has spurred increased activity. I'll pass the conversation to Jeff for further details on this. Chris, you might also want to address the affordability dynamics between nitrogen, phosphate, and potash.

Yes, thank you, Ken. As you pointed out earlier, we are experiencing very strong engagement from our growers as we enter the third quarter. When I examine the areas that were not impacted by weather in the first half of the year, it appears that most of those regions have performed in line with our expectations. This includes the Corn Belt, our Western U.S. operations, Canada, and Brazil. Specifically regarding the Corn Belt, we reported a tonnage increase of about 9% for the first half of the year. Looking ahead to the third quarter, we notice that growers are currently investing funds to protect their yields. In a low price environment, growers tend to focus intensely on maximizing yields, and we are seeing this trend manifest now from both plant health and nutritional perspectives.

Yes. Thanks, Jeff. And Andrew, as we think about the domestic market and that balance between NP&K, as Ken mentioned, 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 discuss retail demand for the fall season in North America a bit further, I understand that the weather will be a key factor. It seems that good weather is likely, which is the primary influence on the fall season rather than affordability. That's my first question. My second question pertains to Brazil and Retail. How confident are you that you can return to an EBITDA run rate of $50 million to $80 million next year after breaking even this year? What factors will contribute to achieving that?

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 plants. 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.

Thank you for the question, Ben. It’s true that I’m already considering 2026. Growers will harvest this crop and start preparing for next year’s potentially large yield, while we’ll monitor corn and soybean prices. Demand for potash remains strong, and we anticipate that trend will continue into 2026 due to increased requirements in regions like China and Southeast Asia, driven by high palm oil prices and clean fuel mandates. In Brazil, fertilizer consumption is on the rise, going from 47 million tonnes last year to an expected 48 million tonnes this year. North America also shows strong nutrient demand, while supply challenges exist. Although we face some project delays, prices remain strong, and we expect to maintain customer volumes. In the nitrogen sector, demand stays robust despite difficulties in urea procurement in India and restrictions on exports from China. These factors contribute to a stronger market for urea. There are also supply challenges for ammonia, particularly from Russia and the Middle East, along with recent project hurdles in those regions. European gas pricing compared to North America remains a factor. As for phosphate, prices are high, and we will be observing how growers react to these costs and their impact on 2026. Overall, we remain optimistic as we look toward 2025 and 2026 while gauging international grower sentiments and developments in North America.

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 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.

If I look at the segments from a margin rate perspective, our crop protection margins were actually a bit better than we expected in the first half of the year, and we believe there's a chance to improve that further in the second half. Regarding our fertilizer margins, on a global scale, they are flat compared to last year. It's important to note that we made strategic decisions in Brazil to reduce our tonnage and shift to a different direct marketing approach instead of using the blenders we have previously mentioned. This change has led to a lower margin profile for those tonnes. We aimed to decrease about 200,000 tonnes during the first half, and that’s essentially what we achieved. As we've discussed multiple times, we are in a competitive environment, and I’m satisfied with our current margin position. As we increase the proportion of nutritionals in our offerings, which showed a strong performance in July, I believe we will see an improvement in margin per tonne. On the seed side, our margin rates align with our expectations, primarily driven by volume. We are continuously striving to enhance our margins. As we look ahead to the second half of the year, we will focus on controlling what we can, which includes expanding margins across all 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.

For the second half of the year, focusing on what we can control will be our top priority. We believe there is an opportunity to convert more acres in our full-year nutritionals, which we are very enthusiastic about. We have confidence in our portfolio regarding this. We will place significant emphasis on managing expenses. In the first half, we successfully reduced expenses by 6%, and we plan to maintain that momentum in the second half. Additionally, as Ken mentioned, Australia faced challenging weather conditions in the first half, but we are seeing improvements. We anticipate these improvements will create opportunities for our proprietary business as we move into the 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 do you just think it's just a blip?

Yes, Edlain, thank you for the question. We remain positive about the potash market and believe it's beneficial when potash is affordable for growers. When this happens, we observe record demand and consumption. This trend is evident today. The balance of supply and demand helps stabilize the market, and the historic average potash prices over the past decade are favorable for us. As we head into the fall, we have discussed North America, but looking globally, whether in Southeast Asia with palm plantations or the changes in China, we are seeing positive macro trends in Brazil, along with a robust fall application season in North America. Our production volumes are strong, and our cost of production is expected to be below $60 per unit, which is our target range. In Brazil, they're gearing up for soybean planting in September. While there has been a seasonal lull and some softening in prices, we anticipate significant activity as they start planting again. Overall, Edlain, I appreciate your question, and we are indeed optimistic about the current state of the potash market.

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 have been quite weak in the first half in Retail, possibly due to cotton in the South. Could you provide some clarity on price volumes in that area? As we prepare for next year, assuming the weather improves in the South, do you expect to recover that volume? I'll leave it at that.

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, thank you, Ken. The seed revenue is entirely influenced by two main factors. Firstly, we experienced significant prevent plant situations in our Southern region, which is our largest seed market in North America. When prevent plant occurs, it can greatly impact seed revenue since those acres did not get planted. I expect all of that to come back next year, assuming we have a spring similar to this past year, which was one of the wettest springs in the last 150 years. Additionally, we observed changes in crop mix, particularly with cotton. Due to certain economic conditions affecting cotton in the South, many cotton acres were switched to sorghum or milo, which generates much less revenue. We'll need to monitor cotton commodity pricing year-over-year. I anticipate that some of those acres will return in Texas, but it is still too early to make a prediction about that.

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. Some of this reflects the need to layer our purchasing as we move a significant amount of tonnes through the markets. As we approach the end of the season, we've been buying into a market that has higher prices, which impacts our margins as well. However, we believe we are well positioned heading into fall and don't consider ourselves overly aggressive. We've discussed the substantial corn crop and a large soybean crop, both of which consume a lot of nutrients. We see potential opportunities in the latter half of the year. If the fall remains open, we could increase our volume in the market by about 5%, and we aim to expand our margins in the process.

Your next question comes from Lucas Beaumont of UBS Financial.

Going back to potash, you've mentioned facing some challenges in meeting the demand this year from a supply perspective. Looking ahead to 2026, if we experience another year of normal demand growth, where do you see the supply coming from? If the market is likely to struggle to meet that demand and you want to increase your share beyond 20%, when would you need to make the staffing decisions you mentioned?

Thank you for the question, Lucas. Yes, we have observed those FSU tonnes returning to the market, along with some new production from Laos, although growth from that region has slowed. Additionally, project delays are likely to affect the upcoming year and beyond. Currently, we view the market as being in balance, with strong demand meeting supply as we head into next year. There are a few other producers that may slightly increase their production, and we are also positioned to do so. Our strategy for next year focuses on maintaining market share and growing alongside our customer needs. We plan to onboard personnel to meet production requirements accordingly. Given the demand fundamentals and supply levels aligning with demand, we anticipate a strong market next year, especially considering ongoing project delays.

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, thank you for the question, Ben. There has been no slowdown on share repurchases. We have been purchasing shares at around $45 million per month. I think this is a good way to consider our approach for the remainder of the year, especially as we remain optimistic about how things are developing. Regarding our overall strategy on capital allocation, dividends, and share repurchases, I will let Mark provide more details.

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 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.