Conference Transcript - NTR 2026-05-13

Chuck Magro, CEO

of fertilizers and so we continue to watch that situation evolve and with a focus on supporting customers through that environment which we've done a good job of but as we look to the balance of the year we're quite constructive that we continue to perform well in this market and and I know we'll jump into all of that today Joel so I think with that probably just pass it over to you so the BMO note last week said it's the most in line of inline quarters right it did say that and and and so like you kind of touched on it like you guys maintained all your guidance, retail, EBITDA, as well as your different volume guidances for your wholesale businesses, but there's so much volatility going on in the world.

Joel Jackson, Analyst — BMO Capital Markets

Can you talk about that? I think some people thought you might raise some of your numbers, especially retail, and talk about what the different puts and takes have been the last few months on your business, you know, from everything going on.

Chuck Magro, CEO

Sure. As you said, we maintained all of our guidance ranges in line with the strong first quarter performance, which I mentioned. I mean, I think the reality of it is we're sitting here in the early part of may which is one of our busiest months of the year planting is just starting to progress in north america and so i think any preemptive changes to those guidance ranges would would really be premature based on what we see and maybe imprudent or irresponsible of us and and we always take that process really seriously in terms of giving investors our best expectations of what we see so as we move through spring we'll obviously have a better view of things but I think the punchline for us as we articulated on our earnings call is that we're very constructive on the remainder of the year we're encouraged by what we see and and the performance of the business continues to be very strong so I mean I think that's the high points if we look at really the effects of what's happened in the Middle East and I know we'll get into it on the business starting with potash you know potash is really a demand driven market still and really is being driven by global supply demand fundamentals and and a tight market and so we've seen just incremental improvements in the supply-demand balance, and that's led to incremental changes in global benchmark prices. And potash to date has been largely unaffected by the conflict, thankfully. And we continue to see really good demand across the world there. In nitrogen, obviously, the conflict has substantially disrupted nitrogen markets, and that's led to pretty dramatic increases across all global nitrogen benchmarks. from that perspective obviously we're going to see higher global benchmarks start to flow through in the second quarter that was really not a first quarter event but we can see that quite clearly with what that's done to pricing and energy markets so from a phosphate standpoint it's a little bit the opposite we've seen the cost and price of sulfur and ammonia fly up quite a bit more significantly than finished phosphate pricing and as you know I think Ken and I both articulated on our earnings call, we see this current situation as unsustainable, but it's not clear that it will immediately resolve itself. So there are some meaningful headwinds for phosphate production globally right now because of that equation. And then I think you move on to the downstream retail business, and that business is all about supporting customers. And we were really encouraged by the customer demand that we saw in the first quarter. As investors who have been with us for a long time on the sell side knows, it's really a first half business, not a quarter business. And so we saw field activity start at the end of March. So some of the first half earnings show up in the first quarter, but really good customer engagement across the board in an environment like we're in today. Growers are going to look to maximize yield. We saw exactly the kind of behavior we would expect. And I think more than that, probably lost in all of this has been corn and soybean prices for the December and November futures respectively, hitting 52-week highs which is encouraging in this environment so you know in the downstream retail businesses we said on the call a lot of the guidance assumptions that we made to start the year are unchanged we assume there could be potentially stronger per ton margins in crop nutrients which should more than offset an assumption of probably lower phosphate volumes and higher fuel costs so we feel really constructive about the outlook for the downstream business and he's take that as a whole as I mentioned constructive on the outlook for the entire business for the remainder of the year okay a lot of so much going on in the u.s. and North

Joel Jackson, Analyst — BMO Capital Markets

America fertilizer market so fertilizer shortages now now I don't think that's true North America I think we've seen the Midwest mostly stocked up what is your view on on that like like you got like I guess if there were fertilizer shortages you would have seen you know your prices move a bit quicker like you realize prices so I'm assuming so what's what's what's your view on that yeah I these are globally traded commodities and so I think what you've seen across the world is global benchmark prices doing exactly what they would is rising to attract supply given the substantial deficit of crop nutrients particularly in nitrogen phosphate that we've seen emerge because of the straightover mousse being shut off so I think global benchmarks are doing what you'd

Chuck Magro, CEO

expect them to do in terms of availability of nutrients you know we think that growers and customers are going to have availability of nutrients, albeit global benchmarks have risen to attract that supply. Really, what we can comment on is what we're seeing so far on the ground. I think on balance, we're seeing crop nutrient volumes move through the distribution channel and down to the grower level in North America. The one place where things are probably a little weaker is in phosphates, where we saw some demand issues at the grower level last fall we're continuing to see through the spring phosphate application rates be below what we would have expected i think nitrogen is about as expected and actually on potash maybe a little bit better than we expected domestically and so when we take that as a whole you know fertilizer volumes not substantially different than we would have expected but among the three nutrients a little bit of diversity there so obviously because the north america was so ready to go for spring when the time the conflict started you know we have to talk about this in terms of a Second half year, southern hemisphere, then fall, spring for the following year.

Joel Jackson, Analyst — BMO Capital Markets

But this question speaks about potash. You said potash is going a bit better than expected. So a question comes in, and I get this question almost daily now, by the way, in my office, is how do you think about potential potash demand destruction, not because of potash prices, because of challenge farmer economics? So they're paying more for nitrogen and energy. Therefore, they're going to have to allocate farmer dollars to something else, like nitrogen, whatever, and that gets pulled from potash.

Chuck Magro, CEO

Yeah, I mean, I think if you step back globally and you think about potash, I mean, our guidance range for global shipments is unchanged. It's 74 to 77. Our guidance midpoint for nutrient is unchanged. And I think if you think about the setup to start this year, this is truly a global market where demand is strong across the board. The precursors to that were very low inventories in China, which caused a historically early settlement, as everyone knows now. a five-year low in inventories entering the year for potash in Brazil and really strong grower economics in key crops that need potash globally and then when you look at North America which is about 10 10 and a half million tons of a 75 million ton market give or take we're seeing as I said application rates actually a little bit stronger than we expected and so that certainly tells a story where we're seeing strong and healthy potash fundamentals and conversely it's it's not a demand destruction story it's actually an affordability story from what we can see so we see no signs of that in fact we see the opposite where it appears the potash market is set to grow globally for the fourth year in a row and when we talk about this with investors always talk about this sort of dashboard of key indicators of what's important to you know sort of a healthy sustainable growing potash market if we look at price on a global basis affordability is good across the board, and certainly on a relative basis versus other nutrients. When we look at inventories, as I mentioned, coming into the year, they were below average or average really across all key markets. And we look at the pace of supply additions. This market, from a supply standpoint globally, is really just struggling to keep pace with demand that continues to grow. And when you have an environment like that, we have the recipe or the ingredients for the potash market to continue to move along which is what we expect over the next couple of years so we're very encouraged by what we see in in the potash market and i think when you look at record first quarter sales volumes for us in a very strong global market that would be a great sign post for that how do you think of potash academically demand so you know potash man never goes up three years in a row guess what this year if it plays out it'll be four years in a row i mean i i think i see what's out there i see that chinese inventories aren't high i see that brazil end of the year.

Joel Jackson, Analyst — BMO Capital Markets

Last year at Low Inventories, they've been importing a lot this year. All the things that we all watch that says potash demand is great or should be great are there, yet this is the fourth year in a row of demand growth, right? Just academically, when you plan your business, how do you think about this?

Chuck Magro, CEO

I mean, you learn lessons from the past. I think these lessons have been there, that over very long periods, you go a couple of decades, that 2.5%-ish demand growth CAGR is pretty consistent, and it's there over time. Where you tend to see anomalies is because one of two things typically gets out of whack. One, prices reach extremes, either moving down to the marginal cost curve because of oversupply conditions, or you have what happened during the Russia-Ukraine crisis where supply was impacted so dramatically that prices fly up globally. They've got sanctions against Belarusian times. Yes, and so when you get those kind of extreme price movements that affect affordability, that either causes stocking behavior or de-stocking behavior, which can cause variations from year to year. As I mentioned just a couple of minutes ago, when you look at the current environment, potash price has been stable, very affordable relative to global crops and the other nutrients, which creates those conditions. The market can continue to grow. The comment I just made on price relates to inventory. The other key variable here is when we look at inventories, those years where stocking or de-stocking occurs tend to correlate really closely with changes in inventories globally, and we're just not seeing that. And so when those two factors are in balance and they're in a healthy state, the potash market can continue to grow for years to come if we have those kinds of conditions on a very consistent basis. You couple that with the fact that there are not material amounts of supply to be added in excess of that demand growth. I think we have all the conditions that the potash market can plot along as we expect so back to your original question when we're looking internally when we're planning the year chris reynolds our downstream evp is here with us when we're looking at grower demand those are the factors that we look at and you learn lessons from a year like 2022 when prices became unaffordable inventories built in the first half of the year and it took us 12 to 18 months to work through that these conditions are very stable and healthy right now.

Joel Jackson, Analyst — BMO Capital Markets

I got a question on phosphate. It's basically saying, and you talked about this last week too, you're saying that phosphate, was it untenable, unworkable, I forget the exact word you said, but at these input prices, but where would you need ammonia and sulfur prices to be for phosphate economics to work? I assume this question is sort of asking at spot phosphate, but where would you need ammonia and sulfur to be at spot phosphate for it to work?

Chuck Magro, CEO

Yeah, well, I mean if you look at where spot phosphate prices are today and you would just use an industry proxy or some theoretical model I mean you need ammonia and sulfur prices both several hundred dollars lower and particularly sulfur Which is the big cost driver from a phosphate standpoint in your mind Are you using the 655 Q2 sulfur benchmark are using like no spots like a thousand like what when you're speaking about that to be honest I don't think either particularly sustainable.

Joel Jackson, Analyst — BMO Capital Markets

Yeah, but when you were saying 200 lower using like a thousand as a base or 655 as a base I'm just trying to wonder what you're thinking.

Chuck Magro, CEO

Yeah, I mean, I think honestly, even at $655,000 or $1,000,000, you're out of the ballpark in terms of having sustainable profitability that can incent reinvestment in capital expenditures and assets. And so, as we said on the call, the current economics from a macro standpoint, when you look across the chain, are unsustainable. And now we have seen demand continue to be rationed at the channel and at the grower level. We saw that last fall. We believe we're seeing signs of that right now. You know, at the same time, when we look at global demand for sulfur and what's happening for prices and the issues with the straight, we've got an issue where those costs are flying up to make phosphate faster than finished phosphate prices. So there will need to be some structural shifts in these variables in order to make this sustainable. We know this won't last forever, but I think just to be clear, it is a very challenging time for phosphate production.

Joel Jackson, Analyst — BMO Capital Markets

As you start thinking about, so we haven't talked about retail yet. Let's talk about retail and nitrate. As you think about this summer, how might this summer and Phil be different than prior years? Because you're a nitrate producer, and you're also, of course, the largest retailer in the U.S., and Australia and Canada.

Chuck Magro, CEO

How do you think about that? Yeah, I mean, I think to start the year, I mean, the objective is always to meet customer demand. So that's what we've been working to do. And I think we've done that in two ways in the business to start the year. The first would be nitrogen reliability has been really strong for the business. So obviously, as a producer of nitrogen in North America, with the reliability improvements we've made, the bottlenecks we've continued to bring online, we've been able to increase the supply of agricultural nitrogen to the domestic market, which is one part of it. You know, I think the second is in the retail business, we always have a very sophisticated way that we try to buy into the book in order to make sure we've got good availability for customers. We did that again this year. I don't think the decision set is really any different than any other year. When you look at our business, one, as we get into the summer and we get through the spring, the objective, you know, from working capital optimization and investments in working capital for our downstream business is basically always to end the spring empty. It'd be highly anomalous that we wouldn't do that, and we're going to do that again. So we'll try to use all the inventory that we have to set the business up well as we move into the fall. You know, I think it's just too soon to know about what Phil's going to look like because it's such a day-to-day situation in the Middle East, and we suspect that the channel and the industry as a whole is going to be looking to what happens there in terms of availability. But what I can say is we'll continue to drive reliability improvements in the business to maximize availability of nitrogen upstream and downstream. As always, we'll manage inventory thoughtfully and look to end the season empty.

Joel Jackson, Analyst — BMO Capital Markets

Now, you're a bit different in that. Your nitrogen potash business, if you want, you can, I apologize for that term, but you can stuff your own channel with your own product. But do you think your retail customers, your retail customers of your potash nitrogen businesses in North America, might they have different purchasing behavior? Might they not want to empty the bins this year because they're worried about supply?

Chuck Magro, CEO

Again, I think it's just too soon to know. I mean, Phil is, you know, at least a month or more away at this point, and a lot of this is going to be the market's perception of what's going on with availability in the Middle East. At the same time, I don't think we're really different than any other industry player. I mean, we're going to maximize the efficiency of the business. We're going to look at the economics of the decisions we're making. I think the real advantage that we have when you think about the combination of assets we have upstream and downstream is really the ability to efficiently move supply and put it in market for customers when customers need it while extracting logistics efficiencies through that supply chain. I mean, that's really what Nutrien's MO is in terms of extracting value, creating a better cost position, which makes us more efficient for customers. But I think that decision set and that criteria for the industry is going to be heavily driven by what's going on the Middle East when we get into June.

Joel Jackson, Analyst — BMO Capital Markets

Before we hit retail, I did get a question about where do you see the largest remaining emissions reduction opportunities within nitrogen operations?

Chuck Magro, CEO

Yeah, so when we look back to what we've done, you know, we made really good progress for those opportunities that were economic for us. So back in sort of the 2020-2021 time frame, certainly we had a view of the world which was dramatically increasing carbon price explicitly the potential for higher voluntary carbon market incentives because of a variety of reasons including policy factors those things have not materialized the way we might have expected but for us all of those decisions are really about materiality so the projects that we did undertake which got us over halfway to that target were all economic projects that returned an attractive return on capital. And so when we look at what would typically or historically have been called ESG-type decisions, including climate and decarbonization, that's all based on materiality for us. And so at this point, with the landscape that we see out there and our cost of capital and the opportunities we have to deploy capital across the business, we've sort of executed on the opportunities that were available to us that were material that provided a return on capital that was appropriate. We've got economics on the next projects that are out there, but we would require either a materially higher voluntary carbon price or a materially higher taxation burden for those to be economic to the point that they would beat other opportunities we see in our portfolio to deploy capital, including just giving that capital back to shareholders. So I think the history there is really to say we efficiently took out the opportunities that we saw. We don't see anything of material size today that would make sense. But obviously, the landscape can change, and we'd be prepared to look at those things again if it did.

Joel Jackson, Analyst — BMO Capital Markets

Okay, talk about the retail earnings durability, the growth algorithm, when commodity prices do normalize. How can proprietary products contribute to anything growth? What's happening in Brazil? You've been involved many years with AGM and Nutrient doing tuck-ins. You guys have been tucking in less than you have in the past. You know, is that the only meaningful real growth driver beyond proprietary products?

Chuck Magro, CEO

Yeah, I mean, I think if you go back to a multi-year period, say, you know, since the merger, the retail businesses demonstrated at the EBITDA level the ability to grow on a fairly consistent mid-single digits kind of growth rate. And it's been a combination of organic and inorganic growth since the creation of Nutrien that's done that. On a nearer term time horizon, obviously at the Investor Day that we undertook in June of 2024, the targets that we set out for 2026 at the time were based on a 2023 benchmark. If you look at the midpoint of our guidance this year, it implies about $400 million of EBITDA growth since the Investor Day, which is a very healthy clip. So I think that shows the durability of earnings growth in the business through a variety of market environments, including fairly weak market environment over the last couple of years. really is there for us. So when we look to the future, that mid-single digits EBITDA growth we think is something that can continue structurally into the future here, at least for the foreseeable years to come. Even in a year like last year, which was pretty challenging in some core areas of the business, we grew the proprietary gross margin by about 4%. This year, when we talk to investors about what we expect, we're expecting high single digits growth in the proprietary products business, and that'll really be driven by crop protection and nutrition. So on proprietary in particular, we see that mid to high single digits growth being something that is possible over the next three to five years. Retail more broadly, that mid single digits growth rate we think is appropriate. And there's a few different levers. I think one, proprietary, which we talked about. Two, we continue to optimize the network and the footprint of the business where we're rationalizing underperforming assets. We're putting larger, more efficient assets in our footprint that allow us to grow organically by growing revenue while taking cost out of the business. And of course, we are continuing to execute tuck-in acquisitions. If you look at the last four or five years, we've typically deployed between 20 and 100 million of capital towards tuck-ins. I think that's a reasonable rate to assume going forward. We did complete an acquisition sort of in that 40 to 50 million enterprise value range to start the year in the Corn Belt. So we'll still deploy capital there if it's the right thing to do to deploy capital, but there's no arbitrary target for tuck-in acquisition. So when I put all that together, we do feel confident there's a mid-single digits EBITDA growth clip that's possible for the business over the years to come.

Joel Jackson, Analyst — BMO Capital Markets

Are you getting about six handle multiples on the retail tuck-in? Yeah.

Chuck Magro, CEO

It hasn't changed a lot. I think what you typically see, again, for a, let's call it a small to medium-size tuck-in acquisition opportunity in the U.S., six to seven times pre-synergies. You know, for Nutrien, if we're going to make an acquisition like that, there's typically one of three opportunities available from a synergy perspective for us. One, integrating proprietary products where there aren't any or upgrading the product portfolio. Two, we have some amount of footprint overlap where we can close redundant locations and be more efficient and provides cost synergies, and the third would just be bringing the procurement leverage that Nutrient has to a business that didn't have it previously. If we do one or more of those things you're typically talking about taking about two turns of EBITDA multiple out in synergies and so you end up typically in that four to five times post synergy multiple basis and for us to really go after these acquisitions it typically looks something like that.

Joel Jackson, Analyst — BMO Capital Markets

Okay sticking in retail a bit, a lot of moving parts and crop protections, not been a great time if you're a crop protection OEM, a producer the last few years, but things have seemed to stabilize. You know, what's going on crop protection, generics, what are you guys seeing from your side of it?

Chuck Magro, CEO

Yeah, I think, you know, if you look at our business over the last couple of years and think about where we sit, we've made billions of dollars of investment over the years in infrastructure. We've obviously worked hard to grow our relationship with customers and develop the trust and bring a total agronomic solution. And so when you look at our CP business in the downstream business over the last couple of years, it's actually a good news story, all things considered. Our percentage gross margins have actually gone up, and we've continued to grow the proprietary business pretty consistently. And so in a market where generic crop production has continued to command a greater percentage of share, that distribution footprint, the relationship we have with suppliers, and the option to have that proprietary chemistry business have all put us in a position where, despite declining pricing over the last couple of years, we've actually expanded percentage margins and been able to hold absolute gross profit pretty stable and continue to see our Loveland crop protection business grow. So for all that's going on in the generic world and market mix, our CP business continues to perform well. And as I said, when we looked at proprietary crop protection, we think that's an area that can continue to grow for us. So we feel confident and pretty constructive about what we've seen at Nutrient in that respect.

Joel Jackson, Analyst — BMO Capital Markets

I mean, Agrim and Nutrien did a lot of big retail jumps. You did tuck-ins, and you did a lot of acquisitions. It's been more quiet in the past bunch of years. Tuck-ins have come down. You talked about goals back in the day of being at least, I think, what, 30% market share in the market you serve. You're there in Canada, right? You're there in Australia. You're not there in the States. You're, what, maybe low to mid-20s percentage market share in the States? How do you think about the goals in retail going forward? Do you want to try it 30%? Do you want to pick away and try to get one of the big privates to sell to you eventually? How do you think about retail? Or is it just going to be just mid-single digits? Just wait that out. Not wait that out, but just go along that path and not jumpstart up like maybe Agam or Nutrien did it back in the day.

Chuck Magro, CEO

Yeah, I mean, I think obviously when you look back historically, I mean, when I joined the company in 2011, I remember really vividly, I think the year prior, we had done just over $500 million of EBITDA.

Joel Jackson, Analyst — BMO Capital Markets

It was $100 million business, Agam Retail, probably 20, 25 years ago.

Chuck Magro, CEO

Yeah, and, you know, when I joined in 2011, I think we had just done just over $500 million of EBITDA, and today, obviously, the midpoint of our guide is $1.85 billion. So it's been a business that's continued to grow. I think when you step back from all of that, we've got to... So you did lots of big acquisitions.

Joel Jackson, Analyst — BMO Capital Markets

You did, God, I can't remember anymore. You did Landmark. You did Viterra. You did so many things, UAP, Royster Collective. Back in the day, it was pre-nutrient, but it did a lot of things. Yep, I think you named four of the large five that we did. What was the fifth?

Chuck Magro, CEO

ROCO. So when we look at all of those, you're right. There's been inorganic and organic growth drivers. When we look to the future, as I just articulated, we've got a lot of confidence in a really good base plan. It doesn't require significant deployment of capital or acquisition capital to achieve that kind of mid-single-digits growth rate. So that's great news. And, you know, when you step back and think about capital allocation at Nutrien generally, we've been deploying capital in a very thoughtful, consistent, disciplined way so that we maximize return on capital for shareholders and we're deploying that capital responsibly. And so, you know, could acquisitions be part of that future mix? They absolutely could be, but that's going to be under that framework of disciplined capital allocation and only if we get the confidence that's the right thing to do. So there's no arbitrary target on share or anything else like that. It's the continued growth of free cash flow and free cash flow per share for the company, which we continue to optimize around. We see retail as being a great place to put investment in proprietary in our network to work today and any other incremental opportunities we'd really be looking around at. How does that look versus other opportunities to deploy capital in Nutrien or just giving capital the back to shareholders, which has become a big part of our capital deployment strategy that we like, particularly on that rateable share repurchase to be able to knock share count out and consistently grow free cash flow per share through cycles. So it's all part of that broader framework in terms of how we would look at that.

Joel Jackson, Analyst — BMO Capital Markets

Would you think the tuck-in and opportunities are harder or easier than it was? You probably picked away at some of your best opportunities. I know things have changed. There was a digital ag revolution, which maybe has slowed down. There was more requirements around ammonia, safety, things like that. Valuations, has things easier or harder? or is your ideal network now more sort of along the way and harder to find opportunities?

Chuck Magro, CEO

I mean, if you look at the way that the market is composed, you've still got about a quarter of the U.S. retail market that would be independent. So there is opportunity. I think the biggest change has actually been Nutrien. You know, we undertook acquisitions where we thought we had really substantial synergies, could bring cost efficiencies, efficiencies for customers, and that Synergy Prize was really what drove those acquisitions. And I'd say, for the most part, those large retail acquisitions we've undertaken were very successful, you know, really by any measure. The nutrient capital allocation philosophy and the consistency and the focus there is probably what's changed that, you know, we look today through a lens of just being so rigorous around where that capital dollar is going to go that those opportunities are still there, but they have to be the right one. I think at the same time, when we continue to look at our own network, I think it's still fair to say there's probably overbuilt infrastructure in general in the U.S. retail market. There's a lot of older assets. And so if we're going to acquire physical assets versus reinvesting in our own, we want to be really thoughtful that that's the right thing to do. So, again, it just comes down to that return on capital, that militant focus on how we allocate capital.

Joel Jackson, Analyst — BMO Capital Markets

You can talk about some of the portfolio reviews you're doing now, trying to maybe sell phosphate or changing how you deal with phosphate. You're talking about selling Brazilian assets. I think you said last week you've got to either have a deal in place for the Brazilian serbiancy business and other assets, how you're reviewing those. And then also, you know, Trinidad, whether you try to get a gas deal there. Or I think the commentary last week was like maybe now that you've shut down the operations in Trinidad, maybe you talk about maybe selling them. It sounds like you're now focused on that and maybe not trying to get a new gas deal there. I said a lot there.

Chuck Magro, CEO

You heard me. I always joke that I speak Joel, so I know exactly what you're saying. You know, I think the theme of the question is really we've got a portfolio review underway at Nutrien. The core underlying theme of that whole portfolio review at Nutrien is just what I said. It's the focus on having a resilient portfolio of assets that cash flow in any market environment such that high commodity prices, low commodity prices. This will be a portfolio that generates cash consistently. And a big focus for the management team and me and my role over the last couple of years has been really doing a rigorous look asset by asset, geography by geography on return on capital, how free cash flow generation looks across those assets. And as we've talked to investors about over the last year, Trinidad, Phosphate and Brazil retail is really what fell out of that. In terms of a status update on where we're at with each of those, when we look at the Brazil retail business, as you said, Ken mentioned on our call last week, We're out in the market testing a sale of the soybean seed business in that region and continuing to evaluate the rest of the footprint in Brazil for the very reason that I talked about. When we look at the phosphate business, we are now actively in the market with our sales process, comparing that to alternatives we have internally to reconfigure the business. Our goal for the phosphate review is to have a conclusion on the path forward for the business by the end of the year. And the sales process is obviously going to provide us with indications of what the business is worth to a third party, which is a critical component of that assessment. And then from a Trinidad standpoint, as you said, and, you know, we've talked about exploring a potential sale of that facility. The issues in Trinidad are really beyond gas. It's structural. And so as we've continued to say, it's really four things. It's one, we don't currently have a gas contract. two, gas availability continues to be a huge question on the island, three, there's been changes or posture changes in the port fee structure there, and then there's you know some disputes around fees related to historical port usage, and so we've continued to be very consistent in saying we would need a comprehensive solution to all of those to really understand a path forward and that's not yet come. So at the same time like the other assets we think it's incumbent upon us to test the value of those assets to a third party and so you know as we said we are also exploring whether there's a potential sale of those assets and so all of those processes we'd be hope to get to a path forward a conclusion a direction by the end of 2026 and when we look on the other side of that there's really a nutrient portfolio that sits there that we'd be willing to invest in all the assets they fit that profile of resilient cash generation that I mentioned. So that's really the goal is just continuing to reposition the company for strength in the years ahead.

Joel Jackson, Analyst — BMO Capital Markets

In this phosphate sulfur environment, you're trying to sell these assets or look at these assets in a very weird time. Could what's going on lead you to have to delay that process a bit or change the types of deals you might do, earn outs, optionalities, conditions, you know what I mean? Is that entering the conversation?

Chuck Magro, CEO

You know, for us, really, we've had good interest from buyers in the assets and I think you know we've got sophisticated buyers that are interested in the assets in just the same way that we're sitting here looking at the world saying the current economic construct is it's not sustainable we would expect that a sophisticated large buyer who's looking at being a long-term owner of these assets would would see through the current environment and looking at these assets on a going concern basis obviously time will tell the best indication of value for the phosphate business will be what someone's willing to pay for the phosphate business. But we are proceeding with the sales process, you know, in the months ahead. And, you know, we'll have more to report once we have better line of sight on what that all looks like.

Joel Jackson, Analyst — BMO Capital Markets

I believe Nutrient earlier this year or last year polled your support for the continuing of CBD phosphate duties against Moroccans. Is that accurate?

Chuck Magro, CEO

That would not be accurate in the sense that we actually were never part of the petition. So we were never supportive. We always complied with the requests we had to furnish information for the initial proceedings, but Nutrien was actually never supportive, just a participant in providing information. I think when you look at the current situation and what it's done for customers and growers, we have been vocal in the last couple of months that, you know, number one, we're proponents of free trade generally. We think the agricultural markets are so integrated globally that free trade in agricultural markets, whether it's crop inputs, crops themselves, that's just such a critically important staple in our business that trade can flow freely. I think second, when we look at the unsustainable nature of the situation, including grower affordability on phosphates, we have made comments more recently that we would be in favor of a removal of the CVDs to create more sustainable affordability for growers.

Joel Jackson, Analyst — BMO Capital Markets

So the U.S. government's been very outspoken in recent months about fertilizer and crop input industries in this administration. Do you think the U.S. government could create conditions to improve green-filled nitrogen ROI?

Chuck Magro, CEO

You know, what I can comment on would be that through this whole situation in the Middle East and even prior to that, I mean, we've had really constructive discussions with policymakers in the U.S., in Canada. We do that in the markets that we operate across the world. I think, one, to create understanding and education, and two, to talk about the solutions that are out there. You know, we've heard a variety of potential solutions talked about by the administration. And, you know, we're part of what we would consider to be really constructive discussions on how the industry works, how economics in the industry works, you know, how growers think about the market, how we think about the market. So we'll continue to do that. So it's difficult to speculate at this point on what might be possible. But, you know, clearly with the situation in the Middle East, which has cut off trade from a critical part of the world for these key commodities, there's a lot of discussion about the ramifications of that right now.

Joel Jackson, Analyst — BMO Capital Markets

Let's have a fun question. So, like, with the government out there talking, there's so much noise out there. Oh, you know, especially with potash being a bit of a political commodity now because it's going on with the USMCA. But, oh, the government could take a stake in a Belarusian potash acid. Oh, the government could invest in Janssen phase two. Oh, all these things. Like, how do you think about all of these, you know, interesting theories out there?

Chuck Magro, CEO

Yeah, I mean, really difficult to comment on them. I mean, I think you see things come and go in the news cycle. I mean, at the end of the day, it sounds cliche, but what we can focus on is running our business, you know, and looking at the factors around us. So for us, it continues to be the story of looking inwards, doing the best possible job we can of running the assets reliably, producing crop nutrients, serving customers, continuing to rationalize the portfolio, reduce costs, be disciplined with capital. And so, you know, you focus on the things that you can focus on. And I think that's what we're doing.

Joel Jackson, Analyst — BMO Capital Markets

One of the things I want to ask you to back on FOSFIT is we've seen the Moroccans who are at this conference curtail production in Q2 because of sulfur. or we saw Mosaic announce the other day they were going to curtail production in Louisiana and Florida, a bit of Barton in Florida, a bit in Brazil about because of sulfur. You guys have not done that yet in Florida, North Carolina. Is that, you've talked about being unworkable. Why haven't you yet done what peers have done?

Chuck Magro, CEO

Yeah, I mean, we continue to run the business as efficiently as we can. I think one of the boosts we had in the first part of the year here is we had some production challenges last year. So on a year-over-year basis, we've actually seen reliability improve in the first quarter we had production by up by about 20 percent in the phosphate business this is a really difficult situation we have not taken down any production we continue to try to serve customers but it is a very difficult situation right now economically in phosphate and so we continue to look at all the levers that we have to optimize the business inside of the company reduce our cost structure try to find efficiencies in how we're procuring, but it is very difficult right now.

Joel Jackson, Analyst — BMO Capital Markets

And in the minute we have left or so, what do you think is the one thing investors are missing about Neutron these days?

Chuck Magro, CEO

Look, I think, you know, for those investors that have talked to us, we've got really sophisticated shareholders and investors in capital markets. I think, you know, if I step back and I look at the things that are within our control, the levers that the company has to create value, and I look at the financial situation we're in, one, we've got a very strong balance sheet. to when we look at really any foreseeable environment in front of us we believe that we'll generate significant free cash flow and enough free cash flow to fund all of our capital priorities enough free cash flow to clearly pay the dividend and continue to support and grow our rateable share repurchase program over time and do that in a way that adds value for a shareholder by growing free cash flow per share over time and so I do believe our investors in the sell side really understand that obviously the dynamic that's played out with the Middle East has created a lot of volatility in capital markets and so you know when I when I look at you know say last week really strong earnings consistent outlook great execution against the business no change in capital priorities and and we see a reaction like we did in the capital markets you know I always sort of joke if you see the stock go down and it's your fault there's a lot of look in the mirror moments on that if you see the stock go down and you don't understand it you buy the stock and I know Chris and I both bought the stock on Friday that's all public in filings but we believe in in the future and the ability to grow shareholder value in the Thanks guys.