CF Industries Holdings Inc (CF) — Q4 2025 Earnings Call Transcript

Thanks, Martin, and good morning, everyone. Yesterday afternoon, we posted results for the full year 2025, in which we generated adjusted EBITDA of approximately $2.9 billion. These strong results reflect outstanding operational performance by the CF Industries team, the enduring advantages of our manufacturing and distribution network and constructive global nitrogen industry dynamics that have persisted into 2026. Starting with safety, our full year recordable incident rate was 0.26 incidents per 200,000 hours worked, and we experienced our lowest ever number of process safety events. This enabled us to produce 10.1 million tons of gross ammonia in 2025, which represents a 97% utilization rate. However, that performance is tempered by the incident at the Yazoo City Complex in Mississippi experienced in November. While there are no significant injuries, this event is a reminder of why we emphasize individual and process safety every day across our entire network. We do not expect the Yazoo City Complex to resume production until the fourth quarter of 2026 at the earliest, given the long lead times required to fabricate and deliver certain equipment. As a result, we expect our network to produce approximately 9.5 million tons of gross ammonia in 2026. Turning to Blue Point, our joint venture with JERA and Mitsui, the project has progressed well from positive FID in April through hitting all our planned milestones by the end of the year. This included our partner securing offtake from new low-carbon ammonia demand sources and receiving contract for difference awards from the Japanese government. We expect to begin civil work at the Blue Point site in the second quarter of 2026. Finally, we continue to efficiently convert adjusted EBITDA to free cash flow at a rate outpacing material and industrial sector averages, as you can see on Slide 10. Net cash from operations in 2025 was $2.75 billion, and free cash flow was approximately $1.8 billion. We returned $1.7 billion to shareholders in 2025. This included deploying over $1.3 billion to repurchase 16.6 million shares, approximately 10% of the outstanding shares at the beginning of the year. Given our high-performing, high-margin business, progress on strategic initiatives, and what we believe are constructive global nitrogen industry dynamics ahead, we expect to continue to generate substantial free cash flow. As a result, we remain firmly committed to our capital allocation framework, investing in the business for growth and returning capital to long-term shareholders. With that, I'll turn it over to Bert to discuss the global nitrogen market environment. Bert?

Thanks, Chris. For the last 12 to 18 months, we had expected the global nitrogen market to be more balanced in this timeframe as new capacity was slated to come online with significant tightening through the end of the decade to follow. However, the global nitrogen market remains tighter than expected. New capacity has been delayed, global production has not maintained historical levels, and demand continues to grow. Nowhere is this more apparent than in our indicative global urea cost curve, which we share on Slide 13. Global urea prices are currently trading well above even the high end of the cost range. Strong demand led by India, Brazil, and North America, as well as European buyers securing volumes before the EU's carbon border adjustment mechanism was implemented, has pushed demand to the right. At the same time, supply is constrained by natural gas availability in Trinidad and Iran, challenging production economics in Europe, and the end of seasonal Chinese urea exports in 2025. Additionally, geopolitical concerns for the Middle East loom over the market. Through the first half of this year, we do not see many catalysts that would move prices toward the cost curve floor levels. India's February urea tender is atypical for this time of year, suggesting demand continues to meaningfully outstrip lower-than-expected domestic production. CF Industries had a very strong Fall 2025 ammonia application season in North America as we positioned supply well, enabling farmers to capture good value per nitrogen unit from ammonia. This, along with continued strong global corn demand, suggests to us that 2026 will be another year of high planted corn acres domestically, helping support nitrogen demand. From a supply perspective, we believe global nitrogen channel inventories are lower than historical averages. Chinese urea exports are also unlikely to return until the end of the Northern Hemisphere spring application season. However, we do expect that new North American ammonia capacity, should it come online at full rates, will affect prices for globally traded ammonia, but will not impact tightness for urea or UAN. As a result, we expect the global nitrogen market to remain constructive in the near term. At the same time, interest in low-carbon ammonia and low-carbon nitrogen products continues to grow, both for tonnes from our Donaldsonville Complex and for our portion of Blue Point volumes. In the near term, global customers have demonstrated a willingness to pay a premium for low-carbon ammonia given the benefits for their sustainability goals. We also expect demand to continue to grow from customers in Europe and Africa, seeking to reduce additional costs from EU regulations on carbon. We're also excited about the progress we're making domestically as we work with domestic retailers and end users of ag and industrial products to lower carbon footprint of their value chain. Most significantly, we have advanced our pilot project with POET, the world's largest producer of biofuels, and with retailers in the U.S. to enable the production of low-carbon ethanol. We expect the project will be a model for building a low-carbon ammonia and nitrogen fertilizer supply chain in the U.S. and in North America. With that, I'll turn it over to Rich.

Thanks, Bert, and good morning, everyone. For the full year 2025, the company reported net earnings attributable to common stockholders of approximately $1.5 billion or $8.97 per diluted share. EBITDA was approximately $2.8 billion, and adjusted EBITDA was approximately $2.9 billion. For the fourth quarter of 2025, we reported net earnings attributable to common stockholders of $404 million, or $2.59 per diluted share. EBITDA for the quarter was $731 million and adjusted EBITDA was $821 million. For the fourth quarter, we recorded two impairment charges totaling $76 million, of which $51 million was related to the electrolyzer pilot project at the Donaldsonville Complex in Louisiana. We made the decision not to continue to invest in this pilot project given its return profile. We also recorded a $25 million impairment charge related to the incident at Yazoo City that Chris mentioned earlier. We satisfied the business interruption insurance deductible in December and expect to begin receiving insurance proceeds based on lost profitability during 2026. During the fourth quarter of 2025, we also completed a $1 billion senior notes offering. We did this both to refinance $750 million in debt that was coming due in December 2026 and to further strengthen our financial flexibility. Looking ahead, we expect capital expenditures in 2026 to total approximately $1.3 billion on a consolidated basis. CF Industries' portion of this is approximately $950 million, which includes $550 million for sustaining CapEx for our existing network, plus approximately $400 million relating to both the Blue Point joint venture and the common infrastructure we are building. Finally, we repurchased 4.1 million shares for $340 million in the fourth quarter. These repurchases completed our $3 billion share repurchase program, which was authorized in 2022. After this was completed, we commenced our $2 billion program, which was authorized by our Board in 2025. Approximately $1.7 billion remains on the 2025 program, which expires in December 2029. With that, Chris will provide some closing remarks before we open the call to Q&A.

Thanks, Rich. First and foremost, I want to thank CF Industries employees for their contributions to our success in 2025. They delivered fantastic results in the midst of the tumultuous global nitrogen market and did so with a focus on safety. We're extremely proud of what our 2,900 employees can accomplish when moving in the same direction toward shared goals. 2025 showed how much we can do. From operational excellence and positive FID for Blue Point to completing two major decarbonization projects and securing our first low-carbon ammonia sales for our premium. This level of execution is not a one-year story, but rather has been consistently delivered over time. This, along with our operational advantages and structural advantages, where we operate, underpins our ability to invest in growth and return capital. This, in turn, increases long-term shareholder participation in our underlying assets and the free cash flow they generate. As you can see on Slide 9, we have increased nitrogen participation per share by over 35% in just the last five years. Given our strong core business, strategic growth initiatives in our near, medium, and long-term outlook for tightening global nitrogen market, we believe we are well positioned to build on this track record and continue to create substantial value for long-term shareholders. With that, operator, we'll now open the call to questions.

I wanted to ask about the pace of spending at the Blue Point project; it seems some of the projects may have been delayed, so could you discuss that?

Andrew, I think there might have been a bit of a connection issue, but I believe your question was about the details on Slide 15 regarding the capital costs associated with the Blue Point project. The overall spending forecast for Blue Point remains unchanged at $3.7 billion. As we progress with a project of this magnitude, especially as we start ordering long lead items and working with modular contractors, we gain better insight into both the costs, which have not shifted, and the timing of those costs. Therefore, we thought it would be beneficial to update the cash outflow projections for the next five years. The key point on Slide 15 is the bottom line that outlines our annual cash outflow as a company. With our robust free cash flow generation of $1.8 billion last year and $1.5 billion the year before, the level of capital expenditures each year is not something we feel will impact our other capital allocation strategies. This aligns with our approach to managing this growth platform, where we structured our investment to hold a 40% interest, allowing us to strategically handle additional growth projects while also returning cash to our shareholders.

Okay. Great. And then maybe just a little bit more on Blue Point here. I recall there being quite a lot of room for expansion nearby on that site. CF is obviously building themselves, some of the logistics and infrastructure there potentially to handle more volumes in the future. And so I know it's still early days here, but if we're thinking longer term, like 5, 10 years from now, does it make sense that we'll see a larger complex there? And is there a timing where it's more efficient to move to the second site? How should we think about that?

Yes. So initially here, I would say our focus is on the first site. But you're right, the common infrastructure we're building, there'll be synergies where if we were to build a second plant, we wouldn't have near the level of expense that we would have for this first site. And the site itself that we purchased could hold up to 5 ammonia plants world scale the size of this one, 1.5 million metric tons. So it is an organic growth platform that we're looking at here. What the timing is for when we move into a second site, I'm not certain that we know that just yet. There are some questions that we want to answer as we get into these module yards. But I think as we look at the long-term dynamics of the nitrogen market, there's just not enough new supply coming on to meet demand. So as we see that going forward, we do think there will be a tightening in the supply and demand that will provide other organic opportunities for us, but nothing to mention right now.

I want to talk to you about CBAM; obviously, a lot in the news on CBAM. So what I want to ask you about is, it's a different scenario. If CBAM for fertilizers goes as it is, if there's some suspension on fertilizer, if you get some offsets and other cost subsidies that sort of offset it. What does that mean for your business this year? And then what does it mean for returns on Blue Point as you have modeled it in the different CBAM scenarios effects?

Yes. So maybe I'll start with CBAM, then I'll get to the implications on the business in Blue Point. So CBAM, today, while there's a lot of uncertainty around it, it's in place. And so it's happening. We are continuing to see our European customers show interest in low-carbon products and their willingness to pay a premium for it. So I think that speaks to their thoughts that it's going to maintain. I think whether CBAM stays or goes is probably more of an issue for European producers than it is for our North American centric production base. We view CBAM as one of several opportunities. Bert and his team and the clean energy team have been working on many different sales that go outside of Europe that we're receiving premiums on, some here building in the U.S., others in Asia and Africa, that we don't necessarily have everything tagged where it has to be from a CBAM standpoint. Now what I'll say is if CBAM's altered or goes away. At some point, there's going to be some type of carbon program in Europe. And us having low-carbon products, these benefits should accrue to us in that. Regarding how this is going to affect our business, I would say, as we talked about before, we did not model in any type of premium from Blue Point or even in our Donaldsonville production related to low-carbon products. So all of that is upside to our internal rate of returns on that. So when you think about the CCS project, we started online last year at Donaldsonville. We weren't looking at anything besides the 45Q benefit that we would get from that. Now we're realizing that we're able to sell that at a premium. So that's building on that. And similar with Blue Point, our analysis was without looking at any type of product premium.

Okay. And then second question. On Yazoo City, when the plant starts, hopefully, at the end of the year, will it look the same as it did before? Will the mix be the same? And maybe if you can just elaborate a little bit more on, is there specifically for equipment that you really need to get in that, that's the manufacturing schedule that you have to hit to get in Q4?

Yes. Just to remind everyone about the Yazoo plant, the incident occurred in the ammonium nitrate section, but the site also has an ammonia plant, a urea liquor plant, and nitric acid plants, all of which remain unaffected. However, the site isn't set up to move significant amounts of net ammonia if the upgrades are not functioning, which is why the entire plant is currently offline. Our goal is to rebuild the ammonium nitrate plant. It's too early to make any conclusions on various aspects, but we aim to get the plant operational as soon as possible. The timeframe we've provided for late Q4 in 2026 is based on acquiring switchgear and other electrical components, which have longer lead times. Those are the dates we've been given for delivery. If we receive them sooner, that would be great. For this specific topic regarding Yazoo City, I'll let Rich discuss some of the economic aspects for 2026.

Yes. Thanks, Chris. Joel, in terms of the economics, the full year EBITDA impact of not running the Yazoo City Complex, is it going to be in the $200 million range. And again, that's an EBITDA number. But I also want to highlight, we mentioned in our prepared remarks that we have business interruption insurance for the site. And so we are working with our insurance carriers. We're pulling together all of those claims, and we would expect to be receiving those business interruption proceeds during 2026. Our goal is to see if we can offset most or all of that kind of loss with the insurance proceeds because that's the program that we have. I'll also mention that the timing of those insurance proceeds is going to be a little bumpy, because we will record those as they come into the company, but that's the impact.

Just wanted to kind of get a little more commentary around the current tightness in the market. And you've laid this out as '25 was expected to be not as tight and then it was actually tightest towards the end of it, and we saw this because you guys doing almost $3 billion in EBITDA versus the $2.5 billion that you talked about kind of on the current mid-cycle. So as we look into 2026 and some of the drivers that you think can take you towards the mid-cycle of $3 billion, some of them might come already in 2026. So how should we think about, a, the market and b, some of these drivers over more EBITDA generation, the tax credits, et cetera, as we move through 2026, considering the $200 million miss on Yazoo related that you just mentioned?

Ben, this is Bert. Regarding 2025, the global market is evolving in interesting ways. Our involvement in the global market means that various issues affect different regions. For example, the Middle East conflict has halted production in Iran and Egypt, while demand in India has been significantly higher than anticipated, nearly reaching $10 million instead of the expected $6 million. Additionally, Brazil is experiencing increased demand, and Europe faces production challenges due to high gas prices, resulting in the need for more imports. In the U.S., planting 98 million acres of corn indicates that we will need more tons to meet this demand, even with lower inventory levels entering fertilizer year 2026. The combination of tight supply and strong demand has led to unexpected market levels, a trend we expect to continue into 2026. The USDA estimates 93 million acres of corn will be planted, and the industry might predict higher numbers. Over the last decade, we've consistently seen increased corn acreage leading to higher demand. India has announced a current tender, with numbers expected to be revealed soon. Globally, we are witnessing increased imports due to high gas prices in Europe and related regulatory challenges. Overall, we anticipate robust demand and potentially limited supply. Currently, NOLA urea pricing stands at $450 per short ton, a $100 increase from December 2025. The dynamics in North America, where most of our production is, are notably positive. We also see favorable gas market conditions, currently around $3 in the forward market. We expect the first half of 2026 to face supply challenges amid high demand.

Yes, Ben, and I think you framed it nicely when you talked about 2025—that we thought would be balanced, same thing with '26. And as Bert just mentioned, '25 came out with $2.9 billion in EBITDA and the first half of '26 certainly looks very strong here. And all of that is sort of bridging those years to where the market gets what I think is going to be even tighter given the lack of new supply coming on, setting us up for when Blue Point does come on the market. And that's why in our commentary, we said we see the near, medium, and long-term nitrogen dynamics very strong because we've bridged kind of a little bit of that time frame where we thought we'd be balanced during this, and it's actually tighter. Related to the tax credit piece for next year, we will have a full year of the carbon capture and sequestration unit operating at Donaldsonville. Last year, we did about 700,000 tons we had sequestered. This year, it will be just under 1.5 million tons that will be sequestered. And that number is really based on just the amount of process CO2 we have remaining after we do upgrades and with the plant turnaround schedules with ammonia plants being down. So we're going to max out the most we can sequester during that particular time frame. And right now, we're thinking that's around 1.5 million tons for 2026.

Yes, I just had a quick question on CBAM, again. So if it goes away, does that make it difficult or maybe impossible to get a premium price for Blue Point? And if it stays, then there's a good chance to get a premium for Blue Point? And then just curious about what you're all hearing in terms of timing when we'll find out on a decision for that by the EU.

Yes. So with CBAM, I mean, I think it's more complicated than just whether CBAM stays or not, because you have the whole ETS scheme over there that gives free allowances that are beginning to stop. Does that continue where they don't receive those free allowances, which then would basically push European producer cost even higher without CBAM? And I think on the premium side, I'll let Bert comment on this a little bit more, but I think it goes beyond what we're hearing from European customers about buying low-carbon products when it comes to the premium.

The premiums in place; we have contracts in place for 2026 in demand for more. So we are constructive. We continue to have further dialogue. I agree with Chris that this is set in motion, CBAM that is in carbon pricing. This is a train that has left the station, I believe. And so how that transpires to CBAM and our premiums, we're constructive. And we're even seeing that now across the globe with industrial customers and agricultural customers desiring low-carbon products. So I don't see that decreasing at all.

Got it. And then just one quick follow-up. Given the dynamics you shared for nitrogen this year, is your bias that pricing kind of stays at this level and may the biases potentially go up from here? Or how do you sort of see the scenarios for potential pricing there?

Yes. I'm never biased. I'm just correct. I think that because this is a global market, and you have so many different dynamics driving the world price structure with different producers and different localities producing this product that don't consume it. And you have some very gigantic producing places like China that are sometimes in and sometimes out of the market. And then you couple that with 3 to 4 months of demand in North America of actually using this product in 6 to 7 months of inventory build. And so you have to be a student of the market and follow these things. And we had an opinion coming out of Q4 or in Q4 that because of the supply-demand dynamics I had explained earlier, we were on an uptick of pricing, a positive uptick in pricing, and that has transpired. How much further it goes. There's all kinds of expectations in the market today. I think there is still room to go, especially in North America. But I do think there will be a correction in the back half of the year like there always is as we move from the Northern Hemisphere to the Southern Hemisphere of planting.

Carbon opportunities and maybe double-click on the agreement with POET for the low-carbon fertilizers. Just given some of the proposed changes in the 45V guidelines, practice changes, I'm wondering how you're thinking about low-CI fertilizer demand opportunity domestically and if those 45V tax credits maybe help improve the unit economics or pricing premium that you're seeing here in the U.S.

Yes. We didn't fully address the first part of your question, which is about low carbon in the agriculture sector and the future demand for that product. Our partnership with POET is promising, as they are a leading company in biofuels. We are also in discussions with additional ethanol producers. The focus is on the core value chain and how to produce low-carbon corn using low-carbon fertilizer, which we provide and have an ample supply for our customers. We are in the process of developing this. As we move that low-carbon product through the value chain and as ethanol plants reduce their carbon emissions, there is a significant opportunity for both domestic and export demand for ethanol from the United States. We are uniquely positioned to meet that demand in terms of gasoline blends worldwide. Additionally, for low-carbon or low CI score fertilizer, we are engaging in conversations and noticing demand from the retail sector, driven by consumer packaged goods companies and other food producers as they pursue their sustainability objectives and address Scope 3 emissions.

Yes. And I think anything related to the 45V is just going to be an upside to us. As Bert mentioned, he's hearing enough activity even though at this particular point, low carbon fertilizer is not recognized in the 45V now, that is up for comment right now as the USDA is defining what are those qualifying activities, and you would think low-carbon fertilizer, which would be an attractive pathway as it's very easy to verify what is the carbon score of that. So we're hopeful that gets included. But as Bert mentioned, he's already getting interest in that, even with it not being included in the 45V just yet.

My follow-up question is about the modeling. Can you remind us about your operating costs in 2026? You mentioned a $200 million EBITDA headwind from Yazoo City. I assume there are some stranded or overhead costs that won't be recoverable through the BI insurance, so I'd like your insights on operating costs and any potential turnaround we should consider for 2026.

Yes. In terms of the BI, our hope is that virtually all of those costs are going to be recovered through BI. We're not expecting anything major outside of it. And as we go through the rest of the year, our turnaround schedule, I think, is projected to be pretty normal in terms of what we would normally expect. So I don't really have anything I want to highlight.

I have a quick question that encompasses several topics. Bert, referring back to some of your earlier points, how do you view the flexibility of the order book this year? Farmers are starting to receive deferred direct payments, and you're anticipating updates. You've also mentioned situations in India, Iran, Trinidad, and Texas capacity, which seem to add complexity compared to previous years, particularly when looking back to 2022. How is your team approaching this? Are you planning to maintain some flexibility as we head into spring, or are you satisfied with current price levels?

Yes. Overall, we are satisfied with our order book. As I mentioned earlier, we intentionally carried some inventory into 2026 due to the current dynamics. We just concluded the TFI meetings in Orlando with all our major customers, and the consensus is that we are entering a logistics phase. Despite the favorable weather, with warm conditions already prompting applications in Texas, Kansas, Oklahoma, and Nebraska, this trend may become even more pronounced, potentially mirroring what we saw in early spring of 2012. Whether that occurs or if conditions are more typical, we anticipate increasing demand for products, especially given the challenges on the river due to low water levels and what we believe to be shortages in the upper Midwest. Additionally, there have been several plant issues in Canada, and downtime from a winter storm in January has contributed to lower product availability. With approximately 93 million to 95 million acres of corn, our focus is on execution. We are identifying where products need to be delivered, tracking orders at our terminals and plants, and maintaining communication with our customers regarding their requirements. We are also coordinating with freight providers, including railroads and barge companies, to ensure timely movement of products. Our priority is effective execution moving forward.

There’s been some discussion about CBAM, but shifting focus to the east, Japan is actually making progress. As of December, there have been certifications related to a $20 billion hydrogen hub. Many consumers and potential partners have lost supply agreements due to three project cancellations, one long-term deferral, and one blue ammonia facility that is uncertain for the next six months. While Europe is receiving a lot of attention, do you think the market is overlooking something significant that is still happening in Japan?

Yes. I think it's an excellent point, Chris. I mean, as we mentioned, every one years ago thought that there was just going to be this big wave of low-carbon supply coming online. And we had said, it's easy to announce a project, it's difficult to execute on it. And so, as you mentioned, a lot of those projects have fallen off. Now what we're continuing to see is a lot of interest in low carbon. And I think the JERA, Mitsui, and others over there are the leaders in this. I think more importantly, it's not only the low carbon aspect of it but for a new demand source. And that's something that when you look at the Medi agreement and what they were able to do with the contract for difference, their 60% of this new plant is going to a new demand source that didn't exist a year ago. And so we're optimistic that we continue to build out on that along with continuing to see additional demand growth in the legacy agricultural business of sort of that 1% to 2% a year. And all those factors are why we are suggesting that longer-term, not enough supply coming on, new demand centers coming on and then just the regular legacy growth that we're going to have a very tight market when Blue Point does come up.

I wanted to revisit the difference between the pricing outlook and the cost curve. We've had strong pricing at the start of the year, and while costs have increased slightly, not by much. The premium is expected to widen. As we look ahead, the energy futures curve is trending lower, settling in the $7 to $8.50 range later in the decade. I'm interested in your perspective on how this aligns with your forecast of ongoing market shortages on the supply side. Does this situation need to adjust in some way, or do you anticipate it will continue through this year and into the medium term?

Yes. I'll begin by addressing the gas differential you mentioned. Currently, it stands at approximately $7 to $8 per MMBtu delta. We anticipate that it will somewhat align with Henry Hub prices, although we don't believe it will disappear or level out to a point where we aren’t economically competitive. There's also the aspect of supply and demand we've been discussing. While we acknowledge the costs involved, we must invest in new capital to meet the growing demand. This growth, even without factoring in clean energy, will push the demand curve further to the right, necessitating either higher-cost production than what we currently have or the construction of new plants. Our existing plants alone have capital costs of $3.7 billion, which are on the rise. With increased costs, there will be expectations for returns. Therefore, we foresee the natural gas differential continuing, along with a rising demand impacting the cost curve and new plants required to support these shifts, or else higher-cost production will need to be maintained.

And that does not take into account the dynamic situations happening globally regarding energy and energy shortages in certain areas like Trinidad, as well as the high energy costs in Europe, along with some operations functioning at 80% capacity or less, alongside other specific locations facing limited production. Brazil is set to revive its plants that have not been operational in recent years. Therefore, while supply remains limited, we observe that demand continues to increase, but supply is also being reduced in other regions, creating a very strong structural market, as Chris explained.

All right. And then I guess just maybe a bit of a short-term question on the Middle East tensions with Iran. So I mean, they're about 10% of the global urea export markets. I guess, how would you see the market dealing with any disruption to production there and the impact on pricing? And I guess how would that sort of need to flow through from a timing perspective in terms of, I guess, disruption to the shipments before it's really starting to have an impact and how long it would be down?

Yes. If you look at the Middle East and the suppliers that are located there, the producers are in Iran, Oman, Qatar, Saudi Arabia, and UAE for urea; that's about 20 million tons. So in a globally traded ocean-going ton, that's about 35% of the world's supply that goes through the Strait of Hormuz or close to it. However, you also have to look at ammonia, where those same countries referenced are about 5 million tons or also 30% of the globally traded ammonia ton. And so if something were to happen, the constraining factor to supply would be pronounced. As well as LNG, about 25% of the world's LNG also transit through that the Strait. So if conflict were to occur, it would be, I would think, even more difficult or more challenging than the current situation in Russia and Ukraine and moving out of the Black Sea.

This is Justin Pellegrino on for Vincent. Thank you for all the commentary on where prices and market commentary are headed over the last few weeks. But I wanted to step back and go back to Blue Point for a second. You mentioned earlier in the call that as you kind of started going through the process, permitting or whatever, that the timeline may have shifted around a little bit. And I was just curious, where have the pressure points been as you started to go through the process, whether that be tariffs, labor, whatever it may be? And then can you kind of just flag anything that we should be watching as that project starts to progress through the stages and anything else that's worth talking about there?

Yes. Thanks, Justin. The timing really hasn't shifted at all. So our expectation is still in 2029, the plant will come on. By timing, I mean timing of payments. In which case, as you get closer into these larger projects and you're actually talking to whether it be the modular yards to civil contractors, you've engaged different things like that, you have a better idea of when those payments would be going out. So, nothing's changed from our timeline on the particular project. I think as far as milestones go, as I mentioned, we've pretty much achieved the milestones that we have in place where the next big ones would be the Air permit and Army Corps permit as we look to build the heavy haul bridge that will bring the modules over. Additionally, as we start to do some of the civil work, which our expectation is here in the next couple of months, we'll start moving ground, driving piles. We've already driven test piles. So I think right now, there isn't much of these milestones other than the permitting process, which, like I said, our expectation is that we will have that going here in the next couple of months. The other part that I should mention is of our $3.7 billion in total capital spend, we still have about $500 million of that, that is built in as contingency. So not knowing really where tariffs are going to fall out based on Supreme Court and also that a lot of this lead-time stuff doesn't come for 3 years, but we do have a sizable contingency built into this particular project.

Just one quick one for me. We've had some affordability issues with phosphate. And of course, you don't produce that, but you know what's going on there. And with urea prices moving higher, like any concerns about affordability in nitrogen, like is it better to be as affordable as possible just to prevent a bunch of issues, or the market will just determine where nitrogen lands on the affordability spectrum, and we just have to deal with it?

Yes, Edlain, you raised an important point. The farmer plays a crucial role in the value chain by planting, harvesting, and storing crops before any payouts occur. We study the dynamics for major crops like corn, soybeans, wheat, cotton, and sugar in North America to understand their economics. However, we operate in a global market where products move freely across regions, including from the Middle East to North America, and from North America to Europe, as well as between Russia and the United States. We're mindful of this movement and are assessing its implications on returns based on variable and total costs. The financial support from Washington has been beneficial for balancing payments. However, I'm aware there are credit challenges in certain parts of the United States, which retailers are managing as they close their fiscal year. We are paying attention to these issues and are committed to finding solutions for farmers in the U.S. and Canada.

I wanted to ask about Brazil and the plants that are being restarted. I understand these are not your facilities, so companies may be hesitant to discuss them. However, there is around 1 million tons of urea in that production, which was supposed to start up in the latter part of last year. You seem to be indicating that Brazilian urea imports will remain flat year-over-year. Is there an expectation for growth, or are you considering those plants as non-contributors? Will the ramp-up take too long, potentially offsetting demand? I'm curious about your perspective on this and how the recommissioning of plants may be affecting supply.

Brazil has experienced significant growth in urea consumption over the past 25 years, particularly in imports, positioning it as a key driver of global demand. Historically, imports ranged from about 2 to 2.5 million tons, but now they approach nearly 8 million tons, alongside ammonium sulfate imports also around 8 million tons. The total nitrogen product entering Brazil has substantially increased, while ammonium nitrate imports have remained fairly stable. However, many production plants in the country are not optimally located, especially those in the north, leading to operational challenges due to inefficiencies and high logistics costs for transporting products to areas of high demand. Brazil's agricultural sector continues to expand, particularly with the viability of double cropping. There are prospects for revitalizing construction on previously halted projects from 10 to 15 years ago. While Brazil has potential, the key challenge remains the lack of sufficient natural gas for these facilities. The Lula government and Petrobras are focused on investments to support local farmers, but Brazil will likely continue to rely significantly on imports and remain a vital player in global urea and nitrogen demand.

I am somewhat skeptical about the urea supply situation in Brazil, based on my manufacturing experience. The cost of restarting plants that have been inactive for years, likely due to their prolonged downtime, will be significant. There are concerns regarding the initial capital investment required and the efficiency of these plants once they are operational. Therefore, I prefer to wait and see how things unfold with these facilities.

I just wanted to ask on your assumption of a 4 million to 6 million tonne export quota from China in 2026. That's pretty much flat year-on-year versus what they did in 2025. And my understanding is they've got 4 million tonnes of additional capacity coming online at some point through the year, and I think inventories are still quite high. So I've been penciling in a little bit more than 6 million, like 6 million, 7 million tonnes. Just curious to hear your thoughts on that.

I think that's possible. I think we've seen a different China in most years from the hey days of their export activity in 2015, '16, '17 to really pulling that back and recognizing the economic and political benefit of exporting that urea is fairly de minimis. But keeping that product in the country for the Chinese farmers and the growth of Chinese production has been important to them. So I think there is a differential between the domestic price and the international opportunity, and last year you're correct, it was around 5 million tons of exports. And we're penciling in. We're being conservative to say that, that maybe something that the government is initiating. But if you take their capacity and run it at an 80% plus or minus run rate, they really don't have that much to export, and that's about the run rate they've been running over the last several years. So I would say your number might be a little high, but we'll have to have a coffee over that number at the end of the year.