Mosaic Company (MOS) — Q3 2022 Earnings Call Transcript

Thank you and welcome to our third quarter 2022 earnings call. Opening comments will be provided by Joc O’Rourke, President and Chief Executive Officer, followed by a fireside chat, then open Q&A. Clint Freeland, Senior Vice President and Chief Financial Officer; and Jenny Wang, Senior Vice President, Global Strategic Marketing, will also be available to answer your questions. We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management’s beliefs and expectations as of today’s date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published yesterday and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now, I’d like to turn the call over to Joc.

Good morning. Thank you for joining our third quarter 2022 earnings call. Mosaic delivered record third quarter revenues of $5.3 billion, which resulted in net income of $842 million or earnings per share of $2.42. Adjusted earnings per share was $3.22, and adjusted EBITDA was $1.7 billion. These results are driving significant cash flow generation, which is allowing us to return significant capital to shareholders while also continuing to invest in the business and strengthen the balance sheet. During the quarter, we returned roughly $670 million to shareholders, including $600 million of share buybacks. Now, before diving into our operations, I’d like to address current market dynamics. Food security remains a concern around the world. Global grain and oilseed stock-to-use ratios remain at 20-year lows, and early data continues to suggest there may be further downside to total production once the fall harvest is complete. It is important to remember that the market was tight when the year began, well before the start of the war, and issues over the last several months have further exacerbated the situation. Ukraine’s production shortfall is significant, but weather issues like high temperatures and drought conditions in other major growing regions are having an even bigger impact on an already tight market. In the U.S., weather delayed spring planting, and the compressed planting window reduced nutrient applications. The growing season was further impacted by high temperatures and drought in some areas. Weather tends to be a significant factor in yield, but under-fertilization doesn’t help, and you can only mine the soil for so long. Both are contributing to an expectation of weaker-than-normal North American harvest. And this was reflected in the most recent USDA yield forecast. In Brazil, fertilizer shipments appear poised to have dropped around 10% year-over-year. And La Niña remains a threat despite the market counting on record-breaking corn and soybean production. Beyond grains and oilseeds, we’re seeing food security issues play out in other crops as well. Staples like rice are also seeing significant production shortages, driving some countries like India to restrict exports. Because of this, we see a tight market for global grains and oilseeds continuing into 2023 and beyond. The global fertilizer market remains tight with supply constraints in both potash and phosphate still unresolved. Global potash supply remains impacted by the significant reduction in Belarusian exports, which we think will be down 8 million tons in 2022. Of the 4 million tons they will export this year, we estimate about 2 million tons were shipped in the first quarter before the sanctions and Lithuania’s decision to prevent Belarus from using its ports. Belarus exports are down significantly from the first quarter, and we do not expect much recovery through the rest of the year or for most of 2023. This means the market will continue to be short of potash in 2023. The phosphate market is also impacted by supply constraints. China production is down because of environmental concerns, and exports are being restricted to ensure domestic availability and affordability. This year, we expect China’s phosphate exports will be down by up to 5 million tons. Those restrictions could extend through at least the first half of 2023 and possibly beyond as China prioritizes securing domestic food supply and meeting growing industrial demand. While global channel inventories of phosphate and potash remain below historic norms, certain regions, especially in the areas where we do most of our business, saw inventories build in the first half of the year. But prices have retreated back to levels low enough to entice growers to step back into the market. We expect inventories to continue working lower through the end of the year and into early 2023. U.S. fall application has been trending back towards normal levels. We believe we could end the season with inventory significantly depleted, especially for phosphates. The U.S. is also experiencing low water levels on the Mississippi River, which is delaying supply coming through New Orleans. In Brazil, the higher-priced inventory built during the first half of the year has slowed third quarter shipments, but sentiment is improving. Prices have retreated enough to encourage sales, and we expect inventories will end the year much the same as where they started. The barter ratio suggests we’re approaching a much more constructive environment for demand. In India, importers are taking advantage of the price pullback in phosphates. India’s phosphates inventory is still low, while farmer demand remains strong. Government subsidies remain at a level that is supportive of phosphate imports but are likely to leave the country short of adequate supply of potash. To summarize, the strength of crop prices and more affordable fertilizer prices suggest nutrient demand will recover from the summer lull we experienced during the third quarter. Given the constructive ag backdrop, we believe our business is well positioned to benefit. In our phosphates business, Hurricane Ian forced us to shut down operations late in the third quarter, which delayed shipments at the end of September. Our team performed admirably and was able to get our Florida operations back up and running quickly following the hurricane. We estimate the shortfall in production to be in the range of 200,000 tons. Looking forward, we now expect fourth quarter sales to be in the range of 1.7 million to 2 million tons. Our phosphate business is expected to benefit from lower raw material prices in the fourth quarter, particularly as low sulfur prices start flowing through our costs. We expect a fourth quarter benefit of $40 to $45 per ton from lower raw materials in our North American phosphate business over the cost in the third quarter. In our potash business, we are realizing the benefits of improved volumes from Esterhazy and from the addition of Colonsay. 11 of the 13 planned miners are now running at Esterhazy, and improved operating rates at Colonsay together are driving higher volumes. We anticipate some turnarounds during the fourth quarter that will impact total production but expect sales volumes to be 2 million to 2.2 million tons. Mosaic Fertilizantes continues to be a very good business, having earned $1.2 billion in EBITDA over the last 12 months. High inventories built during the second quarter led to slower than initially expected demand during the third quarter as shipments typically seen during quarter three didn’t materialize. But pricing trends towards the end of the third quarter reached a level that is beginning to drive shipments, and we’ve begun seeing that in our business. Some of the third quarter buyer hesitancy is impacting the fourth quarter, but we expect trends to begin normalizing as we finish out the year. Before moving on, I’d like to address the next iteration of our transformation process. Over the last three years, we’ve extracted significant cost efficiencies in Brazil, lowered our cost profile in the potash business with the transition to Esterhazy K3 and benefited from the combination of support functions across North America. Our next area of focus is the realization of efficiencies through a digital transformation of how we manage our business. In our release last night, we introduced our global digital acceleration project, an initiative that will transform how we use data to manage a complex business across our global footprint. This effort will upgrade our core systems and allow for more seamless integration across sales, production, supply chain and global support functions. Over the next several years, the total cost will be about $200 million to $250 million, split roughly evenly between SG&A and capital expenditures. As a result of this transformation, we expect to realize significant benefits in our sales and production planning and our cost and capital management. Similar to our early transformation efforts, this initiative will continue the trend of adding shareholder value. We expect this investment will have a payback in the range of 3 to 4 years. Finally, I want to reiterate that we remain committed to our capital allocation strategy. Later this month, we expect to retire the remaining $550 million of long-term debt that completes our goal of $1 billion of long-term debt reduction. Our CapEx expenditures expectation this year remains unchanged at $1.3 billion, and all remaining free cash flow after these commitments will be returned to shareholders through dividends and share buybacks. During the quarter, we returned roughly $670 million to shareholders, which included $600 million of share repurchases. Over the last year, we have reduced our share count from approximately 380 million shares to 340 million shares. Putting all of this together, our outlook is quite strong. The global agriculture market continues to point to tight supply and demand for grains and oilseeds. We strengthened our balance sheet. Our team has recovered from Hurricane Ian in Florida. Our potash business continues to benefit from our low-cost position at Esterhazy, and the flexibility gained from restarting Colonsay. Our Brazil distribution business has a significant and growing footprint in an important agricultural market. We have positioned ourselves to maximize value across our business, and this has allowed us to return significant capital to shareholders. With that, let’s move on to the fireside chat portion of our call. Paul?

Thanks, Joc. Similar to last quarter, before we open the lines for live Q&A, we’re going to address some of the most common questions that came in last night. First, we received several questions on our general view of both the potash and phosphate markets. Where are we most optimistic? And where do we continue to see risk as we move into 2023?

Thanks, Paul. I’m going to hand this over to Jenny for some detail here, but let me summarize by saying we’re very positive on both markets as both remain supply-constrained. Ag fundamentals remain strong and fertilizer prices have moderated from the previous peak seen earlier this year, which is driving a return to more historic levels. So, Jenny, can you give us some detail?

Thanks, Joc. I’d like to start from North America. The warm and dry weather has allowed farmers to go to the field for fall applications with a wide open window. And as of today, we are still saying products are going to hit the ground. This improved farm economics and affordability has encouraged farmers to put down their phosphate and potash in the fall. In fact, we started to get customer inquiries and requests for the spring season demand. We sold a block of phosphate to one of our major customers yesterday as their customers, the farmers, have come to the table to buy product with the concern of the potential logistic issues for the spring supply and very strong cash flow the farmers are having to manage before the end of the year. So, good and normal fall applications are setting a good stage for the inventory drawdown in North America and setting a good stage for the spring season in 2023. Moving over to Brazil. The barter ratios have improved significantly with the moderation of fertilizer prices and elevated ag commodity prices. We are seeing Brazilian customers reengaging in purchases to prepare for the coming safrinha season, and the inventories are coming down. Moving over to India. The farm economics have been very strong this year with support from their government. The monsoon has also been helpful as we see demand increases, especially for phosphate. The recently announced subsidy program from the Indian government has been very supportive of phosphate input and also consumption. We are seeing steady buy-ins from Indian customers on DAP recently at $750 per ton level. With the strong demand in Q4 and getting into 2023, we continue to see the supply constraints for both phosphate and potash. On phosphate, we expect that Chinese export control will continue as we get into 2023 as the Chinese government seeks to ensure domestic supply availability and their farmers can obtain fertilizers for their food production. There’s very little new capacity coming online in phosphate production in 2023. Similarly to potash, we envision Belarus and Russia’s supply remaining constrained in 2023, and the alternatives will not be able to ramp up quickly to offset the continued constraints from that part of the world. To summarize, as you mentioned, Joc, we are very positive about both phosphate and potash as we move into 2023.

The next question is on channel inventories for both potash and phosphates. Can you provide some detail on recent channel inventory levels and what we expect for the balance of the year and early 2023?

Thanks, Paul. I’m going to hand this one straight over to Jenny. Jenny?

Sure, Joc. The inventory level in most parts of the world is pretty low. In some regions like Europe, the inventory level is really, really low given the supply situation in 2022. I probably want to provide some color on the inventory situation in North America and Brazil, where we believe most of the question is about. In North America, for both phosphate and potash, the current channel inventories are about average relative to historical norms at the same time of this year. As of yesterday, our other country warehouse capacity for phosphate has come down to 30% used. And for potash, that has come down to 50% used. This level of inventory is right at the same level as we see historically at this point in time. As we are seeing good normal fall applications, the channel inventories are expected to come down further. I also want to remind ourselves that logistics remain very challenging in North America, particularly on the river, which highlights the unique strength of Mosaic’s assets, which can serve North America by both rail and barges. Moving over to Brazil. Since the war started in the first quarter, a lot of Brazilian customers rushed to buy products from all around the world to ensure their supply. As a result of this rush buying, we are seeing a high inventory building at port in Brazil since July. That inventory at port has gradually slowed down over the last few months. By the end of October, we are noting that export inventory has come down by 35% versus the peak at the end of July. Another point I want to mention is the import shipments to Brazil. In the middle of the year, the vessels coming to Brazil had to wait over eight weeks to unload products because the ports and warehouses were so full. Now, the waiting time has come down to less than two weeks. That’s a signal. In the meantime, we are seeing re-export vessels for both potash and phosphate. With that, we believe the market has reached the bottom in Brazil.

Joc, the next question is on the status of our potash production increases, especially given what we’ve seen with recent demand and price trends. Are we committed to continuing to increase production in 2023?

Thank you, Paul. Let me start by talking about Esterhazy. Esterhazy has been a 10-year plan. In that plan, we not only brought out a new mine at K3 but fully intended to bring on an extra 1 million tons of production, which was aligned with the capacity of the K1 and K2 mills. So, as we discuss that, we’ve always seen Esterhazy as being our most efficient, lowest-cost operation. So yes, we absolutely will expand the capacity of Esterhazy’s K3 mine to meet the capacity of the mill. In terms of Colonsay, we see an immediate need for those tons as the gap in supply from Belarus has meant there’s been an opportunity for us and through Canpotex to export more product. That near-term need, we expect, will continue into 2023. So, we certainly see a need for Colonsay in the near term. Bringing that production on has been relatively inexpensive, likely in the range of $50 per capacity ton. So, on that basis, that’s paid off over a matter of months. So, how will we look at it as we go forward? We will always be focused on working towards value, not volume. As such, we will meet the needs of the market and no more.

The fourth question we should cover is on Fertilizantes gross margins in the fourth quarter. How should investors think about the impact of cost inflation in Brazil across our production and distribution businesses? And what are the key takeaways on costs?

Thank you, Paul. Yes, inflation is showing up in our cost structure through the increased price of commodities, labor and inputs as well as our raw materials. We expect, overall, the impact on our cost structure to be around 15%. Our distribution business in Brazil benefited by matching low-cost inventory with high-priced sales in Q2. We saw a reversal of that in the third quarter. For the distribution business, due to the timing of purchases, a step down in gross margin per ton is expected. However, even with that, we are still seeing gross margins above our historic norms. With that, operator, can we open the call to questions from the audience?

Thank you. Joc, you mentioned that lower pricing might encourage farmers to start purchasing again. Was that the reason for the delays, or were they just postponing purchases because prices were decreasing? Now that prices are stabilizing, could we expect a significant increase in purchases moving forward? Is that a fair assumption?

Yes. Thank you, Steve, and good morning. Certainly, as prices are declining, nobody wants to step into a market. There’s necessary caution. I would argue, probably when the prices were higher, there was also a psychological or sentimental response. The economics of planting and using fertilizer never went negative. So, it isn’t a matter of the fundamentals. It was a matter of sentiment, I would think, at some point. And then, as the prices declined, as you suggest, the buyers take a step back and wait. If they think the price is going to be lower tomorrow, they’ll wait and start buying when they absolutely need to. I think the indication now is that the price has, in fact, stabilized. It’s stabilized at a price where they can see easy value, if you will. And so, they’re stepping back in. And absolutely, we expect there will be a steady buying. Remember, at least in North America, though, we are in the fall season. So, they are taking a price risk for next spring. So, there might be a little more caution in terms of coming all in. But we’re seeing good movement, and that indicates that they believe this is good value, and that will continue.

I guess my question is thinking about your market outlook into 2023 with the increases that you’re forecasting in potash and phosphate shipments. How should we think about Mosaic’s ability to grow shipments in excess of the market? Lapping some of the production issues this year, increased capacity at Esterhazy. I mean, what’s a rough framework, Joc, for how much production for you can be up in a market that has higher shipments next year?

Thank you, Adam. When considering 2023, particularly with potash, we have indicated that due to reduced sales from Belarus, the market will likely need to ration supply. This situation presents us with an opportunity to potentially increase our product movement. In North America, we anticipate that the market will remain relatively stable, not growing significantly, which means our focus is on export opportunities. We face two primary challenges: identifying the right markets that require our product and the logistics of transporting it. Currently, our supply chain is operating at capacity, and we faced difficulties shipping goods from Canada in the first quarter because of winter conditions. Production capacity is also a concern. However, we have achieved significant flexibility with Esterhazy now operating at what I consider full capacity, and with Colonsay coming online to enhance that capacity. This positions us to meet seasonal demands and respond to increased market needs. While I cannot provide a specific demand forecast at this moment, we expect a global potash market of approximately 64 million tons next year, showing a slight increase from around 62 million tons this year. It appears that the influx of product from Russia and Belarus in the first quarter might not be repeated, which brings opportunities for us in the upcoming quarters. In terms of phosphates, we are somewhat constrained in production and cannot expand our resource base. Consequently, we anticipate similar output to previous levels, around 8 to 9 million tons. Our utilization rates will largely depend on market conditions, but we expect to achieve high efficiency next year. Overall, we are optimistic about strong demand and high utilization across all our production assets, including those in Brazil.

I guess just given consensus seems to be that the market will be short, something like 5 million to 8 million tons of potash next year, curious where you think the support level is for pricing for potash in that environment. Just given your 4Q expectations of around $600 per ton, do you think pricing moves up from here as inventories come down, or is there a support level you would think about?

Thank you, Josh. When considering prices, I believe that sentiment and fundamentals will primarily limit them at this point. For instance, during the time when potash prices reached about $1,200 in Brazil, the economics were still viable, but it became increasingly challenging for Brazilian farmers. They often rely on their barter ratio, which had risen significantly. This meant that acquiring inputs was costing them a much larger portion of their production compared to previous years. Therefore, there's a risk that if prices rise too high, demand could be adversely affected. However, I see a strong opportunity to maintain reasonable barter ratios, similar to those we’ve seen alongside elevated crop prices, which would allow for healthy margins and potential growth in the market. I don't think we'll see prices soar to $1,200 again, but I believe there is room for upward movement from our current position.

It’s a two-part question. In your slide deck, you said that you were contemplating a special dividend. Why is it that you’re contemplating a special dividend given your very low valuation and your high free cash flow generation? Wouldn’t continuing share repurchases be a higher return for your shareholders? And second, I was hoping you would comment on the possibility of Chinese phosphate rock capacity expansions or DAP or MAP expansions in 2024?

First, regarding the special dividend, we've consistently stated that we would consider regular dividends, share buybacks, and special dividends. So far, our primary focus has been on share buybacks, primarily because we believe our shares represent a strong value. This makes buybacks a great way to return capital to shareholders. At the same time, we recognize that some long-term shareholders prefer income. Personally, as a shareholder, I wouldn’t mind receiving some of that back as stable income. Additionally, if I choose to use that income to buy more shares, I can do that too. I think a combination of approaches is reasonable. While we've emphasized share buybacks, we want to ensure we're considering all shareholders. If a small portion of our returns includes a special dividend when performance is strong, that seems fair. Annually, we'll also review our overall dividend to ensure it's balanced and affordable. Regarding phosphate rock, I’m not entirely sure I understood the question. However, it's clear that mining phosphate rock in China has faced significant restrictions due to environmental concerns related to the Yangtze River. These restrictions have limited their mining capabilities. Overall, I would say China is likely resource-constrained when it comes to phosphate rock. We do not anticipate any expansions there. Concerning finished fertilizers, they have significantly reduced their capacity and closed plants, particularly along the Yangtze, with capacity now down by about 25%. In terms of exports, two trends are emerging: an increase in products going towards industrial and purified phosphoric acid, and the remarkable growth of lithium-ion phosphate batteries in China, which might represent the future of batteries. Taking all of this into account, we believe the Chinese government will continue to restrict exports to keep fertilizers affordable domestically. I hope that clarifies your question.

Just a couple of quick questions. One, you kind of partially answered earlier. I had a question on raw materials, particularly sulfur impact on phosphates. I guess, my question there would be, you expect to keep that benefit, you said, straight to the bottom line. What gives you confidence that it falls to the bottom line and you don’t have to share that with your customers? And secondly, just on these LFP batteries that you just mentioned. My understanding is that the use of phosphate in LFP is a very small part of phosphate that goes into LFP. Do you really think that LFP is going to have an impact on the phosphate markets? Thank you.

Thank you, P.J. Let's start with raw materials and then move to lithium-ion phosphate. When I mention that the benefits of raw materials will impact our bottom line, generally, that translates to savings for customers. However, supply and demand dynamics always play a role. In a tight market, we retain more of the benefits, while in a more relaxed market, customers tend to reap those advantages. Currently, we observe a relatively tight market, and we believe we can sustain our margins and possibly gain from the decreasing costs. Regarding LFP batteries and their significant consumption of phosphates, we are seeing a rapid increase. In China, consumption has risen from 100,000 tons of purified phosphoric acid to an expected 400,000 tons in a couple of years. Year-to-date, LFP usage has reached 670,000 tons, and we anticipate total consumption will hit 1 million tons in 2022. This swift rise in consumption is likely to affect the supply and demand balance for phosphates, indicating a considerable industrial application for these materials.

I have two questions. If it's alright, I'll ask them one after the other. Mosaic experienced a smaller decline in potash sales volume in Q3 compared to your capital expenditures related to Nutrien. You're also projecting flat volumes in Q4, while Nutrien is expecting a decrease. I understand you're focusing on your own performance, but you are connected with Canpotex in the offshore market. You mentioned that you believe potash volumes in the North American channel are normal. Do you think the pause in purchases in the North American channel will last longer than in the offshore market?

Yes. Look, first of all, I can’t comment on anyone other than Mosaic, obviously. And I also don’t know the differences in selling strategies or rev rec and all that, so making any kind of comparison. What I will say is what we saw in North America in the third quarter was a pretty good slowdown. What we did also see, though, was a reduction of imports. I mean, imports year-to-date are probably down by 50% or close to 1 million tons. I suspect we had a pretty good uptake of our summer fill program, or considering how the markets played out, we had a pretty good uptake of our summer fill program. So we think our customers came to the table and again, saw good value and were willing to price. That was a good thing. We recognized what we think was reasonable considering the market. In terms of going forward, again, there’s just a high level of uncertainty of where that market is going to be. I would argue that pertains to both Canpotex and to the North American market. In the North American market, we expect a decent fall season. If we do better than that, hey, all the better. But the expectation is a decent or normal fall season, and that’s exactly what we’re seeing. We expect the inventory to work its way down throughout the season, which is good. I think Jenny said earlier, we’re down to 50% of our in-market inventory. So, that’s been run down significantly to a normal level for the middle of November. We’re seeing a very normal sort of play out, and that is what we would expect. Now we had a summer fill program. We didn’t discount anything. So I think that just says the fundamentals are there, and people are ready to buy.

So, I just had actually a few questions on Fertilizantes. I find it a little bit difficult sometimes for us to get some good visibility there. In phosphate production, it looks like it’s trended a little bit lower in the past few quarters now. Can you maybe shed some light on what’s going on there and what your expectations are on production going forward? And then on gross margins going into Q4, if I’m understanding the commentary correctly, it sounds like it will still be relatively quite high, but maybe sequentially down into Q3 even if you include the wholesale margins? Is that correct? And then just the last one is on...

Could you repeat the second piece, Andrew? I didn’t quite understand the question about Q4.

I’m curious about the margins going into Q4. The commentary seemed to indicate that they would still be strong historically, but might be lower sequentially compared to Q3. It appears there may be some pressure on distribution. If you factor in wholesale sales, which are typically higher margin, would the margins still show a sequential decline? Also, regarding costs.

That's a complex issue. Let me address these points one by one. Firstly, our phosphate production has fluctuated over the last couple of years, largely due to reliability issues and shifts in mining areas. Additionally, the market has been slow, which has impacted our sales performance. Consequently, we need to align our production levels with sales, and we are currently facing a situation with single super phosphate where our inventory levels are quite high. Continuing production while holding a full inventory is not efficient and increases our unit costs. Regarding margins, I wanted to emphasize that we actively manage our positions, keeping them relatively balanced, but we also tend to take positions months in advance of sales. In a declining market, buying in July and selling in September exposes us to price risks during that period. If prices rise, we achieve significant gains from our positioning; if they fall, we incur losses. Currently, in Brazil, we experienced strong margins in Q2, but there was some reversal in Q3. Nevertheless, margins remain robust. I attribute this to our product management teams, who understand market dynamics well and can strategize on pricing and inventory levels effectively. However, there are limitations to how much flexibility we have. I believe that covers most of your questions, Andrew.

I want to follow up on that question. It’s a challenging one. Nutrien is set to increase their production capacity moving forward. Their capital expenditure plans are already in place, so any additional production will need to happen entirely in North America. You mentioned that you believe potash volumes in the North American market are stable. Do you think the slowdown in purchases in the North American market will last longer than in the offshore market?

I cannot discuss the plans of my competitors or partners, so it's best to ask their new CEO. However, I can share our perspective on the market. We anticipate that the 8 million tons will not return next year. I believe ICL will try to maximize their output, and EuroChem appears to be effectively entering the market. On the other hand, Uralkali seems less active this year compared to the past, with some speculation about their situation, but that's something they need to clarify. The Belarusian producers will face limitations on shipping through Lithuanian ports and will either need to rely on long rail routes to St. Petersburg, if port capacity allows, or to China via complicated rail systems, where they have managed to ship around 1.5 million tons. Overall, we estimate a supply side of about 64 million tons, which we believe will be the necessary amount for the market. This indicates a demand for all of our Colonsay production next year. Looking further ahead is uncertain. I want to highlight that restarting Colonsay required minimal time and cost, and we are currently achieving strong margins there. The risk of restarting was negligible compared to the potential gain, making it a wise business decision for us.

Thank you. Well, to conclude our call, I would like to emphasize the strength of Mosaic’s financial performance. We delivered excellent results, and our outlook remains strong. Global agricultural market conditions remain constructive, and tight supply of grain and oilseeds is very likely to continue for the foreseeable future. As a result, fertilizer demand remains strong and supply constraints persist. We’re using this opportunity to return significant capital to shareholders to invest in our business and to strengthen our balance sheet. Mosaic is in an excellent position to continue to benefit from compelling business conditions throughout 2023 and beyond. Thank you for joining the call. Have a good and safe day, and go out and vote. Thank you.