Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 CF Industries Holdings Earnings Conference Call. My name is Vin. I will be your coordinator for today. I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick, with CF Investor Relations. Sir, please proceed.

Good morning, and thanks for joining the CF Industries' third quarter earnings conference call. I'm Martin Jarosick, Vice President-Investor Relations for CF. With me today are Tony Will, our CEO; Dennis Kelleher, our CFO; Bert Frost, Senior Vice President of Sales, Market Development and Supply Chain; and Chris Bohn, Senior Vice President of Manufacturing and Distribution. CF Industries reported its third quarter 2017 results yesterday afternoon, as did Terra Nitrogen Company, L.P. On this call, we'll review the CF Industries' results in detail, discuss our outlook, and then host a question-and-answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC which are available on our website. Also, you will find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website. Now, let me introduce our President and CEO, Tony Will.

Thanks, Martin, and good morning, everyone. Last night, we posted our financial results for the third quarter of 2017, in which we generated adjusted EBITDA of $134 million, after taking into account the items detailed in our earnings release. I am particularly pleased with our performance and results for the quarter, especially considering how the quarter began with prices meaningfully below 2016 levels. As nitrogen prices rose from the unsustainable lows of the summer, our team responded extremely well, dramatically ramping up shipments and capturing the improving prices. Our team demonstrated impressive execution across all parts of the business. Operationally, our plants ran really well once again. We produced 2.5 million tons of gross ammonia, but most importantly, we did it safely. Our 12-month recordable incident rate was down to 0.85 incidents per 200,000 work hours. Our team has also achieved more than 3 million hours without a lost-time injury. This is a tremendous achievement considering the level of activity across our system. Our sales volume was the second highest quarterly volume ever. This is particularly impressive, because the third quarter is historically a lower volume quarter for us due to the seasonality of applications in North America. During the quarter, we participated in the North American in-region demand, sparingly at first, but with increased enthusiasm as prices rose. This included our successful UAN summer fill program. We also leveraged Donaldsonville's ability to export to a greater extent than ever before as North American nitrogen prices remained below global parity. During the third quarter, we exported 1 million product tons, which is a new CF record for any quarter. These export sales allowed us to balance our system and manage inventory positions to maximize overall margins. When North American customers were unwilling to purchase products at netbacks comparable to international…

Thanks, Tony. CF's performance in the third quarter demonstrated the strength and agility of our team and the system. We shifted our product mix when needed, employed our logistics and storage assets, and carefully selected opportunities of when and where to sell. As a result, we maximized the overall cash margin available to us, while achieving close to record shipments. We believe we are positioned very well going into spring 2018. The quarter began with NOLA urea trading at approximately $155 to $160 per short ton. These price levels were the lowest seen in a decade, excluding 2009, and we're at or below full production costs for many producers around the world. Prices remain low through July with the expectation that the quarter would close at similar pricing levels. However, the continued low level of Chinese production and exports, combined with a weaker U.S. dollar, and energy and production cost increases in various areas of the world, helped to lift prices through August and then move higher in September. As we exited the quarter, urea prices around the globe continue to show strength supported by low inventories and higher than expected demand in India and Brazil. However, North America lagged the rest of the world in terms of pricing and demand throughout the quarter. While urea prices followed the sharp upward trajectory, ammonia and UAN did not increase as dramatically. CF again achieved very solid export volumes for UAN and ammonia and a record level for urea. Late in the second quarter and early third quarter, the netback available from international destinations increased and exceeded the netbacks available for domestic shipments. The team was able to pivot to exports and build a book for the various products that allowed CF to load and ship record volumes at favorable values. We…

Thanks, Bert. The company reported a diluted loss per share of $0.37 and EBITDA of $139 million for the third quarter. After taking into account the items detailed in our press release, our adjusted diluted loss per share for the third quarter was $0.39, and adjusted EBITDA was $134 million. Our adjustments included a $7 million unrealized net mark-to-market gain on natural gas derivatives. I want to highlight the cost reductions we have achieved across our system. This is a result of our targeted efforts to reduce costs in our head office and in our plants. Our SG&A was roughly flat compared to the same period last year, demonstrating the scalability of our business model. We increased our capacity by about 25% and sales volume by 33% since last year without incurring significant incremental head office costs. In fact, despite adding significant production, we have among the lowest SG&A as a percentage of sales in the fertilizer space and commodity chemicals generally as you can see on slide 12. Looking at SG&A on a per ton basis, we reduced SG&A per product ton by 23% since 2015. At our manufacturing sites, reduced plant level activity and better procurement practices have decreased professional services, payroll and maintenance cost, resulting in a lower controllable cost of sales. As you can see on slide 11, we have reduced controllable cost of sales per product ton by almost $12 compared to third quarter 2016 and more than $15 on a year-to-date basis. Our balance sheet remains strong. Our cash and cash equivalents are $2 billion as of the end of September – as of September 30, and our $750 million revolving credit facility was undrawn. Monday, we announced that we will redeem the May 2018 bonds on December 1, 2017. We estimate that the…

Thanks, Dennis. Before we open the call to questions, I want to highlight a couple of things. First, our business has demonstrated its resiliency, even during the most difficult environment our industry has seen in over a decade. Slide 13 shows how we've grown cash on the balance sheet by $828 million through the first three quarters of the year. Even excluding the federal tax refund we received in the second quarter, along with a one-time voluntary contribution to our pension program, we increased net cash by $72 million. This means the cash we generated even during this challenging period has more than covered our fixed charges, including CapEx, interest, dividends, and distributions to non-controlling interests. With the bond repayment Dennis mentioned, we will further reduce the interest portion of fixed charges by $55 million per year. The second item I want to highlight has been our team's execution over the last 15 months. On slide 26, we compare the achievements discussed today to the commitments we made on our August 2016 conference call. At that time, we laid out four targets for the business. First, complete and start up the expansion projects by the end of 2016. Second, reduce annual CapEx to less than $450 million in 2017. Third, reduce our controllable expenses. And fourth, reduce leverage on the balance sheet by repaying $800 million of debt due in May 2018. Our team's efforts have yielded excellent results on all four targets. We completed the expansion projects by the end of 2016, and all new units are reliably running more than 15% above nameplate capacity. New CapEx in 2017 is expected to be approximately $375 million. We have reduced controllable expenses per ton by 16% and SG&A per ton by approximately 23% year-to-date. Finally, earlier this week, we announced that we will redeem the 2018 bonds early, reducing our leverage. Importantly, we achieved all of this with excellent safety performance. Given the heightened level of production and shipping activity over this period, along with normal turnarounds and maintenance, that is an outstanding accomplishment. With that, operator, we will now open the call for questions.

Thank you. As a courtesy to others on the call, we ask that you limit yourself to one question. If you have additional questions, we ask that you re-enter the queue, we will answer additional questions as time allows. Our first question is from Adam Samuelson of Goldman Sachs. Your line is open. Adam Samuelson - Goldman Sachs & Co. LLC: Yes. Thanks. Good morning, everyone.

Good morning. Adam Samuelson - Goldman Sachs & Co. LLC: Maybe first, for Tony, just some thoughts on the market, and really product pricing and premiums, as you've seen them evolve over the third quarter, and really this year, where the U.S. has continued to trade at a sustainable discount to the rest of the world, the UAN since the summer has traded at a discount to urea, which is fairly unusual. Can you talk about kind of how you think those evolve what – in particular, for the UAN premium gets that reversed, and how to think about your own realizations against that construct with your realizations versus benchmarks are actually quite good this quarter?

Sure. Thanks, Adam. This is Bert. And the market has evolved in a little bit of a strange way, coming off the lows as we mentioned of urea. And looking at that point in July when we were at $155, $160, and launching our UAN fill program at the end of July to where we are today is remarkable. The market is up close to $100 in North America, and internationally, even more. And you're right, we're trading at a discount to the world as frustrating as that is. But I do think that's a reflection of this transitionary period that we've been discussing, where we have a little bit of a stop-and-go-type market with purchases and positioning. And so, we become adept at accessing all markets at all times and in conversations with customers around the world. And working with different customer partners to move our product at the margins that we deem appropriate. And so, when you look forward for product pricing, we're positive to what's taking place around the world. There are still capacity to come up in North America, and there's idled capacity in different parts of the world that will probably come up off of turnarounds and maintenance in – late in Q4, Q1. But we've seen robust demand to support that. And this current situation in India with the tender that is just closed and been priced, we think is attractive. You still have a few more months of Brazilian activity, as they prepare for a second crop corn planting in February and March. So, imports will arrive probably into early February there. And then you have the North America season starting at that point with a significant amount of imports still to take place to support planting in spring. Relative to the UAN summer fill program, we are very pleased. The team did a great job of working with our customers, broadening our customer base, our geographic imprint. But, you're right, UAN has traded at a discount to urea, and that is historically an anomaly. And we do see that over time and believe that UAN as the, we believe, a very good product will return to its premium status, but that may take a while as we talk about this transition year in 2018.

The other thing I want to just add that – a point that Bert makes off and on the UAN side, which is below urea is kind of ubiquitously traded. UAN is principally only used in a few markets, so you've got North America, a couple of markets in Europe and Argentina. We're just beginning in Brazil and a few other places. But there's much less international demand for it. And with the new Donaldsonville plant operating at over 6,000 tons a day, that's over 2 million tons of capacity we brought on. Weaver has brought on more than a 1 million tons, and because at Port Neal, we were urea-limited in terms of our UAN, with the new urea plant we've brought on, we've added a couple of hundred thousand tons of UAN capacity in Iowa as well. So, when you look at that, the U.S. has added 3 million, 3.5 million tons of capacity. That's a huge percentage increase. And I think it's just going to take a little while for the marketplace to absorb that, before you see the urea UAN kind of pricing premium renormalize.

And that is the benefit of, as we talked, about our product agility or product mix configuration. We can produce all that Tony talked about or move some of that to dry urea, liquid urea, DEF, and we're balancing utilizing those different tools.

Thank you. Our next question is from Don Carson of Susquehanna, your line is open.

Yes. Bert, a question on just the domestic market. I mean, to what extent was some of this price rise we saw in Q3 kind of a scramble by dealers to source product as they saw that Enid and Weaver weren't going to fully ramp? And what's your view on the premium between NOLA and the Corn Belt on urea, UAN and ammonia as we go forward? I mean, should your strong exports maintain that premium or do you think it comes down with all the new capacity in market?

So, looking at the premium today, I'll answer that part first, it's holding, and we're positive to the premium. There is a direct cost to move product, no matter if you're moving it from Galveston or NOLA or the East and West Coast to hit the consumption markets from, let's say, Ohio to Nebraska, the Dakotas to Texas. And we're fully intent on that premium holding, because again, there is a cost. Now, ammonia has had some lower prices in historical, in terms of the spreads, in terms of the absolute product values as a divisor based on their nutrient content. I think that's an anomaly also. I think as we balance this, a few of the producers probably had excess ammonia going into the quarter, because the upgrades weren't prepared, and needed to move that product. So, I think this fall is an anomaly based on what will probably happen in the future with ammonia applications for corn. But you're right, we've seen a nice move in the market. I do think several of our big customers, as well as medium and small customers, did position themselves well at the UAN fill. But we look at as urea, we've had fewer imports and probably fewer produced tons than anticipated. So, I do think there is a market that needs to be fulfilled going into Q2 to be ready for spring. So, I do think there will be some needs and need to be purchasing, as well as logistically moving those tons, over the next, let's say, four to five months. So, that's why we're constructively positive.

Don, let me just add a couple of thoughts to that, which is the U.S. still is going to need the import, another what, Bert, about 3 million tons of urea or so.

I'd say 4 million.

4 million tons. So, you can't get there if North Africa is trading at a significant premium to where we're trading. The prices at NOLA eventually have to rise. The other point that I'd make up is, we've demonstrated this last quarter, our ability to export Donaldsonville. So, in a lot of ways, Donaldsonville tons should be considered really an international plant, because we're not going to just pay the transportation cost to move those tons into the Midwest and not recover that cost. We could move those tons into the international marketplace and get better netback. And so, that's another reason why from our perspective the whole question about whether the Midwest premium hold is a bit of an odd one, because we're not going to incur that cost when we've got other options, and the Midwest is chronically short product even if we put all of the D'Ville stuff up there. So, someone has got to pay the freight to move the product up there. We see no economic reason why there's even a question about the Midwest premium.

Thank you.

Thank you. Our next question is from Christopher Parkinson of Credit Suisse. Your line is open. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Cool. Thanks. You guys have clearly done a pretty solid job reducing controllable costs, but can you comment on whether this was mainly focused D'Ville and Port Neal after the respective ramps, any start up costs, et cetera, or was it fairly broad based across your facilities in the Southern Plains and even Canada? In other words, just how much better do you believe you can get in 2018 and 2019? Thank you.

Chris, this is Chris Bohn. To answer the second part of your question first is that as Tony and Dennis mentioned, these initiatives we put in place last year in the third quarter. So we're beginning to see some lapping of it. So, I would expect that we'll still see some benefit specifically from volumes since we didn't bring on Port Neal till late Q4 last year. So, there'll be some volume benefits that we continue to see. As far as being focused just at the new expansion projects, I think you're correct in the assumption that this is broad based. What we really did is, we started to focus and be much more diligent on our spending, primarily across professional services, engineering activity and maintenance and payroll expense. And we've seen that come down at all our facilities, so it's not just directed at those two. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Great. Thank you.

Chris, one other just a bit of follow-on there. So, we've got a fair bit of engineering capability at the plants. Historically, we've had a lot of that focused on bottlenecking and improvement on the capacity side. As you know, we've looked at a more difficult market environment, where the value of the incremental ton is perhaps not as high as it used to be. Chris Bohn has done a great job of redirecting that talent base away from improvement which then it begets more CapEx and expense on the professional service side to really focus on maintenance and turnaround activities, so that further reduces our expenses going through those activities. So it's, I'd say, a double benefit that we've been able to achieve there.

Thank you. Our next question is from Joel Jackson of BMO Capital Markets. Your line is open.

Hi. Thank you for taking my question. You talked a little about ammonia sales are quite strong. You've obviously had a lot of capacity. I think you spoke generally a little about possibly some pull-forward volume for some products in Q4 and Q3. At least for ammonia, was there some pull-forward ammonia? Maybe give a little update on that dynamic. Thanks.

No, it wasn't. The ammonia sales in Q3, Damian did a great job of – as we talked about this whole export capability and leveraging, where we talk about moving 300,000 tons, in absence of the Mosaic contract which we had planned on, their vessel was late, so we had to pivot and do different things, and one of those was working with some of the destination markets for those sales. And so, we do have some Ag sales of ammonia in Q3, and majority of that is for weed applications in Texas, Oklahoma, Kansas area. And so pulling forward Ag sales in Q3 is pretty difficult, because the corn application have already started by late October and will run through, hopefully end of December. And so, we're anticipating a normal ammonia season, still to be determined. We're looking out the window today in sunny Chicago to rain and clouds. And although we're not in corn country, we are following the weather maps, and it's colder up in the northern territory like the Dakota's, but for great application in Nebraska and Iowa. So, we're anticipating the ammonia season to kick off and be strong for the next 30 days.

Thank you.

Thank you. Our next question is from Steve Byrne of Bank of America. Your line is open.

Hi. Good morning, everyone. This is Ben Gottesdiener on for Steve. Can you discuss your estimates of channel inventory levels of nitrogen in the major grain-growing regions of the world, U.S., Brazil, India, and how that compares to historical levels?

Sure. When you're looking at India, we had projected based on 2016's performance of tenders, there was an absence of tenders from September all the way to April, and very limited import volume. That then pushed excess inventory into the market in the beginning of 2017. What we believe happened was a significant drawdown of inventory in India. And you're seeing that represented today from September through December, a tender a month or a more and additional consumption of probably 1.5 million tons to 2 million tons just in India. So, we think that that inventory, and it's represented by the statistics, is low in India, and they will continue to tender probably even into January, positive for the market. Brazil is up about a 1 million tons to-date. Difficulty to store urea in Brazil over time. Imports started early in March and April, and it's continued forward to exceed 4 million tons for this year. So, we're positive on Brazil but don't see them carrying a lot of inventory past February. And then looking at our market, we believe coming out of second quarter in June entering in July, inventory for all products was very low and, hence, we had a positive pull for our UAN fill program that we thought appropriate pricing level around $125 FOB NOLA. And so, we're shipping against that, but we've had an incredible amount of exports, and probably limited production as reported by some of the publications in some of the newer plants that were supposed to come online. So, I would expect that inventory is at an average to below average level for UAN and urea. For ammonia, that mostly stays with the producers, and our inventory is adequate and we're prepared for a robust fall, should that happen.

Thank you. Our next question is from P.J. Juvekar of Citi. Your line is open.

Yes. Thank you. Coal prices have gone up in China even before the winter. So, what's your outlook there? And then secondly on China, China has shut down significant amount of anthracite capacity. If urea prices stay about $250, let's say, how much of that capacity in China do you think can start back up?

So, P.J., relative to Chinese coal, we're pretty constructive on where that's headed. One of the folks that we've added to our board recently is John Eaves, who's the Chairman – our CEO of Arch Coal. They obviously watch that very, very carefully. We coordinate a bit of intel with them, and we remain very constructive on Chinese coal prices going forward. I think the other issue is, I don't think anymore it's just purely a matter of what the energy cost is in China. We really do believe that the current administration is very focused on environmental reform, and there are a set of those plants that just don't meet emissions requirements that won't come back regardless of where urea prices hit on the international front. Or, Dennis, yes?

I think looking at the coal cost on a structural basis for competitiveness, you're seeing probably a $20 to $30 cost increase directly reflected in urea. That combined with low-production capacity utilization, 59, 60, 61, whatever the publications or our industry has put out, puts production around 60 million metric tons to 61 million metric tons. Exports, we project, are 4 million metric tons to 5 million metric tons; leaves a domestic market of around 56 million metric tons. And we believe, there are also – just like India, there was significant destocking that took place in the spring. And today in several areas of China, the interior price is greater than the exportable price. And so, I think $250 is a little low. I would say prices need to go probably over $300 for them to be bringing back any production. And I agree with Tony that that production that's environmentally challenged, I don't know the prices what brings it back to the market.

Yeah, I think the other thing I would add is that from an exchange rate perspective, as we modeled into our cost curve that you see in the slides, we are sort of there about RMB 6.80 per dollar. If you go back to sort of this time last year, people were predicting to be well above RMB 7. And so not only coal prices moved in the right direction, the environmental stuff that Bert talks about, but in addition to that, the exchange rate helped as well.

Thank you. And our next question is from Vincent Andrews from Morgan Stanley. Your line is open. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Thanks, guys. On the export program, a couple of things. One, how fully baked are you in terms of the various regions or partners that you'd like to trade with? Are there more relationships you're still looking to build, or do you think you are where you're going to be? And then secondly, is there going to be, going forward, a base level of volume, that you're going to need to export regardless of the comparable netback, whether it's in the U.S. or in the export market just to sort of maintain those export relationships, or how nimble can you be?

I think we're going to be incredibly nimble. Based on the product mix that's available to the company and the spreads between ammonia, urea, UAN, nitric acid, ammonium nitrate, DEF, UL, I think those optionality, as well as domestic options and inventory, when you take the whole matrix and look at what is available for us to move, do, and work with, I don't think we have to do anything. And, yes, we are always building relationships both domestically and internationally. And our customers – I think our total number of customers has doubled over the last five years, and that's on purpose. We've added sales staff. We've added regions. We've as well as added international staff that we're actively participating in leveraging those relationships for the long-term. We've worked with several traders, as well as destination markets in Chile, Colombia, Brazil, Argentina, Uruguay, and actively want to grow in that area, because we believe in the long-term structural advantages of farming down there. In the European market, Belgium, France, Spain, Germany, also active for us, and leveraging our UK operations with the people that we have based in Ince. And so when you look at that across the board, we say this all the time, but we participate in a global market, and anytime if there is an arbitrage or an advantage, we want to participate and know about it. And so we don't have a specific tonnage or allocation per market, it's all driven by netback and optionality.

But, Vincent, to that point – I mean back to Bert's point on netback and optionality. I mean, I think it's pretty easy for us to get north of $5 million product tons a year if the opportunity were better for us to export than it was to keep those tons home. I think year in and year out, it's probably going to be closer to 0.5 million tons per quarter. But I want to be clear, we're not going to just export in order to make room for other people. I think people import product into this marketplace at their own peril, because we're going to run our assets very hard. And you get on the wrong side of one of those trades, then you could end up losing a lot of money. So, we'd prefer our tons stay in here, and people need to be cognizant of that.

Thank you. Our next question is from Andrew Wong of RBC Capital Markets. Your line is open.

Hi. Good morning. Thanks for having me on the call. So, I'm just wondering, could you help clarify or maybe just provide some more details on the fourth quarter guidance? Because, I mean, I think being above last year's EBITDA is pretty understandable with the new volumes and higher prices and maybe some of the lower cost. But could you help maybe on the magnitude or help quantify how much higher you see that? And then just on the cost curve, how do you see that evolving out to like 2019 if assuming input prices don't really change? Thanks.

So, Andrew, I'll tell you, we're just kind of dipping our toe in the water relative to providing some thoughts around expectations. We don't go out more than sort of one quarter, because, as was evidenced in our second quarter call with respect to what we were thinking, third quarter might end up being, we didn't see the magnitude of the pricing change, and that has a material impact on what ends up our results being. So, I think we've said about all we want to say in terms of directionally where we expect to be. As you get out to 2019, 2020, 2021, there's an awful lot of things that start influencing what the shape of that curve looks like and the absolute magnitude of it. One of the main ones as Dennis indicated earlier is exchange rate, coal price, gas price in Europe and so forth. So we try to give our best view of expectation for 2018. But again, there's enough variables involved, particularly as you think about the possibility for tax reform in the U.S., and how that might affect strengthening or weakening U.S. dollars, how interest is treated in terms of deductibility or not, economic expansion. All those things drive exchange rates, and that's a big input to that cost curve. So, we haven't published anything that goes out to 2021. But I would say we feel very good about North American natural gas costs, and we believe we're going to continue to operate deep in the low part of the cost curve, and we feel really good about where we sit.

Okay. I appreciate all of that. Thanks.

Thank you. Our next question is from Michael Piken of Cleveland Research. Your line is open.

Yeah. Hi. Just wanted to touch a little bit more on the cost side here. If you could just give us a flavor for any updates on natural gas hedges in 2018, that'd be helpful. Thanks.

On gas, we are hedged, as we exited Q3, as we've given previous guidance, we were 10% hedged for 2018. And we have our industrial contracts that are tied are gas based for additional 20%. So 30% roughly of our production is covered. And we have not added any additional hedges for Q4 or 2018 or forward.

Our next question is from Ben Isaacson of Scotiabank. Your line is open.

It's Oliver Rowe on for Ben. Thanks for taking my question. Over the past couple of years, we've seen your AN and other prices performing pretty well relative to urea and UAN. How much of an impact of changes such as GrowHow and sales mix into products like DEF had, or is this mainly due to AN being a lot less elastic than UAN and urea? Do you see other drivers of the move?

I mean, I would say a couple of things and then Bert jump in, one of which is it's been a tremendous benefit for us to be the 100% owner of the former GrowHow business, the UK, CF Fertilisers UK. So we've brought a lot of discipline both from an operational perspective and a marketing perspective to that business. And then separately, at the beginning of 2017 was when the kind of long-term supply agreement with Orica, Nelson Brothers kicked in, and that contained in it some pricing provisions that were more attractive than historical. So, it's the combination of those two things that have really made the AN business improve pretty substantially for us relative to what it would have looked like a couple years ago, and we feel very good about that segment.

Thank you. Our next question is from Alexandre Falcao of HSBC. Your line is open.

Thank you. I have two questions. One is, you've been painting a very positive scenario for 2018. My question is, if anything goes wrong, where do you think we're going to see the biggest probability of going wrong? And second on, specifically on Brazil, seems to be a very strong market, and you guys are still not fully penetrating there. Is it just a ramp-up phase? Is there anything in particular, could expect more of that market from you guys going forward? Thank you.

So, what could go wrong, actually, I'd say, what already went wrong in leading from 2015 into 2016, 2016 into 2017, were a strong dollar, low-priced, low-valued soft commodity markets, corn, sugar, wheat, cotton; low vessel freights; and a flattening energy curve; and low-priced energy in Europe and most places in the world; cheap coal. What's changed? All of those. So, as we go into the end of this year, freights are up. You could ship from China to the United States for less than $10, today it's probably over $20, maybe $25. We still have a flat energy curve, but looking positive with coal pricing increases in Australia, China, and I think a positive market there. A weakening dollar with the euro at one point approaching $1.19 and RMB also stronger, ruble stronger, those are good. Brazil a little weaker which is good for agricultural production down there. And so what could go wrong is, we've talked about, and that's why we believe it's still a transition year with additional capacity in North America coming up. Capacity was offline or in maintenance coming up, and demand patterns going forward. So, I think we're in a year. But as we talk about growth, as market grows both industrially and agriculturally, growth eventually catches up and surpasses, because there's not a lot of new capacity coming on post-2018, and that's when we believe the market becomes more of a demand-driven market than a supply-driven market. Relative to your question on Brazil, Brazil is a great market, where you have a lot of good friends down there, meet with them regularly. As a matter of fact, one of our staff is there today. And we integrate and are active in understanding the demand patterns and price points. The reasons why we're active in Brazil are two reasons. It's one of the lowest priced markets in the world. And today, it's recovered. It's a $300, let's say, plus or minus metric ton, but as you work back to freight, that hasn't been that attractive for urea and it's a predominantly a urea and a sulfate market. We are trying to grow the UAN market and are consistently shipping products in there. So, I don't see us ramping up necessarily to a market to be a participant unless it makes economic sense. And so when that changes or when that becomes attractive, you'll see us actively participate in a greater degree.

The other comment I would make about 2018 is that, I don't know that we've necessarily tried to paint an overly rosy picture about it. We've pretty much consistently said our view of 2018 is going to be a lot like 2017. There's going to be pricing volatility. There's going to be ups and downs as the new capacity that comes online that's absorbed into the marketplace. And that leads directly to what could go wrong, so you get a couple of traders, importers that think they're smarter than everyone else. They bring too much product in here. Prices crash, because they don't appreciate how much real capacity there is in North America, that could certainly affect it. So, until those kind of trade flows work their way through the system, there's going to be some uncertainty and volatility out there, and we're not counting on 2018 being much different than 2017.

Thank you.

Thank you. Our next question is from Sandy Klugman of Vertical Research Partners. Your line is open.

Thank you. Good morning. Does the company have any SWOTs on China, potentially moving its gasoline market to an E10 blend. By my estimates, it could translate to up to 2 billion bushels of incremental corn demand which would obviously be very positive for CF?

Sandy, we agree that that would be incredibly positive for CF. And we are following that through our ethanol friends. There are exports taking place as you've seen over the last couple of years when sugar prices were high in Brazil and more sugar was committed to that rather than ethanol in Brazil, we were exporting down there, and I like how we're trying to build markets. Ethanol is a great oxygenate and a good product for some of these markets that are trying to make the transition, either away from ethanol or doing different things with their supply mix on gasoline. So our take is yes, that is positive. But it's a long way to go, whether it's a domestically produced product which again pulls more domestic-produced corn or imports, I think we're a couple of years away from seeing that take place. It's probably E1 right now. And so, more to come.

Thank you. Our next question is from John Roberts of UBS. Your line is open.

Thank you. When you say you expect continued price volatility, do you think similar lows and similar highs to 2017? And I ask that primarily on the low side, because once you go below the cost curve, it's really hard to tell how low, low is?

Yeah. I mean, I think, John, obviously we don't have a crystal ball in this regard. I think the lows kind of get tested when you have excess material floating around, because you're in the shoulder periods between applications and you've got big slugs of new capacity that comes online, and then people have these lost positions that they're trying to unwind and get away from, and it really just drives pricing well. But as you saw this year, prices can't sustain those levels for very long. People shut down as that material gets absorbed, it's a pretty quick response, back to more in the $300 per met, which is kind of the global price point right now based on the attenders and what's being sold out of North Africa. So, we do think volatility will be there whether it overshoots as much as it happened on the downside this coming season. I think a lot of that is going to depend upon whether importers and traders find some discipline.

Thank you. Ladies and gentlemen, this is all the time we have for questions for today. I would like to turn the call back to Mr. Jarosick for closing remarks.

Thanks, everyone, for joining us on the call. We look forward to speaking with you, and we're having our next call in February.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone, have a great day.