Good morning, ladies and gentlemen, and welcome to The Mosaic Company's First Quarter 2018 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. After the company completes their prepared remarks, the lines will be open to take your questions. Your host for today's call is Laura Gagnon, Vice President, Investor Relations of The Mosaic Company. Ms. Gagnon, you may begin.

Thank you and welcome to our first quarter 2018 earnings call. Presenting today will be Joc O'Rourke, President and Chief Executive Officer. We also have other members of the senior leadership team available to answer your questions after our prepared remarks. The presentation slides we are using during the call are available on our website at mosaicco.com. 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 issued yesterday and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. Our first quarter press release and performance data attached as exhibit to yesterday's Form 8-K filing also contain important information on these non-GAAP measures. Now, I'd like to turn the call over to Joc.

Thank you, Laura. Good morning, everyone. Since you've all had ample time to review our results, I will keep my prepared remarks brief and at a high level so that we can get straight to your questions. Mosaic continued to execute well in the first quarter of 2018 and global markets for our products continued to improve. Our financial performance for the quarter was impacted by weather and the underperformance of Canadian rail service providers. In both potash and phosphate, we came in at the low end of our sales volume guidance due to the late North American spring and the rail-related logistical issues. Including related production curtailment costs, these factors negatively impact the quarter by $0.07 to $0.10 per share. For the quarter, several notable items resulted in earnings per share of $0.11. On an adjusted basis, Mosaic earned $0.20 per share on net sales of $1.9 billion, both up materially from the first quarter of 2017. We expect to recover most of the deferred sales volumes as the rail issues are resolved and global seasonal demand moves into full swing. We have three key takeaways for this call. First, we expect strong business performance to continue throughout 2018 and beyond. In spite of an increase in our anticipated effective tax rate from 20% to approximately 30%, we have increased the midpoint of our full-year earnings per share guidance to reflect strong EBITDA growth, our confidence in the business environment and our ability to execute. Second, the underlying performance of our three business units is continuing to reflect significant operational improvements. And third, we are making remarkable progress in transforming the Mosaic Fertilizantes business in Brazil and we're excited about the success our team has delivered in our first quarter of ownership. Now, I'll start with the markets, which…

And our first question comes from the line of Vincent Andrews with Morgan Stanley. Go ahead, please. Your line is open.

Hi. This is Neil (12:07) calling in for Vincent. Just a question on your outlook for Chinese phosphate exports. It seems that DAP, MAP exports been down so far pretty significantly to begin 2018. What's your outlook for the rest of the year and what are you forecasting in terms of Chinese capacity shutdowns?

Thank you, Neil (12:25). This is Joc here. I will make a couple comments and pass this on to Corrine and Mike. But let me reiterate our previous position, which was that our forecasts do not have a decrease in China exports per se, although our bias is that we expect that those may go down, and certainly over time we expect they'll go down. You make a note and I will reiterate that the last six months, these exports are down by 24%. But in terms of the first quarter, what I will caution people on, it is a very small quarter compared to the rest of the year. The big quarters are the second and the third quarters. So, we will wait before we make any determination. And really the big factor there is price. If the price is higher, they will be motivated to export more. If the price is lower, they would be probably exporting less. Corrine, Mike?

Thanks, Joc. Yeah, Neil (13:28), we are seeing – the environmental protection of the Yangtze River Zone mandate has been widely discussed and we really are seeing events progressing. There's continued environmental squeeze on all the producers. We're seeing some rock production at some mines decreasing and there's increased cost for gypsum disposal as well as these regulations on proximity relative to the river may be causing some plants to require relocation in the future. But as Joc noted, we are seeing stronger margins and economics today. So, the decrease that we've seen, the 24% drop in the last six months, that's about 1.2 million tonnes. So, again, highlight that it's a relatively small quarters in the fourth quarter of 2017 and the first quarter of 2018. But we really do anticipate that the pace of restructuring will continue in the Chinese industry as we go forward for the longer term. Mike, do you have anything to add?

Not a whole lot to add, but if the Chinese keep up this pace of about 1 million to 1.2 million tonne less exports, it basically is about – our number show about 1 million to 1.5 million tonne hole in the global S&D that needs to be filled from somewhere else. So it just reiterates Joc's point that we haven't factored in a dramatic decline in Chinese exports in order to balance the market.

Your next question comes from the line of Andrew Wong with RBC Capital Markets. Go ahead, please. Your line is open.

Hi. Good morning. Thanks for taking my question. So, I mean, the phosphate markets and prices have been pretty healthy to start the year and some of that is because the Chinese exports lower and it definitely has been stronger than expected. So, can you just share your outlook on phosphate pricing and stripping margins for the back half of the year? And you mentioned that seasonally we might be a little bit weak, but probably a little bit better than has been in the past. And what's implied in your guidance for phosphate pricing and stripping margins? Thanks.

Okay, Andrew, thanks. Thanks for the question. I will push this pretty quick to Corrine and Mike again, but I will say, yes, the phosphate markets have been strong. I think our actions have been part of that. By shutting down higher-cost production here in the U.S., we've ensured a well-balanced market. And what we've seen as a result we believe is a market strip margin that has industry benchmark, strip margin that has really moved up in the last couple months. And we have not seen what we would have normally seen, which is a winter decline, and so we don't see a real decline till very late in the year, if at all. Corrine?

Yeah. I would just reiterate the global demand growth is very strong. It was strong last year. It's very strong this year. We're forecasting about 1.8% further growth really led by demand in India, Brazil, Asia, Oceania and Africa really strong growth numbers. We've also seen supply adjustments that Joc talked about with the Plant City idling, but also we've had much slower ramp-ups than expected out of Saudi Arabia and out of Morocco, and that combined with these lower Chinese exports are creating a pretty tight S&D. And so we've seen stripping margins at a healthy level for Q1 and we actually are guiding to a little bit higher industry stripping margins in the balance of the year.

Yeah. We do calculate a benchmark stripping margin based on published spot prices. And from January 2016 to the end of last year, that margin traded in a pretty narrow channel, in that $225 to $250 range. And what we said I think on last call is that we think fundamentals have changed, as Corrine pointed out, to move that up into kind of that $275 to $300 channel. And indeed, if you look at the stripping margin I think last week was approaching $290. So we have moved up basis these fundamentals. And as we look out for the rest of the year, we're seeing good price momentum in key markets, whether it's Brazil or India. And the outlook for raw material costs with some additional ammonia coming online and sulfur market coming to better balance I think bodes well for margins in the last half of the year.

Your next question comes from the line of P.J. Juvekar from Citi. Go ahead, please. Your line is open. And P.J. Juvekar, if your line is on mute, please unmute. Looks like your next question is going to be from the line of Don Carson from Susquehanna. Go ahead, please. Your line is open.

Yes. I just want to go back to the outlook for exportable phosphate supply in the second half of the year. Then the Moroccan – maybe, Mike, you can comment on how you see the new Moroccan capacity ramping up. Obviously, you have a good window into what's going on with MOD (18:44) and what impacted the shipping difficulties in – the Mediterranean have on first quarter pricing?

Thanks, Don. I'm going to hand that straight to Mike because those I think are straight in his wheelhouse.

Yeah. Good morning, Don. I think the best way to answer that is just looking at demand growth, some of the supply adjustments and what is the overall supply and demand balance that we see. We're projecting that demand for the main phosphate products grows about 1.2 million tonnes. And if you look at some of the supply changes, we've taken about 1.5 million tonnes offline with the Plant City idling. And when you look at the ramp-ups of capacity, the Jorf Phosphate Hub will produce a few more tonnes – hub number three will produce a few more tonnes this year. The fourth hub, the startup of that has been delayed probably until the second half of the year. But you probably can squeeze maybe 900,000 tonnes or 1 million tonnes out of there. And then the MPC ramp up, I think we've indicated last time that in 2017 it produced about 477,000 tonnes. We think it will produce 1.5 million to 2 million tonnes this year, so there's an incremental tonnage there. And then if the Chinese continue along this pace where exports are off 1 million tonnes, that basically results in about 1.5 million-tonne supply gap for 2018. And that's why going back to the previous question, we're not predicting that the world runs out of phosphate. But what we are predicting is that the supply and demand balance is such that you're going to have to see somewhat elevated prices and margins maybe to crimp a little bit of the demand growth, but also stimulate a little bit more supply coming from established producers, whether it's in the U.S. or other places.

Your next question comes from the line of Jeff Zekauskas with JPMorgan. Your line is open.

Thanks very much. What percentage of your ammonia requirement from CF will you purchase in the first half or what's the cadence of those purchases through the year?

Thanks, Jeff. I'm going to hand that straight to Corrine, but I can say in broad terms that with our own production of circa 400,000 tonnes in Louisiana and our off-take of 600,000 tonnes, which is paced basically even throughout the year, so our off-take at the low end and today we'd be taking the low end from CF, that'll be paced evenly throughout the year. So, our own capacity will be somewhere around 1 million tonnes to a little bit higher than that short tonnes per year. The remainder, which is somewhere around 0.5 million tonnes, we will purchase. That's for Florida, not including Brazil, but the other 0.5 million tonnes, we'll purchase on the open market. So, approximately two-thirds of our total tonnage will come from either the CF or our own production. Corrine, did you...?

Yeah. I don't have much to add to that, Joc. It will be relatively even paced throughout the year. We've got our own dedicated logistics shipping and that requires a steady take pattern.

Your next question comes from the line of Adam Samuelson with Goldman Sachs. Your line is open. Adam Samuelson - Goldman Sachs & Co. LLC: Yes. Thank you. I was hoping to get a little bit more color on the outlook and what's changed and took the EPS range for the year up $0.15 at midpoint. Obviously, the tax rate went up within that on higher Brazil earnings, but just can you calibrate a little bit how the outlook for potash and phosphate and nitrogen changes the order of magnitude between the three businesses? I think there was an allusion to a belief that potash prices would be stronger in the second half than prior and just a little bit more color around the outlook would be helpful. Thank you.

Yeah. Thanks, Adam. Look, what we're probably seeing today in terms of our EPS outlook going up is as we get more into the year, we're seeing stronger potash and phosphate fundamentals. In potash, we're seeing a good demand picture, low global inventories, which I could throw at Mike for a second, but also expectations that what we're not seeing in the market is a lot of the new production yet. And so, as we get further along in the year, we have more confidence that that will be later on to come. And it's virtually the same for phosphates where we see great demand around the world and slower to come on new production. So, what we don't expect to see is any kind of post-season weakness that we might have, had there been more new production coming in. So, really, that's what's driving it. And then, of course, as we've now got three to five months in Brazil versus one month at our last earnings call, we now have a much greater faith in achieving our $100 million of synergies plus the tailwinds of both better pricing and better Brazilian reais. And I might throw that to Tony in terms of the reais impact.

And I'll add just also we are continuing to have the progress from a production standpoint, from an operational efficiency standpoint. We also have the offsets, however, from Q1 and carrying into Q2 the logistics issues, principally the rail issues in Canada. And, of course, you mentioned – Adam, you mentioned a higher tax rate, which also is impacting us to the downside. But we want to note that from a cash tax standpoint, we're not expecting to pay cash taxes this year. So, from a cash flow perspective, that higher tax rate will not impact us.

So, Adam, to summarize, really, it's more confidence in the future of this year and going into the second half of this year than we were able to have at the start of the year.

Your next question comes from the line of Michael Piken with Cleveland Research. Your line is open.

Yeah. Hi. I was wondering if you could give an update on how the spring season is going in the U.S. and in particular, we had obviously a delayed start, but what you're seeing in terms of application rates and any read you might have on the need for distributors or retailers to have to restock during the spring or do you think they already have sufficient inventories. Thanks.

Thanks, Michael. I'm going to push that over to Mike to answer the question. But one thing I will say is just recognize that in today's world, the ability to apply fertilizer and plant very rapidly has increased quite a bit even over the last, say, decade. So we think that the ability to catch up is a lot better than it ever was before. Mike, do you want to talk a bit about the spring season?

Sure. Hey. Good morning, Michael. Yeah, we got off to a slow start, but we're rapidly catching up. You probably saw the planting progress numbers from yesterday. The corn planting as of Sunday was 39% complete, soybean planting about 15% complete. The corn planting is still running a little bit behind the five-year average, but if you look at some key states like Illinois, Indiana, they are running well ahead of the five-year average. And in the case of soybeans, we're off to actually a faster start than normal in terms of planting. So, as Joc said, farmers can sink seeds into the soil pretty quickly with the current technology. The other point is, all of the feedback that we're getting from our account managers is very positive in terms of farmers applying rates at normal or even above normal rates. And as we've been saying for a long time, the demand drivers continue to look very strong. The world's and North America's harvested big crops. There's a need to replenish those nutrients. And secondly, when you look at the affordability index, P&K continue to be good buys for farmers and we think that they are actually rebuilding some rates and with higher yield objectives, in some cases, increasing rates. So the season is really shifting into high gear as we move a little bit further north and the weather cooperates. So I think it's going to be a great spring season.

Your next question comes from the line of Steve Byrne with Bank of America. Your line is open.

Yes. Thank you. A couple transportation logistic questions. What's your outlook for the resolution in the rail issues of the Canadian rail lines in the near term? With respect to the comment about Canpotex being sold out through June, is that effectively a rail fleet limitation or port handling limitation? What limits that? And is that something that can be addressed? And then, lastly, transportation issues in Brazil are meaningful. And is that really just a productivity drag for your business down there or does having a distribution business down there represent a value proposition to you?

Okay. Steve, we're going to take these one at a time. And what I'll do is I'll come back to Brazil in a second after we get Corrine to talk about our outlook for the Canadian railways and what's going on there. But let me just say, look, the weather-related issues that the Canadian railways faced were definitely seasonal and delays because of cold weather and snow. Those we fully expect to recover from. The one that is probably a little more unpredictable is what is the potential for a strike with the Canadian Pacific Rail, and that we really don't have a reasonable place to start in terms of a view. Corrine, do you just want to talk about how we're shifting those volumes and when we expect to see those volumes come back?

Sure. As Mike noted, spring season is making up the pace pretty nicely at this point in the quarter. We do have some weather and rail-related tonnage amounts that flipped from first quarter we think into the balance of the year. But our guidance for the year, as Joc said, is unchanged. We think we'll get that volume back. Canpotex is sold through June. That's a combination of limitations, both the ability for producers to supply those tonnes given the big North American spring season that's going on as well as some rail import logistics. Over the long term, it absolutely – we are working on ways to improve that capacity. So there is more capacity for exports in the future. And I guess, Brazil, you want to turn that over, Joc, to...

Yeah. Let me just turn to Brazil now and, obviously, our distribution business and the proximity of our new production business to the markets, the key agricultural markets, we think is one of the key competitive advantages that we accomplish through this. And then the improvements in our internal logistics in Brazil are the other area where we can add real value through this acquisition. Rick, do you want to just talk a little bit about that?

Yeah. Good morning, Steve. In Brazil, we're seeing some real advantages from all the moves that we make with product. And when we look in Brazil, about 78% of what we move is by truck. And so when we look across our whole business, we've been able to develop synergies – significant synergies, roughly at least $5 million of movements by truck that we're taking advantage of back-hauls with trucks moving to ports, trucks bringing material that we produce to customers. And so the optimization of our overall grid for freight has created some pretty significant advantages. And it's one of the key advantages we find to being both in distribution and production in Brazil.

Yeah. Let me just summarize that. I think over 10% or around 10% of our total synergies and run rate for this year will be created through transportation and logistics, particularly the optimization, as Rick said, of the new freight grid and, of course, the optimization of the use of the Port of TIPLAM.

Your next question comes from the line of Jonas Oxgaard with Bernstein. Your line is open. Jonas I. Oxgaard - Sanford C. Bernstein & Co. LLC: Morning, guys. I was wondering if you could talk a little bit more on what you've been doing and seeing now that you've been running the Brazilian assets for almost three months – for more than three months. And as a follow-up, I know there was a condition on the purchase that would have you pay an extra payout with high phosphate prices. We clearly seem to be in that territory. I realize it's a good problem to have, but could you talk a little bit about how that payout is structured and what do you expect to pay out this year?

Sure. Thanks, Jonas. Good morning to you as well. Look, let me start with talking about what we're seeing in Brazil. I've been down there a couple of times this year already and Rick's down there, of course, all the time, so we're going to give it over to Rick, but let me summarize. The trips that Rick and I have taken together, I guess, one of the things that's probably encouraging to us is we see the opportunities as probably better than what we had expected. And our confidence in reaching our targets is better than what it would have been three months ago. And let me come back to kind of some of the high-level things we're seeing that give us that level of confidence. First, of course, is the markets are better than what they were even six months ago, which is starting to give us some real tailwinds. But just to put what we've done ourselves, already in the first quarter, we have been able to increase productivity at these operations through a combination of debottlenecking, recovery improvements, shift changes and people reduction where we're seeing a total productivity in terms of phosphoric acid per full-time employee of about 43% across the business. And so, now our level of confidence that we can get that $100 million run rate to flow through all the way through COGS this year is quite high. And Rick just talked on the last question about the transport advantages. You start adding those up, and those give us a great deal of confidence in where we're going long term in that business. Rick, do you want to talk a little bit more about Brazil and where we feel (35:06)?

Yeah. Good morning, Jonas. One of the things that – a significant takeaway and visitors that we've had through are amazed. We're making some pretty significant changes. We've made structural changes at plants in the first month of operation. We've looked at how we look at shifts, how we look at different – we're changing a lot of things in the business. But the energy from the people to support that change is tremendous. There's quite a bit of support. People see things that need to be changed and needed to be changed. And as we've looked for this $100 million that we're talking about run rate for the first quarter, probably over half of that came from the bottom-up, from the people that are operating our plants that see the changes that need to be made and are willing to step up and say, hey, we should think about doing this different. And this idea of looking to do things different is something we're building on and is really quite exciting to see how this will roll into our busier second and third quarters.

Your next question was on the provisional payments to Vale based on the market conditions and, yes, we are getting closer to it. And I'm going to hand it over to Tony to give you a little more detail on that, Jonas. But what I will say is I absolutely agree with you, both Vale and Mosaic would be extremely happy if we had to pay out that contingent payment. So, Tony, do you want to just talk about the details?

Certainly, Joc. Good morning, Jonas. As Joc said, we'd be thrilled if we're into this territory, but don't expect it. In fact, our full-year guidance would have to be higher if we got into the earn-out/payout levels. And just to illustrate, at today's reais level, which is in the 3.50s, we'd need an average MAP price for the rest of this year approaching $500 for a delivered Brazil. So, again, we're not expecting it to reach that level, but we'd be thrilled if it did.

Yeah. All of our business would greatly benefit from that.

Your next question comes from the line of Joel Jackson from BMO Capital Markets. Go ahead, please. Your line is open.

Hi. Good morning. So, let's say, Brazil's going to plan. So, what did you sort of learn the last few months that made you change the overall tax guidance of 20% to 30% because it does look like phosphate is doing better than you thought? And then what would be your tax guide for 2019? Thanks.

Thanks, Joel. Let me touch on that, and I'm going to hand it over to Tony again, of course. Yes, you're right. We have increased our GAAP effective tax rate to the high 20s from the low 20s, and it's really driven by a higher mix of earnings from Brazil. Brazil has a tax rate of 34% and, of course, those are no longer deductible against U.S. taxes. So, this new tax law changes that. And I have to say, at this point, we've optimized our operations under the old tax laws. And although we're going to change that and try to optimize against the new tax laws, in the transition, there are some quirks that will drive higher taxes. Now, what I would want to really note, though, is cash taxes are expected to remain immaterial through 2018. In Brazil, we expect to pay zero tax because we have VAT taxes we've previously paid that will offset any of our cash income tax this year. In Canada, depreciation against our Esterhazy mine provides material cash benefits allowing us to pay low tax in Canada. And in the U.S., because of the alternative minimum tax change, we expect to actually receive cash back and AMT refunds will exceed any cash tax liability. And so that's important to note that these are not cash taxes, but actual GAAP taxes. Over time, we expect our normalized tax rate to go back to the mid to low 20s as opposed to where we were before. But, certainly, for this year and next year, cash taxes we expect to remain very close to zero. Tony, what have I got to miss there?

Joc, I think the only thing I'd add is in terms of Joel's question on what's driving the Brazil earnings movements from our prior forecast and I think it's a combination of the synergy realization that's been talked about already, the improved market prices and the devaluation of the reais, which benefits us as well.

Your next question comes from the line of Mark Connelly from Stephens. Go ahead, please. Your line is open.

Thank you. Joc, can you give us a little more sense of the kind of synergy gains that you already have in the bag that are going to flow through in 2018? You mentioned freight being about 10% of it. And second question, is there anything different in the MicroEssentials demand that is going to cause the volume in that segment to be different than the overall trend in P&K? That's it.

Okay. Thanks, Mark. I'm going to hand a little of this over to Rick, obviously, to talk a little more detail on Brazil and maybe Corrine as well to touch on some of the global demand issues for – or not issues, but opportunities for MicroEssentials. But let me at a very high level bucket some of the synergies we're able to achieve here. We expect about 48% – let's call it 50% of the total synergies coming from the operational opportunities, which I discussed, which are better use of our maintenance time, shift changes which allow more time on the equipment, operational attention, debottlenecking and an easy one, we have increased the recovery of phosphoric acid at Uberaba by simply picking up some areas where we were actually spilling from one process stream to another, the P205. So those things we're doing now, we're really focused on that. So that's about half of that synergy for this year. The next one, organization, and that's restructuring of the operation, commercial and finance teams to really take better advantage of the needs and really benchmark against other jurisdictions where the manpower per tonne, let's say, is lower. The next one is procurement. 15% of our expected earnings will be – or improvement will come from procurement. Supply chain, and Rick talked about those, in line freight optimization, the optimization of TIPLAM, is about another 9%. And then another 8% or so come from commercial improvements, which is really what is the opportunity between the two cross-selling and selling more gypsum, selling new products, transferring some of our SSP from outside suppliers to internal. So, all of that stuff is leading to a lot of really good opportunity for us. Rick, do you want to expand on that?

Well, you've got a pretty good list, Joc. And I think the one thing that we need to go back and talk about is how we expect this to show up in the P&L as earnings. So we expect that during the first half of the year, we'll see about a third of this $100 million go to the P&L and the remainder will be in the back half of the year. I think the key piece that drives that is we make changes to the operations. They first have to go through inventory for us to turn it into cash.

And your next question, Mark, was on the MicroEssentials trends, and I'm going to get Corrine to talk about it. But I will say that product continues to do very well, continues to grow and I suspect it will not be that long until production limitations become the limitation to growth again.

I would just add, Joc, great point. We are seeing strong MicroEssentials growth, both in North America but also globally. It's interesting to see the very rapid pace of growth in our MicroEssentials and really all of our premium products internationally as well as in North America. Additionally, on price, the market in pricing premiums remain intact for these products. They truly are adding value for farmers. And so I think that's what's really driving the price premiums we've been able to realize and the demand growth. And Joc is right. It will not be long before we are debating about expanding further for our production capability.

Your next question comes from the line of Jacob Bout from CIBC. Go ahead, please. Your line is open.

Good morning. I had a couple questions. First, on the rail logistics, maybe just help us with the dynamic of CNR versus CP. My understanding is Canpotex is – roughly 70% of it is hauled by CP, is that correct? And who is your main carrier into the U.S. and how much will they carry for (44:47) you? Second question just really on the global potash market, commenting on strength you're seeing there, in your mind, what are the big drivers there?

Okay. Thanks, Jacob. Let me start by saying we have a contract for North America through CP. Canpotex does do the majority of their haulage through the Canadian Pacific with a good portion – I'm not sure the exact number, Corrine might have the exact number of CN. Clearly, if we're hauling to the East Coast, that is a CN haul. If we're hauling to the West Coast, that is predominantly Canadian Pacific, including if we're hauling to Portland because that is actually Canadian Pacific and then traded off to I think the UP or something, isn't it correct? So, anyway – but I'll get Corrine to answer that, and maybe while she's at it – or Mike, you can answer the global potash demand question after.

Okay.

Yeah. And I do not have an exact split on the Canpotex proportion that is CP versus CN. Certainly, for Mosaic, we have a contract with CP, and that's our primary carrier. And for potash demand, I'll hand it off to Mike.

Hey. Good morning, Jacob. Yeah, potash demand continues to look very robust, as you probably know from the recent statistics. We estimate the demand increased about almost 7% in 2017 or over 4 million tonnes to 65 million tonnes. We think we'll see another 2.6% or 1.7-million-tonne increase in 2018. And again, demand growth is fairly broad-based. We do think China, after imports being down and implied shipments being down a little bit in 2017 or at least at lower levels, we'll see a nice rebound there this year. And then across the board increases, led by everywhere from Brazil where we expect continued growth in demand as soybean acres continue to increase a little bit there; Indonesia, Malaysia, all of the majors accounting for the bulk of the growth. But the bottom line is we think 2.6%, which is right in line with our long-term CAGR of about 2.5% over the next five years.

Your next question comes from the line of John Roberts with UBS. Go ahead, please. Your line is open.

Thank you. Could you discuss the benefit of purchase accounting adjustments on inventory of $30 million in the first quarter and $20 million in the second quarter? I normally think about that as a headwind rather than a tailwind when you write up acquired inventory. Because when you sell it, you don't have any profit initially, so how are you getting a benefit there?

Thanks, John. I'm going to hand that straight to Tony to explain, but I can tell you in broad terms that you're right, normally, that is a tailwind. However, there was some high-priced inventory that was revalued on the purchase. And, Tony, do you want to talk about that?

Certainly, Joc. Good morning, John. You're right. Oftentimes that purchase accounting adjustment heads the opposite direction from – and is typically a tailwind, as you said. In our case – or sorry, it's typically a benefit. In our case, it's a tailwind. And the reason for that is that we revalue all of the inventory at a market value in terms of the inventory that was acquired. So, on the day of the acquisition, back in January, we acquired inventory that had been produced under the Vale Fertilizantes ownership and those production costs were higher than market. And so, as of the date of the acquisition, we record that inventory at a market value, which was lower than that previous production cost. So that results in the benefit that you saw in our results, which we've disclosed. We also revalue all of the assets, as you may know, from a purchase accounting standpoint. So that affects things like depreciation as well as ARO accounting, asset retirement obligation accounting, a variety of things. Every asset and liability is recorded at market. So, there's a number of adjustments. Included in that is the inventory adjustment.

Yeah. And I can say in summary to that, John, as you buy this business, you've got to expect a lot of noise in the first couple of quarters. There's just a lot of things that are changing, as Tony said, whether it's the change in depreciation rates, change in purchase accounting for inventory considerations. But in answer to the other piece of your question, I mean, we must say that if you look at the pro formas, this business was underperforming, and because of that, it's a little different than a normal acquisition.

Your next question comes from the line of Ben Isaacson from Scotiabank. Go ahead, please. Your line is open.

It's Oliver Rowe on for Ben. Thanks for taking my question. So, does the phosphate supply gap that you mentioned change your decision on restarting Plant City? Do you think that that project still makes sense in your portfolio? And what sort of, I guess, phosphate prices or stripping margins do you think you need to make it work?

Thanks, Oliver. Let me hit that one rather than getting into too much detail on it, but let me summarize. By idling Plant City and optimizing our phosphate production assets, we effectively tightened the supply. And in spite of new supply coming on, we saw the industry benchmarks increase materially. So, at the same time, this action also lowered our production costs and allowed us to continue to meet our customer demand. So, from our perspective, we think that's pretty good. The net result was a significant increase in our profitability across all of our 16 million tonnes that we produce in our phosphate in both Florida and Mosaic Fertilizantes in Brazil. So, all I can say at this stage is we will revisit Plant City in the fourth quarter, but we really feel that what we did there was exactly what we needed to do and what the market needed at the time.

And our last question comes from the line of Christopher Parkinson from Credit Suisse. Go ahead, please. Your line is open. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Great. Thank you. Just in terms of further developing the Brazilian market, how are you thinking about sort of the long term, especially developing northern port access further and also just obviously consequently reducing your own costs? Do you foresee yourself as a leader here? And also just do you have any quick views on the political front, given elections later this year? Thanks.

Well, thanks, Chris. That's a fair bit to cover, the last one we could probably talk about for hours. But let me start about the Brazilian market development. I think over time, northern access and that whole access to the Tocantins area and, call it, Northwest Mato Grosso is a definite it's going to happen. It's a question of when. And I think as it happens, that's one of the big opportunities I think for us particularly on a distribution side because we're going to be a group that can really get in there and be leaders in that space. So I definitely think we are now the production leader in Brazil. We're certainly one of a couple of distribution leaders and I think that relative size compared to the market really allows us to take opportunities that others may not be able to do. So I'm going to hand it to Rick to just talk about this a little bit and he may be able to give you some insight into the politics, although those are pretty muddy.

Are they ever, Joc? Good morning, Chris. I think as you look at northern access to Brazil, it is going to grow. And I think the precursor to that is the grain movements that are going there and year-over-year increase in grain movements has been really quite significant through the northern outlet, which is improving the basis for farmers in the area because they're spending less money on logistics. The back movement of fertilizer hasn't been growing at the pace because there's infrastructure that needs to be developed. That will be developed over the next couple years. But in the position we're in is both in production and distribution across the major production areas we'll definitely be involved in the development of the northern access to the Brazil Cerrados. As far as the politics go, I will stay completely out of it. It's in a state of flux, just like a lot of other countries, and stay tuned. This one is coming fast.

The only thing too I will say about Brazil and I think it's worthy of mentioning was you talked about politics is despite the economic, political and lack of reform that they're able to get now with sort of a lame duck government, if you will, with the new election coming this fall, I will say, the ag sector has been a real standout and continues to grow. And I think this Northwest Corridor will really be the next horizon of growth for Brazil and maybe for the world from an agricultural perspective.

Okay. With that, look, I hear a rumor out there that another company may be reporting today. So I'm going to call it in now and allow you guys to get on with the rest of your day. But, in closing, let me just say a couple of words here which is, first of all, as we look forward this year, we see strong EBITDA growth. We're now guiding to $1.7 billion to $1.9 billion in 2018, which is up about 50% on a midpoint from last year. So we're seeing some real benefits. We're starting to see the Mosaic Fertilizantes take a real stand and we now have gone from expecting it to be somewhat neutral in terms of EPS to now being accretive to probably in the range of $0.05 to $0.10 accretive and contribute in the range of $300 million of EBITDA to our business. So we're really starting to see an investment that is going to quickly show real dividends for the company and a real opportunity for growth into the future. So, overall, with the markets, we're very confident on the year. We're starting to see some changes that we think are important in the ag space and in our space. But let me conclude then with the three – reiterate our key messages. Our business did perform well in the first quarter of the year and we expect strong markets and our good execution to continue through 2018. The work we've done and are doing to transform our potash, phosphates and Fertilizantes business are delivering meaningful long-term value. And as I said earlier, we're ahead of schedule in Brazil and we're really excited for the prospects there. So, overall, Mosaic is executing very well, markets continue to improve and we are generating substantial momentum. Thank you for joining us today. Have a great day.

This concludes today's conference. You may now disconnect.