Nutrien Ltd. (NTR) Q3 2025 Earnings Report, Transcript and Summary

Greetings, and welcome to Nutrien's 2025 Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A.

Thank you, operator. Good morning, and welcome to Nutrien's Third Quarter 2025 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form. I will now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments.

Good morning. Thank you for joining us today to review our results, strategic priorities and the outlook for our business. Through the first 9 months of 2025, Nutrien delivered structural earnings growth through record upstream fertilizer sales volumes, improved reliability and higher retail earnings. We raised our 2025 potash sales volumes guidance range for the second time this year and maintained the midpoint of our retail adjusted EBITDA guidance, highlighting the stability of this business throughout 2025. At our June 2024 Investor Day, we communicated a set of strategic objectives and targets that we believe provide a pathway to increase our earnings and free cash flow. Our results through the first 9 months show significant progress towards achieving these goals. Starting with our upstream operating segments. We increased fertilizer sales volumes by approximately 750,000 tonnes compared to the same period last year. These results highlight the capabilities of our world-class operations, extensive distribution network and strong customer relationships that we have built over many decades. In potash, we delivered record sales volumes in the first 9 months. We increased the percentage of ore tonnes cut with automation to over 40%, maintaining our position as one of the lowest cost and most reliable global potash suppliers. Our nitrogen operations achieved a 94% ammonia utilization rate through the first 9 months, up 7 percentage points from the previous year. Our operating performance demonstrates the significant progress we are making on reliability initiatives across our Nitrogen business. Within our Downstream Retail segment, we delivered 5% higher adjusted EBITDA in the first 9 months by driving down expenses and growing our proprietary product gross margin. We remain focused on efficiently supplying our growers with the products and services they need to maximize returns. As previously communicated, we are on track to achieve our $200 million cost reduction target 1 year ahead of schedule. These efforts contributed to a 5% reduction in SG&A expenses through the first 9 months of 2025. We lowered capital expenditures by 10% on a year-to-date basis through optimization efforts focused on sustaining safe and reliable operations, along with a highly targeted set of growth investments. Delivering on these structural growth drivers, reducing expenses and optimizing capital spend has supported our ability to further enhance return of cash to shareholders. We allocated $1.2 billion to dividends and share repurchases in the first 9 months, representing a 42% increase from the prior year. To put this all together, Nutrien is demonstrating significant progress across all our strategic priorities, delivering higher earnings and cash flow while increasing shareholder returns. At our Investor Day, we also communicated a focused approach to simplify our portfolio and review noncore assets. To date, we have announced the completion or have agreements in place for the divestiture of several noncore assets, including our equity interest in Sinofert and Profertil as well as smaller assets in South America and Europe. These divestitures are expected to generate approximately $900 million in gross proceeds. We intend to allocate the proceeds to initiatives consistent with our capital allocation priorities, including targeted growth investments, share repurchases and debt reduction. We continue to assess assets on the merits of strategic fit, return and free cash flow contribution. As a result, we have initiated a review of strategic alternatives for our Phosphate business. This process will include evaluating alternatives ranging from reconfiguring operations, strategic partnerships or a potential sale. We intend to solidify the optimal path forward for our Phosphate business in 2026. In October, we completed a controlled shutdown of our Trinidad Nitrogen operations due to uncertainty with respect to port access and a lack of reliable and economic gas supply. Our Trinidad operations were projected to account for approximately 1% of our consolidated free cash flow in 2025, a contribution that has been under pressure for an extended period of time. We continue to engage with stakeholders and assess options to enhance the long-term financial performance of our Trinidad operations. Each of these portfolio actions are driven by a focus on enhancing the quality and consistency of our earnings, improving cash conversion and supporting growth in free cash flow per share over the long term. Now turning to the market outlook. In North America, harvest is in the late stages of completion with the pace supportive of a normal fall fertilizer application season. In line with the stronger plant health season we experienced in the third quarter, we expect a record crop will support the need to replenish nutrients in the soil. Summer crop planting in Brazil started at a faster-than-average planting pace, which has supported crop input demand and increased potash purchases since the beginning of the fourth quarter. In August, we increased our global potash shipment projection for 2025 to a record 73 million to 75 million tonnes. We expect demand will continue to grow at the historical trend level in 2026 with potash shipments forecast between 74 million and 77 million tonnes. This would mark the fourth consecutive year of demand growth, an indicator of the stability we are seeing in global potash markets. Our positive outlook is formed by strong potash affordability, large soil nutrient removal from a record crop and low-channel inventories in most major markets. This is most evident in China, where reported port inventories are down by more than 1 million tonnes year-over-year. In addition, we anticipate limited new global capacity additions in 2026 with announced project delays and remain constructive on supply and demand fundamentals. Global nitrogen supply challenges are expected to support a tight supply and demand balance going into 2026. Ammonia markets are currently very tight due to plant outages and project delays, and we anticipate the emergence of seasonal demand to further tighten urea market fundamentals. I will now turn it over to Mark to review our results, full year guidance and capital allocation priorities in more detail.

Thanks, Ken. As Ken described, our third quarter and year-to-date results highlight strong execution on our strategic priorities and supportive market fundamentals. Nutrien delivered adjusted EBITDA of $1.4 billion in the third quarter, a 42% increase compared to the prior year. In potash, we generated adjusted EBITDA of $733 million in the third quarter, which was higher than last year due to higher net selling prices. Potash prices remained affordable on a relative and absolute basis, which supported sales volumes near record levels for the quarter. Our year-to-date controllable cash cost of product manufactured was $57 per tonne, which was slightly higher than the prior year due to lower planned potash production and increased turnaround costs. At these levels, we continue to track favorably against our goal of maintaining a controllable cash cost that is at or below $60 per tonne. We raised our full year potash sales volume guidance to 14 million to 14.5 million tonnes, supported by strong offshore demand. Canpotex is now fully committed through year-end, and we anticipate a similar split between offshore and domestic sales volumes in the fourth quarter compared to the prior year. In nitrogen, we generated adjusted EBITDA of $556 million in the third quarter, an increase compared to last year due to higher net selling prices and higher sales volumes. We advanced planned turnaround activities at our Redwater and Borger nitrogen facilities and achieved ammonia operating rates that were well above the same period last year. Our nitrogen sales volume guidance range of 10.7 million to 11 million tonnes reflects the assumption of no additional sales volumes from our Trinidad operations for the remainder of the year. Reduction in Trinidad volumes is expected to be partially offset by the continued strong performance of our North American nitrogen operations. In phosphate, we generated adjusted EBITDA of $122 million in the third quarter as higher net selling prices and sales volumes more than offset increased sulfur costs. Our phosphate operations achieved an 88% operating rate in the third quarter as reliability and turnaround activities completed in the first half led to a significant improvement in performance. Our Downstream Retail business delivered adjusted EBITDA of $230 million in the third quarter, up 52% from prior year. We saw strong crop input demand across the U.S. corn belt, consistent with our previous expectations for a strong plant health season, providing Nutrien with the opportunity to efficiently serve growers in their efforts to maximize crop yield. Our full year retail adjusted EBITDA guidance was narrowed to $1.68 billion to $1.82 billion, reflecting the continued stability of this business and execution of our strategic growth initiatives in 2025. We expect North American crop nutrient volumes to be slightly higher in the fourth quarter and per tonne margins similar to the prior year. Our expense reduction initiatives and Brazil improvement plan continue to be in line with previous expectations, helping offset the gain on asset sales and other nonrecurring income items realized in the fourth quarter of 2024. Turning to capital allocation. Last year, on the third quarter call, we discussed our plans to optimize sources and uses of cash as we introduced a refreshed capital allocation framework. We've taken decisive actions to execute our plans and our priorities remain consistent. From a uses of cash perspective, we're focused on sustaining our assets on a risk-informed basis and further evaluating opportunities to optimize spend as we complete our portfolio optimization initiatives. We're also investing in a narrow set of growth initiatives that have a strong fit with our strategy, attractive returns and a lower degree of execution risk. And we continue to build on our long track record of stable and growing dividends per share and are deploying capital towards ratable share buybacks that provide for more consistent returns of cash to shareholders. As an illustration, through the first 9 months of 2025, we repurchased shares at a rate of approximately $45 million per month and anticipate a similar run rate on a full year basis. As we enhance our structural cash generation capabilities and deploy proceeds from the announced divestitures, we also expect to meaningfully lower our net debt position by year-end and gain greater flexibility to allocate capital through the cycle. I'll now turn it back to Ken.

Thanks, Mark. We have a constructive outlook for our business, which is supported by expectations for healthy crop input demand and growth in global potash shipments in 2026. We continue to progress our strategic initiatives and take actions to simplify our portfolio, enhancing earnings quality, improving cash conversion and supporting growth in free cash flow per share over the long term. These features underpin Nutrien's competitive advantages and offer a compelling investment case for our shareholders. Finally, I would like to share an update on the advancement of our succession planning process. After an outstanding 30-year career at Nutrien, Jeff Tarsi will be stepping back from the leadership role of our Downstream Retail business at the end of 2025. I'm pleased to announce that Chris Reynolds has accepted the leadership position for our Downstream business beginning in 2026. Chris has been with the company for 22 years and has held senior leadership positions in our sales, potash and commercial functions. He brings deep knowledge of our business and the markets we serve across our downstream network. Jeff will remain with Nutrien in an advisory role to support the transition and execution of our downstream strategic priorities. We would now be happy to take your questions.

[Operator Instructions] The first question comes from Andrew Wong from RBC Capital Markets.

So just regarding that Phosphate business today. How would you say cash generation for that business compares to the rest of your business? Are there certain parts of the Phosphate business that maybe are better cash generators than others? And then just regarding that strategic review, is there -- is this about the business maybe just being better suited to run a different way? Or is there something specific about the phosphate assets or the phosphate outlook that's prompting the review?

Yes. Thank you, Andrew. At our June 2024 Investor Day, we talked about this focused approach to simplify our portfolio, with the focus really being on quality of earnings and free cash flow over the long term, and that's absolutely relevant to your question. It is true that we produce phosphate out of White Springs and Aurora. But at the same time, it's only contributing about 6% of our EBITDA. So as we looked at it, it compels us to do a strategic review. And of course, this is on the heels of some of the portfolio of the work that we've been doing, disposing our Sinofert shares, the process that we're in to close Profertil by the end of the year and other noncore assets. And that's all adding up to about $900 million to date. For our Phosphate business, and again, to your question, we're looking at a range of alternatives across our strategic review. And that could be everything, yes, from revised and reconfigured operations with the goal of maximizing and optimizing free cash flow and strategic partnerships that we'll be looking at and the sale as well. We'll be looking at all those alternatives, and we expect to have some conclusions about the path forward in 2026.

Our next question is from Ben Isaacson from Scotiabank.

Mark, I have a question for you. You've worn the CFO hat for a little over a year now. I was hoping you could reflect on what initiatives you've undertaken or what's changed in your role? And then as part of that, last summer in '24, targets were set for 2026. And now as we're 7 to 8 weeks out from the start of '26, can you just give us a check-in on just some of the big targets that were set and how those are tracking?

Ben, thanks for the question. So I'll maybe just start by reiterating some of the comments that Ken and I provided in our prepared remarks this morning. So as you noted, Ken and our team, we laid out a set of objectives and targets at the Investor Day in June 2024. And as we've said this morning, those were focused on levers to drive structural growth in earnings and free cash flow over time. If you look at the progress we've made on a year-to-date basis and our full year guidance, I think you can see we've made very significant progress on those initiatives. If you look at upstream fertilizer sales volumes based on the midpoint of our guidance for 2025, we're on pace to deliver 1.4 million tonnes of volume growth compared to the baseline we set at Investor Day from 2023 results. And obviously, this has come from a few different areas. There's been a focus on reliability, debottlenecking projects in nitrogen and then utilizing our existing potash capacity. And all of those are, of course, very low capital intensity initiatives, and they've got strong cash margin contributions. From a downstream perspective, we set targets to grow earnings through a number of levers, including expanding proprietary products, our network optimization, expense management, margin improvement in Brazil and bolt-on acquisitions, primarily in North America. And if you look at our progress to date versus that 2023 baseline, we're projecting that there will be $300 million in retail EBITDA growth at the midpoint of our 2025 guide. And we're pleased with that, and we think that's something that can continue over time. In terms of cost discipline, as Ken mentioned, we set a $200 million cost reduction target for 2026. We're a year ahead of schedule on that. And of course, we're always looking for more. And also, as Ken mentioned, we've completed or have agreements in place to divest noncore assets as part of our portfolio review that will have generated once closed about $900 million over the last year. And these are assets that didn't fit the strategy, weren't consistently generating cash flow for Nutrien. And so we're pleased with that as well. So all of these initiatives feed into that objective that Ken talked about in terms of increasing structural sources of cash flow. And then, of course, beyond this, as Ken has just mentioned, we've announced a strategic review of the Phosphate business, and we continue to assess our options at Trinidad. And all of that's in the spirit of increasing quality and resilience of free cash flow. From a uses of cash perspective, we set a target at that Investor Day that you highlighted to reduce CapEx to $2.2 billion to $2.3 billion. And as you know, we've overachieved on that target through optimization efforts. Our guidance this year is $2 billion to $2.1 billion, and we're focused on maintaining discipline in this area moving forward. And then finally, one of the items you've heard us speak about over the past year quite a bit is to further enhance our cash returns to shareholders, primarily through more ratable share repurchases. Through the first 9 months, we increased return of cash to shareholders through dividends and share repurchases by 42%, and we've ratably bought back shares at that pace I mentioned of around $45 million per month. And Nutrien shareholders should continue to expect that ratable repurchases are going to be a part of a consistent staple in our capital allocation framework going forward. So as Ken said and I've said, we think we've made a lot of progress over the past year on our strategic priorities. We're continuing to take actions to enhance our competitive position, and we believe this will drive structural growth in free cash flow per share over the long term.

Our next question is from Hamir Patel from CIBC Capital Markets.

Ken, beyond the strategic alternatives review of phosphate, whatever plays out in Trinidad and the divestitures you've already announced, do you see any other meaningful opportunities for noncore asset sales over the coming years?

Yes. Thanks, Hamir. No, that -- I think for the time being, we're really focusing on the things that we've talked about. And so we've talked about phosphate, obviously, working very hard on the Trinidad file and assessing options as we go forward there and making sure that we carry on with our improvement plan in Brazil. Those would be the three big areas of focus, I would say, going into and through 2026. And again, as Mark just described, expecting that as we progress through that work, really an improvement in quality of earnings and free cash flow.

Our next question is from Joel Jackson from BMO Capital Markets.

Maybe a shorter-term question. Maybe talk about the fall season. You talked about maybe crop nutrient demand being up year-over-year in Q4. Maybe talk about for the fall season. Maybe talk about 85% expectations a few months ago. How is this fall playing out? It's been an early harvest, but there's a lot of uncertainty going on. One of your large competitors is talking about seeing phosphate demand deferral, which may also lead to potash demand deferral. Can you comment on all that, please?

You bet, Joel, thanks for the question. Yes, we haven't changed our -- the midpoint of our guidance in our Retail business, as you know. And we're staring into the fall, which the next 2 weeks will be kind of critical for that. As we've mentioned, we're on track in Brazil for this year. Here in North America, we're coming off a strong Q3, good plant health season for both crop protection and crop nutrition. Heading into the fall here, yes, we expect that nitrogen volumes probably up. Potash volumes may be a bit flattish from last year and perhaps phosphate volumes a bit down. But it's a few days into November here, Jeff, I'll pass it over to you.

Yes. Thanks, Ken. Yes, so we -- as you would have seen in our results, our growers stayed very engaged through the third quarter. In our business, Ken mentioned very strong plant health sales in that quarter as growers were working to protect yields. And I mentioned that because we're just at the completion of harvest now and crop yields look very strong, especially across corn and soybeans. Strong crop yields lead to what we need to replenish for going into the '26 crop. We're doing a lot of soil testing right now. Our largest 2 weeks of application are the week we're in right now and this following week. And to date, weather looks favorable. From that standpoint, we're seeing pretty robust action right now out in the field. A lot of anhydrous going down and then of course, our dries P&Ks as well. But I'll remind people that growers footfall applications out in order to get ahead of the next year's crop. And corn looks strong again for '26. And so growers are going to want to get out ahead of that in the best way that they can. And as Ken said, I think in our projections at the midpoint of our guidance, we just got slightly elevated volumes compared to last year. And if you remember last year, we got -- we did get into some weather issues, especially as it related to anhydrous ammonia.

Our next question is from Chris Parkinson from Wolfe Research.

Great. Just real quick, when you take a step back on your nitrogen strategy, could you just kind of go through how you're thinking about the intermediate term in terms of what facilities kind of can make up a little bit of that gap based on what cadence you were seeing out of the T&T assets in 2025? And perhaps a quick comment on just how you're thinking about the longer-term strategy. I mean are you interested in assets? Would you ever consider a greenfield again? Perhaps that's still a question. But just an updated thought process would be very helpful.

No, that's great. Thank you, Chris. I mean as you know, I think we've been working on reliability issues in nitrogen and challenges that we've had there and deploying meaningful sustaining CapEx and focusing on some of the bad actors in our portfolio and our fleet. And those -- that's yielding results with the 94% operating rate that Mark mentioned earlier. We're also working on our ongoing debottlenecking and brownfield initiatives that are adding tonnes. When we talked about 11.5 million to 12 million tonnes at our June 2024 Investor Day, certainly part of those volumes were coming from those debottlenecking and brownfield initiatives. And we have more opportunity there as it relates to expanding our nitrogen volumes. And we would look at those opportunities, which would be low CapEx, high-margin opportunities prior to certainly looking at something like a greenfield opportunity. In the context of the broader portfolio, which, of course, includes Trinidad, I mean, as we speak, high operating rates in our fleet ex Trinidad are helping to make up some of the difference with our Trinidad operations being, of course, shut down, as you know. In Trinidad itself, we are looking at our various alternatives, assessing options because we do need line of sight to stable and economic gas supply and, of course, access to port. So we're working -- talking to the Trinidad government about what those sort of optimal operating conditions might be. And again, as I say, assessing our path forward. Stepping back from it all, our Investor Day targets, 11.5 million to 12 million tonnes next year, that did include us achieving our full complement -- the 12 million tonnes, our full complement of natural gas supply in Trinidad. The 11.5 million tonnes, the math there would say that you sort of get the 80% of our gas complement in Trinidad to get to that 11.5 million tonnes, depending on the outcomes in Trinidad now, we'll see as our operating rates come up in the balance of our fleet, and we chart our path forward on the island there in Trinidad.

Our next question is from Vincent Andrews from Morgan Stanley.

Could you speak a little bit about the Latin American, maybe more specifically the Brazilian environment, just both as we exit this year and into next year, I see you're projecting another year of growth there for potash shipments. But maybe you could just sort of talk to the credit conditions and the incremental financing terms in terms of how fast you're able to get paid down there still? And what gives you the confidence that, that market can grow again in '26 off of very high levels despite the challenging farmer economics and limited credit that's available?

Yes, thanks for the question. So yes, I think the most important point for us is that our -- we're on track with our improvement plan in Brazil. And that's included the things that we've talked about, the shattering of our -- idling of our five blenders. We've talked about unproductive locations and having closed 54 of them now, workforce reduction, 700 people. But to the question, also allocating resources with a real focus on credit and credit collection. And that is, again, largely playing out as we had assumed here in 2025 and hence, part of the story of being on track with our improvement plan. As it relates to growth in agriculture in Brazil, we have seen, once again, a 2% increase in Brazil from last year. Last year, 47 million tonnes of fertilizer went in land on to Brazilian farms, and that's up again 2% this year. And it's the case that looking at corn and soybean prices, Brazilian farmers continue to do the things that they need to do to maximize yield and appropriate application rates are part of that story. So we've been here before, but year-over-year, the Brazilian farmer with expanded acreage and a focus on yield continues to import more volumes. And of course, we, as Nutrien and Canpotex have been the biggest part of that story, now the largest supplier of potash into Brazil. The last thing I'll say is we continue to focus on our proprietary products, also experiencing growth on Brazilian farms, and that will continue to be a focus of ours as well.

Our next question is from Steve Hansen from Raymond James.

If I'm thinking back in time when you've actually divested a phosphate asset, I think you've really tried to retain much of the strategic value through some longer-term offtake, at least in the initial term. In the context of the current review, really what is the optimal outcome for you? It sounds like all options are on the table, but have you thought about trying to maintain access to the supply as it relates to your integration benefits? You're just looking for someone to cut you a check. How do we think about the optimal outcome here for you as you go through this review process?

Yes. No, thanks, Steve. And actually, it's really everything, all of the above. So we will look at a range of alternatives as it relates to, as I mentioned earlier, reconfigured operations, partnership sale and could that include some form of contractual arrangement. I suppose that's possible. But I can tell you what we will be solving for is free cash flow. And yes, we could probably achieve that in a number of ways. It's early days for us and we just announced their strategic review. The time is good for that. Obviously, what's happening in the phosphate market, the focus on mineral that's as important as they come in the U.S. and of course, the focus on -- in the U.S. on domestic security of supply for something as critical as phosphate. So the time is right for us to announce this. And now that we've announced it, we can talk freely about these strategic options and do the full review assessment. Again, we expect to have line of sight to that in 2026. So we'll have more to talk about.

Our next question is from Kristen Owen from Oppenheimer.

A couple of things on the Retail business. First, anything that maybe shifted from 2Q to 3Q? I know we had some weather issues. So anything that maybe went a little bit better than expected once we account for that timing shift? And then separately, I wanted to ask about your proprietary products, the growth opportunity there, particularly now that one of your large customers is going through a bit of a restructuring themselves, if that offers an opportunity for you or if there's any real change with that large customer in the retail business?

Yes. Thanks for the question, Kristen. I'll hand it over to Jeff to talk about, as you say, any questions, any shifts between quarters, I think the answer there is not really. And then certainly, on proprietary product growth, I think I know the challenge that you're pointing to, but the growth that we're experiencing would certainly be independent of that. But Jeff, over to you.

Yes, Kristen, as far as any kind of shift from Q2 to Q3, no, everything is pretty much going as we've expected this year, especially as it relates to when we capture revenue and margin from that standpoint. You've always got some give and takes in there, but there would be nothing material from that standpoint. On the proprietary side of our business, proprietary products continues to be a very strategic growth driver for our business. We just finished a very strong third quarter as it relates to proprietary products. In the third quarter here, we had significant increase in margins on our nutritionals and biologicals, which again is very impressive. And we also had an uplift to margins in our crop protection side of our business as well in the quarter. And if I look at our portfolio of proprietary products today, I think we're sitting in a good place. I think we basically have what we need from that standpoint. We've got a very strong seed play as it relates to proprietary products, Dyna-Gro and Proven varieties. We've got a very strong play on our crop protection side of the business, and we continue to talk about our nutritional and biologicals. And I think as we go into 2026, you're going to see us introduce over 30 new products globally in our business. About half of those are going to be crop protection products. We're going to introduce seven new nutritional products and several seed treatment products. So again, that's going to continue to be a strategic growth driver for our business, very critical to the growth that we talked about, especially as we reach out into '26.

Our next question is from Matt DeYoe from Bank of America.

This is Salvator Tiano in for Matt. So I want to go back to the phosphate strategic review. And specifically, there was one of the options, not the sale of -- or partnership, but the reconfiguration of the business. And can you clarify a little bit what does this mean? Would you, for example, try to make products more for the feed or the food market or even try to do something like purified acid for LFP batteries? And also, can you remind us what are your ore reserves in phosphate?

Yes. No, thanks for the question. And so reconfigured operations, I think, means probably everything that you just described. And again, we're looking at that at the moment. We have, as I think you probably know, we have improved reliability rates at our Phosphate business. We have reduced costs, and we have diversified our product mix. We've done all those things. At the same time, phosphate still only contributes, as I mentioned earlier, 6% of our EBITDA. So when we use the words reconfigured operations, it is exactly, as you say, looking at life of mine at both White Springs, Aurora, assessing how we best exploit the remaining reserves. There's also additional reserves in the area. So we're looking at all those things. And again, we'll have more to talk about on the path forward as we conduct the review.

Our next question is from Jeff Zekauskas from JPMorgan.

You've stressed share repurchase as a use of capital for you. I think over a 10-year period, the average price of Nutrien is $57. And if it turned out that 5 years from now, the price of Nutrien was still $57, would it be a mistake to repurchase shares or not?

Yes, thanks for the question, Jeff. And, yes, I would say that our strategy now as it relates to return of cash to shareholders, of course, we use the word stable and growing dividend and ratable share repurchases. As we look at the word ratable, we'll always assess whether in the moment, at the time, based on our outlook, based on our assessment of value, whether that makes sense. So it's not with the blinders on at all times, just charging forward, we do think about value as we deploy our share buyback programs.

Our next question is from Edlain Rodriguez from Mizuho Securities.

Ken, so when you look at all the puts and takes in the different nutrients right now, like what's your sense of like near-term pricing movement? I mean which one do you think is better positioned to see an uptick in pricing or do prices need to take a breather from where they are now?

Yes. Thanks for the question, Edlain. It's just going back to the fundamentals and understanding in potash, when we say 74 million to 77 million tonnes and looking at how we're going to supply as an industry, how we're going to supply into that range. I mean at the midpoint, that's about 1.5 million tonne increase from 2025. And that would include probably some supply additions from FSU, maybe 0.5 million tonnes from Canada, 0.5 million tonnes -- and then Laos. And of course, we know Laos -- adding 0.5 million tonnes out of Laos would be a real challenge, I think, given some of the existing challenges in that part of the world. So you look at the level of crop nutrients that have been pulled out of the soil in 2025, you look at the affordability of potash today, and importantly, you look at channel inventories in potash and really being at average or at below average levels, I mean, China is a great example of that, where port inventories are down 1 million tonnes from last year. And so we're constructive on potash heading into 2026, and it's for all of those reasons. Similar story in ammonia and urea, I mean, export restrictions in China on urea having been eased. But just through the summer here, we saw strong demand out of India and now heading into the fall here, seasonal demand, which we expect and probably as we speak, are seeing some firming in urea pricing. And then on ammonia, I mean, on the supply side of the equation, there's all kinds of challenges there and even our own Trinidad operations, which are shut down this year. I would say phosphate probably will continue -- and again, looking at the supply and demand balance, it will probably continue to be tight. I know that potash -- sorry, phosphate prices are elevated compared to historical average levels. But at the same time, it's a supply story. And while we might see some reduced phosphate volumes going down here in the fall, given where phosphate prices and therefore, affordability is at, we might see some of that. We expect that, like I say, into 2026, the market will continue to be tight.

Our next question is from Michael Doumet from National Bank.

So you've completed a few acquisitions, and you expect to have leverage come down in Q4. And then again, I think next year, another potential divestiture if that happens. Any way you can frame out how much debt you'd like to repay before you consider introducing maybe some additional flexibility into how you're thinking about capital allocation/your share repurchase program?

Yes. You bet, Ben, thanks for the question. And so yes, we will end the year having paid down -- reduced some debt. That's true even while we've increased returns -- cash returns to shareholders, as I mentioned earlier, by over 40% compared to last year. And yes, heading into 2026, we'll see how the year plays out and some of the things that we've announced and how we're thinking about proceeds among our capital allocation priorities. But I'll hand it over to Mark maybe just to provide a bit more detail.

Sure. Thanks, Ken. So look, I think you step back and think about the priorities we've articulated, capital discipline, cost discipline, the overall focus on free cash flow and really being able to do that on a through-the-cycle basis, really regardless of market conditions. So we've built the strategy, built the capital allocation and returns framework to really be consistent across cycles such that Nutrien will generate structural free cash flow at any commodity price that we can foresee and have consistent abilities to deploy that capital. So when you look at the actions we've taken to enable that, I think the track record is strong over the last year. Specifically on your question, part of being able to support that framework across the cycle is having debt in an appropriate position. We haven't changed our perspective that BBB flat from a rating standpoint is the right place for us. But as we look through a cycle, we think that at roughly mid-cycle prices, we should be roughly 1.5x adjusted net debt to EBITDA. And when we get into a trough, although we can go higher than this, we think 2.5x is probably the trough that we'd like to see when we get to the bottom of the commodity cycle such that we have abundant optionality to take advantage of those moments, return capital to the shareholders and do all the things that we need to do. So what you've heard us articulate today is that with the benefit of divestiture proceeds and the strong cash flow from operations that we're going to see in 2025, we're going to take a step closer to that. And we think we'll be getting in the ballpark. Of course, as we move forward and Ken articulated, we're always going to be looking at the best use of deployment for the cash that we have that maximizes value for our shareholder. So we believe we're on the right track with that.

Our next question is from Ben Theurer from Barclays.

On some of the commentary you already made in regards to the Trinidad assets. Now I was wondering if within the asset review, aside from what you've talked about, phosphate and then obviously, we have the Trinidad decision pending. How you think about the rest of your portfolio? Are there any other assets that you would consider for divestiture or any sort of like an adjustment here given where the market conditions are in the different locations?

No. Thanks for the question, Ben. And it's the case and will be the case that we'll be perpetually reviewing our portfolio. And again, we're talking about our objectives of earnings quality and free cash flow per share and being able to structurally improve those metrics over the long term. As I mentioned earlier, at the moment, consuming our attention is phosphate, is Trinidad and is our work in Brazil. We -- among our divestiture program today, we've talked about our -- to date, we've talked about our Sinofert shares, talked about Profertil. There are a few other smaller assets that we've divested of in Europe and in Latin America. And would there be other smaller assets that we would look at sort of cleaning up in the portfolio? There would be. But there would be nothing that I would describe beyond those three areas of focus today that I would call material. And so again, today, the big things that we need to focus on and talk about are phosphate, Trinidad and Brazil.

Our next question is from Lucas Beaumont from UBS.

I just wanted to clarify a couple of things. So I guess just on Trinidad to start with, so to the extent that remains shut down into 2026, what's the sort of fixed cost base there on EBITDA that will be impacting you? And then just secondly, I saw your potash shipment outlook for North America is flat year-on-year into next year. So are you guys assuming that you don't get any kind of demand destruction impact there at all?

Yes. No, on Trinidad, we'll see, Lucas. We're certainly not prognosticating that we're going to be shut down into 2026. We're just -- we're working through that at the moment and looking for those optimal operating conditions where, again, reliable and affordable gas supply and access to ports and in those discussions today. So those discussions will be ongoing. Trinidad contributes less than 1% of our free cash flow. And so it is from that perspective, in terms of the overall contribution, it's de minimis. As it relates to potash volume growth, I think the best way to think about it is the potash market continues to grow. And we had talked about after some of the demand destruction that we saw, the conflict in Eastern Europe, the return to trend level of potash demand. And indeed, that is exactly what we have been experiencing for the last few years. And given everything that we're seeing on crop nutrient removal from the soil on channel inventories and overall affordability for potash, we expect trend level demand to continue into 2026, and that's why we say 74 million and 77 million tonnes. And for our part, you can think about us participating in that demand growth in the way that we always have. And so sort of that 19% to 20% market share. And so as we look at how we're going to guide into 2026, it will be doing exactly that kind of math. And as you know, with our 6-mine network and our capability to continue to grow our volumes at a very competitive capital, we'll continue to pace along with growth in the market.

Our next question is from Jordan Lee from Goldman Sachs.

Just another one on the Trinidad closure. You mentioned that it contributes a small amount of free cash flow. Can you discuss the different possibilities you see for that asset? Do you think there would be interest if you were to try to sell it? And is that something you are considering?

Yes, thanks for the question, Jordan. What I'll say today is just the things that I've reiterated, and that is we're searching for an optimal path forward here as it relates to our operating configuration in Trinidad, which is dependent on arriving at, as I say, reliable and affordable supply of natural gas in the region, and access to ports so that we can export the volumes off the island. That's the focus for today.

Thank you. There are no further questions at this time. I will now turn the call back to Jeff Holzman for closing remarks.

Okay. Thank you for joining us today. The Investor Relations team is available if you have any follow-up questions. Have a great day.

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation. You may now disconnect.