Nutrien Ltd. Price & Performance (NTR)

In a world that is increasingly complex, having a clear vision and strategy is vitally important. For Nutrien, this means strengthening our core business across the ag value chain. And taking a disciplined and intentional approach to capital allocation. To measure success against the the execution of our strategy, we set twenty twenty six performance targets that we believe provide a pathway for driving structural improvements to our earnings and free cash flow. In 2024, we made meaningful progress toward these targets In our upstream businesses, we increased fertilizer sales volumes by nearly 1,000,000 tons compared to 2020 We sold record potash volumes and progressed nitrogen brownfield expansions at two of our North American sites. We mined 35% of our potash ore times using automation. Progressing towards our 2026 target, of 40% to 50%. These advancements provide efficiency, flexibility, and most importantly, safety benefits at our sites. We enhanced our midstream distribution capability including the opening of a new potash terminal in The U. S. Corn well. Investments in our global distribution network will continue to be a priority in the years ahead to ensure we can efficiently serve our customers and support our growth objectives. Downstream, we increased retail product margins and lowered expenses through efforts to simplify our business and optimize our network.

In Brazil, our improvement plan is beginning to deliver results as we saw green shoots in the region during the fourth quarter. We remain confident in the growth six retail adjusted EBITDA target of $1,900,000,000 to $2,100,000,000 We accelerated the timeline for achieving $200,000,000 in annual cost savings and expect to achieve this target in 2025. One year earlier than our initial goal. Lastly, we optimized capital spending in 2024, reducing total expenditures by $450,000,000 compared to 2023. Together, these actions position Nutrien countercyclically deploy capital towards high conviction opportunities that improve earnings and cash flow per share through the cycle. Now turning to a review of our 2024 financial results. Nutrien delivered adjusted EBITDA of $5,400,000,000 in 2024 Nutrien. As lower fertilizer prices more than offset increased downstream retail earnings higher upstream fertilizer volumes, and lower costs. Retail adjusted EBITDA totaled $1,700,000,000 up 16% from the prior year. This result exceeded our most recent full year guidance due to stronger than expected crop protection margins in North America improved Brazilian retail performance and the benefit from cost savings and asset sales in the fourth quarter. North American crop nutrient margins increased due to a stabilization of fertilizer markets and continued growth of our proprietary crop nutritional and biostimulant product lines.

This more than offset lower North American sales volumes which were impacted by lower corn acres and wet weather during the spring and fall application seasons. Crop Protection margins improved in 2024 supported by proprietary product growth strong operational execution, and the selling through of lower cost inventory. Higher seed margins in North America more than offset the impact of dry weather and competitive market pressures in Brazil. In potash, we delivered adjusted EBITDA of $1,800,000,000 down from the prior year due to lower net selling prices. Low channel inventories and strong potash affordability supported increased customer demand and higher sales volumes. We increased production from our low cost six mine network and progressed mine automation which contributed to a 7% reduction in our potash controllable cash Our Nutrien segment generated adjusted [indiscernible] relatively flat to the prior year as higher sales volumes and lower natural gas costs offset a reduction in net selling prices. With the completion of GHG projects in our Nutrien business and changes to our product mix, we achieved a 15% reduction in our total scope one and two GHG emissions intensity in 2024, compared to the 2018 base year. Phosphate, we generated adjusted EBITDA of $384,000,000 dollars down from the prior year primarily due to lower production, which was impacted by weather related events and plant outages in 2024.

Now turning to the market outlook for 2025. Global grain stocks to use ratios remain historically low providing a supportive environment for ag commodities. Demand for U. S. Corn has been strong. Tightening the projected supply and demand balance and supporting prices. We expect U. S. Corn acreage to increase to a range of 91% to 93,000,000 acres and anticipate strong demand for crop inputs in the first half of the year. For potash, we increased our 2025 global shipment forecast to a range of 71,000,000 to 75,000,000 tons. The high end captures the potential for stronger underlying global consumption and the lower end captures the potential for reduced global supply availability. We see potential for further supply tightness with limited global potash capacity additions this year and reported operational challenges and maintenance work in key producing regions. [indiscernible] continue to be impacted by regional supply constraints elevated natural gas prices in Europe and seasonal buying patterns. The U. S. Nutrien market is currently tight as net import volumes through the first half of the fertilizer year were down 60% compared to the five year average. Nitrogen demand is expected to be strong in the spring due to the limited fall ammonia application season and higher projected corn acreage.

I will now turn it over to Mark to provide more details on our twenty twenty to twenty twenty five guidance assumptions and our capital allocation plans. Thanks, Ken. Good morning, everyone. As Ken highlighted, we made meaningful progress towards our 2026 performance targets this past year, and see continued opportunities in 2025 to create value through focused execution and disciplined capital allocation.

Our annual potash sales volume guidance of 13,600,000 to 14,400,000 tons is consistent with our global shipments outlook and accounts for some level of uncertainty regarding the potential impact of tariffs on Canadian exports as well as global supply availability In North America, our winter fill program was fully subscribed and we have since increased reference prices by $45 per short ton to reflect tightening global market fundamentals. In Nutrien, we expect continued reliability improvements to support higher operating rates and annual sales volumes of 10,700,000 to 11,200,000 tons. Our low cost nitrogen assets remain geographically advantaged compared to major offshore production regions. We project Henry Hub natural gas prices will average between $3.25 and $3.5 MMDtu in 2025, and our Western Canadian Nitrogen plants will benefit from gas prices well below these levels. Our phosphate sales volume guidance of 2.35 to 2,550,000 tons reflects the expectation for lower production at our White Springs facility in the first half of twenty twenty five and improved operating rates in the second half compared to the prior year. Our full year retail adjusted EBITDA guidance is $1,650,000,000 to 1,850,000,000.00 supported by higher anticipated crop nutrient sales volumes continued growth of our proprietary products and further margin recovery in Brazil.

As Ken mentioned, our improvement plan in Brazil is beginning to show encouraging results and we remain focused on initiatives that improve cash flow from the business. We expect the benefits of these organic growth initiatives in retail will be partially offset by foreign exchange headwinds of approximately $25,000,000 and the absence of asset sales and other income items realized in 2024 that totaled approximately $50,000,000 Looking ahead from a sources of cash perspective, we are delivering downstream retail earnings growth increasing upstream fertilizer volumes, and driving operational efficiencies and cost savings across our network. We continue to explore ways to simplify and focus our portfolio. This includes optimizing investments in working capital and reviewing assets on our balance sheet may not warrant maintaining From a uses of cash perspective, we expect to further optimize capital expenditures to a range of $2,000,000,000 to $2,100,000,000 in 2025. We've committed capital to sustain safe and reliable operations and to progress a set of targeted growth investments that have a strong fit with our strategy provide returns in excess of our hurdle rates and have a relatively low degree of execution risk. Our focus is on investments in our proprietary products business retail network optimization, nitrogen debottleneck projects and mine automation in potash.

We continue to target a stable and growing dividend. With the increase approved by our Board of Directors yesterday, Nutrien's dividend per share has now been increased 7x since the beginning of twenty eighteen for a total increase of 36%. Our annualized dividend payment has remained stable at approximately $1,000,000,000 due to the significant reduction in share count over this time period. Additional free cash flow in 2025 will be allocated [indiscernible] and to share repurchases. We'll maintain a disciplined approach to cash deployment that maximizes our risk adjusted returns and supports growth in free cash flow per share. Since the second half of twenty twenty four, we've deployed approximately $290,000,000 towards share repurchases retiring 5,800,000.0 shares.

We intend on continuing to repurchase shares on a more ratable basis under our renewed February 2026. I'll now turn it back to Ken for closing remarks.

Thanks, Mark. Outlook for our business in 2025 is supported by expectations for strong prop input demand and firming potash fundamentals. We continue to monitor geopolitical events and are positioned to respond under any scenario. Nutrien has a world class asset base and we remain focused on strategic priorities that strengthen the advantages of our business across the ag value [indiscernible] We would now be happy to take your questions. Thank you, ladies and gentlemen. We will now begin the question and answer The first question comes from Ben Isaacson from Scotiabank. Your line is now open.

Thank you very much and good morning everyone. A question on tariffs. Can you talk through how you think about tariff risk for Nutrien, potash and retail both for Nutrien and for the industry, what are the factors that we should be considering When it comes to tariff risk. Thank you.

Thanks, Ben. Among those, and we looked at the impact on tariffs across everything that you've said, including Some capital items that we look at across the border And by far, the biggest discussion is about bot action. And of course, agricultural trade and agricultural productivity in The U. S. Requires and food security for that matter, requires the free flow of these commodities across the border. We've had these dialogues, a lot of them, with governments on both sides of the border. And we continue just to emphasize How reliant The U. S. Farmer is on something like Canadian potash for example, where Canadians supply over 80% of that market. We struck up a cross functional team which extends across our government relations group, our commercial organization to make sure we can serve our U. S. Customers in the way that we always have. And of course, in our finance group as we look at the mechanisms that might be in place to actually collect tariffs and how we would go about that.

Today, we're confident, as Nutrien Nutrien For us, we have those mechanisms in place and frankly that the cost of this would be borne by The U. S. Farmer. That the tariff costs and tariff impact will be passed on to The U. S. Farmer. I will say that timing of this is all in question, of course, as we look at the thirty days and look at the April 1, [indiscernible] So that it could be or maybe even likely is the case that that we'll feel The U. S. Firm will feel those impacts after the the spring planting season here. For our part, we have been filling the channel Right through to our downstream network, and so that we're in a position to serve our U. S. Customers in the way that we always have. Like I say, we're of the view that if tariffs are in place, it's going to be it's going to be rising costs, it's going to mean rising costs for The U. S. Grower.

Thank you. Your next question comes from Steve Hansen from Raymond James.

Your line is now open. Yes. Good morning, guys. Thanks for the time. Your comments on improving Brazil results are quite encouraging. We're just hoping you could drill down a little further and perhaps add some commentary around where you're at on any specific action items you're taking specifically and then any broader macro variables that you also see influencing the pace of recovery? Thanks. For sure. Thanks, Steve.

We've talked about what we've done on the cost side of the equation and and headcount reduction and focusing on our most productive salespeople. We've talked about closure of unproductive locations and that's some of our actual retail distribution centers, but also our experience centers We've shuttered over 50 of those And we've talked about doubling down on proprietary product. And that being certainly a great business for us and a growing business in Brazil. We put those all together and we find ourselves in a situation, yes, exactly as we've described, we see green shoots in Brazil, it's not necessarily true that the market is moving along the way that that I think the industry is hoping and high interest rates are still a source of challenge for the or the Brazilian agricultural complex But our actions, I would say, are, you know, we're seeing those green shoots now and you see that Thank you. Your next question comes from Andrew Wong from RBC Capital Markets. Your line is now open. Hey, good morning. Just wanted to ask about potash. So we've seen prices strengthening recently. Just curious if you can just talk about some of the main factors that are behind that?

How much of that is tariff driven with some maybe some purchases ahead of that. Potential outcome. And then how much of that comes from some of the supply issues that maybe came up earlier this [indiscernible] sustainable would you say current prices are into like the pack up? Yes. Thanks, Andrew.

I would say we don't see much of an impact if any from as related as it relates to tariffs. And I think it's so much uncertainty there that in terms of how that plays out, it really is a story about the fundamentals, but I'll pass over to Chris Reynolds to talk about that. [indiscernible] As we look at 2024, segments we saw reaching an all time record globally What's constructive for us is that despite that strong shipment period through 2024, we came out of 2024 as we canvas the markets and met with our customers that there was really no material carryover inventories in any of these major markets and I think that's representative strong disappearance that we saw. And so that's why we've seen increasing prices here as we exited '24 and come into 2025 and you go around the world a little bit here, you think about North America, we came up with a winter fill program here domestically. To open the year had a very good Response to that and so much so that we implemented two price increases since that winter fill program, which has been absorbed into the market and validated with new orders, because the affordability remains good for potash and obviously with the backdrop of some very strong corn price and prospective corn acres Also in Brazil, again, a record year for imports into Brazil in 2024, But then along with that still very healthy spot [indiscernible] which has seen prices continue to increase here through the start of 2025.

And then around the Asian markets, India, China and Southeast Asia, again characterized no material or burdensome inventories but some really good demand particularly in Southeast Asia And again, with that backdrop of some strong palm oil prices. So Andrew, I think we're feeling good to start the calendar year with the tailwinds we're seeing and a very constructive on the potash market.

Thank you. Your next question Hi. Thanks for the question. Not to ask a question. Couple of things. Your Henry Hub gas forecast between 03/25 and March Obviously, as you're getting ready to give new forecasts, we've seen gas prices surge. Mean Henry Hubs averaging above $4 now for the year about $4 for the year. Just talk about that, how that may impact your thinking and your earnings and your outlook. And then also, it looks like ammonia is really underperforming other parts of Nutrien complex. Can you talk about that?

Yes. So with respect to Henry Hub price, It continues to be the case that the delta between what we're seeing in European gas prices and North America's pretty dramatic. If you're $16 today in Europe, that's a $600 essentially floor. On what it costs to produce a tonne of ammonia. So the delta is important, but to your question about Henry half pricing, I'll pass that over to Trevor Williams. And then the ammonia question, I'll pass it over to Chris Reynolds.

Hey, good morning, Joel, and thanks for the question. And really what we're seeing is North American prices, obviously, a bit stronger.

Really as a result of some of the extreme weather that we've really seen over the course of the last number of months. Obviously, as a result, higher demand and some supply constraints on the downstream side. On the upstream side. Ultimately though, the forecast for the end of winter is looking a little bit more mild. As we get through this kind of last little spell over the course of the next couple of weeks. And then we expect based on where we sit with storage, both storage as well as the production, we see those prices normalizing into the last part of the year. Thank you.

Oh, Sorry, please go ahead. Yes. And I'll just comment on the ammonia market as we've seen it.

And Joel, you're right.

We did enter 2025 on a little bit of a declining in ammonia prices. Part of that was some weak application we saw in the fall season last year impacted by by weather and also the prospect of some new supply coming onto the market. But constructed on nitrogen overall, some of that ammonia that didn't go down last fall is going to go down in the form of urea and UAN particularly in North America But we think that market is very tight and short right now and we're seeing that in the price behavior of urea and UAN. So again, optimistic as we enter this spring season on nitrogen application rates particularly with the prospect of over 90,000,000 acres a quarter. Yes.

And I might just add that we closed the year with quite strong ammonia pricing actually. And so yes, while it's softened a bit, we still look at the ammonia price and are constructive. Call that a strong price.

Thank you. Your next question comes from Vincent Andrews of Morgan Stanley.

Please go ahead.

Thank you and good morning everyone.

Wondering if you could just talk a little bit about the potash market And in particular, over the last couple of years, since the war in Ukraine, I think we've talked about the export costs for both Russia and Belarus having been increased materially and that having a favorable impact on delivered costs around the world. If we do envision and get to a point where that war is ended and Russia has more access to financial markets and maybe freights more willing to transact with it and there have been some headlines already about maybe Belarus has the sanctions taken away from it and maybe they get back through Lithuanian ports. Is it the case that we would see some decline in the cost curve and that would have an impact? Or would your view be that capacity utilization now is tight enough that that's what's determining the price rather than the underlying delivered cost? Thank you. Yes. Thanks, Vincent. And of course, it's been the case that potash prices have been below that last marginal cost. Ton. And so we're just now seeing prices get to a level where you look at the right of the cost curve, and we're sort of we see demand meeting supply at that right side of the cost curve.

As it relates to your question about FSU production, of course, for the Russians, those volumes were never sanctioned, and we've seen all of that production back in the market for some time. A good question, Vincent, about Belarus and how that plays out in terms of lifting of sanctions, which I think is a big if, I mean, these are challenges that existed prior to the conflict in Eastern Europe. But to your question, if they were to be lifted, I think you said it, the pivotal question is, do the Belarusians can get access through Port Of Playpeda in Lithuania again. I mean, that port is now fully utilized with other commodities. And so are the other Belarusians able to wedge their way back into that port? When Europe and the Lithuanians have been very clear about sanctions or no sanctions, and that's not going to be made available. And so the Belarusians who have been the marginal producer on a delivered basis, would continue to face increased costs as they'd have to head north into Russia and likely the port of Murmansk. So it's just to say that if we saw those Belarusian volumes the ones that continue to be shut in maybe 1,000,000 tons come back into the market, We think that happens slowly over time.

We think that it continues to be more expensive for the Belarusians. [indiscernible] some announced maintenance programs and a key producing part of the world and some operational challenges in another part of the world, that's where we go to firming of the potash price.

Thank you. Your next question comes from Kristen Owen of Oppenheimer.

Hi, good morning. Thank you for taking the question. Wanting to return to the retail outlook and the strong performance in the past year. Certainly getting a lot of uplift from the improved CPC and seed environment. I'm wondering if you could double click on those areas of the business and help us understand what your outlook assumes for 2025? [indiscernible] Absolutely. We've made some assumptions within our guidance range of $1,600,000,000 to 1.5 to 1.85 and it really speaks to exactly some of those points. I'll pass it over to to To Mark to talk about that range and our assumptions.

Thanks, Ken. Good morning. $750,000,000 On a headline basis, this is up about $50,000,000 versus 2024. But when we look at FX headwinds in the retail business from a stronger U. S. Dollar, and the realization of some non core asset sales and non recurring other income items we experienced in 2024 we would say our underlying EBITDA is projected to grow by about $125,000,000 at that midpoint of 1,750,000,000.00 At that midpoint coming to your question, we assume continued growth in our proprietary products business. We assume higher and we do assume a continued recovery in our Brazilian business. And crop margins at roughly historical average levels. If we look to the upside of that range, we would be looking at factors like stronger corn acreage potentially and ag fundamental strengthening continuing to strengthen, [indiscernible] protection margin performance above historical average levels, On the downside of that range, we would be looking to factors like adverse weather during key application periods, weaker commodity pricing and a slower pace of recovery in Brazil. So from a book end standpoint and at the midpoint, those are the factors that are are the primary ones guiding our outlook for 2025 in retail.

Thank you. Your next question comes from Steve Byrne of Bank America. Please go ahead.

Yes. I'd like to follow that question with maybe a little bit of a longer term outlook on your retail business I got four potential growth drivers that come to mind and was hoping you could just rank them. One would be just increased network density with bolt ons. Another one would be you seem to be getting into more and more biologicals. Is that a meaningful longer term growth driver for you? The third one would be SG and A in this segment is 90% of the company SG and A. Is this do you see ways to reduce the headcount in that in that segment? And then just last one, understand you have access to aerial imagery for this coming year and in some of the corn belt. Is this a longer term driver for you to help your customers and increase applications as necessary? Yes. Thanks for the question, Steve.

Pretty much rank ordered them. So we can certainly talk about absolutely tuck ins has been a feature of our business and growth enabler for us and we have a long history in track record of doing that quite successfully. Absolutely. Biologicals and biostimulants, crop nutritionals and proprietary overall is a big growth driver network optimization We've talked a lot about that, which is to your SG and A question. But I'll hand it over to Jeff Darcy maybe to expand on each of those. Yes.

Good morning, Steve.

And as we I'll kind of start with biological We talked a lot about our nutritional and biostimulant business and Actually, last year was our second best year on our proprietary product business in history only comparable to '22 Our nutrient biostimulant business grew 8% year over year and we're projecting just under 15% growth and in 2025. So that will be a real headline for us in 2025. We're going to bring some new products into the market. We talked about products like Infinity, From that standpoint, on SG and A side of it, we've been quite vocal that for 2025, we want to take $100,000,000 of expense out of our retail business. We saw in the fourth quarter, we saw some of that come a little bit earlier. Than we anticipated from that standpoint. So we feel good about what we've talked about as far as rationalization of the network and controlling our controllers, which is at the top of our list of priorities. For 2025. And then As you talk about aerial imagery and we've been using that for some time, we're using a lot of technology to date in our business. Our growers are using a lot of technology as well And, I always say our challenge is try to stay one step ahead of our growers' from that standpoint.

But we'll be employing what we know from a pure agronomy basis and Coupling that with the technology that we have in the marketplace today to build the the best solutions that we can build for our growers to give them the best chance of return.

Thank you. Your next question comes from Richard Gartner Torena of Wells Fargo. Please go ahead.

Great, thanks. Good quarter.

My question is on Nutrien segment.

Had strong results, saw improvement in the natural gas reliability North America, improved Trinidad operations. So maybe just give us an update in terms of where you think [indiscernible] That segment going into 2026 and in terms of ramping up to that [indiscernible] depended I think on [indiscernible] [indiscernible] of the infrastructure. Thanks, Richard. And yes, it is true that we have been making investments in reliability initiatives across the network. We've been unlocking new volumes with [indiscernible] brownfield investments that we talk about some of those that are even coming online this year. And we've improved gas utilization in Trinidad. That's all true. And that gives us confidence to be on this path when we talk about our Investor Day target of 11,500,000 tons in 2026. And even 12,000,000 tons if we were to get our full allocation of gas in Trinidad. But maybe I'd pass over to Trevor Williams to talk about that that bridge. In last year to this year and then our 2026 target. Sounds good. Thanks, Richard. And I'll just build maybe on a few comments that Ken had made. So So as we look to our 2026 glide path, and it really continues to reflect three our focus in really three key areas.

First one, obviously, being improved reliability and just to call it out recent example is really, if you look at our border facility, we've really seen a step change in terms of its performance 2023 over 2024. Over the last twelve months in particular, based on the team that the work that team has done at the site along with our central liability team, Second on top of that is really, as Ken mentioned, is really completion of a number of debottlenecks we've had across our fleet. We completed a number last year, both in terms of better [indiscernible] our Redwater facility in particular and also at Geismar. Then we also have coming up in 2026, a few other ones that will come online, both at our CarSlam facility and some increased capacity at Augusta as well. Then finally, as Ken mentioned, it really comes down to some of work that we've been doing at Trinidad where we've seen also a really great improvement in terms of gas utilization. Making sure that every molecule of gas that's made available to the downstreamers ourselves is that we take advantage of that Again, if you look at 2023 over 2024, we saw about a 10% increase We were at about 95% gas field in 2024, and we see an opportunity opportunity to bring that up to about 98% in 2020 over 2025 and 2026.

And then lastly, as Ken said, with the work that the Trinidad government has been doing, We continue to be optimistic that we will hopefully start to see increased volumes towards the tail end of 2026.

Thank you. Your next question comes from Jeffrey Zekauskas of JPMorgan. Please go ahead.

Thanks very much. I was looking at your fact books [indiscernible] the number of selling locations for retail if I read the data correctly, has been going down by about 4% a year for the last few years. Can you comment on that? Why is the number of selling locations going down? Is it that farmers have more access to different online sources. And what's your idea about what the growth rate of your selling locations should be over time And then secondly, can you just comment on how you see the crop chemical market in The United States for 2025, do you think you'll make more than you did last year or less do things block? Yes. Thanks, Jeff.

With respect to selling locations, we think less about total quantum of selling locations, more about the productivity of each of those locations. And the reality is that agriculture changing. We've seen a lot of unfarmed consolidation and that the complexion of North American agriculture requires modern and higher throughput facilities. And so a key key pillar of our growth platform in our retail network, our downstream network is what we call our network optimization. That is looking at what might be higher sustaining CapEx, lower productivity, storefronts and consolidating what might be three or four of them in a region into one new modern throughput safer facility that can still provide all those service levels to the grower. That would be the reason for the change. And in fact, that's an improvement to our business. It's not It's not that fewer selling locations means fewer service levels or less organic growth. It's [indiscernible] So that is what you would see happening there and indeed a key component of our tuck in acquisition strategy is where we look at the opportunities to add to the network in some of these key regions And as we do that, we look at the opportunities for our network optimization.

And again, serving our growers and improved service levels. With respect to crop protection, I'll pass that one over to Jeff Tarsey.

Yes. Thanks, Ken. And agree with everything you said on the network, we do We work on that each and every year. We're having to service larger growers today. They're different out of fewer but more efficient branches in order to meet the demand of those growers as they consolidate and get larger size as well.

From a crop protection standpoint, we built some growth into our top line on crop protection for 25% and that's looking to claw back at some business that we think we missed last year and made due to wet cool weather. In the growing season, at the midpoint of our guidance range, we've it's marked spoke to earlier, We've penciled in historical protection margins. For the twenty twenty five year. We think we will there is some generic pressure out there. So we think that upfront margins could get some pressure there. But again, and we've made significant improvements in our margins in the Brazilian market as well. We're sitting in a really good position from an inventory standpoint on crop protection. We've driven driven our inventory down in all of our major markets. On crop protection on a year over year basis. So we feel good about where we're sitting for the spring. And the opportunities that we might have in front of us.

Thank you. Your next question comes from Chris Parkinson from Wolfe Research. Please go ahead. Guys. Good morning. It's actually Andrew on for Chris. So looking sort of towards capital allocation, can you speak to what you're seeing out there in the M and A environment and your appetite to add to bolt ons in U. S. Retail, and smaller global tuck ins, and how should we think about that versus further share buybacks, dividend, etcetera?

Yes. Thanks Andrew for the question. So you will seen it. We just increased our dividend And that's increased on per share basis 36% since the Since the company was formed and we use the word stable and growing, and we can kind of think of it in that billion dollar range.

We continue to fund the dividend, We can talk about sources and uses after that, but to your point, free cash flow and how we might look to utilize that Certainly, we're watching the tuck in opportunity pipeline, but maybe I'll pass Mark, talk more about that. Yes. Thanks, Ken. Good morning, Andrew.

And as Ken said, Andrew, maybe I'll just step back for a second. I think it's worth mentioning again, just the intense focus we have on structurally growing sources of cash in the company. So the single biggest driver we have of that is continuing to grow cash flow from operations by progressing towards our 2026 targets, as we've said today, we made good progress on all fronts in 2024. We expect to continue moving forward in 2025. And alongside that progressing our review and monetization of non core assets, and that's also something we plan to continue looking at in 2025 and being disciplined working capital management and driving efficiency in our cash conversion ratio. So growing sources of cash over time is a first objective. And then on your question about how we're utilizing or deploying that cash, maybe just to walk through that capital allocation stack as we see it for 2025, We expect to deploy total capital of about $2,000,000,000 to 2,100,000,000.0 and This is comprised of about $1,600,000,000 in capital and we expect about $400,000,000 to $500,000,000 in growth capital and that's that narrowed and focused set of priorities that Ken and I both spoke to in our prepared remarks.

Beyond that, we expect to have about $500,000,000 in capital leases. And as Ken mentioned, about $1,000,000,000 towards that stable and growing dividend per share, which for shareholders today provides just over a 4% return. When you take all of those things into account, that's about $3,500,000,000 to $3,600,000,000 in total uses. And as Ken highlighted, really every dollar beyond that we're looking at effectively two things.

Bolt on acquisitions primarily in The U. S. But continue to look in Australia And we think in this environment, we are going to see more of those opportunities in The U. S. Come our way as well as share repurchases. And you saw since the second half of the year through today, we've been in the market on a ratable basis. We feel that's an attractive use of capital today on the share repurchase front that competes quite attractively with other alternatives. We intend in 2025 for that to be a continued meaningful part of our return capital and capital deployment framework. So we expect to be in the market going forward on a ratable Thank you. Your next question comes from Edlain Rodriguez of Mizuho. Please go ahead.

Thank you. Good morning, everyone. Just one quick one on potash. Your volume guide is is essentially flat. Price, who knows, it will do what it does. Can you talk about what your cost on a per ton basis? Should we expect any improvement there? Or should it be similar to what we saw in 2024? Yes. Thanks, Edlain.

Yeah. So with respect to how we're positioning ourselves among the 71,000,000 to 75,000,000 tons that we talked about, global shipments for 2025. It really is us expanding our volumes incrementally as we've done last year for the last number of years maintenance and market share at about that sort of 19.5%. [indiscernible] volume and the volume range means for our cost of production. We've talked about kind of that $60 a tonne as something that we point to.

And and it's something we pointed to for some time. In other words, we have been fighting back inflation and the biggest component of that, it has been and will be automating our mining machines as we improve productivity, as we improve asset utilization And And that contributes obviously to fighting inflationary pressures, which are very real.

In service of that $60 a ton.

Thank you. Your next question comes from Lucas Bermont of UBS. Please go ahead.

Thank you. Yes, so I just want to go to nitrogen. So I mean, prior to the war, the top of the cost curve there was about 40% below where the sort of European gas outlook is for this year. So now with sort of talk of things that are normalizing there, could you walk us through your range of outcomes for how you've seen the cost curve kind of if we have a resolution there. Just Warren, you're [indiscernible] Great. I will pass that over to Jason Newton, our Chief Economist, and talk about exactly the moving parts there.

Yes. Good morning, Lucas. Yes, you're right.

We have seen an increase in the cost curve, particularly if we look at ammonia and UAN, but also urea just driven by the increase in the price of gas in Europe And as Ken mentioned, We've We've seen that pretty volatile of late. I think as high as $18 per MBQ last week. It sits down in the $15 per Mc2 range today and that curve is pretty flat as we look throughout the year. We know that as we look through the end of [indiscernible] Storage levels today are down significantly and then the first time since the war began that there's been a normal winter in Europe with cool, cold weather driving down storage levels. And those will by regulation need to be rebuilt. And so that's driving the outlook for gas costs today. And so as we look through the end of the year, regardless of what happens with respect to sanctions, that gas supply in Europe is likely to be tight. That said, there's potential for volatility in that price. In any scenario, we'd expect that the cost [indiscernible] Will remain above where it was prior to the war beginning, just given the reliance on imported LNG into Europe.

Think the other important point is that we've seen already significant permanent closures of ammonia capacity in Europe continues to be over 20% of depression shutdown today due to high natural gas prices. And we wouldn't expect that to come on stream as we go through the year. And the other factor to watch as we go forward is just the limited amount of new supply coming on stream, particularly of urea. And so we'd expect the supply demand balance to tighten over the medium term just given continued demand growth exceeding capacity additions.

Thank you. Your next question is from Rajee Parikh of Barclays. Please go ahead.

Awesome. Thanks so much for the question. You want to touch on some dynamics in Brazil. But can you give a deep dive on progress in destocking at the distributor, retail and farmer level and also on farmer credit on the farmer credit environment. Are you lending more? Are you becoming more particular on who you sell to down there similar to one of your competitors?

Yes. Thanks for the question, Rohit. Yes, pass that over to Jeff Tarshey to talk about what we're actually seeing on the ground.

Yeah. Look, we've and I'll tell you from my perspective within our business operations there, we've had a very clear objective to drive our inventory down.

In that Brazilian market and actually a year over year basis we've driven our inventory down 46%, which puts us in a really good position, takes a lot of risk.

Out of our business from that standpoint. I would think that at the farm gate, there has been destocking over the last two years. In that market, and it's become more and more of a just in time marketplace, in Brazil because of some of the some of the events we've seen over the last two to three years And from a credit side of things, we're always gauging our credit as intentionally as we possibly can. Brazil would be no exception to us in that marketplace and we've got a we've stood up very strong credit team there.

And we continue to analyze that and make really good decisions based on P and L opportunities of the customer.

Thank you. Your next question comes from Aaron Catcherley of Berenberg. Please go ahead. [indiscernible] I think we come from two years of volumes above long term trend for Portaiche. And this year, we have supportive dynamics for for ag in general after the recent rally in corn prices. Just wondering maybe can you talk a little bit about the lower end of the guidance [indiscernible] availability, but I would like to understand a little bit what does it mean. Thank you. Yes. Thank you for the question, Aaron.

So yes, it's absolutely true that we've seen two years of growth in potash demand, and we're expecting a little bit more this year. And really is just that return to trend level demand that we'll talk about on sort of pre war levels and 2.5% average annual growth rates. As the world seeks to grow more food. When we talk about the guidance range for this year, at the top end, we talk about strong ag fundamentals, so good spring planting season in North America. And some of the other strength that we talked about in Southeast Asia, and record record fertilizer consumption in Brazil last year and looking for that to increase again this year. So strong demand fundamentals, the low end of that range is really it is a supply [indiscernible] Discussion and that is, again, we've seen some significant announcements maintenance and even operational challenges in some of those key producing regions so that the limitation this year, we believe in the face of strong demand would be on the low end would be availability of supply.

Thank you. Your next question is Michael Tuhom from TD Cowen. Please go ahead.

Thanks.

Earlier in the call, you talked about tariffs. Your 2025 potash sales volume guidance, you noted that the guidance range attempts account for some uncertainty on the tariff front.

So the question is, I'm wondering if you can expand on that and speak to what sort of tariff related assumptions you've made and coming with your own potash volume guidance for 2025?

Yes, you bet, Mike. It really is a question [indiscernible] To Mark to talk about our assumptions there.

Yes.

Yes.

Thanks, Ken.

Good morning, Michael.

I think Ken characterized the high and low ends of the global shipments range really well during the last question. So maybe just stick to what you've asked about on tariffs. Really, if you look at our guidance range, 13,600,000 to 14,400,000 tons At that midpoint of 14,000,000 tons, we assume relatively limited impact from potential tariffs and really no material supply chain disruptions to speak of. So that would generally characterize the midpoint of our guidance.

If you look to the upper end of our guidance, we would assume no impact from tariffs and really no supply chain disruptions. On the lower end is really where the tariffs question comes into play and it's really a lot as Ken said, it's really the potential timing impacts that any tariffs would have on demand in North America, and we do see that more as a timing related factor. And that would sort of characterize how we're thinking about 13,600,000 tonnes on the lower end of our guidance.

Thank you. As there are no further questions at this time, I will now turn the call back to Jeff Oldsman for closing remarks. Please go ahead.

Thank you for joining us today. The Investor Relations team is available if you have follow-up questions.