Good morning, and welcome to the Mosaic Company's First Quarter 2025 Conference C all. All participants will Good morning, and welcome to the Mosaic Company's First Quarter 2025 Conference C all. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jason Tremblay. Please go ahead. Thank you, and welcome to our first quarter 2025 earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer. Jenny Wang, Executive Vice President Commercial, will then cover the market update. Luciano Pires, Executive Vice President and Chief Financial Officer, will review financial results and capital allocation progress. We will then open the floor for questions. We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published today and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now I'd like to turn the call over to Bruce. Good morning, and thanks for joining our call. I'll start with our key messages for today. First, fertilizer fundamentals are compelling, and prices are rising. Despite the uncertainty around global trade policies, fertilizer demand is very strong in every key growing region of the world. Second, we are making progress towards normalizing our phosphate production and operating costs, and we're on track to deliver stronger results this year and beyond. Third, Mosaic's industry-leading market access is enabling us to benefit from strong markets and grow in new ways. You can see plenty of evidence of this important strategic advantage. Our business in Brazil is performing exceptionally well. We've increased our Potash production outlook to meet demand around the world, and our Mosaic Biosciences business continues to grow at a brisk rate. Finally, our work to shed non-core assets and reallocate capital is continuing to take shape. To cover our first quarter results, net income was $238 million, and adjusted EBITDA came in at $544 million. The quarter's results underscore very strong phosphate prices, improving Potash prices, and excellent performance in the Mosaic Fertilizantes segment. Remember, the first quarter is traditionally our seasonally slowest quarter of the year. We expect earnings to improve further from our strong start to 2025. Let's take a few minutes to review market fundamentals at a high level, as well as our progress towards our operating goals. Jenny will go deeper into the markets, and Luciano will discuss financial results, financial strategy, and our capital reallocation journey. Our market outlook remains positive. Ag commodity fundamentals and fertilizer demand are solid around the world. With sustained supply constraints in phosphate, prices and stripping margins remain elevated compared to historical norms. With supply reductions from several major Potash producers, as well as robust demand, Potash prices are rising. In fact, first quarter realized prices of $623 per ton for phosphate and $223 per ton for Potash exceeded our guidance ranges. The strong performance of Mosaic Fertilizantes was also helped by the realization of higher prices. It is no secret that global trade conflicts and other geopolitical forces have intensified in the past few months. As we continue to monitor the latest developments and evaluate the impact, especially in the U.S. agriculture sector, we believe we are well positioned to navigate these dynamics. Our expansive market access, especially our strong presence and long history of operating in Brazil, and our supply chain agility will prove to be important strategic advantages as we navigate shifting trade flows. While trade continues to grab headlines, I can't emphasize enough that Mosaic is built for the long haul. The long-term market fundamentals and operating backdrop remain constructive. For example, biofuel mandates around the world continue to advance, and that growth is expected to contribute significantly to global grain and oilseed demand. We're seeing this play out in Brazil with increasing ethanol usage, and as a result, corn growers are enjoying both improving profitability and fertilizer affordability. Phosphate demand is also driven by rising lithium iron phosphate production in China, which grew 55% in just the first quarter of this year and continues to limit the amount of phosphate available for export. As a result, the phosphate market remains tight, and while tariffs could disrupt trade flows, they cannot create more phosphate supply. Now let's move on to the progress we are making toward normalizing production and costs. Improving our asset reliability and being disciplined in our cost management remain our key focus areas. In Potash, the Esterhazy Complex continues to generate strong cash flow across the commodity cycle. It clearly benefits us to produce every ton we can at Esterhazy, and we're investing to do just that. We expect to complete the 400,000-ton per year hydrofloat project soon. It is expected to increase our production volumes from Esterhazy and improve our product mix flexibility, allowing us to maximize our net BECCS while driving our per ton cost lower. We're on track to achieve our production cost per ton target this year. In phosphate, we produced 1.4 million tons in the first quarter of 2025. The Bartow and New Wales plants experienced substantial downtime for planned turnaround and other reliability improving work during the quarter. That said, March was the third strongest production month in the past 18 months, and we are maintaining our 2025 production volume outlook in the 7.2-7.6 million ton range. As production improves throughout the year, our conversion cash cost per ton is expected to decline. Mosaic Fertilizantes delivered a very strong operating performance in the first quarter, with conversion and production unit costs declining year over year. As cost measures yield further benefits, we expect to achieve our full year unit cost targets. In fact, we expect further improvements in segment profitability in the second quarter. Now let's move on to talk about how we're leveraging our market access to redefine growth. While operating initiatives will drive significant value creation in the near term, Mosaic also has substantial opportunities beyond the near term to grow in new markets with new products and from new sources. Our expansive Brazil footprint positions us well for growth and to navigate the current geopolitical tensions. Our Mosaic Fertilizantes volumes returned to year-over-year growth in the first quarter, and with our new Palmeirante blend plant expected to be complete in July, we expect further growth in the remainder of the year. In fact, we have already sold over 50% of the additional tons that are expected from the Palmeirante facility this year. I should also mention that the operating environment is compelling. With the current good farm economics, we now expect approximately 15% sales volume growth this year. Mosaic Biosciences had a strong quarter with revenue more than doubling over the prior year and on track to double for the full year, driven by surging sales for our existing products and new product launches in our key markets. Late last month, Mosaic Biosciences brought Neptunion to the market in China. Neptunion is a biostimulant that helps crops address abiotic pressures such as drought, salinity, and heat by adding stress-resistant properties into water-soluble fertilizers. Neptunion is currently in the registration process in India and Brazil. We are succeeding at engaging growers around the world and demonstrating through extensive field trials that our biological products deliver meaningful yield and value benefits. Moving on to our portfolio review and cash return-focused initiatives, you saw the list of assets we shared at our investor day in March. Clearly, we have significant potential for future monetization. The conclusion of the Ma'aden transaction gave us a transparent value for our investment, which is about $1.5 billion as of today. We announced the Patos de Minas sale earlier this year. Our pursuit of strategic alternatives for our Potash mine in Carlsbad, New Mexico, is proceeding well, and we continue to assess the performance of assets such as Araxá, Patrocinio, and Tucuruí in Brazil. Finally, let me spend a moment addressing capital allocation and capital return to shareholders. Free cash flow generation was constrained by typical working capital seasonality in the first quarter. We continue to expect CapEx of $1.2 billion-$1.3 billion this year, and we anticipate free cash flow conversion will improve in the remainder of the year. Our commitment to return excess capital to shareholders is unchanged. Now, Jenny will provide a more in-depth update of agriculture and fertilizer markets. Thank you, Bruce. Ag fundamentals continue to be robust despite significant uncertainties in the market due to global trade policies. Prices for the most important ag commodities, while volatile, have moved broadly sideways for the past six months and remain supportive to demand as growers worldwide remain incentivized to push yields higher as global stock-to-use ratio remains multi-decade low. It is also important to note that global ag commodity demand tends to be less impacted by global macroeconomic fluctuations. The North American spring season is expected to see typical demand for both P and K, with limited channel inventory remaining when planting wraps up in the next couple of weeks. We're watching the potential for demand to face some headwinds in the second half of this year due to more challenging fertilizer affordability driven by lower ag commodity prices in the U.S. as grain and oilseed importers like China have shifted their buying to other exporters. However, any harmful impacts to the U.S. grower profitability stemming from tariffs and trade flow shifts are likely to inure to the benefit of Brazilian growers. For example, China is increasing purchases of Brazilian soybeans as opposed to U.S. soybeans. In fact, Brazilian grower economics are quite constructive despite the general weakness in global soybean prices. We have long talked about the natural hatch of market access across key agriculture regions guided by Mosaic's operating model in situations just like this. Growers in Brazil are enjoying ag commodity prices at meaningful premiums to prices quoted in Chicago. As such, fertilizer shipments into Brazil are expected to set another record, with total NPK shipments likely to exceed 47 million tons. Shipments were a bit under 46 million tons in 2023 and 2024. Purchases of P and K for the upcoming saffer season are running 10% higher than a year ago. Elsewhere in the world, grower economics also look compelling. Domestic agriculture is seeing additional focus and support in many smaller and mid-scale producing countries, with an eye towards insulating food security from volatile geopolitical and trade environment. Now, a couple of examples. Palm oil producer economics are solid on low inventories driven by continued robust domestic and export demand. Indian farmer returns are also solid given supportive government policies and domestic ag product prices. After 2024, a year in which Indian farmers were left with low phosphate fertilizer supply availability due to an insufficient subsidy program that kept import volume subdued, the Indian government has this year stepped forward with more supportive policy propositions. We believe under this more supportive environment that India will see phosphate demand return to a more historically normal input level of 6.4 million tons, up 40% year over year. While demand for P and K appears well supported, the price continues to look tight. For phosphate, Chinese exports of DAP and MAP remain subdued and are not expected to return with any significance until June. As has been the case in recent years, strong domestic fertilizer demand and the diversion of phosphate molecules into industrial uses like LFP continues to provide a structure change in the availability of Chinese high-analysis phosphate fertilizer exports. As Bruce mentioned, regarding LFP, production was up 50% year-on-year in Q1. In Potash, we have seen production expectations tick lower in 2025 from some key suppliers like Russia, China, and Chile, while questions about the sustainability of higher production from Laos also persist. Exports from Belarus were on the higher end of the expectations in Q1, so we're watching for the supply impact from announced maintenance there to be realized in Q2. From a pricing standpoint, we believe that both P and K will continue to find support at current levels. In fact, we don't anticipate a meaningful summer field reset, if any, in the U.S. market. On the raw materials front, sulfur remains firm, with the latest spot prices suggesting prices may stay elevated for a longer duration. We expect sulfur prices will normalize by the end of the year. Conversely, ammonia supply is ramping and prices continue to shift lower. With this backdrop, phosphate benchmark stripping margins are expected to remain elevated. In summary, ag commodity, phosphate, and Potash market fundamentals remain compelling, and Mosaic expects manageable impacts from government and trade policies. Now I'm turning the call to Luciano. Thank you, Jenny. First, some housekeeping. You will notice that we added cost per ton metrics to our release. We have reconciliation tables to the U.S. GAAP metrics at the end. We intend to track and discuss closely with you our progress in those metrics going forward. Now on to the performance. As you can see by the numbers, our phosphate and Potash segments outperformed in realized sales prices compared to our own guidance given in the last earnings call. I guess there are no surprises here, as you are certainly following the tight supply and demand situation, the recent upward trend in prices. In Q1, we were conducting the maintenance and reliability improvement projects in our facilities to support increasing volumes for the future, and that impacted costs. In the phosphate segment, starting by the mines, United States blended rock cost per ton was low, $77 in the first quarter. Hurricanes well behind us, we had very strong mining output in Q1, and this is continuing. These lower rock costs, they will work through inventory and will reflect favorably in our financial results in the next few quarters. The cash conversion cost per ton was $134. That increase was caused by lower production volumes and higher operating expenses to restore asset reliability by design and widely communicated. Going forward, we expect to drive costs down towards our range of $95-$100 run rate by year-end as production output improves throughout the rest of the year. For the Potash segment, again on the cost front, the production cash cost per ton was $78, up from $72 per ton in the prior year quarter. During the quarter, we curtailed production in response to the cold weather in Saskatchewan. Railways could not move the products. Finished product warehouses were full. We could not keep producing, so we had to stop production. We also pulled forward repair and maintenance work during this downtime. Between this additional work and the lower fixed cost absorption, the production cash cost per ton was higher year over year. Looking to the remainder of the year, we expect those unit production costs to decline, reaping the benefits of the hydrofloat project. We are still very much on track to achieve our target of $64-$69 per ton. On Mosaic Fertilizantes, our Brazilian business, the improvement story is already developing. We communicated, you will remember in our last earnings call, that adjusted EBITDA would have an uplift in Q1 because in Q4 it was impacted by a $35 million negative effect from foreign exchange variations. That is exactly what happened. Adjusted EBITDA came in at $122 million, despite still having a negative effect on payables and currency hedges of $18 million. Last quarter, $35 million, this quarter, $18 million, but still there. The cost performance continued strong. In Q1, mining costs continued to decline, mostly due to the new mine planting Patrocinio and better performance in Cajati since last year, and that allowed us to stop importing expensive rock. Conversion costs stayed somewhat flat compared to Q4, which was already substantially lower than prior quarters. We are good here. Looking forward to Q2, results will come in much stronger. Why is that? First, seasonality. If sales increase by 30%, for example, as we saw in 2024, distribution margins return to the normalized $30-$40 range. Remember, in Q1, it was more into the $20-$30. If the FX hit reduces further, presuming the FX remains stable, it's very reasonable to expect that Q2 EBITDA for fertilizations will be above $150 million. I can walk you through the math in the Q&A if you want. Now moving on to SG&A and our progress on the overall $150 million cost savings target. Compared to a year ago, SG&A had about a $16 million negative variance in the quarter, primarily due to revaluation of some outstanding incentive programs. The share price increase. We had to record this known cash expense. Other than that, core SG&A declined, albeit at a slower pace. SG&A reduction should accelerate in Q3 once we start automating a lot of activities following the introduction of our new software platforms that we discussed during our investor day in March. Thus, we expect SG&A to be down for the full year. All in, we've achieved about 60% or $90 million of the $150 million in annual cost savings target. Remember, this $150 million, it's a run rate cost saving. That is compared to the 2023 baseline. Half of these $90 million savings were contributed by Mosaic Fertilizantes. Within that, about $20 million was a result of consuming a higher volume of internally produced rock that we mentioned before. So $45 million from Mosaic Fertilizantes, out of which $20 million from better rock sourcing versus imported. The other half of the $90 million savings was a result of lower SG&A compared to the 2023 baseline. Onto cash flows. With the improving pricing environment and outlook, our expectations for cash flow generation are increasing. In Q1, cash flows were subdued, mostly in light of the seasonal increase of approximately $160 million in inventories. That number you can read on the balance sheet, which happened preparing for increased sales in Q2 and Q3. That is typical for Q1. Another typical Q1 outflow, such for example, as taxes and profit sharing. Going forward through year-end, under our current market outlook, we expect to see a strong improvement in quarterly cash flows due to seasonally stronger demand and the drawdown of inventories. We expect our working capital to end the year approximately $150 million above Q4 2024, and driven primarily by the strong increase in the overall level of sales in Brazil. Also because of higher prices overall materials, mainly sulfur. Although cash flow outlook for 2025 is good, it will be impacted by those factors. Finally, a note on our capital reallocation program. The discussions with counterparties on the non-core Potash assets, Carlsbad and Tucuruí, have really accelerated. We have communicated very long ago our desire for a strategic solution for Carlsbad, and now we can firmly say that Tucuruí is in the same bucket, especially in light of the capital requirements going forward. These investments are not the best allocation of our capital in our portfolio, so we better let someone come in and take them. Bruce, back to you. Thank you, Luciano. To summarize, Mosaic delivered a solid quarter, and our outlook for 2025 is positive. With our improving operational performance, lower cost profiles, and excellent financial foundation, Mosaic is well positioned to benefit from the strong market conditions we see ahead and to navigate effectively in the ever-changing geopolitical landscape. Now, Operator, we would like to take questions from the audience. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question comes from Chris Parkinson with Wolfe Research. Please go ahead. Great. Thank you. Bruce, something tells me you already know what question I'm going to ask. If we stood in your boardroom during the first quarter, how would you have adequately assessed yourself when it came to Bartow, New Wales, and kind of getting into Riverview and Louisiana? Would it be the same answer as you stand here today, mid-Q2? Generally, what are the puts and takes for the second half when you think about kind of finally getting to the end of what has been a multi-year journey? Thank you. Hey, Chris, thanks for your question. Apologize, everyone. I've come down with a little bit of a cold, so bear with my voice. I think we would have been in a similar position, Chris, today versus what we said now. There have been some puts and takes as we went into what we knew and had talked about a lot going into this turnaround season in quarter one. We knew it was going to be heavy at New Wales and Bartow. That turned out to be the case. As always, when you get into equipment, you have some discoverables at New Wales. We had some brickwork in a reactor and phosphoric acid that was unanticipated that took a couple extra days from a turnaround standpoint. We're also doing some reliability enhancement projects, as we talked about as well in our analyst day. Those are paying off as well. part of those are in gyp handling, particularly at New Wales. We did our first train of replacing our gypsum handling system there. Had some commissioning issues as it being the first of three that we are going to do. Those were a little more of a struggle than we hoped. The good news is the benefits there have paid off. We are seeing at target rates at New Wales now. We are seeing at target rates at Bartow now. We have accelerated some of the additional gyp handling work at New Wales more into the first half. First half may see a little more on the reliability side for improvements that we are going to do, a little bit more downtime. Really, what we're doing is after the learnings of the first train we did at New Wales, we're just going to apply that to the other two trains and really just insulate the back half of the year's performance. We are very optimistic about what we're seeing. As you said, Chris, a couple of puts and takes, but we're seeing the results pay off on all of the hard work. Again, accelerating some of the work that we have under our control to just get through this cycle even that much faster and that much better going into the back half of the year. Our next question comes from David Symonds with BNP Paribas. Please go ahead. David Symonds, your line has been unmuted. You may proceed with your question. It seems we're not receiving a response from David at this moment. We will proceed to the next question, which will be from Jeffrey John Zekauskas with JP Morgan. Please go ahead. Thanks very much. In the light of tariffs of material into the United States, are your ammonia costs rising, or are there ways that you can work to keep them under better control? Yeah, thanks, Jeff. I know there's been some reports on things the last couple of days, but our purchases as of now have not incurred any tariff impacts. To say that that would be the case going forward in permanency, I don't know. Ammonia is exempt in the U.S., and that's where we have most of our supply coming from with our contracts and CF, particularly. We are seeing good production out of our own assets in Louisiana. We don't expect much over 20%, if not less than 20% exposure to any market forces anyways, given the product mix of our ammonia. Heavy on our supply contracts, strategic supply contracts, which to date, we're not seeing tariff impacts. Heavy where we can on our own production, tariff-free. Exposure is pretty low on the rest of our product needs, Jeff. Like I said, to date, we haven't seen tariff impacts. The next question comes from David Symonds with BNP Paribas. Please go ahead. Hi, guys. Can you hear me now? Hello? Yes, we can hear you. Hello? David, you are audible. You may proceed with your question. Okay, brilliant. Sorry about that. We're having some tech issues on this side. I had a couple more on phosphates, please. The first one on DAP prices. If I look at market prices and then look at the range that you're stating, it looks like you could be being conservative there, I would estimate. Maybe you could talk about price realization in April and if there's any reason that you wouldn't be right at the top end of that range that you've given for realized DAP prices. The second question, I hear you on maintenance costs, but if I look at the absolute cost in phosphate, it was up $20 million year-on-year, and that's with production lower. Also, the idle and turnaround cost line that you give was also lower year-on-year. Just some more color on that would be good. Is there some maintenance cost that sits outside of that idle and turnaround line? Thanks a lot. Hey, David, thank you. Let me start with your last question. Our cost on a per ton basis, mostly fixed cost absorption, a big impact of that given the heavy turnaround activity. Yes, we've had some extraordinary maintenance costs that do not anticipate being reoccurring as we continue to invest in getting reliability back up with full focus on that. With the DAP price, let me actually just turn it over to Jenny and talk about that. Sure. On DAP prices, I think you're right, David, that the market has been really keeping the resilience for the DAP market. DAP prices are realized. April DAP prices are actually higher than the high end of the range. We anticipated the market is going to keep the strength for the remaining of the quarter. You might be right. We probably would see some upside on the prices for the tons we haven't realized for the remaining of the quarter. Once again, we do not anticipate any price reset post-spring season in North America. The prices in the rest of the world, as you can see, are pretty much at parity at the $700 level. We foresee this price is going to stay. Thanks. Just let me add, David, on this cost thing. We do anticipate once we get back, as we said in analyst day, to our 2 million ton run rate in the back half of the year. Luciano talked about this in the opening comments as well. Conversion costs will be in that $95-$100 range. We are confident in that. As we get through these next few months of extraordinary activities, that is what you should expect. We have Joel Jackson with BMO with the next question. Please go ahead. Hi, good morning, everyone. Thanks for taking my question. Obviously, the Potash market is nice. It's rising. Things are good, demand-driven. Jenny and the rest of the team, I thought some of your comments were interesting. I also have been following the Belarusian shipments and exports. You talked about, let's wait to see if Q2 shipments come down because Q1 was so good. We know overnight, Jenny, right, that we saw Belarus exports be, I think, 1.1 million tons in April, so even higher. It doesn't seem they have any kind of supply issues. As you think about strategy-wise here, CapEx, are you wondering if maybe there are no Belarusian maintenance cuts or it's coming later? I mean, you're raising your volume, but it seems like this has been not really a supply decrease here. What do you think? Joel, yeah, let me just turn it over to Jenny. You're asking her specifically, so I'll let her answer it. Sure. Joel, I think we agree with you specifically on Belarusian's MOP export. We have not seen a shipment reduction as what they announced as a part of the maintenance and the production cut or whatever. However, we have seen production cut that is coming out of China. We also have seen the announcement from Chile S QM on their repurpose of their Potash production. To answer your question, have we seen shipment reduction for the first four months, especially for the first quarter? Yes. We have seen import reduction in China, which is the largest market for Potash for the first quarter, down by 7%, which added to the lower production of domestic production. The inventory in China is coming to a very, very low inventory at port, less than 2 million tons, which is 30% lower than the same time of last year. In-country inventory for local producers, as they reported, was also down by 30%. The low inventory situation is a result of reduced production from the major producers for that region. I would also want to add, with this reduced shipment of domestic production in China and also reduced shipment of multiple international suppliers into China, China is in a very critical low inventory situation for Potash, which sets very well for the coming contract negotiation. I will stop here. Thank you. Our next question is from Kristen Owen with Oppenheimer. Please go ahead. Hi, thank you for the question. Sort of a follow-up, but more closer to home. Can you give us an update on the cadence of your cost of production for Potash as we go through the year? You noted some of the headwinds in Q1, but given the volume update and your maintained target, just wondering how we should think about the cadence of cash cost of production of Potash. Thank you. Yeah, thanks, Kristen. Really, just to reiterate, Q1 was a little bit of a product mix issue as well as Belle Plaine was more impacted due to these weather constraints that we had that caused them to curtail some of their production, Belle Plaine being one of our lowest cost producers. Now that Belle Plaine is back up and running full, fluidity of the supply chain is good. We continue to make good progress on the Esterhazy Hydrofloat Project, adding 400,000 tons in the back half of the year at that run rate. We do expect cost per ton to dramatically improve as we go from quarter two to quarter three to quarter four as those low-cost tons at Esterhazy come more into the marketplace. Luciano, do you have a little bit more you want to talk about? Production tones. I'm sorry, I was with the mic muted. I'll repeat. I was saying that the achievement of the target range could come as early as Q2 if we deliver what's in the plan. So we're positive on that. The next question comes from Andrew Wong with RBC Capital Markets. Please go ahead. Hey, good morning. Thanks for taking my question. Can you just provide some thoughts on, I guess, Mosaic's role and how the S&D plays out over the next, say, six to twelve months as production improves? How does that impact the market balances and pricing? I know, Jenny, you said that the U.S. summer prices are unlikely to reset. I'm assuming a lot of the production that Mosaic's producing would go to the domestic market. I'm just curious how that plays out. Thank you. Yeah, thanks, Andrew. We provided some new graphics in our earnings deck this time to kind of talk about how we see supply and demand growth in each of the two major commodities, phosphate and Potash. There is some detail there. Generally, when you look at phosphate, as we see our production rise in the back half of the year, which we were already anticipating in our kind of supply adds from 2024 to 2025, when you look over on the intersection of supply and demand, you still see pretty much supply constraints. Right now, we would say, and I'll let Jenny talk about it in more detail, that demand is constrained by supply, particularly in phosphates. Adding that little bit of additional production from Mosaic in the back half of the year, as we anticipate that, we see it still being very constructive to tight on the supply and demand balance. Jenny, anything to add? Sure. I think, Andrew, your question probably more towards to phosphate. I would just simply say the demand in India, the pent-up demand in India is going to consume any operational improvement and also the recovery of production from Lithuania. Meaning the improvement from Mosaic and some of our peers in North America market, plus the recovery in the previous Lithuania Lifosa production site, will only be able to support the demand issues in India. To give you some specifics, India demand was down last year on DAP, and their government has realized that this is an issue. With the latest policy support, they will need to buy 2 million tons for the coming Kharif season. That season, they only got 300,000 tons. With their agreement with OCP, that demand cannot be met by only source of Morocco. To your questions on the movement of product between North America, which is our home market, and other market, overall phosphate market is a global market. As we know, for over 40% of the demand, it's actually in the market which are subsidized by the government. There is no affordability issues. When that comes to the non-subsidized market, especially in the Americas, we might see some demand challenges for the second half of the year for North America, which is going to be well offset by the demand in Brazil. As we mentioned earlier, the farm economics there are very different than U.S. Overall, the markets are going to be tight. Mosaic, we might make some movement of the product between the U.S., the home market, and the rest of the world if it is needed. In fact, as we are watching very closely on the affordability issues of phosphate in the U.S. market, and as we are ramping up spring season, we thought the customers might delay their purchases for the same concerns that we have. The fact is that over the last week, we started to have major customers in the U.S. come forward to buy their summer field phosphate at today's price. We are watching the affordability issues. The market is really tight. Eventually, phosphate tons, just like any other products, the price is going to really define where it can be used as the best use. We believe the shipping margin price will stay elevated even with the headwinds. The next question comes from Steve Byrne with Bank of America. Please go ahead. Yes, thank you. You have these 15-year supply and demand charts for phosphate and Potash that are in your slide deck that are very interesting, particularly the phosphate chart that looks a bit unsustainable here with what you're projecting for a fourth year of a meaningful price rationing demand. Is there potential that global demand has really more stabilized versus what you're projecting here? Or do you think that this deficit could drive a yield drag globally this year? Or is this driving demand for your biologicals to release the insoluble phosphate in the soil? Steve, really always appreciate the question. I think it's a combination that I think our biologics for sure help in this regard to get more. I'm going to turn it to Jenny and just let her talk a little bit more about it. Sure. Steve, I think we share the same view as you are. If you look at the overall shipment of phosphate over the last couple of years, that has been an issue. The world would need more phosphate in order to support yield increases or yield level. The fact, if you look at the yield increases over the last four, five years, has really slowed down versus the trend level. That is a reflection of potentially a major contributor was really the lower phosphate application around the globe. I also appreciate that you pointed out how biologicals can help in this kind of situation, which basically helped farmers to maximize or improve the efficiency for the investment they made on phosphate. It is even more meaningful today at the price level that we all believe it is a relatively high level for the farmers. By investing in biologicals to maximize their investment in this higher-priced phosphate was really the point that we're communicating with the farmers, both in North America and also in Brazil. We foresee this biological product will bring the benefit to the farmers, not only increase the yield, but also help them to improve their ROI, return on investment. The next question comes from Vincent Andrews with Morgan Stanley. Please go ahead. Thank you. I appreciate the comments on the working capital in terms of cash flow. Are there any other line items in cash flow from operations that are going to be material deviations, either headwinds or tailwinds this year versus last year? Is it possible to talk about what you think your free cash flow conversion of EBITDA in percentage terms and a range might be this year? Hey, Vincent, I'm going to turn this straight over to Luciano. Vincent, I do not anticipate any, I would say, normal components in cash flow for this year. Because the cash conversion was low last year, pretty much every additional ton of every additional dollar of EBITDA should flow after taxes towards cash flows, absent the working capital increase that we gave. We are not going to give you, let's say, a precise number for cash flow conversion, but I think with this directionally, you should be able to model it based on that assumption. Every incremental EBITDA that you forecast for this year, absent the $150 million working capital increase for Brazil, should flow after taxes towards cash flows. I would like to take this opportunity to correct the information that I gave a little ago. I said that Potash costs should converge into the range already in Q2. I was looking at the wrong column. I'm sorry for that. It should be in range for the second half, so Q3 and Q4. That's the same thing for phosphates as well, just giving that color. Q3 and Q4 should be in range. When you look at the full year, the full year for Potash should be in range. The full year for phosphates should be a little over range, the target range, just because the Q1 number was so high. The next question comes from Ben Isaacson with Scotiabank. Please go ahead. Thank you very much, and good morning, everyone. I'd just like to go back to the analyst day and just ask a question on Mosaic Biosciences. So you're targeting $70 million of revenue this year, profitability in Q4, and then in five years from now, $200 million of EBITDA. Can you talk about the shape of that EBITDA growth? What do the margins look like? And what's the plan with this business? I mean, you don't want a commodity multiple to smother it. Is the intention to spin it off eventually? Thank you. Hey, Ben, thank you. I'm going to let Jenny take most of this question, but we're seeing good results out of the bioscience. As you said, we do, in what we said in our opening comments, anticipate good revenues as we laid out and continuing to grow over the five-year period as we laid out in analyst day as well. We actually think there might be even additional upside to those numbers. Let me get over to Jenny and let her talk about some of the more specifics. Sure. Thank you, Ben, for the questions. I can provide you a little bit more color on our bioscience growth projection. The growth in the future, including today, is coming from two different types of products. One is our own products, the products that we invested in the discovery, and we did our own product development in the field, and we got our own registration. This is our Mosaic's own product. For this type of product, our growth margin is around 60%. In the meantime, at this time, as we are going through product development and the regulatory approval for the products that we have not really got registration, it takes two to three years, depending on countries. In this situation, we are also selling third-party products we call licensed-in products. For this product, the growth margins are lower. It is somewhere between 30%-40%. Going forward, we are going to have major new product introductions in all major markets, as we talked about at analysts today, by leveraging our market access over the next few years after we get the product registration so that we can more aggressively grow the products from our own portfolio. That is basically the story for our bioscience. As you can expect, we are going to disclose more going forward on our new product introduction, on our new product registration, and Neptunion's launch last month in China is just the starting point. Thanks. Ben, we see this very complementary to the rest of our business with plant and crop nutrition, adding soil health to this. We do expect, as EBITDA continues to grow to meaningful numbers, that maybe we do benefit from some parts valuation. This is something we're looking forward to and continue to discuss as that business continues to accelerate and grow over the near future. The next question comes from Richard Garchitorena with Wells Fargo. Please go ahead. Great. Thank you. Maybe we can turn to Brazil, Luciano. If we can dig into the EBITDA upside you were talking about for the second quarter, maybe what is driving that potential $150 million. I noticed production volumes, or sorry, sales volumes in Brazil the first quarter were up 8%. I would expect a meaningful increase to that to get to the 15% full-year increase. Also, just maybe if you had any color on, have things really improved in terms of sentiment since the beginning of the year? Obviously, a lot of trade concerns and that beneficiary mainly being Brazil. What were your expectations for volumes at the start of the year versus today? Thank you. Thanks, Richard, for your question. Let me just turn it over to Luciano to address the first half. If Jenny's got commentary on some of the back half question, let her take it. Yeah. Thanks. The main concept here is that Q1 in fertilization was mostly driven by our production business. Really, the distribution part of it did not kick in, and it will kick in. Approximately 300,000 tons were sold from our own production and 1.5 million from distribution. If you multiply 1.5 million by, let's say, $24 per ton of distribution margin, you get to a $36 million EBITDA in distribution. That is the foreign exchange impact. You get to 18 million. Out of the 122 million, only 18 was distribution. By the same token, if you, for example, assume that sales in distribution are going to go from 1.5 to 2.1, if you multiply it by something in the mid-30 to $40, and if you remove still another FX impact from 5 to 10, you get to about $55 million. If you add this to the performance of the production business in the first quarter, which was $100 million, that puts a floor of about $150 million for the performance in Q2. Remember, also the production business will also increase sales in Q2. Therefore, that's why we're very confident that the $150 million might be even a conservative estimate for the performance in Q2. Jenny, anything to add on the market? Yes. Probably add a little bit on the market. We are expecting Brazil market to grow this year. It is partially also because of the increased acreage from both corn and soybean. As we mentioned earlier, trade flow change has really benefited the Brazilian farmers. We are seeing this growth of the market. For Mosaic's volume growth, as we projected for the rest of the year, it is really coming from partially the market growth, partially is really our penetration into the new regions where we did not really participate in the past, meaning northern part of the region. With Palmeirante going to up and running from July onwards, we are ready to really capture the growth in that part of the region. That gives us the opportunity to grow and also to capture a higher share in the market. Lastly, I would say the headwinds in the Brazil market related to the credit issues and also some of the high interest rate environment, it is still a challenge for the market. We have been very diligent and disciplined in managing our credit risk as we operate and grow in that market. We have our next question from Lucas Beaumont with UBS. Please go ahead. Thank you. Yeah, I just wanted to clarify on the phosphate volume production outlook. You kept your target unchanged there, but with where your first half guidance is in that sort of 3.3 million ton range, you'd need to kind of hit 2 million tons or higher just to get to the bottom of the annual range in the second half. I was just wondering, does that mean now you're probably pointing towards the low end of that range, or do you think you can even get above 2 million tons a quarter in the second half to kind of still be either in the middle or at the upper end of the range there? Thanks. Hey, Lucas, thanks. Yeah, I know that you're putting single points together, but our overall annual guidance still is 7.2-7.6 million tons for phosphate. I think as we talked about our quarterly kind of range, 1.8-2.2 million tons, I think there is upside to the two based on capability at our facility. Point for me is that we're feeling very good about the work that's been done, the demonstration of capacity that we're seeing post some of these reliability improvement projects that we know that have been hanging on us as we've tried to step on the accelerator into 2025 and late 2024, and that we do feel good about full capacity output in the back half of the year. Again, still feel good about the 7.2-7.4 million ton range and not willing to say that we're coming down to the low end of that by any means. The next question comes from Edlaine Rodriguez with Mizuho. Please go ahead. Thank you. Good morning, everyone. This is for Bruce and Jenny, I guess. I mean, I know it's hard to do, but given the near-term and medium-term dynamics of the respective industries, if you have to choose between P and K, which one would you allocate more capital CapEx to right now? Oh, Edlaine, way to finish the call. I appreciate the question. That is a tough one because we do foresee stripping margins being protracted at a high level for phosphate. I think as we talked about in analyst day, we still see very constructive on Potash over the five-year period. I do not know what long-term, medium-term range you are thinking about, but let's just use five-year kind of outlook. A lot of it, if I were to have a crystal ball and could think about it, would be how fast and how lumpy does some of the new supply come on in Potash. We are feeling pretty good about the stripping margins in phosphates. At the end of the day, though, the EBITDA to cash conversion in Potash is better than it is in phosphates just because of the large CapEx demands that that business has with gypsum stacks, clay settling areas, and just the cost to maintain those facilities. It is a catch-22. I think we're happy with both children right now, and we're going to continue to invest appropriately in both. I know that does not give you the right answer or one P or K answer, but it always depends, and it depends on structure, depends on what's going on in the market. We feel pretty good about both, and we're going to continue to do the right things and swing CapEx and investment a little bit here or there, depending on how things sharpen up from a clarity standpoint over the next one, three, five years. I'll leave it at that. I might just. Thank you. Just for the purpose of thinking about it, the operating leverage in phosphates is huge, precisely because it consumes more capital, but also in upturns of the cycle, it tends to surprise on the upside in terms of cash flow generation. So bear this in mind. Operator, I think we're ready to close. Certainly. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Bruce Bodine for any closing remarks. Thank you to everyone. I'd like to close our call by reiterating our key messages. First, ag and fertilizer markets are strong, and prices for our products are rising. We expect good business conditions to persist through the remainder of the year. Second, we are making strides on our work to improve phosphate asset reliability and production, and we're on track to deliver better production numbers this year. Third, our market access is a significant strategic advantage, and it is enabling us to benefit from the strong markets and grow in new ways. For example, we've built a powerful franchise in Brazil, and it is now performing exceptionally well. Our bioscience business is growing faster than others because we have distribution access. Finally, we continue to make progress on our efforts to reclaim underperforming capital so that we can redeploy in pursuit of higher shareholder returns. All in all, Mosaic is performing well across our businesses and geographies, and we are in excellent position to continue to benefit from the compelling market conditions we expect over the near and medium term. Thank you for joining the call today, and have a great, safe day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.