Brazil Operational Challenges
Q: With significant write-downs and challenges in Brazil, what's your long-term plan there?
A: We're conducting a complete commercial review of our Brazilian business, which represents less than 2% of the market there. Despite recent $1 billion in challenges, including write-downs and FX issues , we believe in the long-term growth of Brazilian agriculture. We're assessing how to continue accessing this market, focusing on proprietary products, and strategically reviewing our operations to determine the best path forward.

Retail Guidance Downgrade
Q: You've lowered retail guidance by $150 million shortly after Investor Day. Do you still stick to your targets?
A: Yes, we absolutely believe in our targets and are progressing towards them. The downgrade is mainly due to challenges in Brazil, such as a shift to generic products, unfavorable weather, and changes in buyer behavior. We've initiated measures like closing 21 locations, curtailing 3 blenders, and cost reductions. Additionally, a wet spring in North America contributed about one-third of the adjustment , but we expect a strong fall season.

Potash Market Outlook
Q: Can you elaborate on potash supply, demand, and potential disruptions like rail strikes?
A: We've increased our global shipment estimate by 1 million tonnes, largely due to higher demand in China. The market remains balanced, with supply from Canada, Russia, Belarus, and Laos. We've considered a potential rail strike in our guidance, embedding a few days to a maximum of a week of impact. If there's no strike, we could trend toward the midpoint or upper end of our potash sales volume guidance.

Path to $2 Billion Retail EBITDA
Q: How will you achieve $2 billion in retail EBITDA by 2026?
A: We have a clear path involving three key areas : First, continue growing our proprietary products business at over 10% annually, focusing on plant nutrition and biologicals. Second, maintain steady growth in our core North American and Australian operations through network optimization, organic growth, and tuck-ins. Third, stabilize and improve our Brazilian business.

Capital Allocation and Share Buybacks
Q: With a strong balance sheet and low CapEx needs, will you increase share buybacks?
A: We have a disciplined capital allocation plan, with $2.2 to $2.3 billion in CapEx, including investments in retail and upstream businesses. As we generate incremental cash beyond our commitments, we will consider share repurchases among other opportunities like retail tuck-ins.

Impact of Phosphate Prices
Q: Are high phosphate prices hurting demand and affordability?
A: Yes, we're seeing concerns about phosphate affordability among growers. While potash affordability is strong, phosphate prices have not aligned, potentially leading to demand softness in the fall season. We're monitoring this closely, though our diversified phosphate business mitigates direct impact on our volumes.

Brazil Crop Chemical Challenges
Q: How are generic crop chemicals impacting your business in Brazil?
A: The crop protection sector in Brazil faces intense price competition from generics, affecting margins. Crop chemicals represent one-third of our Brazilian business. We've proactively reduced our inventory by $250 million to position ourselves better. We aim to improve margins, focus on cash generation, and manage inventories tightly.

Derivatives Contract Issue in Brazil
Q: What led to the unauthorized derivatives loss in Brazil, and how are you managing risk?
A: The issue was due to challenges in segregation of duties and controls in Brazil during organizational changes. It was not normal course. We quickly identified and remediated it and have strengthened controls. We use standard forwards and options for hedging but are ensuring compliance with our policies.

Weather Impact on Retail Guidance
Q: How much did U.S. weather contribute to the retail guidance reduction?
A: The wet spring in North America accounted for about one-third of the $150 million retail guidance reduction. Despite this, we anticipate strong demand in the fall season.

Proprietary Products Growth
Q: Despite aiming for 10% growth, why did proprietary product share slip?
A: The apparent slip is due to last year's fertilizer market reset affecting percentages. Our proprietary products continue to perform well, with adjuvant sales up 7% and strong growth in plant nutrition and biostimulants. Tight market conditions favor our proprietary offerings.

Supply from Laos in Potash Market
Q: How is supply from Laos affecting potash capacity?
A: Laos has faced production challenges due to water inflow issues. We expect some incremental supply over the next 2-3 years, potentially 1 million tonnes, but larger expansions have been deferred. The market remains balanced, and we anticipate potential tightening in the coming years.

North American Potash Demand
Q: How is potash demand looking in North America given lower crop prices?
A: Despite softer commodity prices, potash affordability is strong. We had a very successful summer fill program and are effectively sold out through Q3. We're confident in consistent consumption patterns.

Rail Strike Potential Impact
Q: What is the potential impact of a Canadian rail strike on your operations?
A: Any rail stoppage would impact our potash exports, especially through Canpotex. We've embedded a possible short strike in our guidance. We're hopeful for a resolution to avoid significant disruptions.