Good morning and welcome to the Bunge Limited 2017 Third Quarter Earnings Release Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mark Haden, Vice President of Investor Relations. Please go ahead.

Great. Thank you, Andrew, and thank you, everyone, for joining us this morning. Before we get started, I want to inform you that we've prepared a slide presentation to accompany our discussion. It can be found in the Investors section of our website at bunge.com under Investor Presentations. Reconciliations of non-GAAP measures disclosed verbally on this conference call to the most directly comparable GAAP financial measure are posted on our website in the Investors section. I'd like to direct you to slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current views with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation and encourages you to review these factors. Participating on the call this morning are Soren Schroder, Chief Executive Officer; and Thom Boehlert, Chief Financial Officer. I'll now turn the call over to Soren.

Thank you, Mark, and good morning, everybody. Thank you for joining us. We're on page number 3. Our earnings in the third quarter were higher sequentially and year-over-year, although they continue to be impacted by market and industry headwinds. As a result, we're reducing our earnings guidance for the year in the Agribusiness and Sugar & Bioenergy segments, the details of which Thom will discuss later in the call. While the business environment remains very competitive, we can see signs of improvement and are taking proactive steps in areas we can control, such as costs and CapEx, engagement with customers, and integration of new businesses. We believe these initiatives will make our business more resilient and better able to respond effectively to changing market conditions. The Competitiveness Program, which we announced in July, is well underway and some of the early decisions we've taken are already having a clear effect. We're tracking towards the lower end of the $700 million to $750 million range in CapEx, and our industrial and supply chain savings are on track for $100 million reduction for the year, with $30 million achieved during this quarter alone. While the Competitiveness Program is about reducing cost, it is also about making Bunge more agile and efficient over the longer term. In September, we announced the acquisition of Loders Croklaan, and expect to close that transaction in the first half of 2018. We are eager to move on with the integration and to introduce the improved global platform to our customers. There's exciting growth in all of the B2B segments from food service to human nutrition, and our customers are looking for increasingly complex solutions to the functionality of their ingredients. The growth potential in Asia, South and Central America, Eastern Europe, and the Middle East is significant.…

Thank you, Soren, and good morning, everybody. Turning to the earnings highlights on page 5, reported third quarter earnings per share from continuing operations were $0.59 compared to $0.79 in the third quarter of 2016. Adjusted EPS were $0.75 in the third quarter versus $0.73 in the prior year. Total segment EBIT in the quarter was $175 million versus $213 million in the prior year. On an adjusted basis, total segment EBIT was $204 million. Agribusiness results improved in the third quarter, with adjusted EBIT of $127 million compared to $83 million in the third quarter of 2016. This resulted from a $9 million increase in Oilseeds and a $35 million increase in Grains. Global soy crush volumes were higher than in the comparable quarter last year, but the impact was partially offset by lower margins. Oilseed trading and distribution results were higher, driven by higher volume and effective risk management. Softseed crush volumes were comparable to the same quarter last year, but margins were slightly weaker. Margins were comparable in Canada, but lower in Europe as a result of higher seed prices and weaker oil demand in Russia. The increase in Grains adjusted EBIT was primarily the result of improved origination margins in Brazil and Argentina and stronger risk management results. Margins remained weak in destinations, with customers continuing to cover only short-term needs. Volumes in both origination and distribution were comparable to last year. Overall, Agribusiness results improved compared to the same period last year, primarily as a result of improved soy crush volumes, origination margins, and risk management results. Food & Ingredients adjusted EBIT decreased $8 million to $64 million in the third quarter compared to $72 million in the third quarter of 2016. Edible Oils results improved by $4 million compared to the third quarter of…

Thank you, Thom. We're on page 12. So before we move onto Q&A, I just want to summarize a few points that are important. With our integrated global agribusiness and food platform, Bunge continues to be well-positioned to capitalize on favorable long-term economic and consumer trends. We have a clear strategy in place and we are focusing on what we can control with aggressive actions to improve our cost base, increase agility, and improve the balance of our business. Looking ahead, and although these are early days, we are starting to see more favorable conditions. Based on these and the steps we're taking to improve our business, we expect improved results in the fourth quarter, which will give us momentum as we enter 2018. And with that, we'll now turn it over to the operator and take your questions.

We will now begin the question-and-answer session. The first question comes from Ken Zaslow, Bank of Montreal. Please go ahead.

Hey. Good morning, everyone.

Hello, Ken.

Hi, Ken.

I have two questions. One, I'd say, can you talk about the impact of new capacity coming online in the U.S. and how will that affect the U.S. crush margins and will you be able to structurally get back to your U.S. crush margin? And the second thing is, as you've seen the environment change over the last year since your Analyst Day, can you talk about have you changed at all your earnings power, and to what extent are things within your control versus not within your control and being able to create value?

Okay. Thanks, Ken. Regarding the U.S. and crush capacity, there is marginal capacity coming on, brownfield capacity coming on over the next year or two. But it is in the context of very, very strong domestic demand, U.S. meal demand, and so the well-being of the meat producing industry is very solid, exports are strong. So I don't believe that the additional capacity that's coming on over the next year or so will have a material negative impact on overall U.S. crush margins. I think it's more a matter of how the U.S. is positioned for meal exports relative to all the other origins, and of course, the size of the bean crop, but the U.S. should remain a solid performer in soy crush. As to your second question, I don't think that long-term or even medium-term the earnings power of our platform, let's say Agribusiness, which is probably where you're directing most of the questions, has changed. It's clear that we are in the middle of or maybe at the end – beginning of the end of a multi-year down cycle in Agri with mounting global stocks and competition on every corner. But the drivers of our outlook that we presented back in 2016 really was the increasing utilization of crush capacity in soy in particular. And although meal demand this year globally trading – let's say, global trade in meal was a little disappointing, it is still very much intact going forward. We think next year will be better than the past and we will slowly, but surely, eat our way into excess capacity, and that should drive utilization and margins up. And grain handling, where the industry participants in general, including ourselves, really handled most of the very large South American harvest for very little margin, because…

Great. Thank you very much.

The next question comes from David Driscoll of Citigroup. Please go ahead.

Great. Thank you, and good morning.

Hi, David.

So just a couple of questions to follow-up here. Agribusiness and Oilseed crushing, I wanted to just ask a little bit about South America, a question on Europe, and then fourth quarter question, but it's all related. South America, pursuant to your explanation about maybe being a little bit more optimistic next year, I guess I want to push back a little bit on that and say that if your conditions this year were that the industry had too much logistics booked and we understand that many of these logistics contracts were multiyear contracts, do you really expect a material improvement in South American – it would be both Grain handling and merchandising and Oilseed operations in the second and third quarter next year. And I'm just curious if you would have that optimism, given the fact that these take or pay contracts were likely multi years and it seems like we could be in store for a repeat next year of what we just had this year.

Okay. What's your second question?

No, let's start there. I mean, I can give them to you all in a row...

Okay. All right. Okay. Yeah, fair enough. All right. Well, I don't want to get too far ahead of myself in saying that things will be dramatically different next year, but I can only speak for ourselves. And we have enough flexibility in our, let's say, logistics setup that we can see entering next year's crop season in South America with a lot more flexibility than we had this year. I think others are following similar paths, but I can't comment on that. Yeah, some of these contracts are multi-year, but they're all within tolerances and ranges, and we have, as you know, a footprint in Brazil that allows us great flexibility. So I do think it will be a different season this year. We certainly will be very disciplined in how we go about originating and logisticating grain and crush with a view to earning a fair margin for what we do, which we did not earn last year. So I do believe on the margin, it'll be a better starting point, Dave.

On Europe, can you just talk about the changes that happened this quarter, and do you expect any improvements in European crush in the fourth quarter or in the first quarter next year? And I only picked that because I'm just trying to look six months forward.

Right. So European soy crush margins were poor this past quarter, much worse than we would have anticipated and that, of course, is directly linked to the, let's say, over-crushing and building up meal stocks, particularly in Argentina in the second and also partly in the third quarter. Those margins are linked by logistics. So Q3 was poor, but ourselves and, I believe, others have adjusted run rates in South America. We've done it both in South America and in the Europe, and we are beginning to balance meal stocks in a good way. Oil stocks are very snug, so in reality we do need crush to supply a very tight oil market. But meal stocks are balancing, and I believe that'll continue through the fourth quarter. So, we've seen European margins bottom out here at the end of the third quarter, and they're looking better – not great, but they're looking better for the fourth quarter, and margins in general in South America have picked up a bit as we got into the fourth quarter here. Believe that will continue into the first quarter of next year. Argentine farmers in particular have a big incentive to carry their – part of their old crop into next year, and their new crop at the moment looks like it's delayed a bit, won't be available until sometime in March. So the first quarter should see less competition out of Argentina, lower run rates, and that should give Europe a reasonable start to the year, and Brazil as well, assuming that the crop is on time. So I think it looks a little bit better, but we're certainly not where we had hoped to be if you go back six months ago.

And then, Soren, can you guys just clarify of the guidance change in Agribusiness, which I think is down on the low-end about $125 million? How much of that was just third quarter actualization? And really what I'm getting at is, how much of your fourth quarter implied guidance, how much was it actually reduced in the updated guide here?

Yeah, it's a little bit of both. Some of it is – I don't know, Thom, help me out $25 million, $30 million of that is probably Q3 relative to expectations, and the rest is Q4.

Yeah.

And it is mostly around global crush margins not being as good as we had anticipated. They're better, but they're not as good as we had hoped back in the middle of the summer.

Thank you, guys. I'll pass it along.

Okay. Thanks, David.

The next question comes from Adam Samuelson of Goldman Sachs. Please go ahead. Adam Samuelson - Goldman Sachs & Co. LLC: Yeah, thanks. Good morning, everyone.

Good morning. Adam Samuelson - Goldman Sachs & Co. LLC: Maybe first continuing in Oilseeds, and, I guess, I'll push back a little bit on the capacity utilization questions, because what I'm struggling with is there is investment that's going on in the industry in the U.S. Board crush has been in the mid-80s to near $0.90 range. Cash crush hasn't been there. You guys haven't been able to achieve margins commensurate with that, nor have some of your bigger peers. And I'm trying to think about where's the disconnect that's driving the investment. Clearly you guys don't really want to be adding capacity. You want to improve capacity utilization. Yeah, there are dollars flowing into this sector, and I guess the corollary to that is as I look forward, you have some biodiesel kind of fluctuations in policy with the U.S., with the tariffs in Argentina, Argentina now being able to export to the EU. That would point to an oil-driven crush, and the impact on meal and the impact on overall crush margins would seem to be a net headwind for you guys. I'm trying to reconcile all that.

Okay. Well, board crush sort of in the $0.80 to $1 range is what we've been for the last – for the fourth quarter for quite a while, and actual cash margins at the moment are at least that. So that's what we are experiencing. I can't comment on others, but cash crush margins going into Q4 here are pretty much as good as we expected them to be. So the U.S. continues to be a bright spot in global soy crush, driven primarily by very strong underlying meal and oil demand; oil primarily from the biodiesel sector, meal clearly because the downstream parts of the chain are profitable and expanding and doing very well. So that is also what has attracted some of the marginal expansion that's taking on right now. It's not an avalanche of new capacity. It seems like it is very localized, smaller type of expansions that are taking place, not enough in my opinion to upset the balance so long as meal demand continues to grow, which it is set to do. I think estimates for meal demand in 2018 are up – continue to climb up, let's put it that way. So I think the U.S. remain a solid piece of the equation. Adam Samuelson - Goldman Sachs & Co. LLC: And, Soren, I mean, I'm going to clarify that – on the question. It's more a full-year comment. I mean, the fourth quarter is always a good quarter for cash crush. I mean, I'm talking about the whole year, and I don't think your crush realizations this year – I mean, certainly first quarter for North America would be in line with those kind of numbers.

Yeah. I think what you experienced in the second and third quarters this year in North America, but in many parts of the world was the effect of the flows of ethanol byproduct that – products that used to go to China, that now this year because of the ban on imports backed up in the U.S. and in other parts of the world substituted some of the domestic meal consumption that we otherwise would have had. If it hadn't been for that, we would have had a fantastic year in domestic meal offtake. It was still a positive year, but not as strong as it would have been without the change in flow of DDGSs. That is now behind us. And I believe even with that incorporated going into 2018, soybean meal demand will grow strongly. That was what disturbed the little piece this year Q2 on Q3. Looking into next year, we feel good about the U.S. structural crush margin overall. And as relates to your question with biodiesel flows and demand for oil, it is true that – sort of complicated mix between import duties and quotas and mandates between Argentina, Europe, and the U.S., but the fact, I believe, is that overall biodiesel mandates in the world continue to grow. In Brazil, they are growing, in Europe they are growing year-on-year, and in the U.S. they are at least flat, possibly higher. And that is driving a demand for oil, and that will mean that we will need to produce or crush a higher rate of soybeans in the coming year in the U.S. to stem what will be a very strong oil market. That could very well mean a higher oil share, which would price meal at levels that would improve the inclusion in formulas back to the levels where it was in 2015 and 2016. In fact, that's kind of what we're hoping for. Meal has been a bit out-priced relative to other ingredients really since the beginning of 2016. So maybe that will be the window that allows meal to lose a little bit of relative share to oil as we get into next year. I would look at that as a total positive, not only in the U.S., but also outside. Adam Samuelson - Goldman Sachs & Co. LLC: Okay. And just a clarification question, because I think in response to David's question, you said the fourth quarter Agribusiness reduction was mostly on crush margins not being as good as you thought in the middle of the year, but you just talked about the U.S. being good. So is that...

Right. Adam Samuelson - Goldman Sachs & Co. LLC: ...an ex-U.S....

Yeah, that's basically.... Adam Samuelson - Goldman Sachs & Co. LLC: ....function, where it's Argentina?

It's Europe and Argentina. Those are the two places. Brazil, U.S. are fine. Argentina and Europe, to put it bluntly, is where the issue is and they are tightly connected meal prices itself off mostly Argentine crush. Adam Samuelson - Goldman Sachs & Co. LLC: Okay. I appreciate the color. I'll pass it on. Thanks.

Okay. Thanks.

The next question comes from Robert Moskow of Credit Suisse. Please go ahead. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi. Thank you. Just, I guess, in your outlook for the Food & Ingredients business for heading into 2018, can you give us a sense as to what the main drivers are for getting back to your normal kind of growth rate? I know you're not giving specific guidance, but other than cost efficiencies, what really drives the growth of that business on a volume basis and to what extent does the Loders transaction help escalate that?

Yeah. So we're not including in our outlook Loders, although that will clearly be a nice boost when it closes, but since the timing is uncertain we are putting that aside for now. But the – our Oils business without Loders is growing nicely. We have a very intense focus on added value products in our Oils portfolio in Europe, in North America, also in Asia, very intense focused on global key accounts. We've had some significant successes over this past year that as we roll them forward into 2018 and 2019 show nice growth with customers we have not done business with before. We're becoming a better operator of the global B2B Oils business already without Loders, and with Loders, obviously, it will take a whole another level. So Oils we feel good about growth from a volume and a margin perspective, and in Milling it's really returning to some kind of normal. Whether we get back to the highs we experienced in Brazil in the last year's already next year, I don't know, but our Milling results this year between Brazil and Mexico are off significantly. And we can see signs in Brazil that we'll get back to something more normal this coming year in combination of lower domestic crop, lower quality crop, and consumers returning in, hopefully, a strong way as we get into the second, third, and fourth quarters of 2018. So, Milling is probably where the biggest delta is going to be in earnings. This year we'll end up being off, Thom, probably $60 million, $70 million from our original expectations. So we would certainly expect to close a big part of that gap as we get into next year. Robert Moskow - Credit Suisse Securities (USA) LLC: And that was kind of my follow-up on Brazil. I mean, you have a big presence there and you talk to a lot of people about the economic outlook, and I'm curious what are you hearing about signs of stabilization or even a return to growth just on a macro presence and to what extent does that inform your outlook too.

We're not assuming a rapid return of consumer spending in our forecast for the balance of the year or even into the early part of next. The Brazilian economy is clearly showing signs of having bottomed out. Unemployment is coming down. People are getting back to work. But it is yet to translate into more spending in the bakeries or in the grocery stores. So it's still a economy that is living in a frugal way, so to speak. I'm sure that will change sometime during the next year, but in our outlook, again, we'll be more specific in February, but I don't believe we'll be planning for a lot of improvement until probably well into the second or third quarter. Robert Moskow - Credit Suisse Securities (USA) LLC: Okay. Thanks, Soren

Okay.

The next question comes from Ann Duignan of JPMorgan. Please go ahead.

Good morning. This is Tom Simonitsch on behalf of Ann.

Hi, Tom.

Just focusing on your sugarcane business, can you help us understand the hedges you have in place for both 2017 and 2018, and is your revised 2017 EBIT guidance there run rate for next year?

Sure. The sugar milling business has two components. One is sugar, the other is ethanol. Roughly 40% currently is dedicated to sugar and the balance to ethanol. On sugar, we do hedge and for this year we had hedged about 75% to 80% of our sugar sales and looking into next year, we are getting to the 50% range plus, part of that is through a natural hedge of the how sugar sales are handled in Brazil and part of it is pure financial hedging. So looking at the run rate, I mentioned that our full-year outlook this year is for about $75 million of milling EBIT and we would – we're going through the detailed planning process now, but that's probably ballpark a good estimate going forward.

Okay. Thank you. And also could you elaborate on the financial separation of Sugar & Bioenergy?

Yeah. I mean, what it really means is that we have spent the last couple of years exploring all possible avenues for a realization of fair value to shareholders and we'll continue to do that, so that we can move and act quickly. We want to make sure that we've got the financial separation of the businesses set up, so that we can do it in short order and don't have to get on with that after we've made a decision. So it is just to indicate to you all that we are active, we continue to pursue our stated goal of reducing exposure of that business, and we are vigilant in that pursuit.

Thank you. I'll pass it on.

Okay.

The next question comes from Vincent Andrews of Morgan Stanley. Please go ahead. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Thanks and good morning, everyone. Just wondering, as we think about Agribusiness and I know we've talked a lot about the logistics piece, which appears to be partially or maybe entirely within the industry's control. If you think about where your EBIT guidance started from the beginning of this year to where we are now, can you put some round numbers on how much of the reduction could have been avoided if the logistics issue hadn't played out the way that it did? So, I guess, what I'm trying to say is, how much do you think we get back next year if the industry just sort of manages what it can control?

I think that would get probably too close to giving specific guidance for next year at an early point in time, but it's not insignificant. There are two buckets of variance from where we started to where we are now ending for the year. One is clearly soy crush, that's a significant chunk of it. Margin is on balance across our fleet, call it 40 million tons of capacity are a good $5 to $8 below where we expected them to be as sort of an average across the various geographies. That's clearly the biggest variance. And then there's another maybe not exactly similar chunk, but meaningful piece that came from really handling a large part of the – particularly the Brazilian crop with very, very skinny margins, if any, and that will be a headwind that we certainly don't expect to recur next year. But I'll stop short of giving a number on that. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Understood. And if I could just ask a question on the cost savings program, both in terms of what you're going to realize and in terms of what it's going to cost to get there. How much of it is in Brazilian real or in other foreign currencies that have volatility associated with it, such that the numbers could be bigger or smaller, depending on what happens to the exchange rate?

Well, I mean, we're going through the process now of allocating the cost savings to the different businesses, so by the end of the year we will have completed that. And what I – and I guess the other piece of that is that when we report the progress going forward, we will isolate the impact of things that we can't control. So FX would be one of those that we will clearly set out, so that you can actually track the core savings going forward. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. I'll pass it along. Thank you very much.

Thank you.

The next question comes from Farha Aslam with Stephens, Inc. Please go ahead.

Hi, good morning.

Hey, Farha.

Could we talk about China, what are crush margins, your outlook for crush margins, and with increasing ethanol production they'll have more DDGs, what do you expect the impact of that to be on Chinese crush margins?

Well, crush margins in China have been volatile again this year, but less volatile than they were in the previous years. It feels like the industry is sort of settling in, stabilizing a bit, but below our expectations, call it an average margin between $15 and $20 a ton is probably about right, and that's about where we are now. So it's less than we would have liked. It's better than it was. It's more stable. And domestic meal demand in China is off the charts. I think it's up between 10% and 12% this year, which is good for utilization rates of Chinese crush, and a lot of it, of course, has come because of the ban or the – yeah, the ban basically on imported DDGSs, which meant that protein needs have to be fulfilled by soybean meal, and that led to the domestic increase in meal consumption and a dramatic increase in soybean imports. It's a big, big step-up in soybean imports from China this year, which in a way also went against origin crushing that they competed with domestic crush plants. So you had a bit of both, DDGS backing up in the world market, slowing soybean meal trade down, and then increased competition for soybeans at the same time. So net-net, it was a good thing for domestic Chinese crush, but it was negative for everything outside of China. What impact increased domestic – ethanol production China will have, I mean, I guess depends on how quickly they ramp up production of ethanol. I think the intent appears to be ethanol production to solve the corn surplus, whether that is a long-term viable strategy or not remains to be seen. But it is an effective way of reducing the corn surplus, and that will have a negative impact on soybean meal demand, which most likely means that growth rates for soybean meal will slow down and if it happens. It's still not happened, but if it happens. And what that would mean is a reduction in the growth of soybean imports, which all else equal would be a big benefit to the origins to Brazil, to the U.S., to Argentina, where there will be less competition for beans for domestic crush and exported products. So, ethanol is probably a negative to Chinese crush margins, but a net positive to everything outside.

That's helpful. And then just following up on your comments that you're seeing the bottom of the Ag cycle, I think you're hearing doubt from all of us, because we've heard this for about two years on and off.

Yeah.

Could you share with us – there's things that are under your control, but fundamentally the farmer is more powerful today than a decade ago. How is the farmer sentiment right now and perhaps how – any changes Bunge's seeing that will make that bottom of this Ag cycle more real in your mind?

Well, the cycles typically change when you start seeing signs of – or changes in either supply or demand. And I mentioned in my intro what's happened in wheat, which is an important commodity and between reduced acreage in many parts of the world because profitability of other crops was better and marginal crop production problems, you're getting that market back into balance. I think the same thing will happen in corn and soybeans over the next year or two. I don't know exactly what the timing of it will be. But the markets are working and will send the signals to adjust supply in a natural way if it doesn't happen through weather events or otherwise. So that I think is encouraging. We have many signs of very, very strong underlying macros, whether it is global soybean meal demand or, as we talked about earlier, vegetable oil demand for either food use or biodiesel. All of it continues to grow at rates that are at or higher than what we had previously expected. So the fundamentals are good. Farm economics are not great and that is why it is causing a lot of the retention around the world. Farmers are holding back what they can. Eventually they will have to sell. What we – the service we provide farmers and the market in general is a service that should be associated with the margin. We are doing everything we can. I think we have a particular advantage perhaps in places like Brazil to offer more and more services to farmers to help them, as I mentioned, crop protection, fertilizer financing, risk management and so forth, so that we can earn the margin on top of the function we serve in providing logistics and a clear pathway to global markets. We will – I believe the industry will be rewarded for that over time. This past year was a strange set-up as the new crop started in South America. And I think, as I mentioned, we all learned a bit of a lesson in not getting too far ahead of ourselves and trying to second guess what farmers may sell or not. We need to earn a margin, whether they do or don't. So I do think that the markets are in the early stages of adjusting, and I believe that we can – we are such an important partner to farmers globally that we will be able to earn the margin in helping them market their crops going forward. So I'm optimistic that we are if not at the bottom, very close to it. I think next year we'll be better for sure. How much better, we'll talk about in February.

That's helpful. Thank you.

The next question comes from Heather Jones of Vertical Group. Please go ahead.

Good morning.

Hi, Heather.

Good morning.

Hi. I have a couple of quick questions and then a bigger question. One is, wonder if you could update us, I think it was last quarter, or the quarter before you said something about there being about a couple of million metric tons of excess meal and destination ports. And I was wondering if you could give us an update on where – what you think the imbalance is currently.

I don't have that number on the tip of my tongue. It's less. So...

Okay.

...it was one of the things we spoke about sort of putting a bit of a condition on the outlook on crush margins that the industry had over-crushed during the second quarter and had build up meal inventories both at origin, but also at destination that was putting pressure on margins. We adjusted run rates during the third quarter, I think others did too, and it's getting into a better balance, so it's less than it was.

Okay. And you mentioned on the Grain side, part of the improvement was risk management. I was wondering did you have any significant gains on any freight contracts or anything during the quarter, because I noticed that the freight rates spiked during the quarter.

No, nothing relating to freight. But it is true that freight rates have come up quite a bit, which is – it's small, but important piece of the value of our network going forward. So walking into 2018 with rates that are most likely double of where they were at the beginning of this year puts the value of controlling logistics that is worth a lot more than it was last year, where whether a ship waited for 30 days or 40 days didn't seem to make much difference. Now it's beginning to count again. So I think it is a good thing for the structural piece of our business and our assets. But for the quarter, freight did not play a significant impact on the results.

Okay. And I hadn't come into the call planning to ask this question, but you mentioned earlier in your prepared comments that you guys your outlook had been downgraded by Moody's, and so I went and looked at that release quickly, and it says in there that you guys could be downgraded if they think that your pro forma EBITDA in 2018 won't rise above $1.9 billion. So I wanted to ask, am I misunderstanding something there? Because that would imply – because I think you all are targeting even if Loders gets completed, like that should do a little over $100 million, so that implies like a really dramatic year-on-year improvement. And so, was wondering do they include something in EBITDA that we don't, just if you could help us understand that commentary more.

Yeah. I mean, they gave a couple of benchmarks. One relates to 2017 EBITDA and free cash flow generation this year, and I think those are well within our reach. And then they talked about EBITDA for 2018. And so they've kind of given a range of – and I don't want to speak on their behalf, of the kind of performance that they would be looking to see to either maintain our existing – the existing status or potentially downgrade the company to Baa3.

So that's...

That EBITDA metric is – there's nothing particularly unusual about the way they do that.

Okay. So if they're saying that you could be downgraded if full year EBITDA in 2018 is not above $1.9 billion, we can take that at face value?

I think that is one of the metrics, yeah, but I think you can – that's what they printed. And I think you could take it at face value. They look at a number of other metrics and qualitative components as well, but that is a metric they put out.

Okay. All right. Thank you so much.

Okay.

And we have a follow-up from Ken Zaslow of Bank of Montreal. Please go ahead.

Yeah, I just had a follow-up. As I listen to the conference, it seems like in relative to yesterday's conference call by a competitor, it sounds like you guys are in two different industries, I guess. They're thinking very clearly about, hey, let's change our capital spending away from oilseeds and agribusiness. And you guys are still in the view that, hey look, things are going to improve and things are going to get better. Can you just help kind of come together on – and usually industry participants, obviously, there's no – there's not always a general opinion, but it seems like the opinion is seemingly very divergent. Can you talk about why you think that that's the case?

Ken, I really can't comment on what they think. I can tell you what we do. And we are – you're well aware of the point of the cycle in which we are, so we are adjusting where we can. We are being very diligent on CapEx. We have reduced CapEx a lot ourselves over the last two years, so this is not new, and next year is another reduction. We are cutting costs. We are becoming more agile in a dramatic way. So we are not pretending that this is not a moment in time where you have to do things differently. We know we have to. But we also believe that the Agribusiness footprint and the function we serve in the world market is very important, and that things can change quickly and that we will be rewarded for staying committed to that business over time. And that is one of the reasons we've gone ahead with the project in Canada, which on top of that is a capital smart way of accomplishing our mission. We are a minority partner with rights to the flows. So we're very committed to the Agribusiness part of our company. We believe the fundamentals are solid long term. We're spending this moment in the weakness in the industry to shore up and get better, where we can consolidate we will, where we can partner we will. The value of this will shine again, I have no doubt.

Great. I appreciate it. Thank you very much.

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Haden for any closing remarks.

Thank you, Andrew, and thank you again for joining us this morning. Please follow-up with me today if you – and tomorrow if you have any questions from today's call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.