Denita C. Stann - Potash Corp. of Saskatchewan, Inc. Jochen E. Tilk - Potash Corp. of Saskatchewan, Inc. Stephen Francis Dowdle - Potash Corp. of Saskatchewan, Inc. Raef Sully - Potash Corp. of Saskatchewan, Inc. Mark F. Fracchia - Potash Corp. of Saskatchewan, Inc.

Jonas Oxgaard - Sanford C. Bernstein & Co. LLC Oliver Rowe - Scotia Capital, Inc. (Broker) Vincent S. Andrews - Morgan Stanley & Co. LLC Don Carson - Susquehanna Financial Group LLLP Christopher S. Parkinson - Credit Suisse Securities (USA) LLC Andrew Wong - RBC Dominion Securities, Inc. Steve Byrne - Bank of America Merrill Lynch Mark Connelly - CLSA Americas LLC Adam Samuelson - Goldman Sachs & Co. Joel Jackson - BMO Capital Markets (Canada) Steven Hansen - Raymond James Ltd. Yonah Weisz - HSBC Bank Plc (Tel Aviv Branch) P.J. Juvekar - Citigroup Global Markets, Inc. John Roberts - UBS Securities LLC Michael Leith Piken - Cleveland Research Co. LLC Fai Lee - Odlum Brown Ltd. Sandy H. Klugman - Vertical Research Partners LLC

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the PotashCorp Fourth Quarter and Year-End 2016 Earnings Conference Call. At this time, all call-in participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. I would like to remind everyone that this conference call is being recorded on Thursday, January 26, 2017 at 1 o'clock PM Eastern. I will now turn the conference over to Denita Stann, Senior Vice President, Investor and Public Relations. Please go ahead.

Thank you, Joe. Good afternoon, everyone, and thanks for joining us. Welcome to our fourth quarter and year-end earnings call. In the room with us today we have Jochen Tilk, our President and CEO; Wayne Brownlee, our Executive Vice President and Chief Financial Officer; Stephen Dowdle, President of PCS Sales; Mark Fracchia, President of PCS Potash; and Raef Sully, President of PCS Nitrogen and Phosphate. I'd like to welcome all those who are listening in and remind people that we are live on our website. I would also like to remind everyone that today's call may include forward-looking statements. These statements are given as of the date of this call and involve risks and uncertainties. A number of factors and assumptions were applied in the formulation of these statements and actual results could differ materially. For additional information with respect to forward-looking statements, factors and assumptions, we direct you to our news release and our most recent Form 10-K. Also, today's news release, which is posted on our website, includes a reconciliation of certain non-IFRS financial measures to their most directly-comparable IFRS measures. I'll now turn the call over to Jochen for some comments, and then we'll go to questions.

Thank you, Denita. Good afternoon and thank you for joining our call. We appreciate the opportunity to discuss our performance and what we see ahead for our company. I will provide you an update on our merger with Agrium in my remarks so that today's Q&A session can focus largely on our preliminary results and market outlook. Let me first recap the potash environment 2016. During the first half of the year, we were challenged by deferred contract settlements, weak customer engagement and significant pressure on prices. In the second half, we saw market shifting to robust demand, consistent volume engagement and a recovery in prices. In this improved environment, Canpotex achieved record shipments in the final six months of the year. Now domestic sales volumes increased in response to a healthy fall application season. The strong second half pushed global shipments to nearly 60 million tons, slightly below the prior-year and the third highest total on record. We believe this improved engagement reflects strong affordability of potash at current levels and a desire to replenish soil nutrients following several highly productive years for global agriculture. In fact, we believe this is the first year in more than a decade where potash industry has had a drawdown in global inventory at both the producer and distributor levels. Despite this recent improvements, weaker prices for all three nutrients compared to 2015 was the primary contributor to our lower quarterly and full-year earnings of $0.07 per share and $0.40 per share. At the nutrient level, potash gross margin of $120 million for the quarter and $437 million for the year declined compared to 2015 as lower realized prices more than offset the benefit of optimizing production to our lowest cost mines. In nitrogen, lower global energy prices and increased supply resulted in…

Thank you. Your first question comes from Jonas Oxgaard with Bernstein. Please go ahead. Jonas Oxgaard - Sanford C. Bernstein & Co. LLC: Good morning. Can you guys talk a little bit more about the phosphate business and what's been happening with COGS and why you're concerned that you might not actually see earnings in 2017 here? And a follow-up to that, if you don't mind, how are you thinking about the strategic options for the business?

Good morning, Jonas. Thanks for your question. Just on COGS, so quarter-over-quarter it's really related to AROs, asset retirement obligations. So, we had an adjustment reversal last quarter related to that because of higher interest rates and that was about $10 a ton and then this quarter we had about $14 of ARO charges. And so that makes the difference of I think which is approximately $24, so that's a change quarter-over-quarter. In terms of, I think your question, the challenges, it is related to the business in fee and in super phosphoric acid which is a big part of our business in the fertilizer space and the industrial space. And in terms of strategic options, can't really say much about it, but the one comment I can make is, we had always stated in the evolution of our discussions with Agrium that discussion started in phosphate and started finding synergies and opportunities to work together and we're still hopeful that as we move along in the merger and eventually it gets consummated that there is an opportunity to really get these synergies in the phosphate area materializing. Jonas Oxgaard - Sanford C. Bernstein & Co. LLC: Okay. Thank you.

Thanks, Jonas.

The next question is from Ben Isaacson with Scotia Bank. Please go ahead.

This is Oliver Rowe on for Ben, thanks for taking my question. At the end of Q3, potash inventories at the producer level in North America were low, ahead of Rocanville and contract negotiations. And in China, port inventories are currently low year-over-year, but they're still quite high. Could you comment on your view of current producer and dealer inventory levels in both these regions, as well as the other main demand regions?

Yeah. Good afternoon, Ben (sic) [Oliver]. And as well thanks for your question. So, I'll start in China and then North America and I'll happily turn it over to Stephen who can even provide you with more depth. So, our estimate in China, as we said, is about 2.2 million at the port and last year it was approximately 3 million. So, that's obviously lower than the year before as one data point. The channel inventory is much harder determined, but just given the recent challenges, the uptick in the domestic price of, I think, of about 17%, we think that those levels are lower as well. North America produced inventories about 2.6 million, and we have really a somewhat lower inventory than last year. And also we think in North America, the channel inventory, what's in distribution, is extremely low. So when we combine that across the board, we think that both the producer inventory and the distributed inventories are lower than they were last year. Stephen, I don't know if you want to provide more color to that?

I would add that this is consistent with what we're seeing in every major potash market in India. For example, we believe that inventories at January 1, 2017 were approximately 730,000 tons versus 1 million tons a year ago. And we believe in Brazil that the start of the year that inventories have really been drawn down compared to a year ago, a year ago they were somewhere between 1.3 billion tons and 1.4 billion tons. And although we don't have official data yet, we believe that the January 1, 2017 starting inventory is somewhere between 700,000 tons and 800,000 tons. Brazil had an absolute very strong demand year for record NPKs and the impact of this was to drawdown potash inventories.

Thank you.

Thanks, Ben (sic) [Oliver].

The next question is from Vincent Andrews with Morgan Stanley. Please go ahead. Vincent S. Andrews - Morgan Stanley & Co. LLC: Thanks. I'm just trying to bridge last year shipments with what your guidance is for this year, and I haven't been able to get your slide deck down from the website. It's actually putting up the press release when you click on it, so I apologize if it's in there. But I'm just sort of seeing like the low end of your shipment guidance is essentially flat with your 2016 shipments, but it looks like your shipment range for the industry is probably up about 2 million tons. So, I'm just trying to understand the parameters of how you might get to the low end or the high end of your shipment guidance relative to what happens in terms of industry shipments?

Yeah, I think that's – Stephen, if you want to respond to that?

We're looking at 2017. We have a range of 61 million tons to 64 million tons. We don't really have the final data for 2016, but it could be around 60 million tons or just shy of that. So, as we naturally – when you're trying to foretell the future, there's a lot of uncertainty involved in that, but all the signs that we see make us very encouraged about the potential for demand in 2017. Inventories, we just talked about that around the world in major markets without exception are starting the year lower than a year ago, and we see a very different environment right now than we had a year ago. A year ago, as you recall, there was so much focus on when China is going to be get done and China contract and the rest of the world seem to be just standing back and not engaging the market. And right now, we're seeing exactly an opposite type of situation. We have engagement in these markets irrespective of what China may or may not do. So, it makes us as we go into – as we start the year and we see this engagement versus the lack of engagement a year ago, it makes us very encouraged that we will end up we think very close to the high end of our range.

And if I may add to Stephen's point, I just like to go back to what I said in my remarks at the beginning that there was a fundamental shift that we observed between the first half of last year and the second half, and that fundamental shift really occurred when engagement was there and we could see material moving very quickly out of distribution to our customers, and then to the farmers, which was very different at the beginning of the year when it was very sluggish. And that shift that went over into the beginning of this year as we said Canpotex is already committed for the first quarter and that means truly committed. We've seen in our winter-fill program it was sold out very quickly, and so we're very hopeful that momentum that really kicked in the second half of 2016 continues in 2017. Vincent S. Andrews - Morgan Stanley & Co. LLC: Thank you.

The next question is from Don Carson with Susquehanna Financial. Please go ahead.

Yes, question on potash pricing. Jochen, you mentioned that on nitrogen you're concerned about some of the domestic capacity that might start up and what that could do to pricing. Do you have a similar concern on potash when legacy starts up, even if that is delayed into 2018, what impact that may have on pricing? And I guess even earlier than that, what impact that may have on dealers' willingness to hold inventory as we exit the spring selling season?

Yes. Thanks for your question. And we certainly have it in mind and maybe as a qualifier on nitrogen, we do see that as a fairly conservative outlook that we have and hopefully if the momentum that started at the beginning if that does carry over beyond the planting season, then there might be some upside. In potash, we think that in 2017 the incremental capabilities really within Canpotex, it's essentially asset at Rocanville and then some at our partners, but it's 67 million tons what we see as the capability globally and that is up about 2 million tons from last year, 65 million tons and that 2 million tons in Canpotex. K+S really comes in 2018, but the amounts are in the hundreds of thousands of tons as we see them. And there are a couple of other adjustments. So in that period, we think it will be absorbed in the market, and with the stronger demand we are good. I mean really what we keep an eye on is when EuroChem comes into production which is post 2018 and that certainly the period what we watch for.

Thank you.

The next question is from Chris Parkinson with Credit Suisse. Please go ahead. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Thank you. Can you give us a little more detail on your longer-term strategy for the Trinidadian tons? Specifically, how you believe trade flows will evolve over the intermediate to long term, given the domestic supply in the U.S.? Your internal strategy weighing on the willingness to do volume contracts? And just generally, any update on your outlook for both gas procurement or pricing agreements with the government. Thank you.

Yeah. So, thanks for the question. You threw a few things out there and they are all very relevant. I'll pick on a few and my colleague, Raef Sully, runs the Trinidadian plants, he runs all of nitrogen and phosphate, but among them the Trinidadian and Tobagonian plants will – can get into more detail. So, on the strategic direction is, right now Trinidad is quite profitable because of the relatively low Tampa ammonia. As you know, our gas prices in Trinidad are indexed by that and so they're actually very competitive right now. That could change as Tampa ammonia increases and that might shift. So the second point for us is to secure gas supply in Trinidad and we've been experiencing curtailment for a number of years. In 2016, it's approximately 230,000 tons of gas curtailment. 2017, we see a slightly lower by 210,000 tons, but still very much in the range. So, we have had discussions with the government and we're trying to get some assurance that gas supply is guaranteed, and that is greatly dependent on the number of projects that are essentially developed in Trinidad. And there's some encouraging news. I don't want to qualify beyond that, but there's a number of projects that are now under construction and they should supply gas in conjunction with the discussions that we have with the government. Our objective is to renew our contract, obviously, at what we think fair and reasonable price terms. And then secondly be sure that we have gas supply beyond, so that we can run our plants efficiently. I think the final component of your question was what is your strategy in terms of the trade in the ammonia trade merchant ammonia, our view is that we're still importing ammonia to the United States, and there will be a net importer for a number of years. And at the same time, we're looking around of course to see whether we can secure other parts in the world where we can ship ammonia to compensate for any changes in the import numbers. And that's been a strategy that we've been applying for a while, looking around and talking to partners, and we're reasonably optimistic we can find other outlets. So, Raef do you want to add anything to the gas strategy?

Just a couple of small comments, minor comments, Jochen. Just the first that in the short term, as Jochen mentioned there are a number of small projects coming on that should take care of any decline in existing field. So, we see the short-term remaining pretty much the same as it is for curtailments. You will notice in the press that the Trinidadian government has recently signed an agreement with the Venezuelan government for the development of the Dragon field. That's something that should be positive in the medium-term. And then in the long-term that depends on where the government gets to with this negotiations with the producers like BP. Those negotiations should be resolved halfway through 2017, as should our discussions. So, halfway through 2017 we should have some clarity about the future.

Thanks. And Stephen, do you want to add anything to merchant ammonia, or...

As you said, what we expect that trading patterns for deepwater ammonia will certainly be evolving and changing to reflect the growth of capacity in the United States, and that's really a work in progress. It's a matter of buyers and sellers sitting down and contemplating where they want to go. One factor that's having a strong impact right now as people look forward, and that's the market, the tanker market for ammonia vessels, which looks like it's going to be in a long position here for the next several years. And in such a circumstance, that will have an influence on whether people want to sign up for long-term type of contracts or whether people will be looking to do more spot trade business.

Thanks, Stephen. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Thank you very much.

The next question is from Andrew Wong with RBC Capital Markets. Please go ahead.

Hi, good afternoon, thanks for taking my question. So, we have seen some steady decreases in potash production costs over the past couple of years. Some of that's curtailment-related and some of that's operational-related. So, with the Rocanville ramp-up, can we see that number go down further? And can you provide some of your expectation for cost per ton in 2017 and then beyond? Thanks.

Thanks, Andrew. Yes, so appreciate you point out the observation. We're around $70 a ton. And as we stated, the big contributor is Rocanville where we expect cost to be around $40 ton to $50 a ton. And for clarification, those are cash costs, so just to be clear on that. And in terms of direction, absolutely, we'd like to further optimize and improve AR operations and then the portfolio of how we run them. I can't give you a specific point other than what we said in general that they'd be around the $70 range and then drop slightly further. But directionally, I can tell you that we continue working on getting our cost down and of course with Rocanville we have an opportunity to roll that out.

Okay. Thanks.

Next question is from Steve Byrne with Bank of America. Please go ahead.

Hi. Is it cost-prohibitive to alter your phosphate production assets to divert production away from feed and super phosphoric acid and more into the fertilizer end markets, particularly if you could move that product more readily through the Agrium retail channel? And just one other option, is it a reasonable return to move rock all the way to Redwater?

Excellent question, very perceptive. So to your first point, we have taken some of those steps. We had not produced solids, MAP and DAP at White Springs when we closed down Suwannee River and went to Swift Creek. We just recently refurbished our MAP, DAP granular production at Suwannee River and we started making granular. So, we actually are using some of our super phos acid to make MAP and DAP and enter the market that way. To your second point, your second question, without getting into too much detail on that, what's possible, because that's really not fully resolved, but this is one of the opportunities that we look at from a point of synergies in the future. Whether that's shipping acid, shipping solids, replacing rock or something, those are all opportunities that are on the table. And if they technically work and if they provide the cost opportunities then they'll be certainly looked at.

Thank you.

Thanks.

The next question is from Mark Connelly with CLSA. Please go ahead.

Thanks, Jochen. PotashCorp has been bullish on the outlook for India potash volumes longer than you've been working for the company. But the actual application has dropped, the NPK ratio is gone in a rotten direction agronomically. So, where does your optimism that this year is going to be materially better coming from? Is that from what you're hearing on the ground or is it a view on the agronomics?

Yeah. It's a combination. And thank you, Mark. And your point is well taken. One can be a bit cynical about it, when you look at the number of years that people have been somewhat upbeat. But just to give you a couple of points, consumption has been strong for the Rabi planting season and there's increased acreage, lower retail prices, I think the weather conditions were a bit better, better moisture conditions. So, just some of those fundamentals are there. The subsidy rate has been maintained for the remainder of the fertilizer year. So, that's relatively good news. And even though no one really knows what the demonetization policy will actually do, but maybe the credit part with it, from distributors and government agencies will facilitate that. And then we do see that there is some demand growth in India based on those economics. So, while that might be picking a pieces of evidence, but collectively we think it should make for a better year in India.

All right. That's very fair. Thank you for your help.

Thanks, Mark. Appreciate that.

The next question is from Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson - Goldman Sachs & Co.: Yes thanks, good afternoon, everyone. Maybe another question on phosphates. I wanted to try dig in a little bit more on the cautiousness in your market outlook and really understand the drivers. Is it really just that feed phosphate dynamic in the U.S. and more competition from offshore? Is it concern about Indian demand and the demonetization? It is the capacity in Morocco and in India? I'm just trying – production out of China? I'm trying to reconcile really what's driving it, especially given the undertone in the market more recently has been marginally more positive?

Yes. Thanks for diving into that a little bit more. And you listed a couple of points, and all of the above have contributing factors. The introductory point I'd like to make is just to explain a bit how what our phosphate market is. We're mostly in the domestic market in the U.S., and we're heavy in the industrial market. We make purified acids that go in different products. We are heavily in the super phosphoric acid, low [max spot], of which 60% traditionally has gone in our feed production to our feed plants and 40% goes into liquid fertilizer. Most of them are transforming to poly acids and then they use them to start up fertilizers. And so it's a somewhat different market than the dry market. However, they are obviously connected. And one of the connections there is, if the super phosphoric acid, the liquid fertilizer market is too high or the premiums are too high, then farmers can switch. They can switch to granular products, they can actually melt them down into a solution and then apply the solution instead. So there is a dynamic. And what really happened is that the market for liquid fertilizer in the U.S. has come off and has come off substantially from where it was in 2015 and 2016. The feed market is much more competitive today because we are seeing significant imports and most of these imports are coming in from Eastern Europe, Russia. So, the combination of somewhat deteriorated liquid fertilizer market and the competition in feed business, that's what has given us an impact. Stephen, I don't want – you said no, nothing to add to that. So, I hope that answers your question. And maybe the final point to make is, can we shift? And the question came up at the beginning is, we can shift somewhat to MAP and DAP, but we're still obviously very long in the liquid fertilizer market. Adam Samuelson - Goldman Sachs & Co.: It's very helpful. Thank you.

Thanks.

The next question is from Joel Jackson with BMO Capital Markets. Please go ahead.

Hi, good afternoon. Jochen, as you ramp up Rocanville later this half year, should we assume that the plan will be to run Rocanville full-out going forward all the time? So, maybe that's a 5.5 million ton-plus capability to operate. And so, you run Rocanville full-out and then you'll moderate production at the other mines based on demand? You sort of hinted at some of that, but is that the goal from day one to run Rocanville full-out past the 14-day proving run? Thanks.

Yeah. The goal is to run Rocanville at the highest possible level where it makes sense. So, obviously we'd like to take advantage of Mark, our President of Potash can give you a bit more detail on what our operating plan will be going forward.

Sure. Well, thanks, Joel. Basically, as Jochen already indicated earlier, our operating cost at Rocanville are going to be significantly lower with the ramp up in production. We're going to be in that $45 ton to $50 ton range as far as cash costs. So certainly it's to our advantage to operate Rocanville at its available rate as much as possible. And that really is our plan through 2016. Now keeping in mind that 2016 is still a ramp up year for us in the sense that – oh, sorry 2017 is a ramp up year yet in the sense that our plan is to ramp up in a manner in the first quarter that will get us to that operating – the full operating range by the second quarter and thereafter. Now in terms of the other facilities, we are taking Allan down as we announced some time ago already for a 12 week period, because we've got some shaft maintenance that we're doing in our production shaft and that has been planned for a period of time and we're really waiting for an opportunity time for when Rocanville is ramping up to be able to take advantage of that. And as far as Cory, again, you're already aware the changes we've made there to back off on production through 2017 produce a white-only plant. Those plans are proceeding on track. So, we're pretty happy with the progress there and we're in line to get to where we need to be with white-only production this year. And the rest, we'll really watch the market and see how the market unfolds, and make any other adjustments accordingly.

Yeah. And just to confirm, the cash cost expectation. We look at – this is Rocanville and these are cash costs. 2016, it was about $73 a ton and we expect that to be around $50 a ton in 2017 for this year.

Thank you.

Thanks for your question.

The next question is from Steve Hansen with Raymond James. Please go ahead.

Yeah. Thanks for answering the question. I'm just trying to reconcile some of the commentary around the K+S startup. I think you referenced to a 200,000 tons of incremental capability in 2018 but they still seem to be suggesting that they'll be ramping up mid-year and into the back half of this year, towards full rate. So, is there a difference of opinion on that? Or is there some on-the-ground intelligence that you have that would suggest that? Or experience in ramping up these lines – I'm just trying to get some color around that commentary. Thanks.

Yeah. This is what we have assumed, and our assumptions are mostly based on – they are entirely based on public knowledge what K+S has disclosed, and then what we assume certain ramp up patterns then we apply them. And what we assumed in 2017, this year, K+S produces about 400,000 tons and that would go to somewhat double next year, and then beyond that to maybe 1.5 million and that's pretty consistent with what they said and that's an assumption how we look at that. Some of that is offset in North America by Intrepid. Intrepid produced approximately 600,000 tons, and they will be at a lower level because they have gone to Trio, all Trio product, so that's about 300,000 tons. So it's a bit of a wash in 2017. Between those two and that's why I said that most of the incremental capacity comes from Canpotex producers in North America.

Understood. Pretty, helpful. Thanks.

The next question is from Yonah Weisz with HSBC. Please go ahead.

Hi, there, good afternoon. I had a question on I guess, potash, global potash competition. A Russian competitor of yours put out full-year 2016 output figures, and it seems if you make a few basic assumptions, that their exports may be fell perhaps 8%, 7% to 8%. Whereas it seems from your figures that Canpotex exports could have declined this year almost double that. So I'm wondering if you could give a bit of color on how market share has shifted in 2016 and whether Canpotex looks to gain back any lost market share in 2017?

Yeah. I'm not sure if I – we're looking each other, we can't reconcile. I think particularly the second point you made, that Canpotex share, market share fell by double, so I'm not sure if we can follow that. Generally, if you look at it on a shorter period of time, there are ups and downs, ebbs and flows. So we often see that momentarily and you really have to look at it on an annual basis to do that. Stephen has got I think some.

Yeah. Just to be clear, Canpotex total sales were actually lower in 2016 than they were in 2015, and that was related to the delays that occurred during the first half of 2016. Now in the second half, it was a very different story as the market engaged globally and Canpotex had a very strong second half. In fact, I believe it was a record second half for Canpotex. So that's part of the ebb and flow that Jochen was referring to. But there was no, I would say significant change when you look at market shares, globally of Canpotex or Uralkali or Belaruskali in terms of that shifting. That was nothing of really any significance that happened in 2016.

Thank you.

The next question is from P.J. Juvekar with Citi. Please go ahead.

Yes. Hi, good afternoon. Question on urea. China coal prices spiked last year, dragging urea prices up. But recently, coal prices have come down, so where do you see urea prices in China going? And then I have a second clarification question on your comments on India. You talked about currency demonetization having an impact, do you think that impact is spread equally across different nutrients? Or maybe something like nitrogen would have more of an impact? Thank you.

Yeah. Thanks for your questions. On urea in China, Stephen, do you want to?

Well, what we've seen, we are seeing a change in China. And China – when you look at the urea market globally, it's probably the biggest question mark, because we saw a significant decrease in China urea exports, and they were down almost 5 million tons year-over-year. And really that question mark is, is that going to continue, are they going to continue to fall in 2017? And the other question is, what is actually going to happen to the domestic urea industry and producers in China? Are they going to continue to shut down the older and inefficient plants that are energy hogs and environmental pigs? And if that happens, then this whole urea market could take a little bit different turn as we go through 2017. Right now, we're seeing those reduction in exports continue because seasonally it's a very active time in China right now. We've seen domestic urea prices go up in China, as right now this is a lunar new year holiday and people are already projecting that as they come back to work and as the spring planting season starts, they really want to have fertilizer in place, and this is impacting not only urea but also phosphates and also potash. We've seen domestic prices for all these nutrients go up. So, it's a big unknown, what's happening in China, but if the trends that we saw here in 2016 continue into 2017, our view on nitrogen maybe – it may be conservative.

Thanks. And one other compelling figure, obviously, is when you look at the operating rates in China right now they are around just over 50% historically around 75%, so that kind of says it all, if China continues to run at those rates, it will be very different than if it were to run at historic rates. To your second question, I just want to qualify that my point was really meant to refer more to offsetting the demonetization policy with credit, which could be somewhat positive or neutral perhaps. I think that's across the board. But I think it was more to make the point that we don't necessarily think that the demonetization would have a negative impact on the outlook for potash, and I think that would be true for other nutrients as well.

Thank you.

Thank you.

The next question is from John Roberts with UBS. Please go ahead.

Thank you. Any new developments on the potential for a transaction with SQM? I think you said in the past that you would welcome an opportunity to increase your fertilizer participation and that you're not interested in the lithium assets there?

Yeah. I think we consistently said we can go either way. And if you look at where lithium is and it is not a strategic focus of ours, we are a nutrient company, we could be – so we could likewise contemplate increasing our stake because we believe that SQM is a great company. I can't give you any further update beyond that. The options are open and we are exploring the options, and of course, we have to see how things evolve at SQM in time.

Thank you.

Thanks.

The next question is from Michael Piken with Cleveland Research. Please go ahead.

Yeah. Hi, I just wanted to reconcile your potash volume guidance with your global guidance for 61 tons million to 64 million tons. It seems like it's a market that's going to grow from a little under 60 million tons to 61 million tons to 64 million tons. And everybody else is running pretty close to full capacity. Is there room to the upside there? Or how much are you planning to produce maybe is another way to ask?

Yeah. We have production capability of just over 10 million tons, so that's what we have and that's incremental capability of somewhere around 1 million tons and – or 10% maybe put that in that context. And what that's meant to say is that, if there was upside for all kinds of reasons, increased demand or challenges with another producer, then we could respond to that with that incremental 10% capacity that we have ready to go.

The next question is from Fai Lee with Odlumo Brown. Please go ahead.

Thank you. Jochen, just regarding the outlook for your phosphate segment, is a future recovery in the feed and industrial markets simply hinged to what happens with the phosphate fertilizer market, or do you see any other factors that could cause a faster or slower recovery?

Yeah. Well, Stephen, why don't you comment on it?

Sure. I mean, there's certainly – yes, there definitely is a relationship between the fertilizer markets and what will happen, I think, in feed and also in industrial – in the industrialized phosphates. Their P205 is a molecule and producers can shift and chase where they're going to get better netbacks, better gross margins and I think this is part of the pressure that we've seen recently in the feed markets is as there was weakness, there was more weakness in the dry fertilizer markets, therefore, for producers that have the capability to shift some of that production into feed products, they made that decision which created a bit of a supply and demand problem, which pushed prices lower. Were that to reverse, where a drive phosphate products to start outperforming, feed products, you would see that reversal and then feed prices would recover in tandem with recovering dry fertilizer prices.

Okay.

Joe, we'll have time for one more question at this point. Thanks.

Thank you. The next question is from Sandy Klugman with Vertical Research Partners. Please go ahead.

Thank you. I'm out of potash-specific questions. I was hoping I could ask one on the merger. One are the key questions around potash industry consolidation has been whether the FTC would determine that potash was a global commodity. I mean, I was wondering if you had any additional insight into that at this point in time.

No. I really don't. So, I can't give you any more insight on where the FTC stands on that or other issues at this point. Thanks.

Okay. That's fair. Thank you.

Thank you, everyone. Thank you. We appreciate your time today. And if you have any further questions, make sure you give us a call at the office. Have a great day.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.