LSB Industries Inc (LXU) 2024 Q3 法說會逐字稿

Greetings, and welcome to the LSB Industries third quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Fred Buonocore, Vice President of Investor Relations. Please go ahead.

您好，歡迎參加 LSB Industries 2024 年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹投資者關係副總裁 Fred Buonocore。請繼續。

Good morning, everyone. Joining me today are Mark Behrman, our Chairman and Chief Executive Officer; Cheryl Maguire, our Chief Financial Officer; and Damien Renwick, our Chief Commercial Officer. Please note that today's call includes forward-looking statements. These statements are based on the company's current intent, expectations, and projections. They are not guarantees of future performance, and a variety of factors could cause the actual results to differ materially.

大家早安。今天與我一起出席的還有我們的董事長兼執行長馬克貝爾曼 (Mark Behrman)；謝麗爾·馬奎爾，我們的財務長；以及我們的首席商務長 Damien Renwick。請注意，今天的電話會議包含前瞻性陳述。這些陳述是基於公司目前的意圖、期望和預測。它們並不是對未來業績的保證，多種因素可能導致實際結果有重大差異。

On the call, we will reference non-GAAP results. Please see the press release in the Investors section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results.

在電話會議上，我們將參考非 GAAP 業績。請參閱我們網站 lsbindustries.com 投資者部分的新聞稿，以了解有關前瞻性陳述以及非 GAAP 業績與 GAAP 業績調節的更多資訊。

As a reminder, we have a stockholder rights plan to protect certain tax attributes. Please see the Investors section of our website at LSB Industries for further important details.

提醒一下，我們有一個股東權利計畫來保護某些稅收屬性。請參閱 LSB Industries 網站的投資者部分，以了解更多重要詳情。

At this time, I'd like to go ahead and turn the call over to Mark.

這時，我想把電話轉給馬克。

Thank you, Fred. Turning to page 4 of our presentation. We had an excellent safety performance in the third quarter. During the third quarter, we completed a major turnaround on our prior facility, and kudos to the team as it was performed injury-free. Protect what matters is our most important corporate value because what matters most to us is keeping our team members safe.

謝謝你，弗雷德。翻到我們簡報的第 4 頁。第三季我們的安全表現非常出色。在第三季度，我們對先前的設施進行了重大改造，我們的團隊沒有受傷，因此受到讚揚。保護重要的事情是我們最重要的企業價值，因為對我們來說最重要的是確保團隊成員的安全。

In terms of our third-quarter financial performance, our adjusted EBITDA improved significantly year-over-year despite performing a turnaround this year versus none in last year's third quarter. During the third quarter, we continued to invest in our Pryor facility. We completed a major turnaround that included many improvements to our plants. We expect that the work that was performed will lead to greater reliability and increased production volume, and we are already seeing the benefits.

就我們第三季的財務表現而言，儘管今年第三季我們的業績出現了好轉，但調整後的 EBITDA 仍比去年同期顯著改善。第三季度，我們繼續投資普賴爾工廠。我們完成了重大轉變，其中包括對我們工廠的許多改進。我們預計所做的工作將帶來更高的可靠性和增加的產量，而且我們已經看到了好處。

We continually seek to expand the production of our current manufacturing footprint. To that point, during Pryor's turnaround, we expanded its urea plant. This expansion is expected to allow us to produce an incremental 75,000 tons per year of UAN, an approximate 20% annual increase. We have already seen that volume ramp up to those levels during this fourth quarter.

我們不斷尋求擴大我們目前製造足跡的生產。至此，在普賴爾扭虧為盈期間，我們擴建了其尿素工廠。此次擴建預計將使我們的 UAN 產量每年增加 75,000 噸，年增長率約為 20%。我們已經看到第四季度的銷量上升到了這些水平。

Additionally, during the third quarter, to support our growing industrial business, we completed the construction of an additional 5,000 tons of nitric acid storage at our El Dorado facility. This will now provide us with the ability to better optimize our sales mix and improve our margins. Lastly, we continue to make progress with our two energy transition projects, which I'll discuss later in the call.

此外，在第三季度，為了支持我們不斷成長的工業業務，我們在埃爾多拉多工廠完成了額外 5,000 噸硝酸儲存的建設。現在，這將使我們能夠更好地優化我們的銷售組合併提高我們的利潤率。最後，我們的兩個能源轉型項目繼續取得進展，我將在稍後的電話會議中討論這些項目。

I'll turn the call over to Damien, who will review current market dynamics and pricing trends. Damien?

我會將電話轉給達米安，他將審查當前的市場動態和定價趨勢。達米安？

Thanks, Mark. Good morning, everyone. Page 5 summarizes some key dynamics in our industrial end markets. More than one-third of our business comes from the North American operations of industrial customers. Our industrial business is built on contracted volumes and allows us to partially mitigate the more volatile agricultural business. We also like the consistently attractive margins of the industrial business that result from the cost-plus nature of our customer agreements.

謝謝，馬克。大家早安。第 5 頁總結了我們工業終端市場的一些關鍵動態。我們三分之一以上的業務來自工業客戶的北美業務。我們的工業業務建立在合約數量的基礎上，使我們能夠部分緩解波動性較大的農業業務。我們也喜歡工業業務持續具有吸引力的利潤，這是由於我們的客戶協議的成本加成性質所帶來的。

Going forward, a core part of our commercial strategy is to continue to grow the portion of industrial sales in our overall customer portfolio. We believe this will create a more stable and predictable earnings stream. Demand remained consistent across our industrial customers through the quarter. We are pleased with the continued stability of our North American end markets when compared with some of the uncertainty we've seen in Asian and European industrial markets.

展望未來，我們商業策略的核心部分是繼續增加工業銷售在我們整體客戶組合中的比例。我們相信這將創造更穩定和可預測的收益流。本季我們的工業客戶的需求保持穩定。與我們在亞洲和歐洲工業市場看到的一些不確定性相比，我們對北美終端市場的持續穩定感到高興。

With the continued resilience of the US economy and consumer spending, we expect these attractive conditions to persist into 2025. One of our largest industrial products by sales volume is nitric acid, a key chemical input for polyurethane production. We track homebuilding and auto manufacturing trends because these two industries are major consumers of polyurethane.

隨著美國經濟和消費者支出的持續彈性，我們預計這些有吸引力的條件將持續到2025 年。 。我們追蹤住宅建築和汽車製造趨勢，因為這兩個行業是聚氨酯的主要消費者。

As you can see from the top two charts on page 5, economic indicators for both markets also continue to be relatively stable. We believe that the recent easing of interest rates and expectations for further interest rate cuts could stimulate demand in both markets. That would lead to production rate increases and greater demand for nitric acid in 2025. We also continue to monitor new sources of nitric acid demand from increased semiconductor manufacturing and munitions production in the US. Overall, we find the outlook for nitric acid demand very encouraging.

從第 5 頁的前兩張圖表可以看出，兩個市場的經濟指標也持續相對穩定。我們認為，近期的利率寬鬆以及進一步降息的預期可能會刺激兩個市場的需求。這將導致 2025 年生產率提高和對硝酸的需求增加。整體而言，我們發現硝酸需求前景非常令人鼓舞。

Our other major product for industrial markets is ammonium nitrate, or AN, which is used in the mining of metals such as copper. As the chart on the bottom right shows, the value of copper production has increased significantly over the past year, driven by strong copper prices. Copper prices currently sit above multiyear average levels, driven in part by demand for electric vehicle production and the build-out of technology infrastructure.

我們面向工業市場的其他主要產品是硝酸銨（AN），用於銅等金屬的開採。如右下圖所示，在銅價強勁的推動下，過去一年銅產量大幅增加。目前銅價高於多年平均水平，部分原因是電動車生產需求和技術基礎設施建設。

AN is also used for the production of aggregates, which is strongly correlated to new housing starts, given the infrastructure required to support housing developments. We believe declining interest rates could result in higher new housing starts and increased demand for aggregates.

AN 也用於生產骨料，考慮到支持住房開發所需的基礎設施，骨料的生產與新房開工密切相關。我們認為，利率下降可能會導致新屋開工量增加和整體需求增加。

On page 6 of our presentation, you will find a summary of current nitrogen market dynamics. The Tampa ammonia benchmark price has increased for four consecutive months due to a combination of factors, including global supply constraints resulting from increased natural gas curtailments in Trinidad, unplanned downtime and extended turnarounds at various international production facilities, and disruptions to the transport of ammonia through the Suez Canal.

在我們簡報的第 6 頁上，您將找到當前氮肥市場動態的摘要。由於多種因素的綜合作用，坦帕氨基準價格連續四個月上漲，包括特立尼達天然氣削減增加導致的全球供應限制、各種國際生產設施的計劃外停機和周轉時間延長以及氨運輸中斷。

Additionally, ongoing delays in the commissioning of new domestic production capacity and new Russian export capabilities has provided support to ammonia prices. We expect this to continue through the fourth quarter. UAN prices have recently firmed following zurea market fundamentals, driven by production curtailments and healthy demand from India. We are also seeing price support from a favorable trade balance where US exports remain high, and imports low compared to recent history.

此外，國內新產能和俄羅斯新出口能力的投產持續延遲也為氨價格提供了支撐。我們預計這種情況將持續到第四季。在印度減產和健康需求的推動下，UAN 價格最近跟隨蘇雷亞市場基本面走強。我們也看到了有利的貿易平衡對價格的支撐，與近期歷史相比，美國出口保持高位，進口較低。

Buying interest has been steady, but overall, relatively subdued as fertilizer retailers have taken a cautious approach with softening corn prices. However, as we move towards the spring 2025 planting season, we believe that this cautious approach will likely lead to some pent-up demand for UAN as retailers work to position themselves to cover all in-season demand. This could support pricing during the first half of next year.

購買興趣一直穩定，但總體而言，由於化肥零售商對玉米價格疲軟採取謹慎態度，購買興趣相對較低。然而，隨著 2025 年春季種植季節的臨近，我們認為這種謹慎的做法可能會導致對 UAN 的一些被壓抑的需求，因為零售商努力滿足所有當季需求。這可能會支持明年上半年的定價。

With respect to natural gas feedstock costs, the middle chart shows the gas price trend for the European TTF relative to the price for US Henry Hub. Over the past six-weeks, European gas prices have risen to levels not seen since late 2023 due largely to the geopolitical instability in the Middle East.

關於天然氣原料成本，中間的圖表顯示了歐洲 TTF 相對於美國亨利中心價格的天然氣價格趨勢。過去六週，歐洲天然氣價格已升至 2023 年底以來的最高水平，這主要是由於中東地緣政治不穩定。

This appears to be another factor supporting ammonia prices at current levels. While industry forecasts suggest an easing of the TTF during the first half of 2025, US natural gas prices are expected to remain a competitive advantage for domestic ammonia producers for the foreseeable future.

這似乎是支撐目前氨價水準的另一個因素。儘管產業預測顯示 TTF 將在 2025 年上半年放鬆，但在可預見的未來，美國天然氣價格預計仍將是國內合成氨生產商的競爭優勢。

On page 7, we show pricing trends and forecasts for corn and other grain prices, which drive our agricultural business. From late August, US corn prices recently showed some strength on revisions of the USDA's updated grounds outlook, which calls for smaller supplies, larger exports and reduced ending stocks relative to their earlier estimates.

在第 7 頁，我們顯示了玉米和其他穀物價格的定價趨勢和預測，這推動了我們的農業業務。自 8 月下旬以來，美國玉米價格最近因美國農業部更新的前景展望的修正而顯示出一定的走強，該前景展望要求供應量減少，出口量增加，並相對於先前的估計減少期末庫存。

While 2025 pricing levels will be determined in part by the outcome of the current harvest, we expect to see corn prices at levels that should incentivize farmers to apply a healthy level of nitrogen fertilizer. Interest on farm loans is also a meaningful component of many farmers' cost structure and declining interest rates should have a positive impact on the demand for fertilizers. Corn futures currently sit around $4.40 per bushel for December 2025, suggesting some strengthening of pricing over the first half of next year.

雖然 2025 年的價格水平將部分取決於目前收成的結果，但我們預計玉米價格的水平將激勵農民施用健康水平的氮肥。農業貸款利息也是許多農民成本結構的重要組成部分，利率下降應對化肥需求產生正面影響。 2025 年 12 月玉米期貨目前價格約為每蒲式耳 4.40 美元，顯示明年上半年定價將有所走強。

Now I'll turn the call over to Cheryl to discuss our third quarter financial results and our outlook. Cheryl?

現在我將把電話轉給謝麗爾，討論我們第三季的財務表現和前景。謝麗爾？

Thanks, Damien, and good morning. On page 8, you'll see a summary of our third quarter 2024 financial results. We generated adjusted EBITDA of $17 million. This is a material improvement over last year despite significant planned turnaround maintenance at our prior location.

謝謝，達米安，早安。在第 8 頁，您將看到我們 2024 年第三季財務業績的摘要。我們的調整後 EBITDA 為 1700 萬美元。儘管我們先前的地點計劃進行大量週轉維護，但與去年相比，這還是一個重大改進。

As a reminder, there were no planned turnarounds in 2023. Our GAAP loss per share for the third quarter was $0.35. Keep in mind, this included the impact of approximately $16 million of turnaround expenses and approximately $6 million of non-cash charges for older assets taken out of service or disposed off during the period.

提醒一下，2023 年沒有計劃扭虧為盈。請記住，這包括約 1600 萬美元的周轉費用以及在此期間停止使用或處置的舊資產的約 600 萬美元非現金費用的影響。

Page 9 bridges our third quarter 2023 adjusted EBITDA of $9 million to our third quarter 2024 adjusted EBITDA of $17 million. Stronger selling prices, particularly for ammonia, contributed to the year-over-year change in EBITDA. Additionally, we benefited from lower natural gas costs during the period. As expected, sales volumes of our products decreased in the third quarter of 2024 as compared to the same quarter of 2023 as a result of the turnaround at our prior facility.

第 9 頁將我們 2023 年第三季調整後 EBITDA 的 900 萬美元與 2024 年第三季調整後 EBITDA 的 1,700 萬美元連結起來。較高的銷售價格，尤其是氨的銷售價格，推動了 EBITDA 的同比變化。此外，我們也受惠於在此期間天然氣成本的下降。正如預期的那樣，由於我們之前工廠的檢修，我們的產品銷售在 2024 年第三季比 2023 年同期有所下降。

We were able to partially offset the impact of the volume decrease from the prior turnaround with higher AN volume out of our El Dorado facility. The increased AN volume is a direct result of the operational improvement initiatives we have been making at that facility.

我們能夠透過埃爾多拉多工廠更高的 AN 產量來部分抵消先前週轉帶來的銷售下降的影響。 AN 數量的增加是我們在該工廠採取的營運改善措施的直接結果。

Page 10 provides a summary of our key balance sheet and cash flow metrics. As a reminder, over the 12 months ended September 30, 2024, we brought back approximately $97 million in principal amount of our senior secured notes and approximately 2.7 million shares of our stock. Additionally, we continue to deploy capital to improve the reliability and safety of our facilities. Even with these activities, cash remains healthy at approximately $200 million with net leverage remaining at approximately 2.5 times.

第 10 頁總結了我們的主要資產負債表和現金流量指標。謹此提醒，在截至 2024 年 9 月 30 日的 12 個月中，我們收回了約 9,700 萬美元的優先擔保票據本金和約 270 萬股股票。此外，我們繼續部署資金來提高我們設施的可靠性和安全性。即使進行這些活動，現金仍維持在約 2 億美元的健康水平，淨槓桿仍維持在約 2.5 倍。

Looking to the fourth quarter of 2024, Tampa ammonia has averaged $560 per metric ton quarter-to-date, and NOLA UAN is currently around $230 per ton. With continued tighter inventories, ongoing global supply constraints, disruptions and geopolitical concerns, pricing should remain solid through the remainder of the year.

展望 2024 年第四季度，坦帕合成氨季度至今平均價格為每噸 560 美元，NOLA UAN 目前約為每噸 230 美元。由於庫存持續緊張、全球供應持續受限、供應中斷和地緣政治擔憂，今年剩餘時間定價應保持穩定。

Natural gas costs remain well below last year's pricing, averaging approximately $2.60 per MMBtu quarter-to-date. We expect this trend to continue through the balance of the year, benefiting our fourth quarter profitability. Our fourth quarter results will include the impact of a planned 35-day turnaround at our Cherokee facility. We estimate that the expenses associated with this turnaround will be approximately $15 million.

天然氣成本仍遠低於去年的定價，本季迄今平均約為每 MMBtu 2.60 美元。我們預計這一趨勢將持續到今年剩餘時間，從而有利於我們第四季度的獲利能力。我們第四季度的業績將包括切羅基工廠計劃的 35 天週轉的影響。我們估計與此轉變相關的費用約為 1500 萬美元。

Despite the planned maintenance event at our Cherokee facility, we expect a solid year-over-year increase in sales volumes of UAN as a result of the urea expansion completed at our Pryor facility in the third quarter. We also expect to have a year-over-year increase in AN and nitric acid sales, reflecting the operational improvements we've made to our downstream plants at El Dorado.

儘管我們的切羅基工廠計劃進行維護活動，但由於第三季度普賴爾工廠完成尿素擴建，我們預計 UAN 銷量將同比穩步增長。我們也預計 AN 和硝酸的銷售額將比去年同期成長，這反映出我們對埃爾多拉多下游工廠的營運改善。

As a result, we expect our fourth quarter EBITDA after adjustments for turnaround expenses to be significantly above our fourth quarter of 2023 despite lost production during planned maintenance activities at our Cherokee location in November.

因此，儘管 11 月切羅基工廠的計畫維護活動造成了生產損失，但我們預計在調整週轉費用後第四季的 EBITDA 將顯著高於 2023 年第四季。

And now I'll turn it back over to Mark.

現在我會把它轉回給馬克。

Thank you, Cheryl. Page 11 pertains to our low-carbon ammonia projects. Our El Dorado CCS project remains on track for us to commence production of low-carbon ammonia during 2026, pending the approval of the Class 6 permit application. The permit to construct will allow us to begin drilling two injection wells on our site in El Dorado. This permit is the critical path item for our project.

謝謝你，謝麗爾。第 11 頁涉及我們的低碳氨計畫。我們的埃爾多拉多 CCS 專案仍按計劃在 2026 年開始生產低碳氨，等待 6 類許可證申請的批准。施工許可證將使我們能夠開始在埃爾多拉多的工地上鑽兩個注入井。該許可證是我們專案的關鍵路徑專案。

Earlier this year, we announced our first offtake customer for low-carbon ammonium nitrate solution that we'll produce at our El Dorado facility. We are also in discussions with other potential customers for offtake agreements for low-carbon products. With respect to our Houston Ship Channel project, as a reminder, it is a world-scale ammonia plant that will produce approximately 1.1 million metric tons of low-carbon ammonia.

今年早些時候，我們宣布了第一個低碳硝酸銨溶液的承購客戶，該溶液將在我們的埃爾多拉多工廠生產。我們也正在與其他潛在客戶討論低碳產品的承購協議。關於我們的休士頓航道項目，需要提醒的是，這是一個世界規模的合成氨廠，將生產約 110 萬噸低碳氨。

We have completed our pre-FEED and are currently in the process of reviewing the results of the study. Our next step will be a full FEED study, which we expect to begin during the first quarter of 2025 and take about 12 months to complete. Upon completion of the FEED study, we would seek FID, which we are currently targeting for some point in the first half of 2026.

我們已經完成了預 FEED，目前正在審查研究結果。我們的下一步將是全面的 FEED 研究，預計於 2025 年第一季開始，大約需要 12 個月才能完成。 FEED 研究完成後，我們將尋求 FID，目前我們的目標是在 2026 年上半年的某個時間點。

Given the significant cost of building a new world-scale low-carbon ammonia facility, offtake agreements with customers are the key to many of the announced projects moving forward. As I've mentioned previously, our ability to secure long-term offtake agreements for the majority of the anticipated ammonia production is critical for us to greenlight FID on this project.

鑑於建造新的世界級低碳氨工廠的成本高昂，與客戶簽訂的承購協議是許多已宣布項目向前推進的關鍵。正如我之前提到的，我們能否獲得大部分預期氨產量的長期承購協議對於我們批准該專案的最終投資決定至關重要。

To that point, an encouraging development for customer demand is Europe's stance on low-carbon ammonia versus no-carbon ammonia. Europe is now much more open to reducing their carbon emissions through the use of low-carbon ammonia. We are now seeing various types of industrial manufacturers taking an interest in low-carbon ammonia due to the impending enactment of the EU's Carbon Border Adjustment Mechanism, or CBAM.

就這一點而言，客戶需求的一個令人鼓舞的發展是歐洲對低碳氨與無碳氨的立場。歐洲現在對透過使用低碳氨來減少碳排放持更加開放的態度。由於歐盟碳邊界調整機制（CBAM）即將頒布，我們現在看到各類工業製造商對低碳氨產生了興趣。

In addition to power generation and industrial applications for ammonia use, we've been pleased at the pace at which low-carbon ammonia has been emerging as a potential marine fuel. We are collaborating with Amogy, a New York-based technology company on the development of ammonia as a marine fuel. In September, Amogy successfully tested a tugboat retrofitted with an engine powered by ammonia.

除了氨的發電和工業應用之外，我們對低碳氨作為潛在船用燃料的發展速度感到高興。我們正在與總部位於紐約的科技公司 Amogy 合作開發氨作為船用燃料。 9月，艾莫吉成功測試了一艘改裝氨動力引擎的拖船。

Additionally, in August, EXMAR, a Belgian shipping company, began building the first of six midsized gas carriers that will be powered by dual-fuel ammonia and LPG engines.

此外，8 月，比利時航運公司 EXMAR 開始建造六艘中型天然氣運輸船中的第一艘，該船將由雙燃料氨和液化石油氣發動機提供動力。

Finally, Mitsui O.S.K. Lines participated in a successful ammonia ship-to-ship transfer led by the Global Center for Marine Decarbonization. The trial was conducted to simulate bunker operations at the Port of Dampier in Australia, which is being evaluated as a potential major ammonia bunkering hub.

最後，商船三井Lines 參與了由全球海洋脫碳中心領導的成功的氨船對船轉運。該試驗是為了模擬澳洲丹皮爾港的加註操作，該港正在被評估為潛在的主要氨加註中心。

Collectively, these developments are very encouraging for the potential of ammonia as the preferred low-carbon fuel for the massive global shipping industry. These many activities are extremely encouraging that new uses and demand for ammonia will have significant growth over time. We intend to participate in that growth.

總的來說，這些發展對於氨作為全球大型航運業首選低碳燃料的潛力來說是非常令人鼓舞的。這些活動非常令人鼓舞，氨的新用途和需求將隨著時間的推移而顯著增長。我們打算參與這種增長。

We are increasingly optimistic about our prospects for generating near-term and long-term growth. We expect the progress we are making on increasing the production and sales volumes from our core manufacturing facilities to accrue to our profitability and cash flow in a meaningful way over the next 24 months.

我們對近期和長期成長的前景越來越樂觀。我們預計，我們在增加核心製造設施的產量和銷售方面所取得的進展，將在未來 24 個月內以有意義的方式增加我們的獲利能力和現金流。

At the same time, our low-carbon initiatives represent incremental profit beginning in 2026 as well as potential transformative growth over the longer term. Both prongs of our growth strategy prioritize preservation of our balance sheet strength and our ultimate goal of delivering strong returns to our shareholders.

同時，我們的低碳舉措代表著從 2026 年開始的增量利潤以及長期潛在的變革性成長。我們成長策略的兩個面向都優先考慮維持我們的資產負債表實力和為股東帶來豐厚回報的最終目標。

Before we open it up for questions, I'd like to mention that we will be participating in person at the Morgan Stanley Global Chemicals Ag and Packaging Conference on November 12 and virtually in the New York Stock Exchange Industrial Day on November 19 and the Granite Research Management Conference series on December 11 and 12. We look forward to speaking with some of you at those events.

在我們開始提問之前，我想提一下，我們將親自參加11 月12 日舉行的摩根士丹利全球化學品、農業和包裝會議，以及11 月19 日舉行的紐約證券交易所工業日和G ranite 虛擬會議。

This concludes our prepared remarks, and we will now be happy to take your questions. Thank you.

我們準備好的演講到此結束，現在我們很樂意回答您的問題。謝謝。

(Operator Instructions) Josh Spector with UBS.

（操作員說明）瑞士銀行 (UBS) 的 Josh Spector。

Yeah. Hi, good morning. I had a couple of questions on the industrial side of your business. So I think at the start of the presentation, you guys were talking about potentially some improving trends there. So first, I wanted to ask, is that just the expectation that things could improve? Or are you actually already seeing some improvement in demand?

是的。嗨，早安。我有幾個關於你們業務工業方面的問題。所以我認為在演講開始時，你們正在談論那裡潛在的一些改進趨勢。首先，我想問，這只是對事情能夠改善的期望嗎？或者您實際上已經看到需求有所改善？

And then related with that, if you could talk about the contracting side of industrial and if there's more or less contracts maybe open up for negotiation and how that plays into the demand picture favorably or maybe not favorably as we think about spread and contract pricing over the next year?

然後與此相關的是，如果你能談談工業的承包方面，如果有更多或更少的合約可能需要進行談判，以及當我們考慮價差和合約定價時，這對需求圖景有何有利或不利的影響明年？

Sure. I'm going to let Damien take that one.

當然。我會讓達米安拿走那個。

Yeah, good morning, Josh. So I think we're probably talking about it more in the context of could improve. At the moment, we're seeing industrial demand pretty stable. It's been quite robust over the last couple of years. But I think there's certainly some signs there with interest rates and general economic activity that we can see some improvement, particularly if you see more infrastructure build-out, housing development, et cetera, et cetera. So we're on a wait-and-see approach with that, but we're pretty confident about that.

是的，早上好，喬許。所以我認為我們可能更多地在可以改進的背景下討論它。目前，我們看到工業需求相當穩定。在過去的幾年裡，它的表現相當強勁。但我認為利率和總體經濟活動確實有一些跡象表明我們可以看到一些改善，特別是如果你看到更多的基礎設施建設、房屋開發等等。因此，我們對此持觀望態度，但我們對此非常有信心。

In terms of your second question, the way we manage our customer portfolio, and all of the associated contracts is we're just careful not to cluster them, so they're all expiring together. So they're sort of laid out over time. And naturally, some will be expiring, and some are a little longer term. So we'll just deal with that as they arise.

就您的第二個問題而言，我們管理客戶組合以及所有相關合約的方式是我們小心翼翼地不將它們聚集在一起，因此它們都會一起到期。所以它們是隨著時間的推移而排列的。當然，有些會過期，有些則期限較長。因此，我們將在出現問題時進行處理。

Okay. I'll maybe ask then a follow-up there. Just I think you talked about getting more interest in contracts for lower carbon material when you have the agreement with Freeport. I guess is there a way to frame this in the framework of that you have about 450kt of CO2 you're sequestering.

好的。我可能會在那裡詢問後續情況。我認為，當您與自由港達成協議時，您談到了對低碳材料合約的興趣。我想有沒有一種方法可以將其納入您封存約 450kt 二氧化碳的框架中。

How much is left of that potential lower carbon material to contract out based on the Lopes agreement and the Eldorado changes alone?

僅根據洛佩斯協議和埃爾多拉多的變化，還剩下多少潛在的低碳材料可以外包？

Probably about two-third, maybe a bit more than that.

大概是三分之二左右，也許還多一點。

Yeah. I mean if you take it back, we'll probably have about 375,000 tons of low-carbon ammonia. And so if we've contracted 150,000 of AN solution, that's roughly 70,000 tons or so of that ammonia. So we still have about call it, 300,000 tons of low-carbon ammonia that we can sell as ammonia or upgraded product.

是的。我的意思是，如果你把它收回來，我們可能會有大約 375,000 噸低碳氨。因此，如果我們簽訂了 150,000 份 AN 溶液合同，則大約需要 70,000 噸左右的氨。所以我們還有大約30萬噸低碳氨，我們可以作為氨或升級產品來出售。

Very clear. Thank you.

非常清楚。謝謝。

Andrew Wong with RBC Capital Markets.

加拿大皇家銀行資本市場部的安德魯‧黃 (Andrew Wong)。

Hey, good morning. So just with some of the operational improvements that we've seen in upgrades completed this year, could you provide maybe a bit of an early outlook into 2025 in terms of volumes, just given that there are also some debottlenecks next year? And do you -- or just maybe generally, do you expect production to be higher, lower or maybe about the same?

嘿，早安。那麼，鑑於我們在今年完成的升級中看到的一些營運改進，考慮到明年還會出現一些瓶頸，您能否提供 2025 年銷售方面的一些早期展望？您是否——或者只是一般而言，您預計產量會更高、更低還是大致持平？

Well, good morning, Andrew, so what I would say is we've got two turnarounds next year. We've got another turnaround at Cherokee in the late summer. And then we've got our annual or threeyear turnaround at El Dorado. So if you perform it for those being in production and not turnaround, we clearly would have better production year-over-year just by the very fact that we think we have improving operating rates, but we've also debottlenecked the prior urea plant, and so we'll have higher UAN volumes year-over-year.

嗯，早上好，安德魯，所以我想說的是，明年我們將有兩次轉變。夏末，我們在切羅基再次迎來了轉機。然後我們在埃爾多拉多實現了年度或三年的周轉。因此，如果你對正在生產而不是周轉的工廠執行此操作，我們顯然會比去年同期獲得更好的產量，因為我們認為我們的開工率有所提高，但我們也消除了先前尿素工廠的瓶頸，因此，我們的UAN 量將逐年增加。

I think we're a little early still on giving an outlook on volume for next year. But as we always do next quarter, Cheryl will do that and go through that on what our volume expectations are for 2025.

我認為我們對明年的銷售展望還為時過早。但正如我們下個季度一貫所做的那樣，謝麗爾將這樣做，並根據我們對 2025 年的銷售預期進行調整。

Okay. That's helpful. And then maybe a little bit more, I guess, philosophically, we've seen some transactions this year in the nitrogen space, and that would imply a higher valuation for your business. So maybe just two questions around that is, first, how much do the NOLs factor into any potential transactions? And secondly, I guess, like does it make sense for LSB to stay a public company?

好的。這很有幫助。然後也許更多一點，我想，從哲學上講，我們今年在氮領域看到了一些交易，這意味著您的業務估值更高。因此，圍繞這個問題可能只有兩個問題：第一，NOL 在任何潛在交易中佔多大比例？其次，我想，LSB 繼續成為上市公司是否有意義？

Well, great questions. So our NOL is about $250 million or so. So if you tax effect that for a tax rate of 25%, 20%, I mean, somewhere in that range. So we're talking about $50 million to $70 million of actual cash. So it's still meaningful. But as we continue to move forward, I would expect that, that would get reduced every year as we continue to make money and improve the business to make more money.

嗯，很好的問題。所以我們的 NOL 大約是 2.5 億美元左右。因此，如果你對 25%、20% 的稅率徵稅，我的意思是，在這個範圍內的某個地方。所以我們談論的是 5000 萬至 7000 萬美元的實際現金。所以還是有意義的。但隨著我們繼續前進，我預計，隨著我們繼續賺錢並改善業務以賺更多錢，這種情況每年都會減少。

Does it make sense for us to be a public company? Well, that's sort of a conundrum, right? I mean we are public today. We think having access to capital in the public markets is important. But we're a public company and we're for sale every day because there's a stock price that's out there.

我們成為上市公司有意義嗎？嗯，這是一個難題，對吧？我的意思是我們今天是公開的。我們認為在公開市場取得資本很重要。但我們是一家上市公司，我們每天都在出售，因為那裡有股票價格。

So I think right now, we're focused on improving the business and growing the business, and we've got a number of low-carbon projects that we're really excited about. And we're going to focus on that. We do look at M&A transactions. And so if there's a way for us to gain scale and get bigger, we're always interested in doing that. But we're pretty disciplined on how we think about M&A and what we're willing to pay for things. Certainly, we'll pay fair value. So I guess in a roundabout way, I mean, we are public today, and there's benefits and not benefits to being public.

所以我認為現在我們專注於改善業務和發展業務，我們有許多令我們非常興奮的低碳專案。我們將重點關注這一點。我們確實關注併購交易。因此，如果有辦法讓我們擴大規模並變得更大，我們總是有興趣這樣做。但我們對併購的看法以及我們願意支付的費用非常嚴格。當然，我們會支付公允價值。所以我想，以一種迂迴的方式，我的意思是，我們今天已經公開了，公開有好處，也有沒有好處。

Okay. Understood. Thank you.

好的。明白了。謝謝。

Laurence Alexander with Jefferies.

勞倫斯·亞歷山大和杰弗里斯。

Good morning. Could you touch on a little bit over the next, say, four, five years, how you think about your bandwidth for working on the Houston Ship Channel, scaling up El Dorado, ramping it up and maintaining productivity? Or what you see as kind of -- or is there a give and take where productivity efforts might need to slow down a little bit just to make sure everything else ramps seamlessly?

早安.您能否談談在接下來的四年、五年內，您如何看待在休士頓船舶航道上工作的頻寬、擴大埃爾多拉多的規模、提高其速度並保持生產力？或者你所認為的——或者是否存在一種讓步，生產力工作可能需要稍微放慢一點，以確保其他一切順利進行？

That's a great question, and it's actually one that we discuss pretty often internally about resources. So you have internal resources, right, so employees. And so whether they're existing or new employees that we could hire, but you also have the opportunity to contract out technical talent.

這是一個很好的問題，實際上我們內部經常討論有關資源的問題。所以你有內部資源，對吧，員工也有。因此，無論他們是我們可以僱用的現有員工還是新員工，您也有機會外包技術人才。

So we're pretty adept at doing that, and we do work with a lot of engineering firms to do that. So for instance, on the Houston Ship Channel project, we have one of our top technical folks really leading that project for us. So we did pull him out of existing operations, but we supplemented him with contracted resources and very senior technical resources. So we've been able to do that.

所以我們非常擅長這樣做，並且我們確實與許多工程公司合作來做到這一點。例如，在休士頓船舶航道計畫中，我們有一位頂尖技術人員真正為我們領導這個計畫。因此，我們確實將他從現有業務中撤出，但我們為他提供了合約資源和非常高級的技術資源。所以我們已經能夠做到這一點。

I think if we go into FEED and we move into FEED sometime late in the first quarter, we've got an organizational structure that is outlined, and we'll need to put in place. And some of those will be permanent resources charged and subject to and working solely on the Houston Ship Channel project, and some of them will be supplemented with contracted resources.

我認為，如果我們進入 FEED，並在第一季末的某個時候進入 FEED，我們已經概述了組織結構，並且需要落實到位。其中一些將是永久資源，收費並受制於休士頓船舶航道項目，並且僅在休士頓船舶航道項目上工作，其中一些將透過合約資源進行補充。

The carbon capture project at El Dorado, again, we won't build and own the capture facility and the pipeline. Our partner, Lapis Energy will. So from a manpower standpoint, it's not going to be a great drain on resources. We've got folks on site that are project managers and project leaders. And so they're working with Lapis on that in addition to other projects that are going on, on the site.

埃爾多拉多的碳捕獲項目，我們不會建造和擁有捕獲設施和管道。我們的合作夥伴青金石能源將會。因此，從人力的角度來看，這不會造成資源的大量消耗。我們現場有專案經理和專案負責人。因此，除了網站上正在進行的其他項目外，他們還與 Lapis 合作進行這項計畫。

If we were to debottleneck a plant or plants down at El Dorado or any other site, again, we'd have to really think about resource allocation. The one thing I can guarantee you is we're not going to drain our resources from our existing operations to make the improvements that we need to make to supplement or move them on to a project and then slow down our improvement on our existing business. It's not something that we want to do.

如果我們要消除埃爾多拉多或任何其他地點的一個或多個工廠的瓶頸，我們必須再次認真考慮資源分配。我可以向您保證的一件事是，我們不會耗盡現有業務的資源來進行所需的改進，以補充或將其轉移到專案中，然後放慢對現有業務的改進。這不是我們想做的事。

And then longer term with the Houston Ship Channel, if the end market demand sort of strengthens towards the end of the decade, even before your project comes on stream, would you consider an option of just locking in a return if someone else wanted to have access to the low-carbon molecules, but then they wanted to take the commodity spread risk?

然後，從休士頓船舶航道的長期來看，如果終端市場需求在本世紀末有所增強，甚至在您的專案投產之前，如果其他人想要獲得回報，您是否會考慮選擇鎖定回報以獲得低碳分子，但隨後又想承擔商品價差風險？

Yeah. So it's actually what we're contemplating day one. So I hope I've been pretty clear about this, that we will not move into FEED unless we've got a majority of the production locked up in. I don't want to say take-or-pay signed agreements. It might be detailed term sheets with some binding nature to it, but we're not in the business of taking risk and building a plant and hope that people will come.

是的。所以這實際上是我們第一天正在考慮的事情。所以我希望我已經非常清楚地表明這一點，除非我們已經鎖定了大部分生產，否則我們不會進入飼料。它可能是詳細的條款清單，具有一定的約束力，但我們的業務不是冒險建造工廠並希望人們會來。

So our expectation is 75%, 85% of the expected production would be locked up with customers that are committing to take-or-pay like volumes on an annual basis for somewhere in the period of 10 to 12 years and basically locking in the return because what we would do in the pricing of the product it will be cost plus and the cost will include the cost that we're buying hydrogen from Air Liquide. So we can back-to-back that.

因此，我們的預期是 75%、85% 的預期產量將鎖定在承諾在 10 到 12 年的某個時間段內每年按照付不議的數量購買並基本上鎖定回報的客戶。中所做的將是成本加成，並且成本將包括我們從液化空氣購買氫氣的成本。所以我們可以背對背。

So the whole idea here and whole vision is to really have committed offtake for that project to derisk any commodity risk by pricing the offtake with the same parameters as we're buying from Air Liquide. And then our real only risk once we've constructed and commissioned and got the site up and running is operations, and we do that every day. I mean that's a core competency.

因此，這裡的整個想法和整個願景是真正為該專案承諾承購，透過使用與我們從液化空氣公司購買相同的參數對承購進行定價來消除任何商品風險。一旦我們建造、調試並啟動並運行站點，我們真正面臨的唯一風險就是運營，而我們每天都這樣做。我的意思是這是核心能力。

So the way we're looking at this is really building almost like an annuity where we can have a steady stream locked in at an acceptable rate of return on the capital that we're investing. Does that make sense?

因此，我們看待這個問題的方式實際上就像年金一樣，我們可以以可接受的投資回報率鎖定穩定的資金流。這樣有道理嗎？

Perfect. Okay. Thank you

完美的。好的。謝謝

Rob McGuire with Granite Research.

花崗岩研究中心的羅布·麥奎爾。

Morning. So Mark, how -- or Damien, how far out are buyers purchasing nitrogen in today's market just relative to what you've been seeing so far this year?

早晨。那麼，馬克，或者達米安，買家在當今市場上購買氮氣的情況與您今年迄今為止所看到的情況相比有多遠？

We're seeing a fairly cautious approach sort of close to hand to mouth, but some recent pricing -- price strengthening, particularly in urea has seen some buyers in the market start to think about taking a longer position into sort of Q1 next year. So -- but really, the majority is basically hand-to-mouth.

我們看到一種相當謹慎的態度，有點接近勉強糊口，但最近的一些定價——價格走強，特別是尿素，已經讓市場上的一些買家開始考慮在明年第一季採取更長的立場。所以——但實際上，大多數人基本上都是勉強糊口的。

Great. And then Cheryl or Mark, can you discuss what drove CapEx this quarter and if that's going to continue?

偉大的。然後，謝麗爾或馬克，您能否討論一下推動本季資本支出的因素以及這種情況是否會持續下去？

Yeah. We had the big turnaround at Pryor in the third quarter, Rob. So that was definitely a bigger investment from a capital perspective. We did a lot of good work at the Pryor facility. We do have the Cherokee ammonia turnaround in the fourth quarter. So we'll see some elevated capital there as well.

是的。羅布，第三節我們在普賴爾隊取得了巨大的轉變。因此，從資本角度來看，這絕對是一項更大的投資。我們在普賴爾工廠做了很多出色的工作。我們確實在第四季度實現了切羅基氨的扭虧為盈。因此，我們也會在那裡看到一些資本增加。

Was there any -- Cheryl, was there anything kind of surprising there in terms of the CapEx or the turnarounds? Or it just was a little higher than anticipated?

謝麗爾，在資本支出或週轉方面有什麼令人驚訝的事情嗎？還是只是比預期高一點？

Yeah. I mean, not really, Rob. I mean we did have a few fines that we addressed during the turnaround. That's pretty normal. So we did have a bit of a higher CapEx number, but nothing -- a couple of million, nothing out of the ordinary.

是的。我的意思是，不是真的，羅布。我的意思是，我們確實在周轉期間解決了一些罰款。這很正常。所以我們的資本支出確實有點高，但沒有什麼——幾百萬，沒有什麼異常。

Thank you. And then on the Houston Ship Channel, you're discussing the bid to take place mid-2026 and production at the beginning of -- sorry, 2030. But that looked like your timetable was a little further out, particularly on the production. I'm just curious what's behind that shift?

謝謝。然後在休士頓船舶頻道，您正在討論 2026 年中期進行的競標以及 2030 年年初的製作。我只是好奇這種轉變背後的原因是什麼？

Rob, I just think it's fluid. And I think that could it get pulled in some? Sure. I think we're trying to be cautious and conservative when we're thinking about timing. A lot to happen between now and, let's say, FID and whether we -- with the expectation of long lead time items and supply chain issues and other things, I think it's nothing more than some level of conservatism.

羅布，我只是認為它是流動的。我認為它可以被拉進來嗎？當然。我認為，當我們考慮時機時，我們會努力保持謹慎和保守。從現在到最終投資決定（FID）之間會發生很多事情，以及我們是否——帶著對長交貨期項目和供應鏈問題以及其他問題的預期，我認為這只不過是某種程度的保守主義。

I appreciate that, Mark. And then lastly, the capacity utilization, reliability improvements that you made at Pryor. Can you just discuss what you're seeing out of Pryor's performance given those improvements and what you expect to see maybe over the coming three or four quarters if we'll see any stair-step improvements in utilization?

我很感激，馬克。最後，您在 Pryor 取得的產能利用率和可靠性改善。您能否討論一下您從 Pryor 的性能中看到的這些改進，以及如果我們看到利用率的階梯式改進，您預計在未來三到四個季度中可能會看到什麼？

Yeah. So we're really excited about the work that they did during the turnaround. So first, from just a pure reliability standpoint, as is the case with most turnarounds, right, you've got degradation of catalyst and other things that are going on in your plants. So we kind of, I'll say, limped a little bit into our turnaround.

是的。因此，我們對他們在轉型期間所做的工作感到非常興奮。因此，首先，從純粹的可靠性角度來看，就像大多數週轉的情況一樣，你的工廠中會發生催化劑和其他事情的退化。所以，我想說的是，我們在扭虧為盈時有點一瘸一拐的。

Coming out of the turnaround, the team did a phenomenal job in the work that they did, and we're running at optimal rates on ammonia. So we're really happy with that. As far as urea and the expansion, we're super excited about that, and Damien is probably, and his team are super excited about that because it's less ammonia to sell for us in the Southern Plains because we're going to upgrade it to UAN. And so that will add about 75,000 tons a year in additional UAN production.

走出困境後，團隊在他們所做的工作中表現出色，我們正在以最佳的氨速度運作。所以我們對此感到非常高興。就尿素和擴張而言，我們對此感到非常興奮，達米安（Damien）可能也是如此，他的團隊對此也非常興奮，因為在南部平原為我們出售的氨較少，因為我們要將其升級為烏安。因此，每年 UAN 產量將增加約 75,000 噸。

So the rate is about 1,350 or so a day in urea production, and we're really seeing that. I mean we're not consistently hitting that every day, but we're hitting that. And I think we're on our way to being very consistent and reliable with that production. So again, I think the expansion of our urea plant and the upgrading to more UAN really is going well and as expected.

因此，尿素產量約為每天 1,350 份左右，我們確實看到了這一點。我的意思是，我們並不是每天都能做到這一點，但我們正在做到這一點。我認為我們的製作正在變得非常一致和可靠。再說一次，我認為我們尿素工廠的擴建和更多 UAN 的升級確實進展順利，符合預期。

Well, congratulations on that. Thank you.

好吧，恭喜你。謝謝。

David Begleiter with Deutsche Bank.

德意志銀行的大衛·貝格萊特。

Hey, good morning. Mark and Cheryl, should turnaround expenses be up or down next year, given the turnarounds you highlighted already?

嘿，早安。馬克和謝麗爾，考慮到你們已經強調的周轉情況，明年的周轉費用應該增加還是減少？

So it's a bit early. We're going through that right now and really working through the cost of the turnarounds next year. I think I would expect at this point to be something in the same ballpark as this year.

所以現在有點早了。我們現在正在經歷這個問題，並真正解決明年的周轉成本。我想我現在預計會達到與今年相同的水平。

Very good. And Mark, on the Houston project, are you thinking about in terms of the financing side, derisking that capital commitment for yourselves via either project financing or partners? Or are you satisfied with your ability to finance that project on your own?

非常好。馬克，關於休士頓項目，您是否在考慮融資方面，透過專案融資或合作夥伴來降低自己的資本承諾風險？或者您對自己為該專案提供資金的能力感到滿意嗎？

Yeah. So the way we're thinking about the project is -- and again, we have a partner in INPEX. So let's just assume for simplicity purposes, we each own 50%. It won't be quite that. But if the project is -- and I think I've used an $800 million number before for the ammonia loop.

是的。因此，我們考慮該專案的方式是——再說一遍，我們有 INPEX 合作夥伴。因此，為了簡單起見，我們假設我們各擁有 50% 的股份。事情不會完全那樣。但如果這個項目是——我想我之前已經用過 8 億美元的數字用於氨循環。

If it's $800 million, the expectation would be the project finance 60% of it, so $480 million. That leaves us $320 million required of equity or cash. And so, we'll each put in $160 million or so, and that's how we expect to finance it. Now when I say project finance, we can go the traditional project finance route or if the LPO, the government loan program is still open, we've started exploring that as well.

如果是 8 億美元，則預期專案融資將佔其中的 60%，即 4.8 億美元。這還需要 3.2 億美元的股權或現金。因此，我們將各自投入 1.6 億美元左右，這就是我們期望的融資方式。現在，當我說專案融資時，我們可以走傳統的專案融資路線，或者如果 LPO、政府貸款計劃仍然開放，我們也已經開始探索。

Excellent. And lastly, Mark, just, what are your updated thoughts on the price premium the market will pay, if any, for low-carbon ammonia over the next five to 10 years, perhaps?

出色的。最後，馬克，您對未來五到十年內低碳氨市場可能支付的溢價（如果有的話）有何最新想法？

That's an interesting question. Damien and I go back and forth on this. There's some -- probably when you're selling to Europe, there's an expectation that it's going to be some index. So let's just use the Tampa ammonia index, Gulf ammonia index, something like that, plus the cost of CBAM, whatever that is because it's an increasing amount starting in 2026, right? So they're on a journey from 2026 to 2034.

這是一個有趣的問題。達米安和我在這個問題上反覆討論。有一些——可能當你向歐洲銷售時，人們期望它將是某種指數。因此，我們只使用坦帕氨指數、海灣氨指數等類似的指標，再加上 CBAM 的成本，無論是什麼，因為從 2026 年開始，其數量會不斷增加，對嗎？所以他們正踏上從 2026 年到 2034 年的旅程。

For us -- and that's straight ammonia. One of the advantages of capturing carbon at an existing facility that's got upgrading capabilities is you've got the ability to sell low carbon upgraded products like our commercial team did a really good job of selling AN solution. And so we think that there are additional opportunities in AN solution. There could be opportunities in nitric acid, and some of the other products, which affords us a less competitive environment plus another product that's essential to a lot of our industrial customers.

對我們來說——那就是純氨。在具有升級能力的現有設施中捕獲碳的優勢之一是您有能力銷售低碳升級產品，就像我們的商業團隊在銷售 AN 解決方案方面做得非常出色一樣。因此，我們認為 AN 解決方案還有更多機會。硝酸和其他一些產品可能存在機會，這為我們提供了一個競爭較少的環境，再加上另一種對我們許多工業客戶至關重要的產品。

Thank you.

謝謝。

Charles Neivert with Piper Sandler.

查爾斯·內維特和派珀·桑德勒。

Morning guys. A bunch of ones. Is there any gas hedges that are on right now that are going to affect gas pricing for you guys for the next couple of quarters? Or are we basically beyond all of that now? We're just looking at market.

早安各位。一堆。目前正在進行的天然氣對沖是否會影響你們接下來幾季的天然氣定價？或者我們現在基本上已經超越了這一切嗎？我們只是看市場。

Yeah. So Charlie, we generally buy first of month. So we're one month ahead. So we'll lock November gas here in the next couple of days. So other than that, that's the majority of it.

是的。查理，我們通常在月初購買。所以我們提早了一個月。因此，我們將在接下來的幾天內鎖定 11 月的天然氣。除此之外，這就是大部分。

Okay. And then in terms of the deal from Lapis ultimately, let's just say for the sake of argument, everything gets started on January 1, 2026. How much do you guys get from them? I know it's more or less a -- I won't call it a set amount, but it's not based on what they're going to be getting for the carbon dioxide, but how much should we expect added to the numbers beginning in '26 annually?

好的。然後，就 Lapis 最終的交易而言，為了便於討論，我們只能說，一切都從 2026 年 1 月 1 日開始。我知道這或多或少是一個——我不會稱之為固定數量，但這不是基於他們將從二氧化碳中獲得的量，而是我們應該期望在以“”開頭的數字中添加多少每年26 ？

Yeah. So it's between $30 and $35 a ton that they'll pay us for each ton of CO2 that they take from us in sequester. So assuming that it's 400,000 tons, it's roughly $14 million.

是的。因此，他們將從我們這裡獲得的每噸二氧化碳封存費用為每噸 30 至 35 美元。因此假設產量為 40 萬噸，則約為 1,400 萬美元。

And that -- again, it's all based on running. Okay. Can you give me the timing -- you have two turns for next year. Are they both going to be third quarter? Or is one going to be third and then the other sort of third and fourth? Where should I put the hit?

再說一次，這一切都是基於跑步。好的。你能告訴我時間嗎——明年你有兩次機會。他們都會出第三季嗎？還是一個會成為第三，然後另一個會變成第三和第四？我應該把擊球放在哪裡？

I think it's both in the third quarter. You may have -- so the El Dorado turnaround will absolutely be in the third quarter, and you may have the Cherokee turnaround or the non-ammonia turnaround that they're doing that's end of third quarter, beginning of fourth quarter.

我認為這都是在第三季。你可能會——所以埃爾多拉多的轉變絕對會在第三季度發生，切諾基的轉變或非氨的轉變可能會在第三季末、第四季初發生。

And then last question. The season was really good for the grain guys. The weather has been really terrific. They've harvested. They've done all these things. Yields are good. Have you seen anything around ammonia application this year being slower because the good weather is actually bad for ammonia application in the fall?

然後是最後一個問題。這個季節對種糧的人來說確實是個好季節。天氣真的很棒。他們收穫了。他們已經做了所有這些事情。產量不錯。您是否看到今年施氨速度變慢了，因為好天氣實際上不利於秋季施氨？

Has there been any like low numbers that you've seen or people hesitant to buy? I mean the ground temperatures just aren't cold enough yet to hold it. So I assume application is really behind whatever schedule it would typically take.

您是否見過類似的低數字或人們在購買時猶豫不決？我的意思是地面溫度還不夠冷，不足以支撐它。所以我認為申請確實落後於通常需要的時間表。

Yeah. Charlie, you're spot on. Yeah, it's been terrific weather for harvest and yields are terrific, and we should see record yields this year for the US corn -- crop. But yes, we do need to see some rain, and we do need to see those soil temperatures come down probably 10, 15 degrees for ammonia to be able to start being applied.

是的。查理，你說得對。是的，今年的收割天氣非常好，產量也非常好，今年我們應該會看到美國玉米的產量創歷史新高。但是，是的，我們確實需要看到一些降雨，我們確實需要看到土壤溫度大約下降 10、15 度，以便能夠開始施用氨。

So it is running a little, what I would call behind schedule. Buyers are fairly well bought, but we think if there's any incremental needs there'll be some additional purchases. But we're just -- yes, everyone is just waiting and seeing. There's not a lot of activity at the moment.

所以它運行得有點慢，我稱之為落後於計劃。買家的購買量相當不錯，但我們認為，如果有任何增量需求，就會進行一些額外的購買。但我們只是——是的，每個人都在觀望。目前沒有太多活動。

And to what degree do you guys have touch to that particular market? I mean, is that something that's significant for third quarter, fourth quarter sales or sales you've already made in for fall on ammonia?

你們對這個特定市場的接觸程度如何？我的意思是，這對於第三季、第四季的銷售或您已經在秋季實現的氨銷售額來說重要嗎？

I wouldn't say it's hugely material. We've got a surplus ammonia that comes out of Pryor that we participate in the market with. So -- but most of our sales are already locked in, and we're in a pretty comfortable position.

我不會說這是非常物質的。我們有來自普賴爾的剩餘氨，我們可以用它們參與市場。所以——但我們的大部分銷售額已經鎖定，而且我們處於一個相當舒適的位置。

Charlie, I'd also add, we've got less exposure to ammonia coming out of Pryor with the recent expansion of the urea plant at Pryor. So moving more UAN and less ammonia going forward.

查理，我還要補充一點，隨著最近普賴爾尿素廠的擴建，我們接觸到的來自普賴爾的氨的量減少了。因此，未來將增加 UAN，減少氨。

Got it. Over time, is that something you guys are really looking at as moving less ammonia? I mean the way you talked about with the -- below carbon, you want to take it upstream a little more or downstream a little bit more in order to get away from the most competitive market. Is that sort of now a strategic priority is to the degree you can get away from ammonia itself?

知道了。隨著時間的推移，你們真的認為氨移動量減少了嗎？我的意思是，您談到的碳排放以下的方式，您希望將其向上游多一點或向下游多一點，以便遠離競爭最激烈的市場。現在的戰略重點是否是能夠擺脫氨本身？

Yeah, I think so, Charlie. I mean we would much be preferring to sell UAN or our upgraded products rather than the base product.

是的，我想是的，查理。我的意思是，我們更願意銷售 UAN 或我們的升級產品，而不是基礎產品。

I think the other thing, when you think about Pryor and its location, we can't forget -- we certainly don't forget that there used to be the Magellan pipeline, and there's no pipeline anymore. So that the distribution patterns of how ammonia is distributed from our competitors in that area has changed and put some pressure on the marketplace. So as much as we can upgrade out of Pryor is what our expectation would be.

我認為另一件事，當你想到普賴爾及其位置時，我們不能忘記——我們當然不會忘記曾經有麥哲倫管道，但現在已經沒有管道了。因此，我們在該領域的競爭對手的氨分銷模式已經發生了變化，並對市場造成了一些壓力。因此，我們可以從 Pryor 升級到多少，這就是我們的期望。

Got it. Alright, thanks very much.

知道了。好的，非常感謝。

(Operator Instructions) Peter Gastreich with Water Tower Research.

（操作說明）Peter Gastreich 與水塔研究中心。

Thank you. So good morning, Mark and team and congratulations on your progress so far this year. And thanks for taking my question. For low-carbon ammonia, I understand your strategy is going to target where you see the demand, and that's in the industrial applications. But for that part that will remain in fertilizer, how far do you think we are from seeing the market assign some kind of value to the prospects for low-carbon ammonia in fertilizer applications?

謝謝。早安，馬克和團隊，恭喜你們今年迄今的進步。感謝您提出我的問題。對於低碳氨，我知道你們的策略將針對有需求的地方，那就是工業應用。但對於將留在化肥中的那部分，您認為我們離看到市場對低碳氨在化肥應用中的前景賦予某種價值還有多遠？

I'm just asking this in the context that in the last few weeks, we've seen the DOE come up with $3 billion in conditional loan commitments for sustainable aviation fuel projects. We have a pretty big chunk of the ethanol industry that's on low carbon production as well. So overall, I'd just be interested in your thoughts regarding that. Thank you.

我只是在過去幾週提出這個問題的背景下，我們看到美國能源部為永續航空燃料計畫提供了 30 億美元的有條件貸款承諾。我們的乙醇產業有很大一部分也採用低碳生產。總的來說，我只是對你對此的想法感興趣。謝謝。

Yeah. So what I would say is a farmer using low-carbon fertilizer as just a fertilizer with no benefit, we're light years away from that, right? There's no -- not many farmers that are going to be willing to do that, at least that's the feedback that we've gotten.

是的。所以我想說的是，農民使用低碳肥料只是作為肥料，沒有任何好處，我們離這個目標還差得很遠，對嗎？沒有——沒有多少農民願意這樣做，至少我們得到的回饋是這樣。

To your point, though, on ethanol -- ethanol, low-carbon ethanol being used as a feedstock for sustainable aviation fuel is definitely something that a lot of people are looking at. And when you think about creating low-carbon ethanol, the biggest driver of that is capturing the CO2 and sequestering it.

不過，就你的觀點而言，就乙醇而言，乙醇、低碳乙醇被用作永續航空燃料的原料肯定是很多人都在關注的事情。當你考慮生產低碳乙醇時，最大的驅動力是捕獲二氧化碳並將其封存。

So that's where you get the biggest reduction in CI score. However, using low-carbon corn also further reduces that CI score. So that is important for them. And it's much more tangible and measurable than better tilling practices and just other things that farmers can do. So there is a lot of focus on that, and we have had several conversations with ethanol producers about that.

這就是 CI 分數下降幅度最大的地方。然而，使用低碳玉米也會進一步降低 CI 分數。所以這對他們來說很重要。它比更好的耕作方法和農民可以做的其他事情更加切實和可衡量。因此，人們對此非常關注，我們已經與乙醇生產商就此進行了多次對話。

And so what we might see in the future, and it's not that far off, if legislation allows ethanol producers to really get the incentives that are in programs today. You might see ethanol producers directing corn growers to buy low-carbon fertilizer and then paying them a premium for that.

因此，如果立法允許乙醇生產商真正獲得當今計劃中的激勵措施，那麼我們將來可能會看到的情況，而且距離並不遙遠。您可能會看到乙醇生產商指導玉米種植者購買低碳肥料，然後為此支付溢價。

A lot of that, though, will depend on the extension of what's called 45Z, which is part of the tax code. And that's really -- what people are really waiting on now is, will that be extended because it expires in 2026. So I think, again, similar to 45Z with low carbon hydrogen -- I mean, green hydrogen or green ammonia and people waiting on final legislation for that, people are now waiting to see whether 45Z gets extended.

不過，這很大程度上取決於所謂的 45Z 的擴展，它是稅法的一部分。這就是——人們現在真正等待的是，會不會延長，因為它將於2026 年到期。人們在等待關於最終立法，人們現在正在等待 45Z 是否會延長。

If it gets extended, I think that using low-carbon fertilizer to produce low-carbon corn for ethanol, low-carbon ethanol production could have some real legs. But I think we're in a waiting pattern for right now.

如果延長的話，我認為用低碳肥料生產低碳玉米生產乙醇，低碳乙醇生產可能會有一些實際的作用。但我認為我們現在正處於等待狀態。

Great. Thank you very much.

偉大的。非常感謝。

There are no further questions at this time. I would like to turn the floor over to Mark for closing remarks.

目前沒有其他問題。我想請馬克發表結束語。

Well, thank you, everyone. And as always, thanks for the interest in LSB Industries. I hope you can see that we're making progress. And if you have any further questions, please feel free to give us a call or e-mail us. Thanks.

嗯，謝謝大家。一如既往，感謝您對 LSB Industries 的關注。我希望你能看到我們正在取得進展。如果您還有任何疑問，請隨時致電或發送電子郵件給我們。謝謝。

Thank you. This concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

謝謝。今天的電話會議到此結束。我們感謝您的參與。此時您可以斷開線路。