Operator: Good day and welcome to the Compass Minerals’ Third Quarter Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Theresa Womble. Please go ahead.

Theresa Womble: Thank you, Karina.

Today our CEO, Fran Malecha; and our CFO, Matthew Foulston will review our third quarter results and current outlook. Before I turn the call over to them, let me remind you that today’s discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company’s expectations as of today’s date, October 25, 2016, and involve risks and uncertainties that could cause the Company’s actual results to differ materially. The differences could be caused by a number of factors, including those identified in Compass Minerals’ most recent Forms 10-Q and 10-K. The Company undertakes no obligation to update any forward-looking statements made today to reflect for future events or developments.

You can find reconciliations of any non-GAAP financial information that we discuss today in our earnings release or in our earnings release presentation. Both of which are available in the Investor Relations section of the Compass Minerals website. Now I’ll turn the call over to Fran.

Fran Malecha: Thank you all for joining our call today. We are pleased to report our third quarter results were in line with our expectations, although lower than last year’s results.

We knew we would face lower pre-season demand for deicing products in both the highway and consumer and industrial businesses due to the fact that last winter was very mild. In our plant nutrition business, we expect lower pricing for our sulfate and potash products as we work to spur demand, maintain our market share, and compete against imports. Further, this quarter is typically a time of preparation for Compass Minerals. It’s a time when we are preparing to meet winter demand for deicing products and to serve the important fall agricultural season in California and other key markets where many chloride-sensitive crops are grown. This year, we were also preparing to close on our acquisition of Produquimica in Brazil.

We raised $450 million with an incremental term loan to fund the purchase, and shortly after the quarter ended, we closed the transaction. Before I dig a little deeper into what this transaction means for us, I’d like to review where we stand with our salt and plant nutrition businesses. First, looking at our salt business, the profitability of this segment remains strong, despite lower sales volumes. We are continuing to benefit from the initiatives in our consumer and industrial business to improve profitability, including price improvement in our non-deicing products, customer optimization, and operational efficiency. The salt segment this quarter also benefited from lower trucking rates and fuel costs.

We expect this to continue for the remainder of the year, which should help offset some of the impact from lower highway deicing prices. Just as

a reminder: snow events for the key cities we track in our served market for the 2015-2016 winter were the second lowest that we’ve experienced since we became a public company back in 2002. This led to a very competitive highway deicing bid season in North America. The bidding process is now complete and the outcome is basically in line with our prior reporting. Average price on our awarded contracts is down about 7% from the prior bid season.

Our awarded bid volumes are approximately 15% below last year, which is similar to the overall contraction in our served market. Another area that I’d like to touch on is that we are making good progress on our key capital projects at our Goderich salt mine. This includes realigning two of the three mine shafts and the implementation of continuous mining through all of our operations there. We have all the miners underground and are commissioning the second system now. We continue to expect the cost benefits of this transaction to begin in late 2017, and on an annualized basis, we expect about $30 million in cost savings from the continuous mining project.

Turning to our plant nutrition business, we are now getting into the fall season for SOP application. We believe we have seen the bottom in terms of lower demand for our SOP products in North America and are pleased to report that we did increase sales volume year-over-year for the first time in six quarters. We attribute this to the pricing action that we have taken, success in becoming a supplier of choice by consistently having the right product available, and in the market where and when the customer needs it. We’ve also seen a significant drop in import volumes, and modest opportunistic sales to international markets. Although right now there is depressed demand for crop input generally, I believe the investments we are making at Ogden to improve yield and expand production will serve us well over the long-term.

With this additional capacity, we can assure customers that we are the consistent supplier of choice in our key North American markets, even as we grow the share of acres in North America that apply SOP. In the near-term, we are beginning to see some improvements in demand in North America. Grower sentiment in the California market has improved due to better water conditions and improved prices in some key crops like almonds, and increased demand in the Southeast from vegetable growers as well. I’d like to make a few comments on Produquimica today as well. We provided some data in our presentation about the year-to-date results, which indicate that the Company has grown sales and earnings throughout 2016 and has performed better than our investment assumptions to this point.

Clearly, we’re pleased to have completed the acquisition. This is truly a milestone event for Compass. We’ve discussed its 50-year history, strong record of growth, and high-caliber leadership team, all of which have made this Company a great partner for us in Brazil. First, the acquisition significantly increases the scale of Compass Minerals and raises revenue to about $1.4 billion on a pro forma basis for the trailing 12 months. Second, adding Produquimica lessens the winter weather impact on our overall results.

In fact, if we had owned Produquimica for the last 12 months, salt sales would have represented about 57% of our total sales compared to 80% without it. Third, we believe this business adds an important growth engine for us. Due to the strong fundamentals of their businesses, commercial and R&D strengths, and available capacity, we think that the company has the ability to generate revenue of around R$2 billion and double its 2015 EBITDA by 2020, which would represent a healthy mid-teens growth rate. This would be very consistent with what the business has achieved over the last five years. Specifically, our plant nutrition strategy, the acquisition is important because it provides diversification in the geography in the product portfolio we now have.

We are also currently evaluating the agronomic fit of their products for North America. Ultimately it marks an important step toward our goal of becoming a global leader in specialty plant nutrition. Before turning the call over to Matthew, I’d like to summarize the progress we’ve made on our strategic plan. First, the completion of the Produquimica acquisition fulfills an important element of our growth plan. With the progress, we’ve made so far this year, we are past the peak spending in our CapEx plan, on budget, and largely on time.

These investments should provide us the ability to maximize our assets and drive better return throughout the business cycle. And we believe by 2018, we will be generating significantly more free cash flow, supporting our dividend and providing us opportunities to deliver greater returns for shareholders. In addition, I’d like to extend a warm welcome to Anthony Sepich, who will shortly be joining the Compass leadership team as Senior Vice President of our salt business. Anthony will be joining us from Archer Daniels Midland, where he enjoyed a 20-year career, most recently as President of ADM Corn Europe. Anthony has a solid record of profit growth in the commodities industry, leveraging his expertise in building relationships with customers, suppliers, and strategic partners.

I’d also like to take this opportunity to thank Bob Miller for his stewardship of the salt business over the last four years. Under his leadership, we put the strategy in place to grow this business, improve its profitability, and expand capacity, many of the elements, which we discussed here today. Now Matthew will talk more about the quarterly financial results and our outlook for the rest of the year.

Matthew Foulston: Thanks, Fran, and good morning, everyone. If you’re following with our presentation online, I’d like first to review our third quarter salt results on Slide 9.

Salt segment sales volumes declined 24% due to the lingering effects of the mild 2015-2016 winter. Our highway deicing customer demand for preseason orders was significantly lower. We also saw less demand from retailers for packaged deicing products since they ended last winter with some excess inventory. Average selling price for highway deicing products declined 13%, primarily due to lower contract prices and the weaker UK pound. In addition, our mix of sales to chemical customers increased as a result of the lower deicing sales.

Average selling price for consumer and industrial products was little changed from last year’s third quarter, as price improvements on non-deicing products offset the mix impact of selling fewer packaged deicing products. Despite the significant decline in volumes and highway deicing prices, our segment operating margin only contracted 3 percentage points, and our EBITDA margin was essentially unchanged. We continue to benefit from lower shipping costs, as a combination of lower fuel and a softer trucking market led to significantly lower freight costs. In addition, lower demand this year has temporarily reduced some of our warehousing costs. Another bright spot has been the continued benefit from commercial and operational initiatives within the consumer and industrial business.

In fact, so far this year, this business has sold about 7% lower volume while actually increasing its earnings by double digits. A testament to the ongoing efforts to really focus on delivering value with this business. Finally, before leaving the salt segment, we were pleased to host a group of analysts and investors for a tour of our flagship salt mine at Goderich a couple of weeks ago. Actually seeing the mine and its attributes in person really bring to life what we mean when we call this an advantaged asset. Once you see the overall scale of operation, where we mine 65 feet of a 100-foot seam of salt, and its deepwater port, which provides us access to the populous Midwest Snow Belt at the very lowest transportation costs, you come away with a true understanding of the unique value of this asset.

We were also able to show our continuous mining and flexible conveyance system in operation, which is turning this mine into a highly efficient salt production mine. When compared to the drill-and-blast system, the potential for the $30 million in annual savings becomes very clear. Turning to Slide 10, I will now discuss our plant nutrition results. Segment revenue was down 17% from third quarter 2015, as a 4% increase in sales volume was more than offset by a 21% decrease in average selling price. Our average price per ton for North American sulfate of potash dropped to $573 this quarter compared to $721 in the third quarter of 2015 and $617 in the second quarter of this year.

We also have continued to build stronger relationships with our customers by having ample product in-market to supply their needs. And our sales team continues to build the case for the value proposition of SOP compared to MOP for higher-value and chloride-sensitive crops. These actions are beginning to spark demand and appear to be contributing to a decline in SOP imports. That being said, we did opportunistically sell some SOP to international customers this quarter, which was a driver for our year-over-year increase in quarterly sales volumes. Our production costs have also improved at Ogden, as we projected, now that we have sold all of a higher-cost 2015 inventory and are now selling 100% pond-only production.

These costs are still somewhat elevated because we are operating at below-optimal production levels at both of our SOP production facilities due to the lower demand leading to greater fixed-cost absorption. I’d like to discuss a few corporate items before moving on to our outlook. We reported a nice decline in SG&A expense this quarter, which resulted from our continued emphasis on cost management across the organization. We also reported our second quarter of results from the 35% investment in Produquimica. We recorded a loss of $400,000 due to the impact of accounting adjustments related to a step-up in valuation of the Company’s assets and inventories since our initial purchase.

Excluding this impact, our 35% share of Produquimica net income was a $600,000 positive impact. Year-to-date, the Company is performing well ahead of their annual plan. We’ve again included in our presentation on Slide 6 some statistics on Produquimica’s year-to-date revenues and added their EBITDA. Revenue was up 20% and EBITDA was up 31% compared to the first nine months of 2015. Another very important achievement for us was raising the $450 million needed to close on this acquisition.

We did this by issuing another term loan, which matures at the same time as the existing term loan, on July 1, 2021, and has an attractive interest rate of LIBOR plus 2%. Turning to Slide 11, you can see that we’ve increased our full year EPS guidance by $0.20 to a range of $2.80 to $3.10 to include the benefit from full ownership of Produquimica, which should add between $0.15 and $0.20 to fourth quarter earnings. This estimate is prior to any additional step-up in valuation of their assets or inventories, or any gain or loss related to the revaluation of our initial equity investment. We’ve made no material changes to our outlook for the salt segment. What we provided in terms of a volume outlook reflects what we expect given the bid volume results, plus the fact that after mild winters, the calendarization of sales within a winter season typically shifts a little bit to the first quarter.

Our plant nutrition business appears to be stabilizing at current prices, although with the expected seasonal uptick in Wolf Trax micronutrient sales, the average selling price for the segment is likely to increase sequentially. This improved sales mix, the impact of higher volumes on per-unit costs, and lower SG&A is expected to provide a nice lift to plant nutrition segment operating margins in the fourth quarter of 2016. On Slide 12, we summarize these guidance elements. The primary drivers include expectations of a normal winter, which would push sales volumes ahead of 2015 fourth quarter results; lower highway deicing average selling prices and lower production volume pressuring operating margin; and sequential strengthening of plant nutrition sales volumes and average selling price. You’ll note there that our guidance on corporate items has been adjusted for the impact to Produquimica, but metrics for the base business are unchanged.

Before turning to the Q&A session, I’d like to recap the key points of the quarter. We’re poised and ready for winter after a solid bid season in which we believe we maintained our market share. We believe we have found bottom in our North American SOP business, and a combination of our lower prices and our actions to position us as a supplier of choice seem to be leading to reduced SOP inputs. And importantly, we are looking forward to a robust EBITDA contribution of R$60 million to R$70 million from Produquimica in the fourth quarter. With that, I will turn the call over to Karina, the operator.

Operator: Thank you. [Operator Instructions] And we’ll take our first question from Vincent Anderson with Stifel. Please go ahead.

Vincent Anderson: Yes, good morning. Thanks, guys.

Can you talk real quick about the performance of Wolf Trax in the quarter? It looked a little weak. And is there any synergy potential for maybe purchasing a blending facility? Or at what point, given the high selling expenses of that product, does it make sense in someone else’s portfolio?

Fran Malecha: This is Fran. I’m not sure where you’re kind of getting all that information from what we’ve issued here this morning. But my comments on Wolf Trax are that it is a unique product, differentiated in the market, and we are actually expecting year-over-year sales growth in the business through this year versus last year in a very difficult North American ag market. So from the time that we acquired the business back in mid-2014 to today, it hasn’t – I would say it hasn’t met our expectations, but we still believe it has the – and is exhibiting the traits that it had when we acquired it.

And as we move through the bottom of the cycle, we think it will perform well going forward. And combining it with the PDQ business and some of the products that are currently made in Brazil that we think we can introduce into the market here in North America will bolster that product line and give us some synergy. So we have no interest in acquiring blenders or getting involved in the retail side of the business. We want to continue to move this specialty fertilizer business towards a more differentiated, higher margin business. And we think Wolf Trax is an important piece of that, albeit a small piece of that for us today.

Vincent Anderson: All right, thanks. That’s helpful color. And then to shift over to PDQ – Produquimica, where do you see within – maybe starting with the capital structure, but if it’s not too early to talk about the rest of the income statement – where do you see the low-hanging fruit to maybe help that bottom line along?

Matthew Foulston: Yes, this is Matthew. You know, since we’ve taken full ownership in this, we’ve essentially had people on the ground – finance people down there working with the team pretty much full time. And one of the areas we want to look at is working capital, and specifically inventory, and see if there’s ways we can squeeze inventory out of that business, run it a little more efficiently from that perspective.

You know, with the overall objective here of continuing to grow that business at the kind of rates it’s demonstrated before, but by being self-funding and not sending any more money down into Brazil. So we got the team down there very focused on that kind of growth with those attributes. And I think inventory is going to be the area we spend most of our initial time.

Vincent Anderson: All right, thank you.

Operator: [Operator Instructions] And we’ll take our next question from Ivan Marcuse with KeyBanc.

Thank you.

Ivan Marcuse: Hi, thanks for taking my questions. In terms of the salt business, to get I guess the industry back to normal conditions, do you need an above-average winter? Or would an average winter suffice to get inventories and everything else back to normal, where we will have I guess a little less competitive bidding season as we go into next year?

Fran Malecha: Yes, Ivan, it’s Fran. We think that with a normal winter, average winter, in the year ahead here that it would pretty much bring us back to I think a average state of inventories. And that should bode well for pricing next summer.

We don’t require an extreme winter, but we will always take it.

Ivan Marcuse: Got you. And then in terms of PDQ, how much is this going to add to I guess your capital – your CapEx projections when you’re looking out to next year and beyond? And how much of a contributor to your free cash flow should PDQ be in 2017 in total?

Matthew Foulston: Yes, Ivan, this is Matthew. We think the CapEx requirements for this business are pretty modest here in the short-term. I think if you guys remember a chart we’ve shown before with the amount of excess capacity we’ve got to facilitate the growth, it’s significant across all the product categories.

So we’re thinking south of $10 million a year of CapEx that, that business is going to require.

Ivan Marcuse: Okay, thanks.

Matthew Foulston: And in terms of thinking about how to think about this business going forward, I know it’s been very complicated because we have 35% of their net income that we’re showing up. We’re now going to move in Q4 to a full accounting of the whole business. So what I thought I’d spell out a little bit here is how to think about this on a go-forward basis.

And if you just take 2016 EBITDA, first three quarters results plus where were guiding you, you get to about R$225 million. If you take off depreciation of R$40 million and what we think going forward will be a good estimate of local interest expense of another R$45 million, you get down to PBT of R$143 million, R$145 million. Once you tax effect that, the net income should be close to R$100 million. So from a U.S. net income perspective, we’re really thinking about this business of generating in the region of $30 million or $0.85 to $0.90 a share.

So again, that’s using this year’s revenue, and we know we’re hoping for more. But I think that will help you try and model this as you go forward, and I apologize for the opaqueness we’ve had this year just because of the way we had to account for it. And I think just one

other thing: when you think of the calendarization of this business, you know, it’s typically about 30% in the first half and 70% in the second. And of those respective quarters, Q2 is the biggest quarter in the first half and Q3 is the biggest in the second. So I think that’s what to expect from this business as we move forward, and obviously we are expecting higher EBITDA as we go into 2017.

Ivan Marcuse: Got it. And then real quick, I guess your corporate expense or other, whatever it’s called, it looks like you’re guiding for, just based on your guidance, sort of in that $17 million range for the fourth quarter, and then interest expense pops up to $15 million. Is that how to think about sort of the corporate expense going forward, and also the interest expense now that the debt is out there? Or is there some one-timers in there to think about, and when we go into 2017 it should be lower?

Matthew Foulston: Yes, I don’t think there’s anything from an interest expense that’s particularly odd. In fact, if I think about next year, I think of that in the range of $50 million to $55 million when you annualize it. And on the corporate expense, we’ve got some one-time costs associated with getting this deal done, but they are probably in the $2 million range and spread over Q3 and Q4.

So I don’t think there’s anything dramatic of a one-time nature.

Ivan Marcuse: Okay. So going forward, thinking that $16 million – I guess $15 million to $16 million range per quarter?

Matthew Foulston: I think that’s possibly a smidgen high.

Ivan Marcuse: Got it. All right, thank you.

Operator: And we’ll take our next question from Chris Parkinson with Credit Suisse.

Graham Wells: Hi, good morning, everyone. This is Graham Wells on for Chris; thanks for taking the questions. I was just wondering if you guys could talk a little bit about how you’re kind of seeing growth for Produquimica in their plant nutrition business versus their chemical business. And also whether in the time that you’ve had people on the ground, whether strategically you’ve seen any opportunities to potentially change some of the things strategically they are doing in that market.

Fran Malecha: This is Fran. I think both those businesses have been growing and we would expect them to continue to grow. The specialty chemical business and water treatment business down there, it’s consistent, it’s consistent growth, and is a nice balance against the ag business, which is more seasonal – not surprising. So we think they fit together and there’s some operating synergy between the two in terms of where the products are made at plant location. So it’s a nice mix of business and a good fit together.

I would say the strategies that are in place are strong, and we expect them to continue to drive growth. And then I might just comment that on the ag business, on the specialty fertilizer business, Produquimica’s been on a path over the last five years to seven years of differentiating themselves in the market with products. So investing in innovative and new products and follow-on products, a broad product line they deliver to the market. And given the weak soil profile in Brazil, the need for these nutrients and the capability of the specialty fertilizer products, and the strong profitability for growers down there, despite difficult credit conditions, continue to drive growth as a strategy that we’d like to see continue. And I think the business is very well managed, managing credit into the market very well.

So a strong management team that was in place and that remains there and in place going forward, along with people that we have down on the ground and we’ll continue to manage the business well going forward.

Graham Wells: Excellent; thanks for all of that color. And then just a quick follow-up, on the SOP side here in North America, you guys mentioned that you’re seeing a bottom, or you believe we are kind of approaching a bottom in that market. I’m just kind of wondering how you are thinking about SOP pricing relative to MOP indexes as we head into next year. And then also, any added color you can contribute to what we’ve really seen on the import side that’s driven that reduction in imports would be greatly appreciated.

Thank you.

Fran Malecha: Sure. I think we do believe the market has bottomed here, and we’re gaining some momentum in the fall. We hope that continues into the spring in next year. It’s hard to predict what’s going to happen with MOP pricing, but recently over the course of the last quarter it appears to be slightly positive, or at least prices haven’t gone lower.

So we think that bodes well for looking into 2017. And in terms of the spread that we have between the two products, SOP and MOP, I think it’s really a function of what crops we’re looking at, where that demand is, chloride sensitivity, non-chloride sensitivity. And as the price of MOP moves, I would expect in some cases that we would be adjusting our prices higher. Other cases, maybe not, and competing to bring back more of that non-chloride sensitive demand that we think we’ve lost over the course of the last year, year and a half. So we’re certainly managing the business that way and focused on our customers and primarily focused on building a better demand base as we go forward in the chloride-sensitive crops.

Graham Wells: Great. Thank you so much.

Fran Malecha: You’re welcome.

Operator: And we’ll take our next question from Joel Jackson with BMO Capital Markets.

Joel Jackson: Hi, good morning.

So I know the preseason was tough for highway deicing in Q3 because of the mild winter last year. What’s the drag into Q4 on preseason sales, I guess in October? So if you had a normal winter in Q4, how much will you be lacking in sales early in the quarter just because of the high inventories among customer?

Fran Malecha: Go ahead Matthew.

Matthew Foulston: I was just going to say, Joel, I think most of that reset impact, if you like, we think we’ve seen in Q3 with a much lower pre-fill. And clearly Q3 for us was down significantly year-over-year and down but way below average. So our hope going into the year is that we’ve got Q4 and Q1 set up around the commitments that we’ve won and our normal percentage of those commitments that find their way to market.

And we have skewed that a little bit in favor of Q1, ever so slightly, because that tends to happen coming off a weak winter. So we feel that calendarization looks pretty decent right now, assuming we have average winter.

Joel Jackson: Okay, that’s helpful. And then my second question would be there’s been some press this week. And you’ve talked about this before, but can you give us sort of an update on some of the issue with the water levels, the causeway at Ogden or Great Salt Lake? And how that might impact some of the pond-based SOP production you might be able to achieve next year and the year coming up, just maybe some of the challenges there? Thanks.

Fran Malecha: Sure. First off, in terms of our production for 2017, this really won’t impact it at all. In fact, we’ve had a – I would call a strong evaporation season this year in Ogden, and are set up well with the harvest of that evaporation season to produce SOP next year to our plan. So this is probably more of a longer-term issue as I would think about it, although there’s a short-term component to it in the breaching of the causeway that the UP railway has been dealing with over the last couple of years. So it’s something – that breaching is something that all stakeholders had previously agreed to.

So we continue to work hard with the representatives in Utah, the stakeholders, to make sure that plan is adhered to. And it was delayed here over the last month or so, and that was a bit of a surprise to us. And I think what – some of the press that you’ve seen the last few days is just a caution to the market that we have invested in our ponds. We’ve invested in the last couple years over $100 million into our plant, both in terms of expansion and improvement capital, to make sure that asset can perform well in the future. And it’s incumbent on I think the stakeholders to understand that.

And that this causeway will be breached and that will at least give us some short-term relief on the conditions that have been caused by just some low snowpacks over the last number of years out there. But if you look back over history and over time, that snowpack comes and goes. The lake recharges and evaporates down over a longer period of time. So we are at low levels, but levels that we think can certainly be remedied with just the normal weather cycle over time. So we’ll watch that closely.

And if the lake doesn’t rebound and continues to decline, there’s some additional capital, small amounts of capital that we can put in to extend our reach into the lake and continue to produce well into the future. So I think that kind of summarizes maybe what you’ve seen in the press over the last couple of months. In the last maybe few weeks, it’s been a little more heightened as we get closer to what we believe the breach will happen and at least kind of bring that north arm up to better balance against the south arm in the short-term.

Joel Jackson: What would be sort of worst-case capital investment required?

Fran Malecha: I think, Joel, worst case, we would see somewhere in the probably $8 million to $10 million over a couple of years out there.

Joel Jackson: Okay.

Thank you very much.

Operator: [Operator Instructions] And we’ll take our next question from Robert Koort with Goldman Sachs.

Ryan Berney: Good morning. This is Ryan Berney on for Bob. I was hoping that you – and I apologize if this question has sort of already been answered in a different way.

But just a little bit curious on the full year salt volume guidance. Seems like maybe you raised it a tick and curious if that had anything to do with – obviously the September numbers are in, but if there was anything in the early order book in October that maybe was part of the decision to tick that up slightly.

Fran Malecha: I think as Matthew described it, it’s really just looking at kind of a normal winter against the commitments that we’ve put in place. And he also mentioned that if you compare it to last year, we just had a lower amount of early fill and that impacted the third quarter. But with average winter weather in the fourth quarter, we’d expect to hit those volumes that we are guiding to.

Ryan Berney: Okay, great, thanks. And then secondarily, on the cost-cutting program, I think last quarter you’d announced a program and you alluded to it a little bit earlier in your prepared remarks. But just curious what kind of overall EBITDA contribution or kind of putting some brackets around how much you expect kind of the cost-cutting specific piece of the earnings growth for next year.

Matthew Foulston: I think this actually goes back a number of quarters. I think we were back in the first quarter when we recorded a charge of $3.2 million, $3.4 million, something like that, for restructuring, which had a couple of components to it.

One was the headcount related to transitioning to continuous mining, which will come towards the end of 2017. And then the other piece of it was a general approach to cutting costs in corporate management and really across the company. Some things like centralizing accounts payable and taking advantage of efficiencies, broader spans in control, and things like that. So we have been realizing the impact of that progressively as we’ve been going through 2016. I don’t think there will be an enormous kick up if you look at 2017 run rate versus 2016.

The biggest thing ahead of us in cost and covered by that will be when we take that step function improvement in Goderich, which won’t just be personnel related. It will be hardware related, it will be fuel related, it will be efficiency, single handling instead of double handling. And that’s going to kick in to the tune of close to $30 million in 2018.

Ryan Berney: Great. Thank you very much, Matthew.

Operator: And we’ll take our next question from Chris Shaw with Monness, Crespi. Please go ahead.

Chris Shaw: Yes. Good morning, everyone. How are you doing? I just want to clarify your guidance comment for the plant nutrition business on the pricing side.

I know you have it up sequentially in the fourth quarter, but is that strictly just the seasonal mix in Wolf Trax? And should I understand that SOP pricing is basically flat in your model?

Matthew Foulston: Yes, that is exclusively the impact of the increased mix of Wolf Trax. As you know, it has a very different selling price point, and Q4 is a big – the biggest quarter for us. So that’s what you’re seeing coming through there. We’re not planning any adjustments on the other side of the business as we go into Q4.

Chris Shaw: Seriously, in a typical plant nutrition fourth quarter, what’s the mix between Wolf Trax and SOP approximately?

Matthew Foulston: I don’t think we’ve talked about that mix in – but I think if you go back over time, you can see this seasonal impact sequentially Q3 to Q4 has been a feature of the business for the last couple of years.

So I think you can look at that uptick and then look at what we talked about for SOP and get to that piece of it.

Chris Shaw: All right, thanks. That’s helpful. And then on the salt side, typically when do your customers – the highway customers do their pre-season fills? Is it mostly in the third quarter, or is it mostly in the fourth, or is it split between the two?

Fran Malecha: It’s a split between the two, I think historically. And probably it’s really a September or October timeframe as they come out of their summer highway programs, road repair, that type of thing, and start looking to the winter to fill sheds and that type of thing.

So it’s hard to say what that exact split would be; every year is a bit different, but typically you’d see some in the third, some in the fourth.

Chris Shaw: I’m trying to understand, then, sort of the guidance you have. I guess the full year guidance for salt volume sort of implies volume growth in the fourth quarter, and I assume some of that would be highway. So is that just based on average winter weather or is there something there I’m missing in terms of timing or…

Fran Malecha: As we said earlier, it’s based on average winter weather and the commitments that we had in place.

Chris Shaw: Okay, great.

Thanks so much.

Operator: And there are no further questions at this time. I would like to turn the conference back over to Theresa Womble for any additional or closing remarks.

Theresa Womble: Thank you, Karina. And we appreciate everyone’s interest today in Compass Minerals.

Please feel free to contact the Investor Relations department with any additional follow-up questions. You can find our contact information on the Compass Minerals website under Investor Relations. Have a great day.