The most recent trading session ended with Mosaic (MOS) standing at $30.35, reflecting a +1.4% shift from the previouse trading day's closing. The stock outperformed the S&P 500, which registered a daily gain of 0.23%. At the same time, the Dow added 0.37%, and the tech-heavy Nasdaq gained 0.07%.The fertilizer maker's shares have seen a decrease of 15.43% over the last month, not keeping up with the Basic Materials sector's loss of 6.52% and the S&P 500's gain of 5.3%.Analysts and investors alike will be ke ...

The most recent trading session ended with Mosaic (MOS) standing at $31.96, reflecting a -0.78% shift from the previouse trading day's closing. The stock fell short of the S&P 500, which registered a gain of 0.08% for the day. Elsewhere, the Dow saw a downswing of 0.26%, while the tech-heavy Nasdaq appreciated by 0.36%.Prior to today's trading, shares of the fertilizer maker had lost 11.54% over the past month. This has lagged the Basic Materials sector's loss of 6.84% and the S&P 500's gain of 2.4% in that ...

Financial Data and Key Metrics Changes - The company expects total capital expenditures (CapEx) to decrease by up to $200 million in 2024 compared to 2023, which is projected to be a high watermark for capital spending [10][22] - Year-to-date, the company has returned nearly $900 million to shareholders through buybacks and dividends, including $150 million of repurchases in the third quarter [22] Business Line Data and Key Metrics Changes - In potash, the company expects fourth quarter sales volumes of 2.4 million to 2.6 million tonnes, with netback prices at the mine ranging from $235 to $260 per tonne [19] - In phosphates, fourth quarter sales volumes are expected to be in the range of 1.6 million to 1.8 million tonnes, with prices at the plant gate between $530 and $580 per tonne [20] - The Fertilizantes segment in Brazil reported strong third quarter results, with over 90% of fourth quarter sales volume already committed and priced, expecting margins to increase to $40 to $50 per tonne [21] Market Data and Key Metrics Changes - Global stock-to-use ratios for grain and oilseeds remain near historic lows, indicating that crop supply is struggling to keep up with demand [12] - In Brazil, total fertilizer shipments are expected to reach 43 million to 44 million tonnes for the full year, marking the second highest total in history [17] - In India, phosphate inventory levels are near the low end of the recent five-year range, suggesting strong demand and potential for higher shipments [18] Company Strategy and Development Direction - The company is focusing on expanding its portfolio of value-added specialty fertilizers and optimizing its potash production facilities [8] - Investments are being made in non-commodity value-added agricultural products, including purified phosphoric acid for lithium iron phosphate battery production [9] - The company aims to continue returning excess cash to shareholders while maintaining a strong balance sheet [10][22] Management's Comments on Operating Environment and Future Outlook - The management highlighted that food security is a major concern globally, with crop production constrained by weather conditions and geopolitical issues [12] - Despite reduced production levels, global demand remains strong, particularly from China and India, which are importing record levels of agricultural products [13] - The company anticipates elevated crop prices to persist through 2024, driving demand for fertilizers [14] Other Important Information - The company is undergoing a leadership transition, with Bruce Bodine set to become the new CEO starting January 1, 2024 [6][7] - The management emphasized the importance of proper fertilization to maximize crop yields, noting a clear relationship between nutrient application and yield performance [60] Q&A Session Summary Question: Recent rulings regarding countervailing duty petitions - The Department of Commerce raised duties on Russian products but lowered duties on Moroccan supply, affecting trade flows but not overall supply and demand dynamics [25][26] Question: Differentiation of Mosaic's business in Brazil - Mosaic effectively managed destocking in the first half of 2023, leading to stabilized prices and expected margins of $40 to $50 per tonne in the fourth quarter [28][29] Question: Outlook for the potash market - Demand for potash is expected to rebound, with a forecasted recovery of 5 million tonnes in 2024, driven by strong application rates in North America and Brazil [32][33] Question: Potash production levels for next year - The company expects to maintain similar production levels next year, with potential for slight increases depending on market demand [43][44] Question: Impact of Janssen's second phase on the potash industry - The ramp-up of Janssen's production is not expected to significantly impact the market until 2030, allowing for gradual absorption of additional supply [68] Question: Phosphate shipment forecast - The company anticipates an increase of 2 million to 3 million tonnes in phosphate shipments next year, with a tight market outlook [72]

Financial Performance - Q3 2023 - Consolidated net revenues were $3.548 billion[5] - The company reported a net loss of $4 million[5] - Adjusted EBITDA was $594 million[5] - Mosaic Fertilizantes reported net revenues of $1.731 billion[5] Segment Performance - Phosphate segment net revenues were $986 million with an adjusted EBITDA of $201 million[5] - Potash segment net revenues were $720 million with an adjusted EBITDA of $267 million[5] - Mosaic Fertilizantes segment net revenues were $1.731 billion with an adjusted EBITDA of $147 million[5] Outlook and Strategy - The company expects capital expenditures of $1.3 to $1.4 billion in 2023, including approximately $500 million in growth investments[35] - The company is targeting $150 million in cost savings through optimization initiatives[40] - The company expects to refinance $900 million of long-term debt that matures this year[35]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and related notes for the reported interim periods [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, including statements of earnings, comprehensive income, balance sheets, cash flows, and equity, along with detailed notes explaining accounting policies, financial data, and specific accounts. It provides a foundational overview of the company's financial performance and position for the reported periods [Condensed Consolidated Statements of Earnings (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20%28Loss%29) This statement details the company's revenues, expenses, and net income or loss over specific interim periods **Net Sales:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 3,548.3 | 5,348.5 | (1,800.2) | (34)% | | Nine months ended Sep 30 | 10,546.6 | 14,643.9 | (4,097.3) | (28)% | **Gross Margin:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 409.6 | 1,502.0 | (1,092.4) | (73)% | | Nine months ended Sep 30 | 1,651.1 | 4,787.4 | (3,136.3) | (66)% | **Net (Loss) Earnings attributable to Mosaic:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | | :------------------- | :------------------ | :------------------ | :-------------------- | | Three months ended Sep 30 | (4.2) | 841.7 | (845.9) | | Nine months ended Sep 30 | 799.6 | 3,059.6 | (2,260.0) | **Diluted Net (Loss) Earnings per share attributable to Mosaic:** | Period | 2023 (USD) | 2022 (USD) | Change (USD) | | :------------------- | :--------- | :--------- | :----------- | | Three months ended Sep 30 | (0.01) | 2.42 | (2.43) | | Nine months ended Sep 30 | 2.39 | 8.50 | (6.11) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This statement presents the net income or loss and other comprehensive income items, reflecting changes in equity from non-owner sources **Comprehensive (Loss) Income attributable to Mosaic:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | | :------------------- | :------------------ | :------------------ | | Three months ended Sep 30 | (142.5) | 448.0 | | Nine months ended Sep 30 | 842.3 | 2,670.6 | **Foreign currency translation (loss) gain:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | | :------------------- | :------------------ | :------------------ | | Three months ended Sep 30 | (153.3) | (375.4) | | Nine months ended Sep 30 | 22.1 | (345.4) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time **Total Assets:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | 22,654.4 | | December 31, 2022 | 23,386.0 | **Total Current Assets:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | 5,156.8 | | December 31, 2022 | 6,556.6 | **Total Current Liabilities:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | 4,696.3 | | December 31, 2022 | 5,533.8 | **Total Equity:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | 12,207.1 | | December 31, 2022 | 12,194.2 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities for the reported interim periods **Net Cash Provided by Operating Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | 1,869.1 | 2,980.1 | (1,111.0) | (37)% | **Net Cash Used in Investing Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | (955.0) | (916.5) | (38.5) | 4% | **Net Cash Used in Financing Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | (1,069.8) | (2,105.7) | 1,035.9 | (49)% | **Net Change in Cash, Cash Equivalents and Restricted Cash:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | | :------------------- | :------------------ | :------------------ | | Nine months ended Sep 30 | (152.3) | (63.8) | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This statement outlines changes in the company's equity accounts, including retained earnings and accumulated other comprehensive income **Total Mosaic Stockholders' Equity:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | 12,050.3 | | December 31, 2022 | 12,054.6 | **Share Repurchases (Nine months ended Sep 30):** | Year | Amount (Millions USD) | | :--- | :-------------------- | | 2023 | (603.0) | | 2022 | (1,609.2) | **Cash Dividends Paid (Nine months ended Sep 30):** | Year | Amount (Millions USD) | | :--- | :-------------------- | | 2023 | (216.7) | | 2022 | (106.3) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Nature of Business](index=9&type=section&id=1.%20Organization%20and%20Nature%20of%20Business) This note describes the company's primary business activities and its operational segment structure - The Mosaic Company produces and markets concentrated phosphate and potash crop nutrients through wholly and majority-owned subsidiaries and joint ventures[24](index=24&type=chunk) - The company is organized into three business segments: Phosphate, Potash, and Mosaic Fertilizantes, with intersegment eliminations and other results included in Corporate, Eliminations and Other[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles, estimates, and assumptions used in preparing the financial statements - The unaudited Condensed Consolidated Financial Statements are prepared on the accrual basis of accounting in accordance with SEC requirements for interim financial reporting and GAAP[26](index=26&type=chunk) - Management makes significant estimates and assumptions, particularly regarding fair value of acquired assets, recoverability of non-current assets (including goodwill), useful lives, environmental and reclamation liabilities, and income tax accounts[28](index=28&type=chunk) - Interim results are not necessarily indicative of full fiscal year results due to seasonality and other factors[26](index=26&type=chunk) [3. Recently Issued Accounting Guidance](index=10&type=section&id=3.%20Recently%20Issued%20Accounting%20Guidance) This note details the impact of newly adopted accounting standards on the company's financial reporting - The company adopted new FASB guidance on supplier financing programs as of January 1, 2023, which did not impact its balance sheet presentation or footnote disclosures[29](index=29&type=chunk) [4. Other Financial Statement Data](index=11&type=section&id=4.%20Other%20Financial%20Statement%20Data) This note provides supplementary details for various current assets and accrued liabilities **Other Current Assets:** | Item | Sep 30, 2023 (Millions USD) | Dec 31, 2022 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Income and other taxes receivable | 385.4 | 189.4 | | Prepaid expenses | 295.4 | 237.4 | | Assets held for sale | — | 101.9 | | Other | 32.6 | 49.5 | | **Total** | **713.4** | **578.2** | **Accrued Liabilities:** | Item | Sep 30, 2023 (Millions USD) | Dec 31, 2022 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Accrued dividends | 3.2 | 72.9 | | Payroll and employee benefits | 172.3 | 237.0 | | Asset retirement obligations | 392.1 | 212.3 | | Customer prepayments | 415.7 | 743.9 | | Accrued income and other taxes | 143.6 | 208.3 | | Operating lease obligation | 57.9 | 50.7 | | Other | 550.8 | 754.8 | | **Total** | **1,735.6** | **2,279.9** | [5. Earnings Per Share](index=12&type=section&id=5.%20Earnings%20Per%20Share) This note presents the basic and diluted earnings per share calculations for the reported periods **Basic Net (Loss) Earnings per share attributable to Mosaic:** | Period | 2023 (USD) | 2022 (USD) | | :------------------- | :--------- | :--------- | | Three months ended Sep 30 | (0.01) | 2.45 | | Nine months ended Sep 30 | 2.40 | 8.58 | **Diluted Net (Loss) Earnings per share attributable to Mosaic:** | Period | 2023 (USD) | 2022 (USD) | | :------------------- | :--------- | :--------- | | Three months ended Sep 30 | (0.01) | 2.42 | | Nine months ended Sep 30 | 2.39 | 8.50 | - **0.6 million** and **0.4 million shares** for the three and nine months ended September 30, 2023, respectively, were excluded from the diluted EPS calculation because their effect would have been anti-dilutive[34](index=34&type=chunk) [6. Inventories](index=12&type=section&id=6.%20Inventories) This note provides a breakdown of the company's inventory components at specific balance sheet dates **Inventories:** | Item | Sep 30, 2023 (Millions USD) | Dec 31, 2022 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Raw materials | 113.8 | 177.2 | | Work in process | 865.8 | 844.8 | | Finished goods | 1,229.5 | 2,158.3 | | Final price deferred | 49.4 | 184.2 | | Operating materials and supplies | 194.7 | 178.6 | | **Total** | **2,453.2** | **3,543.1** | [7. Goodwill](index=12&type=section&id=7.%20Goodwill) This note discusses the company's goodwill balance and its annual impairment assessment process - Goodwill remained stable at **$1.1 billion** as of September 30, 2023, and December 31, 2022[36](index=36&type=chunk) - The company performs its annual goodwill impairment analysis in October and is currently assessing projections for its Mosaic Fertilizantes reporting unit, which could potentially lead to a future impairment charge[37](index=37&type=chunk) [8. Marketable Securities Held in Trusts](index=13&type=section&id=8.%20Marketable%20Securities%20Held%20in%20Trusts) This note describes the investments held in RCRA Trusts for environmental assurance and their fair value classification - Mosaic deposited **$630 million** into two RCRA Trusts in August 2016 to provide financial assurance for estimated Gypstack Closure Costs in Florida and Louisiana[38](index=38&type=chunk) - The RCRA Trusts hold investments in marketable debt securities classified as available-for-sale, carried at fair value, with unrealized gains and losses included in other comprehensive income[39](index=39&type=chunk) **Fair Value of Investments in RCRA Trusts (September 30, 2023):** | Category | Fair Value (Millions USD) | | :-------------------- | :------------------------ | | Cash and cash equivalents | (0.2) | | Corporate debt securities | 189.7 | | Municipal bonds | 196.4 | | U.S. government bonds | 263.1 | | **Total** | **649.0** | [9. Financing Arrangements](index=15&type=section&id=9.%20Financing%20Arrangements) This note details the company's various financing activities, including inventory financing, receivable purchasing, and debt facilities - The company has an inventory financing arrangement with no outstanding balance as of September 30, 2023[47](index=47&type=chunk) - Under a Receivable Purchasing Agreement, Mosaic sold approximately **$1.2 billion** of accounts receivable during the nine months ended September 30, 2023[49](index=49&type=chunk) - Structured accounts payable arrangements totaled **$600.6 million** as of September 30, 2023, and the company had **$299.6 million** outstanding under its commercial paper program[50](index=50&type=chunk)[51](index=51&type=chunk) - A **$700 million** 10-year senior unsecured term loan facility was entered into in May 2023, with no amounts drawn as of September 30, 2023[52](index=52&type=chunk) [10. Asset Retirement Obligations](index=16&type=section&id=10.%20Asset%20Retirement%20Obligations) This note explains the recognition and reconciliation of asset retirement obligations, primarily for environmental liabilities - Asset Retirement Obligations (AROs) are recognized at fair value when a legal obligation exists, with a corresponding increase in the related long-lived asset's carrying amount[53](index=53&type=chunk) **Reconciliation of AROs:** | (in millions) | September 30, 2023 | December 31, 2022 | | :-------------------------- | :------------------- | :------------------ | | AROs, beginning of period | 1,905.6 | 1,749.3 | | Liabilities incurred | 15.2 | 14.9 | | Liabilities settled | (147.5) | (205.6) | | Accretion expense | 70.0 | 81.6 | | Revisions in estimated cash flows | 293.7 | 264.5 | | Foreign currency translation | 9.2 | 0.9 | | **AROs, end of period** | **2,146.2** | **1,905.6** | | Less current portion | 392.1 | 212.3 | | **Non-current portion of AROs** | **1,754.1** | **1,693.3** | - A majority of AROs relate to Gypstack Closure Costs in Florida and Louisiana, with the undiscounted amount for facilities covered by the 2015 Consent Decrees approximately **$2.1 billion** as of December 31, 2022[57](index=57&type=chunk)[60](index=60&type=chunk) [11. Income Taxes](index=18&type=section&id=11.%20Income%20Taxes) This note provides information on the company's effective tax rates and unrecognized tax benefits **Effective Tax Rate:** | Period | 2023 | 2022 | | :------------------- | :--- | :--- | | Three months ended Sep 30 | 31.7% | 26.1% | | Nine months ended Sep 30 | 22.0% | 25.7% | - Gross unrecognized tax benefits increased by **$0.1 million** to **$25.5 million** during the nine months ended September 30, 2023[64](index=64&type=chunk) - Discrete tax items provided a benefit of approximately **$41.1 million** for the nine months ended September 30, 2023, primarily from the true-up of U.S. and Canada tax return provisions and share-based excess benefits[68](index=68&type=chunk) [12. Derivative Instruments and Hedging Activities](index=19&type=section&id=12.%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes the company's use of derivative instruments to manage foreign currency, interest rate, and commodity price risks - The company uses derivatives to mitigate exposure to foreign currency, interest rate, and commodity price risks, but does not apply hedge accounting to foreign currency, commodity, or freight contracts[69](index=69&type=chunk)[70](index=70&type=chunk) **Derivative Instruments Position (Millions USD):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Gross asset position | 9.5 | 38.8 | | Gross liability position | 31.1 | 50.1 | **Total Absolute Notional Volume of Outstanding Derivative Instruments (Sep 30, 2023):** | Derivative Category | Unit of Measure | Notional Volume (Millions) | | :------------------ | :-------------- | :------------------------- | | Foreign currency | US Dollars | 2,577.6 | | Natural gas | MMbtu | 16.4 | [13. Fair Value Measurements](index=20&type=section&id=13.%20Fair%20Value%20Measurements) This note outlines the fair value hierarchy and measurement techniques applied to the company's financial instruments - Foreign currency and commodity derivatives are primarily classified as **Level 2** in the fair value hierarchy, while interest rate derivatives were not held as of September 30, 2023[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - The carrying amounts of cash and cash equivalents, accounts receivables, accounts payable, structured accounts payable arrangements, and short-term debt approximate fair value due to their short-term maturity[79](index=79&type=chunk) - The fair value of long-term debt is estimated using quoted market prices, classified as **Level 1** and **Level 2**[79](index=79&type=chunk) [14. Share Repurchases](index=21&type=section&id=14.%20Share%20Repurchases) This note details the company's share repurchase programs and the shares bought back during the period - The Board of Directors approved two share repurchase programs totaling **$3.0 billion** in 2022, with no set expiration date[80](index=80&type=chunk) - In February 2023, the company entered into a **$300 million** accelerated share repurchase agreement, resulting in the repurchase of **5,624,574 shares** at an average price of **$53.34 per share**[81](index=81&type=chunk) **Shares Repurchased (Nine months ended Sep 30, 2023):** | Item | Quantity | Amount (Millions USD) | | :-------------------------- | :--------- | :-------------------- | | Common Stock repurchased | 12,639,719 | 598.0 | [15. Accumulated Other Comprehensive Income (Loss) ("AOCI")](index=22&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Income%20%28Loss%29%20%28%22AOCI%22%29) This note provides a breakdown of the components of accumulated other comprehensive income attributable to Mosaic **AOCI Attributable to Mosaic:** | Date | Amount (Millions USD) | | :---------------- | :-------------------- | | September 30, 2023 | (2,109.5) | | December 31, 2022 | (2,152.2) | - Foreign currency translation gain (loss) was **$(153.3) million** for the three months and **$22.1 million** for the nine months ended September 30, 2023[86](index=86&type=chunk) [16. Related Party Transactions](index=23&type=section&id=16.%20Related%20Party%20Transactions) This note discloses transactions and balances with related parties, including sales and cost of goods sold - The net amount due to non-consolidated companies increased to **$89.6 million** as of September 30, 2023, from **$56.8 million** at December 31, 2022[87](index=87&type=chunk) **Transactions with Related Parties:** | Item | Period | 2023 (Millions USD) | 2022 (Millions USD) | | :------------------------------------------ | :------------------- | :------------------ | :------------------ | | Included in net sales | Three months ended Sep 30 | 218.5 | 965.0 | | Included in net sales | Nine months ended Sep 30 | 979.0 | 2,378.0 | | Included in cost of goods sold | Three months ended Sep 30 | 257.7 | 1,198.8 | | Included in cost of goods sold | Nine months ended Sep 30 | 1,122.9 | 2,668.2 | - Marketing fees from the MWSPC joint venture were **$3.6 million** and **$7.5 million** for the three and nine months ended September 30, 2023, respectively[88](index=88&type=chunk) [17. Contingencies](index=23&type=section&id=17.%20Contingencies) This note outlines the company's environmental accruals and potential legal and tax liabilities in various jurisdictions - Environmental accruals were **$144.2 million** as of September 30, 2023, down from **$185.5 million** at December 31, 2022[90](index=90&type=chunk) - A reserve of **$36.3 million** has been established for estimated repairs at the New Wales Phase II East Stack[92](index=92&type=chunk) - For Brazil legal contingencies, the estimated probable aggregate loss is approximately **$76.8 million** (maximum potential liability of **$695.4 million**), and for Brazil tax contingencies, the maximum potential liability is approximately **$606.9 million**, with **$215.1 million** subject to an indemnification agreement[98](index=98&type=chunk)[100](index=100&type=chunk) [18. Business Segments](index=25&type=section&id=18.%20Business%20Segments) This note presents financial data disaggregated by the company's Phosphate, Potash, and Mosaic Fertilizantes business segments **Segment Net Sales (Three months ended Sep 30, 2023):** | Segment | Net Sales (Millions USD) | | :-------------------------- | :----------------------- | | Phosphate | 986.4 | | Potash | 719.9 | | Mosaic Fertilizantes | 1,730.6 | | Corporate, Eliminations and Other | 111.4 | | **Total** | **3,548.3** | **Segment Operating Earnings (Loss) (Three months ended Sep 30, 2023):** | Segment | Operating Earnings (Loss) (Millions USD) | | :-------------------------- | :--------------------------------------- | | Phosphate | (57.5) | | Potash | 200.0 | | Mosaic Fertilizantes | 77.3 | | Corporate, Eliminations and Other | (74.0) | | **Total** | **145.8** | **Total Assets by Segment (As of Sep 30, 2023):** | Segment | Total Assets (Millions USD) | | :-------------------------- | :-------------------------- | | Phosphate | 9,460.0 | | Potash | 9,622.7 | | Mosaic Fertilizantes | 4,976.4 | | Corporate, Eliminations and Other | (1,404.7) | | **Total** | **22,654.4** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance, condition, and results of operations for the three and nine months ended September 30, 2023. It details key drivers behind changes in revenue, gross margin, and operating earnings across business segments, as well as liquidity, capital resources, and significant accounting estimates [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section analyzes the key factors influencing the company's net sales, operating earnings, and overall financial performance **Net (Loss) Earnings attributable to Mosaic:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | | :------------------- | :------------------ | :------------------ | | Three months ended Sep 30 | (4.2) | 841.7 | - Net sales decreased **34%** for the three months and **28%** for the nine months ended September 30, 2023, primarily driven by lower average selling prices across all segments[112](index=112&type=chunk)[113](index=113&type=chunk) - Operating earnings decreased **87%** for the three months and **74%** for the nine months ended September 30, 2023[112](index=112&type=chunk) - Global markets softened due to a rebound in supply and buyers delaying purchases, though seasonal price strength was observed later in the period[115](index=115&type=chunk) - The company repurchased **3,948,783 shares** of Common Stock for approximately **$150.0 million** during the three months ended September 30, 2023[121](index=121&type=chunk) - Countervailing Duty (CVD) orders on phosphate fertilizers from Morocco and Russia remain in place, with new subsidy rates announced in November 2023 (OCP **2.12%**, PhosAgro **28.50%**)[118](index=118&type=chunk)[121](index=121&type=chunk) [Phosphate Net Sales and Gross Margin](index=32&type=section&id=Phosphate%20Net%20Sales%20and%20Gross%20Margin) This section details the sales performance and profitability of the Phosphate segment, including pricing, volumes, and cost impacts **Net Sales:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 986.4 | 1,577.6 | (591.2) | (37)% | | Nine months ended Sep 30 | 3,654.2 | 4,874.5 | (1,220.3) | (25)% | **Gross Margin:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 87.5 | 357.9 | (270.4) | (76)% | | Nine months ended Sep 30 | 563.0 | 1,527.2 | (964.2) | (63)% | **Average Finished Product Selling Price (destination):** | Period | 2023 (USD/tonne) | 2022 (USD/tonne) | Change (USD/tonne) | Percent Change | | :------------------- | :--------------- | :--------------- | :----------------- | :------------- | | Three months ended Sep 30 | 569 | 924 | (355) | (38)% | | Nine months ended Sep 30 | 642 | 950 | (308) | (32)% | **Sales Volumes (Finished Products in thousands of metric tonnes):** | Period | 2023 | 2022 | Change | Percent Change | | :------------------- | :--- | :--- | :----- | :------------- | | Three months ended Sep 30 | 1,651 | 1,651 | 0 | 0% | | Nine months ended Sep 30 | 5,409 | 4,987 | 422 | 8% | - Lower raw material costs, primarily sulfur (down **64%** for Q3) and ammonia (down **47%** for Q3), favorably impacted gross margin[129](index=129&type=chunk)[130](index=130&type=chunk) - North America phosphate rock production decreased due to geology of rock and operational challenges, and the operating rate for processed phosphate production decreased to **64%** for Q3 2023 due to an equipment failure at Faustina, Louisiana[131](index=131&type=chunk)[132](index=132&type=chunk)[137](index=137&type=chunk) [Potash Net Sales and Gross Margin](index=34&type=section&id=Potash%20Net%20Sales%20and%20Gross%20Margin) This section analyzes the sales and gross margin trends for the Potash segment, considering pricing, volumes, and operational costs **Net Sales:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 719.9 | 1,432.1 | (712.2) | (50)% | | Nine months ended Sep 30 | 2,475.2 | 4,072.1 | (1,596.9) | (39)% | **Gross Margin:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 210.4 | 798.7 | (588.3) | (74)% | | Nine months ended Sep 30 | 959.7 | 2,305.2 | (1,345.5) | (58)% | **Average Finished Product Selling Price (destination):** | Period | 2023 (USD/tonne) | 2022 (USD/tonne) | Change (USD/tonne) | Percent Change | | :------------------- | :--------------- | :--------------- | :----------------- | :------------- | | Three months ended Sep 30 | 324 | 669 | (345) | (52)% | | Nine months ended Sep 30 | 393 | 653 | (260) | (40)% | **Total Potash Segment Tonnes (in thousands of metric tonnes):** | Period | 2023 | 2022 | Change | Percent Change | | :------------------- | :--- | :--- | :----- | :------------- | | Three months ended Sep 30 | 2,220 | 2,142 | 78 | 4% | | Nine months ended Sep 30 | 6,293 | 6,238 | 55 | 1% | - Gross margin was unfavorably impacted by higher idle and turnaround costs, particularly due to the timing of the turnaround at Esterhazy, Saskatchewan mine and the temporary idling of the Colonsay mine in the first half of the year[142](index=142&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) - Canadian resource taxes and royalties decreased significantly, favorably impacting gross margin by **$195 million** for Q3 2023 and **$437 million** for YTD Q3 2023[142](index=142&type=chunk)[143](index=143&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Mosaic Fertilizantes Net Sales and Gross Margin](index=36&type=section&id=Mosaic%20Fertilizantes%20Net%20Sales%20and%20Gross%20Margin) This section reviews the sales and gross margin performance of the Mosaic Fertilizantes segment, including pricing, volumes, and cost drivers **Net Sales:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 1,730.6 | 2,628.7 | (898.1) | (34)% | | Nine months ended Sep 30 | 4,492.7 | 6,377.0 | (1,884.3) | (30)% | **Gross Margin:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 106.1 | 348.3 | (242.2) | (70)% | | Nine months ended Sep 30 | 117.8 | 1,017.8 | (900.0) | (88)% | **Average Finished Product Selling Price (destination):** | Period | 2023 (USD/tonne) | 2022 (USD/tonne) | Change (USD/tonne) | Percent Change | | :------------------- | :--------------- | :--------------- | :----------------- | :------------- | | Three months ended Sep 30 | 566 | 931 | (365) | (39)% | | Nine months ended Sep 30 | 597 | 915 | (318) | (35)% | **Total Mosaic Fertilizantes Segment Tonnes (in thousands of metric tonnes):** | Period | 2023 | 2022 | Change | Percent Change | | :------------------- | :--- | :--- | :----- | :------------- | | Three months ended Sep 30 | 3,060 | 2,824 | 236 | 8% | | Nine months ended Sep 30 | 7,525 | 6,966 | 559 | 8% | - Lower product costs for the distribution business and reduced sulfur and ammonia costs in the production business favorably impacted gross margin by **$750 million** for the three months ended September 30, 2023[154](index=154&type=chunk) - The phosphate operating rate increased to **81%** for the three months ended September 30, 2023, compared to **76%** in the prior year period[156](index=156&type=chunk) [Corporate, Eliminations and Other](index=37&type=section&id=Corporate%2C%20Eliminations%20and%20Other) This section explains the financial results for corporate activities, intersegment eliminations, and other non-segment specific operations - Gross margin for Corporate, Eliminations and Other was **$5.7 million** for the three months ended September 30, 2023, compared to **$(2.9) million** in the prior year period[162](index=162&type=chunk) - The improvement was driven by the elimination of profit on intersegment sales (approximately **$45 million** favorable impact for Q3 2023) and favorable product costs in China and India distribution operations[162](index=162&type=chunk) - Net unrealized loss on derivatives was approximately **$45 million** for the three months ended September 30, 2023, compared to approximately **$76 million** in the prior year period[162](index=162&type=chunk) [Other Income Statement Items](index=38&type=section&id=Other%20Income%20Statement%20Items) This section provides details on selling, general and administrative expenses, other operating expenses, and foreign currency impacts **Selling, General and Administrative Expenses:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 119.9 | 124.5 | (4.6) | (4)% | | Nine months ended Sep 30 | 377.5 | 365.1 | 12.4 | 3% | **Other Operating Expense:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | 143.9 | 222.8 | (78.9) | (35)% | | Nine months ended Sep 30 | 214.0 | 337.6 | (123.6) | (37)% | **Foreign Currency Transaction (Loss) Gain:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Three months ended Sep 30 | (96.9) | (61.1) | (35.8) | 59% | | Nine months ended Sep 30 | 103.0 | 22.4 | 80.6 | NM | - Other operating expense for the nine months ended September 30, 2023, was positively impacted by a **$57 million** gain on the sale of the Streamsong Resort[168](index=168&type=chunk) - Other expense for the three months ended September 30, 2023, primarily related to a **$42 million** pension plan settlement loss and **$6 million** of realized losses on marketable securities held in RCRA Trusts[172](index=172&type=chunk) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) This section highlights the significant judgments and assumptions made by management in preparing the financial statements - The Condensed Consolidated Financial Statements are prepared in conformity with GAAP, requiring significant judgments, estimates, and assumptions that can materially impact reported results[178](index=178&type=chunk) - Key estimates include fair value of acquired assets, recoverability of non-current assets (including goodwill), useful lives and net realizable values of long-lived assets, environmental and reclamation liabilities, and income tax-related accounts[28](index=28&type=chunk)[178](index=178&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, debt, and strategies for managing liquidity and capital allocation - As of September 30, 2023, the company had cash and cash equivalents of **$591.0 million** and approximately **$3.4 billion** in long-term debt (including current maturities)[180](index=180&type=chunk) - The company maintains a target liquidity buffer of up to **$3.0 billion**, including cash and available committed and uncommitted credit lines[180](index=180&type=chunk) - Capital allocation priorities include maintaining investment grade metrics, sustaining assets, investing in business growth, and returning excess cash to shareholders[180](index=180&type=chunk) - As of September 30, 2023, **$2.49 billion** was available under the **$2.50 billion** revolving credit facility, and approximately **$1.3 billion** was available under uncommitted facilities[182](index=182&type=chunk) [Operating Activities](index=41&type=section&id=Operating%20Activities) This section analyzes the cash flows generated from the company's primary business operations **Net Cash Provided by Operating Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | 1,869.1 | 2,980.1 | (1,111.0) | (37)% | - The decrease in operating cash flow was primarily due to lower net earnings after non-cash adjustments, partially offset by a favorable change in assets and liabilities of **$252.4 million**[185](index=185&type=chunk) - Favorable impacts from decreases in accounts receivable (**$332.6 million**) and inventories (**$1.1 billion**) were partially offset by an increase in other current and noncurrent assets (**$347.3 million**) and a decrease in accounts payable and accrued expenses (**$926.5 million**)[186](index=186&type=chunk) [Investing Activities](index=41&type=section&id=Investing%20Activities) This section details the cash flows related to the acquisition and disposal of long-term assets and investments **Net Cash Used in Investing Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | (955.0) | (916.5) | (38.5) | 4% | - Capital expenditures were **$1.0 billion** for the nine months ended September 30, 2023, compared to **$906.8 million** in the prior year period[16](index=16&type=chunk)[187](index=187&type=chunk) - The company completed the sale of the Streamsong Resort for net proceeds of **$158.4 million** and acquired the remaining **50%** equity interest of Gulf Sulphur Services for **$41.0 million**[188](index=188&type=chunk) [Financing Activities](index=42&type=section&id=Financing%20Activities) This section outlines the cash flows from debt, equity, and dividend transactions **Net Cash Used in Financing Activities:** | Period | 2023 (Millions USD) | 2022 (Millions USD) | Change (Millions USD) | Percent Change | | :------------------- | :------------------ | :------------------ | :-------------------- | :------------- | | Nine months ended Sep 30 | (1,069.8) | (2,105.7) | 1,035.9 | (49)% | - During the nine months ended September 30, 2023, the company made stock repurchases of **$606.0 million** and paid cash dividends of **$286.5 million**[189](index=189&type=chunk) - Net payments on structured accounts payable arrangements were **$176.6 million**, and payments on long-term debt were **$44.8 million**[189](index=189&type=chunk) [Debt Instruments, Guarantees and Related Covenants](index=42&type=section&id=Debt%20Instruments%2C%20Guarantees%20and%20Related%20Covenants) This section provides information on the company's debt obligations, guarantees, and compliance with financial covenants - The company was in compliance with its credit facility financial ratios as of September 30, 2023[182](index=182&type=chunk) - Further information is incorporated by reference from Notes 11 and 17 to the Consolidated Financial Statements in the 10-K Report[190](index=190&type=chunk) [Financial Assurance Requirements](index=42&type=section&id=Financial%20Assurance%20Requirements) This section describes the regulatory requirements for financial assurance related to environmental and operational obligations - The company is subject to financial assurance requirements in various jurisdictions, particularly Florida and Louisiana, for operational and environmental regulations[191](index=191&type=chunk) - These requirements typically involve passing a financial strength test or providing credit support through mechanisms such as surety bonds, letters of credit, certificates of deposit, or trust funds[191](index=191&type=chunk) [Environmental, Health, Safety and Security Matters](index=42&type=section&id=Environmental%2C%20Health%2C%20Safety%20and%20Security%20Matters) This section updates on significant environmental regulations and their potential impact on the company's operations - The U.S. Supreme Court's Sackett v EPA decision significantly limits the definition of 'Waters of the United States' (WOTUS), reducing federal jurisdiction under the Clean Water Act[193](index=193&type=chunk) - In response, the EPA issued a final rule on August 29, 2023, effective September 8, 2023, to conform its WOTUS definition to the Sackett decision[194](index=194&type=chunk) - The conforming rule is being implemented in **23 states**, while other states interpret WOTUS consistent with the pre-2015 regulatory regime and the Sackett decision[195](index=195&type=chunk) [Off-Balance Sheet Arrangements and Obligations](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Obligations) This section refers to disclosures regarding the company's off-balance sheet commitments and liabilities - Information regarding off-balance sheet arrangements and obligations is incorporated by reference from Management's Discussion and Analysis of Results of Operations and Financial Condition in the 10-K Report and Note 17 to the Condensed Consolidated Financial Statements in this report[196](index=196&type=chunk) [Contingencies](index=43&type=section&id=Contingencies) This section refers to disclosures regarding potential legal, environmental, and tax contingencies - Information regarding contingencies is incorporated by reference to Note 17 to the Condensed Consolidated Financial Statements in this report[197](index=197&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=47&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section outlines the company's exposure to various market risks, including fluctuations in currency exchange rates, interest rates, commodity prices (natural gas, ammonia, sulfur), and freight costs. It details the use of derivative instruments to mitigate these risks, primarily focusing on foreign currency exchange contracts and natural gas swaps - The company is exposed to market risks from fluctuations in currency values, interest rates, commodity prices (natural gas, ammonia, sulfur), and freight costs[207](index=207&type=chunk) - Derivatives, such as forward contracts, zero-cost collars, futures, and natural gas swaps, are used to mitigate these risks, but not for speculative purposes[207](index=207&type=chunk)[208](index=208&type=chunk) [Foreign Currency Exchange Contracts](index=47&type=section&id=Foreign%20Currency%20Exchange%20Contracts) This section details the company's strategies and positions for hedging foreign currency exchange rate risks - The company's primary foreign currency exposures are the Canadian dollar and Brazilian real[208](index=208&type=chunk) - Financial instruments, including forward contracts, are used to hedge expected cash flows, typically for up to **18 months** for the Canadian dollar and **12 months** for the Brazilian real[208](index=208&type=chunk) - As of September 30, 2023, the fair value of major foreign currency exchange contracts was **$(22.8) million**, compared to **$(27.3) million** as of December 31, 2022[209](index=209&type=chunk) [Commodities](index=48&type=section&id=Commodities) This section describes the company's approach to managing commodity price risks, particularly for natural gas - The company uses natural gas derivatives, primarily swaps, to manage the risk related to significant price changes in natural gas[211](index=211&type=chunk)[76](index=76&type=chunk) - As of September 30, 2023, the fair value of natural gas commodities contracts was **$1.6 million**, down from **$18.7 million** as of December 31, 2022[211](index=211&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=49&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms that management, including the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures as of September 30, 2023, and concluded they were effective. It also states that no material changes in internal control over financial reporting were identified during the quarter - Management, with the participation of the principal executive officer and principal financial officer, concluded that disclosure controls and procedures were effective as of September 30, 2023[214](index=214&type=chunk) - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting were identified during the three months ended September 30, 2023[215](index=215&type=chunk) [PART II. OTHER INFORMATION](index=50&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional disclosures not covered in the financial statements, including legal proceedings, risk factors, and equity security information [ITEM 1. LEGAL PROCEEDINGS](index=50&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section provides updates on various legal and environmental proceedings, including ongoing litigation related to Countervailing Duty (CVD) orders on phosphate fertilizers, the South Pasture Extension Mine Litigation, the Cruz Litigation concerning radiation levels, and the Faustina Plant Risk Management Plan. The company continues to actively defend these matters and manage compliance - Countervailing Duty (CVD) orders on phosphate fertilizers from Morocco and Russia are subject to ongoing litigation and administrative reviews, with new subsidy rates announced in November 2023 (OCP **2.12%**, PhosAgro **28.50%**)[216](index=216&type=chunk)[217](index=217&type=chunk) - In the South Pasture Extension Mine Litigation, a waiver and reclamation schedule extension was approved by the Hardee County BOCC, along with a **$249,000** civil penalty payment[223](index=223&type=chunk)[224](index=224&type=chunk) - The Cruz Litigation, a class action alleging elevated radiation levels, saw defendants' motions to dismiss denied in March 2023, and the company intends to vigorously defend the matter[225](index=225&type=chunk)[226](index=226&type=chunk) - The EPA Region 6 issued a Notice of Potential Violation regarding the Faustina Plant's Risk Management Plan Rule compliance, with settlement discussions ongoing[227](index=227&type=chunk) [ITEM 1A. RISK FACTORS](index=52&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the company's key risk factors, emphasizing the significant impact of business and economic conditions, governmental policies affecting the agricultural industry, and international market dynamics on operating results. It specifically highlights the ongoing litigation and administrative reviews related to Countervailing Duty (CVD) orders on phosphate fertilizers from Morocco and Russia as a critical influence - Operating results are highly dependent on business and economic conditions and governmental policies affecting the agricultural industry[229](index=229&type=chunk) - International market conditions and the success of Countervailing Duty (CVD) petitions significantly influence operating results[230](index=230&type=chunk) - Ongoing litigation and administrative reviews related to CVD orders on phosphate fertilizers from Morocco and Russia could change applicable final CVD assessment rates and cash deposit rates, potentially having an adverse effect on the business[230](index=230&type=chunk)[231](index=231&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=52&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports on the company's equity security repurchases during the quarter ended September 30, 2023. The company repurchased 3,948,783 shares of Common Stock for approximately $150.0 million at an average price of $37.99 per share under its publicly announced repurchase programs - No options to purchase shares of Common Stock were exercised using shares already owned by the optionee during the reported periods[233](index=233&type=chunk) **Issuer Repurchases of Equity Securities (Quarter ended Sep 30, 2023):** | Period | Total Shares Purchased | Average Price Paid per Share (USD) | Total Shares Purchased as part of Program | Max Approx. Dollar Value Remaining (USD) | | :-------------------------- | :--------------------- | :------------------------------- | :---------------------------------------- | :-------------------------------------- | | July 1, 2023 - July 31, 2023 | — | — | — | 1,467,818,178 | | August 1, 2023 - August 31, 2023 | 218,000 | 38.93 | 218,000 | 1,459,330,893 | | September 1, 2023 - Sep 30, 2023 | 3,730,783 | 37.93 | 3,730,783 | 1,317,818,221 | | **Total** | **3,948,783** | **37.99** | **3,948,783** | **1,317,818,221** | - A **$2.0 billion** share repurchase program was authorized in July 2022, effective upon completion of a prior **$1.0 billion** program, with no set expiration date[235](index=235&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=53&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section indicates that information concerning mine safety violations or other regulatory matters, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, is provided in Exhibit 95 to this report - Mine safety disclosures, as required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, are included in Exhibit 95 of this report[236](index=236&type=chunk) [ITEM 5. OTHER INFORMATION](index=53&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that no directors or officers informed the company of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the fiscal quarter ended June 30, 2023 - No directors or officers informed the company of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the fiscal quarter ended June 30, 2023[237](index=237&type=chunk) [ITEM 6. EXHIBITS](index=54&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q report, including various certifications (Rule 13a-14(a) and 13a-14(b)), mine safety disclosures, and Inline XBRL documents, which provide detailed supporting information for the financial statements and other disclosures - The exhibits include certifications required by Rule 13a-14(a) (Exhibits 31.1, 31.2) and Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (Exhibits 32.1, 32.2)[241](index=241&type=chunk) - Mine Safety Disclosures are filed as Exhibit 95[241](index=241&type=chunk) - Inline XBRL documents (Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Label Linkbase, Presentation Linkbase, Definition Linkbase, and Cover Page Interactive Data File) are also included[241](index=241&type=chunk) [Signatures](index=55&type=section&id=Signatures) This section contains the official signature block for the Form 10-Q report, indicating that the registrant, The Mosaic Company, has duly caused the report to be signed on its behalf by Russell A. Flugel, Vice President and Controller, on November 8, 2023 - The report was signed on behalf of The Mosaic Company by Russell A. Flugel, Vice President and Controller[244](index=244&type=chunk) - The signature date is November 8, 2023[244](index=244&type=chunk)

The Mosaic Company (NYSE:MOS) Q2 2023 Earnings Conference Call August 2, 2023 11:00 AM ET Company Participants Paul Massoud - Vice President of Investor Relations and FP&A James O'Rourke - President and Chief Executive Officer Clint Freeland - Senior Vice President and Chief Financial Officer Jenny Wang - Senior Vice President-Global Strategic Marketing Conference Call Participants Stephen Byrne - Bank of America Joel Jackson - BMO Capital Markets Richard Garchitorena - Wells Fargo Christopher Parkinson - M ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Mosaic's unaudited condensed consolidated financial statements and detailed notes for Q2 2023 and 2022 [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) This section presents the company's condensed consolidated statements of earnings for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Earnings (Three Months Ended June 30) | Metric | June 30, 2023 (Millions $) | June 30, 2022 (Millions $) | Change (Millions $) | Percent Change | | :----- | :------------------------- | :------------------------- | :------------------ | :------------- | Condensed Consolidated Statements of Earnings (Six Months Ended June 30) | Metric | June 30, 2023 (Millions $) | June 30, 2022 (Millions $) | Change (Millions $) | Percent Change | | :----- | :------------------------- | :------------------------- | :------------------ | :------------- | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended June 30) | Metric | June 30, 2023 (Millions $) | June 30, 2022 (Millions $) | | :----- | :------------------------- | :------------------------- | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended June 30) | Metric | June 30, 2023 (Millions $) | June 30, 2022 (Millions $) | | :----- | :------------------------- | :------------------------- | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's condensed consolidated balance sheets as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (As of June 30, 2023 and December 31, 2022) | Account | June 30, 2023 (Millions $) | December 31, 2022 (Millions $) | | :------ | :------------------------- | :----------------------------- | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | June 30, 2023 (Millions $) | June 30, 2022 (Millions $) | | :----------------- | :------------------------- | :------------------------- | Supplemental Disclosure of Cash Flow Information (Six Months Ended June 30, 2023) | Item | Amount (Millions $) | | :--- | :------------------ | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This section presents the company's condensed consolidated statements of equity for the three and six months ended June 30, 2023 Condensed Consolidated Statements of Equity (Three Months Ended June 30, 2023) | Account | Common Stock (Shares) | Common Stock (Dollars) | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interests | Total Equity | | :------ | :-------------------- | :--------------------- | :----------------------------- | :---------------- | :------------------------------------- | :----------------------- | :----------- | Condensed Consolidated Statements of Equity (Six Months Ended June 30, 2023) | Account | Common Stock (Shares) | Common Stock (Dollars) | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interests | Total Equity | | :------ | :-------------------- | :--------------------- | :----------------------------- | :---------------- | :------------------------------------- | :----------------------- | :----------- | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, financial data, and specific accounts for the financial statements [1. Organization and Nature of Business](index=9&type=section&id=1.%20Organization%20and%20Nature%20of%20Business) Mosaic produces and markets phosphate and potash crop nutrients through its Phosphate, Potash, and Mosaic Fertilizantes segments - Mosaic produces and markets concentrated phosphate and potash crop nutrients[21](index=21&type=chunk) - Business segments include Phosphate (Florida, Louisiana, Peru, Saudi Arabia JV), Potash (Canada, U.S.), and Mosaic Fertilizantes (Brazil, Paraguay)[23](index=23&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Unaudited Condensed Consolidated Financial Statements adhere to SEC interim reporting and GAAP, involving key estimates for assets, liabilities, and taxes - Financial statements are prepared on an accrual basis, in accordance with SEC rules for interim reporting and GAAP[23](index=23&type=chunk) - Significant accounting estimates involve fair value of acquired assets, recoverability of non-current assets (including goodwill), useful lives and net realizable values of long-lived assets, environmental and reclamation liabilities (ARO), and income tax accounts[25](index=25&type=chunk) [3. Recently Issued Accounting Guidance](index=10&type=section&id=3.%20Recently%20Issued%20Accounting%20Guidance) New FASB guidance on supplier financing programs was adopted on January 1, 2023, requiring annual disclosures without impacting balance sheet presentation - Adopted new FASB guidance on supplier financing programs as of January 1, 2023, requiring annual disclosures on key terms and outstanding amounts[26](index=26&type=chunk) - The adoption did not impact balance sheet presentation or footnote disclosures due to prior similar reporting practices[26](index=26&type=chunk) [4. Other Financial Statement Data](index=11&type=section&id=4.%20Other%20Financial%20Statement%20Data) This section details changes in selected balance sheet accounts, including other current assets, accrued liabilities, and noncurrent liabilities Other Current Assets (Millions $) | Account | June 30, 2023 | December 31, 2022 | | :------ | :------------ | :---------------- | Other Assets (Millions $) | Account | June 30, 2023 | December 31, 2022 | | :------ | :------------ | :---------------- | Accrued Liabilities (Millions $) | Account | June 30, 2023 | December 31, 2022 | | :------ | :------------ | :---------------- | Other Noncurrent Liabilities (Millions $) | Account | June 30, 2023 | December 31, 2022 | | :------ | :------------ | :---------------- | [5. Earnings Per Share](index=12&type=section&id=5.%20Earnings%20Per%20Share) This note reconciles basic and diluted EPS, detailing net earnings and weighted average shares, and noting anti-dilutive share exclusions EPS Reconciliation (Three Months Ended June 30) | Metric | 2023 | 2022 | | :----- | :--- | :--- | EPS Reconciliation (Six Months Ended June 30) | Metric | 2023 | 2022 | | :----- | :--- | :--- | - **0.7 million** and **0.4 million** shares for the three and six months ended June 30, 2023, respectively, were excluded from diluted EPS calculation as they were anti-dilutive[31](index=31&type=chunk) [6. Inventories](index=12&type=section&id=6.%20Inventories) This section details inventory composition as of June 30, 2023, and December 31, 2022, including raw materials and finished goods Inventories Composition (Millions $) | Category | June 30, 2023 | December 31, 2022 | | :------- | :------------ | :---------------- | - Final price deferred inventory represents product shipped to customers where the price has not yet been agreed upon[32](index=32&type=chunk) [7. Goodwill](index=12&type=section&id=7.%20Goodwill) Mosaic's goodwill remained at **$1.1 billion** as of June 30, 2023, with the next impairment review scheduled for October 31, 2023 - Goodwill was **$1.1 billion** as of June 30, 2023, and December 31, 2022[33](index=33&type=chunk) Changes in Goodwill by Reporting Unit (Millions $) | Reporting Unit | Balance as of Dec 31, 2022 | Foreign Currency Translation | Balance as of June 30, 2023 | | :------------- | :------------------------- | :--------------------------- | :-------------------------- | - The next annual goodwill impairment analysis is scheduled for October 31, 2023[34](index=34&type=chunk) [8. Marketable Securities Held in Trusts](index=13&type=section&id=8.%20Marketable%20Securities%20Held%20in%20Trusts) Mosaic holds available-for-sale marketable debt securities in RCRA Trusts for Gypstack Closure Costs, valued using a fair value hierarchy - RCRA Trusts hold investments for Gypstack Closure Costs, classified as available-for-sale marketable debt securities[35](index=35&type=chunk)[36](index=36&type=chunk) - Fair value hierarchy (Level 1, 2, 3) is used for valuation, with most investments classified as Level 2 (corporate debt, municipal bonds, U.S. government bonds)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) Estimated Fair Value of RCRA Trusts Investments (June 30, 2023) | Category | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :------- | :------------- | :--------------------- | :---------------------- | :--------- | Estimated Fair Value of RCRA Trusts Investments (December 31, 2022) | Category | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :------- | :------------- | :--------------------- | :---------------------- | :--------- | Gross Unrealized Losses and Fair Values of Available-for-Sale Securities (June 30, 2023) | Category | Fair Value | Gross Unrealized Losses | | :------- | :--------- | :---------------------- | Gross Unrealized Losses and Fair Values of Available-for-Sale Securities (December 31, 2022) | Category | Fair Value | Gross Unrealized Losses | | :------- | :--------- | :---------------------- | Contractual Maturity of Available-for-Sale Debt Securities (June 30, 2023) | Maturity Period | Amount (Millions $) | | :-------------- | :------------------ | - For the six months ended June 30, 2023, realized gains were **$9.1 million** and realized losses were **$15.2 million**[44](index=44&type=chunk) [9. Financing Arrangements](index=15&type=section&id=9.%20Financing%20Arrangements) Mosaic uses diverse financing, including inventory and receivable agreements, Brazilian structured payables, commercial paper, and an undrawn **$700 million** term loan - Inventory financing arrangement allows selling up to **$625 million** of inventory; no outstanding balance as of June 30, 2023[45](index=45&type=chunk) - Receivable Purchasing Agreement (RPA) allows selling up to **$600 million** of receivables; **$1.1 billion** sold for the six months ended June 30, 2023[46](index=46&type=chunk)[47](index=47&type=chunk) - Structured accounts payable arrangements in Brazil totaled **$592.5 million** as of June 30, 2023[48](index=48&type=chunk) - Commercial paper program had **$199.7 million** outstanding as of June 30, 2023, with a weighted average interest rate of **5.37%**[49](index=49&type=chunk) - Entered into a **$700 million** 10-year senior unsecured term loan facility in May 2023, with no amounts drawn as of June 30, 2023[50](index=50&type=chunk) [10. Asset Retirement Obligations](index=16&type=section&id=10.%20Asset%20Retirement%20Obligations) Mosaic recognizes AROs at fair value for legal obligations like Gypstack closure, primarily in Florida and Louisiana, with financial assurance - AROs are recognized at fair value for legal obligations such as land reclamation, Gypstack closure, and facility decommissioning[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) Reconciliation of Asset Retirement Obligations (Millions $) | Item | June 30, 2023 | December 31, 2022 | | :--- | :------------ | :---------------- | - A majority of AROs relate to Gypstack Closure Costs in Florida and Louisiana, with financial assurance provided through RCRA Trusts and surety bonds[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) - As of June 30, 2023, aggregate AROs for Plant City and Bonnie Facility Gypstack closure costs were **$328.9 million**[61](index=61&type=chunk) [11. Income Taxes](index=18&type=section&id=11.%20Income%20Taxes) Gross unrecognized tax benefits increased to **$28.9 million**, with effective tax rates of **22.8%** and **22.2%** for the three and six months ended June 30, 2023 - Gross unrecognized tax benefits increased by **$3.5 million** to **$28.9 million** for the six months ended June 30, 2023[62](index=62&type=chunk) Income Tax Provision and Effective Tax Rate | Period | Effective Tax Rate | Provision for Income Taxes (Millions $) | | :----- | :----------------- | :-------------------------------------- | - Discrete tax items provided a benefit of approximately **$9.9 million** for the three months and **$23.8 million** for the six months ended June 30, 2023[65](index=65&type=chunk)[67](index=67&type=chunk) - The company is assessing the financial statement impact of the Treasury Department's Notice 2023-55 regarding temporary relief for foreign tax credits[68](index=68&type=chunk) [12. Derivative Instruments and Hedging Activities](index=19&type=section&id=12.%20Derivative%20Instruments%20and%20Hedging%20Activities) Mosaic uses derivatives to manage foreign currency, interest rate, and commodity price risks, recorded at fair value without hedge accounting for most contracts - Derivatives are used to mitigate foreign currency, interest rate, and commodity price risks, recorded at fair value[69](index=69&type=chunk) - No hedge accounting is applied to foreign currency, commodity, or freight contracts; fixed-to-floating interest rate contracts use fair value hedge accounting, but none were in effect as of June 30, 2023[70](index=70&type=chunk)[71](index=71&type=chunk) Total Absolute Notional Volume of Outstanding Derivative Instruments (Millions of Units) | Derivative Instrument | Derivative Category | Unit of Measure | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------------ | :-------------- | :------------ | :---------------- | - The aggregate fair value of derivative instruments with credit-risk-related contingent features in a liability position was **$10.9 million** as of June 30, 2023[73](index=73&type=chunk) [13. Fair Value Measurements](index=20&type=section&id=13.%20Fair%20Value%20Measurements) This note details fair value measurement techniques for recurring assets and liabilities, including derivatives and other financial instruments - Foreign currency derivatives are primarily Level 2, with some Level 1, and had a gross asset position of **$39.7 million** and gross liability of **$15.3 million** as of June 30, 2023[75](index=75&type=chunk) - Commodity derivatives (natural gas) are Level 2, with a gross asset position of **$6.3 million** and gross liability of **$0.8 million** as of June 30, 2023[76](index=76&type=chunk) - No interest rate derivative positions were held as of June 30, 2023[77](index=77&type=chunk) Carrying Amounts and Estimated Fair Values of Financial Instruments (Millions $) | Instrument | June 30, 2023 (Carrying Amount) | June 30, 2023 (Fair Value) | December 31, 2022 (Carrying Amount) | December 31, 2022 (Fair Value) | | :--------- | :------------------------------ | :------------------------- | :---------------------------------- | :----------------------------- | [14. Share Repurchases](index=21&type=section&id=14.%20Share%20Repurchases) Mosaic's Board approved **$3.0 billion** in share repurchases, with **$448.0 million** executed in the first six months of 2023 - Board approved **$3.0 billion** in share repurchase programs in 2022[79](index=79&type=chunk) - For the six months ended June 30, 2023, **8,690,936 shares** were repurchased for approximately **$448.0 million** (average price **$51.55/share**)[81](index=81&type=chunk) - No share repurchases occurred in the three months ended June 30, 2023[81](index=81&type=chunk) - For the six months ended June 30, 2022, **17,733,984 shares** were repurchased for approximately **$1.0 billion** (average price **$64.37/share**)[83](index=83&type=chunk)[82](index=82&type=chunk) [15. Accumulated Other Comprehensive Income (Loss) ("AOCI")](index=22&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)%20(%22AOCI%22)) This note details changes in AOCI, net of tax, by component for the three and six months ended June 30, 2023 and 2022 Changes in AOCI, Net of Tax (Three Months Ended June 30, 2023) | Component | Balance at March 31, 2023 | Other Comprehensive Income (Loss) | Tax (Expense) Benefit | Other Comprehensive Income (Loss), Net of Tax | Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | Balance as of June 30, 2023 | | :-------- | :------------------------ | :-------------------------------- | :-------------------- | :-------------------------------------------- | :---------------------------------------------------------------------- | :-------------------------- | Changes in AOCI, Net of Tax (Six Months Ended June 30, 2023) | Component | Balance at December 31, 2022 | Other Comprehensive Income (Loss) | Tax (Expense) Benefit | Other Comprehensive Income (Loss), Net of Tax | Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest | Balance as of June 30, 2023 | | :-------- | :--------------------------- | :-------------------------------- | :-------------------- | :-------------------------------------------- | :---------------------------------------------------------------------- | :-------------------------- | [16. Related Party Transactions](index=23&type=section&id=16.%20Related%20Party%20Transactions) Mosaic engages in related party transactions, with **$408.3 million** due to non-consolidated companies as of June 30, 2023 - Net amount due to non-consolidated companies was **$408.3 million** as of June 30, 2023, up from **$56.8 million** at December 31, 2022[86](index=86&type=chunk) Related Party Transactions in Condensed Consolidated Statements of Earnings (Millions $) | Transaction Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | - Net sales to related parties primarily from Potash segment to Canpotex. Cost of goods sold from related parties primarily from Canpotex and MWSPC to Mosaic Fertilizantes and distribution businesses[87](index=87&type=chunk) [17. Contingencies](index=23&type=section&id=17.%20Contingencies) Mosaic faces environmental, coastal zone, and Brazilian legal contingencies, with accruals for probable losses and potential future expenditures - Contingent environmental liabilities arise from current/former facilities, adjacent facilities, and third-party Superfund sites, with accruals of **$174.4 million** as of June 30, 2023[89](index=89&type=chunk) - A reserve of **$53.9 million** was established for estimated repairs at the New Wales Phase II East Stack due to a cavity and liner tear[91](index=91&type=chunk) - Louisiana coastal zone cases are expected to be resolved through a memorandum of understanding with funding from third-party indemnitors/insurers[96](index=96&type=chunk) - Brazilian subsidiaries face judicial/administrative proceedings with aggregate damages/fines of approximately **$868.4 million**, with a probable aggregate loss of **$74.5 million** accrued[97](index=97&type=chunk) - Brazilian tax contingencies have a maximum potential liability of approximately **$586.5 million**, with **$220.2 million** subject to an indemnification agreement with Vale S.A[99](index=99&type=chunk) [18. Business Segments](index=25&type=section&id=18.%20Business%20Segments) Mosaic's Phosphate, Potash, and Mosaic Fertilizantes segments are evaluated by operating earnings, with detailed financial and sales data provided Segment Information (Three Months Ended June 30, 2023) | Metric | Phosphate | Potash | Mosaic Fertilizantes | Corporate, Eliminations and Other | Total | | :----- | :-------- | :----- | :------------------- | :-------------------------------- | :---- | Segment Information (Six Months Ended June 30, 2023) | Metric | Phosphate | Potash | Mosaic Fertilizantes | Corporate, Eliminations and Other | Total | | :----- | :-------- | :----- | :------------------- | :-------------------------------- | :---- | Net Sales by Geographic Area (Millions $) | Country/Region | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | Net Sales by Product Type (Millions $) | Product Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes Mosaic's financial performance for Q2 2023, highlighting declines in sales and earnings due to lower prices, segment performance, liquidity, and forward-looking statements [Results of Operations Overview](index=29&type=section&id=Results%20of%20Operations%20Overview) Mosaic's net income and sales significantly declined in Q2 2023 due to lower selling prices and market softening, despite foreign currency gains Consolidated Results of Operations (Three Months Ended June 30) | Metric | 2023 (Millions $) | 2022 (Millions $) | Change (Millions $) | Percent Change | | :----- | :---------------- | :---------------- | :------------------ | :------------- | Consolidated Results of Operations (Six Months Ended June 30) | Metric | 2023 (Millions $) | 2022 (Millions $) | Change (Millions $) | Percent Change | | :----- | :---------------- | :---------------- | :------------------ | :------------- | - Net income attributable to Mosaic decreased by **64%** to **$369.0 million** for the three months ended June 30, 2023, and by **64%** to **$803.8 million** for the six months ended June 30, 2023, compared to prior year periods[112](index=112&type=chunk)[113](index=113&type=chunk)[121](index=121&type=chunk) - Net sales decreased by **37%** for the three months and **25%** for the six months ended June 30, 2023, primarily due to lower average selling prices[112](index=112&type=chunk)[113](index=113&type=chunk) - Foreign currency transaction gain positively impacted net income by **$148.5 million** (3 months) and **$199.9 million** (6 months) in 2023[113](index=113&type=chunk)[121](index=121&type=chunk) - Key highlights include entering a **$700 million** term loan facility (undrawn), sale of Streamsong Resort for **$158 million** gain, full ownership of Gulf Sulphur Services, **$300 million** accelerated share repurchase, and a special dividend of **$0.25 per share**[120](index=120&type=chunk)[128](index=128&type=chunk) [Segment Performance](index=32&type=section&id=Segment%20Performance) All segments experienced lower sales prices and reduced gross margins due to market softening, despite some volume increases and lower raw material costs [Phosphate Segment](index=32&type=section&id=Phosphate%20Segment) Phosphate segment net sales and gross margin decreased due to lower selling prices, partially offset by higher volumes and reduced raw material costs Phosphate Segment Performance (Three Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | Phosphate Segment Performance (Six Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | - Average finished product selling price decreased **40%** to **$634/tonne** (3 months) and **30%** to **$674/tonne** YoY (6 months)[129](index=129&type=chunk)[131](index=131&type=chunk)[137](index=137&type=chunk) - Finished product sales volumes increased **15%** (3 months) and **13%** (6 months) YoY[129](index=129&type=chunk)[131](index=131&type=chunk)[137](index=137&type=chunk) - Gross margin decreased by **66%** to **$216.2 million** (3 months) and **59%** to **$475.5 million** (6 months) YoY, primarily due to lower sales prices[129](index=129&type=chunk)[132](index=132&type=chunk)[138](index=138&type=chunk) - Average consumed ammonia price decreased **25%** (3 months) and **12%** (6 months) YoY; sulfur price decreased **49%** (3 months) and **30%** (6 months) YoY[129](index=129&type=chunk)[133](index=133&type=chunk)[139](index=139&type=chunk) [Potash Segment](index=34&type=section&id=Potash%20Segment) Potash segment net sales and gross margin declined significantly due to lower selling prices, reduced volumes, and increased idle plant costs Potash Segment Performance (Three Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | Potash Segment Performance (Six Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | - Average finished product selling price decreased **43%** to **$392/tonne** (3 months) and **33%** to **$431/tonne** YoY (6 months)[142](index=142&type=chunk)[144](index=144&type=chunk)[150](index=150&type=chunk) - Sales volumes decreased **6%** (3 months) and **1%** (6 months) YoY[142](index=142&type=chunk)[145](index=145&type=chunk)[150](index=150&type=chunk) - Gross margin decreased by **64%** to **$336.0 million** (3 months) and **50%** to **$749.3 million** (6 months) YoY, primarily due to lower selling prices and volumes[142](index=142&type=chunk)[146](index=146&type=chunk)[151](index=151&type=chunk) - Canadian resource taxes decreased by **$179.5 million** (3 months) and **$215.9 million** (6 months) YoY[147](index=147&type=chunk)[152](index=152&type=chunk) - Operating rate for potash production decreased to **69%** (3 months) and **69%** (6 months) YoY, reflecting temporary idling of Colonsay mine and maintenance turnarounds[148](index=148&type=chunk)[153](index=153&type=chunk) [Mosaic Fertilizantes Segment](index=36&type=section&id=Mosaic%20Fertilizantes%20Segment) Mosaic Fertilizantes segment saw significant decreases in net sales and gross margin due to lower selling prices, despite increased sales volumes Mosaic Fertilizantes Segment Performance (Three Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | Mosaic Fertilizantes Segment Performance (Six Months Ended June 30) | Metric | 2023 | 2022 | Change | Percent Change | | :----- | :--- | :--- | :----- | :------------- | - Average finished product selling price decreased **39%** to **$595/tonne** (3 months) and **32%** to **$619/tonne** YoY (6 months)[156](index=156&type=chunk)[158](index=158&type=chunk)[165](index=165&type=chunk) - Finished product sales volumes increased **3%** (3 months) and **8%** (6 months) YoY[156](index=156&type=chunk)[158](index=158&type=chunk)[165](index=165&type=chunk) - Gross margin decreased by **97%** to **$12.8 million** (3 months) and **98%** to **$11.7 million** (6 months) YoY, primarily due to lower selling prices[156](index=156&type=chunk)[159](index=159&type=chunk)[166](index=166&type=chunk) - Lower product costs and raw material costs (sulfur and ammonia) favorably impacted gross margin by **$370 million** (3 months) and **$470 million** (6 months)[160](index=160&type=chunk)[166](index=166&type=chunk) [Corporate, Eliminations and Other](index=37&type=section&id=Corporate,%20Eliminations%20and%20Other) Corporate, Eliminations and Other segment's gross margin improved due to derivative gains and lower intersegment profit elimination, despite unfavorable product costs - Gross margin for Corporate, Eliminations and Other was **$6.1 million** (3 months) and **$5.0 million** (6 months) in 2023, compared to **$(173.1) million** and **$(59.9) million** in 2022[170](index=170&type=chunk)[171](index=171&type=chunk) - Gross margin was favorably impacted by a net unrealized gain on derivatives of approximately **$34 million** (3 months) and **$33 million** (6 months) in 2023[170](index=170&type=chunk)[171](index=171&type=chunk) - Lower elimination of profit on intersegment sales favorably impacted gross margin by approximately **$215 million** (3 months) and **$313 million** (6 months)[170](index=170&type=chunk)[171](index=171&type=chunk) - Unfavorable product costs in China and India distribution businesses negatively impacted gross margin[170](index=170&type=chunk)[171](index=171&type=chunk) [Other Income Statement Items](index=38&type=section&id=Other%20Income%20Statement%20Items) SG&A expenses increased, other operating expenses were impacted by AROs and a resort sale gain, and foreign currency transaction gains were significant Other Income Statement Items (Millions $) | Item | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change | Percent Change | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change | Percent Change | | :--- | :------------------------------- | :------------------------------- | :----- | :------------- | :----------------------------- | :----------------------------- | :----- | :------------- | - Selling, general and administrative expenses increased by **$21.7 million** (3 months) and **$17.0 million** (6 months) YoY, driven by consulting services and compensation[173](index=173&type=chunk)[174](index=174&type=chunk) - Other operating expense for the six months ended June 30, 2023, included a **$57 million** gain on the sale of Streamsong Resort and **$21 million** in insurance proceeds, partially offset by increased ARO closure costs[177](index=177&type=chunk) - Foreign currency transaction gain was **$148.5 million** (3 months) and **$199.9 million** (6 months) in 2023, primarily due to the weakening U.S. dollar against the Brazilian real and Canadian dollar[178](index=178&type=chunk)[179](index=179&type=chunk) - Equity in net earnings of nonconsolidated companies decreased by **64%** (3 months) and **34%** (6 months) YoY, mainly due to lower selling prices for MWSPC products[181](index=181&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Mosaic reported **$626.1 million** cash, **$3.4 billion** long-term debt, and a **$3.0 billion** liquidity target, with operating cash flow decreasing to **$1.2 billion** - As of June 30, 2023: Cash and cash equivalents: **$626.1 million**; Short-term debt: **$229.0 million**; Long-term debt (including current maturities): ~**$3.4 billion**; Stockholders' equity: ~**$12.6 billion**[187](index=187&type=chunk) - Target liquidity buffer of up to **$3.0 billion**, including cash and available credit lines[187](index=187&type=chunk) - Available credit: **$2.49 billion** under **$2.50 billion** revolving credit facility, ~**$1.0 billion** under uncommitted facilities, and **$2.3 billion** under **$2.5 billion** commercial paper program[188](index=188&type=chunk) Net Cash Flow Comparison (Six Months Ended June 30) | Cash Flow Activity | 2023 (Millions $) | 2022 (Millions $) | Change (Millions $) | Percent Change | | :----------------- | :---------------- | :---------------- | :------------------ | :------------- | - Net cash provided by operating activities was **$1.2 billion** for the six months ended June 30, 2023, a **42%** decrease YoY[191](index=191&type=chunk)[192](index=192&type=chunk) - Net cash used in investing activities was **$532.9 million**, including **$631.8 million** in capital expenditures and **$158.4 million** from the sale of the Resort[191](index=191&type=chunk)[194](index=194&type=chunk) - Net cash used in financing activities was **$815.6 million**, including **$456.0 million** in share repurchases and **$220.1 million** in dividends[191](index=191&type=chunk)[195](index=195&type=chunk) [Financial Assurance Requirements](index=42&type=section&id=Financial%20Assurance%20Requirements) Mosaic is subject to financial assurance requirements in Florida and Louisiana for its Phosphate segment, requiring credit support for environmental obligations - Subject to financial assurance requirements in Florida and Louisiana for Phosphate segment operations[197](index=197&type=chunk) - Required to pass a financial strength test or provide credit support (surety bonds, letters of credit, certificates of deposit, or trust funds)[197](index=197&type=chunk) [Environmental, Health, Safety and Security Matters](index=42&type=section&id=Environmental,%20Health,%20Safety%20and%20Security%20Matters) The Supreme Court's Sackett v EPA ruling narrowed "Waters of the United States" (WOTUS), invalidating EPA's 2023 definition, with a new regulation expected - U.S. Supreme Court's Sackett v EPA decision significantly limits the scope of "Waters of the United States" (WOTUS) under the Clean Water Act[199](index=199&type=chunk) - The ruling requires wetlands to have a continuous surface connection to relatively permanent bodies of water to be considered WOTUS[199](index=199&type=chunk) - The EPA's 2023 regulatory definition of WOTUS was invalidated, and a new regulation is expected by September 1, 2023[200](index=200&type=chunk) [Off-Balance Sheet Arrangements and Obligations](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Obligations) Off-balance sheet arrangements and obligations are incorporated by reference from the 10-K Report and Note 17 [Contingencies](index=42&type=section&id=Contingencies) Contingencies information is incorporated by reference from Note 17 to the Condensed Consolidated Financial Statements [Forward-Looking Statements](index=43&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties, including economic conditions, market volatility, and regulatory changes - All statements not of historical fact are forward-looking and subject to risks and uncertainties[204](index=204&type=chunk) - Factors influencing results include economic conditions, government policies, market volatility, geopolitical instability (Brazil, Saudi Arabia, Peru), COVID-19 impact, oil demand, changes in application rates, market consolidation, competitor actions, product innovations, seasonality, raw material/energy costs, transportation issues, trade policies, foreign exchange rates, international operations risks, weather, regulatory approvals, environmental regulations (WOTUS, GHG emissions), financial resources of competitors, customer defaults, liquidity, strategic initiatives, actual costs differing from estimates, legal/administrative proceedings, labor relations, brine inflows, accidents, terrorism, and cybersecurity risks[205](index=205&type=chunk)[211](index=211&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=46&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Mosaic faces market risks from currency, interest rates, commodity prices, and freight, using derivatives to mitigate these non-speculative exposures - Exposed to market risks from currency, interest rates, commodity prices (natural gas, ammonia, sulfur), and freight costs[212](index=212&type=chunk) - Uses derivatives to mitigate risks, not for speculation[212](index=212&type=chunk) - Primary foreign currency exposures are the Canadian dollar and Brazilian real, hedged up to 18 months and 12 months, respectively[213](index=213&type=chunk) [Foreign Currency Exchange Contracts](index=46&type=section&id=Foreign%20Currency%20Exchange%20Contracts) This section details the fair value and notional volumes of foreign currency exchange derivatives used to manage currency risk - Fair value of major foreign currency exchange contracts was **$24.4 million** as of June 30, 2023, compared to **$(27.3) million** as of December 31, 2022[214](index=214&type=chunk) Foreign Currency Exchange Derivatives (Millions US$) | Currency | Notional (2023) | Notional (2024) | Fair Value (June 30, 2023) | Notional (2023) | Notional (2024) | Fair Value (Dec 31, 2022) | | :------- | :-------------- | :-------------- | :------------------------- | :-------------- | :-------------- | :------------------------ | [Commodities](index=47&type=section&id=Commodities) This section details the fair value and notional volumes of natural gas commodity derivatives used to manage price risk - Fair value of natural gas commodities contracts was **$5.9 million** as of June 30, 2023, compared to **$18.7 million** as of December 31, 2022[216](index=216&type=chunk) Natural Gas Derivatives (Millions) | Metric | Notional (2023) | Notional (2024) | Fair Value (June 30, 2023) | Notional (2023) | Notional (2024) | Fair Value (Dec 31, 2022) | | :----- | :-------------- | :-------------- | :------------------------- | :-------------- | :-------------- | :------------------------ | [ITEM 4. CONTROLS AND PROCEDURES](index=48&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2023[219](index=219&type=chunk) - No material changes in internal control over financial reporting were identified during the three months ended June 30, 2023[220](index=220&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, mine safety, and other disclosures [ITEM 1. LEGAL PROCEEDINGS](index=49&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Mosaic is involved in legal proceedings including countervailing duty investigations, settled reclamation litigation, a class action, and an EPA violation notice - Countervailing duty orders are in place against phosphate fertilizer imports from Morocco and Russia, with cash deposit rates ranging from **9%** to **47%**[221](index=221&type=chunk) - Litigation regarding reclamation deadlines at the South Pasture Mine Extension was settled, with a waiver of deadlines until end of 2023 and a civil penalty payment of **$249,000**[228](index=228&type=chunk) - A class action lawsuit (Cruz Litigation) alleges elevated radiation levels at manufactured housing communities on reclaimed mining land; Mosaic intends to vigorously defend the matter[230](index=230&type=chunk)[232](index=232&type=chunk) - EPA Region 6 issued a Notice of Potential Violation to the Faustina Plant regarding compliance with the Risk Management Plan Rule, with ongoing settlement discussions[233](index=233&type=chunk) [ITEM 1A. RISK FACTORS](index=51&type=section&id=ITEM%201A.%20RISK%20FACTORS) Key risk factors are incorporated by reference from Item 1A of the company's Annual Report on Form 10-K - Key risk factors are incorporated by reference from the Annual Report on Form 10-K[235](index=235&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No options to purchase Common Stock were exercised using already-owned shares as payment during the reporting periods - No options to purchase Common Stock were exercised using already-owned shares as payment during the reporting periods[236](index=236&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=51&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures, as required by Dodd-Frank and Regulation S-K, are provided in Exhibit 95 of this report - Mine safety disclosures are provided in Exhibit 95 of the report[237](index=237&type=chunk) [ITEM 5. OTHER INFORMATION](index=51&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter[238](index=238&type=chunk) [ITEM 6. EXHIBITS](index=52&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including agreements, plans, certifications, and disclosures Exhibit Index | Exhibit No | Description | Incorporated Herein by Reference to | Filed with Electronic Submission | | :--------- | :---------- | :---------------------------------- | :------------------------------- | [Signatures](index=53&type=section&id=Signatures) The report is signed by Russell A. Flugel, Vice President and Controller, on behalf of The Mosaic Company on August 2, 2023 - Report signed by Russell A. Flugel, Vice President and Controller, on August 2, 2023[243](index=243&type=chunk)

The Mosaic Company BMO Global Farm to Market Conference ...

Mosaic Co (NYSE:MOS) Q1 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Paul Massoud - VP, IR James O’Rourke - CEO, President & Director Clint Freeland - SVP & CFO Jenny Wang - SVP, Global Strategic Marketing and Head of China & India Conference Call Participants Christopher Parkinson - Mizuho Securities Stephen Byrne - Bank of America Merrill Lynch Benjamin Theurer - Barclays Bank Andrew Wong - RBC Capital Markets Richard Garchitorena - Wells Fargo Securities Vincent Andrews - Mo ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ FORM 10-Q _______________________________________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...