Mosaic(MOS) - 2024 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2024, Mosaic reported a net loss of $(161.5) million, or$(0.50) per diluted share, compared to net income of $369.0 million, or$1.11 per diluted share for the same period in 2023[110]. - For the six months ended June 30, 2024, Mosaic reported a net loss of $(116.3) million, or$(0.36) per diluted share, compared to net earnings of $800.0 million, or$2.39 per diluted share for the same period in 2023[113]. - Net sales for the three months ended June 30, 2024 decreased by 17% to $2,816.6 million, driven primarily by lower average selling prices[109]. - For the six months ended June 30, 2024, net sales were$2.3 billion, a decrease from $2.7 billion in the same period of 2023, primarily due to lower sales volumes[120]. Segment Performance - The Phosphate segment's operating results for the three months ended June 30, 2024 were negatively impacted by lower sales volumes due to planned maintenance and turnaround activity[110]. - The Potash segment experienced lower average selling prices due to a rebound in global supply, although sales volumes increased due to strong demand in North America[112]. - The Phosphate segment's net sales decreased to$1.2 billion for the three months ended June 30, 2024, down from $1.3 billion in the same period of 2023, primarily due to lower finished goods sales volumes[117]. - The Potash segment's net sales decreased to$663.1 million for the three months ended June 30, 2024, down from $848.7 million in the same period a year ago, primarily due to lower selling prices impacting net sales by approximately$250 million[125]. - The Mosaic Fertilizantes segment's net sales decreased to $1.0 billion for the three months ended June 30, 2024, from$1.4 billion in the same period a year ago, primarily due to lower finished product sales prices[130]. Gross Margin and Earnings - The gross margin for the three months ended June 30, 2024 was $394.0 million, representing a gross margin percentage of 14$233.3 million, a decrease of 37% compared to $369.2 million in the prior year[109]. - Gross margin for the Phosphate segment decreased to$153.7 million for the three months ended June 30, 2024, from $216.2 million in the same period of 2023[119]. - Gross margin for the Potash segment decreased to$186.4 million for the three months ended June 30, 2024, from $336.0 million in the same period of the prior year, a decline of 45$101.8 million for the three months ended June 30, 2024, from $12.8 million in the same period of the prior year, reflecting improved cost management[130]. Shareholder Returns - During the quarter ended June 30, 2024, Mosaic repurchased 1,835,788 shares of Common Stock for approximately$52.0 million at an average price of $28.33[112]. - The company returned cash to shareholders through share repurchases of$160.4 million and cash dividends of $137.4 million during the six months ended June 30, 2024[148]. Cash Flow and Debt - Net cash provided by operating activities was$767.0 million for the six months ended June 30, 2024, a decrease of 37% from $1.2 billion in the prior year[152]. - Net cash used in investing activities was$736.8 million for the six months ended June 30, 2024, compared to $532.9 million in the prior year, with capital expenditures of$716.9 million[153]. - As of June 30, 2024, the company had cash and cash equivalents of $322.0 million, short-term debt of$0.9 billion, long-term debt of approximately $3.3 billion, and stockholders' equity of approximately$11.8 billion[148]. Foreign Currency and Commodity Risks - The foreign currency transaction loss for the three months ended June 30, 2024 was $(267.9) million, compared to a gain of$148.5 million in the prior year period[110]. - The company is exposed to fluctuations in the purchase price of natural gas, ammonia, and sulfur, which can impact operations[166]. - The company uses derivatives to mitigate foreign currency risks, interest rate risks, and commodity price changes[166]. Regulatory and Legal Matters - The company anticipates potential delays in Florida permitting projects due to recent legal developments regarding CWA 404 permitting[157]. - Regulatory approvals are necessary to complete the transaction, and any denial or delay could impair business operations[187]. - A recent federal court decision invalidated Florida's Clean Water Act 404 permitting program, complicating the receipt of necessary approvals[188].