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Mosaic(MOS) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, Mosaic reported net sales of 2,620.9million,adecreaseof22,620.9 million, a decrease of 2% from 2,679.4 million in the same period of 2024[106]. - Gross margin increased by 22% to 488.4millionforthethreemonthsendedMarch31,2025,comparedto488.4 million for the three months ended March 31, 2025, compared to 399.2 million in the prior year, driven by higher average selling prices in the Phosphates segment[106]. - Operating earnings surged 96% to 338.5millionforthethreemonthsendedMarch31,2025,comparedto338.5 million for the three months ended March 31, 2025, compared to 172.9 million in the prior year[106]. - Net income attributable to Mosaic increased significantly to 238.1million,or238.1 million, or 0.75 per diluted share, compared to 45.2million,or45.2 million, or 0.14 per diluted share, in the prior year[107]. Segment Performance - The Phosphate segment's net sales decreased by 6% to 1,098.6millionforthethreemonthsendedMarch31,2025,primarilyduetolowerfinishedgoodssalesvolumes[114].AveragefinishedproductsellingpriceinthePhosphatesegmentincreasedby71,098.6 million for the three months ended March 31, 2025, primarily due to lower finished goods sales volumes[114]. - Average finished product selling price in the Phosphate segment increased by 7% to 632 per tonne for the three months ended March 31, 2025, compared to 593pertonneintheprioryear[115].OperatingearningsinthePotashsegmentdecreasedto593 per tonne in the prior year[115]. - Operating earnings in the Potash segment decreased to 157 million for the three months ended March 31, 2025, down from 198millionintheprioryear,primarilyduetoloweraveragesellingpricesandsalesvolumes[110].OperatingearningsintheMosaicFertilizantessegmentincreasedto198 million in the prior year, primarily due to lower average selling prices and sales volumes[110]. - Operating earnings in the Mosaic Fertilizantes segment increased to 99 million for the three months ended March 31, 2025, compared to 42millionintheprioryear,drivenbycostimprovementsandincreasedsalesvolumes[111].ThePotashsegmentsnetsalesdecreasedto42 million in the prior year, driven by cost improvements and increased sales volumes[111]. - The Potash segment's net sales decreased to 570.2 million for the three months ended March 31, 2025, down from 643.1millioninthesameperiodayearago,representingan11643.1 million in the same period a year ago, representing an 11% decline[123]. - Average finished product selling price in the Potash segment was 234 per tonne for the three months ended March 31, 2025, compared to 258pertonneayearago,adecreaseof9258 per tonne a year ago, a decrease of 9%[124]. - Gross margin for the Potash segment decreased to 168.6 million, down from 211.7million,reflectinga20211.7 million, reflecting a 20% decline due to lower selling prices and sales volumes[125]. - The Mosaic Fertilizantes segment's net sales increased to 933.8 million for the three months ended March 31, 2025, up from 886.4million,a5886.4 million, a 5% increase driven by higher finished goods sales volumes[131]. - Average finished product selling price in the Mosaic Fertilizantes segment was 452 per tonne, down from 463pertonne,adecreaseof2463 per tonne, a decrease of 2%[132]. - Gross margin for the Mosaic Fertilizantes segment increased to 127.0 million, up from 75.2million,a6975.2 million, a 69% increase primarily due to lower product costs[133]. Currency and Foreign Exchange - Foreign currency transaction gain for the three months ended March 31, 2025, was 133.1 million, compared to a loss of 100.3millionintheprioryear[107].Theaverageconsumedpriceforammoniaincreasedby3100.3 million in the prior year[107]. - The average consumed price for ammonia increased by 3% to 416 per tonne for the three months ended March 31, 2025, while the average consumed sulfur price increased by 11% to 157perlongton[118].TheaverageconsumedpriceforammoniainBrazilianoperationsdecreasedto157 per long ton[118]. - The average consumed price for ammonia in Brazilian operations decreased to 684 per tonne, down from 705pertonne,adeclineof3705 per tonne, a decline of 3%[135]. - The foreign currency transaction gain was 133.1 million for the three months ended March 31, 2025, compared to a loss of 100.3millionintheprioryear,reflectingasignificantimprovement[143].AsofMarch31,2025,thefairvalueofMosaicsmajorforeigncurrencyexchangecontractswas100.3 million in the prior year, reflecting a significant improvement[143]. - As of March 31, 2025, the fair value of Mosaic's major foreign currency exchange contracts was (26.7) million, a decrease from (82.6)millionasofDecember31,2024[170].ThenotionalamountofshortCanadiandollarswas(82.6) million as of December 31, 2024[170]. - The notional amount of short Canadian dollars was 218.1 million with a weighted average rate of 1.4088 Canadian dollars to 1 U.S. dollar as of March 31, 2025[171]. - The notional amount of long Brazilian real was 446.0millionwithaweightedaveragerateof5.8488Brazilianrealto1U.S.dollarasofMarch31,2025[171].ThefairvalueofnaturalgascommoditiescontractswaszeroasofMarch31,2025,comparedto446.0 million with a weighted average rate of 5.8488 Brazilian real to 1 U.S. dollar as of March 31, 2025[171]. - The fair value of natural gas commodities contracts was zero as of March 31, 2025, compared to (1.8) million as of December 31, 2024[173]. - Mosaic uses financial instruments such as forward contracts and futures to hedge against currency exchange rate fluctuations, particularly for the Canadian dollar and Brazilian real[169]. - The company hedges cash flows on a declining basis, up to 18 months for the Canadian dollar and up to 12 months for the Brazilian real[169]. - The fair value of foreign currency exchange derivatives reflects significant exposure to the Canadian dollar and Brazilian real, impacting earnings and cash flows[170]. - The company reported a total fair value of (26.7)millionforforeigncurrencyexchangecontractsasofMarch31,2025[171].Themanagementsdiscussionincludesfurtherinformationregardingforeigncurrencyexchangeratesandderivativesinthe10KReport[170].CashFlowandLiquidityForthethreemonthsendedMarch31,2025,thenetcashprovidedbyoperatingactivitieswas(26.7) million for foreign currency exchange contracts as of March 31, 2025[171]. - The management's discussion includes further information regarding foreign currency exchange rates and derivatives in the 10-K Report[170]. Cash Flow and Liquidity - For the three months ended March 31, 2025, the net cash provided by operating activities was 42.9 million, a significant improvement of 122.9millioncomparedtoanetcashusedof122.9 million compared to a net cash used of 80.0 million in the same period last year[155]. - The company had cash and cash equivalents of 259.2million,shorttermdebtof259.2 million, short-term debt of 1.2 billion, and long-term debt of approximately 3.4billionasofMarch31,2025[151].DuringthethreemonthsendedMarch31,2025,thecompanyreturnedcashdividendsof3.4 billion as of March 31, 2025[151]. - During the three months ended March 31, 2025, the company returned cash dividends of 70.9 million and invested 340.8millionincapitalexpenditures[151].Thenetcashusedininvestingactivitieswas340.8 million in capital expenditures[151]. - The net cash used in investing activities was 340.8 million, a decrease of 12% from 387.8millionintheprioryearperiod[154].Thecompanyhad387.8 million in the prior year period[154]. - The company had 2.50 billion available under its committed revolving credit facility and approximately 0.8billionavailableunderuncommittedfacilitiesasofMarch31,2025[152].TheunfavorablechangeinassetsandliabilitiesforthethreemonthsendedMarch31,2025,wasprimarilydrivenbyincreasesininventoriesof0.8 billion available under uncommitted facilities as of March 31, 2025[152]. - The unfavorable change in assets and liabilities for the three months ended March 31, 2025, was primarily driven by increases in inventories of 162.4 million[156]. - The company received net proceeds of 202.1millionunderitsinventoryfinancingarrangementduringthethreemonthsendedMarch31,2025[158].Thecompanyexpectsitsliquiditytofluctuate,particularlyinthefirstquarterofeachyear,tomanagethroughtheseasonalityofitsbusiness[151].Thecompanyhadatargetliquiditybufferofupto202.1 million under its inventory financing arrangement during the three months ended March 31, 2025[158]. - The company expects its liquidity to fluctuate, particularly in the first quarter of each year, to manage through the seasonality of its business[151]. - The company had a target liquidity buffer of up to 3.0 billion, including cash and available credit lines[151]. - The company anticipates that funds generated from operations and available cash will be sufficient to finance operations, capital expenditures, and expected dividend payments for the next 12 months and beyond[152]. Expenses and Taxation - Selling, general and administrative expenses increased by 15.8millionto15.8 million to 122.6 million, primarily due to higher incentive compensation and employee benefit costs[140]. - The effective tax rate for the three months ended March 31, 2025, was 20.2%, with income tax expense amounting to $63.3 million[146].