Mosaic(MOS) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, Mosaic reported net sales of $2,620.9 million, a decrease of 2$2,679.4 million in the same period of 2024[106]. - Gross margin increased by 22% to $488.4 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 $338.5 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 $238.1 million, or$0.75 per diluted share, compared to $45.2 million, or$0.14 per diluted share, in the prior year[107]. Segment Performance - The Phosphate segment's net sales decreased by 6% to $1,098.6 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$632 per tonne for the three months ended March 31, 2025, compared to $593 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 $198 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 $42 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 $643.1 million in the same period a year ago, representing an 11$234 per tonne for the three months ended March 31, 2025, compared to $258 per tonne a year ago, a decrease of 9$168.6 million, down from $211.7 million, reflecting a 20$933.8 million for the three months ended March 31, 2025, up from $886.4 million, a 5$452 per tonne, down from $463 per tonne, a decrease of 2$127.0 million, up from $75.2 million, a 69$133.1 million, compared to a loss of $100.3 million in the prior year[107]. - The average consumed price for ammonia increased by 3$416 per tonne for the three months ended March 31, 2025, while the average consumed sulfur price increased by 11% to $157 per long ton[118]. - The average consumed price for ammonia in Brazilian operations decreased to$684 per tonne, down from $705 per tonne, a decline of 3$133.1 million for the three months ended March 31, 2025, compared to a loss of $100.3 million in the prior year, reflecting a significant improvement[143]. - As of March 31, 2025, the fair value of Mosaic's major foreign currency exchange contracts was$(26.7) million, a decrease from $(82.6) 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 $446.0 million with a weighted average rate of 5.8488 Brazilian real to 1 U.S. dollar as of March 31, 2025[171]. - The fair value of natural gas commodities contracts was zero as of March 31, 2025, compared to$(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) 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 $122.9 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 $259.2 million, short-term debt of$1.2 billion, and long-term debt of approximately $3.4 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 $340.8 million in capital expenditures[151]. - The net cash used in investing activities was$340.8 million, a decrease of 12% from $387.8 million in the prior year period[154]. - The company had$2.50 billion available under its committed revolving credit facility and approximately $0.8 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 $202.1 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 $15.8 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].