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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-23 · 128 added, 113 removed, 318 unchanged (43% of the section changed)

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Operational Risks

The Covid-19 pandemic may materially adversely affect our business operations and financial condition.

The Covid-19 pandemic continues to impact the global economy and could significantly disrupt our operations, key suppliers or third-party logistics providers, customers and ultimate end-users due to the spread of the virus, shelter in place orders, quarantines or other measures implemented to prevent the spread of the virus.

In some instances, the pandemic has impacted our business.

As part of government mandates, our Patrocinio operations in Brazil and Miski Mayo operations in Peru were temporarily suspended at the onset of the pandemic, but have since resumed operations.

Businesses have been impacted by short-term labor shortages due to illness, transportation issues such as trucking delays and port congestion which are slowing delivery of inputs to facilities and products to end customers.

At this time, the Company has only experienced limited adverse financial and operational Covid-19 related conditions.

An increase in severity to our employees, customers, vendors or supply chain or governmental mandates, could have a material adverse effect on our business, financial condition and/or results of operations.

The extent to which the Covid-19 pandemic impacts our operations and financial results will depend on future developments that are highly uncertain, including new information concerning the severity of the virus and variants and the cost, time and actions taken to contain its impact.

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Other cascading effects of the Covid-19 pandemic that are not currently foreseeable could materially increase our costs, negatively impact our revenue and/or adversely impact our results of operations and liquidity, possibly to a significant degree.

We cannot predict the severity or duration of any such impacts.

The Covid-19 pandemic could also have the effect of heightening many of the other risks described in this Item 1A of this 10-K Report.

Our operating results are highly dependent upon and fluctuate based upon business and economic conditions and governmental policies affecting the agricultural industry in which we or our customers operate.

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The most important of these factors are:

• weather and field conditions (particularly during periods of traditionally high crop nutrients consumption);

• weather and field conditions (particularly during periods of traditionally high crop nutrients application);

• quantities of crop nutrients imported and exported;

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• governmental policies, including farm and biofuel policies, which may directly or indirectly influence the number of acres planted, the level of inventories, the mix of crops planted or crop prices or otherwise negatively affect our operating results.

International market conditions, which are also outside of our control, may also significantly influence our operating results.

International market conditions and the success of our countervailing duty petitions, which are also outside of our control, may also significantly influence our operating results.

The international market for crop nutrients is influenced by such factors as the relative value of the U.S.

dollar and its impact upon the cost of importing crop nutrients, foreign agricultural policies, including subsidy policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries and other regulatory policies of foreign governments, as well as the laws and policies of the United States affecting foreign trade and investment, including use of tariffs.

affecting foreign trade and investment, including use of tariffs.

In 2020, we filed petitions with the DOC and ITC that requested the initiation of countervailing duty investigations into imports of phosphate fertilizers from Morocco and Russia.

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market for phosphate fertilizers, and thereby restore fair competition.

During the first quarter of 2021, the DOC made final affirmative determinations that countervailable subsidies were being provided by those governments and the ITC made final affirmative determinations that the U.S.

During the first quarter of 2021, the DOC made final affirmative determinations that countervailable subsidies were being provided by the Russian and Moroccan governments and the ITC made final affirmative determinations that the U.S.

phosphate fertilizer industry is materially injured by reason of subsidized phosphate fertilizer imports from Morocco and Russia.

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If the final determinations are challenged and subsequently reversed, the results could have an adverse effect on our business, and/or our financial condition or operating results.

The Covid-19 pandemic may materially adversely affect our business operations and financial condition.

In some instances, the pandemic has impacted our business.

Our businesses have been impacted by short-term labor shortages due to illness and transportation issues such

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as trucking delays and port congestion which are slowing delivery of inputs to facilities and products to end customers.

At this time, the Company has only experienced limited adverse financial and operational Covid-19 related conditions.

Other effects of the Covid-19 pandemic that are not currently foreseeable could materially increase our costs, negatively impact our revenue and/or adversely impact our results of operations and liquidity, possibly to a significant degree.

We cannot predict the severity or duration of any such impacts.

The Covid-19 pandemic could also have the effect of heightening many of the other risks described in this Item 1A of this Form 10-K.

Unfavorable worldwide economic and market conditions could adversely affect our business, financial condition or operating results.

Economic and market conditions, including inflation, supply chain challenges, high interest rates and foreign exchange volatility, have and may continue to have an impact on our business.

Our production costs have also increased due to higher prices for raw materials, including purchased nitrogen, sulfur and ammonia, as well as supply chain challenges, including increased costs and delays caused by transportation and labor shortages.

These adverse economic events have adversely affected, and may continue to adversely affect our operating results.

Our crop nutrient business is seasonal and varies based on application rates, which may result in carrying significant amounts of inventory and seasonal variations in working capital, and our inability to predict future seasonal crop nutrient demand accurately may result in excess inventory or product shortages.

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In contrast, we and other crop nutrient producers generally produce our products throughout the year.

As a result, we and/or our customers generally build inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons.

As a result, we and/or our customers generally build inventories during the low demand periods of the year in order to provide timely product availability during the peak sales seasons.

The seasonality of crop nutrient demand results in our sales volumes and net sales typically being the highest during the North American spring season and our working capital requirements typically being the highest just prior to the start of the spring season.

Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns.

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If seasonal demand exceeds our projections, we will not have enough product and our customers may acquire products from our competitors, which would negatively impact our profitability.

If seasonal demand is less than we expect, we will be left with excess inventory and higher working capital and liquidity requirements.

If seasonal demand is less than we expect, we will have excess inventory and higher working capital and liquidity requirements.

The degree of seasonality of our business can change significantly from year to year due to conditions in the agricultural industry and other factors.

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other changes in our commercial arrangements with unrelated third parties;

brine inflows at our Esterhazy, Saskatchewan mine or our other shaft mines;

brine inflows at our

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Esterhazy, Saskatchewan mine or our other shaft mines;

mechanical failure and accidents or other failures occurring in the course of operating activities, including at our gypstacks, clay settling areas and tailing dams;

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and other factors.

Reduced oil refinery operating rates in the United States could have a material adverse impact on our business, financial condition or operating results.

Reduced oil refinery operating rates in North America could have a material adverse impact on our business, financial condition or operating results.

Reduced oil refinery operating rates in the U.S.

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We have not yet become subject to such results in the sulfur procurement markets, if it becomes necessary to procure sulfur at higher costs, and if we are unable to pass those costs on in our product prices, or if we are unable to procure sulfur at volumes necessary for our operations, such events could have a material adverse effect on our phosphate business, and/or our financial condition or operating results.

Important raw materials and energy used in our businesses in the past have been and may in the future be the subject of volatile pricing.

Changes in the price of our raw materials have had, and could again have, a material adverse impact on our businesses.

Key inputs for the production of our finished goods, including fertilizer, sulfur and ammonia, and energy used in our businesses in the past have been and may in the future be the subject of volatile pricing and availability.

Changes in the price or availability of these key inputs for production of finished goods have had, and could again have, a material adverse impact on our businesses.

Fertilizer is a key input for production of our finished goods.

Natural gas, ammonia and sulfur are key raw materials used in the manufacture of phosphate crop nutrient products.

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Natural gas is also a significant energy source used in the potash solution mining process.

From time to time, our profitability has been and may in the future be adversely impacted by the price and availability of these raw materials and other energy costs.

From time to time, our profitability has been and may in the future be adversely impacted by the price and availability of these key inputs and other energy costs.

For example, the ongoing conflict between Russia and Ukraine and the related sanctions have led, and may continue to lead, to disruption and instability in global markets, supply chains and volatile pricing and availability of these key inputs and raw materials.

Because most of our products are commodities, there can be no assurance that we will be able to pass through increased costs to our customers.

A significant increase in the price of natural gas, ammonia, sulfur or energy costs that is not recovered through an increase in the price of our related crop nutrients products could have a material adverse impact on our business.

In addition, under our long-term CF Ammonia Supply Agreement, we have agreed to purchase approximately 545,000 to 725,000 tonnes of ammonia per year during a term that may extend until December 31, 2032, and at a price to be determined by a formula based on the prevailing price of U.S.

If the price of natural gas rises or the market price for ammonia falls outside of the range anticipated at execution of this agreement, we may not realize a cost benefit from the natural gas-based pricing over the term of the agreement, or the

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cost of our ammonia under the agreement could become a competitive disadvantage.

A significant increase in the price of fertilizer, natural gas, ammonia, sulfur or energy costs that is not recovered through an increase in the price of our related crop nutrients products could have a material adverse impact on our business.

In addition, under an ammonia supply agreement with CF, we have agreed to purchase approximately 545,000 to 725,000 tonnes of ammonia per year at a price to be determined by a formula based on the prevailing price of U.S.

At times, we have paid considerably more for ammonia under the agreement than what we would have paid had we purchased it in the spot market.

On October 14, 2022, we received notice from CF to exercise the bilateral, contractual right to end the ammonia supply agreement in its current form, effective January 1, 2025.

The contract allows for either party to exercise rights on certain dates through 2032 that can result in changes to terms and conditions.

We are subject to risks associated with our international sales and operations, which could negatively affect our sales to customers in foreign countries as well as our operations and assets in foreign countries.

Some of these factors may also make it less attractive to distribute cash generated by our operations outside the United States to our stockholders, or to utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes.

For 2021, we derived approximately 68% of our net sales from customers located outside of the United States.

Some of these factors may also make it less attractive to distribute cash generated by our operations outside the U.S.

to our stockholders, or to utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes.

For 2022, we derived approximately 75% of our net sales from customers located outside of the U.S.

As a result, we are subject to numerous risks and uncertainties relating to international sales and operations, including:

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• nationalization of properties by foreign governments;

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• the imposition of tariffs, exchange controls, trade barriers or other restrictions, or government-imposed increases in the cost of resources and materials necessary for the conduct of our operations or the completion of strategic initiatives, including with respect to our joint ventures;

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dollar and foreign currencies, particularly the Brazilian real and the Canadian dollar.

The occurrence of any of the above in the countries in which we operate or elsewhere could jeopardize or affect our ability to transact business there and could adversely affect our revenues and operating results and the value of our assets located outside of the United States.

In addition, tax regulations and tax audit practices, currency exchange controls and other restrictions may also make it economically unattractive to:

• distribute cash generated by our operations outside the United States to our stockholders;

• distribute cash generated by our operations outside the U.S.

to our stockholders;

• utilize cash generated by our operations in one country to fund our operations or repayments of indebtedness in another country or to support other corporate purposes.

Our assets outside of North America are located in countries with volatile conditions, which could subject us and our assets to significant risks.

We are a global business with substantial assets located outside of the United States and Canada.

Our operations in Brazil, China, India and Paraguay are a fundamental part of our business.

We have a majority interest in the joint venture entity operating the Miski Mayo Mine in Peru that supplies phosphate rock to us.

We are a global business with substantial assets located outside of the U.S.

Our operations in Brazil, China, India and Paraguay are fundamental to our business.

We have a majority interest in the joint venture entity operating the Miski Mayo Mine that supplies phosphate rock to us.

We also have a minority joint venture investment in MWSPC, which operates a mine and chemical complexes that produce phosphate fertilizers and other downstream products in the Kingdom of Saudi Arabia.

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There remain numerous social conflicts that exist within the natural resource sector in Peru.

As a result, there is potential for active protests against natural resource companies.

As a result, there is potential for active protests against natural resource extraction companies.

If the Government of Peru’s proactive efforts to address the social and environmental issues surrounding natural resource activities are not successful, protests could extend to or impact the Miski Mayo Mine and adversely affect our interest in the Miski Mayo joint venture or the supply of phosphate rock to us from the mine.

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Adverse weather conditions, including the impact of hurricanes, and excess heat, cold, snow, rainfall and drought, have in the past, and may in the future, adversely affect our operations, and result in increased costs, decreased sales or production and potential liabilities.

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In the past, hurricanes have resulted in physical damage to our facilities in Florida and Louisiana.

Additionally, water treatment costs due to high water balances, tend to increase significantly following excess rainfall from hurricanes or other adverse weather.

Additionally, water treatment costs tend to increase significantly following excess rainfall from hurricanes or other adverse weather.

Some of our Florida and Louisiana facilities have had, and others could have, high water levels that have required, or may require, treatment.

High water balances in the past at phosphate facilities in Florida also led the Florida Department of Environmental Protection (“ FDEP ”) to adopt rules requiring phosphate production facilities to meet more stringent process water management objectives for phosphogypsum stack systems.

In addition to the FDEP, the USEPA and the LDEQ also have similar requirements for water management objectives as outlined in our RCRC CD ’ s.

In addition to the FDEP, the U.S.

Environmental Protection Agency (“ EPA ”) and the Louisiana Department of Environmental Quality (“ LDEQ ”) also have similar requirements for water management objectives as outlined in our U.S.

Resource Conservation and Recovery Act (“ RCRA ”) CD ’ s.

If excess rainfall or hurricanes occur in coming years, our facilities may be required to take additional measures to manage process water to comply with existing or future requirements and these measures could potentially have a material effect on our business and financial condition.

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Adverse weather may also cause a loss of production and may disrupt our supply chain or adversely affect delivery of our products to our customers.

For example, oil refineries that supply sulfur to us may suspend operations as a result of a hurricane, and incoming shipments of ammonia can be delayed, disrupting production at our Florida or Louisiana facilities and delivery of our products.

In the second half of 2021, we experienced production impacts related to Hurricane Ida.

In the second half of 2021, we experienced production impacts related to Hurricane Ida on our Louisiana operations.

We also experienced down time and delayed shipments caused by impacts from Hurricane Ian which occurred at the end of the third quarter in 2022.

Excess rainfall and drought have in the past, and may in the future, adversely affect us.

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Drought can also lower river levels, adversely affecting delivery of our products to our customers.

Climate change could adversely affect us.

The impact of climate change on our operations and those of our customers and farmers remains uncertain.

Scientists have hypothesized that the impacts of climate change could include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperature levels and that these changes could be severe.

These impacts could vary by geographic location.

Severe climate change could impact our costs and operating activities, the location and cost of global grain and oilseed production, and the supply and demand for grains and oilseeds.

At the present time, we cannot predict the prospective impact of climate change on our results of operations, liquidity or capital resources, or whether any such effects could be material to us.

We do not own a controlling equity interest in our non-consolidated companies, some of which are foreign companies, and therefore our operating results and cash flow may be materially affected by how the governing boards and majority owners operate such businesses.

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In 2013, we entered into an agreement to form MWSPC, a joint venture in which we hold a 25% interest, to develop a mine and chemical complexes for an estimated $8.0 billion that produces phosphate fertilizers and other downstream products in the Kingdom of Saudi Arabia.

The success of MWSPC will depend on, among other matters, the completion of development and full commencement of operations of production facilities in the Kingdom of Saudi Arabia, the future success of current plans for completion of the development and for the operation of MWSPC, including the availability and affordability of necessary resources and materials and access to appropriate infrastructure, and any future changes in those plans, as well as the general economic and political stability of the region.

The success of MWSPC will depend on, among other matters, the availability and affordability of necessary resources and materials and access to appropriate infrastructure, availability and affordability of transportation, operational decisions of MWSPC management, ability to operate without material disruption to the facilities, as well as the general economic and political stability of the region.

We also hold minority ownership interests in other companies that are not controlled by us.

We expect that the operations and results of MWSPC will be, and the operations or results of some of the other companies are, significant to us, and their operations can affect our earnings.

The operations and results of MWSPC will be, and the operations or results of some of the other companies are, significant to us, and their operations can affect our earnings.

Because we do not control these companies either at the board or stockholder levels and because local laws in foreign jurisdictions and contractual obligations may place restrictions on monetary distributions by these companies, we cannot ensure that these companies will operate efficiently, pay dividends, or generally follow the desires of our management by virtue of our board or stockholder representation.

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Unsuccessful contract negotiations or adverse labor relations could result in strikes or slowdowns.

Any disruption may decrease our

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production and sales or impose additional costs to resolve disputes.

Any disruption may decrease our production and sales or impose additional costs to resolve disputes.

The risk of adverse labor relations may increase as our profitability increases because labor unions’ expectations and demands generally rise at those times.

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Over the past century, several potash mines experiencing water inflow problems have flooded.

Since December 1985, we have had inflows of salt saturated brine water into our Esterhazy, Saskatchewan K1 and K2 potash mines.

Due to an acceleration of brine inflows, on June 4, 2021 the Company announced a closure of our K1 and K2 potash mine shafts eliminating the risk of brine inflows.

Our potash mines at Colonsay, Saskatchewan, Carlsbad, New Mexico and our Esterhazy, Saskatchewan K3 mine (though not contiguous with the K1/K2 underground inflow region) are also subject to risks from the inflow of water as a result of our underground shaft mining operations.

Since December 1985, we have had inflows of brine water into our Esterhazy, Saskatchewan K1 and K2 potash mines.

Due to an acceleration of brine inflows, on June 4, 2021, the Company announced a closure of our K1 and K2 potash mine shafts.

Our potash mines at Colonsay, Saskatchewan, Carlsbad, New Mexico and our Esterhazy, Saskatchewan K3 mine (though not contiguous with the

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K1/K2 underground inflow region) are also subject to risks from the inflow of water as a result of our underground shaft mining operations.

Though minor inflows are regularly managed, it is possible that significant water inflows could occur which may present risks to our employees and our operations, and which may require us to incur brine management costs, change our mining processes, or abandon our operating mines .

See the “Key Factors that can Affect Results of Operations and Financial Condition” and “Potash Net Sales and Gross Margin” sections of our Management’s Analysis in this Form 10-K report and the Esterhazy closure costs in Note 25 of this report, which sections are incorporated herein by reference, for a discussion of costs, risks and other information relating to the brine inflows.

See the “Key Factors that can Affect Results of Operations and Financial Condition” and “Potash Net Sales and Gross Margin” sections of our Management’s Analysis in this Form 10-K and the Esterhazy closure costs in Note 26 of this Form 10-K, which sections are incorporated herein by reference, for a discussion of costs, risks and other information relating to the brine inflows.

Accidents or equipment failures occurring in the course of our operating activities could result in significant liabilities, interruptions or shutdowns of facilities or the need for significant safety or other expenditures.

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Our ammonia is generally stored and transported at high pressures or cryogenically.

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• We also use or produce other hazardous or volatile chemicals at some of our facilities.

If our safety procedures are not effective, an accident involving these other hazardous or volatile chemicals could result in serious injuries or death, or result in the shutdown of our facilities.

We use sulfuric acid in the production of concentrated phosphates in our Florida and Louisiana U.S.

operations and our Brazil operations.

We also use or produce other hazardous or volatile chemicals at some of our facilities.

Accidents at any of our ammonia facilities could result in serious injury or death and could adversely impact our operations.

• We also use or produce other hazardous chemicals at some of our facilities.

If our safety procedures are not effective, an accident involving these other hazardous chemicals could result in serious injuries or death, or result in the shutdown of our facilities.

We use sulfuric acid in the production of concentrated phosphates in our Florida and Louisiana operations and our Brazil operations.

We also use or produce other hazardous chemicals at some of our facilities.

An accident involving any of these chemicals could result in serious injuries or death, or evacuation of areas near an accident.

An accident could also result in property damage or shutdown of our facilities, or cause us to expend significant amounts to remediate safety issues or to repair damaged facilities.

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Regulatory Risks

The environmental, health and safety regulations and permitting requirements to which we are subject may have a material adverse effect on our business, financial condition and results of operations.

The environmental, health and safety regulations and requirements to which we are subject may have a material adverse effect on our business, financial condition and results of operations.

We are subject to numerous environmental, health and safety laws and regulations in the U.S., Canada, China, Brazil and other countries in which we operate.

These laws and regulations govern a wide range of matters, including environmental controls, land reclamation, discharges to air and water, remediation of hazardous substance releases permitting requirements and in some cases, demonstration of financial assurance.

These laws and regulations govern a wide range of matters, including environmental controls, land reclamation, discharges to air and water, remediation of hazardous substance releases and in some cases, demonstration of financial assurance.

They significantly affect our operating activities as well as the level of our operating costs and capital expenditures.

In some jurisdictions, environmental laws change frequently and it may be difficult for us to determine if we are in compliance with all material environmental laws at any given time.

In some jurisdictions, environmental laws change frequently and it may be challenging for us to achieve and maintain compliance with all material environmental laws at all times.

If we are not in compliance, we may be subject to enforcement or third-party claims, and may require new investment in our business.

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As a crop nutrient company producing and managing chemicals, we periodically have incurred and may incur liabilities and cleanup costs, under CERCLA and other environmental laws, with regard to our current or former facilities, adjacent or nearby third-party facilities or offsite disposal locations.

Our operations are dependent on having the required permits and approvals from governmental authorities.

Denial or delay by a government agency in issuing any of our permits and approvals or imposition of restrictive conditions on us with respect to these permits and approvals may impair our business and operations.

Our operations, including our mines, are dependent on having the required permits and approvals from governmental authorities.

Denial or delay by a government agency in issuing, modifying or renewing any of our permits and approvals or imposition of restrictive or cost prohibitive conditions on us with respect to these permits and approvals may impair our business and operations and could have a material adverse effect on our business, financial condition or results of operations.

For example, In Florida, local community involvement has become an increasingly important factor in the permitting process for mining companies, and various counties and other parties in Florida have in the past filed and continue to file lawsuits challenging the issuance or renewal of some of the permits we require.

These actions can significantly delay issuance of the permits we need to operate or expand operations.

We have included additional discussion about permitting for our phosphate mines in Florida under “Environmental, Health, Safety and Security Matters – Operating Requirements and Impacts – Permitting” in our Management’s Analysis.

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These proceedings may be brought by the government or private parties and may arise out of a variety of matters, including:

• Allegations that we have violated environmental, health and safety laws and regulations or that we are responsible for nuisance or other conditions on nearby properties.

We are currently involved in proceedings alleging that, or to review whether, we have violated environmental laws in the United States and Brazil.

• Allegations that we have violated environmental, health and safety laws and regulations or that we are responsible for adversely affecting nearby properties.

We are currently involved in proceedings alleging that, or to review whether, we have violated environmental laws in the U.S.

• Allegations by private parties that our operations have resulted in personal injury, property damage or damage to business operations.

• Antitrust, commercial, tax (including tax audits) and other disputes.

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administrative rulings that interrupt, impede or otherwise materially affect our business operations or criminal sanctions.

We have included additional information with respect to pending legal and regulatory proceedings in Note 22 of our Notes to Consolidated Financial Statements and in this Form 10-K Report in Part I, Item 3, “Legal Proceedings”.

The legal and regulatory proceedings to which we are currently or may in the future be subject may, depending on the circumstances, result in monetary damage awards, fines, penalties, other liabilities, injunctions or other court or administrative rulings that interrupt, impede or otherwise materially affect our business operations or criminal sanctions.

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We have included additional information with respect to pending legal and regulatory proceedings in Note 23 of our Notes to Consolidated Financial Statements and in this Form 10-K in Part I, Item 3, “Legal Proceedings”.

Environmental, health and safety and food and crop laws and regulations to which we are subject may become more stringent over time.

This could increase the effects on us of these laws and regulations, and the increased effects could be materially adverse to our business, operations, liquidity and/or results of operations.

Heightened regulation on food and crop inputs (including crop nutrients) and environmental, health and safety issues in the United States, Canada, China, Brazil, Paraguay and other countries where we operate can be expected to result in requirements that apply to us and our operations that may be more stringent than those described elsewhere in this report.

Heightened regulation on food and crop inputs (including crop nutrients) and environmental, health and safety issues in the U.S., Canada, China, Brazil, Paraguay and other countries where we operate can be expected to result in requirements that apply to us and our operations that may be more stringent than those described elsewhere in this report.

These requirements may include:

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increased levels of the financial assurance requirements to which we are subject, and increased efforts or costs to obtain permits or denial of permits.

and other matters that could increase our expenses, capital requirements or liabilities or adversely affect our business, liquidity or financial condition.

In addition, to the extent restrictions imposed in countries where our competitors operate, such as China, India, former Soviet Union countries or Morocco, are less stringent than in the countries where we operate, our competitors could gain cost or other competitive advantages over us.

These effects could be material.

• New or interpretations of existing statutes or regulations that impose new or more stringent standards, restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise on formerly mined land and other matters that could increase our expenses, capital requirements or liabilities or adversely affect our business, liquidity or financial condition.

Environmental justice considerations could have a material adverse effect on our business, financial condition or results of operations.

federal and some state governments increasingly are adopting standards or policies requiring environmental justice reviews in some permitting actions.

In general, they require governmental agencies to evaluate projects for disproportionate impacts to disadvantaged or already burdened communities.

If such conditions are found, they might result in a permit denial, or restrictive or cost prohibitive conditions imposed on our operations and may impair our business and operations and could have a material adverse effect on our business, financial condition or results of operations.

We are subject to financial assurance requirements as part of our routine business operations.

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The purpose of these requirements is to provide comfort to the government that sufficient funds will be available for the ultimate closure, post-closure care or reclamation of our facilities.

In some cases, we are able to comply through the satisfaction of applicable state financial strength tests.

In some cases, we comply through the satisfaction of applicable state financial strength tests.

But, if we are unable to do so, we must utilize alternative methods of complying with these requirements;

if we do not, we would be prevented from continuing our operations and also could be subject to enforcement proceedings brought by relevant government agencies.

Potential alternative methods of compliance include providing credit support in the form of cash escrows or trusts, surety bonds from surety or insurance companies, letters of credit from banks, or other forms of financial instruments or collateral to satisfy the financial assurance requirements.

In addition, we could negotiate a consent agreement that establishes a different form of financial assurance.

Alternative compliance methods include providing credit support in the form of cash escrows or trusts, surety bonds from surety or insurance companies, letters of credit from banks, or other forms of financial instruments or collateral to satisfy the financial assurance requirements.

Use of alternative means of financial assurance imposes additional expense on us.

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We have included additional discussion about financial assurance requirements under “Off-Balance Sheet Arrangements and Obligations – Other Commercial Commitments” in our Management’s Analysis.

Regulatory restrictions on greenhouse gas emissions and climate change regulations in the United States, Canada or elsewhere could adversely affect us, and these effects could be material.

Regulatory restrictions on greenhouse gas emissions and climate change regulations in the U.S., Canada or elsewhere could adversely affect us, and these effects could be material.

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Various governmental initiatives to limit greenhouse gas emissions are under way or under consideration around the world.

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facilities, increase our energy, raw material and transportation costs or limit their availability, or otherwise adversely affect our results of operations, liquidity or capital resources, and these effects could be material to us.

These initiatives could restrict our operating activities, require us to make changes in our operating activities that would increase our operating costs, reduce our efficiency or limit our output, require us to make capital improvements to our facilities, increase our energy, raw material and transportation costs or limit their availability, or otherwise adversely affect our results of operations, liquidity or capital resources, and these effects could be material to us.

Governmental greenhouse gas emission initiatives include, among others, the December 2015 agreement (the “ Paris Agreement ”) which was the outcome of the 21 st session of the Conference of the Parties under the United Nations Framework Convention on Climate Change (“ UNFCCC ” ).

The Paris Agreement, which was signed by nearly 200 nations, including the United States and Canada, entered into force in late 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius.

The Paris Agreement, which was signed by nearly 200 nations, including the U.S.

and Canada, entered into force in late 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius.

Each signatory is expected to develop its own plan (referred to as a Nationally Determined Contribution, or “ NDC ”) for reaching that goal.

In May 2017, the United States President announced that the United States would withdraw from the Paris Agreement.

On January 20, 2021 the United States rejoined the Paris Agreement, which was effective February 19, 2021.

In May 2017, the U.S.

announced that the it would withdraw from the Paris Agreement.

In January 2021, the U.S.

Previously , the U.S.

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’ s involvement in the Paris Agreement and the status of this NDC is unclear, various legislative or regulatory initiatives relating to greenhouse gases have been adopted or considered by the U.S.

Congress, the Environmental Protection Agency (“ EPA ” ) or various states and those initiatives already adopted may be used to implement a U.S.

Congress, the EPA or various states and those initiatives already adopted may be used to implement a U.S.

Additionally, more stringent laws and regulations may be enacted to accomplish the goals set out in the NDC.

Brazil ratified the Paris Agreement on September 21, 2016, committing to an NDC that includes an economy-wide target of 1.3 GtCO2e by 2025 and 1.2 GtCO2e by 2030.

Brazil ratified the Paris Agreement in September 2016, committing to an NDC that includes an economy-wide target of 1.3 GtCO2e by 2025 and 1.2 GtCO2e by 2030.

In 2020, Brazil submitted a new NDC, which reaffirms the country’s commitment to reducing total net greenhouse gas emissions by 37% in 2025 and by 43% in 2030.

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More stringent laws and regulations may be enacted to accomplish the goals set out in Canada’s NDC and Canada’s own long-term emissions reduction targets.

It is possible that future legislation or regulation addressing climate change, including in response to the Paris Agreement or any new international agreements, could adversely affect our operating activities, energy, raw material and transportation costs, results of operations, liquidity or capital resources, and these effects could be material or adversely impact our competitive advantage.

In addition, to the extent climate change restrictions imposed in countries where our competitors operate, such as India, former Soviet Union countries or Morocco, are less stringent than in the United States, Canada or Brazil our competitors could gain cost or other competitive advantages over us.

Future climate change could adversely affect us.

The prospective impact of climate change on our operations and those of our customers and farmers remains uncertain.

These impacts could vary by geographic location.

Severe climate change could impact our costs and operating activities, the location and cost of global grain and oilseed production, and the supply and demand for grains and oilseeds.

At the present time, we cannot predict the prospective impact of climate change on our results of operations, liquidity or capital resources, or whether any such effects could be material to us.

We use tailings, sediments and water dams to manage residual materials generated by our Brazilian mining operations.

If our safety procedures are not effective, an accident involving these impoundments could result in serious injuries or death, damage to property or the environment, or result in the shutdown of our facilities, any of which could materially adversely affect our results of operations in Brazil.

In March, 2022, the SEC issued proposed rules on climate change disclosure requirements that, if adopted as proposed, will require disclosure of extensive detailed climate-related information.

It is possible that such legislation and other future legislation or regulation addressing climate change, including the Paris Agreement or any new international agreements, could adversely affect our operating activities, energy, raw material and transportation costs, results of operations, liquidity or capital resources, and these effects could be material or adversely impact our competitive advantage.

In addition, to the extent climate change restrictions imposed in countries where our competitors operate, such as India, former Soviet Union countries or Morocco, are less stringent than in the U.S., Canada or Brazil our competitors could gain cost or other competitive advantages over us.

We use tailings, sediments and water to manage residual materials generated by our facilities, including Brazilian mining operations.

Mining and processing of potash and phosphate generate residual materials that must be managed both during the operation of the facility and upon facility closure.

Potash tailings, consisting primarily of salt and clay, are stored in surface disposal sites.

Phosphate residuals from mining are deposited in large tailing dams in Brazil and in clay settling areas and

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phosphogypsum stacks in the United States.

Phosphate residuals from mining or processing are deposited in large tailing dams and in clay settling areas and phosphogypsum stacks.

They are regularly monitored to evaluate structural stability and for leaks.

The failure of or a breach at any of our tailings dams and other impoundments at any of our operations could cause severe property and environmental damage and loss of life, could result in the shut down or idling of our facilities and could have a material adverse effect on our results of operations.

The failure of or a breach at any of our impoundments at any of our operations could cause severe property and environmental damage and loss of life, could result in the shut down or idling of our facilities and could have a material adverse effect on our results of operations.

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Legislation at both Brazilian federal and state levels has introduced new rules regarding tailings dam safety, construction, licensing and operations.

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See “Market Risk” in our Management’s Analysis and Note 15 of our Notes to Consolidated Financial Statements that is incorporated by reference in this report in Part II, Item 8.

A shortage or unavailability of railcars, tugs, barges and ships for carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation or equipment costs.

We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need to distribute raw materials between our mines and concentrates facilities and to deliver our products to our customers.

A shortage or unavailability of trucks, railcars, tugs, barges and ships for carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation or equipment costs.

We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need to distribute raw materials among our mines and concentrates facilities and to deliver our products to our customers.

In addition, the cost of transportation is an important part of the final sale price of our products.

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Higher costs for these transportation services or an interruption or slowdown due to factors including high demand, high fuel prices, labor disputes, layoffs or other factors affecting the availability of qualified transportation workers, adverse weather or other environmental events, or changes to rail, barge or ocean freight systems, could negatively affect our ability to produce our products or deliver them to our customers, which could affect our performance and results of operations.

Strong demand for grain and other products and a strong world economy increase the demand for and reduce the availability of transportation, both domestically and internationally.

Strong demand for grain and other products and a strong world economy increases the demand for and reduces the availability of transportation, both domestically and internationally.

Shortages of railcars, barges and ocean transport for carrying product and increased transit time may result in customer dissatisfaction, loss of sales and higher equipment and transportation costs.

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Delays and missed shipments due to transportation shortages, including vessels, barges, railcars and trucks, could result in customer dissatisfaction or loss of sales potential, which could negatively affect our performance and results of operations.

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Our success will continue to depend on our ability to attract and retain highly qualified and motivated employees.

We believe our continued success depends on the collective abilities and efforts of our employees.

Like many businesses, a significant number of our employees, including some of our most highly skilled employees with specialized expertise in general corporate matters, potash and phosphates operations, will be approaching retirement age throughout the next decade and beyond.

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In addition, we compete for a talented workforce with other businesses, particularly within the mining and chemicals industries, in general, and the crop nutrients industry, in particular.

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The extent to which current global or local economic and financial conditions, changes in global or local economic and financial conditions, or other factors may cause delays or cancellation of some of these ongoing or planned projects, or result in the acceleration of existing or new projects, is unclear.

In addition, certain of our products sold to China may be subject to additional tariffs due to ongoing trade tensions between China and the United States.

In addition, certain of our products sold to China may be subject to additional tariffs due to ongoing trade tensions between China and the U.S..

The level of exports by Chinese producers of concentrated phosphate crop nutrients depends to a significant extent on Chinese government actions to curb exports through, among other measures, prohibitive export taxes at times when the government believes it desirable to assure ample domestic supplies of concentrated phosphate crop nutrients to stimulate grain and oilseed production.

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Furthermore, certain governments as owners of some of our competitors may be willing to accept lower prices and profitability on their products in order to support domestic employment or other political or social goals.

To the extent other

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producers of crop nutrients enjoy competitive advantages or are willing to accept lower profit levels, the price of our products, our sales volumes and our profits may be adversely affected.

To the extent other producers of crop nutrients enjoy competitive advantages or are willing to accept lower profit levels, the price of our products, our sales volumes and our profits may be adversely affected.

Industry Risks

Future product or technological innovation could affect our business.

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Future product or technological innovations by third parties, such as the development of seeds that require less crop nutrients, the development of substitutes for our products or developments in the application of crop nutrients, if they occur, could have the potential to adversely affect the demand for our products and our results of operations, liquidity and capital resources.

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Any such write-down could adversely affect our results of operations and the value of our assets.

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We carry our inventories at the lower of cost or market.

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Any such effect could be material.

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Our estimates of future selling prices reflect in part the purchase commitments we have from our customers.

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Changes in tax laws or regulations or their interpretation, or exposure to additional tax liabilities, could materially adversely affect our operating results and financial condition.

We are subject to taxes, including income taxes, resource taxes and royalties, and non-income based taxes in the United States, Canada, China, Brazil and other countries where we operate.

We are subject to taxes, including income taxes, resource taxes and royalties, and non-income based taxes in the U.S., Canada, China, Brazil and other countries where we operate.

Changes in tax laws or regulations or their interpretation could result in higher taxes, which could materially adversely affect our operating results and financial condition.

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Increases in prices for crop nutrient, other agricultural inputs and grain may increase this risk.

We extend trade credit to our customers in the United States and throughout the world, in some cases for extended periods of time.

We extend trade credit to our customers in the U.S.

and throughout the world, in some cases for extended periods of time.

In Brazil, where there are fewer third-party financing sources available to farmers, we also have several programs under which we guarantee customers’ financing from financial institutions that they use to purchase our products.

As our exposure to longer trade credit extends throughout the world and use of guarantees in Brazil increases, we are increasingly exposed to

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the risk that some of our customers will not pay us or the amounts we have guaranteed.

As our exposure to longer trade credit extends throughout the world and use of guarantees in Brazil increases, we are increasingly exposed to the risk that some of our customers will not pay us or the amounts we have guaranteed.

Additionally, we become increasingly exposed to risk due to weather and crop growing conditions, fluctuations in crop nutrient prices, commodity prices or foreign currencies, and other factors that influence the price, supply and demand for agricultural commodities.

Significant defaults by our customers could adversely affect our financial condition and results of operations.

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Due to the global nature of our operations, we are exposed to currency exchange rate changes, which may cause fluctuations in earnings and cash flows.

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During times of a strengthening dollar, our net earnings can be reduced due to transaction currency losses arising from these exposures of U.S.

Dollar denominated liabilities held in the Brazilian and Canadian entities and Brazilian Real denominated assets held in US entities.

dollar denominated liabilities held in the Brazilian and Canadian entities and Brazilian real denominated assets held in U.S.

To reduce economic risk and volatility on expected cash flows that are denominated in the Canadian dollar and Brazilian real, we use financial instruments that may include forward contracts, options or collars when unable to naturally offset the exposures.

Unresolved Staff Comments.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors