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Item 2. Management’s Discussion and Analysis

2024-05-02 compared with 2023-11-08 · 162 added, 269 removed, 228 unchanged (65% of the section changed)

4 unchanged sentences

Results of Operations

The following table shows the results of operations for the three and nine months ended September 30, 2023 and September 30, 2022:

Three months ended Nine months ended

September 30, 2023-2022 September 30, 2023-2022

(in millions, except per share data) 2023 2022 Change Percent 2023 2022 Change Percent

The following table shows the results of operations for the three months ended March 31, 2024 and March 31, 2023:

Three months ended

March 31, 2024-2023

(in millions, except per share data) 2024 2023 Change Percent

Net sales $ 2,679.4 $ 3,604.3 $ (924.9) (26) %

3 unchanged sentences

Selling, general and administrative expenses 106.8 127.7 (20.9) (16) %

Other operating expense 143.9 222.8 (78.9) (35) % 214.0 337.6 (123.6) (37) %

Other operating expense (income) 119.5 (1.9) 121.4 NM

Operating earnings 172.9 544.6 (371.7) (68) %

1 unchanged sentence

Foreign currency transaction (loss) gain (100.3) 51.4 (151.7) NM

Other expense (50.1) (2.3) (47.8) NM (66.1) (37.8) (28.3) 75 %

(Loss) earnings from consolidated companies before income taxes (18.6) 1,060.7 (1,079.3) NM 1,002.0 3,965.3 (2,963.3) (75) %

(Benefit from) provision for income taxes (5.9) 276.6 (282.5) NM 220.8 1,018.3 (797.5) (78) %

(Loss) earnings from consolidated companies (12.7) 784.1 (796.8) NM 781.2 2,947.0 (2,165.8) (73) %

Other income (expense) 0.6 (8.9) 9.5 NM

Earnings from consolidated companies before income taxes 25.2 546.0 (520.8) (95) %

Provision for income taxes 6.2 118.3 (112.1) (95) %

Earnings from consolidated companies 19.0 427.7 (408.7) (96) %

Equity in net earnings of nonconsolidated companies 37.5 31.3 6.2 20 %

1 unchanged sentence

Net earnings attributable to noncontrolling interests 11.3 24.2 (12.9) (53) %

Net (loss) earnings attributable to Mosaic $ (4.2) $ 841.7 $ (845.9) NM $ 799.6 $ 3,059.6 $ (2,260.0) (74) %

Diluted net (loss) earnings per share attributable to Mosaic $ (0.01) $ 2.42 $ (2.43) NM $ 2.39 $ 8.50 $ (6.11) (72) %

Net earnings attributable to Mosaic $ 45.2 $ 434.8 $ (389.6) (90) %

Diluted net earnings per share attributable to Mosaic $ 0.14 $ 1.28 $ (1.14) (89) %

Diluted weighted average number of shares outstanding 323.5 338.7

Overview of Consolidated Results for the three months ended September 30, 2023 and 2022

For the three months ended September 30, 2023, Mosaic had a net loss of $(4.2) million, or $(0.01) per diluted share, compared to net income of $841.7 million, or $2.42 per diluted share, for the prior year period.

Net sales for the three months ended September 30, 2023 decreased 34% compared to the same period of the prior year, driven by lower average selling prices, as discussed further below.

Net income for the three months ended September 30, 2023 was also negatively impacted by a foreign currency transaction loss of $96.9 million, compared to a foreign currency transaction loss of $61.1 million in the prior year period.

Overview of Consolidated Results for the three months ended March 31, 2024 and 2023

For the three months ended March 31, 2024, Mosaic had net income of $45.2 million, or $0.14 per diluted share, compared to net income of $434.8 million, or $1.28 per diluted share, for the prior year period.

Net sales for the three months ended March 31, 2024 decreased 26% compared to the same period of the prior year, driven primarily by lower average selling prices, as discussed further below.

Net income for the three months ended March 31, 2024 was also negatively impacted by a foreign currency transaction loss of $100.3 million, compared to a foreign currency transaction gain of $51.4 million in the prior year period.

Significant factors affecting our results of operations and financial condition are listed below.

Certain of these factors are discussed in more detail in the following sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

For the three months ended September 30, 2023, operating results in all of our segments were impacted by lower average sales prices compared to the prior year period.

Global markets have softened compared to the prior year period, with a rebound in supply combined with buyers delaying purchases in anticipation of lower prices.

Buyer deferral reversed in the later part of the current year period and seasonal price strength was seen in many markets.

Our operating results for the three months ended September 30, 2023 were unfavorably impacted in our Phosphate segment compared to the prior year period due to lower average selling prices, driven by the factors described above.

This was partially offset by lower raw material costs, primarily sulfur and ammonia.

Our operating results for the three months ended September 30, 2023 were unfavorably impacted in our Potash segment due to lower average sales prices compared to the prior year period, driven by the factors discussed above.

Current period operating results were favorably impacted by higher sales volumes compared to the prior year period, as fall demand in North America was stronger in the current year period.

Additionally, in the third quarter of the current year, Canpotex shipments were negatively impacted by supply chain challenges and an equipment failure at one of their port facilities.

This equipment failure is continuing into the fourth quarter of this year.

Our operating results for the three months ended September 30, 2023 were unfavorably impacted in our Mosaic Fertilizantes segment driven by the factor described above.

Sales volumes were up compared to the prior year period as a result of our growth strategy to expand our presence in Brazil.

In addition to the items referenced above ,

• During the three months ended September 30, 2023, we repurchased 3,948,783 shares of Common Stock in the open market for approximately $150.0 million, at an average purchase price of $37.99 per share.

• Countervailing Duty Orders.

In April 2021, the U.S.

Department of Commerce (“DOC”) issued countervailing duty (“CVD”) orders on imports of phosphate fertilizers from Morocco and Russia, in response to petitions filed by Mosaic.

The purpose of the petitions was to remedy the injury to the U.S.

phosphate fertilizer industry caused by imports that benefit from unfair foreign subsidies, and thereby restore fair competition.

CVD orders normally stay in place for at least five years, with possible extensions.

Moroccan and Russian producers have initiated actions at the U.S.

Court of International Trade (“CIT”) seeking to overturn the orders.

Mosaic has also made claims contesting certain aspects of DOC’s final determinations that, we believe, failed to capture the full extent of Moroccan and Russian subsidies.

These litigation challenges remain underway.

Most recently, in July and September 2023, the CIT issued three remand rulings – one addressing DOC’s determination in the CVD investigation of phosphate fertilizers from Russia, one addressing DOC’s determination in the CVD investigation of phosphate fertilizers from Morocco, and one addressing the U.S.

International Trade Commission’s determination in antidumping and countervailing duty investigations of phosphate fertilizers from Russia and Morocco – instructing the agencies to reconsider certain aspects of the rulings that were the basis for issuing the CVD orders.

When a CVD order is in place, DOC normally conducts annual administrative reviews, which establish a final CVD assessment rate for past imports during a defined period, and a CVD cash deposit rate for future imports.

In November 2023, DOC announced the final results of the first administrative reviews for the CVD orders on phosphate fertilizers for Russia and Morocco, covering the period November 30, 2020 to December 31, 2021.

DOC calculated new subsidy rates of 2.12% for Moroccan producer OCP and 28.50% for Russian producer PhosAgro.

These determinations are subject to appeal to the CIT.

DOC is also conducting administrative reviews covering the period January 1, 2022 to December 31, 2022.

The applicable final CVD assessment rates and cash deposit rates for imports of phosphate fertilizer from Morocco and Russia could change as a result of these various proceedings and potential associated appeals, whether in federal courts or at the World Trade Organization.

Overview of Consolidated Results for the nine months ended September 30, 2023 and 2022

Net earnings attributable to Mosaic for the nine months ended September 30, 2023 was $799.6 million, or $2.39 per diluted share, compared to net earnings of $3.1 billion, or $8.50 per diluted share, for the same period a year ago.

Net income for the nine months ended September 30, 2023 was positively impacted by a foreign currency transaction gain of $103.0 million, compared to $22.4 million in the prior year period.

Results for the nine months ended September 30, 2023 reflected the factors discussed above in the discussion for the three months ended September 30, 2023, in addition to those noted below.

Certain of these factors are discussed in more detail in the following sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Operating results in our Phosphate segment for the nine months ended September 30, 2023 were unfavorably impacted compared to the prior year period due to lower average selling prices, driven by the factors described above in the three month

This was partially offset by lower raw material costs, primarily sulfur and ammonia.

Operating results in the current year period were positively impacted by higher finished product sales volumes driven by buyers deferring purchases in the prior year period in anticipation of lower sales prices.

Operating results in our Potash segment for the nine months ended September 30, 2023 were unfavorably impacted by a decrease in the average selling price of potash compared to the prior year period as described above in the three month discussion.

Current year operating results were also unfavorably impacted by higher idle plant and maintenance turnaround costs due to the temporary idling of our Colonsay, Saskatchewan mine in the first half of the year due to market conditions and the timing of turnarounds compared to the prior year.

For the nine months ended September 30, 2023, operating results in our Mosaic Fertilizantes segment were unfavorably impacted by a decrease in average sales prices in the current year compared to the prior year period as discussed above in the threemonth discussion.

Sales volumes of finished goods, including performance products, were higher in the current year period compared to the same period in the prior year, due to an increased customer base as a result of our growth strategy to expand our presence in Brazil.

Results were also favorably impacted by a decrease in product costs for our distribution business, and lower sulfur and ammonia costs in our production business.

Sales volumes of other products, primarily gypsum and acids, were lower than the prior year period driven by unfavorable weather and sulfuric acid availability in the current year period.

Other Highlights

In our Phosphate segment, operating results for the three months ended March 31, 2024 were negatively impacted by lower average selling prices and lower sales volumes compared to the prior year period.

Although average selling prices were lower than the same period of the prior year, they have trended upwards since the third quarter of 2023, driven by demand and a strong spring application season in North America.

Since March 31, 2024, selling prices have softened in North America, as spring buying activity has wound down.

Additionally, average selling prices in the current year period were influenced by lower raw material prices, primarily sulfur and ammonia, which are driven by global supply and demand.

Sales volumes in the current year period were unfavorably impact by lower production levels resulting from planned maintenance and turnaround activity at our sites.

Phosphate operating results were also impacted by an unfavorable product mix, as our sales volumes included a larger proportion of purchased tonnes than the prior year period.

In our Potash segment, operating results for the three months ended March 31, 2024 were unfavorably impacted from lower average selling prices compared to the prior year period, driven by a rebound in global supply.

This impact was partially offset by higher sales volumes compared to the prior year period as demand in North America was driven by a strong spring application season in North America in the current year period.

In our Mosaic Fertilizantes segment, operating results for the three months ended March 31, 2024 were favorable compared to the same period in the prior year.

While average selling prices and sales volumes declined in the current year period, operating results benefited from lower raw material cost and de-stocking of high priced inventory, which negatively impacted the prior year period.

Sales volumes were down compared to the prior year period as a result of deferred customer demand in the Brazil agricultural market.

In addition to the items referenced above ,

• On January 12, 2023, we completed the sale of the Streamsong Resort ® (the “ Resort ”) and the approximately 7,000 acres on which it sits for net proceeds of $158 million.

The Resort is a destination resort and conference center, which we developed in an area of previously mined land as part of our long-term business strategy to maximize the value and utility of our extensive land holdings in Florida.

In addition to a hotel and conference center, the Resort includes multiple golf courses, a clubhouse and ancillary facilities.

The sale resulted in a gain of $57 million.

• On January 17, 2023, we purchased the other 50% interest of equity of Gulf Sulphur Services (“ GSS ”), which gives us full ownership and secures control of our sulfur supply chain in the Gulf of Mexico.

• On February 24, 2023, pursuant to existing stock repurchase authorizations, we entered into an accelerated share repurchase agreement (the “ 2023 ASR Agreement ”) with a third-party financial institution to repurchase $300 million of our Common Stock.

During the nine months ended September 30, 2023, we repurchased 12,639,719 shares of Common Stock in the open market for approximately $598.0 million.

This includes 5,624,574 shares purchased under the 2023 ASR Agreement.

• In March 2023, we paid a special dividend of $0.25 per share to our stockholders.

• In May 2023, we entered into a 10-year senior unsecured term loan facility whereby we can draw up to $700 million.

The term loan matures on May 18, 2033.

As of September 30, 2023, we have not drawn any amounts under this facility.

• During the quarter ended March 31, 2024, we repurchased 3,398,700 shares of Common Stock in the open market for approximately $108.4 million at an average purchase price of $31.89.

• Subsequent to quarter end, on April 29, 2024, we entered into an agreement with Saudi Arabian Mining Company (“ Ma’aden ”) to exchange our 25% ownership of the Ma'aden Wa’ad al Shamal Phosphate Company for 111,012,433 shares of Ma’aden which are currently valued at approximately $1.5 billion.

We expect this transaction to close later in 2024.

Phosphate Net Sales and Gross Margin

The following table summarizes the Phosphate segment’s net sales, gross margin, sales volume, selling prices and raw material prices:

Three months ended Nine months ended

September 30, 2023-2022 September 30, 2023-2022

Three months ended

March 31, 2024-2023

(in millions, except price per tonne or unit)

2023 2022 Change Percent 2023 2022 Change Percent

2024 2023 Change Percent

North America

30 unchanged sentences

Three months ended September 30, 2023 and September 30, 2022

The Phosphate segment’s net sales were $1.0 billion for the three months ended September 30, 2023, compared to $1.6 billion for the three months ended September 30, 2022.

The decrease in net sales in the current year period was primarily due to lower average finished goods sales prices, which had an unfavorable impact of approximately $550 million compared to the prior year period.

Net sales were also unfavorably impacted by approximately $40 million, due to lower sales of raw materials.

Our average finished product selling price decreased 38% to $569 per tonne for the three months ended September 30, 2023, compared to $924 per tonne in the prior year period, due to the factors discussed in the Overview.

The Phosphate segment’s sales volumes of finished products was comparable for the three months ended September 30, 2023 and September 30, 2022.

Gross margin for the Phosphate segment decreased to $87.5 million for the three months ended September 30, 2023, from $357.9 million for the three months ended September 30, 2022.

The decrease in gross margin in the current year period was primarily due to lower sales prices, which unfavorably impacted gross margin by approximately $550 million.

Gross margin was also unfavorably impacted by approximately $80 million due to higher conversion costs, higher cost of blended rock and other product costs.

This was partially offset by decreased raw material prices in the current period, driven by sulfur and ammonia, which favorably impacted gross margin by approximately $290 million.

In addition, lower costs of approximately $50 million, primarily related to the timing of turnarounds and idle costs in the prior year that did not repeat in the current year;

$10 million of non-product sales such as ammonia, sulfur and phosphate rock, and $10 million related to lower freight and logistics costs in the current year period compared to the prior year, also partially offset this gross margin variance.

The average consumed price for ammonia for our North America operations decreased 47% to $353 per tonne for the three months ended September 30, 2023, from $665 in the same period a year ago.

The average consumed sulfur price for our North America operations decreased 64%, to $156 per long ton, for the three months ended September 30, 2023, from $436 in the same period a year ago.

Three months ended March 31, 2024 and March 31, 2023

The Phosphate segment’s net sales were $1.2 billion for the three months ended March 31, 2024, compared to $1.4 billion for the three months ended March 31, 2023.

The decrease in net sales in the current year period was primarily due to lower finished goods sales volumes, which had an unfavorable impact of approximately $125 million, and lower averaged finished goods sales prices, which had an unfavorable impact of approximately $80 million, in each case, compared to the prior year period.

Our average finished product selling price decreased 6% to $677 per tonne for the three months ended March 31, 2024, compared to $717 per tonne in the prior year period, due to the factors discussed in the Overview.

The Phosphate segment’s sales volumes of finished products decreased to 1.6 million for the three months ended March 31, 2024 compared to 1.8 million in the prior year period, due to the impact of planned maintenance and turnaround activity discussed in the Overview.

Gross margin for the Phosphate segment decreased to $159.4 million for the three months ended March 31, 2024, from $259.3 million for the three months ended March 31, 2023.

The decrease in gross margin in the current year period was primarily due

to lower sales prices and sales volumes, which unfavorably impacted gross margin by approximately $80 million and $30 million, respectively, compared to the prior year.

Gross margin was also unfavorably impacted by approximately $40 million due to higher conversion costs and higher costs of approximately $15 million, related to the timing of planned maintenance and turnaround activity in the current year compared to the prior year period.

Additionally, current period gross margin was also unfavorably impacted by approximately $20 million due lower rock sales prices and higher sales volumes at Miski Mayo, higher freight costs of approximately $15 million and approximately $35 million of other costs, primarily related to unfavorable product mix of a higher proportion of purchased tonnes compared to the same period in the prior year.

This was partially offset by the favorable impact of lower raw material costs, primarily sulfur and ammonia, of approximately $130 million.

The average consumed price for ammonia for our North America operations decreased 33% to $404 per tonne for the three months ended March 31, 2024, from $605 in the same period a year ago.

The average consumed sulfur price for our North America operations decreased 40%, to $142 per long ton, for the three months ended March 31, 2024, from $236 in the same period a year ago.

The purchase prices of these raw materials are driven by global supply and demand.

The consumed ammonia and sulfur prices also include transportation, transformation and storage costs.

The average consumed cost of purchased and produced phosphate rock increased to $81 per tonne for the three months ended September 30, 2023, from $68 per tonne for the three months ended September 30, 2022, primarily due to higher fixed cost absorption caused by lower production volume in the current year period.

For the three months ended September 30, 2023, our North America phosphate rock production decreased to 2.4 million tonnes from 2.9 million tonnes during the same period of the prior year, due to geology of rock and operational challenges.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased 4% for the three months ended September 30, 2023 from the prior year period.

Our operating rate for processed phosphate production decreased to 64% for the three months ended September 30, 2023, from 67% for the same period in 2022, primarily due to an equipment failure at our Faustina, Louisiana location.

We expect the repairs to be completed during the fourth quarter of this year.

Nine months ended September 30, 2023 and September 30, 2022

The Phosphate segment’s net sales were $3.7 billion for the nine months ended September 30, 2023, compared to $4.9 billion for the nine months ended September 30, 2022.

The decrease in net sales was primarily due to lower finished product selling prices in the current year period, which unfavorably impacted net sales by approximately $1.5 billion compared to the prior year period.

This was partially offset by higher sales volumes of finished goods, which favorably impacted net sales by approximately $350 million.

Net sales were also unfavorably impacted by approximately $100 million due to lower raw materials sales driven by lower sales prices and volumes of sulfur and ammonia.

Our average finished product selling price was $642 per tonne for the nine months ended September 30, 2023, a decrease of $308 per tonne from the same period a year ago, due to the factors discussed in the Overview.

The Phosphate segment’s sales volumes of finished products increased by 8% for the nine months ended September 30, 2023, compared to the same period in the prior year, due to the factors discussed in the Overview.

Gross margin for the Phosphate segment decreased to $563.0 million for the nine months ended September 30, 2023, from $1.5 billion for the nine months ended September 30, 2022.

The decrease in gross margin in the current year period was primarily due to the impact of lower finished product prices of approximately $1.5 billion compared to the prior year period.

Gross margin was also unfavorably impacted by approximately $170 million, due to increased conversion and other costs resulting from higher maintenance and water management costs in the current period.

Increased cost of blended rock unfavorably impacted gross margin by approximately $70 million, as discussed below.

These increases were partially offset by lower raw material costs of sulfur and ammonia as discussed below, which impacted gross margin by approximately $500 million.

Gross margin was also favorably impacted by approximately $140 million, due to higher sales volumes, and lower costs of approximately $80 million, related to the timing of idle plant and turnaround costs in the current year period.

The average consumed price for ammonia for our North America operations was $449 per tonne for the nine months ended September 30, 2023, compared to $583 per tonne in the same period a year ago.

The average consumed price for sulfur for our North America operations decreased to $191 per long ton for the nine months ended September 30, 2023, from $400 per long ton in the same period a year ago.

The purchase prices of these raw materials are driven by global supply and demand.

The average consumed cost of purchased and produced phosphate rock increased to $75 per tonne for the nine months ended September 30, 2023, compared to $68 per tonne for the prior year period, primarily due to using more Miski Mayo rock in the current year period.

Our North America phosphate rock production decreased to 6.7 million tonnes for the nine months ended September 30, 2023, compared to 7.5 million for the nine months ended September 30, 2022, due to geology of rock and operational challenges.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients increased by 1%, to 5.1 million tonnes for the nine months ended September 30, 2023, compared to 5.0 million tonnes in the prior year period.

For the nine months ended September 30, 2023 and September 30, 2022, our operating rate for processed phosphate production was 68%.

The average consumed cost of purchased and produced phosphate rock increased to $81 per tonne for the three months ended March 31, 2024, from $77 per tonne for the three months ended March 31, 2023.

For the three months ended March 31, 2024, our North America phosphate rock production increased to 2.4 million tonnes from 2.1 million tonnes during the same period of the prior year.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased 14% for the three months ended March 31, 2024 from the prior year period due to planned maintenance and turnaround activity.

As a result, our operating rate for processed phosphate production decreased to 64% for the three months ended March 31, 2024, from 74% for the same period in 2023.

At the end of the current period, our Riverview, Florida facility experienced a fire which is expected to have a modest impact on production volumes in April 2024.

Potash Net Sales and Gross Margin

The following table summarizes the Potash segment’s net sales, gross margin, sales volume and selling price:

Three months ended Nine months ended

September 30, 2023-2022 September 30, 2023-2022

Three months ended

March 31, 2024-2023

(in millions, except price per tonne or unit)

2023 2022 Change Percent 2023 2022 Change Percent

2024 2023 Change Percent

North America

18 unchanged sentences

(b) Includes sales volumes of K-Mag ® , Aspire ® and animal feed ingredients.

Three months ended September 30, 2023 and September 30, 2022

The Potash segment’s net sales decreased to $719.9 million for the three months ended September 30, 2023, compared to $1.4 billion in the same period a year ago.

Three months ended March 31, 2024 and March 31, 2023

The Potash segment’s net sales decreased to $643.1 million for the three months ended March 31, 2024, compared to $906.6 million in the same period a year ago.

The decrease was primarily due to lower selling prices, which had an unfavorable impact on net sales of approximately $380 million compared to the same period in the prior year.

This was partially offset by higher sales volumes in North America, which favorably impacted net sales by approximately $110 million.

Our average finished product selling price was $324 per tonne for the three months ended September 30, 2023, compared to $669 per tonne for the same period a year ago, as a result of the factors described in the Overview.

The Potash segment’s sales volumes of finished products increased to 2.2 million tonnes for the three months ended September 30, 2023, compared to 2.1 million tonnes in the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment decreased to $210.4 million for the three months ended September 30, 2023, from $798.7 million in the same period of the prior year.

Our average finished product selling price was $297 per tonne for the three months ended March 31, 2024, compared to $475 per tonne for the same period a year ago, as a result of the factor described in the Overview.

The Potash segment’s sales volumes of finished products increased to 2.2 million tonnes for the three months ended March 31, 2024, compared to 1.9 million tonnes in the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment decreased to $211.7 million for the three months ended March 31, 2024, from $413.3 million in the same period of the prior year.

The decrease in gross margin in the current year period is primarily due to lower selling prices, which negatively impacted gross margin by approximately $380 million compared to the prior year period.

Higher idle and turnaround costs negatively impacted gross margin by approximately $20 million compared to the prior year, largely due to the timing of the turnaround at our Esterhazy, Saskatchewan mine.

These impacts were partially offset by a reduction in Canadian resource taxes and royalties of $195 million compared to the prior year, as discussed below.

Gross margin was also favorably impacted by approximately $40 million, due to higher sales volumes and foreign currency impacts of approximately $30 million in the current year period, compared to the same period in the prior year.

We had expense of $ 85.6 million from Canadian resource taxes for the three months ended September 30, 2023, compared to $258.4 million in the same period a year ago.

Canadian royalty expense decreased to $8.7 million for the three months ended September 30, 2023, compared to $30.5 million for the three months ended September 30, 2022.

This decrease was partially offset by higher sales volumes, which favorably impacted gross margin by approximately $80 million compared to the prior year, and lower Canadian resource taxes and royalties of $65 million, as discussed below.

Lower idle and turnaround costs favorably impacted gross margin by approximately $15 million compared to the prior year, largely due to the idling of our Colonsay, Saskatchewan mine in the prior year period.

Gross margin was also favorably impacted by foreign currency impacts of approximately $10 million in the current year period, compared to the same period in the prior year.

We had expense of $ 64.5 million from Canadian resource taxes for the three months ended March 31, 2024, compared to $120.8 million in the same period a year ago.

Canadian royalty expense decreased to $10.1 million for the three months ended March 31, 2024, compared to $18.6 million for the three months ended March 31, 2023.

The fluctuations in Canadian resource taxes and royalties are a result of a decrease in our sales revenue and margins.

Our operating rate for potash production was 81% for the current year period, compared to 69% in the prior year period.

The decreased operating rate reflects the summer turnaround at our Esterhazy, Saskatchewan mine in the current year period.

Nine months ended September 30, 2023 and September 30, 2022

The Potash segment’s net sales decreased to $2.5 billion for the nine months ended September 30, 2023, compared to $4.1 billion in the same period a year ago.

The decrease was due to lower selling prices, which had an unfavorable impact on net sales of approximately $1.7 billion.

This was partially offset by higher sales volumes of approximately $110 million.

Our average potash selling price was $393 per tonne for the nine months ended September 30, 2023, compared to $653 per tonne for the same period a year ago, due to the factors discussed above in the Overview.

The Potash segment’s sales volumes for the nine months ended September 30, 2023 increased 1% compared to the same period a year ago.

Gross margin for the Potash segment decreased to $959.7 million for the nine months ended September 30, 2023, from $2.3 billion for the same period in the prior year.

Gross margin was unfavorably impacted by approximately $1.7 billion due to the decrease in average selling prices.

Gross margin was also unfavorably impacted by increased idle and turnaround costs of approximately $60 million, largely due to the idling of our Colonsay, Saskatchewan mine during the first half of the current year, and higher product costs driven by lower production volumes and product mix of approximately $20 million compared to the prior year period.

This was partially offset by lower Canadian resource taxes and royalties of approximately $437 million in the current year period, as discussed below, and by slightly higher sales volumes, which had a favorable impact on net sales of approximately $30 million.

We incurred $301.4 million in Canadian resource taxes for the nine months ended September 30, 2023, compared to $690.1 million in the same period a year ago.

Canadian royalty expense decreased to $40.3 million for the nine months ended September 30, 2023, compared to $89.0 million for the nine months ended September 30, 2022.

The fluctuations in Canadian resource taxes and royalties are due to the decreases in our sales revenues and margins.

Our operating rate was 68% for the current year period, compared to 82% in the prior year period.

The decreased operating rate in the current year period reflects the temporary idling of our Colonsay, Saskatchewan mine during the first half of the year due to market conditions, and down time for maintenance turnarounds at our Esterhazy, Saskatchewan and Carlsbad, New Mexico mines.

The increased operating rate reflects higher production across our Canadian mines due to higher capability at our Esterhazy mine and our Colonsay mine operating for a portion of the current year period, versus being temporarily idled in the prior year period.

Mosaic Fertilizantes Net Sales and Gross Margin

The following table summarizes the Mosaic Fertilizantes segment’s net sales, gross margin, sales volume and selling price.

Three months ended Nine months ended

September 30, 2023-2022 September 30, 2023-2022

Three months ended

March 31, 2024-2023

(in millions, except price per tonne or unit)

2023 2022 Change Percent 2023 2022 Change Percent

2024 2023 Change Percent

Net Sales $ 886.4 $ 1,343.3 $ (456.9) (34) %

Cost of goods sold 811.2 1,344.4 (533.2) (40) %

Gross margin $ 106.1 $ 348.3 $ (242.2) (70) % $ 117.8 $ 1,017.8 $ (900.0) (88) %

Gross margin $ 75.2 $ (1.1) $ 76.3 NM

Gross margin as a percent of net sales 8 % — %

24 unchanged sentences

(a) Excludes internally produced volumes used in purchased nutrients for distribution.

Three months ended September 30, 2023 and September 30, 2022

The Mosaic Fertilizantes segment’s net sales decreased to $1.7 billion for the three months ended September 30, 2023, from $2.6 billion in the same period a year ago.

The decrease in net sales was due to lower finished product sales prices, which unfavorably impacted net sales by approximately $1.0 billion, and lower sales prices of other products, primarily acids, which unfavorably impacted net sales by approximately $60 million.

This was partially offset by higher finished goods sales volumes, which had a favorable impact of approximately $190 million, and favorable foreign currency impacts of approximately $20 million.

Our average finished product selling price was $566 per tonne for the three months ended September 30, 2023, compared to $931 per tonne for the same period a year ago, due to the decrease in global sales prices as discussed in the Overview.

The Mosaic Fertilizantes segment’s sales volumes of finished products increased 8% for the three months ended September 30, 2023, compared to the same period a year ago, due to increased demand in our distribution business.

Gross margin for the Mosaic Fertilizantes segment decreased to $106.1 million for the three months ended September 30, 2023, from $348.3 million in the same period of the prior year.

The decrease in gross margin was primarily due to an unfavorable impact of approximately $1.0 billion related to the decrease in average selling prices during the current year period, compared to the prior year period, partially offset by higher sales volumes, which favorably impacted gross margin by approximately $50 million.

Lower costs had a favorable impact of $750 million, driven by a decrease in product costs for our distribution business, and lower sulfur and ammonia costs in our production business.

The average consumed price for ammonia for our Brazilian operations decreased to $667 per tonne for the three months ended September 30, 2023, compared to $1,267 per tonne in the prior year period.

The average consumed sulfur price for our Brazilian operations was $219 per long ton for the three months ended September 30, 2023, compared to $432 per long ton in the prior year period.

Three months ended March 31, 2024 and March 31, 2023

The Mosaic Fertilizantes segment’s net sales decreased to $886.4 million for the three months ended March 31, 2024, from $1.3 billion in the same period a year ago.

The decrease in net sales was due to lower finished product sales prices, which unfavorably impacted net sales by approximately $240 million, and lower finished goods sales volumes, which had an unfavorable impact of approximately $210 million.

Our average finished product selling price was $517 per tonne for the three months ended March 31, 2024, compared to $646 per tonne for the same period a year ago, due to the decrease in global sales prices as discussed in the Overview.

The Mosaic Fertilizantes segment’s sales volumes of finished products decreased 18% for the three months ended March 31, 2024, compared to the same period a year ago, due to deferred customer demand in Brazil.

Gross margin for the Mosaic Fertilizantes segment increased to $75.2 million for the three months ended March 31, 2024, from $(1.1) million in the same period of the prior year.

The increase in gross margin was primarily due to lower costs, which had a favorable impact of $310 million, driven by a decrease in product costs for our distribution business, and lower sulfur and

ammonia costs in our production business.

This was partially offset by approximately $240 million related to the decrease in average selling prices during the current year period.

The average consumed price for ammonia for our Brazilian operations decreased to $705 per tonne for the three months ended March 31, 2024, compared to $1,150 per tonne in the prior year period.

The average consumed sulfur price for our Brazilian operations was $173 per long ton for the three months ended March 31, 2024, compared to $278 per long ton in the prior year period.

The purchase prices of ammonia and sulfur are driven by global supply and demand, and also include transportation, transformation and storage costs.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 13% for the three months ended September 30, 2023 compared to the prior year period.

For the three months ended September 30, 2023, our phosphate operating rate increased to 81%, compared to 76% in the same period of the prior year.

For the three months ended September 30, 2023, our Brazilian phosphate rock production was comparable with the prior year period, at 1.0 million tonnes.

Nine months ended September 30, 2023 and 2022

The Mosaic Fertilizantes segment’s net sales were $4.5 billion for the nine months ended September 30, 2023, compared to $6.4 billion in the prior year period.

In the current period, net sales were unfavorably impacted by approximately $2.1 billion due to lower finished goods sales prices, partially offset by the impact of higher finished goods sales volumes of approximately $470 million.

Net sales were also unfavorably impacted by decreased revenues from other products, primarily acids, of approximately $270 million, due to lower selling prices.

The average finished product selling price decreased $318 per tonne to $597 per tonne for the nine months ended September 30, 2023, compared to $915 per tonne in the prior year period, primarily due to the decrease in global prices mentioned in the Overview.

The Mosaic Fertilizantes segment’s sales volume increased to 7.5 million tonnes for the nine months ended September 30, 2023, from 7.0 million tonnes in the same period a year ago, due to increased demand in our distribution business.

Gross margin for the nine months ended September 30, 2023 decreased to $117.8 million from $1.0 billion in the same period in the prior year.

In the current year period, gross margin was unfavorably impacted by approximately $2.1 billion due to lower average selling prices.

Gross margin was also unfavorably impacted by lower sales volumes and sales prices of other products, primarily acids, of approximately $40 million, and unfavorable foreign currency impacts of approximately $35 million.

These impacts were partially offset by approximately $1.2 billion related to lower product costs, primarily reductions in material purchases by our distribution business and lower raw materials costs in the current year compared to the prior year period.

Sales volumes also favorably impacted gross margin by approximately $40 million in the current year period.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased 3% compared to the prior year period.

For the nine months ended September 30, 2023, our phosphate operating rate was 77%, compared to 84% in the same period of the prior year.

For the nine month period ended September 30, 2023, our Brazilian phosphate rock production decreased slightly to 2.9 million tonnes, from 3.0 million tonnes in the prior year period.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 4% for the three months ended March 31, 2024 compared to the prior year period.

For the three months ended March 31, 2024, our phosphate operating rate increased to 79%, compared to 78% in the same period of the prior year.

For the three months ended March 31, 2024 and 2023, our Brazilian phosphate rock production was 0.9 million tonnes.

Corporate, Eliminations and Other

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Corporate, Eliminations and Other includes the results of the China and India distribution businesses, intersegment eliminations, including profit on intersegment sales, unrealized mark-to-market gains and losses on derivatives and debt expenses.

The prior year period also included the results of operations for the Resort.

For the three months ended September 30, 2023, gross margin for Corporate, Eliminations and Other was $5.7 million, compared to $(2.9) million for the same period in the prior year.

Gross margin was favorably impacted by the elimination of profit on intersegment sales in the current year period of approximately $45 million, compared to the prior year of approximately $105 million.

Gross margin was also positively impacted due to favorable product costs in our distribution operations in China and India in the current year period.

Sales in China and India, collectively, resulted in revenue of $204.1 million and gross margin of $12.4 million in the current year period, compared to revenue of $158.6 million and gross margin of $(13.7) million in the prior year period.

Gross margin was unfavorably impacted by a net unrealized loss on derivatives of approximately $45 million in the current year period, compared to a net unrealized loss of approximately $76 million in the prior year period.

For the nine months ended September 30, 2023, gross margin for Corporate, Eliminations and Other was $10.6 million, compared to $(62.8) million for the same period in the prior year.

Gross margin was favorably impacted by lower elimination of profit on intersegment sales in the current year period of approximately $100 million, compared to the prior year period of approximately $(152) million.

Gross margin was unfavorably impacted by a net unrealized loss on derivatives of approximately $12 million in the current year period, compared to a net unrealized loss of approximately $35 million in the prior year period.

Gross margin was impacted due to lower average selling prices in our distribution operations in China and India in the current year period.

For the three months ended March 31, 2024, gross margin for Corporate, Eliminations and Other was $(47.1) million, compared to $(1.1) million for the same period in the prior year.

Gross margin was unfavorably impacted by a net unrealized loss on derivatives of approximately $30 million in the current year period, primarily of foreign currency derivatives, compared to a net unrealized loss of approximately $1 million in the prior year period.

Sales in China and India, collectively, resulted in revenue of $129.3 million and gross margin of $7.6 million in the current year period, compared to revenue of $266.8 million and gross margin of $(10.8) million in the prior year period.

The prior year period also included gross margin of approximately $15 million related to the Resort.

China and India gross margin was favorably impacted by lower product costs in the current year period compared to the prior year which was partially offset by the impact of lower selling prices compared to the prior year period.

Other Income Statement Items

Three months ended Nine months ended

September 30, 2023-2022 September 30, 2023-2022

(in millions) 2023 2022 Change Percent 2023 2022 Change Percent

Three months ended

March 31, 2024-2023

(in millions) 2024 2023 Change Percent

Selling, general and administrative expenses $ 106.8 $ 127.7 $ (20.9) (16) %

Other operating expense 143.9 222.8 (78.9) (35) % 214.0 337.6 (123.6) (37) %

Other operating expense (income) 119.5 (1.9) 121.4 NM

Interest expense (58.2) (50.2) (8.0) 16 %

Interest income 22.9 7.6 15.3 NM 43.3 21.2 22.1 104 %

Interest income 10.2 9.1 1.1 12 %

Interest expense, net (48.0) (41.1) (6.9) 17 %

Foreign currency transaction (loss) gain (100.3) 51.4 (151.7) NM

Other expense (50.1) (2.3) (47.8) NM (66.1) (37.8) (28.3) 75 %

(Benefit from) provision for income taxes (5.9) 276.6 (282.5) NM 220.8 1,018.3 (797.5) (78) %

Other income (expense) 0.6 (8.9) 9.5 NM

Provision for income taxes 6.2 118.3 (112.1) (95) %

Equity in net earnings of nonconsolidated companies 37.5 31.3 6.2 20 %

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2023 decreased $4.6 million compared to the same period of prior year, primarily due to approximately $17 million of lower expenses for consulting and professional services related to executing on our strategic initiatives.

This was partially offset by higher compensation and incentive expense of approximately $10 million in the current period compared to the prior year period.

Selling, general and administrative expenses for the nine months ended September 30, 2023 increased $12.4 million compared to the same period of the prior year, primarily due to higher consulting and professional services costs of approximately $15 million in the current year period.

Selling, general and administrative expenses for the three months ended March 31, 2024 decreased $20.9 million compared to the same period of prior year, primarily due to lower incentive compensation costs of approximately $23 million compared to the prior year period.

Other Operating Expense

For the three months ended September 30, 2023, we had other operating expense of $143.9 million, compared to $222.8 million for the same period of the prior year.

The change from the prior year was primarily due to approximately $71 million related to an increase in environmental reserves in the prior year period.

For the nine months ended September 30, 2023, we had other operating expense of $214.0 million, compared to $337.6 million for the same period of the prior year.

The change from the prior year period relates to a gain on the sale of the Resort of approximately $57 million, and an increase in environmental reserves in the prior year period compared to the current year period of approximately $55 million.

For the three months ended March 31, 2024, we had other operating expense of $119.5 million, compared to other operating income of $1.9 million for the same period of the prior year.

The change from the prior year was primarily due to an increase in environmental reserves in our Phosphate segment of approximately $71 million in the current year period.

The prior year period included a gain of approximately $57 million related to the sale of the Streamsong Resort.

Interest Expense, Net

For the three and nine months ended September 30, 2023, net interest expense decreased to $17.4 million and $94.5 million, compared to $30.6 million and $104.0 million in the same period of the prior year.

The change from the prior year is driven by higher interest income primarily due to interest received in the current year period of $10 million on tax credit refunds from our Brazilian subsidiaries.

For the three months ended March 31, 2024, net interest expense increased to $48.0 million, compared to $41.1 million the same period of the prior year.

The increase was primarily due to higher short term debt levels in the current year period.

Foreign Currency Transaction Gain

We recorded a foreign currency transaction loss of $96.9 million for the three months ended September 30, 2023 compared to a loss of $61.1 million for the same period in the prior year.

For the three months ended September 30, 2023, the loss was the result of the effect of the strengthening of the U.S.

We recorded a foreign currency transaction loss of $100.3 million for the three months ended March 31, 2024, compared to a gain of $51.4 million for the same period in the prior year.

For the three months ended March 31, 2024, the loss was the result of the effect of the strengthening of the U.S.

dollar relative to the Brazilian real on significant intercompany loans and U.S.

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dollar relative to the Canadian dollar on significant intercompany loans.

We recorded a foreign currency transaction gain of $103.0 million for the nine months ended September 30, 2023 compared $22.4 million for the same period in the prior year.

For the nine months ended September 30, 2023, the gain was the result of the effect of the weakening of the U.S.

dollar relative to the Brazilian real on significant intercompany loans and U.S.

dollar-denominated payables held by our Brazilian subsidiaries.

Other Expense

For the three and nine months ended September 30, 2023, we had other expense of $50.1 million and $66.1 million compared to $2.3 million and $37.8 million for the same periods in the prior year.

The current year expense for the three month period primarily related to a settlement loss on the termination of a pension plan of approximately $42 million, and approximately $6 million of realized losses on the marketable securities held in the RCRA Trusts.

For the nine months ended September 30, 2023, other expense primarily related to the settlement loss of approximately $42 million mentioned above and approximately $12 million of realized losses on the marketable securities held in the RCRA Trusts.

For the three and nine months ended March 31, 2024, we had other income of $0.6 million compared to expense of $8.9 million and for the same period in the prior year.

The prior year expense for the three month period primarily related to realized losses on the marketable securities held in the RCRA Trusts of approximately $8 million.

Equity in Net Earnings of Nonconsolidated Companies

For the three and nine months ended September 30, 2023, we had equity in net earnings of nonconsolidated companies of $15.8 million and $60.0 million compared to $72.1 million and $138.7 million for the same periods in the prior year.

These results were primarily related to the operations of MWSPC, which was unfavorably impacted by lower selling prices for its products in the current year periods.

(Benefit) Provision for Income Taxes

For the three months ended March 31, 2024, we had equity in net earnings of nonconsolidated companies of $37.5 million compared to $31.3 million for the same period in the prior year.

These results were primarily related to the operations of MWSPC.

Provision for Income Taxes

Three months ended Effective Tax Rate Provision for Income Taxes

September 30, 2023 31.7 % $ (5.9)

September 30, 2022 26.1 % $ 276.6

Nine months ended Effective Tax Rate Provision for Income Taxes

September 30, 2023 22.0 % $ 220.8

September 30, 2022 25.7 % $ 1,018.3

For the three months ended September 30, 2023, income tax was a benefit of $5.9 million and the effective tax rate was 31.7%.

For the nine months ended September 30, 2023, income tax expense was $220.8 million and the effective tax rate was 22.0%.

For the three months ended September 30, 2023, discrete tax items recorded in tax expense was a benefit of approximately $17.3 million.

The net tax benefit consisted primarily of the true up of estimates from our U.S.

tax return provision and other miscellaneous costs.

incentives, changes in valuation allowances, withholding tax expense and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.

For the nine months ended September 30, 2023, discrete tax items recorded in tax expense was a benefit of approximately $41.1 million.

The net tax benefit consisted primarily of the true up of estimates from our U.S.

and Canada tax return provision, share-based excess benefit, interest of effectively settled unrecognized tax benefits, and other miscellaneous benefits.

March 31, 2024 24.6 % $ 6.2

March 31, 2023 21.7 % $ 118.3

For the three months ended March 31, 2024, income tax expense was $6.2 million and the effective tax rate was 24.6%.

For the three months ended March 31, 2024, discrete tax items recorded in tax expense was a benefit of approximately $0.8 million.

The net tax benefit consisted primarily of share-based excess benefit, true up of estimates and other miscellaneous costs.

In addition to items specific to the period, our income tax rate is impacted by the mix of earnings across the jurisdictions in which we operate, by a benefit associated with depletion, changes in valuation allowances, withholding tax expense and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.

Critical Accounting Estimates

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Liquidity and Capital Resources

As of September 30, 2023, we had cash and cash equivalents of $591.0 million, short-term debt of $299.8 million, long-term debt, including current maturities, of approximately $3.4 billion, and stockholders’ equity of approximately $12.2 billion.

As of March 31, 2024, we had cash and cash equivalents of $336.7 million, short-term debt of $1.2 billion, long-term debt, including current maturities, of approximately $3.4 billion, and stockholders’ equity of approximately $12.2 billion.

We have a target liquidity buffer of up to $3.0 billion, including cash and available committed and uncommitted credit lines.

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We also target debt leverage ratios that are consistent with investment grade credit metrics.

Our capital allocation priorities include maintaining our target investment grade metrics and financial strength, sustaining our assets, including ensuring the safety of our employees and reliability of our assets, investing to grow our business, either through organic growth or taking advantage of strategic opportunities, and returning excess cash to shareholders, including paying our

During the nine months ended September 30, 2023, we returned cash to shareholders through share repurchases of $606.0 million and cash dividends of $286.5 million, and invested $1.0 billion in capital expenditures.

During the three months ended March 31, 2024, we returned cash to shareholders through share repurchases of $108.4 million and cash dividends of $69.7 million, and invested $383.0 million in capital expenditures.

Funds generated by operating activities, available cash and cash equivalents, and our credit facilities continue to be our most significant sources of liquidity.

We believe funds generated from the expected results of operations and available cash, cash equivalents and borrowings under our committed and uncommitted credit facilities, as needed, will be sufficient to finance our operations, including our capital expenditures, existing strategic initiatives, debt repayments and expected dividend payments, for at least the next 12 months.

There can be no assurance, however, that we will continue to generate cash flows at or above current levels.

As of September 30, 2023, we had $2.49 billion available under our $2.50 billion committed revolving credit facility, approximately $1.3 billion available under our uncommitted facilities and had $2.2 billion available under our $2.5 billion commercial paper program that is backed by the revolving credit facility.

We view amounts borrowed under our commercial paper program as a reduction of availability under our revolving credit facility.

As of March 31, 2024, we had $2.49 billion available under our $2.50 billion committed revolving credit facility, approximately $650.0 million available under our uncommitted facilities and had $1.8 billion available under our $2.5 billion commercial paper program that is backed by the revolving credit facility.

We consider amounts borrowed under our commercial paper program as a reduction of availability under our revolving credit facility.

Our credit facilities, including the revolving credit facility, require us to maintain certain financial ratios, as discussed in Note 11 of our Notes to Consolidated Financial Statements in our 10-K Report.

We were in compliance with these ratios as of September 30, 2023.

We were in compliance with these ratios as of March 31, 2024.

All of our cash equivalents are diversified in highly rated investment vehicles.

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subsidiaries and are not subject to significant foreign currency exposures, as the majority are held in investments denominated in U.S.

dollars as of September 30, 2023.

dollars as of March 31, 2024.

These funds may create foreign currency transaction gains or losses, however, depending on the functional currency of the entity holding the cash.

In addition, there are no significant restrictions that would preclude us from bringing these funds back to the U.S., aside from withholding taxes.

The following table represents a comparison of the net cash provided by operating activities, net cash used in investing activities, and net cash used in or provided by financing activities for the nine months ended September 30, 2023 and September 30, 2022:

(in millions) Nine months ended

September 30, 2023-2022

The following table represents a comparison of the net cash used in or provided by operating activities, net cash used in investing activities, and net cash used in or provided by financing activities for the three months ended March 31, 2024 and March 31, 2023:

(in millions) Three months ended

March 31, 2024-2023

Cash Flow 2024 2023 Change Percent

Net cash provided by operating activities $ 1,869.1 $ 2,980.1 $ (1,111.0) (37) %

Net cash (used in) provided by operating activities $ (80.0) $ 149.0 $ (229.0) NM

Net cash used in investing activities (387.8) (221.4) (166.4) 75 %

Net cash used in financing activities (1,069.8) (2,105.7) 1,035.9 (49) %

Net cash provided by (used in) financing activities 457.9 (209.0) 666.9 NM

Operating Activities

During the nine months ended September 30, 2023, net cash provided by operating activities was $1.9 billion, compared to $3.0 billion for the nine months ended September 30, 2022.

Our results of operations, after non-cash adjustments to net earnings, contributed $1.6 billion to cash flows from operating activities during the nine months ended September 30, 2023, compared to $4.1 billion as computed on the same basis for the prior year period.

During the nine months ended September 30, 2023, we had a favorable change in assets and liabilities of $252.4 million, compared to an unfavorable change of $1.1 billion during the nine months ended September 30, 2022.

The change in assets and liabilities for the nine months ended September 30, 2023, was primarily driven by favorable impacts from decreases in accounts receivable of $332.6 million and inventories of $1.1 billion, partially offset by an increase in other current and noncurrent assets of $347.3 million and a decrease in accounts payable and accrued expenses of $926.5 million.

During the three months ended March 31, 2024, net cash used in operating activities was $80.0 million, compared to net cash provided by operating activities of $149.0 million for the same period in the prior year.

Our results of operations, after non-cash adjustments, contributed $383.5 million to cash flows from operating activities during the three months ended March 31, 2024, compared to $636.3 million as computed on the same basis for the prior year period.

During the three months ended March 31,

2024, we had an unfavorable change in assets and liabilities of $463.5 million, compared to an unfavorable change of $487.3 million during the three months ended March 31, 2023.

The change in assets and liabilities for the three months ended March 31, 2024, was primarily driven by a decrease in accounts payable and accrued liabilities of $477.7 million and an increase in inventories of $114.9 million, partially offset by favorable impacts from decreases in current and noncurrent assets of $55.0 million and accounts receivable of $30.8 million.

The decrease in accounts payable and accrued liabilities was primarily related to a decrease in raw material purchase prices, a decrease in customer prepayments in Brazil, payment of taxes and the payment of incentive compensation related to 2023.

The increase in inventories was primarily due to lower raw material costs in Phosphate and Mosaic Fertilizantes and building inventory volumes, primarily in Brazil, as they prepare for their high season.

The decrease in current and noncurrent assets was primarily due to decreases in taxes receivable and prepaids.

The decrease in accounts receivable was primarily related to lower selling prices at the end of the quarter compared to the end of the prior year.

The decrease in inventories was primarily due to lower inventory volumes, due to seasonality and lower raw material costs in the current year period.

The increase in current and noncurrent assets was primarily due to an increase in taxes receivable and cloud computing costs in the current year.

The decrease in accounts payable and accrued liabilities was primarily related to a decrease in raw material purchase prices, lower customer prepayments due to seasonality, the payment of taxes and payment of dividends and payment of incentive compensation related to 2022.

Investing Activities

Net cash used in investing activities was $955.0 million for the nine months ended September 30, 2023 compared to $916.5 million for the same period a year ago.

We had capital expenditures of $1.0 billion for the nine months ended September 30,

2023, compared to $906.8 million in the prior year period.

During the nine months ended September 30, 2023, we completed the sale of the Resort for net proceeds of $158.4 million.

During that period, we also purchased the other 50% equity of GSS for $41.0 million.

GSS is now wholly owned by Mosaic.

Net cash used in investing activities was $387.8 million for the three months ended March 31, 2024 compared to $221.4 million for the same period a year ago.

We had capital expenditures of $383.0 million for the three months ended March 31, 2024, compared to $321.5 million in the prior year period.

The prior year period included net proceeds of $158.4 million from the sale of a business and used cash of $41.0 million to acquire the other 50% of an equity investment.

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2023 was $1.1 billion, compared to $2.1 billion for the same period in the prior year.

During the nine months ended September 30, 2023, we made repurchases of our Common Stock at an aggregate cost of $606.0 million and paid dividends of $286.5 million.

Net cash provided by financing activities for the three months ended March 31, 2024 was $457.9 million, compared to net cash used in financing activities of $209.0 million for the same period in the prior year.

During the three months ended March 31, 2024, we received net proceeds from short-term debt of $304.2 million and had net proceeds of $500.9 million under our inventory financing arrangement.

We made repurchases of our Common Stock at an aggregate cost of $108.4 million and paid dividends of $69.7 million.

We also made net payments on our structured accounts payable arrangements of $135.2 million and payments on long-term debt of $15.4 million.

We received net proceeds from short-term debt of $75.2 million.

Debt Instruments, Guarantees and Related Covenants

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Federal Jurisdiction Over “Waters of the United States.

” The Clean Water Act (“ CWA ” or the “ Act ”) authorizes federal jurisdiction over “navigable waters,” defined in the Act as “waters of the United States” and often abbreviated as “WOTUS.” As it relates to Mosaic’s operations and facilities, the scope of the term WOTUS dictates legal requirements for our national pollutant discharge elimination system wastewater discharge permits and for impacts to surface waters and wetlands associated with our phosphate mining operations.

The Clean Water Act (“ CWA ” or the “ Act ”) authorizes federal jurisdiction over “navigable waters,” defined in the Act as “waters of the United States” (“ WOTUS ”).

As it relates to Mosaic’s operations and facilities, the scope of the term WOTUS dictates legal requirements for our national pollutant discharge elimination system wastewater discharge permits and for impacts to surface waters and wetlands associated with our phosphate mining operations.

A broad definition of WOTUS, and thus the scope of federal jurisdiction, increases the time required to identify wetlands and waterways subject to federal regulatory and permitting requirements, and the amount and type of mitigation required to compensate for impacts to jurisdictional WOTUS caused by our mining operations.

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Supreme Court issued its opinion in the Sackett v EPA case, which significantly limits water features that can be considered WOTUS and therefore subject to CWA Section 404 jurisdiction.

The Court held the CWA extends only to those wetlands that are “ as a practical matter indistinguishable from waters of the United States .” This requires “ first, that the adjacent [body of water constitutes] .

‘water[s] of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters);

and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” The Sackett decision is binding nationwide as to the determination of which wetlands and waters are subject to the CWA.

The Court held that the CWA extends only to those wetlands that are “as a practical matter indistinguishable from waters of the United States”.

The Sackett decision is binding nationwide as to the determination of which wetlands and waters are subject to the CWA.

The Sackett decision invalidated the January 18, 2023 definition of WOTUS promulgated by the EPA, which had expanded federal jurisdiction.

In response to Sackett , on August 29, 2023, the EPA issued a final rule intended to conform its definition of WOTUS to the Sackett decision.

In response to Sackett , on August 29, 2023, the Environmental Protection Agency (“ EPA ”) issued a final rule intended to conform its definition of WOTUS to the Sackett decision.

The conforming rule became effective on September 8, 2023.

As a result of ongoing litigation, the January 2023 WOTUS rule, as conformed by the September 2023 rule, is being implemented only in 23 states, the District of Columbia, and the U.S.

In the other 27 states, WOTUS is interpreted consistent with the pre-2015 regulatory regime and the Supreme Court's Sackett decision.

In the other 27 states, WOTUS is interpreted consistent with the pre-2015 regulatory regime in a manner that such states believe complies with the Supreme Court’s Sackett decision.

Clean Water Act 404 Permitting Program .

Beginning in 2018, the State of Florida enacted statutory and regulatory changes to allow the State to assume “dredge and fill” permitting under Section 404 of the CWA (" CWA 404 permitting ").

In December 2020, the EPA approved Florida’s application to assume CWA 404 permitting and the State began issuing 404 permits for projects impacting assumed waters in the State.

A group of Non-Governmental Organizations (“ NGOs ”) filed suit in early 2021 seeking to invalidate the EPA’s approval and to return CWA 404 permitting to the federal government.

On February 15, 2024, the District Court entered an Order granting the relief requested by the NGOs.

Because of the decision, the U.S.

Army Corps of Engineers (“ Corps ”) became the only entity in the State with authority to issue CWA 404 permits.

On April 12, 2024, the District Court entered final judgment on the NGO’s claims that now can be appealed.

Attorneys for the State have indicated that it plans to file an appeal and request an emergency stay of the District Court’s decision;

a stay that would return CWA 404 permitting to the State.

If the appeal is not successful, CWA 404 permitting for most of Mosaic’s proposed Florida mining projects and some improvements to our concentrates facilities would be handled by the Corps.

Returning the CWA 404 program to the Corps is likely to result in delays in the permitting process, due to coordination complications and Corps staffing deficiencies, at least over the next 6-12 months.

Moreover, all Corps CWA 404 permits are federal actions subject to the National Environmental Policy Act, which is a resource-intensive environmental review that causes additional delays in the permitting process.

Corps-issued CWA 404 permits also provide an avenue for legal challenges to be filed in Federal court.

Given these recent developments, the schedule for Mosaic’s Florida permitting projects will encounter more delays and face potentially greater legal risk of permit challenges.

Off-Balance Sheet Arrangements and Obligations

10 unchanged sentences

• business and economic conditions and governmental policies affecting the agricultural industry where we or our customers operate, including price and demand volatility resulting from periodic imbalances of supply and demand;

• the anticipated value of the Ma’aden shares to be issued in the proposed transaction at transaction announcement and at closing, the expected timing and likelihood of completion of the pending Ma’aden transaction, including the inability to receive the required approval by Ma’aden shareholders and other approvals, including potential regulatory approvals, necessary to complete the transaction;

the occurrence of any event, change or other circumstances that could give rise to the termination of the applicable agreement and that there may be a material adverse change with respect to the financial position, performance, operations or prospects of Ma’aden and MWSPC;

• because of political and economic instability, civil unrest or changes in government policies in Brazil, Saudi Arabia, Peru or other countries in which we do business, our operations could be disrupted as higher costs of doing business could result, including those associated with implementation of new freight tables and new mining legislation;

• the continued impact of the novel coronavirus Covid-19 pandemic on the global economy and our business, suppliers, customers, employees and the communities in which we operate;

• our inability to effectively implement or convert our operations to the new information systems;

• a potential drop in oil demand, which could lead to a significant decline in production, and its impact on the availability and price of sulfur, a key raw material input for our Phosphate and Mosaic Fertilizantes segment operations;

13 unchanged sentences

• tax regulations, currency exchange controls and other restrictions that may affect our ability to optimize the use of our liquidity;

• risks associated with our international operations, including any potential and actual adverse effects related to the Miski Mayo mine;

• adverse weather and climate conditions affecting our operations, including the impact of potential hurricanes, excessive heat, cold, snow, rainfall or drought;

20 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis