What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-02 · 224 added, 145 removed, 245 unchanged (60% of the section changed)

4 unchanged sentences

Results of Operations

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

The following table shows the results of operations for the three and six months ended June 30, 2024 and June 30, 2023:

Three months ended Six months ended

June 30, 2024-2023 June 30, 2024-2023

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

Net sales $ 2,816.6 $ 3,394.0 $ (577.4) (17) % $ 5,496.0 $ 6,998.3 $ (1,502.3) (21) %

3 unchanged sentences

Selling, general and administrative expenses 128.4 129.9 (1.5) (1) % 235.2 257.6 (22.4) (9) %

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

Other operating expense 32.3 72.0 (39.7) (55) % 151.8 70.1 81.7 117 %

Operating earnings 233.3 369.2 (135.9) (37) % 406.2 913.8 (507.6) (56) %

Interest expense, net (46.4) (36.0) (10.4) 29 % (94.4) (77.1) (17.3) 22 %

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

Other income (expense) 0.6 (8.9) 9.5 NM

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

Foreign currency transaction (loss) gain (267.9) 148.5 (416.4) NM (368.2) 199.9 (568.1) NM

Other income (expense) 6.6 (7.1) 13.7 NM 7.2 (16.0) 23.2 NM

(Loss) earnings from consolidated companies before income taxes (74.4) 474.6 (549.0) NM (49.2) 1,020.6 (1,069.8) NM

Provision for income taxes 98.7 108.4 (9.7) (9) % 104.9 226.7 (121.8) (54) %

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

(Loss) earnings from consolidated companies (173.1) 366.2 (539.3) NM (154.1) 793.9 (948.0) NM

Equity in net earnings of nonconsolidated companies 22.2 12.9 9.3 72 % 59.7 44.2 15.5 35 %

Net earnings including noncontrolling interests 56.5 459.0 (402.5) (88) %

Net (loss) earnings including noncontrolling interests (150.9) 379.1 (530.0) NM (94.4) 838.1 (932.5) NM

Net earnings attributable to noncontrolling interests 10.6 10.1 0.5 5 % 21.9 34.3 (12.4) (36) %

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) %

Net (loss) earnings attributable to Mosaic $ (161.5) $ 369.0 $ (530.5) NM $ (116.3) $ 803.8 $ (920.1) NM

Diluted net (loss) earnings per share attributable to Mosaic $ (0.50) $ 1.11 $ (1.61) NM $ (0.36) $ 2.39 $ (2.75) NM

Diluted weighted average number of shares outstanding 321.2 333.7 321.7 336.2

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.

Overview of Consolidated Results for the three months ended June 30, 2024 and 2023

For the three months ended June 30, 2024, Mosaic had a net loss of $(161.5) million, or $(0.50) per diluted share, compared to net income of $369.0 million, or $1.11 per diluted share, for the prior year period.

Net sales for the three months ended June 30, 2024 decreased 17% 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 June 30, 2024 was also negatively impacted by a foreign currency transaction loss of $267.9 million, compared to a foreign currency transaction gain of $148.5 million in the prior year period.

In addition, Mosaic had income tax expense of $98.7 million, compared to $108.4 million in the prior year period, primarily related to the accrual of withholding tax on expected foreign distributions.

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.

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.

In our Phosphate segment, operating results for the three months ended June 30, 2024 were lower than the prior year.

They were driven primarily by lower sales volumes, partially offset by higher average selling prices and lower raw material costs, primarily sulfur and ammonia.

Sales volumes in the current year period were unfavorably impacted by low inventory levels going into the quarter, resulting from planned maintenance and turnaround activity at our sites earlier in the year.

Higher average selling prices were driven by strong demand in North America.

In our Potash segment, operating results for the three months ended June 30, 2024 were lower than the prior year.

They were driven primarily by lower average selling prices as a result of a rebound in global supply.

This impact was partially offset by

higher sales volumes.

Sales volumes increased due to a strong “summer fill” sales program in North America and, internationally, strong demand and product affordability, which drove higher sales volumes in Southeast Asia.

In our Mosaic Fertilizantes segment, operating results for the three months ended June 30, 2024 were favorable compared to the same period in the prior year, benefiting from lower material costs.

This was partially offset by lower average selling prices and sales volumes in the current year period compared to the prior year.

Sales prices in Brazil have been decreasing as global supply and demand continues to recover from the tightness that began in 2022.

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:

• 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.

• 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.

The shares were valued at approximately $1.5 billion on the date of the agreement.

We expect this transaction to close later in 2024.

• During the quarter ended June 30, 2024, we repurchased 1,835,788 shares of Common Stock in the open market for approximately $52.0 million at an average purchase price of $28.33.

Overview of Consolidated Results for the six months ended June 30, 2024 and 2023

Net loss attributable to Mosaic for the six months ended June 30, 2024 was $(116.3) million, or $(0.36) per diluted share, compared to net earnings of $0.8 billion, or $2.39 per diluted share, for the same period a year ago.

Net loss for the six months ended June 30, 2024 was unfavorably impacted by a foreign currency transaction loss of $368.2 million, compared to a gain of $199.9 million in the prior year period.

Results for the six months ended June 30, 2024 reflected the factors discussed above in the discussion for the three months ended June 30, 2024, 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 six months ended June 30, 2024 were lower than the prior year due to lower sales volumes.

Lower sales volumes were driven by planned maintenance and turnaround activity at our sites, as mentioned above in the three month discussion.

Operating results for the six month period of the current year were also unfavorably impacted by lower average selling prices.

Although selling prices were lower than the prior year period, they have been trending upwards since the third quarter of 2023, driven by strong demand in North America.

Additionally, average selling prices in the current year period were influenced by lower raw material costs, primarily sulfur and ammonia.

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.

Operating results in our Potash segment for the six months ended June 30, 2024 were lower than the prior year.

They were driven by lower average selling prices, resulting from 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 and summer fill program in the current year period.

For the six months ended June 30, 2024, operating results in our Mosaic Fertilizantes segment were favorable compared to the same period in the prior year.

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

In addition to the items referenced above:

• During the six months ended June 30, 2024, we repurchased 5,234,488 shares of Common Stock in the open market for approximately $160.4 million at an average purchase price of $30.64.

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

March 31, 2024-2023

Three months ended Six months ended

June 30, 2024-2023 June 30, 2024-2023

(in millions, except price per tonne or unit)

2024 2023 Change Percent

2024 2023 Change Percent 2024 2023 Change Percent

North America

30 unchanged sentences

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.

Three months ended June 30, 2024 and June 30, 2023

The Phosphate segment’s net sales were $1.2 billion for the three months ended June 30, 2024, compared to $1.3 billion for the three months ended June 30, 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 on net sales of approximately $130 million.

This was partially offset by higher average finished goods sales prices, which had a favorable impact of approximately $20 million compared to the prior year period.

Our average finished product selling price increased 5% to $667 per tonne for the three months ended June 30, 2024, compared to $634 per tonne in the prior year period, due to the factor discussed in the Overview.

The Phosphate segment’s sales volumes of finished products decreased to 1.7 million for the three months ended June 30, 2024, compared to 1.9 million in the prior year period, due to supply constraints caused by the impact of planned maintenance and turnaround activity in the first quarter of 2024.

Gross margin for the Phosphate segment decreased to $153.7 million for the three months ended June 30, 2024, from $216.2 million for the three months ended June 30, 2023.

The decrease in gross margin in the current year period was primarily due to lower sales volumes, which had a $50 million unfavorable impact versus the prior year.

Production costs and freight costs were also approximately $30 million higher than the prior year period.

In addition, lower sales volumes and average prices from Miski Mayo operations had an unfavorable impact of approximately $20 million compared to the prior year.

These impacts were partially offset by higher average finished goods selling prices, which had a favorable impact of approximately $20 million versus the prior year.

Lower raw material costs, primarily sulfur and ammonia, also contributed a favorable impact of approximately $10 million versus the prior year.

The average consumed price for ammonia for our North America operations decreased 4%, to $424 per tonne, for the three months ended June 30, 2024, from $441 in the same period a year ago.

The average consumed sulfur price for our North America operations decreased 29%, to $138 per long ton, for the three months ended June 30, 2024, from $195 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 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.

The average consumed cost of purchased and produced phosphate rock increased to $86 per tonne for the three months ended June 30, 2024, from $79 per tonne for the three months ended June 30, 2023.

For the three months ended June 30, 2024, our North America phosphate rock production increased to 2.4 million tonnes from 2.2 million tonnes during the same period of the prior year.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 1% for the three months ended June 30, 2024 from the prior year period.

Our operating rate for processed phosphate production increased to 68% for the three months ended June 30, 2024, from 67% for the same period in 2023.

Six months ended June 30, 2024 and June 30, 2023

The Phosphate segment’s net sales were $2.3 billion for the six months ended June 30, 2024, compared to $2.7 billion for the six months ended June 30, 2023.

The decrease in net sales was primarily due to lower sales volumes, which unfavorably impacted net sales by approximately $250 million.

Net sales were also unfavorably impacted by approximately $65 million due to lower finished product selling prices in the current period.

Our average finished product selling price was $672 per tonne for the six months ended June 30, 2024, a decrease of $2 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 decreased by 11% for the six months ended June 30, 2024, compared to the same period in the prior year due to the impact of planned maintenance and turnaround activity discussed in the Overview.

Gross margin for the Phosphate segment decreased to $313.1 million for the six months ended June 30, 2024, from $475.5 million for the six months ended June 30, 2023.

The decrease in gross margin in the current year period was primarily due to lower sales volumes and prices, which unfavorably impacted gross margin by approximately $80 million and $60 million, respectively.

Gross margin was also unfavorably impacted by approximately $70 million due to increased conversion and other plant costs and approximately $35 million related to unfavorable product mix of a higher proportion of purchased tonnes compared to the prior year period.

Additionally, current period gross margin was also unfavorably impacted by approximately $40 million, due to lower rock sales volumes and selling prices at Miski Mayo.

The timing of idle plant and turnaround costs, which unfavorably impacted gross margin by approximately $15 million versus the prior year period.

These impacts were partially offset by lower raw material costs, primarily sulfur and ammonia as discussed below, which favorably impacted gross margin by approximately $140 million.

The average consumed price for ammonia for our North America operations was $415 per tonne for the six months ended June 30, 2024, compared to $506 per tonne in the same period a year ago.

The average consumed price for sulfur for our North America operations decreased to $136 per long ton for the six months ended June 30, 2024, from $210 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 $84 per tonne for the six months ended June 30, 2024, compared to $76 per tonne for the prior year period.

Our North America phosphate rock production increased to 4.8 million tonnes for the six months ended June 30, 2024, compared to 4.4 million for the six months ended June 30, 2023.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased by 7%, to 3.3 million tonnes for the six months ended June 30, 2024, compared to 3.5 million tonnes in the prior year period.

Our operating rate for processed phosphate production increased to 79% for the three months ended June 30, 2024, from 70% for the same period in 2023.

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

March 31, 2024-2023

Three months ended Six months ended

June 30, 2024-2023 June 30, 2024-2023

(in millions, except price per tonne or unit)

2024 2023 Change Percent

2024 2023 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 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.

Three months ended June 30, 2024 and June 30, 2023

The Potash segment’s net sales decreased to $663.1 million for the three months ended June 30, 2024, compared to $848.7 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 $250 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 $65 million.

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.

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.

Our average finished product selling price was $283 per tonne for the three months ended June 30, 2024, compared to $392 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 2.3 million tonnes for the three months ended June 30, 2024, compared to 2.2 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 $186.4 million for the three months ended June 30, 2024, from $336.0 million in the same period of the prior year.

Lower selling prices decreased gross margin by approximately $250 million versus the prior year period.

This decrease was partially offset by higher sales volumes, which favorably impacted gross margin by

approximately $60 million compared to the prior year, and lower Canadian resource taxes and royalties of $30 million.

In addition, lower idle and turnaround costs favorably impacted gross margin by approximately $15 million compared to the prior year, largely due to the timing of turnarounds.

We incurred $ 66.8 million in Canadian resource taxes for the three months ended June 30, 2024, compared to $95.0 million in the same period a year ago.

Canadian royalty expense decreased to $10.3 million for the three months ended June 30, 2024, compared to $12.9 million for the three months ended June 30, 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 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.

Our operating rate for potash production was 78% for the current year period, compared to 69% in the prior year period, which was negatively impacted by maintenance turnarounds.

In July 2024, we temporarily restarted our Colonsay, Saskatchewan mine to offset downtime from the upcoming summer turnaround at our Esterhazy mine.

Six months ended June 30, 2024 and June 30, 2023

The Potash segment’s net sales decreased to $1.3 billion for the six months ended June 30, 2024, compared to $1.8 billion in the same period a year ago.

Lower selling had an unfavorable impact on net sales of approximately $630 million versus the prior year period.

This was partially offset by higher sales volumes of approximately $170 million.

Our average potash selling price was $290 per tonne for the six months ended June 30, 2024, compared to $431 per tonne for the same period a year ago, due to the factor discussed above in the Overview.

The Potash segment’s sales volumes for the six months ended June 30, 2024 increased 11% compared to the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment decreased to $398.1 million for the six months ended June 30, 2024, from $749.3 million for the same period in the prior year.

Gross margin was unfavorably impacted by approximately $630 million due to the decrease in average selling prices.

This was partially offset by higher sales volumes, which had a favorable impact on gross margin of approximately $150 million and lower Canadian resource taxes and royalties of approximately $95 million in the current year period, as discussed below.

In addition, results were favorably impacted by approximately $30 million, due to higher prior year period idle and maintenance turnaround costs primarily at our Colonsay, Saskatchewan mine.

We incurred $131.3 million in Canadian resource taxes for the six months ended June 30, 2024, compared to $215.8 million in the same period a year ago.

Canadian royalty expense decreased to $20.3 million for the six months ended June 30, 2024, compared to $31.6 million for the six months ended June 30, 2023.

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

Our operating rate was 79% for the current year period, compared to 69% in the prior year period.

The increased operating rate in the current year period 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.

Prior year production was impacted by maintenance downtime during the first half of the year.

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

March 31, 2024-2023

Three months ended Six months ended

June 30, 2024-2023 June 30, 2024-2023

(in millions, except price per tonne or unit)

2024 2023 Change Percent

2024 2023 Change Percent 2024 2023 Change Percent

Net Sales $ 1,048.9 $ 1,418.8 $ (369.9) (26) % $ 1,935.3 $ 2,762.1 $ (826.8) (30) %

Cost of goods sold 947.1 1,406.0 (458.9) (33) % 1,758.3 2,750.4 (992.1) (36) %

Gross margin $ 75.2 $ (1.1) $ 76.3 NM

Gross margin $ 101.8 $ 12.8 $ 89.0 NM $ 177.0 $ 11.7 $ 165.3 NM

Gross margin as a percent of net sales 10 % 1 % 9 % — %

24 unchanged sentences

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

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.

Three months ended June 30, 2024 and June 30, 2023

The Mosaic Fertilizantes segment’s net sales decreased to $1.0 billion for the three months ended June 30, 2024, from $1.4 billion in the same period a year ago.

The $369.9 million decrease in net sales was due to approximately $290 million of lower finished product sales prices and approximately $100 million of lower finished goods sales volume.

This was partially offset by a $15 million favorable impact from sales of other products, primarily sulfuric acid.

Our average finished product selling price was $478 per tonne for the three months ended June 30, 2024, compared to $595 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 8% for the three months ended June 30, 2024, compared to the same period a year ago, due to deferred customer demand in the Brazil agricultural market.

Gross margin for the Mosaic Fertilizantes segment increased to $101.8 million for the three months ended June 30, 2024, from $12.8 million in the same period of the prior year.

The increase in gross margin was primarily due to $370 million of lower costs driven by a decrease in product costs for our distribution business, and lower sulfur and ammonia costs in our production

This was partially offset by approximately $290 million related to the decrease in average selling prices during the current year period, and by approximately $10 million due to lower sales volumes during the current year period.

The average consumed price for ammonia for our Brazilian operations decreased to $623 per tonne for the three months ended June 30, 2024, compared to $912 per tonne in the prior year period.

The average consumed sulfur price for our Brazilian operations was $174 per long ton for the three months ended June 30, 2024, compared to $258 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 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.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 4% for the three months ended June 30, 2024, compared to the prior year period.

For the three months ended June 30, 2024, our phosphate operating rate increased to 75%, compared to 74% in the same period of the prior year.

For the three months ended June 30, 2024, our Brazilian phosphate rock production decreased to 1.0 million tonnes, from 1.1 million tonnes in the prior year period.

Six months ended June 30, 2024 and 2023

The Mosaic Fertilizantes segment’s net sales were $1.9 billion for the six months ended June 30, 2024, compared to $2.8 billion in the prior year period.

In the current period, net sales were unfavorably impacted by approximately $520 million of lower finished goods sales prices and by approximately $310 million of lower finished goods sales volumes.

The average finished product selling price decreased $124 per tonne to $495 per tonne for the six months ended June 30, 2024, compared to $619 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 decreased to 3.9 million tonnes for the six months ended June 30, 2024, from 4.5 million tonnes in the same period a year ago due to deferred customer demand in the Brazil agricultural market.

Gross margin for the six months ended June 30, 2024, increased to $177.0 million from $11.7 million in the same period in the prior year.

The increase in gross margin was primarily due to lower costs, which had a favorable impact of $690 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 $520 million related to the decrease in average selling prices during the current year period.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 4% compared to the prior year period.

For the six months ended June 30, 2024, our phosphate operating rate was 77%, compared to 76% in the same period of the prior year.

For the six month period ended June 30, 2024, our Brazilian phosphate rock production was comparable to the prior year period at 1.9 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.

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.

For the three months ended June 30, 2024, gross margin for Corporate, Eliminations and Other was $(47.9) million, compared to $6.1 million for the same period in the prior year.

Gross margin was unfavorably impacted by approximately $28 million from net unrealized losses on derivatives, primarily on foreign currency derivatives, compared to a net unrealized gain of approximately $34 million in the prior year period.

Sales in China and India, collectively, resulted in revenue of $120.9 million and gross margin of $2.4 million in the current year period, compared to revenue of $171.7 million and gross margin of $(44.3) million in the prior year period.

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.

For the six months ended June 30, 2024, gross margin for Corporate, Eliminations and Other was $(95.0) million, compared to $5.0 million for the same period in the prior year.

Gross margin was unfavorably impacted by a $59 million net unrealized loss

on derivatives in the current year period, primarily of foreign currency derivatives, compared to a $33 million net unrealized gain in the prior year period.

Sales in China and India, collectively, resulted in revenue of $250.1 million and gross margin of $9.9 million in the current year period, compared to revenue of $438.5 million and gross margin of $(55.1) million in the prior year period.

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

March 31, 2024-2023

(in millions) 2024 2023 Change Percent

Three months ended Six months ended

June 30, 2024-2023 June 30, 2024-2023

(in millions) 2024 2023 Change Percent 2024 2023 Change Percent

Selling, general and administrative expenses $ 128.4 $ 129.9 $ (1.5) (1) % $ 235.2 $ 257.6 $ (22.4) (9) %

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

Other operating expense 32.3 72.0 (39.7) (55) % 151.8 70.1 81.7 117 %

Interest expense (61.2) (47.3) (13.9) 29 % (119.4) (97.5) (21.9) 22 %

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Interest expense, net (46.4) (36.0) (10.4) 29 % (94.4) (77.1) (17.3) 22 %

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

Other income (expense) 0.6 (8.9) 9.5 NM

Foreign currency transaction (loss) gain (267.9) 148.5 (416.4) NM (368.2) 199.9 (568.1) NM

Other income (expense) 6.6 (7.1) 13.7 NM 7.2 (16.0) 23.2 NM

Provision for income taxes 98.7 108.4 (9.7) (9) % 104.9 226.7 (121.8) (54) %

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Selling, General and Administrative Expenses

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.

Selling, general and administrative expenses for the three months ended June 30, 2024 decreased $1.5 million compared to the same period of prior year, primarily due to lower consulting and professional services costs of approximately $13 million compared to the prior year period, partially offset by higher incentive compensation costs of approximately $11 million.

Selling, general and administrative expenses for the six months ended June 30, 2024 decreased $22.4 million compared to the same period of prior year, primarily due to lower consulting and professional services costs of approximately $16 million, and lower incentive compensation costs of approximately $10 million compared to the prior year period.

Other Operating Expense

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.

For the three months ended June 30, 2024, we had other operating expense of $32.3 million, compared to $72.0 million for the same period of the prior year.

The decrease from the prior year is due to approximately $37 million of higher environmental reserves in our Phosphate segment, and an upward revision in estimated closure costs for our asset retirement obligations (" AROs ") at our closed facilities of approximately $23 million, incurred in the prior year.

For the six months ended June 30, 2024, we had other operating expense of $151.8 million, compared to $70.1 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 in the current year period of approximately $34 million.

In addition, the prior year period included a gain on the sale of the Streamsong Resort of approximately $57 million.

Interest Expense, Net

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.

For the three and six months ended June 30, 2024, net interest expense increased to $46.4 million and $94.4 million compared to $36.0 million and $77.1 million for the same periods 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 $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.

Foreign Currency Transaction Gain (Loss)

We recorded a foreign currency transaction loss of $267.9 million and $368.2 million for the three and six months ended June 30, 2024, compared to a gain of $148.5 million and $199.9 million for the same periods in the prior year.

The current year losses were primarily the result of unrealized foreign currency impacts resulting from the strengthening of the U.S.

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

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Other Expense

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.

For the three and six months ended June 30, 2024, we had other income of $6.6 million and $7.2 million, compared to expense of $7.1 million and $16.0 million for the same periods in the prior year.

The current year income was primarily related to a settlement gain on the termination of a pension plan during the quarter ended June 30, 2024.

Equity in Net Earnings of Nonconsolidated Companies

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.

For the three and six months ended June 30, 2024, we had equity in net earnings of nonconsolidated companies of $22.2 million and $59.7 million compared to $12.9 million and $44.2 million for the same period in the prior year.

These results were primarily related to the operations of MWSPC.

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Three months ended Effective Tax Rate Provision for Income Taxes

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.

June 30, 2024 (132.7) % $ 98.7

June 30, 2023 22.8 % $ 108.4

Six months ended Effective Tax Rate Provision for Income Taxes

June 30, 2024 (213.2) % $ 104.9

June 30, 2023 22.2 % $ 226.7

Income tax expense was $98.7 million and $104.9 million, and the effective tax rate was (132.7)% and (213.2)% for the three and six months ended June 30, 2024.

For the three and six months ended June 30, 2024, discrete tax items recorded in tax expense was an expense of approximately $ 120.1 million and $ 119.4 million, respectively.

The net tax expense consisted primarily of the impact of accruing withholding tax expense on expected foreign distributions associated with changes in management’s indefinite reinvestment assertion on select foreign earnings under ASC 740-30 (formerly APB 23), 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, 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 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.

As of June 30, 2024, we had cash and cash equivalents of $322.0 million, short-term debt of $0.9 billion, long-term debt, including current maturities, of approximately $3.3 billion, and stockholders’ equity of approximately $11.8 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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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 dividend.

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.

During the six months ended June 30, 2024, we returned cash to shareholders through share repurchases of $160.4 million and cash dividends of $137.4 million, and invested $716.9 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.

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

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.

As of June 30, 2024, we had $2.49 billion available under our $2.50 billion committed revolving credit facility, approximately $670.0 million available under our uncommitted facilities and had $2.1 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 March 31, 2024.

We were in compliance with these ratios as of June 30, 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 March 31, 2024.

dollars as of June 30, 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 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

(in millions) Six months ended

June 30, 2024-2023

Cash Flow 2024 2023 Change Percent

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

Net cash provided by operating activities $ 767.0 $ 1,221.7 $ (454.7) (37) %

Net cash used in investing activities (736.8) (532.9) (203.9) 38 %

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

Net cash used in financing activities (30.7) (815.6) 784.9 (96) %

Operating Activities

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.

During the six months ended June 30, 2024, net cash provided by operating activities was $767.0 million, compared to $1.2 billion for the same period in the prior year.

Our results of operations, after non-cash adjustments, contributed $960.1 million to cash flows from operating activities during the six months ended June 30, 2024, compared to $1.2 billion as computed on the same basis for the prior year period.

During the six months ended June 30, 2024, we had an unfavorable change in assets and liabilities of $193.1 million, compared to an favorable change of $57.0 million during the six months ended June 30, 2023.

The change in assets and liabilities for the six months ended June 30, 2024, was primarily driven by an increase in inventories of $169.8 million and accounts receivable of $78.2 million, partially offset by an increase in other noncurrent liabilities of $78.6 million.

The increase in inventories was primarily due to higher inventory volumes, primarily in Brazil, due to seasonality.

The increase in accounts receivable was primarily related to an increase in sales volumes at the end of the quarter compared to the end of the prior year.

The increase in other noncurrent liabilities liabilities was primarily related to increases in ARO obligations and environmental reserves in our Phosphate segment in the current year.

Investing Activities

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.

Net cash used in investing activities was $736.8 million for the six months ended June 30, 2024 compared to $532.9 million for the same period a year ago.

We had capital expenditures of $716.9 million for the six months ended June 30, 2024, compared to $631.8 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 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.

Net cash used in financing activities for the six months ended June 30, 2024 was $30.7 million, compared to $815.6 million for the same period in the prior year.

During the six months ended June 30, 2024, we received net proceeds of $502.1 million under our inventory financing arrangement.

During the current year period, we made repurchases of our common stock at an aggregate cost of $160.4 million and paid dividends of $137.4 million.

In addition, we also made net payments on our structured accounts payable arrangements of $141.7 million, payments on long-term debt of $42.5 million and net payments on short-term debt of $18.8 million during the current year period.

Debt Instruments, Guarantees and Related Covenants

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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 Environmental Protection Agency (“ EPA ”) issued a final rule intended to conform its definition of WOTUS to the Sackett decision.

The Sackett decision invalidated the January 18, 2023 definition of WOTUS promulgated by the Environmental Protection Agency (“ 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.

The conforming rule became effective on September 8, 2023.

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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.

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

On April 15, 2024, the State appealed the District Court's decision to the U.S.

Court of Appeals for the D.C.

The Court of Appeals subsequently granted the State's request to expedite that appeal.

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.

Moreover, all Corps 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.

Given these recent developments, we expect that 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

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• 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;

• the anticipated value of the Ma’aden shares to be issued in the proposed transaction at closing may be less than the value at transaction announcement, 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 the risk 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;

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• changes in the operation of world phosphate or potash markets, including consolidation in the crop nutrient industry, particularly if we do not participate in the consolidation;

• the expansion or contraction of production capacity or selling efforts by competitors or new entrants in the industries in which we operate, including the effects of actions by members of Canpotex to prove the production capacity of potash expansion projects, through proving runs or otherwise;

• the expansion or contraction of production capacity or selling efforts by competitors or new entrants in the industries in which we operate, including the effects of actions by other members of Canpotex to prove the production capacity of potash expansion projects, through proving runs or otherwise;

• the effect of future product innovations or development of new technologies on demand for our products;

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• difficulties or delays in receiving, challenges to, increased costs of obtaining or satisfying conditions of, or revocation or withdrawal of required governmental and regulatory approvals, including permitting activities;

• changes in the environmental and other governmental regulation that applies to our operations, including federal legislation or regulatory action expanding the types and extent of water resources regulated under federal law and the possibility of further federal or state legislation or regulatory action affecting or related to greenhouse gas emissions, including carbon taxes or other measures that may be implemented in Canada or other jurisdictions in which we operate, or of restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise from disturbing the ground in the course of mining activities or possible efforts to reduce the flow of nutrients into the Gulf of Mexico, the Mississippi River basin or elsewhere;

• changes in the environmental and other governmental regulations that apply to our operations, including federal legislation or regulatory action expanding the types and extent of water resources regulated under federal law and the possibility of further federal or state legislation or regulatory action affecting or related to greenhouse gas emissions, including carbon taxes or other measures that may be implemented in Canada or other jurisdictions in which we operate, or of restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise from disturbing the ground in the course of mining activities or possible efforts to reduce the flow of nutrients into the Gulf of Mexico, the Mississippi River basin or elsewhere;

• the potential costs and effects of implementation of federal or state water quality standards for the discharge of nitrogen and/or phosphorus into Florida waterways;

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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-Q

Item 2. Management’s Discussion and Analysis