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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-07 · 205 added, 193 removed, 276 unchanged (59% of the section changed)

4 unchanged sentences

Results of Operations

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

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

Three months ended Nine months ended

September 30, 2024-2023 September 30, 2024-2023

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

7 unchanged sentences

Interest expense, net (41.7) (17.4) (24.3) 140 % (136.1) (94.5) (41.6) 44 %

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) %

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

Foreign currency transaction gain (loss) 100.9 (96.9) 197.8 NM (267.3) 103.0 (370.3) NM

Other (expense) income (0.4) (50.1) 49.7 (99) % 6.8 (66.1) 72.9 NM

Earnings (loss) from consolidated companies before income taxes 174.2 (18.6) 192.8 NM 125.0 1,002.0 (877.0) (88) %

Provision for (benefit from) income taxes 48.0 (5.9) 53.9 NM 152.9 220.8 (67.9) (31) %

Earnings (loss) from consolidated companies 126.2 (12.7) 138.9 NM (27.9) 781.2 (809.1) NM

Equity in net earnings of nonconsolidated companies 4.5 15.8 (11.3) (72) % 64.2 60.0 4.2 7 %

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

Net earnings including noncontrolling interests 130.7 3.1 127.6 NM 36.3 841.2 (804.9) (96) %

Net earnings attributable to noncontrolling interests 8.5 7.3 1.2 16 % 30.4 41.6 (11.2) (27) %

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

Net earnings (loss) attributable to Mosaic $ 122.2 $ (4.2) $ 126.4 NM $ 5.9 $ 799.6 $ (793.7) (99) %

Diluted net earnings (loss) per share attributable to Mosaic $ 0.38 $ (0.01) $ 0.39 NM $ 0.02 $ 2.39 $ (2.37) (99) %

Diluted weighted average number of shares outstanding 319.4 331.5 321.6 335.1

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.

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

For the three months ended September 30, 2024, Mosaic had net income of $122.2 million, or $0.38 per diluted share, compared to a net loss of $(4.2) million, or $(0.01) per diluted share, for the prior year period.

Net sales for the three months ended September 30, 2024 decreased 21% compared to the same period of the prior year, driven by lower finished good sales pricing in our Potash and Mosaic Fertilizantes segments and lower sales volumes across our segments, as discussed further below.

Net income for the three months ended September 30, 2024 was favorably impacted by a foreign currency transaction gain of $100.9 million, compared to a foreign currency transaction loss of $96.9 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.

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 our Phosphate segment, operating results for the three months ended September 30, 2024 were favorable compared to the prior year.

They were driven primarily by higher average selling prices and a favorable product mix, partially offset by lower sales volumes.

Sales volumes in the current year period were unfavorably impacted by low inventory levels going into the quarter, and by delayed shipments of approximately 80,000 tonnes caused by Hurricanes Francine and Helene.

Higher average selling prices were driven by strong demand for the fall season in North America.

In our Potash segment, operating results for the three months ended September 30, 2024 were lower than the prior year, primarily due to lower average selling prices as a result of improved global supply, and lower sales volumes in the current year period, due to operational issues and the timing of our “summer fill” sales program in North America.

In our Mosaic Fertilizantes segment, operating results for the three months ended September 30, 2024 were unfavorable compared to the same period in the prior year due to a reserve for bad debt related to a customer that entered bankruptcy proceedings during the quarter.

Excluding this impact, results benefited from lower material costs, 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 continues to improve.

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

In addition to the items referenced above:

• 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.

• During the quarter ended September 30, 2024, we repurchased 1,772,144 shares of Common Stock in the open market for approximately $50.0 million at an average purchase price of $28.21.

Subsequent to quarter end, in October 2024, our Florida Phosphate operations suffered downtime due to Hurricane Milton.

We expect production to be impacted by 200,000 to 250,000 tonnes in the fourth quarter of 2024, resulting in idle costs in the fourth quarter of 2024.

Overview of Consolidated Results for the nine months ended September 30, 2024 and 2023

Net income attributable to Mosaic for the nine months ended September 30, 2024 was $5.9 million, or $0.02 per diluted share, compared to net earnings of $799.6 million, or $2.39 per diluted share, for the same period a year ago.

Net income for the nine months ended September 30, 2024 were unfavorably impacted by a foreign currency transaction loss of $267.3 million, compared to a gain of $103.0 million in the prior year period.

Results for the nine months ended September 30, 2024 reflected the factors discussed above in the discussion for the three months ended September 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.

Operating results in our Phosphate segment for the nine months ended September 30, 2024 were lower than the prior year due to unfavorable sales volumes.

Lower sales volumes were driven by planned maintenance and turnaround activity at our sites, and delayed shipments due to Hurricanes Francine and Helene as mentioned above in our three month discussion.

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.

Average selling prices for the nine month period of the current year were favorable as prices have continued trending upwards since the third quarter of 2023, driven by strong demand in North America.

Operating results also benefited from lower raw material costs, primarily sulfur and ammonia compared to the prior year period.

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

They were driven by lower average selling prices, resulting from improved 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" sales program in the current year period.

For the nine months ended September 30, 2024, operating results in our Mosaic Fertilizantes segment were significantly more 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.

• 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 nine months ended September 30, 2024, we repurchased 7,006,632 shares of Common Stock in the open market for approximately $210.4 million at an average purchase price of $30.03.

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 Six months ended

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

Three months ended Nine months ended

September 30, 2024-2023 September 30, 2024-2023

(in millions, except price per tonne or unit)

32 unchanged sentences

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.

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

The Phosphate segment’s net sales were $1.0 billion for the three months ended September 30, 2024, compared to $986.4 million for the three months ended September 30, 2023.

The increase in net sales in the current year period was primarily due to higher average finished goods sales prices, which had a favorable impact of approximately $130 million compared to the prior year period.

This was partially offset by lower finished goods sales volumes, which had an unfavorable impact on net sales of approximately $100 million, and lower sales of raw materials of approximately $15 million.

Our average finished product selling price increased 14% to $651 per tonne for the three months ended September 30, 2024, compared to $569 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 1.5 million for the three months ended September 30, 2024, compared to 1.7 million in the prior year period, due to factors discussed in the Overview.

Gross margin for the Phosphate segment increased to $142.3 million for the three months ended September 30, 2024, from $87.5 million for the three months ended September 30, 2023.

The increase in gross margin in the current year period was primarily due to higher average finished goods selling prices, which had a favorable impact of approximately $130 million versus the prior year.

Gross margin also benefited from lower maintenance turnaround costs of approximately $20 million due to timing of turnarounds and the favorable impact of lower sulfur costs of approximately $15 million in the current period.

These impacts were partially offset by lower sales volumes, which were unfavorable by approximately $50 million, higher blended rock and ammonia costs of approximately $45 million and higher conversion costs of approximately $10 million.

The average consumed price for ammonia for our North America operations increased 37%, to $482 per tonne, for the three months ended September 30, 2024, from $353 in the same period a year ago.

The average consumed sulfur price for our North America operations decreased 19%, to $126 per long ton, for the three months ended September 30, 2024, from $156 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 $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 average consumed cost of purchased and produced phosphate rock increased to $87 per tonne for the three months ended September 30, 2024, from $81 per tonne for the three months ended September 30, 2023.

For the three months ended September 30, 2024, our North America phosphate rock production decreased to 2.2 million tonnes from 2.4 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 2% for the three months ended September 30, 2024 from the prior year period.

Our operating rate for processed phosphate production increased to 66% for the three months ended September 30, 2024, from 64% for the same period in 2023.

Nine months ended September 30, 2024 and September 30, 2023

The Phosphate segment’s net sales were $3.4 billion for the nine months ended September 30, 2024, compared to $3.7 billion for the nine months ended September 30, 2023.

The decrease in net sales was primarily due to lower sales volumes, which unfavorably impacted net sales by approximately $340 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.

In addition, Miski Mayo operations had an unfavorable impact of approximately $50 million compared to the prior year period due to lower sales prices and volumes.

These impacts were partially offset by approximately $65 million due to higher finished product selling prices in the current period, and favorable raw material sales of approximately $15 million in the current period.

Our average finished product selling price was $665 per tonne for the nine months ended September 30, 2024, an increase of $23 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 nine months ended September 30, 2024, compared to the same period in the prior year due to the impact of planned maintenance and turnaround activity, and delayed shipments caused by Hurricanes Francine and Helene as discussed in the Overview.

Gross margin for the Phosphate segment decreased to $455.4 million for the nine months ended September 30, 2024, from $563.0 million for the nine months ended September 30, 2023.

Gross margin was unfavorably impacted by lower sales volumes, which unfavorably impacted gross margin by approximately $80 million, and higher conversion of approximately $80 million.

Gross margin was also unfavorably impacted by higher blended rock costs of approximately $50 million.

Additionally, current period gross margin was also unfavorably impacted by approximately $40 million related to unfavorable product mix of a higher proportion of purchased tonnes compared to the prior year period and higher freight costs of approximately $20 million.

These impacts were partially offset by favorable impacts from lower raw material costs, primarily sulfur and ammonia as discussed below, of approximately $100 million, and higher finished goods selling prices of approximately $65 million.

The average consumed price for ammonia for our North America operations was $436 per tonne for the nine months ended September 30, 2024, compared to $449 per tonne in the same period a year ago.

The average consumed price for sulfur for our North America operations decreased to $135 per long ton for the nine months ended September 30, 2024, from $191 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.

The average consumed cost of purchased and produced phosphate rock increased to $85 per tonne for the nine months ended September 30, 2024, compared to $75 per tonne for the prior year period.

Our North America phosphate rock production increased to 7.0 million tonnes for the nine months ended September 30, 2024, compared to 6.7 million for the nine months ended September 30, 2023.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased by 4%, to 4.9 million tonnes for the nine months ended September 30, 2024, compared to 5.1 million tonnes in the prior year period.

Our operating rate for processed phosphate production decreased to 66% for the three months ended September 30, 2024, from 68% 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 Six months ended

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

Three months ended Nine months ended

September 30, 2024-2023 September 30, 2024-2023

(in millions, except price per tonne or unit)

20 unchanged sentences

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

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 $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.

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

The Potash segment’s net sales decreased to $525.7 million for the three months ended September 30, 2024, compared to $719.9 million in the same period a year ago.

The decrease was primarily due to lower sales volumes and selling prices, which had an unfavorable impact on net sales of approximately $105 million and $90 million, respectively, compared to the same period in the prior year.

Our average finished product selling price was $263 per tonne for the three months ended September 30, 2024, compared to $324 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 decreased to 2.0 million tonnes for the three months ended September 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 $121.9 million for the three months ended September 30, 2024, from $210.4 million in the same period of the prior year.

Lower selling prices decreased gross margin by approximately $90 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.

Gross margin was also unfavorably impacted by lower sales volumes, which unfavorably impacted gross margin by approximately $70 million compared to the prior year.

This was partially offset by lower Canadian resource taxes and royalties of approximately $40 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.

Lower conversion costs in the current period favorably impacted gross margin by approximately $10 million.

We incurred $ 44.5 million in Canadian resource taxes for the three months ended September 30, 2024, compared to $85.6 million in the same period a year ago.

Canadian royalty expense increased to $9.4 million for the three months ended September 30, 2024, compared to $8.7 million for the three months ended September 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 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.

Our operating rate for potash production was 66% for each of the periods ended September 30, 2024 and 2023.

Electrical issues at our Esterhazy and Colonsay, Saskatchewan mines reduced production volumes in the current year period.

Nine months ended September 30, 2024 and September 30, 2023

The Potash segment’s net sales decreased to $1.8 billion for the nine months ended September 30, 2024, compared to $2.5 billion in the same period a year ago.

Lower selling prices had an unfavorable impact on net sales of approximately $680 million versus the prior year period.

This was partially offset by the impact of higher sales volumes of approximately $35 million.

Our average potash selling price was $282 per tonne for the nine months ended September 30, 2024, compared to $393 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, 2024 increased 3% compared to the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment decreased to $520.0 million for the nine months ended September 30, 2024, from $959.7 million for the same period in the prior year.

Gross margin was unfavorably impacted by approximately $680 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.

This was partially offset by lower Canadian resource taxes and royalties of approximately $135 million in the current year period, as discussed below.

Gross margin was also favorably impacted by approximately $45 million, due to lower idle and maintenance turnaround costs in the current year period due to the timing of turnarounds.

In addition, gross margin was favorably impacted by lower conversion costs of approximately $30 million and higher sales volumes of approximately $20 million.

We incurred $175.8 million in Canadian resource taxes for the nine months ended September 30, 2024, compared to $301.4 million in the same period a year ago.

Canadian royalty expense decreased to $29.7 million for the nine months ended September 30, 2024, compared to $40.3 million for the nine months ended September 30, 2023.

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

Our operating rate was 75% for the current year period, compared to 68% in the prior year period.

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

Three months ended Six months ended

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

Three months ended Nine months ended

September 30, 2024-2023 September 30, 2024-2023

(in millions, except price per tonne or unit)

2 unchanged sentences

Cost of goods sold 1,271.3 1,624.5 (353.2) (22) % 3,029.6 4,374.9 (1,345.3) (31) %

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

Gross margin $ 127.9 $ 106.1 $ 21.8 21 % $ 304.9 $ 117.8 $ 187.1 159 %

Gross margin as a percent of net sales 9 % 6 % 9 % 3 %

24 unchanged sentences

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

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.

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

The Mosaic Fertilizantes segment’s net sales decreased to $1.4 billion for the three months ended September 30, 2024, from $1.7 billion in the same period a year ago.

The $331.4 million decrease in net sales was due to approximately $240 million of lower finished product sales prices and approximately $100 million of lower finished goods sales volume.

This was partially offset by a $10 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.

Our average finished product selling price was $486 per tonne for the three months ended September 30, 2024, compared to $566 per tonne for the same period a year ago, due to the continued improvement in global supply as discussed in the Overview and the mix of products sold.

The Mosaic Fertilizantes segment’s sales volumes of finished products decreased 6% for the three months ended September 30, 2024, compared to the same period a year ago, due to lower customer demand in the Brazil agricultural market.

Gross margin for the Mosaic Fertilizantes segment increased to $127.9 million for the three months ended September 30, 2024, from $106.1 million in the same period of the prior year.

The increase in gross margin was primarily due to $270 million of

lower costs driven by a decrease in product costs for our distribution business, and lower sulfur and ammonia costs in our production business.

This was substantially 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 $572 per tonne for the three months ended September 30, 2024, compared to $667 per tonne in the prior year period.

The average consumed sulfur price for our Brazilian operations was $170 per long ton for the three months ended September 30, 2024, compared to $219 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 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.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased 3% for the three months ended September 30, 2024, compared to the prior year period.

For the three months ended September 30, 2024, our phosphate operating rate decreased to 78%, compared to 81% in the same period of the prior year.

For the three months ended September 30, 2024, our Brazilian phosphate rock production of 1.0 million tonnes was comparable to the prior year period.

Nine months ended September 30, 2024 and 2023

The Mosaic Fertilizantes segment’s net sales were $3.3 billion for the nine months ended September 30, 2024, compared to $4.5 billion in the prior year period.

In the current period, net sales were unfavorably impacted by approximately $770 million of lower finished goods sales prices and by approximately $400 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.

This was partially offset by a $10 million favorable impact from sales of other products, primarily sulfuric acid.

The average finished product selling price decreased $106 per tonne to $491 per tonne for the nine months ended September 30, 2024, compared to $597 per tonne in the prior year period, primarily due to the continued improvement in global supply mentioned in the Overview and the mix of products sold.

The Mosaic Fertilizantes segment’s sales volume decreased to 6.8 million tonnes for the nine months ended September 30, 2024, from 7.5 million tonnes in the same period a year ago due to lower customer demand in the Brazil agricultural market.

Gross margin for the nine months ended September 30, 2024, increased to $304.9 million from $117.8 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 $970 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.

This was partially offset by approximately $770 million related to the decrease in average selling prices during the current year period, and approximately $20 million due to lower sales volumes in the current year period.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 2% 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.

Our phosphate operating rate was 77% for each of the periods ended September 30, 2024 and 2023.

For the nine month period ended September 30, 2024, our Brazilian phosphate rock production increased to 3.0 million tonnes, from 2.9 million tonnes in the prior year period.

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 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.

For the three months ended September 30, 2024, gross margin for Corporate, Eliminations and Other was $24.7 million, compared to $5.7 million for the same period in the prior year.

Gross margin was favorably impacted by approximately $38 million from net unrealized gains on derivatives, primarily on foreign currency derivatives, compared to a net unrealized loss of approximately $45 million in the prior year period.

Sales in China and India, collectively, resulted in revenue of $111.1 million and gross margin of $15.9 million in the current year period, compared to revenue of $204.1 million and gross margin of $12.4 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.

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 sales volumes and selling prices compared to the prior year period.

For the nine months ended September 30, 2024, gross margin for Corporate, Eliminations and Other was $(70.3) million, compared to $10.6 million for the same period in the prior year.

Gross margin was unfavorably impacted by a $21 million net unrealized loss on derivatives in the current year period, primarily of foreign currency derivatives, compared to a $12 million net unrealized loss in the prior year period.

Sales in China and India, collectively, resulted in revenue of $361.2 million and gross margin of $25.9 million in the current year period, compared to revenue of $642.6 million and gross margin of $(42.7) million in the prior year period.

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Other Income Statement Items

Three months ended Six months ended

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

Three months ended Nine months ended

September 30, 2024-2023 September 30, 2024-2023

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

4 unchanged sentences

Interest expense, net (41.7) (17.4) (24.3) 140 % (136.1) (94.5) (41.6) 44 %

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) %

Foreign currency transaction gain (loss) 100.9 (96.9) 197.8 NM (267.3) 103.0 (370.3) NM

Other (expense) income (0.4) (50.1) 49.7 (99) % 6.8 (66.1) 72.9 NM

Provision for (benefit from) income taxes 48.0 (5.9) 53.9 NM 152.9 220.8 (67.9) (31) %

Equity in net earnings of nonconsolidated companies 4.5 15.8 (11.3) (72) % 64.2 60.0 4.2 7 %

Selling, General and Administrative Expenses

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.

Selling, general and administrative expenses for the three months ended September 30, 2024 increased $28.3 million compared to the same period of prior year, primarily due to an increase of approximately $32 million in our bad debt reserve in our Mosaic Fertilizantes segment.

Selling, general and administrative expenses for the nine months ended September 30, 2024 increased $5.9 million compared to the same period of prior year, primarily due to the bad debt reserve mentioned above in the three month discussion, partially offset by lower consulting and professional services costs of approximately $16 million, and lower incentive compensation costs of approximately $10 million.

Other Operating Expense

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.

For the three months ended September 30, 2024, we had other operating expense of $153.2 million, compared to $143.9 million for the same period of the prior year.

The increase from the prior year period was primarily due to higher legal reserves in our Mosaic Fertilizantes segment.

For the nine months ended September 30, 2024, we had other operating expense of $305.0 million, compared to $214.0 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, compared to the prior year, of approximately $51 million.

The current year also included a franchise tax expense of approximately $15 million and an increase in legal reserves of approximately $10 million.

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

This was partially offset by

lower estimated closure costs for our asset retirement obligations (“ AROs ”) at our closed facilities of approximately $55 million, compared to the prior year.

Interest Expense, Net

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.

For the three and nine months ended September 30, 2024, net interest expense increased to $41.7 million and $136.1 million compared to $17.4 million and $94.5 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 and lower interest income.

The prior year included approximately $10 million on tax credit refunds from our Brazilian subsidiaries.

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.

We recorded a foreign currency transaction gain of $100.9 million for the three months ended September 30, 2024 compared to a loss of $96.9 million for the same period in the prior year.

For the three months ended September 30, 2024, 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.

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dollar relative to the Canadian dollar on significant intercompany loans.

We recorded a foreign currency transaction loss of $267.3 million for the nine months ended September 30, 2024 compared to a gain of $103.0 million for the same period in the prior year.

For the nine months ended September 30, 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.

dollar-denominated payables held by our Brazilian subsidiaries, and the impact of the U.S.

dollar relative to the Canadian dollar on significant intercompany loans.

Other Expense

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.

For the three and nine months ended September 30, 2024, we had other expense of $0.4 million and income of $6.8 million, compared to expense of $50.1 million and $66.1 million for the same periods in the prior year.

The income for the nine months ended September 30, 2024 was primarily related to a settlement gain on the termination of a pension plan of approximately $8 million.

The prior year periods included expense of approximately $42 million related to the settlement loss on the termination of a pension plan that was recorded in the third quarter of 2023.

Equity in Net Earnings of Nonconsolidated Companies

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.

For the three and nine months ended September 30, 2024, we had equity in net earnings of nonconsolidated companies of $4.5 million and $64.2 million compared to $15.8 million and $60.0 million for the same period in the prior year.

These results were primarily related to the operations of MWSPC.

1 unchanged sentence

Three months ended Effective Tax Rate Provision for Income Taxes

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.

September 30, 2024 27.6 % $ 48.0

September 30, 2023 31.7 % $ (5.9)

Nine months ended Effective Tax Rate Provision for Income Taxes

September 30, 2024 122.3 % $ 152.9

September 30, 2023 22.0 % $ 220.8

Income tax expense was $48.0 million and $152.9 million, and the effective tax rate was 27.6% and 122.3% for the three and nine months ended September 30, 2024.

For the three and nine months ended September 30, 2024, discrete tax items recorded in tax expense was a benefit of approximately $ 4.4 million and an expense of approximately $ 114.9 million, respectively.

excess benefit, true-up of estimates from our U.S.

tax return provisions, non-U.S.

audit settlements, 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.

8 unchanged sentences

Liquidity and Capital Resources

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.

As of September 30, 2024, we had cash and cash equivalents of $301.6 million, short-term debt of $0.8 billion, long-term debt, including current maturities, of approximately $3.3 billion, and stockholders’ equity of approximately $12.0 billion.

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

1 unchanged sentence

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 dividend.

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.

During the nine months ended September 30, 2024, we returned cash to shareholders through share repurchases of $210.4 million and cash dividends of $204.2 million, and invested $957.7 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.

1 unchanged sentence

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

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.

As of September 30, 2024, we had $2.49 billion available under our $2.50 billion committed revolving credit facility, approximately $1.0 billion available under our uncommitted facilities and had $2.0 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 June 30, 2024.

We were in compliance with these ratios as of September 30, 2024.

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

2 unchanged sentences

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

dollars as of June 30, 2024.

dollars as of September 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 six months ended June 30, 2024 and June 30, 2023:

(in millions) Six months ended

June 30, 2024-2023

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 financing activities for the nine months ended September 30, 2024 and September 30, 2023:

(in millions) Nine months ended

September 30, 2024-2023

Cash Flow 2024 2023 Change Percent

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Operating Activities

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.

During the nine months ended September 30, 2024, net cash provided by operating activities was $1.1 billion, compared to $1.9 billion for the same period in the prior year.

Our results of operations, after non-cash adjustments, contributed $1.1 billion to cash flows from operating activities during the nine months ended September 30, 2024, compared to $1.6 billion as computed on the same basis for the prior year period.

During the nine months ended September 30, 2024, we had an unfavorable change in assets and liabilities of $9.9 million, compared to a favorable change of $252.4 million during the nine months ended September 30, 2023.

The change in assets and liabilities for the nine months ended September 30, 2024, was primarily driven by increases in inventories of $517.3 million and other current and noncurrent assets of $179.7 million, offset by increase in accounts payable and accrued liabilities of $257.8 million and other noncurrent liabilities of $233.9 million, and a decrease in accounts receivable of $195.4 million.

The increase in inventories was primarily due to higher inventory volumes across our segments in the current year period.

The increase in other current and noncurrent assets was primarily related to an increase in taxes receivable.

The increase in account payable and accrued liabilities was primarily due to an increase in inventory purchases and an increase in customer prepayments.

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

Accounts receivable decreased primarily due to lower average selling prices in our Potash and Mosaic Fertilizantes segments.

Investing Activities

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.

Net cash used in investing activities was $984.5 million for the nine months ended September 30, 2024 compared to $955.0 million for the same period a year ago.

We had capital expenditures of $957.7 million for the nine months ended September 30, 2024, compared to $1.0 billion 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 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.

Net cash used in financing activities for the nine months ended September 30, 2024 was $168.6 million, compared to $1.1 billion for the same period in the prior year.

During the nine months ended September 30, 2024, we received net proceeds of $200 million under our inventory financing arrangement and $151.5 million under other short-term debt arrangements.

During the current year period, we made repurchases of our common stock at an aggregate cost of $210.4 million and paid dividends of $204.2 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.

In addition, we made payments on long-term debt of $55.2 million and net payments on our structured accounts payable arrangements of $12.1 million.

Debt Instruments, Guarantees and Related Covenants

41 unchanged sentences

All statements, other than statements of historical fact, appearing in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, among other things, statements about our expectations, beliefs, intentions or strategies for the future, including statements about proposed or pending future transactions or strategic plans, statements concerning our future operations, financial condition and prospects, statements regarding our expectations for capital expenditures, statements concerning our level of indebtedness and other information, and any statements of assumptions regarding any of the foregoing.

These forward-looking statements include, among other things, statements about our expectations, beliefs, intentions or strategies for the future, including statements about proposed or pending future transactions or strategic plans, statements concerning our future operations, financial condition and prospects, statements regarding our expectations for capital expenditures, and other information, and any statements of assumptions regarding any of the foregoing.

In particular, forward-looking statements may include words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “potential”, “predict”, “project” or “should”.

37 unchanged sentences

• actions by the holders of controlling equity interests in businesses in which we hold a noncontrolling interest;

• changes in our relationships with other members of Canpotex or any joint venture in which we participate or their or our exit from participation in Canpotex or any such export association or joint venture, and other changes in our commercial arrangements with unrelated third parties;

• difficulties in realizing benefits under our long-term natural gas based pricing ammonia supply agreement with CF, including the risks that the cost savings initially anticipated from the agreement may not be fully realized over the term of the agreement or that the price of natural gas or the market price for ammonia during the agreement’s term are at levels at which the agreement’s natural gas based pricing is disadvantageous to us, compared with purchases in the spot market;

• changes in our relationships with the other member of Canpotex or any joint venture in which we participate or its or our exit from participation in Canpotex or any such export association or joint venture, and other changes in our commercial arrangements with unrelated third parties;

• difficulties in realizing benefits under our long-term natural gas based pricing ammonia supply agreement with CF Industries, including the risks that the cost savings initially anticipated from the agreement may not be fully realized over the term of the agreement or that the price of natural gas or the market price for ammonia during the agreement’s term are at levels at which the agreement’s natural gas based pricing is disadvantageous to us, compared with purchases in the spot market;

• other risk factors reported from time to time in our SEC reports.

Material uncertainties and other factors known to us are discussed in Item 1A, “Risk Factors,” of our 10-K Report and incorporated by reference herein as if fully stated herein.

Material uncertainties and other factors known to us are discussed in Item 1A, “Risk Factors,” of our 10-K Report, and of this report, and incorporated by reference herein as if fully stated herein.

We base our forward-looking statements on information currently available to us, and we undertake no obligation to update or revise any of these statements, whether as a result of changes in underlying factors, new information, future events or other developments.

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