Exhibit 99.1
 | The Mosaic Company 101 E. Kennedy Blvd., Suite 2500 Tampa, FL 33602 www.mosaicco.com | |||||||||||||
FOR IMMEDIATE RELEASE | ||||||||||||||
Investors Paul Massoud 813-775-4260 paul.massoud@mosaicco.com | Media William Barksdale 813-775-4208 william.barksdale@mosaicco.com | |||||||||||||
THE MOSAIC COMPANY REPORTS THIRD QUARTER 2022 RESULTS
•Third quarter net income of $842 million, Adjusted EBITDA(1) of $1.7 billion
•Cash from Operations of $889 million, Free Cash Flow(1) of $587 million
•Year-to-date capital return totaled $1.8 billion, including $1.6 billion of share repurchases
TAMPA, FL, November 7, 2022 - The Mosaic Company (NYSE: MOS), reported net income of $842 million, or $2.42 per diluted share, for the third quarter of 2022. Adjusted EPS(1) was $3.22 and Adjusted EBITDA(1) was $1.7 billion. Gross margin was $1.5 billion.
“Mosaic delivered record sales in the first nine months of 2022, and we expect favorable fundamentals as we conclude the year and look forward to 2023,” said Joc O’Rourke, President and CEO. “We are returning capital to shareholders while strengthening the balance sheet and investing in the business to generate strong results throughout the cycle.”
Highlights:
•Third quarter revenues were up 56 percent year-over-year to $5.3 billion. The gross margin rate in the quarter was 28 percent, up from 25 percent in third quarter of 2021.
•Adjusted EBITDA totaled $1.7 billion, up from the prior year period total of $969 million. The company generated cash flow from operations of $889 million and free cash flow of $587 million(1).
•Potash operating earnings totaled $793 million, up from $220 million in the prior year period, and adjusted EBITDA totaled $871 million, up from $272 million in the third quarter of 2021.
•Phosphates operating earnings totaled $131 million, down from $326 million in the prior year period. This quarter's operating earnings included $226 million of notable items, most of which was related to a noncash adjustment to future asset retirement obligation expenses. Third quarter adjusted EBITDA totaled $481 million, up from $479 million last year.
•Mosaic Fertilizantes operating earnings totaled $323 million and adjusted EBITDA totaled $343 million in the third quarter of 2022. This compares to operating earnings of $290 million and adjusted EBITDA of $317 million from the prior year period.
•Equity earnings from MWSPC, the joint venture in Saudi Arabia, totaled $72 million in the third quarter and $137 million year-to date, which is excluded from adjusted EBITDA.
(1)See “Non-GAAP Financial Measures” for additional information and reconciliation.
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•The company remains committed to its capital allocation strategy:
•Mosaic returned $1.8 billion to shareholders during the first nine months of 2022, including $1.6 billion of share repurchases, which represents 96% of free cash flow(1) and 58% of net income. Mosaic remains committed to returning 100% of 2022 free cash flow(1), after debt reduction commitments are met, to shareholders through a combination of share repurchases and dividends. As of the end of the third quarter, Mosaic had completed the second $1.0 billion authorization approved by the Board last February and had begun repurchasing shares under the most recently approved $2.0 billion authorization.
•The company expects to complete its goal of reducing long-term debt by $1.0 billion with the retirement of $550 million later this month. Mosaic has no plan to further reduce long-term debt.
•Total expected capital expenditures in 2022 remain unchanged at $1.3 billion. Growth investments reflect the optimization of the Esterhazy complex, a restart of the second mill at Colonsay, and reserve additions for a mine extension at South Fort Meade.
Third Quarter Segment Results
| Potash Results | Q3 2022 | Q2 2022 | Q3 2021 | ||||||||
| Sales Volumes million tonnes* | 2.1 | 2.3 | 1.8 | ||||||||
MOP Selling Price(2) | $666 | $678 | $290 | ||||||||
| Gross Margin (GAAP) per tonne | $373 | $403 | $131 | ||||||||
Adjusted Gross Margin (non-GAAP) per tonne(1) | $373 | $403 | $131 | ||||||||
| Operating Earnings - millions | $793 | $915 | $220 | ||||||||
Segment Adjusted EBITDA(1) - millions | $871 | $998 | $272 | ||||||||
*Tonnes = finished product tonnes
Net sales in the Potash segment totaled $1.4 billion, up from $589 million one year ago, due to higher prices and volumes. Gross margin was $799 million compared to $236 million for the same period a year ago, as higher pricing and volumes were partially offset by higher royalties and Canadian resource taxes. Gross margin per tonne was $373 compared to $131 in the prior-year period.
Total potash production was 2.3 million tonnes, up from 1.6 million tonnes in the prior year period, reflecting the contribution from K3 and Colonsay. Sales volumes totaled 2.1 million tonnes, up from 1.8 million tonnes in the prior year quarter.
MOP cash costs were $78 per tonne, compared to $72 per tonne in the prior year period. Costs reflected the inclusion of production from the higher-cost Colonsay mine, higher natural gas costs at Belle Plaine, and higher price-related royalties.
Sales volumes in the fourth quarter are expected to be 2.0-2.2 million tonnes with realized mine-gate MOP prices in the range of $580-$630 per tonne.
(1)See “Non-GAAP Financial Measures” for additional information and reconciliation.
(2) Average MOP Selling Price (fob mine)
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| Phosphate Results | Q3 2022 | Q2 2022 | Q3 2021 | ||||||||
| Sales Volumes million tonnes* | 1.7 | 1.7 | 1.8 | ||||||||
DAP Selling Price(4) | $809 | $920 | $605 | ||||||||
| Gross Margin (GAAP) per tonne | $217 | $383 | $198 | ||||||||
Adjusted Gross Margin (non-GAAP) per tonne(1) | $222 | $383 | $208 | ||||||||
| Operating Earnings - millions | $131 | $578 | $326 | ||||||||
Segment Adjusted EBITDA(1) - millions | $481 | $758 | $479 | ||||||||
*Tonnes = finished product tonnes
Net sales in the Phosphate segment were $1.6 billion, up from $1.3 billion in the prior year period, due to higher year-over-year prices. Gross margin was $358 million, compared to $364 million for the same period a year ago, as improved pricing was offset by lower volumes and higher raw material costs. Gross margin per tonne was $217 compared to $198 in the prior-year period, reflecting the impact of higher unit prices.
Production of finished phosphates totaled 1.7 million tonnes, down 4 percent year-over-year, and sales volumes totaled 1.7 million tonnes, down 10 percent year-over-year. Lower production was a result of plant turnarounds and the impact of Hurricane Ian at the end of the quarter. Cash conversion costs were $85 per tonne, up from the year ago level of $68 per tonne, reflecting the impact of rising inflation and the hurricane.
Mosaic benefited from its advantaged ammonia cost position during the third quarter. The price of ammonia realized in cost of goods sold averaged $665 per tonne, well below the $1,070 per tonne average third quarter spot price.
Sales volumes in the fourth quarter are expected to be 1.7-2.0 million tonnes with DAP prices on an FOB basis averaging $700-$750 per tonne. Lower raw material prices are expected to provide a sequential benefit of $40-$45 per tonne in the fourth quarter.
| Mosaic Fertilizantes Results | Q3 2022 | Q2 2022 | Q3 2021 | ||||||||
| Sales Volumes million tonnes* | 2.8 | 2.3 | 3.4 | ||||||||
| Finished Product Selling Price | $931 | $974 | $524 | ||||||||
| Gross Margin (GAAP) per tonne | $123 | $194 | $99 | ||||||||
Adjusted Gross Margin (non GAAP) per tonne(1) | $118 | $194 | $98 | ||||||||
| Operating Earnings - millions | $323 | $420 | $290 | ||||||||
Segment Adjusted EBITDA(1) - millions | $343 | $444 | $317 | ||||||||
*Tonnes = finished product tonnes
Net sales in the Mosaic Fertilizantes segment were $2.6 billion, up from $1.8 billion in the prior year period due to higher year-over-year prices, partially offset by lower volumes. Higher costs of goods sold reflect higher prices for purchased nitrogen and potash products for distribution and sulfur and ammonia for phosphate production.
Gross margin was $348 million, compared to $332 million for the same period a year ago, primarily as a result of improved pricing and transformation benefits, partially offset by higher raw material costs, inflationary pressures on production costs, and lower volumes. Gross margin per tonne was $123 in the third quarter, up from $99 in the prior year period.
(1)See “Non-GAAP Financial Measures” for additional information and reconciliation.
(4)Average DAP Selling Price (fob plant)
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Other
Selling, general, and administrative costs (SG&A) were $125 million, up from $98 million in the year-ago period. As part of ongoing transformation efforts, Mosaic has initiated a "Global Digital Acceleration" program aimed at extracting efficiencies through the optimization of its internal technology systems, and this has resulted in increased spending related to information technology consulting.
The effective tax rate during the quarter was 26.1 percent. The company expects an effective rate for full year 2022 in the mid-20 percent range under current tax laws and regulations.
Market Outlook
Grain and oilseed markets are expected to remain tight through 2022 and 2023. The disruption to Ukraine's agricultural production caused by war, coupled with poor growing conditions in several major growing regions like the Americas, Europe and China, have resulted in lower global agricultural production. This suggests that global stocks-to-use ratios, already projected at 20-year lows, will remain under pressure.
Historically elevated crop prices, coupled with fertilizer pricing that has moderated from the post-Ukraine-invasion spike, justifies a return to normal nutrient applications. In North America, sentiment has improved significantly from the spring season. As a result, fall nutrient application rates are trending toward normal levels, and this is expected to deplete channel inventories. In Brazil, nutrient prices remain historically elevated but have retreated to levels that are incenting in-country shipments, which are expected to pull year-end inventories down to levels comparable to last year. In India, government subsidies, particularly for phosphates, are expected to remain at levels that support imports.
For both potash and phosphates, supply constraints remain. In potash, we maintain our expectation that annual production from Belarus will be down 8 million tonnes year-over-year in 2022, and very little recovery is expected next year. In phosphates, China's exports are estimated to be reduced by as much as 5 million tonnes versus 2021, and current export restrictions are expected to be extended into 2023. Together, the fundamental tightness in global markets for both potash and phosphates is expected to persist well into 2023 and quite likely beyond.
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2022 Expectations and Key Assumptions
The Company provides the following modeling assumptions for the full year 2022:
| Modeling Assumptions | Full Year 2022 | ||||
| Total Capital Expenditures | $1.3 billion | ||||
| Depreciation, Depletion & Amortization | $890 - $900 million | ||||
| Selling, General, and Administrative Expense | $460 - $490 million | ||||
| Net Interest Expense | $130 - $140 million | ||||
| Non-notable adjustments | $100 - $110 million | ||||
| Effective tax rate | Mid 20’s % | ||||
| Cash tax rate | Low 20's % | ||||
Sensitivities Table Using 2021 Cost Structure
The Company provides the following sensitivities to price and foreign exchange rates to help investors anticipate the potential impact of movements in these factors. These sensitivities are based on 2021 actual realized pricing and sales volumes.
| Sensitivity | Full year Adj. EBITDA impact(1) | 2021 Actual | ||||||
Average MOP Price / tonne (fob mine)(6) | $10/mt price change = $64 million (5) | $285 | ||||||
Average DAP Price / tonne (fob plant)(6) | $10/mt price change = $94 million | $564 | ||||||
| Average BRL / USD | 0.10 change, unhedged = $10 million(7) | 5.39 | ||||||
(1)See “Non-GAAP Financial Measures” for additional information and reconciliation.
(5) Includes impact of Canadian Resource Tax
(6) Approximately 20% of DAP price sensitivity impact is expected to be in the Mosaic Fertilizantes segment.; approximately 5% of the MOP price sensitivity impact is expected to be in the Mosaic Fertilizantes segment.
(7) The company hedged about 50 percent of the annual sensitivity. Over longer periods of time, inflation is expected to offset a portion of currency benefits.
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About The Mosaic Company
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.
Mosaic has posted prepared comments and related slides on its website, www.mosaicco.com/investors, concurrently with the posting of this release and performance data. In addition, the company will provide access to a fireside chat addressing questions on the quarter, current market conditions, and other topics on Tuesday, November 8, 2022, at 11 am Eastern. The fireside chat will be available both on the website and via telephone at the following number: 412-902-6506, Conference ID: 6058962 . All earnings related material, including audio, will be available up to one year from the time of the earnings call.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about proposed or pending future transactions or strategic plans and other statements about future financial and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: the economic impact and operating impacts of the coronavirus (Covid-19) pandemic, political and economic instability and changes in government policies in Brazil and other countries in which we have operations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates, including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the future success of current plans for MWSPC and any future changes in those plans; difficulties with realization of the benefits of our natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties, or the costs of the MWSPC; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s potash mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
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Non-GAAP Financial Measures
This press release includes the presentation and discussion of non-GAAP diluted net earnings per share guidance, or adjusted EPS, and adjusted EBITDA, adjusted gross margin referred to as non-GAAP financial measures and free cash flow. Generally, a non-GAAP financial measure is a supplemental numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP. Non-GAAP financial measures should not be considered as substitutes for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, because non-GAAP measures are not determined in accordance with GAAP, they are thus susceptible to varying interpretations and calculations and may not be comparable to other similarly titled measures of other companies. Adjusted metrics, including adjusted EPS and adjusted EBITDA are calculated by excluding the impact of notable items from the GAAP measure. Notable items impact on gross margin and EBITDA is pretax. Notable items impact on diluted net earnings per share is calculated as the notable item amount plus income tax effect, based on expected annual effective tax rate, divided by diluted weighted average shares. Free cash flow is defined as net cash provided by operating activities less capital expenditures, and adjusted for changes in working capital financing. Management believes that these adjusted measures provide securities analysts, investors, management and others with useful supplemental information regarding our performance by excluding and/or including certain items that may not be indicative of, or are unrelated to, our core operating results. Management utilizes these adjusted measures in analyzing and assessing Mosaic’s overall performance and financial trends, for financial and operating decision-making, and to forecast and plan for future periods. These adjusted measures also assist our management in comparing our and our competitors' operating results. Reconciliations for current and historical periods beginning with the quarter ended December 31, 2020, for consolidated adjusted EPS and adjusted EBITDA, as well as segment adjusted EBITDA and adjusted gross margin per tonne are provided in the Selected Calendar Quarter Financial Information performance data for the related periods. This information is being furnished under Exhibit 99.2 of the Form 8-K and available on our website at www.mosaicco.com in the “Financial Information - Quarterly Earnings” section under the “Investors” tab.
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For the three months ended September 30, 2022, the company reported the following notable items which, combined, negatively impacted earnings per share by $(0.80):
| Amount | Tax effect | EPS impact | ||||||||||||||||||||||||||||||
| Description | Segment | Line item | (in millions) | (in millions) | (per share) | |||||||||||||||||||||||||||
| Foreign currency transaction gain (loss) | Consolidated | Foreign currency transaction gain (loss) | $ | (61) | $ | 16 | $ | (0.13) | ||||||||||||||||||||||||
| Unrealized gain (loss) on derivatives | Corporate and Other | Cost of goods sold | (76) | 20 | (0.16) | |||||||||||||||||||||||||||
| Closed and indefinitely idled facility costs | Phosphate | Other operating income (expense) | (12) | 4 | (0.02) | |||||||||||||||||||||||||||
| FX functional currency | Mosaic Fertilizantes | Cost of goods sold | 14 | (4) | 0.03 | |||||||||||||||||||||||||||
| Discrete tax items | Consolidated | (Provision for) benefit from income taxes | — | (12) | (0.04) | |||||||||||||||||||||||||||
| ARO Adjustment | Phosphates | Other operating income (expense) | (143) | 36 | (0.31) | |||||||||||||||||||||||||||
| Environmental reserve | Phosphates | Other operating income (expense) | (71) | 18 | (0.15) | |||||||||||||||||||||||||||
| Hurricane Ian idle costs | Phosphates | Cost of goods sold | (9) | 2 | (0.02) | |||||||||||||||||||||||||||
| Insurance proceeds | Phosphates | Other operating income (expense) | 4 | (1) | 0.01 | |||||||||||||||||||||||||||
| ARO Adjustment | Mosaic Fertilizantes | Other operating income (expense) | (3) | 1 | (0.01) | |||||||||||||||||||||||||||
| Total Notable Items | $ | (357) | $ | 80 | $ | (0.80) | ||||||||||||||||||||||||||
For the three months ended September 30, 2021, the company reported the following notable items which, combined, negatively impacted earnings per share by $(0.38):
| Amount | Tax effect | EPS impact | ||||||||||||||||||||||||||||||
| Description | Segment | Line item | (in millions) | (in millions) | (per share) | |||||||||||||||||||||||||||
| Foreign currency transaction gain (loss) | Consolidated | Foreign currency transaction gain (loss) | $ | (100) | $ | 25 | $ | (0.19) | ||||||||||||||||||||||||
| Unrealized gain (loss) on derivatives | Corporate and Other | Cost of goods sold | (26) | 6 | (0.05) | |||||||||||||||||||||||||||
| Closed and indefinitely idled facility costs | Phosphates | Other operating income (expense) | (11) | 3 | (0.03) | |||||||||||||||||||||||||||
| Pre-acquisition reserve adjustment | Mosaic Fertilizantes | Other operating income (expense) | (3) | 1 | (0.01) | |||||||||||||||||||||||||||
| Discrete tax items | Consolidated | (Provision for) benefit from income taxes | — | (19) | (0.05) | |||||||||||||||||||||||||||
| ARO Adjustment | Phosphates | Other operating income (expense) | (13) | 3 | (0.03) | |||||||||||||||||||||||||||
| FX functional currency | Mosaic Fertilizantes | Cost of goods sold | 3 | (1) | 0.01 | |||||||||||||||||||||||||||
| Hurricane Ida recovery | Phosphates | Cost of goods sold/Other income (expense) | (18) | 5 | (0.03) | |||||||||||||||||||||||||||
| Total Notable Items | $ | (168) | $ | 23 | $ | (0.38) | ||||||||||||||||||||||||||
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Condensed Consolidated Statements of Earnings
(in millions, except per share amounts)
| The Mosaic Company | (unaudited) | |||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Net sales | $ | 5,348.5 | $ | 3,418.6 | $ | 14,643.9 | $ | 8,516.4 | ||||||||||||||||||
| Cost of goods sold | 3,846.5 | 2,554.1 | 9,856.5 | 6,464.7 | ||||||||||||||||||||||
| Gross margin | 1,502.0 | 864.5 | 4,787.4 | 2,051.7 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 124.5 | 97.7 | 365.1 | 307.0 | ||||||||||||||||||||||
| Mine closure costs | — | — | — | 158.1 | ||||||||||||||||||||||
| Other operating expense | 222.8 | 65.2 | 337.6 | 87.8 | ||||||||||||||||||||||
| Operating earnings | 1,154.7 | 701.6 | 4,084.7 | 1,498.8 | ||||||||||||||||||||||
| Interest expense, net | (30.6) | (47.8) | (104.0) | (130.1) | ||||||||||||||||||||||
| Foreign currency transaction gain (loss) | (61.1) | (100.1) | 22.4 | (34.8) | ||||||||||||||||||||||
| Other income (expense) | (2.3) | 0.6 | (37.8) | 5.0 | ||||||||||||||||||||||
| Earnings from consolidated companies before income taxes | 1,060.7 | 554.3 | 3,965.3 | 1,338.9 | ||||||||||||||||||||||
| Provision for income taxes | 276.6 | 176.6 | 1,018.3 | 352.2 | ||||||||||||||||||||||
| Earnings from consolidated companies | 784.1 | 377.7 | 2,947.0 | 986.7 | ||||||||||||||||||||||
| Equity in net earnings (loss) of nonconsolidated companies | 72.1 | (1.2) | 138.7 | (13.2) | ||||||||||||||||||||||
| Net earnings including noncontrolling interests | 856.2 | 376.5 | 3,085.7 | 973.5 | ||||||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interests | 14.5 | 4.6 | 26.1 | 7.7 | ||||||||||||||||||||||
| Net earnings attributable to Mosaic | $ | 841.7 | $ | 371.9 | $ | 3,059.6 | $ | 965.8 | ||||||||||||||||||
| Diluted net earnings per share attributable to Mosaic | $ | 2.42 | $ | 0.97 | $ | 8.50 | $ | 2.52 | ||||||||||||||||||
| Diluted weighted average number of shares outstanding | 347.7 | 383.2 | 360.1 | 383.0 | ||||||||||||||||||||||
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Condensed Consolidated Balance Sheets
(in millions, except per share amounts)
| The Mosaic Company | (unaudited) | |||||||
| September 30, 2022 | December 31, 2021 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 702.8 | $ | 769.5 | ||||||||||
| Receivables, net, including affiliate receivables of $658.1 and $445.0, respectively | 1,899.8 | 1,531.9 | ||||||||||||
| Inventories | 3,781.2 | 2,741.4 | ||||||||||||
| Other current assets | 515.9 | 282.5 | ||||||||||||
| Total current assets | 6,899.7 | 5,325.3 | ||||||||||||
| Property, plant and equipment, net of accumulated depreciation of $8,753.2 and $8,238.1, respectively | 12,462.5 | 12,475.3 | ||||||||||||
| Investments in nonconsolidated companies | 831.7 | 691.8 | ||||||||||||
| Goodwill | 1,106.3 | 1,172.2 | ||||||||||||
| Deferred income taxes | 753.3 | 997.1 | ||||||||||||
| Other assets | 1,384.1 | 1,374.7 | ||||||||||||
| Total assets | $ | 23,437.6 | $ | 22,036.4 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Short-term debt | $ | 200.6 | $ | 302.8 | ||||||||||
| Current maturities of long-term debt | 630.1 | 596.6 | ||||||||||||
| Structured accounts payable arrangements | 632.5 | 743.7 | ||||||||||||
| Accounts payable | 1,199.8 | 1,260.7 | ||||||||||||
| Accrued liabilities | 2,467.3 | 1,883.6 | ||||||||||||
| Total current liabilities | 5,130.3 | 4,787.4 | ||||||||||||
| Long-term debt, less current maturities | 3,329.3 | 3,382.2 | ||||||||||||
| Deferred income taxes | 1,009.1 | 1,016.2 | ||||||||||||
| Other noncurrent liabilities | 2,233.6 | 2,102.1 | ||||||||||||
| Equity: | ||||||||||||||
| Preferred Stock, $0.01 par value, 15,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021 | — | — | ||||||||||||
| Common Stock, $0.01 par value, 1,000,000,000 shares authorized, 391,920,657 shares issued and 340,437,227 shares outstanding as of September 30, 2022, 390,815,099 shares issued and 368,732,231 shares outstanding as of December 31, 2021 | 3.4 | 3.7 | ||||||||||||
| Capital in excess of par value | — | 478.0 | ||||||||||||
| Retained earnings | 13,858.0 | 12,014.2 | ||||||||||||
| Accumulated other comprehensive loss | (2,280.8) | (1,891.8) | ||||||||||||
| Total Mosaic stockholders' equity | 11,580.6 | 10,604.1 | ||||||||||||
| Noncontrolling interests | 154.7 | 144.4 | ||||||||||||
| Total equity | 11,735.3 | 10,748.5 | ||||||||||||
| Total liabilities and equity | $ | 23,437.6 | $ | 22,036.4 | ||||||||||
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Condensed Consolidated Statements of Cash Flows
(in millions, except per share amounts)
| The Mosaic Company | (unaudited) | |||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 888.8 | $ | 422.7 | $ | 2,980.1 | $ | 1,756.6 | ||||||||||||||||||
| Cash Flows from Investing Activities: | ||||||||||||||||||||||||||
| Capital expenditures | (353.7) | (340.0) | (906.8) | (925.8) | ||||||||||||||||||||||
| Purchases of available-for-sale securities - restricted | (33.7) | (122.8) | (459.6) | (323.3) | ||||||||||||||||||||||
| Proceeds from sale of available-for-sale securities - restricted | 29.4 | 117.1 | 444.6 | 303.2 | ||||||||||||||||||||||
| Other | 3.4 | (5.3) | 5.3 | 15.3 | ||||||||||||||||||||||
| Net cash used in investing activities | (354.6) | (351.0) | (916.5) | (930.6) | ||||||||||||||||||||||
| Cash Flows from Financing Activities: | ||||||||||||||||||||||||||
| Payments of short-term debt | (39.3) | — | (158.6) | (25.0) | ||||||||||||||||||||||
| Proceeds from issuance of short-term debt | 22.5 | — | 152.8 | 25.0 | ||||||||||||||||||||||
| Payments of inventory financing arrangement | (200.6) | — | (1,451.0) | — | ||||||||||||||||||||||
| Proceeds from inventory financing arrangement | 401.1 | — | 1,348.8 | — | ||||||||||||||||||||||
| Payments of structured accounts payable arrangements | (373.4) | (333.0) | (1,144.1) | (675.7) | ||||||||||||||||||||||
| Proceeds from structured accounts payable arrangements | 224.2 | 235.2 | 1,020.6 | 762.7 | ||||||||||||||||||||||
| Collections of transferred receivables | 600.1 | 121.6 | 1,283.6 | 310.3 | ||||||||||||||||||||||
| Payments of transferred receivables | (598.9) | (102.2) | (1,363.5) | (262.8) | ||||||||||||||||||||||
| Payments of long-term debt | (15.9) | (466.0) | (44.5) | (594.7) | ||||||||||||||||||||||
| Repurchases of stock | (601.8) | (20.0) | (1,601.2) | (20.0) | ||||||||||||||||||||||
| Cash dividends paid | (68.8) | (47.9) | (163.3) | (95.4) | ||||||||||||||||||||||
| Other | 1.3 | (6.0) | 14.7 | (3.1) | ||||||||||||||||||||||
| Net cash used in financing activities | (649.5) | (618.3) | (2,105.7) | (578.7) | ||||||||||||||||||||||
| Effect of exchange rate changes on cash | (19.6) | (32.1) | (21.7) | 17.0 | ||||||||||||||||||||||
| Net change in cash, cash equivalents and restricted cash | (134.9) | (578.7) | (63.8) | 264.3 | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash - beginning of period | 857.4 | 1,437.4 | 786.3 | 594.4 | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash - end of period | $ | 722.5 | $ | 858.7 | $ | 722.5 | $ | 858.7 | ||||||||||||||||||
11
| Three months ended | ||||||||||||||
| September 30, 2022 | September 30, 2021 | |||||||||||||
| Reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets to the unaudited statements of cash flows: | ||||||||||||||
| Cash and cash equivalents | $ | 702.8 | $ | 842.8 | ||||||||||
| Restricted cash in other current assets | 8.6 | 8.6 | ||||||||||||
| Restricted cash in other assets | 11.1 | 7.3 | ||||||||||||
| Total cash, cash equivalents and restricted cash shown in the unaudited statements of cash flows | $ | 722.5 | $ | 858.7 | ||||||||||
12
Condensed Consolidated Statements of Equity
(In millions, except per share amounts)
| The Mosaic Company | (unaudited) | |||||||
| Mosaic Shareholders | |||||||||||||||||||||||||||||||||||||||||
| Shares | Dollars | ||||||||||||||||||||||||||||||||||||||||
| Common Stock | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive (Loss) | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2022 | 352.1 | $ | 3.5 | $ | — | $ | 13,634.9 | $ | (1,887.1) | $ | 157.7 | $ | 11,909.0 | ||||||||||||||||||||||||||||
| Total comprehensive income (loss) | — | — | — | 841.7 | (393.7) | 13.7 | 461.7 | ||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | 1.3 | — | — | — | 1.3 | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | 0.3 | — | — | — | 0.3 | ||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | 6.5 | — | — | — | 6.5 | ||||||||||||||||||||||||||||||||||
| Share repurchases | (11.7) | (0.1) | (8.1) | (566.6) | — | — | (574.8) | ||||||||||||||||||||||||||||||||||
| Dividends ($0.15 per share) | — | — | — | (52.0) | — | — | (52.0) | ||||||||||||||||||||||||||||||||||
| Dividends for noncontrolling interests | — | — | — | — | — | (16.7) | (16.7) | ||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2022 | 340.4 | $ | 3.4 | $ | — | $ | 13,858.0 | $ | (2,280.8) | $ | 154.7 | $ | 11,735.3 | ||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 368.7 | $ | 3.7 | $ | 478.0 | $ | 12,014.2 | $ | (1,891.8) | $ | 144.4 | $ | 10,748.5 | ||||||||||||||||||||||||||||
| Total comprehensive income (loss) | — | — | — | 3,059.6 | (389.0) | 27.0 | 2,697.6 | ||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | 14.7 | — | — | — | 14.7 | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | 1.1 | — | (18.9) | — | — | — | (18.9) | ||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | 25.6 | — | — | — | 25.6 | ||||||||||||||||||||||||||||||||||
| Share repurchases | (29.4) | (0.3) | (499.4) | (1,109.5) | — | — | (1,609.2) | ||||||||||||||||||||||||||||||||||
| Dividends ($0.30 per share) | — | — | — | (106.3) | — | — | (106.3) | ||||||||||||||||||||||||||||||||||
| Dividends for noncontrolling interests | — | — | — | — | — | (16.7) | (16.7) | ||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2022 | 340.4 | $ | 3.4 | $ | — | $ | 13,858.0 | $ | (2,280.8) | $ | 154.7 | $ | 11,735.3 | ||||||||||||||||||||||||||||
13
Reconciliation of Non-GAAP Financial Measures
Earnings Per Share Calculation
| Three months ended September 30, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Net income attributable to Mosaic | $ | 841.7 | $ | 371.9 | ||||||||||
| Basic weighted average number of shares outstanding | 344.2 | 379.8 | ||||||||||||
| Dilutive impact of share-based awards | 3.5 | 3.4 | ||||||||||||
| Diluted weighted average number of shares outstanding | 347.7 | 383.2 | ||||||||||||
| Basic net income per share attributable to Mosaic | $ | 2.45 | $ | 0.98 | ||||||||||
| Diluted net income per share attributable to Mosaic | $ | 2.42 | $ | 0.97 | ||||||||||
| Notable items impact on net income per share attributable to Mosaic | 0.80 | 0.38 | ||||||||||||
| Adjusted diluted net income per share attributable to Mosaic | $ | 3.22 | $ | 1.35 | ||||||||||
Free Cash Flow
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||
| 2022 | 2022 | |||||||||||||
| Net cash provided by operating activities | $ | 889 | $ | 2,980 | ||||||||||
| Capital expenditures | (353) | (907) | ||||||||||||
Working capital financing(a) | 51 | (226) | ||||||||||||
| Free cash flow | $ | 587 | $ | 1,847 | ||||||||||
(a) Includes net proceeds (payments) from inventory financing arrangements and structured accounts payable arrangements.
Adjusted EBITDA
Consolidated Earnings (in millions) | Three months ended September 30, | |||||||||||||
| 2022 | 2021 | |||||||||||||
| Consolidated net earnings attributable to Mosaic | $ | 842 | $ | 372 | ||||||||||
| Less: Consolidated interest expense, net | (31) | (48) | ||||||||||||
| Plus: Consolidated depreciation, depletion and amortization | 229 | 186 | ||||||||||||
| Plus: Accretion expense | 19 | 17 | ||||||||||||
| Plus: Share-based compensation (income) expense | 6 | 5 | ||||||||||||
| Plus: Consolidated provision for (benefit from) income taxes | 277 | 177 | ||||||||||||
| Less: Equity in net earnings (loss) of nonconsolidated companies, net of dividends | 72 | (1) | ||||||||||||
| Plus: Notable items | 354 | 163 | ||||||||||||
| Adjusted EBITDA | $ | 1,686 | $ | 969 | ||||||||||
14
| Three months ended | ||||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
Potash Earnings (in millions) | 2022 | 2022 | 2021 | |||||||||||||||||
| Operating Earnings | $ | 793 | $ | 915 | $ | 220 | ||||||||||||||
| Plus: Depreciation, Depletion and Amortization | 76 | 81 | 50 | |||||||||||||||||
| Plus: Accretion Expense | 2 | 2 | 2 | |||||||||||||||||
| Plus: Foreign Exchange Gain (Loss) | (19) | (23) | (38) | |||||||||||||||||
| Plus: Notable Items | 19 | 23 | 38 | |||||||||||||||||
| Adjusted EBITDA | $ | 871 | $ | 998 | $ | 272 | ||||||||||||||
| Three months ended | ||||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
Phosphates Earnings (in millions) | 2022 | 2022 | 2021 | |||||||||||||||||
| Operating Earnings | $ | 131 | $ | 578 | $ | 326 | ||||||||||||||
| Plus: Depreciation, Depletion and Amortization | 121 | 133 | 106 | |||||||||||||||||
| Plus: Accretion Expense | 13 | 14 | 13 | |||||||||||||||||
| Plus: Foreign Exchange Gain (Loss) | 3 | — | 6 | |||||||||||||||||
| Plus: Other Income (Expense) | 1 | (24) | 1 | |||||||||||||||||
| Less: Earnings (Loss) from Consolidated Noncontrolling Interests | 14 | 9 | 4 | |||||||||||||||||
| Plus: Notable Items | 226 | 66 | 31 | |||||||||||||||||
| Adjusted EBITDA | $ | 481 | $ | 758 | $ | 479 | ||||||||||||||
| Three months ended | ||||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
Mosaic Fertilizantes (in millions) | 2022 | 2022 | 2021 | |||||||||||||||||
| Operating Earnings | $ | 323 | $ | 420 | $ | 290 | ||||||||||||||
| Plus: Depreciation, Depletion and Amortization | 28 | 27 | 26 | |||||||||||||||||
| Plus: Accretion Expense | 4 | 4 | 3 | |||||||||||||||||
| Plus: Foreign Exchange Gain (Loss) | (66) | (83) | (40) | |||||||||||||||||
| Plus: Other Income | (1) | (1) | (2) | |||||||||||||||||
| Less: Earnings (Loss) from Consolidated Noncontrolling Interests | — | (1) | — | |||||||||||||||||
| Plus: Notable Items | 55 | 76 | 40 | |||||||||||||||||
| Adjusted EBITDA | $ | 343 | $ | 444 | $ | 317 | ||||||||||||||
15
| Three months ended | ||||||||||||||||||||
Potash Gross Margin (per tonne) | September 30, | June 30, | September 30, | |||||||||||||||||
| 2022 | 2022 | 2021 | ||||||||||||||||||
| Gross margin / tonne | $ | 373 | $ | 403 | $ | 131 | ||||||||||||||
| Notable items in gross margin / tonne | — | — | — | |||||||||||||||||
| Adjusted gross margin / tonne | $ | 373 | $ | 403 | $ | 131 | ||||||||||||||
| Three months ended | ||||||||||||||||||||
Phosphate Gross Margin (per tonne) | September 30, | June 30, | September 30, | |||||||||||||||||
| 2022 | 2022 | 2021 | ||||||||||||||||||
| Gross margin / tonne | $ | 217 | $ | 383 | $ | 198 | ||||||||||||||
| Notable items in gross margin / tonne | 5 | — | 10 | |||||||||||||||||
| Adjusted gross margin / tonne | $ | 222 | $ | 383 | $ | 208 | ||||||||||||||
| Three months ended | ||||||||||||||||||||
Mosaic Fertilizantes Gross Margin (per tonne) | September 30, | June 30, | September 30, | |||||||||||||||||
| 2022 | 2022 | 2021 | ||||||||||||||||||
| Gross margin / tonne | $ | 123 | $ | 194 | $ | 99 | ||||||||||||||
| Notable items in gross margin / tonne | (5) | — | (1) | |||||||||||||||||
| Adjusted gross margin / tonne | $ | 118 | $ | 194 | $ | 98 | ||||||||||||||
16