QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Table of Contents | ||||
PART I. | FINANCIAL INFORMATION | |||
Item 1. | ||||
Condensed Consolidated Statements of (Loss) Earnings | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
PART II. | OTHER INFORMATION | |||
Item 1. | ||||
Item 1A. | ||||
Item 2. | ||||
Item 4. | ||||
Item 6. | ||||
Three months ended | |||||||
March 31, 2020 | March 31, 2019 | ||||||
Net sales | $ | $ | |||||
Cost of goods sold | |||||||
Gross margin | |||||||
Selling, general and administrative expenses | |||||||
Other operating expense | |||||||
Operating (loss) earnings | ( | ) | |||||
Interest expense, net | ( | ) | ( | ) | |||
Foreign currency transaction (loss) gain | ( | ) | |||||
Other income (expense) | ( | ) | |||||
(Loss) earnings from consolidated companies before income taxes | ( | ) | |||||
(Benefit from) provision for income taxes | ( | ) | |||||
(Loss) earnings from consolidated companies | ( | ) | |||||
Equity in net (loss) of nonconsolidated companies | ( | ) | ( | ) | |||
Net (loss) earnings including noncontrolling interests | ( | ) | |||||
Less: Net (loss) attributable to noncontrolling interests | ( | ) | ( | ) | |||
Net (loss) earnings attributable to Mosaic | $ | ( | ) | $ | |||
Basic net (loss) earnings per share attributable to Mosaic | $ | ( | ) | $ | |||
Basic weighted average number of shares outstanding | |||||||
Diluted net (loss) earnings per share attributable to Mosaic | $ | ( | ) | $ | |||
Diluted weighted average number of shares outstanding | |||||||
Three months ended | |||||||
March 31, 2020 | March 31, 2019 | ||||||
Net (loss) earnings including noncontrolling interest | $ | ( | ) | $ | |||
Other comprehensive (loss) income, net of tax | |||||||
Foreign currency translation (loss) gain | ( | ) | |||||
Net actuarial gain (loss) and prior service cost | ( | ) | |||||
Realized gain on interest rate swap | |||||||
Net gain on marketable securities held in trust fund | |||||||
Other comprehensive (loss) income | ( | ) | |||||
Comprehensive (loss) income | ( | ) | |||||
Less: Comprehensive (loss) attributable to noncontrolling interest | ( | ) | ( | ) | |||
Comprehensive (loss) income attributable to Mosaic | $ | ( | ) | $ | |||
March 31, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Receivables, net | ||||||||
Inventories | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment, net of accumulated depreciation of $7,268.0 million and $7,292.0 million, respectively | ||||||||
Investments in nonconsolidated companies | ||||||||
Goodwill | ||||||||
Deferred income taxes | ||||||||
Other assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | $ | ||||||
Current maturities of long-term debt | ||||||||
Structured accounts payable arrangements | ||||||||
Accounts payable | ||||||||
Accrued liabilities | ||||||||
Total current liabilities | ||||||||
Long-term debt, less current maturities | ||||||||
Deferred income taxes | ||||||||
Other noncurrent liabilities | ||||||||
Equity: | ||||||||
Preferred Stock, $0.01 par value, 15,000,000 shares authorized, none issued and outstanding as of March 31, 2020 and December 31, 2019 | ||||||||
Common Stock, $0.01 par value, 1,000,000,000 shares authorized, 389,902,778 shares issued and 379,020,281 shares outstanding as of March 31, 2020, 389,646,939 shares issued and 378,764,442 shares outstanding as of December 31, 2019 | ||||||||
Capital in excess of par value | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Total Mosaic stockholders' equity | ||||||||
Noncontrolling interests | ||||||||
Total equity | ||||||||
Total liabilities and equity | $ | $ | ||||||
Three months ended | ||||||||
March 31, 2020 | March 31, 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net (loss) earnings including noncontrolling interests | $ | ( | ) | $ | ||||
Adjustments to reconcile net (loss) earnings including noncontrolling interests to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | ||||||||
Deferred and other income taxes | ( | ) | ||||||
Equity in net loss of nonconsolidated companies, net of dividends | ||||||||
Accretion expense for asset retirement obligations | ||||||||
Share-based compensation expense | ( | ) | ||||||
Unrealized loss (gain) on derivatives | ( | ) | ||||||
Other | ||||||||
Changes in assets and liabilities: | ||||||||
Receivables, net | ||||||||
Inventories | ( | ) | ( | ) | ||||
Other current and noncurrent assets | ( | ) | ( | ) | ||||
Accounts payable and accrued liabilities | ( | ) | ||||||
Other noncurrent liabilities | ( | ) | ( | ) | ||||
Net cash provided by (used in) operating activities | ( | ) | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | ( | ) | ( | ) | ||||
Purchases of available-for-sale securities - restricted | ( | ) | ( | ) | ||||
Proceeds from sale of available-for-sale securities - restricted | ||||||||
Purchases of held-to-maturity securities | ( | ) | ( | ) | ||||
Proceeds from sale of held-to-maturity securities | ||||||||
Other | ( | ) | ||||||
Net cash used in investing activities | ( | ) | ( | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Payments of short-term debt | ( | ) | ( | ) | ||||
Proceeds from issuance of short-term debt | ||||||||
Payments of structured accounts payable arrangements | ( | ) | ( | ) | ||||
Proceeds from structured accounts payable arrangements | ||||||||
Payments of long-term debt | ( | ) | ( | ) | ||||
Cash dividends paid | ( | ) | ( | ) | ||||
Other | ( | ) | ( | ) | ||||
Net cash provided by financing activities | ||||||||
Effect of exchange rate changes on cash | ( | ) | ||||||
Net change in cash, cash equivalents and restricted cash | ( | ) | ||||||
Cash, cash equivalents and restricted cash - December 31 | ||||||||
Cash, cash equivalents and restricted cash - March 31 | $ | $ | ||||||
Three months ended | |||||||
March 31, 2020 | March 31, 2019 | ||||||
Reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets to the unaudited condensed consolidated statements of cash flows: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash in other current assets | |||||||
Restricted cash in other assets | |||||||
Total cash, cash equivalents and restricted cash shown in the unaudited condensed consolidated statement of cash flows | $ | $ | |||||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash paid during the period for: | |||||||
Interest (net of amount capitalized of $7.5 and $6.0 for the three months ended March 31, 2020 and 2019, respectively) | $ | $ | |||||
Income taxes (net of refunds) | |||||||
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 December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Adoption of ASC Topic 842 | — | — | — | — | — | |||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | ( | ) | |||||||||||||||||||||
Vesting of restricted stock units | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Stock based compensation | — | — | — | — | — | |||||||||||||||||||||
Dividends | — | — | — | — | — | |||||||||||||||||||||
Dividends for noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Total comprehensive loss | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Vesting of restricted stock units | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Stock based compensation | — | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||
Dividends | — | — | — | — | — | |||||||||||||||||||||
Dividends for noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
• | Our Phosphates business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate-based animal feed ingredients, and processing plants in Louisiana which produce concentrated phosphate crop nutrients. As part of the Acquisition, we acquired an additional |
• | Our Potash business segment owns and operates potash mines and production facilities in Canada and the U.S. which produce potash-based crop nutrients, animal feed ingredients and industrial products. Potash sales include domestic and international sales. We are a member of Canpotex, Limited (“Canpotex”), an export association of Canadian potash producers through which we sell our Canadian potash outside the U.S. and Canada. |
• | Our Mosaic Fertilizantes business segment includes the assets in Brazil that we acquired in the Acquisition, which consist of five phosphate rock mines, four phosphate chemical plants and a potash mine. The segment also includes our legacy distribution business in South America, which consists of sales offices, crop nutrient blending and bagging facilities, port terminals and warehouses in Brazil and Paraguay. We also have a majority interest in Fospar S.A., which owns and operates a single superphosphate granulation plant and a deep-water crop nutrition port and throughput warehouse terminal facility in Brazil. |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
March 31, 2020 | December 31, 2019 | |||||||
Other current assets | ||||||||
Income and other taxes receivable | $ | $ | ||||||
Prepaid expenses | ||||||||
Other | ||||||||
$ | $ | |||||||
Other assets | ||||||||
Restricted cash | $ | $ | ||||||
MRO inventory | ||||||||
Marketable securities held in trust | ||||||||
Operating lease right-of-use assets | ||||||||
Indemnification asset | ||||||||
Long-term receivable | ||||||||
Other | ||||||||
$ | $ | |||||||
Accrued liabilities | ||||||||
Accrued dividends | $ | $ | ||||||
Payroll and employee benefits | ||||||||
Asset retirement obligations | ||||||||
Customer prepayments (a) | ||||||||
Accrued income tax | ||||||||
Operating lease obligation | ||||||||
Other | ||||||||
$ | $ | |||||||
Other noncurrent liabilities | ||||||||
Asset retirement obligations | $ | $ | ||||||
Operating lease obligation | ||||||||
Accrued pension and postretirement benefits | ||||||||
Unrecognized tax benefits | ||||||||
Other | ||||||||
$ | $ | |||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net (loss) earnings attributable to Mosaic | $ | ( | ) | $ | |||
Basic weighted average number of shares outstanding | |||||||
Dilutive impact of share-based awards | |||||||
Diluted weighted average number of shares outstanding | |||||||
Basic net (loss) earnings per share attributable to Mosaic | $ | ( | ) | $ | |||
Diluted net (loss) earnings per share attributable to Mosaic | $ | ( | ) | $ | |||
March 31, 2020 | December 31, 2019 | |||||||
Raw materials | $ | $ | ||||||
Work in process | ||||||||
Finished goods | ||||||||
Final price deferred(a) | ||||||||
Operating materials and supplies | ||||||||
$ | $ | |||||||
(a) |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
Potash | Mosaic Fertilizantes | Corporate, Eliminations and Other | Total | ||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | |||||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | |||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | |||||||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
March 31, 2020 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Level 1 | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||
Level 2 | |||||||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Municipal bonds | ( | ) | |||||||||||||
U.S. government bonds | |||||||||||||||
Total | $ | $ | $ | ( | ) | $ | |||||||||
December 31, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Level 1 | |||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||
Level 2 | |||||||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Municipal bonds | ( | ) | |||||||||||||
U.S. government bonds | ( | ) | |||||||||||||
Total | $ | $ | $ | ( | ) | $ | |||||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
March 31, 2020 | December 31, 2019 | ||||||||||||||
(in millions) | Fair Value | Gross Unrealized Losses(a) | Fair Value | Gross Unrealized Losses(a) | |||||||||||
Securities that have been in a continuous loss position for less than 12 months: | |||||||||||||||
Corporate debt securities | $ | $ | ( | ) | $ | $ | |||||||||
Municipal bonds | ( | ) | ( | ) | |||||||||||
U.S. government bonds | ( | ) | |||||||||||||
( | ) | ( | ) | ||||||||||||
Securities that have been in a continuous loss position for more than 12 months: | |||||||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Municipal bonds | ( | ) | ( | ) | |||||||||||
U.S. government bonds | |||||||||||||||
( | ) | ( | ) | ||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
March 31, 2020 | |||
Due in one year or less | $ | ||
Due after one year through five years | |||
Due after five years through ten years | |||
Due after ten years | |||
Total debt securities | $ | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
(in millions) | March 31, 2020 | December 31, 2019 | |||||
AROs, beginning of period | $ | $ | |||||
Liabilities incurred | |||||||
Liabilities settled | ( | ) | ( | ) | |||
Accretion expense | |||||||
Revisions in estimated cash flows | |||||||
Foreign currency translation | ( | ) | ( | ) | |||
AROs, end of period | |||||||
Less current portion | ( | ) | ( | ) | |||
Non-current portion of AROs | $ | $ | |||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
• | Modification of certain operating practices and undertaking certain capital improvement projects over a period of several years that are expected to result in capital expenditures likely to exceed $ |
• | Provision of additional financial assurance for the estimated Gypstack Closure Costs for Gypstacks at the covered facilities. The RCRA Trusts are discussed in Note 8 to our Condensed Consolidated Financial Statements. In addition, we have agreed to guarantee the difference between the amounts held in each RCRA Trust (including any earnings) and the estimated closure and long-term care costs. |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
(in millions of Units) | March 31, 2020 | December 31, 2019 | ||||||||
Derivative Instrument | Derivative Category | Unit of Measure | ||||||||
Foreign currency derivatives | Foreign currency | US Dollars | ||||||||
Interest rate derivatives | Interest rate | US Dollars | ||||||||
Natural gas derivatives | Commodity | MMbtu | ||||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
March 31, 2020 | December 31, 2019 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||
Accounts receivable | ||||||||||||||||
Accounts payable | ||||||||||||||||
Structured accounts payable arrangements | ||||||||||||||||
Short-term debt | ||||||||||||||||
Long-term debt, including current portion | ||||||||||||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
Foreign Currency Translation Gain (Loss) | Net Actuarial Gain and Prior Service Cost | Amortization of Gain on Interest Rate Swap | Net Gain (Loss) on Marketable Securities Held in Trust | Total | |||||||||||||||
Three Months Ended March 31, 2020 | |||||||||||||||||||
Balance as of December 31, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | |||||||||||||||
Tax expense | ( | ) | ( | ) | ( | ) | |||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||||||||
Other comprehensive loss attributable to noncontrolling interest | |||||||||||||||||||
Balance as of March 31, 2020 | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
Three Months Ended March 31, 2019 | |||||||||||||||||||
Balance as of December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
Other comprehensive income | |||||||||||||||||||
Tax expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Other comprehensive income (loss), net of tax | ( | ) | |||||||||||||||||
Other comprehensive loss attributable to noncontrolling interest | |||||||||||||||||||
Balance as of March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Transactions with non-consolidated companies included in net sales | $ | $ | |||||
Transactions with non-consolidated companies included in cost of goods sold | |||||||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
• | Approximately $ |
• | Approximately $ |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
• | Approximately $ |
• | Approximately $ |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
Phosphates | Potash | Mosaic Fertilizantes | Corporate, Eliminations and Other (a) | Total | |||||||||||||||
Three months ended March 31, 2020 | |||||||||||||||||||
Net sales to external customers | $ | $ | $ | $ | $ | ||||||||||||||
Intersegment net sales | ( | ) | |||||||||||||||||
Net sales | |||||||||||||||||||
Gross margin | ( | ) | ( | ) | |||||||||||||||
Canadian resource taxes | |||||||||||||||||||
Gross margin (excluding Canadian resource taxes) | ( | ) | ( | ) | |||||||||||||||
Operating earnings (loss) | ( | ) | ( | ) | ( | ) | |||||||||||||
Capital expenditures | |||||||||||||||||||
Depreciation, depletion and amortization expense | |||||||||||||||||||
Three months ended March 31, 2019 | |||||||||||||||||||
Net sales to external customers | $ | $ | $ | $ | $ | ||||||||||||||
Intersegment net sales | ( | ) | |||||||||||||||||
Net sales | ( | ) | |||||||||||||||||
Gross margin | |||||||||||||||||||
Canadian resource taxes | |||||||||||||||||||
Gross margin (excluding Canadian resource taxes) | |||||||||||||||||||
Operating earnings (loss) | ( | ) | |||||||||||||||||
Capital expenditures | |||||||||||||||||||
Depreciation, depletion and amortization expense | |||||||||||||||||||
Total Assets | |||||||||||||||||||
As of March 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||
As of December 31, 2019 | |||||||||||||||||||
(a) | The “Corporate, Eliminations and Other” category includes the results of our ancillary distribution operations in India and China. For the three months ended March 31, 2020, distribution operations in India and China had revenue of |
THE MOSAIC COMPANY | ||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) | ||
Three Months Ended March 31, | |||||||
(in millions) | 2020 | 2019 | |||||
Net sales(a): | |||||||
Brazil | $ | $ | |||||
Canpotex(b) | |||||||
Canada | |||||||
Australia | |||||||
China | |||||||
India | |||||||
Argentina | |||||||
Mexico | |||||||
Paraguay | |||||||
Colombia | |||||||
Japan | |||||||
Peru | |||||||
Honduras | |||||||
Thailand | |||||||
Other | |||||||
Total international countries | |||||||
United States | |||||||
Consolidated | $ | $ | |||||
(a) | Revenues are attributed to countries based on location of customer. |
(b) | Canpotex is the export association of the Saskatchewan potash producers. |
Three Months Ended March 31, | |||||||
(in millions) | 2020 | 2019 | |||||
Sales by product type: | |||||||
Phosphate Crop Nutrients | $ | $ | |||||
Potash Crop Nutrients | |||||||
Crop Nutrient Blends | |||||||
Specialty Products(a) | |||||||
Phosphate Rock | |||||||
Other(b) | |||||||
$ | $ | ||||||
(a) | Includes sales of MicroEssentials®, K-Mag, Aspire and animal feed ingredients. |
(b) | Includes sales of industrial potash, nitrogen and other products. |
Three months ended | ||||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
(in millions, except per share data) | 2020 | 2019 | Change | Percent | ||||||||||
Net sales | $ | 1,798.1 | $ | 1,899.7 | $ | (101.6 | ) | (5 | )% | |||||
Cost of goods sold | 1,756.7 | 1,590.2 | 166.5 | 10 | % | |||||||||
Gross margin | 41.4 | 309.5 | (268.1 | ) | (87 | )% | ||||||||
Gross margin percentage | 2 | % | 16 | % | ||||||||||
Selling, general and administrative expenses | 67.9 | 93.5 | (25.6 | ) | (27 | )% | ||||||||
Other operating expense | 39.7 | 13.9 | 25.8 | 186 | % | |||||||||
Operating (loss) earnings | (66.2 | ) | 202.1 | (268.3 | ) | NM | ||||||||
Interest expense, net | (41.1 | ) | (47.0 | ) | 5.9 | (13 | )% | |||||||
Foreign currency transaction (loss) gain | (214.2 | ) | 22.6 | (236.8 | ) | NM | ||||||||
Other income (expense) | 4.5 | (1.1 | ) | 5.6 | NM | |||||||||
(Loss) earnings from consolidated companies before income taxes | (317.0 | ) | 176.6 | (493.6 | ) | NM | ||||||||
(Benefit from) provision for income taxes | (133.0 | ) | 46.6 | (179.6 | ) | NM | ||||||||
(Loss) earnings from consolidated companies | (184.0 | ) | 130.0 | (314.0 | ) | NM | ||||||||
Equity in net (loss) of nonconsolidated companies | (20.0 | ) | (0.1 | ) | (19.9 | ) | NM | |||||||
Net (loss) earnings including noncontrolling interests | (204.0 | ) | 129.9 | (333.9 | ) | NM | ||||||||
Less: Net (loss) attributable to noncontrolling interests | (1.0 | ) | (0.9 | ) | (0.1 | ) | 11 | % | ||||||
Net (loss) earnings attributable to Mosaic | $ | (203.0 | ) | $ | 130.8 | $ | (333.8 | ) | NM | |||||
Diluted net (loss) earnings per share attributable to Mosaic | $ | (0.54 | ) | $ | 0.34 | $ | (0.88 | ) | NM | |||||
Diluted weighted average number of shares outstanding | 378.8 | 387.4 | ||||||||||||
• | Foreign currency transaction loss of $214 million, or $(0.38) per diluted share |
• | Unrealized loss on derivatives of $51 million, or $(0.09) per diluted share |
• | Depreciation expense of $22 million, or $(0.03) per diluted share, related to the acceleration of the closure of our K1 and K2 mine shafts at our Esterhazy, Saskatchewan mine as we ramp up K3 |
• | Other operating expenses of $16 million, or $(0.04) per diluted share, related to maintaining closed and indefinitely idled facilities |
• | Other operating expenses of $9 million, or $(0.02) per diluted share, related to an increase in reserves for legal contingencies of the Acquired Business (as defined below) |
• | Idle plant costs of $5 million, or $(0.01) per diluted share, related to the government-mandated shutdown on March 16, 2020, of our Miski Mayo phosphate rock mine in Peru due to the COVID-19 outbreak |
• | Discrete income tax benefit of $28 million, or $0.08 per diluted share |
• | Other non-operating income of $5 million, or $0.01 per diluted share, related to a realized gain on RCRA trust securities |
• | Other operating income of $11 million, or $0.03 per diluted share, related to the fair value adjustment for the estimated earn-out obligation to Vale, partially offset by other operating expenses of $8 million, or $(0.02) per diluted share, related to our acquisition (the “Acquisition”) of Vale Fertilizantes S.A. (now known as Mosaic Fertilizantes P&K S.A. or the “Acquired Business”) |
• | We have experienced limited adverse financial and operational COVID-19 related impacts to our operating facilities, employees, supply chain and logistics in the first quarter of 2020 as agriculture, including fertilizer |
• | The Company is exercising balance sheet discipline through the current period of economic uncertainty by taking actions that increased cash on hand to over $1 billion. We are also diligently managing working capital requirements and capital expenditures, which are approximately $50 million lower than the same period in the prior year. |
• | We continue to execute well and drive toward our 2021 operational targets. Mosaic Fertilizantes is on track to achieve the $50 million in transformational savings targeted for 2020. The Esterhazy K3 mine development project continues to progress, with the third automated miner placed into service in the first quarter of 2020. |
Three months ended | ||||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
(in millions, except price per tonne or unit) | 2020 | 2019 | Change | Percent | ||||||||||
Net sales: | ||||||||||||||
North America | $ | 381.7 | $ | 398.2 | $ | (16.5 | ) | (4 | )% | |||||
International | 237.7 | 407.8 | (170.1 | ) | (42 | )% | ||||||||
Total | 619.4 | 806.0 | (186.6 | ) | (23 | )% | ||||||||
Cost of goods sold | 702.3 | 751.2 | (48.9 | ) | (7 | )% | ||||||||
Gross margin | $ | (82.9 | ) | $ | 54.8 | $ | (137.7 | ) | NM | |||||
Gross margin as a percentage of net sales | (13 | )% | 7 | % | ||||||||||
Sales volumes(a) (in thousands of metric tonnes) | ||||||||||||||
DAP/MAP | 1,332 | 1,141 | 191 | 17 | % | |||||||||
Specialty(b) | 587 | 649 | (62 | ) | (10 | )% | ||||||||
Total finished product tonnes | 1,919 | 1,790 | 129 | 7 | % | |||||||||
Rock | 169 | 192 | (23 | ) | (12 | )% | ||||||||
Total Phosphates Segment Tonnes(a) | 2,088 | 1,982 | 106 | 5 | % | |||||||||
Realized prices ($/tonne) | ||||||||||||||
Average finished product selling price (destination)(a) | $ | 317 | $ | 442 | $ | (125 | ) | (28 | )% | |||||
DAP selling price (fob plant)(a) | $ | 274 | $ | 373 | $ | (99 | ) | (27 | )% | |||||
Average rock selling price (destination)(a) | $ | 69 | $ | 74 | $ | (5 | ) | (7 | )% | |||||
Average cost per unit consumed in cost of goods sold: | ||||||||||||||
Ammonia (metric tonne) | $ | 309 | $ | 352 | $ | (43 | ) | (12 | )% | |||||
Sulfur (long ton) | $ | 78 | $ | 153 | $ | (75 | ) | (49 | )% | |||||
Blended rock (metric tonne) | $ | 62 | $ | 61 | $ | 1 | 2 | % | ||||||
Production volume (in thousands of metric tonnes) - North America | 1,861 | 1,992 | (131 | ) | (7 | )% | ||||||||
Three months ended | ||||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
(in millions, except price per tonne or unit) | 2020 | 2019 | Change | Percent | ||||||||||
Net sales: | ||||||||||||||
North America | $ | 282.5 | $ | 235.2 | $ | 47.3 | 20 | % | ||||||
International | 159.1 | 268.3 | (109.2 | ) | (41 | )% | ||||||||
Total | 441.6 | 503.5 | (61.9 | ) | (12 | )% | ||||||||
Cost of goods sold | 332.5 | 318.1 | 14.4 | 5 | % | |||||||||
Gross margin | $ | 109.1 | $ | 185.4 | $ | (76.3 | ) | (41 | )% | |||||
Gross margin as a percentage of net sales | 25 | % | 37 | % | ||||||||||
Sales volume(a) (in thousands of metric tonnes) | ||||||||||||||
MOP | 1,709 | 1,729 | (20 | ) | (1 | )% | ||||||||
Specialty(b) | 190 | 132 | 58 | 44 | % | |||||||||
Total Potash Segment Tonnes | 1,899 | 1,861 | 38 | 2 | % | |||||||||
Realized prices ($/tonne) | ||||||||||||||
Average finished product selling price (destination) | $ | 233 | $ | 271 | $ | (38 | ) | (14 | )% | |||||
MOP selling price (fob mine) | $ | 200 | $ | 243 | $ | (43 | ) | (18 | )% | |||||
Production volume (in thousands of metric tonnes) | 2,068 | 2,254 | (186 | ) | (8 | )% | ||||||||
Three months ended | ||||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
(in millions, except price per tonne or unit) | 2020 | 2019 | Change | Percent | ||||||||||
Net Sales | $ | 731.1 | $ | 698.0 | $ | 33.1 | 5 | % | ||||||
Cost of goods sold | 664.6 | 645.6 | 19.0 | 3 | % | |||||||||
Gross margin | $ | 66.5 | $ | 52.4 | $ | 14.1 | 27 | % | ||||||
Gross margin as a percent of net sales | 9 | % | 8 | % | ||||||||||
Sales volume (in thousands of metric tonnes) | ||||||||||||||
Phosphate produced in Brazil | 699 | 412 | 287 | 70 | % | |||||||||
Potash produced in Brazil | 75 | 72 | 3 | 4 | % | |||||||||
Purchased nutrients for distribution | 1,303 | 1,044 | 259 | 25 | % | |||||||||
Total Mosaic Fertilizantes Segment Tonnes | 2,077 | 1,528 | 549 | 36 | % | |||||||||
Realized prices ($/tonne) | ||||||||||||||
Average finished product selling price (destination) | $ | 352 | $ | 457 | $ | (105 | ) | (23 | )% | |||||
Brazil MAP price (delivered price to third party) | $ | 330 | $ | 483 | $ | (153 | ) | (32 | )% | |||||
Purchases ('000 tonnes) | ||||||||||||||
DAP/MAP from Mosaic | 154 | 162 | (8 | ) | (5 | )% | ||||||||
MicroEssentials® from Mosaic | 117 | 202 | (85 | ) | (42 | )% | ||||||||
Potash from Mosaic/Canpotex | 293 | 452 | (159 | ) | (35 | )% | ||||||||
Average cost per unit consumed in cost of goods sold: | ||||||||||||||
Ammonia (metric tonne) | $ | 352 | $ | 410 | $ | (58 | ) | (14 | )% | |||||
Sulfur (long ton) | $ | 117 | $ | 213 | $ | (96 | ) | (45 | )% | |||||
Blended rock (metric tonne) | $ | 75 | $ | 102 | $ | (27 | ) | (26 | )% | |||||
Production volume (in thousands of metric tonnes) | 954 | 889 | 65 | 7 | % | |||||||||
Three months ended | ||||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
(in millions) | 2020 | 2019 | Change | Percent | ||||||||||
Selling, general and administrative expenses | $ | 67.9 | $ | 93.5 | $ | (25.6 | ) | (27 | )% | |||||
Other operating expense | 39.7 | 13.9 | 25.8 | 186 | % | |||||||||
Interest expense | (50.8 | ) | (54.9 | ) | 4.1 | (7 | )% | |||||||
Interest income | 9.7 | 7.9 | 1.8 | 23 | % | |||||||||
Interest expense, net | (41.1 | ) | (47.0 | ) | 5.9 | (13 | )% | |||||||
Foreign currency transaction (loss) gain | (214.2 | ) | 22.6 | (236.8 | ) | NM | ||||||||
Other income (expense) | 4.5 | (1.1 | ) | 5.6 | NM | |||||||||
(Benefit from) provision for income taxes | (133.0 | ) | 46.6 | (179.6 | ) | NM | ||||||||
Equity in net (loss) of nonconsolidated companies | (20.0 | ) | (0.1 | ) | (19.9 | ) | NM | |||||||
Three months ended | Effective Tax Rate | Provision for (Benefit from) Income Taxes | ||||||
March 31, 2020 | 42.0 | % | $ | (133.0 | ) | |||
March 31, 2019 | 26.4 | % | $ | 46.6 | ||||
(in millions) | Three months ended | |||||||||||||
March 31, 2020 | 2020-2019 | |||||||||||||
Cash Flow | 2020 | 2019 | Change | Percent | ||||||||||
Net cash provided by (used in) operating activities | $ | 189.9 | $ | (175.5 | ) | $ | 365.4 | NM | ||||||
Net cash used in investing activities | (269.7 | ) | (328.9 | ) | 59.2 | (18 | )% | |||||||
Net cash provided by financing activities | 698.3 | 22.3 | 676.0 | NM | ||||||||||
• | business and economic conditions and governmental policies affecting the agricultural industry where we or our customers operate, including price and demand volatility resulting from periodic imbalances of supply and demand; |
• | the impact of the recent outbreak of the novel coronavirus COVID-19 on the global economy and our business, suppliers, customers, employee and the communities in which we operate, as further described in Part II, Item 1A of this 10-Q Report; |
• | the sudden and severe drop in oil demand which could lead to a significant decline in production, and its impact on the availability and price of sulfur, a key raw material input for our phosphate segment operations; |
• | because of political and economic instability in Brazil or changes in government policy in Brazil, our operations could be disrupted as higher costs of doing business could result, including those associated with implementation of new freight tables and new mining legislation; |
• | changes in farmers’ application rates for crop nutrients; |
• | changes in the operation of world phosphate or potash markets, including continuing consolidation in the crop nutrient industry, particularly if we do not participate in the consolidation; |
• | the expansion or contraction of production capacity or selling efforts by competitors or new entrants in the industries in which we operate, including the effects of actions by members of Canpotex to prove the production capacity of potash expansion projects, through proving runs or otherwise; |
• | the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, political and economic instability in the region, and in general the future success of current plans for the MWSPC joint venture and any future changes in those plans; |
• | build-up of inventories in the distribution channels for our products that can adversely affect our sales volumes and selling prices; |
• | the effect of future product innovations or development of new technologies on demand for our products; |
• | seasonality in our business that results in the need to carry significant amounts of inventory and seasonal peaks in working capital requirements, and may result in excess inventory or product shortages; |
• | changes in the costs, or constraints on supplies, of raw materials or energy used in manufacturing our products, or in the costs or availability of transportation for our products; |
• | declines in our selling prices or significant increases in costs that can require us to write down our inventories to the lower of cost or market, or require us to impair goodwill or other long-lived assets, or establish a valuation allowance against deferred tax assets; |
• | the effects on our customers of holding high cost inventories of crop nutrients in periods of rapidly declining market prices for crop nutrients; |
• | the lag in realizing the benefit of falling market prices for the raw materials we use to produce our products that can occur while we consume raw materials that we purchased or committed to purchase in the past at higher prices; |
• | customer expectations about future trends in the selling prices and availability of our products and in farmer economics; |
• | disruptions to existing transportation or terminaling facilities, including those of Canpotex or any joint venture in which we participate; |
• | shortages or other unavailability of railcars, tugs, barges and ships for carrying our products and raw materials; |
• | the effects of and change in trade, monetary, environmental, tax and fiscal policies, laws and regulations; |
• | foreign exchange rates and fluctuations in those rates; |
• | tax regulations, currency exchange controls and other restrictions that may affect our ability to optimize the use of our liquidity; |
• | other risks associated with our international operations, including any potential and actual adverse effects related to the Miski Mayo mine; |
• | adverse weather conditions affecting our operations, including the impact of potential hurricanes, excessive heat, cold, snow, rainfall or drought; |
• | difficulties or delays in receiving, challenges to, increased costs of obtaining or satisfying conditions of, or revocation or withdrawal of required governmental and regulatory approvals, including permitting activities; |
• | changes in the environmental and other governmental regulation that applies to our operations, including federal legislation or regulatory action expanding the types and extent of water resources regulated under federal law and the possibility of further federal or state legislation or regulatory action affecting or related to greenhouse gas emissions, including carbon taxes or other measures that may be implemented in Canada or other jurisdictions in which we operate, or of restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise from disturbing the ground in the course of mining activities or possible efforts to reduce the flow of nutrients into the Gulf of Mexico, the Mississippi River basin or elsewhere; |
• | the potential costs and effects of implementation of federal or state water quality standards for the discharge of nitrogen and/or phosphorus into Florida waterways; |
• | the financial resources of our competitors, including state-owned and government-subsidized entities in other countries; |
• | the possibility of defaults by our customers on trade credit that we extend to them or on indebtedness that they incur to purchase our products and that we guarantee, particularly when we are exiting our business operations or locations that produced or sold the products to that customer; |
• | any significant reduction in customers’ liquidity or access to credit that they need to purchase our products; |
• | the effectiveness of the processes we put in place to manage our significant strategic priorities, including the expansion of our Potash business and our investment in MWSPC, and to successfully integrate and grow acquired businesses; |
• | actual costs of various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental obligations and Canadian resource taxes and royalties, or the costs of MWSPC, its existing or future funding and our commitments in support of such funding; |
• | the costs and effects of legal and administrative proceedings and regulatory matters affecting us, including environmental, tax or administrative proceedings, complaints that our operations are adversely impacting nearby farms, businesses, other property uses or properties, settlements thereof and actions taken by courts with respect to approvals of settlements, costs related to defending and resolving global audit, appeal or court activity, and other, and other further developments in legal proceedings and regulatory matters; |
• | the success of our efforts to attract and retain highly qualified and motivated employees; |
• | strikes, labor stoppages or slowdowns by our work force or increased costs resulting from unsuccessful labor contract negotiations, and the potential costs and effects of compliance with new regulations affecting our workforce, which increasingly focus on wages and hours, healthcare, retirement and other employee benefits; |
• | brine inflows at our Esterhazy, Saskatchewan potash mine, as well as potential inflows at our other shaft mines; |
• | accidents or other incidents involving our properties or operations, including potential fires, explosions, seismic events, sinkholes, unsuccessful tailings management, ineffective mine safety procedures, or releases of hazardous or volatile chemicals; |
• | terrorism or other malicious intentional acts, including cybersecurity risks such as attempts to gain unauthorized access to, or disable, our information technology systems, or our costs of addressing malicious intentional acts; |
• | other disruptions of operations at any of our key production and distribution facilities, particularly when they are operating at high operating rates; |
• | changes in antitrust and competition laws or their enforcement; |
• | 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; |
• | the adequacy of our property, business interruption and casualty insurance policies to cover potential hazards and risks incident to our business, and our willingness and ability to maintain current levels of insurance coverage as a result of market conditions, our loss experience and other factors; |
• | difficulties in realizing benefits under our long-term natural gas based pricing ammonia supply agreement with CF Industries, Inc., 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; and |
• | other risk factors reported from time to time in our Securities and Exchange Commission reports. |
(in millions US$) | As of March 31, 2020 | As of December 31, 2019 | |||||||||||||||||||||||||||||||||
Expected Maturity Date | Fair Value | Expected Maturity Date | Fair Value | ||||||||||||||||||||||||||||||||
Years ending December 31, | Years ending December 31, | ||||||||||||||||||||||||||||||||||
2020 | 2021 | 2022 | 2023 | 2020 | 2021 | 2022 | |||||||||||||||||||||||||||||
Foreign Currency Exchange Forwards | |||||||||||||||||||||||||||||||||||
Canadian Dollar | $ | (43.7 | ) | $ | 7.6 | ||||||||||||||||||||||||||||||
Notional (million US$) - short Canadian dollars | $ | 68.1 | $ | — | $ | — | $ | — | $ | 72.3 | $ | — | $ | — | |||||||||||||||||||||
Weighted Average Rate - Canadian dollar to U.S. dollar | 1.3214 | — | — | — | 1.3137 | — | — | ||||||||||||||||||||||||||||
Notional (million US$) - long Canadian dollars | $ | 400.8 | $ | 222.5 | $ | 113.2 | $ | 14.7 | $ | 585.2 | $ | 200.1 | $ | 90.6 | |||||||||||||||||||||
Weighted Average Rate - Canadian dollar to U.S. dollar | 1.3142 | 1.3121 | 1.3255 | 1.3569 | 1.3117 | 1.3093 | 1.3245 | ||||||||||||||||||||||||||||
Foreign Currency Exchange Collars | |||||||||||||||||||||||||||||||||||
Canadian Dollar | $ | (0.8 | ) | $ | 0.2 | ||||||||||||||||||||||||||||||
Notional (million US$) - long Canadian dollars | $ | — | $ | — | $ | — | $ | 30.4 | $ | — | $ | — | $ | 22.8 | |||||||||||||||||||||
Weighted Average Participation Rate - Canadian dollar to U.S. dollar | — | — | — | 1.3432 | — | — | 1.3483 | ||||||||||||||||||||||||||||
Weighted Average Protection Rate - Canadian dollar to U.S. dollar | — | — | — | 1.2874 | — | — | 1.2800 | ||||||||||||||||||||||||||||
Indian Rupee | $ | 0.1 | $ | 0.0 | |||||||||||||||||||||||||||||||
Notional (million US$) | $ | 5.0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Weighted Average Participation Rate - Indian rupee to U.S. dollar | 71.0000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Weighted Average Protection Rate - Indian rupee to U.S. dollar | 73.6000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Foreign Currency Exchange Non-Deliverable Forwards | |||||||||||||||||||||||||||||||||||
Brazilian Real | $ | (24.0 | ) | $ | (14.4 | ) | |||||||||||||||||||||||||||||
Notional (million US$) - short Brazilian real | $ | 387.0 | $ | — | $ | — | $ | — | $ | 464.4 | $ | — | $ | — | |||||||||||||||||||||
Weighted Average Rate - Brazilian real to U.S. dollar | 4.6874 | — | — | — | 4.1616 | — | — | ||||||||||||||||||||||||||||
Notional (million US$) - long Brazilian real | $ | 267.2 | $ | 47.0 | $ | — | $ | — | $ | 366.5 | $ | — | $ | — | |||||||||||||||||||||
Weighted Average Rate - Brazilian real to U.S. dollar | 4.1361 | 4.5701 | — | — | 4.0628 | — | — | ||||||||||||||||||||||||||||
Indian Rupee | $ | 1.3 | $ | (0.6 | ) | ||||||||||||||||||||||||||||||
Notional (million US$) - short Indian rupee | $ | 135.8 | $ | — | $ | — | $ | — | $ | 115.4 | $ | — | $ | — | |||||||||||||||||||||
Weighted Average Rate - Indian rupee to U.S. dollar | 75.6063 | — | — | — | 71.9895 | — | — | ||||||||||||||||||||||||||||
Total Fair Value | $ | (67.1 | ) | $ | (7.2 | ) | |||||||||||||||||||||||||||||
(in millions) | As of March 31, 2020 | As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||
Expected Maturity Date | Expected Maturity Date | ||||||||||||||||||||||||||||||||||||||
Years ending December 31, | Years ending December 31, | ||||||||||||||||||||||||||||||||||||||
2020 | 2021 | 2022 | 2023 | Fair Value | 2020 | 2021 | 2022 | 2023 | Fair Value | ||||||||||||||||||||||||||||||
Natural Gas Swaps | $ | (0.9 | ) | $ | (4.0 | ) | |||||||||||||||||||||||||||||||||
Notional (million MMBtu) - long | 15.2 | 18.5 | 4.9 | — | 20.6 | 18.5 | 4.9 | — | |||||||||||||||||||||||||||||||
Weighted Average Rate (US$/MMBtu) | $ | 1.73 | $ | 1.93 | $ | 1.74 | $ | — | $ | 1.92 | $ | 1.98 | $ | 1.83 | $ | — | |||||||||||||||||||||||
Total Fair Value | $ | (0.9 | ) | $ | (4.0 | ) | |||||||||||||||||||||||||||||||||
Exhibit Index | ||||||
Exhibit No | Description | Incorporated Herein by Reference to | Filed with Electronic Submission | |||
3.i | Amended and Restated Bylaws of Mosaic, effective March 5, 2020 | Exhibit 3.1 to Mosaic's Current Report on Form 8-K dated March 5, 2020 and filed on March 6, 2020(2) | ||||
10.iii.a. | X | |||||
10.iii.b. | X | |||||
10.iii.c. | X | |||||
10.iii.d. | X | |||||
31.1 | X | |||||
31.2 | X | |||||
32.1 | X | |||||
32.2 | X | |||||
95 | X | |||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||
THE MOSAIC COMPANY | |||
by: | /S/ CLINT C. FREELAND | ||
Clint C. Freeland | |||
Senior Vice President and Chief Financial Officer | |||
(on behalf of the registrant and as principal accounting officer) | |||
On Each of the Following Dates | Number of RSUs Vested | |
_________, ____ | ||
TSR Performance Factor | % of Performance Units Earned | |
100% (or higher) | 200% | |
90% | 189% | |
80% | 178% | |
70% | 167% | |
60% | 156% | |
50% | 144% | |
40% | 133% | |
30% | 122% | |
20% | 111% | |
10% | 100% | |
0% | 90% | |
‑10% | 80% | |
‑20% | 70% | |
‑30% | 60% | |
‑40% | 50% | |
‑50% (or lower) | 0% | |
• | a subsidiary, business, division, line of business; or other business unit of another person; or |
• | an interest or investment in a joint venture, or an interest reflected or that would, if acquired, be reflected under GAAP as an equity method investments in a nonconsolidated company (in each case including but not limited to an increase in the amount or percentage of ownership of the Company in the joint venture or equity method investment, and irrespective of whether the interest or investment is in the form of debt or equity). |
TSR Performance Factor | % of Performance Units Earned | |
100% (or higher) | 200% | |
90% | 189% | |
80% | 178% | |
70% | 167% | |
60% | 156% | |
50% | 144% | |
40% | 133% | |
30% | 122% | |
20% | 111% | |
10% | 100% | |
0% | 90% | |
-10% | 80% | |
-20% | 70% | |
-30% | 60% | |
-40% | 50% | |
-50% (or lower) | 0% | |
• | a subsidiary, business, division, line of business; or other business unit of another person; or |
• | an interest or investment in a joint venture, or an interest reflected or that would, if acquired, be reflected under GAAP as an equity method investments in a nonconsolidated company (in each case including but not limited to an increase in the amount or percentage of ownership of the Company in the joint venture or equity method investment, and irrespective of whether the interest or investment is in the form of debt or equity). |
(i) | a material breach of any of Employee’s obligations to the Company under the terms of this Agreement; |
(ii) | the gross neglect or willful failure or refusal of Employee to perform the duties of Employee’s position or such other duties reasonably assigned to Employee by the Company; |
(iii) | any act of personal dishonesty taken by Employee and intended to result in substantial personal enrichment of Employee at the expense of the Company; |
(iv) | any willful or intentional act that could reasonably be expected to injure the reputation, business, or business relationships of the Company or Employee’s reputation or business relationships; |
(v) | perpetration of an intentional and knowing fraud against or affecting the Company or any customer, supplier, client, agent, or employee thereof; |
(vi) | conviction (including conviction on a nolo contendere, no contest, or similar plea) of a felony or any crime involving fraud, dishonesty, or moral turpitude; or |
(vii) | material breach of the Company’s Code of Business Conduct and Ethics. |
(a) | Severance. |
[(i)] | Employee shall be eligible to receive an amount equal to one and one-half times Employee’s annual base salary in effect as of the date of termination. |
[(ii) | If Employee’s termination is a Qualified CIC Termination, Employee shall be eligible to receive an amount equal to an additional 1 times Employee’s annual base salary in effect as of the date of termination.] |
(b) | Additional Payout. |
[(i)] | Employee shall be eligible to receive a payout equal to one and one-half times Employee’s annual target bonus percent established for the bonus year prior to the bonus year in which Employee’s date of termination is effective (or such greater percent as shall be designated by the Compensation Committee of the Company’s Board of Directors from time to time) multiplied by Employee’s annual base salary in effect as of the date of termination. |
[(ii) | If Employee’s termination is a Qualified CIC Termination, Employee shall be eligible to receive an amount equal to an additional 1 times Employee’s annual target bonus percent for the prior bonus year (or such greater percent as shall be designated by the Compensation Committee of the Company’s Board of Directors from time to time) multiplied by Employee’s annual base salary in effect as of the date of termination.] |
1 | One/Chief Executive Officer; one-half/other participating executive officers; to be deleted for other participants unless otherwise authorized. |
(c) | If Employee is participating in any Company-provided life insurance or health flexible spending account programs, then Employee may elect to continue coverage under such programs (in accordance with the terms of those programs). In addition, if Employee is participating in any Company-provided group medical and/or dental plans subject to Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, or similar state law (“COBRA”), and Employee timely elects coverage and satisfies all enrollment and payment procedures, then the Company will reimburse Employee for a portion of the premium costs to continue coverage under its medical and/or dental plans equal to the portion the Company would pay for such coverage as if Employee were an active employee, from the date of termination until the earlier of (i) twelve (12) months following the date of termination or (ii) the date on which Employee is no longer eligible for COBRA; provided, however, that if the termination is a Qualified CIC Termination then instead of reimbursing Employee for the Company’s portion, the Company will pay Employee an amount equal to 18 months the premium costs to continue coverage under its medical and/or dental plans and its life insurance plans equal to the portion the Company would pay for such coverage as if Employee were an active employee. |
(d) | If Employee was employed by the Company for three months or more during the fiscal year in which the termination of employment is effective (or, in the case of a Qualified CIC Termination, one day or more during such fiscal year), the Company will pay to Employee a pro rata portion (based on the number of months of employment during such fiscal year, with employment on any day of a month being deemed a month of employment) of any annual bonus that would have been payable to Employee for such fiscal year based on actual performance under the Management Incentive Plan (or a successor to such plan) determined upon completion of the fiscal year as if Employee had been in the employ of the Company for the full fiscal year (no amount shall be payable if Employee was employed for less than three months or, in the case of a Qualified CIC Termination, less than one day during such fiscal year). |
(e) | The Company will pay Employee any unused earned vacation as of the date of Employee’s termination of employment, in accordance with the policies and practices of the Company in effect from time to time. |
(f) | The Company will offer Employee reasonable outplacement services commensurate with Employee’s position and experience for a period ending the earlier of (i) twelve (12) months following Employee’s termination of employment, or (ii) Employee finds new employment, up to a maximum of $25,000 (cash will not be paid in lieu of outplacement services); provided, however, that if the termination is a Qualified CIC Termination then instead of paying for reasonable outplacement services the Company will pay Employee $25,000. |
(g) | If Employee’s termination is a Qualified CIC Termination and Employee is covered under an executive life insurance plan and/or an executive disability plan, upon a Qualified CIC Termination the Company will pay Employee an amount equal to 18 months the premium costs to continue coverage under these executive life insurance and/or executive disability plan equal to the portion the Company would pay for such coverage as if Employee were an active employee. If Employee’s termination is a Qualified CIC Termination and Employee has not received reimbursement for an executive physical examination in the year of Employee’s termination, the Company will pay Employee $10,000. If Employee’s termination is a Qualified CIC Termination and |
(h) | The amount of any severance payable to Employee under Section 4 shall be reduced on a dollar-for-dollar basis by the amount of any other compensation or remuneration Employee receives from the Company for work performed as an employee, independent contractor, or consultant during the twelve (12) months following Employee’s termination of employment, and by any other compensation to which Employee may be entitled under any other severance plan or program of the Company. |
(i) | The Company shall pay the severance payment under Section 4(a)(i) on the date that is sixty (60) days after the date of Employee’s termination of employment. The Company shall pay the severance payment under Section 4(a)(ii) on the date that is six (6) months after the date of Employee’s termination of employment. The Company shall pay the bonuses under Section 4(b) and Section 4(d) during the calendar year after the end of the fiscal year to which the bonuses relate at the same time as other salaried employees are paid their bonuses. The Company shall reimburse premiums as provided under Section 4(c) and pay reasonable outplacement costs as provided under Section 4(f) beginning as of the date of Employee’s termination of employment; provided, however, that if Employee’s termination is a Qualified CIC Termination the amounts will be paid on the date that is six (6) months after the date of Employee’s termination of employment. The Company shall pay the Employee the accrued vacation under Section 4(e) within 60 days following termination of employment. If Employee’s termination is a Qualified CIC Termination, the Company shall pay the amounts under Section 4(g) on the date that is six (6) months after the date of Employee’s termination of employment. Notwithstanding the foregoing, the Company is not required to make any payments due on or after the date that is sixty (60) days after the date of Employee’s termination of employment unless by that date Employee has signed, provided to the Company, and not rescinded a General Release of Claims in favor of the Company attached as Exhibit A (and the rescission period has expired). In addition, each payment by the Company made on and after the date of Employee’s termination of employment is conditioned upon (i) Employee cooperating with the transition of Employee’s duties and responsibilities for the Company, and (ii) Employee continuing to abide by all of Employee’s obligations to the Company, including without limitation the non-disclosure, non-competition, and non-solicitation covenants contained in Section 8 of this Agreement. |
(j) | Notwithstanding anything in this Agreement to the contrary, if Employee is a specified employee (as defined under Section 409A of the Code) at the time of Employee’s |
(k) | Any amounts payable hereunder will be subject to required withholdings, deductions, and tax reporting requirements. |
(l) | Notwithstanding any other provision of this Agreement, if the payments under this Agreement, or under any other agreement with, or plan of, the Company or its affiliates (“Total Payments”), would constitute an “excess parachute payment” that is subject to the tax (“Excise Tax”) imposed by Section 4999 of Code, then the Company will determine whether Employee’s best net benefit when taking into account the effect of the Excise Tax (“Best Net Benefit”) is (i) to receive the payments provided for under this Agreement, or (ii) to have payments under this Agreement reduced and forfeited to reduce or avoid the Excise Tax. If the Best Net Benefit is achieved by reducing payments, the reduction shall be made by first reducing and forfeiting payments under this Section 4 not subject to Section 409A of the Code and, if additional reductions are necessary to achieve the Best Net Benefit, then reducing and forfeiting payments under this Section 4 subject to Section 409A. In no event shall payments subject to Section 409A of the Code be forfeited before all payments not subject to Section 409A of the Code have been forfeited. Payments shall be forfeited in the following sequence, provided that if a payment subject to Section 409A of the Code comes before a payment not subject to it, the payment subject to Section 409A shall be moved and placed at the end of the list: first under Section 4(g), second under Section 4(f), third under Section 4(c), fourth under Section 4(a), fifth under Section 4(e), sixth under Section 4(b), and seventh under Section 4(d). |
(a) | a material diminution in authority, duties, or responsibilities; |
(b) | a material change in geographic location where services are provided (the Company has determined this is any requirement by the Company that Employee move his regular office to a location more than 50 miles from Employee’s Company office as of the Agreement Date); or |
(c) | a material diminution in base salary. |
(i) | for whose election proxies shall have been solicited by the Board of Directors of the Company or |
(ii) | who are then serving as directors appointed by the Board of Directors to fill vacancies on the Board of Directors caused by death or resignation (but not by removal) or to fill newly-created directorships, |
(b) | 50% or more of the voting power of the outstanding shares of all classes and series of capital stock of the Company entitled to vote in the general election of directors of the Company, voting together as a single class (the “Voting Stock”) of the Company is acquired or beneficially owned by any person, entity or group (within the meaning of Section 13d(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) other than (i) an entity in connection with a Business Combination in which clauses (x) and (y) of subparagraph (c) apply or (ii) a licensed broker/dealer or licensed underwriter who purchases shares of Voting Stock pursuant to an underwritten public offering solely for the purpose of resale to the public, |
(c) | the consummation of a merger or consolidation of the Company with or into another entity, a sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets or a similar business combination (each, a “Business Combination”), in each case unless, immediately following such Business Combination, (x) all or substantially all of the beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the voting power of the then outstanding shares of voting stock (or comparable voting equity interests) of the surviving or acquiring entity resulting |
(d) | approval by the shareholders of a definitive agreement or plan to liquidate or dissolve the Company. |
(a) | The Company may withhold from any amounts payable under this Agreement such federal, state and local income and employment taxes as the Company shall determine is required to be withheld pursuant to any applicable law or regulation. |
(b) | This Agreement is intended to satisfy the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions. To the extent that any provision of this Agreement fails to satisfy those requirements, the provision shall automatically be modified in a manner that, in the good-faith opinion of the Company, brings the provision into compliance with those requirements while preserving as closely as possible the original intent of the provision and this Agreement. In particular, and without limiting the preceding sentence, any payment under this Agreement that would otherwise be treated as deferred compensation under Section 409A of the Code shall be delayed until the first day of the seventh month after the date of “separation from service” as determined under said Section 409A, such as is provided in Section 4(a) and 4(b) above. |
[Employee] | ||||
THE MOSAIC COMPANY | ||||
By: | ||||
Its: | ||||
Dated: | ||||
[Employee] | ||||
This instrument was acknowledged before me this ___ day of ___________, _________. | ||||
Notary Public | ||||
THE MOSAIC COMPANY | ||||
By: __________________________ | ||||
Title: __________________________ | ||||
1. | I have reviewed this quarterly report on Form 10-Q of The Mosaic Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |
May 5, 2020 |
/s/ James "Joc" C. O'Rourke |
James "Joc" C. O'Rourke |
Chief Executive Officer and President |
The Mosaic Company |
1. | I have reviewed this quarterly report on Form 10-Q of The Mosaic Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |
May 5, 2020 |
/s/ Clint C. Freeland |
Clint C. Freeland |
Senior Vice President and Chief Financial Officer |
The Mosaic Company |
May 5, 2020 |
/s/ James "Joc" C. O'Rourke |
James "Joc" C. O'Rourke |
Chief Executive Officer and President |
The Mosaic Company |
May 5, 2020 |
/s/ Clint C. Freeland |
Clint C. Freeland |
Senior Vice President and Chief Financial Officer |
The Mosaic Company |
Potash Mine | Florida Phosphate Rock Mines | |||||||||||||||||||||
Three Months Ended March 31, 2020 | Carlsbad, New Mexico | Four Corners | South Fort Meade | Wingate | South Pasture | |||||||||||||||||
Section 104 citations for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard (#) | 2 | 4 | — | 1 | — | |||||||||||||||||
Section 104(b) orders (#) | — | — | — | — | — | |||||||||||||||||
Section 104(d) citations and orders (#) | — | — | — | — | — | |||||||||||||||||
Section 110(b)(2) violations (#) | — | — | — | — | — | |||||||||||||||||
Section 107(a) orders (#) | — | — | — | — | — | |||||||||||||||||
Proposed assessments under MSHA (whole dollars) | $ | 0 | $ | 7,226 | $ | — | $ | 581 | $ | 20,483 | ||||||||||||
Mining-related fatalities (#) | — | — | — | — | — | |||||||||||||||||
Section 104(e) notice | No | No | No | No | No | |||||||||||||||||
Notice of the potential for a pattern of violations under Section 104(e) | No | No | No | No | No | |||||||||||||||||
Legal actions before the Federal Mine Safety and Health Review Commission (“FMSHRC”) initiated (#) | — | — | — | — | 1 | |||||||||||||||||
Legal actions before the FMSHRC resolved (#) | — | — | — | — | — | |||||||||||||||||
Legal actions pending before the FMSHRC, end of period: | ||||||||||||||||||||||
Contests of citations and orders referenced in Subpart B of 29 CFR Part 2700 (#) | — | — | — | — | 1 | |||||||||||||||||
Contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700 (#) | — | — | — | — | — | |||||||||||||||||
Complaints for compensation referenced in Subpart D of 29 CFR Part 2700 (#) | — | — | — | — | — | |||||||||||||||||
Complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR Part 2700 (#) | — | — | — | — | — | |||||||||||||||||
Applications for temporary relief referenced in Subpart F of 29 CFR Part 2700 (#) | — | — | — | — | — | |||||||||||||||||
Appeals of judges’ decisions or orders referenced in Subpart H of 29 CFR Part 2700 (#) | — | — | — | — | — | |||||||||||||||||
Total pending legal actions (#) | — | — | — | — | 1 | |||||||||||||||||
Goodwill (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2020
USD ($)
| |
| Goodwill [Line Items] | |
| Goodwill, Gross | $ 1,100.0 |
| Goodwill, net of accumulated amortization | 1,156.9 |
| Foreign currency translation | (79.9) |
| Goodwill, net of accumulated amortization | 1,077.0 |
| Potash segment | |
| Goodwill [Line Items] | |
| Goodwill, net of accumulated amortization | 1,039.8 |
| Foreign currency translation | (72.6) |
| Goodwill, net of accumulated amortization | $ 967.2 |
| Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 14.20% |
| Mosaic Fertilizantes segment | |
| Goodwill [Line Items] | |
| Goodwill, net of accumulated amortization | $ 105.0 |
| Foreign currency translation | (7.3) |
| Goodwill, net of accumulated amortization | 97.7 |
| Corporate, other and intersegment eliminations | |
| Goodwill [Line Items] | |
| Goodwill, net of accumulated amortization | 12.1 |
| Foreign currency translation | 0.0 |
| Goodwill, net of accumulated amortization | $ 12.1 |
Financing Arrangements Short Term Debt (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2020 |
Jan. 07, 2020 |
Dec. 31, 2019 |
|
| Short-term Debt [Line Items] | |||
| Structured accounts payable arrangements | $ 502.0 | $ 740.6 | |
| Structured Accounts Payable | |||
| Short-term Debt [Line Items] | |||
| Structured accounts payable arrangements | $ 740.6 | ||
| Inventory Financing Arrangements [Member] | |||
| Short-term Debt [Line Items] | |||
| Inventory Financing Arrangement, Maximum Amount | $ 400.0 | ||
| Proceeds From Inventory Financing Arrangements | $ 350.3 | ||
| Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.11% | ||
| Receivable Purchasing Agreement [Domain] | |||
| Short-term Debt [Line Items] | |||
| Structured accounts payable arrangements | $ 101.5 | ||
| Maximum amount of receivables sold, face value | $ 150.0 | ||
| Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.47% | ||
| Maximum | Inventory Financing Arrangements [Member] | |||
| Short-term Debt [Line Items] | |||
| Maximum inventory financing term | 180 days |
Business Segments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Segments | Business Segments The reportable segments are determined by management based upon factors such as products and services, production processes, technologies, market dynamics, and for which segment financial information is available for our chief operating decision maker. We evaluate performance based on the operating earnings of the respective business segments, which includes certain allocations of corporate selling, general and administrative expenses. The segment results may not represent the actual results that would be expected if they were independent, stand-alone businesses. Intersegment eliminations, including profit on intersegment sales, mark-to-market gains/losses on derivatives, debt expenses, Streamsong Resort® results of operations and the results of the China and India distribution businesses are included within Corporate, Eliminations and Other. For a description of our business segments, see Note 1 to the Condensed Consolidated Financial Statements. Segment information for the three months ended March 31, 2020 and 2019 was as follows:
$76.5 million and gross margin of $2.0 million. For the three months ended March 31, 2019, distribution operations in India and China had revenue of $93.2 million and gross margin of $9.0 million. Financial information relating to our operations by geographic area is as follows:
______________________________
Net sales by product type are as follows:
(b) Includes sales of industrial potash, nitrogen and other products.
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Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Fair Value Measurements Following is a summary of the valuation techniques for assets and liabilities recorded in our Condensed Consolidated Balance Sheets at fair value on a recurring basis: Foreign Currency Derivatives - The foreign currency derivative instruments that we currently use are forward contracts and zero-cost collars, which typically expire within eighteen months. Most of the valuations are adjusted by a forward yield curve or interest rates. In such cases, these derivative contracts are classified within Level 2. Some valuations are based on exchange-quoted prices, which are classified as Level 1. Changes in the fair market values of these contracts are recognized in the Condensed Consolidated Financial Statements as a component of cost of goods sold in our Corporate, Eliminations and Other segment, or foreign currency transaction (gain) loss. As of March 31, 2020 and December 31, 2019, the gross asset position of our foreign currency derivative instruments was $46.8 million and $15.6 million, respectively, and the gross liability position of our foreign currency derivative instruments was $113.1 million and $22.9 million, respectively. Commodity Derivatives - The commodity contracts primarily relate to natural gas. The commodity derivative instruments that we currently use are forward purchase contracts, swaps, and three-way collars. The natural gas contracts settle using NYMEX futures or AECO price indexes, which represent fair value at any given time. The contracts’ maturities and settlements are scheduled for future months and settlements are scheduled to coincide with anticipated gas purchases during those future periods. Quoted market prices from NYMEX and AECO are used to determine the fair value of these instruments. These market prices are adjusted by a forward yield curve and are classified within Level 2. Changes in the fair market values of these contracts are recognized in the Condensed Consolidated Financial Statements as a component of cost of goods sold in our Corporate, Eliminations and Other segment. As of March 31, 2020 and December 31, 2019, the gross asset position of our commodity derivative instruments was $4.8 million and $2.9 million, respectively, and the gross liability position of our commodity instruments was $5.0 million and $6.2 million, respectively. Interest Rate Derivatives - We manage interest expense through interest rate contracts to convert a portion of our fixed-rate debt into floating-rate debt. We also enter into interest rate swap agreements to hedge our exposure to changes in future interest rates related to anticipated debt issuances. Valuations are based on external pricing sources and are classified as Level 2. Changes in the fair market values of these contracts are recognized in the Condensed Consolidated Financial Statements as a component of interest expense. As of March 31, 2020 and December 31, 2019, the gross asset position of our interest rate swap instruments was $36.6 million and $11.4 million, respectively, and the gross liability position of our interest rate swap instruments was zero as of March 31, 2020 and December 31, 2019. Financial Instruments The carrying amounts and estimated fair values of our financial instruments are as follows:
For cash and cash equivalents, accounts receivables, accounts payable, structured accounts payable arrangements, and short-term debt, the carrying amount approximates fair value because of the short-term maturity of those instruments. The fair value of long-term debt, including the current portion, is estimated using quoted market prices for the publicly registered notes and debentures, classified as Level 1 and Level 2, respectively, within the fair value hierarchy, depending on the market liquidity of the debt.
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Financing Arrangements Financing Arrangements |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Financing Arrangements [Abstract] | |
| Schedule of Debt [Table Text Block] | 9. Financing Arrangements Structured Accounts Payable Arrangements In Brazil, we finance some of our potash-based fertilizer, sulfur, ammonia and other raw material product purchases through third-party financing arrangements. These arrangements provide that the third-party intermediary advance the amount of the scheduled payment to the vendor, less an appropriate discount, at a scheduled payment date and Mosaic makes payment to the third-party intermediary at a later date, stipulated in accordance with the commercial terms negotiated. As of March 31, 2020 and December 31, 2019, the total structured accounts payable arrangements were $502.0 million and $740.6 million, respectively. Inventory Financing Arrangement On January 7, 2020, we entered into an inventory financing arrangement with a bank to sell up to $400 million of certain commodities inventory for cash and subsequently repurchase the inventory at an agreed upon price and time in the future, not to exceed 180 days. Under the terms of the agreement, we may borrow up to 90% of the value of the inventory. It is later repurchased by Mosaic at the original sale price plus interest and any transaction costs. As of March 31, 2020, we had sold $350.3 million of inventory under this arrangement, which is included in short-term debt on the Condensed Consolidated Balance Sheet. The inventory remains on our Condensed Consolidated Balance Sheet as it serves as collateral for the debt. Interest accrues on the debt through the repurchase date, and is included in accrued liabilities. The weighted average interest rate of the repurchase obligation as of March 31, 2020 was 2.11%. Receivable Purchasing Arrangement On March 4, 2020, we entered into a Receivable Purchasing Agreement ("RPA"), with a bank whereby, from time-to-time, we sell certain receivables. The net face value of the purchased receivables may not exceed $150 million at any point in time. The purchase price of the receivable sold under the RPA is the face value of the receivable less a discount of 70 basis points over a designated reference rate (LIBOR or Canadian Dollar Offered Rate). We record the purchase price as short-term debt, and recognize interest expense by accreting the liability through the due date of the underlying receivables. As of March 31, 2020, we had non-recourse short-term debt of $101.5 million related to the RPA. Following the sale to the bank, we continue to service the collection of the receivables on behalf of the bank without further consideration. The weighted average interest rate of the RPA related debt as of March 31, 2020 was 1.47%.
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Earnings Per Share |
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share The numerator for basic and diluted earnings per share (“EPS”) is net earnings attributable to Mosaic. The denominator for basic EPS is the weighted average number of shares outstanding during the period. The denominator for diluted EPS also includes the weighted average number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued, unless the shares are anti-dilutive. The following is a reconciliation of the numerator and denominator for the basic and diluted EPS computations:
A total of 2.5 million and 1.6 million shares of common stock subject to issuance related to share-based awards for the three months ended March 31, 2020 and March 31, 2019, respectively, have been excluded from the calculation of diluted EPS because the effect would have been anti-dilutive.
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Organization and Nature of Business |
3 Months Ended | ||||||||||||
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Mar. 31, 2020 | |||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
| Organization and Nature of Business | Organization and Nature of Business The Mosaic Company (“Mosaic,” and, with its consolidated subsidiaries, “we,” “us,” “our,” or the “Company”) produces and markets concentrated phosphate and potash crop nutrients. We conduct our business through wholly and majority owned subsidiaries and businesses in which we own less than a majority or a noncontrolling interest, including consolidated variable interest entities and investments accounted for by the equity method. On January 8, 2018, we completed our acquisition (the “Acquisition”) of Vale Fertilizantes S.A. (now known as Mosaic Fertilizantes P&K S.A. or the “Acquired Business”). Upon completion of the Acquisition, we became the leading fertilizer producer and distributor in Brazil. We are organized into the following business segments:
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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Accumulated depreciation | $ 7,527.0 | $ 7,292.0 |
| Common stock, par value | $ 0.01 | $ 0.01 |
| Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
| Common stock, issued | 389,643,771 | 389,646,939 |
| Common stock, outstanding | 380,045,964 | 378,764,442 |
| Preferred stock, par value | $ 0.01 | $ 0.01 |
| Preferred stock, authorized | 15,000,000 | 15,000,000 |
| Preferred stock, issued | 0 | 0 |
| Preferred stock, outstanding | 0 | 0 |
Schedule of Change in Asset Retirement Obligations (Tables) |
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| Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Change in Asset Retirement Obligation [Table Text Block] | A reconciliation of our AROs is as follows:
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Related Party Transactions (Tables) |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of related party transactions | The Condensed Consolidated Statements of Earnings included the following transactions with our non-consolidated companies:
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Condensed Consolidated Statements of Shareholders Equity (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
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| Statement of Stockholders' Equity [Abstract] | ||
| Dividends per share | $ 0.10 | $ 0.10 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
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| Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
| Gross asset position | $ 88.2 | $ 29.9 |
| Gross liability position | $ 118.1 | 29.1 |
| Fair Value, Recurring [Member] | Foreign Exchange Contract | ||
| Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
| Average maturity of foreign currency derivative instruments | 18 months | |
| Gross asset position | $ 46.8 | 15.6 |
| Gross liability position | 113.1 | 22.9 |
| Fair Value, Recurring [Member] | Commodity Contract | ||
| Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
| Gross asset position | 4.8 | 2.9 |
| Gross liability position | 5.0 | 6.2 |
| Fair Value, Recurring [Member] | Interest Rate Swap | ||
| Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||
| Gross asset position | 36.6 | $ 11.4 |
| Gross liability position | $ 0.0 |
Inventories |
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| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Inventories Inventories consist of the following:
______________________________ (a) Final price deferred is product that has shipped to customers, but the price has not yet been agreed upon.
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Summary of Significant Accounting Policies |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Statement Presentation and Basis of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements of Mosaic have been prepared on the accrual basis of accounting and in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim financial reporting. As permitted under these rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The Condensed Consolidated Financial Statements included in this document reflect, in the opinion of our management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. The following notes should be read in conjunction with the accounting policies and other disclosures in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 (the “10-K Report”). Sales, expenses, cash flows, assets and liabilities can and do vary during the year as a result of seasonality and other factors. Therefore, interim results are not necessarily indicative of the results to be expected for the full fiscal year. The accompanying Condensed Consolidated Financial Statements include the accounts of Mosaic, its majority owned subsidiaries, and certain variable interest entities in which Mosaic is the primary beneficiary. Certain investments in companies where we do not have control but have the ability to exercise significant influence are accounted for by the equity method. Accounting Estimates Preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. The most significant estimates made by management relate to the estimates of fair value of acquired assets and liabilities, the recoverability of non-current assets including goodwill, the useful lives and net realizable values of long-lived assets, environmental and reclamation liabilities including asset retirement obligations (“ARO”), and income tax-related accounts, including the valuation allowance against deferred income tax assets. Actual results could differ from these estimates.
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Asset Retirement Obligations |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset Retirement Obligation Disclosure | Asset Retirement Obligations We recognize our estimated AROs in the period in which we have an existing legal obligation associated with the retirement of a tangible long-lived asset, and the amount of the liability can be reasonably estimated. The ARO is recognized at fair value when the liability is incurred with a corresponding increase in the carrying amount of the related long-lived asset. We depreciate the tangible asset over its estimated useful life. The liability is adjusted in subsequent periods through accretion expense, which represents the increase in the present value of the liability due to the passage of time. Such depreciation and accretion expenses are included in cost of goods sold for operating facilities and other operating expense for indefinitely closed facilities. Our legal obligations related to asset retirement require us to: (i) reclaim lands disturbed by mining as a condition to receive permits to mine phosphate ore reserves; (ii) treat low pH process water in Gypstacks to neutralize acidity; (iii) close and monitor Gypstacks at our Florida and Louisiana facilities at the end of their useful lives; (iv) remediate certain other conditional obligations; (v) remove all surface structures and equipment, plug and abandon mine shafts, contour and revegetate, as necessary, and monitor for five years after closing our Carlsbad, New Mexico facility; (vi) decommission facilities, manage tailings and execute site reclamation at our Saskatchewan potash mines at the end of their useful lives; (vii) de-commission mines in Brazil and Peru acquired as part of the Acquisition and (viii) decommission plant sites and close Gypstacks in Brazil also as part of the Acquisition. The estimated liability for these legal obligations is based on the estimated cost to satisfy the above obligations, which is discounted using a credit-adjusted risk-free rate. A reconciliation of our AROs is as follows:
North America Gypstack Closure Costs A majority of our ARO relates to Gypstack Closure Costs in Florida and Louisiana. For financial reporting purposes, we recognize our estimated Gypstack Closure Costs at their present value. This present value determined for financial reporting purposes is reflected on our Consolidated Balance Sheets in accrued liabilities and other noncurrent liabilities. As discussed below, we have arrangements to provide financial assurance for the estimated Gypstack Closure Costs associated with our facilities in Florida and Louisiana. EPA RCRA Initiative. On September 30, 2015, we and our subsidiary, Mosaic Fertilizer, LLC (“Mosaic Fertilizer”), reached agreements with the U.S. Environmental Protection Agency (“EPA”), the U.S. Department of Justice (“DOJ”), the Florida Department of Environmental Protection (“FDEP”) and the Louisiana Department of Environmental Quality on the terms of two consent decrees (collectively, the “2015 Consent Decrees”) to resolve claims relating to our management of certain waste materials onsite at our Riverview, New Wales, Mulberry, Green Bay, South Pierce and Bartow fertilizer manufacturing facilities in Florida and our Faustina and Uncle Sam facilities in Louisiana. This followed a 2003 announcement by the EPA Office of Enforcement and Compliance Assurance that it would be targeting facilities in mineral processing industries, including phosphoric acid producers, for a thorough review under the U.S. Resource Conservation and Recovery Act (“RCRA”) and related state laws. As discussed below, a separate consent decree was previously entered into with EPA and the FDEP with respect to RCRA compliance at the Plant City, Florida phosphate concentrates facility (the “Plant City Facility”) that we acquired as part of our acquisition (the “CF Phosphate Assets Acquisition”) of the Florida phosphate assets and assumption of certain related liabilities of CF Industries, Inc. (“CF”). The remaining monetary obligations under the 2015 Consent Decrees include:
As of December 31, 2019, the undiscounted amount of our Gypstack Closure Costs ARO associated with the facilities covered by the 2015 Consent Decrees, determined using the assumptions used for financial reporting purposes, was approximately $1.6 billion. and the present value of our Gypstack Closure Costs ARO reflected in our Consolidated Balance Sheet for those facilities was approximately $429.3 million. Plant City and Bonnie Facilities. As part of the CF Phosphate Assets Acquisition, we assumed certain AROs related to Gypstack Closure Costs at both the Plant City Facility and a closed Florida phosphate concentrates facility in Bartow, Florida (the “Bonnie Facility”) that we acquired. Associated with these assets are two related financial assurance arrangements for which we became responsible and that provided sources of funds for the estimated Gypstack Closure Costs for these facilities, pursuant to federal or state law: the government entities can draw against such amounts in the event we cannot perform such closure activities. One was initially a trust (the “Plant City Trust”) established to meet the requirements under a consent decree with the EPA and the FDEP with respect to RCRA compliance at Plant City that also satisfied Florida financial assurance requirements at that site. Beginning in September 2016, as a substitute for the financial assurance provided through the Plant City Trust, we have provided financial assurance for the Plant City Facility in the form of a surety bond (the “Plant City Bond”). The amount of the Plant City Bond is $244.9 million, which reflects our closure cost estimates as of December 31, 2019. The other was also a trust fund (the “Bonnie Facility Trust”) established to meet the requirements under Florida financial assurance regulations that apply to the Bonnie Facility. In July 2018, we received $21.0 million from the Bonnie Facility Trust by substituting for the trust fund a financial test mechanism (“Bonnie Financial Test”) supported by a corporate guarantee as allowed by state regulations. Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, new information, cost inflation, changes in regulations, discount rates and the timing of activities. Under our current approach to satisfying applicable requirements, additional financial assurance would be required in the future if increases in cost estimates exceed the face amount of the Plant City Bond or the amount supported by the Bonnie Financial Test. As of March 31, 2020 and December 31, 2019, the aggregate amounts of AROs associated with the combined Plant City Facility and Bonnie Facility gypstack closure costs included in our Condensed Consolidated Balance Sheets were $208.1 million and $211.2 million, respectively. The aggregate amount represented by the Plant City Bond exceeds the aggregate amount of ARO associated with that facility. This is because the amount of financial assurance we are required to provide represents the aggregate undiscounted estimated amount to be paid by us in the normal course of our Phosphates business over a period that may not end until three decades or more after the Gypstack has been closed, whereas the ARO included in our Condensed Consolidated Balance Sheet reflects the discounted present value of those estimated amounts.
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Marketable Securities Held in Trusts (Tables) |
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| Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale investments | The estimated fair value of the investments in the RCRA Trusts as of March 31, 2020 and December 31, 2019 are as follows:
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| Fair value of available-for-sale debt securities in an unrealized loss position | The following tables show gross unrealized losses and fair values of the RCRA Trusts' available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary as of March 31, 2020 and December 31, 2019:
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| Schedule of maturity dates for debt securities | The following table summarizes the balance by contractual maturity of the available-for-sale debt securities invested by the RCRA Trusts as of March 31, 2020. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations before the underlying contracts mature.
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Accumulated Other Comprehenive Income (Loss) (Tables) |
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| Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table sets forth the changes in AOCI, net of tax, by component during the three months ended March 31, 2020 and March 31, 2019:
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Fair Value Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Carrying Amount [Member] | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Cash and cash equivalents | $ 1,069.2 | $ 519.1 |
| Receivables, net | 723.0 | 803.9 |
| Accounts payable | 691.7 | 680.4 |
| Structured accounts payable arrangements | 502.0 | 740.6 |
| Short-term debt | 1,008.2 | 41.6 |
| Long-term debt, including current portion | 4,571.9 | 4,572.7 |
| Fair Value [Member] | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Cash and cash equivalents | 1,069.2 | 519.1 |
| Receivables, net | 723.0 | 803.9 |
| Accounts payable | 691.7 | 680.4 |
| Structured accounts payable arrangements | 502.0 | 740.6 |
| Short-term debt | 1,008.2 | 41.6 |
| Long-term debt, including current portion | $ 4,406.8 | $ 4,920.9 |