Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the material under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report on Form 10-K of The Mosaic Company filed with the Securities and Exchange Commission for the year ended December 31, 2020 (the “10-K Report”) and the material under Item 1 of Part I of this report.

Throughout the discussion below, we measure units of production, sales and raw materials in metric tonnes, which are the equivalent of 2,205 pounds, unless we specifically state we mean long ton(s), which are the equivalent of 2,240 pounds. In the following tables, there are certain percentages that are not considered to be meaningful and are represented by “NM.”

On October 31, 2018, the U.S. Securities and Exchange Commission adopted Subpart 1300 of Regulation S-K (“Regulation

SK-1300”) to modernize the property disclosure requirements for mining registrants. Beginning with our annual report on Form 10-K for the year ended December 31, 2021, we will be reporting in compliance with Regulation SK-1300 instead of Industry Guide 7. Regulation SK-1300 uses the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”) based classification scheme for mineral resources and mineral reserves, that includes definitions for inferred, indicated, and measured mineral resources.

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Results of Operations

The following table shows the results of operations for the three and nine months ended September 30, 2021 and September 30, 2020:

			Three months ended																								Nine months ended
			September 30,												2021-2020												September 30,												2021-2020
(in millions, except per share data)			2021						2020						Change						Percent						2021						2020						Change						Percent
Net sales			$	3,418.6					$	2,381.5					$	1,037.1					44		%				$	8,516.4					$	6,224.3					$	2,292.1					37		%
Cost of goods sold			2,554.1						2,026.4						527.7						26		%				6,464.7						5,570.8						893.9						16		%
Gross margin			864.5						355.1						509.4						143		%				2,051.7						653.5						1,398.2						NM
Gross margin percentage			25		%				15		%																24		%				10		%
Selling, general and administrative expenses			97.7						97.6						0.1						—		%				307.0						260.6						46.4						18		%
Mine closure costs			—						—						—						NM						158.1						—						158.1						NM
Other operating expense			65.2						159.0						(93.8)						(59)		%				87.8						274.8						(187.0)						(68)		%
Operating earnings			701.6						98.5						603.1						NM						1,498.8						118.1						1,380.7						NM
Interest expense, net			(47.8)						(43.0)						(4.8)						11		%				(130.1)						(133.4)						3.3						(2)		%
Foreign currency transaction gain (loss)			(100.1)						5.8						(105.9)						NM						(34.8)						(174.3)						139.5						(80)		%
Other income			0.6						4.7						(4.1)						(87)		%				5.0						11.6						(6.6)						(57)		%
Earnings (loss) from consolidated companies before income taxes			554.3						66.0						488.3						NM						1,338.9						(178.0)						1,516.9						NM
Provision for (benefit from) income taxes			176.6						38.1						138.5						NM						352.2						(97.6)						449.8						NM
Earnings (loss) from consolidated companies			377.7						27.9						349.8						NM						986.7						(80.4)						1,067.1						NM
Equity in net (loss) of nonconsolidated companies			(1.2)						(32.5)						31.3						(96)		%				(13.2)						(82.3)						69.1						(84)		%
Net earnings (loss) including noncontrolling interests			376.5						(4.6)						381.1						NM						973.5						(162.7)						1,136.2						NM
Less: Net earnings (loss) attributable to noncontrolling interests			4.6						1.6						3.0						188		%				7.7						(0.9)						8.6						NM
Net earnings (loss) attributable to Mosaic			$	371.9					$	(6.2)					$	378.1					NM						$	965.8					$	(161.8)					$	1,127.6					NM
Diluted net earnings (loss) per share attributable to Mosaic			$	0.97					$	(0.02)					$	0.99					NM						$	2.52					$	(0.43)					$	2.95					NM
Diluted weighted average number of shares outstanding			383.2						379.1																		383.0						379.0

Overview of Consolidated Results for the three months ended September 30, 2021 and 2020

For the three months ended September 30, 2021, Mosaic had net income of $371.9 million, or $0.97 per diluted share, compared to a net loss of $(6.2) million, or $(0.02) per diluted share, for the prior year period.

Significant factors affecting our results of operations and financial condition are listed below. Certain of these factors are discussed in more detail in the following sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our operating results for the three months ended September 30, 2021 were favorably impacted our Phosphates segment by significantly higher average selling prices than the prior year period. Sales prices have continued to rise, after reaching a low in the first quarter of 2020, driven by tightness in global supply and demand, strong farmer economics and improved grain prices. The benefit from higher sales prices was partially offset by higher raw material costs, primarily sulfur and ammonia, in the current year period compared to the prior year period. The purchase prices of these raw materials are driven by global supply and demand. Operating results in the current year period were unfavorably impacted by: (i) a lack of inventory, (ii) production

challenges experienced as a result of Hurricane Ida, which damaged our facilities in Louisiana, and (iii) an equipment failure at our New Wales, Florida site, which resulted in lower sales volumes compared to the prior year period.

Our operating results during the three months ended September 30, 2021, were favorably impacted in our Potash segment by higher average sales prices compared to the prior year period. Prices began to strengthen in North America and Brazil in the fourth quarter of 2020, due to increased demand, tight supply and improved farmer economics. Prices have continued to increase in 2021. Current period operating results were unfavorably impacted by lower sales volumes caused by low MOP inventory. MOP inventory was lower due to decreased production volumes associated with the closure of our K1 and K2 mine shafts at our Esterhazy, Saskatchewan potash mine in the second quarter of 2021. We have we reopened our previously idled Colonsay potash mine and ramped up production at our K3 mine shaft which has partially replaced this lost production.

For the three months ended September 30, 2021, our operating results were favorably impacted in our Mosaic Fertilizantes segment. Sales prices increased compared to the same period in the prior year due to tight global supply and demand. The favorable results were partially offset by lower sales volumes due to lower product availability used by our distribution business, low inventory and increased raw materials costs, as global prices of sulfur and ammonia were higher in the current year period.

In addition to the items noted above, our current period results were negatively impacted by a total of $168 million pre-tax, or $0.38 per diluted share, related to the following notable items:

• Foreign currency transaction loss of $100 million, or $(0.19) per diluted share

• Unrealized loss on derivatives of $26 million, or $(0.05) per diluted share

• Expense related to the impacts of Hurricane Ida on our Louisiana operations of $18 million, or $(0.03) per diluted share

• Asset retirement obligation costs of $13 million, or $(0.03) per diluted share, related to upwards revisions in the estimated costs of our asset retirement obligations

• Other operating expenses of $11 million, or $(0.03) per diluted share, related to maintaining closed and indefinitely idled facilities and asset retirement obligations

• Other operating expense of $3 million, or $(0.01) per diluted share, for an increase in a reserve related to the acquisition of Vale Fertilizantes S.A. (now known as Mosaic Fetilizantes P&K S.A. or the “Acquired Business”)

• Discrete income tax expense of $19 million, or $(0.05) per diluted share

• Functional currency benefit in cost of goods sold of $3 million, or $0.01 per diluted share

Other Highlights

During the quarter we completed a number of actions to strengthen and optimize our capital base which included:

• Completing the previously announced early redemption of our $450 million, 3.75 percent senior notes that were due November 2021, without premium or penalty.

• Entering into a new unsecured five-year credit facility of up to $2.5 billion, with a maturity date of August 19, 2026, which replaces our prior $2.2 billion line of credit. This increase in size provides additional security and flexibility and reflects the growth in our business.

• Approving a new $1 billion share repurchase authorization, which replaces the previous $1.5 billion authorization that had $700 million remaining. This new expanded authorization reflects our unchanged commitment to a balanced deployment of excess capital that includes returning capital to shareholders. During the quarter ended September 30, we repurchased 629,822 shares at an average price of $33.34, for a total of approximately $21 million.

Subsequent to quarter end, our Board of Directors approved a 50% increase to our annual dividend to $0.45 per share beginning in 2022.

Overview of Consolidated Results for the nine months ended September 30, 2021 and 2020

Net earnings attributable to Mosaic for the nine months ended September 30, 2021 was $965.8 million, or $2.52 per diluted share, compared to a net loss of $(161.8) million, or $(0.43) per diluted share, for the same period a year ago.

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Results for the nine months ended September 30, 2021 and 2020 reflected the factors discussed above in the discussion for the three months ended September 30, 2021 and 2020, in addition to those noted below. Certain of these factors are discussed in more detail in the following sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Operating results in our Phosphates segment for the nine months ended September 30, 2021 were favorably impacted by higher phosphate average selling prices compared to the prior year period. These results were driven by the factors mentioned above in the three-month discussion. Operating results in the current year period were unfavorably impacted by lower finished product sales volumes, and higher raw material costs in the current year period, as discussed above in the three-month discussion. In addition, during the first half of 2021, availability of molten sulfur was impacted by refinery closures in 2020 and 2021, due to lower fuel demand and extreme cold weather in the first quarter of 2021 in the southern United States, where several refineries are located. The low sulfur availability constrained our production in the first half of 2021. Current year operating results were also unfavorably impacted by higher idle plant and maintenance turnaround costs compared to the prior year.

Operating results in our Potash segment for the nine months ended September 30, 2021 were favorably impacted by an increase in the average selling price of potash compared to the prior year period, partially offset by lower sales volumes. These results were driven by the factors mentioned above in the three-month discussion.

For the nine months ended September 30, 2021, operating results in our Mosaic Fertilizantes segment were favorably impacted by an increase in average sales prices in the current year compared to the prior year period, driven by strong market demand and tight supply. These results were partially offset by the unfavorable impact of lower sales volumes and increased raw materials costs, as discussed above in the three-month discussion.

In addition to the items noted above, the results for the nine months ended September 30, 2021 were negatively impacted by $272 million pre-tax, or $0.57 per share due to the following notable items:

• Expense related to the closure of our K1 and K2 mine shafts at our Esterhazy, Saskatchewan potash mine of $158 million, or $(0.30) per diluted share, as further explained below in Other Highlights

• Other operating expenses of $41 million, or $(0.08) per diluted share, related to maintaining closed and indefinitely idled facilities and asset retirement obligations

• Depreciation expense of $37 million, or $(0.08) 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

• Foreign currency transaction loss of $35 million, or $(0.07) per diluted share

• Expense related to the impacts of Hurricane Ida on our Louisiana operations of $18 million, or $(0.03) per diluted share

• Discrete income tax expense of $17 million, or $(0.05) per diluted share

• Asset retirement obligation costs of $16 million, or $(0.03) per diluted share, related to upward revisions in the estimated costs of our asset retirement obligations

• Functional currency impact in cost of goods sold of $3 million

• Other operating income of $20 million, or $0.04 per diluted share, related to the sale of our warehouse in Houston, Texas

• Other operating income of $8 million, or $0.01 per diluted share, for recovery of a reserve related to the Acquired Business

• Unrealized gain on derivatives of $4 million, or $0.01 per diluted share

• Other non-operating income of $4 million, or $0.01 per diluted share, related to a realized gain on RCRA trust securities

Other Highlights

• Due to increased brine inflows, on June 4, 2021, the Company made the decision to accelerate the timing of the shutdown of our K1 and K2 mine shafts at our Esterhazy, Saskatchewan potash mine, which was an acceleration of approximately nine months. In the second quarter of 2021, we recognized pre-tax costs of $158.1 million related to the

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permanent closure of these facilities. In the third quarter, we resumed production at our previously idled Colonsay potash mine to offset a portion of the production lost by the early closure of the K1 and K2 shafts at Esterhazy. We expect the K1 and K2 closures, as partially offset by the reopening of the Colonsay mine and ramp up of the K3 shaft, will result in lower net sales volumes of approximately 600,000 tonnes of potash in 2021.

• In 2020, we filed petitions with the U.S. Department of Commerce (“DOC”) and the U.S. International Trade Commission (“ITC”) that requested the initiation of countervailing duty investigations into imports of phosphate fertilizers from Morocco and Russia. The purpose of the petitions was to remedy the distortions that we believe foreign subsidies have caused or are causing in the U.S. market for phosphate fertilizers, and thereby restore fair competition. On February 16, 2021, the DOC made final affirmative determinations that countervailable subsidies were being provided by those governments. On March 11, 2021, the ITC made final affirmative determinations that the U.S. phosphate fertilizer industry is materially injured by reason of subsidized phosphate fertilizer imports from Morocco and Russia. As a result of these determinations, the DOC issued countervailing duty orders on phosphate fertilizer imports from Russia and Morocco, which are scheduled to remain in place for at least five years. Currently, the cash deposit rates for such imports are approximately 20 percent for Moroccan producer OCP, 9 percent and 47 percent for Russian producers PhosAgro and Eurochem, respectively, and 17 percent for all other Russian producers. The final determinations in the DOC and ITC investigations are subject to challenge before U.S. federal courts and the World Trade Organization. Mosaic has initiated actions at the U.S. Court of International Trade contesting certain aspects of the DOC's final determinations that, we believe, failed to capture the full extent of Moroccan and Russian phosphate fertilizer subsidies. Moroccan and Russian producers have also initiated U.S. Court of International Trade actions, seeking lower cash deposit rates and revocation of the countervailing duty orders. Further, the cash deposit rates and the amount of countervailing duties owed by importers on such imports could change based on the results of the litigation as well as DOC's annual administrative review proceedings.

• In March 2021, we announced an increase in our annual dividend target to $0.30 from $0.20 per share.

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Phosphates Net Sales and Gross Margin

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

			Three months ended																								Nine months ended
			September 30,												2021-2020												September 30,												2021-2020
(in millions, except price per tonne or unit)			2021						2020						Change						Percent						2021						2020						Change						Percent
Net sales:
North America			$	800.2					$	439.9					$	360.3					82		%				$	2,272.4					$	1,204.6					$	1,067.8					89		%
International			481.1						304.6						176.5						58		%				1,184.7						921.7						263.0						29		%
Total			1,281.3						744.5						536.8						72		%				3,457.1						2,126.3						1,330.8						63		%
Cost of goods sold			917.1						722.7						194.4						27		%				2,611.8						2,169.7						442.1						20		%
Gross margin			$	364.2					$	21.8					$	342.4					NM						$	845.3					$	(43.4)					$	888.7					NM
Gross margin as a percentage of net sales			28		%				3		%																24		%				(2)		%
Sales volumes(a) (in thousands of metric tonnes)
DAP/MAP			907						1,134						(227)						(20)		%				2,997						3,632						(635)						(17)		%
Performance and Other(b)			929						930						(1)						0		%				2,883						2,586						297						11		%
Total finished product tonnes			1,836						2,064						(228)						(11)		%				5,880						6,218						(338)						(5)		%
Rock			450						238						212						89		%				1,256						526						730						139		%
Total Phosphates Segment Tonnes(a)			2,286						2,302						(16)						(1)		%				7,136						6,744						392						6		%
Realized prices ($/tonne)
Average finished product selling price (destination)(a)			$	681					$	354					$	327					92		%				$	575					$	337					$	238					71		%
DAP selling price (fob plant)			$	605					$	307					$	298					97		%				$	524					$	289					$	235					81		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	424					$	273					$	151					55		%				$	371					$	290					$	81					28		%
Sulfur (long ton)			$	214					$	86					$	128					149		%				$	167					$	80					$	87					109		%
Blended rock (metric tonne)			$	59					$	60					$	(1)					(2)		%				$	60					$	61					$	(1)					(2)		%
Production volume (in thousands of metric tonnes) - North America			1,738						2,038						(300)						(15)		%				5,476						6,015						(539)						(9)		%

____________________________

(a) Includes intersegment sales volumes.

(b) Includes sales volumes of MicroEssentials® and animal feed ingredients.

Three months ended September 30, 2021 and September 30, 2020

The Phosphates segment’s net sales were $1.3 billion for the three months ended September 30, 2021, compared to $0.7 billion for the three months ended September 30, 2020. The increase in net sales in the current year period was primarily due to favorable sales prices, which had an impact of approximately $550 million compared to the prior year period. Increased sales of ammonia and sulfur favorably impacted net sales by approximately $30 million. This was partially offset by lower phosphate sales volumes, which had an unfavorable impact on net sales of approximately $50 million compared to the prior year period.

Our average finished product selling price increased 92% to $681 per tonne for the three months ended September 30, 2021, compared to $354 per tonne in the prior year period, due to the factors discussed in the Overview.

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The Phosphates segment’s sales volumes of finished products decreased by 11% for the three months ended September 30, 2021, compared to the same period in the prior year, due to the factors discussed in the Overview.

Gross margin for the Phosphates segment increased to $364.2 million for the three months ended September 30, 2021, from $21.8 million for the three months ended September 30, 2020. The increase in gross margin in the current year period was primarily due to significantly higher sales prices, which favorably impacted gross margin by approximately $550 million compared to the prior year period. This was partially offset by an unfavorable impact of approximately $140 million from increased raw material prices, largely driven by sulfur. Lower sales volumes unfavorably impacted gross margin by approximately $40 million due to factors discussed in the Overview. The increase in gross margin was also partially offset by the unfavorable impact of approximately $30 million due to idle and turnaround costs caused by the impacts of equipment damage at our New Wales, Florida site and Hurricane Ida on our Louisiana operations.

The average consumed price for ammonia for our North American operations increased to $424 per tonne for the three months ended September 30, 2021, from $273 in the same period a year ago. We typically purchase approximately one-third of our ammonia from various suppliers in the spot market, with the remaining two-thirds either purchased through an ammonia supply agreement or produced internally at our Faustina, Louisiana location. However, in the current period, our internal production was impacted by downtime from Hurricane Ida. The average consumed sulfur price for our North American operations increased by more than 100% to $214 per long ton for the three months ended September 30, 2021, from $86 in the same period a year ago. The purchase prices of these raw materials are driven by global supply and demand. The consumed ammonia and sulfur prices also include transportation, transformation, and storage costs.

The average consumed cost of purchased and produced phosphate rock decreased slightly to $59 per tonne for the three months ended September 30, 2021, compared to $60 per tonne for the three months ended September 30, 2020. For the three months ended September 30, 2021, our North American phosphate rock production decreased to 2.8 million tonnes from 3.0 million tonnes for the same period of the prior year, due to geology of rock and operational challenges as we transition into new mining areas.

The Phosphates segment's production of crop nutrient dry concentrates and animal feed ingredients decreased to 1.7 million tonnes for the three months ended September 30, 2021, compared to 2.0 million for the three months ended September 30, 2020. The lower production volume in the current year period reflects impacts from downtime at our New Wales, Florida site due to equipment damage and at our Louisiana location related to Hurricane Ida. Our operating rate for processed phosphate production decreased to 70% for the three months ended September 30, 2021, from 82% for the same period in 2020.

Nine months ended September 30, 2021 and September 30, 2020

The Phosphates segment’s net sales were $3.5 billion for the nine months ended September 30, 2021, compared to $2.1 billion for the nine months ended September 30, 2020. The increase in net sales was primarily due to higher finished product selling prices in the current year period, which favorably impacted net sales by approximately $1.3 billion compared to the prior year period. Net sales were also favorably impacted by approximately $100 million due to sales of rock in our Miski Mayo operation and sales of excess ammonia and sulfur in the current year period. These increases were partially offset by lower sales volumes of finished goods, which unfavorably impacted net sales by approximately $40 million.

Our average finished product selling price was $575 per tonne for the nine months ended September 30, 2021, an increase of 71% per tonne from the same period a year ago, due to the factors discussed in the Overview.

The Phosphates segment’s sales volumes of finished products decreased by 5% for the nine months ended September 30, 2021, compared to the same period in the prior year ago, due to the factors discussed in the Overview.

Gross margin for the Phosphates segment increased to $845.3 million for the nine months ended September 30, 2021, from $(43.4) million for the nine months ended September 30, 2020. The increase in gross margin in the current year period was primarily due to the impact of higher finished product prices of approximately $1.3 billion compared to the prior year, and an increase in rock and excess ammonia and sulfur sales of approximately $40 million. These increases were partially offset by higher raw material costs as discussed below, which impacted gross margin by approximately $280 million, and higher costs of approximately $70 million related to the timing of idle plant and turnaround costs in the current year period. Gross margin was also unfavorably impacted by approximately $50 million, due to lower sales volumes, and higher conversion costs of approximately $20 million.

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The average consumed price for ammonia for our North American operations was $371 per tonne for the nine months ended September 30, 2021, compared to $290 in the same period a year ago. The average consumed price for sulfur for our North American operations increased to $167 per long ton for the nine months ended September 30, 2021, from $80 in the same period a year ago. The purchase prices of these raw materials are driven by global supply and demand.

The average consumed cost of purchased and produced phosphate rock decreased slightly to $60 per tonne for the nine months ended September 30, 2021, compared to $61 per tonne for the prior year period. Our North American phosphate rock production decreased to 8.6 million tonnes for the nine months ended September 30, 2021, compared to 9.8 million for the nine months ended September 30, 2020. The decrease from the prior year is due to the challenges noted above in the three-month discussion.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased to 5.5 million tonnes for the nine months ended September 30, 2021, compared to 6.0 million tonnes in the prior year period, due to sulfur availability issues in the current year, as well as the items mentioned above in the three-month discussion. For the nine months ended September 30, 2021, our operating rate for processed phosphate production decreased to 73%, compared to 81% in the same period of the prior year.

Potash Net Sales and Gross Margin

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

			Three months ended																								Nine months ended
			September 30,												2021-2020												September 30,												2021-2020
(in millions, except price per tonne or unit)			2021						2020						Change						Percent						2021						2020						Change						Percent
Net sales:
North America			$	297.5					$	251.8					$	45.7					18		%				$	1,067.9					$	849.5					$	218.4					26		%
International			291.8						212.0						79.8						38		%				661.8						611.3						50.5						8		%
Total			589.3						463.8						125.5						27		%				1,729.7						1,460.8						268.9						18		%
Cost of goods sold			353.3						356.2						(2.9)						(1)		%				1,136.3						1,112.5						23.8						2		%
Gross margin			$	236.0					$	107.6					$	128.4					119		%				$	593.4					$	348.3					$	245.1					70		%
Gross margin as a percentage of net sales			40		%				23		%																34		%				24		%
Sales volume(a) (in thousands of metric tonnes)
MOP			1,547						2,030						(483)						(24)		%				5,358						6,021						(663)						(11)		%
Performance and Other(b)			261						234						27						12		%				756						701						55						8		%
Total Potash Segment Tonnes			1,808						2,264						(456)						(20)		%				6,114						6,722						(608)						(9)		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	326					$	205					$	121					59		%				$	283					$	217					$	66					30		%
MOP selling price (fob mine)			$	290					$	170					$	120					71		%				$	242					$	181					$	61					34		%
Production volume (in thousands of metric tonnes)			1,580						2,111						(531)						(25)		%				5,996						6,377						(381)						(6)		%

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(a) Includes intersegment sales volumes.

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

Three months ended September 30, 2021 and September 30, 2020

The Potash segment’s net sales increased to $589.3 million for the three months ended September 30, 2021, compared to $463.8 million in the same period a year ago. The increase was due to higher selling prices, which had a favorable impact on net sales of approximately $220 million, compared to the same period in the prior year. This was partially offset by lower sales volumes compared to the prior year, which unfavorably impacted net sales by approximately $95 million.

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Our average finished product selling price was $326 per tonne for the three months ended September 30, 2021, compared to $205 per tonne for the same period a year ago, as a result of the factors described in the Overview.

The Potash segment’s sales volumes of finished products decreased to 1.8 million tonnes for the three months ended September 30, 2021, compared to 2.3 million tonnes in the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment increased to $236.0 million for the three months ended September 30, 2021, from $107.6 million in the same period of the prior year. The increase in gross margin in the current year period is primarily due to an increase in selling prices, which contributed approximately $220 million to gross margin, compared to the prior year period. This was partially offset by an unfavorable impact of approximately $30 million due to lower sales volumes in the current year period. In addition, the current year period was unfavorably impacted by approximately $30 million from higher Canadian resource taxes, as discussed below. Gross margin was also unfavorably impacted by higher idle costs of approximately $20 million compared to the prior year period.

We had expense of $57.3 million from Canadian resource taxes for the three months ended September 30, 2021, compared to $26.1 million in the same period a year ago. Canadian royalty expense increased to $8.2 million for the three months ended September 30, 2021, compared to $6.9 million for the three months ended September 30, 2020. The fluctuations in Canadian resource taxes and royalties are a result of an increase in sales revenue and margins.

On June 4, 2021, due to increased brine inflows, we made the decision to immediately close the K1 and K2 shafts at our Esterhazy mine, which eliminated future brine inflow management expenses. Therefore, we did not incur any brine inflow management expenses for the three months ended September 30, 2021, compared to $28 million in brine inflow management expenses, including depreciation on brine assets, during the three months ended September 30, 2020. We remain on track in our development of the K3 shaft at our Esterhazy mine, which is expected to reach full operational capacity by the end of the first quarter of 2022.

Our operating rate for potash production was 65% for the current year period, compared to 87% in the prior year period. The decreased operating rate in the current year period reflects the shutdown of our K1 and K2 shafts at our Esterhazy mine.

Nine months ended September 30, 2021 and September 30, 2020

The Potash segment’s net sales increased to $1.7 billion for the nine months ended September 30, 2021, compared to $1.5 billion in the same period a year ago. The increase was due to higher selling prices, which had a favorable impact on net sales of approximately $375 million, and favorable foreign currency impacts of approximately $10 million. This was partially offset by lower sales volumes, which had an unfavorable impact on net sales of approximately $120 million.

Our average selling price was $283 per tonne for the nine months ended September 30, 2021, compared to $217 per tonne for the same period a year ago, due to the factors discussed above in the Overview.

The Potash segment’s sales volumes decreased to 6.1 million tonnes for the nine months ended September 30, 2021, compared to 6.7 million tonnes in the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment increased to $593.4 million for the nine months ended September 30, 2021, from $348.3 million for the same period in the prior year. Gross margin was favorably impacted by approximately $375 million, due to the increase in average selling prices, partially offset by approximately $50 million, due to the impact of lower sales volumes. Gross margin was unfavorably impacted by higher maintenance turnaround costs of approximately $30 million, due to restarting operations at our Colonsay mine, higher Canadian resource taxes of approximately $35 million in the current year period, and approximately $20 million of additional foreign currency impacts in the current year period, compared to the prior year period.

We incurred $146.5 million in Canadian resource taxes for the nine months ended September 30, 2021, compared to $109.9 million in the same period a year ago. Canadian royalty expense increased to $26.7 million for the nine months ended September 30, 2021, compared to $22.9 million for the nine months ended September 30, 2020. The fluctuations in Canadian resource taxes and royalties are due to higher average selling prices and margins in the current year period compared to the prior year.

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We incurred expense of $28 million, including depreciation on brine assets, related to managing the brine inflows at our Esterhazy mine during the nine months ended September 30, 2021, compared to $54 million in the prior year period.

Our operating rate was 82% for the current year period, compared to 88% in the prior year period, due to the closure of our K1 and K2 shafts.

Mosaic Fertilizantes Net Sales and Gross Margin

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

			Three months ended																								Nine months ended
			September 30,												2021-2020												September 30,												2021-2020
(in millions, except price per tonne or unit)			2021						2020						Change						Percent						2021						2020						Change						Percent
Net Sales			$	1,754.7					$	1,140.5					$	614.2					54		%				$	3,553.8					$	2,658.6					$	895.2					34		%
Cost of goods sold			1,422.5						963.6						458.9						48		%				2,933.4						2,314.5						618.9						27		%
Gross margin			$	332.2					$	176.9					$	155.3					88		%				$	620.4					$	344.1					$	276.3					80		%
Gross margin as a percent of net sales			19		%				16		%																17		%				13		%
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil(a)			722						1,343						(621)						(46)		%				1,944						3,203						(1,259)						(39)		%
Potash produced in Brazil			56						85						(29)						(34)		%				185						231						(46)						(20)		%
Purchased nutrients for distribution			2,572						2,160						412						19		%				5,626						4,789						837						17		%
Total Mosaic Fertilizantes Segment Tonnes			3,350						3,588						(238)						(7)		%				7,755						8,223						(468)						(6)		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	524					$	318					$	206					65		%				$	458					$	323					$	135					42		%
Brazil MAP price (delivered price to third party)			$	622					$	366					$	256					70		%				$	543					$	337					$	206					61		%
Purchases ('000 tonnes)
DAP/MAP from Mosaic			62						82						(20)						(24)		%				222						429						(207)						(48)		%
MicroEssentials® from Mosaic			343						373						(30)						(8)		%				964						897						67						7		%
Potash from Mosaic/Canpotex			1,024						622						402						65		%				1,986						1,623						363						22		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	640					$	329					$	311					95		%				$	524					$	368					$	156					42		%
Sulfur (long ton)			$	222					$	107					$	115					107		%				$	179					$	119					$	60					50		%
Blended rock (metric tonne)			$	81					$	65					$	16					25		%				$	79					$	69					$	10					14		%
Production volume (in thousands of metric tonnes)			982						1,025						(43)						(4)		%				2,760						3,057						(297)						(10)		%

______________________________

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

Three months ended September 30, 2021 and September 30, 2020

The Mosaic Fertilizantes segment’s net sales increased to $1.8 billion for the three months ended September 30, 2021, from $1.1 billion in the same period a year ago. The increase in net sales was due to higher finished product sales prices, which favorably impacted net sales by approximately $570 million. This was partially offset by lower finished goods sales volumes, which had an unfavorable impact of approximately $60 million. Net sales were also favorably impacted by increased sales prices and volumes of other products, primarily gypsum and sulfuric acid, of approximately $100 million.

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Our average finished product selling price was $524 per tonne for the three months ended September 30, 2021, compared to $318 per tonne for the same period a year ago, due to the increase in global sales prices, favorable market conditions and the mix of products sold.

The Mosaic Fertilizantes segment’s sales volumes of finished products decreased 7% for the three months ended September 30, 2021, compared to the same period a year ago. Sales volumes were impacted by limited available inventories combined with lower operating rates.

Gross margin for the Mosaic Fertilizantes segment increased to $332.2 million for the three months ended September 30, 2021, from $176.9 million in the same period of the prior year. The increase in gross margin was primarily due to a favorable impact of approximately $570 million related to the increase in selling prices during the current year period compared to the prior year period. Increased sales prices and volumes of other products, primarily gypsum and sulfuric acid, also favorably impacted gross margin by approximately $40 million. Lower finished goods sales volumes unfavorably impacted gross margin by approximately $20 million compared to the prior year period. An increase in raw material costs, primarily material purchases by our distribution business, rock, ammonia and sulfur, had an unfavorable impact on gross margin of approximately $430 million, compared to the prior year period. The purchase prices of ammonia and sulfur are driven by global supply and demand.

The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates and animal feed ingredients decreased 4% for the three months ended September 30, 2021, compared to the prior year period. For the three months ended September 30, 2021, our phosphate operating rate decreased to 91%, compared to 94% in the same period of the prior year. Current year production was impacted by unplanned maintenance downtime in the current year period.

For the three months ended September 30, 2021, our Brazilian phosphate rock production decreased slightly to 1.0 million tonnes, from 1.1 million tonnes for the prior year period.

Nine months ended September 30, 2021 and 2020

The Mosaic Fertilizantes segment’s net sales were $3.6 billion for the nine months ended September 30, 2021, compared to $2.7 billion in the prior year period. In the current period, net sales were favorably impacted by approximately $860 million due to higher finished goods sales prices, partially offset by the impact of lower finished goods sales volumes of approximately $115 million, and foreign currency impacts of approximately $35 million. Net sales were also favorably impacted by higher sales prices and volumes of other product, primarily gypsum and sulfur acid, of approximately $185 million, compared to the prior year period.

The average finished product selling price increased $135 per tonne to $458 per tonne for the nine months ended September 30, 2021, compared to $323 per tonne in the prior year period, primarily due to the increase in global prices mentioned in the Overview.

The Mosaic Fertilizantes segment’s sales volume decreased to 7.8 million tonnes for the nine months ended September 30, 2021, from 8.2 million tonnes in the same period a year ago, due to factors discussed above in the three-month discussion.

Total gross margin for the nine months ended September 30, 2021, increased to $620.4 million from $344.1 million in the same period in the prior year. In the current year period, gross margin was favorably impacted by favorable sales prices in the aggregate amount of approximately $860 million. Gross margin was negatively impacted by lower sales volumes of approximately $35 million and higher raw materials costs of approximately $610 million in the current year period compared to the prior year. Higher production costs at our facilities, due to lower production volumes and higher maintenance costs, resulted in an unfavorable gross margin impact of approximately $50 million. Idle costs unfavorably impacted gross margin by approximately $20 million compared to the prior year period. Gross margin was also positively impacted by favorable foreign currency impacts of approximately $30 million, sales of other product, primarily gypsum and sulfur acid, of approximately $85 million compared to the prior year period, and favorable product mix of approximately $10 million.

The Mosaic Fertilizantes segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased 10% to 2.8 million tonnes for the nine months ended September 30, 2021, from 3.1 million tonnes in the prior year period. The lower production in the current year was due to the unplanned maintenance down time and lower quality ore compared to the prior year period. For the nine months ended September 30, 2021, our phosphate operating rate was 85%, compared to 93% in the same period of the prior year.

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For the nine month period ended September 30, 2021, our Brazilian phosphate rock production decreased slightly to 2.9 million tonnes, from 3.2 million tonnes in the prior year period.

Corporate, Eliminations and Other

In addition to our three operating segments, we assign certain costs to Corporate, Eliminations and Other, which is presented separately in Note 17 to our Notes to Condensed Consolidated Financial Statements. Corporate, Eliminations and Other includes the results of the China and India distribution businesses, intersegment eliminations, including profit on intersegment sales, unrealized mark-to-market gains and losses on derivatives, debt expenses and Streamsong Resort® results of operations.

For the three months ended September 30, 2021, gross margin for Corporate, Eliminations and Other was $(67.9) million, compared to $48.8 million for the same period in the prior year. Results were negatively impacted by a higher elimination of profit on intersegment sales in the current year period, which changed from the prior year by approximately $73.7 million. Gross margin was also negatively impacted by a net unrealized loss of $26.3 million in the current year period, primarily on foreign currency derivatives, compared to a net unrealized gain of $24.6 million in the prior year period. Gross margin was positively impacted by distribution operations in India and China, which had revenue of $136.2 million and gross margin of $22.9 million in the current year period, compared to revenue of $200.9 million and gross margin of $18.4 million in the prior year period.

For the nine months ended September 30, 2021, gross margin for Corporate, Eliminations and Other was $(7.4) million, compared to $4.5 million for the same period in the prior year. Results were negatively impacted by a higher elimination of profit on intersegment sales in the current year period of $101.3 million which is a change of $104.7 from the same period in the prior year. This was partially offset by distribution operations in India and China, which had revenue of $475.8 million and gross margin of $95.9 million in the current year period, compared to revenue of $439.2 million and gross margin of $40.4 million in the prior year period. The increases in revenue and gross margin were due higher agriculture commodity prices and tight supply of phosphate and potash in the current year period. Gross margin was also positively impacted by a net unrealized gain of $3.6 million in the current year period compared to a net unrealized loss of $17.0 million in the prior year period, primarily on foreign currency derivatives.

Other Income Statement Items

			Three months ended																								Nine months ended
			September 30,												2021-2020												September 30,												2021-2020
(in millions)			2021						2020						Change						Percent						2021						2020						Change						Percent
Selling, general and administrative expenses			$	97.7					$	97.6					$	0.1					—		%				$	307.0					$	260.6					$	46.4					18		%
Mine closure costs			—						—						—						NM						158.1						—						158.1						NM
Other operating expense			65.2						159.0						(93.8)						(59)		%				87.8						274.8						(187.0)						(68)		%
Interest expense			(54.6)						(50.8)						(3.8)						7		%				(147.8)						(158.6)						10.8						(7)		%
Interest income			6.8						7.8						(1.0)						(13)		%				17.7						25.2						(7.5)						(30)		%
Interest expense, net			(47.8)						(43.0)						(4.8)						11		%				(130.1)						(133.4)						3.3						(2)		%
Foreign currency transaction gain (loss)			(100.1)						5.8						(105.9)						NM						(34.8)						(174.3)						139.5						(80)		%
Other income			0.6						4.7						(4.1)						(87)		%				5.0						11.6						(6.6)						(57)		%
Provision for (benefit from) income taxes			176.6						38.1						138.5						NM						352.2						(97.6)						449.8						NM
Equity in net (loss) of nonconsolidated companies			(1.2)						(32.5)						31.3						(96)		%				(13.2)						(82.3)						69.1						(84)		%

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $97.7 million for the three months ended September 30, 2021, were essentially flat, compared to $97.6 million in the same period of the prior year.

Selling, general and administrative expenses were $307.0 million for the nine months ended September 30, 2021 compared to $260.6 million in the same period of the prior year. The increase was due primarily to approximately $37 million of

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compensation expense related to long-term incentive awards and approximately $5 million of higher consulting and professional fees, related to executing on our strategic priorities,compared to the prior year period.

Mine Closure Costs

On June 4, 2021, due to increased brine inflow, we made the decision to accelerate the timing of the shutdown of our K1 and K2 mine shafts at our Esterhazy, Saskatchewan potash mine. For the nine months ended September 30, 2021, we recognized pre-tax costs of $158.1 million related to the permanent closure of these facilities. These costs consisted of $110.0 million related to the write-off of fixed assets, $37.1 million related to asset retirement obligations, and $11.0 million related to inventory and other reserves.

Other Operating Expense

For the three months ended September 30, 2021, we had other operating expenses of $65.2 million, compared to $159.0 million for the same period in the prior year. The three months ended September 30, 2021 include approximately $13 million related to revisions in estimated closure costs for our asset retirement obligations at our closed facilities compared to approximately $76 million in the prior year period. Environmental reserves in the current year period were approximately $20 million compared to $35 million in the period year period. Costs for closed and indefinitely idled facilities were approximately $6 million lower in the current year period compared to the same period in the prior year. The prior year also included approximately $8 million for reserves for legal matters and approximately $7 million related to integration costs of our North American business operations.

For the nine months ended September 30, 2021, we had other operating expenses of $87.8 million, compared to $274.8 million for the same period in the prior year. The nine months ended September 30, 2021 include approximately $16 million related to revisions in estimated closure costs for our asset retirement obligations at our closed facilities compared to approximately $126 million in the prior year period. In addition to the items mentioned above in the three-month discussion, the current year period includes income of approximately $20 million related to a gain on selling a warehouse and approximately $8 million related to the recovery of a reserve for the Acquired Business.

Foreign Currency Transaction Gain (Loss)

We recorded foreign currency transaction losses of $(100.1) million and $(34.8) million for the three and nine months ended September 30, 2021, respectively, compared to a gain of $5.8 million and a loss of $(174.3) million for the three and nine months ended September 30, 2020. For the three months ended September 30, 2021, the loss was the result of the effect of the strengthening of the U.S. dollar relative to the Brazilian real on significant U.S. dollar-denominated payables held by our Brazilian subsidiaries and the strengthening of the U.S. dollar relative to the Canadian dollar on significant U.S. dollar-denominated intercompany loans.

For the nine months ended September 30, 2021, the loss was the result of the effect of the strengthening of the U.S. dollar relative to the Brazilian real on significant U.S. dollar-denominated payables held by our Brazilian subsidiaries. This was partially offset by the weakening of the U.S. dollar relative to the Canadian dollar on significant U.S. dollar-denominated intercompany loans and the weakening of the Peruvian sol relative to the U.S. dollar on deferred tax liabilities in the Miski Mayo operations in Peru.

Equity in Net (Loss) Earnings of Nonconsolidated Companies

For the three and nine months ended September 30, 2021, we had equity in net loss of nonconsolidated companies of $1.2 million and $13.2 million, respectively, compared to equity in net loss of nonconsolidated companies of $32.5 million and $82.3 million for the same periods in the prior year. All of these losses are primarily related to operations at MWSPC.

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Provision for (Benefit from) Income Taxes

Three months ended						Effective Tax Rate						Provision for (Benefit from) Income Taxes
September 30, 2021						31.9		%				$	176.6
September 30, 2020						57.7		%				$	38.1
Nine months ended						Effective Tax Rate						Provision for (Benefit from) Income Taxes
September 30, 2021						26.3		%				$	352.2
September 30, 2020						54.8		%				$	(97.6)

Income tax expense was $176.6 million and $352.2 million, and the effective tax rate was 31.9% and 26.3% for the three and nine months ended September 30, 2021.

For the three months ended September 30, 2021, tax expense specific to the period was a cost of approximately $20.0 million. This consisted primarily of net tax cost related to true up of estimates related to our U.S. tax return provision, a benefit for withholding taxes related to undistributed earnings, and other miscellaneous benefits. In addition to items specific to the period, our income tax rate is impacted by the mix of earnings across the jurisdictions in which we operate, by a benefit associated with depletion, by a benefit associated with non-U.S. incentives, by changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.

For the nine months ended September 30, 2021, tax expense specific to the period was a benefit of approximately $25.2 million. This relates to various items including benefits for the following items: $42.7 million benefit related to the pretax Esterhazy mine closure costs, and $2.8 million benefit recorded related to prior year non-U.S. reserves. These tax benefits are partially offset by net tax costs of $20.3 million primarily related to true up of estimates related to our U.S. tax return provision, a benefit for withholding taxes related to undistributed earnings, and other miscellaneous benefits. In addition to items specific to the period, our income tax rate is impacted by the mix of earnings across the jurisdictions in which we operate, by a benefit associated with depletion, and by the impact of certain entities being taxed in both foreign jurisdictions and the U.S., including foreign tax credits for various taxes incurred.

Critical Accounting Estimates

The Condensed Consolidated Financial Statements are prepared in conformity with GAAP. In preparing the Condensed Consolidated Financial Statements, we are required to make various judgments, estimates and assumptions that could have a significant impact on the results reported in the Condensed Consolidated Financial Statements. We base these estimates on historical experience and other assumptions believed to be reasonable by management under the circumstances. Changes in these estimates could have a material effect on our Condensed Consolidated Financial Statements.

The basis for our financial statement presentation, including our significant accounting estimates, is summarized in Note 2 to the Condensed Consolidated Financial Statements in this report. A summary description of our significant accounting policies is included in Note 2 to the Consolidated Financial Statements in our 10-K Report. Further detailed information regarding our critical accounting estimates is included in Management’s Discussion and Analysis of Results of Operations and Financial Condition in our 10-K Report.

Liquidity and Capital Resources

As of September 30, 2021, we had cash and cash equivalents of $0.8 billion, short-term debt of $0.1 million, long-term debt, including current maturities, of approximately $4.0 billion, and stockholders’ equity of approximately $10.6 billion. We have a target liquidity buffer of up to $3.0 billion, including cash and available committed and uncommitted credit lines. We expect our liquidity to fluctuate from time to time, especially in the first quarter of each year, to manage through the seasonality of our business. We also target debt leverage ratios that are consistent with investment grade credit metrics. Our capital allocation priorities include maintaining our target investment grade metrics and financial strength, sustaining our assets, including ensuring the safety and reliability of our assets, investing to grow our business, either through organic growth or taking

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advantage of strategic opportunities, and returning excess cash to shareholders, including paying our dividend. During the nine months ended September 30, 2021, we invested $925.8 million in capital expenditures.

Funds generated by operating activities, available cash and cash equivalents, and our credit facilities continue to be our most significant sources of liquidity. We believe funds generated from the expected results of operations and available cash, cash equivalents and borrowings under our committed and uncommitted credit facilities, as needed, will be sufficient to finance our operations, including our capital expenditures, existing strategic initiatives and expected dividend payments, for the next 12 months. There can be no assurance, however, that we will continue to generate cash flows at or above current levels. As of September 30, 2021, we had $2.49 billion available under our $2.50 billion committed revolving credit facility and approximately $500 million available under uncommitted facilities. Our credit facilities, including the revolving credit facility and our term loans, require us to maintain certain financial ratios, as discussed in Note 10 of our Notes to Consolidated Financial Statements in our 10-K Report. We were in compliance with these ratios as of September 30, 2021.

All of our cash and cash equivalents are diversified in highly rated investment vehicles. Our cash and cash equivalents are held either in the U.S. or held by non-U.S. subsidiaries and are not subject to significant foreign currency exposures, as the majority are held in investments denominated in U.S. dollars as of September 30, 2021. These funds may create foreign currency transaction gains or losses, however, depending on the functional currency of the entity holding the cash. In addition, there are no significant restrictions that would preclude us from bringing these funds back to the U.S., aside from withholding taxes.

The following table represents a comparison of the net cash provided by operating activities, net cash used in investing activities, and net cash used in financing activities for the nine months ended September 30, 2021 and September 30, 2020:

(in millions)			Nine months ended
September 30, 2021												2021-2020
Cash Flow			2021						2020						Change						Percent
Net cash provided by operating activities			$	1,756.6					$	1,344.2					$	412.4					31		%
Net cash used in investing activities			(930.6)						(794.7)						(135.9)						17		%
Net cash used in financing activities			(578.7)						(50.9)						(527.8)						NM

Operating Activities

During the nine months ended September 30, 2021, net cash provided by operating activities was $1.8 billion, compared to $1.3 billion for the nine months ended September 30, 2020. Our results of operations, after non-cash adjustments to net earnings, contributed $1.9 billion to cash flows from operating activities during the nine months ended September 30, 2021, compared to $670.9 million as computed on the same basis for the prior year period. During the nine months ended September 30, 2021, we had an unfavorable working capital change of $173.9 million, compared to a favorable change of $673.3 million during the nine months ended September 30, 2020.

The change in working capital for the nine months ended September 30, 2021, was primarily driven by, an increase in accounts receivable of $221.7 million, an increase in inventories of $574.7 million and an increase in accounts payable and accrued expenses of $669.8 million. The increase in accounts receivables is primarily due to the increase in sales prices during 2021. The increase in inventories was primarily due to higher raw material costs and building inventory volumes, primarily in Brazil, as they prepare for their high season. The increase in accounts payable and accrued liabilities was primarily related to an increase in customer prepayments in Brazil and higher raw material costs.

Investing Activities

Net cash used in investing activities was $930.6 million for the nine months ended September 30, 2021, compared to $794.7 million for the same period a year ago. Capital expenditures increased to $925.8 million for the nine months ended September 30, 2021, compared to $785.8 million in the prior year period, primarily due to the timing of payments and an increase in expansion projects in the current year. In addition, in the prior year, we deferred certain projects until later in the year due to the Covid-19 outbreak.

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Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2021, was $578.7 million, compared to $50.9 million for the same period in the prior year. During the nine months ended September 30, 2021, we made payments on long-term debt of $594.7 million, which included the early redemption of our $450 million 3.75 percent senior notes that were due November 2021. We also paid dividends of $75.9 million and made repurchases of our common stock of $20.0 million. For the nine months ended September 30, 2021, we had net proceeds from structured accounts payable of $87 million, compared to net payments of $127 million in the prior year period. We also had net collections on behalf of the bank under our Receivable Purchasing Agreement of $47.5 million, which had not yet been remitted to them as of September 30, 2021.

Debt Instruments, Guarantees and Related Covenants

See Notes 12 and 18 to the Consolidated Financial Statements in our 10-K Report.

Financial Assurance Requirements

In addition to various operational and environmental regulations related to our Phosphates segment, we are subject to financial assurance requirements. In various jurisdictions in which we operate, particularly Florida and Louisiana, we are required to pass a financial strength test or provide credit support, typically in the form of surety bonds, letters of credit, certificates of deposit or trust funds. Further information regarding financial assurance requirements is included in Management’s Discussion and Analysis of Results of Operations and Financial Condition in our 10-K Report, under “EPA RCRA Initiative,” and in Note 7 to our Condensed Consolidated Financial Statements in this report.

Environmental, Health, Safety and Security Matters

Waters of the United States. On March 2, 2021, the 10th Circuit Court of Appeals determined that the district court abused its discretion when it granted the State of Colorado's request to stay the effective date of the Navigable Waters Protection Rule (the “NWPR”) in Colorado. In reversing and vacating the district court's decision, the court ruled that Colorado was not entitled to a preliminary injunction because it did not show it would suffer irreparable injury if the rule went into effect. As a result, the NWPR remains in effect in all states.

On June 10, 2021, EPA and the Corps of Engineers (the “Corps”) filed a “Motion to Remand to Agency” and supporting legal memorandum with the U.S. District Court for the District of Massachusetts in Conservation Law Foundation (CLF) v. EPA, et al. asking the court to remand the NWPR, so they can “commence a new rulemaking to revise or replace the rule.” The Agencies state they intend to initiate a new rulemaking process that restores the protections in place prior to the 2015 Waters of the United States (WOTUS) implementation. They propose developing a new rule that defines WOTUS, informed by a “robust” engagement process as well as the experience of implementing the pre-2015 rule and prior administrations’ NWPR.

On August 30, 2021, a federal judge in the U.S. District Court for Arizona issued an order vacating the prior administration’s NWPR, and remanded the rule back to EPA and the Corps. EPA is currently in the process of initiating a rulemaking to replace the NWPR, and it is unclear how this recent decision will affect that formal rulemaking effort. The U.S District Court ordered a reversion back to the pre-2015 standard.

On the same day, the EPA announced that, in light of the District Court’s vacating of the prior administration's NWPR, the EPA and Corps have halted implementation of the NWPR and are interpreting WOTUS consistent with the pre-2015 standard.

Off-Balance Sheet Arrangements and Obligations

Information regarding off-balance sheet arrangements and obligations is included in Management’s Discussion and Analysis of Results of Operations and Financial Condition in our 10-K Report and Note 15 to our Condensed Consolidated Financial Statements in this report.

Contingencies

Information regarding contingencies is hereby incorporated by reference to Note 16 to our Condensed Consolidated Financial Statements in this report.

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Forward-Looking Statements

Cautionary Statement Regarding Forward Looking Information

All statements, other than statements of historical fact, appearing in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include, among other things, statements about our expectations, beliefs, intentions or strategies for the future, including statements about proposed or pending future transactions or strategic plans, statements concerning our future operations, financial condition and prospects, statements regarding our expectations for capital expenditures, statements concerning our level of indebtedness and other information, and any statements of assumptions regarding any of the foregoing. In particular, forward-looking statements may include words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “potential”, “predict”, “project” or “should”. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this filing.

Factors that could cause reported results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:

• 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 novel coronavirus Covid-19 pandemic on the global economy and our business, suppliers, customers, employees and the communities in which we operate, as further described in Part II, Item 1A of our 10-K Report;

• the potential drop in oil demand/production and its impact on the availability and price of sulfur;

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

• changes in farmers’ application rates for crop nutrients;

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

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

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

• seasonality in our business that results in the need to carry significant amounts of inventory and seasonal peaks in working capital requirements, which 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 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;

• disruptions of our operations at any of our key production, distribution, 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;

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

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

• adverse weather 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;

• 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 or its existing or future 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 potash 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;

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

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

• difficulties in realizing benefits under our long-term natural gas based pricing ammonia supply agreement with CF 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.

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

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

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