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, 2021 (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.”

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Results of Operations

The following table shows the results of operations for the three months ended March 31, 2022 and March 31, 2021:

			Three months ended
			March 31,												2022-2021
(in millions, except per share data)			2022						2021						Change						Percent
Net sales			$	3,922.3					$	2,297.1					$	1,625.2					71		%
Cost of goods sold			2,483.2						1,862.2						621.0						33		%
Gross margin			1,439.1						434.9						1,004.2						NM
Gross margin percentage			37		%				19		%
Selling, general and administrative expenses			132.4						101.7						30.7						30		%
Other operating expense			50.9						20.0						30.9						155		%
Operating earnings			1,255.8						313.2						942.6						NM
Interest expense, net			(39.3)						(45.0)						5.7						(13)		%
Foreign currency transaction gain (loss)			310.7						(45.8)						356.5						NM
Other income			0.2						3.0						(2.8)						(93)		%
Earnings from consolidated companies before income taxes			1,527.4						225.4						1,302.0						NM
Provision for income taxes			372.4						59.7						312.7						NM
Earnings from consolidated companies			1,155.0						165.7						989.3						NM
Equity in net earnings (loss) of nonconsolidated companies			30.7						(7.5)						38.2						NM
Net earnings including noncontrolling interests			1,185.7						158.2						1,027.5						NM
Less: Net earnings attributable to noncontrolling interests			3.7						1.5						2.2						147		%
Net earnings attributable to Mosaic			$	1,182.0					$	156.7					$	1,025.3					NM
Diluted net earnings per share attributable to Mosaic			$	3.19					$	0.41					$	2.78					NM
Diluted weighted average number of shares outstanding			370.1						382.8

Overview of Consolidated Results for the three months ended March 31, 2022 and 2021

For the three months ended March 31, 2022, Mosaic had net income of $1.2 billion, or $3.19 per diluted share, compared to net income of $0.2 billion, or $0.41 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.

For the three months ended March 31, 2022, operating results in all of our segments benefited from higher average sales prices compared to the prior year period. Average selling prices rose throughout 2021 and into 2022, driven by tightness in global supply and demand and improved grain prices. In addition, the Russian invasion of Ukraine in February 2022 has resulted in instability in global commodities markets and significantly reduced the physical supply of fertilizer and agricultural commodities produced in those geographies, which has contributed to rising fertilizer prices globally.

Our operating results for the three months ended March 31, 2022 were favorably impacted in our Phosphate segment by significantly higher average selling prices than the prior year period, driven by the factors described above. 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 lower sales volumes. Sales volumes were lower due to low inventory levels and longer rail cycle times in North America that were primarily driven by adverse weather conditions and third-party labor issues.

Our operating results during the three months ended March 31, 2022 were favorably impacted in our Potash segment by higher average sales prices compared to the prior year period as discussed above. Current period operating results were unfavorably impacted by lower sales volumes. Similar to Phosphate, the lower sales volumes were primarily caused by logistical constraints, resulting in longer rail cycle times in North America driven by weather conditions in Canada and third-party labor issues.

For the three months ended March 31, 2022, our operating results were favorably impacted in our Mosaic Fertilizantes segment. Sales prices increased compared to the same period in the prior year as discussed above. The favorable results were partially offset by lower sales volumes. The lower sales volumes were primarily due to adverse climate conditions in certain areas of Brazil, inflationary pressure on production costs 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 positively impacted by a total of $371 million pre-tax, or $0.78 per diluted share, related to the following notable items:

• Foreign currency transaction gain of $311 million, or $0.62 per diluted share

• Unrealized gain on derivatives of $100 million, or $0.21 per diluted share

• Discrete income tax benefit of $9 million, or $0.03 per diluted share

• Functional currency impact in cost of goods sold of $18 million, or $(0.03) per diluted share

• Other operating expenses of $13 million, or $(0.03) per diluted share, related to maintaining closed and indefinitely idled facilities in Florida, and fixed asset write-offs

• Asset retirement obligation costs of $9 million, or $(0.02) per diluted share, related to upwards revisions in the estimated costs of our asset retirement obligations for closed facilities

Other Highlights

• On February 24, 2022, pursuant to existing stock repurchase authorizations, we entered into an accelerated share repurchase (“A****SR”) agreement with a third-party financial institution to repurchase $400 million of our Common Stock. During the quarter ended March 31, 2022, we repurchased 7,589,664 shares of Common Stock in the open market under the 2021 Repurchase Program for approximately $422.1 million. This includes 7,056,229 shares we purchased under the ASR agreement. In the second quarter of 2022, the ASR agreement was completed and we paid the financial institution an additional $54.2 million, bringing the total amount paid by us under the ASR to $454.2 million, for an average purchase price of $64.37 per share.

• In the first quarter of 2022, our Board of Directors approved the establishment of a new $1 billion share repurchase authorization, which will go into effect following completion of the current program.

• Our Board of Directors approved a regular dividend increase to $0.60 per share annually from $0.45, beginning with the second quarter of 2022.

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Phosphate Net Sales and Gross Margin

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

			Three months ended
			March 31,												2022-2021
(in millions, except price per tonne or unit)			2022						2021						Change						Percent
Net sales:
North America			$	1,004.4					$	725.7					$	278.7					38		%
International			491.6						275.3						216.3						79		%
Total			1,496.0						1,001.0						495.0						49		%
Cost of goods sold			968.3						828.4						139.9						17		%
Gross margin			$	527.7					$	172.6					$	355.1					NM
Gross margin as a percentage of net sales			35		%				17		%
Sales volumes(a) (in thousands of metric tonnes)
DAP/MAP			917						1,210						(293)						(24)		%
Performance and Other(b)			744						852						(108)						(13)		%
Total finished product tonnes			1,661						2,062						(401)						(19)		%
Rock			460						265						195						74		%
Total Phosphate Segment Tonnes(a)			2,121						2,327						(206)						(9)		%
Realized prices ($/tonne)
Average finished product selling price (destination)(c)			$	877					$	477					$	400					84		%
DAP selling price (fob plant)			$	785					$	426					$	359					84		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	532					$	316					$	216					68		%
Sulfur (long ton)			$	281					$	119					$	162					136		%
Blended rock (metric tonne)			$	61					$	61					$	—					0		%
Production volume (in thousands of metric tonnes) - North America			1,745						1,911						(166)						(9)		%

____________________________

(a) Includes intersegment sales volumes.

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

(c) Excludes sales revenue and tonnes associated with rock sales.

Three months ended March 31, 2022 and March 31, 2021

The Phosphate segment’s net sales were $1.5 billion for the three months ended March 31, 2022, compared to $1.0 billion for the three months ended March 31, 2021. The increase in net sales in the current year period was primarily due to favorable sales prices, which had an impact of approximately $600 million compared to the prior year period. Increased sales of other products, primarily ammonia and sulfur, favorably impacted net sales by approximately $60 million. This was partially offset by lower phosphate sales volumes, which had an unfavorable impact on net sales of approximately $160 million compared to the prior year period.

Our average finished product selling price increased 84% to $877 per tonne for the three months ended March 31, 2022, compared to $477 per tonne in the prior year period, due to the factors discussed in the Overview.

The Phosphate segment’s sales volumes of finished products decreased by 19% for the three months ended March 31, 2022, compared to the same period in the prior year, due to the factors discussed in the Overview.

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Gross margin for the Phosphate segment increased to $527.7 million for the three months ended March 31, 2022, from $172.6 million for the three months ended March 31, 2021. 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 $590 million, increased sales of sulfur and ammonia of approximately $30 million and increased margin on Miski Mayo sales of approximately $10 million, compared to the prior year period. This was partially offset by an unfavorable impact of approximately $160 million from increased raw material prices, largely driven by sulfur and ammonia. Lower sales volumes unfavorably impacted gross margin by approximately $60 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 increased conversion costs which were caused by the composition of rock and higher maintenance costs.

The average consumed price for ammonia for our North America operations increased to $532 per tonne for the three months ended March 31, 2022, from $316 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. The average consumed sulfur price for our North America operations increased by more than 100% to $281 per long ton for the three months ended March 31, 2022, from $119 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 was $61 per tonne for the three months ended March 31, 2022, and March 31, 2021. For the three months ended March 31, 2022, our North America phosphate rock production decreased to 2.1 million tonnes from 3.0 million tonnes during the same period of the prior year, due to geology of rock and operational challenges.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients decreased to 1.7 million tonnes for the three months ended March 31, 2022, compared to 1.9 million for the three months ended March 31, 2021. Our operating rate for processed phosphate production decreased to 70% for the three months ended March 31, 2022, from 77% for the same period in 2021.

Potash Net Sales and Gross Margin

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

			Three months ended
			March 31,												2022-2021
(in millions, except price per tonne or unit)			2022						2021						Change						Percent
Net sales:
North America			$	530.1					$	313.9					$	216.2					69		%
International			529.7						163.5						366.2						NM
Total			1,059.8						477.4						582.4						122		%
Cost of goods sold			480.9						337.2						143.7						43		%
Gross margin			$	578.9					$	140.2					$	438.7					NM
Gross margin as a percentage of net sales			55		%				29		%
Sales volume(a) (in thousands of metric tonnes)
MOP			1,532						1,747						(215)						(12)		%
Performance and Other(b)			260						233						27						12		%
Total Potash Segment Tonnes			1,792						1,980						(188)						(9)		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	591					$	241					$	350					145		%
MOP selling price (fob mine)			$	582					$	200					$	382					191		%
Production volume (in thousands of metric tonnes)			2,200						2,285						(85)						(4)		%

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______________________________

(a) Includes intersegment sales volumes.

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

Three months ended March 31, 2022 and March 31, 2021

The Potash segment’s net sales increased to $1,059.8 million for the three months ended March 31, 2022, compared to $477.4 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 $620 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 $40 million.

Our average finished product selling price was $591 per tonne for the three months ended March 31, 2022, compared to $241 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 March 31, 2022, compared to 2.0 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 $578.9 million for the three months ended March 31, 2022, from $140.2 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 $620 million to gross margin, compared to the prior year period. This was partially offset by an unfavorable impact of approximately $20 million due to lower sales volumes in the current year period. In addition, the current year period was unfavorably impacted by higher Canadian resource taxes and royalties, as discussed below. Gross margin was also unfavorably impacted by higher idle costs and other plant spending, due to maintenance and repairs, of approximately $20 million, compared to the prior year period.

We had expense of $157.2 million from Canadian resource taxes for the three months ended March 31, 2022, compared to $35.0 million in the same period a year ago. Canadian royalty expense increased to $27.0 million for the three months ended March 31, 2022, compared to $8.5 million for the three months ended March 31, 2021. The fluctuations in Canadian resource taxes and royalties are a result of an increase in our 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 March 31, 2022, compared to $23 million in brine inflow management expenses, including depreciation on brine assets, during the three months ended March 31, 2021.

Our operating rate for potash production was 80% for the current year period, compared to 94% 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 and forced containment at our Belle Plaine and Colonsay mines, due to logistical challenges caused by rail cycle times. Production is expected to increase during the remainder of 2022, as the K3 shaft at our Esterhazy mine reached full operational capacity in early April 2022 and as containment is alleviated at our Belle Plaine and Colonsay mines.

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Mosaic Fertilizantes Net Sales and Gross Margin

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

			Three months ended
			March 31,												2022-2021
(in millions, except price per tonne or unit)			2022						2021						Change						Percent
Net Sales			$	1,488.6					$	763.4					$	725.2					95		%
Cost of goods sold			1,269.3						660.3						609.0						92		%
Gross margin			$	219.3					$	103.1					$	116.2					113		%
Gross margin as a percent of net sales			15		%				14		%
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil(a)			737						536						201						38		%
Potash produced in Brazil			46						63						(17)						(27)		%
Purchased nutrients for distribution			1,039						1,465						(426)						(29)		%
Total Mosaic Fertilizantes Segment Tonnes			1,822						2,064						(242)						(12)		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	817					$	370					$	447					121		%
Brazil MAP price (delivered price to third party)			$	882					$	421					$	461					110		%
Purchases ('000 tonnes)
DAP/MAP from Mosaic			102						64						38						59		%
MicroEssentials® from Mosaic			248						203						45						22		%
Potash from Mosaic/Canpotex			398						489						(91)						(19)		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	1,145					$	381					$	764					201		%
Sulfur (long ton)			$	337					$	124					$	213					172		%
Blended rock (metric tonne)			$	105					$	73					$	32					44		%
Production volume (in thousands of metric tonnes)			989						885						104						12		%

______________________________

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

Three months ended March 31, 2022 and March 31, 2021

The Mosaic Fertilizantes segment’s net sales increased to $1.5 billion for the three months ended March 31, 2022, from $0.8 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 $690 million. This was partially offset by lower finished goods sales volumes, which had an unfavorable impact of approximately $80 million. Net sales were also favorably impacted by increased sales prices and volumes of other products, primarily gypsum, magnetite and sulfuric acid, of approximately $110 million.

Our average finished product selling price was $817 per tonne for the three months ended March 31, 2022, compared to $370 per tonne for the same period a year ago, due to the increase in global sales prices as discussed in the Overview.

The Mosaic Fertilizantes segment’s sales volumes of finished products decreased 12% for the three months ended March 31, 2022, compared to the same period a year ago. Sales volumes were impacted by lower demand primarily caused by adverse weather conditions in certain areas of Brazil.

Gross margin for the Mosaic Fertilizantes segment increased to $219.3 million for the three months ended March 31, 2022, from $103.1 million in the same period of the prior year. The increase in gross margin was primarily due to a favorable impact

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of approximately $690 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 sulfuric acid, also favorably impacted gross margin by approximately $30 million. An increase in product costs, primarily material purchases by our distribution business, and increases in other production costs had an unfavorable impact on gross margin of approximately $590 million, compared to the prior year period. Lower finished goods sales volumes also unfavorably impacted gross margin by approximately $10 million compared to the prior year period.

The average consumed price for ammonia for our Brazilian operations increased 201% to $1,145 per tonne for the three months ended March 31, 2022, compared to $381 per tonne in the prior year period. The average consumed sulfur price for our Brazilian operations was $337 per long ton for the three months ended March 31, 2022, compared to $124 per long ton in the prior year period. The purchase prices of ammonia and sulfur are driven by global supply and demand, and also include transportation, transformation and storage costs.

The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates and animal feed ingredients increased 12% for the three months ended March 31, 2022, compared to the prior year period. For the three months ended March 31, 2022, our phosphate operating rate increased to 92%, compared to 82% in the same period of the prior year. Current year production was favorably impacted by stable operating conditions.

For the three months ended March 31, 2022, our Brazilian phosphate rock production decreased slightly to 0.9 million tonnes, from 1.0 million tonnes for 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 March 31, 2022, gross margin for Corporate, Eliminations and Other was $113.2 million, compared to $19.0 million for the same period in the prior year. Gross margin was favorably impacted by a net unrealized gain of $99.8 million in the current year period, primarily on foreign currency derivatives, compared to a net unrealized loss of $8.1 million in the prior year period. Gross margin was also positively impacted by distribution operations in China and India, which had revenue of $220.9 million and gross margin of $87.0 million in the current year period, compared to revenue of $159.6 million and gross margin of $30.3 million in the prior year period. These impacts were partially offset by higher elimination of profit on intersegment sales in the current year period, which changed from the prior year period by approximately $73.5 million.

Other Income Statement Items

			Three months ended
			March 31,												2022-2021
(in millions)			2022						2021						Change						Percent
Selling, general and administrative expenses			$	132.4					$	101.7					$	30.7					30		%
Other operating expense			50.9						20.0						30.9						155		%
Interest expense			(43.9)						(49.4)						5.5						(11)		%
Interest income			4.6						4.4						0.2						5		%
Interest expense, net			(39.3)						(45.0)						5.7						(13)		%
Foreign currency transaction gain (loss)			310.7						(45.8)						356.5						NM
Other income			0.2						3.0						(2.8)						(93)		%
Provision for income taxes			372.4						59.7						312.7						NM
Equity in net earnings (loss) of nonconsolidated companies			30.7						(7.5)						38.2						NM

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Selling, General and Administrative Expenses

Selling, general and administrative expenses were $132.4 million for the three months ended March 31, 2022, compared to $101.7 million in the same period of the prior year. The increase was due to approximately $20 million of share based payments in the current year period, and approximately $10 million in other costs, primarily related to consulting and professional services related to executing on our strategic initiatives.

Other Operating Expense

For the three months ended March 31, 2022, we had other operating expenses of $50.9 million, compared to $20.0 million for the same period in the prior year. The three months ended March 31, 2022 included an increase of approximately $9 million related to revisions in estimated closure costs for our asset retirement obligations at our closed facilities and an increase of approximately $10 million related to environmental reserves compared to the prior year period . The current year period also included a loss on fixed asset disposals of approximately $11 million.

Foreign Currency Transaction Gain (Loss)

We recorded foreign currency transaction gains of $310.7 million for the three months ended March 31, 2022, compared to a loss of $45.8 million for the three months ended March 31, 2021. For the three months ended March 31, 2022, the gain was the result of the effect of the weakening of the U.S. dollar relative to the Brazilian real on U.S. dollar-denominated payables held by our Brazilian subsidiaries and on significant intercompany loans.

Equity in Net Earnings (Loss) of Nonconsolidated Companies

For the three months ended March 31, 2022, we had equity in net earnings of nonconsolidated companies of $30.7 million compared to equity in net loss of nonconsolidated companies of $7.5 million for the same period in the prior year. The current year gain was primarily related to the operations of MWSPC, which were favorably impacted by higher phosphate selling prices, and the continued ramp-up of its operations.

Provision for (Benefit from) Income Taxes

Three months ended						Effective Tax Rate						Provision for (Benefit from) Income Taxes
March 31, 2022						24.4		%				$	372.4
March 31, 2021						26.5		%				$	59.7

Income tax expense was $372.4 million and the effective tax rate was 24.4% for the three months ended March 31, 2022.

For the three months ended March 31, 2022, discrete tax expense was a benefit of approximately $9.0 million. This consisted primarily of a share-based excess benefit, which was partially offset by changes in valuation allowances 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, a benefit associated with non-U.S. incentives, 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.

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.

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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 March 31, 2022, we had cash and cash equivalents of $0.9 billion, short-term debt of $480.5 million, long-term debt, including current maturities, of approximately $4.0 billion, and stockholders’ equity of approximately $11.8 billion. We have a target liquidity buffer of up to $3.0 billion, including cash and available committed and uncommitted credit lines. 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 advantage of strategic opportunities, and returning excess cash to shareholders, including paying our dividend. During the three months ended March 31, 2022, we invested $290.5 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 March 31, 2022, we had $2.49 billion available under our $2.50 billion committed revolving credit facility and approximately $200 million available under our $1.08 billion uncommitted facilities. Our credit facilities, including the revolving credit facility, 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 March 31, 2022.

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 March 31, 2022. 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 or provided by financing activities for the three months ended March 31, 2022 and March 31, 2021:

(in millions)			Three months ended
March 31, 2022												2022-2021
Cash Flow			2022						2021						Change						Percent
Net cash provided by operating activities			$	506.2					$	318.8					$	187.4					59		%
Net cash used in investing activities			(297.2)						(308.5)						11.3						(4)		%
Net cash (used in) provided by financing activities			(125.0)						121.7						(246.7)						NM

Operating Activities

During the three months ended March 31, 2022, net cash provided by operating activities was $506.2 million, compared to $318.8 million for the three months ended March 31, 2021. Our results of operations, after non-cash adjustments to net earnings, contributed $1,145.2 million to cash flows from operating activities during the three months ended March 31, 2022, compared to $401.8 million as computed on the same basis for the prior year period. During the three months ended March 31, 2022, we had an unfavorable working capital change of $639 million, compared to an unfavorable change of $83.0 million during the three months ended March 31, 2021.

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The change in working capital for the three months ended March 31, 2022, was primarily driven by a decrease in accounts payable and accrued expenses of $296.9 million and an increase in inventories of $281.6 million. The decrease in accounts payable and accrued liabilities was primarily related to the timing of payments for inventory purchases in Mosaic Fertilizantes partially offset by an increase in customer prepayments in Brazil. The increase in inventories was primarily due to higher raw material costs in Phosphate and Mosaic Fertilizantes and building inventory volumes, primarily in Brazil, as they prepare for their high season.

Investing Activities

Net cash used in investing activities was $297.2 million for the three months ended March 31, 2022, compared to $308.5 million for the same period a year ago. We had capital expenditures of $290.5 million for the three months ended March 31, 2022, compared to $288.6 million in the prior year period.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2022, was $125.0 million, compared to net cash provided by financing activities of $121.7 million for the same period in the prior year. During the three months ended March 31, 2022, we made repurchases of our Common Stock of $422.1 million and paid dividends of $40.6 million. We also made payments on long-term debt of $14.1 million. We received net proceeds from short-term borrowings of $171.1 million, and had net proceeds from structured accounts payable arrangements of $101.1 million. In addition, we had net collections on behalf of the bank under our Receivable Purchasing Agreement of $71.3 million, which had not yet been remitted to them as of March 31, 2022.

Debt Instruments, Guarantees and Related Covenants

See Notes 10 and 16 to the Consolidated Financial Statements in our 10-K Report.

Financial Assurance Requirements

In addition to various operational and environmental regulations related to our Phosphate 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.

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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 the 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 16 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:

• 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 I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021;

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

• 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 members of Canpotex to prove the production capacity of potash expansion projects, through proving runs or otherwise;

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

• 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;

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• 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;

• 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;

• 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 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;

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• terrorism, armed conflict 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;

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

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

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

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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