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, 2022 (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, 2023 and March 31, 2022:

			Three months ended
			March 31,												2023-2022
(in millions, except per share data)			2023						2022						Change						Percent
Net sales			$	3,604.3					$	3,922.3					$	(318.0)					(8)		%
Cost of goods sold			2,933.9						2,483.2						450.7						18		%
Gross margin			670.4						1,439.1						(768.7)						(53)		%
Gross margin percentage			19		%				37		%
Selling, general and administrative expenses			127.7						132.4						(4.7)						(4)		%
Other operating (income) expense			(1.9)						50.9						(52.8)						NM
Operating earnings			544.6						1,255.8						(711.2)						(57)		%
Interest expense, net			(41.1)						(39.3)						(1.8)						5		%
Foreign currency transaction gain			51.4						310.7						(259.3)						(83)		%
Other income (expense)			(8.9)						0.2						(9.1)						NM
Earnings from consolidated companies before income taxes			546.0						1,527.4						(981.4)						(64)		%
Provision for income taxes			118.3						372.4						(254.1)						(68)		%
Earnings from consolidated companies			427.7						1,155.0						(727.3)						(63)		%
Equity in net earnings of nonconsolidated companies			31.3						30.7						0.6						2		%
Net earnings including noncontrolling interests			459.0						1,185.7						(726.7)						(61)		%
Less: Net earnings attributable to noncontrolling interests			24.2						3.7						20.5						NM
Net earnings attributable to Mosaic			$	434.8					$	1,182.0					$	(747.2)					(63)		%
Diluted net earnings per share attributable to Mosaic			$	1.28					$	3.19					$	(1.91)					(60)		%
Diluted weighted average number of shares outstanding			338.7						370.1

Overview of Consolidated Results for the three months ended March 31, 2023 and 2022

For the three months ended March 31, 2023, Mosaic had net income of $434.8 million, or $1.28 per diluted share, compared to net income of $1.2 billion, or $3.19 per diluted share, for the prior year period. Net sales for the three months ended March 31, 2023 decreased 8% compared to the same period of the prior year, driven by lower average selling prices, as discussed further below. Net income for the three months ended March 31, 2023 was also impacted by a lower foreign currency transaction gain which decreased 83% compared to 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, 2023, operating results in all of our segments were impacted by lower average sales prices compared to the prior year period. Global markets have softened compared to the prior year period, as buyers have delayed purchases in anticipation of lower prices. Average selling prices in 2022 were driven higher by tightness in global supply and demand. In addition, the Russian invasion of Ukraine in February 2022 resulted in instability in global commodity markets and significantly reduced the supply of fertilizer and agricultural commodities produced in those geographies, which contributed to rising fertilizer prices in the prior year period.

Our operating results for the three months ended March 31, 2023 were unfavorably impacted in our Phosphate segment compared to the prior year period due to lower average selling prices compared to the prior year period, driven by the factors described above. Higher raw material costs, primarily ammonia and blended rock, and higher conversion costs also had an unfavorable impact on operating results. Operating results in the current year period were positively impacted by higher

finished product sales volumes, as the prior year period was impacted by logistical constraints caused by low inventory levels, and longer rail cycle times.

Our operating results for the three months ended March 31, 2023 were unfavorably impacted in our Potash segment by lower average sales prices compared to the prior year period, driven by the factors discussed above. Current period operating results were favorably impacted by higher sales volumes compared to the prior year period. Our sales volumes were lower in the prior year period primarily due to longer rail cycle times in North America driven by weather conditions in Canada, and third-party labor issues.

Our operating results for the three months ended March 31, 2023 were unfavorably impacted in our Mosaic Fertilizantes by lower sales prices, which decreased globally compared to the same period in the prior year, as discussed above. Sales volumes of finished goods, including performance products, were higher in the current year period compared to the same period in the prior year, due to demand recovery. Sales volumes of other products, primarily gypsum and acids, were lower than the prior year period, driven by unfavorable weather, and sulfuric acid availability in the current year period.

Other Highlights

• On January 12, 2023, we completed the sale of the Streamsong Resort® (the "Resort") and the approximately 7,000 acres on which it sits for net proceeds of $158 million. The Resort is a destination resort and conference center, which we developed in an area of previously mined land as part of our long-term business strategy to maximize the value and utility of our extensive land holdings in Florida. In addition to a hotel and conference center, the Resort includes multiple golf courses, a clubhouse and ancillary facilities. The sale resulted in a gain of $57 million.

• On January 17, 2023, we purchased the other 50% interest of equity of Gulf Sulphur Services ("GSS"), which gives us full ownership and secures control of our sulfur supply chain in the Gulf of Mexico.

• On February 24, 2023, pursuant to existing stock repurchase authorizations, we entered into an accelerated share repurchase agreement (the “2023 ASR Agreement”) with a third-party financial institution to repurchase $300 million of our Common Stock. During the quarter ended March 31, 2023, we repurchased 8,690,936 shares of Common Stock in the open market for approximately $448.0 million. This includes 5,624,574 shares purchased under the 2023 ASR Agreement at an average purchase price of $53.34 per share.

• In March 2023, we paid a special dividend of $0.25 per share to our stockholders.

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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,												2023-2022
(in millions, except price per tonne or unit)			2023						2022						Change						Percent
Net sales:
North America			$	924.8					$	1,004.4					$	(79.6)					(8)		%
International			457.3						491.6						(34.3)						(7)		%
Total			1,382.1						1,496.0						(113.9)						(8)		%
Cost of goods sold			1,122.8						968.3						154.5						16		%
Gross margin			$	259.3					$	527.7					$	(268.4)					(51)
Gross margin as a percentage of net sales			19		%				35		%
Sales volumes(a) (in thousands of metric tonnes)
DAP/MAP			1,022						917						105						11		%
Performance and Other(b)			814						744						70						9		%
Total finished product tonnes			1,836						1,661						175						11		%
Rock			371						460						(89)						(19)		%
Total Phosphate Segment Tonnes(a)			2,207						2,121						86						4		%
Realized prices ($/tonne)
Average finished product selling price (destination)(c)			$	717					$	877					$	(160)					(18)		%
DAP selling price (fob plant)			$	660					$	785					$	(125)					(16)		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	605					$	532					$	73					14		%
Sulfur (long ton)			$	236					$	281					$	(45)					(16)		%
Blended rock (metric tonne)			$	77					$	61					$	16					26		%
Production volume (in thousands of metric tonnes) - North America			1,836						1,745						91						5		%

____________________________

(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, 2023 and March 31, 2022

The Phosphate segment’s net sales were $1.4 billion for the three months ended March 31, 2023, compared to $1.5 billion for the three months ended March 31, 2022. The decrease in net sales in the current year period was primarily due to lower average finished goods sales prices, which had an unfavorable impact of approximately $240 million compared to the prior year period. Net sales were also unfavorably impacted by approximately $15 million due to decreased sales of ammonia and sulfur. This was partially offset by higher finished product sales volumes in the current period, which had a favorable impact on net sales of approximately $140 million compared to the prior year period.

Our average finished product selling price decreased 18% to $717 per tonne for the three months ended March 31, 2023, compared to $877 per tonne in the prior year period, due to the factors discussed in the Overview.

The Phosphate segment’s sales volumes of finished products increased by 11% for the three months ended March 31, 2023, 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 decreased to $259.3 million for the three months ended March 31, 2023, from $527.7 million for the three months ended March 31, 2022. The decrease in gross margin in the current year period was primarily due to lower sales prices, which unfavorably impacted gross margin by approximately $240 million. Gross margin was also unfavorably impacted by approximately $40 million, due to increased conversion costs and higher maintenance and turnaround costs. Increased raw material prices in the current period, largely driven by blended rock and ammonia, unfavorably impacted gross margin by approximately $25 million. These impacts were partially offset by higher sales volumes, which had a favorable impact of approximately $50 million.

The average consumed price for ammonia for our North America operations increased 14% to $605 per tonne for the three months ended March 31, 2023, from $532 in the same period a year ago. The average consumed sulfur price for our North America operations decreased 16% to $236 per long ton for the three months ended March 31, 2023, from $281 in the same period a year ago. The purchase prices of these raw materials are driven by global supply and demand. The consumed ammonia and sulfur prices also include transportation, transformation and storage costs.

The average consumed cost of purchased and produced phosphate rock increased to $77 per tonne for the three months ended March 31, 2023, from $61 for the three months ended March 31, 2022, primarily due to an increase in processing costs and using more Miski Mayo rock in the current year period. For the three months ended March 31, 2023, our North America phosphate rock production remained steady at 2.1 million tonnes.

The Phosphate segment’s production of crop nutrient dry concentrates and animal feed ingredients increased 5% for the three months ended March 31, 2023 from the prior year period. Our operating rate for processed phosphate production increased to 74% for the three months ended March 31, 2023, from 70% for the same period in 2022.

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,												2023-2022
(in millions, except price per tonne or unit)			2023						2022						Change						Percent
Net sales:
North America			$	454.1					$	530.1					$	(76.0)					(14)		%
International			452.5						529.7						(77.2)						(15)		%
Total			906.6						1,059.8						(153.2)						(14)		%
Cost of goods sold			493.3						480.9						12.4						3		%
Gross margin			$	413.3					$	578.9					$	(165.6)					(29)		%
Gross margin as a percentage of net sales			46		%				55		%
Sales volume(a) (in thousands of metric tonnes)
MOP			1,696						1,532						164						11		%
Performance and Other(b)			214						260						(46)						(18)		%
Total Potash Segment Tonnes			1,910						1,792						118						7		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	475					$	591					$	(116)					(20)		%
MOP selling price (fob mine)			$	421					$	582					$	(161)					(28)		%
Production volume (in thousands of metric tonnes)			1,944						2,200						(256)						(12)		%

______________________________

(a) Includes intersegment sales volumes.

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

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Three months ended March 31, 2023 and March 31, 2022

The Potash segment’s net sales decreased to $0.9 billion for the three months ended March 31, 2023, compared to $1.1 billion in the same period a year ago. The decrease was due to lower selling prices, which had an unfavorable impact on net sales of approximately $230 million, compared to the same period in the prior year. This was partially offset by higher sales volumes compared to the prior year, which favorably impacted net sales by approximately $70 million.

Our average finished product selling price was $475 per tonne for the three months ended March 31, 2023, compared to $591 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 increased to 1.9 million tonnes for the three months ended March 31, 2023, compared to 1.8 million tonnes in the same period a year ago, due to the factors discussed in the Overview.

Gross margin for the Potash segment decreased to $413.3 million for the three months ended March 31, 2023, from $578.9 million in the same period of the prior year. The decrease in gross margin in the current year period is primarily due to a decrease in selling prices, which contributed approximately $230 million to gross margin, compared to the prior year period, and an increase in turnaround costs of approximately $10 million, compared to the prior year. Gross margin was also unfavorably impacted by increased product costs of approximately $10 million compared to the prior year period, which was driven by lower production volumes. The decreases were partially offset by $50 million due to higher sales volumes, and a $40 million reduction in Canadian resource taxes and royalties compared to the prior year, as discussed below.

We had expense of $120.8 million from Canadian resource taxes for the three months ended March 31, 2023, compared to $157.2 million in the same period a year ago. Canadian royalty expense decreased to $18.6 million for the three months ended March 31, 2023, compared to $27.0 million for the three months ended March 31, 2022. The fluctuations in Canadian resource taxes and royalties are a result of a decrease in our sales revenue and margins.

Our operating rate for potash production was 69% for the current year period, compared to 80% in the prior year period. The decreased operating rate reflects the temporary idling of our Colonsay, Saskatchewan mine during the quarter, due to market conditions. We expect to restart the mine in the second half of 2023.

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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,												2023-2022
(in millions, except price per tonne or unit)			2023						2022						Change						Percent
Net Sales			$	1,343.3					$	1,488.6					$	(145.3)					(10)		%
Cost of goods sold			1,344.4						1,269.3						75.1						6		%
Gross margin			$	(1.1)					$	219.3					$	(220.4)					NM
Gross margin as a percent of net sales			—		%				15		%
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil(a)			510						737						(227)						(31)		%
Potash produced in Brazil			44						46						(2)						(4)		%
Purchased nutrients for distribution			1,526						1,039						487						47		%
Total Mosaic Fertilizantes Segment Tonnes			2,080						1,822						258						14		%
Realized prices ($/tonne)
Average finished product selling price (destination)			$	646					$	817					$	(171)					(21)		%
Brazil MAP price (delivered price to third party)			$	669					$	882					$	(213)					(24)		%
Purchases ('000 tonnes)
DAP/MAP from Mosaic			146						102						44						43		%
MicroEssentials® from Mosaic			277						248						29						12		%
Potash from Mosaic/Canpotex			235						398						(163)						(41)		%
Average cost per unit consumed in cost of goods sold:
Ammonia (metric tonne)			$	1,150					$	1,145					$	5					0		%
Sulfur (long ton)			$	278					$	337					$	(59)					(18)		%
Blended rock (metric tonne)			$	124					$	105					$	19					18		%
Production volume (in thousands of metric tonnes)			859						989						(130)						(13)		%

______________________________

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

Three months ended March 31, 2023 and March 31, 2022

The Mosaic Fertilizantes segment’s net sales decreased to $1.3 billion for the three months ended March 31, 2023, from $1.5 billion in the same period a year ago. The decrease in net sales was due to lower finished product sales prices, which unfavorably impacted net sales by approximately $260 million, and lower sales volumes of other products, primarily gypsum and acids, which unfavorably impacted net sales by approximately $80 million. This was partially offset by higher finished goods sales volumes, which had a favorable impact of approximately $190 million.

Our average finished product selling price was $646 per tonne for the three months ended March 31, 2023, compared to $817 per tonne for the same period a year ago, due to the decrease in global sales prices as discussed in the Overview.

The Mosaic Fertilizantes segment’s sales volumes of finished products increased 14% for the three months ended March 31, 2023, compared to the same period a year ago. Sales volumes were impacted by an increase in market demand for fertilizer products in the current period.

Gross margin for the Mosaic Fertilizantes segment decreased to $(1.1) million for the three months ended March 31, 2023, from $219.3 million in the same period of the prior year. The decrease in gross margin was primarily due to an unfavorable impact of approximately $260 million related to the decrease in selling prices during the current year period, compared to the prior year

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period. Gross margin was also unfavorably impacted by approximately $30 million, due to lower sales volumes of other products, primarily gypsum and acids, driven by unfavorable weather, and sulfuric acid availability. Lower costs had a favorable impact of $90 million, driven by a decrease in product costs for our distribution business, and lower sulfur costs in our production business.

The average consumed price for ammonia for our Brazilian operations increased to $1,150 per tonne for the three months ended March 31, 2023, compared to $1,145 per tonne in the prior year period. The average consumed sulfur price for our Brazilian operations was $278 per long ton for the three months ended March 31, 2023, compared to $337 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 decreased 13% for the three months ended March 31, 2023, compared to the prior year period due to down time for plant maintenance. For the three months ended March 31, 2023, our phosphate operating rate decreased to 78%, compared to 92% in the same period of the prior year.

For the three months ended March 31, 2023, our Brazilian phosphate rock production decreased slightly to 0.86 million tonnes, from 0.93 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 18 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, and debt expenses. The prior year period also included the results of operations for the Streamsong Resort®.

For the three months ended March 31, 2023, gross margin for Corporate, Eliminations and Other was $(1.1) million, compared to $113.2 million for the same period in the prior year. Gross margin was unfavorably impacted by a net unrealized loss on derivatives of approximately $1 million in the current year period, compared to a net unrealized gain of approximately $100 million in the prior year period. Gross margin was also negatively impacted by approximately $100 million due to unfavorable product costs and inventory adjustments in our distribution operations, primarily in China. Sales in China and India collectively, resulted in revenue of $266.8 million and gross margin of $(10.8) million in the current year period, compared to revenue of $220.9 million and gross margin of $87.0 million in the prior year period. These changes were partially offset by the favorable impact of lower elimination of profit on intersegment sales in the current year period, which changed from the prior year period by approximately $97.2 million.

Other Income Statement Items

			Three months ended
			March 31,												2023-2022
(in millions)			2023						2022						Change						Percent
Selling, general and administrative expenses			$	127.7					$	132.4					$	(4.7)					(4)		%
Other operating (income) expense			(1.9)						50.9						(52.8)						NM
Interest expense			(50.2)						(43.9)						(6.3)						14		%
Interest income			9.1						4.6						4.5						98		%
Interest expense, net			(41.1)						(39.3)						(1.8)						5		%
Foreign currency transaction gain			51.4						310.7						(259.3)						(83)		%
Other income (expense)			(8.9)						0.2						(9.1)						NM
Provision for income taxes			118.3						372.4						(254.1)						(68)		%
Equity in net earnings of nonconsolidated companies			31.3						30.7						0.6						2		%

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2023 decreased $4.7 million compared to the same period of prior year, primarily due to lower incentive compensation costs which decreased by approximately $17 million in the current period compared to the prior year period. This was partially offset by higher costs of approximately $10 million in consulting and professional services related to executing on our strategic initiatives.

Other Operating (Income) Expense

For the three months ended March 31, 2023, we had other operating income of $1.9 million, compared to expense of $50.9 million for the same period of the prior year. The current year period includes a gain on the sale of the Resort of approximately $57 million.

Foreign Currency Transaction Gain

We recorded a foreign currency transaction gain of $51.4 million for the three months ended March 31, 2023 compared to $310.7 million for the same period in the prior year. For the three months ended March 31, 2023, the gain was the result of the effect of the weakening of the U.S. dollar relative to the Brazilian real on significant intercompany loans and U.S. dollar-denominated payables held by our Brazilian subsidiaries.

Other Income (Expense)

For the three months ended March 31, 2023, we had other expense of $8.9 million compared to income of $0.2 million for the same period in the prior year. The current year expense was primarily related to realized losses on the marketable securities held in the RCRA Trusts of approximately $8 million.

Equity in Net Earnings of Nonconsolidated Companies

For the three months ended March 31, 2023, we had equity in net earnings of nonconsolidated companies of $31.3 million compared to $30.7 million for the same period in the prior year. These results were primarily related to the operations of MWSPC.

Provision for Income Taxes

Three months ended						Effective Tax Rate						Provision for Income Taxes
March 31, 2023						21.7		%				$	118.3
March 31, 2022						24.4		%				$	372.4

Income tax expense was $118.3 million and the effective tax rate was 21.7% for the three months ended March 31, 2023.

For the three months ended March 31, 2023, discrete tax items recorded in tax expense resulted in a benefit of approximately $13.9 million. The net tax benefit consisted primarily of share-based excess benefit, true-up of estimates and other miscellaneous costs. In addition to items specific to the period, our income tax rate is impacted by the mix of earnings across the jurisdictions in which we operate, by a benefit associated with depletion, 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

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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 March 31, 2023, we had cash and cash equivalents of $464.8 million, short-term debt of $854.6 million, long-term debt, including current maturities, of approximately $3.4 billion, and stockholders’ equity of approximately $12.1 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 of our employees and reliability of our assets, investing to grow our business, either through organic growth or taking advantage of strategic opportunities, and returning excess cash to shareholders, including paying our dividend. During the three months ended March 31, 2023, we returned cash to shareholders through share repurchases of $456.0 million and cash dividends of $152.4 million, and invested $321.5 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, debt repayments and expected dividend payments, for at least 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, 2023, we had $2.49 billion available under our $2.50 billion committed revolving credit facility, approximately $475.0 million available under our uncommitted facilities and had $2.1 billion available under our $2.5 billion commercial paper program, that is backed by, and reduces availability under, the revolving credit facility. 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, 2023.

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, 2023. 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, 2023 and March 31, 2022:

(in millions)			Three months ended
March 31,												2023-2022
Cash Flow			2023						2022						Change						Percent
Net cash provided by operating activities			$	149.0					$	506.2					$	(357.2)					(71)		%
Net cash used in investing activities			(221.4)						(297.2)						75.8						(26)		%
Net cash used in financing activities			(209.0)						(125.0)						(84.0)						67		%

Operating Activities

During the three months ended March 31, 2023, net cash provided by operating activities was $149.0 million, compared to $506.2 million for the three months ended March 31, 2022. Our results of operations, after non-cash adjustments to net

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earnings, contributed $636.3 million to cash flows from operating activities during the three months ended March 31, 2023, compared to $1.1 billion as computed on the same basis for the prior year period. During the three months ended March 31, 2023, we had an unfavorable change in assets and liabilities of $487.3 million, compared to an unfavorable change of $639.0 million during the three months ended March 31, 2022.

The change in assets and liabilities for the three months ended March 31, 2023, was primarily driven by a decrease in accounts payable and accrued expenses of $841.6 million, partially offset by favorable impacts from decreases in accounts receivable of $310.7 million and inventories of $241.2 million. The decrease in accounts payable and accrued liabilities was primarily related to a decrease in raw material purchase prices, a decrease in customer prepayments in Brazil, payment of taxes and the payment of incentive compensation related to 2022. The decrease in accounts receivable was primarily related to lower selling prices at the end of the quarter compared to the end of the prior year. The decrease in inventories was primarily due to lower raw material costs in our Phosphate and Mosaic Fertilizantes segments and lower inventory volumes in North America, due to seasonality.

Investing Activities

Net cash used in investing activities was $221.4 million for the three months ended March 31, 2023 compared to $297.2 million for the same period a year ago. We had capital expenditures of $321.5 million for the three months ended March 31, 2023, compared to $290.5 million in the prior year period. During the three months ended March 31, 2023, we completed the sale of the Resort for net proceeds of $158.4 million. We also purchased the other 50% equity of GSS for $41.0 million. GSS is now wholly owned by Mosaic.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2023, was $209.0 million, compared to $125.0 million for the same period in the prior year. During the three months ended March 31, 2023, we made repurchases of our Common Stock at an aggregate cost of $456.0 million and paid dividends of $152.4 million. We also made payments on our structured accounts payable arrangements of $211.4 million and payments on long-term debt of $15.0 million. We received net proceeds from short term debt of $228.6 million and proceeds of $400.8 million under our inventory financing arrangement.

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 8 to our Condensed Consolidated Financial Statements in this report.

Environmental, Health, Safety and Security Matters

Federal Initiatives to Define “Waters of the United States.” The 1972 amendments to the Clean Water Act (“CWA”) established federal jurisdiction over “navigable waters,” defined in the Act as “waters of the United States” and often abbreviated as “WOTUS.” As it relates to Mosaic’s operations and facilities, the scope of the term WOTUS dictates legal requirements for our National Pollutant Discharge Elimination System wastewater discharge permits and for impacts to surface waters and wetlands associated with our phosphate mining operations. A broad definition of WOTUS, and thus the scope of federal jurisdiction, increases the time required to identify wetlands and waterways subject to federal regulatory and permitting requirements, and the amount and type of mitigation required to compensate for impacts to jurisdictional WOTUS caused by our mining operations.

The current regulatory definition of WOTUS was promulgated on April 21, 2020, by the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers and was designated the “Navigable Waters Protection Rule” (“NWPR”). The NWPR was intended to provide clarity, predictability and consistency so that the regulated community

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could better understand where the CWA applies and where it does not. On June 9, 2021, EPA announced its plans to repeal and replace the NWPR, and in December 2021 issued a proposed regulation to revise the WOTUS definition and replace the NWPR.

On December 30, 2022, EPA and the Corps promulgated a revised, expanded definition of the term WOTUS (the "2022 WOTUS Rule"), which became effective on March 20, 2023. The 2022 WOTUS Rule asserts a broader geographic scope of federal jurisdiction than either the 2020 NWPR or any previous WOTUS regulatory definition. Two separate legal challenges to the 2022 WOTUS Rule have been filed in the U.S. District Court for the Southern District of Texas; one lawsuit was brought by the State of Texas, and the second by agricultural interests. A third lawsuit was filed in the U.S. District Court for District of North Dakota by twenty-four states, several trade associations and tribal entities.

On April 12, 2023, the U.S. District Court for North Dakota granted a preliminary injunction of the Biden administration's 2022 WOTUS Rule. The Court’s Order and Preliminary Injunction prevents the 2022 WOTUS Rule from being implemented in 24 states, including Florida. The case is West Virginia, State of et al v. U.S. Environmental Protection Agency et al., Case NO. 3:23-cv-0032. The State of Florida and 23 other states were plaintiffs in the suit, as were a number of trade associations and several tribes who intervened in the case. The broader decision by the North Dakota District followed an earlier decision in March in the U.S. District Court for the Southern District of Texas preliminarily enjoining the 2022 WOTUS Rule in Texas and Idaho.

Additionally, it is anticipated that EPA and the Corps will be revising the 2022 WOTUS Rule after the U.S. Supreme Court decides Sackett v. EPA. The Sackett case is expected to clarify Clean Water Act jurisdiction and oral argument was held on October 3, 2022. A final decision by the Court that interprets the constitutional scope of the term WOTUS is anticipated to be issued during the second quarter of 2023.

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 17 to our Condensed Consolidated Financial Statements in this report.

Contingencies

Information regarding contingencies is hereby incorporated by reference to Note 17 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;

• 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;

• the continued 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;

• a 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 Phosphates and Mosaic Fertilizantes segment operations;

• 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;

• economic and market conditions, including supply chain challenges and increased costs and delays caused by transportation and labor shortages;

• 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;

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• shortages or other unavailability of trucks, railcars, tugs, barges and ships for carrying our products and raw materials;

• the effects of and change in trade, monetary, environmental, tax and fiscal policies, laws and regulations;

• foreign exchange rates and fluctuations in those rates;

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

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

• adverse weather and climate 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 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 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, 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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