THE MOSAIC COMPANY 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 ofThe Mosaic Company filed with theSecurities and Exchange Commission for the year endedDecember 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." 28
--------------------------------------------------------------------------------
Table of Contents Results of Operations
The following table shows the results of operations for the three and six months
ended
Three months ended Six months ended
June 30, 2022-2021 June 30, 2022-2021
(in millions, except per share
data) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales $ 5,373.1 $ 2,800.7 $ 2,572.4 92 % $ 9,295.4 $ 5,097.8 $ 4,197.6 82 %
Cost of goods sold 3,526.8 2,048.4 1,478.4 72 % 6,010.0 3,910.6 2,099.4 54 %
Gross margin 1,846.3 752.3 1,094.0 145 % 3,285.4 1,187.2 2,098.2 177 %
Gross margin percentage 34 % 27 % 35 % 23 %
Selling, general and
administrative expenses 108.2 107.6 0.6 1 % 240.6 209.3 31.3 15 %
Mine closure costs - 158.1 (158.1) NM - 158.1 (158.1) NM
Other operating expense 63.9 2.6 61.3 NM 114.8 22.6 92.2 NM
Operating earnings 1,674.2 484.0 1,190.2 NM 2,930.0 797.2 2,132.8 NM
Interest expense, net (34.1) (37.3) 3.2 (9) % (73.4) (82.3) 8.9 (11) %
Foreign currency transaction gain
(loss) (227.2) 111.1 (338.3) NM 83.5 65.3 18.2 28 %
Other income (expense) (35.7) 1.4 (37.1) NM (35.5) 4.4 (39.9) NM
Earnings from consolidated
companies before income taxes 1,377.2 559.2 818.0 146 % 2,904.6 784.6 2,120.0 NM
Provision for income taxes 369.3 115.9 253.4 NM 741.7 175.6 566.1 NM
Earnings from consolidated
companies 1,007.9 443.3 564.6 127 % 2,162.9 609.0 1,553.9 NM
Equity in net earnings (loss) of
nonconsolidated companies 35.9 (4.5) 40.4 NM 66.6 (12.0) 78.6 NM
Net earnings including
noncontrolling interests 1,043.8 438.8 605.0 138 % 2,229.5 597.0 1,632.5 NM
Less: Net earnings attributable to
noncontrolling interests 7.9 1.6 6.3 NM 11.6 3.1 8.5 NM
Net earnings attributable to
Mosaic $ 1,035.9 $ 437.2 $ 598.7 137 % $ 2,217.9 $ 593.9 $ 1,624.0 NM
Diluted net earnings per share
attributable to Mosaic $ 2.85 $ 1.14 $ 1.71 150 % $ 6.05 $ 1.55 $ 4.50 NM
Diluted weighted average number of
shares outstanding 363.1 383.3 366.5 383.0
Overview of Consolidated Results for the three months ended
For the three months endedJune 30, 2022 , Mosaic had net income of$1.0 billion , or$2.85 per diluted share, compared to net income of$0.4 billion , or$1.14 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 endedJune 30, 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 the first half of 2022, driven by tightness in global supply and demand and improved grain prices. The Russian invasion ofUkraine inFebruary 2022 has resulted in instability in global commodities markets and significantly reduced the physical supply of fertilizer exported byBelarus and agricultural commodities produced in those geographies, which has contributed to rising fertilizer prices globally. In addition, Chinese export restrictions on phosphates have also impacted the global supply of fertilizer and contributed to tightening in the market. 29 -------------------------------------------------------------------------------- Our operating results for the three months endedJune 30, 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 also unfavorably impacted by slightly lower sales volumes. Sales volumes were lower due to a condensed spring season caused by adverse weather and customers deferring purchases inNorth America . Our operating results during the three months endedJune 30, 2022 were favorably impacted in our Potash segment by higher average sales prices compared to the prior year period driven by the factors discussed above. Current period operating results were unfavorably impacted by slightly lower sales volumes. Similar to Phosphate, the lower sales volumes were primarily caused by a condensed spring season caused by adverse weather and customers deferring purchases inNorth America . For the three months endedJune 30, 2022 , our operating results were favorably impacted in our Mosaic Fertilizantes segment. Sales prices increased globally compared to the same period in the prior year as discussed above. The favorable results were partially offset by increased product costs, primarily material purchases by our distribution business, inflationary pressure on production costs and higher raw materials costs, as global prices of sulfur and ammonia increased from the prior year period. Sales volumes were also slightly lower in the current year period compared to the same period in the prior year. In addition to the items noted above, our current period results were impacted by a total of$364 million pre-tax, or$(0.79) per diluted share, related to the following notable items:
•Foreign currency transaction loss of
•Unrealized loss on derivatives of
•Other operating expense of$30 million , or$(0.06) per diluted share, related to upward revisions in environmental reserves and$9 million , or$(0.03) per diluted share, related to maintaining closed and indefinitely idled facilities inFlorida •Other non-operating expense of$26 million , or$(0.05) per diluted share, related to a realized gain on RCRA trust securities and$12 million , or$(0.02) per diluted share, related to the write-down of an investment
•Discrete income tax expense of
•Asset retirement obligation ("ARO") costs of
•Inventory write-downs of
•Other operating income of
Other Highlights •During the three months endedJune 30, 2022 , we repurchased 10,144,320 shares of Common Stock in the open market under the 2021 and 2022 Repurchase Programs for approximately$558.0 million for an average purchase price of$55.00 per share. We also paid$54.2 million upon completion of the ASR agreement entered in the first quarter of 2022.
Subsequent to quarter end, our Board of Directors approved the establishment of
a new
Overview of Consolidated Results for the six months ended
Net earnings attributable to Mosaic for the six months endedJune 30, 2022 was$2.2 billion , or$6.05 per diluted share, compared to net earnings of$593.9 million , or$1.55 per diluted share, for the same period a year ago. Results for the six months endedJune 30, 2022 and 2021 reflected the factors discussed above in the discussion for the three months endedJune 30, 2022 and 2021, in addition to those noted below. Certain of these factors are discussed in more detail in the following sections of this Management's Discussion and Analysis of Financial Condition and Results of Operations. Operating results in our Phosphate segment for the six months endedJune 30, 2022 were favorably impacted by higher phosphate average selling prices compared to the prior year period. These results were driven by the factors mentioned above in the three-month discussion. Operating results in the current year period were unfavorably impacted by lower finished product 30
--------------------------------------------------------------------------------
Table of Contents
sales volumes, and higher raw material costs in the current year period, as discussed above in the three-month discussion. Current year operating results were also unfavorably impacted by higher idle plant and maintenance turnaround costs due to the timing of turnarounds compared to the prior year. Operating results in our Potash segment for the six months endedJune 30, 2022 were favorably impacted by an increase in the average selling price of potash compared to the prior year period, partially offset by lower sales volumes. These results were driven by the factors mentioned above in the three-month discussion. For the six months endedJune 30, 2022 , operating results in our Mosaic Fertilizantes segment were favorably impacted by an increase in average sales prices in the current year compared to the prior year period, driven by strong global demand and tight supply. These results were partially offset by the unfavorable impact of increased costs as discussed above in the three-month discussion.
In addition to the items noted above, the results for the six months ended
•Foreign currency transaction gain of
•Unrealized gain on derivatives of
•Other operating income of
•Other operating expense of$30 million , or$(0.06) per diluted share, related to upwards revisions in environmental reserves of$18 million , or$(0.05) per diluted share, related to maintaining closed and indefinitely idled facilities inFlorida , and fixed asset write-offs of$4 million , or$(0.01) per diluted share •Other non-operating expense of$26 million , or$(0.05) per diluted share, related to a realized gain on RCRA trust securities and$12 million , or$(0.02) per diluted share, for the write-down of an investment
•Functional currency impact in cost of goods sold of
•Expense of
•Discrete income tax expense of
•Inventory write-downs of
Other Highlights
•During the six months endedJune 30, 2022 , we repurchased 17,733,984 shares of Common Stock in the open market under the 2021 and 2022 Repurchase Programs for approximately$1.0 billion for an average purchase price of$58.32 per share. This includes 7,056,229 shares we purchased under an ASR agreement in the first quarter of 2022.
•In the first quarter of 2022, our Board of Directors approved the establishment
of a new
•In the first quarter of 2022, our Board of Directors approved a regular
dividend increase to
31
--------------------------------------------------------------------------------
Table of Contents
Phosphate
The following table summarizes the Phosphate segment's net sales, gross margin, sales volume, selling prices and raw material prices:
Three months ended Six months ended
June 30, 2022-2021 June 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales:
North America $ 919.1 $ 746.5 $ 172.6 23 % $ 1,923.5 $ 1,472.2 $ 451.3 31 %
International 881.8 428.3 453.5 106 % 1,373.4 703.6 669.8 95 %
Total 1,800.9 1,174.8 626.1 53 % 3,296.9 2,175.8 1,121.1 52 %
Cost of goods sold 1,159.3 866.3 293.0 34 % 2,127.6 1,694.7 432.9 26 %
Gross margin $ 641.6 $ 308.5 $ 333.1 108 $ 1,169.3 $ 481.1 $ 688.2 143 %
Gross margin as a percentage of
net sales 36 % 26 % 35 % 22 %
Sales volumes(a) (in thousands of
metric tonnes)
DAP/MAP 814 880 (66) (8) % 1,731 2,090 (359) (17) %
Performance and Other(b) 861 1,102 (241) (22) % 1,605 1,954 (349) (18) %
Total finished product tonnes 1,675 1,982 (307) (15) % 3,336 4,044 (708) (18) % Rock 458 274 184 67 % 918 539 379 70 % Total Phosphate Segment Tonnes(a) 2,133 2,256 (123) (5) % 4,254 4,583 (329) (7) % Realized prices ($/tonne) Average finished product selling price (destination)(c)$ 1,048 $ 584 $ 464 79 %$ 963 $ 530 $ 433 82 %
DAP selling price (fob plant)
376 69 %$ 841 $ 474 $ 367 77 % Average cost per unit consumed in cost of goods sold: Ammonia (metric tonne)$ 591 $ 382 $ 209 55 %$ 575 $ 348 $ 227 65 % Sulfur (long ton)$ 385 $ 172 $ 213 124 %$ 302 $ 145 $ 157 108 % Blended rock (metric tonne)$ 64 $ 60 $ 4 7 %$ 63 $ 60 $ 3 5 % Production volume (in thousands of metric tonnes) - North America 1,636 1,827 (191) (10) % 3,381 3,737 (356) (10) % ____________________________ (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
The Phosphate segment's net sales were$1.8 billion for the three months endedJune 30, 2022 , compared to$1.2 billion for the three months endedJune 30, 2021 . The increase in net sales in the current year period was primarily due to favorable sales prices, which had an impact of approximately$720 million compared to the prior year period. This was partially offset by lower phosphate sales volumes in the current period, which had an unfavorable impact on net sales of approximately$160 million compared to the prior year period. In addition, increased sales of other products, primarily ammonia and sulfur, favorably impacted net sales by approximately$70 million . Our average finished product selling price increased 79% to$1,048 per tonne for the three months endedJune 30, 2022 , compared to$584 per tonne in the prior year period, due to the factors discussed in the Overview. 32
--------------------------------------------------------------------------------
Table of Contents
The Phosphate segment's sales volumes of finished products decreased by 15% for the three months endedJune 30, 2022 , compared to the same period in the prior year, due to the factors discussed in the Overview. Gross margin for the Phosphate segment increased to$641.6 million for the three months endedJune 30, 2022 , from$308.5 million for the three months endedJune 30, 2021 . The increase in gross margin in the current year period was primarily due to higher sales prices, which favorably impacted gross margin by approximately$720 million compared to the prior year period. This was partially offset by an unfavorable impact of approximately$230 million from increased raw material prices, largely driven pricing of sulfur and ammonia. Lower sales volumes unfavorably impacted gross margin by approximately$70 million compared to the prior year period. The increase in gross margin was also partially offset by the unfavorable impact of approximately$50 million due to increased conversion costs, caused by the composition of rock and higher maintenance and turnaround costs of approximately$40 million compared to the prior period due to the timing of turnarounds during the current year period. The average consumed price for ammonia for ourNorth America operations increased 55% to$591 per tonne for the three months endedJune 30, 2022 , from$382 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 ourNorth America operations increased 124% to$385 per long ton for the three months endedJune 30, 2022 , from$172 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 slightly to$64 per tonne for the three months endedJune 30, 2022 , from$60 for the three months endedJune 30, 2021 . For the three months endedJune 30, 2022 , ourNorth America phosphate rock production decreased to 2.5 million tonnes from 2.8 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 1.6 million tonnes for the three months endedJune 30, 2022 , compared to 1.8 million for the three months endedJune 30, 2021 . Current period production levels were impacted by the timing of turnarounds. Our operating rate for processed phosphate production decreased to 66% for the three months endedJune 30, 2022 , from 73% for the same period in 2021.
Six months ended
The Phosphate segment's net sales were$3.3 billion for the six months endedJune 30, 2022 , compared to$2.2 billion for the six months endedJune 30, 2021 . The increase in net sales was primarily due to higher finished product selling prices in the current year period, which favorably impacted net sales by approximately$1.3 billion compared to the prior year period. This was partially offset by lower sales volumes of finished goods, which unfavorably impacted net sales by approximately$340 million . In addition, net sales were also favorably impacted by approximately$150 million due to sales of rock in ourMiski Mayo operation, sales of excess ammonia and sulfur, and other sales in the current year period. Our average finished product selling price was$963 per tonne for the six months endedJune 30, 2022 , an increase of$433 per tonne from the same period a year ago, due to the factors discussed in the Overview. The Phosphate segment's sales volumes of finished products decreased by 18% for the six months endedJune 30, 2022 , compared to the same period in the prior year ago, due to the factors discussed in the Overview. Gross margin for the Phosphate segment increased to$1.2 billion for the six months endedJune 30, 2022 , from$481.1 million for the six months endedJune 30, 2021 . The increase in gross margin in the current year period was primarily due to the impact of higher finished product prices of approximately$1.3 billion compared to the prior year, and an increase in rock sales and sales of excess ammonia and sulfur of approximately$40 million . These increases were partially offset by higher raw material costs as discussed below, which impacted gross margin by approximately$400 million . Gross margin was also unfavorably impacted by approximately$150 million , due to lower sales volumes, higher conversion costs of approximately$80 million due to lower production and higher costs of approximately$30 million related to the timing of idle plant and turnaround costs in the current year period. The average consumed price for ammonia for our North American operations was$575 per tonne for the six months endedJune 30, 2022 , compared to$348 in the same period a year ago. The average consumed price for sulfur for our North American 33
--------------------------------------------------------------------------------
Table of Contents
operations increased to
The average consumed cost of purchased and produced phosphate rock increased slightly to$63 per tonne for the six months endedJune 30, 2022 , compared to$60 per tonne for the prior year period. Our North American phosphate rock production decreased to 4.6 million tonnes for the six months endedJune 30, 2022 , compared to 5.8 million for the six months endedJune 30, 2021 . The decrease from the prior year is due to the challenges noted above in the three-month discussion. The Phosphate segment's production of crop nutrient dry concentrates and animal feed ingredients decreased to 3.4 million tonnes for the six months endedJune 30, 2022 , compared to 3.7 million tonnes in the prior year period. For the six months endedJune 30, 2022 , our operating rate for processed phosphate production decreased to 68%, compared to 75% in the same period of the prior year.
Potash
The following table summarizes the Potash segment's net sales, gross margin, sales volume and selling price:
Three months ended Six months ended
June 30, 2022-2021 June 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales:
North America $ 657.9 $ 456.6 $ 201.3 44 % $ 1,188.0 $ 770.4 $ 417.6 54 %
International 922.3 206.4 715.9 NM 1,452.0 370.0 1,082.0 NM
Total 1,580.2 663.0 917.2 138 % 2,640.0 1,140.4 1,499.6 131 %
Cost of goods sold 652.6 445.8 206.8 46 % 1,133.5 783.0 350.5 45 %
Gross margin $ 927.6 $ 217.2 $ 710.4 NM $ 1,506.5 $ 357.4 $ 1,149.1 NM
Gross margin as a percentage
of net sales 59 % 33 % 57 % 31 %
Sales volume(a) (in thousands
of metric tonnes)
MOP 2,045 2,064 (19) (1) % 3,577 3,811 (234) (6) %
Performance and Other(b) 259 262 (3) (1) % 519 495 24 5 %
Total Potash Segment Tonnes 2,304 2,326 (22) (1) % 4,096 4,306 (210) (5) %
Realized prices ($/tonne)
Average finished product
selling price (destination) $ 686 $ 285 $ 401 141 % $ 645 $ 265 $ 380 143 %
MOP selling price (fob mine)
179 % $ 638 $ 223 $ 415 186 %
Production volume (in
thousands of metric tonnes) 2,436 2,131 305 14 % 4,636 4,416 220 5 %
______________________________
(a) Includes intersegment sales volumes. (b) Includes sales volumes of K-Mag, Aspire and animal feed ingredients.
Three months ended
The Potash segment's net sales increased to$1.6 billion for the three months endedJune 30, 2022 , compared to$663.0 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$940 million , compared to the same period in the prior year. This was partially offset by slightly lower sales volumes compared to the prior year, which unfavorably impacted net sales by approximately$25 million .
Our average finished product selling price was
The Potash segment's sales volumes of finished products were 2.3 million tonnes
for each of the three months ended
34--------------------------------------------------------------------------------
Table of Contents
Gross margin for the Potash segment increased to$927.6 million for the three months endedJune 30, 2022 , from$217.2 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$940 million to gross margin, compared to the prior year period. This increase was unfavorably impacted by higher Canadian resource taxes and royalties, as discussed below. We had expense of$274.5 million from Canadian resource taxes for the three months endedJune 30, 2022 , compared to$54.3 million in the same period a year ago. Canadian royalty expense increased to$31.5 million for the three months endedJune 30, 2022 , compared to$10.0 million for the three months endedJune 30, 2021 . The fluctuations in Canadian resource taxes and royalties are a result of an increase in our sales revenue and margins. OnJune 4, 2021 , due to increased brine inflows, we made the decision to immediately close the K1 and K2 shafts at ourEsterhazy mine, which eliminated future brine inflow management expenses at these locations. Therefore, we did not incur any brine inflow management expenses for the three months endedJune 30, 2022 , compared to$19 million in brine inflow management expenses, including depreciation on brine assets, during the three months endedJune 30, 2021 .
Our operating rate for potash production was 87% for the current year period, compared to 88% in the prior year period.
Six months ended
The Potash segment's net sales increased to$2.6 billion for the six months endedJune 30, 2022 , compared to$1.1 billion in the same period a year ago. The increase was due to higher selling prices, which had a favorable impact on net sales of approximately$1.6 billion . This was partially offset by lower sales volumes, which had an unfavorable impact on net sales of approximately$70 million .
Our average selling price was
The Potash segment's sales volumes decreased to 4.1 million tonnes for the six months endedJune 30, 2022 , compared to 4.3 million tonnes in the same period a year ago, due to the factors discussed in the Overview. Gross margin for the Potash segment increased to$1.5 billion for the six months endedJune 30, 2022 , from$357.4 million for the same period in the prior year. Gross margin was favorably impacted by approximately$1.6 billion , due to the increase in average selling prices, partially offset by approximately$20 million , due to the impact of lower sales volumes. Gross margin was unfavorably impacted by higher Canadian resource taxes and royalties of approximately$380 million in the current year period, as discussed below. Gross margin was also negatively impacted in the current year period by higher operational plant spending of approximately$50 million , due to higher natural gas costs and costs associated with operating ourColonsay, Saskatchewan mine, which was not operating in the prior year period. We incurred$431.7 million in Canadian resource taxes for the six months endedJune 30, 2022 , compared to$89.2 million in the same period a year ago. Canadian royalty expense increased to$58.5 million for the six months endedJune 30, 2022 , compared to$18.5 million for the six months endedJune 30, 2021 . The fluctuations in Canadian resource taxes and royalties are due to higher average selling prices and margins in the current year period compared to the prior year. We did not incur any brine inflow management expenses for the six months endedJune 30, 2022 , compared to$42 million in brine inflow management expenses, including depreciation on brine assets, during the six months endedJune 30, 2021 .
Our operating rate was 82% for the current year period, compared to 91% in the prior year period, due to the closure of our K1 and K2 shafts which were operating for most of the prior year period.
35--------------------------------------------------------------------------------
Table of Contents 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 Six months ended
June 30, 2022-2021 June 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net Sales $ 2,259.7 $ 1,035.7 $ 1,223.9 118 % $ 3,748.3 $ 1,799.2 $ 1,949.1 108 %
Cost of goods sold 1,809.5 850.7 958.8 113 % 3,078.8 1,511.0 1,567.8 104 %
Gross margin $ 450.2 $ 185.1 $ 265.1 143 % $ 669.5 $ 288.2 $ 381.3 132 %
Gross margin as a percent of net
sales 20 % 18 % 18 % 16 %
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil(a) 638 686 (48) (7) % 1,375 1,222 153 13 %
Potash produced in Brazil 46 66 (20) (30) % 92 129 (37) (29) %
Purchased nutrients for
distribution 1,636 1,589 47 3 % 2,675 3,054 (379) (12) %
Total Mosaic Fertilizantes Segment
Tonnes 2,320 2,341 (21) (1) % 4,142 4,405 (263) (6) %
Realized prices ($/tonne)
Average finished product selling
price (destination) $ 974 $ 442 $ 532 120 % $ 905 $ 408 $ 497 122 %
Brazil MAP price (delivered price
to third party) $ 1,021 $ 589 $ 432 73 % $ 964 $ 521 $ 443 85 %
Purchases ('000 tonnes)
DAP/MAP from Mosaic 102 96 6 6 % 204 160 44 28 %
MicroEssentials® from Mosaic 448 418 30 7 % 696 621 75 12 %
Potash from Mosaic/Canpotex 663 473 190 40 % 1,061 962 99 10 %
Average cost per unit consumed in
cost of goods sold:
Ammonia (metric tonne) $ 1,396 $ 527 $ 869 165 % $ 1,296 $ 453 $ 843 186 %
Sulfur (long ton) $ 384 $ 177 $ 207 117 % $ 363 $ 153 $ 210 137 %
Blended rock (metric tonne) $ 102 $ 80 $ 22 28 % $ 103 $ 77 $ 26 34 %
Production volume (in thousands of
metric tonnes) 848 893 (45) (5) % 1,836 1,778 58 3 %
______________________________
(a) Excludes internally produced volumes used in purchased nutrients for distribution.
Three months ended
The Mosaic Fertilizantes segment's net sales increased to$2.3 billion for the three months endedJune 30, 2022 , from$1.0 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$1.1 billion . This was partially offset by slightly lower finished goods sales volumes, which had an unfavorable impact of approximately$10 million . Net sales were also favorably impacted by increased sales prices of other products, primarily sulfuric acid, of approximately$100 million .
Our average finished product selling price was
The Mosaic Fertilizantes segment's sales volumes of finished products decreased 1% for the three months endedJune 30, 2022 , compared to the same period a year ago. Sales volumes were impacted by shipment delays due to high customer inventories. Gross margin for the Mosaic Fertilizantes segment increased to$450.2 million for the three months endedJune 30, 2022 , from$185.1 million in the same period of the prior year. The increase in gross margin was primarily due to a favorable impact of 36
--------------------------------------------------------------------------------
Table of Contents
approximately$1.1 billion related to the increase in selling prices during the current year period compared to the prior year period. An increase in product costs, primarily material purchases by our distribution business, and increases in other production costs collectively had an unfavorable impact on gross margin of approximately$840 million , compared to the prior year period. The average consumed price for ammonia for our Brazilian operations increased to$1,396 per tonne for the three months endedJune 30, 2022 , compared to$527 per tonne in the prior year period. The average consumed sulfur price for our Brazilian operations was$384 per long ton for the three months endedJune 30, 2022 , compared to$177 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 5% for the three months endedJune 30, 2022 , compared to the prior year period. For the three months endedJune 30, 2022 , our phosphate operating rate increased to 83%, compared to 72% in the same period of the prior year.
For the three months ended
Six months ended
The Mosaic Fertilizantes segment's net sales were$3.7 billion for the six months endedJune 30, 2022 , compared to$1.8 billion in the prior year period. In the current period, net sales were favorably impacted by approximately$1.8 billion due to higher finished goods sales prices, partially offset by the impact of lower finished goods sales volumes of approximately$100 million . Net sales were also favorably impacted by increased sales prices of other products, primarily sulfur acid, of approximately$210 million . The average finished product selling price increased$497 per tonne to$905 per tonne for the six months endedJune 30, 2022 , compared to$408 per tonne in the prior year period, primarily due to the increase in global prices mentioned in the Overview. The Mosaic Fertilizantes segment's sales volume decreased to 4.1 million tonnes for the six months endedJune 30, 2022 , from 4.4 million tonnes in the same period a year ago, impacted by lower demand primarily due to adverse weather conditions in certain areas ofBrazil during the first quarter of 2022. Gross margin for the six months endedJune 30, 2022 , increased to$669.5 million from$288.2 million in the same period in the prior year. In the current year period, gross margin was favorably impacted by favorable sales prices of approximately$1.8 billion . Gross margin was also positively impacted by favorable sales of other products, primarily sulfuric acid, of approximately$30 million compared to the prior year period. In the current year period, gross margin was negatively impacted by higher raw materials costs of approximately$1.4 billion and higher conversion costs at our facilities of approximately$40 million compared to the prior year. The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates and animal feed ingredients increased 3% compared to the prior year period. For the six months endedJune 30, 2022 , our phosphate operating rate was 87%, compared to 82% in the same period of the prior year.
For the six month period ended
Corporate, Eliminations and Other
In addition to our three operating segments, we assign certain costs to Corporate, Eliminations and Other, which is presented separately in Note 17 to our Notes to Condensed Consolidated Financial Statements. Corporate, Eliminations and Other includes the results of theChina andIndia distribution businesses, intersegment eliminations, including profit on intersegment sales, unrealized mark-to-market gains and losses on derivatives, debt expenses and Streamsong Resort® results of operations. For the three months endedJune 30, 2022 , gross margin for Corporate, Eliminations and Other was$(173.1) million , compared to$41.5 million for the same period in the prior year. Gross margin was unfavorably impacted by a net unrealized loss of$58.8 million in the current year period, primarily on foreign currency derivatives, compared to a net unrealized gain of$38.0 million in the prior year period. Gross margin was also unfavorably impacted by higher elimination of profit on intersegment sales in 37
--------------------------------------------------------------------------------
Table of Contents
the current year period, which changed from the prior year period by approximately$141.8 million . Gross margin was positively impacted by distribution operations primarily inChina due to increased pricing compared to the prior year period.China andIndia , collectively had revenue of$389.9 million and gross margin of$64.4 million in the current year period, compared to revenue of$180.0 million and gross margin of$42.7 million in the prior year period. For the six months endedJune 30, 2022 , gross margin for Corporate, Eliminations and Other was$(59.9) million , compared to$60.5 million for the same period in the prior year. Gross margin was unfavorably impacted by higher elimination of profit on intersegment sales in the current year period, which changed from the prior year period by approximately$215.3 million . Gross margin was positively impacted by distribution operations primarily inChina due to increased pricing.China andIndia , collectively had revenue of$610.9 million and gross margin of$151.3 million in the current year period, compared to revenue of$339.6 million and gross margin of$72.9 million in the prior year period. Gross margin was also favorably impacted by a net unrealized gain on foreign currency commodity derivatives of$41.0 million in the current year period compared to a net unrealized gain of$29.9 million in the prior year period.
© Edgar Online, source
