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
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Table of Contents Results of Operations
The following table shows the results of operations for the three and nine
months ended
Three months ended Nine months ended
September 30, 2022-2021 September 30, 2022-2021
(in millions, except per share
data) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales $ 5,348.5 $ 3,418.6 $ 1,929.9 56 % $ 14,643.9 $ 8,516.4 $ 6,127.5 72 %
Cost of goods sold 3,846.5 2,554.1 1,292.4 51 % 9,856.5 6,464.7 3,391.8 52 %
Gross margin 1,502.0 864.5 637.5 74 % 4,787.4 2,051.7 2,735.7 133 %
Gross margin percentage 28 % 25 % 33 % 24 %
Selling, general and administrative
expenses 124.5 97.7 26.8 27 % 365.1 307.0 58.1 19 %
Mine closure costs - - - NM - 158.1 (158.1) NM
Other operating expense 222.8 65.2 157.6 NM 337.6 87.8 249.8 NM
Operating earnings 1,154.7 701.6 453.1 65 % 4,084.7 1,498.8 2,585.9 173 %
Interest expense, net (30.6) (47.8) 17.2 (36) % (104.0) (130.1) 26.1 (20) %
Foreign currency transaction gain
(loss) (61.1) (100.1) 39.0 (39) % 22.4 (34.8) 57.2 (164) %
Other income (expense) (2.3) 0.6 (2.9) NM (37.8) 5.0 (42.8) NM
Earnings from consolidated
companies before income taxes 1,060.7 554.3 506.4 91 % 3,965.3 1,338.9 2,626.4 196 %
Provision for income taxes 276.6 176.6 100.0 57 % 1,018.3 352.2 666.1 189 %
Earnings from consolidated
companies 784.1 377.7 406.4 108 % 2,947.0 986.7 1,960.3 199 %
Equity in net earnings (loss) of
nonconsolidated companies 72.1 (1.2) 73.3 NM 138.7 (13.2) 151.9 NM
Net earnings including
noncontrolling interests 856.2 376.5 479.7 127 % 3,085.7 973.5 2,112.2 NM
Less: Net earnings attributable to
noncontrolling interests 14.5 4.6 9.9 NM 26.1 7.7 18.4 NM
Net earnings attributable to Mosaic
469.8 126 %$ 3,059.6 $ 965.8 $ 2,093.8 NM Diluted net earnings per share attributable to Mosaic$ 2.42 $ 0.97 $ 1.45 149 %$ 8.50 $ 2.52 $ 5.98 NM Diluted weighted average number of shares outstanding 347.7 383.2 360.1 383.0
Overview of Consolidated Results for the three months ended
For the three months endedSeptember 30, 2022 , Mosaic had net income of$841.7 million , or$2.42 per diluted share, compared to net income of$371.9 million , or$0.97 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 endedSeptember 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. The Russian invasion ofUkraine inFebruary 2022 has resulted in instability in global commodities markets. The invasion, together with the continuation of reduced exports byBelarus , has significantly reduced the physical supply of fertilizer and agricultural commodities produced in those geographies. This 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 worldwide fertilizer market. 29 -------------------------------------------------------------------------------- Our operating results during the three months endedSeptember 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 also favorably impacted by higher sales volumes compared to the prior year period. Our sales volumes were lower in the prior year period due to production shortfalls caused by the early closures of the K1 and K2 shafts at ourEsterhazy mine. Our operating results for the three months endedSeptember 30, 2022 were unfavorably impacted in our Phosphate segment compared to the prior year period. Average selling prices were higher than the prior year period, driven by the factors described above. The benefit from higher sales prices was 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 lower finished product sales volumes due to customers deferring purchases to future periods inNorth America , and delayed shipments caused by Hurricane Ian. For the three months endedSeptember 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 lower in the current year period compared to the same period in the prior year, mainly due to farmers deferring purchase decisions.
In addition to the items noted above, our current period results were negatively
impacted by a total of
•Asset retirement obligation ("ARO") costs of $146 million , or $(0.32) per
diluted share, related to upward revisions in the estimated costs of our asset
retirement obligations for closed facilities
•Unrealized loss on derivatives of
•Other operating expense of
•Foreign currency transaction loss of
•Other operating expense of
•Discrete income tax expense of
•Cost of goods sold impact of
•Functional currency impact in cost of goods sold of
•Other operating income of
Other Highlights
•During the three months ended
•During the three months endedSeptember 30, 2022 , we repurchased 11,666,578 shares of Common Stock in the open market under our prior and new repurchase programs for approximately$574.8 million .
Overview of Consolidated Results for the nine months ended
Net earnings attributable to Mosaic for the nine months endedSeptember 30, 2022 was$3.1 billion , or$8.50 per diluted share, compared to net earnings of$965.8 million , or$2.52 per diluted share, for the same period a year ago.
Results for the nine months ended
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Operating results in our Potash segment for the nine months endedSeptember 30, 2022 were favorably impacted by an increase in the average selling price of potash compared to the prior year period and an increase in sales volumes in the current year period. These results were driven by the factors mentioned above in the three-month discussion. Operating results in our Phosphate segment for the nine months endedSeptember 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 higher raw material costs and lower finished product sales volumes in the current year period, as discussed above in the three-month discussion. Adverse weather conditions inNorth America also contributed to a condensed spring season resulting in lower sales volumes for the nine months endedSeptember 30, 2022 . For the nine months endedSeptember 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 and lower sales volumes as discussed above in the three-month discussion.
In addition to the items noted above, the results for the nine months ended
•Expense of
•Other operating expense of
•Unrealized loss on derivatives of
•Other non-operating expense of
•Cost of goods sold impact of
•Discrete income tax expense of
•Foreign currency transaction gain of
•Other operating income of
Other Highlights
•During the nine months endedSeptember 30, 2022 , we repurchased 29,400,562 shares of Common Stock in the open market under our repurchase programs for approximately$1.6 billion for an average purchase price of$54.73 per share. This includes 7,056,229 shares we purchased under an accelerated share repurchase agreement in the first quarter of 2022. •In the first quarter of 2022, our Board of Directors approved the establishment of a new$1 billion share repurchase authorization, which was completed in the second quarter of 2022 and a new$2 billion share repurchase was authorized in the third quarter.
•In the first quarter of 2022, our Board of Directors approved a regular
dividend increase to
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Phosphate
The following table summarizes the Phosphate segment's net sales, gross margin, sales volume, selling prices and raw material prices:
Three months ended Nine months ended
September 30, 2022-2021 September 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales:
North America $ 1,177.9 $ 800.2 $ 377.7 47 % $ 3,101.4 $ 2,272.4 $ 829.0 36 %
International 399.7 481.1 (81.4) (17) % 1,773.1 1,184.7 588.4 50 %
Total 1,577.6 1,281.3 296.3 23 % 4,874.5 3,457.1 1,417.4 41 %
Cost of goods sold 1,219.7 917.1 302.6 33 % 3,347.3 2,611.8 735.5 28 %
Gross margin $ 357.9 $ 364.2 $ (6.3) (2) $ 1,527.2 $ 845.3 $ 681.9 81 %
Gross margin as a percentage of
net sales 23 % 28 % 31 % 24 %
Sales volumes(a) (in thousands of
metric tonnes)
DAP/MAP 824 907 (83) (9) % 2,555 2,997 (442) (15) %
Performance and Other(b) 827 929 (102) (11) % 2,432 2,883 (451) (16) %
Total finished product tonnes 1,651 1,836 (185) (10) % 4,987 5,880 (893) (15) % Rock 410 450 (40) (9) % 1,328 1,256 72 6 % Total Phosphate Segment Tonnes(a) 2,061 2,286 (225) (10) % 6,315 7,136 (821) (12) % Realized prices ($/tonne) Average finished product selling price (destination)(c)$ 924 $ 681 $ 243 36 %$ 950 $ 575 $ 375 65 %
DAP selling price (fob plant)
204 34 %$ 829 $ 524 $ 305 58 % Average cost per unit consumed in cost of goods sold: Ammonia (metric tonne)$ 665 $ 424 $ 241 57 %$ 583 $ 371 $ 212 57 % Sulfur (long ton)$ 436 $ 214 $ 222 104 %$ 400 $ 167 $ 233 140 % Blended rock (metric tonne)$ 68 $ 59 $ 9 15 %$ 68 $ 60 $ 8 13 % Production volume (in thousands of metric tonnes) - North America 1,664 1,738 (74) (4) % 5,045 5,476 (431) (8) % ____________________________ (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$1.6 billion for the three months endedSeptember 30, 2022 , compared to$1.3 billion for the three months endedSeptember 30, 2021 . The increase in net sales in the current year period was primarily due to higher sales prices, which had a favorable impact of approximately$360 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$110 million compared to the prior year period. Net sales were also favorably impacted by approximately$20 million due to increased sales in ourMiski Mayo operation. Our average finished product selling price increased 36% to$924 per tonne for the three months endedSeptember 30, 2022 , compared to$681 per tonne in the prior year period, due to the factors discussed in the Overview. 32
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The Phosphate segment's sales volumes of finished products decreased by 10% for the three months endedSeptember 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 decreased to$357.9 million for the three months endedSeptember 30, 2022 , from$364.2 million for the three months endedSeptember 30, 2021 . The decrease in gross margin in the current year period was primarily due to an unfavorable impact of approximately$250 million from increased raw material prices, largely driven by pricing of sulfur and ammonia. Lower sales volumes unfavorably impacted gross margin by approximately$70 million compared to the prior year period. Gross margin was also unfavorably impacted by approximately$30 million due to increased conversion costs, caused by the composition of rock, and higher maintenance and turnaround costs of approximately$20 million , compared to the prior period, due to the timing of turnaround. These impacts were partially offset by higher sales prices, which favorably impacted gross margin by approximately$360 million compared to the prior year period. The average consumed price for ammonia for ourNorth America operations increased 57% to$665 per tonne for the three months endedSeptember 30, 2022 , from$424 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 with CF Industries ("CF") or produced internally at our Faustina,Louisiana location. OnOctober 14, 2022 , we received notice from CF to exercise the bilateral, contractual right to end the ammonia supply agreement in its current form, effectiveJanuary 1, 2025 . The contract allows for either party to exercise rights through 2032 that can result in changes to terms and conditions. We are confident that we will continue to have adequate sources of supply for ammonia at competitive pricing, including from CF Industries. The average consumed sulfur price for ourNorth America operations increased 104% to$436 per long ton for the three months endedSeptember 30, 2022 , from$214 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$68 per tonne for the three months endedSeptember 30, 2022 , from$59 for the three months endedSeptember 30, 2021 , primarily due to using moreMiski Mayo rock in the current year period. For the three months endedSeptember 30, 2022 , ourNorth America phosphate rock production increased slightly to 2.9 million tonnes from 2.8 million tonnes during the same period of the prior year. The Phosphate segment's production of crop nutrient dry concentrates and animal feed ingredients decreased 4% for the three months endedSeptember 30, 2022 from the prior year period. The lower production in the current year period reflects impacts from downtime at ourFlorida locations due to Hurricane Ian in September. Our operating rate for processed phosphate production decreased slightly to 67% for the three months endedSeptember 30, 2022 , from 70% for the same period in 2021.
Nine months ended
The Phosphate segment's net sales were$4.9 billion for the nine months endedSeptember 30, 2022 , compared to$3.5 billion for the nine months endedSeptember 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$1.7 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$460 million . In addition, net sales were also favorably impacted by approximately$160 million , primarily due to sales of rock in ourMiski Mayo operation and sales of excess ammonia and sulfur in the current year period.
Our average finished product selling price was
The Phosphate segment's sales volumes of finished products decreased by 15% for the nine months endedSeptember 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$1.5 billion for the nine months endedSeptember 30, 2022 , from$845.3 million for the nine months endedSeptember 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$1.7 billion compared to the prior year. These increases were partially offset by higher raw material costs as discussed below, which impacted gross margin by approximately$600 million . Gross margin was also unfavorably impacted by approximately$200 million due to lower sales volumes, higher conversion costs of approximately$110 million , due to higher maintenance and water management costs, and higher costs of approximately$50 million related to the timing of idle plant and turnaround costs in the current year period. 33
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The average consumed price for ammonia for ourNorth America operations was$583 per tonne for the nine months endedSeptember 30, 2022 , compared to$371 in the same period a year ago. The average consumed price for sulfur for ourNorth America operations increased to$400 per long ton for the nine months endedSeptember 30, 2022 , from$167 in the same period a year ago. The purchase prices of these raw materials are driven by global supply and demand. The average consumed cost of purchased and produced phosphate rock increased to$68 per tonne for the nine months endedSeptember 30, 2022 , compared to$60 per tonne for the prior year period, primarily due to using moreMiski Mayo rock in the current year period. OurNorth America phosphate rock production decreased to 7.5 million tonnes for the nine months endedSeptember 30, 2022 , compared to 8.6 million for the nine months endedSeptember 30, 2021 , due to geology of rock and operational challenges. The Phosphate segment's production of crop nutrient dry concentrates and animal feed ingredients decreased to 5.0 million tonnes for the nine months endedSeptember 30, 2022 , compared to 5.5 million tonnes in the prior year period. For the nine months endedSeptember 30, 2022 , our operating rate for processed phosphate production decreased to 68%, compared to 73% 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 Nine months ended
September 30, 2022-2021 September 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net sales:
North America $ 440.5 $ 297.5 $ 143.0 48 % $ 1,628.5 $ 1,067.9 $ 560.6 52 %
International 991.6 291.8 699.8 NM 2,443.6 661.8 1,781.8 NM
Total 1,432.1 589.3 842.8 143 % 4,072.1 1,729.7 2,342.4 135 %
Cost of goods sold 633.4 353.3 280.1 79 % 1,766.9 1,136.3 630.6 55 %
Gross margin $ 798.7 $ 236.0 $ 562.7 NM $ 2,305.2 $ 593.4 $ 1,711.8 NM
Gross margin as a percentage
of net sales 56 % 40 % 57 % 34 %
Sales volume(a) (in thousands
of metric tonnes)
MOP 1,952 1,547 405 26 % 5,529 5,358 171 3 %
Performance and Other(b) 190 261 (71) (27) % 709 756 (47) (6) %
Total Potash Segment Tonnes 2,142 1,808 334 18 % 6,238 6,114 124 2 %
Realized prices ($/tonne)
Average finished product
selling price (destination) $ 669 $ 326 $ 343 105 % $ 653 $ 283 $ 370 131 %
MOP selling price (fob mine)
130 % $ 632 $ 242 $ 390 161 %
Production volume (in
thousands of metric tonnes) 2,266 1,580 686 43 % 6,902 5,996 906 15 %
______________________________
(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$1.4 billion for the three months endedSeptember 30, 2022 , compared to$0.6 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$760 million , compared to the same period in the prior year, and higher sales volumes compared to the prior year, which favorably impacted net sales by approximately$80 million .
Our average finished product selling price was
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The Potash segment's sales volumes of finished products increased to 2.1 million tonnes for the three months endedSeptember 30, 2022 , 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 increased to$798.7 million for the three months endedSeptember 30, 2022 , from$236.0 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$760 million to gross margin, compared to the prior year period, and an increase in sales volumes, which contributed approximately$35 million to gross margin, compared to the prior year. Gross margin was also positively impacted by favorable absorption of approximately$80 million , due to increased production in the current period, and favorable turnaround impacts, due to timing, of approximately$20 million . Gross margin was unfavorably impacted by increased plant spending of approximately$110 million , primarily due to higher deprecation and natural gas costs, and by higher Canadian resource taxes and royalties, as discussed below. We had expense of$258.4 million from Canadian resource taxes for the three months endedSeptember 30, 2022 , compared to$57.3 million in the same period a year ago. Canadian royalty expense increased to$30.5 million for the three months endedSeptember 30, 2022 , compared to$8.2 million for the three months endedSeptember 30, 2021 . The fluctuations in Canadian resource taxes and royalties are a result of an increase in our sales revenue and margins. Our operating rate for potash production was 81% for the current year period, compared to 65% in the prior year period. The prior year period operating rate was unfavorably impacted by the closure of our K1 and K2 shafts at ourEsterhazy mine.
Nine months ended
The Potash segment's net sales increased to$4.1 billion for the nine months endedSeptember 30, 2022 , compared to$1.7 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$2.3 billion , and by higher sales volumes, which had a favorable impact on net sales of approximately$30 million .
Our average selling price was
The Potash segment's sales volumes increased to 6.2 million tonnes for the nine
months ended
Gross margin for the Potash segment increased to$2.3 billion for the nine months endedSeptember 30, 2022 , from$593.4 million for the same period in the prior year. Gross margin was favorably impacted by approximately$2.3 billion , due to the increase in average selling prices, and by higher sales volumes, which had a favorable impact on net sales of approximately$10 million . Gross margin was also positively impacted by favorable absorption of approximately$100 million , due to increased production in the current year period. Gross margin was unfavorably impacted by higher Canadian resource taxes and royalties of approximately$605 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$125 million , due to higher natural gas costs and costs associated with operating ourColonsay, Saskatchewan mine, which was not operating in the prior year period, and depreciation costs associated with our K3 shaft assets. We incurred$690.1 million in Canadian resource taxes for the nine months endedSeptember 30, 2022 , compared to$146.5 million in the same period a year ago. Canadian royalty expense increased to$89.0 million for the nine months endedSeptember 30, 2022 , compared to$26.7 million for the nine months endedSeptember 30, 2021 . The fluctuations in Canadian resource taxes and royalties are due to an increase in our sales revenues 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. Therefore, we did not incur any brine inflow management expenses for the nine months endedSeptember 30, 2022 , compared to$28 million in brine inflow management expenses, including depreciation on brine assets, during the nine months endedSeptember 30, 2021 .
Our operating rate was 82% for each of the nine months ended
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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 Nine months ended
September 30, 2022-2021 September 30, 2022-2021
(in millions, except price per
tonne or unit) 2022 2021 Change Percent 2022 2021 Change Percent
Net Sales $ 2,628.7 $ 1,754.7 $ 874.0 50 % $ 6,377.0 $ 3,553.8 $ 2,823.2 79 %
Cost of goods sold 2,280.4 1,422.5 857.9 60 % 5,359.2 2,933.4 2,425.8 83 %
Gross margin $ 348.3 $ 332.2 $ 16.1 5 % $ 1,017.8 $ 620.4 $ 397.4 64 %
Gross margin as a percent of net
sales 13 % 19 % 16 % 17 %
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil(a) 488 722 (234) (32) % 1,863 1,944 (81) (4) %
Potash produced in Brazil 33 56 (23) (41) % 125 185 (60) (32) %
Purchased nutrients for
distribution 2,303 2,572 (269) (10) % 4,978 5,626 (648) (12) %
Total Mosaic Fertilizantes Segment
Tonnes 2,824 3,350 (526) (16) % 6,966 7,755 (789) (10) %
Realized prices ($/tonne)
Average finished product selling
price (destination) $ 931 $ 524 $ 407 78 % $ 915 $ 458 $ 457 100 %
Brazil MAP price (delivered price
to third party) $ 866 $ 622 $ 244 39 % $ 936 $ 543 $ 393 72 %
Purchases ('000 tonnes)
DAP/MAP from Mosaic 30 62 (32) (52) % 247 222 25 11 %
MicroEssentials® from Mosaic 370 343 27 8 % 1,067 964 103 11 %
Potash from Mosaic/Canpotex 798 1,024 (226) (22) % 1,885 1,986 (101) (5) %
Average cost per unit consumed in
cost of goods sold:
Ammonia (metric tonne) $ 1,267 $ 640 $ 627 98 % $ 1,285 $ 524 $ 761 145 %
Sulfur (long ton) $ 432 $ 222 $ 210 95 % $ 388 $ 179 $ 209 117 %
Blended rock (metric tonne) $ 106 $ 81 $ 25 31 % $ 104 $ 79 $ 25 32 %
Production volume (in thousands of
metric tonnes) 811 982 (171) (17) % 2,647 2,760 (113) (4) %
______________________________
(a) Excludes internally produced volumes used in purchased nutrients for distribution.
Three months ended
The Mosaic Fertilizantes segment's net sales increased to$2.6 billion for the three months endedSeptember 30, 2022 , from$1.8 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$1.1 billion . This was partially offset by lower finished goods sales volumes, which had an unfavorable impact of approximately$240 million .
Our average finished product selling price was
The Mosaic Fertilizantes segment's sales volumes of finished products decreased 16% for the three months endedSeptember 30, 2022 , compared to the same period a year ago. Sales volumes were impacted by a reduction in market demand in the current period. Gross margin for the Mosaic Fertilizantes segment increased to$348.3 million for the three months endedSeptember 30, 2022 , from$332.2 million in the same period of the prior year. The increase in gross margin was primarily due to a favorable impact 36
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of 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 higher nitrogen and potash products for our distribution business and higher sulfur and ammonia for phosphate production, and increases in other production costs collectively had an unfavorable impact on gross margin of approximately$1.0 billion , compared to the prior year period. Gross margin was also unfavorably impacted by a decrease in specialty product revenue, largely driven by gypsum and sulfuric acid, of approximately$20 million , and increased turnaround costs of approximately$30 million . The average consumed price for ammonia for our Brazilian operations increased to$1,267 per tonne for the three months endedSeptember 30, 2022 , compared to$640 per tonne in the prior year period. The average consumed sulfur price for our Brazilian operations was$432 per long ton for the three months endedSeptember 30, 2022 , compared to$222 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 17% for the three months ended
For each of the three months ended
Nine months ended
The Mosaic Fertilizantes segment's net sales were$6.4 billion for the nine months endedSeptember 30, 2022 , compared to$3.6 billion in the prior year period. In the current period, net sales were favorably impacted by approximately$2.9 billion due to higher finished goods sales prices, partially offset by the impact of lower finished goods sales volumes of approximately$330 million . Net sales were also favorably impacted by increased revenues from other products, primarily sulfur acid of approximately$210 million . The average finished product selling price increased$457 per tonne to$915 per tonne for the nine months endedSeptember 30, 2022 , compared to$458 per tonne in the prior year period, primarily due to the increase in global prices mentioned in the Overview. The Mosaic Fertilizantes segment's sales volume decreased to 7.0 million tonnes for the nine months endedSeptember 30, 2022 , from 7.8 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 half of 2022 and a reduction of market demand. Gross margin for the nine months endedSeptember 30, 2022 , increased to$1.0 billion from$620.4 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$2.9 billion . In the current year period, gross margin was negatively impacted by approximately$2.3 billion related to higher product costs, primarily material purchases by our distribution business and raw materials costs. Production costs at our facilities were approximately$70 million higher than the prior year period. Gross margin was also unfavorably impacted by lower sales volumes of approximately$60 million , and increased turnaround costs of approximately$50 million . The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates and animal feed ingredients decreased 4% compared to the prior year period. For the each of the nine months endedSeptember 30, 2022 , and 2021, our phosphate operating rate was 84%, compared to 85% in the same period of the prior year. For the nine month period endedSeptember 30, 2022 , our Brazilian phosphate rock production increased slightly to 3.0 million tonnes, from 2.9 million tonnes for the prior year period.
Corporate, Eliminations and Other
In addition to our three operating segments, we assign certain costs to Corporate, Eliminations and Other, which is presented separately in Note 18 to our Notes to Condensed Consolidated Financial Statements. Corporate, Eliminations and Other includes the results of theChina andIndia distribution businesses, intersegment eliminations, including profit on intersegment sales, unrealized mark-to-market gains and losses on derivatives, debt expenses and Streamsong Resort® results of operations. 37
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For the three months endedSeptember 30, 2022 , gross margin for Corporate, Eliminations and Other was$(2.9) million , compared to$(67.9) million for the same period in the prior year. Gross margin was favorably impacted by lower elimination of profit on intersegment sales in the current year period, which changed from the prior year period by approximately$164.2 million . Gross margin was unfavorably impacted by a net unrealized loss of$75.5 million in the current year period, primarily on foreign currency derivatives, compared to a net unrealized loss of$26.3 million in the prior year period. Gross margin was also negatively impacted by distribution operations, primarily inChina , due to inventory adjustments.China andIndia , collectively, had revenue of$158.6 million and gross margin of$(13.7) million in the current year period, compared to revenue of$136.2 million and gross margin of$22.9 million in the prior year period. For the nine months endedSeptember 30, 2022 , gross margin for Corporate, Eliminations and Other was$(62.8) million , compared to$(7.4) million for the same period in the prior year. Gross margin was unfavorably impacted by a net unrealized loss of$34.5 million in the current year period, primarily on foreign currency derivatives, compared to a net unrealized gain of$3.6 million in the prior year period. Gross margin was also unfavorably impacted by higher elimination of profit on intersegment sales in the current year period, which changed from the prior year period by approximately$51.1 million . Gross margin was positively impacted by distribution operations, primarily inChina , due to increased pricing, which was partially offset by inventory adjustments and increased product costs.China andIndia , collectively had revenue of$769.5 million and gross margin of$137.6 million in the current year period, compared to revenue of$475.8 million and gross margin of$95.9 million in the prior year period.
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