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, 2019 (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."
Results of Operations
The following table shows the results of operations for the three and six months
ended June 30, 2020 and June 30, 2019:
                                              Three months ended                                                                             Six months ended
                                                   June 30,                                                2020-2019                                                June 30,                         2020-2019
(in millions, except per share data)        2020               2019             Change            Percent              2020               2019             Change            Percent
Net sales                               $ 2,044.7          $ 2,176.9          $ (132.2)                (6) %       $ 3,842.8          $ 4,076.6          $ (233.8)                (6) %
Cost of goods sold                        1,787.7            1,949.7            (162.0)                (8) %         3,544.4            3,539.9               4.5                  -  %
Gross margin                                257.0              227.2              29.8                 13  %           298.4              536.7            (238.3)               (44) %
Gross margin percentage                        13  %              10  %                                                    8  %              13  %
Selling, general and administrative
expenses                                     95.1               78.1              17.0                 22  %           163.0              171.6              (8.6)                (5) %

Impairment, restructuring and other
expenses                                        -              369.4            (369.4)                   NM               -              369.4            (369.4)                   NM
Other operating expense                      76.1               21.6              54.5                    NM           115.8               35.5              80.3                    NM
Operating earnings (loss)                    85.8             (241.9)            327.7                    NM            19.6              (39.8)             59.4                    NM

Interest expense, net                       (49.3)             (46.0)             (3.3)                 7  %           (90.4)             (93.0)              2.6                 (3) %
Foreign currency transaction gain
(loss)                                       34.1               20.8              13.3                 64  %          (180.1)              43.4            (223.5)                   NM
Other income (expense)                        2.4               (3.7)              6.1                    NM             6.9               (4.8)             11.7                    NM
Earnings (loss) from consolidated
companies before income taxes                73.0             (270.8)            343.8                    NM          (244.0)             (94.2)           (149.8)               159  %
Benefit from income taxes                    (2.7)             (51.7)             49.0                (95) %          (135.7)              (5.1)           (130.6)                   NM
Earnings (loss) from consolidated
companies                                    75.7             (219.1)            294.8                    NM          (108.3)             (89.1)            (19.2)                22  %
Equity in net loss of nonconsolidated
companies                                   (29.8)             (11.2)            (18.6)               166  %           (49.8)             (11.3)            (38.5)                   NM
Net earnings (loss) including
noncontrolling interests                     45.9             (230.3)            276.2                    NM          (158.1)            (100.4)            (57.7)                57  %
Less: Net (loss) earnings attributable
to noncontrolling interests                  (1.5)               2.8              (4.3)                   NM            (2.5)               1.9              (4.4)                   NM
Net earnings (loss) attributable to
Mosaic                                  $    47.4          $  (233.1)         $  280.5                    NM       $  (155.6)         $  (102.3)         $  (53.3)                52  %
Diluted net earnings (loss) per share
attributable to Mosaic                  $    0.12          $   (0.60)         $   0.72                    NM       $   (0.41)         $   (0.27)         $  (0.14)                52  %
Diluted weighted average number of
shares outstanding                          381.3              385.8                                                   378.9              385.7


Overview of Consolidated Results for the three months ended June 30, 2020 and
2019
For the three months ended June 30, 2020, Mosaic had net earnings of $47.4
million, or $0.12 per diluted share, compared to a net loss of $233.1 million,
or $(0.60) per diluted share, for the prior year period. The current period
results were impacted by $50 million, or $0.01 per diluted share, related to the
following notable items:
•Asset retirement obligation costs of $50 million, or $(0.07) per diluted share,
related to new regulations



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•Depreciation expense of $22 million, or $(0.03) per diluted share, related to
the acceleration of the closure of our K1 and K2 mine shafts at our Esterhazy,
Saskatchewan mine as we ramp up K3
•Other operating expenses of $19 million, or $(0.03) per diluted share, related
to maintaining closed and indefinitely idled facilities
•Idle plant costs of $8 million, or $(0.01) per diluted share, related to the
government-mandated shutdown on March 16, 2020, of our Miski Mayo phosphate rock
mine in Peru due to the Covid-19 outbreak
•Write-down of assets of $4 million, or $(0.01) per diluted share
•A change in the effective annual tax rate creating a benefit of $32 million, or
$0.08 per diluted share
•Foreign currency transaction gain of $34 million, or $0.05 per diluted share
•Unrealized gain on derivatives of $9 million, or $0.01 per diluted share
•Other operating income of $7 million, or $0.01 per diluted share, related to a
legal settlement
•Discrete income tax benefit of $3 million, or $0.01 per diluted share
•Other non-operating income of $3 million, or $0.00 per diluted share, related
to a realized gain on RCRA trust securities
During the three months ended June 30, 2019, our results included:
•Closure costs for our Plant City, Florida phosphates manufacturing facility of
$369 million, or $(0.73) per diluted share
•Foreign currency transaction gains of $21 million, or $0.04 per diluted share
•Discrete income tax expense of $10 million, or $(0.02) per diluted share
•Other operating income of $8 million, or $0.02 per diluted share, related to
insurance proceeds for the 2017 flooding at the Miski Mayo mine
•Unrealized gains on derivatives of $7 million, or $0.01 per diluted share
•Other operating expenses of $6 million, or $(0.02) per diluted share, related
to the Acquisition
•Expenses of $5 million, or $(0.01) per diluted share, related to repairing the
lateral movement at the Gypstack at our Uncle Sam facility in Louisiana
•Asset retirement obligation costs of $3 million, or $(0.01) per diluted share,
related to closed facilities
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.
In addition to the items noted above, our operating results during the three
months ended June 30, 2020, were unfavorably impacted in our Potash segment by
lower average selling prices compared to the prior year period. Selling prices
began declining in the first half of 2019 due to adverse weather conditions in
North America. They have continued to decline in the current year due to lower
export prices because of China and India contract prices settling lower than
expected, and new suppliers entering the marketplace. Potash sales volumes
increased in North America in the current year period due to strong in-season
demand driven by an early spring, compared to the same period in the prior year.
In the prior year, sales volumes were low as a result of adverse weather
conditions in North America, which resulted in a late spring season, and a full
product pipeline. Export sales volumes increased in the current year from the
same period in the prior year, due to the settlement of the China and India
contracts, and strong shipments to Brazil in the current year period.
Operating results for the three months ended June 30, 2020 were favorably
impacted by our Phosphates segment. Phosphates recorded increased sales volumes
in North America due to a strong spring application season in the current
period, compared to the prior year period, which was unfavorably impacted by
rain and flooding. In addition, raw material costs, primarily sulfur and
ammonia, were favorable in the second quarter of 2020, compared to the same
period in the prior year. This was partially offset by a decrease in average
selling prices compared to the same period in the prior year. Although selling
prices have risen from the low levels seen at the end of 2019, they are still
below the same period of the prior year. The prior year was adversely impacted
by increased supply, due to new capacity coming online, and reduced demand, due
to adverse weather conditions in



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North America. Phosphate selling prices have continued to strengthen into the
third quarter of 2020, due to improved market sentiment.
For the three months ended June 30, 2020, operating results were favorably
impacted by our Mosaic Fertilizantes segment. Sales volumes increased compared
to the same period in the prior year, due to better farmer economics, and market
sentiment of increasing phosphate prices. Operating results were also favorably
impacted by foreign currency impacts and lower raw material costs in the current
year compared to the prior year period. Raw material costs were higher in the
prior year, as we imported rock to meet production needs because three of our
mines were temporarily idled as we worked during the prior year period to meet
new legislation regarding tailing dams in Brazil. This resulted in higher idle
plant costs in the prior year as well. Operating results were unfavorably
impacted by lower average selling prices in the current year compared to the
prior year period, driven by international pricing trends and the mix of
products sold.
Other Highlights
•Ma'aden Wa'ad Al Shamal Phosphate Company ("MWSPC"), a subsidiary of Saudi
Arabian Mining Company (Ma'aden), in which Mosaic holds a 25 percent interest,
refinanced its project level debt. The refinancing removes recourse to Mosaic by
all lenders to MWSPC, and defers principal paydown until June 30, 2022,
enhancing expected free cash flow. Mosaic's contractual commitment to make
future cash contributions to MWSPC has been eliminated.
•On June 26, 2020, we filed petitions with the U.S. Department of Commerce and
the U.S. International Trade Commission that request the initiation of
countervailing duty investigations into imports of phosphate fertilizers from
Morocco and Russia. The purpose of the petitions is to remedy the distortions
that foreign subsidies are causing in the U.S. market for phosphate fertilizers,
and thereby restore fair competition.
•We have experienced limited adverse financial and operational Covid-19 related
impacts to our operating facilities, employees, supply chain and logistics in
the first quarter of 2020 as agriculture, including fertilizer production, has
been deemed, by governments in each jurisdiction where we operating mines or
facilities, an "essential business" because of the role it plays in the
production of food. The Company implemented measures that are intended to
provide for the immediate health and safety of our employees, including working
remotely and alternating work schedules in order to minimize the number of
employees at one location. In an effort to contain the spread of the virus, many
government authorities, at locations where we do business, have issued "social
distancing or shelter in place" orders. In accordance with such orders,
operations at our Miski Mayo mine in Peru were closed on March 16, 2020.
Operations resumed on May 13, 2020. Our Patrocino operations in Brazil were also
closed for ten days, restarting operations on April 7, 2020. These closures
resulted in minimal disruptions to our operations.
•In July, 2020, we extended the term and increased the limit of our revolving
credit facility. As of the date of the agreement, we held a liquidity position,
including cash and available committed lines of credit, in excess of $3 billion.
Overview of Consolidated Results for the six months ended June 30, 2020 and 2019
Net loss attributable to Mosaic for the six months ended June 30, 2020 was
$(155.6) million, or $(0.41) per diluted share, compared to a net loss of
$(102.3) million, or $(0.27) per diluted share, for the same period a year ago.
The net loss for the six months ended June 30, 2020 was impacted by $362
million, or $(0.47) per diluted share, due to the following notable items:
•Foreign currency transaction loss of $180 million, or ($0.33) per diluted share
•Asset retirement obligation costs of $50 million, or $(0.07) per diluted share,
related to new regulations
•Depreciation expense of $44 million, or $(0.06) per diluted share, related to
the acceleration of the closure of our K1 and K2 mine shafts at our Esterhazy,
Saskatchewan mine as we ramp up K3
•Unrealized loss on derivatives of $42 million, or ($0.08) per diluted share
•Other operating expenses of $35 million, or $(0.07) per diluted share, related
to maintaining closed and indefinitely idled facilities
•Idle plant costs of $13 million, or $(0.02) per diluted share, related to the
government-mandated shutdown on March 16, 2020, of our Miski Mayo phosphate rock
mine in Peru due to the Covid-19 outbreak



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•Other operating expenses of $9 million, or $(0.02) per diluted share, related
to an increase in reserves for legal contingencies of the Acquired Business (as
defined below)
•Write-down of assets of $4 million, or $(0.01) per diluted share
•A change in the effective annual tax rate, creating a benefit of $32 million,
or $0.08 per diluted share
•Discrete income tax benefit of $31 million, or $0.09 per diluted share
•Other non-operating income of $8 million, or $0.01 per diluted share, related
to a realized gain on RCRA trust securities
•Other operating income of $7 million, or $0.01 per diluted share, related to a
legal settlement
During the six months ended June 30, 2019, our results included:
•Plant City closing costs of $369 million, or $(0.73) per diluted share
•Foreign currency transaction gains of $44 million, or $0.09 per diluted share
•Unrealized gains on derivatives of $32 million, or $0.06 per diluted share
•Other operating income of $8 million, or $0.02 per diluted share, related to
insurance proceeds for the 2017 flooding at the Miski Mayo mine
•Other operating expenses of $15 million, or $(0.04) per diluted share, related
to the Acquisition, partially offset by income of $12 million, or $0.03 per
diluted share, related to the reversal of our previously estimated and accrued
earn-out obligation to Vale
•Expenses of $14 million, or $(0.03) per diluted share, related to repairing the
lateral movement at the Gypstack at our Uncle Sam facility in Louisiana
•Discrete income tax expense of $10 million, or $(0.02) per diluted share
Results for the six months ended June 30, 2020 and 2019 reflected the factors
discussed above in the discussion for the three months ended June 30, 2020 and
2019, 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 Potash segment for the six months ended June 30, 2020
were unfavorably impacted by a decrease in the average selling price of potash
compared to the prior year period partially offset by higher sales volumes.
These results were driven by the factors mentioned above in the three-month
discussion, as well as a strong winter fill program in North America, which
resulted in higher sales volumes in the first quarter of 2020.
Operating results in our Phosphates segment for the six months ended June 30,
2020 were unfavorably impacted by lower 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 favorably impacted by higher finished product sales volumes. In
addition to the factors mentioned above in the three month discussion, North
America experienced a late fall application season which drove increased sales
volumes in the first quarter of 2020. Current year operating results were also
favorably impacted by lower idle plant and turnaround costs that occurred in the
prior year.
For the six months ended June 30, 2020, operating results in our Mosaic
Fertilizantes segment were favorably impacted by an increase in sales volumes in
the current year compared to the prior year period, driven by the factors
mentioned above in the three-month discussion. Operating results were also
favorably impacted by foreign currency impacts, lower raw material costs and
lower idle plant costs, as discussed above in the three-month discussion. These
results were offset by the unfavorable impact of lower average sales prices, as
discussed above in the three-month discussion.
Other Highlights

•Cash on hand was $1.1 billion at June 30, 2020, an increase of over $500 million from December 31, 2019. We are diligently managing working capital requirements and capital expenditures, which are approximately $90 million lower than the prior year period. We also retired approximately $500 million of short-term debt and structured accounts payables in the second quarter of 2020.





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•We continue to execute well and drive toward our 2021 operational targets.
Mosaic Fertilizantes is on track to achieve the previously announced $50 million
in transformational savings targeted for 2020. The Esterhazy K3 mine development
project continues to progress, with the third automated miner placed into
service in the first quarter of 2020.
Phosphates Net Sales and Gross Margin
The following table summarizes the Phosphates segment's net sales, gross margin,
sales volume, selling prices and raw material prices:
                                         Three months ended                                                                         Six months ended
                                              June 30,                                             2020-2019                                               June 30,                         2020-2019
(in millions, except price per
tonne or unit)                          2020              2019            Change           Percent             2020              2019             Change            Percent
Net sales:
North America                       $   383.0          $ 444.3          $ (61.3)               (14) %       $  764.7          $  842.5          $  (77.8)                (9) %
International                           379.4            473.1            (93.7)               (20) %          617.1             880.9            (263.8)               (30) %
Total                                   762.4            917.4           (155.0)               (17) %        1,381.8           1,723.4            (341.6)               (20) %
Cost of goods sold                      744.7            929.2           (184.5)               (20) %        1,447.0           1,680.4            (233.4)               (14) %
Gross margin                        $    17.7          $ (11.8)         $  29.5                    NM       $  (65.2)         $   43.0          $ (108.2)                   NM
Gross margin as a percentage of net
sales                                       2  %            (1) %                                                 (5) %              2  %
Sales volumes(a) (in thousands of
metric tonnes)
DAP/MAP                                 1,166            1,275             (109)                (9) %          2,498             2,416                82                  3  %
Performance and Other(b)                1,069              909              160                 18  %          1,656             1,558                98                  6  %

    Total finished product tonnes       2,235            2,184             

 51                  2  %          4,154             3,974               180                  5  %
Rock                                      119              673             (554)               (82)              288               865              (577)               (67) %
Total Phosphates Segment Tonnes(a)      2,354            2,857             (503)               (18) %          4,442             4,839              (397)                (8) %
Realized prices ($/tonne)
Average finished product selling
price (destination)(a)              $     338          $   398          $   (60)               (15) %       $    328          $    418          $    (90)               (22) %
  DAP selling price (fob mine)      $     287          $   345          $   (58)               (17) %       $    281          $    359          $    (78)               (22) %
Average rock selling price
(destination)(a)                    $      61          $    71          $   (10)               (14) %       $     60          $     72          $    (12)               (17) %
Average cost per unit consumed in
cost of goods sold:
Ammonia (metric tonne)              $     289          $   337          $   (48)               (14) %       $    298          $    344          $    (46)               (13) %
Sulfur (long ton)                   $      76          $   138          $   (62)               (45) %       $     77          $    145          $    (68)               (47) %
Blended rock (metric tonne)         $      61          $    63          $    (2)                (3) %       $     61          $     62          $     (1)                (2) %
Production volume (in thousands of
metric tonnes) - North America          2,117            2,050               67                  3  %          3,978             4,042               (64)                (2) %


____________________________

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







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Three months ended June 30, 2020 and June 30, 2019
The Phosphates segment's net sales were $762.4 million for the three months
ended June 30, 2020, compared to $917.4 million for the three months ended
June 30, 2019. The decrease in net sales was primarily due to lower selling
prices in the current year period, which impacted net sales by approximately
$120 million. We also experienced lower sales volumes from Miski Mayo, which was
under a government-mandated shut down for part of the current period due to
Covid-19, impacting net sales by approximately $30 million.
Our average finished product selling price was $338 per tonne for the three
months ended June 30, 2020, a decrease of 15% from the same period a year ago,
due to the factors discussed in the Overview.
The Phosphates segment's sales volumes of finished products increased by 2% for
the three months ended June 30, 2020, compared to the same period in the prior
year, due to the factors discussed in the Overview.
Gross margin for the Phosphates segment increased to $17.7 million for the three
months ended June 30, 2020, from $(11.8) million for the three months ended
June 30, 2019. The increase in gross margin in the current year period was
primarily due to significantly lower raw materials costs, as discussed below,
which impacted gross margin by approximately $105 million, and lower idle plant
and turnaround costs of approximately $40 million. These benefits were partially
offset by the impact of lower finished product prices of approximately $120
million.
The average consumed price for ammonia for our North American operations
decreased to $289 per tonne for the three months ended June 30, 2020, from $337
in the same period a year ago. We typically purchase approximately one-third of
our ammonia from various suppliers in the spot market, with the remaining
two-thirds either purchased through an ammonia supply agreement or produced
internally at our Faustina, Louisiana location. The average consumed sulfur
price for our North American operations decreased to $76 per long ton for the
three months ended June 30, 2020, from $138 in the same period a year ago. The
purchase prices of these raw materials are driven by global supply and demand.
The consumed ammonia and sulfur prices also include transportation,
transformation, and storage costs.
The average consumed cost of purchased and produced phosphate rock decreased to
$61 per tonne for the three months ended June 30, 2020, compared to $63 per
tonne for the three months ended June 30, 2019. For the three months ended
June 30, 2020, our North American phosphate rock production increased to 3.3
million tonnes from 3.1 million tonnes for the same period of the prior year due
to favorable performance at all of our North American mines. In the prior year
period, production suffered due to operational challenges as we transitioned
into new mining areas.
The Phosphates segment's production of crop nutrient dry concentrates and animal
feed ingredients remained steady at 2.1 million tonnes for the three months
ended June 30, 2020, compared to the same period in the prior year. Our
operating rate for processed phosphate production increased slightly to 85% for
the three months ended June 30, 2020, from 84% for the same period in 2019.
Six months ended June 30, 2020 and June 30, 2019
The Phosphates segment's net sales were $1.4 billion for the six months ended
June 30, 2020, compared to $1.7 billion for the six months ended June 30, 2019.
The decrease in net sales was due to lower selling prices in the current year
period, which unfavorably impacted net sales by approximately $330 million, and
lower sales volumes from Miski Mayo, which unfavorably impacted net sales by
approximately $30 million. That facility was subject to a government mandated
shutdown for a portion of the current year period. This was partially offset by
higher sales volumes of approximately $20 million.
Our average finished product selling price was $328 per tonne for the six months
ended June 30, 2020, a decrease of 22% per tonne from the same period a year
ago, due to the factors discussed in the Overview.
The Phosphates segment's sales volumes of finished products increased by 5% for
the six months ended June 30, 2020, compared to the same period in the prior
year ago, due to the factors discussed in the Overview.
Gross margin for the Phosphates segment decreased to $(65.2) million for the six
months ended June 30, 2020, from $43.0 million for the six months ended June 30,
2019. The decrease in gross margin in the current year period was due to the
impact of lower finished product prices of approximately $330 million. This was
partially offset by lower raw material costs, primarily sulfur, as discussed
below, impacting gross margin by approximately $170 million, and lower costs of
approximately $50 million related to the timing of idle plant and turnaround
costs in the current year period.



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The average consumed price for ammonia for our North American operations was
$298 per tonne for the six months ended June 30, 2020, compared to $344 in the
same period a year ago. The average consumed price for sulfur for our North
American operations decreased to $77 per long ton for the six months ended
June 30, 2020, from $145 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 was $61 per
tonne for the six months ended June 30, 2020, compared to $62 per tonne for the
prior year period. Our North American phosphate rock production increased to 6.7
million tonnes for the six months ended June 30, 2020, compared to 5.9 million
for the six months ended June 30, 2019. The increase from the prior year is due
to favorable performance across our North American mines. In the prior year
period, production suffered due to operational challenges as we transitioned
into new mining areas.
The Phosphate segment's production of crop nutrient dry concentrates and animal
feed ingredients was 3.98 million tonnes for the six months ended June 30, 2020,
compared to 4.04 million tonnes in the prior year period. For the six months
ended June 30, 2020, our operating rate for processed phosphate production
decreased to 80%, compared to 83% in the same period of the prior year.
Potash Net Sales and Gross Margin
The following table summarizes the Potash segment's net sales, gross margin,
sales volume and selling price:
                                       Three months ended                                                                       Six months ended
                                            June 30,                                            2020-2019                                             June 30,                         2020-2019
(in millions, except price per
tonne or unit)                        2020              2019            Change           Percent            2020             2019             Change            Percent
Net sales:
North America                     $   315.2          $ 296.4          $  18.8                 6  %       $ 597.7          $  531.6          $   66.1                12  %
International                         240.2            302.7            (62.5)              (21) %         399.3             571.0            (171.7)              (30) %
Total                                 555.4            599.1            (43.7)               (7) %         997.0           1,102.6            (105.6)              (10) %
Cost of goods sold                    423.8            418.0              5.8                 1  %         756.3             736.1              20.2                 3  %
Gross margin                      $   131.6          $ 181.1          $ (49.5)              (27) %       $ 240.7          $  366.5          $ (125.8)              (34) %
Gross margin as a percentage of
net sales                                24  %            30  %                                               24                33  %

Sales volume(a) (in thousands of
metric tonnes)
MOP                                   2,282            1,919              363                19  %         3,991             3,648               343                 9  %
Performance and Other(b)                277              244               33                14  %           467               376                91                24  %
Total Potash Segment Tonnes           2,559            2,163              396                18  %         4,458             4,024               434                11  %
Realized prices ($/tonne)
Average finished product selling
price (destination)               $     217          $   277          $   (60)              (22) %       $   224          $    274          $    (50)              (18) %
MOP selling price (fob mine)      $     180          $   246          $   (66)              (27) %       $   188          $    244          $    (56)              (23) %
Production volume (in thousands
of metric tonnes)                     2,198            2,180               18                 1  %         4,266             4,434              (168)               (4) %

______________________________


(a) Includes intersegment sales volumes.
(b) Includes sales volumes of K-mag, Aspire and animal feed ingredients.
Three months ended June 30, 2020 and June 30, 2019
The Potash segment's net sales decreased to $555.4 million for the three months
ended June 30, 2020, compared to $599.1 million 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 $155 million, partially offset by higher sales
volumes, which had a favorable impact on net sales of approximately $110
million.
Our average finished product selling price was $217 per tonne for the three
months ended June 30, 2020, compared to $277 per tonne for the same period a
year ago, as a result of the factors described in the Overview.



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The Potash segment's sales volumes of finished products increased to 2.56
million tonnes for the three months ended June 30, 2020, compared to 2.16
million tonnes in the same period a year ago, due to early spring demand in
North America, and an increase in the sales through Canpotex in the current
period.
Gross margin for the Potash segment decreased to $131.6 million for the three
months ended June 30, 2020, from $181.1 million in the same period of the prior
year. The decrease in gross margin in the current year period is primarily due
to approximately $155 million of lower selling prices, partially offset by a
favorable sales volume impact of approximately $40 million. In addition, gross
margin was positively impacted by approximately $25 million of lower turnaround
costs due to timing of when the turnarounds occurred, lower plant spending of
approximately $30 million, and lower Canadian resource taxes of approximately $4
million as discussed below.
We had expense of $52.1 million from Canadian resource taxes for the three
months ended June 30, 2020, compared to $56.4 million in the same period a year
ago. Canadian royalty expense decreased to $7.8 million for the three months
ended June 30, 2020, compared to $11.0 million for the three months ended
June 30, 2019. The fluctuations in Canadian resource taxes are a result of a
decrease in average selling prices and margins, due to the factors discussed in
the Overview. The decrease in royalties is due to the reduction in sales
revenue.
We incurred $26 million in brine inflow management expenses, including
depreciation on brine assets, at our Esterhazy mine during the three months
ended June 30, 2020, compared to $36 million for the three months ended June 30,
2019. We have been effectively managing the brine inflows at Esterhazy since
1985, and from time to time we experience changes to the amounts and patterns of
brine inflows. Inflows continue to be within the range of our historical
experience. Brine inflow expenditures continue to reflect the cost of addressing
changing inflow patterns, including inflows from below our mine workings, which
can be more complex and costly to manage. Our past investments in remote
injection and increased pumping capacities facilitate our management of the
brine inflows and the amount of brine stored in the mine. We are continuing the
expansion of capacity in our Potash segment with the K3 shaft at our Esterhazy
mine. Once completed, this will provide us the opportunity to eliminate future
brine inflow management costs by closing our K1 and K2 shafts in the future.
Our operating rate for potash production was 91% for the current year period,
compared to 83% in the prior year period. The change in our operating rate from
the prior year period is primarily due to a change in our capacities as we
indefinitely idled our Colonsay, Saskatchewan mine in the fourth quarter of
2019.
Six months ended June 30, 2020 and June 30, 2019
The Potash segment's net sales decreased to $1.0 billion for the six months
ended June 30, 2020, 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 $240 million, partially offset by higher sales volumes,
which had a favorable impact on net sales of approximately $140 million.
Our average selling price was $224 per tonne for the six months ended June 30,
2020, compared to $274 per tonne for the same period a year ago, due to the
factors discussed above in the Overview.
The Potash segment's sales volumes increased to 4.5 million tonnes for the six
months ended June 30, 2020, compared to 4.0 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 $240.7 million for the six
months ended June 30, 2020, from $366.5 million for the same period in the prior
year. Gross margin was unfavorably impacted by approximately $240 million, due
to the decrease in average selling prices, partially offset by approximately $50
million, due to the impact of higher sales volumes. Gross margin was also
unfavorably impacted by $20 million of fixed cost absorption due to lower
production volumes and inventory unit values in the current year period. We saw
a favorable impact from lower turnaround costs of approximately $30 million due
to the timing of when turnarounds occurred, and approximately $30 million of
lower plant spending for the six months ended June 30, 2020 compared to the
prior year period. Gross margin was also favorably impacted in the current
period by approximately $20 million due to lower Canadian resource taxes and
royalties, as discussed below.
We incurred $83.8 million in Canadian resource taxes for the six months ended
June 30, 2020, compared to $103.3 million in the same period a year ago.
Canadian royalty expense decreased to $16.0 million for the six months ended
June 30, 2020, compared to $22.2 million for the six months ended June 30, 2019.
The fluctuations in Canadian resource taxes are due to the



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items discussed in the three-month discussion above. The decrease in Canadian
resource taxes and royalties is due to lower average selling prices in the
current year.
We incurred expense of $59 million, including depreciation on brine assets,
related to managing the brine inflows at our Esterhazy mine during the six
months ended June 30, 2020, compared to $72 million in the prior year period.
Our operating rate was 88% for the current year period, compared to 84% in the
prior year period.

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,                                              2020-2019                                               June 30,                         2020-2019
(in millions, except price per tonne
or unit)                                   2020              2019            Change           Percent              2020               2019             Change           Percent
Net Sales                              $   787.0          $ 832.7          $ (45.7)                (5) %       $ 1,518.1          $ 1,530.7          $ (12.6)                (1) %
Cost of goods sold                         686.3            797.5           (111.2)               (14) %         1,350.9            1,443.1            (92.2)                (6) %
Gross margin                           $   100.7          $  35.2          $  65.5                186  %       $   167.2          $    87.6          $  79.6                 91  %
Gross margin as a percent of net sales        13  %             4  %                                                  11                  6  %
Sales volume (in thousands of metric tonnes)
Phosphate produced in Brazil               1,161              763              398                 52  %           1,860              1,175              685                 58  %
Potash produced in Brazil                     71               81              (10)               (12) %             146                153               (7)                (5) %
Purchased nutrients for distribution       1,326            1,257               69                  5  %           2,629              2,301              328                 14  %
Total Mosaic Fertilizantes Segment
Tonnes                                     2,558            2,101              457                 22  %           4,635              3,629            1,006                 28  %
Realized prices ($/tonne)
Average finished product selling price
(destination)                          $     308          $   396          $   (88)               (22) %       $     328          $     422          $   (94)               (22) %
  Brazil MAP price (delivered price to
third party)                           $     314          $   446          $  (132)               (30) %       $     322          $     464          $  (142)               (31) %
Purchases ('000 tonnes)
DAP/MAP from Mosaic                          193              301             (108)               (36) %             347                463             (116)               (25) %
MicroEssentials® from Mosaic                 407              356               51                 14  %             524                558              (34)                (6) %
Potash from Mosaic/Canpotex                  708              558              150                 27  %           1,001              1,010               (9)                (1) %
Average cost per unit consumed in cost
of goods sold:
  Ammonia (metric tonne)               $     327          $   378          $   (51)               (13) %       $     340          $     394          $   (54)               (14) %
  Sulfur (long ton)                    $     100          $   196          $   (96)               (49) %       $     106          $     203          $   (97)               (48) %

Blended rock (metric tonne) $ 67 $ 106 $ (39)

               (37) %       $      71          $     104          $   (33)               (32) %
Production volume (in thousands of
metric tonnes)                             1,078              687              391                 57  %           2,032              1,576              456                 29  %

______________________________


Three months ended June 30, 2020 and June 30, 2019
The Mosaic Fertilizantes segment's net sales decreased to $787.0 million for the
three months ended June 30, 2020, from $832.7 million in the same period a year
ago. The decrease in net sales was due to lower sales prices, which unfavorably
impacted net sales by approximately $200 million, partially offset by higher
sales volumes in the current year period, which favorably impacted net sales by
approximately $170 million. Net sales were also unfavorably impacted by foreign
currency impacts of approximately $20 million.



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Our average finished product selling price was $308 per tonne for the three
months ended June 30, 2020, compared to $396 per tonne for the same period a
year ago, due to the decline in global prices described in the Overview.
The Mosaic Fertilizantes segment's sales volumes of finished products increased
to 2.6 million tonnes for the three months ended June 30, 2020, compared to 2.1
million tonnes in the same period a year ago, as a result of the factors
described in the Overview.
Gross margin for the Mosaic Fertilizantes segment increased to $100.7 million
for the three months ended June 30, 2020, from $35.2 million in the same period
of the prior year. Gross margin increased approximately $65 million in the
current year period compared to the current year primarily due to the favorable
impact of lower turnaround and idle costs of approximately $50 million due to
timing of when these occurred, a favorable impact from foreign currency changes
of approximately $40 million, lower raw materials costs of approximately $30
million, and high sales volumes which resulted in a favorable change of
approximately $20 million. These were partially offset by the negative impact of
approximately $70 million from lower sales prices compared to the prior year
period.
The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates
and animal feed ingredients increased 57%, to 1.1 million tonnes, for the three
months ended June 30, 2020, from 0.7 million tonnes in the prior year period.
For the three months ended June 30, 2020, our operating rate increased to 86%,
compared to 56% in the same period of the prior year. In the prior year period,
three of our mines were temporarily idled to address legislation which
introduced new rules regarding tailing dam safety, construction, environmental
licenses and operations.
For the three months ended June 30, 2020, our Brazilian phosphate rock
production increased to 1.1 million tonnes from 0.2 million tonnes for the prior
year period. The lower production in the prior year was due to the idling of
three of our mines.
Six months ended June 30, 2020 and 2019
The Mosaic Fertilizantes segment's net sales were $1.52 billion for the six
months ended June 30, 2020, compared to $1.53 billion in the prior year period.
Net sales were unfavorably impacted by lower sales prices of approximately $340
million, and foreign currency changes of approximately $50 million partially
offset by the favorable impact of higher sales volumes of approximately $380
million.
The average finished product selling price decreased $94 per tonne to $328 per
tonne for the six months ended June 30, 2020, compared to $422 per tonne in the
prior year period, primarily due to factors mentioned above in the Overview.
The Mosaic Fertilizantes segment's sales volume increased to 4.6 million tonnes
for the six months ended June 30, 2020, from 3.6 million tonnes in the same
period a year ago, due to factors mentioned above in the Overview.
Total gross margin for the six months ended June 30, 2020, increased to $167.2
million from $87.6 million in the same period in the prior year. In the current
year period, gross margin was favorably impacted by foreign currency impacts of
approximately $60 million, lower raw materials costs of approximately $50
million, favorable sales volumes of approximately $40 million, and lower
turnaround and idle costs of approximately $40 million due to the timing of when
these occurred and having returned to normal levels of production. These
increases were partially offset by lower sales prices of approximately $110
million in the current year period as compared to the prior year.
The Mosaic Fertilizantes segment's production of crop nutrient dry concentrates
and animal feed ingredients increased 29% to 2.0 million tonnes for the six
months ended June 30, 2020, from 1.6 million tonnes in the prior year period.
For the six months ended June 30, 2020, our operating rate was 63%, the same
rate as the prior year period.
For the six months ended June 30, 2020, our Brazilian phosphate rock production
increased to 2.1 million tonnes from 1.0 million tonnes for the same period of
the prior year, due to the temporary idling of our mines in the prior year
period as discussed in the three month discussion.
Corporate, Eliminations and Other
In addition to our three operating segments, we assign certain costs to
Corporate, Eliminations and Other, which is presented separately in Note 17 to
our Notes to Condensed Consolidated Financial Statements. Corporate,
Eliminations and Other includes the results of the China and India distribution
businesses, intersegment eliminations, including profit on intersegment sales,
unrealized mark-to-market gains and losses on derivatives, debt expenses and
Streamsong Resort® results of operations.



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For the three months ended June 30, 2020, gross margin for Corporate,
Eliminations and Other was $7.0 million, compared to $22.7 million for the same
period in the prior year. The change was driven by a net unrealized gain of $9.2
million in the current year period, primarily on foreign currency derivatives,
compared to a net unrealized gain of $7.1 million in the prior year period.
Results were also impacted by a higher elimination of profit on intersegment
sales in the current year period, which contributed to the change from the prior
year by approximately $24.8 million. Distribution operations in India and China
had revenue of $161.5 million and gross margin of $20.0 million in the current
year period, compared to revenue of $133.3 million and gross margin of $10.2
million in the prior year period. The increase in revenue during the current
year period compared to the prior year was due to the timing of settlement of
certain supply agreements.
For the six months ended June 30, 2020, gross margin for Corporate, Eliminations
and Other was $(44.3) million, compared to $39.6 million for the same period in
the prior year. The change was driven by a net unrealized loss of $41.6 million
in the current year period, primarily on foreign currency derivatives, compared
to a net unrealized gain of $32.0 million in the prior year period. Results were
also impacted by a lower elimination of profit on intersegment sales in the
current year period, which contributed to the change from the prior year by
approximately ($11.4) million. Distribution operations in India and China had
revenue of $238.3 million and gross margin of $22.0 million in the current year
period, compared to revenue of $226.5 million and gross margin of $19.2 million
in the prior year period.
Other Income Statement Items
                                        Three months ended                                                                       Six months ended
                                             June 30,                                            2020-2019                                             June 30,                        2020-2019
(in millions)                          2020              2019            Change           Percent            2020             2019             Change           Percent
Selling, general and
administrative expenses            $    95.1           $ 78.1          $  17.0                22  %       $ 163.0          $  171.6          $  (8.6)               (5) %

Impairment, restructuring and
other expenses                             -            369.4           (369.4)             (100) %             -             369.4           (369.4)                  NM
Other operating expense                 76.1             21.6             54.5                   NM         115.8              35.5             80.3                   NM

Interest expense                       (57.0)           (53.1)            (3.9)                7  %        (107.8)           (108.0)             0.2                 0  %
Interest income                          7.7              7.1              0.6                 8  %          17.4              15.0              2.4                16  %
   Interest expense, net               (49.3)           (46.0)            (3.3)                7  %         (90.4)            (93.0)             2.6                (3) %
Foreign currency transaction gain
(loss)                                  34.1             20.8             13.3                64  %        (180.1)             43.4           (223.5)                  NM
Other income (expense)                   2.4             (3.7)             6.1                   NM           6.9              (4.8)            11.7                   NM
Benefit from income taxes               (2.7)           (51.7)            49.0               (95) %        (135.7)             (5.1)          (130.6)                  NM
Equity in net loss of
nonconsolidated companies              (29.8)           (11.2)           (18.6)              166  %         (49.8)            (11.3)           (38.5)                  NM


Selling, General and Administrative Expenses
Selling, general and administrative expenses were $95.1 million for the three
months ended June 30, 2020, compared to $78.1 million in the same period of the
prior year. The increase was due to approximately $17 million of higher
incentive compensation related expense compared to the prior year period.
Selling, general and administrative expenses were $163.0 million for the six
months ended June 30, 2020, compared to $171.6 million in the same period of the
prior year. The decrease from the prior year period was due to the reversal of
compensation expense of approximately $14 million related to lower total
shareholder return-based long-term incentive awards, as the Company did not meet
the performance hurdles for vesting in 2019. Other compensation related expense
was also approximately $13 million lower for the six months ended June 30, 2020,
compared to the prior year period. These decreases were partially offset by an
increase of approximately $10 million in professional services and higher
incentive compensation of approximately $10 million compared to the prior year
period.
Other Operating Expense
For the three months ended June 30, 2020, we had other operating expenses of
$76.1 million, compared to $21.6 million for the same period in the prior year.
The three months ended June 30, 2020 include approximately $50 million related
to asset retirement obligation expense for our closed Plant City, Florida,
facility compared to $3 million in the same period of the prior



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year due to new regulations. The current year period also includes approximately
$19 million related to costs for closed and indefinitely idled facilities,
partially offset by approximately $7 million received for a legal settlement.

For the six months ended June 30, 2020, we had other operating expenses of
$115.8 million, compared to $35.5 million for the same period in the prior year.
In addition to the asset retirement obligation expense and legal settlement
received mentioned above, the six months ended June 30, 2020 include
approximately $30 million related to costs for closed and indefinitely idled
facilities and an increase of approximately $10 million related to reserves for
legal matters.
Foreign Currency Transaction Gain (Loss)
We recorded a foreign currency transaction gain of $34.1 million and a loss of
$180.1 million for the three and six months ended June 30, 2020, compared to
gains of $20.8 million and $43.4 million for the three and six months ended
June 30, 2019, respectively. For the three months ended June 30, 2020, the gain
was primarily the result of the effect of the weakening of the U.S. dollar
relative to the Canadian dollar on significant U.S. dollar-denominated
intercompany loans, partially offset by the strengthening of the U.S. dollar
relative to the Brazilian real on significant U.S. dollar-denominated payables
held by our Brazilian subsidiaries.
For the six months ended June 30, 2020, the loss is primarily the result of the
effect of the strengthening of the U.S. dollar relative to the Canadian dollar
on significant U.S. dollar-denominated intercompany loans and the strengthening
of the U.S. dollar relative to the Brazilian real on significant U.S.
dollar-denominated payables held by our Brazilian subsidiaries. A portion of
these foreign currency gains and losses recorded in the Condensed Consolidated
Statement of (Loss) Earnings are offset in Accumulated Other Comprehensive
Income (Loss) in equity.
Equity in Net (Loss) Earnings of Nonconsolidated Companies
For the three and six months ended June 30, 2020, we had equity in net loss of
nonconsolidated companies of $29.8 million and $49.8 million, respectively,
compared to equity in net loss of nonconsolidated companies of $11.2 million and
$11.3 million for the same periods in the prior year. This loss is primarily
related to operations at MWSPC, which had lower production caused by a temporary
shutdown at the beneficiation plant during the current year quarter.
Provision for (Benefit from) Income Taxes

Three months ended       Effective Tax Rate      Provision for (Benefit from) Income Taxes
June 30, 2020                        (3.7) %    $                                (2.7)
June 30, 2019                        19.1  %    $                               (51.7)

Six months ended         Effective Tax Rate      Provision for (Benefit from) Income Taxes
June 30, 2020                        55.6  %    $                              (135.7)
June 30, 2019                         5.4  %    $                                (5.1)


Income tax expense was a benefit of $2.7 million and the effective tax rate was
(3.7)% for the three months ended June 30, 2020.
For the three months ended June 30, 2020, tax expense specific to the period was
a benefit of approximately $2.5 million. This consisted primarily of tax benefit
of $3.0 million recorded for interest income on AMT tax refunds. In addition to
items specific to the period, our income tax rate is impacted by the mix of
earnings across the jurisdictions in which we operate, by a benefit associated
with depletion, and by the impact of certain entities being taxed in both
foreign jurisdictions and the U.S., including foreign tax credits for various
taxes incurred.
Generally, for interim periods, income tax is equal to the total of (1)
year-to-date pretax income multiplied by our forecasted effective tax rate plus
(2) tax expense items specific to the period. In situations where we expect to
report losses for which we do not expect to receive tax benefits, we are
required to apply separate forecasted effective tax rates to those jurisdictions
rather



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than including them in the consolidated effective tax rate. For the three months
ended June 30, 2020, income tax expense was impacted by this set of rules,
resulting in an additional cost of $18.8 million compared to what would have
been recorded under the general rule on a consolidated basis.
For the six months ended June 30, 2020, tax expense specific to the period was a
benefit of approximately $30.8 million. This consisted primarily of a tax
benefit of $25.1 million recorded related to the impacts of the Coronavirus Aid,
Relief, and Economic Security Act ("CARES Act") to prior years. The CARES Act
provides various tax relief measures to taxpayers impacted by the coronavirus.
Tax expense specific to the period also included a benefit of $5.7 million, of
which $5.5 million related to release of the sequestration on AMT. In addition
to items specific to the period, our income tax rate is impacted by the mix of
earnings across the jurisdictions in which we operate, by a benefit associated
with depletion, and by the impact of certain entities being taxed in both
foreign jurisdictions and the U.S., including foreign tax credits for various
taxes incurred.
Critical Accounting Estimates
The Condensed Consolidated Financial Statements are prepared in conformity with
GAAP. In preparing the Condensed Consolidated Financial Statements, we are
required to make various judgments, estimates and assumptions that could have a
significant impact on the results reported in the Condensed Consolidated
Financial Statements. We base these estimates on historical experience and other
assumptions believed to be reasonable by management under the circumstances.
Changes in these estimates could have a material effect on our Condensed
Consolidated Financial Statements.
The basis for our financial statement presentation, including our significant
accounting estimates, is summarized in Note 2 to the Condensed Consolidated
Financial Statements in this report. A summary description of our significant
accounting policies is included in Note 2 to the Consolidated Financial
Statements in our 10-K Report. Further detailed information regarding our
critical accounting estimates is included in Management's Discussion and
Analysis of Results of Operations and Financial Condition in our 10-K Report.
Liquidity and Capital Resources
As of June 30, 2020, we had cash and cash equivalents of $1.1 billion,
short-term debt of $0.6 billion, long-term debt, including current maturities,
of approximately $4.6 billion, and stockholders' equity of approximately $8.7
billion. We have a target liquidity buffer of up to $3.0 billion, including cash
and available committed 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 ratings. Our capital allocation
priorities include maintaining our investment grade ratings and financial
strength, sustaining our assets, including ensuring the safety and reliability
of our assets, investing to grow our business, either through organic growth or
taking advantage of strategic opportunities, and returning excess cash to
shareholders, including paying our dividend. During the six months ended
June 30, 2020, we invested $520.7 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 credit facilities,
as needed, will be sufficient to finance our operations, including our capital
expenditures, existing strategic initiatives and expected dividend payments, for
the next 12 months. There can be no assurance, however, that we will continue to
generate cash flows at or above current levels. As of June 30, 2020, we had
$1.99 billion available under our $2.0 billion revolving credit facility. Our
credit facilities, including the revolving credit facility and our term loans,
require us to maintain certain financial ratios, as discussed in Note 10 of our
Notes to Consolidated Financial Statements in our 10-K Report.  We were in
compliance with these ratios as of June 30, 2020.
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 June 30, 2020. 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.



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The following table represents a comparison of the net cash provided by
operating activities, net cash provided by or used in investing activities, and
net cash used in or provided by financing activities for the six months ended
June 30, 2020 and June 30, 2019:
                                                      Six months ended
                (in millions)                                    June 30, 2020                                            2020-2019
Cash Flow                                         2020                  2019            Change            Percent
Net cash provided by operating activities     $ 1,003.6              $ 331.8          $ 671.8                      NM
Net cash used in investing activities            (527.6)              (687.6)           160.0                  (23)
Net cash provided by (used in) financing
activities                                        167.6               (121.5)           289.1                      NM


Operating Activities
During the six months ended June 30, 2020, net cash provided by operating
activities was $1,003.6 million, compared to $331.8 million for the six months
ended June 30, 2019. Our results of operations, after non-cash adjustments to
net earnings, contributed $546 million to cash flows from operating activities
during the six months ended June 30, 2020, compared to a contribution of $729.9
million as computed on the same basis for the prior year period. During the six
months ended June 30, 2020, we had a favorable working capital change of $457.6
million, compared to an unfavorable change of $398.1 million during the six
months ended June 30, 2019.
The change in working capital for the six months ended June 30, 2020, was
primarily driven by an increase in accounts payable and accrued expenses of
$391.0 million, a decrease in accounts receivables of $42.8 million and a
decrease in other current and noncurrent assets of $55.0 million, partially
offset by an increase in inventories of $70.6 million. The increase in accounts
payable was primarily due to an increase in product purchases by our
international locations, as they build for their high seasons. Accrued expenses
increased due to liabilities associated with customer prepayments in Brazil, as
they prepare for their high season. The decrease in accounts receivables was
driven primarily by lower selling prices and timing of receipts, as we had fewer
days outstanding at June 30, 2020. The decrease in other current and noncurrent
assets is due to the receipt of tax refunds in the current period. The increase
in inventories was primarily due to building inventory volumes in our
international locations.
Investing Activities
Net cash used in investing activities was $527.6 million for the six months
ended June 30, 2020, compared to $687.6 million for the same period a year ago.
We had capital expenditures of $520.7 million for the six months ended June 30,
2020, compared to $608.8 million in the prior year period. The decrease was due
to deferring certain capital projects until later in the year and the timing of
payments.
Financing Activities
Net cash provided by financing activities for the six months ended June 30,
2020, was $167.6 million, compared to $121.5 million for the same period in the
prior year. For the six months ended June 30, 2020, we had net proceeds from
borrowings on short-term debt of $573.5 million, compared to $81.8 million in
the prior year. During the current year, to increase available cash on hand, we
entered into short-term inventory and accounts receivable financing agreements
under which we borrowed $101.5 million and $350.3 million, respectively, and had
other short-term net borrowings of $121 million. In response to the economic
uncertainty created by the Covid-19 outbreak, we drew $400 million on our
revolving credit facility in the first quarter of 2020, which was repaid in the
current quarter. We had net payments on structured accounts payable of $336.3
million, compared to $152.7 million in the prior year period. We also paid
dividends of $37.9 million in the current year period. We have not made any
repurchases of our Common Stock during the six months of 2020.






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Debt Instruments, Guarantees and Related Covenants
See Notes 12 and 18 to the Consolidated Financial Statements in our 10-K Report.
Financial Assurance Requirements
In addition to various operational and environmental regulations related to our
Phosphates segment, we are subject to financial assurance requirements. In
various jurisdictions in which we operate, particularly Florida and Louisiana,
we are required to pass a financial strength test or provide credit support,
typically in the form of surety bonds, letters of credit, certificates of
deposit or trust funds. Further information regarding financial assurance
requirements is included in Management's Discussion and Analysis of Results of
Operations and Financial Condition in our 10-K Report, under "EPA RCRA
Initiative," and in Note 8 to our Condensed Consolidated Financial Statements in
this report.
Off-Balance Sheet Arrangements and Obligations
Information regarding off-balance sheet arrangements and obligations is included
in Management's Discussion and Analysis of Results of Operations and Financial
Condition in our 10-K Report and Note 15 to our Condensed Consolidated Financial
Statements in this report.
Contingencies
Information regarding contingencies is hereby incorporated by reference to Note
16 to our Condensed Consolidated Financial Statements in this report.



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Forward-Looking Statements
Cautionary Statement Regarding Forward Looking Information
All statements, other than statements of historical fact, appearing in this
report constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward looking statements
include, among other things, statements about our expectations, beliefs,
intentions or strategies for the future, including statements about proposed or
pending future transactions or strategic plans, statements concerning our future
operations, financial condition and prospects, statements regarding our
expectations for capital expenditures, statements concerning our level of
indebtedness and other information, and any statements of assumptions regarding
any of the foregoing. In particular, forward-looking statements may include
words such as "anticipate", "believe", "could", "estimate", "expect", "intend",
"may", "potential", "predict", "project" or "should". These statements involve
certain risks and uncertainties that may cause actual results to differ
materially from expectations as of the date of this filing.
Factors that could cause reported results to differ materially from those
expressed or implied by the forward-looking statements include, but are not
limited to, the following:
•business and economic conditions and governmental policies affecting the
agricultural industry where we or our customers operate, including price and
demand volatility resulting from periodic imbalances of supply and demand;
•the impact of the recent outbreak of the novel coronavirus Covid-19 on the
global economy and our business, suppliers, customers, employee and the
communities in which we operate, as further described in Part II, Item 1A of
this 10-Q Report;
•the sudden and severe drop in oil demand, which could lead to a significant
decline in production, and its impact on the availability and price of sulfur, a
key raw material input for our Phosphate, segment operations;
•because of political and economic instability in Brazil or changes in
government policy in Brazil, our operations could be disrupted as higher costs
of doing business could result, including those associated with implementation
of new freight tables and new mining legislation;
•changes in farmers' application rates for crop nutrients;
•changes in the operation of world phosphate or potash markets, including
continuing 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;
•political and economic instability in the Kingdom of Saudi Arabia, and in
general the future success of current plans for the MWSPC joint venture and any
future changes in those plans;
•build-up of inventories in the distribution channels for our products that can
adversely affect our sales volumes and selling prices;
•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, and may
result in excess inventory or product shortages;
•changes in the costs, or constraints on supplies, of raw materials or energy
used in manufacturing our products, or in the costs or availability of
transportation for our products;
•declines in our selling prices or significant increases in costs that can
require us to write down our inventories to the lower of cost or market, or
require us to impair goodwill or other long-lived assets, or establish a
valuation allowance against deferred tax assets;
•the effects on our customers of holding high cost inventories of crop nutrients
in periods of rapidly declining market prices for crop nutrients;



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•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;
•customer expectations about future trends in the selling prices and
availability of our products and in farmer economics;
•disruptions to existing transportation or terminaling facilities, including
those of Canpotex or any joint venture in which we participate;
•shortages or other unavailability of railcars, tugs, barges and ships for
carrying our products and raw materials;
•the effects of and change in trade, monetary, environmental, tax and fiscal
policies, laws and regulations;
•foreign exchange rates and fluctuations in those rates;
•tax regulations, currency exchange controls and other restrictions that may
affect our ability to optimize the use of our liquidity;
•other risks associated with our international operations, including any
potential and actual adverse effects related to the Miski Mayo mine;
•adverse weather conditions affecting our operations, including the impact of
potential hurricanes, excessive heat, cold, snow, rainfall or drought;
•difficulties or delays in receiving, challenges to, increased costs of
obtaining or satisfying conditions of, or revocation or withdrawal of required
governmental and regulatory approvals, including permitting activities;
•changes in the environmental and other governmental regulation that applies to
our operations, including federal legislation or regulatory action expanding the
types and extent of water resources regulated under federal law and the
possibility of further federal or state legislation or regulatory action
affecting or related to greenhouse gas emissions, including carbon taxes or
other measures that may be implemented in Canada or other jurisdictions in which
we operate, or of restrictions or liabilities related to elevated levels of
naturally-occurring radiation that arise from disturbing the ground in the
course of mining activities or possible efforts to reduce the flow of nutrients
into the Gulf of Mexico, the Mississippi River basin or elsewhere;
•the potential costs and effects of implementation of federal or state water
quality standards for the discharge of nitrogen and/or phosphorus into Florida
waterways;
•the financial resources of our competitors, including state-owned and
government-subsidized entities in other countries;
•the possibility of defaults by our customers on trade credit that we extend to
them or on indebtedness that they incur to purchase our products and that we
guarantee, particularly when we are exiting our business operations or locations
that produced or sold the products to that customer;
•any significant reduction in customers' liquidity or access to credit that they
need to purchase our products;
•the effectiveness of the processes we put in place to manage our significant
strategic priorities, including the expansion of our Potash business and our
investment in MWSPC, and to successfully integrate and grow acquired businesses;
•actual costs of various items differing from management's current estimates,
including, among others, asset retirement, environmental remediation,
reclamation or other environmental obligations and Canadian resource taxes and
royalties, or the costs of MWSPC, its existing or future funding and our
commitments in support of such funding;
•the costs and effects of legal and administrative proceedings and regulatory
matters affecting us, including environmental, tax or administrative
proceedings, complaints that our operations are adversely impacting nearby
farms, businesses, other property uses or properties, settlements thereof and
actions taken by courts with respect to approvals of settlements, costs related
to defending and resolving global audit, appeal or court activity, and other,
and other further developments in legal proceedings and regulatory matters;
•the success of our efforts to attract and retain highly qualified and motivated
employees;



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•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 Esterhazy, Saskatchewan potash mine, as well as potential
inflows at our other shaft mines;
•accidents or other incidents involving our properties or operations, including
potential fires, explosions, seismic events, sinkholes, unsuccessful tailings
management, ineffective mine safety procedures, or releases of hazardous or
volatile chemicals;
•terrorism or other malicious intentional acts, including cybersecurity risks
such as attempts to gain unauthorized access to, or disable, our information
technology systems, or our costs of addressing malicious intentional acts;
•other disruptions of operations at any of our key production and distribution
facilities, particularly when they are operating at high operating rates;
•changes in antitrust and competition laws or their enforcement;
•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;
•the adequacy of our property, business interruption and casualty insurance
policies to cover potential hazards and risks incident to our business, and our
willingness and ability to maintain current levels of insurance coverage as a
result of market conditions, our loss experience and other factors;
•difficulties in realizing benefits under our long-term natural gas based
pricing ammonia supply agreement with CF Industries, Inc., including the risks
that the cost savings initially anticipated from the agreement may not be fully
realized over the term of the agreement or that the price of natural gas or the
market price for ammonia during the agreement's term are at levels at which the
agreement's natural gas based pricing is disadvantageous to us, compared with
purchases in the spot market; and
•other risk factors reported from time to time in our Securities and Exchange
Commission reports.
Material uncertainties and other factors known to us are discussed in Item 1A,
"Risk Factors," of our 10-K Report for the year ended December 31, 2019 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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