Mosaic Company

Company Overview

Business Model: The Mosaic Company is the world’s leading producer and marketer of concentrated phosphate and potash crop nutrients and animal feed ingredients, serving customers in approximately 40 countries. The Company operates through three reportable business segments: Phosphates, Potash, and Mosaic Fertilizantes. Revenue is primarily generated from the sale of phosphate-based crop nutrients and animal feed ingredients, and potash, globally. The Company mines phosphate rock in Florida, Brazil, and Peru, and processes it into finished phosphate products in Florida, Louisiana, and Brazil. Potash is mined in Saskatchewan, New Mexico, and Brazil.

Market Position: The Mosaic Company is the second largest integrated phosphate producer globally and one of the largest producers and marketers of phosphate-based animal feed ingredients in North America and Brazil. It is the leading fertilizer production and distribution company in Brazil. As of December 31, 2024, the Company accounts for approximately 11% of estimated global annual phosphate production and approximately 12% of estimated global annual potash production. The Phosphates segment accounts for approximately 66% of estimated North American annual production of concentrated phosphate crop nutrients. The Potash segment accounts for approximately 35% of estimated North American annual potash production. The Mosaic Fertilizantes segment accounts for approximately 70% to 80% of estimated annual production of concentrated phosphate crop nutrients in Brazil and 100% of estimated annual potash production in Brazil.

Recent Strategic Developments:

• Ma’aden Wa’ad al Shamal Phosphate Company (MWSPC) Exchange: In April 2024, The Mosaic Company agreed to exchange its 25% ownership of MWSPC for 111,012,433 shares of Saudi Arabian Mining Company (“Ma’aden”). The transaction closed on December 24, 2024, valued at approximately $1.5 billion, resulting in a pre-tax gain of approximately $0.5 billion. The Ma’aden shares are now reflected in Investments in Equity Securities.
• Share Repurchases: In 2024, the Company repurchased 7,944,507 shares of Common Stock for approximately $235.4 million.
• Mosaic Biosciences Expansion: Formed in 2023, this business focuses on biological fertilizer complements, including the acquired Plant Response portfolio. It reached 9 million acres of coverage in 2024, doubling the prior year.
• ERP System Implementation: During Q3 2024, the Company completed the implementation of a new enterprise resource planning (ERP) system.

Geographic Footprint: The Mosaic Company has a significant global presence with operations serving the top four nutrient-consuming countries: China, India, U.S., and Brazil.

• North America: Phosphate mining and production in Florida and Louisiana; potash mining in Saskatchewan, Canada, and New Mexico, U.S.
• South America: Phosphate and potash mining and production, as well as extensive distribution operations, in Brazil. Also has a 75% economic interest in the Miski Mayo Phosphate Mine in Peru.
• Asia-Pacific: Distribution operations in China and India, and other production, blending, or distribution operations in Paraguay.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 13.6% (2024) vs. 16.1% (2023)
• Operating Margin: 5.6% (2024) vs. 9.8% (2023)
• Net Margin: 1.6% (2024) vs. 8.5% (2023)

Investment in Growth:

• R&D Expenditure: Not explicitly stated as a separate line item.
• Capital Expenditures: $1,251.8 million (2024)
• Strategic Investments: The exchange of 25% MWSPC ownership for Ma’aden shares, valued at approximately $1.5 billion, is a significant strategic investment.

Business Segment Analysis

Phosphates Segment

Financial Performance:

• Revenue: $4,518.8 million (-4.3% YoY from $4,724.3 million in 2023)
• Gross Margin: 13.1% (2024) vs. 14.9% (2023)
• Operating Earnings: $225.1 million (2024)
• Sales Volumes: 6,437k tonnes (2024) vs. 6,991k tonnes (2023) (-7.9% YoY)
• Production Volume (North America): 6,290k tonnes (2024) vs. 6,568k tonnes (2023) (-4.2% YoY)
• Average Finished Product Selling Price: $672/tonne (2024) vs. $646/tonne (2023) (+4.0% YoY)
• Key Growth Drivers: Higher average selling prices (upward trend since Q3 2023) and lower raw material costs (sulfur). Partially offset by lower sales volumes (due to planned maintenance and hurricanes) and higher product costs (more purchased tonnes due to Riverview fire).

Product Portfolio:

• Major product lines: Diammonium Phosphate (DAP), Monoammonium Phosphate (MAP), MicroEssentials® (value-added ammoniated phosphate with sulfur/micronutrients).
• Animal feed ingredients: Biofos® and Nexfos® (produced at New Wales, Florida).

Market Dynamics:

• Competitive positioning: The Mosaic Company is a low-cost integrated producer due to scale, vertical integration, and strategic network. It is the second largest concentrated phosphate producer and second largest phosphate rock miner globally (largest in U.S.).
• Key customer types: Global customers for phosphate-based crop nutrients and animal feed ingredients.

Sub-segment Breakdown:

• U.S. Operations: Capacity to produce approximately 4.5 million tonnes of phosphoric acid (P2O5) per year (60% of North American capacity). U.S. P2O5 production totaled approximately 2.9 million tonnes in 2024. Concentrated Phosphate Crop Nutrients Production was approximately 6.3 million tonnes in 2024 (66% of estimated North American annual production).
• Miski Mayo Phosphate Mine (Peru): The Mosaic Company holds a 75% economic interest. Production was 4.8 million tonnes in 2024.

Potash Segment

Financial Performance:

• Revenue: $2,388.7 million (-26.1% YoY from $3,233.6 million in 2023)
• Gross Margin: 26.9% (2024) vs. 37.6% (2023)
• Operating Earnings: $604.5 million (2024)
• Sales Volumes: 8,744k tonnes (2024) vs. 8,870k tonnes (2023) (-1.4% YoY)
• Production Volume: 8,798k tonnes (2024) vs. 8,246k tonnes (2023) (+6.7% YoY)
• Average Finished Product Selling Price: $273/tonne (2024) vs. $365/tonne (2023) (-25.2% YoY)
• Key Growth Drivers: Production volume increased, but lower global average selling prices and lower sales volumes (due to production challenges from electrical issues and Vancouver port strike) negatively impacted financial performance. Canadian resource taxes decreased to $232.2 million in 2024 from $403.4 million in 2023.

Product Portfolio:

• Major product lines: Muriate of potash (MOP) (red and white grades), K-Mag® (double sulfate of potash magnesia, produced at Carlsbad, New Mexico).

Market Dynamics:

• Competitive positioning: Highly competitive global market. The Mosaic Company competes internationally through Canpotex. The Company's potash cost structure is competitive and expected to improve with expansion projects.
• Key customer types: Global customers, primarily for fertilizer, but also for industrial applications and animal feed ingredients. Largest international potash sales (by volume) are to Brazil, China, Indonesia, India, and Belgium.

Mosaic Fertilizantes Segment

Financial Performance:

• Revenue: $4,422.3 million (-22.2% YoY from $5,684.7 million in 2023)
• Gross Margin: 9.2% (2024) vs. 3.7% (2023)
• Operating Earnings: $237.6 million (2024)
• Sales Volumes: 9,030k tonnes (2024) vs. 9,683k tonnes (2023) (-6.8% YoY)
• Production Volume: 3,501k tonnes (2024) vs. 3,457k tonnes (2023) (+1.3% YoY)
• Average Finished Product Selling Price: $490/tonne (2024) vs. $587/tonne (2023) (-16.6% YoY)
• Key Growth Drivers: Decrease in average selling prices (potash, nitrogen) and lower sales volumes (prioritized lower credit-risk customers, focus on gross margin). Gross margin percentage improved significantly due to lower product costs (distribution) and lower sulfur and ammonia costs (production).

Product Portfolio:

• Major product lines: Monoammonium Phosphate (MAP), Triple superphosphate (TSP), Single superphosphate (SSP), Dicalcium phosphate (DCP), Foscálcio (animal feed ingredients).
• All production in Brazil is consumed domestically.

Market Dynamics:

• Competitive positioning: Highly competitive Brazilian market. The vertically integrated business provides a competitive advantage through strategic location of mines and chemical plants, an owned distribution network, product innovation, and a strong brand.
• Key customer types: Brazilian agricultural sector. In 2024, sold approximately 18% of fertilizer shipments in Brazil.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $235.4 million (7,944,507 shares) in 2024.
• Dividend Payments: $270.7 million in 2024 ($0.85 per share).
• Future Capital Return Commitments: As of December 31, 2024, approximately $932.5 million remained authorized for future share repurchases under the existing program.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $272.8 million
• Total Debt: $4,224.7 million (Short-term debt: $847.1 million; Current maturities of long-term debt: $45.3 million; Long-term debt, less current maturities: $3,332.3 million)
• Net Cash Position: -$3,951.9 million (Total Debt minus Cash and Equivalents)
• Debt Maturity Profile: $45.3 million due in less than 1 year, $751.3 million due in 1-3 years, $618.2 million due in 3-5 years, and $1,962.8 million due in more than 5 years.

Cash Flow Generation:

• Operating Cash Flow: $1,299.2 million (2024) vs. $2,407.2 million (2023)
• Free Cash Flow: $47.4 million (Operating Cash Flow of $1,299.2 million minus Capital Expenditures of $1,251.8 million)
• Cash Conversion Metrics: Not explicitly detailed in the filing.

Operational Excellence

Production & Service Model: The Mosaic Company operates a vertically integrated model, mining phosphate rock and potash, and processing these raw materials into concentrated crop nutrients and animal feed ingredients. Production facilities are strategically located in key agricultural regions globally. The Company utilizes both surface mining (phosphate) and underground shaft/solution mining (potash). Service delivery includes direct sales, channel partners, and digital platforms, supported by an extensive network of blending, bagging, port terminals, and warehouses.

Supply Chain Architecture: Key Suppliers & Partners:

• Sulfur: Majority purchased from North American oil and natural gas refiners for Phosphates segment. Brazil imports sulfur through Tiplam port.
• Ammonia: Approximately one-third purchased on spot market, two-thirds from internal Faustina production for Phosphates segment (CF Ammonia Supply Agreement terminated January 1, 2025). Brazil purchases ammonia under long-term supply agreements with two suppliers, imported through Tiplam port.
• Canpotex: A marketing and logistics company that sells potash products outside the U.S. and Canada on behalf of its members, including The Mosaic Company. The Mosaic Company's entitlement percentage was 36.2% (34.5% in 2024 due to electrical equipment problems).
• Ma’aden: Strategic partner in the former MWSPC joint venture, now an equity investment.

Facility Network:

• Manufacturing: Phosphate processing plants in Florida (Bartow, New Wales, Riverview) and Louisiana (Faustina, Uncle Sam). Potash mines in Canada (Belle Plaine, Colonsay, Esterhazy) and U.S. (Carlsbad). Brazilian operations include five phosphate mines, four chemical plants, and one potash mine (Taquari-Vassouras).
• Research & Development: Mosaic Biosciences focuses on biological fertilizer complements.
• Distribution: Owns port facilities in Tampa, Florida. Owns warehouse distribution facilities in Rosemount, Minnesota; Pekin, Illinois; and Henderson, Kentucky. Leases or owns warehouse facilities in Saskatchewan, Ontario, Quebec, and Manitoba in Canada. Extensive network of sales offices, blending and bagging facilities, port terminals, and warehouses in Brazil and Paraguay. Two 300,000-tonne per year capacity blending plants in China. Distribution facilities in India.
• New Facility: Currently constructing a one million tonne distribution facility in Palmeirante, northern Brazil.

Operational Metrics:

• Phosphates Processed Phosphate Operating Rate (North America): 64% in 2024 (vs. 65% in 2023).
• Potash Operating Rate (North America): 76% in 2024 (vs. 73% in 2023).
• Mosaic Fertilizantes Phosphate Operating Rate (Brazil): 78% in 2024 (vs. 77% in 2023).
• Florida Phosphate Rock Production: 8.9 million tonnes in 2024 (47% of estimated North American annual production).
• Brazilian Phosphate Rock Production: 3.9 million tonnes in 2024 (74% of estimated Brazilian annual production).

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Sales and marketing teams serve wholesale distributors, retail chains, cooperatives, independent retailers, and national accounts in the U.S. and Canada. A dedicated sales force handles international phosphate sales. Carlsbad potash exports are sold through the Company's own sales force.
• Channel Partners: Potash products outside the U.S. and Canada are sold through Canpotex.
• Digital Platforms: Not explicitly detailed in the filing.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Not explicitly named, but the Company serves a broad base of wholesale distributors, retail chains, cooperatives, and national accounts.
• Strategic Partnerships: Canpotex is a key partnership for international potash sales.
• Customer Concentration: Trade accounts receivable due from Canpotex were $65.1 million as of December 31, 2024. Sales to Canpotex were $884.3 million in 2024.

Geographic Revenue Distribution (2024):

• Brazil: $4,296.2 million (38.6% of total revenue)
• United States: $3,970.7 million (35.7% of total revenue)
• Canpotex: $884.3 million (7.9% of total revenue)
• China: $536.9 million (4.8% of total revenue)
• Canada: $520.1 million (4.7% of total revenue)
• India: $72.8 million (0.7% of total revenue)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The crop nutrient market is highly competitive, with products generally considered global commodities. Competition is primarily based on delivered price, product quality, raw material cost/availability, customer service, plant efficiency, and product availability. The business is seasonal, with strongest demand in spring and a second period in fall, requiring significant working capital for inventory.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Global Crop Nutrition Companies: The filing notes that foreign competitors may have cost advantages. The Company competes intensely for DAP, MAP, and MOP globally.
• OCP (Morocco) and PhosAgro (Russia): Subject to U.S. countervailing duty orders on phosphate fertilizers, with subsidy rates of 16.60% and 18.21% respectively in the second administrative reviews (2024).
• State-owned/Government-subsidized Competitors: Some competitors may have greater resources or cost advantages.

Emerging Competitive Threats:

• Product or Technological Innovation: Future innovations such as seeds requiring less nutrients or substitutes could affect demand.
• New Entrants/Disruptive Technologies: Not explicitly detailed, but the Company's Mosaic Biosciences initiative suggests a focus on biological complements to maintain relevance.

Competitive Response Strategy: The Mosaic Company leverages its extensive North American and international production and distribution system, vertical integration, and performance products like MicroEssentials® to maintain competitive advantage. Investments in sulfur logistical and melting assets also provide a competitive edge.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Demand Volatility: Operating results are affected by external factors such as weather, crop nutrient imports/exports, inventories and prices, governmental policies (farm and biofuel), demand for biofuels, commodity pricing, distribution channel inventories, and customer expectations.
• Technology Disruption: Future product or technological innovations (e.g., seeds requiring less nutrients, substitutes) could affect demand for the Company's products.
• Customer Concentration: Not explicitly quantified as a risk, but sales to Canpotex represent a significant portion of Potash segment revenue.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on North American oil and natural gas refiners for sulfur, and a single supplier for Brazilian ammonia. Reduced oil refinery operating rates in North America could decrease molten sulfur availability and increase costs.
• Geographic Concentration: Operations rely on a limited number of key production, distribution, and terminaling facilities, making them vulnerable to localized disruptions.
• Capacity Constraints: Production can be affected by disruptions at facilities due to adverse weather (e.g., Hurricanes Francine, Helene, Milton in 2024), strikes, cyberattacks, or equipment failures.
• Key Input Volatility: Prices and availability of fertilizer, sulfur, ammonia, and natural gas are volatile.

Disruption at Facilities:

• Brine Inflows: Underground potash shaft mines are subject to water inflows; Esterhazy K1 and K2 potash mines were closed in 2021 due to accelerating brine inflows.
• Accidents/Equipment Failures: Mining and industrial activities carry risks of serious accidents or equipment failures (e.g., seismic activity, fires, handling of hazardous materials).
• Information Systems Disruption: Reliance on IT systems for inventory, transactions, and supply chain, with risks associated with cyberattacks and the implementation of new ERP systems.

Financial & Regulatory Risks

Market & Financial Risks:

• Foreign Exchange: Significant exposure to fluctuations in the Brazilian real and Canadian dollar, which can lead to substantial foreign currency transaction losses or gains.
• Inventory Write-downs: Falling market prices for products or raw materials could require write-downs of inventory.
• Goodwill or Long-Lived Asset Impairment: Goodwill was $1.1 billion as of December 31, 2024, subject to annual impairment testing.
• Trade Credit and Guarantees: Defaults by customers on trade credit or guaranteed financing (especially in Brazil) could adversely affect results.

Regulatory & Compliance Risks:

• Environmental, Health and Safety (EHS) Laws: Subject to numerous EHS laws globally, affecting operating costs and capital expenditures. More stringent EHS laws are expected to increase future investments.
• Permits and Approvals: Operations depend on required permits; denial, delay, or restrictive conditions can impair business. A federal court decision invalidated Florida’s Clean Water Act 404 “dredge and fill” permitting program.
• Legal and Regulatory Proceedings: Involved in various legal and regulatory proceedings (environmental, health, safety, personal injury, property damage, antitrust, commercial, tax disputes).
• Greenhouse Gas Emissions and Climate Change Regulations: Subject to various climate initiatives and regulations (e.g., Canada's carbon tax, SEC climate-related disclosures).
• Countervailing Duty Orders: Ongoing litigation and appeals related to CVD orders on phosphate fertilizers from Morocco and Russia.
• U.S. Tariffs on Canadian Potash: In February 2025, the U.S. imposed a 25% tariff on most imports from Canada, including potash, though implementation was paused. The Company does not expect significant impact.

Geopolitical & External Risks

Geopolitical Exposure:

• International Operations: Approximately 64% of net sales in 2024 were from outside the U.S., exposing the Company to risks from political/economic instability, inflation, tariffs, exchange controls, and currency exchange rate fluctuations.
• Trade Relations: Impact of trade tensions and policy changes.
• Sanctions & Export Controls: Compliance requirements and business limitations.

Adverse Weather Conditions: Hurricanes, excess heat, cold, snow, rainfall, and drought can affect operations and demand.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Biological Fertilizer Complements: Investment in Mosaic Biosciences, including the acquired Plant Response portfolio, to develop and commercialize biological products.
• Innovation Pipeline: Focus on performance products like MicroEssentials® (value-added ammoniated phosphate with sulfur/micronutrients).

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed, but the development of proprietary products like MicroEssentials® implies an IP strategy.
• Licensing Programs: Not explicitly detailed.

Technology Partnerships:

• Strategic Alliances: Not explicitly detailed beyond the acquisition of Plant Response.
• Research Collaborations: Not explicitly detailed.

Leadership & Governance

Executive Leadership Team (as of March 3, 2025)

Leadership Continuity: Not explicitly detailed, but the recent appointments to key C-suite roles indicate ongoing leadership transitions.

Board Composition: The Board of Directors oversees the Enterprise Risk Management program, and the Audit Committee oversees cybersecurity risk, receiving regular reports. Specific details on independence, expertise areas, or committee structure are not provided in the excerpt.

Human Capital Strategy

Workforce Composition (as of December 31, 2024):

• Total Employees: 13,765
• Geographic Distribution: Brazil (6,815), United States (3,948), Canada (1,988), Peru (720), China (167), India (69), Paraguay (50), Saudi Arabia (8).
• Skill Mix: 10,454 salaried, 3,311 hourly.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Not explicitly detailed.
• Retention Metrics: Not explicitly detailed, but the Company annually evaluates pay equity.
• Employee Value Proposition: The Mosaic Employee Giving Program offers Company matching funds up to $2,000 annually in North America.

Diversity & Development:

• Diversity Metrics: Global 2030 representation goals are in place.
• Development Programs: Not explicitly detailed.
• Culture & Engagement: Annually evaluates pay equity, with 0.4% outliers identified in 2024 to be addressed in the 2025 compensation cycle.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Goal to achieve net-zero greenhouse gas emissions companywide by 2040.
• Carbon Neutrality: Net-zero by 2040 commitment.
• Renewable Energy: Not explicitly detailed.

Supply Chain Sustainability:

• Supplier Engagement: Not explicitly detailed.
• Responsible Sourcing: Not explicitly detailed.

Social Impact Initiatives:

• Community Investment: Invested $16.7 million in 2023, with preliminary data indicating over $12 million in 2024. The Mosaic Employee Giving Program offers Company matching funds.
• Product Impact: Not explicitly detailed.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The crop nutrient business is seasonal, with the strongest demand in spring and a second period in fall. This seasonality requires significant working capital for inventory. The Company's international scope helps reduce the overall seasonal impact.
• Economic Sensitivity: Operating results are affected by various external factors including weather, crop nutrient imports/exports, inventories and prices, governmental policies (farm and biofuel), demand for biofuels, and commodity pricing.
• Industry Cycles: The market for crop nutrients is cyclical.

Planning & Forecasting: Not explicitly detailed beyond managing working capital for inventory due to seasonality.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Environmental, Health and Safety (EHS) Laws: Subject to numerous EHS laws globally, affecting operating costs and capital expenditures.
• Permitting: Operations depend on required permits and approvals. A federal court decision invalidated Florida’s Clean Water Act 404 “dredge and fill” permitting program.
• Climate Change Regulation: Subject to various climate initiatives and regulations, including Canada's carbon tax ($80 per tonne as of April 1, 2024) and SEC climate-related disclosure rules (implementation stayed).
• Countervailing Duty Orders: Ongoing legal proceedings related to CVD orders on phosphate fertilizers from Morocco and Russia.

Trade & Export Controls:

• Export Restrictions: U.S. imposed 25% tariff increases on most imports from Canada, including potash, in February 2025 (paused for 30 days).
• Sanctions Compliance: Not explicitly detailed.

Legal Proceedings:

• Countervailing Duty Orders: Appeals are ongoing for the CVD orders on phosphate fertilizers from Morocco and Russia.
• South Pasture Mine – Hardee County Enforcement Action: Notice of Violation for reclamation schedule delay in 2020, with a settlement agreement approved in May 2020.
• Cruz Litigation: Putative class action complaint filed in 2020 alleging elevated radiation levels at manufactured housing communities on reclaimed mining land.
• Faustina Plant Risk Management Plan: Consent Agreement and Final Order filed in January 2024 for Clean Air Act Section 112(r) non-compliance, requiring a penalty and supplemental environmental projects.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 59.2% in 2024, 13.3% in 2023, and 26.4% in 2022. The 2024 rate was significantly impacted by a net expense of $125.9 million, including $99.9 million for withholding tax on foreign distributions and $24.2 million for valuation allowance changes, partially offset by an $18.1 million U.S. state tax law benefit.
• Geographic Tax Planning: International tax structure and transfer pricing are subject to changes in tax laws and interpretations.
• Tax Reform Impact: The Company is under audit by the IRS for 2018 and 2020, and by the Canada Revenue Agency for 2020.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Key policy types and coverage limits are not explicitly detailed, but the Company maintains surety bonds and letters of credit for financial assurance requirements related to environmental liabilities and asset retirement obligations.
• Risk Transfer Mechanisms: The Company uses foreign currency exchange contracts (forwards, non-deliverable forwards) and commodity derivatives (natural gas swaps) to manage market risks.
• Financial Assurance Requirements: Surety bonds of $411.8 million and a $50 million letter of credit for Florida mining reclamation. A $327.1 million surety bond with the EPA for the Plant City Facility. A trust fund of $25 million (Canadian dollars) for Saskatchewan Potash facilities closure. A surety bond of approximately $82 million for the Carlsbad, New Mexico potash facility closure.