10-K: Mosaic's 2025 Performance: Higher Sales, Strategic Asset Sales

The Mosaic Company reported increased net sales and operating earnings in 2025, driven by higher selling prices and strategic asset divestitures, despite some operational challenges and goodwill impairment.

Summary

• Net earnings attributable to Mosaic for 2025 were $540.7 million, or $1.70 per diluted share, a significant increase from $174.9 million, or $0.55 per diluted share, in 2024.
• Gross margin increased by $390.0 million (26%) to $1,901.9 million in 2025, primarily driven by higher finished good sales pricing across segments.
• A foreign currency transaction gain of $271.7 million was recorded in 2025, a substantial improvement from a $685.8 million loss in 2024.
• An unrealized mark-to-market gain of approximately $317.0 million on the investment in Maaden shares positively impacted other income.
• The Phosphate segment's operating earnings decreased to $135 million in 2025 from $225 million in 2024, due to lower sales volumes, extended downtime for asset integrity, and higher raw material costs, partially offset by higher selling prices.
• The Potash segment's operating earnings increased to $638 million in 2025 from $605 million in 2024, benefiting from higher average selling prices and sales volumes due to strong international demand and recovery from prior-year production challenges.
• The Mosaic Fertilizantes segment's operating earnings increased to $277 million in 2025 from $238 million in 2024, driven by higher average selling prices from a favorable global pricing environment, partially offset by higher costs of purchased products and lower sales volumes.
• Strategic asset divestitures included the sale of the Patos de Minas phosphate mining unit in Brazil for $111 million (resulting in a $94 million gain) and the Taquari potash mine in Brazil for up to $27 million (resulting in a $66 million impairment loss).
• An agreement was entered into to sell the Carlsbad, New Mexico potash mine for approximately $30 million, leading to an impairment loss of $185.0 million as assets were classified as held for sale.
• A $900 million public bond offering was completed in November 2025, consisting of $500 million of 4.350% senior notes due 2029 and $400 million of 4.600% senior notes due 2030.
• Net cash provided by operating activities decreased to $0.8 billion in 2025 from $1.3 billion in 2024, primarily due to unfavorable changes in inventories and accounts payable.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, primarily driven by strong market pricing for products and favorable non-operating items, despite notable asset impairments and a decrease in operating cash flow. The strategic divestitures and bond offering strengthen the balance sheet and focus the portfolio.

Positives

• Net earnings attributable to Mosaic significantly increased to $540.7 million in 2025 from $174.9 million in 2024.
• Gross margin rose by 26% to $1,901.9 million in 2025, primarily due to higher finished good sales pricing.
• A foreign currency transaction gain of $271.7 million was recorded in 2025, a substantial improvement from a $685.8 million loss in 2024.
• An unrealized mark-to-market gain of approximately $317.0 million on the investment in Maaden shares contributed positively to other income.
• Potash segment operating earnings increased to $638 million in 2025, driven by higher average selling prices and sales volumes from strong international demand.
• Mosaic Fertilizantes segment operating earnings increased to $277 million in 2025, benefiting from higher average selling prices.
• The successful divestiture of the Patos de Minas phosphate mining unit for $111 million yielded a $94 million gain.
• A $900 million public bond offering was completed, strengthening liquidity and capital structure.
• Maintained effective internal control over financial reporting as of December 31, 2025.

Negatives

• Phosphate segment operating earnings decreased to $135 million in 2025 from $225 million in 2024.
• Phosphate segment experienced lower sales volumes due to extended downtime for asset integrity improvements and lower North American demand in the fourth quarter of 2025.
• Phosphate segment faced higher raw material costs, primarily sulfur, and increased maintenance turnaround and water treatment costs.
• A $157.3 million loss on assets sold and to be sold was recorded, including a $66 million impairment loss on the Taquari potash mine sale and a $185.0 million impairment loss on the Carlsbad potash mine (held for sale).
• A goodwill impairment charge of $96.3 million was recognized in the Mosaic Fertilizantes reporting unit due to a reduction in long-term forecast.
• Mosaic Fertilizantes segment experienced lower sales volumes due to grower caution and increased credit constraints in Brazil, and declined margins in the fourth quarter of 2025 due to higher sulfur costs and idle costs.
• Fospar and Araxa facilities in Brazil were temporarily idled in December 2025 due to high sulfur costs.
• Net cash provided by operating activities decreased to $0.8 billion in 2025 from $1.3 billion in 2024, primarily due to unfavorable changes in inventories and accounts payable.
• Inventories increased by $761.5 million, driven by slow market demand in the fourth quarter of 2025 and higher raw material prices.
• Equity in net earnings of nonconsolidated companies decreased significantly to $2.3 million in 2025 from $73.3 million in 2024.

Risks

• Operational results are highly dependent on business, economic, and governmental policies affecting the agricultural industry, including weather, crop conditions, global inventories, and biofuel policies.
• International market conditions, including the U.S. dollar's value, foreign agricultural policies, trade barriers, and foreign exchange volatility, can significantly influence operating results.
• Countervailing duty (CVD) orders on phosphate fertilizers from Morocco and Russia could change, potentially harming business if overturned or altered.
• Potential reintroduction and prolonged imposition of U.S. tariffs on Canadian potash imports and retaliatory tariffs could materially adversely affect business, financial condition, and results of operations.
• Unfavorable worldwide economic and market conditions, including inflation, supply chain challenges, high interest rates, and foreign exchange volatility, could impact the business.
• Increased production costs due to higher prices for raw materials (nitrogen, sulfur, ammonia) and supply chain challenges (transportation, labor shortages).
• Seasonality of the crop nutrient business leads to significant inventory carrying and working capital requirements; inaccurate demand prediction can result in excess inventory or product shortages.
• Changes in transportation costs can affect sales volumes and selling prices.
• Disruptions at production, distribution, or terminaling facilities (e.g., adverse weather, strikes, cyberattacks, mechanical failure, brine inflows at potash mines) could materially impact production or distribution.
• Reduced oil refinery operating rates in North America could decrease molten sulfur availability and increase costs.
• Volatile pricing and availability of key inputs (fertilizer, sulfur, ammonia, natural gas) and energy, exacerbated by global conflicts (e.g., Russia-Ukraine).
• Risks associated with international sales and operations, including compliance with complex laws, unpredictable regulatory changes, political/economic instability, nationalization of properties, tariffs, exchange controls, and currency fluctuations (Brazilian real, Canadian dollar).
• Assets outside North America (Brazil, China, India, Paraguay, Peru) are in countries with volatile conditions, posing risks to operations and asset value; protests against natural resource operations in Peru could impact the Miski Mayo Mine.
• Adverse weather conditions (hurricanes, excess heat/cold/snow/rainfall, drought) can affect operations, increase costs, decrease sales/production, and lead to liabilities (e.g., water treatment costs, production impacts from hurricanes).
• Climate change impacts (rainfall patterns, water shortages, sea levels, storm intensities, temperatures) could increase costs, disrupt operations, and affect global agricultural production.
• Lack of controlling equity interest in non-consolidated companies (e.g., Maaden) may limit influence over operations, monetary distributions, and expose to stock market volatility.
• Strikes or work stoppages could disrupt business and increase costs.
• Accidents or equipment failures (seismic activity, fires, hazardous chemical releases) could result in significant liabilities, interruptions, or shutdowns.
• Reliance on information systems makes the company vulnerable to cyberattacks, potentially causing operational delays, data loss, or reputational damage.
• Shortage or unavailability of transportation (trucks, railcars, tugs, barges, ships) could lead to customer dissatisfaction, lost sales, and higher costs.
• Inability to attract and retain highly qualified and motivated employees.
• Environmental, health, and safety regulations may become more stringent, increasing compliance costs and capital expenditures.
• Denial or delay of permits and approvals, or imposition of restrictive conditions, could impair business and operations; local community involvement and legal challenges can delay permit issuance.
• Involvement in legal and regulatory proceedings (environmental, antitrust, commercial, tax) could result in monetary damages, fines, injunctions, or criminal sanctions.
• Environmental justice considerations could lead to permit denials or restrictive conditions if projects disproportionately impact disadvantaged communities.
• Inability to satisfy financial assurance requirements for closure and reclamation could prevent obtaining/maintaining permits or affect liquidity.
• Regulatory restrictions on greenhouse gas emissions and climate change regulations (e.g., Paris Agreement, SEC climate rules, Brazilian/Canadian carbon pricing) could adversely affect operating activities, costs, and competitive advantage.
• Failure or breach of tailings, sediments, and water dams (gypstacks, clay settling areas) could cause severe damage, loss of life, and facility shutdowns.
• Inability to participate in continuing industry consolidation could adversely affect competitive position.
• Intense global competition from other crop nutrient producers, including state-owned/subsidized entities, can affect prices and volumes.
• Future product or technological innovation (e.g., seeds requiring less nutrients, substitutes) could adversely affect demand.
• Failure to effectively manage strategic initiatives or integrate acquired businesses could lead to cost overruns or unrealized benefits.
• Price and demand volatility for global commodities (phosphate, potash) due to supply/demand imbalances can cause operating results to fluctuate.
• Requirement to write down inventory value if market prices fall below costs, especially during periods of falling raw material prices.
• Significant non-cash charges if goodwill or long-lived assets become impaired.
• Changes in tax laws or regulations or their interpretation, or exposure to additional tax liabilities, could materially adversely affect operating results and financial condition.
• Capital markets access, liquidity, and credit ratings are crucial; adverse conditions or downgrades could increase borrowing costs and restrict financing.
• Ineffectiveness of strategies for managing market and interest rate risk (derivatives, forward contracts).
• Defaults by customers on trade credit or guaranteed financing, especially with increased exposure in Brazil.
• Currency exchange rate changes (Canadian dollar, Brazilian real) can cause fluctuations in earnings and cash flows, particularly for U.S. dollar-denominated liabilities in foreign subsidiaries.

Future Outlook

The company expects capital expenditures to be approximately $1.5 billion in 2026, with environmental capital expenditures projected at $750 million in 2026 and $565 million in 2027. Expenditures for land reclamation, Gypstack closure, and water treatment activities are estimated at $260 million in 2026 and $215 million in 2027. Operations, expansion plans, and dividend payments are expected to be financed through operating cash flows, available cash, and borrowings. Liquidity is anticipated to fluctuate, particularly in the first quarter of each year, due to business seasonality. The company targets debt leverage ratios consistent with investment grade credit metrics and plans to continue investing significant resources to meet EHS requirements. The K4 mineral resources at Esterhazy are tentatively scheduled to begin mining in 2045, with production ramping down for K3 mineral reserves from 2045 to 2049. Belle Plaine solution mine production is scheduled to ramp down from 2066 until 2084. Approximately 51% of U.S. and Canada collective bargaining agreements are set to expire and be renegotiated in 2026. The company is actively monitoring and planning for new climate-related disclosure standards in the EU, California, and the SEC, and notes Brazil's increased greenhouse gas reduction targets and Canada's rising carbon price.

Management Comments

• We remain committed to a disciplined capital allocation strategy and assess our liquidity in terms of our ability to fund working capital requirements, fund sustaining and opportunistic capital projects, pursue strategic opportunities and make capital management decisions, which include making payments on and issuing indebtedness and making distributions to our stockholders, either in the form of share repurchases or dividends.
• We believe funds generated from the expected results of operations and available cash, cash equivalents and borrowings, either under our revolving credit facility or through long-term borrowings, will be sufficient to finance our operations, including our expansion plans, existing strategic initiatives and expected dividend payments for the next twelve months and the foreseeable future.
• Our capital allocation priorities include maintaining our target investment grade metrics 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 stockholders, including paying our dividend.

Industry Context

StockSavvy.ai notes that the global crop nutrient market, particularly for phosphate and potash, remains highly competitive and cyclical, with prices and demand influenced by agricultural industry conditions, global supply/demand balances, and geopolitical factors. The company's strategic asset divestitures and focus on asset integrity reflect a broader industry trend towards optimizing portfolios and operational efficiency in a volatile market. The increasing regulatory scrutiny on environmental, health, and safety (EHS) matters, including climate change disclosures and carbon pricing, aligns with global industry pressures for sustainable practices. The company's significant international footprint, especially in Brazil, China, and India, positions it in key growth markets but also exposes it to foreign currency and political risks common in global commodity businesses.

Comparison to Industry Standards

• The company is the world's leading producer and marketer of concentrated phosphate and potash crop nutrients.
• It accounts for approximately 10% of estimated global annual phosphate production and 12% of estimated global annual potash production.
• In North America, it accounts for approximately 72% of estimated annual production of concentrated phosphate crop nutrients and 34% of estimated annual potash production.
• In Brazil, it accounts for approximately 73% of estimated annual production of concentrated phosphate crop nutrients and is the largest producer and one of the largest distributors of blended crop nutrients.
• The company's competitive position is enhanced by its extensive North American and international production and distribution system, allowing for economies of scale and transportation efficiencies, unlike many competitors.
• Performance products like MicroEssentials provide a competitive advantage with customers in North and South America.
• As the world's second-largest miner of phosphate rock (excluding China) and the largest in the U.S., the company maintains a cost advantage over non-integrated phosphate producers.
• Participation in Canpotex provides substantial expertise and logistical resources for international potash distribution, including strategically located export assets in Portland, Oregon, St. John, New Brunswick, and Vancouver, British Columbia.
• The company's potash cost structure is competitive in the industry and is expected to improve as expansion projects are completed.
• The Esterhazy Potash Facility's Life of Mine (LOM) plan, with an Internal Transfer Price (ITP) of $104 USD per tonne compared to a projected LOM sales price of $251 USD per tonne, indicates robust economic prospects, suggesting a strong competitive cost position relative to market prices.
• The Nutrien potash mine at Rocanville, an adjacent property, has similar mining methods to Esterhazy and a reported operational capacity of 6.0 M tons (5.4 M tonnes) of finished product, with 606 M tons (550 M tonnes) of mineral reserves at an average grade of 23.4% K2O equivalent, indicating comparable scale and grade to the company's operations.

Management Changes

Corporate Governance

Legal Proceedings

• Countervailing Duty Orders: Ongoing litigation at the U.S. Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit (CAFC) regarding countervailing duty (CVD) orders on phosphate fertilizers from Morocco and Russia. The DOC calculated new subsidy rates of 2.12% for Moroccan producer OCP and 28.50% for Russian producer PhosAgro for November 2020-December 2021, and 16.60% for OCP and 18.21% for PhosAgro for calendar year 2022. Mosaic and opposing parties have appealed these results. The DOC is conducting an administrative review for imports from Russia covering calendar year 2023.
• South Pasture Mine Hardee County Enforcement Action: Hardee County issued a Notice of Violation (NOV) on January 8, 2020, for Mosaic's delay in meeting the required reclamation schedule for two units within the South Pasture Mine. An alternative reclamation schedule and settlement agreement were approved in May 2020, with a civil penalty paid. Monitoring programs are in place for continued compliance.
• Cruz Litigation: A putative class action complaint was filed on August 27, 2020, in Hillsborough County, Florida, alleging elevated radiation levels at manufactured housing communities on reclaimed mining land. Plaintiffs seek monetary damages, punitive damages, injunctive relief for remediation, and a medical monitoring program. Mosaic's motions to dismiss were denied in March 2023. On February 20, 2026, the court granted co-defendants' motion for partial summary judgment, ruling it lacked subject matter jurisdiction over demands for injunctive relief affecting real property in Polk County. Mosaic continues to vigorously defend this matter.
• Faustina Plant Risk Management Plan: EPA Region 6 issued a Notice of Potential Violation and Opportunity to Confer (NOPVOC) on September 14, 2022, regarding compliance of the Faustina Plant with the Risk Management Plan Rule. A Consent Agreement and Final Order (CAFO) was filed on January 30, 2024, requiring a $217,085 penalty and two supplemental environmental projects (ammonia monitors and generator donation). Ammonia monitor installation was completed on April 24, 2024.
• Brazil Legal Contingencies: Brazilian subsidiaries are engaged in judicial and administrative proceedings regarding labor, environmental, mining, and civil claims totaling approximately $531.8 million. The estimated probable aggregate loss is approximately $69.4 million, which is included in accrued liabilities.
• Brazil Tax Contingencies: Brazilian subsidiaries are engaged in judicial and administrative proceedings relating to various non-income tax matters, with a maximum potential liability of approximately $751.9 million, of which $200.1 million is subject to an indemnification agreement with Vale S.A. The estimated probable losses are immaterial.
• New Wales Phase II East Stack: A cavity and liner tear were confirmed in April 2022, resulting in process water draining. Repairs are complete. A reserve of $3.4 million for estimated water management and other costs is held as of December 31, 2025.
• New Wales Phase II West Stack: Seismic acoustic emissions and water level changes were observed in October 2023, indicating a potential breach. Repairs are underway, with high-pressure grouting expected to conclude in the first half of 2026. A reserve of $65.1 million for estimated repairs is held as of December 31, 2025. No offsite impacts are known or expected.

Related Party Transactions

• As of December 31, 2025, the net amount due from non-consolidated companies in Accounts Receivable and Accounts Payable was $10.0 million.
• Net sales to non-consolidated companies (primarily from the Potash segment to Canpotex) were $1,274.9 million in 2025.
• Transactions with non-consolidated companies included in cost of goods sold (primarily purchases from Canpotex by the Mosaic Fertilizantes segment and India and China distribution businesses) were $1,015.6 million in 2025.

Stakeholder Impact

• Shareholders: Experienced increased net earnings and gross margin, but also significant impairment charges and a decrease in operating cash flow. Dividend payments of $280.4 million were made in 2025. No share repurchases were made in 2025, following $235.4 million in 2024.
• Employees: The company had 13,249 employees as of December 31, 2025. Approximately 51% of U.S. and Canada hourly employees are covered by collective bargaining agreements expiring in 2026. The company is committed to employee wellbeing, development, and an inclusive culture, addressing 0.5% pay equity outliers in the 2026 compensation cycle.
• Customers: Faced higher average selling prices for products. Supply losses in the Phosphate segment due to downtime and lower sales volumes in the Mosaic Fertilizantes segment due to grower caution and credit constraints in Brazil impacted customer access and pricing.
• Suppliers: Higher raw material costs, particularly for sulfur and ammonia, impacted profitability. The company relies on various transportation providers (truck, rail, barge, ocean freight) for raw materials and product delivery.
• Creditors: The company completed a $900 million public bond offering in November 2025 and extended its Amended and Restated Mosaic Credit Facility to May 2030, demonstrating active debt management. The company targets debt leverage ratios consistent with investment grade credit metrics.
• Local Communities: The company faces ongoing environmental liabilities and reclamation obligations, including repairs at New Wales gypstacks. Legal proceedings related to alleged environmental impacts (Cruz Litigation) are ongoing. Community investment exceeded $15 million in 2025.

Next Steps

• Complete the sale of the Carlsbad, New Mexico potash mine in the first half of 2026.
• Negotiate new collective bargaining agreements for approximately 51% of U.S. and Canada hourly employees in 2026.
• Continue to implement the approved alternative reclamation schedule for the South Pasture Mine.
• Continue monitoring programs for compliance with the South Pasture Mine waiver and settlement agreement.
• Continue monitoring the SEC's climate-related disclosure standards and recently enacted standards in the European Union and California.
• Address 0.5% pay equity outliers (men and women) during the 2026 compensation cycle.
• Conduct annual pay equity audits with periodic external independent reviews.
• Continue to investigate and consider new innovations in mining and processing technology.
• Refine production reconciliation processes to improve mineral resource and reserve estimates.
• Consider suitable modeling software for potash mineral resource estimates.
• Continue duplicate analysis comparing internal metallurgical lab results with third-party analytical lab results.
• Continue to update and maintain geological databases.
• Evaluate the chip sampling program with third-party sample analysis.
• Continue review of the Gamma Ray Equivalent Calculation (GREC) at Esterhazy to include all exploration drilling.
• Collect and process additional 3D seismic data in strategic areas for mine planning.
• Develop and improve the seismic model supporting mineral resource and reserve estimates.
• Complete the K2 dyke improvement project at Esterhazy, with the new mill intake fully commissioned by mid to late 2026.
• The U.S. Department of Commerce (DOC) is conducting an administrative review for imports from Russia covering calendar year 2023 for countervailing duty orders.

Key Dates

Recommendation

The company demonstrated improved financial performance in 2025 with higher net sales and gross margin, largely driven by favorable market pricing and a significant foreign currency gain. Strategic asset divestitures and a new bond offering also strengthened the balance sheet. However, operating earnings in the Phosphate segment declined due to production issues and rising raw material costs, and substantial impairment charges were recorded. The outlook includes continued capital investments and ongoing environmental obligations. Given the mixed operational performance, significant non-operating gains, and ongoing market volatility, a 'Hold' recommendation is appropriate for seasoned investors, suggesting to maintain current positions while monitoring the execution of strategic initiatives and market conditions.

Keywords

Phosphate, Potash, Crop Nutrients, Fertilizers, Mining, SEC Filing, 10-K, Financial Results, Asset Sales, Impairment, Brazil, Canada, ESG, Supply Chain, Raw Materials, Market Risk, Environmental Regulations, Cybersecurity, Corporate Governance