~~With respect to two facilities we acquired as part of our acquisition of the Florida phosphate assets and assumption of certain related liabilities of CF (the “CF Phosphate Assets Acquisition~~”), (i) we currently use a financial test supported by a corporate guarantee to meet Florida state regulations governing financial assurance related to the post-closure care of the phosphogypsum stack at our closed Bonnie facility in Florida, and (ii) under the terms of a consent decree with federal and state regulators we currently provide credit support in the form of a surety bond from insurance companies, as a means of financial assurance for closure and post-closure care requirements for the phosphogypsum stack at our Plant City, Florida facility. These financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, cost inflation, changes in regulations, discount rates and the timing of activities. Additional financial assurance commitments could be required in the future if increases in cost estimates exceed the assurance amount currently in place. In addition, with respect to the Plant City facility, our use of a surety bond may in some cases require that we obtain a discharge of the bond or post collateral at the request of the issuers of the bond. Required collateral may be in many forms including letters of credit or other financial instruments that utilize a portion of our available liquidity. Any of these circumstances could materially adversely affect our business, results of operations or financial condition.

•

With respect to two facilities we acquired as part of our acquisition of the Florida phosphate assets and assumption of certain related liabilities of CF (the “CF Phosphate Assets Acquisition”), (i) we currently use a financial test supported by a corporate guarantee to meet Florida state regulations governing financial assurance related to the post-closure care of the phosphogypsum stack at our closed Bonnie facility in Florida, and (ii) under the terms of a consent decree with federal and state regulators we currently provide credit support in the form of a surety bond from insurance companies, as a means of financial assurance for closure and post-closure care requirements for the phosphogypsum stack at our Plant City, Florida facility. These financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, cost inflation, changes in regulations, discount rates and the timing of activities. Additional financial assurance commitments could be required in the future if increases in cost estimates exceed the assurance amount currently in place. In addition, with respect to the Plant City facility, our use of a surety bond may in some cases require that we obtain a discharge of the bond or post collateral at the request of the issuers of the bond. Required collateral may be in many forms including letters of credit or other financial instruments that utilize a portion of our available liquidity. Any of these circumstances could materially adversely affect our business, results of operations or financial condition.

As more fully discussed in Note 1415 of our Notes to Consolidated Financial Statements, in 2016 under the terms of two consent decrees with federal and state regulators, we deposited a total of $630 million into two trust funds to provide additional financial assurance for the estimated costs of closure and post-closure care of most of our other phosphogypsum ~~management~~stack systems in Florida (excluding those acquired as part of the CF Phosphate Assets Acquisition) and Louisiana. As required under one of the consent decrees, we have also issued a $50 million letter of credit to further support our financial assurance obligations. We have also agreed to guarantee the difference between the amounts held in each trust fund (including earnings) and the estimated closure and long-term care costs. Compliance with the financial assurance requirements included in these consent decrees satisfies substantially all of

our state financial assurance obligations relating to the covered facilities, which were historically satisfied without the need for any expenditure of corporate funds, to the extent our financial statements met certain balance sheet and income statement financial strength tests.

In the past, we have also not always been able to satisfy applicable financial strength tests, and, in the future, it is possible that we will not be able to pass the applicable financial strength tests, negotiate or receive approval of consent decrees, establish escrow or trust accounts or obtain letters of credit, surety bonds or other financial instruments on acceptable terms and conditions or at a reasonable cost, or that the form and/or cost of compliance could increase, which could materially adversely affect our business, results of operations or financial condition.

We have included additional discussion about financial assurance requirements under “Off Balance Sheet Arrangements and Obligations—Other Commercial Commitments” in our Management’s Analysis.

The discontinuation or replacement of LIBOR may affect our financial condition and results of operations.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit rates for calculation of the London Interbank Offered Rate (“LIBOR”) by the end of 2021. At this time, we cannot predict the impact the discontinuation, reform, or replacement of LIBOR may have on interest rates paid on our credit facility and other financial instruments and interest rate swaps. As a result, it is possible that these interest rate fluctuations could adversely affect our financial condition and results of operations.

The other environmental, health and safety regulations to which we are subject may also have a material adverse effect on our business, financial condition and results of operations.

In addition to permitting and financial assurance requirements, we are subject to numerous other environmental, health and safety laws and regulations in the U.S., Canada, China, Brazil and other countries where we operate. These laws and regulations govern a wide range of matters, including environmental controls, land reclamation, discharges to air and water and remediation of hazardous substance releases. They significantly affect our operating activities as well as the level of our operating costs and capital expenditures. In some international jurisdictions, environmental laws change frequently and it may be difficult for us to determine if we are in compliance with all material environmental laws at any given time. If we are not in compliance, or the changes require new investment in our business, our financial condition and results of operations may be materially adversely affected.

We are, and may in the future be, involved in legal and regulatory proceedings that could be material to us. These proceedings include “legacy” matters arising from activities of our predecessor companies and from facilities and businesses that we have never owned or operated.

We have in the past been, are currently and in the future, may be subject to legal and regulatory proceedings that could be material to our business, results of operations, liquidity or financial condition. Joint ventures in which we participate could also become subject to these sorts of proceedings. These proceedings may be brought by the government or private parties and may arise out of a variety of matters, including:

Allegations by ~~the~~ government or private parties that we have violated the permitting, financial assurance or other environmental, health and safety laws and regulations discussed above. For example, in connection with our settlement of matters relating to the U.S. Environmental Protection Agency’s ongoing review of mineral processing industries under the U.S. Resource Conservation and Recovery Act, we entered into the consent decrees discussed above and in Note 1415 of our Notes to Consolidated Financial Statements, which required us to provide additional financial assurance as described above, pay cash penalties of approximately $8 million in the aggregate, modify certain operating practices and undertake certain capital improvement projects over a period of several years that are expected to result in capital expenditures likely to exceed $200 million in the aggregate. We are also involved in other proceedings alleging that, or to review whether, we have violated environmental laws in the United States and Brazil.

Other environmental, health and safety matters, including alleged personal injury, wrongful death, complaints that our operations are adversely impacting nearby farms and other business operations, other property damage, subsidence from ~~mining~~ operations, spills or releases to the environment, natural resource damages and other damage to the environment, arising out of operations, including accidents, could result in material impacts to our operations and facilities. ~~For example, several actions were initiated by the government and private parties related to a release of process wastewater at our Riverview, Florida facility in~~In connection with ~~a 2004 hurricane. In addition, a putative class action lawsuit was filed following~~ the ~~water loss incident that occurred at our~~ New Wales, Florida facility ~~in 2016. In connection with that~~water loss incident, we ~~also~~ entered into an administrative consent order with the FDEP, as discussed in greater detail in Note 2224 of our Notes to Consolidated Financial Statements.

Antitrust, commercial, tax (including tax audits) and other disputes. For example, we were one of a number of defendants in multiple class-action lawsuits, in which the plaintiffs sought unspecified amounts of damages including treble damages, alleging that we and other defendants conspired to, among other matters, fix the price at which potash was sold in the United States, allocated market shares and customers and fraudulently concealed their

~~anticompetitive conduct. In January 2013, we settled these class action antitrust lawsuits for an aggregate of $43.8 million.~~

The legal and regulatory proceedings to which we are currently or may in the future be subject can, depending on the circumstances, result in monetary damage awards, fines, penalties, other liabilities, injunctions or other court or administrative rulings that interrupt, impede or otherwise materially affect our business operations, and/or criminal sanctions.

Among other environmental laws, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) imposes liability, including for cleanup costs, without regard to fault or to the legality of a party’s conduct, on certain categories of persons, including current and former owners and operators of a site and parties who are considered to have contributed to the release of “hazardous substances” into the environment. Under CERCLA, or various U.S. state analogues, a party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. As a crop nutrient company producing and managing chemicals, we periodically may incur liabilities and cleanup costs, under CERCLA and other environmental laws, with regard to our current or former facilities, adjacent or nearby third-party facilities or offsite disposal locations.

Pending and potential legal and regulatory proceedings may arise out of our present activities, including operations at current facilities. They may also arise out of past activities by us, our predecessor companies and subsidiaries that our predecessors have sold. These past activities were in some cases at facilities that we and our subsidiaries no longer own or operate and may have never owned or operated.

Settlements of legal and regulatory matters frequently require court approval. In the event a court were not to approve of a settlement, it is possible that we and the other party or parties to the matter might not be able to settle it on terms that were acceptable to all parties or that we could be required to accept more stringent terms of settlement than required by the opposing parties.

We have included additional information with respect to pending legal and regulatory proceedings in Note 2224 of our Notes to Consolidated Financial Statements and in this report in Part I, Item 3, “Legal Proceedings”.

These legal and regulatory proceedings involve inherent uncertainties and could negatively impact our business, results of operations, liquidity or financial condition.

The permitting, financial assurance and other environmental, health and safety laws and regulations to which we are subject may become more stringent over time. This could increase the effects on us of these laws and regulations, and the increased effects could be material.

Continued government and public emphasis on environmental, health and safety issues in the ~~U.S.,~~United States, Canada, China, Brazil, Paraguay and other countries where we operate can be expected to result in requirements that apply to us and our operations that are more stringent than those that are described above and elsewhere in this report. These more stringent requirements may include, among other matters;

Increased levels of future investments and expenditures for environmental controls at ongoing operations, which will be charged against income from future operations; increased levels of the financial assurance requirements to which we are subject, and increased efforts or costs to obtain permits or denial of permits.

Other new or interpretations of existing statutes or regulations that impose new or more stringent restrictions or liabilities, including liabilities or additional financial assurance requirements under CERCLA or similar statutes, restrictions or liabilities related to elevated levels of naturally-occurring radiation that arise from disturbing the ground in the course of mining activities; and other matters that could increase our expenses, capital requirements or liabilities or adversely affect our business, liquidity or financial condition. In addition, to the extent restrictions imposed in countries where our competitors operate, such as China, India, Former Soviet Union countries or Morocco, are less stringent than in the countries where we operate, our competitors could gain cost or other competitive advantages over us. These effects could be material.

Among other matters, in recent years there have been a number of initiatives relating to nutrient discharges. New regulatory restrictions developed through these initiatives could have a material effect on either us or our customers. For example, the Gulf Coast Ecosystem Restoration Task Force, established by executive order of the President and comprised of five Gulf States and eleven federal agencies, delivered a final strategy for long-term ecosystem restoration for the Gulf Coast in 2016. The strategy calls for, among other matters, reduction of the flow of excess nutrients into the Gulf through state nutrient reduction frameworks, new nutrient reduction approaches and reduction of agricultural and urban sources of excess nutrients.

Implementation of the strategy will require legislative or regulatory action at the state level. We cannot predict what the requirements of any such legislative or regulatory action could be or whether or how it would affect us or our customers.

In June 2015, ~~the~~ EPA and the U.S. Army Corps of Engineers (the “Corps”) jointly issued a final rule that proposed to clarify, but may actually expand, the scope of waters regulated under the federal Clean Water Act. The final rule (the ~~“2015~~ “2015 Clean Water Rule”) became effective in August 2015, but has been challenged through numerous lawsuits. In October 2015, the U.S. Court of Appeals for the Sixth Circuit issued an order staying the effectiveness of the final rule nationwide pending adjudication of substantive challenges to the rule. In early 2017, the U.S. President issued an Executive Order directing EPA and the Corps to publish a proposed rule rescinding or revising the new rule. In June 2017, EPA and the Corps issued a proposed rule that would rescind the 2015 Clean Water Rule and re-codify regulatory text that existed prior to enactment of the 2015 Clean Water Rule. In November 2017, EPA issued a rule notice proposing to extend the applicability date of the 2015 Clean Water Rule for two years from the date of final action on the proposed rule, to provide continuity and regulatory certainty while agencies proceed to consider potential changes to the 2015 Clean Water Rule.

In January 2018, the U.S. Supreme Court unanimously held all challenges to the 2015 Clean Water Rule must be heard in federal district courts rather than in the federal courts of appeal, overruling a decision by the Sixth ~~Circuit~~Circuit's Court of Appeals. With the Sixth Circuit Court of Appeals no longer having jurisdiction, that court lifted its 2015 nationwide stay in February 2018. After the nationwide stay was lifted, a number of U.S. District Courts revived dormant litigation that challenged the 2015 Clean Water Rule. In June 2018, the U.S. District Court for the Southern District of Georgia entered an injunction

against implementation of the 2015 Clean Water Rule covering 11 states, including Florida. As of September ~~18,~~ 2018, federal district courts have put the 2015 Clean Water Rule on hold in 28 ~~states. The 2015 Clean Water Rule is now in effect in 22~~ states, the District of Columbia and the U.S. territories.

On December 11, 2018, ~~the~~ EPA and the Corps issued a proposed ~~new Clean Water Rule that is designed~~rule to replace the 2015 Clean Water Rule. The ~~agencies'~~agencies’ stated interpretation for the proposed rule is ~~intended~~ to provide clarity, predictability and consistency so that the regulated community can better understand where the Clean Water Act applies - and where it does not. EPA and the Corps received over 600,000 public comments on the proposed rule.

~~We believe~~On September 12, 2019, EPA and the Corps jointly issued a final regulation that repeals the 2015 Clean Water Rule ~~if not rescinded, or replaced~~and restores the previous regulatory regime. This regulation reestablishes national consistency by returning all jurisdictions to the ~~proposed~~longstanding regulatory framework that existed prior to the 2015 Clean Water Rule. The final rule ~~issued on December 11, 2018, may expand~~takes effect sixty (60) days after publication in the ~~types and extent~~Federal Register. A challenge to this legislation is possible.

Repeal of ~~water resources~~the 2015 Clean Water Rule was the first step in a two-step rulemaking process to define the scope of “waters of the United States” that are regulated under the Clean Water Act. The second step is finalizing the regulation proposed in December 2018 that would define where federal ~~law, therefore potentially expanding our permitting~~jurisdiction begins and ~~reporting requirements, increasing our costs of compliance, including costs associated~~ends in accordance with ~~wetlands~~the Clean Water Act and ~~stream mitigation, lengthening the time necessary to obtain permits, and potentially restricting our ability to mine certain of our phosphate rock reserves. These effects could be material.~~Supreme Court precedent.

Regulatory restrictions on greenhouse gas emissions and climate change regulations in the United States, Canada or elsewhere could adversely affect us, and these effects could be material.

Various governmental initiatives to limit greenhouse gas emissions are under way or under consideration around the world. These initiatives could restrict our operating activities, require us to make changes in our operating activities that would increase our operating costs, reduce our efficiency or limit our output, require us to make capital improvements to our facilities, increase our energy, raw material and transportation costs or limit their availability, or otherwise adversely affect our results of operations, liquidity or capital resources, and these effects could be material to us.

Governmental greenhouse gas emission initiatives include, among others, the December 2015 agreement (the “Paris Agreement”) which was the outcome of the 21^st session of the Conference of the Parties under the United Nations Framework Convention on Climate Change (UNFCCC). The Paris Agreement, which was signed by nearly 200 nations, including the United States and Canada, entered into force in late 2016 and sets out a goal of limiting the average rise in temperatures for this century to below 2 degrees Celsius. Each signatory is expected to develop its own plan (referred to as a Nationally Determined Contribution, or “NDC”) for reaching that goal.

In May 2017, the United States President announced that the United States would withdraw from the Paris Agreement. Under Article 28 of that agreement, the earliest such a withdrawal could be effective is November 2020. In 2015, prior to this announcement, the United States had submitted an NDC aiming to achieve, by 2025, an economy-wide target of reducing greenhouse gas emissions by 26-28% below its 2005 level. The NDC also aims to use best efforts to reduce emissions by 28%. The U.S. target covers all greenhouse gases that were a part of the 2014 Inventory ofGreenhouse Gas Emissions and Sinks. While it is unclear whether the U.S. executive administration will proceed to withdraw from the Paris Agreement, various legislative or regulatory initiatives relating to greenhouse gases have been adopted or considered by the U.S. Congress, the EPA or various states and those initiatives already adopted may be used to implement the U.S.’s NDC. Additionally, more stringent laws and regulations may be enacted to accomplish the goals set out in the NDC.

Canada’s intended NDC aims to achieve, by 2030, an economy-wide target of reducing greenhouse gas emissions by 30% below 2005 levels. In late 2016, the federal government announced plans for a comprehensive tax on carbon emissions, under which provinces opting out of the tax would have the option of adopting a cap-and-trade system. In the plans, the federal government also committed to implementing a federal carbon pricing backstop system that will apply in any province or territory that does not have a carbon pricing system in place by 2018.As of January 1, 2019, a carbon tax of $20/tonne

now applies in Canada for any emitter not covered under the federal backstop program or approved provincial program. The carbon tax will increase to $30/tonne on January 1, 2020. In addition, the Province of Saskatchewan, in which our Canadian potash mines are located, has publicly stated that a carbon pricing system will not be implemented in the province and ~~that~~is currently pursuing legal action will be sought against the federal government. In December 2017, Saskatchewan announced a comprehensive plan to address climate change that does not include an economy-wide price on carbon but does include a system of tariffs and credits for large emitters. The plan was reviewed and approved, in part, by the federal government in October 2018. Our Saskatchewan Potash facilities will be subject to the Saskatchewan climate change plan regarding emissions at our facilities; however, indirect costs from the carbon tax associated with electricity, natural gas consumption, and transportation ~~may be~~are now being passed through to ~~Mosaic.~~us. As implementation of the Paris Agreement proceeds, more stringent

laws and regulations may be enacted to accomplish the goals set out in Canada's NDC, such as the Clean Fuel Standard, which is now under development in Ottawa. Additionally, during the 2019 election campaign, the recently re-elected Liberal Party of Canada announced plans for "net zero emissions" by 2050. Details of the Canadian government's plan to achieve the net-zero target will be released in coming months. We will also continue to monitor developments relating to the legislation, as well as the potential future effect on our operating activities, energy, raw material and transportation costs, results of operations, liquidity or capital resources.

It is possible that future legislation or regulation addressing climate change, including in response to the Paris Agreement or any new international agreements, could adversely affect our operating activities, energy, raw material and transportation costs, results of operations, liquidity or capital resources, and these effects could be material or adversely impact our competitive advantage. In addition, to the extent climate change restrictions imposed in countries where our competitors operate, such as China, India, Former Soviet Union countries or Morocco, are less stringent than in the United States or Canada, our competitors could gain cost or other competitive advantages over us.

Future climate change could adversely affect us.

The prospective impact of climate change on our operations and those of our customers and farmers remains uncertain. Scientists have hypothesized that the impacts of climate change could include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperature levels and that these changes could be severe. These impacts could vary by geographic location. Severe climate change could impact our costs and operating activities, the location and cost of global grain and oilseed production, and the supply and demand for grains and oilseeds. At the present time, we cannot predict the prospective impact of climate change on our results of operations, liquidity or capital resources, or whether any such effects could be material to us.

Some of our competitors and potential competitors have greater resources than we do, which may place us at a competitive disadvantage and adversely affect our sales and profitability. These competitors include state-owned and government-subsidized entities in other countries.

We compete with a number of producers throughout the world, including state-owned and government-subsidized entities. Some of these entities may have greater total resources than we do, and may be less dependent on earnings from crop nutrients sales than we are. In addition, some of these entities may have access to lower cost or government-subsidized natural gas supplies, placing us at a competitive disadvantage. Furthermore, certain governments as owners of some of our competitors may be willing to accept lower prices and profitability on their products in order to support domestic employment or other political or social goals. To the extent other producers of crop nutrients enjoy competitive advantages or are willing to accept lower profit levels, the price of our products, our sales volumes and our profits may be adversely affected.

We do not own a controlling equity interest in our non-consolidated companies, some of which are foreign companies, and therefore our operating results and cash flow may be materially affected by how the governing boards and majority owners operate such businesses. There may also be limitations on monetary distributions from these companies that are outside of our control. Together, these factors may lower our equity earnings or cash flow from such businesses and negatively impact our results of operations.

In 2013, we entered into an agreement to form MWSPC, a joint venture to develop a mine and chemical complexes for an estimated $8.0 billion that produces phosphate fertilizers and other downstream products in the Kingdom of Saudi Arabia. We have a 25% interest in the joint venture and expect our cash investment could be up to $840 million, approximately $770 million of which had been funded as of December 31, 2018. The success of MWSPC will depend on, among other matters, the completion of development and full commencement of operations of production facilities in the Kingdom of Saudi Arabia, the future success of current plans for completion of the development and for the operation of MWSPC, including the availability and affordability of necessary resources and materials and access to appropriate infrastructure, and any future changes in those plans, as well as the general economic and political stability of the region.

We also hold minority ownership interests in companies that are not controlled by us. We expect that the operations and results of MWSPC will be, and the operations or results of some of the other companies are, significant to us, and their operations can affect our earnings. Because we do not control these companies either at the board or stockholder levels and because local laws in foreign jurisdictions and contractual obligations may place restrictions on monetary distributions by these companies, we cannot ensure that these companies will operate efficiently (or, in the case of MWSPC, in compliance with the terms of any funding facility for which we may provide financial guarantees), pay dividends, or generally follow the desires of our management by virtue of our board or stockholder representation. As a result, these companies may contribute

less than anticipated to our earnings and cash flow, negatively impacting our results of operations and liquidity. Additionally, in the case of MWSPC, we may be called upon to provide funds to satisfy MWSPC’s debt obligations to the extent we provide financial guarantees in connection with its funding facilities.

Strikes or other forms of work stoppage or slowdown could disrupt our business and lead to increased costs.

Our financial performance is dependent on a reliable and productive work force. A significant portion of our workforce, and that of the joint ventures in which we participate, is covered by collective bargaining agreements with unions. Unsuccessful contract negotiations or adverse labor relations could result in strikes or slowdowns. Any ~~disruptions~~disruption may decrease our production and sales or impose additional costs to resolve disputes. The risk of adverse labor relations may increase as our profitability increases because labor unions’ expectations and demands generally rise at those times.

Accidents occurring in the course of our operating activities could result in significant liabilities, interruptions or shutdowns of facilities or the need for significant safety or other expenditures.

We engage in mining and industrial activities that can result in serious accidents. If our safety procedures are not effective, or if an accident occurs, we could be subject to liabilities arising out of property damage, personal injuries or death, our operations could be interrupted and we might have to shut down or abandon affected facilities. Accidents could cause us to expend significant amounts to remediate safety issues or to repair damaged facilities. For example:

Some of our facilities are subject to potential damage from earthquakes.

The excavation of mines can result in potential seismic events or can increase the likelihood or potential severity of a seismic event. The rise and fall of water levels, such as those arising from the brine inflows and our remediation activities at our Esterhazy mine, can also result in or increase the likelihood or potential severity of a seismic event. Our Esterhazy mine ~~has~~and southern Louisiana facilities have experienced minor seismic events from time to ~~time and southern Louisiana has had at least one such experience recently.~~time. A significant seismic event at one of our facilities or mines could result in serious injuries or death, or damage to or flooding operations, or damage to adjoining properties or facilities of unrelated third parties. In an extreme scenario, seismic activity could cause us to disrupt our operations, or change our mining process or abandon the mine.

Our underground potash shaft mines are subject to risk from fire. In the event of a fire, if our emergency procedures are not successful, we could have significant injuries or deaths. In addition, fire at one of our underground shaft mines could halt our operations at the affected mine while we investigate the origin of the fire or for longer periods for remedial work or otherwise.

Our underground potash shaft mines at Esterhazy and Colonsay, Saskatchewan, Carlsbad, New Mexico and Taquari-Vassouras, Brazil are subject to risk from fire. Any failure of our safety procedures in the future could result in serious injuries or death, or shutdowns, which could result in significant liabilities and/or impact on the financial performance of our Potash and Mosaic Fertilizantes business, including a possible material adverse effect on our results of operations, liquidity or financial condition.

We handle significant quantities of ammonia at several of our facilities. If our safety procedures are not effective, an accident involving our ammonia operations could result in serious injuries or death, or result in the shutdown of our facilities.

We produce ammonia at our Faustina, Louisiana phosphate concentrates plant, use ammonia in significant quantities at all of our Florida and Louisiana phosphates concentrates plants and store ammonia at some of our distribution facilities. For our Florida phosphates concentrates plants, ammonia is received at terminals in Tampa and transported by pipelines to our facilities. We also use ammonia in our Brazil phosphate operations. Our ammonia is generally stored and transported at high pressures or cryogenically. An accident could occur that could result in serious injuries or death, or the evacuation of areas near an accident. An accident could also result in property damage or the

shutdown of our phosphates concentrates plants, the ammonia terminals, or pipelines serving those plants or our other ammonia storage and handling facilities. As a result, an accident involving ammonia could have a material adverse effect on our results of operations, liquidity or financial condition.

We also use or produce other hazardous or volatile chemicals at some of our facilities. If our safety procedures are not effective, an accident involving these other hazardous or volatile chemicals could result in serious injuries or death, or result in the shutdown of our facilities.

We use sulfuric acid in the production of concentrated phosphates in our Florida and Louisiana U.S. operations and our Brazil operations. Some of our Florida facilities produce fluorosilicic acid, which is a hazardous chemical, for resale to third parties. We also use or produce other hazardous or volatile chemicals at some of our facilities. An accident involving any of these chemicals could result in serious injuries or death, or evacuation of areas near an accident. An accident could also result in property damage or shutdown of our facilities, or cause us to expend significant amounts to remediate safety issues or to repair damaged facilities. As a result, an accident involving any of these chemicals could have a material adverse effect on our results of operations, liquidity or financial condition.

We use tailings, sediments and water dams to manage residual materials generated by our Brazilian mining operations. If our safety procedures are not effective, an accident involving these impoundments could result in serious injuries or death, damage to property or the environment, or result in the shutdown of our facilities, any of which could materially adversely affect our results of operations in Brazil.

Mining and processing of potash and phosphate generate residual materials that must be managed both during the operation of the facility and upon facility closure. Potash tailings, consisting primarily of salt and clay, are stored in surface disposal sites. Phosphate clay residuals from mining in Brazil are deposited in large tailing dams. They are regularly monitored to evaluate structural stability and for leaks. The failure of tailings dams and other impoundments at any of our Brazilian mining operations could cause severe property and environmental damage and loss of life. As a result, we apply significant operational and financial resources and both internal and external technical resources towards operating those facilities safely.

We own and maintain 11 tailings dams in Brazil. ~~With~~In response to the ~~exception of one tailings dam, all have current certificates of stability issued by external consultants, and are in compliance with Brazilian legal, operational and safety requirements. In addition,~~new mining regulations, we ~~have arranged for an independent third-party assessment of~~conducted inspections at all of our ~~Brazilian~~tailings dams ~~which we expect to be completed during~~in Brazil under the ~~second quarter of~~new regulatory standards. We had temporarily idled operations at four tailings dams and the three related mines at Araxá, Tapira and Catalão. We resumed full mining operations at Catalão in June 2019, and at Tapira and Araxá in September 2019. WeIn addition, we continue to augment our existing practices in an effort to reduce the risk of catastrophic failure and expect to bring all our tailings dams to be in compliance with Brazilian safety ~~requirements~~requirements. As part of our remediation efforts, and in ~~the near future.~~ In the ordinary course of business, we ~~may need~~plan to build and license new ~~dams.~~dams in Brazil.

~~In response to recent large scale tailings dam failures in Brazil at unaffiliated mines, new legislation~~Legislation at both Brazilian federal and state levels has introduced new rules regarding tailings dam safety, construction, ~~environmental licenses~~licensing and operations. We cannot predict the full impact of these legislative or potentially related judicial actions, or future actions, or whether or how it would affect our Brazilian operations or customers.

Any accident involving our Brazilian tailings or other dams, or any shut down or idling of our related mines, could have a material adverse effect on our results of ~~operations in Brazil~~.operations.

Deliberate, malicious acts, including cyber attacks and terrorism, could damage our facilities, disrupt our operations or injure employees, contractors, customers or the public and result in liability to us.

Intentional acts of destruction could hinder our sales or production and disrupt our supply chain. Our facilities could be damaged or destroyed, reducing our operational production capacity and requiring us to repair or replace our facilities at substantial cost. Employees, contractors and the public could suffer substantial physical injury for which we could be liable. Governmental authorities may impose security or other requirements that could make our operations more difficult or costly. The consequences of any such actions could adversely affect our operating results and financial condition.

We may be adversely affected by changing antitrust laws to which we are subject. Increases in crop nutrient prices can increase the scrutiny to which we are subject under these laws.

We are subject to antitrust and competition laws in various countries throughout the world. We cannot predict how these laws or their interpretation, administration and enforcement will change over time. Changes in antitrust laws globally, or in their interpretation, administration or enforcement, may limit our existing or future operations and growth, or the operations of Canpotex, which serves as an export association for our Potash ~~business.~~ business in Canada.

Increases in crop nutrient prices have in the past resulted in increased scrutiny of the crop nutrient industry under antitrust and competition ~~laws and~~laws. Such price increases can increase the risk that

these laws could be interpreted, administered or enforced in a manner that could affect our operating practices or impose liability on us in a manner that could materially adversely affect our operating results and financial condition.

We may be adversely affected by other changes in laws resulting from increases in food and crop nutrient prices.

Increases in prices for, among other things, food, fuel and crop inputs (including crop nutrients) have in the past been the subject of significant discussion by various governmental bodies and officials throughout the world. In response to increases,

it is possible that governments in one or more of the locations in which we operate or where we or our competitors sell our products could take actions that could adversely affect us. Such actions could include, among other matters, changes in governmental policies relating to agriculture and biofuels (including changes in subsidy levels), price controls, tariffs, windfall profits taxes or export or import taxes. Any such actions could materially adversely affect our operating results and financial condition.

Our competitive position could be adversely affected if we are unable to participate in continuing industry consolidation.

Most of our products are readily available from a number of competitors, and price and other competition in the crop nutrient industry is intense. In addition, crop nutrient production facilities and distribution activities frequently benefit from economies of scale. As a result, particularly during pronounced cyclical troughs, the crop nutrient industry has a long history of consolidation. Mosaic itself is the result of a number of industry consolidations. We expect consolidation among crop nutrient producers could continue. Our competitive position could suffer to the extent we are not able to expand our own resources either through consolidations, acquisitions, joint ventures or partnerships. In the future, we may not be able to find suitable companies to combine with, assets to purchase or joint venture or partnership opportunities to pursue. Even if we are able to locate desirable opportunities, we may not be able to enter into transactions on economically acceptable terms. If we do not successfully participate in continuing industry consolidation, our ability to compete successfully could be adversely affected and result in the loss of customers or an uncompetitive cost structure, which could adversely affect our sales and profitability.

Our strategy for managing market and interest rate risk may not be effective.

Our businesses are affected by fluctuations in market prices for our products, the purchase price of natural gas, ammonia and sulfur consumed in operations, freight and shipping costs, foreign currency exchange rates and interest rates. We periodically enter into derivatives and forward purchase contracts to mitigate some of these risks. However, our strategy may not be successful in minimizing our exposure to these fluctuations. See “Market Risk” in our Management’s Analysis and Note 1516 of our Notes to Consolidated Financial Statements that is incorporated by reference in this report in Part II, Item 8.

A shortage or unavailability of railcars, tugs, barges and ships for carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation or equipment costs.

We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need and to deliver our products to our customers. In addition, the cost of transportation is an important part of the final sale price of our products. Finding affordable and dependable transportation is important in obtaining our raw materials and to supply our customers. Higher costs for these transportation services or an interruption or slowdown due to factors including high demand, high fuel prices, labor disputes, layoffs or other factors affecting the availability of qualified transportation workers, adverse weather or other environmental events, or changes to rail, barge or ocean freight systems, could negatively affect our ability to produce our products or deliver them to our customers, which could affect our performance and results of operations.

Strong demand for grain and other products and a strong world economy increase the demand for and reduce the availability of transportation, both domestically and internationally. Shortages of railcars, barges and ocean transport for carrying product and increased transit time may result in customer dissatisfaction, loss of sales and higher equipment and transportation costs. In addition, during periods when the shipping industry has a shortage of ships, the substantial time needed to build new ships prevents rapid market response. Delays and missed shipments due to transportation shortages, including vessels, barges, railcars and trucks, could result in customer dissatisfaction or loss of sales potential, which could negatively affect our performance and results of operations.

Additionally, we have agreed under our long-term CF Ammonia Supply Agreement to purchase approximately 545,000 to 725,000 tonnes of ammonia per year during a term that may extend until December 31, 2032, at a price to be determined by a formula based on the prevailing price of U.S. natural gas. We are obligated to provide for transportation of the ammonia

under the agreement, and if we fail to take the required minimum annual amount, CF may elect to require us to make payment of liquidated damages or terminate the agreement. Payment of significant liquidated damages or an election by CF to terminate the agreement could adversely affect our business. If the price of natural gas rises or the market price for ammonia falls outside of the range anticipated at execution of this agreement, we may not realize a cost benefit from the natural gas-based pricing over the term of the agreement, or the cost of our ammonia under the agreement could become a competitive disadvantage.

A lack of customers’ access to credit can adversely affect their ability to purchase our products.

Some of our customers require access to credit to purchase our products. A lack of available credit to customers in one or more countries, due to global or local economic conditions or for other reasons, could adversely affect demand for crop nutrients.

We extend trade credit to our customers and guarantee the financing that some of our customers use to purchase our products. Our results of operations may be adversely affected if these customers are unable to repay the trade credit from us or financing from their banks. Increases in prices for crop nutrient, other agricultural inputs and grain may increase this risk.

We extend trade credit to our customers in the United States and throughout the world, in some cases for extended periods of time. In Brazil, where there are fewer third-party financing sources available to farmers, we also have several programs under which we guarantee customers’ financing from financial institutions that they use to purchase our products. As our exposure to longer trade credit extended throughout the world and use of guarantees in Brazil increases, we are increasingly exposed to the risk that some of our customers will not pay us or the amounts we have guaranteed. Additionally, we become increasingly exposed to risk due to weather and crop growing conditions, fluctuations in commodity prices or foreign currencies, and other factors that influence the price, supply and demand for agricultural commodities. Significant defaults by our customers could adversely affect our financial condition and results of operations.

Increases in prices for crop nutrients increase the dollar amount of our sales to customers. The larger dollar value of our customers’ purchases may also lead them to request longer trade credit from us and/or increase their need for us to guarantee their financing of our products. Either factor could increase the amount of our exposure to the risk that our customers may be unable to repay the trade credit from us or financing from their banks that we guarantee. In addition, increases in prices for other agricultural inputs and grain may increase the working capital requirements, indebtedness and other liabilities of our customers, increase the risk that they will default on the trade credit from us or their financing that we guarantee, and decrease the likelihood that we will be able to collect from our customers in the event of their default.

Provisions in our restated certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.

Our restated certificate of incorporation and our amended and restated bylaws contain provisions that could have the effect of rendering more difficult or discouraging an acquisition deemed undesirable by our board of directors. These provisions include the ability of our board of directors to issue preferred stock without stockholder approval, a prohibition on stockholder action by written consent and the inability of our stockholders to request that our board of directors or chairman of our board call a special meeting of stockholders.

We are also subject to Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years from the date of the transaction in which the person became an interested stockholder, unless the interested stockholder attained this status with the approval of the board of directors or unless the business combination was approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years owned, 15% or more of the corporation’s voting stock. This statute could prohibit or delay the accomplishment of mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.

These provisions apply not only when they may protect our stockholders from coercive or otherwise unfair takeover tactics but even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is in our best interests and those of our stockholders.

Our success will continue to depend on our ability to attract and retain highly qualified and motivated employees.

We believe our continued success depends on the collective abilities and efforts of our employees. Like many businesses, a significant number of our employees, including some of our most highly skilled employees with specialized expertise in general corporate matters, potash and phosphates operations, will be approaching retirement age throughout the next decade and beyond. In addition, we

compete for a talented workforce with other businesses, particularly within the mining and chemicals industries in general and the crop nutrients industry in particular. Our expansion plans are highly dependent on our ability to attract, retain and train highly qualified and motivated employees who are essential to the success of our ongoing

operations as well as to our expansion plans. If we were to be unsuccessful in attracting, retaining and training the employees we require, our ongoing operations and expansion plans could be materially and adversely affected.

Future product or technological innovation could affect our business.

Future product or technological innovations by third parties such as the development of seeds that require less crop nutrients, the development of substitutes for our products or developments in the application of crop nutrients, if they occur, could have the potential to adversely affect the demand for our products and our results of operations, liquidity and capital ~~resources.~~

We may fail to fully realize the anticipated benefits and synergies of our acquisition (the “Acquisition”) of the global phosphate and potash operations of Vale S.A. (“Vale”) conducted through Vale Fertilizantes S.A. (now known as Mosaic Fertilizantes P&K S.A.).

The success of the Acquisition will depend, in part, on our ability to realize the anticipated benefits and synergies. Our ability to realize these anticipated benefits and synergies is subject to certain risks including:

~~our ability to successfully integrate Mosaic Fertilizantes to eliminate duplicative overhead and other costs and realize our cost savings goals;~~

~~whether the combined operations will perform as expected;~~

~~whether the integration of Mosaic Fertilizantes takes longer than anticipated or involves higher than projected integration costs;~~

~~whether the integration process disrupts our on-going operations or diverts the attention of our management from our current operations; and~~

~~political and economic instability in Brazil or changes in government regulation or policy in Brazil, such as higher costs associated with the implementation of new freight tables;~~resources

The success of our other strategic initiatives depends on our ability to effectively manage these initiatives, and to successfully integrate and grow acquired businesses.

In addition to the Acquisition, we have other significant ongoing strategic initiatives, including, principally our plans to expand the annual production capacity of our Potash business and MWSPC. These strategic initiatives involve capital and other expenditures of several billions of dollars over a number of years and require effective project management and, in the case of strategic acquisitions, successful integration. To the extent the processes we (or, for the MWSPC, we together with our joint venture partners) put in place to manage these initiatives or integrate and grow acquired businesses are not effective, our capital expenditure and other costs may exceed our expectations or the benefits we expect from these initiatives might not be fully realized, or both, thereby resulting in adverse effects on our operating results and financial condition.

We may fail to fully realize the anticipated benefits and cost savings of our long-term CF Ammonia Supply Agreement.

We use ammonia as a raw material in the production of our concentrated phosphate products. Under our long-term CF Ammonia Supply Agreements we have agreed to purchase approximately 545,000 to 725,000 tonnes of ammonia per year during a term that may extend until December 31, 2032 at a price to be determined by a formula based on the prevailing price of U.S. natural gas.

The success of this agreement ~~will depend,~~depends, in part, on our ability to realize cost savings from the agreement’s natural gas based pricing. If the price of natural gas rises materially or the market price for ammonia falls outside of the range we currently anticipate over the term of the agreement, we may not realize a cost benefit from the agreement, or the cost of our ammonia under the agreement could be a competitive disadvantage. Over the past few years, we paid considerably more for ammonia under the agreement than we would pay had we purchased it in the spot market. In addition, our ability to realize benefits and cost savings is subject to certain additional risks, including whether CF successfully performs its obligations under the agreement over the life of its commitment and our ability to take delivery of the required minimum annual amount of ammonia over the life of our commitment.

Cyber attacks could disrupt our operations and have a material adverse impact on our business.

As a global company, we utilize and rely upon information technology systems in many aspects of our business, including internal and external communications and the management of our accounting, financial, production and supply chain functions. As we become more dependent on information technologies to conduct our operations, and as the number and sophistication of cyber attacks increase, the risks associated with cyber security increase. These risks apply to us, our employees, and to third parties on whose systems we rely for the conduct of our business. We have experienced cyber attacks but to our knowledge, we have not experienced any material breaches of our technology systems. Failure to effectively anticipate, prevent, detect and recover from the increasing number and sophistication of cyber attacks could result in theft, loss or misuse of, or damage or modification of our information, and cause disruptions or delays in our business, reputational damage and third-party claims, which could have a material adverse effect on our results of operations or financial condition.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Information regarding our plant and properties is included in Part I, Item 1, “Business,” of this report.

Item 3. Legal Proceedings.

We have included information about legal and environmental proceedings in Note 2224 of our Notes to Consolidated Financial Statements. That information is incorporated herein by reference.

We are also subject to the following legal and environmental proceedings in addition to those described in Note 2224 of our Consolidated Financial Statements included in this report:

~~Water~~Waters of the United States. In June 2015, ~~the~~ EPA and the U.S. Army Corps of Engineers (the ~~"Corps"~~“Corps”) jointly issued a final rule that proposed to clarify, but may actually expand, the scope of waters regulated under the federal Clean Water Act. The final rule (the ~~"2015~~“2015 Clean Water ~~Rule"~~Rule”) became effective in August 2015, but has been challenged through numerous lawsuits. In October 2015, the U.S. Court of Appeals for the Sixth Circuit issued an order staying the effectiveness of the final rule nationwide pending adjudication of substantive challenges to the rule. In early 2017, the U.S. President issued an Executive Order directing ~~the~~ EPA and the Corps to publish a proposed rule rescinding or revising the new rule. In June 2017, ~~the~~ EPA and the Corps issued a proposed rule that would rescind the 2015 Clean Water Rule and re-codify regulatory text that existed prior to enactment of the 2015 Clean Water Rule. In November 2017, ~~the~~ EPA issued a rule notice proposing to extend the applicability date of the 2015 Clean Water Rule for two years from the date of final ~~actions~~action on the proposed rule, to provide continuity and regulatory certainty while agencies proceed to consider potential changes to the 2015 Clean Water Rule.

In January 2018, the U.S. Supreme Court unanimously held all challenges to the 2015 Clean Water Rule must be heard in federal district courts rather than in the federal courts of appeal, overruling a decision by the Sixth Circuit's Court of Appeals. With the Sixth Circuit Court of Appeals no longer having jurisdiction, ~~the~~that court lifted its 2015 nationwide stay in February 2018. After the nationwide stay was lifted, a number of U.S. District Courts revived dormant litigation that challenged the 2015 Clean Water Rule. In June 2018, the U.S. District Court for the Southern District of Georgia entered an injunction against implementation of the 2015 Clean Water Rule covering 11 states, including Florida. As of September 2018, federal district courts have put the 2015 Clean Water Rule on hold in 28 states, the District of ~~Colombia~~Columbia and the U.S. territories.

Repeal of ~~water resources~~the 2015 Clean Water Rule was the first step in a two-step rulemaking process to define the scope of “waters of the United States” that are regulated under the Clean Water Act. The second step is finalizing the regulation proposed in December 2018 that would define where federal ~~law, thereby potentially expanding our permitting~~jurisdiction begins and ~~reporting requirements, increasing our costs of compliance, including costs associated~~ends in accordance with ~~wetlands~~the Clean Water Act and ~~stream mitigation, lengthening the time necessary to obtain permits, and potentially restricting our ability to mine certain of our phosphate rock reserves.~~Supreme Court precedent.

Item 4. Mine Safety Disclosures.

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this report.

PART II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

We have included information about the market price of, dividends on and the number of holders of our common stock under “Quarterly Results (Unaudited)” in the financial information that is incorporated by reference in this report in Part II, Item 8, “Financial Statements and Supplementary Data.”

The principal stock exchange on which our common stock is traded is The New York Stock Exchange under the symbol "MOS."

The following provides information related to equity compensation plans:


Plan category	Number of shares to be issued upon exercise of outstanding options, warrants and rights ^(a)	Weighted-average exercise price of outstanding options, warrants and rights ^(b)		Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in first column)	Number of shares to be issued upon exercise of outstanding options, warrants and rights ^(a)	Weighted-average exercise price of outstanding options, warrants and rights ^(b)			Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in first column)
Equity compensation plans approved by stockholders	4,900,272	$	49.20	35,514,673	6,312,525	$	44.69		31,160,761
Equity compensation plans not approved by stockholders	—	—		—	—	—		��	—
Total	4,900,272	$	49.20	35,514,673	6,312,525	$	44.69		31,160,761



			Dollars
	Shares		Mosaic Shareholders
	Common Stock		Common Stock		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interests			Total Equity
Balance as of December 31, 2016	350.2		$	3.5	$	29.9		$	10,863.4		$	(1,312.2	)	$	37.9		$	9,622.5
Total comprehensive income (loss)	—		—		—			(107.2		)	250.6			2.6			146.0
Vesting of restricted stock units	0.8		—		(12.8		)	—			—			—			(12.8		)
Stock based compensation	—		—		27.4			—			—			—			27.4
Dividends ($0.35 per share)	—		—		—			(125.1		)	—			—			(125.1		)
Dividends for noncontrolling interests	—		—		—			—			—			(0.7		)	(0.7		)
Distribution to noncontrolling interests	—		—		—			—			—			(18.2		)	(18.2		)
Balance as of December 31, 2017	351.0		3.5		44.5			10,631.1			(1,061.6		)	21.6			9,639.1
Adoption of ASC Topic 606	—		—		—			2.7			—			—			2.7
Total comprehensive income (loss)	—		—		—			470.0			(595.5		)	(5.3		)	(130.8		)
Vesting of restricted stock units	0.3		—		(3.4		)	—			—			—			(3.4		)
Stock based compensation	—		—		25.1			—			—			—			25.1
Acquisition of Vale Fertilizantes	34.2		0.3		919.7			—			—			—			920.0
Dividends ($0.10 per share)	—		—		—			(39.1		)	—			—			(39.1		)
Dividends for noncontrolling interests	—		—		—			—			—			(0.6		)	(0.6		)
Equity from noncontrolling interests	—		—		—			—			—			191.7			191.7
Balance as of December 31, 2018	385.5		3.8		985.9			11,064.7			(1,657.1		)	207.4			10,604.7
Adoption of ASC Topic 842	—		—		—			0.6			—			—			0.6
Total comprehensive (loss) income	—		—		—			(1,067.4		)	58.9			(24.6		)	(1,033.1		)
Vesting of restricted stock units	0.4		—		(5.6		)	—			—			—			(5.6		)
Stock based compensation	—		—		27.9			—			—			—			27.9
Repurchases of stock	(7.1	)	—		(149.8		)	—			—			—			(149.8		)
Dividends ($0.20 per share)	—		—		—			(76.4		)	—			—			(76.4		)
Dividends for noncontrolling interests	—		—		—			—			—			(0.7		)	(0.7		)
Balance as of December 31, 2019	378.8		$	3.8	$	858.4		$	9,921.5		$	(1,598.2	)	$	182.1		$	9,367.6

Dollars
Shares Mosaic Shareholders

Common
Stock

Common
Stock

Capital in
Excess
of Par Value

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Non-
Controlling
Interests

Total
Equity
Balance as of December 31, 2015 352.5
$ 3.5
$ 6.4
$ 11,014.8
$ (1,492.9 ) $ 33.2
$ 9,565.0
Total comprehensive income (loss) —
—
—
297.8
180.7
5.5
484.0
Stock option exercises 0.5
—
3.8
—
—
—
3.8
Stock based compensation —
—
29.2
—
—
—
29.2
Repurchases of stock (2.8 ) —
(9.5 ) (65.5 ) —
—
(75.0 )
Dividends ($1.10 per share) —
—
—
(383.7 ) —
—
(383.7 )
Dividends for noncontrolling interests —
—
—
—
—
(0.8 ) (0.8 )
Balance as of December 31, 2016 350.2
3.5
29.9
10,863.4
(1,312.2 ) 37.9
9,622.5
Total comprehensive income (loss) —
—
—
(107.2 ) 250.6
2.6
146.0
Vesting of restricted stock units 0.8
—
(12.8 ) —
—
—
(12.8 )
Stock based compensation —
—
27.4
—
—
—
27.4
Dividends ($0.35 per share) —
—
—
(125.1 ) —
—
(125.1 )
Dividends for noncontrolling interests —
—
—
—
—
(0.7 ) (0.7 )
Distribution to noncontrolling interests —
—
—
—
—
(18.2 ) (18.2 )
Balance as of December 31, 2017 351.0
3.5
44.5
10,631.1
(1,061.6 ) 21.6
9,639.1
Adoption of ASC Topic 606 —
—
—
2.7
—
—
2.7
Total comprehensive income (loss) —
—
—
470.0
(595.5 ) (5.3 ) (130.8 )
Vesting of restricted stock units 0.3
—
(3.4 ) —
—
—
(3.4 )
Stock based compensation —
—
25.1
—
—
—
25.1
Acquisition of Vale Fertilizantes 34.2
0.3
919.7
—
—
—
920.0
Dividends ($0.10 per share) —
—
—
(39.1 ) —
—
(39.1 )
Dividends for noncontrolling interests —
—
—
—
—
(0.6 ) (0.6 )
Equity from noncontrolling interests —
—
—
—
—
191.7
191.7
Balance as of December 31, 2018 385.5
$ 3.8
$ 985.9
$ 11,064.7
$ (1,657.1 ) $ 207.4
$ 10,604.7

See Accompanying Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Tables in millions, except per share amounts

1. ORGANIZATION AND NATURE OF BUSINESS

The Mosaic Company (“Mosaic,”, and, with its consolidated subsidiaries, “we,”, “us,”, “our,”, or the “Company”) produces and markets concentrated phosphate and potash crop nutrients. We conduct our business through wholly and majority owned subsidiaries and businesses in which we own less than a majority or a noncontrolling interest, including consolidated variable interest entities and investments accounted for by the equity method.

On January 8, 2018, we completed our acquisition (the “Acquisition”) of Vale Fertilizantes S.A. (now known as Mosaic Fertilizantes P&K S.A. or the “Acquired Business”). Upon completion of the Acquisition, we became the leading fertilizer producer and distributor in Brazil. ~~To reflect the fact that our Brazilian business is no longer strictly a distribution business, as well as the significance of our investment in Brazil, we realigned our business segments (the “Realignment”). Beginning in the first quarter of 2018, we report the results of the Mosaic Fertilizantes business as a segment, along with our other reportable segments of Phosphates and Potash.~~

~~After the Realignment, we~~We are organized into the following business segments:

•

Our Phosphates business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate-based animal feed ingredients, and processing plants in Louisiana which produce concentrated phosphate crop nutrients. As part of the Acquisition, we acquired an additional 40% economic interest in the Miski Mayo Phosphate Mine in Peru, which increased our aggregate interest to 75%. These results are consolidated in the Phosphates segment. The Phosphates segment also includes our 25% interest in the Ma'aden Wa'ad Al Shamal Phosphate Company (the “MWSPC”), a joint venture to develop, own and operate integrated phosphate production facilities in the Kingdom of Saudi Arabia. We market approximately 25% of the MWSPC phosphate production. We recognize our equity in the net earnings or losses relating to MWSPC on a one-quarter lag in our Consolidated Statements of Earnings.

•

Our Potash business segment owns and operates potash mines and production facilities in Canada and the U.S. which produce potash-based crop nutrients, animal feed ingredients and industrial products. Potash sales include domestic and international sales. We are a member of Canpotex, Limited (“Canpotex”), an export association of Canadian potash producers through which we sell our Canadian potash outside the U.S. and Canada.

•

Our Mosaic Fertilizantes business segment includes the assets in Brazil that we acquired in the Acquisition, which include five Brazilian phosphate rock mines, four phosphate chemical plants and a potash mine in Brazil. The segment also includes our legacy distribution business in South America, which consists of sales offices, crop nutrient blending and bagging facilities, port terminals and warehouses in Brazil and Paraguay. We also have a majority interest in Fospar S.A., which owns and operates a single superphosphate granulation plant and a deep-water crop nutrition port and throughput warehouse terminal facility in Brazil.

~~Our~~ ~~Phosphates~~ business segment owns and operates mines and production facilities in Florida which produce concentrated phosphate crop nutrients and phosphate-based animal feed ingredients, and processing plants in Louisiana which produce concentrated phosphate crop nutrients. As part of the Acquisition, we acquired an additional 40% economic interest in the Miski Mayo Phosphate Mine in Peru, which increased our aggregate interest to 75%. These results are now consolidated in the Phosphates segment. The Phosphates segment also includes our 25% interest in the Ma'aden Wa'ad Al Shamal Phosphate Company (the “~~MWSPC~~”), a joint venture to develop, own and operate integrated phosphate production facilities in the Kingdom of Saudi Arabia. We market approximately 25% of the MWSPC phosphate production. We recognize our equity in the net earnings or losses relating to MWSPC on a one-quarter lag in our Consolidated Statements of Earnings.

~~Our~~ ~~Potash~~ business segment owns and operates potash mines and production facilities in Canada and the U.S. which produce potash-based crop nutrients, animal feed ingredients and industrial products. Potash sales include domestic and international sales. We are a member of Canpotex, Limited (“~~Canpotex”), an export association of Canadian potash producers through which we sell our Canadian potash outside the U.S. and Canada.~~

~~Our~~ ~~Mosaic Fertilizantes~~ business segment includes the assets in Brazil that we acquired in the Acquisition, which include five Brazilian phosphate rock mines, four phosphate chemical plants and a potash mine in Brazil. The segment also includes our legacy distribution business in South America, which consists of sales offices, crop nutrient blending and bagging facilities, port terminals and warehouses in Brazil and Paraguay. We also have a majority interest in Fospar S.A., which owns and operates a single superphosphate granulation plant and a deep-water crop nutrition port and throughput warehouse terminal facility in Brazil.

Intersegment eliminations, unrealized mark-to-market gains/losses on derivatives, debt expenses, Streamsong Resort^® results of operations, and the results of ~~our~~the China and India distribution businesses are included within Corporate, Eliminations and Other. As of January 1, 2019, certain selling, general and administrative costs that are not controllable by the business segments are no longer allocated to segments and are included within Corporate, Eliminations and Other. Our operating results for the years ended 2018 and 2017 have been recast to reflect this change.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement Presentation and Basis of Consolidation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Throughout the Notes to Consolidated Financial Statements, amounts in tables are in millions of dollars except for per share data and as otherwise designated.

The accompanying Consolidated Financial Statements include the accounts of Mosaic and its majority owned subsidiaries. Certain investments in companies in which we do not have control but have the ability to exercise significant influence are accounted for by the equity method.

Accounting Estimates

Preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. The most significant estimates made by management relate to the estimates of fair value of acquired assets and liabilities, the recoverability of non-current assets including goodwill, the useful lives and net realizable values of long-lived assets, environmental and reclamation liabilities, including asset retirement obligations (“ARO”), ~~the costs of our employee benefit obligations for pension plans~~ and ~~postretirement benefits,~~ income tax-related accounts, including the valuation allowance against deferred ~~income tax assets, inventory valuation and accruals for pending legal and environmental matters.~~income. Actual results could differ from these estimates.

Revenue Recognition

We generate revenues primarily by producing and marketing phosphate and potash crop nutrients. Revenue is recognized when control of the product is transferred to the customer, which is generally upon transfer of title to the customer based on the contractual terms of each arrangement. Title is typically transferred to the customer upon shipment of the product. In certain circumstances, which are referred to as final price deferred arrangements, we ship product prior to the establishment of a valid sales contract. In such cases, we retain control of the product and do not recognize revenue until a sales contract has been agreed to with the customer.

Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our goods. Our products are generally sold based on market prices prevailing at the time the sales contract is signed or through contracts which are priced at the time of shipment based on a formula. Sales incentives are ~~estimated as earned by the customer and~~ recorded as a reduction of ~~revenue.~~revenue at the time of initial sale. We estimate the variable consideration related to our sales incentive programs based on the sales terms with customers and historical experience. Shipping and handling costs are included as a component of cost of goods sold.

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.

We have elected to recognize the cost for freight and shipping as an expense in cost of sales, when control over the product has passed to the customer.

Non-Income Taxes

We pay Canadian resource taxes consisting of the Potash Production Tax and resource surcharge. The Potash Production Tax is a Saskatchewan provincial tax on potash production and consists of a base payment and a profits tax. In addition to the Canadian resource taxes, royalties are payable to the mineral owners with respect to potash reserves or production of potash. These resource taxes and royalties are recorded in our cost of goods sold. Our Canadian resource tax and royalty expenses were $211.9 million, $198.8 million and $142.0 million during 2019, 2018 and ~~$121.6 million during 2018,~~ 2017, ~~and 2016,~~ respectively.

We have approximately ~~$90.4~~$126.6 million of assets recorded as of December 31, ~~2018~~2019 related to PIS and Cofins, which is a Brazilian federal value-added tax, and income tax credits mostly earned in 2008 through ~~2018~~2019 that we believe will be realized through paying income taxes, paying other federal taxes or receiving cash refunds. Should the Brazilian government determine that these are not valid credits upon audit, this could impact our results in such period. We have recorded the PIS and Cofins credits at amounts which we believe are probable of collection. Information regarding PIS and Cofins taxes already audited is included in Note 2224 of our Notes to Consolidated Financial Statements.

Foreign Currency Translation

The Company’s reporting currency is the U.S. dollar; however, for operations located in Canada and Brazil, the functional currency is the local currency. Assets and liabilities of these foreign operations are translated to U.S. dollars at exchange rates in effect at the balance sheet date, while income statement accounts and cash flows are translated to U.S. dollars at the average exchange rates for the period. For these operations, translation gains and losses are recorded as a component of accumulated other comprehensive income in equity until the foreign entity is sold or liquidated. Transaction gains and losses result from transactions that are denominated in a currency other than the functional currency of the operation, primarily accounts receivable and intercompany loans in our Canadian entities denominated in U.S. dollars, and accounts payable in Brazil denominated in U.S. dollars. These foreign currency transaction gains and losses are presented separately in the Consolidated Statement of Earnings.

Cash and Cash Equivalents

Cash and cash equivalents include short-term, highly liquid investments with original maturities of 90 days or less and other highly liquid investments that are payable on demand such as money market accounts, certain certificates of deposit and

repurchase agreements. The carrying amount of such cash equivalents approximates their fair value due to the short-term and highly liquid nature of these instruments.

Concentration of Credit Risk

In the U.S., we sell our products to manufacturers, distributors and retailers, primarily in the Midwest and Southeast. Internationally, our potash products are sold primarily through Canpotex, an export association. A concentration of credit risk arises from our sales and accounts receivable associated with the international sales of potash product through Canpotex. We consider our concentration risk related to the Canpotex receivable to be mitigated by their credit policy, which requires the underlying receivables to be substantially insured or secured by letters of credit. As of December 31, 2019 and 2018, there was an immaterial amount of accounts receivable due from ~~Canpotex, compared to $37.8 million of accounts receivable due from Canpotex in 2017.~~Canpotex. During 2019, 2018 ~~2017,~~ and ~~2016,~~2017, sales to Canpotex were $952.5 million, $820.1 million ~~$700.6 million~~ and ~~$604.5~~$700.6 million, respectively.

Inventories

Inventories of raw materials, work-in-process products, finished goods and operating materials and supplies are stated at the lower of cost or net realizable value. Costs for substantially all inventories are determined using the weighted average cost basis. To determine the cost of inventory, we allocate fixed expense to the costs of production based on the normal capacity, which refers to a range of production levels and is considered the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Fixed overhead costs allocated to each unit of production should not increase due to abnormally low production. Those excess costs are recognized as a current period expense. When a production facility is completely shut down temporarily, it is considered ~~“idle”,~~“idle,” and all related expenses are charged to cost of goods sold.

Net realizable value of our inventory is defined as forecasted selling prices less reasonably predictable selling costs. Significant management judgment is involved in estimating forecasted selling prices including various demand and supply variables. Examples of demand variables include grain and oilseed prices, stock-to-use ratios and changes in inventories in the crop nutrients distribution channels. Examples of supply variables include forecasted prices of raw materials, such as phosphate rock, sulfur, ammonia and natural gas, estimated operating rates and industry crop nutrient inventory levels. Results could differ materially if actual selling prices differ materially from forecasted selling prices. Charges for lower of cost or market are recognized in our Consolidated Statements of Earnings in the period when there is evidence of a decline of market value below cost.

Property, Plant and Equipment and Recoverability of Long-Lived Assets

Property, plant and equipment are stated at cost. Costs of significant assets include capitalized interest incurred during the construction and development period. Repairs and maintenance, including planned major maintenance and plant turnaround costs, are expensed when incurred.

Depletion expenses for mining operations, including mineral reserves, are generally determined using the units-of-production method based on estimates of recoverable reserves. Depreciation is computed principally using the straight-line method and units-of-production method over the following useful lives: machinery and equipment three to 25 years, and buildings and leasehold improvements three to 40 years.

We estimate initial useful lives based on experience and current technology. These estimates may be extended through sustaining capital programs. Factors affecting the fair value of our assets or periods of expected use may also affect the estimated useful lives of our assets and these factors can change. Therefore, we periodically review the estimated remaining lives of our facilities and other significant assets and adjust our depreciation rates prospectively where appropriate.

We have worked extensively to ensure the mechanical integrity of our fixed assets in order to help prolong their useful lives, while helping to improve asset utilization and potential cash preservation. As a result, we completed an in-depth review of our fixed assets and concluded that for certain assets, we would make a change to the units-of-production depreciation method from the straight-line method to better reflect the pattern of consumption of those assets. We also determined the expected lives of certain mining and production equipment and reserves were longer than the previously estimated useful lives used to determine depreciation in our financial statements. As a result, effective January 1, 2017, we changed our estimates of the useful lives and method of determining the depreciation of certain equipment to better reflect the estimated periods during which these assets will remain in service. The effect of this change in estimates reduced depreciation expense, thus increasing operating earnings,

by approximately $65 million in 2017. Amounts may vary throughout the year due to changes in production levels. As a result of this change and actions taken to prolong asset lives, we expect our maintenance expense to increase in the future.

Long-lived assets, including fixed assets and right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment assessment involves management judgment and estimates of factors such as industry and market conditions, the economic life of the asset, sales volume and prices, inflation, raw materials costs, cost of capital, tax rates and capital spending. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset group exceeds its fair value.

Leases

Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease, based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. For both operating and finance leases, the initial ROU asset equals the lease liability, plus initial direct costs, less lease incentives received. Our lease agreements may include options to extend or terminate the lease, which are included in the lease term at the commencement date when it is reasonably certain that we will exercise that option. In general, we do not consider optional periods included in our lease agreements as reasonably certain of exercise at inception.

At inception, we determine whether an arrangement is a lease and the appropriate lease classification. Operating leases with terms greater than twelve months are included as operating lease ROU assets within other assets and the associated lease liabilities within accrued liabilities and other noncurrent liabilities on our consolidated balance sheets. Finance leases with terms greater than twelve months are included as finance ROU assets within property and equipment and the associated finance lease liabilities within current maturities of long-term debt and long-term debt on our consolidated balance sheets.

Leases with terms of less than twelve months, referred to as short-term leases, do not create an ROU asset or lease liability on the balance sheet.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. For full-service railcar leases, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply assumptions using a portfolio approach, given the generally consistent terms of the agreements. Lease payments based on usage (for example, per-mile or per-hour charges), referred to as variable lease costs, are recorded separately from the determination of the ROU asset and lease liability.

Contingencies

Accruals for environmental remediation efforts are recorded when costs are probable and can be reasonably estimated. In determining these accruals, we use the most current information available, including similar past experiences, available technology, consultant evaluations, regulations in effect, the timing of remediation and cost-sharing arrangements. Adjustments to accruals, recorded as needed in our Consolidated Statement of Earnings each quarter, are made to reflect changes in and current status of these factors.

We are involved from time to time in claims and legal actions incidental to our operations, both as plaintiff and defendant. We have established what we currently believe to be adequate accruals for pending legal matters. These accruals are established as part of an ongoing worldwide assessment of claims and legal actions that takes into consideration such items as advice of legal counsel, individual developments in court proceedings, changes in the law, changes in business focus, changes in the litigation environment, changes in opponent strategy and tactics, new developments as a result of ongoing discovery and our experience in defending and settling similar claims. The litigation accruals at any time reflect updated assessments of the then-existing claims and legal actions. The final outcome or potential settlement of litigation matters could differ materially from the accruals which we have established. Legal costs are expensed as incurred.

Pension and Other Postretirement Benefits

Mosaic offers a number of benefit plans that provide pension and other benefits to qualified employees. These plans include defined benefit pension plans, supplemental pension plans, defined contribution plans and other postretirement benefit plans.

We accrue the ~~risk~~funded status of ~~ownership~~our plans, which is ~~retained~~representative of our obligations under employee benefit plans and the related costs, net of plan assets measured at fair value. The cost of pensions and other retirement benefits earned by employees is generally determined with the assistance of an actuary using the projected benefit method prorated on service and management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected healthcare costs.

Additional Accounting Policies

To facilitate a better understanding of our consolidated financial statements we have disclosed the following significant accounting policies (with the exception of those identified above) throughout the following notes, with the related financial disclosures by major caption:



Note	Topic	Page
8	Earnings per Share	F-55
10	Investments in Non-Consolidated Companies	F-56
11	Goodwill	F-58
12	Structured Accounts Payable Arrangements	F-59
13	Marketable Securities Held in Trusts	F-61
14	Income Taxes	F-63
15	Accounting for Asset Retirement Obligations	F-68
16	Accounting for Derivative and Hedging Activities	F-70
17	Fair Value Measurements	F-71

3. RECENTLY ISSUED ACCOUNTING GUIDANCE

In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which revises the accounting for credit losses on financial instruments within its scope. The standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade and other receivables, and modifies the impairment model for available-for-sale (“AFS”) debt securities. The guidance amends the current other-than-temporary impairment model for AFS debt securities and provides that any impairment related to credit losses be recognized as an allowance (which could be reversed) rather than as a permanent reduction in the amortized cost basis of that security. Since the issuance of the standard is effective for us beginning January 1, 2020, we are revising our accounting policies and procedures to reflectthe requirements of this standard related to our trade receivables and AFS debt securities. Based on the composition of our trade receivables, current market conditions, and historical credit loss activity, we do not expect the adoption of this standard to significantly impact our consolidated results of operations or financial condition.

4. LEASES

Adoption of ASC Topic 842, "Leases"

In February 2016, the FASB issued a new standard (“ASC 842”) intended to improve financial reporting about leasing transactions. The FASB issued additional guidance subsequently to clarify aspects of the standard and provide certain relief for implementation. ASC 842 requires lessees to recognize on the balance sheet the rights and obligations created by leases with terms greater than twelve months. The primary change created by the ~~lessor are~~new standard is the recognition of ROU assets and lease liabilities by lessees for those leases previously classified as operating leases. ~~Leases which~~ASC 842 requires disclosures to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

We adopted ASC 842 effective January 1, 2019, with an immaterial, cumulative-effect adjustment to the opening balance of retained earnings as of that date. As allowed under the standard, we have not changed our accounting and reporting for lease arrangements for periods presented prior to January 1, 2019. The impacts upon adoption on previously reported amounts are shown below. Our accounting for capital leases (now referred to as finance leases) remained substantially ~~transfer all~~unchanged.

Adoption of the ~~benefits~~standard is not expected to significantly impact lease activity reported in our statements of earnings and ~~risks inherent~~cash flows.

We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.

Adoption of the standard related to leases impacted our previously reported results as follows:



	Balance as of		Adoption		Balance as of
	December 31, 2018		Adjustments		January 1, 2019
(in millions)
Operating lease right-of-use assets	$	—	$	241.1	$	241.1
Finance lease right-of-use assets	340.9		—		340.9
Accrued and other noncurrent liabilities	—		241.1		241.1
Long-term debt, including current maturities	302.2		—		302.2

Adoption of ASC 842 had no impact to cash from or used in ~~ownership~~operating, financing or investing on our consolidated cash flows statements.

Leasing Activity

We have operating and finance leases for heavy mobile equipment, railcars, fleet vehicles, field and plant equipment, river and cross-Gulf vessels, corporate offices, land, and computer equipment. Our leases have remaining lease terms of 1 year to 29 years, some of which include options to extend the leases for up to 10 years and some of which include options to terminate the leases within 1 year.

Finance and operating lease assets and liabilities as of December 31, 2019 were as follows:



Type of Lease Asset or Liability	Amount		Balance Sheet Classification
	(in millions)
Operating Leases
Right-of-use assets	$	192.1	Other assets
Lease liabilities:
Short-term	67.1		Accrued liabilities
Long-term	127.0		Other noncurrent liabilities
Total	$	194.1
Finance Leases
Right-of-use assets:
Gross assets	$	423.2
Less: accumulated depreciation	57.5
Net assets	$	365.7	Property, plant and equipment, net
Lease liabilities:
Short-term	$	41.7	Current maturities of long-term debt
Long-term	303.4		Long-term debt, less current maturities
Total	$	345.1

Lease expense is generally included within cost of goods sold and selling, general and administrative expenses, except for interest on lease liabilities, which is recorded within net interest. The components of lease expense were as follows:



	2019
(in millions)
Operating lease cost	$	98.4
Finance lease cost:
Amortization of right-of-use assets	28.3
Interest on lease liabilities	15.2
	43.5

Short-term lease cost	10.5
Variable lease cost	21.5
Total lease cost	$	173.9

Rental expense for 2019, 2018 and 2017 was $249.1 million, $270.3 million and $114.0 million, respectively.

Supplemental cash flow information related to leases was as follows:



	2019
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	107.9
Operating cash flows from finance leases	$	10.7
Financing cash flows from finance leases	$	41.3

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	56.0
Finance leases	$	88.2

Other information related to leases was as follows:



	December 31, 2019
Weighted Average Remaining Lease Term
Operating leases	4.7 years
Finance leases	4.8 years

Weighted Average Discount Rate
Operating leases	6.1	%
Finance leases	3.9	%

Future lease payments under non-cancellable leases recorded as of December 31, 2019, were as follows:



	Operating Leases			Finance Leases
(in millions)
2020	$	77.5		$	51.5
2021	51.6			53.2
2022	33.9			44.5
2023	22.2			76.1
2024	15.6			168.3
Thereafter	27.1			14.4
Total future lease payments	$	227.9		$	408.0
Less imputed interest	(33.8		)	(62.9		)
Total	$	194.1		$	345.1

5. REVENUE

Adoption of ASC Topic 606, “Revenue with Customers”

On January 1, 2018, we adopted ASC Topic 606, “Revenue from Contracts with Customers” and related amendments (“new revenue standard”) using the modified retrospective method applied to those revenue contracts which were not completed as of January 1, 2018. We recognized the cumulative effect of initially applying the new revenue standard as a net increase to opening retained earnings of $2.7 million, net of tax, as of January 1, 2018, with the impact primarily related to deferred North America revenue at December 31, 2017.

The comparative information for the year ended December 31, 2017 has not been restated and continues to be reported under the accounting standards in effect for that period. The adoption of the new standard has not had a significant impact on our results of operations on an ongoing basis. The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in millions):



	Balance at		Adjustments			Balance at
	December 31, 2017		Upon Adoption			January 1, 2018
Balance Sheet
Receivables, net	$	642.6	$	18.2		$	660.8
Inventories	1,547.2		(13.3		)	1,533.9
Deferred income tax asset	254.6		(1.3		)	253.3
Accrued Liabilities	754.4		0.9			755.3
Retained earnings	10,631.1		2.7			10,633.8

Revenue Recognition

We generate revenues primarily by producing and marketing phosphate and potash crop nutrients. Revenue is recognized when control of the product is transferred to the ~~lessee~~customer, which is generally upon transfer of title to the customer based on the contractual terms of each arrangement. Title is typically transferred to the customer upon shipment of the product. In certain circumstances, which are referred to as final price deferred arrangements, we ship product prior to the establishment of a valid sales contract. In such cases, we retain control of the product and do not recognize revenue until a sales contract has been agreed to with the customer.

Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our goods. Our products are generally sold based on market prices prevailing at the time the sales contract is signed or through contracts which are priced at the time of shipment based on a formula. Sales incentives are estimated as earned by the customer and recorded as a reduction of revenue. Shipping and handling costs are included as a component of cost of goods sold.

For information regarding sales by product type and by geographic area, see Note 26 of our Notes to Consolidated Financial Statements.

assumed by the customer will now be recognized when the product is shipped. Additionally, the timing of when we record revenue on sales by Canpotex has been impacted by their adoption of new revenue standards. The total impact of adoption on our condensed consolidated statement of earnings and balance sheet was as follows (in millions):



	For the year ended December 31, 2018
			Elimination of Revenue Deferral			Canpotex Impact (a)			Balances Without New Revenue Standards
	As Reported		Elimination of Revenue Deferral			Canpotex Impact (a)			Balances Without New Revenue Standards		Impact
Income Statement
Net sales	$	9,587.3	$	(87.9	)	$	96.4		$	9,595.8	(8.5		)
Cost of goods sold	8,088.9		(64.3		)	54.1			8,078.7		10.2
Provision for (benefit from) income taxes	77.1		(2.1		)	5.8			80.8		(3.7		)
Net earnings (loss) attributable to Mosaic	470.0		(21.5		)	36.5			485.0		(15.0		)

Balance Sheet
Receivables, net	$	838.5	$	(107.3	)	$	96.4		$	827.6	$	10.9
Inventories	2,270.2		48.1			(42.8		)	2,275.5		(5.3		)
Other current assets	280.6		23.5			—			304.1		(23.5		)
Deferred income tax asset	343.8		3.4			(5.8		)	341.4		2.4
Accrued liabilities	1,092.5		(8.1		)	11.4			1,095.8		(3.3		)
Retained earnings	11,064.7		(24.2		)	36.4			11,076.9		(12.2		)


(a)	Includes impact from Canpotex's adoption of new revenue standards, resulting in a deferral of approximately 450,000 tonnes as of December 31, 2018.

6. OTHER FINANCIAL STATEMENT DATA

The following provides additional information concerning selected balance sheet accounts:



	December 31,
(in millions)	2019		2018
Receivables
Trade	$	649.3	$	703.7
Non-trade	158.1		136.1
	807.4		839.8
Less allowance for doubtful accounts	3.5		1.3
	$	803.9	$	838.5
Inventories
Raw materials	$	68.3	$	147.5
Work in process	618.4		625.5
Finished goods	1,219.3		1,343.8
Final price deferred ^(a)	47.9		39.3
Operating materials and supplies	122.5		114.1
	$	2,076.4	$	2,270.2
Other current assets
Income and other taxes receivable	$	179.5	$	149.2
Prepaid expenses	110.7		86.8
Other	28.6		44.6
	$	318.8	$	280.6
Other assets
Restricted cash	$	5.4	$	15.8
MRO inventory	126.8		134.6
Marketable securities held in trust - restricted	691.7		632.3
Operating lease right-of-use assets ^(b)	192.1		—
Indemnification asset	40.6		30.7
Long-term receivable	81.6		91.7
Other	316.2		352.7
	$	1,454.4	$	1,257.8



	December 31,
(in millions)	2019		2018
Accrued liabilities
Accrued dividends	$	20.0	$	11.8
Payroll and employee benefits	173.8		217.5
Asset retirement obligations	154.4		136.3
Customer prepayments ^(c)	266.9		199.8
Accrued income tax	33.9		65.5
Operating lease obligation ^(b)	67.1		—
Other	365.8		461.6
	$	1,081.9	$	1,092.5
Other noncurrent liabilities
Asset retirement obligations	$	1,160.8	$	1,023.8
Operating lease obligation ^(b)	127.0		—
Accrued pension and postretirement benefits	173.6		146.3
Unrecognized tax benefits	42.1		33.0
Other	269.5		255.6
	$	1,773.0	$	1,458.7


(a)	Final price deferred is product that has shipped to customers, but the price has not yet been agreed upon.

(b)

We adopted ASC 842 effective January 1, 2019, with an immaterial, cumulative-effect adjustment to the opening balance of retained earnings as of that date. As allowed under the standard, we have not changed our accounting and reporting for lease arrangements for periods presented prior to January 1, 2019. See Note 4 to the Consolidated Financial Statements for additional information on the impact to our Consolidated Balance Sheets.

(c)

The timing of recognition of revenue related to our performance obligations may be different than the timing of collection of cash related to those performance obligations. Specifically, we collect prepayments from certain customers in Brazil. In addition, cash collection from Canpotex may occur prior to delivery of product to the end customer. We generally satisfy our contractual liabilities within one quarter of incurring the liability.

Interest expense, net was comprised of the following in 2019, 2018 and 2017:



	Years Ended December 31,
(in millions)	2019			2018			2017
Interest income	$	33.1		$	49.7		$	33.2
Less interest expense	216.0			215.8			171.3
Interest expense, net	$	(182.9	)	$	(166.1	)	$	(138.1	)

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:



	December 31,
(in millions)	2019		2018
Land	$	340.3	$	321.5
Mineral properties and rights	4,979.2		4,478.2
Buildings and leasehold improvements	3,108.7		2,760.9
Machinery and equipment	9,294.1		8,955.7
Construction in-progress	1,259.7		2,164.7
	18,982.0		18,681.0
Less: accumulated depreciation and depletion	7,292.0		6,934.5
	$	11,690.0	$	11,746.5

Depreciation and depletion expense was $877.6 million, $878.2 million and $659.4 million for 2019, 2018 and 2017, respectively. Capitalized interest on major construction projects was $28.5 million, $22.1 million and $23.9 million for 2019, 2018 and 2017.

8. EARNINGS PER SHARE

The numerator for basic and diluted earnings per share (“EPS”) is net earnings attributable to Mosaic. The denominator for basic EPS is the weighted average number of shares outstanding during the period. The denominator for diluted EPS also includes the weighted average number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued, unless the shares are anti-dilutive.

The following is a reconciliation of the numerator and denominator for the basic and diluted EPS computations:



	Years Ended December 31,
(in millions)	2019			2018		2017
Net (loss) earnings attributable to Mosaic	$	(1,067.4	)	$	470.0	$	(107.2	)
Basic weighted average number of shares outstanding attributable to common stockholders	383.8			384.8		350.9
Dilutive impact of share-based awards	—			1.6		—
Diluted weighted average number of shares outstanding	383.8			386.4		350.9
Basic net (loss) earnings per share	$	(2.78	)	$	1.22	$	(0.31	)
Diluted net (loss) earnings per share	$	(2.78	)	$	1.22	$	(0.31	)

A total of 2.5 million shares for 2019, 2.0 million shares for 2018 and 3.5 million shares for 2017 of common stock subject to issuance related to share-based awards have been excluded from the calculation of diluted EPS because the effect would have been anti-dilutive.

9. CASH FLOW INFORMATION

Supplemental disclosures of cash paid for interest and income taxes and non-cash investing and financing information is as follows:



	Years Ended December 31,
(in millions)	2019		2018			2017
Cash paid (received) during the period for:
Interest	$	231.3	$	196.0		$	178.9
Less amount capitalized	28.5		22.1			23.9
Cash interest, net	$	202.8	$	173.9		$	155.0
Income taxes	$	46.5	$	(34.2	)	$	(70.1	)

Acquiring or constructing property, plant and equipment by incurring a liability does not result in a cash outflow for us until the liability is paid. In the period the liability is incurred, the change in operating accounts payable on the Consolidated Statements of Cash Flows is adjusted by such amount. In the period the liability is paid, the amount is reflected as a cash outflow from investing activities. The applicable net change in operating accounts payable that was classified ~~as capital leases. Assets~~to investing activities on the Consolidated Statements of Cash Flows was $63.2 million, $(96.8) million and $11.1 million for 2019, 2018 and 2017 respectively.

We accrued $20.0 million related to the dividends declared in 2019 that will be paid in 2020. At December 31, 2018 and 2017, we had accrued dividends of $11.8 million and $12.1 million which were paid in 2019 and 2018, respectively.

On October 24, 2017, a lease financing transaction was completed with respect to an articulated tug and barge unit that is being used to transport ammonia for our operations. As described in more detail in Note 25, we had provided bridge loans to a consolidated affiliate for construction of the unit, and that entity also received construction loans from a joint venture in which we hold a 50% interest. Following the application of proceeds from the transaction, all outstanding construction loans to the joint venture entity, together with accrued interest, were repaid.

We had non-cash investing and financing transactions related to right-of-use assets obtained in exchange for lease obligations assets under finance leases in 2019 of $88.2 million. Non-cash investing and financing transactions related to assets acquired under capital leases ~~are depreciated on the same basis as~~were immaterial in 2018 and were $267.9 million in 2017.

Depreciation, depletion and amortization includes $877.6 million, $878.2 million and $659.4 million related to depreciation and depletion of property, plant and ~~equipment. Rental payments~~equipment, and $5.1 million, $5.7 million and $6.1 million related to amortization of intangible assets for 2019, 2018 and 2017 respectively.

10. INVESTMENTS IN NON-CONSOLIDATED COMPANIES

We have investments in various international and domestic entities and ventures. The equity method of accounting is applied to such investments when the ownership structure prevents us from exercising a controlling influence over operating and financial policies of the businesses but still allow us to have significant influence. Under this method, our equity in the net earnings or losses of the investments is reflected as equity in net earnings of non-consolidated companies on our Consolidated Statements of Earnings. The effects of material intercompany transactions with these equity method investments are ~~expensed~~eliminated, including the gross profit on sales to and purchases from our equity-method investments which is deferred until the time of sale to the final third party customer. The cash flow presentation of dividends received from equity method investees is determined by evaluation of the facts, circumstances and nature of the distribution.

A summary of our equity-method investments, which were in operation as of December 31, 2019, is as follows:



Entity	Economic Interest
Gulf Sulphur Services LTD., LLLP	50.0	%
River Bend Ag, LLC	50.0	%
IFC S.A.	45.0	%
MWSPC	25.0	%
Canpotex	36.2	%

The summarized financial information shown below includes all non-consolidated companies carried on the equity method.



	Years Ended December 31,
(in millions)	2019			2018				2017
Net sales	$	4,058.5		$	3,555.6		��	$	2,871.2
Net earnings (loss)	(215.0		)	(5.4		)		95.3
Mosaic’s share of equity in net earnings (loss)	(59.4		)	(4.5		)		16.7
Total assets	9,682.5			9,042.9				8,623.6
Total liabilities	7,512.7			6,658.2				5,971.9
Mosaic’s share of equity in net assets	554.7			609.1				712.8

The difference between our share of equity in net assets as shown in the above table and the investment in non-consolidated companies as shown on the Consolidated Balance Sheets is mainly due to the July 1, 2016, equity contribution of $120 million we made to MWSPC, representing the remaining liability for our portion of mineral rights value transferred to MWSPC from Ma’aden. As of December 31, 2019, MWSPC represented 81% of the total assets and 76% of the total liabilities in the table above. MWSPC commenced ammonia operations in late 2016 and, on December 1, 2018, commenced commercial operations of its DAP plant, thereby bringing the entire project to the commercial production phase. In 2019, 2018 and 2017 our share of (loss)/equity in net earnings was $(62.1) million, $(9.5) million, and $32.0 million, respectively.

MWSPC owns and operates a mine and two chemical complexes that produce phosphate fertilizers and other downstream phosphates products in the Kingdom of Saudi Arabia. The cost to develop and construct the integrated phosphate production facilities (the “Project”) was approximately $8.0 billion, which has been funded primarily through investments by us, Ma’aden and SABIC (together, the “Project Investors”), and through borrowing arrangements and other external project financing facilities (“Funding Facilities”). The production facilities are expected to have a capacity of approximately 3.0 million tonnes of finished product per year when fully operational. We market approximately 25% of the production of the joint venture.

On June 30, 2014, MWSPC entered into Funding Facilities with a consortium of 20 financial institutions for a total amount of approximately $5.0 billion.

Also on June 30, 2014, in support of the Funding Facilities, we, together with Ma’aden and SABIC, agreed to provide our respective proportionate shares of the funding necessary for MWSPC by:


(a)	Contributing equity or making shareholder subordinated loans of up to $2.4 billion to fund project costs to complete and commission the Project (the “Equity Commitments”).


(b)	Through the earlier of Project completion or June 30, 2020, contributing equity, making shareholder subordinated loans or providing bank subordinated loans, to fund cost overruns on the Project (the “Additional Cost Overrun Commitment”).

(c)

Through the earlier of Project completion or June 30, 2020, contributing equity, making shareholder loans or providing bank subordinated loans to fund scheduled debt service (excluding accelerated amounts) payable under the Funding Facilities and certain other amounts (such commitment, the “DSU Commitment” and such scheduled debt service and other amounts, “Scheduled Debt Service”). Our proportionate share of amounts covered by the DSU Commitment is not anticipated to exceed approximately $200 million. The fair value of the DSU Commitment at December 31, 2019 is not material.

(d)

From the earlier of the Project completion date or June 30, 2020, to the extent there is a shortfall in the amounts available to pay Scheduled Debt Service, depositing for the payment of Scheduled Debt Service an amount up to the respective amount of certain shareholder tax amounts, and severance fees under MWSPC’s mining license, paid within the prior 36 months by MWSPC on behalf of the Project Investors, if any.

In January 2016, MWSPC received approval from the Saudi Industrial Development Fund (“SIDF”) for loans in the total amount of approximately $1.1 billion for the Project, subject to the finalization of definitive agreements. In 2017, MWSPC entered into definitive agreements with SIDF to draw up to $560 million from the total SIDF-approved amount (the “SIDF Loans”). In September of 2018, we received communication that SIDF agreed to waive Mosaic's Parent Guarantee. MWSPC received approval to access the remaining SIDF facility of $506 million which was subsequently drawn in December 2018. Mosaic continues to have Equity Commitments, the Additional Cost Overrun Commitment and the DSU Commitment in relation to MWSPC project financing.

As of December 31, 2019, our cash investment was $770 million. We did not make any contributions in 2019 and do not expect future contributions will be needed even though we are contractually obligated to make future cash contributions up to approximately $70 million.

11. GOODWILL

Goodwill is carried at cost, not amortized, and represents the excess of the purchase price and related costs over the fair value assigned to the net identifiable assets of a business acquired. We test goodwill for impairment on a ~~straight-line basis. Leasehold improvements~~quantitative basis at the reporting unit level on an annual basis or upon the occurrence of events that may indicate possible impairment.

The changes in the carrying amount of goodwill, by reporting unit, as of December 31, 2019 and 2018, are ~~depreciated over~~as follows:



(in millions)	Phosphates			Potash			Mosaic Fertilizantes			Corporate, Eliminations and Other		Total
Balance as of December 31, 2017	492.4			1,076.9			124.3			—		1,693.6
Foreign currency translation	—			(76.5		)	(5.8		)	—		(82.3		)
Allocation of goodwill due to segment realignment	—			—			(12.1		)	12.1		—
Goodwill acquired in the Vale acquisition	96.2			—			—			—		96.2
Balance as of December 31, 2018	$	588.6		$	1,000.4		$	106.4		$	12.1	$	1,707.5
Foreign currency translation	—			39.4			(1.4		)	—		38.0
Impairment	(588.6		)	—			—			—		(588.6		)
Balance as of December 31, 2019	$	—		$	1,039.8		$	105.0		$	12.1	$	1,156.9

We elected early adoption of ASU 2017-04 effective January 1, 2017, “Intangibles─Goodwill and Other (Topic 350): Simplifying the ~~depreciable lives~~Test for Goodwill Impairment.” As a result, we removed Step 2 of the ~~corresponding fixed~~goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

As of October 31, 2019, we performed our annual quantitative assessment. In performing our assessment, we estimated the fair value of each of our reporting units using the income approach, also known as the discounted cash flow (“DCF”) method. The income approach utilized the present value of cash flows to estimate fair value. The future cash flows for our reporting units were projected based on our estimates, at that time, for revenue, operating income and other factors (such as working capital and capital expenditures for each reporting unit). To determine if the fair value of each of our reporting units with goodwill exceeded its carrying value, we assumed sales volume growth rates based on our long-term expectations, our internal selling prices and projected raw material prices for years one through five, which were anchored in projections from CRU International Limited, an independent third party data source. Selling prices and raw material prices for years six and beyond were based on anticipated market growth. The discount rates used in our DCF method were based on a weighted-average cost of capital (“WACC”), determined from relevant market comparisons. A terminal value growth rate of 2% was applied to the final year of the projected period and reflected our estimate of stable growth. We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Finally, we compared our estimates of

fair values for our reporting units, to our October 31, 2019 total public market capitalization, based on our common stock price at that date.

In making this assessment, we considered, among other things, expectations of projected net sales and cash flows, assumptions impacting the WACC, changes in our stock price and changes in the carrying values of our reporting units with goodwill. We also considered overall business conditions. As a result of our test, we concluded that the carrying value of our Phosphates reporting unit was in excess of its fair value due to a reduction in our long-term forecast, primarily related to changes in projected selling prices and raw material prices. Therefore, we recognized a goodwill impairment charge of $588.6 million which is included in impairment, restructuring and other expenses in our Consolidated Statement of Earnings (Loss) at December 31, 2019.

Based on our quantitative evaluation as of October 31, 2019, we determined that our Potash and Mosaic Fertilizantes reporting units had an estimated fair value that was not in significant excess of its carrying value. As a result, we concluded that the goodwill assigned to these reporting units was not impaired, but could be at risk of future impairment. We continue to believe that our long-term financial goals will be achieved. As a result of our analysis, we did not take a goodwill impairment charge related to either of these reporting units.

The Corporate, Eliminations and Other reporting unit was evaluated and not considered at risk of goodwill impairment at October 31, 2019.

Assessing the potential impairment of goodwill involves certain assumptions and estimates in our model that are highly sensitive and include inherent uncertainties that are often interdependent and do not change in isolation such as product prices, raw material costs, WACC, and terminal value growth rate. If any of these are different from our assumptions, future tests may indicate an impairment of goodwill, which would result in non-cash charges, adversely affecting our results of operations.

Of the factors discussed above, WACC is more sensitive than others. Assuming that all other components of our fair value estimate remain unchanged, a change in the WACC would have the following effect on estimated fair values in excess of carrying values:



		Sensitivity Analysis - Percent of Fair Values in Excess of Carrying Values
	Excess at Current WACC	WACC Decreased by 50 Basis Points	WACC Decreased by 25 Basis Points	WACC Increased by 25 Basis Points	WACC Increased by 50 Basis Points
Potash Reporting Unit	4.3%	12.0%	8.2%	0.4%	(3.7)%
Mosaic Fertilizantes Reporting Unit	4.6%	10.7%	7.7%	1.4%	(1.9)%

As of December 31, 2019, $5.1 million of goodwill was tax deductible.

12. FINANCING ARRANGEMENTS

Mosaic Credit Facility

On November 18, 2016, we entered into a new unsecured five-year credit facility of up to $2.72 billion (the “Mosaic Credit Facility”), which includes a $2.0 billion revolving credit facility and a $720 million term loan facility (the “Term Loan Facility”). The Mosaic Credit Facility is intended to serve as our primary senior unsecured bank credit facility. It increased, extended and replaced our prior unsecured credit facility, which consisted of a revolving facility of up to $1.5 billion (the “Prior Credit Facility”). Letters of credit outstanding under the Prior Credit Facility in the amount of approximately $18.3 million became letters of credit under the Mosaic Credit Facility. The maturity date of the Mosaic Credit Facility, including final maturity of the term loan thereunder, is November 18, 2021. The Term Loan Facility is described below under “Long-Term Debt, including Current Maturities.”

The Mosaic Credit Facility has cross-default provisions that, in general, provide that a failure to pay principal or interest under any one item of other indebtedness in excess of $50 million or $75 million for multiple items of other indebtedness, or breach or default under such indebtedness that permits the holders thereof to accelerate the maturity thereof, will result in a cross-default.

The Mosaic Credit Facility requires Mosaic to maintain certain financial ratios, including a ratio of Consolidated Indebtedness to Consolidated Capitalization Ratio (as defined) of no greater than 0.65 to 1.0 as well as a minimum Interest Coverage Ratio (as defined) of not less than 3.0 to 1.0. We were in compliance with these ratios as of December 31, 2019.

The Mosaic Credit Facility also contains other events of default and covenants that limit various matters. These provisions include limitations on indebtedness, liens, investments and acquisitions (other than capital expenditures), certain mergers, certain sales of assets and other matters customary for credit facilities of this nature.

As of December 31, 2019, we had outstanding letters of credit that utilized a portion of the amount available for revolving loans under the Mosaic Credit Facility of $13.1 million. At December 31, 2018, we had outstanding letters of credit of $14.3 million. The net available borrowings for revolving loans under the Mosaic Credit Facility were approximately $1.99 billion as of December 31, 2019. Unused commitment fees under the Mosaic Credit Facility and Prior Credit Facility accrued at an average annual rate of 0.20% for 2019 and 2018 and 0.16% for 2017, generating expenses of $4.0 million for 2019 and 2018 and $3.3 million for 2017.

Short-Term Debt

Short-term debt consists of the revolving credit facility under the Mosaic Credit Facility, under which there were no borrowings as of December 31, 2019, and various other short-term borrowings related to our related to our international operations in India, China and Brazil. These other short-term borrowings outstanding were $41.6 million and $11.5 million as of December 31, 2019 and 2018, respectively.

Long-Term Debt, including Current Maturities

On November 13, 2017, we issued new senior notes consisting of $550 million aggregate principal amount of 3.250% senior notes due 2022 and $700 million aggregate principal amount of 4.050% senior notes due 2027 (collectively, the “Senior Notes of 2017”). Proceeds from the Senior Notes of 2017 were used to fund the cash portion of the purchase price of the Acquisition paid at closing, transactions costs and expenses, and to fund a portion of the prepayment of the Term Loan Facility.

The Mosaic Credit Facility included the Term Loan Facility, under which we borrowed $720 million. The proceeds were used to prepay a prior term loan facility. In 2018, we prepaid the outstanding balance of $684 million under the Term Loan Facility without premium or penalty.

We have additional senior notes outstanding, consisting of (i) $900 million aggregate principal amount of 4.25% senior notes due 2023, $500 million aggregate principal amount of 5.45% senior notes due 2033 and $600 million aggregate principal amount of 5.625% senior notes due 2043 (collectively, the ~~related lease~~“Senior Notes of 2013”); and (ii) $450 million aggregate principal amount of 3.750% senior notes due 2021 and $300 million aggregate principal amount of 4.875% senior notes due 2041 (collectively, the “Senior Notes of 2011”).

The Senior Notes of 2011, the Senior Notes of 2013 and the Senior Notes of 2017 are Mosaic’s senior unsecured obligations and rank equally in right of payment with Mosaic’s existing and future senior unsecured indebtedness. The indenture governing these notes contains restrictive covenants limiting debt secured by liens, sale and leaseback transactions and mergers, consolidations and sales of substantially all assets, as well as other events of default.

Two debentures issued by Mosaic Global Holdings, Inc., one of our consolidated subsidiaries, the first due in 2018 (the “2018 Debentures”), was paid off on the maturity date of August 1, 2018, and the second due in 2028 (the “2028 Debentures”), remains outstanding with a balance of $147.1 million as of December 31, 2019. The indentures governing the 2028 Debentures also contain restrictive covenants limiting debt secured by liens, sale and leaseback transactions and mergers, consolidations and sales of substantially all assets, as well as events of default. The obligations under the 2028 Debentures are guaranteed by the Company and several of its subsidiaries.

Long-term debt primarily consists of unsecured notes, term ~~whichever is shorter.~~loans, finance leases, unsecured debentures and secured notes. Long-term debt as of December 31, 2019 and 2018, respectively, consisted of the following:



(in millions)	December 31, 2019 Stated Interest Rate	December 31, 2019 Effective Interest Rate	Maturity Date	December 31, 2019 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2019 Carrying Value		December 31, 2018 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2018 Carrying Value
Unsecured notes	3.25% - 5.63%	5.01%	2021- 2043	$	4,000.0	$	—	$	(6.3	)	$	3,993.7	$	4,000.0	$	—	$	(7.3	)	$	3,992.7
Unsecured debentures	7.30%	7.19%	2028	147.1		1.0		—			148.1		147.1		1.1		—			148.2
Term loan^(a)	Libor plus 1.25%	Variable	2021	—		—		—			—		—		—		—			—
Finance leases	2.32% - 19.72%	3.87%	2020- 2030	345.1		—		—			345.1		302.2		—		—			302.2
Other^(b)	2.50% - 9.98%	5.39%	2021- 2026	71.6		14.2		—			85.8		58.0		16.4		—			74.4
Total long-term debt				4,563.8		15.2		(6.3		)	4,572.7		4,507.3		17.5		(7.3		)	4,517.5
Less current portion				45.9		2.3		(1.0		)	47.2		24.7		2.3		(1.0		)	26.0
Total long-term debt, less current maturities				$	4,517.9	$	12.9	$	(5.3	)	$	4,525.5	$	4,482.6	$	15.2	$	(6.3	)	$	4,491.5


(a)	Term loan facility is pre-payable.


(b)	Includes deferred financing fees related to our long term debt.

Scheduled maturities of long-term debt are as follows for the periods ending December 31:



(in millions)
2020	$	47.2
2021	503.6
2022	596.3
2023	80.5
2024	1,070.8
Thereafter	2,274.3
Total	$	4,572.7

~~Structured Accounts Payable Arrangements~~Short-Term Debt

~~In Brazil, we finance some~~Short-term debt consists of the revolving credit facility under the Mosaic Credit Facility, under which there were no borrowings as of December 31, 2019, and various other short-term borrowings related to our related to our international operations in India, China and Brazil. These other short-term borrowings outstanding were $41.6 million and $11.5 million as of December 31, 2019 and 2018, respectively.

We had additional outstanding bilateral letters of credit of $54.5 million as of December 31, 2019, which includes $50.0 million as required by the 2015 Consent Decrees as described further in Note 15 of our ~~potash-based fertilizer, sulfur, ammonia and other raw material product purchases through third-party financing arrangements. These arrangements provide that the third-party intermediary advance the~~Consolidated Financial Statements.

Long-Term Debt, including Current Maturities

On November 13, 2017, we issued new senior notes consisting of $550 million aggregate principal amount of 3.250% senior notes due 2022 and $700 million aggregate principal amount of 4.050% senior notes due 2027 (collectively, the ~~scheduled payment~~“Senior Notes of 2017”). Proceeds from the Senior Notes of 2017 were used to fund the ~~vendor, less an appropriate discount,~~cash portion of the purchase price of the Acquisition paid at closing, transactions costs and expenses, and to fund a ~~scheduled payment date and~~portion of the prepayment of the Term Loan Facility.

The Mosaic ~~makes payment~~Credit Facility included the Term Loan Facility, under which we borrowed $720 million. The proceeds were used to prepay a prior term loan facility. In 2018, we prepaid the ~~third-party intermediary at a later date, stipulated in accordance with~~outstanding balance of $684 million under the ~~commercial terms negotiated. At December 31, 2018 and 2017, these structured accounts payable arrangements were $572.8 million and $386.2 million, respectively.~~Term Loan Facility without premium or penalty.

~~Contingencies~~

~~We are involved from time to time in claims and legal actions incidental to our operations, both as plaintiff and defendant.~~ We have ~~established what we currently believe to be adequate accruals for pending legal matters. These accruals are established as part~~additional senior notes outstanding, consisting of ~~an ongoing worldwide assessment~~(i) $900 million aggregate principal amount of ~~claims~~4.25% senior notes due 2023, $500 million aggregate principal amount of 5.45% senior notes due 2033 and ~~legal actions that takes into consideration such items as advice~~$600 million aggregate principal amount of ~~legal counsel, individual developments in court proceedings, changes in~~5.625% senior notes due 2043 (collectively, the ~~law, changes in business focus, changes in~~“Senior Notes of 2013”); and (ii) $450 million aggregate principal amount of 3.750% senior notes due 2021 and $300 million aggregate principal amount of 4.875% senior notes due 2041 (collectively, the ~~litigation environment, changes in opponent strategy and tactics, new developments as a result~~“Senior Notes of ~~ongoing discovery, and our experience in defending and settling similar claims.~~ 2011”).

The ~~litigation accruals at any time reflect updated assessments~~Senior Notes of 2011, the ~~then-existing claims and legal actions. The final outcome or potential settlement~~Senior Notes of ~~litigation matters could differ materially from the accruals which we have established. Legal costs are expensed as incurred.~~

~~Pension and Other Postretirement Benefits~~

~~We accrue the funded status of our plans, which is representative of our obligations under employee benefit plans~~2013 and the ~~related costs, net~~Senior Notes of ~~plan~~2017 are Mosaic’s senior unsecured obligations and rank equally in right of payment with Mosaic’s existing and future senior unsecured indebtedness. The indenture governing these notes contains restrictive covenants limiting debt secured by liens, sale and leaseback transactions and mergers, consolidations and sales of substantially all assets, ~~measured at fair value. The cost~~as well as other events of ~~pensions and other retirement benefits earned~~default.

Two debentures issued by employees is generally determined with the assistance of an actuary using the projected benefit method prorated on service and management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected healthcare costs.

~~Additional Accounting Policies~~

~~To facilitate a better understanding~~Mosaic Global Holdings, Inc., one of our consolidated ~~financial statements we have disclosed~~subsidiaries, the ~~following significant accounting policies (with~~first due in 2018 (the “2018 Debentures”), was paid off on the ~~exception~~maturity date of ~~those identified above) throughout the following notes, with the related financial disclosures by major caption:~~



~~Note~~	~~Topic~~	~~Page~~
7	~~Earnings per Share~~	~~F-53~~
9	~~Investments in Non-Consolidated Companies~~	~~F-54~~
10	~~Goodwill~~	~~F-55~~
12	~~Marketable Securities Held in Trusts~~	~~F-59~~
13	~~Income Taxes~~	~~F-61~~
14	~~Accounting for Asset Retirement Obligations~~	~~F-66~~
15	~~Accounting for Derivative and Hedging Activities~~	~~F-68~~
16	~~Fair Value Measurements~~	~~F-69~~
20	~~Share Based Payments~~	~~F-76~~

~~3. RECENTLY ISSUED ACCOUNTING GUIDANCE~~

~~Recently Adopted Accounting Pronouncements~~

On January 1, 2018, we adopted ASC Topic 606, “Revenue from Contracts with Customers” and related amendments (“new revenue standard”) using the modified retrospective method applied to those revenue contracts which were not completed as of January 1, 2018. See Note 4 of our Notes to Condensed Consolidated Financial Statements for additional information regarding the impacts of the new revenue standard.

~~In January 2016, the Financial Accounting Standards Board ("FASB") issued guidancewhichaddresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This guidance was effective for us beginning January~~August 1, 2018, and ~~did not have~~the second due in 2028 (the “2028 Debentures”), remains outstanding with a ~~material effect on our consolidated financial statements.~~

~~In December 2017, The U.S. Tax Cuts and Jobs Act (“The Act”) was enacted, significantly altering U.S. corporate income tax law. The FASB has issued guidance related to the newly enacted corporate income tax law changes enacted in December 2017. As~~balance of $147.1 million as of December 31, 2019. The indentures governing the 2028 Debentures also contain restrictive covenants limiting debt secured by liens, sale and leaseback transactions and mergers, consolidations and sales of substantially all assets, as well as events of default. The obligations under the 2028 Debentures are guaranteed by the Company and several of its subsidiaries.

Long-term debt primarily consists of unsecured notes, term loans, finance leases, unsecured debentures and secured notes. Long-term debt as of December 31, 2019 and 2018, ~~the impacts of The Act have been finalized. See Note 13 of our Notes to Consolidated Financial Statements for additional information regarding the impacts of The Act.~~

~~Pronouncements Issued But Not Yet Adopted~~

In February 2016, the FASB issued guidance which requires recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance, including subsequent amendments, is effective for us beginning January 1, 2019, with early adoption permitted. The provisions of this guidance are to be applied using a modified retrospective approach at either the adoption date or the beginningrespectively, consisted of the earliest comparative period presented in the financial statements. We will not early adopt this guidance, and have determined that we will utilize certain initial calculational guidance for existing leases provided in the standard for use in the modified retrospective approach. We will apply this guidance as of the adoption date, January 1, 2019. We have largely completed the process of gathering information about our lease arrangements, and evaluating provisions of our leases against the recognition requirements of the new guidance. Additionally, we are implementing an integrated lease information system solution and changes to internal procedures necessary to meet the requirements of the new guidance. Upon adoption of the guidance as of January 1, 2019, we expect to record a right-of-use asset and lease liability related to our operating leases of approximately $250.0 million. The accounting for our existing capital leases (now called finance leases) will remain largely unchanged. We continue to asses all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change.following:



(in millions)	December 31, 2019 Stated Interest Rate	December 31, 2019 Effective Interest Rate	Maturity Date	December 31, 2019 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2019 Carrying Value		December 31, 2018 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2018 Carrying Value
Unsecured notes	3.25% - 5.63%	5.01%	2021- 2043	$	4,000.0	$	—	$	(6.3	)	$	3,993.7	$	4,000.0	$	—	$	(7.3	)	$	3,992.7
Unsecured debentures	7.30%	7.19%	2028	147.1		1.0		—			148.1		147.1		1.1		—			148.2
Term loan^(a)	Libor plus 1.25%	Variable	2021	—		—		—			—		—		—		—			—
Finance leases	2.32% - 19.72%	3.87%	2020- 2030	345.1		—		—			345.1		302.2		—		—			302.2
Other^(b)	2.50% - 9.98%	5.39%	2021- 2026	71.6		14.2		—			85.8		58.0		16.4		—			74.4
Total long-term debt				4,563.8		15.2		(6.3		)	4,572.7		4,507.3		17.5		(7.3		)	4,517.5
Less current portion				45.9		2.3		(1.0		)	47.2		24.7		2.3		(1.0		)	26.0
Total long-term debt, less current maturities				$	4,517.9	$	12.9	$	(5.3	)	$	4,525.5	$	4,482.6	$	15.2	$	(6.3	)	$	4,491.5

~~4. REVENUE~~

~~Adoption of ASC Topic 606, “Revenue with Customers”~~

The comparative information for the years ended December 31, 2017 and 2016 has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the new standard has not had a significant impact on our results of operations on an ongoing basis. The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in millions):

Balance at Adjustments Balance at
December 31, 2017 upon adoption January 1, 2018
Balance Sheet
Receivables, net $ 642.6
$ 18.2
$ 660.8
Inventories 1,547.2
(13.3 ) 1,533.9
Deferred income tax asset 254.6
(1.3 ) 253.3
Accrued Liabilities 754.4
0.9
755.3
Retained earnings 10,631.1
2.7
10,633.8

~~Revenue Recognition~~

Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our goods. Our products are generally sold based on market prices prevailing at the time the sales contract is signed or through contracts which are priced at the time of shipment based on a formula. Sales incentives are estimated as earned by the customer and recorded as a reduction of revenue. Shipping and handling costs are included as a component of cost of goods sold.

~~For information regarding sales by product type and by geographic area, see Note 25 of our Notes to Consolidated Financial Statements.~~

Under the new revenue standard, the timing of revenue recognition is accelerated for certain sales arrangements due to the emphasis on transfer of control rather than risks and rewards. Certain sales where revenue was previously deferred until risk was fully assumed by the customer will now be recognized when the product is shipped. Additionally, the timing of when we record revenue on sales by Canpotex has been impacted by their adoption of new revenue standards. The total impact of adoption on our condensed consolidated statement of earnings and balance sheet was as follows (in millions):

For the year ended December 31, 2018
Elimination of Revenue Deferral Canpotex Impact (a) Balances Without New Revenue Standards
As Reported Impact
Income Statement
Net sales $ 9,587.3
$ (87.9 ) $ 96.4
$ 9,595.8
(8.5 )
Cost of goods sold 8,088.9
(64.3 ) 54.1
8,078.7
10.2
Provision for (benefit from) income taxes 77.1
(2.1 ) 5.8
80.8
(3.7 )
Net earnings (loss) attributable to Mosaic 470.0
(21.5 ) 36.5
485.0
(15.0 )

Balance Sheet
Receivables, net $ 838.5
$ (107.3 ) $ 96.4
$ 827.6
$ 10.9
Inventories 2,270.2
48.1
(42.8 ) 2,275.5
(5.3 )
Other current assets 280.6
23.5
—
304.1
(23.5 )
Deferred income tax asset 343.8
3.4
(5.8 ) 341.4
2.4
Accrued liabilities 1,092.5
(8.1 ) 11.4
1,095.8
(3.3 )
Retained earnings 11,064.7
(24.2 ) 36.4
11,076.9
(12.2 )


~~(a)~~	~~Includes impact from Canpotex's adoption of new revenue standards, resulting in a deferral of approximately 450,000 tonnes as of December 31, 2018.~~

~~Practical Expedients and Exemptions~~

~~We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.~~

~~We have elected to recognize the cost for freight and shipping as an expense in cost of sales, when control over the product has passed to the customer.~~

~~5. OTHER FINANCIAL STATEMENT DATA~~

~~The following provides additional information concerning selected balance sheet accounts:~~

December 31,
(in millions) 2018 2017
Receivables
Trade $ 703.7
$ 563.6
Non-trade 136.1
81.3
839.8
644.9
Less allowance for doubtful accounts 1.3
2.3
$ 838.5
$ 642.6
Inventories
Raw materials $ 147.5
$ 37.8
Work in process 625.5
349.9
Finished goods 1,343.8
1,035.1
Final price deferred ^(a)
39.3
38.6
Operating materials and supplies 114.1
85.8
$ 2,270.2
$ 1,547.2
Other current assets
Income and other taxes receivable $ 149.2
$ 141.3
Prepaid expenses 86.8
69.0
Other 44.6
62.9
$ 280.6
$ 273.2
Other assets
Restricted cash $ 15.8
$ 32.6
MRO inventory 134.6
114.8
Marketable securities held in trust - restricted 632.3
628.0
Indemnification asset 30.7
—
Long-term receivable 91.7
—
Other 352.7
492.1
$ 1,257.8
$ 1,267.5

December 31,
(in millions) 2018 2017
Accrued liabilities
Accrued dividends $ 11.8
$ 12.1
Payroll and employee benefits 217.5
159.5
Asset retirement obligations 136.3
98.1
Customer prepayments 199.8
140.4
Accrued income tax 65.5
1.4
Other 461.6
342.9
$ 1,092.5
$ 754.4
Other noncurrent liabilities
Asset retirement obligations $ 1,023.8
$ 761.2
Accrued pension and postretirement benefits 146.3
53.7
Unrecognized tax benefits 33.0
33.5
Other 255.6
119.4
$ 1,458.7
$ 967.8


(a)	~~Final price deferred~~Term loan facility is ~~product that has shipped to customers, but the price has not yet been agreed upon.~~

~~Interest expense, net was comprised of the following in 2018, 2017 and 2016:~~

Years Ended December 31,
(in millions) 2018 2017 2016
Interest income $ 49.7
$ 33.2
$ 28.2
Less interest expense 215.8
171.3
140.6
Interest expense, net $ (166.1 ) $ (138.1 ) $ (112.4 )

~~6. PROPERTY, PLANT AND EQUIPMENT~~

~~Property, plant and equipment consist of the following:~~

December 31,
(in millions) 2018 2017
Land $ 321.5
$ 245.9
Mineral properties and rights 4,478.2
3,540.4
Buildings and leasehold improvements 2,760.9
2,473.0
Machinery and equipment^(a)
8,955.7
7,933.5
Construction in-progress 2,164.7
1,793.0
18,681.0
15,985.8
Less: accumulated depreciation and depletion 6,934.5
6,274.1
$ 11,746.5
$ 9,711.7


~~(a)~~	~~Includes assets under capital leases of approximately $340.9 million and $345.0 million as of December 31, 2018 and 2017, respectively.~~

Depreciation and depletion expense was $878.2 million, $659.4 million and $703.8 million for 2018, 2017 and 2016, respectively. Capitalized interest on major construction projects was $22.1 million, $23.9 million and $38.5 million for 2018, 2017 and 2016.

~~7. EARNINGS PER SHARE~~

~~The following is a reconciliation of the numerator and denominator for the basic and diluted EPS computations:~~

Years Ended December 31,
(in millions) 2018 2017 2016
Net earnings (loss) attributable to Mosaic $ 470.0
$ (107.2 ) $ 297.8
Basic weighted average number of shares outstanding attributable to common stockholders 384.8
350.9
350.4
Dilutive impact of share-based awards 1.6
—
1.3
Diluted weighted average number of shares outstanding 386.4
350.9
351.7
Basic net earnings (loss) per share $ 1.22
$ (0.31 ) $ 0.85
Diluted net earnings (loss) per share $ 1.22
$ (0.31 ) $ 0.85

A total of 2.0 million shares for 2018, 3.5 million shares for 2017, and 3.0 million shares for 2016 of common stock subject to issuance upon exercise of stock options have been excluded from the calculation of diluted EPS because the effect would have been anti-dilutive.

~~8. CASH FLOW INFORMATION~~

~~Supplemental disclosures of cash paid for interest and income taxes and non-cash investing and financing information is as follows:~~

Years Ended December 31,
(in millions) 2018 2017 2016
Cash paid during the period for:
Interest $ 196.0
$ 178.9
$ 163.0
Less amount capitalized 22.1
23.9
38.5
Cash interest, net $ 173.9
$ 155.0
$ 124.5
Income taxes $ (34.2 ) $ (70.1 ) $ (65.4 )

Acquiring or constructing property, plant and equipment by incurring a liability does not result in a cash outflow for us until the liability is paid. In the period the liability is incurred, the change in operating accounts payable on the Consolidated Statements of Cash Flows is adjusted by such amount. In the period the liability is paid, the amount is reflected as a cash outflow from investing activities. The applicable net change in operating accounts payable that was classified to investing activities on the Consolidated Statements of Cash Flows was $(96.8) million, $11.1 million and $43.7 million for 2018, 2017, and 2016 respectively.

We accrued $11.8 million related to the dividends declared in 2018 that will be paid in 2019. At December 31, 2017 and 2016, we had accrued dividends of $12.1 million and $96.3 million which were paid in 2018 and 2017, respectively.

On October 24, 2017, a lease financing transaction was completed with respect to an articulated tug and barge unit that is being used to transport ammonia for our operations. As described in more detail in Note 23, we had provided bridge loans to a consolidated affiliate for construction of the unit, and that entity also received construction loans from a joint venture in which we hold a 50% interest. Following the application of proceeds from the transaction, all outstanding construction loans to the joint venture entity, together with accrued interest, were repaid.

We had non cash investing and financing transactions related to assets acquired under capital leases in 2017 of $267.9 million. Non cash investing and financing transactions related to assets acquired under capital leases were immaterial in 2018.

Depreciation, depletion and amortization includes $878.2 million, $659.4 million, and $703.8 million related to depreciation and depletion of property, plant and equipment, and $5.7 million, $6.1 million, and $7.4 million related to amortization of intangible assets for 2018, 2017, and 2016, respectively.

~~9. INVESTMENTS IN NON-CONSOLIDATED COMPANIES~~

We have investments in various international and domestic entities and ventures. The equity method of accounting is applied to such investments when the ownership structure prevents us from exercising a controlling influence over operating and financial policies of the businesses but still allow us to have significant influence. Under this method, our equity in the net earnings or losses of the investments is reflected as equity in net earnings of non-consolidated companies on our Consolidated Statements of Earnings. The effects of material intercompany transactions with these equity method investments are eliminated, including the gross profit on sales to and purchases from our equity-method investments which is deferred until the time of sale to the final third party customer. The cash flow presentation of dividends received from equity method investees is determined by evaluation of the facts, circumstances and nature of the distribution.

~~A summary of our equity-method investments, which were in operation as of December 31, 2018, is as follows:~~



~~Entity~~	~~Economic Interest~~
~~Gulf Sulphur Services LTD., LLLP~~	~~50.0~~	%
~~River Bend Ag, LLC~~	~~50.0~~	%
~~IFC S.A.~~	~~45.0~~	%
~~MWSPC~~	~~25.0~~	%
~~Canpotex~~	~~36.2~~	%

~~The summarized financial information shown below includes all non-consolidated companies carried on the equity method.~~

Years Ended December 31,
(in millions) 2018 2017 2016
Net sales $ 3,555.6
$ 2,871.2
$ 2,307.9
Net earnings (loss) (5.4 ) 95.3
11.9
Mosaic’s share of equity in net earnings (loss) (4.5 ) 16.7
(15.4 )
Total assets 9,042.9
8,623.6
8,665.4
Total liabilities 6,658.2
5,971.9
6,310.1
Mosaic’s share of equity in net assets 609.1
712.8
651.5

The difference between our share of equity in net assets as shown in the above table and the investment in non-consolidated companies as shown on the Consolidated Balance Sheets is mainly due to the July 1, 2016, equity contribution of $120 million we made to MWSPC, representing the remaining liability for our portion of mineral rights value transferred to MWSPC from Ma’aden. As of December 31, 2018, MWSPC represented 85% of the total assets and 80% of the total liabilities in the table above. MWSPC commenced ammonia operations in late 2016 and, on December 1, 2018, commenced commercial operations of its DAP plant, thereby bringing the entire project to the commercial production phase. We expect DAP production to gradually ramp-up until it reaches 3.0 million tonnes in annual production capacity which is expected in 2020. In 2018 our loss in net earnings was $9.5 million, compared to equity in net earnings of $32.0 million in 2017. MWSPC earnings for the period ended December 31, 2016 were immaterial.

MWSPC owns and operates a mine and two chemical complexes that produce phosphate fertilizers and other downstream phosphates products in the Kingdom of Saudi Arabia. We currently estimate that the cost to develop and construct the integrated phosphate production facilities (the “~~Project”) will approximate $8.0 billion when finished, which has been funded primarily through investments by us, Ma’aden and SABIC (together, the “Project Investors”), and through borrowing arrangements and other external project financing facilities (“Funding Facilities”). The production facilities are expected to~~

~~have a capacity of approximately 3.0 million tonnes of finished product per year when fully operational. We market approximately 25% of the production of the joint venture.~~

~~On June 30, 2014, MWSPC entered into Funding Facilities with a consortium of 20 financial institutions for a total amount of approximately $5.0 billion.~~

~~Also on June 30, 2014, in support of the Funding Facilities, we, together with Ma’aden and SABIC, agreed to provide our respective proportionate shares of the funding necessary for MWSPC by:~~


~~(a)~~	~~Contributing equity or making shareholder subordinated loans of up to $2.4 billion to fund project costs to complete and commission the Project (the “Equity Commitments”).~~ pre-payable.


(b)	~~Through the earlier of Project completion or June 30, 2020, contributing equity, making shareholder subordinated loans or providing bank subordinated loans,~~Includes deferred financing fees related to ~~fund cost overruns on the Project (the “Additional Cost Overrun Commitment”).~~

~~(c)~~

Through the earlier of Project completion or June 30, 2020, contributing equity, making shareholder loans or providing bank subordinated loans to fund scheduled debt service (excluding accelerated amounts) payable under the Funding Facilities and certain other amounts (such commitment, the “~~DSU Commitment” and such scheduled debt service and other amounts, “Scheduled Debt Service~~”). Our proportionate share of amounts covered by the DSU Commitment is not anticipated to exceed approximately $200 million. The fair value of the DSU Commitment at December 31, 2018 is not material.

~~(d)~~

~~In January 2016, MWSPC received approval from the Saudi Industrial Development Fund (“SIDF”) for loans in the total amount~~Scheduled maturities of ~~approximately $1.1 billion~~long-term debt are as follows for the ~~Project, subject to the finalization of definitive agreements. In 2017, MWSPC entered into definitive agreements with SIDF to draw up to $560 million from the total SIDF-approved amount (the “SIDF Loans~~”). In September of 2018, we received communication that SIDF agreed to waive Mosaic's Parent Guarantee. MWSPC received approval to access the remaining SIDF facility of $506 million which was subsequently drawn inperiods ending December ~~2018. Mosaic continues to have Equity Commitments, the Additional Cost Overrun Commitment and the DSU Commitment in relation to MWSPC project financing.~~31:



(in millions)
2020	$	47.2
2021	503.6
2022	596.3
2023	80.5
2024	1,070.8
Thereafter	2,274.3
Total	$	4,572.7

As of December 31, 2018, our cash investment was $770 million. We did not make any contributions in 2018 and do not expect future contributions will be needed even though we are contractually obligated to make future cash contributions of approximately $70 million.

~~10. GOODWILL~~

Goodwill is carried at cost, not amortized, and represents the excess of the purchase price and related costs over the fair value assigned to the net identifiable assets of a business acquired. We test goodwill for impairment on a quantitative basis at the reporting unit level on an annual basis or upon the occurrence of events that may indicate possible impairment. The test resulted in no impairment in the periods presented.

~~The changes in the carrying amount of goodwill, by reporting unit, as of December 31, 2018 and 2017, are as follows:~~

(in millions) Phosphates Potash Mosaic Fertilizantes Corporate, Eliminations and Other Total
Balance as of December 31, 2016 $ 492.4
$ 1,013.6
$ 124.9
$ —
$ 1,630.9
Foreign currency translation —
63.3
(0.6 ) —
62.7
Balance as of December 31, 2017 492.4
1,076.9
124.3
—
1,693.6
Foreign currency translation —
(76.5 ) (5.8 ) —
(82.3 )
Allocation of goodwill due to Realignment —
—
(12.1 ) 12.1
—
Goodwill acquired in the Vale acquisition 96.2
—
—
—
96.2
Balance as of December 31, 2018 $ 588.6
$ 1,000.4
$ 106.4
$ 12.1
$ 1,707.5

We elected early adoption of ASU 2017-04 effective January 1, 2017, “Intangibles─Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” As a result, we removed Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

In connection with the Realignment and the Acquisition we performed a review of goodwill in the quarter ended March 31, 2018, and no impairment was identified. Based on the proportionate share of business enterprise value (representative of the fair value) we assigned a portion of goodwill to Corporate and Other at that time.

As of October 31, 2018, we performed our annual quantitative assessment. In performing our assessment, we estimated the fair value of each of our reporting units using the income approach, also known as the discounted cash flow (“~~DCF~~”) method. The income approach utilized the present value of cash flows to estimate fair value. The future cash flows for our reporting units were projected based on our estimates, at that time, for revenue, operating income and other factors (such as working capital and capital expenditures for each reporting unit). To determine if the fair value of each of our reporting units with goodwill exceeded its carrying value, we assumed sales volume growth rates based on our long-term expectations, our internal selling prices and raw material prices for years one through five, which were anchored in projections from CRU International Limited, an independent third party data source. Selling prices and raw material prices for years six and beyond were based on anticipated market growth. The discount rates used in our DCF method were based on a weighted-average cost of capital (“~~WACC~~”), determined from relevant market comparisons. A terminal value growth rate of 2% was applied to the final year of the projected period and reflected our estimate of stable growth. We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Finally, we compared our estimates of fair values for our reporting units, to our October 31, 2017 total public market capitalization, based on our common stock price at that date.

Based on our quantitative evaluation at October 31, 2018, we determined that our Potash reporting unit had an estimated fair value that was not in significant excess of its carrying value. As a result, we concluded that the goodwill assigned to the Potash reporting unit was not impaired, but could be at risk of future impairment. We continue to believe that our long-term financial goals will be achieved. As a result of our analysis, we did not take a goodwill impairment charge.

~~The Phosphates, Mosaic Fertilizantes, and Corporate, Eliminations and Other reporting units were evaluated and not considered at risk of goodwill impairment at October 31, 2018.~~

Sensitivity Analysis - Percent of Fair Values in Excess of Carrying Values
Excess at Current WACC WACC Decreased by 50 Basis Points WACC Decreased by 25 Basis Points WACC Increased by 25 Basis Points WACC Increased by 50 Basis Points
Potash Reporting Unit 18.0% 24.5% 21.3% 14.7% 11.3%

~~As of December 31, 2018, $153.9 million of goodwill was tax deductible.~~

~~11. FINANCING ARRANGEMENTS~~

~~Mosaic Credit Facility~~

~~On November 18, 2016, we entered into a new unsecured five-year credit facility of up to $2.72 billion (the “Mosaic Credit Facility”), which includes a $2.0 billion revolving credit facility and a $720 million term loan facility (the “Term Loan Facility~~”). The Mosaic Credit Facility is intended to serve as our primary senior unsecured bank credit facility. It increased, extended and replaced our prior unsecured credit facility, which consisted of a revolving facility of up to $1.5 billion (the “~~Prior Credit Facility~~”). Letters of credit outstanding under the Prior Credit Facility in the amount of approximately $18.3 million became letters of credit under the Mosaic Credit Facility. The maturity date of the Mosaic Credit Facility, including final maturity of the term loan thereunder, is November 18, 2021. The Term Loan Facility is described below under “Long-Term Debt, including Current Maturities.”

As of December 31, 2018, we had outstanding letters of credit that utilized a portion of the amount available for revolving loans under the Mosaic Credit Facility of $14.3 million. At December 31, 2017, we had outstanding letters of credit of $15.4 million. The net available borrowings for revolving loans under the Mosaic Credit Facility as of December 31, 2018 and 2017 were approximately $1.99 billion and $1.98 billion, respectively. Unused commitment fees under the Mosaic Credit Facility and Prior Credit Facility accrued at an average annual rate of 0.20% for 2018, 0.16% for 2017, and 0.13% for 2016, generating expenses of $4.0 million, $3.3 million and $2.0 million, respectively.

Short-Term Debt

Short-term debt consists of the revolving credit facility under the Mosaic Credit Facility, under which there were no borrowings as of December 31, ~~2018,~~2019, and various other short-term borrowings related to our related to our international operations in India, China and ~~Brazil~~Brazil. These other short-term borrowings outstanding were ~~$11.5~~$41.6 million and ~~$6.1~~$11.5 million as of December 31, ~~2018~~2019 and ~~2017,~~2018, respectively.

We had additional outstanding bilateral letters of credit of ~~$54.4~~$54.5 million as of December 31, ~~2018,~~2019, which includes $50.0 million as required by the 2015 Consent Decrees as described further in Note 1415 of our Consolidated Financial Statements.

Long-Term Debt, including Current Maturities

Acquisition paid at closing, transactions costs and expenses, and to fund a portion of the prepayment of the Term Loan Facility.

We have additional senior notes outstanding, consisting of (i) $900 million aggregate principal amount of 4.25% senior notes due 2023, $500 million aggregate principal amount of 5.45% senior notes due 2033 and $600 million aggregate principal amount of 5.625% senior notes due 2043 (collectively, the “Senior Notes of 2013”); and (ii) $450 million aggregate principal amount of 3.750% senior notes due 2021 and $300 million aggregate principal amount of 4.875% senior notes due 2041 (collectively, the “Senior Notes of 2011”).

Two debentures issued by Mosaic Global Holdings, Inc., one of our consolidated subsidiaries, the first due in 2018 (the “2018 Debentures”), was paid off on the maturity date of August 1, 2018, and the second due in 2028 (the “2028 Debentures”), remains outstanding with a balance of $147.1 million as of December 31, ~~2018.~~2019. The indentures governing the 2028 Debentures also contain restrictive covenants limiting debt secured by liens, sale and leaseback transactions and mergers, consolidations and sales of substantially all assets, as well as events of default. The obligations under the 2028 Debentures are guaranteed by the Company and several of its subsidiaries.

Long-term debt primarily consists of unsecured notes, term loans, ~~capital~~finance leases, unsecured debentures and secured notes. Long-term debt as of December 31, ~~2018~~2019 and ~~2017,~~2018, respectively, consisted of the following:



(in millions)	December 31, 2019 Stated Interest Rate	December 31, 2019 Effective Interest Rate	Maturity Date	December 31, 2019 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2019 Carrying Value		December 31, 2018 Stated Value		Combination Fair Market Value Adjustment		Discount on Notes Issuance			December 31, 2018 Carrying Value
Unsecured notes	3.25% - 5.63%	5.01%	2021- 2043	$	4,000.0	$	—	$	(6.3	)	$	3,993.7	$	4,000.0	$	—	$	(7.3	)	$	3,992.7
Unsecured debentures	7.30%	7.19%	2028	147.1		1.0		—			148.1		147.1		1.1		—			148.2
Term loan^(a)	Libor plus 1.25%	Variable	2021	—		—		—			—		—		—		—			—
Finance leases	2.32% - 19.72%	3.87%	2020- 2030	345.1		—		—			345.1		302.2		—		—			302.2
Other^(b)	2.50% - 9.98%	5.39%	2021- 2026	71.6		14.2		—			85.8		58.0		16.4		—			74.4
Total long-term debt				4,563.8		15.2		(6.3		)	4,572.7		4,507.3		17.5		(7.3		)	4,517.5
Less current portion				45.9		2.3		(1.0		)	47.2		24.7		2.3		(1.0		)	26.0
Total long-term debt, less current maturities				$	4,517.9	$	12.9	$	(5.3	)	$	4,525.5	$	4,482.6	$	15.2	$	(6.3	)	$	4,491.5

(in millions) December 31, 2018
Stated Interest Rate December 31, 2018
Effective Interest Rate Maturity Date December 31, 2018
Stated Value
Combination Fair
Market
Value Adjustment
Discount on Notes Issuance December 31, 2018
Carrying Value December 31, 2017
Stated Value
Combination Fair
Market
Value Adjustment
Discount on Notes Issuance December 31, 2017
Carrying Value
Unsecured notes
3.25% -
5.63%
5.01%
2021-
2043
$ 4,000.0
$ —
$ (7.3 ) $ 3,992.7
$ 4,000.0
$ —
$ (8.5 ) $ 3,991.5
Unsecured debentures 7.30% 7.19% 2028 147.1
1.1
—
148.2
236.1
1.4
—
237.5
Term loan^(a)
Libor plus 1.25% Variable 2021 —
—
—
—
684.0
—
—
684.0
Capital leases 2.24% -
19.95% 4.00% 2019-
2030 302.2
—
—
302.2
326.6
—
—
326.6
Other^(b)

2.50% -
9.98%
7.98%
2021-
2026
58.0
16.4
—
74.4
(18.0 ) —
—
(18.0 )
Total long-term debt 4,507.3

17.5

(7.3 )
4,517.5

5,228.7

1.4

(8.5 )
5,221.6
Less current portion 24.7
2.3
(1.0 ) 26.0
344.2
0.4
(1.1 ) 343.5
Total long-term debt, less current maturities $ 4,482.6

$ 15.2

$ (6.3 )
$ 4,491.5

$ 4,884.5

$ 1.0

$ (7.4 )
$ 4,878.1


(a)	Term loan facility is pre-payable.


(b)	Includes deferred financing fees related to our long term debt.

Scheduled maturities of long-term debt are as follows for the periods ending December 31:



(in millions)
2020	$	47.2
2021	503.6
2022	596.3
2023	80.5
2024	1,070.8
Thereafter	2,274.3
Total	$	4,572.7

Structured Accounts Payable Arrangements

In Brazil, we finance some of our potash-based fertilizer, sulfur, ammonia and other raw material product purchases through third-party financing arrangements. These arrangements provide that the third-party intermediary advance the amount of the scheduled payment to the vendor, less an appropriate discount, at a scheduled payment date and Mosaic makes payment to the third-party intermediary at a later date, stipulated in accordance with the commercial terms negotiated. At December 31, 2019 and 2018, these structured accounts payable arrangements were $740.6 million and $572.8 million, respectively.

(in millions)
2019 $ 26.0
2020 39.2
2021 485.8
2022 580.4
2023 962.8
Thereafter 2,423.3
Total $ 4,517.5
Inventory Financing Arrangement

In January 2020, we entered into an inventory financing arrangement to sell up to $400 million of certain inventory for cash and subsequently repurchase the inventory at an agreed upon price and time in the future, not to exceed 180 days. As of February 20, 2020, we had sold $50.3 million of inventory under this financing arrangement.

~~12.~~13. MARKETABLE SECURITIES HELD IN TRUSTS

In August 2016, Mosaic deposited $630 million into two trust funds (together, the “RCRATrusts”) created to provide additional financial assurance in the form of cash for the estimated costs (“Gypstack Closure Costs”) of closure and long-term care of our Florida and Louisiana phosphogypsum management systems (“Gypstacks”), as described further in Note 1415 of our Notes to Consolidated Financial Statements. Our actual Gypstack Closure Costs are generally expected to be paid by us in the normal course of our Phosphate business; however, funds held in each of the RCRA Trusts can be drawn by the applicable governmental authority in the event we cannot perform our closure and long term care obligations. When our estimated Gypstack Closure Costs with respect to the facilities associated with a RCRA Trust are sufficiently lower than the

amount on deposit in that RCRA Trust, we have the right to request that the excess funds be released to us. The same is true for the RCRA Trust balance remaining after the completion of our obligations, which will be performed over a period that may not end until ~~three~~3 decades or more after a Gypstack has been closed. The investments held by the RCRA Trusts are managed by independent investment managers with discretion to buy, sell, and invest pursuant to the objectives and standards set forth in the related trust agreements. Amounts reserved to be held or held in the RCRA Trusts (including losses or reinvested earnings) are included in other assets on our Condensed Consolidated Balance Sheets.

The RCRA Trusts hold investments, which are restricted from our general use, in marketable debt securities classified as available-for-sale and are carried at fair value. As a result, unrealized gains and losses are included in other comprehensive income until realized, unless it is determined that the carrying value of an investment is impaired on an other-than-temporary basis. There were no0 other-than-temporary impairment write-downs on available-for-sale securities during the year ended December 31, ~~2018.~~2019.

We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. We determine the fair market values of our available-for-sale securities and certain other assets based on the fair value hierarchy described below:

Level 1: Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Values based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3: Values generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

The estimated fair value of the investments in the RCRA Trusts is as of December 31, ~~2018~~2019 and December 31, ~~2017~~2018 are as follows:



	December 31, 2019
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Level 1
Cash and cash equivalents	$	3.4	$	—	$	—		$	3.4
Level 2
Corporate debt securities	194.2		5.8		(0.1		)	199.9
Municipal bonds	188.3		4.4		(0.4		)	192.3
U.S. government bonds	280.6		3.2		(2.5		)	281.3
Total	$	666.5	$	13.4	$	(3.0	)	$	676.9

	December 31, 2018
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Level 1
Cash and cash equivalents	$	4.0	$	—	$	—		$	4.0
Level 2
Corporate debt securities	180.8		0.3		(4.3		)	176.8
Municipal bonds	186.1		0.5		(3.4		)	183.2
U.S. government bonds	262.1		3.3		—			265.4
Total	$	633.0	$	4.1	$	(7.7	)	$	629.4

December 31, 2018

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value
Level 1
    Cash and cash equivalents $ 4.0
$ —
$ —
$ 4.0
Level 2
    Corporate debt securities 180.8
0.3
(4.3 ) 176.8
    Municipal bonds 186.1
0.5
(3.4 ) 183.2
    U.S. government bonds 262.1
3.3
—
265.4
Total $ 633.0
$ 4.1
$ (7.7 ) $ 629.4

December 31, 2017

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value
Level 1
    Cash and cash equivalents $ 1.2
$ —
$ —
$ 1.2
Level 2
    Corporate debt securities 186.1
0.4
(2.2 ) 184.3
    Municipal bonds 184.5
0.5
(2.7 ) 182.3
    U.S. government bonds 261.7
—
(4.4 ) 257.3
Total $ 633.5
$ 0.9
$ (9.3 ) $ 625.1

The following tables show gross unrealized losses and fair values of the RCRA Trusts’ available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary as of December 31, ~~2018~~2019 and December 31, ~~2017.~~2018.



	December 31, 2019					December 31, 2018
Securities that have been in a continuous loss position for less than 12 months (in millions):	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate debt securities	$	17.9	$	—		$	43.9	$	(0.6	)
Municipal bonds	11.7		(0.1		)	12.3		—
U.S. government bonds	195.4		(2.5		)	—		—
Total	$	225.0	$	(2.6	)	$	56.2	$	(0.6	)

	December 31, 2019					December 31, 2018
Securities that have been in a continuous loss position for more than 12 months (in millions):	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate debt securities	$	20.7	$	(0.1	)	$	103.4	$	(3.7	)
Municipal bonds	14.7		(0.3		)	117.5		(3.4		)
Total	$	35.4	$	(0.4	)	$	220.9	$	(7.1	)

December 31, 2018 December 31, 2017
Less than 12 months Less than 12 months

Fair
Value

Gross
Unrealized
Losses^(a)

Fair
Value

Gross
Unrealized
Losses^(a)
Corporate debt securities $ 43.9
$ (0.6 ) $ 44.3
$ (0.3 )
Municipal bonds 12.3
—
64.5
(0.5 )
U.S. government bonds —
—
255.0
(4.4 )
Total $ 56.2
$ (0.6 ) $ 363.8
$ (5.2 )

December 31, 2018 December 31, 2017
Greater than 12 months Greater than 12 months

Fair
Value

Gross
Unrealized
Losses^(a)

Fair
Value

Gross
Unrealized
Losses^(a)
Corporate debt securities $ 103.4
$ (3.7 ) $ 100.4
$ (1.9 )
Municipal bonds 117.5
(3.4 ) 83.3
(2.2 )
U.S. government bonds —
—
—
—
Total $ 220.9
$ (7.1 ) $ 183.7
$ (4.1 )


~~(a)~~	~~Represents the aggregate of the gross unrealized losses that have been in a continuous unrealized loss position as of December 31, 2018 and December 31, 2017.~~

The following table summarizes the balance by contractual maturity of the available-for-sale debt securities invested by the RCRA Trusts as of December 31, ~~2018.~~2019. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations before the underlying contracts mature.


	December 31, 2018
(in millions)			December 31, 2019
Due in one year or less	$	37.3	$	28.8
Due after one year through five years	148.8		423.6
Due after five years through ten years	407.0		184.4
Due after ten years	32.3		36.7
Total debt securities	$	625.4	$	673.5

For the ~~twelve months~~year ended December 31, 2019, realized gains and (losses) were $17.0 million and $(1.8) million, respectively. For the year ended December 31, 2018, realized gains and (losses), were ~~$0.3~~$0.3 million and $(13.5) million, respectively. ~~For the twelve months ended December 31, 2017, realized gains and (losses) were $4.7 million and $(3.5) million, respectively.~~

~~13.~~14. INCOME TAXES

In preparing our Consolidated Financial Statements, we utilize the asset and liability approach in accounting for income taxes. We recognize income taxes in each of the jurisdictions in which we have a presence. For each jurisdiction, we estimate the actual amount of income taxes currently payable or receivable, as well as deferred income tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The provision for income taxes for 2019, 2018 ~~2017~~ and ~~2016,~~2017, consisted of the following:



	Years Ended December 31,
(in millions)	2019			2018			2017
Current:
Federal	$	(75.5	)	$	24.5		$	(167.6	)
State	(5.2		)	1.8			14.9
Non-U.S.	119.1			147.2			31.0
Total current	38.4			173.5			(121.7		)
Deferred:
Federal	(194.8		)	(105.1		)	602.3
State	(6.7		)	9.9			(39.9		)
Non-U.S.	(61.6		)	(1.2		)	54.2
Total deferred	(263.1		)	(96.4		)	616.6
(Benefit from) provision for income taxes	$	(224.7	)	$	77.1		$	494.9

Years Ended December 31,
(in millions) 2018 2017 2016
Current:
Federal $ 24.5
$ (167.6 ) $ (41.7 )
State 1.8
14.9
(15.9 )
Non-U.S. 147.2
31.0
94.9
Total current 173.5
(121.7 ) 37.3
Deferred:
Federal (105.1 ) 602.3
(147.9 )
State 9.9
(39.9 ) 3.9
Non-U.S. (1.2 ) 54.2
32.5
Total deferred (96.4 ) 616.6
(111.5 )
(Benefit from) provision for income taxes $ 77.1
$ 494.9
$ (74.2 )

The components of earnings from consolidated companies before income taxes, and the effects of significant adjustments to tax computed at the federal statutory rate, were as follows:



	Years Ended December 31,
(in millions)	2019			2018			2017
United States earnings (loss)	$	(1,096.2	)	$	322.7		$	(82.5	)
Non-U.S. earnings	(159.9		)	228.8			456.5
(Loss) earnings from consolidated companies before income taxes	$	(1,256.1	)	$	551.5		$	374.0
Computed tax at the U.S. federal statutory rate	21.0		%	21.0		%	35.0		%
State and local income taxes, net of federal income tax benefit	2.6		%	2.0		%	(0.1		)%
Percentage depletion in excess of basis	2.5		%	(6.7		)%	(13.2		)%
Impact of non-U.S. earnings	5.3		%	11.8		%	(46.9		)%
Change in valuation allowance	(3.1		)%	(15.2		)%	148.8		%
Phosphates goodwill impairment	(5.0		)%	—		%	—		%
Share-based excess cost/(benefits)	—		%	0.7		%	2.0		%
Other items (none in excess of 5% of computed tax)	(5.4		)%	0.4		%	6.7		%
Effective tax rate	17.9		%	14.0		%	132.3		%

2019 Effective Tax Rate

Years Ended December 31,
(in millions) 2018 2017 2016
United States earnings (loss) $ 322.7
$ (82.5 ) $ (96.4 )
Non-U.S. earnings 228.8
456.5
338.8
Earnings from consolidated companies before income taxes $ 551.5
$ 374.0
$ 242.4
Computed tax at the U.S. federal statutory rate 21.0 % 35.0 % 35.0 %
State and local income taxes, net of federal income tax benefit 2.0 % (0.1 )% (6.1 )%
Percentage depletion in excess of basis (6.7 )% (13.2 )% (34.4 )%
Impact of non-U.S. earnings 11.8 % (46.9 )% (4.0 )%
Change in valuation allowance (15.2 )% 148.8 % 7.7 %
Resolution of uncertain tax positions (0.4 )% — % (34.9 )%
Share-based excess cost/(benefits) 0.7 % 2.0 % 2.2 %
Other items (none in excess of 5% of computed tax) 0.8 % 6.7 % 3.9 %
Effective tax rate 14.0 % 132.3 % (30.6 )%
In the year ended December 31, 2019, there were two items impacting the effective tax rate; 1) items attributable to ordinary business operations during the year, and 2) other items specific to the period, including impacts recorded due to the U.S. Tax Cuts and Jobs Act (the “Act”).

The tax impact of our ordinary business operations is impacted by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.

Tax expense specific to the period included a benefit of ($355.6) million. The benefit relates to various notable items, which resulted in the following tax benefits: ($263.4) million related to the indefinite idling of the Colonsay mine, ($81.0) million related to the Plant City closure costs, and ($79.6) million related to the phosphates goodwill impairment. These tax benefits are partially offset by tax expense of: $21.2 million for changes in certain provisions of the Act, $15.9 million for valuation allowances in the U.S. and foreign jurisdictions, $14.0 million related to state tax rate changes, $12.5 million related to changes in estimates related to prior years (including changes in certain provisions of the Act), and miscellaneous tax expense of $4.8 million. The tax expense of $21.2 million related to certain provisions of the Act and is the reversal of the benefit recorded in December 31, 2018 that pertained to the one-time “deemed” repatriation.

2018 Effective Tax Rate

In the year ended December 31, 2018, there were three types of items impacting the effective tax rate; 1) items attributable to ordinary business operations during the year, 2) other items specific to the period, and 3) impacts recorded due to the ~~U.S. Tax Cuts and Jobs Act (“The Act”).~~Act.

Tax expense specific to the period included a cost of $0.7 million. This relates to various items including: a benefit of ($30.6) million related to revised valuation allowances on foreign tax credits, a $12.2 million cost as a result of revisions to the provisional estimates related to ~~The~~the Act, a $15.0 million cost for withholding taxes related to undistributed earnings, a cost of $11.7 million for valuation allowances in foreign jurisdictions, a benefit of ($8.6) million related to release of the sequestration on future AMT refunds, and other miscellaneous ~~benefits~~costs of $1.0 million.

Impacts of the Tax Cuts and Jobs Act

On December 22, 2017, The Act was enacted, significantly altering U.S. corporate income tax law. The SEC issued Staff Accounting Bulletin 118, which allows companies to record reasonable estimates of enactment impacts where the underlying analysis and calculations are not yet complete (“Provisional Estimates”). The Provisional Estimates ~~must~~were required to be finalized within a one-year measurement period. In the period ending December 31, 2017, we recorded Provisional Estimates of the impact of ~~The~~the Act of $457.5 million related to several key changes in the law. As of December 31, ~~2018,~~2019, the impacts of ~~The~~the Act have been finalized. All future impacts of future issued guidance will be appropriately accounted for in the period in which the law is enacted.

The Act imposed a one-time tax on “deemed” repatriation of foreign subsidiaries’ earnings and profits. The repatriation resulted in an estimated non-cash charge of $107.7 million. The charge was offset by a $202.6 million, non-cash reduction in the deferred tax liability related to certain undistributed earnings. Both of these items were recorded in the period ending December 31, 2017. The December 31, 2017 provisional estimates have been revised and finalized in the period ending December 31, 2018, resulting in an additional benefit of $9.0 million of which a cost of $12.2 million is included in the tax expense specific to the period and a benefit of $21.2 million is included in the annual effective tax rate. However, the benefit of $21.2 million ~~results~~resulted from certain provisions of ~~The~~the Act that pertain to the repatriation that, based on proposed guidance from the U.S. Internal Revenue Service, we ~~anticipate~~anticipated could reverse when the regulations ~~are~~were finalized.

As discussed above, the regulations were finalized in 2019 and the benefit was reversed.

As of December 31, 2017, we recognized a $2.3 million non-cash, deferred tax benefit related to the reduction of the U.S. federal rate from 35 percent to 21 percent.

The Act significantly modified the U.S. taxation of foreign earnings and the treatment of the related foreign tax credits. In December 2017, as a result of these changes, we recorded valuation allowances against our foreign tax credits and our anticipatory foreign tax credits of $105.8 million and $440.3 million, respectively. As of December 2018, we concluded that the foreign tax credits would more likely than not be utilized and the related valuation allowance of $105.8 million was reversed as a benefit. This benefit arose due to both revisions in the estimated impact of ~~The~~the Act and estimates with respect to future forecasted income. Of the $105.8 million benefit, $30.6 million was recorded as tax benefit specific to the period.

As of December 31, 2018, we ~~have~~ recorded a valuation allowance ~~recorded~~ against U.S. branch basket foreign tax credits of $156.8 million and anticipatory foreign tax credits of $361.6 million.

The Act repeals the corporate alternative minimum tax, or AMT, system and allows for the cash refund of excess AMT credits. As of December 31, 2017, the refundable AMT amounts were subject to a set of federal budgeting rules where a certain portion of the refundable amount would permanently be disallowed (the “Sequestration Rules”). We estimated that we would receive a cash refund of $121.5 million net of an $8.6 million charge related to the Sequestration Rules. In 2018, guidance was released that concluded that the Sequestration Rules do not apply to AMT credits related to ~~The~~the Act. As of December 31, 2018, we ~~estimate~~estimated that we will receive a cash refund of $100.4 million and the sequestration charge of $8.6 million recorded at December 31, 2017 ~~has been~~was reversed. The estimated refundable alternative minimum tax credit was included in other non-current assets at both December 31, 2018 and December 31, 2017.

The Act introduced a new category of taxable income called global intangible low-taxed income (“GILTI”). No provisional estimates were recorded as of December 31, 2017 for the impacts of GILTI since we had not completed our full analysis of that provision of ~~The~~the Act. We have included GILTI in our December 31, 2018 provision for income taxes, which did not have a material impact to the Company for the current year. We have elected an accounting policy to record any GILTI liabilities as period costs.

2017 Effective Tax Rate

In the year ended December 31, 2017, there were three types of items impacting the effective tax rate; 1) items attributable to ordinary business operations during the year, 2) other items specific to the period, and 3) impacts recorded due to the enactment of the U.S. Tax Cuts and Jobs Act.

The tax impact of our ordinary business operations is impacted by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.

Tax expense specific to the period included a cost of $15.1 million related to a $10.4 million pre-tax charge resulting from the resolution of a royalty matter with the government of Saskatchewan and related royalty impacts, a $7.5 million cost related to share-based compensation, and an expense of $6.7 million related to the effect on deferred income tax liabilities of an increase in the statutory tax rate for one of our equity method investments, offset by a ~~$14.9~~$(14.9) million U.S. state deferred benefit and other miscellaneous benefits of ~~$6.1~~$(6.1) million.

~~2016 Effective Tax Rate~~

In the year ended December 31, 2016, tax expense specific to the period included a benefit of $54.2 million, which includes a domestic benefit of $85.8 million related to the resolution of an Advanced Pricing Agreement, which is a tax treaty-based process, partially offset by a $23.3 million expense related to distributions from certain non-U.S. subsidiaries and $8.3 million of expense primarily related to share-based excess cost.

During 2016, our income tax rate was favorably impacted by the mix of earnings across the jurisdictions in which we operate and by a benefit associated with depletion when compared to the year ended December 31, 2015. Our income tax rate is lower in 2016 compared to 2015 because our deductions are relatively fixed in dollars, while our profitability has been reduced; therefore, the deductions are a larger percentage of income.

Significant components of our deferred tax liabilities and assets as of December 31 were as follows:



	December 31,
(in millions)	2019			2018
Deferred tax liabilities:
Depreciation and amortization	$	70.7		$	317.3
Depletion	530.7			390.8
Partnership tax basis differences	69.8			64.6
Undistributed earnings of non-U.S. subsidiaries	3.8			15.0
Other liabilities	19.0			10.3
Total deferred tax liabilities	$	694.0		$	798.0
Deferred tax assets:
Alternative minimum tax credit carryforwards	$	—		$	76.5
Capital loss carryforwards	—			3.0
Foreign tax credit carryforwards	522.5			493.5
Net operating loss carryforwards	420.0			408.9
Pension plans and other benefits	43.8			33.4
Asset retirement obligations	232.1			187.6
Disallowed interest expense under §163(j)	58.1			—
Other assets	349.3			388.8
Subtotal	1,625.8			1,591.7
Valuation allowance	1,457.1			1,530.5
Net deferred tax assets	168.7			61.2
Net deferred tax liabilities	$	(525.3	)	$	(736.8	)

December 31,
(in millions) 2018 2017
Deferred tax liabilities:
Depreciation and amortization $ 317.3
$ 864.2
Depletion 390.8
260.9
Partnership tax basis differences 64.6
67.6
Undistributed earnings of non-U.S. subsidiaries 15.0
15.0
Other liabilities 10.3
150.6
Total deferred tax liabilities $ 798.0
$ 1,358.3
Deferred tax assets:
Alternative minimum tax credit carryforwards $ 76.5
$ 46.8
Capital loss carryforwards 3.0
0.1
Foreign tax credit carryforwards 493.5
322.9
Net operating loss carryforwards 408.9
112.0
Pension plans and other benefits 33.4
2.1
Asset retirement obligations 187.6
174.1
Deferred revenue —
252.0
Other assets 388.8
169.7
Subtotal 1,591.7
1,079.7
Valuation allowance 1,530.5
584.1
Net deferred tax assets 61.2
495.6
Net deferred tax liabilities $ (736.8 ) $ (862.7 )

We have certain non-U.S. entities that are taxed in both their local ~~currency~~ jurisdiction and the U.S. As a result, we have deferred tax balances for both jurisdictions. As of December 31, ~~2018~~2019 and ~~2017,~~2018, these non-U.S. deferred taxes are offset by approximately ~~$361.6~~$224.6 million and ~~$440.3~~$361.6 million, respectively, of anticipated foreign tax credits included within our depreciation and depletion components of deferred tax liabilities above. Due to ~~The~~the Act, we have recorded a valuation allowance against the anticipated foreign tax credits of ~~$361.6~~$224.6 million and ~~$440.3~~$361.6 million for December 31, 2019 and 2018, ~~and 2017,~~ respectively.

As of December 31, ~~2018,~~2019, we had estimated carryforwards for tax purposes as follows: alternative minimum tax credits of ~~$76.5~~$85.5 million ~~plus an additional $100.4 million of alternative minimum tax credits~~ that we estimate will be refundable due to ~~The~~the Act, net operating losses of ~~$1,892.5 million,~~$1.93 billion, foreign tax credits of ~~$493.5~~$522.5 million and ~~$2.2~~$1.6 million of non-U.S. business credits. These carryforward benefits may be subject to limitations imposed by the Internal Revenue Code, and in certain cases, provisions of foreign law. As discussed above, we estimate that $100.4 million of the alternative minimum tax credit carryforwards will be refunded while the remaining $76.5 million are expected to be utilized to offset future U.S. federal tax liabilities. Approximately ~~$869.5~~$832 million of our net operating loss carryforwards relate to Brazil and can be carried forward indefinitely but are limited to 30 percent of taxable income each year. The majority of the remaining net operating loss carryforwards relate to U.S. federal and certain U.S. states and can be carried forward for 20 years. Of the ~~$493.5~~$522.5 million of foreign tax credits, approximately ~~$39.3~~$36.5 million have an expiration date of 2023, approximately ~~$232.6~~$235.4 million have an expiration date of 2026, ~~and~~ approximately ~~$221.6~~$150.3 million have an expiration date of ~~2028.~~2028, and approximately $100.2 million have an expiration date of 2029. The realization of our foreign tax credit carryforwards is dependent on market conditions, tax law changes, and other business outcomes including our ability to generate certain types of taxable income. As a result of changes in U.S. tax law due to ~~The~~the Act, the Company ~~recorded~~ valuation allowances recorded against its branch basket foreign tax credits ~~of $156.8~~was $238.3 million at December 31, ~~2018.~~2019.

The Act imposed a one-time tax on the “deemed” repatriation of foreign subsidiaries’ earnings and profits and establishes an exemption from U.S. tax for future dividends from foreign subsidiaries. As such, we are only subject to withholding tax on the actual repatriation of non-U.S. earnings. As of December 31, ~~2018, the company has recorded~~2019, we have not recognized a ~~$15 million~~ deferred tax liability ~~associated with~~for un-remitted earnings of approximately $886.7 million from certain foreign operations because we believe our subsidiaries have invested the ~~future repatriation of $300 million of~~ undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction. It is not practicable for us to determine the amount of ~~non-U.S. subsidiaries.~~unrecognized deferred tax liability on these reinvested earnings. As part of the accounting for the Act, we recorded local country withholding taxes related to certain entities from which we began repatriating undistributed earnings and will continue to record local country withholding taxes, including foreign exchange impacts, on all future earnings.

Valuation Allowance

In assessing the need for a valuation allowance, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding our forecasted taxable income using both historical and projected future operating results, the reversal of existing taxable temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The ultimate realization of deferred tax assets is dependent upon the generation of certain types of future taxable income during the periods in which those temporary differences become deductible. In making this assessment, we consider the scheduled reversal of deferred tax liabilities, our ability to carry back the deferred tax asset, projected future taxable income, and tax planning strategies. A valuation allowance will be recorded in each jurisdiction in which a deferred income tax asset is recorded when it is more likely than not that the deferred income tax asset will not be realized. Changes in deferred tax asset valuation allowances typically impact income tax expense.

For the year ended December 31, 2019, the valuation allowance decreased by $73.4 million, of which a $48.0 million decrease related to changes in valuation allowances and currency translation in Brazil, and a $49.8 million decrease related to U.S. branch foreign tax credits. These decreases to the valuation allowance were offset by the following increases: $6.8 million related to net operating losses for certain U.S. states, $8.3 million related to net operating losses in Peru, and $9.2 million related to our conclusion that we are not more likely than not to use attributes at other foreign jurisdictions.

For the year ended December 31, 2018, the valuation allowance increased by $945.8 million, of which $956.2 million related to valuation allowances on the Vale acquisition and $30.7 million related to changes in the U.S. tax law imposed by ~~The~~the Act. The remaining amount relates to our conclusion that we are not more likely than not to use attributes at other foreign jurisdictions.

For the year ended year ended December 31, 2017, the valuation allowance increased by $553.5 million, of which $546.1 million related to changes in the U.S. tax law imposed by ~~The~~the Act and the remaining amount is due to our conclusion that we are not more likely than not to use attributes at a Netherlands subsidiary.

For the year ended year ended December 31, 2016, the valuation allowance increased by $18.7 million primarily due to our conclusion that we are not more likely than not to use attributes at a Netherlands subsidiary and certain U.S. states.

Uncertain Tax Positions

Accounting for uncertain income tax positions is determined by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. This minimum threshold is that a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than a fifty percent likelihood of being realized upon ultimate settlement.

As of December 31, ~~2018,~~2019, we had ~~$38.1~~$39.5 million of gross uncertain tax positions. If recognized, the benefit to our effective tax rate in future periods would be approximately ~~$20.5~~$23.3 million of that amount. During ~~2018,~~2019, we recorded gross increases in our uncertain tax positions of ~~$1.2~~$1.4 million related to certain U.S. and non-U.S. tax matters, of which ~~$0.7~~$2.8 million impacted the effective tax rate. This increase was offset by items not included in gross uncertain tax positions.

Based upon the information available as of December 31, ~~2018,~~2019, it is reasonably possible that the amount of unrecognized tax benefits will change in the next twelve months; however, the change cannot reasonably be estimated.

A summary of gross unrecognized tax benefit activity is as follows:



	Years Ended December 31,
(in millions)	2019			2018			2017
Gross unrecognized tax benefits, beginning of period	$	38.1		$	39.3		$	27.1
Gross increases:
Prior period tax positions	—			0.3			1.9
Current period tax positions	5.1			3.8			8.5
Gross decreases:
Prior period tax positions	(4.9		)	(2.9		)	—
Currency translation	1.2			(2.4		)	1.8
Gross unrecognized tax benefits, end of period	$	39.5		$	38.1		$	39.3

Years Ended December 31,
(in millions) 2018 2017 2016
Gross unrecognized tax benefits, beginning of period $ 39.3
$ 27.1
$ 98.6
Gross increases:
Prior period tax positions 0.3
1.9
13.5
Current period tax positions 3.8
8.5
6.9
Gross decreases:
Prior period tax positions (2.9 ) —
(91.6 )
Currency translation (2.4 ) 1.8
(0.3 )
Gross unrecognized tax benefits, end of period $ 38.1
$ 39.3
$ 27.1

We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense. Interest and penalties accrued in our Consolidated Balance Sheets as of December 31, 2019 and 2018 ~~and 2017 are $4.9~~were $7.4 million and ~~$4.1~~$4.9 million, respectively, and are included in other noncurrent liabilities in the Consolidated Balance Sheets.

Open Tax Periods

We operate in multiple tax jurisdictions, both within the United States and outside the United States, and face audits from various tax authorities regarding transfer pricing, deductibility of certain expenses, and intercompany transactions, as well as other matters. With few exceptions, we are no longer subject to examination for tax years prior to 2012.

Mosaic is continually under audit by various tax authorities in the normal course of business. Such tax authorities may raise issues contrary to positions taken by the Company. If such positions are ultimately not sustained by the Company this could result in material assessments to the Company. The costs related to defending, if needed, such positions on appeal or in court may be material. The Company believes that any issues considered are properly accounted for.

We are currently under audit by the Canada Revenue Agency for the tax years ended May 31, 2012 through December 31, ~~2014 and 2015.~~2017. Based on the information available, we do not anticipate significant changes to our unrecognized tax benefits as a result of these examinations other than the amounts discussed above.

~~14. ACCOUNTING FOR~~15. ASSET RETIREMENT OBLIGATIONS

We recognize our estimated asset retirement obligations (“AROs”) in the period in which we have an existing legal obligation associated with the retirement of a tangible long-lived asset and the amount of the liability can be reasonably estimated. The ARO is recognized at fair value when the liability is incurred with a corresponding increase in the carrying amount of the related long lived asset. We depreciate the tangible asset over its estimated useful life. The liability is adjusted in subsequent periods through accretion expense which represents the increase in the present value of the liability due to the passage of time. Such depreciation and accretion expenses are included in cost of goods sold for operating facilities and other operating expense for indefinitely closed facilities.

Our legal obligations related to asset retirement require us to: (i) reclaim lands disturbed by mining as a condition to receive permits to mine phosphate ore reserves; (ii) treat low pH process water in Gypstacks to neutralize acidity; (iii) close and monitor Gypstacks at our Florida and Louisiana facilities at the end of their useful lives; (iv) remediate certain other conditional obligations; (v) remove all surface structures and equipment, plug and abandon mine shafts, contour and revegetate, as necessary, and monitor for five years after closing our Carlsbad, New Mexico ~~facility and~~facility; (vi) decommission facilities, manage tailings and execute site reclamation at our Saskatchewan potash mines at the end of their useful lives; (vii)

de-commission mines in Brazil and Peru acquired as part of the Acquisition and (viii) de-commission plant sites and close Gypstacks in Brazil, also as part of the Acquisition. The estimated liability for these legal obligations is based on the estimated cost to satisfy the above obligations which is discounted using a credit-adjusted risk-free rate.

A reconciliation of our AROs is as follows:



	Years Ended December 31,
(in millions)	2019			2018
AROs, beginning of period	$	1,160.1		$	859.3
Liabilities acquired in the Acquisition	—			258.9
Liabilities incurred	15.8			27.8
Liabilities settled	(112.8		)	(69.6		)
Accretion expense	62.4			48.0
Revisions in estimated cash flows	191.0			78.2
Foreign currency translation	(1.3		)	(42.5		)
AROs, end of period	1,315.2			1,160.1
Less current portion	154.4			136.3
	$	1,160.8		$	1,023.8

Years Ended December 31,
(in millions) 2018 2017
AROs, beginning of period $ 859.3
$ 849.9
Liabilities acquired in the Acquisition 258.9
—
Liabilities incurred 27.8
27.1
Liabilities settled (69.6 ) (64.8 )
Accretion expense 48.0
25.7
Revisions in estimated cash flows 78.2
15.7
Foreign currency translation (42.5 ) 5.7
AROs, end of period 1,160.1
859.3
Less current portion 136.3
98.1
$ 1,023.8
$ 761.2

North America Gypstack Closure Costs

A majority of our ARO relates to Gypstack Closure Costs in Florida and Louisiana. For financial reporting purposes, we recognize our estimated Gypstack Closure Costs at their present value. This present value determined for financial reporting purposes is reflected on our Consolidated Balance Sheets in accrued liabilities and other noncurrent liabilities. As of December 31, ~~2018,~~2019 and ~~December 31, 2017,~~2018, the present value of our Gypstack Closure Costs ARO reflected in our Consolidated Balance Sheet was approximately ~~$578.4~~$660.2 million and ~~$529.7~~$578.4 million, respectively.

As discussed below, we have arrangements to provide financial assurance for the estimated Gypstack Closure Costs associated with our facilities in Florida and Louisiana.

EPA RCRA ~~Initiative~~. Initiative. On September 30, 2015, we and our subsidiary, Mosaic Fertilizer, LLC (“Mosaic Fertilizer”), reached agreements with the U.S. Environmental Protection Agency (“EPA”), the U.S. Department of Justice (“DOJ”), the Florida Department of Environmental Protection (“FDEP”) and the Louisiana Department of Environmental Quality (“LDEQ”) on the terms of two consent decrees (collectively, the “2015 Consent Decrees”) to resolve claims relating to our management of certain waste materials onsite at our Riverview, New Wales, Mulberry, Green Bay, South Pierce and Bartow fertilizer manufacturing facilities in Florida and our Faustina and Uncle Sam facilities in Louisiana. This followed a 2003 announcement by the EPA Office of Enforcement and Compliance Assurance that it would be targeting facilities in mineral processing industries, including phosphoric acid producers, for a thorough review under the U.S. Resource Conservation and Recovery Act (“RCRA”) and related state laws. As discussed below, a separate consent decree was previously entered into with EPA and the FDEP with respect to RCRA compliance at the Plant City, Florida phosphate concentrates facility (the “Plant City Facility”) that we acquired as part of our acquisition (the “CF Phosphate Assets Acquisition”) of the Florida phosphate assets and assumption of certain related liabilities of CF Industries, Inc. (“CF”).

The remaining monetary obligations under the 2015 Consent Decrees include:

Modification of certain operating practices and undertaking certain capital improvement projects over a period of several years that are expected to result in capital expenditures likely to exceed $200 million in the aggregate.

Provision of additional financial assurance for the estimated Gypstack Closure Costs for Gypstacks at the covered facilities. The RCRA Trusts are discussed in Note 1213 to our Consolidated Financial Statements. In addition, we have agreed to guarantee the difference between the amounts held in each RCRA Trust (including any earnings) and the estimated closure and long-term care costs.

As of December 31, ~~2018,~~2019, the undiscounted amount of our Gypstack Closure CostsARO associated with the facilities covered by the 2015 Consent Decrees, determined using the assumptions used for financial reporting purposes, was

approximately ~~$1.5~~$1.6 billion, and the present value of our Gypstack Closure Costs ARO reflected in our Consolidated Balance Sheet for those facilities was approximately ~~$457.1~~$429.3 million.

Plant City and Bonnie ~~Facilities~~. Facilities. As part of the CF Phosphate Assets Acquisition, we assumed certain AROs related to Gypstack Closure Costs at both the Plant City Facility and a closed Florida phosphate concentrates facility in Bartow, Florida (the “Bonnie Facility”) that we acquired. Associated with these assets are two related financial assurance arrangements for which we became responsible and that ~~provides~~provide sources of funds for the estimated Gypstack Closure Costs for these facilities, pursuant to federal or state law: the government entities can draw against such amounts in the event we cannot perform such closure activities. One was initially a trust (the “Plant City Trust”) established to meet the requirements under a consent decree with the EPA and the FDEP with respect to RCRA compliance at Plant City that also satisfied Florida financial assurance requirements at that site. Beginning in September 2016, as a substitute for the financial assurance provided through the Plant City Trust, we have provided financial assurance for Plant City in the form of a surety bond (the “Plant City Bond”). The amount of the Plant City Bond is ~~$233.7~~$244.9 million, at December 31, ~~2018,~~2019, which reflects our closure cost estimates at that date. The other was also a trust fund (the “Bonnie Facility Trust”) established to meet the requirements under Florida financial assurance regulations that apply to the Bonnie Facility. On July 27, 2018, we received $21.0 million from the Bonnie Facility Trust by substituting the trust fund for a financial test mechanism (“Bonnie Financial Test”) supported by a corporate guarantee as allowed by state regulations. Both financial assurance funding obligations require estimates of future expenditures that could be impacted by refinements in scope, technological developments, new information, cost inflation, changes in regulations, discount rates and the timing of activities. Under our current approach to satisfying applicable requirements, additional financial assurance would be required in the future if increases in cost estimates exceed the face amount of the Plant City Bond or the amount supported by the Bonnie Financial Test.

As of December 31, ~~2018,~~2019 and ~~December 31, 2017,~~2018, the aggregate amounts of AROs associated with the Plant City Facility and Bonnie Facility ~~gypstack closure costs~~Gypstack Closure Costs included in our consolidated balance sheet were ~~$109.2~~$211.2 million and ~~$97.7~~$109.2 million, respectively. The aggregate amount represented by the Plant City Bond exceeds the aggregate amount of ARO associated with that Facility. This is because the amount of financial assurance we are required to provide represents the aggregate undiscounted estimated amount to be paid by us in the normal course of our Phosphates business over a period that may not end until three decades or more after the Gypstack has been closed, whereas the ARO included in our Consolidated Balance Sheet reflects the discounted present value of those estimated amounts.

~~15. ACCOUNTING FOR~~16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We periodically enter into derivatives to mitigate our exposure to foreign currency risks, interest rate movements and the effects of changing commodity prices. We record all derivatives on the Consolidated Balance Sheets at fair value. The fair value of these instruments is determined by using quoted market prices, third party comparables, or internal estimates. We net our derivative asset and liability positions when we have a master netting arrangement in place. Changes in the fair value of the foreign currency, commodity and freight derivatives are immediately recognized in earnings. As of December 31, ~~2018,~~2019 and ~~2017,~~2018, the gross asset position of our derivative instruments was ~~$13.4~~$29.9 million and ~~$15.6~~$13.4 million, respectively, and the gross liability position of our liability instruments was $29.1 million and $89.4 million, ~~and $26.7 million,~~ respectively. ~~Due to the Acquisition, our foreign currency derivatives have increased in 2018.~~

We do not apply hedge accounting treatments to our foreign currency exchange contracts, commodities contracts, or freight contracts. Unrealized gains and (losses) on foreign currency exchange contracts used to hedge cash flows related to the production of our products are included in cost of goods sold in the Consolidated Statements of Earnings. Unrealized gains and (losses) on commodities contracts and certain forward freight agreements are also recorded in cost of goods sold in the Consolidated Statements of Earnings. Unrealized gains or (losses) on foreign currency exchange contracts used to hedge cash flows that are not related to the production of our products are included in the foreign currency transaction gain/(loss) caption in the Consolidated Statements of Earnings.

We apply fair value hedge accounting treatment to our fixed-to-floating interest rate contracts. Under these arrangements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense. These fair value hedges are considered to be highly effective and, thus, as of December 31, ~~2018,~~2019, the impact on earnings due to hedge ineffectiveness was immaterial. Consistent with Mosaic’s intent to have floating rate debt as a portion of its outstanding debt, ~~in December 2016 and the first quarter of 2017,~~ we ~~entered into four and five, respectively,~~had 9 fixed-to-floating interest rate swap agreements with a total notional amount of ~~$310.0~~$585.0 million as of the years ended December 31, 2019 and ~~$275.0 million, respectively,~~2018, related to our Senior Notes due 2023.

In December 2016, we entered into forward starting interest rate swap agreements to hedge our exposure to changes in future interest rates related to an anticipated debt issuance to fund the cash portion of the Acquisition as described in Note 24. We did not apply hedge accounting treatment to these contracts, and we used cash to settle our obligation at the time of pricing of the related debt. In November 2017, we completed the debt issuance and settled all of our outstanding pre-issuance interest rate swap agreements. These agreements had a negative impact on pre-tax earnings of approximately $12 million for the year ended December 31, 2017.

The following is the total absolute notional volume associated with our outstanding derivative instruments:



(in millions of Units)
Instrument	Derivative Category	Unit of Measure	December 31, 2019	December 31, 2018
Foreign currency derivatives	Foreign Currency	US Dollars	1,923.3	2,091.7
Interest rate derivatives	Interest Rate	US Dollars	585.0	585.0
Natural gas derivatives	Commodity	MMbtu	44.1	52.2

(in millions of Units)
Instrument Derivative Category Unit of Measure December 31,
2018 December 31,
2017
Foreign currency derivatives Foreign Currency US Dollars 2,091.7
813.5
Interest rate derivatives Interest Rate US Dollars 585.0
585.0
Natural gas derivatives Commodity MMbtu 52.2
43.0

Credit-Risk-Related Contingent Features

Certain of our derivative instruments contain provisions that are governed by International Swap and Derivatives Association agreements with the counterparties. These agreements contain provisions that allow us to settle for the net amount between

payments and receipts, and also state that if our debt were to be rated below investment grade, certain counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position as of December 31, 2019 and 2018 ~~and 2017~~ was ~~$37.9~~$11.6 million and ~~$15.0~~$37.9 million, respectively. We have no cash collateral posted in association with these contracts. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, ~~2018,~~2019, we would have been required to post an additional ~~$36.8~~$7.0 million of collateral assets, which are either cash or U.S. Treasury instruments, to the counterparties.

Counterparty Credit Risk

We enter into foreign exchange, certain commodity and interest rate derivatives, primarily with a diversified group of highly rated counterparties. We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party. While we may be exposed to potential losses due to the credit risk of non-performance by these counterparties, material losses are not anticipated. We closely monitor the credit risk associated with our counterparties and customers and to date have not experienced material losses.

~~16.~~17. FAIR VALUE MEASUREMENTS

Following is a summary of the valuation techniques for assets and liabilities recorded in our Consolidated Balance Sheets at fair value on a recurring basis:

Foreign Currency Derivatives—The foreign currency derivative instruments that we currently use are forward contracts and zero-cost collars, which typically expire within eighteen months. Most of the valuations are adjusted by a forward yield curve or interest rates. In such cases, these derivative contracts are classified within Level 2. Some valuations are based on exchange-quoted prices, which are classified as Level 1. Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component of cost of goods sold in our Corporate, Eliminations and Other segment or foreign currency transaction (gain) loss. As of December 31, ~~2018~~2019 and ~~2017,~~2018, the gross asset position of our foreign currency derivative instruments was ~~$13.1~~$15.6 million and ~~$15.4~~$13.1 million, respectively, and the gross liability position of our foreign currency derivative instruments was $22.9 million and $62.2 million, ~~and $6.5 million,~~ respectively.

Commodity Derivatives—The commodity contracts primarily relate to natural gas. The commodity derivative instruments that we currently use are forward purchase contracts, swaps and three-way collars. The natural gas contracts settle using NYMEX futures or AECO price indexes, which represent fair value at any given time. The contracts’ maturities and settlements are scheduled for future months and settlements are scheduled to coincide with anticipated gas purchases during those future periods. Quoted market prices from NYMEX and AECO are used to determine the fair value of these instruments. These market prices are adjusted by a forward yield curve and are classified within Level 2. Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component of cost of goods sold in our Corporate, Eliminations and Other segment. As of December 31, ~~2018~~2019 and ~~2017,~~2018, the gross asset position of our commodity derivative instruments was ~~$0.3~~$2.9 million and ~~$0.1~~$0.3 million, respectively, and the gross liability position of our commodity derivative instruments was $6.2 million and $17.7 million, ~~and $17.9 million,~~ respectively.

Interest Rate Derivatives—We manage interest expense through interest rate contracts to convert a portion of our fixed-rate debt into floating-rate debt. We also enter into interest rate swap agreements to hedge our exposure to changes in future interest rates related to anticipated debt issuances. Valuations are based on external pricing sources and are classified as

Level 2. Changes in the fair market values of these contracts are recognized in the Consolidated Financial Statements as a component of interest expense. As of December 31, ~~2018~~2019 and ~~2017,~~2018, the gross asset position of our interest rate swap instruments was ~~zero~~$11.4 million and ~~$0.1 million,~~0, respectively, and the gross liability position of our interest rate swap instruments was 0 and $9.5 million, ~~and $2.3 million,~~ respectively.

Financial Instruments

The carrying amounts and estimated fair values of our financial instruments are as follows:



	December 31,
	2019				2018
	Carrying		Fair		Carrying		Fair
(in millions)	Amount		Value		Amount		Value
Cash and cash equivalents	$	519.1	$	519.1	$	847.7	$	847.7
Accounts receivable	803.9		803.9		838.5		838.5
Accounts payable	680.4		680.4		780.9		780.9
Structured accounts payable arrangements	740.6		740.6		572.8		572.8
Short-term debt	41.6		41.6		11.5		11.5
Long-term debt, including current portion	4,572.7		4,920.9		4,517.5		4,554.6

December 31,
2018 2017
Carrying Fair Carrying Fair
(in millions) Amount Value Amount Value
Cash and cash equivalents $ 847.7
$ 847.7
$ 2,153.5
$ 2,153.5
Accounts receivable 838.5
838.5
642.6
642.6
Accounts payable 780.9
780.9
540.9
540.9
Structured accounts payable arrangements 572.8
572.8
386.2
386.2
Short-term debt 11.5
11.5
6.1
6.1
Long-term debt, including current portion 4,517.5
4,554.6
5,221.6
5,431.8

For cash and cash equivalents, accounts receivable, net, accounts payable, structured accounts payable arrangements and short-term debt, the carrying amount approximates fair value because of the short-term maturity of those instruments. The fair value of long-term debt, including the current portion, is estimated using quoted market prices for the publicly registered notes and debentures, classified as Level 1 and Level 2, respectively, within the fair value hierarchy, depending on the market liquidity of the debt. For information regarding the fair value of our marketable securities held in trusts, see Note 1213 of our Notes to Consolidated Financial Statements.

~~17.~~18. GUARANTEES AND INDEMNITIES

We enter into various contracts that include indemnification and guarantee provisions as a routine part of our business activities. Examples of these contracts include asset purchase and sale agreements, surety bonds, financial assurances to regulatory agencies in connection with reclamation and closure obligations, commodity sale and purchase agreements, and other types of contractual agreements with vendors and other third parties. These agreements indemnify counterparties for matters such as reclamation and closure obligations, tax liabilities, environmental liabilities, litigation and other matters, as well as breaches by Mosaic of representations, warranties and covenants set forth in these agreements. In many cases, we are essentially guaranteeing our own performance, in which case the guarantees do not fall within the scope of the accounting and disclosures requirements under U.S. GAAP.

Our more significant guarantees and indemnities are as follows:

Guarantees to Brazilian Financial Parties.From time to time, we issue guarantees to financial parties in Brazil for certain amounts owed the institutions by certain customers of Mosaic. The guarantees are for all or part of the customers’ obligations. In the event that the customers default on their payments to the institutions and we would be required to perform under the guarantees, we have in most instances obtained collateral from the customers. We monitor the nonperformance risk of the counterparties and have noted no material concerns regarding their ability to perform on their obligations. The guarantees generally have a one-year term, but may extend up to two years or longer depending on the crop cycle, and we expect to renew many of these guarantees on a rolling twelve-month basis. As of December 31, ~~2018,~~2019, we have estimated the maximum potential future payment under the guarantees to be ~~$64.3~~$71.4 million. The fair value of our guarantees is immaterial to the Consolidated Financial Statements as of December 31, ~~2018~~2019 and ~~2017.~~ 2018.

Other Indemnities.Our maximum potential exposure under other indemnification arrangements can range from a specified dollar amount to an unlimited amount, depending on the nature of the transaction. Total maximum potential exposure under these indemnification arrangements is not estimable due to uncertainty as to whether claims will be made or how they will be resolved. We do not believe that we will be required to make any material payments under these indemnity provisions.

Because many of the guarantees and indemnities we issue to third parties do not limit the amount or duration of our obligations to perform under them, there exists a risk that we may have obligations in excess of the amounts described above. For those guarantees and indemnities that do not limit our liability exposure, we may not be able to estimate what our liability would be until a claim is made for payment or performance due to the contingent nature of these arrangements.

~~18.~~19. PENSION PLANS AND OTHER BENEFITS

We sponsor pension and postretirement benefits through a variety of plans including defined benefit plans, defined contribution plans and postretirement benefit plans in North America and certain of our international locations. We reserve the right to amend, modify or terminate the Mosaic sponsored plans at any time, subject to provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), prior agreements and our collective bargaining agreements.

Defined Benefit

We sponsor various defined benefit pension plans in the U.S. and in Canada. Benefits are based on different combinations of years of service and compensation levels, depending on the plan. Generally, contributions to the U.S. plans are made to meet minimum funding requirements of ERISA, while contributions to Canadian plans are made in accordance with Pension Benefits Acts instituted by the provinces of Saskatchewan and Ontario. Certain employees in the U.S. and Canada, whose pension benefits exceed Internal Revenue Code and Canada Revenue Agency limitations, respectively, are covered by supplementary non-qualified, unfunded pension plans.

We sponsor various defined benefit pension plans in Brazil, and we acquired through the Acquisition multi-employer pension plans for certain of our Brazil associates. All our pension plans are governed by the Brazilian pension plans regulatory agency, National Superintendence of Supplementary Pensions (“PREVIC”). Our Brazil plans are not individually significant to the Company's consolidated financial statements after factoring in the multi-employer pension plan indemnification that we acquired through the Acquisition. We made contributions to these plans, net of indemnification, of $0.7 million and $1.0 million during the ~~year~~years ended December 31, ~~2018.~~

2019 and 2018, respectively.

Accounting for Pension Plans

The year-end status of the North American pension plans was as follows:



	Pension Plans
	Years Ended December 31,
(in millions)	2019			2018
Change in projected benefit obligation:
Benefit obligation at beginning of period	$	673.6		$	766.1
Service cost	4.8			6.2
Interest cost	25.0			24.0
Actuarial (gain) loss	67.4			(48.3		)
Currency fluctuations	15.7			(28.0		)
Benefits paid	(40.6		)	(46.4		)
Plan amendments	9.6			—
Projected benefit obligation at end of period	$	755.5		$	673.6
Change in plan assets:
Fair value at beginning of period	$	701.2		$	793.2
Currency fluctuations	16.8			(30.7		)
Actual return	107.7			(22.0		)
Company contribution	5.5			7.1
Benefits paid	(40.6		)	(46.4		)
Fair value at end of period	$	790.6		$	701.2
Funded status of the plans as of the end of period	$	35.1		$	27.6
Amounts recognized in the consolidated balance sheets:
Noncurrent assets	$	45.8		$	40.5
Current liabilities	(0.8		)	(0.7		)
Noncurrent liabilities	(9.9		)	(12.2		)
Amounts recognized in accumulated other comprehensive (income) loss
Prior service costs	$	25.2		$	16.9
Actuarial loss	94.8			107.7

Pension Plans
Years Ended December 31,
(in millions) 2018 2017
Change in projected benefit obligation:
Benefit obligation at beginning of period $ 766.1
$ 713.5
Service cost 6.2
5.9
Interest cost 24.0
24.3
Actuarial (gain) loss (48.3 ) 44.2
Currency fluctuations (28.0 ) 24.0
Benefits paid (46.4 ) (45.8 )
Projected benefit obligation at end of period $ 673.6
$ 766.1
Change in plan assets:
Fair value at beginning of period $ 793.2
$ 715.6
Currency fluctuations (30.7 ) 25.9
Actual return (22.0 ) 85.8
Company contribution 7.1
11.7
Benefits paid (46.4 ) (45.8 )
Fair value at end of period $ 701.2
$ 793.2
Funded status of the plans as of the end of period $ 27.6
$ 27.1
Amounts recognized in the consolidated balance sheets:
Noncurrent assets $ 40.5
$ 41.1
Current liabilities (0.7 ) (0.8 )
Noncurrent liabilities (12.2 ) (13.2 )
Amounts recognized in accumulated other comprehensive (income) loss
Prior service costs $ 16.9
$ 20.8
Actuarial loss 107.7
109.8
At December 31, 2019, approximately $7.4 million was included in accrued liabilities in our Consolidated Balance Sheet for curtailment costs related to the indefinite idling of the Colonsay mine.

The accumulated benefit obligation for the defined benefit pension plans was ~~$673.0~~$754.7 million and ~~$765.1~~$673.0 million as of December 31, ~~2018~~2019 and ~~2017,~~2018, respectively.

The components of net annual periodic benefit costs and other amounts recognized in other comprehensive income include the following components:



	Pension Plans
(in millions)	Years Ended December 31,
	2019			2018			2017
Net Periodic Benefit Cost
Service cost	$	4.8		$	6.2		$	5.9
Interest cost	25.0			24.0			24.3
Expected return on plan assets	(33.8		)	(39.7		)	(41.3		)
Amortization of:
Prior service cost	2.3			2.4			2.3
Actuarial loss	9.2			9.1			2.8
Preliminary net periodic benefit cost (income)	$	7.5		$	2.0		$	(6.0	)
Curtailment/settlement expense	—			1.2			2.4
Total net periodic benefit cost (income)	$	7.5		$	3.2		$	(3.6	)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Prior service (credit) cost recognized in other comprehensive income	$	5.5		$	(4.3	)	$	(3.8	)
Net actuarial loss (gain) recognized in other comprehensive income	(13.9		)	5.0			(4.0		)
Total recognized in other comprehensive income (loss)	$	(8.4	)	$	0.7		$	(7.8	)
Total recognized in net periodic benefit (income) cost and other comprehensive income	$	(0.9	)	$	3.9		$	(11.4	)

Pension Plans
(in millions) Years Ended December 31,
2018 2017 2016
Net Periodic Benefit Cost
Service cost $ 6.2
$ 5.9
$ 5.8
Interest cost 24.0
24.3
25.1
Expected return on plan assets (39.7 ) (41.3 ) (44.9 )
Amortization of:
Prior service cost 2.4
2.3
1.7
Actuarial loss 9.1
2.8
5.0
Preliminary net periodic benefit cost (income) $ 2.0
$ (6.0 ) $ (7.3 )
Curtailment/settlement expense 1.2
2.4
6.2
Total net periodic benefit cost (income) $ 3.2
$ (3.6 ) $ (1.1 )
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Prior service (credit) cost recognized in other comprehensive income $ (4.3 ) $ (3.8 ) $ 8.9
Net actuarial loss (gain) recognized in other comprehensive income 5.0
(4.0 ) (2.5 )
Total recognized in other comprehensive income (loss) $ 0.7
$ (7.8 ) $ 6.4
Total recognized in net periodic benefit (income) cost and other comprehensive income $ 3.9
$ (11.4 ) $ 5.3

The estimated net actuarial (gain) loss and prior service cost (credit) for the pension plans and postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in ~~2019~~2020 is ~~$12.1~~$11.5 million.

The following estimated benefit payments, which reflect estimated future service are expected to be paid by the related plans in the years ending December 31:



(in millions)	Pension Plans Benefit Payments		Other Postretirement Plans Benefit Payments		Medicare Part D Adjustments
2020	$	42.5	$	3.5	$	0.2
2021	43.3		3.3		0.2
2022	44.1		3.1		0.2
2023	44.2		2.8		0.2
2024	44.1		2.6		0.1
2024-2028	218.0		9.6		0.4

(in millions)
Pension Plans
Benefit Payments

Other Postretirement
Plans Benefit Payments

Medicare Part D
Adjustments
2019 $ 40.4
$ 4.2
$ 0.2
2020 41.1
4.2
0.2
2021 41.9
4.1
0.2
2022 42.8
3.9
0.2
2023 43.1
3.8
0.2
2024-2028 215.0
17.5
0.5

In ~~2019,~~2020, we expect to contribute cash of at least ~~$4.4~~$7.2 million to the pension plans to meet minimum funding requirements. Also in ~~2019,~~2020, we anticipate contributing cash of ~~$4.2~~$3.5 million to the postretirement medical benefit plans to fund anticipated benefit payments.

Plan Assets and Investment Strategies

The Company’s overall investment strategy is to obtain sufficient return and provide adequate liquidity to meet the benefit obligations of our pension plans. Investments are made in public securities to ensure adequate liquidity to support benefit payments. Domestic and international stocks and bonds provide diversification to the portfolio.

For the U.S. plans, we utilize an asset allocation policy that seeks to reduce funded status volatility over time. As such, the primary investment objective beyond accumulating sufficient assets to meet future benefit obligations is to monitor and

manage the assets of the plan to better insulate the asset portfolio from changes in interest rates that impact the liabilities.

This requires an interest rate management strategy to reduce the sensitivity in the plan’s funded status and having a portion of the plan’s assets invested in return-seeking strategies. Currently, our policy includes an 80% allocation to fixed income and 20% to return-seeking strategies. The plans also have de-risking glide paths that will increase this protection as funded status improves. Actual allocations may experience temporary fluctuations based on market movements and investment strategies.

For the Canadian pension plans the primary investment objective is to secure the promised pension benefits through capital preservation and appreciation to better manage the asset/liability gap and interest rate risk. A secondary investment objective is to most effectively manage investment volatility to reduce the variability of the Company’s required contributions. The plans are expected to achieve an annual overall return, over a five year rolling period, consistent with or in excess of total fund benchmarks that reflect each plan’s strategic allocations and respective market benchmarks at the individual asset class level. Management of the asset/liability gap of the plans and performance results are reviewed quarterly. Until September 2018, Mosaic had the four Canadian pension plans, two salaried and two hourly plans, managed in one master trust. In order to better match the assets with the liabilities of each plan, Mosaic decided to split the master trust into one trust for each plan. Currently, our policy includes an 80% allocation to fixed income and 20% to return-seeking strategies for the salaried plans and 60% allocation to fixed income and 40% to return-seeking strategies for the hourly plans. Actual allocations may experience temporary fluctuations based on market movements and investment strategies.

A significant amount of the assets are invested in funds that are managed by a group of professional investment managers through Mosaic’s investment advisor. These funds are mainly commingled funds. Performance is reviewed by Mosaic management monthly by comparing each fund’s return to a benchmark with an in-depth quarterly review presented by Mosaic’s investment advisor to the Global Pension Investment Committee. We do not have significant concentrations of credit risk or industry sectors within the plan assets. Assets may be indirectly invested in Mosaic stock, but any risk related to this investment would be immaterial due to the insignificant percentage of the total pension assets that would be invested in Mosaic stock.

Fair Value Measurements of Plan Assets

The following tables provide fair value measurement, by asset class, of the Company’s defined benefit plan assets for both the U.S. and Canadian plans:


(in millions)	December 31, 2018								December 31, 2019
Pension Plan Asset Category	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash	$	12.0	$	12.0	$	—	$	—	$	3.4	$	3.4	$	—	$	—
Equity securities^(a)	172.9		—		172.9		—		216.4		—		216.4		—
Fixed income^(b)	514.3		—		514.3		—		569.3		—		569.3		—
Private equity funds	2.0		—		—		2.0		1.5		—		—		1.5
Total assets at fair value	$	701.2	$	12.0	$	687.2	$	2.0	$	790.6	$	3.4	$	785.7	$	1.5

(in millions)	December 31, 2017								December 31, 2018
Pension Plan Asset Category	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash	$	14.7	$	14.7	$	—	$	—	$	12.0	$	12.0	$	—	$	—
Equity securities^(a)	327.7		—		327.7		—		172.9		—		172.9		—
Fixed income^(b)	447.8		—		447.8		—		514.3		—		514.3		—
Private equity funds	3.0		—		—		3.0		2.0		—		—		2.0
Total assets at fair value	$	793.2	$	14.7	$	775.5	$	3.0	$	701.2	$	12.0	$	687.2	$	2.0

______________________________

(a)

This class, which includes several funds, was invested approximately 35% in U.S. equity securities, 18% in Canadian equity securities and 47% in international equity securities as of December 31, 2019, and 39% in U.S. equity securities, 18% in Canadian equity securities and 43% in international equity securities as of December 31, ~~2018, and 45% in U.S. equity securities, 25% in Canadian equity securities, and 30% in international equity securities as of December 31, 2017.~~2018.

(b)

This class, which includes several funds, was invested approximately 46% in corporate debt securities, 49% in governmental securities in the U.S. and Canada and 5% in foreign entity debt securities as of December 31, 2019, and 50% in corporate debt securities, 44% in governmental securities in the U.S. and Canada and 6% in foreign entity debt securities as of December 31, ~~2018, and 55% in corporate debt securities, 42% in governmental securities in the U.S. and Canada, and 3% in foreign entity debt securities as of December 31, 2017.~~2018.

Rates and Assumptions

The approach used to develop the discount rate for the pension and postretirement plans is commonly referred to as the yield curve approach. Under this approach, we use a hypothetical curve formed by the average yields of available corporate bonds rated AA and above and match it against the projected benefit payment stream. Each category of cash flow of the projected benefit payment stream is discounted back using the respective interest rate on the yield curve. Using the present value of projected benefit payments, a weighted-average discount rate is derived.

The approach used to develop the expected long-term rate of return on plan assets combines an analysis of historical performance, the drivers of investment performance by asset class and current economic fundamentals. For returns, we utilized a building block approach starting with inflation expectations and added an expected real return to arrive at a long-term nominal expected return for each asset class. Long-term expected real returns are derived from future expectations of the U.S. Treasury real yield curve.

Weighted average assumptions used to determine benefit obligations were as follows:


	Pension Plans						Pension Plans
	Years Ended December 31,						Years Ended December 31,
	2018		2017		2016		2019		2018		2017
Discount rate	4.09	%	3.51	%	3.97	%	3.12	%	4.09	%	3.51	%
Expected return on plan assets	5.14	%	5.54	%	5.54	%	5.13	%	5.14	%	5.54	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%	3.00	%	3.50	%	3.50	%

Weighted-average assumptions used to determine net benefit cost were as follows:



	Pension Plans
	Years Ended December 31,
	2019		2018		2017
Discount rate	4.09	%	3.51	%	3.97	%
Service cost discount rate	4.00	%	3.50	%	4.02	%
Interest cost discount rate	3.77	%	3.21	%	3.44	%
Expected return on plan assets	5.14	%	5.54	%	5.54	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%

Pension Plans
Years Ended December 31,
2018 2017 2016
Discount rate 3.51 % 3.97 % 4.17 %
Service cost discount rate ^(a)
3.50 % 4.02 % 4.19 %
Interest cost discount rate ^(a)
3.21 % 3.44 % 3.45 %
Expected return on plan assets 5.54 % 5.54 % 5.66 %
Rate of compensation increase 3.50 % 3.50 % 3.50 %

~~(a)~~

In 2016, we changed the method used to estimate the service and interest cost components of net periodic benefit cost for our defined benefit pension and other postretirement benefit plans by electing a full yield curve approach and applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The impact of this change to our earnings and earnings per share was not material.

Defined Contribution Plans

Eligible salaried and non-union hourly employees in the U.S. participate in a defined contribution investment plan which permits employees to defer a portion of their compensation through payroll deductions and provides matching contributions. We match 100% of the first 3% of the participant’s contributed pay plus 50% of the next 3% of the participant’s contributed pay, subject to Internal Revenue Service limits. Participant contributions, matching contributions and the related earnings immediately vest. Mosaic also provides an annual non-elective employer contribution feature for eligible salaried and non-union hourly employees based on the employee’s age and eligible pay. Participants are generally vested in the non-elective employer contributions after three years of service. In addition, a discretionary feature of the plan allows the Company to make additional contributions to employees. Certain union employees participate in a defined contribution retirement plan based on collective bargaining agreements.

Canadian salaried and non-union hourly employees participate in an employer funded plan with employer contributions similar to the U.S. plan. The plan provides a profit sharing component which is paid each year. We also sponsor one mandatory union plan in Canada. Benefits in these plans vest after two years of consecutive service.

The expense attributable to defined contribution plans in the U.S. and Canada was $56.4 million, $51.2 million and $54.3 million for 2019, 2018 and ~~$51.1 million for 2018,~~ 2017, ~~and 2016,~~ respectively.

Postretirement Medical Benefit Plans

We provide certain health care benefit plans for certain retired employees (“Retiree Health Plans”) which may be either contributory or non-contributory and contain certain other cost-sharing features such as deductibles and coinsurance.

The North American Retiree Health Plans are unfunded and the projected benefit obligation was ~~$35.3~~$35.5 million and ~~$41.3~~$35.3 million as of December 31, ~~2018~~2019 and ~~2017,~~2018, respectively. This liability should continue to decrease due to our limited exposure. The related income statement effects of the Retiree Health Plans are not material to the Company.

The year-end status of the Brazil postretirement medical benefit plans with a discount rate of 9.15% on each of December 31, 2019 and December 31, 2018, was as follows:



	Postretirement Medical Benefits
	Years Ended December 31,
(in millions)	2019			2018
Change in accumulated postretirement benefit obligation (“APBO”):
APBO at beginning of year	$	75.8		$	69.1
Service cost	0.8			1.5
Interest cost	6.9			6.8
Actuarial loss	30.7			13.0
Currency fluctuations	(4.3		)	(13.1		)
Benefits paid	(0.5		)	(1.5		)
APBO at end of year	$	109.4		$	75.8
Change in plan assets:
Company contribution	$	0.5		$	1.5
Benefits paid	(0.5		)	(1.5		)
Fair value at end of year	$	—		$	—
Unfunded status of the plans as of the end of the year	$	(109.4	)	$	(75.8	)
Amounts recognized in the consolidated balance sheets:
Current liabilities	$	(1.7	)	$	(0.5	)
Noncurrent liabilities	(107.7		)	(75.3		)
Amounts recognized in accumulated other comprehensive (income) loss
Actuarial loss	$	50.9		$	23.9

Postretirement Medical Benefits
Years Ended December 31,
(in millions) 2018
Change in accumulated postretirement benefit obligation (“APBO”):
APBO at beginning of year $ 69.1
Service cost 1.5
Interest cost 6.8
Actuarial loss 13.0
Currency fluctuations (13.1 )
Benefits paid (1.5 )
APBO at end of year $ 75.8
Change in plan assets:
Company contribution $ 1.5
Benefits paid (1.5 )
Fair value at end of year $ —
Unfunded status of the plans as of the end of the year $ (75.8 )
Amounts recognized in the consolidated balance sheets:
Current liabilities $ (0.5 )
Noncurrent liabilities (75.3 )
Amounts recognized in accumulated other comprehensive (income) loss
Actuarial loss $ 23.9

20. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table sets forth the changes in AOCI by component during the years ended December 31, 2019, 2018 and 2017:



(in millions)	Foreign Currency Translation Gain (Loss)			Net Actuarial Gain and Prior Service Cost			Amortization of Gain on Interest Rate Swap			Net Gain (Loss) on Marketable Securities Held in Trust			Total
Balance at December 31, 2016	$	(1,196.6	)	$	(101.0	)	$	(3.5	)	$	(11.1	)	(1,312.2		)
Other comprehensive income	251.9			8.4			2.4			2.7			265.4
Tax (expense) or benefit	(11.4		)	(2.1		)	(0.7		)	(1.0		)	(15.2		)
Other comprehensive income, net of tax	240.5			6.3			1.7			1.7			250.2
Less: amount attributable to noncontrolling interest	0.4			—			—			—			0.4
Balance at December 31, 2017	$	(955.7	)	$	(94.7	)	$	(1.8	)	$	(9.4	)	$	(1,061.6	)
Other comprehensive income (loss)	(621.4		)	(8.2		)	2.3			4.8			(622.5		)
Tax (expense) or benefit	24.5			(2.4		)	(0.1		)	(0.2		)	21.8
Other comprehensive income (loss), net of tax	(596.9		)	(10.6		)	2.2			4.6			(600.7		)
Less: amount attributable to noncontrolling interest	5.2			—			—			—			5.2
Balance at December 31, 2018	$	(1,547.4	)	$	(105.3	)	$	0.4		$	(4.8	)	$	(1,657.1	)
Other comprehensive income (loss)	74.1			(26.2		)	2.2			14.0			64.1
Tax (expense) or benefit	(4.7		)	1.9			(0.5		)	(3.1		)	(6.4		)
Other comprehensive income (loss), net of tax	69.4			(24.3		)	1.7			10.9			57.7
Less: amount attributable to noncontrolling interest	1.2			—			—			—			1.2
Balance at December 31, 2019	$	(1,476.8	)	$	(129.6	)	$	2.1		$	6.1		$	(1,598.2	)

~~19.~~21. SHARE REPURCHASES

In May 2015, our Board of Directors authorized a $1.5 billion share repurchase program (the “2015 Repurchase Program”), allowing Mosaic to repurchase shares of our Common Stock through open market purchases, accelerated share repurchase arrangements, privately negotiated transactions or otherwise. The 2015 Repurchase Program has no set expiration date.

~~As of~~During the year ended December 31, ~~2018, 15,765,025~~2019, we repurchased 7.1 million shares of Common Stock ~~have been~~under the 2015 Repurchase Program for approximately $150 million. We previously repurchased 15.8 shares under the 2015 Repurchase Program for an aggregate total of approximately $650 million. The remaining amount that could be repurchased under this program was ~~$850~~$700 million as of December 31, ~~2018.~~2019.

The extent to which we repurchase our shares and the timing of any such repurchases depend on a number of factors, including market and business conditions, the price of our shares, and corporate, regulatory and other considerations.

~~20.~~22. SHARE-BASED PAYMENTS

The Mosaic Company 2014 Stock and Incentive Plan (the “2014 Stock and Incentive Plan”) was approved by our shareholders and became effective on May 15, 2014. It permits up to 25 million shares of common stock to be issued under share-based awards granted under the plan. The 2014 Stock and Incentive Plan provides for grants of stock options,

restricted stock, restricted stock units, performance units and a variety of other share-based and non-share-based awards. Our employees, officers, directors, consultants, agents, advisors and independent contractors, as well as other designated individuals, are eligible to participate in the 2014 Stock and Incentive Plan.

The Mosaic Company 2004 Omnibus Stock and Incentive Plan (the “Omnibus Plan”), which was approved by our shareholders and became effective in 2004 and subsequently amended, provided for the grant of shares and share options to employees for up to 25 million shares of common stock. While awards may no longer be made under the Omnibus Plan, it will remain in effect with respect to the awards that had been granted thereunder prior to its termination.

Mosaic settles stock option exercises, restricted stock units and certain performance units and performance shares with newly issued common shares. The Compensation Committee of the Board of Directors administers the 2014 Stock and Incentive Plan and the Omnibus Plan subject to their respective provisions and applicable law.

Stock Options

Stock options are granted with an exercise price equal to the market price of our stock at the date of grant and have a ten-year contractual term. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option valuation model. Stock options vest in equal annual installments in the first three years following the date of grant (graded vesting). Stock options are expensed on a straight-line basis over the required service period, based on the estimated fair value of the award on the date of grant, net of estimated forfeitures.

Valuation Assumptions

Assumptions used to calculate the fair value of stock options awarded in ~~each period~~2017 are noted in the following table. There were no stock options granted or issued in 2019 or 2018. Expected volatility is based on the simple average of implied and historical volatility using the daily closing prices of the Company’s stock for a period equal to the expected term of the option. The risk-free interest rate is based on the U.S. Treasury rate at the time of the grant for instruments of comparable life. ~~There were no stock options granted or issued in 2018.~~



	Year Ended December 31, 2017
Weighted average assumptions used in option valuations:
Expected volatility	35.35	%
Expected dividend yield	1.97	%
Expected term (in years)	7
Risk-free interest rate	2.34	%

Years Ended December 31,
2017 2016
Weighted average assumptions used in option valuations:
Expected volatility 35.35 % 42.54 %
Expected dividend yield 1.97 % 3.86 %
Expected term (in years) 7
7
Risk-free interest rate 2.34 % 1.65 %

A summary of the status of our stock options as of December 31, ~~2018,~~2019, and activity during ~~2018,~~2019, is as follows:



	Shares (in millions)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2018	2.4		$	45.50
Granted	—		—
Cancelled	(0.2	)	$	52.92
Outstanding as of December 31, 2019	2.2		$	44.69	3.4	$	—
Exercisable as of December 31, 2019	2.0		$	45.56	3.1	$	—

Shares
(in millions)

Weighted
Average
Exercise
Price
Weighted Average Remaining Contractual Term (Years)
Aggregate
Intrinsic
Value
Outstanding as of December 31, 2017 2.6
$ 49.20

Granted —
—

Cancelled (0.2 ) $ 91.88

Outstanding as of December 31, 2018 2.4
$ 45.50
4.0 $ —
Exercisable as of December 31, 2018 2.0
$ 48.60
3.4 $ —

The weighted-average grant date fair value of options granted during 2017 ~~and 2016~~ were ~~$9.91 and $8.37, respectively.~~$9.91. There were no0 options ~~granted~~exercised during ~~2018 and no options were exercised during~~2019, 2018 or 2017.

Restricted Stock Units

Restricted stock units are issued to various employees, officers and directors at a price equal to the market price of our stock at the date of grant. The fair value of restricted stock units is equal to the market price of our stock at the date of grant.

Restricted stock units generally cliff vest after three years of continuous service and are expensed on a straight-line basis over the required service period, based on the estimated grant date fair value, net of estimated forfeitures.

A summary of the status of our restricted stock units as of December 31, ~~2018,~~2019, and activity during ~~2018,~~2019, is as follows:



	Shares (in millions)		Weighted Average Grant Date Fair Value Per Share
Restricted stock units as of December 31, 2018	1.6		$	27.27
Granted	0.8		26.87
Issued and cancelled	(0.6	)	$	26.85
Restricted stock units as of December 31, 2019	1.8		$	27.27

Shares
(in millions)

Weighted
Average
Grant
Date Fair
Value Per
Share
Restricted stock units as of December 31, 2017 1.2
$ 33.10
Granted 0.7
26.73
Issued and cancelled (0.3 ) $ 43.65
Restricted stock units as of December 31, 2018 1.6
$ 27.27

Performance Units

During the ~~year~~years ended December 31, 2019, 2018 and 2017, 603,856, 401,098 and 455,740 total shareholder return (“TSR”) performance units were granted, ~~with a fair value of $28.09.~~respectively. Final performance units are awarded based on the increase or decrease, subject to certain limitations, in Mosaic’s share price from the grant date to the third anniversary of the award, plus dividends (a measure of total shareholder return or TSR). The beginning and ending stock prices are based on a 30 trading-day average stock price. Holders of the awards must be employed at the end of the performance period in order for any units to vest, except in the event of death, disability or retirement at or after age 60, certain changes in control ~~and~~or the exercise of Committee or Board discretion as provided in the related award agreements.

The fair value of each TSR performance unit is determined using a Monte Carlo simulation. This valuation methodology utilizes assumptions consistent with those of our other share-based awards and a range of ending stock prices; however, the expected term of the awards is three years, which impacts the assumptions used to calculate the fair value of performance units as shown in the table below. 203,782 of the TSR performance awards issued in 2019 are to be settled in cash, and are therefore accounted for as a liability with changes in value recorded through earnings during the service period. The remaining TSR performance units issued in 2019, and all of the 2018 and 2017 TSR performance units, are considered equity-classified fixed awards measured at grant-date fair value and not subsequently re-measured. All of the TSR performance units cliff vest after three years of continuous service and are expensed on a straight-line basis over the required service period, based on the estimated grant date fair value of the award net of estimated forfeitures.

A summary of the assumptions used to estimate the fair value of TSR performance units is as follows:



	Years Ended December 31,
	2019			2018			2017
Performance units granted	603,856			401,098			455,740
Average fair value of performance units on grant date	$	25.87		$	28.09		$	28.02
Weighted average assumptions used in performance unit valuations:
Expected volatility	33.70		%	34.30		%	34.26		%
Expected dividend yield	0.72		%	0.37		%	1.97		%
Expected term (in years)	3			3			3
Risk-free interest rate	2.43		%	2.42		%	1.60		%

Years Ended December 31,
2018 2017 2016
Weighted average assumptions used in performance unit valuations:
Expected volatility 34.30 % 34.26 % 35.67 %
Expected dividend yield 0.37 % 1.97 % 3.86 %
Expected term (in years) 3
3
3
Risk-free interest rate 2.42 % 1.60 % 0.99 %

During the year ended December 31, 2016, approximately 329,599 performance units were granted with vesting based on the cumulative spread between our return on invested capital (ROIC) and our weighted-average cost of capital (WACC) measured over a three-year period. These units are accounted for as share-based payments but are settled in cash, and are therefore accounted for as a liability with changes in value recorded through earnings during the three year service period. Awards are forfeited upon termination of employment, but not for retirement (if the employee has at least five years of service at age 60 or older), death, or disability of the employee. The total grant-date fair value of these awards was equal to the market price of our stock at the date of grant, which was $28.49.

A summary of our performance unit activity during ~~2018~~2019 is as follows:



	Shares (in millions)		Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2018	1.3		$	33.26
Granted	0.6		25.87
Issued and cancelled	(0.5	)	$	27.83
Outstanding as of December 31, 2019	1.4		$	27.13

Shares
(in millions)

Weighted
Average
Grant
Date Fair
Value Per
Share
Outstanding as of December 31, 2017 1.1
$ 33.26
Granted 0.4
28.09
Issued and cancelled (0.2 ) $ 43.79
Outstanding as of December 31, 2018 1.3
$ 33.26

~~Performance Based Cost Reduction Incentive Awards~~

During the year ended December 31, 2014, approximately 627,054 units of one-time, long-term incentive awards were issued to executive officers and other management employees tied to achieving target controllable operating costs savings of $228 million from 2013 levels by the end of 2016 (“~~measurement period~~”). The total grant-date fair value of these awards was equal to the market price of our stock at the date of grant, which was $49.17. During 2017, the awards were settled through the issuance of 934,346 shares of Mosaic common stock which was 150% of target, based on operating cost savings achieved during the measurement period. The market price of our stock was $31.42 at the date of issuance.

Share-Based Compensation Expense

We recorded share-based compensation expense of $31.6 million, $27.5 million and $28.0 million for 2019, 2018 and ~~$30.5 million for 2018,~~ 2017, ~~and 2016,~~ respectively. The tax benefit related to share exercises and lapses in the year was $6.7 million, $5.8 million and $9.7 million for 2019, 2018 and ~~$10.7 million for 2018,~~ 2017, ~~and 2016,~~ respectively.

As of December 31, ~~2018,~~2019, there was ~~$16.8~~$16.6 million of total unrecognized compensation cost related to options, restricted stock units and performance units and shares granted under the 2014 Stock and Incentive Plan and the Omnibus Plan. The unrecognized compensation cost is expected to be recognized over a weighted-average period of one year. No options vested in 2019 or 2018. The total fair value of options vested in 2017 ~~and 2016~~ was $4.2 ~~million and $4.5 million, respectively. No options vested in 2018.~~million.

There was no0 cash received from exercises of share-based payment arrangements for 2019, 2018 or 2017. ~~Cash received from exercises of share-based payments was $3.8 million in 2016. In 2018, 2017 and 2016, we~~We received a tax benefit for tax deductions from options of $2.6 million, $2.3 million and $14.0 million in 2019, 2018 and ~~$3.3 million,~~2017, respectively.

~~21.~~23. COMMITMENTS

We lease certain plants, warehouses, terminals, office facilities, railcars and various types of equipment under operating leases, some of which include rent payment escalation clauses, with lease terms ranging from one to ~~ten~~29 years. In addition to minimum lease payments, some of our office facility leases require payment of our proportionate share of real estate taxes and building operating expenses. Our future obligations under these leases are included in Note 4 of our Notes to Consolidated Financial Statements.

We also have purchase obligations to purchase goods and services, primarily for raw materials used in products sold to customers. In 2013, we entered into an ammonia supply agreement with CF (the “CF Ammonia Supply Agreement”) that commenced in 2017, under which Mosaic agreed to purchase approximately 545,000 to 725,000 tonnes of ammonia per year during a term that may extend until December 31, 2032 at a price tied to the prevailing price of U.S. natural gas.

We have long-term agreements for the purchase of sulfur, which is used in the production of phosphoric acid, and natural gas, which is a significant raw material used primarily in the solution mining process in our Potash segment ~~and used~~as well as in our phosphate concentrates plants. Also, we have agreements for capital expenditures primarily in our Potash segments related to our expansion projects.

A schedule of future minimum long-term purchase commitments, based on expected market prices as of December 31, ~~2018, and minimum lease payments under non-cancelable operating leases as of December 31, 2018~~2019 is as follows:



(in millions)	Purchase Commitments
2020	$	1,931.4
2021	682.6
2022	434.5
2023	319.7
2024	249.6
Subsequent years	1,344.5
	$	4,962.3

(in millions)
Purchase
Commitments

Operating
Leases
2019 $ 2,586.5
$ 97.5
2020 588.9
76.8
2021 495.7
54.7
2022 375.5
36.6
2023 261.1
28.1
Subsequent years 1,437.9
30.9
$ 5,745.6
$ 324.6

~~Rental expense for 2018, 2017 and 2016 was $270.3 million, $114.0 million and $111.0 million, respectively.~~ Purchases made under long-term commitments in 2019, 2018 and 2017 ~~and 2016~~ were $1.9 billion, $2.0 billion ~~$1.9 billion~~ and ~~$1.6~~$1.9 billion, respectively.

Most of our export sales of potash crop nutrients are marketed through a North American export association, Canpotex, which may fund its operations in part through third-party financing facilities. As a member, Mosaic or our subsidiaries are contractually obligated to reimburse Canpotex for their pro rata share of any operating expenses or other liabilities incurred. The reimbursements are made through reductions to members’ cash receipts from Canpotex.

We incur liabilities for reclamation activities and Gypstack closures in our Florida and Louisiana operations where, in order to obtain necessary permits, we must either pass a test of financial strength or provide credit support, typically in the form of cash deposits, surety bonds or letters of credit. The surety bonds generally expire within one year or less but a substantial portion of these instruments provide financial assurance for continuing obligations and, therefore, in most cases, must be

renewed on an annual basis. As of December 31, ~~2018,~~2019, we had ~~$497.7~~$544.8 million in surety bonds outstanding, of which ~~$203.3~~$260.3 million is for reclamation obligations, primarily related to mining in Florida. In addition, included in this amount is ~~$233.7~~$244.9 million, reflecting our updated closure cost estimates, delivered to EPA as a substitute for the financial assurance provided through the Plant City Trust. The remaining balance in surety bonds outstanding of ~~$60.7~~$39.6 million is for other matters.

~~22.~~24. CONTINGENCIES

We have described below the material judicial and administrative proceedings to which we are subject.

Environmental Matters

We have contingent environmental liabilities that arise principally from three sources: (i) facilities currently or formerly owned by our subsidiaries or their predecessors; (ii) facilities adjacent to currently or formerly owned facilities; and (iii) third-party Superfund or state equivalent sites. At facilities currently or formerly owned by our subsidiaries or their predecessors, the historical use and handling of regulated chemical substances, crop and animal nutrients and additives and by-product or process tailings have resulted in soil, surface water and/or groundwater contamination. Spills or other releases of regulated substances, subsidence from mining operations and other incidents arising out of operations, including accidents, have occurred previously at these facilities, and potentially could occur in the future, possibly requiring us to undertake or fund cleanup or result in monetary damage awards, fines, penalties, other liabilities, injunctions or other court or administrative rulings. In some instances, pursuant to consent orders or agreements with governmental agencies, we are undertaking certain remedial actions or investigations to determine whether remedial action may be required to address contamination. At other locations, we have entered into consent orders or agreements with appropriate governmental agencies to perform required remedial activities that will address identified site conditions. Taking into consideration established accruals of approximately ~~$58.6~~$39.3 million and ~~$35.1~~$58.6 million, as of December 31, ~~2018~~2019 and ~~2017,~~2018, respectively, expenditures for these known conditions currently are not expected, individually or in the aggregate, to have a material effect on our business or financial condition. However, material expenditures could be required in the future to remediate the contamination at known sites or at other current or former sites or as a result of other environmental, health and safety matters. Below is a discussion of the more significant environmental matters.

New Wales Water Loss ~~Incident~~. Incident. In August 2016, a sinkhole developed under one of the two cells of the active Gypstack at our New Wales facility in Polk County, Florida, resulting in process water from the stack draining into the sinkhole. The

incident was reported to the FDEP and EPA. In October 2016, our subsidiary, Mosaic Fertilizer, entered into a consent order (the “Order”) with the FDEP relating to the incident. Under the order, Mosaic Fertilizer agreed to, among other things: implement a remediation plan to close the sinkhole; perform additional monitoring of the groundwater quality and act to assess and remediate in the event monitored off-site water does not comply with applicable standards as a result of the incident; evaluate the risk of potential future sinkhole formation at the New Wales facility and at Mosaic Fertilizer’s active Gypstack operations at the Bartow, Riverview and Plant City facilities with recommendations to address any identified issues; and provide financial assurance of no less than $40.0 million, which we have done without the need for any expenditure of corporate funds through satisfaction of a financial strength test and Mosaic parent guarantee. The Order did not require payment of civil penalties relating to the incident.

In 2016, we recorded expenses and related accruals of approximately $70.0 million, reflecting our estimated costs related to the sinkhole. At June 30, 2017, we accrued an additional $14.0 million, in part due to refinements in our estimates as repairs progressed and because we determined that a portion of the sinkhole was wider than previously estimated. As of December 31, ~~2018,~~2019, the sinkhole repairs were substantially complete, with ~~$79.5~~$80.2 million spent in remediation and sinkhole-related costs through this date. We estimate remaining costs will ~~be approximately $1.5 million.~~have no significant impact to our Consolidated Financial Statements. Additional expenditures could be required in the future for additional remediation or other measures in connection with the sinkhole including if, for example, FDEP or EPA were to request additional measures to address risks presented by the Gypstack. These expenditures could be material. In addition, we are unable to predict at this time what, if any, impact the New Wales water loss incident will have on future Florida permitting efforts.

EPA RCRA ~~Initiative~~. Initiative. We have certain financial assurance and other obligations under consent decrees and a separate financial assurance arrangement relating to our facilities in Florida and Louisiana. These obligations are discussed in Note 1415 of our Notes to Consolidated Financial Statements.

EPA EPCRA ~~Initiative~~. Initiative. In July 2008, DOJ sent a letter to major U.S. phosphoric acid manufacturers, including us, stating that EPA’s ongoing investigation indicates apparent violations of Section 313 of the Emergency Planning and Community Right-to-Know Act (“EPCRA”) at their phosphoric acid manufacturing facilities. Section 313 of EPCRA requires annual reports to be submitted with respect to the use or presence of certain toxic chemicals. DOJ and EPA also stated that they believe that a number of these facilities have violated Section 304 of EPCRA and Section 103 of the Comprehensive Environmental

Response, Compensation and Liability Act (“CERCLA”) by failing to provide required notifications relating to the release of hydrogen fluoride from the facilities. The letter did not identify any specific violations by us or assert a demand for penalties against us. We cannot predict at this time whether EPA and DOJ will initiate an enforcement action over this matter, what its scope would be, or what the range of outcomes of such a potential enforcement action might be.

Florida Sulfuric Acid ~~Plants~~. Plants. On April 8, 2010, EPA Region 4 submitted an administrative subpoena to us under Section 114 of the Federal Clean Air Act (the “CAA”) regarding compliance of our Florida sulfuric acid plants with the “New Source Review” requirements of the CAA. The request received by Mosaic appears to be part of a broader EPA national enforcement initiative focusing on sulfuric acid plants. On June ~~16,~~6, 2010, EPA issued a notice of violation to CF (the “"CF NOV”") with respect to ~~“New~~"New Source ~~Review”~~Review" compliance at the Plant City ~~Facility’s~~Facility's sulfuric acid plants and the allegations in the CF NOV were not resolved before our 2014 acquisition of the Plant City Facility. CF has agreed to indemnify us with respect to any penalty EPA may assess as a result of the allegations in the CF NOV.

We ~~are negotiating~~have been engaged in settlement discussions with U.S. EPA and the ~~terms~~Department of ~~a settlement~~Justice, originating with ~~EPA that would resolve both~~ the allegations of violations ~~alleged in the CF NOV, and violations which EPA may contend, but have not asserted, exist~~of Clean Air Act Prevention of Significant Deterioration (PSD) permitting requirements at the Plant City sulfuric acid plants ~~at our other facilities in Florida. Based on the current status of the negotiations, we expect that our commitments will include an agreement to reduce our~~and encompassing injunctive relief regarding sulfur dioxide emissions ~~over~~across Mosaic’s Florida sulfuric acid plant fleet. With the ~~next five years~~closure of Plant City fertilizer operations, there is no longer a need to ~~comply~~reach resolution with the government on injunctive relief (i.e., reduction of sulfur dioxide emissions) at that facility. Furthermore, the Department of Justice has determined that there is no basis for proceeding with a ~~sulfur dioxide ambient air quality standard enacted by~~settlement, as EPA ~~in 2010. We do~~and the Department have not ~~expect that~~currently alleged any ~~related penalties assessed against us as part of a potential settlement would be material. In the event we are unable to finalize agreement on the terms~~violations of the ~~settlement, we~~Clean Air Act PSD permitting requirements at any other of Mosaic’s Florida sulfuric acid plants.

We cannot predict at this time whether EPA and DOJ will initiate an enforcement action in the future with respect to “New Source Review” compliance at our Florida sulfuric acid plants ~~other than the Plant City Facility~~ or what its scope would be, or what the range of outcomes might be with respect to such a potential enforcement ~~action or with respect~~action.

Uncle Sam Gypstack. In January 2019, we observed lateral movement of the north slope of our active phosphogypsum stack at the Uncle Sam facility in Louisiana. The observation was reported to the ~~CF NOV.~~ Louisiana Department of Environmental Quality and the U.S. EPA. We continue to provide updates to the agencies on the movement, which has slowed following actions we have taken, which include reducing process water volume stored atop the stack to reduce the active load causing the movement; constructing a stability berm at the base of the slope to increase resistance; and removing gypsum from the north side to the south side. These steps have improved slope stability, reduced slope movement and reduced our capacity to store process water. There has been no loss of containment resulting from the movement observed, and none is expected. Although continued lateral movement on the north slope and a sustained reduction in process water storage could have a material effect on our future operations at that facility, we cannot predict the prospective impact on our results of operations at this time.

Other Environmental ~~Matters~~. Matters. Superfund and equivalent state statutes impose liability without regard to fault or to the legality of a party’s conduct on certain categories of persons who are considered to have contributed to the release of “hazardous substances” into the environment. Under Superfund, or its various state analogues, one party may, under certain circumstances, be required to bear more than its proportionate share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. Currently, certain of our subsidiaries are involved or concluding involvement at several Superfund or equivalent state sites. Our remedial liability from these sites, alone or in the aggregate,

currently is not expected to have a material effect on our business or financial condition. As more information is obtained regarding these sites and the potentially responsible parties involved, this expectation could change.

We believe that, pursuant to several indemnification agreements, our subsidiaries are entitled to at least partial, and in many instances complete, indemnification for the costs that may be expended by us or our subsidiaries to remedy environmental issues at certain facilities. These agreements address issues that resulted from activities occurring prior to our acquisition of facilities or businesses from parties including, but not limited to, ARCO (BP); Beatrice Fund for Environmental Liabilities; Conoco; Conserv; Estech, Inc.; Kaiser Aluminum & Chemical Corporation; Kerr-McGee Inc.; PPG Industries, Inc.; The Williams Companies; CF; and certain other private parties. Our subsidiaries have already received and anticipate receiving amounts pursuant to the indemnification agreements for certain of their expenses incurred to date as well as future anticipated expenditures. We record potential indemnifications as an offset to the established accruals when they are realizable or realized.

Louisiana Parishes Coastal Zone Cases. Several Louisiana parishes and the City of New Orleans have filed lawsuits against hundreds of oil and gas companies seeking regulatory, restoration and compensatory damages in connection with historical oil, gas and sulfur mining and transportation operations in the coastal zone of Louisiana. Mosaic is the corporate successor to certain companies which performed these types of operations in the coastal zone of Louisiana. Mosaic has been named in two of the lawsuits filed to date. In addition, in several other cases, historical oil, gas and sulfur operations which may have been related to Mosaic’s corporate predecessors have been identified in the complaints. Based upon information known to date, Mosaic has contractual indemnification rights against third parties for any loss or liability arising out of these claims pursuant to indemnification agreements entered into by Mosaic’s corporate predecessor(s) with third parties. There may also be insurance contracts which may respond to some or all of the claims. However, the financial ability of the third party indemnitors, the extent of potential insurance coverage and the extent of potential liability from these claims is currently unknown.

In September 2019, counsel for several of the parishes announced that an agreement had been reached to settle the claims against Mosaic and its corporate predecessors, subject to approval by the participating parishes and the State of Louisiana. In connection with that settlement agreement, the proposed settlement payment obligations would be paid by third party indemnitors.

Phosphate Mine Permitting in Florida

Denial of the permits sought at any of our mines, issuance of the permits with cost-prohibitive conditions, substantial delays in issuing the permits, legal actions that prevent us from relying on permits or revocation of permits may create challenges for us to mine the phosphate rock required to operate our Florida and Louisiana phosphate plants at desired levels or increase our costs in the future.

The South Pasture Extension. Mine Litigation. In November 2016, the Army Corps of Engineers (the “Corps”) issued a federal wetlands permit under the Clean Water Act for mining an extension of our South Pasture phosphate rock mine in central Florida. On December 20, 2016, the Center for Biological Diversity, ManaSota-88, People for Protecting Peace River and Suncoast Waterkeeper (collectively, “NGO Plaintiffs”) issued a 60-day notice of intent to sue the Corps and the U.S. Fish and Wildlife Service (the “Service”) under the federal Endangered Species Act regarding actions taken by the Corps and the Service in connection with the issuance of the permit. On March 15, 2017, the ~~same group~~NGO Plaintiffs filed a complaint against the Corps, the Service and the U.S. Department of the Interior (collectively “Government Defendants”) in the U.S. District Court for the Middle District of Florida, Tampa Division. The complaint alleges that various actions taken by the Corps and the Service in connection with the issuance of the permit, including in connection with the Service’s biological opinion and the Corps’ reliance on that biological opinion, violated substantive and procedural requirements of the federal Clean Water Act (“CWA”), the National Environmental Policy Act (“NEPA”) and the Endangered Species Act (the “ESA”), and were arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law, in violation of the Administrative Procedure Act (the “APA”). ~~As to~~In their Complaint, the Corps, plaintiffs allege in their complaint, among other things, that the Corps failed to conduct an adequate analysis under the CWA of alternatives, failed to fully consider the effects of the South Pasture extension mine, failed to take adequate steps to minimize potential adverse impacts and violated the ESA by relying on the Service’s biological opinion to determine that its permitting decision is not likely to adversely affect certain endangered or rare species. As to the Service, plaintiffs allege in their complaint, among other things, that the Service’s biological opinion fails to meet statutory requirements, that the Service failed to properly consider impacts and adequately assess the cumulative effects on certain species, and that the Service violated the ESA in finding that the South Pasture extension mine is not likely to adversely affect certain endangered or rare species. The plaintiffs are seekingNGO Plaintiffs sought specific relief including (i) declarations that the Corps’ decision to issue the permit violated the CWA, NEPA, the ESA and the APA and that its NEPA review violated the law; (ii) declarations that the Service’s biological opinion violated applicable law and that the Corps’ reliance on the biological opinion violated the ESA; (iii) orders that the Corps rescind the permit, that the Service withdraw its biological opinion and related analyses and prepare a biological opinion that complies with the ESA; and (iv) that the Corps be preliminarily and permanently enjoined from authorizing any further action under the permit until it complies fully with the requirements of the CWA, NEPA, the ESA and the APA. On March 31, 2017, Mosaic’s motion for intervention was granted with no restrictions. Plaintiffs filed an amended complaint on June 2, 2017, without any new substantive allegations, and on June 28, 2017, Mosaic (as intervenor) and separately, the ~~defendants,~~Government Defendants, filed answers to the amended complaint. On

In June ~~30,~~through July, 2017, the ~~plaintiffs~~parties filed ~~a motion~~competing Motions for ~~summary judgment, arguing that~~Summary Judgment based on the ~~permit should not have been issued. On July 15, 2017, Mosaic filed a response in opposition to~~administrative record developed for the ~~plaintiffs’ motion,~~challenged federal permits and ~~on July 28, 2017, Mosaic filed its own motion for summary judgment.~~approvals, consistent with the Administrative Procedures Act. On December 14, 2017, the ~~Tampa~~U.S. District Court granted Mosaic’s motion for summary judgment in favor of Mosaic and the ~~government defendants,~~Government Defendants, denied all claims raised by the NGO Plaintiffs, and denied the ~~plaintiffs’~~NGO Plaintiffs’ motion to supplement the administrative record.

On February 12, 2018, the ~~plaintiffs~~NGO Plaintiffs filed an appeal with the U.S. Court of Appeals for the Eleventh Circuit seeking to overturn the U.S. District Court’s decision. Notably, the NGO Plaintiffs did not seek reversal of the ~~Tampa District Court decision.~~Court’s decision as to the Clean Water Act claims, but focused on the Endangered Species Act and National Environmental Policy Act claims for relief. The appellate case was fully briefed with close coordination between counsel for Mosaic and the Justice Department in

developing the Appellants’ Briefs and Reply Briefs. A mandatory mediation occurred on March 19, 2018, but no settlement was reached. ~~Briefing~~Oral argument was held before the Eleventh Circuit Court of Appeals on May 22, 2019.

On November 4, 2019, the 11th Circuit U.S. Court of Appeals upheld the federal permits issued for Mosaic’s South Pasture Extension Mine and the adequacy of the Area wide Environmental Impact Statement (AEIS) that served as the NEPA support for three of Mosaic’s new Florida phosphate mines. The Court of Appeals held that the Corps of Engineers’ decision to issue the Clean Water Act 404 Permit and its reliance on the AEIS to satisfy the federal NEPA requirements was a proper exercise of its authority.

On December 18, 2019, the NGO Plaintiffs filed a Petition for Rehearing En Banc seeking a rehearing before the entire 15-judge panel of the Court of Appeals. No responses to the Petition for Rehearing are allowed by ~~all parties was completed on July 13, 2018.~~

Mosaic or the Government Defendants, unless requested by the Court.

We believe the ~~plaintiffs’~~NGO Plaintiffs’ claims in this case are without merit and we ~~intend~~will continue to vigorously defend the Corps’ issuance of the ~~South Pasture extension permit~~SPE Mine CWA 404 Permit and the Service’s biological opinion. However, if the ~~plaintiffs~~NGO Plaintiffs were to prevail in this case, we would be prohibited from continuing to mine the ~~South Pasture extension,~~SPE Mine, and obtaining new or modified permits could significantly delay our resumption of mining and could result in more onerous mining conditions. This could have a material adverse effect on our future results of operations, reduce future cash flows from operations, and in the longer term, conceivably adversely affect our liquidity and capital resources.

MicroEssentials^® Patent Lawsuit

On January 9, 2009, John Sanders and Specialty Fertilizer Products, LLC filed a complaint against Mosaic, Mosaic Fertilizer, LLC, Cargill, Incorporated and Cargill Fertilizer, Inc. in the United States District Court for the Western District of Missouri (the “Missouri District Court”). The plaintiffs alleged that our production of MicroEssentials^® value-added ammoniated phosphate crop nutrient products that we produce, infringed on a patent owned by the plaintiffs. Plaintiffs sought to enjoin the alleged infringement and to recover an unspecified amount of damages and attorneys’ fees for past infringement. Through an order entered by the court on September 25, 2014, Cargill was dismissed as a defendant, and the two original plaintiffs were replaced by a single plaintiff, JLSMN LLC, an entity to whom the patent was transferred.

The Missouri District Court stayed the lawsuit pending reexamination of plaintiff’s patent claims by the U.S. Patent and Trademark Office (the “PTO”). On September 12, 2012, Shell Oil Company (“Shell”) filed an additional reexamination request which in part asserted that the claims as amended and added in connection with the reexamination are unpatentable. On October 4, 2012, the PTO issued a Reexamination Certificate in which certain claims of the plaintiff’s patent were cancelled, disclaimed and amended, and new claims were added. On December 11, 2012, the PTO issued an initial rejection of all of plaintiff’s remaining patent claims but later reversed its decision. Shell appealed the PTO’s decision. On June 7, 2016, the Patent Trial and Appeal Board issued a decision holding that all patent claims initially allowed to the plaintiff should have been found invalid. On November 8, 2017, the Federal Circuit Court of Appeals affirmed the Patent Trial and Appeal Board’s decision. On June 25, 2018, the United States Supreme Court denied plaintiffs petition for writ of certiorari. The case in the Missouri District Court has been dismissed with prejudice, and the matter is now concluded.

Brazil Legal Contingencies

Our Brazilian subsidiaries are engaged in a number of judicial and administrative proceedings regarding labor, environmental and civil claims that allege aggregate damages and/or fines of approximately ~~$1.08~~$1.1 billion. We estimate that our probable aggregate loss with respect to these claims is approximately ~~$47.9~~$90.5 million, which is included in our accrued liabilities in our ~~Condensed~~ Consolidated Balance Sheets at December 31, ~~2018.~~2019.

Approximately ~~$743.7~~$775.5 million of the maximum potential loss relates to labor claims, such as in-house and third-party employees' judicial proceedings alleging the right to receive overtime pay, additional payment due to work in hazardous conditions, risk premium, profit sharing, additional payment due to night work, salary parity and wage differences. We estimate that our probable aggregate loss regarding these claims is approximately ~~$40.7~~$63.2 million, which is included in accrued liabilities in our ~~Condensed~~ Consolidated Balance Sheets at December 31, ~~2018.~~2019. Based on Brazil legislation and the current status of similar labor cases involving unrelated companies, we believe we have recorded adequate loss contingency reserves sufficient to cover our estimate of probable losses. If the status of similar cases involving unrelated companies were to adversely change in the future, our maximum exposure could increase and additional accruals could be required.

~~Approximately $6.7 million of~~From the ~~above mentioned $40.7~~$63.2 million reserves ~~related~~mentioned above, approximately $7.4 million relates to a ~~purported~~collective lawsuit filed by the labor union in Tapira claiming workers are entitled to overtime pay because the work shift should include transportation time to travel to a facility in which no public transportation was available. Approximately$4.9 millionrelates to a collective lawsuit filed by the labor union in Rosário do Catete, Sergipe, claiming payment of overtime due to an irregular work shift in force until 2016. Both matters are currently before the Brazilian Labor Superior Court. Approximately$2.7 million relates to a class action filed by one of the unions claiming additional payment for occupational hazard due to the alleged exposure of workers to explosive gases at the Company's potash mine at ~~Rosario~~Rosário do Catete, ~~Sergipe, to explosive gases that could be found during the mining process. The matter currently is before the Brazilian Labor Supreme Court.~~Sergipe.

The environmental ~~and mining~~ judicial and administrative proceedings claims allege aggregate damages and/or fines in excess of ~~$163.3~~$145.9 million; however, we estimate that our probable aggregate loss regarding these claims in approximately $5.6 million, which has been accrued at December 31, ~~2018.~~2019. The majority of the reserves involves a claim filed in 2012 by the State Public Prosecutor Office, alleging that the Company delayed construction of an effluent treatment plant, thereby subjecting it to a fine under the commitment agreement.

The mining judicial and administrative proceedings claims allege aggregate damages and/or fines of approximately $16.7 million. We estimate that our probable aggregate loss regarding these claims is approximately $10.2 million, which has been accrued at December 31, 2019. The majority of the reserves involves an arbitration proceeding initiated by EMS/GEOFOCUS ("EMS") in which Mosaic was ordered to indemnify EMS for the costs of exploring certain mining rights on behalf of Mosaic.

Our Brazilian subsidiaries also have certain other civil contingent liabilities with respect to judicial, administrative and arbitration proceedings and claims related to contract disputes, pension plan matters, real state disputes and other civil matters arising in the ordinary course of business. These claims allege aggregate damages in excess of ~~$172.7~~$180.8 million. We estimate that the probable aggregate loss with respect to these matters is approximately ~~$1.6~~$11.5 million.

Uberaba Judicial Settlement

In 2013, the Federal Public Prosecutor filed a public civil action requesting the Company adopt several measures to mitigate soil and water contamination related to the ~~gypstack~~Gypstack at our Uberaba facility, including compensation for the alleged social and environmental damages. In 2014, our predecessor subsidiary in Brazil entered into a judicial settlement with the federal public prosecutor, the State of Minas Gerais public prosecutor and the federal environmental agency. Under this agreement, we agreed to implement remediation measures such as: constructing a liner under the Gypstack water ponds and lagoons, and monitoring the groundwater and soil quality. We also agreed to create a private reserve of natural heritage and to pay compensation in the amount of approximately $0.3 million, which was paid in July 2018. We are currently acting in compliance with our obligations under the judicial settlement and expect them to be completed by December 31, 2023.

Uberaba EHS Class Action

In 2013, the State of Minas Gerais public prosecutor filed a class action claiming that our predecessor company in Brazil did not comply with labor safety rules and working hour laws. This claim was based on an inspection conducted by the Labor and Employment Ministry in 2010, following which we were fined for not complying with several labor regulations. We filed our defense, claiming that we complied with these labor regulations and that the assessment carried out by the inspectors in 2010 was abusive. Following the initial hearing, the court ordered an examination to determine whether there has been any non-compliance with labor regulations. The examination is currently pending. The amount involved in the proceeding is $31.8 million.

Brazil Tax Contingencies

Our Brazilian subsidiaries are engaged in a number of judicial and administrative proceedings relating to various non-income tax matters. We estimate that our maximum potential liability with respect to these matters is approximately ~~$414~~$408.2 million, of which ~~$228~~$212.0 million is subject to an indemnification agreement entered into with Vale S.A. in connection with the Acquisition.

Approximately ~~$256~~$271.0 million of the maximum potential liability relates to a Brazilian federal value added tax, PIS and ~~Coffins,~~COFINS, and tax credit cases, while the majority of the remaining amount relates to various other non-income tax cases such as value-added taxes. The maximum potential liability can increase with new audits. Based on Brazil legislation and the current status of similar tax cases involving unrelated taxpayers, we believe we have recorded adequate loss contingency reserves sufficient to cover our estimate of probable losses, which are immaterial. If the status of similar tax cases involving unrelated taxpayer changes in the future, additional accruals could be required.

Other Claims

We also have certain other contingent liabilities with respect to judicial, administrative and arbitration proceedings and claims of third parties, including tax matters, arising in the ordinary course of business. We do not believe that any of these contingent liabilities will have a material adverse impact on our business or financial condition, results of operations, and cash flows.

~~23.~~25. RELATED PARTY TRANSACTIONS

We enter into transactions and agreements with certain of our non-consolidated companies and other related parties from time to time. As of December 31, ~~2018 and 2017,~~2019, the net amount due from our non-consolidated companies totaled $23.2 million. As of December 31, 2018, there was a net amount due to our non-consolidated companies of $95.2 ~~million and $45.4 million, respectively. We also have~~million. These amounts include a long-term indemnification asset of ~~$30.7~~$32.5 million from Vale S.A. for reimbursement of pension plan obligations.

The Consolidated Statements of Earnings included the following transactions with our non-consolidated companies:



	Years Ended December 31,
(in millions)	2019		2018		2017
Transactions with non-consolidated companies included in net sales	$	969.5	$	842.4	$	715.3
Transactions with non-consolidated companies included in cost of goods sold	$	1,057.7	$	1,046.4	$	750.2

Years Ended December 31,

(in millions) 2018 2017 2016
Transactions with non-consolidated companies included in net sales $ 842.4
$ 715.3
$ 623.1
Transactions with non-consolidated companies included in cost of goods sold 1,046.4
750.2
552.9

As part of the MWSPC joint venture, we market approximately 25% of the MWSPC production, for which approximately $8.3 million, $6.6 million and $1.0 million ~~respectively~~ is included in revenue for the years ended December 31, 2019, 2018 and ~~2017.~~2017, respectively.

In November 2015, we agreed to provide funds to finance the purchase and construction of ~~two~~2 articulated tug and barge units, intended to transport anhydrous ammonia for our operations, through a bridge loan agreement with Gulf Marine Solutions, LLC (“GMS”). GMS is a wholly owned subsidiary of Gulf Sulphur Services Ltd., LLLP (“Gulf Sulphur Services”), an entity in which we and a joint venture partner, Savage Companies (“Savage”), each indirectly own a 50% equity interest and for which a subsidiary of Savage provides operating and management services. GMS provided these funds through draws on the Mosaic bridge loan, and through additional loans from Gulf Sulphur Services. We determined, beginning in 2015 that we are the primary beneficiary of GMS, a variable interest entity and, at that time, we consolidated GMS’s operations in our Phosphates segment.

On October 24, 2017, a lease financing transaction was completed with respect to the completed tug and barge unit, and; following the application of proceeds from the transaction, all outstanding loans made by Gulf Sulphur Services to GMS, together with accrued interest, were repaid, and the bridge loans related to the first unit’s construction were repaid. At December 31, ~~2018~~2019 and December 31, ~~2017, $75.3~~2018, $74.7 million and ~~$73.2~~$75.3 million in bridge loans ~~respectively, which are eliminated in consolidation, were outstanding,~~ relating to the cancelled second barge and the remaining ~~tug.~~tug, which are eliminated in consolidation, were outstanding, respectively. Reserves against the bridge loan of approximately $54.2 million were recorded through December 31, ~~2017,~~2018, and no additional charges ~~have been~~were recorded in ~~2018.~~2019. The construction of the remaining tug, funded by the bridge loan advances in excess of the reserves, is recorded within construction in-progress within our consolidated balance sheet. Several subsidiaries of Savage operate vessels utilized by Mosaic under time charter arrangements, including the ammonia tug and barge unit.

~~24. ACQUISITION OF MOSAIC FERTILIZANTES P&K S.A.~~

~~On December 19, 2016, we entered into an agreement with Vale S.A. (“Vale”) and Vale Fertilizer Netherlands B.V. (“Vale Netherlands” and, together with Vale and certain of its affiliates, the “Sellers~~”) to acquire all of the issued and outstanding capital stock of the now Acquired Business, for a purchase price of (i) $1.25 billion in cash (subject to adjustments) and (ii) 42,286,874 shares of our Common Stock. The agreement was amended by a letter agreement dated December 28, 2017 to, among other things, reduce the cash portion of the purchase price to $1.15 billion and the number of shares to be issued to 34,176,574.

On January 8, 2018, we completed the Acquisition. The aggregate consideration paid by Mosaic at closing was $1.08 billion in cash (after giving effect to certain adjustments based on matters such as the working capital of the Acquired Business, which were estimated at the time of closing) and 34,176,574 shares of our Common Stock, par value $0.01 per share (“~~Common Stock~~”), which was valued at $26.92 per share at closing. The final purchase price is subject to a fair value determination of potential contingent consideration of up to $260 million, of which $130 million has expired without payment as of December 31, 2018, and evaluation of other consideration associated with assumed liabilities.

This acquisition allows us to expand our business in the fast-growing Brazilian agricultural market. Following the Acquisition, we are the leading fertilizer production and distribution company in Brazil. The assets we acquired include five

Brazilian phosphate rock mines, four chemical plants, a potash mine in Brazil, the Sellers’ 40% economic interest in the joint venture which owns the Miski Mayo phosphate rock mine in the Bayovar region of Peru, in which we already held a 35% economic interest, and a potash project in Kronau, Saskatchewan.

~~On the closing date, we also entered into an investor agreement (“Investor Agreement”) with Vale and Vale Fertilizer Netherlands B.V. that governs certain rights of and restrictions on Vale, Vale Fertilizer Netherlands B.V. and their respective affiliates (the “Vale Stockholders~~”) in connection with the shares of our Common Stock they own as a result of the Acquisition. These include certain rights to designate two individuals to our board of directors. In connection with the closing of the Acquisition, our board of directors was increased by one director, with Vale designating a new director for appointment to the board. The Vale Stockholders are also subject to certain transfer and standstill restrictions. In addition, until the later of the third anniversary of the closing and the date on which our board of directors no longer includes any Vale designees, the Vale Stockholders will agree to vote their shares of our stock (i) with respect to the election of directors, in accordance with the recommendation of our board of directors and (ii) with respect to any other proposal or resolution, at their election, either in the same manner as and in the same proportion to all voting securities that are not beneficially held by the Vale Stockholders are voted, or in accordance with the recommendation of our board of directors. Also under the Investor Agreement, the Vale Stockholders will be entitled to certain demand and to customary piggyback registration rights, beginning on the second anniversary of the closing of the transaction.

~~The following table is the final allocation of the assets acquired and the liabilities we assumed in the Acquisition as of January 8, 2018, the date of the Acquisition:~~

Cash and cash equivalents $ 86.0
Receivables, net 100.3
Inventories 344.2
Other current assets 107.6
Total current assets acquired 638.1
Property, plant and equipment, net 2,503.2
Goodwill 96.2
Deferred income taxes 48.3
Other assets^(a)
292.2
     Total assets acquired 3,578.0
Current maturities of long-term debt 6.7
Structured accounts payable arrangements 98.2
Accounts payable and accrued liabilities 373.3
Total current liabilities assumed 478.2
Long-term debt, less current maturities 64.6
Deferred income taxes 128.3
Asset retirement obligations 247.3
Other noncurrent liabilities 215.3
     Total liabilities assumed 1,133.7
Net identifiable assets acquired 2,444.3
Noncontrolling interest (453.0 )
Cash and cash equivalents acquired (86.0 )
     Total consideration transferred (net of cash acquired and working capital adjustments) $ 1,905.3


~~(a)~~	~~Other assets includes a long-term receivable of $116.3 million, recoverable taxes of $101.6 million and an indemnification asset of $37.2 million as of January 8, 2018.~~

~~Recognized goodwill of $96.2 million is attributable to the Miski Mayo portion of the Acquisition, reflected in the Phosphates segment.~~

Mosaic gained control of the Miski Mayo mine through the acquisition of the Seller’s 40% economic interest, for a total ownership interest of 75%, and began to consolidate the operations of Miski Mayo effective as of the closing date of the Acquisition. This was accounted for as a step acquisition and required us to remeasure the previously owned equity interest to fair value as of the acquisition date. An immaterial gain was recorded as a result of this re-measurement. Their balances are shown in the respective line items above.

~~As part of the Acquisition, a Brazilian company, Terras Brasil Ltda (“Brazil Landco~~”), was incorporated for the purpose of owning and transferring control of certain property from the Sellers to Mosaic. Brazil Landco is 51% owned by Vale or one of its subsidiaries and 49% owned by Mosaic. Mosaic is the primary beneficiary of Brazil Landco, a variable interest entity, and began to consolidate its operations effective as of the closing date of the Acquisition.

We recognized approximately $45.3 million and $26.2 million of acquisition and integration costs that were expensed during the years ended December 31, 2018 and 2017, respectively. These costs are included within other operating expense in the Consolidated Statement of Earnings. In 2018, we recorded other operating expense of $11.1 million related to a potential earn-out obligation to Vale, bringing the total obligation in our Consolidated Balance Sheets to $12.4 million at December 31, 2018. This earn-out obligation is subject to re-measurement each reporting period. Subsequent changes to the fair value of the liability will be reflected within other operating expense in the Consolidated Statement of Earnings. The cash payment, if any, would be paid in the first half of 2020.

The Acquisition contributed revenues and net earnings of $1.3 billion and $83.6 million, respectively from January 8, 2018 through December 31, 2018, excluding the effects of the acquisition and integration costs described above.

The following unaudited pro forma information presents the combined results of Mosaic and the acquired entities as if Mosaic had completed the Acquisition on January 1, 2017. The unaudited pro forma information for 2018 is immaterial as the Acquisition was completed on January 8, 2018. As required by GAAP, these unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined companies would have been had the Acquisition occurred at the beginning of the period being presented, nor are they indicative of future results of operations.

Year Ended
December 31,
2017
Net sales $ 8,605.7
Net earnings attributable to Mosaic $ (43.3 )
Basic net earnings per share attributable to Mosaic $ (0.11 )
Diluted net earnings per share attributable to Mosaic $ (0.11 )

~~25.~~26. BUSINESS SEGMENTS

The reportable segments are determined by management based upon factors such as products and services, production processes, technologies, market dynamics, and for which segment financial information is available for our chief operating decision maker.

For a description of our business segments see Note 1 of our Notes to Consolidated Financial Statements. We evaluate performance based on the operating earnings of the respective business segments, which includes certain allocations of corporate selling, general and administrative expenses. The segment results may not represent the actual results that would be expected if they were independent, stand-alone businesses. Intersegment eliminations, including profit on intersegment sales, mark-to-market gains/losses on derivatives, debt expenses, Streamsong Resort® results of operations and the results of

the China and India distribution business are included within Corporate, Eliminations and Other. As of January 1, 2019, certain selling, general and administrative costs that are not controllable by the business segments are no longer allocated to segments and are included within Corporate, Eliminations and Other. Our operating results for the years ended December 31, 2018 and 2017 have been recast to reflect this change.

Segment information for the years 2019, 2018 ~~2017~~ and ~~2016~~2017 is as follows:



(in millions)	Phosphates			Potash		Mosaic Fertilizantes		Corporate, Eliminations and Other (a)			Total
Year Ended December 31, 2019
Net sales to external customers	$	2,416.6		$	2,081.7	$	3,782.8	$	625.2		$	8,906.3
Intersegment net sales	824.7			32.1		—		(856.8		)	—
Net sales	3,241.3			2,113.8		3,782.8		(231.6		)	8,906.3
Gross margin	(82.3		)	616.8		290.1		72.7			897.3
Canadian resource taxes	—			174.6		—		—			174.6
Gross margin (excluding Canadian resource taxes)	(82.3		)	791.4		290.1		72.7			1,071.9
Impairment, restructuring and other expenses	931.6			530.5		—		—			1,462.1
Operating earnings	(1,131.1		)	45.8		132.5		(142.1		)	(1,094.9		)
Capital expenditures	545.2			540.1		182.3		4.6			1,272.2
Depreciation, depletion and amortization expense	430.1			296.3		135.8		20.5			882.7
Equity in net earnings (loss) of nonconsolidated companies	(60.1		)	—		—		0.7			(59.4		)
Year Ended December 31, 2018
Net sales to external customers	$	3,106.3		$	2,154.8	$	3,747.1	$	579.1		$	9,587.3
Intersegment net sales	780.0			19.1		—		(799.1		)	—
Net sales	3,886.3			2,173.9		3,747.1		(220.0		)	9,587.3
Gross margin	581.5			597.2		382.9		(63.2		)	1,498.4
Canadian resource taxes	—			159.4		—		—			159.4
Gross margin (excluding Canadian resource taxes)	581.5			756.6		382.9		(63.2		)	1,657.8
Operating earnings	471.4			510.8		240.6		(294.5		)	928.3
Capital expenditures	393.9			410.5		148.2		1.9			954.5
Depreciation, depletion and amortization expense	403.7			301.5		158.5		20.2			883.9
Equity in net earnings (loss) of nonconsolidated companies	(4.6		)	—		—		0.1			(4.5		)
Year Ended December 31, 2017
Net sales to external customers	$	2,826.6		$	1,836.5	$	2,220.1	$	526.2		$	7,409.4
Intersegment net sales	762.6			16.1		—		(778.7		)	—
Net sales	3,589.2			1,852.6		2,220.1		(252.5		)	7,409.4
Gross margin	332.2			391.6		128.6		(9.6		)	842.8
Canadian resource taxes	—			70.1		—		—			70.1
Gross margin (excluding Canadian resource taxes)	332.2			461.7		128.6		(9.6		)	912.9
Operating earnings	254.5			344.2		63.1		(196.1		)	465.7
Capital expenditures	401.0			371.6		32.7		14.8			820.1
Depreciation, depletion and amortization expense	338.0			287.2		16.9		23.4			665.5
Equity in net earnings (loss) of nonconsolidated companies	16.0			—		—		0.7			16.7
Total assets as of December 31, 2019 (b)	$	7,183.5		$	7,219.2	$	3,974.9	$	920.9		$	19,298.5
Total assets as of December 31, 2018	7,877.3			7,763.1		3,952.4		526.4			20,119.2
Total assets as of December 31, 2017	7,700.6			8,301.7		1,376.7		1,254.4			18,633.4

(in millions) Phosphates Potash Mosaic Fertilizantes
Corporate,
Eliminations
and Other (a)
Total
Year Ended December 31, 2018
Net sales to external customers $ 3,106.3
$ 2,154.8
$ 3,747.1
$ 579.1
$ 9,587.3
Intersegment net sales 780.0
19.1
—
(799.1 ) —
Net sales 3,886.3
2,173.9
3,747.1
(220.0 ) 9,587.3
Gross margin 581.5
597.2
382.9
(63.2 ) 1,498.4
Canadian resource taxes —
159.4
—
—
159.4
Gross margin (excluding Canadian resource taxes) 581.5
756.6
382.9
(63.2 ) 1,657.8
Operating earnings 414.8
454.1
227.0
(167.6 ) 928.3
Capital expenditures 393.9
410.5
148.2
1.9
954.5
Depreciation, depletion and amortization expense 403.7
301.5
158.5
20.2
883.9
Equity in net earnings (loss) of nonconsolidated companies (4.6 ) —
—
0.1
(4.5 )
Year Ended December 31, 2017 —
Net sales to external customers $ 2,826.6
$ 1,836.5
$ 2,220.1
$ 526.2
$ 7,409.4
Intersegment net sales 762.6
16.1
—
(778.7 ) —
Net sales 3,589.2
1,852.6
2,220.1
(252.5 ) 7,409.4
Gross margin 332.2
391.6
128.6
(9.6 ) 842.8
Canadian resource taxes —
70.1
—
—
70.1
Gross margin (excluding Canadian resource taxes) 332.2
461.7
128.6
(9.6 ) 912.9
Operating earnings 191.6
281.3
63.1
(70.3 ) 465.7
Capital expenditures 401.0
371.6
32.7
14.8
820.1
Depreciation, depletion and amortization expense 338.0
287.2
16.9
23.4
665.5
Equity in net earnings (loss) of nonconsolidated companies 16.0
—
—
0.7
16.7
Year Ended December 31, 2016
Net sales to external customers $ 2,928.4
$ 1,673.0
$ 2,113.9
$ 447.5
$ 7,162.8
Intersegment net sales 782.5
12.7
—
(795.2 ) —
Net sales 3,710.9
1,685.7
2,113.9
(347.7 ) 7,162.8
Gross margin 349.8
256.6
125.0
78.6
810.0
Canadian resource taxes —
101.1
—
—
101.1
Gross margin (excluding Canadian resource taxes) 349.8
357.7
125.0
78.6
911.1
Operating earnings 47.8
138.8
64.8
67.6
319.0
Capital expenditures 380.0
416.7
23.7
22.7
843.1
Depreciation, depletion and amortization expense 362.4
308.7
15.1
25.0
711.2
Equity in net earnings (loss) of nonconsolidated companies 0.2
(15.5 ) (0.1 ) —
(15.4 )
Total assets as of December 31, 2018 $ 7,877.3
$ 7,763.1
$ 3,952.4
$ 526.4
$ 20,119.2
Total assets as of December 31, 2017 7,700.6
8,301.7
1,376.7
1,254.4
18,633.4
Total assets as of December 31, 2016 7,679.7
7,777.9
1,249.7
133.4
16,840.7

(a)

The "Corporate, Eliminations and Other" category includes the results of our ancillary distribution operations in India and China. For the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016,~~2017, distribution operations in India and China had revenues of $575.6 million, $533.9 million, ~~$493.2 million,~~ and ~~$419.6~~$493.2 million, respectively and gross margins of $27.3 million, $42.8 million, ~~$46.9 million,~~ and ~~$21.2~~$46.9 million, respectively.


(b)	In 2019 we recorded an impairment of goodwill in Phosphates of $588.6 million which reduced the total asset balance.

Financial information relating to our operations by geographic area is as follows:



	Years Ended December 31,
(in millions)	2019		2018		2017
Net sales^(a):
Brazil	$	3,675.1	$	3,727.7	$	2,199.0
Canpotex^(b)	952.5		820.2		700.6
Canada	602.0		639.0		508.9
India	347.1		304.4		305.2
China	225.3		231.7		206.4
Mexico	117.8		133.9		131.8
Argentina	116.3		70.5		53.1
Paraguay	102.9		100.7		113.8
Australia	91.3		136.0		147.0
Peru	89.3		82.6		56.9
Colombia	82.8		101.5		86.9
Japan	33.0		92.2		71.7
Thailand	24.8		28.1		20.9
Honduras	11.7		28.7		20.6
Other	101.6		118.4		105.6
Total international countries	6,573.5		6,615.6		4,728.4
United States	2,332.8		2,971.7		2,681.0
Consolidated	$	8,906.3	$	9,587.3	$	7,409.4

Years Ended December 31,
(in millions) 2018 2017 2016
Net sales^(a):

Brazil $ 3,727.7
$ 2,199.0
$ 2,127.0
Canpotex^(b)
820.2
700.6
604.5
Canada 639.0
508.9
498.2
India 304.4
305.2
296.7
China 231.7
206.4
171.2
Australia 136.0
147.0
121.0
Mexico 133.9
131.8
125.0
Colombia 101.5
86.9
104.9
Paraguay 100.7
113.8
106.6
Japan 92.2
71.7
82.7
Peru 82.6
56.9
68.3
Argentina 70.5
53.1
67.1
Honduras 28.7
20.6
25.6
Thailand 28.1
20.9
21.2
Other 118.4
105.6
65.1
Total international countries 6,615.6
4,728.4
4,485.1
United States 2,971.7
2,681.0
2,677.7
Consolidated $ 9,587.3
$ 7,409.4
$ 7,162.8


(a)	Revenues are attributed to countries based on location of customer.


(b)	Canpotex is the export association of the Saskatchewan potash producers. Canpotex sells approximately ~~24%~~25% of its sales volumes to Brazil, ~~18%~~22% to China, 10% to India, ~~10%~~8% to Indonesia and ~~38%~~35% to the rest of the world.



	December 31,
(in millions)	2019		2018
Long-lived assets:
Canada	$	4,553.7	$	4,764.8
Brazil	1,934.6		1,886.0
Other	1,476.1		1,778.6
Total international countries	7,964.4		8,429.4
United States	5,943.6		5,401.5
Consolidated	$	13,908.0	$	13,830.9

December 31,
(in millions) 2018 2017
Long-lived assets:
Canada $ 4,764.8
$ 5,457.1
Brazil 1,886.0
326.0
Other 123.2
103.7
Total international countries 6,774.0
5,886.8
United States 7,056.9
6,181.9
Consolidated $ 13,830.9
$ 12,068.7

Excluded from the table above as of December 31, ~~2018~~2019 and ~~2017,~~2018, are goodwill of ~~$1,707.5~~$1,156.9 million and ~~$1,693.6~~$1,707.5 million and deferred income taxes of ~~$343.8~~$515.4 million and ~~$254.6~~$343.8 million, respectively.

Net sales by product type for the years 2019, 2018 ~~2017~~ and ~~2016~~2017 are as follows:


	Years Ended December 31,						Years Ended December 31,
(in millions)	2018		2017		2016		2019		2018		2017
Sales by product type:
Phosphate Crop Nutrients	$	2,956.8	$	2,266.7	$	2,369.2	$	2,541.3	$	2,956.8	$	2,266.7
Potash Crop Nutrients	2,755.9		2,180.6		1,889.1		2,716.8		2,755.9		2,180.6
Crop Nutrient Blends	1,418.9		1,384.2		1,403.1		1,415.7		1,418.9		1,384.2
Specialty Products^(a)	1,844.8		1,319.8		1,266.5		1,623.5		1,844.8		1,319.8
Phosphate Rock	53.0		—		—		53.6		53.0		—
Other^(b)	557.9		258.1		234.9		555.4		557.9		258.1
	$	9,587.3	$	7,409.4	$	7,162.8	$	8,906.3	$	9,587.3	$	7,409.4


(a)	Includes sales of MicroEssentials^®, K-Mag^®, Aspire and animal feed ingredients.


(b)	Includes sales of industrial potash.

27. PLANT CITY AND COLONSAY CLOSURE COSTS

On June 18, 2019, we announced the permanent closure of the Plant City Facility. We temporarily idled the Plant City Facility in the fourth quarter of 2017, as it was one of our higher cost phosphate facilities. For the year ended December 31, 2019, we recognized pre-tax costs of $341.3 million in impairment, restructuring and other expenses in our Consolidated Statement of Earnings (Loss), related to the permanent closure of this facility. These costs consisted of approximately $210 million related to the write-off of fixed assets, $110 million related to asset retirement obligations and $21 million related to inventory and other reserves.

Following the end of our fiscal year, on January 28, 2020, we announced that we intend to keep our Colonsay, Saskatchewan potash mine idled for the foreseeable future. The mine will be placed in care and maintenance mode, employing minimal staff and allowing for resumption of operations when needed to meet customers’ needs. At December 31, 2019, we have recorded pre-tax costs of approximately $529.7 million, in impairment, restructuring and other expenses in our Consolidated Statement of Earnings (Loss), related to this idling. These costs consisted of approximately $493 million related to the write-off of fixed assets, $27 million related to severance and other employee costs, and $10 million related to the write-off of maintenance, repair, and operating inventories. The write-off is principally the carrying value of the 2013 expansion project, which increased Colonsay’s operating capacity to 2.1 million tonnes. Colonsay has been operating with a modified 1.5 million tonnes capacity since 2016. The Company does not expect to use the expansion capacity for the foreseeable future.

Quarterly Results (Unaudited)

In millions, except per share amounts and common stock prices


	Quarter													Quarter
	First			Second		Third		Fourth			Year			First		Second			Third			Fourth			Year
Year Ended December 31, 2019
Net sales														$	1,899.7	$	2,176.9		$	2,753.4		$	2,076.3		$	8,906.3
Gross margin														309.5		227.2			279.9			80.7			897.3
Operating earnings (loss)														202.1		(241.9		)	139.5			(1,194.6		)	(1,094.9		)
Net earnings (loss) attributable to Mosaic														130.8		(233.1		)	(44.1		)	(921.0		)	(1,067.4		)
Basic net earnings per share attributable to Mosaic														$	0.34	$	(0.60	)	$	(0.11	)	$	(2.43	)	$	(2.78	)
Diluted net earnings per share attributable to Mosaic														0.34		(0.60		)	(0.11		)	(2.43		)	(2.78		)
Common stock prices:
High														$	33.91	$	28.01		$	25.71		$	22.50
Low														25.95		20.81			17.36			17.66
Year Ended December 31, 2018
Net sales	$	1,933.7		$	2,205.0	$	2,928.1	$	2,520.5		$	9,587.3		$	1,933.7	$	2,205.0		$	2,928.1		$	2,520.5		$	9,587.3
Gross margin	242.1			294.6		495.5		466.2			1,498.4			242.1		294.6			495.5			466.2			1,498.4
Operating earnings	80.7			196.3		393.3		258.0			928.3			80.7		196.3			393.3			258.0			928.3
Net earnings attributable to Mosaic	42.3			67.9		247.5		112.3			470.0			42.3		67.9			247.5			112.3			470.0
Basic net earnings per share attributable to Mosaic	$	0.11		$	0.18	$	0.64	$	0.29		$	1.22		$	0.11	$	0.18		$	0.64		$	0.29		$	1.22
Diluted net earnings per share attributable to Mosaic	0.11			0.18		0.64		0.29			1.22			0.11		0.18			0.64			0.29			1.22
Common stock prices:
High	$	29.20		$	29.95	$	32.98	$	37.37					$	29.20	$	29.95		$	32.98		$	37.37
Low	23.43			22.90		27.50		27.52						23.43		22.90			27.50			27.52
Year Ended December 31, 2017
Net sales	$	1,578.1		$	1,754.6	$	1,984.8	$	2,091.9		$	7,409.4
Gross margin	129.6			192.3		240.8		280.1			842.8
Operating earnings	30.1			94.6		213.9		127.1			465.7
Net earnings attributable to Mosaic	(0.9		)	97.3		227.5		(431.1		)	(107.2		)
Basic net earnings per share attributable to Mosaic	$	—		$	0.28	$	0.65	$	(1.23	)	$	(0.31	)
Diluted net earnings per share attributable to Mosaic	—			0.28		0.65		(1.23		)	(0.31		)
Common stock prices:
High	$	34.36		$	29.51	$	24.77	$	26.12
Low	28.34			21.79		19.23		20.72

The number of holders of record of our Common Stock as of ~~March~~February 1, 2020 was 1,549.

In the fourth quarter of 2019, ~~was 1,599.~~we recorded pre-tax charges of $529.7 million related to the indefinite idling of our Colonsay, Saskatchewan potash mine and $588.6 million related to the impairment of goodwill for our Phosphates reporting unit.

Dividends have been declared on a quarterly basis during all periods presented. The annual dividend in 2018 was $0.10 per share. In the ~~second~~first quarter of ~~2015,~~2019, we increased our annual dividend to ~~$1.10 per share. In the second quarter of 2017, we decreased our annual dividend to $0.60 per share and in the fourth quarter of 2017, we decreased it to $0.10~~$0.20 per share.

The following table presents our selected financial data. This information has been derived from our audited consolidated financial statements. This historical data should be read in conjunction with the Consolidated Financial Statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Five Year Comparison

In millions, except per share amounts



	Years Ended December 31,
	2019			2018			2017			2016			2015
Statements of Operations Data:
Net sales	$	8,906.3		$	9,587.3		$	7,409.4		$	7,162.8		$	8,895.3
Cost of goods sold	8,009.0			8,088.9			6,566.6			6,352.8			7,177.4
Gross margin	897.3			1,498.4			842.8			810.0			1,717.9
Selling, general and administrative expenses	354.1			341.1			301.3			304.2			361.2
Impairment, restructuring and other expense^(b)	1,462.1			—			—			—			—
Other operating expenses	176.0			229.0			75.8			186.8			77.9
Operating (loss) earnings	(1,094.9		)	928.3			465.7			319.0			1,278.8
Interest (expense) income, net	(182.9		)	(166.1		)	(138.1		)	(112.4		)	(97.8		)
Foreign currency transaction gain (loss)	20.2			(191.9		)	49.9			40.1			(60.5		)
Other expense	1.5			(18.8		)	(3.5		)	(4.3		)	(17.2		)
(Loss) earnings from consolidated companies before income taxes	(1,256.1		)	551.5			374.0			242.4			1,103.3
Provision for (benefit from) income taxes^(a)	(224.7		)	77.1			494.9			(74.2		)	99.1
(Loss) earnings from consolidated companies	(1,031.4		)	474.4			(120.9		)	316.6			1,004.2
Equity in net (loss) earnings of nonconsolidated companies	(59.4		)	(4.5		)	16.7			(15.4		)	(2.4		)
Net (loss) earnings including noncontrolling interests	(1,090.8		)	469.9			(104.2		)	301.2			1,001.8
Less: Net (loss) earnings attributable to noncontrolling interests	(23.4		)	(0.1		)	3.0			3.4			1.4
Net (loss) earnings attributable to Mosaic	$	(1,067.4	)	$	470.0		$	(107.2	)	$	297.8		$	1,000.4

Years Ended December 31,

2018 2017 2016 2015 2014
Statements of Operations Data:

Net sales $ 9,587.3
$ 7,409.4
$ 7,162.8
$ 8,895.3
$ 9,055.8
Cost of goods sold 8,088.9
6,566.6
6,352.8
7,177.4
7,129.2
Gross margin 1,498.4
842.8
810.0
1,717.9
1,926.6
Selling, general and administrative expenses 341.1
301.3
304.2
361.2
382.4
Gain on assets sold and to be sold —
—
—
—
(16.4 )
Carlsbad restructuring expense^(b)
—
—
—
—
125.4
Other operating expenses 229.0
75.8
186.8
77.9
123.4
Operating earnings 928.3
465.7
319.0
1,278.8
1,311.8
Gain in value of share repurchase agreement —
—
—
—
(60.2 )
Interest (expense) income, net (166.1 ) (138.1 ) (112.4 ) (97.8 ) (107.6 )
Foreign currency transaction (loss) gain (191.9 ) 49.9
40.1
(60.5 ) 79.1
Other expense (18.8 ) (3.5 ) (4.3 ) (17.2 ) (5.8 )
Earnings from consolidated companies before income taxes 551.5
374.0
242.4
1,103.3
1,217.3
Provision for (benefit from) income taxes^(a)(b)
77.1
494.9
(74.2 ) 99.1
184.7
Earnings (loss) from consolidated companies 474.4
(120.9 ) 316.6
1,004.2
1,032.6
Equity in net (loss) earnings of nonconsolidated companies (4.5 ) 16.7
(15.4 ) (2.4 ) (2.2 )
Net earnings (loss) including noncontrolling interests 469.9
(104.2 ) 301.2
1,001.8
1,030.4
Less: Net (loss) earnings attributable to noncontrolling interests (0.1 ) 3.0
3.4
1.4
1.8
Net earnings (loss) attributable to Mosaic $ 470.0
$ (107.2 ) $ 297.8
$ 1,000.4
$ 1,028.6


	Years Ended December 31,											Years Ended December 31,
	2018		2017			2016		2015		2014		2019			2018		2017			2016		2015
Earnings per common share attributable to Mosaic:
Basic net earnings (loss) per share attributable to Mosaic	$	1.22	$	(0.31	)	$	0.85	$	2.79	$	2.69
Basic net (loss) earnings per share attributable to Mosaic												$	(2.78	)	$	1.22	$	(0.31	)	$	0.85	$	2.79
Basic weighted average number of shares outstanding	384.8		350.9			350.4		358.5		374.1		383.8			384.8		350.9			350.4		358.5
Diluted net earnings (loss) per share attributable to Mosaic	$	1.22	$	(0.31	)	$	0.85	$	2.78	$	2.68
Diluted net (loss) earnings per share attributable to Mosaic												$	(2.78	)	$	1.22	$	(0.31	)	$	0.85	$	2.78
Diluted weighted average number of shares outstanding	386.4		350.9			351.7		360.3		375.6		383.8			386.4		350.9			351.7		360.3
Balance Sheet Data (at period end):
Cash and cash equivalents	$	847.7	$	2,153.5		$	673.1	$	1,276.3	$	2,374.6	$	519.1		$	847.7	$	2,153.5		$	673.1	$	1,276.3
Total assets	20,119.2		18,633.4			16,840.7		17,389.5		18,283.0		19,298.5			20,119.2		18,633.4			16,840.7		17,389.5
Total long-term debt (including current maturities)	4,517.5		5,221.6			3,818.1		3,811.2		3,819.0		4,572.7			4,517.5		5,221.6			3,818.1		3,811.2
Total liabilities	9,514.5		8,994.3			7,218.2		7,824.5		7,562.4		9,930.9			9,514.5		8,994.3			7,218.2		7,824.5
Total equity	10,604.7		9,639.1			9,622.5		9,565.0		10,720.6		9,367.6			10,604.7		9,639.1			9,622.5		9,565.0
Other Financial Data:
Depreciation, depletion and amortization	$	883.9	$	665.5		$	711.2	$	739.8	$	750.9	$	882.7		$	883.9	$	665.5		$	711.2	$	739.8
Net cash provided by operating activities	1,409.8		935.5			1,260.2		2,038.3		2,122.1		1,095.4			1,409.8		935.5			1,260.2		2,038.3
Capital expenditures	954.5		820.1			843.1		1,000.3		929.1		1,272.2			954.5		820.1			843.1		1,000.3
Dividends per share^(c)	0.10		0.35			1.10		1.075		1.00		0.20			0.10		0.35			1.10		1.075

(a)

The years ended December 31, ~~2018 and 2017 include a discrete income tax expense of approximately $1 million and $451 million, respectively. The years ended December 31,~~2019, 2016 and 2015 include a discrete income tax benefit of approximately $356 million, $54 million, and $47 million, respectively. ~~See further discussion in Note 13 to the Consolidated Financial Statements.~~The years ended December 31, 2018, and 2017 include a discrete

income tax expense of approximately $1 million and $451 million, respectively. See further discussion in Note 14 to the Consolidated Financial Statements.

(b)

In ~~2014,~~2019, we ~~decided to permanently discontinue production of MOP at our Carlsbad, New Mexico facility. The~~recorded pre-tax charges ~~were $125.4 million. The year ended December 31, 2014 also includes a discrete income tax benefit~~ of ~~approximately $152 million primarily~~$341.3 related to the ~~acquisition of ADM and the sale~~permanent closure of our ~~distribution business in Argentina.~~Plant City, Florida facility, $529.7 million related to the indefinite idling of our Colonsay, Saskatchewan potash mine and $588.6 million related to the impairment of goodwill for our Phosphates reporting unit.

(c)

Dividends have been declared on a quarterly basis during all periods presented. In the second quarter of 2015, we increased our annual dividend to $1.10 per share. In the second quarter of 2017, we decreased our annual dividend to $0.60 per share and in the fourth quarter of 2017, we decreased it to $0.10 per share. In the first quarter of 2019, we increased our annual dividend to $0.20 per share.

SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS

For the years ended ~~December 31,~~2019, 2018 ~~2017~~ and ~~2016~~2017

In millions

Column A Column B Column C Column D Column E
Additions
Description
Balance
Beginning
of Period

Charges or
(Reductions)
to Costs and
Expenses

Charges or
(Reductions)
to Other
Accounts(b)
Deductions
Balance at
End of Period^(a)
Allowance for doubtful accounts, deducted from accounts receivable in the balance sheet:
Year ended December 31, 2016 10.4
(1.4 ) 1.7
(0.4 ) 10.3
Year ended December 31, 2017 10.3
5.6
(0.2 ) (0.2 ) 15.5
Year ended December 31, 2018 15.5
—
12.0
(c) (4.1 ) 23.4
Income tax valuation allowance, related to deferred income taxes
Year ended December 31, 2016 11.9
18.7
—
—
30.6
Year ended December 31, 2017 30.6
553.5
—
—
584.1
Year ended December 31, 2018 584.1
946.2
—
—
1,530.3



Column A	Column B	Column C					Column D		Column E
		Additions
Description	Balance Beginning of Period	Charges or (Reductions) to Costs and Expenses		Charges or (Reductions) to Other Accounts			Deductions		Balance at End of Period^(a)
Allowance for doubtful accounts, deducted from accounts receivable in the balance sheet:
Year Ended December 31, 2017	10.3	5.6		(0.2	)		(0.2	)	15.5
Year Ended December 31, 2018	15.5	—		12.0		(b)	(4.1	)	23.4
Year Ended December 31, 2019	23.4	4.6		(6.8	)		(1.0	)	20.2
Income tax valuation allowance, related to deferred income taxes
Year Ended December 31, 2017	30.6	553.5		—			—		584.1
Year Ended December 31, 2018	584.1	946.4		—			—		1,530.5
Year Ended December 31, 2019	1,530.5	(73.4	)	—			—		1,457.1


(a)	Allowance for doubtful accounts balance includes $16.7 million, $22.1 million, $13.2 ~~million, $7.6~~ million of allowance on long-term receivables recorded in other long term assets for the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016,~~2017, respectively.


(b)	~~The income tax valuation allowance adjustment was recorded to accumulated other comprehensive income and deferred taxes.~~


~~(c)~~	Amount relates to allowance of $12.0 million acquired in the Acquisition.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control system is a process designed to provide reasonable assurance to our management, Board of Directors and stockholders regarding the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles (U.S. GAAP), and includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations from our management and Board of Directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2018.~~2019. In assessing the effectiveness of our internal control over financial reporting as of December 31, ~~2018~~2019 management used the control criteria framework of the Committee of Sponsoring Organizations (COSO) of the Treadway Commission published in its report entitled Internal Control—Integrated Framework (2013). Based on their evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, ~~2018~~2019. KPMG LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, has issued an auditors’ report on the Company’s internal control over financial reporting as of December 31, ~~2018.~~2019.

~~F-95~~F-96



Delaware		20-1026454
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Part I:		Page
Item 1.	Business	1
	• Overview	1
	• Business Segment Information	3
	• Sales and Distribution Activities	22
	• Competition	23
	• Factors Affecting Demand	24
	• Other Matters	25
	• Executive Officers	25
Item 1A.	Risk Factors	27
Item 1B.	Unresolved Staff Comments	4544
Item 2.	Properties	4544
Item 3.	Legal Proceedings	4544
Item 4.	Mine Safety Disclosures	45
Part II:
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4746
Item 6.	Selected Financial Data	47
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	4847
Item 8.	Financial Statements and Supplementary Data	4847
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	4847
Item 9A.	Controls and Procedures	48
Item 9B.	Other Information	48
Part III:
Item 10.	Directors, Executive Officers and Corporate Governance	5049
Item 11.	Executive Compensation	5049
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	5049
Item 13.	Certain Relationships and Related Transactions, and Director Independence	5049
Item 14.	Principal Accounting Fees and Services	5049
Part IV.
Item 15.	Exhibits and Financial Statement Schedules	5150
Item 16.	Form 10-K Summary	57
Signatures		S-1
Financial Table of Contents		F-1


	Belle Plaine	Colonsay	Esterhazy	Total	Belle Plaine	Colonsay	Esterhazy	Total
Acres under control
Owned in fee	16,270	9,880	116,482	142,632	17,526	10,524	116,980	145,030
Leased from Province	51,598	120,383	197,574	369,555	51,250	120,343	197,814	369,407
Leased from others	—	3,692	85,059	88,751	—	3,826	87,760	91,586
Total under control	67,868	133,955	399,115	600,938	68,776	134,693	402,554	606,023


(tonnes of ore in millions)	Reserves^(a)(b)		Potash Mineralization^(a)(c)	Reserves^(a)(b)		Potash Mineralization^(a)(c)
Facility	Recoverable Tonnes	Average Grade (% K2O)	Potentially Recoverable Tonnes	Recoverable Tonnes	Average Grade (% K2O)	Potentially Recoverable Tonnes
Canada
Belle Plaine	819	18.0	2,363	799	18.0	2,517
Colonsay	295	26.3	441	299	26.3	425
Esterhazy	879	24.7	674	872	24.6	671
sub-totals	1,993	22.2	3,478	1,970	22.2	3,613
United States
Carlsbad	162	5.2	—	176	5.3	—
Totals	2,155	20.9	3,478	2,146	20.8	3,613



Name	Age	Position
Bruce M. Bodine Jr.	4748	Senior Vice ~~President—~~President - Phosphates
Clint C. Freeland	5051	Senior Vice ~~President—~~President - Chief Financial Officer
Mark J. Isaacson	5657	Senior Vice President, General Counsel and Corporate Secretary
Chrisopher A. Lewis	57	Senior Vice President - Human Resources
Richard N. McLellan	6263	Senior Vice ~~President—Mosaic Fertilizantes~~President - Commercial
James “Joc” C. O’Rourke	5859	Chief Executive Officer, President and Director
Walter F. Precourt III	5455	Senior Vice ~~President—~~President - Strategy and Growth
Corrine D. Ricard	5556	Senior Vice ~~President—Commercial~~President - Mosaic Fertilizantes
Karen A. Swager	4849	Senior Vice ~~President—~~President - Potash



Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MOS	New York Stock Exchange


1.	Portions of the registrant’s definitive proxy statement to be delivered in conjunction with the ~~2019~~2020 Annual Meeting of Stockholders (Part III)


•	“we”, “us”, and “our” refer to Mosaic and its direct and indirect subsidiaries, individually or in any combination;


•	“Cargill” means Cargill, Incorporated and its direct and indirect subsidiaries, individually or in any combination;


•	“Cargill Crop Nutrition” means the crop nutrient business we acquired from Cargill in the Combination;


•	“Combination” means the October 22, 2004 combination of IMC and Cargill Crop Nutrition; and


•	~~We had record sales volumes of 2.9 million tonnes of MicroEssentials~~^® ~~in 2018.~~


•	The financial statements and supplementary financial information in our Consolidated Financial Statements (“Consolidated Financial Statements”).


•	MicroEssentials^® is a value-added ammoniated phosphate product that is enhanced through a patented process that creates very thin platelets of sulfur and other micronutrients, such as zinc, on the granulated product. The patented process incorporates both the sulfate and elemental forms of sulfur, providing season-long availability to crops.


(tonnes in millions)	Phosphoric Acid		Processed Phosphate^(a)/DAP/MAP/ MicroEssentials^®/Feed Phosphate		Phosphoric Acid		Processed Phosphate^(a)/DAP/MAP/ MicroEssentials^®/Feed Phosphate
	Operational Capacity^(b)		Operational Capacity^(b)		Operational Capacity^(b)		Operational Capacity^(b)
Facility	Operational Capacity^(b)	Production^(c)	Operational Capacity^(b)	Production^(c)	Operational Capacity^(b)	Production^(c)	Operational Capacity^(b)	Production^(c)
Florida:
Bartow	0.9	1.0	2.3	2.3	1.1	1.1	2.5	2.4
New Wales	1.7	1.5	4.1	3.2	1.7	1.5	4.0	3.1
Riverview	0.9	0.8	1.7	1.6	0.9	0.8	1.8	1.6
Plant City^(d)	1.0	—	2.0	—
	4.5	3.3	10.1	7.1	3.7	3.4	8.3	7.1
Louisiana:
Faustina	—	—	1.6	1.3
Faustina^(d)					—	—	1.6	1.0
Uncle Sam	0.8	0.6	—	—	0.8	0.5	—	—
	0.8	0.6	1.6	1.3	0.8	0.5	1.6	1.0
Total	5.3	3.9	11.7	8.4	4.5	3.9	9.9	8.1


(c)	Bone Phosphate of Lime (“BPL”) is a traditional reference to the amount (by weight percentage) of calcium phosphate contained in phosphate rock or a phosphate ore body. A higher BPL corresponds to a higher percentage of calcium phosphate.


(tonnes in millions)	Reserve Tonnes^(a)(b)(c)		Average BPL^(d)	% P₂O₅	Reserve Tonnes^(a)(b)(c)		Average BPL^(d)	% P₂O₅
Active Mines
Four Corners^(f)	84.4		64.3	29.4	86.6		64.0	29.3
South Fort Meade	14.0		62.4	28.5	7.6		61.4	28.1
Wingate	28.7		63.0	28.9	26.2		62.1	28.4
Miski Mayo^(g)	93.8		65.7	30.1	90.4		65.7	30.1
Total Active Mines	220.9		64.6	29.6	210.8		64.4	29.5
Temporarily Idled
South Pasture	138.2		63.1	28.9	137.9		63.2	28.9
Planned Mining
East Ona^(h)	110.9		65.1	29.8	110.9		64.5	29.5
DeSoto	150.9	^(e)	64.1	29.3	149.2	^(e)	63.8	29.2
Total Planned Mining	261.8		64.5	29.5	260.1		64.1	29.3
Total Mining	620.9		64.3	29.4	608.8		64.0	29.3


(a)	Our ability to produce processed phosphates has been less than our annual operational capacity stated in the table above, except to the extent we purchase phosphoric acid. Factors affecting actual production are described in note (c) below.


(b)	Operational capacity is our estimated long-term capacity based on an average amount of scheduled down time, including maintenance and scheduled turnaround time, and product mix, and no significant modifications to operating conditions, equipment or facilities.


(c)	Actual production varies from annual operational capacity shown in the above table due to factors that include among others the level of demand for our products, maintenance and turnaround time, accidents, mechanical failure, product mix, and other operating conditions.


(d)	On ~~December 10, 2017,~~October 1, 2019, we temporarily idled our ~~Plant City, Florida~~Louisiana phosphates operations to accelerate the reduction of high phosphate ~~manufacturing facility.~~fertilizer inventories.


(tonnes in millions)	Annual Operational Capacity^(a)(b)	2018			2017			2016			Annual Operational Capacity^(a)(b)	2019			2018			2017
Facility	Annual Operational Capacity^(a)(b)	Production^(b)	Average BPL^(c)	% P2O5^(d)	Production^(b)	Average BPL^(c)	% P2O5^(d)	Production^(b)	Average BPL^(c)	% P2O5^(d)	Annual Operational Capacity^(a)(b)	Production^(b)	Average BPL^(c)	% P2O5^(d)	Production^(b)	Average BPL^(c)	% P2O5^(d)	Production^(b)	Average BPL^(c)	% P2O5^(d)

Four Corners^(f)(e)	7.0	6.9	62.2	28.5	6.4	62.4	28.5	5.3	63.2	28.9	7.0	6.5	62.8	28.7	6.9	62.2	28.5	6.4	62.4	28.5
South Fort Meade	5.5	4.2	63.1	28.9	4.4	63.6	29.1	4.2	63.0	28.8	5.0	4.2	61.6	28.2	4.2	63.1	28.9	4.4	63.6	29.1
South Pasture^(e)(f)	3.2	1.5	62.5	28.6	2.8	62.6	28.6	3.4	62.5	28.6	3.2	—	—	—	1.5	62.5	28.6	2.8	62.6	28.6
Wingate	1.5	1.6	61.3	28.1	1.4	62.5	28.6	1.3	63.1	28.9	1.5	1.5	63.5	29.1	1.6	61.3	28.1	1.4	62.5	28.6
North America	17.2	14.2	62.4	28.6	15.0	62.8	28.7	14.2	63.0	28.8	16.7	12.2	62.5	28.6	14.2	62.4	28.6	15.0	62.8	28.7

Miski Mayo^{(g) (h)}	4.0	4.1	64.9	29.7	—	—	—	—	—	—	4.0	4.0	64.7	29.6	4.1	64.9	29.7	—	—	—
Total	21.2	18.3	62.9	28.8	15.0	62.8	28.7	14.2	63.0	28.8	20.7	16.2	63.0	28.8	18.3	62.9	28.8	15.0	62.8	28.7


(a)	Annual operational capacity is the expected average long-term annual capacity considering constraints represented by the grade, quality and quantity of the reserves being mined as well as equipment performance and other operational factors.


(d)	The percent of P2O5 in the above table represents a measure of the phosphate content in phosphate rock or a phosphate ore body. A higher percentage corresponds to a higher percentage of phosphate content in phosphate rock or a phosphate ore body.


(e)	~~On August 31, 2018, we temporarily idled our South Pasture, Florida beneficiation plant for an indefinite period of time.~~


~~(f)~~	Production at the Four Corners mine includes rock mined at the South Pasture Extension Mine in Hardee County from September 2018 to December 2018.


(f)	On August 31, 2018, we temporarily idled our South Pasture, Florida beneficiation plant for an indefinite period of time.


(g)	With the closing of the Acquisition on January 8, 2018, we acquired an additional 40% economic interest in the Miski Mayo phosphate rock mine in the Bayovar region of Peru, bringing our aggregate interest to 75% in 2018. Their results are included in the Phosphates segment from the date of the Acquisition.


(h)	Annual operational capacity and production tonnes for Miski Mayo are presented on a wet tonne basis based on average moisture levels of 3.5% to 4.5% as it exits the drying process and is prepared for shipping. Operational capacity and production on a dry tonne basis would be 3.8 million tonnes and 3.9 million tonnes respectively.


(a)	Reserves are in areas that are fully accessible for mining; free of surface or subsurface encumbrance, legal setbacks, wetland preserves and other legal restrictions that preclude permittable access for mining; believed by us to be permittable; and meet specified minimum physical, economic and chemical criteria related to current mining and production practices.


(b)	Reserve estimates are generally established by our personnel without a third party review. There has been no third party review of reserve estimates within the last five years. The reserve estimates have been prepared in accordance with the standards set forth in Industry Guide 7 promulgated by the United States Securities and Exchange Commission (“SEC”).


(c)	Of the reserves shown, ~~494.8~~498.3 million tonnes are proven reserves, while probable reserves totaled ~~32.3~~20.1 million tonnes.


(d)	Average product BPL ranges from approximately 62% to 66%.


(e)	In connection with the purchase in 1996 of approximately 111.1 million tonnes of the reported DeSoto reserves, we agreed to (i) pay royalties of between $0.50 and $0.90 per ton of rock mined based on future levels of DAP margins, and (ii) pay to the seller lost income from the loss of surface use to the extent we use the property for mining related purposes before January 1, 2021.


(f)	The Four Corners reserves include the Ona West reserve tonnes.


(g)	We pay royalties to the government of Peru based on a percentage of net sales and final determined price. These royalty payments average approximately $6$7 million annually.


(h)	The East Ona reserves are expected to be mined through our South Pasture and Four Corners mine locations.