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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 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 2023, 2022 and 2021 consisted of the following:
| Years Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 86.4 |  |  | $ | 62.7 |  |  | $ | (12.7) |
State | 1.5 |  |  | 51.9 |  |  | 5.6 |
Non-U.S. | 357.4 |  |  | 770.4 |  |  | 386.9 |
Total current | 445.3 |  |  | 885.0 |  |  | 379.8 |
Noncurrent: |  |  |  |  |
Federal | $ | 0.3 |  |  | $ | 0.2 |  |  | $ | — |
State | — |  |  | — |  |  | — |
Non-U.S. | (3.0) |  |  | (0.7) |  |  | 110.0 |
Total noncurrent | (2.7) |  |  | (0.5) |  |  | 110.0 |
Deferred: |  |  |  |  |
Federal | $ | (35.4) |  |  | $ | 215.4 |  |  | $ | 141.9 |
State | (4.2) |  |  | 31.0 |  |  | 21.4 |
Non-U.S. | (226.0) |  |  | 93.4 |  |  | (55.4) |
Total deferred | (265.6) |  |  | 339.8 |  |  | 107.9 |
Provision for income taxes | $ | 177.0 |  |  | $ | 1,224.3 |  |  | $ | 597.7 |
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) | 2023 |  | 2022 |  | 2021
U.S. earnings (loss) | $ | 121.6 |  |  | $ | 1,587.8 |  |  | $ | 900.1 |
Non-U.S. earnings | 1,204.3 |  |  | 3,054.7 |  |  | 1,324.7 |
Earnings (loss) from consolidated companies before income taxes | $ | 1,325.9 |  |  | $ | 4,642.5 |  |  | $ | 2,224.8 |
Computed tax at the U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income taxes, net of federal income tax benefit | 0.4 | % |  | 1.1 | % |  | 1.2 | %
Percentage depletion in excess of basis | (4.9) | % |  | (1.8) | % |  | (1.1) | %
Impact of non-U.S. earnings | 8.7 | % |  | 5.8 | % |  | 6.3 | %
Change in valuation allowance | (1.7) | % |  | — | % |  | (0.3) | %
Non-U.S. incentives | (11.5) | % |  | (2.6) | % |  | (5.7) | %
Withholding tax | 6.3 | % |  | 1.6 | % |  | 3.3 | %
U.S. general basket foreign tax credits | (4.0) | % |  | — | % |  | — | %
Tax legislation change impacts | (1.6) | % |  | — | % |  | — | %
Undistributed earnings | 2.2 | % |  | — | % |  | — | %
Other items (none in excess of 5% of computed tax) | (1.6) | % |  | 1.3 | % |  | 2.2 | %
Effective tax rate | 13.3 | % |  | 26.4 | % |  | 26.9 | %
2023 Effective Tax Rate In the year ended December 31, 2023, 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. The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, by a benefit associated with non-U.S. incentives, 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 net benefit of $43.4 million. The net benefit relates to the following: $38.1 million related to true-up of estimates primarily related to our U.S. tax return, $24.4 million related to changes to valuation allowances in Brazil, and $11.6 million related to an increase in a U.S. deferred tax asset. The tax benefits are partially offset by a net tax cost of $29.3 million related to income tax expense on undistributed earnings, and $1.4 million of other miscellaneous costs. 2022 Effective Tax Rate In the year ended December 31, 2022, 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. The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, by a benefit associated with non-U.S. incentives, 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 net expense of $26.2 million. The net expense relates to the following: $29.0 million related to true-up of estimates primarily related to our U.S. tax return, $4.8 million related to changes to valuation allowances in Brazil, $4.0 million related to interest of effectively settled unrecognized tax benefits and $1.2 million of other miscellaneous costs. The tax expenses are partially offset by a net tax benefit related to $12.8 million of RSUs vested in CY22 above grant price. 2021 Effective Tax Rate In the year ended December 31, 2021, 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 the Esterhazy mine closure costs. The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, by a benefit associated with non-U.S. incentives, 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 net benefit of $0.6 million. The net expense relates to the following: $23.9 million related to true-up of estimates primarily related to our U.S. tax return and $20.4 million related to an increase in non-U.S. reserves. The tax expenses are partially offset by net tax benefits related to $43.7 million of Esterhazy mine closure costs and $1.2 million related to a benefit for withholding taxes related to undistributed earnings and other miscellaneous tax expenses. Deferred Tax Liabilities and Assets Significant components of our deferred tax liabilities and assets were as follows as of December 31:
| December 31,
(in millions) | 2023 |  | 2022
Deferred tax liabilities: |  |  |
Depreciation and amortization | $ | 490.2 |  |  | $ | 430.5 |
Depletion | 623.6 |  |  | 613.5 |
Partnership tax basis differences | 69.7 |  |  | 59.3 |
Undistributed earnings of non-U.S. subsidiaries | 29.3 |  |  | — |
Other liabilities | 97.0 |  |  | 37.6 |
Total deferred tax liabilities | $ | 1,309.8 |  |  | $ | 1,140.9 |
Deferred tax assets: |  |  |
Capital loss carryforwards | 14.9 |  |  | 3.6 |
Foreign tax credit carryforwards | 1,266.2 |  |  | 736.7 |
Net operating loss carryforwards | 514.4 |  |  | 255.8 |
Pension plans and other benefits | 17.8 |  |  | 14.3 |
Asset retirement obligations | 452.1 |  |  | 369.4 |
Disallowed interest expense under §163(j) | 11.5 |  |  | — |
Other assets | 468.6 |  |  | 413.2 |
Subtotal | 2,745.5 |  |  | 1,793.0 |
Valuation allowance | 1,421.9 |  |  | 909.9 |
Net deferred tax assets | 1,323.6 |  |  | 883.1 |
Net deferred tax assets/(liabilities) | $ | 13.8 |  |  | $ | (257.8) |
We have certain non-U.S. entities that are taxed in both their local jurisdiction and the U.S. As a result, we have deferred tax balances for both jurisdictions. As of December 31, 2023 and 2022, these non-U.S. deferred taxes are offset by approximately $220.5 million and $202.2 million, respectively, of anticipated foreign tax credits included within our depreciation and depletion components of deferred tax liabilities above. We have recorded a valuation allowance against the anticipated foreign tax credits of $220.5 million and $202.2 million for December 31, 2023 and 2022, respectively. Tax Carryforwards As of December 31, 2023, we had estimated carryforwards for tax purposes as follows: net operating losses of $1.8 billion, capital losses of $63.6 million, foreign tax credits of $1.3 billion and $4.4 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. Approximately $1.3 billion 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 indefinitely. Of the $1.3 billion of foreign tax credits, approximately $219.2 million have an expiration date of 2026, approximately $19.6 million have an expiration date of 2029, approximately $14.7 million have an expiration date of 2030 and approximately $14.8 million have an expiration date of 2033. 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 in the future. Due to current business operations and future forecasts, the Company has determined that no valuation allowance is required on its general basket foreign tax credits. As a result of changes in U.S. tax law due to the Tax Cuts and Jobs Act, the Company recorded valuation allowances against its branch basket foreign tax credits of $986.1 million as of December 31, 2023. As of December 31, 2023, we have not recognized a deferred tax liability for un-remitted earnings of approximately $4.3 billion from certain foreign operations because we believe our subsidiaries have invested the 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 unrecognized deferred tax liability on these reinvested earnings. As part of the accounting for the Tax Cuts and Jobs 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, 2023, the valuation allowance increased by $512.0 million, of which a $531.0 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits, and a $0.2 million increase related to changes in valuation allowances in other foreign jurisdictions. These increases to the valuation allowance were partially offset by a decrease of $12.7 million related to changes in valuation allowances and currency translation in Brazil, and $6.5 million changes in valuation allowances in other foreign jurisdictions. For the year ended December 31, 2022, the valuation allowance increased by $135.2 million, of which a $83.6 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits, a $13.2 million increase related to changes in valuation allowances and currency translation in Brazil, and $46.8 million changes in valuation allowances in other foreign jurisdictions. These increases to the valuation allowance were partially offset by a decrease of $1.5 million to net operating losses for certain U.S. states, and $7.0 million changes in valuation allowances in other foreign jurisdictions. For the year ended December 31, 2021, the valuation allowance increased by $91.7 million, of which a $111.2 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits. These increases to the valuation allowance were partially offset by a decrease of $13.9 million related to changes in valuation allowances and currency translation in Brazil, $2.4 million decrease to net operating losses for certain U.S. states, and $3.4 million changes in valuation allowances in other foreign jurisdictions. Changes to our income tax valuation allowance were as follows:
| Years Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Income tax valuation allowance, related to deferred income taxes |  |  |  |  |
Balance at beginning of period | $ | 909.9 |  |  | $ | 774.7 |  |  | $ | 683.0 |
Charges or (reductions) to costs and expenses | 512.0 |  |  | 135.2 |  |  | 91.7 |
Balance at end of period | $ | 1,421.9 |  |  | $ | 909.9 |  |  | $ | 774.7 |
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, 2023, we had $25.8 million of gross uncertain tax positions. If recognized, the benefit to our effective tax rate in future periods would be approximately $22.6 million of that amount. During 2023, we recorded net increases in our uncertain tax positions of $0.5 million related to certain U.S. and non-U.S. tax matters, of which $3.0 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, 2023, 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) | 2023 |  | 2022 |  | 2021
Gross unrecognized tax benefits, beginning of period | $ | 25.2 |  |  | $ | 124.6 |  |  | $ | 36.9 |
Gross increases: |  |  |  |  |
Prior period tax positions | 0.9 |  |  | 0.7 |  |  | 84.7 |
Current period tax positions | 3.0 |  |  | 3.0 |  |  | 3.0 |
Gross decreases: |  |  |  |  |
Prior period tax positions | (3.8) |  |  | (99.7) |  |  | — |
Currency translation | 0.5 |  |  | (3.4) |  |  | — |
Gross unrecognized tax benefits, end of period | $ | 25.8 |  |  | $ | 25.2 |  |  | $ | 124.6 |
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, 2023 and 2022 were $6.4 million and $5.0 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 U.S. and outside the U.S., 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 2017. 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 Internal Revenue Service for the tax years ended December 31, 2018 and December 31, 2020. 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. We are currently under audit by the Canada Revenue Agency for the tax year ended December 31, 2020. 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

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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