On December 19, 2025, we entered into an agreement to sell our Carlsbad potash mine in New Mexico for $20 million, subject to adjustment, along with a deferred payment of $10 million payable in three installments from 2029 to 2031. The decision to divest Carlsbad supports our strategic focus on our core potash assets in Canada. The disposal group was classified as held for sale as of December 31, 2025, with fair value determined based on the terms of the sales agreement, resulting in an aggregate carrying amount of approximately $73.5 million of assets and $55.3 million of liabilities as of that date (see Note 26 of our 10-K Report). The Carlsbad disposal group is included in the Potash reportable segment. The aggregate carrying value of assets held for sale as of December 31, 2025 included $184.1 million of property, plant and equipment, net, and $74.4 million of accounts receivable, net, inventories, net, and other assets, offset by a valuation allowance of $185.0 million. During the first quarter of 2026, the expected net sales price was adjusted for working capital settlements and the present value of the deferred payment. The transaction closed on April 30, 2026, and we received cash proceeds of approximately $2 million and the deferred payment of $10 million. The total impairment recognized on the Carlsbad disposal group was approximately $191.2 million, consisting of $185 million recognized during the quarter ended December 31, 2025 and an additional $6.2 million recognized during the second quarter of 2026, both recorded as Loss on assets to be sold in the Condensed Consolidated Statements of Earnings (Loss).

In connection with the transaction, the buyer executed replacement surety bonds totaling approximately $82 million with applicable regulatory agencies for guarantees that were in place prior to the transaction. We are not the named principal on these bonds and have no direct obligation to the regulatory agencies; rather, we provided credit support to the surety in the form of an indemnity of up to $50 million which is subject to call only after the buyer's posted collateral has been drawn. Our maximum indemnity exposure steps down by one-third following each year over a three-year period as the buyer funds cash collateral to the surety and terminates in full on the third anniversary of closing. Based on the structure of the arrangement — including its limited three-year duration, the buyer's contractual cash-collateral funding obligation, and the step-down of our indemnity — we concluded that the fair value of this obligation is not material.

During March 2026, we committed to a plan to divest the Araxá mining and chemical complex in Brazil and classified the disposal group as held for sale. As part of our ongoing portfolio optimization efforts, we determined that divesting the Araxá complex would allow us to focus capital and resources on higher-return opportunities within our global phosphate operations. We expect to complete the sale within one year of classification. Upon classification, the disposal group was measured at the lower of carrying value or fair value less costs to sell, resulting in an impairment charge of approximately $233 million recorded in Loss on assets to be sold in the Condensed Consolidated Statements of Earnings (Loss). No additional impairment was recognized during the second quarter of 2026. A reclassification of the related foreign currency translation gain (loss)in stockholder's equity is expected upon closing. The Araxá disposal group is included in the Mosaic Fertilizantes reportable segment.

The fair value of the Araxá disposal group was determined using market participant assumptions, including indicative pricing received from potential buyers. The measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs, including expected sales prices and estimated costs to sell. Changes in these assumptions may result in additional adjustments to the recognized impairment. We evaluate the fair value less costs to sell of the disposal group at each reporting date. Based on its assessment as of June 30, 2026, we determined that no change to the previously recorded valuation allowance was required.

During March 2026, in connection with the decision to divest the Araxá mining and chemical complex, we also idled the related mining activities at the Patrocínio complex in Brazil for the foreseeable future. The mine has been placed in care and maintenance mode with minimal staffing as we evaluate strategic alternatives, including potential exploration of other minerals.

Actions to idle the facilities resulted in pre‑tax charges of approximately $159 million during the three months ended March 31, 2026, recorded in other operating expense in the Condensed Consolidated Statements of Earnings (Loss). These charges consisted of approximately $72 million for contract termination costs, which we do not expect to increase significantly in future periods, $56 million for the write-off of property, plant and equipment, $21 million write‑off of inventory and other assets, and $10 million for severance and other employee-related costs. This write-off related primarily to construction in progress and other specialized mining assets at the Patrocínio complex that we determined, in connection with the idling decision, would no longer be utilized and have no alternative use. These charges were recognized in the first quarter of 2026 and are included within the Mosaic Fertilizantes reportable segment. Consistent with our determination that these assets would no longer be utilized, we also revised our estimates of the remaining useful lives of the other property, plant and equipment at the Patrocínio complex. This resulted in our recognizing accelerated depreciation of approximately $26 million and $52 million during the three and six months ended June 30, 2026, respectively, and care and maintenance costs of approximately $13 million and $37 million, respectively. We have determined that care and maintenance costs represent other associated costs of these exit and disposal activities; however, we are unable to reasonably estimate the total amount of such costs to be incurred in future periods, as they are contingent upon the timing of the anticipated completion of the Araxá sale. Care and maintenance activities are expected to continue through the anticipated completion of the Araxá sale.

Activity in the related exit cost liabilities during the second quarter was limited to an immaterial amount of cash settlements of contract termination and severance obligations in the ordinary course, and there were no material changes in estimates. We expect cash settlements of these obligations by the end of 2026 which will result in a reduction of these liabilities.