Attached files
| file | filename |
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| 8-K - FORM 8-K - MOSAIC CO | d8k.htm |
| EX-99.1 - PRESS RELEASE, DATED JANUARY 18, 2011 - MOSAIC CO | dex991.htm |
 The
New Horizon: A Fully Independent Mosaic
January 18, 2011
Jim Prokopanko
–
President and Chief Executive Officer
Larry Stranghoener
–
Executive Vice President and Chief Financial Officer
Rich
Mack
–
Executive
Vice
President
and
General
Counsel
Christine
Battist
–
Director,
Investor
Relations
www.mosaicconewhorizon.com
Exhibit 99.2 |
 Safe
Harbor Statement 2
This presentation contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements include, but are not limited to, statements
about the proposed transaction, the terms and the effect of the proposed transaction, the nature and impact of the proposed transaction,
capitalization of The Mosaic Company following completion of the proposed transaction, benefits of the
proposed transaction; future strategic plans and other statements about future financial
and operating results. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management
and are subject to significant risks and uncertainties. These risks and uncertainties include but are
not limited to risks and uncertainties arising from the possibility that the closing of the
transaction may be delayed or may not occur; the expected timeline for completing the transaction; difficulties with realization of the benefits of the
proposed transaction; the predictability and volatility of, and customer expectations about,
agriculture, fertilizer, raw material, energy and transportation markets that are subject to
competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients;
changes in foreign currency and exchange rates; international trade risks; changes in government
policy; changes in environmental and other governmental regulation, including greenhouse gas
regulation and implementation of the U.S. Environmental Protection Agency’s numeric water quality standards for the discharge of nutrients
into Florida lakes and streams; further developments in the lawsuit involving the federal wetlands
permit for the extension of the Company’s South Fort Meade, Florida, mine into Hardee
County, including orders, rulings, injunctions or other actions by the court or actions by the plaintiffs, the Army Corps of Engineers or others in relation
to the lawsuit, or any actions the Company may identify and implement in an effort to mitigate the
effects of the lawsuit; other difficulties or delays in receiving, or increased costs of, or
revocation of, necessary governmental permits or approvals; the effectiveness of the Company’s processes for managing its strategic priorities;
adverse weather conditions affecting operations in Central Florida or the Gulf Coast of the United
States, including potential hurricanes or excess rainfall; actual costs of various items
differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other
environmental obligations, or Canadian resource taxes and royalties; accidents and other disruptions
involving Mosaic’s operations, including brine inflows at its Esterhazy, Saskatchewan,
potash mine and other potential mine fires, floods, explosions, seismic events or releases of hazardous or volatile chemicals, as well as
other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed
with the Securities and Exchange Commission. Actual results may differ from those set forth in
the forward-looking statements. |
 Important Information
In connection with the proposed transaction, a registration statement on Form
S-4 that will include a proxy statement/prospectus for the stockholders
of The Mosaic Company will
be
filed
with
the
Securities
and
Exchange
Commission.
The
Mosaic
Company
will
mail
the
final
proxy
statement/prospectus
to
its
stockholders.
INVESTORS
AND
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE. IT WILL CONTAIN IMPORTANT INFORMATION.
Investors
and security holders may obtain a free copy of the proxy statement (when available)
and other documents filed by The Mosaic Company at the Securities and
Exchange Commission’s
web
site
at
http://www.sec.gov.
Certain Information Regarding Participants:
The Mosaic Company and its directors, executive officers and other members of its
management
and
employees
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies from its stockholders in connection with the proposed transaction.
Information
concerning the interests of The Mosaic Company’s participants in the
solicitation is set forth in The Mosaic Company’s proxy statements and
Annual Reports on Form 10-K, previously filed with the Securities and
Exchange Commission, and in the proxy statement relating to the transaction
when it becomes available. 3 |
 Transaction Overview and Benefits
•
Enables Cargill to accomplish several objectives:
–
Maintain its private company status while meeting the diversification and
distribution needs of the Charitable Trusts –
Enhance its credit profile and increase its financial flexibility
–
Align its compensation plans and management focus with the businesses Cargill
directly manages •
Enhances
Mosaic
long-term
strategic
and
financial
flexibility
by
facilitating
exit
of
majority
shareholder
•
Increases Mosaic’s public float -
improving attractiveness of stock
–
Greater stock liquidity
–
Removes Cargill overhang
–
Satisfies public float criteria for potential future inclusion in S&P 500
index •
Provides for orderly disposition of Cargill’s Mosaic shares
•
Number of outstanding Mosaic shares unchanged; no dilution to earnings per
share •
Mosaic’s robust balance sheet remains intact and operations unchanged
•
Cargill remains confident about Mosaic’s future
4
Mosaic well positioned to capitalize on unique competitive
advantages & positive industry outlook |
 Transaction Structure
5
Step 1:
Recapitalization
•
Mosaic to recapitalize its
shares into three classes
–
Common shares, Class A
shares and Class B shares
–
Class B shares are high-
vote shares solely with
respect to the election of
directors to comply with tax
rules regarding split-offs
–
Class A and Class B
shares will not trade
publicly
Step 2:
Split-Off and Debt
Exchange
•
Cargill exchanges
approximately 179 million
Mosaic shares in a split-off
transaction with the
Charitable Trusts and other
participating Cargill
shareholders
•
Cargill expected to
exchange its remaining
approximately 107 million
Mosaic shares with Cargill
debt holders in one or more
debt for equity exchanges
Step 3:
Orderly Disposition
•
An orderly disposition of
shares
–
Up to approximately 157
million shares expected to
be distributed in the first 15
months following Closing,
including approximately
107 million shares to be
held by Cargill debt
holders and approximately
50 million shares to be
held by the Charitable
Trusts
Cargill to distribute its ~286 million share stake in Mosaic.
Transaction has three key steps:
Share amounts to be exchanged with Cargill shareholders and to be exchanged with
debt holders represent estimates. |
 Step
1: Recapitalization •
Cargill’s ~286 million Mosaic shares will be recapitalized into three new
classes to comply with tax rules regarding tax-free
split-offs. –
Approximately 179 million shares are expected to be distributed to Cargill’s
shareholders •
Represents
a
voting
interest
of
at
least
80%
solely
with
respect
to
the
election
of
Mosaic
directors
–
Cargill’s
remaining
107
million
shares
are
expected
to
be
exchanged
with
Cargill’s
debt
holders
6
2.
Class
A
Restricted
Shares
–
~60
million
shares
•
Same voting and economic rights as common shares
•
Subject to transferability restrictions and not publicly traded
3. Class
B
Restricted
Shares
–
~111
million
shares
•
10 votes per share solely for election of Mosaic’s directors, otherwise same
voting and economic rights as common shares
•
Subject to transferability restrictions and not publicly traded
•
Identical to Mosaic’s existing publicly traded common stock
1.
Common Shares –
~115 million shares
•
Number of outstanding Mosaic shares remains ~446 million and transaction not
dilutive to EPS
•
No change to economic rights of common stock
Amount of shares to be exchanged with Cargill shareholders and debt holders
represent estimates |
 Step
2: Split-Off The Mosaic Company
~446 million shares
Current Mosaic Public Float
~160 million shares
Cargill
~286 million shares
115 M Common, 60 M Class A,
111 M Class B
Exchanging Cargill Shareholders
~179 million shares
8 M Common, 60 M Class A,
111 M Class B
Cargill
~107 million shares
(expected to be exchanged
with Cargill debt holders)
All Common
Other Cargill
Shareholders
~69 million shares
All Class B
Charitable Trusts
~110 million shares
8 M Common, 60 M Class A,
42 M Class B
7
Amount of shares to be exchanged with Cargill shareholders and debt holders
represent estimates |
 Step
3: Orderly Disposition •
Up to approximately 157 million Mosaic shares expected to be sold following
recap/split-off: –
Cargill debt holders (approximately 107 million shares received in debt for equity
exchanges) –
Charitable Trusts (approximately 50 million shares)
•
Initial
Formation
Offering
to
occur
at
closing
of
split-off:
–
Expected to consist of at least half of the 157 million shares
–
Charitable Trusts entitled to sell at least 7 million shares
–
Cargill debt holders to sell the remainder
–
Expected to bring Mosaic’s public float above 50%, satisfying public float
criteria for potential inclusion in the S&P 500 •
Second
Formation
Offering
to
occur
upon
expiration
of
Initial
Formation
Offering
lock-ups
(expected
6
–
9
months
after
Closing):
–
Charitable Trusts entitled to sell at least 7 million shares
–
Cargill debt holders expected to sell remainder of the 107 million shares not sold
in the Initial Formation Offering •
If
Charitable
Trusts
have
sold
less
than
approximately
50
million
shares
in
the
first
two
Formation
Offerings,
Mosaic
may
conduct
up
to two more underwritten, public Formation Offerings
•
One-third of remaining Mosaic shares held by Charitable Trusts (~60 million)
and other Cargill shareholders (~69 million) become transferrable each year
and eligible to be sold in demand registrations in three equal annual installments beginning on the 2.5 year
anniversary of close of Initial Formation Offering
•
Mosaic may grant early releases from the lock-up after the 2-year
anniversary of the Closing 8
Formation Offerings – Within 15 months after Closing
Post-Formation Offerings – 2+ years after Closing |
 Timing
of Closing and Formation Offerings •
Proxy Statement to be filed with the Securities and Exchange Commission in early
February 2011.
•
Mosaic to call Special Meeting of Stockholders to seek approval of the transaction
from minority (non-Cargill) shareholders approximately one month after
Proxy Statement has been cleared by the SEC.
•
Closing of split-off, the initial debt exchange and the Initial Formation
Offering will occur within 60 days of shareholder approval, unless extended
by parties.
•
Closing and Initial Formation Offering expected in second quarter of calendar
2011.
•
Second Formation Offering (and others, if needed) to occur upon the expiration of
the applicable lock-up period(s) within 15 months
post-closing. 9 |
 Governance and Corporate Matters
•
Governance
Agreements
have
been
entered
into
with
the
Charitable
Trusts
and
each
Cargill
shareholder who is expected to receive a 5 percent or greater ownership interest in
Mosaic after the split-off:
–
Governance
Agreements
provide
for
certain
standstill,
voting
and
other
restrictions
that
afford
considerable
protection
for
Mosaic common shareholders
•
Common Stock Structure:
–
Economic rights the same across all share classes
–
Facilitates orderly exit of Cargill as a majority shareholder and creates a
non-majority share structure •
Charitable Trusts expected to have largest voting percentage (for matters other
than election of directors) after the Initial Formation Offering, but not a
majority –
Mosaic’s Board of Directors may consider submitting a proposal to stockholders
to convert high vote Class B Shares into regular voting Class A Shares
•
Certain Conditions Regarding Mosaic’s Corporate Activities:
–
Mosaic subject to agreements with Cargill and/or the Charitable Trusts would have
to be factored into certain corporate initiatives for 2 years. For
instance: •
Certain rules apply to Mosaic in merger and acquisition activities
•
Generally restricted from doing share repurchases from public shareholders for 2
years •
Ability
to
issue
new
equity
subject
to
a
basket
of
approximately
40
million
shares
–
Mosaic does not expect these agreements to have any material impact on operations
or execution of business strategy •
No Current Plans to Change Composition of Mosaic’s Board of Directors
10 |
 Approvals and Other Considerations
Completed Actions:
–
Transaction reviewed and approved by Special Committee (comprised entirely of
independent directors) of Mosaic’s Board of Directors
–
Approved by Cargill’s Board of Directors and the Charitable Trusts
–
Private Letter Ruling issued by IRS regarding tax-free nature of
transaction Pending Approvals:
–
Approval by majority of Mosaic's minority (i.e., non-Cargill)
shareholders –
Other
customary
regulatory
approvals
–
e.g.,
Hart-Scott-Rodino
Break-Up Fee:
–
Cargill reserves the right to terminate transaction at any time prior to the
Initial Formation Offering –
If terminated, $200 million to be paid to Mosaic’s public shareholders under
certain cancellation conditions
11 |
 Best
Positioned Company in Crop Nutrient Sector •
Largest
combined
phosphate
and
potash
player
in
the
world
–
poised
to
benefit
from strong current and projected industry fundamentals
•
Rock solid balance sheet with large net cash position
•
Strong operating cash flows provides ample flexibility and firepower
•
Experienced and respected management team
12
Momentum Continues in 2011 |
 Strategic Priorities
Mosaic’s business is driven by strong long-term industry fundamentals and
we have a clear strategy to capitalize on this growth opportunity:
•
Potash
–
Grow
Volume
–
Aggressive expansion plans underway to grow flagship business and continue as one
of the world’s preeminent potash companies
–
Economically
attractive
brownfield
expansions
–
Significant potash reserves
•
Phosphates
–
Grow
Value
–
Operational excellence focus to maintain low cost position
–
Leverage scale and geographic location advantages
–
Significant phosphate reserves
•
International
distribution
footprint
synergistic
with
North
American
production
assets
13
We Help the World Grow the Food It Needs |
 Key
Takeaways •
Mosaic
to
become
fully
independent
company;
significant
investor
interest
in
our
sector
and
in
Mosaic
means
sufficient demand exists to expand our shareholder base
•
Mosaic’s vision is to be recognized as the world’s best crop nutrition
company; existing business strategy and overall performance is driving us
toward that goal •
Transaction provides Mosaic with a free hand to control its own destiny, improving
Mosaic’s long-term strategic and financial flexibility
•
Transaction
has
been
well
thought
out
and
provides
for
an
orderly
disposition
of
shares
–
increasing
public
float and attractiveness of Mosaic stock
–
Removes uncertainty of majority shareholder
–
No change in number of shares outstanding
–
No dilution to EPS
•
No change in the attractive underlying fundamentals of our business:
–
No impact on operations
–
Robust balance sheet remains intact, no impact on operating potential
–
No expected change in credit ratings
•
Mosaic is well positioned to capitalize on positive outlook for the industry and
create significant shareholder value.
14 |
 Q&A |
 Appendix |
 Capital Structure Post-Recapitalization
Current
1. Recapitalization
2. Split-off
Common
%
Common
Class A
Class B
Common
Class A
Class B
Economic
%
Voting %
Public shareholders
160
36%
160
160
36%
11%
Cargill
286
64%
115
60
111
107
24%
7%
Charitable trusts
8
60
42
25%
34%
Other Cargill shareholders
69
15%
48%
Total
446
100%
275
60
111
275
60
111
100%
100%
3. Orderly Disposition -
Pro forma for all Formation Offerings
Common
Class A
Class B
Economic %
Voting %
Public
shareholders
-
Current
160
36%
11%
Public
shareholders
-
New
157
35%
11%
Public
shareholders
-
Total
317
71%
22%
Charitable trusts
18
42
14%
30%
Other Cargill shareholders
69
15%
48%
Total
317
18
111
100%
100%
Split-off
Requirements
~40%
economic
value
>80%
voting
for
board
Formation offering
in first 15 months:
Up to approximately
157
mm
shares
Possible post-
formation
offerings after 2
years
129
mm
shares
17
Share
amounts
to
go
to
exchanging
Cargill
shareholders
and
to
be
exchanged
with
debt
holders
represent
estimates.
Actual to be based on Mosaic share price and Cargill valuation at time of
split-off |
 |