MOSAIC CO - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - MOSAIC CO	d626838dex991.htm
8-K - FORM 8-K - MOSAIC CO	d626838d8k.htm

The Mosaic Company

Earnings Conference Call –

Third Quarter 2013

November 5, 2013

Jim Prokopanko, President and Chief Executive Officer

Larry Stranghoener, Executive Vice President and Chief Financial

Officer

Laura Gagnon, Vice President Investor Relations

Exhibit 99.2

Safe Harbor Statement

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 acquisition of the Florida phosphate assets and certain related liabilities of CF

Industries, Inc. (“CF”) and the ammonia supply agreements with CF; the benefits of the transactions with CF; 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 proposed phosphate asset acquisition may be delayed or may not occur, including

delays arising from any inability to obtain governmental approvals of the transaction on the proposed terms and schedule and the ability to satisfy

other closing conditions; difficulties with realization of the benefits of the transactions with CF, including the risks that the acquired assets may not

be integrated successfully or that the cost or capital savings from the transactions may not be fully realized or may take longer to realize than

expected, regulatory agencies might not take, or might delay, actions with respect to permitting or regulatory enforcement matters that are

necessary for Mosaic to fully realize the benefits of the transactions including replacement of CF’s escrowed financial assurance funds, or the price

of natural gas or ammonia changes to a level at which the natural gas based pricing under one of the long term ammonia supply agreements with

CF becomes disadvantageous to Mosaic; customer defaults; the effects of our decisions to exit business operations or locations; 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, implementation of numeric water quality standards for the discharge of nutrients into

Florida waterways or possible efforts to reduce the flow of excess nutrients into the Mississippi River basin or the Gulf of Mexico; further

developments in judicial or administrative proceedings, or complaints that Mosaic's operations are adversely impacting nearby farms, business

operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or

increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of the Company's processes for managing its

strategic priorities; the ability of the Northern Promise joint venture among Mosaic, Ma'aden and SABIC to obtain project financing in acceptable

amounts and upon acceptable terms, the future success of current plans for the joint venture and any future changes in those plans; adverse

weather conditions affecting operations in Central Florida or the Mississippi River basin or the Gulf Coast of the United States, and including

potential hurricanes, excess rainfall or drought; actual costs of various items differing from management's current estimates, including, among

others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties, or the

liabilities Mosaic is assuming in the proposed phosphate assets acquisition; brine inflows at Mosaic's Esterhazy, Saskatchewan, potash mine or

other potash shaft mines; other accidents and disruptions involving Mosaic's operations, including 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.

Third Quarter Financial Highlights

$1.9 billion

$144 million

$0.29 diluted earnings per share

Includes $0.22 negative impact of notable items

$1,419

$523

Net Sales

Phosphates

Potash

$92

$58

Operating Earnings

Third Quarter Strategic Focus

The Company continues to execute well against its strategic

priorities:

Growth in phosphate cash flows through acquisitions, joint

ventures, as well as cost and sustaining capital reductions

Growth in potash cash flows through continued execution of

our expansion and cost and sustaining capital reduction

plans

Leveraging innovation through premium products

Focused on capital allocation through asset portfolio

reshaping

Strategic Portfolio Reshaping

Mosaic made several strategic decisions focusing and reshaping its

asset portfolio:

Argentina and Chile distribution exit; focus on Brazil

Planned sale of Hersey, Michigan, salt operation and closure

of potash operation

Ammonia contract and subsequent expensing of ammonia

FEED work

The Company will continue to:

Optimize and enhance its asset portfolio

Pursue opportunities to return capital to shareholders

Near-term Market Challenges to Continue

Soft pricing environment

Supply & demand driven

Lack of potash contracts and price discovery

Late North American Fall season

Cautious buyer behavior

Long-term Opportunity Remains Great

Yield growth required to keep up with demand

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

775

800

825

850

875

900

925

950

975

MT Ha

Mil Ha

Source: USDA and Mosaic

World Harvested Area and Average Yield

Actual Area

Forecast Area

Actual Yield

Required Yield

1980

-10 Yield Trend

Near Record Affordability

0.5

0.75

1.25

1.5

1.75

Plant Nutrient Affordability

Plant Nutrient Price Index / Crop Price Index

Affordability Metric

Average

Source: Green Markets, CME, USDA, AAPFCO, Mosaic

Stable Long-term Supply and Demand Outlook

Potash Production, Capacity and Operating Rate Forecast

Capacity

Production

Operating Rate

Source: Mosaic

40%

50%

60%

70%

80%

90%

100%

2000

2004

2008

2012

2016

2020

Positive Long-term Supply and Demand Outlook

Phosphate Production,

Capacity and Operating Rate Forecast

Source: Mosaic

65%

70%

75%

80%

85%

90%

95%

100

120

2000

2004

2008

2012

2016

2020

Capacity

Production

Op Rate

Financial Results Review

In millions, except per share amounts

Three Months Ended

September 30,

2013

September 30,

2012

Net Sales

$1,908.7

$2,645.7

Gross Margin

$386.9

$774.6

% of net sales

20.3%

29.3%

SG&A

$94.4

$114.8

Net Earnings Attributable to Mosaic

$124.4

$417.4

% of net sales

6.5%

15.8%

Diluted EPS

$0.29

$0.98

Effective Tax Rate

(5.7)%

30.4%

Cash Flow (Used in) Provided by

Operations

$(45.0)

$343.8

Cash and Cash Equivalents

$3,338.6

$3,548.5

Mosaic Financial Performance

Cash from Operations

Items impacting third quarter cash from operations:

Lower earnings

Higher final price deferred volumes

Higher payments with vendors

Lower customer prepayments

Strong cash flow in June of 2013

Accounts receivable timing

Potash Segment Highlights

Third quarter highlights:

In millions, except MOP price

Q3 2013

Q2 2013

Q3 2012

Net sales

$523

$974

$927

Gross Margin

$184

$389

$441

Percent of net sales

35%

40%

48%

Operating earnings

$92

$346

$398

Sales volumes

1.4

2.4

1.8

Production volume

2.0

2.2

1.5

Production operating rate

73%

81%

67%

Avg MOP selling price

$342

$366

$453

Net sales declined year over year as a result of lower shipment volumes and lower realized prices, driven by cautious

dealer behavior and delayed fall application.

Operating

earnings

include

loss

$48

million

planned

sale

the

Hersey,

Michigan

salt

operation

and

closure

of Hersey’s potash business, as well as a $9 million loss related to mineral rights settlement.

Phosphates Segment Highlights

Third quarter highlights:

In millions, except DAP price

Q3 2013

Q2 2013

Q3 2012

Net sales

$1,419

$1,646

$1,741

Gross Margin

$193

$279

$329

Percent of net sales

14%

17%

19%

Operating earnings

$58

$191

$246

Sales volumes

2.7

2.9

NA production volume

(a)

2.1

Finished product operating rate

88%

84%

85%

Avg DAP selling price

$436

$477

$533

(a)

Includes crop nutrient dry concentrates and animal feed ingredients

Lower gross margin year-over-year reflects lower finished product prices, only partially offset by lower raw material

costs, specifically ammonia and sulfur.

Operating

earnings

include

$75

million

loss

planned

exit

Argentina

and

Chile

distribution

and

write

off

of initial ammonia plant investments.

Phosphate Raw Material Trends

Ammonia

Sulfur

($/tonne)

Balance Sheet Update

We continue to have substantial cash and capital to

redeploy:

No impact to shareholder distribution plans from

announced phosphate acquisition

Debt issuance expectations

Share repurchase discussions

Financial Guidance Summary

MOSAIC CO - FORM 8-K - EX-99.2 - November 7, 2013

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