Slide 1: The Mosaic Company Second Quarter 2016
The Mosaic Company Second Quarter 2016
Slide 2: Forward-looking statements
This document 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 Wa’ad Al Shamal Phosphate Company (also known as MWSPC) and other proposed or pending future transaction
Slide 3: Agriculture: Declining Farm Income
Agriculture: Declining Farm Income Source: USDA 3 0 20 40 60 80 100 120 140 160 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16F Bil $ U.S. Net Cash Income Source: USDA • Net Cash Income is the sum of crop and livestock receipts, direct government payments and other farm-related income (e.g
Slide 4: Crop Nutrient Affordability a Significant Tailwind for Farmers
Crop Nutrient Affordability a Significant Tailwind for Farmers Based on actual market prices Less A ffordable M ore A ffordable 4 0.50 0.75 1.00 1.25 1.50 1.75 05 06 07 08 09 10 11 12 13 14 15 16 Plant Nutrient Affordability Plant Nutrient Price Index / Crop Price Index Affordability Metric Average
Slide 5: Macro: Brazil Economy
Macro: Brazil Economy Main concern: ongoing credit issues Source: Mosaic 5 10 14 18 22 26 30 34 38 4 6 8 10 12 14 16 18 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Reais Bu US$ Bu Source: CME and Forex Soybean Prices Monthly Average of Front Month Contract US$ Bu Reais Bu
Slide 6: Macro: Good Demand for P & K
Macro: Good Demand for P & K 6 Demand Is Not the Problem 65-66 30 35 40 45 50 55 60 65 70 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E 16F Global Phosphate ShipmentsMMT Product DAP/MAP/NPS*/TSP Source: CRU and Mosaic * NPS products containing 45 or more combined units of N and P2O5 59-60 25 30 3
Slide 7: Potash: Optimizing Value
Potash: Optimizing Value 7Source: Mosaic $267 $267 $291 $295 $288 $280 $265 $254 $207 $122 $89 $‐ $50 $100 $150 $200 $250 $300 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Realized Average MOP Price MOP Cash Cost Per Production Tonne 1 1 Excluding realized mark‐to‐market g
Slide 8: Mosaic Phosphates: Operational Excellence
$39 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2011 2012 2013 2014 2015 D o l l a r s / T o n n e Mining Cash Costs/Tonne of Phosphate Rock Mosaic Phosphates: Operational Excellence Source: Mosaic 8
Slide 9: Phosphates: Improving Profitability in H2
0% 5% 10% 15% 20% 25% $‐ $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016F Q3‐Q4 2016F Avg. GM % GM % Range Realized DAP Average Price DAP Stripping Margin Phosphates: Improving Profitability in H2 9 Gross margin improvi
Slide 10: Mosaic: History of Innovation
Mosaic: History of Innovation Source: Mosaic 10 0% 5% 10% 15% 20% 25% ‐ 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2011 2012 2013 2014 2015 T h o u s a n d T o n n e s MicroEssentials® sales volume MicroEssentials® % of phosphate product volumes
Slide 11: Mosaic: Effective Capital Management
Mosaic: Effective Capital Management Source: Mosaic 11 * 2013 through 2015 18% 13% 29% 40% Capital Allocation: Three Year Summary* Maintenance Organic Growth Investment Commitments Return to Shareholders (dividends & repurchases) ($ in billions) Total: $11.5 Billion A Balanced Approach to Capital Al
Slide 12: Taking Action
Taking Action 12 Working to optimize cash flow. Targets: Capital spending, down $200-300 million in 2016 Cost reductions, down another $75 million Ongoing asset review Positioning the company for upside leverage to higher prices.
Slide 13: Long Term
Long Term 14
Slide 14: Yield Growth Required To Keep Up With Demand
Yield Growth Required To Keep Up With Demand And The Long-term Trend Is Up 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 750 775 800 825 850 875 900 925 950 975 80 85 90 95 00 05 10 15F 20F 25F 30F MT HaMil Ha Actual Area Forecast Area Actual Yield Required Yield 1980-12 Yield Trend Source: USDA
Slide 15: Mosaic's Focus
Mosaic’s Focus Build on Mosaic’s Track Record of Success: Execution Smart Investments Environmental Stewardship & Safety Prudently Manage Capital Grow Value for Mosaic’s Shareholders 15
Slide 16: Thank you
Thank you
Slide 17: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (May 4, 2016) Muriate of Potash Million Tonnes (KCl) 2014R 2015R Feb Low 2016F Feb High 2016F May Low 2016F May High 2016F Comments China 13.8 15.9 13.4 13.7 13.6 13.8 The demand outlook remains positive, but shipments are projected to drop this year as a r
Slide 18: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (May 4, 2016) Million Tonnes DAP/MAP/NPS*/TSP 2014 2015E Feb Low 2016F Feb High 2016F May Low 2016F May High 2016F Comments China 21.4 19.6 20.6 20.9 20.0 20.2 We have tempered expectations for a large rebound in shipments this year based on continued de
Slide 19: Phosphate: Balanced S&D
Phosphate*: Balanced S&D 2015 72 million tonnes 60 million tonnes 84% 2020F 81 million tonnes 69 million tonnes (2.7% CAGR) 88% 6 million tonnes 75% 9 million tonnes 90% 32 million tonnes 86% 32 million tonnes 87% Capacity Op Rate Capacity Op Rate Capacity Demand Op Rate
Slide 20: Potash: No gross supply/demand imbalance
2015 68 million tonnes 61 million tonnes 90% 2020F Capacity Op Rate Capacity Op Rate Capacity Op Rate 77 million tonnes 68 million tonnes (2.3% CAGR) 89% 23 million tonnes 95% 28 million tonnes 93% 22 million tonnes 87% 26 million tonnes 82% Potash: No gross supply/demand
Slide 21: Potash: Currency Swing Exacerbating Price Movement
0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 Canada 0.04 0.06 0.08 0.10 0.12 Belarussia 0.010 0.015 0.020 0.025 0.030 0.035 Russia 2.0 2.5 3.0 3.5 4.0 4.5 Brazil 6.1 6.3 6.5 6.7 China 58.0 63.0 68.0 India Potash: Currency Swing Exacerbating Price Movement Source: Factset Bringing costs of production down
Slide 22: Potash: Supply Reductions and Curtailments
Potash: Supply Reductions and Curtailments* Producer Reduced / Closed 2014-2018 Capacity (in tonnes) Mosaic Hersey Carlsbad MOP Colonsay re‐scale 100K 500K 800K Potash Corp New Brunswick 1,800K Uralkali Solikamsk 2 50% of 2,400K ICL Boulby MOP 900K Intrepid Carlsbad East & West MOP 700K TOTAL ~7 MM
Slide 23: Source Disclosure
Source Disclosure Slide 16, Closure Sources: Press release, "The Mosaic Company Reports Third Quarter 2013 Results", November 5, 2013 Press release, "The Mosaic Company Reports Second Quarter 2014 Results", July 31, 2014 Press release, "PotashCorp Reports 2015 Third‐Quarter Earnings of $0.34 per Sha