Slide 1: The Mosaic Company
The Mosaic Company Citi's 2015 Basic Materials Conference Joc O’Rourke, President and Chief Executive Officer December 2, 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 the Ma’aden joint venture), the a
Slide 3: Mosaic: High Quality Assets
Mosaic: High Quality Assets 3
Slide 4: Mosaic: Strong Balance Sheet
Mosaic: Strong Balance Sheet Committed to retaining investment grade rating and maintaining flexibility to capitalize on opportunities • Targeted liquidity buffer of $2.5 billion – Current liquidity of $2.8 billion – Mix of committed lines to cash may shift • Targeted adjusted debt* to adjusted EBIT
Slide 5: Mosaic: Operational Excellence
Mosaic: Operational Excellence $160 $150 50% $45 Less/ Tonne $140 60% 70% $120 80% $100 $105 90% $80 100% $60 110% $40 120% $20 130% $0 140% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015* MOP Cash Cost/Production Tonne Inverse of Operating Rate * Q3 2015 includes $20 / tonne in bri
Slide 6: Mosaic: History of Innovation
Mosaic: History of Innovation 1,800 MicroEssentials® 18% 1,600 16% 1,400 14% Thousand Tonnes 1,200 12% 1,000 10% 800 8% 600 6% 400 4% 200 2% ‐ 0% 2011 2012 2013 2014 2015 YTD* MicroEssentials® sales volume MicroEssentials® % of phosphate product volumes * As of September 30, 2015 Source: Mosaic 6
Slide 7: Mosaic: Effective Capital Management
Mosaic: Effective Capital Management Capital Allocation: Three Year Summary* ($ in billions) Total: $11.6 Billion 18% Maintenance Organic Growth 40% 13% Investment Commitments 29% Return to Shareholders (dividends & repurchases) A Balanced Approach to Capital Allocation * Q4’12 through Q3’15 Source:
Slide 8: Mosaic: Strong Cash Generation
Mosaic: Strong Cash Generation $7.00 $525 $6.00 $450 Operating Cash / Share Average MOP price $5.00 $375 $4.00 $300 $3.00 $225 $2.00 $150 $1.00 $75 $0.00 $0 2012 2013 2014 2015 TTM Net cash provided by operating activities per share Average MOP price Source: Mosaic 8
Slide 9: Industry: New Challenges
Industry: New Challenges
Slide 10: Agriculture: Constant, Growing Demand
Agriculture: Constant, Growing Demand Indexed Fertilizer and Crop Prices Index Commodity Prices Plant Nutrient Affordability 2014 Q1=100 Plant Nutrient Price Index / Crop Price Index 120 1.25 110 Source: Weekly Price Pub lications, CME, Less Affordable USDA, AAPFCO, Mosaic 100 90 1.00 80 70 60 0.75
Slide 11: Agriculture: Declining Farm Income
Agriculture: Declining Farm Income Billion $ U.S. Net Cash Farm Income Debt:Asset 140 24% 120 22% 100 20% 80 18% 60 16% 40 14% 20 12% 0 10% 80 85 90 95 00 05 10 15F Net Cash Farm Income Debt:Asset • Net Cash Income is the sum of crop and livestock receipts, direct government payments and other farm-
Slide 12: Macro: Currency Volatility
Macro: Currency Volatility Bringing costs of production down …… …… and costs for customers up. Canada Brazil 1.1 4.5 1.0 4.0 ‐25.6% 3.5 0.9 3.0 0.8 2.5 0.7 2.0 81.4% 0.6 1.5 Russia China 0.035 6.5 0.030 6.4 ‐53.5% 0.025 6.3 0.020 6.2 0.015 6.1 2.4% 0.010 6.0 Belarussia India 0.14 70 0.12 65 0.10 ‐52
Slide 13: Macro: Brazil Economy
Macro: Brazil Economy Farm Credit History Soybean Prices BRL billion USD Bu Reais Bu 200 16% 18 36 180 14% 16 32 160 60 24 12% 140 14 28 120 100 Brazil: Credit + Stable Soybean Prices = 19 20 10% 8% 12 24 80 60 Strong H2 116 133 128 6% 4% 10 8 20 16 40 94 20 2% 6 12 0 0% 4 8 2012/13 2013/14 2014/15
Slide 14: Macro: Near record demand for P & K
Macro: Near record demand for P & K MMT Product Global Phosphate Shipments Global Potash Shipments DAP/MAP/NPS/TSP Mil Tonnes KCl 61-63 70 66-68 65 Source: CRU and Mosaic 65-66 Source: CRU and Mosaic 59.1 65 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 05 06 07 08 09 10 11 12 13 14 15E 16F 00 01 02
Slide 15: Potash: New Capacity
Potash: New Capacity 2014 2020F Capacity 20 million tonnes 29 million tonnes 87% 81% Op Rate New capacity from: K+S, MOS, POT, AGU Capacity 23 million tonnes 27 million tonnes 99% 93% Op Rate New capacity from: EuroChem, Uralkali, Belaruskali, Turkmenkhimija Capacity 66 million ton
Slide 16: Potash: Supply Reductions and Curtailments
Potash: Supply Reductions and Curtailments* Permanent Curtailments Closures Capacity 4Q/2015 Producer 2014-2018 (in tonnes) Producer (in tonnes) Hersey 100K Mosaic ~500K Mosaic Carlsbad MOP 500K Potash Corp 500K Potash Corp Penobsquis 800K Uralkali 300K Uralkali Solikamsk 2 2,400K BPC 520K TOTAL ~1.
Slide 17: Phosphate: Balanced S&D
Phosphate*: Balanced S&D 2014 2020F Capacity 29 million tonnes 31 million tonnes Op Rate 87% 87% Capacity 6 million tonnes 9 million tonnes Op Rate 81% 90% Capacity 3 million tonnes 6 million tonnes Op Rate 83% 87% Capacity 73 million tonnes 81 million tonnes Demand 61
Slide 18: Compelling Free Cash Flow Growth Even at Today's Nutrient Prices
Compelling Free Cash Flow Growth Even at Today’s Nutrient Prices Free cash flow* positive even at current low prices Benefits of investments expected to drive meaningful growth in 2017 Significant upside leverage to higher prices * Free cash flow reconciliation in the appendix. 18
Slide 19: Long Term
Long Term Mosaic ay
Slide 20: And The Long-term Trend Is Up
And The Long-term Trend Is Up World Harvested Area and Average Yield Mil Ha MT Ha 975 4.00 Source: USDA and Mosaic 950 3.75 925 3.50 900 3.25 875 3.00 850 2.75 825 2.50 800 2.25 775 2.00 750 1.75 80 85 90 95 00 05 10 15F 20F 25F 30F Actual Area Forecast Area Actual Yield Required Yield 1980-12 Yield
Slide 21: My Role
My Role Build on Mosaic’s Track Record of Success: Execution Smart Investments Environmental Stewardship & Safety Prudently Manage Capital Grow Value for Mosaic’s Shareholders 21
Slide 22: Thank you
Thank you
Slide 23: Reconciliation: Free Cash Flow
Reconciliation: Free Cash Flow In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company has presented free cash flow, a non-GAAP financial measure. Generally, a non-GAAP financial measure is a supplemental numerical measure of
Slide 24: Non-GAAP Reconciliation: Adjusted Debt to Adjusted EBITDA
Non-GAAP Reconciliation: Adjusted Debt to Adjusted EBITDA EBITDA Calculation Estimated Estimated Estimated US$ Millions CY2017* CY2016* CY2015 at Q3* CY2014 CY2013 Operating Earnings $ 1,312 $ 1,340 + Depreciation, depletion & amortization 751 656 + Equity Earnings (2) 15 EBITDA $ 2,430 $ 2,199 $ 2,
Slide 25: 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