Slide 1: Earnings Conference Call – Fourth Quarter and Full Year 2014
The Mosaic Company Earnings Conference Call – Fourth Quarter and Full Year 2014 February 11, 2015 Jim Prokopanko, President and Chief Executive Officer Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations
Slide 2: Safe Harbor Statement
Click to edit Master title style 2 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 a
Slide 3: Key Messages
Click to edit Master title style 3 ▪ A strong finish to 2014 ▪ Results reflect leverage to upside ▪ Strategic initiatives on track Key Messages
Slide 4: Fourth Quarter Financial Highlights
Click to edit Master title style 4 Fourth Quarter Financial Highlights $1,611 $763 Net Sales Phosphates Potash $184 $206 Operating Earnings • $0.97 diluted earnings per share checkbld Includes $0.10 positive impact of notable items • $382 million in cash from operations $2.4 billion $365 million
Slide 5: Strong Demand Persists
5 Strong Demand Persists 2 P&K Demand square4 Industry finished 2014 with record potash and phosphate shipments. square4 Lean producer inventories. square4 Expect solid fundamentals in 2015. Factors to watch square4 Ag commodity prices square4 Currency trends 64.5-66.5 30 35 40 45 50 55 60 65 70 00
Slide 6: Phosphate Price History
320 370 420 470 520 570 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Tampa DAP Prices DAP - fob Tampaource: ultiple eekly ublicationsS M W P $/mt 6 Phosphate Price History 2 Mosaic acquires CF Industries’ phosphate business Mosaic announces phosphate production curtailment
Slide 7: Strategic Accomplishments
7 Strategic Accomplishments 2 Completed in fourth quarter 2014: square4 Successful proving run at Colonsay: checkbldExceeded expected capacity increase by over 40% checkbldNew Canpotex entitlement 40.6%, up from 38.8% square4 CF Industries’ phosphate integration completed: checkbldRealizing full tar
Slide 8: Progress on Ma'aden Joint Venture
Progress on Ma’aden Joint Venture 8 Ammonia Substation Building
Slide 9: Financial Results Review
Financial Results Review Mosaic
Slide 10: Phosphates Segment Highlights
Fourth Quarter Highlights: square4 The year-over-year increase in net sales is driven by higher realized finished product prices, partially offset by lower sales volumes. square4 The year-over-year increase in earnings reflects higher finished product selling prices and lower phosphate rock costs, p
Slide 11: Potash Segment Highlights
Fourth Quarter Highlights: • The increase in net sales was driven by higher sales volumes, partially offset by higher mix of international sales. • The year-over-year increase in operating earnings was driven by higher sales volumes and lower plant spending, partially offset by higher mix of interna
Slide 12: Balance Sheet and Capital Update
Balance Sheet and Capital Update $47 per Share 12 $0.4 $2.8 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 2008 2009 2010 2011 2012 2013 2014 I n B i l l i o n s Dividends Repurchases Transformed Balance Sheet: square4Returned $3.2B in 2014 square4~$190 million remaining under current share repurchase auth
Slide 13: New Segment Reporting Update
New Segment Reporting Update PotashPhosphates Current Potash Phosphates Future International Distribution Expected Outcomes/Benefits: square4 Increased transparency square4 Improved peer benchmarking square4Ease of modeling Process: square4Historical financials first part of March square4Q1’15 Guida
Slide 14: Financial Guidance Summary – Segments
Click to edit Master title style 14 Financial Guidance Summary Phosphates Guidance – 2015 Q1 Sales volume 2.8 to 3.1 million tonnes Q1 DAP selling price $440 to $465 per tonne Q1 Gross margin rate in the mid-teens Q1 Operating rate in the 80 to 85 percent range Potash Guidance – 2015 Q1 Sales volume
Slide 15: Financial Guidance Summary – 2015
Click to edit Master title style 15 Financial Guidance Summary Guidance – 2015 Total SG&A $360 - $380 million Capital Expenditures and Equity Investments $1.1 - $1.4 billion Effective Tax Rate Low to mid 20 percent range Phosphates Sales Volumes 14.5 to 15.0 million tonnes Potash Sales Volumes 8.5 t
Slide 16: Helping the World Grow the Food it Needs
Helping the World Grow the Food it Needs
Slide 17: Raw Material Cost Detail
Q4 2014 Percent Ammonia ($/tonnes) Realized in COGS $544 Average Purchase Price $627 Sulfur ($/ton) Realized in COGS $154 Average Purchase Price $146 Phosphate rock (realized in COGS) ('000 tonnes) U.S. mined rock 3,839 93% Purchased Miski Mayo Rock 236 6% Other Purchased Rock 56 1% Total 4,131 100%
Slide 18: Phosphate Raw Material Trends
$- $25 $50 $75 $100 $125 $150 $175 $200 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015F Realized Costs Market Prices $- $100 $200 $300 $400 $500 $600 $700 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015F Realized Costs Market Prices 18 Phosphate Raw M
Slide 19: Earnings Sensitivity to Key Drivers
(a) These factors do not change in isolation; actual results could vary from the above estimates (b) Assumes no change to KMAG pricing 2014 Q4 Actual Change 2014 Q4 Margin % Actual % Impact on Segment Margin Pre-Tax Impact EPS Impact Marketing MOP Price ($/tonne)(b) $295 $50 40% 14% $110 $0.21 Potas
Slide 20: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (February 2015) Million Tonnes DAP/MAP/TSP 2013R 2014E Oct Low 2015F Oct High 2015F Feb Low 2015F Feb High 2015F Comments China 21.5 21.6 21.8 22.1 21.8 22.1 Large but flat shipments in 2014. Forecast for 2015 unchanged. Moderate growth expected this yea
Slide 21: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (February 6, 2015) Muriate of Potash Million Tonnes (KCl) 2013R 2014E Oct Low 2015F Oct High 2015F Feb Low 2015F Feb High 2015F Comments China 11.0 13.8 12.4 12.6 12.7 13.1 Shipments surged 2.8 mmt last year (+1.0 mmt production and +1.8 mmt net imports). W