Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Investor Day (March 2015)
130 slides from Mosaic Company (the)'s investor day presentation, Mar 31, 2015
Slide 1: Mosaic Analyst Day March 31, 2015
Mosaic Analyst Day March 31, 2015
Slide 2: Safe Harbor
Safe Harbor 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 acquisition
Slide 3: Mosaic's Strategic Momentum
Mosaic’s Strategic Momentum Jim Prokopanko President and CEO
Slide 4: Mosaic's vision: world's leading crop nutrition company
Mosaic’s vision… To be the world’s leading crop nutrition company Since our last analyst day, 18 months ago, a lot has changed in our industry and at Mosaic—and those changes have put Mosaic in leadership positions
Slide 5: A Transformative 18 Months: Progress Since Last Analyst Day
A Transformative 18 Months Progress Since Our Last Analyst Day 2013 2015 K Capacity: 11.5 million tonnes K Capacity: 12.5 million tonnes P Capacity: 9.7 million tonnes P Capacity: 11.7 million tonnes Cash on B/S: $3.7 billion Cash on B/S: $2.4 billion Long-term Debt: $1 billion Long-term Debt: $3.8
Slide 6: Cargill Shares Repurchased
A Transformative 18 Months Cargill Shares Repurchased
Slide 7: Balance Sheet Targets Reached
A Transformative 18 Months Balance Sheet Targets Reached $2.5 Billion Liquidity: 1.5 to 2.0 Leverage $1Billion Cash + Targets: $1.5 Billion Adjusted Credit Line Debt to EBITDA Source: Mosaic
Slide 8: Shares Repurchased in 2014
A Transformative 18 Months $2.8B SHARES REPURCHASED in 2014 v4 Mosaic <——
Slide 9: CF Industries Phosphate Business Acquisition
A Transformative 18 Months CF Industries Phosphate Business Acquisition
Slide 10: ADM Distribution Acquisition in Brazil and Paraguay
A Transformative 18 Months ADM Distribution Acquisition in Brazil and Paraguay ADM Day 1
Slide 11: Rebalanced Portfolio, Exited Underperforming Businesses
A Transformative 18 Months Rebalanced Portfolio, Exited Underperforming Businesses
Slide 12: Successful Proving Runs at Colonsay and Esterhazy K2
A Transformative 18 Months Successful Proving Runs at Colonsay and Esterhazy K2
Slide 13: Continued New Product Innovation
A Transformative 18 Months Continued New Product Innovation
Slide 14: Increased Transparency
A Transformative 18 Months Increased Transparency
Slide 15: Esterhazy K3 Expansion On Schedule and On Budget
A Transformative 18 Months Esterhazy K3 Expansion On Schedule and On Budget
Slide 16: Ma'aden Joint Venture - Rapidly Advancing
A Transformative 18 Months Ma'aden Joint Venture - Rapidly Advancing
Slide 17: MicroEssentials Capacity Expansion On Schedule and On Budget
A Transformative 18 Months MicroEssentials® Capacity Expansion On Schedule and On Budget
Slide 18: Committed To Low-cost Operation; Cost-saving Initiatives
A Transformative 18 Months Committed To Low-cost Operation; Cost-saving Initiatives Ahead of Schedule
Slide 19: Asset Optimization: Faustina Debottlenecking, Sulfur Melter, Transportation
A Transformative 18 Months Asset Optimization: Faustina Debottlenecking, Sulfur Melter, Transportation Assets
Slide 20: Many Moves, Providing Earnings Benefits
Many Moves, Providing Earnings Benefits EBITDA Earnings Leverage Without P&K Price Increases ($ Millions) $3,500 $3,000 $2,500 $2,000 $1,500 2014 2015E 2016E 2017E 2018E *Reconciliation in the appendix. EBITDA for future years is calculated based on expected earnings before interest, taxes, deprecia
Slide 21: Sustainability: Leading with Purpose
Leading with Purpose Innovation Shipping Sustainability Waste Emissions Products Co-Products Mining Energy Raw Material Sourcing Manufacturing Nutrient Stewardship
Slide 22: Valuable, Deep Customer Relationships
Leading with Purpose Valuable, Deep Customer Relationships
Slide 23: Record Safety Performance
Leading with Purpose Record Safety Performance Improved RIFR by 14% Improvement Improved LTIFR by more than 8% over 2013 for Environmental Index 17% Source: Mosaic
Slide 24: Sustainability Performance and Reporting
Leading with Purpose Sustainability Performance and Reporting
Slide 25: A Talented Workforce
Leading with Purpose A Talented Workforce
Slide 26: Contributing to Global Food Security
Leading with Purpose Contributing to Global Food Security
Slide 27: Leading in Phosphates
Achieving Mosaic’s Promise Leading in Phosphates MMT Product Global Phosphate Shipments Top 10 Phosphate Producers in 2013 DAP/ MAP/ MES/TSP 70 OCP Source: CRU and Mosaic 64.5-66.5 Mosaic 65 PotashCorp 60 PhosAgro Yuntianhua 55 Vale Guizhou Kailin Group 50 Finished Phosphate Production GCT Phophoric
Slide 28: Delivering Value Through Innovation
Achieving Mosaic’s Promise Delivering Value Through Innovation
Slide 29: Optimizing Potash
Achieving Mosaic’s Promise Optimizing Potash Potash Production Cash Costs Q4’14 2013 Actuals: 2014 Actuals: Q4’14 Actuals: Excluding $133/tonne $112/tonne $91/tonne Brine: $74/tonne • Three world-class mines • Rationalized assets • Belle Plaine and Colonsay expansions completed • Esterhazy K3 on tra
Slide 30: Distribution Strength
Achieving Mosaic’s Promise Distribution Strength
Slide 31: Generating Cash; Using Capital to Optimum Benefit
Delivering for Shareholders Generating Cash; Using Capital to Optimum Benefit ($ / Share) Return $6.11 Grow Business $5.32 $4.76 Sustain Assets & Dividend 2012 2013 2014 Maintain Strong Financial Foundation Operating Cash Flow Per Share Source: Mosaic
Slide 32: Free Cash Flow Scenario: P&K Prices up $50
Delivering for Shareholders ($ Millions) $2,500 347% $2,000 $1,500 $814 $1,000 $1,139 $1,025 $500 $680 $552 $437 $0 2014 2015F 2016F 2017F 2018F Free Cash Flow Scenario: P&K Prices up $50 * Assumptions in Appendix. Subject to risks and uncertainties including those stated in the Safe Harbor Statemen
Slide 33: Leading with Execution
Leading with Execution Joc O’Rourke Chief Operating Officer
Slide 34: Mosaic's Operations Strategy
Mosaic’s Operations Strategy Grow Free Cash Flow Intent Grow Sustainable Value 4 Capital Efficiency 3 Flexibility Focus 2 Reliability 1 Productivity
Slide 35: Indicators of Progress: Cost Savings
Indicators of Progress: Cost Savings ($ in millions) Fixed Costs $2,600 -$120 million, or 5.0% $2,200 +$18 million, or 0.8% $1,800 $1,400 $1,000 $600 2012 Actual 2013=(2012+3%) 2014=(2013+3%) 2014 Actual Potash Phosphates CF
Slide 36: Indicators of Progress: Operating Excellence
Indicators of Progress: Operating Excellence 1.7 Recordable Injury Frequency Rate 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 FY 2010 CY 2011 CY 2012 CY 2013 CY 2014 Safety: Leading Indicator of Operational Excellence
Slide 37: Phosphates in Depth
Phosphates in Depth
Slide 38: Phosphates: Cost Curve
Phosphates: Cost Curve ($/Tonne) 1000 900 2014 Phosphoric Acid Industry FOB Plant 800 700 Mosaic - Uncle Sam & Faustina 600 500 400 300 Mosaic - FL 200 100 0 0 5 10 15 20 25 30 35 40 45 Million Tonnes Source: CRU and Mosaic
Slide 39: Phosphates: Volume & Product Mix
Phosphates: Volume & Product Mix (Million Tonnes) Phosphate Sales Volumes 12.0 10.0 8.0 20% 32% 6.0 4.0 2.0 0.0 2010 2011 2012 2013 2014 2018F DAP/MAP CF MicroEssentials® Other Source: Mosaic
Slide 40: Phosphates: MicroEssentials Expansion
Phosphates: MicroEssentials® Expansion Project Details Expected Returns Expected IRR 20% 1.3 million tonnes Additional Capacity Project Cost $225 million NPV $137 million Cost/Tonne $173/tonne Payback 7 years Timeframe Mid-2016 Assumptions: • Selling prices are considered flat with 2014 • MicroEssen
Slide 41: Phosphates: Raw Material Management
Phosphates: Raw Material Management (Million Tonnes) 1.8 1.6 1.4 81% 1.2 Henry Hub Economics vs. 1.0 26% Today 0.8 0.6 0.4 0.2 0.0 2013 2014 … 2018F Purchased Produced Henry Hub - Contract Source: Mosaic
Slide 42: Phosphates: On Track to Achieve 2018 Targets
Phosphates: On Track to Achieve 2018 Targets Mined Rock Cost Trends Conversion Cost Trends ($/Tonne) ($/Tonne) Per Production Tonne $50 $80 $60 $40 $40 $64 $68 $30 $41 $43 $41 $55 $54 $61 $61 $38 $38 $35 $20 $20 $0 CY2010 CY2011 CY2012 CY2013 CY2014 2018F CY2010 CY2011 CY2012 CY2013 CY2014 2018F Cas
Slide 43: CF Phosphate Integration Completed: Pre-Tax Synergies
CF Phosphate Integration Completed CF Phosphates Integration Commercial & Supply Chain Operations Total Other Expected Pre-Tax Synergies $40-50M 2015 Run Rate $26M $10M $10M $46M 2017 >$50M Run Rate Source: Mosaic
Slide 44: Phosphates: On Track to Achieve 2018 Targets
Phosphates: On Track to Achieve 2018 Targets ($ in millions) Step up as a result $400 of CF acquisition $350 $300 $250 $200 $150 $100 $50 $0 2010 2011 2012 2013 2014 2018F Sustaining CAPEX Depreciation Expense Source: Mosaic
Slide 45: Potash in Depth
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Slide 46: Potash: Expansion Successes
Potash: Expansion Successes Expansion Esterhazy K2 Colonsay Belle Plaine Expected Tonnes 800,000 544,000 570,000 Proved Tonnes* 1,057,842 784,045 TBD Estimated Costs/Tonne $807 $1,331 $932 Actual Costs/Tonne $577 $927 TBD IRR 20% 13% TBD IRR Assumptions 1. $300 per metric tonne netback 2. 85% operat
Slide 47: Production Costs: Our 2013 Cost Predictions
Our 2013 Cost Predictions ($/Tonne) Expected Outcome of Optimization $450 MOP Production Costs by Mine $400 Production Costs $350 $300 Carlsbad $250 Belle Plaine Colonsay Enterprise $200 $150 $100 • Down 10% Esterhazy from 2013 actuals $50 $0 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $260 $280
Slide 48: Production Costs: 2014 Ahead of Plan
2014: Ahead of Plan ($/Tonne) Actual Outcome of Optimization $450 Production Costs by Mine $400 Carlsbad Production Costs $350 $300 $250 Enterprise $200 Belle Plaine Colonsay $150 • Down 16% from Esterhazy 2013 actuals $100 • $7/tonne better $50 than expected $0 $60 $80 $100 $120 $140 $160 $180 $200
Slide 49: Production Costs: Fourth Quarter 2014 Snapshot
Fourth Quarter 2014 Snapshot ($/Tonne) Actual Outcome of Optimization $450 Production Costs by Mine $400 Production Costs* $350 $300 Carlsbad $250 Belle Plaine $200 Enterprise • Down 18% from $150 Colonsay best quarter in 2013 $100 • Includes brine Esterhazy management cost $50 of $17/mt $0 $60 $80
Slide 50: On Track to Achieve 2018 Targets
On Track to Achieve 2018 Targets ($ in millions) $500 $400 $300 $200 $100 $0 2010 2011 2012 2013 2014 2018F Farfield CapEx Inflow Sustaining CapEx Depreciation Expense Source: Mosaic
Slide 51: K3 Optionality
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Slide 52: Esterhazy K3 Optionality: Spend & Scope
Esterhazy K3 Optionality: Spend & Scope Gross Incremental Tax Brine Inflow Capital Capital Offset NPV Benefits Total Outlay Outlay NPV $1.5billion $900million* $~350million* $~250million $~300million Scope Timeframe NPV IRR • Conveyor System Project • Second Headframe and Hoist Mid 2020s >$500 milli
Slide 53: Potash: K3 Optionality
K3 Optionality | Potash:
Slide 54: Potash: K3 Optionality
Potash: K3 Optionality
Slide 55: K3 Optionality Milestones & Capacity Ramp-up
K3 Optionality Milestones & Capacity Ramp-up (Million Tonnes) K3 Mine Capacity Estimate 7 6 5 Overland 4 Conveyor K1 Additional Mine 3 Development Overland 2 Conveyor K2 1 South Headframe Hoist 0 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F Source: Mosaic
Slide 56: Timing of Incremental Capital Spending
Timing of Incremental Capital Spending K3 Expansion Acceleration ($ in millions) Incremental Capital Spending by Year $250 Annual Spending $200 $150 $100 $50 $0 2014 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F Source: Mosaic
Slide 57: Potash: Cost Curve Position Post K3
Potash: Cost Curve Position Post K3 ($/Tonne) 300 Future MOP FOB Port 250 200 150 100 Mosaic 50 Potash Saskatchewan Belaruskali Corporation 0 0 10 20 30 40 50 60 70 Million Tonnes Migration of Production to K3 is a Transformational Move *Excludes Resource Taxes Source: CRU and Mosaic
Slide 58: Summary
Summary • Consistent Execution • Low-Cost Producer • Positioned to Deliver Value
Slide 59: Secure Distribution
Secure Distribution Rick McLellan Senior Vice President, Commercial
Slide 60: Agenda
Agenda 1. 3. Go to Market Value from Strategy Leadership 2. Beyond Distribution
Slide 61: Mosaic's Commercial Strategy
Mosaic’s Commercial Strategy Optimize Higher Value Net Backs Product Mix Earn Attractive Help Optimize Returns Operations Sell 20+ Million Tonnes of Product/Year
Slide 62: A Global Market for Finished Fertilizer
A Global Market Brazil India China BIG North America FOUR % of World P Finished Fertilizer Consumption 12% 11% 14% 30% 66% P205 2014 % of World K Consumption 16% 16% 7% 25% 63% K20 2014 Fast Policy Steady Dynamics Mature Growing Driven Growth Source: CRU
Slide 63: Evolving International Distribution
Evolving International Distribution Brazil India China North America Sell to Distribute Sell to Sell to Mosaic’s Role Dealers Blends Dealers Dealers Mosaic P Canpotex K Products Mosaic P&K Mosaic P Canpotex K Canpotex K Characteristics Market Growing Will grow Canpotex Leader Presence w/Ma’aden JV C
Slide 64: Portfolio Approach
Portfolio Approach Tonnes Top 5 Customers in North America 700,000 600,000 500,000 400,000 300,000 2.5x higher 200,000 100,000 0 With Premium Products Without Premium Products Source: Mosaic
Slide 65: North America: Potash
North America: Potash Mosaic Potash Percent of Sales 60% Range % of sales 50% Little change historically 40% 30% 20% 2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F Source: Mosaic Estimates
Slide 66: North America: Phosphates
North America: Phosphates Mosaic North America Phosphate Percent of Sales 70% 60% CF Industries Phosphates effect 50% 40% Range +4 points % of Sales MicroEssentials® effect 30% 20% 2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F Source: Mosaic Estimates
Slide 67: Brazil: Major Opportunity
Brazil: Major Opportunity K2O Use P2O5 Use +30% +26% 2.6 Million Tonnes 1.9 2.5 1.8 0.8 0.8 0.4 0.4 0.8 0.8 0.9 0.9 2012 2018F 2012 2018F Corn Sugar Cane Soybeans Corn Sugar Cane Soybeans Source: Mosaic Estimates
Slide 68: Mosaic's Presence in Brazil & Paraguay
Mosaic s Presence in Brazil & Paraguay North Entrance Projects Ahead Fospar Expansion North Entrance Fospar
Slide 69: Trucking Issues in Brazil
Trucking Issues in Brazil
Slide 70: India: A Growing Market
India: A Growing Market Indian Crop Nutrient Shipments 20 18 +50% Expected 16 Million Tonnes 14 6 12 10 8 8 6 4 2 4 0 2004 2006 2008 2010 2012 2014 2016F 2018F Phosphate (Domestic) Phosphate (Import) Potash Source: Mosaic Estimates
Slide 71: The Mosaic Brand
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Slide 72: China: An Evolving Marketplace for Potash
China: An Evolving Marketplace for Potash Before: Now: Canpotex Exclusive + Industrial Producers NPK Producers Bulk Blenders
Slide 73: Direct and Third-Party Distribution
Direct and Third-Party Distribution Mosaic’s In-Country Presence
Slide 74: Mosaic International Distribution Segment
Mosaic International Distribution Segment (Million Tonnes) 9.0 $40 8.0 $35 Gross Margin per Tonne 7.0 $30 Sales volumes 6.0 $25 5.0 $20 4.0 $15 3.0 2.0 $10 1.0 $5 0.0 $0 FY 2011 FY 2012 CY 2013 CY 2014 CY 2018F DAP/MAP MicroEssentials® Potash Nitrogen SSP/Other Gross Margin per Tonne
Slide 75: Mosaic: A Leader in Global Markets
Mosaic: A Leader in Global Markets Mosaic’s Advantages: • Scale • Low Cost Profile Margin Leadership • Diversity of Customers Innovation Lead and Production Flexibility Production Discipline • Market Access • Intellectual Capital
Slide 76: Mosaic Analyst Day March 31, 2015
Mosaic Analyst Day March 31, 2015
Slide 77: Driving Value
Driving Value Rich Mack Executive Vice President and Chief Financial Officer
Slide 78: Driving Value
Driving Value Mosaic’s Phosphates Business Valuation Considerations Brine Management Costs and Risk Mosaic’s Current Valuation Growth Outlook Free Cash Flow Growth Levers to Grow Value
Slide 79: The Investment Perspective
The Investment Perspective Mosaic’s Phosphates Business Valuation Considerations Brine Management Costs and Risk Industry Valuation Mosaic’s Current Valuation Growth Outlook + Mosaic’s Position Free Cash Flow Growth Levers to Grow Value
Slide 80: Attractive Industry Structure: Supply & Demand
Attractive Industry Structure: Supply & Demand (Million Tonnes) (Million Tonnes) MMT Global Phosphoric Acid Capacity MMT Global Phosphoric Acid Supply P2O5 Op Rate P2O5 60 60 90% 59 Source: CRU. January 2015. 1.0 1.9 50 85% 58 1.5 57 40 80% 56 1.9 55 30 75% 54 57.5 20 70% 53 55.0 52 10 65% 51 Source
Slide 81: Attractive Industry Structure: Cost Curve, Consolidation & More
Attractive Industry Structure: Cost Curve, Consolidation & More Significantly Improved Structure: North America 61 % of capacity 1990 2000 2015 18 Firms / 21 Plants 12 Firms / 20 Plants 4 Firms / 12 Plants 10.9 mmt P2O5 12.3 mmt P2O5 8.8 mmt P2O5 Source: Mosaic
Slide 82: Attractive Industry Structure: Rest of the World
Attractive Industry Structure: Cost Curve, Consolidation & More Significantly Improved Structure: Rest of the World +
Slide 83: Mosaic's Position
Mosaic’s Position Leader in Global Markets Mosaic’s Advantages: • Scale • Low Cost Profile • Margin Leadership • Diversity of Customers and • Innovation Lead Production Flexibility • Production Discipline • Market Access • Intellectual Capital
Slide 84: Phosphates Segment Valuation
Phosphates Segment Valuation Supply and Demand Industry Structure VALUATION Leadership Position
Slide 85: The Investment Perspective
The Investment Perspective Mosaic’s Phosphates phosphates business Business Valuation Considerations Brine Management Costs and Risk Mosaic’s Current current valuation Valuation Growth Outlook Free Cash Flow Growth Levers to Grow Value
Slide 86: Brine Management
Brine Management Cash Flow and Risks Cost of brine inflow Capital costs to mitigate management brine inflow Perceived risk of catastrophic loss of K1 and K2
Slide 87: Esterhazy Underground Footprint
Esterhazy Underground Footprint K1 Shaft K2 Shaft Brine Storage Area
Slide 88: Cash Flow to Manage Brine
Cash Flow to Manage Brine ($ in millions) 2012 2013 2014 2015 Guidance Expenses $249 $202 $181 $180 - $200 Capital $129 $41 $20 N/A • Industry leader: effectively managing brine inflow since 1985 • Increased pumping capacity to estimated maximum inflow • “Insurance” characteristics • Brine managemen
Slide 89: Diminishing Esterhazy Risk
Diminishing Esterhazy Risk 100% 80% 60% Loss represents less than 40% two quarters of net income 20% 0% 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F K1 / K2 Tonnes K3 Tonnes In 2018 NPV of Lost Tonnes from K1 & K2 = $1.1 Billion In 2020 NPV = $425 Million Source: Mosaic
Slide 90: The Investment Perspective
The Investment Perspective Mosaic’s Phosphates phosphates business Business Valuation Considerations Brine Management Costs and Risk Mosaic’s Current current valuation Valuation Growth Outlook Free Cash Flow Growth Levers to Grow Value
Slide 91: Phosphates: Investing for Growth
Phosphates: Investing for Growth Phosphate Gross Margin Impact ($ in millions) $1,600 $1,500 $1,400 $1,300 +56% Raw Materials Ma’aden $1,200 MicroEssentials® $1,100 CF Industries $1,000 Phosphates $900 $937 $1,466 $800 2014 2015F 2016F 2017F 2018F * Assumptions in Appendix. Subject to risks and unce
Slide 92: Potash: Investing for Growth
Potash: Investing for Growth Potash Gross Margin Impact ($ in millions) $1,100 $1,050 $1,000 +17% $1,076 Volume $950 Growth $900 $850 $923 $800 2014 2015F 2016F 2017F 2018F Opportunity to Reduce Brine Spending After 2018 * Assumptions in Appendix. Subject to risks and uncertainties including those s
Slide 93: International Distribution: Investing in Growth
International Distribution: Investing in Growth International Distribution Gross Margin ($ in millions) $280 $260 $240 $220 +74% $200 ADM Distribution $180 Tonnes Incremental MicroEssentials® $160 & Volume Growth $140 $120 $147 $256 $100 2014 2015F 2016F 2017F 2018F * Assumptions in Appendix. Subjec
Slide 94: Cost Avoidance and Expense Savings
Cost Avoidance and Expense Savings ($ in millions) Aggressive Cost Reduction Targets 500 450 400 350 300 ~70% achieved 250 by year 3 200 150 100 50 0 2014 2015F 2016F 2017F 2018F Potash Phosphates Other Net Savings * Assumptions in Appendix. Subject to risks and uncertainties including those stated
Slide 95: Cash Flow from Operations
Cash Flow from Operations ($ in millions) $3,000 +53% $2,500 $2,633 $2,000 $568 $1,726 $1,500 2014 2015F 2016F 2017F 2018F Adjusted Cash Flow from Ops Growth Investments Changes to Working Capital & Disclosed Notable Items * Assumptions in Appendix. Subject to risks and uncertainties including those
Slide 96: The Investment Perspective
The Investment Perspective Mosaic’s Phosphates phosphates business Business Valuation Considerations Brine Management Costs and Risk Mosaic’s Current current valuation Valuation Growth Outlook Free Cash Flow Growth Levers to Grow Value
Slide 97: Capital Priorities
Capital Priorities Balanced Approach Return to Shareholders Strong Cash Generator Capital Management Targeting Strategic Investments Growth Organic Growth Investments Proven Track Record Dividend Increases Sustain & Grow Dividend Share Repurchases Sustain Assets Additional Flexibility
Slide 98: A Track Record of Dividend Growth
A Track Record of Dividend Growth Dividend per Share ($ per share) $1.2 $1.0 $1.10 450% +10% $0.8 $0.6 $0.4 $0.2 $0.0 2011 2012 2013 2014 2015F
Slide 99: And Meaningful Share Repurchases
And Meaningful Share Repurchases ($ in billions) $4.0 $3.5 $3.0 ~$190 million remaining $2.5 $2.8 18% of under current share $2.0 Total Shares repurchase authorization $1.5 Outstanding as of February 6, 2015 $1.0 $0.5 $1.2 $0.0 2011 2014
Slide 100: Balance Sheet Targets
Balance Sheet Targets A Function of Business Growth +55% $3,350 2.5 $2.5B Liquidity: $2,850 $3,155 $3,206 $1B Cash + $2,760 $2,890 2.0 $2,350 ($ in millions) $1.5B Credit Line $1,850 $2,061 1.5 $1,350 1.5 to 2.0 Leverage 1.0 $850 Target: Adjusted Debt to $350 0.5 EBITDA 2014 2015E 2016E 2017E 2018E
Slide 101: Sustain Assets and Grow Dividend
Sustain Assets and Grow Dividend Unchanged Commitments ($ in millions) $1,200 $1,000 $800 Flat, $600 excluding $400 business $200 growth $0 2014 2015F 2016F 2017F 2018F Sustaining Dividends Expect to Grow Dividend with Earnings Growth * Assumptions in Appendix. Subject to risks and uncertainties inc
Slide 102: Business Growth: Prudent Capital Management
Business Growth Prudent Capital Management Hurdle Rates (%) Base Rate 8.9% Country/External Risk 0% - 2.0% Project Risk 0% - 9.7% Probability of Meeting or Exceeding Required Return Required Return 8.9% - 20.6% Source: Mosaic
Slide 103: Business Growth: A Track Record of Success
Business Growth A Track Record of Success Organic Strategic Capital IRR Capital IRR Esterhazy K2 $645/tonne 20% CF Phosphates $630/tonne 17% Colonsay $923/tonne 13% Ma’aden $900/tonne Low teens MicroEssentials® $173/tonne 20% ADM $175/tonne 12% Source: Mosaic
Slide 104: Return of Excess Capital
Return of Excess Capital Cash Flow from Operations ($ in millions) $2,500 $2,400 $2,300 $2,200 $2,100 $2,000 2014 2015F 2016F 2017F 2018F * Assumptions in Appendix. Subject to risks and uncertainties including those stated in the Safe Harbor Statement. Source: Mosaic
Slide 105: First Commitment: Capital Expenditures and Dividends
Return of Excess Capital First Commitment: Capital Expenditures and Dividends ($ in millions) $1,800 $1,500 $1,200 $900 $600 $300 $0 2014 2015F 2016F 2017F 2018F Dividends Capital Expenditures * Assumptions in Appendix. Subject to risks and uncertainties including those stated in the Safe Harbor Sta
Slide 106: Return Excess Capital: Meaningful Free Cash Flow
Return Excess Capital Meaningful Free Cash Flow ($ in millions) $1,200 $1,000 161% $1,139 $800 $1,025 $600 $400 $680 $552 $200 $437 $0 2014 2015F 2016F 2017F 2018F Projected Free Cash Flow (After Dividends) * Assumptions in Appendix. Subject to risks and uncertainties including those stated in the S
Slide 107: Smart Capital Deployment
Smart Capital Deployment Investment Shareholder for Growth Returns Capital Stewardship
Slide 108: Leverage to Cyclical Improvement
Leverage to Cyclical Improvement Significant Free Cash Flow Leverage ($ in millions) $2,500 $2,000 $1,500 347% $814 $1,000 $1,139 $500 $1,025 $680 $552 $437 $0 2014 2015F 2016F 2017F 2018F Free Cash Flow Scenario: P&K Prices up $50 * Assumptions in Appendix. Subject to risks and uncertainties includ
Slide 109: Enhanced by Capital Deployment
Enhanced by Capital Deployment Free Cash Flow per Share After Dividends $6.00 396% $5.00 $2.34 $4.00 $3.00 $2.00 $3.27 $1.00 $2.89 $1.85 $1.53 $1.13 $0.00 2014 2015F 2016F 2017F 2018F FCF/Share Scenario: P&K Prices up $50 * Assumptions in Appendix. Subject to risks and uncertainties including those
Slide 110: Summary
Summary • Undervalued Phosphates Business • Diminishing Brine Management Risk • Free Cash Flow Growth Potential • Balanced Capital Allocation • Positioned to Deliver Value
Slide 111: Mosaic Analyst Day March 31, 2015
Mosaic Analyst Day Mosaic Analyst DayMarch 31, 2015 March 31, 2015
Slide 112: Closing Thoughts
Closing Thoughts Jim Prokopanko President and CEO
Slide 113: Why Should You Buy MOS?
Why Should You Buy MOS? A differentiated leader
Slide 114: The World's Leading Phosphate Company
Why Should You Buy MOS?A differentiated leader The World’s Leading Phosphate Company
Slide 115: Potash Scale and Discipline
Why Should You Buy MOS?A differentiated leader Potash Scale and Discipline
Slide 116: Low-Cost Operator
Why Should You Buy MOS?A differentiated leader Low‐Cost Operator Potash Phosphate 550 325 500 Source: CRU 300 450 275 Source: CRU 400 250 350 225 200 300 175 250 150 200 125 MOS-LA 100 MOS-FL 150 75 100 50 Mosaic Sask 50 25 0 0 0 10 20 30 40 0 20 40 60 Million Tonnes
Slide 117: Operational Excellence
Why Should You Buy MOS?A differentiated leader Operational Excellence
Slide 118: Deep Customer Relationships
Why Should You Buy MOS?A differentiated leader Deep Customer Relationships
Slide 119: Secure Market Access
Why Should You Buy MOS?A differentiated leader Secure Market Access
Slide 120: Innovation
Why Should You Buy MOS?A differentiated leader Innovation
Slide 121: Exceptional Talent
Why Should You Buy MOS?A differentiated leader Exceptional Talent
Slide 122: Logistics Advantages in Americas
Why Should You Buy MOS?A differentiated leader Logistics Advantages in Americas
Slide 123: Bold Moves, Excellent Execution
Why Should You Buy MOS?A differentiated leader Bold Moves, Excellent Execution 1.5 to 2.0 Leverage Targets: adjusted debt to EBITDA
Slide 124: Financial Strength
Why Should You Buy MOS?A differentiated leader Financial Strength Investment for Shareholder Growth Returns Capital Stewardship
Slide 125: Why Should You Buy MOS? Delivering value
Why Should You Buy MOS?Delivering value The most valuable combination of talent, assets and global reach in the crop nutrition industry Value Cash Flow Earnings Leverage
Slide 126: Mosaic Analyst Day March 31, 2015
Mosaic Analyst Day Mosaic Analyst DayMarch 31, 2015 March 31, 2015
Slide 127: Appendix: Assumptions
Appendix: Assumptions Phosphates: Ma’aden JV contribution embedded in gross margin, actual reporting is as an equity investment under U.S. GAAP. ADM business includes an incremental, 2 million tonnes of blended product plus synergies. Raw material savings result of increased NH3 manufacturing
Slide 128: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation CY2014 EBITDA Reconciliation EBITDA $2,060.5 Foreign currency gain (loss) 79.1 Gain (loss) in value of share repurchase agreement (60.2) Interest income (expense) (107.6) Non‐controlling interest (1.8) Depreciation, depletion and amortization (750.9) Provision from
Slide 129: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation CY2014 Cash Flow from Operations Reconciliation Adjusted Cash flow from operations (Non‐GAAP) $1,726 Changes in working capital 300 Loss on write‐down of Carlsbad 125 Unrealized loss on derivatives 35 Change in value of share repurchase agreement 60 Amortization of
Slide 130: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation CY2014 EBITDA Reconciliation Adjusted Debt ($ in millions) As of December 31, 2014 ($ in millions) EBITDA $2,060.5 Short term debt $14 Foreign currency gain (loss) 79.1 Long term debt 3,819 Gain (loss) in value of share repurchase (60.2) Unfunded pension and postret