Slide 1: Earnings Conference Call – Third Quarter 2014
The Mosaic Company Earnings Conference Call – Third Quarter 2014 October 30, 2014 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 Northern Promise Joint Venture, the acquisition
Slide 3: Key Messages
Click to edit Master title style 3 ▪ Negative sentiment overblown ▪ This is a cyclical business ▪Mosaic is well positioned to take advantage of the trough Key Messages
Slide 4: Third Quarter Financial Highlights
Click to edit Master title style 4 Third Quarter Financial H ghlights $1,658 $593 Net Sales Phosphates Potash $239 $46 Operating Earnings • $0.54 diluted earnings per share Includes $0.02 negative impact of notable items • $489 million in cash from operations $2.3 billion $277 million
Slide 5: Strong Demand Persists
5 Strong Demand Persists 2 Lowered global phosphate shipments as NPK production in India is replacing DAP Industry on track to finish 2014 with record potash and phosphate shipments. Lean producer and channel inventories. Expect continued growth in 2015. 64-65 64.5-66.5 30 35 40 45 50 55 60
Slide 6: Continued Confidence in 2015 P&K Demand
Click to edit Master title style 6 Continued Confidence in 2015 P&K Demand Expect growth in shipments in 2015: Significant nutrient removal after two large crops in a row Precision agriculture impact on application rates Little financial benefit of breaking the nutrient cycle Crop nutrient
Slide 7: Strategic Accomplishments
Click to edit Master title style 7 Strategic Accomplishments Expect ADM acquisition to close by end of 2014 Potash expansions continue to be on time and on budget Closed sale of Hersey, Michigan salt mine Signed agreement to sell Argentina business On pace to realize targeted synergies fro
Slide 8: Progress on Ma'aden Joint Venture
Progress on Ma’aden Joint Venture 8 Ammonia - Main Control Building
Slide 9: Financial Results Review
Financial Results Review
Slide 10: Phosphates Segment Highlights
Third Quarter Highlights: The year-over-year increase in net sales is driven by higher sales volumes. The year-over-year increase in gross margin dollars reflects higher sales volumes, partially offset by lower fixed costs absorption. Operating earnings in 2013 included a $75 million loss rela
Slide 11: Potash Segment Highlights
Third Quarter Highlights: • The increase in net sales was driven by higher sales volumes, partially offset by lower realized MOP prices. • The year-over-year decrease in operating earnings was driven by lower realized prices, lower fixed cost absorption, higher Canadian resources taxes, changes in m
Slide 12: Balance Sheet and Capital Update
Balance Sheet and Capital Update $47 per Share Increased debt levels by $800 million See repurchases at current levels as attractive opportunity: Repurchased 3.5 million shares in the open market since last earnings call Increased targeted liquidity buffer to $2.5 billion, including $1 billi
Slide 13: Financial Guidance Summary
Click to edit Master title style 13 Financial Guidance Summary Phosphates Guidance – 2014 Q4 Sales volume 2.5 – 2.8 million tonnes Q4 DAP selling price $430 - $450 per tonne Q4 Gross margin rate in the mid-teens Q4 Operating rate in the 70 – 80 percent range Potash Guidance – 2014 Q4 Sales volume 2.
Slide 14: Financial Guidance Summary – Corporate
Click to edit Master title style 14 Financial Guidance Summary Corporate Guidance – 2014 Total SG&A - 2014 $380 - $395 million Capital Expenditures and Equity Investments - 2014 $1.0 - $1.2 billion Effective Tax Rate - 2014 High 20 percent range
Slide 15: Class A Share Overhang Out of the Way
Class A Share “Overhang” Out of the Way 126 Million Class A Shares (original amount) Cargill Family Members Margaret A Cargill Trusts • Own 34 million Class A shares • Half will convert to common in November 2014, the other half in November 2015 • Dispersed among several trusts; do not expect signif
Slide 16: Helping the World Grow the Food it Needs
Helping the World Grow the Food it Needs
Slide 17: Raw Material Cost Detail
Q3 2014 Percent Ammonia ($/MT) Realized in COGS $508 Average Purchase Price $525 Sulfur ($/LT) Realized in COGS $148 Average Purchase Price $154 Phosphate rock (realized in COGS) ('000 MTs) U.S. mined rock 3,583 93% Purchased Miski Mayo Rock 284 7% Other Purchased Rock 4 0% Total 3,871 100% Average
Slide 18: Phosphate Raw Material Trends
$- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014F Q4 2014F Realized Costs Market Prices $- $100 $200 $300 $400 $500 $600 $700 $800 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014F Q4 2014F Realized Costs Market Prices 18
Slide 19: Earnings Sensitivity to Key Drivers
(a) These factors do not change in isolation; actual results could vary from the above estimates (b) Assumes no change to KMAG pricing 2014 Q3 Actual Change 2014 Q3 Margin % Actual % Impact on Segment Margin Pre-Tax Impact EPS Impact Marketing MOP Price ($/tonne)(b) $291 $50 22% 14% $85 $0.16 Potash