Attached files
| file | filename |
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| EX-99.1 - TRANSCRIPT OF CONFERENCE CALL - MOSAIC CO | dex991.htm |
| 8-K - FORM 8-K - MOSAIC CO | d8k.htm |
 The Mosaic Company
Jim Prokopanko, President and Chief Executive Officer
Larry Stranghoener, Executive VP and Chief Financial Officer
Mike Rahm, Vice President Market and Strategic Analysis
Christine Battist, Director -
Investor Relations
Earnings Conference Call -
1
st
Quarter Fiscal 2011
Tuesday, October 5, 2010
Exhibit 99.2 |
 This presentation 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 future financial and
operating results. Such statements are based upon the current beliefs
and expectations of The Mosaic Company’s management and are subject to
significant risks and uncertainties. These risks and uncertainties include
but are not limited to the predictability and volatility of, and customer
expectations about, agriculture, fertilizer, raw material, energy and
transportation markets that are subject to competitive and other pressures and economic and credit
market conditions; the level of inventories in the distribution channels for crop
nutrients; changes in foreign currency and exchange rates; international
trade risks; changes in government policy; changes in environmental and other
governmental regulation, including greenhouse gas regulation; further developments
in the lawsuit involving the federal wetlands permit for the extension of
the Company’s South Fort Meade, Florida, mine into Hardee County,
including orders, rulings, injunctions or other actions by the court or actions by
the plaintiffs, the Army Corps of Engineers or others in relation to the
lawsuit, or any actions the Company may identify and implement in an effort to
mitigate the effects of the lawsuit; other difficulties or delays in receiving, or
increased costs of, or revocation of, necessary governmental permits or
approvals; the effectiveness of the Company’s processes for managing its
strategic priorities; adverse weather conditions affecting operations in Central
Florida or the Gulf Coast of the United States, including potential
hurricanes or excess rainfall; actual costs of asset retirement, environmental
remediation, reclamation or other environmental regulation differing from
management’s current estimates; accidents and other disruptions
involving Mosaic’s operations, including brine inflows at its Esterhazy,
Saskatchewan potash mine and other potential mine fires, floods,
explosions, seismic events or releases of
hazardous or volatile chemicals, as well as other risks and uncertainties reported
from time to time in The Mosaic Company’s reports filed with the
Securities and Exchange Commission. Actual results may differ from those set
forth in the forward-looking statements.
Safe Harbor Statement
Slide 2 |
 Leader in Potash and Phosphate
Slide 3
SOURCE: IFA, COMPANY REPORTS AND MOSAIC ESTIMATE
|
 In
millions, except per share amounts Three Months Ended
August 31,
2010
2009
Net Sales
$2,188.3
$1,457.2
Gross Margin
$504.7
$222.2
% of net sales
23%
15%
Net Earnings
$297.7
$100.6
% of net sales
14%
7%
Diluted EPS
$0.67
$0.23
Effective Tax Rate
27%
25%
Cash Flow Provided by Operations
$556.2
$172.4
Cash and Cash Equivalents as of
August 31, 2010 & 2009
$2,362.7
$2,598.7
Financial Results
Slide 4 |
 Phosphates Segment Highlights
Slide 5
Q1 FY11
Q4 FY10
Q1 FY10
IN MILLIONS, EXCEPT DAP PRICE
Net sales
$1,581.1
$1,187.9
$1,194.5
Gross Margin
$245.0
$306.6
$114.5
% of net sales
15%
26%
10%
Operating earnings
$178.0
$221.1
$46.5
Sales volumes
3.1
2.3
2.9
NA production volume
2.2
1.9
2.0
Ave DAP selling price
$431
$438
$278
First quarter year over year highlights:
•
Higher selling prices
•
Finished product operating rate 89%; however, reduced rock production at South
Fort Meade •
Strong sales volumes in North America & Brazil
•
Lean producer inventories |
 Potash Segment Highlights
Slide 6
Q1 FY11
Q4 FY10
Q1 FY10
IN MILLIONS, EXCEPT MOP PRICE
Net sales
$621.9
$696.5
$333.3
Gross Margin
$256.7
$378.1
$124.6
% of net sales
41%
54%
37%
Operating earnings
$218.0
$346.9
$99.3
Sales volumes
1.7
1.8
0.8
Production volume
1.4
1.9
0.8
Ave MOP selling price
$331
$336
$354
First quarter year over year highlights:
•
Sales volume double last year
•
First quarter volumes in both years affected by seasonal turnarounds
•
Improved cost leverage due to increased production |
 Execution of Strategic
Priorities
•
Investment in Miski Mayo
•
Closed Fosfertil sale
•
Grow value in Phosphates
–
Align distribution with production
–
Optimize production rates
–
Grow MicroEssentials®
•
Potash expansions continue on plan
–
New shaft at Esterhazy
Slide 7 |
 Category
Guidance
Phosphates Market
Phosphates Segment
Extremely tight near term
Large domestic and international shipments
U.S. producer inventories extremely low
Q2 Sales volume 3.3 –
3.6 million tonnes
Q2
DAP
selling
price
$430
-
$460
per
tonne
Operating rate of 85 –
90%
Potash Market
Potash Segment
Surging shipments
North American producer inventories declined,
expected to stay low
Q2 Sales volume 1.6 –
1.9 million tonnes
Q2
MOP
selling
price
$310
-
$340
per
tonne
Operating rate of 80 –
85%
Canadian Resource Taxes and Royalties
$150 -
$200 million
SG&A
$360
–
$380
million
Capital Expenditures
$1.4 -
$1.6 billion
Effective Tax Rate*
Mid to upper 20 percent range
Financial Guidance –
Fiscal 2011
Slide 8
* Effective tax rate excludes items related to the Fosfertil sale. While the effect of the gain on
the sale on the Company’s provision for income taxes has not yet been finalized, it is
expected to increase income tax expense for the second quarter of fiscal 2011 but is expected to lower the effective
tax rate. |
 South Fort Meade Update
Litigation status:
•
Awaiting decision from federal district court and
Eleventh Circuit on requested motions for
partial stay
•
Granted an expedited appeal of the preliminary
injunction by the Eleventh Circuit
Factors mitigating operational impact:
•
Utilizing phosphate rock on hand
•
Sourcing third party rock, including Miski Mayo
•
Maximizing existing mine production
•
Drawing down finished goods inventories
Slide 9 |
 Market Outlook |
 Developments in Ag Commodity Markets
Slide 11
Highlights:
•
Severe weather events: Russia, Saskatchewan, Europe, Pakistan, China,
Western Australia
•
U.S corn crop conditions
•
Other crop prices rally: cocoa, coffee, cotton, palm oil, and sugar
|
 Healthy Farm Economics
Slide 12
•
Nutrient cost well within
historic norms
•
Record net farm income
in U.S.
•
Farm profitability at or
near records in key
markets around the world
IOWA HIGH YIELD FARM
SOURCE: IOWA STATE UNIVERSITY, USDA AND MOSAIC
|
 Phosphate Demand at Record Levels
Import demand in growth
regions (million tonnes):
Brazil:
•2009
2.1
•2010F
2.5
•2011F
2.7 –
2.9
India:
•2009
6.6
•2010F
8.0
•2011F
7.5 –
8.0
13 |
 Rebounding Potash Demand
14
Import demand in growth
regions (million tonnes):
Brazil:
•2009
3.4
•2010F
5.9
•2011F
6.2 –
6.5
China:
•2009
1.6
•2010F
5.0
•2011F
6.0 –
8.0
India
•2009
6.0
•2010F
6.0
•2011F
6.3 –
6.5 |
 Supply Issues
•
Phosphate:
–
How much will Ma’aden produce in 2011?
–
Loss of Agrifos production
–
Raw material availability
–
Chinese exports
–
South Fort Meade resolution
•
Potash
–
Brownfield expansions required to keep up
with demand
Slide 15 |
 Key Points
•
Strong quarterly results
•
Balanced nutrient portfolio
paying off
•
Positive market outlook
•
Executing our strategic
priorities
Slide 16 |
 The Mosaic Company |