Attached files
| file | filename |
|---|---|
| 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
Christine
Battist,
Director
-
Investor
Relations
Earnings
Conference
Call
-
2nd
Quarter
Fiscal
2011
Wednesday, January 5, 2011
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 and implementation of the U.S. Environmental
Protection Agency’s numeric water quality standards for the discharge of nutrients
into Florida lakes and streams; 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 various items differing from management’s current
estimates, including, among others, asset retirement, environmental remediation, reclamation or other
environmental obligations, or Canadian resource taxes and royalties; 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 |
 Financial Results
Slide 3
(a)
The
second
quarter
fiscal
year
2011
results
include
an
after
tax
gain
of
$570
million,
or
$1.28
per
share,
on
the
sale
of
our
interest in Fosfertil
S.A.
(b)
Subsequent to the quarter end, we announced the redemption of the remaining $455.4
million aggregate principal amount of our 7-3/8% senior notes due
December 2014. The redemption will occur on January 13, 2011 |
 Phosphates Segment Highlights
Slide 4
Q2 FY11
Q1 FY11
Q2 FY10
IN MILLIONS, EXCEPT DAP PRICE
Net sales
$1,974.0
$1,581.1
$1,328.0
Gross Margin
$476.3
$245.0
$113.2
% of net sales
24%
15%
9%
Operating earnings
$402.3
$178.0
$29.0
(b)
Sales volumes
3.7
3.1
3.3
NA production volume
2.1
2.2
2.1
Avg
DAP selling price
$461
$431
$287
Second quarter year over year highlights:
•
Higher selling prices, record sales volumes
•
Finished product operating rate 88%
•
Strong sales volumes in North America, above average International distribution
margin •
Lean producer inventories
(a)
Includes crop nutrient dry concentrates and animal feed ingredients
(b)
Includes pre-tax charge of $51.2 associated with permanent closure and
write off of certain assets
OPERATING EARNINGS BRIDGE
$ IN MILLIONS
0
100
200
300
400
500
600
Q2 FY10
OE
Selling price
Sales
volume
Raw
materials
Other
Q2 FY11
OE
(a) |
 Potash Segment Highlights
Slide 5
Q2 FY11
Q1 FY11
Q2 FY10
IN MILLIONS, EXCEPT MOP PRICE
Net sales
$699.0
$621.9
$414.3
Gross Margin
$285.2
$256.7
$179.9
% of net sales
41%
41%
43%
Operating earnings
$251.5
$218.0
$150.6
Sales volumes
1.8
1.7
1.0
Production volume
1.7
1.4
1.1
Avg
MOP selling price
$331
$331
$370
Second quarter year over year highlights:
•
Sales volume almost double last year
•
Ramped up production during quarter after seasonal turnarounds, currently running
at high rates •
Lean producer inventories
OPERATING EARNINGS BRIDGE
$ IN MILLIONS
0
50
100
150
200
250
300
350
400
450
Q2 FY10
OE
Sales
volume
Production
costs
Sales price
Resource
taxes
Other
Q2 FY11
OE |
 Category
Guidance
Phosphates
Volumes constrained due to seasonality
Expect record demand in 2011
Expect slightly higher sulfur and ammonia costs
U.S. producer inventories at record lows
Q3 Sales volume 2.4 –
2.7 million tonnes
Q3
DAP
selling
price
$510
-
$540
per
tonne
Q3 Operating rate above 85%
Potash
Expect record demand in 2011
North American producer inventories expected to
remain low
Average realized MOP price constrained by lag in
export pricing
Q3 Sales volume 1.9 –
2.1 million tonnes
Q3
MOP
selling
price
$330
-
$350
per
tonne
Q3 Operating rate above 90%
Capital Expenditures
$1.2
-
$1.4
billion
Canadian Resource Taxes and Royalties
$250
–
$300
million
SG&A
$360
–
$380
million
Effective
Tax
Rate
(a)
Mid to upper 20 percent range
Financial
Guidance
–
Fiscal
2011
Slide 6
(a)
Effective tax rate excludes items related to the Fosfertil
sale. |
 Strategic Priorities and
Market Outlook |
 Potash –
Grow Volume
Slide 8
INVESTMENT
($ IN BILLIONS)
CAPACITY
(MILLION TONNES)
ESTIMATED
CONSTRUCTION
COMPLETION
(FISCAL YEAR)
IN PROCESS
Belle Plaine
0.5
0.6
2012
Colonsay
0.7
0.7
2014
Esterhazy
2.0
1.8
2011-17
FUTURE
Belle Plaine
1.4
2016-19
Colonsay
0.6
2016
5.1
Tolling
agreement
1.3
Capacity at May 31, 2010
10.4
16.8
(a)
The projected annual capacity includes up to an approximate 1.3 million
tonnes that under a third party tolling agreement at our Esterhazy,
Saskatchewan, potash mine will revert to us when the tolling agreement
expires. PROJECTED CAPACITY
MILLION TONNES
0
2
4
6
8
10
12
14
16
18
2011
2013
2015
2017
2019
2021
FISCAL YEAR
Existing
Tolling
In progress
Future
(a) |
 Phosphates –
Grow Value
•
Operational excellence
–
Cost savings and improved efficiency
–
Maintain low cost position
•
MicroEssentials
®
–
Improved yields
–
Higher margins
–
Finalizing expansions to two million tonnes capacity
•
Distribution
–
Aligned global distribution with North American
production
Slide 9 |
 South Fort Meade Update
•
Successful mitigation efforts (so far)
–
Settlement that allows limited mining
–
Draw down existing rock and finished product
inventories
–
Optimize mining at other Florida mines
–
Sourcing rock from Miski Mayo JV and third parties
•
Appeal of the injunction
–
Hearing date set for first week of April 2011
Slide 10 |
 High ag commodity prices
–
Exceptional farm economics
–
Corn/soybean battle for acres
–
Expect great North American
spring
Very low producer
inventories
Lean global distribution
pipeline
Supply uncertainties
Focus on food security
Record crop nutrient demand
–
Projected calendar 2011
phosphate shipments of 59 to 61
million tonnes
–
Projected calendar 2011 potash
shipments of 53 to 56 million
tonnes
Outstanding Market Fundamentals
Slide 11 |
 The Mosaic Company
Earnings
Conference
Call
-
2nd
Quarter
Fiscal
2011
Wednesday, January 5, 2011 |
 Appendix
Change
Estimated Change in
Pre-Tax Earnings
($ in millions)
Estimated
Change in Annual
EPS
MOP Price ($/tonne)
$50
$372
$0.59
Potash Volume (000 tonnes)
500
$106
$0.17
DAP Price ($/tonne)
$50
$410
$0.65
Phosphates Volume (000 tonnes)
500
$77
$0.12
Sulfur ($/lt)
$25
$90
$0.15
Ammonia ($/tonne)
$25
$30
$0.05
Natural Gas ($/mmbtu)
$0.25
$8
$0.01
(a)
These factors do not change in isolation; actual results could vary from the above
estimates Earnings
Sensitivity
to
Key
Drivers
(a) |