Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MOSAIC CO | d8k.htm |
| EX-99.1 - TRANSCRIPT OF CONFERENCE CALL - MOSAIC CO | dex991.htm |
 The Mosaic Company
Jim Prokopanko, President and Chief Executive Officer
Larry
Stranghoener,
Executive
Vice
President
and
Chief
Financial
Officer
Laura Gagnon, Vice President Investor Relations
Earnings
Conference
Call
–
4th
Quarter
Fiscal
2011
Tuesday, July 19, 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
the
effects
of
the
current
economic
and
financial
turmoil;
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,
necessary
governmental
permits
or
approvals;
further
developments
in
the
lawsuit involving the tolling agreement at the Company's Esterhazy, Saskatchewan,
potash mine, including settlement or orders, rulings,
injunctions
or
other
actions
by
the
court,
the
plaintiff
or
others
in
relation
to
the
lawsuit;
the
effectiveness
of
our
processes
for
managing our 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 |
 The Mosaic Company
Earnings
Conference
Call
-
4
Quarter
Fiscal
2011
Tuesday, July 19, 2011
th |
 Bullish Long-term Outlook
Continued tight agricultural markets
Record yields and harvested area required
Very favorable demand outlook for the remainder 2011
•
Potash:
–
Record 2011 global shipments of 55 to 58 million tonnes
–
3.0 –
3.5 percent annual long-term growth
•
Phosphate:
–
Record 2011 global shipments of 60 to 62 million tonnes
–
2.5 –
3.0 percent annual long-term growth
Supply concerns increasing
Slide 4 |
 Positioned to Create Value
High quality assets
•
Industry leading facilities
•
Global distribution and marketing
•
Differentiated products
Excellence in execution
•
Potash expansions
•
Operational excellence
Efficient capital allocation
•
Strong balance sheet and cash position
•
Investing to drive shareholder value
•
Increased flexibility
Slide 5 |
 South Fort Meade Update
6 |
 Financial Results
Slide 7
(a)
Includes an after tax gain of $559.5 million, or $1.25 per share, on the sale of
our interest in Fosfertil S.A. In
millions,
except
per
share
amounts
Three Months Ended
Fiscal
Year
5/31/2011
5/31/2010
2011
2010
Net sales
$2,860
$1,860
$9,938
$6,759
Gross margin
$995
$688
$3,122
$1,693
% of net sales
35%
37%
31%
25%
Net earnings
$649
$396
$2,515
$827
% of net sales
23%
21%
25%
12%
Diluted EPS
$1.45
$0.89
$5.62
(a)
$1.85
Effective tax rate
22%
26%
23%
29%
Cash flow provided by operations
$973
$532
$2,427
$1,356
Cash and cash equivalents
as of May 31, 2011 & 2010
$3,906
$2,523 |
 Potash Segment Highlights
Slide 8
In millions, except MOP price
Q4 FY11
Q3 FY11
Q4 FY10
Net sales
$982
$758
$697
Gross Margin
$515
$412
$378
% of net sales
52%
54%
54%
Operating earnings
$469
$414
$347
Sales volumes
2.2
1.9
1.8
Production volume
2.2
2.0
1.9
Avg MOP selling price
$404
$358
$336
Fourth quarter year over year highlights:
•
Operating earnings improvement due to increased selling prices and volumes,
partially offset by higher Canadian resource taxes and royalties
•
Operating rate 95% vs. 85% a year ago
•
Continued progress with potash expansion program with first projects now coming
on-line 0
100
200
300
400
500
600
700
Q4 FY10 OE
Sales
price
Sales
volumes
Resource
taxes
Other
Q4 FY11 OE
OPERATING EARNINGS BRIDGE
$ IN MILLIONS |
 Phosphates Segment Highlights
Slide 9
In millions, except dap price
Q4 FY11
Q3 FY11
Q4 FY10
Net sales
$1,882
$1,458
$1,188
Gross Margin
$479
$454
$307
% of net sales
25%
31%
26%
Operating earnings
$370
$372
$221
Sales volumes
2.8
2.4
2.3
NA production volume
(a)
2.1
2.0
1.9
Avg DAP selling price
$574
$543
$438
Fourth quarter year over year highlights:
•
Increase in operating earnings due mainly to higher selling prices, partially
offset by higher raw material costs
•
Sales volumes increase driven by higher international sales
•
Finished product operating rate of 86% vs. 79% a year ago
(a)
Includes crop nutrient dry concentrates and animal feed ingredients
0
100
200
300
400
500
600
700
Q4 FY10 OE
Sales
price
Raw
materials
Other
Q4 FY11 OE
OPERATING EARNINGS BRIDGE
$ IN MILLIONS |
 Category
Guidance
Potash
Q1 Sales volume 1.7 –
1.9 million tonnes
Q1 MOP selling price $430 -
$455 per tonne
Q1 Operating rate between 75% and 85%
Phosphates
Q1 Sales volume 3.0 –
3.3 million tonnes
Q1 DAP selling price $560 -
$590 per tonne
Q1 Operating rate above 85%
Capital Expenditures
$1.6 -
$1.9 billion
Canadian Resource Taxes and Royalties
$420
–
$470
million
SG&A
$400
–
$430
million
Effective Tax Rate
Upper 20 percent range
Financial Guidance –
Fiscal 2012
Slide 10 |
 Fiscal 2011 guidance $1.6 to $1.9
billion
Potash:
Investment levels remain high
for several years
2012 DD&A up ~$50 million as
projects come on-line
Phosphates initiatives:
Operational efficiencies
Increasing MicroEssentials®
production capacity
Investing for Growth
Slide 11
0.0
0.5
1.0
1.5
2.0
2007
2008
2009
2010
2011
2012F
CAPITAL EXPENDITURES
$ IN BILLIONS
Sustaining
Opportunity
Potash Expansion
FISCAL YEAR |
 The Mosaic Company
Thank you for joining us today |
 Mining, production and DD&A costs
ranged $1.4 to $1.5 billion for the past
few years, regardless of volume
Blends and Other volumes about 30
percent of segment sales volumes,
though this varies quarter to quarter
Historic gross margin of 5 to 8 percent
for Blends and Other categories
Raw material costs generally lag market
pricing by 1 to 2 months
Appendix 1:
Phosphates Segment Cost Analysis
Slide 13
0
1
2
3
4
5
6
7
2008
2009
2010
2011
COMPONENTS OF COST OF GOODS SOLD
$ IN BILLIONS
Mining, production and DD&A
Raw materials & all other
PhosChem non-Mosaic
FISCAL
YEAR |
 Appendix 2:
Earnings
Sensitivity
to
Key
Drivers
(a)
Change
Estimated Change in
Pre-Tax Earnings
($ in millions)
Estimated
Change in Annual
EPS
MOP Price ($/tonne)
$50
$368
$0.59
Potash Volume (000 tonnes)
500
$157
$0.25
DAP Price ($/tonne)
$50
$412
$0.66
Phosphates Volume (000 tonnes)
500
$92
$0.15
Sulfur ($/lt)
$25
$173
$0.28
Ammonia ($/tonne)
$25
$77
$0.12
Natural Gas ($/mmbtu)
$1.00
$36
$0.06
(a)
These factors do not change in isolation; actual results could vary from the above
estimates Slide 14 |