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Q3 2009 Earning Report of The Mosaic Company
- 1. Mosaic’s 1st QuarterFiscal 2010 Earnings and Conference Call Tuesday, October 6, 2009 Jim Prokopanko, President and CEO Dr. Mike Rahm, VP Market Analysis & Strategic Planning Christine Battist, Director - Investor Relations
- 2. Safe Harbor Statement Thispresentation 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 build-up 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; difficulties or delays in receiving, or increases costs of, necessary governmental permits or approvals; 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. Slide 2
- 3. Mosaic’s 1st QuarterFiscal 2010
- 4. Financial Results Three Months Ended 08/31/09 08/31/08 (In millions, except per share amounts) Net Sales $1,457.2 $4,322.5 Gross Margin $222.2 $1,648.6 (% o f net sales) 15% 38% Net Earnings $100.6 $1,184.7 (% o f net sales) 7% 27% Diluted EPS $0.23 $2.65 Effective Tax Rate 25% 31% Cash Flow from Operations $172.4 $561.5 Cash and Cash Equivalents as of August 31, 2009 & 2008 $2,598.7 $2,703.2 Slide 4
- 5. Financial Results bySegment Three Months Ended (in millions) 08/31/09 08/31/08 Potash Net Sales $333.3 $976.4 Operating Earnings $99.3 $477.8 Phosphates Net Sales $814.4 $2,592.8 Operating Earnings $61.2 $950.8 Offshore Net Sales $468.1 $1,048.0 Operating Earnings (Loss) ($8.0) $159.0 Corporate/Other Net Sales (Eliminations) ($158.6) ($294.7) Operating Earnings (Loss) ($18.3) ($38.7) Total Net Sales $1,457.2 $4,322.5 Operating Earnings $134.2 $1,548.9 Slide 5
- 6. Financial Guidance 2nd Qtr FY 2010 FY 2010 Phosphate Sales Volume 1.8 - 2.2 million tonnes DAP Selling Price $265 - $305 / tonne Capital Spending $1.0 billion - $1.2 billion SG&A $350 - $370 million Effective Tax Rate High 20% range Note: Mosaic is not providing financial guidance on potash sales volumes or MOP selling price until market conditions stabilize Slide 6
- 7. Mosaic’s 1st QuarterFiscal 2010
- 8. Potash Strategic Priorities ExpansionThrough Brownfields Potash demand growth Excellent potash reserves Multi-staged expansions underway Attractive returns Slide 8
- 9. Phosphate Strategic Priorities Maintain Competitive Position Leverage scale, location and integration Optimize operational excellence Energy usage and generation Automation Maintenance practices Capital deployment Manufacturing processes Extend phosphate reserves Slide 9
- 10. Mosaic’s 1st QuarterFiscal 2010
- 11. Global Economic RecoveryUnderway World GDP Growth 7.0% Source: IHS Global Insight 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% GDP Grow th 1990-2008 CAGR = 2.9% 2004-07 CAGR = 3.9% -3.0% 70 75 80 85 90 95 00 05 10 Slide 11
- 12. Led by Chinaand India GDP Growth Three Largest Asian Countries by Population 13% Source: IHS Global Insight 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 00 01 02 03 04 05 06 07 08 09 10 11 12 China India Indonesia Slide 12
- 13. Continued Strong Grainand Oilseed Demand Growth Bil Tonnes World Grain and Oilseed Production and Use 2.8 Source: USDA and Mosaic (for 10/11 scenarios) 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2.0 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 10/11 10/11 Production Use L M H Slide 13
- 14. Global Stocks StillNot Secure Mil Tonnes Days Use World Grain and Oilseed Stocks 650 120 Source: USDA and Mosaic (for 10/11 scenarios) 600 110 550 100 500 90 450 80 400 70 350 60 300 50 250 40 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 10/11 10/11 Stocks Days of Use L M H Slide 14
- 15. Futures Markets Agree $BU New Crop Corn Prices $ BU New Crop Soybean Prices Daily Close of New Crop Options January 2, 2009 to September 30, 2009 Daily Close of New Crop Options January 2, 2009 to September 30, 2009 5.00 11.00 4.75 10.50 4.50 10.00 4.25 9.50 4.00 9.00 3.75 8.50 Source: CBOT Source: CBOT 3.50 8.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Jan Feb Mar Apr May Jun Jul Aug Sep Oct Dec 2010 Dec 2011 Dec 2012 Nov 2010 Nov 2011 Nov 2012 Slide 15
- 16. A Tale ofTwo Crops Mil Tonnes Bil Tonnes U.S. Grain and Oilseed Production and Use World less U.S. Grain and Oilseed Production and Use 550 2.20 Source: USDA Source: USDA 2.15 500 2.10 2.05 450 2.00 400 1.95 1.90 350 1.85 1.80 300 1.75 250 1.70 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Production Use Production Use Slide 16
- 17. China: The Challengeto Boost Crop Yields Mil Tonnes China Grain and Oilseed Production and Use Mil Tonnes China MOP Import Demand 510 10 Source: USDA Source: Fertecon and Mosaic 490 9 470 8 7 450 6 430 5 410 4 390 3 370 2 350 1 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 0 Production Use 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09F Slide 17
- 18. India: Full SteamAhead for the Rabi Crop Mil Tonnes India Grain and Oilseed Production and Use $ Ha Return After Variable Cost 255 for an Indian Farm Operation Source: USDA $1,200 245 Source: Mosaic India $1,000 235 225 $800 215 $600 205 $400 195 $200 185 $0 175 2005 2006 2007 2008 2009F 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Rice Wheat Production Use Slide 18
- 19. South America: APoor 2009 Harvest Argentina Grain and Oilseed Harvested Area and Yield Mil Tonnes Mil Ha MT Ha Brazil Grain and Oilseed Production and Use 32 3.4 145 Source: USDA Source: USDA 135 30 3.2 125 28 3.0 115 26 2.8 105 24 2.6 95 22 2.4 85 20 2.2 75 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Harvested Area Yield Production Use Slide 19
- 20. South America: DecentIncentives for 2010 Crop $ Ha Return After Variable Cost Return After Variable Cost $ Ha for an Argentina Farm Operation for a Brazilian Farm Operation $600 Source: Mosaic Argentina $600 Source: Mosaic Brazil $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $0 $0 -$100 2005/06 2006/07 2007/08 2008/09 2009/10F 2005/06 2006/07 2007/08 2008/09 2009/10F Soybeans in Pergam ino Corn in South Santa Fe Wheat in East Buenos Aires Soybeans in Mato Grosso Corn in Parana Sugar Cane in São Paulo Slide 20
- 21. We Expect aStrong Demand Recovery Mil Tonnes World Processed Phosphate Import Demand Mil Tonnes World MOP Import Demand (Excludes China) (Excludes the United States and Europe) 25 35 Source: Fertecon, IFA and Mosaic Source: Fertecon and Mosaic 23 W Europe Asia Less China 30 20 Oceania L America Asia Latin America Other Other 25 18 15 20 13 15 10 8 10 5 5 3 0 0 95 96 97 98 99 00 01 02 03 04 05 06 07 08E 09F 10F 95 96 97 98 99 00 01 02 03 04 05 06 07 08E 09F 10F Slide 21
- 22. Mosaic’s 1st QuarterFiscal 2010
- 23. Mosaic Positioned forDemand Recovery Global economic recovery underway • GDP growth • Led by China, India and Indonesia • More income = more grain intensive Positive outlook for agriculture • Continued strong grain and oilseed demand growth • Production challenges in key countries Mosaic strategic plan underway • Grow potash through expansions • Maintain competitive position in phosphates • Align distribution with production assets Slide 23
- 24. Mosaic’s 1st QuarterFiscal 2010 Thank you
- 25. Mosaic’s Annual ShareholdersMeeting October 8, 2009, in Regina, Saskatchewan 10:00 a.m. CST (12:00 noon EDT) To view the webcast, please visit www.mosaicco.com/investors