The Mosaic Company Reports First Quarter Fiscal 2013 Results

         The Mosaic Company Reports First Quarter Fiscal 2013 Results

Net earnings were $429 million, or $1.01 per share

PR Newswire

PLYMOUTH, Minn., Oct. 2, 2012

PLYMOUTH, Minn., Oct. 2, 2012 /PRNewswire/ -- The Mosaic Company (NYSE: MOS)
reported first quarter fiscal 2013 net earnings of $429 million, compared to
$526 million a year ago. Earnings per diluted share were $1.01 in the quarter
compared to $1.17 last year. The year-over-year decline was primarily driven
by lower phosphate volumes and prices. In the first quarter of 2013, earnings
per diluted share were negatively impacted by notable items totaling $0.02.
Mosaic's net sales in the first quarter of fiscal 2013 were $2.5 billion, down
from $3.1 billion last year also primarily driven by lower phosphate volumes
and prices.

"The long-term outlook for crop nutrition is outstanding, and Mosaic is well
positioned as the world's largest potash and phosphates producer," said Jim
Prokopanko, President and Chief Executive Officer of Mosaic. "Drought and
other weather-related issues in several of the world's key agricultural
regions severely impacted this year's corn, soybean and wheat crops and
provided a vivid reminder of just how tenuous global food security is. Our
products are essential in helping the world grow the food it needs."

Mosaic's gross margin for the first quarter of fiscal 2013 was $747 million,
or 30 percent of net sales, compared to $848 million, or 28 percent of net
sales, a year ago. First quarter operating earnings were $610 million, a
decrease of 16 percent compared to $730 million a year ago. The decreases in
gross margin and operating earnings were primarily driven by lower phosphate
net sales. Cash flow provided by operating activities in the first quarter of
fiscal 2013 was $339 million compared to $554 million in the prior year. Cash
flow in the current quarter was negatively impacted by higher inventories and
a sequential decline in customer prepayments. Capital expenditures totaled
$449 million in the quarter. Mosaic's total cash and cash equivalents were
$3.6 billion and long-term debt was $1.0 billion as of August 31, 2012.

Quarterly Business Highlights

  oPotash expansion projects continue to be on time and on budget with
    expenditures of $158 million in the quarter.
  oMosaic achieved a record low quarterly recordable injury frequency rate
    during the quarter, continuing to build upon the improvements made last
    year.
  oMosaic ramped up production at South Fort Meade to full capacity,
    replenished phosphate rock inventory and plans to resume shipping rock to
    its facilities in Louisiana in the second fiscal quarter.
  oThe Company made substantial operational improvements related to water use
    at the Riverview phosphates plant, avoiding a planned $50 million capital
    improvement in a reverse osmosis water treatment plant, which resulted in
    a $7 million write off of investments to date.
  oThe Company has committed additional capital to continue the feasibility
    work to expand the Company's ammonia production capacity.
  oMosaic launched "Pursuit of 300(SM):The Road To Higher Yields", a program
    that uses farmers' real-world experiences as a launch pad for agronomists,
    researchers, retailers and industry stakeholders to create the next
    generation of cropping systems.

Phosphates
Phosphates Results         1Q FY13 Actual            1Q FY13 Guidance
Average DAP selling price  $529                      $510 to $535
Sales volume               2.7 million tonnes        2.5 to 2.8 million tonnes
Processed phosphate        81% of operational        75%+ of operational
production                 capacity                  capacity

"The phosphate market continues to be tight, with low producer inventories and
supply uncertainties," Prokopanko said. "During the quarter our production was
impacted by longer annual maintenance shut-downs and challenges posed by
hurricanes, and our sales were further impacted by low beginning inventories
and low Mississippi River levels. As a result, demand for our products
outpaced our ability to produce and deliver; we expect better execution in the
quarters ahead."

Net sales in the Phosphates segment were $1.6 billion for the first quarter,
down 30 percent compared to last year, driven by lower sales volumes and lower
prices of finished product. Sales volumes were lower as a result of low
beginning inventory levels and reduced production due to planned turnarounds
and inclement weather. Gross margin was $288 million, or 18 percent of net
sales, compared to $410 million, or 18 percent, for the same period a year
ago. Sequentially, the flat gross margin rate reflects the benefit of lower
rock costs from the ramp-up of South Fort Meade, offset by higher ammonia
costs, lower concentrate operating rates and a higher mix of lower margin
blend products. Operating earnings were $208 million, down 38 percent compared
to $333 million last year.

The first quarter average DAP selling price, FOB plant, was $529 per tonne,
compared to $576 a year ago. Phosphates segment total sales volumes were 2.7
million tonnes, compared to 3.2 million tonnes a year ago.

Phosphate rock production in Florida was 3.8 million metric tonnes in the
quarter compared to 2.8 million tonnes last year. Mosaic's North American
finished phosphate production was 2.0 million tonnes, or 81 percent of
operational capacity, down from 2.2 million tonnes a year ago. Longer annual
maintenance shut-downs and Hurricane Isaac were the primary drivers of lower
production volumes.

Potash
Potash Results           1Q FY13 Actual             1Q FY13 Guidance
Average MOP selling      $444                       $415 to $440
price
Sales volume             1.9 million tonnes         1.8 to 2.2 million tonnes
Potash production        65% of operational         70+% of operational
                         capacity                   capacity

"We entered the quarter with higher inventory levels in anticipation of
planned summer shutdowns, which were longer this year primarily due to tie-ins
related to our expansion projects. During the quarter we saw soft demand in
India and China, and in response, we slowed production. While contracts with
India and China still need to be resolved, North American dealer sentiment is
improving and producer inventories are declining. We continue to expect strong
global demand," said Prokopanko.

Net sales in the Potash segment totaled $960 million for the first quarter, up
ten percent compared to $873 million a year ago, primarily driven by higher
volumes. Gross margin was $459 million, or 48 percent of net sales, compared
to $444 million, or 51 percent of net sales, a year ago. Gross margin
excluding resource taxes and royalties, a measure comparable to certain peer
reporting, was 56 percent in the first quarter compared to 62 percent a year
ago. The year-over-year decrease in gross margin percent was primarily driven
by higher brine management costs, higher depreciation expense, as well as the
effects of lower operating rates, partially offset by $34 million benefit from
unrealized gains on derivatives. Operating earnings were $416 million, up 4
percent compared to $402 million in the prior year.

The first quarter average MOP selling price, FOB plant, was $444 per tonne,
essentially flat with a year ago. The Potash segment's total sales volumes for
the first quarter were 1.9 million tonnes, compared to 1.8 million tonnes a
year ago.

Potash production was 1.5 million tonnes, or 65 percent of operational
capacity, down from 1.9 million tonnes, or 81 percent a year ago, due to
longer planned turnarounds and weak international demand for standard product.

Other

Selling, general and administrative expenses were $112 million for the first
quarter, an increase from $101 million a year ago. Equity compensation and
higher accruals for incentive compensation drove $9 million of the
year-over-year increase. Other operating expenses were $25 million for the
first quarter compared to $18 million a year ago. The current period included
a $10 million cost and a $7 million cost related to a legal expense accrual
and the Riverview reverse osmosis write-off, respectively. The prior year
period included $8 million of expense related to the Cargill transaction.

Financial Guidance

"While current sentiment is being affected by volatile markets and challenging
weather conditions, farm economics remain compelling. Crop nutrients have
never been more affordable, and farmers around the world continue to have
strong incentives to use our products to increase crop yields. Our capital
strength, global reach and unique asset base position us well to continue to
help the world grow the food it needs while generating long-term shareholder
value," said Prokopanko.

Total sales volumes for the Potash segment are expected to range from 1.6 to
1.9 million tonnes for the second quarter of fiscal 2013. Reaching the upper
end of the potash volume range will depend upon shipments to India and China.
Mosaic's realized MOP price, FOB plant, for the second quarter of fiscal 2013
is estimated to range from $420 to $450 per tonne.

Total sales volumes for the Phosphates segment are expected to range from 3.0
to 3.4 million tonnes for the second quarter of fiscal 2013. Achieving the top
end of the phosphates volume range will depend upon a strong fall application
season as well as improved execution. Mosaic's realized DAP price, FOB plant,
for the second quarter of fiscal 2013 is estimated to range from $520 to $550
per tonne, reflecting tight market dynamics. Segment gross margin percentage
in the second fiscal quarter is expected to be about flat with the first
fiscal quarter.

The fiscal 2013 second quarter operating rate in the Potash segment is
expected to be above 70 percent of operational capacity.

The Company's operating rate at its North American phosphate operations is
expected to exceed 80 percent of operational capacity during the second
quarter of fiscal 2013.

Previously reported annual guidance:

1.The Company continues to advance its brownfield potash expansion plans at
    its three Saskatchewan, Canada mine sites and to fund projects that
    improve efficiencies. Total capital spending for fiscal 2013 is expected
    to range from $1.5 to $1.8 billion.
2.SG&A expenses are estimated to range from $420 to $445 million in fiscal
    2013.
3.Canadian resource taxes and royalties for fiscal 2013 are expected to
    range from $320 to $380 million. Canadian resource taxes and royalties are
    included as a component of cost of goods sold for Potash.
4.Mosaic estimates an effective income tax rate in the upper 20 percent
    range.

The Mosaic Company is one of the world's leading producers and marketers of
concentrated phosphate and potash crop nutrients. Mosaic is a single source
provider of phosphate and potash fertilizers and feed ingredients for the
global agriculture industry. More information on the Company is available at
www.mosaicco.com.

Mosaic will conduct a conference call on Tuesday, October 2, 2012 at 9:00 a.m.
EDT to discuss first quarter earnings results as well as global markets and
trends. Presentation slides and a simultaneous audio webcast of the conference
call may be accessed through Mosaic's website at www.mosaicco.com/investors.
This webcast will be available up to one year from the time of the earnings
call.

This press release 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, implementation
of the U.S. Environmental Protection Agency's numeric water quality standards
for the discharge of nutrients into Florida lakes and streams or possible
efforts to reduce the flow of excess nutrients into the Gulf of Mexico;
further developments in judicial or administrative proceedings; difficulties
or delays in receiving, increased costs of or challenges to necessary
governmental permits or approvals or increased financial assurance
requirements; resolution of global tax audit activity; 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 regulation, or Canadian resources 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.

For the first quarter of fiscal 2013, the Company recorded the following
notable items:

                                                      Amount       EPS impact
Description              Segment      Line item
                                                      (in         (fully
                                                      millions)    diluted)
Write off of Riverview                Other operating $       $     
Reverse Osmosis          Phosphates   expense           7         0.01
(pre-engineering)
Legal Reserve Expense    Corporate    Other operating 10           0.02
                                      expense
Unrealized gain on       Potash       Cost of goods   (34)         (0.06)
derivatives                           sold
                                      Foreign
Unrealized & realized    Consolidated currency        28           0.05
loss on translation                   transaction
                                      loss
                                                      $       $     
                                                       11         0.02



For the first quarter of fiscal 2012, the Company recorded the following
notable items:

                                                    Amount         EPS impact
Description           Segment      Line item
                                                    (in           (fully
                                                    millions)      diluted)
Unrealized loss on    Phosphates   Cost of goods    $        $     
derivatives                        sold              4             0.01
Unrealized loss on    Potash       Cost of goods    9              0.01
derivatives                        sold
Unrealized & realized Consolidated Foreign currency 6              0.01
loss on translation                transaction loss
Cargill split-off     Corporate    Other operating  8              0.01
transaction expenses               expense
                                                    $        $     
                                                    27             0.04

Condensed Consolidated Statements of Earnings

(in millions, except per share amounts)
The Mosaic Company                                          (unaudited)
                                                            Three months ended
                                                            August 31,
                                                            2012       2011
 Net sales                                                $ 2,505.1  $ 3,083.3
 Cost of goods sold                                         1,757.8    2,235.1
 Gross margin                                               747.3      848.2
 Selling, general and administrative expenses               111.7      101.1
 Other operating expense                                    25.4       17.5
 Operating earnings                                         610.2      729.6
 Interest income, net                                       5.9        5.1
 Foreign currency transaction (loss)                        (28.3)     (5.7)
 Other (expense) income                                     (1.0)      0.7
 Earnings from consolidated companies before income taxes   586.8      729.7
 Provision for income taxes                                 163.3      205.1
 Earnings from consolidated companies                       423.5      524.6
 Equity in net earnings of nonconsolidated companies        7.2        1.8
 Net earnings including noncontrolling interests            430.7      526.4
 Less: Net earnings attributable to noncontrolling          1.3        0.4
 interests
 Net earnings attributable to Mosaic                      $ 429.4    $ 526.0
    Basic net earnings per share attributable to Mosaic   $ 1.01     $ 1.18
    Diluted net earnings per share attributable to Mosaic $ 1.01     $ 1.17
    Basic weighted average number of shares outstanding     425.5      446.6
    Diluted weighted average number of shares outstanding   426.7      447.9



Condensed Consolidated Balance Sheets

(in millions, except per share amounts)
The Mosaic Company                                                 (unaudited)
                                                        August 31,    May 31,
                                                        2012          2012
Assets
Current assets:
 Cash and cash equivalents                            $ 3,594.8     $ 3,811.0
 Receivables, net                                       732.0         751.6
 Inventories                                            1,484.4       1,237.6
 Deferred income taxes                                  237.8         237.8
 Other current assets                                   491.9         543.1
  Total current assets                             6,540.9       6,581.1
Property, plant and equipment, net of accumulated
depreciation
 of $3,443.9 million and $3,284.2 million,              7,944.3       7,545.9
 respectively
Investments in nonconsolidated companies                445.2         454.2
Goodwill                                                1,889.5       1,844.4
Deferred income taxes                                   46.4          50.6
Other assets                                            203.8         214.2
  Total assets                                    $ 17,070.1    $ 16,690.4
Liabilities and Equity
Current liabilities:
 Short-term debt                                      $ 17.6        $ 42.5
 Current maturities of long-term debt                   0.6           0.5
 Accounts payable                                       801.3         912.4
 Accrued liabilities                                    795.6         899.9
 Deferred income taxes                                  61.0          62.4
  Total current liabilities                         1,676.1       1,917.7
Long-term debt, less current maturities                 1,010.9       1,010.0
Deferred income taxes                                   817.6         787.9
Other noncurrent liabilities                            985.7         975.4
Equity:
 Preferred stock, $0.01 par value, 15,000,000 shares
 authorized,
  noneissued and outstanding as of August 31, 2012
 and May 31,                                            -             -
  2012
 Class A common stock, $0.01 par value, 254,300,000
 shares
  authorized,150,059,772 shares issued and
 128,759,772 shares
 outstanding as of August 31, 2012 and May           1.3           1.3
 31,2012
 Class B common stock, $0.01 par value, 87,008,602
 shares
 authorized,noneissued and outstanding as of
 August 31, 2012                                        -             -
 and May 31, 2012
 Common stock, $0.01 par value, 1,000,000,000 shares
 authorized,
 308,920,267shares issued and 296,881,805 shares
 outstanding
  as of August 31, 2012,308,749,067 shares issued
 and 296,710,605                                        3.0           3.0
 shares outstanding as of May 31, 2012
 Capital in excess of par value                         1,476.3       1,459.5
 Retained earnings                                      10,464.1      10,141.3
 Accumulated other comprehensive income                 617.7         378.0
  Total Mosaic stockholders' equity                    12,562.4      11,983.1
 Noncontrolling interests                               17.4          16.3
  Total equity                                         12,579.8      11,999.4
  Total liabilities and equity                       $ 17,070.1    $ 16,690.4





Condensed Consolidated Statements of Cash Flows

(in millions)
The Mosaic Company                                          (unaudited)
                                                            Three months ended
                                                            August 31,
                                                            2012       2011
 Cash Flows from Operating Activities:
   Net earnings including noncontrolling interests        $ 430.7    $ 526.4
   Adjustments to reconcile net earnings including
   noncontrolling interests to net cash provided
     by operating activities:
       Depreciation, depletion and amortization             137.4      120.3
       Deferred income taxes                                30.4       52.6
       Equity in net earnings of nonconsolidated            9.3        0.7
       companies, net of dividends
       Accretion expense for asset retirement obligations   8.1        7.1
       Share-based compensation expense                     17.8       13.8
       Unrealized loss (gain) on derivatives                (41.3)     17.3
       Other                                                14.1       (0.5)
   Changes in assets and liabilities:
       Receivables, net                                     11.5       130.6
       Inventories                                          (246.4)    (135.8)
       Other current and noncurrent assets                  72.8       1.5
       Accounts payable                                     (28.0)     (34.2)
       Accrued liabilities and income taxes                 (79.1)     (130.0)
       Other noncurrent liabilities                         2.0        (15.5)
           Net cash provided by operating activities        339.3      554.3
 Cash Flows from Investing Activities:
       Capital expenditures                                 (449.1)    (391.4)
       Restricted cash                                      4.9        (1.5)
       Other                                                0.4        0.4
           Net cash used in investing activities            (443.8)    (392.5)
 Cash Flows from Financing Activities:
       Payments of short-term debt                          (33.5)     (25.3)
       Proceeds from issuance of short-term debt            8.5        15.3
       Payments of long-term debt                           (0.2)      (1.8)
       Proceeds from issuance of long-term debt             1.1        5.3
       Proceeds from stock option exercise                  1.7        1.2
       Dividends                                            (106.6)    (22.4)
       Other                                                (2.8)      (1.1)
           Net cash used in financing activities            (131.8)    (28.8)
 Effect of exchange rate changes on cash                    20.1       (1.4)
 Net change in cash and cash equivalents                    (216.2)    131.6
 Cash and cash equivalents - beginning of period            3,811.0    3,906.4
 Cash and cash equivalents - end of period                $ 3,594.8  $ 4,038.0
 Supplemental Disclosure of Cash Flow Information:
       Cash paid during the period for:
           Interest (net of amount capitalized of $13.1
           and $14.4 as of August 31,
           2012 and 2011, respectively)                   $ 3.9      $ 13.9
           Income taxes (net of refunds)                  $ 82.3     $ 150.1





Key Statistics
The Mosaic Company                                                (unaudited)
 Potash Gross Margin, Excluding Resource Taxes and Royalties, Calculation
                                                            Three months ended
                                                            August 31,
                                                            2012        2011
 Sales                                                    $ 959.8    $  873.0
 Gross margin                                               459.3       444.4
 Canadian resource taxes                                    69.7        79.4
 Canadian royalties                                         12.4        16.1
 Gross margin, excluding Canadian resource taxes and      $ 541.4    $  539.9
 royalties (CRT)
 Gross margin percentage, excluding CRT                     56.4%       61.8%
 The Company's margins are further reduced by the impact of a third party
 tolling agreement.

The Company has presented above gross margin excluding Canadian resource taxes
and royalties ("CRT") for Potash which is a non-GAAP financial
measure.Generally, a non-GAAP financial measure is a supplemental numerical
measure of a company's performance, financial position or cash flows that
either excludes or includes amounts that are not normally excluded or included
in the most directly comparable measure calculated and presented in accordance
with U.S. generally accepted accounting principles ("GAAP"). Gross margin
excluding CRT is not a measure of financial performance under GAAP. Because
not all companies use identical calculations, investors should consider that
Mosaic's calculation may not be comparable to other similarly titled measures
presented by other companies.

Gross margin excluding CRT provides a measure that the Company believes
enhances the reader's ability to compare the Company's gross margin with that
of other companies which incur CRT expense and classify it in a manner
different than the Company in their statement of earnings. Because securities
analysts, investors, lenders and others use gross margin excluding CRT, the
Company's management believes that Mosaic's presentation of gross margin
excluding CRT for Potash affords them greater transparency in assessing
Mosaic's financial performance against competitors. Gross margin excluding
CRT, should not be considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP.

SOURCE The Mosaic Company

Website: http://www.mosaicco.com
Contact: Media, Rob Litt, +1-763-577-6187, rob.litt@mosaicco.com or Investors,
Laura Gagnon, +1-763-577-8213, investor@mosaicco.com, both of The Mosaic
Company
 
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