The Mosaic Company Reports Third Quarter Fiscal 2013 Results

         The Mosaic Company Reports Third Quarter Fiscal 2013 Results

PR Newswire

PLYMOUTH, Minn., March 28, 2013

PLYMOUTH, Minn., March 28, 2013 /PRNewswire/ --The Mosaic Company (NYSE: MOS)
reported third quarter fiscal 2013 net earnings of $345 million, compared to
$273 million a year ago. Earnings per diluted share were $0.81 in the quarter
compared to $0.64 last year. The current year quarter included a $44 million,
or $0.07 per share, negative impact from notable items. Operating earnings
during the quarter were $419 million, roughly flat with $414 million a year
ago. Mosaic's net sales in the third quarter of fiscal 2013 were $2.24
billion, up from $2.19 billion last year, driven by higher potash and
phosphate volumes.

"As we emerge from the traditionally slow third fiscal quarter, we are seeing
strong demand and improving sentiment in most of our geographies," said Jim
Prokopanko, President and Chief Executive Officer of Mosaic. "Global farm
economics remain compelling, with continuing attractive commodity prices and
low costs for critical crop inputs. Economic and demographic trends are
extremely promising for Mosaic, and the Company's long-term prospects are
excellent."

Mosaic's gross margin for the third quarter of fiscal 2013 was $568 million,
or 25 percent of net sales, compared to $522 million, or 24 percent of net
sales, a year ago. The improvement in gross margin was primarily driven by
higher potash volumes and lower phosphate raw material costs. Cash flow
provided by operating activities in the third quarter of fiscal 2013 was $371
million compared to $405 million in the prior year. Capital expenditures
totaled $398 million in the quarter. Mosaic's total cash and cash equivalents
were $3.3 billion and long-term debt was $1.0 billion as of February 28, 2013.

Quarterly Business Highlights

  oSubsequent to quarter end, the Company entered into an agreement to
    participate in the Ma'aden Phase II phosphate project with an investment
    of both capital and technical expertise.
  oThe Potash expansion program continues to be on time and on budget with
    capital spending of $77 million in the quarter. Of the approximately $1
    billion remaining board approved expansion program, over 80% is related to
    Esterhazy K3:

       oShaft sinking is well underway at the Esterhazy K3 site.
       oThe Colonsay underground expansion will be operational during the
         second half of calendar 2013.

  oMosaic phosphate rock production in Florida increased to 3.6 million
    tonnes in the quarter, up 24 percent compared to the prior year quarter.
    South Fort Meade produced at near record levels during the quarter and is
    on pace to deliver over 5.5 million tonnes in fiscal 2013.
  oMicroEssentials^® share of North American phosphate sales year-to-date
    fiscal 2013 continued to track above ten percent.
  oMosaic's recordable injury frequency rate continued to improve by building
    on last year's record performance.
  oFor the second straight year, Mosaic was named to the Ethisphere
    Institute's list of the World's Most Ethical Companies.

Potash

Potash Results           3Q FY13 Actual             3Q FY13 Guidance
Average MOP selling      $385                       $370 to $400
price
Sales volume             1.8 million tonnes         1.5 to 1.8 million tonnes
Potash production        78% of operational         70+% of operational
                         capacity                   capacity

"Following the signing of India and China contracts, which delivered better
than expected demand from these two countries, we saw improving potash
fundamentals and sentiment around the world," said Prokopanko. "We expect
producer inventories to be drawn down in coming months as North American
dealers prepare for what is likely to be a very strong application season and
Canpotex delivers against these base load contracts." 

Net sales in the Potash segment totaled $758 million for the third quarter, up
37 percent compared to $553 million a year ago, driven by significantly higher
volumes, partially offset by lower prices. Gross margin was $308 million, or
41 percent of net sales, compared to $270 million, or 49 percent of net sales,
a year ago. The year-over-year decline in gross margin rate is primarily
driven by lower realized potash prices, an unrealized loss on derivatives, and
higher depreciation and increased labor expenses as the Company prepares to
bring on new production capacity. Additionally, the year-over-year change in
gross margin rate was negatively impacted by approximately four percentage
points due to the timing of Canpotex shipments. Operating earnings were $216
million, down eight percent, compared to $234 million in the prior year. The
current quarter included a $42 million charge related to the settlement of the
potash anti-trust litigation.

The third quarter average MOP selling price, FOB plant, was $385 per tonne,
down from $453 per tonne from a year ago. The Potash segment's total sales
volumes for the third quarter were 1.8 million tonnes, compared to 1.1 million
tonnes a year ago.

Potash production was 2.0 million tonnes, or 78 percent of operational
capacity, up from 1.8 million tonnes last year.

Phosphates

Phosphates Results         3Q FY13 Actual            3Q FY13 Guidance
Average DAP selling price  $496                      $485 to $515
Sales volume               2.6 million tonnes        2.5 to 2.8 million tonnes
Processed phosphate        87% of operational        80%+ of operational
production                 capacity                  capacity

"The supply and demand outlook for phosphates remains in balance," Prokopanko
said. "While we don't expect India to come back to the market until later this
year, recent price strengthening in Tampa exports reinforces our positive
outlook. Over the long run, we maintain an optimistic view of phosphates, as
evidenced by our recently announced joint venture with Ma'aden."

Net sales in the Phosphates segment were $1.5 billion for the third quarter,
down nine percent compared to last year, primarily driven by lower prices of
finished product. Gross margin was $266 million, or 18 percent of net sales,
compared to $259 million, or 16 percent, for the same period a year ago. The
year over year improvement in gross margin rate was driven by lower raw
material costs, partially offset by lower finished phosphate product prices.
Operating earnings were $197 million, up four percent compared to $190 million
last year.

The third quarter average DAP selling price, FOB plant, was $496 per tonne,
compared to $536 per tonne a year ago. Phosphates segment total sales volumes
were 2.6 million tonnes, flat with last year.

Phosphate rock production in Florida was 3.6 million tonnes in the quarter
compared to 2.9 million tonnes last year, reflecting increased production at
the South Fort Meade mine.

Mosaic's North American finished phosphate production was 2.1 million tonnes,
or 87 percent of operational capacity.

Other

Selling, general and administrative expenses were $90 million for the third
quarter, down slightly from $91 million a year ago.

Financial Guidance

"Our fiscal fourth quarter potash price guidance reflects a higher proportion
of international standard grade shipments and lower Canpotex contract prices
in India and China. In Phosphates, we expect average selling prices to be
flat, reflecting our success in navigating through the typical third quarter,
winter season pricing dip," said Prokopanko. "While quarter to quarter we see
volatility in shipments and pricing of our products, over the long term Mosaic
is well positioned to create shareholder value by executing against our
strategic priorities and refining our financial policy."

Total sales volumes for the Potash segment are expected to range from 2.3 to
2.6 million tonnes for the fourth quarter of fiscal 2013. Mosaic's realized
MOP price, FOB plant, for the fourth quarter of fiscal 2013 is estimated to be
in a range of $350 to $380 per tonne, reflecting a substantially higher mix of
standard product. The segment gross margin percentage in the fourth fiscal
quarter is expected to be in the range of 40 to 45 percent as higher expected
operating rates are offset by lower expected average realized potash prices.
The fiscal 2013 fourth quarter operating rate in the Potash segment is
expected to be above 85 percent of operational capacity.

Brine management expenses are expected to be in the range of $245 to $260
million for the full fiscal year 2013.

Total sales volumes for the Phosphates segment are expected to range from 2.6
to 2.9 million tonnes for the fourth quarter of fiscal 2013. Mosaic's realized
DAP price, FOB plant, for the fourth quarter of fiscal 2013 is estimated to
range from $475 to $505 per tonne. The segment gross margin in the fourth
fiscal quarter is expected to be about flat with the third fiscal quarter. The
Company's operating rate at its North American phosphate operations is
expected to exceed 85 percent of operational capacity during the fourth
quarter of fiscal 2013.

Updates to previously reported annual guidance for fiscal 2013:

1.Total capital spending is expected to range from $1.5 to $1.6 billion,
    including approximately $700 to $800 million in sustaining capital.
2.SG&A expenses are estimated to range from $420 to $440 million.
3.Canadian Resource Taxes and Royalties are expected to range from $270 to
    $330 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 mid 20-percent range
    for the second half of fiscal 2013.

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 Thursday, March 28, 2013 at 9:00 a.m.
EDT to discuss third quarter earnings results as well as global markets and
trends. Presentation slides and a simultaneous virtual 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 numeric water quality standards for the discharge of nutrients into Florida
waterways or possible efforts to reduce the flow of excess nutrients into the
Mississippi River basin or the Gulf of Mexico; further developments in
judicial or administrative proceedings, or complaints that Mosaic's operations
are adversely impacting nearby business operations or properties; 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; the ability of
Mosaic, Ma'aden and SABIC to agree upon definitive agreements relating to the
prospective joint venture for the Wa'ad Al Shamal Phosphate Project, the final
terms of any such definitive agreements, the ability of the joint venture to
obtain project financing in acceptable amounts and upon acceptable terms, the
future success of current plans for the joint venture and any future changes
in those plans; adverse weather conditions affecting operations in Central
Florida or the Mississippi River basin or the Gulf Coast of the United States,
and including potential hurricanes, excess rainfall or drought; 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;
brine inflows at Mosaic's Esterhazy, Saskatchewan potash mine or other
underground mines; other accidents and disruptions involving Mosaic's
operations, including 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 third quarter of fiscal 2013, the Company reported the following
notable items which, combined, negatively impacted earnings per share by
$0.07:

                                                     Amount         EPS impact
Description      Segment      Line item
                                                     (pre-tax, in   (fully
                                                     millions)      diluted)
Potash antitrust Potash       Other operating      $ 42           $ 0.07
settlement                    expenses
Unrealized loss  Potash       Cost of goods sold     24             0.04
on derivatives
Foreign currency              Foreign currency
transaction      Consolidated transaction (gain)     (32)           (0.06)
(gain)                        loss
ARO Adjustment   Phosphates   Other operating        10             0.02
                              expenses
                                                   $ 44           $ 0.07
After-tax calculated using a 25% effective tax rate, per current company
guidance



For the third quarter of fiscal 2012, the Company reported the following
notable items which, combined, negatively impacted earnings per share by
$0.08:

                                                     Amount         EPS impact
Description      Segment    Line item
                                                     (pre-tax, in   (fully
                                                     millions)      diluted)
Insurance        Phosphates Cost of goods sold     $ (8)          $ (0.01)
proceeds
Insurance        Phosphates Other operating          (21)           (0.04)
proceeds                    expenses
South Fort Meade Phosphates Other operating          13             0.02
litigation costs            expenses
Foreign currency            Foreign currency
transaction loss Corporate  transaction (gain)       44             0.08
                            loss
Premium on bond  Corporate  Non-operating income     20             0.03
redemption
                                                   $ 48           $ 0.08
After-tax calculated using a 27% effective tax rate



Condensed Consolidated Statements of Earnings
(in millions, except per share amounts)
The Mosaic Company                                                (unaudited)
                              Three months ended      Nine months ended
                              February    February    February    February 29,
                              28,         29,         28,
                              2013        2012        2013        2012
Net sales                   $ 2,240.6   $ 2,189.5   $ 7,281.9   $ 8,287.3
Cost of goods sold            1,672.2     1,667.7     5,290.3     6,036.1
Gross margin                  568.4       521.8       1,991.6     2,251.2
Selling, general and          90.4        91.3        304.9       293.0
administrative expenses
Other operating expense       58.9        16.8        97.8        17.9
Operating earnings            419.1       413.7       1,588.9     1,940.3
Interest income, net          3.6         4.1         13.9        13.3
Foreign currency              32.3        (44.0)      (13.0)      5.4
transaction gain (loss)
Other expense                 (0.4)       (19.1)      (0.9)       (19.2)
Earnings from consolidated
companies before income       454.6       354.7       1,588.9     1,939.8
taxes
Provision for income taxes    108.9       87.0        194.1       522.8
Earnings from consolidated    345.7       267.7       1,394.8     1,417.0
companies
Equity in net earnings
(loss) of nonconsolidated     (0.3)       4.2         11.6        6.9
companies
Net earnings including        345.4       271.9       1,406.4     1,423.9
noncontrolling interests
Less: Net earnings (loss)
attributable to               0.8         (1.4)       3.6         1.0
noncontrolling interests
Net earnings attributable   $ 344.6     $ 273.3     $ 1,402.8   $ 1,422.9
to Mosaic
   Basic net earnings per
   share attributable to    $ 0.81      $ 0.64      $ 3.30      $ 3.24
   Mosaic
   Diluted net earnings per
   share attributable to    $ 0.81      $ 0.64      $ 3.29      $ 3.24
   Mosaic
   Basic weighted average
   number of shares           425.7       425.4       425.6       438.5
   outstanding
   Diluted weighted average
   number of shares           427.1       426.7       426.8       439.8
   outstanding

Condensed Consolidated Balance Sheets
(in millions, except per share amounts)
The Mosaic Company                                                 (unaudited)
                                                   February 28,    May 31,
                                                   2013            2012
 Assets
 Current assets:
  Cash and cash equivalents                      $ 3,322.7       $ 3,811.0
  Receivables, net                                 873.6           751.6
  Inventories                                      1,569.4         1,237.6
  Deferred income taxes                            138.4           237.8
  Other current assets                             437.9           543.1
                   Total current assets            6,342.0         6,581.1
 Property, plant and equipment, net of
 accumulated depreciation of $3,673.1 million      8,272.0         7,545.9
 and $3,284.2 million, respectively
 Investments in nonconsolidated companies          452.3           454.2
 Goodwill                                          1,852.6         1,844.4
 Deferred income taxes                             180.7           50.6
 Other assets                                      222.5           214.2
                   Total assets                  $ 17,322.1      $ 16,690.4
 Liabilities and Equity
 Current liabilities:
  Short-term debt                                $ 61.2          $ 42.5
  Current maturities of long-term debt             1.0             0.5
  Accounts payable                                 740.9           912.4
  Accrued liabilities                              670.4           899.9
  Deferred income taxes                            63.1            62.4
                   Total current liabilities       1,536.6         1,917.7
 Long-term debt, less current maturities           1,010.4         1,010.0
 Deferred income taxes                             803.0           787.9
 Other noncurrent liabilities                      828.5           975.4
 Equity:
  Preferred stock, $0.01 par value, 15,000,000
  shares authorized, none issued and outstanding   -               -
  as of February 28, 2013 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             1.3             1.3
  outstanding as of February 28, 2013 and May
  31, 2012
  Class B common stock, $0.01 par value,
  87,008,602 shares authorized, none issued and    -               -
  outstanding as of February 28, 2013 and May
  31, 2012
  Common stock, $0.01 par value, 1,000,000,000
  shares authorized, 309,025,813 shares issued
  and 296,987,351 shares outstanding as of         3.0             3.0
  February 28, 2013, 308,749,067 shares issued
  and 296,710,605 shares outstanding as of May
  31, 2012
  Capital in excess of par value                   1,485.8         1,459.5
  Retained earnings                                11,224.1        10,141.3
  Accumulated other comprehensive income           410.4           378.0
        Total Mosaic stockholders' equity          13,124.6        11,983.1
  Noncontrolling interests                         19.0            16.3
        Total equity                               13,143.6        11,999.4
        Total liabilities and equity             $ 17,322.1      $ 16,690.4

Condensed Consolidated Statements of Cash Flows
(in millions, except per share amounts)
The Mosaic Company                                                (unaudited)
                             Three months ended      Nine months ended
                             February    February    February     February 29,
                             28,         29,         28,
                             2013        2012        2013         2012
Cash Flows from Operating
Activities:
 Net earnings including    $ 345.4     $ 271.9     $ 1,406.4    $ 1,423.9
 noncontrolling interests
 Adjustments to reconcile
 net earnings including
 noncontrolling interests
 to net cash provided by
 operating activities:
     Depreciation,
     depletion and           152.2       127.9       437.0        368.4
     amortization
     Deferred income taxes   0.6         (47.6)      (24.1)       81.8
     Equity in loss
     (earnings) of
     nonconsolidated         0.6         1.8         5.2          2.7
     companies, net of
     dividends
     Accretion expense for
     asset retirement        9.6         7.1         26.0         21.2
     obligations
     Share-based             2.9         3.1         25.5         20.1
     compensation expense
     Unrealized loss         46.2        (8.7)       16.3         32.7
     (gain) on derivatives
     Other                   11.1        9.7         20.5         7.8
 Changes in assets and
 liabilities:
     Receivables, net        (77.7)      253.2       (141.5)      239.4
     Inventories             (62.2)      (123.4)     (334.7)      (66.2)
     Other current and       106.1       (191.3)     93.5         (290.9)
     noncurrent assets
     Accounts payable        (114.3)     (3.4)       (97.3)       (152.1)
     Accrued liabilities     (11.7)      29.9        (241.1)      (215.2)
     Other noncurrent        (37.7)      74.3        (158.9)      2.9
     liabilities
        Net cash provided
        by operating         371.1       404.5       1,032.8      1,476.5
        activities
Cash Flows from Investing
Activities:
     Capital expenditures    (397.8)     (411.8)     (1,240.4)    (1,190.3)
     Restricted cash         4.5         1.2         5.1          2.3
     Other                   3.2         5.9         5.3          6.2
        Net cash (used in)
        provided by          (390.1)     (404.7)     (1,230.0)    (1,181.8)
        investing
        activities
Cash Flows from Financing
Activities:
     Payments of             (60.8)      (17.5)      (130.7)      (89.7)
     short-term debt
     Proceeds from
     issuance of             100.8       70.8        149.2        147.7
     short-term debt
     Payments of long-term   (0.5)       (512.5)     (0.9)        (542.7)
     debt
     Proceeds from
     issuance of long-term   0.6         1.5         1.8          748.2
     debt
     Proceeds from stock     2.1         0.2         4.3          2.5
     options exercised
     Repurchase of Class A   -           -           -            (1,162.5)
     common stock
     Cash dividends paid     (106.7)     (21.4)      (320.0)      (66.1)
     Other                   (1.1)       (1.0)       (4.7)        (6.5)
        Net cash used in
        financing            (65.6)      (479.9)     (301.0)      (969.1)
        activities
Effect of exchange rate      (13.4)      54.4        9.9          (30.1)
changes on cash
Net change in cash and       (98.0)      (425.7)     (488.3)      (704.5)
cash equivalents
Cash and cash equivalents    3,420.7     3,627.6     3,811.0      3,906.4
- beginning of period
Cash and cash equivalents  $ 3,322.7   $ 3,201.9   $ 3,322.7    $ 3,201.9
- end of period
Supplemental Disclosure of
Cash Flow Information:
     Cash paid during the
     period for:
        Interest (net of
        amount             $ -         $ 12.0      $ -          $ 12.0
        capitalized)
        Income taxes (net    80.0        119.9       265.5        455.4
        of refunds)

SOURCE The Mosaic Company

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