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Section 1: 8-K (8-K - UNAUDITED PRO FORMA COMBINED PERFORMANCE DATA)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2018
 
 
THE MOSAIC COMPANY
(Exact name of registrant as specified in its charter)
  
 
 
Delaware
 
001-32327
 
20-1026454
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
3033 Campus Drive
Suite E490
Plymouth, Minnesota
 
 
 
55441
 
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (800) 918-8270
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
¨ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
 






Item 7.01.
Regulation FD Disclosure.
The following information is being “furnished” in accordance with General Instruction B.2. of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing:
Furnished herewith as Exhibit 99.1 and incorporated by reference herein is certain unaudited pro forma combined performance data to be published on Mosaic’s website. A preliminary version of this data was furnished as Exhibit 99.3 to our Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 20, 2018.
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
 
Reference is made to the Exhibit Index hereto with respect to the exhibit furnished herewith. The exhibit listed in the Exhibit Index hereto is being “furnished” in accordance with General Instruction B.2. of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Exhibit No.
  
Description
 
 
 
99.1
 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
THE MOSAIC COMPANY
 
 
 
 
Date: May 4, 2018
 
 
 
By:
 
/s/ Mark J. Isaacson
 
 
 
 
Name:
 
Mark J. Isaacson
 
 
 
 
Title:
 
Senior Vice President, General Counsel
 
 
 
 
 
 
and Corporate Secretary




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 - UNAUDITED PRO FORMA COMBINED DATA)

Exhibit


Exhibit 99.1

The Mosaic Company
Selected Calendar Quarter Financial Information
(Unaudited - Pro Forma)

Basis of Presentation:
Unaudited Pro Forma Combined Performance Data for the eight fiscal quarters ended during the period of January 1, 2016 through December 31, 2017.
On January 8, 2018, The Mosaic Company (“Mosaic”) completed its acquisition (the “Acquisition”) of the global phosphate and potash operations of Vale S.A. conducted through Vale Fertilizantes S.A. (the “Acquired Business”). The following unaudited pro forma combined performance data (“Pro Forma Information”) is based on unaudited pro forma combined segment income statements for the fiscal quarters presented, and related performance metrics, after giving effect to the Acquisition and the adjustments described below. These financial statements and related performance data combine Mosaic’s historical consolidated financial information (the “Legacy Business”) and historical financial information of the Acquired Business, which has been “carved-out” from Vale S.A.’s consolidated financial statements to reflect the Acquired Business as if it were a separate entity and presented in accordance with generally accepted accounting principles, or GAAP, rather than international financial reporting standards, or IFRS. Mosaic’s Legacy Business segments are Phosphate, Potash, International Distribution, and Corporate. The Pro Forma Information is presented on an adjusted basis to reflect the business segments to be presented beginning with Mosaic’s financial results for the quarter ending March 31, 2018: Phosphate, Potash, Mosaic Fertilizantes, and Corporate.
The Pro Forma Information has been prepared in accordance with Article 11 of Regulation S-X. The historical financial information therein has been adjusted to give effect to pro forma events that are (1) directly attributable to the Acquisition, (2) factually supportable, and (3) with respect to the statements of income, expected to have a continuing impact on the results of operations of the combined business. In addition, the Legacy Business segmented income statements were adjusted for the following:
Results of Mosaic’s India and China operations, previously reflected in the International Distribution business segment, are reflected in the results of Corporate and Other business segment.
Phosphate and Potash business segment results have been adjusted to reflect a revision to Mosaic’s process for estimating inventory that was made during the first quarter of 2018 on a going forward basis.
Corporate selling, general, and administrative expenses have been re-allocated based on the new segment organization to reflect 45% to Phosphates, 45% to Potash, and 10% to Mosaic Fertilizantes. Historically, these expenses had been allocated 50% to Phosphate and 50% to Potash.

The following adjustments have been made to the results of the Acquired Business:
Results for the entity operating the Miski Mayo mine are reflected in the Phosphates segment, as this will now be a consolidated entity.
Results of the Acquired Business are reflected in the Mosaic Fertilizantes segment.
Acquired Business results are presented on a U.S. GAAP basis as opposed to an IFRS basis. The most significant difference resulting from this presentation relates to expensing for maintenance turnarounds, which is recognized immediately under U.S. GAAP.
Results of the Acquired Business have been adjusted to align with Mosaic policies. The most significant adjustment of this type relates to the alignment of the estimated useful lives of the Acquired Business’s fixed assets to The Mosaic Company’s accounting policies. Additionally, the Acquired Business’ depreciation of fixed assets has been adjusted to reflect Mosaic’s cost basis in these assets.

In the combined unaudited pro forma combined segment income statements and related performance metrics, all transactions that would have been considered intercompany transactions have been eliminated.
The pro forma adjustments described above are based upon available information and assumptions that Mosaic believes are reasonable. Mosaic is in the process of finalizing the accounting of the purchase price of the assets acquired and liabilities assumed in the Acquisition, so the allocation of the purchase price of the Acquisition reflected in this Pro Forma Information has been based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Mosaic has not yet





completed the detailed valuations necessary to estimate the fair value of the assets acquired and the liabilities assumed through the Acquisition and the related allocations of purchase price, nor has Mosaic identified all adjustments necessary to conform the Acquired Business’s accounting policies to Mosaic’s accounting policies. Additionally, a final determination of the fair value of assets acquired and liabilities assumed from the Acquired Business will be based on the actual working capital of the Acquired Business that existed as of the closing date. Accordingly, the pro forma purchase price adjustments reflected in the Pro Forma Information are preliminary, and may not reflect any final purchase price adjustments made. Mosaic estimated the fair value of the Acquired Business’s assets and liabilities based on discussions with management of the Acquired Business, due diligence and preliminary work performed by third-party valuation specialists. As the final valuations are being performed, increases or decreases in the fair value of relevant balance sheet amounts will result in adjustments, which may result in material differences from the information presented herein.








The Mosaic Company - Potash Segment
Selected Calendar Quarter Financial Information
(Unaudited - Pro Forma)
 
 
 
 
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
 
 
Net Sales
$
394

$
457

$
428

$
407

$
414

$
468

$
474

$
496

 
 
Cost of Goods Sold
297

421

385

353

339

357

373

380

 
 
Gross Margin
$
97

$
36

$
43

$
54

$
75

$
111

$
101

$
116

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A
$
34

$
28

$
25

$
28

$
26

$
21

$
20

$
23

 
 
Other operating (income) expense
$
(25
)
$
6

$
6

$
8

$
6

$
2

$
1

$
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings
$
88

$
2

$
12

$
18

$
43

$
88

$
80

$
86

 
Plus: Depreciation, Depletion and Amortization
75

79

77

77

70

73

73

72

 
Plus: Foreign Exchange Gain (Loss)
125

3

(24
)
(27
)
8

30

55

(13
)
 
Plus: Other Income (Expense)
(1
)

78






 
Plus: Equity in net earnings (loss) of nonconsolidated companies

(16
)






 
EBITDA (a)
$
287

$
68

$
143

$
68

$
121

$
191

$
208

$
145

 
Notable Items Included in EBITDA
$
153

$
(15
)
$
(26
)
$
(27
)
$
5

$
30

$
45

$
(13
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
$
113

$
98

$
99

$
107

$
106

$
61

$
102

$
103

 
Gross margin $ / tonne of finished product
$
63

$
18

$
19

$
27

$
38

$
51

$
46

$
52

 
Gross margin as a percent of sales
25
%
8
%
10
%
13
%
18
%
24
%
21
%
23
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Cost Information
 
 
 
 
 
 
 
 
 
 
Canadian resource taxes
$
18

$
38

$
14

$
31

$
23

$
33

$
(5
)
$
19

 
 
Royalties
6

5

4

5

5

6

52

9

 
 
Brine inflow expenses
37

42

38

36

39

38

37

36

 
 
Freight (k)
57

79

66

63

69

70

69

80

 
 
 
 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes) (b)
 
 
 
 
 
 
 
 
 
 
MOP
 
1,425

1,926

2,086

1,862

1,832

2,038

2,071

2,044

 
 
Specialty (k)
121

114

122

122

141

153

148

173

 
 
Total Finished Product
1,546

2,040

2,208

1,984

1,973

2,191

2,219

2,217

 
 
 
 
 
 
 
 
 
 
 
 
 
Average finished product selling price (destination) (d)
$
255

$
224

$
194

$
205

$
210

$
214

$
214

$
224

 
 
 
 
 
 
 
 
 
 
 
 
 
Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
 
 
Production Volume
2,018

1,769

1,662

2,147

2,048

2,302

2,151

2,149

 
 
Operating Rate
77
%
67
%
63
%
82
%
83
%
93
%
87
%
87
%
 
 
 
 
 
 
 
 
 
 
 
 
 
MOP cash costs of production including brine / production tonne (h)
$
89

$
96

$
94

$
74

$
86

$
77

$
101

$
87

 
MOP cash costs of brine management / production tonne (h)
$
18

$
24

$
23

$
17

$
19

$
17

$
17

$
17

 
 
 
 
 
 
 
 
 
 
 
 
 
Average CAD / USD
$
1.373

$
1.289

$
1.304

$
1.335

$
1.323

$
1.345

$
1.253

$
1.270






The Mosaic Company - Phosphates Segment
Selected Calendar Quarter Financial Information
(Unaudited - Pro Forma)
 
 
 
 
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
 
 
Net Sales
$
957

$
1,015

$
972

$
940

$
860

$
1,000

$
809

$
1,037

 
 
Cost of Goods Sold
870

913

873

845

825

938

756

918

 
 
Gross Margin
$
87

$
102

$
99

$
95

$
35

$
62

$
53

$
119

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A
$
36

$
35

$
31

$
31

$
30

$
29

$
26

$
30

 
 
Other operating (income) expense
$
9

$
56

$
65

$
39

$
9

$
18

$
(46
)
$
47

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings
$
42

$
11

$
3

$
25

$
(4
)
$
15

$
73

$
42

 
Plus: Depreciation, Depletion and Amortization
113

115

98

92

94

97

100

103

 
Plus: Foreign Exchange Gain (Loss)
(7
)

2

4

(2
)
(4
)
(6
)
1

 
Plus: Other (Expense) Income



(10
)
(2
)
2

1

(1
)
 
Plus: Equity in net earnings (loss) of nonconsolidated companies
1

(2
)

1

1

13

14

8

 
Less: Earnings (loss) from Consolidated Noncontrolling Interests
5

1

1

4

(2
)
(1
)
(3
)
(1
)
 
EBITDA (a)
 
$
144

$
123

$
102

$
108

$
89

$
124

$
185

$
154

 
Notable Items Included in EBITDA
$
(7
)
$
(49
)
$
(60
)
$
(33
)
$
(5
)
$
(32
)
$
43

$
(38
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
$
114

$
94

$
98

$
96

$
106

$
104

$
90

$
118

 
Gross margin $ / tonne of finished product
$
39

$
40

$
36

$
38

$
15

$
24

$
22

$
48

 
Gross margin as percent of sales
9
%
10
%
10
%
10
%
4
%
6
%
7
%
11
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Freight included in finished product (in millions)
$
82

$
87

$
86

$
91

$
79

$
103

$
78

$
107

 
 
 
 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes) (b)
 
 
 
 
 
 
 
 
 
 
DAP/MAP
1,607

1,760

1,715

1,763

1,486

1,706

1,483

1,663

 
 
Specialty (c)
599

689

806

741

786

876

627

833

 
 
Total Finished Product
2,206

2,449

2,521

2,504

2,272

2,582

2,110

2,496

 
 
 
 
 
 
 
 
 
 
 
 
 
Average finished product selling price (destination) (d)
$
414

$
396

$
367

$
357

$
368

$
376

$
363

$
395

 
 
 
 
 
 
 
 
 
 
 
 
 
Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
 
 
Total tonnes produced (e)
2,205

2,391

2,461

2,463

2,303

2,461

2,339

2,322

 
 
Operating Rate
75
%
82
%
84
%
84
%
79
%
84
%
80
%
79
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized costs ($/tonne)
 
 
 
 
 
 
 
 
 
 
Ammonia (tonne) (f)
$
370

$
320

$
287

$
259

$
285

$
373

$
283

$
298

 
 
Sulfur (long ton) (g)
$
130

$
112

$
93

$
87

$
87

$
90

$
88

$
97

 
 
Blended rock
$
60

$
65

$
60

$
58

$
59

$
58

$
63

$
55

 
 
 
 
 
 
 
 
 
 
 
 
 
Cash conversion costs / finished produced tonne (h)
$
68

$
65

$
62

$
65

$
79

$
67

$
68

$
70

 
Cash rock costs consumed / tonne (h)
$
42

$
41

$
42

$
40

$
40

$
40

$
40

$
35

 
 
 
 
 
 
 
 
 
 
 
 
 
Phosphate rock
 
 
 
 
 
 
 
 
 
 
Sales Volumes ('000 tonnes) (i)
536

529

632

773

365

442

607

735

 
 
Average rock selling price (destination) (j)
$
81

$
87

$
75

$
59

$
67

$
64

$
71

$
69

 
 
Gross margin $ / rock tonne
$
3

$
8

$
13

$
(1
)
$
1

$
(1
)
$
9

$

 
 
Freight included in rock (in millions)
$
9

$
8

$
8

$
13

$
3

$
6

$
8

$
10






The Mosaic Company - Mosaic Fertilizantes Segment
Selected Calendar Quarter Financial Information
(Unaudited - Pro Forma)
 
 
 
 
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
 
 
Net Sales
$
626

$
744

$
1,136

$
793

$
672

$
704

$
1,199

$
834

 
 
Cost of Goods Sold
601

753

1,075

729

667

708

1,160

796

 
 
Gross Margin
$
25

$
(9
)
$
61

$
64

$
5

$
(4
)
$
39

$
38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A
$
32

$
28

$
35

$
33

$
33

$
33

$
35

$
39

 
 
Other operating (income) expense
$

$
7

$
5

$
1

$
(7
)
$
(9
)
$
(8
)
$
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss)
$
(7
)
$
(44
)
$
21

$
30

$
(21
)
$
(28
)
$
12

$
2

 
Plus: Depreciation, Depletion and Amortization
34

33

34

34

35

34

34

34

 
Plus: Foreign Exchange Gain (Loss)
31

23

1

3

2

(23
)
17

(23
)
 
Plus: Other (Expense)
(15
)
(15
)
(5
)
(4
)
(6
)
(3
)
(3
)
(4
)
 
Less: Earnings from Consolidated Noncontrolling Interests


2

1

1

1

2

1

 
EBITDA (a)
 
$
43

$
(3
)
$
49

$
62

$
9

$
(21
)
$
58

$
8

 
Notable Items Included in EBITDA
$
31

$
23

$
1

$
3

$
2

$
(23
)
$
17

$
(23
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures (in millions)
$
21

$
43

$
62

$
77

$
46

$
44

$
58

$
72

 
Gross margin $ / tonne of finished product
$
14

$
(4
)
$
20

$
29

$
3

$
(2
)
$
12

$
18

 
Gross margin as a percent of sales
4
%
(1
)%
5
%
8
%
1
%
(1
)%
3
%
5
%
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes) (b)
 
 
 
 
 
 
 
 
 
 
Phosphate produced in Brazil
627

927

1,230

734

757

940

1,187

817

 
 
Potash produced in Brazil
104

103

165

159

115

87

152

137

 
 
Purchased nutrients
1,056

1,121

1,681

1,293

990

1,062

1,898

1,203

 
 
Total Finished Product
1,787

2,150

3,076

2,187

1,862

2,089

3,237

2,157

 
 
 
 
 
 
 
 
 
 
 
 
 
Average finished product selling price (destination)(d)
$
350

$
346

$
369

$
363

$
361

$
337

$
370

$
387

 
 
 
 
 
 
 
 
 
 
 
 
 
Phosphate Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
 
 
Total tonnes produced (m)
766

954

945

969

832

867

973

1,086

 
 
Operating Rate
68
%
82
 %
80
%
82
%
74
%
74
 %
82
%
92
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases ('000 tonnes)
 
 
 
 
 
 
 
 
 
 
DAP/MAP from Mosaic
130

343

195

175

169

176

164

150

 
 
MicroEssentials® from Mosaic
74

303

293

120

314

365

178

55

 
 
Potash from Mosaic/Canpotex
277

701

435

284

408

868

451

346

 
 
 
 
 
 
 
 
 
 
 
 
 
Average BRL / USD
$
3.900

$
3.512

$
3.244

$
3.298

$
3.144

$
3.215

$
3.168

$
3.308







The Mosaic Company - Corporate and Other Segment
Selected Calendar Quarter Financial Information
(Unaudited - Pro Forma)


 
 
 
 
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
 
 
Net Sales
$
(81
)
$
(240
)
$
(180
)
$
(5
)
$
(122
)
$
(181
)
$
(99
)
$
39

 
 
Cost of Goods Sold
(141
)
(240
)
(187
)
(16
)
(107
)
(162
)
(122
)
38

 
 
Gross Margin (Loss)
$
60


$
7

$
11

$
(15
)
$
(19
)
$
23

$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A
$

$
(4
)
$
(8
)
$
(1
)
$
8

$
3

$
3

$
9

 
 
Other operating (income) expense
$

$
9

$
6

$
9

$
4

$
9

$
9

$
15

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss)
$
60

$
(5
)
$
9

$
3

$
(27
)
$
(31
)
$
11

$
(23
)
 
Plus: Depreciation, Depletion and Amortization
6

5

8

6

5

6

5

7

 
Plus: Foreign Exchange Gain (Loss)
(49
)

(1
)
(2
)
3

1

(5
)
5

 
Plus: Other (Expense)
(1
)

(78
)
7





 
Plus: Equity in net earnings (loss) of nonconsolidated companies
1








 
Less: Earnings (loss) from Consolidated Noncontrolling Interests
(3
)
(2
)
(3
)
(3
)
(3
)
2



 
EBITDA (a)
$
20

$
2

$
(59
)
$
17

$
(16
)
$
(26
)
$
11

$
(11
)
 
Notable Items Included in EBITDA
$
4

$
30

$
(9
)
$
(6
)
$
2

$
4

$
(3
)
$
(12
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Elimination of profit in inventory in cost of goods sold
$
18

$
(25
)
$
20

$
12

$
(19
)
$
(28
)
$
20

$
18

 
Unrealized gain(loss) on derivatives included in cost of goods sold
$
53

$
30

$
(8
)
$
(4
)
$
(1
)
$
3

$
(2
)
$
(17
)
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes) (b)
159

219

290

463

196

319

333

497

 
Average finished product selling price (destination) (d)
$
383

$
394

$
372

$
354

$
305

$
323

$
373

$
387







Footnotes
 
 
(a)
The Company defines segment EBITDA as the related segment's operating earnings (loss) plus depreciation, depletion and amortization plus foreign exchange gain (loss) plus other income (expense) plus equity earnings (loss) less equity earnings (loss) from noncontrolling interests. EBITDA presented on a segment basis is a Non-GAAP financial measure. See "Non-GAAP Financial Measures."
(b)
Finished product sales volumes include intersegment sales.
(c)
Specialty products sales volumes in Phosphates include MicroEssentials® and feed.
(d)
Average price of all finished goods products.
(e)
Includes crop nutrient dry concentrates and animal feed ingredients.
(f)
Amounts are representative of our average ammonia costs in cost of goods sold.
(g)
Amounts are representative of our average sulfur cost in cost of goods sold.
(h)
Phosphates cash conversion costs, Phosphates cash rock costs consumed, MOP cash costs of production, MOP cash costs of brine management and Mosaic Fertilizantes cash rock costs consumed in Brazilian Real are reflective of actual costs during the quarter. These costs are captured in inventory and are not necessarily reflective of costs included in costs of goods sold in the period.
(i)
Sales volumes of rock to external parties.
(j)
Average price of phosphate rock sold externally by Phosphates.
(k)
Includes inbound freight, outbound freight and warehousing costs on K-Mag, Feed and domestic MOP sales.
(l)
Specialty products sales volumes in Potash include K-Mag® and feed.
(m)
Includes all Acquired Business phosphate production and Fospar SSP production.
 
 
Non-GAAP Financial Measures
 
 
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), Mosaic has presented for each business segment in this Selected Calendar Quarter Financial Information EBITDA at the segment level. Segment EBITDA 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 GAAP.
 
 
EBITDA presented at the segment level is defined as the related segment's operating earnings (loss) plus depreciation, depletion and amortization plus foreign exchange gain (loss) plus other income (expense) plus equity earnings (loss) less equity earnings (loss) from noncontrolling interests. We provide segment EBITDA because we believe it is relevant and useful to securities analysts, investors and others because it is part of our internal management reporting and planning process, and our management uses segment EBITDA to evaluate the operational performance and valuation of our segments. Management also uses these measures as a method of comparing segment, performance with that of its competitors. Segment EBITDA should not be considered as an alternative to, or more meaningful than, segment Operating Earnings (Loss) as a measure of operating performance. In addition, because non-GAAP measures are not determined in accordance with GAAP, they are thus susceptible to varying interpretations and calculations and may not be comparable to other similarly titled measures of other companies. Management believes Operating Earnings (Loss) is the most directly comparable GAAP measure because we do not allocate taxes on a segment basis. Reconciliations of segment EBITDA to segment Operating Earnings (Loss) are provided as part of each segment's Selected Calendar Quarter Financial Information.







The Mosaic Company
Selected Calendar Quarter Financial Information
(Unaudited)


Notable Items

Q4 2017
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
(27
)
Unrealized gain (loss) on derivatives
Corporate and Other
Cost of goods sold
 
(17
)
Discrete tax items
Consolidated
(Provision for) benefit from income taxes
 

Pre-issuance hedging gain (loss)
Consolidated
Interest expense
 
(2
)
Asset write-off
Phosphates
Other operating income (expense)
 
(8
)
Restructuring
Phosphates
Other operating income (expense)
 
(20
)
ARO adjustment
Phosphates
Other operating income (expense)
 
(11
)
Total Notable Items
 
 
 
$
(85
)


Q3 2017
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
61

Unrealized gain (loss) on derivatives
Corporate and Other
Cost of goods sold
 
2

Discrete tax items
Consolidated
(Provision for) benefit from income taxes
 

Pre-issuance hedging gain (loss)
Consolidated
Interest expense
 
(2
)
Gain on sale of land
Phosphates
Other operating income (expense)
 
52

Resolution of royalties with Saskatchewan government
Potash
Cost of goods sold
 
(10
)
Asset write-off
Phosphates
Other operating income (expense)
 
(3
)
Total Notable Items
 
 
 
$
100



Q2 2017
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
4

Unrealized gain (loss) on derivatives
Corporate and Other
Cost of goods sold
 
3

Discrete tax items
Consolidated
(Provision for) benefit from income taxes
 

Pre-issuance hedging gain (loss)
Consolidated
Interest expense
 
(8
)
Water loss expense
Phosphates
Other operating income (expense)
 
(14
)
Miski Mayo
Phosphates
Equity in net earnings (loss) of nonconsolidated companies
 
(14
)
Total Notable Items
 
 
 
$
(29
)







Q1 2017
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
12

Unrealized gain (loss) on derivatives
Corporate and Other
Cost of goods sold
 
(1
)
Discrete tax items
Consolidated
(Provision for) benefit from income taxes
 

Liquidated damages for CF ammonia agreement
Phosphates
Other operating income (expense)
 
(3
)
Resolution of Canadian tax audit
Potash
Cost of goods sold
 
$
(3
)
Total Notable Items
 
 
 
$
5



Q4 2016
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction (loss) gain
Consolidated
Foreign currency transaction (loss) gain
 
$
(21
)
Unrealized gain (loss) on derivatives
Corporate & Other
Cost of goods sold
 
(4
)
Water loss expense
Phosphates
Other operating expenses
 
(10
)
ARO adjustment
Phosphates
Other operating expenses
 
(21
)
Depletion adjustment
Phosphates
Cost of goods sold
 
9

Pension de-risking
Consolidated
Other operating expenses
 
(6
)
Costs related to purchase of Vale Fertilizantes
Corporate & Other
Other operating expenses
 
(4
)
Gain on sale of equity investment
Phosphates
Other expense
 
7

Realized loss on RCRA Trust securities
Phosphates
Other expense
 
(10
)
Discrete tax items
Consolidated
Benefit from income taxes
 

Total Notable Items
 
 
 
$
(60
)


Q3 2016
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
(22
)
Unrealized gain (loss) on derivatives
Corporate & Other
Cost of goods sold
 
(8
)
Discrete tax items
Consolidated
Provision for (benefit from) income taxes
 

Asset reserve adjustment
Phosphates
Other operating income (expense)
 
4

Water loss expense
Phosphates
Other operating income (expense)
 
(60
)
Restructuring
Consolidated
Other operating income (expense)
 
(8
)
Total Notable Items
 
 
 
$
(94
)






Q2 2016
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
25

Unrealized gain (loss) on derivatives
Corporate & Other
Cost of goods sold
 
30

Discrete tax items
Consolidated
Provision for (benefit from) income taxes
 

Prince Rupert write-off
Potash
Equity Earnings
 
(16
)
Asset write-off
Phosphates
Other operating income (expense)
 
(47
)
Total Notable Items
 
 
 
$
(8
)
 
 
 
 
 
Note: The tax effect is calculated based on our estimated annual effective rate. Our tax rate is impacted by the mix of earnings in the jurisdictions in which we operate and a benefit associated with depletion. The tax effect of the Prince Rupert write-off includes an income tax component of 20.6% which is calculated based on the rate specific to those earnings, and an impact related to Canadian Resource Tax of 12.4%.


Q1 2016
Description
Segment
Line Item
 
Amount
(in millions)
 
 
 
 
 
Foreign currency transaction gain (loss)
Consolidated
Foreign currency transaction gain (loss)
 
$
100

Unrealized gain (loss) on derivatives
Corporate & Other
Cost of goods sold
 
53

Discrete tax items
Consolidated
Provision for (benefit from) income taxes
 

Carlsbad insurance proceeds
Potash
Other operating income (expense)
 
28

Total Notable Items
 
 
 
$
181




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