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Section 1: 8-K (8-K - Q1 2018 EARNINGS RELEASE AND PERFORMANCE DATA)

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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 7, 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):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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 2.02. Results of Operations and Financial Condition.
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 the text of The Mosaic Company’s (“Mosaic,” and Mosaic and its subsidiaries, individually or in any combination, “we,” “us” or “our”) announcement regarding its earnings and results of operations for the quarter ended March 31, 2018 as presented in a press release issued on May 7, 2018.
Furnished herewith as Exhibit 99.2 and incorporated by reference herein is certain performance data for the period ended March 31, 2018 to be published on Mosaic’s website.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Reference is made to the Exhibit Index hereto with respect to the exhibits furnished herewith. The following exhibits are 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 they 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
  
 
 
99.2
  
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 7, 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 - PRESS RELEASE (2018 Q1 EARNINGS RELEASE))

Exhibit


Exhibit 99.1
 
 
 
 
 
393375930_mosaicsigna02a02a18.jpg
 
 
 
The Mosaic Company
3033 Campus Drive, Suite E490
Plymouth, MN 55441
www.mosaicco.com
FOR IMMEDIATE RELEASE
 
 
 
 
 
 
 
 
 
Media
Ben Pratt
The Mosaic Company
763-577-6102
benjamin.pratt@mosaicco.com
  
Investors
Laura Gagnon
The Mosaic Company
763-577-8213
investor@mosaicco.com
  
 

 
THE MOSAIC COMPANY REPORTS FIRST QUARTER 2018 RESULTS

PLYMOUTH, MN, May 7, 2018 - The Mosaic Company (NYSE: MOS) today reported first quarter 2018 net earnings of $42 million, compared to a net loss of $1 million in the first quarter of 2017. First quarter earnings per share were $0.11, which included a negative impact of $0.09 per share from notable items, primarily related to non-cash currency translation charges and costs related to the Vale Fertilizantes acquisition, partially offset by discrete tax items. Adjusted earnings per share during the first quarter of 2018 were $0.201. Adjusted earnings were negatively impacted by the late spring and other weather related issues, including underperformance of Canadian rail providers, which negatively impacted phosphate and potash sales volumes and unit costs, and was the primary driver of an approximately $290 million increase in working capital.
“We saw strong fundamentals in the first quarter, and we expect that positive momentum to continue,” said Joc O’Rourke, President and Chief Executive Officer. “We’ve increased our full year adjusted earnings per share guidance to reflect improving market conditions and strong operational performance across business units. Our excellent progress on the transformational initiatives at Mosaic Fertilizantes is expected to generate substantial earnings growth in the second half of 2018.”
Mosaic’s net sales in the first quarter of 2018 were $1.9 billion, compared to $1.6 billion last year, primarily driven by the acquisition of Vale Fertilizantes. Operating earnings during the quarter were $81 million, up from $30 million a year ago, driven by higher gross margins in all three operating segments.



1 See “Non-GAAP Financial Measures” for additional information and reconciliation.






Cash flow used by operating activities in the first quarter of 2018 was $71 million compared to cash flow provided by operating activities of $146 million in the prior year. The current period reflects a significant increase in working capital ahead of the delayed peak fertilizer season, as well as weather and logistics issues. Capital expenditures totaled $223 million in the quarter. Mosaic’s total cash and cash equivalents, excluding restricted cash, were $659 million and long-term debt was $5.1 billion as of March 31, 2018. Subsequent to quarter end, the Company used $100 million in cash to further reduce long-term debt.
“Excellent execution and improving market conditions are driving stronger cash flow expectations and providing Mosaic with an opportunity to increase the pace of debt reduction,” said Joc O’Rourke.  “In fact, we have prepaid $300 million in debt since year-end and have increased our target to pay down $500 million in long term debt this year, which would bring us closer to our through-cycle balance sheet targets.”
Phosphates
Phosphates Results*
1Q 2018 Actual
1Q 2018 Guidance
Sales Volumes
1.9 million tonnes
1.9 to 2.2 million tonnes
Gross Margin (GAAP)
$49 per tonne
 
Adjusted Gross Margin (non GAAP)
$57 per tonne
$55 to $65 per tonne
*Tonnes = finished product tonnes
Net sales in the Phosphates segment were $866 million for the first quarter, up from $839 million last year with higher average sales prices partially offset by lower sales volumes as a result of a delayed spring season and logistical challenges. Gross margin was $97 million for the first quarter and included a negative $15 million notable item due to refinement of our weighted average inventory costing, compared to $57 million for the same period a year ago. The increase in the first quarter gross margin was driven by higher average sales prices, as well as operational improvements that lowered controllable operating costs in the segment. These benefits were partially offset by higher ammonia and sulfur costs, as well as the notable item discussed above.
The first quarter average finished product selling price was $431 per tonne, compared to $369 per tonne a year ago. Phosphates segment total finished product sales volumes were 1.9 million tonnes, down from 2.3 million, reflecting both the idling of our Plant City concentrates facility and the delayed planting in North America.





Potash
Potash Results
1Q 2018 Actual
1Q 2018 Guidance
Sales Volumes
1.7 million tonnes
1.7 to 2.0 million tonnes
Gross Margin (GAAP)
$61 per tonne
 
Adjusted Gross Margin (non GAAP)
$64 per tonne
$50 to $60 per tonne
Net sales in the Potash segment totaled $404 million for the first quarter, down from $414 million last year with higher average sales prices more than offset by reduced sales volumes as a result of a change in the Canpotex revenue recognition policy and logistical challenges during the quarter. Gross margin was $102 million for the first quarter and included a negative $5 million notable item due to refinement of our weighted average inventory costing, compared to $69 million for the same period a year ago. The improvement in gross margin was primarily driven by higher average realized sales prices. MOP cash costs, including brine management costs, were $86 per tonne, flat with last year’s levels despite a negative impact from logistics related product containment issues during the quarter.
The first quarter average selling price was $239 per tonne, up from $210 per tonne a year ago. Potash segment total sales volumes for the first quarter were 1.7 million tonnes, down from 2.0 million tonnes last year, reflecting a 0.4 million tonne loss from the change in Canpotex revenue recognition policy.
Mosaic Fertilizantes
Mosaic Fertilizantes Results*
1Q 2018 Actual
1Q 2018 Guidance
Sales Volumes
1.6 million tonnes
1.3 to 1.6 million tonnes
Gross Margin (GAAP)
$37 per tonne
 
Adjusted Gross Margin (non GAAP)
$37 per tonne
$25 to $35 per tonne
*Tonnes = finished product tonnes

Net sales in the Mosaic Fertilizantes segment were $665 million for the first quarter, up from $427 million last year. Gross margin was $59 million, compared to $18 million for the same period a year ago. The year-over-year increase in gross margin is primarily driven by the acquisition of Vale Fertilizantes.




The first quarter average finished product selling price was $420 per tonne, compared to $375 per tonne a year ago. Mosaic Fertilizantes segment total finished product sales volumes were 1.6 million tonnes, up from 1.1 million last year, primarily as a result of the acquisition of Vale Fertilizantes.
During the quarter, Mosaic Fertilizantes completed actions that are expected to drive over $100 million in annualized synergies. The majority of these synergies is expected to flow through cost of goods sold, with one-third realized in earnings in the first half of 2018, and two-thirds realized in earnings in the second half of the year. In the first quarter, Mosaic realized earnings benefits of approximately $12 million.
Other
Selling, General and Administrative (SG&A) expenses were $94 million for the first quarter, up from $81 million last year, primarily as a result of a larger business footprint in Brazil and higher accruals for expected performance based compensation.
While the reported tax rate during the first quarter of 2018 was over 200 percent, excluding discrete items, the effective tax rate was 28 percent. For the full year 2018, Mosaic now expects the effective tax rate to be around 30 percent, as a result of a higher expected contribution to pre-tax earnings from Brazil. Mosaic does not expect to pay material cash taxes in 2018.
Financial Guidance
“Delays in new fertilizer supply coming to market, as well as strong demand and improving farm economics bode well for Mosaic’s future,” O’Rourke said. “Mosaic’s transformation is well underway in all of our businesses, which, combined with positive market trends, puts Mosaic in an excellent position to create sustainable shareholder value over the long term.”
For the second quarter of 2018, Mosaic expects:
 
Sales Volumes
millions of tonnes*
Adjusted Gross Margin
Potash
2.1 - 2.4
$50 - $60 per tonne
Phosphates
2.1 - 2.4
$65 - $75 per tonne
Mosaic Fertilizantes
2.0 - 2.3
$20 - $30 per tonne
Corporate and Other
 
$(30) - $(15) million
*Tonnes = finished product tonnes
In the potash segment, rail logistical issues have already impacted the second quarter. If these issues continue, second quarter volumes would be negatively impacted and curtailments could result in higher costs and lower gross margins per tonne.




In the phosphates segment, improved margin expectations reflect cost management as well as improved market conditions. Chinese phosphate exports continue to be a key factor for the phosphate market.
In the Mosaic Fertilizantes segment, volumes have begun to reflect a seasonal acceleration in demand, and the Company expects higher synergy realization and improving market conditions to be offset by the diminished benefits of purchase accounting adjustments on inventory, traditional second quarter maintenance turn arounds, and a higher proportion of SSP sales, a lower margin product.
The Company is not providing forward looking guidance for U.S. GAAP reported earnings per diluted share or a quantitative reconciliation of forward-looking adjusted earnings per diluted share. Please see "Non-GAAP Financial Measures" for additional information.  EPS guidance is based on preliminary estimates of asset values and depreciation for the acquired Vale Fertilizantes business which are expected to be finalized during 2018.
For calendar 2018, Mosaic now expects:
$ in millions except per share
Full Year 2018
Adjusted earnings per share
$1.20 - $1.60 per share
SG&A
$325 - $350
Adjusted EBITDA
$1,700 - $1,900
 Capital Expenditures
$900 - $1,100

Millions of tonnes
Full Year 2018 Sales Volumes (finished product)
Potash
8.2 - 9.0
Phosphates
8.2 - 9.0
Mosaic Fertilizantes
9.2 - 10.0*

*Reflects a correction from prior estimate which did not correctly capture inter-segment sales volume eliminations.
About The Mosaic Company
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, May 8, 2018, at 9:00 a.m. Eastern Time to discuss first quarter 2018 earnings results as well as global markets and trends. Presentation slides and a simultaneous 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 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 the anticipated benefits and synergies of our acquisition of the global phosphate and potash operations of Vale S.A. previously conducted through Vale Fertilizantes S.A. (which, when combined with our legacy distribution business in Brazil, is now known as Mosaic Fertilizantes) (the “Transaction”), other proposed or pending future transactions or strategic plans and other 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: difficulties with realization of the benefits and synergies of the Transaction, including the risks that the acquired business may not be integrated successfully or that the anticipated synergies or cost or capital expenditure savings from the Transaction may not be fully realized or may take longer to realize than expected, including because of political and economic instability in Brazil or changes in government policy in Brazil; 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; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates, including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the ability of MWSPC to obtain additional planned funding in acceptable amounts and upon acceptable terms, the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; the risk that protests against natural resource companies in Peru extend to or impact the Miski Mayo mine, which is operated by an entity in which we are the majority owner; difficulties with realization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms, 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 Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, 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, Canadian resources taxes and royalties, or the costs of the MWSPC, its existing or future funding and Mosaic’s commitments in support of such funding; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s Esterhazy, Saskatchewan, potash mine or other potash shaft mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; 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.
###
Non-GAAP Financial Measures
This press release includes the presentation and discussion of non-GAAP diluted net earnings per share guidance, or adjusted EPS, non-GAAP gross margin per tonne, or adjusted gross margin per tonne, and non-GAAP EBITDA, or adjusted EBITDA, referred to as non-GAAP financial measures. 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, or GAAP. Non-GAAP financial measures should not be considered as substitutes for, or superior to, measures of financial performance prepared in accordance with GAAP. 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. Adjusted metrics, including adjusted EPS, adjusted gross margin, and adjusted EBITDA are calculated by excluding the impact of notable items from the




GAAP measure. Notable items impact on gross margin and EBITDA is pretax. Notable items impact on diluted net earnings per share is calculated as the notable item amount plus income tax effect, based on expected annual effective tax rate, divided by diluted weighted average shares. Management believes that these adjusted measures provide securities analysts, investors, management and others with useful supplemental information regarding our performance by excluding certain items that may not be indicative of, or are unrelated to, our core operating results. Management utilizes these adjusted measures in analyzing and assessing Mosaic’s overall performance and financial trends, for financial and operating decision-making, and to forecast and plan for future periods. These adjusted measures also assist our management in comparing our and our competitors' operating results. We are not providing forward looking guidance for U.S. GAAP reported diluted net earnings per share, gross margin per tonne, or EBITDA, or a quantitative reconciliation of forward-looking adjusted EPS because we are unable to predict with reasonable certainty our notable items without unreasonable effort. Historically, our notable items have included, but are not limited to, foreign currency transaction gain or loss, unrealized gain or loss on derivatives, acquisition-related fees, discrete tax items, contingencies and certain other gains or losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. Reconciliations for historical periods beginning with the quarter ended June 30, 2016 are provided under “Consolidated Data” in the Selected Calendar Quarter Financial Information performance data for the related periods. This information is available on our website at www.mosaicco.com in the “Financial Information - Quarterly Earnings” section under the “Investors” tab.

For the three months ended March 31, 2018, the Company reported the following notable items which, combined, negatively impacted earnings per share by $0.09: 
 
 
 
 
 
 
Amount
 
Tax effect
 
EPS impact
Description
 
Segment
 
Line item
 
(in millions)
 
(in millions)
 
(per share)
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction gain (loss)
 
Consolidated
 
Foreign currency transaction gain (loss)
 
$
(32
)
 
$
9

 
$
(0.06
)
Unrealized gain (loss) on derivatives
 
Corporate and Other
 
Cost of goods sold
 
(12
)
 
3

 
(0.02
)
Fees related to purchase of Vale Fertilizantes
 
Corporate and Other
 
Other operating income (expense)
 
(18
)
 
5

 
(0.03
)
Integration costs
 
Corporate and Other
 
Other operating income (expense)
 
(8
)
 
2

 
(0.02
)
Costs to capture synergies
 
Mosaic Fertilizantes
 
Other operating income (expense)
 
(16
)
 
5

 
(0.03
)
Refinement of inventory costing
 
Potash
 
Cost of goods sold
 
(5
)
 
2

 
(0.01
)
Refinement of inventory costing
 
Phosphates
 
Cost of goods sold
 
(15
)
 
4

 
(0.03
)
Realized loss on RCRA Trust securities
 
Phosphates
 
Other non-operating income (expense)
 
(5
)
 
1

 
(0.01
)
Severance
 
Corporate and Other
 
Other operating income (expense)
 
(4
)
 
1

 
(0.01
)
Discrete tax items
 
Consolidated
 
(Provision for) benefit from income taxes
 

 
48

 
0.13

Total Notable Items
 
 
 
 
 
$
(115
)
 
$
80

 
$
(0.09
)
For the three months ended March 31, 2017, the Company reported the following notable items which, combined, negatively impacted earnings per share by $0.04: 




 
 
 
 
 
 
Amount
 
Tax effect
 
EPS impact
Description
 
Segment
 
Line item
 
(in millions)
 
(in millions)
 
(per share)
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction loss
 
Consolidated
 
Foreign currency transaction gain (loss)
 
$
9

 
$
(1
)
 
$
0.02

Unrealized loss on derivatives
 
Corporate & Other
 
Cost of goods sold
 
(1
)
 

 

Fees related to purchase of Vale Fertilizantes
 
Corporate & Other
 
Other operating expense
 
(3
)
 

 
(0.01
)
Discrete tax items
 
Consolidated
 
(Provision for) benefit from income taxes
 

 
(9
)
 
(0.03
)
Liquidated damages for CF ammonia agreement
 
Phosphates
 
Other operating income (expense)
 
(3
)
 

 
(0.01
)
Resolution of Canadian tax audit
 
Potash
 
Cost of goods sold
 
(3
)
 

 
(0.01
)
Total Notable Items
 
 
 
 
 
$
(1
)
 
$
(10
)
 
$
(0.04
)
 





Condensed Consolidated Statements of Earnings
(in millions, except per share amounts)
 
 
 
 
The Mosaic Company
  
(unaudited)
 
 
 
Three months ended March 31,
 
 
2018
 
2017
Net sales
 
$
1,933.7

 
$
1,578.1

Cost of goods sold
 
1,691.6

 
1,448.5

Gross margin
 
242.1

 
129.6

Selling, general and administrative expenses
 
93.6

 
80.9

Other operating expense
 
67.8

 
18.6

Operating earnings
 
80.7

 
30.1

Interest expense, net
 
(49.4
)
 
(25.8
)
Foreign currency transaction (loss) gain
 
(32.2
)
 
8.9

Other expense
 
(5.6
)
 
(4.5
)
(Loss) earnings from consolidated companies before income taxes
 
(6.5
)
 
8.7

(Benefits from) provision for income taxes
 
(49.9
)
 
9.7

Earnings (loss) from consolidated companies
 
43.4

 
(1.0
)
Equity in net loss of nonconsolidated companies
 
(3.3
)
 
(0.1
)
Net earnings (loss) including noncontrolling interests
 
40.1

 
(1.1
)
Less: Net loss attributable to noncontrolling interests
 
(2.2
)
 
(0.2
)
Net earnings (loss) attributable to Mosaic
 
$
42.3

 
$
(0.9
)
Diluted net earnings per share attributable to Mosaic
 
$
0.11

 
$

Diluted weighted average number of shares outstanding
 
384.1

 
350.5





Condensed Consolidated Balance Sheets
(in millions, except per share amounts)
The Mosaic Company
  
(unaudited)
 
 
March 31, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
659.4

 
$
2,153.5

Receivables, net
 
708.4

 
642.6

Inventories
 
2,059.0

 
1,547.2

Other current assets
 
414.6

 
273.2

Total current assets
 
3,841.4

 
4,616.5

Property, plant and equipment, net
 
11,865.3

 
9,711.7

Investments in nonconsolidated companies
 
836.3

 
1,089.5

Goodwill
 
1,760.6

 
1,693.6

Deferred income taxes
 
495.9

 
254.6

Other assets
 
1,652.8

 
1,267.5

Total assets
 
$
20,452.3

 
$
18,633.4

Liabilities and Equity
 
 
 
 
Current liabilities:
 
 
 
 
Short-term debt
 
$
71.8

 
$
6.1

Current maturities of long-term debt
 
250.8

 
343.5

Structured accounts payable arrangements
 
426.7

 
386.2

Accounts payable
 
679.4

 
540.9

Accrued liabilities
 
791.8

 
754.4

Total current liabilities
 
2,220.5

 
2,031.1

Long-term debt, less current maturities
 
4,823.1

 
4,878.1

Deferred income taxes
 
1,178.5

 
1,117.3

Other noncurrent liabilities
 
1,550.5

 
967.8

Equity:
 
 
 
 
Preferred Stock, $0.01 par value, 15,000,000 shares authorized, none issued and outstanding as of March 31, 2018 and December 31, 2017
 

 

Common Stock, $0.01 par value, 1,000,000,000 shares authorized, 389,188,324 shares issued and 385,416,049 shares outstanding as of March 31, 2018, 388,998,498 shares issued and 351,049,649 shares outstanding as of December 31, 2017
 
3.8

 
3.5

Capital in excess of par value
 
977.2

 
44.5

Retained earnings
 
10,675.6

 
10,631.1

Accumulated other comprehensive loss
 
(1,201.6
)
 
(1,061.6
)
Total Mosaic stockholders' equity
 
10,455.0

 
9,617.5

Noncontrolling interests
 
224.7

 
21.6

Total equity
 
10,679.7

 
9,639.1

Total liabilities and equity
 
$
20,452.3

 
$
18,633.4





 Condensed Consolidated Statements of Cash Flows
(in millions, except per share amounts)
 
 
 
The Mosaic Company
  
(unaudited)
 
 
Three months ended March 31,
 
 
2018
 
2017
Cash Flows from Operating Activities:
 
 
 
Net cash provided by (used in) operating activities
 
$
(71.0
)
 
$
146.0

Cash Flows from Investing Activities:
 
 
 
 
Capital expenditures
 
(223.3
)
 
(223.8
)
Purchases of available-for-sale securities - restricted
 
(185.7
)
 
(736.1
)
Proceeds from sale of available-for-sale securities - restricted
 
184.0

 
734.3

Investments in consolidated affiliate
 
1.3

 
(25.0
)
Proceeds from sale of fixed assets
 
1.2

 

Acquisition, net of cash acquired
 
(994.6
)
 

Other
 
(3.3
)
 
5.0

Net cash used in investing activities
 
(1,220.4
)
 
(245.6
)
Cash Flows from Financing Activities:
 
 
 
 
Payments of short-term debt
 

 
(14.5
)
Proceeds from issuance of short-term debt
 
65.3

 
143.0

Payments of structured accounts payable arrangements
 
(235.7
)
 
(35.3
)
Proceeds from structured accounts payable arrangements
 
173.8

 
107.3

Payments of long-term debt
 
(206.9
)
 
(1.6
)
Proceeds from issuance of long-term debt
 

 
1.3

Cash dividends paid
 
(9.6
)
 
(96.4
)
Other
 
(0.2
)
 
(1.6
)
Net cash provided by (used in) financing activities
 
(213.3
)
 
102.2

Effect of exchange rate changes on cash
 
13.4

 
3.0

Net change in cash, cash equivalents and restricted cash
 
(1,491.3
)
 
5.6

Cash and cash equivalents - beginning of period
 
2,194.4

 
711.4

Cash and cash equivalents - end of period
 
$
703.1

 
$
717.0

Reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets to the unaudited statements of cash flows:
 
 
 
Cash and cash equivalents
$
659.4


$
675.3

Restricted cash in other current assets
9.4


7.1

Restricted cash in other assets
34.3


34.6

Total cash, cash equivalents and restricted cash shown in the unaudited statement of cash flows
$
703.1

 
$
717.0

 
 
 
 






Earnings Per Share Calculation
 
 
 
Three months ended March 31,
 
 
2018
 
2017
Net earnings attributable to Mosaic
 
$
42.3

 
$
(0.9
)
Basic weighted average number of shares outstanding
 
382.6

 
350.5

Dilutive impact of share-based awards
 
1.5

 

Diluted weighted average number of shares outstanding
 
384.1

 
350.5

Basic net earnings per share attributable to Mosaic
 
$
0.11

 
$

Diluted net earnings per share attributable to Mosaic
 
$
0.11

 
$


393375930_footerimagea09.jpg
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2 - PERFORMANCE DATA (2018 Q1))

Exhibit


Exhibit 99.2
The Mosaic Company
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Consolidated data (in millions, except per share)
 
 
 
 
 
 
 
 
Diluted net earnings (loss) per share
$
(0.03
)
$
0.11

$
0.03

$

$
0.28

$
0.65

$
(1.23
)
$
0.11

Notable items impact on earnings per share(a)
(0.09
)
(0.3
)
(0.23
)
(0.04
)
(0.01
)
0.22

(1.57
)
(0.09
)
Adjusted diluted net earnings per share(a)
$
0.06

$
0.41

$
0.26

$
0.04

$
0.29

$
0.43

$
0.34

$
0.20

Diluted weighted average # of shares outstanding
349.8

351.5

351.6

350.5

352

352.2

351

384.1

 
 
 
 
 
 
 
 
 
Total Net Sales
$
1,675

$
1,952

$
1,862

$
1,578

$
1,755

$
1,985

$
2,092

$
1,934

Cost of goods sold
1,521

1,739

1,656

1,449

1,562

1,744

1,812

1,691

Gross Margin
$
154

$
213

$
206

$
130

$
192

$
241

$
280

$
243

SG&A
73

67

75

81

71

66

83

94

Other operating expense
69

76

57

19

27

(39
)
70

68

Operating earnings
$
12

$
70

$
74

$
30

$
95

$
214

$
127

$
81

Interest expense, net
(33
)
(26
)
(27
)
(26
)
(36
)
(36
)
(40
)
(49
)
Consolidated foreign currency gain/(loss)
15

(33
)
(30
)
9

9

59

(27
)
(32
)
Earnings from consolidated companies before income taxes
(7
)
12

12

9

69

237

59

(7
)
(Benefit from) provision for income taxes
(10
)
(30
)
(5
)
10

(23
)
18

490

(50
)
Earnings from consolidated companies
$
3

$
42

$
17

$
(1
)
$
91

$
220

$
(431
)
$
43

Equity in net earnings (loss) of nonconsolidated companies
(14
)
(2
)
(3
)

6

10

1

(3
)
Less: Net earnings (loss) attributable to noncontrolling interests
(1
)
2

3



2

1

(2
)
Net earnings attributable to Mosaic
$
(10
)
$
39

$
12

$
(1
)
$
97

$
228

$
(431
)
$
42

After tax Notable items included in earnings
$
(33
)
$
(105
)
$
(80
)
$
(11
)
$
(5
)
$
79

$
(550
)
$
(35
)
 
 
 
 
 
 
 
 
 
Gross Margin Rate
9
 %
11
 %
11
 %
8
%
11
 %
12
%
13
%
13
%
 
 
 
 
 
 
 
 
 
Effective Tax Rate (including discrete tax)
(136
)%
(245
)%
(47
)%
112
%
(33
)%
7
%
828
%
714
%
Discrete Tax benefit (expense)
$
(5
)
$
2

$
(7
)
$
(9
)
$
16

$
5

$
(463
)
$
48

 
 
 
 
 
 
 
 
 
Consolidated Depreciation, Depletion and Amortization
$
189

$
173

$
165

$
159

$
166

$
169

$
172

$
217

Consolidated EBITDA(b)
$
202

$
208

$
199

$
193

$
277

$
451

$
271

$
257

Notable items included in Consolidated EBITDA
$
(29
)
$
(104
)
$
(78
)
$
(1
)
$
(12
)
$
93

$
(95
)
$
(115
)
Adjusted EBITDA
$
231

$
312

$
277

$
194

$
289

$
358

$
366

$
372

 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
584

$
90

$
323

$
146

$
243

$
136

$
411

$
(71
)
Cash paid for interest (net of amount capitalized)
60

3

58

8

67

24

57

11

Cash paid for income taxes (net of refunds)
19

(50
)
(41
)

(9
)
(8
)
(53
)
13

Net cash used in investing activities
$
(351
)
$
(978
)
$
(264
)
$
(245
)
$
(177
)
$
(221
)
$
(25
)
$
(1,220
)
Capital expenditures
$
(202
)
$
(196
)
$
(209
)
$
(224
)
$
(169
)
$
(198
)
$
(230
)
$
(223
)
Net cash (used in) provided by financing activities
$
(243
)
$
(112
)
$
(255
)
$
102

$
(85
)
$
94

$
1,090

$
(213
)
Cash dividends paid
(96
)
(96
)
(96
)
(96
)
(53
)
(53
)
(9
)
(10
)
Effect of exchange rate changes on cash
17

(8
)
(12
)
3

2

18

(8
)
13

Net change in cash and cash equivalents
$
7

$
(1,007
)
$
(208
)
$
6

$
(18
)
$
27

$
1,468

$
(1,491
)
 
 
 
 
 
 
 
 
 
Short-term debt
$
54

$
54

$

$
124

$
65

$
59

$
6

$
72

Long-term debt (including current portion)
3,815

3,823

3,818

3,828

3,843

3,856

5,222

5,074

Cash & cash equivalents
1,059

654

673

675

661

686

2,154

659

Net debt
$
2,810

$
3,223

$
3,145

$
3,276

$
3,247

$
3,229

$
3,074

$
4,487

 
 
 
 
 
 
 
 
 
Segment Contributions (in millions)
 
 
 
 
 
 
 
 
Potash
$
457

$
428

$
407

$
414

$
468

$
474

$
496

$
404

Phosphates
976

930

896

839

975

779

997

866

Mosaic Fertilizantes
447

740

521

427

467

806

520

665

Corporate and Other(c)
(206
)
(146
)
38

(102
)
(155
)
(74
)
79

(1
)
Total net sales
$
1,675

$
1,952

$
1,862

$
1,578

$
1,755

$
1,985

$
2,092

$
1,934

 
 
 
 
 
 
 
 
 
Potash
$
18

$
7

$
28

$
36

$
85

$
77

$
83

$
74

Phosphates
12

6

12

17

30

88

57

60

Mosaic Fertilizantes
(11
)
50

39

11

21

46

10

9

Corporate and Other(c)
(7
)
7

(5
)
(34
)
(42
)
3

(23
)
(62
)
Consolidated operating earnings
$
12

$
70

$
74

$
30

$
95

$
214

$
127

$
81

 
 
 
 
 
 
 
 
 
Potash(d)
2,040

2,208

1,984

1,973

2,191

2,219

2,217

1,690

Phosphates(d)
2,449

2,521

2,504

2,272

2,582

2,110

2,496

1,945

Mosaic Fertilizantes
1,194

1,922

1,446

646

1,300

2,178

1,399

1,584

Corporate and Other
219

290

463

689

319

333

497

266

Total finished product tonnes sold ('000 tonnes)
5,902

6,941

6,397

5,580

6,392

6,840

6,609

5,485

Percent specialty(p)
19
 %
18
 %
19
 %
19
%
22
 %
21
%
18
%
22
%





The Mosaic Company - Potash Segment
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
Net Sales
$
457

$
428

$
407

$
414

$
468

$
474

$
496

$
404

Cost of Goods Sold
404

388

341

345

358

376

383

301

Gross Margin
$
53

$
40

$
66

$
69

$
110

$
99

$
114

$
103

Notable Items Included in Gross Margin



(3
)

(10
)

(5
)
Adjusted Gross Margin (excluding notables)
$
53

$
40

$
66

$
72

$
110

$
109

$
114

$
108

 
 
 
 
 
 
 
 
 
SG&A
29

27

30

28

23

21

24

26

Other operating (income) expense
6

6

8

6

2

1

7

3

 
 
 
 
 
 
 
 
 
Operating Earnings
$
18

$
7

$
28

$
36

$
85

$
77

$
83

$
74

Plus: Depreciation, Depletion and Amortization
79

77

77

70

73

73

72

76

Plus: Foreign Exchange Gain (Loss)
3

(24
)
(27
)
8

30

55

(13
)
(30
)
Plus: Other Income (Expense)

78







Plus: Equity in net earnings (loss) of nonconsolidated companies
(16
)







EBITDA(g)
$
84

$
138

$
78

$
114

$
188

$
205

$
142

$
120

Notable Items Included in EBITDA
$
(15
)
$
(26
)
$
(27
)
$
5

$
30

$
45

$
(13
)
$
(35
)
Adjusted EBITDA (excluding notables)
$
99

$
164

$
105

$
109

$
158

$
160

$
155

$
155

 
 
 
 
 
 
 
 
 
Capital expenditures
$
98

$
99

$
107

$
106

$
61

$
102

$
103

$
104

Gross Margin $ / tonne of finished product
$
26

$
18

$
33

$
35

$
50

$
44

$
51

$
61

Adjusted Gross Margin $ / tonne of finished product
$
26

$
18

$
33

$
37

$
50

$
49

$
51

$
64

Gross margin as a percent of sales
12
%
9
%
16
%
17
%
23
%
21
%
23
%
25
%
 
 
 
 
 
 
 
 
 
Supplemental Cost Information
 
 
 
 
 
 
 
 
Canadian resource taxes
$
38

$
14

$
31

$
23

$
33

$
(5
)
$
19

$
26

Royalties
5

4

5

5

6

52

9

8

Brine inflow expenses
42

38

36

39

38

37

36

39

Freight (f)
79

66

63

69

70

69

80

71

 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes)(d)
 
 
 
 
 
 
 
 
MOP
1,926

2,086

1,862

1,832

2,038

2,071

2,044

1,551

Specialty(l)
114

122

122

141

153

148

173

139

Total Finished Product(d)
2,040

2,208

1,984

1,973

2,191

2,219

2,217

1,690

 
 
 
 
 
 
 
 
 
Average finished product selling price (destination)(e)
$
224

$
194

$
205

$
210

$
214

$
214

$
224

$
239

 
 
 
 
 
 
 
 
 
Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
Production Volume
1,769

1,662

2,147

2,048

2,302

2,151

2,149

2,275

Operating Rate
67
%
63
%
82
%
83
%
93
%
87
%
87
%
87
%
 
 
 
 
 
 
 
 
 
MOP cash costs of production including brine / production tonne(q)
$
96

$
94

$
74

$
86

$
77

$
101

$
87

$
86

MOP cash costs of brine management / production tonne
$
24

$
23

$
17

$
19

$
17

$
17

$
17

$
17

 
 
 
 
 
 
 
 
 
Average CAD / USD
$
1.289

$
1.304

$
1.335

$
1.323

$
1.345

$
1.253

$
1.27

$
1.264







The Mosaic Company - Phosphates Segment
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
Net Sales
$
976

$
930

$
896

$
839

$
975

$
779

$
997

$
866

Cost of Goods Sold
876

829

812

783

898

712

864

769

Gross Margin
$
100

$
101

$
84

$
56

$
76

$
67

$
133

$
97

Notable Items Included in Gross Margin


9





(15
)
Adjusted Gross Margin (excluding notables)
$
100

$
101

$
75

$
56

$
76

$
67

$
133

$
112

 
 
 
 
 
 
 
 
 
SG&A
34

30

30

30

29

25

29

31

Other operating (income) expense
54

65

42

9

18

(47
)
47

6

 
 
 
 
 
 
 
 
 
Operating Earnings
$
12

$
6

$
12

$
17

$
30

$
88

$
57

$
60

Plus: Depreciation, Depletion and Amortization
101

84

78

80

83

86

89

99

Plus: Foreign Exchange Gain (Loss)

2

4

(2
)
(4
)
(6
)
1

4

Plus: Other Income (Expense)


(10
)
(2
)
2

1

(1
)
(5
)
Plus: Equity in net earnings (loss) of nonconsolidated companies
2

(2
)
(3
)

5

10

1

(4
)
Plus: Earnings (loss) from Consolidated Noncontrolling Interests
2

2

4

2

(2
)

2

(1
)
EBITDA(g)
$
113

$
88

$
77

$
91

$
118

$
179

$
144

$
155

Notable Items Included in EBITDA
$
(49
)
$
(60
)
$
(33
)
$
(5
)
$
(23
)
$
43

$
(38
)
$
(16
)
Adjusted EBITDA (excluding notables)
$
162

$
148

$
110

$
96

$
141

$
136

$
182

$
171

 
 
 
 
 
 
 
 
 
Capital expenditures
$
90

$
89

$
89

$
103

$
101

$
87

$
110

$
100

Gross Margin $ / tonne of finished product
$
41

$
40

$
34

$
25

$
29

$
32

$
53

$
49

Adjusted Gross Margin $ / tonne of finished product
$
41

$
40

$
30

$
25

$
29

$
32

$
53

$
57

Gross margin as a percent of sales
10
%
11
%
9
%
7
%
8
%
9
%
13
%
11
%
 
 
 
 
 
 
 
 
 
Freight included in finished goods (in millions)
$
87

$
86

$
91

$
79

$
103

$
78

$
107

$
77

 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes)(d)
 
 
 
 
 
 
 
 
DAP/MAP
1,760

1,715

1,763

1,486

1,706

1,483

1,663

1,295

Specialty(k)
689

806

741

786

876

627

833

650

Total Finished Product(d)
2,449

2,521

2,504

2,272

2,582

2,110

2,496

1,945

 
 
 
 
 
 
 
 
 
Average finished product selling price (destination)(e)
$
399

$
369

$
358

$
369

$
377

$
369

$
399

$
431

 
 
 
 
 
 
 
 
 
Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
Total tonnes produced(h)
2,391

2,461

2,463

2,303

2,461

2,339

2,322

2,045

Operating Rate(n)
82
%
84
%
84
%
79
%
84
%
80
%
79
%
84
%
 
 
 
 
 
 
 
 
 
Realized costs ($/tonne)
 
 
 
 
 
 
 
 
Ammonia (tonne)(i)
$
320

$
287

$
259

$
285

$
373

$
283

$
298

$
344

Sulfur (long ton)(j)
$
112

$
93

$
87

$
87

$
90

$
88

$
97

$
128

Blended rock
$
65

$
60

$
58

$
59

$
58

$
63

$
55

$
55

 
 
 
 
 
 
 
 
 
Cash conversion costs / finished product tonne
$
65

$
62

$
65

$
79

$
67

$
68

$
70

$
68

Cash rock costs consumed / tonne
$
41

$
42

$
40

$
40

$
40

$
40

$
35

$
35

 
 
 
 
 
 
 
 
 
Phosphate Rock
 
 
 
 
 
 
 
 
Sales Volumes ('000 tonnes) (m)
 
 
 
 
 
 
 
$
360

Average rock selling price (destination) (o)
 
 
 
 
 
 
 
$
79

Gross margin $ / rock tonne
 
 
 
 
 
 
 
$
4

Freight included in rock (in millions)
 
 
 
 
 
 
 
$
8







The Mosaic Company - International Distribution Segment
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
Net Sales
$
447

$
740

$
521

$
427

$
467

$
806

$
520

$
665

Cost of Goods Sold
447

676

475

409

442

754

487

606

Gross Margin
$
1

$
65

$
46

$
18

$
25

$
52

$
32

$
59

Notable Items Included in Gross Margin








Adjusted Gross Margin (excluding notables)
$
1

$
65

$
46

$
18

$
25

$
52

$
32

$
59

 
 
 
 
 
 
 
 
 
SG&A
14

17

16

15

17

18

22

25

Other operating (income) expense

1


(1
)
(2
)
(3