Toggle SGML Header (+)


Section 1: 8-K (8-K - 2018 Q2 EARNINGS RELEASE AND 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): August 6, 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 June 30, 2018 as presented in a press release issued on August 6, 2018.
Furnished herewith as Exhibit 99.2 and incorporated by reference herein is certain performance data for the period ended June 30, 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: August 6, 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 - 2018 Q2 EARNINGS RELEASE)

Exhibit


Exhibit 99.1
 
 
 
 
 
394530000_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 SECOND QUARTER 2018 RESULTS
Raises Full-Year Adjusted EBITDA and EPS Guidance

PLYMOUTH, MN, August 6, 2018 - The Mosaic Company (NYSE: MOS) today reported second quarter 2018 net earnings of $68 million. EBITDA(1) during the quarter was $333 million, or $461 million adjusted for notable items, up both sequentially and year over year. Second quarter earnings per share were $0.18, which included a negative impact of $0.22 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 benefits. Adjusted earnings per share(1) during the second quarter of 2018 were $0.40, ahead of both last year and the first quarter of 2018.
Highlights:
Guiding to full-year adjusted EBITDA(1) in the range of $1.80 - $1.95 billion, up from the previously increased $1.70 - $1.90 billion range.
Raising full-year adjusted EPS(1) guidance to $1.45 - $1.80, from $1.20 - $1.60, due to strong underlying business performance and lower expected full-year effective tax rate.
Generated cash flow from operating activities of $807 million in the quarter, benefiting from strong business performance and prepayments from customers in Brazil.
Delivered on Mosaic Fertilizantes synergy targets with $56 million in gross synergies realized year-to-date, or $34 million net of costs to achieve them. Run rate savings were well over $100 million as of June 30, 2018.
Achieved record MicroEssentials® sales volumes in the second quarter.
Paid down an additional $200 million of long-term debt subsequent to quarter end, reaching our full-year 2018 debt retirement target of $500 million.

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






“We are seeing positive developments in potash and phosphate markets and we expect the momentum to continue,” said Joc O’Rourke, President and Chief Executive Officer. “Strong operational performance across our three business units and constructive market developments are driving improved earnings and cash flow. We are making excellent progress on the transformational initiatives at Mosaic Fertilizantes and are well positioned to benefit from today’s improved business environment.”
Mosaic’s net sales in the second quarter of 2018 were $2.2 billion, compared to $1.8 billion last year, primarily driven by the acquisition of Vale Fertilizantes and higher average sales prices in all three operating segments. Operating earnings during the quarter were $196 million, up from $95 million a year ago, driven by higher gross margins in all segments.
Cash flow from operating activities in the second quarter of 2018 was $807 million compared to $243 million in the prior year. The current period cash flow benefitted from strong business performance, customer prepayments in Brazil and seasonal reversal of negative working capital trends from the first quarter of 2018. Capital expenditures totaled $201 million in the quarter. Mosaic’s total cash and cash equivalents, excluding restricted cash, were $1.0 billion and long-term debt was $5.0 billion as of June 30, 2018. Subsequent to quarter end, the Company used $200 million in cash to further reduce long-term debt.
“Mosaic is well ahead of schedule to achieve its debt pay-down target of $700 million by the end of 2020,” said Joc O’Rourke.  “In fact, we have paid down $500 million in debt this year, which brings us closer to our through-cycle balance sheet targets. As we look ahead, our capital priorities remain unchanged: maintain a strong balance sheet, sustain our assets, invest to grow the business and return excess to shareholders.”

Phosphates Results*
2Q 2018
1Q 2018
2Q 2017
Sales Volumes million tonnes
2.3
1.9
2.6
Gross Margin (GAAP) per tonne
$67
$49
$29
Adjusted Gross Margin (non-GAAP) per tonne
$70
$57
$29
*Tonnes = finished product tonnes
Net sales in the Phosphates segment were $1.1 billion for the second quarter, up from $975 million last year, with higher average sales prices more than offsetting lower sales volumes that resulted from Mosaic’s decision to temporarily idle its Plant City concentrates facility. Gross margin was $154 million for the second quarter and included a negative $6 million notable item due to refinement of our weighted average inventory costing, compared to $76 million for the same period a year ago. The increase in the second quarter gross margin was primarily 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 sulfur costs, as well as the notable item discussed above.

Potash Results
2Q 2018
1Q 2018
2Q 2017
Sales Volumes million tonnes
2.4
1.7
2.2
Gross Margin (GAAP) per tonne
$56
$61
$50
Adjusted Gross Margin (non-GAAP) per tonne
$58
$64
$50
Net sales in the Potash segment totaled $569 million for the second quarter, up from $468 million last year, driven by both higher average sales prices and higher sales volumes. Gross margin was $132 million for the second quarter and included a negative $4 million notable item due to refinement of our weighted average inventory costing, compared to $110 million for the same period a year ago. The improvement in gross margin was primarily driven by higher average sales prices, partially offset by increased costs of goods in inventory from the impact of the first quarter’s weather and logistics related containment issues. MOP cash costs, including brine management costs, were $85 per tonne, higher than last year’s levels primarily as a result of a negative impact from the stronger Canadian dollar compared with a year ago and timing of turn-arounds.

Mosaic Fertilizantes Results*
2Q 2018
1Q 2018
2Q 2017
Sales Volumes million tonnes
1.8
1.6
1.3
Gross Margin (GAAP) per tonne
$29
$37
$19
Adjusted Gross Margin (non GAAP) per tonne
$29
$37
$19
*Tonnes = finished product tonnes
Net sales in the Mosaic Fertilizantes segment were $713 million for the second quarter, up from $467 million last year. Gross margin was $53 million, compared to $25 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. Gross margin was negatively impacted by $11 million related to the trucker strike in Brazil and $27 million from turnaround and related idle plant expenses. Gross margin also benefitted from a $16 million purchase price fair market value adjustment of acquired inventory. The benefit is expected to be immaterial going forward.





Mosaic Fertilizantes segment total finished product sales volumes were up year over year, primarily as a result of the acquisition of Vale Fertilizantes, partially offset by the impact of the trucker strike which reduced sales volumes by an estimated 300 thousand tonnes.
Mosaic Fertilizantes continues to be on track to achieve $100 million in net synergies in 2018 with gross year-to-date realized synergies of $56 million, or $34 million net of costs to achieve them. Run rate savings were well over $100 million as of June 30, 2018.
Other
Selling, General and Administrative (SG&A) expenses were $79 million for the second quarter, up from $71 million last year, primarily as a result of a larger business footprint in Brazil.
While the reported tax rate during the second quarter of 2018 was 5 percent, excluding discrete items the calculated GAAP effective tax rate was 22 percent. Mosaic expects to pay minimal cash income taxes in 2018. Mosaic believes there may be continued volatility in its effective tax rate due to changing interpretations of the new tax laws and changes in valuation allowances, but currently expects the 2018 effective tax rate to be in the mid-20 percent range.





Financial Guidance
“Despite trade uncertainties and volatile grain prices, fertilizer remains affordable, which underpins strong demand expectations,” O’Rourke said. “This, combined with continued delays in new supply additions and Mosaic’s progress on transformative cost initiatives, puts Mosaic in an excellent position to create sustainable shareholder value over the long term.”
Mosaic has updated earnings guidance ranges:
$ in millions except per share
2018 Guidance
Reported YTD 6/30/2018
Adjusted EBITDA(1)
$1,800 - $1,950
$833
Adjusted earnings per share(1)
$1.45 - $1.80
$0.60
 Capital Expenditures
$900 - $1,100
$424
(1) See “Non-GAAP Financial Measures” for additional information and reconciliation.
Assumptions embedded in the full-year guidance include:
In Millions*
Full-Year 2018 Assumptions
Reported YTD 6/30/2018
Potash tonnes sold**
8.3 - 8.9
4.1
Phosphates tonnes sold
8.3 - 8.9
4.2
Mosaic Fertilizantes tonnes sold
8.7 - 9.5
3.4
SG&A Expenses
$325 - $350
$173
*Tonnes = finished product tonnes
** Full-year sales volume reflects ~400,000 tonne reduction from Canpotex’ change in revenue recognition.
For the third quarter of 2018, Mosaic expects:
 
Sales Volumes
millions of tonnes*
Adjusted Gross Margin(1)
Potash
2.2 - 2.5
$55 - $65 per tonne
Phosphates
2.1 - 2.4
$75 - $85 per tonne
Mosaic Fertilizantes
3.2 - 3.6
$35 - $45 per tonne
Corporate and Other
 
$0 - $15 million
*Tonnes = finished product tonnes
(1) See “Non-GAAP Financial Measures” for additional information and reconciliation.








In the potash segment, we expect the negative impact of planned maintenance turnarounds at our lowest cost mines, Esterhazy and Belle Plaine, to be mostly offset by the increases in average realized selling prices. Third quarter guidance assumes minimal sales volumes to China.
In the phosphates segment, higher average realized selling prices are expected to more than offset higher raw material costs. The Company expects to report another quarter of strong premium product sales volumes.
In the Mosaic Fertilizantes segment, the impacts of higher average realized selling prices and weaker local currency are expected to more than offset the third quarter planned turn around at the Uberaba facility. Risks to both volume and margin guidance are primarily associated with the government’s published minimum freight tables related to the trucker strike in May. The Company embedded a negative
300 thousand tonne impact in full-year sales volumes assumptions as a result of these minimum freight tables.
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 of non-GAAP adjusted EBITDA. 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.

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, August 7, 2018, at 9:00 a.m. Eastern Time to discuss second 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 such as costs associated with the new freight tables; 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, and 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 a quantitative reconciliation of forward-looking adjusted EPS, adjusted gross margin and adjusted EBITDA 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 June 30, 2018, the Company reported the following notable items which, combined, negatively impacted earnings per share by $0.22: 
 
 
 
 
 
 
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)
 
$
(79
)
 
$
18

 
$
(0.16
)
Unrealized gain (loss) on derivatives
 
Corporate and Other
 
Cost of goods sold
 
(34
)
 
8

 
(0.07
)
Integration costs
 
Corporate and Other
 
Other operating income (expense)
 
(5
)
 
1

 
(0.01
)
Costs to capture synergies
 
Mosaic Fertilizantes
 
Other operating income (expense)
 
(6
)
 
1

 
(0.01
)
Refinement of inventory costing
 
Potash
 
Cost of goods sold
 
(4
)
 
1

 
(0.01
)
Refinement of inventory costing
 
Phosphates
 
Cost of goods sold
 
(6
)
 
1

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

 
13

 
0.04

Sales tax refund
 
Phosphates
 
Other operating income (expense)
 
6

 
(1
)
 
0.01

Total Notable Items
 
 
 
 
 
$
(128
)
 
$
42

 
$
(0.22
)
For the three months ended June 30, 2017, the Company reported the following notable items which, combined, negatively impacted earnings per share by $0.01: 
 
 
 
 
 
 
Amount
 
Tax effect
 
EPS impact
Description
 
Segment
 
Line item
 
(in millions)
 
(in millions)
 
(per share)
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction gain
 
Consolidated
 
Foreign currency transaction gain (loss)
 
$
9

 
$
1

 
$
0.03

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

 

 
0.01

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

 
(0.02
)
Discrete tax items
 
Consolidated
 
(Provision for) benefit from income taxes
 

 
16

 
0.04

Pre-issuance hedging loss
 
Consolidated
 
Interest expense
 
(8
)
 
(1
)
 
(0.02
)
Water loss expense
 
Phosphates
 
Other operating income (expense)
 
(14
)
 
(1
)
 
(0.04
)
Miski Mayo
 
Phosphates
 
Equity in net earnings (loss) of nonconsolidated companies
 
(5
)
 

 
(0.01
)
Total Notable Items
 
 
 
 
 
$
(20
)
 
$
15

 
$
(0.01
)
 




Condensed Consolidated Statements of Earnings
(in millions, except per share amounts)
 
 
 
 
The Mosaic Company
  
(unaudited)
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Net sales
 
$
2,205.0

 
$
1,754.6

 
$
4,138.7

 
$
3,332.7

Cost of goods sold
 
1,910.4

 
1,562.3

 
3,602.0

 
3,010.8

Gross margin
 
294.6

 
192.3

 
536.7

 
321.9

Selling, general and administrative expenses
 
79.3

 
71.2

 
172.9

 
152.1

Other operating expense
 
19.0

 
26.5

 
86.8

 
45.1

Operating earnings
 
196.3

 
94.6

 
277.0

 
124.7

Interest expense, net
 
(45.1
)
 
(36.4
)
 
(94.5
)
 
(62.2
)
Foreign currency transaction (loss) gain
 
(78.7
)
 
9.1

 
(110.9
)
 
18.0

Other (expense) income
 
(2.4
)
 
1.4

 
(8.0
)
 
(3.1
)
Earnings from consolidated companies before income taxes
 
70.1

 
68.7

 
63.6

 
77.4

Provision for (benefits from) income taxes
 
3.7

 
(22.6
)
 
(46.2
)
 
(12.9
)
Earnings from consolidated companies
 
66.4

 
91.3

 
109.8

 
90.3

Equity in net earnings (loss) of nonconsolidated companies
 
1.7

 
5.8

 
(1.6
)
 
5.7

Net earnings including noncontrolling interests
 
68.1

 
97.1

 
108.2

 
96.0

Less: Net income (loss) attributable to noncontrolling interests
 
0.2

 
(0.2
)
 
(2.0
)
 
(0.4
)
Net earnings attributable to Mosaic
 
$
67.9

 
$
97.3

 
$
110.2

 
$
96.4

Diluted net earnings per share attributable to Mosaic
 
$
0.18

 
$
0.28

 
$
0.29

 
$
0.27

Diluted weighted average number of shares outstanding
 
387.2

 
352.0

 
385.5

 
351.8





Condensed Consolidated Balance Sheets
(in millions, except per share amounts)
The Mosaic Company
  
(unaudited)
 
 
June 30, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
1,035.3

 
$
2,153.5

Receivables, net
 
624.9

 
642.6

Inventories
 
2,168.3

 
1,547.2

Other current assets
 
341.9

 
273.2

Total current assets
 
4,170.4

 
4,616.5

Property, plant and equipment, net
 
11,559.6

 
9,711.7

Investments in nonconsolidated companies
 
837.8

 
1,089.5

Goodwill
 
1,738.0

 
1,693.6

Deferred income taxes
 
515.7

 
254.6

Other assets
 
1,576.5

 
1,267.5

Total assets
 
$
20,398.0

 
$
18,633.4

Liabilities and Equity
 
 
 
 
Current liabilities:
 
 
 
 
Short-term debt
 
$
20.2

 
$
6.1

Current maturities of long-term debt
 
261.2

 
343.5

Structured accounts payable arrangements
 
384.5

 
386.2

Accounts payable
 
774.8

 
540.9

Accrued liabilities
 
1,154.2

 
754.4

Total current liabilities
 
2,594.9

 
2,031.1

Long-term debt, less current maturities
 
4,736.5

 
4,878.1

Deferred income taxes
 
1,163.6

 
1,117.3

Other noncurrent liabilities
 
1,487.3

 
967.8

Equity:
 
 
 
 
Preferred Stock, $0.01 par value, 15,000,000 shares authorized, none issued and outstanding as of June 30, 2018 and December 31, 2017
 

 

Common Stock, $0.01 par value, 1,000,000,000 shares authorized, 389,230,157 shares issued and 385,457,882 shares outstanding as of June 30, 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
 
981.7

 
44.5

Retained earnings
 
10,734.1

 
10,631.1

Accumulated other comprehensive loss
 
(1,523.2
)
 
(1,061.6
)
Total Mosaic stockholders' equity
 
10,196.4

 
9,617.5

Noncontrolling interests
 
219.3

 
21.6

Total equity
 
10,415.7

 
9,639.1

Total liabilities and equity
 
$
20,398.0

 
$
18,633.4





 Condensed Consolidated Statements of Cash Flows
(in millions, except per share amounts)
 
 
 
The Mosaic Company
  
(unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Cash Flows from Operating Activities:
 
 
 
 
Net cash provided by operating activities
 
$
807.0

 
$
242.8

 
$
736.0

 
$
388.8

Cash Flows from Investing Activities:
 
 
 
 
 
 
 
 
Capital expenditures
 
(201.1
)
 
(168.5
)
 
(424.4
)
 
(392.3
)
Purchases of available-for-sale securities - restricted
 
(71.9
)
 
(530.2
)
 
(257.6
)
 
(1,266.3
)
Proceeds from sale of available-for-sale securities - restricted
 
65.4

 
521.8

 
249.4

 
1,256.1

Investments in consolidated affiliate
 
(4.9
)
 
(13.9
)
 
(3.6
)
 
(38.9
)
Acquisition, net of cash acquired
 
9.3

 

 
(985.3
)
 

Other
 
6.5

 
13.8

 
4.4

 
18.8

Net cash used in investing activities
 
(196.7
)
 
(177.0
)
 
(1,417.1
)
 
(422.6
)
Cash Flows from Financing Activities:
 
 
 
 
 
 
 
 
Payments of short-term debt
 
(88.9
)
 
(250.7
)
 
(88.9
)
 
(265.2
)
Proceeds from issuance of short-term debt
 
41.9

 
200.4

 
107.2

 
343.4

Payments of structured accounts payable arrangements
 
(202.5
)
 
(120.5
)
 
(438.2
)
 
(155.8
)
Proceeds from structured accounts payable arrangements
 
157.2

 
140.1

 
331.0

 
247.4

Payments of long-term debt
 
(107.0
)
 
(1.8
)
 
(313.9
)
 
(3.4
)
Proceeds from issuance of long-term debt
 
39.2

 
0.2

 
39.2

 
1.5

Cash dividends paid
 
(9.6
)
 
(52.7
)
 
(19.2
)
 
(149.1
)
Other
 
(0.2
)
 
(0.3
)
 
(0.4
)
 
(1.9
)
Net cash (used in) provided by financing activities
 
(169.9
)
 
(85.3
)
 
(383.2
)
 
16.9

Effect of exchange rate changes on cash
 
(65.0
)
 
1.5

 
(51.6
)
 
4.5

Net change in cash, cash equivalents and restricted cash
 
375.4

 
(18.0
)
 
(1,115.9
)
 
(12.4
)
Cash, cash equivalents and restricted cash - beginning of period
 
703.1

 
717.0

 
2,194.4

 
711.4

Cash, cash equivalents and restricted cash - end of period
 
$
1,078.5

 
$
699.0

 
$
1,078.5

 
$
699.0

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
 
 
 
$
1,035.3


$
660.6

Restricted cash in other current assets
 
 
 
8.5


7.2

Restricted cash in other assets
 
 
 
34.7


31.2

Total cash, cash equivalents and restricted cash shown in the unaudited statement of cash flows
 
 
 
$
1,078.5

 
$
699.0

 
 
 
 
 
 
 






Earnings Per Share Calculation
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Net earnings attributable to Mosaic
 
$
67.9

 
$
97.3

 
$
110.2

 
$
96.4

Basic weighted average number of shares outstanding
 
385.4

 
351.0

 
384.0

 
350.8

Dilutive impact of share-based awards
 
1.8

 
1.0

 
1.5

 
1.0

Diluted weighted average number of shares outstanding
 
387.2

 
352.0

 
385.5

 
351.8

Basic net earnings per share attributable to Mosaic
 
$
0.18

 
$
0.28

 
$
0.29

 
$
0.27

Diluted net earnings per share attributable to Mosaic
 
$
0.18

 
$
0.28

 
$
0.29

 
$
0.27


394530000_footerimagea09.jpg
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2 - 2018 Q2 PERFORMANCE DATA)

Exhibit


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

$
0.03

$

$
0.28

$
0.65

$
(1.23
)
$
0.11

$
0.18

Notable items impact on earnings per share(a)
(0.30
)
(0.23
)
(0.04
)
(0.01
)
0.22

(1.57
)
(0.09
)
(0.22
)
Adjusted diluted net earnings per share(a)
$
0.41

$
0.26

$
0.04

$
0.29

$
0.43

$
0.34

$
0.20

$
0.40

Diluted weighted average # of shares outstanding
351.5

351.6

350.5

352.0

352.2

351.0

384.1

387.2

 
 
 
 
 
 
 
 
 
Total Net Sales
$
1,952

$
1,862

$
1,578

$
1,755

$
1,985

$
2,092

$
1,934

$
2,205

Cost of goods sold
1,739

1,656

1,449

1,562

1,744

1,812

1,691

1,910

Gross Margin
$
213

$
206

$
130

$
192

$
241

$
280

$
243

$
295

SG&A
67

75

81

71

66

83

94

79

Other operating expense
76

57

19

27

(39
)
70

68

20

Operating earnings
$
70

$
74

$
30

$
95

$
214

$
127

$
81

$
196

Interest expense, net
(26
)
(27
)
(26
)
(36
)
(36
)
(40
)
(49
)
(45
)
Consolidated foreign currency gain/(loss)
(33
)
(30
)
9

9

59

(27
)
(32
)
(79
)
Earnings from consolidated companies before income taxes
12

12

9

69

237

59

(7
)
70

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

(23
)
18

490

(50
)
4

Earnings from consolidated companies
$
42

$
17

$
(1
)
$
91

$
220

$
(431
)
$
43

$
66

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

6

10

1

(3
)
2

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

3



2

1

(2
)

Net earnings attributable to Mosaic
$
39

$
12

$
(1
)
$
97

$
228

$
(431
)
$
42

$
68

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

$
(550
)
$
(35
)
$
(86
)
 
 
 
 
 
 
 
 
 
Gross Margin Rate
11
 %
11
 %
8
%
11
 %
12
%
13
%
13
%
13
%
 
 
 
 
 
 
 
 
 
Effective Tax Rate (including discrete tax)
(245
)%
(47
)%
112
%
(33
)%
7
%
828
%
714
%
5
%
Discrete Tax benefit (expense)
$
2

$
(7
)
$
(9
)
$
16

$
5

$
(463
)
$
48

$
13

 
 
 
 
 
 
 
 
 
Consolidated Depreciation, Depletion and Amortization
$
173

$
165

$
159

$
166

$
169

$
172

$
217

$
217

Consolidated EBITDA(b)
$
208

$
199

$
193

$
277

$
451

$
271

$
257

$
333

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

$
(95
)
$
(115
)
$
(128
)
Adjusted EBITDA
$
312

$
277

$
194

$
289

$
358

$
366

$
372

$
461

 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
90

$
323

$
146

$
243

$
136

$
411

$
(71
)
$
807

Cash paid for interest (net of amount capitalized)
3

58

8

67

24

57

11

78

Cash paid for income taxes (net of refunds)
(50
)
(41
)

(9
)
(8
)
(53
)
13

14

Net cash used in investing activities
$
(978
)
$
(264
)
$
(245
)
$
(177
)
$
(221
)
$
(25
)
$
(1,220
)
$
(197
)
Capital expenditures
(196
)
(209
)
(224
)
(169
)
(198
)
(230
)
(223
)
(201
)
Net cash (used in) provided by financing activities
$
(112
)
$
(255
)
$
102

$
(85
)
$
94

$
1,090

$
(213
)
$
(170
)
Cash dividends paid
(96
)
(96
)
(96
)
(53
)
(53
)
(9
)
(10
)
(10
)
Effect of exchange rate changes on cash
$
(8
)
$
(12
)
$
3

$
2

$
18

$
(8
)
$
13

$
(65
)
Net change in cash and cash equivalents
$
(1,007
)
$
(208
)
$
6

$
(18
)
$
27

$
1,468

$
(1,491
)
$
375

 
 
 
 
 
 
 
 
 
Short-term debt
$
54

$

$
124

$
65

$
59

$
6

$
72

$
20

Long-term debt (including current portion)
3,823

3,818

3,828

3,843

3,856

5,222

5,074

4,998

Cash & cash equivalents
654

673

675

661

686

2,154

659

1,035

Net debt
$
3,223

$
3,145

$
3,276

$
3,247

$
3,229

$
3,074

$
4,487

$
3,983

 
 
 
 
 
 
 
 
 
Segment Contributions (in millions)
 
 
 
 
 
 
 
 
Potash
$
428

$
407

$
414

$
468

$
474

$
496

$
404

$
569

Phosphates
930

896

839

975

779

997

866

1,053

Mosaic Fertilizantes
740

521

427

467

806

520

665

713

Corporate and Other(c)
(146
)
38

(102
)
(155
)
(74
)
79

(1
)
(130
)
Total net sales
$
1,952

$
1,862

$
1,578

$
1,755

$
1,985

$
2,092

$
1,934

$
2,205

 
 
 
 
 
 
 
 
 
Potash
$
7

$
28

$
36

$
85

$
77

$
83

$
74

$
108

Phosphates
6

12

17

30

88

57

60

129

Mosaic Fertilizantes
50

39

11

21

46

10

9

14

Corporate and Other(c)
7

(5
)
(34
)
(42
)
3

(23
)
(62
)
(55
)
Consolidated operating earnings
$
70

$
74

$
30

$
95

$
214

$
127

$
81

$
196

 
 
 
 
 
 
 
 
 





Potash(d)
2,208

1,984

1,973

2,191

2,219

2,217

1,690

2,364

Phosphates(d)
2,521

2,504

2,272

2,582

2,110

2,496

1,945

2,302

Mosaic Fertilizantes
1,922

1,446

646

1,300

2,178

1,399

1,584

1,846

Corporate and Other
290

463

689

319

333

497

266

348

Total finished product tonnes sold ('000 tonnes)
6,941

6,397

5,580

6,392

6,840

6,609

5,485

6,860

Percent specialty(p)
18
 %
19
 %
19
%
22
 %
21
%
18
%
22
%
25
%





The Mosaic Company - Phosphates Segment
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
Net Sales
$
930

$
896

$
839

$
975

$
779

$
997

$
866

$
1,053

Cost of Goods Sold
829

812

783

898

712

864

769

899

Gross Margin
$
101

$
84

$
56

$
76

$
67

$
133

$
97

$
154

Notable Items Included in Gross Margin

9





(15
)
(6
)
Adjusted Gross Margin (excluding notables)
$
101

$
75

$
56

$
76

$
67

$
133

$
112

$
160

 
 
 
 
 
 
 
 
 
SG&A
30

30

30

29

25

29

31

24

Other operating (income) expense
65

42

9

18

(47
)
47

6

1

 
 
 
 
 
 
 
 
 
Operating Earnings
$
6

$
12

$
17

$
30

$
88

$
57

$
60

$
129

Plus: Depreciation, Depletion and Amortization
84

78

80

83

86

89

99

102

Plus: Foreign Exchange Gain (Loss)
2

4

(2
)
(4
)
(6
)
1

4

1

Plus: Other Income (Expense)

(10
)
(2
)
2

1

(1
)
(5
)
(3
)
Plus: Equity in net earnings (loss) of nonconsolidated companies
(2
)
(3
)

5

10

1

(4
)
1

Less: Earnings (loss) from Consolidated Noncontrolling Interests
2

4

2

(2
)

2

(1
)
1

EBITDA(g)
$
88

$
77

$
91

$
118

$
179

$
144

$
155

$
229

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

$
(38
)
$
(16
)
$
1

Adjusted EBITDA (excluding notables)
$
148

$
110

$
96

$
141

$
136

$
182

$
171

$
228

 
 
 
 
 
 
 
 
 
Capital expenditures
$
89

$
89

$
103

$
101

$
87

$
110

$
100

$
92

Gross Margin $ / tonne of finished product
$
40

$
34

$
25

$
29

$
32

$
53

$
49

$
67

Adjusted Gross Margin $ / tonne of finished product
$
40

$
30

$
25

$
29

$
32

$
53

$
57

$
70

Gross margin as a percent of sales
11
%
9
%
7
%
8
%
9
%
13
%
11
%
15
%
 
 
 
 
 
 
 
 
 
Freight included in finished goods (in millions)
$
86

$
91

$
79

$
103

$
78

$
107

$
77

$
100

 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes)(d)
 
 
 
 
 
 
 
 
DAP/MAP
1,715

1,763

1,486

1,706

1,483

1,663

1,295

1,332

Specialty(k)
806

741

786

876

627

833

650

970

Total Finished Product(d)
2,521

2,504

2,272

2,582

2,110

2,496

1,945

2,302

 
 
 
 
 
 
 
 
 
Average finished product selling price (destination)(e)
$
369

$
358

$
369

$
377

$
369

$
399

$
431

$
451

 
 
 
 
 
 
 
 
 
Production Volumes ('000 tonnes)
 
 
 
 
 
 
 
 
Total tonnes produced(h)
2,461

2,463

2,303

2,461

2,339

2,322

2,045

2,081

Operating Rate(n)
84
%
84
%
79
%
84
%
80
%
79
%
84
%
86
%
 
 
 
 
 
 
 
 
 
Realized costs ($/tonne)
 
 
 
 
 
 
 
 
Ammonia (tonne)(i)
$
287

$
259

$
285

$
373

$
283

$
298

$
344

$
325

Sulfur (long ton)(j)
$
93

$
87

$
87

$
90

$
88

$
97

$
128

$
139

Blended rock
$
60

$
58

$
59

$
58

$
63

$
55

$
55

$
59

 
 
 
 
 
 
 
 
 
Cash conversion costs / finished product tonne
$
62

$
65

$
79

$
67

$
68

$
70

$
68

$
64

Cash rock costs consumed / tonne
$
42

$
40

$
40

$
40

$
40

$
35

$
35

$
36

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

209

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

$
72

Gross margin $ / rock tonne
 
 
 
 
 
 
$
4

$
(3
)
Freight included in rock (in millions)
 
 
 
 
 
 
$
8

$
4






The Mosaic Company - Potash Segment
Selected Calendar Quarter Financial Information
(Unaudited)
 
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Net Sales and Gross Margin (in millions, except per tonne)
 
 
 
 
 
 
 
 
Segment income statement
 
 
 
 
 
 
 
 
Net Sales
$
428

$
407

$
414

$
468

$
474

$
496

$
404

$
569

Cost of Goods Sold
388

341

345

358

376

383

301

437

Gross Margin
$
40

$
66

$
69

$
110

$
99

$
114

$
103

$
132

Notable Items Included in Gross Margin


(3
)

(10
)

(5
)
(4
)
Adjusted Gross Margin (excluding notables)
$
40

$
66

$
72

$
110

$
109

$
114

$
108

$
136

 
 
 
 
 
 
 
 
 
SG&A
27

30

28

23

21

24

26

22

Other operating (income) expense
6

8

6

2

1

7

3

2

 
 
 
 
 
 
 
 
 
Operating Earnings
$
7

$
28

$
36

$
85

$
77

$
83

$
74

$
108

Plus: Depreciation, Depletion and Amortization
77

77

70

73

73

72

76

73

Plus: Foreign Exchange Gain (Loss)
(24
)
(27
)
8

30

55

(13
)
(30
)
(23
)
Plus: Other Income (Expense)
78








EBITDA(g)
$
138

$
78

$
114

$
188

$
205

$
142

$
120

$
158

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

$
30

$
45

$
(13
)
$
(35
)
$
(27
)
Adjusted EBITDA (excluding notables)
$
164

$
105

$
109

$
158

$
160

$
155

$
155

$
185

 
 
 
 
 
 
 
 
 
Capital expenditures
$
99

$
107

$
106

$
61

$
102

$
103

$
104

$
80

Gross Margin $ / tonne of finished product
$
18

$
33

$
35

$
50

$
44

$
51

$
61

$
56

Adjusted Gross Margin $ / tonne of finished product
$
18

$
33

$
37

$
50

$
49

$
51

$
64

$
58

Gross margin as a percent of sales
9
%
16
%
17
%
23
%
21
%
23
%
25
%
23
%
 
 
 
 
 
 
 
 
 
Supplemental Cost Information
 
 
 
 
 
 
 
 
Canadian resource taxes
$
14

$
31

$
23

$
33

$
(5
)
$
19

$
26

$
34

Royalties
$
4

$
5

$
5

$
6

$
52

$
9

$
8

$
9

Brine inflow expenses
$
38

$
36

$
39

$
38

$
37

$
36

$
39

$
39

Freight (f)
$
66

$
63

$
69

$
70

$
69

$
80

$
71

$
70

 
 
 
 
 
 
 
 
 
Operating Data
 
 
 
 
 
 
 
 
Sales volumes ('000 tonnes)(d)
 
 
 
 
 
 
 
 
MOP
2,086

1,862

1,832

2,038

2,071

2,044

1,551

2,169

Specialty(l)
122

122

141

153

148