PLYMOUTH, Minn., Feb. 11, 2016 /PRNewswire/ -- The Mosaic
Company (NYSE: MOS) today reported fourth quarter 2015 net earnings
of $155 million, down from
$361 million in the fourth quarter of
2014. Earnings per diluted share were $0.44 and included both a negative $0.16 impact from notable items and a benefit of
$0.07 per share from adjusting the
full year effective tax rate accrual. Mosaic's net sales in the
fourth quarter of 2015 were $2.2
billion, down from $2.4
billion last year. Operating earnings during the quarter
were $204 million, down from
$365 million a year ago, impacted by
lower potash and phosphate prices and volumes, as well as lower
potash production, partially offset by cost savings.
"Our fourth quarter results reflect the cyclicality and
seasonality of our business," said Joc
O'Rourke, President and Chief Executive Officer. "Our
progress on cost savings initiatives and strategic investments has
positioned Mosaic to optimize performance in the current
macroeconomic environment. At the same time, our prudent
balance sheet management allows us to take advantage of
opportunities to create long-term value. Repurchasing shares
at the bottom of the cycle is high on the priority list."
Cash flow provided by operating activities in the fourth quarter
of 2015 was $302 million compared to
$347 million in the prior year.
Capital expenditures plus investments in the Ma'aden Wa'ad Al
Shamal Phosphate Company ("MWSPC," also known as the Ma'aden joint
venture) totaled $398 million in the
quarter. Mosaic's total cash and cash equivalents were $1.3 billion and long-term debt was $3.8 billion as of December 31, 2015.
Full-Year 2015 Results (unaudited)
"Mosaic grew full-year earnings per share in this challenging
environment by focusing on cost control and executing share
repurchases in accordance with our stated goals," said Rich Mack, Mosaic's Executive Vice President and
Chief Financial Officer.
For the 12 months ended December 31,
2015, net income was $1.0
billion, or $2.78 per diluted
share, compared to $1.0 billion, or
$2.68 per diluted share in 2014. Net
sales were $8.9 billion, down from
$9.1 billion a year ago. Full-year
operating earnings were $1.3 billion,
roughly flat with last year, as lower sales volumes and prices in
potash combined with lower phosphate margins, were largely offset
by lower expenses.
Full-year selling, general and administrative (SG&A)
expenses were $361 million compared
to $382 million in 2014. Net cash
provided by operating activities was $1.8
billion and capital expenditures including investments in
MWSPC were $1.2 billion, resulting in
free cash flow of approximately $580
million, before dividends.
Business Highlights – Full-Year 2015
- The remaining potash expansion at Mosaic's Esterhazy K3 site progressed on time and on
budget with expected commissioning in 2017. When fully
operational, Esterhazy K3 is
expected to further reduce the Company's on-going costs of
production and provide the ability to eliminate brine inflow
management costs and risk.
- Mosaic completed the integration of the Archer Daniels Midland
Company's ("ADM") Brazil and
Paraguay fertilizer distribution
business acquired in December of 2014. Over time, the Company
expects this acquisition to increase annual distribution from
approximately four to six million metric tonnes of crop nutrients
in key agricultural regions.
- The MicroEssentials® expansion continued to progress
on time and on budget and is expected to add an incremental 1.2
million tonnes, bringing total capacity to 3.5 million tonnes by
the end of 2016.
- Mosaic made equity contributions of $225
million to MWSPC to develop, own and operate integrated
phosphate production facilities in the Kingdom of Saudi Arabia. The joint venture is
expected to be the lowest cost producer of finished phosphates
globally.
- Mosaic made excellent progress on aggressive cost savings
initiatives which are positively impacting operating results:
- MOP cash costs per tonne of production declined by 16 percent
from the prior year, benefiting from closures of high cost
operations, lower spending and a weaker Canadian dollar.
- Phosphate rock cash production costs were near a five year low,
as the Company effectively mitigated the effects of inflation.
- SG&A expenses declined six percent from the prior year to a
six year low, despite a larger business footprint.
- Mosaic made significant progress on achieving balance sheet
targets and providing meaningful capital returns to shareholders:
- Mosaic repurchased approximately 15.6 million shares for an
aggregate amount of $698 million
during the year.
- In March 2015, the Company's
Board of Directors approved an increase in the annual dividend to
$1.10 from $1.00 per share. During 2015, Mosaic paid
$385 million in dividends.
- Mosaic ended the year with $1.3
billion of cash and cash equivalents on the balance
sheet.
- Mosaic entered into settlement agreements with federal and
state regulators to resolve longstanding claims relating to the
Company's management of certain waste materials generated at
fertilizer manufacturing facilities in Florida and Louisiana.
- Mosaic ended 2015 with a record low annual recordable injury
frequency rate for the second consecutive year.
Phosphates
Phosphates
Results
|
4Q 2015
Actual
|
4Q 2015
Guidance
|
Average DAP Selling
Price
|
$410
|
$410 to
$440
|
Sales
Volume
|
2.2 million
tonnes
|
1.9 to 2.2 million
tonnes
|
Phosphate
Production
|
76% of operational
capacity
|
Around 80% of
operational capacity
|
"Our Phosphates business generated stable results for most of
the year, highlighting the positive fundamentals of the industry
and Mosaic's market leadership role," O'Rourke said. "Lower prices
in this period of seasonally weak demand and our related production
curtailment, combined with a lag in realizing the benefits of lower
raw materials costs, all negatively impacted margins during the
fourth quarter. For 2016, we expect another record year for global
phosphate shipments, with market dynamics indicating an attractive
supply and demand balance."
Net sales in the Phosphates segment were $1.0 billion for the fourth quarter, down from
$1.2 billion last year, driven by
lower sales volumes and lower finished product prices. Gross margin
was $121 million, or 12 percent of
net sales, compared to $231 million,
or 19 percent of net sales, for the same period a year ago. The
year-over-year change in gross margin rate primarily reflects lower
finished product selling prices and a lower operating rate,
partially offset by lower realized ammonia and sulfur costs.
The fourth quarter average DAP selling price, FOB plant, was
$410 per tonne, compared to
$447 per tonne a year ago. Phosphates
segment total sales volumes were 2.2 million tonnes, down from 2.4
million tonnes last year.
Mosaic's North American finished phosphate production was 2.2
million tonnes, or 76 percent of operational capacity, compared to
2.4 million tonnes, or 81 percent a year ago.
Potash
Potash
Results
|
4Q 2015
Actual
|
4Q 2015
Guidance
|
Average MOP Selling
Price
|
$254
|
$235 to
$255
|
Sales
Volume
|
1.9 million
tonnes
|
1.8 to 2.1 million
tonnes
|
Potash
Production
|
70% of operational
capacity
|
Around 70% of
operational capacity
|
"Mosaic's actions to optimize our potash production by closing
high-cost facilities and aggressively managing costs are delivering
results," O'Rourke said. "High retailer inventories at the
beginning of 2015, the volatility and devaluation of foreign
currencies against the U.S. dollar, and additional industry
production capacity put pressure on potash prices. We expect
a more stable operating environment in 2016 as a result of solid
demand and recently announced supply adjustments."
Net sales in the Potash segment totaled $572 million for the fourth quarter, down from
$763 million last year, driven by
lower shipment volumes and a lower average price. Gross margin was
$155 million, or 27 percent of net
sales, compared to $327 million, or
43 percent of net sales a year ago. Excluding Canadian resource
taxes, gross margin rate was 37 percent of net sales, down 12
percentage points from the fourth quarter of last year. The
year-over-year decrease in gross margin was driven by lower selling
prices and volumes, a lower operating rate, partially offset by
benefits from foreign currency and cost savings initiatives.
The fourth quarter average MOP selling price, FOB plant, was
$254 per tonne, down from
$295 per tonne a year ago. The Potash
segment's total sales volumes for the fourth quarter were 1.9
million tonnes, compared to 2.3 million tonnes a year ago.
Potash production was 1.9 million tonnes, or 70 percent of
operational capacity, down from 2.6 million tonnes, or 91 percent
of operational capacity a year ago, reflecting Mosaic's previously
announced decision to curtail production.
International Distribution (ID)
ID
Results
|
4Q 2015
Actual
|
4Q 2015
Guidance
|
Sales
Volume
|
1.5 million
tonnes
|
1.3 to 1.6 million
tonnes
|
Gross Margin per
Tonne
|
$26 per
tonne
|
$23 to $28 per
tonne
|
Net sales in the International Distribution segment were
$605 million for the fourth quarter,
up from $516 million last year,
primarily as a result of increased volumes from the acquisition of
ADM's distribution business. Gross margin was $38 million, or six percent of net sales,
compared to $41 million, or eight
percent of net sales for the same period a year ago.
The fourth quarter average selling price was $407 per tonne, compared to $456 per tonne a year ago. International
Distribution segment total sales volumes were 1.5 million tonnes,
up from 1.1 million tonnes last year.
Other
SG&A expenses were $95 million
for the fourth quarter, up from $91
million last year, largely as a result of professional fees
and the ADM acquisition which closed in late December of 2014.
The effective tax rate in the quarter was negative. Provision
for income taxes in the fourth quarter includes a $26 million benefit related to the reduction of
the full year estimated effective tax rate from 16 percent to 13
percent.
Financial Guidance
"While the external environment is challenging, agriculture is
very different from hard commodities. Cycles change quickly,
as demand for food continues to grow," O'Rourke said. "Mosaic is
effectively navigating the current environment and is in position
to take advantage of opportunities during the bottom part of the
commodity cycle."
"We have maintained an appropriately conservative balance sheet,
have ample liquidity and have the flexibility to further reduce
capital spending," said Mack. "Cost reduction efforts and focused
execution are helping maintain profitability in difficult
markets. We expect to continue to maintain a strong balance
sheet and generate positive free cash flow in 2016."
Total sales volumes for the Phosphates segment are expected to
range from 1.8 to 2.2 million tonnes for the first quarter of 2016,
compared to 2.3 million tonnes last year. Mosaic's realized DAP
price, FOB plant, is estimated to range from $350 to $370 per tonne for the first quarter of
2016. As Mosaic works through higher cost inventory, the segment
gross margin rate in the first quarter is estimated to be around 10
percent, and the operating rate is expected to be in the 70 to 80
percent range, reflecting the Company's decision to curtail
production in this period.
Total sales volumes for the Potash segment are expected to range
from 1.5 to 1.9 million tonnes for the first quarter of 2016,
compared to 2.0 million tonnes last year. Mosaic's realized MOP
price, FOB plant, is estimated to range from $200 to $230 per tonne. Mosaic's gross margin
rate in the segment is expected to be in the low to mid 20 percent
range. The operating rate is expected to be in the 70 to 80 percent
range.
Total sales volumes for the International Distribution segment
are expected to range from 1.0 to 1.2 million tonnes for the first
quarter of 2016, compared to 1.0 million tonnes last year. The
segment gross margin per tonne is estimated to be around
$10 per tonne.
For the calendar 2016, Mosaic estimates:
- SG&A expenses to range from $350 to
$370 million with cost savings offsetting inflation.
- Canadian resource taxes and royalties to range from
$180 to $220 million.
- Brine management costs to range from $160 to $180 million.
- The effective tax rate to be in the upper teens.
- Capital expenditures in the range of $0.9 to $1.1 billion and equity investments in
MWSPC of approximately $300
million.
- Phosphates sales volumes in the range of 9 to 10 million
tonnes.
- Potash sales volumes in the range of 7.5 to 8.5 million
tonnes.
- International Distribution sales volumes in the range of 6 to 7
million tonnes.
Beginning in the second quarter of 2016, the Company expects to
change how it provides guidance for Potash margin rate and Canadian
resource taxes. Gross margin rate guidance will exclude
Canadian resources taxes, but include Canadian royalties.
Full year Canadian resource tax guidance will be given as a range
of rates to be applied to expected gross profits, excluding
Canadian resource taxes. Under this new methodology, guidance
for the first quarter 2016 is as follows:
- First quarter 2016 Potash gross margin rate, excluding Canadian
resource taxes, is expected to be in the low to mid 30 percent
range.
- Canadian resource taxes are expected to range from 21 to 25
percent of Potash gross margin excluding Canadian resource
taxes.
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 Thursday, February 11, 2016, at 9:00 a.m. EST to discuss fourth quarter and
full-year 2015 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 document 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 Wa'ad Al Shamal Phosphate Company (also known as the Ma'aden
joint venture) and 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 risks and
uncertainties arising from the ability of the Ma'aden joint venture
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, the future success of
current plans for the Ma'aden joint venture and any future changes
in those plans; difficulties with realization of the benefits of
our long term natural gas based pricing ammonia supply agreement
with CF, including the risk that the cost savings from the
agreement may not be realized or that the price of natural
gas or ammonia during the agreement's term are at levels at which
the pricing becomes disadvantageous to Mosaic; customer defaults;
the effects of Mosaic's decisions to exit business operations or
locations; 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 risk
that protests against natural resource companies in Peru extend to or impact the Miski Mayo mine;
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, 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 or Canada, 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 Ma'aden joint venture, 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 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.
For the three months ended December 31, 2015, the Company
reported the following notable items which, combined, negatively
impacted earnings per share by $0.16:
|
|
|
|
|
|
Amount
|
|
Tax
effect
|
|
EPS impact
|
Description
|
|
Segment
|
|
Line
item
|
|
(in millions)
|
|
(in millions)
|
|
(per share)
|
Foreign currency
transaction (loss) gain
|
|
Consolidated
|
|
Foreign currency
transaction (loss) gain
|
|
$
|
(41)
|
|
|
$
|
5
|
|
|
$
|
(0.10)
|
|
Unrealized gain
(loss) on derivatives
|
|
Corporate &
Other
|
|
Cost of goods
sold
|
|
1
|
|
|
—
|
|
|
—
|
|
ARO year-end
adjustment
|
|
Potash
|
|
Other operating
expenses
|
|
(6)
|
|
|
1
|
|
|
(0.02)
|
|
ARO year-end
adjustment
|
|
Phosphates
|
|
Other operating
expenses
|
|
(26)
|
|
|
3
|
|
|
(0.06)
|
|
Discrete tax
items
|
|
Consolidated
|
|
Benefit from income
taxes
|
|
—
|
|
|
6
|
|
|
0.02
|
|
Total Notable
Items
|
|
|
|
|
|
$
|
(72)
|
|
|
$
|
15
|
|
|
$
|
(0.16)
|
|
For the three months ended December 31, 2014, the Company
reported the following notable items which, combined, positively
impacted earnings per share by $0.10:
|
|
|
|
|
|
Amount
|
|
Tax effect
|
|
EPS impact
|
Description
|
|
Segment
|
|
Line
item
|
|
(in millions)
|
|
(in millions)
|
|
(per
share)
|
Foreign currency
transaction (loss) gain
|
|
Consolidated
|
|
Foreign currency
transaction (loss) gain
|
|
$
|
48
|
|
|
$
|
(14)
|
|
|
$
|
0.09
|
|
Unrealized gain
(loss) on derivatives
|
|
Corporate &
Other
|
|
Cost of goods
sold
|
|
(30)
|
|
|
9
|
|
|
(0.06)
|
|
Adjustment to assets
held for sale
|
|
International
Distribution
|
|
Other operating
expenses
|
|
(10)
|
|
|
3
|
|
|
(0.02)
|
|
Loss on write-down of
Carlsbad
|
|
Potash
|
|
Carlsbad
restructuring expense
|
|
(59)
|
|
|
24
|
|
|
(0.09)
|
|
Insurance
proceeds
|
|
Potash
|
|
Other operating
expenses
|
|
10
|
|
|
(3)
|
|
|
0.02
|
|
ARO year-end
adjustment
|
|
Phosphates
|
|
Other operating
expenses
|
|
(22)
|
|
|
6
|
|
|
(0.04)
|
|
Discrete tax
items
|
|
Consolidated
|
|
Benefit
from income taxes
|
|
—
|
|
|
76
|
|
|
0.20
|
|
Total Notable
Items
|
|
|
|
|
|
$
|
(63)
|
|
|
$
|
101
|
|
|
$
|
0.10
|
|
Condensed
Consolidated Statements of Earnings
|
(in millions,
except per share amounts)
|
|
|
|
The Mosaic
Company
|
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve
Months Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net sales
|
|
$
|
2,163.2
|
|
|
$
|
2,378.6
|
|
|
$
|
8,895.3
|
|
|
$
|
9,055.8
|
|
Cost of goods
sold
|
|
1,807.7
|
|
|
1,799.5
|
|
|
7,177.4
|
|
|
7,129.2
|
|
Gross
margin
|
|
355.5
|
|
|
579.1
|
|
|
1,717.9
|
|
|
1,926.6
|
|
Selling, general and
administrative expenses
|
|
94.9
|
|
|
91.1
|
|
|
361.2
|
|
|
382.4
|
|
(Gain) loss on assets
sold and to be sold
|
|
—
|
|
|
9.7
|
|
|
—
|
|
|
(16.4)
|
|
Carlsbad
restructuring expense
|
|
—
|
|
|
58.4
|
|
|
—
|
|
|
125.4
|
|
Other operating
expenses
|
|
56.3
|
|
|
55.3
|
|
|
77.9
|
|
|
123.4
|
|
Operating
earnings
|
|
204.3
|
|
|
364.6
|
|
|
1,278.8
|
|
|
1,311.8
|
|
(Loss) in value of
share repurchase agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.2)
|
|
Interest (expense),
net
|
|
(18.8)
|
|
|
(31.0)
|
|
|
(97.8)
|
|
|
(107.6)
|
|
Foreign currency
transaction gain (loss)
|
|
(41.1)
|
|
|
47.3
|
|
|
(60.5)
|
|
|
79.1
|
|
Other (expense)
income
|
|
(2.7)
|
|
|
0.3
|
|
|
(17.2)
|
|
|
(5.8)
|
|
Earnings from
consolidated companies before income taxes
|
|
141.7
|
|
|
381.2
|
|
|
1,103.3
|
|
|
1,217.3
|
|
(Benefit from)
provision for income taxes
|
|
(14.3)
|
|
|
27.0
|
|
|
99.1
|
|
|
184.7
|
|
Earnings from
consolidated companies
|
|
156.0
|
|
|
354.2
|
|
|
1,004.2
|
|
|
1,032.6
|
|
Equity in net
earnings (loss) of nonconsolidated companies
|
|
(0.5)
|
|
|
7.4
|
|
|
(2.4)
|
|
|
(2.2)
|
|
Net earnings
including noncontrolling interests
|
|
155.5
|
|
|
361.6
|
|
|
1,001.8
|
|
|
1,030.4
|
|
Less: Net earnings
attributable to noncontrolling interests
|
|
0.5
|
|
|
0.9
|
|
|
1.4
|
|
|
1.8
|
|
Net earnings
attributable to Mosaic
|
|
$
|
155.0
|
|
|
$
|
360.7
|
|
|
$
|
1,000.4
|
|
|
$
|
1,028.6
|
|
Diluted net earnings
per share attributable to Mosaic
|
|
$
|
0.44
|
|
|
$
|
0.97
|
|
|
$
|
2.78
|
|
|
$
|
2.68
|
|
Diluted weighted
average number of shares outstanding
|
|
354.3
|
|
|
372.0
|
|
|
360.3
|
|
|
375.6
|
|
Condensed
Consolidated Balance Sheets
|
(in millions,
except per share amounts)
|
|
|
|
The Mosaic
Company
|
|
(unaudited)
|
|
|
December 31,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,276.3
|
|
|
$
|
2,374.6
|
|
Receivables,
net
|
|
675.0
|
|
|
754.4
|
|
Inventories
|
|
1,563.5
|
|
|
1,718.3
|
|
Other current
assets
|
|
629.9
|
|
|
368.2
|
|
Total current
assets
|
|
4,144.7
|
|
|
5,215.5
|
|
Property, plant and
equipment, net
|
|
8,721.0
|
|
|
9,313.9
|
|
Investments in
nonconsolidated companies
|
|
980.5
|
|
|
849.8
|
|
Goodwill
|
|
1,595.3
|
|
|
1,806.5
|
|
Deferred income
taxes
|
|
691.9
|
|
|
543.1
|
|
Other
assets
|
|
1,279.0
|
|
|
554.2
|
|
Total
assets
|
|
$
|
17,412.4
|
|
|
$
|
18,283.0
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
debt
|
|
$
|
25.5
|
|
|
$
|
13.5
|
|
Current maturities of
long-term debt
|
|
43.0
|
|
|
41.0
|
|
Structured accounts
payable arrangements
|
|
481.7
|
|
|
237.7
|
|
Accounts
payable
|
|
520.6
|
|
|
559.6
|
|
Accrued
liabilities
|
|
971.8
|
|
|
726.1
|
|
Accrued income
taxes
|
|
5.7
|
|
|
18.8
|
|
Total current
liabilities
|
|
2,048.3
|
|
|
1,596.7
|
|
Long-term debt, less
current maturities
|
|
3,791.1
|
|
|
3,778.0
|
|
Deferred income
taxes
|
|
977.4
|
|
|
987.7
|
|
Other noncurrent
liabilities
|
|
1,030.6
|
|
|
1,200.0
|
|
Equity:
|
|
|
|
|
Preferred stock,
$0.01 par value, 15,000,000 shares authorized, none issued and
outstanding as of December 31, 2015 and 2014
|
|
—
|
|
|
—
|
|
Class A common stock,
$0.01 par value, 194,203,987 shares authorized, none issued and
outstanding as of December 31, 2015, 17,176,046 shares issued and
outstanding as of December 31, 2014
|
|
—
|
|
|
0.2
|
|
Class B common stock,
$0.01 par value, 87,008,602 shares authorized, none issued and
outstanding as of December 31, 2015 and 2014
|
|
—
|
|
|
—
|
|
Common stock, $0.01
par value, 1,000,000,000 shares authorized, 387,697,547 shares
issued and 352,515,256 shares outstanding as of December 31, 2015,
369,987,783 shares issued and 350,364,236 shares outstanding as of
December 31, 2014
|
|
3.5
|
|
|
3.5
|
|
Capital in excess of
par value
|
|
6.4
|
|
|
4.2
|
|
Retained
earnings
|
|
11,014.8
|
|
|
11,168.9
|
|
Accumulated other
comprehensive income
|
|
(1,492.9)
|
|
|
(473.7)
|
|
Total Mosaic
stockholders' equity
|
|
9,531.8
|
|
|
10,703.1
|
|
Non-controlling
interests
|
|
33.2
|
|
|
17.5
|
|
Total
equity
|
|
9,565.0
|
|
|
10,720.6
|
|
Total liabilities and
equity
|
|
$
|
17,412.4
|
|
|
$
|
18,283.0
|
|
Condensed
Consolidated Statements of Cash Flows
|
(in millions,
except per share amounts)
|
|
|
|
The Mosaic
Company
|
|
(unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 302.3
|
|
|
$ 346.6
|
|
|
$ 1,807.6
|
|
|
$ 2,122.1
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(298.1)
|
|
|
(251.8)
|
|
|
(1,000.3)
|
|
|
(929.1)
|
|
Proceeds from sale of
businesses
|
|
—
|
|
|
26.4
|
|
|
—
|
|
|
81.4
|
|
Restricted
cash
|
|
—
|
|
|
—
|
|
|
(630.0)
|
|
|
—
|
|
Acquisition of
businesses
|
|
—
|
|
|
(349.6)
|
|
|
—
|
|
|
(1,725.4)
|
|
Proceeds from
adjustment to acquisition of business
|
|
—
|
|
|
—
|
|
|
47.9
|
|
|
—
|
|
Investments in
nonconsolidated companies
|
|
(102.1)
|
|
|
(2.6)
|
|
|
(227.1)
|
|
|
(154.6)
|
|
Return of investment
from nonconsolidated companies
|
|
—
|
|
|
—
|
|
|
54.4
|
|
|
—
|
|
Other
|
|
0.7
|
|
|
(8.8)
|
|
|
6.7
|
|
|
(11.4)
|
|
Net cash (used in)
investing activities
|
|
(399.5)
|
|
|
(586.4)
|
|
|
(1,748.4)
|
|
|
(2,739.1)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Payments of
short-term debt
|
|
(70.2)
|
|
|
(1.0)
|
|
|
(367.2)
|
|
|
(220.4)
|
|
Proceeds from
issuance of short-term debt
|
|
77.2
|
|
|
14.2
|
|
|
379.7
|
|
|
200.2
|
|
Payments of
structured accounts payable arrangements
|
|
(83.1)
|
|
|
(55.5)
|
|
|
(395.7)
|
|
|
(177.6)
|
|
Proceeds from
structured accounts payable arrangements
|
|
288.8
|
|
|
90.7
|
|
|
635.2
|
|
|
349.2
|
|
Payments of long-term
debt
|
|
(1.2)
|
|
|
(0.6)
|
|
|
(59.6)
|
|
|
(2.1)
|
|
Proceeds from
issuance of long-term debt
|
|
(1.2)
|
|
|
4.8
|
|
|
4.7
|
|
|
812.0
|
|
Repurchase of
stock
|
|
(0.1)
|
|
|
(247.6)
|
|
|
(709.5)
|
|
|
(2,755.3)
|
|
Cash dividends
paid
|
|
(96.9)
|
|
|
(93.9)
|
|
|
(384.7)
|
|
|
(382.5)
|
|
Other
|
|
6.7
|
|
|
5.6
|
|
|
3.7
|
|
|
8.1
|
|
Net cash provided by
(used in) financing activities
|
|
120.0
|
|
|
(283.3)
|
|
|
(893.4)
|
|
|
(2,168.4)
|
|
Effect of exchange
rate changes on cash
|
|
(31.4)
|
|
|
(72.9)
|
|
|
(264.1)
|
|
|
(133.1)
|
|
Net change in cash
and cash equivalents
|
|
(8.6)
|
|
|
(596.0)
|
|
|
(1,098.3)
|
|
|
(2,918.5)
|
|
Cash and cash
equivalents - beginning of period
|
|
1,284.9
|
|
|
2,970.6
|
|
|
2,374.6
|
|
|
5,293.1
|
|
Cash and cash
equivalents - end of period
|
|
$
|
1,276.3
|
|
|
$
|
2,374.6
|
|
|
$
|
1,276.3
|
|
|
$
|
2,374.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
U.S. generally accepted accounting principles ("GAAP"), the Company
has presented gross margin excluding Canadian resource taxes
("CRT") for Potash, adjusted diluted earnings per share and free
cash flow, each of which is a non-GAAP financial measure.
Generally, a non-GAAP financial measure is a supplemental numerical
measure of a company's performance, financial position or cash
flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable
measure calculated and presented in accordance with GAAP. None of
gross margin excluding CRT, adjusted diluted earnings per share or
free cash flow is a measure of financial performance under GAAP.
Because not all companies use identical calculations, investors
should consider that Mosaic's calculations may not be comparable to
other similarly titled measures presented by other companies. Gross
margin excluding CRT, adjusted diluted earnings per share and free
cash flow should not be considered as substitutes for, or superior
to, measures of financial performance prepared in accordance with
GAAP.
Gross margin excluding CRT provides a measure that the Company
believes enhances the reader's ability to compare the Company's
gross margin with that of other companies which incur CRT expense
and classify it in a manner different than the Company in their
statement of earnings. Because securities analysts, investors,
lenders and others use gross margin excluding CRT, the Company's
management believes that Mosaic's presentation of gross margin
excluding CRT for Potash affords them greater transparency in
assessing Mosaic's financial performance against competitors.
Free cash flow provides a metric that the Company believes is
helpful to investors in evaluating the Company's ability to
generate cash.
Management believes that adjusted diluted earnings per share
provides securities analysts, investors and others, in addition to
management, 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 adjusted diluted earnings per share in analyzing and
assessing the Company's overall performance, for financial and
operating decision-making, and to forecast and plan for the future
periods. Adjusted diluted earnings per share also assists our
management in comparing our and our competitors' operating
results.
Potash Gross
Margin, Excluding Resource Taxes Calculation
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Sales
|
|
$
|
572.5
|
|
|
$
|
763.1
|
|
|
$
|
2,447.0
|
|
|
$
|
2,851.6
|
|
Gross
margin
|
|
154.6
|
|
|
326.8
|
|
|
788.3
|
|
|
923.2
|
|
Canadian resource
taxes
|
|
55.9
|
|
|
47.7
|
|
|
248.0
|
|
|
168.4
|
|
Gross margin,
excluding Canadian resource taxes (CRT)
|
|
$
|
210.5
|
|
|
$
|
374.5
|
|
|
$
|
1,036.3
|
|
|
$
|
1,091.6
|
|
Gross margin
percentage, excluding CRT
|
|
36.8
|
%
|
|
49.1
|
%
|
|
42.3
|
%
|
|
38.3
|
%
|
Free Cash
Flow
|
|
|
|
Twelve Months
Ended
December 31,
|
|
|
2015
|
Net cash provided by
operating activities
|
|
$
|
1,807.6
|
|
Capital
Expenditures
|
|
(1,000.3)
|
|
Investments in Wa'ad
Al Shamal
|
|
(225.2)
|
|
Free cash
flow
|
|
$
|
582.1
|
|
Reconciliation of
Adjusted Diluted Earnings Per Share
|
|
|
Three months ended
December 31,
|
|
2015
|
|
2014
|
Diluted earnings
per share, as reported
|
$ 0.44
|
|
|
$ 0.97
|
|
|
|
|
|
Items included in
earnings per share:
|
|
|
|
Foreign currency
transaction (gain) loss
|
0.10
|
|
|
(0.09)
|
|
Unrealized (gain)
loss on derivatives
|
—
|
|
|
0.06
|
|
Discrete tax
items
|
(0.02)
|
|
|
(0.20)
|
|
ARO
Adjustment
|
0.08
|
|
|
0.04
|
|
Tax rate
adjustment
|
(0.07)
|
|
|
—
|
|
Adjustments to assets
held for sale
|
—
|
|
|
0.02
|
|
Loss on write-down of
Carlsbad
|
—
|
|
|
0.09
|
|
Carlsbad insurance
proceeds
|
—
|
|
|
(0.02)
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$ 0.53
|
|
|
$ 0.87
|
|
Earnings Per Share
Calculation
|
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net earnings
attributed to Mosaic
|
|
$
|
155.0
|
|
|
$
|
360.7
|
|
|
$
|
1,000.4
|
|
|
$
|
1,028.6
|
|
Undistributed
earnings attributable to participating securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.3)
|
|
Numerator for basic
and diluted earnings available to common stockholders
|
|
$
|
155.0
|
|
|
$
|
360.7
|
|
|
$
|
1,000.4
|
|
|
$
|
1,006.3
|
|
Basic weighted
average number of shares outstanding
|
|
352.5
|
|
|
370.2
|
|
|
358.5
|
|
|
382.4
|
|
Shares subject to
forward contract
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.3)
|
|
Basic weighted
average number of shares outstanding attributable to common
stockholders
|
|
352.5
|
|
|
370.2
|
|
|
358.5
|
|
|
374.1
|
|
Dilutive impact of
share-based awards
|
|
1.8
|
|
|
1.8
|
|
|
1.8
|
|
|
1.5
|
|
Diluted weighted
average number of shares outstanding
|
|
354.3
|
|
|
372.0
|
|
|
360.3
|
|
|
375.6
|
|
Basic net earnings
per share
|
|
$
|
0.44
|
|
|
$
|
0.97
|
|
|
$
|
2.79
|
|
|
$
|
2.69
|
|
Diluted net earnings
per share
|
|
$
|
0.44
|
|
|
$
|
0.97
|
|
|
$
|
2.78
|
|
|
$
|
2.68
|
|
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SOURCE The Mosaic Company