Mosaic sales up 41% in Q1

Date:10-03-2011

The Mosaic Company reported first quarter fiscal year 2012 net earnings of $526 million, up 77 percent from $298 million in the prior year quarter. Earnings per diluted share were $1.17 in the quarter, up 75 percent from $0.67 per diluted share in the prior year period.

Mosaic's net sales in the first quarter of fiscal 2012 were $3.1 billion, a 41 percent increase from $2.2 billion in the same period last year.

"We just completed another excellent quarter for Mosaic," said Jim Prokopanko, president and chief executive officer of Mosaic. "Strong agricultural markets combined with our strength in execution are leading to excellent financial results, including the second highest gross margin for a first quarter in our history.

"Our confidence in the long-term demand prospects for our products remains high. Our multi-year, multi-billion dollar potash expansion remains on time and on budget, positioning us to reap benefits from long-term growth in potash demand. Our Phosphates team continues to show results from their operational excellence efforts, growing the value of our Phosphates business. We are successfully maintaining our low-cost position, and developing new products that create value for our customers. This allows us to successfully capitalize on the long-term growth in phosphate demand," added Prokopanko.

Mosaic's gross margin for the first quarter of fiscal 2012 was $848 million, or 28 percent of net sales, compared to $505 million, or 23 percent of net sales, a year ago. First quarter operating earnings were $730 million, an increase of 78 percent compared to $410 million a year ago. The increase in gross margin and operating earnings was driven primarily by higher selling prices and improved potash operating rates partially offset by increased phosphates raw material costs.

Cash flow provided by operating activities in the first quarter of fiscal 2012 was $554 million compared to $556 million in the prior year. Increases in cash flow due to net earnings were offset by the impact of changes in customer prepayments. Capital expenditures totaled $391 million in the quarter. Mosaic's total cash and cash equivalents, net of debt as of August 31, 2011, was $3.2 billion, up from $1.0 billion a year ago.

Subsequent to the quarter, the Company facilitated an underwritten public secondary offering of 20.7 million shares held by the Margaret A. Cargill trusts, as part of the planned orderly distribution of shares formerly owned by Cargill, Inc. Mosaic's inclusion in the S&P 500 on September 23, 2011, created increased market demand for the Company's shares, allowing the trusts to further divest their Mosaic holdings. As part of the split-off, the Company committed to facilitate the sale of 157 million shares through August 2012. Assuming closing of the latest transaction as scheduled, on September 29, 2011, only 21.3 million of those shares remain to be sold.

Business Highlights

� Several notable expense items lowered pre-tax results by $26 million, or $0.04 per share after tax, as detailed in a table at the end of this release

� Mining production significantly improved with phosphate rock production higher by 470,000 tonnes, or 20 percent, and potash production higher by 415,000 tonnes, or 29 percent, over the same period last year

� Customer demand for MicroEssentials, a premium phosphate product, is up with production of 397,000 tonnes during the quarter, up 104 percent from 195,000 tonnes a year ago

� The Company announced it will begin production of Nexfos, a new granulated feed-grade phosphate product

� The Company continues to make progress with its potash expansions. Capital spending on potash expansions exceeded $200 million during the quarter

� In conjunction with Standard & Poor's announcement that it would add Mosaic to the S&P 500 index last week, the Company facilitated the sale of 20.7 million shares by the Margaret A. Cargill trusts

� The Company's Environmental, Health and Safety management system received ISO certification for its ability to identify risks, take mitigating actions and continuously improve processes. The Company is the only North American crop nutrient producer to meet the high standards required to achieve this recognition

� In North America and Asia, the Company achieved a Net Promoter Score in the excellent range, an indicator of high customer satisfaction