"The Mosaic Company will be recognized as the leading crop nutrient company in the world."

That's a bold statement. It's also our objective ­— one that we are well on our way to achieving. For many companies, the challenges of the past year presented obstacles to achieving long-term objectives. For us, they presented an opportunity for bold moves — to strengthen our organization and to display our resolve — even in the face of unprecedented market uncertainty. In fiscal 2010, we continued to execute our long-term strategies for growth and value creation.

Mosaic's ability to supply the world's agricultural markets with a global-scale, balanced portfolio of two vital crop nutrients — phosphate and potash — is unparalleled in the industry. In fiscal 2010, during a tough economy, we continued to advance our strategic plan to expand that global leadership. Our strong cash position and significant mineral reserves support extensive long-term investment in Mosaic's future growth. In fiscal 2010, we began to fully harness these assets while extending our financial strength.

MARKET DYNAMICS TO DRIVE OUR BUSINESS

Global supply and demand dynamics continue to drive the need for more abundant, sustainable and protein-rich food sources. Each year, the world has 75 million additional mouths to feed, and the global population is expected to grow by another one billion by 2030. Larger populations combined with limited arable land will increase the pressure on farmers to strive for higher yields.

At the same time, the growing middle class in countries such as China and India can afford more nutrient-rich and high-protein diets. For example, the consumption of meat is rising by more than five percent a year in developing countries. During fiscal 2010, I visited many of these geographies where Mosaic has operations and witnessed this trend first hand.

These dynamics make Mosaic's products and agricultural expertise crucial to growing more food and meeting biofuel requirements. Agronomists estimate that commercial crop nutrients directly account for 40 to 60 percent of crop yields. Mosaic is committed to working with the world's farmers and crop scientists to improve agricultural practices and increase crop production around the world.



FISCAL 2010: MARKET TRANSITION

Fiscal 2010 was a transitional year in the agricultural markets. The global recession continued to impact the crop nutrient industry through the first half of fiscal 2010. Cautious farmers reduced the use of crop nutrients, and our distribution channel customers held back on purchases.

But demand for our products began to rebound during the second half of the year. Record harvests during the last two years, combined with reduced application rates, removed large amounts of potash and phosphate nutrients from soils. Ultimately, farmers need to replenish these nutrients to maintain soil fertility and maximize economic yields.

Mosaic's leadership in both potash and phosphates has been a key strength in fiscal 2010. While the potash market struggled to gain traction, our Phosphates business made a quicker return to healthier sales volumes and stable pricing. The combination and balance of these two strong product lines will continue to provide advantages in the years ahead.

BOLD MOVES: A YEAR OF KEY ACHIEVEMENTS

Mosaic effectively weathered the recession and capitalized in fiscal 2010, taking advantage of opportunities to further strengthen our company strategically, operationally and financially.

Mosaic's strategy calls for ambitious investment in potash production, capitalizing on select opportunities to expand our phosphate rock resources as well as creating greater value in our phosphate operations through reduced costs and improved operating efficiencies. We made significant progress in both areas in fiscal 2010.

On the strategic front, in Potash, we launched the first phase of our multi-billion-dollar expansion plan at our three large-scale mines in Saskatchewan — Belle Plaine, Colonsay and Esterhazy. Approximately 60 percent of the projects have been approved and are in various stages of planning, engineering or construction. When completed in 2020, we expect these projects to boost our annual potash peaking capacity to nearly 17 million tonnes. This capacity includes the impending reversion of 1.3 million tonnes of potash currently being supplied to a third party under a tolling agreement. We expect this capacity to revert back to Mosaic in calendar 2011.

In Phosphates, we made strategic investments in offshore sources of new phosphate rock to complement our extensive resources in Florida. We recently invested in the Miski Mayo phosphate rock mine being developed in Peru. This transaction advances our strategic priority to secure additional phosphate rock and reinforces our commitment to remain one of the top integrated phosphate producers in the world. We also announced the sale of our minority stake in Fosfertil and our own Cubatão operations in Brazil. In addition, PhosChem, the phosphate export association, completed a multi-year contract with our customers in India. This large base load contract will help us optimize production rates and improve profitability.

Sales of our premium products surged in fiscal 2010. We sold nearly 750,000 tonnes of MicroEssentials® (a phosphate product that includes critical micronutrients such as sulfur or zinc) worldwide during the fiscal year. We have plans to more than double these sales figures in the coming years and expect this product to become a larger part of our Phosphates segment sales mix.

We made headway in aligning our assets to capture future opportunities. Our distribution network provides Mosaic efficient access to the global market. In fiscal 2010, we more closely connected that network to our North American production assets to better serve our customers. We exited businesses in Thailand and Mexico to create a more streamlined and effective distribution network focused on distributing nutrients produced by Mosaic.


On the operational front, Mosaic made significant progress enhancing our efficiency and operational excellence across the entire enterprise. We launched initiatives that focus on process improvements and resource management to drive productivity to new levels, contain cost and ensure the sustainability of our company.

We also continued to invest in our people through a variety of initiatives ranging from new training programs for supervisors to expanded rotational job assignments — all designed to broaden our employees' career opportunities. Mosaic's corporate responsibility efforts were also a key area of emphasis. We completed our first sustainability report and were named one of the 100 Best Corporate Citizens by Corporate Responsibility Magazine, reflecting our conservation and environmental stewardship, as well as our financial transparency. Responsible corporate leadership is viewed as an important value and strength of Mosaic, and these efforts and recognition support our commitment.

On the financial front, we optimized cash flow to further strengthen our financial position. Throughout the financial crisis, we consistently maintained exceptional credit and collections metrics.

Our cash flow not only provided substantial fuel for our planned investments, but allowed us to enhance returns for our shareholders. In December 2009, Mosaic paid a special dividend of nearly $580 million to shareholders, or $1.30 per share, reflecting our strong balance sheet and cash position, which totaled $2.5 billion as of May 31, 2010. We nearly tripled historical capital expenditures with investments over $900 million this year and plan to exceed this level next year as we advance our potash expansion plans.

Like other companies, fiscal 2010 was a transitional year. Net sales totaled $6.8 billion compared to $10.3 billion in fiscal 2009, primarily due to a decline in sales volumes and lower selling prices, resulting from weak agricultural fundamentals and industry demand during the first half of the year. However, our financial performance improved as agricultural fundamentals began to recover in the second half of the year. We are well positioned to thrive as demand returns and grows.

A BRIGHT FUTURE

The long-term fundamentals remain positive. Farmers are seeing solid returns in many parts of the world. North American farmers returned to more normal nutrient application rates this spring, and we expect this trend to continue around the world in the months ahead. These encouraging signs are translating into increasing demand for our products.

Mosaic's balanced portfolio of crop nutrients is backed up by some of the world's most extensive potash reserves as well as our unmatched scale and rock resources in phosphates. As we enter fiscal 2011, we remain committed to making the investments necessary to extend our leadership in both nutrients. We also remain steadfast in our commitment to pursuing and securing the permits necessary to mine our phosphate reserves in Florida — including those at our South Fort Meade mine — and advancing our production in a manner that measures up to our high standards for environmental stewardship.

Relationships with customers are critical, and we will deepen these relationships on several fronts: through continued promotion of our premium product lines, such as MicroEssentials®; by improving our ability to respond quickly to our customers' product-supply needs; and through stronger collaboration. Our focus in these areas will further enhance our value to customers and continue to build our leadership in an industry with a complex and evolving competitive landscape.

Our robust cash position allows us flexibility as we invest for growth. We will continue to deploy capital in a manner that generates the optimum long-term return for our shareholders. Our priorities are focused on our planned potash expansions, extending phosphate rock resources, and pursuing strategic opportunities to enhance our cost and competitive position in phosphates, while maintaining sufficient liquidity to help manage through-market cyclicality. We will look to take advantage of both organic and non-organic growth opportunities.

Mosaic is the world's leading producer and marketer of potash and phosphates, providing an excellent foundation from which to pursue our future. We have developed a strong platform for long-term growth, value creation and for fulfilling our mission of helping an ever-expanding world grow the food it needs. We owe our success to the hard work, determination and engagement of our 7,500 employees worldwide, as well as our many customers, business partners and shareholders.

Together, we are forging a bright future.

Sincerely,



James T. Prokopanko
President and Chief Executive Officer
August 2010


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