Transcript
PotashCorp.com
Q1 2014 Conference CallApril 24, 2014
Forward-looking Statements
Slide#2
First-Quarter 2014 Highlights
• Earnings of $0.40 per share1; trailed the $0.63 per share earned in 2013
• Notable items in results included:
• $69 million special dividend received from ICL ($0.06 per share)
• $38 million impairment charge recorded on Sinofert investment ($0.04 per share)
• Cash provided by operating activities of $539 million
• Repurchased 11.7 million common shares at an average cost of $34 per share
• Market value of investments $5.4 billion, or $6 per PotashCorp share2
Source: PotashCorp
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Gross Margin Decrease Due to Lower Prices Across All Nutrients
Quarterly Gross Margin Comparison
Source: PotashCorp
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Sugar Palm Oil Wheat Corn Soybeans0
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20 Chart Title
Source: Bloomberg, PotashCorp
Agricultural FundamentalsUnderlying Support for Robust Fertilizer Demand
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Percentage Price Change: Jan 1 – Apr 21, 2014 Fertilizer Affordability Index
0
50
100
150
200
250
300
350
400
450 Crop Price Index*Fertilizer Price Index**
Source: Fertecon, CRU, Industry Publications, PotashCorp
World Potash DemandPotential for Record or Near-record Global Shipments
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China India Other Asia
Latin America
North America
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14 2013 2014F Record
Million Tonnes KCl
Potash Shipments by Major Market
Global Potash Shipments by Half
1H 2012
1H 2013
1H 2014F
2H 2012
2H 2013
2H 2014F
10
15
20
25
30
Million Tonnes KCl
Source: Fertecon, CRU, PotashCorp
1994
1995
1996
1997
1998
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2000
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2003
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2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
F50
55
60
65
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80
85
90
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100
Percent*
Expected to Rise on Increased Demand and Reduced Operational Capability
Global Potash Operating Rate
Historical Average (20 year)
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Source: Fertilizer Week, PotashCorp
Select Global Potash Spot PricesPrices Have Strengthened in All Spot Markets Since the End of 2013
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0%
2%
4%
6%
8%
10%
12%
Percentage Change: Jan 1 – Apr 17, 2014
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14250
300
350
400
450
500 Brazil CFR (US$/MT)US Midwest Del (US$/ST)SE Asia CFR (US$/MT)
US$
49.2%
PotashCorp Other Canpotex Members
Source: Company Reports, PotashCorp
Increasing Canpotex Entitlement in Second Half
PotashCorp’s Opportunity
Percentage of Canpotex Entitlement
>53%
PotashCorp Other Canpotex Members
First-half 2014 Second-half 2014 (Estimate)*
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Source: USDA, PotashCorp
Potash
Further Improvement Expected in Each Nutrient
Per-tonne Cost of Goods Sold
2012 2013 2014F0
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100
150
200US$ per tonne
Nitrogen
2012 2013 2014F0
50
100
150
200
250
300US$ per tonne
Phosphate
2012 2013 2014F0
50
100
150
200
250
300
350
400
450US$ per tonne
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2014 Guidance*
Second Quarter
• Earnings per share: $0.40-$0.45
Full Year
• Earnings per share: $1.50-$1.80
• Potash gross margin: $1.1-$1.3 billion
• Potash sales volumes: 8.3-8.7 million tonnes
• Nitrogen and phosphate gross margin: $1.0-$1.2 billion
Source: PotashCorp
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2014 Guidance*
Full Year
• Capital expenditures**: ~$1.1 billion
• Annual effective tax rate: 26-28 percent
• Provincial mining and other taxes: 16-18 percent of total potash gross margin
• Income from offshore investments***: $230-$240 million
• Selling and administrative expenses: $225-$235 million
• Finance costs: $165-$175 million
Source: PotashCorp
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