Business Context and Reporting Period
This Form 8-K, filed on May 4, 2010, by The Mosaic Company (Mosaic), addresses a "Segment Realignment" announced on November 30, 2009. The filing provides revised historical financial data and key statistics for the fiscal quarter ended August 31, 2007, to reflect the new segment structure (Phosphates and Potash) and eliminate the former "Offshore" segment. The report is furnished in accordance with General Instruction B.2 and is not deemed "filed" for Section 18 liability purposes.
Key Financial Metrics (Revised for Q3 2007)
The following metrics represent the revised figures for the three months ended August 31, 2007, adjusted for the segment realignment (dollars in millions unless noted):
| Metric | Phosphates | Potash | Corporate/Other | Total |
|---|---|---|---|---|
| Net Sales | $1,587.6 | $411.8 | $3.9 | $2,003.3 |
| Gross Margin | $402.0 | $126.6 | $(6.8) | $521.8 |
| Operating Earnings | $339.3 | $110.2 | $0.1 | $449.6 |
| Depreciation, Depletion & Amortization | $51.2 | $28.7 | $2.3 | $82.2 |
Key Operational Statistics (Q3 2007 Revised):
- Phosphates Sales Volume: 3,449,000 tonnes (includes 908,000 tonnes of Crop Nutrient Blends and 222,000 tonnes of Feed Phosphates).
- Potash Sales Volume: 2,084,000 tonnes.
- Production Volumes (North America): 2,045,000 tonnes (Phosphates); 1,856,000 tonnes (Potash).
- Average Selling Prices: DAP ($408/tonne), Blends ($354/tonne), MOP ($162/tonne), K-Mag ($120/tonne).
- Raw Material Costs: Ammonia ($326/tonne), Sulfur ($77/long ton).
Material Changes Versus Prior Reporting
The primary material change is the reclassification of historical data to align with the new segment structure. Previously reported figures for Q3 2007 included an "Offshore" segment which has been eliminated. Key adjustments include:
- Phosphates Segment: Net sales increased from $1,182.5 million (previously reported) to $1,587.6 million (revised) due to the inclusion of PhosChem sales ($113 million) and the reclassification of Offshore sales.
- Offshore Segment: Previously reported sales of $497.5 million and operating earnings of $30.1 million have been removed and reallocated.
- Corporate/Other: Operating earnings improved from a loss of $(0.9) million to a profit of $0.1 million after adjustments.
- Volume Adjustments: Phosphates sales volumes were revised upward from 2,243,000 tonnes to 3,449,000 tonnes to include blends and other previously excluded categories.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, outlook, or management commentary regarding future performance. It is strictly a retrospective adjustment of historical data. The filing notes that the realignment was undertaken to more clearly reflect the Company's evolving business model. No specific risks or contingencies are detailed in this document beyond the standard disclaimer that the information is furnished and not "filed" for Section 18 liability purposes.
Investor Verification Checklist
- Verify the impact of the segment realignment on year-over-year comparisons for the fiscal quarters ended August 31, 2007, through August 31, 2009.
- Confirm the inclusion of PhosChem sales and costs within the revised Phosphates segment figures.
- Review the 10-K for the fiscal year ended May 31, 2009, and the 10-Q for the nine months ended February 28, 2010, for context on the current business model.
- Check the December 21, 2009, Form 8-K for the initial announcement of the realignment and the methodology used for the adjustments.