Q4 2013
Conference
Call
January 30, 2014

PotashCorp.com
Forward-looking Statements
This presentation contains forward-looking statements or forward-looking information (forward-l...
Fourth-Quarter 2013 Highlights
• Earnings of $0.26 per share1; trailed the $0.48 per share earned in 2012

• Severance-rel...
Full-Year 2013 Highlights
• Earnings of $2.04 per share1; trailing the $2.37 per share earned in 2012

• Cash provided by ...
Quarterly Gross Margin Comparison
Gross Margin Decrease Due to Lower Prices Across All Nutrients

US$ Millions

Quarter Hi...
Annual Gross Margin Comparison
Gross Margin Decrease Due to Lower Prices Across All Nutrients

US$ Millions

Potash Highli...
World Potash Demand
Potential for Record or Near-record Shipments
Estimated KCl Shipments by Market* (million tonnes)

Mar...
Global Potash Operating Rate
Expected to Rise on Increased Demand and Reduced Operational Capability

Percent*
100
95
90
8...
PotashCorp’s Opportunity
CAPEX Spending Largely Complete
PotashCorp Potash Projects
Estimated Capital Spending*

PotashCor...
2014 Guidance*
First Quarter

• Earnings per share: $0.30-$0.35
Full Year
• Earnings per share: $1.40-$1.80

• Potash gros...
2014 Guidance*
Full Year

• Capital expenditures**: ~$1.1 billion
• Annual effective tax rate: 26-28 percent
• Provincial ...
Thank you
There’s more online:
PotashCorp.com
Visit us online

Facebook.com/PotashCorp
Find us on Facebook

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PotashCorp - 2013 Q4 & Year-End Earnings

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PotashCorp - 2013 Q4 & Year-End Earnings

  1. 1. Q4 2013 Conference Call January 30, 2014 PotashCorp.com
  2. 2. Forward-looking Statements This presentation contains forward-looking statements or forward-looking information (forward-looking statements). These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events to differ materially from those expressed in the forward-looking statements, including, but not limited to the following: risk and uncertainties related to operating and workforce changes made in response to our industry and the markets we serve; variations from our assumptions with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and effective tax rates; fluctuations in supply and demand in the fertilizer, sulfur, transportation and petrochemical markets; costs and availability of transportation and distribution for our raw materials and products, including railcars and ocean freight; changes in competitive pressures, including pricing pressures; adverse or uncertain economic conditions and changes in credit and financial markets; the results of sales contract negotiations within major markets; economic and political uncertainty around the world; timing and impact of capital expenditures; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; changes in currency and exchange rates; unexpected geological or environmental conditions, including water inflows; imprecision in reserve estimates; adverse developments in new and pending legal proceedings or government investigations; acquisitions we may undertake; strikes or other forms of work stoppage or slowdowns; rates of return on and the risks associated with our investments; changes in, and the effects of, government policies and regulations; security risks related to our information technology systems; and earnings and the decisions of taxing authorities, which could affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December 31, 2012 under the captions “ForwardLooking Statements” and “Item 1A – Risk Factors” and in our other filings with the US Securities and Exchange Commission and the Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this release and the company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Slide#2
  3. 3. Fourth-Quarter 2013 Highlights • Earnings of $0.26 per share1; trailed the $0.48 per share earned in 2012 • Severance-related costs of $60 million related to workforce reduction • Cash provided by operating activities of $656 million • Repurchased 7.8 million common shares at an average cost of $31.86 per share • Market value of investments $5.2 billion, or $6 per PotashCorp share2 1 All references to per-share amounts pertain to diluted net income per share 2 As of market close on January 29, 2014 Slide#3 Source: PotashCorp
  4. 4. Full-Year 2013 Highlights • Earnings of $2.04 per share1; trailing the $2.37 per share earned in 2012 • Cash provided by operating activities of $3.2 billion, third highest in history • Gross margin of $2.8 billion; below the $3.4 billion generated last year • Repurchased 14.1 million common shares at an average cost of $31.46 per share • Potash expansion spending approximately 93 percent complete • Increased dividend by 67 percent compared to prior year 1 All references to per-share amounts pertain to diluted net income per share Slide#4 Source: PotashCorp
  5. 5. Quarterly Gross Margin Comparison Gross Margin Decrease Due to Lower Prices Across All Nutrients US$ Millions Quarter Highlights: 700 600 $586 • Severance-related charges of $60 million impacted all three nutrients, most significantly potash ($32 million) and phosphate ($17 million) -$53 -$18 500 -$55 $460 Potash Highlights: • Improved potash demand – particularly in North America from comparatively low period in 2012; demand in contract markets relatively subdued 400 300 200 • Average realized prices continued to decline due to increased competitive pressure in all key markets 100 Nitrogen Highlights: • Increased sales volumes more than offset by decline in average realized prices for all products 0 Q4 2012 GM Potash Nitrogen Phosphate Q4 2013 GM Phosphate Highlights: • Increased sales volumes more than offset by lower average realized prices for fertilizer products Slide#5 Source: PotashCorp
  6. 6. Annual Gross Margin Comparison Gross Margin Decrease Due to Lower Prices Across All Nutrients US$ Millions Potash Highlights: 4,000 3,500 $3,410 • Increased demand despite market uncertainty in the second half -$390 -$65 3,000 -$165 $2,790 • Lower average realized prices due to competitive pressures in all key markets 2,500 Nitrogen Highlights: 2,000 • Increased sales volumes more than offset by decline in average realized prices, particularly urea 1,500 Phosphate Highlights: 1,000 • Lower average realized prices for fertilizer products impacted margins 500 0 2012 GM Potash Nitrogen Phosphate 2013 GM Slide#6 Source: PotashCorp
  7. 7. World Potash Demand Potential for Record or Near-record Shipments Estimated KCl Shipments by Market* (million tonnes) Market China India Other Asia Latin America North America 2013 11.0 3.1 7.8 10.1 8.7 2014F Factors to Watch 11.3 - 11.7 Strong first-half 2014 commitments in place likely to limit second-half import requirements. Shipment levels at the upper end of range will require consumption growth and/or appetite to restock inventories. 3.7 - 4.2 Growth expected due to low inventory levels coming into 2014 and a minor improvement in consumption. Potential for stronger imports but largely contingent on changes to fertilizer subsidies. 8.0 - 8.3 Demand expected to be robust; supportive prices for palm oil and other key crops. Consumption growth has been relatively steady despite uneven buying patterns. 10.3 - 10.6 Demand expected to be robust with supportive returns for growers; potential deterioration in crop economics – in particular for soybeans – could impact fertilizer consumption and import needs. 9.0 - 9.5 Other 12.5 ~12.7 Total 53.2 Strong engagement in preparation for spring season. Expect full-year demand will move higher, more inline with historical average levels. Potential for upside to demand expectation, particularly with improved consumption in Western Europe and additional growth in FSU and central Europe. 55.0-57.0 * Forecast per PotashCorp Source: Fertecon, CRU, Industry Publications, PotashCorp Slide#7
  8. 8. Global Potash Operating Rate Expected to Rise on Increased Demand and Reduced Operational Capability Percent* 100 95 90 85 Historical Average (20 year) 80 75 70 65 60 55 50 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014F * Based on percentage of operational capability (estimated annual achievable production level). 2014F based on mid-point of PotashCorp’s demand forecast range of 55-57 MMT. Slide#8 Source: Fertecon, CRU, PotashCorp
  9. 9. PotashCorp’s Opportunity CAPEX Spending Largely Complete PotashCorp Potash Projects Estimated Capital Spending* PotashCorp Total Capital Spending** US$ Billions 2.5 7% 2.0 1.5 1.0 0.5 93% 0.0 Completed Remaining 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E * As at December 31, 2013. Includes both debottleneck and expansion spending. ** Cash additions to property, plant and equipment per cash flow statement (2006-2013) Slide#9 Source: PotashCorp
  10. 10. 2014 Guidance* First Quarter • Earnings per share: $0.30-$0.35 Full Year • Earnings per share: $1.40-$1.80 • Potash gross margin: $1.0-$1.3 billion • Potash shipments: 8.2-8.6 million tonnes • Phosphate and nitrogen gross margin: $1.0-$1.2 billion * Guidance as at January 30, 2014 Slide#10 Source: PotashCorp
  11. 11. 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***: $160-$180 million • Selling and administrative expenses: $225-$235 million • Finance costs: $165-$175 million * Guidance as at January 30, 2014 ** Does not include capitalized interest *** Includes share of earnings in equity-accounted investees and dividend income from available-for-sale investments Source: PotashCorp Slide#11
  12. 12. Thank you There’s more online: PotashCorp.com Visit us online Facebook.com/PotashCorp Find us on Facebook Twitter.com/PotashCorp Follow us on Twitter

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