THE MOSAIC COMPANY (NYSE:MOS)NOVEMBER 7, 2013Dan Ballantine, Zige He, and Zuowei Xu

Agenda

Introduction Macroeconomic Outlook Industry Overview Company Overview Financial Analysis Valuation Recommendation

The Mosaic Company (NYSE: MOS)

Largest combined potash and phosphates producer

Engages in the mining, production, and distribution of crop nutrients

Formed through the combination of IMC Global and Cargill’s crop nutrient segment in 2004

Sector: Basic Materials Industry: Agricultural Chemical

Source: Mosaic Company Website

Current Holding Information

December 17, 2009: Purchased 200 shares at $55.00/share ($11,000 total investment)

November 6, 2013 Price: $ 46.35 Unrealized loss: 15.73% ($1,730) Total Position Value:$9,270

Represents 5.03% of total portfolio value

Source: Yahoo Finance

Macroeconomic Outlook

Population

Crop Fertilizer

Expected global population increases will lead to steady demand for fertilizers over the long-term

Additional pressure for existing farmland to become more productive

Macroeconomic Outlook

Source: USDA, Mosaic, IHS Global Insight

Expected global population increases combined with increased use of agricultural inputs

Agricultural Chemical Industry

Agricultural Chemical Industry

USDA: Price of potash and phosphates decreasing since the high prices in 2011

Retail Price of Potash:$400/ton, down 20% since last year

Source: USDA, InfoMine

Industry Forces Analysis

Industry Forces Analysis

Bargaining Power of Suppliers: MEDIUM Large fertilizer companies have long-term

contract with suppliers Bargaining Power of Buyers: HIGH

Commodity products with little differentiation and control over pricing

Threat of New Entrants: LOW The 10 biggest companies cover more than

80% percent market share Economies of scale

Industry Forces Analysis

Threat of Substitutes: LOW No substitute for potash Lack of cost-effective substitutes

Rivalry among Competitors: HIGH Very competitive Dominated by large companies looking to

increase market share

Industry Performance Analysis

Source: Google Finance

Industry index underperformed the S&P 500 in 2013

Company Overview

Leading producer and marketer of concentrated phosphate and potash crop nutrients and animal feed ingredients

Serves customers in approximately 40 countries

8,400 employees Phosphate Products: crop nutrients DAP

and MAP, animal feed Potash Products: red MOP, white MOP

(salts of potassium)

Source: Mosaic FY 2013 10-K

Company Overview

Financial Performance

Source: Mosaic FY 2013 Annual Report

Company Overview

Product Segments: Potash: 13% of estimated global potash production; 42%

of estimated North American potash production Phosphate: 12% of estimated global production; 59% of

estimated North American production of concentrated phosphate crop nutrients

Source: Mosaic FY 2013 10-K

Company Overview

Potash Segment Three potash mines in Canada; two potash

mines in the United States Production: 7.8 million tonnes

Expansion plan

Source: Mosaic FY 2013 10-K

Company Overview

Phosphate Segment Owns and operates mines and production

facilities in Florida; processing plants in Louisiana

Production: 8.2 million tonnes Low cost strategy

Economic scale Vertical integration

Innovation: Premium Product MicroEssentials® (“ME”)

Sales increased approximately 28%

Source: Mosaic FY 2013 10-K

Company Overview

Distribution Potash Segment:

Domestic and international sales Canpotex, Limited

Phosphate Segment: Phosphate Chemicals Export Association, Inc

Source: Mosaic FY 2013 10-K

Business Risk Analysis

Changing economic conditions and

government policiesGlobal Competition

Variations in crop nutrient

application rates

Significant levels of inventories

Weather Conditions

Source: Mosaic FY 2013 10-K

SWOT Analysis

Strengths Weaknesses- Minimal long-term debt- Strong cash position- Diversified international

sales- Expanding production

capacity

- Decreasing sales volume- Declining margins- Multiple recent strategic

changes

Opportunities Threats- Lower raw material costs- International market

access - Positive macroeconomic

outlook with growing population

- Commodity pricing- Government policies- Increased competition- External demand factors

Cargill & Mosaic Relationship

October 2004: Originally created from Cargill’s crop nutrient business division

January 2011: Cargill family trust plans to liquidate its entire stake (64%) Could have been a sign the company was

overvalued at the time (trading around $80/share)

June 2013: stock buyback request blocked by Cargill trust holders Still hold 129 million shares of Mosaic common

stock

Source: New York Times, Bloomberg

Recent News

MOS Reports Earnings: November 5, 2013 Difficulties due to lower phosphates and potash

prices Diluted EPS of $0.29/share versus $0.98 last year

MOS Announces Acquisition: October 28, 2013 Acquiring phosphates business from CF Industries $1.4 billion for Florida-based phosphate assets

Uralkali Cartel Fallout: Late July 2013 Breakup of a pricing cartel, potash prices

plummet Uralkali plans to pursue higher volume strategy

Source: Mosaic Investor Relations, Bloomberg

Management Outlook

Concerned about short-term potash and phosphate prices, but considers price decreases a cyclical issue

Believes industry will return to normal and continue to grow

Recent strategic change: Shift from potash expansion to phosphates

expansion Looking to expand North America potash operations

Concerns about demand in emerging markets in the next year

Source: Mosaic Calendar Year 2013 Q3 Earnings Press Release

Recent Financial Information

Source: Mosaic 2013 FY 10-K, FY 2010 10-K, CY 2013 Q3 10-Q

NOTE: Mosaic is changing its year-end from May 31 to December 31* FY refers to year ended May 31* Q3 2013 reports Q3 of Calendar 2013, meaning the quarter ending September 30, 2013

Recent Financial Information

Source: Mosaic FY 2013 10-K, FY 2010 10-K, Q3 CY 2013 10-Q

NOTE: Mosaic is changing its year-end from May 31 to December 31* FY refers to year ended May 31* Q3 2013 reports Q3 of Calendar 2013, meaning the quarter ending September 30, 2013

Current Stock Information

Source: Capital IQ, Yahoo Finance

Metric Value

Current Stock Price $46.35

Trailing P/E10.49

Forward P/E 18.11

Dividend Yield 2.16%

Market Cap($ millions)

$19,735.8

Financial Analysis

2009 2010 2011 2012 2013Current Ratio 3.27 3.82 3.47 3.43 3.90 Quick Ratio 2.04 2.41 2.51 2.38 2.67 Cash Ratio 1.67 1.93 2.03 1.99 2.09

2009 2010 2011 2012 2013Gross Profit Margin 26.87% 25.05% 31.41% 27.77% 27.67%Operating Profit Margin 23.31% 18.80% 26.81% 23.51% 22.15%Net Margin 21.91% 12.46% 25.34% 17.26% 18.78%ROA 18.42% 6.64% 17.68% 11.81% 10.77%ROE (Book Value) 29.60% 9.76% 24.68% 16.21% 14.73%EBIT/Tangible Assets 32.99% 16.11% 28.08% 25.34% 18.80%EBIT/EV 13.95% 8.12% 10.09% 12.69% 10.95%

2009 2010 2011 2012 2013Debt/Assets 0.10 0.10 0.05 0.06 0.06 Debt/Equity 0.15 0.14 0.07 0.08 0.08 Interest Coverage 55.45 25.42 522.39 N/A N/A

Liquidity Ratios

Profitability Ratios

Solvency Ratios

NOTE: The years above refer to the fiscal years ending on May 31

Financial Analysis

2009 2010 2011 2012 2013A/R Turnover 12.58 11.15 12.90 13.24 11.29 Days Sales Outstanding 29.01 32.74 28.30 27.56 32.34 Inventory Turnover 6.08 4.76 6.01 6.41 5.16 Days Inventory on Hand 60.02 76.67 60.74 56.96 70.71 A/P Turnover 10.41 10.56 9.02 8.66 8.61 Days Payables Outstanding 35.05 34.56 40.45 42.16 42.39 Fixed Asset Turnover 2.16 1.30 1.64 1.57 1.24 Total Asset Turnover 0.84 0.53 0.70 0.68 0.57

2009 2010 2011 2012 2013Tax Burden 77.65% 70.81% 76.99% 72.94% 84.60%Interest Burden 121.03% 93.63% 122.79% 100.68% 100.22%Operating Profit Margin 23.31% 18.80% 26.81% 23.51% 22.15%Asset Turnover 0.87 0.53 0.78 0.70 0.60 Leverage 1.76 1.49 1.45 1.35 1.39 ROE 33.52% 9.89% 28.79% 16.44% 15.61%

Activity Ratios

DuPont Analysis

NOTE: The years above refer to the fiscal years ending on May 31

Comparable Companies

Source: Capital IQ

Company Ticker Market Cap ($ millions)

Agrium Inc. (TSX:AGU) $12,795.1

CF Industries Holdings, Inc. (NYSE:CF) $12,127.0

Israel Chemicals Ltd. (TASE:ICL) $10,855.3

K+S Aktiengesellschaft (DB:SDF) $5,196.5

Potash Corp. of Saskatchewan, Inc.

(TSX:POT) $27,840.4

The Mosaic Company (NYSE:MOS) $19,735.8

Stock Performance

Source: Yahoo Finance

Comparable Company Analysis

Source: Capital IQ

Target Company Ticker SymbolPrice/Book Value

Forward TEV/Sales

Forward TEV/EBITDA Forward P/E

The Mosaic Company NYSE:MOS 1.70x 2.07x 8.36x 18.11

Comparable CompaniesAgrium Inc. TSX:AGU 2.93x 0.96x 7.19x 10.91 CF Industries Holdings, Inc. NYSE:CF 3.99x 2.71x 5.96x 11.35 Israel Chemicals Ltd. TASE:ICL 3.77x 2.04x 7.99x 12.73 K+S Aktiengesellschaft DB:SDF 1.58x 1.04x 4.28x 16.07 Potash Corp. of Saskatchewan, Inc. TSX:POT 2.84x 4.72x 10.11x 16.89

Comparable StatisticsHigh 3.99x 4.72x 10.11x 16.89 Median 2.93x 2.04x 7.19x 12.73 Low 1.58x 0.96x 4.28x 10.91 Mean 3.02x 2.29x 7.11x 13.59

Comparable Company Analysis

Source: Capital IQ

Multiple Low Median High MeanPrice/Book Value 43.11$ 79.61$ 108.45$ 82.23$ Forward TEV/Sales 16.32$ 37.21$ 89.29$ 42.17$ Forward TEV/EBITDA 18.24$ 32.25$ 46.30$ 31.85$ Forward P/E 27.93$ 32.59$ 43.24$ 34.79$

Implied MOS Share Price

Multiple Weight Implied MOS Stock Price

Price/Book Value 10% 82.23$ Forward TEV/Sales 30% 42.17$ Forward TEV/EBITDA 30% 31.85$ Forward P/E 30% 34.79$

MOS Implied Stock Price 40.87$

Discount Rate

Source: Yahoo Finance

CAPM

Risk-Free Rate 2.62%Market Risk Premium 8.00%5-Year Beta 0.34

CAPM Cost of Equity 5.30%

Year Actual1 84.99%2 24.64%3 -21.68%4 4.12%5 -14.02%

Total Realized Return 61.64%

Arithmetic Annual Return 15.61%Geometric Annual Return 10.08%

Annual Realized Returns

Discount Rate

Share Price 46.35$ Shares Outstanding (millions) 425.82 Market Value of Equity 19,736.76$

Debt $1,010.50

Percent Equity Weight 95.13%Percent Debt Weight 4.87%

Cost of Debt 4.95%Cost of Equity

CAPM Cost of Equity 5.30% 35.00%MOS Realized Return 15.61% 65.00%

Cost of Equity 12.00%

Tax Rate 28.0%

WACC 11.59%

Weighted Average Cost of Capital

Cost of Equity Weightings

DCF Analysis

2014E 2015E 2016E 2017E 2018E Terminal ValueNet Income 679 959 1,213 1,515 1,875 Depreciation 679 909 944 967 988 Capital Expenditures (1,500) (1,300) (1,200) (1,200) (1,100) Changes in Net Working Capital

Less Increases in A/R 274 (176) (23) (23) 4 Less Increases in Inventories 741 (270) (185) (172) (200) Plus Increases in A/P (192) 201 145 156 159

Free Cash Flow 682 324 895 1,243 1,726 20,699 Present Value 611 260 644 802 998 11,962

Discount Rate 11.59%

Calculation of Implied Share Price Terminal ValueImplied Enterprise Value 15,277$ Terminal Growth Rate 3.00%Less Debt (1,011)$ Implied Market Cap 14,267$

Implied Share Price 33.50$

The Mosaic Company Discounted Cash Flow Analysis ($ millions)

Decision Drivers

Strengths Strong balance sheet Growing dividend yield Macroeconomic outlook Vertical integration

Concerns Uncertainty over industry outlook in near future Recent strategic changes Significant uncertainties on product pricing Overly optimistic management outlook on

industry and expansion plans

Recommendation

Valuation Summary Current Stock Price: $46.35 Comparable Companies Valuation: $40.87 DCF Valuation: $33.50

Recommendation: SELL Sell current holding of 200 shares at

current market price resulting in a realized loss of approximately 15.73%

Questions?