1. Mosaic Co. (MOS) Presented by: Akrati Johari, Phil Nguyen, Iordanis Thomaidis, Charles Gambino and Michael Bellisario Date: 18 th March, 2010

2. Agenda Industry Overview Financial Ratios Competitor Analysis Multiples Valuation Pro-forma Assumptions DCF and WACC Calculation Macroeconomic Analysis Recommendation

3. Industry Overview Agriculture chemicals industry 1 3 main competitors 2 Mosaic (phosphate) – $6.1B sales Potash (potash) – $3.7B sales Agrium (nitrogen) – $9.1B sales Consolidation CF Industries to acquire Terra, bidding war with Yara 1 from finance.yahoo.com 2 data from trailing twelve months

4. Company Overview Based in Plymouth, MN One of the three largest potash producers World’s largest phosphate producer 13% share of global production $10.3B in sales last fiscal year

5. Company Overview Fertilizer – primary macronutrients Phosphorous and potassium Improve/add nutrients to soil Increase crop yield “More from less” Most potash mines are deep shaft mines up to 3,300 feet underground

6. Business Segments Realignment 2Q2010 Combined Offshore segment with Phosphates segment “to more clearly reflect evolving business model” Phosphates (77% of sales) Produce concentrated phosphate crop nutrients and phosphate-based animal feed ingredients Potash (23% of sales) Produce potash-based crop nutrients, animal feed ingredients, and industrial products

7. Strengths High barriers to entry – capital intensive & claim on natural resources and mines 100 years of high-quality ore reserves 40% market share of North American production $2.7B in cash – expansion, additional capacity, acquisitions Products marketed in 40 countries

8. Weaknesses Cross-border risks associated with international operations Seasonality in business that results in needing significant amounts of inventory Cargill’s majority ownership and representation on the Board of Directors Sell a commodity product – difficult to differentiate

9. Threats Decline in oil and other commodity prices Competitors look to add capacity/expand into new markets Governmental policies (subsidies) affecting the agricultural industry

10. Opportunities 75 million more people in the world every year to feed Ethanol production expected to increase ~50% by 2015 Growing middle class in developing countries consuming more protein-rich diets People will always have to eat

11. DuPont Analysis ROE 2.11% -0.88% 2.57% 8.71% 7.16%

12. ROA Decomposition ROA = OIBI,AT / Sales x Sales / Av. Tot. Assets

13. Ratio Analysis – Recent Financial Position Ratios20082009 Average 2010 - 2015 Profitability EBIT Margin28.6%23.3%14.4% Liquidity Current Ratio2.23.33.9 Leverage Coverage31.055.439.4 Debt to Equity23.0%16.4%11.5% Payout Policy Dividend PayoutNA3.80%

14. Industry Competitors Potash Corp. of Saskatchewan Largest manufacturer of potash fertilizers Third largest producer of nitrogen Third largest producer of phosphate Revenue breakdown: 43% potash, 31% nitrogen, 26% phosphate Claim of production capacity greater than 50% of closest rival

15. Industry Competitors Agrium Second largest producer of nitrogenous fertilizers Third largest North American producer of potash and fifth largest for phosphate Attempted to purchase CF Industries

16. Industry Competitors Terra Industries Leading North American producer of nitrogen based products Accepted takeover bid by CF Industries for $4.7 billion

17. Fertilizer Industry Breakdown Data provided by

18. Relative Sector Performance Financial data provided by

19. Financial Comparison Company Comp Set Company NameMarket CapRevenueNet Income EPSEBITDA Margin % LTM Net Income Margin % LTM Mosaic Co. (NYSE:MOS) 28,401.36,135.9414.10.916.46.7 Potash Corp. (NYSE:POT) 37,092.33,657.6987.83.232.727.0 Agrium Inc. (TSX:AGU) 11,354.99,129.0366.02.38.34.0 CF Industries (NYSE:CF) 4,699.02,608.4365.67.432.114.0 Terra Industries (NYSE:TRA) 4,637.91,581.4152.61.523.59.7 Financial data provided by

20. Multiples Valuation Company 03/12/10 - Stock Price Market Cap (MM) Forward P/EPrice/Sales Price/ Book Trailing P/E Mosaic Co. (NYSE:MOS)63.8028401.3118.73x4.43x4.39x68.5x Agrium Inc. (TSX:AGU)72.1911354.9015.28x1.33x5.21x30.97x Potash Corp. of Saskatchewan, Inc. (NYSE:POT)125.2737092.3223.99x11.14x5.81x38.55x Terra Industries Inc. (NYSE:TRA)46.334637.9115.59x3.06x9.43x30.58x CF Industries Holdings, Inc. (NYSE:CF)96.734698.9514.24x1.47x2.72x13.02x

21. Multiples Valuation Stock Price CalculationForward P/EP/SP/BTrailing P/E Min37.9918.3475.79163.12 Mean48.8285.9680.11183.08 Max59.65153.5884.43203.04 21.67135.248.6439.92

22. In 2006 Management Claimed:  Sales volumes for Potash will improve due to a supply contract with a key customer in China. Result: Sales Volumes for next 3 years: 2007: 1478.9 2008: 2251.2 2009: 2817.2  The Phosphates business will show increased gross margins due to increased industry supply and demand fundamentals and our Phosphates restructuring actions Result: Gross Margins for next 3 years: 2007: 13.5% 2008: 36.5% 2009: 22.0%  Mosaic will begin restructuring the Phosphate segment Result: Mosaic combined the Nitrogen segment into their Phosphate segment in 2008 and the Offshore segment into their Phosphate segment in 2009 Management Assessment

23. Revenue Assumptions Revenues 200720082009201020112012 Phosphate3203.95706.25780.65730.8376561.628157564.70484 % of Total Revenue55.49%58.15%56.13%79.50%82.75%79.50% Potash1478.92251.22817.21712.04251645.362952307.47286 % of Total Revenue25.61%22.94%27.36%23.75%20.75%24.25% Nitrogen129.1N/A % of Total Revenue2.24%N/A Offshore1355.62223.82349.2N/A % of Total Revenue23.48%22.66%22.81%N/A Other(393.80)(368.60)(649.00)(234.28)(277.53)(356.83) % of Total Revenue-6.82%-3.76%-6.30%-3.25%-3.50%-3.75% Total Revenues5773.709812.6010298.007208.67929.469515.352 Revenue Growth8.82%69.95%4.95%-30.00%10.00%20.00%

24. Revenue Assumptions-Potash Summarized from 10K:  By the start of the 3 rd quarter in 2010, Potash demand improving but still below historical levels.  Potash segment still operating at reduced production volumes.  Despite the improved demand however, Potash selling prices in 3 rd quarter will be below 2 nd quarter levels

25. Revenue Assumptions-Potash  Recovery in Potash segment reflects recovery of selling prices and worldwide demand. Higher % of revenues is a result of management's plan: “We continued the expansion of capacity in our Potash segment, in line with our views of the long-term fundamentals of that business. The planned expansions are expected to increase our annual capacity for finished product over the next eleven years”

26. Revenue Assumptions- Phosphate  Mosaic’s results for the second quarter of fiscal 2010 compared to the prior year period reflected a recovery in Phosphates segment volumes and significant declines in phosphate selling prices.  Although the Phosphates segment’s prices stabilized in the first quarter of fiscal 2010, they have not returned to the historical highs of the prior year period that resulted from strong demand for crop nutrients.

27. Revenue Assumptions- Offshore  In 2010 Mosaic has again realigned their business segments and moved from three total segments to two by merging the Offshore segment into the Phosphate segment

28. Other Assumptions  COGS: Increase sharply in 2009 due to higher fixed costs as a result of decreased production. After production increases, COGS will start returning to historical levels.  SGA: Sharp increase in 2009 due to same reasons as COGS. 20052006200720082009201020112012201320142015 Cost Of Goods Sold3840.904668.404847.606652.107531.306163.356660.757707.448268.849509.1710797.12 % of Total Revenue87.36%87.99%83.96%67.79%73.13%85.50%84.00%81.00%79.00% 78.00% SG&A207.00241.30309.80323.80321.40346.01380.61428.19471.01565.74622.91 % of Total Revenue4.71%4.55%5.37%3.30%3.12%4.80% 4.50% 4.70%4.50%

29. WACC Calculation CAPM Beta1.48 Risk-free3.70% Equity Premium5.00% CAPM11.11% Return on Equity Investment ROE59.48% S&P5001.93% Cost of Equity:

30. WACC Calculation As of May 31, 2009Rate% of DebtWeighted Average Term Loans3.92%1.01%0.04% Industrial Revenue Bonds6.64%3.18%0.21% Other Secured Notes7.32%1.37%0.10% Unsecured Notes7.46%71.62%5.34% Unsecured Debentures7.15%19.72%1.41% Capital Leases and Other6.94%3.11%0.22% Cost of Debt 7.32% Cost of Debt:

31. WACC Calculation Weight of equity91.79% Weight of debt8.21% Tax rate21.60% RateWt CAPM WACC10.67%90% ROE WACC55.07%10% Goal Post WACC15.11% DCF Valuation PV of FCF13,519.27 Less: Debt2,540.40 Equity Value10,978.87 # of shares444.54 Intrinsic Value$29.20 Value +/-10%$26.28$32.12

32. Triangulation PriceWeight Forward P/E48.8230% Price/Sales85.9620% Price/Book80.1130% Trailing P/E183.080% DCF29.2020% $57.51

33. Football Chart

34. Macroeconomic Review  Gross Domestic Product  GDP of countries that MOS exports its goods  Sensitive to fluctuation in prices of raw materials → Adversely affect Sales  Inputs = Natural Gas, Phosphate rock, Ammonia, Sulfur  Outputs = Phosphate, Potash, Nitrogen  Strong International Presence  70% of net sales from customers located outside the US.  Brazil – Argentina – Chile – China - India

35. Macroeconomic Review  Regulations + Transportation costs  Further restriction on greenhouse gas emissions → increase operating costs.  Cost of delivery → adversely affect sales volume and prices  Currency Risk  Most significant impact from CAD and BRL → Periodically hedge against exposure to foreign currency risk

36. Raw Material and Products 200820092010201120152020 DAP, $/mt 967323300310360400 Potash, $/mt 570630400300255220 Projected Prices 2010 - 2020 Source : World Bank ( www.worldbank.org)

37. Fertilizer Consumption Source : Potash Corp.com

38. Gross Domestic Product Source : Bloomberg

39. GDP vs Sales Growth Source : Bloomberg

40. Oil Prices lead to rising fertilizer prices Source : FAO State of Commodities markets

41. Oil Prices – Mosaic’s Stock Price : Highly Correlated Source : U.S. Energy Information Administration

42. Forecasted Crude Oil Prices Source : Source : U.S. Energy Information Administration

43. Portfolio Correlation MOS American Eagle-0.2104 Diamond Offshore0.8553 Jack Henry0.4721 McDonalds0.6805 Walgreens-0.4337 MEMC Electronics0.4998

44. Recommendation We currently own 200 shares bought at $55 on 12/18/2009 DCF Intrinsic Value = $29.20 Triangulated Value = $57.51 Current Stock Price @ 3/17 = $61.91 Hedge against inflation Growth in emerging markets such as India and Brazil will drive sales growth => We recommend a HOLD for the 200 shares