|Cost of Goods Sold||8,022.8||6,816.0||5,065.8|
|Selling, general and administrative expenses||410.1||372.5||360.3|
|Less: Unrealized (gain) loss on derivatives||41.9||(13.0)||(71.3)|
|Less: Depreciation, depletion and amortization||508.1||447.4||445.0|
|Less: Wages and benefits||843.1||772.3||494.1|
|Wages and Benefits:||843.1||772.3||494.1|
|Payments to Providers of Funds|
|Interest paid (net of amount capitalized)||$21.0||$43.1||$60.0|
|Total Payments to Providers of Funds||140.5||132.4||728.0|
|Tax (Payment to Government):|
|Taxes Paid (Refunds Received)|
|Total Income Taxes Paid||516.4||535.2||488.5|
|Canadian Resource Taxes and Royalties Expense||$327.1||$294.2||$127.9|
|Notes: Mosaic Cost of Goods Sold and Selling, General and Administrative expenses from the 10-K Report include wages and benefits. For the GRI report, wages and benefits are requested separately, so they are excluded here and added back in as a separate line item directly below.|
Mosaic's fiscal 2012 community investments increased 103% versus the prior year. It is our goal to invest 1% of earnings before interest and taxes over a three-year rolling average into our communities.
The Mosaic Company, The Mosaic Company Foundation and The Mosaic Institute in Brazil make investments in our global communities through philanthropic funding, employee engagement and in-kind product donations. Combined contributions in fiscal 2012 reached $23.6 million.
Mosaic's global giving is tied to three focus areas:
The graph above reflects investments made in communities where targeted beneficiaries are external to the company. This may include contributions to research institutes unrelated to Mosaic's research and development activities, funds to support community infrastructure and other philanthropic efforts. We are currently improving our processes to allow us to more accurately capture and report this information in the coming years.
The potential financial implications with regard to the physical changes associated with climate change, as well as potential regulatory response changes, are discussed in Mosaic's CDP public response and in Mosaic's 10-K Report (pages 38-39). We evaluate whether, and to what extent, environmental issues and associated regulations could adversely impact our costs and operating activities, as well as the supply, demand, cost and location of grain production. This evaluation is part of a broader strategic business plan designed to help Mosaic meet or exceed production and profitability requirements. Other aspects of this plan include strategies for lowering purchased energy consumption through more efficient processes and maximizing the use of energy generated through the fertilizer manufacturing process.
Changes in temperature and precipitation, drought, floods, increased storm and hurricane activity, and a higher incidence of plant disease can affect agricultural production and the demand for fertilizer products. Rising sea levels could be potentially disruptive to key ports within Mosaic's transportation infrastructure. Mosaic has plans at all its facilities to deal with extreme weather events, including our coastal communities and port facilities with respect to storm surge.
While there is uncertainty with regard to what final material regulatory provisions and targets applicable to Mosaic will be adopted in reducing greenhouse gases in the United States and Canada, the commitment by federal, province-based (Canada) and state-based (U.S.) regulatory bodies is in motion. These regulations could potentially seek to restrict our operating activities, require us to make changes in our operating activities (which could increase operating costs) reduce our efficiency or limit our output, require us to make capital improvements to our facilities, or increase costs for energy, raw materials and transportation. Any of these costs could be material to Mosaic. In order to manage the potential risks from changing regulations, Mosaic is taking a proactive approach with particular emphasis on improving energy efficiency and waste management. These initiatives will assist Mosaic in emission reduction.
With the world's population expected to reach nine billion by 2050, the global food security challenge looms large — and agriculture has taken center stage. To sustainably meet the world's ever-increasing need for food, the global agriculture industry must simultaneously increase crop yields and reduce negative environmental impacts. The crop nutrition industry is an important part of this equation.
The efficient use of fertilizers has the potential to significantly reduce global greenhouse gas emissions while contributing to higher yields per acre. Proportionally, the accrued benefit of fertilizer use substantially outweighs the emissions associated with fertilizer production. Emissions associated with crop nutrient production account for 0.8 to 3.2 percent of global greenhouse gas emissions and total greenhouse gas impacts associated with agriculture and land use change (including deforestation) are estimated at 17 to 32 percent of global emissions.
Please refer to Mosaic's 10-K Report (page F18).
In FY2011, Mosaic did not receive significant government financial assistance, except for approximately $3.6 million in Canada related to investment, research and development or other grants. FY2012 amounts were not yet available at the time of reporting.
Mosaic offers different combinations of compensation elements to employees based on their role and responsibility within the organization. Benefits may vary by country and legal requirements. We offer competitive compensation and benefits in each of the company's significant locations of operation. As noted in local currency, the standard entry-level wage range is significantly higher than the prevailing local minimum wage.
|Comparing Mosaic's Entry Level Wage to Local Minimum Wage|
|Minimum Wage Law||Mosaic Employee Minimum Salary||Percentage Above Minimum Wage|
|7.25 - 7.67||12.50 - 24.04||72%|
|9.50||17.00 - 27.88||79%|
|14.38||41.72 - 43.13||190%|
|3.89 - 6.53||4.35 - 9.52||12%|
|1093||2671.91 - 5141.78||144%|
|7.21 - 16.17||11.6 - 22.34||61%|
|23.25 - 39.26||84.23 - 174.23||262%|
|Local Supply Chain|
|All Phosphate (U.S. only) *||72.8%|
|All Potash (Canada and U.S.) *||66.7%|
|Offshore - Quebracho, Argentina **||84.4%|
|Offshore - Fospar, Brazil **||95.9%|
|Offshore - Cubato, Brazil||54.8%|
|Notes: (*) Excludes Governmental, Raw Materials, Clubs and Organizations, Employee Related and Freight spend, and includes as locals in the Phosphate business unit all vendors with addresses in Louisiana and Florida and in the Potash business unit all vendors with addresses in New Mexico, Michigan, Saskatchewan and Manitoba.
(**) Argentinean and Brazilian figures are based on all spend and considers as local vendors all of those whose addresses are within these countries. The Cubato (Brazil) facility was sold in February 2011.
Mosaic does not have a written policy for preferring locally based suppliers, but we do encourage and support spend with local suppliers.
Mosaic does not currently have a policy that requires local hiring. Mosaic's first priority is to find the talent required to operate our business at expected levels. If the top candidate requires relocation assistance, that is considered one of the costs of doing business. As a matter of practice, staff positions are often filled from the local workforce.
In FY2012, The Mosaic Company Foundation donated $200,000 toward famine relief in Somalia, Africa.
Mosaic has committed to preserving approximately 130 acres of land otherwise eligible to be mined by donating Peaceful Horse Ranch in DeSoto County, Florida for permanent conservation. Peaceful Horse Ranch is on the State of Florida's list of priority projects for its Florida Forever land conservation program. Mosaic will also provide up to $2 million for startup and recurring expenses to operate Peaceful Horse Ranch as a state park.
Mosaic is supporting a $250,000 grant for Electron Microscope at St. Paul's Hospital in Saskatoon which will support kidney care with the purchase of the first and only digital Transmission Electron Microscope (EM) in the province.
Mosaic agreed to donate $1 million to the Regina, Saskatchewan, Habitat for Humanity to build 68 new homes over a three-year period. Mosaic employees will be encouraged to participate in the building of the homes in their local communities.
Mosaic made a grant to Ducks Unlimited of $2 million over a 10-year period that will restore a minimum of 500 acres of wetlands in Saskatchewan.
Through the use of fertilizer and the construction of an irrigation infrastructure, Mosaic is working to create a model for sustainable agricultural practices in villages in India called "Krishi Jyoti" in partnership with the Institute for Rural Research and Development (IRRAD). Our current investment is over $130,000 and is supported by in-house management, contract help in each village and Mosaic sales managers. Farmers are enjoying better yields, higher crop quality and a sharp increase in understanding best farm practices. Additionally, the project has expanded and reached 11 villages, with two of those graduating from the program. This program also invested in the construction of a large check dam that will support 20,000 people, which was funded by a grant of $100,000 to IRRAD.
Through The Mosaic Institute in Brazil, Child is Life received funding of $99,000 for its children's health self-esteem and self-awareness program that works with schools and communities on four modules: health and nutrition, physiology and respect for the human body, health and the environment; and decisions for better living.
The Mosaic Company Foundation supported HELPS International with a $1.236 million grant to be paid over the next three years to support The Corn Project in Guatemala, which brings rural Latin American families out of generational poverty by using an integrated approach of development, from home transformation with water filters and stoves, to sustainable economic development with agronomic training and a revolving fertilizer loan fund. Mosaic agronomists provide soil fertility advice, conduct training the trainer sessions and provide Mayan seed bank advice.
Mosaic donated 2,520 metric tonnes (MT) of DAP fertilizer and all logistics expenses to transport the product to seven counties in Africa (Ghana, Mali, Nigeria, Tanzania, Ethiopia, Malawi, and Uganda) to support Millennium Promise's agricultural interventions which focus on providing a revolving loan fund for small holder farmers in rural communities and helping families achieve food security and self-sufficiency.
The Mosaic Company Foundation granted the Tampa Bay Estuary Program $175,000 for the new Tampa Bay Environmental Fund, a multi-entity public-private partnership to establish competitive grant fund that will support the highest priority conservation goals in Tampa Bay watershed. This includes Hillsborough and Manatee Counties, in partnership with the National Fish and Wildlife Foundation, and will provide long-term funding for Tampa Bay restoration, research and education initiatives, and serve as a national public-private partnership model.
The Mosaic Company Foundation provided a $225,000 grant to be paid over the next three years to Tampa Bay Watch for a comprehensive, community-based oyster habitat and water quality initiative that promotes watershed protection and supports youth education programs. Schools, community groups, corporations and individuals will be able to participate in hands-on oyster restoration activities as part of the initiative.
The Mosaic Company Foundation supported the Florida Association of Food Banks with a $100,000 grant for its Farmers Feeding Florida program, which will enable it to collaborate with Florida produce growers, producers, packers and distributors to deliver more than 1.25 million pounds of fresh produce to Central Florida food banks.
The Mosaic Company Foundation provided a $90,000 grant to Fast Food Farm for its new Mosaic Kid's Kitchen, a new on-site trailer with a teaching kitchen for the farm-to-table project that shows youth the importance of agriculture in their daily lives and works with various community partners in Saint James Parish, Louisiana.
Mosaic supports the CTIC for its work in nutrient management programs, including the Upstream Heroes Network campaign in the Mississippi River Basin, conservation agriculture work in Indian Creek and the Conservation in Action Tour.
The Mosaic Company Foundation has chosen to partner with The Nature Conservancy to extend and expand work with farmers and partners to improve water quality in three key agricultural watersheds in the Upper Mississippi River Basin: at Minnesota's Root River, Iowa's Boone River and Illinois' Mackinaw River. The $720,000 grant to the Conservancy's Great River's Partnership (GRP) over the next two years will work with local partners and producers to address nutrient and sediment runoff in agricultural landscapes.
The Mosaic Company Foundation provided a $106,000 grant to the Fresh Water Society for its Minnesota FarmWise Program, a community-based farmer-to-farmer initiative designed to improve water quality through voluntary adoption of critical conservation practices that reduce sediment and nutrient flow in vulnerable watersheds, with a farmer-led mentoring program.
The Mosaic Company Foundation provided over $200,000 to Second Harvest Heartland for its innovative approaches to emergency food support and volunteer involvement in food recovery in the Twin Cities as the Upper Midwest's largest hunger relief organization.
Mosaic has a significant economic impact in several areas, although we have not undertaken an empirical measurement of indirect economic impacts: