UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2015
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 1-10351
Potash Corporation of Saskatchewan Inc.
(Exact name of registrant as specified in its charter)
Canada | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
122 1st Avenue South Saskatoon, Saskatchewan, Canada (Address of principal executive offices) |
S7K 7G3 (Zip Code) |
306-933-8500
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).
Yes ¨ No þ
As at April 10, 2015, Potash Corporation of Saskatchewan Inc. had 834,080,020 Common Shares outstanding.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income
Unaudited |
In millions of US dollars except as otherwise noted |
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Sales (Note 2) |
$ | 1,665 | $ | 1,680 | ||||
Freight, transportation and distribution |
(128 | ) | (166 | ) | ||||
Cost of goods sold |
(870 | ) | (949 | ) | ||||
Gross Margin |
667 | 565 | ||||||
Selling and administrative expenses |
(60 | ) | (68 | ) | ||||
Provincial mining and other taxes |
(95 | ) | (54 | ) | ||||
Share of earnings of equity-accounted investees |
36 | 33 | ||||||
Dividend income |
| 69 | ||||||
Impairment of available-for-sale investment |
| (38 | ) | |||||
Other income |
11 | 24 | ||||||
Operating Income |
559 | 531 | ||||||
Finance costs |
(49 | ) | (47 | ) | ||||
Income Before Income Taxes |
510 | 484 | ||||||
Income taxes (Note 3) |
(140 | ) | (144 | ) | ||||
Net Income |
$ | 370 | $ | 340 | ||||
Net Income per Share |
||||||||
Basic |
$ | 0.45 | $ | 0.40 | ||||
Diluted |
$ | 0.44 | $ | 0.40 | ||||
Weighted Average Shares Outstanding |
||||||||
Basic |
831,390,000 | 852,919,000 | ||||||
Diluted |
837,099,000 | 859,675,000 |
(See Notes to the Condensed Consolidated Financial Statements)
1 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Condensed Consolidated Statements of Comprehensive Income
Unaudited |
In millions of US dollars |
Three Months Ended March 31 | ||||||||
(Net of related income taxes) | 2015 | 2014 | ||||||
Net Income |
$ | 370 | $ | 340 | ||||
Other comprehensive income |
||||||||
Items that have been or may be subsequently reclassified to net income: |
||||||||
Available-for-sale investments (1) |
||||||||
Net fair value gain during the period |
38 | 50 | ||||||
Cash flow hedges |
||||||||
Net fair value loss during the period (2) |
(22 | ) | (1 | ) | ||||
Reclassification to income of net loss (3) |
11 | 6 | ||||||
Other |
(4 | ) | 2 | |||||
Other Comprehensive Income |
23 | 57 | ||||||
Comprehensive Income |
$ | 393 | $ | 397 |
(1) | Available-for-sale investments are comprised of shares in Israel Chemicals Ltd. and Sinofert Holdings Limited. |
(2) | Cash flow hedges are comprised of natural gas derivative instruments and treasury lock derivatives and were net of income taxes of $12 (2014 $1). |
(3) | Net of income taxes of $(6) (2014 $(4)). |
(See Notes to the Condensed Consolidated Financial Statements)
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 2 |
Condensed Consolidated Statements of Cash Flow
Unaudited |
In millions of US dollars |
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Operating Activities |
||||||||
Net income |
$ | 370 | $ | 340 | ||||
Adjustments to reconcile net income to cash provided by operating activities (Note 4) |
181 | 262 | ||||||
Changes in non-cash operating working capital (Note 4) |
(30 | ) | (63 | ) | ||||
Cash provided by operating activities |
521 | 539 | ||||||
Investing Activities |
||||||||
Additions to property, plant and equipment |
(228 | ) | (224 | ) | ||||
Other assets and intangible assets |
(5 | ) | (2 | ) | ||||
Cash used in investing activities |
(233 | ) | (226 | ) | ||||
Financing Activities |
||||||||
Proceeds from long-term debt obligations |
494 | 737 | ||||||
Repayment of short-term debt obligations |
(536 | ) | (470 | ) | ||||
Dividends |
(274 | ) | (293 | ) | ||||
Repurchase of common shares |
| (396 | ) | |||||
Issuance of common shares |
30 | 14 | ||||||
Cash used in financing activities |
(286 | ) | (408 | ) | ||||
Increase (Decrease) in Cash and Cash Equivalents |
2 | (95 | ) | |||||
Cash and Cash Equivalents, Beginning of Period |
215 | 628 | ||||||
Cash and Cash Equivalents, End of Period |
$ | 217 | $ | 533 | ||||
Cash and cash equivalents comprised of: |
||||||||
Cash |
$ | 96 | $ | 134 | ||||
Short-term investments |
121 | 399 | ||||||
$ | 217 | $ | 533 |
(See Notes to the Condensed Consolidated Financial Statements)
3 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Condensed Consolidated Statements of Changes in Equity
Unaudited |
In millions of US dollars |
Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||
Share Capital |
Contributed Surplus |
Net unrealized gain on available-for- sale investments |
Net loss on derivatives designated as cash flow hedges |
Other | Total Accumulated Other Comprehensive Income |
Retained Earnings |
Total Equity (1) |
|||||||||||||||||||||||||
Balance December 31, 2014 |
$ | 1,632 | $ | 234 | $ | 623 | $ | (119 | ) | $ | (1 | ) | $ | 503 | $ | 6,423 | $ | 8,792 | ||||||||||||||
Net income |
| | | | | | 370 | 370 | ||||||||||||||||||||||||
Other comprehensive income (loss) |
| | 38 | (11 | ) | (4 | ) | 23 | | 23 | ||||||||||||||||||||||
Dividends declared |
| | | | | | (313 | ) | (313 | ) | ||||||||||||||||||||||
Effect of share-based compensation including issuance of common shares |
44 | (1 | ) | | | | | | 43 | |||||||||||||||||||||||
Shares issued for dividend reinvestment plan |
14 | | | | | | | 14 | ||||||||||||||||||||||||
Balance March 31, 2015 |
$ | 1,690 | $ | 233 | $ | 661 | $ | (130 | ) | $ | (5 | ) | $ | 526 | $ | 6,480 | $ | 8,929 | ||||||||||||||
Balance December 31, 2013 |
$ | 1,600 | $ | 219 | $ | 780 | $ | (105 | ) | $ | (2 | ) | $ | 673 | $ | 7,136 | $ | 9,628 | ||||||||||||||
Net income |
| | | | | | 340 | 340 | ||||||||||||||||||||||||
Other comprehensive income |
| | 50 | 5 | 2 | 57 | | 57 | ||||||||||||||||||||||||
Share repurchase |
(21 | ) | (1 | ) | | | | | (377 | ) | (399 | ) | ||||||||||||||||||||
Dividends declared |
| | | | | | (299 | ) | (299 | ) | ||||||||||||||||||||||
Effect of share-based compensation including issuance of common shares |
22 | 12 | | | | | | 34 | ||||||||||||||||||||||||
Shares issued for dividend reinvestment plan |
10 | | | | | | | 10 | ||||||||||||||||||||||||
Balance March 31, 2014 |
$ | 1,611 | $ | 230 | $ | 830 | $ | (100 | ) | $ | | $ | 730 | $ | 6,800 | $ | 9,371 |
(1) | All equity transactions were attributable to common shareholders. |
(See Notes to the Condensed Consolidated Financial Statements)
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 4 |
Condensed Consolidated Statements of Financial Position
Unaudited |
In millions of US dollars except as otherwise noted |
As at | March 31, 2015 |
December 31, 2014 |
||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 217 | $ | 215 | ||||
Receivables |
837 | 1,029 | ||||||
Inventories (Note 5) |
715 | 646 | ||||||
Prepaid expenses and other current assets |
61 | 48 | ||||||
1,830 | 1,938 | |||||||
Non-current assets |
||||||||
Property, plant and equipment |
12,692 | 12,674 | ||||||
Investments in equity-accounted investees |
1,243 | 1,211 | ||||||
Available-for-sale investments |
1,565 | 1,527 | ||||||
Other assets |
294 | 232 | ||||||
Intangible assets |
142 | 142 | ||||||
Total Assets |
$ | 17,766 | $ | 17,724 | ||||
Liabilities |
||||||||
Current liabilities |
||||||||
Short-term debt and current portion of long-term debt |
$ | 495 | $ | 1,032 | ||||
Payables and accrued charges |
978 | 1,086 | ||||||
Current portion of derivative instrument liabilities |
86 | 80 | ||||||
1,559 | 2,198 | |||||||
Non-current liabilities |
||||||||
Long-term debt (Note 6) |
3,709 | 3,213 | ||||||
Derivative instrument liabilities |
129 | 115 | ||||||
Deferred income tax liabilities |
2,226 | 2,201 | ||||||
Pension and other post-retirement benefit liabilities |
507 | 503 | ||||||
Asset retirement obligations and accrued environmental costs |
595 | 589 | ||||||
Other non-current liabilities and deferred credits |
112 | 113 | ||||||
Total Liabilities |
8,837 | 8,932 | ||||||
Shareholders Equity |
||||||||
Share capital (Note 7) |
1,690 | 1,632 | ||||||
Contributed surplus |
233 | 234 | ||||||
Accumulated other comprehensive income |
526 | 503 | ||||||
Retained earnings |
6,480 | 6,423 | ||||||
Total Shareholders Equity |
8,929 | 8,792 | ||||||
Total Liabilities and Shareholders Equity |
$ | 17,766 | $ | 17,724 |
(See Notes to the Condensed Consolidated Financial Statements)
|
5 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2015
Unaudited |
In millions of US dollars except as otherwise noted |
Standards, Amendments and Interpretations not yet Effective and not Applied
The International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC) have issued the following standards and amendments or interpretations to existing standards that were not yet effective and not applied as at March 31, 2015. The company does not anticipate early adoption of these standards at this time.
Standard | Description | Impact | Effective Date (1) | |||
Amendments to IAS 1, Presentation of Financial Statements |
Issued to improve the effectiveness of presentation and disclosure in financial reports, with the objective of reducing immaterial note disclosures. | The company is reviewing the standard to determine the potential impact, if any. | January 1, 2016, applied prospectively. | |||
Amendments to IAS 16, Property, Plant and Equipment and IAS 38, Intangible Assets | Issued to clarify acceptable methods of depreciation and amortization. | The company is reviewing the standard to determine the potential impact, if any; however, no significant impact is anticipated. | January 1, 2016, applied prospectively. | |||
Amendments to IFRS 11, Joint Arrangements | Issued to provide additional guidance on accounting for the acquisition of an interest in a joint operation. | The company is reviewing the standard to determine the potential impact, if any; however, no significant impact is anticipated. | January 1, 2016, applied prospectively. | |||
IFRS 15, Revenue From Contracts With Customers | Issued to provide guidance on the recognition of revenue from contracts with customers, including multiple-element arrangements and transactions not previously addressed comprehensively, and enhance disclosures about revenue. | The company is reviewing the standard to determine the potential impact, if any. | January 1, 2017, applied retrospectively with certain limitations. The IASB has voted to propose a deferral of the effective date to January 1, 2018. | |||
IFRS 9, Financial Instruments | Issued to replace IAS 39, providing guidance on the classification, measurement and disclosure of financial instruments and introducing a new hedge accounting model. | The company is reviewing the standard to determine the potential impact, if any. | January 1, 2018, applied retrospectively with certain exceptions. |
(1) | Effective date for annual periods beginning on or after the stated date. |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 6 |
2. Segment Information
The company has three reportable operating segments: potash, nitrogen and phosphate. These segments are differentiated by the chemical nutrient contained in the products that each produces. The accounting policies of the segments are the same as those described in Note 1 and are measured in a manner consistent with that of the financial statements. Inter-segment sales are made under terms that approximate market value. The companys operating segments have been determined based on reports reviewed by the Chief Executive Officer, assessed to be the companys chief operating decision-maker, that are used to make strategic decisions.
Three Months Ended March 31, 2015 | ||||||||||||||||||||
Potash | Nitrogen | Phosphate | All Others | Consolidated | ||||||||||||||||
Sales third party |
$ | 738 | $ | 482 | $ | 445 | $ | | $ | 1,665 | ||||||||||
Freight, transportation and distribution third party |
(64 | ) | (23 | ) | (41 | ) | | (128 | ) | |||||||||||
Net sales third party |
674 | 459 | 404 | | ||||||||||||||||
Cost of goods sold third party |
(246 | ) | (290 | ) | (334 | ) | | (870 | ) | |||||||||||
Margin (cost) on inter-segment sales (1) |
| 12 | (12 | ) | | | ||||||||||||||
Gross margin |
428 | 181 | 58 | | 667 | |||||||||||||||
Depreciation and amortization |
(58 | ) | (46 | ) | (64 | ) | (4 | ) | (172 | ) | ||||||||||
Assets |
9,668 | 2,369 | 2,395 | 3,334 | 17,766 | |||||||||||||||
Cash outflows for additions to property, plant and equipment |
111 | 60 | 36 | 21 | 228 |
(1) | Inter-segment net sales were $18. |
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Potash | Nitrogen | Phosphate | All Others | Consolidated | ||||||||||||||||
Sales third party |
$ | 671 | $ | 581 | $ | 428 | $ | | $ | 1,680 | ||||||||||
Freight, transportation and distribution third party |
(86 | ) | (31 | ) | (49 | ) | | (166 | ) | |||||||||||
Net sales third party |
585 | 550 | 379 | | ||||||||||||||||
Cost of goods sold third party |
(285 | ) | (323 | ) | (341 | ) | | (949 | ) | |||||||||||
Margin (cost) on inter-segment sales (1) |
| 12 | (12 | ) | | | ||||||||||||||
Gross margin |
300 | 239 | 26 | | 565 | |||||||||||||||
Depreciation and amortization |
(52 | ) | (42 | ) | (78 | ) | (4 | ) | (176 | ) | ||||||||||
Assets |
9,365 | 2,247 | 2,444 | 3,920 | 17,976 | |||||||||||||||
Cash outflows for additions to property, plant and equipment |
124 | 67 | 31 | 2 | 224 |
(1) | Inter-segment net sales were $25. |
3. Income Taxes
A separate estimated average annual effective tax rate was determined for each taxing jurisdiction and applied individually to the interim period pre-tax income of each jurisdiction.
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Income tax expense |
$ | 140 | $ | 144 | ||||
Actual effective tax rate on ordinary earnings |
27% | 27% | ||||||
Actual effective tax rate including discrete items |
27% | 30% | ||||||
Discrete tax adjustments that impacted the tax rate |
$ | 3 | $ | 2 |
In the first quarter of 2014, a $38 discrete non-tax deductible impairment of an available-for-sale investment was recorded, which increased the actual effective tax rate including discrete items by 2 percentage points.
7 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Income tax balances within the condensed consolidated statements of financial position were comprised of the following:
Income Tax Assets (Liabilities) | Statements of Financial Position Location | March 31, 2015 |
December 31, 2014 |
|||||||
Current income tax assets |
||||||||||
Current |
Receivables | $ | 79 | $ | 145 | |||||
Non-current |
Other assets | 75 | 83 | |||||||
Deferred income tax assets |
Other assets | 10 | 10 | |||||||
Total income tax assets |
$ | 164 | $ | 238 | ||||||
Current income tax liabilities |
||||||||||
Current |
Payables and accrued charges | $ | (4 | ) | $ | (5 | ) | |||
Non-current |
Other non-current liabilities and deferred credits | (109 | ) | (109 | ) | |||||
Deferred income tax liabilities |
Deferred income tax liabilities | (2,226 | ) | (2,201 | ) | |||||
Total income tax liabilities |
$ | (2,339 | ) | $ | (2,315 | ) |
4. Consolidated Statements of Cash Flow
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Reconciliation of cash provided by operating activities |
||||||||
Net income |
$ | 370 | $ | 340 | ||||
Adjustments to reconcile net income to cash provided by operating activities |
||||||||
Depreciation and amortization |
172 | 176 | ||||||
Share-based compensation |
15 | 15 | ||||||
Net undistributed earnings of equity-accounted investees |
(35 | ) | (31 | ) | ||||
Impairment of available-for-sale investment |
| 38 | ||||||
Provision for deferred income tax |
25 | 46 | ||||||
Pension and other post-retirement benefits |
5 | 9 | ||||||
Asset retirement obligations and accrued environmental costs |
(13 | ) | 8 | |||||
Other long-term liabilities and miscellaneous |
12 | 1 | ||||||
Subtotal of adjustments |
181 | 262 | ||||||
Changes in non-cash operating working capital |
||||||||
Receivables |
56 | (158 | ) | |||||
Inventories |
(62 | ) | 20 | |||||
Prepaid expenses and other current assets |
(8 | ) | 18 | |||||
Payables and accrued charges |
(16 | ) | 57 | |||||
Subtotal of changes in non-cash operating working capital |
(30 | ) | (63 | ) | ||||
Cash provided by operating activities |
521 | 539 | ||||||
Supplemental cash flow disclosure |
||||||||
Interest paid |
$ | 38 | $ | 24 | ||||
Income taxes paid |
$ | 42 | $ | 50 |
5. Inventories
March 31, 2015 |
December 31, 2014 |
|||||||
Finished products |
$ | 320 | $ | 267 | ||||
Intermediate products |
93 | 85 | ||||||
Raw materials |
82 | 78 | ||||||
Materials and supplies |
220 | 216 | ||||||
$ | 715 | $ | 646 |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 8 |
8. Financial Instruments
Fair Value
Estimated fair values for financial instruments are designed to approximate amounts at which the instruments could be exchanged in a current arms-length transaction between knowledgeable willing parties. The valuation policies and procedures for financial reporting purposes are determined by the companys finance department.
Financial instruments included in the consolidated statements of financial position are measured either at fair value or amortized cost. The tables below explain the valuation methods used to determine the fair value of each financial instrument and its associated level in the fair value hierarchy.
Financial Instruments Measured at Fair Value | Fair Value Method | |
Cash and cash equivalents | Approximated carrying value. | |
Investments in Israel Chemicals Ltd. (ICL) and Sinofert Holdings Limited (Sinofert) designated as available-for-sale | Based on the closing bid price of the common shares (Level 1) as at the statements of financial position dates. | |
Foreign currency derivatives not traded in an active market | Determined using quoted forward exchange rates (Level 2) as at the statements of financial position dates. | |
Natural gas swaps not traded in an active market | Based on a discounted cash flow model. The inputs used in the model included contractual cash flows based on prices for natural gas futures contracts, fixed prices and notional volumes specified by the swap contracts, the time value of money, liquidity risk, the companys own credit risk (related to instruments in a liability position) and counterparty credit risk (related to instruments in an asset position). Certain of the futures contract prices used as inputs in the model were supported by prices quoted in an active market (Level 2) and others were not based on observable market data (Level 3). For valuations that included both observable and unobservable data, if the unobservable input was determined to be significant to the overall inputs, the entire valuation was categorized in Level 3. | |
Natural gas futures | Based on closing prices provided by the exchange (NYMEX) (Level 1) as at the statements of financial position dates. |
9 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
For natural gas swaps, the primary input into the valuation model was natural gas futures prices, which were based on delivery at the Henry Hub and were observable only for up to three years in the future. The unobservable futures price range as at March 31, 2015 was $3.29 to $4.21 per MMBtu (December 31, 2014 $3.82 to $4.74 per MMBtu). A 10 percent increase in the unobservable natural gas futures prices that are not counterbalanced by offsetting derivative positions would result in a $9 (December 31, 2014 $3) decrease in the fair value of the liability. A 10 percent decrease in the unobservable natural gas futures prices that are not counterbalanced by offsetting derivative positions would result in an $8 (December 31, 2014 $3) increase in the fair value of the liability. Interest rates used to discount estimated cash flows as at March 31, 2015 were between 0.18 percent and 3.09 percent (December 31, 2014 between 0.17 percent and 3.48 percent) depending on the settlement date.
Financial Instruments Measured at Amortized Cost | Fair Value Method | |
Receivables, short-term debt and payables and accrued charges | Assumed to approximate carrying value due to their short-term nature. | |
Long-term debt senior notes | Quoted market prices (Level 1 or 2 depending on the market liquidity of the debt). | |
Other long-term debt instruments | Assumed to approximate carrying value. |
Presented below is a comparison of the fair value of the companys senior notes to their carrying values.
March 31, 2015 | December 31, 2014 | |||||||||||||||
Carrying Amount of Liability |
Fair Value of Liability |
Carrying Amount of Liability |
Fair Value of Liability |
|||||||||||||
Long-term debt senior notes |
$ | 4,250 | $ | 4,742 | $ | 3,750 | $ | 4,182 |
The following table presents the companys fair value hierarchy for financial assets and financial liabilities carried at fair value on a recurring basis.
Fair Value Measurements as at Reporting Dates Using: | ||||||||||||||||
Carrying Amount of Asset (Liability) |
Quoted Prices in Active Markets for Identical Assets (Level 1) (1) |
Significant Other (Level 2) (1,2) |
Significant (Level 3) (2) |
|||||||||||||
March 31, 2015 |
||||||||||||||||
Derivative instrument assets |
||||||||||||||||
Natural gas derivatives |
$ | 11 | $ | | $ | 3 | $ | 8 | ||||||||
Investments in ICL and Sinofert |
1,565 | 1,565 | | | ||||||||||||
Derivative instrument liabilities |
||||||||||||||||
Natural gas derivatives |
(214 | ) | | (102 | ) | (112 | ) | |||||||||
Foreign currency derivatives |
(1 | ) | | (1 | ) | | ||||||||||
December 31, 2014 |
||||||||||||||||
Derivative instrument assets |
||||||||||||||||
Natural gas derivatives |
$ | 7 | $ | | $ | (13 | ) | $ | 20 | |||||||
Investments in ICL and Sinofert |
1,527 | 1,527 | | | ||||||||||||
Derivative instrument liabilities |
||||||||||||||||
Natural gas derivatives |
(193 | ) | (4 | ) | (58 | ) | (131 | ) | ||||||||
Foreign currency derivatives |
(2 | ) | | (2 | ) | |
(1) | During the three months ended March 31, 2015 and twelve months ended December 31, 2014, there were no transfers between Level 1 and Level 2. |
(2) | During the three months ended March 31, 2015, there were no transfers into Level 3 and $15 of losses was transferred out of Level 3 into Level 2 as (due to the passage of time) the terms of certain natural gas derivatives now matured in their entirety within 36 months. During the twelve months ended December 31, 2014, there were no transfers into Level 3 and $50 of losses was transferred out of Level 3 into Level 2 as (due to the passage of time) the terms of certain natural gas derivatives now matured in their entirety within 36 months. The companys policy is to recognize transfers at the end of the reporting period. |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 10 |
The following table presents a reconciliation of the beginning and ending balances of the companys fair value measurements using significant unobservable inputs (Level 3):
Natural Gas Derivatives | ||||||||
Three Months Ended March 31, 2015 |
Twelve Months Ended December 31, 2014 |
|||||||
Balance, beginning of period |
$ | (111 | ) | $ | (141 | ) | ||
Total (losses) gains (realized and unrealized) before income taxes |
||||||||
Included in net income, within cost of goods sold |
(6 | ) | (19 | ) | ||||
Included in other comprehensive income |
(10 | ) | (30 | ) | ||||
Purchases |
| | ||||||
Sales |
| | ||||||
Issues |
| | ||||||
Settlements |
8 | 29 | ||||||
Transfers of losses out of Level 3 |
15 | 50 | ||||||
Balance, end of period |
$ | (104 | ) | $ | (111 | ) | ||
Losses for the period included in net income, within cost of goods sold, were: |
||||||||
Change in unrealized losses relating to instruments still held at the reporting date |
$ | | $ | (1 | ) | |||
Total losses, realized and unrealized |
(6 | ) | (19 | ) |
11 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 12 |
13 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 14 |
How We Approach Risk
In our 2014 AIR, we provide an overview of our approach to risk (page 21), explain how we use a risk management ranking methodology to assess the key risks specific to our company (page 22) and describe each key risk and our risk management approach (pages 23 to 25). Our business is subject to constant and significant change that can result in changes to our key risks.
No additional key risks were identified or removed during the first quarter of 2015 compared to those outlined in our 2014 AIR. The following table outlines our continuing key risks as of December 31, 2014 and March 31, 2015.
Key Risks | Risk Level Mar 31/15 |
Risk Level Dec 31/14 |
Status | Link
to Business Strategies1 |
Key Risks | Risk Level Mar 31/15 |
Risk Level Dec 31/14 |
Status | Link
to Business Strategies1 | |||||||||||
Global potash demand | B | B |
|
Product transportation mishaps |
C | C |
| |||||||||||||
Competitive potash supply | B | B |
|
Sustaining growth opportunities |
C | C |
| |||||||||||||
Offshore potash sales and distribution | B | B | Transportation and distribution infrastructure |
C | C |
|
| |||||||||||||
Potash operating capability | C | C |
|
Trinidad natural gas supply |
C | C |
|
| ||||||||||||
Safety, health, environmental and security | C | C |
|
Cyber security |
C | C |
|
| ||||||||||||
International operations | C | C |
2
|
|||||||||||||||||
No change to risk Increased risk Decreased risk |
Risk has materialized in part in the current or previous periods |
1 | Darker sections of the triangle indicate the specific strategy (described in the triangle on page 14 of this 10-Q) impacted by the described risk in the table above. Faded sections of the triangle mean the specific strategy is not significantly impacted by the described risk. |
2 | While the relative residual ranking of this risk has not changed since year end, we believe the risk level is trending higher due to external factors affecting the business and operating environment in the foreign jurisdictions in which we have equity investments. This risk is further described on page 20 of our 2014 Form 10-K. |
15 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Key Performance Drivers Performance Compared to Targets
Through our integrated value model, we set, evaluate and refine our goals and priorities to drive improvements that benefit all those impacted by our business. We demonstrate our accountability by tracking and reporting our progress against targets related to each goal. Our long-term goals and 2015 targets are set out on pages 36 to 41 of our 2014 AIR. A summary of our progress against selected goals and representative annual targets is set out below.
Goal | Representative 2015 Annual Target | Performance to March 31, 2015 | ||
Create superior long-term shareholder value. | Exceed total shareholder return performance for our sector and the DAXglobal Agribusiness Index. | PotashCorps total shareholder return was -8 percent in the first three months of 2015 compared to our sectors weighted average return (based on market capitalization) of 4 percent and the DAXglobal Agribusiness Index weighted average return (based on market capitalization) of -2 percent. | ||
Attract, retain, develop and engage employees to achieve our long-term goals. | Fill 75 percent of senior staff openings with qualified internal candidates. | The percentage of senior staff positions filled internally in the first three months of 2015 was 74 percent. | ||
Achieve no harm to people. | Achieve zero life-altering injuries at our sites. | Sadly, a workplace accident resulted in the loss of an employee at our White Springs phosphate operation during the first quarter of 2015. | ||
Reduce total site recordable injury rate to 0.95 (or lower) and total lost-time injury rate to 0.10 (or lower). |
During the first three months of 2015, total site recordable injury rate was 0.92 and total lost-time injury rate was 0.12. | |||
Achieve no damage to the environment. | By 2018, reduce total reportable incidents (releases, permit excursions and spills) by 40 percent from 2014 levels. | Annualized total reportable incidents were down 17 percent during the first three months of 2015 compared to 2014 annual levels. Compared to the first three months of 2014, total reportable incidents were unchanged. |
Performance Overview
This discussion and analysis are based on the companys unaudited interim condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q (financial statements in this Form 10-Q) based on International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), unless otherwise stated. All references to per-share amounts pertain to diluted net income per share.
For an understanding of trends, events, uncertainties and the effect of critical accounting estimates on our results and financial condition, this Form 10-Q should be read carefully, together with our 2014 AIR.
Earnings Guidance First Quarter 2015
Company Guidance | Actual Results | |||||
Earnings per share |
$0.45 $0.55 | $ | 0.44 |
Overview of Actual Results
Three Months Ended March 31 | ||||||||||||||||
Dollars (millions), except per-share amounts | 2015 | 2014 | Change | % Change | ||||||||||||
Sales |
$ | 1,665 | $ | 1,680 | $ | (15 | ) | (1 | ) | |||||||
Gross margin |
667 | 565 | 102 | 18 | ||||||||||||
Operating income |
559 | 531 | 28 | 5 | ||||||||||||
Net income |
370 | 340 | 30 | 9 | ||||||||||||
Net income per share diluted |
0.44 | 0.40 | 0.04 | 10 | ||||||||||||
Other comprehensive income |
23 | 57 | (34 | ) | (60 | ) |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 16 |
17 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Potash Performance
Financial Performance
Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne (1) | ||||||||||||||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||||||||||||
Manufactured product |
||||||||||||||||||||||||||||||||||||
Net sales |
||||||||||||||||||||||||||||||||||||
North America |
$ | 279 | $ | 291 | (4 | ) | 800 | 988 | (19 | ) | $ | 349 | $ | 295 | 18 | |||||||||||||||||||||
Offshore |
388 | 287 | 35 | 1,549 | 1,323 | 17 | $ | 250 | $ | 217 | 15 | |||||||||||||||||||||||||
667 | 578 | 15 | 2,349 | 2,311 | 2 | $ | 284 | $ | 250 | 14 | ||||||||||||||||||||||||||
Cost of goods sold |
(237 | ) | (274 | ) | (14 | ) | $ | (101 | ) | $ | (119 | ) | (15 | ) | ||||||||||||||||||||||
Gross margin |
430 | 304 | 41 | $ | 183 | $ | 131 | 40 | ||||||||||||||||||||||||||||
Other miscellaneous and purchased product gross margin (2) |
(2 | ) | (4 | ) | (50 | ) | ||||||||||||||||||||||||||||||
Gross Margin |
$ | 428 | $ | 300 | 43 | $ | 182 | $ | 130 | 40 |
(1) | Rounding differences may occur due to the use of whole dollars in per-tonne calculations. |
(2) | Comprised of net sales of $7 million (2014 $7 million) less cost of goods sold of $9 million (2014 $11 million). |
Potash gross margin variance was attributable to:
Three Months Ended March 31 2015 vs. 2014 |
||||||||||||||||
Change in Prices/Costs |
||||||||||||||||
Dollars (millions) | Change in Sales Volumes |
Net Sales |
Cost of Goods Sold |
Total | ||||||||||||
Manufactured product |
||||||||||||||||
North America |
$ | (41 | ) | $ | 44 | $ | 12 | $ | 15 | |||||||
Offshore |
30 | 51 | 30 | 111 | ||||||||||||
Change in market mix |
18 | (16 | ) | (2 | ) | | ||||||||||
Total manufactured product |
$ | 7 | $ | 79 | $ | 40 | 126 | |||||||||
Other miscellaneous and purchased product |
2 | |||||||||||||||
Total |
$ | 128 |
Sales to major offshore markets were as follows:
Three Months Ended March 31 | ||||||||||||||||||||||||
By Canpotex (1) | From New Brunswick | |||||||||||||||||||||||
Percentage of Annual Sales Volumes |
Percentage of Annual Sales Volumes |
|||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||||
Other Asian countries (2) |
47 | 47 | | | | | ||||||||||||||||||
Latin America |
21 | 27 | (22 | ) | 100 | 100 | | |||||||||||||||||
China |
12 | 16 | (25 | ) | | | | |||||||||||||||||
India |
11 | 3 | 267 | | | | ||||||||||||||||||
Oceania, Europe and Other |
9 | 7 | 29 | | | | ||||||||||||||||||
100 | 100 | 100 | 100 |
(1) | Canpotex Limited (Canpotex). |
(2) | All Asian countries except China and India. |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 18 |
The most significant contributors to the change in total gross margin quarter over quarter were as follows (direction of arrows refers to impact on gross margin):
Net Sales Prices | Sales Volumes | Cost of Goods Sold | ||
h Realized prices reflected the strong recovery throughout 2014 driven by record consumption. |
i North American sales volumes declined due to a slow start to the spring planting season and record offshore imports.
h Shipments to offshore markets rose as improved rail logistics enhanced the ability of Canpotex to meet customer demands. |
h The Canadian dollar weakened relative to the US dollar, reducing cost of goods sold. |
|
Non-Financial Performance
Three Months Ended March 31 | ||||||||||||||
2015 | 2014 | % Change | ||||||||||||
Production |
KCl tonnes produced (thousands) |
2,612 | 2,395 | 9 | ||||||||||
Safety |
Life-altering injuries |
| 1 | (100 | ) | |||||||||
Total site recordable injury rate |
1.41 | 1.34 | 5 | |||||||||||
Total lost-time injury rate |
0.20 | 0.22 | (9 | ) | ||||||||||
Employee |
Percentage of senior staff positions filled internally |
100% | 100% | | ||||||||||
Environmental |
Environmental incidents |
1 | 4 | (75 | ) | |||||||||
Waste (million tonnes) |
5.3 | 4.5 | 18 |
The most significant contributors to the change in non-financial results quarter over quarter were as follows:
Environmental | In the first quarter of 2015, we had one environmental incident related to a minor propane gas release. Environmental incidents for the first quarter of 2014 included brine and slurry pipeline failures resulting in brine spills.
Waste, as defined in our 2014 AIR, increased quarter over quarter due to increased mining activity and brine injection. |
19 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Nitrogen Performance
Financial Performance
Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne (1) | ||||||||||||||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||||||||||||
Manufactured product (2) |
||||||||||||||||||||||||||||||||||||
Net sales |
||||||||||||||||||||||||||||||||||||
Ammonia |
$ | 228 | $ | 246 | (7 | ) | 489 | 583 | (16 | ) | $ | 466 | $ | 422 | 10 | |||||||||||||||||||||
Urea |
97 | 150 | (35 | ) | 252 | 348 | (28 | ) | $ | 386 | $ | 433 | (11 | ) | ||||||||||||||||||||||
Solutions, nitric acid, ammonium nitrate |
134 | 164 | (18 | ) | 568 | 698 | (19 | ) | $ | 235 | $ | 234 | | |||||||||||||||||||||||
459 | 560 | (18 | ) | 1,309 | 1,629 | (20 | ) | $ | 351 | $ | 344 | 2 | ||||||||||||||||||||||||
Cost of goods sold |
(282 | ) | (324 | ) | (13 | ) | $ | (215 | ) | $ | (199 | ) | 8 | |||||||||||||||||||||||
Gross margin |
177 | 236 | (25 | ) | $ | 136 | $ | 145 | (6 | ) | ||||||||||||||||||||||||||
Other miscellaneous and purchased product gross margin (3) |
4 | 3 | 33 | |||||||||||||||||||||||||||||||||
Gross Margin |
$ | 181 | $ | 239 | (24 | ) | $ | 138 | $ | 147 | (6 | ) |
(1) | Rounding differences may occur due to the use of whole dollars in per-tonne calculations. |
(2) | Includes inter-segment ammonia sales, comprised of: net sales $18 million, cost of goods sold $6 million and 33,000 sales tonnes (2014 net sales $25 million, cost of goods sold $12 million and 48,000 sales tonnes). Inter-segment profits are eliminated on consolidation. |
(3) | Comprised of third-party and inter-segment sales, including: third-party net sales $18 million less cost of goods sold $14 million (2014 net sales $15 million less cost of goods sold $11 million) and inter-segment net sales $NIL less cost of goods sold $NIL (2014 net sales $NIL less cost of goods sold $1 million). Inter-segment profits are eliminated on consolidation. |
Nitrogen gross margin variance was attributable to:
Three Months Ended March 31 2015 vs. 2014 |
||||||||||||||||
Change in Prices/Costs |
||||||||||||||||
Dollars (millions) | Change in Sales Volumes |
Net Sales |
Cost of Goods Sold |
Total | ||||||||||||
Manufactured product |
||||||||||||||||
Ammonia |
$ | (19 | ) | $ | 22 | $ | (7 | ) | $ | (4) | ||||||
Urea |
(20 | ) | (12 | ) | | (32 | ) | |||||||||
Solutions, nitric acid, ammonium nitrate |
(19 | ) | 1 | 4 | (14 | ) | ||||||||||
Hedge |
| | (9 | ) | (9 | ) | ||||||||||
Change in product mix |
2 | (2 | ) | | | |||||||||||
Total manufactured product |
$ | (56 | ) | $ | 9 | $ | (12 | ) | (59 | ) | ||||||
Other miscellaneous and purchased product |
1 | |||||||||||||||
Total |
$ | (58 | ) |
Three Months Ended March 31 | ||||||||||||||||
Sales Tonnes (thousands) |
Average Net Sales Price per Tonne |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Fertilizer |
388 | 577 | $ | 342 | $ | 370 | ||||||||||
Industrial and Feed |
921 | 1,052 | $ | 354 | $ | 330 | ||||||||||
1,309 | 1,629 | $ | 351 | $ | 344 |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 20 |
The most significant contributors to the change in total gross margin quarter over quarter were as follows (direction of arrows refers to impact on gross margin, while the symbol signifies a neutral impact):
Net Sales Prices | Sales Volumes | Cost of Goods Sold | ||
h Supply challenges in key exporting regions kept ammonia prices in North America elevated, offsetting lower prices for most other nitrogen products. |
i Sales volumes were affected by issues related to product availability caused by mechanical challenges at our Lima facility and curtailments in Trinidad related to natural gas supply.
i A delayed start to the spring planting season in North America led to weaker fertilizer demand, which constrained sales, especially for urea and nitrogen solutions. |
i Costs were higher due to an increase in losses on natural gas hedging derivatives.
Lower natural gas costs in the US were offset by a rise in Trinidad natural gas costs. |
Non-Financial Performance
Three Months Ended March 31 | ||||||||||||||
2015 | 2014 | % Change | ||||||||||||
Production |
N tonnes produced (thousands) |
792 | 833 | (5 | ) | |||||||||
Safety |
Total site recordable injury rate |
0.14 | 0.49 | (71 | ) | |||||||||
Total lost-time injury rate |
| 0.16 | (100 | ) | ||||||||||
Employee |
Percentage of senior staff positions filled internally |
| 100% | (100 | ) | |||||||||
Environmental |
Greenhouse gas emissions (CO2 equivalent tonnes/tonne of product) |
2.1 | 2.2 | (5 | ) | |||||||||
Environmental incidents |
2 | 1 | 100 |
The most significant contributors to the change in non-financial results quarter over quarter were as follows:
Safety |
There was one recordable injury and no lost-time injuries in the first three months of 2015 compared to three recordable injures and one lost-time injury in the same period in 2014. Combined with more hours worked in 2015, the total site recordable injury rate and total lost-time injury rate declined. |
Employee | In the first quarter of 2015, the one available senior staff position was not filled internally while both of the two available senior staff positions were filled internally in the same period in 2014. |
21 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Phosphate Performance
Financial Performance
Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne (1) | ||||||||||||||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||||||||||||
Manufactured product |
||||||||||||||||||||||||||||||||||||
Net sales |
||||||||||||||||||||||||||||||||||||
Fertilizer |
$ | 194 | $ | 210 | (8 | ) | 371 | 502 | (26 | ) | $ | 524 | $ | 417 | 26 | |||||||||||||||||||||
Feed and Industrial |
179 | 165 | 8 | 280 | 272 | 3 | $ | 640 | $ | 608 | 5 | |||||||||||||||||||||||||
373 | 375 | (1 | ) | 651 | 774 | (16 | ) | $ | 574 | $ | 484 | 19 | ||||||||||||||||||||||||
Cost of goods sold |
(317 | ) | (351 | ) | (10 | ) | $ | (487 | ) | $ | (453 | ) | 8 | |||||||||||||||||||||||
Gross margin |
56 | 24 | 133 | $ | 87 | $ | 31 | 181 | ||||||||||||||||||||||||||||
Other miscellaneous and purchased product gross margin (2) |
2 | 2 | | |||||||||||||||||||||||||||||||||
Gross Margin |
$ | 58 | $ | 26 | 123 | $ | 89 | $ | 34 | 162 |
(1) | Rounding differences may occur due to the use of whole dollars in per-tonne calculations. |
(2) | Comprised of net sales of $31 million (2014 $4 million) less cost of goods sold of $29 million (2014 $2 million). |
Phosphate gross margin variance was attributable to:
Three Months Ended March 31 2015 vs. 2014 |
||||||||||||||||
Change in Prices/Costs |
||||||||||||||||
Dollars (millions) | Change in Sales Volumes |
Net Sales |
Cost of Goods Sold |
Total | ||||||||||||
Manufactured product |
||||||||||||||||
Fertilizer |
$ | (13 | ) | $ | 40 | $ | 5 | $ | 32 | |||||||
Feed and Industrial |
2 | 11 | (13 | ) | | |||||||||||
Change in product mix |
(7 | ) | 6 | 1 | | |||||||||||
Total manufactured product |
$ | (18 | ) | $ | 57 | $ | (7 | ) | 32 | |||||||
Other miscellaneous and purchased product |
| |||||||||||||||
Total |
$ | 32 |
The most significant contributors to the change in total gross margin quarter over quarter were as follows (direction of arrows refers to impact on gross margin):
Net Sales Prices | Sales Volumes | Cost of Goods Sold | ||||||||||||
h |
Our first-quarter average realized price was above the same period in 2014 as a result of improved market fundamentals and a greater proportion of sales volumes coming from higher-netback feed, industrial and liquid fertilizer products. | i | While we experienced production constraints in the first quarter of 2015 and 2014, this years first-quarter also reflected the closure of Suwannee River capacity and a greater proportion of our phosphoric acid being directed to products with higher phosphate content. | h | Depreciation was lower due to accelerated depreciation in the first-quarter of 2014 related to fertilizer resulting from operational changes announced in late 2013.
| |||||||||
i | Sulfur costs were up 26 percent, increasing our cost of goods sold.
| |||||||||||||
i | Rock costs were higher as a result of certain mining conditions at White Springs.
|
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 22 |
Non-Financial Performance
Three Months Ended March 31 | ||||||||||||||
2015 | 2014 | % Change | ||||||||||||
Production |
P2O5 tonnes produced (thousands) |
366 | 369 | (1 | ) | |||||||||
P2O5 operating rate percentage |
62% | 62% | | |||||||||||
Safety |
Life-altering injuries |
1 | | n/m | ||||||||||
Total site recordable injury rate |
1.15 | 1.42 | (19 | ) | ||||||||||
Total lost-time injury rate |
0.14 | 0.16 | (13 | ) | ||||||||||
Employee |
Percentage of senior staff positions filled internally |
| 100% | (100 | ) | |||||||||
Environmental |
Environmental incidents |
2 | | n/m | ||||||||||
Water usage (m3 per tonne of product) |
27 | 30 | (10 | ) |
n/m = not meaningful
The most significant contributors to the change in non-financial results quarter over quarter were as follows:
Safety |
Sadly, a workplace accident resulted in the loss of an employee at our White Springs phosphate operation during the first quarter of 2015. The total site recordable injury rate and total lost-time injury rate decreased from 2014 due to more hours being worked as the number of recordable injuries and lost-time injures was unchanged. |
Employee | In the first quarter of 2015, the one available senior staff position was not filled internally while all of the six available positions were filled internally in the same period in 2014. |
23 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Other Expenses and Income
Three Months Ended March 31 | ||||||||||||||||
Dollars (millions), except percentage amounts | 2015 | 2014 | Change | % Change | ||||||||||||
Selling and administrative expenses |
$ | (60 | ) | $ | (68 | ) | $ | 8 | (12 | ) | ||||||
Provincial mining and other taxes |
(95 | ) | (54 | ) | (41 | ) | 76 | |||||||||
Share of earnings of equity-accounted investees |
36 | 33 | 3 | 9 | ||||||||||||
Dividend income |
| 69 | (69 | ) | (100 | ) | ||||||||||
Impairment of available-for-sale investment |
| (38 | ) | 38 | (100 | ) | ||||||||||
Other income |
11 | 24 | (13 | ) | (54 | ) | ||||||||||
Finance costs |
(49 | ) | (47 | ) | (2 | ) | 4 | |||||||||
Income taxes |
(140 | ) | (144 | ) | 4 | (3 | ) |
The most significant contributors to the change in other expenses and income quarter over quarter were as follows:
Provincial Mining and Other Taxes |
Provincial mining and other taxes were higher in the first quarter of 2015 than in the same period in 2014. This was due to higher potash production tax resulting from a weaker Canadian dollar and stronger potash prices, which increased revenues. In addition, deductible costs decreased due to the recently announced changes to potash taxation in the Province of Saskatchewan which deferred the timing of the annual allowable deduction for capital expenditures. | |||||||||
Dividend Income |
Dividend income was down due to the company receiving a special dividend of $69 million from ICL in the first quarter of 2014. No special dividends were received in the first quarter of 2015. | |||||||||
Available-for-Sale Investment |
A non-tax deductible impairment loss of $38 million was recorded in net income on our investment in Sinofert during the first quarter of 2014. No such losses were recognized in 2015. | |||||||||
Finance Costs |
||||||||||
Income Taxes |
The decrease in the actual effective tax rate including discrete items is described in Note 3 to the financial statements in this Form 10-Q. For the first three months of 2015, 67 percent of the effective tax rate on the current years ordinary earnings pertained to current income taxes (2014 68 percent) and 33 percent related to deferred income taxes (2014 32 percent). | |||||||||
Effective Tax Rates and Discrete Items Dollars (millions), except percentage amounts
|
||||||||||
Three Months Ended March 31 | ||||||||||
2015 | 2014 | |||||||||
Actual effective tax rate on ordinary earnings | 27% | 27% | ||||||||
Actual effective tax rate including discrete items | 27% | 30% | ||||||||
Discrete tax adjustments that impacted the rate | $ | (3) | $ | (2) |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 24 |
Other Non-Financial Information
Three Months Ended March 31 | ||||||||||||||||
Dollars (millions), except percentage amounts | 2015 | 2014 | Change | % Change | ||||||||||||
Taxes and royalties expense (1) |
242 | 170 | 72 | 42 |
(1) | Includes tax and royalty amounts on an accrual basis calculated as: current income tax expense less investment tax credits and realized excess tax benefit related to share-based compensation plus potash production tax, resource surcharge, royalties, municipal taxes and other miscellaneous taxes. |
The most significant contributors to the change in other non-financial information quarter over quarter were as follows:
Taxes and Royalties |
Taxes and royalties increased in the first quarter of 2015 compared to the same period in 2014 due to the increases in provincial mining and other taxes (described above) and current income taxes. The increase in current income taxes was primarily due to higher current income taxes in Canada as a result of increased potash earnings in 2015 compared to the same period in 2014. |
Financial Condition Review
Statement of Financial Position Analysis
The most significant contributors to the changes in our statements of financial position were as follows (direction of arrows refers to increase or decrease):
Assets | Liabilities | |
i Receivables decreased mainly due to lower trade accounts receivable and lower income taxes receivable (due to income taxes accrued during the quarter being applied against income tax receivables at December 31, 2014).
h Inventories increased mainly as a result of increased potash and nitrogen inventory volumes. |
i Short-term debt and current portion of long-term debt declined due to a decrease in our outstanding commercial paper.
h Long-term debt was higher as a result of the issuance of $500 million in senior notes in the first quarter of 2015.
i Payables and accrued charges were lower mainly due to lower trade payables and employee bonuses accrued at year-end being paid out during the quarter. |
Equity |
i Equity was mainly impacted by net income (discussed in more detail above) and dividends declared. |
As at March 31, 2015, $122 million (December 31, 2014 $127 million) of our cash and cash equivalents was held in certain foreign subsidiaries. There are no current plans to repatriate the funds at March 31, 2015 in a taxable manner.
25 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Liquidity and Capital Resources
Cash Requirements
Contractual Obligations and Other Commitments
Our contractual obligations and other commitments detailed on page 76 of our 2014 AIR summarize certain of our liquidity and capital resource requirements, excluding obligations that have original maturities of less than one year, planned (but not legally committed) capital expenditures or potential share repurchases. The issuance of $500 million of 3.00 percent senior notes due April 1, 2025 during the first quarter of 2015 increased our long-term debt obligations ($500 million) and total estimated interest payments on long-term debt obligations ($150 million) in the contractual obligations and other commitments table referenced above.
Capital Expenditures
Page 51 of our 2014 AIR outlines key potash construction projects and their expected total cost, as well as the impact of these projects on capacity expansion/debottlenecking and any expected remaining spending on each project still in progress. The most significant of these potash projects(1) on which funds are expected to be spent in 2015, excluding capitalized interest, are outlined in the table below:
CDN Dollars (billions) | 2015 Forecast | Total Forecast (2) | Started | Construction Completion (3) (Description) |
Forecasted Remaining Spending (after 2015) (2) |
|||||||||||||
New Brunswick (4) |
$ | 0.1 | $ | 2.2 | 2007 | 2014 (mine shaft and mill completed) | $ | 0.2 | ||||||||||
Rocanville, Saskatchewan |
$ | 0.2 | $ | 2.9 | 2008 | 2015 (mine shaft and mill) | $ | |
(1) | The expansion at each of these projects is discussed in the technical report for such project filed on SEDAR in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. |
(2) | Amounts are based on the most recent forecasts approved by the Board of Directors, and are subject to change based on project timelines and costs. |
(3) | Construction completion does not include ramp-up time. |
(4) | Remaining expenditures at New Brunswick relate to port and other site infrastructure required for ramp-up. |
In 2013, we began a brownfield expansion at our Lima facility which is expected to add approximately 100,000 tonnes of ammonia capacity and approximately 73,000 tonnes of urea capacity by the fourth quarter of 2015 at an estimated cost of approximately $210 million. We expect to spend approximately $70 million in 2015 related to this expansion.
We anticipate that all capital spending will be financed by internally generated cash flows supplemented, if and as necessary, by borrowing from existing financing sources.
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 26 |
Sources and Uses of Cash
The companys cash flows from operating, investing and financing activities are summarized in the following table:
Three Months Ended March 31 | ||||||||||||||||
Dollars (millions), except percentage amounts | 2015 | 2014 | Change | % Change | ||||||||||||
Cash provided by operating activities |
$ | 521 | $ | 539 | $ | (18 | ) | (3 | ) | |||||||
Cash used in investing activities |
(233 | ) | (226 | ) | (7 | ) | 3 | |||||||||
Cash used in financing activities |
(286 | ) | (408 | ) | 122 | (30 | ) | |||||||||
Increase (decrease) in cash and cash equivalents |
$ | 2 | $ | (95 | ) | $ | 97 | n/m |
n/m | = not meaningful |
The most significant contributors to the changes in cash flows quarter over quarter were as follows:
Cash Provided by Operating Activities | Cash provided by operating activities was impacted by:
Higher net income in 2015;
Cash inflows from receivables in the first quarter of 2015 compared to cash outflows in the first quarter of 2014; and
Cash outflows from inventories and payables and accrued charges in the first quarter of 2015 compared to cash inflows in the first quarter of 2014. | |
Cash Used in Investing Activities | Cash used in investing activities was primarily for additions to property, plant and equipment in both periods. | |
Cash Used in Financing Activities | Cash used in financing activities decreased due to share repurchases in the first quarter of 2014 not recurring in 2015 partially offset by proceeds from senior notes being lower in 2015 compared to 2014. |
27 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
We believe that internally generated cash flow, supplemented if necessary by available borrowings under our existing financing sources, will be sufficient to meet our anticipated capital expenditures and other cash requirements for at least the next 12 months, exclusive of any possible acquisitions. At this time, we do not reasonably expect any presently known trend or uncertainty to affect our ability to access our historical sources of liquidity.
|
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 28 |
Quarterly Financial Highlights
Dollars (millions), except per-share amounts |
March 31, 2015 |
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
September 30, 2013 |
June 30, 2013 |
||||||||||||||||||||||||
Sales |
$ | 1,665 | $ | 1,902 | $ | 1,641 | $ | 1,892 | $ | 1,680 | $ | 1,541 | $ | 1,520 | $ | 2,144 | ||||||||||||||||
Gross margin |
667 | 746 | 589 | 747 | 565 | 460 | 484 | 979 | ||||||||||||||||||||||||
Net income |
370 | 407 | 317 | 472 | 340 | 230 | 356 | 643 | ||||||||||||||||||||||||
Net income per share basic (1) |
0.45 | 0.49 | 0.38 | 0.56 | 0.40 | 0.27 | 0.41 | 0.74 | ||||||||||||||||||||||||
Net income per share diluted (1) |
0.44 | 0.49 | 0.38 | 0.56 | 0.40 | 0.26 | 0.41 | 0.73 |
(1) | Net income per share for each quarter has been computed based on the weighted average number of shares issued and outstanding during the respective quarter, including the dilutive number of shares assumed for the diluted earnings per share computation; therefore, as the number of shares varies each period, quarterly amounts may not add to the annual total. |
Certain aspects of our business can be impacted by seasonal factors. Fertilizers are sold primarily for spring and fall application in both Northern and Southern Hemispheres. However, planting conditions and the timing of customer purchases will vary each year and fertilizer sales can be expected to shift from one quarter to another. Most feed and industrial sales are by contract and are more evenly distributed throughout the year. |
29 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 30 |
31 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 32 |
Part II. Other Information
Item 1. Legal Proceedings
For a description of certain other legal and environmental proceedings, see Note 11 to the unaudited interim condensed consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q.
Item 6. Exhibits
(a) Exhibits
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) |
||||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) |
||||||||
3(a) | Articles of Continuance of the registrant dated May 15, 2002. | 10-Q | 6/30/2002 | |||||||||
3(b) | General By-Law of the registrant, as amended, effective April 27, 2015. | 8-K | 4/27/2015 | 3 | (a) | |||||||
4(a) | Indenture dated as of February 27, 2003, between the registrant and U.S. Bank National Association, as successor to The Bank of Nova Scotia Trust Company of New York. | 10-K | 12/31/2002 | 4 | (c) | |||||||
4(b) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 5.875% Notes due December 1, 2036. | 8-K | 11/30/2006 | 4 | (a) | |||||||
4(c) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 6.50% Notes due May 15, 2019. | 8-K | 5/1/2009 | 4 | (b) | |||||||
4(d) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.75% Notes due September 30, 2015. | 8-K | 9/25/2009 | 4 | (a) | |||||||
4(e) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 4.875% Notes due March 30, 2020. | 8-K | 9/25/2009 | 4 | (b) | |||||||
4(f) | Form of Note relating to the registrants offering of $750,000,000 principal amount of 3.625% Notes due March 15, 2024. | 8-K | 3/7/2014 | 4 | (a) | |||||||
4(g) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.000% Notes due April 1, 2025. | 8-K | 3/26/2015 | 4 | (a) | |||||||
4(h) | Revolving Term Credit Facility Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated December 11, 2009. | 8-K | 12/15/2009 | 4 | (a) | |||||||
4(i) | Revolving Term Credit Facility First Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated September 23, 2011. | 8-K | 9/26/2011 | 4 | (a) | |||||||
4(j) | Revolving Term Credit Facility Second Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated as of May 24, 2013. | 8-K | 5/28/2013 | 4 | (a) |
33 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) |
||||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) |
||||||||
4(k) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.25% Notes due December 1, 2017. | 8-K | 11/29/2010 | 4 | (a) | |||||||
4(l) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 5.625% Notes due December 1, 2040. | 8-K | 11/29/2010 | 4 | (b) | |||||||
4(m) | Agreement of Resignation, Appointment and Acceptance, dated as of June 25, 2013, by and among the registrant, The Bank of Nova Scotia Trust Company of New York and U.S. Bank National Association. | 8-K | 6/27/2013 | 4 | (a) | |||||||
4(n) | Revolving Term Credit Facility Third Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated July 8, 2014. | 10-Q | 07/29/2014 | 4 | (m) |
The registrant hereby undertakes to file with the Securities and Exchange Commission, upon request, copies of any constituent instruments defining the rights of holders of long-term debt of the registrant or its subsidiaries that have not been filed herewith because the amounts represented thereby are less than 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(a) | Consolidated, Restated and Amended Canpotex Shareholders Agreement, Eighth Memorandum of Agreement dated January 1, 2014 between Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd., the registrant and Canpotex Limited. | 10-K | 12/31/2013 | |||||||
10(b) | Consolidated, Restated and Amended Producer Agreement, Eighth Memorandum of Agreement dated January 1, 2014 between Canpotex Limited, Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd. and the registrant. | 10-K | 12/31/2013 | |||||||
10(c) | Short-Term Incentive Plan of the registrant effective January 1, 2000, as amended. | 8-K | 3/13/2012 | 10(a) | ||||||
10(d) | Resolution and Forms of Agreement for Supplemental Executive Retirement Income Plan, for officers and key employees of the registrant. | 10-K | 12/31/1995 | 10(o) | ||||||
10(e) | Amending Resolution and revised forms of agreement regarding Supplemental Retirement Income Plan of the registrant. | 10-Q | 6/30/1996 | 10(x) | ||||||
10(f) | Amended and restated Supplemental Executive Retirement Income Plan of the registrant and text of amendment to existing supplemental income plan agreements. | 10-Q | 9/30/2000 | 10(mm) | ||||||
10(g) | Amendment, dated February 23, 2009, to the amended and restated Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(r) | ||||||
10(h) | Amendment, dated December 29, 2010, to the amended and restated Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(r) | ||||||
10(i) | Form of Letter of amendment to existing supplemental income plan agreements of the registrant. | 10-K | 12/31/2002 | 10(cc) | ||||||
10(j) | Amended and restated agreement dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2006 | 10(s) | ||||||
10(k) | Amendment, dated December 24, 2008, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(u) | ||||||
10(l) | Amendment, dated February 23, 2009, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(v) | ||||||
10(m) | Amendment, dated February 23, 2009, to the amended and restated agreement, dated August 2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(w) |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 34 |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(n) | Amendment, dated December 29, 2010, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(y) | ||||||
10(o) | Amendment, dated December 29, 2010, to the amended and restated agreement, dated August 2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(z) | ||||||
10(p) | Supplemental Retirement Agreement dated December 24, 2008, between the registrant and Stephen F. Dowdle. | 10-K | 12/31/2011 | 10(bb) | ||||||
10(q) | Supplemental Retirement Benefits Plan for U.S. Executives dated effective January 1, 1999. | 10-Q | 6/30/2002 | 10(aa) | ||||||
10(r) | Amendment No. 1, dated December 24, 2008, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2008 | 10(z) | ||||||
10(s) | Amendment No. 2, dated February 23, 2009, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2008 | 10(aa) | ||||||
10(t) | Amendment No. 3, dated December 2, 2013, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2013 | |||||||
10(u) | Amendment No. 4, dated February 25, 2014 to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2013 | |||||||
10(v) | Forms of Agreement dated December 30, 1994, between the registrant and certain officers of the registrant. | 10-K | 12/31/1995 | 10(p) | ||||||
10(w) | Amendment, dated December 31, 2010, to the Agreement, dated December 30, 1994 between the registrant and William J. Doyle. | 10-K | 12/31/2010 | 10(ff) | ||||||
10(x) | Form of Agreement of Indemnification dated August 8, 1995, between the registrant and certain officers and directors of the registrant. | 10-K | 12/31/1995 | 10(q) | ||||||
10(y) | Resolution and Form of Agreement of Indemnification dated January 24, 2001. | 10-K | 12/31/2000 | 10(ii) | ||||||
10(z) | Resolution and Form of Agreement of Indemnification dated July 21, 2004. | 10-Q | 6/30/2004 | 10(ii) | ||||||
10(aa) | Chief Executive Officer Medical and Dental Benefits. | 10-K | 12/31/2010 | 10(jj) | ||||||
10(bb) | The Potash Corporation of Saskatchewan Inc. Deferred Share Unit Plan for Non-Employee Directors. | 10-Q | 3/31/2012 | 10(ll) | ||||||
10(cc) | Potash Corporation of Saskatchewan Inc. 2005 Performance Option Plan and Form of Option Agreement, as amended. | 10-Q | 3/31/2005 | 10(nn) | ||||||
10(dd) | Potash Corporation of Saskatchewan Inc. 2006 Performance Option Plan and Form of Option Agreement, as amended. | 10-Q | 3/31/2006 | |||||||
10(ee) | Potash Corporation of Saskatchewan Inc. 2007 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2007 | |||||||
10(ff) | Potash Corporation of Saskatchewan Inc. 2008 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2008 | |||||||
10(gg) | Potash Corporation of Saskatchewan Inc. 2009 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2009 | 10(mm) | ||||||
10(hh) | Potash Corporation of Saskatchewan Inc. 2010 Performance Option Plan and Form of Option Agreement. | 8-K | 5/7/2010 | 10.1 | ||||||
10(ii) | Potash Corporation of Saskatchewan Inc. 2011 Performance Option Plan and Form of Option Agreement. | 8-K | 5/13/2011 | 10(a) | ||||||
10(jj) | Potash Corporation of Saskatchewan Inc. 2012 Performance Option Plan and Form of Option Agreement. | 8-K | 5/18/2012 | 10(a) | ||||||
10(kk) | Potash Corporation of Saskatchewan Inc. 2013 Performance Option Plan and Form of Option Agreement. | 8-K | 5/17/2013 | 10(a) | ||||||
10(ll) | Potash Corporation of Saskatchewan Inc. 2014 Performance Option Plan and Form of Option Agreement. | 8-K | 5/16/2014 | 10(a) |
35 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(mm) | Medium-Term Incentive Plan of the registrant effective January 1, 2012. | 10-K | 12/31/2011 | 10(uu) | ||||||
10(nn) | Executive Employment Agreement, dated July 1, 2014, between the registrant and Jochen E. Tilk. | 10-Q | 9/30/2014 | |||||||
10(oo) | PCS Supplemental Executive Retirement Plan for Canadian Executives. | 10-K | 12/31/2014 | |||||||
10(pp) | CEO Multi-year Incentive Plan. | 10-K | 12/31/2014 | |||||||
31(a) | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
31(b) | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
32 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
95 | Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. |
PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q | 36 |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
POTASH CORPORATION OF SASKATCHEWAN INC. | ||||
May 5, 2015 | By: | /s/ Joseph Podwika | ||
Joseph Podwika | ||||
Senior Vice President, General Counsel and Secretary | ||||
May 5, 2015 | By: | /s/ Wayne R. Brownlee | ||
Wayne R. Brownlee | ||||
Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) |
37 | PotashCorp 2015 First Quarter Quarterly Report on Form 10-Q |
EXHIBIT INDEX
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) |
||||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) |
||||||||
3(a) | Articles of Continuance of the registrant dated May 15, 2002. | 10-Q | 6/30/2002 | |||||||||
3(b) | General By-Law of the registrant, as amended, effective April 27, 2015. | 8-K | 4/27/2015 | 3 | (a) | |||||||
4(a) | Indenture dated as of February 27, 2003, between the registrant and U.S. Bank National Association, as successor to The Bank of Nova Scotia Trust Company of New York. | 10-K | 12/31/2002 | 4 | (c) | |||||||
4(b) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 5.875% Notes due December 1, 2036. | 8-K | 11/30/2006 | 4 | (a) | |||||||
4(c) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 6.50% Notes due May 15, 2019. | 8-K | 5/1/2009 | 4 | (b) | |||||||
4(d) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.75% Notes due September 30, 2015. | 8-K | 9/25/2009 | 4 | (a) | |||||||
4(e) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 4.875% Notes due March 30, 2020. | 8-K | 9/25/2009 | 4 | (b) | |||||||
4(f) | Form of Note relating to the registrants offering of $750,000,000 principal amount of 3.625% Notes due March 15, 2024. | 8-K | 3/7/2014 | 4 | (a) | |||||||
4(g) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.000% Notes due April 1, 2025. | 8-K | 3/26/2015 | 4 | (a) | |||||||
4(h) | Revolving Term Credit Facility Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated December 11, 2009. | 8-K | 12/15/2009 | 4 | (a) | |||||||
4(i) | Revolving Term Credit Facility First Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated September 23, 2011. | 8-K | 9/26/2011 | 4 | (a) | |||||||
4(j) | Revolving Term Credit Facility Second Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated as of May 24, 2013. | 8-K | 5/28/2013 | 4 | (a) |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) |
||||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) |
||||||||
4(k) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 3.25% Notes due December 1, 2017. | 8-K | 11/29/2010 | 4 | (a) | |||||||
4(l) | Form of Note relating to the registrants offering of $500,000,000 principal amount of 5.625% Notes due December 1, 2040. | 8-K | 11/29/2010 | 4 | (b) | |||||||
4(m) | Agreement of Resignation, Appointment and Acceptance, dated as of June 25, 2013, by and among the registrant, The Bank of Nova Scotia Trust Company of New York and U.S. Bank National Association. | 8-K | 6/27/2013 | 4 | (a) | |||||||
4(n) | Revolving Term Credit Facility Third Amending Agreement between the Bank of Nova Scotia and other financial institutions and the registrant dated July 8, 2014. | 10-Q | 07/29/2014 | 4 | (m) |
The registrant hereby undertakes to file with the Securities and Exchange Commission, upon request, copies of any constituent instruments defining the rights of holders of long-term debt of the registrant or its subsidiaries that have not been filed herewith because the amounts represented thereby are less than 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(a) | Consolidated, Restated and Amended Canpotex Shareholders Agreement, Eighth Memorandum of Agreement dated January 1, 2014 between Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd., the registrant and Canpotex Limited. | 10-K | 12/31/2013 | |||||||
10(b) | Consolidated, Restated and Amended Producer Agreement, Eighth Memorandum of Agreement dated January 1, 2014 between Canpotex Limited, Agrium Inc., Mosaic Canada Crop Nutrition, LP, by its general partner, 4379934 Canada Ltd. and the registrant. | 10-K | 12/31/2013 | |||||||
10(c) | Short-Term Incentive Plan of the registrant effective January 1, 2000, as amended. | 8-K | 3/13/2012 | 10(a) | ||||||
10(d) | Resolution and Forms of Agreement for Supplemental Executive Retirement Income Plan, for officers and key employees of the registrant. | 10-K | 12/31/1995 | 10(o) | ||||||
10(e) | Amending Resolution and revised forms of agreement regarding Supplemental Retirement Income Plan of the registrant. | 10-Q | 6/30/1996 | 10(x) | ||||||
10(f) | Amended and restated Supplemental Executive Retirement Income Plan of the registrant and text of amendment to existing supplemental income plan agreements. | 10-Q | 9/30/2000 | 10(mm) | ||||||
10(g) | Amendment, dated February 23, 2009, to the amended and restated Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(r) | ||||||
10(h) | Amendment, dated December 29, 2010, to the amended and restated Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(r) | ||||||
10(i) | Form of Letter of amendment to existing supplemental income plan agreements of the registrant. | 10-K | 12/31/2002 | 10(cc) | ||||||
10(j) | Amended and restated agreement dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2006 | 10(s) | ||||||
10(k) | Amendment, dated December 24, 2008, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(u) | ||||||
10(l) | Amendment, dated February 23, 2009, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(v) | ||||||
10(m) | Amendment, dated February 23, 2009, to the amended and restated agreement, dated August 2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2008 | 10(w) |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(n) | Amendment, dated December 29, 2010, to the amended and restated agreement, dated February 20, 2007, between the registrant and William J. Doyle concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(y) | ||||||
10(o) | Amendment, dated December 29, 2010, to the amended and restated agreement, dated August 2, 1996, between the registrant and Wayne R. Brownlee concerning the Supplemental Executive Retirement Income Plan. | 10-K | 12/31/2010 | 10(z) | ||||||
10(p) | Supplemental Retirement Agreement dated December 24, 2008, between the registrant and Stephen F. Dowdle. | 10-K | 12/31/2011 | 10(bb) | ||||||
10(q) | Supplemental Retirement Benefits Plan for U.S. Executives dated effective January 1, 1999. | 10-Q | 6/30/2002 | 10(aa) | ||||||
10(r) | Amendment No. 1, dated December 24, 2008, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2008 | 10(z) | ||||||
10(s) | Amendment No. 2, dated February 23, 2009, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2008 | 10(aa) | ||||||
10(t) | Amendment No. 3, dated December 2, 2013, to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2013 | |||||||
10(u) | Amendment No. 4, dated February 25, 2014 to the Supplemental Retirement Plan for U.S. Executives. | 10-K | 12/31/2013 | |||||||
10(v) | Forms of Agreement dated December 30, 1994, between the registrant and certain officers of the registrant. | 10-K | 12/31/1995 | 10(p) | ||||||
10(w) | Amendment, dated December 31, 2010, to the Agreement, dated December 30, 1994 between the registrant and William J. Doyle. | 10-K | 12/31/2010 | 10(ff) | ||||||
10(x) | Form of Agreement of Indemnification dated August 8, 1995, between the registrant and certain officers and directors of the registrant. | 10-K | 12/31/1995 | 10(q) | ||||||
10(y) | Resolution and Form of Agreement of Indemnification dated January 24, 2001. | 10-K | 12/31/2000 | 10(ii) | ||||||
10(z) | Resolution and Form of Agreement of Indemnification dated July 21, 2004. | 10-Q | 6/30/2004 | 10(ii) | ||||||
10(aa) | Chief Executive Officer Medical and Dental Benefits. | 10-K | 12/31/2010 | 10(jj) | ||||||
10(bb) | The Potash Corporation of Saskatchewan Inc. Deferred Share Unit Plan for Non-Employee Directors. | 10-Q | 3/31/2012 | 10(ll) | ||||||
10(cc) | Potash Corporation of Saskatchewan Inc. 2005 Performance Option Plan and Form of Option Agreement, as amended. | 10-Q | 3/31/2005 | 10(nn) | ||||||
10(dd) | Potash Corporation of Saskatchewan Inc. 2006 Performance Option Plan and Form of Option Agreement, as amended. | 10-Q | 3/31/2006 | |||||||
10(ee) | Potash Corporation of Saskatchewan Inc. 2007 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2007 | |||||||
10(ff) | Potash Corporation of Saskatchewan Inc. 2008 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2008 | |||||||
10(gg) | Potash Corporation of Saskatchewan Inc. 2009 Performance Option Plan and Form of Option Agreement. | 10-Q | 3/31/2009 | 10(mm) | ||||||
10(hh) | Potash Corporation of Saskatchewan Inc. 2010 Performance Option Plan and Form of Option Agreement. | 8-K | 5/7/2010 | 10.1 | ||||||
10(ii) | Potash Corporation of Saskatchewan Inc. 2011 Performance Option Plan and Form of Option Agreement. | 8-K | 5/13/2011 | 10(a) | ||||||
10(jj) | Potash Corporation of Saskatchewan Inc. 2012 Performance Option Plan and Form of Option Agreement. | 8-K | 5/18/2012 | 10(a) | ||||||
10(kk) | Potash Corporation of Saskatchewan Inc. 2013 Performance Option Plan and Form of Option Agreement. | 8-K | 5/17/2013 | 10(a) | ||||||
10(ll) | Potash Corporation of Saskatchewan Inc. 2014 Performance Option Plan and Form of Option Agreement. | 8-K | 5/16/2014 | 10(a) |
Incorporated By Reference (File No. 001-10351, unless otherwise indicated) | ||||||||||
Exhibit Number |
Description of Document | Form | Filing Date/Period End Date |
Exhibit Number (if different) | ||||||
10(mm) | Medium-Term Incentive Plan of the registrant effective January 1, 2012. | 10-K | 12/31/2011 | 10(uu) | ||||||
10(nn) | Executive Employment Agreement, dated July 1, 2014, between the registrant and Jochen E. Tilk. | 10-Q | 9/30/2014 | |||||||
10(oo) | PCS Supplemental Executive Retirement Plan for Canadian Executives. | 10-K | 12/31/2014 | |||||||
10(pp) | CEO Multi-year Incentive Plan. | 10-K | 12/31/2014 | |||||||
31(a) | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
31(b) | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
32 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
95 | Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. |