Real Client Managed Portfolio

Presented on October 18th, 2011 By:

• Ran Mu • Frank Damian • Jionghan Dai • Joseph Kim • Han Yang

RCMP’s Mosaic Holdings

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•12/18/2009 – Bought 200 Shares at $55.00 for total price of $11,000.00

•10/17/2011 – Closing Price at $54.49

•Unrealized Loss of -$82.00 (-1.00%)

Overview of Presentation

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• Industry Analysis • Mosaic Company

• Overview of Business• Business Risks • Recent Developments

• Competitor Analysis• History of Holdings• Multiples Analysis • DCF Model • Recommendation

Agricultural Chemical Industry

Simple products

Capital intensive

Highly concentrated

Strategy

Big company: economies of scale

Small company: special chemicals for local markets

4Sources: First Research

Products

Fertilizers

Herbicides

Insecticides

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Nitrogen

Potash

Phosphate

Sources: PotashCorp

Industry & Macro Factors

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Fertilizers CropsChemical

raw materials

Population

Industry Factors—Raw Materials

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FertilizersChemical raw materials

Crops Population

Sulfur Ammonia

•Sources: Bloomberg

Industry Factors—Crops Price

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Fertilizers CropsChemical raw

materials Population

Oil Seeds Grain

Average annual growth rate: 1.97% Average annual growth rate: 5.31%

•Sources: Bloomberg

Macroeconomic Factors—Population

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Fertilizers CropsChemical raw

materials Population

Average annual growth rate: 1.60%

•Sources: Bloomberg

Overview of Mosaic’s Business

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Source: Form 10-K, Mosaic Co., FY 2011, Pg 1

Two Primary Segments

Potash Phosphate

Overview of Mosaic’s Business - Phosphate

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Source: Form 10-K, Mosaic Co., FY 2011, Pg 1-10

Overview of Mosaic’s Business – Potash

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Source: Form 10-K, Mosaic Co., FY 2011, Pg 1-10

FacilityAnnual

operational capacity

Production Reserves Estimated Closing Year

Future mining

2011 2010 2009 2011 ReservesFour Corners 6.5 6.7 5.6 5.1 53.6 2020 Ona 245.5South Fort Meade 6 1.8 4.3 5.1 53.8 2025 Desoto 148Hookers Prairie 2 1.8 1.8 1.6 5.7 2014

Wingate 1.4 1 1.1 0.9 36.5 2048Total 15.9 11.3 12.8 12.7 149.6

Overview of Mosaic’s Business – Mines & Reserves

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Potash Mines

Facility Annual operational capacity Production Reserves Estimated close year

2011 2010 2009 5/31/2011Belle Plaine 2.3 2.2 1.5 1.8 792 2443Colonsay 1.6 1.1 0.8 1 239 2258Esterhazy 4.8 3 1.9 2.2 875 2381Carlsbad 1.5 1 1 0.8 260 2290Hersey 1.6 0.1 - 0.1 41 2421

Total 11.8 7.4 5.2 5.9 2207

Phosphate Mines

Economies of Scale & Global Presence

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Source: Mosaic Investment Fact Sheet, Mosaic Co., October 2011, p. 2

• Largest integrated phosphate producer in the world

• Production (Fiscal 2011)• 57% N. American • 13% Global

•International sales offices and distribution centers

•Presence in Brazil, China and India•Largest buyers with growing demand

Potash Phosphate

• Third largest producer of Potash globally

• Production (Fiscal 2011) • 38% N. American • 12% Global

Source: Form 10-K, Mosaic Co., FY 2011, Pg 1

Vertical Integration:

Business Risk

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Outcome????

Recent News

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Source: Mosaic News Release, Mosaic Co., September 1st, 2011 Source: Mosaic News Release, Mosaic Co., October 12th, 2011 Source: Mosaic News Release, Mosaic Co., October 17th, 2011

Recent News – The Cargill Transactions

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Source: Mosaic News Release, Mosaic Co., September 23rd, 2011

Competitor Analysis

• Crop nutrition companies compete primarily on the basis of delivered price

• Other factors

• Product quality

• Cost and availability of raw materials

• Customer service

• Plant efficiency

• Availability of product

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World’s 10 Largest Fertilizer Companies

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Competitor Analysis

• Foreign competitors may have cost advantages

• Cheaper raw materials

• Less stringent regulatory requirements

• Owned by government

• Main competitors

• Potash Corp. (POT)

• Agrium Inc. (AGU)

• CF Industries Holdings, Inc. (CF)

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Potash Corp. (POT)

• World’s largest fertilizer company by capacity

• One-fifth of global potash capacity

• Potash is the core of the business

• hold strategic investments in other potash-related businesses in South America, the Middle East and Asia

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Agrium Inc. (AGU)

• Business Growth

• Capacity expansion

• Acquisition – acquired AWB, one of Australia’s largest agricultural retailer and grain commodity companies

• Business operation

• Retail business unit

• Wholesale business unit

• Advanced Technologies business unit

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CF Industries Holdings, Inc. (CF)

• Acquired Terra Industries Inc. in Apr. 2010

• Became the largest nitrogen producer in North America

• Two business segments

• Nitrogen – 80%

• Phosphate – 20%

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Company Performance

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Market Capital P/E P/S P/BV

MOS 25.51 9.33 2.3 2.04

POT 43.39 18.47 5.69 5.36

AGU 11.98 11.02 0.87 1.91

CF 10.8 10.66 2.06 2.17

Revenue EBIT Net Income

MOS 10,832.8 2,982.5 27.5% 2,742.9 25.3%

POT 7,402.0 3,151.0 42.6% 2,454.2 33.2%

AGU 13,393.0 1,536.0 11.5% 1,087.0 8.1%

CF 5,130.4 1,918.0 37.4% 1,017.9 19.8%

Date: Oct. 14, 2011

Company Performance

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Cargill Transaction

Multiple Valuation

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<Change in Price of Product & Sales and Net Income>

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<Phosphate> 2006 2007 2008 2009 2010 2011 2012.1Q Avg.

Change in Sales Vol. 14.52% -11.82% 2.04% -1.49% 23.30% 8.39% 　 5.83%

Change in Price 10% 8% 94% 42% -55% 50% 17% 24%

<Potash> 2006 2007 2008 2009 2010 2011 2012.1Q Avg.

Change in Sales Vol. 19% 22% 8% -41% 10% 36% 　 9%

Change in Price 16% 0% 57% 131% -32% 2% 24% 28%

　 2006 2007 2008 2009 2010 2011 Avg.

Revenue Growth 33.95% 3.44% 78.10% 29.86% -36.15% 45.74% 25.82%

- Growth has been generated by the change in price, not by increase in sales- Mosaic doesn’t have control on the price -> increases risk of investment- Increase in Price will be stabilized in future -> less growth opportunity- Due to the increase in demand, Stable Increase in Sales is expected

Multiple Valuation

<Business Factors>

<Other Factors>- Government Risks- Owner Risks

Multiple Valuation

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Multiple Valuation

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　 Mosaic Potash Agrium CF Industries

Market Cap. 25.51 43.39 11.98 10.8

Current P/E 9.33x 18.5x 11x 10.7x

Average P/E(4yrs) 20.86x 20.85x 15.27x 15.05x

Average ROE(4yrs) 25.80% 32.00% 18.76% 23.32%

Profit Margin 25.30% 33.20% 8.10% 19.80%

<2012 Earning Forecast = $2473 Million, EPS = $5>-Based on 1st quarter’s numbers, the price increase in product will continue-Sales Volume is expected to increase by 5%-Slightly lower margin is expected due to the closed mine and increase in cost of raw materials

<Multiple Analysis>-Owner Risk is a big discount factor for investors-Mosaic is facing 32.57% discount compared to competitors-Target PE ratio = 14.07-Target Price = 14.07 * 4.71 = $66.21 per share

Recommendation - HOLD

• DCF Valuation = $55.45

• Multiples Valuation = $66.21

• 50% Weight attributed to each

• Final Estimated Share Price = $60.83

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•Transfer of Ownership – Cargill Transaction•Uncertainty with South Fort Meade Mine •Recovery of Global Economy and Rising Commodity Prices

Closely watch any developments with the following: