8-K
Mosaic Co (MOS)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2020
THE MOSAIC COMPANY
(Exact name of registrant as specified in its charter)
| Delaware | 001-32327 | 20-1026454 | ||||
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| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) | 101 East Kennedy Boulevard | 33602 | ||
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| Suite 2500 | ||||||
| Tampa, | Florida | |||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (800) 918-8270
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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| Securities registered pursuant to Section 12(b) of the Act | ||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value 0.01 per share | MOS | New York Stock Exchange |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. | ||
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| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
All values are in US Dollars.
| Item 2.06. | Material Impairments. |
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On January 28, 2020, The Mosaic Company (“Mosaic,” and Mosaic and its subsidiaries, individually or in any combination, “we,” “us” or “our”) announced that it intends to keep its Colonsay potash mine idled for the foreseeable future (the "Colonsay Idling") due to weak demand. The Company currently estimates that it will incur a pretax noncash charge to be recorded in the fourth fiscal quarter of 2019 (the "Fourth Quarter") for the Colonsay Idling of up to $530 million (primarily non-cash charges for asset write-offs, and inclusive of cash severance charges of $15 million to $20 million).
The weak demand in North America has also impacted Mosaic's Phosphates segment and the annual goodwill impairment analysis. The Company currently estimates that it will incur a notable non-cash charge to be recorded in the Fourth Quarter of up to $590 million of Phosphates segment goodwill ("Phosphates Goodwill Impairment").
Furnished herewith as Exhibit 99.1 and incorporated by reference herein is the text of Mosaic's announcement regarding the Colonsay Idling and the Phosphates Goodwill Impairment, as presented in a press release issued on January 28, 2020.
| Item 9.01. | Financial Statements and Exhibits. |
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(d) Exhibits.
| Exhibit No. | Description |
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| 99.1 | Press release, dated January 28, 2020, of The Mosaic Company |
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This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the anticipated benefits or strategic plans and other statements about anticipated future financial, production and operating performance. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: difficulties with realization of the benefits of our strategic plans; actual costs of various items differing from management’s current estimates, price and demand volatility for our Potash and Phosphate products, other changes in market conditions, changes in weather conditions; changes in farmers’ planting patterns; accidents and disruptions, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic's international operations, changes in government policy, changes in environmental and other governmental regulation, as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
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 hereunto duly authorized.
| THE MOSAIC COMPANY | ||
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| Date: January 28, 2020 | By: | /s/ Mark J. Isaacson |
| Name: | Mark J. Isaacson | |
| Title: | Senior Vice President, General Counsel | |
| and Corporate Secretary |
Exhibit
| The Mosaic Company<br><br>www.mosaicco.com |
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FOR IMMEDIATE RELEASE
| Media<br><br>Ben Pratt<br><br>The Mosaic Company<br><br>813-775-4206<br><br>ben.pratt@mosaicco.com | Investors<br><br>Laura Gagnon<br><br>The Mosaic Company<br><br>813-775-4214<br><br>investor@mosaicco.com |
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MOSAIC ANNOUNCES INDEFINITE IDLING OF THE COLONSAY MINE AND RELATED CHARGES IN THE FOURTH QUARTER OF 2019
THE COMPANY TO IMPAIR PHOSPHATES SEGMENT GOODWILL
TAMPA, FLORIDA - January 28, 2020 - The Mosaic Company (NYSE: MOS) today announced that it intends to keep its Colonsay potash mine idled for the foreseeable future. The mine will be placed in care and maintenance mode, employing minimal staff and allowing for resumption of operations when needed to meet customers’ needs.
“The ramping up of our Esterhazy K3 production combined with continued weak demand in North America has left Mosaic’s potash business with excess inventory and production capacity. This decision will regrettably impact employees, but allows us to optimize our Canadian production assets and improve our cost position in a competitive market,” said President and CEO Joc O’Rourke. “In 2020, we continue to expect robust global fertilizer demand and strong business conditions.”
The idling will result in a fourth quarter 2019 pretax charge of approximately $530 million, primarily noncash charges for asset write-offs, and inclusive of cash severance charges of $15 million to $20 million. The write-off is principally the carrying value of the 2013 expansion project, which increased Colonsay’s operating capacity to 2.1 million tonnes. Colonsay has been operating with a modified 1.5 million tonnes capacity since 2016, and the company does not expect to use the expansion capacity for the foreseeable future.
These same market conditions that impacted potash, primarily a third consecutive weak application season in North America, also impacted Phosphates. Average realized phosphate price continued to decline in the fourth quarter of 2019, impacting the annual goodwill impairment analysis and leading the company to expect a write-off of up to $
590 million of Phosphates segment goodwill. The company plans to treat charges related to the idling or changes in goodwill balances as notable items.
About The Mosaic Company
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single-source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the anticipated benefits or strategic plans and other statements about anticipated future financial, production and operating performance. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: difficulties with realization of the benefits of our strategic plans; actual costs of various items differing from management’s current estimates, price and demand volatility for our Potash and Phosphate products, other changes in market conditions, changes in weather conditions; changes in farmers’ planting patterns; accidents and disruptions, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic's international operations, changes in government policy, changes in environmental and other governmental regulation, as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.