DELIVERING TODAY WHILE MAPPING OUR FUTURE
In current market conditions, we are generating substantial free cash flow – and we expect to continue to do so. We carefully weigh the choices for our cash, evaluating the best return on any investment that matches our Potash First strategy. Our goal is to have cash flow return materially exceed cost of capital.
We have always exercised great discipline in capital allocation so much of our cash flow is, and will be, invested in expanding our own potash capacity. At the same time, we seek to increase our offshore potash investments and explore other merger and acquisition opportunities that fit the Potash First strategy.
We also consider share repurchase and increased dividends as effective ways to maximize shareholder value over the long term. We used our strong cash flow to repurchase 28.5 million shares in 2005, confident that our potash assets are the best in the world. At an average cost of almost $30 per share, this added significant shareholder value. We announced another repurchase in January 2008 of up to 15.8 million shares, viewing this as an opportunity to add further value. In conjunction with a three-for-one stock split in May 2007, we doubled our quarterly dividend.
CAPABILITY TO DELIVER
To ensure we can deliver on our value proposition and support our vision and strategy, we rely on several key assets:
- An experienced management team that takes a broad view of our business, develops long-term strategies and commits the company to them
- A solid capital structure that enables us to take advantage of opportunities and withstand normal short-term business fluctuations
- Substantial cash flow, which is both the result and the cause of our success
- A productive workforce, motivated sales teams and coordinated transportation network.
