To print this page, click here. To return to the regular view of this page, click here.
What are Keywords?
Print
Text Size
NormalMediumLarge
My Shortcuts  What is this?
Add | View

Key Earnings Sensitivities

A number of factors affect the earnings of the company's three nutrient segments. The table below shows the key factors and their approximate effect on EPS based on the assumptions used in the 2008 earnings guidance provided January 24, 2008 of $6.25 to $7.25 per share.

Input Cost Sensitivities Effect on EPS
NYMEX gas price
increases by
$1/MMBtu		 Nitrogen
Potash		 + 0.03
– 0.02
Sulfur changes by
$20/long ton		 Phosphate ± 0.09
Canadian to US dollar strengthens by $0.01 Canadian operating
expenses net of
provincial taxes		 – 0.01
Translation gain/loss – 0.01
Price and Volume Sensitivities Effect on EPS
Price Potash changes by $20/tonne ± 0.34
DAP/MAP changes by $20/tonne ± 0.06
Ammonia increases by $20/tonne  
  • Nitrogen
 + 0.04
  • Phosphate
 – 0.01
Urea changes by $20/tonne ± 0.05
Volume Potash changes by 100,000 tonnes ± 0.05
Nitrogen changes by 50,000 N tonnes – 0.03
Phosphate changes by 50,000 P2O5 tonnes – 0.05
The above sensitivities affect cash flow as well, except the translation gain/loss which is primarily non-cash.
Indicators to Watch in 2008
Fertilizer
  • Weather and global acreage planted
  • Ethanol and biodiesel developments
  • US corn acres
  • US dollar exchange rates with global currencies
  • Global crop prices
  • Ocean freight rates
  • Prices for natural gas, ammonia and sulfur
  • EU and US nitrogen curtailments
  • Brazil's weather, soybean prices, credit policy, soybean acres planted
  • China's agricultural taxes, subsidies, corn exports, soybean imports
  • China's policy on exporting phosphate rock, DAP/MAP and urea
  • India's subsidy policy
  • India's urea and DAP production levels
  • US progress on new Farm Bill
  • Project capital costs
  • New capital project announcements
 Feed and Industrial
  • Health of US and world economies
  • Effect of livestock-based disease restrictions on world trade, e.g. avian flu, foot and mouth disease
  • Potential tightening of restrictions on the use of meat and bone meal in animal feeds
  • Impact of residual grain from ethanol production on US feed phosphate consumption
  • Consumer spending, housing starts, household improvements, and vehicle production and sales