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| 2006 ECONOMIC PERFORMANCE |
EC1. Direct economic value generated and distributed. |
In 2006, PotashCorp generated economic value of $3.50 billion, slightly down from $3.56 billion in 2005. This decrease reflects the decline in net sales, which account for almost all the economic value generated.
The economic value distributed by PotashCorp was $3.14 billion. Cost of goods and services purchased ($2.27 billion), employee wages and benefits ($430 million) and taxes to governments ($236 million) were the most significant components.
Economic value retained was $365 million in 2006, down from $388 million in 2005. |
EC2. Financial implications and organizational risks and opportunities of climate change. |
PotashCorp has not addressed the financial implications of climate change in any detail. However, recognizing the importance of climate change issues, the sustainability committee has established a task force to examine the related risks and opportunities, including the financial implications.
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EC3. Coverage of the organization's defined benefit plan obligation. |
PotashCorp sponsors plans that provide pension and other post-retirement benefits for most of its employees. These plans exist in all jurisdictions where PotashCorp has operations.
At the end of 2006, PotashCorp's pension plan obligations were estimated at $626.4 million, while the fair value of plan assets was $519.9 million. Plan assets consisted of a diversified blend of equity securities (66 percent) and debt securities (34 percent). |
EC4. Financial assistance received from governments. |
PotashCorp received $467,465 in 2006 from the State of Florida for a job creation program. The company also received donated land from the city of Lavras in Brazil for the construction of a new warehouse and terminal.
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EC5. Entry level wage compared to local minimum wage for significant locations of operation. |
In all jurisdictions where it operates, PotashCorp's entry level wages are higher than the local minimum wage.
| Ratio of Entry Wage Levels to Local Minimum Wage in 2006 |
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US |
Canada |
Trinidad |
Brazil |
| Ratio |
187-272% |
258-314% |
315% |
214% |
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EC6. Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation. |
Under its company-wide Purchasing Policy, PotashCorp's purchasing managers must consider the potential contribution to the local economy and to accessibility, as well as price and quality. Each production site has developed its own procedures to implement this policy. PotashCorp began to measure the percentage of local purchasing across its operations in 2002. Excluding raw materials, electricity and transportation, company tracking shows an increase in local purchasing from 55 percent to 62 percent over the past five years.
| Local Purchasing |
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2002 |
2003 |
2004 |
2005 |
2006 |
| % of total purchases made locally* |
55 |
52 |
60 |
61 |
62 |
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EC7. Procedures for local hiring, and proportion of senior management hired from the local community in locations of significant operation. |
It is common practice at PotashCorp to hire local residents. Accordingly, the majority of the company's employees reside in and around its host communities. |
EC8. Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement. |
PotashCorp's contribution to local economies extends beyond the direct impact of employment and local purchasing. Often the dominant employer in an area, it can affect the local economy through its impact on educational and medical facilities, social and sports centers, utilities, and other important elements of community life. |
EC9. Indirect economic impacts. |
PotashCorp is not yet able to present information on its indirect impacts, beyond noting that, as a major contributor to world food production, such impacts are considerable. |
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