In 2007, PotashCorp generated economic value of $4.93 billion (based on the G3 framework). This was up significantly from $3.50 billion in 2006, a reflection of the strong increase in net sales (which account for most of the economic value generated) and income from financial investments.
ECONOMIC VALUE GENERATED BY POTASHCORP |
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| ($ million) | 2003 | 2004 | 2005 | 2006 | 2007 |
| Net Sales* | 2,465.8 | 2,901.4 | 3,475.6 | 3,376.8 | 4,764.0 |
| Income from Financial Investments** |
20.5 | 45.0 | 74.4 | 102.9 | 164.1 |
| Proceeds from Sale of Assets*** | -- | 103.3 | 12.4 | 22.0 | 4.5 |
| Total | 2,486.3 | 3,049.7 | 3,562.4 | 3,501.7 | 4,932.6 |
| *See reconciliation and description of certain non-GAAP measures in Financial Performance Indicators in the 2007 Financial Review Annual Report, pages 66 to 68. **Income from financial investments includes the company's share of earnings from investments accounted for on an equity basis, dividends received from investments accounted for as available-for-sale and interest income. ***Proceeds from sale of assets include disposal of property, plant and equipment and sale of long-term investments. Source: PotashCorp |
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Sales
In both northern and southern hemispheres, fertilizers are sold primarily for spring and fall application. Potash, nitrogen and phosphate are also used for animal feed and industrial products. Feed and industrial sales are made primarily by contract and are more evenly distributed throughout the year than fertilizer sales.
PotashCorp's net sales were $4.76 billion in 2007, an increase of $1.39 billion over 2006 and up 93 percent since 2003. The growth is the result of increased volumes and much higher prices realized per tonne for all three nutrients.
NET SALES* BY BUSINESS SEGMENT |
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| ($ million) | 2003 | 2004 | 2005 | 2006 | 2007 |
| Potash | 619.1 | 894.8 | 1,176.9 | 1,058.2 | 1,580.0 |
| Nitrogen | 1,064.8 | 1,130.0 | 1,279.4 | 1,195.1 | 1,692.7 |
| Phosphate | 781.9 | 876.6 | 1,019.3 | 1,123.5 | 1,491.3 |
| Total | 2,465.8 | 2,901.4 | 3,475.6 | 3,376.8 | 4,764.0 |
| *See reconciliation and description of certain non-GAAP measures in Financial Performance Indicators in the 2007 Financial Review Annual Report, pages 66 to 68. Source: PotashCorp |
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In 2007, nitrogen products accounted for the largest share of net sales (35.5 percent), followed by potash (33.2 percent) and phosphate (31.3 percent). However, potash continues to generate the bulk of gross margin. Over the past five years, potash represented on average 31 percent of net sales and contributed 55 percent of gross margin.