Risks Related to IMC’s Indebtedness Following Completion of the Transactions

IMC’s substantial indebtedness could adversely affect Mosaic’s and/or IMC’s financial health and prevent IMC from fulfilling its obligations under its outstanding indebtedness.

As of July 31, 2004, IMC had outstanding indebtedness of approximately $2.1 billion. IMC’s substantial indebtedness could have important consequences for Mosaic. For example, it could:

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In addition, it is possible that Mosaic and its subsidiaries may need to incur additional indebtedness in the future in the ordinary course of business. The terms of IMC’s credit facilities and other agreements governing IMC’s indebtedness allow IMC to incur additional debt subject to certain limitations. If new debt is added to current debt levels, the risks described above could intensify. Furthermore, if future debt financing for Mosaic and its subsidiaries is not available when required or is not available on acceptable terms, Mosaic and its subsidiaries may be unable to grow their business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material adverse effect on Mosaic’s operating results and financial condition.

IMC will require a significant amount of cash to service its indebtedness. If IMC and Mosaic’s other subsidiaries are unable to generate a sufficient amount of cash to service IMC’s indebtedness, Mosaic’s financial condition and results of operations could be negatively impacted.

Significant amounts of cash will be needed in order to service and repay IMC’s indebtedness. The ability of IMC and the other Mosaic subsidiaries to generate cash in the future will be, to a certain extent, subject to general economic, financial, competitive and other factors that may be beyond the control of IMC and the other Mosaic subsidiaries. If IMC and the other Mosaic subsidiaries are not able to generate cash flow from operations in an amount sufficient to enable IMC to service and repay its indebtedness, Mosaic and/or IMC will need to refinance IMC’s indebtedness or allow IMC to be in default under the agreements governing its indebtedness. Such refinancing may not be available on favorable terms or at all. The inability to service, repay and/or refinance IMC’s indebtedness could negatively impact Mosaic’s financial condition and results of operations.

The agreements governing IMC’s indebtedness contain various covenants that limit management’s discretion in the operation of IMC’s business and also require IMC to meet financial maintenance tests and other covenants, and the failure to comply with such tests and covenants could have a material adverse effect on Mosaic and/or IMC.

The agreements governing IMC’s indebtedness contain various covenants, including those that restrict IMC’s ability to:

These covenants may limit Mosaic’s ability to effectively operate the businesses of IMC and the Cargill Fertilizer Businesses in an integrated manner.

In addition, IMC’s credit facilities require that IMC meet certain financial tests, including an interest expense coverage ratio test, a total leverage ratio test, a secured leverage ratio test and a collateral coverage ratio test. During periods in which product prices or volumes, raw material prices or availability, or other conditions reflect the adverse impact of cyclical market trends or other factors (including trends and factors disclosed in the risk factors contained or incorporated herein), IMC may not be able to comply with the applicable financial covenants.

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Any failure to comply with the restrictions of IMC’s credit facilities or any agreement governing IMC’s other indebtedness may result in an event of default under those agreements. Such default may allow the creditors to accelerate the related debt, which acceleration may trigger cross-acceleration or cross-default provisions in other debt. In addition, lenders may be able to terminate any commitments they had made to supply IMC with further funds (including periodic rollovers of existing borrowings).

IMC may not have the funds necessary to finance the change of control purchase offers required by the indentures governing the IMC senior notes, which offers will be triggered by the completion of the transactions, which may require IMC to borrow additional funds or cause IMC to be default under its indentures.

IMC’s indentures governing the IMC senior notes contain provisions requiring IMC to offer to purchase all of the outstanding IMC senior notes upon a change of control of IMC at 101% of the principal amount thereof (plus accrued and unpaid interest to the date of repurchase). The completion of the transactions will constitute a change of control of IMC under the terms of those indentures. As of July 31, 2004, $1.2 billion of IMC senior notes were outstanding and subject to the change of control purchase offer requirements. It is possible that IMC will not have sufficient funds available at the time of the change of control to make the required purchases of those notes. In such case, IMC may be required to borrow additional funds in order to make the required purchases. The terms of the indentures governing the IMC senior notes also provide that IMC may not incur any additional indebtedness if, after giving effect to the incurrence thereof, its consolidated fixed charge coverage ratio would be less than 2:00 to 1:00, subject to certain exceptions. As of June 30, 2004, IMC met the consolidated fixed charge coverage ratio test. However, if, as a result of not meeting the consolidated fixed charge coverage ratio at the applicable time, IMC is not able to borrow those additional funds in order to make the required purchases after the change of control of IMC, IMC would be in default under its indentures, which would also constitute a default under IMC’s credit facilities.

Risks Related to the Combined Businesses of Mosaic

Mosaic’s operating results will be highly dependent and fluctuate upon conditions in agriculture and international markets which will be outside of Mosaic’s control, which may limit Mosaic’s ability to meet its projected operating results.

Mosaic’s operating results will be highly dependent upon conditions in the agricultural industry, which Mosaic will not be able to control. The agricultural products business can be affected by a number of factors, the most important of which, for U.S. markets, are weather patterns and field conditions (particularly during periods of traditionally high crop nutrients consumption), quantities of crop nutrients imported to and exported from North America and current and projected grain inventories and prices, which are heavily influenced by U.S. exports and world-wide grain markets. U.S. governmental policies may directly or indirectly influence the number of acres planted, the level of grain inventories, the mix of crops planted or crop prices.

International market conditions, which are also outside of Mosaic’s control, may also significantly influence Mosaic’s operating results. The international market for crop nutrients is influenced by such factors as the relative value of the U.S. dollar and its impact upon the cost of importing crop nutrients, foreign agricultural policies, the existence of, or changes in, import or foreign currency exchange barriers in certain foreign markets, changes in the hard currency demands of certain countries, such as those countries that were part of the former Soviet Union, and other regulatory policies of foreign governments, as well as the laws and policies of the U.S. affecting foreign trade and investment. In addition, since crop nutrients, particularly anhydrous ammonia, are used for industrial applications, industrial markets and the general economy affect crop nutrients demand and prices.

Mosaic’s crop nutrients and other products may be subject to price volatility resulting from periodic imbalances of supply and demand, which may cause its results of operations to fluctuate.

Historically, prices for phosphate have reflected frequent changes in supply and demand. To a lesser degree, there is also volatility in the price of potash. As a result, crop nutrients prices have been volatile. This price

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volatility may cause Mosaic’s results of operations to fluctuate and potentially deteriorate. The price at which Mosaic sells its phosphate crop nutrients products could fall in the event of industry oversupply conditions.

Due to reduced market demand and the depressed agricultural economy, IMC has at various times suspended production at some of its facilities. If industry oversupply conditions exist, the price at which Mosaic sells its products could decline, which would have a material adverse effect on its business, financial condition and results of operations. The extent to which Mosaic utilizes available capacity at its facilities will cause fluctuations in its results of operations, as Mosaic will incur costs for any temporary or permanent shutdowns of its facilities.

Mosaic will be subject to risks associated with its international operations, which could negatively affect its sales to customers in foreign countries as well as the operations and assets of Mosaic in such countries.

For the year ended December 31, 2003, IMC derived approximately 42.5% of its net sales from customers located outside of the United States. For the years ended May 31, 2003 and May 31, 2004, the Phosphate Production segment of the Cargill Fertilizer Businesses derived approximately 75.1% and 73.7%, respectively, of its net sales revenue from customers located outside of the United States. As a result, Mosaic will be subject to numerous risks and uncertainties relating to international sales, including:

The occurrence of any of the events above in the markets where Mosaic will operate or in other developing markets could jeopardize or limit Mosaic’s ability to transact business in those markets and could adversely affect Mosaic’s revenues and operating results.

Mosaic’s substantial international assets will be located in countries with volatile conditions, which could subject Mosaic and its assets to significant risks.

Mosaic will be a global business with substantial assets located outside of the United States. Mosaic’s operations in Brazil, Argentina, Chile, Canada, China and India will be a fundamental part of Mosaic’s business. Volatile economic, political and market conditions in Brazil, Argentina, Chile, China, India and other emerging market countries may have a negative impact on Mosaic’s operations and operating results.

The Cargill Fertilizer Businesses to be contributed to Mosaic may not be operated as efficiently or as profitably as when those assets were operated by Cargill prior to the contribution, which may negatively impact Mosaic’s results of operations. Mosaic may also experience difficulty in establishing a separate brand identity from Cargill, which could negatively affect its sales and operating results.

Several facilities comprising the Cargill Fertilizer Businesses historically have been operated by Cargill in close proximity to other, non-fertilizer business units of Cargill, particularly in international locations. In some

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countries the Cargill Fertilizer Businesses share office space, certain assets, equipment or facilities with the other, non-fertilizer business units of Cargill. In addition, Cargill shared services ( e.g. , tax, law, treasury, insurance, etc.) provide numerous functional services for or on behalf of the Cargill Fertilizer Businesses around the world. Because the Cargill Fertilizer Businesses will be contributed to Mosaic and will no longer have the same relationship with Cargill’s non-fertilizer business units, the Cargill Fertilizer Businesses may not operate as efficiently or as profitably after being contributed to Mosaic as compared to when the Cargill Fertilizer Businesses were operated solely by Cargill. For example, it is possible that one or more international distribution locations operated by the Cargill Fertilizer Businesses prior to the transactions could be closed because it is uneconomical for Mosaic to conduct business at such location on a stand-alone basis. To facilitate the integration of the Cargill Fertilizer Businesses with IMC’s operations, it is contemplated that Cargill will enter into an arms-length transition services agreement with Mosaic whereby Cargill will provide many of the same services it provided to the Cargill Fertilizer Businesses for a period of time after the transactions. Nevertheless, as a result of the historically close relationship between Cargill and the Cargill Fertilizer Businesses, the historical financial information concerning the Cargill Fertilizer Businesses in this proxy statement/prospectus may not be indicative of their future results of operations, financial position or cash flows.

In addition, following the transactions, Mosaic’s results of operations will be impacted by its ability to establish its own brand identity and its ability to ensure that its products are recognized in the marketplace. To that end, Cargill has agreed for a minimum period of three years to permit Mosaic to license its brand on a royalty-free basis in conjunction with the sale of fertilizers in certain international jurisdictions where Cargill traditionally has attracted premiums from customers. It will be important for Mosaic management to develop a brand identity for its products and services separate from the Cargill brand during this three-year period. The failure to do so could result in lower sales and negatively affect Mosaic’s revenues and operating results.

Mosaic will not own a controlling equity interest in some of its Brazilian, Canadian or Chinese fertilizer companies, and therefore Mosaic’s operating results may be materially affected by how the governing boards and majority owners operate such businesses. There may also be limitations on monetary distributions from these companies that will be outside of Mosaic’s control. Together, these factors may lower Mosaic’s revenues from such businesses and negatively impact its results of operations.

The Cargill Fertilizer Businesses to be contributed to Mosaic hold several ownership interests in fertilizer manufacturing or distribution companies that are not controlled by Cargill, whether through less than majority representation on the applicable governing board or though a minority equity ownership interest in such entities. For example, in Brazil, Cargill owns an 19.71% effective ownership interest in Fosfertil Fertilzantes Fostatados, S.A., Brazil’s largest domestic phosphate fertilizer manufacturer and owner of Ultrafertil S.A., a Brazilian nitrogen fertilizer manufacturer. As these foreign companies will be significant to Mosaic, their results of operations will materially affect Mosaic’s operating results. Because Mosaic will not control these companies either at the board or shareholder level and because local laws in foreign jurisdictions may place restrictions on monetary distributions by these companies, Mosaic cannot ensure that these companies will operate efficiently, pay dividends, or generally follow the desires of Mosaic management by virtue of Mosaic’s board or shareholder representation after the transactions. As a result, these companies may contribute significantly less than currently anticipated to Mosaic’s revenues, negatively impacting Mosaic’s results of operations.

A restriction in the supply or a rise in the price levels of natural gas, ammonia and sulfur will have a negative impact on Mosaic’s operating earnings and results of operations.

Natural gas, ammonia and sulfur are raw materials used in the manufacture of phosphate crop nutrient products. Natural gas is used as both a chemical feedstock and a fuel to produce anhydrous ammonia, which is a raw material used in the production of diammonium phosphate and monoammonium phosphate. Natural gas is also a significant raw material used in the potash solution mining process. From time to time, a significant rise in the price of natural gas, a major component of production costs, has negatively affected IMC’s and the Cargill Fertilizer Businesses’ gross margins. Mosaic’s profitability will also be impacted by the price and availability of the ammonia and sulfur it purchases from third parties. A significant increase in the price of natural gas,

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ammonia or sulfur that is not recovered through an increase in the price of Mosaic’s related crop nutrients products or an extended interruption in the supply of natural gas, ammonia or sulfur to its production facilities could have a material adverse effect on Mosaic’s business, financial condition or results of operations.

Mosaic’s competitors will include state-owned and government subsidized entities in other countries with access to greater resources than Mosaic, which may place Mosaic at a competitive disadvantage and adversely affect its sales and profitability.

In addition to U.S. producers of crop nutrients, Mosaic will compete with a number of producers in other countries, including state-owned and government subsidized entities. These entities may have greater total resources than Mosaic and may be less dependent on earnings from crop nutrients sales than Mosaic. In addition, some of these entities may have access to lower cost or government-subsidized natural gas supplies, placing Mosaic at a competitive disadvantage. Mosaic’s inability to compete with these entities will harm its business by lowering its sales and profits.

IMC has experienced an inflow of water into its Esterhazy mine over the last 18 years. Mosaic is not insured against the risk of floods and water inflow at that mine and the costs to control the water inflow could increase in future years. The water inflow, risk to employees or remediation costs could also cause Mosaic to change its mining process or abandon the mines, which in turn could significantly negatively impact Mosaic’s results of operations.

Since December 1985, IMC has experienced an inflow of water into one of its two interconnected potash mines at Esterhazy, Saskatchewan. In order to control inflow, IMC has incurred expenditures, certain of which, due to their nature, have been capitalized, while others have been charged to expense. Because procedures utilized by IMC to control the water inflow have proven successful to date, Mosaic will likely continue conventional shaft mining carried on by IMC in the past. It is possible that the costs of remedial efforts at Esterhazy may increase in future years or that the water inflow, risk to employees or remediation costs may increase to a level which would cause Mosaic to change its mining process or abandon the mines. Due to the ongoing water inflow problem at Esterhazy, underground operations at this facility are currently not insurable for water incursion problems. IMC’s Colonsay mine is also subject to the risks of inflow of water as a result of its shaft mining operations.

The environmental regulations to which Mosaic will be subject, as well as its potential environmental liabilities, may have a material adverse effect on its business, financial condition and results of operations.

Mosaic will be subject to numerous environmental, health and safety laws and regulations in the U.S., Canada, Europe, China, Brazil and other international jurisdictions where Mosaic will operate fertilizer businesses, including laws and regulations relating to land reclamation and remediation of hazardous substance releases. For example, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons (known as “potentially responsible parties”) who are considered to have contributed to the release of “hazardous substances” into the environment. As a fertilizer company working with chemicals and other hazardous substances, Mosaic will periodically incur liabilities, under CERCLA and other environmental cleanup laws, with regard to its current or former facilities, adjacent or nearby third party facilities or offsite disposal locations. Under CERCLA, or its various state analogues, one party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. Liability under these laws involves inherent uncertainties. Violations of environmental, health and safety laws are subject to civil, and, in some cases, criminal sanctions. Laws similar to those in the United States may be applicable to international jurisdictions where Mosaic will operate. In some international jurisdictions, environmental laws change rapidly and it may be difficult for Mosaic to determine if it is in compliance with all material environmental laws at any given time. As a result of these uncertainties, Mosaic may incur unexpected interruptions to operations, fines, penalties or other reductions in income which would negatively impact the financial condition and results of operations of Mosaic.

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Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at ongoing operations, which will be charged against income from future operations. Present and future environmental laws and regulations applicable to Mosaic’s operations may require substantial capital expenditures and may have a material adverse effect on its business, financial condition and results of operations.

Mosaic’s operations will be dependent on having received the required permits and approvals from governmental authorities. A decision by a government agency to deny any of Mosaic’s permits and approvals or to impose restrictive conditions on Mosaic or its subsidiaries with respect to these permits and approvals may impair its business and operations.

Mosaic, through its subsidiaries, will hold numerous governmental environmental, mining and other permits and approvals authorizing operations at each of their facilities. Expansion of Mosaic’s operations also is predicated upon securing the necessary environmental or other permits or approvals. A decision by a government agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on Mosaic’s ability to continue operations at the affected facility.

Over the next several years, Mosaic and its subsidiaries will be continuing their efforts to obtain permits in support of their anticipated Florida mining operations at certain of their properties. These properties contain in excess of 100 million tons of phosphate rock reserves. In Florida, local community participation has become an important factor in the permitting process for mining companies. A denial of these permits or the issuance of permits with cost-prohibitive conditions would prevent Mosaic from mining at these properties and thereby have a material adverse effect on Mosaic’s business, financial condition and results of operations. In many cases, as a condition to procuring such permits and approvals, Mosaic will be required to comply with financial assurance regulatory requirements. The purpose of these requirements is to assure the government that sufficient company funds will be available for the ultimate closure, post-closure care and/or reclamation of Mosaic’s facilities. These financial assurance requirements can be satisfied without the need for any expenditure of corporate funds if Mosaic’s financial statements meet certain balance sheet/income statement criteria, referred to as the financial tests. In the event that Mosaic is unable to satisfy these financial tests, alternative methods of complying with the financial assurance requirements would require Mosaic to expend funds for the purchase of bonds, letters of credit, insurance policies or similar instruments. The regulations governing financial assurance are currently in the rulemaking process. It is possible that Mosaic will not be able to comply with such regulations on the closing date of the transactions or that it will not be able to do so in the future, which could materially adversely affect Mosaic’s business and operations.

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