Global Equity Research ab Global Chemicals, Fertilisers Market Comment 100% 90% 80% 70% 60% February 2008 Capacity Utilisation % 900 800 700 600 500 400 300 200 100 www.ubs.com/investmentresearch Joe Dewhurst Analyst joe.dewhurst@ubs.com +44 207 56 88327 Roni Biron DAP FOB Tampa P2O5 ex port utilisation E 11 E 10 20 Analyst roni.biron@ubs.com +972 99 600 118 20 E E 09 20 08 06 05 07 20 20 20 20 03 02 04 20 20 20 20 20 01 50% 00 DAP Price US$/ton UBS Investment Research UBS Global I/OTM: Phosphate Fertiliser US DAP capacity utilisation Owen Evans Source: Fertecon, Reut ers, UBS Est imat es Analyst Owen.Evans@ubs.com +61-2-9324 3848 Phosphates: No easing in sight Brian MacArthur, CFA Analyst brian.macarthur@ubs.com +1-416-350 2229 98% traded capacity utilisation rates for phosphoric acid for 08 & 09 We predict that phosphoric acid utilisation will be close to its theoretical maximum for this year and 2009 This implies that supply cannot meet demand and means that the market is in the strongest position possible Laurent Favre Analyst Laurent-L.Favre@ubs.com +44-20-756 84008 Rising sulphur, shipping & ammonia prices stimulate margin expansion Practically every input cost into the value chain from mine to farm has seen dramatic escalation Sulphur, ammonia and freight prices are at or close to record levels In a tight supply demand environment this leads to margin expansion Darren Shaw Analyst Darren.Shaw@ubs.com +44-207 568 0487 Fully integrated producers the best off, but acid & rock prices will rise Fully integrated suppliers have cash margins in excess of $1000/ton of P2O5 Rock & acid suppliers have an unequal share given market tightness This will change Upside for Agrium, Potash Corp, Israel Chemicals, Incitec Pivot, Yara Agrium, Potash Corp, Israel Chemicals and Incitec Pivot have phosphate fertilisers as a core revenue stream Yara now has exposure since acquiring GrowHow in 07 RIC Name Region Analyst Rating M Cap AGU.N Agrium Inc North America Brian MacArthur Buy $9,904 POT.N Potash Corp North America Brian MacArthur Buy $42,904 ICL.TA Israel Chemicals EMEA Darren Shaw Buy (CBE) $16,965 IPL.AX Incitec Pivot Limited Latin America Owen Evans Neutral YAR.OL Yara Latin America Laurent Favre Sell $5,393 $14,261 The UBS Global I/O™ initiative engages analysts from around the world in a collaborative effort to offer our leading global equity research (“Input”) along with investment ideas (“Output”) in multiple regions concurrently This report has been prepared by UBS Limited ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 12 UBS does and seeks to business with companies covered in its research reports As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report Investors should consider this report as only a single factor in making their investment decision Customers of UBS in the United States can receive independent, third-party research on the company or companies covered in this report, at no cost to them, where such research is available Customers can access this independent research at www.ubs.com/independentresearch or may call +1 877-208-5700 to request a copy of this research UBS Global I/OTM: Phosphate Fertiliser February 2008 The good times are not over yet Table 1: Phosphoric acid supply demand and DAP pricing with forecasts UOM Demand Change yoy % Capacity '000 tons P2O5 2005 2006 2007 2008E 2009E 2010E 2011E 32,709 33,766 34,017 35,886 37,686 39,186 40,586 41,936 6.2% '000 tons P2O5 2004 3.2% 0.7% 5.5% 5.0% 4.0% 3.6% 3.3% 42,157 43,386 42,571 43,471 44,561 45,951 48,561 51,091 Change yoy % 1.6% 2.9% -1.9% 2.1% 2.5% 3.1% 5.7% 5.2% Total capacity utilisation % 78% 78% 80% 83% 85% 85% 84% 82% Traded acid capacity utilisation % 90% 94% 96% 98% 98% 96% 95% 95% US$/ton DAP 217 245 257 422 800 750 700 700 DAP Price FOB Tampa Source: FRC, Fertecon, Reuters, UBS Estimates ; Note FOB (Free On Board) is the price at port of departure Supply demand of traded phosphoric acid is extremely tight and utilisation rates are at a maximum This will result in peak price this year for DAP at an average of US$800/ton FOB Tampa Added capacity in 2009 will ease rates slightly but the market will remain tight until 2011 Phosphoric traded global spot prices are set primarily by supply demand in the import export market place In this value chain the constraint is phosphoric acid capacity, and tightness here is what sets the total producer margins from rock to product Traded phosphoric acid supply demand sets prices for the value chain The first supply demand consideration is the import and export supply demand balance which shows extremely tight supply demand for phosphoric acid We believe that capacity utilisation will be operating at or close to its theoretical maximum in 2008 and similarly in 2009 Utilisation eases in 2010 with the addition of new capacity but this should be taken in the context of historical average operating rates – and is by no means what we could consider to be a utilisation downturn Traded acid capacity utilisation levels are close to their maximum of 98% Chart 1:Export country phosphoric acid utilisation rates 100% 98% - Theoretical maxiumum utilisation Operating rates % 98% 96% 94% 92% 90% 88% 2005 2006 2007E 2008E 2009E 2010E 2011E Source: Fertecon, UBS Estimates Source: Fertecon, FRC, UBS estimates UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Chart 2: Historic traded phosphoric acid operating rates 100 Operatiing rates % 95 90 85 80 75 70 65 60 1980 1985 1990 1995 2000 2005 Source: Fertecon Operating rates comparisons between acid and granular products illustrate that export acid production is the constraint and sets prices for final products Chart 3: Utilisation and DAP prices DAP Price US$/ton 600 90% 500 400 80% 300 70% 200 60% 100 50% 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 E 20 09 E 20 10 E 20 11 E Capacity Utilisation % 100% 700 DAP FOB Tampa P2O5 ex port utilisation US DAP capacity utilisation Source: FRC, UBS Estimates The chart below illustrates the historical situation in the US while in Morocco phosphoric acid capacity utilisation in 2007 was estimated to be 90% where as DAP/MAP capacity utilisation was at about 55% Hence acid supply has historically been the bottleneck Granular end product capacity utilisations are not a reliable indicator of phosphate supply demand UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Chart 4: US capacity utilisation rates 100% 95% 90% 85% 80% 75% 70% 65% Acid 20 11 E 20 09 E 20 07 20 05 20 03 20 01 19 99 19 95 19 97 60% DAP Source: Fertecon, FRC, UBS estimates Consideration of cash margins though will illustrate an interesting situation in that in actual fact most of the producer margins are being captured at the phosphoric acid to granular end product phases rather than at the bottleneck that is phosphoric acid production The reason for this is that rock and acid supply has historically been priced according to long term contracts As these expire we would expect acid and rock prices to move upwards Most traded fertiliser stocks are fully integrated to the granulation stage and sell little or no acid or rock directly Rock and acid price adjustment though will be an added catalyst to support end product prices Most producer margins are being captured at the granulation stage but we believe this will become more equitable when long term rock and acid supply contracts are renewed Chart 5: Phosphate value chain fob cash margins (Morocco) Cash Margins US$/ton 1200 1000 800 600 400 200 Rock Acid 20 07 20 05 20 03 20 01 19 99 19 97 19 95 19 93 19 91 DAP Source: FRC Supply Producer cash margins far outstrip investment hurdle requirements for the acid and DAP stages Pure rock exports have the thinnest cash margins net of cost of financing At current prices there are significant incentives for investment in capacity An additional observation is that pure rock suppliers have an incentive for increased margin capture from customers Access to deposits though are to a Cash margins outstrip costs of investment and a strong pull exists for investment in capacity UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 large degree restricted to the incumbent state owned enterprises of Morocco (OCP), Tunisia (GCT), South Africa (Foskor) and Senegal (ICS) Cash margin US$/(tpa installed capacity) Chart 6: Hurdle fob cash margins in relation to actual 2007 (Morocco) $1,200 $1,000 $800 $600 $400 $200 $0 Rock Acid Minimum cash flow for 9% WACC DAP Fully integrated Cash margin less WACC Source: FRC, UBS estimates – based on 9% WACC and a 10 year asset life, capacity in tons P2O5 Rock and acid value creep will push up overall prices and margins Rock and acid producers will increase acid prices considerably when renewing contracts this year This will likely erode non integrated granular fertiliser margins This could impact marginal capacity and increase granulation plant utilisation rates Rock and granular fertilisers are subjected to escalations in bulk shipping rates while acid is subject to tanker rates which have been more stable Producers are most likely to thus favour the sale of acid at raised prices India is the largest importer of phosphoric acid taking more than 50% of traded material This is utilised by non integrated producers in India to produce granular DAP, MAP and TSP Indian and Western European producers are the most vulnerable to these price increases This reduced profitability of non integrated granulators will tighten the supply market Rock and acid prices are expected to increase in 08 & 09 India is the most vulnerable to rising acid and rock prices All stocks under coverage by UBS are fully integrated back to phosphate mining and hence are not exposed to changes in rock and acid pricing to any great degree UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Chart 7: Phosphoric Acid imports by country 6,000 '000 tons P2O5 5,000 4,000 3,000 2,000 1,000 2005 2006 2007 India 2008E West Europe 2009E 2010E Rest of Asia 2011E MEA Source: FRC, UBS Historically both rock and acid pricing has been under long term contracts of a year or more This is the primary reason as to why acid margins have not captured a larger proportion of the cash margins for the value chain Granular products on the other hand have a liquid spot market and have rapidly translated capacity tightness as most traders of granular products are fully integrated back to the mined rock Acid exports are very consolidated with five state owned firms controlling more than 75% of the market Moroccan, Tunisian, South African, Senegalese and Jordanian production is largely state controlled Chart 8: 2007 exported volumes of phosphoric acid % of 4.8m tons P2O5 Rock and acid historically were traded under long term contracts Traded acid supply is highly consolidated with five state owned enterprises controlling 75% of global supply ROW 23% Morocco Jordan 45% 3% Senegal 5% South Africa 12% Tunisia 12% Source: FRC The peak of the cycle will drive capacity build With cash margins as strong as they are at present, we anticipate increased momentum towards capacity build Incentives for capacity build are high and this will happen The market will peak in 2008 Significant capacity addition is planned for 2010 and 2011 which will drop export utilisation rates to 90% We expect to see some easing on granulated price pressure, though 08 & 09 are expected to be peak years for the market UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Chart 9: Capacity additions 100% 2500 80% 2000 1500 60% 1000 40% 500 Utilisation % Capacity/Demand '000 tpa P2O5 3000 20% -500 -1000 0% 1995 1997 Capacity Additions 1999 2001 2003 2005 Demand Increments 2007 2009E 2011E Global Utilisation Ex port Utilisation Source: Fertecon, UBS Input costs Input costs are moving upwards and will continue to catalyse margin expansion in a tight supply demand scenario Input costs across at all points in the value chain have escalated dramatically Sulphur in particular has seen significant increases in price due to increasing demand for sulphuric acid from metallurgical refiners Sulphur costs have escalated to six times their levels in March 2007 Chart 10: Sulphur price FOB Vancouver Vancouver FOB US$/ton 350 300 250 200 150 100 50 Dec-07 Sep-07 Jun-07 Mar-07 Dec-06 Sep-06 Jun-06 Mar-06 Dec-05 Sep-05 Jun-05 Mar-05 Source: Reuters We have seen some relief recently in bulk material shipping costs This will benefits suppliers who price on a delivered basis (CFR) UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Chart 11: Panamax Baltic dry shipping index Baltic bulk freight index 12000 10000 8000 6000 4000 2000 May-07 May-06 May-05 May-04 May-03 May-02 May-01 May-00 May-99 May-98 Source: Reuters Ammonia is used in the manufacture of MAP and DAP products 400 350 300 250 200 150 Oct-07 Aug-07 Jun-07 Apr-07 Feb-07 Dec-06 Oct-06 Aug-06 Jun-06 Apr-06 Feb-06 100 Dec-05 NOLA Ammonia Average US$/ton FOB Chart 12: Ammonia spot prices NOLA FOB average index Source: Reuters Demand Crop fundamentals remain strong and we conclude that global acreage levels will be at record levels in the 07/08 and 08/09 growing seasons Crop margins are at record levels which we believe will further stimulate the growth engines of Asia, Latin America and the FSU (Countries of the former Soviet Union) to turn to greater levels of farming sophistication UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Crop acreage and demand - likely to another bumper year Crop fundamentals are strong Chart 13: Fertiliser application rates by major crop kg/acre Ethanol & Ex ports Driv ing 5.00 100 Drought 4.00 80 3.00 60 2.00 40 20 N P2O5 Feb-06 Feb-04 Feb-02 Cotton Feb-00 Soy beans Feb-98 Wheat Feb-90 Corn Feb-96 1.00 Feb-94 120 Feb-92 140 Chart 14: US spot corn prices K20 Source: Potash Corp Source: StockVal Chart 15: Wheat Prices ($/bu.) – 1990-present Chart 16: Soybean Prices ($/bu.) – 1990-present 14.00 10.00 Record Wheat Prices 8.00 Low er Acreage & Strong Demand 12.00 Source: StockVal Jan-08 Jan-06 Jan-04 Jan-02 Jan-00 Jan-98 Jan-96 Jan-94 Jan-92 Jan-90 Jan-08 Jan-06 Jan-04 4.00 Jan-02 0.00 Jan-00 6.00 Jan-98 2.00 Jan-96 8.00 Jan-94 4.00 Jan-92 10.00 Jan-90 6.00 Source: StockVal Our commodity analysts have a bullish outlook for soybeans in particular with prices per bushel in the 07/08 season to be more than double their levels in the 06/07 season US ending inventories are forecast at just 21 days of supply for the end of August Combined with anticipated increased imports from China (c40% global imports in 2007) the market will need significant increased US planted acreage this spring combined with strong South American harvests Neither currently look like being sufficient to make up the shortfall We forecast high crop prices for 07/08 Wheat futures markets have again hit fresh nominal highs following more negative harvest news flow (Argentina and Canada), a weakening US dollar and increased global concern over very low stock levels We remain positive on wheat fundamentals given continued severe vulnerability to weather disruptions UBS UBS Global I/OTM: Phosphate Fertiliser February 2008 Rising farm incomes are changing farming practices Crop margins serve to stimulate farmers to become increasingly focussed on yields particularly in emerging markets where available technology is not fully employed Higher crop margins will continue to stimulate farming technology take up in emerging economies Chart 17: US net farm income , 1980 - present 100.0 90.0 $87.5 $85.9 80.0 $77.1 70.0 $59.7 60.0 $59.0 $ Billions $54.8 50.0 30.0 20.0 $36.9 $30.9 $28.6 $26.0 $26.9 $23.8 $16.1 $40.2 $38.5 $38.0 $37.4 40.0 $51.5 $47.9 $46.8 $45.6 $50.5 $48.9 $47.8 $44.7 $45.3 $44.6 $14.2 10.0 2006 2007F 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 0.0 Source: USDA Equity impacts Chart 18: Company sales split by nutrient (2006 basis) (US$ millions) 100% 55% 34% 5,306 41% 24% 2% 17% 87% 21% Other Nitrogen Phosphate Potash 33% K& S ica ls ae lC he m Co rp 55% 7% 5% Isr Po ta sh alk ali Ur 21% 7,540 13% 53% 38% 28% 33% 4,193 Ya 33% 3,173 Ag riu m 2,887 os aic 3,377 M 613 Source: UBS, company reports UBS 10 UBS Global I/OTM: Phosphate Fertiliser February 2008 Agrium Agrium is a major North American fertilizer producer with numerous nitrogen plants, two phosphate plants and one potash mine and a large retail business While it is the largest North American nitrogen producer in potash it has one low cost mine in Canada that can be expanded In phosphate Agrium has a profitable niche business in the Western part of North America, thus we believe Agrium should benefit from higher Potash and Phosphate prices but its largest leverage is in nitrogen Potash Corp PotashCorp is one of the world's largest and lowest-cost publicly traded potash producers and is also the world's third-largest phosphate producer Thus the company is better known for its exposure to potash and phosphate two commodities which UBS also has a very positive outlook Its potash reserves are sufficient for over 100 years of production The company controls over 50% of the World’s excess potash capacity and has always followed a price leadership strategy where it has matched production to sales Thus we believe it is well positioned to benefit from higher potash prices Potash Corp is also the one of the World’s largest phosphate producers and has a very good phosphate rock position with reserves that should last more than 50 years Its North Carolina plant is one of the worlds lowest cost producers of phosphoric acid, the feedstock for many fertiliser products Thus we expect Potash Corp is well positioned to capture phosphate values Potash Corp is one of the world’s largest nitrogen companies with plants in the US and a large complex in Trinidad which allows it to benefit from higher ammonia prices due to its low feedstock cost position Israel Chemicals We believe Israel Chemicals is well positioned to benefit in the coming years from rising potash and phosphates prices In 3Q07, potash accounted for 30% of the company’s sales and 57% of its EBIT Phosphates accounted for additional 17% of sales and 20% of EBIT, bringing fertilizers to 47% and 78%, respectively Other segments include industrial products (brominated flame retardants, oil drilling, etc.) and performance products (downstream phosphates used in the food industry and other) ICL has capacity of around 1.7 million ton of phosphates fertilizers (GTSP) The company’s utilizes its own source of phosphate rock and phosphoric acid In 2006, the company produced 2.949 million tons of phosphate rock and 504,000 tons of acid This vertically integrated cost structure limits ICL’s exposure in terms of rising input costs mainly to sulphur UBS 11 UBS Global I/OTM: Phosphate Fertiliser February 2008 Incitec Pivot Incitec is the sole producer of fertilisers in eastern Australia It produces 480kt of urea and equivalents from its Gibson Island plant in Brisbane and 1mt of MAP/DAP from the Phosphate Hill plant in north Queensland It is also the largest importer and distributer of fertiliser in Australia Both are low cost plants delivered into eastern Australian markets In general the customer base is extremely competitive in Asian markets This is particularly true for wheat, barley, sorghum, sugar and dairy products Presuming normal weather patterns we would expect IPL to have an excellent year in fiscal 2008 ■ Statement of Risk The fertiliser market is strongly influenced both global and regional supply demand balances, as well as input and shipping costs Unpredictable events in particular weather related ones can rapidly alter these balances and hence influence prices ■ Analyst Certification Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report UBS 12 UBS Global I/OTM: Phosphate Fertiliser February 2008 Required Disclosures This report has been prepared by UBS Limited, an affiliate of UBS AG UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures UBS Investment Research: Global Equity Rating Allocations UBS 12-Month Rating Buy Neutral Sell UBS Short-Term Rating Buy Sell Rating Category Buy Hold/Neutral Sell Rating Category Buy Sell Coverage1 55% 36% 8% Coverage3 less than 1% less than 1% IB Services2 39% 36% 20% IB Services 25% 50% 1:Percentage of companies under coverage globally within the 12-month rating category 2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within the past 12 months 3:Percentage of companies under coverage globally within the Short-Term rating category 4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were provided within the past 12 months Source: UBS Rating allocations are as of 31 December 2007 UBS Investment Research: Global Equity Rating Definitions UBS 12-Month Rating Buy Neutral Sell UBS Short-Term Rating Buy Sell Definition FSR is > 6% above the MRA FSR is between -6% and 6% of the MRA FSR is > 6% below the MRA Definition Buy: Stock price expected to rise within three months from the time the rating was assigned because of a specific catalyst or event Sell: Stock price expected to fall within three months from the time the rating was assigned because of a specific catalyst or event UBS 13 UBS Global I/OTM: Phosphate Fertiliser February 2008 KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium) Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and not reflect any change in the fundamental view or investment case EXCEPTIONS AND SPECIAL CASES UK and European Investment Fund ratings and definitions are : Buy: Positive on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell: Negative on factors such as structure, management, performance record, discount Core Banding Exceptions (CBE) : Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC) Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece Company Disclosures Company Name Agrium Inc.2d, 4b, 5, 16 Incitec Pivot Limited13 Israel Chemicals Limited2c, 4a, 20 Potash Corporation of Saskatchewan Inc.2a, 4c, 16 Yara2b, 16 Reuters AGU.N IPL.AX ICL.TA 12-mo rating Short-term rating Buy N/A Neutral N/A Buy (CBE) N/A Price US$62.80 A$119.99 NIS47.50 Price date 30 Jan 2008 31 Jan 2008 30 Jan 2008 POT.N Buy N/A US$136.25 30 Jan 2008 YAR.OL Sell N/A NKr263.50 30 Jan 2008 Source: UBS All prices as of local market close Ratings in this table are the most current published ratings prior to this report They may be more recent than the stock pricing date 2a UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months 2b UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past five years 2c UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past three years 2d UBS Securities Canada Inc or an affiliate has acted as manager/co-manager, underwriter or placement agent in regard to an offering of securities for this company/entity or one of its affiliates within the past 12 months 4a Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity 4b Within the past 12 months, UBS Securities Canada Inc or an affiliate has received compensation for investment banking services from this company/entity 4c Within the past three years, UBS Securities Canada Inc or an affiliate has received compensation for investment banking services from this company/entity UBS Securities Canada Inc or an affiliate expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months 13 UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company`s common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end) 16 UBS Securities LLC makes a market in the securities and/or ADRs of this company UBS 14 UBS Global I/OTM: Phosphate Fertiliser February 2008 20 Because UBS believes this security presents significantly higher-than-normal risk, its rating is deemed Buy if the FSR exceeds the MRA by 10% (compared with 6% under the normal rating system) Roni Biron assisted in the preparation of this research piece The analyst responsible for this report has not reviewed the material operations of the issuer Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report Agrium Inc (US$) Price Target (US$) Stock Price (US$) 80.0 60.0 40.0 20.0 01-Jan-07 01-Mar-07 01-May-07 01-Jul-07 01-Sep-07 01-Nov-07 01-Jan-08 01-Jan-07 01-Mar-07 01-May-07 01-Jul-07 01-Sep-07 01-Nov-07 01-Jan-08 01-Nov-06 01-Sep-06 01-Jul-06 01-May-06 01-Mar-06 01-Jan-06 01-Nov-05 01-Sep-05 01-Jul-05 01-May-05 01-Mar-05 01-Jan-05 0.0 Buy Neutral Buy No Rating Source: UBS; as of 30 Jan 2008 Incitec Pivot Limited (A$) Price Target (A$) Stock Price (A$) 150 100 50 01-Nov-06 01-Sep-06 01-Jul-06 01-May-06 01-Mar-06 01-Jan-06 01-Nov-05 01-Sep-05 01-Jul-05 01-May-05 01-Mar-05 01-Jan-05 Buy Neutral Reduce Neutral No Rating Source: UBS; as of 31 Jan 2008 UBS 15 Price Target (NKr) 01-Jan-08 01-Jan-08 01-Nov-06 01-Nov-07 01-Nov-07 50 01-Sep-07 100 01-Sep-07 150 01-Jul-07 200 01-Jul-07 250 01-May-07 Stock Price (NKr) 01-May-07 300 01-Mar-07 Yara (NKr) 01-Mar-07 Source: UBS; as of 30 Jan 2008 01-Jan-07 Buy Neutral Buy No Rating 01-Jan-07 01-Nov-06 Price Target (US$) 01-Sep-06 01-Jul-06 01-May-06 01-Mar-06 01-Jan-06 01-Nov-05 01-Sep-05 01-Jul-05 01-May-05 01-Mar-05 01-Jan-05 01-Jan-08 01-Nov-07 01-Sep-07 01-Jul-07 01-May-07 01-Mar-07 01-Jan-07 01-Nov-06 01-Sep-06 01-Jul-06 01-May-06 01-Mar-06 01-Jan-06 01-Nov-05 01-Sep-05 01-Jul-05 01-May-05 01-Mar-05 01-Jan-05 Price Target (NIS) 01-Sep-06 01-Jul-06 01-May-06 01-Mar-06 01-Jan-06 01-Nov-05 01-Sep-05 01-Jul-05 01-May-05 01-Mar-05 01-Jan-05 UBS Global I/OTM: Phosphate Fertiliser February 2008 Israel Chemicals Limited (NIS) Stock Price (NIS) 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Buy Neutral Buy No Rating Source: UBS; as of 30 Jan 2008 Potash Corporation of Saskatchewan Inc (US$) 200 Stock Price (US$) 150 100 50 Buy Neutral Reduce Sell Source: UBS; as of 30 Jan 2008 UBS 16 UBS Global I/OTM: Phosphate Fertiliser February 2008 Note: On August 4, 2007 UBS revised its rating system (See 'UBS Investment Research: Global Equity Rating Definitions' table for details) From September 9, 2006 through August 3, 2007 the UBS ratings and their definitions were: Buy = FSR is > 6% above the MRA, higher degree of predictability; Buy = FSR is > 6% above the MRA, lower degree of predictability; Neutral = FSR is between -6% and 6% of the MRA, higher degree of predictability; Neutral = FSR is between -6% and 6% of the MRA, lower degree of predictability; Reduce = FSR is > 6% below the MRA, higher degree of predictability; Reduce = FSR is > 6% below the MRA, lower degree of predictability The predictability level indicates an analyst's conviction in the FSR A predictability level of '1' means that the analyst's estimate of FSR is in the middle of a narrower, or smaller, range of possibilities A predictability level of '2' means that the analyst's estimate of FSR is in the middle of a broader, or larger, range of possibilities From October 13, 2003 through September 8, 2006 the percentage band criteria used in the rating system was 10% UBS 17 UBS Global I/OTM: Phosphate Fertiliser February 2008 Global Disclaimer This report has been prepared by UBS Limited, an affiliate of UBS AG UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS In certain countries, UBS AG is referred to as UBS SA This report is for distribution only under such 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Sell Source: UBS; as of 30 Jan 2008 UBS 16 UBS Global I/OTM: Phosphate Fertiliser February 2008 Note: On August 4, 2007 UBS revised its rating system (See ''UBS Investment Research: Global Equity... disclosures concerning UBS research recommendations, please visit www .ubs. com/disclosures UBS Investment Research: Global Equity Rating Allocations UBS 12-Month Rating Buy Neutral Sell UBS Short-Term... research analyst in the research report UBS 12 UBS Global I/OTM: Phosphate Fertiliser February 2008 Required Disclosures This report has been prepared by UBS Limited, an affiliate of UBS AG UBS