Mosaic Co. (NYSE:MOS)

The financial data over the five-year period reveals notable fluctuations and trends in the reported and goodwill adjusted figures for total assets, stockholders’ equity, and net earnings attributable to the company.

Total Assets

Reported total assets exhibited a general upward trend, increasing from approximately US$18.63 billion at the end of 2017 to US$22.04 billion by the end of 2021. There was a slight decline observed in 2019 compared to 2018, followed by recovery and growth in subsequent years. Adjusted total assets, which exclude goodwill, follow a similar trajectory but at consistently lower levels, reflecting the impact of goodwill on the asset base. The adjusted figures grew from US$16.94 billion in 2017 to US$20.86 billion in 2021, indicating an overall expansion in tangible assets over the period.

Stockholders’ Equity

Reported stockholders’ equity showed a mixed trend, rising from US$9.62 billion in 2017 to a peak of about US$10.40 billion in 2018, then declining sharply in 2019 to US$9.19 billion before gradually increasing back to US$10.60 billion in 2021. The adjusted stockholders’ equity figures, which remove goodwill effects, also displayed a similar pattern but remained consistently lower than reported equity, varying from US$7.92 billion in 2017 up to US$9.43 billion in 2021. This suggests that goodwill adjustments have a substantial effect on the reported equity but the underlying equity has been recovering after the dip in 2019.

Net Earnings (Loss)

Reported net earnings attributable to the company were volatile during the period. A loss of approximately US$107 million was recorded in 2017, followed by a profitable year in 2018 with US$470 million. In 2019, a significant loss of around US$1.07 billion occurred, which was mitigated considerably when adjusted for goodwill to a loss of about US$479 million. Earnings rebounded strongly in 2020 and 2021 with profits of US$666 million and US$1.63 billion respectively in both reported and adjusted terms. This indicates the company experienced considerable earnings volatility, with a major negative event in 2019 being partly related to goodwill impairments or similar adjustments.

Overall, the data reflects an expanding asset base and recovering equity, with earnings showing significant variability particularly influenced by goodwill-related adjustments. The adjustment for goodwill reveals a somewhat less severe earnings impact in 2019, highlighting the importance of these adjustments in understanding the company's financial performance and position.

Net Profit Margin

The reported net profit margin demonstrates significant volatility from 2017 to 2021, beginning with a negative margin of -1.45% in 2017, improving to 4.9% in 2018, then declining sharply to -11.98% in 2019. It recovers to a positive 7.67% in 2020 and further increases to 13.2% in 2021. The adjusted net profit margin, which accounts for goodwill adjustments, follows a similar trend but shows less severe decline in 2019 (-5.38%), suggesting the impact of goodwill on net profitability during that period. Both metrics exhibit an overall improvement by 2021, indicating enhanced profitability.

Total Asset Turnover

Reported total asset turnover begins at 0.40 in 2017, increases to 0.48 in 2018, then declines slightly in 2019 and 2020 to 0.46 and 0.44 respectively, before rising significantly to 0.56 in 2021. The adjusted total asset turnover remains consistently higher than the reported ratio across all years, starting at 0.44 in 2017 and reaching 0.59 in 2021. This suggests that when goodwill is excluded, the efficiency in using assets to generate revenue is stronger. Overall, asset utilization shows improvement particularly in the last year.

Financial Leverage

The reported financial leverage ratio is relatively stable, increasing modestly from 1.94 in both 2017 and 2018 to around 2.08 in 2021. The adjusted financial leverage is higher in each year compared to the reported figure, rising from 2.14 in 2017 to 2.21 in 2021. The slight increase in leverage indicates a moderate reliance on debt financing, with adjustments for goodwill reflecting a somewhat greater leverage position than reported figures suggest.

Return on Equity (ROE)

Reported ROE displays considerable fluctuations, starting negative at -1.11% in 2017, improving to 4.52% in 2018, then sharply declining to -11.62% in 2019. It subsequently recovers to positive values, reaching 15.38% by 2021. The adjusted ROE demonstrates a smoother trend with less negative impact in 2019 (-5.96%) and higher gains in subsequent years, peaking at 17.29% in 2021. This indicates that goodwill adjustments provide a more favorable view of shareholder returns, especially during periods of volatility.

Return on Assets (ROA)

The reported ROA mirrors the trends of net profit margin and ROE, with a negative start at -0.58% in 2017, rising to 2.34% in 2018, then falling back to -5.53% in 2019. ROA improves to 3.37% in 2020 and reaches 7.4% in 2021. Adjusted ROA shows less drastic negative performance in 2019 (-2.64%) and consistently higher returns, ending at 7.82% in 2021. This reflects an increase in the efficiency of asset use to generate profits, moderated when goodwill adjustments are considered.

Summary

The data reveals that financial performance was highly volatile during 2017-2019, with sharp declines in profitability and returns, particularly in 2019. However, the company demonstrates a recovery trend from 2020 onwards with improving profitability, asset turnover, and returns. Adjustments for goodwill generally temper the negative swings observed in reported results, indicating that goodwill has contributed to distortions in reported profitability and efficiency measures. Financial leverage remains moderate and stable, with adjusted figures consistently higher, suggesting a slightly greater risk profile when goodwill is excluded. Overall, the improvement in key metrics by 2021 indicates enhanced operational efficiency and profitability.

Net Earnings (Loss) Attributable to Mosaic

The reported net earnings reveal considerable volatility over the examined period. Starting with a loss of approximately 107.2 million USD in 2017, the company experienced a significant reversal with a profit of 470 million USD in 2018. However, 2019 marked a steep decline with a substantial loss exceeding 1 billion USD. Recovery followed in 2020 and 2021, with profits reaching 666.1 million USD and 1.63 billion USD respectively, showing a strong upward trajectory at the end of the period.

The adjusted net earnings, which account for goodwill adjustments, mirror the general trend observed in reported earnings but with less severe losses in 2019. The adjusted loss in 2019 amounts to approximately 478.8 million USD, less negative than the reported figure, suggesting that goodwill impairments significantly affected the reported loss in that year. The adjusted figures align closely with the reported profits in the remaining years, indicating consistency post-adjustment.

Net Profit Margin

The reported net profit margin follows the earnings trend, displaying negative performance in 2017 at -1.45%, turning positive at 4.9% in 2018, then sharply decreasing to -11.98% in 2019. The margin recovered to 7.67% in 2020 and further improved to 13.2% in 2021, reflecting enhanced profitability.

The adjusted net profit margin presents a similar pattern but mitigates the decline in 2019 with a less pronounced dip to -5.38%. The adjustment indicates that non-operational factors, likely goodwill impairments, disproportionately impacted the 2019 margin. For the other years, adjusted margins closely match reported margins, reaffirming stable profitability trends apart from the isolated dip in 2019.

Overall Analysis

The period under review demonstrates significant earnings volatility with a notable impairment impact in 2019. The adjustment for goodwill reduces the apparent losses for 2019, suggesting that impairment charges heavily influenced the reported financial performance that year. The recovery in subsequent years, indicated by both reported and adjusted data, reveals an improvement in operational profitability and financial health. The upward trend in net profit margins in the last two years signifies stronger earnings quality and efficiency.

The financial data reveals several notable trends related to both reported and goodwill-adjusted figures over the five-year period ending in 2021.

Asset Base

The reported total assets show a generally increasing trend from 18,633.4 million US dollars in 2017 to 22,036.4 million US dollars in 2021. Despite a slight dip in 2019, the overall trajectory remains upward, indicating asset growth over the period. The adjusted total assets, which exclude goodwill, mirror this pattern, rising from 16,939.8 million US dollars in 2017 to 20,864.2 million US dollars in 2021. The adjustment reduces the asset base each year, but the increasing trend is consistent across both metrics.

Total Asset Turnover

The reported total asset turnover ratio shows variability but an overall improvement over the time frame. It increased from 0.40 in 2017 to 0.56 in 2021, with a peak in 2018 (0.48) followed by a slight decline and then a substantial rise in the last year. The adjusted total asset turnover exhibits a similar pattern, consistently higher than the reported ratio each year, progressing from 0.44 to 0.59 over the same period. This suggests enhanced efficiency in asset utilization when adjusted for goodwill.

Insights

The data indicates that while the company's asset base expanded, the efficiency in generating revenue from these assets also improved, particularly when intangible assets such as goodwill are excluded. The consistency in growth of adjusted assets alongside increasingly favorable adjusted turnover ratios points to better asset management and operational effectiveness. The divergence between reported and adjusted figures underscores the impact of goodwill on asset measurement and turnover analysis.

Total Assets

The reported total assets increased steadily from 18,633,400 thousand US dollars in 2017 to 22,036,400 thousand US dollars in 2021, showing a consistent growth over the five-year period. The adjusted total assets, which exclude goodwill, exhibit a similar upward trend, rising from 16,939,800 thousand US dollars in 2017 to 20,864,200 thousand US dollars in 2021. Although both reported and adjusted totals increased, the adjusted total assets consistently remain below the reported figures, reflecting the impact of goodwill on asset valuation.

Stockholders’ Equity

Reported total Mosaic stockholders’ equity experienced fluctuations over the period. It initially rose from 9,617,500 thousand US dollars in 2017 to 10,397,300 thousand US dollars in 2018, decreased notably to 9,185,500 thousand US dollars in 2019, then recovered slightly to reach 10,604,100 thousand US dollars in 2021. The adjusted equity, removing goodwill effects, follows a similar pattern but remains consistently lower, starting at 7,923,900 thousand US dollars in 2017 and ending at 9,431,900 thousand US dollars in 2021. This pattern indicates some volatility in equity levels, especially in the middle years, with overall moderate growth by 2021.

Financial Leverage

The reported financial leverage ratio remained fairly stable, with a slight increase from 1.94 in 2017 and 2018 to around 2.08 in 2021, peaking somewhat at 2.10 in 2019. The adjusted financial leverage ratio, which accounts for adjustments such as goodwill exclusion, is consistently higher than the reported leverage, starting at 2.14 in 2017 and reaching 2.21 in 2021. Both reported and adjusted leverage ratios suggest that the company maintained a relatively steady level of financial leverage, indicating a stable reliance on debt versus equity financing across the reported period.

Overall Trends and Insights

The company demonstrated a general growth in total assets and equity over the five years, albeit with some fluctuations in equity figures, especially when excluding goodwill. The consistently higher adjusted financial leverage reflects a more conservative base of equity when goodwill is excluded. The data suggest prudent capital management with steady asset growth and moderate leverage, indicating the company maintained balanced financial risk despite some volatility in equity.

Net Earnings (Loss) Trends

The reported net earnings attributable to the company show significant volatility over the five-year period. The company experienced losses in 2017 and 2019, with a notable deep loss in 2019 (-1,067,400 thousand USD). Conversely, years 2018, 2020, and 2021 showed positive earnings, with a substantial increase in 2021 reaching 1,630,600 thousand USD. Adjusted net earnings follow a similar pattern, with the primary difference observed in 2019, where adjusted earnings show a smaller loss (-478,800 thousand USD) compared to the reported figure.

Stockholders’ Equity Development

The reported total stockholders’ equity generally trends upward, increasing from 9,617,500 thousand USD in 2017 to 10,604,100 thousand USD in 2021, though there is a dip in 2019 to 9,185,500 thousand USD. Adjusted equity values show a consistent increase from 7,923,900 thousand USD in 2017 to 9,431,900 thousand USD in 2021 but also reflect a dip in 2019, highlighting the impact of goodwill or similar adjustments that reduce equity levels compared to reported figures.

Return on Equity (ROE) Analysis

Reported ROE mirrors the earnings volatility, with a negative return in 2017 (-1.11%) and 2019 (-11.62%), and positive returns in other years, culminating in a notable increase to 15.38% in 2021. The adjusted ROE tends to present a more stable and slightly higher performance, with less severe negative return in 2019 (-5.96%) and a peak of 17.29% in 2021. This suggests that adjustments, possibly excluding goodwill impairment or other non-recurring items, improve the apparent profitability and efficiency of equity use.

Overall Insights

The financial data reveals a pattern of recovery and strengthening after a challenging 2019, as indicated by significant losses and decreases in equity and ROE. Subsequent years show a marked improvement in profitability and return on equity, both on a reported and adjusted basis, suggesting effective management response or favorable market conditions driving performance improvement. The adjustment for goodwill notably tempers the reported losses and enhances return metrics, implying that impairment or write-downs affect the reported figures and provide a more conservative view of the company’s financial health.

The financial data over the five-year period exhibits significant fluctuations in key profitability and asset metrics.

Net Earnings (Loss) Attributable to Mosaic

Reported net earnings show a high level of volatility, with a loss of approximately $107.2 million in 2017, a subsequent gain in 2018 of $470 million, followed by a substantial loss of $1.067 billion in 2019. The earnings then recovered markedly in 2020 and 2021, reaching positive values of $666.1 million and $1.63 billion, respectively.

The adjusted net earnings more closely mirror the reported figures but reflect a less severe loss in 2019, indicating that goodwill adjustments significantly impacted that year's reported results. Specifically, the adjusted loss in 2019 is $478.8 million, less than half of the reported loss, suggesting that impairment or other goodwill-related items heavily influenced that year’s financial performance.

Total Assets

Reported total assets exhibit a generally increasing trend, rising from about $18.63 billion in 2017 to $22.04 billion in 2021, notwithstanding a slight dip in 2019 following growth in 2018. The adjusted total assets follow a similar pattern with consistently lower values due to the exclusion or adjustment of goodwill, growing from roughly $16.94 billion in 2017 to $20.86 billion in 2021.

Return on Assets (ROA)

The reported ROA fluctuates markedly, reflecting the volatility in net earnings. The ratio moved from a negative -0.58% in 2017 to a positive 2.34% in 2018, deteriorated sharply to -5.53% in 2019, and then improved to 3.37% and 7.40% in 2020 and 2021 respectively.

The adjusted ROA presents a somewhat smoother trend, with less pronounced negative impact in 2019 (-2.64%) compared to reported figures, and slightly higher positive returns in other years. This suggests that adjustments for goodwill positively affect the perceived asset profitability, especially in the year of significant losses.

Overall, the data reveals a pattern of recovery following a severe downturn in 2019, with both earnings and asset returns improving substantially by 2021. The adjustments for goodwill notably reduce the severity of losses and increase asset returns, indicating that intangible asset impairments had a significant, though temporary, impact on financial performance during the period analyzed.