Mosaic Co. (NYSE:MOS)

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Mosaic Co., effective income tax rate (EITR) reconciliation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
U.S. federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	35.00%
State and local income taxes, net of federal income tax benefit	1.20%	-7.00%	2.60%	2.00%	-0.10%
Percentage depletion in excess of basis	-1.10%	-10.30%	2.50%	-6.70%	-13.20%
Impact of non-U.S. earnings	6.30%	42.10%	5.30%	11.80%	-46.90%
Change in valuation allowance	-0.30%	-330.00%	-3.10%	-15.20%	148.80%
Phosphates goodwill impairment	0.00%	0.00%	-5.00%	0.00%	0.00%
Non-U.S. incentives	-5.70%	-35.60%	0.00%	0.00%	0.00%
Share-based excess cost (benefits)	0.00%	0.00%	0.00%	0.70%	2.00%
Other items	5.50%	0.00%	-5.40%	0.40%	6.70%
Effective tax rate	26.90%	-319.80%	17.90%	14.00%	132.30%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The effective income tax rate exhibited extreme volatility between 2017 and 2021, characterized by significant fluctuations that deviate substantially from the U.S. federal statutory tax rate. While the statutory rate stabilized at 21.00% following a decrease from 35.00% in 2017, the effective tax rate ranged from a high of 132.30% in 2017 to a low of -319.80% in 2020.

Valuation Allowance Impact: The primary driver of the observed volatility was the change in valuation allowances. A substantial positive adjustment of 148.80% in 2017 contributed to an abnormally high effective tax rate. Conversely, a massive negative adjustment of -330.00% in 2020 resulted in a deeply negative effective tax rate, indicating a significant tax benefit realized in that period.
International Tax Factors: Non-U.S. financial activities introduced significant variance into the tax calculations. The impact of non-U.S. earnings fluctuated from a benefit of -46.90% in 2017 to a cost of 42.10% in 2020. Additionally, non-U.S. incentives began appearing in 2020, providing a benefit of -35.60% in that year and -5.70% in 2021.
Depletion and Statutory Adjustments: Percentage depletion in excess of basis generally acted as a tax reducer, with notable benefits in 2017 (-13.20%) and 2020 (-10.30%), though it briefly shifted to a tax cost of 2.50% in 2019. State and local income taxes remained relatively low, except for a significant benefit of -7.00% recorded in 2020.
Ancillary Tax Items: Other components had a marginal effect compared to valuation allowances. Share-based excess costs provided minor positive impacts in 2017 and 2018, while a phosphates goodwill impairment in 2019 reduced the tax burden by 5.00%.

By December 31, 2021, the effective tax rate normalized to 26.90%, aligning more closely with the 21.00% statutory rate than in previous years. This suggests a reduction in the influence of the volatile non-recurring adjustments that dominated the 2017 and 2020 reporting periods.

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Mosaic Co., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Deferred revenue	—)	62,400)	—)	—)	252,000)
Alternative minimum tax credit carryforwards	—)	—)	—)	76,500)	46,800)
Capital loss carryforwards	—)	100)	—)	3,000)	100)
Foreign tax credit carryforwards	775,100)	628,600)	522,500)	493,500)	322,900)
Net operating loss carryforwards	232,300)	321,800)	420,000)	408,900)	112,000)
Pension plans and other benefits	19,800)	34,200)	43,800)	33,400)	2,100)
Asset retirement obligations	337,300)	262,900)	232,100)	187,600)	174,100)
Disallowed interest expense under §163(j)	31,600)	68,800)	58,100)	—)	—)
Other assets	351,200)	287,600)	349,300)	388,800)	169,700)
Deferred tax assets	1,747,300)	1,666,400)	1,625,800)	1,591,700)	1,079,700)
Valuation allowance	(774,700)	(683,000)	(1,457,100)	(1,530,500)	(584,100)
Net deferred tax assets	972,600)	983,400)	168,700)	61,200)	495,600)
Depreciation and amortization	(456,200)	(232,500)	(70,700)	(317,300)	(864,200)
Depletion	(430,100)	(527,000)	(530,700)	(390,800)	(260,900)
Partnership tax basis differences	(66,300)	(69,000)	(69,800)	(64,600)	(67,600)
Undistributed earnings of non-U.S. subsidiaries	—)	(3,800)	(3,800)	(15,000)	(15,000)
Other liabilities	(39,100)	(32,500)	(19,000)	(10,300)	(150,600)
Deferred tax liabilities	(991,700)	(864,800)	(694,000)	(798,000)	(1,358,300)
Net deferred tax assets (liabilities)	(19,100)	118,600)	(525,300)	(736,800)	(862,700)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The net deferred tax position has evolved from a substantial net liability in 2017 to a near-neutral state by 2021. While gross deferred tax assets have experienced a steady upward trajectory, the net impact has been heavily modulated by significant fluctuations in the valuation allowance and volatility within deferred tax liabilities associated with depreciation and amortization.

Deferred Tax Asset Composition: Gross deferred tax assets grew consistently from $1.08 billion in 2017 to $1.75 billion in 2021. A primary driver of this increase was the foreign tax credit carryforwards, which rose from $322.9 million to $775.1 million over the period. Asset retirement obligations also showed a steady increase, climbing from $174.1 million to $337.3 million. Conversely, net operating loss carryforwards peaked at $420 million in 2019 before declining to $232.3 million by the end of 2021.
Valuation Allowance Trends: The valuation allowance demonstrated significant volatility, indicating shifts in the assessment of the realizability of deferred tax assets. The allowance spiked to $1.53 billion in 2018, almost entirely offsetting gross assets. This figure was subsequently reduced to $683 million by 2020, with a slight increase to $774.7 million in 2021, suggesting a period of fluctuating confidence in the availability of future taxable income to realize these assets.
Deferred Tax Liability Drivers: Total deferred tax liabilities decreased from $1.36 billion in 2017 to a low of $694 million in 2019, before trending upward to $991.7 million in 2021. This movement was largely influenced by depreciation and amortization, which plummeted from $864.2 million in 2017 to $70.7 million in 2019, before rebounding to $456.2 million in 2021. Depletion remained a consistent liability component, peaking at $530.7 million in 2019 and ending at $430.1 million in 2021.
Net Position Analysis: The net deferred tax position transitioned from a net liability of $862.7 million in 2017 to a net asset of $118.6 million in 2020. However, by December 31, 2021, the position returned to a modest net liability of $19.1 million. This trend reflects the offsetting effects of growing tax assets against the recovery of depreciation-related tax liabilities.

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Mosaic Co., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Deferred tax assets	997,100)	1,179,400)	515,400)	343,800)	254,600)
	Deferred tax liabilities	1,016,200)	1,060,800)	1,040,700)	1,080,600)	1,117,300)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Between 2017 and 2021, the company's deferred tax profile shifted significantly, characterized by a substantial increase in deferred tax assets and a gradual decline in deferred tax liabilities. This evolution reflects a narrowing gap between future tax benefits and future tax obligations over the five-year period.

Deferred Tax Assets: A strong upward trajectory was observed from 2017 to 2020, with values rising from 254,600 thousand US$ to a peak of 1,179,400 thousand US$. This represents an increase of approximately 363% over four years. A subsequent reduction occurred in 2021, with the balance decreasing to 997,100 thousand US$, though the level remained substantially higher than the 2017 baseline.
Deferred Tax Liabilities: Deferred tax liabilities remained relatively stable throughout the period, exhibiting a slight downward trend. The balance moved from 1,117,300 thousand US$ in 2017 to 1,016,200 thousand US$ in 2021. The most notable stability occurred between 2018 and 2020, where the liability fluctuated within a narrow range of approximately 20 million US$.
Net Deferred Tax Position: The relationship between assets and liabilities shifted from a heavy net liability position in 2017 to a near-equilibrium state by 2021. In 2017, the net deferred tax liability was 862,700 thousand US$. By 2020, the position inverted to a net deferred tax asset of 118,600 thousand US$, before returning to a marginal net liability of 19,100 thousand US$ at the end of 2021.

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Mosaic Co., Financial Data: Reported vs. Adjusted

Mosaic Co., adjustments to financial statements

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	22,036,400)	19,789,800)	19,298,500)	20,119,200)	18,633,400)
Less: Noncurrent deferred tax assets, net	997,100)	1,179,400)	515,400)	343,800)	254,600)
Total assets (adjusted)	21,039,300)	18,610,400)	18,783,100)	19,775,400)	18,378,800)
Adjustment to Total Liabilities
Total liabilities (as reported)	11,287,900)	10,034,600)	9,930,900)	9,514,500)	8,994,300)
Less: Noncurrent deferred tax liabilities, net	1,016,200)	1,060,800)	1,040,700)	1,080,600)	1,117,300)
Total liabilities (adjusted)	10,271,700)	8,973,800)	8,890,200)	8,433,900)	7,877,000)
Adjustment to Total Mosaic Stockholders’ Equity
Total Mosaic stockholders’ equity (as reported)	10,604,100)	9,581,400)	9,185,500)	10,397,300)	9,617,500)
Less: Net deferred tax assets (liabilities)	(19,100)	118,600)	(525,300)	(736,800)	(862,700)
Total Mosaic stockholders’ equity (adjusted)	10,623,200)	9,462,800)	9,710,800)	11,134,100)	10,480,200)
Adjustment to Net Earnings (loss) Attributable To Mosaic
Net earnings (loss) attributable to Mosaic (as reported)	1,630,600)	666,100)	(1,067,400)	470,000)	(107,200)
Add: Deferred income tax expense (benefit)	107,900)	(675,400)	(263,100)	(96,400)	616,600)
Net earnings (loss) attributable to Mosaic (adjusted)	1,738,500)	(9,300)	(1,330,500)	373,600)	509,400)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The removal of deferred taxes results in a consistent reduction of both total assets and total liabilities, indicating a significant presence of deferred tax items on the reported balance sheet. This adjustment modifies the perceived financial position of the entity, generally increasing the equity position in the earlier years of the period analyzed.

Asset and Liability Trends: Reported total assets grew from $18.63 billion in 2017 to $22.03 billion in 2021, while adjusted total assets remained lower throughout the period, ending at $21.03 billion. Similarly, reported total liabilities increased from $8.99 billion in 2017 to $11.28 billion in 2021, whereas adjusted liabilities were consistently reduced, ending at $10.27 billion in 2021.
Equity Position Shifts: Adjusted stockholders' equity was higher than reported equity between 2017 and 2020. In 2017, the adjusted equity of $10.48 billion represented a notable increase over the reported $9.61 billion. This gap narrowed over time, nearly converging by December 31, 2021, where adjusted equity stood at $10.62 billion compared to $10.60 billion reported.
Net Earnings Volatility: Adjustments to deferred taxes caused substantial fluctuations in net earnings. In 2017, the adjustment reversed a reported loss of $107.2 million into a profit of $509.4 million. Conversely, in 2019, the adjustment exacerbated a reported loss of $1.06 billion to an adjusted loss of $1.33 billion. By 2021, adjusted net earnings were $1.73 billion, an increase over the reported $1.63 billion.

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Mosaic Co., Financial Ratios: Reported vs. Adjusted

Mosaic Co., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	13.20%	7.67%	-11.98%	4.90%	-1.45%
Adjusted net profit margin	14.07%	-0.11%	-14.94%	3.90%	6.88%
Total Asset Turnover
Reported total asset turnover	0.56	0.44	0.46	0.48	0.40
Adjusted total asset turnover	0.59	0.47	0.47	0.48	0.40
Financial Leverage
Reported financial leverage	2.08	2.07	2.10	1.94	1.94
Adjusted financial leverage	1.98	1.97	1.93	1.78	1.75
Return on Equity (ROE)
Reported ROE	15.38%	6.95%	-11.62%	4.52%	-1.11%
Adjusted ROE	16.37%	-0.10%	-13.70%	3.36%	4.86%
Return on Assets (ROA)
Reported ROA	7.40%	3.37%	-5.53%	2.34%	-0.58%
Adjusted ROA	8.26%	-0.05%	-7.08%	1.89%	2.77%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

An analysis of the financial performance from 2017 to 2021 reveals significant volatility in profitability metrics, which is further highlighted when adjusting for deferred taxes. The divergence between reported and adjusted figures indicates that deferred tax accounting had a material impact on the perceived financial health of the organization during this period.

Profitability Margins and Returns: The reported net profit margin exhibits high variance, fluctuating from a low of -11.98% in 2019 to a peak of 13.20% in 2021. The adjusted net profit margin reveals a more stark contrast in specific years; notably, in 2020, the reported margin of 7.67% shifts to a marginal loss of -0.11% upon the removal of deferred taxes. This pattern is mirrored in the Return on Equity (ROE) and Return on Assets (ROA). While both reported and adjusted returns peaked in 2021—with adjusted ROE at 16.37% and adjusted ROA at 8.26%—the adjusted figures show deeper losses in 2019 and 2020 compared to the reported values.
Asset Utilization: Total asset turnover demonstrates a general upward trend in efficiency over the five-year window. Reported turnover increased from 0.40 in 2017 to 0.56 in 2021. The adjustment for deferred taxes resulted in minimal changes to this ratio, although the adjusted turnover slightly exceeded the reported figure in 2021, reaching 0.59.
Financial Leverage: A consistent gap exists between reported and adjusted financial leverage. Reported leverage remained relatively stable, ranging between 1.94 and 2.10. However, the adjusted leverage is consistently lower, ranging from 1.75 to 1.98. This discrepancy suggests that deferred tax liabilities constitute a significant component of the total liabilities used in the reported leverage calculation.

Overall, the financial trajectory indicates a strong recovery in both profitability and operational efficiency by the end of 2021. The removal of deferred taxes suggests that reported profitability was overstated in 2020 and understated in 2017 and 2021, while simultaneously indicating that the organization's actual financial leverage is lower than reported.

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net earnings (loss) attributable to Mosaic	1,630,600)	666,100)	(1,067,400)	470,000)	(107,200)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Profitability Ratio
Net profit margin¹	13.20%	7.67%	-11.98%	4.90%	-1.45%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,738,500)	(9,300)	(1,330,500)	373,600)	509,400)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Profitability Ratio
Adjusted net profit margin²	14.07%	-0.11%	-14.94%	3.90%	6.88%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net earnings (loss) attributable to Mosaic ÷ Net sales
= 100 × 1,630,600 ÷ 12,357,400 = 13.20%

² Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to Mosaic ÷ Net sales
= 100 × 1,738,500 ÷ 12,357,400 = 14.07%

The financial performance from 2017 to 2021 is characterized by significant volatility in profitability, marked by alternating periods of net losses and gains. A notable cyclical pattern is observed, with a severe downturn in 2019 followed by a strong recovery trend that culminated in a five-year peak by the end of 2021.

Adjusted Net Profit Margin Trends: The adjusted net profit margin exhibited extreme fluctuations, starting at 6.88% in 2017 before declining to 3.90% in 2018. A substantial contraction occurred in 2019, where the margin fell to -14.94%. Recovery began in 2020 as the margin narrowed to -0.11%, eventually shifting to a significant positive of 14.07% in 2021, representing the highest margin within the analyzed period.
Comparison Between Reported and Adjusted Profitability: Divergences between reported and adjusted margins indicate the presence of significant non-recurring items. In 2017, the adjusted margin was positive (6.88%) while the reported margin was negative (-1.45%). Conversely, in 2020, the reported margin showed a recovery to 7.67%, while the adjusted margin remained slightly negative at -0.11%. By 2021, both metrics aligned upward, with the adjusted net profit margin (14.07%) slightly exceeding the reported net profit margin (13.20%).
Earnings Volatility and Recovery: The transition from a reported net loss of 1.067 billion US dollars in 2019 to a reported net profit of 1.631 billion US dollars in 2021 demonstrates a rapid reversal in earnings capacity. This trajectory is mirrored in the adjusted net earnings, which moved from a loss of 1.331 billion US dollars in 2019 to a profit of 1.739 billion US dollars in 2021.

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Total assets	22,036,400)	19,789,800)	19,298,500)	20,119,200)	18,633,400)
Activity Ratio
Total asset turnover¹	0.56	0.44	0.46	0.48	0.40
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Adjusted total assets	21,039,300)	18,610,400)	18,783,100)	19,775,400)	18,378,800)
Activity Ratio
Adjusted total asset turnover²	0.59	0.47	0.47	0.48	0.40

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 12,357,400 ÷ 22,036,400 = 0.56

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 12,357,400 ÷ 21,039,300 = 0.59

An analysis of asset utilization from 2017 to 2021 reveals a general upward trajectory in operational efficiency, despite fluctuations in the total asset base. While both reported and adjusted metrics show growth over the five-year period, the adjusted figures suggest a more stable and higher level of efficiency in generating revenue from assets.

Asset Base Evolution: Reported total assets increased from 18.63 billion US dollars in 2017 to 22.04 billion US dollars in 2021. Adjusted total assets followed a comparable trend, rising from 18.38 billion US dollars to 21.04 billion US dollars. The adjusted asset base remained consistently lower than the reported total, indicating a systematic reduction of specific balance sheet items to isolate operational assets.
Asset Turnover Performance: The reported total asset turnover ratio grew from 0.40 in 2017 to 0.56 in 2021, though it experienced a slight decline between 2018 and 2020. The adjusted total asset turnover showed a more resilient trend, climbing from 0.40 in 2017 to 0.59 in 2021. The most significant expansion in efficiency occurred between 2020 and 2021, where the adjusted ratio increased by 0.12 points.
Comparative Efficiency Analysis: A divergence between reported and adjusted turnover ratios emerged after 2018. Between 2019 and 2020, the reported turnover ratio declined from 0.46 to 0.44, while the adjusted turnover remained steady at 0.47. This suggests that the adjustments to the asset base neutralized negative variances in reported efficiency, providing a more optimistic view of asset productivity that culminated in the period high of 0.59 in 2021.

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets	22,036,400)	19,789,800)	19,298,500)	20,119,200)	18,633,400)
Total Mosaic stockholders’ equity	10,604,100)	9,581,400)	9,185,500)	10,397,300)	9,617,500)
Solvency Ratio
Financial leverage¹	2.08	2.07	2.10	1.94	1.94
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	21,039,300)	18,610,400)	18,783,100)	19,775,400)	18,378,800)
Adjusted total Mosaic stockholders’ equity	10,623,200)	9,462,800)	9,710,800)	11,134,100)	10,480,200)
Solvency Ratio
Adjusted financial leverage²	1.98	1.97	1.93	1.78	1.75

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Mosaic stockholders’ equity
= 22,036,400 ÷ 10,604,100 = 2.08

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Mosaic stockholders’ equity
= 21,039,300 ÷ 10,623,200 = 1.98

An examination of the balance sheet components from 2017 to 2021 indicates a general expansion in the asset base and a gradual increase in financial leverage. Reported total assets grew from 18.63 billion USD to 22.04 billion USD, while adjusted total assets followed a similar trajectory, rising from 18.38 billion USD to 21.04 billion USD. Stockholders' equity remained relatively stable over the period, with adjusted equity starting at 10.48 billion USD in 2017 and concluding at 10.62 billion USD in 2021.

Reported Financial Leverage: The reported leverage ratio exhibited a steady increase, moving from 1.94 in 2017 to a peak of 2.10 in 2019, before stabilizing at 2.08 by the end of 2021. This suggests a moderate increase in the utilization of debt relative to equity over the five-year window.
Adjusted Financial Leverage: Adjusted financial leverage demonstrated a consistent annual upward trend, increasing from 1.75 in 2017 to 1.98 in 2021. This metric remained consistently lower than the reported leverage ratio across all periods, indicating that adjustments to the asset and equity bases result in a lower calculated leverage position.
Leverage Convergence: A narrowing gap is observed between the reported and adjusted financial leverage ratios. The variance between the two metrics decreased from 0.19 in 2017 to 0.10 in 2021. This convergence indicates that the adjusted leverage is trending closer to the reported leverage over time, despite both metrics increasing.

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net earnings (loss) attributable to Mosaic	1,630,600)	666,100)	(1,067,400)	470,000)	(107,200)
Total Mosaic stockholders’ equity	10,604,100)	9,581,400)	9,185,500)	10,397,300)	9,617,500)
Profitability Ratio
ROE¹	15.38%	6.95%	-11.62%	4.52%	-1.11%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,738,500)	(9,300)	(1,330,500)	373,600)	509,400)
Adjusted total Mosaic stockholders’ equity	10,623,200)	9,462,800)	9,710,800)	11,134,100)	10,480,200)
Profitability Ratio
Adjusted ROE²	16.37%	-0.10%	-13.70%	3.36%	4.86%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net earnings (loss) attributable to Mosaic ÷ Total Mosaic stockholders’ equity
= 100 × 1,630,600 ÷ 10,604,100 = 15.38%

² Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to Mosaic ÷ Adjusted total Mosaic stockholders’ equity
= 100 × 1,738,500 ÷ 10,623,200 = 16.37%

An analysis of the financial performance from 2017 to 2021 reveals substantial volatility in net earnings and the resulting return on equity (ROE). While stockholders' equity remained relatively stable throughout the period, the wide fluctuations in net income led to significant swings in both reported and adjusted profitability metrics.

Net Earnings and ROE Volatility: A pattern of instability is evident in net earnings, which fluctuated between significant losses and substantial gains. Reported net earnings reached a low of -1.067 billion US$ in 2019 before recovering to a peak of 1.631 billion US$ in 2021. This volatility is mirrored in the ROE, which transitioned from -11.62% in 2019 to 15.38% in 2021, indicating a sharp recovery in capital efficiency toward the end of the analyzed period.
Comparison of Reported vs. Adjusted Metrics: Significant divergences between reported and adjusted figures are observed, particularly in 2017 and 2020. In 2017, reported net earnings were negative (-107.2 million US$), whereas adjusted net earnings were positive (509.4 million US$), resulting in an Adjusted ROE of 4.86% compared to a Reported ROE of -1.11%. Similarly, in 2020, reported net earnings were positive (666.1 million US$) while adjusted net earnings were slightly negative (-9.3 million US$), causing the Adjusted ROE to drop to -0.10% while the Reported ROE stood at 6.95%.
Equity Base Stability: Total stockholders' equity exhibited relative consistency, with reported equity fluctuating within a range of approximately 9.18 billion US$ to 10.60 billion US$. The stability of the equity base suggests that the dramatic changes in ROE were driven primarily by operational earnings volatility rather than significant changes in the company's capital structure.
Trend Analysis of Adjusted ROE: The Adjusted ROE demonstrates a cyclical trajectory. After a period of moderate performance in 2017 and 2018 (4.86% and 3.36%), a severe decline occurred in 2019, reaching -13.70%. A subsequent recovery phase is observed through 2020 and 2021, culminating in a peak Adjusted ROE of 16.37% in 2021, the highest value recorded in the five-year period.

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net earnings (loss) attributable to Mosaic	1,630,600)	666,100)	(1,067,400)	470,000)	(107,200)
Total assets	22,036,400)	19,789,800)	19,298,500)	20,119,200)	18,633,400)
Profitability Ratio
ROA¹	7.40%	3.37%	-5.53%	2.34%	-0.58%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,738,500)	(9,300)	(1,330,500)	373,600)	509,400)
Adjusted total assets	21,039,300)	18,610,400)	18,783,100)	19,775,400)	18,378,800)
Profitability Ratio
Adjusted ROA²	8.26%	-0.05%	-7.08%	1.89%	2.77%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net earnings (loss) attributable to Mosaic ÷ Total assets
= 100 × 1,630,600 ÷ 22,036,400 = 7.40%

² Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to Mosaic ÷ Adjusted total assets
= 100 × 1,738,500 ÷ 21,039,300 = 8.26%

The financial performance from 2017 through 2021 is characterized by significant volatility in earnings and return on assets, with a pronounced recovery trend emerging in the final two years of the period.

Net Earnings Trends: Reported net earnings fluctuated between losses and profits, reaching a minimum of negative 1.067 billion US dollars in 2019 and a peak of 1.631 billion US dollars in 2021. Adjusted net earnings exhibited higher volatility, specifically in 2019 when the loss expanded to 1.331 billion US dollars, suggesting that adjustments removed certain gains or added expenses that impacted the reported figure.
Return on Assets (ROA) Analysis: The Reported ROA showed an unstable trajectory, moving from -0.58% in 2017 to 7.40% in 2021. The Adjusted ROA demonstrated more extreme variance, dropping to a low of -7.08% in 2019 before recovering sharply to 8.26% by the end of 2021. The consistent gap between reported and adjusted ROA indicates that non-operating items or specific accounting adjustments consistently influenced the assessment of asset efficiency.
Asset Base Evolution: Both reported and adjusted total assets maintained a relatively stable trajectory with a gradual upward trend. Reported total assets grew from 18.633 billion US dollars in 2017 to 22.036 billion US dollars in 2021. Because the asset base grew steadily while ROA fluctuated wildly, it is evident that the changes in profitability ratios were driven primarily by earnings volatility rather than significant changes in the company's capital structure or asset scale.

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