Mosaic Co. (NYSE:MOS)

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Mosaic Co., Profitability Ratios: Reported vs. Adjusted

Mosaic Co., adjusted profitability 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	13.05%	7.82%	-11.86%	4.95%	-1.42%
Return on Equity (ROE)
Reported ROE	15.38%	6.95%	-11.62%	4.52%	-1.11%
Adjusted ROE	15.21%	7.09%	-11.50%	4.56%	-1.10%
Return on Assets (ROA)
Reported ROA	7.40%	3.37%	-5.53%	2.34%	-0.58%
Adjusted ROA	7.32%	3.43%	-5.47%	2.36%	-0.57%

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).

Profitability metrics from 2017 to 2021 exhibit significant volatility, characterized by a substantial contraction in 2019 followed by a robust recovery and expansion through 2021.

Net Profit Margin Analysis: The reported net profit margin experienced a sharp decline to -11.98% in 2019 after a brief recovery in 2018. However, a strong upward trend followed, with the margin reaching 13.20% by December 31, 2021. The adjusted net profit margin closely tracks these movements, showing only marginal differences from the reported figures, which indicates that mark-to-market adjustments for available-for-sale securities have a negligible impact on overall margin performance.
Return on Equity (ROE) Trends: ROE mirrored the volatility of the profit margins, falling to -11.62% in 2019 before surging to 15.38% in 2021. The variance between reported and adjusted ROE is minimal across the five-year period, suggesting that the valuation of available-for-sale securities did not significantly distort the measurement of returns generated on shareholder equity.
Return on Assets (ROA) Performance: ROA followed a consistent pattern with other profitability ratios, hitting a low of -5.53% in 2019 and recovering to 7.40% by the end of 2021. The adjusted ROA remains closely aligned with the reported ROA, further confirming that the underlying drivers of asset efficiency are operational rather than related to the mark-to-market valuation of investments.

The consistency between reported and adjusted ratios suggests that the volatility observed is driven by core operational performance rather than investment fluctuations. The period concludes with a marked improvement in all profitability indicators, with 2021 representing the peak performance level across the analyzed timeframe.

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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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,613,000)	678,900)	(1,056,500)	474,600)	(105,500)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Profitability Ratio
Adjusted net profit margin²	13.05%	7.82%	-11.86%	4.95%	-1.42%

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 × 1,613,000 ÷ 12,357,400 = 13.05%

The financial performance from 2017 to 2021 is characterized by high volatility, with a notable transition from intermittent losses to significant profitability. A cyclical pattern is evident, with a substantial downturn occurring in 2019 followed by a strong recovery trend peaking in 2021.

Adjusted Net Profit Margin Trends: The adjusted net profit margin experienced significant fluctuations, starting at -1.42% in 2017 and improving to 4.95% in 2018. A sharp decline followed in 2019, where the margin dropped to -11.86%. A recovery phase began in 2020 with a margin of 7.82%, culminating in a period high of 13.05% by the end of 2021.
Earnings Volatility and Recovery: Adjusted net earnings mirrored the margin trends, shifting from a loss of 105.5 million USD in 2017 to a profit of 474.6 million USD in 2018. The 2019 fiscal year recorded the most significant loss of the period at 1,056.5 million USD. Subsequent years show an aggressive upward trajectory, with adjusted earnings reaching 1.613 billion USD in 2021.
Correlation Between Reported and Adjusted Metrics: A high degree of correlation is observed between reported and adjusted figures throughout the five-year period. The variance between the two metrics remains marginal, indicating that non-recurring or adjusting items had a limited impact on the overall profitability profile. The reported net profit margin followed a nearly identical trajectory to the adjusted margin, ending the period at 13.20%.

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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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,613,000)	678,900)	(1,056,500)	474,600)	(105,500)
Total Mosaic stockholders’ equity	10,604,100)	9,581,400)	9,185,500)	10,397,300)	9,617,500)
Profitability Ratio
Adjusted ROE²	15.21%	7.09%	-11.50%	4.56%	-1.10%

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 ÷ Total Mosaic stockholders’ equity
= 100 × 1,613,000 ÷ 10,604,100 = 15.21%

The financial performance from 2017 to 2021 is characterized by significant volatility in both net earnings and return on equity (ROE), followed by a strong recovery and expansion phase. The period is marked by alternating years of losses and profits, with a notable peak in profitability occurring in the final year of the observed period.

Earnings Volatility and Growth: Net earnings exhibited a cyclical and unstable pattern between 2017 and 2019, moving from a loss of approximately 107 million US dollars in 2017 to a profit of 470 million US dollars in 2018, before plunging to a substantial loss of over 1.06 billion US dollars in 2019. However, a consistent upward trajectory began in 2020, with earnings recovering to 666.1 million US dollars and accelerating sharply to 1.63 billion US dollars by December 31, 2021.
Adjusted Return on Equity (ROE) Trends: The Adjusted ROE mirrors the volatility seen in net earnings, shifting from -1.10% in 2017 to 4.56% in 2018. A significant contraction occurred in 2019, where the Adjusted ROE dropped to -11.50%. This downturn was followed by a robust recovery, with the ratio climbing to 7.09% in 2020 and reaching a period high of 15.21% in 2021, indicating a substantial improvement in the efficiency of generating profits from shareholders' equity.
Comparison of Reported and Adjusted Metrics: A close correlation is observed between reported and adjusted figures throughout the five-year period. The variance between reported and adjusted net earnings remains relatively narrow, suggesting that non-recurring items or adjustments had a limited impact on the overall financial trajectory. Similarly, the difference between Reported ROE and Adjusted ROE is marginal, with the two metrics moving in tandem across all observed years.

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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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net earnings (loss) attributable to Mosaic	1,613,000)	678,900)	(1,056,500)	474,600)	(105,500)
Total assets	22,036,400)	19,789,800)	19,298,500)	20,119,200)	18,633,400)
Profitability Ratio
Adjusted ROA²	7.32%	3.43%	-5.47%	2.36%	-0.57%

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 ÷ Total assets
= 100 × 1,613,000 ÷ 22,036,400 = 7.32%

The financial performance between 2017 and 2021 is characterized by significant volatility in both net earnings and asset utilization efficiency. A pattern of alternating losses and gains is evident, culminating in a strong upward trajectory by the end of the observed period.

Net Earnings Trends: Reported net earnings exhibited substantial fluctuations, moving from a loss of US$ 107.2 million in 2017 to a peak of US$ 1.63 billion in 2021. A severe contraction occurred in 2019, where losses reached US$ 1.067 billion, followed by a sharp recovery in 2020 and further expansion in 2021.
Return on Assets (ROA) Analysis: The Reported ROA closely mirrored the volatility of net earnings, reaching a trough of -5.53% in 2019. This decline was followed by a consistent recovery, with the ratio increasing to 3.37% in 2020 and peaking at 7.40% in 2021, indicating a significant improvement in the efficiency of asset employment to generate profit.
Adjusted vs. Reported Performance: A narrow variance exists between reported and adjusted metrics throughout the five-year period. Adjusted ROA followed an almost identical trajectory to reported ROA, with the 2021 adjusted figure of 7.32% closely aligned with the reported 7.40%. This suggests that non-recurring items or accounting adjustments had a negligible impact on the overall trend of asset returns.

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