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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Mosaic Co., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net operating profit after taxes (NOPAT)¹	1,881,191)	136,357)	(1,197,855)	515,089)	610,470)
Cost of capital²	21.14%	18.98%	16.46%	19.44%	18.33%
Invested capital³	15,843,300)	14,653,500)	15,092,200)	15,589,131)	15,024,306)

Economic profit⁴	(1,467,880)	(2,644,573)	(3,682,756)	(2,514,715)	(2,142,897)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,881,191 – 21.14% × 15,843,300 = -1,467,880

An analysis of the financial performance from 2017 to 2021 reveals that the company consistently failed to generate positive economic profit, indicating that returns on invested capital remained below the required cost of capital throughout the entire period. While operational profitability showed signs of significant recovery toward the end of the period, the overall economic value added remained negative.

Net Operating Profit After Taxes (NOPAT): NOPAT exhibited extreme volatility over the five-year span. A downward trend was observed from 2017 to 2019, culminating in a substantial loss of 1,197,855 thousand US$. This was followed by a sharp recovery, with NOPAT turning positive in 2020 and reaching a period high of 1,881,191 thousand US$ in 2021, suggesting a strong cyclical rebound in operational earnings.
Cost of Capital and Invested Capital: The cost of capital demonstrated a general upward trend, increasing from 18.33% in 2017 to 21.14% in 2021, despite a temporary dip in 2019. During the same timeframe, invested capital remained relatively stable, fluctuating between a low of 14,653,500 thousand US$ in 2020 and a high of 15,843,300 thousand US$ in 2021. The rising cost of capital increased the financial burden required to justify the invested capital base.
Economic Profit Analysis: Economic profit remained negative across all reported years, representing a persistent destruction of shareholder value. The deficit widened to its peak in 2019 at negative 3,682,756 thousand US$, coinciding with the lowest NOPAT. Although economic profit improved steadily from 2020 to 2021, ending at negative 1,467,880 thousand US$, the company did not achieve a positive economic value added status by the end of the analyzed period.

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Mosaic Co., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net earnings (loss) attributable to Mosaic	1,630,600)	666,100)	(1,067,400)	470,000)	(107,200)
Deferred income tax expense (benefit)¹	107,900)	(675,400)	(263,100)	(96,400)	616,600)
Increase (decrease) in allowance for doubtful accounts²	100)	(3,100)	2,200)	(1,000)	(400)
Increase (decrease) in equity equivalents³	108,000)	(678,500)	(260,900)	(97,400)	616,200)
Interest expense	194,300)	214,100)	216,000)	215,800)	171,300)
Interest expense, operating lease liability⁴	5,952)	8,333)	11,840)	14,392)	13,392)
Adjusted interest expense	200,252)	222,433)	227,840)	230,192)	184,692)
Tax benefit of interest expense⁵	(42,053)	(46,711)	(47,846)	(48,340)	(64,642)
Adjusted interest expense, after taxes⁶	158,199)	175,722)	179,994)	181,852)	120,050)
Interest income	(25,200)	(33,500)	(33,100)	(49,700)	(33,200)
Investment income, before taxes	(25,200)	(33,500)	(33,100)	(49,700)	(33,200)
Tax expense (benefit) of investment income⁷	5,292)	7,035)	6,951)	10,437)	11,620)
Investment income, after taxes⁸	(19,908)	(26,465)	(26,149)	(39,263)	(21,580)
Net income (loss) attributable to noncontrolling interest	4,300)	(500)	(23,400)	(100)	3,000)
Net operating profit after taxes (NOPAT)	1,881,191)	136,357)	(1,197,855)	515,089)	610,470)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in equity equivalents to net earnings (loss) attributable to Mosaic.

⁴ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 124,000 × 4.80% = 5,952

⁵ 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 200,252 × 21.00% = 42,053

⁶ Addition of after taxes interest expense to net earnings (loss) attributable to Mosaic.

⁷ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 25,200 × 21.00% = 5,292

⁸ Elimination of after taxes investment income.

The financial performance displayed over the reported periods reveals significant volatility in key profitability measures.

Net Earnings (Loss) Attributable to Mosaic: The net earnings figures exhibit substantial fluctuations across the five-year span. In 2017, the company recorded a net loss of approximately $107.2 million. This shifted positively in 2018, showing a net profit of $470 million. However, this trend reversed sharply in 2019, with net losses deepening to roughly $1.067 billion. The year 2020 marked a recovery with net earnings rising to $666.1 million, followed by further strong gains in 2021, reaching about $1.63 billion. This pattern indicates a high degree of instability in profitability, with pronounced losses in 2017 and 2019 contrasted by substantial profits in 2018, 2020, and 2021.
Net Operating Profit After Taxes (NOPAT): The NOPAT values similarly demonstrate marked variability. In 2017, NOPAT was approximately $610.5 million, followed by a decline to $515.1 million in 2018. The most notable change occurred in 2019, with NOPAT plunging to a negative $1.198 billion, signaling operational challenges. In 2020, NOPAT rebounded to $136.4 million, and then grew significantly to about $1.88 billion in 2021. The results suggest a recovery in operational efficiency beginning in 2020 after a considerable downturn in 2019, with 2021 marking the highest operational profitability within the period.

Overall, the data demonstrates a pattern of extreme fluctuations in both net earnings and operating profitability. The year 2019 represents a significant downturn in both measures, followed by a phased recovery in the subsequent years. The company’s financial results reflect considerable volatility possibly driven by external market conditions or internal operational factors that affected profitability during the reviewed timeframe.

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Mosaic Co., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Provision for (benefit from) income taxes	597,700)	(578,500)	(224,700)	77,100)	494,900)
Less: Deferred income tax expense (benefit)	107,900)	(675,400)	(263,100)	(96,400)	616,600)
Add: Tax savings from interest expense	42,053)	46,711)	47,846)	48,340)	64,642)
Less: Tax imposed on investment income	5,292)	7,035)	6,951)	10,437)	11,620)
Cash operating taxes	526,561)	136,576)	79,295)	211,403)	(68,678)

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).

Provision for (benefit from) income taxes: The provision for income taxes exhibited considerable volatility over the five-year period. In 2017, the provision was a positive amount close to $495 million, indicating a tax expense. This sharply declined in 2018 to approximately $77 million, followed by a notable shift into a tax benefit in 2019 and 2020, with negative amounts of roughly $225 million and $579 million respectively. However, in 2021, the provision reverted to a tax expense of around $598 million. This fluctuation suggests significant changes in taxable income or tax-related adjustments during these years.
Cash operating taxes: Cash operating taxes demonstrated an increasing trend with some fluctuations. In 2017, a negative value near -$69 million indicates a tax benefit or refund during that year. From 2018 onwards, cash operating taxes were positive and generally growing, rising from about $211 million in 2018 to over $526 million in 2021. This progressive increase in cash taxes paid corresponds with a return to a positive tax provision in 2021, reflecting higher tax payments aligning with increased taxable earnings or changes in tax liabilities.

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Mosaic Co., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Short-term debt	302,800)	100)	41,600)	11,500)	6,100)
Current maturities of long-term debt	596,600)	504,200)	47,200)	26,000)	343,500)
Structured accounts payable arrangements	743,700)	640,000)	740,600)	572,800)	386,200)
Long-term debt, less current maturities	3,382,200)	4,073,800)	4,525,500)	4,491,500)	4,878,100)
Operating lease liability¹	124,000)	173,600)	194,100)	284,431)	265,706)
Total reported debt & leases	5,149,300)	5,391,700)	5,549,000)	5,386,231)	5,879,606)
Total Mosaic stockholders’ equity	10,604,100)	9,581,400)	9,185,500)	10,397,300)	9,617,500)
Net deferred tax (assets) liabilities²	19,100)	(118,600)	525,300)	736,800)	862,700)
Allowance for doubtful accounts³	500)	400)	3,500)	1,300)	2,300)
Equity equivalents⁴	19,600)	(118,200)	528,800)	738,100)	865,000)
Accumulated other comprehensive (income) loss, net of tax⁵	1,891,800)	1,806,200)	1,598,200)	1,657,100)	1,061,600)
Non-controlling interests	144,400)	173,800)	182,100)	207,400)	21,600)
Adjusted total Mosaic stockholders’ equity	12,659,900)	11,443,200)	11,494,600)	12,999,900)	11,565,700)
Construction in-progress⁶	(1,234,400)	(1,447,100)	(1,259,700)	(2,164,700)	(1,793,000)
Marketable securities held in trust⁷	(731,500)	(734,300)	(691,700)	(632,300)	(628,000)
Invested capital	15,843,300)	14,653,500)	15,092,200)	15,589,131)	15,024,306)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of equity equivalents to total Mosaic stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in-progress.

⁷ Subtraction of marketable securities held in trust.

Total reported debt & leases: The total reported debt and leases exhibit a general declining trend over the period analyzed. Starting at approximately 5.88 billion USD at the end of 2017, the liabilities decreased to about 5.15 billion USD by the end of 2021. This represents a consistent reduction in debt levels during the timeframe, with the most notable year-on-year decrease occurring between 2019 and 2021, indicating potential efforts to deleverage or optimize debt management.
Total Mosaic stockholders’ equity: Stockholders’ equity showed fluctuations but overall an increasing trend. It grew from roughly 9.62 billion USD at the end of 2017 to about 10.60 billion USD by the end of 2021. After peaking above 10.39 billion USD in 2018, equity declined somewhat in 2019 but rebounded in the following years, suggesting periods of both capital accretion and consolidation. The equity levels at the end of the period are the highest reported and indicate strengthening shareholders' financial interest in the company.
Invested capital: Invested capital remained relatively stable with minor fluctuations, beginning at approximately 15.02 billion USD in 2017 and ending at about 15.84 billion USD in 2021. The values show a slight increase overall but include periods of decline, notably between 2018 and 2020. The general stability of invested capital indicates consistent asset or business investments relative to the company's size, without extreme expansions or contractions.
Summary of trends and insights: The data reflect a company progressively reducing its total debt and lease obligations over the five-year span, positively impacting financial leverage and possibly credit risk. Concurrently, the rise in stockholders’ equity suggests that the company has successfully maintained or increased its capital base, which may result from retained earnings or additional equity infusion. The sturdiness of invested capital further reinforces a stable investment footing. Taken together, these patterns imply a strategic emphasis on strengthening the balance sheet and maintaining capital adequacy while potentially streamlining debt exposure.

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Mosaic Co., cost of capital calculations

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	16,647,579)	16,647,579)	÷	22,334,179)	=	0.75	0.75	×	26.99%	=	20.12%
Total debt³	5,562,600)	5,562,600)	÷	22,334,179)	=	0.25	0.25	×	5.08% × (1 – 21.00%)	=	1.00%
Operating lease liability⁴	124,000)	124,000)	÷	22,334,179)	=	0.01	0.01	×	4.80% × (1 – 21.00%)	=	0.02%
Total:	22,334,179)					1.00					21.14%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Total debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	11,259,072)	11,259,072)	÷	17,244,872)	=	0.65	0.65	×	26.99%	=	17.62%
Total debt³	5,812,200)	5,812,200)	÷	17,244,872)	=	0.34	0.34	×	4.95% × (1 – 21.00%)	=	1.32%
Operating lease liability⁴	173,600)	173,600)	÷	17,244,872)	=	0.01	0.01	×	4.80% × (1 – 21.00%)	=	0.04%
Total:	17,244,872)					1.00					18.98%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Total debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	6,995,779)	6,995,779)	÷	12,892,979)	=	0.54	0.54	×	26.99%	=	14.65%
Total debt³	5,703,100)	5,703,100)	÷	12,892,979)	=	0.44	0.44	×	5.00% × (1 – 21.00%)	=	1.75%
Operating lease liability⁴	194,100)	194,100)	÷	12,892,979)	=	0.02	0.02	×	6.10% × (1 – 21.00%)	=	0.07%
Total:	12,892,979)					1.00					16.46%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Total debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	11,082,277)	11,082,277)	÷	16,505,608)	=	0.67	0.67	×	26.99%	=	18.12%
Total debt³	5,138,900)	5,138,900)	÷	16,505,608)	=	0.31	0.31	×	5.06% × (1 – 21.00%)	=	1.24%
Operating lease liability⁴	284,431)	284,431)	÷	16,505,608)	=	0.02	0.02	×	5.06% × (1 – 21.00%)	=	0.07%
Total:	16,505,608)					1.00					19.44%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in thousands

² Equity. See details »

³ Total debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	10,578,312)	10,578,312)	÷	16,668,118)	=	0.63	0.63	×	26.99%	=	17.13%
Total debt³	5,824,100)	5,824,100)	÷	16,668,118)	=	0.35	0.35	×	5.04% × (1 – 35.00%)	=	1.14%
Operating lease liability⁴	265,706)	265,706)	÷	16,668,118)	=	0.02	0.02	×	5.04% × (1 – 35.00%)	=	0.05%
Total:	16,668,118)					1.00					18.33%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in thousands

² Equity. See details »

³ Total debt. See details »

⁴ Operating lease liability. See details »

Mosaic Co., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(1,467,880)	(2,644,573)	(3,682,756)	(2,514,715)	(2,142,897)
Invested capital²	15,843,300)	14,653,500)	15,092,200)	15,589,131)	15,024,306)
Performance Ratio
Economic spread ratio³	-9.26%	-18.05%	-24.40%	-16.13%	-14.26%
Benchmarks
Economic Spread Ratio, Competitors⁴
Linde plc	-8.83%	—	—	—	—
Sherwin-Williams Co.	-2.78%	—	—	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,467,880 ÷ 15,843,300 = -9.26%

⁴ Click competitor name to see calculations.

The financial performance from 2017 to 2021 is characterized by a consistent failure to generate positive economic value, though a significant recovery trend emerged after 2019. Throughout the five-year period, the organization operated with negative economic profit, indicating that the returns on invested capital did not exceed the company's cost of capital.

Economic Profit Trends: Economic profit exhibited a widening deficit from 2017 to 2019, reaching a peak loss of US$ 3,682,756 thousand. Following this trough, a consistent recovery was observed, with losses narrowing to US$ 2,644,573 thousand in 2020 and further improving to US$ 1,467,880 thousand by the end of 2021. This represents a substantial reduction in economic loss over the final two years of the analyzed period.
Invested Capital Stability: Invested capital remained relatively stable, fluctuating within a range of approximately US$ 14.6 billion to US$ 15.8 billion. Despite the volatility in economic profit, the capital base did not experience drastic shifts, ending 2021 at its highest level of US$ 15,843,300 thousand.
Economic Spread Ratio Analysis: The economic spread ratio mirrors the trajectory of economic profit, remaining negative throughout the period. The ratio deteriorated from -14.26% in 2017 to a low of -24.40% in 2019. A sharp reversal followed, with the ratio improving to -18.05% in 2020 and reaching -9.26% in 2021. The narrowing of this spread suggests a progressive alignment between the return on invested capital and the cost of capital, signaling a movement toward potential value creation.

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Mosaic Co., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(1,467,880)	(2,644,573)	(3,682,756)	(2,514,715)	(2,142,897)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Performance Ratio
Economic profit margin²	-11.88%	-30.46%	-41.35%	-26.23%	-28.92%
Benchmarks
Economic Profit Margin, Competitors³
Linde plc	-20.81%	—	—	—	—
Sherwin-Williams Co.	-2.20%	—	—	—	—

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).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -1,467,880 ÷ 12,357,400 = -11.88%

³ Click competitor name to see calculations.

An analysis of the economic value added from 2017 through 2021 reveals a consistent failure to generate positive economic profit, although a significant recovery trend is evident in the latter part of the period. While the organization operated below its cost of capital throughout the five-year window, the trajectory of the economic profit margin suggests a transition toward value creation by the end of 2021.

Economic Profit Trajectory: Economic profit remained negative for the entire duration, indicating that the returns on invested capital did not exceed the required rate of return. A period of deterioration was observed between 2017 and 2019, with the deficit widening from -2.14 billion US$ to a peak loss of -3.68 billion US$. Following 2019, a steady recovery occurred, with the economic profit deficit narrowing to -1.47 billion US$ by December 31, 2021.
Net Sales Volatility: Revenue patterns exhibited fluctuation, starting at 7.41 billion US$ in 2017 and peaking at 12.36 billion US$ in 2021. A temporary increase in 2018 was followed by a two-year contraction in 2019 and 2020. However, a substantial surge in net sales occurred in 2021, representing a significant increase in top-line performance compared to the preceding years.
Economic Profit Margin Analysis: The economic profit margin mirrored the volatility of the absolute economic profit, reaching its lowest point in 2019 at -41.35%. This trough coincided with the maximum economic loss recorded during the period. A sharp improvement followed, with the margin recovering to -30.46% in 2020 and further improving to -11.88% in 2021. The contraction of this margin indicates a narrowing gap between the actual return on capital and the cost of capital, signaling improved operational efficiency or more favorable market conditions by the end of the period.

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Mosaic Co. (NYSE:MOS)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin