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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	16.14%	14.60%	12.83%	14.94%	14.07%
Invested capital³	15,843,300)	14,653,500)	15,092,200)	15,589,131)	15,024,306)

Economic profit⁴	(676,564)	(2,003,500)	(3,134,025)	(1,813,352)	(1,503,975)

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 – 16.14% × 15,843,300 = -676,564

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Mosaic Co. economic profit increased from 2019 to 2020 and from 2020 to 2021.

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.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Mosaic Co. NOPAT increased from 2019 to 2020 and from 2020 to 2021.

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).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Mosaic Co. cash operating taxes increased from 2019 to 2020 and from 2020 to 2021.

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.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Mosaic Co. invested capital decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

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	×	20.29%	=	15.12%
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					16.14%

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	×	20.29%	=	13.25%
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					14.60%

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	×	20.29%	=	11.01%
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					12.83%

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	×	20.29%	=	13.62%
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					14.94%

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	×	20.29%	=	12.88%
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					14.07%

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	(676,564)	(2,003,500)	(3,134,025)	(1,813,352)	(1,503,975)
Invested capital²	15,843,300)	14,653,500)	15,092,200)	15,589,131)	15,024,306)
Performance Ratio
Economic spread ratio³	-4.27%	-13.67%	-20.77%	-11.63%	-10.01%
Benchmarks
Economic Spread Ratio, Competitors⁴
Linde plc	-6.50%	-8.01%	-8.35%	—	—

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 × -676,564 ÷ 15,843,300 = -4.27%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Mosaic Co. economic spread ratio improved from 2019 to 2020 and from 2020 to 2021.

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	(676,564)	(2,003,500)	(3,134,025)	(1,813,352)	(1,503,975)
Net sales	12,357,400)	8,681,700)	8,906,300)	9,587,300)	7,409,400)
Performance Ratio
Economic profit margin²	-5.47%	-23.08%	-35.19%	-18.91%	-20.30%
Benchmarks
Economic Profit Margin, Competitors³
Linde plc	-15.31%	-23.15%	-23.24%	—	—

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 × -676,564 ÷ 12,357,400 = -5.47%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Mosaic Co. economic profit margin improved from 2019 to 2020 and from 2020 to 2021.

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