United States Steel Corp. (NYSE:X)

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United States Steel Corp., effective income tax rate (EITR) reconciliation

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
	Effective income tax rate	22.55%	3.91%	10.86%	-39.38%	-37.32%

Based on: 10-K (reporting date: 2022-12-31), 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).

The effective income tax rate exhibited significant volatility between 2018 and 2022, contrasting with a constant federal statutory tax rate of 21.00%.

Tax Benefit Period (2018-2019): During 2018 and 2019, negative effective income tax rates of -37.32% and -39.38%, respectively, were recorded. These figures indicate a net tax benefit, suggesting that tax credits, deferred tax assets, or losses offset taxable income during these fiscal years.
Transition and Low-Rate Phase (2020-2021): A shift toward positive tax obligations occurred in 2020 and 2021. The effective rate rose to 10.86% in 2020 and subsequently declined to 3.91% in 2021. Throughout this phase, the effective rate remained substantially below the 21.00% statutory benchmark, indicating the continued presence of tax-shielding items or deductions.
Normalization and Statutory Alignment (2022): By the end of 2022, the effective income tax rate increased to 22.55%. This represents a sharp increase from previous years and a convergence with the federal statutory rate, slightly exceeding the 21.00% benchmark and signaling a transition toward a standard corporate tax burden.

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United States Steel Corp., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal tax loss carryforwards	2)	20)	443)	176)	220)
Federal capital loss carryforwards	69)	66)	—)	27)	33)
State tax credit carryforwards	10)	11)	16)	18)	16)
State tax loss carryforwards	77)	150)	182)	130)	137)
State capital loss carryforwards	28)	16)	—)	—)	—)
Minimum tax credit carryforwards	—)	—)	—)	19)	38)
General business credit carryforwards	—)	94)	103)	85)	85)
Foreign tax loss and credit carryforwards	67)	244)	171)	170)	173)
Employee benefits	—)	—)	71)	173)	337)
Contingencies and accrued liabilities	64)	78)	52)	71)	62)
Operating lease liabilities	37)	47)	51)	—)	—)
Capitalized research and development	35)	15)	27)	18)	—)
Receivables, payables and debt	13)	33)	—)	—)	—)
Investments in subsidiaries and equity investees	—)	—)	—)	49)	59)
Inventory	14)	—)	21)	32)	—)
Other temporary differences	53)	34)	46)	17)	26)
Deferred tax assets, before valuation allowance	469)	808)	1,183)	985)	1,186)
Valuation allowance	(119)	(162)	(796)	(563)	(214)
Deferred tax assets	350)	646)	387)	422)	972)
Property, plant and equipment	(589)	(379)	(244)	(368)	(468)
Operating right-of-use assets	(35)	(45)	(49)	—)	—)
Investments in subsidiaries and equity investees	(141)	(121)	(23)	—)	—)
Inventory	—)	(112)	—)	—)	(22)
Employee benefits	(31)	(70)	—)	—)	—)
Receivables, payables and debt	—)	(6)	(22)	(17)	(33)
Indefinite-lived intangible assets	—)	—)	(19)	(19)	(18)
Other temporary differences	—)	(3)	(19)	(3)	—)
Deferred tax liabilities	(796)	(736)	(376)	(407)	(541)
Net deferred tax asset (liability)	(446)	(90)	11)	15)	431)

Based on: 10-K (reporting date: 2022-12-31), 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).

The financial position regarding deferred taxes transitioned from a net asset position of 431 million US dollars in 2018 to a net deferred tax liability of 446 million US dollars by the end of 2022. This shift reflects a systemic reduction in deferred tax assets coupled with an expansion of deferred tax liabilities over the five-year period.

Deferred Tax Asset Components and Trends: A significant contraction is observed in deferred tax assets before valuation allowances, which decreased from 1,186 million US dollars in 2018 to 469 million US dollars in 2022. The primary driver of this decline was the utilization of tax loss carryforwards. Federal tax loss carryforwards peaked at 443 million US dollars in 2020 before dropping precipitously to 2 million US dollars by 2022. Similarly, state tax loss carryforwards declined from a peak of 182 million US dollars in 2020 to 77 million US dollars in 2022. Foreign tax loss and credit carryforwards also showed high volatility, peaking at 244 million US dollars in 2021 before falling to 67 million US dollars in 2022.
Valuation Allowance Dynamics: The valuation allowance fluctuated significantly, reaching a peak of 796 million US dollars in 2020, which suggests a period of lower confidence in the realizability of the deferred tax assets. However, this allowance was reduced to 119 million US dollars by 2022, indicating a shift in the assessment of future taxable income availability to offset these assets.
Deferred Tax Liability Expansion: Deferred tax liabilities grew from 541 million US dollars in 2018 to 796 million US dollars in 2022. The most substantial contributor to this increase was property, plant and equipment, which rose to a liability of 589 million US dollars by 2022. Additionally, liabilities associated with investments in subsidiaries and equity investees expanded markedly, moving from a negligible or absent balance in 2020 to 141 million US dollars by 2022.
Net Tax Position Analysis: The transition from a net deferred tax asset to a net liability was most pronounced between 2021 and 2022. In 2021, the company maintained a net liability of 90 million US dollars, which widened to 446 million US dollars by 2022. This trajectory indicates that the rate of asset consumption and the growth of capital-related tax liabilities have outpaced the generation of new tax assets.

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United States Steel Corp., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Deferred income tax benefits	10)	32)	22)	19)	445)
	Deferred income tax liabilities	456)	122)	11)	4)	14)

Based on: 10-K (reporting date: 2022-12-31), 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).

The financial trajectory between 2018 and 2022 reflects a fundamental shift in the deferred tax position, transitioning from a substantial net asset position to a significant net liability position.

Deferred Income Tax Benefits: A precipitous decline in deferred income tax benefits was observed between 2018 and 2019, with values dropping from 445 million US$ to 19 million US$. From 2019 through 2021, these benefits remained relatively stagnant, oscillating between 19 million US$ and 32 million US$. By the end of 2022, the benefits reached a five-year low of 10 million US$, indicating a near-total depletion of these assets.
Deferred Income Tax Liabilities: Deferred tax liabilities were negligible and stable from 2018 to 2020, maintaining a range between 4 million US$ and 14 million US$. A sharp inflection point occurred in 2021, where liabilities rose to 122 million US$. This upward trend accelerated aggressively in 2022, culminating in a peak of 456 million US$, representing a substantial increase in future tax obligations.
Net Position Analysis: The convergence of declining tax benefits and surging tax liabilities resulted in a total reversal of the net deferred tax status. While 2018 was characterized by a dominant asset position, the period ending in 2022 is defined by a heavy net liability, reflecting a significant change in the timing differences between accounting and taxable income.

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United States Steel Corp., Financial Data: Reported vs. Adjusted

United States Steel Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	19,458)	17,816)	12,059)	11,608)	10,982)
Less: Noncurrent deferred tax assets, net	10)	32)	22)	19)	445)
Total assets (adjusted)	19,448)	17,784)	12,037)	11,589)	10,537)
Adjustment to Total Liabilities
Total liabilities (as reported)	9,147)	8,713)	8,180)	7,515)	6,779)
Less: Noncurrent deferred tax liabilities, net	456)	122)	11)	4)	14)
Total liabilities (adjusted)	8,691)	8,591)	8,169)	7,511)	6,765)
Adjustment to Total United States Steel Corporation Stockholders’ Equity
Total United States Steel Corporation stockholders’ equity (as reported)	10,218)	9,010)	3,786)	4,092)	4,202)
Less: Net deferred tax assets (liabilities)	(446)	(90)	11)	15)	431)
Total United States Steel Corporation stockholders’ equity (adjusted)	10,664)	9,100)	3,775)	4,077)	3,771)
Adjustment to Net Earnings (loss) Attributable To United States Steel Corporation
Net earnings (loss) attributable to United States Steel Corporation (as reported)	2,524)	4,174)	(1,165)	(630)	1,115)
Add: Deferred income tax expense (benefit)	501)	(52)	(130)	202)	(329)
Net earnings (loss) attributable to United States Steel Corporation (adjusted)	3,025)	4,122)	(1,295)	(428)	786)

Based on: 10-K (reporting date: 2022-12-31), 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).

A comprehensive analysis of the financial position from 2018 to 2022 reveals a significant expansion in the balance sheet, particularly starting in 2021. Total assets grew from 10,982 million US dollars in 2018 to 19,458 million US dollars by 2022. This growth is mirrored in stockholders' equity, which experienced a substantial increase from 4,202 million US dollars in 2018 to 10,218 million US dollars in 2022, despite interim losses in 2019 and 2020.

Impact of Deferred Tax Adjustments on Assets: Adjusted total assets remain closely aligned with reported total assets throughout the period. The most notable divergence occurred in 2018, where adjusted assets were 445 million US dollars lower than reported assets. From 2019 to 2022, the variance became marginal, with the 2022 difference narrowing to only 10 million US dollars.
Impact of Deferred Tax Adjustments on Liabilities: A growing divergence is observed between reported and adjusted total liabilities, specifically in the later years of the analysis. While the difference was minimal between 2018 and 2020, it expanded to 122 million US dollars in 2021 and reached 456 million US dollars in 2022. This indicates a substantial removal of deferred tax liabilities in the final year of the period.
Impact of Deferred Tax Adjustments on Stockholders' Equity: The removal of deferred taxes has a direct positive correlation with adjusted stockholders' equity in the latter stages of the period. In 2021 and 2022, adjusted equity exceeds reported equity. By December 31, 2022, adjusted equity reached 10,664 million US dollars compared to the reported 10,218 million US dollars, reflecting the impact of reduced adjusted liabilities.
Adjustments to Net Earnings: Net earnings exhibit high volatility, shifting from reported losses in 2019 and 2020 to significant gains in 2021 and 2022. The adjustments for deferred taxes varied in direction; for instance, in 2018, adjusted net earnings were 329 million US dollars lower than reported. Conversely, by 2022, adjusted net earnings were 501 million US dollars higher than reported earnings, indicating that the removal of deferred tax considerations improved the adjusted bottom line.

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United States Steel Corp., Financial Ratios: Reported vs. Adjusted

United States Steel Corp., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	11.98%	20.59%	-11.96%	-4.87%	7.86%
Adjusted net profit margin	14.36%	20.33%	-13.29%	-3.31%	5.54%
Total Asset Turnover
Reported total asset turnover	1.08	1.14	0.81	1.11	1.29
Adjusted total asset turnover	1.08	1.14	0.81	1.12	1.35
Financial Leverage
Reported financial leverage	1.90	1.98	3.19	2.84	2.61
Adjusted financial leverage	1.82	1.95	3.19	2.84	2.79
Return on Equity (ROE)
Reported ROE	24.70%	46.33%	-30.77%	-15.40%	26.53%
Adjusted ROE	28.37%	45.30%	-34.30%	-10.50%	20.84%
Return on Assets (ROA)
Reported ROA	12.97%	23.43%	-9.66%	-5.43%	10.15%
Adjusted ROA	15.55%	23.18%	-10.76%	-3.69%	7.46%

Based on: 10-K (reporting date: 2022-12-31), 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).

The financial performance between 2018 and 2022 is characterized by significant volatility in profitability and return metrics, contrasting with more stable trends in asset utilization and financial leverage. The adjustment for deferred taxes reveals a meaningful divergence between reported and adjusted results, particularly in the later years of the period.

Profitability and Margin Analysis: Reported net profit margins experienced extreme fluctuations, declining from 7.86% in 2018 to a trough of -11.96% in 2020, followed by a sharp recovery to 20.59% in 2021. The removal of deferred taxes altered these results; for instance, in 2022, the adjusted net profit margin of 14.36% was higher than the reported 11.98%. Conversely, during the 2020 downturn, the adjusted margin (-13.29%) was more negative than the reported figure (-11.96%), indicating that deferred tax effects varied in direction relative to the company's earnings cycle.
Returns on Equity (ROE) and Assets (ROA): Return metrics mirrored the volatility of the profit margins. Reported ROE dropped from 26.53% in 2018 to -30.77% in 2020 before peaking at 46.33% in 2021. By 2022, a positive variance emerged where adjusted ROE (28.37%) surpassed reported ROE (24.70%). A similar pattern is observed in ROA, where the 2022 adjusted value of 15.55% exceeds the reported 12.97%, suggesting that the exclusion of deferred taxes presents a more favorable view of capital efficiency in the most recent period.
Asset Turnover and Financial Leverage: Total asset turnover remained relatively consistent, with a cyclical dip to 0.81 in 2020 before recovering to 1.08 by 2022. The difference between reported and adjusted asset turnover is minimal, indicating that deferred tax adjustments have negligible impact on efficiency ratios. Financial leverage showed a marked increase to a peak of 3.19 in 2020, followed by a consistent reduction to 1.90 (reported) and 1.82 (adjusted) by 2022, reflecting a trend toward deleveraging.

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to United States Steel Corporation	2,524)	4,174)	(1,165)	(630)	1,115)
Net sales	21,065)	20,275)	9,741)	12,937)	14,178)
Profitability Ratio
Net profit margin¹	11.98%	20.59%	-11.96%	-4.87%	7.86%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to United States Steel Corporation	3,025)	4,122)	(1,295)	(428)	786)
Net sales	21,065)	20,275)	9,741)	12,937)	14,178)
Profitability Ratio
Adjusted net profit margin²	14.36%	20.33%	-13.29%	-3.31%	5.54%

Based on: 10-K (reporting date: 2022-12-31), 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).

2022 Calculations

¹ Net profit margin = 100 × Net earnings (loss) attributable to United States Steel Corporation ÷ Net sales
= 100 × 2,524 ÷ 21,065 = 11.98%

² Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to United States Steel Corporation ÷ Net sales
= 100 × 3,025 ÷ 21,065 = 14.36%

Between 2018 and 2022, the company experienced significant fluctuations in profitability, characterized by a period of sharp decline followed by a rapid recovery. The adjusted net profit margin moved from a modest positive position in 2018 to substantial losses by 2020, before surging to a peak in 2021 and moderating in 2022.

Adjusted Net Profit Margin Trends: A downward trajectory is observed from 2018 (5.54%) through 2020, where the margin reached its lowest point at -13.29%. This deterioration was followed by a substantial reversal in 2021, with the margin ascending to 20.33%, the highest value in the five-year period. By 2022, the margin decreased to 14.36%, indicating a moderation of profitability following the 2021 peak.
Net Earnings Volatility: Adjusted net earnings mirrored the margin trends, shifting from a profit of US$ 786 million in 2018 to an adjusted loss of US$ 1,295 million in 2020. The subsequent recovery in 2021 was pronounced, with adjusted net earnings reaching US$ 4,122 million, before settling at US$ 3,025 million in 2022.
Comparison of Reported and Adjusted Profitability: The variance between reported and adjusted figures fluctuates over the analyzed period. In 2022, the adjusted net profit margin (14.36%) was higher than the reported margin (11.98%), suggesting that specific non-recurring items negatively impacted reported earnings. In contrast, during 2021, the reported net profit margin (20.59%) slightly exceeded the adjusted margin (20.33%), and in 2020, the reported margin (-11.96%) was less severe than the adjusted margin (-13.29%).

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales	21,065)	20,275)	9,741)	12,937)	14,178)
Total assets	19,458)	17,816)	12,059)	11,608)	10,982)
Activity Ratio
Total asset turnover¹	1.08	1.14	0.81	1.11	1.29
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales	21,065)	20,275)	9,741)	12,937)	14,178)
Adjusted total assets	19,448)	17,784)	12,037)	11,589)	10,537)
Activity Ratio
Adjusted total asset turnover²	1.08	1.14	0.81	1.12	1.35

Based on: 10-K (reporting date: 2022-12-31), 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).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 21,065 ÷ 19,458 = 1.08

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 21,065 ÷ 19,448 = 1.08

An examination of the asset base and turnover ratios between 2018 and 2022 reveals a period of significant expansion coupled with fluctuating asset utilization efficiency. Total assets grew from 10,982 million US dollars in 2018 to 19,458 million US dollars by the end of 2022, representing a substantial increase in the company's resource base. A particularly sharp acceleration in asset growth occurred between 2020 and 2021, where reported total assets rose by approximately 47% in a single year.

Adjusted Total Asset Turnover Trends: The adjusted total asset turnover ratio experienced a volatile trajectory over the five-year period. Starting at a peak of 1.35 in 2018, the ratio declined steadily to a low of 0.81 in 2020, indicating a period of reduced efficiency in generating revenue relative to the asset base. A recovery was observed in 2021 as the ratio climbed back to 1.14, before moderating slightly to 1.08 in 2022.
Comparison of Reported and Adjusted Metrics: A divergence between reported and adjusted total asset turnover is most evident in 2018, where the adjusted ratio (1.35) was higher than the reported ratio (1.29). This suggests that specific asset adjustments in the early period provided a more favorable view of operational efficiency. However, from 2019 through 2022, the reported and adjusted figures converged, with both metrics becoming identical by 2020, indicating that adjustments to the asset base had a negligible impact on turnover calculations in the latter half of the period.
Asset Growth and Efficiency Correlation: The correlation between asset growth and turnover indicates that the expansion of the asset base did not immediately translate into proportional revenue growth. The trough in turnover in 2020 occurred despite a steady increase in total assets, suggesting a temporary mismatch between capacity expansion and market demand. The subsequent rebound in 2021 suggests an improved ability to utilize the significantly expanded asset base to drive turnover.

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	19,458)	17,816)	12,059)	11,608)	10,982)
Total United States Steel Corporation stockholders’ equity	10,218)	9,010)	3,786)	4,092)	4,202)
Solvency Ratio
Financial leverage¹	1.90	1.98	3.19	2.84	2.61
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	19,448)	17,784)	12,037)	11,589)	10,537)
Adjusted total United States Steel Corporation stockholders’ equity	10,664)	9,100)	3,775)	4,077)	3,771)
Solvency Ratio
Adjusted financial leverage²	1.82	1.95	3.19	2.84	2.79

Based on: 10-K (reporting date: 2022-12-31), 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).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total United States Steel Corporation stockholders’ equity
= 19,458 ÷ 10,218 = 1.90

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total United States Steel Corporation stockholders’ equity
= 19,448 ÷ 10,664 = 1.82

A comprehensive expansion of the balance sheet is evident between 2018 and 2022, characterized by a significant increase in both total assets and stockholders' equity. While the first three years of the period showed moderate asset growth and stagnant or declining equity, the final two years marked a pivot toward substantial capital strengthening and deleveraging.

Asset Expansion: Adjusted total assets grew steadily from 10,537 million in 2018 to 12,037 million in 2020, followed by a sharp increase to 17,784 million in 2021 and 19,448 million by 2022. This indicates a substantial scaling of the company's resource base over the five-year period.
Equity Growth and Volatility: Adjusted stockholders' equity experienced a period of relative stability and slight decline from 2018 to 2020, moving from 3,771 million to 3,775 million. However, a significant surge occurred in 2021, where equity more than doubled to 9,100 million, continuing upward to 10,664 million in 2022.
Financial Leverage Transition: Adjusted financial leverage followed a non-linear trajectory. The ratio increased from 2.79 in 2018 to a peak of 3.19 in 2020, signaling an increase in financial risk and reliance on debt. This trend reversed abruptly in 2021, with the ratio dropping to 1.95 and further declining to 1.82 by 2022. This downward trend reflects a strengthened solvency position and a lower proportion of debt relative to equity.
Convergence of Reported and Adjusted Metrics: The variance between reported and adjusted figures for financial leverage was most pronounced in 2018 and 2022. By 2019 and 2020, reported and adjusted leverage ratios converged completely, suggesting that the adjustments for income taxes and related items had a negligible impact on the leverage calculation during those specific years.

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to United States Steel Corporation	2,524)	4,174)	(1,165)	(630)	1,115)
Total United States Steel Corporation stockholders’ equity	10,218)	9,010)	3,786)	4,092)	4,202)
Profitability Ratio
ROE¹	24.70%	46.33%	-30.77%	-15.40%	26.53%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to United States Steel Corporation	3,025)	4,122)	(1,295)	(428)	786)
Adjusted total United States Steel Corporation stockholders’ equity	10,664)	9,100)	3,775)	4,077)	3,771)
Profitability Ratio
Adjusted ROE²	28.37%	45.30%	-34.30%	-10.50%	20.84%

Based on: 10-K (reporting date: 2022-12-31), 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).

2022 Calculations

¹ ROE = 100 × Net earnings (loss) attributable to United States Steel Corporation ÷ Total United States Steel Corporation stockholders’ equity
= 100 × 2,524 ÷ 10,218 = 24.70%

² Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to United States Steel Corporation ÷ Adjusted total United States Steel Corporation stockholders’ equity
= 100 × 3,025 ÷ 10,664 = 28.37%

Financial performance between 2018 and 2022 was characterized by extreme volatility in net earnings and a significant expansion of the equity base. Following a period of losses in 2019 and 2020, a substantial recovery occurred in 2021 and 2022, leading to a marked increase in both absolute profitability and total shareholders' equity.

Net Earnings Performance: Reported net earnings shifted from a profit of US$ 1,115 million in 2018 to losses of US$ 630 million and US$ 1,165 million in 2019 and 2020, respectively. A sharp reversal occurred in 2021, with reported earnings peaking at US$ 4,174 million, before moderating to US$ 2,524 million in 2022. Adjusted net earnings followed a similar trajectory, though they remained higher than reported figures in 2022 (US$ 3,025 million versus US$ 2,524 million), suggesting that specific adjustments or non-recurring items negatively impacted reported results in that year.
Equity Base Expansion: Stockholders' equity remained relatively stable between 2018 and 2020, fluctuating within the US$ 3,700 million to US$ 4,200 million range. However, a significant growth phase began in 2021, with reported equity rising to US$ 9,010 million and further increasing to US$ 10,218 million by 2022. Adjusted equity showed a corresponding trend, peaking at US$ 10,664 million in 2022, indicating a strengthened capital position during the recovery period.
Return on Equity (ROE) Analysis: The ROE metrics mirrored the volatility of net earnings. Adjusted ROE declined from 20.84% in 2018 to a trough of -34.30% in 2020. This was followed by a rapid ascent to 45.30% in 2021, the highest recorded point in the five-year period. By 2022, adjusted ROE moderated to 28.37%. A divergence is noted in 2022, where the adjusted ROE of 28.37% exceeded the reported ROE of 24.70%, indicating that the adjustments made to earnings and equity provided a more favorable view of the company's return on investment than the reported figures.

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to United States Steel Corporation	2,524)	4,174)	(1,165)	(630)	1,115)
Total assets	19,458)	17,816)	12,059)	11,608)	10,982)
Profitability Ratio
ROA¹	12.97%	23.43%	-9.66%	-5.43%	10.15%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to United States Steel Corporation	3,025)	4,122)	(1,295)	(428)	786)
Adjusted total assets	19,448)	17,784)	12,037)	11,589)	10,537)
Profitability Ratio
Adjusted ROA²	15.55%	23.18%	-10.76%	-3.69%	7.46%

Based on: 10-K (reporting date: 2022-12-31), 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).

2022 Calculations

¹ ROA = 100 × Net earnings (loss) attributable to United States Steel Corporation ÷ Total assets
= 100 × 2,524 ÷ 19,458 = 12.97%

² Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to United States Steel Corporation ÷ Adjusted total assets
= 100 × 3,025 ÷ 19,448 = 15.55%

The financial performance from 2018 to 2022 is characterized by significant volatility in earnings and a consistent expansion of the asset base. A period of contraction and net losses occurred between 2019 and 2020, followed by a substantial recovery in 2021 and 2022.

Net Earnings Trends: Reported net earnings transitioned from a profit of 1,115 million US$ in 2018 to a peak loss of 1,165 million US$ in 2020. A sharp reversal occurred in 2021, with earnings rising to 4,174 million US$, before moderating to 2,524 million US$ in 2022. Adjusted net earnings followed a similar trajectory, though they showed a more pronounced loss in 2020 at 1,295 million US$ and a higher final value in 2022 at 3,025 million US$.
Asset Base Expansion: Total assets exhibited a continuous upward trend throughout the period. Reported assets grew from 10,982 million US$ in 2018 to 19,458 million US$ in 2022. A significant acceleration in growth is noted between 2020 and 2021, where assets increased by approximately 47%, indicating substantial capital deployment or acquisitions.
Adjusted Return on Assets (ROA) Analysis: The Adjusted ROA mirrors the volatility of the earnings cycle relative to the growing asset base. The ratio declined from 7.46% in 2018 to a minimum of -10.76% in 2020. A dramatic recovery was observed in 2021, with the ratio peaking at 23.18%. By 2022, the Adjusted ROA moderated to 15.55%, which is notably higher than the Reported ROA of 12.97%, suggesting that the adjustments remove negative impacts that would otherwise lower the perceived efficiency of asset utilization.

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