United States Steel Corp. (NYSE:X)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibited significant volatility over the five-year period. Initially, in 2018, the NOPAT was positive at $893 million but then dropped sharply to negative values in 2019 and 2020, with -$121 million and -$1,095 million, respectively. This indicates challenges in profitability during these years. A strong recovery occurred in 2021, with NOPAT rebounding to $4,449 million, followed by a decrease to $3,060 million in 2022, which still reflects a return to profitability above pre-2019 levels.

Cost of Capital

The cost of capital fluctuated between 11.01% and 18.23% throughout the years. It decreased markedly from 18.23% in 2018 to a low of 11.01% in 2019, then increased gradually to 14.93% in 2020 and further rose to 16.93% in 2021. In 2022, the cost of capital nearly reached its initial high at 18.04%, which implies increased capital costs in the later years of the period.

Invested Capital

Invested capital demonstrated a consistent upward trend across the analyzed years. It rose from $6,762 million in 2018 to $7,841 million in 2019 and continued increasing to $8,622 million in 2020. A significant jump is observed in 2021 with $12,346 million invested, followed by a slight increase to $12,723 million in 2022. This pattern suggests growing resource allocation into the business and potentially expanding operations or asset base.

Economic Profit

Economic profit showed marked volatility, reflecting the interplay between operating performance and the cost of capital. Negative economic profit was recorded in 2018 (-$340 million), with the decline worsening in 2019 (-$984 million) and 2020 (-$2,383 million), suggesting that the company failed to generate returns above its cost of capital during these years. Notably, economic profit turned strongly positive in 2021, reaching $2,359 million, indicating a period of value creation. However, in 2022, economic profit decreased to $765 million, signaling a reduction in economic value generated but remaining positive.

The financial data over the analyzed periods exhibit notable fluctuations in profitability metrics for the entity. The net earnings attributable to the company reveal a volatile trajectory, characterized by a significant loss phase between 2019 and 2020, followed by a pronounced recovery and peak in 2021, and a subsequent decrease in 2022, though remaining positive.

Net Earnings (Loss) Attributable

In 2018, the company reported net earnings amounting to 1,115 million US dollars, followed by a sharp decline to a loss of 630 million in 2019. This adverse trend intensified in 2020 with a deeper loss of 1,165 million. The year 2021 marked a substantial turnaround with net earnings reaching 4,174 million, representing the highest value in the dataset. In 2022, earnings declined to 2,524 million, which, despite being lower than the previous year, remained robust and positive.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values mirror the net earnings trend closely, confirming the operational profitability challenges faced during 2019 and 2020. In 2018, NOPAT was recorded at 893 million US dollars, declining sharply to a negative 121 million in 2019, and further deteriorating to a negative 1,095 million in 2020. A significant recovery occurred in 2021, with NOPAT peaking at 4,449 million. Although there was a decrease in 2022 to 3,060 million, the figure remained strongly positive, indicative of sustained operational improvement relative to the loss years.

Overall, the data indicate a period of financial stress and operational difficulty during 2019 and 2020, likely reflective of external or internal challenges during those years. The strong rebound in 2021 signifies effective recovery measures, enhanced profitability, or favorable market conditions. The subsequent decline in 2022, while noteworthy, does not negate the positive turnaround, suggesting a period of stabilization at an improved profit level compared to the negative earnings years.

The data reveals notable fluctuations in the income tax provision (benefit) over the five-year period. Initially, there was a substantial tax benefit recorded in 2018 at -$303 million, indicating a negative tax expense or a tax benefit. This shifted to a positive income tax provision of $178 million in 2019, signaling a tax expense rather than a benefit during that year. The year 2020 once again saw a tax benefit of -$142 million, suggesting a reversal or reduction in tax obligations. However, in 2021 and 2022, the trend changed significantly, with the income tax provision increasing to $170 million and then sharply rising to $735 million. This indicates progressively higher tax expenses in the later years, with 2022 showing the most substantial tax charge over the period analyzed.

Cash operating taxes displayed a different pattern. From 2018 to 2019, there was a marked decrease from $60 million to $6 million. This was followed by a recovery to $49 million in 2020, and a substantial increase in 2021 to $290 million, suggesting a significant rise in actual cash payments for taxes in that year. In 2022, the cash operating taxes slightly decreased to $260 million, yet remained considerably higher than the levels observed in the earlier years.

Overall, the data points to considerable volatility in both the income tax provision and cash operating taxes, with a general trend towards higher tax expenses and cash tax payments in the most recent years. The divergence between income tax provision and cash operating taxes in certain years, such as 2018 and 2020 where provisions were negative but cash taxes positive, may indicate timing differences, tax credits, or adjustments impacting accounting and cash tax reporting differently.

The financial data exhibits notable fluctuations in key measures over the five-year period ending in 2022.

Total Reported Debt & Leases

There is a general upward trend from 2018 to 2020, with debt rising from $2,624 million to $5,109 million. This is followed by a decrease in 2021 to $4,085 million, after which the debt level stabilizes in 2022 at $4,131 million. The initial increase suggests a phase of leveraging or increased borrowing, while the subsequent reduction and stabilization indicate efforts to manage or reduce debt obligations.

Total United States Steel Corporation Stockholders’ Equity

Equity demonstrates a mixed trajectory. The equity declined from $4,202 million in 2018 to $3,786 million in 2020, possibly reflecting losses or distributions exceeding earnings. A significant reversal occurs in 2021 with equity surging to $9,010 million and further increasing to $10,218 million in 2022. This sharp rise in equity suggests substantial profits, capital injections, or retained earnings during these years, strengthening the company's financial position.

Invested Capital

Invested capital has consistently increased year over year, growing from $6,762 million in 2018 to $12,723 million in 2022. The steady rise indicates ongoing investment in assets or operations that support the business. The substantial jump between 2020 and 2021 aligns with the marked increase in equity, implying financed growth and asset expansion during this period.

Economic Profit

The economic profit exhibited a significant decline from 2018 to 2020, falling from a negative value of -340 million USD to -2383 million USD. This represents an increasing loss over this period. However, a notable turnaround occurred in 2021, with economic profit shifting sharply to a positive 2359 million USD, indicating substantial improvement. In 2022, the economic profit decreased again but remained positive at 765 million USD, suggesting the company maintained profitability despite the reduction.

Invested Capital

The invested capital showed a consistent upward trend throughout the five-year period. Starting at 6762 million USD in 2018, it gradually increased each year, reaching 12723 million USD by 2022. This steady growth in invested capital indicates continued investment in assets or operations.

Economic Spread Ratio

The economic spread ratio reflected a negative trend initially, becoming increasingly negative from -5.02% in 2018 to -27.64% in 2020. This suggests that the returns on invested capital were significantly below the cost of capital during this time. A marked improvement occurred in 2021, with the ratio turning positive to 19.11%, indicating a strong return above the cost of capital. In 2022, the ratio declined to 6.02%, remaining positive but showing a reduction in the rate of economic profit generation relative to invested capital.

Summary of Financial Trends

Overall, the company experienced a challenging period from 2018 through 2020, with worsening economic profit and a declining economic spread ratio, despite continuous increases in invested capital. The reversal in 2021 signifies a strong recovery in profitability and efficiency in capital usage. Although profitability moderated in 2022, the company maintained positive economic profit and spread, reflecting improved financial health relative to the earlier losses.

The financial data reveals several notable trends over the five-year period ending December 31, 2022.

Economic Profit

The economic profit shows significant fluctuations across the analyzed years. From a negative value of -340 million USD in 2018, the economic profit deteriorated further to -984 million USD in 2019, indicating increasing economic losses. The downward trend continued sharply in 2020, reaching a low of -2383 million USD, representing the most substantial economic loss in the period. However, a marked recovery is observed in 2021, with economic profit turning positive at 2359 million USD, suggesting a significant improvement in value creation. This positive momentum moderates in 2022, with economic profit declining to 765 million USD, though remaining in positive territory.

Net Sales

Net sales demonstrate a contrasting trend compared to economic profit in the initial years. The sales figure declined steadily from 14,178 million USD in 2018 to 9,741 million USD in 2020, reflecting contraction in revenue generation. Subsequently, net sales surged in 2021 to 20,275 million USD, more than doubling compared to the prior year, and continued to increase, albeit more modestly, reaching 21,065 million USD in 2022. This rebound suggests strong demand or improved sales strategies in the two most recent years.

Economic Profit Margin

The economic profit margin mirrors the performance of economic profit but in percentage terms. The margin starts negative at -2.4% in 2018, worsening to -7.61% in 2019 and sharply dropping to -24.46% in 2020, signaling increasingly poor profitability relative to sales. Following this low, the margin turns positive at 11.63% in 2021, underscoring the pronounced recovery. This positive margin decreases to 3.63% in 2022, indicating a reduction in profitability relative to sales despite positive economic profit.

Overall, the data highlights an initial period of declining sales and worsening economic profit, reaching bottom in 2020. A strong recovery occurs in 2021, with both sales and economic profit rebounding significantly and turning positive in terms of value creation. The following year shows continued sales growth but a decline in economic profit and margin, suggesting emerging pressures on profitability or increased costs affecting value generation despite higher revenues.