Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
United States Steel Corp., FCFF calculation
US$ in millions
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).
1, 2 See details »
The financial performance between 2018 and 2022 is characterized by significant volatility in cash generation, followed by a substantial recovery and stabilization period beginning in 2021.
- Operating Cash Flow Trends
- Net cash provided by operating activities experienced a consistent decline from 2018 through 2020, dropping from 938 million US dollars to a period low of 138 million US dollars. A sharp reversal occurred in 2021, with operating cash flow surging to 4,090 million US dollars, before slightly moderating to 3,505 million US dollars in 2022.
- Free Cash Flow to the Firm (FCFF) Analysis
- FCFF exhibited more extreme variance than operating cash flows. Following a positive result in 2018, FCFF shifted to negative territory in 2019 and 2020, recording -481 million and -374 million US dollars, respectively. This suggests that capital expenditures exceeded the cash generated from operations during those two years.
- Cash Flow Divergence and Recovery
- A significant inflection point is observed in 2021, where FCFF rose to 3,543 million US dollars, closely aligning with the operating cash flow. In 2022, while FCFF remained positive at 1,854 million US dollars, a widening gap emerged between operating cash flow and FCFF, indicating a potential increase in capital reinvestment or other firm-level cash outflows relative to the previous year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Interest Paid, Net of Tax
United States Steel Corp., interest paid, net of tax calculation
US$ in millions
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).
2 2022 Calculation
Interest and other financial costs paid, net of amount capitalized, tax = Interest and other financial costs paid, net of amount capitalized × EITR
= 161 × 22.55% = 36
3 2022 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 59 × 22.55% = 13
The financial data reveals a period of significant volatility in net interest expenses and a consistent increase in capitalized interest from 2018 to 2022. These trends occur alongside substantial fluctuations in the effective income tax rate, which directly influences the net calculations of the reported financial costs.
- Interest and Other Financial Costs Paid (Net of Tax)
- Net interest payments exhibited a non-linear trajectory, decreasing from US$ 164 million in 2018 to US$ 119 million in 2019, before rising sharply to a peak of US$ 307 million in 2021. A substantial reduction occurred in 2022, with costs falling to US$ 125 million, representing the lowest expenditure level within the five-year period.
- Interest Capitalization Trends
- Interest capitalized, net of tax, demonstrated a steady and uninterrupted upward trend. Starting at US$ 6 million in 2018, the value increased annually, reaching US$ 46 million by December 31, 2022. This consistent growth indicates a rising allocation of interest costs toward the development or acquisition of long-term capital assets.
- Effective Income Tax Rate Correlation
- The effective income tax rate remained stable at 21.00% during 2018 and 2019, followed by a steep decline to 10.86% in 2020 and a low of 3.91% in 2021. By 2022, the rate rebounded to 22.55%. Because interest costs are reported net of tax, the diminished tax rate during 2020 and 2021 reduced the available tax shield, coinciding with the period of the highest nominal net interest payments.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Enterprise Value to FCFF Ratio, Current
United States Steel Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 6,067) |
| Free cash flow to the firm (FCFF) | 1,854) |
| Valuation Ratio | |
| EV/FCFF | 3.27 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Freeport-McMoRan Inc. | 66.68 |
| EV/FCFF, Industry | |
| Materials | 46.73 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
United States Steel Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 7,375) | 7,641) | 7,326) | 4,388) | 5,352) | |
| Free cash flow to the firm (FCFF)2 | 1,854) | 3,543) | (374) | (481) | 106) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 3.98 | 2.16 | — | — | 50.46 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Freeport-McMoRan Inc. | 35.32 | 12.13 | — | — | — | |
| EV/FCFF, Industry | ||||||
| Materials | 34.36 | 20.85 | — | — | — | |
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).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 7,375 ÷ 1,854 = 3.98
4 Click competitor name to see calculations.
The financial data from 2018 to 2022 reveals a significant transition in the firm's valuation and cash generation capacity. A period of instability and negative cash flow between 2019 and 2020 was followed by a sharp recovery in cash flow efficiency and a stabilization of enterprise value.
- Enterprise Value (EV) Trends
- The enterprise value exhibited notable volatility, decreasing from 5,352 million in 2018 to 4,388 million in 2019. A substantial increase occurred in 2020, with the value rising to 7,326 million and peaking at 7,641 million in 2021, before slightly receding to 7,375 million by the end of 2022.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF experienced extreme fluctuations over the five-year period. After a modest 106 million in 2018, the firm entered a period of negative cash flow, recording deficits of 481 million in 2019 and 374 million in 2020. A drastic reversal occurred in 2021, with FCFF surging to 3,543 million, followed by a decrease to 1,854 million in 2022, though it remained strongly positive.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio indicates a dramatic shift in valuation efficiency. In 2018, the ratio stood at 50.46, suggesting that the enterprise value was very high relative to the cash being generated. Due to negative FCFF in 2019 and 2020, the ratio was not applicable. However, by 2021, the ratio contracted sharply to 2.16, reflecting a surge in cash flow that vastly outpaced the increase in enterprise value. The ratio rose slightly to 3.98 in 2022, indicating that while cash flow decreased from its 2021 peak, the firm continued to operate with a much lower valuation multiple than observed in 2018.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?