Twenty-First Century Fox Inc. (NASDAQ:FOX)

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures exhibit significant volatility over the examined period. There is a notable decline from 7,896 million USD in 2013 to 4,517 million USD in 2014, followed by a substantial rebound to 9,417 million USD in 2015. In the subsequent years, NOPAT decreases again to 4,025 million USD in 2016, then slightly increases to 4,273 million USD in 2017, and further rises to 4,669 million USD in 2018. This irregular pattern suggests fluctuating operational performance with no clear upward or downward long-term trend.

Cost of Capital

The cost of capital shows a generally downward trend from 14.21% in 2013 to a low of 12.71% in 2016, followed by a moderate increase to 14.38% in 2018. This indicates a reduction in the company's required return or risk perception until 2016, after which the cost of capital rises again, potentially reflecting changes in market conditions or company risk profile.

Invested Capital

Invested capital fluctuated moderately over the period, starting at 44,434 million USD in 2013, peaking at 48,265 million USD in 2014, then falling to 44,315 million USD in 2015, followed by a gradual decline to 42,462 million USD in 2016. Subsequently, it rose steadily, reaching 47,272 million USD by 2018. The pattern suggests phases of capital allocation adjustments, with a general stabilization and slight growth towards the later years.

Economic Profit

The economic profit demonstrates a persistent negative trend except for two distinct positive spikes. In 2013, economic profit was 1,581 million USD, but it sharply dropped to -2,222 million USD in 2014. A notable recovery occurred in 2015 with 3,396 million USD, before a decline back into negative territory in subsequent years: -1,373 million USD in 2016, -1,529 million USD in 2017, and -2,127 million USD in 2018. This pattern indicates that despite occasional operational gains, the company's returns frequently failed to exceed the cost of capital, resulting in value destruction in most years.

Net Income Attributable to Stockholders

The net income showed notable fluctuations over the analyzed periods. It started at 7,097 million USD in 2013, then declined significantly to 4,514 million USD in 2014. In 2015, there was a strong rebound with net income increasing to 8,306 million USD, marking the highest value in the timeframe. Afterward, net income dropped sharply to 2,755 million USD in 2016 and remained relatively low in 2017, with a slight increase to 2,952 million USD. In 2018, net income rose again to 4,464 million USD, indicating partial recovery but still below the earlier peak.

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated a pattern similar to net income but with somewhat less pronounced variation. Starting at 7,896 million USD in 2013, it decreased substantially to 4,517 million USD in 2014. NOPAT peaked at 9,417 million USD in 2015, exceeding the initial period's value. Following this peak, it declined sharply to 4,025 million USD in 2016. The next two years showed moderate growth, with NOPAT increasing to 4,273 million USD in 2017 and 4,669 million USD in 2018.

Overall Trend Analysis

Both net income and NOPAT experienced significant volatility throughout the six years. The years 2014 and 2016 are characterized by marked downturns in profitability metrics. The year 2015 stands out as a peak period for both measures, reflecting a temporary strong financial performance. After 2016, there is evidence of gradual operational improvement through 2018, though neither net income nor NOPAT returned to their earlier peak levels by the end of the period. The data suggests a cycle of recovery following considerable profit contractions, warranting further examination of underlying causes during downturn years.

Provision for income taxes from continuing operations

The provision for income taxes generally declined from 2013 to 2016, starting at 1,690 million US dollars in 2013 and decreasing steadily to 1,130 million in 2016. In 2017, there was a notable increase to 1,419 million, followed by a significant drop to a negative figure of -364 million in 2018, which may indicate a tax benefit or a reversal of previous tax provisions.

Cash operating taxes

Cash operating taxes fluctuated over the period. Beginning at 1,612 million US dollars in 2013, the figure increased to 1,707 million in 2014, then decreased to 1,504 million in 2015. A more marked decline occurred in 2016 with taxes dropping to 1,095 million. Subsequently, there was a sharp rise to 1,781 million in 2017 before falling significantly to 904 million in 2018. The fluctuations suggest variability in cash tax payments potentially linked to changing profitability or tax planning strategies.

Total reported debt & leases

The total reported debt and leases displayed fluctuations over the six-year period. Starting at $19,912 million in 2013, the debt increased to a peak of $22,748 million in 2014. Following this peak, there was a general decline in debt, descending to $20,609 million in 2015 and remaining relatively stable through 2016 and 2017, with slight increases and decreases respectively. By 2018, the debt had further decreased to $21,076 million. Overall, the debt levels demonstrate initial growth followed by a slight reduction and stabilization trend.

Total Twenty-First Century Fox, Inc. stockholders’ equity

Stockholders' equity showed an overall increasing trend despite some variability. Beginning at $16,998 million in 2013, there was a moderate increase to $17,418 million in 2014, followed by a small decrease to $17,220 million in 2015. A notable decline occurred in 2016, when equity dropped sharply to $13,661 million. After this decline, equity rebounded, increasing to $15,722 million in 2017 and further to $19,564 million in 2018, marking the highest equity value in the period.

Invested capital

Invested capital demonstrated a fluctuating but generally downward trend in the earlier years, followed by recovery in later years. It began at $44,434 million in 2013, increased to $48,265 million in 2014, then decreased significantly to $44,315 million in 2015 and further declined to $42,462 million in 2016. From 2016 onwards, invested capital increased, reaching $45,055 million in 2017 and $47,272 million in 2018, though it did not quite return to the previous peak observed in 2014.

Economic Profit

The economic profit exhibited considerable volatility throughout the analyzed periods. Beginning at a positive value of 1,581 million US dollars in mid-2013, it sharply declined to a negative 2,222 million by mid-2014. The following year saw a significant recovery to a peak of 3,396 million in mid-2015, but this was not sustained, with economic profit turning negative again in subsequent years—registering -1,373 million, -1,529 million, and -2,127 million in mid-2016, mid-2017, and mid-2018 respectively. This pattern indicates unstable profitability with intermittent but significant negative performance across the years.

Invested Capital

Invested capital remained relatively stable over the period, fluctuating between approximately 42,462 million and 48,272 million US dollars. Starting at 44,434 million in mid-2013, it increased to a high of 48,265 million in mid-2014 before decreasing to 44,315 million in mid-2015. From 2016 onwards, invested capital experienced a moderate upward trend again, climbing back to 47,272 million by mid-2018. This suggests ongoing capital investment with moderate variability throughout the years.

Economic Spread Ratio

The economic spread ratio showed a pattern closely correlated with economic profit, reflecting fluctuations between positive margins and negative spreads. A positive spread of 3.56% was recorded in mid-2013, followed by a negative dip to -4.6% in mid-2014. A recovery was observed in mid-2015, reaching a peak positive spread of 7.66%, after which the ratio declined steadily into negative territory again, standing at -3.23%, -3.39%, and -4.5% in mid-2016 through mid-2018 respectively. The negative spreads in the latter years suggest the returns on invested capital fell below the cost, contributing to the observed losses in economic profit.

The financial data over the six-year period reveals several notable trends and fluctuations in key performance indicators.

Adjusted Revenues

Adjusted revenues demonstrated variability without a clear linear trend, starting at $27,472 million in 2013 and peaking at $31,880 million in 2014. There was a subsequent decline to $27,383 million by 2016, followed by a recovery to $30,498 million in 2018. Overall, revenues experienced fluctuations but generally remained within a range of approximately $27 billion to $32 billion.

Economic Profit

The economic profit exhibited significant volatility during the period. After a positive economic profit of $1,581 million in 2013, there was a substantial decline to a negative economic profit of $2,222 million in 2014. This was followed by a notable recovery in 2015 with a peak economic profit of $3,396 million, the highest in the period. However, the subsequent years from 2016 to 2018 showed a persistent negative economic profit, ranging from -$1,373 million to -$2,127 million, indicating recurring economic losses after 2015.

Economic Profit Margin

The economic profit margin closely mirrored the pattern observed in economic profit. It started positively at 5.76% in 2013, turned negative at -6.97% in 2014, then improved markedly to 11.81% in 2015. From 2016 onward, the margin turned negative again, with values between -5.02% and -6.97%, indicating that the company was generating losses relative to its revenues during these later years.

In summary, while adjusted revenues experienced some recovery and relative stability, the economic profit and its margin were highly volatile, showing a peak in 2015 but otherwise reflecting sustained economic losses in most years. This suggests challenges in translating revenue into economic profit effectively in the majority of the analyzed period.