X

UNITED STATES STEEL CORP

Basic Materials | Mid Cap

$0.14

EPS Forecast

$3,704

Revenue Forecast

Announcing earnings for the quarter ending 2024-12-31 soon
EX-99.1 2 a20191231er.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

NEWS RELEASE
blueusslogoa.gif



CONTACTS:
Media
Amanda Malkowski
Public Affairs Rep.
Corporate Communications    
T - (412) 433-2512         
E - almalkowski@uss.com         

Investors/Analysts
Kevin Lewis
General Manager
Investor Relations
T - (412) 433-6935
E - KLewis@uss.com



FOR IMMEDIATE RELEASE:
UNITED STATES STEEL CORPORATION REPORTS FOURTH QUARTER AND FULL-YEAR 2019 RESULTS

•
Full-year 2019 net loss of $642 million, or $3.75 per diluted share; fourth quarter 2019 net loss of $680 million, or $4.00 per diluted share. Includes $609 million and $567 million of restructuring charges and tax valuation allowance for full year and fourth quarter 2019, respectively.
•
Full-year 2019 adjusted net earnings of $15 million, or $0.09 per diluted share; fourth quarter 2019 adjusted net loss of $109 million, or $0.64 per diluted share.
•
Full-year 2019 adjusted EBITDA of $711 million; fourth quarter 2019 adjusted EBITDA of $4 million.
•
Transition to our world-competitive, "best of both" business model supported by significant actions taken in 2019: achieved $75 million of run-rate fixed cost reductions, adjusted capital spending to prioritize strategic investments, raised $1.1 billion of incremental capital to support nimble strategy execution and closed on our 49.9% investment in Big River Steel.

PITTSBURGH, January 30, 2020 – United States Steel Corporation (NYSE: X) reported a full-year 2019 net loss of $642 million, or $3.75 per diluted share. Adjusted net earnings were $15 million, or $0.09 per diluted

2


share. This compares to full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share. Adjusted net earnings for 2018 were $957 million, or $5.36 per diluted share.
Fourth quarter 2019 net loss of $680 million, or $4.00 per diluted share. Adjusted net loss was $109 million, or $0.64 per diluted share. This compares to fourth quarter 2018 net earnings of $592 million, or $3.34 per diluted share. Adjusted net earnings for fourth quarter 2018 were $324 million, or $1.82 per diluted share.
Earnings Highlights
 
 
Quarter Ended
 
Year Ended
 
December 31,
 
December 31,
(Dollars in millions, except per share amounts)
2019
 
2018
 
2019
 
2018
Net Sales
$
2,824

 
$
3,691

 
$
12,937

 
$
14,178

Segment (loss) earnings before interest and income taxes
 
 
 
 
 
 
 
     Flat-Rolled
$
(79
)
 
$
328

 
$
196

 
$
883

     U. S. Steel Europe
(30
)
 
62

 
(57
)
 
359

     Tubular
(46
)
 
(3
)
 
(67
)
 
(58
)
     Other Businesses
(3
)
 
11

 
23

 
55

Total segment (loss) earnings before interest and income taxes
$
(158
)
 
$
398

 
$
95

 
$
1,239

Other items not allocated to segments
(218
)
 
(85
)
 
(325
)
 
(115
)
(Loss) earnings before interest and income taxes
$
(376
)
 
$
313

 
$
(230
)
 
$
1,124

Net interest and other financial costs
71

 
60

 
222

 
312

Income tax provision (benefit)
233

 
(339
)
 
190

 
(303
)
Net (loss) earnings
$
(680
)
 
$
592

 
$
(642
)
 
$
1,115

(Loss) earnings per diluted share
$
(4.00
)
 
$
3.34

 
$
(3.75
)
 
$
6.25

 
 
 
 
 
 
 
 
Adjusted net (loss) earnings (a)
$
(109
)
 
$
324

 
$
15

 
$
957

Adjusted net (loss) earnings per diluted share (a)
$
(0.64
)
 
$
1.82

 
$
0.09

 
$
5.36

Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a)
$
4

 
$
535

 
$
711

 
$
1,760

(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.
“We are pleased to deliver better than expected results to end the year and are excited to turn the page to 2020 where we will continue to transition the business towards our future," said U. S. Steel President and Chief Executive Officer David B. Burritt.  "2019 was a year of notable strategic progress and we took swift action to reposition the business ... we achieved $75 million of run-rate fixed cost reductions, we demonstrated flexibility by adjusting our 2020 capital spending to prioritize strategic investments, and we de-risked strategy execution by raising $1.1 billion of incremental capital."


3


Burritt continued, “We will take another step towards our world-competitive, 'best of both' strategy this year as we complete two important strategic projects … the electric arc furnace at Tubular and our XG3 AHSS investment at our PRO-TEC joint venture. These projects will be yet another proof point to the market that our strategy will deliver cost and capability differentiation that is valuable to our customers, stockholders and employees. I have never been more confident in our strategy and that our investments in Big River and Endless Casting and Rolling are the right priorities. We won't be the biggest steel company ... but we will be the only 'best of both' steel company."
The Company currently expects the first quarter of 2020 to be the trough for the year due to the normal seasonality of our mining operations and lower first quarter shipments in Flat-rolled as the Company prepares for the April blast furnace outage at Gary Works. Big River Steel expects their full year 2020 depreciation and amortization expense and net interest costs to be approximately $150 million and approximately $95 million, respectively.

*****
The Company will conduct a conference call on the fourth quarter and full-year 2019 earnings on Friday, January 31, at 8:30 a.m. Eastern Standard. To listen to the webcast of the conference call, and to access the company's slide presentation, visit the U. S. Steel website, www.ussteel.com, and click on the “Investors” section. Replays of the conference call will be available on the website after 10:30 a.m. on January 31.





UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2019
 
2018
 
2019
 
2018
OPERATING STATISTICS
 
 
 
 
 
 
 
Average realized price: ($/net ton unless otherwise noted)(a)
 
 
 
 
 
 
 
 
Flat-Rolled
699

 
823

 
753

 
811

 
U. S. Steel Europe
622

 
686

 
652

 
693

 
U. S. Steel Europe (€/net ton)
562

 
601

 
582

 
586

 
Tubular
1,298

 
1,488

 
1,450

 
1,483

Steel shipments (thousands of net tons):(a)
 
 
 
 
 
 
 
 
Flat-Rolled
2,517

 
2,733

 
10,700

 
10,510

 
U. S. Steel Europe
757

 
1,073

 
3,590

 
4,457

 
Tubular
193

 
216

 
769

 
780

 
    Total Steel Shipments
3,467

 
4,022

 
15,059

 
15,747

 
 
 
 
 
 
 
 
 
Intersegment steel (unless otherwise noted) shipments (thousands of net tons):
 
 
 
 
 
 
 
 
Flat-Rolled to Tubular
46

 
66

 
258

 
224

 
Flat-Rolled to U. S. Steel Europe (iron ore pellets and fines)
—

 
—

 
424

 
—

 
U. S. Steel Europe to Flat-Rolled
—

 
—

 
—

 
22

Raw steel production (thousands of net tons):
 
 
 
 
 
 
 
 
Flat-Rolled
2,567

 
3,334

 
11,409

 
11,893

 
U. S. Steel Europe
773

 
1,213

 
3,903

 
5,023

Raw steel capability utilization:(b)
 
 
 
 
 
 
 
 
Flat-Rolled
60
%
 
78
%
 
67
%
 
70
%
 
U. S. Steel Europe
61
%
 
96
%
 
78
%
 
100
%
 
 
 
 
 
 
 
 
 
CAPITAL EXPENDITURES (dollars in millions)
 
 
 
 
 
 
 
 
Flat-Rolled
$
179

 
$
289

 
$
943

 
$
820

 
U. S. Steel Europe
42

 
41

 
153

 
104

 
Tubular
48

 
12

 
145

 
45

 
Other Businesses
5

 
13

 
11

 
32

 
Total
$
274

 
$
355

 
$
1,252

 
$
1,001

(a) Excludes intersegment shipments.
(b) Based on annual raw steel production capability of 17.0 million net tons for Flat-Rolled and 5.0 million net tons for U. S. Steel Europe.





UNITED STATES STEEL CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
December 31,
 
December 31,
(Dollars in millions, except per share amounts)
2019
 
2018
 
2019
 
2018
NET SALES
 
$
2,824

 
$
3,691

 
$
12,937

 
$
14,178

 
 
 
 
 
 
 
 
 
Operating expenses (income):
 
 
 
 
 
 
 
 
Cost of sales (excludes items shown below)
 
2,781

 
3,204

 
12,082

 
12,305

Selling, general and administrative expenses
 
66

 
85

 
289

 
336

Depreciation, depletion and amortization
 
162

 
137

 
616

 
521

Earnings from investees
 
(11
)
 
(22
)
 
(79
)
 
(61
)
Gain on equity investee transactions
 
—

 
(20
)
 
—

 
(38
)
Restructuring charges
 
221

 
—

 
275

 
—

Net gain on disposal of assets
 
(4
)
 
(3
)
 
(1
)
 
(6
)
Other income, net
 
(15
)
 
(3
)
 
(15
)
 
(3
)
Total operating expenses
 
3,200

 
3,378

 
13,167

 
13,054

 
 
 
 
 
 
 
 
 
(LOSS) EARNINGS BEFORE INTEREST AND INCOME TAXES
 
(376
)
 
313

 
(230
)
 
1,124

Net interest and other financial costs
 
71

 
60

 
222

 
312

 
 
 
 
 
 
 
 
 
(LOSS) EARNINGS BEFORE INCOME TAXES
 
(447
)
 
253

 
(452
)
 
812

Income tax provision (benefit)
 
233

 
(339
)
 
190

 
(303
)
 
 
 
 
 
 
 
 
 
Net (loss) earnings
 
(680
)
 
592

 
(642
)
 
1,115

Less: Net earnings (loss) attributable to noncontrolling interests
 
—

 
—

 
—

 
—

NET (LOSS) EARNINGS ATTRIBUTABLE TO UNITED STATES STEEL CORPORATION
 
$
(680
)
 
$
592

 
$
(642
)
 
$
1,115

 
 
 
 
 
 
 
 
 
COMMON STOCK DATA:
 
 
 
 
 
 
 
 
Net (loss) earnings per share attributable to
 
 
 
 
 
 
 
 
   United States Steel Corporation stockholders:
 
 
 
 
 
 
 
 
        Basic

$
(4.00
)
 
$
3.36

 
$
(3.75
)
 
$
6.31

        Diluted
 
$
(4.00
)
 
$
3.34

 
$
(3.75
)
 
$
6.25

    Weighted average shares, in thousands
 
 
 
 
 
 
 
 
        Basic
 
170,041

 
176,091

 
171,418

 
176,633

        Diluted
 
170,041

 
177,649

 
171,418

 
178,461

    Dividends paid per common share
 
$
0.05

 
$
0.05

 
$
0.20

 
$
0.20






UNITED STATES STEEL CORPORATION
CONDENSED CASH FLOW STATEMENT (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
December 31,
(Dollars in millions)
 
2019
 
2018
Cash provided by (used in) operating activities:
 
 
 
 
Net (loss) earnings
$
(642
)
 
$
1,115

 
Depreciation, depletion and amortization
616

 
521

 
Gain on equity investee transactions
—

 
(38
)
 
Restructuring charges
275

 
—

 
Loss on debt extinguishment
—

 
98

 
Pensions and other post-employment benefits
101

 
77

 
Deferred income taxes
215

 
(329
)
 
Net gain on disposal of assets
(1
)
 
(6
)
 
Working capital changes
276

 
(404
)
 
Income taxes receivable/payable
13

 
(8
)
 
Other operating activities
(171
)
 
(88
)
 
 
Total
 
682

 
938

 
 
 
 
 
 
 
Cash used in investing activities:
 
 
 
 
Capital expenditures
(1,252
)
 
(1,001
)
 
Investment in Big River Steel
(710
)
 
—

 
Disposal of assets
4

 
10

 
Proceeds from sale of ownership interests in equity investees
—

 
30

 
Other investing activities
—

 
(2
)
 
 
Total
 
(1,958
)
 
(963
)
 
 
 
 
 
 
 
Cash provided by (used in) financing activities:
 
 
 
 
Revolving credit facilities - borrowings, net of financing costs
860

 
228

 
Revolving credit facilities - repayments
(100
)
 
—

 
Issuance of long-term debt, net of financing costs
702

 
640

 
Repayment of long-term debt
(155
)
 
(1,299
)
 
Common stock repurchased
(88
)
 
(75
)
 
Receipts from exercise of stock options
—

 
35

 
Taxes paid for equity compensation plans
(7
)
 
(8
)
 
Dividends paid
(35
)
 
(36
)
 
 
Total
 
1,177

 
(515
)
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
(2
)
 
(17
)
 
 
 
 
 
 
 
Net decrease in cash, cash equivalents and restricted cash
(101
)
 
(557
)
Cash, cash equivalents and restricted cash at beginning of the year
1,040

 
1,597

 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of the period
$
939

 
$
1,040






UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
 
 
 
 
 
 
 
 
 
December 31,
 
December 31,
(Dollars in millions)
 
2019
 
2018
Cash and cash equivalents
$
749

 
$
1,000

Receivables, net
1,177

 
1,659

Inventories
1,785

 
2,092

Other current assets
102

 
79

 
Total current assets
3,813

 
4,830

Operating lease assets
230

 
—

Property, plant and equipment, net
5,447

 
4,865

Investments and long-term receivables, net
1,466

 
513

Intangible assets, net
150

 
158

Deferred income tax benefits
7

 
445

Other noncurrent assets
530

 
171

 
 
 
 
 
 
 
Total assets
 
$
11,643

 
$
10,982

 
 
 
 
 
 
Accounts payable and other accrued liabilities
2,054

 
2,535

Payroll and benefits payable
383

 
440

Short-term debt and current maturities of long-term debt
14

 
65

Other current liabilities
221

 
157

 
Total current liabilities
2,672

 
3,197

Noncurrent operating lease liabilities
177

 
—

Long-term debt, less unamortized discount and debt issuance costs
3,627

 
2,316

Employee benefits
532

 
980

Other long-term liabilities
554

 
286

United States Steel Corporation stockholders' equity
4,080

 
4,202

Noncontrolling interests
1

 
1

 
 
 
 
 
 
 
Total liabilities and stockholders' equity
$
11,643

 
$
10,982













UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET (LOSS) EARNINGS
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
December 31,
 
December 31,
(Dollars in millions, except per share amounts) (a)
2019
 
2018
 
2019
 
2018
Reconciliation to adjusted net (loss) earnings attributable to United States Steel Corporation
 
 
 
 
 
 
 
Net (loss) earnings attributable to United States Steel Corporation
$
(680
)
 
$
592

 
$
(642
)
 
$
1,115

 
December 24, 2018 Clairton coke making facility fire
(3
)
 
—

 
41

 
—

 
Restructuring charges
221

 
—

 
263

 
—

 
Big River Steel options mark to market
7

 
—

 
7

 
—

 
United Steelworkers labor agreement signing bonus & related costs
—

 
88

 
—

 
81

 
Tax valuation allowance
346

 
(374
)
 
346

 
(374
)
 
Gain on equity investee transactions
—

 
(20
)
 
—

 
(38
)
 
Loss on debt extinguishment and related costs
—

 
21

 
—

 
101

 
Granite City Works restart costs
—

 
17

 
—

 
80

 
Granite City Works temporary idling charges
—

 
—

 
—

 
(8
)
 
Total adjustments
571

 
(268
)
 
657

 
(158
)
Adjusted net (loss) earnings attributable to United States Steel Corporation
$
(109
)
 
$
324

 
$
15

 
$
957

 
 
 
 
 
 
 
 
 
Reconciliation to adjusted diluted net (loss) earnings per share
 
 
 
 
 
 
 
Diluted net (loss) earnings per share
$
(4.00
)
 
$
3.34

 
$
(3.75
)
 
$
6.25

 
December 24, 2018 Clairton coke making facility fire
(0.02
)
 
—

 
0.23

 
—

 
Restructuring charges
1.30

 
—

 
1.53

 
—

 
Big River Steel options mark to market
0.04

 
—

 
0.04

 
—

 
United Steelworkers labor agreement signing bonus & related costs
—

 
0.49

 
—

 
0.45

 
Tax valuation allowance
2.04

 
(2.11
)
 
2.04

 
(2.11
)
 
Gain on equity investee transactions
—

 
(0.11
)
 
—

 
(0.21
)
 
Loss on debt extinguishment and related costs
—

 
0.12

 
—

 
0.57

 
Granite City Works restart costs
—

 
0.09

 
—

 
0.45

 
Granite City Works temporary idling charges
—

 
—

 
—

 
(0.04
)
 
Total adjustments
3.36

 
(1.52
)
 
3.84

 
(0.89
)
Adjusted diluted net (loss) earnings per share
$
(0.64
)
 
$
1.82

 
$
0.09

 
$
5.36

(a) The adjustments included in this table for the nine months ended September 30, 2019 have been tax effected. This includes the first nine months of the 2019 year to date amounts. The adjustments for the three months ended December 31, 2019 and the three and twelve months ended December 31, 2018 have not been tax effected due to the full valuation allowance on our domestic deferred tax assets in the fourth quarter of 2019 and the entirety of 2018.






UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
December 31,
 
December 31,
(Dollars in millions)
2019
 
2018
 
2019
 
2018
Reconciliation to Adjusted EBITDA
 
 
 
 
 
 
 
 
Net (loss) earnings attributable to United States Steel Corporation
$
(680
)
 
$
592

 
$
(642
)
 
$
1,115

 
Income tax provision (benefit)
233

 
(339
)
 
190

 
(303
)
 
Net interest and other financial costs
71

 
60

 
222

 
312

 
Depreciation, depletion and amortization expense
162

 
137

 
616

 
521

 
EBITDA
(214
)
 
450

 
386

 
1,645

 
December 24, 2018 Clairton coke making facility fire
(3
)
 
—

 
50

 
—

 
Restructuring charges
221

 
—

 
275

 
—

 
United Steelworkers labor agreement signing bonus & related costs
—

 
88

 
—

 
81

 
Gain on equity investee transactions
—

 
(20
)
 
—

 
(38
)
 
Granite City Works restart costs
—

 
17

 
—

 
80

 
Granite City Works temporary idling charges
—

 
—

 
—

 
(8
)
 
Adjusted EBITDA
$
4

 
$
535

 
$
711

 
$
1,760





















We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, earnings (loss) before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, which are non-GAAP measures, as additional measurements to enhance the understanding of our operating performance. We believe that EBITDA, considered along with net earnings (loss), is a relevant indicator of trends relating to our operating performance and provides management and investors with additional information for comparison of our operating results to the operating results of other companies.
Adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the financial effects of items such as restructuring charges, the December 24, 2018 Clairton coke making facility fire, the Big River Steel options mark to market, United Steelworkers labor agreement signing bonus and related costs, the impact of the tax valuation allowance, the effects of gains on equity investee transactions, debt extinguishment and other related costs, facility restart costs, significant temporary idling charges and other charges that are not part of the Company's core operations (Adjustment Items). Adjusted EBITDA is also a non-GAAP measure that excludes the financial effects of the Adjustment Items. We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA to enhance the understanding of our ongoing operating performance and established trends affecting our core operations, by excluding the Adjustment Items. U. S. Steel's management considers adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA as alternative measures of operating performance and not alternative measures of the Company's liquidity. U. S. Steel’s management considers adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA useful to investors by facilitating a comparison of our operating performance to the operating performance of our competitors. Additionally, the presentation of adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA provides insight into management’s view and assessment of the Company’s ongoing operating performance, because management does not consider the adjusting items when evaluating the Company’s financial performance. Adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA should not be considered a substitute for net earnings (loss), earnings (loss) per diluted share or other financial measures as computed in accordance with U.S. GAAP and is not necessarily comparable to similarly titled measures used by other companies. A condensed consolidated statement of operations (unaudited), condensed consolidated cash flow statement (unaudited), condensed consolidated balance sheet (unaudited) and preliminary supplemental statistics (unaudited) for U. S. Steel are attached.






CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This release contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “will” and similar expressions or by using future dates in connection with any discussion of, among other things, operating performance, trends, events or developments that we expect or anticipate will occur in the future, statements relating to volume changes, share of sales and earnings per share changes, and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to the risks and uncertainties described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, and those described from time to time in our future reports filed with the Securities and Exchange Commission. References to "we," "us," "our," the "Company," and "U. S. Steel," refer to United States Steel Corporation and its consolidated subsidiaries.

-oOo-
2020-009