UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
----------------------- |
FORM 8-K |
CURRENT REPORT |
Pursuant to Section 13 or 15(d) of |
The Securities Exchange Act of 1934 |
----------------------- |
Date of Report (Date of earliest event reported): |
January 27, 2015 |
United States Steel Corporation |
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(Exact name of registrant as specified in its charter) |
Delaware | 1-16811 | 25-1897152 |
--------------- | ------------------------ | ------------------- |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
600 Grant Street, Pittsburgh, PA | 15219-2800 |
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(Address of principal executive offices) | (Zip Code) |
(412) 433-1121 |
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(Registrant's telephone number, |
including area code) |
(d) | Exhibits |
99.1 | Press Release dated January 27, 2015, titled “United States Steel Corporation Reports Highest Full-Year Net Income Since 2008,” together with related unaudited financial information and statistics. |
By | /s/ Colleen M. Darragh |
-------------------------------------- | |
Colleen M. Darragh | |
Acting Controller |
• | Full-year net income of $102 million, or $0.69 per diluted share; |
• | Full-year adjusted EBITDA of $1.7 billion |
• | Operating cash flow of $1.5 billion for 2014 |
• | Net debt at year end of $2.1 billion, a decrease of $1.2 billion during 2014 |
• | Total liquidity of $3.1 billion, including $1.4 billion of cash |
• | Carnegie Way benefits of $575 million realized in 2014 |
Earnings Highlights | ||||||||||||||||
(Dollars in millions, except per share amounts) | 4Q 2014 | 3Q 2014 | 4Q 2013 | 2014 | 2013 | |||||||||||
Net Sales | $ | 4,072 | $ | 4,587 | $ | 4,269 | $ | 17,507 | $ | 17,424 | ||||||
Segment income from operations | ||||||||||||||||
Flat-rolled | $ | 247 | $ | 347 | $ | 87 | $ | 709 | $ | 105 | ||||||
U. S. Steel Europe | 34 | 29 | 12 | 133 | 28 | |||||||||||
Tubular | 121 | 69 | 32 | 261 | 190 | |||||||||||
Other Businesses | 18 | 34 | 15 | 82 | 77 | |||||||||||
Total reportable segment and Other Businesses income from operations | $ | 420 | $ | 479 | $ | 146 | $ | 1,185 | $ | 400 | ||||||
Postretirement benefit expense | (24 | ) | (26 | ) | (56 | ) | (114 | ) | (221 | ) | ||||||
Other items not allocated to segments | 1 | (594 | ) | (319 | ) | (658 | ) | (2,079 | ) | |||||||
Income (loss) from operations | $ | 397 | $ | (141 | ) | $ | (229 | ) | $ | 413 | $ | (1,900 | ) | |||
Net interest and other financial costs | 50 | 60 | 75 | 243 | 332 | |||||||||||
Income tax provision (benefit) (a) | 72 | 6 | (601 | ) | 68 | (587 | ) | |||||||||
Less: Net loss attributable to the noncontrolling interests | — | — | — | — | — | |||||||||||
Net income (loss) attributable to United States Steel Corporation (a) | $ | 275 | $ | (207 | ) | $ | 297 | $ | 102 | $ | (1,645 | ) | ||||
-Per basic share | $ | 1.89 | $ | (1.42 | ) | $ | 2.06 | $ | 0.71 | $ | (11.37 | ) | ||||
-Per diluted share | $ | 1.83 | $ | (1.42 | ) | $ | 1.93 | $ | 0.69 | $ | (11.37 | ) |
UNITED STATES STEEL CORPORATION | |||||||||||||||||||||
STATEMENT OF OPERATIONS (Unaudited) | |||||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | December 31, | ||||||||||||||||||
(Dollars in millions, except per share amounts) | 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
NET SALES | $ | 4,072 | $ | 4,587 | $ | 4,269 | $ | 17,507 | $ | 17,424 | |||||||||||
OPERATING EXPENSES (INCOME): | |||||||||||||||||||||
Cost of sales (excludes items shown below) | 3,466 | 3,848 | 3,911 | 15,449 | 16,016 | ||||||||||||||||
Selling, general and administrative expenses | 117 | 125 | 161 | 523 | 610 | ||||||||||||||||
Depreciation, depletion and amortization | 138 | 158 | 170 | 627 | 684 | ||||||||||||||||
Income from investees | (39 | ) | (50 | ) | (9 | ) | (142 | ) | (40 | ) | |||||||||||
Impairment of goodwill | — | — | 23 | — | 1,806 | ||||||||||||||||
Restructuring and other charges | 2 | 236 | 248 | 256 | 248 | ||||||||||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | 3 | 413 | — | 416 | — | ||||||||||||||||
Net gain on disposal of assets | — | (2 | ) | — | (23 | ) | — | ||||||||||||||
Other (income) expense, net | (12 | ) | — | (6 | ) | (12 | ) | — | |||||||||||||
Total operating expenses | 3,675 | 4,728 | 4,498 | 17,094 | 19,324 | ||||||||||||||||
INCOME (LOSS) FROM OPERATIONS | 397 | (141 | ) | (229 | ) | 413 | (1,900 | ) | |||||||||||||
Net interest and other financial costs | 50 | 60 | 75 | 243 | 332 | ||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | |||||||||||||||||||||
AND NONCONTROLLING INTERESTS | 347 | (201 | ) | (304 | ) | 170 | (2,232 | ) | |||||||||||||
Income tax provision (benefit) (a) | 72 | 6 | (601 | ) | 68 | (587 | ) | ||||||||||||||
Net income (loss) | 275 | (207 | ) | 297 | 102 | (1,645 | ) | ||||||||||||||
Less: Net income attributable to the | |||||||||||||||||||||
noncontrolling interests | — | — | — | — | — | ||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO | |||||||||||||||||||||
UNITED STATES STEEL CORPORATION (a) | $ | 275 | $ | (207 | ) | $ | 297 | $ | 102 | $ | (1,645 | ) | |||||||||
COMMON STOCK DATA: | |||||||||||||||||||||
Net income (loss) per share attributable to | |||||||||||||||||||||
United States Steel Corporation shareholders: | |||||||||||||||||||||
Basic (a) | $ | 1.89 | $ | (1.42 | ) | $ | 2.06 | $ | 0.71 | $ | (11.37 | ) | |||||||||
Diluted (a) | $ | 1.83 | $ | (1.42 | ) | $ | 1.93 | $ | 0.69 | $ | (11.37 | ) | |||||||||
Weighted average shares, in thousands | |||||||||||||||||||||
Basic | 145,654 | 145,348 | 144,740 | 145,164 | 144,578 | ||||||||||||||||
Diluted | 150,481 | 145,348 | 155,692 | 152,103 | 144,578 | ||||||||||||||||
Dividends paid per common share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 |
UNITED STATES STEEL CORPORATION | ||||||||||
CASH FLOW STATEMENT (Unaudited) | ||||||||||
Year Ended | ||||||||||
December 31, | ||||||||||
(Dollars in millions) | 2014 | 2013 | ||||||||
Cash provided by (used in) operating activities: | ||||||||||
Net income (loss) (a) | $ | 102 | $ | (1,645 | ) | |||||
Depreciation, depletion and amortization | 627 | 684 | ||||||||
Impairment of goodwill | — | 1,806 | ||||||||
Restructuring and other charges | 256 | 248 | ||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | 416 | — | ||||||||
Pensions and other postretirement benefits | (235 | ) | (28 | ) | ||||||
Deferred income taxes (a) | 76 | (386 | ) | |||||||
Net gain on disposal of assets | (23 | ) | — | |||||||
Working capital changes | 74 | (148 | ) | |||||||
Income taxes receivable/payable | 161 | (187 | ) | |||||||
Currency remeasurement loss | 42 | 7 | ||||||||
Other operating activities | (4 | ) | 63 | |||||||
Total | 1,492 | 414 | ||||||||
Cash (used in) provided by investing activities: | ||||||||||
Capital expenditures | (419 | ) | (477 | ) | ||||||
Acquisition of intangible assets | — | (12 | ) | |||||||
Disposal of assets | 29 | 3 | ||||||||
Other investing activities | 24 | 93 | ||||||||
Total | (366 | ) | (393 | ) | ||||||
Cash (used in) provided by financing activities: | ||||||||||
Issuance of long-term debt, net of financing costs | — | 575 | ||||||||
Repayment of long-term debt | (325 | ) | (542 | ) | ||||||
Receipts from exercise of stock options | 13 | — | ||||||||
Dividends paid | (29 | ) | (29 | ) | ||||||
Total | (341 | ) | 4 | |||||||
Effect of exchange rate changes on cash | (35 | ) | 9 | |||||||
Net increase in cash and cash equivalents | 750 | 34 | ||||||||
Cash and cash equivalents at beginning of the year | 604 | 570 | ||||||||
Cash and cash equivalents at end of the period | $ | 1,354 | $ | 604 |
UNITED STATES STEEL CORPORATION | |||||||||
CONDENSED BALANCE SHEET (Unaudited) | |||||||||
Dec. 31 | Dec. 31 | ||||||||
(Dollars in millions) | 2014 | 2013 | |||||||
Cash and cash equivalents | $ | 1,354 | $ | 604 | |||||
Receivables, net | 1,942 | 2,160 | |||||||
Inventories | 2,496 | 2,688 | |||||||
Other current assets | 639 | 626 | |||||||
Total current assets | 6,431 | 6,078 | |||||||
Property, plant and equipment, net | 4,574 | 5,922 | |||||||
Investments and long-term receivables, net | 939 | 621 | |||||||
Intangible assets, net | 204 | 271 | |||||||
Other assets | 166 | 251 | |||||||
Total assets | $ | 12,314 | $ | 13,143 | |||||
Accounts payable | $ | 2,001 | $ | 1,754 | |||||
Payroll and benefits payable | 1,003 | 974 | |||||||
Short-term debt and current maturities of long-term debt | 378 | 323 | |||||||
Other current liabilities | 187 | 194 | |||||||
Total current liabilities | 3,569 | 3,245 | |||||||
Long-term debt, less unamortized discount | 3,120 | 3,616 | |||||||
Employee benefits | 1,117 | 2,064 | |||||||
Other long-term liabilities (a) | 708 | 842 | |||||||
United States Steel Corporation stockholders' equity (a) | 3,800 | 3,375 | |||||||
Noncontrolling interests | — | 1 | |||||||
Total liabilities and stockholders' equity | $ | 12,314 | $ | 13,143 |
RECONCILIATION OF ADJUSTED EBITDA | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | ||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
Reconciliation to income (loss) from operations | ||||||||||||||||||||
Adjusted EBITDA | $ | 534 | $ | 611 | $ | 260 | $ | 1,698 | $ | 863 | ||||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | (3 | ) | (413 | ) | — | (416 | ) | — | ||||||||||||
Impairment of carbon alloy facilities | 4 | (199 | ) | — | (195 | ) | — | |||||||||||||
Write-off of pre-engineering costs | — | (37 | ) | — | (37 | ) | — | |||||||||||||
Gain on sale of real estate assets | — | 55 | — | 55 | — | |||||||||||||||
Litigation reserves | — | — | — | (70 | ) | — | ||||||||||||||
Loss on assets held for sale | — | — | — | (14 | ) | — | ||||||||||||||
Curtailment gain | — | — | — | 19 | — | |||||||||||||||
Impairment of goodwill | — | — | (23 | ) | — | (1,806 | ) | |||||||||||||
Restructuring and other charges (a) | — | — | (296 | ) | — | (296 | ) | |||||||||||||
Supplier contract dispute settlement | — | — | — | — | 23 | |||||||||||||||
EBITDA | 535 | 17 | (59 | ) | 1,040 | (1,216 | ) | |||||||||||||
Depreciation, depletion and amortization expense | (138 | ) | (158 | ) | (170 | ) | (627 | ) | (684 | ) | ||||||||||
Income (loss) from operations, as reported | $ | 397 | $ | (141 | ) | $ | (229 | ) | $ | 413 | $ | (1,900 | ) |
RECONCILIATION OF ADJUSTED NET INCOME (LOSS) | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | ||||||||||||||||
(Dollars in millions, except per share amounts) | 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
Reconciliation to net income (loss) attributable to United States Steel Corporation | ||||||||||||||||||||
Adjusted net income (loss) attributable to United States Steel Corporation (a) | $ | 274 | $ | 325 | $ | 38 | $ | 676 | $ | (110 | ) | |||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | (1 | ) | (384 | ) | — | (385 | ) | — | ||||||||||||
Impairment of carbon alloy facilities at Gary Works | 2 | (163 | ) | — | (161 | ) | — | |||||||||||||
Write-off of pre-engineering costs at Keetac | — | (30 | ) | — | (30 | ) | — | |||||||||||||
Gain on sale of real estate assets | — | 45 | — | 45 | — | |||||||||||||||
Litigation reserves | — | — | — | (46 | ) | — | ||||||||||||||
Loss on assets held for sale | — | — | — | (9 | ) | — | ||||||||||||||
Curtailment gain | — | — | — | 12 | — | |||||||||||||||
Impairment of goodwill | — | — | (23 | ) | — | (1,795 | ) | |||||||||||||
Restructuring and other charges (b) | — | — | (279 | ) | — | (279 | ) | |||||||||||||
Tax benefits (c) | — | — | 561 | — | 561 | |||||||||||||||
Repurchase premium charge (d) | — | — | — | — | (22 | ) | ||||||||||||||
Write-off of equity investment | — | — | — | — | (15 | ) | ||||||||||||||
Supplier contract dispute settlement | — | — | — | — | 15 | |||||||||||||||
Total Adjustments | 1 | (532 | ) | 259 | (574 | ) | (1,535 | ) | ||||||||||||
Net income (loss) attributable to United States Steel Corporation, as reported (a) | $ | 275 | $ | (207 | ) | $ | 297 | $ | 102 | (1,645 | ) | |||||||||
Reconciliation to diluted net income (loss) per share | ||||||||||||||||||||
Adjusted diluted net income (loss) per share (a) | $ | 1.82 | $ | 2.16 | $ | 0.27 | $ | 4.47 | $ | (0.76 | ) | |||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | (0.01 | ) | (2.54 | ) | — | (2.52 | ) | — | ||||||||||||
Impairment of carbon alloy facilities at Gary Works | 0.02 | (1.08 | ) | — | (1.06 | ) | — | |||||||||||||
Write-off of pre-engineering costs at Keetac | — | (0.21 | ) | — | (0.21 | ) | — | |||||||||||||
Gain on sale of real estate assets | — | 0.30 | — | 0.30 | — | |||||||||||||||
Litigation reserves | — | — | — | (0.31 | ) | — | ||||||||||||||
Loss on assets held for sale | — | — | — | (0.06 | ) | — | ||||||||||||||
Curtailment gain | — | — | — | 0.08 | — | |||||||||||||||
Impairment of goodwill | — | — | (0.16 | ) | — | (12.41 | ) | |||||||||||||
Restructuring and other charges (b) | — | — | (1.93 | ) | — | (1.93 | ) | |||||||||||||
Tax benefits (c) | — | — | 3.88 | — | 3.88 | |||||||||||||||
Repurchase premium charge (d) | — | — | — | — | (0.15 | ) | ||||||||||||||
Additional dilutive effects of securities | — | (0.05 | ) | (0.13 | ) | — | — | |||||||||||||
Write-off of equity investment | — | — | — | — | (0.10 | ) | ||||||||||||||
Supplier contract dispute settlement | — | — | — | — | 0.10 | |||||||||||||||
Total adjustments | 0.01 | (3.58 | ) | 1.66 | (3.78 | ) | (10.61 | ) | ||||||||||||
Diluted net income (loss) per share, as reported (a) | $ | 1.83 | $ | (1.42 | ) | $ | 1.93 | $ | 0.69 | $ | (11.37 | ) |
UNITED STATES STEEL CORPORATION | |||||||||||||||||||||
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited) | |||||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | December 31, | ||||||||||||||||||
(Dollars in millions) | 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
INCOME FROM OPERATIONS | |||||||||||||||||||||
Flat-rolled | $ | 247 | $ | 347 | $ | 87 | $ | 709 | $ | 105 | |||||||||||
U. S. Steel Europe | 34 | 29 | 12 | 133 | 28 | ||||||||||||||||
Tubular | 121 | 69 | 32 | 261 | 190 | ||||||||||||||||
Other Businesses | 18 | 34 | 15 | 82 | 77 | ||||||||||||||||
Reportable Segment and Other Businesses Income from Operations | 420 | 479 | 146 | 1,185 | 400 | ||||||||||||||||
Postretirement benefit expense | (24 | ) | (26 | ) | (56 | ) | (114 | ) | (221 | ) | |||||||||||
Other items not allocated to segments: | |||||||||||||||||||||
Loss on deconsolidation of U. S. Steel Canada and other charges | (3 | ) | (413 | ) | — | (416 | ) | — | |||||||||||||
Impairment of carbon alloy facilities | 4 | (199 | ) | — | (195 | ) | — | ||||||||||||||
Write-off of pre-engineering costs | — | (37 | ) | — | (37 | ) | — | ||||||||||||||
Gain on sale of real estate assets | — | 55 | — | 55 | — | ||||||||||||||||
Litigation reserves | — | — | — | (70 | ) | — | |||||||||||||||
Loss on assets held for sale | — | — | — | (14 | ) | — | |||||||||||||||
Curtailment gain | — | — | — | 19 | — | ||||||||||||||||
Impairment of goodwill | — | — | (23 | ) | — | (1,806 | ) | ||||||||||||||
Restructuring and other charges (a) | — | — | (296 | ) | — | (296 | ) | ||||||||||||||
Supplier contract dispute settlement | — | — | — | — | 23 | ||||||||||||||||
Total Income (Loss) from Operations | $ | 397 | $ | (141 | ) | $ | (229 | ) | $ | 413 | $ | (1,900 | ) | ||||||||
CAPITAL EXPENDITURES | |||||||||||||||||||||
Flat-rolled | $ | 103 | $ | 56 | $ | 101 | $ | 261 | $ | 349 | |||||||||||
U. S. Steel Europe | 16 | 23 | 8 | 74 | 40 | ||||||||||||||||
Tubular | 16 | 13 | 27 | 76 | 69 | ||||||||||||||||
Other Businesses | 2 | 4 | 13 | 8 | 19 | ||||||||||||||||
Total | $ | 137 | $ | 96 | $ | 149 | $ | 419 | (b) | $ | 477 | (b) |
UNITED STATES STEEL CORPORATION | |||||||||||||||||
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited) | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | December 31, | ||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||
OPERATING STATISTICS | |||||||||||||||||
Average realized price: ($/net ton) (a) | |||||||||||||||||
Flat-rolled | 775 | 777 | 750 | 772 | 735 | ||||||||||||
Flat-rolled U.S. Facilities (b) | 775 | 786 | 757 | 782 | 740 | ||||||||||||
U. S. Steel Europe | 600 | 671 | 692 | 667 | 706 | ||||||||||||
Tubular | 1,625 | 1,567 | 1,509 | 1,538 | 1,530 | ||||||||||||
Steel Shipments: (a) (c) | |||||||||||||||||
Flat-rolled (d) | 3,015 | 3,692 | 3,470 | 13,908 | 14,644 | ||||||||||||
U. S. Steel Europe | 1,108 | 987 | 1,029 | 4,179 | 4,000 | ||||||||||||
Tubular | 448 | 428 | 414 | 1,744 | 1,757 | ||||||||||||
Total Steel Shipments | 4,571 | 5,107 | 4,913 | 19,831 | 20,401 | ||||||||||||
Flat-rolled U.S. Facilities Steel Shipments(b) | 3,015 | 3,240 | 3,066 | 12,376 | 13,349 | ||||||||||||
Intersegment Shipments: (c) | |||||||||||||||||
Flat-rolled to Tubular | 381 | 439 | 363 | 1,712 | 1,699 | ||||||||||||
Raw Steel Production: (c) | |||||||||||||||||
Flat-rolled (d) | 3,664 | 4,675 | 4,474 | 16,962 | 17,867 | ||||||||||||
Flat-rolled U.S. Facilities (b) | 3,664 | 4,133 | 3,890 | 15,218 | 16,678 | ||||||||||||
U. S. Steel Europe | 1,313 | 1,111 | 1,205 | 4,788 | 4,598 | ||||||||||||
Raw Steel Capability Utilization: (d) | |||||||||||||||||
Flat-rolled | 75 | % | 86 | % | 73 | % | 80 | % | 74 | % | |||||||
Flat-rolled U.S. Facilities (e) | 75 | % | 85 | % | 80 | % | 78 | % | 86 | % | |||||||
U. S. Steel Europe | 104 | % | 88 | % | 96 | % | 96 | % | 92 | % |