EX-99.1 2 a20190630er.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

NEWS RELEASE
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CONTACTS:
Media
Meghan Cox        
Manager                
Corporate Communications    
T - (412) 433-6777         
E - mmcox@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 SECOND QUARTER 2019 RESULTS

•
Net earnings of $68 million, or $0.39 per diluted share
•
Adjusted net earnings of $78 million, or $0.45 per diluted share
•
Adjusted EBITDA of $278 million
•
Returned $37 million of capital to stockholders, including $28 million of share repurchases

PITTSBURGH, August 1, 2019 – United States Steel Corporation (NYSE: X) reported second quarter 2019 net earnings of $68 million, or $0.39 per diluted share. Adjusted net earnings were $78 million, or $0.45 per diluted share. This compares to second quarter 2018 net earnings of $214 million, or $1.20 per diluted share. Adjusted net earnings for second quarter 2018 were $262 million, or $1.46 per diluted share.
    

2


Earnings Highlights
 
 
Quarter Ended
 
Six Months Ended
 
June 30,
 
June 30,
(Dollars in millions, except per share amounts)
2019
2018
 
2019
2018
Net Sales
$
3,545

$
3,609

 
$
7,044

$
6,758

Segment earnings (loss) before interest and income taxes
 
 
 
 
 
     Flat-Rolled
$
134

$
224

 
$
229

$
257

     U. S. Steel Europe
(10
)
115

 
19

225

     Tubular
(6
)
(35
)
 
4

(62
)
     Other Businesses
10

17

 
18

28

Total segment earnings before interest and income taxes
$
128

$
321

 
$
270

$
448

Other items not allocated to segments
(13
)
(20
)
 
(44
)
(10
)
Earnings before interest and income taxes
$
115

$
301

 
$
226

$
438

Net interest and other financial costs
54

75

 
103

193

Income tax (benefit) provision
(7
)
12

 
1

13

Net earnings
$
68

$
214

 
$
122

$
232

Earnings per diluted share
$
0.39

$
1.20

 
$
0.70

$
1.30

 
 
 
 
 
 
Adjusted net earnings (a)
$
78

$
262

 
$
159

$
319

Adjusted net earnings per diluted share (a)
$
0.45

$
1.46

 
$
0.92

$
1.79

Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a)
$
278

$
451

 
$
563

$
706

(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.
"Our execution in the second quarter was strong despite challenging market conditions,” commented President and Chief Executive Officer David B. Burritt. “We overcame logistics headwinds from severe weather and delivered for our customers, exceeding even our own expectations. We also completed several Asset Revitalization outages across the flat-rolled footprint on time and on budget, including upgrades to our Mon Valley steel shop. We expect these investments to enhance operating performance and reliability to provide high quality, low cost liquid steel for our future endless casting and rolling investment."
Burritt added, “Execution of our technology investments, including the Mon Valley endless casting and rolling line, Tubular electric arc furnace, and USSK Dynamo Line, are on track to deliver almost $400 million of incremental run-rate EBITDA benefits when completed. With each passing quarter, we are making the company more competitive and our continued execution is proof that our strategy is working.”

*****

    

3


The Company will conduct a conference call on second quarter 2019 earnings on Friday, August 2, at 8:30 a.m. Eastern Daylight. 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 August 2.



 
UNITED STATES STEEL CORPORATION
 
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2019
 
2018
 
2019
 
2018
OPERATING STATISTICS
 
 
 
 
 
 
 
 
Average realized price: ($/net ton unless otherwise noted)(a)
 
 
 
 
 
 
 
 
 
Flat-Rolled
 
779

 
819

 
789

 
780

 
U. S. Steel Europe
 
652

 
707

 
661

 
707

 
U. S. Steel Europe (€/net ton)
 
580

 
593

 
585

 
584

 
Tubular
 
1,524

 
1,449

 
1,537

 
1,420

Steel shipments (thousands of net tons):(a)
 
 
 
 
 
 
 
 
 
Flat-Rolled
 
2,804

 
2,584

 
5,529

 
5,118

 
U. S. Steel Europe
 
1,004

 
1,156

 
2,068

 
2,283

 
Tubular
 
195

 
201

 
402

 
380

 
    Total Steel Shipments
 
4,003

 
3,941

 
7,999

 
7,781

 
 
 
 
 
 
 
 
 
 
Intersegment steel (unless otherwise noted) shipments (thousands of net tons):
 
 
 
 
 
 
 
 
 
Flat-Rolled to Tubular
 
52

 
65

 
133

 
132

 
Flat-Rolled to U. S. Steel Europe (iron ore pellets and fines)
 
189

 
—

 
189

 
—

 
U. S. Steel Europe to Flat-Rolled
 
—

 
22

 
—

 
22

Raw steel production (thousands of net tons):
 
 
 
 
 
 
 
 
 
Flat-Rolled
 
2,984

 
2,841

 
6,059

 
5,626

 
U. S. Steel Europe
 
1,148

 
1,308

 
2,307

 
2,600

Raw steel capability utilization:(b)
 
 
 
 
 
 
 
 
 
Flat-Rolled
 
70
%
 
67
%
 
72
%
 
67
%
 
U. S. Steel Europe
 
92
%
 
105
%
 
93
%
 
105
%
 
 
 
 
 
 
 
 
 
 
CAPITAL EXPENDITURES
 
 
 
 
 
 
 
 
Flat-Rolled
 
$
254

 
$
142

 
$
501

 
$
318

U. S. Steel Europe
 
41

 
17

 
75

 
38

Tubular
 
29

 
13

 
48

 
24

Other Businesses
 
2

 
1

 
4

 
1

 
Total
 
$
326

 
$
173

 
$
628

 
$
381

(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
 
Six Months Ended
 
 
June 30,
 
June 30,
(Dollars in millions, except per share amounts)
2019
 
2018
 
2019
 
2018
NET SALES
 
$
3,545

 
$
3,609

 
$
7,044

 
$
6,758

 
 
 
 
 
 
 
 
 
OPERATING EXPENSES (INCOME):
 
 
 
 
 
 
 
 
Cost of sales (excludes items shown below)
 
3,227

 
3,121

 
6,399

 
5,929

Selling, general and administrative expenses
 
82

 
92

 
160

 
170

Depreciation, depletion and amortization
 
150

 
130

 
293

 
258

Earnings from investees
 
(28
)
 
(19
)
 
(37
)
 
(22
)
Gain on equity investee transactions
 
—

 
(18
)
 
—

 
(18
)
Net loss on disposal of assets
 
—

 
1

 
4

 
2

Other (income) expense, net
 
(1
)
 
1

 
(1
)
 
1

 
 
 
 
 
 
 
 
 
Total operating expenses
 
3,430

 
3,308

 
6,818

 
6,320

 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INTEREST AND INCOME TAXES
 
115

 
301

 
226

 
438

Net interest and other financial costs
 
54

 
75

 
103

 
193

 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INCOME TAXES
 
61

 
226

 
123

 
245

Income tax (benefit) provision
 
(7
)
 
12

 
1

 
13

 
 
 
 
 
 
 
 
 
Net earnings
 
68

 
214

 
122

 
232

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

 
—

 
—

 
—

NET EARNINGS ATTRIBUTABLE TO
 
 
 
 
 
 
 
 
UNITED STATES STEEL CORPORATION
 
$
68

 
$
214

 
$
122

 
$
232

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

$
0.39

 
$
1.21

 
$
0.71

 
$
1.32

        Diluted
 
$
0.39

 
$
1.20

 
$
0.70

 
$
1.30

    Weighted average shares, in thousands
 
 
 
 
 
 
 
 
        Basic
 
171,992

 
177,027

 
172,613

 
176,594

        Diluted
 
172,512

 
178,903

 
173,475

 
178,485

    Dividends paid per common share
 
$
0.05

 
$
0.05

 
$
0.10

 
$
0.10






UNITED STATES STEEL CORPORATION
CONDENSED CASH FLOW STATEMENT (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
 
June 30,
(Dollars in millions)
 
2019
 
2018
Cash provided by (used in) operating activities:
 
 
 
 
Net earnings
 
$
122

 
$
232

 
Depreciation, depletion and amortization
293

 
258

 
Gain on equity investee transactions
—

 
(18
)
 
Loss on debt extinguishment
—

 
74

 
Pensions and other postretirement benefits
55

 
37

 
Deferred income taxes
(3
)
 
(1
)
 
Net loss on disposal of assets
4

 
2

 
Working capital changes
(133
)
 
(271
)
 
Income taxes receivable/payable
39

 
(3
)
 
Other operating activities
(11
)
 
(17
)
 
 
Total
 
366

 
293

 
 
 
 
 
 
 
Cash used in investing activities:
 
 
 
 
Capital expenditures
 
(628
)
 
(381
)
 
Disposal of assets
 
1

 
1

 
Other investing activities
 
—

 
(1
)
 
 
Total
 
(627
)
 
(381
)
 
 
 
 
 
 
 
Cash provided by (used in) financing activities:
 
 
 
 
Issuance of long-term debt, net of financing costs
 
—

 
640

 
Repayment of long-term debt
 
(1
)
 
(874
)
 
Common stock repurchased
 
(70
)
 
—

 
Dividends paid
 
(18
)
 
(18
)
 
Receipts from exercise of stock options
 
—

 
33

 
Taxes paid for equity compensation plans
 
(7
)
 
(8
)
 
 
Total
 
(96
)
 
(227
)
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
(1
)
 
(10
)
 
 
 
 
 
 
 
Net decrease in cash, cash equivalents and restricted cash
(358
)
 
(325
)
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
$
682

 
$
1,272







UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
 
 
 
 
 
 
 
 
 
June 30,
 
Dec. 31,
(Dollars in millions)
 
2019
 
2018
Cash and cash equivalents
$
651

 
$
1,000

Receivables, net
1,638

 
1,659

Inventories
2,166

 
2,092

Other current assets
92

 
79

 
Total current assets
4,547

 
4,830

Operating lease assets
237

 
—

Property, plant and equipment, net
5,233

 
4,865

Investments and long-term receivables, net
550

 
513

Intangible assets, net
154

 
158

Deferred income tax benefits
433

 
445

Other noncurrent assets
137

 
171

 
 
 
 
 
 
 
Total assets
 
$
11,291

 
$
10,982

 
 
 
 
 
 
Accounts payable and other accrued liabilities
2,615

 
2,535

Payroll and benefits payable
334

 
440

Short-term debt and current maturities of long-term debt
70

 
65

Other current liabilities
204

 
157

 
Total current liabilities
3,223

 
3,197

Noncurrent operating lease liabilities
188

 
—

Long-term debt, less unamortized discount and debt issuance costs
2,345

 
2,316

Employee benefits
926

 
980

Other long-term liabilities
297

 
286

United States Steel Corporation stockholders' equity
4,311

 
4,202

Noncontrolling interests
1

 
1

 
 
 
 
 
 
 
Total liabilities and stockholders' equity
$
11,291

 
$
10,982













UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
(Dollars in millions)
2019
 
2018
 
2019
 
2018
Reconciliation to Adjusted EBITDA
 
 
 
 
 
 
 
 
Net earnings attributable to United States Steel Corporation
$
68

 
$
214

 
$
122

 
$
232

 
Income tax (benefit) provision
(7
)
 
12

 
1

 
13

 
Net interest and other financial costs
54

 
75

 
103

 
193

 
Depreciation, depletion and amortization expense
150

 
130

 
293

 
258

 
EBITDA
265

 
431

 
519

 
696

 
December 24, 2018 Clairton coke making facility fire
13

 
—

 
44

 
—

 
Gain on equity investee transactions
—

 
(18
)
 
—

 
(18
)
 
Granite City Works restart costs
—

 
36

 
—

 
36

 
Granite City Works adjustment to temporary idling charges
—

 
2

 
—

 
(8
)
 
Adjusted EBITDA
$
278

 
$
451

 
$
563

 
$
706



UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET EARNINGS
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
(Dollars in millions, except per share amounts) (a)
2019
 
2018
 
2019
 
2018
Reconciliation to adjusted net earnings (loss) attributable to United States Steel Corporation
 
 
 
 
 
 
 
 
Net earnings attributable to United States Steel Corporation
$
68

 
$
214

 
$
122

 
$
232

 
December 24, 2018 Clairton coke making facility fire
10

 
—

 
37

 
—

 
Gain on equity investee transactions
—

 
(18
)
 
—

 
(18
)
 
Granite City Works restart costs
—

 
36

 
—

 
36

 
Granite City Works adjustment to temporary idling charges
—

 
2

 
—

 
(8
)
 
Loss on debt extinguishment and other related costs
—

 
28

 
—

 
77

 
     Total adjustments
10

 
48

 
37

 
87

 
Adjusted net earnings attributable to United States Steel Corporation
$
78

 
$
262

 
$
159

 
$
319

 
 
 
 
 
 
 
 
 
Reconciliation to adjusted diluted net earnings (loss) per share
 
 
 
 
 
 
 
 
Diluted net earnings per share
$
0.39

 
$
1.20

 
$
0.70

 
$
1.30

 
December 24, 2018 Clairton coke making facility fire
0.06

 
—

 
0.22

 
—

 
Gain on equity investee transactions
—

 
(0.10
)
 
—

 
(0.10
)
 
Granite City Works restart costs
—

 
0.20

 
—

 
0.20

 
Granite City Works adjustment to temporary idling charges
—

 
0.01

 
—

 
(0.04
)
 
Loss on debt extinguishment and other related costs
—

 
0.15

 
—

 
0.43

 
     Total adjustments
0.06

 
0.26

 
0.22

 
0.49

 
Adjusted diluted net earnings per share
$
0.45

 
$
1.46

 
$
0.92

 
$
1.79

(a) The adjustments included in this table for the three and six months ended June 30, 2019 have been tax effected. The adjustments for the three and six months ended June 30, 2018 have not been tax effected due to the full valuation allowance on our domestic deferred tax assets in 2018.



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 the December 24, 2018 Clairton coke making facility fire, the effects of gains on equity investee transactions, facility restart costs, significant temporary idling charges and adjustments to those charges and debt extinguishment and other related costs 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, 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-
2019-023