Loading, Please Wait...

CST: 20/08/2019 13:53:55   

United States Steel Corporation Reports Second Quarter 2019 Results

18 Days ago

  • 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, Aug. 01, 2019 (GLOBE NEWSWIRE) -- 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.           

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.”            

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.


CONTACTS:  
   
Media Investors/Analysts
Meghan Cox Kevin Lewis
Manager General Manager
Corporate Communications Investor Relations
T - (412) 433-6777 T - (412) 433-6935
E - mmcox@uss.com E - KLewis@uss.com 

Is your business listed correctly on America’s largest city directory network of 1,000 portals?