- Net loss of $589 million, or $3.36 per diluted
share
- Adjusted net loss of $469 million, or $2.67 per diluted
share
- Adjusted EBITDA loss of $264 million
- Liquidity of $2.652 billion, including cash of $2.300
billion
United States Steel Corporation (NYSE:X) reported second quarter
2020 net loss of $589 million, or $3.36 per diluted share. Adjusted
net loss was $469 million, or $2.67 per diluted share. This
compares to second quarter 2019 net earnings of $68 million, or
$0.39 per diluted share. Adjusted net earnings for second quarter
2019 were $78 million, or $0.45 per diluted share.
Earnings Highlights
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions, except per share
amounts)
2020
2019
2020
2019
Net Sales
$
2,091
$
3,545
$
4,839
$
7,044
Segment (loss) earnings before interest
and income taxes
Flat-Rolled
$
(329)
$
134
$
(364)
$
229
U. S. Steel Europe
(26)
(10)
(40)
19
Tubular
(47)
(6)
(95)
4
Other Businesses
(21)
10
(20)
18
Total segment (loss) earnings before
interest and income taxes
$
(423)
$
128
$
(519)
$
270
Other items not allocated to segments
(109)
(13)
(388)
(44)
(Loss) earnings before interest and
income taxes
$
(532)
$
115
$
(907)
$
226
Net interest and other financial
costs
62
54
97
103
Income tax (benefit) provision
(5)
(7)
(24)
1
Net (loss) earnings
$
(589)
$
68
$
(980)
$
122
(Loss) earnings per diluted
share
$
(3.36)
$
0.39
$
(5.67)
$
0.70
Adjusted net (loss) earnings
(a)
$
(469)
78
$
(592)
159
Adjusted net (loss) earnings per
diluted share (a)
$
(2.67)
$
0.45
$
(3.43)
$
0.92
Adjusted (loss) earnings before
interest, income taxes, depreciation and amortization (EBITDA)
(a)
$
(264)
278
$
(200)
563
(a) Please refer to the non-GAAP Financial
Measures section of this document for the reconciliation of these
amounts.
“Protecting lives and livelihoods remains our top priority,”
said U. S. Steel President and Chief Executive Officer David B.
Burritt. “We remain vigilant and continue to actively enforce our
COVID-19 protocols, including working from home, where applicable,
promoting physical distancing, limiting visitors to our sites, and
continuing our enhanced cleaning activities. As a result of this
intense focus, COVID-19 cases among our workforce remains
significantly better than the general U.S. population.”
Burritt continued, “We are encouraged by the recovery in market
conditions as automotive original equipment manufacturers (OEMs)
are nearing normalized production levels and healthy order activity
has continued into the third quarter. Construction demand is
exceeding our expectations and is expected to remain robust,
particularly for value-add construction products. To ensure we
continue to serve our customers, we restarted two blast furnaces to
quickly respond to increasing activity and plan to restart an
additional furnace at Gary Works on August 1. In Europe, demand is
beginning to recover, in-line with the re-opening of the European
continent.”
Commenting on the quarter, Burritt said, “We exceeded our second
quarter guidance as North American Flat-rolled segment shipments
meaningfully accelerated in the second half of June, resulting in
better than expected production efficiencies and cost benefits
across our mines and steel plants. Still, second quarter
performance was impacted by COVID-19 and the nonrecurring costs
associated with a significant portion of our steelmaking operations
being idled in the quarter. We are encouraged by the accelerating
pace of incoming orders across our steelmaking and sheet finishing
facilities. While a portion of operating inefficiencies will
continue to impact third quarter performance, we are confident that
the second quarter was the trough for the year.”
*****
The Company will conduct a conference call on second quarter
2020 earnings on Friday, July 31, 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 July 31.
UNITED STATES STEEL
CORPORATION
PRELIMINARY SUPPLEMENTAL
STATISTICS (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
OPERATING STATISTICS
Average realized price: ($/net ton unless
otherwise noted)(a)
Flat-Rolled
721
779
715
789
U. S. Steel Europe
632
652
620
661
U. S. Steel Europe (€/net ton)
575
580
563
585
Tubular
1,288
1,524
1,285
1,537
Steel shipments (thousands of net
tons):(a)
Flat-Rolled
1,790
2,804
4,299
5,529
U. S. Steel Europe
610
1,004
1,411
2,068
Tubular
132
195
319
402
Total Steel Shipments
2,532
4,003
6,029
7,999
Intersegment steel (unless otherwise
noted) shipments (thousands of net tons):
Flat-Rolled to Tubular
9
52
101
133
Flat-Rolled to U. S. Steel Europe (iron
ore pellets and fines)
225
189
225
189
Raw steel production (thousands of net
tons):
Flat-Rolled
1,468
2,984
4,616
6,059
U. S. Steel Europe
645
1,148
1,527
2,307
Raw steel capability utilization:(b)
Flat-Rolled
35
%
70
%
54
%
72
%
U. S. Steel Europe
52
%
92
%
61
%
93
%
CAPITAL EXPENDITURES (dollars in
millions)
Flat-Rolled
$
118
$
254
$
310
$
501
U. S. Steel Europe
14
41
48
75
Tubular
40
29
94
48
Other Businesses
1
2
3
4
Total
$
173
$
326
$
455
$
628
(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)
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions, except per share
amounts)
2020
2019
2020
2019
NET SALES
$
2,091
$
3,545
$
4,839
$
7,044
OPERATING EXPENSES (INCOME):
Cost of sales (excludes items shown
below)
2,274
3,227
4,879
6,399
Selling, general and administrative
expenses
62
82
134
160
Depreciation, depletion and
amortization
159
150
319
293
Loss (earnings) from investees
39
(28
)
47
(37
)
Tubular asset impairment charges
—
—
263
—
Gain on equity investee transactions
—
—
(31
)
—
Restructuring and other charges
89
—
130
—
Net loss on sale of assets
—
—
—
4
Other losses, net
—
(1
)
5
(1
)
Total operating expenses
2,623
3,430
5,746
6,818
EARNINGS BEFORE INTEREST AND INCOME
TAXES
(532
)
115
(907
)
226
Net interest and other financial costs
62
54
97
103
EARNINGS BEFORE INCOME TAXES
(594
)
61
(1,004
)
123
Income tax (benefit) provision
(5
)
(7
)
(24
)
1
Net (loss) earnings
(589
)
68
(980
)
122
Less: Net earnings (loss) attributable to
noncontrolling interests
—
—
—
—
NET (LOSS) EARNINGS ATTRIBUTABLE TO UNITED
STATES STEEL CORPORATION
$
(589
)
$
68
$
(980
)
$
122
COMMON STOCK DATA:
Net (loss) earnings per share attributable
to
United States Steel Corporation
stockholders:
Basic
$
(3.36
)
$
0.39
$
(5.67
)
$
0.71
Diluted
$
(3.36
)
$
0.39
$
(5.67
)
$
0.70
Weighted average shares, in thousands
Basic
175,327
171,992
172,775
172,613
Diluted
175,327
172,512
172,775
173,475
Dividends paid per common share
$
0.01
$
0.05
$
0.02
$
0.10
UNITED STATES STEEL
CORPORATION
CONDENSED CASH FLOW STATEMENT
(Unaudited)
Six Months Ended
June 30,
(Dollars in millions)
2020
2019
Cash (used in) provided by operating
activities:
Net (loss) earnings
$
(980
)
$
122
Depreciation, depletion and
amortization
319
293
Tubular asset impairment charges
263
—
Gain on equity investee transactions
(31
)
—
Restructuring and other charges
130
—
Pensions and other postretirement
benefits
(10
)
55
Deferred income taxes
(12
)
(3
)
Net loss on sale of assets
—
4
Working capital changes
(42
)
(133
)
Income taxes receivable/payable
10
39
Other operating activities
(9
)
(11
)
Total
(362
)
366
Cash used in investing activities:
Capital expenditures
(455
)
(628
)
Investment in Big River Steel
(3
)
—
Proceeds from sale of assets
1
1
Proceeds from sale of ownership interests
in equity investees
8
—
Investments, net
(4
)
—
Total
(453
)
(627
)
Cash provided by (used in) financing
activities:
Revolving credit facilities - borrowings,
net of financing costs
1,462
—
Revolving credit facilities -
repayments
(644
)
—
Issuance of long-term debt, net of
financing costs
1,048
—
Net proceeds from public offering of
common stock
410
—
Repayment of long-term debt
(6
)
(1
)
Proceeds from Stelco Option Agreement
40
—
Common stock repurchased
—
(70
)
Dividends paid
(3
)
(18
)
Taxes paid for equity compensation
plans
(1
)
(7
)
Total
2,306
(96
)
Effect of exchange rate changes on
cash
(1
)
(1
)
Net Increase (decrease) in cash, cash
equivalents and restricted cash
1,490
(358
)
Cash, cash equivalents and restricted cash
at beginning of the year
939
1,040
Cash, cash equivalents and restricted cash
at end of the period
$
2,429
$
682
UNITED STATES STEEL
CORPORATION
CONDENSED BALANCE SHEET
(Unaudited)
June 30,
December 31,
(Dollars in millions)
2020
2019
Cash and cash equivalents
$
2,300
$
749
Receivables, net
939
1,177
Inventories
1,634
1,785
Other current assets
51
102
Total current assets
4,924
3,813
Operating lease assets
236
230
Property, plant and equipment, net
5,410
5,447
Investments and long-term receivables,
net
1,376
1,466
Intangible assets, net
132
150
Deferred income tax benefits
19
19
Other noncurrent assets
454
483
Total assets
$
12,551
$
11,608
Accounts payable and other accrued
liabilities
1,459
2,054
Payroll and benefits payable
354
336
Short-term debt and current maturities of
long-term debt
94
14
Other current liabilities
234
221
Total current liabilities
2,141
2,625
Noncurrent operating lease liabilities
185
177
Long-term debt, less unamortized discount
and debt issuance costs
5,505
3,627
Employee benefits
563
532
Other long-term liabilities
503
554
United States Steel Corporation
stockholders' equity
3,617
4,092
Noncontrolling interests
37
1
Total liabilities and stockholders'
equity
$
12,551
$
11,608
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
(LOSS) EARNINGS
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions, except per share
amounts) (a)
2020
2019
2020
2019
Reconciliation to adjusted net (loss)
earnings attributable to United States Steel Corporation
Net (loss) earnings attributable to United
States Steel Corporation
$
(589
)
$
68
$
(980
)
$
122
Tubular asset impairment charge
—
—
263
—
Restructuring and other charges
82
—
123
—
Gain on previously held investment in
UPI
—
—
(25
)
—
Tubular Inventory Impairment
24
—
24
—
December 24, 2018 Clairton coke making
facility fire
(4
)
10
(4
)
37
Big River Steel options mark to market
5
—
(6
)
—
FIN 48 Reserve
13
—
13
—
Total adjustments
120
10
388
37
Adjusted net (loss) earnings attributable
to United States Steel Corporation
$
(469
)
78
$
(592
)
159
Reconciliation to adjusted diluted net
(loss) earnings per share
Diluted net earnings per share
$
(3.36
)
$
0.39
$
(5.67
)
$
0.70
Tubular asset impairment charge
—
—
1.52
—
Restructuring and other charges
0.47
—
0.70
—
Gain on previously held investment in
UPI
—
—
(0.14
)
—
Tubular Inventory Impairment
0.14
—
0.14
—
December 24, 2018 Clairton coke making
facility fire
(0.02
)
0.06
(0.02
)
0.22
Big River Steel options mark to market
0.03
—
(0.03
)
—
FIN 48 Reserve
0.07
—
0.07
—
Total adjustments
0.69
0.06
2.24
0.22
Adjusted diluted net (loss) earnings per
share
$
(2.67
)
$
0.45
$
(3.43
)
$
0.92
(a) The adjustments included in this table
for the three and six months ended June 30, 2020 have been tax
affected for our European operations and not tax affected for our
U.S. operations due to the full valuation allowance on our domestic
deferred tax assets. The adjustments included in this table for the
three and six months ended June 30, 2019 have been tax
effected.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED
EBITDA
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions)
2020
2019
2020
2019
Reconciliation to Adjusted EBITDA
Net (loss) earnings attributable to United
States Steel Corporation
$
(589
)
$
68
$
(980
)
$
122
Income tax (benefit) provision
(5
)
(7
)
(24
)
1
Net interest and other financial costs
62
54
97
103
Depreciation, depletion and amortization
expense
159
150
319
293
EBITDA
(373
)
265
(588
)
519
Tubular asset impairment charge
—
—
263
—
Restructuring and other charges
89
—
130
—
Gain on previously held investment in
UPI
—
—
(25
)
—
Tubular inventory impairment charge
24
—
24
—
December 24, 2018 Clairton coke making
facility fire
(4
)
13
(4
)
44
Adjusted EBITDA
$
(264
)
$
278
$
(200
)
$
563
We present adjusted net (loss) earnings, adjusted net (loss)
earnings per diluted share, (loss) earnings 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 and segment EBITDA, considered along with net (loss)
earnings and segment (loss) earnings before interest and income
taxes, are relevant indicators of trends relating to our operating
performance and provide management and investors with additional
information for comparison of our operating results to the
operating results of other companies.
Adjusted net (loss) earnings and adjusted net (loss) earnings
per diluted share are non-GAAP measures that exclude the effects of
items such as the Tubular asset impairment charge, restructuring
and other charges, the gain on previously held investment in UPI,
the Tubular inventory impairment, the December 24, 2018 Clairton
coke making facility fire, the Big River Steel options mark to
market and the FIN 48 reserve 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 (loss) earnings, adjusted
net (loss) earnings 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
(loss) earnings, adjusted net (loss) earnings 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 (loss) earnings, adjusted
net (loss) earnings 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 (loss) earnings, adjusted net (loss)
earnings 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
Adjustment Items when evaluating the Company’s financial
performance. Adjusted net (loss) earnings, adjusted net (loss)
earnings per diluted share and adjusted EBITDA should not be
considered a substitute for net (loss) earnings, (loss) earnings
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,” "may" 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, anticipated
cost savings, potential capital and operational cash improvements,
U. S. Steel's future ability or plans to take ownership of the Big
River Steel joint venture as a wholly owned subsidiary, 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, 2019, our
Quarterly Reports on Form 10-Q for the quarter ended March 31, 2020
and June 30, 2020, 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.
2020-031
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005949/en/
Media John Ambler Vice President Corporate Communications T -
(412) 433-2407 E - joambler@uss.com
Investors/Analysts Kevin Lewis Vice President Investor Relations
and Corporate FP&A T - (412) 433-6935 E - klewis@uss.com
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