United States Steel Corporation (NYSE: X) today provided third
quarter 2020 guidance. Third quarter 2020 adjusted EBITDA is
expected to be approximately ($100) million. The Company expects
third quarter 2020 adjusted diluted loss per share to be
approximately ($1.45).
“Improving market conditions experienced in June and July have
accelerated through August and September. Strengthening steel
fundamentals and our ability to respond quickly to increasing
customer demand are expected to result in significantly improved
adjusted EBITDA in the third quarter,” commented U. S. Steel
President and Chief Executive Officer David B. Burritt. “We have
grown confident in the recovery that is underway in North America
and Europe. While we believe this recovery is enduring, we remain
relentlessly focused on what we can control, including management
actions to stay nimble, reduce costs, and preserve cash.”
Burritt continued, “Our successful capital market activities in
the second quarter, combined with our optimism in a continued
recovery, gives us the confidence to repay a portion of our U.S.
ABL borrowing in September. By the end of the quarter, we plan to
repay approximately $900 million of our U.S. ABL, which will place
our U.S. ABL borrowings below pre-COVID-19 levels. We continue to
proactively review our use of the U.S. ABL as a reliable and
low-cost source of capital.”
“Our priorities remain unchanged even as market conditions
improve,” concluded Burritt. “Protecting lives and livelihoods
continues to be our top priority, guided by our S.T.E.E.L.
Principles. We also remain focused on fortifying the balance sheet
as we navigate today’s market and better position the company to
invest in the recovery. This includes our intent to acquire the
remaining stake in Big River Steel, our top strategic priority in
pursuit of our world-competitive, ‘best of both’ integrated and
mini mill strategy.”
Adjusted EBITDA Commentary
We are encouraged by the pace of market improvement and while we
expect our Flat-rolled segment results to be negative in the third
quarter, we expect them to be significantly better than second
quarter results. Our order book and lead times have improved, and
we are increasingly confident in the sustained nature of market
improvements. We responded to an improving order book by restarting
three blast furnaces that were temporarily idled earlier this year
in response to the impacts from COVID-19. We will continue to
evaluate our order book and regularly assess our footprint to
remain nimble to meet changes in customer demand. Based on today’s
order activity, we expect two blast furnaces to remain temporarily
idled through year-end.
In Europe, the pace of market improvement has also exceeded our
expectations. Market recovery has continued throughout the quarter
and our order book and lead times suggest this pace of recovery
will continue. Additionally, management actions to improve our cost
profile are also reflected in our financial performance. As a
result, we expect third quarter results to be better than second
quarter performance.
In Tubular, market conditions appear to have bottomed, but
catalysts for improvement are limited. We are focused on what we
can control including the commissioning of our electric arc furnace
by year-end. We currently expect third quarter performance to be
similar to the second quarter.
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 Report on Form 10-Q for the quarter ended 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.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
GUIDANCE
(Dollars in millions)
Reconciliation to Projected Adjusted
EBITDA Included in Guidance
3Q 2020
Projected net loss attributable to United
States Steel Corporation included in guidance
$
(320
)
Estimated income tax benefit
(20
)
Estimated net interest and other financial
costs
80
Estimated depreciation, depletion and
amortization
160
Projected EBITDA included in guidance
$
(100
)
Estimated third quarter adjustments
-
Projected adjusted EBITDA included in
guidance
$
(100
)
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
LOSS GUIDANCE
(Dollars in millions, except per
share amounts)
Reconciliation to Projected Adjusted
Net Loss Attributable to U. S. Steel Included in Guidance
3Q 2020
Projected net loss attributable to United
States Steel Corporation included in guidance
$
(320
)
Estimated third quarter adjustments
-
Projected adjusted net loss attributable
to United States Steel Corporation included in guidance
$
(320
)
Reconciliation to Projected Adjusted
Diluted Net Loss Per Share Included in Guidance
3Q 2020
Projected diluted net loss per share
included in guidance
$
(1.45
)
Estimated third quarter adjustments
-
Projected adjusted diluted net loss per
share included in guidance
$
(1.45
)
Note: Excludes the impact of the Company’s quarterly mark to
market adjustment related to the Big River Steel put and call
options. See Notes 5 and 20 in the Company’s Annual Report on Form
10-K for the year ended December 31, 2019 for an explanation of the
Big River Steel put and call options. This item will not impact
adjusted EBITDA, adjusted net loss or adjusted diluted net loss per
share.
Note Regarding Non-GAAP Financial Measures
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), adjusted net earnings (loss) per
diluted share and adjusted EBITDA are non-GAAP measures that
exclude the financial effects of restructuring charges and other
adjustments that are not part of the Company's core operations. 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 financial effects
of restructuring charges and other adjustments that can obscure
underlying trends. 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.
Founded in 1901, the United States Steel Corporation is a
Fortune 250 company and leading integrated steel producer. With
extensive iron ore production and an annual raw steelmaking
capability of 22 million net tons, U. S. Steel produces high
value-added steel products for the automotive, infrastructure,
appliance, container, and energy industries. The company’s “best of
both” integrated and mini-mill technology strategy is advancing a
more secure, sustainable future for U. S. Steel and its
stakeholders. With renewed emphasis on innovation and customer
focus, the company produces cutting-edge products such as U. S.
Steel’s proprietary XG3™ advanced high-strength steel. U. S. Steel
is headquartered in Pittsburgh, Pennsylvania, with world-class
operations across the United States and in Central Europe. For more
information, please visit www.ussteel.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200918005285/en/
John Ambler Vice President Corporate Communications T – (412)
433-2407 E – joambler@uss.com
Kevin Lewis Vice President Investor Relations T – (412) 433-6935
E – klewis@uss.com
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