- Net earnings of $1,012 million, or $3.53 per diluted
share
- Adjusted net earnings of $964 million, or $3.37 per diluted
share
- Adjusted EBITDA of $1,286 million
- Liquidity of $4.176 billion, including cash of $1.329
billion
United States Steel Corporation (NYSE: X) reported second
quarter 2021 net earnings of $1,012 million, or $3.53 per diluted
share. Adjusted net earnings was $964 million, or $3.37 per diluted
share. This compares to second quarter 2020 net loss of $589
million, or $3.36 per diluted share. Adjusted net loss for second
quarter 2020 was $469 million, or $2.67 per diluted share.
Earnings Highlights
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions, except per share
amounts)
2021
2020
2021
2020
Net Sales
$
5,025
$
2,091
$
8,689
$
4,839
Segment earnings (loss) before interest
and income taxes
Flat-Rolled
$
579
$
(329
)
$
725
$
(364
)
Mini Mill (a)
284
—
416
—
U. S. Steel Europe
207
(26
)
312
(40
)
Tubular (b)
—
(47
)
(29
)
(95
)
Other
14
(21
)
22
(20
)
Total segment earnings (loss) before
interest and income taxes
$
1,084
$
(423
)
$
1,446
$
(519
)
Other items not allocated to segments
(50
)
(109
)
13
(388
)
Earnings (loss) before interest and
income taxes
$
1,034
$
(532
)
$
1,459
$
(907
)
Net interest and other financial
costs
59
62
392
97
Income tax benefit
(37
)
(5
)
(36
)
(24
)
Net earnings (loss)
$
1,012
$
(589
)
$
1,103
$
(980
)
Earnings (loss) per diluted
share
$
3.53
$
(3.36
)
$
4.02
$
(5.67
)
Adjusted net earnings (loss)
(c)
$
964
(469
)
$
1,247
(592
)
Adjusted net earnings (loss) per
diluted share (c)
$
3.37
$
(2.67
)
$
4.54
$
(3.43
)
Adjusted earnings (loss) before
interest, income taxes, depreciation and amortization (EBITDA)
(c)
$
1,286
(264
)
$
1,837
(200
)
(a) Mini Mill segment, added after January
15, 2021 with the purchase of the remaining equity interest in Big
River Steel, does not include the newly constructed electric arc
(EAF) at our Fairfield Tubular Operations in Fairfield,
Alabama.
(b) The Fairfield EAF is included in the
Tubular segment.
(c) Please refer to the non-GAAP Financial
Measures section of this document for the reconciliation of these
amounts.
“The second quarter was an exceptional quarter for U. S. Steel,”
said U. S. Steel President and Chief Executive Officer David B.
Burritt. “The enterprise delivered record adjusted EBITDA margins,
highlighting the power of a combined integrated and mini mill
footprint. Our financial strength gives us the confidence to
announce up to $1 billion of additional debt reduction over the
next 12 months. This is in addition to the $2.2 billion of debt
reduction we’ve already committed to or delivered to date.”
Commenting on U. S. Steel's strategy, Burritt continued, "Our
mission is to provide customers with profitable steel solutions
that benefit people and planet. Our Best of Both℠ business model
creates the platform to transition to Best for All℠ so that we can
contribute to a more sustainable future for all our stakeholders.
We recently announced an investment in a state-of-the-art non-grain
oriented (NGO) electrical steel line that will further Big River
Steel’s industry-leading position. This investment allows us to
partner with auto OEMs on their own decarbonization goals. We also
divested our Transtar rail assets to support our transition to a
Best for All strategy.”
Burritt concluded, “We are bullish that today's strong market
environment can continue. Our business is firing on all cylinders;
our balance sheet has been enhanced, and our pension and OPEB plans
are fully funded. We are capitalizing on today’s supportive market
to get to our future faster. Our customers are the driving force
behind our Best for All ambitions, and we thank our employees for
safely delivering record quality and reliability performance for
them. We look forward to setting new records in the third quarter
and expect to achieve all-time best adjusted EBITDA for the
quarter.”
*****
The Company will conduct a conference call on second quarter
2021 earnings on Friday, July 30, 2021 at 8:30 a.m. EDT. To listen
to the webcast of the conference call and to access the company's
slide presentation, visit the U. S. Steel website, www.ussteel.com,
and click “Investors” then "Events & Presentations." Replays of
the conference call will be available on the website after 10:30
a.m. on July 30, 2021.
UNITED STATES STEEL
CORPORATION
PRELIMINARY SUPPLEMENTAL
STATISTICS (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
OPERATING STATISTICS
Average realized price: ($/net ton unless
otherwise noted) (a)
Flat-Rolled
1,078
721
983
715
Mini Mill (b)
1,207
—
1,106
—
U. S. Steel Europe
905
632
831
620
U. S. Steel Europe (€/net ton)
750
575
689
563
Tubular
1,633
1,288
1,513
1,285
Steel shipments (thousands of net tons):
(a)
Flat-Rolled
2,326
1,790
4,658
4,299
Mini Mill (b)
616
—
1,063
—
U. S. Steel Europe
1,167
610
2,210
1,411
Tubular
105
132
194
319
Total Steel Shipments
4,214
2,532
8,125
6,029
Intersegment steel (unless otherwise
noted) shipments (thousands of net tons):
Flat-Rolled to Tubular
—
9
—
101
Flat-Rolled to USSE (iron ore pellets and
fines)
223
225
439
225
Mini Mill (b) to Flat-Rolled
125
—
186
—
Raw steel production (thousands of net
tons):
Flat-Rolled
2,485
1,468
5,066
4,616
Mini Mill (b)
747
—
1,257
—
U. S. Steel Europe
1,279
645
2,476
1,527
Tubular (c)
114
—
207
—
Raw steel capability utilization: (d)
Flat-Rolled
59
%
35
%
60
%
54
%
Mini Mill (b)
91
%
—
%
84
%
—
%
U. S. Steel Europe
103
%
52
%
100
%
61
%
Tubular
51
%
—
%
46
%
—
%
CAPITAL EXPENDITURES (dollars in
millions)
Flat-Rolled
$
93
$
118
$
167
$
310
Mini Mill (b)
20
—
56
—
U. S. Steel Europe
12
14
26
48
Tubular
22
40
34
94
Other Businesses
1
1
1
3
Total
$
148
$
173
$
284
$
455
(a) Excludes intersegment shipments.
(b) Mini Mill segment added after January
15, 2021 with the purchase of the remaining equity interest in Big
River Steel.
(c) Tubular segment raw steel added in
October 2020 with the start-up of the new electric arc furnace.
(d) Based on annual raw steel production
capability of 17.0 million net tons for Flat-Rolled, 3.3 million
for Mini Mill, 5.0 million net tons for U. S. Steel Europe and 0.9
million for Tubular.
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)
2021
2020
2021
2020
NET SALES
$
5,025
$
2,091
$
8,689
$
4,839
OPERATING EXPENSES (INCOME):
Cost of sales
3,678
2,274
6,752
4,879
Selling, general and administrative
expenses
106
62
208
134
Depreciation, depletion and
amortization
202
159
391
319
(Earnings) loss from investees
(35
)
39
(49
)
47
Asset impairment charges
28
—
28
263
Gain on equity investee transactions
—
—
(111
)
(31
)
Restructuring and other charges
31
89
37
130
Net (gain) loss on sale of assets
(15
)
—
(15
)
—
Other (gains) losses, net
(4
)
—
(11
)
5
Total operating expenses
3,991
2,623
7,230
5,746
EARNINGS (LOSS) BEFORE INTEREST AND INCOME
TAXES
1,034
(532
)
1,459
(907
)
Net interest and other financial costs
59
62
392
97
EARNINGS (LOSS) BEFORE INCOME TAXES
975
(594
)
1,067
(1,004
)
Income tax benefit
(37
)
(5
)
(36
)
(24
)
Net earnings (loss)
1,012
(589
)
1,103
(980
)
Net earnings attributable to
noncontrolling interests
—
—
—
—
NET EARNINGS (LOSS) ATTRIBUTABLE TO UNITED
STATES STEEL CORPORATION
$
1,012
$
(589
)
$
1,103
$
(980
)
COMMON STOCK DATA:
Net earnings (loss) per share attributable
to
United States Steel Corporation
stockholders:
Basic
$
3.75
$
(3.36
)
$
4.25
$
(5.67
)
Diluted
$
3.53
$
(3.36
)
$
4.02
$
(5.67
)
Weighted average shares, in thousands
Basic
269,872
175,327
259,668
172,775
Diluted
286,337
175,327
274,512
172,775
Dividends paid per common share
$
0.01
$
0.01
$
0.02
$
0.02
UNITED STATES STEEL
CORPORATION
CONDENSED CASH FLOW STATEMENT
(Unaudited)
Six Months Ended
June 30,
(Dollars in millions)
2021
2020
Cash provided by (used in) operating
activities:
Net earnings (loss)
$
1,103
$
(980
)
Depreciation, depletion and
amortization
391
319
Asset impairment charges
28
263
Gain on equity investee transactions
(111
)
(31
)
Restructuring and other charges
37
130
Loss on debt extinguishment
256
—
Pensions and other postretirement
benefits
(46
)
(10
)
Deferred income taxes
(77
)
(12
)
Net gain on sale of assets
(15
)
—
Working capital changes
(429
)
(42
)
Income taxes receivable/payable
47
10
Other operating activities
(81
)
(9
)
Total
1,103
(362
)
Cash used in investing activities:
Capital expenditures
(284
)
(455
)
Acquisition of Big River Steel, net of
cash acquired
(625
)
—
Investment in Big River Steel
—
(3
)
Proceeds from sale of assets
25
1
Proceeds from sale of ownership interests
in equity investees
—
8
Other investing activities
(1
)
(4
)
Total
(885
)
(453
)
Cash (used in) provided by financing
activities:
Repayment of short-term debt
(180
)
—
Revolving credit facilities - borrowings,
net of financing costs
50
1,462
Revolving credit facilities -
repayments
(911
)
(644
)
Issuance of long-term debt, net of
financing costs
825
1,048
Repayment of long-term debt
(1,418
)
(6
)
Proceeds from public offering of common
stock
790
410
Proceeds from Stelco Option Agreement
—
40
Other financing activities
(11
)
(4
)
Total
(855
)
2,306
Effect of exchange rate changes on
cash
(9
)
(1
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(646
)
1,490
Cash, cash equivalents and restricted cash
at beginning of the year
2,118
939
Cash, cash equivalents and restricted cash
at end of the period
$
1,472
$
2,429
UNITED STATES STEEL
CORPORATION
CONDENSED BALANCE SHEET
(Unaudited)
June 30,
December 31,
(Dollars in millions)
2021
2020
Cash and cash equivalents
$
1,329
$
1,985
Receivables, net
2,010
994
Inventories
1,914
1,402
Assets held for sale
154
—
Other current assets
231
51
Total current assets
5,638
4,432
Operating lease assets
192
214
Property, plant and equipment, net
7,375
5,444
Investments and long-term receivables,
net
572
1,177
Intangible assets, net
533
129
Goodwill
909
4
Other noncurrent assets
865
659
Total assets
$
16,084
$
12,059
Accounts payable and other accrued
liabilities
2,819
1,884
Payroll and benefits payable
425
308
Short-term debt and current maturities of
long-term debt
763
192
Other current liabilities
364
272
Liabilities held for sale
80
—
Total current liabilities
4,451
2,656
Noncurrent operating lease liabilities
145
163
Long-term debt, less unamortized discount
and debt issuance costs
4,803
4,695
Employee benefits
208
322
Other long-term liabilities
534
344
United States Steel Corporation
stockholders' equity
5,851
3,786
Noncontrolling interests
92
93
Total liabilities and stockholders'
equity
$
16,084
$
12,059
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS (LOSS)
Three Months Ended
Six Months Ended
June 30,
June 30,
(Dollars in millions, except per share
amounts) (a)
2021
2020
2021
2020
Reconciliation to adjusted net earnings
(loss) attributable to United States Steel Corporation
Net earnings (loss) attributable to United
States Steel Corporation
$
1,012
$
(589
)
$
1,103
$
(980
)
Debt extinguishment
—
—
255
—
Big River Steel - inventory step-up
amortization
—
—
24
—
Big River Steel - unrealized losses
5
—
14
—
Big River Steel - acquisition costs
—
—
9
—
Restructuring and other charges
30
82
36
123
Gain on previously held investment in Big
River Steel
—
—
(111
)
—
Asset impairment
26
—
26
263
Property sale
(14
)
—
(14
)
—
Reversal of tax valuation allowance
(b)
(95
)
—
(95
)
—
Tubular inventory impairment
—
24
—
24
Uncertain tax positions
—
13
—
13
Gain on previously held investment in
UPI
—
—
—
(25
)
Big River Steel options and forward
adjustments
—
5
—
(6
)
December 24, 2018 Clairton coke making
facility fire
—
(4
)
—
(4
)
Total adjustments
(48
)
120
144
388
Adjusted net earnings (loss) attributable
to United States Steel Corporation
$
964
(469
)
$
1,247
(592
)
Reconciliation to adjusted diluted net
earnings (loss) per share
Diluted net earnings (loss) per share
$
3.53
$
(3.36
)
$
4.02
$
(5.67
)
Debt extinguishment
—
—
0.93
—
Big River Steel - inventory step-up
amortization
—
—
0.09
—
Big River Steel - unrealized losses
0.02
—
0.05
—
Big River Steel - acquisition costs
—
—
0.03
—
Restructuring and other charges
0.11
0.47
0.13
0.70
Gain on previously held investment in Big
River Steel
—
—
(0.40
)
—
Asset impairment
0.09
—
0.09
1.52
Property sale
(0.05
)
—
(0.05
)
—
Reversal of tax valuation allowance
(b)
(0.33
)
—
(0.35
)
—
Tubular inventory impairment
—
0.14
—
0.14
Uncertain tax positions
—
0.07
—
0.07
Gain on previously held investment in
UPI
—
—
—
(0.14
)
Big River Steel options and forward
adjustments
—
0.03
—
(0.03
)
December 24, 2018 Clairton coke making
facility fire
—
(0.02
)
—
(0.02
)
Total adjustments
(0.16
)
0.69
0.52
2.24
Adjusted diluted net earnings (loss) per
share
$
3.37
$
(2.67
)
$
4.54
$
(3.43
)
(a) The adjustments included in this table
for the three months ended June 30, 2021 were tax effected due to
the partial reversal of the valuation allowance on our domestic
deferred tax assets at June 30, 2021.
(b) The $95 million adjustment was related
to the reversal of a portion of the tax valuation allowance
recorded against the Company's net domestic deferred tax asset as a
result of the Company's three-year cumulative income position and a
change in the projections of income in future years. There was an
additional net benefit of $167 million included in earnings related
to the reversal of the valuation allowance due to a change in
estimated current year earnings.
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)
2021
2020
2021
2020
Reconciliation to Adjusted EBITDA
Net earnings (loss) attributable to United
States Steel Corporation
$
1,012
$
(589
)
$
1,103
$
(980
)
Income tax benefit
(37
)
(5
)
(36
)
(24
)
Net interest and other financial costs
59
62
392
97
Depreciation, depletion and amortization
expense
202
159
391
319
EBITDA
1,236
(373
)
1,850
(588
)
Big River Steel - inventory step-up
amortization
—
—
24
—
Big River Steel - unrealized losses
6
—
15
—
Big River Steel - acquisition costs
—
—
9
—
Restructuring and other charges
31
89
37
130
Gain on previously held investment in Big
River Steel
—
—
(111
)
—
Asset impairment charge
28
—
28
263
Property sale
(15
)
—
(15
)
—
Tubular inventory impairment
—
24
—
24
Gain on previously held investment in
UPI
—
—
—
(25
)
December 24, 2018 Clairton coke making
facility fire
—
(4
)
—
(4
)
Adjusted EBITDA
$
1,286
$
(264
)
$
1,837
$
(200
)
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 effects of
items that include: debt extinguishment, Big River Steel -
inventory step-up amortization, Big River Steel - unrealized
losses, Big River Steel - acquisition costs, restructuring and
other charges, gain on previously held investment in Big River
Steel, asset impairment, property sale, Tubular inventory
impairment, uncertain tax positions, gain on previously held
investment in UPI, Big River Steel options and forward adjustments
and December 24, 2018 Clairton coke making facility fire
(Adjustment Items). Adjusted EBITDA is also a non-GAAP measure that
excludes the effects of certain 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 effects of events 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. 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, financial
performance, 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, changes in global supply and demand
conditions and prices for our products, international trade duties
and other aspects of international trade policy, the integration of
Big River Steel in our existing business, business strategies
related to the combined business 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
this report and in “Item 1A. Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 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, references to “Big
River Steel” refer to Big River Steel Holdings LLC and its direct
and indirect subsidiaries unless otherwise indicated by the
context, and “Transtar” refers to Transtar LLC and its direct and
indirect subsidiaries unless otherwise indicated by the
context.
###
Founded in 1901, United States Steel Corporation is a leading
steel producer. With an unwavering focus on safety, the company’s
customer-centric Best for All℠ strategy is advancing a more secure,
sustainable future for U. S. Steel and its stakeholders. With a
renewed emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging
industries with high value-added steel products such as U. S.
Steel’s proprietary XG3™ advanced high-strength steel. The company
also maintains competitively advantaged iron ore production and has
an annual raw steelmaking capability of 26.2 million net tons. 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/20210729006125/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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