United States Steel Corporation (NYSE: X) today provided first
quarter 2021 guidance. First quarter 2021 adjusted EBITDA is
expected to be approximately $540 million and excludes impacts
related to acquiring the remaining stake in Big River Steel. First
quarter 2021 adjusted net income is expected to be approximately
$160 million and excludes impacts related to acquiring the
remaining stake in Big River Steel as well as impacts from
non-recurring refinancing costs related to balance sheet
enhancements executed in the quarter. The Company expects first
quarter 2021 adjusted diluted earnings per share to be
approximately $0.61.
“Strong market conditions and our well-timed acquisition of Big
River Steel are allowing us to drive significant earnings growth,”
commented U. S. Steel President and Chief Executive Officer David
B. Burritt. “Healthy flat-rolled customer demand across most
end-markets and the flow-through of higher steel prices are
resulting in substantially higher results from our Flat-rolled and
U. S. Steel Europe segments and our newly formed ‘Mini Mill’
segment, which will showcase the performance of Big River Steel.
Solid market fundamentals, low steel supply chain inventories,
continued consumer-driven demand, and pent-up infrastructure demand
has us increasingly bullish. The continued execution of our
customer-centric Best of BothSM strategy positions us with more
diversified operations, an enhanced balance sheet, and the ability
to capitalize on a ‘stronger for longer’ market environment.”
Recent Financing Activity
U. S. Steel completed significant financing actions in the first
quarter to maintain strong liquidity, enhance financial
flexibility, and manage its debt maturity profile. In February, the
Company successfully completed equity and unsecured notes
offerings, raising over $1.5 billion to redeem its outstanding
$1.056 billion 12% senior secured notes due 2025 and for general
corporate purposes. Since the beginning of the year, excluding the
impact of the Big River Steel debt assumed in connection with the
acquisition, U. S. Steel has reduced debt and annual run-rate
interest expense by approximately $1.1 billion and $90 million,
respectively, by:
- issuing 48.3 million shares of common stock for net proceeds of
approximately $790 million;
- issuing $750 million of 6.875% Senior Notes due 2029;
- redeeming all of the 12% Senior Secured Notes due 2025;
- repaying all of the remaining $180 million of borrowings under
the Export-Import loan; and
- repaying $621 million of borrowings under the U.S. credit
facility agreement and USSK credit facilities.
These actions have reduced the Company’s debt and annual
run-rate interest expense, restored U. S. Steel’s secured debt
capacity, removed U. S. Steel’s secured notes limitations, and
extended its maturity profile.
Adjusted EBITDA Commentary
The Flat-rolled segment is expected to generate significantly
higher sequential EBITDA in the first quarter. Higher steel prices
over the past several months are increasingly flowing through the
segment’s average selling prices in its adjustable and reset annual
fixed price contracts. Additionally, the restart of Gary #4 blast
furnace has improved operating efficiency.
The newly formed Mini Mill segment, which reflects full
ownership in Big River Steel, is also expected to benefit from the
current market environment and build upon its impressive December
performance, communicated on the January earnings call. Regional
weather-related impacts on operations that occurred in February are
not expected to impact Big River’s ability to fulfill customer
commitments in the quarter.
The European segment is exceeding expectations communicated on
the January earnings call. Strong commercial performance, increased
operating efficiency from running all three blast furnaces, and
continued cost management have more than offset raw material
headwinds and the impact to the order book from semiconductor
shortages in the European auto industry.
While the Tubular segment is experiencing increased customer
demand, OCTG and seamless pipe prices are only beginning to reflect
improved activity. Stubbornly high import levels are also limiting
the pace of the commercial recovery. Though the segment’s cost
structure is increasingly reflecting the advantages from insourcing
rounds production as it works through the last of its third-party
rounds, U. S. Steel’s Tubular production footprint remains
consolidated at Fairfield Works. Lorain and Lone Star facilities
remain indefinitely idled.
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,
anticipated disruptions to our operations and industry due to the
COVID-19 pandemic, changes in global supply and demand conditions
and prices for our products, 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. The 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 the 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, 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
1Q 2021
Projected net loss attributable to United
States Steel Corporation included in guidance
$
(10)
Estimated income tax benefit
(5)
Estimated net interest and other financial
costs1
440
Estimated depreciation, depletion and
amortization
195
Projected EBITDA included in guidance
$
620
Estimated first quarter adjustments
(80)
Projected adjusted EBITDA included in
guidance
$
540
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS GUIDANCE
(Dollars in millions, except per share
amounts)
Reconciliation to Projected Adjusted
Net Earnings Attributable to U. S. Steel Included in
Guidance
1Q 2021
Projected net loss attributable to United
States Steel Corporation included in guidance
$
(10)
Estimated first quarter adjustments
170
Projected adjusted net earnings
attributable to United States Steel Corporation included in
guidance
$
160
Reconciliation to Projected Adjusted
Diluted Net Earnings Per Share Included in Guidance
1Q 2021
Projected diluted net loss per share
included in guidance
$
(0.04)
Estimated first quarter adjustments
0.65
Projected adjusted diluted net earnings
per share included in guidance
$
0.61
1 Includes ~$250 million of non-recurring refinancing costs
related to balance sheet enhancements executed in the quarter.
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 gain on our previously held equity investment in Big
River Steel and other acquisition related financial impacts as well
as losses on debt extinguishments 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 gain on our previously held equity investment in Big River
Steel and other acquisition related financial impacts as well as
losses on debt extinguishments 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 a leading steel producer. Together with its
subsidiary Big River Steel LLC and an unwavering focus on safety,
the company’s customer-centric Best of BothSM world-competitive
integrated and mini mill technology 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/20210312005511/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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