- Net loss of $234 million, or $1.06 per diluted
share
- Adjusted net loss of $268 million, or $1.21 per diluted
share
- Adjusted EBITDA of $(49) million
- Liquidity of $2.864 billion, including cash of $1.696
billion
United States Steel Corporation (NYSE: X) reported third quarter
2020 net loss of $234 million, or $1.06 per diluted share. Adjusted
net loss was $268 million, or $1.21 per diluted share. This
compares to third quarter 2019 net loss of $84 million, or $0.49
per diluted share. Adjusted net loss for third quarter 2019 was $35
million, or $0.21 per diluted share.
Earnings Highlights
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Dollars in millions, except per share
amounts)
2020
2019
2020
2019
Net Sales
$
2,340
$
3,069
$
7,179
$
10,113
Segment (loss) earnings before interest
and income taxes
Flat-Rolled
$
(159)
$
46
$
(523)
$
275
U. S. Steel Europe
13
(46)
(27)
(27)
Tubular
(52)
(25)
(147)
(21)
Other Businesses
(13)
8
(33)
26
Total segment (loss) earnings before
interest and income taxes
$
(211)
$
(17)
$
(730)
$
253
Other items not allocated to segments
—
(63)
(388)
(107)
(Loss) earnings before interest and
income taxes
$
(211)
$
(80)
$
(1,118)
$
146
Net interest and other financial
costs
47
48
144
151
Income tax (benefit) provision
(24)
(44)
(48)
(43)
Net (loss) earnings
$
(234)
$
(84)
$
(1,214)
$
38
(Loss) earnings per diluted
share
$
(1.06)
$
(0.49)
$
(6.43)
$
0.22
Adjusted net (loss) earnings
(a)
$
(268)
(35)
$
(860)
124
Adjusted net (loss) earnings per
diluted share (a)
$
(1.21)
$
(0.21)
$
(4.56)
$
0.71
Adjusted (loss) earnings before
interest, income taxes, depreciation and amortization (EBITDA)
(a)
$
(49)
144
$
(249)
707
(a) Please refer to the non-GAAP Financial Measures section of
this document for the reconciliation of these amounts.
“In the third quarter, the U. S. Steel team continued to execute
with an unwavering commitment to safety as the market recovery took
hold,” said U. S. Steel President and Chief Executive Officer David
B. Burritt. “Our third quarter results exceeded our guidance and
demonstrated the power of the actions we have taken since the onset
of COVID-19 with dramatically improved results in our Flat-rolled
segment, positive EBITDA in U. S. Steel Europe, and cash from
operations of $213 million. We expect to generate positive adjusted
EBITDA in the fourth quarter with excitement about our ‘Best of
Both’ future.”
Commenting on the Company’s world competitive, “Best of Both”
strategy, Burritt said, “I am pleased with the significant progress
we have made executing our ‘Best of Both’ strategy so far this
year. At the heart of our strategy is the customer, and this month
we are celebrating the successful start-up of our electric arc
furnace at Fairfield and the one-year anniversary of our investment
in Big River Steel. Both of these investments expand our
sustainable steel offerings for our customers. It has only been a
year and we are confident and enthusiastic that the strategic
rationale of our partnership with Big River Steel is being
validated. Our teams of leading steel technologists are already
proving that sustainable, high-end steel grades previously thought
to be impossible for mini mills to produce can indeed be made at
Big River with U. S. Steel R&D and know-how.”
*****
The Company will conduct a conference call on third quarter 2020
earnings on Friday, October 30, at 8:30 a.m. Eastern Daylight. To
listen to the webcast of the conference call, and to access the
company's slide presentation, visit the U. S. Steel website,
www.ussteel.com, and click on the “Investors” section. Replays of
the conference call will be available on the website after 10:30
a.m. on October 30.
UNITED STATES STEEL
CORPORATION
PRELIMINARY SUPPLEMENTAL
STATISTICS (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
OPERATING STATISTICS
Average realized price: ($/net ton unless
otherwise noted)(a)
Flat-Rolled
712
732
714
771
U. S. Steel Europe
608
656
616
660
U. S. Steel Europe (€/net ton)
520
590
548
587
Tubular
1,230
1,417
1,271
1,501
Steel shipments (thousands of net
tons):(a)
Flat-Rolled
2,155
2,654
6,454
8,183
U. S. Steel Europe
790
765
2,201
2,833
Tubular
71
174
390
576
Total Steel Shipments
3,016
3,593
9,045
11,592
Intersegment steel (unless otherwise
noted) shipments (thousands of net tons):
Flat-Rolled to Tubular
—
79
101
212
Flat-Rolled to U. S. Steel Europe (iron
ore pellets and fines)
687
235
912
424
Raw steel production (thousands of net
tons):
Flat-Rolled
2,207
2,783
6,823
8,842
U. S. Steel Europe
873
823
2,400
3,130
Raw steel capability utilization:(b)
Flat-Rolled
52
%
65
%
53
%
70
%
U. S. Steel Europe
69
%
65
%
64
%
84
%
CAPITAL EXPENDITURES (dollars in
millions)
Flat-Rolled
$
81
$
263
$
391
$
764
U. S. Steel Europe
16
36
64
111
Tubular
39
49
133
97
Other Businesses
—
2
3
6
Total
$
136
$
350
$
591
$
978
(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
Nine Months Ended
September 30,
September 30,
(Dollars in millions, except per share
amounts)
2020
2019
2020
2019
NET SALES
$
2,340
$
3,069
$
7,179
$
10,113
OPERATING EXPENSES (INCOME):
Cost of sales (excludes items shown
below)
2,295
2,902
7,174
9,301
Selling, general and administrative
expenses
65
63
199
223
Depreciation, depletion and
amortization
162
161
481
454
Loss (earnings) from investees
31
(31)
78
(68)
Asset impairment charges
—
—
263
—
Gain on equity investee transactions
—
—
(31)
—
Restructuring and other charges
—
54
130
54
Net (gain) loss on sale of assets
(2)
(1)
(2)
3
Other losses, net
—
1
5
—
Total operating expenses
2,551
3,149
8,297
9,967
(LOSS) EARNINGS BEFORE INTEREST AND INCOME
TAXES
(211)
(80)
(1,118)
146
Net interest and other financial costs
47
48
144
151
(LOSS) EARNINGS BEFORE INCOME TAXES
(258)
(128)
(1,262)
(5)
Income tax (benefit) provision
(24)
(44)
(48)
(43)
Net (loss) earnings
(234)
(84)
(1,214)
38
Less: Net earnings (loss) attributable to
noncontrolling interests
—
—
—
—
NET (LOSS) EARNINGS ATTRIBUTABLE TO UNITED
STATES STEEL CORPORATION
$
(234)
$
(84)
$
(1,214)
$
38
COMMON STOCK DATA:
Net (loss) earnings per share attributable
to
United States Steel Corporation
stockholders:
Basic
$
(1.06)
$
(0.49)
$
(6.43)
$
0.22
Diluted
$
(1.06)
$
(0.49)
$
(6.43)
$
0.22
Weighted average shares, in thousands
Basic
220,402
170,801
188,766
171,882
Diluted
220,402
170,801
188,766
172,511
Dividends paid per common share
$
0.01
$
0.05
$
0.03
$
0.15
UNITED STATES STEEL
CORPORATION
CONDENSED CASH FLOW STATEMENT
(Unaudited)
Nine Months Ended
September 30,
(Dollars in millions)
2020
2019
Cash (used in) provided by operating
activities:
Net (loss) earnings
$
(1,214)
$
38
Depreciation, depletion and
amortization
481
454
Asset impairment charges
263
—
Gain on equity investee transactions
(31)
—
Restructuring and other charges
130
54
Pensions and other postretirement
benefits
(18)
76
Deferred income taxes
(36)
(38)
Net (gain) loss on sale of assets
(2)
3
Working capital changes
210
(120)
Income taxes receivable/payable
13
27
Other operating activities
55
(98)
Total
(149)
396
Cash used in investing activities:
Capital expenditures
(591)
(978)
Investment in Big River Steel
(3)
—
Proceeds from sale of assets
3
4
Proceeds from sale of ownership interests
in equity investees
8
—
Investments, net
(4)
—
Total
(587)
(974)
Cash provided by (used in) financing
activities:
Issuance of short-term debt, net of
financing costs
240
—
Revolving credit facilities - borrowings,
net of financing costs
1,474
165
Revolving credit facilities -
repayments
(1,633)
—
Issuance of long-term debt, net of
financing costs
1,043
—
Net proceeds from public offering of
common stock
410
—
Repayment of long-term debt
(8)
(4)
Proceeds from Stelco Option Agreement
55
—
Common stock repurchased
—
(88)
Dividends paid
(6)
(26)
Taxes paid for equity compensation
plans
(1)
(7)
Total
1,574
40
Effect of exchange rate changes on
cash
10
(6)
Net Increase (decrease) in cash, cash
equivalents and restricted cash
848
(544)
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
$
1,787
$
496
UNITED STATES STEEL
CORPORATION
CONDENSED BALANCE SHEET
(Unaudited)
September 30,
December 31,
(Dollars in millions)
2020
2019
Cash and cash equivalents
$
1,696
$
749
Receivables, net
1,099
1,177
Inventories
1,398
1,785
Other current assets
51
102
Total current assets
4,244
3,813
Operating lease assets
225
230
Property, plant and equipment, net
5,430
5,447
Investments and long-term receivables,
net
1,286
1,466
Intangible assets, net
131
150
Deferred income tax benefits
21
19
Other noncurrent assets
394
483
Total assets
$
11,731
$
11,608
Accounts payable and other accrued
liabilities
1,646
2,054
Payroll and benefits payable
312
336
Short-term debt and current maturities of
long-term debt
262
14
Other current liabilities
243
221
Total current liabilities
2,463
2,625
Noncurrent operating lease liabilities
174
177
Long-term debt, less unamortized discount
and debt issuance costs
4,628
3,627
Employee benefits
543
532
Other long-term liabilities
419
554
United States Steel Corporation
stockholders' equity
3,449
4,092
Noncontrolling interests
55
1
Total liabilities and stockholders'
equity
$
11,731
$
11,608
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
(LOSS) EARNINGS
Three Months Ended
Nine Months Ended
September 30,
September 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
$
(234)
$
(84)
$
(1,214)
$
38
Asset impairment charge
—
—
263
—
Restructuring and other charges
—
42
123
42
Gain on previously held investment in
UPI
—
—
(25)
—
Tubular Inventory Impairment
—
—
24
—
December 24, 2018 Clairton coke making
facility fire
—
7
(4)
44
Big River Steel options mark to market
(34)
—
(40)
—
FIN 48 Reserve
—
—
13
—
Total adjustments
(34)
49
354
86
Adjusted net (loss) earnings attributable
to United States Steel Corporation
$
(268)
(35)
$
(860)
124
Reconciliation to adjusted diluted net
(loss) earnings per share
Diluted net earnings per share
$
(1.06)
$
(0.49)
$
(6.43)
$
0.22
Asset impairment charge
—
—
1.39
—
Restructuring and other charges
—
0.24
0.64
0.24
Gain on previously held investment in
UPI
—
—
(0.13)
—
Tubular Inventory Impairment
—
—
0.13
—
December 24, 2018 Clairton coke making
facility fire
—
0.04
(0.02)
0.25
Big River Steel options mark to market
(0.15)
—
(0.21)
—
FIN 48 Reserve
—
—
0.07
—
Total adjustments
(0.15)
0.28
1.87
0.49
Adjusted diluted net (loss) earnings per
share
$
(1.21)
$
(0.21)
$
(4.56)
$
0.71
(a) The adjustments included in this table
for the three and nine months ended September 30, 2020 have been
tax effected for our European operations and not tax effected 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 nine months ended September 30, 2019 have
been tax effected.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED
EBITDA
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Dollars in millions)
2020
2019
2020
2019
Reconciliation to Adjusted EBITDA
Net (loss) earnings attributable to United
States Steel Corporation
$
(234)
$
(84)
$
(1,214)
$
38
Income tax (benefit) provision
(24)
(44)
(48)
(43)
Net interest and other financial costs
47
48
144
151
Depreciation, depletion and amortization
expense
162
161
481
454
EBITDA
(49)
81
(637)
600
Asset impairment charges
—
—
263
—
Restructuring and other charges
—
54
130
54
Gain on previously held investment in
UPI
—
—
(25)
—
Tubular inventory impairment charge
—
—
24
—
December 24, 2018 Clairton coke making
facility fire
—
9
(4)
53
Adjusted EBITDA
$
(49)
$
144
$
(249)
$
707
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 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 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.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029006219/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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