United States Steel Corporation (NYSE: X) today provided first
quarter 2022 guidance. First quarter 2022 adjusted EBITDA is
expected to be approximately $1.3 billion, a new all-time record
for the first quarter. First quarter 2022 adjusted diluted earnings
per share is expected to be in the range of $2.96 to $3.00.
“We expect to deliver another strong quarter of safety, adjusted
EBITDA, free cash flow, and operational performance in the first
quarter,” commented U. S. Steel President and Chief Executive
Officer David B. Burritt. “At the beginning of the year, we
communicated expected market softness for the first quarter, along
with the normal seasonal impacts related to our mining operations.
We are exiting the first quarter with spot business accelerating,
steel prices rising, and the longest backlog at our Big River Steel
operations since October. Additionally, as a result of continued
execution of our differentiated commercial strategy, we are
realizing significant upside on our fixed price contracts. We
expect improving market conditions to continue into the second
quarter as seasonal demand picks up and buyers begin to shift their
attention to a more reliable, regional steel supply given the
geopolitical risks and cost volatility which has increased in
recent weeks.”
Burritt continued, “The conflict in Ukraine is a human tragedy.
Safety remains our number one priority. Our employees in Slovakia
remain safe and we are demonstrating our culture of caring by
assisting our Ukrainian neighbors through various charitable
activities. The workforce in Slovakia has been quick to address
refugee needs by supplying over 7,840 meals for refugees in
Slovakia, working with Ukrainian suppliers to send 17 tons of food
to Ukraine, and providing 800 beds for refugees arriving in Kosice.
Over 220,000 refugees have crossed into Slovakia from Ukraine. In
addition, we are demonstrating our S.T.E.E.L. Principles and
culture of caring by announcing donation match programs through
UNICEF and the Red Cross.”
Burritt concluded, “We are actively monitoring the conflict in
Ukraine for impacts and risks to our people and business. Today’s
market dynamics reinforce what makes U. S. Steel’s business model
unique. Our low-cost, captive iron ore assets in Minnesota are a
sustainable competitive advantage that cannot be replicated by the
competition. We are increasingly translating this competitive
advantage to our growing fleet of electric arc furnaces. We are
building a pig iron machine at Gary Works to supply Big River Steel
with up to 50% of its ore-based metallics needs by the first half
of 2023 and will continue to identify additional opportunities to
broaden our metallics strategy. These actions build upon the
regionally-sourced, low-cost iron ore advantage our U.S. blast
furnaces have and the strategy in place with Big River Steel to
supplement a portion of their prime scrap needs with home scrap
from our integrated operations. We remain bullish for 2022 and
another strong year of financial performance.”
Stockholder Returns Update
Quarter to date, the Company has repurchased approximately $100
million of common stock. As of March 17, 2022, there is
approximately $550 million remaining under the Company’s cumulative
$800 million stock buyback authorization.
First Quarter Adjusted EBITDA Commentary
The Flat-rolled segment’s adjusted EBITDA is expected to be
impacted by approximately $150 million related to the seasonal
mining headwinds that occur each year in the first quarter, as well
as increased raw material costs, and a larger than expected
headwind from cautious spot market activity. These headwinds are
expected to be partially offset by increased revenue from our fixed
price contracts.
The Mini Mill segment is expected to continue delivering
adjusted EBITDA margins similar to 2021 levels, reflecting the
high-quality earnings of the Mini Mill segment. Cautious spot
market activity throughout much of the quarter is expected to be
partially offset by lower cost metallics consumed in the quarter.
The recent geopolitical events are increasing spot steel demand,
particularly at our Big River Steel operations, resulting in a
growing backlog of orders. Considering the conflict in Ukraine and
its impact on the global metallics supply, our raw material
inventories remain well-positioned to continue meeting customer
demand and contingency plans are in place to ensure raw materials
are available from alternate sources.
The European segment is expected to deliver adjusted EBITDA
approaching fourth quarter levels and is expected to be the third
best quarterly adjusted EBITDA. Steel prices and demand were stable
throughout January and February and our European segment benefited
from having its third blast furnace back on-line in February after
a 60-day planned outage. Demand remains healthy from our facility
in Slovakia in March, in light of the conflict in Ukraine, and our
risk mitigation plans are working as we currently have inventory on
site or in-transit to continue meeting customer demand. Alternate
sources of supply are underway to continue meeting demand as we
closely monitor the rapidly changing geopolitical situation.
The Tubular segment’s adjusted EBITDA is expected to nearly
double fourth quarter 2021’s performance. Selling prices continue
to accelerate resulting in expanded margin performance for the
segment. Our Tubular business is well-positioned to serve the U.S.
energy market with value-add seamless pipe and a full suite of
proprietary connections to meet customers’ on-shore drilling
needs.
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,”
"plan," "goal," "future," “will,” "may" and similar expressions or
by using future dates in connection with any discussion of, among
other things, the construction or operation of new or existing
facilities, 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,
international trade duties and other aspects of international trade
policy, statements regarding our future strategies, products and
innovations, statements regarding our greenhouse gas emissions
intensity reduction goals, 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, 2021. and those described from time to time
in our future reports filed with the Securities and Exchange
Commission.
References to "U. S. Steel," "the Company," "we," "us," and
"our" refer to United States Steel Corporation and its consolidated
subsidiaries unless otherwise indicated by the context and "Big
River Steel" refers to Big River Steel Holdings LLC and its direct
and indirect subsidiaries unless otherwise indicated by the
context.
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 2022
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
870
Estimated income tax provision
245
Estimated net interest and other financial
costs (income)
(5
)
Estimated depreciation, depletion and
amortization
190
Projected EBITDA included in guidance
$
1,300
Estimated first quarter adjustments
-
Projected adjusted EBITDA included in
guidance
$
1,300
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 2022
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
870
Estimated first quarter adjustments
-
Projected adjusted net earnings
attributable to United States Steel Corporation included in
guidance $
870
Reconciliation to Projected Adjusted
Diluted Net Earnings Per Share Included in Guidance1
1Q 2022
Projected diluted net earnings per share
included in guidance (mid-point of guidance)
$
2.98
Estimated first quarter adjustments
-
Projected adjusted diluted net earnings
per share included in guidance (mid-point of guidance)
$
2.98
1 As noted in the 2021 Form 10-K, FASB
Accounting Standard Update 2020-06 requires entities to use the
If-Converted method for calculating diluted earnings per share,
retiring the previous alternative calculation of the Treasury Stock
method for calculating diluted earnings per share for convertible
instruments. Under the If-Converted method, our total diluted
shares for the quarter ended December 31, 2021 would have been
approximately 300 million shares. This methodology is applied to
the first quarter of 2022 and going forward.
Note Regarding Non-GAAP Financial Measures
We present adjusted net earnings, adjusted net earnings per
diluted share, 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, considered
along with net earnings, 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, adjusted net earnings per diluted share
and adjusted EBITDA are non-GAAP measures that exclude certain
charges that are not part of the Company’s core operations. We
present adjusted net earnings, adjusted net 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
earnings, adjusted net 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
earnings, adjusted net 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 adjusting items when evaluating the Company’s
financial performance. Adjusted net earnings, adjusted net earnings
per diluted share and adjusted EBITDA should not be considered a
substitute for net earnings, earnings per diluted share or other
financial measures as computed in accordance with U.S. GAAP and are
not necessarily comparable to similarly titled measures used by
other companies.
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 22.4 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/20220317005928/en/
John O. 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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