- Third quarter 2023 net earnings of $299 million, or $1.20
per diluted share
- Third quarter 2023 adjusted net earnings of $350 million, or
$1.40 per diluted share
- Third quarter 2023 adjusted EBITDA of $578 million
United States Steel Corporation (NYSE: X) reported third quarter
2023 net earnings of $299 million, or $1.20 per diluted share.
Adjusted net earnings was $350 million, or $1.40 per diluted share.
This compares to third quarter 2022 net earnings of $490 million,
or $1.85 per diluted share. Adjusted net earnings for the third
quarter 2022 was $526 million, or $1.98 per diluted share.
This press release features multimedia. View
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United States Steel Corporation Third
Quarter 2023 Highlights (Photo: Business Wire)
Commenting on the third quarter’s performance, U. S. Steel
President and Chief Executive Officer David B. Burritt said, “Our
business continues to safely deliver strong results highlighting
the benefits of a diverse order book, well-run operations and a
focused U. S. Steel team. Our diverse flat-rolled product portfolio
allowed us to adapt to changing demand dynamics and our teamwork
drove cost benefits in the quarter.”
Commenting on the Company’s Best for All® strategy, Burritt
continued, “The third quarter marked another key milestone towards
our Best for All future. Our non-grain oriented, or NGO, electrical
steel line produced its first coil in September and first
industrial grade coil in October. NGO steel is essential to our
country’s green energy future and serves the automotive and power
generation sectors. Our NGO line can produce the thinnest gauges,
widest widths, and biggest coils in the domestic industry today.
This investment further expands our capabilities to meet customers’
needs. The nearly $4 billion of strategic investment in the Mini
Mill segment is progressing on-time and budget.”
Separately, Burritt provided an update on the Company's ongoing
strategic alternatives review process, “As we announced in August,
the Board of Directors, with the assistance of the management team
and its advisors, is fully engaged in and is progressing a robust
and competitive strategic alternatives review process to maximize
stockholder value. Meanwhile, we are focused on running our
business safely, delivering on our commitments to customers and
executing on our on-going strategic investments to increase
stockholder value. We continue to see strong performance in each of
these areas. Thank you to our employees for remaining focused on
the tasks at-hand and for continuing to put safety first while
delivering the high quality steel customers expect.”
Earnings Highlights
Three Months Ended September
30,
Nine Months Ended September
30,
(Dollars in millions, except per share
amounts)
2023
2022
2023
2022
Net Sales
$
4,431
$
5,203
$
13,909
$
16,727
Segment earnings (loss) before interest
and income taxes
Flat-Rolled
$
225
$
518
$
449
$
1,840
Mini Mill
42
1
186
549
U. S. Steel Europe
(13
)
(32
)
25
512
Tubular
87
155
476
339
Other
7
21
(2
)
16
Total segment earnings before interest
and income taxes
$
348
$
663
$
1,134
$
3,256
Other items not allocated to segments
(71
)
(49
)
(104
)
(270
)
Earnings before interest and income
taxes
$
277
$
614
$
1,030
$
2,986
Net interest and other financial
benefits
(64
)
(30
)
(182
)
(48
)
Income tax expense
42
154
237
684
Net earnings
$
299
$
490
$
975
$
2,350
Earnings per diluted share
$
1.20
$
1.85
$
3.86
$
8.38
Adjusted net earnings (a)
$
350
$
526
$
1,028
$
2,552
Adjusted net earnings per diluted share
(a)
$
1.40
$
1.98
$
4.07
$
9.06
Adjusted earnings before interest,
income taxes, depreciation and amortization (EBITDA) (a)
$
578
$
861
$
1,809
$
3,850
(a) Please refer to the non-GAAP Financial
Measures section of this document for the reconciliation of these
amounts. The prior year was retroactively adjusted to reflect the
reclassification of stock-based compensation expense.
*****
The Company will conduct a conference call on the third quarter
earnings on Friday, October 27, 2023, at 8:30 a.m. Eastern. 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. Replay will
be available on the website after 10:30 a.m. Eastern on October 27,
2023.
UNITED STATES STEEL
CORPORATION
PRELIMINARY SUPPLEMENTAL
STATISTICS (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
OPERATING STATISTICS
Average realized price: ($/net ton unless
otherwise noted) (a)
Flat-Rolled
1,036
1,232
1,045
1,312
Mini Mill
901
1,096
898
1,268
U. S. Steel Europe
852
1,021
910
1,121
U. S. Steel Europe (€/net ton)
783
1,013
840
1,049
Tubular
2,927
3,217
3,422
2,761
Steel shipments (thousands of net tons):
(a)
Flat-Rolled
2,159
2,176
6,672
6,488
Mini Mill
561
529
1,807
1,651
U. S. Steel Europe
958
867
2,875
3,044
Tubular
104
126
346
390
Total steel shipments
3,782
3,698
11,700
11,573
Intersegment steel (unless otherwise
noted) shipments (thousands of net tons):
Mini Mill to Flat-Rolled
145
53
370
252
Flat-Rolled to Mini Mill
2
7
2
30
Flat-Rolled to Mini Mill (pig iron)
95
—
210
—
Flat-Rolled to USSE
—
—
—
30
Flat-Rolled to USSE (b)
174
62
632
144
Raw steel production (thousands of net
tons):
Flat-Rolled
2,390
2,265
7,312
6,894
Mini Mill
693
616
2,201
1,967
U. S. Steel Europe
990
946
3,295
3,250
Tubular
111
173
411
497
Raw steel capability utilization: (c)
Flat-Rolled
72
%
68
%
74
%
70
%
Mini Mill
83
%
74
%
89
%
80
%
U. S. Steel Europe
79
%
75
%
88
%
87
%
Tubular
49
%
76
%
61
%
74
%
CAPITAL EXPENDITURES (dollars in
millions)
Flat-Rolled
132
136
375
365
Mini Mill
423
320
1,474
710
U. S. Steel Europe
24
19
66
53
Tubular
7
3
24
10
Other Businesses
—
—
—
—
Total
$
586
$
478
$
1,939
$
1,138
(a) Excludes intersegment shipments.
(b) Consists of coal in 2023 and iron ore
pellets and fines in 2022.
(c) Based on annual raw steel production
capability of 13.2 million net tons for Flat-Rolled, 3.3 million
net tons for Mini Mill, 5.0 million net tons for U. S. Steel Europe
and 0.9 million net tons for Tubular.
UNITED STATES STEEL
CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(Dollars in millions, except per share
amounts)
2023
2022
2023
2022
Net Sales
$
4,431
$
5,203
$
13,909
$
16,727
Operating expenses (income):
Cost of sales
3,838
4,359
11,952
12,843
Selling, general and administrative
expenses
118
95
320
324
Depreciation, depletion and
amortization
230
198
675
594
Earnings from investees
(51
)
(71
)
(76
)
(202
)
Asset impairment charges
—
—
4
157
Restructuring and other charges
18
23
21
57
Other gains, net
1
(15
)
(17
)
(32
)
Total operating expenses
4,154
4,589
12,879
13,741
Earnings before interest and income
taxes
277
614
1,030
2,986
Net interest and other financial
benefits
(64
)
(30
)
(182
)
(48
)
Earnings before income taxes
341
644
1,212
3,034
Income tax expense
42
154
237
684
Net earnings
299
490
975
2,350
Less: Net earnings attributable to
noncontrolling interests
—
—
—
—
Net earnings attributable to United
States Steel Corporation
$
299
$
490
$
975
$
2,350
COMMON STOCK DATA:
Net earnings per share attributable to
United States Steel Corporation Stockholders
Basic
$
1.34
$
2.07
$
4.33
$
9.33
Diluted
$
1.20
$
1.85
$
3.86
$
8.38
Weighted average shares, in thousands
Basic
223,109
237,094
225,311
251,848
Diluted
253,070
266,264
255,080
281,569
Dividends paid per common share
$
0.05
$
0.05
$
0.15
$
0.15
UNITED STATES STEEL
CORPORATION
CONDENSED CASH FLOW STATEMENT
(Unaudited)
Nine Months Ended September
30,
Nine Months Ended September
30,
(Dollars in millions)
2023
2022
Increase (decrease) in cash, cash
equivalents and restricted cash
Operating activities:
Net earnings
$
975
$
2,350
Depreciation, depletion and
amortization
675
594
Asset impairment charges
4
157
Restructuring and other charges
21
57
Pensions and other postretirement
benefits
(124
)
(164
)
Deferred income taxes
275
561
Working capital changes
227
(545
)
Income taxes receivable/payable
(86
)
(88
)
Other operating activities
(256
)
(172
)
Net cash provided by operating
activities
1,711
2,750
Investing activities:
Capital expenditures
(1,939
)
(1,138
)
Proceeds from cost reimbursement
government grants
—
53
Proceeds from sale of assets
4
28
Other investing activities
—
(8
)
Net cash used in investing activities
(1,935
)
(1,065
)
Financing activities:
Issuance of long-term debt, net of
financing costs
241
291
Repayment of long-term debt
(69
)
(375
)
Common stock repurchased
(175
)
(699
)
Proceeds from government incentives
—
82
Other financing activities
(50
)
(51
)
Net cash provided by (used in) financing
activities
(53
)
(752
)
Effect of exchange rate changes on
cash
(3
)
(46
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(280
)
887
Cash, cash equivalents and restricted cash
at beginning of year
3,539
2,600
Cash, cash equivalents and restricted cash
at end of period
$
3,259
$
3,487
UNITED STATES STEEL
CORPORATION
CONDENSED BALANCE SHEET
(Unaudited)
September 30,
December 31,
(Dollars in millions)
2023
2022
Cash and cash equivalents
$
3,222
$
3,504
Receivables, net
1,541
1,635
Inventories
2,304
2,359
Other current assets
328
368
Total current assets
7,395
7,866
Operating lease assets
116
146
Property, plant and equipment, net
9,911
8,492
Investments and long-term receivables,
net
863
840
Intangibles, net
447
478
Goodwill
920
920
Other noncurrent assets
743
716
Total assets
$
20,395
$
19,458
Accounts payable and other accrued
liabilities
2,939
3,016
Payroll and benefits payable
498
493
Short-term debt and current maturities of
long-term debt
98
63
Other current liabilities
266
387
Total current liabilities
3,801
3,959
Noncurrent operating lease liabilities
79
105
Long-term debt, less unamortized discount
and debt issuance costs
4,129
3,914
Employee benefits
138
209
Deferred income tax liabilities
712
456
Other long-term liabilities
439
504
United States Steel Corporation
stockholders' equity
11,004
10,218
Noncontrolling interests
93
93
Total liabilities and stockholders'
equity
$
20,395
$
19,458
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS
Three Months Ended September
30,
Nine Months Ended September
30,
(In millions of dollars)
2023
2022
2023
2022
Net earnings and diluted net earnings per
share attributable to United States Steel Corporation, as
reported
$
299
$
1.20
$
490
$
1.85
$
975
$
3.86
$
2,350
$
8.38
Restructuring and other charges
18
23
21
57
Stock-based compensation expense (a)
14
13
37
45
VEBA asset surplus adjustment
(6
)
—
(36
)
—
Asset impairment charges
—
—
4
157
Environmental remediation charges
9
13
11
13
Debt extinguishment
—
(2
)
—
(2
)
Strategic alternatives review process
costs
16
—
16
—
Granite City idling costs
14
—
14
—
Other charges, net
1
—
2
(2
)
Adjusted pre-tax net earnings to United
States Steel Corporation
365
537
1,044
2,618
Tax impact of adjusted items (b)
(15
)
(11
)
(16
)
(66
)
Adjusted net earnings and diluted net
earnings per share attributable to United States Steel
Corporation
$
350
$
1.40
$
526
$
1.98
$
1,028
$
4.07
$
2,552
$
9.06
Weight average diluted ordinary shares
outstanding, in millions
253.1
266.3
255.1
281.6
(a) The prior year was retroactively
adjusted to reflect the reclassification of stock-based
compensation expense. The adjustment was $10 million, $28 million,
$10 million and $34 million, net of taxes, for the three and nine
months ended September 30, 2023, and 2022, respectively.
(b) The tax impact of adjusted items for
the three months and nine months ended September 30, 2023, is
calculated using a blended tax rate of 24% for domestic items and
21% for USSE items. The tax impact of adjusted items for the three
and nine months ended September 30, 2022, was calculated using a
blended tax rate of 25% for domestic items and 21% for USSE
items.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED
EBITDA
Three Months Ended September
30,
Nine Months Ended September
30,
(Dollars in millions)
2023
2022
2023
2022
Reconciliation to Adjusted EBITDA
Net earnings attributable to United States
Steel Corporation
$
299
$
490
$
975
$
2,350
Income tax expense
42
154
237
684
Net interest and other financial
benefits
(64
)
(30
)
(182
)
(48
)
Depreciation, depletion and amortization
expense
230
198
675
594
EBITDA
507
812
1,705
3,580
Restructuring and other charges
18
23
21
57
Stock-based compensation expense (a)
14
13
37
45
Asset impairment charges
—
—
4
157
Environmental remediation charges
9
13
11
13
Strategic alternatives review process
costs
16
—
16
—
Granite City idling costs
14
—
14
—
Other charges, net
—
—
1
(2
)
Adjusted EBITDA
$
578
$
861
$
1,809
$
3,850
Net earnings margin (b)
6.7
%
9.4
%
7.0
%
14.0
%
Adjusted EBITDA margin (b)
13.0
%
16.5
%
13.0
%
23.0
%
(a) The prior year was retroactively
adjusted to reflect the reclassification of stock-based
compensation expense.
(b) The net earnings and adjusted EBITDA
margins represent net earnings or adjusted EBITDA divided by net
sales.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF PAST TWELVE
MONTHS OF FREE AND INVESTABLE CASH FLOW
4th
1st
2nd
3rd
Quarter
Quarter
Quarter
Quarter
Total of the
(Dollars in millions)
2022
2023
2023
2023
Four Quarters
Net cash provided by operating
activities
$
755
$
181
$
713
$
817
$
2,466
Net cash used in investing activities
(614
)
(738
)
(612
)
(585
)
(2,549
)
Free cash flow
141
(557
)
101
232
(83
)
Strategic capital expenditures
479
565
476
423
1,943
Investable free cash flow
$
620
$
8
$
577
$
655
$
1,860
We present adjusted net earnings, adjusted net earnings per
diluted share, earnings before interest, income taxes, depreciation
and amortization (EBITDA), adjusted EBITDA and adjusted EBITDA
margin, 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 and adjusted net earnings per diluted
share are non-GAAP measures that exclude the effects of items that
include: restructuring and other charges, stock-based compensation
expense, VEBA asset surplus adjustment, asset impairment charges,
environmental remediation charges, debt extinguishment, strategic
alternatives review process costs, Granite City idling costs, tax
impact of adjusted items and other charges, net (Adjustment Items).
Adjusted EBITDA is also a non-GAAP measure that excludes the
effects of certain Adjustment Items. We present adjusted net
earnings, adjusted net 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 effects of events that can obscure underlying trends.
U. S. Steel's management considers 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 Adjustment 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 is
not necessarily comparable to similarly titled measures used by
other companies.
We also present free cash flow, a non-GAAP measure of cash
generated from operations after any investing activity and
investable free cash flow, a non-GAAP measure of cash generated
from operations, after any investing activity adjusted for
strategic capital expenditures. We believe that free cash flow and
investable free cash flow provides further insight into the
Company's overall utilization of cash. 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,”
“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 or operating capabilities, the timing, size and form of
share repurchase transactions, operating or financial 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 the
global economic environment, including supply and demand
conditions, inflation, interest rates, supply chain disruptions and
changes in 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 reduction goals, statements
regarding existing or new regulations 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
include all statements that are not historical facts, but instead
represent only the Company’s beliefs regarding goals, plans and
expectations about our prospects for the future and other future
events, many of which, by their nature, are inherently uncertain,
qualified by important factors 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, whether the
objectives of the Company's previously announced strategic
alternatives review process will be achieved; the terms, structure,
timing, benefits and costs of any strategic transaction; and
whether any such transaction will be consummated at all; the risk
that the strategic alternatives review process and its announcement
could have an adverse effect on the ability of the Company to
retain customers and retain and hire key personnel and maintain
relationships with customers, suppliers, employees, shareholders
and other business relationships and on its operating results and
business generally; the risk that the strategic alternatives review
process could divert the attention and time of the Company’s
management, the risk of any unexpected costs or expenses resulting
from the strategic alternatives review process; the risk of any
litigation relating to the strategic alternatives review process;
and the risks and uncertainties described in “Item 1A. Risk
Factors” in our Annual report on Form 10-K for the year ended
December 31, 2022 and those described from time to time in our
future reports filed with the Securities and Exchange
Commission.
References to (i) “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 (ii)
“Big River Steel” refer to Big River Steel Holdings 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 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231026322773/en/
Corporate Communications T - (412) 433-1300 E -
media@uss.com
Emily Chieng Investor Relations Officer T - (412) 618-9554 E -
ecchieng@uss.com
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