United States Steel Corporation Reports Fourth Quarter and Full-Year 2020 Results

PITTSBURGH–(BUSINESS WIRE)–Jan 28, 2021–
United States Steel Corporation (NYSE: X) reported fourth quarter 2020 net earnings of $49 million, or $0.22 per diluted share. Adjusted net loss was $60 million, or $0.27 per diluted share. This compares to fourth quarter 2019 net loss of $668 million, or $3.93 per diluted share. Adjusted net loss for the fourth quarter 2019 was $109 million, or $0.64 per diluted share.
Full-year 2020 net loss was $1,165 million, or $5.92 per diluted share. Adjusted net loss was $920 million, or $4.67 per diluted share. This compares to full-year 2019 net loss of $630 million, or $3.67 per diluted share. Adjusted net earnings for 2019 were $15 million, or $0.09 per diluted share.

 
Earnings Highlights
 
  Quarter Ended   Year Ended
  December 31,   December 31,
(Dollars in millions, except per share amounts) 2020   2019   2020   2019
Net Sales $ 2,562     $ 2,824     $ 9,741     $ 12,937  
Segment (loss) earnings before interest and income taxes              
Flat-Rolled $ (73 )   $ (79 )   $ (596 )   $ 196  
U. S. Steel Europe 36     (30 )   9     (57 )
Tubular (32 )   (46 )   (179 )   (67 )
Other Businesses (6 )   (3 )   (39 )   23  
Total segment (loss) earnings before interest and income taxes $ (75 )   $ (158 )   $ (805 )   $ 95  
Other items not allocated to segments 118     (218 )   (270 )   (325 )
Earnings (loss) before interest and income taxes $ 43     $ (376 )   $ (1,075 )   $ (230 )
Net interest and other financial costs 88     71     232     222  
Income tax (benefit) provision (94 )   221     (142 )   178  
Net earnings (loss) $ 49     $ (668 )   $ (1,165 )   $ (630 )
Earnings (loss) per diluted share $ 0.22     $ (3.93 )   $ (5.92 )   $ (3.67 )
               
Adjusted net (loss) earnings (a) $ (60 )   $ (109 )   $ (920 )   $ 15  
Adjusted net (loss) earnings per diluted share (a) $ (0.27 )   $ (0.64 )   $ (4.67 )   $ 0.09  
Adjusted earnings (loss) before interest, income taxes, depreciation and amortization (EBITDA) (a) $ 87     $ 4     $ (162 )   $ 711  
(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.
 

“We finished 2020 strong and are optimistic about the opportunity to deliver incremental value for our stakeholders in 2021,” said U. S. Steel President and CEO David B. Burritt. “Our fourth quarter adjusted EBITDA of $87 million is only just beginning to show the potential of our earnings growth as we begin to realize the benefits of higher prices, adaptive operations, and our continued focus on cost management. Our performance continues to strengthen as we enter 2021 and we are bullish that the market will continue to be fueled by robust demand, low inventories, and supportive raw material prices.”
Commenting on its Best of Both SM strategy execution in 2020, Burritt continued, “The team at U. S. Steel created unprecedented value in the trough by continuing our transformation into a world-competitive, Best of Both steel producer. By keeping the business resilient, we were able to execute our number one strategic priority to acquire the remaining stake in Big River Steel. With Big River Steel now fully part of the U. S. Steel portfolio, we are well positioned to drive significant earnings growth while delivering our customers an unmatched value proposition. Our future starts now and we cannot wait to show the world the value that the only Best of Both steel company can create.”
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The Company will conduct a conference call on the fourth quarter and full-year 2020 earnings on Friday, January 29, at 8:30 a.m. Eastern Standard. 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 January 29.

 
UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                 
    Quarter Ended   Year Ended
    December 31,   December 31,
    2020   2019   2020   2019
OPERATING STATISTICS              
Average realized price: ($/net ton unless otherwise noted) (a)              
  Flat-Rolled 731     699     718     753  
  U. S. Steel Europe 652     622     626     652  
  U. S. Steel Europe (€/net ton) 547     562     549     582  
  Tubular 1,267     1,298     1,271     1,450  
Steel shipments (thousands of net tons): (a)              
  Flat-Rolled 2,257     2,517     8,711     10,700  
  U. S. Steel Europe 840     757     3,041     3,590  
  Tubular 74     193     464     769  
  Total Steel Shipments 3,171     3,467     12,216     15,059  
                 
Intersegment steel (unless otherwise noted) shipments (thousands of net tons):              
  Flat-Rolled to Tubular     46     101     258  
  Flat-Rolled to U. S. Steel Europe (iron ore pellets and fines) 506         1,418     424  
Raw steel production (thousands of net tons):              
  Flat-Rolled 2,490     2,567     9,313     11,409  
  U. S. Steel Europe 966     773     3,366     3,903  
  Tubular 16         16      
Raw steel capability utilization: (b)              
  Flat-Rolled 58 %   60 %   55 %   67 %
  U. S. Steel Europe 77 %   61 %   67 %   78 %
  Tubular (c) 7 %   %   7 %   %
                 
CAPITAL EXPENDITURES (dollars in millions)              
  Flat-Rolled $ 93     $ 179     $ 484     $ 943  
  U. S. Steel Europe 15     42     79     153  
  Tubular 26     48     159     145  
  Other Businesses     5     3     11  
  Total $ 134     $ 274     $ 725     $ 1,252  
(a) Excludes intersegment shipments.
(b) Based on annual raw steel production capability of 17.0 million net tons for Flat-Rolled, 5.0 million net tons for U. S. Steel Europe and 0.9 million net tons for Tubular.
(c) The Fairfield Electric Arc Furnace commenced operation in October 2020. The new 1.6 million ton electric arc furnace is currently used to feed our 0.9 million ton rounds caster. As a result, the Tubular segment now has annual raw steel production capability of 0.9 million tons. The 2020 production as a % of total capability amount is based on an October 1, 2020 start date.
UNITED STATES STEEL CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
                 
    Quarter Ended   Year Ended
    December 31,   December 31,
(Dollars in millions, except per share amounts) 2020   2019   2020   2019
NET SALES   $ 2,562     $ 2,824     $ 9,741     $ 12,937  
                 
Operating expenses (income):                
Cost of sales (excludes items shown below)   2,384     2,781     9,558     12,082  
Selling, general and administrative expenses   75     66     274     289  
Depreciation, depletion and amortization   162     162     643     616  
Loss (earnings) from investees   39     (11 )   117     (79 )
Asset impairment charges           263      
Gain on equity investee transactions           (31 )    
Restructuring charges   8     221     138     275  
Net gain on disposal of assets   (147 )   (4 )   (149 )   (1 )
Other loss (income), net   (2 )   (15 )   3     (15 )
Total operating expenses   2,519     3,200     10,816     13,167  
                 
EARNINGS (LOSS) BEFORE INTEREST AND INCOME TAXES   43     (376 )   (1,075 )   (230 )
Net interest and other financial costs   88     71     232     222  
                 
(LOSS) EARNINGS BEFORE INCOME TAXES   (45 )   (447 )   (1,307 )   (452 )
Income tax (benefit) provision   (94 )   221     (142 )   178  
                 
Net earnings (loss)   49     (668 )   (1,165 )   (630 )
Less: Net earnings (loss) attributable to noncontrolling interests                
NET EARNINGS (LOSS) ATTRIBUTABLE TO UNITED STATES STEEL CORPORATION   $ 49     $ (668 )   $ (1,165 )   $ (630 )
                 
COMMON STOCK DATA:                
Net (loss) earnings per share attributable to                
United States Steel Corporation stockholders:                
Basic   $ 0.22     $ (3.93 )   $ (5.92 )   $ (3.67 )
Diluted   $ 0.22     $ (3.93 )   $ (5.92 )   $ (3.67 )
Weighted average shares, in thousands                
Basic   220,412     170,041     196,721     171,418  
Diluted   223,781     170,041     196,721     171,418  
Dividends paid per common share   $ 0.01     $ 0.05     $ 0.04     $ 0.20  
UNITED STATES STEEL CORPORATION
CONDENSED CASH FLOW STATEMENT (Unaudited)
    Year Ended
    December 31,
(Dollars in millions) 2020   2019
Cash provided by (used in) operating activities:      
  Net loss $ (1,165 )   $ (630 )
  Depreciation, depletion and amortization 643     616  
  Asset impairment charges 263      
  Gain on equity investee transactions (31 )    
  Restructuring charges 138     275  
  Pensions and other post-employment benefits (21 )   101  
  Deferred income taxes (130 )   202  
  Net gain on sale of assets (149 )   (1 )
  Working capital changes 575     276  
  Income taxes receivable/payable 20     13  
  Other operating activities (5 )   (170 )
Total 138     682  
         
Cash used in investing activities:      
  Capital expenditures (725 )   (1,252 )
  Investment in Big River Steel (9 )   (710 )
  Proceeds from sale of assets 167     4  
  Proceeds from sale of ownership interests in equity investees 8      
  Investments, net (4 )    
Total (563 )   (1,958 )
         
Cash provided by (used in) financing activities:      
  Net change in short-term debt, net of financing costs 170      
  Revolving credit facilities – borrowings, net of financing costs 1,402     860  
  Revolving credit facilities – repayments (1,621 )   (100 )
  Issuance of long-term debt, net of financing costs 1,148     702  
  Repayment of long-term debt (13 )   (155 )
  Net proceeds from public offering of common stock 410      
  Proceeds from Stelco Option agreement, net of financing costs 94      
  Common stock repurchased     (88 )
  Taxes paid for equity compensation plans (1 )   (7 )
  Dividends paid (8 )   (35 )
Total 1,581     1,177  
         
Effect of exchange rate changes on cash 23     (2 )
         
Net increase (decrease) in cash, cash equivalents and restricted cash 1,179     (101 )
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 $ 2,118     $ 939  
UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
         
    December 31,   December 31,
(Dollars in millions) 2020   2019
Cash and cash equivalents $ 1,985     $ 749  
Receivables, net 994     1,177  
Inventories 1,402     1,785  
Other current assets 51     102  
  Total current assets 4,432     3,813  
Operating lease assets 214     230  
Property, plant and equipment, net 5,444     5,447  
Investments and long-term receivables, net 1,177     1,466  
Intangible, net 129     150  
Deferred income tax benefits 22     19  
Other noncurrent assets 641     483  
         
  Total assets $ 12,059     $ 11,608  
         
Accounts payable and other accrued liabilities 1,884     2,054  
Payroll and benefits payable 308     336  
Short-term debt and current maturities of long-term debt 192     14  
Other current liabilities 272     221  
  Total current liabilities 2,656     2,625  
Noncurrent operating lease liabilities 163     177  
Long-term debt, less unamortized discount and debt issuance costs 4,695     3,627  
Employee benefits 322     532  
Other long-term liabilities 344     554  
United States Steel Corporation stockholders’ equity 3,786     4,092  
Noncontrolling interests 93     1  
         
  Total liabilities and stockholders’ equity $ 12,059     $ 11,608  
UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET (LOSS) EARNINGS
                   
    Quarter Ended   Year Ended
    December 31,   December 31,
(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 earnings (loss) attributable to United States Steel Corporation, as reported $ 49     (668 )   $ (1,165 )   $ (630 )
  Asset impairment charge         263      
  Restructuring and other charges 8     221     131     263  
  Tubular inventory impairment         24      
  Big River Steel debt extinguishment charges (b) 18         18      
  Uncertain tax positions         13      
  Big River Steel financing costs 8         8      
  Big River Steel transaction and other related costs 3         3      
  Fairless property sale (145 )       (145 )    
  Big River Steel options and forward adjustments 1     7     (39 )   7  
  Gain on previously held investment in UPI         (25 )    
  December 24, 2018 Clairton coke making facility fire (2 )   (3 )   (6 )   41  
  Tax valuation allowance     334         334  
Total adjustments (109 )   559     245     645  
Adjusted net (loss) earnings attributable to United States Steel Corporation $ (60 )   $ (109 )   $ (920 )   $ 15  
                 
Reconciliation to adjusted diluted net (loss) earnings per share              
Diluted net earnings (loss) per share 0.22     (3.93 )   (5.92 )   (3.67 )
  Asset impairment charge         1.34      
  Restructuring and other charges 0.04     1.30     0.67     1.53  
  Tubular inventory impairment         0.12      
  Big River Steel debt extinguishment charges (b) 0.08         0.09      
  Uncertain tax positions         0.07      
  Big River Steel financing costs 0.04         0.04      
  Big River Steel transaction and other related costs 0.01         0.02      
  Fairless property sale (0.66 )       (0.74 )    
  Big River Steel options and forward adjustments 0.01     0.04     (0.20 )   0.04  
  Gain on previously held investment in UPI         (0.13 )    
  December 24, 2018 Clairton coke making facility fire (0.01 )   (0.01 )   (0.03 )   0.23  
  Tax valuation allowance     1.96         1.96  
Total adjustments (0.49 )   3.29     1.25     3.76  
Adjusted diluted net (loss) earnings per share $ (0.27 )   $ (0.64 )   $ (4.67 )   $ 0.09  
(a) The adjustments included in this table for the three and twelve months ended December 31, 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 2019 adjustments included in this table have been tax effected through the third quarter of 2019 as a valuation allowance was not applied to our deferred tax assets until the fourth quarter of 2019.  
(b) The Big River Steel debt extinguishment charges were related to Big River Steel refinancing activity that was recognized by U. S. Steel through its equity method income.  
UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
                 
    Quarter Ended   Year Ended
    December 31,   December 31,
(Dollars in millions) 2020   2019   2020   2019
Reconciliation to Adjusted EBITDA              
  Net earnings (loss) attributable to United States Steel Corporation $ 49     $ (668 )   $ (1,165 )   $ (630 )
  Income tax (benefit) provision (94 )   221     (142 )   178  
  Net interest and other financial costs 88     71     232     222  
  Depreciation, depletion and amortization expense 162     162     643     616  
EBITDA 205     (214 )   (432 )   386  
  Asset impairment charge         263      
  Restructuring and other charges 8     221     138     275  
  Tubular inventory impairment         24      
  Big River Steel debt extinguishment charges 18         18      
  Big River Steel transaction and other related costs 3         3      
  Fairless property sale (145 )       (145 )    
  Gain on previously held investment in UPI         (25 )    
  December 24, 2018 Clairton coke making facility fire (2 )   (3 )   (6 )   50  
Adjusted EBITDA $ 87     $ 4     $ (162 )   $ 711  

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, considered along with net (loss) 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 (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the effects of items that include: the asset impairment charge, restructuring and other charges, the Fairless property sale, the Big River Steel options and forward adjustments, the December 24, 2018 Clairton coke making facility fire, the tax valuation allowance, loss on extinguishment of debt and other related costs, the USW labor agreement signing bonus and related costs, Granite City Works restart and related costs and gain on equity investee transactions that are not part of the Company’s core operations (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, 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, 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 our ability to realize the level of cost savings, productivity improvement, growth or other anticipated benefits and additional future synergies, including in the time period anticipated, of the acquisition of Big River Steel; our ability to successfully integrate the businesses of Big River Steel into our existing businesses, including uncertainties associated with maintaining relationships with customers, vendors and employees, as well as differences in operating technologies, cultures, and management philosophies that may delay successful integration; additional debt, which we assumed in connection with the acquisition of Big River Steel and incurred to enhance our liquidity during the COVID-19 pandemic, may negatively impact our credit profile and limit our financial flexibility; business strategies for the combined company’s operations; the diversion of management’s attention from ongoing business operations; our ability to retain and hire key personnel, including within the Big River Steel business, and to access our distribution channels, including the availability of workforce and subcontractors; potential adverse reactions or changes to business relationships resulting from the completion of the acquisition of Big River Steel; unknown or underestimated liabilities and unforeseen increased expenses or delays associated with the acquisition and integration beyond current estimates; and the risks and uncertainties described in “Item 1A. Risk Factors” of our Annual report on Form 10-K, 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 a leading steel producer. Together with its subsidiary Big River Steel and an unwavering focus on safety, the company’s customer-centric Best of Both SM 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.
View source version on businesswire.com:https://www.businesswire.com/news/home/20210128006127/en/
CONTACT: John Ambler
Vice President
Corporate Communications
T – (412) 433-2407
E -joambler@uss.comKevin Lewis
Vice President
Investor Relations
T – (412) 433-6935
E -KLewis@uss.com
KEYWORD: UNITED STATES NORTH AMERICA PENNSYLVANIA
INDUSTRY KEYWORD: AUTOMOTIVE MANUFACTURING MANUFACTURING OTHER MANUFACTURING STEEL PACKAGING
SOURCE: United States Steel Corporation
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PUB: 01/28/2021 05:09 PM/DISC: 01/28/2021 05:09 PM
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