United States Steel Corporation · NYSE:X
United States Steel — Q1 2020 Earnings Presentation
27 slides from United States Steel's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Earnings Presentation
First Quarter 2020 Earnings Presentation April 30, 2020 www.ussteel.com
Slide 2: Forward-looking Statements
Forward-looking Statements These slides are being provided to assist readers in understanding the results of operations, financial condition and cash flows of United States Steel Corporation for the first quarter of 2020. They should be read in conjunction with the consolidated financial statements
Slide 3: Explanation of Use of Non-GAAP Measures
Explanation of Use of Non-GAAP 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 enhan
Slide 4: Response to COVID-19
RESPONSE TO COVID-19
Slide 5: Comprehensive response to COVID-19
Comprehensive response to COVID-19 ✓ Protecting lives and livelihoods Guided by our S.T.E.E.L. Principles ✓ Prioritizing cash and liquidity Sufficient balance sheet strength to navigate the current environment ✓ “Best of both” strategy remains the future Demonstrating flexibility to be prepared to i
Slide 6: Comprehensive response to COVID-19: protecting lives and livelihoods
Comprehensive response to COVID-19 protecting lives and livelihoods Following and exceeding CDC1 COVID-19 guidelines Examples include: Distributed additional cleaning supplies throughout plants Regular cleaning frequency of high-traffic areas, surfaces and common areas Installed additional wash stat
Slide 7: Comprehensive response to COVID-19: prioritizing cash and liquidity
Comprehensive response to COVID-19 prioritizing cash and liquidity Total Liquidity as of March 31, 2020 $1.4 billion 8% secured debt capacity 1% 17% $1.8B $800 million Liquidity precautionary ABL draw1 74% $125 million 1 Cash ($1,350M) 2020 capex forecast reduction U.S. ABL ($300M) USSK Facilities (
Slide 8: Comprehensive response to COVID-19: "best of both" strategy remains the future
Comprehensive response to COVID-19 “best of both” strategy remains the future 6 To Be 1 As-Is ▪ The “best of both” ▪ Reshaped footprint integrated and mini mill 6 ▪ Transformed balance sheet business models To Be ▪ Executing technology and ▪ Improved competitiveness capability driven strategy and th
Slide 9: Comprehensive response to COVID-19: swift and meaningful actions
Comprehensive response to COVID-19 swift and meaningful actions Footprint actions Portfolio ➢ N. American Flat-rolled segment Moves ➢ Tubular segment Capital spending actions Operating ➢ 2020 capex = $750M Improvements ➢ Aligned with market conditions Strategic projects update Strategic ➢ Mon Valley
Slide 10: Monetizing excess iron ore pellets
Monetizing excess iron ore pellets $100M $500M $2.4B Cash in 2020 Incremental cash opportunity Implied value Option for Stelco to purchase Additional $500 million Validates value of 25% stake in Minntac until received if option is competitive advantage January 31, 2027 exercised Executing on our str
Slide 11: First Quarter Update
FIRST QUARTER UPDATE
Slide 12: Record of strong safety performance guided by our S.T.E.E.L. Principles
Record of strong safety performance guided by our S.T.E.E.L. Principles Safety First 2 Benchmarks : BLS - Iron & Steel: 0.70 AISI: 0.31 0.14 0.10 0.06 2018 2019 2020 YTD Days Away from Work1 1 Days Away from Work is defined as number of days away cases x 200,000 / hours worked 2 BLS – Iron & Steel 2
Slide 13: First quarter 2020 financial highlights
First quarter 2020 financial highlights Reported Net Earnings (Loss) $ Millions Adjusted Net Earnings (Loss) $ Millions $54 $68 $81 $78 ($84) ($391) ($35) ($680) ($109) ($123) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Adjusted Profit 2% 2% (3%) (24%) (14%) Profi
Slide 14: Flat-rolled segment
Flat-rolled segment Key Segment Statistics Segment EBITDA $ Millions $244 1Q 2Q 3Q 4Q 1Q $199 2019 2019 2019 2019 2020 $167 Shipments: 2,725 2,804 2,654 2,517 2,509 $86 in 000s, net tons $42 Production: 3,075 2,984 2,783 2,567 3,148 in 000s, net tons 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Average S
Slide 15: U. S. Steel Europe segment
U. S. Steel Europe segment Key Segment Statistics Segment EBITDA $ Millions $52 1Q 2Q 3Q 4Q 1Q 2019 2019 2019 2019 2020 $13 $9 Shipments: 1,064 1,004 765 757 801 in 000s, net tons ($7) Production: 1,159 1,148 823 773 882 ($23) in 000s, net tons 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Average Selling
Slide 16: Tubular segment
Tubular segment Key Segment Statistics Segment EBITDA $ Millions $21 1Q 2Q 3Q 4Q 1Q $6 2019 2019 2019 2019 2020 Shipments: 207 195 174 193 187 in 000s, net tons ($14) Average Selling Price $1,549 $1,524 $1,417 $1,298 $1,283 ($34) ($35) $ / net ton 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 EBITDA 6% 2%
Slide 17: Cash and liquidity
Cash and liquidity Cash from Operations $ Millions Cash and Cash Equivalents $ Millions $938 $1,515 $1,553 $826 $1,350 $754 $682 $1,000 $749 ($142) YE 2016 YE 2017 YE 2018 YE 2019 1Q 2020 YE 2016 YE 2017 YE 2018 YE 2019 1Q 2020 Total Estimated Liquidity $ Millions Net Debt $ Millions $3,350 $3,365 $
Slide 18: Appendix
APPENDIX
Slide 19: Global operations update
Global operations update Operating Idled Indefinitely Idled Total Idled Capacity1 Iron ore pellets Minntac Keetac 6.0 22.4 rolled Clairton cokemaking Extended coking times – 4.3 - Gary BF #4 BF #6 BF #8 BF #14 4.5 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Great Lakes2 BF ‘A1’ BF ‘B2’ BF ‘D4’ 3.8 3.8 N.
Slide 20: Strategic projects status
Strategic projects status Strategic Projects Status Details On track to complete in the second EAF at Tubular half of 2020 Endless Casting and Project delayed for an indeterminate Rolling at Mon Valley period of time Remaining upgrades delayed for an Gary Hot Strip Mill indeterminate period of time
Slide 21: First quarter segment EBITDA bridges 4Q 2019 vs 1Q 2020
First quarter segment EBITDA bridges 4Q 2019 vs 1Q 2020 Flat-rolled $ Millions Commercial: The unfavorable impact is primarily the result of an absence of third-party pellet shipments due to seasonality. $26 Raw Materials: The favorable impact is primarily the result of lower $28 $86 costs for coal
Slide 22: Total corporation adjusted EBITDA bridges
Total corporation adjusted EBITDA bridges 1Q 2019 vs 1Q 2020 $ Millions 1Q 2019 vs 1Q 2020 $ Millions ($113) $285 ($441) $285 ($43) $64 $82 ($56) $32 ($9) $106 $64 1Q Commercial Raw Maintenance Other 1Q 1Q Flat- U. S. Steel Tubular Other 1Q 2019 Materials & Outage 2020 2019 rolled Europe 2020 4Q 201
Slide 23: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Flat-rolled ($millions) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Segment earnings before interest and income taxes $95 $134 $46 ($79) ($35) Depreciation 104 110 121 121 121 Flat-rolled Segment EBITDA $199 $244 $167 $42 $86 U. S. Steel Europe ($ millions) 1Q 2019 2Q 20
Slide 24: Reconciliation of net debt
Reconciliation of net debt Net Debt YE 2016 YE 2017 YE 2018 YE 2019 1Q 2020 ($ millions) Short-term debt and current maturities of long-term $50 $3 $65 $14 $99 debt Long-term debt, less unamortized discount and debt 2,981 2,700 2,316 3,627 4,616 issuance costs Total Debt $3,031 $2,703 $2,381 $3,641
Slide 25: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Reported net earnings (loss) attributable to U. S. Steel $54 $68 ($84) ($680) ($391) Tubular asset impairment charges ─ ─ ─ ─ 263 Gain on previously held investment in UPI ─ ─ ─ ─ (25) Restructu
Slide 26: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Reported net earnings (loss) attributable to U. S. Steel $54 $68 ($84) ($680) ($391) Income tax provision (benefit) 8 (7) (44) 233 (19) Net interest and other financial costs 49 54 48 71 35 Reported earnings (loss
Slide 27: Investor Relations
INVESTOR RELATIONS Kevin Lewis Vice President 412-433-6935 klewis@uss.com Eric Linn Senior Manager 412-433-2385 eplinn@uss.com www.ussteel.com