United States Steel Corporation · NYSE:X
United States Steel — Q3 2015 Earnings Presentation
29 slides from United States Steel's earnings presentation, Nov 4, 2015
Slide 1: Third Quarter 2015 Earnings Conference Call and Webcast
United States Steel Corporation Third Quarter 2015 Earnings Conference Call and Webcast November 4, 2015 © 2011 United States Steel Corporation Exhibit 99.1
Slide 2: Forward-looking Statements
2 Forward-looking Statements United States Steel Corporation This presentation contains information that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, we have identified such forward-looking statements by using the
Slide 3: Third Quarter 2015 Results
Segment EBIT $ Millions Adjusted EBITDA $ Millions Adjusted Diluted EPS $ / Share 3Q 2015 1Q 2015 4Q 2014 4Q 2014 1Q 2015 2Q 2015 Note: For reconciliation of non-GAAP amounts see Appendix 1Q 2015 4Q 2014 2Q 2015 Third Quarter 2015 Results 3 United States Steel Corporation Adjusted Net Income $ Milli
Slide 4: Strong Cash Position and Liquidity
Cash from Operations $ Millions 2Q 2015 1Q 2015 4Q 2014 LTM 3Q 2015 Total Estimated Liquidity $ Millions 3Q 2014 3Q 2013 3Q 2012 3Q 2015 Strong Cash Position and Liquidity 4 United States Steel Corporation Cash and Cash Equivalents $ Millions Net Debt $ Millions Disciplined cash management and capit
Slide 5: Third Quarter 2015 Flat-rolled Segment
EBIT $ Millions Average Realized Prices $ / Ton 4Q 2014 1Q 2015 2Q 2015 Third Quarter 2015 Flat-rolled Segment 4Q 2014 1Q 2015 2Q 2015 Shipments Net tons (Thousands) 4Q 2014 1Q 2015 3Q 2015 5 United States Steel Corporation EBITDA $ Millions 4Q 2014 1Q 2015 2Q 2015 3Q 2015 LTM 3Q 2015 LTM 3Q 2015 LT
Slide 6: Third Quarter 2015 Tubular Segment
EBIT $ Millions Average Realized Prices $ / Ton 4Q 2014 1Q 2015 2Q 2015 Third Quarter 2015 Tubular Segment 4Q 2014 1Q 2015 2Q 2015 Shipments Net tons (Thousands) 4Q 2014 1Q 2015 2Q 2015 6 United States Steel Corporation EBITDA $ Millions 4Q 2014 1Q 2015 2Q 2015 3Q 2015 LTM 3Q 2015 LTM 3Q 2015 LTM 3Q
Slide 7: Third Quarter 2015 U. S. Steel Europe Segment
EBIT $ Millions Average Realized Prices $ / Ton 4Q 2014 1Q 2015 2Q 2015 Third Quarter 2015 U. S. Steel Europe Segment 4Q 2014 1Q 2015 2Q 2015 Shipments Net tons (Thousands) 4Q 2014 1Q 2015 2Q 2015 7 United States Steel Corporation EBITDA $ Millions 4Q 2014 1Q 2015 2Q 2015 3Q 2015 LTM 3Q 2015 LTM 3Q
Slide 8: Carnegie Way Transformation Improving Earnings Power
3Q 2009 vs. 3Q 2015 $ Millions Note: For reconciliation of non-GAAP amounts see Appendix Carnegie Way Transformation Improving Earnings Power 8 United States Steel Corporation ($255) $188 ($31) $195 $81 ($16) 3Q09 EBITDA Price Volume Cost 3Q15 EBITDA North American Flat-rolled EBITDA Bridge Other 2Q
Slide 9: Carnegie Way Continuing to Deliver
Carnegie Way Benefits1 – FY 2015 Impact $ Millions 9 Carnegie Way Continuing to Deliver 55% 12% United States Steel Corporation 1 Carnegie Way benefits are based on the incremental impact in 2015 as compared to 2014 as the base year.
Slide 10: Carnegie Way Strategic Approach
10 Carnegie Way transformation Phase 1: Earning the right to grow in search of: • Economic profits • Customer satisfaction and loyalty • Process improvements and focused investment Phase 2: Driving profitable growth with: • Innovation and Technology • Differentiated customer solutions • Focused M&A
Slide 11: Business Update
11 United States Steel Corporation Business Update Short term actions taken are expected to reduce costs in the fourth quarter of 2015 by approximately $125 million Operating updates • Steelmaking facilities • Flat-rolled finishing facilities • Tubular facilities Trade Update Recent activity
Slide 12: Market conditions by segment
12 United States Steel Corporation Flat-rolled September auto sales highest since 2005 at an 18.1 million SAAR Construction spend has increased 9 straight months to a SAAR of $1.09 trillion in August September major unit shipments up 21% m-o-m according to the Assc. of Home Appliance Manufacturers (
Slide 13: 2015 Outlook
13 United States Steel Corporation 2015 Outlook 2015 Adjusted EBITDA Guidance Approximately $225 million • Steel selling prices reversed direction • Import levels remained higher than expected • Slower pace of supply chain inventory rebalance • Continued deterioration of the OCTG market Actual marke
Slide 14: Turning Strategy Into Action
United States Steel Corporation Turning Strategy Into Action 13
Slide 15: Q & A
United States Steel Corporation Third Quarter 2015 Earnings Conference Call and Webcast Q & A November 4, 2015 © 2011 United States Steel Corporation United States Steel Corporation 15
Slide 16: Appendix
© 2011 United States Steel Corporation Appendix 16 United States Steel Corporation
Slide 17: Major end-markets summary North American Flat-rolled Segment
17 Major end-markets summary North American Flat-rolled Segment United States Steel Corporation Automotive September auto sales were the highest since 2005 at an 18.1 million SAAR. October 1st inventories increased modestly by 4 days up to a still normal 59 days. 4Q build forecast is projected to be
Slide 18: Market industry summary Tubular Segment
18 Market industry summary Tubular Segment United States Steel Corporation Sources: Baker Hughes, US Energy Information Administration, Preston Publishing, Internal Oil Directed Rig Count The oil directed rig count averaged 657during 3Q, a decrease of 4% q-o-q. There are currently 578 active oil rig
Slide 19: Major end-markets summary U. S. Steel Europe Segment
19 Major end-markets summary United States Steel Corporation U. S. Steel Europe Segment Sources: Eurofer, USSK Marketing, EASSC, IHS, Euroconstruct, ESTA, ACEA Automotive In 4Q, the EU car production is expected to amount to 4.3 million units, an increase of 4.2% y-o-y. In 2015, EU car production is
Slide 20: U. S. Steel Commercial – Contract vs. Spot
U. S. Steel Commercial – Contract vs. Spot Contract vs. spot mix by segment – twelve months ended September 30, 2015 Firm 33% Market Based Quarterly * 18% Flat-rolled Market Based Monthly * 13% Tubular U. S. Steel Europe Spot 26% Cost Based 9% Contract: 74% Spot: 26% Firm 37% Market Based Quarterly*
Slide 21: Other Items
21 United States Steel Corporation Other Items Capital Spending Third quarter actual $133 million, 2015 estimate $500 million Depreciation, Depletion and Amortization Third quarter actual $136 million, 2015 estimate $550 million Pension and Other Benefits Costs Third quarter actual $74 million, 2015
Slide 22: Safety Performance Rates
22 Global OSHA Recordable Incidence Rates January 2010 through September 2015 United States Steel Corporation Safety Performance Rates Frequency of Injuries (per 200,000 manhours) Data for 2010 forward includes Lone Star Tubular Operations, Bellville Tubular Operations, Rig Site Services, Tubular Pr
Slide 23: Segment EBITDA Bridges 3Q 2009 vs. 3Q 2015
NAFR Segment - EBITDA Bridge $ Millions Tubular Segment - EBITDA Bridge $ Millions Note: For reconciliation of non-GAAP amounts see Appendix Carnegie Way Transformation Improving Earnings Power 23 United States Steel Corporation ($255) $188 ($31) $195 $81 ($16) 3Q09 EBITDA Price Volume Cost 3Q15 EBI
Slide 24: Segment EBITDA Bridges 2Q 2015 vs. 3Q 2015
NAFR Segment - EBITDA Bridge $ Millions Tubular Segment - EBITDA Bridge $ Millions Note: For reconciliation of non-GAAP amounts see Appendix Carnegie Way Transformation Improving Earnings Power 24 United States Steel Corporation $35 ($57) ($24) $127 $81 $0 2Q15 EBITDA Price Volume Cost 3Q15 EBITDA 2
Slide 25: Adjusted Results ($ millions) Net Earnings
25 United States Steel Corporation Adjusted Results ($ millions) LTM 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Reported net earnings (loss) ($234) ($173) ($261) ($75) $275 Loss on shutdown of coke production facilities 65 ─ ─ 65 ─ Loss on shutdown of Fairfield Works Flat-Rolled Operations (a) 53 53 ─ ─ ─ Loss
Slide 26: Adjusted Results ($ per share)
26 United States Steel Corporation Adjusted Results ($ per share) LTM 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Reported diluted EPS (LPS) ($1.66) ($1.18) ($1.79) ($0.52) $1.83 Loss on shutdown of coke production facilities 0.45 ─ ─ 0.45 ─ Loss on shutdown of Fairfield Works Flat-Rolled Operations (a) 0.36 0.
Slide 27: Adjusted Results EBITDA Reconciliation
27 United States Steel Corporation Adjusted Results ($ millions) LTM 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Reported (loss) earnings before interest and income taxes (EBIT) ($352) ($170) ($392) ($187) $397 Depreciation expense 556 136 138 144 138 EBITDA 204 (34) (254) (43) 535 Loss on shutdown of coke prod
Slide 28: Adjusted Results Net Debt
28 United States Steel Corporation Adjusted Results Net Debt ($ millions) 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Short-term debt and current maturities of long-term debt $362 $362 $378 $378 Long-term debt, less unamortized discount 3,127 3,124 3,124 3,120 Total Debt $3,489 $3,486 $3,502 $3,498 Less: Cash a
Slide 29: Adjusted Results Segment EBITDA
29 United States Steel Corporation Adjusted Results Segment EBITDA – North America Flat-rolled ($ millions) 3Q 2015 2Q 2015 1Q 2015 4Q 2014 3Q 2009 Segment EBIT ($18) ($64) ($67) $247 ($370) Depreciation 99 99 104 96 115 Segment EBITDA $81 $35 $37 $343 ($255) Reconciliation of segment EBITDA Segment