United States Steel Corporation · NYSE:X
United States Steel — Q3 2019 Earnings Presentation
19 slides from United States Steel's earnings presentation, Nov 1, 2019
Slide 1: Third Quarter 2019 Earnings Call
Third Quarter 2019 Earnings Call David Burritt President and Chief Executive Officer Kevin Bradley Executive Vice President and Chief Financial Officer Christine Breves SVP, Manufacturing Support & Chief Supply Chain Officer (named SVP and CFO effective November 4, 2019) Rich Fruehauf Senior Vice Pr
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 third quarter of 2019. 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: Today's Highlights
Today’s Highlights Third Quarter 2019 Results We Are Executing ▪ 3Q adjusted EBITDA: $144 million, at Closed on our 49.9% equity the top end of our preliminary range stake in Big River Steel ▪ Flat-rolled: strong operating Enhanced operating model to performance despite difficult market support the
Slide 5: Delivering on our S.T.E.E.L. Principles
Delivering on our S.T.E.E.L. Principles Safety First Days Away from Work1 0.17 0.15 0.14 Trust & Respect 0.13 0.11 Environmentally Friendly Activities 2015 2016 2017 2018 3Q 2019 Ethical Behavior TTM Lawful Business Conduct 1 Days Away from Work is defined as number of days away cases x 200,000 / ho
Slide 6: Organizational Changes to Occur Through January 1, 2020
Organizational Changes to Occur Through January 1, 2020 CURRENT Kevin Christine Scott Doug ROLE Bradley Breves Buckiso Matthews Executive Vice President SVP, Manufacturing SVP, Automotive SVP, Industrial, Service & Chief Financial Officer Support & Chief Supply Solutions Center, Mining Solutions Cha
Slide 7: Enhanced Operating Model to Support the Next Phase of Strategy Execution
Enhanced Operating Model to Support the Next Phase of Strategy Execution Aligning around our world competitive “Best of Both” strategy Creating a more nimble and efficient executive function Enhancing focus on operational and commercial excellence and promoting technological innovation 7
Slide 8: Executing on Our Strategic Framework
Executing on Our Strategic Framework 6 To Be 1 As-Is World competitive “best of ▪ ▪ Reshaped footprint both” integrated and mini 6 mill business models ▪ Transformed balance sheet To Be ▪ Improved competitiveness ▪ Executing technology and and through cycle cash 5 1 capability driven strategy flow F
Slide 9: Strategy Brings Together the "Best of Both"
Strategy Brings Together the “Best of Both” ✓ World competitive positioning in strategic, high-margin end markets ✓ Unparalleled product platform to serve * customers ✓ Big River will unlock value across our entire footprint Transforms business to drive long term cash flow through industry cycles *
Slide 10: Playing Offense and Will be Flexible to Ensure the Strategy is Executed
Playing Offense and Will be Flexible to Ensure the Strategy is Executed Our Strategic Priorities … Our Strategy Delivers … 1 Big River Steel Cost Differentiation 2 EAF at Tubular* Capability 3 Endless Casting and Rolling at Mon Valley* Differentiation 4 Gary Hot Strip Mill* World Competitive Footpri
Slide 11: Raised ~$1.1 Billion Incremental Capital to Enable Execution of Our Strategy
Raised ~$1.1 Billion Incremental Capital to Enable Execution of Our Strategy $350M $275M $500M Convertible Notes ERBs1 ABL2 Upsize $300M offering + $275M offering $500M upsize $50M greenshoe (to fund Fairfield EAF) ($700M draw funded Big River purchase) 7-years, non- 30-years, payable 5-years callab
Slide 12: Third Quarter 2019 Financial Highlights
Third Quarter 2019 Financial Highlights Flat-rolled Adjusted EBITDA1 $ Millions $244 • Total third quarter adjusted EBITDA1 of $167 $144 million, at the top end of our preliminary range Adjusted 2Q 2019 3Q 2019 1 EBITDA 9% 7% Margin: U. S. Steel Europe Adjusted EBITDA1 $ Millions • Results negativel
Slide 13: Recap
Recap • Addressing current market conditions proactively • Focusing on what we can control • Prioritizing cash towards our long-term strategy 13
Slide 14: Q & A
Q & A
Slide 15: (op) (@)) ce (op) Or
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Slide 16: Reconciliation of Reported and Adjusted Diluted EPS
Reconciliation of Reported and Adjusted Diluted EPS ($ / share ) 2Q 2019 3Q 2019 Reported diluted EPS $0.39 ($0.49) December 24, 2018 Clairton coke making facility fire 0.06 0.04 Restructuring Charges ─ 0.24 Adjusted earnings per diluted share $0.45 ($0.21) 16
Slide 17: Reconciliation of Segment EBITDA
Reconciliation of Segment EBITDA Segment EBITDA – Flat-rolled 2Q 2019 3Q 2019 ($ millions) Segment earnings before interest and income taxes $134 $46 Depreciation 110 121 Flat-rolled Segment EBITDA $244 $167 Segment EBITDA – U. S. Steel Europe 2Q 2019 3Q 2019 ($ millions) Segment earnings before int
Slide 18: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ millions) 2Q 2019 3Q 2019 Reported net earnings attributable to U. S. Steel $68 ($84) Income tax provision (7) (44) Net interest and other financial costs 54 48 Reported earnings before interest and income taxes $115 ($80) Depreciation, depletion and amortization
Slide 19: Investor Relations
INVESTOR RELATIONS Kevin Lewis General Manager 412-433-6935 klewis@uss.com Eric Linn Manager 412-433-2385 eplinn@uss.com www.ussteel.com