United States Steel Corporation · NYSE:X
United States Steel — FY2021 Earnings Presentation
33 slides from United States Steel's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter & Full Year 2021 Earnings Presentation
Fourth Quarter & Full Year 2021 Earnings Presentation www.ussteel.com January 27, 2022
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 as of and for the fourth quarter and full year of 2021. Financial results as of and for the periods ended Dec
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: Record performance in 2021 and bullish for 2022
CURRENT LANDSCAPE CHALLENGES SOLUTION PATH FORWARD Record performance in 2021 and bullish for 2022 Delivering on Best for All Transitioning to a less capital and carbon intensive business model while becoming the best steel competitor ✓ Mini Mill #2 ✓ NGO electrical steel line at Big River Steel ✓ C
Slide 5: Advancing towards our Best for All future
ADVANCING TOWARDS OUR BEST FOR ALL FUTURE
Slide 6: 2021 successes
6 Advancing towards our Best for All future 2021 successes … RECORD 2021 PERFORMANCE TRANSFORMED BALANCE SHEET BUILDING ESG LEADERSHIP Record earnings, free cash flow, and cash/liquidity De-levered balance sheet by $3.1B1 Named a “Most Loved Workplace” by Newsweek Industry-leading mini mill performa
Slide 7: Well positioned for strategy execution
WELL POSITIONED FOR STRATEGY EXECUTION INCREASING FUTURE EARNINGS POWER BALANCED CAPITAL ALLOCATION 7 7 Fully-funded strategic investments with record cash & liquidity; de-risking strategy execution Executing on strategic projects today with $850M of EBITDA benefits expected by 20261 Advancing towar
Slide 8: Well positioned for strategy execution
8 8 Advancing towards our Best for All future Well positioned for strategy execution ~$3.7B ~$5.0B NGO electrical steel Mini Mill #2 BRS coating line Year-end 2021 Cash & Liquidity Strategic Capex (MM#2 + BRS NGO + BRS Coating) YE 2021 Cash YE 2021 Credit facilities Fully-funded strategic projects D
Slide 9: Balanced approach to capital allocation
9 9 Advancing towards our Best for All future Balanced approach to capital allocation INVESTING: Unlocking future earnings power with strategic projects Disciplined and efficient approach to value creation REWARDING: Returning excess capital to stockholders
Slide 10: $850M of EBITDA benefits expected by 2026
Advancing towards our Best for All future $850M of EBITDA benefits expected by 2026 MINI MILL #2 MINI MILL STEELMAKING $650M Run-rate EBITDA by ‘26 NGO STEEL BEST-IN-CLASS FINISHING $140M Run-rate EBITDA by ‘26 COATING LINE BEST-IN-CLASS FINISHING $60M Run-rate EBITDA by ‘26 10 $800M $200M 2022 2023
Slide 11: Balanced approach to capital allocation
11 11 Advancing towards our Best for All future Balanced approach to capital allocation INVESTING: Unlocking future earnings power with strategic projects Disciplined and efficient approach to value creation REWARDING: Returning excess capital to stockholders
Slide 12: Returning excess capital back to stockholders
12 12 Advancing towards our Best for All future Returning excess capital back to stockholders $800M $300M stock buyback (announced Oct. ’21) $500M stock buyback (announced Jan. ’22) ~$200M Completed to date YE 2021 Credit facilities ~$100M Remaining $0.05 per share Quarterly dividend Reinstated $0.0
Slide 13: Disciplined approach to capital allocation
13 13 Advancing towards our Best for All future Disciplined approach to capital allocation MAINTAIN BALANCE SHEET STRENGTH SUPPORT BEST FOR ALL STRATEGY RETURN CAPITAL TO STOCKHOLDERS
Slide 14: Fourth Quarter & Full Year Update
FOURTH QUARTER & FULL YEAR UPDATE
Slide 15: Consecutive years of record safety
Fourth quarter & full year update Consecutive years of record safety 0.14 0.10 0.07 0.06 20202018 2019 2021 BLS - Iron & Steel: 0.70 Benchmark 1 : OSHA Days Away from Work 2 Safety first: Consecutive years of record-setting performance 151 BLS – Iron & Steel 2020 data. 2 Occupational Safety and Heal
Slide 16: Fourth quarter 2021 financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: ($60) $283 $964 $1,543 $1,038 1Q 20214Q 2020 2Q 2021 3Q 2021 4Q 2021 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: ($75) $362 $1,084 $1,831 $1,524 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Segment EBIT1 $ Millions Segment EBIT Ma
Slide 17: Full year 2021 financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: $341 $957 $15 ($920) $3,780 FY 2020FY 2019FY 2017 FY 2018 FY 2021 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: $647 $1,239 $95 ($805) $4,801 FY 2018FY 2017 FY 2019 FY 2020 FY 2021 Segment EBIT1 $ Millions Segment EBIT Margin1:
Slide 18: Flat-rolled EBITDA Bridge
EBITDA Bridge $ Millions, 3Q 2021 vs. 4Q 2021 EBITDA Margin: 3% 23%11% $50 $266 $703 $1,135 $1,017 4Q 2020 1Q 2021 3Q 2021 2Q 2021 4Q 2021 32% $1,135 3Q 2021 $21 Maintenance & Outage Raw Materials ($41) $1,017 Commercial ($39) ($59) Other 4Q 2021 Commercial: The favorable impact is primarily the res
Slide 19: Mini Mill segment EBITDA
Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 4Q 2020 vs. 4Q 2021 Mini Mill segment1 Key statistics EBITDA Bridge $ Millions, 3Q 2021 vs. 4Q 2021 EBITDA bridge not applicable for Mini Mill segment $464 $407 Commercial3Q 2021 $6($58) ($5) Raw Materials Maintenance & Outage $
Slide 20: U. S. Steel Europe segment EBITDA
Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 4Q 2020 vs. 4Q 2021 $293 $464 4Q 2020 $61 Raw Materials Commercial ($168) ($41)($23) Maintenance & Outage Other 4Q 2021 Other: The unfavorable impact is primarily the result of increased energy costs and increased variable compe
Slide 21: Tubular EBITDA Bridge
EBITDA Bridge $ Millions, 4Q 2020 vs. 4Q 2021 ($21) $42 $111 4Q 2020 Maintenance & Outage ($17) Commercial Raw Materials ($9) ($22) Other 4Q 2021 Commercial: The favorable impact is primarily the result of higher average realized prices and increased volumes, partially offset by increased levels of
Slide 22: Utilization rates impacted by planned outages
Fourth quarter 2021 update Utilization rates impacted by planned outages ~79% Adjusted Raw Steel Utilization NA Flat-rolled segment Adjusted for Gary Works #6 blast furnace planned outage and idled Granite City / Great Lakes capacity U. S. Steel Europe segment ~100% Adjusted Raw Steel Utilization Ad
Slide 23: Contract / spot mix by segment
48% 52% Firm (24%) Cost based (5%) Market based quarterly (27%) Market based monthly (17%) Spot (27%) Firm (14%) Cost based (12%) Market based quarterly (4%) Market based monthly (52%) Spot (18%) Firm (36%) Cost based (2%) Market based quarterly (2%) Market based monthly (9%) Spot (51%) Program (48%
Slide 24: 2022 outlook
Flat-rolled Segment Estimated 3rd Party Shipment Volumes Operating Metrics 9.0 – 9.5 Mini Mill Segment Estimated 3rd Party Shipment Volumes 2.2 – 2.4 U. S. Steel Europe Segment Estimated 3rd Party Shipment Volumes 4.1 – 4.3 Pension and Other Benefits Cash Payments $119 Cash Interest Expense $225 Cas
Slide 25: Global operating footprint
Operating Indefinitely Idled N o rt h A m e ri c a n F la t- ro ll e d T u b u la r E u ro p e MinntacIron ore pellets Keetac – 22.4 Cokemaking Clairton – 4.3 Gary BF #4 BF #6 BF #8 BF #14 – 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Great Lakes2 – – Mon Valley BF #1 BF #3 – 2.9 Košice BF #3BF #2BF #1 –
Slide 26: Cash and liquidity
Cash and liquidity $826 $938 $682 $138 $4,090 YE 2018YE 2017 YE 2019 YE 2020 YE 2021 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,553 $1,000 $749 $1,985 $2,522 YE 2018YE 2017 YE 2019 YE 2021YE 2020 $3,350 $2,830 $2,2
Slide 27: Appendix
APPENDIX
Slide 28: Additional Big River Steel summary data
Additional Big River Steel summary data In c o m e S ta te m e n t B a la n c e S h e e t C a s h F lo w Customer Sales 4Q 2021 Intersegment Sales Net Sales EBIT1 $850M $148M $998M $366M Total Assets $4,715M Depreciation and Amortization Capital Expenditures $41M $85M 2029 senior secured notes $720M
Slide 29: Segment EBITDA reconciliation
Flat-rolled ($ millions) 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2020 FY 2021 Segment (loss) earnings before interest and income taxes ($73) $146 $579 $1,015 $890 ($596) $2,630 Depreciation 123 120 124 120 127 496 491 Flat-rolled Segment EBITDA $50 $266 $703 $1,135 $1,017 ($100) $3,121 U. S. Stee
Slide 30: Reconciliation of net debt
Net Debt ($ millions) YE 2017 YE 2018 YE 2019 YE 2020 YE 2021 Short-term debt and current maturities of long-term debt $3 $65 $14 $192 $28 Long-term debt, less unamortized discount and debt issuance costs 2,700 2,316 3,627 4,695 3,863 Total Debt $2,703 $2,381 $3,641 $4,887 $3,891 Less: Cash and cash
Slide 31: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2020 FY 2021 Reported net (loss) earnings attributable to U. S. Steel $49 $91 $1,012 $2,002 $1,069 ($1,165) $4,174 Debt extinguishment 18 255 ─ 26 10 18 291 Asset impairment charges ─ ─ 28 ─
Slide 32: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2020 FY 2021 Reported net (loss) earnings attributable to U. S. Steel $49 $91 $1,012 $2,002 $1,069 ($1,165) $4,174 Income tax provision (benefit) (94) 1 (37) 260 (54) (142) 170 Net interest and other financial
Slide 33: Investor Relations
INVESTOR RELATIONS Kevin Lewis Vice President 412-433-6935 klewis@uss.com Eric Linn Director 412-433-2385 eplinn@uss.com www.ussteel.com