United States Steel Corporation · NYSE:X
United States Steel — Q2 2015 Earnings Presentation
24 slides from United States Steel's earnings presentation, Jul 29, 2015
Slide 1: Second Quarter 2015 Earnings Conference Call and Webcast
United States Steel Corporation Second Quarter 2015 Earnings Conference Call and Webcast July 29, 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: Second Quarter 2015 Results
Segment EBIT $ Millions Adjusted EBITDA $ Millions Adjusted Diluted EPS $ / Share 2Q 2015 4Q 2014 3Q 2014 3Q 2014 4Q 2014 1Q 2015 Note: For reconciliation of non-GAAP amounts see Appendix 4Q 2014 3Q 2014 1Q 2015 Second Quarter 2015 Results 3 United States Steel Corporation Adjusted Net Income $ Mill
Slide 4: Strong Cash Position and Liquidity
Cash from Operations $ Millions 1Q 2015 4Q 2014 3Q 2014 LTM 2Q 2015 Note: Cash from operations in 3Q 2014 includes a reduction in cash of $80 million from the deconsolidation of U. S. Steel Canada, Inc., a voluntary pension contribution of $140 million and a litigation settlement of $58 million Tota
Slide 5: Second Quarter 2015 Flat-rolled Segment
EBIT $ Millions Average Realized Prices $ / Ton 3Q 2014 4Q 2014 1Q 2015 Second Quarter 2015 Flat-rolled Segment 3Q 2014 4Q 2014 1Q 2015 Shipments Net tons (Thousands) 3Q 2014 4Q 2014 2Q 2015 Aggressive actions to align costs with lower operating levels offset a decrease in average realized selling p
Slide 6: Second Quarter 2015 Tubular Segment
EBIT $ Millions Average Realized Prices $ / Ton 3Q 2014 4Q 2014 1Q 2015 Second Quarter 2015 Tubular Segment 3Q 2014 4Q 2014 1Q 2015 Shipments Net tons (Thousands) 3Q 2014 4Q 2014 1Q 2015 6 United States Steel Corporation EBITDA $ Millions 3Q 2014 4Q 2014 1Q 2015 Elevated imports, inventory levels, a
Slide 7: Second Quarter 2015 U. S. Steel Europe Segment
EBIT $ Millions Average Realized Prices $ / Ton 3Q 2014 4Q 2014 1Q 2015 Second Quarter 2015 U. S. Steel Europe Segment 3Q 2014 4Q 2014 1Q 2015 Shipments Net tons (Thousands) 3Q 2014 4Q 2014 1Q 2015 7 United States Steel Corporation EBITDA $ Millions 3Q 2014 4Q 2014 1Q 2015 Negatively impacted by str
Slide 8: Carnegie Way Continuing to Deliver
Carnegie Way Benefits1 – FY 2015 Impact $ Millions 8 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 9: Carnegie Way Transformation Strategic Approach
9 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 S
Slide 10: Business Update
10 United States Steel Corporation Business Update Short term actions taken are expected to reduce costs in the last two quarters of 2015 by at least $175 million Operating updates • Steelmaking facilities • Flat-rolled finishing facilities • Tubular facilities Strategic initiatives • Commercial ent
Slide 11: Market Updates
11 United States Steel Corporation Flat-rolled May and June are first back-to- back months with auto sales levels over 17 million SAAR since 2006 May construction spend is the highest since October 2008 June Architectural Billing Index rose 7% over May; all US regions grew Service center carbon flat
Slide 12: 2015 Outlook
12 United States Steel Corporation 2015 Outlook 2015 Adjusted EBITDA Guidance $0.7 to $0.9 billion Improved tailwinds now offsetting headwinds Headwinds Spot and Index prices remain low Imports remain at historically high levels Rig counts remain at very low levels U.S. dollar strength continues Sup
Slide 13: Q & A
United States Steel Corporation Second Quarter 2015 Earnings Conference Call and Webcast Q & A July 29, 2015 © 2011 United States Steel Corporation United States Steel Corporation 13
Slide 14: Appendix
© 2011 United States Steel Corporation Appendix 14 United States Steel Corporation
Slide 15: Major end-markets summary North American Flat-rolled Segment
15 Major end-markets summary North American Flat-rolled Segment Automotive June sales met expectations at 17.1 million SAAR; inventories in line at 60 days. May and June are first back-to-back months with levels over 17 million since 2006. 3Q build schedule does not decline as much as typical years;
Slide 16: Market industry summary Tubular Segment
16 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 682 during 2Q, a decrease of 37% q-o-q. There are currently 659 active oil r
Slide 17: Major end-markets summary U. S. Steel Europe
17 Major end-markets summary United States Steel Corporation Automotive In 3Q, EU car production is expected to amount to 4.1 million units, an increase of 8% y-o-y. In 2015, total EU car production is forecasted to grow by 4% to roughly 17.5 million units. V4 car production is anticipated to increa
Slide 18: U. S. Steel Commercial – Contract vs. Spot
U. S. Steel Commercial – Contract vs. Spot Contract vs. spot mix by segment – twelve months ended June 30, 2015 Firm 31% Market Based Quarterly * 18% Flat-rolled ** Market Based Monthly * 12% Tubular U. S. Steel Europe Spot 29% Cost Based 9% Contract: 71% Spot: 29% Firm 38% Market Based Quarterly* 1
Slide 19: Other Items
19 United States Steel Corporation Other Items Capital Spending Second quarter actual $104 million, 2015 estimate $500 million Depreciation, Depletion and Amortization Second quarter actual $138 million, 2015 estimate $565 million Pension and Other Benefits Costs Second quarter actual $60 million, 2
Slide 20: Safety Performance Rates
20 Global OSHA Recordable Incidence Rates January 2010 through June 2015 United States Steel Corporation Safety Performance Rates Frequency of Injuries (per 200,000 manhours) Data for 2010 forward includes Lone Star Tubular Operations, Bellville Tubular Operations, Rig Site Services, Tubular Process
Slide 21: Adjusted Results ($ millions)
21 United States Steel Corporation Adjusted Results ($ millions) LTM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 Reported net earnings (loss) ($268) ($261) ($75) $275 ($207) Loss on shutdown of coke production facilities 65 ─ 65 ─ ─ Loss on write-down of retained interest in U. S. Steel Canada 136 136 ─ ─ ─ Los
Slide 22: Adjusted Results ($ per share)
22 United States Steel Corporation Adjusted Results ($ per share) LTM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 Reported diluted EPS (LPS) ($1.90) ($1.79) ($0.52) $1.83 ($1.42) Loss on shutdown of coke production facilities 0.45 ─ 0.45 ─ ─ Loss on write-down of retained interest in U. S. Steel Canada 0.93 0.9
Slide 23: Reconciliation of adjusted EBITDA
23 United States Steel Corporation Adjusted Results ($ millions) LTM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 Reported (loss) earnings before interest and income taxes (EBIT) ($323) ($392) ($187) $397 ($141) Depreciation expense 578 138 144 138 158 EBITDA 255 (254) (43) 535 17 Loss on shutdown of coke produc
Slide 24: Adjusted Results Net Debt
24 United States Steel Corporation Adjusted Results Net Debt ($ millions) 2Q 2015 1Q 2015 4Q 2014 3Q 2014 Short-term debt and current maturities of long-term debt $362 $378 $378 $336 Long-term debt, less unamortized discount 3,124 3,124 3,120 3,162 Total Debt $3,486 $3,502 $3,498 $3,498 Less: Cash a