United States Steel Corporation · NYSE:X
United States Steel — FY2019 Earnings Presentation
31 slides from United States Steel's earnings presentation, Jan 31, 2020
Slide 1: Fourth Quarter & Full Year 2019 Earnings Presentation
Fourth Quarter & Full Year 2019 Earnings Presentation January 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 fourth quarter and full year of 2019. They should be read in conjunction with the consolidated financ
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: Safety Performance Significantly Better than Industry Benchmarks
Safety Performance Significantly Better than Industry Benchmarks Days Away from Work1 Benchmarks2: BLS - Iron & Steel: 0.70 AISI: 0.31 0.17 0.14 0.10 2017 2018 2019 Leadership Organizational Shared Employee Engagement Culture Responsibility 1 Days Away from Work is defined as number of days away cas
Slide 5: Significant Actions Taken in 2019 to Support Strategy Execution
Significant Actions Taken in 2019 to Support Strategy Execution ✓ Set all-time best safety records ✓ Strengthened customer relationships ✓ Announced significant investments in “best of both” technology ✓ Raised $1.1 billion to support nimble execution ✓ Reduced fixed costs ✓ Announced GHG1 emissions
Slide 6: Fourth Quarter & Full Year Update
FOURTH QUARTER & FULL YEAR UPDATE
Slide 7: Fourth Quarter 2019 Financial Highlights
Fourth Quarter 2019 Financial Highlights Reported Net Earnings (Loss) $ Millions Adjusted Net Earnings (Loss) $ Millions $592 $324 $54 $68 $81 $78 ($84) ($35) ($680) ($109) 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 Adjusted Profit 16% 2% 2% (3%) (24%) Profit 9%
Slide 8: Full Year 2019 Financial Highlights
Full Year 2019 Financial Highlights Reported Net Earnings (Loss) $ Millions Adjusted Net Earnings (Loss) $ Millions $1,115 $957 $387 $341 $15 ($440) ($642) ($1,642) ($262) ($250) FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Adjusted Profit (14%) (4%) 3% 8% (5%) Pro
Slide 9: Flat-rolled Segment
Flat-rolled Segment Key Segment Statistics Select End – Market Indicators1 4Q 1Q 2Q 3Q 4Q FY FY Automotive 2018 2019 2019 2019 2019 2018 2019 2019 SAAR2 of 16.97 million sales likely impacted by GM Shipments: 2,733 2,725 2,804 2,654 2,517 10,510 10,700 strike. A low 57 days inventory to begin 2020 h
Slide 10: U. S. Steel Europe Segment
U. S. Steel Europe Segment Key Segment Statistics Select End – Market Indicators1 4Q 1Q 2Q 3Q 4Q FY FY Automotive 2018 2019 2019 2019 2019 2018 2019 EU car production decreased 4.7% y-o-y in 2019 to 17.6 Shipments: 1,073 1,064 1,004 765 757 4,457 3,590 million units; a 0.9% decrease y-o-y is project
Slide 11: Tubular Segment
Tubular Segment Key Segment Statistics Select End – Market Indicators1 4Q 1Q 2Q 3Q 4Q FY FY Oil Prices 2018 2019 2019 2019 2019 2018 2019 West Texas Intermediate Oil Price at ~$53/barrel, down Shipments: 216 207 195 174 193 780 769 ~13% since the end of 2019. in 000s, net tons Imports Imports of OCT
Slide 12: Reporting Big River Steel's Financial Impact
Reporting Big River Steel’s Financial Impact Where What ▪ Big River’s net income will be ▪ U. S. Steel’s 49.9% stake in Big reported in our: River’s net income ➢ “Other Businesses” EBITDA1 ▪ Our share of Big River’s net income (segment level) is booked on a one-month lag ➢ “Earnings from investees”
Slide 13: Fourth Quarter Segment EBITDA Bridges 4Q 2018 vs 4Q 2019
Fourth Quarter Segment EBITDA Bridges 4Q 2018 vs 4Q 2019 Flat-rolled $ Millions Commercial: The unfavorable impact is primarily the result of lower average realized prices. $426 Raw Materials: The favorable impact is primarily the result of $14 $44 lower costs for purchased scrap. $42 ($412) ($30) M
Slide 14: Full Year Segment EBITDA Bridges
Full Year Segment EBITDA Bridges Full Year 2018 vs Full Year 2019 Flat-rolled $ Millions Commercial: The unfavorable impact is primarily the result of lower average realized prices. $145 Raw Materials: The unfavorable impact is primarily the result of $1,250 ($570) ($65) higher costs for coal and pu
Slide 15: Cash and Liquidity
Cash and Liquidity Cash from Operations $ Millions Cash and Cash Equivalents $ Millions $938 $1,515 $1,553 $826 $754 $682 $1,000 $755 $749 $360 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 YE 2015 YE 2016 YE 2017 YE 2018 YE 2019 Total Estimated Liquidity $ Millions Net Debt $ Millions $3,350 $2,892 $2,89
Slide 16: Strategy Execution Update
STRATEGY EXECUTION UPDATE
Slide 17: Executing on Our Strategic Framework
Executing on Our Strategic Framework 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 through cycle cash 5 1 flow Financial As-Is
Slide 18: Building on Our Strategic Progress in 2019
Building on Our Strategic Progress in 2019 February Tubular EAF Restart Strategic 2019 Announcement Projects May Endless Casting Strategic 2019 & Rolling Announcement Projects October Big River Steel Portfolio Operating Enhanced October 2019 Minority Acquisition Moves Improvements Operating Model 20
Slide 19: An Update on our #1 Strategic Priority: Big River Steel
An Update on our #1 Strategic Priority Portfolio Moves … Big River Steel ✓ Record safety performance ✓ Working together on product development opportunities1 ✓ Phase II-A expansion progressing ahead of schedule and on budget ➢ First coil expected in 4Q 2020 Bringing together the “best of both” integ
Slide 20: Strategy Brings Together the "Best of Both"
Strategy Brings Together the To Be “Best of Both” ✓ World competitive positioning in strategic, high-margin end markets ✓ Unparalleled product platform to serve customers 1 ✓ Big River will unlock value across our entire footprint Transforms business to drive long term cash flow through industry cyc
Slide 21: 2020 Outlook
2020 OUTLOOK
Slide 22: Current 2020 Full Year Projections
Current 2020 Full Year Projections Flat-rolled Segment Estimated 3rd Party Shipment Volumes 10.0 million tons Operating U. S. Steel Europe Segment Estimated 3rd Party Shipment Volumes 3.2 million tons Metrics Tubular Segment Estimated Shipment Volumes 0.9 million tons Depreciation, Depletion, and Am
Slide 23: Appendix
APPENDIX
Slide 24: Fourth Quarter Segment EBITDA Bridges 3Q 2019 vs 4Q 2019
Fourth Quarter Segment EBITDA Bridges 3Q 2019 vs 4Q 2019 Flat-rolled $ Millions Commercial: The unfavorable impact is primarily the result of lower average realized prices. $167 $21 Raw Materials: The favorable impact is primarily the result of ($12) reduced costs for purchased scrap. ($115) ($19) $
Slide 25: Total Corporation Adjusted EBITDA Bridges 4Q
Total Corporation Adjusted EBITDA Bridges 4Q 2018 vs 4Q 2019 $ Millions 4Q 2018 vs 4Q 2019 $ Millions $535 $535 $44 $4 ($384) $13 $4 ($92) ($555) ($33) ($42) ($13) 4Q Commercial Raw Maintenance Other 4Q 4Q Flat- U. S. Steel Tubular Other 4Q 2018 Materials & Outage 2019 2018 rolled Europe 2019 3Q 201
Slide 26: Total Corporation Adjusted EBITDA Bridges FY
Total Corporation Adjusted EBITDA Bridges FY 2018 vs FY 2019 $ Millions FY 2018 vs FY 2019 $ Millions ($598) $1,760 ($831) $1,760 ($99) ($131) $12 ($411) ($10) ($30) $711 $711 FY Commercial Raw Maintenance Other FY FY Flat- U. S. Steel Tubular Other FY 2018 Materials & Outage 2019 2018 rolled Europe
Slide 27: Reconciliation of Segment EBITDA
Reconciliation of Segment EBITDA Segment EBITDA – Flat-rolled 4Q 1Q 2Q 3Q 4Q FY FY ($ millions) 2018 2019 2019 2019 2019 2018 2019 Segment earnings before interest and income taxes $328 $95 $134 $46 ($79) $883 $196 Depreciation 98 104 110 121 121 367 456 Flat-rolled Segment EBITDA $426 $199 $244 $16
Slide 28: Reconciliation of Net Debt
Reconciliation of Net Debt Net Debt YE YE YE YE YE ($ millions) 2015 2016 2017 2018 2019 Short-term debt and current maturities of long- $45 $50 $3 $65 $14 term debt Long-term debt, less unamortized discount and 3,093 2,981 2,700 2,316 3,627 debt issuance costs Total Debt $3,138 $3,031 $2,703 $2,381
Slide 29: Reconciliation of Reported and Adjusted Net Earnings
Reconciliation of Reported and Adjusted Net Earnings ($ millions) 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 FY 2018 FY 2019 Reported net earnings (loss) attributable to U. S. Steel $592 $54 $68 ($84) ($680) $1,115 ($642) December 24, 2018 Clairton coke making facility fire ─ 27 10 7 (3) ─ 41 Restructu
Slide 30: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ millions) 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 FY 2018 FY 2019 Reported net earnings (loss) attributable to U. S. Steel $592 $54 $68 ($84) ($680) $1,115 ($642) Income tax (benefit) provision (339) 8 (7) (44) 233 (303) 190 Net interest and other financial costs
Slide 31: 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