United States Steel Corporation · NYSE:X
United States Steel — Q2 2019 Earnings Presentation
20 slides from United States Steel's earnings presentation, Aug 2, 2019
Slide 1: Second Quarter 2019 Earnings Call
Second Quarter 2019 Earnings Call David Burritt President and Chief Executive Officer Kevin Bradley Executive Vice President and Chief Financial Officer Kevin Lewis General Manager, Investor Relations August 2, 2019 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 second 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: Today's Highlights
Today’s Highlights Second Quarter 2019 Results Execution Update . 2Q adjusted EBITDA: $278 million . Completed important planned outages … on time and on . Flat-rolled: strong execution in the budget face of logistic challenges; temporarily idled blast furnace . Advanced strategic projects ... capac
Slide 5: Three Elements of Execution
Three Elements of Execution 1 Improve Reliability Improvements in 2 reliability to generate Execute Planned Outages throughput and efficiency benefits Strong execution positions us to extract value from investments 3 Reduce Capital Intensity Post investment horizon … optimization of sustaining capex
Slide 6: Improvements in reliability to generate throughput and efficiency benefits
Improvements in reliability to generate throughput and efficiency benefits Less Unplanned Downtime on Constrained Assets Reduction in controllable1/2 overhead 1 months Unplanned Downtime in Days increased production Less Unplanned on constrained units Downtime from improved reliability1 Reduction in
Slide 7: Strong execution positions us to extract value from investments at the Mon Valley BOP
Strong execution positions us to extract value from investments at the Mon Valley BOP ̶ 85% of Mon Valley BOP Asset ̶ 200k additional tons on a key Reduction in controllable Reduction in controllable Revitalization work complete constrained asset overhead overhead ̶ Source of high quality, low cost
Slide 8: Strong execution positions us to extract value from investments at the Gary BF #14
Strong execution positions us to extract value from investments at the Gary BF #14 Reduction in controllable Reduction in controllable overhead overhead Pulverized Natural Coal ̶ Suite of initiatives to optimize Gas Injection blast furnace fuel rates at Coke Gary Works ̶ Enabled by investment in fur
Slide 9: Post investment horizon: optimization of sustaining capex and M&O
Post investment horizon … optimization of sustaining capex and M&O Current Investment Mix After Strategic Investments Mix $2.5 Billion $1.9 Billion Sustaining Capex + Maintenance & Outage Expense1 Sustaining Capex + Maintenance & Outage Expense1 35% 30% Sustaining Capital Spending Maintenance & Outa
Slide 10: Executing strategic investments in line with expectations
Executing strategic investments in line with expectations On track At risk Off track Run-Rate Execution Technology Investments Investment EBITDA Status Mon Valley Endless Casting & Rolling $1,200M $275M 1 (2019 – 2022 investment) Tubular EAF $280M $80M 2 (2019 – 2020 investment) USSK Dynamo Line 3 (
Slide 11: Investments in technology generate balanced benefit streams to de-risk value realization
Investments in technology generate balanced benefit streams to de-risk value realization Run Rate EBITDA Contribution from Strategic Projects $ in millions ~$10 ~$30 ~$170 Technology ~$390 Enabled ~$180 Capability Cost Energy Other Exit Enhancement Improvement Efficiencies Rate Mon Valley 1 Endless
Slide 12: Options available to fund our strategic investments
Options available to fund our strategic investments ~$1.6B ~$1.6B 2022 ~$90M High Yield ~$400+M Market (opportunistically) 2021 ~$690M Upsize ~$300M U.S. ABL ~$280M USSK Revolver ~6% expected blended coupon rate2 2020 ~$610M Vendor Supported ~$300M Financing Environmental 2019 ~$220M ~$300M Revenue
Slide 13: Second Quarter 2019 Financial Highlights
Second Quarter 2019 Financial Highlights Flat-rolled Adjusted EBITDA1 $ Millions $244 1 $199 • Total second quarter adjusted EBITDA of $278 million Adjusted 1Q 2019 2Q 2019 1 EBITDA 8% 9% Margin: • Quarter-over-quarter Flat-rolled 1 U. S. Steel Europe Adjusted EBITDA1 $ Millions EBITDA improvement o
Slide 14: Recap
Recap • Strong execution despite continued challenges • Keeping the business nimble • Maintaining focus to execute long-term strategy 14
Slide 15: Q & A
Q & A
Slide 16: Closing Remarks
Closing Remarks
Slide 17: Reconciliation of reported and adjusted diluted EPS
Reconciliation of reported and adjusted diluted EPS ($ / share ) 1Q 2019 2Q 2019 Reported diluted EPS $0.31 $0.39 December 24, 2018 Clairton coke making facility fire 0.16 0.06 Adjusted earnings per diluted share $0.47 $0.45 17
Slide 18: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Segment EBITDA – Flat-rolled 1Q 2019 2Q 2019 ($ millions) Segment earnings before interest and income taxes $95 $134 Depreciation 104 110 Flat-rolled Segment EBITDA $199 $244 Segment EBITDA – U. S. Steel Europe 1Q 2019 2Q 2019 ($ millions) Segment earnings before int
Slide 19: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 1Q 2019 2Q 2019 Reported net earnings attributable to U. S. Steel $54 $68 Income tax provision 8 (7) Net interest and other financial costs 49 54 Reported earnings before interest and income taxes $111 $115 Depreciation, depletion and amortization expen
Slide 20: 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