United States Steel Corporation · NYSE:X
United States Steel — Q3 2014 Earnings Presentation
24 slides from United States Steel's earnings presentation, Oct 29, 2014
Slide 1: Third Quarter 2014 Earnings Conference Call and Webcast
Exhibit 99.1 United States Steel Corporation Third Quarter 2014 Earnings Conference Call and Webcast October 29, 2014 © 2011 United States Steel Corporation
Slide 2: Forward-looking Statements
2 Forward-looking Statements United States Steel Corporation This presentation contains forward-looking statements with respect to market conditions, operating costs, shipments and prices. Factors that could affect market conditions, costs, shipments and prices for both North American and European o
Slide 3: Strong Adjusted Third Quarter 2014 Results
Income from Operations – Reportable Segments and Other Businesses $ Millions Adjusted EBITDA $ Millions Adjusted Diluted EPS $ / Share 3Q 2014 2Q 2014 3Q 2013 3Q 2013 2Q 2014 3Q 2014 Strong operating performance and Carnegie Way progress in the quarter Note: For reconciliation of non-GAAP amounts se
Slide 4: Financial Results – Nine Months Ended 9/30/2014
Income from Operations – Reportable Segments and Other Businesses $ Millions Adjusted EBITDA $ Millions Adjusted Diluted EPS $ / Share 9M 2014 9M 2013 9M 2013 9M 2014 Note: For reconciliation of non-GAAP amounts see Appendix 9M 2013 9M 2014 Financial Results – Nine Months Ended 9/30/2014 4 United St
Slide 5: Strong Cash Flows and Liquidity
Cash from Operations $ Millions 2Q 2014 1Q 2014 4Q 2013 LTM 3Q 2014 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 6: Third Quarter 2014 Flat-rolled Segment
Income from Operations $ Millions Average Realized Prices $ / Ton 3Q 2013 2Q 2014 3Q 2014 Third Quarter 2014 Flat-rolled Segment 3Q 2013 2Q 2014 3Q 2014 Shipments Net tons (Thousands) 3Q 2013 2Q 2014 3Q 2014 Operating income per ton increased $70 from third quarter 2013 Increasing Carnegie Way benef
Slide 7: Third Quarter 2014 Tubular Segment
Income from Operations $ Millions Average Realized Prices $ / Ton 3Q 2014 2Q 2014 3Q 2013 xxx Third Quarter 2014 Tubular Segment 3Q 2014 2Q 2014 3Q 2013 Shipments Net tons (Thousands) 3Q 2014 2Q 2014 3Q 2013 Strong energy tubular market led by onshore horizontal oil drilling 7 United States Steel Co
Slide 8: Third Quarter 2014 Europe Segment
Income from Operations $ Millions Average Realized Prices $ / Ton 3Q 2013 2Q 2014 3Q 2014 Third Quarter 2014 U. S. Steel Europe Segment 3Q 2013 2Q 2014 3Q 2014 Shipments Net tons (Thousands) 3Q 2013 2Q 2014 3Q 2014 Operating income per ton increased $67 from third quarter 2013 Increasing Carnegie Wa
Slide 9: Carnegie Way Delivering Strong Benefits Fast
Carnegie Way Benefits – FY 2014 Impact $ Millions 9 Carnegie Way Delivering Strong Benefits Fast 55% 12% United States Steel Corporation 1 ($25) million represents the portion of U. S. Steel Canada, Inc. (USSC) Carnegie Way benefits previously disclosed for the September 16, 2014 – December 31, 2014
Slide 10: Carnegie Way transformation Strategic Approach
10 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: • Advanced high strength steel • Premium connections • Operational flexibility
Slide 11: Strategic Actions
11 United States Steel Corporation Strategic Actions Recent strategic actions announced • Keetac iron ore expansion project will not be pursued • Development of carbon alloy facilities at Gary Works terminated • U. S. Steel Canada, Inc. filed for protection under the Companies’ Creditors Arrangement
Slide 12: Market Updates
12 United States Steel Corporation Flat-rolled September 2014 U.S. light vehicle sales SAAR was 1 million units higher than September 2013 Recent OEM forecasts reflect improving appliance market in 2014 Construction indices continue to indicate growth in 2014 Service center shipments continue to tre
Slide 13: Fourth Quarter 2014 Outlook
13 United States Steel Corporation Fourth Quarter 2014 Outlook Segment outlook Flat-rolled Operating results expected to decrease significantly, but expected to exceed $100 million Shipments, which no longer include U. S. Steel Canada, Inc., are expected to decline by as much as 10% from the 3.2 mil
Slide 14: Third Quarter 2014 Earnings Conference Call and Webcast Q & A
United States Steel Corporation Third Quarter 2014 Earnings Conference Call and Webcast Q & A October 29, 2014 © 2011 United States Steel Corporation United States Steel Corporation 14
Slide 15: Appendix
© 2011 United States Steel Corporation Appendix 15 United States Steel Corporation
Slide 16: Major industry summary North American Flat-rolled Segment
16 Major industry summary North American Flat-rolled Segment Sources: Wards / Customer Financial Reports / AISI / CMI / Economic Planning Assoc / AHAM / US Census Bureau / AIA / AEM / MSCI Automotive September U.S. light vehicle sales came in at 16.34M units SAAR. While on the lower end of expectati
Slide 17: Market Fundamentals
17 Market Fundamentals Sources: Baker Hughes, Energy Information Administration, Preston Publishing, Raymond James, Internal Oil Directed Rig Count The oil directed rig count averaged 1,577 during 3Q, an increase of 3% over 2Q. There are currently 1,595 active oil rigs. Gas Directed Rig Count The na
Slide 18: Major industry summary Europe
18 Major industry summary Sources: Eurofer, USSK Marketing, EASSC, LMC, Euroconstruct, ESTA, ACEA United States Steel Corporation Automotive In 4Q 2014, EU 28 car production is expected to amount to 4.1 million units, an increase of 1.3% y-o- y. Total EU 2014 car production is forecasted to grow by
Slide 19: Commercial – Contract vs. Spot
U. S. Steel Commercial – Contract vs. Spot Contract vs spot mix by segment – twelve months ended September 30, 2014 Firm 28% Market Based Quarterly * 20% Flat-rolled ** Market Based Monthly * 10% Tubular U. S. Steel Europe Spot 31% Cost Based 11% Contract: 69% Spot: 31% Firm 38% Market Based Quarter
Slide 20: Other Items
20 United States Steel Corporation Other Items Capital Spending Third quarter actual $96 million, 2014 estimate $500 million Depreciation, Depletion and Amortization Third quarter actual $158 million, 2014 estimate $628 million Pension and Other Benefits Costs Third quarter actual $85 million, 2014
Slide 21: Global Safety Performance
21 Days Away From Work Injury Rate (Frequency Rates per 200,000 Hours Worked) Global Safety Performance Safety Performance United States Steel Corporation
Slide 22: Reconciliation of reported and adjusted net income
22 United States Steel Corporation Adjusted Results ($ millions) 9M 2014 3Q 2014 2Q 2014 9M 2013 3Q 2013 Reported net income (loss) ($173) ($207) ($18) ($1,942) ($1,791) Loss on deconsolidation of U. S. Steel Canada and other charges $384 384 ─ ─ ─ Impairment of carbon alloy facilities at Gary Works
Slide 23: Reconciliation of reported and adjusted EPS
23 United States Steel Corporation Adjusted Results ($ per share) 9M 2014 3Q 2014 2Q 2014 9M 2013 3Q 2013 Reported EPS (LPS) ($1.19) ($1.42) ($0.12) ($13.44) ($12.38) Loss on deconsolidation of U. S. Steel Canada and other charges 2.54 2.54 ─ ─ ─ Impairment of carbon alloy facilities at Gary Works 1
Slide 24: Reconciliation of adjusted EBITDA
24 United States Steel Corporation Adjusted Results ($ millions) 9M 2014 3Q 2014 2Q 2014 9M 2013 3Q 2013 Reported (loss) income from operations $16 ($141) $35 ($1,671) ($1,702) Depreciation expense 489 158 165 514 173 EBITDA 505 17 200 (1,157) (1,529) Restructuring and other charges 236 236 ─ ─ ─ Lo