United States Steel Corporation · NYSE:X
United States Steel — Merger or Acquisition (September 2007)
13 slides from United States Steel's merger presentation, Sep 13, 2007
Slide 1: Strategic Acquisition of Stelco
Exhibit 99.2 Strategic Acquisition of Stelco August 27, 2007 © United States Steel Corporation 2007
Slide 2: Forward-Looking Statements
Forward — Looking Statements Risks and Uncertainties Regarding United States Steel Corporation and Stelco. Some factors, among others, that could affect market conditions, costs, shipments and prices for the domestic and foreign operations of U.S. Steel and Stelco include global product demand, pric
Slide 3: U. S. Steel to Acquire Stelco: Transaction Overview
U. S. Steel to Acquire Stelco Transaction Overview • U. S. Steel acquires Stelco for $1.1 billion (U.S.) or $38.50 (Canadian) per share in an all cash transaction • Majority of approximately $760 million net debt as of 6/30/07 will be retired • Voluntary pension funding of $31 million at closing • F
Slide 4: Business Overview
Business Overview A leading Canadian sheet producer Major supplier of automotive and other value added products Strong raw material position 85% coke self sufficient 90% iron ore self sufficient* Annual raw steel capability of 5.5mm tons Long slab position – approximately 900,000 tons *Includes iron
Slide 5: Stelco – Company Overview
Stelco – Company Overview Raw Steel Capability British Million Net Tons: Columbia Alberta Labrador Hamilton 2.6 Manitoba Lake Erie 2.9 Ontario Saskatchewan Quebec 7/07 Employees 3,600 Hibbing Wabush 2006 Raw Steel Minntac/ Keetac Tilden (Million Net Tons) Hamilton Stelco Integrated Steel Mill 4.2 St
Slide 6: Business Case for Acquisition
Business Case for Acquisition Complementary assets & attributes: Stelco is long slabs, intend to ship approximately 900,000 tons to U.S. Steel facilities Improve U. S. Steel’s finishing facility utilization Strong product mix Creates 5th largest global steel company Annual synergies estimated to be
Slide 7: U. S. Steel and Stelco Favorable Product Mix
U. S. Steel and Stelco Favorable Product Mix U. S. Steel* (14.2 mm tons) Stelco** (3.5 mm tons) Conversion 26% Service Center 14% Conversion 16% Service Center Automotive 18% 23% Construction 32% All other 7% Construction 9% Appliance 3% Appliance 8% Containers 9% Automotive 38% * Flat-Rolled segmen
Slide 8: Financial Overview
Financial Overview $ millions 2006 2006 2Q’07 U. S. Steel Stelco Stelco Tons Shipped 21.6 million 3.5 million 1.1 million Sales $15,715 $2,365* $677* Operating Income $1,785 ($126)* $24* EBITDA** $2,226 ($19)* $50* Source: Company filings * Converted from Canadian dollars using .9443 ** EBITDA and O
Slide 9: Reconciliation to GAAP
Reconciliation to GAAP $ millions 2006 2006 2Q’07 U. S. Steel Stelco Stelco Net income (loss) $1,374 ($305) ($39) Income tax provision 324 7 21 Net interest & other financial costs 62 65 26 Impairment charges & reorg. items - 20 36 Discontinued operations - 41 - Other * 25 46 (20) Operating Income 1
Slide 10: Stelco's Improvement plan
Stelco’s Improvement plan Workforce reduction 29% from 1/1/06 • Facility utilization and productivity improvements • Reduced contractors and outside processing • Modified benefits and benefit administration • Reduced fixed costs: property tax, IT, legal, insurance • Closing obsolete facilities – Ham
Slide 11: U. S. Steel & Stelco Acquisition: Key changes since January 2005
U. S. Steel & Stelco Acquisition Key changes since January 2005 Stelco – Significant CAPEX Plan – Now Realized Lake Erie Hot Strip Mill Upgraded Hamilton Blast Furnace major work completed Stelco Labor Reductions attained – via Restructuring Divested mini-mill and other assets Negotiated work practi
Slide 12: U. S. Steel and Stelco Transaction Summary
U. S. Steel and Stelco Transaction Summary Strengthens our position as a leading North American Flat-Rolled producer • Expands U. S. Steel’s supply chain across a larger geographic area • Leverages U. S. Steel’s production platform to drive operating performance Financially attractive: • Potential a
Slide 13: Strategic Acquisition of Stelco
Strategic Acquisition of Stelco August 27, 2007 © United States Steel Corporation 2007
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