United States Steel Corporation · NYSE:X
United States Steel — Investor Day (June 2012)
145 slides from United States Steel's investor day presentation, Jun 6, 2012
Slide 1: ©2012
©2012 United States Steel Corporation
Slide 2: Forward-looking Statements
Forward-looking Statements These presentations contain forward -looking statements with respect to market conditions, operating costs, shipments, prices, capital spending, and employee benefit costs and payments. Although we believe that we are experiencing a gradual economic recovery, there are sig
Slide 3: Opening Remarks
Opening Remarks June 6, 2012 John P. Surma Chairman and Chief Executive Officer ©2012 United States Steel Corporation
Slide 4: North American Growth
North American Growth 2002 2 United States Steel Corporation . . Hibbing Minntac / Keetac Tilden Great Lakes Hamilton Lake Erie Mon Valley Gary Granite City Fairfield . . . Gary Mon Valley Fairfield Minntac . . . Lorain 2012 . . . . . . . . . . . . . . Lorain Bellville Operations Texas Operations Mc
Slide 5: Global safety performance 2005 to May 2012
Global safety performance -2005 to May 2012 U. S. Steel Safety Performance 1.57 1.10 0.98 0.90 0.91 0.88 0.84 0.90 0.00 0.50 1.00 1.50 2.00 2005 2006 2007 2008 2009 2010 2011 2012 OSHA Recordable Rate 43% Improvement 2005 to May 2012 Days Away from Work Rate 77% Improvement 2005 to May 2012 0.35 0.2
Slide 6: Global Leader in a Growing Industry
4 United States Steel Corporation Global Leader in a Growing Industry Source: WSA April 2012, SRO 1950-1971 1971-1992 1992-2013 CAGR: 5.6% CAGR: 0.9% CAGR: 4.0% World steel demand (mm tonnes)
Slide 7: U.S. Finished Steel Demand and Net Imports
U.S. Finished Steel Demand and Net Imports Sources: AISI Annual Statistical Review A recovery in progress ‘96 –‘08 Average 5 United States Steel Corporation
Slide 8: Experienced and committed leadership
United States Steel Corporation Experienced and committed leadership Proven track record across a broad range of industry and market conditions Average U. S. Steel experience of more than 22 years Average steel industry experience of more than 28 years 6 United States Steel Corporation
Slide 9: Leverage our assets to competitively priced natural gas
United States Steel Corporation Leverage our assets to competitively priced natural gas 7 United States Steel Corporation
Slide 10: U. S. Steel Research and Development
U. S. Steel Research and Development Customer support, technical expertise and product innovation 8 United States Steel Corporation
Slide 11: United States Steel Corporation 9
United States Steel Corporation 9
Slide 12: Opening Remarks
Opening Remarks June 6, 2012 John P. Surma Chairman and Chief Executive Officer ©2012 United States Steel Corporation
Slide 13: Strength & Opportunity in North American Flat-Rolled
©2012 United States Steel Corporation Strength & Opportunity in North American Flat-Rolled June 6, 2012 Michael S. Williams Senior Vice President North American Flat-Rolled Operations
Slide 14: North American Flat-Rolled Overview
North American Flat-Rolled Overview 2011 Trade Sales $12.4 billion USD Annual Raw Steel Capacity of 24.3 million tons Vertically Integrated -Iron Ore Mines to Automotive quality and Tin coating lines 7 Steelmaking facilities 15 directly owned or Joint Venture finishing facilities Diverse product off
Slide 15: North American Flat-Rolled Operations Facilities
3 United States Steel Corporation Plant Raw Steel Capacity (million net tons) Gary 7.5 Mon Valley 2.9 Fairfield 2.4 Great Lakes 3.8 Granite City 2.8 Lake Erie 2.6 Hamilton 2.3 TOTAL 24.3 Iron Ore Pelletizing Capacity 25 million tons North American Flat-RolledOperations Facilities Operations Joint Ve
Slide 16: North American Flat-Rolled: Operational Performance
North American Flat-Rolled: Operational Performance NAFR Quarterly Shipments (000 tons) ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 Raw Steel Production (million net tons) 17.3 15.3 16.4 16.8 19.2 11.7 18.4 18.6 % Raw Steel Utilization 89% 79% 84% 83% 79% 48% 76% 77% Annual Capacity (million net tons)* 19.4 19.
Slide 17: Contract vs. Spot Mix and Import Trends
North American Flat-Rolled: Contract vs. Spot Mix Firm 17% Market Based Quarterly 20% Market Based Monthly 18% Spot 33% Cost Based 11% Market Based Semi-annual 1% Firm 17% Market Based Quarterly 19% Market Based Monthly 18% Spot 30% Cost Based 15% Market Based Semi-annual 1% U.S. flat-rolled import
Slide 18: NAFTA Apparent Steel Demand
NAFTA Apparent Steel Demand Source: Worldsteel SRO April 2012 Million Metric Tons NAFTA Market 2012 NAFTA 2013 Demand to increase 6.5 million MT USA Mexico Canada Automotive Appliance Pipe & Tube Tin 6 United States Steel Corporation 2000 –2007 Average = 142.5 134.3 137.5 131.3 150.8 141.7 130.5 111
Slide 19: Higher steel prices needed to cover higher raw material costs
Sources: McKinsey, World Steel Dynamics Higher steel prices needed to cover higher raw material costs 81% 78% 61% 29% 11% 7% 22% 32% 8% 15% 17% 39% '95 '00 '05 '10 Steel Making Coking Coal Iron Ore (1) Flat steel assumed to represent 70% of the overall iron ore/met coal demand (the other 30% being l
Slide 20: Strategic Investment: Clairton C Battery Project
Photo or graphic here (96 dpi, 4.75 in. x 7 in.) Install a new 6- meter, 84-oven coke battery, expected annual coke production capacity of 960,000 tons Project Status Construction began March 2010 Coke production scheduled to begin late 2012 Strategic Investment: Clairton C Battery Project 8 United
Slide 21: Strategic Investment: Gary Works Carbon Alloy Project
Photo or graphic here (96 dpi, 4.75 in. x 7 in.) Install two 250,000 tons/yr. Carbon Alloy Synthesis Process (CASP) Modules, expected to produce 500,000 tons/yr. of Cokonyx TM (blast furnace lump coke substitute) Project Status Construction began August 2010 Start-up planned 2012 Strategic Investmen
Slide 22: Coke Rate vs. Natural Gas Injection
Coke Rate vs. Natural Gas Injection *Assumes Coke at $450 per ton. Injection Coal at $150 per ton, Natural Gas at $4 per mmbtu, and 100 pound reduction in Coke used per ton of hot metal $15.25 Blast furnace fuel cost per ton of hot metal* Natural Gas Price NYMEX $/MMBTU 10 United States Steel Corpor
Slide 23: Strength and Opportunity in Automotive
Strong growth market Strategic focus Positioned to support all NAFTA automotive OEMs on all major flat-rolled product lines North American Automotive Production and Sales Source: Wards North American Automotive Production (million units) U. S. Steel NAFR Automotive Shipments (1) (million tons) 11 Un
Slide 24: Strategic Investment: PRO-TEC JV Continuous Annealing Line
500,000 tons/yr production capacity Steel Products Mild steels High Strength Steels Advanced High Strength Steels Ultra High Strength Steels (up to 1500 MPa) Generation 3 Steels (in development) Project Status Construction began March 2011 Start-up planned Q1 2013 Strategic Investment: PRO-TEC JV Co
Slide 25: North American Flat-Rolled Summary
North American Flat-Rolled Summary 2nd largest North American flat-rolled producer Leading producer of quality flat-rolled products Strong raw materials position and getting stronger Strategic investments to achieve balanced coke position Leveraging affordable NG to improve cost competitiveness Lead
Slide 26: Strength & Opportunity in North American Flat-Rolled
©2012 United States Steel Corporation Strength & Opportunity in North American Flat-Rolled June 6, 2012 Michael S. Williams Senior Vice President North American Flat-Rolled Operations
Slide 27: U. S Steel and the Automotive Industry
U. S Steel and the Automotive Industry June 6, 2012 Bert Philips General Manager -Automotive ©2012 United States Steel Corporation
Slide 28: Topics
Caption, image or bullet points here (Arial Bold Italic, 18pt, Dark Blue) Topics •Automotive Market and Strategy •Automotive Center Overview •Steel –the Automotive material of choice •Life Cycle Assessment –Steel versus alternative materials •Advanced High Strength Steels for Automotive 2 United Sta
Slide 29: Automotive Industry
3 NAFTA Production (millions of units) United States Steel Corporation Automotive Industry Industry on a path of recovery to pre-recession levels next year Light Vehicle inventory remains at historic low levels 1.5 million units of new assembly capacity announced or considered (1) (2)(1) (1) (1) (1)
Slide 30: U. S. Steel Automotive Strategies
4 U. S. Steel Automotive Strategies Create long term strategic relationships Develop products to help our customers meet increasingly stringent safety and fuel efficiency requirements Create Value-Added opportunities Maintain steel’s position as the safe, affordable and sustainable automotive materi
Slide 31: U. S. Steel Automotive Center
5 U. S. Steel Automotive Center United States Steel Corporation
Slide 32: What is the automotive material of choice?
6 October 1953 CARS Magazine “The day of the passenger car made primarily of iron and steel is on the wane”giving ground to aluminum, magnesium and plastics. What is the automotive material of choice? United States Steel Corporation
Slide 33: What is the automotive material of choice?
7 October 1953 CARS Magazine “The day of the passenger car made primarily of iron and steel is on the wane”giving ground to aluminum, magnesium and plastics. 1970s–Body-on-Frame Body-Frame-Integral 1990s– Mild Steel High Strength and Bake Hard Steel 1980s–Uncoated Galvanized Rust Resistant 2000s–Mil
Slide 34: Automotive Lightweighting Materials
8 Yield Strength (MPa) Elongation (%) 0 10 20 30 40 50 60 70 0 400 600 1000200 800 1200 1400 1600 1800 8 Automotive LightweightingMaterials United States Steel Corporation Light weighting is a function of: •Strength •Design Flexibility •Density Steel has the advantage in: •Strength •Design Flexibili
Slide 35: Automotive Lightweighting Materials
9 Yield Strength (MPa) Elongation (%) 0 10 20 30 40 50 60 70 0 400 600 1000200 800 1200 1400 1600 1800 9 Automotive LightweightingMaterials United States Steel Corporation Light weighting is a function of: •Strength •Design Flexibility •Density Steel has the advantage in: •Strength •Design Flexibili
Slide 36: Automotive Lightweighting Materials
10 Yield Strength (MPa) Elongation (%) 0 10 20 30 40 50 60 70 0 400 600 1000200 800 1200 1400 1600 1800 10 Automotive LightweightingMaterials United States Steel Corporation Light weighting is a function of: •Strength •Design Flexibility •Density Steel has the advantage in: •Strength •Design Flexibi
Slide 37: Automotive Lightweighting Materials
11 Yield Strength (MPa) Elongation (%) 0 10 20 30 40 50 60 70 0 400 600 1000200 800 1200 1400 1600 1800 11 Automotive LightweightingMaterials United States Steel Corporation Light weighting is a function of: •Strength •Design Flexibility •Density Steel has the advantage in: •Strength •Design Flexibi
Slide 38: Automotive Lightweighting Materials
12 Yield Strength (MPa) Elongation (%) 0 10 20 30 40 50 60 70 0 400 600 1000200 800 1200 1400 1600 1800 12 Automotive LightweightingMaterials United States Steel Corporation Light weighting is a function of: •Strength •Design Flexibility •Density Steel has the advantage in: •Strength •Design Flexibi
Slide 39: Growth of Advanced High Strength Steel
13 Source: Ducker Worldwide Forecast for Advanced High Strength Steel Fastest growing automotive material for the last decade and will continue to be for the next decade Average AHSS content In new models: 2007 = 8.4% 2009 = 13.4% 2010 = 16.1% Growth of AHSS 12 81 108 148 450 2000 2005 2007 2009 202
Slide 40: Automotive Lightweighting Materials: Body Structure Mass
1414 Automotive LightweightingMaterials Body Structure Mass (Actual vs. Regression Analysis Prediction) 100 150 200 250 300 350 400 200 250 300 350 400 Body Structure Mass (Regression Analysis Prediction) Body Structure Mass (Actual) Body Structure Mass (Actual vs. Regression Analysis Prediction) 10
Slide 41: Automotive Lightweighting Materials: Body Structure Mass
1515 Automotive LightweightingMaterials Body Structure Mass (Actual vs. Regression Analysis Prediction) 100 150 200 250 300 350 400 200 250 300 350 400 Body Structure Mass (Regression Analysis Prediction) Body Structure Mass (Actual) Body Structure Mass (Actual vs. Regression Analysis Prediction) 10
Slide 42: Automotive Lightweighting Materials: Body Structure Mass
1616 Automotive LightweightingMaterials Body Structure Mass (Actual vs. Regression Analysis Prediction) 100 150 200 250 300 350 400 200 250 300 350 400 Body Structure Mass (Regression Analysis Prediction) Body Structure Mass (Actual) Body Structure Mass (Actual vs. Regression Analysis Prediction) 10
Slide 43: Automotive Lightweighting Materials: Body Structure Mass
1717 Automotive LightweightingMaterials Body Structure Mass (Actual vs. Regression Analysis Prediction) 100 150 200 250 300 350 400 200 250 300 350 400 Body Structure Mass (Regression Analysis Prediction) Body Structure Mass (Actual) Body Structure Mass (Actual vs. Regression Analysis Prediction) 10
Slide 44: Life Cycle Assessment
1818 Life Cycle Assessment Source: Argonne National Lab, GREET The Vehicle Carbon Footprint The environmental performance of a vehicle is currently measured by fuel economy and tailpipe emissions A more meaningful metric is the vehicle carbon footprint, which includes all phases of a vehicle’s life
Slide 45: Life Cycle Assessment
1919 Life Cycle Assessment Source: Argonne National Lab, GREET The Vehicle Carbon Footprint The environmental performance of a vehicle is currently measured by fuel economy and tailpipe emissions A more meaningful metric is the vehicle carbon footprint, which includes all phases of a vehicle’s life
Slide 46: Life Cycle Assessment
2020 Life Cycle Assessment Source: Argonne National Lab, GREET The Vehicle Carbon Footprint The environmental performance of a vehicle is currently measured by fuel economy and tailpipe emissions A more meaningful metric is the vehicle carbon footprint, which includes all phases of a vehicle’s life
Slide 47: Life Cycle Assessment: Material Production GHG Emissions
21 Life Cycle Assessment Material Production Greenhouse Gas (GHG) Emissions Steel Current Average GHG Emissions Primary Production 2.0 –2.5 GHG from Production (in Lbs CO2e / Lbs of material) Aluminum Magnesium Carbon Fiber 11.2 –12.6 Footnotes: • All steel and aluminum grades included in ranges. •
Slide 48: Comprehensive Strategy
22 Comprehensive Strategy United States Steel Corporation
Slide 49: Comprehensive Strategy: Closures
23 Closures Hot-dip Coated Comprehensive Strategy United States Steel Corporation
Slide 50: Comprehensive Strategy: Body Structure Hot-dip Coated
24 Body Structure Hot-dip Coated High Strength & Advanced High Strength Comprehensive Strategy United States Steel Corporation
Slide 51: Comprehensive Strategy: Body Structure Cold-roll
25 Body Structure Cold-roll CA High Strength & Advanced High Strength Comprehensive Strategy United States Steel Corporation
Slide 52: Comprehensive Strategy: Seat Structure
26 Seat Structure Cold-roll CA High Strength & Advanced High Strength Comprehensive Strategy United States Steel Corporation
Slide 53: Comprehensive Strategy
27 Comprehensive Strategy United States Steel Corporation
Slide 54: U. S Steel and the Automotive Industry
U. S Steel and the Automotive Industry June 6, 2012 Bert Philips General Manager -Automotive ©2012 United States Steel Corporation
Slide 55: Growing with the Automotive Industry
Growing with the Automotive Industry June 6, 2012 Bryan P. Vaughn President -PRO-TEC Coating Company ©2012 United States Steel Corporation
Slide 56: PRO-TEC Coating Company
2 PRO-TEC Coating Company • Leipsic, Ohio • 1,000,000-ton capacity • to meet corrosion-resistant steel demand Joint venture between U. S. Steel and Kobe Steel formed in 1990
Slide 57: Substrate suppliers: Strategic Location
3 Substrate suppliers: Strategic Location Major automotive plants •Gary Works •Mon Valley Works •Great Lakes Works •U. S. Steel Canada PRO-TEC For both suppliers and customers
Slide 58: A Focus on Safety
4 A Focus on Safety Crumple Zones (engine compartment, trunk) deform to absorb energy and control magnitude of deceleration Safety Cage (passenger compartment) resists deformation to prevent intrusion
Slide 59: Insurance Institute for Highway Safety
INSURANCE INSTITUTE FOR HIGHWAY SAFETY
Slide 60: A Focus on Safety
6 A Focus on Safety
Slide 61: Rising Fuel Economy Requirements
7 mpg Rising Fuel Economy Requirements Lighter parts with increased strength result in safer and lighter vehicles
Slide 62: Metallurgy of Advanced High Strength Steel
8 Metallurgy of Advanced High Strength Steel (AHSS) Flexible product line -important to customers
Slide 63: Continuous Annealing Process
9 Continuous Annealing Process Heating, Cooling, Re-heating Highly sophisticated from substrate to end product
Slide 64: Construction of the Continuous Annealing Line
10 Construction of the Continuous Annealing Line
Slide 65: Our Culture
11 Our Culture
Slide 66: Growing with the Automotive Industry
Growing with the Automotive Industry June 6, 2012 Bryan P. Vaughn President -PRO-TEC Coating Company ©2012 United States Steel Corporation
Slide 67: Tubular Focused
Tubular Focused June 6, 2012 Douglas R. Matthews Senior Vice President -Tubular Operations ©2012 United States Steel Corporation
Slide 68: U. S. Steel Tubular Products Overview
•Dynamic U. S. Energy Market •Strengthening Customer Relationships •Well positioned to support the North American energy market •Full Range Product Capability •Advancing Tubular Technology U. S. Steel Tubular Products Overview 2 United States Steel Corporation
Slide 69: U. S. Steel Tubular Products
U. S. Steel Tubular Products Largest Integrated North American Tubular Producer – Substantial raw material self-sufficiency – 2.8 million net tons of raw tube capacity Domestic Capabilities – Seamless Products • 1.9”to 26”Outside Diameter and 0.140”to 2.312”wall thickness – Welded Products • 1.088”t
Slide 70: Product Size Range
1” 5” 10” 15” 20” 26” Texas Operations #2 Bellville Lorain #4 Fairfield McKeesport ERW Seamless >90% of Total U.S. OCTG Demand falls within these sizes. Product Size Range Lorain #3 Texas Operations #1 Source: internal 4 United States Steel Corporation
Slide 71: From the Iron Ore Range to the Well
From the Iron Ore Range to the Well… 5 United States Steel Corporation
Slide 72: North American Operations
Hamilton Works Mon Valley Works Granite City Works Minnesota Ore Operations Gary Works Great Lakes Works Lake Erie Works U. S. Steel Facilities Fairfield Works North American Operations 6 United States Steel Corporation
Slide 73: North American Operations: Tubular Production Facilities
Texas Operations Division Bellville Operations Division Tubular Production Facilities North American Operations 7 United States Steel Corporation Hamilton Works Mon Valley Works Granite City Works Minnesota Ore Operations Gary Works Great Lakes Works Lake Erie Works U. S. Steel Facilities Fairfield
Slide 74: Tubular Production Facilities
Tubular Production Facilities Hamilton Works Mon Valley Works Granite City Works Minnesota Ore Operations Gary Works Great Lakes Works Lake Erie Works U. S. Steel Facilities Fairfield Works North American Operations 8 United States Steel Corporation Wheeling Machine Products Tubular Processing Servi
Slide 75: Tubular Production Facilities and Sales Offices
Tubular Production Facilities Hamilton Works Mon Valley Works Granite City Works Minnesota Ore Operations Gary Works Great Lakes Works Lake Erie Works U. S. Steel Facilities Fairfield Works Wheeling Machine Products Tubular Finishing Facilities Wheeling Machine Products Texas Operations Division Bel
Slide 76: Energy Tubular Market Consumption
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2007 2008 2009 2010 2011 2012 F OCTG Welded Line Seamless Standard & Line Global OCTG Demand by Region Based on % 2011 Tons U.S. Consumption Source: Preston Pipe and Tube –OCTG Consumption / S&L Shipments Spears and Associates –Worldwide OCTG Demand Rep
Slide 77: Increase in U.S. Rig Count Drives OCTG Demand
0 500 1,000 1,500 2,000 2,500 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Oil Gas •Development of domestic energy reserves •Economical shale extraction •Increasing activity in the Gulf of Mexico USA Quarterly Rig Count Source: Baker Hughes Increase in U.S. Rig Count Drives OCTG Demand 11 United States Steel Corpo
Slide 78: Impact of Shale Resource on Well Type
Source: Baker Hughes Highest Since Tracking Began 5/18/12 –1,193 Rig Count Changes by Well Type Vertical Horizontal Directional 26% 59% Impact of Shale Resource on Well Type 12 United States Steel Corporation
Slide 79: USSTP Quarterly Shipments and Proceeds
USSTP Quarterly Shipments and Proceeds $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 200 250 300 350 400 450 500 550 1Q 10 1Q 11 1Q 12 Shipments Price/Ton Tons ‘000 Price/To n Record Shipments 13 United States Steel Corporation
Slide 80: Program Versus Spot Mix
Program Versus Spot Mix for twelve months ended March 31, 2012 0 50 100 150 200 250 1Q 10 1Q 11 1Q 12 USSTP Program Shipments Tons ‘000 *Program Customers: Strategic, Contract Related Relationships 14 United States Steel Corporation
Slide 81: Challenging Requirements for Unconventional Drilling
Alloy/Heat-Treat Grades Premium Connections Technical Support Technology and Product Development Multiple Sizes/Grades in Casing String Supply Chain Flexibility (changes in string design) Challenging Requirements for Unconventional Drilling Short Radius / Kick-off Longer Laterals Extreme Torques, Co
Slide 82: Facility and Product Capability Improvement Projects: Fairfield
Facility and Product Capability Improvement Projects Location Fairfield Tubular Operations Fairfield, Alabama Improvements New Heat-Treat Quench Unit, Cooling Tower & Filtration System, Improved Cycle Times and Threading Capacity 16 United States Steel Corporation
Slide 83: Facility and Product Capability Improvement Projects: Texas
Facility and Product Capability Improvement Projects Location Texas Operations Division Lone Star, Texas Improvements Heat-Treat Upgrades, In-line Straightener Installations, Threading Capacity and In-line Inspection Capability 17 United States Steel Corporation
Slide 84: Facility and Product Capability Improvement Projects: Lorain
Facility and Product Capability Improvement Projects Location Lorain Tubular Operations Lorain, Ohio Improvements New Heat-Treat and Finishing Facility, Threading Capacity 18 United States Steel Corporation
Slide 85: Premium Shipments Up 75% versus Q1 2010
0 300 600 900 1,200 0% 50% 100% 150% 200% 1Q 10 1Q 11 1Q 12 Premium Shipments Horizontal Rig Count Horizontal Rig Count USSTP Premium Shipments Premium Shipments Up 75% versus Q1 2010 Source: Baker Hughes 19 United States Steel Corporation 1Q 2010 = 100%
Slide 86: Tubular Focused
Tubular Focused June 6, 2012 Douglas R. Matthews Senior Vice President -Tubular Operations ©2012 United States Steel Corporation
Slide 87: Customer Driven
Customer Driven June 6, 2012 David L. Britten Vice President Tubular Technology & Business Development ©2012 United States Steel Corporation
Slide 88: Investing in New Tubular Technology
Investing in New Tubular Technology 2 United States Steel Corporation
Slide 89: Customer in Focus
Customer in Focus 3 Customer in Focus Technical Support Manufacturing Field Services Supply Chain Management United States Steel Corporation
Slide 90: Customer in Focus: Technical Support
Field Services Manufacturing Supply Chain Management Technical Support Customer in Focus –Technical Support 4 Customer in Focus Education/Training Materials Selection Technical Information Product Development United States Steel Corporation
Slide 91: Customer in Focus: Supply Chain Management
Field Services Manufacturing Supply Chain Management Technical Support Customer in Focus –Supply Chain Management 5 Yard Storage Inspections Logistics Rig Returns Customer in Focus United States Steel Corporation
Slide 92: Customer in Focus: Manufacturing
Field Services Manufacturing Supply Chain Management Technical Support Customer in Focus -Manufacturing 6 Marker Joints Accessories Licensee Network Premium Connections Customer in Focus United States Steel Corporation
Slide 93: Customer in Focus: Field Services
Field Services Manufacturing Supply Chain Management Technical Support Customer in Focus –Field Services Rig Services Training Customer in Focus 7 United States Steel Corporation
Slide 94: Proprietary Connection Technology
Proprietary Connection Technology USS-CDC TM USS-CDC HTQ TM USS-PATRIOT TC TM 8 United States Steel Corporation
Slide 95: Offshore Capabilities
Offshore Capabilities •New regulations driving complexity •Increased volume of tubulars •Specialty items to meet clearance, collapse, strength and toughness needs 9 United States Steel Corporation
Slide 96: Innovative Technologies
Innovative Technologies • Process • Product • New Technologies – Low Plasticity Burnishing (LPB ® ) 10 Numerical model of LPB ® ball on steel LPB ® treatment of Coupling LPB ® is a patented process and a registered trademark of Lambda Technologies United States Steel Corporation
Slide 97: Innovation & Technology Center
Innovation & Technology Center 11 United States Steel Corporation
Slide 98: Key Takeaways: Tubular Focused, Customer Driven
Favorable U.S. Energy Market Strong Customer Relationships and Growing Stronger North America’s Largest Vertically Integrated Producer of Energy Tubular Products North America’s Most Extensive Product Capability Advancing Tubular Technology Key Takeaways … Tubular Focused –Customer Driven 12 United
Slide 99: Customer Driven
Customer Driven June 6, 2012 David L. Britten Vice President Tubular Technology & Business Development ©2012 United States Steel Corporation
Slide 100: Central Europe: A Value-added Strategy
Central Europe –A Value-added Strategy June 6, 2012 George F. Babcoke Senior Vice President Europe & Global Operations Services ©2012 United States Steel Corporation
Slide 101: U. S. Steel Košice
2 U. S. Steel Košice Slovak Republic Capacity: 5.0 MNT U. S. Steel Košice United States Steel Košice: Acquiredin 2000 Located in Central Europe Regional Market Advantages: Good access to V4 countries: Czech Republic Hungary Poland Slovakia Competitive conversion costs 2 United States Steel Corporati
Slide 102: U. S. Steel Košice Market and Cost Driven Investments
U. S. Steel Košice Market and Cost Driven Investments 2002Vacuum Degasser 2003 Tin Plate Facilities Expansion 2004Third Dynamo Line 2004-2005 Cold Mill Upgrades 2007 Third Galvanizing Line –Automotive Quality 2011Completed Pulverized Coal Injection Blast Furnaces 1, 2, and 3 Environmental Investment
Slide 103: U. S. Steel Košice: Product Capability
U. S. Steel Košice: Product Capability Largest Integrated Flat-Rolled Producer in Central Europe Flat SteelCapacity:5 MNT Pipes Cold Rolling Mill Radiators Dynamo Hot Dip Galvanizing Color Coating Tin Mill HotRolling Mill 4 United States Steel Corporation
Slide 104: U. S. Steel Košice: Operations
Production Capacity U. S. Steel Košice: Operations Facility Products Capacity NT / year Coke Batteries (2 Batteries) coke 2.1 mil. Sinter Plant (4 Strands) sinter 4.0 mil. BlastFurnaces (3 Furnaces) hot metal 5.0 mil. Steel Shop(4 BOF,1 Vacuum Degasser) steel 5.4 mil. Hot Strip Mill (1 line) hot rol
Slide 105: Raw Steel Capacity Utilization: USSK vs EU27
Raw Steel Capacity Utilization: USSK vs EU27 Source: WSA ** U. S. Steel Košice * Total capacity less permanently idled capacity ** EU27 Capacity UtilizationQ1 2012: January-February average 6 United States Steel Corporation
Slide 106: U. S. Steel Košice: Income from Operations
USD Millions U. S. Steel Košice: Income from Operations 7 United States Steel Corporation
Slide 107: Central Europe is our Home Market
• Poland and the Czech Republic drive V4 finishedsteel consumption • Two-speed economy development inside of the EU – Central European growth rate outperforms Western Europe Central Europe is our Home Market EU Economy & Steel Market V4 is Poland, Czech Republic, Slovakia, and Hungary *Finished Stee
Slide 108: What Our Steel Is Used For
What Our Steel Is Used For U. S. Steel Košice Products Automotive Tubes Appliance Machinery Packaging Construction Radiators Other 9 United States Steel Corporation
Slide 109: European Automotive Industry Production
Total European Production(including Balkan, CIS,and Turkey) 2011: 18.8 mil. units 2014: 20.3 mil. units Certifications & Awards: ISO 9001 & TS 16949 VW Group Supplier Award (2009) Ford Q1 Certificate (2010) Source : J.D.Power European Automotive Industry –Production (mil. units) U. S. Steel Košice 1
Slide 110: Automotive Production in Central Europe
Source : J.D.Power Automotive Production in Central Europe –V4 2003 vs 2017 Car Production Increase: + 2 million cars U. S. Steel Košice Suzuki Hyundai GM/Opel Ford/Fiat koda VW Kia PSA Toyota PSA VW VW Poland Czech Republic Slovakia Hungary 11 United States Steel Corporation
Slide 111: Hot Dipped Galvanizing Line #3
Hot Dipped Galvanizing Line #3 U. S. Steel Košice QuarterlyProduction at Start Up Annual Production ´000 NT ´000 NT 12 United States Steel Corporation
Slide 112: Packaging Sector – Central Europe
Packaging Sector –Central Europe U. S. Steel Košice USSK Shipments to Packaging Sector Poland Czech Republic Slovakia Hungary 13 United States Steel Corporation
Slide 113: Construction Growth Western and Central Europe
Construction Growth Western and Central Europe Source: Goldman Sachs U. S. Steel Košice • Construction remains one of the most important steel using sectors in Europe • V4 construction activity is expected to continue to outpace Western Europe • Poland drives Central European construction growth Cen
Slide 114: Appliance Sector – Central Europe
Appliance Sector –Central Europe U. S. Steel Košice Poland Slovakia Hungary • Appliance demand in Central Europe is growing in line with the economy and living standards • Major appliance producers are migrating, or have migrated, production to lower cost Central European countries Czech Republic 15
Slide 115: U. S. Steel Košice: Commercial Strategy
Value Added (Cold Rolled, Galvanized, Electrical, Prepainted, Tinplate, Tubes) Non Value Added (Hot Rolled, Non-Prime) Value Added Shipments U. S. Steel Košice: Commercial Strategy * Target 16 United States Steel Corporation
Slide 116: U. S. Steel Košice: Commercial Strategy
Expand our Position in V4 Region Growth Of Contract Business U. S. Steel Košice: Commercial Strategy % of Shipments * Target 17 United States Steel Corporation
Slide 117: U. S. Steel Košice: Competitive Position
Strengths • Geographical position in the V4 • Established customer portfolio located in Central Europe • Competitive conversion costs • V4 economic growth strongest in Europe • Company size (flexibility) • Approximately 85% self sufficient on coke Opportunities • Rising V4 steel demand in all produc
Slide 118: Central Europe: A Value-added Strategy
©2012 United States Steel Corporation Central Europe –A Value-added Strategy June 6, 2012 George F. Babcoke Senior Vice President Europe & Global Operations Services
Slide 119: Steelmaking Cost Optimization
©2012 United States Steel Corporation Steelmaking Cost Optimization June 6, 2012 David H. Lohr Senior Vice President -Strategic Planning, Business Services & Administration
Slide 120: Strength & Opportunity in North America
2 Strength & Opportunity in North America Substantial financial and operating leverage to an economic recovery Improved North American steelmaking cost position at higher utilization levels with the completion of Clairton C Battery & Gary Carbonyx modules Opportunity to enhance shareholder value by
Slide 121: Enduring Patterns of Steel Use
3 United States Steel Corporation Enduring Patterns of Steel Use Source: AISI ASR Table 1A United States: Annual Apparent Steel Use
Slide 122: U. S. Steel North America Pellet Balance
4 U. S. Steel North America Pellet Balance Annual Pellet Requirements approximately 28 million tons Annual Pellet Supply approximately 25 million tons Includes pellets from Minntac, Keetac and equity investments Potential expansion of Keetac by 3.6 million tons Balances supply and requirements Could
Slide 123: Keetac Expansion
Source: World Steel Dynamics April 2012 SteelFinished Tons Per Capita in USA Keetac Expansion 5 United States Steel Corporation U. S. Steel NAFR Avg. Cumulative Capacity in metric tons HRB Marginal Cost % of U. S. Steel NAFR Average Russia India Brazil USA China Japan W. Europe USA EAF Favorable cos
Slide 124: Global 2012 Pellet Cost Curve
Global 2012 Pellet Cost Curve 6 United States Steel Corporation Keetac Pellet Cash Cost Less than $50/nt (83.61 cent/dmtu) Source: Global 2012 Cost Curve (Site Cost) –CRU Keetac Pellet Cash Cost –U. S. Steel
Slide 125: Direct Reduction Iron (DRI) Uses
7 Basic Oxygen Furnace Purchased Scrap Replacement •At 90% capacity, U. S. Steel will require slightly more than 3 MM tons/year of purchased scrap Supplement Blast Furnace Production •DRI is metallized so no reduction reaction is required, only heat •Adding to BF burden can greatly increase furnace
Slide 126: Cost Advantage: DRI vs. Scrap
8 Sources: U. S. Steel Internal Analysis DRI Uses United States Steel Corporation Electric Arc Furnace Liquid Steel Cost Advantage: DRI vs. Scrap
Slide 127: Alternative Steelmaking Options
$250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $200 $250 $300 $350 $400 $450 $500 $550 $600 Liquid Steel $/NT No. 1 Busheling $/Net Ton 1 99 United States Steel Corporation Alternative Steelmaking Options * -Assumes market-based cost inputs of $150/ton pellets, $350/ton coke, $4/MMBTU natura
Slide 128: Future Steelmaking Process Opportunities
10 Steelmaking Cost Optimization Future Steelmaking Process Opportunities United States Steel Corporation Source: AISI
Slide 129: Steelmaking Cost Optimization
©2012 United States Steel Corporation Steelmaking Cost Optimization June 6, 2012 David H. Lohr Senior Vice President -Strategic Planning, Business Services & Administration
Slide 130: Disciplined Capital Allocation
Disciplined Capital Allocation June 6, 2012 John J. Quaid Vice President & Treasurer ©2012 United States Steel Corporation
Slide 131: Disciplined Capital Allocation: Balanced Approach
2 Maintain strong liquidity position Total Adjusted Liquidity $2.2 billion at March 31, 2012 (pro forma for redemption of 2013 Senior Notes) Minimal near term debt maturities Only $15 million of maturities in 2012 and 2013 Manageable legacy obligations Closed pension plans to new entrants Voluntary
Slide 132: Maintain Strong Liquidity
3 Maintain Strong Liquidity Liquidity above historical averages United States Steel Corporation $ in millions $2,091 average liquidity $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 12/31/0312/31/0412/31/0512/31/0612/31/0712/31/0812/31/0912/31/10 12/31/2011 3/31/2012* Cash Cash Used for Debt Redemption
Slide 133: Liquidity and Debt Maturity Profile
4 0 500 1,000 1,500 2,000 2,500 Liquidity 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 2024 & Thereafter Senior Notes Senior Convertible Notes Province Note Tax Exempt Bonds All other debt 2013 Senior Notes Adjusted Liquidity Cash Held for Debt Redemption Minimal Near Term Debt Maturities Liqui
Slide 134: Pension Risk Management Strategy
5 Defined benefit plans closed to new entrants U.S. plans closed in 2003 All Canadian plans closed by the end of 2011 Voluntary contributions to main U.S. plan $140 million in first quarter of 2012 $1.5 billion since 2003 Help mitigate risk of potentially larger mandatory contributions Long term inv
Slide 135: Manageable Pension Obligations
6 United States Steel Corporation Defined Contribution Defined Benefit Multi Employer North America Employees –plan participation Defined benefit plans closed to new entrants -over time more employees covered by defined contribution and multiemployer plans Over 50% of U.S. represented employees cove
Slide 136: North America Pensioners
7 United States Steel Corporation North America Pensioners –as of year end 80% of defined benefit plan participants Decline of over 20% since year end 2000 Manageable Pension Obligations in thousands 94.3 74.3 U. S. Steel Canada and Lone Star Technologies acquired in 2007
Slide 137: Pension Protection Act of 2006
8 United States Steel Corporation Pension Protection Act of 2006 Normal costs* + Shortfall amortization (over 7 years) = Minimum Funding Requirement Credit balances can be used to offset funding requirements Discount rate based on Treasury-issued high quality corporate bond yield curve Legislative r
Slide 138: Capital Projects
9 Capital Projects Focused on long-term strategic projects United States Steel Corporation Gary Works Carbonyx Lorain #6 Heat Treat & Finishing Facility Clairton C Battery PRO-TEC joint venture Continuous Annealing Line Improve carbon cost position Expand product offerings in growing markets
Slide 139: Disciplined Capital Allocation
Disciplined Capital Allocation June 6, 2012 John J. Quaid Vice President & Treasurer ©2012 United States Steel Corporation
Slide 140: Improved Financial Performance
Improved Financial Performance June 6, 2012 Gretchen R. Haggerty Executive Vice President & Chief Financial Officer ©2012 United States Steel Corporation
Slide 141: Substantial operating leverage to economic recovery
11 United States Steel Corporation Substantial operating leverage to economic recovery Net Sales $0 $5,000 $10,000 $15,000 $20,000 2009 2010 2011 Income from Operations ($2,000) ($1,500) ($1,000) ($500) $0 $500 2009 2010 2011 Net Income (Loss) ($1,500) ($1,000) ($500) $0 $500 2009 2010 2011 Financia
Slide 142: Reportable Segment Operating Results 2011 vs. 2010
12 United States Steel Corporation Substantial operating leverage to economic recovery Reportable Segment Operating Results –2011 vs. 2010 ($261) $469 $353 $316 $283 $875 $136 $44 $55 $46 ($300) ($200) ($100) $0 $100 $200 $300 $400 $500 $600 $700 2010 2011 $ Millions Flat-rolled U. S. Steel Europe -
Slide 143: Adjusted First Quarter 2012 Results
13 United States Steel Corporation Substantial operating leverage to economic recovery First Quarter 2012 reportable segment operating income of $295 million, or $52 per ton First Quarter 2012 revenue of $5.2 billion, on shipments of 5.7 million tons ($ millions) 1Q 2011 1Q 2012 Reported net income
Slide 144: Strength & Opportunity
14 United States Steel Corporation Strength & Opportunity Global leader in a growing industry Balanced business mix with strong market share in value- added products Leading presence in North American energy market Strong raw materials position and getting stronger Well positioned to serve growing C
Slide 145: Improved Financial Performance
Improved Financial Performance June 6, 2012 Gretchen R. Haggerty Executive Vice President & Chief Financial Officer ©2012 United States Steel Corporation