NEWS RELEASE
usslogoa08.jpg
CONTACTS:
Media                
Meghan Cox        
Manager                
Corporate Communications
T - (412) 433-6777        
E - mmcox@uss.com         

Investors/Analysts
Dan Lesnak
General Manager
Investor Relations
T - (412) 433-1184
E - dtlesnak@uss.com




FOR IMMEDIATE RELEASE:
UNITED STATES STEEL CORPORATION REPORTS FOURTH QUARTER AND FULL-YEAR 2018 RESULTS

•
Full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share; full-year adjusted net earnings of $957 million, or $5.36 per diluted share
•
Full-year 2018 adjusted EBITDA of $1.76 billion
•
Returned over $110 million of capital to stockholders in 2018, including $75 million of share repurchases

PITTSBURGH, January 30, 2019 – United States Steel Corporation (NYSE: X) reported full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share. Adjusted net earnings were $957 million, or $5.36 per diluted share. This compares to a full-year 2017 net earnings of $387 million, or $2.19 per diluted share. Adjusted net earnings for 2017 was $341 million, or $1.94 per diluted share.
Fourth quarter 2018 net earnings were $592 million, or $3.34 per diluted share. Adjusted net earnings for the fourth quarter 2018 were $324 million, or $1.82 per diluted share. This compares to a fourth quarter 2017

2


net earnings of $159 million, or $0.90 per diluted share. Fourth quarter 2017 adjusted net earnings were $136 million, or $0.76 per diluted share.

Earnings Highlights
 
 
 
 
Quarter Ended

Year Ended
 
December 31,

December 31,
(Dollars in millions, except per share amounts)
2018
2017

2018
2017
Net Sales
$
3,691

$
3,133


$
14,178

$
12,250

Segment earnings (loss) before interest and income taxes






     Flat-Rolled
$
328

$
82


$
883

$
375

     U. S. Steel Europe
62

112


359

327

     Tubular
(3
)
(6
)

(58
)
(99
)
     Other Businesses
11

10


55

44

Total segment earnings before interest and income taxes
$
398

$
198


$
1,239

$
647

Other items not allocated to segments
(85
)
(36
)

(115
)
22

Earnings before interest and income taxes
$
313

$
162


$
1,124

$
669

Net interest and other financial costs
60

92


312

368

Income tax benefit
(339
)
(89
)

(303
)
(86
)
Net earnings
$
592

$
159


$
1,115

$
387

Earnings per diluted share
$
3.34

$
0.90


$
6.25

$
2.19



Adjusted net earnings (a)
$
324

$
136

 
$
957

$
341

Adjusted earnings per diluted share (a)
$
1.82

$
0.76

 
$
5.36

$
1.94

Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a)
$
535

$
323

 
$
1,760

$
1,148

(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.
"We are pleased with both the strong earnings we reported in 2018 and the important progress we made on our strategic objectives," said U. S. Steel President and Chief Executive Officer David B. Burritt. "We are encouraged by the effectiveness of the investments we are making and remain focused on improving our operating and commercial performance to drive long-term value creation for our stockholders."
The Company currently expects first quarter 2019 adjusted EBITDA to be approximately $225 million, which excludes the expected first quarter impacts of the December 24, 2018 fire at our Clairton coke making facility.



3


First quarter 2019 EBITDA for the Flat-rolled segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices, partially offset by higher raw materials costs.
First quarter 2019 EBITDA for the U. S. Steel Europe segment is expected to be lower than first quarter 2018, primarily due to lower volumes, higher raw materials costs, and an unfavorable change in the U.S. dollar / Euro exchange rate.
First quarter 2019 EBITDA for the Tubular segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices and increased volumes, partially offset by higher costs for steel substrate.
*****
The Company will conduct a conference call on fourth quarter and full-year 2018 earnings on Thursday, January 31, at 8:30 a.m. Eastern Standard. To listen to the webcast of the conference call, visit the U. S. Steel website, www.ussteel.com, and click on the “Investors” section. For more information on U. S. Steel, visit our website.
Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of Guidance net earnings (loss) to consolidated Guidance EBITDA.



UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
 
 
December 31,
 
December 31,
 
 
 
 
2018
 
2017
 
2018
 
2017
OPERATING STATISTICS
 
 
 
 
 
 
 
 
Average realized price: (a)
 
 
 
 
 
 
 
 
 
Flat-Rolled ($/net ton)
823

 
717

 
811

 
726

 
 
U. S. Steel Europe ($/net ton)
686

 
634

 
693

 
622

 
 
    U. S. Steel Europe (euro/net ton)
601

 
538

 
586

 
551

 
 
Tubular ($/net ton)
1,488

 
1,417

 
1,483

 
1,253

 
Steel Shipments (thousands of net tons): (a)
 
 
 
 
 
 
 
 
 
Flat-Rolled
2,733

 
2,442

 
10,510

 
9,887

 
 
U. S. Steel Europe
1,073

 
1,252

 
4,457

 
4,585

 
 
Tubular
216

 
179

 
780

 
688

 
 
 
Total Steel Shipments
4,022

 
3,873

 
15,747

 
15,160

 
 
 
 
 
 
 
 
 
 
 
 
Intersegment Shipments (thousands of net tons):
 
 
 
 
 
 
 
 
 
Flat-Rolled to Tubular
66

 
21

 
224

 
158

 
 
U. S. Steel Europe to Flat-Rolled
—

 
—

 
22

 
47

 
Raw Steel Production (thousands of net tons):


 


 


 


 
 
Flat-Rolled
3,334

 
2,575

 
11,893

 
10,820

 
 
U. S. Steel Europe
1,213

 
1,314

 
5,023

 
5,091

 
Raw Steel Capability Utilization: (b)


 


 


 


 
 
Flat-Rolled
78
%
 
60
%
 
70
%
 
64
%
 
 
U. S. Steel Europe
96
%
 
104
%
 
100
%
 
102
%
 
 
 
 
 
 
 
 
 
 
 
CAPITAL EXPENDITURES
 
 
 
 
 
 
 
 
Flat-Rolled
$
289

 
$
182

 
$
820

 
$
388

 
U. S. Steel Europe
41

 
21

 
104

 
83

 
Tubular
12

 
9

 
45

 
28

 
Other Businesses
13

 
2

 
32

 
6

 
 
 
 
 
 
 
 
 
 
          Total
$
355

 
$
214

 
$
1,001

 
$
505

(a) Excludes intersegment shipments.
(b) Based on annual raw steel production capability of 17.0 million net tons for Flat-Rolled and 5.0 million net tons for U. S. Steel Europe.




UNITED STATES STEEL CORPORATION
STATEMENT OF OPERATIONS (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
 
December 31,
 
December 31,
(Dollars in millions, except per share amounts)
2018
 
2017
 
2018
 
2017
NET SALES
 
$
3,691

 
$
3,133

 
$
14,178

 
$
12,250

 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES (INCOME):
 
 
 
 
 
 
 
 
Cost of sales (excludes items shown below)
3,204

 
2,748

 
12,305

 
10,858

 
Selling, general and administrative expenses
85

 
97

 
336

 
320

 
Depreciation, depletion and amortization
137

 
125

 
521

 
501

 
Earnings from investees
(22
)
 
(15
)
 
(61
)
 
(44
)
 
Gain associated with retained interest in U. S. Steel Canada Inc.
—

 
—

 
—

 
(72
)
 
(Gain) loss on equity investee transactions
(20
)
 
19

 
(38
)
 
(2
)
 
Restructuring and other charges
—

 
1

 
—

 
31

 
Net gain on disposal of assets
(3
)
 
(3
)
 
(6
)
 
(5
)
 
Other income, net
(3
)
 
(1
)
 
(3
)
 
(6
)
 
           Total operating expenses
3,378

 
2,971

 
13,054

 
11,581

 
 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INTEREST AND INCOME TAXES
313

 
162

 
1,124

 
669

Net interest and other financial costs (a)
60

 
92

 
312

 
368

 
 
 
 
 
 
 
 
 
 
 
EARNINGS BEFORE INCOME TAXES
253

 
70

 
812

 
301

Income tax benefit
(339
)
 
(89
)
 
(303
)
 
(86
)
 
 
 
 
 
 
 
 
 
 
Net earnings
592

 
159

 
1,115

 
387

 
Less: Net earnings (loss) attributable to the noncontrolling interests
—

 
—

 
—

 
—

NET EARNINGS ATTRIBUTABLE TO UNITED STATES STEEL CORPORATION
$
592

 
$
159

 
$
1,115

 
$
387

 
 
 
 
 
 
 
 
 
 
COMMON STOCK DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per share attributable to
 
 
 
 
 
 
 
   United States Steel Corporation stockholders:
 
 
 
 
 
 
 
 
Basic
 
$
3.36

 
$
0.91

 
$
6.31

 
$
2.21

 
Diluted
 
$
3.34

 
$
0.90

 
$
6.25

 
$
2.19

Weighted average shares, in thousands
 
 
 
 
 
 
 
 
Basic
 
176,091

 
175,117

 
176,633

 
174,793

 
Diluted
 
177,649

 
177,210

 
178,461

 
176,520

Dividends paid per common share
$
0.05

 
$
0.05

 
$
0.20

 
$
0.20

(a) Includes $16 million and $14 million for the three months ended December 31, 2018 and 2017, respectively, and $69 million and $61 million for the twelve months ended December 31, 2018 and 2017, respectively, of postretirement benefit expense (other than service cost) related to the retrospective presentation change of net periodic benefit cost of our defined benefit pension and other post-employment benefits as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018.







UNITED STATES STEEL CORPORATION
CASH FLOW STATEMENT (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
December 31,
(Dollars in millions)
 
2018
 
2017
Cash provided by operating activities:
 
 
 
 
Net earnings
 
$
1,115

 
$
387

 
Depreciation, depletion and amortization
521

 
501

 
Gain associated with retained interest in U. S. Steel Canada Inc.
—

 
(72
)
 
Gain on equity investee transactions
(38
)
 
(2
)
 
Restructuring and other charges
—

 
31

 
Loss on debt extinguishment
98

 
54

 
Pensions and other postretirement benefits
77

 
(16
)
 
Deferred income taxes
(329
)
 
(72
)
 
Net gain on disposal of assets
(6
)
 
(5
)
 
Working capital changes
(404
)
 
72

 
Income taxes receivable/payable
(8
)
 
(52
)
 
Other operating activities
(88
)
 
—

 
 
Total
 
938

 
826

 
 
 
 
 
 
 
Cash used in investing activities:
 
 
 
 
Capital expenditures
 
(1,001
)
 
(505
)
 
Disposal of assets
 
10

 
5

 
Proceeds from sale of ownership interest in equity method investees
30

 
116

 
Other investing activities
 
(2
)
 
(2
)
 
 
Total
 
(963
)
 
(386
)
 
 
 
 
 
 
 
Cash (used in) provided by financing activities:
 
 
 
 
Revolving credit facilities
228

 
—

 
Issuance of long-term debt, net of financing costs
640

 
737

 
Repayment of long-term debt
 
(1,299
)
 
(1,127
)
 
Common stock repurchased

(75
)

—

 
Receipts from exercise of stock options
35

 
20

 
Taxes paid for equity compensation plans
 
(8
)
 
(10
)
 
Dividends paid
(36
)
 
(35
)
 
 
Total
 
(515
)
 
(415
)
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
(17
)
 
17

 
 
 
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
(557
)
 
42

Cash, cash equivalents and restricted cash at beginning of the year (a)
1,597

 
1,555

 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of the period (a)
$
1,040

 
$
1,597

(a) Includes restricted cash in the beginning-of-period and end-of-period amounts as a result of the retrospective adoption of Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018.






UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
 
 
 
 
 
 
 
 
 
Dec. 31
 
Dec. 31
(Dollars in millions)
 
2018
 
2017
Cash and cash equivalents
$
1,000

 
$
1,553

Receivables, net
1,659

 
1,379

Inventories
2,092

 
1,738

Other current assets
79

 
85

 
Total current assets
4,830

 
4,755

Property, plant and equipment, net
4,865

 
4,280

Investments and long-term receivables, net
513

 
480

Intangible assets, net
158

 
167

Other assets
616

 
180

 
 
 
 
 
 
 
Total assets
 
$
10,982

 
$
9,862

 
 
 
 
 
 
Accounts payable
$
2,535

 
$
2,222

Payroll and benefits payable
440

 
347

Short-term debt and current maturities of long-term debt
65

 
3

Other current liabilities
157

 
201

 
Total current liabilities
3,197

 
2,773

Long-term debt, less unamortized discount and debt issuance costs
2,316

 
2,700

Employee benefits
980

 
759

Other long-term liabilities
286

 
309

United States Steel Corporation stockholders' equity
4,202

 
3,320

Noncontrolling interests
1

 
1

 
 
 
 
 
 
 
Total liabilities and stockholders' equity
$
10,982

 
$
9,862

















UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA GUIDANCE
 
 
 
(Dollars in millions)
1Q 2019
Reconciliation to Projected Adjusted EBITDA Included in Guidance
 
 
Projected net loss attributable to United States Steel Corporation included in Guidance
$
(6
)
 
Estimated income tax benefit
(1
)
 
Estimated net interest and other financial costs
57

 
Estimated depreciation, depletion and amortization
135

 
Projected EBITDA included in Guidance
$
185

 
Expected first quarter impact of the December 24, 2018 fire at the Clairton coke making facility
40

 
Projected adjusted EBITDA included in Guidance
$
225



UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Year Ended
 
 
Dec. 31
 
Dec. 31
(Dollars in millions)
2018
 
2017
 
2018
 
2017
Reconciliation to Adjusted EBITDA
 
 
 
 
 
 
 
 
Net earnings attributable to United States Steel Corporation
$
592

 
$
159

 
$
1,115

 
$
387

 
Income tax benefit
(339
)
 
(89
)
 
(303
)
 
(86
)
 
Net interest and other financial costs
60

 
92

 
312

 
368

 
Depreciation, depletion and amortization expense
137

 
125

 
521

 
501

 
EBITDA
450

 
287

 
1,645

 
1,170

 
United Steelworkers labor agreement signing bonus and related costs
88

 
—

 
81

 
—

 
Gain associated with retained interest in U. S. Steel Canada Inc.
—

 
—

 
—

 
(72
)
 
(Gain) loss on equity investee transactions
(20
)
 
19

 
(38
)
 
(2
)
 
Loss on shutdown of certain tubular pipe mill assets
—

 
—

 
—

 
35

 
Granite City Works restart and related costs
17

 
—

 
80

 
—

 
Granite City Works temporary idling charges
—

 
17

 
(8
)
 
17

 
Adjusted EBITDA
$
535

 
$
323

 
$
1,760

 
$
1,148




UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET EARNINGS
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended(a)
 
Year Ended(a)
 
 
December 31,
 
December 31,
(Dollars in millions, except per share amounts)
2018
 
2017
 
2018
 
2017
Reconciliation to adjusted net earnings attributable to United States Steel Corporation
 
 
 
 
 
 
 
 
Net earnings attributable to United States Steel Corporation
$
592

 
$
159

 
$
1,115

 
$
387

 
United Steelworkers labor agreement signing bonus and related costs
88

 
—

 
81

 
—

 
Reversal of tax valuation allowance
(374
)
 
—

 
(374
)
 
—

 
Gain associated with retained interest in U. S. Steel Canada Inc.
—

 
—

 
—

 
(72
)
 
(Gain) loss on equity investee transactions
(20
)
 
19

 
(38
)
 
(2
)
 
Loss on shutdown of certain tubular pipe mill assets
—

 
—

 
—

 
35

 
Loss on debt extinguishment
21

 
22

 
101

 
57

 
Effect of tax reform
—

 
(81
)
 
—

 
(81
)
 
Granite City Works restart and related costs
17

 
—

 
80

 
—

 
Granite City Works temporary idling charges
—

 
17

 
(8
)
 
17

 
     Total adjustments
(268
)
 
(23
)
 
(158
)
 
(46
)
 
Adjusted net earnings attributable to United States Steel Corporation
$
324

 
$
136

 
$
957

 
$
341

 
 
 
 
 
 
 
 
 
Reconciliation to adjusted diluted net earnings per share
 
 
 
 
 
 
 
 
Diluted net earnings per share
$
3.34

 
$
0.90

 
$
6.25

 
$
2.19

 
United Steelworkers labor agreement signing bonus and related costs
0.49

 
—

 
0.45

 
—

 
Reversal of tax valuation allowance
(2.11
)
 
—

 
(2.11
)
 
—

 
Gain associated with retained interest in U. S. Steel Canada Inc.
—

 
—

 
—

 
(0.41
)
 
(Gain) loss on equity investee transactions
(0.11
)
 
0.10

 
(0.21
)
 
(0.01
)
 
Loss on shutdown of certain tubular pipe mill assets
—

 
—

 
—

 
0.20

 
Loss on debt extinguishment
0.12

 
0.12

 
0.57

 
0.33

 
Effect of tax reform
—

 
(0.46
)
 
—

 
(0.46
)
 
Granite City Works restart and related costs
0.09

 
—

 
0.45

 
—

 
Granite City Works temporary idling charges
—

 
0.10

 
(0.04
)
 
0.10

 
     Total adjustments
(1.52
)
 
(0.14
)
 
(0.89
)
 
(0.25
)
 
Adjusted diluted net earnings per share
$
1.82

 
$
0.76

 
$
5.36

 
$
1.94

(a) The adjustments included in this table have been tax effected at a 0% tax rate due to the recognition of a full valuation allowance on our domestic deferred tax assets.













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 enhance the understanding of our operating performance. We believe that EBITDA, considered along with net earnings (loss), is a relevant indicator of trends relating to our operating performance and provides management and investors with additional information for comparison of our operating results to the operating results of other companies.
Adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the effects of the United Steelworkers (USW) labor agreement signing bonus and related costs, gains associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, significant temporary idling charges, restart and related costs associated with Granite City Works, debt extinguishment and other related costs, the reversal of our tax valuation allowance and effects of tax reform that are not part of the Company's core operations. Adjusted EBITDA is also a non-GAAP measure that excludes the effects of the USW agreement signing bonus and related costs, gains associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, significant temporary idling charges and restart and related costs associated with Granite City Works. We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA to enhance the understanding of our ongoing operating performance and established trends affecting our core operations, by excluding the effects of events that can obscure underlying trends. U. S. Steel's management considers adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA as alternative measures of operating performance and not alternative measures of the Company's liquidity. U. S. Steel’s management considers adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA useful to investors by facilitating a comparison of our operating performance to the operating performance of our competitors. Additionally, the presentation of adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA provides insight into management’s view and assessment of the Company’s ongoing operating performance, because management does not consider the adjusting items when evaluating the Company’s financial performance or in preparing the Company’s financial Guidance. Adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA should not be considered a substitute for net earnings (loss), earnings (loss) per diluted share or other financial measures as computed in accordance with U.S. GAAP and is not necessarily comparable to similarly titled measures used by other companies. A consolidated statement of operations



(unaudited), consolidated cash flow statement (unaudited), condensed consolidated balance sheet (unaudited) and preliminary supplemental statistics (unaudited) for U. S. Steel are attached.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This release contains information that may constitute “forward-looking statements” within the meaning of Section 27 of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “will” and similar expressions or by using future dates in connection with any discussion of, among other things, operating performance, trends, events or developments that we expect or anticipate will occur in the future, statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to the risks and uncertainties described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and those described from time to time in our future reports filed with the Securities and Exchange Commission. References to "we," "us," "our," the "Company," and "U. S. Steel," refer to United States Steel Corporation and its consolidated subsidiaries.
-oOo-
2019-003