United States Steel Corporation Reports Third Quarter 2024 Results

PITTSBURGH--(BUSINESS WIRE)--United States Steel Corporation (NYSE: X) reported third quarter 2024 net earnings of $119 million, or $0.48 per diluted share. Adjusted net earnings was $140 million, or $0.56 per diluted share. This compares to third quarter 2023 net earnings of $299 million, or $1.20 per diluted share. Adjusted net earnings for the third quarter 2023 was $350 million, or $1.40 per diluted share. Commenting on the Company’s third quarter performance, U. S. Steel President and Chief Executive Officer, David B. Burritt said, “Third quarter adjusted EBITDA of $319 million demonstrated resilience in our business model despite the weaker average selling prices experienced across our operating segments. The North American Flat-Rolled segment continued to benefit from a strong commercial strategy that leveraged a diverse product mix and a purposeful increase in contracted volumes across the end markets we serve. Our Mini Mill segment, which was impacted by softening market pricing, delivered 11% EBITDA margins when adjusting for $40 million in one-time start-up costs for strategic projects. USSE earnings benefited from a one-time favorable adjustment related to CO2 allocations, which offset pressures from a challenging demand environment in Europe. Tubular earnings were weaker in the third quarter, as expected, reflecting lower benchmark prices.” Commenting on the Company’s strategic initiatives, Burritt continued, “We are very pleased to announce that we achieved first coil at Big River 2 (“BR2”), with the Big River team expecting to begin shipments to customers during the fourth quarter. We are excited to highlight photos of BR2 in the investor presentation posted today on our website. Congratulations to the Big River team on safely delivering over $4 billion of growth capital investments, including the non-grain oriented (“NGO”) electrical steel line and the dual Galvalume® / Galvanized coating line. Coupled with our enhanced commercial strategy and recent investments made in the North American Flat Rolled segment, we look forward to building upon our more resilient earnings with increasing free cash flow.” Commenting on the Company’s transaction with Nippon Steel Corporation, Burritt noted, “We continue to work towards closing by year-end. Importantly, in September, the Board of Arbitration ruled in favor of U. S. Steel under our basic labor agreement. We are also pleased to see additional commitments from Nippon Steel, which will build upon the existing benefits including the transfer of technologies and further innovations from Nippon Steel's $500 million annual R&D spending, to further strengthen the merits of the transaction. We look forward to delivering these benefits to all of our stakeholders, especially to our hardworking men and women in the Mon Valley and Gary plants, where Nippon Steel has committed to invest at least $1.3 billion, increasing the total capital commitment to at least $2.7 billion." Q4 2024 Outlook We expect fourth quarter adjusted EBITDA in the range of $225 million and $275 million. Our North American Flat-Rolled segment results should decrease slightly, driven largely by lower lagging average selling price expectations for the quarter. We expect an improvement in Mini Mill segment results, even after accounting for $25 million of related start-up and one-time construction costs at BR2, reflecting an expected improvement in average selling prices. In Europe, results are expected to be lower given the absence of the positive CO2 allocations and weak underlying demand and pricing conditions. Our Tubular segment results should be largely consistent with the third quarter. Earnings Highlights Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, except per share amounts) 2024 2023 2024 2023 Net Sales $ 3,853 $ 4,431 $ 12,131 $ 13,909 Segment earnings (loss) before interest and income taxes Flat-Rolled $ 106 $ 225 $ 323 $ 449 Mini Mill (28 ) 42 99 186 U. S. Steel Europe 7 (13 ) 13 25 Tubular (4 ) 87 82 476 Other 3 7 (3 ) (2 ) Total segment earnings before interest and income taxes $ 84 $ 348 $ 514 $ 1,134 Other items not allocated to segments (36 ) (71 ) (131 ) (104 ) Earnings before interest and income taxes $ 48 $ 277 $ 383 $ 1,030 Net interest and other financial benefits (61 ) (64 ) (174 ) (182 ) Income tax (benefit) expense (10 ) 42 84 237 Net earnings $ 119 $ 299 $ 473 $ 975 Earnings per diluted share $ 0.48 $ 1.20 $ 1.88 $ 3.86 Adjusted net earnings (a) $ 140 $ 350 $ 557 $ 1,028 Adjusted net earnings per diluted share (a) $ 0.56 $ 1.40 $ 2.21 $ 4.07 Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a) $ 319 $ 578 $ 1,176 $ 1,809 (a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts. UNITED STATES STEEL CORPORATION PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 OPERATING STATISTICS Average realized price: ($/net ton unless otherwise noted) (a) Flat-Rolled 993 1,036 1,030 1,045 Mini Mill 800 901 880 898 U. S. Steel Europe 802 852 818 910 U. S. Steel Europe (€/net ton) 730 783 753 840 Tubular 1,805 2,927 2,062 3,422 Steel shipments (thousands of net tons): (a) Flat-Rolled 1,905 2,159 5,999 6,672 Mini Mill 602 561 1,732 1,807 U. S. Steel Europe 899 958 2,846 2,875 Tubular 110 104 333 346 Total steel shipments 3,516 3,782 10,910 11,700 Intersegment steel (unless otherwise noted) shipments (thousands of net tons): Mini Mill to Flat-Rolled 84 145 288 370 Flat-Rolled to Mini Mill 2 2 3 2 Flat-Rolled to Mini Mill (pig iron) 83 95 248 210 Flat-Rolled to USSE (coal) — 174 258 632 Raw steel production (thousands of net tons): Flat-Rolled 2,107 2,390 6,290 7,312 Mini Mill 732 693 2,174 2,201 U. S. Steel Europe 970 990 3,029 3,295 Tubular 159 111 422 411 Raw steel capability utilization: (b) Flat-Rolled 63 % 72 % 63 % 74 % Mini Mill 88 % 83 % 88 % 89 % U. S. Steel Europe 77 % 79 % 81 % 88 % Tubular 70 % 49 % 62 % 61 % CAPITAL EXPENDITURES (dollars in millions) Flat-Rolled 114 132 378 375 Mini Mill 364 423 1,302 1,474 U. S. Steel Europe 27 24 82 66 Tubular 6 7 20 24 Other Businesses — — — — Total $ 511 $ 586 $ 1,782 $ 1,939 (a) Excludes intersegment shipments. (b) Based on annual raw steel production capability of 13.2 million net tons for Flat-Rolled, 3.3 million net tons for Mini Mill, 5.0 million net tons for U. S. Steel Europe and 0.9 million net tons for Tubular. UNITED STATES STEEL CORPORATION CONDENSED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, except per share amounts) 2024 2023 2024 2023 Net Sales $ 3,853 $ 4,431 $ 12,131 $ 13,909 Operating expenses (income): Cost of sales 3,448 3,838 10,742 11,952 Selling, general and administrative expenses 104 118 328 320 Depreciation, depletion and amortization 235 230 662 675 Earnings from investees (17 ) (51 ) (76 ) (76 ) Asset impairment charges — — 19 4 Restructuring and other charges 5 18 11 21 Other losses (gains), net 30 1 62 (17 ) Total operating expenses 3,805 4,154 11,748 12,879 Earnings before interest and income taxes 48 277 383 1,030 Net interest and other financial benefits (61 ) (64 ) (174 ) (182 ) Earnings before income taxes 109 341 557 1,212 Income tax (benefit) expense (10 ) 42 84 237 Net earnings 119 299 473 975 Less: Net earnings attributable to noncontrolling interests — — — — Net earnings attributable to United States Steel Corporation $ 119 $ 299 $ 473 $ 975 COMMON STOCK DATA: Net earnings per share attributable to United States Steel Corporation Stockholders Basic $ 0.53 $ 1.34 $ 2.10 $ 4.33 Diluted $ 0.48 $ 1.20 $ 1.88 $ 3.86 Weighted average shares, in thousands Basic 225,095 223,109 224,697 225,311 Diluted 254,060 253,070 254,124 255,080 Dividends paid per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15 UNITED STATES STEEL CORPORATION CONDENSED CASH FLOW STATEMENT (Unaudited) Nine Months Ended September 30, Nine Months Ended September 30, (Dollars in millions) 2024 2023 Increase (decrease) in cash, cash equivalents and restricted cash Operating activities: Net earnings $ 473 $ 975 Depreciation, depletion and amortization 662 675 Asset impairment charges 19 4 Restructuring and other charges 11 21 Pensions and other postretirement benefits (99 ) (124 ) Active employee benefit investments 51 20 Deferred income taxes 141 275 Working capital changes (204 ) 227 Income taxes receivable/payable (127 ) (86 ) Other operating activities (216 ) (276 ) Net cash provided by operating activities 711 1,711 Investing activities: Capital expenditures (1,782 ) (1,939 ) Proceeds from sale of assets 3 4 Other investing activities (5 ) — Net cash used in investing activities (1,784 ) (1,935 ) Financing activities: Issuance of long-term debt, net of financing costs — 241 Repayment of long-term debt (46 ) (69 ) Common stock repurchased — (175 ) Other financing activities (58 ) (50 ) Net cash used in financing activities (104 ) (53 ) Effect of exchange rate changes on cash 4 (3 ) Net decrease in cash, cash equivalents and restricted cash (1,173 ) (280 ) Cash, cash equivalents and restricted cash at beginning of year 2,988 3,539 Cash, cash equivalents and restricted cash at end of period $ 1,815 $ 3,259 UNITED STATES STEEL CORPORATION CONDENSED BALANCE SHEET (Unaudited) September 30, December 31, (Dollars in millions) 2024 2023 Cash and cash equivalents $ 1,773 $ 2,948 Receivables, net 1,649 1,548 Inventories 2,039 2,128 Other current assets 305 319 Total current assets 5,766 6,943 Operating lease assets 82 109 Property, plant and equipment, net 11,665 10,393 Investments and long-term receivables, net 830 761 Intangibles, net 421 436 Goodwill 920 920 Other noncurrent assets 949 889 Total assets $ 20,633 $ 20,451 Accounts payable and other accrued liabilities 2,745 3,028 Payroll and benefits payable 321 442 Short-term debt and current maturities of long-term debt 163 142 Other current liabilities 223 336 Total current liabilities 3,452 3,948 Noncurrent operating lease liabilities 51 73 Long-term debt, less unamortized discount and debt issuance costs 4,068 4,080 Employee benefits 124 126 Deferred income tax liabilities 732 587 Other long-term liabilities 535 497 United States Steel Corporation stockholders' equity 11,578 11,047 Noncontrolling interests 93 93 Total liabilities and stockholders' equity $ 20,633 $ 20,451 UNITED STATES STEEL CORPORATION NON-GAAP FINANCIAL MEASURES RECONCILIATION OF ADJUSTED NET EARNINGS Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions) 2024 2023 2024 2023 Net earnings and diluted net earnings per share attributable to United States Steel Corporation, as reported $ 119 $ 0.48 $ 299 $ 1.20 $ 473 $ 1.88 $ 975 $ 3.86 Restructuring and other charges 5 18 11 21 Stock-based compensation expense 10 14 37 37 Asset impairment charges — — 19 4 VEBA asset surplus adjustment (9 ) (6 ) (21 ) (36 ) Environmental remediation charges 1 9 4 11 Strategic alternatives review process costs 18 16 59 16 Granite City idling costs — 14 — 14 Other charges, net 2 1 1 2 Adjusted pre-tax net earnings to United States Steel Corporation 146 365 583 1,044 Tax impact of adjusted items (a) (6 ) (15 ) (26 ) (16 ) Adjusted net earnings and diluted net earnings per share attributable to United States Steel Corporation $ 140 $ 0.56 $ 350 $ 1.40 $ 557 $ 2.21 $ 1,028 $ 4.07 Weighted average diluted ordinary shares outstanding, in millions 254.1 253.1 254.1 255.1 (a) The tax impact of adjusted items for both the three and nine months ended September 30, 2024, and 2023 were calculated using a blended tax rate of 24%. UNITED STATES STEEL CORPORATION NON-GAAP FINANCIAL MEASURES RECONCILIATION OF ADJUSTED EBITDA Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions) 2024 2023 2024 2023 Reconciliation to Adjusted EBITDA Net earnings attributable to United States Steel Corporation $ 119 $ 299 $ 473 975 Income tax (benefit) expense (10 ) 42 84 237 Net interest and other financial benefits (61 ) (64 ) (174 ) (182 ) Depreciation, depletion and amortization expense 235 230 662 675 EBITDA 283 507 1,045 1,705 Restructuring and other charges 5 18 11 21 Stock-based compensation expense 10 14 37 37 Asset impairment charges — — 19 4 Environmental remediation charges 1 9 4 11 Strategic alternatives review process costs 18 16 59 16 Granite City idling costs — 14 — 14 Other charges, net 2 — 1 1 Adjusted EBITDA $ 319 $ 578 $ 1,176 $ 1,809 Net earnings margin (a) 3.1 % 6.7 % 3.9 % 7.0 % Adjusted EBITDA margin (a) 8.3 % 13.0 % 9.7 % 13.0 % (a) The net earnings and adjusted EBITDA margins represent net earnings or adjusted EBITDA divided by net sales. UNITED STATES STEEL CORPORATION NON-GAAP FINANCIAL MEASURES RECONCILIATION OF PAST TWELVE MONTHS OF FREE AND INVESTABLE CASH FLOW 4th 1st 2nd 3rd Quarter Quarter Quarter Quarter Total of the (Dollars in millions) 2023 2024 2024 2024 Four Quarters Net cash provided (used) by operating activities $ 389 $ (28 ) $ 474 $ 265 $ 1,100 Net cash used in investing activities (633 ) (645 ) (630 ) (509 ) (2,417 ) Free cash flow (244 ) (673 ) (156 ) (244 ) (1,317 ) Strategic capital expenditures 425 468 468 346 1,707 Investable free cash flow $ 181 $ (205 ) $ 312 $ 102 $ 390 We present adjusted net earnings, adjusted net earnings per diluted share, earnings before interest, income taxes, depreciation and amortization (EBITDA), adjusted EBITDA and adjusted EBITDA margin, 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, 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 and adjusted net earnings per diluted share are non-GAAP measures that exclude the effects of items that include: restructuring and other charges, stock-based compensation expense, asset impairment charges, VEBA asset surplus adjustment, environmental remediation charges, strategic alternatives review process costs, Granite City idling costs, tax impact of adjusted items and other charges, net (Adjustment Items). Adjusted EBITDA and adjusted EBITDA margins are also non-GAAP measures that exclude the effects of certain Adjustment Items. We present adjusted net earnings, adjusted net earnings per diluted share, adjusted EBITDA and adjusted EBITDA margin 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, adjusted net earnings per diluted share, adjusted EBITDA, and adjusted EBITDA margin as alternative measures of operating performance and not alternative measures of the Company's liquidity. U. S. Steel’s management considers adjusted net earnings, adjusted net earnings per diluted share, adjusted EBITDA, and adjusted EBITDA margin 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, adjusted net earnings per diluted share, adjusted EBITDA, and adjusted EBITDA margin provides insight into management’s view and assessment of the Company’s ongoing operating performance because management does not consider the Adjustment Items when evaluating the Company’s financial performance. Adjusted net earnings, adjusted net earnings per diluted share, adjusted EBITDA, and adjusted EBITDA margin should not be considered a substitute for net earnings, earnings per diluted share or other financial measures as computed in accordance with U.S. GAAP and are not necessarily comparable to similarly titled measures used by other companies. We also present free cash flow, a non-GAAP measure of cash generated from operations after any investing activity and investable free cash flow, a non-GAAP measure of cash generated from operations after any investing activity adjusted for strategic capital expenditures. We believe that free cash flow and investable free cash flow provide further insight into the Company's overall utilization of cash. A condensed consolidated statement of operations (unaudited), condensed 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 regarding the Company and Nippon Steel Corporation ("NSC") that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. 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,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements expressing general views about future operating or financial results, operating or financial performance, trends, events or developments that we expect or anticipate will occur in the future, anticipated cost savings, potential capital and operational cash improvements and changes in the global economic environment, the construction or operation of new or existing facilities or capabilities, statements regarding our greenhouse gas emissions reduction goals, as well as statements regarding the proposed transaction between the Company and NSC, including the timing of the completion of the transaction. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of the Company’s or NSC’s control. It is possible that the Company’s or NSC’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management of the Company 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. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s or NSC's historical experience and our present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company or NSC to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally; and the risk the pending proposed transaction could distract management of the Company. The Company directs readers to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and Form 10-K for the year ended December 31, 2023, and the other documents it files with the SEC for other risks associated with the Company’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. All information in this report is as of the date above. The Company does not undertake any duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations whether as a result of new information, future events or otherwise, except as required by law. Founded in 1901, United States Steel Corporation is a leading steel producer. With an unwavering focus on safety, the Company’s customer-centric Best for All® strategy is advancing a more secure, sustainable future for U. S. Steel and its stakeholders. With a renewed emphasis on innovation, U. S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as U. S. Steel’s proprietary XG3® advanced high-strength steel. The Company also maintains competitively advantaged iron ore production and has an annual raw steelmaking capability of 25.4 million net tons. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe. For more information, please visit www.ussteel.com. ©2024 U. S. Steel All Rights Reserved

United States Steel Corporation Reports Third Quarter 2024 Results

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