Announcing a new $500 million stock buyback
authorization
- Second quarter net earnings of $978 million. Reported net
earnings per diluted share of $3.42
- Record second quarter adjusted net earnings of $1,104
million. Adjusted net earnings per diluted share of $3.86
- Record second quarter adjusted EBITDA of $1,620
million
United States Steel Corporation (NYSE: X) reported second
quarter 2022 net earnings of $978 million, or $3.42 per diluted
share. Adjusted net earnings was $1,104 million, or $3.86 per
diluted share. This compares to second quarter 2021 net earnings of
$1,012 million, or $3.53 per diluted share. Adjusted net earnings
for the second quarter 2021 was $1,050 million, or $3.67 per
diluted share.
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United States Steel Corporation Reports
Record Second Quarter 2022 Results (Graphic: Business Wire)
Earnings Highlights
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions, except per share
amounts)
2022
2021
2022
2021
Net Sales
$
6,290
$
5,025
$
11,524
$
8,689
Segment earnings (loss) before interest
and income taxes
Flat-Rolled
777
579
1,290
725
Mini Mill (a)
270
284
548
416
U. S. Steel Europe
280
207
544
312
Tubular
107
—
184
(29
)
Other
(12
)
14
(5
)
22
Total segment earnings before interest
and income taxes
$
1,422
$
1,084
$
2,561
$
1,446
Other items not allocated to segments
(168
)
(50
)
(189
)
13
Earnings before interest and income
taxes
$
1,254
$
1,034
$
2,372
$
1,459
Net interest and other financial costs
(8
)
59
(18
)
392
Income tax expense
284
(37
)
530
(36
)
Net earnings
$
978
$
1,012
$
1,860
$
1,103
Earnings per diluted share
$
3.42
$
3.53
$
6.45
$
4.02
Adjusted net earnings (b)
$
1,104
$
1,050
$
2,002
$
1,332
Adjusted net earnings per diluted share
(b)
$
3.86
$
3.67
$
6.95
$
4.85
Adjusted earnings before interest,
income taxes, depreciation and amortization (EBITDA) (b)
$
1,620
$
1,286
$
2,957
$
1,837
(a) Mini Mill segment added after January
15, 2021 with the purchase of the remaining equity interest in Big
River Steel.
(b) Please refer to the non-GAAP Financial
Measures section of this document for the reconciliation of these
amounts.
“Our record-best second quarter was driven by strong performance
across our diverse operating segments,” commented U. S. Steel
President and Chief Executive Officer David B. Burritt. “As we
continue to demonstrate the execution of our strategy, it is timely
to reflect upon just how much progress we’ve made over the past
twelve months, exhibiting continued record safety performance,
generating nearly $6.7 billion of adjusted EBITDA and over $4
billion of free cash flow, building over $3 billion of cash, and
returning nearly $850 million to stockholders, including July's
buyback activity.”
Burritt continued, “The bold decisions we have made to invest in
our competitive advantages make us a stronger business that creates
enduring value for our stockholders through the cycle. The
well-timed acquisition of Big River Steel created a best-in-class
sustainable Mini Mill segment representing nearly 30% of U. S.
Steel’s domestic flat-rolled steel EBITDA over the past twelve
months. We invested in state-of-the-art electric arc furnace
steelmaking through challenging energy dynamics and our Tubular
segment is now profitably serving the resurging oil and gas
markets. Our revitalized integrated operations are benefiting from
our diverse end-market exposure and value-focused commercial
strategy that leverages our deep customer relationships and
lowest-cost iron ore capabilities to produce profitable steel
solutions. In Europe, our Slovakian operations are navigating
challenging conditions and continuing to implement resiliency plans
and cost mitigation actions in the event of continued economic
slowdown in the region.”
Commenting on the Company’s outlook, Burritt concluded, “We are
bullish on U. S. Steel’s future and confident in our ability to
execute our Best for All® strategy. While some consumer-oriented
markets like automotive and appliance are softer, line pipe and
energy demand is accelerating. We have demonstrated a commitment to
achieving and maintaining a strong balance sheet, a supportive debt
maturity profile, and a balanced approach to capital allocation.
We’ve completed our $800 million stock buyback authorization and
are pleased to announce a new $500 million stock buyback
authorization today. We are a ‘show me’ story, which gives us the
opportunity to continue to consider our stock as an attractive
investment. Through passion and perseverance, we look forward to
demonstrating the power of our strategy and the improvement in the
value of our company.”
Capital Allocation
Update:
During the second quarter 2022, the Company repurchased $400
million of its common stock. Third quarter 2022 to date, the
Company has repurchased $127 million, exhausting the remaining
portion of the $500 million share repurchase program announced in
January 2022. The Board of Directors has authorized a new $500
million share repurchase program to commence in the third quarter
2022 under which the Company’s outstanding common stock may be
repurchased from time to time at the discretion of management.
*****
The Company will conduct a conference call on the second quarter
2022 earnings on Friday, July 29, 2022, at 8:30 a.m. Eastern. To
listen to the webcast of the conference call and to access the
Company's slide presentation, visit the U. S. Steel website,
www.ussteel.com, and click on the “Investors” section. Replay will
be available on the website after 10:30 a.m. on July 29, 2022.
UNITED STATES STEEL
CORPORATION
PRELIMINARY SUPPLEMENTAL
STATISTICS (Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
2022
2021
OPERATING STATISTICS
Average realized price: ($/net ton unless
otherwise noted) (a)
Flat-Rolled
1,339
1,078
1,352
983
Mini Mill (b)
1,331
1,207
1,349
1,106
U. S. Steel Europe
1,217
905
1,162
831
U. S. Steel Europe (€/net ton)
1,142
750
1,064
689
Tubular
2,727
1,633
2,543
1,513
Steel shipments (thousands of net tons):
(a)
Flat-Rolled
2,365
2,326
4,312
4,658
Mini Mill (b)
615
616
1,122
1,063
U. S. Steel Europe
1,067
1,167
2,177
2,210
Tubular
136
105
264
194
Total Steel Shipments
4,183
4,214
7,875
8,125
Intersegment steel (unless otherwise
noted) shipments (thousands of net tons):
Flat-Rolled to USSE (iron ore pellets and
fines)
82
223
82
439
Flat-Rolled to Mini Mill
23
—
23
—
Mini Mill (b) to Flat-Rolled
110
125
199
186
Raw steel production (thousands of net
tons):
Flat-Rolled
2,424
2,485
4,629
5,066
Mini Mill (b)
750
747
1,351
1,257
U. S. Steel Europe
1,216
1,279
2,304
2,476
Tubular
168
114
324
207
Raw steel capability utilization: (c)
Flat-Rolled
74
%
59
%
71
%
60
%
Mini Mill (b)
91
%
91
%
83
%
84
%
U. S. Steel Europe
98
%
103
%
93
%
100
%
Tubular
75
%
51
%
73
%
46
%
CAPITAL EXPENDITURES (dollars in
millions)
Flat-Rolled
112
93
229
167
Mini Mill (b)
179
20
390
56
U. S. Steel Europe
17
12
34
26
Tubular
3
22
7
34
Other Businesses
—
1
—
1
Total
$
311
$
148
$
660
$
284
(a) Excludes intersegment shipments.
(b) Mini Mill segment added after January
15, 2021 with the purchase of the remaining equity interest in Big
River Steel.
(c) 2022 based on annual raw steel
production capability of 13.2 million net tons for Flat-Rolled, 3.3
million for Mini Mill, 5.0 million net tons for U. S. Steel Europe
and 0.9 million for Tubular. 2021 based on annual raw steel
production capability of 17.0 million net tons for Flat-Rolled, 3.3
million for Mini Mill, 5.0 million net tons for U. S. Steel Europe
and 0.9 million for Tubular.
UNITED STATES STEEL
CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
(Dollars in millions, except per share
amounts)
2022
2021
2022
2021
Net Sales
$
6,290
$
5,025
$
11,524
$
8,689
Operating expenses (income):
Cost of sales
4,661
3,678
8,484
6,752
Selling, general and administrative
expenses
112
106
229
208
Depreciation, depletion and
amortization
198
202
396
391
Earnings from investees
(95
)
(35
)
(131
)
(49
)
Asset impairment charges
151
28
157
28
Gain on equity investee transactions
—
—
—
(111
)
Restructuring and other charges
17
31
34
37
Net gains on sale of assets
(2
)
(15
)
(4
)
(15
)
Other gains, net
(6
)
(4
)
(13
)
(11
)
Total operating expenses
5,036
3,991
9,152
7,230
Earnings before interest and income
taxes
1,254
1,034
2,372
1,459
Net interest and other financial
(benefits) costs
(8
)
59
(18
)
392
Earnings before income taxes
1,262
975
2,390
1,067
Income tax expense (benefit)
284
(37
)
530
(36
)
Net earnings
978
1,012
1,860
1,103
Less: Net earnings attributable to
noncontrolling interests
—
—
—
—
Net earnings attributable to United
States Steel Corporation
$
978
$
1,012
$
1,860
$
1,103
COMMON STOCK DATA:
Net earnings per share attributable to
United States Steel Corporation Stockholders
Basic
$
3.80
$
3.75
$
7.17
$
4.25
Diluted
$
3.42
$
3.53
$
6.45
$
4.02
Weighted average shares, in thousands
Basic
257,267
269,872
259,348
259,668
Diluted
286,680
286,337
289,246
274,512
Dividends paid per common share
$
0.05
$
0.01
$
0.10
$
0.02
UNITED STATES STEEL
CORPORATION
CONDENSED CASH FLOW STATEMENT
(Unaudited)
Six Months Ended June 30,
(Dollars in millions)
2022
2021
Increase (decrease) in cash, cash
equivalents and restricted cash
Operating activities:
Net earnings
$
1,860
$
1,103
Depreciation, depletion and
amortization
396
391
Asset impairment charges
157
28
Gain on equity investee transactions
—
(111
)
Restructuring and other charges
34
37
Loss on debt extinguishment
2
256
Pensions and other postretirement
benefits
(106
)
(46
)
Deferred income taxes
247
(77
)
Working capital changes
(925
)
(429
)
Income taxes receivable/payable
229
47
Other operating activities
(218
)
(96
)
Net cash provided by operating
activities
1,676
1,103
Investing activities:
Capital expenditures
(660
)
(284
)
Acquisition of Big River Steel, net of
cash acquired
—
(625
)
Proceeds from cost reimbursement
government grants
53
—
Proceeds from sale of assets
12
25
Other investing activities
(7
)
(1
)
Net cash used in investing activities
(602
)
(885
)
Financing activities:
Repayment of short-term debt
—
(180
)
Revolving credit facilities - borrowings,
net of financing costs
—
50
Revolving credit facilities -
repayments
—
(911
)
Issuance of long-term debt, net of
financing costs
4
825
Repayment of long-term debt
(73
)
(1,418
)
Net proceeds from public offering of
common stock
—
790
Common stock repurchased
(522
)
—
Proceeds from government incentives
82
—
Other financing activities
(39
)
(11
)
Net cash used in financing activities
(548
)
(855
)
Effect of exchange rate changes on
cash
(27
)
(9
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
499
(646
)
Cash, cash equivalents and restricted cash
at beginning of year
2,600
2,118
Cash, cash equivalents and restricted cash
at end of period
$
3,099
$
1,472
UNITED STATES STEEL
CORPORATION
CONDENSED BALANCE SHEET
(Unaudited)
June 30,
December 31,
(Dollars in millions)
2022
2021
Cash and cash equivalents
$
3,035
$
2,522
Receivables, net
2,602
2,089
Inventories
3,014
2,210
Other current assets
384
331
Total current assets
9,035
7,152
Operating lease assets
163
185
Property, plant and equipment, net
7,443
7,254
Investments and long-term receivables,
net
778
694
Intangible, net
497
519
Goodwill
920
920
Other noncurrent assets
1,022
1,092
Total assets
$
19,858
$
17,816
Accounts payable and other accrued
liabilities
3,385
2,908
Payroll and benefits payable
488
425
Short-term debt and current maturities of
long-term debt
54
28
Other current liabilities
641
491
Total current liabilities
4,568
3,852
Noncurrent operating lease liabilities
119
136
Long-term debt, less unamortized discount
and debt issuance costs
3,869
3,863
Employee benefits
206
235
Other long-term liabilities
805
627
United States Steel Corporation
stockholders' equity
10,198
9,010
Noncontrolling interests
93
93
Total liabilities and stockholders'
equity
$
19,858
$
17,816
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS
Three Months Ended June 30,
Six months ended June 30,
(In millions of dollars)
2022
2021
2022
2021
Net earnings and diluted net earnings per
share attributable to United States Steel Corporation, as
reported
$
978
$
3.42
$
1,012
$
3.53
$
1,860
$
6.45
$
1,103
$
4.02
Restructuring and other charges
17
31
34
37
Asset impairment charges
151
28
157
28
Other charges, net
—
6
(2
)
48
Gains on assets sold and previously held
investments
—
(15
)
—
(126
)
Debt extinguishment
—
—
—
254
Adjusted pre-tax net earnings to United
States Steel Corporation
1,146
1,062
2,049
1,344
Tax impact of adjusted items (a)
(42
)
(12
)
(47
)
(12
)
Adjusted net earnings and diluted net
earnings per share attributable to United States Steel Corporation
(b)
1,104
1,050
2,002
1,332
Weight average diluted ordinary shares
outstanding, in millions
286.7
$
3.86
286.3
$
3.67
289.2
$
6.95
274.5
$
4.85
(a) Tax effect of the adjustments was
applied using a blended tax rate of 25%.
(b) Diluted net earnings per share were
adjusted by increasing adjusted net earnings by $3 million for the
three months ended June 30, 2022, and by $7 million for the six
months ended June 30, 2022 for the adoption of ASU 2020-06 which
assumes outstanding convertible notes are converted to shares at
the beginning of the period.
Note: The reported net earnings
attributable to U. S. Steel for the three and six months ended June
30, 2021 and for the six months ended June 30, 2022 includes income
tax benefits of $95 million and $7 million, respectively, from the
reversals of net valuation allowances. These items were presented
as adjustments to arrive at Adjusted net earnings attributable to
U. S. Steel in prior period presentations. The reconciliations for
the three and six months ended June 30, 2021 presented above have
been recast to reflect the removal of these adjustments in
accordance with Securities and Exchange Commission guidance.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED
EBITDA
Three Months Ended June 30,
Six months ended June 30,
(Dollars in millions)
2022
2021
2022
2021
Reconciliation to Adjusted EBITDA
Net earnings attributable to United States
Steel Corporation
$
978
$
1,012
$
1,860
$
1,103
Income tax expense
284
(37
)
530
(36
)
Net interest and other financial
(benefits) costs
(8
)
59
(18
)
392
Depreciation, depletion and amortization
expense
198
202
396
391
EBITDA
1,452
1,236
2,768
1,850
Restructuring and other charges
17
31
34
37
Asset impairment charges
151
28
157
28
Other charges, net
—
6
(2
)
48
Gains on assets sold and previously held
investments
—
(15
)
—
(126
)
Adjusted EBITDA
1,620
1,286
2,957
1,837
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF PAST TWELVE
MONTHS OF ADJUSTED EBITDA
3rd
4th
1st
2nd
Quarter
Quarter
Quarter
Quarter
Total of the
(Dollars in millions)
2021
2021
2022
2022
Four Quarters
Reconciliation to Adjusted EBITDA
Net earnings attributable to United States
Steel Corporation
$
2,002
$
1,069
$
882
$
978
$
4,931
Income tax expense
260
(54
)
246
284
736
Net interest and other financial costs
(benefits)
80
130
(10
)
(8
)
192
Depreciation, depletion and amortization
expense
196
204
198
198
796
EBITDA
2,538
1,349
1,316
1,452
6,655
Restructuring and other charges
—
91
17
17
125
Asset impairment charges
—
245
6
151
402
Other charges, net
(12
)
42
(2
)
—
28
Losses on assets sold and previously held
investments
7
1
—
—
8
Gain on sale of Transtar
(506
)
—
—
—
(506
)
Adjusted EBITDA
$
2,027
$
1,728
$
1,337
$
1,620
$
6,712
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF FREE CASH
FLOW
Six Months Ended June 30,
(Dollars in millions)
2022
2021
Net cash provided by operating
activities
$
1,676
$
1,103
Net cash used in investing activities
(602
)
(885
)
Cash used in dividends paid
(26
)
(5
)
Free cash flow
$
1,048
$
213
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF PAST TWELVE
MONTHS OF FREE CASH FLOW
3rd
4th
1st
2nd
Quarter
Quarter
Quarter
Quarter
Total of the
(Dollars in millions)
2021
2021
2022
2022
Four Quarters
Net cash provided by operating
activities
$
1,502
$
1,485
$
771
$
905
4,663
Net cash used in investing activities
449
(404
)
(352
)
(250
)
(557
)
Cash used in dividends paid
(3
)
(15
)
(13
)
(13
)
(44
)
Free cash flow
$
1,948
$
1,066
$
406
$
642
$
4,062
We present adjusted net earnings, adjusted net earnings per
diluted share, earnings 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, 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, asset impairment charges,
gains on asset sold and previously held investments, debt
extinguishment, tax impact of adjusted items, gain on sale of
Transtar and other charges, net (Adjustment Items). Adjusted EBITDA
is also a non-GAAP measure that excludes the effects of certain
Adjustment Items. We present adjusted net earnings, adjusted net
earnings 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, adjusted net earnings 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, adjusted net earnings 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, adjusted net earnings 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 Adjustment Items when evaluating the Company’s
financial performance. Adjusted net earnings, adjusted net earnings
per diluted share and adjusted EBITDA 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 is
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
dividends paid to stockholders. We believe that free cash flow
provides 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 that may constitute
“forward-looking statements” within the meaning of Section 27A 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,”
“plan,” “goal,” “future,” “will,” “may,” and similar expressions or
by using future dates in connection with any discussion of, among
other things, financial performance, the construction or operation
of new and existing facilities, the timing, size and form of share
repurchase transactions, operating performance, trends, events or
developments that we expect or anticipate will occur in the future,
statements relating to volume changes, share of sales and earnings
per share changes, anticipated cost savings, potential capital and
operational cash improvements, changes in global supply and demand
conditions and prices for our products, international trade duties
and other aspects of international trade policy, statements
regarding our future strategies, products and innovations,
statements regarding our greenhouse gas emissions reduction goals
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, 2021 and those
described from time to time in our future reports filed with the
Securities and Exchange Commission.
References to “U. S. Steel,” “the Company,” “we,” “us,” and
“our” refer to United States Steel Corporation and its consolidated
subsidiaries, and references to “Big River Steel” refer to Big
River Steel Holdings LLC and its direct and indirect subsidiaries
unless otherwise indicated by the context.
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 22.4 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220728005812/en/
Arista Joyner Manager Corporate Communications T - (412)
433-3994 E - AEjoyner@uss.com
Kevin Lewis Vice President Investor Relations T - (412) 433-6935
E - KLewis@uss.com
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