United States Steel Corporation (NYSE: X) today provided first
quarter 2024 adjusted net earnings per diluted share guidance of
$0.80 to $0.84. First quarter 2024 adjusted EBITDA is expected to
be approximately $425 million.
Commenting on first quarter guidance President and Chief
Executive Officer David B. Burritt said, “We remain focused on
running our business as we make progress towards closing our
transaction with Nippon Steel Corporation. Our anticipated first
quarter performance is in-line with our prior outlook, reflecting
healthy steel demand, strong operating performance, and continued
focus from our employees on delighting our customers. Our North
American Flat-Rolled segment’s balanced and diverse markets are
keeping the order book strong. Meanwhile, our Mini Mill segment
continues to capture sequentially higher-priced spot orders to
drive better results compared with the fourth quarter. In Europe,
commercial and energy tailwinds and management cost improvements
are projected to drive better EBITDA than the fourth quarter. Our
Tubular segment is navigating softer first quarter demand and price
headwinds while still expecting to deliver strong margins.”
Burritt concluded, “We are entering the final stretch of our
in-flight Best for All® strategic investments. Our Big River Steel
dual coating line comes on-line in the second quarter followed by
our new state-of-the-art Big River 2 mini mill later in 2024. We
look forward to merging with Nippon Steel Corporation as the Best
Steelmaker with World-leading Capabilities.”
First Quarter Adjusted EBITDA Commentary
The Flat-Rolled segment’s adjusted EBITDA is expected to be
higher than the fourth quarter. Higher spot steel prices are
expected to be reflected in the segment’s average selling prices
further supported by the favorable impact from fixed-priced
contracts negotiated for 2024. These tailwinds are expected to be
partially offset by typical seasonal mining operations headwinds
experienced in the first quarter.
The Mini Mill segment's adjusted EBITDA is expected to nearly
double fourth quarter’s performance. Average selling prices are
expected to meaningfully increase sequentially reflecting the
segment’s majority market-based monthly contract and spot price
exposure. Pricing tailwinds are expected to be partially offset by
higher raw material costs. Separately, approximately $20 million of
anticipated construction-related costs are included in the
segment's adjusted results. These costs largely reflect the
scheduled start-up of the Big River Steel dual Galvalume® /
Galvanized coating line in the second quarter and the new Big River
2 mini mill in the second half of 2024.
The European segment’s adjusted EBITDA is expected to be higher
than the fourth quarter. Higher steel prices are expected to be
reflected in the segment’s average selling prices. Additionally,
lower energy costs and management cost improvements should improve
the segment’s financial performance.
The Tubular segment’s adjusted EBITDA is expected to be lower
than the fourth quarter. Lower selling prices are expected to
negatively impact the segment’s financial performance.
Additionally, lower shipment volumes are anticipated as rig counts
remain stagnant and natural gas demand softens due to a mild
winter.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
GUIDANCE
(Dollars in millions)
Reconciliation to Projected Adjusted
EBITDA Included in Guidance
Q1 2024
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
160
Estimated income tax provision
40
Estimated net interest and other financial
costs (income)
(45
)
Estimated depreciation, depletion, and
amortization
210
Projected EBITDA included in guidance
$
365
Estimated adjustments
60
Projected adjusted EBITDA included in
guidance
$
425
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS GUIDANCE
(Dollars in millions, except per share
amounts)
Reconciliation to Projected Adjusted
Net Earnings Attributable to U. S. Steel Included in
Guidance
Q1 2024
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
160
Estimated adjustments
45
Projected adjusted net earnings
attributable to United States Steel Corporation included in
guidance
$
205
Reconciliation to Projected Adjusted
Net Earnings Per Diluted Share Included in Guidance
Q1 2024
Projected net earnings per diluted share
included in guidance (mid-point of guidance)
$
0.64
Estimated adjustments
0.18
Projected adjusted net earnings per
diluted share included in guidance (mid-point of guidance)
$
0.82
Note: This reconciliation excludes the impact of the Company's
quarterly adjustment related to the surplus VEBA assets. See Note
18 in the Company's Annual Report on Form 10-K for the year ended
December 31, 2023, for an explanation of the surplus VEBA assets.
This excluded item is not expected to impact adjusted EBITDA.
Cautionary Note Regarding Forward-Looking Statements
This communication contains information regarding the Company
and 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, 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 or NSC, as
applicable, 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 possibility that the Company’s stockholders may
not approve the proposed transaction; the risks and uncertainties
related to securing the necessary stockholder approval; 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
or NSC’s common stock or American Depositary Receipts; 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 September 30, 2023 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. Risks related to NSC’s
forward-looking statements include, but are not limited to, changes
in regional and global macroeconomic conditions, particularly in
Japan, China and the United States; excess capacity and oversupply
in the steel industry; unfair trade and pricing practices in NSC’s
regional markets; the possibility of low steel prices or excess
iron ore supply; the possibility of significant increases in market
prices of essential raw materials; the possibility of depreciation
of the value of the Japanese yen against the U.S. dollar and other
major foreign currencies; the loss of market share to substitute
materials; NSC’s ability to reduce costs and improve operating
efficiency; the possibility of not completing planned alliances,
acquisitions or investments, or such alliances, acquisitions or
investments not having the anticipated results; natural disasters
and accidents or unpredictable events which may disrupt NSC’s
supply chain as well as other events that may negatively impact
NSC’s business activities; risks relating to CO2 emissions and
NSC’s challenge for carbon neutrality; the economic, political,
social and legal uncertainty of doing business in emerging
economies; the possibility of incurring expenses resulting from any
defects in our products or incurring additional costs and
reputational harm due to product defects of other steel
manufacturers; the possibility that we may be unable to protect our
intellectual property rights or face intellectual property
infringement claims by third parties; changes in laws and
regulations of countries where we operate, including trade laws and
tariffs, as well as tax, environmental, health and safety laws; and
the possibility of damage to our reputation and business due to
data breaches and data theft. All information in this communication
is as of the date above. Neither the Company nor NSC undertakes any
duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s or NSC’s
expectations whether as a result of new information, future events
or otherwise, except as required by law.
Additional Information and Where to Find It
This communication relates to the proposed transaction between
the United States Steel Corporation (the “Company”) and Nippon
Steel Corporation (“NSC”). In connection with the proposed
transaction, the Company has filed and will file relevant materials
with the United States Securities and Exchange Commission (“SEC”),
including the Company’s proxy statement on Schedule 14A (the “Proxy
Statement”), a definitive version of which was filed with the SEC
on March 12, 2024. The Company commenced disseminating the
definitive Proxy Statement to stockholders of the Company on or
about March 12, 2024. The Company may also file other documents
with the SEC regarding the proposed transaction. This communication
is not a substitute for the Proxy Statement or for any other
document that may be filed with the SEC in connection with the
proposed transaction. The proposed transaction will be submitted to
the Company’s stockholders for their consideration. BEFORE MAKING
ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE URGED TO READ
ALL RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, INCLUDING
THE PROXY STATEMENT (A DEFINITIVE FILING OF WHICH HAS BEEN MADE
WITH THE SEC), AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY, NSC AND THE PROPOSED TRANSACTION.
The Company’s stockholders will be able to obtain free copies of
the definitive Proxy Statement, as well as other documents
containing important information about the Company, NSC and the
proposed transaction once such documents are filed with the SEC,
without charge, at the SEC’s website (www.sec.gov). Copies of the
Proxy Statement and the other documents filed with the SEC by the
Company can also be obtained, without charge, by directing a
request to United States Steel Corporation, 600 Grant Street, Suite
1884, Pittsburgh, Pennsylvania 15219, Attention: Corporate
Secretary; telephone 412-433-1121, or from the Company’s website
www.ussteel.com.
Participants in the Solicitation
NSC, the Company and their directors, and certain of their
executive officers and employees may be deemed to be participants
in the solicitation of proxies from the Company’s stockholders in
respect of the proposed transaction. Information regarding the
directors and executive officers of the Company who may, under the
rules of the SEC, be deemed participants in the solicitation of the
Company’s stockholders in connection with the proposed transaction,
including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth in the Proxy
Statement, a definitive version of which was filed with the SEC on
March 12, 2024. Information about these persons is included in each
company’s annual proxy statement and in other documents
subsequently filed with the SEC, and was included in the definitive
version of the Proxy Statement filed with the SEC. Free copies of
the Proxy Statement and such other materials may be obtained as
described in the preceding paragraph.
Note Regarding Non-GAAP Financial Measures
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, adjusted net earnings per diluted share
and adjusted EBITDA are non-GAAP measures that exclude certain
charges that are not part of the Company’s core operations such as
restructuring or asset impairments (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 and believes these
measures are 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 are
not necessarily comparable to similarly titled measures used by
other companies.
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.
©2024 U. S. Steel. All Rights Reserved
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version on businesswire.com: https://www.businesswire.com/news/home/20240315196318/en/
Corporate Communications T – (412) 433-1300 E –
media@uss.com
Emily Chieng Investor Relations Officer T – (412) 618-9554 E –
ecchieng@uss.com
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