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ϳԹ Reports Third Quarter 2023 Results

  • Third quarter 2023 net earnings of $299 million, or $1.20 per diluted share
  • Third quarter 2023 adjusted net earnings of $350 million, or $1.40 per diluted share
  • Third quarter 2023 adjusted EBITDA of $578 million

PITTSBURGH--(BUSINESS WIRE)-- ϳԹ (NYSE: X) reported third quarter 2023 net earnings of $299 million, or $1.20 per diluted share. Adjusted net earnings was $350 million, or $1.40 per diluted share. This compares to third quarter 2022 net earnings of $490 million, or $1.85 per diluted share. Adjusted net earnings for the third quarter 2022 was $526 million, or $1.98 per diluted share.

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ϳԹ Third Quarter 2023 Highlights (Photo: Business Wire)

ϳԹ Third Quarter 2023 Highlights (Photo: Business Wire)

Commenting on the third quarter’s performance, U. S. Steel President and Chief Executive Officer David B. Burritt said, “Our business continues to safely deliver strong results highlighting the benefits of a diverse order book, well-run operations and a focused U. S. Steel team. Our diverse flat-rolled product portfolio allowed us to adapt to changing demand dynamics and our teamwork drove cost benefits in the quarter.”

Commenting on the Company’s Best for All® strategy, Burritt continued, “The third quarter marked another key milestone towards our Best for All future. Our non-grain oriented, or NGO, electrical steel line produced its first coil in September and first industrial grade coil in October. NGO steel is essential to our country’s green energy future and serves the automotive and power generation sectors. Our NGO line can produce the thinnest gauges, widest widths, and biggest coils in the domestic industry today. This investment further expands our capabilities to meet customers’ needs. The nearly $4 billion of strategic investment in the Mini Mill segment is progressing on-time and budget.”

Separately, Burritt provided an update on the Company's ongoing strategic alternatives review process, “As we announced in August, the Board of Directors, with the assistance of the management team and its advisors, is fully engaged in and is progressing a robust and competitive strategic alternatives review process to maximize stockholder value. Meanwhile, we are focused on running our business safely, delivering on our commitments to customers and executing on our on-going strategic investments to increase stockholder value. We continue to see strong performance in each of these areas. Thank you to our employees for remaining focused on the tasks at-hand and for continuing to put safety first while delivering the high quality steel customers expect.”

Earnings Highlights

Three Months Ended
September 30,

Nine Months Ended
September 30,

(Dollars in millions, except per share amounts)

2023

2022

2023

2022

Net Sales

$

4,431

$

5,203

$

13,909

$

16,727

Segment earnings (loss) before interest and income taxes

Flat-Rolled

$

225

$

518

$

449

$

1,840

Mini Mill

42

1

186

549

U. S. Steel Europe

(13

)

(32

)

25

512

Tubular

87

155

476

339

Other

7

21

(2

)

16

Total segment earnings before interest and income taxes

$

348

$

663

$

1,134

$

3,256

Other items not allocated to segments

(71

)

(49

)

(104

)

(270

)

Earnings before interest and income taxes

$

277

$

614

$

1,030

$

2,986

Net interest and other financial benefits

(64

)

(30

)

(182

)

(48

)

Income tax expense

42

154

237

684

Net earnings

$

299

$

490

$

975

$

2,350

Earnings per diluted share

$

1.20

$

1.85

$

3.86

$

8.38

Adjusted net earnings (a)

$

350

$

526

$

1,028

$

2,552

Adjusted net earnings per diluted share (a)

$

1.40

$

1.98

$

4.07

$

9.06

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

$

578

$

861

$

1,809

$

3,850

(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts. The prior year was retroactively adjusted to reflect the reclassification of stock-based compensation expense.

The Company will conduct a conference call on the third quarter earnings on Friday, October 27, 2023, 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, , and click on the “Investors” section. Replay will be available on the website after 10:30 a.m. Eastern on October 27, 2023.

UNITED STATES STEEL CORPORATION

PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2023

2022

2023

2022

OPERATING STATISTICS

Average realized price: ($/net ton unless otherwise noted) (a)

Flat-Rolled

1,036

1,232

1,045

1,312

Mini Mill

901

1,096

898

1,268

U. S. Steel Europe

852

1,021

910

1,121

U. S. Steel Europe (€/net ton)

783

1,013

840

1,049

Tubular

2,927

3,217

3,422

2,761

Steel shipments (thousands of net tons): (a)

Flat-Rolled

2,159

2,176

6,672

6,488

Mini Mill

561

529

1,807

1,651

U. S. Steel Europe

958

867

2,875

3,044

Tubular

104

126

346

390

Total steel shipments

3,782

3,698

11,700

11,573

Intersegment steel (unless otherwise noted) shipments (thousands of net tons):

Mini Mill to Flat-Rolled

145

53

370

252

Flat-Rolled to Mini Mill

2

7

2

30

Flat-Rolled to Mini Mill (pig iron)

95

210

Flat-Rolled to ϳԹE

30

Flat-Rolled to ϳԹE (b)

174

62

632

144

Raw steel production (thousands of net tons):

Flat-Rolled

2,390

2,265

7,312

6,894

Mini Mill

693

616

2,201

1,967

U. S. Steel Europe

990

946

3,295

3,250

Tubular

111

173

411

497

Raw steel capability utilization: (c)

Flat-Rolled

72

%

68

%

74

%

70

%

Mini Mill

83

%

74

%

89

%

80

%

U. S. Steel Europe

79

%

75

%

88

%

87

%

Tubular

49

%

76

%

61

%

74

%

CAPITAL EXPENDITURES (dollars in millions)

Flat-Rolled

132

136

375

365

Mini Mill

423

320

1,474

710

U. S. Steel Europe

24

19

66

53

Tubular

7

3

24

10

Other Businesses

Total

$

586

$

478

$

1,939

$

1,138

(a) Excludes intersegment shipments.

(b) Consists of coal in 2023 and iron ore pellets and fines in 2022.

(c) 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)

2023

2022

2023

2022

Net Sales

$

4,431

$

5,203

$

13,909

$

16,727

Operating expenses (income):

Cost of sales

3,838

4,359

11,952

12,843

Selling, general and administrative expenses

118

95

320

324

Depreciation, depletion and amortization

230

198

675

594

Earnings from investees

(51

)

(71

)

(76

)

(202

)

Asset impairment charges

4

157

Restructuring and other charges

18

23

21

57

Other gains, net

1

(15

)

(17

)

(32

)

Total operating expenses

4,154

4,589

12,879

13,741

Earnings before interest and income taxes

277

614

1,030

2,986

Net interest and other financial benefits

(64

)

(30

)

(182

)

(48

)

Earnings before income taxes

341

644

1,212

3,034

Income tax expense

42

154

237

684

Net earnings

299

490

975

2,350

Less: Net earnings attributable to noncontrolling interests

Net earnings attributable to ϳԹ

$

299

$

490

$

975

$

2,350

COMMON STOCK DATA:

Net earnings per share attributable to ϳԹ Stockholders

Basic

$

1.34

$

2.07

$

4.33

$

9.33

Diluted

$

1.20

$

1.85

$

3.86

$

8.38

Weighted average shares, in thousands

Basic

223,109

237,094

225,311

251,848

Diluted

253,070

266,264

255,080

281,569

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)

2023

2022

Increase (decrease) in cash, cash equivalents and restricted cash

Operating activities:

Net earnings

$

975

$

2,350

Depreciation, depletion and amortization

675

594

Asset impairment charges

4

157

Restructuring and other charges

21

57

Pensions and other postretirement benefits

(124

)

(164

)

Deferred income taxes

275

561

Working capital changes

227

(545

)

Income taxes receivable/payable

(86

)

(88

)

Other operating activities

(256

)

(172

)

Net cash provided by operating activities

1,711

2,750

Investing activities:

Capital expenditures

(1,939

)

(1,138

)

Proceeds from cost reimbursement government grants

53

Proceeds from sale of assets

4

28

Other investing activities

(8

)

Net cash used in investing activities

(1,935

)

(1,065

)

Financing activities:

Issuance of long-term debt, net of financing costs

241

291

Repayment of long-term debt

(69

)

(375

)

Common stock repurchased

(175

)

(699

)

Proceeds from government incentives

82

Other financing activities

(50

)

(51

)

Net cash provided by (used in) financing activities

(53

)

(752

)

Effect of exchange rate changes on cash

(3

)

(46

)

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

(280

)

887

Cash, cash equivalents and restricted cash at beginning of year

3,539

2,600

Cash, cash equivalents and restricted cash at end of period

$

3,259

$

3,487

UNITED STATES STEEL CORPORATION

CONDENSED BALANCE SHEET (Unaudited)

September 30,

December 31,

(Dollars in millions)

2023

2022

Cash and cash equivalents

$

3,222

$

3,504

Receivables, net

1,541

1,635

Inventories

2,304

2,359

Other current assets

328

368

Total current assets

7,395

7,866

Operating lease assets

116

146

Property, plant and equipment, net

9,911

8,492

Investments and long-term receivables, net

863

840

Intangibles, net

447

478

Goodwill

920

920

Other noncurrent assets

743

716

Total assets

$

20,395

$

19,458

Accounts payable and other accrued liabilities

2,939

3,016

Payroll and benefits payable

498

493

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

98

63

Other current liabilities

266

387

Total current liabilities

3,801

3,959

Noncurrent operating lease liabilities

79

105

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

4,129

3,914

Employee benefits

138

209

Deferred income tax liabilities

712

456

Other long-term liabilities

439

504

ϳԹ stockholders' equity

11,004

10,218

Noncontrolling interests

93

93

Total liabilities and stockholders' equity

$

20,395

$

19,458

UNITED STATES STEEL CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF ADJUSTED NET EARNINGS

Three Months Ended
September 30,

Nine Months Ended
September 30,

(In millions of dollars)

2023

2022

2023

2022

Net earnings and diluted net earnings per share attributable to ϳԹ, as reported

$

299

$

1.20

$

490

$

1.85

$

975

$

3.86

$

2,350

$

8.38

Restructuring and other charges

18

23

21

57

Stock-based compensation expense (a)

14

13

37

45

VEBA asset surplus adjustment

(6

)

(36

)

Asset impairment charges

4

157

Environmental remediation charges

9

13

11

13

Debt extinguishment

(2

)

(2

)

Strategic alternatives review process costs

16

16

Granite City idling costs

14

14

Other charges, net

1

2

(2

)

Adjusted pre-tax net earnings to ϳԹ

365

537

1,044

2,618

Tax impact of adjusted items (b)

(15

)

(11

)

(16

)

(66

)

Adjusted net earnings and diluted net earnings per share attributable to ϳԹ

$

350

$

1.40

$

526

$

1.98

$

1,028

$

4.07

$

2,552

$

9.06

Weight average diluted ordinary shares outstanding, in millions

253.1

266.3

255.1

281.6

(a) The prior year was retroactively adjusted to reflect the reclassification of stock-based compensation expense. The adjustment was $10 million, $28 million, $10 million and $34 million, net of taxes, for the three and nine months ended September 30, 2023, and 2022, respectively.

(b) The tax impact of adjusted items for the three months and nine months ended September 30, 2023, is calculated using a blended tax rate of 24% for domestic items and 21% for ϳԹE items. The tax impact of adjusted items for the three and nine months ended September 30, 2022, was calculated using a blended tax rate of 25% for domestic items and 21% for ϳԹE items.

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)

2023

2022

2023

2022

Reconciliation to Adjusted EBITDA

Net earnings attributable to ϳԹ

$

299

$

490

$

975

$

2,350

Income tax expense

42

154

237

684

Net interest and other financial benefits

(64

)

(30

)

(182

)

(48

)

Depreciation, depletion and amortization expense

230

198

675

594

EBITDA

507

812

1,705

3,580

Restructuring and other charges

18

23

21

57

Stock-based compensation expense (a)

14

13

37

45

Asset impairment charges

4

157

Environmental remediation charges

9

13

11

13

Strategic alternatives review process costs

16

16

Granite City idling costs

14

14

Other charges, net

1

(2

)

Adjusted EBITDA

$

578

$

861

$

1,809

$

3,850

Net earnings margin (b)

6.7

%

9.4

%

7.0

%

14.0

%

Adjusted EBITDA margin (b)

13.0

%

16.5

%

13.0

%

23.0

%

(a) The prior year was retroactively adjusted to reflect the reclassification of stock-based compensation expense.

(b) 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)

2022

2023

2023

2023

Four Quarters

Net cash provided by operating activities

$

755

$

181

$

713

$

817

$

2,466

Net cash used in investing activities

(614

)

(738

)

(612

)

(585

)

(2,549

)

Free cash flow

141

(557

)

101

232

(83

)

Strategic capital expenditures

479

565

476

423

1,943

Investable free cash flow

$

620

$

8

$

577

$

655

$

1,860

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, VEBA asset surplus adjustment, asset impairment charges, environmental remediation charges, debt extinguishment, strategic alternatives review process costs, Granite City idling costs, tax impact of adjusted items 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 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 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, the construction or operation of new or existing facilities or operating capabilities, the timing, size and form of share repurchase transactions, operating or financial 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 the global economic environment, including supply and demand conditions, inflation, interest rates, supply chain disruptions and changes in 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, statements regarding existing or new regulations 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 include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding goals, plans and expectations about our prospects for the future and other future events, many of which, by their nature, are inherently uncertain, qualified by important factors 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, whether the objectives of the Company's previously announced strategic alternatives review process will be achieved; the terms, structure, timing, benefits and costs of any strategic transaction; and whether any such transaction will be consummated at all; the risk that the strategic alternatives review process and its announcement could have an adverse effect on the ability of the Company to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, shareholders and other business relationships and on its operating results and business generally; the risk that the strategic alternatives review process could divert the attention and time of the Company’s management, the risk of any unexpected costs or expenses resulting from the strategic alternatives review process; the risk of any litigation relating to the strategic alternatives review process; and the risks and uncertainties described in “Item 1A. Risk Factors” in our Annual report on Form 10-K for the year ended December 31, 2022 and those described from time to time in our future reports filed with the Securities and Exchange Commission.

References to (i) “U. S. Steel,” “the Company,” “we,” “us,” and “our” refer to ϳԹ and its consolidated subsidiaries unless otherwise indicated by the context and (ii) “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, ϳԹ 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 .

Corporate Communications
T - (412) 433-1300
E - media@uss.com

Emily Chieng
Investor Relations Officer
T - (412) 618-9554
E - ecchieng@uss.com

Source: ϳԹ