2014

United States Steel Corporation Reports 2012 Fourth Quarter And Full-year Results - Fourth quarter reportable segment and Other Businesses income from operations of $59 million

- Fourth quarter net loss of $50 million, or $0.35 per diluted share including a $9 million, or $0.06 per diluted share, favorable settlement related to a supplier contract dispute

- Full-year reportable segment and Other Businesses income from operations was $855 million; full-year net loss was $124 million, or $0.86 per diluted share, including a net loss of $353 million primarily due to the sale of U. S. Steel Serbia

- Fourth quarter shipments of 5.2 million tons and net sales of $4.5 billion

- Strong liquidity position with $570 million of cash and $2.4 billion of total liquidity

PITTSBURGH, Jan. 29, 2013 /PRNewswire-FirstCall/ -- United States Steel Corporation (NYSE:  X) reported a fourth quarter 2012 net loss of $50 million, or $0.35 per diluted share, compared to third quarter 2012 net income of $44 million, or $0.28 per diluted share, and a fourth quarter 2011 net loss of $211 million, or $1.46 per diluted share. For full-year 2012, U. S. Steel reported a net loss of $124 million, or $0.86 per diluted share, which included a net loss of $353 million primarily due to the sale of U. S. Steel Serbia.  For full-year 2011, U. S. Steel reported a net loss of $53 million, or $0.37 per diluted share, which included an $11 million after-tax environmental remediation charge.  Net loss for the fourth quarter 2012 included a $9 million, or $0.06 per diluted share, favorable settlement related to a supplier contract dispute.  Net income for the third quarter 2012 included a $22 million, or $0.13 per diluted share, after-tax charge for employee lump sum payments as provided in the new labor agreement.  Net loss for the fourth quarter 2011 included $51 million, or $0.35 per diluted share, of net foreign currency losses and an $11 million, or $0.08 per diluted share, after-tax environmental remediation charge.

Earnings Highlights








(Dollars in millions, except per share amounts)

4Q 2012

3Q 2012

4Q 2011

2012

2011

Net Sales

$      4,487

$      4,652

$      4,819

$    19,328

$    19,884

Segment income (loss) from operations







Flat-rolled

$          11

$          29

$         (72)

$         400

$         469


U. S. Steel Europe

7

27

(89)

34

(162)


Tubular

32

102

119

366

316


Other Businesses

9

13

16

55

46

Total reportable segment and Other Businesses income (loss) from operations

$          59

$         171

$         (26)

$         855

$         669

Postretirement benefit expense

(69)

(74)

(99)

(297)

(386)

Other items not allocated to segments

15

(35)

(18)

(311)

(18)

Income (loss) from operations

$            5

$          62

$        (143)

$         247

$         265

Net interest and other financial costs

64

45

102

241

238

Income tax (benefit) provision

(8)

(27)

(34)

131

80

Less: Net loss attributable to the noncontrolling interests

(1)

-

-

(1)

-

Net (loss) income attributable to United States Steel Corporation

$          (50)

$           44

$        (211)

$        (124)

$          (53)

-Per basic share

$       (0.35)

$        0.30

$       (1.46)

$       (0.86)

$       (0.37)

-Per diluted share

$       (0.35)

$        0.28

$       (1.46)

$       (0.86)

$       (0.37)








Commenting on results, U. S. Steel Chairman and CEO John P. Surma said, "For the third consecutive quarter all three of our reportable segments had positive operating results despite the uncertain global economic environment. Lower drilling and project line pipe activity, as well as continued high import levels, significantly reduced our Tubular segment's results.  For our Flat-rolled segment, our profitability was negatively affected by the uncertain domestic fiscal situation as well as continued high levels of flat-rolled steel imports."

The company reported a fourth quarter 2012 reportable segment and Other Businesses income from operations of $59 million, or $11 per ton, compared to income of $171 million, or $32 per ton, in the third quarter of 2012 and a loss of $26 million, or $5 per ton, in the fourth quarter of 2011.  For the year 2012, reportable segment and Other Businesses income from operations was $855 million versus $669 million for the year 2011. 

For the full year 2012, we recorded a tax provision of $131 million on our pre-tax income of $6 million.  The tax provision does not reflect any tax benefit for pre-tax losses in Canada, which is a jurisdiction where we have recorded a full valuation allowance on deferred tax assets.  In addition, no material tax benefit was recorded on the $399 million loss on the sale of U. S. Steel Serbia in 2012.

As of December 31, 2012, U. S. Steel had $570 million of cash and $2.4 billion of total liquidity compared to $408 million of cash and $1.8 billion of total liquidity at December 31, 2011.  In 2012 net debt as reflected on the balance sheet was reduced by approximately $450 million as cash from operations in excess of capital spending was used to repay borrowings on our credit facilities and increase cash on hand.

Reportable Segments and Other Businesses 

Flat-rolled fourth quarter results remained positive but decreased from the third quarter due to lower average realized prices and shipments, partially offset by lower operating costs.  Average realized prices and shipments were lower compared to the third quarter, as cautious purchasing patterns continued in light of the uncertain global economic outlook and the domestic fiscal situation and compressed mill lead times.  Operating costs decreased due to lower raw materials and repairs and maintenance costs partially offset by higher natural gas costs.

Fourth quarter results for our European segment remained positive but lower than the third quarter.  Average realized prices decreased reflecting lower spot market and quarterly contract pricing, while shipments remained comparable to the third quarter.  Operating costs decreased compared to the third quarter primarily due to lower raw materials costs partially offset by higher energy costs.

Fourth quarter results for our Tubular segment were well below third quarter results.  Average realized prices and shipments decreased as end users reduced drilling activity and project line pipe purchases were delayed.  Inventory management and continued high import levels also adversely affected order rates as we approached year-end.  Operating costs increased due to lower production levels.

Outlook  

Commenting on U. S. Steel's outlook for the first quarter, Surma said, "We continue to be challenged by uncertain global economic and steel market conditions.  We expect a slight improvement in the European and Tubular segment operating results with Flat-rolled segment results expected to be near breakeven.  Total reportable segment and Other Businesses operating results are expected to be comparable to the fourth quarter."  

We expect Flat-rolled segment results to be near breakeven in the first quarter. Steel buyers in North America continued to exhibit caution early in the year, but recent increases in our daily order entry rates suggest increased spot market demand as the quarter progresses.  We expect higher shipments in the first quarter than the fourth quarter with increases across many of our industry segments.  Average spot prices are expected to be higher than the fourth quarter as recently announced price increases take effect.  Lower prices for market-based contracts, which tend to lag the spot market, are expected to offset the higher spot market prices with overall first quarter average realized prices for the Flat-rolled segment being comparable to the fourth quarter.  Raw materials costs are expected to decrease slightly as lower coal prices are partially offset by higher scrap prices.  Total operating costs are expected to be slightly higher compared to the fourth quarter.

First quarter results for our European segment are projected to improve compared to the fourth quarter due to a significant increase in shipments.  Despite continued economic challenges, shipments are anticipated to increase due to additional contract volume and improving spot market activity caused by service center and distributor restocking.  Average realized prices are expected to decrease due to a higher mix of hot-rolled shipments as well as the effect of lower firm contract prices, which are partially offset by increasing spot market prices.  Iron ore costs are projected to increase in the first quarter.    

We expect first quarter results for our Tubular segment to improve compared to the fourth quarter due to decreased operating costs and a slight increase in shipments as drilling activity begins to improve.  Average realized prices are expected to be slightly lower as compared to the fourth quarter, while operating costs are expected to decrease due to reduced repairs and maintenance costs and improved operating efficiencies.  

*****

This release contains forward-looking statements with respect to market conditions, operating costs, shipments, prices, capital spending, and employee benefit costs and payments.  Although we believe that we are experiencing a gradual economic recovery, there are signs of continued economic issues, including the European sovereign debt and domestic fiscal situations.  U. S. Steel cannot control or predict the impact.  Other more normal factors that could affect market conditions, costs, shipments and prices for both North American and European operations include: (a) foreign currency fluctuations and related activities; (b) global product demand, prices and mix; (c) global and company steel production levels; (d) plant operating performance; (e) natural gas, electricity, raw materials and transportation prices, usage and availability; (f) international trade developments, including court decisions, legislation and agency decisions on petitions and sunset reviews; (g) the impact of fixed prices in energy and raw materials contracts (many of which have terms of one year or longer) as compared to short-term contract and spot prices of steel products; (h) changes in environmental, tax, pension and other laws; (i) the terms of collective bargaining agreements; (j) employee strikes or other labor issues; and (k) U.S. and global economic performance and political developments.  Domestic steel shipments and prices could be affected by import levels and actions taken by the U.S. Government and its agencies, including those related to CO2 emissions, climate change and shale gas development.  Economic conditions and political factors in Europe and Canada that may affect U. S. Steel Europe's and U. S. Steel Canada's results include, but are not limited to: (l) taxation; (m) nationalization; (n) inflation; (o) fiscal instability; (p) political issues; (q) regulatory actions; and (r) quotas, tariffs, and other protectionist measures.  In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, cautionary statements identifying important factors, but not necessarily all factors, that could cause actual results to differ materially from those set forth in the forward-looking statements have been included in U. S. Steel's Annual Report on Form 10-K for the year ended December 31, 2011, and in subsequent filings for U. S. Steel.

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.

The company will conduct a conference call on fourth quarter earnings on Tuesday, January 29, at 3 p.m. EST.  To listen to the webcast of the conference call, visit the U. S. Steel website, www.ussteel.com, and click on "Overview" then "Current Information" under the "Investors" section.

For more information on U. S. Steel, visit our website at www.ussteel.com.

 

UNITED STATES STEEL CORPORATION

STATEMENT OF OPERATIONS (Unaudited)















Quarter Ended


Year Ended




Dec. 31


Sept. 30


Dec. 31


Dec. 31

Dec. 31

(Dollars in millions)

2012


2012


2011


2012

2011












NET SALES

$       4,487


$       4,652


$       4,819


$     19,328

$     19,884












OPERATING EXPENSES (INCOME):










Cost of sales (excludes items shown below)

4,216


4,311


4,647


17,630

18,326


Selling, general and administrative expenses

142


166


183


654

733


Depreciation, depletion and amortization

171


163


169


661

681


Income from investees

(28)


(48)


(19)


(144)

(85)


Net (gain) loss on disposal of assets

(12)


(1)


(15)


296

(25)


Other income, net

(7)


(1)


(3)


(16)

(11)














Total operating expenses

4,482


4,590


4,962


19,081

19,619












INCOME (LOSS) FROM OPERATIONS

5


62


(143)


247

265

Net interest and other financial costs

64


45


102


241

238












(LOSS) INCOME BEFORE INCOME TAXES AND 










NONCONTROLLING INTERESTS

(59)


17


(245)


6

27

Income tax (benefit) provision

(8)


(27)


(34)


131

80












Net (loss) income 

(51)


44


(211)


(125)

(53)


Less: Net loss attributable to the 










noncontrolling interests

(1)


-


-


(1)

-

NET (LOSS) INCOME ATTRIBUTABLE TO UNITED STATES 










STEEL CORPORATION

$          (50)


$           44


$        (211)


$        (124)

$          (53)























COMMON STOCK DATA:




















Net (loss) income per share attributable to United









States Steel Corporation shareholders:










-Basic

$       (0.35)


$        0.30


$       (1.46)


$       (0.86)

$       (0.37)


-Diluted

$       (0.35)


$        0.28


$       (1.46)


$       (0.86)

$       (0.37)












Weighted average shares, in thousands










-Basic

144,351


144,350


144,071


144,237

143,967


-Diluted

144,351


171,673


144,071


144,237

143,967












Dividends paid per common share

$        0.05


$        0.05


$        0.05


$        0.20

$        0.20












 

UNITED STATES STEEL CORPORATION

CASH FLOW STATEMENT (Unaudited)














Year Ended






December 31

(Dollars in millions)



2012


2011









Cash provided by (used in) operating activities:





Net loss


$        (125)


$          (53)


Depreciation, depletion and amortization

661


681


Pensions and other postretirement benefits

(181)


(24)


Deferred income taxes


74


(68)


Net loss (gain) on disposal of assets

296


(25)


Working capital changes


326


(552)


Income taxes receivable/payable

17


133


Currency remeasurement (gain) loss

(15)


40


Other operating activities


82


36



Total


1,135


168









Cash (used in) provided by investing activities:





Capital expenditures


(723)


(848)


Disposal of assets


155


41


Other investing activities


(34)


(6)



Total


(602)


(813)









Cash provided by (used in) financing activities:





Revolving credit facilities

- borrowings

523


4,715




- repayments

(653)


(4,570)


Receivables Purchase Agreement (payments) proceeds

(380)


380


Issuance of long-term debt, net of refinancing costs

485


193


Repayment of long-term debt


(319)


(216)


Common stock issued


-


3


Dividends paid


(29)


(29)


Other financing activities


-


1



Total


(373)


477









Effect of exchange rate changes on cash

2


(2)









Net increase (decrease) in cash and cash equivalents

162


(170)

Cash and cash equivalents at beginning of the year

408


578









Cash and cash equivalents at end of the year

$         570


$         408









 

UNITED STATES STEEL CORPORATION

CONDENSED BALANCE SHEET (Unaudited)










Dec. 31


Dec. 31

(Dollars in millions)


2012


2011







Cash and cash equivalents

$       570


$         408

Receivables, net


2,090


2,046

Receivables sold to third party conduits

-


380

Inventories


2,503


2,775

Other current assets


211


165


Total current assets

5,374


5,774

Property, plant and equipment, net

6,408


6,579

Investment and long-term receivables, net

609


683

Goodwill and intangible assets, net

2,075


2,045

Other assets


773


992








Total assets


$   15,239


$     16,073







Accounts payable and other accrued liabilities

$     1,800


$      2,063

Payroll and benefits payable

977


1,003

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

2


20

Borrowings under Receivables Purchase Agreement

-


380

Other current liabilities


211


183


Total current liabilities

2,990


3,649

Long-term debt, less unamortized discount

3,936


3,828

Employee benefits


4,416


4,600

Other long-term liabilities

419


495

United States Steel Corporation stockholders' equity

3,476


3,500

Noncontrolling interests

2


1








Total liabilities and stockholders' equity

$   15,239


$     16,073







 

UNITED STATES STEEL CORPORATION


PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)




















Quarter Ended


Year Ended






Dec. 31


Sept. 30


Dec. 31


Dec. 31


Dec. 31


(Dollars in millions)

2012


2012


2011


2012


2011
















INCOME (LOSS) FROM OPERATIONS












Flat-rolled

$    11


$     29


$   (72)


$  400


$  469



U. S. Steel Europe

7


27


(89)

 (a) 

34

 (a) 

(162)

 (a) 


Tubular 


32


102


119


366


316



Other Businesses

9


13


16


55


46
















Reportable Segment and Other Businesses (Loss) Income
from Operations

59


171


(26)


855


669



Postretirement benefit expenses

(69)


(74)


(99)


(297)


(386)



Other items not allocated to segments:













Loss on sale of U. S. Steel Serbia

-


-


-


(399)


-




Gain on sale of transportation assets

-


-


-


89


-




Supplier contract dispute settlement

15


-


-


15


-




Property tax settlements

-


-


-


19


-




Labor agreement lump sum payments

-


(35)


-


(35)


-




Environmental remediation charge

-


-


(18)


-


(18)



















Total Income (Loss) from Operations

$      5


$     62


$ (143)


$  247


$  265
















CAPITAL EXPENDITURES












Flat-rolled

$  141


$     89


$  189


$  625


$  616



U. S. Steel Europe

17


15


16


38


109



Tubular


17


17


10


42


104



Other Businesses

12


8


7


18


19



















Total

$  187


$   129


$  222


$  723


$  848

















(a) Includes income from operations for USSK of $51 million and $44 million for the years ended December 31, 2012 and 2011, respectively.  Includes a loss from operations for USSK of ($22) million for the quarter ended December 31, 2011.



















 

UNITED STATES STEEL CORPORATION


PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)



















Quarter Ended


Year Ended






Dec. 31


Sept. 30


Dec. 31


Dec. 31

Dec. 31






2012


2012


2011


2012

2011















OPERATING STATISTICS











Average realized price: ($/net ton) (a)












Flat-rolled

721


741


741


750

759




U. S. Steel Europe

718


731


770


742

845




   USSK

718


731


783


743

862




Tubular

1,624


1,676


1,711


1,687

1,612



Steel Shipments: (a) (b)












Flat-rolled

3,924


3,972


3,784


15,974

15,509




U. S. Steel Europe

905


911


1,153


3,816

4,932




Tubular

407


457


482


1,886

1,812





Total Steel Shipments

5,236


5,340


5,419


21,676

22,253

















   USSK

905


911


908


3,743

3,690
















Intersegment Shipments: (b)












Flat-rolled to Tubular

393


456


431


1,803

1,770




U. S. Steel Europe to Flat-rolled

-


128


-


249

71



Raw Steel Production : (b)












Flat-rolled  

4,686


4,699


4,593


19,116

18,600




U. S. Steel Europe

969


1,140


1,211


4,522

5,640




   USSK

969


1,140


945


4,434

4,201



Raw Steel Capability Utilization: (c)












Flat-rolled

77%


77%


75%


78%

77%




U. S. Steel Europe

77%


90%


65%


87%

76%




   USSK

77%


90%


75%


88%

84%
















(a) Excludes intersegment shipments.



(b) Thousands of net tons.



(c) Based on annual raw steel production capability of 24.3 million net tons for Flat-rolled and 7.4 million tons
      for 
U. S. Steel Europe.  Subsequent to the sale of USSS on January 31, 2012, annual raw steel production
      capability 
for USSE is 5.0 million net tons.



















SOURCE United States Steel Corporation



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