United States Steel Corporation Reports 2012 Fourth Quarter And Full-year Results

  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

PR Newswire

PITTSBURGH, Jan. 29, 2013

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 4Q 2012   3Q 2012   4Q 2011   2012      2011
per share amounts)
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       59       171       (26)      855       669
(loss) from operations
Postretirement benefit       (69)      (74)      (99)      (297)     (386)
expense
Other items not allocated to 15        (35)      (18)      (311)     (18)
segments
Income (loss) from           $         $         $         $         $        
operations                      5       62        (143)    247       265
Net interest and other       64        45        102       241       238
financial costs
Income tax (benefit)         (8)       (27)      (34)      131       80
provision
Less: Net loss attributable
to the noncontrolling        (1)       -         -         (1)       -
interests
Net (loss) income            $         $         $         $         $        
attributable to United        (50)       44       (211)     (124)     (53)
States Steel Corporation
-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 CO[2] 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    4,216      4,311      4,647    17,630  18,326
   items shown below)
   Selling, general and       142        166        183      654     733
   administrative expenses
   Depreciation, depletion    171        163        169      661     681
   and amortization
   Income from investees      (28)       (48)       (19)     (144)   (85)
   Net (gain) loss on         (12)       (1)        (15)     296     (25)
   disposal of assets
   Other income, net          (7)        (1)        (3)      (16)    (11)
        Total operating       4,482      4,590      4,962    19,081  19,619
        expenses
INCOME (LOSS) FROM OPERATIONS 5          62         (143)    247     265
Net interest and other        64         45         102      241     238
financial costs
(LOSS) INCOME BEFORE INCOME
TAXES AND 
   NONCONTROLLING INTERESTS   (59)       17         (245)    6       27
Income tax (benefit)          (8)        (27)       (34)     131     80
provision
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)    (380)           380
  proceeds
  Issuance of long-term debt, net of           485             193
  refinancing costs
  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       162             (170)
equivalents
Cash and cash equivalents at beginning of the  408             578
year
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 2            20
debt
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'       3,476        3,500
equity
Noncontrolling interests                            2            1
           Total liabilities and stockholders'      $   15,239   $     16,073
           equity

 

UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                            Quarter Ended              Year Ended
                            Dec.   Sept.  Dec.         Dec.        Dec.
                            31     30     31           31          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)     59     171    (26)         855         669
Income
from Operations
 Postretirement benefit     (69)   (74)   (99)         (297)       (386)
 expenses
 Other items not allocated
 to segments:
        Loss on sale of U.  -      -      -            (399)       -
        S. Steel Serbia
        Gain on sale of
        transportation      -      -      -            89          -
        assets
        Supplier contract   15     -      -            15          -
        dispute settlement
        Property tax        -      -      -            19          -
        settlements
        Labor agreement     -      (35)   -            (35)        -
        lump sum payments
        Environmental       -      -      (18)         -           (18)
        remediation charge
              Total Income  $      $      $            $           $
              (Loss) from    5     62     (143)         247         265
              Operations
CAPITAL EXPENDITURES
 Flat-rolled                $      $      $  189       $           $
                             141   89                   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         $      $      $  222       $           $
                             187   129                  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      5,236      5,340       5,419     21,676  22,253
            Shipments
        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   -          128         -         249     71
     Flat-rolled
 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

Website: http://www.ussteel.com
Contact: Media, Courtney Boone, +1-412-433-6791 or Investors/Analysts, Dan
Lesnak, +1-412-433-1184