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 $50million, 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 $211million, 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 JohnP.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 $171million, 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 $669million 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 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 forU. S. Steel Europe. Subsequent to the sale of USSS on January 31, 2012, annual raw steel production capabilityfor 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
United States Steel Corporation Reports 2012 Fourth Quarter And Full-year Results
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