United States Steel Corporation Reports 2013 Second Quarter Results

     United States Steel Corporation Reports 2013 Second Quarter Results

-- Second quarter total reportable segment and Other Businesses income from
operations of $47 million

-- Second quarter net loss of $78 million, or $0.54 per diluted share

-- Second quarter shipments of 5.2 million tons and net sales of $4.4 billion

-- Strong liquidity position with $767 million of cash and $2.5 billion of
total liquidity

PR Newswire

PITTSBURGH, July 29, 2013

PITTSBURGH, July29, 2013 /PRNewswire/ --United States Steel Corporation
(NYSE:X) reported a second quarter 2013 net loss of $78 million, or $0.54 per
diluted share, compared to a first quarter 2013 net loss of $73million, or
$0.51 per diluted share, and second quarter 2012 net income of $101 million,
or $0.62 per diluted share. Adjusted net loss for the first quarter 2013 was
$51 million, or $0.35 per diluted share, excluding an after-tax charge of $22
million, or $0.16 per diluted share, related to repurchases of $542 million
principal amount of our 4.00% Senior Convertible Notes due 2014. Adjusted net
income for the second quarter 2012 was $112 million, or $0.69 per diluted
share, excluding an $11 million after-tax early redemption premium on our $300
million 5.65% Senior Notes due 2013.

Earnings Highlights
(Dollars in millions, except per share amounts)      2Q 2013  1Q 2013  2Q 2012
Net Sales                                            $ 4,429  $ 4,595  $ 5,017
Segment income (loss) from operations
Flat-rolled                                          $ (51)   $ (13)   $ 177
U. S. Steel Europe                                   10       38       34
Tubular                                              45       64       103
Other Businesses                                     43       5        16
Total reportable segment and Other Businesses income $ 47     $ 94     $ 330
from operations
Postretirement benefit expense                       (54)     (56)     (77)
Other items not allocated to segments                —        —        —
Income (loss) from operations                        $ (7)    $ 38     $ 253
Net interest and other financial costs               68       104      82
Income tax provision                                 3        7        70
Less: Net loss attributable to the noncontrolling    —        —        —
interests
Net (loss) income attributable to United States      $ (78)   $ (73)   $ 101
Steel Corporation
-Per basic share                                     $ (0.54) $ (0.51) $ 0.70
-Per diluted share                                   $ (0.54) $ (0.51) $ 0.62

Commenting on results, U.S.Steel Chairman and CEO JohnP.Surma said, "Total
reportable segment and Other Businesses operating results of $47 million
reflect the effects of the ongoing lockout at our Lake Erie Works and a
deceleration in global economic growth during the quarter.Our plants operated
well even with increased repairs and maintenance costs."

The $47 million, or $9 per ton, of reportable segment and Other Businesses
income from operations for the second quarter of 2013 compares to income from
operations of $94 million, or $17 per ton, in the first quarter of 2013 and
income from operations of $330 million, or $61 per ton, in the second quarter
of 2012.

Net interest and other financial costs in the first quarter of 2013 includes a
$34 million pre-tax charge related to repurchases of $542 million principal
amount of our 4.00% Senior Convertible Notes due 2014.

For the second quarter 2013, we recorded a tax provision of $3 million on our
pre-tax loss of $75 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.

As of June30, 2013, U. S. Steel had $767 million of cash and $2.5 billion of
total liquidity.

Reportable Segments and Other Businesses
Flat-rolled segment results were lower than the first quarter primarily due to
increased operating costs and decreased shipments. Operating costs increased
due to higher repairs and maintenance costs as well as higher natural gas
costs partially offset by lower raw materials costs. Repairs and maintenance
costs were approximately $30 million higher than the first quarter due to
maintenance projects at Gary Works and Lake Erie Works. Shipments decreased
from the first quarter primarily due to the maintenance projects and the
continuing lockout at our Lake Erie Works that began on April 28, 2013.
Average realized prices, including the effect of a more favorable product mix,
were comparable to the first quarter. We incurred approximately $70 million
in idle facility carrying costs at our Hamilton and Lake Erie operations in
the second quarter.

Second quarter results for our European segment declined compared to the first
quarter due to higher iron ore costs and lower average realized euro-based
prices. A general price deterioration in the spot market occurred during the
second quarterdue tothe completion of the service center and distributor
restocking experienced in the first quarter. Total shipments were comparable
to the first quarter.

Second quarter results for our Tubular segment were lower than the first
quarter. Total shipments were higher due primarily to increased participation
with our strategic program customers. Average realized prices decreased
reflecting lower prices for line pipe product, continued elevated levels of
imports and OCTG mix effects.

Operating profit from Other Businesses increased primarily due to a gain of
approximately $30 million from a real estate sale that occurred in the second
quarter.

Outlook
Commenting on U. S. Steel's outlook for the third quarter, Surma said,
"Results for our Flat-rolled and Tubular segments are projected to improve
compared to the second quarter; however, we expect lower results from our
European segment due to a planned blast furnace outage in the third quarter.
Operating results for our Other Businesses are expected to decrease compared
to the second quarter to near breakeven. Total reportable segment and Other
Businesses results are expected to be comparable to the second quarter."

We expect our Flat-rolled segment results from operations to improve based on
an increase in average realized prices, lower raw materials costs, and lower
repairs and maintenance costs partially offset by reduced shipments. Average
realized prices are expected to increase compared to the second quarter due to
increased spot market prices as well as a more favorable product mix.
Shipments are projected to decrease significantly due to a blast furnace
outage at our Great Lakes Works and the Lake Erie Works labor dispute. The
represented employees at Lake Erie Works are scheduled to vote on the
company's contract offer on July 31, 2013. If the contract is approved, we
plan to restart operations as soon as possible. This outlook does not include
any effects of a restart of Lake Erie Works.

Third quarter results for our European segment are projected to decrease
compared to the second quarter. A scheduled blast furnace outage will result
in significantly lower shipments and increased facility repairs and
maintenance costs. Average realized euro-based prices are expected to be lower
compared to the second quarter as decreases in spot and contract market prices
are partially offset by the positive effect of a higher percentage of
value-added shipments. Raw materials costs are expected to be lower in the
third quarter due primarily to lower iron costs.

We expect third quarter results for our Tubular segment to improve compared to
the second quarter. Shipments are expected to increase to support anticipated
drilling activity and average realized prices are projected to be comparable.
Operating costs are expected to decrease due to operating efficiencies related
to higher production volumes.

On July 1, 2013, U. S. Steel entered into a supplier contract dispute
settlement agreement. As a result of the agreement, U. S. Steel expects to
record a pre-tax gain of $23 million as an item not allocated to segments in
the third quarter of 2013.

We expect a minimal tax provision/benefit in the third quarter primarily due
to the full valuation allowance on deferred tax assets in Canada.

*****

This release contains forward-looking statements with respect to market
conditions, operating costs, shipments and prices. 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, including the resolution of the Lake Erie Works
contract; (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. We present adjusted net income and adjusted net income per diluted
share, which are non-GAAP measures, to better enable investors and others to
assess our results and compare them with our competitors. 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 December31, 2012, 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 second quarter earnings on
Tuesday, July 30, at 2:30 p.m. EDT. To listen to the webcast of the
conference call, visit the U.S.Steel website, www.ussteel.com, and click on
"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                Six Months Ended
                               June 30   March 31  June 30  June 30
(Dollars in millions, except   2013      2013      2012     2013      2012
per share amounts)
NET SALES                      $ 4,429   $ 4,595   $ 5,017  $ 9,024   $ 10,189
OPERATING EXPENSES (INCOME):
  Cost of sales (excludes      4,114     4,242     4,485    8,356     9,118
  items shown below)
  Selling, general and         151       145       165      296       331
  administrative expenses
  Depreciation, depletion and  170       171       164      341       327
  amortization
  Loss (income) from investees 3         (8)       (44)     (5)       (68)
  Net (gain) loss on disposal  (1)       1         —        —         309
  of assets
  Other (income) expense, net  (1)       6         (6)      5         (8)
          Total operating      4,436     4,557     4,764    8,993     10,009
          expenses
(LOSS) INCOME FROM OPERATIONS  (7)       38        253      31        180
Net interest and other         68        104       82       172       132
financial costs
(LOSS) INCOME BEFORE INCOME
TAXES
  AND NONCONTROLLING INTERESTS (75)      (66)      171      (141)     48
Income tax provision           3         7         70       10        166
Net (loss) income              (78)      (73)      101      (151)     (118)
  Less: Net loss attributable
  to the
  noncontrolling interests     —         —         —        —         —
NET (LOSS) INCOME ATTRIBUTABLE
TO
  UNITED STATES STEEL          $ (78)    $ (73)    $ 101    $ (151)   $ (118)
  CORPORATION
COMMON STOCK DATA:
Net (loss) income per share
attributable to
 United States Steel
Corporation shareholders:
  -Basic                       $ (0.54)  $ (0.51)  $ 0.70   $ (1.05)  $ (0.82)
  -Diluted                     $ (0.54)  $ (0.51)  $ 0.62   $ (1.05)  $ (0.82)
Weighted average shares, in
thousands
  -Basic                       144,485   144,353   144,176  144,419   144,123
  -Diluted                     144,485   144,353   171,416  144,419   144,123
Dividends paid per common      $ 0.05    $ 0.05    $ 0.05   $ 0.10    $ 0.10
share



UNITED STATES STEEL CORPORATION
CASH FLOW STATEMENT (Unaudited)
                                                    Six Months Ended
                                                    June 30
(Dollars in millions)                               2013     2012
Cash (used in) provided by operating activities:
 Net loss                                           $ (151)  $ (118)
 Depreciation, depletion and amortization           341      327
 Pensions and other postretirement benefits         10       (111)
 Deferred income taxes                              (2)      107
 Net loss on disposal of assets                     —        309
 Working capital changes                            162      282
 Income taxes receivable/payable                    (3)      22
 Currency remeasurement loss                        21       6
 Other operating activities                         6        37
                 Total                              384      861
Cash (used in) provided by investing activities:
 Capital expenditures                               (221)    (397)
 Acquisition of intangible assets                   (12)     —
 Disposal of assets                                 1        133
 Other investing activities                         28       9
                 Total                              (204)    (255)
Cash provided by (used in) financing activities:
 Revolving credit facilities          - borrowings  —        523
                                      - repayments  —        (653)
 Receivables Purchase Agreement payments            —        (380)
 Issuance of long-term debt, net of financing costs 576      392
 Repayment of long-term debt                        (542)    (315)
 Dividends paid                                     (14)     (14)
                 Total                              20       (447)
Effect of exchange rate changes on cash             (3)      (2)
Net increase in cash and cash equivalents           197      157
Cash and cash equivalents at beginning of the year  570      408
Cash and cash equivalents at end of the period      $ 767    $ 565



UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
                                                         June 30   Dec. 31
(Dollars in millions)                                    2013      2012
Cash and cash equivalents                                $ 767     $ 570
Receivables, net                                         2,142     2,090
Inventories                                              2,269     2,503
Other current assets                                     238       211
        Total current assets                             5,416     5,374
Property, plant and equipment, net                       6,156     6,408
Investments and long-term receivables, net               621       609
Goodwill and intangible assets, net                      2,067     2,075
Other assets                                             604       751
        Total assets                                     14,864    $ 15,217
Accounts payable                                         1,743     $ 1,800
Payroll and benefits payable                             950       977
Short-term debt and current maturities of long-term debt 322       2
Other current liabilities                                253       211
        Total current liabilities                        3,268     2,990
Long-term debt, less unamortized discount                3,611     3,936
Employee benefits                                        4,122     4,416
Other long-term liabilities                              389       397
United States Steel Corporation stockholders' equity     3,473     3,477
Noncontrolling interests                                 1         1
        Total liabilities and stockholders' equity       $ 14,864  $ 15,217



UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                                Quarter Ended               Six Months
                                                            Ended
                                June 30  March 31  June 30  June 30
(Dollars in millions)           2013     2013      2012     2013    2012
INCOME (LOSS) FROM OPERATIONS
  Flat-rolled                   $  (51)  $  (13)   $  177   $ (64)  $ 360
  U. S. Steel Europe            10       38        34       48      —     ^(a)
  Tubular                       45       64        103      109     232
  Other Businesses              43       5         16       48      33
Reportable Segment and Other
Businesses Income               47       94        330      141     625
from Operations
  Postretirement benefit        (54)     (56)      (77)     (110)   (154)
  expense
  Other items not allocated to
  segments:
   Loss on sale of U. S. Steel —        —         —        —       (399)
  Serbia
   Gain on sale of             —        —         —        —       89
  transportation assets
   Property tax settlements    —        —         —        —       19
   Total Income (Loss) from $  (7)   $  38     $  253   $ 31    $ 180
  Operations
CAPITAL EXPENDITURES
  Flat-rolled                   $  80    $  96     $  186   $ 176   $ 367
  U. S. Steel Europe            8        10        7        18      9
  Tubular                       15       8         14       23      18
  Other Businesses              2        2         1        4       3
   Total                    $  105   $  116    $  208   $ 221   $ 397

^(a) Includes income from operations for USSK of $17 million for the six
months ended June 30, 2012.



UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                                  Quarter Ended               Six Months Ended
                                  June 30  March 31  June 30  June 30
                                  2013     2013      2012     2013      2012
OPERATING STATISTICS
 Average realized price: ($/net
 ton) ^(a)
    Flat-rolled                   725      719       772      722       768
    U. S. Steel Europe            702      718       767      710       757
     USSK                        702      718       767      710       761
    Tubular                       1,510    1,556     1,706    1,532     1,717
 Steel Shipments: ^(a) (b)
    Flat-rolled                   3,728    4,018     3,986    7,746     8,078
    U. S. Steel Europe            1,062    1,048     955      2,110     2,000
    Tubular                       456      428       493      884       1,022
        Total Steel Shipments     5,246    5,494     5,434    10,740    11,100
     USSK                        1,062    1,048     955      2,110     1,927
 Intersegment Shipments: ^(b)
    Flat-rolled to Tubular        445      441       460      886       959
    U. S. Steel Europe to         —        —         44       —         121
    Flat-rolled
 Raw Steel Production : ^(b)
    Flat-rolled                   4,212    4,920     4,688    9,132     9,731
    U. S. Steel Europe            1,158    1,203     1,173    2,361     2,413
     USSK                        1,158    1,203     1,173    2,361     2,325
 Raw Steel Capability
 Utilization: ^(c)
    Flat-rolled                   70%      82%       77%      76%       80%
     Flat-rolled U.S.          87%      90%       84%      89%       88%
    Facilities ^(d)
    U. S. Steel Europe            93%      98%       94%      95%       89%
     USSK                      93%      98%       94%      95%       93%

^(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 5.0 million net tons for U. S.Steel Europe (USSE). Prior
to the sale of USSS on January 31, 2012, annual raw steel production
capability for USSE was 7.4 million net tons.

^(d) AISI capability utilization rates include our U.S. facilities (Gary
Works, Great Lakes Works, Mon Valley Works, Granite City Works and Fairfield
Works).

SOURCE United States Steel Corporation

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