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Delivers Strong First Quarter 2023; Best for All® Strategy On-Track

  • First quarter 2023 net earnings of $199 million, or $0.78 per diluted share
  • First quarter 2023 adjusted net earnings of $195 million, or $0.77 per diluted share
  • First quarter 2023 adjusted EBITDA of $427 million

PITTSBURGH--(BUSINESS WIRE)-- (NYSE: X) reported first quarter 2023 net earnings of $199 million, or $0.78 per diluted share. Adjusted net earnings was $195 million, or $0.77 per diluted share and excludes stock-based compensation expense of $8 million, net of taxes, or $0.03 per diluted share that had previously been reported in the North American Flat-Rolled segment and other one-time items detailed in the reconciliation of adjusted net earnings table. The exclusion of stock-based compensation expense was not contemplated at the time of our March 16, 2023 guidance press release. This compares to first quarter 2022 net earnings of $882 million, or $3.02 per diluted share. Adjusted net earnings for the first quarter 2022 was $910 million, or $3.11 per diluted share and excluded the impact of one-time items detailed in the reconciliation of adjusted net earnings table.

Commenting on the first quarter's performance, President and Chief Executive Officer David B. Burritt said, “We delivered another strong quarter. Each of our operating segments exceeded expectations. We generated positive investable free cash flow of $25 million before supporting $582 million of high return strategic capital expenditures and continued direct returns in the quarter.”

Burritt continued, “Our focus on being the best partner for our customers through best operations has amplified the benefits of an improved market and more market share gains that we expect to continue through 2023. This momentum is expected to deliver even stronger second quarter results from higher steel prices."

Burritt concluded, “In spite of inflationary pressures, we are pleased to report our strategic projects are on-track to meet or improve upon key milestones each quarter and deliver returns well above our weighted average cost of capital. We’ve begun cold commissioning critical components of our new non-grain oriented electrical steel line at Big River Steel to produce the first coil as planned later this summer. Big River 2, our new mini mill with even more capabilities, and our new galvanize/GALVALUME® line, remain on-track for 2024. Together, with our current Big River Steel footprint, we are creating the next generation of sustainable mini mill steelmaking in the U.S. and transforming our business model to generate more consistent cash flow to continue capability building and higher returns for our investors.”

Earnings Highlights

Three Months Ended March 31,

(Dollars in millions, except per share amounts)

2023

2022

Net Sales

$

4,470

$

5,234

Segment earnings (loss) before interest and income taxes

Flat-Rolled

$

(7

)

$

529

Mini Mill

12

278

Europe

(34

)

264

Tubular

232

77

Other

3

7

Total segment earnings before interest and income taxes

$

206

$

1,155

Other items not allocated to segments

(17

)

(37

)

Earnings before interest and income taxes

$

189

$

1,118

Net interest and other financial benefits

(61

)

(10

)

Income tax expense

51

246

Net earnings

$

199

$

882

Earnings per diluted share

$

0.78

$

3.02

Adjusted net earnings (a)

$

195

$

910

Adjusted net earnings per diluted share (a)

$

0.77

$

3.11

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

$

427

$

1,353

(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 first quarter earnings on Friday, April 28, 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 website, , and click on the “Investors” section. Replay will be available on the website after 10:30 a.m. on April 28, 2023.

UNITED STATES STEEL CORPORATION

PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)

Three Months Ended March 31,

2023

2022

OPERATING STATISTICS

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

Flat-Rolled

1,012

1,368

Mini Mill

794

1,372

Europe

909

1,109

Europe (€/net ton)

847

988

Tubular

3,757

2,349

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

Flat-Rolled

2,278

1,947

Mini Mill

659

507

Europe

883

1,110

Tubular

131

128

Total steel shipments

3,951

3,692

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

Mini Mill to Flat-Rolled

83

89

Flat-Rolled to Mini Mill (pig iron)

29

Raw steel production (thousands of net tons):

Flat-Rolled

2,393

2,205

Mini Mill

759

601

Europe

1,092

1,088

Tubular

171

156

Raw steel capability utilization: (b)

Flat-Rolled

74

%

68

%

Mini Mill

93

%

74

%

Europe

89

%

88

%

Tubular

77

%

70

%

CAPITAL EXPENDITURES (dollars in millions)

Flat-Rolled

139

117

Mini Mill

563

211

Europe

26

17

Tubular

12

4

Other Businesses

Total

$

740

$

349

(a) Excludes intersegment shipments.

(b) Based on annual raw steel production capability of 13.2 million net tons for Flat-Rolled, 3.3 million for Mini Mill, 5.0 million net tons for Europe and 0.9 million for Tubular.

UNITED STATES STEEL CORPORATION

CONDENSED STATEMENT OF OPERATIONS (Unaudited)

Three Months Ended March 31,

(Dollars in millions, except per share amounts)

2023

2022

Net Sales

$

4,470

$

5,234

Operating expenses (income):

Cost of sales

3,953

3,823

Selling, general and administrative expenses

99

117

Depreciation, depletion and amortization

221

198

Loss (earnings) from investees

13

(36

)

Asset impairment charges

4

6

Restructuring and other charges

1

17

Net gains on sale of assets

(2

)

(2

)

Other gains, net

(8

)

(7

)

Total operating expenses

4,281

4,116

Earnings before interest and income taxes

189

1,118

Net interest and other financial benefits

(61

)

(10

)

Earnings before income taxes

250

1,128

Income tax expense

51

246

Net earnings

199

882

Less: Net earnings attributable to noncontrolling interests

Net earnings attributable to

$

199

$

882

COMMON STOCK DATA:

Net earnings per share attributable to Stockholders

Basic

$

0.87

$

3.37

Diluted

$

0.78

$

3.02

Weighted average shares, in thousands

Basic

227,332

261,453

Diluted

257,447

293,267

Dividends paid per common share

$

0.05

$

0.05

UNITED STATES STEEL CORPORATION

CONDENSED CASH FLOW STATEMENT (Unaudited)

Three Months Ended March 31,

(Dollars in millions)

2023

2022

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

Operating activities:

Net earnings

$

199

$

882

Depreciation, depletion and amortization

221

198

Restructuring and other charges

1

17

Pensions and other postretirement benefits

(41

)

(60

)

Deferred income taxes

38

121

Working capital changes

(47

)

(462

)

Income taxes receivable/payable

10

140

Other operating activities

(200

)

(65

)

Net cash provided by operating activities

181

771

Investing activities:

Capital expenditures

(740

)

(349

)

Proceeds from sale of assets

2

4

Other investing activities

(7

)

Net cash used in investing activities

(738

)

(352

)

Financing activities:

Issuance of long-term debt, net of financing costs

4

Repayment of long-term debt

(10

)

(6

)

Common stock repurchased

(75

)

(123

)

Proceeds from government incentives

82

Other financing activities

(32

)

(28

)

Net cash used in financing activities

(117

)

(71

)

Effect of exchange rate changes on cash

8

(7

)

Net increase in cash, cash equivalents and restricted cash

(666

)

341

Cash, cash equivalents and restricted cash at beginning of year

3,539

2,600

Cash, cash equivalents and restricted cash at end of period

$

2,873

$

2,941

UNITED STATES STEEL CORPORATION

CONDENSED BALANCE SHEET (Unaudited)

March 31,

December 31,

(Dollars in millions)

2023

2022

Cash and cash equivalents

$

2,837

$

3,504

Receivables, net

1,808

1,635

Inventories

2,541

2,359

Other current assets

362

368

Total current assets

7,548

7,866

Operating lease assets

134

146

Property, plant and equipment, net

8,875

8,492

Investments and long-term receivables, net

830

840

Intangible, net

467

478

Goodwill

920

920

Other noncurrent assets

766

716

Total assets

$

19,540

$

19,458

Accounts payable and other accrued liabilities

3,175

3,016

Payroll and benefits payable

388

493

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

91

63

Other current liabilities

361

387

Total current liabilities

4,015

3,959

Noncurrent operating lease liabilities

95

105

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

3,901

3,914

Employee benefits

146

209

Deferred income tax liabilities

479

456

Other long-term liabilities

509

504

stockholders' equity

10,302

10,218

Noncontrolling interests

93

93

Total liabilities and stockholders' equity

$

19,540

$

19,458

UNITED STATES STEEL CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF ADJUSTED NET EARNINGS

Three Months Ended March 31,

(In millions of dollars)

2023

2022

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

$

199

$

0.78

$

882

$

3.02

Restructuring and other charges

1

17

Stock-based compensation expense (a)

11

16

VEBA asset surplus adjustment

(22

)

Other charges, net

5

4

Adjusted pre-tax net earnings to

194

919

Tax impact of adjusted items (b)

1

(9

)

Adjusted net earnings and diluted net earnings per share attributable to

$

195

$

0.77

$

910

$

3.11

Weight average diluted ordinary shares outstanding, in millions

257.4

293.3

(a) The prior year was retroactively adjusted to reflect the reclassification of stock-based compensation expense. The adjustment was $8 million and $12 million, net of taxes, for the three months ended March 31, 2023 and 2022, respectively.

(b) The tax impact of adjusted items for the three months ended March 31, 2023 is calculated using a blended tax rate of 24%. The tax impact of adjusted items for the three months ended March 31, 2022 is calculated using a blended tax rate of 25%.

Note: The reported net earnings attributable to for the three months ended March 31, 2022 includes an income tax benefit of $7 million from the reversal of net valuation allowances. The item was presented as an adjustment to arrive at adjusted net earnings attributable to in the prior period presentation. The reconciliation for the three months ended March 31, 2022 presented above has been recast to reflect the removal of the adjustment in accordance with Securities and Exchange Commission guidance.

UNITED STATES STEEL CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF ADJUSTED EBITDA

Three Months Ended March 31,

(Dollars in millions)

2023

2022

Reconciliation to Adjusted EBITDA

Net earnings attributable to

$

199

$

882

Income tax expense

51

246

Net interest and other financial benefits

(61

)

(10

)

Depreciation, depletion and amortization expense

221

198

EBITDA

410

1,316

Restructuring and other charges

1

17

Stock-based compensation expense (a)

11

16

Other charges, net

5

4

Adjusted EBITDA

$

427

$

1,353

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

UNITED STATES STEEL CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF PAST TWELVE MONTHS OF FREE AND INVESTABLE CASH FLOW

2nd

3rd

4th

1st

Quarter

Quarter

Quarter

Quarter

Total of the

(Dollars in millions)

2022

2022

2022

2023

Four Quarters

Net cash provided by operating activities

$

905

$

1,074

$

755

$

181

$

2,915

Net cash used in investing activities

(250

)

(463

)

(614

)

(738

)

(2,065

)

Free cash flow

655

611

141

(557

)

850

Strategic capital expenditures

171

330

479

582

$

1,562

Investable free cash flow

$

826

$

941

$

620

$

25

$

2,412

We present adjusted net earnings, adjusted net earnings per diluted share, earnings before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, 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, 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. '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. ’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 and investable 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 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 are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain 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, 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 “,” “the Company,” “we,” “us,” and “our” refer to and its consolidated subsidiaries, and references to “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, 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 and its stakeholders. With a renewed emphasis on innovation, serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as ’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. is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe. For more information, please visit .

Arista Joyner
Manager
Corporate Communications
T - (412) 433-3994
E - AEjoyner@uss.com

Kevin Lewis
Vice President
Finance
T - (412) 433-6935
E - KLewis@uss.com

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