November 3, 2017 - United States Steel Corporation (NYSE:X) reported third quarter 2017 net earnings of $147 million, or $0.83 per diluted share.  Adjusted net earnings were $161 million, or $0.92 per diluted share, which excluded a gain of $21 million, or $0.11 per diluted share, related to equity affiliate transactions, primarily due to the sale of our ownership interest in Tilden Mining Company L.C., and a debt extinguishment loss and other related costs of $35 million, or $0.20 per diluted share.  Third quarter 2016 net earnings were $51 million, or $0.32 per diluted share.

Commenting on U. S. Steel’s results, President and Chief Executive Officer Dave Burritt said, “Our third quarter results were modestly better than we expected, with stable operating performance at each of our segments and our Tubular segment producing positive EBITDA in the quarter.  Our results for the first nine months of 2017 improved over the first nine months of 2016, with all three of our segments improving compared with 2016.”

Our balance sheet continues to improve, with net debt decreasing by $200 million in the third quarter, to $1.2 billion.  Our total liquidity also increased during the quarter, which leaves us well positioned to continue the implementation of our asset revitalization program.

In addition to the increased focus on our operations, we also are continuing to develop the next generation of steel products for our customers.  Our Generation 3 steels will provide superior formability and high-strength properties while using a low-alloyed approach for robust weldability.  To expand our capabilities in Generation 3 steels, we announced last month that a new continuous galvanizing line will be constructed at our PRO-TEC Coating Company joint venture, which will allow PRO-TEC to produce these Generation 3 steels with a hot-dipped zinc coating.  This line will be the first of its kind and utilizes proprietary technology capable of producing the high-quality, cutting-edge advanced high-strength steels that will meet our automotive customers’ needs and solve some of their most pressing challenges.  Our Generation 3 steels continue to reinforce why steel will remain the lowest cost, strongest, safest, and most environmentally efficient material of choice.

2017 Outlook

Commenting on U. S. Steel’s outlook for 2017, President and Chief Executive Officer Dave Burritt said, "We remain focused on our operations, revitalizing our assets, and developing our talent.  We are seeing operating improvements in the assets in which we are investing.  This increases our confidence that we will achieve the 2020 improvement targets we have disclosed.  We believe the attention to our assets and employees, with continued focus on improving safety, quality, delivery, and cost, will result in improved operating reliability and enable us to remain a strong business partner for our customers."

If market conditions remain at their current levels, we expect 2017 net earnings of approximately $323 million, or $1.83 per share, 2017 adjusted net earnings of approximately $300 million, or $1.70 per share, and consolidated adjusted EBITDA of approximately $1.075 billion.

We believe market conditions, which include spot prices, raw material costs, customer demand, import volumes, supply chain inventories, rig counts and energy prices, will change, and as changes occur during the balance of 2017, we expect these changes to be reflected in our net earnings and adjusted EBITDA.

We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, earnings (loss) 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 (loss), 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.  Net debt is a non-GAAP measure calculated as total debt less cash and cash equivalents. We believe net debt is a useful measure in calculating enterprise value. Both EBITDA and net debt are used by analysts to refine and improve the accuracy of their financial models which utilize enterprise value.

Adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the effects of gains associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, impairment charges and debt extinguishment and other related costs that are not part of the Company's core operations.  Adjusted EBITDA is also a non-GAAP measure that excludes the effects of gains (losses) associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges and impairment charges.  We present adjusted net earnings (loss), adjusted net earnings (loss) 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 gains (losses) associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, impairment charges and debt extinguishment and other related costs that can obscure underlying trends.  U. S. Steel's management considers adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA as alternative measures of operating performance and not alternative measures of the Company's liquidity.  U. S. Steel’s management considers adjusted net earnings (loss), adjusted net earnings (loss) 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 (loss), adjusted net earnings (loss) 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 adjusting items when evaluating the Company’s financial performance or in preparing the Company’s annual financial Outlook.  Adjusted net earnings (loss), adjusted net earnings (loss) per diluted share and adjusted EBITDA should not be considered a substitute for net earnings (loss), earnings (loss) 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.