Corporation (USS) narrowed its annual net loss in 2016 to $440 million or
$2.81 per diluted share, after reporting a net loss the previous year of
$1.6 billion or $11.24.
The 2016 result
includes unfavorable adjustments of $190 million or $1.21 per diluted share,
compared to unfavorable adjustments in 2015 of $1.4 billion or $9.45.
For 4Q 2016, USS is
reporting a net loss of $105 million or 61 cents per diluted share, compared
to net earnings in 3Q of $51 million or 32 cents and a net loss in the
year-ago period of $1.1 billion or $7.74.
The 4Q net loss
included unfavorable adjustments of $152 million or 88 cents per diluted
share; the 3Q net earnings, unfavorable adjustments of $14 million or 8
cents; and the year-ago net loss, unfavorable adjustments of $1.1 billion or
“We entered 2016
facing very challenging market conditions but remained focused on our
Carnegie Way transformation efforts,” USS President and CEO Mario Longhi
said. “Despite lower average realized prices and shipments in 2016, our
results are better as we continue to improve our product mix and cost
“Our focus on cash,
including better working capital management and opportunistic capital
markets transactions, resulted in an improved debt maturity profile and
stronger cash and liquidity. We are well positioned to accelerate the
revitalization of our assets to improve our operating reliability and
efficiency and deliver value-enhancing solutions to our customers.”
“We are starting
2017 with much better market conditions than we faced at the beginning of
2016,” Longhi said. “Our Carnegie Way transformation efforts over the last
three years have improved our cost structure, streamlined our operating
footprint, and increased our customer focus. These substantive changes and
improvements have increased our earnings power. While we will benefit from
improved market conditions, they continue to be volatile and we must remain
focused on improving the things we can control. Pursuing our safety
objective of zero injuries, improving our assets and operating performance,
and driving innovation that creates differentiated solutions for our
customers remain our top priorities.”
conditions--including spot prices, raw material costs, customer demand,
import volumes, supply-chain inventories, rig counts, and energy
prices--remain at their current levels, the company said it expects net
earnings in 2017 of around $535 million or $3.08 per share.
Under stable market
conditions, the company also expects the flat-rolled, European, and tubular
segments to have improved results; to be “cash positive, primarily due to
improved cash from operations”; and to carry approximately $50 million of
post-retirement benefit expense.
* Flat-rolled: a
loss of $3 million in 2016 (loss of $237 million in 2015); earnings of $65
million in 4Q (earnings of $114 million in 3Q, a loss of $88 million in the
year-ago). USS attributed improved full-year results to lower raw material
costs, lower spending, and benefits provided by Carnegie Way initiatives.
* U.S. Steel Europe
(USSE): earnings of $185 million in 2016 (earnings of $81 million in 2015);
earnings in 4Q of $63 million (earnings of $81 million in 3Q, earnings of $6
million in the year-ago).
* Tubular: a loss
of $304 million in 2016 (a loss of $179 million in 2015); a loss in 4Q of
$87 million (a loss of $75 million in 3Q, a loss of $64 million in the
* Other businesses:
earnings of $63 million in 2016 (earnings of $33 million in 2015); earnings
of $21 million in 4Q (earnings of $18 million in 3Q, earnings of $9 million
in the year-ago).
* Total segment
results before interest and income taxes: a loss of $165 million in 2016 (a
loss of $1.2 billion in 2015); a loss of $64 million in 4Q (earnings of $132
in 3Q, a loss of $453 million in the year-ago).
More 2016 Numbers
* Average realized
price per net ton of flat-rolled: $666 ($695 in 2015).
* Total USS and
USSE shipments: 14.9 million net tons (15.5 million in 2015).
* Flat-rolled steel
capability at U.S. facilities: 63 percent (60 percent in 2015).
* Raw flat-rolled
steel production at U.S. facilities: 10.7 million net tons (11.3 million in
capital expenditures: $111 million ($280 million in 2015).
* Net sales: $10.26
billion ($11.57 billion in 2015).
* At the end of
2016, the company had $1.5 billion in cash and $2.9 billion in total
liquidity, compared to $755 million in cash and $2.4 billion in total
liquidity at the end of 2015.