ÁñÁ«ÊÓƵ

Exhibit 99.1

 

49.9% Minority Interest in Big River with Clear Path to Consolidation www.ussteel.com October 1, 2019 David Burritt President and Chief Executive Officer Kevin Bradley Executive Vice President and Chief Financial Officer Rich Fruehauf Senior Vice President, Strategic Planning and Corporate Development Kevin Lewis General Manager, Investor Relations

 

 

Forward - looking Statements These slides are being provided to assist readers in understanding the planned investment in Big River Steel and other strate gic and financial actions by ÁñÁ«ÊÓƵ. These slides contain "forward - looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934. Words such as, but not limited to, "believes," "expects," "anticipates," "estimates," "inten ds, " "plans," "could," "may," "will," "should," and similar expressions are intended to identify forward - looking statements. Forward - looking s tatements in these slides include, among other things, statements about the potential benefits of the proposed investment and transaction; an ticipated cost savings; potential capital and operational cash improvements; U. S. Steel’s plans, objectives, expectations and intentions; t he financial condition, results of operations and business of the proposed joint venture; the joint venture’s products and potential; U. S . S teel’s future ability or plans to take ownership of the joint venture as a wholly owned subsidiary; U. S. Steel’s ability to obtain financi ng for the transaction or other strategic projects at anticipated interest rates or at all; and the anticipated timing of closing of the transaction . R isks and uncertainties include, among other things, risks related to the satisfaction of the conditions to closing the transaction in the anticipate d t imeframe or at all and the possibility that the transaction does not close; risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits and cost savings from the proposed transaction or the capital and operational cash im provements will not be realized or will not be realized within the expected time period; risks related to the satisfaction of the condit ion s to closing a future call option transaction (including the failure to obtain necessary regulatory approvals); and the risk that the businesses wi ll not be integrated successfully following exercise of the call option; disruption from the transaction making it more difficult to maintain busi nes s and operational relationships; negative effects of the announcement or the consummation of the proposed transaction on the market price of U. S. Steel’s common stock; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to th e proposed transaction; other business effects, including the effects of industry, market, economic, political or regulatory conditions; fu ture exchange and interest rates; changes in tax and other laws, regulations, rates and policies; future business combinations or disposals; an d c ompetitive developments. All forward - looking statements rely on a number of assumptions, estimates and data concerning future results and e vents and are subject to a number of uncertainties and other factors, that could cause actual results to differ materially from those r efl ected in such statements. Accordingly, U. S. Steel cautions that the forward - looking statements contained herein are qualified by these and ot her important factors and uncertainties that could cause results to differ materially from those reflected by such statements. For more inf orm ation on additional potential risk factors, please review U. S. Steel’s filings with the SEC, including, but not limited to, U. S. Ste el’ s Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q and its Current Reports on Form 8 - K. References to "we," "us," "our," the "Company," “ÁñÁ«ÊÓƵ,” and "U. S. Steel," refer to ÁñÁ«ÊÓƵ and its co nso lidated subsidiaries. 2

 

 

2019 ~$60M • Strategic investment in Big River Steel with clear path to consolidation • Significant next step in our strategy to create a world competitive “Best of Both” footprint • This transaction minimizes the risk of operational and financial execution while maximizing the potential for value creation • Big River Steel helps us get to where we were going … FASTER Transaction Overview Transaction Overview 3

 

 

49.9% Minority Interest Minority interest in Big River for approximately $700 million $2.325B Enterprise Value Implied enterprise value, including the expected completion of Phase II - A expansion, which is fully funded and under construction Fully Funded Committed financing to support the transaction Positions U. S. Steel to achieve as much as $1B in capital and operational cash improvements by 2022 Transaction Details 4

 

 

Portfolio Moves ▪ Big River Steel 4 5 To Be ▪ The “best of both” integrated and mini mill business models ▪ Improved competitiveness and through cycle cash flow 6 As - Is ▪ Reshaped footprint ▪ Transformed balance sheet ▪ Executing technology and capability driven strategy 1 Financial Strategy Portfolio Moves Strategic Projects Operating Improvements As - Is To Be 5 4 3 2 1 6 Operating Improvements ▪ Move Down the Cost Curve ▪ Win in Strategic Markets ▪ Move Up the Talent Curve 2 Strategic Projects ▪ XG3™ AHSS ▪ Dynamo Line at ÁñÁ«ÊÓƵK ▪ Endless Casting and Rolling at Mon Valley ▪ EAF at Tubular ▪ Gary Hot Strip Mill 3 Financial Strategy ▪ ~6% blended coupon – ERBs – Vendor Supported Financing – ÁñÁ«ÊÓƵK Revolver – Upsize ABL – Senior Notes ▪ Step 2 – Call Option Getting Where We Were Going … Faster 5

 

 

Technological Leadership Electric Arc Furnaces of mini mills combined with RH degassers from the integrated model to incorporate the benefits of each Advanced Manufacturing Capabilities Artificial intelligence and automation integration resulting in higher productivity per employee Flexibility is a core value Operations designed to flex with end - market demand to effectively serve any market dynamic Sustainable & Environmentally Friendly Operations Big River Steel is the only LEED certified steel mill in the world 6 Big River Steel Overview Portfolio Moves

 

 

x Highly variable cost structure with low fixed cost base x Minimal sustaining capex requirements x Enhanced earnings predictability through the cycle Move Up the Talent Curve Win in Strategic Markets Move Down the Cost Curve x Strategic location to serve growing southern U.S. and Mexico x Strengthens our existing capabilities and expands our presence in other growing and profitable markets x Highly experienced management and operations team x Share complementary expertise • Endless Casting and Rolling at Mon Valley • EAF at Tubular x Direct experience in developing or operating mini mills Big River Aligns with our Critical Success Factors Portfolio Moves 7 Transaction provides strategic and financial benefits to U. S. Steel ̶ some benefits immediately ̶ others would become fully realized upon the completion of the secondary investment and full ownership of Big River

 

 

Big River contributes U. S. Steel contributes Operating agreements x Most technologically advanced mill in North America x Management / operations team with entrepreneurial culture x Low cost structure x Research & Development (R&D) x Intellectual Property (IP) x Relationships with key customers in strategic end markets x Jointly developed products distributed by U. S. Steel x Agreement covering R&D, IP Portfolio Moves 8 Collaboration Through a Joint Venture

 

 

Portfolio Moves Positioned to Achieve Capital and Operational Cash Improvements 9 Rescope Asset Revitalization ̶ Invest where we have a cost or capability advantage, including the Gary hot strip mill Reduce Fixed Costs ̶ Redesign and optimize our current business model ̶ Center North American Flat - rolled footprint around three world - class assets Create Incremental Value ̶ Create incremental value from our excess iron ore pellets As much as $1B Opportunity Capital and operational cash improvements by 2022

 

 

x Competitive positioning in strategic, high - margin end markets x Unparalleled product platform to serve customers x Big River will unlock value across our entire footprint To Be “Best of Both” Integrated and Mini Mill 10 Transforms business to drive long term cash flow through industry cycles * Following U. S. Steel’s acquisition of the remaining 50.1% interest in Big River Steel within the next four years *

 

 

1 1 Downstream Finishing Number of Blast Furnaces / BOF X All tons represent Raw Steel Capacity Great Lakes 2 2 Gary 2 4 7.5 MNT Granite City 2 2.8 MNT PRO - TEC Mon Valley 2 2.9 MNT Fairfield Upgraded hot strip mill Endless Casting & Rolling AHSS Capable New CGL 3.8 MNT Co - generation facility Expanded capabilities in heavy gauge product AHSS Capable AHSS Capable 1.6 MNT Electric Arc Furnace 1 Number of Electric Arc Furnaces 1 X 1 Electric Arc Furnace (EAF) will supply rounds substrate for our Tubular segment seamless pipe. 2 ÁñÁ«ÊÓƵ has two idled blast furnaces in North America. Idling will reduce BF capacity by 200kt – 225kt / month. 3 Inclusive of Phase II - A completion (Phase I MNT of 1.6) and following U. S. Steel’s acquisition of the remaining 50.1% interest in Big River Steel within the next four years. 2 ~3.3 MNT Electric Arc Furnace 3 To Be 11 Transforming our North American Footprint

 

 

Portfolio Moves ▪ Big River Steel 4 5 To Be ▪ The “best of both” integrated and mini mill business models ▪ Improved competitiveness and through cycle cash flow 6 As - Is ▪ Reshaped footprint ▪ Transformed balance sheet ▪ Executing technology and capability driven strategy 1 Financial Strategy Portfolio Moves Strategic Projects Operating Improvements As - Is To Be 5 4 3 2 1 6 Operating Improvements ▪ Move Down the Cost Curve ▪ Win in Strategic Markets ▪ Move Up the Talent Curve 2 Strategic Projects ▪ XG3™ AHSS ▪ Dynamo Line at ÁñÁ«ÊÓƵK ▪ Endless Casting and Rolling at Mon Valley ▪ EAF at Tubular ▪ Gary Hot Strip Mill 3 Financial Strategy ▪ ~6% blended coupon – ERBs – Vendor Supported Financing – ÁñÁ«ÊÓƵK Revolver – Upsize ABL – Senior Notes ▪ Step 2 – Call Option Getting Where We Were Going … Faster 12

 

 

~$920M 2020 ~$610M ~$90M ~$690M 2022 2021 2019 ~$2.3B Investments 1 by year 1 Includes EAF, Dynamo Line, Endless Casting and Rolling, and Big River Step I 2 ~ $1,280M is variable rate based on exposure to EURIBOR / LIBOR; calculation assumes rates as of September 2019 ÁñÁ«ÊÓƵK Revolver ~$300M ~$700+M ~$2.3B ~$300M ~$700M ~$280M Environmental Revenue Bonds Vendor Supported Financing Upsize U.S. ABL Senior Notes Financing Scenario ~6% expected blended coupon rate 2 Efficient and flexible financing to support strategy Note: The financing options above are illustrative, and the ultimate sources of financing may differ materially from those ab ove , based on market conditions. Financial Strategy Funding Sources to Support Strategic Investments 13

 

 

Income Statement Balance Sheet Cash Flow Statement U. S. Steel’s portion of JV results reflected as “Earnings from investees” above the EBIT 1 line Big River debt is not consolidated with or guaranteed by U.S. Steel Our portion of the non - cash JV results reflected as “ Equity investee earnings, net of distributions” in the operating activities section Accounting Treatment of Joint Venture 14 1 EBIT = Earnings Before Interest and Taxes Initial cash generated by the JV will be used to fund the JV’s expansion and pay down its debt

 

 

Recap • We fully intend to consolidate Big River • Ultimately, three market - leading, differentiated and technologically advanced North American Flat - rolled assets • A mutually beneficial partnership 15

 

 

Q & A

 

 

2019 ~$60M • This transaction is a major step forward in executing our strategy to transform our business • Together with our previously announced strategic investments, we are building on what we have and investing in what we don’t • Our investment is getting us to where we were going faster • We are now uniquely positioned to be the “best of both” integrated and mini mill steel capabilities to improve competitiveness and drive through cycle cash flow Closing Remarks CEO Closing Remarks 17

 

 

INVESTOR RELATIONS Kevin Lewis General Manager 412 - 433 - 6935 klewis@uss.com Eric Linn Manager 412 - 433 - 2385 eplinn@uss.com www.ussteel.com