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2019    2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 20192022
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission file number 1-16811
x-20221231_g1.jpg
United States Steel CorporationCorporation
(Exact name of registrant as specified in its charter)
Delaware25-1897152
(State of Incorporation)(I.R.S. Employer Identification No.)
600 Grant Street,, Pittsburgh,, PA15219-2800
(Address of principal executive offices)
Tel. No. (412(412) 433-1121
Securities registered pursuant to Section 12 (b) of the Act:
Title of Each ClassTrading SymbolName of Exchange on which Registered
United States Steel Corporation Common Stock, par value $1.00XNew York Stock Exchange
United States Steel Corporation Common Stock, par value $1.00XChicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  þ  No    
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes       No    þ    
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.  Yes    þ    No             
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    þ    No             
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definition of “large accelerated filer,” “accelerated filer," “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  No
Aggregate market value of Common Stock held by non-affiliates as of June 28, 201930, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter): $2.6$4.3 billion. The amount shown is based on the closing price of the registrant’s Common Stock on the New York Stock Exchange composite tape on that date. Shares of Common Stock held by executive officers and directors of the registrant are not included in the computation. However, the registrant has made no determination that such individuals are “affiliates” within the meaning of Rule 405 under the Securities Act of 1933.
There were 170,047,076226,603,781 shares of United States Steel Corporation Common Stock outstanding as of February 10, 2020.January 30, 2023.
Documents Incorporated By Reference:
Portions of the Proxy Statement for the 20202023 Annual Meeting of Stockholders are incorporated into Part III.





INDEX



Item 1.
Item 1A
Item 1B
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A
Item 8.
Item 9.
Item 9A
Item 9B
Item 9C
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.

Item 16.

TOTAL NUMBER OF PAGES112



FORWARD-LOOKING STATEMENTS

This report 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,” “will”"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, U. S. Steel'schanges 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 abilitystrategies, products and plans to take ownership of its Big River Steel joint venture as a wholly owned subsidiary,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 this report in “Item 1A. Risk Factors” and those described from time to time in our future reports filed with the Securities and Exchange Commission.

References in this Annual Report on Form 10-K to (i) "U. S. Steel," "the Company," "we," "us,""us" and "our" refer to United States Steel Corporation and its consolidated subsidiaries unless otherwise indicated by the context, (ii) "Big River Steel" refers to Big River Steel Holdings LLC and its direct and indirect subsidiaries unless otherwise indicated by the context and (iii) "Transtar" refers to Transtar LLC and its direct and indirect subsidiaries unless otherwise indicated by the context.

Non-Generally Accepted Accounting Principles (non-GAAP) Financial Measures

This report contains certainthe non-GAAP financial measures such as earnings (loss) before interest, income taxes, depreciation, depletion and amortization (EBITDA), adjusted EBITDA, adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, free cash flow, net debt andmeasure cash conversion cycle.

We believe that EBITDA, considered along with the net earnings (loss), is a relevant indicator of trends relating to cash generating activity and provides management and investors with additional information for comparison of our operating results to the operating results of other companies.

Adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the effects of restructuring and other charges, the December 24, 2018 Clairton coke making facility fire, the Big River Steel options mark to market, the impact of the tax valuation allowance, the 2018 United Steelworkers labor agreement signing bonus and related costs, Granite City Works temporary idling and restart charges, the loss on shutdown of certain tubular pipe mill assets, gains associated with the sale of our retained interest in U. S. Steel Canada Inc., gains on equity investee transactions, loss on extinguishment of debt and other related costs, the effect of tax reform and other adjustments that are not part of the Company's core operations (Adjustment Items). Adjusted EBITDA is also a non-GAAP measure that excludes the effects of the Adjustment Items. 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 events 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. 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.

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.

Free cash flow is a measure of cash generated from operations, after any investing activity and dividends paid to stockholders. We believe that free cash flow provides further insight into the Company's overall utilization of cash.

We believe the cash conversion cycle is a useful measure in providing investors with information regarding our cash management performance and is a widely accepted measure of working capital management efficiency. The cash conversion cycle should not be considered in isolation or as an alternative to other GAAP metrics as an indicator of performance.

3
10-K SUMMARY


This section provides an overview of U. S. Steel's business, strategy and financial performance for 2019. It does not contain all of the information that may be important to a reader. Please read the entire Annual Report on Form 10-K.

PART I
Our vision
Item 1. BUSINESS

United States Steel Corporation, with operations in the United States of America (U.S.) and Central Europe, is transforming itself into a customer-centric, world-competitive, Best for U. S. Steel to beAll®steelmaker by investing in the industry leadercompetitive advantages that differentiate us in delivering high-quality, value-added products and innovative solutions that address our customers' most challenging steel needs. Underlying our efforts is our belief that we must operate as a principled company committed to a code of conduct that is rooted in our Gary Principles and our core values. Our core valueseyes. We are articulated in our S.T.E.E.L. Principles - Safety First, Trust and Respect, Environmentally Friendly Activities, Ethical Behavior, and Lawful Business Conduct. These core values guide U. S. Steel and help support the economic and societal benefits associated with strong domestic manufacturing capabilities, of which steel is a foundational industry.

We aim to achieve our vision by successfully executing on our world-competitive, “best of both” strategy.strategy by investing where we have distinct cost and capability advantages so that we are a superior steel solutions provider for our customers. By bringing togetheroffering the best of the integrated steelmaking model with the best of the mini mill steelmaking model,new steels that our customers are increasingly demanding, we will transform our business to drive long-term cash flow through industry cycles. We aim to offer an unparalleled product platform to serve customers, achieve world-competitive positioning in strategic, high-margin end markets and deliver high-quality, value-added products and innovative solutions that addressutilizing a lower carbon footprint than previously available through our customers' most challenging steel needs. To become a “best of both” company, we are enhancing our focus on operational and commercial excellence and promoting technological innovation, so we can establish a more competitive cost structure and enhance our capabilities … two key drivers for our strategy.

traditional integrated steelmaking model.
The diagram below illustrates our world-competitive “best of both” strategic framework and highlights the key actions to transform our business.

strategycircle1.jpg

Over the past several years, we have proactively re-shaped our footprint and transformed our balance sheet. We used the strength and foundation of our business to align our balance sheet with the investment horizon to execute our strategy.

Our strategy is informed by our critical success factors, which are the bedrock of the “best of both" strategy: (1) Move

Down the Cost Curve; (2) Win in Strategic Markets; and (3) Move Up the Talent Curve. Several of the strategic projects we are undertaking are expected to result in operational improvements. Additionally, the enhanced operating model and organizational structure we implemented beginning in 2020 will also positionDuring 2022, U. S. Steel to lower its structural fixed costs. We are also investing in new technologies to improve our cost position and increase our capabilities, including our investment in Big River Steel, the electric arc furnace (EAF) at Fairfield Tubular Operations, endless casting and rolling at Mon Valley Works, Gary Works hot strip mill upgrades and the dynamo line at our USSK facility which is within our USSE segment. We will focus on strategic markets, where there is the greatest opportunity to provide differentiated, innovative and value-added solutions that will help our customers succeed. We know that to accomplish our objectives, we also need to move up the talent curve, which we are doing by investing in our employees and providing the training and resources they need to succeed. This will help us reinforce a culture where accountability, fairness and respect are foundational, and high performance and inclusion in all its forms are valued and celebrated.

In 2019, we announced several transformation initiatives key to our strategy. On October 31, 2019, U. S. Steel acquired a 49.9% ownership interest in Big River Steel at a purchase price of approximately $683 million in cash, with a call option to acquire the remaining 50.1% within the next four years. Our investment in Big River Steel will add sustainable steel making technology to our footprint and improve our competitive positioning. Big River Steel is a technological leader combining mini mill technology with aspects of the integrated model to achieve the benefits of each. In December 2019, we announced our intention to indefinitely idle a significant portion of our Great Lakes Works operation near Detroit, Michigan. We expect to begin idling the iron and steelmaking facilities on or around April 1, 2020, and the hot strip mill rolling facility before the end of 2020. This action will transition our footprint to focus on facilities and assets that are differentiated by cost and/or capability.

Ultimately, we intend to center our North American Flat-Rolled operations around three distinct, market-leading assets: Big River Steel, Mon Valley Works, and Gary Works, to transform the business to offer customers differentiated products to deliver highly competitive long-term cash flow generation through higher earnings and lower maintenance capital expenditures.


KEY PERFORMANCE INDICATORS

This section provides an overview of select key performance indicators for U. S. Steel which management and investors use to assess the Company's financial performance. It does not contain all of the information you should consider. Fluctuations for year to year changes are explained in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations."


chart-9aa6df70f70a58159fb.jpg
Our 2019 net loss includes unfavorable restructuring impacts of $275 million for the indefinite idling of certain of our Flat-Rolled facilities, plant exit costs at USSE and Company-wide headcount reductions implemented to reduce fixed costs and support our strategy to become a world-competitive, "best of both" steel company. Our financial results were also negatively impacted by lower average realized prices across all of our business segments, significant market challenges in our USSE segment and a $334 million non-cash charge to tax expense that increased the valuation allowance related to our net domestic deferred tax asset.
Our 2018 net earnings include a favorable impact of $374 million due to the reversal of a portion of our deferred tax asset valuation allowance.
Our 2017 net earnings include an $81 million income tax benefit from enacted tax legislation.








chart-8b12b5020f6953d7b50.jpg
After a significant earnings improvement in 2018, we faced a challenging year in 2019 as market conditions in the U.S. weakened in the latter half of the year. Our USSE segment faced significant market challenges from weakening economic conditions, primarily in the manufacturing sector.
These amounts are derived starting from net (loss) earnings as shown on page 7. For a full reconciliation of adjusted net (loss) earnings see page 18.





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See reconciliation from diluted net (loss) earnings per share to adjusted diluted net earnings per share on page 19.



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These amounts are derived starting from net (loss) earnings as shown on page 7. For a full reconciliation of adjusted EBITDA see page 20.
EBITDA decreased primarily in our Flat-Rolled and USSE segments in 2019. The primary driver of decreased EBITDA in our Flat-Rolled segment was lower average realized prices related to weakening demand in the latter half of 2019. Our USSE segment temporarily idled one blast furnace as it experienced reduced shipment levels and lower average realized prices as a result of significant market challenges from weakening economic conditions, primarily in the manufacturing sector, and continued high levels of imports, coupled with domestic CO2 cost disadvantages compared to imports. Tubular results continued to be negatively impacted by high levels of imports which resulted in lower selling prices.
EBITDA increased from 2017 to 2018 for all three reportable segments with higher average realized prices in all three segments.


chart-2fe7d60006bdca63629.jpg
The decrease in net sales in 2019 as compared to 2018 was primarily due to lower average realized prices in all of our reportable segments and significantly reduced shipments in our USSE segment. Lower average realized prices in our Flat-Rolled and Tubular segments reflect weakening market conditions in the latter half of 2019. Reduced shipment levels and lower average realized prices in our USSE segment were the result of significant market challenges from weakening economic conditions, primarily in the manufacturing sector, and continued high levels of imports, coupled with domestic CO2 cost disadvantages compared to imports.
The increase in net sales in 2018 as compared to 2017 was primarily due to higher average realized prices in all of our reportable segments and increased shipments in our Flat-Rolled and Tubular segments due to improved market conditions. Improved market conditions for our Flat-Rolled segment reflected accelerated demand for steel products in line with the recent economic growth, as well as the supply-demand balance between imported and domestic steel. The restart of the two blast furnaces at our Granite City Works during 2018 enabled us to take advantage of the improved market dynamics in 2018.


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In 2019, the positive cash flow from operations was primarily due to efficient use of working capital.
In 2018 and 2017, improved financial performance more than offset the investment in working capital.
Our cash conversion cycle was 30, 28 and 37 days for 2017, 2018 and 2019, respectively. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition, Cash Flows and Liquidity – Cash Flows” for the calculation of our cash conversion cycle.





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The free cash flow shown above was derived starting from cash flow from operations as shown on page 12. For a full reconciliation of free cash flow see page 21.
A portion of our cash from operations in 2019 was spent on major projects to pursue our strategy to become a world-competitive, "best of both" steel company. Our capital expenditures of $1.3 billion included spending on the new endless casting and rolling facility at our Mon Valley Works and upgrades to the Gary Works hot strip mill, which are both in our Flat-Rolled segment, and spending on the new EAF in our Tubular segment.
Capital expenditures totaled $1.0 billion in 2018, a significant increase from 2017. Our 2018 capital expenditures included $335 million on asset revitalization projects that were focused on delivering improvements in safety, quality, delivery and cost for critical assets in our Flat-Rolled segment.


















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In the years leading up to 2018 and 2019, the Company undertook a focused effort to repay or refinance its debt in order to ensure a secure foundation to support execution of its strategy. Beginning with the asset revitalization program, and continuing with the "best of both" strategy, the Company has been maintaining cash in furtherance of its priorities.
Maintaining strong cash and liquidity to support and enable execution of our strategy continues to be a priority. Our total liquidity in 2019 remained strong and supported our ability to satisfy short-term obligations, fund working capital requirements, and enable execution of key strategic priorities including the acquisition of our 49.9% ownership interest in Big River Steel, restart of construction of the electric arc furnace (EAF) at our Fairfield Tubular Operations, invest in the endless casting and rolling facility at Mon Valley Works and invest in the new Dynamo line within our USSE segment.



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The increase in debt in 2019 was primarily related to net drawings that totaled approximately $760 million on our credit facilities, the $350 million issuance of senior convertible notes and the net increase in environmental revenue bonds of $220 million.
Net debt was derived starting from total debt as shown in the full reconciliation on page 21.
The increase in net debt in 2019 was primarily related to the increase in debt described above and the use of funds to purchase our 49.9% ownership interest in Big River Steel, fund the electric arc furnace construction at Fairfield Tubular Operations and finance other capital expenditures.

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The increase in 2019 pension and OPEB expense from 2018 was mainly due to increased contributions to the Steelworkers' Pension Trust (SPT) in 2019 in accordance with the increase in the contribution rate per hour required under the 2018 Labor Agreements (defined below).
The increase in 2018 pension and OPEB expense from 2017 is mainly due to a lower return on assets assumption for pension assets.
For further details, see Note 18 to the Consolidated Financial Statements.

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The funded status of our pension plan improved by $250 million in 2019 primarily due to higher asset performance and an update to our mortality assumptions partially offset by a decrease in the discount rate. The funded status of our OPEB plan improved by $410 million in 2019 primarily due to higher asset performance, reductions in future health care costs and changes in assumptions on future participant enrollment.
At the end of 2019, on a U.S. GAAP basis the funded status was 93% and 108% for our pension and OPEB obligations, respectively as compared to a funded status of 88% for both obligations at the end of 2018.
Due to the improvement in our funded status, required contributions to the pension plan that were previously projected to begin in 2021 are now projected to begin in 2024.
For further details, see Note 18 to the Consolidated Financial Statements.








NON-GAAP FINANCIAL MEASURES
Throughout this report, we present EBITDA, adjusted EBITDA, adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share, free cash flow and net debt which are non-GAAP measures, as additional measurements to enhance the understanding of our operating performance, cash flow and financial position and to facilitate comparison with our competitors. See page 3 for an explanation of our use of certain non-GAAP financial measures.
RECONCILIATION TO ADJUSTED NET EARNINGS (LOSS) (a)
       
  Year Ended December 31,
(Dollars in millions)2019 2018 2017
Reconciliation to adjusted net earnings (loss) attributable to United States Steel Corporation     
 Net (loss) earnings attributable to United States Steel Corporation, as reported$(630) $1,115
 $387
 December 24, 2018 Clairton coke making facility fire41
 
 
 
Restructuring and other charges (b)
263
 
 
 
Big River Steel options mark to market, net (c)
7
 
 
 USW labor agreement signing bonus and related costs
 81
 
 Granite City Works restart and related costs
 80
 
 Tax valuation allowance334
 (374) 
 
Loss on shutdown of certain tubular assets (b)

 
 35
 Gain associated with retained interest in U. S. Steel Canada Inc.
 
 (72)
 
Granite City Works temporary idling charges 

 (8) 17
 (Gain) loss on equity investee transactions
 (38) (2)
 Loss on extinguishment of debt and other related costs
 101
 57
 Effect of tax reform
 
 (81)
      Total Adjustments645
 (158) (46)
 Adjusted net (loss) earnings attributable to United States Steel Corporation$15
 $957
 $341
(a) The 2019 adjustments included in this table have been tax effected through the third quarter of 2019 as a valuation allowance was not applied to our deferred tax assets until the end of the year. The 2018 and 2017 adjustments included in this table have not been tax effected due to the recognition of a full valuation allowance on domestic deferred tax assets, which was established in the fourth quarter of 2015.
(b) Included in restructuring and other charges on the Consolidated Statement of Operations.
(c) The Big River Steel options mark to market, net represents the earnings impact of the change in fair value of options related to our investment in a 49.9% ownership interest in Big River Steel. See Note 5 to the Consolidated Financial Statements for further details.


RECONCILIATION TO ADJUSTED NET EARNINGS (LOSS) PER SHARE (a)
       
  Year Ended December 31,
  2019 2018 2017
Reconciliation to adjusted diluted net earnings (loss) per share     
 Diluted net (loss) earnings per share, as reported$(3.67) $6.25
 $2.19
 December 24, 2018 Clairton coke making facility fire0.23
 
 
 
Restructuring and other charges (b)
1.53
 
 
 
Big River Steel options mark to market, net (c)
0.04
 
 
 USW labor agreement signing bonus and related costs
 0.45
 
 Granite City Works restart and related costs
 0.45
 
 Tax valuation allowance1.96
 (2.11) 
 
Loss on shutdown of certain tubular assets (b)

 
 0.20
 Gain associated with retained interest in U. S. Steel Canada Inc.
 
 (0.41)
 Granite City Works temporary idling charges
 (0.04) 0.10
 Gain on equity investee transactions
 (0.21) (0.01)
 Loss on extinguishment of debt and other related costs
 0.57
 0.33
 Effect of tax reform
 
 (0.46)
      Total adjustments3.76
 (0.89) (0.25)
 Adjusted diluted net earnings (loss) per share$0.09
 $5.36
 $1.94
(a) The 2019 adjustments included in this table have been tax effected through the third quarter of 2019 as a valuation allowance was not applied to our deferred tax assets until the end of the year. The 2018 and 2017 adjustments included in this table have not been tax effected due to the recognition of a full valuation allowance on domestic deferred tax assets, which was established in the fourth quarter of 2015.
(b) Included in restructuring and other charges and cost of sales in the Consolidated Statement of Operations.
(c) The Big River Steel options mark to market, net represents the earnings impact of the change in fair value of options related to our investment in a 49.9% ownership interest in Big River Steel. See Note 5 to the Consolidated Financial Statements for further details.







RECONCILIATION TO EBITDA AND ADJUSTED EBITDA
       
  Year Ended December 31,
(Dollars in millions)2019 2018 2017
Reconciliation to EBITDA and Adjusted EBITDA     
 Net (loss) earnings attributable to United States Steel Corporation$(630) $1,115
 $387
 Income tax (benefit) provision178
 (303) (86)
 Net interest and other financial costs222
 312
 368
 Depreciation, depletion and amortization expense616
 521
 501
 EBITDA386
 1,645
 1,170
 December 24, 2018 Clairton coke making facility fire50
 
 
 
Restructuring and other charges (a)
275
 
 
 USW labor agreement signing bonus and related costs
 81
 
 Granite City Works restart and related costs
 80
 
 
Loss on shutdown of certain tubular assets (a)

 
 35
 Gain associated with retained interest in U. S. Steel Canada Inc.
 
 (72)
 Granite City Works temporary idling charges
 (8) 17
 Gain on equity investee transactions
 (38) (2)
 Adjusted EBITDA$711

$1,760

$1,148
(a) Included in restructuring and other charges in the Consolidated Statement of Operations.


RECONCILIATION TO FREE CASH FLOW
       
  Year Ended December 31,
(Dollars in millions)2019 2018 2017
Reconciliation to Free Cash Flow     
 Net cash provided by operating activities682
 938
 826
 Capital expenditures(1,252) (1,001) (505)
 Dividends paid(35) (36) (35)
 Free Cash Flow$(605) $(99) $286

RECONCILIATION TO TOTAL DEBT AND NET DEBT
       
  Year Ended December 31,
(Dollars in millions)2019 2018 2017
Reconciliation to Total Debt and Net Debt     
 Short-term debt and current maturities of long-term debt$14
 $65
 $3
 Long-term debt, less unamortized discount and debt issuance costs3,627
 2,316
 2,700
 Total Debt3,641
 2,381
 2,703
 Less: Cash and cash equivalents$749
 $1,000
 1,553
 Net Debt$2,892
 $1,381
 $1,150




PART I

Item 1. BUSINESS

United States Steel Corporation (U. S. Steel) is an integrated steel producer of flat-rolled and tubular products with major production operations in the United States and Europe. An integrated steel producer uses iron ore and coke as primary raw materials for steel production. U. S. Steel hashad annual raw steel production capability of 22.022.4 million net tons (17.0(17.4 million tons in the United StatesNorth America and 5.0 million tons in Europe). U. S. Steel performs a wide range of applied research, development and technical support functions at facilities in Pennsylvania, Michigan, Texas and Slovakia. U. S. Steel supplies customers throughout the world primarily in the automotive, construction, consumer (packaging and appliance), electrical, industrial equipment, service center/distribution, structural tubing and energy (oil country tubular goods (OCTG) and line pipe) markets. According to the World Steelworldsteel Association’s latest published statistics, in 2018 U. S. Steel wasis the thirdsecond largest U.S. based steel producer in the United States and the twenty-sixthtwenty-fourth largest steel producer in the world. U. S. Steel is also engaged in other business activities consisting primarily of railroad services and real estate operations. U. S. Steel is a Delaware corporation established in 1901.

Segments

U. S. Steel has threefour reportable segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Mini Mill segment reflects the full ownership of Big River Steel after January 15, 2021, when U. S. Steel purchased the remaining equity interest in Big River Steel that it did not previously own, and a second mini mill currently under construction in Osceola, Arkansas. Prior to the acquisition, the minority interest equity earnings of Big River Steel were included in the Other category. The Tubular segment includes the electric arc furnace at our Fairfield Tubular Operations in Fairfield, Alabama. The Other category includes results of our 49.9% ownership interestreal estate business, the previously held equity method investment in Big River Steel, and our former Transtar business. On July 28, 2021, the Company sold 100% of the equity interests in Transtar, its short-line railroad and real estate businesses that do not constitute reportable segments are combined and disclosed in the Other Businesses category.business.

Flat-Rolled

The Flat-Rolled segment includes the operating results of U. S. Steel’s integrated steel plants and equity investees in North America (except for Big River Steel, which is included in Other Businesses) involved in the production of slabs, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. These operations primarily serve North American customers in the automotive, appliance, construction, container, pipe and tube, sheet converter, industrial equipment and service center conversion, transportation (including automotive), construction, container, and appliance and electrical markets.

During 2022, Flat-Rolled hashad aggregate annual raw steel production capability of 17.013.2 million tons produced at our Gary Works, Mon Valley Works, Great Lakes Works and Granite City Works facilities. In December 2021, U. S. Steel permanently idled the steelmaking operations at Great Lakes Works which reduced the Company's overall annual raw steel production capability by 3.8 million net tons. Raw steel production was 11.48.8 million tons in 2019, 11.92022, 9.9 million tons in 20182021 and 10.89.3 million tons in 2017.2020. Raw steel production averaged 67 percent of capability in 2019, 702022, 58 percent of capability in 20182021 and 6455 percent of capability in 2017. During December 20152020.

Mini Mill

The Mini Mill segment includes the Granite City Works steelmaking operations were temporarily idled.operating results of U. S. Steel's Big River Steel facility in North America and a second mini mill currently under construction in Osceola, Arkansas. The steelmaking operationsMini Mill segment produces hot-rolled, cold-rolled and hot strip mill were restarted during 2018coated sheets and 2017, respectively. If itselectrical steels. This operation primarily serves North American customers in the automotive, appliance, construction, container, pipe and tube, sheet converter, electrical, industrial equipment and service center markets.

Mini Mill has aggregate annual raw steel production capability is excluded during the temporary idle period, Flat-Rolledof 3.3 million tons at our Big River Steel facility. Raw steel production would have been 76was 2.7 million tons in 2022 and 2.7 million tons in 2021. Raw steel production averaged 80 percent of capability in 2017.2022 and 81 percent of capability in 2021.

European Operations

The USSE segment includes the operating results of U. S. Steel Košice (USSK), U. S. Steel’s integrated steel plant and coke production facilities in Slovakia, and its subsidiaries. USSE conducts its business mainly in Central and Western Europe and primarily serves customers in the European transportation (including automotive), construction, container, appliance, electrical, service center, conversion and oil, gas and petrochemical markets. USSE produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as refractory ceramic materials.pipe.

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USSE has annual raw steel production capability of 5.0 million tons. USSE’s raw steel production was 3.93.8 million tons in 2019, 5.02022, 4.9 million tons in 2018,2021 and 5.13.4 million tons in 2017.2020. USSE’s raw steel production averaged 7877 percent of capability in 2019, 1002022, 99 percent of capability in 20182021 and 10267 percent of capability in 2017.2020.

Tubular

The Tubular segment includes the operating results of U. S. Steel’s tubular production facilities and an equity investee in the United States. These operations can produce and sell rounds, seamless and electric resistance welded (ERW) steel casing and tubing (commonly known as OCTG), and standard and line pipe and mechanical tubing and primarily serve customers in the oil, gas and petrochemical markets. Tubular'sThe Tubular segment has annual raw steel production capability isof 900 thousand tons. Raw steel production was 634 thousand tons in 2022, 464 thousand tons in 2021 and 16 thousand tons in 2020. Raw steel production averaged 70 percent of capability in 2022, 52 percent of capability in 2021 and 7 percent of capability in 2020. Tubular has total production capability of 1.9 million tons.

In 2020, Tubular indefinitely idled the Lone Star Tubular Operations and Lorain Tubular Operations thereby effectively reducing on-line tubular production capacity by 790 thousand and 380 thousand tons, respectively. U. S. Steel Tubular Products Inc.LLC (USSTP), a wholly owned subsidiary of U. S. Steel, continues to design and develop a range of premium and semi-premium connections to address the growing needs for technical solutions for our end users' well site production challenges. Through its wholly owned subsidiary, U. S. Steel Oilwell Services, LLC, USSTPcustomers' needs.

also offers rig site services, which provides the technical expertise for proper installation of our tubular products and proprietary connections at the well site.

For further information, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 4 to the Consolidated Financial Statements.


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Steel Shipments by Market and Segment

a2019marketshipments.jpg
The following table, except whereas noted in (1)Footnote 1 below, does not include shipments to end customers by joint ventures and other equity investees of U. S. Steel. Shipments of materials to these entities are included in the “Further Conversion – Joint Ventures” market classification. No single customer accounted for more than 10 percent of gross annual revenue.revenue for the three consecutive years ended December 31, 2022.

(Thousands of Tons) Flat-Rolled USSE Tubular Total(Thousands of Tons)Flat-RolledMini MillUSSETubularTotal
Major Market – 2019        
Major Market – 2022Major Market – 2022
Steel Service Centers 1,902
 740
 
 2,642
Steel Service Centers1,128 1,080 839  3,047 
Further Conversion – Trade Customers 2,823
 214
 
 3,037
Further Conversion – Trade Customers2,163 772 289  3,224 
– Joint Ventures (1)
 819
 
 
 819
– Joint Ventures (1)
256    256 
Transportation and Automotive (1)
 2,620
 676
 
 3,296
Transportation and Automotive (1)
2,611 20 619  3,250 
Construction and Construction Products 1,076
 1,048
 44
 2,168
Construction and Construction Products922 310 1,052 30 2,314 
Containers and Packaging 652
 440
 
 1,092
Containers and Packaging693 13 423  1,129 
Appliances and Electrical Equipment 570
 220
 
 790
Appliances and Electrical Equipment416 93 225  734 
Oil, Gas and Petrochemicals 
 
 725
 725
Oil, Gas and Petrochemicals  3 494 497 
All Other 238
 252
 
 490
All Other183  309  492 
TOTAL 10,700
 3,590
 769
 15,059
TOTAL8,372 2,288 3,759 524 14,943 
Major Market – 2018 (2)
        
Steel Service Centers 1,904
 799
 
 2,703
Further Conversion – Trade Customers 2,273
 287
 
 2,560
– Joint Ventures (1)
 810
 
 
 810
Transportation & Automotive (1)
 2,874
 728
 
 3,602
Construction and Construction Products 953
 1,637
 38
 2,628
Containers and Packaging 768
 439
 
 1,207
Appliances and Electrical Equipment 599
 261
 
 860
Oil, Gas and Petrochemicals 
 11
 742
 753
All Other 329
 295
 
 624
TOTAL 10,510
 4,457
 780
 15,747
Major Market – 2017 (2)
        
Major Market – 2021Major Market – 2021
Steel Service Centers 1,953
 761
 
 2,714
Steel Service Centers1,539 1,121 995 — 3,655 
Further Conversion – Trade Customers 1,738
 284
 
 2,022
Further Conversion – Trade Customers1,701 684 314 — 2,699 
– Joint Ventures (1)
 715
 
 
 715
– Joint Ventures (1)
490 — — — 490 
Transportation and Automotive (1)
 2,982
 708
 
 3,690
Transportation and Automotive (1)
2,355 17 590 — 2,962 
Construction and Construction Products 910
 1,831
 41
 2,782
Construction and Construction Products1,224 282 1,346 18 2,870 
Containers and Packaging 715
 438
 
 1,153
Containers and Packaging942 17 449 — 1,408 
Appliances and Electrical Equipment 594
 247
 
 841
Appliances and Electrical Equipment570 109 266 — 945 
Oil, Gas and Petrochemicals 
��10
 647
 657
Oil, Gas and Petrochemicals— — 426 434 
All Other 280
 306
 
 586
All Other197 — 334 — 531 
TOTAL 9,887
 4,585
 688
 15,160
TOTAL9,018 2,230 4,302 444 15,994 
Major Market – 2020Major Market – 2020
Steel Service CentersSteel Service Centers1,450 — 690 — 2,140 
Further Conversion – Trade CustomersFurther Conversion – Trade Customers2,063 — 202 — 2,265 
– Joint Ventures (1)
– Joint Ventures (1)
415 — — — 415 
Transportation and Automotive (1)
Transportation and Automotive (1)
2,012 — 517 — 2,529 
Construction and Construction ProductsConstruction and Construction Products1,261 — 775 34 2,070 
Containers and PackagingContainers and Packaging913 — 435 — 1,348 
Appliances and Electrical EquipmentAppliances and Electrical Equipment497 — 194 — 691 
Oil, Gas and PetrochemicalsOil, Gas and Petrochemicals— — 430 435 
All OtherAll Other100 — 223 — 323 
TOTALTOTAL8,711 — 3,041 464 12,216 
(1) PRO-TEC automotive substrate shipments are included in the Transportation and Automotive category.
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Steel Industry Background and Competition
Shipments previously reported as Exports have
The global steel industry is cyclical, highly competitive and has historically been reclassified to onecharacterized by global overcapacity.

U. S. Steel's competitive position may be affected by, among other things, differences among U. S. Steel's and its competitors' cost structure, labor costs, environmental remediation and compliance costs, global capacity, achievement of innovations in new technologies and sustainable products and the other categories to which they relate.existence and magnitude of government support.

Safety

U. S. Steel competes with many North American and international steel producers. Competitors include 1) integrated producers, which use iron ore and coke as the primary raw materials for steel production, 2) Electric Arc Furnace (EAF) producers, which primarily use steel scrap and other iron-bearing feedstocks as raw materials and 3) slab re-rollers, who purchase mostly imported, but some domestic, semi-finished products and convert them into sheet products. In addition, other materials, such as aluminum, plastics and composites, compete with steel in several applications. According to worldsteel Association, global steel production in 2022 declined compared to 2021, decreasing by 4 percent, or approximately 80 million metric tons, to 1.88 billion metric tons. Steel production generally decreased across the world, with the global decline primarily being driven by the top five steel producing countries and Ukraine, which collectively represents approximately 60 percent of the total global decline. Among the top five steel producing countries, production decreased in China by 22 million metric tons, or 2 percent; Japan by 7 million metric tons, or 7 percent; the U.S. by 5 million metric tons, or 6 percent; and Russia by 6 million metric tons, or 7 percent. These declines were partially offset however by India, which increased crude steel production by 7 million metric tons, or 5 percent, from 2021. Steel production in Ukraine decreased by 15 million metric tons, or 71 percent, from 2021 as a result of the Russian invasion and the impact of the ongoing conflict. The top five steel producing countries accounted for 73 percent of the world's steel production in 2022.

See "International Trade" below for a discussion of global overcapacity and the Company's efforts to mitigate the competitive impact.

EAF producers typically require lower capital expenditures for construction and operation of facilities and may have lower total employment costs. Some EAF producers utilize thin slab casting technology to produce flat-rolled products and are increasingly able to compete directly with integrated producers in many flat-rolled product applications previously produced only by integrated steelmakers. Slab re-rollers do not incur the cost of melting steel; their input costs are largely driven by the market price of slabs.

U. S. Steel provides defined benefit pension and/or other post-employment benefits to approximately 65,000 current employees, retirees and their beneficiaries. Many of our competitors do not have comparable retiree obligations. Participation in U. S. Steel's main defined benefit pension plan was closed to new entrants on July 1, 2003 and benefit accruals for all non-represented participants were frozen effective December 31, 2015. Participation in U. S. Steel’s retiree medical and life insurance programs for United Steelworkers (USW)-represented employees were closed to employees hired or rehired (except in limited circumstances) on or after January 1, 2016. For non-represented employees, retiree medical benefits were eliminated December 31, 2017, and retiree life insurance benefits for non-represented employees were eliminated for those who retired after December 31, 2017.

We believe that our major North American and many European integrated steel competitors are confronted with substantially similar environmental regulatory conditions and therefore do not believe that our relative position with regard to such competitors will be materially affected by the impact of environmental laws and regulations. However, if future regulations do not recognize that the integrated steel process involves a series of chemical reactions involving carbon that create carbon dioxide (CO2) emissions without linking these emissions to steel scrap as well, the competitive position of our integrated operations will be adversely impacted compared to mini mills. Our competitive position compared to producers in developing nations such as China, Russia, Brazil and India will be harmed unless such nations require commensurate reductions in CO2 emissions or there are policies to adjust for the carbon emissions disparities. Competing materials such as plastics may not be similarly impacted. The specific impact on each competitor will vary depending on a number of factors, including the age and location of its operating facilities and its production methods. U. S. Steel is also responsible for remediation costs related to former and present operating locations and disposal of environmentally sensitive materials. Many of our competitors, including North American producers, or their successors, that have been the subject of bankruptcy relief have no or substantially lower liabilities for such environmental remediation matters.

In 2023, we expect additional steelmaking capacity will enter the domestic steel market as competitors' growth projects come on-line or ramp up to full production in North America throughout the year.



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Business Strategy

We are executing on our customer-centric Best for All® strategy to provide customers with profitable steel solutions for people and planet. Our strategy is focused on developing quality products and customer process solutions by investing where we have distinct cost or capability competitive advantages. We are expanding our competitive advantages in low-cost iron ore, mini mill steelmaking, and best-in-class finishing assets with innovative solutions and commercial acumen. These competitive advantages are built on a foundation of research, innovation and deep customer relationships. In executing our strategy, we aim to enhance our earnings profile, deliver long-term cash flow through industry cycles and reduce our cost, capital, and carbon intensity. By offering the product capabilities, including the more sustainable steels (steels made with lower greenhouse gas emissions) our customers are increasingly demanding, we can achieve more competitive positioning in strategic, high-margin end markets, and deliver high-quality, sustainable, value-added products and innovative solutions.

Our strategy is informed by our critical success factors, which are the bedrock of the Best for All® strategy: (1) Win in Strategic Markets; (2) Move Up the Talent Curve; and (3) Move Down the Cost Curve. We are enhancing our competitive advantage in low-cost iron ore by expanding this advantage to serve our growing fleet of EAF producers (EAFs). We are currently investing in pig iron capability to enhance the efficiencies of our blast furnace operations as well as reduce the cost structure and reduce the global supply chain risk of our EAFs by increasingly feeding them with internally-produced pig iron. In the future, we may plan to further expand our low-cost iron ore advantage by incorporating in direct reduced iron (DRI) or hot briquetted iron (HBI) capabilities into our internal supply chain. We recently took an important step in this direction by investing in direct reduced (DR)-grade pellet capabilities to produce the feedstock for a potential future investment in DRI/HBI. We are alsoinvesting in new technologies to improve our cost position and increase our capabilities, including our mini mill steelmaking and best-in-class finishing capabilities. We will focus on strategic markets, where there is the greatest opportunity to provide differentiated, innovative and value-added solutions that will help our customers succeed. We know that to accomplish our objectives, we also need to continue to move up the talent curve. We are investing in our employees and providing the training and resources they need to succeed. This will help us reinforce a culture of caring, where accountability, fairness and respect are foundational, and high performance and inclusion in all its forms are valued and celebrated. See "Human Capital Management" below for additional information on our talent attraction, development, and retention initiatives.

U. S. Steel will continue to evaluate potential strategic and organizational opportunities, which may include the acquisition, divestiture or consolidation of assets. Given the cyclicality of our industry, we are focused on strategically deploying our capital, in-line with our capital allocation framework, in order to invest in areas consistent with the execution of our Best for All strategy and are considering various possibilities, including exiting lines of business and the sale of certain assets, that we believe would ultimately result in greater stockholder value. The Company will pursue opportunities based on its long-term strategy that is aligned with what is in the best interests of the Company's stockholders.

Strategic Projects, Technology Investments andOperating Configuration Adjustments
Throughout 2022, the Company continued to advance its Best for All strategy. On January 11, 2022, the Company announced Osceola, Arkansas as the site of a new sustainable and technologically advanced steel mill. The planned mini mill is expected to have about 3 million tons per year of steelmaking capability, and will combine two state-of-the-art EAFs with differentiated steelmaking and finishing technology, including endless casting and rolling equipment and a planned advanced high-strength steel (AHSS) finishing line. The Company is working with the same technical advisors and engineers who were instrumental in the successful construction of the adjacent Big River Steel facilities. Upon completion, we expect that this project will apply to become LEED® certified. We believe that the continued adoption of mini mill technology will expand our ability to produce the next generation of proprietary sustainable steel solutions, including AHSS. The project is expected to be completed in 2024.

In the second quarter 2022, the Company began the construction of a pig iron caster at our Gary Works facility. The approximately $60 million capital investment will produce up to 500,000 tons of pig iron annually and provide a critical raw material input for the Company's EAFs. The Gary Works pig iron project is expected to provide nearly 50 percent of Big River Steel’s ore-based metallics needs and deliver an internal rate of return in excess of 30 percent. Pig iron production at Gary Works and shipments to Big River Steel began in the fourth quarter 2022.

In the third quarter 2022, the Company began construction of a DR grade pellet facility at its Keetac ore operations. The approximately $150 million investment is expected to be operational in 2024. In addition to producing DR-grade pellets to ultimately feed EAFs with DRI or HBI, the production facility will maintain flexibility to continue producing blast furnace grade pellets. Upon completion, the Company could also sell the DR-grade pellets to third-party DRI or HBI producers. The DR-grade pellets produced will be a new product line for U. S. Steel.

In August 2021, the Company commenced construction on a non-grain oriented (NGO) electrical steel line at Big River Steel. The Company expects this $450 million investment to make Big River Steel a leader in NGO electrical steels by delivering product capabilities in this growing market. The 200 thousand ton NGO electrical steel line is expected to deliver first coil in September 2023 and be available to meet the growing electric vehicle demand expected in North America over the coming years.

In the third quarter 2021, the Company also began construction on a 325 thousand ton galvanize/Galvalume® line at Big River Steel. This $280 million investment is expected to grow the Company’s best-in-class finishing capabilities, by expanding the
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Company’s presence in value-added construction applications and enhancing Big River Steel’s product mix. This finishing line is expected to begin production in second quarter 2024.

As the Company advances and expands its mini mill capability, it seeks to become better, not bigger and will adjust its footprint accordingly by re-evaluating cost and capability advantages within its evolving footprint. In December 2021 and June 2022, the Company permanently idled the steelmaking and ironmaking operations, respectively, at its Great Lakes Works facility. In addition, in March 2022, the Company permanently idled the finishing facilities at its East Chicago Tin operations, which had been idled on an indefinite basis during 2019. The coil finishing process at Great Lakes Works continues to operate and remains a component of the Company's operating plans. In December 2022, we the Company indefinitely idled the majority of tin operations at our Gary Works facility.

Commercial Strategy

Our commercial strategy is focused on providing customer-centric solutions with differentiated and value-added steel products, which includes advanced high strength steels such as our newer grades of generation 3 (GEN3) steel, coated sheets for the automotive and appliance industries, electrical steel sheets for the manufacture of motors and electrical equipment, both bare and prepainted galvanized and Galvalume® sheets for construction, heavy gauge hot rolled coils used in the production of construction and agricultural-related heavy machinery as well as skelp for line pipe used for energy transmission as well as extraction, tin mill products for the packaging industry and OCTG pipe, connections, accessories and rig site services for use in drilling for oil and gas. In addition, our portfolio of customers serves a variety of different traditional and emerging industries meeting the needs of numerous markets.

U. S. Steel is committed to leveraging our Best for All strategy to develop and commercialize our low-carbon footprint and advanced high-strength steels for our current and future customers. Over the next five years, U. S. Steel plans to develop and commercialize numerous differentiated grades of low-carbon footprint, high rate of recycled-content steels, providing compelling new options for customers in automotive, appliance, industrial equipment, construction, renewable energy and other markets to enhance the sustainability of their products. For example, in April 2021, we announced a new sustainable steel product line, verdeXTM, which is made with up to 90% recycled steel content and a reduced carbon footprint - as much as 70-80% smaller than traditional integrated steelmaking methods. After launching our verdeXTM brand of sustainable steel products in 2021, we worked closely with customers on their own sustainability goals. In 2022, we reached agreements with multiple customers on the sale of verdeXTM products moving forward in industries such as automotive, construction, and distribution, setting the stage for increased sales of verdeXTM in these and other industries in 2023 and beyond. In addition, we continue to work with customers in numerous industries to help them implement AHSS solutions in the products they manufacture. While the automotive industry has been most active in the application of these products in new vehicle platforms, and it continues to accelerate the deployment of AHSS solutions in new vehicle launches, U. S. Steel is successfully introducing AHSS in other industries as well. Our collaboration with Greenbrier and Norfolk-Southern generated new AHSS sales into the railcar market in 2022, and we also commenced new projects in other industries such as appliance, construction, and in the renewable energy sector to create stronger, lightweight, cost-effective AHSS applications.

We are responsive to our customers' changing needs by developing new steel products and uses for steel that meet their evolving markets and regulatory demands. We have research centers in Munhall, Pennsylvania, Košice, Slovakia, and Houston, Texas, as well as a technology center in Troy, Michigan. The focus of these centers is to engineer new products and to co-create innovative solutions that meet our customers' toughest challenges to reduce carbon emissions, increase strength, improve longevity and serve the needs of their customers. In the fourth quarter 2022, we continued to invest in our talent by hiring a Chief Technology Officer to provide overall enterprise leadership, focusing on driving innovation and product development, as well as enhancing our manufacturing capability.

For automotive customers leveraging advanced high strength steels, we commissioned a first of its kind GEN3 hot dipped galvanize line at our PRO-TEC Coating Company (PRO-TEC) joint venture in 2020, and have embedded application engineers at original equipment manufacturers (OEMs) to demonstrate how to best utilize the high strength, highly formable, cost effective material in body design to meet passenger safety requirements while significantly reducing weight to meet future vehicle fuel efficiency standards.

In our tubular markets, we continue development of premium and semi-premium tubular connections designed for our customers that operate in challenging drilling environments. These connections optimize well construction activities and provide outstanding sealing capabilities for onshore and offshore oil and gas drilling in North America. An example is the USS-TALON HTQ™, which was introduced in 2020 for customers that are constructing onshore natural gas and oil wells with long laterals requiring best-in-class torque capacity and optimized well-bore clearances.

Commercial Sales of Product

U. S. Steel characterizes sales as contract sales if sold pursuant to an agreement with a defined volume and pricing and a duration of longer than three months, and as spot if sold without a defined volume and pricing agreement, typically three months or less. In 2022, approximately 76 percent, 61 percent, 48 percent and 78 percent of sales by Flat-Rolled, Mini Mill, USSE and Tubular, respectively, were contract sales. Some contract pricing agreements include fixed prices while others are adjusted periodically based upon published prices of steel products or cost components.
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Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the top talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best for All strategy. We refer to this strategic talent pillar as “Moving Up the Talent Curve.”

Our focus on people extends to our current and future employees. We aim to have an engaged and diverse workforce to promote new ideas and innovation, reflect the communities where we operate, and deliver exceptional customer service. We seek to build an inclusive environment where people feel free to bring their professional selves to work. To achieve the Best for All strategy, we must have the “Best from All.”

Active Employees as of December 31, 2022
North America14,487 
Slovakia8,253 
Total22,740

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and Respect; Environmental Stewardship; Excellence and Accountability; and Lawful and Ethical Conduct. We expect our employees and members of our board of directors to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that employees understand the Company’s expectations and all applicable rules, we provide annual formal ethics and compliance training to our employees and have frequent communications with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully and ethically that include reminders of the company’s expectations for all employees. In addition, through our annual policy certification process, employees of USSK, non-represented employees in the United States, and members of our board of directors certify their ongoing compliance with our Code of Ethical Business Conduct.

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of the men and womenevery person who workworks in our facilities. Safety is our primary core value. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents atincidents. In addition, the psychological safety of all employees is important to us. We have combined physical safety and psychological safety into the construct of our facilities.360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our success as the tools and technologies we rely on to do business.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes.
U. S. Steel finished 2019 with One of our most important safety protocols is our fatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA Days Away From Work Rate(DAFW). This measurement allows us to evaluate the frequency of 0.10,injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.
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x-20221231_g2.jpg
For 2022, we had a corporate DAFW rate of 0.05, which is 86%18 times better than the U.S. Bureau of Labor Statistics for Iron & Steel rate of 0.70 and 68% better than AmericanStatistics' Iron and Steel Institutebenchmark DAFW rate of 0.31. Notably, 0.100.90.

Diversity, Equity, & Inclusion

Attracting, developing, and retaining a workforce of talented, diverse people is essential to having high-performing teams that drive results for our Company’s stakeholders. As part of our commitment to cultivating a new Company recordculture of caring, we have inclusive benefits available for our U.S. non-represented workforce, including expanded parental leave, back-up dependent care, infertility coverage, gender reassignment coverage and healthcare continuation for the families of employees who suffered work-related or military service fatalities. We also support several employee resource groups (ERGs) to enhance employee engagement, promote a culture of belonging, foster diversity in the workplace, and raise awareness related to issues of identity and intersectionality. Our ERGs also provide training and education, mentorship and networking opportunities for their members.

Talent Attraction, Development and Retention

We believe that could not have been accomplished without the dedicationattraction, development and retention of talent is essential to our success, especially in today’s competitive labor market. We offer internship programs, partner with universities, community colleges and technical schools, and collaborate with community employment centers and economic development nonprofit organizations to build strong and diverse internal and external sources of potential employees and opportunities for our existing employee's growth and development.

Once at U. S. Steel, we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and strong partnershipabove have a formal professional development plan that is assessed at least annually. In addition, we proactively monitor our attrition rates and take targeted actions to ensure our highest potential and performing employees are motivated to remain with the Company. Over the past five years, our regrettable voluntary turnover rate has been at or below 5 percent.

We offer a competitive total rewards package of compensation and benefits that we regularly evaluate and benchmark across the manufacturing industry to ensure that we position U. S. Steel as an employer of choice.

At the onset of the pandemic in early 2020, we quickly transitioned our corporate and administrative employees, approximately 10% of our workforce, to a work-from-home environment. We’ve invested in technology to maintain this virtual community and found that our employees are more productive and have more flexibility and autonomy in managing their workload in a way that best fits their situation. We plan to maintain a virtual / hybrid working option for these employees in order to promote workplace flexibility and attract and retain highly qualified employees across the country.

Labor Relations

Approximately 80% of our employees in North America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet the needs of our customers. Our relationship with the United Steelworkers.Steelworkers (USW) includes not only a
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commitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company and ultimately the jobs of our employees.

Certain hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW entered into effective September 1, 2022, (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements include a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. The 2022 Labor Agreements also provide for certain increases to pension and retirement benefits, including increases in our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the Steelworkers Pension Trust from $3.50 to $4.00 per hour, effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. The OPEB plans were modified to allow the Company to utilize a certain amount of surplus assets to pay additional legally permissible benefits previously paid by the Company. The arrangement permits the Company to utilize a target of $75 million annually for active and retiree employee benefits, with an annual minimum of $50 million, beginning in 2023 and continuing through December 31, 2026. For additional information, see Note 18 to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.

Capital Structure, Liquidity and Capital Allocation

Our Best for All strategy's primary financial goal is to enhance stockholder value by utilizing our capital structure, liquidity and enhanced capital allocation priorities to advance the Company's strategic objectives, generate long-term value and reward stockholders. Our cash deployment strategy is aligned with our corporate strategy and includes: executing on strategic projects and portfolio moves; maintaining a strong balance sheet and a healthy pension plan; and delivering sustainable growth with a focus on core values such as safety and environmental stewardship and rewarding stockholders for the continued progress we make. Cash deployment is also performed with a customer-centric focus on improving safety, our environment, quality, delivery and cost.

Our liquidity supports our ability to satisfy short-term obligations, fund working capital requirements and provides a foundation to execute key strategic priorities. We are focused on maintaining a strong balance sheet and may proactively refinance or repay our debt from time to time to protect our capital structure from unforeseen external events and re-financing risks.
On May 27, 2022, U. S. Steel entered into the Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). The Credit Facility Agreement has substantially the same terms as the Fifth Credit Facility Agreement, except the Credit Facility Agreement references the Secured Overnight Financing Rate instead of the London Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to May 27, 2027, and the financial impact from replacing the Fifth Credit Facility Agreement was immaterial. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility remained the same at $1,750 million. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

On September 6, 2022, U. S. Steel closed on an offering of $290 million aggregate principal amount of 5.450% Environmental Improvement Revenue Bonds due 2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.

In 2022, we repurchased approximately $365 million in debt, and we ended the year with $5.9 billion of total liquidity.

On July 25, 2022, following the completion of previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program for the repurchase of up to $500 million of the Company's outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.

U. S. Steel repurchased 37.6 million shares of common stock for approximately $849 million under these programs during the year ended December 31, 2022, and there is approximately $301 million remaining under the current stock repurchase authorization. In addition, the Board of Directors declared quarterly dividends of five cents per common share for each of the quarters in 2022.

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Facilities and Locations as of December 31, 2022

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Flat-Rolled

The three year performanoperating results of all U. S. Steel's domestic-integrated steel and sheet plants, coke and iron ore operations and ore and sheet production joint ventures are included in Flat-Rolled. Also, included within Flat-Rolled is a research and technology center located in Munhall, Pennsylvania (near Pittsburgh) and a technology center in Troy, Michigan. The research and technology center carries out a wide range of applied research, development and technical support functions. The technology center brings automotive sales, service, distribution and logistics services, product technology and applications research into one location and much of U. S. Steel’s work in developing new grades of steel to meet the demands of automakers for high-strength, light-weight and formable materials is carried out at this location.

Flat-Rolled Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Gary Works, (Gary, Indiana)(a)
7.5 million tons of raw steelstrip mill plate in coil; hot-rolled, cold-rolled and coated sheets; and tin mill products
Midwest, (Portage, Indiana)
finishing facilityhot-rolled, cold-rolled and coated sheets; and tin mill products
Great Lakes Works(b),
(Ecorse, River Rouge and Dearborn, Michigan)
finishing facilitycold-rolled and coated sheets
Mon Valley Works (c):
Edgar Thompson, (Braddock, Pennsylvania),
Irvin, (West Mifflin, Pennsylvania), Fairless, (Fairless Hills, Pennsylvania), and
Clairton, (Clairton, Pennsylvania)
2.9 million tons of raw steel and 4.3 million tons of cokehot-rolled, cold-rolled and coated sheets; and coke and coke by-products
Granite City Works (d), (Granite City, Illinois)
2.8 million tons of raw steelslabs and hot-rolled, cold-rolled and coated sheets
Granite City Works, (Granite City, Illinois);
Gateway Energy and Coke Company LLC (Gateway)
coke supply agreementnot applicable
USS-UPI, LLC (UPI)(e), (Pittsburg, California)
finishing facilitycold-rolled and coated sheets; tin mill products
Fairfield Works,(Fairfield, Alabama)
finishing facilitycoated sheets
Minnesota Ore Operations: Minntac, (Mt. Iron, Minnesota) and Keetac, (Keewatin, Minnesota)
22.4 million tons of iron ore pelletsiron ore pellets
(a) The majority of tin operations were indefinitely idled as of December 31, 2022.
(b) The steel and ironmaking production facilities were permanently idled in December of 2021 and June of 2022, respectively. Great Lakes Works' pickle line, cold mill and CGL continue to operate, while the DESCO and electrolytic galvanizing lines are indefinitely idled.
(c) From time to time, we may swap coke with other domestic steel producers or sell on the open market. Coke by-products are sold to the chemicals and raw materials industries.
(d) In March 2020, one of the blast furnaces at Granite City Works was indefinitely idled.
(e) In February 2020, UPI was added with the purchase of the remaining 50% ownership interest from POSCO.

Joint Ventures Within Flat-Rolled

U. S. Steel participates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to our real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company owns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and Pennsylvania.

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Raw Materials and Energy

As a predominantly integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. For our EAF production, our primary raw material is scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices that are subject to fluctuations based on market conditions at the time.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, the Company's integrated steel process consumes approximately 1.4 tons of coal to produce one ton of coke and then it consumes approximately 0.3 tons of coke, 0.3 tons of steel scrap (approximately 60 percent of which is internally generated) and 1.3 tons of iron ore pellets to produce one ton of raw steel. In addition, we consume approximately 10 mmbtu’s of natural gas per ton produced. Generally, the Company's mini mill operations consumes approximately 0.8 tons of steel scrap, 0.3 tons of pig iron, and 0.1 tons of HBI to produce one ton of raw steel. In addition, the mini mill operations consume approximately 0.6 MKWH of electricity per ton of raw steel produced. While we believe that these estimated consumption amounts are useful for planning purposes, and are presented to give a general sense of raw material and energy consumption related to steel production, substantial variations may occur.

Iron Ore
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(cea) Includes our share of production from Hibbing through December 31, 2022.

The iron ore facilities at Minntac and Keetac contain approximately 900 million short tons of indicated resources and probable reserves and our share of recoverable reserves at the Hibbing joint venture is approximately 4 million short tons. Refer to Mining Properties in Item 2 of this Form 10-K for additional information. Recoverable reserves are defined as the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Minntac and Keetac’s annual capability and our share of annual capability for the Hibbing joint venture total approximately 23 million tons. We have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We historically have sold iron ore pellets to third parties, including in 2022, 2021 and 2020. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are purchased from outside sources, primarily Ukrainian and Brazilian mining companies. Prices are determined in long-term contracts with strategic suppliers or as spot prices negotiated monthly or quarterly. USSE also has received iron ore from U. S. Steel’s iron ore facilities in North America. We believe that supplies of iron ore adequate to meet USSE’s needs are available at competitive market prices.

Coking Coal

All of U. S. Steel’s coal requirements for our key safety measure Days Away From Work ratescokemaking facilities are shownpurchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, and from time to time we have entered into multi-year agreements for a portion of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or determined as index-based prices.
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We believe that supplies of coking coal adequate to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the United States, and sources for USSE include Poland, Ukraine, Canada, Australia and the United States.
Coke
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In North America, the Flat-Rolled segment operates a cokemaking facility at the Clairton Plant of Mon Valley Works. At our Granite City Works, we have a 15-year coke supply agreement with Gateway that expires on December 31, 2024. Blast furnace injection of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. Coke from time to time has been purchased from, sold to, or swapped with suppliers and other end-users to adjust for production needs and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polish and Czech coke producers to meet production needs. Volume and price are negotiated quarterly.
Steel Scrap and Other Materials

We believe that supplies of steel scrap and alloys that are adequate to meet our needs are readily available from outside sources at competitive market prices for the Flat-Rolled, Mini Mill and USSE segments. Generally, approximately 38 percent of our steel scrap requirements were internally generated through normal operations for these segments.
Limestone

All of Flat-Rolled’s limestone requirements and USSE's lime and limestone requirements are purchased from outside sources. We believe that supplies of limestone and lime adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin
We believe that supplies of zinc and tin required to fulfill the requirements for Flat-Rolled, Mini Mill and USSE are available from outside sources at competitive market prices. For Flat-Rolled and Mini Mill the main sources of zinc are Canada, Mexico and the United States and the main sources of tin are Bolivia, Brazil and Peru. For USSE, the main sources of zinc are Finland, Poland, the Netherlands, Germany and Slovakia and the main sources of tin are Peru, Indonesia, China and Bolivia.
During 2022, Flat-Rolled protected approximately 40 percent and 75 percent of its operation's zinc and tin purchases, respectively, with financial swap derivatives to manage exposure to zinc and tin price fluctuations. During 2022, USSE protected approximately 16 percent of its operation's zinc purchases with forward physical contracts to manage our exposure to zinc price fluctuations and protected approximately 68 percent of its operation's tin purchases with financial swaps to manage our exposure to tin price fluctuations. For further information, see Note 16 to the Consolidated Financial Statements.
Natural Gas

All of U. S. Steel’s natural gas requirements are purchased from outside sources.

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We believe that adequate supplies to meet Flat-Rolled’s, Mini Mill's and Tubular's needs are available at competitive market prices. For 2022, approximately 70 percent of our natural gas purchases in Flat-Rolled were based on bids solicited on a monthly basis from various vendors; the remainder were made daily or with term agreements.

We believe that adequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2022, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2022, approximately 48 percent of our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly or monthly basis.

Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE uses self-generated coke oven, converter and blast furnace gas to reduce consumption of natural gas and steam coal that results in lower CO2 the following graph.emissions production.
a1719safetyslidev4v2a01.jpg

Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and access to additional supply from countries including Norway, the U.S. and Africa. Together, these sources are enough to support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our USSE segment operations.

Industrial Gases

U. S. Steel purchases industrial gas in the U.S. under long-term contracts with various suppliers. USSE owns and operates its own industrial gas facility, but also may purchase industrial gases from time to time from third parties.


International Trade

U. S. Steel continues to face import competition, much of which is unfairly traded and fueled by massive global steel overcapacity, currently estimated to be over 500 million metric tons per year—more than five times the entire U.S. steel market and over seventeen times total U.S. steel imports. These imports and overcapacity negatively impact the Company’s operational and financial performance. U. S. Steel continues to lead efforts to address these challenges that threaten the Company, our workers, our stockholders and our country’s national and economic security.

As of the date of this filing, pursuant to a series of Presidential Proclamations issued in accordance with Section 232 of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subject to a 25 percent tariff, except imports from: (1) Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2) the European Union (EU), Japan and the United Kingdom (UK) that are melted and poured in the EU/Japan/UK, within quarterly tariff-rate quota (TRQ) limits; (3) Canada and Mexico, which are not subject to tariffs or quotas, but tariffs could be re-imposed on surging product groups after consultations; (4) Ukraine, which are exempt from tariffs until June 1, 2023; and (5) Australia, which are not subject to tariffs, quotas or an anti-surge mechanism.

The U.S. Department of Commerce (DOC) is managing a process in which U.S. companies may request and/or oppose temporary product exclusions from the Section 232 tariffs and quotas. U. S. Steel opposes exclusion requests for imported products that are the same as, or substitutes for, products manufactured by U. S. Steel.

Multiple legal challenges to the Section 232 action continue before the U.S. Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit (CAFC), the latter which has consistently rejected constitutional and statutory challenges to the Section 232 action.

Since its implementation in March 2018, the Section 232 action has supported the U.S. steel industry’s and U. S. Steel’s investments in advanced steel production capabilities, technology and skills, strengthening U.S. national and economic security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) implemented a definitive safeguard on global steel imports in the form of TRQs that impose 25 percent tariffs on steel imports that exceed the TRQ limit, effective through June 2024. In December 2022, the EC initiated a fourth review of the safeguard.

Antidumping duties (AD) and countervailing duties (CVD or antisubsidy duties) apply in addition to the Section 232 tariffs, quotas, TRQs and the EC’s safeguard, and AD/CVD orders may continue beyond the Section 232 action and the EC’s safeguard. U. S. Steel continues to actively defend and maintain the 61 U.S. AD/CVD orders and 14 EU AD/CVD orders covering U. S. Steel products in multiple proceedings before the DOC, U.S. International Trade Commission (ITC), CIT, CAFC, the EC and European courts, and the World Trade Organization (WTO).

In July 2022, the ITC voted to continue the AD/CVD orders on corrosion-resistant steel from China, India, Italy, South Korea and Taiwan and cold-rolled steel from China, India, Japan, South Korea and the UK for another five years, but voted to revoke the AD/CVD orders on cold-rolled steel from Brazil. In October 2022, the ITC voted to continue the AD/CVD orders on hot-rolled
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steel from Australia, Japan, Korea, Netherlands, Russia, Turkey and the United Kingdom for another five years, but voted to revoke the AD/CVD orders on hot-rolled steel from Brazil. Also, in October 2022, the ITC voted to impose new AD/CVD orders on imports of OCTG from Argentina, Mexico, Korea and Russia.

In August 2022, the EC imposed definitive AD measures on imports of hot-dipped galvanized steel from Russia and Turkey and announced the continuation of AD measures on imports of cold-rolled steel from China and Russia for another five years. The EC is conducting five-year reviews of the AD/CVD orders on hot-rolled steel from five countries with a decision expected in 2023.

In April 2022, the U.S. suspended normal trade relations with Russia and Belarus, resulting in higher than normal tariffs on imports from Russia and Belarus, including steel and raw materials. In June, President Biden announced additional tariff increases on certain products from Russia, including certain steel products and ferroalloys, effective August 1, 2022.

Additional tariffs of 7.5 to 25 percent continue to apply to certain U.S. imports from China, including certain raw materials used in steel production, semi-finished and finished steel products, and downstream steel-intensive products, pursuant to Section 301 of the Trade Act of 1974. The Office of the United States Trade Representative (USTR) is currently conducting a statutory review of the Section 301 tariffs.

The United States and EU are currently negotiating a global sustainable steel arrangement to restore market-oriented conditions and address carbon intensity that is targeted for completion by the end of 2023.

U. S. Steel will continue to execute a broad, global strategy to maximize opportunities and navigate challenges presented by imports, global steel overcapacity, and international trade law and policy developments.

Environmental StewardshipCommercial Strategy

Our commercial strategy is focused on providing customer-centric solutions with differentiated and value-added steel products, which includes advanced high strength steels such as our newer grades of generation 3 (GEN3) steel, coated sheets for the automotive and appliance industries, electrical steel sheets for the manufacture of motors and electrical equipment, both bare and prepainted galvanized and Galvalume® sheets for construction, heavy gauge hot rolled coils used in the production of construction and agricultural-related heavy machinery as well as skelp for line pipe used for energy transmission as well as extraction, tin mill products for the packaging industry and OCTG pipe, connections, accessories and rig site services for use in drilling for oil and gas. In addition, our portfolio of customers serves a variety of different traditional and emerging industries meeting the needs of numerous markets.

U. S. Steel is committed to effective environmental stewardship. We have implemented and continueleveraging our Best for All strategy to develop business practices that are environmentally effective. We believe part of being a good corporate citizen requires a dedicated focus on howand commercialize our industry affectslow-carbon footprint and advanced high-strength steels for our current and future customers. Over the environment. U. S. Steel's environmental expenditures totaled $376 million in 2019, $350 million in 2018 and $255 million in 2017. Overall, environmental compliance expenditures represent approximately 2 percent of U. S. Steel’s total costs and expenses. For further information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental Matters.” We have taken the actions described below in furtherance of that goal.

We continue to work on the promotion of cost-effective environmental strategies through the development of appropriate air, water and waste laws and regulations at the local, state, national and international levels. We are committed to reducing our emissions and are investigating, creating and implementing innovative, best practice solutions throughout our operations to improve our environmental performance and to manage and reduce energy consumption.

In 2019 alone, U. S. Steel recycled 3.7 million tons of purchased and produced steel scrap. Because of steel’s physical properties, our products can be recycled at the end of their useful life without loss of quality, contributing to steel’s high recycling rate and affordability.

Many of our major production facilities have Environmental Management Systems that are certified to the ISO 14001 Standard. This standard, published by the International Organization for Standardization (ISO), provides the framework for the measurement and improvement of environmental impacts of the certified facility.

By using the blast furnace and coke oven gas generated in our cokemaking and steelmaking activities to power our facilities, we avoided consuming natural gas and other fuels from 2015 to 2019 to heat more than 3.6 million households each year. In 2019, we recycled approximately 4.5 million tons of blast furnace slag and 0.6 million tons of steel slag by selling it for use as aggregate and in highway construction.

Reduction of Greenhouse Gas Emissions

This year, U. S. Steel took another step in the execution of our strategy to become the “best of both” in the steel industry with the announcement of its commitment to reduce greenhouse gas emissions intensity across its global footprint. The Company has set a goal to reduce its global greenhouse gas emissions intensity by 20 percent, as measured by the rate of carbon dioxide (CO2) equivalents emitted per ton of finished steel shipped, by 2030 based on 2018 baseline levels. This target will apply to U. S. Steel’s global operations.

These reductions are equivalent to the amount of CO2 being generated by more than 850,000 average-sized homes each year. By creating targeted carbon reduction initiatives to accelerate our transformation toward a future of sustainable steel, we create value for all stakeholders.

next five years, U. S. Steel plans to achieve its greenhouse gas emissions intensity reduction goal throughdevelop and commercialize numerous differentiated grades of low-carbon footprint, high rate of recycled-content steels, providing compelling new options for customers in automotive, appliance, industrial equipment, construction, renewable energy and other markets to enhance the executionsustainability of their products. For example, in April 2021, we announced a new sustainable steel product line, verdeXTM, which is made with up to 90% recycled steel content and a reduced carbon footprint - as much as 70-80% smaller than traditional integrated steelmaking methods. After launching our verdeXTM brand of sustainable steel products in 2021, we worked closely with customers on their own sustainability goals. In 2022, we reached agreements with multiple initiatives. These includecustomers on the usesale of EAF steelmaking technology at U. S. Steel’s Fairfield WorksverdeXTM products moving forward in industries such as automotive, construction, and at Big River Steel (once fully acquired bydistribution, setting the Company), the first LEED-certified steel millstage for increased sales of verdeXTM in these and other industries in 2023 and beyond. In addition, we continue to work with customers in numerous industries to help them implement AHSS solutions in the nation. EAF steelmaking relies on scrap recyclingproducts they manufacture. While the automotive industry has been most active in the application of these products in new vehicle platforms, and it continues to produceaccelerate the deployment of AHSS solutions in new steel products, leveraging the ability to continuously recycle steel. Further carbon intensity reductions are expected to come from the Company’s introduction of state-of-the-art endless rolling and casting technology and construction of a cogeneration facility at its Mon Valley Works, as well as implementation of ongoing energy efficiency measures, continued use of renewable energy sources and other process improvements to be developed.

The carbon intensity reduction target reflects our continued commitment to improvement in production efficiency and the manufacture of products that are environmentally friendly. In addition to a commitment to reduce its own greenhouse gas emissions intensity,vehicle launches, U. S. Steel is committedsuccessfully introducing AHSS in other industries as well. Our collaboration with Greenbrier and Norfolk-Southern generated new AHSS sales into the railcar market in 2022, and we also commenced new projects in other industries such as appliance, construction, and in the renewable energy sector to helping its customers achieve their environmental goals. Our industry-leading XG3™ advanced high-strengthcreate stronger, lightweight, cost-effective AHSS applications.

We are responsive to our customers' changing needs by developing new steel enables automakers to manufacture lighter weight vehiclesproducts and uses for steel that meet federal Corporate Average Fuel Economy (CAFE) standards with reduced carbon emissions. As parttheir evolving markets and regulatory demands. We have research centers in Munhall, Pennsylvania, Košice, Slovakia, and Houston, Texas, as well as a technology center in Troy, Michigan. The focus of these centers is to engineer new products and to co-create innovative solutions that meet our innovation efforts, we continuecustomers' toughest challenges to look at new steelmaking technologies including those that can further reduce carbon emissions, increase strength, improve longevity and serve the needs of their customers. In the fourth quarter 2022, we continued to invest in our talent by hiring a Chief Technology Officer to provide overall enterprise leadership, focusing on driving innovation and product development, as those technologies mature.well as enhancing our manufacturing capability.


For automotive customers leveraging advanced high strength steels, we commissioned a first of its kind GEN3 hot dipped galvanize line at our PRO-TEC Coating Company (PRO-TEC) joint venture in 2020, and have embedded application engineers at original equipment manufacturers (OEMs) to demonstrate how to best utilize the high strength, highly formable, cost effective material in body design to meet passenger safety requirements while significantly reducing weight to meet future vehicle fuel efficiency standards.
Business Strategy

In our tubular markets, we continue development of premium and semi-premium tubular connections designed for our customers that operate in challenging drilling environments. These connections optimize well construction activities and provide outstanding sealing capabilities for onshore and offshore oil and gas drilling in North America. An example is the USS-TALON HTQ™, which was introduced in 2020 for customers that are constructing onshore natural gas and oil wells with long laterals requiring best-in-class torque capacity and optimized well-bore clearances.
Our strategy is to transform
Commercial Sales of Product

U. S. Steel intocharacterizes sales as contract sales if sold pursuant to an agreement with a world-competitive, “bestdefined volume and pricing and a duration of both”longer than three months, and as spot if sold without a defined volume and pricing agreement, typically three months or less. In 2022, approximately 76 percent, 61 percent, 48 percent and 78 percent of sales by Flat-Rolled, Mini Mill, USSE and Tubular, respectively, were contract sales. Some contract pricing agreements include fixed prices while others are adjusted periodically based upon published prices of steel company. By bringing togetherproducts or cost components.
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Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the besttop talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best for All strategy. We refer to this strategic talent pillar as “Moving Up the integrated steelmaking model with the best of the mini mill steelmaking model, we will transformTalent Curve.”

Our focus on people extends to our business to drive long-term cash flow through industry cycles.current and future employees. We aim to offerhave an unparalleled product platformengaged and diverse workforce to serve customers, achieve world-competitive positioning in strategic, high-margin end markets,promote new ideas and innovation, reflect the communities where we operate, and deliver high-quality, value-added productsexceptional customer service. We seek to build an inclusive environment where people feel free to bring their professional selves to work. To achieve the Best for All strategy, we must have the “Best from All.”

Active Employees as of December 31, 2022
North America14,487 
Slovakia8,253 
Total22,740

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and innovative solutionsRespect; Environmental Stewardship; Excellence and Accountability; and Lawful and Ethical Conduct. We expect our employees and members of our board of directors to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that address our customers' most challenging steel needs. To become a “best of both” company,employees understand the Company’s expectations and all applicable rules, we are enhancing our focus on operationalprovide annual formal ethics and commercial excellence and promoting technological innovation, so we can establish a more competitive cost structure and enhance our capabilities … two key drivers for our strategy.

Foundationalcompliance training to our efforts isemployees and have frequent communications with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully and ethically that include reminders of the company’s expectations for all employees. In addition, through our belief that we must operate as a principled company committed toannual policy certification process, employees of USSK, non-represented employees in the United States, and members of our S.T.E.E.L. Principles, outlined inboard of directors certify their ongoing compliance with our Code of Ethical Business Conduct. Our core value

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of every person who works in our facilities. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents. In addition, the psychological safety -of all employees is important to us. We have combined physical safety and psychological safety into the construct of 360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our employees,success as the tools and technologies we rely on to do business.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes. One of our environment,most important safety protocols is our communitiesfatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA Days Away From Work (DAFW). This measurement allows us to evaluate the frequency of injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.
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For 2022, we had a corporate DAFW rate of 0.05, which is 18 times better than the U.S. Bureau of Labor Statistics' Iron and equipment - has served us wellSteel benchmark DAFW rate of 0.90.

Diversity, Equity, & Inclusion

Attracting, developing, and retaining a workforce of talented, diverse people is essential to having high-performing teams that drive results for muchour Company’s stakeholders. As part of our history and our commitment to it remainscultivating a culture of caring, we have inclusive benefits available for our U.S. non-represented workforce, including expanded parental leave, back-up dependent care, infertility coverage, gender reassignment coverage and healthcare continuation for the families of employees who suffered work-related or military service fatalities. We also support several employee resource groups (ERGs) to enhance employee engagement, promote a culture of belonging, foster diversity in the workplace, and raise awareness related to issues of identity and intersectionality. Our ERGs also provide training and education, mentorship and networking opportunities for their members.

Talent Attraction, Development and Retention

We believe that attraction, development and retention of talent is essential to our success, especially in today’s competitive labor market. We offer internship programs, partner with universities, community colleges and technical schools, and collaborate with community employment centers and economic development nonprofit organizations to build strong and diverse internal and external sources of potential employees and opportunities for our existing employee's growth and development.

Once at U. S. Steel, we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and above have a formal professional development plan that is assessed at least annually. In addition, we proactively monitor our attrition rates and take targeted actions to ensure our highest potential and performing employees are motivated to remain with the Company. Over the past five years, our regrettable voluntary turnover rate has been at or below 5 percent.

We offer a competitive total rewards package of compensation and benefits that we regularly evaluate and benchmark across the manufacturing industry to ensure that we position U. S. Steel as strong asan employer of choice.

At the products we make every day.

Our strategy is informed by our critical success factors, which are the bedrockonset of the “bestpandemic in early 2020, we quickly transitioned our corporate and administrative employees, approximately 10% of both” strategy: (1) Move Down the Cost Curve, (2) Winour workforce, to a work-from-home environment. We’ve invested in Strategic Markets,technology to maintain this virtual community and (3) Move Up the Talent Curve.

found that our employees are more productive and have more flexibility and autonomy in managing their workload in a way that best fits their situation. We continuously aimplan to move down the cost curve. Leading up to 2019, we improved our balance sheetmaintain a virtual / hybrid working option for these employees in order to increase investmentpromote workplace flexibility and attract and retain highly qualified employees across the country.

Labor Relations

Approximately 80% of our employees in keyNorth America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet the needs of our customers. Our relationship with the United Steelworkers (USW) includes not only a
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commitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company and ultimately the jobs of our employees.

Certain hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW entered into effective September 1, 2022, (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements include a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. The 2022 Labor Agreements also provide for certain increases to pension and retirement benefits, including increases in our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the Steelworkers Pension Trust from $3.50 to $4.00 per hour, effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. The OPEB plans were modified to allow the Company to utilize a certain amount of surplus assets to pay additional legally permissible benefits previously paid by the Company. The arrangement permits the Company to utilize a target of $75 million annually for active and retiree employee benefits, with an annual minimum of $50 million, beginning in 2023 and continuing through December 31, 2026. For additional information, see Note 18 to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.

Capital Structure, Liquidity and Capital Allocation

Our Best for All strategy's primary financial goal is to enhance stockholder value by utilizing our capital structure, liquidity and enhanced capital allocation priorities to advance the Company's strategic objectives, generate long-term value and reward stockholders. Our cash deployment strategy is aligned with our corporate strategy and includes: executing on strategic projects and portfolio moves; maintaining a strong balance sheet and a healthy pension plan; and delivering sustainable growth with a focus on core values such as safety and environmental stewardship and rewarding stockholders for the Gary Works hot strip mill. These investments were made to reduce costscontinued progress we make. Cash deployment is also performed with a customer-centric focus on improving safety, our environment, quality, delivery and increase capability. Our improved financial position has also enabled investment in strategic projects, such as the EAF at our Tubular Operations in Fairfield, Alabama. The EAF is expected to reduce cost by $90 per ton as the Company becomes self-sufficient in its rounds supply.cost.


Our liquidity supports our ability to satisfy short-term obligations, fund working capital requirements and provides a foundation to execute key strategic priorities. We are focused on maintaining a strong balance sheet and may proactively refinance or repay our debt from time to time to protect our capital structure from unforeseen external events and re-financing risks.
On May 27, 2022, U. S. Steel entered into the Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). The Credit Facility Agreement has substantially the same terms as the Fifth Credit Facility Agreement, except the Credit Facility Agreement references the Secured Overnight Financing Rate instead of the London Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to May 27, 2027, and the financial impact from replacing the Fifth Credit Facility Agreement was immaterial. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility remained the same at $1,750 million. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

On September 6, 2022, U. S. Steel closed on an offering of $290 million aggregate principal amount of 5.450% Environmental Improvement Revenue Bonds due 2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.
winning
In 2022, we repurchased approximately $365 million in strategic marketsdebt, and we ended the year with $5.9 billion of total liquidity.

through
On July 25, 2022, following the completion of previously authorized $800 million share repurchase programs, the Board of Directors authorized a customer-focused business model with an emphasis on creating differentiated, innovativenew share repurchase program for the repurchase of up to $500 million of the Company's outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.

U. S. Steel repurchased 37.6 million shares of common stock for approximately $849 million under these programs during the year ended December 31, 2022, and value-added solutions that will help our customers succeed. As partthere is approximately $301 million remaining under the current stock repurchase authorization. In addition, the Board of this effort,Directors declared quarterly dividends of five cents per common share for each of the quarters in 2020 we implemented an enhanced2022.

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Facilities and Locations as of December 31, 2022

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Flat-Rolled

The operating modelresults of all U. S. Steel's domestic-integrated steel and organizational structure to accelerate the company’s strategic transformationsheet plants, coke and better serve its customers.iron ore operations and ore and sheet production joint ventures are included in Flat-Rolled. Also, included within Flat-Rolled is a research and technology center located in Munhall, Pennsylvania (near Pittsburgh) and a technology center in Troy, Michigan. The realignmentresearch and technology center carries out a wide range of applied research, development and technical support functions. The technology center brings automotive sales, service, distribution and logistics services, product technology and applications research into one location and much of U. S. Steel’s leadership team around work in developing new grades of steel to meet the demands of automakers for high-strength, light-weight and formable materials is carried out at this location.

Flat-Rolled Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Gary Works, (Gary, Indiana)(a)
7.5 million tons of raw steelstrip mill plate in coil; hot-rolled, cold-rolled and coated sheets; and tin mill products
Midwest, (Portage, Indiana)
finishing facilityhot-rolled, cold-rolled and coated sheets; and tin mill products
Great Lakes Works(b),
(Ecorse, River Rouge and Dearborn, Michigan)
finishing facilitycold-rolled and coated sheets
Mon Valley Works (c):
Edgar Thompson, (Braddock, Pennsylvania),
Irvin, (West Mifflin, Pennsylvania), Fairless, (Fairless Hills, Pennsylvania), and
Clairton, (Clairton, Pennsylvania)
2.9 million tons of raw steel and 4.3 million tons of cokehot-rolled, cold-rolled and coated sheets; and coke and coke by-products
Granite City Works (d), (Granite City, Illinois)
2.8 million tons of raw steelslabs and hot-rolled, cold-rolled and coated sheets
Granite City Works, (Granite City, Illinois);
Gateway Energy and Coke Company LLC (Gateway)
coke supply agreementnot applicable
USS-UPI, LLC (UPI)(e), (Pittsburg, California)
finishing facilitycold-rolled and coated sheets; tin mill products
Fairfield Works,(Fairfield, Alabama)
finishing facilitycoated sheets
Minnesota Ore Operations: Minntac, (Mt. Iron, Minnesota) and Keetac, (Keewatin, Minnesota)
22.4 million tons of iron ore pelletsiron ore pellets
(a) The majority of tin operations were indefinitely idled as of December 31, 2022.
(b) The steel and ironmaking production facilities were permanently idled in December of 2021 and June of 2022, respectively. Great Lakes Works' pickle line, cold mill and CGL continue to operate, while the DESCO and electrolytic galvanizing lines are indefinitely idled.
(c) From time to time, we may swap coke with other domestic steel producers or sell on the open market. Coke by-products are sold to the chemicals and raw materials industries.
(d) In March 2020, one of the blast furnaces at Granite City Works was indefinitely idled.
(e) In February 2020, UPI was added with the purchase of the remaining 50% ownership interest from POSCO.

Joint Ventures Within Flat-Rolled

U. S. Steel participates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to our real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company owns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and Pennsylvania.

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Raw Materials and Energy

As a predominantly integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. For our EAF production, our primary raw material is scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices that are subject to fluctuations based on market conditions at the time.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, the Company's integrated steel process consumes approximately 1.4 tons of coal to produce one ton of coke and then it consumes approximately 0.3 tons of coke, 0.3 tons of steel scrap (approximately 60 percent of which is internally generated) and 1.3 tons of iron ore pellets to produce one ton of raw steel. In addition, we consume approximately 10 mmbtu’s of natural gas per ton produced. Generally, the Company's mini mill operations consumes approximately 0.8 tons of steel scrap, 0.3 tons of pig iron, and 0.1 tons of HBI to produce one ton of raw steel. In addition, the mini mill operations consume approximately 0.6 MKWH of electricity per ton of raw steel produced. While we believe that these estimated consumption amounts are useful for planning purposes, and are presented to give a general sense of raw material and energy consumption related to steel production, substantial variations may occur.

Iron Ore
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(a) Includes our share of production from Hibbing through December 31, 2022.

The iron ore facilities at Minntac and Keetac contain approximately 900 million short tons of indicated resources and probable reserves and our share of recoverable reserves at the Hibbing joint venture is approximately 4 million short tons. Refer to Mining Properties in Item 2 of this Form 10-K for additional information. Recoverable reserves are defined as the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Minntac and Keetac’s annual capability and our share of annual capability for the Hibbing joint venture total approximately 23 million tons. We have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We historically have sold iron ore pellets to third parties, including in 2022, 2021 and 2020. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are purchased from outside sources, primarily Ukrainian and Brazilian mining companies. Prices are determined in long-term contracts with strategic suppliers or as spot prices negotiated monthly or quarterly. USSE also has received iron ore from U. S. Steel’s iron ore facilities in North America. We believe that supplies of iron ore adequate to meet USSE’s needs are available at competitive market prices.

Coking Coal

All of U. S. Steel’s coal requirements for our cokemaking facilities are purchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, and from time to time we have entered into multi-year agreements for a portion of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or determined as index-based prices.
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We believe that supplies of coking coal adequate to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the United States, and sources for USSE include Poland, Ukraine, Canada, Australia and the United States.
Coke
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In North America, the Flat-Rolled segment operates a cokemaking facility at the Clairton Plant of Mon Valley Works. At our Granite City Works, we have a 15-year coke supply agreement with Gateway that expires on December 31, 2024. Blast furnace injection of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. Coke from time to time has been purchased from, sold to, or swapped with suppliers and other end-users to adjust for production needs and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polish and Czech coke producers to meet production needs. Volume and price are negotiated quarterly.
Steel Scrap and Other Materials

We believe that supplies of steel scrap and alloys that are adequate to meet our needs are readily available from outside sources at competitive market prices for the Flat-Rolled, Mini Mill and USSE segments. Generally, approximately 38 percent of our steel scrap requirements were internally generated through normal operations for these segments.
Limestone

All of Flat-Rolled’s limestone requirements and USSE's lime and limestone requirements are purchased from outside sources. We believe that supplies of limestone and lime adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin
We believe that supplies of zinc and tin required to fulfill the requirements for Flat-Rolled, Mini Mill and USSE are available from outside sources at competitive market prices. For Flat-Rolled and Mini Mill the main sources of zinc are Canada, Mexico and the United States and the main sources of tin are Bolivia, Brazil and Peru. For USSE, the main sources of zinc are Finland, Poland, the Netherlands, Germany and Slovakia and the main sources of tin are Peru, Indonesia, China and Bolivia.
During 2022, Flat-Rolled protected approximately 40 percent and 75 percent of its operation's zinc and tin purchases, respectively, with financial swap derivatives to manage exposure to zinc and tin price fluctuations. During 2022, USSE protected approximately 16 percent of its operation's zinc purchases with forward physical contracts to manage our exposure to zinc price fluctuations and protected approximately 68 percent of its operation's tin purchases with financial swaps to manage our exposure to tin price fluctuations. For further information, see Note 16 to the Consolidated Financial Statements.
Natural Gas

All of U. S. Steel’s natural gas requirements are purchased from outside sources.

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We believe that adequate supplies to meet Flat-Rolled’s, Mini Mill's and Tubular's needs are available at competitive market prices. For 2022, approximately 70 percent of our natural gas purchases in Flat-Rolled were based on bids solicited on a monthly basis from various vendors; the remainder were made daily or with term agreements.

We believe that adequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2022, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2022, approximately 48 percent of our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly or monthly basis.

Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE uses self-generated coke oven, converter and blast furnace gas to reduce consumption of natural gas and steam coal that results in lower CO2 emissions production.

Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and access to additional supply from countries including Norway, the U.S. and Africa. Together, these sources are enough to support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our USSE segment operations.

Industrial Gases

U. S. Steel purchases industrial gas in the U.S. under long-term contracts with various suppliers. USSE owns and operates its own industrial gas facility, but also may purchase industrial gases from time to time from third parties.


International Trade

U. S. Steel continues to face import competition, much of which is unfairly traded and fueled by massive global steel overcapacity, currently estimated to be over 500 million metric tons per year—more nimblethan five times the entire U.S. steel market and efficient executive functions, notably to sharpen focus onover seventeen times total U.S. steel imports. These imports and overcapacity negatively impact the Company’s operational and commercial excellencefinancial performance. U. S. Steel continues to lead efforts to address these challenges that threaten the Company, our workers, our stockholders and promote technological innovation, will enableour country’s national and economic security.

As of the companydate of this filing, pursuant to establish a more competitive cost structureseries of Presidential Proclamations issued in accordance with enhanced capabilitiesSection 232 of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subject to serve customersa 25 percent tariff, except imports from: (1) Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2) the European Union (EU), Japan and the United Kingdom (UK) that are melted and poured in strategic markets.the EU/Japan/UK, within quarterly tariff-rate quota (TRQ) limits; (3) Canada and Mexico, which are not subject to tariffs or quotas, but tariffs could be re-imposed on surging product groups after consultations; (4) Ukraine, which are exempt from tariffs until June 1, 2023; and (5) Australia, which are not subject to tariffs, quotas or an anti-surge mechanism.


The U.S. Department of Commerce (DOC) is managing a process in which U.S. companies may request and/or oppose temporary product exclusions from the Section 232 tariffs and quotas. U. S. Steel opposes exclusion requests for imported products that are the same as, or substitutes for, products manufactured by U. S. Steel.
Core
Multiple legal challenges to our strategythe Section 232 action continue before the U.S. Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit (CAFC), the latter which has consistently rejected constitutional and statutory challenges to the Section 232 action.

Since its implementation in March 2018, the Section 232 action has supported the U.S. steel industry’s and U. S. Steel’s investments in advanced steel production capabilities, technology and skills, strengthening U.S. national and economic security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) implemented a definitive safeguard on global steel imports in the form of TRQs that impose 25 percent tariffs on steel imports that exceed the TRQ limit, effective through June 2024. In December 2022, the EC initiated a fourth review of the safeguard.

Antidumping duties (AD) and countervailing duties (CVD or antisubsidy duties) apply in addition to the Section 232 tariffs, quotas, TRQs and the EC’s safeguard, and AD/CVD orders may continue beyond the Section 232 action and the EC’s safeguard. U. S. Steel continues to actively defend and maintain the 61 U.S. AD/CVD orders and 14 EU AD/CVD orders covering U. S. Steel products in multiple proceedings before the DOC, U.S. International Trade Commission (ITC), CIT, CAFC, the EC and European courts, and the World Trade Organization (WTO).

In July 2022, the ITC voted to continue the AD/CVD orders on corrosion-resistant steel from China, India, Italy, South Korea and Taiwan and cold-rolled steel from China, India, Japan, South Korea and the UK for another five years, but voted to revoke the AD/CVD orders on cold-rolled steel from Brazil. In October 2022, the ITC voted to continue the AD/CVD orders on hot-rolled
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steel from Australia, Japan, Korea, Netherlands, Russia, Turkey and the United Kingdom for another five years, but voted to revoke the AD/CVD orders on hot-rolled steel from Brazil. Also, in October 2022, the ITC voted to impose new AD/CVD orders on imports of OCTG from Argentina, Mexico, Korea and Russia.

In August 2022, the EC imposed definitive AD measures on imports of hot-dipped galvanized steel from Russia and Turkey and announced the continuation of AD measures on imports of cold-rolled steel from China and Russia for another five years. The EC is moving upconducting five-year reviews of the talent curveAD/CVD orders on hot-rolled steel from five countries with a decision expected in 2023.

In April 2022, the U.S. suspended normal trade relations with Russia and Belarus, resulting in higher than normal tariffs on imports from Russia and Belarus, including steel and raw materials. In June, President Biden announced additional tariff increases on certain products from Russia, including certain steel products and ferroalloys, effective August 1, 2022.
.
Additional tariffs of 7.5 to 25 percent continue to apply to certain U.S. imports from China, including certain raw materials used in steel production, semi-finished and finished steel products, and downstream steel-intensive products, pursuant to Section 301 of the Trade Act of 1974. The successOffice of our businessthe United States Trade Representative (USTR) is drivencurrently conducting a statutory review of the Section 301 tariffs.

The United States and EU are currently negotiating a global sustainable steel arrangement to restore market-oriented conditions and address carbon intensity that is targeted for completion by the effortsend of our hard-working employees. We know that we must work to identify, attract and retain best-in-class diverse talent. Our goal is to build a pipeline mapping the right people to the right value-driving roles. This includes providing the training and resources they need to succeed and fostering a culture where accountability, fairness and respect are foundational, and high performance and diversity in all its forms are valued and celebrated. This type of environment incentivizes the right behavior and allows for a best talent wins environment to help us achieve our “best of both” strategy.2023.

U. S. Steel will continue to evaluate potential strategic and organizational opportunities, which may include the acquisition, divestiture or consolidation of assets. Given the cyclicality of our industry, we are focused on strategically maintaining and spending cash, in order to invest in areas consistent with the execution of our "best of both" strategy, such as sustainable steel technologies, and are considering various possibilities, including exiting lines of business and the sale of certain assets, that we believe would ultimately result in greater stockholder value. The Company will pursue opportunities based on its long-term strategy, and what the Board of Directors determines to be in the best interests of the Company's stockholders at the time.

"Best of Both"
U. S. Steel is executingexecute a transformationalbroad, global strategy to develop the “best of both” integratedmaximize opportunities and mini mill capabilities to improve competitivenessnavigate challenges presented by imports, global steel overcapacity, and drive through-cycle cash flow. Through a series of operational improvements, strategic investmentsinternational trade law and portfolio moves, to be completed over the next several years, U. S. Steel plans to execute a strategy focused on differentiating on the basis of cost and/or capability to improve customer focus and competitiveness and drive through-cycle cash flow generation. Execution of U. S. Steel’s strategy will position the Company with a suite of world-class assets with distinct advantages to serve current and future customers with high-tech, sustainable steel solutions. The strategy is focused on commercial differentiation, which the Company currently believes can be achieved by centering its North American Flat-Rolled operations around three core market-leading, differentiated and technologically advanced assets: the investment in Big River Steel (located in Osceola, Arkansas), Mon Valley Works

(located near Pittsburgh, Pennsylvania) and Gary Works (located in Gary, Indiana). This will enhance our competitive positioning in strategic end markets to offer customers differentiated products to deliver highly competitive long-term cash flow generation through higher earnings and lower sustaining capital expenditures.
Strategic Projects and Technology Investments
On October 31, 2019, the Company completed the first step in acquiring Big River Steel in Osceola, Arkansas, through the purchase of a 49.9% ownership interest at a purchase price of approximately $683 million in cash, with a call option to acquire the remaining 50.1% within the next four years at an agreed-upon price formula, which in years three and four is based on Big River Steel’s achievement of certain metrics that include: free cash flow, product development, safety and the completion of a proposed expansion of Big River Steel's existing manufacturing line. As part of the current ownership structure, the other Big River Steel equity owners can require U. S. Steel to purchase their 50.1% ownership interest or require U. S. Steel to sell its ownership interest after U. S. Steel's call option expires under certain circumstances.
In May 2019, U. S. Steel announced that it will construct a new endless casting and rolling facility at its Edgar Thomson Plant in Braddock, Pennsylvania, and a cogeneration facility at its Clairton Plant in Clairton, Pennsylvania, both part of the Company's Mon Valley Works. This investment in state-of-the-art sustainable steel technology is expected to significantly upgrade the production capability of our lowest liquid steel cost mill in the U.S., while further reducing conversion costs through improved process efficiencies, yield and energy consumption. Since announcement, the Company identified the potential need for additional equipment at the Edgar Thomson steel shop. The Company has amended the environmental permit applications to include a new ladle metallurgy facility (LMF). In addition, the expected capital costs of achieving the Company’s ambitious environmental targets from its future cogeneration facility have increased. The Company now expects the total investment for the new endless casting and rolling facility at its Edgar Thomson Plant and cogeneration facility at its Clairton Plant to be approximately $1.5 billion, with the expected incremental run-rate EBITDA benefits of approximately $275 million unchanged. The Company does not expect the increase in the expected cost of the new endless casting and rolling and cogeneration facilities to impact the Company’s total capital spending requirements, as lower return projects will be deprioritized from the Company’s total capital plans to offset this increase.    policy developments.
The installation of endless casting and rolling technology will allow differentiated product capabilities to serve strategic markets. With this technology the Mon Valley Works should become the principal source of substrate for the production of the Company's industry-leading XG3TM advanced high strength steel (AHSS), a market leading solution for our customers to improve fuel efficiency. The cogeneration facility, equipped with state-of-the-art emissions control systems at the Company's Clairton Plant, will convert a portion of the coke oven gas generated at its Clairton Plant into electricity to power the steelmaking and finishing facilities throughout U. S. Steel's Mon Valley operations. This project, in addition to producing sustainable AHSS, is expected to improve environmental performance, energy conservation and reduce our carbon footprint associated with Mon Valley Works. First steel production is expected in 2022, contingent upon permitting and construction.
In February 2019, U. S. Steel restarted construction of the EAF steelmaking facility at its Tubular operations in Fairfield, Alabama. The EAF is expected to strengthen our competitive position and reduce cost by $90 per ton as the Company becomes self-sufficient in its rounds supply. The EAF is expected to begin producing steel in the second half of 2020.
The Company expects to invest approximately $500 million, of which approximately 35 percent has already been spent, to upgrade the Gary Works hot strip mill through a series of projects focused on expanding the line's competitive advantages. The Gary Works hot strip mill will further differentiate itself as a leader in heavy-gauge products in strategic markets. We continue to be flexible as we execute the remaining investments at the Gary Works hot strip mill.
In January 2019, U. S. Steel announced the construction of a new Dynamo line at USSE. The new line, a $130 million investment, has an annual capacity of approximately 100,000 metric tons. Construction on the Dynamo line began in mid-2019 and was targeted to be operational in the fourth quarter of 2020, but based on the current market conditions the project operational date has been extended to the fourth quarter of 2022. Upon its completion, the new line will enable production of sophisticated silicon grades of non-grain oriented (NGO) electrical steels to support increased demand in vehicles and generators.

Commercial Strategy

Beginning January 1, 2020, the Company implemented an enhanced operating model and organizational structure to accelerate its strategic transformation and better serve its customers. The new operating model is centered around

manufacturing, commercial, and technological excellence. Our former “commercial entity” structure was put into place to deepen understanding of business ownership and our relationships with customers and allowed the Company to identify the technology that would differentiate our products and processes on the basis of cost and/or capabilities. The new enhanced operating model enables us to implement our "best of both" strategy faster by making us a more nimble technologically superior customer driven company positioned to deliver the benefits of our strategy through the business cycle.

Our commercial strategy is focused on providing customer focusedcustomer-centric solutions with differentiated and value-added steel products, which includes advanced high strength steels such as our newly developednewer grades on Gen3of generation 3 (GEN3) steel, coated sheets for the automotive and appliance industries, electrical steel sheets for the manufacture of motors and electrical equipment, both bare and prepainted galvanized and Galvalume® sheets for construction, heavy gauge hot rolled skelpcoils used in the production of energy transmittingconstruction and agricultural-related heavy machinery as well as skelp for line pipe heavy gauge-wide hot rolled coils,used for energy transmission as well as extraction, tin mill products for the packaging industry and OCTG pipe, connections, accessories and rig site services for use in drilling for oil and gas. In addition, our portfolio of customers serves a variety of different traditional and emerging industries meeting the needs of numerous markets.

U. S. Steel is committed to leveraging our Best for All strategy to develop and commercialize our low-carbon footprint and advanced high-strength steels for our current and future customers. Over the next five years, U. S. Steel plans to develop and commercialize numerous differentiated grades of low-carbon footprint, high rate of recycled-content steels, providing compelling new options for customers in automotive, appliance, industrial equipment, construction, renewable energy and other markets to enhance the sustainability of their products. For example, in April 2021, we announced a new sustainable steel product line, verdeXTM, which is made with up to 90% recycled steel content and a reduced carbon footprint - as much as 70-80% smaller than traditional integrated steelmaking methods. After launching our verdeXTM brand of sustainable steel products in 2021, we worked closely with customers on their own sustainability goals. In 2022, we reached agreements with multiple customers on the sale of verdeXTM products moving forward in industries such as automotive, construction, and distribution, setting the stage for increased sales of verdeXTM in these and other industries in 2023 and beyond. In addition, we continue to work with customers in numerous industries to help them implement AHSS solutions in the products they manufacture. While the automotive industry has been most active in the application of these products in new vehicle platforms, and it continues to accelerate the deployment of AHSS solutions in new vehicle launches, U. S. Steel is successfully introducing AHSS in other industries as well. Our collaboration with Greenbrier and Norfolk-Southern generated new AHSS sales into the railcar market in 2022, and we also commenced new projects in other industries such as appliance, construction, and in the renewable energy sector to create stronger, lightweight, cost-effective AHSS applications.

We are responsive to our customers' changing needs by developing new steel products and uses for steel that meet thetheir evolving marketmarkets and regulatory demands imposed on them. In connection with this commitment, wedemands. We have research centers in Pittsburgh,Munhall, Pennsylvania, and Košice, Slovakia, an automotiveand Houston, Texas, as well as a technology center in Troy, Michigan and a Research and Development Laboratory and Test Facility for Tubular products in Houston, Texas.Michigan. The focus of these centers is to developengineer new products and to collaborate with our customers to better provideco-create innovative solutions that meet our customers' toughest challenges to reduce carbon emissions, increase strength, improve longevity and serve the needs of their needs.customers. In the fourth quarter 2022, we continued to invest in our talent by hiring a Chief Technology Officer to provide overall enterprise leadership, focusing on driving innovation and product development, as well as enhancing our manufacturing capability.

For automotive markets,customers leveraging advanced high strength steels, we are in the process of commissioning ourcommissioned a first of its kind GEN3 hot dipped galvanize line at our PRO-TEC Coating Company (PRO-TEC) joint venture in 2020, and have embedded application engineers at original equipment manufacturers (OEMs) to demonstrate how to best utilize the high strength, highly formable, cost effective material in body design to meet automobile passenger safety requirements while significantly reducing weight to meet future vehicle fuel efficiency standards.

In our tubular markets, we continue development of premium and semi-premium tubular connections designed for our customers operatingthat operate in challenging drilling environments. These connections optimize performancewell construction activities and provide outstanding sealing capabilities for onshore and offshore oil and gas drilling in North America. An example is the USS-FREEDOMUSS-TALON HTQ™, which was introduced in 20192020 for customers drilling deep, high-pressure horizontalthat are constructing onshore natural gas and oil wells with long laterals requiring superiorbest-in-class torque capacity. Pleasecapacity and optimized well-bore clearances.

Commercial Sales of Product

U. S. Steel characterizes sales as contract sales if sold pursuant to an agreement with a defined volume and pricing and a duration of longer than three months, and as spot if sold without a defined volume and pricing agreement, typically three months or less. In 2022, approximately 76 percent, 61 percent, 48 percent and 78 percent of sales by Flat-Rolled, Mini Mill, USSE and Tubular, respectively, were contract sales. Some contract pricing agreements include fixed prices while others are adjusted periodically based upon published prices of steel products or cost components.
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Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the top talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best for All strategy. We refer to this strategic talent pillar as “Moving Up the Talent Curve.”

Our focus on people extends to our current and future employees. We aim to have an engaged and diverse workforce to promote new ideas and innovation, reflect the communities where we operate, and deliver exceptional customer service. We seek to build an inclusive environment where people feel free to bring their professional selves to work. To achieve the Best for All strategy, we must have the “Best from All.”

Active Employees as of December 31, 2022
North America14,487 
Slovakia8,253 
Total22,740

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and Respect; Environmental Stewardship; Excellence and Accountability; and Lawful and Ethical Conduct. We expect our employees and members of our board of directors to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that employees understand the Company’s expectations and all applicable rules, we provide annual formal ethics and compliance training to our employees and have frequent communications with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully and ethically that include reminders of the company’s expectations for all employees. In addition, through our annual policy certification process, employees of USSK, non-represented employees in the United States, and members of our board of directors certify their ongoing compliance with our Code of Ethical Business Conduct.

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of every person who works in our facilities. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents. In addition, the psychological safety of all employees is important to us. We have combined physical safety and psychological safety into the construct of 360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our success as the tools and technologies we rely on to do business.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes. One of our most important safety protocols is our fatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA Days Away From Work (DAFW). This measurement allows us to evaluate the frequency of injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.
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For 2022, we had a corporate DAFW rate of 0.05, which is 18 times better than the U.S. Bureau of Labor Statistics' Iron and Steel benchmark DAFW rate of 0.90.

Diversity, Equity, & Inclusion

Attracting, developing, and retaining a workforce of talented, diverse people is essential to having high-performing teams that drive results for our Company’s stakeholders. As part of our commitment to cultivating a culture of caring, we have inclusive benefits available for our U.S. non-represented workforce, including expanded parental leave, back-up dependent care, infertility coverage, gender reassignment coverage and healthcare continuation for the families of employees who suffered work-related or military service fatalities. We also support several employee resource groups (ERGs) to enhance employee engagement, promote a culture of belonging, foster diversity in the workplace, and raise awareness related to issues of identity and intersectionality. Our ERGs also provide training and education, mentorship and networking opportunities for their members.

Talent Attraction, Development and Retention

We believe that attraction, development and retention of talent is essential to our success, especially in today’s competitive labor market. We offer internship programs, partner with universities, community colleges and technical schools, and collaborate with community employment centers and economic development nonprofit organizations to build strong and diverse internal and external sources of potential employees and opportunities for our existing employee's growth and development.

Once at U. S. Steel, we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and above have a formal professional development plan that is assessed at least annually. In addition, we proactively monitor our attrition rates and take targeted actions to ensure our highest potential and performing employees are motivated to remain with the Company. Over the past five years, our regrettable voluntary turnover rate has been at or below 5 percent.

We offer a competitive total rewards package of compensation and benefits that we regularly evaluate and benchmark across the manufacturing industry to ensure that we position U. S. Steel as an employer of choice.

At the onset of the pandemic in early 2020, we quickly transitioned our corporate and administrative employees, approximately 10% of our workforce, to a work-from-home environment. We’ve invested in technology to maintain this virtual community and found that our employees are more productive and have more flexibility and autonomy in managing their workload in a way that best fits their situation. We plan to maintain a virtual / hybrid working option for these employees in order to promote workplace flexibility and attract and retain highly qualified employees across the country.

Labor Relations

Approximately 80% of our employees in North America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet the needs of our customers. Our relationship with the United Steelworkers (USW) includes not only a
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commitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company and ultimately the jobs of our employees.

Certain hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW entered into effective September 1, 2022, (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements include a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. The 2022 Labor Agreements also provide for certain increases to pension and retirement benefits, including increases in our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the Steelworkers Pension Trust from $3.50 to $4.00 per hour, effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. The OPEB plans were modified to allow the Company to utilize a certain amount of surplus assets to pay additional legally permissible benefits previously paid by the Company. The arrangement permits the Company to utilize a target of $75 million annually for active and retiree employee benefits, with an annual minimum of $50 million, beginning in 2023 and continuing through December 31, 2026. For additional information, see Note 18 to the Consolidated Financial Statements in Part II Item I. Business Strategy for further details8 of related strategies.this Form 10-K.

Capital Structure, Liquidity and Liquidity

Capital Allocation

Our Best for All strategy's primary financial goal is to enhance stockholder value by utilizing our capital structure, liquidity and financial flexibilityenhanced capital allocation priorities to deploy cash toadvance the Company's strategic objectives, generate stockholder value.long-term value and reward stockholders. Our cash deployment strategy is aligned with our world-competitive, “best of both”corporate strategy and includes: executing on strategic projects and portfolio moves; maintaining a strong balance sheet and a healthy pension plan; and delivering sustainable growth with a focus on core values such as safety and environmental stewardship.stewardship and rewarding stockholders for the continued progress we make. Cash deployment is also performed with a customer-centric focus on improving safety, our environment, quality, delivery and cost.

Our liquidity supports our ability to satisfy short-term obligations, fund working capital requirements and provides a foundation to execute key strategic priorities including the acquisition of our 49.9% ownership interest in Big River Steel that was completed in October 2019, the ongoing investment in the EAF within our Tubular segment and the endless casting and rolling facility at Mon Valley Works.
priorities. We are focused on maintaining a strong balance sheet and may proactively refinance or repay our debt from time to time to protect our capital structure from unforeseen external events and re-financing risks.
In 2019, we undertook several steps to support these goals. The CompanyOn May 27, 2022, U. S. Steel entered into a new five-year senior secured asset-based revolving credit facility in an aggregate amount of $2.0 billion maturing in October 2024the Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). We drew down $700 million onThe Credit Facility Agreement has substantially the same terms as the Fifth Credit Facility Agreement, to fund our acquisition of our 49.9% interest in Big River Steel and subsequently repaid $100 millionexcept the Credit Facility Agreement references the Secured Overnight Financing Rate instead of the amount drawn. InLondon Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to May 27, 2027, and the financial impact from replacing the Fifth Credit Facility Agreement was immaterial. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility remained the same at $1,750 million. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

On September 2019, USSK drew down €150 million (approximately $165 million) from its €460 million (approximately $517 million) revolving credit facility (USSK Credit Agreement), most of which was repatriated from USSK to its parent,6, 2022, U. S. Steel. USSK entered into a supplemental agreement that amended the USSK Credit Agreement leverage covenant and pledged certain USSK trade receivables and inventory as collateral in supportSteel closed on an offering of USSK’s obligations. The USSK Credit Agreement financial covenants also include a minimum stockholders’ equity to assets ratio. We also launched offerings

of two series of environmental revenue bonds in$290 million aggregate principal amount of approximately $368 million, that will mature between 2024 and 2049. Proceeds of the 20195.450% Environmental Improvement Revenue Bonds in the amount of approximately $93 million were used to redeem a portion of our existing outstanding environmental revenue bonds for which we issued a conditional redemption notice. Proceeds of the 2019 Environmental Revenue Bonds in the amount of $275 million will be used to finance or refinance the acquisition, construction, equipping and installation of certain solid waste disposal facilities, including an EAF and other equipment and facilities at the Company’s Fairfield Works. U. S. Steel issued an aggregate principal amount of $350 million of 5.00% Senior Convertible Notes due November 1, 2026 (2026 Senior Convertible Notes)2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $340$287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the saleissuance of the 2026 Senior Convertible Notes after deducting underwriting fees2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and offering expenses.other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.

In 2022, we repurchased approximately $365 million in debt, and we ended the year with $5.9 billion of total liquidity.

On July 25, 2022, following the completion of previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program for the repurchase of up to $500 million of the Company's outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.

U. S. Steel repurchased 37.6 million shares of common stock for approximately $849 million under these programs during the year ended December 31, 2022, and there is approximately $301 million remaining under the current stock repurchase authorization. In addition, the Board of Directors declared quarterly dividends of five cents per common share for each of the quarters in 2022.

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Facilities and Locations as of December 31, 2022

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Flat-Rolled

The operating results of all U. S. Steel's domestic-integrated steel and sheet plants, coke and iron ore operations and ore and sheet production joint ventures are included in Flat-Rolled. Also, included within Flat-Rolled is a research and technology center located in Munhall, Pennsylvania (near Pittsburgh) and a technology center in Troy, Michigan. The research and technology center carries out a wide range of applied research, development and technical support functions. The technology center brings automotive sales, service, distribution and logistics services, product technology and applications research into one location and much of U. S. Steel’s work in developing new grades of steel to meet the demands of automakers for high-strength, light-weight and formable materials is carried out at this location.

Flat-Rolled Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Gary Works, (Gary, Indiana)(a)
7.5 million tons of raw steelstrip mill plate in coil; hot-rolled, cold-rolled and coated sheets; and tin mill products
Midwest, (Portage, Indiana)
finishing facilityhot-rolled, cold-rolled and coated sheets; and tin mill products
Great Lakes Works(b),
(Ecorse, River Rouge and Dearborn, Michigan)
finishing facilitycold-rolled and coated sheets
Mon Valley Works (c):
Edgar Thompson, (Braddock, Pennsylvania),
Irvin, (West Mifflin, Pennsylvania), Fairless, (Fairless Hills, Pennsylvania), and
Clairton, (Clairton, Pennsylvania)
2.9 million tons of raw steel and 4.3 million tons of cokehot-rolled, cold-rolled and coated sheets; and coke and coke by-products
Granite City Works (d), (Granite City, Illinois)
2.8 million tons of raw steelslabs and hot-rolled, cold-rolled and coated sheets
Granite City Works, (Granite City, Illinois);
Gateway Energy and Coke Company LLC (Gateway)
coke supply agreementnot applicable
USS-UPI, LLC (UPI)(e), (Pittsburg, California)
finishing facilitycold-rolled and coated sheets; tin mill products
Fairfield Works,(Fairfield, Alabama)
finishing facilitycoated sheets
Minnesota Ore Operations: Minntac, (Mt. Iron, Minnesota) and Keetac, (Keewatin, Minnesota)
22.4 million tons of iron ore pelletsiron ore pellets
(a) The majority of tin operations were indefinitely idled as of December 31, 2022.
(b) The steel and ironmaking production facilities were permanently idled in December of 2021 and June of 2022, respectively. Great Lakes Works' pickle line, cold mill and CGL continue to operate, while the DESCO and electrolytic galvanizing lines are indefinitely idled.
(c) From time to time, we may swap coke with other domestic steel producers or sell on the open market. Coke by-products are sold to the chemicals and raw materials industries.
(d) In March 2020, one of the blast furnaces at Granite City Works was indefinitely idled.
(e) In February 2020, UPI was added with the purchase of the remaining 50% ownership interest from POSCO.

Joint Ventures Within Flat-Rolled

U. S. Steel participates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to our real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company intendsowns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and Pennsylvania.

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Raw Materials and Energy

As a predominantly integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. For our EAF production, our primary raw material is scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices that are subject to usefluctuations based on market conditions at the net proceedstime.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, the Company's integrated steel process consumes approximately 1.4 tons of coal to produce one ton of coke and then it consumes approximately 0.3 tons of coke, 0.3 tons of steel scrap (approximately 60 percent of which is internally generated) and 1.3 tons of iron ore pellets to produce one ton of raw steel. In addition, we consume approximately 10 mmbtu’s of natural gas per ton produced. Generally, the Company's mini mill operations consumes approximately 0.8 tons of steel scrap, 0.3 tons of pig iron, and 0.1 tons of HBI to produce one ton of raw steel. In addition, the mini mill operations consume approximately 0.6 MKWH of electricity per ton of raw steel produced. While we believe that these estimated consumption amounts are useful for planning purposes, and are presented to give a general corporate purposes,sense of raw material and energy consumption related to steel production, substantial variations may occur.

Iron Ore
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(a) Includes our share of production from Hibbing through December 31, 2022.

The iron ore facilities at Minntac and Keetac contain approximately 900 million short tons of indicated resources and probable reserves and our share of recoverable reserves at the Hibbing joint venture is approximately 4 million short tons. Refer to Mining Properties in Item 2 of this Form 10-K for additional information. Recoverable reserves are defined as the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Minntac and Keetac’s annual capability and our share of annual capability for the Hibbing joint venture total approximately 23 million tons. We have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We historically have sold iron ore pellets to third parties, including without limitation,in 2022, 2021 and 2020. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are purchased from outside sources, primarily Ukrainian and Brazilian mining companies. Prices are determined in long-term contracts with strategic suppliers or as spot prices negotiated monthly or quarterly. USSE also has received iron ore from U. S. Steel’s iron ore facilities in North America. We believe that supplies of iron ore adequate to meet USSE’s needs are available at competitive market prices.

Coking Coal

All of U. S. Steel’s coal requirements for previously announced strategic investmentsour cokemaking facilities are purchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, and capital expenditures.

Also, in 2019from time to time we have entered into multi-year agreements for a vendor supported Export Credit Agreement (ECA)portion of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or determined as index-based prices.
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We believe that supplies of coking coal adequate to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the United States, and sources for USSE include Poland, Ukraine, Canada, Australia and the United States.
Coke
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In North America, the Flat-Rolled segment operates a cokemaking facility at the Clairton Plant of Mon Valley Works. At our Granite City Works, we have a 15-year coke supply agreement with various financial institutionsGateway that expires on December 31, 2024. Blast furnace injection of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. Coke from time to time has been purchased from, sold to, or swapped with suppliers and other end-users to adjust for production needs and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polish and Czech coke producers to meet production needs. Volume and price are negotiated quarterly.
Steel Scrap and Other Materials

We believe that supplies of steel scrap and alloys that are adequate to meet our needs are readily available from outside sources at competitive market prices for the purposeFlat-Rolled, Mini Mill and USSE segments. Generally, approximately 38 percent of financing equipmentour steel scrap requirements were internally generated through normal operations for these segments.
Limestone

All of Flat-Rolled’s limestone requirements and USSE's lime and limestone requirements are purchased from outside sources. We believe that supplies of limestone and lime adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin
We believe that supplies of zinc and tin required to fulfill the Mon Valley Works endless castingrequirements for Flat-Rolled, Mini Mill and rolling line. The ECA will makeUSSE are available two loan facilities, a Covered Facility notfrom outside sources at competitive market prices. For Flat-Rolled and Mini Mill the main sources of zinc are Canada, Mexico and the United States and the main sources of tin are Bolivia, Brazil and Peru. For USSE, the main sources of zinc are Finland, Poland, the Netherlands, Germany and Slovakia and the main sources of tin are Peru, Indonesia, China and Bolivia.
During 2022, Flat-Rolled protected approximately 40 percent and 75 percent of its operation's zinc and tin purchases, respectively, with financial swap derivatives to exceedmanage exposure to zinc and tin price fluctuations. During 2022, USSE protected approximately $250 million16 percent of its operation's zinc purchases with forward physical contracts to manage our exposure to zinc price fluctuations and a Commercial Facility notprotected approximately 68 percent of its operation's tin purchases with financial swaps to exceed approximately $38 million. Funding of the ECA is expectedmanage our exposure to occur during the first quarter of 2020. Seetin price fluctuations. For further information, see Note 1716 to the Consolidated Financial Statements for further details.Statements.
Natural Gas

All of U. S. Steel’s natural gas requirements are purchased from outside sources.

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We ended 2019believe that adequate supplies to meet Flat-Rolled’s, Mini Mill's and Tubular's needs are available at competitive market prices. For 2022, approximately 70 percent of our natural gas purchases in Flat-Rolled were based on bids solicited on a monthly basis from various vendors; the remainder were made daily or with $2.3 billionterm agreements.

We believe that adequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2022, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2022, approximately 48 percent of total liquidity.our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly or monthly basis.

Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE uses self-generated coke oven, converter and blast furnace gas to reduce consumption of natural gas and steam coal that results in lower CO2 emissions production.
Steel Industry Background
Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and Competitionaccess to additional supply from countries including Norway, the U.S. and Africa. Together, these sources are enough to support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our USSE segment operations.

The global steel industry is cyclical, highly competitive and has historically been characterized by overcapacity.Industrial Gases

U. S. Steel's competitive position may be affected by, among other things, differences among U. S. Steel's and its competitors' cost structure, labor costs, environmental remediation and compliance costs, global capacity and the existence and magnitude of government subsidies provided to competitors.

U. S. Steel competespurchases industrial gas in the U.S. under long-term contracts with many North Americanvarious suppliers. USSE owns and international steel producers. Competitors include 1) integrated producers, which, like U. S. Steel, use iron ore and coke as the primary raw materials for steel production, 2) EAF producers, which primarily use steel scrap and other iron-bearing feedstocks as raw materials and 3) slab re-rollers, whooperates its own industrial gas facility, but also may purchase mostly imported semi-finished products and convert them into sheet products. Global steel capacity has continuedindustrial gases from time to increase, with notable changes in 2018 Chinese crude steel production of 928 million metric tonnes, a 6.6% increasetime from 2017, and estimated to be more than 57 million metric tonnes above the apparent crude steel demand in China (source: worldsteel). In addition, other materials, such as aluminum, plastics and composites, compete with steel in several applications.

EAF producers typically require lower capital expenditures for construction of facilities and may have lower total employment costs; however, these competitive advantages may be minimized or eliminated by the cost of scrap when scrap prices are high. Some EAF producers utilize thin slab casting technology to produce flat-rolled products and are increasingly able to compete directly with integrated producers in many flat-rolled product applications previously produced only by integrated steelmakers. Slab re-rollers do not incur the cost of melting steel, their input costs are driven by the market price of slabs.

U. S. Steel provides defined benefit pension and/or other post-employment benefits to approximately 85,000 current employees, retirees and their beneficiaries. Many of our competitors do not have comparable retiree obligations. Participation in U. S. Steel's main defined benefit pension plan was closed to new entrants on July 1, 2003 and benefit accruals for all non-represented participants were frozen effective December 31, 2015. Participation in U. S. Steel’s retiree medical and life insurance programs for USW-represented employees were closed to employees hired or rehired (except in limited circumstances) on or after January 1, 2016. Retiree medical and life insurance benefits for non-represented employees were eliminated for those who retired after December 31, 2017.

third parties.
We believe that our major North American and many European integrated steel competitors are confronted with substantially similar environmental regulatory conditions and therefore do not believe that our relative position with regard to such competitors will be materially affected by the impact of environmental laws and regulations. However, if future regulations do not recognize the fact that the integrated steel process involves a series of chemical reactions involving carbon that create carbon dioxide (CO2) emissions without linking these emissions to steel scrap as well, our competitive position relative to mini-mills will be adversely impacted. Our competitive position compared to producers in developing nations such as China, Russia, Ukraine, Turkey, Brazil and India, will be harmed unless such nations

require commensurate reductions in CO2emissions or there are border adjustment tariffs for CO2. Competing materials such as plastics may not be similarly impacted. The specific impact on each competitor will vary depending on a number of factors, including the age and location of its operating facilities and its production methods. U. S. Steel is also responsible for remediation costs related to former and present operating locations and disposal of environmentally sensitive materials. Many of our competitors, including North American producers, or their successors, that have been the subject of bankruptcy relief have no or substantially lower liabilities for such environmental remediation matters.

International TradeJoint Ventures Within Flat-Rolled

U. S. Steel continuesparticipates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to face import competition, muchour real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company owns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and Pennsylvania.

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Raw Materials and Energy

As a predominantly integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. For our EAF production, our primary raw material is scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices that are subject to fluctuations based on market conditions at the time.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, the Company's integrated steel process consumes approximately 1.4 tons of coal to produce one ton of coke and then it consumes approximately 0.3 tons of coke, 0.3 tons of steel scrap (approximately 60 percent of which is unfairly traded, supported by foreign governments,internally generated) and fueled by massive global1.3 tons of iron ore pellets to produce one ton of raw steel. In addition, we consume approximately 10 mmbtu’s of natural gas per ton produced. Generally, the Company's mini mill operations consumes approximately 0.8 tons of steel overcapacity, currentlyscrap, 0.3 tons of pig iron, and 0.1 tons of HBI to produce one ton of raw steel. In addition, the mini mill operations consume approximately 0.6 MKWH of electricity per ton of raw steel produced. While we believe that these estimated consumption amounts are useful for planning purposes, and are presented to be over 440give a general sense of raw material and energy consumption related to steel production, substantial variations may occur.

Iron Ore
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(a) Includes our share of production from Hibbing through December 31, 2022.

The iron ore facilities at Minntac and Keetac contain approximately 900 million metricshort tons per year. These imports, as wellof indicated resources and probable reserves and our share of recoverable reserves at the Hibbing joint venture is approximately 4 million short tons. Refer to Mining Properties in Item 2 of this Form 10-K for additional information. Recoverable reserves are defined as the underlying policies/practicestons of product that can be used internally or delivered to a customer after considering mining and overcapacity, impact the Company’s operationalbeneficiation or preparation losses. Minntac and financial performance. U. S. Steel continues to lead efforts to address these challenges that threaten the Company, our workers, our stockholders,Keetac’s annual capability and our country’s national and economic security.
Asshare of the date of this filing, pursuant to a series of Presidential Proclamations issued in accordance with Section 232 of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subject to a 25 percent tariff, except for imports from: (1) Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2) Canada and Mexico, which are not subject to either tariffs or quotas but tariffs could be re-imposed on surging product groups after consultations; and (3) Australia, which is not subject to tariffs, quotas, or an anti-surge mechanism. A January 24, 2020, Presidential Proclamation expanded the Section 232 tariffs to cover imports of certain downstream steel products from countries subject to the Section 232 tariffs, effective February 8, 2020.
The U.S. Department of Commerce (DOC) is managing a process in which U.S. companies may request and/or oppose temporary product exclusions from the Section 232 tariffs or quotas. Over 114,000 exclusions have been requested for steel products. U. S. Steel opposes exclusion requests for products that are the same as, or substitute products for, those produced by U. S. Steel.
Several legal challenges and retaliatory trade measures have been initiated in response to the Section 232 action. The American Institute for International Steel’s appeal of the March 2019 U.S. Court of International Trade (CIT) decision upholding the constitutionality of the Section 232 statute is pending before the U.S. Court of Appealsannual capability for the Federal Circuit (CAFC). ThereHibbing joint venture total approximately 23 million tons. We have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We historically have sold iron ore pellets to third parties, including in 2022, 2021 and 2020. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are currently six Section 232 challenges before the CIT. Multiple countries have challenged the Section 232 action at the World Trade Organization (WTO), imposed retaliatory tariffs, and/purchased from outside sources, primarily Ukrainian and Brazilian mining companies. Prices are determined in long-term contracts with strategic suppliers or acted to safeguard their domestic steel industriesas spot prices negotiated monthly or quarterly. USSE also has received iron ore from increased steel imports. In turn, the United States has challenged the retaliation at the WTO.
Since its implementation in March 2018, the Section 232 action has supported the U.S. steel industry's and U. S. Steel’s investmentsiron ore facilities in advanced steel capacity, technology, and skills, which strengthens our national and economic security. The Company continuesNorth America. We believe that supplies of iron ore adequate to actively defend the Section 232 action through allmeet USSE’s needs are available tools and strategies, including by highlighting these benefits and the importance of maintaining the Section 232 action.at competitive market prices.
In February 2019, the European Commission (EC) imposed a definitive tariff rate quota safeguard on certain steel imports: 25 percent tariffs on certain steel imports that exceed quotas effective through June 2021.
Antidumping (AD) and countervailing (CVD or antisubsidy) duties apply in addition to the Section 232 tariffs and quotas and the EC’s safeguard, and AD/CVD orders will last beyond the Section 232 action and EC’s safeguard. Thus, U. S. Steel continues to actively defend and maintain the 54 U.S. AD/CVD orders and 11 EU AD/CVD orders covering products U. S. Steel produces in multiple proceedings before the DOC, U.S. International Trade Commission (ITC), CIT, CAFC, the EC and European courts, and the WTO.Coking Coal

In July 2019, the ITC voted to continue the 2001 AD/CVD orders on hot-rolled steel from China, India, Indonesia, Taiwan, Thailand, and Ukraine for another five years in the third sunset review of those orders. In August 2019, DOC self-initiated circumvention investigations of imports of corrosion-resistant steel from Costa Rica, Guatemala, Malaysia, South Africa, and the United Arab Emirates made from Chinese or Taiwanese substrate. In December 2019, DOC announced final affirmative circumvention determinations on cold-rolled and corrosion-resistant imports from Vietnam made from Korean and/or Taiwanese substrate, resulting in AD/CVD rates of 3.7 to 456 percent on such imports.

Following the 2018 investigation under Section 301 of the Trade Act of 1974, the United States began imposing a 15 to 25 percent tariff on certain imports from China, including certain steel products. Following the U.S.-China “Phase

One” Trade Agreement, effective February 14, 2020, the 15 percent tariffs will decline to 7.5 percent and the 25 percent tariffs will remain pending the negotiation of Phase Two.

In October 2019, China blocked the continuation of the Global Forum on Steel Excess Capacity at the G-20. Over thirty other countries including the United States, however, have committed to continue the Global Forum’s work to reduce global steel overcapacity. The Organization for Economic Co-operation and Development Steel Committee and trilateral negotiations between the United States, EU, and Japan also continue to address global overcapacity.

U. S. Steel will continue to execute a broad, global strategy to maximize opportunities and navigate challenges presented by imports, global steel overcapacity, and international trade law and policy developments.

Facilities and Locations as of December 31, 2019


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Flat-Rolled

The operating results of all facilities within U. S. Steel’s integrated steel plants in the U.S. are included in Flat-Rolled. These facilities include Gary Works, Great Lakes Works, Mon Valley Works and Granite City Works. The operating resultsAll of U. S. Steel’s cokecoal requirements for our cokemaking facilities are purchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, and iron ore pellet operations and many equity investees in North America are also included in Flat-Rolled.

Gary Works, located in Gary, Indiana, has annual raw steel production capability of 7.5 million tons. Gary Works has four blast furnaces, six steelmaking vessels, a vacuum degassing unit and four slab casters. Finishing facilities include a hot strip mill, two pickling lines, two cold reduction mills, three temper mills, a double cold reduction line, four annealing facilities and two tin coating lines. Principal products include hot-rolled, cold-rolled and coated sheets and tin mill products. Gary Works also produces strip mill plate in coil. In June 2019, one of the blast furnaces at Gary Works was temporarily idled. We restarted the idled blast furnace in December 2019.

The Midwest Plant, located in Portage, Indiana, processes hot-rolled and cold-rolled bands and produces tin mill products, hot dip galvanized, cold-rolled and electrical lamination sheets. Midwest facilities include a pickling line, two cold reduction mills, two temper mills, a double cold reduction mill, two annealing facilities, two hot dip galvanizing lines, a tin coating line and a tin-free steel line.

East Chicago Tin is located in East Chicago, Indiana and produces tin mill products. Facilities include a pickling line, a cold reduction mill, two annealing facilities, a temper mill, a tin coating line and a tin-free steel line. In the fourth quarter of 2019, East Chicago Tin was indefinitely idled.

Great Lakes Works, located in Ecorse and River Rouge, Michigan, has annual raw steel production capability of 3.8 million tons. Great Lakes facilities include three blast furnaces, two steelmaking vessels, a vacuum degassing unit, two slab casters, a hot strip mill, a pickling line, a tandem cold reduction mill, three annealing facilities, a temper mill, a recoil and inspection line, two electrolytic galvanizing lines (one being the former Double Eagle Steel Coating Company's (DESCO) line) and a hot dip galvanizing line. Principal products include hot-rolled, cold-rolled and coated sheets. In June 2019, a blast furnace at Great Lakes Works was idled and in the fourth quarter of 2019, the former DESCO line was indefinitely idled. The other electrolytic galvanizing line had previously been idled. In December of 2019, U. S. Steel announced that it would indefinitely idle a significant portion of Great Lakes Works. The company expects to begin idling the iron and steelmaking facilities on or around April 1, 2020, and the Hot Strip Mill rolling facility before the end of 2020.

Mon Valley Works consists of the Edgar Thomson Plant, located in Braddock, Pennsylvania; the Irvin Plant, located in West Mifflin, Pennsylvania; the Fairless Plant, located in Fairless Hills, Pennsylvania; and the Clairton Plant, located in Clairton, Pennsylvania. Mon Valley Works has annual raw steel production capability of 2.9 million tons. Facilities at the Edgar Thomson Plant include two blast furnaces, two steelmaking vessels, a vacuum degassing unit and a slab caster. Irvin Plant facilities include a hot strip mill, two pickling lines, a cold reduction mill, three annealing facilities, a temper mill and two hot dip galvanizing lines. The Fairless Plant operates a hot dip galvanizing line. Principal products from Mon Valley Works include hot-rolled, cold-rolled and coated sheets, as well as coke and coke by-products produced at the Clairton Plant.

The Clairton Plant is comprised of ten coke batteries with an annual coke production capacity of 4.3 million tons. Almost all of the coke we produce is consumed by U. S. Steel facilities. From time to time we may swap coke with other domestic steel producershave entered into multi-year agreements for a portion of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or sell ondetermined as index-based prices.
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We believe that supplies of coking coal adequate to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the open market. Coke by-products are sold toUnited States, and sources for USSE include Poland, Ukraine, Canada, Australia and the chemicals and raw materials industries.United States.

Coke
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In North America, the Flat-Rolled segment operates a cokemaking facility at the Clairton Plant of Mon Valley Works. At our Granite City Works, located in Granite City, Illinois, has annual raw steel production capability of 2.8 million tons. Granite City’s facilities includes two blast furnaces, two steelmaking vessels, two slab casters, a hot strip mill, a pickling line, a tandem cold reduction mill, a hot dip galvanizing line and a hot dip galvanizing/Galvalume® line. Principal products include hot-rolled and coated sheets. Gateway Energy and Coke Company LLC (Gateway) constructed a coke plant to supply Granite City Works with coke underwe have a 15-year coke supply agreement with Gateway that expires on December 31, 2024. Blast furnace injection of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. Coke from time to time has been purchased from, sold to, or swapped with suppliers and other end-users to adjust for production needs and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polish and Czech coke producers to meet production needs. Volume and price are negotiated quarterly.
Steel Scrap and Other Materials

We believe that supplies of steel scrap and alloys that are adequate to meet our needs are readily available from outside sources at competitive market prices for the Flat-Rolled, Mini Mill and USSE segments. Generally, approximately 38 percent of our steel scrap requirements were internally generated through normal operations for these segments.
Limestone

All of Flat-Rolled’s limestone requirements and USSE's lime and limestone requirements are purchased from outside sources. We believe that supplies of limestone and lime adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin
We believe that supplies of zinc and tin required to fulfill the requirements for Flat-Rolled, Mini Mill and USSE are available from outside sources at competitive market prices. For Flat-Rolled and Mini Mill the main sources of zinc are Canada, Mexico and the United States and the main sources of tin are Bolivia, Brazil and Peru. For USSE, the main sources of zinc are Finland, Poland, the Netherlands, Germany and Slovakia and the main sources of tin are Peru, Indonesia, China and Bolivia.
During 2022, Flat-Rolled protected approximately 40 percent and 75 percent of its operation's zinc and tin purchases, respectively, with financial swap derivatives to manage exposure to zinc and tin price fluctuations. During 2022, USSE protected approximately 16 percent of its operation's zinc purchases with forward physical contracts to manage our exposure to zinc price fluctuations and protected approximately 68 percent of its operation's tin purchases with financial swaps to manage our exposure to tin price fluctuations. For further information, see Note 16 to the Consolidated Financial Statements.
Natural Gas

All of U. S. Steel ownsSteel’s natural gas requirements are purchased from outside sources.

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We believe that adequate supplies to meet Flat-Rolled’s, Mini Mill's and operatesTubular's needs are available at competitive market prices. For 2022, approximately 70 percent of our natural gas purchases in Flat-Rolled were based on bids solicited on a cogeneration facilitymonthly basis from various vendors; the remainder were made daily or with term agreements.

We believe that utilizes by-productsadequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2022, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2022, approximately 48 percent of our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly or monthly basis.

Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE uses self-generated coke oven, converter and blast furnace gas to reduce consumption of natural gas and steam coal that results in lower CO2 emissions production.

Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and access to additional supply from countries including Norway, the Gateway coke plantU.S. and Africa. Together, these sources are enough to generate heat and power.support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our USSE segment operations.


Industrial Gases
Fairfield Works, located in Fairfield, Alabama, consists of the #5 coating line.


U. S. Steel purchases industrial gas in the U.S. under long-term contracts with various suppliers. USSE owns a Research and Technology Center located in Munhall, Pennsylvania, (near Pittsburgh) where we carry out a wide range of applied research, development and technical support functions.operates its own industrial gas facility, but also may purchase industrial gases from time to time from third parties.

U. S. Steel also owns an automotive technical center in Troy, Michigan. This facility brings automotive sales, service, distribution and logistics services, product technology and applications research into one location. Much of U.��S. Steel’s work in developing new grades of steel to meet the demands of automakers for high-strength, light-weight and formable materials is carried out at this location.

U. S. Steel has iron ore pellet operations located at Mt. Iron (Minntac) and Keewatin (Keetac), Minnesota, with annual iron ore pellet production capability of 22.4 million tons. During 2019, 2018 and 2017, these operations produced 20.2 million, 21.8 million and 21.1 million tons of iron ore pellets, respectively.

Joint Ventures Within Flat-Rolled

U. S. Steel participates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below. For information regarding joint ventures and other investments, see Note 12 to the Consolidated Financial Statements.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.

U. S.
Mini Mill
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The operations of Big River Steel has a 14.7 percent ownership interestare included in Hibbing Taconite Company (Hibbing), which is based in Hibbing, Minnesota. Hibbing’s rated annual production capability is 9.0 million tons of iron ore pellets, of which our share is about 1.3 million tons.

U. S.Mini Mill. Big River Steel, and POSCO of South Korea participate in a 50-50 joint venture, USS-POSCO Industries (UPI), located in Pittsburg, California. The joint venture marketsOsceola, Arkansas, is an EAF sheet and tin mill products, principally in the western United States. UPI produces hot rolled pickled and oiled, cold-rolled sheets, galvanized sheets and tin mill products from hot bands principally provided by U. S. Steel. UPI’s annualsteel production capability is approximately 1.5 million tons. On January 23, 2020, U. S. Steel and POSCO-California Corporation, a subsidiary of POSCO (POSCAL), entered into an agreement under which U. S. Steel will acquire POSCAL’s 50% ownership interest in UPI. The closing of the transaction is expected to occur sometime during the first quarter of 2020, subject to customary closing terms and conditions. 

U. S. Steel and Kobe Steel, Ltd. of Japan participate in a 50-50 joint venture, PRO-TEC Coating Company (PRO-TEC). PRO-TEC owns and operates two hot dip galvanizing lines and a continuous annealing line (CAL) in Leipsic, Ohio, which primarily serve the automotive industry. PRO-TEC’s annual production capability is approximately 1.5 million tons. U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products. The CAL produces high-strength, lightweight steels that are an integral component in automotive manufacturing as vehicle emission and safety requirements become increasingly stringent. On September 25, 2017, U. S. Steel and Kobe Steel, Ltd. announced their agreement to begin construction of a new continuous galvanizing line (CGL) at PRO-TEC, in response to increased demand for advanced high-strength steels (AHSS). The new CGL is being financed by the joint venture and will have a yearly capacity of 500,000 tons. This line, which will utilize a proprietary process, will be capable of coating steel that will help automakers manufacture economically lightweight vehicles to meet increasing fuel efficiency requirements while maintaining exceptionally high safety standards. Construction began in the fourth quarter of 2017, commissioning started in 2019, and first commercial coils are expected in early 2020.

facility.
U. S. Steel and ArcelorMittal participate in the Double G Coatings Company, L.P. a 50-50 joint venture (Double G), which operates a hot dip galvanizing and Galvalume® facility located near Jackson, Mississippi, and primarily serves the construction industry. Double G processes steel supplied by each partner and each partner markets the steel it has processed by Double G. Double G’s annual production capability is approximately 315,000 tons.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels
U. S. Steel and Worthington Industries, Inc. participate in Worthington Specialty Processing (Worthington), a joint venture with locations in Jackson, Canton, and Taylor, Michigan, in which U. S. Steel has a 49 percent interest. Worthington slits, cuts to length, and presses blanks from steel coils to desired specifications. Worthington’s annual production capability is approximately 890,000 tons.

Chrome Deposit Corporation (CDC), a 50-50 joint venture between U. S. Steel and Court Holdings, reconditions finishing work rolls, which require grinding, chrome plating and/or texturing. The rolls are used on rolling mills to provide superior finishes on steel sheets. CDC has seven locations across the United States, with all locations near major steel plants.


U. S. Steel holds a 49 percent interest in Feralloy Processing Company (FPC), a joint venture between U. S. Steel and Feralloy Corporation, which converts coiled hot strip mill plate into sheared and flattened plates. The plant, located in Portage, Indiana, has annual production capability of approximately 275,000 tons.

USSE

USSE operates an integrated facility in Košice, Slovakia which has annual raw steel production capability of 5.0 million tons. Thisan integrated facility has two coke batteries, four sintering strands, three blast furnaces, four steelmaking vessels, a vacuum degassing unit, two dual strand casters, a hot strip mill, two pickling lines, two cold reduction mills, four annealing facilities, a temper mill, a temper/double cold reduction mill, three hot dip galvanizing lines, two tin coating lines, a dynamo line, a color coating line and two spiral welded pipe mills. USSE also has multiple slitting, cutting and other finishing lines for flat products. Principal products include hot-rolled, cold-rolled and coated sheets, tin mill products and spiral welded pipe. USSE also has facilities for manufacturing refractory ceramic materials and has a power plant for internal steam and electricity generation. In June 2019, one of the blast furnaces at USSE was temporarily idled and currently remains idled.

In addition, USSE has a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation, and ecology.instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.
Seamless products are produced at Fairfield Tubular Operations in Fairfield, Alabama, and Lorain Tubular Operations located in Lorain, Ohio. The Fairfield Tubular Operations has annual production capability of 750,000 tons and has historically been supplied with steel rounds from Flat-Rolled’s former Fairfield Works. Subsequent to the shutdown of the hot end at the Fairfield Works in August 2015, the facility is currently purchasing rounds from third parties. The Fairfield Tubular Operations has the capability to produce outer diameter (O.D.) sizes from 4.5 to 9.875 inches and has quench and temper, hydrotester, threading and coupling and inspection capabilities. On February 11, 2019, U. S. Steel announced plans to restart the delayed electric arc furnace (EAF) capital project located in Fairfield, Alabama. The new EAF will have an annual capacity of approximately 1.6 million tons. The EAF is expected to commence startup in the second half of 2020. The slab and rounds casters of the former Fairfield Works remain capable of operation and are now part of the Fairfield Tubular Operations. The Lorain plant consists of the #3 facility and has historically consumed steel rounds supplied by Fairfield Works and external sources. Subsequent to the shutdown of the hot end at the Fairfield Works, the Company is sourcing rounds from third parties. Lorain #3 facility has the capability to produce 380,000 tons annually in O.D. sizes from 10.125 to 26 inches and has quench and temper, hydrotester, cutoff and inspection capabilities. In March 2017, U. S. Steel made the strategic decision to permanently shutdown the Lorain No. 6 Quench & Temper Mill.
Welded products are produced at Lone Star Tubular Operations #2 facility in Lone Star, Texas, and it has the capability to produce O.D. sizes from 1.088 to 7.15 inches. The Lone Star #2 facility has annual production capability of 390,000 tons. In June 2019, U. S. Steel restarted the #1 Electric-Weld Pipe mill at Lone Star Tubular Operations that had been idle since 2016. The #1 mill has annual production capability of 400,000 tons. Lone Star Tubular Operations also has quench and temper, hydrotester, threading and coupling and inspection capabilities.

Wheeling Machine Products manufactures couplings used to connect individual sections of oilfield casing and tubing. It produces sizes ranging from 2.375 to 20 inches at two locations: Pine Bluff, Arkansas, and Hughes Springs, Texas.

Tubular Processing, located in Houston, Texas, provides quench and temper and end-finishing services for oilfield production tubing. Offshore Operations, also located in Houston, Texas, provides threading and coupling, inspection, accessories and storage services to the OCTG market. Tubular Processing has been temporarily idled since 2015.

We have a Research and Development Laboratory and Test Facility in Houston, Texas where our engineers develop and test new steel products, including premium connections.

Joint Ventures Within Tubular

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
U. S. Steel and Butch Gilliam Enterprises LLC participate in a 50-50 joint venture, Patriot Premium Threading Services, LLC located in Midland, Texas, which provides oil country threading, accessory threading, repair services and rig site services to exploration and production companies located principally in the Permian Basin.

Other
Other Businesses

U. S. Steel’s Other Businesses includecategory includes the operating results relating to our 49.9% ownership interestreal estate operations, the previously held equity method investment in Big River Steel, and our former railroad services and real estate operations.

U. S. Steelbusiness. The Company owns 49.9%approximately 45,000 acres of Big River Steel, located in Osceola, Arkansas, which has annual raw steel capacity of approximately 1.65 million tons. Big River Steel has an EAF, a Ruhrstahl Heraeus degasser and slab caster. Finishing facilities include a hot strip mill, a pickle line, a cold reduction mill and a galvanizing line. Principle products include hot-rolled, cold-rolled, coated sheets and electrical. For information regarding joint ventures and other investments, see Note 12 to the Consolidated Financial Statements.

U. S. Steel owns the following railroads through its transportation subsidiary, Transtar: Gary Railway Company in Indiana, Lake Terminal Railroad Company and Lorain Northern Company in Ohio, Union Railroad Company, LLC in Pennsylvania, Fairfield Southern Company, Inc. in Alabama, Delray Connecting Railroad Company in Michigan and Texas & Northern Railway Company in Texas.

U. S. Steel owns, develops and manages various real estate assets, which include approximately 50,000 acres of surface rights primarilyeither held for development or managed, in Alabama, Illinois, Michigan, Minnesota Pennsylvania and Illinois. In addition, U. S. Steel holds ownership interests in a joint venture that is developing real estate projects in Alabama.Pennsylvania.

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Raw Materials and EnergyCommercial Sales of Product

As an integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices which are subject to fluctuations based on market conditions at the time.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, U. S. Steel consumescharacterizes sales as contract sales if sold pursuant to an agreement with a defined volume and pricing and a duration of longer than three months, and as spot if sold without a defined volume and pricing agreement, typically three months or less. In 2022, approximately 1.4 tons76 percent, 61 percent, 48 percent and 78 percent of coal to produce one ton of cokesales by Flat-Rolled, Mini Mill, USSE and then it consumes approximately 0.3 tons of coke, 0.3 tonsTubular, respectively, were contract sales. Some contract pricing agreements include fixed prices while others are adjusted periodically based upon published prices of steel scrap (54 percentproducts or cost components.
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Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the top talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best for All strategy. We refer to this strategic talent pillar as “Moving Up the Talent Curve.”

Our focus on people extends to our current and future employees. We aim to have an engaged and diverse workforce to promote new ideas and innovation, reflect the communities where we operate, and deliver exceptional customer service. We seek to build an inclusive environment where people feel free to bring their professional selves to work. To achieve the Best for All strategy, we must have the “Best from All.”

Active Employees as of December 31, 2022
North America14,487 
Slovakia8,253 
Total22,740

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and Respect; Environmental Stewardship; Excellence and Accountability; and Lawful and Ethical Conduct. We expect our employees and members of our board of directors to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that employees understand the Company’s expectations and all applicable rules, we provide annual formal ethics and compliance training to our employees and have frequent communications with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully and ethically that include reminders of the company’s expectations for all employees. In addition, through our annual policy certification process, employees of USSK, non-represented employees in the United States, and members of our board of directors certify their ongoing compliance with our Code of Ethical Business Conduct.

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of every person who works in our facilities. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents. In addition, the psychological safety of all employees is important to us. We have combined physical safety and psychological safety into the construct of 360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our success as the tools and technologies we rely on to do business.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes. One of our most important safety protocols is our fatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA Days Away From Work (DAFW). This measurement allows us to evaluate the frequency of injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.
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For 2022, we had a corporate DAFW rate of 0.05, which is internally generated)18 times better than the U.S. Bureau of Labor Statistics' Iron and 1.3 tonsSteel benchmark DAFW rate of iron ore pellets0.90.

Diversity, Equity, & Inclusion

Attracting, developing, and retaining a workforce of talented, diverse people is essential to produce one tonhaving high-performing teams that drive results for our Company’s stakeholders. As part of raw steel. At normal operating levels,our commitment to cultivating a culture of caring, we have inclusive benefits available for our U.S. non-represented workforce, including expanded parental leave, back-up dependent care, infertility coverage, gender reassignment coverage and healthcare continuation for the families of employees who suffered work-related or military service fatalities. We also consume approximately 6 mmbtu’ssupport several employee resource groups (ERGs) to enhance employee engagement, promote a culture of natural gas per ton produced. While we believe that these estimated consumption amounts are useful for planning purposes,belonging, foster diversity in the workplace, and are presented to give a general sense of raw material and energy consumptionraise awareness related to steel production, substantial variations may occur.


Iron Oreissues of identity and intersectionality. Our ERGs also provide training and education, mentorship and networking opportunities for their members.
Iron Ore Production(a)
chart-2fe1940850005fa1ac5.jpgTalent Attraction, Development and Retention
(a) Includes our share of production from Hibbing through December 31, 2019 and Tilden to September 29, 2017. U. S. Steel's ownership interest in Tilden was sold on September 29, 2017. The increase in iron ore production in 2017 is primarily related to the restarted production at our Keetac facility which was idled in 2014.

The iron ore facilities at Minntac and Keetac contain an estimated 782 million short tons of recoverable reserves and our share of recoverable reserves at the Hibbing joint venture is 5 million short tons. Recoverable reserves are defined as the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Minntac and Keetac’s annual capability and our share of annual capability for the Hibbing joint venture total approximately 24 million tons. Through our wholly owned operations and our share of our joint venture, we have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We sold iron ore pellets in 2019, 2018 and 2017 to third parties. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are purchased from outside sources, primarily Russian and Ukrainian mining companies. Prices are determined in long-term contracts with strategic suppliers or as spot prices negotiated monthly or quarterly. In certain prior years, USSE also received iron ore from U. S. Steel’s iron ore facilities in North America. We believe that suppliesattraction, development and retention of iron ore adequatetalent is essential to our success, especially in today’s competitive labor market. We offer internship programs, partner with universities, community colleges and technical schools, and collaborate with community employment centers and economic development nonprofit organizations to build strong and diverse internal and external sources of potential employees and opportunities for our existing employee's growth and development.

Once at U. S. Steel, we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and above have a formal professional development plan that is assessed at least annually. In addition, we proactively monitor our attrition rates and take targeted actions to ensure our highest potential and performing employees are motivated to remain with the Company. Over the past five years, our regrettable voluntary turnover rate has been at or below 5 percent.

We offer a competitive total rewards package of compensation and benefits that we regularly evaluate and benchmark across the manufacturing industry to ensure that we position U. S. Steel as an employer of choice.

At the onset of the pandemic in early 2020, we quickly transitioned our corporate and administrative employees, approximately 10% of our workforce, to a work-from-home environment. We’ve invested in technology to maintain this virtual community and found that our employees are more productive and have more flexibility and autonomy in managing their workload in a way that best fits their situation. We plan to maintain a virtual / hybrid working option for these employees in order to promote workplace flexibility and attract and retain highly qualified employees across the country.

Labor Relations

Approximately 80% of our employees in North America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet USSE’sthe needs are available at competitive market prices.of our customers. Our relationship with the United Steelworkers (USW) includes not only a

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Coking Coalcommitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company and ultimately the jobs of our employees.

AllCertain hourly employees of U. S. Steel’s coalflat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW entered into effective September 1, 2022, (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements include a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. The 2022 Labor Agreements also provide for certain increases to pension and retirement benefits, including increases in our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the Steelworkers Pension Trust from $3.50 to $4.00 per hour, effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. The OPEB plans were modified to allow the Company to utilize a certain amount of surplus assets to pay additional legally permissible benefits previously paid by the Company. The arrangement permits the Company to utilize a target of $75 million annually for active and retiree employee benefits, with an annual minimum of $50 million, beginning in 2023 and continuing through December 31, 2026. For additional information, see Note 18 to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.

Capital Structure, Liquidity and Capital Allocation

Our Best for All strategy's primary financial goal is to enhance stockholder value by utilizing our capital structure, liquidity and enhanced capital allocation priorities to advance the Company's strategic objectives, generate long-term value and reward stockholders. Our cash deployment strategy is aligned with our corporate strategy and includes: executing on strategic projects and portfolio moves; maintaining a strong balance sheet and a healthy pension plan; and delivering sustainable growth with a focus on core values such as safety and environmental stewardship and rewarding stockholders for the continued progress we make. Cash deployment is also performed with a customer-centric focus on improving safety, our environment, quality, delivery and cost.

Our liquidity supports our ability to satisfy short-term obligations, fund working capital requirements forand provides a foundation to execute key strategic priorities. We are focused on maintaining a strong balance sheet and may proactively refinance or repay our cokemaking facilities are purchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, anddebt from time to time we haveto protect our capital structure from unforeseen external events and re-financing risks.
On May 27, 2022, U. S. Steel entered into multi-year agreements for a portionthe Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). The Credit Facility Agreement has substantially the same terms as the Fifth Credit Facility Agreement, except the Credit Facility Agreement references the Secured Overnight Financing Rate instead of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or determined as index-based prices.
We believe that supplies of coking coal adequatethe London Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the United States, and sources for USSE include Poland, the Czech Republic, Russia, Ukraine, Canada, MozambiqueMay 27, 2027, and the United States.

Cokefinancial impact from replacing the Fifth Credit Facility Agreement was immaterial. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility remained the same at $1,750 million. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.
Coke Production(a)
chart-37efb7ab07485cbfaf6.jpgOn September 6, 2022, U. S. Steel closed on an offering of $290 million aggregate principal amount of 5.450% Environmental Improvement Revenue Bonds due 2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.
(a)
The decrease in 2016 coke production from 2015 was due to decreased internal steel production and depletion of existing coke inventory.

In North America,2022, we repurchased approximately $365 million in debt, and we ended the Flat-Rolled segment operatesyear with $5.9 billion of total liquidity.

On July 25, 2022, following the completion of previously authorized $800 million share repurchase programs, the Board of Directors authorized a cokemaking facility atnew share repurchase program for the Clairton Plantrepurchase of Mon Valley Works. At our Granite City Works, we also have a 15-year coke supply agreement with Gateway that expires on December 31, 2024. Blast furnace injectionup to $500 million of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. CokeCompany's outstanding common stock from time to time has been purchased from, soldin the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to or swapped with suppliersacquire any specific number of shares.

U. S. Steel repurchased 37.6 million shares of common stock for approximately $849 million under these programs during the year ended December 31, 2022, and other end-users to adjustthere is approximately $301 million remaining under the current stock repurchase authorization. In addition, the Board of Directors declared quarterly dividends of five cents per common share for each of the quarters in 2022.

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Facilities and Locations as of December 31, 2022

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13

Flat-Rolled

The operating results of all U. S. Steel's domestic-integrated steel and sheet plants, coke and iron ore operations and ore and sheet production needsjoint ventures are included in Flat-Rolled. Also, included within Flat-Rolled is a research and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polishtechnology center located in Munhall, Pennsylvania (near Pittsburgh) and Czech coke producers to meet production needs. Volumea technology center in Troy, Michigan. The research and price are negotiated quarterly.
Steel Scraptechnology center carries out a wide range of applied research, development and Other Materials

We believe that supplies of steel scrap, alloystechnical support functions. The technology center brings automotive sales, service, distribution and coating materials adequate to meet our needs to support Flat-Rolledlogistics services, product technology and USSE are readily available from outside sources at competitive market prices. Generally, approximately 50 percent of our steel scrap requirements are internally generated through normal operations.
Limestone

All of Flat-Rolled’sapplications research into one location and USSE's limestone requirements are purchased from outside sources. We believe that supplies of limestone adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin

We believe that supplies of zinc and tin required to fulfill the requirements for Flat-Rolled and USSE are available from outside sources at competitive market prices. For Flat-Rolled, the main sources of zinc are Canada, Peru and Mexico and the main sources of tin are Bolivia and Peru. For USSE, the main sources of zinc are Sweden, the Slovak Republic, Germany and Poland and the main sources of tin are Bolivia and Indonesia.

During 2019, Flat-Rolled protected approximately 30% and 87% of its operation's zinc and tin purchases, respectively, with financial swap derivatives to manage exposure to zinc and tin price fluctuations. During 2019, USSE protected approximately 45% of its operation's zinc purchases with forward physical contracts to manage exposure to zinc price fluctuations. Also during 2019, USSE protected approximately 43% of its operation's tin purchases with forward physical contracts and 16% of its operation's tin purchases with financial swaps to manage our exposure to tin price fluctuations. For further information, see Note 16 to the Consolidated Financial Statements.


Natural Gas

Allmuch of U. S. Steel’s natural gas requirements are purchased from outside sources.

We believe that adequate supplieswork in developing new grades of steel to meet Flat-Rolled’sthe demands of automakers for high-strength, light-weight and Tubular's needs are availableformable materials is carried out at competitive market prices. For 2019, approximately 74 percent of our natural gas purchasesthis location.

Flat-Rolled Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Gary Works, (Gary, Indiana)(a)
7.5 million tons of raw steelstrip mill plate in coil; hot-rolled, cold-rolled and coated sheets; and tin mill products
Midwest, (Portage, Indiana)
finishing facilityhot-rolled, cold-rolled and coated sheets; and tin mill products
Great Lakes Works(b),
(Ecorse, River Rouge and Dearborn, Michigan)
finishing facilitycold-rolled and coated sheets
Mon Valley Works (c):
Edgar Thompson, (Braddock, Pennsylvania),
Irvin, (West Mifflin, Pennsylvania), Fairless, (Fairless Hills, Pennsylvania), and
Clairton, (Clairton, Pennsylvania)
2.9 million tons of raw steel and 4.3 million tons of cokehot-rolled, cold-rolled and coated sheets; and coke and coke by-products
Granite City Works (d), (Granite City, Illinois)
2.8 million tons of raw steelslabs and hot-rolled, cold-rolled and coated sheets
Granite City Works, (Granite City, Illinois);
Gateway Energy and Coke Company LLC (Gateway)
coke supply agreementnot applicable
USS-UPI, LLC (UPI)(e), (Pittsburg, California)
finishing facilitycold-rolled and coated sheets; tin mill products
Fairfield Works,(Fairfield, Alabama)
finishing facilitycoated sheets
Minnesota Ore Operations: Minntac, (Mt. Iron, Minnesota) and Keetac, (Keewatin, Minnesota)
22.4 million tons of iron ore pelletsiron ore pellets
(a) The majority of tin operations were indefinitely idled as of December 31, 2022.
(b) The steel and ironmaking production facilities were permanently idled in December of 2021 and June of 2022, respectively. Great Lakes Works' pickle line, cold mill and CGL continue to operate, while the DESCO and electrolytic galvanizing lines are indefinitely idled.
(c) From time to time, we may swap coke with other domestic steel producers or sell on the open market. Coke by-products are sold to the chemicals and raw materials industries.
(d) In March 2020, one of the blast furnaces at Granite City Works was indefinitely idled.
(e) In February 2020, UPI was added with the purchase of the remaining 50% ownership interest from POSCO.

Joint Ventures Within Flat-Rolled were based on bids solicited on a monthly basis from various vendors; the remainder were made daily or with term agreements.

We believe that adequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2019, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2019, approximately 52 percent of our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly, monthly or a daily basis from various vendors.

Both Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE also captures and consumes converter gas from its four steelmaking vessels.

Industrial Gases

U. S. Steel purchases industrial gasparticipates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the U.S. under long-term contractsequity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with various suppliers. our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to our real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company owns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and operates its own industrial gas facilities, but also may purchase industrial gases from time to time.Pennsylvania.

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Commercial Sales of Product

U. S. Steel characterizes sales as contract sales if sold pursuant to an agreement with a defined volume and pricing and a duration of longer than three months, and as spot if sold without a defined volume and pricing agreement.agreement, typically three months or less. In 2019,2022, approximately 7776 percent, 6361 percent, 48 percent and 3678 percent of sales by Flat-Rolled, Mini Mill, USSE and Tubular, respectively, were contract sales. Some contract pricing agreements include fixed prices while others are adjusted periodically based upon published prices of steel products or cost components.
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Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the top talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best for All strategy. We refer to this strategic talent pillar as “Moving Up the Talent Curve.”

Our focus on people extends to our current and future employees. We aim to have an engaged and diverse workforce to promote new ideas and innovation, reflect the communities where we operate, and deliver exceptional customer service. We seek to build an inclusive environment where people feel free to bring their professional selves to work. To achieve the Best for All strategy, we must have the “Best from All.”

Active Employees as of December 31, 2022
North America14,487 
Slovakia8,253 
Total22,740

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and Respect; Environmental Stewardship; Excellence and Accountability; and Lawful and Ethical Conduct. We expect our employees and members of our board of directors to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that employees understand the Company’s expectations and all applicable rules, we provide annual formal ethics and compliance training to our employees and have frequent communications with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully and ethically that include reminders of the company’s expectations for all employees. In addition, through our annual policy certification process, employees of USSK, non-represented employees in the United States, and members of our board of directors certify their ongoing compliance with our Code of Ethical Business Conduct.

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of every person who works in our facilities. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents. In addition, the psychological safety of all employees is important to us. We have combined physical safety and psychological safety into the construct of 360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our success as the tools and technologies we rely on to do business.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes. One of our most important safety protocols is our fatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA Days Away From Work (DAFW). This measurement allows us to evaluate the frequency of injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.
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For 2022, we had a corporate DAFW rate of 0.05, which is 18 times better than the U.S. Bureau of Labor Statistics' Iron and Steel benchmark DAFW rate of 0.90.

Diversity, Equity, & Inclusion

Attracting, developing, and retaining a workforce of talented, diverse people is essential to having high-performing teams that drive results for our Company’s stakeholders. As part of our commitment to cultivating a culture of caring, we have inclusive benefits available for our U.S. non-represented workforce, including expanded parental leave, back-up dependent care, infertility coverage, gender reassignment coverage and healthcare continuation for the families of employees who suffered work-related or military service fatalities. We also support several employee resource groups (ERGs) to enhance employee engagement, promote a culture of belonging, foster diversity in the workplace, and raise awareness related to issues of identity and intersectionality. Our ERGs also provide training and education, mentorship and networking opportunities for their members.

Talent Attraction, Development and Retention

We believe that attraction, development and retention of talent is essential to our success, especially in today’s competitive labor market. We offer internship programs, partner with universities, community colleges and technical schools, and collaborate with community employment centers and economic development nonprofit organizations to build strong and diverse internal and external sources of potential employees and opportunities for our existing employee's growth and development.

Once at U. S. Steel, we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and above have a formal professional development plan that is assessed at least annually. In addition, we proactively monitor our attrition rates and take targeted actions to ensure our highest potential and performing employees are motivated to remain with the Company. Over the past five years, our regrettable voluntary turnover rate has been at or below 5 percent.

We offer a competitive total rewards package of compensation and benefits that we regularly evaluate and benchmark across the manufacturing industry to ensure that we position U. S. Steel as an employer of choice.

At the onset of the pandemic in early 2020, we quickly transitioned our corporate and administrative employees, approximately 10% of our workforce, to a work-from-home environment. We’ve invested in technology to maintain this virtual community and found that our employees are more productive and have more flexibility and autonomy in managing their workload in a way that best fits their situation. We plan to maintain a virtual / hybrid working option for these employees in order to promote workplace flexibility and attract and retain highly qualified employees across the country.

Labor Relations

Approximately 80% of our employees in North America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet the needs of our customers. Our relationship with the United Steelworkers (USW) includes not only a
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commitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company and ultimately the jobs of our employees.

Certain hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW entered into effective September 1, 2022, (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements include a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. The 2022 Labor Agreements also provide for certain increases to pension and retirement benefits, including increases in our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the Steelworkers Pension Trust from $3.50 to $4.00 per hour, effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. The OPEB plans were modified to allow the Company to utilize a certain amount of surplus assets to pay additional legally permissible benefits previously paid by the Company. The arrangement permits the Company to utilize a target of $75 million annually for active and retiree employee benefits, with an annual minimum of $50 million, beginning in 2023 and continuing through December 31, 2026. For additional information, see Note 18 to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.

Capital Structure, Liquidity and Capital Allocation

Our Best for All strategy's primary financial goal is to enhance stockholder value by utilizing our capital structure, liquidity and enhanced capital allocation priorities to advance the Company's strategic objectives, generate long-term value and reward stockholders. Our cash deployment strategy is aligned with our corporate strategy and includes: executing on strategic projects and portfolio moves; maintaining a strong balance sheet and a healthy pension plan; and delivering sustainable growth with a focus on core values such as safety and environmental stewardship and rewarding stockholders for the continued progress we make. Cash deployment is also performed with a customer-centric focus on improving safety, our environment, quality, delivery and cost.

Our liquidity supports our ability to satisfy short-term obligations, fund working capital requirements and provides a foundation to execute key strategic priorities. We are focused on maintaining a strong balance sheet and may proactively refinance or repay our debt from time to time to protect our capital structure from unforeseen external events and re-financing risks.
On May 27, 2022, U. S. Steel entered into the Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). The Credit Facility Agreement has substantially the same terms as the Fifth Credit Facility Agreement, except the Credit Facility Agreement references the Secured Overnight Financing Rate instead of the London Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to May 27, 2027, and the financial impact from replacing the Fifth Credit Facility Agreement was immaterial. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility remained the same at $1,750 million. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

On September 6, 2022, U. S. Steel closed on an offering of $290 million aggregate principal amount of 5.450% Environmental Improvement Revenue Bonds due 2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.

In 2022, we repurchased approximately $365 million in debt, and we ended the year with $5.9 billion of total liquidity.

On July 25, 2022, following the completion of previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program for the repurchase of up to $500 million of the Company's outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.

U. S. Steel repurchased 37.6 million shares of common stock for approximately $849 million under these programs during the year ended December 31, 2022, and there is approximately $301 million remaining under the current stock repurchase authorization. In addition, the Board of Directors declared quarterly dividends of five cents per common share for each of the quarters in 2022.

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Facilities and Locations as of December 31, 2022

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Flat-Rolled

The operating results of all U. S. Steel's domestic-integrated steel and sheet plants, coke and iron ore operations and ore and sheet production joint ventures are included in Flat-Rolled. Also, included within Flat-Rolled is a research and technology center located in Munhall, Pennsylvania (near Pittsburgh) and a technology center in Troy, Michigan. The research and technology center carries out a wide range of applied research, development and technical support functions. The technology center brings automotive sales, service, distribution and logistics services, product technology and applications research into one location and much of U. S. Steel’s work in developing new grades of steel to meet the demands of automakers for high-strength, light-weight and formable materials is carried out at this location.

Flat-Rolled Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Gary Works, (Gary, Indiana)(a)
7.5 million tons of raw steelstrip mill plate in coil; hot-rolled, cold-rolled and coated sheets; and tin mill products
Midwest, (Portage, Indiana)
finishing facilityhot-rolled, cold-rolled and coated sheets; and tin mill products
Great Lakes Works(b),
(Ecorse, River Rouge and Dearborn, Michigan)
finishing facilitycold-rolled and coated sheets
Mon Valley Works (c):
Edgar Thompson, (Braddock, Pennsylvania),
Irvin, (West Mifflin, Pennsylvania), Fairless, (Fairless Hills, Pennsylvania), and
Clairton, (Clairton, Pennsylvania)
2.9 million tons of raw steel and 4.3 million tons of cokehot-rolled, cold-rolled and coated sheets; and coke and coke by-products
Granite City Works (d), (Granite City, Illinois)
2.8 million tons of raw steelslabs and hot-rolled, cold-rolled and coated sheets
Granite City Works, (Granite City, Illinois);
Gateway Energy and Coke Company LLC (Gateway)
coke supply agreementnot applicable
USS-UPI, LLC (UPI)(e), (Pittsburg, California)
finishing facilitycold-rolled and coated sheets; tin mill products
Fairfield Works,(Fairfield, Alabama)
finishing facilitycoated sheets
Minnesota Ore Operations: Minntac, (Mt. Iron, Minnesota) and Keetac, (Keewatin, Minnesota)
22.4 million tons of iron ore pelletsiron ore pellets
(a) The majority of tin operations were indefinitely idled as of December 31, 2022.
(b) The steel and ironmaking production facilities were permanently idled in December of 2021 and June of 2022, respectively. Great Lakes Works' pickle line, cold mill and CGL continue to operate, while the DESCO and electrolytic galvanizing lines are indefinitely idled.
(c) From time to time, we may swap coke with other domestic steel producers or sell on the open market. Coke by-products are sold to the chemicals and raw materials industries.
(d) In March 2020, one of the blast furnaces at Granite City Works was indefinitely idled.
(e) In February 2020, UPI was added with the purchase of the remaining 50% ownership interest from POSCO.

Joint Ventures Within Flat-Rolled

U. S. Steel participates in a number of joint ventures that are included in Flat-Rolled, most of which are conducted through subsidiaries. All of these joint ventures are accounted for under the equity method. The significant joint ventures and other investments are described below.
Joint Ventures (a) Within Flat-Rolled Table
Joint Venture, (Property Location)U. S. Steel's Ownership PercentageAnnual Production Capability
Hibbing Taconite Company (Hibbing); (Hibbing, Minnesota)
14.7%9 million tons of which U. S. Steel's share is 1.3 million tons
PRO-TEC Coating Company (PRO-TEC), (Leipsic, Ohio)
50.0%
2.0 million tons (b)
Double G Coatings Company (Double G) (c); Jackson, Mississippi
50.0%315 thousand tons
Worthington Specialty Processing (Worthington) (d)
49.0%not applicable
Chrome Deposit Corporation (CDC), (six locations near major steel plants)
50.0%not applicable
(a) See further information about our equity investees in Note 12 to the Consolidated Financial Statements.
(b) U. S. Steel's domestic production facilities supply PRO-TEC with cold-rolled sheets and U. S. Steel markets all of PRO-TEC's products.
(c) Each partner supplies its own steel to Double G and markets what is processed by Double G.
(d) In 2022, Worthington Specialty Processing sold its remaining manufacturing facilities. The joint venture is expected to be dissolved in 2023.


Mini Mill
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The operations of Big River Steel are included in Mini Mill. Big River Steel, located in Osceola, Arkansas, is an EAF sheet steel production facility.

Mini Mill Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
Big River Steel, (Osceola, Arkansas)
3.3 million tons of raw steelhot-rolled, cold-rolled and coated sheets; and electrical steels

USSE

USSE operates in Košice, Slovakia an integrated facility and a research laboratory, which, in conjunction with our Research and Technology Center, supports efforts in coke making, electrical steels, and design and instrumentation.

USSE Operations Table
Operations, (Property Location)Annual Production CapabilityPrincipal Products and/or Services
U. S. Steel Košice, (Košice, Slovakia)
5.0 million tons of raw steelcoke; slabs; strip mill plate: hot, cold and coated sheets; tin mill products; and spiral welded pipe

Tubular

Tubular manufactures seamless and welded OCTG, standard pipe, line pipe and mechanical tubing.

Tubular Operations Table
Operations, (Property Location)Production CapabilityPrincipal Products and Services
Fairfield Tubular Operations, (Fairfield, Alabama)
0.9 million tons of raw steel (a) and 750 thousand tons of tubular
seamless tubular pipe
Lorain Tubular Operations (b), (Lorain, Ohio)
380 thousand tons of tubularseamless tubular pipe
Lone Star Tubular(b), (Lone Star, Texas)
#1 electric-weld pipe mill (EWPM) 400 thousand tons and #2 EWPM 380 thousand tons of tubularwelded tubular pipe
Wheeling Machine Products(c), (Pine Bluff, Arkansas and Hughes Springs, Texas)
not applicabletubular couplings
Offshore Operations, (Houston, Texas)
not applicabletubular threading, inspection, accessories and storage services and premium connections
Tubular Processing (d), (Houston, Texas)
not applicabletubular processing
(a) Based on the rounds caster capacity which is its constraining production unit.
(b) In April 2020, the Lorain Tubular and Lone Star Tubular operations were temporarily idled for an indefinite period of time.
(c) In April 2020, the Wheeling Machine Products at Hughes Springs, Texas was temporarily idled for an indefinite period of time.
(d) Tubular Processing has been temporarily idled since 2015.

Joint Ventures (a) Within Tubular Table
Operations, (Property Location)U. S. Steel's Ownership PercentageProduction CapabilityPrincipal Products and/or Services
Patriot Premium Threading Services, (Midland, Texas)
50%not applicableTubular threading, accessories and premium connections
(a)See further information about our equity investees in Note 12 to the Consolidated Financial Statements.

Other

U. S. Steel’s Other category includes the operating results relating to our real estate operations, the previously held equity method investment in Big River Steel, and our former railroad business. The Company owns approximately 45,000 acres of real estate assets, either held for development or managed, in Alabama, Illinois, Michigan, Minnesota and Pennsylvania.

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Raw Materials and Energy

As a predominantly integrated producer, U. S. Steel’s primary raw materials are iron units in the form of iron ore pellets and sinter ore, carbon units in the form of coal and coke (which is produced from coking coal) and steel scrap. For our EAF production, our primary raw material is scrap. U. S. Steel’s raw materials supply strategy consists of acquiring and expanding captive sources of certain primary raw materials and entering into flexible supply contracts for certain other raw materials at competitive market prices that are subject to fluctuations based on market conditions at the time.

The amounts of such raw materials needed to produce a ton of steel will fluctuate based upon the specifications of the final steel products, the quality of raw materials and, to a lesser extent, differences among steel producing equipment. In broad terms, the Company's integrated steel process consumes approximately 1.4 tons of coal to produce one ton of coke and then it consumes approximately 0.3 tons of coke, 0.3 tons of steel scrap (approximately 60 percent of which is internally generated) and 1.3 tons of iron ore pellets to produce one ton of raw steel. In addition, we consume approximately 10 mmbtu’s of natural gas per ton produced. Generally, the Company's mini mill operations consumes approximately 0.8 tons of steel scrap, 0.3 tons of pig iron, and 0.1 tons of HBI to produce one ton of raw steel. In addition, the mini mill operations consume approximately 0.6 MKWH of electricity per ton of raw steel produced. While we believe that these estimated consumption amounts are useful for planning purposes, and are presented to give a general sense of raw material and energy consumption related to steel production, substantial variations may occur.

Iron Ore
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(a) Includes our share of production from Hibbing through December 31, 2022.

The iron ore facilities at Minntac and Keetac contain approximately 900 million short tons of indicated resources and probable reserves and our share of recoverable reserves at the Hibbing joint venture is approximately 4 million short tons. Refer to Mining Properties in Item 2 of this Form 10-K for additional information. Recoverable reserves are defined as the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Minntac and Keetac’s annual capability and our share of annual capability for the Hibbing joint venture total approximately 23 million tons. We have iron ore pellet production capability that exceeds our steelmaking capability in the U.S.
We historically have sold iron ore pellets to third parties, including in 2022, 2021 and 2020. The Company has agreements to supply iron ore pellets to third-party customers over the next several years.

Substantially all of USSE’s iron ore requirements are purchased from outside sources, primarily Ukrainian and Brazilian mining companies. Prices are determined in long-term contracts with strategic suppliers or as spot prices negotiated monthly or quarterly. USSE also has received iron ore from U. S. Steel’s iron ore facilities in North America. We believe that supplies of iron ore adequate to meet USSE’s needs are available at competitive market prices.

Coking Coal

All of U. S. Steel’s coal requirements for our cokemaking facilities are purchased from outside sources. Pricing for Flat-Rolled's coking coal contracts are typically negotiated on a yearly basis, and from time to time we have entered into multi-year agreements for a portion of our coking coal requirements.
Prices for European contracts are negotiated quarterly, annually or determined as index-based prices.
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We believe that supplies of coking coal adequate to meet our needs are available from outside sources at competitive market prices. The main source of coking coal for Flat-Rolled is the United States, and sources for USSE include Poland, Ukraine, Canada, Australia and the United States.
Coke
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In North America, the Flat-Rolled segment operates a cokemaking facility at the Clairton Plant of Mon Valley Works. At our Granite City Works, we have a 15-year coke supply agreement with Gateway that expires on December 31, 2024. Blast furnace injection of coal, and self-generated coke oven gas is also used to reduce coke usage.

With Flat-Rolled’s cokemaking facilities and the Gateway long-term supply agreement, it has the capability to be nearly self-sufficient with respect to its annual coke requirements at normal operating levels. Coke from time to time has been purchased from, sold to, or swapped with suppliers and other end-users to adjust for production needs and reduce transportation costs.
In Europe, the USSE segment operates cokemaking facilities at USSK. While USSE is self-sufficient for coke at normal operating levels, it periodically purchases coke from Polish and Czech coke producers to meet production needs. Volume and price are negotiated quarterly.
Steel Scrap and Other Materials

We believe that supplies of steel scrap and alloys that are adequate to meet our needs are readily available from outside sources at competitive market prices for the Flat-Rolled, Mini Mill and USSE segments. Generally, approximately 38 percent of our steel scrap requirements were internally generated through normal operations for these segments.
Limestone

All of Flat-Rolled’s limestone requirements and USSE's lime and limestone requirements are purchased from outside sources. We believe that supplies of limestone and lime adequate to meet our needs are readily available from outside sources at competitive market prices.
Zinc and Tin
We believe that supplies of zinc and tin required to fulfill the requirements for Flat-Rolled, Mini Mill and USSE are available from outside sources at competitive market prices. For Flat-Rolled and Mini Mill the main sources of zinc are Canada, Mexico and the United States and the main sources of tin are Bolivia, Brazil and Peru. For USSE, the main sources of zinc are Finland, Poland, the Netherlands, Germany and Slovakia and the main sources of tin are Peru, Indonesia, China and Bolivia.
During 2022, Flat-Rolled protected approximately 40 percent and 75 percent of its operation's zinc and tin purchases, respectively, with financial swap derivatives to manage exposure to zinc and tin price fluctuations. During 2022, USSE protected approximately 16 percent of its operation's zinc purchases with forward physical contracts to manage our exposure to zinc price fluctuations and protected approximately 68 percent of its operation's tin purchases with financial swaps to manage our exposure to tin price fluctuations. For further information, see Note 16 to the Consolidated Financial Statements.
Natural Gas

All of U. S. Steel’s natural gas requirements are purchased from outside sources.

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We believe that adequate supplies to meet Flat-Rolled’s, Mini Mill's and Tubular's needs are available at competitive market prices. For 2022, approximately 70 percent of our natural gas purchases in Flat-Rolled were based on bids solicited on a monthly basis from various vendors; the remainder were made daily or with term agreements.

We believe that adequate natural gas supplies to meet USSE’s needs are available at competitive market prices. During 2022, we routinely executed fixed-price forward physical purchase contracts for natural gas to partially manage our exposure to natural gas price increases. For 2022, approximately 48 percent of our natural gas purchases in USSE were made with fixed-price forward physical purchase contracts; the remainder were based on bids solicited on a quarterly or monthly basis.

Flat-Rolled and USSE use self-generated coke oven and blast furnace gas to reduce consumption of natural gas. USSE uses self-generated coke oven, converter and blast furnace gas to reduce consumption of natural gas and steam coal that results in lower CO2 emissions production.

Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and access to additional supply from countries including Norway, the U.S. and Africa. Together, these sources are enough to support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our USSE segment operations.

Industrial Gases

U. S. Steel purchases industrial gas in the U.S. under long-term contracts with various suppliers. USSE owns and operates its own industrial gas facility, but also may purchase industrial gases from time to time from third parties.


International Trade

U. S. Steel continues to face import competition, much of which is unfairly traded and fueled by massive global steel overcapacity, currently estimated to be over 500 million metric tons per year—more than five times the entire U.S. steel market and over seventeen times total U.S. steel imports. These imports and overcapacity negatively impact the Company’s operational and financial performance. U. S. Steel continues to lead efforts to address these challenges that threaten the Company, our workers, our stockholders and our country’s national and economic security.

As of the date of this filing, pursuant to a series of Presidential Proclamations issued in accordance with Section 232 of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subject to a 25 percent tariff, except imports from: (1) Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2) the European Union (EU), Japan and the United Kingdom (UK) that are melted and poured in the EU/Japan/UK, within quarterly tariff-rate quota (TRQ) limits; (3) Canada and Mexico, which are not subject to tariffs or quotas, but tariffs could be re-imposed on surging product groups after consultations; (4) Ukraine, which are exempt from tariffs until June 1, 2023; and (5) Australia, which are not subject to tariffs, quotas or an anti-surge mechanism.

The U.S. Department of Commerce (DOC) is managing a process in which U.S. companies may request and/or oppose temporary product exclusions from the Section 232 tariffs and quotas. U. S. Steel opposes exclusion requests for imported products that are the same as, or substitutes for, products manufactured by U. S. Steel.

Multiple legal challenges to the Section 232 action continue before the U.S. Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal Circuit (CAFC), the latter which has consistently rejected constitutional and statutory challenges to the Section 232 action.

Since its implementation in March 2018, the Section 232 action has supported the U.S. steel industry’s and U. S. Steel’s investments in advanced steel production capabilities, technology and skills, strengthening U.S. national and economic security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) implemented a definitive safeguard on global steel imports in the form of TRQs that impose 25 percent tariffs on steel imports that exceed the TRQ limit, effective through June 2024. In December 2022, the EC initiated a fourth review of the safeguard.

Antidumping duties (AD) and countervailing duties (CVD or antisubsidy duties) apply in addition to the Section 232 tariffs, quotas, TRQs and the EC’s safeguard, and AD/CVD orders may continue beyond the Section 232 action and the EC’s safeguard. U. S. Steel continues to actively defend and maintain the 61 U.S. AD/CVD orders and 14 EU AD/CVD orders covering U. S. Steel products in multiple proceedings before the DOC, U.S. International Trade Commission (ITC), CIT, CAFC, the EC and European courts, and the World Trade Organization (WTO).

In July 2022, the ITC voted to continue the AD/CVD orders on corrosion-resistant steel from China, India, Italy, South Korea and Taiwan and cold-rolled steel from China, India, Japan, South Korea and the UK for another five years, but voted to revoke the AD/CVD orders on cold-rolled steel from Brazil. In October 2022, the ITC voted to continue the AD/CVD orders on hot-rolled
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steel from Australia, Japan, Korea, Netherlands, Russia, Turkey and the United Kingdom for another five years, but voted to revoke the AD/CVD orders on hot-rolled steel from Brazil. Also, in October 2022, the ITC voted to impose new AD/CVD orders on imports of OCTG from Argentina, Mexico, Korea and Russia.

In August 2022, the EC imposed definitive AD measures on imports of hot-dipped galvanized steel from Russia and Turkey and announced the continuation of AD measures on imports of cold-rolled steel from China and Russia for another five years. The EC is conducting five-year reviews of the AD/CVD orders on hot-rolled steel from five countries with a decision expected in 2023.

In April 2022, the U.S. suspended normal trade relations with Russia and Belarus, resulting in higher than normal tariffs on imports from Russia and Belarus, including steel and raw materials. In June, President Biden announced additional tariff increases on certain products from Russia, including certain steel products and ferroalloys, effective August 1, 2022.

Additional tariffs of 7.5 to 25 percent continue to apply to certain U.S. imports from China, including certain raw materials used in steel production, semi-finished and finished steel products, and downstream steel-intensive products, pursuant to Section 301 of the Trade Act of 1974. The Office of the United States Trade Representative (USTR) is currently conducting a statutory review of the Section 301 tariffs.

The United States and EU are currently negotiating a global sustainable steel arrangement to restore market-oriented conditions and address carbon intensity that is targeted for completion by the end of 2023.

U. S. Steel will continue to execute a broad, global strategy to maximize opportunities and navigate challenges presented by imports, global steel overcapacity, and international trade law and policy developments.

Environmental Stewardship

U. S. Steel is committed to effective environmental stewardship. We have implemented and continue to develop business practices that are designed to reduce negative environmental impacts. We believe part of being a good corporate citizen requires a dedicated focus on how our industry affects the environment. We have taken the actions described below in furtherance of that goal. U. S. Steel's environmental expenditures totaled $334 million in 2022, $302 million in 2021 and $278 million in 2020. Overall, environmental compliance expenditures represent approximately 2 percent of U. S. Steel’s total costs and expenses in 2022, 2021 and 2020. For further information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental Matters.”

We continue to work on the promotion of cost-effective environmental strategies by supporting the development of appropriate air, water and waste laws and regulations at the local, state, national and international levels. We are committed to reducing our emissions and are investigating, creating and implementing innovative, best practice solutions throughout our operations to improve our environmental performance and to manage and reduce energy consumption.

U. S. Steel’s North America operations recycled 4.8 million tons of purchased and produced steel scrap annually in 2022 and in 2021. USSK recycled approximately 754 thousand tons and 970 thousand tons of produced steel scrap in 2022 and 2021, respectively. Because of steel’s physical properties, our products can be recycled at the end of their useful life without loss of quality, contributing to steel’s high recycling rate and affordability. North America operations recycled approximately 2.2 million tons of blast furnace slag, 58 thousand tons of Basic Oxygen Process steel slag, and 75 thousand tons of electric arc furnace slag by selling it for use as aggregate and in highway construction. In 2022, USSK recycled approximately 1.1 million tons of blast furnace slag, and 168 thousand tons of Basic Oxygen Process steel slag.

Many of our major production facilities have Environmental Management Systems that are certified to the ISO 14001 Standard. This standard, published by the International Organization for Standardization (ISO), provides the framework for the measurement and improvement of environmental impacts of the certified facility.

In 2019, and in each succeeding year since, we published the Clairton Operating and Environmental Report related to our Clairton Plant of Mon Valley Works. While U. S. Steel agreed to publish an annual report as part of the 2019 Allegheny County Health Department Settlement Order and Agreement, we took the opportunity to enhance the report by including detailed descriptions of our operations, our safety and environmental performance and community involvement in order to provide easily accessible information for the public. The Report details battery combustion stack and fugitive emission performance at Clairton and Clairton's continued commitment to environmental stewardship. In 2021, we published a similar report for the Edgar Thomson facility.


Reduction of Greenhouse Gas Emissions

In 2019, the Company announced its commitment to reduce greenhouse gas emissions intensity across its global footprint by 20 percent, as measured by the rate of CO2 equivalents emitted per ton of finished steel shipped, by 2030 based on 2018 baseline levels. Then, in 2021, the Company announced its goal to achieve net-zero emissions by 2050, as measured by the rate of CO2
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equivalents emitted per ton of finished steel shipped. The Company has provided information on paths to achieve this goal on its website. These targets apply to U. S. Steel’s global operations.

U. S. Steel plans to achieve its greenhouse gas emissions intensity reduction goals through the execution of multiple initiatives. These include the use of EAF steelmaking technology at U. S. Steel’s Fairfield Works and at Big River Steel, the first LEED-certified steel mill in the United States and the first steel mill in North America to receive ResponsibleSteel™ site certification. EAF steelmaking primarily relies on recycled scrap, rather than iron ore, to produce new steel products, which is a less carbon intensive process and leverages the ability to continuously recycle steel. Further carbon intensity reductions are expected to come from the implementation of ongoing energy efficiency measures, continued use of renewable energy sources and other process improvements to be developed.

The carbon reduction targets reflect our continued commitment to improvement in production efficiency and the manufacture of products that are environmentally friendly. In addition to a commitment to reduce its own greenhouse gas emissions intensity, U. S. Steel is committed to helping its customers achieve their environmental goals. Our industry-leading XG3™ advanced high-strength steel enables automakers to manufacture lighter weight vehicles that meet federal Corporate Average Fuel Economy (CAFE) standards with reduced carbon emissions. As part of our innovation efforts, we continue to look at new steelmaking technologies so that we can produce green steels and further reduce carbon emissions.

Environmental Matters, Litigation and Contingencies
Some of U. S. Steel’s facilities were in operation before 1900. Although the Company believes that its environmental practices have either led the industry or at least been consistent with prevailing industry practices, hazardous materials have been and may continue to be released at current or former operating sites or delivered to sites operated by third parties.

Our U.S. facilities are subject to environmental laws applicable in the U.S., including the Clean Air Act (CAA), the Clean Water Act (CWA), the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as well as state and local laws and regulations.

U. S. Steel has incurred and will continue to incur substantial capital, operating and maintenance and remediation expenditures as a result of environmental laws and regulations, related to release of hazardous materials, which in recent years have been mainly for process changes to meet CAA obligations and similar obligations in Europe.

EU Environmental Requirements and Slovak Operations
UnderPhase IV of the EU Emissions Trading Scheme (ETS), USSK'sSystem (EU ETS) commenced on January 1, 2021, and will finish on December 31, 2030. The European Commission issued final allocationapproval of the updated 2021-2025 Slovak National Allocation table in February 2022. Subsequently, the Slovak Ministry of Environment allocated the full amount of 2022 free allowances for the Phase III period, which covers the years 2013 through 2020 is 48totaling 6.3 million allowances. Based on projected total production levels, we startedEuropean Union Emission Allowances (EUA) to purchase allowancesUSSE in the third quarter of 2017 to meet the annual compliance submission in the future.February and April 2022. As of December 31, 2019,2022, we have purchasedpre-purchased approximately 11.72.1 million European Union Allowances (EUA)EUA totaling €132€147 million (approximately $148$157 million) to cover the estimatedexpected 2022 and 2023 shortfall of emission allowances. We estimate that the total shortfall will be approximately 12.5 million allowances for the Phase III period. The full cost of complying with the ETS regulations will depend on future production levels and future emissions intensity levels.

The EU's Industrial Emissions Directive requires implementation of EU determined best available techniques (BAT) for Iron and Steel production to reduce environmental impacts as well as compliance with BAT associated emission levels. Our most recent estimate of totalTotal capital expenditures for projects to comply with or go beyond BAT requirements iswere €138 million (approximately $155$147 million). These costs were partially offset by the EU funding received and may be mitigated over the 2017 to 2020 program period. These costs may be mitigatednext measurement periods if USSK complies with certain financial covenants, which are assessed annually. USSK complied with these covenants as of December 31, 2019.2022. If we are unable to meet these covenants in the future, USSK might be required to provide

additional collateral (e.g., bank guarantee) to secure 50 percent of the full value of estimated expenditures. There could be increased operating costs associated with these projects, such as increased energy and maintenance costs. We are currently unable to reliably estimate what the increase in operating costs will be as many projects are in the development stage.

EU funding received.
For further discussion of laws applicable in Slovakia and the EU and their impact on USSK,USSE, see Note 26 to the Consolidated Financial Statements, “Contingencies and Commitments, - Environmental Matters, EU Environmental Requirements.”
Minnesota Mining Operations - Water
The State of Minnesota has a sulfate wild rice water quality standard (WQS) set at 10mg/L. This sulfate WQS was established in 1973, since this time industry has been working with the legislature and the Minnesota Pollution Control Agency (MPCA) to reevaluate the environmental protection and science behind the 10 mg/L standard. In 2011, the legislature passed a law requiring MPCA to revise the sulfate standard. MPCA started the process to revise the rulemaking for the sulfate WQS, but it was never completed. During the interim the Keetac National Pollutant Discharge Elimination System (NPDES) permit was issued in November 2011 with a sulfate standard of 14 mg/L and a compliance schedule. Then in 2015, the Minnesota legislature passed a law that MPCA could not require businesses to expend funds to comply with the sulfate limit until the rulemaking was revised by MPCA as directed by the legislature in 2011. To date the sulfate WQS rulemaking has not been revised. During this time Minntac has also received a NPDES permit with a sulfate limit and compliance schedule.
Both Minntac and Keetac have been working to determine the best options to address sulfate. One of the options in process is that both sites have submitted and even renewed site-specific standard (SSS) requests to MPCA. The SSS present plans specific to each location and explain the actual impact on sulfate from the facilities. To date MPCA has not taken any action on
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the SSS plans. The United States Environmental Protection Agency (the U.S. EPA) partially rejected the CWA 303(d) list for impaired waters submitted by MPCA for 2021. The MPCA's impaired waters list was in part rejected to add Hay Lake as being impaired for wild rice sulfate. In February 2022, the U.S. EPA Region V sent a letter to MPCA recognizing the conflict between state law and the CWA.
U. S. Steel is continuing to work to determine the most efficient and effective options to meet the sulfate standard. However, if MPCA does not revise the sulfate standard of 10mg/L or approve the SSS it is likely to have an impact on mining operations as it will require extensive changes to water collection and treatment.

New and Emerging Environmental Regulations

United States and European Greenhouse Gas Emissions Regulations

Future compliance withThe Phase IV EU ETS period spans 2021-2030 and began on January 1, 2021.The Phase IV period is divided into two sub periods (2021-2025 and 2026-2030), rules for the first subperiod are finalized, however we expect that rules for the second subperiod may be more stringent than those for the first one. Once approved, the rules may impact subperiod 2026-2030. Currently, the overall EU ETS target is a 40 percent reduction of 1990 emissions by 2030. Free allocation of CO2 emission requirements may include substantial costs for emission allowances restrictionis based on reduced benchmark values which have been published in the first quarter of 2021 and historical levels of production from 2014-2018. Allocations to individual installations may be adjusted annually to reflect relevant increases and higher pricesdecreases in production. The threshold for coking coal, natural gasadjustments is set at 15 percent and electricity generatedwill be assessed on the basis of a rolling average of two precedent years. Production data verified by an external auditor shows that USSE rolling average for 2020-2021 returned to base limit for hot metal production resulting in increase of the free allocation for 2022 compared to 2021, however 2022 free allocation was still slightly reduced due to missing the 15 percent threshold for sinter production. Additionally, lower production in 2019 through 2021 will have an impact on the future free allocation for 2026-2030, where the historical production average for years 2019-2023 will be assessed. Based on actual production data for 2022, we expect that free allocation for hot metal will remain unchanged for 2023, however allocations for sinter will be lower.

In order to achieve the EU political goal of carbon based systems. Becauseemissions neutrality by 2050, on July 14, 2021, the European Commission released a package of legislative proposals called Fit for 55. The proposals contain significant changes to current EU ETS functions and requirements, including: a new carbon border adjustment mechanism to impose carbon fees on EU imports, further reduction of free CO2 allowance allocation to heavy industry and measures to strengthen the supply of carbon allowances. The legislative process is being impacted by the ongoing Russia-Ukraine crisis. The proposals are subject to the EU legislative process, and we cannot predict what requirements ultimately will be imposed in the U.S. and Europe, it is difficult to estimate the likely impact on U. S. Steel, but it could be substantial. On March 28, 2017, President Trump signed Executive Order 13783 instructing the United States Environmental Protection Agency (U.S. EPA) to review the Clean Power Plan. On October 16, 2017, the U.S. EPA proposed to repeal the Clean Power Plan after reviewing the plan pursuant to President Trump’s executive order. Any repeal and/or replacement of the Clean Power Plan is likely to be challenged by various proponents of the plan, such as environmental groups and certain states. Any impacts to our operations as a result of anytheir future greenhouse gas regulations are not estimable at this time since the matter is unsettled. In any case, to the extent expenditures associated with any greenhouse gas regulation, as with all costs, are not ultimately reflected in the prices of U. S. Steel's products and services, operating results will be reduced.impact.

There have been no material changes in U. S. Steel’s exposure to European Greenhouse Gas Emissions regulations since December 31, 2018.

United States - Air

The CAA imposes stringent limits on air emissions with a federally mandated operating permit program and civil and criminal enforcement sanctions. The CAA requires, among other things, the regulation of hazardous air pollutants through the development and promulgation of National Emission Standards for Hazardous Air Pollutants (NESHAP) and Maximum Achievable Control Technology (MACT) Standards. The U.S. EPA has developed various industry-specific MACT standards pursuant to this requirement. The CAA requires the U.S. EPA to promulgate regulations establishing emission standards for each category of Hazardous Air Pollutants. The U.S. EPA also must conduct risk assessments on each source category that is already subject to MACT standards and determine if additional standards are needed to reduce residual risks.

While our operations are subject to several different categories of NESHAP and MACT standards, the principal impact of these standards on U. S. SteelSteel's operations includes those that are specific to coke making, iron making, steel making and iron ore processing.

TheOn July 13, 2020, the U.S. EPA is currently in the process of completingpublished a Residual Risk and Technology Review of the Integrated Iron and Steel MACT regulations, Coke MACT regulations, and Taconite Iron Ore Processing MACT regulations as required by the CAA. The U.S. EPA is under a court order to complete the Residual Risk and Technology Review of the Integrated Iron and Steel regulations no later than March 13, 2020; and to complete the Residual Risk and Technology Review of the Taconite Iron Ore Processing Regulations by June 30, 2020.

On August 16, 2019, U.S. EPA published a proposed Residual Risk and Technology Review (RTR) rule for the Integrated Iron and Steel MACT category in the Federal Register. Register. Based on the results of the U.S. EPA’s risk review, the Agency proposedagency determined that risks due to emissions of air toxics from the Integrated Iron and Steel category are acceptable and that the current regulations provided an ample margin of safety to protect public health. Under the technology review, the U.S. EPA proposeddetermined that there are no developments in practices, processes or control technologies that necessitate revision of the standards. In September 2020, several petitions for review of the rule, including those filed by the Company, the American Iron and Steel Institute (the AISI), Clean Air Council and others, were filed with the United States Court of Appeals for the D.C. Circuit. The cases were consolidated and are being held in abeyance until the U.S. EPA accepted comments onreviews and responds to administrative petitions for review. The U.S. EPA is required by court order to issue a final rule by October 26, 2023. Because the proposed rule until November 7, 2019. Based upon our analysis of the integratedU.S. EPA has yet to propose a revised iron and steel proposed rule, the Company doesany impacts are not expect any material impact if the rule is finalized as proposed. estimable at this time.

For the Taconite Iron Ore Processing category, based on the results of the Agency’sU.S. EPA's risk review, the agency promulgated a final rule on July 28, 2020, in which the U.S. EPA is proposingdetermined that risks from emissions of air toxics from this source category are acceptable and that the existing standards provide an ample margin of safety. Furthermore, under the technology review, the Agencyagency identified no cost-effective developments in controls, practices, or processes to achieve further emissions reductions. Therefore,Petitions for review of the rule were filed in the United States Court of Appeals for the D.C. Circuit, in which the Company and the
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AISI intervened. The U.S.

EPA is proposing no revisionsrequired by court order to issue a final rule by November 16, 2023. Because the existing standards based on the RTRs. U.S. EPA accepted comments on the taconite proposed rule until October 25, 2019. Based upon our analysis of the proposedhas yet to propose a revised taconite rule, any impacts are not estimable at this time.

The U.S. EPA is in the Company does not expect any material impact if the rule is finalized as proposed.process of conducting its statutorily obligated residual risk and technology review of coke oven standards. Because the U.S. EPA has not completed its review of the Coke MACT regulations, any impacts related to the U.S. EPA’s review of the coke standards cannot be estimated at this time. The U.S. EPA is under a court-ordered deadline to complete the residual risk and technology rulemaking by May 23, 2024.


On March 12, 2018, the New York State Department of Environmental Conservation (DEC), along with other petitioners, submitted a CAA Section 126(b) petitionIn response to Court orders that invalidated prior U.S. EPA determinations regarding ozone attainment interference, on April 6, 2022, the U.S. EPA. InEPA proposed a Federal Implementation Plan (that would replace several pending or disapproved State Implementation Plans) for Regional Ozone Transport for the petition, the DEC asserts that stationary sources from the following nine states are interfering with attainment or maintenance of the 2008 and 2015 ozoneOzone National Ambient Air Quality Standards (NAAQS)Standard. The proposed rule would affect electric generating units (EGUs) in New York: Illinois, Indiana, Kentucky, Maryland, Michigan, Ohio, Pennsylvania, Virginia,26 states and West Virginia. DEC is requestingcertain non-EGU industries, including, among several others, coke ovens, taconite production kilns, boilers, blast furnaces, basic oxygen furnaces, reheating furnaces, and annealing furnaces in 23 states, including those where U. S. Steel has operations. The impacts of the rule, if promulgated as proposed, could be material. U. S. Steel submitted comments on the proposed rule on June 21, 2022. Based upon the U.S. EPA agreements with non-governmental organizations the rule is likely to require sources of nitrogen oxides inbe published as final by the nine states to reduce such emissions. In aU.S. EPA during the first quarter 2023. Once the rule is final, rule promulgated in the October 18, 2019, Federal Register, EPA denied the petition. On October 29, 2019, New York, New Jersey, and the City of New York petitioned the United States Court of Appeals for the District of Columbia Circuit for review of U. S. EPA’s denial ofSteel will further evaluate the petition. The matter remains before the Court.potential impacts to operations.

The CAA also requires the U.S. EPA to develop and implement NAAQSNational Ambient Air Quality Standards (NAAQS) for criteria pollutants, which include, among others, particulate matter (PM) - consisting of PM10 and PM2.5, lead, carbon monoxide, nitrogen dioxide, sulfur dioxide (SO2), and ozone.

In June 2010, the U.S. EPA significantly lowered the primary NAAQS for SO2 from 140 parts per billion (ppb) on a 24-hour basis to an hourly standard of 75 ppb. Subsequently, U.S. EPA designated the areas in which Great Lakes Works and Mon Valley Works facilities are located as nonattainment with the 2010 standard for the SO2 NAAQS. The non-attainment designation requires the region to implement operational and/or capital improvements to demonstrate attainment with the 2010 standard. U. S. Steel worked with the Allegheny County Health Department (ACHD) in developing a State Implementation Plan (SIP) for the Allegheny County portion of the Pennsylvania SIP that includes reductions of SO2 and improved dispersion from U. S. Steel sources. On November 19, 2018, U.S. EPA published a proposed rule to approve the SIP. Pursuant to a consent decree in Center for Biological Diversity, et al., v. Wheeler, No. 4:18-cv-03544 (N.D. Cal.), EPA has agreed to take final action on the SIP submittal no later than April 30, 2020. In addition, as noted in the Legal Proceedings section, U. S. Steel continues to work with the regulatory authorities to address the Wayne County, Michigan (where Great Lakes Works is located) nonattainment status. The operational and financial impacts of the SO2 NAAQS are not estimated to be material at this time.

In October 2015, the U.S. EPA lowered the NAAQS for ozone from 75 ppbparts per billion (ppb) to 70 ppb. On November 6, 2017, the U.S. EPA designated most areas in which we operate as attainment with the 2015 standard. In a separate ruling, on June 4, 2018, the U.S. EPA designated other areas in which we operate as “marginal nonattainment” with the 2015 ozone standard. On December 6, 2018, the U.S. EPA published a final rule regarding implementation of the 2015 ozone standard. Because no state regulatory or permitting actions to bring the ozone nonattainment areas into attainment have yet to be proposed or developed for U. S. Steel facilities, the operational and financial impact of the ozone NAAQS cannot be reasonably estimated at this time. On December 31, 2020, the U.S. EPA published a final rule pursuant to its statutorily required review of NAAQS that retains the ozone NAAQS at 70 ppb. In January 2021, New York, along with several states and non-governmental organizations filed petitions for judicial review of the action with the United States Court of Appeals for the D.C. Circuit. Several other states and industry trade groups intervened in support of the U. S. EPA’s action. The case remains in abeyance before the court until December 15, 2023, as the U.S. EPA voluntarily reconsiders the ozone NAAQS. Because the U.S. EPA has yet to complete its reconsideration and propose a revised ozone NAAQS, any impacts are not estimable at this time.

On December 14, 2012,18, 2020, the U.S. EPA loweredpublished a final rule pursuant to its statutorily required review of NAAQS that retains the annual standardexisting PM2.5 standards without revision. In early 2021, several states and non-governmental organizations filed petitions for PM2.5 from 15 micrograms per cubic meter (ug/m3) to 12 ug/m3, and retainedjudicial review of the PM2.5 24-hour and PM10 NAAQS rules. In December 2014,action with the United States Court of Appeals for the D.C. Circuit. Several industry trade groups intervened in support of the U.S. EPA’s action. The case remains in abeyance before the court until March 1, 2023, as the U.S. EPA designated some areas in whichvoluntarily reconsiders the PM2.5 NAAQS. On January 6, 2023, the U.S. EPA proposed to lower the annual PM2.5 NAAQS from the current 12 ug/m3 standard to within the range of 9.0 to 10.0 ug/m3. U. S. Steel operates as nonattainment withis currently reviewing the proposal to determine the impacts and evaluate any need to comment. Because the U.S. EPA has very recently proposed the rule without specificity, any impacts are inestimable at this time.

For calendar year 2022, all Allegheny County ambient air quality monitors met all U.S. EPA health based National Ambient Air Quality Standards for the second consecutive year. On March 16, 2022, the U.S. EPA published a final rule, a clean data determination, showing that Allegheny County has attained the 2012 annual PM2.5 standard. On April 6,NAAQS based on the 2018 the U.S. EPA published– 2020 ambient air quality data. Based on these and other data, ACHD submitted a notice that Pennsylvania, CaliforniaRedesignation Request and Idaho failed to submit a SIP to demonstrate attainment with the 2012 fine particulate standard by the deadline established by the CAA. As a result of the notice, Pennsylvania, a state in which we operate, is required to submit a SIPMaintenance Plan to the U.S. EPA no later than November 7, 2019 to avoid sanctions. On April 29, 2019,requesting that the ACHD published a draft SIP for the Allegheny County nonattainment area which demonstrates thatU.S. EPA redesignate all of Allegheny County will meet its reasonable further progress requirements and be in attainment with the 2012current PM2.5 annual and 24-hour NAAQS by December 31, 2021 with the existing controls that are in place. On September 12, 2019, the Allegheny County Board of Health unanimously approved the draft SIP. NAAQS.

United States – Water

The draft SIP was then sent to the Pennsylvania Department of Environmental Protection (PADEP). PADEP submitted the SIP to U.S. EPA for approval on Novemberissued the final rule redefining the Waters of the United States (WOTUS), set to become effective March 1, 2019. To date, U.S.2023. The definition of WOTUS has had many changes and legal challenges over the last several years. The new WOTUS rule expands the definition of what all waters will be considered to be a waters of the United States. The expansion of the WOTUS definition is likely to lead to additional legal challenges. It is also possible that the ruling in the U. S. Supreme court case Sackett v. EPA has not taken action on PADEP’s submittal.

In July 2018,would impact the ACHD providedWOTUS definition as it relates to wetlands. The Sackett case was heard by the Court in the Fall 2022 term and decision is expected early in 2023. U. S. Steel ACHD Regulation Subcommittee memberswill continue to review the final WOTUS definition and interested parties with draft regulations that would modify the existing air regulations applicable to coke plants in Allegheny County. While ACHD currently has some of the most stringent air regulations in the country governing coke plants, which apply to U. S. Steel’s coke plant in Clairton, Pennsylvania (the only remaining coke plant in Allegheny County and one of two remaining in Pennsylvania), the draft regulations would reduce the current allowable emissions from coke plant operations and would be more stringent than the Federal Best Available Control Technology and Lowest Achievable

Emission Rate requirements. In various meetings with ACHD, U. S. Steel has raised significant objections, in particular, that ACHD has not demonstrated that continuous compliance with the draft rule is economically and technologically feasible. While U. S. Steel continues to meet with ACHD regarding the draft rule, U. S. Steel believes that any rule promulgated by ACHD must comply with its statutory authority. If the draft rule or similar rule is adopted, the financial and operational impacts to U. S. Steel could be material. To assist in developing rules objectively and with adequate technical justification, the June 27, 2019, Settlement Agreement, establishes procedures that would be used when developing a new rule. For further detailspotential impact on the June 27, 2019 Settlement Agreement with ACHD see "Item 1. Legal Proceedings - Environmental Proceedings - Mon Valley Works."Company.


Environmental Remediation

In the United States, U. S. Steel has been identified as a potentially responsible party (PRP) at seven sites under CERCLA as of December 31, 2019. Of these, there are three sites for which information requests have been received or there are other indications that U. S. Steel may be a PRP under CERCLA, but sufficient information is not presently available to confirm the existence of liability or to make a reasonable estimate with respect to any potential liabilities. There are also 18 additional sites for which U. S. Steel may be liable for remediation costs in excess of $100,000 under other environmental statutes, both federal and state, or where private parties are seeking to impose liability on U. S. Steel for remediation costs through discussions or litigation. At many of these sites, U. S. Steel is one of a number of parties involved and the total cost of remediation, as well as U. S. Steel’s share, is frequently dependent upon the outcome of ongoing investigations and remedial studies. U. S. Steel accrues for environmental remediation activities when the responsibility to remediate is probable and the amount of associated costs is reasonably estimable. As environmental remediation matters proceed toward ultimate resolution or as remediation obligations arise, charges in excess of those previously accrued may be required.

For further discussion of relevant environmental matters, including environmental remediation obligations, see "Item 3. Legal Proceedings, - Environmental Proceedings."

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Workforce

At U. S. Steel, we are committed to attracting, developing, and retaining a workforce of talented and diverse people — all working together to deliver superior results for our Company, stockholders, customers and communities. We regularly review our human capital needs.

As of December 31, 2019, U. S. Steel had approximately 17,000 employees in the U.S. and approximately 10,500 employees in Europe.

Most hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore pellet facilities in the United States are covered by collective bargaining agreements with the USW effective September 1, 2018 (the 2018 Labor Agreements) that expire on September 1, 2022. The 2018 Labor Agreements provide for wage, pension and other benefit adjustments. Workers at some of our North American facilities and at our transportation operations are covered by agreements with the USW or other unions that have various expiration dates.

In Europe, excluding U.S. expatriates, most employees at USSK are represented by the OZ KOVO union and all employees are covered by an agreement that expires at the end of March 2020.

Property, Plant and Equipment Additions

For property, plant and equipment additions, including finance leases, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition, Cash FlowsLiquidity and Liquidity – Cash Flows”Capital Resources” and Note 13 to the Consolidated Financial Statements.

Available Information

U. S. Steel’s Internet address is www.ussteel.com. We post our Annual Report on Form 10-K, our quarterly reports on Form 10-Q, our proxy statement, our current reports on Form 8-K, amendments to those reports and our interactive data files to our website free of charge as soon as reasonably practicable after such reports are filed, or furnished to, with the Securities and Exchange Commission (SEC). We also post all press releases and earnings releases to our website.

All other filings with the SEC are available via a direct link on the U. S. Steel website to the SEC’s website, www.sec.gov.


Also available on the U. S. Steel website are U. S. Steel’s Corporate Governance Principles, Code of Ethical Business Conduct and the charters of the Audit Committee, the Compensation & Organization Committee and the Corporate Governance & Sustainability Committee of the Board of Directors. These documents and the Annual Report on Form 10-K and proxy statement are also available in print to any stockholder who requests them. Such requests should be sent to the Office of the Corporate Secretary, United States Steel Corporation, 600 Grant Street, Suite 1500,1844, Pittsburgh, Pennsylvania, 15219-2800 (telephone: 412-433-1121).

U. S. Steel does not incorporate into this document the contents of any website or the documents referred to in the immediately preceding paragraphs.

Other Information

Information on net sales, depreciation, capital expenditures, earnings (loss) before interest and income taxes and assets by reportable segment and for business in the Other Businessescategory and on net sales and assets by geographic area are set forth in Note 4 to the Consolidated Financial Statements.

For significant operating data for U. S. Steel for each of the last five years, see “Five-Year Operating Summary (Unaudited)” within this document.


Item 1A. RISK FACTORS

OperationalEconomic and Market Risk Factors

The changing global economic climate is having adverse impacts on our business, which may create new risks and exacerbate certain other risks set forth below.

Changes in the global economic environment, inflation, rising interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could have an adverse effect on our industry and business, as well as those of our customers and suppliers.

Overall economic conditions in the U.S. and globally, including in Europe, including adverse factors such as inflation, rising interest rates, supply chain disruptions and the impacts of the war in Ukraine, significantly impact our business. Periods of economic downturn or continued uncertainty could result in difficulty increasing or maintaining our level of sales or profitability and we may experience an adverse effect on our business, results of operations, financial condition and cash flows.

Our InvestmentsU.S. operations are subject to economic conditions, including credit and capital market conditions, inflation, prevailing interest rates, and political factors, which if changed could negatively affect our results of operations, cash flows and liquidity. Political factors include, but are not limited to, changes to tax laws and regulations resulting in New Technologies May Not Be Fully Successfulincreased income tax liability, increased regulation, such as carbon emissions limitations or trading mechanisms, limitations on exports of energy and raw materials, and trade remedies. Actions taken by the U.S. government could affect our results of operations, cash flows and liquidity.

USSE is subject to economic conditions and political factors associated with the EU, Slovakia and neighboring countries, and the euro currency. Changes in any of these economic conditions or political factors could negatively affect our results of operations, cash flows and liquidity. Political factors include, but are not limited to, taxation, nationalization, inflation, government instability, regional conflict, civil unrest, increased regulation and quotas, tariffs, sanctions and other market-distorting measures. The ongoing war in Ukraine has had a broad range of adverse impacts on global economic conditions, some of which have had and are likely to continue to have adverse impacts on our business, including increased raw material and energy costs, softer
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customer demand and lower steel prices. USSE purchases a significant portion of its iron ore and coal from suppliers based in Ukraine.

Additionally, we are also exposed to risks associated with the business success and creditworthiness of our suppliers and customers. If our customers or suppliers are negatively impacted by a slowdown in economic markets, we may face the reduction, delay or cancellation of customer orders, delays or interruptions of the supply of raw materials, and increased risk of insolvency and other credit related issues of customers or suppliers, which could delay payments from customers, result in increased customer defaults and cause our suppliers to delay filling, or to be unable to fill, our needs at all or on a timely or cost-effective basis. The occurrence of any of these events may adversely affect our business, results of operations, financial condition and cash flows.

The steel industry, as well as the industries of our customers and suppliers upon whom we are reliant, is highly cyclical, which may have an adverse effect on our customer demand and results of operations.

Steel consumption is highly cyclical and generally follows economic and industrial conditions both worldwide and in regional markets. Price fluctuations are impacted by the timing, magnitude and duration of these cycles, and are difficult to predict. This volatility makes it difficult to balance the procurement of raw materials and energy with global steel prices, our steel production and customer product demand. U. S. Steel has implemented strategic initiatives to produce more stable and consistent results, even during periods of economic and market downturns, but this may not be enough to mitigate the effect that the volatility inherent in the steel industry has on our results of operations.

Additionally, our business is reliant on certain other industries that are cyclical in nature. We sell to the automotive, service center, converter, energy and appliance and construction-related industries. Some of these industries are highly sensitive to general economic conditions and may also face meaningful fluctuations in demand based on a number of factors outside of our control, including regulatory factors, supply chain disruptions, changing customer demand, economic conditions and raw material and energy costs. As a result, downturns or volatility in any of the markets we serve could adversely affect our financial position, results of operations and cash flows.

U. S. Steel has been and continues to be adversely affected by unfairly traded imports and globalovercapacity, which may cause downward pricing pressure, lost sales and revenue, market share, decreased production, investment, and profitability.

Currently, global steel production capacity significantly exceeds global steel demand, which adversely affects U.S. and global steel prices. Global overcapacity continues to result in high levels of dumped and subsidized steel imports into the markets we serve. Domestic and international trade laws provide mechanisms to address the injury caused by such imports to domestic industries. Excessive steel imports have resulted and may continue to result in downward pricing pressure and lost sales and revenue, which adversely impacts our business, operations, financial condition and cash flows.

Although U. S. Steel currently benefits from 61 U.S. AD and CVD or anti-subsidy duty orders and 14 EU AD/CVD orders, petitions for trade relief are not always successful or effective. When implemented, such relief is generally subject to periodic reviews and challenges, which can result in revocation of AD/CVD orders or reduction of effective duty rates. There can be no assurance that any relief will be obtained or continued in the future or that such relief will adequately combat unfairly traded imports.

As of the date of this filing, pursuant to a series of Presidential Proclamations issued in accordance with Section 232 of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subject to a 25 percent tariff, except imports from: (1) Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2) the EU, Japan, and UK that are melted and poured in the EU/Japan/UK, within quarterly TRQ limits; (3) Canada and Mexico, which are not subject to tariffs or quotas, but tariffs could be re-imposed on surging product groups after consultations; (4) Ukraine, which are exempt from tariffs until June 1, 2023; and (5) Australia, which are not subject to tariffs, quotas, or an anti-surge mechanism. The Section 232 national security action on steel imports currently provides U. S. Steel and other domestic steel producers critical relief from imports. With no scheduled end date, the future coverage and duration of the Section 232 action is not known. Further, the U.S. government may negotiate alternatives to the Section 232 tariffs for certain countries, similar to TRQ agreements with the EU, Japan, and the UK.

USTR's review of additional imports tariffs of 7.5 to 25 percent on certain U.S. imports from China, including certain raw materials used in steel production, semi-finished and finished steel products, and downstream steel-intensive products, pursuant to Section 301 of the Trade Act of 1974 could change the coverage and levels of such tariffs.

In February 2019, the EC implemented a definitive safeguard on global steel imports in the form of TRQs. The TRQs, which impose 25 percent tariffs on steel imports that exceed the TRQ limit, are currently effective through June 2024. In December 2022, the EC initiated its fourth periodic review of this safeguard, which may result in adjustments to the safeguard TRQ limits.

All of the above factors present a degree of uncertainty to our financial and operational performance, our customers, and overall economic conditions, all of which could impact steel demand and our performance. Faced with significant import competition and
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overcapacity in various markets, we will continue to evaluate potential strategic and organizational opportunities, which may include exiting lines of business and the sale of certain assets, temporary shutdowns or closures of facilities.

Shortages of skilled labor, increased labor costs or our failure to attract and retain other highly qualified personnel in the future could disrupt our operations and adversely affect our financial results.

We depend on skilled labor for the manufacture of our products. Some of our facilities are located in areas where demand for skilled labor often exceeds supply. Shortages of some types of skilled labor, such as electricians and qualified maintenance technicians, could restrict our ability to maintain or increase production rates, lead to production inefficiencies and increase our labor costs. Ourshift to the Best for All strategy will also require a set of job skills that is different from our prior needs. Our continued success depends on the active participation of our key employees. We have recently observed an overall tightening and increasingly competitive labor market. The competitive nature of the labor markets in which we operate, the cyclical nature of the steel industry and our resulting needs for skilled employees increase our risk of not being able to recruit, train and retain the employees we require at efficient costs and on reasonable terms, and could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees. In addition, many companies, including U. S. Steel, have had employee layoffs as a result of reduced business activities during industry downturns. The loss of our key people or our inability to attract new key employees could adversely affect our operations. Additionally, layoffs or other adverse actions could result in an adverse relationship with our workforce or third-party labor providers. If we are unable to recruit, train and retain adequate numbers of qualified employees and third-party labor providers on a timely basis or at a reasonable cost or on reasonable terms, our business and results of operations could be adversely affected. Additionally, an overall labor shortage, lack of skilled labor, increased turnover or labor inflation as a result of general macroeconomic factors that affect our customers or suppliers could have a material adverse impact on the company’s operations, results of operations, liquidity or cash flows.

Strategic Risk Factors

Our investments in new technologies and products may not be fully successful.

Execution of our Best for All® strategy depends, in part, on the success of a number of investments we have made and plan to make in new technologies.facilities, technologies and products and successfully transitioning our footprint to a lower-cost, carbon and capital intensive model. Our Best for All strategy is centered around expanding our competitive advantages in low-cost iron ore mini mill steelmaking, and best-in-class finishing capabilities. These competitive advantages are built on a foundation of research, innovation and deep customer relationships. We are expanding our low-cost iron ore competitive advantage by investing in ways to translate the advantage to feed our growing EAF footprint. This includes investments in a pig iron caster at the Gary Works facility and DR-grade pellet capabilities in Keetac, Minnesota. We are expanding our mini mill steelmaking capabilities through the construction of a second mini mill facility in Osceola, Arkansas. We are also expanding our best-in-class finishing capabilities through investments in a non-grain oriented electrical steel line and galvanizing construction line at Big River Steel. In executing our strategy, we aim to enhance our earnings profile, deliver long-term cash flow through industry cycles and reduce our cost, capital, and carbon intensity. By offering the product capabilities, including the more sustainable steels (steels made with lower greenhouse gas emissions) our customers are increasingly demanding, we believe that we can achieve more competitive positioning in strategic, high-margin end markets, and deliver high-quality, sustainable, value-added products and innovative solutions.

Construction of our investments are expected to deliver an enhanced “best of both” business model that delivers cost and/or capability differentiation for our stakeholders. Our intent to eventually acquire 100% of Big River Steel, like our other investments in state-of-the-art sustainable steel technologies including, but not limited to, the endless casting and rolling line at Mon Valley Works and XG3 at our PRO-TEC joint venture,strategic projects is a significant element of our strategy. If our investment in Big River Steel fails to provide the benefits we expect or our financial condition is constrained, we may choose not to exercise our option to acquire its remaining outstanding ownership interests. In addition, if Big River Steel does not achieve the expected financial performance, we still may be required to acquire the remaining ownership interests at a discounted purchase price. Additionally, like with any significant construction project, we may be subject to changing market conditions and demand for our completed projects, delays, inflation and cost overruns, work stoppages, labor shortages, engineering issues, weather interferences, supply chain delays, changes required by governmental authorities, delays or the inability to acquire required permits or licenses, changes in the ability to finance the projects or disruption of existing operations, any of which could have an adverse impact on our operational and financial results. Furthermore, new product development or modification is costly, may be restricted by regulatory requirements, involves significant research, development, time, expense and expensehuman capital and may not necessarily result in the successful commercialization of any new products, customer adoption of new technologies or products or new technologies may not perform as intended or expected. Unsuccessful execution of these strategic projects, or underperformance of any of these assets or failure of new products to gain market acceptance could adversely affect our business, results of operations and financial condition.condition and may limit the benefits of our stockholder value creation strategy.

From time to time, we engage in acquisitions, divestitures and joint ventures and may encounter difficulties in integrating and separating these businesses and therefore we may not realize the anticipated benefits.

As we pursue our Best for All® strategy, we may seek growth opportunities through strategic acquisitions as well as evaluate our portfolio for potential divestitures to optimize our business footprint and portfolio. The success of these transactions will depend on our ability to integrate or separate, as applicable, assets and personnel in these transactions and to cooperate with our strategic partners. We may encounter difficulties in integrating acquisitions with our operations as well as separating divested businesses, and in managing strategic investments. Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into a transaction.

Additionally, we seek opportunities to monetize non-core and excess iron assets, including through real estate sales, third party agreements and option agreements. These opportunities may not materialize or generate the financial benefits expected. For
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example, Stelco Inc. holds an option (Option) to acquire an undivided 25 percent interest in a to-be-formed entity that will own the Company’s current iron ore mine located in Mt. Iron, Minnesota. There is a possibility that Stelco may not exercise its Option in the anticipated timeframe or at all. If the proposed joint venture with Stelco is not successful, fails to provide the benefits we expect, or is not created at all, we may in the future have more iron ore than we need to support the business. Additionally, the existence of the Option may deter future potential opportunities to monetize the iron ore assets. Any of the foregoing could adversely affect our business and results of operations.

Operational and Commercial Risk Factors

Our operational footprint, unplanned equipment outages and other unforeseen disruptions may adversely impact our results of operations.operations or result in idle facility costs or impairment charges.

U. S. Steel has adjusted its operating configuration to advance its Best for All® strategy, in response to market conditions, including global economic volatility, declining steel prices, oil and gas industry disruption, global overcapacity and unfairly traded imports, and to optimize capability and cost performance, by idling and restarting production at certain facilities. Due to our existing operational footprint, the Company may not be able to respond in an efficient manner to fully realize the benefits from changing market conditions that are favorable to integrated steel producers.producers or most efficiently mitigate the negative impacts of such changes. Our decisions concerning which facilities to operate and at what levels are made based upon execution of our Best for All strategy, market conditions, our customers’ orders for products as well as the capabilities and cost performance of our locations. We may concentrate production operations at several plant locations and not operate others, and as a result we may incur idle facility costs or impairment charges.

Our steel production depends on the operation of critical structures and pieces of equipment, such as blast furnaces, electric arc furnaces, steel shops, casters, hot strip mills and various structures and operations, including information technology systems, that support them.them, as well as finishing lines at our facilities and certain of our joint ventures. While we are implementinginvested in operational and reliability enhancements to our assets through the asset revitalization program, launched in 2017, and continue to implement initiatives focused on proactive maintenance of key machinery and equipment at our production facilities, we may experience prolonged periods of reduced production and increased maintenance and repair costs due to equipment failures at our facilities or those of our key suppliers.

It is also possible that operations may be disrupted due to other unforeseen circumstances such as power outages, explosions, fires, floods, pandemics, terrorism, accidents, severe weather conditions, and changes in U.S., European Union and other foreign tariffs, free trade agreements, trade regulations, laws and policies. We are also exposed to similar risks involving major customers and suppliers such as force majeure events of raw materials suppliers that have occurred and may occur in the future. Availability of raw materials and delivery of products to customers could be affected by logistical disruptions, such as shortages of barges, ocean vessels, rail cars or trucks or unavailability of rail lines or of the locks on the Great Lakes or other bodies of water. To the extent that lost production could not be compensated for at unaffected facilities and depending on the length of the outage, our sales and our unit production costs could be adversely affected.

U. S. Steel continuesWe are subject to incurrisks related to the global COVID-19 pandemic, which has had adverse impacts on economic and market conditions and our business. COVID-19 has created significant volatility, uncertainty and economic disruption in the regions in which we operate. We expect that certain costs when production capacity is idled, increased costs to resume production at idled facilities, or costs to idle facilities.

Our decisions concerning which facilities to operate and at what levels are made based upon our customers’ orders for products as well as the capabilities and cost performanceparts of our locations. During periods of depressed market conditions, we may concentrate production operations at several plant locations and not operate others in response to customer demand, and as a result we will incur idle facility costs.

When we restart idled facilities, we incur certain costs to replenish raw material inventories, prepare the previously idled facilities for operation, perform the required repair and maintenance activities and prepare employees to return to work safely and resume production responsibilities. The amount of any such costs can be material, depending on

a variety of factors, such as the period of time during which the facilities remained idle, necessary repairs and available employees, and is difficult to project.

U. S. Steel has been and continues to be adversely affected by unfairly traded imports and global overcapacity, which may cause downward pricing pressure, lost sales and revenue, market share, decreased production, investment, and profitability.

Currently, global steel production capacity significantly exceeds global steel demand, which adversely affects U.S. and global steel prices. Global overcapacity continues to result in high levels of dumped and subsidized steel imports into the markets we serve. Domestic and international trade laws provide mechanisms to address the injury caused by such imports to domestic industries. Excessive imports of steel products into the U.S. has resulted and may continue to result in downward pricing pressure and lost sales and revenue, which adversely impacts our business, results of operations, financial condition and cash flows. Additional planned capacity in the U.S. could increase this overcapacity and further negatively impact U.S. steel prices.

Though U. S. Steel currently benefits from 54 U.S. antidumping and countervailing duty (AD/CVD) orders and 11 European Union (EU) AD/CVD orders, petitions for trade relief are not always successful or effective. When received, such relief is generally subject to periodic reviews and challenges, which can result in revocation of the AD/CVD order or reduction of the AD/CVD duties. There can be no assurance that any relief will be obtained or continued in the future or that such relief will adequately combat unfairly traded imports.

The current Section 232 national security tariffs and quotas on steel imports into the U.S. also provide U. S. Steel and other domestic steel producers relief from imports. Likewise, the EU’s retaliatory 25 percent tariffs on certain U.S. steel imports and safeguard measures on steel provide USSE and other European steel producers some degree of relief from imports. The duration of the Section 232 tariffs and quotas, the outcome of outstanding product exclusion requests before the U.S. Department of Commerce, and the EU retaliatory and safeguard relief is not known.

Faced with significant imports into the U.S. and overcapacity in various markets, we will continue to evaluate potential strategicbe impacted by the continuing effects of COVID-19, including resurgences and organizational opportunities, which may include exiting lines of business and the sale of certain assets, temporary shutdowns or closures of facilities.

We face risks relating to changes in U.S. and foreign tariffs, trade agreements, laws, and policies

Through a series of Presidential Proclamations pursuant to Section 232variants of the Trade Expansion Act of 1962, U.S. imports of certain steel products are subjectvirus. It remains difficult to a 25 percent tariff, except for imports from: (1) Argentina, Brazil, and Korea, which are subject to restrictive quotas; (2) Canada and Mexico, which are currently not subject to either tariffs or quotas, but tariffs could be re-imposed on surging product groups after consultations; and (3) Australia, which is not subject to tariffs, quotas or an anti-surge mechanism. The Section 232 national security tariffs and quotas on steel imports currently provide U. S. Steel and other domestic steel producers critical relief from imports. With no scheduled end date,predict the durationfull impact of the Section 232 reliefCOVID-19 pandemic on the broader economy, and whether such change is not known. Further, the U.S. government may negotiate alternatives to the Section 232 tariffs for certain countries. The U.S. Department of Commerce continues to administer its Section 232 product exclusion process. The Section 232 action on aluminum and steel imports, potential Section 232 action on other products, and recent and potential additional U.S. import tariffs imposed under Section 301 of the Trade Act of 1974 have resulted in the possibility of tariffs being applied to materials and/temporary or items we purchase from subject countries or regions as part of our manufacturing process, and may result in additional, retaliatory action by foreign governments on U.S. exports of a range of products, including products produced by our customers. In February 2019, the European Commission imposed a definitive safeguard on global steel imports in the form of tariff rate quotas (TRQs; 25 percent tariffs on steel imports that exceed the quota) effective through June 2021. All of the above factors present a degree of uncertainty to our financial and operational performance, our customers, and overall economic conditions, all of which could impact steel demand and our performance.permanent.

The steel industry is highly cyclical, whichphysical impacts of climate change may also have ana material adverse effect on our results of operations. Climate change may be associated with increased occurrence of extreme weather conditions, which could include, among other things, increased risk of flooding, potential heat stress at facilities and other natural disasters that may lead our customers to curtail or shut down production or to supply chain and operational disruptions.

Steel consumption is highly cyclical and generally follows economic and industrial conditions both worldwide and in regional markets. This volatility makes it difficult to balance the procurement of raw materials and energy with global steel prices, our steel production and customer product demand. U. S. Steel has implemented strategic initiatives to produce more stable and consistent results, even during periods of economic and market downturns, but this may not be enough to mitigate the effect that the volatility inherent in the steel industry has on our results of operations.

Additionally, our business is reliant on certain other industries that are cyclical in nature. We sell to the automotive, service center, converter, energy and appliance and construction-related industries. Some of these industries exhibit a great deal of sensitivity to general economic conditions and may also face meaningful fluctuations in demand based on a number of factors outside of our control, including regulatory factors, economic conditions, and raw material and energy costs. As a result, downturns or volatility in any of the markets we serve could adversely affect our financial position, results of operations and cash flows.

We face increased competition within our industry and from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements.demand for lower-carbon products.

As a result of increasingly stringent regulatory requirements and increased market and technological changes driven by broader trends such as decarbonization and electrification efforts in response to climate change, designers, engineers and industrial manufacturers, especially those in the automotive industry, are increasing their use of lighter weight, less carbon intense and alternative materials, such as aluminum, composites, plastics and carbon fiber. Use of such materials could reduce the demand for our steel products or steel products generally, which may reduce our profitability and cash flow. Additionally, the trend toward light weighting in the automotive industry, which requires lighter gauges of steel at higher strengths, could result in lower steel volumes required by that industry over time.

Additionally, technologies such as direct iron reduction, EAF production, oxygen-coal injection and experimental technologies such as molten oxide electrolysis and hydrogen flash smelting may be more cost effective than our current production methods. However, we may not have sufficient capital to invest in such technologies and may incur difficulties adapting and fully integrating these
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technologies into our existing operations. We may also encounter production restrictions, or not realize the cost benefit from such capital intensive technology adaptations to our current production processes. Customers, such as those in the automotive industry, are demanding stronger and lighter products. Tubular customers are increasingly requesting pipe producers to supply connections and other ancillary parts as well as inspection and other services. We may not be successful in meeting these technological challenges.

Limited availability, or volatility in prices of raw materials, scrap and energy may constrain operating levels and reduce profit margins.

U. S. Steel and other steel producers have periodically faced problems obtaining sufficient raw materials and energy in a timely manner due to delays, defaults, severe weather conditions, or force majeure events, shortages or transportation problems (such as shortages of barges, ore vessels, rail cars or trucks, or disruption of rail lines, waterways, or natural gas transmission lines), resulting in production curtailments. As a result, we may be exposed to risks concerning pricing and availability of raw materials and energy resources from third parties as well as logistics constraints moving our own raw materials and scrap to our plants. USSE purchases substantially all of its iron ore and coking coal requirements from outside sources. USSE is also dependent upon availability of natural gas produced in Russia and transported through Ukraine. Any curtailments or escalated costs may further reduce profit margins.

U. S. Steel has agreed, and may continue to agree, to purchase raw materials and energy at prices that have been, and may be, above future market prices or in greater volumes than required in the future. Additionally, any future decreases in iron ore, scrap, natural gas, electricity and oil prices may place downward pressure on steel prices. If steel prices decline, our profit margins on indexed contracts and spot business could be reduced.

Changes in the global economic environment and prolonged periods of slow economic growth could have an adverse effect on our industry and business, as well as those of our customers and suppliers.

Overall economic conditions in the U.S. and globally, including Europe, significantly impact our business. Periods of economic downturn or continued uncertainty, including the significant decline of market conditions in Europe, could result in difficulty increasing or maintaining our level of sales or profitability and we may experience an adverse effect on our business, results of operations, financial condition and cash flows.

Our U.S. operations are subject to economic conditions, including credit and capital market conditions, and political factors in the U.S., which if changed could negatively affect our results of operations, cash flows and liquidity. Political factors include, but are not limited to, taxation, inflation, increased regulation, limitations on exports of energy and raw materials, and trade remedies. Actions taken by the U.S. government could affect our results of operations, cash flows and liquidity.

USSE is subject to economic conditions and political factors associated with the EU, Slovakia and neighboring countries, and the euro currency. Changes in any of these economic conditions or political factors could negatively affect our results of operations, cash flows and liquidity. Political factors include, but are not limited to, taxation, nationalization, inflation, government instability, civil unrest, increased regulation and quotas, tariffs and other protectionist measures.

Our Flat-Rolled and Tubular segments may also be particularly impacted by unfavorable market conditions in the oil and gas industries. Declines in oil prices, and the correlating reduction in drilling activity, as well as high levels of inventory in the supply chain, may reduce demand for tubular products and could have adverse impacts on our results of operations and cash flows.

Additionally, we are also exposed to risks associated with the business success and creditworthiness of our suppliers and customers. If our customers or suppliers are negatively impacted by a slowdown in economic markets, we may face the reduction, delay or cancellation of customer orders, delays or interruptions of the supply of raw materials, and bankruptcy of customers or suppliers. The occurrence of any of these events may adversely affect our business, results of operations, financial condition and cash flows.

Shortages of skilled labor, increased labor costs, or our failure to attract and retain other highly qualified personnel in the future could disrupt our operations and adversely affect our financial results.

We depend on skilled labor for the manufacture of our products. Our continued success depends on the active participation of our key employees. Some of our facilities are located in areas where demand for skilled labor often exceeds supply. Shortages of some types of skilled labor, such as electricians and qualified maintenance technicians, could restrict our ability to maintain or increase production rates, lead to production inefficiencies and increase our labor costs. Our shift to the "best of both" strategy would also require a set of job skills that is different from our prior needs. The competitive nature of the labor markets in which we operate, the cyclical nature of the steel industry and the resulting employment needs increase our risk of not being able to recruit, train and retain the employees we require at efficient costs and on reasonable terms, particularly when the economy expands, production rates are high or competition for such skilled labor increases. Many companies, including U. S. Steel, have had employee lay-offs as a result of reduced business activities in an industry downturn. The loss of our key people or our inability to attract new key employees could adversely affect our operations. Additionally, layoffs or other adverse actions could result in an adverse relationship with our workforce or third party labor providers. If we are unable to recruit, train and retain adequate numbers of qualified employees and third party labor providers on a timely basis or at a reasonable cost or on reasonable terms, our business and results of operations could be adversely affected.

Our 2018 Labor Agreements with the USW contain provisions that may impact certain business activities.

Our 2018 Labor Agreements with the USW contain provisions that grant the USW a limited right to bid on the Company’s sale of a facility (or sale of a controlling interest in an entity owning a facility) covered by the 2018 Labor Agreements, excluding public equity offerings and/or the transfer of assets between U. S. Steel and its wholly owned subsidiaries. These agreements also require a minimum level of capital expenditures (subject to approval of the Board of Directors) to maintain the competitive status of the covered facilities, and place certain limited restrictions on our ability to replace product produced at a covered facility with product produced at other than Company facilities or affiliates or U.S. or Canadian facilities with employee protections similar to the protections found in the 2018 Labor Agreements when the Company is operating covered facilities below capacity. These provisions could favorably or unfavorably impact certain business activities including pricing, operating costs, margins, and/or our competitiveness in the marketplace.

A failure of our information technology infrastructure and cybersecurity threats may adversely affect our business operations.

Despite efforts to protect confidential business information, personal data of employees and contractors, and the control systems of manufacturing plants, U. S. Steel systems and those of our third-party service providers have been and may be subject to cyber-attacks or system breaches. System breaches can lead to theft, unauthorized disclosure, modification or destruction of proprietary business data, personally identifiable information (PII), or other sensitive information, and to defective products, production downtime and damage to production assets, and the inaccessibility of key systems, with a resulting impact to our reputation, competitiveness and operations. We have experienced cybersecurity attacks that have resulted in unauthorized persons gaining access to our information technology systems and networks, and we could in the future experience similar attacks. To date, no cybersecurity attack has had a material impact on our financial condition, results of operations or liquidity.

While the Company continually works to safeguard our systems and mitigate potential risks, there can be no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches or mitigate all potential risks to our systems, networks and data.data, particularly with the recent proliferation and sophistication of ransomware attacks around the world. The potential consequences of a material cybersecurity attack include reputational damage, investigations and/or adverse proceedings with government regulators or enforcement agencies, litigation with third parties, disruption to our systems, including production capabilities, unauthorized release of confidential, personally

identifiable or otherwise protected information, corruption of data, diminution in the value of our investment in research, development and engineering and increased cybersecurity protection and remediation costs, which in turn could adversely affect our competitiveness, results of operations and financial condition. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilities resulting from a cybersecurity attack.

We depend on third parties for transportation services and increases in costs or the availability of transportation may adversely affect our business and operations.

Our business depends on the transportation of a large number of products, both domestically and internationally. We rely primarily on third parties, including the recently divested Transtar business, for transportation of the products we manufacture as well as delivery of our raw materials.Any increase in the cost of the transportation of our raw materials or products, as a result of increases in fuel or labor costs, higher demand for logistics services, consolidation in the transportation industry or otherwise, may adversely affect our results of operations as we may not be able to pass such cost increases on to our customers.

Our transportation service providers may face disruptions due to weather conditions or events, strikes, labor shortages or other constraints. If any of these providers were to fail to deliver raw materials to us or deliver our products in a timely manner, we may be unable to manufacture and deliver our products in response to customer demand. In addition, if any of these third parties were to cease operations or cease doing business with us, we may be unable to replace them at a reasonable cost.

In addition, such Such failure of a third-party transportation provider could harm our reputation, negatively affect our customer relationships and have a material adverse effect on our financial position and results of operations.

Benefits from our "bestOur 2022 Labor Agreements with the USW contain provisions that may impact certain business activities.

Our 2022 Labor Agreements with the USW contain provisions that grant the USW a limited right to bid on the Company’s sale of both" stockholder value creation strategy and asset revitalization program may be limited a facility (or sale of a controlling interest in an entity owning a facility) covered by the 2022 Labor Agreements, excluding public equity offerings and/or may not be fully realized.

the transfer of assets between U. S. Steel is pursuingand its wholly owned subsidiaries. These agreements also require a stockholder value creation strategy focusedminimum level of capital expenditures (subject to approval of the Board of Directors) to maintain the competitive status
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of the covered facilities, and place certain limited restrictions on delivering an enhanced “best of both” business model that delivers cost and/or capability differentiation for our customers. This includes investing in new assets and technologies to leverage the advantages of integrated and mini mill capabilities. This strategy builds on our asset revitalization program, launched in 2017, which covers investments in our existing assets, and involves investments beyond routine capital and maintenance spending. Asset revitalization projects have delivered, and are expected to deliver, both operational and commercial benefits, but such benefits may be limited to the assets that are revitalized. Business conditions, our ability to implement such initiatives, and factors beyond our control may limitreplace product produced at a covered facility with product produced at other than Company facilities or affiliates or U.S. or Canadian facilities with employee protections similar to the benefits associated with certain identified projects and limit the economic benefits of our stockholder value creation strategy or asset revitalization program. Our goal remains to deliver high-quality, value-added products on time every time and to collaborate with our customers to develop innovative solutions that address their most challenging needs.

We participate in joint ventures, which may not be successful.
We participate in a number of joint ventures and we may enter into additional joint ventures or other similar arrangementsprotections found in the future. Our joint venture partners,2022 Labor Agreements when the Company is operating covered facilities below capacity. The provisions in the 2022 Labor Agreements, as well as anycurrent or future partners, may have interests that are different from ours whichproposed labor legislation or regulations, could result in conflicting views as to the conduct of theunfavorably impact certain business of the joint venture. In the event that we have a disagreement with a joint venture partner as to the resolution of a particular issue, activities including pricing, operating costs, margins and/or as to the management or conduct of the business of the joint venture in general, we may not be able to resolve such disagreement in our favor. In addition, our joint venture partners may, as a result of financial or other difficulties or because of other reasons, be unable or unwilling to fulfill their obligations under the joint venture, such as contributing capital to expansion or maintenance projects or approving dividends or other distributions or payments to us. Any significant downturn or deteriorationcompetitiveness in the business, financial condition or results of operations of a joint venture could adversely affect our results of operations in a particular period. There can be no assurance that our joint ventures will be beneficial to us.marketplace.

Financial Risk Factors

Our business requiresand execution of our strategy require substantial expenditures for capital investments, debt service obligations, capital investments, operating leases and maintenance that we may be unable to fund.fund, which may require other actions to satisfy our obligations under our debt.

We have approximately $3.6$3.9 billion of total debt (see Note 17 to the Consolidated Financial Statements), including $600 million of outstanding borrowings under our Fifth Amended and Restated Credit Agreement and $393 million of outstanding borrowings under our USSK Credit Agreement.. If our cash flows and capital resources are insufficient to fund our planned capital expenditures or debt service obligations, we may face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, terminate strategic projects, or to dispose of material assets or operations or issue additional debt or equity. We may not be able to take such actions, if necessary, on commercially reasonable terms or at all. The Credit Facility Agreement, the documents governing the USSK Credit Facility, the documents governing the Big River Steel ABL Facility and Big River Steel notes, and the indentures governing our existing senior unsecured notes may restrict our ability to dispose of assets and may also restrict our ability to raise debt or equity capital to be used to repay other debt when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. Our inability to

generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results or operations and may place us at a competitive disadvantage with competitors who may have less indebtedness and other obligations or greater access to financing. In addition, the availability under our Credit Facility Agreement and Big River ABL Facility may be reduced if we have insufficient collateral, or if we do not meet a fixed charge coverage ratio test. Availability under the USSK Credit Agreement could be limited if USSK does not meet certain financial covenants.

Our ability to service or refinance our debt or fund investments and capital expenditures required to maintain or expand our business operations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control.control, such as inflation, rising interest rates, supply chain disruptions and the impacts of the war in Ukraine. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to satisfy our liquidity needs. In addition, the availability under certain of our Fifthdebt instruments may be limited if we do not meet certain financial covenants. Furthermore, the agreements governing the BRS ABL Facility and other outstanding indebtedness of Big River Steel LLC and its subsidiaries limit their ability, subject to certain exceptions, to pay dividends or distributions or make other restricted payments, such that we may not be able to access the cash generated by these subsidiaries to fund our other expenditures.

If we cannot make scheduled payments on our debt, we will be in default and holders of our senior unsecured notes could declare all outstanding principal and interest to be due and payable, the lenders under the Sixth Amended and Restated Credit Agreement, may be reduced if we have insufficient collateral, or if we do not meet a customary fixed charge coverage test. Availability under the USSK Credit AgreementFacility and the Export Credit Facility could terminate their commitments to loan money, accelerate full repayment of any or all amounts outstanding (which may result in the cross acceleration of certain of our other debt obligations) and the lenders could foreclose against the assets securing their borrowings and we could be limited if USSK does not meet certainforced into bankruptcy or liquidation. All of these events would materially and adversely affect our financial covenants. Seeposition and results of operations.

Furthermore, ratings agencies could downgrade our ratings either due to factors specific to our business, a prolonged cyclical downturn in the Liquidity sectionsteel industry, macroeconomic trends such as global or regional recessions and trends in "Item 7. Management's Discussioncredit and Analysis" and Note 17 tocapital markets more generally. Ratings agencies also may lower, suspend or withdraw ratings on the Consolidated Financial Statements for further details.outstanding securities of U. S. Steel or Big River Steel. Any lowering, suspension or withdrawal of such ratings may have an adverse effect on the market prices of such securities.

Our business and execution of our strategic priorities require us to raise capital which could be difficult if we face depressed market conditions, lower earnings or credit rating downgrades by ratings agencies.

Executing on our strategic priorities will require us to raise additional capital, which we may seek through debt financing or the public or private sale of debt or equity securities, or a combination of the foregoing. We cannot guarantee that we will be able to secure sources of financing at a particular time or on particular or favorable terms. Additionally, we may seek to raise funds through the divestiture or monetization of certain non-core assets. We cannot be assured that we will be able to find an attractive or acceptable partner for such transactions, or if we do, that we will be able to reach agreement on favorable or mutually satisfactory terms. Any decline in our operating results or downgrades in our credit ratings may make raising capital or entering into any business transaction more difficult, lead to reductions in the availability of credit or increased cost of credit, adversely affect the terms of future borrowings, and may limit our ability to take advantage of potential business opportunities.opportunities, may have an adverse effect on the terms under which we purchase goods and services, and lead to reductions in the availability of credit.

We have significant retiree health care, retiree life insurance and pension plan costs, which may negatively affect our results of operations and cash flows.

We maintain retiree health care and life insurance and defined benefit pension plans covering many of our domestic employees and former employees upon their retirement. Some of these benefit plans are not fully funded, and thus will require cash funding in future years. Minimum contributions to domestic qualified pension plans (other than contributions to the Steelworkers Pension Trust (SPT) described below) are regulated under the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act of 2006 (PPA).
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The level of cash funding for our defined benefit pension plans in future years depends upon various factors, including voluntary contributions that we may make, future pension plan asset performance, actual interest rates under the law, and the impactsimpact of business acquisitions or divestitures, union negotiated benefit changes and future government regulations, many of which are not within our control. In addition, assets held by the trusts for our pension plan and our trust for retiree health care and life insurance benefits are subject to the risks, uncertainties and variability of the financial markets. Future funding requirements could also be materially affected by differences between expected and actual returns on plan assets, actuarial data and assumptions relating to plan participants, the discount rate used to measure the pension obligations and changes to regulatory funding requirements. See "Item 7. Management's Discussion and Analysis"Analysis of Financial Condition and Results of Operations" and Note 18 to the Consolidated Financial Statements for a discussion of assumptions and further information associated with these benefit plans.

U. S. Steel contributes to a domestic multiemployer defined benefit pension plan, the SPT, for USW-represented employees formerly employed by National Steel and represented employees hired after May 2003. We have legal requirements for future funding of this plan should the SPT become significantly underfunded or we decide to withdraw from the plan. Either of these scenarios may negatively impact our future cash flows. The 20182022 Labor Agreements increased the contribution rate for most steelworker employees. Collectively bargained company contributions to the plan could increase further as a result of future changes agreed to by the Company and the USW.

The accounting treatment of goodwill, equity method investments and other long-lived assets could result in future asset impairments, which would reduce our earnings.


We periodically test our goodwill, equity method investments and other long-lived assets to determine whether their estimated fair value is less than their value recorded on our balance sheet. The results of this testing for potential impairment may be adversely affected by uncertain market conditions for the global steel industry and general economic conditions. If we determine that the fair value of any of these assets is less than the value recorded on our balance sheet, and, in the case of equity method investments the decline is other than temporary, we would likely incur a non-cash impairment loss that would negatively impact our results of operations. We have incurred asset impairment charges in recent years, including during the year ended December 31, 2022, and there can be no assurances that continued market dynamics or other factors may not result in future impairment charges.

We are subject to foreign currency risks, which may negatively impact our profitability and cash flows.

The financial condition and results of operations of USSE are reported in euros and then translated into U.S. dollars at the applicable exchange rate for inclusion in our financial statements. The appreciation of the U.S. dollar against the euro negatively affects our Consolidated Results of Operations. International cash requirements have been and in the future may be funded by intercompany loans, which may create intercompany monetary assets and liabilities in currencies other than the functional currencies of the entities involved, which can have a non-cash impact on income when they are remeasured at the end of each period. Procurement of equipment of announced strategic projects may be denominated in foreign currencies, which could adversely affect the costs of these projects.

In addition, foreign producers, including foreign producers of subsidized or unfairly traded steel with foreign currency denominated costs may gain additional competitive advantages or target our home markets if the U.S. dollar or euro exchange rates strengthen relative to those producers' currencies. Volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies could have a significant impact on our reported financial results and condition.

Financial regulatory frameworks introduced by U.S. and EU regulators may limit our financial flexibility or increase our costs.

We use swaps, forward contracts and similar agreements to mitigate our exposure to volatility, which entails a variety of risks. The Commodity Future Trading Commission’s Dodd Frank and the EU’s European Market Infrastructure Regulation and other government agencies' regulatory frameworks can limit the Company’s ability to hedge interest rate, foreign exchange (FX), or commodity pricing exposures, which could expose us to increased economic risk. These frameworks may introduce additional compliance costs or liquidity requirements. Some counterparties may cease hedging as a result of increased regulatory cost burdens, which in turn may reduce U. S. Steel’s ability to hedge its interest rate, FX or commodity exposures.

We are a party to various legal proceedings, the resolution of which could negatively affect our profitability and cash flows in a particular period.

We are involved at any given time in various litigation matters, including administrative and regulatory proceedings, governmental investigations, environmental matters and commercial disputes. Our profitability and cash flows in a particular period could be negatively affected by an adverse ruling or settlement in any legal proceeding or investigation that is pending against us or filed against us in the future.investigation. While we believe that we have taken appropriate actions to mitigate and reduceeffectively manage these risks, due to the nature of our operations, these risks will continue to exist and additional legal proceedings or investigations may arise from time to time.

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Additionally, we may be subject to product liability claims that may have an adverse effect on our financial position, results of operations and cash flows. Events such as well failures, line pipe leaks, blowouts, bursts, fires and product recalls could result in claims that our products or services were defective and caused death, personal injury, property damage or environmental pollution. The insurance we maintain may not be adequate, available to protect us in the event of a claim, or its coverage may be limited, canceled or otherwise terminated, or the amount of our insurance may be less than the related impact on our enterprise value after a loss. We establish reserves based on our assessment of contingencies, including contingencies for claims asserted against us in connection with litigation, arbitrations and environmental issues. Adverse developments in litigation, arbitrations, environmental issues or other legal proceedings may affect our assessment and estimates of the loss contingency recorded as a reserve and require us to make payments in excess of our reserves, which could negatively affect our operations, financial results and cash flows.See "Item 3. Legal Proceedings" and Note 26 to the Consolidated Financial Statements for further details.

Regulatory Risk Factors


Compliance with existing and new environmental regulations, environmental permitting and approval requirements may result in delays or other adverse impacts on planned projects, our results of operations and cash flows.

Steel producers in the U.S., along with their customers and suppliers, are subject to numerous federal, state and local laws and regulations relating to the protection of the environment. These laws and regulations concern the generation, storage, transportation, disposal, emission or discharge of pollutants, contaminants and hazardous substances into the environment, the reporting of such matters, and the general protection of public health and safety, natural resources, wildlife and the environment. Steel producers in the EU are subject to similar laws. These laws and regulations continue to evolve and are becoming increasingly stringent. The ultimate impact of complying with such laws and regulations is not always clearly known or determinable because regulations under some of these laws have not yet been promulgated or are undergoing revision. Additionally, compliance with certain of these laws and regulations, such as the CAA and similar state and local requirements, governing SO2 and otherair emissions, could result in substantially increased capital requirements and operating costs.costs and could change the equipment or facilities we operate. Compliance with current or future regulations could entail substantial costs for emission basedemission-based systems and could have a negative impact on our results of operations and cash flows. Failure to comply with the requirements may result in administrative, civil and criminal penalties, revocation of permits to conduct business or construct certain facilities, substantial fines or sanctions, enforcement actions (including orders limiting our operations or requiring corrective measures), natural resource damages claims, cleanup and closure costs, and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, environmental laws, regulations, codes and common law. The amount and timing of environmental expenditures is difficult to predict, and, in some cases, liability may be imposed without regard to contribution or to whether we knew of, or caused, the release of hazardous substances.


In addition, the Company must obtain, maintain and comply with numerous permits, leases, approvals, consents and certificates from various governmental authorities in connection with the construction and operation of new production facilities or modifications to existing facilities.facilities. In connection with such activities, the Company may need to make significant capital and operating expenditures to detect, repair and/or control air emissions, to control water discharges or to perform certain corrective actions to meet the conditions of the permits issued pursuant to applicable environmental laws and regulations.

There can be no assurance that future approvals, licenses and permits will be granted or that we will be able to maintain and renew the approvals, licenses and permits we currently hold. Failure to do so could have a material adverse effect on our results of operations and cash flows. Furthermore, compliance with the environmental permitting and approval requirements may be costly and time consuming and could result in delays or other adverse impacts on planned projects, our results of operations and cash flows.

We have significant environmental remediation costs that negatively affect our results of operations and cash flows.

Some of U. S. Steel's current and former facilities were in operation before 1900.many federal and state environmental regulations were in place. Hazardous materials associated with those facilities have been and may continue to be releasedencountered at current or former operating sites or delivered to sites operated by third parties.

U. S. Steel is involved in numerous remediation projects at currently operating facilities, facilities that have been closed or sold to unrelated parties and other sites where material generated by U. S. Steel was deposited. In addition, there are numerous other former operating or disposal sites that could become the subject ofto remediation, which may negatively affect our results of operations and cash flows.

Increasing pressure to reduceReducing greenhouse gas (GHG) emissions from steelmaking operations to meet corporate targets or comply with EUnew regulations as well as societalstakeholder expectations and mitigate potential physical impacts of climate change could significantly increase costs to manufacture future materials or reduce the amount of materials being manufactured.

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Iron and steel producers around the world are facing mounting pressure to reduce greenhouse gas emissions from operations. The majority of greenhouse gas emissions from the production of iron and steel are caused by the combustion of fossil fuels, the use of electrical energy, and the use of coal, lime, and iron ore as feedstock. The two main production processes are the integrated route of blast furnace ironmaking in combination with basic oxygen furnace steelmaking (BOF) and the alternative route of electric arc furnace steelmaking. Both routes generate greenhouse gas emissions with the latter process, involving the electric arc melting of a majority of steel scrap, generating less than half that or less, of the traditional integrated steelmaking process.


Federal, state and local governmental agencies within the United States may introduce regulatory changes in response to the potential impacts of climate change, including the introduction of carbon emissions limitations or trading mechanisms. Any such regulation regarding climate change and GHG emissions could impose significant costs on our operations and on the operations of our customers and suppliers, including increased energy, capital equipment, emissions controls, environmental monitoring and reporting and other costs in order to comply with current or future laws or regulations concerning climate change and GHG emissions. Any adopted future climate change and GHG regulations could negatively impact our ability, and that of our customers and suppliers, to compete with companies situated in areas not subject to or not complying with such limitations. Inconsistency of regulations may also change the attractiveness of the locations of some of the Company's assets and investments. In addition, changes in certain environmental regulations, including those that may impose output limitations or higher costs associated with climate change or greenhouse gas emissions, could substantially increase the cost of manufacturing and raw materials to us and other steel producers. For additional details, see “Part I – Item 1, Business – New and Emerging Environmental Regulations – United States and European Greenhouse Gas Emissions Regulations” above.

Additionally, the European Union has established aggressive CO2 reduction targets of 40%40 percent by 2030, against a 1990 baseline, and full carbon neutrality by 2050. As part of the European Green Deal the Commission proposed in September 2020 to raise the 2030 reduction target to at least 55 percent compared to 1990. The new target has yet to be endorsed by the European Parliament. An emission trading system (ETS) was established to encourage compliance with set emissions reduction targets. These aggressive targets require drastic measures within the steel industry to comply. The price of CO2 emission allowances is currently at 24 euro per metric ton and forecasts call for potential price increase to 40 euro per metric ton. The transition to EAF technology, as well as incremental gains in energy reduction, use of renewable energy, hydrogen-based steelmaking and continued asset and process improvements (including EAF steelmaking), are expected to reduce our GHG footprint. However, the development of breakthrough technologies areis likely required to continue the path of low to no carbon footprint in the steel industry. Implementation of new technologies will most likely require significant amounts of capital and an abundant source of low costlow-cost hydrogen and/or green power, most likely leading to an increase in the cost of future steelmaking. In addition, the cost of emission allowances is forecast to increase, along with the number of allowances decreasing in the next several years.The price of CO2 emission allowances was 81 euro per metric ton as of December 31, 2022 and forecasts call for potential prices exceeding 100 euro per metric ton in future years.

Our activitiesEnvironmental, social and governance matters may impact our business and reputation.

In addition to the changing rules and regulations related to environmental, social and governance (ESG) matters imposed by governmental and self-regulatory organizations such as the SEC and the New York Stock Exchange, a variety of third-party organizations and institutional investors evaluate the performance of companies on ESG topics, and the results of these assessments are widely publicized. These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. Reduced access to or increased cost of capital may occur as financial institutions and investors increase expectations related to ESG matters.

Developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards. We may also communicate certain initiatives and goals, regarding environmental matters, diversity, social investments and other ESG-related matters, in our SEC filings or in other public disclosures. These initiatives and goals within the scope of ESG could be difficult and expensive to implement, the technologies needed to implement them may not be cost effective and may not advance at a sufficient pace, and we could be criticized for the accuracy, adequacy or completeness of the disclosure. Furthermore, statements about our ESG-related initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to complex regulatorychange in the future. In addition, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions to these goals. If our ESG-related data, processes and compliance frameworks.

The needreporting are incomplete or inaccurate, or if we fail to complyachieve progress with complex laws and regulations that applyrespect to our international activities,goals, including but not limitedour previously announced commitments to reduce greenhouse gas emissions, within the Foreign Corrupt Practices Act, economic sanctions,scope of ESG on a timely basis, or at all, our reputation, business, financial performance and other import and export laws and regulations, may increase our cost of doing business and expose the Company and its employees to elevated risk. The Company's subsidiaries and joint ventures may face similar risks. Although we have implemented policies and processes designed to comply with these laws and regulations, failure by our employees, contractors, or agents to comply with these laws and regulations can result in possible administrative, civil, or criminal liability, as well as reputational harm to the Company and its employees.growth could be adversely affected.

New and changing data privacy laws and cross-border transfer requirements could have a negative impact on our business and operations.

Our business depends on the processing and transfer of data between our affiliated entities, to and from our business partners, and with third-party service providers, and of our employees, which may be subject to data privacy laws andand/or cross-border transfer restrictions. In North America and Europe, new legislation and changes to the requirements or applicability of existing laws, as well as evolving standards and judicial and regulatory interpretations of such laws, may impact U. S. Steel’s ability to effectively process and transfer data both within the United States and across borders in support of our business operations and/or keep pace with specific requirements regarding safeguarding and handling personal information. While U. S. Steel takes steps to comply with these legal requirements, non-compliance could lead to possible administrative, civil, or criminal liability, as well as
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reputational harm to the Company and its employees. For example, the European Union’s General Data Protection Regulation (GDPR), which went into effect in May 2018, created a range of new compliance obligations for subject companies and increases financial penalties for non-compliance. The costs of compliance with privacy laws such as the GDPR and the potential for fines and penalties in the event of a breach may have a negative impact on our business and operations.

Item 1B. UNRESOLVED STAFF COMMENTS

None.


Item 2. PROPERTIES

The following tables listSee Item 1. Business, Facilities and Locations for listings of U. S. Steel’s main properties, their locations and their products and services:
North American Operations
PropertySegmentLocationProducts and Services
Gary WorksFlat-RolledGary, IndianaSlabs; Sheets; Tin mill; Strip mill plate
  Midwest PlantFlat-RolledPortage, IndianaSheets; Tin mill
  East Chicago Tin(d)
Flat-RolledEast Chicago, IndianaSheets; Tin mill
Granite City Works(a)
Flat-RolledGranite City, IllinoisSlabs; Sheets
Great Lakes WorksFlat-RolledEcorse and River Rouge, MichiganSlabs; Sheets
  Great Lakes Works EGL at Dearborn(d)
Flat-RolledDearborn, MichiganGalvanized sheets
Mon Valley Works
  Irvin PlantFlat-RolledWest Mifflin, PennsylvaniaSheets
  Edgar Thomson PlantFlat-RolledBraddock, PennsylvaniaSlabs
  Fairless PlantFlat-RolledFairless Hills, PennsylvaniaGalvanized sheets
  Clairton PlantFlat-RolledClairton, PennsylvaniaCoke
Southern Coatings
  Fairfield SheetFlat-RolledFairfield, AlabamaGalvanized Sheets
  Double G Coatings Company, L.P.(b)
Flat-RolledJackson, Mississippi
Galvanized and Galvalume® sheets
Chrome Deposit Corporation(b)
Flat-RolledVariousRoll processing
Feralloy Processing Company(b)
Flat-RolledPortage, IndianaSteel processing
PRO-TEC Coating Company(b)
Flat-RolledLeipsic, OhioGalvanized and high strength annealed sheets
USS-POSCO Industries(b)
Flat-RolledPittsburg, CaliforniaSheets; Tin mill
Worthington Specialty Processing(b)
Flat-RolledJackson, Canton and Taylor, MichiganSteel processing
Keetac Iron Ore OperationsFlat-RolledKeewatin, MinnesotaIron ore pellets
Minntac Iron Ore OperationsFlat-RolledMt. Iron, MinnesotaIron ore pellets
Hibbing Taconite Company(b)
Flat-RolledHibbing, MinnesotaIron ore pellets
Fairfield Tubular OperationsTubularFairfield, AlabamaSeamless Tubular Pipe
Lorain Tubular OperationsTubularLorain, OhioSeamless Tubular Pipe
Lone Star TubularTubularLone Star, TexasWelded Tubular Pipe
Offshore OperationsTubularHouston, TexasTubular threading, inspection, accessories and storage services and premium connections
Tubular Processing(c)
TubularHouston, TexasTubular processing
Wheeling Machine ProductsTubularPine Bluff, Arkansas and Hughes Springs, TexasTubular couplings
Patriot Premium Threading Services(b)
TubularMidland, TexasTubular threading, accessories and premium connections
Transtar, LLCOther BusinessesAlabama, Indiana, Michigan, Ohio, Pennsylvania, Texas
Railroad operations

Big River Steel (b)
Other BusinessesOsceola, ArkansasSheets; Coated Sheets; Electrical
services.
(a)
Hot end idled in 2015, restarted in the 2nd quarter of 2018, (b) Equity investee, (c) Temporarily Idled & (d) Indefinitely Idled

PropertySegmentLocationProducts and Services
U. S. Steel KošiceUSSEKošice, SlovakiaSlabs; Sheets; Tin mill; Strip mill plate; Tubular; Coke; Refractories

U. S. Steel and its predecessors have owned their properties for many years with no material adverse title claims asserted. In the case of Great Lakes Works, Granite City Works, the Midwest Plant and Keetac iron ore operations, U. S. Steel or its subsidiaries are the beneficiaries of bankruptcy laws and orders providing that properties are held free and clear of past liens and liabilities. In addition, U. S. Steel or its predecessors obtained title insurance, local counsel opinions or similar protections when significant properties were initially acquired or since acquisition.

At the Midwest Plant in Indiana, U. S. Steel has a supply agreement for various utility services with a company that owns a cogeneration facility located on U. S. Steel property. The Midwest Plant agreement expires in 2028.

U. S. Steel leases its headquarters office space in Pittsburgh, Pennsylvania.

For property, plant and equipment additions, including finance leases, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, – Financial Condition, Cash FlowsLiquidity and Liquidity – Cash Flows”Capital Resources” and Note 13 to the Consolidated Financial Statements.

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Item 3. LEGAL PROCEEDINGS

Mining Properties

Summary Overview of Mining Operations

U. S. Steel isoperates two surface iron ore mining complexes in Minnesota consisting of the subjectMinntac Mine and Pellet Plant and the Keetac Mine and Pellet Plant, which are wholly owned by the Company. As of December 31, 2022, U. S. Steel owns a minority interest in the iron ore mining assets of Hibbing Taconite Company.

The following table provides a summary of the net book value of the land and PP&E at the Minntac and Keetac mines as of December 31, 2022:

GrossAccumulatedNet Book
(in millions)ValueDepreciationValue
Minntac Mine and Pellet Plant
Land$30 $— $30 
Other property, plant and equipment1,558 1,232 326 
Total$1,588 $1,232 $356 
Keetac Mine and Pellet Plant
Land$$— $
Other property, plant and equipment298 177 121 
Total$305 $177 $128 

The following table provides a summary of our mineral production by mining complex for each reportable period:

Iron Ore PelletsProduction
(Millions of short tons)202220212020
Iron Ore Pellets
Minntac Mine and Pellet Plant15.116.114.1
Keetac Mine and Pellet Plant5.96.02.0
Hibbing Taconite Company (1)
0.91.30.9
Total21.923.417.0
(1) Represents U. S. Steel's proportionate share of production as these investments are unconsolidated equity affiliates.

In accordance with Regulation S-K, Items 1300-1305, we engaged DRA Global and Barr Engineering Co. to provide feasibility studies and technical report summaries for our material mining operations at Minntac and Keetac in 2021. The majority shareholders of the Hibbing Taconite Company separately engaged qualified persons to perform the same procedures at the Hibbing Taconite Mine in 2021. Accordingly, the figures below for the Hibbing Taconite Mine were provided by the majority shareholders using the reports provided by the qualified persons. The tables showing resources and reserves by mining property were prepared using the results of the procedures performed by the qualified persons designated by each organization, which have no affiliation with or a partyinterest in our material mining properties.

Regulation S-K, Item 1302, requires registrants to a number of threatened or pending legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relatingfile the technical report summary as an exhibit to the environment, certain of which are discussedForm 10-K filing when disclosing for the first time mineral reserves or resources or when there has been a material change in the mineral reserves or resources since the last technical report summary filed for the properties. The Company did not have any material changes to its reserves or resources during 2022, nor is it disclosing any mineral reserves or resources for the first time. Accordingly, the technical report summary is not filed as an exhibit with the 2022 Form 10-K.

Minntac Mine and Pellet Plant

The Minntac Mine and Pellet Plant is located in Mountain Iron, Minnesota and is wholly owned and operated by U. S. Steel. On April 30, 2020, the Company granted Stelco Inc. (Stelco) a purchase option to acquire a 25 percent interest in the Minntac mining operations. The option can be exercised at any time before January 31, 2027. For more information regarding the purchase option, please see Note 2620 to the Consolidated Financial Statements. The ultimate resolutionMinntac Mine has 25,420 acres of these contingencies could, individually orsurface rights. The surface mine in the aggregate, be material toproduction stage whereby taconite iron ore is mined using the Truck-Shovel method. The mine is approximately 55 years old and has been operated by U. S. Steel financial statements. However, management believes thatsince 1967. For discussions regarding encumbrances, violations, fines, etc. related to the Minntac Mine, see Item 3. Legal Proceedings.

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x-20221231_g6.jpg

The following table provides details of our iron ore resources and reserves at Minntac for the year ended December 31, 2022. Resources below are stated exclusive of reserves.
Minntac Mine and Pellet Plant
AmountGrades/QualitiesCut-off GradesMetallurgical Recovery
(Millions of short tons)20222021Change (%)MagFe%Concentrate Silica %Min MagFe %Max Concentrate Silica %Weight Recovery %
Measured mineral resources— — — %— — — — — 
Indicated mineral resources251.00 251.00 — %18.20 5.5114.00 10.0023.65
Measured + indicated mineral resources251.00 251.00  %18.20 5.5114.00 10.0023.65
Inferred mineral resources149.10 149.10 — %18.05 6.2714.00 10.0022.50
Proven mineral reserves— — — %— — — — — 
Probable mineral reserves266.10 281.20 (5)%19.29 5.5914.00 10.0025.11
Total mineral reserves266.10 281.20 (5)%19.29 5.5914.00 10.0025.11

Keetac Mine and Pellet Plant

The Keetac Mine and Pellet Plant is located in Keewatin, Minnesota and is wholly owned and operated by U. S. Steel. The Keetac Mine has 18,020 acres of surface rights. The surface mine is in the production stage whereby taconite iron ore is mined using the Truck-Shovel method. The mine is approximately 55 years old and has been operated by U. S. Steel will remain a viablesince 2003, when it was acquired as part of the Company's purchase of National Steel Corporation. For discussions regarding encumbrances, violations, fines, etc. related to the Keetac Mine, see Item 3. Legal Proceedings.

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The following table provides details of our iron ore resources and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably to reserves at Keetac for the year ended December 31, 2022. Resources below are stated exclusive of reserves.
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Keetac Mine and Pellet Plant
AmountGrades/QualitiesCut-off GradesMetallurgical Recovery
(Millions of short tons)20222021Change (%)MagFe%Concentrate Silica %Min MagFe %Max Concentrate Silica %Weight Recovery %
Measured mineral resources— — — %— — — — — 
Indicated mineral resources192.90 192.90 — %18.93 3.40 14.00 9.00 27.34 
Measured + indicated mineral resources192.90 192.90  %18.93 3.40 14.00 9.00 27.34 
Inferred mineral resources160.50 160.50 — %18.83 3.81 14.00 9.00 27.30 
Proven mineral reserves— — — %— — — — — 
Probable mineral reserves179.30 185.20 (3)%19.29 3.57 14.00 9.00 20.97 
Total mineral reserves179.30 185.20 (3)%19.29 3.57 14.00 9.00 20.97 

Hibbing Taconite Mine

U. S. Steel.Steel maintains a minority interest in the Hibbing Taconite Mine, which is majority-owned by Cleveland-Cliffs, Inc. and located in Hibbing, Minnesota. The Hibbing Mine has 30,760 acres of surface rights, of which 1,150 acres are associated with mineral leases. The majority of the mineral rights are leased. 6,640 acres of mineral leases are expiring between 2023 and 2056. The taconite iron ore mine is currently in the production stage.

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The following table provides details of our proportionate share of iron ore resources and reserves at Hibbing for the year ended December 31, 2022. Resources below are stated exclusive of reserves.
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Hibbing Taconite Company (1)
AmountGrades/Qualities
(Millions of short tons)20222021Change (%)MagFe%
Measured mineral resources0.40 0.40 — %19.20 
Indicated mineral resources— — — %18.70 
Measured + indicated mineral resources0.40 0.40  %19.20 
Inferred mineral resources— — — %— 
Proven mineral reserves3.30 4.20 (21.43)%18.70 
Probable mineral reserves0.40 0.40 — %18.70 
Total mineral reserves3.70 4.60 (19.57)%18.70 
(1) Represents U. S. Steel’s proportionate share of proven and probable reserves and production as these investments are unconsolidated equity affiliates.

Internal Controls

U. S. Steel estimates its iron ore resources and reserves using exploration drill holes, physical inspections, sampling, laboratory testing, 3-D computer models, economic pit analysis and fully-developed pit designs for its operating mines. Estimates for our share of unconsolidated equity affiliates are based upon information supplied by the joint ventures. Refer to sections 2 and 3 of the technical report summaries filed as Exhibit 96.1 to our 2021 Form 10-K for further details.


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Item 3. LEGAL PROCEEDINGS

General Litigation

On April 11, 2017, there was a process waste water release at our Midwest Plant (Midwest)June 8, 2021, JSW Steel (USA) Inc. and JSW Steel USA Ohio, Inc. (collectively, JSW), U.S. based subsidiaries of Indian steelmaker JSW Steel, filed suit in Portage, Indiana, that impacted a water outfall that discharges to Burns Waterway near Lake Michigan.the United States District Court for the Southern District of Texas against Nucor, U. S. Steel, identifiedAK Steel Holding Group and Cleveland-Cliffs (collectively, the sourceJSW Defendants) alleging that the Defendants operated as a cartel and formed a conspiracy to boycott JSW from obtaining semi-finished steel slabs. JSW alleges that the JSW Defendants acted in violation of Section 1 of the release and made the necessary repairs. We determined that all repairs were safely working as intended and, on April 14, 2017, resumed operations in a controlled, phased and highly monitored approach with extensive input from participating government agencies. The Company has since implemented substantial operational, process and notification improvements at Midwest. The Company has been presented with cost reimbursements, loss of use and penalty requests from the involved governmental agencies. In January of 2018, The Surfrider FoundationSherman Act and the CityClayton Act (federal antitrust), and violation of Chicago initiated suitsthe Texas Free Enterprise and Antitrust Act. JSW also alleges that the JSW Defendants formed a civil conspiracy in violation of Texas common law, and that the JSW Defendants tortiously interfered with JSW’s business relationships. The basis for JSW’s allegations relate to the JSW Defendants participation in the Northern DistrictDOC's Section 232 process, including the JSW Defendants’ support of Indiana alleging Clean Water Act (CWA) and Permit violations at Midwest. On April 2, 2018, the U.S. EPAenactment of the President’s Section 232 proclamation, statements made by the JSW Defendants after the enactment of Section 232, and the StateJSW Defendants’ participation in the Section 232 exclusion process. Plaintiffs seek monetary damages including $45 million for payment of Indiana initiated a separate action against the CompanySection 232 tariffs and lodged a Consent Decree negotiated betweenunspecified amounts for financial penalties, termination fees and lost profits as well as other damages. U. S. Steel, andalong with the relevant governmental agencies consisting of all material terms to resolve the CWA and National Pollutant Discharge Elimination System violations at the Midwest Plant. A public comment period for the Consent Decree ensued. The suits that the Surfrider Foundation and the City of Chicago filed are currently stayed. The Surfrider Foundation and the City of Chicago also filed motions, which were granted, to intervene in the Consent Decree case. The United States Department of Justice (DOJ)other JSW Defendants, filed a revised Consent Decree andMotion to Dismiss the case on August 17, 2021. On February 17, 2022, the Court issued an opinion dismissing JSW’s antitrust complaint with prejudice. JSW filed a motiontimely notice of appeal with the Court to enter the Consent Decree as final on November 20, 2019. Surfrider Foundation, City of Chicago and other non-governmental organizations filed objections to the revised Consent Decree. The DOJ and U. S. Steel made filings in support of the revised Consent Decree.
On November 30, 2018, the Minnesota Pollution Control Agency (MPCA) issued a new Water Discharge Permit for the Minntac Tailings Basin waters. The Permit contains new sulfate limitations applicable to water in the Tailings Basin and groundwater flowing from U. S. Steel’s property. The MPCA also acted on the same date, denying the Company’s requests for variances from ground and surface water standards and request for a contested case hearing. U. S. Steel filed appeals with the MinnesotaUnited States Court of Appeals challenging the actions taken by the MPCA. Separate appeals were filed by a Minnesota Native American Tribe (Fond du Lac Band) and a nonprofit environmental group (Water Legacy).

All cases were consolidated. On December 9, 2019, the court issued a favorable ruling to U. S. Steel, removing the sulfate limitations for the Tailings BasinFifth Circuit. The matter is fully briefed and groundwater.is scheduled for oral argument at the Fifth Circuit in first quarter 2023. The opposing parties filed appeals withCompany continues to vigorously defend the Minnesota Supreme Court on January 8, 2020 which is currently being briefed.matter.

On October 2, 2017, an Amended Shareholder Class Action Complaint was filed in Federalthe United States District Court infor the Western District of Pennsylvania consolidating previously-filed actions. Separately, five related shareholder derivative lawsuits were filed in Statestate and Federalfederal courts in Pittsburgh, Pennsylvania and the Delaware Court of Chancery. The underlying consolidated class action lawsuit alleges that U. S. Steel, certain current and former officers, an upper levelupper-level manager of the Company and the financial underwriters who participated in the August 2016 secondary public offering of the Company's common stock (collectively, Defendants)the "Class Action Defendants") violated federal securities laws in making false statements and/or failing to discover and disclose material information regarding the financial condition of the Company. The lawsuit claims that this conduct caused a prospective class of plaintiffs to sustain damages during the period from January 27, 2016 to April 25, 2017 as a result of the prospective class purchasing the Company's common stock at artificially inflated prices and/or suffering losses when the price of the common stock dropped. The derivative lawsuits generally make the same allegations against the same officers and also allege that certain current and former members of the Board of Directors failed to exercise appropriate control and oversight over the Company and were unjustly compensated. The plaintiffs seek to recover losses that were allegedly sustained. The class actionClass Action Defendants moved to dismiss plaintiffs’ claims. On September 29, 2018 the Court ruled on those motions granting them in part and denying them in part. On March 18, 2019, the plaintiffs withdrew the claims against the Class Action Defendants related to the 2016 secondary offering. As a result, the underwriters are no longer parties to the case. The Company and the individual defendants are vigorously defending the remaining claims. On December 31, 2019, the Courtcourt granted Plaintiffs’the Plaintiffs' motion to certify the proceeding as a class action. The Company is pursuing anCompany's appeal of that decision.decision was denied. Discovery followed and concluded. On May 20, 2022, the Plaintiffs and Class Action Defendants agreed to settle the Shareholder Class Action in the amount of $40 million to be fully funded by the Company’s insurers. Court approval of the class action settlement is currently pending with a Final Approval Hearing set for March 20, 2023. The related derivative cases, which were previously stayed, are now proceeding and the Company will vigorously defend against the derivative lawsuits.


Asbestos Litigation

AsOn December 24, 2018, U. S. Steel's Clairton Plant experienced a fire, affecting portions of December 31, 2019,the facility involved in desulfurization of the coke oven gas generated during the coking process. With the desulfurization process out of operation as a result of the fire, U. S. Steel was a defendant in approximately 800 active cases involving approximately 2,390 plaintiffs. The vast majority of these cases involve multiple defendants. About 1,540, or approximately 65 percent, of these plaintiff claims are currently pending in jurisdictions whichnot able to certify compliance with Clairton Plant’s Title V permit filings with massive numbers of plaintiffs. As of December 31, 2018,levels for sulfur emissions. U. S. Steel promptly notified ACHD, which has regulatory jurisdiction for the Title V permit, and updated the ACHD regularly on efforts to mitigate any potential environmental impacts until the desulfurization process was a defendantreturned to normal operations. Of the approximately 2,400 hours between the date of the fire and April 4, 2019, when the Company resumed desulfurization, there were ten intermittent hours where average SO2 emissions exceeded the hourly NAAQS for SO2 at the Allegheny County regional air quality monitors located in approximately 755 cases involving approximately 2,320 plaintiffs. Based uponLiberty and North Braddock boroughs, which are near U. S. Steel’s experienceSteel's Mon Valley Works facilities. On April 29, 2019, PennEnvironment and Clean Air Council, both environmental, non-governmental organizations filed a Complaint in such cases, it believes that the actual number of plaintiffs who ultimately assert claims against U. S. Steel will likely be a small fraction of the total number of plaintiffs.

The following table shows the activity with respect to asbestos litigation:
Period ended Opening
Number
of Claims
 
Claims
Dismissed,
Settled
and Resolved
(a)
 New
Claims
 Closing
Number
of Claims
December 31, 2017 3,340 275 250 3,315
December 31, 2018 3,315 1,285 290 2,320
December 31, 2019 2,320 195 265 2,390
(a) The period ending December 31, 2018 includes approximately 1,000 dismissed cases previously pendingFederal Court in the StateWestern District of Texas.
Historically, asbestos-related claims against U. S. Steel fall into three groups: (1) claims made by persons who allegedly were exposed to asbestos onPennsylvania. The ACHD was subsequently granted intervenor status. Collectively the premises of U. S. Steel facilities; (2) claims made by persons allegedly exposed to products manufactured by U. S. Steel;parties seek injunctive relief and (3) claims made under certain federal and maritime laws by employees of former operations of U. S. Steel.

The amount U. S. Steel accrues for pending asbestos claims is not material to U. S. Steel’s financial condition. However, U. S. Steel is unable to estimate the ultimate outcome of asbestos-related claims due to a number of uncertainties, including: (1) the rates at which new claims are filed, (2) the number of and effect of bankruptcies of other companies traditionally defending asbestos claims, (3) uncertainties associated with the variations in the litigation process from jurisdiction to jurisdiction, (4) uncertaintiescivil penalties regarding the facts, circumstancesalleged Permit violations following the fire. Discovery has concluded. The court denied the parties’ respective Motions for Summary Judgment. A non-jury trial is currently scheduled to take place in April and disease process with each claim, and (5) any new legislation enactedMay of 2023. The Company will continue to address asbestos-related claims.

Further, U. S. Steel does not believe that an accrual for unasserted claims is required. At any given reporting date, it is probable that there are unasserted claims that will be filedvigorously defend against the Company in the future. In 2018matter.

Asbestos Litigation
See Note 26 to our Consolidated Financial Statements, Contingencies and 2019, the Company engaged an outside valuation consultant to assist in assessing its ability to estimate an accrualCommitments for unasserted claims.  This assessment was based on the Company's settlement experience, including recent claims trends.  The analysis focused on settlements made over the last several years as these claims are likely to best represent future claim characteristics.  After review by the valuation consultant and U. S. Steel management, it was determined that the Company could not estimate an accrual for unasserted claims. a description of our asbestos litigation.

Despite these uncertainties, management believes that the ultimate resolution of these matters will not have a material adverse effect on U. S. Steel’s financial condition.

ENVIRONMENTAL PROCEEDINGS

The following is a summary of the proceedings of U. S. Steel that were pending or contemplated as of December 31, 2019,2022, under federal and state environmental laws.laws, and which U. S. Steel reasonably believes may result in monetary sanctions of at
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least $1 million (the threshold chosen by U. S. Steel as permitted by Item 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended). Information about specific sites where U. S. Steel is or has been engaged in significant clean up or remediation activities is also summarized below. Except as described herein, it is not possible to accurately predict the ultimate outcome of these matters.

CERCLA Remediation Sites

Claims under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) have been raised with respect to the cleanup of various waste disposal and other sites. Under CERCLA, potentially responsible parties (PRPs)(each, a PRP) for a site include current owners and operators, past owners and operators at the time of disposal, persons who arranged for disposal of a hazardous substance at a site and persons who transported a hazardous substance to a site. CERCLA imposes strict and joint and several liabilities. Because of various factors, including the

ambiguity of the regulations, the difficulty of identifying the responsible parties for any particular site, the complexity of determining the relative liability among them, the uncertainty as to the most desirable remediation techniques, and the amount of damages and cleanup costs and the time period during which such costs may be incurred, we are unable to reasonably estimate U. S. Steel’s ultimate liabilities under CERCLA.

As of December 31, 2019,2022, U. S. Steel has received information requests or been identified as a PRP at a total of sevenfour CERCLA sites, three of which have liabilities that have not been resolved. Based on currently available information, which is in many cases preliminary and incomplete, management believes that U. S. Steel’s liability for CERCLA cleanup and remediation costs at the other four sitessite will be between $100,000 and $1 million for three of the sites, and over $5 million for one site as described below.

Duluth Works

The former U. S. Steel Duluth Works site was placed on the National Priorities List under CERCLA in 1983 and on the State of Minnesota’s Superfund list in 1984. Liability for environmental remediation at the site is governed by a Response Order by Consent executed with the MPCA in 1985 and a Record of Decision signed by MPCA in 1989. U. S. Steel has partnered with the Great Lakes National Program Office (GLNPO) of the U.S. EPA Region 5 to address contaminated sediments in the St. Louis River Estuary and several other Operable Unitsoperable units that could impact the Estuaryestuary if not addressed. An amendment to the Project Agreement between U. S. Steel and GLNPO was executed during the second quarter of 2018 to recognize the initial costs associated with implementing the first two phases of the proposed remedial plan at the site.

WhileRemediation contracts were issued by both USS and GLNPO for the first phase of the remedial work continues on completionat the site during the fourth quarter of 2020. USS and GLNPO have completed the second phase of work at the site which extended through early 2022. The final phase of the remedial design permitting and educating the public and key stakeholders on the details of the plan, there has been no material changedefined and another amendment to the Project Agreement between U.S. Steel and GLNPO was executed in the statusDecember 2021. Execution of the project during the twelve months ended December 31, 2019. Additional study, investigation,this final phase is in progress and is expected to extend through 2023. USS' portion of additional, design, oversight costs and implementation of U. S. Steel'sall three phases of the preferred remedial alternativesalternative on the upland property and Estuary are currently estimated as of December 31, 20192022 at approximately $45$22 million.

Resource Conservation Recovery Act (RCRA) and Other Remediation Sites

U. S. Steel may be liable for remediation costs under other environmental statutes, both federal and state, or where private parties are seeking to impose liability on U. S. Steel for remediation costs through discussions or litigation. There are 18nine such sites where remediation is being sought involving amounts in excess of $100,000.$1 million. Based on currently available information, which is in many cases preliminary and incomplete, management believes that liability for cleanup and remediation costs in connection with eight sites have potential costs between $100,000 and $1 million per site, five sites may involve remediation costs between $1 million and $5 million per site and fivefour sites are estimated to, or could have, costs for remediation, investigation, restoration or compensation in excess of $5 million per site.

For more information on the status of remediation activities at U. S. Steel’s significant sites, see the discussions related to each site below.

Gary Works

On October 23, 1998, the U.S. EPA issued a final Administrative Order on Consent (Order) addressing Corrective Action for Solid Waste Management Units (SWMU) throughout Gary Works. This Order requires U. S. Steel to perform a RCRA Facility Investigation (RFI), a Corrective Measures Study (CMS) and Corrective Measure Implementation. Evaluations are underway at six groundwater areas on the east side of the facility and it is likely that corrective measures will be required, but it is not possiblefacility. A remedial groundwater treatment system has been operating at this time to define a scope or estimate costs for what may be requiredone of the six areas since 2021. An Interim Stabilization Measure work plan was recently approved by the U.S. EPA.EPA for a second area and a contractor has begun installation of the remedial system. Until the remaining Phase I work and Phase II field investigations are completed, it is not possible to assess what additional expenditures will be necessary for Corrective Action projects at Gary Works. In total, the accrued liability for Corrective Action projects is approximately $25$28 million as of December 31, 2019,2022, based on our current estimate of known remaining costs. Significant additional costs associated with the six groundwater areas at this site are possible and are referenced in Note 26 to the Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”.

Geneva Works

At U. S. Steel’s former Geneva Works, liability for environmental remediation, including the closure of three hazardous waste impoundments and facility-wide corrective action, has been allocated between U. S. Steel and the current property owner pursuant to an agreement and a permit issued by the Utah Department of Environmental Quality

(UDEQ). Having completed the
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investigation on a majority of the remaining areas identified in the permit, U. S. Steel hashad determined the most effective means to address the remainingmajority of impacted material ismaterials was to manage those materials in a previously approved on-site Corrective Action Management Unit (CAMU). U. S. Steel awarded a contract for the implementation of the CAMU project during the fourth quarter of 2018. Construction, waste stabilization and placement along with closure of the CAMU are scheduled to be completewere substantially completed in the fourth quarter of 2020. U. S. Steel has an accrued liability of approximately $48$19 million as of December 31, 2019,2022, for our estimated share of the remaining costs of remediation.remediation at the site.

USS-UPI LLC (UPI)

In February 2020, U. S. Steel purchased the remaining 50 percent interest in USS-POSCO Industries, (UPI)

Aa former joint venture that is located in Pittsburg, California between subsidiaries of U. S. Steel and POSCO, now known as USS-UPI, LLC. Prior to formation of the joint venture, UPI's facilities were previously owned and operated solely by U. S. Steel, which retains primaryassumed responsibility for the existing environmental conditions. U. S. Steel continues to monitor the impacts of the remedial plan implemented in 2016 to address groundwater impacts from trichloroethylene at SWMU 4. Evaluations continue for the SWMUs, known as the Northern Boundary Group, and it is likely that corrective measures will be required, but it is not possible at this time to define a scope or estimate costs for what may be required by the California Department of Toxic Substances Control. As such, there has been no material change in the status of the project during the twelve months ended December 31, 2019.2022. As of December 31, 2019,2022, approximately $1 million has been accrued for ongoing environmental studies, investigations and remedy monitoring. Significant additional costs associated with this site are possible and are referenced in Note 26 to the Consolidated Financial Statements, “ContingenciesContingencies and Commitments, - Environmental Matters, - Remediation Projects, - Projects with Ongoing Study and Scope Development.

Fairfield Works

A consent decree was signed by U. S. Steel, the U.S EPA and the U.S. Department of Justice and filed with the United States District Court for the Northern District of Alabama (United States of America v. USX Corporation) in December 1997. In accordance with the consent decree, U. S. Steel initiated a RCRA corrective action program at the Fairfield Works facility. The Alabama Department of Environmental Management, with the approval of the U.S EPA, assumed primary responsibility for regulation and oversight of the RCRA corrective action program at Fairfield Works. While work continues on different aspects of the program, there has been no material change in the status of the project during the twelve months ended December 31, 2019. In total, the accrued liability for remaining work under the Corrective Action Program, was approximately $245,000 at December 31, 2019. Significant additional costs associated with this site are possible and are referenced in See Note 265 to the Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

Fairless Plant

In April 1993,for further details regarding U. S. Steel entered into a consent order with the U.S. EPA pursuant to RCRA, under which U. S. Steel would perform Interim Measures (IM), an RFI and CMS at our Fairless Plant. A Phase I RFI Final Report was submitted in SeptemberSteel's purchase of 1997. With U.S EPA’s agreement, in lieu of conducting subsequent phases of the RFI and the CMS, U. S. Steel has been working through the Pennsylvania Department of Environmental Protection Act 2 Program to characterize and remediate facility parcels for redevelopment. While work continues on these items, there has been no material change in the status of the project during the twelve months ended December 31, 2019. As of December 31, 2019, the accrued liability to maintain the interim measures, and clear properties through the Act 2 process is approximately $44,000. Significant additional costs associated with this site are possible and are referenced in Note 26 to the Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”UPI.


Lorain Tubular Operations

In September 2006, U. S. Steel and the Ohio Environmental Protection Agency (OEPA) commenced discussions about RCRA Corrective Action at Lorain Tubular Operations. A Phase I RFI on the identified SWMUs and Areas of Contamination was submitted in March 2012. While discussions continue with OEPA on drafting the Statement of Basis identifying potential remedies to address areas documented in the Phase II RFI, there has been no material change in the status of the project during the twelve months ended December 31, 2019. As of December 31, 2019, costs to complete additional projects are estimated to be approximately $79,000. Significant additional costs associated with this site are possible and are referenced in Note 26 to the Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

Joliet Works

The 50-acre parcel at the former Joliet Works is enrolled in the Illinois Environmental Protection Agency’s (IEPA) voluntary Site Remediation Program (the Program). The Program requires investigation and establishment of cleanup objectives followed by submission/approval of a Remedial Action Plan to meet those objectives. The 50-acre parcel was divided into four subareas with remedial activities completed in 2015 for three of the subareas. While work continues to define the requirements for further investigation of the remaining subarea, there has been no material change in the status of the project during the twelve months ended December 31, 2019. U. S. Steel has an accrued liability of $266,000 as of December 31, 2019. Significant additional costs associated with this site are possible and are referenced in Note 26 to the Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

Cherryvale, (KS)KS Zinc

In April 2003, U. S. Steel and Salomon Smith Barney Holdings, Inc. (SSB) entered into a Consent Order with the Kansas Department of Health & Environment (KDHE) concerning a former zinc smelting operation in Cherryvale, Kansas. Remediation of the site proper was essentially completed in 2007. The Consent Order was amended on May 3, 2013 to require investigation (but not remediation) of potential contamination beyond the boundary of the former zinc smelting operation. On November 22, 2016, KDHE approved a State Cooperative Final Agency Decision Statement that identified the remedy selected to address potential contamination beyond the boundary of the former zinc smelting site. The Removal Action Design Plan was approved during the second quarter of 2018. The Waste Deposition Area design and the Interim Risk Management Plan (which includes institutional controls) were approved by KDHE during the fourth quarter of 2018. An amended consent order for remediation was signed in May 2019 and a remediation contract was executed in June 2019. Remediation work was substantially completed in the 4th quarter of 2022. U. S. Steel has an accrued liability of approximately $10 million$908,000 as of December 31, 2019,2022, for our estimated share of the remaining cost of remediation.


SouthFairfield Works

On August 29, 2017,A consent decree was signed by U. S. Steel, was notified bythe U.S EPA and the U.S. Coast GuardDepartment of a sheen onJustice and filed with the waterUnited States District Court for the Northern District of Alabama (United States of America v. USX Corporation) in December 1997. In accordance with the North Vessel Slip at our former South Works in Chicago, Illinois.consent decree, U. S. Steel initiated a RCRA corrective action program at the Fairfield Works facility. The Alabama Department of Environmental Management, with the approval of the U.S. EPA, assumed primary responsibility for regulation and oversight of the RCRA corrective action program at Fairfield Works. While work continues on different aspects of the program, there has been working withno material change in the IEPA under their voluntary Site Remediation Program since 1993 to evaluate the conditionstatus of the property includingproject during the North Vessel Slip. The result ofyear ended December 31, 2022. In total, the accrued liability for remaining work under the Corrective Action Program, was approximately $377,000 at December 31, 2022. Significant additional costs associated with this cooperative effort has been the issuance of a series of “No Further Remediation” (NFR) notices to U. S. Steel including one specificsite are possible and are referenced in Note 26 to the North Vessel Slip. U. S. Steel has notified the IEPA of the potential changed conditionConsolidated Financial Statements “Contingencies and is working closelyCommitments, Environmental Matters, Remediation Projects, Projects with the IEPAOngoing Study and the U. S. Coast Guard to determine the source of the sheen and options to address the issue. U. S. Steel has an accrued liability of $174,000 as of December 31, 2019.Scope Development.”

Air Related Matters

Great Lakes Works

In June 2010, the EPA significantly lowered the primary (NAAQS) for SO2 from 140 ppb on a 24-hour basis to an hourly standard of 75 ppb. Based upon the 2009-2011 ambient air monitoring data, the U.S. EPA designated the area in which Great Lakes Works is located as nonattainment with the 2010 SO2 NAAQS.

As a result, pursuant to the CAA, the Michigan Department of Environment, Great Lakes and Energy (EGLE) was required to submit a SIP to the U.S. EPA that demonstrates that the entire nonattainment area (and not just the monitor) would be in attainment by October 2018 by using conservative air dispersion modeling. To develop the SIP, U. S. Steel

met with EGLE on multiple occasions and had offered reduction plans to EGLE but the parties could not agree to a plan. EGLE, instead promulgated Rule 430 which was solely directed at U. S. Steel. The Company challenged Rule 430 before the Michigan Court of Claims who by Order dated October 4, 2017, granted the Company’s motion for summary disposition voiding Rule 430 finding that it violated rule-making provisions of the Michigan Administrative Procedures Act and Michigan Constitution. Since Rule 430 has been invalidated and EGLE's SIP has not been approved, U.S. EPA has indicated that it would promulgate a Federal Implementation Plan (FIP) pursuant to its obligations and authority under the CAA. Because development of the FIP is in the early stages, the impacts of the nonattainment designation to the Company are not estimable at this time.

On January 17, 2019, U. S. Steel and EGLE met to discuss resolution of violations that were alleged to have occurred intermittently in 2017 and 2018 regarding opacity from: the D4 Blast Furnace slag pit, D4 Blast Furnace backdraft stack, B2 Blast Furnace casthouse roof monitor, B2 Blast Furnace backdraft stack, and Basic Oxygen Furnace Shop Roof Monitor; and exceedances of applicable limits at the pickle line. More recently, EGLE advised U. S. Steel that it was assessing a civil penalty of approximately $380,000 for these alleged violations. U. S. Steel and EGLE continue to negotiate resolution.

Granite City Works

In October 2015, Granite City Works received a Violation Notice from IEPAIllinois Environmental Protection Agency (IEPA) in which the IEPA alleges that U. S. Steel violated the emission limits for nitrogen oxides (NOx) and volatile organic compounds from the Basic Oxygen Furnace Electrostatic Precipitator Stack. In addition, the IEPA alleges that U. S. Steel exceeded its natural gas usage limit at its CoGeneration Boiler. U. S. Steel responded to the notice and is currently discussing resolution of the matter with IEPA.

Although discussions with IEPA regarding the foregoing alleged violations are ongoing and the resolution of these matters is uncertain at this time, it is not anticipated that the result of those discussions will be material to U. S. Steel.

Minnesota Ore Operations

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On February 6, 2013, the U.S. EPA published a FIP that applies to taconite facilities in Minnesota. The FIP establishes and requires emission limits and the use of low NOx reduction technology on indurating furnaces as Best Available Retrofit Technology (BART). While U. S. Steel installed low NOx burners on three furnaces at Minntac and is currently obligated to install low NOx burners on the two other furnaces at Minntac pursuant to existing agreements and permits, the rule would require the installation of a low NOx burner on the one furnace at Keetac for which U. S. Steel did not have an otherwise existing obligation. U. S. Steel estimates expenditures associated with the installation of low NOx burners of as much as $25 million to $30 million. In 2013, U. S. Steel filed a petition for administrative reconsideration to the U.S. EPA and a petition for judicial review of the 2013 FIP and denial of the Minnesota SIPState Implementation Plan (SIP) to the Eighth Circuit. In April 2016, the U.S. EPA promulgated a revised FIP with the same substantive requirements for U. S. Steel. In June 2016, U. S. Steel filed a petition for administrative reconsideration of the 2016 FIP to the U.S. EPA and a petition for judicial review of the 2016 FIP before the Eighth Circuit Court of Appeals. While the proceedings regarding the petition for judicial review of the 2013 FIP remained stayed, oral arguments regarding the petition for judicial review of the 2016 FIP were heard by the Eighth Circuit Court of Appeals on November 15, 2017. Thus, both petitions for judicial review remain with the Eighth Circuit. On December 4, 2017, the U.S. EPA published a notification in the Federal Register in which the U.S. EPA denied U. S. Steel’s administrative petitions for reconsideration and stay of the 2013 FIP and 2016 FIP. On February 1, 2018, U. S. Steel filed a petition for judicial review of the U.S. EPA’s denial of the administrative petitions for reconsideration to the Eighth Circuit Court of Appeals. The U.S. EPA and U. S. Steel reached a settlement regarding the five indurating lines at Minntac. Notice ofAfter proposing a 30-day comment period ofrevised FIP and responding to public comments, on March 2, 2021, the settlement agreement was published inU.S. EPA promulgated a final revised FIP incorporating the September 11, 2019, Federal Register. The comment period expired on October 11, 2019.conditions and limits for Minntac to which the parties agreed. U. S. Steel will work with U.S. EPA to address any comments. U. S. Steel and the U.S. EPA continue to negotiate resolution for Keetac.

Mon Valley Works

On November 9, 2017, the U.S. EPA Region III and the Allegheny County Health Department (ACHD)ACHD jointly issued a Notice of Violation (NOV) regarding the Company’s Edgar Thomson facility in Braddock, PA.Pennsylvania. In addition, on November 20, 2017, ACHD issued a separate, but related, NOV to the Company regarding the Edgar Thomson facility. In the NOVs, based upon their inspections and review of documents collected, throughout the last two years, the agencies allege that the Company has violated the CAA by exceeding the allowable visible emission standards from certain operations during isolated events. In addition, the agencies allege that the Company has violated certain maintenance,

reporting, and recordkeeping requirements. U. S. Steel met with the U.S. EPA Region III and ACHD several times. ACHD,On May 17, 2022, the United States Department of Justice (the DOJ), the U.S. EPA Region III and the ACHD filed a Complaint in the United States District Court for the Western District of Pennsylvania and lodged a proposed Consent Decree negotiated in good faith between U. S. Steel, continueDOJ, the U.S. EPA Region III and ACHD that will resolve this matter. On December 16, 2022, the Court approved the Consent Decree and it is currently in effect.

On March 2, 2022, the Company received a stipulated penalty demand for $0.9 million from the Allegheny County Health Department (ACHD) pursuant to negotiatethe June 2019 Settlement Agreement and Order (SAO) between the Company and ACHD. In the demand notice, ACHD alleges that based upon daily visible emission observation inspections occurring April 1, 2021 through December 31, 2021, the Company’s Clairton plant violated applicable opacity standards from coke battery fugitive emission sources. The Company disagrees with the bases for the demand. The Company has initiated dispute resolution in accordance with the SAO and is attempting to reach a potentialnegotiated resolution of the matter.

On June 27, 2019, U. S. Steel and ACHD entered into a Settlement Agreement that is now in effect resolving four appeals of four separate Enforcement Orders issued byMarch 7, 2022, the Company received an enforcement order from the ACHD in 2018 and 2019. A comment period expired on July 31, 2019 after a public hearing that was held on July 30, 2019. The Settlement Agreement requires that U. S. Steel payincludes a civil penalty demand for $1.8 million. In the Order, the ACHD alleges that the Company’s Clairton plant is solely and create a Community Benefit Trust totaling $2,732,504, with 90% of this value going into the trust; and 10% going into ACHD’s Clean Air Fund. In addition, U. S. Steel agreed to complete several actions which are aimed at reducing emissions including: complete refractory repairs on Batteries 1, 2, 3 and 15; enhance trainingentirely culpable for certain coke plant employees; have third-party audits conducted; complete projects on B Battery to reduce the potential for fugitive emissions, and complete upgrades on the Pushing Emission Control devices for Batteries 13-15; and 19-20. U. S. Steel is working with ACHD in responding to comments.

On December 24, 2018, U. S. Steel's Clairton Plant experienced a fire, affecting portions153 alleged exceedances of the facility involved in desulfurization ofPennsylvania hydrogen sulfide ambient air standard that are reported to have occurred during January 1, 2020 through March 1, 2022. The Company disagrees with the coke oven gas generated during the coking process. With the desulfurization process out of operation as a result of the fire, U. S. Steel was not able to certify compliance with Clairton Plant’s Title V permit levels for sulfur emissions. U. S. Steel promptly notified ACHD, which has regulatory jurisdictionbases for the Title V permit, and updated the ACHD regularly on our efforts to mitigate any potential environmental impacts until the desulfurization process was returned to normal operations. Of the approximately 2,400 hours between the date of the fire anddemand. On April 4, 2019, when5, 2022, the Company resumed desulfurization, there were ten intermittent hours where average SO2 emissions exceededappealed the hourly NAAQS for SO2 at the Allegheny County regional air quality monitors located in LibertyOrder and North Braddock boroughs which are near U. S. Steel's Mon Valley Works facilities. On February 13, 2019, PennEnvironment and Clean Air Council, both environmental, non-governmental organizations, sent U. S. Steel a 60-day notice of intent to sue letter pursuant to the CAA. The letter alleges Title V permit violations at the Clairton, Irvin, and Edgar Thomson facilities as a result of the December 24, 2018 Clairton Plant fire. The 60-day notice letter also alleged that the violations caused adverse public health and welfare impacts to the communities surrounding the Clairton, Irvin, and Edgar Thomson facilities. PennEnvironment and Clean Air Council subsequently filed a Complaint in Federal Court in the Western District of Pennsylvania on April 29, 2019 to which U. S. Steel has responded. On May 3, 2019, ACHD filed a motion to intervene in the lawsuit which was granted by the Court. On June 25, 2019, ACHD filed its Complaint in Intervention, seeking injunctive relief and civil penalties regarding the alleged Permit violations following the December 24, 2018 fire. The parties are currently engaged in discovery.

Following up to its May 2, 2019, notice of intent to sue U. S. Steel, on August 26, 2019 the Environmental Integrity Project, the Breathe Project and Clean Air Council, environmental, non-governmental organizations, filed a complaint in the Western District Court of Pennsylvania alleging that the Company did not report releases of reportable quantities of hydrogen sulfide, benzene, and coke oven emissions from the Clairton, Edgar Thomson and Irvin facilities as would be required under CERCLA because of the fire. The Company will vigorously defend against these claims.

On April 24, 2019, U. S. Steel was served with a class action complaint that was filed in the Allegheny Court of Common Pleas related to the December 24, 2018 fire at Clairton. The complaint asserts common law nuisance and negligence claims and seeks compensatory and punitive damages that allegedly were the result of U. S. Steel's conduct that resulted in the fire and U. S. Steel's operations subsequent to the fire. The parties are currently engaged in discovery. U. S. Steel is vigorously defending the matter. On September 1, 2022, after conferring with ACHD and the Company, the ACHD Hearing Officer issued an order requiring discovery to be completed by June 1, 2023 with a hearing date of September 18, 2023.


On March 24, 2022, the Company received an enforcement order from the ACHD that includes a civil penalty demand for $4.6 million for alleged air permit violations occurring between January 1, 2020 through March 15, 2022 regarding the Company’s Clairton plant’s coke oven pushing emission control systems. The Company disagrees with the bases for the demand and has appealed the Order. On September 1, 2022, after conferring with ACHD and the Company, the ACHD Hearing Officer issued an order requiring discovery to be completed by June 1, 2023 with a hearing date of September 25, 2023.


Item 4. MINE SAFETY DISCLOSURE

The information concerning mine safety violations and other regulatory matters required by Section 1501503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-K.


INFORMATION ABOUT OUR EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of U. S. Steel and their ages as of February 1, 2020,2023, are as follows:

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NameAgeAgeTitleTitle
Executive Officer

Since
Christine S. BrevesDaniel R. Brown5063Senior Vice President - Advanced Technology Steelmaking & Chief FinancialOperating Officer, Big River Steel WorksApril 27, 2017February 1, 2022
James E. Bruno5754Senior Vice President - European Solutions and President - USSKDecember 1, 2014
Scott D. Buckiso5552Senior Vice President and Chief Manufacturing Officer North American Flat-RolledMay 31, 2015
David B. Burritt6764President & Chief Executive OfficerSeptember 1, 2013
Kimberly D. Fast46Acting ControllerApril 1, 2019
Richard L. Fruehauf5552Senior Vice President - Strategic Planning and Chief Strategy and Development& Sustainability OfficerMarch 1, 2019
Jessica T. Graziano49Senior Vice President & Chief Financial OfficerAugust 8, 2022
Manpreet S. Grewal43Vice President, Controller & Chief Accounting OfficerMarch 30, 2020
Duane D. Holloway5047Senior Vice President, General Counsel and Chief Ethics & Compliance Officer and Corporate SecretaryApril 16, 2018
Douglas R. MatthewsKenneth E. Jaycox5554Senior Vice President and Chief Commercial and Technology Officer Tubular and Mining SolutionsJuly 2, 2012
A. Barry Melnkovic62Senior Vice President and Chief Human Resources OfficerMarch 1, 2018September 28, 2020

Messrs. Brown, Bruno, Buckiso, Burritt Bruno and Matthews and Ms. BrevesFruehauf have held responsible management or professional positions with U. S. Steel or its subsidiaries for more than the past five years. Ms. Fast joinedPrior to joining U. S. Steel in 20072022, Ms. Graziano spent eight years with United Rentals, Inc, culminating in her position as manager - external reporting,Executive Vice President and progressedChief Financial Officer. Prior to her work with United Rentals, Ms. Graziano spent five years at Revlon, Inc. where she advanced through rolespositions of increasing responsibility beforeculminating in her being named assistant corporate controller in December 2014. She was named Acting ControllerSenior Vice President, Chief Accounting Officer and the Company’s principal accounting officer on April 1, 2019. Mr. Fruehauf joinedCorporate Controller. Prior to joining U. S. Steel in September 20142020, Mr. Jaycox served as assistant general counsel - commercial andVice President, Transformation at Sysco Corporation where during his seven-year tenure, he progressed through rolesa series of increasing responsibilityexecutive responsibilities including transformation, sales development and support, and revenue management. Prior to joining U. S. Steel in the legal department, ultimately being named Interim General Counsel in December 2017. He was named2020, Mr. Grewal served as vice president, - strategicbusiness finance, controller and chief accounting officer at Covanta since February 2017. Prior to Covanta, Mr. Grewal spent fourteen years at Johnson Controls Incorporated (formerly Tyco International) in increasingly responsible roles, including internal audit, accounting, controllership, and financial planning and corporate development in April 2018 and advanced to senior vice president in March 2019. Effective January 1, 2020, he has been appointed senior vice president - strategic planning and chief strategy & development officer.analysis. Prior to joining U. S. Steel in 2018, Mr. Holloway served as executive vice president and general counsel at Ascena Retail Group Inc., the largest women’s specialty retail and fashion company in the U.S. During his time at Ascena, Mr. Holloway served as global chief legal, compliance, sustainability and diversity officer. Prior to his work at Ascena, Mr. Holloway served as vice president and deputy general counsel for CoreLogic Inc., the leading global residential property information, analytics and data-enabled solutions provider. Prior to joining CoreLogic, Mr. Holloway spent nine years at Caesars Entertainment Corp., where he progressed through increasingly responsible roles in the legal department before being named senior vice president and chief counsel, operations and litigation. Prior to joining U. S. Steel in 2017, Mr. Melnkovic served as executive vice president and chief human capital officer, labor relations, diversity and lean enterprise solutions for National Railroad Passenger Corporation / Amtrak. Prior to joining Amtrak, Mr. Melnkovic served as the top human resources leader at Lilly Industries, Motor Coach Industries and Holland America Line. He also held senior corporate leadership and officer roles at Owens Corning, including vice president - human resources, vice president - talent management and organizational effectiveness, and interim chief operating officer for one of the company’s business units.



PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock Information

The principal market on which United States Steel Corporation (U. S. Steel) common stock is traded is the New York Stock Exchange, where the common stock trades under trading symbol "X". U. S. Steel common stock is also traded on the Chicago Stock Exchange under the symbol "X".

As of February 10, 2020,January 30, 2023, there were 12,04810,657 registered holders of U. S. Steel common stock.

The Board of Directors currently intends to declare and pay dividends on shares of U. S. Steel common stock based on the financial condition and results of operations of U. S. Steel out of legally available funds and in accordance with the requirements set forth by applicable law. Quarterly dividends were declared by U. S. Steel in 2019 and 20182022 in the amount of $0.05five cents per share. In December 2019Quarterly dividends were declared by U. S. Steel in 2021 in the Company announced a change in its dividend policy, that it intends to reduce its quarterly dividend to $0.01amount of one cent per share beginning in 2020.the first, second and third quarters and five cents per share in the fourth quarter.

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Purchases of Equity Securities by the Issuer and the Affiliated Purchasers

On November 1, 2018,October 25, 2021, the Company announced that its Board of Directors authorized a share repurchase program that allowed for the repurchase of up to $300 million of its outstanding common stock from time to time in the open market or privately negotiated transactions. On January 24, 2022 the Board of Directors authorized an additional $500 million under the share repurchase program.

On July 25, 2022, following the completion of the previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program that allows for the repurchase of up to $500 million of its outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.

Approximately $50 million of common stock was repurchased in January 2023, and there is currently approximately $251 million remaining under the current authorizations.

Share repurchase activity under the Company's stock repurchase authorization during the three months ended December 31, 2022 was as follows:

PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs in effect at December 31, 2022 (a)
October 1 - 31, 2022— $— — $451,000,800 
November 1 - 30, 20222,243,200 $24.61 2,243,200 $395,788,300 
December 1 - 31, 20223,673,509 $25.80 3,673,509 $301,000,800 
Quarter ended December 31, 20225,916,709 $25.35 5,916,709 $301,000,800 
(a) On October 25, 2021, the Board of Directors authorized a share repurchase program to repurchase up to $300 million of itsour outstanding common stock over a two-year period at the discretion of management,management. On January 24, 2022 the Board of which $163Directors authorized an additional $500 million was utilized. There wereunder the share repurchase program. Each of the repurchase programs have no stock repurchases duringexpiration date. On July 25, 2022, following the fourth quartercompletion of 2019 and on December 19, 2019 U. S. Steel announcedthe previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program that it formally terminated this program.allows for the repurchase of up to $500 million of its outstanding common stock. The Company’s stockshare repurchase program diddoes not obligate it to acquire any specific number of shares. Under this program, the shares werewill be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending upon market conditions. The repurchase program has no expiration date.


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Stockholder Return Performance

The graph below assumes $100 invested on December 31, 2017 and compares the yearly change in cumulative total stockholder return of our common stock with the cumulative total return of the Standard & Poor’s (S&P’s)&P) 500 Stock Index and the S&P 600 Steel Index.Index, and assumes that all dividends were reinvested.

Comparison of Cumulative Total Return
on $100 Invested in U. S. Steel Stock on December 31, 20142017
vs
S&P 500 and S&P 600 Steel Index(a)
chart-feb8f38db32757e0a4a.jpg
(a) U. S. Steel was removed from the S&P 500 Index effective July 1, 2014. Consequently, U. S. Steel is now part of the S&P 600 Steel Index instead of the S&P 500 Steel Index, which is a subset of the S&P 500. Therefore, current year results may not be comparable to prior years.

x-20221231_g9.jpg
For information on securities authorized for issuance under our equity compensation plans, see "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."

Unregistered Sales of Equity Securities

On November 18, 2019,U. S. Steel had no sales of unregistered equity securities during the Company issued Performance Share Awards (“PSUs”) with an aggregate grant-date fair market value of approximately $425,000 to certain employees of Big River Steel (“Big River Steel Employees”). The PSUs were issued as consideration for entry into a retention agreement between the Company and the Big River Steel Employees.  Generally, all of the PSUs will vest and be settled in shares of the Company’s common stock (or cash equivalent to the value of the common stock) upon the earlier of (i) the Company’s acquisition of full ownership of Big River Steel or (ii) December 29, 2023 (either occurrence of subclause (i) or subclause (ii), the “Vesting Date”), subject to the recipient’s continued service with the Company through the Vesting Date. If the recipient is terminated without cause and a Vesting Date occurs within six months after the date of such termination, then all of the PSUs will vest.  The issuance of the PSUs was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption providedperiod covered by Rule 506 of Regulation D and/or Section 4(a)(2), based on representations and warranties provided by the recipients of the PSUs.this report.




Item 6. SELECTED FINANCIAL DATARESERVED

Dollars in millions (except per share data)(a)
 2019 2018 2017 2016 2015
Statement of Operations Data:          
Net sales $12,937
 $14,178
 $12,250
 $10,261
 $11,574
(Loss) earnings before interest and income taxes (b)
 (230) 1,124
 669
 (201) (1,142)
(Loss) net earnings attributable to United States Steel Corporation (630) 1,115
 387
 (440) (1,642)
Per Common Share Data:          
(Loss) net earnings attributable to United States Steel Corporation(c)
          
                                                                          – basic (3.67) 6.31
 2.21
 $(2.81) $(11.24)
                                                                          – diluted (3.67) 6.25
 2.19
 (2.81) (11.24)
Dividends per share declared and paid 0.20
 0.20
 0.20
 0.20
 0.20
Balance Sheet Data – December 31:          
Total assets (d)
 $11,608
 $10,982
 $9,862
 $9,160
 $9,167
Capitalization:          
Debt (d)
 $3,641
 $2,381
 $2,703
 $3,031
 $3,138
United States Steel Corporation stockholders’ equity $4,092
 4,202
 3,320
 2,274
 2,436
Total capitalization $7,733
 $6,583
 $6,023
 $5,305
 $5,574
(a)For discussion of changes between the years, see Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations."
(b)
2015, 2016 and 2017 amounts have been adjusted as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018.
(c)See Note 8 to the Consolidated Financial Statements for the basis of calculating earnings per share.
(d)
2015 amounts have been adjusted to retroactively adopt Accounting Standards Update 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability.



Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notesNotes that appear elsewhere in this document. Please refer to Item 7 of our 20182021 Form 10-K for further discussion and analysis of our 20172020 financial condition and results of operations.

Overview

According to World Steel Association’s latest published statistics, U. S. Steel was the twenty-sixth largest steel producer2022 marked our second-best financial year in the world in 2018. Also in 2018 according to World Steel Association’s latest published statistics, U. S. Steel was the third largest steel producer in the United States. U. S. Steel has a broad and diverse mix of products and customers. We use iron ore, coal, coke, steel scrap, zinc, tin, and other metallic additions to produce a wide range of flat-rolled and tubular steel products, concentrating on value-added steel products for customersCompany's history with demanding technical applications in the transportation, appliance, container, industrial machinery, construction and oil, gas, and petrochemical industries. In addition to our facilities in the United States, U. S. Steel has significant operations in Eastern Europe through U. S. Steel Košice (USSK), located in Slovakia.

We are proud to report the following accomplishments achieved in 2019:

Set a safety performance record with a 2019 Days Away from Work rate of 0.10, which is seven times better than the industry average reported by the U.S. Bureau of Labor Statistics.

Articulating and executing on the transformative 'best of both" strategy, including acquiring a 49.9% interest in Big River Steel with an option to acquire the remaining 50.1% within four years and beginning process of constructing a world-class endless casting and rolling line at Mon Valley Works.

Positive operating cash flow of $682 million in 2019.

Strong year-end liquidity of approximately $2.3 billion, including $749 million of cash, to support thecontinued execution of our strategy.

Successfully raised approximately $1.1 billion in incremental capital through debt offerings Each of our operating segments contributed meaningfully to 2022's success, while delivering record safety performance and an increasestrong operational excellence, quality, and reliability for our customers. We continued to invest in our U.S. credit facilityfuture by $500 million, providing for future financial flexibility.progressing on key strategic projects and we also rewarded stockholders in 2022 with direct returns, including a quarterly dividend and share repurchases. In the second half of 2022, we quickly responded to changing market dynamics by temporarily idling certain operations to better balance steel supply with customer demand.

Continued executing investmentsU. S. Steel's results in our assets, including strategic investments in the electric arc furnace at Fairfield Tubular Operations, Gary Works hot strip mill upgrades and the dynamo line at USSE.

Announced industry-leading GHG emissions intensity reduction goal aligned to our strategy.

Named2022 compared to the Forbes Global 2000 World’s Best Employers listprevious year for 2019.the four reportable segments, except for Tubular Products (Tubular), generally declined from challenging business conditions:

Awarded a perfect "100" score on the Human Rights Campaign Corporate Equality Index.
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North American Flat-Rolled (Flat-Rolled): Flat-Rolled results declined primarily due to lower sales volume across most consumer and manufacturing industries and increased material, energy and operating costs, partially offset by higher sales price.
Our disciplined
Mini Mill: Mini Mill results declined primarily due to lower sales prices and balanced capital strategy has positioned our balance sheet to support investments in our business. We continue to take steps to improve and secure our long-term position as an industry leader by reducing our vulnerabilities during down cycles, accentuating our advantages in up cycles, and enabling the creation of value - and the related rewards - for all higher raw material costs.

U. S. Steel stakeholders throughEurope (USSE): USSE results declined primarily due to lower sales volume, increased raw material and energy costs and the weakening euro exchange rate, partially offset by higher sales price.

Tubular: Tubular results improved primarily due to increased volume, higher sales price and improved premium product mix, driven by the steady increase of drilling activity, partially offset by continued high levels of imports.

Fluctuations in the market price of raw materials and other inflationary impacts have affected the results of each of our reportable segments, and fluctuations going-forward are reasonably likely to have a material impact on future results. We could experience inflation related headwinds in 2023 for certain raw materials and other costs.

In February 2022, Russia invaded Ukraine and active conflict continues in the country. The war in Ukraine will likely continue to cause disruption and instability in Russia, Ukraine, as well as the markets in which we operate. The Company is constantly monitoring the situation for impacts and risks to the business cycles.and is implementing risk mitigating strategies where possible.

We aim to achieve our vision by successfully executing on our world-competitive, “best of both” strategy. By bringing together the bestAs a result of the integrated steelmaking modelinvasion, governments around the world, including the European Union (EU) and the United States of America (U.S.), have enacted sanctions against Russia and Russian interests. We are complying with all applicable sanctions that impact our business.

USSE purchases certain raw materials from sources that procure supply from Russia, including natural gas and iron ore. Since the bestonset of the mini mill steelmaking model, we will transform our business to drive long-term cash flowwar, and before, USSE has been building its inventory of iron ore and coal and procuring them through industry cycles. We aim to offer an unparalleled product platformalternate sources. Current levels of iron ore and coal are sufficient to serve customers, achieve world-competitive positioningcustomer demand through the end of the first quarter 2023.

With the EU prohibiting purchases of coal from suppliers in strategic, high-margin end markets,Russia, new purchases of coal originating from Russia have stopped. The Company has built up sufficient inventory on site or in-transit to meet current customer demand. Efforts to secure alternate sources of supply are underway to continue meeting demand.

Additionally, Russian supply of natural gas to Europe has decreased significantly in response to enacted sanctions. However, Slovakia has natural gas storage and deliver high-quality, value-added productsaccess to additional supply from countries including Norway, the U.S. and innovative solutions that address our customers' most challenging steel needs. To become a “best of both” company, weAfrica. Together, these sources are enhancing our focus on operational and commercial excellence and promoting technological innovation, so we can establish a more competitive cost structure and enhance our capabilities … two key driversenough to support the country's expected consumption through the 2023 winter season, which includes demand for natural gas for our strategy.USSE segment operations.


Critical Accounting Estimates

Management’s discussion and analysis of U. S. Steel’s financial condition and results of operations is based upon U. S. Steel’s financial statements, which have been prepared in accordance with accounting standards generally accepted in the United States (U.S. GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at year-end and the reported amount of revenues and expenses during the year. Management regularly evaluates these estimates, including those related to employee benefits liabilities and assets held in trust relating to such liabilities; the carrying value of property, plant and equipment; intangible assets; valuation allowances for receivables, inventories and deferred income tax assets; liabilities for deferred income taxes; potential tax deficiencies; environmental obligations; potential litigation claims and settlements and put and call option assets and liabilities. Management’s estimates are based on historical experience, current business and market conditions, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from current expectations under different assumptions or conditions.

Management believes that the following are the more significant judgments and estimates used in the preparation of the financial statements.

Goodwill and intangible assets – Goodwill represents the excess of the cost over the fair value of acquired identifiable tangible and intangible assets and liabilities assumed from businesses acquired. Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to impairment testing annually, or more frequently if events or changes in circumstances indicate the asset might be impaired. We perform our annual goodwill impairment test as of October 1 and monitor for interim triggering events on an ongoing basis.

We review goodwill for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test. If we choose to perform a qualitative assessment and we determine that the fair value of the reporting unit more likely than not exceeds the carrying value, no further evaluation is necessary. For reporting units where we perform the quantitative goodwill impairment test, we compare the fair value of each reporting unit, which we primarily determine using an income approach based
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on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, we do not consider the goodwill impaired. If the carrying value is higher than the fair value, we recognize the difference as an impairment loss.

A quantitative goodwill impairment testing process requires valuation of the respective reporting unit, which we primarily determine using an income approach based on a discounted five year forecasted cash flow including a terminal value. We compute the terminal value using the constant growth method, which values the forecasted cash flows in perpetuity. The assumptions about future cash flows and growth rates are based on the respective reporting unit's long-term forecast and are subject to review and approval by senior management. A reporting unit's discount rate is a significant assumption and is a risk-adjusted weighted average cost of capital, which we believe approximates the rate from a market participant's perspective. The estimated fair value could be impacted by changes in market conditions, interest rates, growth rates, tax rates, costs, pricing and capital expenditures. We categorize the fair value determination as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs.

Our Mini Mill reporting unit holds the goodwill recognized as a result of the Company's acquisition of Big River Steel and currently is our only reporting unit that has a significant amount of goodwill. This goodwill is primarily attributable to Big River Steel's operational abilities, workforce and the anticipated benefits from their recent expansion. U. S. Steel completed its annual goodwill impairment test using a quantitative analysis during the fourth quarter of 2022 and determined there was no impairment of goodwill.

Intangible assets with indefinite lives are also subject to at least annual impairment testing, which compares the fair value of the intangible assets with their carrying amounts. U. S. Steel has determined that certain of its acquired intangible assets have indefinite useful lives. These assets are also reviewed for impairment annually in the fourth quarter and whenever events or circumstances indicate the carrying value may not be recoverable. U. S. Steel completed its annual evaluation of its indefinite-lived water rights using a qualitative assessment and determined there was no indication of impairment. Key assumptions included in this test relate to the relevant market rate of an acre foot of water.

If business conditions deteriorate or other factors have an adverse effect on our qualitative and quantitative estimates, inclusive of discounted future cash flows or assumed growth rates, or if we experience a sustained decline in our market capitalization, future assessments of goodwill for impairment may result in impairment charges.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives and are tested for impairment when events occur that indicate that the net book value will not be recovered over future cash flows.

Business combinationsWe account for business combinations under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires an allocation of the consideration we paid to the identifiable assets, intangible assets and liabilities based on the estimated fair values as of the closing date of the acquisition. The excess of the fair value of the purchase price over the fair values of these identifiable assets, intangible assets and liabilities is recorded as goodwill.

Purchased intangibles are initially recognized at fair value and amortized over their useful lives unless those lives are determined to be indefinite. The valuation of acquired assets will impact future operating results. The fair value of identifiable intangible assets is determined using an income approach on an individual asset basis. Specifically, we use the multi-period excess earnings method to estimate the fair value of the customer relationships intangible asset. Determining the fair value of the customer relationships intangible asset involves significant judgements and assumptions, including expected realized price, base year metallic costs, contributory asset charges, and customer attrition rate.

Inventories – Inventories are carried at the lower of cost or market for last-in, first-out (LIFO) inventories, moving average and lower of cost and net realizable value for first-in, first-out (FIFO) method inventories. LIFO is theThe predominant method of inventory costing for inventories in the United StatesFlat-Rolled and Tubular is LIFO. The Mini Mill segment uses FIFO for raw materials and a moving average costing method to account for semi-finished and finished products. FIFO is the predominant inventory costing method used in Europe.by the USSE segment. The LIFO method of inventory costing was used on 7543 percent and 7446 percent of consolidated inventories at December 31, 20192022 and 2018,2021, respectively. Since the LIFO inventory valuation methodology is an annual calculation, interim estimates of the annual LIFO valuation are required. We recognize the effects of the LIFO inventory valuation method on an interim basis by estimating the year endyear-end inventory amounts. The projections of annual LIFO inventory amounts are updated quarterly. Changes in U.S. GAAP rules or tax law, such as the elimination of the LIFO method of accounting for inventories, could negatively affect our profitability and cash flow.

Equity method investments – Investments in entities over which U. S. Steel has significant influence are accounted for using the equity method of accounting and are carried at U. S. Steel’s share of net assets plus loans, advances and our share of earnings less distributions. Differences in the basis of the investment and the underlying net asset value of the investee, if any, are amortized into earnings over the remaining useful life of the associated assets.

Income from investees includes U. S. Steel’s share of income from equity method investments, which is generally recorded a month in arrears, except for significant and unusual items which are recorded in the period of occurrence. Gains or losses from changes in ownership of unconsolidated investees are recognized in the period of change. Intercompany profits and losses on transactions with equity investees have been eliminated in consolidation subject to lower of cost or market inventory adjustments.

U. S. Steel evaluates impairment of its equity method investments whenever circumstances indicate that a decline in value below carrying value is other than temporary. Under these circumstances, we would adjust the investment down to its estimated fair value, which then becomes its new carrying value.

Financial Instruments – U. S. Steel's purchase of a 49.9% equity ownership interest in Big River Steel on October 31, 2019 included certain call and put options. U. S. Steel marks these options to fair value each reporting period using a Monte Carlo simulation which is considered a Level 3 valuation technique. Level 3 valuation techniques include inputs to the valuation methodology that are considered unobservable and significant to the fair value measurement. See Note 5 and Note 20 to the Consolidated Financial Statements for further details.

Pensions and Other Benefits – The recording of net periodic benefit costs for defined benefit pensions and Other Benefits is based on, among other things, assumptions of the expected annual return on plan assets, discount rate, mortality, escalation or other changes in retiree health care costs and plan participation levels. Changes in the assumptions or differences between actual and expected changes in the present value of liabilities or assets of U. S. Steel’s plans could cause net periodic benefit costs to increase or decrease materially from year to year as discussed below.

U. S. Steel’s investment strategy for its U.S. pension and Other Benefits plan assets provides for a diversified mix of high qualityhigh-quality bonds, public equities and selected smaller investments in private equities, private credit, timber and mineral interests. For its
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U.S. pension, plan, U. S. Steel has a target allocation for plan assets of 4550 percent in corporate bonds, government bonds and

mortgage and asset-backed securities.fixed income investments. The balance is invested in equity securities, timber, private equity and real estate partnerships. U. S. Steel believes that returns on equities over the long term will be higher than returns from fixed-income securities as actual historical returns from U. S. Steel’s trusts have shown. Returns on bonds tend to offset some of the short-term volatility of stocks. Both equity and fixed-income investments are made across a broad range of industries and companies (both domestic and foreign) to provide protection against the impact of volatility in any single industry as well as company specific developments. U. S. Steel will use a 6.506.90 percent assumed rate of return on assets for the development of net periodic cost for the main defined benefit pension plan in 2020. The 2020 assumed rate of return was determined by taking into account the intended asset mix and some moderation of the historical premiums that fixed-income and equity investments have yielded above government bonds.2023. Actual returns since the inception of the plansplan have exceeded this 6.506.90 percent rate and while recent annual returns have been volatile, it is U. S. Steel’s expectation that rates will achieve this level in future periods.

For its Other Benefits plan, assets, U. S. Steel employsis employing a liability driven investment strategy. The plan assets are allocated to match the plan cash flows with maturing investments. To achieve this strategy, U. S. Steel has a target allocation for plan assets of 9088 percent in high quality bonds with thefixed income and private credit. The balance is primarily invested in equity securities, timber, private equity and real estate partnerships. U. S. Steel will use a 4.254.50 percent assumed rate of return on assets for the development of net periodic cost for its Other Benefits plans.Benefit plans for 2023. The 20202023 assumed rate of return has been conservatively set, taking into account the intendedwas updated after a review of capital market forecasted returns based on target allocations. The expected asset mix.return for 2023 will continue to be 4.50 percent.

The expected long-term rate of return on plan assets is applied to the market value of assets as of the beginning of the period less expected benefit payments and considering any planned contributions.

To determine the discount rate used to measure our pension and Other Benefit obligations for U.S. plans we utilize a bond matching approach to select specific bonds that would satisfy our projected benefit payments. At December 31, 2019,2022, the weighted average discount rate used for our pension and Other Benefit obligations was determined to be 3.355.55 percent and 3.435.66 percent, respectively, compared to the weighted average discount rate used of 4.413.01 percent and 4.473.11 percent, respectively, at December 31, 2018.2021. The discount rate reflects the current rate at which we estimate the pension and Other Benefits liabilities could be effectively settled at the measurement date.

U. S. Steel reviews its actual historical rate experience and expectations of future health care cost trends to determine the escalation of per capita health care costs under U. S. Steel’s benefit plans. Approximately three quarters75 percent of our costs for the domestic United Steelworkers (USW) participants’ retiree health benefits in the Company’s main domestic benefit plan are limited to a per capita dollar maximum calculation based on 2006 base year actual costs incurred under the main U. S. Steel benefit plan for USW participants (cost cap). The full effect of the cost cap is expected to be realized around 2028.2030. After 2028,2030, the Company’s costs for a majority of USW retirees and their dependents are expected to remain fixed and as a result, the cost impact of health care escalation for the Company is projected to be limited for this group (See(see Note 18 to the Consolidated Financial Statements). For measurement of its domestic retiree medical plans where health care cost escalation is applicable, U. S. Steel has assumed an initial escalation rate of 6.506.00 percent for 2020.2023. This rate is assumed to decrease gradually to an ultimate rate of 4.50 percent in 20282038 and remain at that level thereafter.

Net periodic pension benefit cost (credit), including multiemployer plans, is expected to total approximately $141$39 million in 20202023 compared to $179$6 million in 2019.2022. Excluding settlement and special termination losses totaling $11$12 million in 2019,2022, the decreaseincrease in expectednet periodic pension expensebenefit cost in 20202023 is primarily due the 2019to 2022 asset performance and a changean increase in mortality assumptions, partially offset by the decreaseprior service cost. Net periodic other benefit (credit) in discount rates. Total Other Benefits income in 20202023 is expected to be approximately $29$(83) million, compared to $57$(108) million of expense in 2019.2022. The expected improvementdecrease in the 2020 Other Benefit expense (income)2023 net periodic other benefit (credit) is primarily due to the expirationtransfer of a prior service cost$595 million in surplus funds from the 2008 labor agreementPost Retirement Benefit Trust (VEBA) assets to be used for active insurance benefits. See Note 18 to the Consolidated Financial Statements, “Pensions and projected decreases in future healthcare costs and assumed participant enrollments.Other Benefits.”

The tablestable below projectprojects the incremental effect of a hypothetical one percentage point change in significant assumptions used in determining the funded status and expensenet periodic benefit cost for pension and Other Benefits:other benefits:


Hypothetical Rate Change Increase (Decrease)
(In millions)1%(1)%
Expected return on plan assets
Incremental (decrease) increase in:
Net periodic pension and other benefits costs for 2023$(60)$60 
Discount rate
Incremental (decrease) increase in:
Net periodic pension and other benefits costs for 2023$(4)$11 
Pension & other benefits obligations at December 31, 2022$(411)$474 
  At December 31, 2019
  Hypothetical Rate Change
(In millions) 1% (1)%
Discount rates and Interest rates    
Incremental change in:    
    Pension & other benefits obligations, increase/(decrease) $(671) $799
    Fixed Income Assets, (increase)/decrease 433
 (524)
    Net impact on funded status, increase/(decrease) $238
 $(275)

The fixed income asset sensitivity shown above excludes other fixed income return components (e.g. changes in credit spreads, bond coupon and active management excess returns), and growth asset returns. Fixed income sensitivity reflects the asset allocation and investment policy effective December 31, 2019. Other factors that impact net funded status (e.g., contributions) are not reflected.

Discount rates and the expected long-term return on assets have a material impact on pension and other benefit expense. The table below estimates the impact to expense of a hypothetical one percentage point change in rates:
  
Hypothetical Rate
Increase  (Decrease)
(In millions) 1% (1)%
Expected return on plan assets    
Incremental (decrease) increase in:    
Net periodic pension & other benefits costs for 2020 $(68) $68
Discount rates    
Incremental (decrease) increase in:    
Net periodic pension & other benefits costs for 2020 $(16) $17

Changes in the assumptions for expected annual return on plan assets and the discount rate used for accounting purposes do not impact the funding calculations used to derive minimum funding requirements for the pension plan. However, the discount rate required for minimum funding purposes is also based on corporate bond related indices and as such, the same general
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sensitivity concepts as above can be applied to increases or decreases to the funding obligations of the plans assuming the same hypothetical rate changes. (SeeSee Note 18 to the Consolidated Financial Statements for a discussion regarding legislation enacted in NovemberMarch of 20152021 that impacts the discount rate used for funding purposes.) For further cash flow discussion see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, – Financial Condition, Cash FlowsLiquidity and Liquidity – Liquidity.Capital Resources.

Long-lived assets – U. S. Steel evaluates long-lived assets, primarily property, plant and equipment for impairment whenever changes in circumstances indicate that the carrying amounts of those productive assets exceed their recoverable amount as determined by the asset group's projected undiscounted cash flows. We evaluate the impairment of long-lived assets at the asset group level. Our primary asset groups are Flat-Rolled, Mini Mill, USSE, welded tubular and seamless tubulartubular.

In the second quarter of 2022, the Company recognized charges of $151 million for the write-off of the blast furnaces and related fixed assets for the permanent idling of the iron making process at our Great Lakes Works facility, which had been idled on an indefinite basis during 2020. There were no other triggering events that required an impairment evaluation of our long-lived asset groups during the year-ended December 31, 2022.

In the fourth quarter of 2021, U. S. Steel Europe (USSE).decided to permanently idle the steelmaking assets at Great Lakes Works, which had been indefinitely idled since 2020, resulting in an impairment of $128 million for property, plant and equipment.

During 2019, steel market challenges in the U.S. and Europe, the idling of certain Flat-Rolled facilities and recent losses in the welded tubular asset group were considered triggering events for the Flat-Rolled, USSE and welded tubular asset groups. U. S. Steel completed a quantitative analysis of its long-lived assets for these asset groups and determined that the assets were not impaired. The percentage excess of estimated future cash flows over the net assets was greater than 30 percent for our welded tubular asset group. The key assumptions used to estimate the recoverable amounts for the welded tubular asset group were estimates of future commercial prices, commercial program management and efficiency improvements over the 12-year remaining useful life of the primary welded tubular assets. The percentage excess of estimated future cash flows over the net assets was greater than 75 percent for both the Flat-Rolled and USSE asset groups.

In 2019, there were no triggering events for the seamless tubular asset group that required long-lived assets to be evaluated for impairment and in 2018 none of the asset groups had a triggering event that required long-lived assets to be evaluated for impairment.


Taxes - U. S. Steel records a valuation allowance, related to certain state net operating losses, state tax credits and unused capital losses, to reduce deferred tax assets to the amount that is more likely than not to be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. Each quarter U. S. Steel analyzes the likelihood that our deferred tax assets will be realized.
At December 31, 2019, after weighing all the positive and negative evidence, U. S. Steel determined that it was more likely than not that the net domestic deferred tax asset (excluding a portion of a deferred tax liability related to an asset with an indefinite life, as well as a deferred tax asset related to refundable AMT credits) may not be realized. As a result, U. S. Steel recorded a $334 million non-cash charge to tax expense. In the future, if we determine that it is more likely than not that we will be able to realize all or a portion of our deferred tax assets, the valuation allowance will be reduced, and we will record a non-cash net benefit to earnings. See Note 11 to the Consolidated Financial Statements for further details.

At December 31, 2018,In 2021, U. S. Steel determined, based upon weighing all positive and negative evidence, that a partialfull valuation allowance was required for only certain of itsthe domestic deferred tax assets that have expiration dates which may limit their realizability, includingwas no longer required. Accordingly, we reversed all of the domestic valuation allowance except for a portion of the domestic valuation allowance related to certain state net operating losses (NOLs),and state income tax credits, foreign tax credits, general business credits (GBCs) and capital losses. Accordingly,credits. During the year ended December 31, 2021, we reversedrealized a portionnon-cash net benefit of $715 million related to the valuation allowance release, which resultedwas partially offset by the addition of a valuation allowance of $82 million, the majority of which relates to an unused capital loss generated in a $374 million non-cash benefit to earnings. That determination was based in part, on U. S. Steel's cumulative income from the past three years and projectionsfourth quarter of income in future years. In addition, U. S. Steel had seven consecutive quarters of positive pretax income.2021.

At the end of both 20192022 and 2018,2021, U. S. Steel did not have any undistributed foreign earnings and profits for which U.S. deferred taxes have not been provided.
U. S. Steel records liabilities for uncertain tax positions. These liabilities are based
For further information on management’s judgment of the risk of loss for items that have been or may be challenged by taxing authorities. If U. S. Steel determines that tax-related items would not be considered uncertain tax positions or that items previously not considered to be potential uncertain tax positions could be considered potential uncertain tax positions (as a result of an audit, court case, tax ruling or other authoritative tax position), an adjustmentincome taxes see Note 11 to the liability would be recorded through income in the period such determination was made.Consolidated Financial Statements.

Environmental remediation U. S. Steel has been identified as a potentially responsible party (PRP)PRP at sevenfour sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) as of December 31, 2019.2022. Of these, there are three sites where information requests have been received or there are other indications that U. S. Steel may be a PRP under CERCLA, but where sufficient information is not presently available to confirm the existence of liability or to make a reasonable estimate with respect to any potential liabilities. There are also 18nine additional sites where U. S. Steel may be liable for remediation costs in excess of $100,000$1 million under other environmental statutes, both federal and state, or where private parties are seeking to impose liability on U. S. Steel for remediation costs through discussions or litigation. At many of these sites, U. S. Steel is one of a number of parties involved and the total cost of remediation, as well as U. S. Steel’s share, is frequently dependent upon the outcome of ongoing investigations and remedial studies. U. S. Steel accrues for environmental remediation activities when the responsibility to remediate is probable and the amount of associated costs is reasonably determinable. As environmental remediation matters proceed toward ultimate resolution or as remediation obligations arise, charges in excess of those previously accrued may be required.

U. S. Steel's accrual for environmental liabilities for U.S. and international facilities as of December 31, 20192022 and 20182021 was $186$126 million and $187$158 million, respectively. These amounts exclude liabilities related to asset retirement obligations, disclosed in Note 19 to the Consolidated Financial Statements.

U. S. Steel is the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the Consolidated Financial Statements.

For discussion of relevant environmental items, see “Part I. Item 3. Legal Proceedings—Environmental Proceedings.”

Segments

U. S. Steel has threefour reportable segments: North American Flat-Rolled, (Flat-Rolled), U. S. Steel Europe (USSE)Mini Mill, USSE and Tubular Products (Tubular). The results of our 49.9% ownership interest in Big River Steel and our railroad and real estate businesses that do not constitute reportable segments are combined and disclosed in the Other Businesses category.


The Flat-Rolled segment includes the operating results of U. S. Steel’s integrated steel plants and equity investees in North America (except for Big River Steel, which is included in Other Businesses) involved in the production of slabs, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. These operations primarily serve North American customers in the service center, conversion, transportation (including automotive), construction, container, and appliance and electrical markets.

The USSE segment includes the operating results of U. S. Steel Košice (USSK), U. S. Steel’s integrated steel plant and coke production facilities in Slovakia, and its subsidiaries. USSE conducts its business mainly in Central and Western Europe and primarily serves customers in the European transportation (including automotive), construction, container appliance, electrical, service center, conversion and oil, gas and petrochemical markets. USSE produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as refractory ceramic materials.

The Tubular segment includes the operating results of U. S. Steel’s tubular production facilities and an equity investee in the United States. These operations produce and sell seamless and electric resistance welded (ERW) steel casing and tubing (commonly known as oil country tubular goods or OCTG), standard and line pipe and mechanical tubing and primarily serve customers in the oil, gas and petrochemical markets.

Products. For further description of segment operations and information see Item 1 Segments and Note 4 to the Consolidated Financial Statements.Statements, respectively.

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Net Sales
chart-7349a4cf9461534e970.jpg

x-20221231_g10.jpg
Net Sales by Segment

Net sales by segment for the years ended December 31, 2022 and 2021 are set forth in the following table:
(Dollars in millions, excluding intersegment sales) 2019 2018 2017
Flat-Rolled $9,279
 $9,681
 $8,297
USSE 2,417
 3,205
 2,949
Tubular 1,188
 1,231
 944
Total sales from reportable segments 12,884
 14,117
 12,190
Other Businesses 53
 61
 60
Net sales $12,937
 $14,178
 $12,250


Years Ended December 31,
(Dollars in millions, excluding intersegment sales)20222021% Change
Flat-Rolled$12,522 $12,180 %
Mini Mill (a)
2,681 3,008 (11)%
USSE4,243 4,262 — %
Tubular1,611 789 104 %
Total sales from reportable segments21,057 20,239 %
Other8 36 (78)%
Net Sales$21,065 $20,275 %
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in BRS.


Management’s analysis of the percentage change in net sales for U. S. Steel’s reportable business segments is set forth in the following tables:

table:
Year Ended December 31, 2019 versus Year December 31, 2018

Steel Products(a)
Year Ended December 31, 2022 versus Year Ended December 31, 2021VolumePriceMixAcquisition Variance
FX(b)
Other(c)
Net
Change
Flat-Rolled(6)%%— %n/a— %%%
Mini Mill (d)
(2)%(11)%— %%— %— %(11)%
USSE(13)%22 %%n/a(11)%%— %
Tubular17 %87 %(1)%n/a— %— %103 %
(a) Excludes intersegment sales.
(b) Foreign currency translation effects.
(c) Primarily consists of sales of raw material and coke making by-products
(d) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in BRS.

  
Steel Products(a)
    
Volume Price Mix 
FX(b)
 
Coke, Pellets & Other(c)
 Net
Change
Flat-Rolled 1 % (5)% (1)%  % 1 % (4)%
USSE (19)% (3)% 3 % (5)% (1)% (25)%
Tubular (1)% (1)% (1)%  %  % (3)%
(a)Excludes intersegment sales
(b)Foreign currency translation effects
(c)Includes sales of scrap inventory

The decrease in 2019Net sales for the twelve months ended December 31, 2022 compared to the same period in 2021 were $21,065 million and $20,275 million, respectively.
For the Flat-Rolled segment the increase in sales primarily reflects lowerresulted from higher average realized prices (decrease of $58($89 per ton) and a less favorable product mix. In 2019 to adjust production to declining customer demand a blast furnace at Gary Works was temporally idled (subsequently restarted in December 2019) and a blast furnace at Great Lakes Works was temporarily idled (subsequently to be indefinitely idled in early 2020 along with remainder ofprimarily from higher value-added products, partially offset by decreased shipments (645 thousand tons) across most products.
For the iron and steel making facilities at Great Lake Works).

TheMini Mill segment the decrease in 2019 sales for the USSE segment was primarily due to decreased shipments (decrease of 867 thousand net tons) and lower average realized prices (decrease of $41 per net ton) in most product categories due to increased import competition, flat to declining demand and the weakening of the Euro versus the U.S. dollar.
The decrease in 2019 sales for the Tubular segment resulted from lower average realized prices (decrease($180 per ton) primarily from lower value-added products partially offset by increased shipments (57 thousand tons), including the partial period of $33the Company's controlling interest in Big River Steel in January of 2021.
For the USSE segment the consistent sales primarily resulted from higher average realized prices ($124 per net ton) across most products, offset by decreased shipments (543 thousand tons) across most products.
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For the Tubular segment the increase in sales primarily resulted from higher average realized prices ($1,282 per net ton) and decreased netincreased shipments (decrease of 11(79 thousand net tons) from lower demand for tubular products..

Operating Expenses

Union profit-sharing costs

Year Ended December 31,
(Dollars in millions)20222021
Allocated to segment results$442 $430 
  Year Ended December 31,
(Dollars in millions) 2019 2018
Allocated to segment results $12
 $92

The amounts above represent profit-sharing amounts paid to active USW-represented employees and are included in cost of sales on the Consolidated Statement of Operations.

Profit-based amounts are calculated and paid on a quarterly basis as a percentage of consolidated earnings (loss) before interest and income taxes based on 7.5 percent of profit between $10 and $50 per ton and 15 percent of profit above $50 per ton. There were no changes to the calculation of profit-based amounts in the 2022 Labor Agreements.

The amounts above represent profit-sharing amounts paid to active USW-represented employees and are included in cost of sales on the Consolidated Statement of Operations.

PensionNet periodic pension and other benefits costs

Pension and other benefit costs (other than service cost) are reflected within net interest and other financial costs and the service cost component is reflected within cost of sales in the Consolidated Statements of Operations.

Defined benefit and multiemployer pension plan costs included in cost of sales totaled $121$119 million in 20192022 and $109$128 million in 2018.2021.

Other benefit expenseservice cost included in cost of sales totaled $13$9 million in 20192022 and $17$11 million in 2018.2021.

Costs related to defined contribution plans totaled $48$47 million in 20192022 and $44$45 million in 2018.2021.


Selling, general and administrative expenses


Selling, general and administrative expenses were $289consistent for the years ended December 31, 2022 and December 31, 2021 at $422 million in 2019 and $336$426 million, in 2018. The decrease from 2018 to 2019 is primarily related to decreased variable compensation.respectively.

Operating configuration adjustments

Over the past three years, theThe Company has adjusted its operating configuration in response to changing market conditions including global overcapacity, unfair trade practices, market conditions and increases in domesticdecreased customer demand as a result of tariffs on imports by indefinitely and temporarily idling and then re-starting production at certain of its facilities. U. S. Steel will continue to adjust its operating configuration in order to maximizeensure its strategy of combining the "best of both" leading integratedorder book and mini mill technology.production footprint are balanced.

Idled Operations

In December 2019, U. S. Steel announcedthe second half of 2022, we took actions to adjust our footprint by temporarily idling certain operations to better align production with market conditions. The operations that it would indefinitely idle a significant portionwere idled in the second half of Great Lakes Works. The Company expects to begin idling the iron2022 and steelmaking facilities on or around April 1, 2020, and the hot strip mill rolling facility before the end of 2020. The carrying value of the Great Lakes Works facilities that we intend to indefinitely idle was approximately $385 millionremained idled as of December 31, 2019.2022, along with their carrying values included:
Blast furnace #8 at Gary Works, $30 million
Blast furnace #3 at Mon Valley Works, $45 million (restarted in January 2023)
Blast furnace #2 at USSE, $25 million (restarted in January 2023)

The following operations were initially idled in 2020 and remained idle as of December 31, 2022. These facilities and their respective carrying values as of December 31, 2022 included:
Blast Furnace A at Granite City Works, $55 million
Lone Star Tubular Operations, $5 million
Lorain Tubular Operations, $60 million
Wheeling Machine Products coupling production facility at Hughes Springs, Texas, immaterial

In December 2019, the Company completed the indefinite idlingfourth quarter of its East Chicago Tin (ECT) operations within its Flat-Rolled segment. ECT was indefinitely idled primarily due to increased tin import levels in the U.S. Additionally,2022, U. S. Steel indefinitely idled its finishing facilitythe majority of the tin mill operations at Gary Works. This included the Tin Line #5, which was previously temporarily idled in Dearborn, Michigan (which operates an electrolytic galvanizing line), duringthe third quarter of 2022, and the Tin Line #6 indefinitely idled the fourth quarter of 2019. The carrying value of these facilities was approximately $20 million as of December 31, 2019.
In October 2019, the Company announced that it is implementing an enhanced operating model and organizational structure to accelerate the Company’s strategic transformation and better serve its customers. The new operating model was effective January 1, 2020 and is centered around manufacturing, commercial, and technological excellence. Our former “commercial entity” structure was put into place to deepen understanding of business ownership and our relationships with customers and allowed the Company to identify the technology that would differentiate our products and processes on the basis of cost and/or capabilities. The new enhanced operating model is a logical next step in the execution of the Company’s strategy and will make us a more nimble company positioned to deliver the benefits of our strategy through the cycle. 
In July 2019, U. S. Steel began implementing a labor productivity strategy at USSK so that it could better compete in the European steel market, which has experienced softening demand as well as a significant increase in imports. It is anticipated that the labor productivity strategy will result in total headcount reductions, including contractors, of approximately 2,500 by the end of 2021.2022. As of December 31, 2019, approximately 1,900 positions, including approximately 400 contractors, were eliminated.
In June 2019, U. S. Steel idled two blast furnaces in2022, the U.S. and one blast furnace in Europe to better align global production with its order book. As a result, monthly blast furnace production capacity was reduced by approximately 200,000 - 225,000 tons in the U.S. and 125,000 tons in Europe. In December 2019, for the U.S., we restarted onecarrying value of the indefinitely idled blast furnacestin mill operations assets at Gary Works is $80 million.

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At Great Lakes Works, the Company permanently idled the steelmaking operations in 2021 and announced the indefinite idling on or around April 1, 2020ironmaking operations in 2022 which resulted in non-cash impairments of $128 million and $151 million, respectively. The coil finishing process at Great Lakes Works continues to operate and remains a component of the other. The production at the idled blast furnace in Europe may resume when market conditions improve.Company's operating plans.
In June 2019, U. S. Steel restarted the No. 1 Electric-Weld Pipe Mill (No. 1 Pipe Mill) at its Lone Star Tubular Operations to enable the Company to support increased demand for high-quality electric-welded pipe produced in the United States. The No. 1 Pipe Mill produces 7-16 inch welded pipe and is complementing our current Tubular product offerings. It had been idled since 2016.
In February 2019, U. S. Steel restarted construction of the electric arc furnace (EAF) capital project located in Fairfield, Alabama. Construction had previously been delayed.

In 2018 and 2017, the Granite City Works steelmaking operations and hot strip mill, respectively, were restarted after they were temporarily idled in 2015.

Depreciation, depletion and amortization

Depreciation, depletion and amortization expenses were $616$791 million in 2019both years ended December 31, 2022 and $521 million in 2018. The increases from 2018 to 2019 are primarily due to increased capital spending in recent years.December 31, 2021.

Earnings from investees


Earnings from investees were $79$243 million in 2019 and $612022 versus earnings from investees of $170 million in 2018.2021. The increase in 2022 from 2018 to 2019the prior year is primarily due to increasedcurrent year earnings from our iron ore investee and our PRO-TEC joint venture partially offset by an equity loss related to our investment in Big River Steel.from higher realized prices.

Restructuring and Other Charges

During 2019, U. S. Steel2022, the Company recorded restructuring and other charges of $275$48 million, which consists of charges of $25$30 million related to the planned disposition of a component within the Flat-Rolled segment, severance-related charges at USSK for headcount reductionsdomestic facilities of $4 million, charges under the Company's voluntary retirement programs at U. S. Steel Košice (USSK) of $23 million and planta $9 million favorable adjustment to the expected exit costs $227 million for the indefinite idling of ECT, our finishing facility in Dearborn, Michigan, and the intended indefinite idling of a significant portion of Great Lakes Works and $23 million for Company-wide headcount reductions.indefinitely idled facilities.

Charges for restructuring and ongoing cost reduction initiatives are recorded in the period U. S. Steel commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met. Charges related to restructuring and cost reductions are reported in restructuringRestructuring and other charges in the Consolidated Statements of Operations.

Earnings (loss) before interest and income taxes by segment (a)
Year Ended December 31,
(Dollars in Millions)20222021
Flat-Rolled$1,951 $2,630 
Mini Mill481 1,206 
USSE444 975 
Tubular544 
Total earnings from reportable segments3,420 4,812 
Other$22 (11)
Segment earnings before interest and income taxes3,442 4,801 
Other items not allocated to segments:
Restructuring and other charges (b)
(48)(128)
Asset impairment charges (c)
(163)(273)
United Steelworkers labor agreement signing bonus and related costs(64)— 
Gains on assets sold & previously held investments6 118 
Gain on sale of Transtar (d)
 506 
Environmental remediation charge (43)
Other items, net(13)(35)
Total earnings before interest and income taxes$3,160 $4,946 
(a) See Note 4 to the Consolidated Financial Statements for reconciliations and other details.
(b) Included in restructuring and other charges on the Consolidated Statements of Operations. See Note 25 to the Consolidated Financial Statements for further details.
(c) See Note 1 to the Consolidated Financial Statements for further details.
(d) See Note 5 to the Consolidated Financial Statements for further details.
Earnings (loss) before interest and income taxes by Segment
(a)

  Year Ended December 31,
(Dollars in Millions) 2019 2018
Flat-Rolled $196
 $883
USSE (57) 359
Tubular (67) (58)
Total earnings (loss) from reportable segments 72
 1,184
Other Businesses 23
 55
Segment earnings (loss) before interest and income taxes 95
 1,239
Other items not allocated to segments:    
December 24, 2018 Clairton coke making facility fire (50) 
Restructuring and other charges (b)
 (275) 
USW labor agreement signing bonus and related costs 
 (81)
Granite City Works restart and related costs 
 (80)
Granite City Works temporary idling charges 
 8
Gain on equity investee transactions (Note 12) 
 38
Total (loss) earnings before interest and income taxes $(230) $1,124
(a) See Note 4 to the Consolidated Financial Statements for reconciliations and other disclosures required by Accounting Standards Codification Topic 280.
(b) Included in restructuring and other charges on the Consolidated Statements of Operations. See Note 25 to the Consolidated Financial Statements.

Gross Margin by Segment

  Year Ended December 31,
  2019 2018
Flat-Rolled 8 % 15%
USSE 3 % 15%
Tubular (1)% 1%

Segment results for Flat-Rolled
chart-c812d35fdaf65fb58f9.jpgchart-bb25abc6dbd55d4a809.jpg
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Average Realized Price Per TonSegment Earnings (Loss) before Interest and Income Taxes
Year Ended December 31,%
Change
20222021
Earnings before interest and taxes ($ in millions)$1,951 $2,630 (26)%
Gross margin20 %27 %(7)%
Raw steel production (mnt)8,846 9,881 (10)%
Capability utilization67 %58 %%
Steel shipments (mnt)8,373 9,018 (7)%
Average realized steel price per ton1,261 1,172 %
chart-b0321aa1d6f45be08ee.jpgchart-269d6c1b86a35e1693c.jpg

The Flat-Rolled segment had earnings of $196 million for the year ended December 31, 2019 compared to earnings of $883 million for the year ended December 31, 2018. The decrease in Flat-Rolled results for 20192022 compared to 2018 resulted2021 was primarily from lower average realized pricesdue to:
decreased shipments, including volume inefficiencies (approximately $570$290 million), increased spending on operating and maintenance costs
decreased non-prime sales (approximately $110$95 million),
higher raw material costs, primarily coal and alloys (approximately $65$680 million) and
higher energy costs (approximately $365 million)
increased other operating costs primarily depreciationfor purchased products and services, including costs at our mining operations (approximately $90$515 million). These charges,
these changes were partially offset by decreasedby:
increased average realized prices, including mix (approximately $960 million)
increased coke, iron ore and other non-steel sales (approximately $55 million)
favorable equity investees income (approximately $60 million)
lower other costs, which was primarily related to decreasedcommodity derivatives and variable compensation (approximately $135$190 million) and lower energy costs (approximately $15 million).


Gross margin for 20192022 as compared to 20182021 decreased primarily as a result of lower sales volume and increased input costs, partially offset by higher average realized prices.

Segment results for Mini Mill (a)

Year Ended December 31,%
Change
20222021
Earnings before interest and taxes ($ in millions)$481 $1,206 (60)%
Gross margin25 %47 %(22)%
Raw steel production (mnt)2,650 2,688 (1)%
Capability utilization80 %81 %(1)%
Steel shipments (mnt)2,287 2,230 %
Average realized steel price per ton1,134 1,314 (14)%
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in BRS.

The decrease in Mini Mill results for 2022 compared to 2021 was primarily due to:
decreased average realized prices (approximately $440 million)
decreased shipments (approximately $35 million)
higher raw material costs (approximately $275 million),
these changes were partially offset by:
lower other costs, primarily variable compensation (approximately $25 million).

Gross margin for 2022 as compared to 2021 decreased primarily as a result of lower average prices due to lower spot pricesrealized sales price and adjustable, spot market index-based contract prices, bothincreased raw material costs, partially offset by the partial period of which consistently decreased throughout 2019.the Company's controlling interest in Big River Steel in January of 2021.


Segment results for USSE

chart-ef94f559d2765482bda.jpgchart-359bac338b6152cf81c.jpg
Year Ended December 31,%
Change
20222021
Earnings before interest and taxes ($ in millions)$444 $975 (54)%
Gross margin13 %26 %(13)%
Raw steel production (mnt)3,839 4,931 (22)%
Capability utilization77 %99 %(22)%
Steel shipments (mnt)3,759 4,302 (13)%
Average realized steel price per ton1,090 966 13 %

chart-62ae38274c47560cbfa.jpgchart-642058c25084506ca3d.jpg

The USSE segment had a loss of $57 million for the year ended December 31, 2019 compared to earnings of $359 million for the year ended December 31, 2018. The decrease in USSE results in 2019for 2022 compared to 20182021 was primarily due to significant market challenges from weakening economic conditions resulting in to:
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decreased shipments, including volume inefficiencies (approximately $130$160 million), lower average realized prices (approximately $100 million),
higher raw material costs, primarily coal and coke (approximately $115$760 million)
increased operating costs (approximately $125 million)
higher energy costs (approximately $200 million)
weakening of the euro versus the U.S. dollar (approximately $160 million),
these changes were partially offset by:
increased average realized prices, including mix (approximately $845 million)
increased non-steel sales (approximately $10 million)
lower other costs, primarily variable compensation (approximately $20 million).

Gross margin for 2022 as compared to 2021 decreased primarily as a result of lower sales volume, higher raw material and energy costs and negative impacts from the weakening of the euro versus the U.S. dollar, (approximately $70 million), higher energy costs ($35 million). These charges were partially offset by lower spending for operating and maintenance (approximately $10 million) and other costs (approximately $25 million).

Gross margin decreased from 2019 as compared to 2018 primarily due to lowerhigher average realized prices.


Segment results for Tubular
chart-d61d5a59bdba540983a.jpgchart-5559549c3a105be6ae4.jpg

Year ended December 31,%
Change
20222021
Earnings before interest and taxes ($ in millions)$544 $NM
Gross margin37 %%30 %
Raw steel production (mnt)634 464 37 %
Capability utilization70 %52 %18 %
Steel shipments (mnt)523 444 18 %
Average realized steel price per ton2,978 1,696 76 %

chart-5fd112231eb95c558ba.jpg

The increase in Tubular segmentresults for 2022 compared to 2021 was primarily due to:
increased average realized prices (approximately $580 million)
increased shipments (approximately $40 million),
these changes were partially offset by:
higher raw material costs (approximately $15 million)
increased operating costs (approximately $10 million)
higher energy costs (approximately $10 million)
higher other costs, primarily variable compensation (approximately $40 million).

Gross margin for 2022 as compared to 2021 increased primarily as a result of higher average realized prices and sales volume.

Results for Other

The Other category had a lossearnings of $67$22 million for the year ended December 31, 20192022 compared to a losslosses of $58$11 million for the year ended December 31, 2018. The decrease in Tubular results in 2019 as compared to 2018 was primarily due to lower average realized prices (approximately $15 million), decreased shipments (approximately $15 million), increased spending on operating costs (approximately $35 million) and increased costs associated with the continued execution of Tubular's commercial and technology strategy (approximately $25 million). Theses charges were partially offset by lower substrate and rounds costs (approximately $80 million).

Gross margin for 2019 as compared to 2018 decreased primarily due to lower average realized prices.

Results for Other Businesses

Other Businesses had earnings of $23 million and $55 million for 2019 and 2018, respectively.


Items not allocated to segments:

2021.
We incurred charges of $50 million for costs associated with the December 24, 2018 Clairton coke making facility fire.

We recorded $275 million of restructuring and other charges for the intended indefinite idling of a significant portion of Great Lakes Works, the indefinite idling of ECT and our finishing facility in Dearborn, Michigan, within the Flat-Rolled segment, the labor productivity strategy within the USSE segment and company-wide headcount reductions.

We recorded a charge of $81 million for United Steelworkers labor agreement signing bonus and related costs in 2018 associated with the 2018 Labor Agreements with the United Steelworkers.

We recorded $80 million for Granite City Works restart and related costs in 2018 as a result of costs associated with the restart of the "A" and "B" blast furnaces.
We recorded a favorable adjustment of $8 million in 2018 related to Granite City Works temporary idling charges.

We recognized a gain on equity investee transactions of $38 million in 2018. The gain on equity investee transactions included approximately $18 million for the assignment of our 33% ownership interest in Leeds Retail Center, LLC and $20 million from the sale of our 40% ownership interest in Acero Prime, S. R. L. de CV. (see Note 12 to the Consolidated Financial Statements, “Investments and Long-Term Receivables and Equity Investee Transactions” for further details).

Net Interest and Other Financial Costs

Year Ended December 31,
(Dollars in millions)20222021
Interest expense159 313 
Interest income(44)(4)
Loss on debt extinguishment 292 
Other financial costs32 46 
Net periodic benefit income(246)(45)
Net interest and other financial (benefits) costs$(99)$602 
  Year Ended December 31,
(Dollars in millions) 2019 2018
Interest income $(17) $(23)
Interest expense 142
 168
Net periodic benefit cost (other than service cost) 91
 69
Loss on debt extinguishment 
 98
Other financial costs 6
 
Net interest and other financial costs $222
 $312


During 2019,Net interest and other financial (benefits) costs improved in 2022 compared to 2021 primarily due to the absence of current year debt retirement losses; reduced interest expense from a reduced level of debt and increased capitalized interest; and an increase in net periodic benefit income, primarily due to lower amortization of actuarial losses and the absence of current year de-risking settlement charges. For additional information on U. S. Steel entered into a new five-year senior secured asset-based revolving credit facility in an aggregate amount of $2.0 billion (Fifth Credit Facility Agreement) to replace its former $1.5 billion credit facility. Also, during 2019 U. S. Steel had net borrowings of $600 million from the Fifth Credit Facility Agreement; launched offerings of two series of environmental revenue bonds in aggregate principal amount of approximately $368 million, that will mature between 2024 and 2049 of which approximately $93 million was used to redeem a portion of our existing outstanding environmental revenue bonds; issued $350 million aggregate principal amount of 5.00% Senior Convertible Notes due 2026 (2026 Senior Convertible Notes) and, had additional borrowings of €150 million (approximately $164 million) from the USSK Credit Agreement. For additional information regarding changes in our debt profileindebtedness see Note 17 to the Consolidated Financial Statements.
During 2018, U. S. Steel issued $650 million aggregate principal amount of 6.250% Senior Notes due 2026 (2026 Senior Notes) and had borrowings of €200 million (approximately $229 million) from the USSK Credit Agreement. Also, during 2018, through a series of open market purchases, U. S. Steel repurchased approximately $75 million of its 7.375% Senior Notes due in 2020 (2020 Senior Notes) and redeemed the remaining $357 million. Additionally, U. S. Steel tendered and then redeemed the $780 million aggregate principal amount of its 8.375% Senior Secured Notes due 2021 (2021 Senior Secured Notes). The aggregate redemption costs of these repurchases and redemptions totaled $1,296 million, which included $1,212 million for the remaining principal balances and $84 million of redemption premiums which have been reflected within the loss on debt extinguishment line in the table above.
The net periodic benefit cost (other than service cost) of pension and other benefit costs are a component of net interest and other financial costs. The increase in 2019 pension and Other Benefit expense was primarily due to lower asset returns than expected for 2018 and a lower asset return assumption used in 2019, partially offset by the natural maturation of the plans.


For additional information on U. S. Steel’s foreign currency exchange activity see Note 16 to the Consolidated Financial Statements and Item 7A. "Quantitative and Qualitative Disclosures about Market Risk – Foreign Currency Exchange Rate Risk.”

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Income TaxesTax

The income tax expense for the year ended December 31, 20192022 was $178$735 million compared to an income tax benefitexpense of $303$170 million in 2018.2021. The tax provision in 2019 does not reflect anychange from the prior year period was primarily due to the tax benefit in the U.S. as a valuation allowance was recorded againstprior year period resulting from the net domestic deferred tax asset (excluding a portion of deferred tax liability related to an asset with an indefinite life, as well as a deferred tax asset related to refundable Alternative Minimum Tax (AMT) credits). Included in the 2018 tax benefit is a benefit of $374 million related to the reversal of a portionrelease of the valuation allowance recorded against the Company’s neton domestic deferred tax asset, as well asassets.

In the third quarter of 2022, Pennsylvania House Bill 1342 was enacted, which in part phased in a benefitcorporate net income tax (CNIT) rate reduction over nine years. The CNIT rate for the 2022 tax year is 9.99%. The CNIT rate will be reduced to 8.99% for the 2023 tax year. Starting with the 2024 tax year, the rate is reduced by 0.5% annually until it reaches 4.99% for the 2031 tax year and each year thereafter. The Company assessed the impact of $38the law change and recorded an additional expense for it of $13 million relatedin 2022 on its Consolidated Financial Statements.

On August 16, 2022, H.R. 5376 (commonly called the Inflation Reduction Act of 2022) was signed into law, which, among other things, implemented a corporate alternative minimum tax (CAMT) of 15 percent on book income of certain large corporations. The CAMT imposes a minimum tax on net income adjusted for certain items prescribed by the legislation and is effective for tax years beginning after December 31, 2022. Although management is currently assessing the impact of the law change and awaiting guidance from the Department of Treasury, the Company anticipates being subject to the reversal of the valuation allowance for current year activity.new CAMT but does not believe that it will have a material impact on its Consolidated Financial Statements.
The net domestic deferred tax asset was $12 million at December 31, 2019, net of an established valuation allowance of $560 million, compared to a net domestic deferred tax asset of $445 million at December 31, 2018, net of an established valuation allowance of $211 million.
At December 31, 2019, the net foreign deferred tax asset was $3 million, net of an established valuation allowance of $3 million. At December 31, 2018, the net foreign deferred tax liability was $14 million, net of an established valuation allowance of $3 million.

For further information on income taxes see Note 11 to the Consolidated Financial Statements.

Net earnings/(loss)earnings attributable to U. S. Steel

Net lossearnings attributable to U. S. Steel in 20192022 was $(630)$2,524 million compared to net earnings of $1,115$4,174 million in 2018.2021. The changes primarily reflected the factors discussed above.

Financial Condition, Liquidity and Capital Resources

Cash Flows and Liquidity

Financial Condition

Capital Requirements
Accounts receivable
decreased
Net Cash Provided by $482 million from December 31, 2018 primarily as a result of lower average realized prices in all of our segments and lower shipments in our European segment.Operating Activities


Inventories decreased by $307 million from December 31, 2018 primarily due to decreased operating levels in our Flat-Rolled and USSE segments.

Long-term restricted cash increased by $151 million primarily related to proceeds from environmental revenue bonds that are restricted to pay for the electric arc furnace construction and certain other capital expenditure projects at the Company's Fairfield Tubular Operations.

Investments and long-term receivables increased by $953 millionfrom year-end 2018 primarily as a result of our purchase of a 49.9% ownership interest in Big River Steel and the call option related to it.

Operating lease assets increased by $230 million from year-end 2018 as a result of the adoption of the new accounting standard for leases (see Note 24 for further details).

Property, plant and equipment, net increased by $582 million from year-end 2018 due to the level of capital expenditures exceeding depreciation expense.

Deferred income tax benefits decreased by $426 million from year-end 2018 primarily because it was determined that it was more likely than not that the net domestic deferred tax asset (excluding a portion of a deferred tax liability related to an asset with an indefinite life, as well as a deferred tax asset related to refundable AMT credits) may not be realized.

Other noncurrent assets increased by $161 million primarily due to the over funded status of our OPEB obligation.


Accounts payable and other accrued liabilities decreased by $481 million from year-end 2018 primarily as a result of decreased operating levels in our Flat-Rolled and USSE segments.

Payroll and benefits payable decreased by $104 million from year-end 2018 primarily due to lower accruals for variable compensation, reclassification of liabilities to noncurrent assets due to the overfunded status of our OPEB obligation, partially offset by employee costs associated with the idling of facilities.

Noncurrent operating lease liabilities increased by $177 million from year-end 2018 as a result of the adoption of
the new accounting standard for leases (see Note 24 for further details).

Long-term debt increased by $1,311 million from year-end 2018 primarily due to the net draw of $600 million on the Fifth Credit Facility Agreement for the purchase of Big River Steel; the issuance of $350 million in 2026 Senior Convertible Notes and increase of $275 million, net of redemptions, in environmental revenue bonds for the construction of an EAF at our Fairfield Tubular Operations.

Employee benefits decreased by $448 million from year-end 2018 primarily due to higher than expected returns on pension plan assets and a reduction in future health care costs partially offset by a lower discount rate.

Deferred credits and other noncurrent liabilities increased by $278 million from year-end 2018 primarily due to the put option related to our purchase of a 49.9% ownership interest in Big River Steel and liabilities associated with the idling of facilities.

Cash Flows

Net cash provided by operating activities was $682$3,505 million in 20192022 compared to $938$4,090 million in 2018.2021. The decrease in 20192022 compared to 20182021 was primarily due to decreased operating results,net earnings, losses on debt extinguishments and income taxes and pension and other post-retirement benefits payables, partially offset by changes in working capital.capital, deferred taxes payable and gains on sale of assets. Changes in working capital can vary significantly depending on factors such as the timing of inventory production and purchases, which is affected by the length of our business cycles as well as our captive raw materials position, customer payments of accounts receivable and payments to vendors in the regular course of business.

Our keycash conversion cycle increased by 6 days in the fourth quarter of 2022 from the fourth quarter of 2021 as shown below:

Cash Conversion Cycle20222021
$ millionsDays$ millionsDays
Accounts receivable, net (a)
$1,634 39$2,089 37
+ Inventories (b)
$2,359 60$2,210 51
- Accounts Payable and Other Accrued Liabilities (c)
$2,831 70$2,684 65
= Cash Conversion Cycle (d)
2923
(a) Calculated as Average Accounts Receivable, net divided by total Net Sales multiplied by the number of days in the period.
(b) Calculated as Average Inventory divided by total Cost of Sales multiplied by the number of days in the period.
(c) Calculated as Average Accounts Payable and Other Accrued Liabilities less bank checks outstanding and other current liabilities divided by total Cost of Sales multiplied by the number of days in the period.
(d) Calculated as Accounts Receivable Days plus Inventory Days less Accounts Payable Days.

The cash conversion cycle is a non-GAAP financial measure. We believe the cash conversion cycle is a useful measure in providing investors with information regarding our cash management performance and is a widely accepted measure of working capital components include accounts receivable and inventory.management efficiency. The accounts receivable and inventory turnover ratios for the years ended December 31, 2019 and 2018 arecash conversion cycle should not be considered in isolation or as follows:an alternative to other GAAP metrics as an indicator of performance.

  Year Ended December 31,
  2019 2018
Accounts Receivable Turnover 9.1
 9.3
Inventory Turnover 6.2
 6.4

The decrease in accounts receivable turnover approximates one day for 2019 as compared to 2018 and is primarily due to decreased sales as a result of decreased shipments in our USSE segment and lower average realized prices across all segments. The decrease in inventory turnover approximates two days for 2019 as compared to 2018 and is primarily due to lower inventory levels from reduced production in our Flat-Rolled and USSE segments.

The last-in, first-out (LIFO)LIFO inventory method is the predominant method of inventory costing infor our Flat-Rolled and Tubular segments. The first-in, first-out FIFO and moving average methods are the United States. At December 31, 2019predominant inventory costing methods for our Mini Mill segment and 2018,the
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FIFO method is the LIFOpredominant inventory costing method accounted for 75 percent and 74 percent of total inventory values, respectively.our USSE segment. In the U.S., management monitors the inventory realizability by comparing the LIFO cost of inventory with the replacement cost of inventory. To the extent the replacement cost (i.e., market value) of inventory is lower than the LIFO cost of inventory, management will write the inventory down. As of December 31, 20192022 and 2018,2021, the replacement cost of the LIFO inventory was higher by approximately $735$1,154 million and $1,038$896 million, respectively.

Our cash conversion cycle increased nine days in the fourth quarter of 2019 from the fourth quarter of 2018 as shown below:


Cash Conversion Cycle2019  2018
 $ millions Days  $ millions Days
Accounts receivable, net (a)
$1,177
 42  $1,659
 42
         
+ Inventories (b)
$1,785
 64  $2,092
 58
         
- Accounts Payable and Other Accrued Liabilities (c)
$1,970
 69  $2,477
 72
         
         
= Cash Conversion Cycle (d)
  37    28
(a) Calculated as Average Accounts Receivable, net divided by total Net Sales multiplied by the number of days in the period.
(b) Calculated as Average Inventory divided by total Cost of Sales multiplied by the number of days in the period.
(c) Calculated as Average Accounts Payable and Other Accrued Liabilities less bank checks outstanding and other current liabilities divided by total Cost of Sales multiplied by the number of days in the period.
(d) Calculated as Accounts Receivable Days plus Inventory Days less Accounts Payable Days.

Net cash provided by operating activities for 20192022 and 20182021 reflects employee benefits payments as shown in the following table.

Employee Benefits Payments

  Year Ended December 31,
(Dollars in millions) 2019 2018
Other employee benefits payments not funded by trusts $45
 $48
Payments to a multiemployer pension plan 77
 60
Pension related payments not funded by trusts 8
 20
Reductions in cash flows from operating activities $130
 $128


Benefits Payments for EmployeesYear Ended December 31,
(Dollars in millions)20222021
Other employee benefits payments not funded by trusts$32 $46 
Payments to a multiemployer pension plan74 75 
Pension related payments not funded by trusts2 11 
    Reductions in cash flows from operating activities$108 $132 
Capital expenditures
Net Cash Used in 2019 were $1.252 billionInvesting Activities

Net cash used in investing activities was $1,679 million in 2022 compared to $1.001 billion$840 million in 2018.2021. The increase in net cash used in investing activities was primarily due to increased capital expenditures (discussed in more detail below) and receipt of $627 million in the prior year for the sale of Transtar, partially offset by the payment of $625 million in the prior year period for the purchase of the remaining equity interest in Big River Steel and proceeds of $54 million in the current year period from government grants.


Capital expenditures in 2022 were $1,769 million compared to $863 million in 2021.
a2019capexcolor.jpg

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2019 Capital Spending
Total capital expenditures for 20192022 were $1.252 billion.$1,769 million. Flat-Rolled capital expenditures were $943$503 million and included spending for the Mon Valley No. 3 Blast Furnace outage, Mon Valley Endless Castingconstruction of a pig iron facility at Gary Works, Keetac DR-grade pellet capability, as well as mining equipment, infrastructure and Rolling, Gary Hot Stripenvironmental projects across the Flat-Rolled footprint. Mini Mill upgrades, Great Lakes B2 Blast Furnace, Midwest Tin Cold Mill upgrades, and various other infrastructure, environmental and strategic projects. Tubular capital expenditures were $145$1,159 million and included $780 million, exclusive of the air separation unit, for the new Big River 2 (BR2) 3 million ton per year facility being built in Osceola, Arkansas, as well as spending for the new continuous galvanizing line (CGL) and non-grain oriented electrical steel facility being built at the existing Big River Steel facility. USSE capital expenditures were $90 million and included spending for the Fairfield Electric Arc Furnace (EAF) project, Offshore Operations threading line and swage extensionblast furnace stoves, 5-stand control system upgrades, wastewater quality improvements, rail bridge upgrades and various other strategic capital projects. USSETubular capital expenditures of $153were $17 million consisted ofand included spending for improved Sinter Strand Emission control, improved Ore Bridges Emission control, the new Dynamo line and various otherto support steelmaking, infrastructure and environmental projects.projects within the Tubular footprint.

Net Cash used in Financing Activities

Net cash used in financing activities was $868 million for the twelve months ended December 31, 2022 compared to net cash used by financing activities of $2,747 million for the same period in 2021. The period over period decrease in cash used in financing activities was primarily due to higher debt repayments made during the prior year, partially offset by the cash received from common stock issuances in the prior year period and repurchases of common stock made in the current year period.

Debt Financing

In 2022, U. S. Steel made payments of debt and redemption premiums of approximately $382 million. The following is a summary of debt repayments for our Senior Secured Notes, Senior Notes and other debt obligations made during the twelve months ended December 31, 2022:
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Year Ended December 31, 2022
Debt Instrument (in millions)DateDebt Extinguished
2037 Senior Notes (a)
Third quarter 202276 
2029 Senior Notes (b)
Third quarter 2022225 
Hoover, AL Environmental Revenue BondsSecond quarter 202214 
2029 Senior Notes (b)
Second quarter 202248 
2029 Senior Notes (b)
First quarter 2022
Total$365 
(a) There were redemption discounts and unamortized debt issuance cost write-offs of $6 million and $1 million , respectively, included in (gain) loss on debt extinguishment on the Consolidated Statement of Operations related to the repayment.
(b) During the twelve months ended December 31, 2022, there were no redemption premiums paid and a net loss of $4 million for the write-off of unamortized discounts and debt issuance costs, included in (gain) loss on debt extinguishment on the Consolidated Statement of Operations, as a result of these debt repayments.

Certain of our credit facilities, including the Credit Facility Agreement, the Big River Steel ABL Facility, the USSK Credit Agreement and the Export Credit Agreement, contain standard terms and conditions including customary material adverse change clauses. If a material adverse change was to occur, our ability to fund future operating and capital requirements could be negatively impacted. The €300 million USSK Credit Agreement contains certain USSK specific financial covenants. There are currently no amounts outstanding under the facility. The USSK Credit Agreement requires USSK to maintain a net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio of less than 3.50:1 for the rolling twelve months ending June 30, 2023. The Company has determined that it may not be able to comply with this covenant at June 30, 2023 based on the currently forecasted EBITDA for the twelve-month period ending June 30, 2023. This could partially or fully limit USSK's ability to borrow under the USSK Credit Agreement. Any amendment or waiver may lead to additional lender protections, including a reduction of loan commitments or less favorable terms, and there can be no assurance that USSK can obtain waivers or amendments in timely fashion, or on acceptable terms or at all. The Company believes that USSK will have adequate cash on hand as of June 30, 2023, and will not need to borrow under the USSK Credit Agreement.

We assumed additional indebtedness in connection with the acquisition of Big River Steel on January 15, 2021. Most of Big River Steel’s prior financing arrangements were secured transactions, with many of the assets of BRS Intermediate Holdings LLC, Big River Steel LLC and BRS Finance Corp. secured as collateral. Until we repay, refinance or otherwise amend the debt arrangements, we remain subject to the restrictive terms of the indentures.

We use surety bonds, trusts and letters of credit to provide financial assurance for certain transactions and business activities. The use of some forms of financial assurance and cash collateral have a negative impact on liquidity. U. S. Steel has committed $178 million of liquidity sources for financial assurance purposes as of December 31, 2022. Increases in certain of these commitments which use collateral are reflected within cash, cash equivalents and restricted cash on the Consolidated Statement of Cash Flows.

The maximum guarantees of the indebtedness of unconsolidated entities of U. S. Steel totaled $7 million at December 31, 2022. If any default related to the guaranteed indebtedness occurs, U. S. Steel has access to its interest in the assets of the investees to reduce its potential losses under the guarantees.

We may from time to time seek to retire or repurchase our outstanding long-term debt through open market purchases, privately negotiated transactions, exchange transactions, redemptions or otherwise. Such purchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements and other factors and may be commenced or suspended at any time. The amounts involved may be material. See Note 17 to the Consolidated Financial Statements for further details regarding U. S. Steel's debt.

Share Repurchases

In the third quarter of 2022, following the completion of the previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program that allows for the repurchase of up to $500 million of its outstanding common stock from time to time in the open market or privately negotiated transactions at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares. Common stock repurchased under our share repurchase programs totaled 37.6 million shares and approximately $849 million in the twelve months ended December 31, 2022. See Note 27 to the Consolidated Financial Statements, “Common Stock Issued and Repurchased” for further details.

Capital Requirements

Our major cash requirements in 2023 are expected to be for capital expenditures, including strategic priorities, employee benefits and operating costs, which includes purchases of raw materials. We ended 2022 with $3,504 million of cash and cash
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equivalents and $5,925 million of total liquidity. Available cash is left on deposit with financial institutions or invested in highly liquid securities with parties we believe to be creditworthy.

Capital expenditures for 20202023 are expected to total approximately $875 million and remain$2.5 billion which are focused largely on strategic infrastructure and environmental projects, as well as continued reinvestment inwe work to increase our equipment to improve our operating reliabilitycapacity and efficiency,raw material and product quality and costfinishing capabilities by focusing on investments in our Mini Mill and Flat-Rolled segment.segments.

U. S. Steel’s contractual commitments to acquire property, plant and equipment at December 31, 2019,2022 totaled $880$2,235 million.

In 2019, U. S. Steel purchased a 49.9% ownership interest in Big River Steel at a purchase price of approximately $710 million including approximately $27 million of transaction costs.

In 2018, U. S. Steel sold its 40% ownership interest in Acero Prime, S. R. L. de CV for a pretax gain of $20 million.

Revolving credit facilities - borrowings, net of financing costs, totaled $860 million in 2019, which represents cash received primarily from borrowings under the Fifth Credit Facility Agreement for the purchase of our 49.9% equity interest in Big River Steel. In 2018, $228 million was borrowed under the USSK Credit Agreement.

Issuance of long-term debt, net of financing costs, totaled $702 million in 2019. In 2019, U. S. Steel issued $368 million under two series of environmental revenue bonds for which it received net proceeds of $362 million after underwriting fees and estimated offering expenses and issued $350 million aggregate principal amount of 2026 Senior Convertible Notes for which it received net proceeds of $340 million after underwriting fees and estimated offering expenses. In 2018, U. S. Steel issued $650 million of 6.250% Senior Notes due March 15, 2026. U. S. Steel received net proceeds from the offering of approximately $640 million after fees of approximately $10 million related to the underwriting and third-party expenses. For further information see Note 17 to the Consolidated Financial Statements.

Repayment of revolving credit facilities totaled $100 million in 2019 and represents repayment on our Fifth Credit Facility Agreement.

Repayment of long-term debt totaled $155 million in 2019. In 2019, U. S. Steel redeemed $148 million in environmental revenue bonds and made principal payments on finance leases of $7 million. In 2018, through a series of open market purchases, U. S. Steel repurchased approximately $75 million aggregate principal amount of its 7.375% Senior Notes due 2020 (7.375% Senior Notes) for an aggregate cash outflow of $80 million which included $5 million of premiums. U. S. Steel then redeemed the remaining $357 million aggregate principal amount of its 7.375% Senior Notes for an aggregate cash outflow of $376 million which included $19 million of premiums. Also in 2018, the Company tendered and then redeemed its $780 million 8.375% Senior Secured Notes due 2021 for an aggregate cash outflow of $840

million which included $60 million of premiums. For further information see Note 17 to the Consolidated Financial Statements.

Common stock repurchased totaled $88 million in 2019. In 2019, U. S. Steel repurchased 5,289,475 shares under its common stock repurchase program that was approved in 2018. In December 2019, the common stock repurchase program was terminated. In 2018, U. S. Steel repurchased 2,760,112 shares under the common stock repurchase program. See Note 27 to the Consolidated Financial Statements, “Common Stock Repurchase Program and Common Stock Issuance” for further details.

For all four quarters in 2019 and 2018, dividends paid per share of U. S. Steel common stock was $0.05. In December 2019, U. S. Steel announced an adjustment to the quarterly dividend amount to $0.01 per share beginning with dividends declared in 2020.

Liquidity

The following table summarizes U. S. Steel’s liquidity as of December 31, 2019:2022:

(Dollars in millions)
Cash and cash equivalents$3,504 
Amount available under Credit Facility Agreement1,746 
Amount available under Big River Steel - Revolving Line of Credit350 
Amounts available under USSK Credit Agreement and USSK Credit Facility325 
Total estimated liquidity$5,925 
(Dollars in millions) 
Cash and cash equivalents$749
Amount available under $2.0 Billion Credit Facility1,380
Amounts available under USSK credit facilities155
Total estimated liquidity$2,284
chart-3f10cf4f4cf051b9915.jpg

x-20221231_g12.jpg
As of December 31, 2019, $2552022, $405 million of the total cash and cash equivalents was held by our foreign subsidiaries. Substantially all of the liquidity attributable to our foreign subsidiaries can be accessed without the imposition of income taxes as a result of the election effective December 31, 2013 to liquidate for U.S. income tax purposes a foreign subsidiary that holds most of our international operations.

U. S. Steel maintains a $2.0 billion asset-backed revolving credit facility (Fifth Credit Facility Agreement). AsWe expect that our estimated liquidity requirements will consist primarily of December 31, 2019, there was $600 million drawn onour 2023 planned strategic capital expenditures, working capital requirements, interest expense, and operating costs and employee benefits for our operations after taking into account the Fifth Credit Facility Agreement. U. S. Steel must maintain a fixed charge negative covenant test of at least 1.00 to 1.00 for the most recent four consecutive quarters when availability under the Fifth Credit Facility Agreement is less than the greater of 10% of the total aggregate commitmentsfootprint actions and $200 million. Based on the four quarters as of December 31, 2019, we would have met this covenant. If we are unable to meet this covenant in future periods, the amount available to the Company under this facility would be reduced by $200 million. On October 30, 2019, we drew $700 million on the Fifth Credit Facility Agreement and on November 14, 2019 repaid $100 million on the facility. On January 26, 2020, U. S. Steel made another payment of $50 million on this facility.

At December 31, 2019, USSK had borrowings of €350 million (approximately $393 million) under its €460 million (approximately $517 million) revolving credit facility (the USSK Credit Agreement). On December 23, 2019 USSK

entered into a supplemental agreement that amended the USSK Credit Agreement leverage covenant and pledged certain USSK trade receivables and inventory as collateral in support of USSK's obligations. If USSK does not comply with the financial covenants it may not be able to draw on the facility until the next measurement date. At December 31, 2019, USSK had availability of €110 million (approximately $124 million) under the USSK Credit Agreement. See Note 17 to the Consolidated Financial Statements, “Debt” for further details.

At December 31, 2019, USSK had no borrowings under its €20 million and €10 million credit facilities (collectively approximately $33 million) and the aggregate availability was approximately $31 million due to approximately $2 million of customs and other guarantees outstanding. These facilities expire in December 2021.
On December 10, 2019, U. S. Steel entered into an Export Credit Agreement (ECA) with KfW IPEX-Bank GMBH and certain other lenders. Funding of the ECA is expected to occur during the first quarter of 2020. The purpose of the ECA is to finance equipment purchased for the endless casting and rolling facility under constructioncost reductions at our Mon Valley Works facility in Braddock, Pennsylvania. Loansplants and headquarters. Our available under the ECA total approximately $288 million and are made up of a Commercial Facility of approximately $38 million and a Covered Facility of approximately $250 million. See Note 17 to the Consolidated Financial Statements, "Debt" for further details.
In March 2018, U. S. Steel issued $650 million aggregate principal amount of 6.250% Senior Notes due March 15, 2026 (2026 Senior Notes). U. S. Steel received net proceeds from the offering of approximately $640 million after fees of approximately $10 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2026 Senior Notes, together with cash on hand, were used to tender or otherwise redeem all of our outstanding 2021 Senior Secured Notes. U. S. Steel will pay interest on the notes semi-annually in arrears on March 15th and September 15th of each year, commencing on September 15, 2018.
We may from time to time seek to retire or repurchase our outstanding long-term debt through open market purchases, privately negotiated transactions, exchange transactions, redemptions or otherwise. Such purchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, and other factors and may be commenced or suspended at any time. The amounts involved may be material.

We use surety bonds, trusts and letters of credit to provide financial assurance for certain transactions and business activities. The use of some forms of financial assurance and cash collateral have a negative impact on liquidity. U. S. Steel has committed $164 million of liquidity sources for financial assurance purposes as of December 31, 2019. Increases in certain of these commitments which use collateral are reflected in restricted cash on the Consolidated Statement of Cash Flows.

At December 31, 2019, in the event of a change in control of U. S. Steel: (a) debt obligations totaling $3,093 million as of December 31, 2019 may be declared due and payable; (b) the Credit Facility Agreement and the USSK credit facilities may be terminated and any amounts outstanding declared due and payable; and (c) U. S. Steel may be required to either repurchase the leased Fairfield slab caster for $19 million or provide a cash collateralized letter of credit to secure the remaining obligation.

The maximum guarantees of the indebtedness of unconsolidated entities of U. S. Steel totaled $4 million at December 31, 2019. If any default related to the guaranteed indebtedness occurs, U. S. Steel has access to its interest in the assets2022 consists principally of the investees to reduce its potential losses under the guarantees.

The following table summarizes U. S. Steel’s contractual obligations at December 31, 2019, and the effect such obligations are expected to have on our liquidity and cash flows in future periods.


(Dollars in millions)           
      Payments Due by Period 
Contractual Obligations Total 2020 2021
through
2022
 2023 through
2024
 Beyond
2024
 
Long-term debt (including interest) and finance leases(a)
 $5,751
 $226
 $450
 $1,463
 $3,612
 
Operating leases(b)
 289
 74
 104
 60
 51
 
Contractual purchase commitments(c)
 4,197
 2,400
 741
 445
 611
 
Capital commitments(d)
 880
 663
 217
 
 
 
Environmental commitments(d)
 186
 53
 
 
 133
(e) 
Steelworkers Pension Trust(f)
 430

79
 172

179



Pensions(g)
 264
 
 
 101
 163
 
Other benefits(h)
 228

48
 93
 87
 

Total contractual obligations $12,225
 $3,543
 $1,777
 $2,335
 $4,570
 
(a)See Note 17 to the Consolidated Financial Statements.
(b)See Note 24 to the Consolidated Financial Statements. Amounts exclude subleases.
(c)Reflects contractual purchase commitments under purchase orders and “take or pay” arrangements. “Take or pay” arrangements are primarily for purchases of gases and certain energy and utility services. Additionally, includes coke and steam purchase commitments related to a coke supply agreement with Gateway Energy & Coke Company LLC (See Note 26 to the Consolidated Financial Statements).
(d)See Note 26 to the Consolidated Financial Statements.
(e)Timing of potential cash flows is not reasonably determinable.
(f)While it is difficult to make a prediction of cash requirements beyond the term of the 2018 Labor Agreements with the USW, which expire on September 1, 2022, projected amounts shown through 2023 assume the contribution rate per hour included in the 2018 Labor Agreements.
(g)Projections are estimates of the minimum required contributions to the main domestic defined benefit pension plan which have been estimated assuming future asset performance consistent with our expected long-term earnings rate assumption, no voluntary contributions during the periods, and that the current low interest rate environment persists. Projections include the impacts of the November 2015 pension stabilization legislation, which further extended a revised interest rate formula to be used in calculating minimum required annual contributions. The legislation also increased the contribution rate of future Pension Benefit Guarantee Corporation (PBGC) premiums. After 2023, payments represent minimum contributions that may be needed over the next five years, and which would fully fund the plan.
(h)The amounts reflect corporate cash outlays for expected benefit payments to be paid by the Company. (See Note 18 to the Consolidated Financial Statements). The accuracy of this forecast of future cash flows depends on future medical health care escalation rates and restrictions related to our trusts for retiree healthcare and life insurance (VEBA) that impact the timing of the use of trust assets. Projected amounts have been reduced to reflect withdrawals from the USW VEBA trust available under its agreements with the USW. Due to these factors, it is not possible to reliably estimate cash requirements beyond five years and actual amounts experienced may differ significantly from those shown.

Contingent lease payments have been excluded from the above table. Contingent lease payments relate to operating lease agreements that include a floating rental charge, which is associated to a variable component. Future contingent lease payments are not determinable to any degree of certainty. U. S. Steel’s annual incurred contingent lease expense is disclosed in Note 24 to the Consolidated Financial Statements. Additionally, recorded liabilities related to deferred income taxes and other liabilities that may have an impact on liquidity and cash flow in future periods, disclosed in Note 11 to the Consolidated Financial Statements, are excluded from the above table.

U. S. Steel will monitor the funded status of the pension plan to determine when voluntary contributions may be prudent in order to mitigate potentially larger mandatory contributions in later years. The funded status of U. S. Steel’s pension plans is disclosed in Note 18 to the Consolidated Financial Statements.

The following table summarizes U. S. Steel’s commercial commitments at December 31, 2019, and the effect such commitments could have on our liquidity and cash flows in future periods.

(Dollars in millions)           
    Scheduled Reductions by Period 
Commercial Commitments Total 2020 2021
through
2022
 2023
through
2024
 Beyond
2024
 
Standby letters of credit(a)
 $36
 $25
 $1
 $
 $10
(b) 
Surety bonds(a)
 109
 
 
 
 109
(b) 
Funded Trusts(a)
 3
 
 
 
 3
(b) 
Total commercial commitments $148
 $25
 $1
 $
 $122
 
(a)Reflects a commitment or guarantee for which future cash outflow is not considered likely.
(b)Timing of potential cash outflows is not determinable.

Our major cash requirements in 2020 are expected to be for capital expenditures, including strategic priorities and asset revitalization, employee benefits and operating costs, which includes purchases of raw materials. We ended 2019 with $749 million of cash and cash equivalents and $2,284 millionavailable borrowings under the Credit Facility Agreement, Big River Steel ABL Facility, USSK Credit Agreement and the USSK Credit Facility. Management continues to evaluate market conditions in our industry and our global liquidity position, and may consider additional actions to further strengthen our balance sheet and optimize liquidity, including but not limited to the repayment or refinancing of total liquidity. Available cash is left on deposit with financial institutions or invested in highly liquid securities with parties we believeoutstanding debt and the incurrence of additional debt to be creditworthy.opportunistically finance strategic projects. The Company may also return excess liquidity to shareholders through share repurchases and dividends from time to time.

U. S. Steel management believes that U. S. Steel’s liquidity will be adequate to satisfy our obligations for the foreseeable future, including obligations to complete currently authorized capital spending programs. Future requirements for U. S. Steel’s business needs, including the funding of acquisitions and capital expenditures, scheduled debt maturities, repurchase of debt, share buybacks, dividends, contributions to employee benefit plans and any amounts that may ultimately be paid in connection with contingencies, are expected to be funded by a combination of internally generated funds (including asset sales), proceeds from the sale of stock, borrowings, refinancings and other external financing sources. The following table summarizes the Company's contractual obligations at December 31, 2022, and the effect such obligations are expected to have on our liquidity and cash flows in future periods.
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(Dollars in millions)
Payments Due by Period
Contractual ObligationsTotal20232024
through
2025
2026 through
2027
Beyond
2027
Debt (including interest) and finance leases(a)
$6,940 $297 $628 $1,029 $4,986 
Operating leases(b)
177 58 74 35 10 
Contractual purchase commitments(c)
6,262 4,707 610 552 393 
Capital commitments(d)
2,235 1,683 552 — — 
Environmental commitments(d)
126 32 — — 94 
Steelworkers Pension Trust(e)
430 84 170 176 — 
Employee related benefits(f)
177 38 71 68 — 
Total contractual obligations$16,347 $6,899 $2,105 $1,860 $5,483 
(a) See Note 17 to the Consolidated Financial Statements.
(b) See Note 24 to the Consolidated Financial Statements.
(c) Reflects estimated contractual purchase commitments under purchase orders and “take or pay” arrangements. “Take or pay” arrangements are primarily for purchases of gases and certain energy and utility services.
(d) See Note 26 to the Consolidated Financial Statements.
(e) While it is difficult to make a prediction of cash requirements beyond the term of the 2022 Labor Agreements with the USW, which expire on September 1, 2026, projected amounts shown through 2027 assume the contribution rate per hour included in the 2022 Labor Agreements of $4.00 per hour worked.
(f) The amounts reflect corporate cash outlays for expected benefit payments to be paid by the Company. (See Note 18 to the Consolidated Financial Statements.) The accuracy of this forecast of future cash flows depends on future medical health care escalation rates and restrictions related to our trusts for retiree healthcare and life insurance (VEBA) that impact the timing of the use of trust assets. Projected amounts have been reduced to reflect withdrawals from the USW VEBA trust available under its agreements with the USW. Due to these factors, it is not possible to reliably estimate cash requirements beyond five years and actual amounts experienced may differ significantly from those shown.

Other Commercial Commitments

The following table summarizes U. S. Steel’s commercial commitments at December 31, 2022, and the effect such commitments could have on our liquidity and cash flows in future periods.
(Dollars in millions)
Scheduled Reductions by Period
Commercial CommitmentsTotal20232024
through
2025
2026
through
2027
Beyond
2027
Standby letters of credit(a)
$53 $32 $$— $20 (b)
Surety bonds(a)
95 — — — 95 (b)
Funded Trusts(a)
31 — — — 31 (b)
Total commercial commitments$179 $32 $$— $146 
(a)Reflects a commitment or guarantee for which future cash outflow is not considered likely.
(b)Timing of potential cash outflows is not determinable.

Off-Balance Sheet Arrangements

U. S. Steel has invested in several joint ventures that are reported as equity investments. Several of these investments involved a transfer of assets in exchange for an equity interest. U. S. Steel has supply arrangements with several of these joint ventures.

U. S. Steel’s other off-balance sheet arrangements include guarantees, indemnifications, unconditional purchase obligations, surety bonds, trusts and letters of credit disclosed in Note 26 to the Consolidated Financial Statements.

Derivative Instruments

See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for discussion of derivative instruments and associated market risk for U. S. Steel.




Environmental Matters

U. S. Steel’s environmental expenditures were as follows:
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(Dollars in millions)      (Dollars in millions)
 2019 2018 2017202220212020
North America:      North America:
Capital $96
 $105
 $6
Capital$38 $27 $36 
Compliance      Compliance
Operating & maintenance 213
 198
 176
Operating & maintenance255 201 188 
Remediation(a)
 22
 6
 9
Remediation(a)
18 57 37 
Total North America $331
 $309
 $191
Total North America$311 $285 $261 
USSE:      USSE:
Capital $27
 $20
 $46
Capital$6 $— $
Compliance      Compliance
Operating & maintenance 10
 12
 11
Operating & maintenance11 10 
Remediation(a)
 8
 9
 7
Remediation(a)
6 
Total USSE $45
 $41
 $64
Total USSE$23 $17 $17 
Total U. S. Steel $376
 $350
 $255
Total U. S. Steel$334 $302 $278 
(a) These amounts include spending charged against remediation reserves, net of recoveries where permissible, but do not include non-cash provisions recorded for environmental remediation.

U. S. Steel’s environmental capital expenditures accounted for 102 percent of total capital expenditures in 20192022 and 123 percent in 20182021 and 106 percent in 2017.2020.

Environmental compliance expenditures represented 2 percent of U. S. Steel's total costs and expenses in 2019, 20182022, 2021 and 2017.2020. Remediation spending during 20172020 through 20192022 was mainly related to remediation activities at former and present operating locations.

For discussion of other relevant environmental items see “Part I, Item 3. Legal Proceedings – Environmental Proceedings.”

The following table shows activity with respect to environmental remediation liabilities for the years ended December 31, 20192022 and December 31, 2018.2021. These amounts exclude liabilities related to asset retirement obligations accounted for in accordance with ASC Topic 410. See Note 19 to the Consolidated Financial Statements.

(Dollars in millions)20222021
Beginning Balance$158 $146 
Plus: Additions20 43 
Adjustments for changes in estimates3 — 
Less: Obligations settled(55)(31)
Ending Balance$126 $158 
(Dollars in millions) 2019 2018
Beginning Balance $187
 $179
Plus: Additions 20
 14
Less: Obligations settled (21) (6)
Ending Balance $186
 $187

New or expanded environmental requirements, which could increase U. S. Steel’s environmental costs, may arise in the future. U. S. Steel intends to comply with all legal requirements regarding the environment, but since many of them are not fixed or presently determinable (even under existing legislation) and may be affected by future legislation, it is not possible to predict accurately the ultimate cost of compliance, including remediation costs which may be incurred and penalties which may be imposed. U. S. Steel’s environmental capital expenditures are expected to be approximately $66$84 million in 2020, $52023, $15 million of which is related to projects at USSE. U. S. Steel's environmental expenditures for 20202023 for operating and maintenance and for remediation projects are expected to be approximately $215$232 million and $60$42 million, respectively, of which approximately $10$13 million and $5 million for operating and maintenance and remediation, respectively, is related to USSE. Although, the outcome of pending environmental matters areis not estimable at this time, it is reasonably possible that U. S. Steel's environmental capital and operating and maintenance expenditures could materially increase as a result of the future resolution of these matters. Predictions of future environmental expenditures beyond 20202023 can only be broad-based estimates, which have varied, and will continue

to vary, due to the ongoing evolution of specific regulatory requirements, the possible imposition of more stringent requirements and the availability of new technologies to remediate sites, among other factors.

Accounting Standards

See Notes 2 and 3 to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

U. S. Steel is exposed to certain risks related to its ongoing business operations, including financial, market, political, and economic risks. The following discussion provides information regarding U. S. Steel’s exposure to the risks of changing foreign currency exchange rates, commodity prices and interest rates.

U. S. Steel may enter into derivative financial instrument transactions in order to manage or reduce these market risks. The use of derivative instruments is subject to our corporate governance policies. These instruments are used solely to mitigate market exposure and are not used for trading or speculative purposes.

U. S. Steel may elect to use hedge accounting for certain commodity or currency transactions. For those transactions, the impact of the hedging instrument will be recognized in other comprehensive income until the transaction is settled. Once the transaction is settled, the effect of the hedged item will be recognized in income. For further information regarding derivative instruments see Notes 1 and 16 to the Consolidated Financial Statements.

Foreign Currency Exchange Rate Risk

U. S. Steel through USSE, is subject to the risk of price fluctuations due to the effects of exchange rates on revenues and operating costs, firm commitments for capital expenditures and existing assets or liabilities denominated in currencies other than the U.S. dollar, particularly the euro. U. S. Steel historically has made limited use of forward currency contracts to manage exposure to certain currency price fluctuations. U. S. Steel elected cash flow hedge accounting for euro foreign exchange forwards prospectively effective July 1, 2019. Foreign currency derivative instruments entered into prior to July 1, 2019 have been marked-to-market and the resulting gains or losses recognized in the current period in net interest and other financial costs. At December 31, 2019 and December 31, 2018, U. S. Steel had no material open euro forward salesexchange contracts for U.S. dollars that were subject to mark-to-market accounting (total notional valueas of approximately $153 million and $344 million, respectively). A 10 percent increase in the December 31, 2019 euro forward rates would result in a $15 million charge to income.2022.

The fair value of our derivatives is determined using Level 2 inputs, which are defined as “significant other observable” inputs. The inputs used include quotes from counterparties that are corroborated with market sources.

Volatility in the foreign currency markets could have significant implications for U. S. Steel as a result of foreign currency transaction effects. Future foreign currency impacts will depend upon changes in currencies and the extent to which we engage in derivatives transactions. For additional information on U. S. Steel’s foreign currency exchange activity, see Note 16 to the Consolidated Financial Statements.

Commodity Price Risk and Related Risks

In the normal course of our business, U. S. Steel is exposed to market risk or price fluctuations related to the purchase, production or sale of steel products. U. S. Steel is also exposed to price risk related to the purchase, production or sale of coal, coke, natural gas, steel scrap, iron ore and pellets, and zinc, tin and other nonferrous metals used as raw materials. U. S. Steel is also subject to market price risk for the purchase of a portion of its electricity at certain facilities. See Note 16 to the Consolidated Financial Statements for further details on U. S. Steel’s derivatives.

U. S. Steel’s market risk strategy has generally been to obtain competitive prices for our products and services and allow operating results to reflect market price movements dictated by supply and demand; however, from time to time U. S. Steel has made forward physical purchases to manage exposure to price risk related to the purchases of natural gas and certain non-ferrous metals used in the production process. As of December 31, 2019,2022, U. S. Steel, did not havethrough U. S. Steel Europe, had $12 million forward buy contracts for zinc. There were no forward buy contracts for natural gas or any of the other significant raw materials that it usesused in itsthe domestic production process.


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Interest Rate Risk

U. S. Steel is subject to the effects of interest rate fluctuations on the fair value of certain of our non-derivative financial instruments. A sensitivity analysis of the projected incremental effect of a hypothetical 10 percent increase/decrease in year-end 20192022 and 20182021 interest rates on the fair value of U. S. Steel’s non-derivative financial instruments is provided in the following table:

(Dollars in millions)20222021
Non-Derivative Financial Instruments(a)
Fair Value(b)
Change in
Fair Value
(c)
Fair Value(b)
Change in
Fair  Value
(c)
Financial liabilities:
Debt(d)(e)
$3,815 $116 $4,379 $143 
(a)Fair values of cash and cash equivalents, current accounts and notes receivable, accounts payable, bank checks outstanding and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.
(Dollars in millions) 2019 2018
Non-Derivative Financial Instruments(a)
 
Fair Value(b)
 
Change in
Fair Value
(c)
 
Fair Value(b)
 
Change in
Fair  Value
(c)
Financial liabilities:        
Debt(d)(e)
 $3,576
 $138
 $2,182
 $102
(b)See Note 20 to the Consolidated Financial Statements for carrying value of instruments.
(a)Fair values of cash and cash equivalents, current accounts and notes receivable, accounts payable, bank checks outstanding and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.
(b)See Note 20 to the Consolidated Financial Statements for carrying value of instruments.
(c)Reflects, by class of financial instrument, the estimated incremental effect of a hypothetical 10 percent change in interest rates at December 31, 2019 and 2018, on the fair value of U. S. Steel’s non-derivative financial instruments. For financial liabilities, this assumes a 10 percent decrease in the weighted average yield to maturity of U. S. Steel’s long-term debt at December 31, 2019 and December 31, 2018.
(d)Excludes finance lease obligations.
(e)Fair value was determined using Level 2 inputs which were derived from quoted market prices and is based on the yield on public debt where available or current borrowing rates available for financings with similar terms and maturities.
(c)Reflects, by class of financial instrument, the estimated incremental effect of a hypothetical 10 percent change in interest rates at December 31, 2022, and 2021, on the fair value of U. S. Steel’s non-derivative financial instruments. For financial liabilities, this assumes a 10 percent decrease in the weighted average yield to maturity of U. S. Steel’s long-term debt at December 31, 2022 and December 31, 2021.
(d)Excludes finance lease obligations.
(e)Fair value was determined using Level 2 inputs which were derived from quoted market prices and is based on the yield on public debt where available or current borrowing rates available for financings with similar terms and maturities.

U. S. Steel’s sensitivity to interest rate declines and corresponding increases in the fair value of our debt portfolio would unfavorably affect our results and cash flows only to the extent that we elected to repurchase or otherwise retire all or a portion of our fixed-rate debt portfolio at prices above carrying value.

60
Other Risks


U. S. Steel's purchaseTable of a 49.9% equity ownership interest in Big River Steel on October 31, 2019 included certain call and put options. U. S. Steel marks these options to fair value each reporting period using a Monte Carlo simulation which is considered a Level 3 valuation technique. Level 3 valuation techniques include inputs to the valuation methodology that are considered unobservable and significant to the fair value measurement. The simulation relies on assumptions that include Big River Steel's future equity value, volatility, the risk free interest rate and U. S. Steel's credit spread. Changes in the key assumptions can cause significant fluctuations in the value of the puts and calls that are recorded in net interest and other financial costs in our Consolidated Statement of Operations. The net change in fair value of the options during 2019 resulted in a $7 million increase to net interest and other financial costs. See Note 5 and Note 20 to the Consolidated Financial Statements for further details.Contents



Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is set forth in our Consolidated Financial Statement contained in this Annual Report on Form 10-K. Specific financial statements can be found at the page listed below:

PAGE

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MANAGEMENT’S REPORT TO STOCKHOLDERS

February 3, 2023
February 14, 2020

To the Stockholders of United States Steel Corporation:

Financial Statements and Practices

The accompanying consolidated financial statements of United States Steel Corporation are the responsibility of and have been prepared by United States Steel Corporation in conformity with accounting principles generally accepted in the United States of America. They necessarily include some amounts that are based on our best judgments and estimates. United States Steel Corporation’s financial information displayed in other sections of this report is consistent with these financial statements.

United States Steel Corporation seeks to assure the objectivity and integrity of its financial records by careful selection of its managers, by organizational arrangements that provide an appropriate division of responsibility and by communication programs aimed at assuring that its policies, procedures and methods are understood throughout the organization.

United States Steel Corporation has a comprehensive, formalized system of internal controls designed to provide reasonable assurance that assets are safeguarded, that financial records are reliable and that information required to be disclosed in reports filed with or submitted to the Securities and Exchange Commission is recorded, processed, summarized and reported within the required time limits. Appropriate management monitors the system for compliance and evaluates it for effectiveness, and the auditors independently measureindependent registered public accounting firm measures its effectiveness and recommendrecommends possible improvements thereto.

The Board of Directors exercises its oversight role in the area of financial reporting and internal control over financial reporting through its Audit Committee. This committee, composed solely of independent directors, regularly meets (jointly and separately) with the independent registered public accounting firm, management, internal audit and other executives to monitor the proper discharge by each of their responsibilities relative to internal control over financial reporting and United States Steel Corporation’s financial statements.

Internal Control Over Financial Reporting

United States Steel Corporation’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of United States Steel Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, United States Steel Corporation conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.















Based on this evaluation, United States Steel Corporation’s management concluded that United States Steel Corporation’s internal control over financial reporting was effective as of December 31, 2019.2022.

The effectiveness of United States Steel Corporation’s internal control over financial reporting as of December 31, 20192022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.



/S/S/    DAVID B. BURRITT
/S/    JESSICA T. GRAZIANOS/    CHRISTINE S. BREVES
David B. BurrittChristine S. BrevesJessica T. Graziano
President and

Chief Executive Officer
Senior Vice President and

Chief Financial Officer


/S/    MANPREET S. GREWAL   S/    KIMBERLY D. FAST
Kimberly D. FastManpreet S. Grewal
ActingVice President, Controller
& Chief Accounting Officer

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of United States Steel Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of United States Steel Corporation and its subsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2019,2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20192022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report to Stockholders on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.


Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit mattersmatter communicated below are mattersis a matter arising from the current period audit of the consolidated financial statements that werewas communicated or required to be communicated to the audit committee and that (i) relaterelates to accounts or
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disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattersmatter below, providing a separate opinionsopinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.it relates.

Realizability of Deferred Tax AssetsGoodwill Impairment Test – Mini Mill Reporting Unit

As described in Notes 1 and 1114 to the consolidated financial statements, the Company has total deferred tax assets of $422 million, which is net of a valuation allowance of $563Company’s consolidated goodwill balance was $920 million as of December 31, 2019. The Company records a valuation allowance to reduce deferred tax assets2022, which included $916 million relating to the amount thatMini Mill reporting unit. Goodwill is deemed to have an indefinite life and is not amortized, but is subject to impairment testing annually, or more likely than not tofrequently if events or changes in circumstances indicate the asset might be realized. A valuation allowanceimpaired. Management performs an annual goodwill impairment test as of October 1 and monitors for interim triggering events on an ongoing basis. Fair value is recorded if,determined by management using an income approach based on a discounted five year forecasted cash flow including a terminal value. The assumptions about future cash flows and growth rates are based on the weightrespective reporting unit’s long-term forecast. The Mini Mill reporting unit’s discount rate is a significant assumption and is a risk-adjusted weighted average cost of all available positive and negative evidence, it is more likely than not that some portion, or all, ofcapital, which management believes approximates the rate from a deferred tax asset will not be realized. After weighing all the positive and negative evidence, the Company determined that it was more likely than not that the net domestic deferred tax asset (excluding a portion of a deferred tax liability related to an asset with an indefinite life, as well as a deferred tax asset related to refundable AMT credits) may not be realized. As a result, the Company recorded a $334 million non-cash charge to tax expense in 2019.market participant’s perspective.

The principal considerations for our determination that performing procedures relating to the realizabilitygoodwill impairment test of deferred tax assetsthe Mini Mill reporting unit is a critical audit matter are there was(i) the significant judgment by management in determiningwhen developing the amountfair value estimate of deferred tax assets that were more likely than not to be realized in the future. This in turn led toMini Mill reporting unit; (ii) a high degree of auditor judgment, subjectivity, and subjectivityeffort in applying our auditperforming procedures relatingand evaluating management’s significant assumption related to management’s determination of the amount of deferred tax assets that were more likely than not to be realized indiscount rate; and (iii) the future, and significant audit effort was necessary in evaluatinginvolved the weighinguse of the positiveprofessionals with specialized skill and negative evidence.knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to income taxes,management’s goodwill impairment test, including controls over management’s assessmentthe valuation of the realizability of deferred tax assets, which included assessing positive and negative evidence.Mini Mill reporting unit. These procedures also included, among others (i) testing management’s process for assessingdeveloping the amountfair value estimate; (ii) evaluating the appropriateness of deferred tax assets that are more likely than not to be realized; evaluating management’s weighing of positive and negative evidence;the discounted cash flow model; (iii) testing the completeness and relevanceaccuracy of underlying data used;used in the discounted cash flow model; and (iv) evaluating the assumptionsreasonableness of the significant assumption used by management includingrelated to the uncertainty regarding the Company’s ability to generate domestic income in the near term.discount rate. Evaluating management’s assumptionsassumption related to generating domestic income in the near termdiscount rate involved evaluating whether the assumptionssignificant assumption used by management werewas reasonable considering the current and past performance of the Company and the consistency with external market and industry data.


Fair Value of Options

As described in Notes 5 and 20 to the consolidated financial statements, a wholly-owned subsidiary of
U. S. Steel purchased a 49.9% ownership interest in Big River Steel in 2019. The transaction included a call option (U. S. Steel Call Option) to acquire the remaining 50.1% within the next four years at an agreed-upon price formula, which in years three and four is based on Big River Steel’s achievement of certain metrics. The transaction also included options where the other Big River Steel equity owners can require U. S. Steel to purchase their 50.1% ownership interest (Class B Common Put Option) or require U. S. Steel to sell its ownership interest (Class B Common Call Option) at an agreed-upon price if the U. S. Steel Call Option expires. All of the options are marked to fair value each period using a Monte Carlo simulation which relies on assumptions regarding Big River Steel's equity value, volatility, the risk free interest rate and credit spread. The value of the U. S. Steel Call Option, the Class B Common Put Option and Class B Common Call Option are $166 million, $192 million and $2 million, respectively, as of December 31, 2019. The net change in fair value of the options during 2019 resulted in a $7 million increase to net interest and other financial costs.

The principal considerations for our determination that performing procedures relating to the fair value of options is a critical audit matter are there was significant judgment by management when developing the fair value of these options using the Monte Carlo simulation. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing our audit procedures relating to the fair value of options and the significant assumptions of Big River Steel’s equity value, volatility, the risk free interest rate and credit spread used in developing the estimate. Also, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the fair value of the options, including controls over the Company’s methods, significant assumptions, and data. The procedures also included, among others, developing an independent range of values for each option and performing a comparison of management’s estimate to the independently developed range to evaluate the reasonableness of management’s estimate. Developing the independent range of values involved (i) developing an independent Monte Carlo simulation model, (ii) testing the completeness and accuracy of the contractual information used by management to calculate the agreed-upon price to acquire the remaining 50.1% ownership interest in Big River Steel within the next four years, (iii) evaluating the reasonableness of, and testing the accuracy of the inputs used by management to estimate the Big River Steel equity value, and (iv) independently developing risk-free rate, credit spread and volatility assumptions. Professionals with specialized skill and knowledge were used to assist in developingevaluating (i) the independent Monte Carlo simulationappropriateness of the Company’s discounted cash flow model and (ii) the independent rangereasonableness of values and evaluating the audit evidence.discount rate assumption.



/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
February 14, 20203, 2023

We have served as the Company’s auditor since 1903.




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UNITED STATES STEEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
(Dollars in millions, except per share amounts)202220212020
Net sales:
Net sales$19,123 $18,964 $8,765 
Net sales to related parties (Note 23)
1,942 1,311 976 
Total (Note 6)21,065 20,275 9,741 
Operating expenses (income):
Cost of sales (excludes items shown below)16,777 14,533 9,555 
Selling, general and administrative expenses422 426 277 
Depreciation, depletion and amortization (Notes 13 and 14)791 791 643 
(Earnings) loss from investees (Note 12)(243)(170)117 
Gain on sale of Transtar (Note 5) (506)— 
Asset impairment charges (Note 1)163 273 263 
Restructuring and other charges (Note 25)48 128 138 
Gain on equity investee transactions (Note 12)(6)(111)(31)
Net gains on sale of assets(12)(7)(149)
Other (gains) losses, net(35)(28)
Total17,905 15,329 10,816 
Earnings (loss) before interest and income taxes3,160 4,946 (1,075)
Interest expense159 313 280 
Interest income(44)(4)(7)
Loss on debt extinguishment (Note 7) 292 — 
Other financial costs (benefits)32 46 (16)
Net periodic benefit income(246)(45)(25)
Net interest and other financial (benefits) costs (Note 7)(99)602 232 
Earnings (loss) before income taxes3,259 4,344 (1,307)
Income tax expense (benefit) (Note 11)735 170 (142)
Net earnings (loss)2,524 4,174 (1,165)
Less: Net earnings attributable to noncontrolling interests — — 
Net earnings (loss) attributable to United States Steel Corporation$2,524 $4,174 $(1,165)
Earnings (loss) per common share (Note 8)
Earnings (loss) per share attributable to United States Steel Corporation stockholders:
—  Basic$10.22 $15.77 $(5.92)
—  Diluted$9.16 $14.88 $(5.92)
  Year Ended December 31,
(Dollars in millions, except per share amounts) 2019 2018 2017
Net sales:      
Net sales $11,506
 $12,758
 $11,046
Net sales to related parties (Note 23)
 1,431
 1,420
 1,204
Total (Note 6) 12,937
 14,178
 12,250
Operating expenses (income):      
Cost of sales (excludes items shown below) 12,082
 12,305
 10,858
Selling, general and administrative expenses 289
 336
 320
Depreciation, depletion and amortization (Notes 13 and 14) 616
 521
 501
Earnings from investees (Note 12) (79) (61) (44)
Gain on equity investee transactions (Note 12) 
 (38) (2)
Gain associated with U. S. Steel Canada Inc. (Note 5) 
 
 (72)
Restructuring and other charges (Note 25) 275
 
 31
Net gain on disposals of assets (1) (6) (5)
Other income, net (15) (3) (6)
Total 13,167
 13,054
 11,581
(Loss) earnings before interest and income taxes (230) 1,124
 669
Interest expense 142
 168
 226
Interest income (17) (23) (17)
Loss on debt extinguishment (Note 7) 
 98
 54
Other financial costs 6
 
 44
Net periodic benefit cost (other than service cost) (Note 3) (a)
 91
 69
 61
Net interest and other financial costs (Note 7) 222
 312
 368
(Loss) earnings before income taxes (452) 812
 301
Income tax provision (benefit) (Note 11) 178
 (303) (86)
Net (loss) earnings (630) 1,115
 387
Less: Net earnings attributable to noncontrolling interests 
 
 
(Loss) earnings attributable to United States Steel Corporation $(630) $1,115
 $387
(Loss) earnings per common share (Note 8)      
(Loss) earnings per share attributable to United States Steel Corporation stockholders:      
—  Basic $(3.67) $6.31
 $2.21
—  Diluted $(3.67) $6.25
 $2.19

(a) Represents postretirement benefit expense as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018 (see Note 3 for further details).

The accompanying notes are an integral part of these Consolidated Financial Statements.


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UNITED STATES STEEL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
  Year Ended December 31,
(Dollars in millions) 2019 2018 2017
Net (loss) earnings $(630) $1,115
 $387
Other comprehensive income (loss), net of tax:      
Changes in foreign currency translation adjustments (a)
 (22) (60) 189
Changes in pension and other employee benefit accounts (a)
 573
 (107) 462
Changes in derivative financial instruments (a)
 (3) (14) 1
Total other comprehensive income (loss), net of tax 548
 (181) 652
Comprehensive income including noncontrolling interest (82) 934
 1,039
Comprehensive income attributable to noncontrolling interest 
 
 
Comprehensive income attributable to United States Steel Corporation $(82) $934
 $1,039

Year Ended December 31,
(Dollars in millions)202220212020
Net earnings (loss)$2,524 $4,174 $(1,165)
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments (a)
(91)(78)68 
Changes in pension and other employee benefit accounts (a)
(297)433 385 
Changes in derivative financial instruments (a)
(28)23 (22)
Total other comprehensive (loss) income, net of tax(416)378 431 
Comprehensive income (loss) including noncontrolling interest2,108 4,552 (734)
Comprehensive income (loss) attributable to noncontrolling interest — — 
Comprehensive income (loss) attributable to United States Steel Corporation$2,108 $4,552 $(734)
(a) Related income tax benefit (provision)(expense)
Foreign currency translation adjustments$24 $32 $(16)
Pension and other benefits adjustments95 (147)(123)
Derivative adjustments9 (6)
Foreign currency translation adjustments (b)
 $6
 $
 $
Pension and other benefits adjustments (b)
 (191) 
 
Derivative adjustments (b)
 1
 
 

(b) Amounts for 2018 and 2017 do not reflect a tax benefit as a result of a full valuation allowance on our domestic deferred tax assets.

The accompanying notes are an integral part of these Consolidated Financial Statements.

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UNITED STATES STEEL CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31,
(Dollars in millions)20222021
Assets
Current assets:
Cash and cash equivalents (Note 9)$3,504 $2,522 
Receivables, less allowance of $38 and $441,485 1,968 
Receivables from related parties (Note 23)150 121 
Inventories (Note 10)2,359 2,210 
Other current assets368 331 
Total current assets7,866 7,152 
Long-term restricted cash (Note 9)31 76 
Investments and long-term receivables, less allowance of $4 in both periods (Note 12)840 694 
Operating lease assets (Note 24)146 185 
Property, plant and equipment, net (Note 13)8,492 7,254 
Intangibles, net (Note 14)478 519 
Deferred income tax benefits (Note 11)10 32 
Goodwill (Note 14)920 920 
Other noncurrent assets675 984 
Total assets$19,458 $17,816 
Liabilities
Current liabilities:
Accounts payable and other accrued liabilities$2,873 $2,809 
Accounts payable to related parties (Note 23)143 99 
Payroll and benefits payable493 425 
Accrued taxes271 365 
Accrued interest67 68 
Current operating lease liabilities (Note 24)49 58 
Short-term debt and current maturities of long-term debt (Note 17)63 28 
Total current liabilities3,959 3,852 
Noncurrent operating lease liabilities (Note 24)105 136 
Long-term debt, less unamortized discount and debt issuance costs (Note 17)3,914 3,863 
Employee benefits (Note 18)209 235 
Deferred income tax liabilities (Note 11)456 122 
Deferred credits and other noncurrent liabilities504 505 
Total liabilities9,147 8,713 
Contingencies and commitments (Note 26)
Stockholders’ Equity
Common stock issued — 282,487,412 and 279,522,227 shares issued (par value $1 per share, authorized 400,000,000 shares) (Note 8)283 280 
Treasury stock, at cost (54,089,559 shares and 15,708,839 shares)(1,204)(334)
Additional paid-in capital5,194 5,199 
Retained earnings6,030 3,534 
Accumulated other comprehensive (loss) income (Note 21)(85)331 
Total United States Steel Corporation stockholders’ equity10,218 9,010 
Noncontrolling interests93 93 
Total liabilities and stockholders’ equity$19,458 $17,816 
  December 31,
(Dollars in millions) 2019 2018
Assets    
Current assets:    
Cash and cash equivalents (Note 9) $749
 $1,000
Receivables, less allowance of $28 and $29 956
 1,435
Receivables from related parties (Note 23) 221
 224
Inventories (Note 10) 1,785
 2,092
Other current assets 102
 79
Total current assets 3,813
 4,830
Long-term restricted cash (Note 9) 188
 37
Investments and long-term receivables, less allowance of $5 in both periods (Note 12) 1,466
 513
Operating lease assets (Note 24) 230
 
Property, plant and equipment, net (Note 13) 5,447
 4,865
Intangibles — net (Note 14) 150
 158
Deferred income tax benefits (Note 11) 19
 445
Other noncurrent assets 295
 134
Total assets $11,608
 $10,982
Liabilities    
Current liabilities:    
Accounts payable and other accrued liabilities $1,970
 $2,454
Accounts payable to related parties (Note 23) 84
 81
Payroll and benefits payable 336
 440
Accrued taxes 116
 118
Accrued interest 45
 39
Current operating lease liabilities (Note 24) 60
 
Short-term debt and current maturities of long-term debt (Note 17) 14
 65
Total current liabilities 2,625
 3,197
Noncurrent operating lease liabilities (Note 24) 177
 
Long-term debt, less unamortized discount and debt issuance costs (Note 17) 3,627
 2,316
Employee benefits (Note 18) 532
 980
Deferred income tax liabilities (Note 11) 4
 14
Deferred credits and other noncurrent liabilities 550
 272
Total liabilities 7,515
 6,779
Contingencies and commitments (Note 26) 

 

Stockholders’ Equity    
Common stock issued — 178,555,206 and 177,386,430 shares issued (par value $1 per share, authorized 400,000,000 shares) (Note 8) 179
 177
Treasury stock, at cost (8,509,337 shares and 2,857,578 shares) (173) (78)
Additional paid-in capital 4,020
 3,917
Retained earnings 544
 1,212
Accumulated other comprehensive loss (Note 21) (478) (1,026)
Total United States Steel Corporation stockholders’ equity 4,092
 4,202
Noncontrolling interests 1
 1
Total liabilities and stockholders’ equity $11,608
 $10,982


The accompanying notes are an integral part of these Consolidated Financial Statements.

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UNITED STATES STEEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,
(Dollars in millions) 2019 2018 2017
Increase (decrease) in cash and cash equivalents      
Operating activities:      
Net (loss) earnings $(630) $1,115
 $387
Adjustments to reconcile net cash provided by operating activities:      
Depreciation, depletion and amortization (Notes 13 and 14) 616
 521
 501
Gain associated with retained interest in U. S. Steel Canada Inc. (Note 5) 
 
 (72)
Gain on equity investee transactions (Note 12) 
 (38) (2)
Restructuring and other charges (Note 25) 275
 
 31
Loss on debt extinguishment (Note 7) 
 98
 54
Pensions and other post-employment benefits 101
 77
 (16)
Deferred income taxes (Note 11) 202
 (329) (72)
Net gain on disposal of assets (1) (6) (5)
Equity investees earnings, net of distributions received (74) (47) (32)
Changes in:      
Current receivables 453
 (312) (36)
Inventories 296
 (374) (117)
Current accounts payable and accrued expenses (473) 282
 225
Income taxes receivable/payable 13
 (8) (52)
All other, net (96) (41) 32
Net cash provided by operating activities 682
 938
 826
Investing activities:      
Capital expenditures (1,252) (1,001) (505)
Investment in Big River Steel (710) 
 
Disposal of assets 4
 10
 5
Proceeds from sale of ownership interests in equity investees 
 30
 116
Investments, net 
 (2) (2)
Net cash used in investing activities (1,958) (963) (386)
Financing activities:      
Revolving credit facilities - borrowings, net of financing costs 860
 228
 
Revolving credit facilities - repayments (100) 
 
Issuance of long-term debt, net of financing costs (Note 17) 702
 640
 737
Repayment of long-term debt (Note 17) (155) (1,299) (1,127)
Common stock repurchased (Note 27) (88) (75) 
Receipts from exercise of stock options (Note 15) 
 35
 20
Taxes paid for equity compensation plans (Note 15) (7) (8) (10)
Dividends paid (35) (36) (35)
Net cash provided by (used in) financing activities 1,177
 (515) (415)
Effect of exchange rate changes on cash (2) (17) 17
Net (decrease) increase in cash, cash equivalents and restricted cash (101) (557) 42
Cash, cash equivalents and restricted cash at beginning of year (Note 9) 1,040
 1,597
 1,555
Cash, cash equivalents and restricted cash at end of year (Note 9) $939
 $1,040
 $1,597

Year Ended December 31,
(Dollars in millions)202220212020
Increase (decrease) in cash and cash equivalents
Operating activities:
Net earnings (loss)$2,524 $4,174 $(1,165)
Adjustments to reconcile net cash provided by operating activities:
Depreciation, depletion and amortization (Notes 13 and 14)791 791 643 
Gain on sale of Transtar (Note 5) (506)— 
Asset impairment charges (Note 1)163 273 263 
Gain on equity investee transactions (Note 12)(6)(111)(31)
Restructuring and other charges (Note 25)48 128 138 
Loss on debt extinguishment (Note 7) 292 — 
Pensions and other post-employment benefits(213)15 (21)
Deferred income taxes (Note 11)501 (52)(130)
Net gain on sale of assets(12)(7)(149)
Equity investees (earnings) loss, net of distributions received(215)(168)117 
Changes in:
Current receivables370 (955)98 
Inventories(222)(677)506 
Current accounts payable and accrued expenses(180)783 (29)
Income taxes receivable/payable(15)161 20 
All other, net(29)(51)(122)
Net cash provided by operating activities3,505 4,090 138 
Investing activities:
Capital expenditures(1,769)(863)(725)
Acquisition of Big River Steel, net of cash acquired (Note 5) (625)— 
Investment in Big River Steel — (9)
Proceeds from sale of Transtar (Note 5) 627 — 
Proceeds from cost reimbursement government grants (Note 26)54 — — 
Proceeds from sale of assets32 26 167 
Proceeds from sale of ownership interests in equity investees (Note 12)12 — 
Other investing activities(8)(5)(4)
Net cash used in investing activities(1,679)(840)(563)
Financing activities:
Issuance of short-term debt, net of financing costs (Note 17) — 240 
Repayment of short-term debt (Note 17) (180)(70)
Revolving credit facilities - borrowings, net of financing costs (Note 17) 50 1,402 
Revolving credit facilities - repayments (Note 17) (911)(1,621)
Issuance of long-term debt, net of financing costs (Note 17)343 864 1,148 
Repayment of long-term debt (Note 17)(382)(3,183)(13)
Net proceeds from public offering of common stock (Note 27) 790 410 
Proceeds from Stelco Option Agreement, net of financing costs (Note 20) — 94 
Common stock repurchased (Note 27)(849)(150)— 
Proceeds from government incentives (Note 26)82 — — 
Other financing activities(62)(27)(9)
Net cash (used in) provided by financing activities(868)(2,747)1,581 
Effect of exchange rate changes on cash(19)(21)23 
Net increase in cash, cash equivalents and restricted cash939 482 1,179 
Cash, cash equivalents and restricted cash at beginning of year (Note 9)2,600 2,118 939 
Cash, cash equivalents and restricted cash at end of year (Note 9)$3,539 $2,600 $2,118 
See Note 22 for supplemental cash flow information.

The accompanying notes are an integral part of these Consolidated Financial Statements.

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UNITED STATES STEEL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Dollars in MillionsShares in Thousands
202220212020202220212020
Common stock:
Balance at beginning of year$280 $229 $179 279,522 229,106 178,555 
Common stock issued3 51 50 2,965 50,416 50,551 
Balance at end of year$283 $280 $229 282,487 279,522 229,106 
Treasury stock:
Balance at beginning of year$(334)$(175)$(173)(15,709)(8,673)(8,509)
Common stock repurchased(849)(150)— (37,559)(6,557)— 
Common stock (repurchased) reissued for employee/non-employee director stock plans(21)(9)(2)(822)(479)(164)
Balance at end of year$(1,204)$(334)$(175)(54,090)(15,709)(8,673)
Additional paid-in capital:
Balance at beginning of year$5,199 $4,402 $4,020 
Dividends on common stock (5)(6)
Common stock issued 742 360 
Employee stock plans72 60 28 
Cumulative effect upon adoption of Accounting Standards Update 2020-06(77)— — 
Balance at end of year$5,194 $5,199 $4,402 
  Dollars in Millions Shares in Thousands
  2019 2018 2017 2019 2018 2017
Common stock:            
Balance at beginning of year $177
 $176
 $176
 177,386
 176,425
 176,425
Common stock issued 2
 1
 
 1,169
 961
 
Balance at end of year $179
 $177
 $176
 178,555
 177,386
 176,425
Treasury stock:            
Balance at beginning of year $(78) $(76) $(182) (2,858) (1,203) (2,614)
Common stock repurchased (88) (75) 
 (5,289) (2,760) 
Common stock (repurchased) reissued for employee/non-employee director stock plans (7) 73
 106
 (362) 1,105
 1,411
Balance at end of year $(173) $(78) $(76) (8,509) (2,858) (1,203)
Additional paid-in capital:            
Balance at beginning of year $3,917
 $3,932
 $4,027
      
Dividends on common stock 
 
 (26)      
Issuance of conversion option in 2026 Senior Convertible Notes, net of tax 77
 
 
      
Employee stock plans 26
 (15) (69)      
Balance at end of year $4,020
 $3,917
 $3,932
      

The accompanying notes are an integral part of these Consolidated Financial Statements.

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UNITED STATES STEEL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Continued)

    Comprehensive (Loss) Income
(Dollars in millions) 2019 2018 2017 2019 2018 2017
Retained earnings:            
Balance at beginning of year $1,212
 $133
 $(250)      
Net (loss) earnings attributable to United States Steel Corporation (630) 1,115
 387
 $(630) $1,115
 $387
Dividends on common stock (35) (36) (9)      
Other (3) 
 5
      
Balance at end of year $544
 $1,212
 $133
      
Accumulated other comprehensive (loss) income:            
Pension and other benefit adjustments (Note 18):
            
Balance at beginning of year $(1,416) $(1,309) $(1,771)      
Changes during year, net of taxes (a)
 580
 (108) 454
 580
 (108) 454
Changes during year, equity investee net of taxes (a)
 (7) 1
 8
 (7) 1
 8
Balance at end of year $(843) $(1,416) $(1,309)      
Foreign currency translation adjustments:            
Balance at beginning of year $403
 $463
 $274
      
Changes during year, net of taxes (a)
 (22) (60) 189
 (22) (60) 189
Balance at end of year $381
 $403
 $463
      
Derivative financial instruments:            
Balance at beginning of year $(13) $1
 $
      
Changes during year, net of taxes (a)
 (3) (14) 1
 (3) (14) 1
Balance at end of year $(16) $(13) $1
      
Total balances at end of year $(478) $(1,026) $(845)      
Total stockholders’ equity $4,092
 $4,202
 $3,320
      
Noncontrolling interests:            
Balance at beginning of year $1
 $1
 $1
      
Net loss 
 
 
 
 
 
Balance at end of year $1
 $1
 $1
      
Total comprehensive (loss) income       $(82) $934
 $1,039

Comprehensive Income (Loss)
(Dollars in millions)202220212020202220212020
Retained earnings:
Balance at beginning of year$3,534 $(623)$544 
Net earnings (loss) attributable to United States Steel Corporation2,524 4,174 (1,165)$2,524 $4,174 $(1,165)
Dividends on common stock(50)(18)(2)
Cumulative effect upon adoption of Accounting Standards Update 2020-0622 — — 
Other — 
Balance at end of year$6,030 $3,534 $(623)
Accumulated other comprehensive (loss) income:
Pension and other benefit adjustments (Note 18):
Balance at beginning of year$(25)$(458)$(843)
Changes during year, net of taxes (a)
(304)433 360 (304)433 360 
Changes during year, equity investee net of taxes (a)
7 — 25 7 — 25 
Balance at end of year$(322)$(25)$(458)
Foreign currency translation adjustments:
Balance at beginning of year$371 $449 $381 
Changes during year, net of taxes (a)
(91)(78)68 (91)(78)68 
Balance at end of year$280 $371 $449 
Derivative financial instruments:
Balance at beginning of year$(15)$(38)$(16)
Changes during year, net of taxes (a)
(28)23 (22)(28)23 (22)
Balance at end of year$(43)$(15)$(38)
Total balances at end of year$(85)$331 $(47)
Total stockholders’ equity$10,218 $9,010 $3,786 
Noncontrolling interests:
Balance at beginning of year$93 $93 $
Stelco Option Agreement — 93 
Other — (1)
Net loss — —  — — 
Balance at end of year$93 $93 $93 
Total comprehensive income (loss)$2,108 $4,552 $(734)
(a) Related income tax benefit (provision)(expense):
Foreign currency translation adjustments (b)
 $6
 $
 $
Pension and other benefits adjustments (b)
 (191) 
 
Derivative adjustments (b)
 1
 
 
Foreign currency translation adjustments$24 $32 $(16)
Pension and other benefits adjustments95 (147)(123)
Derivative adjustments9 (6)

(b)
Amounts for 2018 and 2017 do not reflect a tax benefit as a result of a full valuation allowance on our domestic deferred tax assets.


The accompanying notes are an integral part of these Consolidated Financial Statements.

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1. Nature of Business and Significant Accounting Policies

Nature of Business
U. S. Steel produces and sells steel products, including flat-rolled and tubular products, in North America and Europe. Operations in the United States also include iron ore and coke production facilities railroad services and real estate operations. Operations in Europe also include coke production facilities.

Significant Accounting Policies

Principles applied in consolidation
These financial statements include the accounts of U. S. Steel and its majority-owned subsidiaries. Additionally, variable interest entities for which U. S. Steel is the primary beneficiary are included in the Consolidated Financial Statements, and their impacts are either partially or completely offset by noncontrolling interests. Intercompany accounts, transactions and profits have been eliminated in consolidation.

Investments in entities over which U. S. Steel has significant influence are accounted for using the equity method of accounting and are carried at U. S. Steel’s share of net assets plus loans, advances and our share of earnings less distributions.

Earnings or loss from investees includes U. S. Steel’s share of earnings or loss from equity method investments (and any amortization of basis differences), which are generally recorded a month in arrears, except for significant and unusual items which are recorded in the period of occurrence.arrears.

Use of estimates
Generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at year-end and the reported amounts of revenues and expenses during the year. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment; intangible assets; the fair value of assets or liabilities acquired in a business combination; valuation allowances for receivables, inventories and deferred income tax assets and liabilities; environmental liabilities; liabilities for potential tax deficiencies; potential litigation claims and settlements; assets and obligations related to employee benefits; put and call option and contingent forward purchase commitment assets and liabilitiesliabilities; and restructuring and other charges. Actual results could differ materially from the estimates and assumptions used.

The preparation of the financial statements includes an assessment of certain accounting matters using all available information including consideration of forecasted financial information in context with other information reasonably available to us. However, our future assessment of current expectations could result in material impacts to our consolidated financial statements in future reporting periods. All such adjustments are of a normal recurring nature unless disclosed otherwise.

Sales recognition
Sales are recognized when U. S. Steel's performance obligations are satisfied. Generally, U. S. Steel’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time, when title transfers to our customer for product shipped or when services are provided. Revenues are recorded net of any sales incentives. Shipping and other transportation costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. See Note 6 for further details on U. S. Steel’s revenue.

Inventories
Inventories are carried at the lower of cost or market.net realizable value. Fixed costs related to abnormal production capacity are expensed in the period incurred rather than capitalized into inventory.

LIFO (last-in, first-out) is the predominant method of inventory costing for inventories inheld by the United StatesFlat-Rolled and Tubular segments. The Mini Mill segment uses a moving average costing method to account for semi-finished and finished products and FIFO (first-in, first-out)to account for raw materials. FIFO is the predominant method in Europe.used by the USSE segment. The LIFO method of inventory costing was used on 7543 percent and 7446 percent of consolidated inventories at December 31, 20192022, and 2018,2021, respectively.

Derivative instruments
From time to time, U. S. Steel may use fixed price forward physical purchase contracts to partially manage our exposure to price risk. Generally, forward physical purchase contracts qualify for the normal purchase normal sales exclusion in Accounting Standards Codification (ASC) 815, Derivatives and Hedging, and are not subject to mark-to-market accounting. U. S. Steel also uses derivatives such as commodity-based financial swaps and foreign currency exchange forward contracts to manage its exposure to purchase and sale price fluctuations and foreign currency exchange rate risk. U. S. Steel electsThe USSE and Flat-Rolled segments elect hedge accounting for some of itstheir derivatives. Under hedge accounting, fluctuations in the value of the derivative are recognized in Accumulated Other Comprehensive Incomeother comprehensive (loss) income (AOCI) until
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the associated underlying is recognized in earnings. When the associated underlying is recognized in earnings, the value of the derivative is reclassified to earnings from AOCI. We recognizeThe Mini Mill segment has not elected hedge accounting. Therefore, the changes in fair value

of the Mini Mill segment's foreign exchange forwards, as well as fair value changes for other derivatives where hedge accounting has not been elected, are recognized immediately in earnings. In accordance with the guidance in ASC Topic 820 on fair value measurements and disclosures, the fair value of our foreign exchange forwards, commodity purchase swaps and sales swaps was determined using Level 2 inputs, which are defined as "significant other observable" inputs. The inputs used are from market sources that aggregate data based upon market transactions. See Note 16 for further details on U. S. Steel’s derivatives.

Financial Instruments
U. S. Steel's purchase of a 49.9% equity ownership interest in Big River Steel on October 31, 2019 included certain call and put options. U. S. Steel marks these options to fair value each reporting period using a Monte Carlo simulation which is considered a Level 3 valuation technique. Level 3 valuation techniques include inputs to the valuation methodology that are considered unobservable and significant to the fair value measurement. See Note 5 and Note 20 for further details.

Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and is depreciated on a straight-line basis over the estimated useful lives of the assets.

Depletion of mineral properties is based on rates which are expected to amortize cost over the estimated tonnage of minerals to be removed.

When property, plant and equipment is sold or otherwise disposed of, any gains or losses are reflected in income. If a loss on disposal is expected, such losses are recognized when the assets are reclassified as assets held for sale or when impaired as part of an asset group’s impairment.

Asset Impairment
U. S. Steel evaluates impairment of its property, plant and equipment whenever circumstances indicate that the carrying value may not be recoverable. We evaluate the impairment of long-lived assets at the asset group level. Our asset groups are Flat-Rolled,flat-rolled, mini mill, welded tubular, seamless tubular and U. S. Steel Europe (USSE).USSE. Asset impairments are recognized when the carrying value of an asset group exceeds its recoverable amount as determined by the asset group's aggregate projected undiscounted cash flows.

DuringIn the second quarter 2022, the Company recognized charges of approximately $151 million for the write-off of the blast furnaces and related fixed assets for the permanent idling of the iron making process at the Company's Great Lakes Works facility, which had been idled on an indefinite basis during 2020. The coil finishing process at Great Lakes Works continues to operate and remains a component of the Company's operating plans.

In December 2021, the Company permanently idled the steel making process at Great Lakes Works, which had been idled on an indefinite basis during 2020. As a result of this decision, the Company recognized charges of approximately $128 million for the write-off of the BOP, steel casting and hot strip mill related fixed assets. In addition, in October 2021, equipment at Gary Works related to steel production intended for petroleum conveying pipe were written-off resulting in a charge of approximately $88 million.

In May 2019, U. S. Steel announced that it planned to construct a new endless casting and rolling facility at its Edgar Thomson Plant in Braddock, Pennsylvania, and a cogeneration facility at its Clairton Plant in Clairton, Pennsylvania, both part of the challenging steel market environmentCompany's Mon Valley Works. The Company purchased certain equipment for this project before delaying groundbreaking in March 2020 in response to COVID-19. In April 2021, the U.S. that ledCompany determined not to pursue this project, re-evaluated the use of the already purchased equipment, and subsequently transferred suitable equipment to the idlingMini Mill segment to be used on the planned, three-million-ton mini mill flat-rolled facility to be constructed. Total impairments of certain Flat-Rolled facilities,$56 million were recognized for this project in 2021.

For the challenging steelperiod ended March 31, 2020, the steep decline in oil prices that resulted from market in Europe that led tooversupply and declining demand was considered a triggering event for the temporary idlingwelded tubular and seamless tubular asset groups. A quantitative analysis was completed for both asset groups and a $263 million impairment, consisting of a blast furnacean impairment of $196 million for property, plant and significant headcount reductions at USSE,equipment and recent losses in$67 million for intangible assets was recorded for the welded tubular asset group while no impairment was indicated for the seamless tubular asset group. There were consideredno other triggering events for thosethat required an impairment evaluation of our long-lived asset groups respectively.during the years-ended December 31, 2022 and 2021.

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Goodwill and identifiable intangible assets
Goodwill represents the excess of the cost over the fair value of acquired identifiable tangible and intangible assets and liabilities assumed from businesses acquired. Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to impairment testing annually, or more frequently if events or changes in circumstances indicate the asset might be impaired. We perform our annual goodwill impairment test as of October 1 and monitor for interim triggering events on an ongoing basis.

We review goodwill for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test. If we choose to perform a qualitative assessment and we determine that the fair value of the reporting unit more likely than not exceeds the carrying value, no further evaluation is necessary. For reporting units where we perform the quantitative goodwill impairment test, we compare the fair value of each reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, we do not consider the goodwill impaired. If the carrying value is higher than the fair value, we recognize the difference as an impairment loss.

A quantitative goodwill impairment testing process requires valuation of the respective reporting unit, which we primarily determine using an income approach based on a discounted five year forecasted cash flow including a terminal value. We compute the terminal value using the constant growth method, which values the forecasted cash flows in perpetuity. The assumptions about future cash flows and growth rates are based on the respective reporting unit's long-term forecast and are subject to review and approval by senior management. A reporting unit's discount rate is a significant assumption and is a risk-adjusted weighted average cost of capital, which we believe approximates the rate from a market participant's perspective. The estimated fair value could be impacted by changes in market conditions, interest rates, growth rates, tax rates, costs, pricing and capital expenditures. We categorize the fair value determination as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs.

Our Mini Mill reporting unit holds the goodwill recognized as a result of the Company's acquisition of Big River Steel and currently is our only reporting unit that has a significant amount of goodwill. This goodwill is primarily attributable to Big River Steel's operational abilities, workforce and the anticipated benefits from their recent expansion. U. S. Steel completed its annual goodwill impairment test using a quantitative analysis during the fourth quarter of 2022 and determined there was no impairment of goodwill.

Intangible assets with indefinite lives are also subject to at least annual impairment testing, which compares the fair value of the intangible assets with their carrying amounts. U. S. Steel has determined that certain of its long-livedacquired intangible assets have indefinite useful lives. These assets are also reviewed for these asset groupsimpairment annually in the fourth quarter and determined thatwhenever events or circumstances indicate the assets werecarrying value may not impaired. There were no triggering events for seamless tubular in 2019.

There were no triggering events in 2018 that required fixed assets to be evaluated for impairment.
Change in Accounting Estimate - Capitalization and Depreciation Method
During 2017,recoverable. U. S. Steel completed a reviewits annual evaluation of its accounting policy for property, plantindefinite-lived water rights using a qualitative assessment and equipment depreciateddetermined there was no indication of impairment.

Finite-lived intangible assets are amortized on a group basis. As a result of this review, U. S. Steel changed its accounting methodstraight-line basis over their estimated useful lives and are tested for property, plant and equipment fromimpairment when events occur that indicate that the group method of depreciation to the unitary method of depreciation, effective as of January 1, 2017. The Company believes the change from the group method to the unitary method of depreciation is preferable under U.S. GAAP as it results in a more precise estimate of depreciation expense. Additionally, the change to the unitary method of depreciation is consistent with the depreciation method applied by our competitors, and improves the comparability of our results to the results of our competitors. Our change in the method of depreciation was considered a change in accounting estimate effected by a change in accounting principle and has been applied prospectively. Due to the application of the unitary method of depreciation and resultant change in our capitalization policy, maintenance and outage spending that had previously been expensed as well as capital investments associated with our asset revitalization program are now capitalized if the useful life of the related asset is extended.
When property, plant, and equipment are disposed of by sale, retirement, or abandonment, the gross value of the property, plant and equipment and corresponding accumulated depreciation are removed from the Company’s financial accounting records. Due to the application of the unitary method of depreciation, any gain or loss resulting from an asset disposal by sale is now immediately recognized as a gain or loss on the disposal of assets line in our consolidated statement of operations. Assets that are retired or abandoned are reflected as an immediate charge to depreciation expense for any remainingnet book value in our consolidated statement of operations.will not be recovered over future cash flows.


Environmental remediation
Environmental expenditures are capitalized if the costs mitigate or prevent future contamination or if the costs improve existing assets’ environmental safety or efficiency. U. S. Steel provides for remediation costs and penalties when the responsibility to remediate is probable and the amount of associated costs is reasonably estimable. The timing of remediation accruals typically coincides with completion of studies defining the scope of work to be undertaken or when it is probable that a formal plan of action will be approved by the oversight agency. Remediation liabilities are accrued based on estimates of believed environmental exposure and are discounted if the amount and timing of the cash disbursements are readily determinable.

Asset retirement obligations
Asset retirement obligations (AROs) are initially recorded at fair value and are capitalized as part of the cost of the related long-lived asset and depreciated in accordance with U. S. Steel’s depreciation policies for property, plant and equipment. The fair value of the obligation is determined as the discounted value of expected future cash flows. Accretion expense is recorded each month to increase this discounted obligation over time. Certain AROs related to disposal costs of the majority of assets at our integrated steel facilities are not recorded because they have an indeterminate settlement date. These AROs will be initially recognized in the period in which sufficient information exists to estimate their fair value. See Note 19 for further details on U. S. Steel's AROs.

Pensions and other post-employment benefits
U. S. Steel has defined contribution or multi-employermultiemployer arrangements for pension benefits for more than three-quarters80 percent of its employees in the United States and defined benefit pension plans covering the remaining employees. For hires before January 1, 2016, U. S. Steel has defined benefit retiree health care and life insurance plans (Other Benefits) that cover its represented employees in North America upon their retirement. Government-sponsored programs into which U. S. Steel
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makes required contributions cover the majority of U. S. Steel’s European employees. For more details regarding pension and other post-employment benefits see Note 18 of the Consolidated Financial Statements.

The pension and Other Benefits obligations and the related net periodic benefit costs are based on, among other things, assumptions ofregarding the discount rate, estimated return on plan assets, salary increases, the projected mortality of participants and the current level and future escalation of health care costs. Additionally, U. S. Steel recognizes an obligation to provide post-employment benefits for disability-related claims covering indemnity and medical payments for certain employees in North America. The obligation for these claims and the related periodic costs are measured using actuarial techniques and assumptions. Actuarial gains and losses occur when actual experience differs from any of the many assumptions used to value the benefit plans, or when assumptions change. For pension and Other Benefits, the Company recognizes into income on an annual basis a portion of unrecognized actuarial net gains or losses that exceed 10 percent of the larger of projected benefit obligations or plan assets (the corridor). These unrecognized amounts in excess of the corridor are amortized over the plan participants' average life expectancy or average future service, depending on the demographics of the plan. Unrecognized actuarial net gains and losses for disability-related claims are immediately recognized into income.

Deferred taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The realization of deferred tax assets is assessed quarterly based on several interrelated factors. These factors include U. S. Steel’s expectation to generate sufficient future taxable income and the projected time period over which these deferred tax assets will be realized. U. S. Steel records a valuation allowance when necessary to reduce deferred tax assets to the amount that will more likely than not be realized. See Note 11 for further details of deferred taxes.

Reclassifications and Adjustments
Certain reclassifications of prior years' data have been made to conform to the current year presentation including the following:

U. S. Steel reclassified certain prior year data as a result of the retrospective adoption on January 1, 2018 of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments andASU 2017-07, Compensation - Retirement Benefits. See Note 3 for further details.

2. New Accounting Standards

In October 2021, the FASB issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. ASU 2021-08 is effective to public companies for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption of all amendments in the same period permitted. The Company will apply the guidance prescribed by ASU 2021-08 to business combinations, if any, that take place subsequent to the effective date.

In September 2022, the FASB issued Accounting Standards Update 2022-04, Disclosure of Supplier Finance Program Obligations (ASU 2022-04). ASU 2022-04 requires that an entity disclose certain information about supplier finance programs used in connection with the purchase of goods and services. ASU 2022-04 is effective for all entities with fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption of all amendments is permitted. The Company will adopt the interim disclosure requirements as applicable during the first quarter 2023 and the annual disclosure requirements except for the annual rollforward in the 2023 Form 10-K. The Company will adopt the annual rollforward disclosure requirement in the 2024 Form 10-K.

3. Recently Adopted Accounting Standards
In August 2020, the FASB issued Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 also requires entities to provide expanded disclosures about the terms and features of convertible instruments and amends certain guidance in ASC 260 on the computation of earnings per share (EPS) for convertible instruments and contracts on an entity’s own equity. The update requires entities to use the If-Converted Method for calculating diluted EPS, retiring the previous alternative calculation of the Treasury Stock Method for calculating diluted EPS for convertible instruments.
U. S. Steel has adopted this guidance using the modified retrospective implementation method as of January 1, 2022. The cumulative effect of the changes made to our consolidated January 1, 2022, balance sheet for the adoption of ASU 2020-06 was as follows:
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(in millions)Balance as of December 31, 2021Adjustments due to ASU 2020-06Balance as of January 1, 2022
Consolidated Balance Sheet
Assets
Deferred income tax benefits$32$4$36
Liabilities
Long-term debt, less unamortized discount and debt issuance costs$3,863$74$3,937
Deferred income tax liabilities$122$(15)$107
Equity
Additional paid-in capital$5,199$(78)$5,121
Retained Earnings$3,534$22$3,556
In November 2021, the FASB issued Accounting Standards Update 2021-10, Disclosures by Business Entities about Government Assistance (ASU 2021-10). ASU 2021-10 provides expanded disclosure requirements for business entities that account for a transaction with a government by applying a grant or contribution accounting model by analogy. The Company adopted this guidance effective January 1, 2022. The adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements.
In December 2019, the Financial Accounting Standards Board (FASB) IssuedFASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 simplifies accounting for income taxes by removing certain exceptions from the general principles in Topic 740 including elimination of the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items such as other comprehensive income. ASU 2019-12 also clarifies and amends certain guidance in Topic 740. ASU 2019-12 is effective for public companies for fiscal years beginning after December 15, 2020, including interim periods, with early adoption of all amendments in the same period permitted. U. S. Steel is currently assessing the impactadopted this guidance on January 1, 2021. The adoption of the ASU, but doesthis guidance did not believe it will have a material impact on itsthe Company's Consolidated Financial Statements.

In March 2020, the FASB issued Accounting Standards Update 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides optional exceptions for applying generally accepted accounting principles to modifications of contracts, hedging relationships, and other transactions that reference LIBOR or another rate that will be discontinued by reference rate reform if certain criteria are met. The guidance was effective beginning on March 12, 2020 and the amendments were applied prospectively through December 31, 2022. U. S. Steel adopted this guidance during 2020. The adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which adds an impairment model that is based on expected losses rather than incurred losses. UnderU. S. Steel's significant financial instruments which are valued at cost are trade receivables (receivables). U. S. Steel's receivables carry standard industry terms and are categorized in two receivable pools, U.S. and USSE. Both pools use customer specific risk ratings based on customer financial metrics, past payment experience and other factors and qualitatively consider economic conditions to assess the level of allowance for doubtful accounts. USSE mitigates credit risk for approximately 76 percent of its receivables balance using credit insurance, letters of credit, bank guarantees, prepayments or other collateral. ASU 2016-13 an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 iswas effective for public companies for fiscal years beginning after December 15, 2019, including interim reporting periods, with early adoption permitted.periods. U. S. Steel is inadopted this standard effective January 1, 2020. The impact of adoption was not material to the process of adopting this ASU and does not expect it to have a significant impact on its Consolidated Financial Statements.

3. Recently Adopted Accounting Standards

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14). ASU 2018-14 removes certain disclosures that the FASB no longer considers cost beneficial, adds certain disclosure requirements and clarifies others. U. S. Steel early-adopted ASU 2018-14 for purposes of its year end disclosures. Accordingly, we removed disclosure of amounts in AOCI expected to be recognized as components of net periodic benefit cost over the next year and removed the disclosure of a one-percentage-point change in assumed health care cost trend rates. In addition, we added disclosure to include an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. See Note 18 for further details.

In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02). Under ASU 2016-02, for operating leases, a lessee should recognize in its statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term; recognize a single lease cost, which is allocated over the lease term, generally on a straight line basis, and classify all cash payments within operating activities in the statement of cash flows. For finance leases, a lessee is required to recognize a right-of-use asset and a lease liability; recognize interest on the lease liability separately from amortization of the right-of-use asset, and classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) -Targeted Improvements (ASU 2018-11), which provides an option to use a modified retrospective transition method at the adoption date. U. S. Steel adopted the new lease accounting standard effective January 1, 2019 using the optional modified retrospective transition method outlined in ASU 2018-11. As a result of the adoption, an operating lease asset and current and noncurrent liabilities for operating leases were recorded, and there was an insignificant reduction in prior year retained earnings for the cumulative effect of adoption for operating leases where payment started after lease commencement. See Note 24 for further details.

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (ASU 2017-07). ASU 2017-07 requires an employer who offers defined benefit and postretirement benefit plans to report the service cost component of the net periodic benefit cost in the same line item or items as other compensation cost arising from services rendered by employees during the period. The other components of net periodic benefit costs are required to be presented on a retrospective basis in the statement of operations separately from the service cost component and outside a subtotal of income from operations, if one is presented. The ASU also allows for the service cost component of net periodic benefit cost to be eligible for capitalization into inventory when

applicable. ASU 2017-07 was effective for periods beginning after December 15, 2017, including interim periods within those annual periods; early adoption was permitted. U. S. Steel adopted ASU 2017-07 on January 1, 2018. U. S. Steel has historically capitalized the service cost component of net periodic benefit cost into inventory, when applicable, and will continue to do so prospectively.

The effect of the retrospective presentation change related to the net periodic benefit cost of our defined benefit pension and other post-employment benefits (OPEB) plans on our consolidated statement of operations was as follows:

Year Ended December 31, 2017
Statement of Operations (In millions) As Revised Previously Reported Effect of Change Higher/(Lower)
Cost of Sales $10,858
 $10,864
 $(6)
Selling, general and administrative expenses 320
 375
 (55)
Net periodic benefit cost (other than service cost) 61
 
 61

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18). The ASU reduced diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows by including restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. On January 1, 2018, U. S. Steel adopted the provisions of ASU 2016-18 using a retrospective transition method. As a result, a $3 million cash outflow was removed from the investing activities section in the Consolidated Statements of Cash Flows for the year ended December 31, 2017 as changes in restricted cash are now included in the beginning-of-period and end-of-period total cash, cash equivalents and restricted cash amounts. Expanded disclosures have been included, which describe the components of cash shown on the Company's Consolidated Statements of Cash Flows. See Note 9 for further details.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 reduced diversity in practice in how certain transactions are classified in the statement of cash flows by addressing eight specific cash receipt and cash payment issues. On January 1, 2018, U. S. Steel adopted the provisions of ASU 2016-15 using a retrospective transition method. As a result, all payments to extinguish debt will now be presented as cash outflows from financing activities on our Consolidated Statements of Cash Flows in accordance with ASU 2016-15. U. S. Steel has historically presented make-whole premiums as cash outflows from operating activities. There was $23 million of cash outflows for make-whole premiums that were reclassified from cash provided by operating activities to the repayment of long-term debt line within the cash used in financing activities section on the Consolidated Statements of Cash Flows for the year-ended December 31, 2017. The other cash receipt and cash payment items addressed in ASU 2016-15 did not have an impact on the Company’s Consolidated Statements of Cash Flows. Additionally, the Company has elected to use the cumulative earnings approach as defined in ASU 2016-15 to classify distributions received from equity method investees.

U. S. Steel's adoption of the following ASU's did not have a material impact on U. S. Steel's financial position, results of operations or cash flows:


Effective DateAccounting Standard Update
January 1, 20172015-11Simplifying the Measurement of Inventory
January 1, 20172016-09Compensation - Stock Compensation
January 1, 20182014-09Revenue from Contracts with Customers
January 1, 20182017-09Compensation - Stock Compensation: Scope of Modification Accounting
January 1, 20182017-12Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
July 1, 20182018-02Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
January 1, 20192018-07Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting
January 1, 20192018-15Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs in a Cloud Computing Arrangement That is a Service Contract


4. Segment Information

U. S. Steel has 3four reportable segments: North American Flat-Rolled, (Flat-Rolled),Mini Mill, USSE and Tubular Products (Tubular).Products. The results of our real estate business, the previously held equity method investment in Big River Steel, and of our former railroad and real estate businesses that do not constitute reportable segments are combined and disclosed in the Other Businesses category. The majority of U. S. Steel's customers are located in North America and Europe. No single customer accounted for more than 10 percent of gross annual revenues.

The Flat-Rolled segment includes the operating results of U. S. Steel’s integrated steel plants and equity investees in the United States (except for Big River Steel, which is included in Other Businesses) involved in the production of slabs, strip mill plates, sheets and tin mill products, as well as all pig iron, iron ore and coke production facilities in the United States. These operations primarily serve North American customers in the service center, conversion, transportation (including automotive), construction, container and appliance and electrical markets.

The Mini Mill segment reflects the acquisition of Big River Steel after the purchase of the remaining equity interest on January 15, 2021 (see Note 5 for further details) and BR2 facility, which is under construction in Osceola, Arkansas. As of December 31, 2021, the Mini Mill segment includes the operating results of U. S. Steel’s two electric arc furnace steel
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plant in Osceola, Arkansas involved in the production of sheets and electrical products. These operations primarily serve North American customers in the service center, conversion, transportation (including automotive), construction, container and appliance and electrical markets.

The USSE segment includes the operating results of U. S. Steel Košice (USSK),USSK, U. S. Steel’s integrated steel plant and coke production facilities in Slovakia, and its subsidiaries. USSE conducts its business mainly in Central and Western Europe and primarily serves customers in the European transportation (including automotive), construction, container, appliance, electrical, service center, conversion and oil, gas and petrochemical markets. USSE produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as refractory ceramic materials.pipe.

The Tubular segment includes the operating results of U. S. Steel’s tubular production facilities and an equity investee in the United States. We sold our ownership interest in an equity investee in Brazil in December of 2017. These operations produce and sell rounds, seamless and electric resistance welded (welded) steel casing and tubing (commonly known as oil country tubular goods or OCTG), standard and line pipe and mechanical tubing and primarily serve customers in the oil, gas and petrochemical markets. We sold our Bellville facility in 2018. In June 2019, U. S. Steel restarted Pipe Mill #1The Tubular segment includes the electric arc furnace at our Lone Star facility.Fairfield Tubular Operations in Fairfield, Alabama.

The chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being earnings (loss) before interest and income taxes. Earnings (loss) before interest and income taxes for reportable segments and the Other Businessescategory does not include net interest and other financial costs (income), income taxes, and certain other items that management believes are not indicative of future results. In 2018, U. S. Steel began allocating certain post-employment benefits to its segments.  Prior year information was adjusted to conform with the current year presentation. 

The accounting principles applied at the operating segment level in determining earnings (loss) before interest and income taxes are generally the same as those applied at the consolidated financial statement level.

Intersegment sales and transfers are accounted for at market-based prices and are eliminated at the corporate consolidation level. Corporate-level selling, general and administrative expenses and costs related to certain former businesses are allocated to the reportable segments and Other Businesses based on measures of activity that management believes are reasonable.

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The results of segment operations are as follows:

(In millions)Customer
Sales
Intersegment
Sales
Net
Sales
Earnings (loss)
from
investees
Earnings (loss) before Interest and Income TaxesDepreciation,
depletion &
amortization
Capital
expenditures
2022
Flat-Rolled$12,522 $350 $12,872 $220 $1,951 $499 $503 
Mini Mill (a)
2,681 366 3,047  481 158 1,159 
USSE4,243 13 4,256  444 85 90 
Tubular1,611 5 1,616 23 544 48 17 
Total reportable segments21,057 734 21,791 243 3,420 790 1,769 
Other8 1 9  22 1  
Reconciling Items and Eliminations (735)(735) (282)  
Total$21,065 $ $21,065 $243 $3,160 $791 $1,769 
2021
Flat-Rolled$12,180 $178 $12,358 $150 $2,630 $491 $422 
Mini Mill (a)
3,008 508 3,516 — 1,206 151 331 
USSE4,262 4,266 — 975 98 57 
Tubular789 20 809 14 46 51 
Total reportable segments20,239 710 20,949 164 4,812 786 861 
Other36 65 101 (11)
Reconciling Items and Eliminations— (775)(775)— 145 — — 
Total$20,275 $— $20,275 $170 $4,946 $791 $863 
2020
Flat-Rolled$7,071 $208 $7,279 $(9)$(596)$496 $484 
USSE1,967 1,970 — 97 79 
Tubular639 646 (179)39 159 
Total reportable segments9,677 218 9,895 (5)(766)632 722 
Other64 98 162 (94)(39)11 
Reconciling Items and Eliminations— (316)(316)(18)(270)— — 
Total$9,741 $— $9,741 $(117)$(1,075)$643 $725 
(a)Includes capital expenditures related to BR2 of $796 million and $144 million in 2022 and 2021, respectively.
(In millions) Customer
Sales
 Intersegment
Sales
 Net
Sales
 Earnings
(loss)
from
investees
 Earnings (Loss) before Interest and Income Taxes Depreciation,
depletion &
amortization
 Capital
expenditures
2019              
Flat-Rolled $9,279
 $281
 $9,560
 $84
 $196
 $456
 $943
USSE 2,417
 3
 2,420
 
 (57) 92
 153
Tubular 1,188
 3
 1,191
 5
 (67) 46
 145
Total reportable segments 12,884
 287
 13,171
 89
 72
 594
 1,241
Other Businesses 53
 115
 168
 (10) 23
 22
 11
Reconciling Items and Eliminations 
 (402) (402) 
 (325) 
 
Total $12,937
 $
 $12,937
 $79
 $(230) $616
 $1,252
2018              
Flat-Rolled $9,681
 $231
 $9,912
 $54
 $883
 $367
 $820
USSE 3,205
 23
 3,228
 
 359
 87
 104
Tubular 1,231
 5
 1,236
 7
 (58) 47
 45
Total reportable segments 14,117
 259
 14,376
 61
 1,184
 501
 969
Other Businesses 61
 125
 186
 
 55
 20
 32
Reconciling Items and Eliminations 
 (384) (384) 
 (115) 
 
Total $14,178
 $
 $14,178
 $61
 $1,124
 $521
 $1,001
2017              
Flat-Rolled $8,297
 $194
 $8,491
 $38
 $375
 $352
 $388
USSE 2,949
 25
 2,974
 
 327
 76
 83
Tubular 944
 1
 945
 8
 (99) 51
 28
Total reportable segments 12,190
 220
 12,410
 46
 603
 479
 499
Other Businesses 60
 119
 179
 (2) 44
 22
 6
Reconciling Items and Eliminations 
 (339) (339) 
 22
 
 
Total $12,250
 $
 $12,250
 $44
 $669
 $501
 $505



A summary of total assets by segment is as follows:
December 31,
(In millions)20222021
Flat-Rolled$7,936 $7,337 
Mini Mill (a)
5,787 4,715 
USSE5,823 6,111 
Tubular1,140 1,054 
Total reportable segments$20,686 $19,217 
Other$141 $88 
Corporate, reconciling items, and eliminations (b)
(1,369)(1,489)
Total assets$19,458 $17,816 
(a)Includes assets related to BR2 of $1.4 billion and $0.3 billion in 2022 and 2021, respectively.
(b)The majority of Corporate, reconciling items, and eliminations total assets is comprised of cash and the elimination of intersegment amounts.


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  December 31,
(In millions) 2019 2018
Flat-Rolled (a)
 $7,267
 $6,977
USSE (b)
 5,360
 5,607
Tubular 1,150
 1,076
Total reportable segments $13,777
 $13,660
Other Businesses $1,267
 $329
Corporate, reconciling items, and eliminations(c)
 (3,436) (3,007)
Total assets $11,608
 $10,982
Included in the Flat-Rolled segment assets is goodwill of $3 million as of December 31, 2018.
(b)
Included in the USSE segment assets is goodwill of $4 million as of both December 31, 2019 and 2018.
(c)The majority of Corporate, reconciling items, and eliminations total assets is comprised of cash and the elimination of intersegment amounts.


The detail of reconciling items to consolidated earnings (loss) before interest and income taxes is as follows:
(In millions)202220212020
Items not allocated to segments:
Restructuring and other charges (Note 25)$(48)$(128)$(138)
Asset impairment charges(163)(273)(287)
United Steelworkers labor agreement signing bonus and related costs(64)— — 
Gains on assets sold & previously held investments6 118 170 
Gain on sale of Transtar (Note 5) 506 — 
Environmental remediation charges (43)— 
Other charges, net(13)(35)(15)
Total reconciling items$(282)$145 $(270)
(In millions) 2019 2018 2017
Items not allocated to segments:      
December 24, 2018 Clairton coke making facility fire (50) 
 
United Steelworkers labor agreement signing bonus and related costs 
 (81) 
Granite City Works restart and related costs 
 (80) 
Loss on shutdown of certain tubular pipe mill assets (Note 25) 
 
 (35)
Gain associated with U. S. Steel Canada Inc. (Note 5) 
 
 72
Restructuring and other charges (Note 25) (275) 
 
Granite City Works temporary idling charges 
 8
 (17)
Gain on equity investee transactions (Note 12) 
 38
 2
Total reconciling items $(325) $(115) $22


Geographic Area:
The information below summarizes external sales, property, plant and equipment and equity method investments based on the location of the operating segment to which they relate.

(In millions)YearExternal
Sales
Assets
North America2022$16,822 $8,459 (a)
202116,013 7,034 (a)
20207,774 5,590 (a)
Europe20224,243 843 
20214,262 880 
20201,967 993 
Total202221,065 9,302 
202120,275 7,914 
20209,741 6,583 
(a)Assets with a book value of $8,459 million, $7,034 million and $5,590 million were located in the United States at December 31, 2022, 2021 and 2020, respectively.
(In millions) Year External
Sales
 Assets 
North America 2019 $10,520
 $5,772
(a) 
  2018 10,973
 4,432
(a) 
  2017 9,301
 3,831
(a) 
Europe 2019 2,417
 947
 
  2018 3,205
 919
 
  2017 2,949
 906
 
Total 2019 12,937
 6,719
 
  2018 14,178
 5,351
 
  2017 12,250
 4,737
 
(a)
Assets with a book value of $5,772 million, $4,432 million and $3,817 million were located in the United States at December 31, 2019, 2018 and 2017, respectively.

5. AcquisitionAcquisitions and DispositionDispositions

Big River Steel Acquisition
On October 31, 2019, a wholly owned subsidiary ofJanuary 15, 2021, U. S. Steel purchased a 49.9% ownershipthe remaining equity interest in Big River Steel at a purchase price offor approximately $683$625 million in cash with a call option (U. S. Steel Call Option) to acquire the remaining 50.1% within the next four years at an agreed-upon price formula, whichnet of $36 million and $62 million in years three

cash and four is based on Big River Steel’s achievement of certain metrics that include: freerestricted cash flow, product development, safetyreceived, respectively, and the completionassumption of a proposed expansionliabilities of Big River Steel's existing manufacturing line. Big River Steel currently operates a technologically advanced mini mill with approximately 1.65$50 million. There were acquisition related costs of approximately $9 million tons of steel making capacity.

during the twelve months ended December 31, 2021.

Prior to the closing of the acquisition on January 15, 2021, U. S. Steel accountsaccounted for its investment49.9% equity interest in Big River Steel under the equity method as control and risk of loss arewere shared among the partnershipjoint venture members. Big River Steel is not a variable interest entity as it qualifies forUsing step acquisition accounting the business scope exception under ASC 810, Consolidation. UnderCompany increased the value of its previously held equity method of accounting, U. S. Steel recognizesinvestment to its share of Big River Steel's after tax net income or loss as well as the amortization of any basis differences due to the step-up to fair value of certain assets attributable to Big River Steel. U. S. Steel recorded an equity investment asset for Big River Steel of $710$770 million that includes approximately $27 million of transaction costs and is reflected in the investments and long-term receivables line on our balance sheet.

U. S. Steel’s 49.9% share of the total net assets of Big River Steel was approximately $155 million at October 31, 2019 resulting in a basis difference of approximately $550 million due to the step-up to fair value of certain assets attributable to Big River Steel. Approximately $88 million of the step-up was attributable to property, plant and equipment and approximately $460 million was attributable to goodwill. This basis difference, excluding the portion attributable to goodwill, is being amortized based on the remaining weighted average useful life of the assets of approximately 18 years. U. S. Steel’s 49.9% share of amortization expense associated with the fair value step-up was less than $1 million for 2019.

The transaction to acquire Big River Steel included the U. S. Steel Call Option described above and options where the other Big River Steel equity owners can require U. S. Steel to purchase their 50.1% ownership interest (Class B Common Put Option) or require U. S. Steel to sell its ownership interest (Class B Common Call Option) at an agreed upon price if the U. S. Steel Call Option expires. The U. S. Steel Call Option, Class B Common Call Option and Class B Common Put Option are free-standing financial instruments that are marked to fair value each period using a Monte Carlo simulation which is considered a Level 3 valuation technique, see Note 20 for further details.

(In millions)Consolidated Balance Sheet ClassificationDecember 31, 2019
U. S. Steel Call OptionInvestments and other long-term receivables$166
   
Class B Put OptionDeferred credits and other long-term liabilities$192
Class B Call OptionDeferred credits and other long-term liabilities$2


The transaction also included options where U. S. Steel can require the other Big River Steel equity owners to purchase U. S. Steel's ownership interest under certain conditions or if an overall cash flow target is not met for the four-year period ending September 30, 2023. These options are embedded financial instruments that are included in the Big River Steel equity investment asset.

U. S. Steel Canada Inc. Retained Interest Disposition
On June 30, 2017, U. S. Steel completed the restructuring and disposition of U. S. Steel Canada Inc. (USSC) through a sale and transfer of all of the issued and outstanding shares in USSC to an affiliate of Bedrock Industries LLC. In accordance with the Second Amended and Restated Plan of Compromise, Arrangement and Reorganization, approved by the Ontario Superior Court of Justice on June 9, 2017, U. S. Steel received approximately $127 million in satisfaction of its secured claims, including interest, which resulted in a gain of $72approximately $111 million. The fair value of the previously held equity investment was determined using Level 3 valuation techniques, including the significant factors and assumptions used to value Big River Steel disclosed below. The gain was recorded in gain on equity investee transactions in the Consolidated Statement of Operations.

The acquisition has been accounted for in accordance with ASC 805, Business combinations. There were step-ups to fair value of approximately $308 million, $194 million and $24 million for property, plant and equipment, debt and inventory, respectively. An intangible asset for customer relationships and goodwill of approximately $413 million and $916 million were also recorded, respectively. Goodwill represents the excess of purchase price over the fair market value of the net assets. Goodwill is primarily attributable to Big River Steel's operational abilities, workforce and the anticipated benefits from their recent expansion and is expected to be tax deductible. The inventory step-up was fully amortized as of March 31, 2021, the intangible asset will be amortized over a 22-year period, and the debt step-up will be amortized over the contractual life of the underlying debt.

The value of Big River Steel was determined using Level 3 valuation techniques. Level 3 valuation techniques include inputs to the valuation methodology that are considered unobservable and significant to the fair value measurement. A significant factor in determining the equity value was the discounted forecasted cash flows of Big River Steel. Forecasted cash flows are primarily impacted by the forecasted market price of steel and metallic inputs as well as the expected timing of significant capital expenditures. The model utilized a risk adjusted discount rate of 11.0% and a terminal growth rate of 2%.

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The following table presents the allocation of the aggregate purchase price based on estimated fair values:

(in millions)
Assets Acquired:
Receivables$166 
Receivables with U. S. Steel (1)
99 
Inventories184 
Other current assets16 
Property, plant and equipment2,188 
Intangibles413 
Goodwill916 
Other noncurrent assets19 
Total Assets Acquired$4,001 
Liabilities Assumed:
Accounts payable and accrued liabilities$224 
Payroll and benefits payable27 
Accrued taxes
Accrued interest33 
Short-term debt and current maturities of long-term debt29 
Long-term debt1,997 
Deferred income tax liabilities26 
Deferred credits and other long-term liabilities211 
Total Liabilities Assumed$2,556 
Fair value of previously held investment in Big River Steel$770 
Purchase price, including assumed liabilities and net of cash acquired675 
Difference in assets acquired and liabilities assumed$1,445 
(1) The transaction to purchase Big River Steel included receivables for payments made by Big River Steel on behalf of U. S. Steel for retention bonuses of $22 million that impacted the previously held equity investment and for U. S. Steel liabilities assumed in the purchase of approximately $50 million. In addition, there were assumed receivables of approximately $27 million for steel substrate sales from Big River Steel to U. S. Steel. The receivables with U. S. Steel eliminate in consolidation with offsetting intercompany payables from U. S. Steel.

The following unaudited pro forma information for U. S. Steel includes the results of the Big River Steel acquisition as if it had been consummated on January 1, 2020. The unaudited pro forma information is based on historical information and is adjusted for amortization of the intangible asset, property, plant and equipment and debt fair value step-ups discussed above. Non-recurring acquisition related items included in the 2020 period include $111 million for the gain on previously held equity investment, $9 million in acquisition related costs and $24 million in inventory step-up amortization related to the purchase of the remaining interest in Big River Steel. In addition, costs for non-recurring retention bonuses of $44 million that occurred in January 2021 prior to the purchase of the remaining equity interest are included in the 2020 period. The pro forma information does not include any anticipated cost savings or other effects of the integration of Big River Steel. Accordingly, the unaudited pro forma information does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations. Pro forma adjustments were not tax-effected in 2020 as U. S. Steel had a full valuation allowance on its domestic deferred tax assets.

Years Ended December 31,
(in millions)20212020
Net sales$20,347 $10,694 
Net earnings (loss)$4,103 $(1,260)

Transtar Disposition
On July 28, 2021, U. S. Steel completed the sale of 100 percent of its equity interests in its wholly-owned short-line railroad, Transtar, LLC (Transtar) to an affiliate of Fortress Transportation and Infrastructure Investors, LLC. The Company received net cash proceeds of $627 million, subject to certain customary adjustments as set forth in the Membership Interest Purchase Agreement, and recognized a pretax gain of approximately $506 million in 2021. In connection with the closing of the transaction, the Company entered into certain ancillary agreements including a railway services agreement, providing for continued rail services for its Gary Works and Mon Valley Works facilities, and a transition services agreement. Because Transtar does not represent a significant component of U. S. Steel's business and does not
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constitute a reportable business segment, its results through the date of disposition are reported in the Other category. See Note 4 for further details.

Other Transactions
As of December 31, 2022, the Company intends to pursue the disposition of certain assets related to a component of its flat-roll business. As a result, the Company has recognized a total of $119 million in restructuring-related charges, $89 million during the fourth quarter 2021 and $30 million during the year ended December 31, 2022. These charges are expected to be paid out on a long-term basis.

USS-UPI, LLC (UPI) (formerly known as USS-POSCO Industries)
On February 29, 2020, U. S. Steel purchased the remaining 50% ownership interest in USS-POSCO Industries, (now USS-UPI, LLC), (UPI) for $3 million, net of cash received of $2 million. There was an assumption of accounts payable owed to U. S. Steel for prior sales of steel substrate of $135 million associated with the purchase that was reflected as a reduction in receivables from related parties on the Company's retained interest in USSC.Consolidated Balance Sheet as of December 31, 2020.

Using step acquisition accounting U. S. Steel also agreed toincreased the discharge and cancellation of its unsecured claims for nominal consideration. The termsvalue of the settlementCompany's previously held equity investment to its fair value of $5 million which resulted in a gain of approximately $25 million. The gain was recorded in gain on equity investee transactions in the Consolidated Statement of Operations.

Receivables of $44 million, inventories of $96 million, accounts payable and accrued liabilities of $19 million, current portion of long-term debt of $55 million and payroll and employee benefits liabilities of $78 million were recorded with the acquisition. Property, plant and equipment of $97 million which included mutual releases among key stakeholders, including a releasefair value step-up of all claims against$47 million and an intangible asset of $54 million were also recorded on the Company regarding environmental, pension and other liabilities, and transition services agreements that superseded all prior arrangements amongCompany's Consolidated Balance Sheet. The intangible asset, which will be amortized over ten years, arises from a land lease contract, under which a certain portion of payment owed to UPI is realized in the parties, including the 2015 transition arrangements.form of deductions from electricity costs.






6. Revenue

Revenue is generated primarily from contracts to produce, ship and deliver steel products, and to a lesser extent, to deliver raw materials sales such as iron ore pellets to deliverand coke by-productsand for railroad services and real estate sales. Generally, U. S. Steel’s performance obligations are satisfied control of our products is transferred, and revenue is recognized at a single point in time, when title transfers to our customer for product shipped or when services are provided. Revenues are recorded net of any sales incentives. Shipping and other transportation costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and are expensed when incurred. Because customers are invoiced at the time title transfers and U. S. Steel’s right to consideration is unconditional at that time, U. S. Steel does not maintain contract asset balances. Additionally, U. S. Steel does not maintain contract liability balances, as performance obligations are satisfied prior to customer payment for product. U. S. Steel offers industry standard payment terms.

U. S. Steel has 3 reportable segments: Flat-Rolled, USSE and Tubular. Flat-Rolled primarily generates revenue from sheet and coated product sales to North American customers. Flat-Rolled also sells iron ore pellets and coke making by-products. USSE sells slabs, sheets, strip mill plates, tin mill products and spiral welded pipe as well a refractory ceramic materials to customers primarily in the Central and Western European market. Tubular sells seamless and electric resistance welded (ERW) steel casing and tubing (commonly known as oil country tubular goods or OCTG), standard and line pipe and mechanical tubing and primarily serves customers in the oil, gas and petrochemical markets. Revenue from our railroad and real estate businesses is reported in the Other Businesses category in our segment reporting structure. The following tabletables disaggregates our revenue by product for each of our reportable business segments for the years ended December 31, 2019, 20182022, 2021 and 2017, respectively:2020, respectively (Net Sales by Product, in millions, excluding intersegment sales):


Year Ended December 31, 2022Flat-RolledMini MillUSSETubularOtherTotal
Semi-finished$193 $ $103 $ $ $296 
Hot-rolled sheets2,338 1,570 1,919   5,827 
Cold-rolled sheets3,898 356 385   4,639 
Coated sheets4,461 745 1,622   6,828 
Tubular products  68 1,594  1,662 
All other (a)
1,632 10 146 17 8 1,813 
Total$12,522 $2,681 $4,243 $1,611 $8 $21,065 
(a) Consists primarily of sales of raw materials and coke making by-products

Year Ended December 31, 2021Flat-Rolled
Mini Mill (b)
USSETubularOtherTotal
Semi-finished$12 $— $126 $— $— $138 
Hot-rolled sheets2,592 1,744 2,149 — — 6,485 
Cold-rolled sheets3,785 526 448 — — 4,759 
Coated sheets4,408 732 1,376 — — 6,516 
Tubular products— — 58 781 — 839 
All other (a)
1,383 105 36 1,538 
Total$12,180 $3,008 $4,262 $789 $36 $20,275 
(a) Consists primarily of sales of raw materials and coke making by-products.
(b) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

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Customer Sales by Product:  
  
(In millions) Year Ended December 31, 2019 Flat-RolledUSSETubularOther BusinessesTotal
Year Ended December 31, 2020Year Ended December 31, 2020Flat-RolledUSSETubularOtherTotal
Semi-finished $305
$11
$
$
$316
Semi-finished$94 $$— $— $96 
Hot-rolled sheets 2,504
997


3,501
Hot-rolled sheets1,273 793 — — 2,066 
Cold-rolled sheets 2,512
283


2,795
Cold-rolled sheets2,102 164 — — 2,266 
Coated sheets 2,993
1,006


3,999
Coated sheets2,990 904 — — 3,894 
Tubular products 
40
1,166

1,206
Tubular products— 40 621 — 661 
All Other (a)
 965
80
22
53
1,120
All other (b)
All other (b)
612 64 18 64 758 
Total $9,279
$2,417
$1,188
$53
$12,937
Total$7,071 $1,967 $639 $64 $9,741 
  
(In millions) Year Ended December 31, 2018 Flat-RolledUSSETubularOther BusinessesTotal
Semi-finished $156
$174
$
$
$330
Hot-rolled sheets 2,816
1,313


4,129
Cold-rolled sheets 2,709
384


3,093
Coated sheets 3,090
1,164


4,254
Tubular products 
48
1,195

1,243
All Other (a)
 910
122
36
61
1,129
Total $9,681
$3,205
$1,231
$61
$14,178
  
(In millions) Year Ended December 31, 2017 Flat-RolledUSSETubularOther BusinessesTotal
Semi-finished $72
$232
$
$
$304
Hot-rolled sheets 2,045
1,210


3,255
Cold-rolled sheets 2,355
328


2,683
Coated sheets 2,902
1,038


3,940
Tubular products 
39
909

948
All Other (a)
 923
102
35
60
1,120
Total $8,297
$2,949
$944
$60
$12,250
(a) Consists primarily of sales of raw materials and coke making by-products.
(a) Consists primarily of sales of raw materials and coke making by-products.
(a) Consists primarily of sales of raw materials and coke making by-products.


7. Net Interest and Other Financial Costs

(In millions) 2019 2018 2017
Interest income:      
Interest income $(17) $(23) $(17)
Interest expense and other financial costs:      
Interest incurred 162
 175
 229
Less interest capitalized 20
 7
 3
Total interest expense 142
 168
 226
Loss on debt extinguishment (a)
 
 98
 54
Net periodic benefit costs (other than service cost) (b)
 91
 69
 61
Foreign currency net (gain) loss (c)
 (17) (19) 23
Financial costs on:      
Amended Credit Agreement 5
 5
 6
USSK credit facilities 1
 3
 3
     Other (d)
 10
 3
 2
Amortization of discounts and deferred financing costs 7
 8
 10
Total other financial costs 6
 
 44
Net interest and other financial costs $222
 $312
 $368

(a)
Represents a net pretax charge of $98 million during 2018 related to the retirement of our 2020 Senior Notes and 2021 Senior Secured Notes, and a net pretax charge of $54 million during 2017 related to the retirement of our 2018, 2021, and 2022 Senior Notes, partial redemption of our 2021 Senior Secured Notes, and redemption of the Lorain Recovery Zone Facility Bonds.
(b)
Represents postretirement benefit expense as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018. See Note 3 to the Consolidated Financial Statements.
(c)
The functional currency for USSE is the euro. Foreign currency net (gain) loss is a result of transactions denominated in currencies other than the euro.
(d)2019 includes a $7 million change in fair value of certain call and put options related to U. S. Steel's purchase of its 49.9% ownership interest in Big River Steel during 2019. See Note 5 and Note 20 for further details.

(In millions)202220212020
Interest income:
Interest income$(44)$(4)$(7)
Interest expense and other financial costs:
Interest incurred218 342 306 
Less interest capitalized59 29 26 
Total interest expense159 313 280 
Loss on debt extinguishment (a)
 292 — 
Net periodic benefit (income) costs (other than service cost)(246)(45)(25)
Foreign currency net loss (gain) (b)
11 17 (15)
Financial costs on:
Amended Credit Agreement5 
USSK Credit Facility3 
     Other (c)
4 (21)
Amortization of discounts and deferred financing costs9 14 15 
Total other financial costs (benefits)32 46 (16)
Net interest and other financial (benefits) costs$(99)$602 $232 
(a)Represents a net pretax charge of $292 million during 2021 related to the repayments of the Export-Import Credit Agreement, 2025 Senior Secured Notes, 2025 Senior Notes, 2026 Senior Notes, 2029 Senior Secured Notes, Credit Facility Agreement and Environmental Revenue Bonds.
(b)The functional currency for USSE is the euro. Foreign currency net loss (gain) is a result of transactions denominated in currencies other than the euro.
(c)2020 includes a gain of $39 million for the change in fair value of certain call and put options related to U. S. Steel's previously held 49.9% ownership interest in Big River Steel.

8. Earnings (Loss) and Dividends Per Common Share

Earnings (Loss) Earnings per Share Attributable to United States Steel Corporation Stockholders
Basic earnings (loss) earnings per common share is based on the weighted average number of common shares outstanding during the period.
Diluted earnings (loss) earnings per common share assumes the exercise of stock options, the vesting of restricted stock units and performance awards, provided in each case the effect is dilutive. The "treasury stock"In 2022, the "if-converted" method is used to calculate the dilutive effect of the Senior Convertible Notes due in 2026 as a result of ASU 2020-06. In 2021 and 2020, the "treasury stock" method was used to calculate the dilutive effect of the Senior Convertible Notes due in 2026 (due to our current intent and policy, among other factors, to settle the principal amount of the 2026 Senior Convertible Notes in cash upon conversion).

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The computations for basic and diluted earnings (loss) earnings per common share from continuing operations are as follows:
(Dollars in millions, except per share amounts) 2019 2018 2017
Net (loss) earnings attributable to United States Steel Corporation stockholders $(630) $1,115
 $387
Weighted-average shares outstanding (in thousands):      
Basic 171,418
 176,633
 174,793
Effect of convertible notes 
 
 
Effect of stock options, restricted stock units and performance awards 
 1,828
 1,727
Adjusted weighted-average shares outstanding, diluted 171,418
 178,461
 176,520
Basic (loss) earnings per common share $(3.67) $6.31
 $2.21
Diluted (loss) earnings per common share $(3.67) $6.25
 $2.19


(Dollars in millions, except per share amounts)202220212020
Net earnings (loss) attributable to United States Steel Corporation stockholders
Basic$2,524 $4,174 $(1,165)
Interest expense on Senior Convertible Notes, net of tax13 — — 
Diluted$2,537 $4,174 $(1,165)
Weighted-average shares outstanding (in thousands):
Basic246,986 264,667 196,721 
Effect of Senior Convertible notes26,194 11,126 — 
Effect of stock options, restricted stock units and performance awards3,783 4,651 — 
Diluted276,963 280,444 196,721 
Net earnings (loss) per share attributable to United States Steel Corporation stockholders:
Basic$10.22 $15.77 $(5.92)
Diluted$9.16 $14.88 $(5.92)


The following table summarizes the securities that were antidilutive, and therefore, were not included in the computation of diluted earnings (loss) earnings per common share:

(In thousands) 2019 2018 2017
Securities granted under the 2005 Stock Incentive Plan 4,459
 1,631
 1,579
Securities convertible under the Senior Convertible Notes 650
 
 
Total 5,109
 1,631
 1,579

(In thousands)202220212020
Securities granted under the 2016 Omnibus Incentive Compensation Plan, as amended and restated960 1,185 6,780 

Dividends Paid per Share
Quarterly dividends on common stock were five cents per share for each quarter in 2019, 2018 and 2017. U. S. Steel's Board of Directors approved an adjustment of the quarterly dividend to2022. Quarterly dividends on common stock were one cent per share effective asin the first, second and third quarters and five cents per share in the fourth quarter of 2021. Quarterly dividends are declaredon common stock were one cent per share for each quarter in 2020.

9. Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within U. S. Steel's Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statement of Cash Flows:
December 31,
(In millions)202220212020
Cash and cash equivalents$3,504 $2,522 $1,985 
Restricted cash in other current assets4 
Long-term restricted cash31 76 130 
      Total cash, cash equivalents and restricted cash$3,539 $2,600 $2,118 
  December 31,
(In millions) 2019 2018 2017
Cash and cash equivalents $749
 $1,000
 $1,553
Restricted cash in other current assets 2
 3
 6
Long-term restricted cash 188
 37
 38
      Total cash, cash equivalents and restricted cash $939
 $1,040
 $1,597


Amounts included in restricted cash represent cash balances which are legally or contractually restricted, primarily for electric arc furnace construction, environmental liabilities and other capital expenditure projects and insurance purposes.

10. Inventories

(In millions) December 31, 2019 December 31, 2018
Raw materials $628
 $605
Semi-finished products 720
 1,021
Finished products 376
 404
Supplies and sundry items 61
 62
Total $1,785
 $2,092


(In millions)December 31, 2022December 31, 2021
Raw materials$1,098 $713 
Semi-finished products811 1,056 
Finished products398 388 
Supplies and sundry items52 53 
Total$2,359 $2,210 

Current acquisition costs for LIFO inventories were estimated to exceed the above inventory values at December 31 by $735$1,154 million in 20192022 and $1,038$896 millionin 2018.2021. As a result of the liquidation of LIFO inventories, cost of sales decreased and earnings (loss) before interest and income taxes increased by $28$44 million, $11 million and $5 million in 20192022, 2021 and 2020, respectively.
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and$10 million in 2018. As a resultTable of the liquidation of LIFO inventories, cost of sales increased and earnings (loss) before interest and income taxes decreased by $6 million in 2017.Contents


Inventory includes $40 million and $39 million of land held for residential/commercial development as of December 31, 2019 and 2018, respectively.

11. Income Taxes


Components of earnings (loss) earningsbefore income taxes:

(In millions) 2019 2018 2017
United States $(381) $434
 $75
Foreign (71) 378
 226
(Loss) earnings before income taxes $(452) $812
 $301

(In millions)202220212020
United States$2,847 $3,400 $(1,303)
Foreign412 944 (4)
Earnings (loss) before income taxes$3,259 $4,344 $(1,307)

At the end of both 20192022 and 2018,2021, U. S. Steel does not have any undistributed foreign earnings and profits for which U.S. deferred taxes have not been provided.

Income tax provision (benefit):

  2019 2018 2017
(In millions) Current Deferred Total Current Deferred Total Current Deferred Total
Federal $(18) $196
 $178
 $(40) $(283) $(323) $(66) $(81) $(147)
State and local 
 23
 23
 2
 (58) (56) (1) 
 (1)
Foreign (6) (17) (23) 64
 12
 76
 53
 9
 62
Total $(24) $202
 $178
 $26
 $(329) $(303) $(14) $(72) $(86)


202220212020
(In millions)CurrentDeferredTotalCurrentDeferredTotalCurrentDeferredTotal
Federal$101 $451 $552 $(7)$$$(10)$(95)$(105)
State and local54 43 97 50 (71)(21)(3)(24)(27)
Foreign79 7 86 179 11 190 (11)(10)
Total$234 $501 $735 $222 $(52)$170 $(12)$(130)$(142)

A reconciliation of the federal statutory tax rate of 21 percent (21 percent in 2018 and 35 percent in 2017) to total provision (benefit) follows:
(In millions)202220212020
Statutory rate applied to earnings (loss) before income taxes$684 $912 $(275)
Valuation allowance(38)(633)367 
Tax accounting benefit related to increase in OCI — (138)
Excess percentage depletion(48)(66)(31)
Capital loss generated (139)— 
State and local income taxes after federal income tax effects97 83 (47)
Effects of foreign operations85 191 (10)
U.S. impact of foreign operations6 
Impact of tax credits(83)(173)(18)
Adjustment of prior years' federal income taxes40 (5)12 
Other(8)(4)(3)
Total provision (benefit)$735 $170 $(142)
(In millions) 2019 2018 2017
Statutory rate applied to earnings (loss) before income taxes $(95) $171
 $105
Valuation allowance 334
 (412) 36
Excess percentage depletion (46) (48) (68)
State and local income taxes after federal income tax effects (36) 8
 (28)
Effects of foreign operations (23) 74
 62
U.S. impact of foreign operations 25
 (21) (6)
Impact of tax credits 5
 (71) (56)
Effect of tax reform 
 
 (81)
Alternative minimum tax credit refund 
 
 (48)
Adjustment of prior years' federal income taxes 7
 
 
Other 7
 (4) (2)
Total provision (benefit) $178
 $(303) $(86)


In 2019,March 2022, the Company and the Arkansas Economic Development Commission entered into the Recycling Tax Credit Incentive Agreement, whereby the Company may earn state income tax benefit differscredits in an amount equal to 30 percent of the cost of waste reduction, reuse, or recycling equipment, subject to meeting the requirements of the Arkansas Code Ann. Section 26-51-506, for BR2 which is under construction in Osceola, Arkansas. Documentation supporting the Company's investment in qualifying equipment must be submitted as part of an application for certification expected to be completed on or before 2025. In March 2022, the Company received a lump-sum payment of approximately $82 million as proceeds from the domestic statutory ratesale of 21 percent primarily due to the fact that it does not reflect any tax benefit in the U.S. as a valuation allowance was recorded against the Company's net domestic deferred tax asset (excluding a portion of expected future tax credits to be earned by the Company (see Note 26 for additional information). The Company estimates that it could earn tax credits in excess of $700 million, exclusive of the amount sold in March 2022, which the Company will recognize in the year the assets are placed into service and meet the requirements of Arkansas Code Ann. Section 26-51-506. Any unused tax credit that cannot be claimed in a deferred tax liability relatedyear may be carried forward indefinitely by the Company and applied to its future state tax liability.

On August 16, 2022, H.R. 5376 (commonly called the Inflation Reduction Act of 2022) was signed into law, which, among other things, implemented a CAMT of 15 percent on book income of certain large corporations, a one percent excise tax on net stock repurchases and several tax incentives to promote clean energy. The provision pertaining to an asset with an indefinite life, as well asexcise tax on corporate stock repurchases imposes a deferrednondeductible one percent excise tax asset relatedon a publicly traded corporation for the net value of certain stock that the corporation repurchases. The value of the repurchases subject to refundable Alternative Minimum Tax (AMT) credits).the tax is reduced by the value of any stock issued by the corporation during the tax year, including stock issued or provided to the employees. The CAMT imposes a minimum tax on net income adjusted for certain items prescribed by the legislation. Both the CAMT and the excise tax provisions of this legislation are effective for tax years beginning after December 31, 2022. Although management is currently assessing the impact of the law change and awaiting guidance from the Department of Treasury,
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the Company anticipates being subject to the new CAMT but does not believe that it will have a material impact on its Consolidated Financial Statements.

Included in the 2018 tax benefit2021 provision is a benefit of $374$715 million related to the reversal of a portion of the valuation allowance recorded against the Company'sCompany’s net domestic deferred tax asset, as well aspartially offset by the addition of a valuation allowance of $82 million, the majority of which relates to an unused capital loss carryforward.

The 2020 tax benefit of $38includes a $138 million benefit related to recording a loss from continuing operations and income from other comprehensive income categories and expense of $13 million for an updated estimate to tax reserves related to an unrecognized tax benefit. Due to the reversal of thefull valuation allowance for current year activity.

Included inon our domestic deferred tax assets, the 2017 tax benefit is a benefit of $10 million related to corporate rate reduction provided by the Tax Cut and Jobs Act of 2017 (2017 Act), as well as a benefit of $71 million related to the reversal of the valuation allowance recorded against the remaining balance of the Company’s AMT credits, which became fully refundable pursuant to the 2017 Act. Also included in the 20172020 does not reflect any additional tax benefit is a benefit of $48 million related to the Company’s election to claim a refund of AMT credits pursuant to a provision in the Protecting Americans from Tax Hikes (PATH) Act.for domestic pretax losses.


Deferred taxes
Deferred tax assets and liabilities resulted from the following:

  December 31,
(In millions) 2019 2018
Deferred tax assets:    
Federal tax loss carryforwards (expiring in 2035 through 2036) $176
 $220
Federal capital loss carryforwards (expiring 2021) 27
 33
State tax credit carryforwards (expiring in 2020 through 2028) 18
 16
State tax loss carryforwards (expiring in 2020 through 2039) 130
 137
Minimum tax credit carryforwards 19
 38
General business credit carryforwards (expiring in 2027 through 2039) 85
 85
Foreign tax loss and credit carryforwards (expiring in 2024 through 2029) 170
 173
Employee benefits 173
 337
Contingencies and accrued liabilities 71
 62
Investments in subsidiaries and equity investees 49
 59
Inventory 32
 
Other temporary differences 35
 26
Valuation allowance (563) (214)
Total deferred tax assets 422
 972
Deferred tax liabilities:    
Property, plant and equipment 368
 468
Inventory 
 22
Receivables, payables and debt 17
 33
Indefinite-lived intangible assets 19
 18
Other temporary differences 3
 
Total deferred tax liabilities 407
 541
Net deferred tax asset $15
 $431

December 31,
(In millions)20222021
Deferred tax assets:
Federal tax loss carryforwards (no expiration)$1 $20 
Federal tax loss carryforwards (expiring in 2037)1 — 
Federal capital loss carryforwards (expiring in 2026)69 66 
State tax credit carryforwards (expiring in 2024 through 2031)10 11 
State tax loss carryforwards (expiring in 2023 through 2043)77 150 
State capital loss carryforwards (expiring in 2026 through 2036)28 16 
General business credit carryforwards 94 
Foreign tax loss and credit carryforwards (expiring in 2023 through 2031)67 244 
Contingencies and accrued liabilities64 78 
Operating lease liabilities37 47 
Capitalized research and development35 15 
Receivables, payables and debt13 33 
Inventory14 — 
Other temporary differences53 34 
Valuation allowance(119)(162)
Total deferred tax assets$350 $646 
Deferred tax liabilities:
Property, plant and equipment$589 $379 
Operating right-of-use assets35 45 
Investments in subsidiaries and equity investees141 121 
Inventory 112 
Employee benefits31 70 
Receivables, payables and debt 
Other temporary differences 
Total deferred tax liabilities$796 $736 
Net deferred tax (liability) asset$(446)$(90)

U. S. Steel recognizes deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The realization of deferred tax assets is assessed quarterly based on several interrelated factors. These factors include U. S. Steel’s expectation to generate sufficient future taxable income and the projected time period over which these deferred tax assets will be realized.

Each quarter U. S. Steel analyzes the likelihood that our deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized.

At June 30, 2021, U. S. Steel determined, based upon weighing all positive and negative evidence, that a full valuation allowance for the domestic deferred tax assets was no longer required. Accordingly, we reversed all of the domestic valuation allowance except for a portion of the domestic valuation allowance related to certain state net operating losses and state tax credits.

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During the year ended December 31, 2021, U. S. Steel realized a non-cash net benefit of $715 million related to the valuation allowance release, which was partially offset by the addition of a valuation allowance of $82 million, the majority of which relates to an unused capital loss generated in the fourth quarter of 2021.
At December 31, 2019, we identified the following negative evidence concerning U. S. Steel's ability to use some or all of its domestic deferred tax assets:

U. S. Steel's domestic operations generated a significant loss in the current year and there is uncertainty regarding the Company's ability to generate domestic income in the near term,
some of our domestic deferred tax assets are carryforwards, which have expiration dates, and
the global steel industry is experiencing overcapacity, which is driving adverse economic conditions and depressed selling prices for steel products.

Most positive evidence can be categorized into one of the four sources of taxable income sequentially. These are (from least to most subjective):

taxable income in prior carryback years, if carryback is permitted,
future reversal of existing taxable temporary differences,
tax planning strategies, and
future taxable income exclusive of reversing temporary differences and carryforwards.


U. S. Steel utilized all available carrybacks, and therefore, our analysis at December 31, 2019 focused on the other sources of taxable income. Our projection of the reversal of our existing temporary differences generated significant taxable income. This source of taxable income, however, was not sufficient to project full utilization of U. S. Steel’s domestic deferred tax assets. To assess the realizability of the remaining domestic deferred tax assets, U. S. Steel analyzed its prudent and feasible tax planning strategies.

At December 31, 2019, after weighing all the positive and negative evidence, U. S. Steel determined that it was more likely than not that2022, the net domestic deferred tax asset (excluding a portion of a deferred tax liability related to an asset with an indefinite life, as well as a deferred tax asset related to refundable AMT credits) may not be realized. As a result, U. S. Steel recorded a $334 million non-cash charge to tax expense. In the future, if we determine that it is more likely than not that we will be able to realize all or a portion of our deferred tax assets, the valuation allowance will be reduced, and we will record a benefit to earnings.
At December 31, 2019, the net domestic deferred tax asset was $12$437 million, net of an established valuation allowance of $560$116 million. At December 31, 2018,2021, the net domestic deferred tax assetliability was $445$88 million, net of an established valuation allowance of $211 million.$159 million.

At December 31, 2019,2022, the net foreign deferred tax assetliability was $3$9 million, net of an established valuation allowance of $3 million. At December 31, 2018,2021, the net foreign deferred tax liability was $14$2 million, net of an established valuation allowance of $3 million. The net foreign deferred tax asset will fluctuate as the value of the U.S. dollar changes with respect to the euro.

U. S. Steel will continue to monitor the realizability of its deferred tax assets on a quarterly basis taking into consideration, among other items, the uncertainty regarding the Company's continued ability to generate domestic income in the near term.basis. In the future, if we determine that realization is more likely than not for a deferred tax asset with a valuation allowance, the related valuation allowance will be reduced, and we will record a non-cash benefit to earnings.

Unrecognized tax benefits
Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken, in a tax return and the benefit recognized for accounting purposes pursuant to the guidance in ASC Topic 740 on income taxes. The total amount of unrecognized tax benefits was $2 million, $3 million $35 million and $42$16 million as of December 31, 2019, 20182022, 2021 and 2017,2020, respectively.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $2 million as of both December 31, 20192022 and 2018.2021.

U. S. Steel records interest related to uncertain tax positions as a part of net interest and other financial costs in the Consolidated Statements of Operations. Any penalties are recognized as part of selling, general and administrative expenses. U. S. Steel had accrued liabilities of $2 million for interest and penalties related to uncertain tax positions as of both December 31, 20192022, and 2018.2021.

A tabular reconciliation of unrecognized tax benefits follows:

(In millions) 2019 2018 2017
Unrecognized tax benefits, beginning of year $35
 $42
 $72
Increases – tax positions taken in prior years 
 
 1
Decreases – tax positions taken in prior years 
 (2) (26)
Settlements (32) 
 (4)
Lapse of statute of limitations 
 (5) (1)
Unrecognized tax benefits, end of year $3
 $35
 $42


(In millions)202220212020
Unrecognized tax benefits, beginning of year$3 $16 $
Increases – tax positions taken in prior years — 13 
Decreases – tax positions taken in prior years (13)— 
Settlements — — 
Lapse of statute of limitations(1)— — 
Unrecognized tax benefits, end of year$2 $$16 
It is reasonably expected that during the next 12 months unrecognized tax benefits related to income tax issues will change by an immaterial amount.


Tax years subject to examination
Below is a summary of the tax years open to examination by major tax jurisdiction:

U.S. Federal – 20142017 and forward
U.S. States – 20092015 and forward
Slovakia – 20092011 and forward

Status of Internal Revenue Service (IRS) examinations
The IRS audit of U. S. Steel’s 2014-20162017-2018 federal consolidated tax returns began in 20182020 and is ongoing. The IRS completed its audit of the Company's 2012 and 20132014-2016 tax returns in 2019. The audit report was agreed to by the Company and approved by the Congressional Joint Committee on Taxation in the fourth quarter of 2019, which resulted in a reduction to unrecognized tax benefits.2020.

12. Investments, Long-Term Receivables and Equity Investee Transactions
December 31,
(In millions)20222021
Equity method investments$810 $660 
Receivables due after one year, less allowance of $4 in both periods22 31 
Other8 
Total$840 $694 
  December 31,
(In millions) 2019 2018
Equity method investments $1,272
 $485
Receivables due after one year, less allowance of $5 and $11 191
 24
Other 3
 4
Total $1,466
 $513


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Summarized financial information of all investees accounted for by the equity method of accounting is as follows (amounts represent 100% of investee financial information):
(In millions) 2019 2018 2017
Income data – year ended December 31:(a)
      
Net Sales $2,528
 $2,193
 $2,485
Operating income 253
 157
 132
Net earnings 235
 134
 109
Balance sheet date – December 31:      
Current Assets $1,144
 $642
 $633
Noncurrent Assets 2,976
 853
 710
Current liabilities 573
 348
 441
Noncurrent Liabilities 2,542
 516
 335

(a)Former equity affiliates, Swan Point Development Company, Inc., Tilden Mining Company (Tilden) and Apolo Tubulars S.A. were sold on February 6, 2017, September 29, 2017 and December 22, 2017, respectively. We exited Leeds Retail Center, LLC and sold Acero Prime, S.R.L. de CV on May 31, 2018, and October 23, 2018, respectively. The former equity affiliates are included in the income data through the month prior to the date of sale.
(In millions)202220212020
Income data – year ended December 31:
Net Sales$3,222 $2,229 $2,485 
Operating income492 376 12 
Net earnings462 346 (124)
Balance sheet date – December 31:
Current Assets$1,085 $744 $960 
Noncurrent Assets974 1,084 3,101 
Current liabilities314 293 419 
Noncurrent Liabilities513 529 3,063 

U. S. Steel's portion of the equity in net earnings for its equity investments as reported in the income (loss) from investees linereflected on the Consolidated Statements of Operations was $79$243 million, $61$170 million and $44$(117) million for the years ended December 31, 2019, 20182022, 2021 and 2017,2020, respectively.


All of our significant investees are located in the U.S. Investees accounted for using the equity method include:
InvesteeDecember 31, 20192022 Interest
Big River Steel(a)
49.9%
Chrome Deposit Corporation50%
Daniel Ross Bridge, LLC50%
Double G Coatings Company, Inc.50%
Feralloy Processing Company49%
Hibbing Development Company24.1%
Hibbing Taconite Company(b)(a)
14.7%
Patriot Premium Threading Services, LLC50%
PRO-TEC Coating Company, LLC50%
Strategic Investment Fund Partners II(c)(b)
5.2%
USS-POSCO Industries50%
Worthington Specialty Processing4949.0 %
(a)U. S. Steel's 49.9% ownership in Big River Steel consists of 47.7535% interests in Big River Steel Holdings LLC and BRS Stock Holdco LLC. U. S. Steel Blocker LLC, a wholly-owned subsidiary of U. S. Steel, holds a 2.1465% interest in both of those entities.
(b)Hibbing Taconite Company (Hibbing) is an unincorporated joint venture that is owned, in part, by Hibbing Development Company (HDC), which is accounted for using the equity method. Through HDC we are able to influence the activities of HTC, and as such, its activities are accounted for using the equity method.
(c)Strategic Investment Fund Partners II is a limited partnership and in accordance with ASC Topic 323, the financial activities are accounted for using the equity method.
(a)Hibbing Taconite Company (Hibbing) is an unincorporated joint venture that is owned, in part, by Hibbing Development Company (HDC), which is accounted for using the equity method. Through HDC we are able to influence the activities of HTC, and as such, its activities are accounted for using the equity method.
(b)Strategic Investment Fund Partners II is a limited partnership and in accordance with ASC Topic 323, the financial activities are accounted for using the equity method.

In 2018,2020, we recognized pre-tax gains on equity investee transactions of approximately $18$6 million for the assignment of our ownership interest in Leeds Retail Center, LLC and $20 million fromon the sale of our 4049 percent ownership interest in Acero Prime, S. R. L. de CV. Feralloy Processing Company and $25 million for the step-up to fair value of our previously held investment in UPI.

In 2017,2022, we recognized a total gainpre-tax gains on equity investee transactions of $2approximately $6 million primarily as a result of a gain onfrom Worthington Specialty Processing pertaining to the sale of our 15 percent ownershipthe joint venture's facilities and subsequent distribution to the investors. The joint venture is expected to be dissolved in Tilden Mining Company, L.C., partially offset by a loss on sale of our 50 percent ownership interest2023 and is expected to result in Apolo Tubulars S.A.      

an immaterial distribution to the Company.

Dividends andor partnership distributions received from equity investees were $5$28 million in 2019, $132022 and $2 million in 2018 and $12 million2021, respectively. There were none received in 2017.2020.

U. S. Steel evaluates impairment of its equity method investments whenever circumstances indicate that a decline in value below carrying value is other than temporary. Under these circumstances, we would adjust the investment down to its estimated fair value, which then becomes its new carrying value.

We supply substrate to certain of our equity method investees and from time to time will extend the payment terms for their trade receivables. For discussion of transactions and related receivable and payable balances between U. S. Steel and its investees, see Note 23.

Big River Steel
86
On October 31, 2019, a wholly owned subsidiary

Table of U. S. Steel purchased a 49.9% ownership interest in Big River Steel at a purchase price of approximately $683 million in cash. U. S. Steel recorded an equity investment asset for Big River Steel of $710 million that includes approximately $27 million of transaction costs. U. S. Steel accounts for its investment in Big River Steel under the equity method as control and risk of loss are shared among the partnership members. Big River Steel is not a variable interest entity as it qualifies for the business scope exception under ASC 810, Consolidation. See Note 5 for further details.  Contents

Patriot Premium Threading Services, LLC
Patriot Premium Threading Services, LLC (Patriot) is located in Midland, Texas and provides oil country threading, accessory threading, repair services and rig site services to exploration and production companies located principally in the Permian Basin. During the fourth quarter of 2019, Patriot’s 50-50 joint venture partners, a wholly owned subsidiary of U. S. Steel and Butch Gilliam Enterprises, Inc. (BGE) amended the joint venture agreement. In accordance with the amended agreement, U. S. Steel will be entitled to receive distributions of 100% of Patriot’s earnings starting January 1, 2020 and will purchase BGE’s ownership interest in Patriot after a three-year period in exchange for certain fixed payments and payments equal to 10 percent of Patriot’s earnings before interest and taxes during that time period. The prepaid asset (recorded in other noncurrent assets) related to the future purchase of Patriot was $33.0 million and $27.7 million at December 31, 2019 and December 31, 2018,

respectively. The liability (recorded in deferred credits and other noncurrent liabilities) related to the future purchase of Patriot was $5.7 million at December 31, 2019. There was no liability related to the purchase of Patriot at December 31, 2018.

Patriot is now classified as a variable interest entity because its economics are not proportional to the equal voting interests of its two joint venture partners. U. S. Steel is not the primary beneficiary because it does not direct the decisions that most significantly impact the economic performance of Patriot. These decisions include those related to sales of Patriot’s goods and services, its production planning and scheduling and its negotiation of procurement contracts.

At December 31, 2019 and 2018, U. S. Steel had other assets of approximately $29.8 million and $23.7 million, respectively, on its consolidated balance sheets related to Patriot. These assets were comprised primarily of our equity investment in Patriot which is classified in investments and other long-term receivables and an insignificant related party receivable for the sale of pipe to Patriot for threading services. The assets represent our maximum exposure to Patriot without consideration of any recovery that could be received if there were a sale of Patriot’s assets. Creditors of Patriot have no recourse to the general credit of U. S. Steel.

13. Property, Plant and Equipment

    December 31,
(In millions) Useful Lives 2019 2018
Land and depletable property 
 $202
 $207
Buildings 35 years
 1,105
 1,098
Machinery and equipment      
  Steel producing 2-30 years
 13,658
 12,784
  Transportation 3-40 years
 280
 268
  Other 5-30 years
 129
 123
Information technology 5-6 years
 787
 786
Assets under finance lease 5-15 years
 83
 36
Construction in process 
 833
 706
Total   17,077
 16,008
Less accumulated depreciation and depletion   11,630
 11,143
Net   $5,447
 $4,865

December 31,
(In millions)Useful Lives20222021
Land and depletable property— $210 $213 
Buildings35-40 years1,530 1,558 
Machinery and equipment
  Steel producing2-30 years15,900 15,968 
  Other5-30 years95 94 
Information technology5-6 years805 798 
Assets under finance lease5-15 years212 160 
Construction in process— 2,470 885 
Total21,222 19,676 
Less accumulated depreciation and depletion12,730 12,422 
Net$8,492 $7,254 

Amounts in accumulated depreciation and depletion for assets acquired under finance leases (including sale-leasebacks accounted for as financings) were $27$86 million and $20$59 million at December 31, 20192022 and 2018,2021, respectively.

14. Goodwill and Intangible Assets

Intangible assets are being amortized on a straight-line basis over their estimated useful lives and are detailed below:

    As of December 31, 2019 As of December 31, 2018
(In millions) Useful
Lives
 Gross
Carrying
Amount
 Accumulated
Amortization
 Net
Amount
 Gross
Carrying
Amount
 Accumulated
Amortization
 Net
Amount
Customer relationships 22 Years $132
 $76
 $56
 $132
 $70
 $62
Patents 10-15 Years 22
 8
 14
 22
 7
 15
Other 4-20 Years 14
 9
 5
 14
 8
 6
Total amortizable intangible assets   $168
 $93
 $75
 $168
 $85
 $83

Identifiable intangible assets with finite lives are reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. During 2019, steel market challenges in the U.S. and
As of December 31, 2022As of December 31, 2021
(In millions)Useful
Lives
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Customer relationships22 Years$413 $37 $376 $413 $18 $395 
Patents5-15 Years17 12 5 17 11 
Energy Contract2 Years54 32 22 54 11 43 
Total amortizable intangible assets$484 $81 $403 $484 $40 $444 

Europe, the indefinite idling of certain Flat-Rolled facilities and recent losses in the welded tubular asset groups were considered triggering events for those long-lived asset groups. Long-lived asset impairment evaluations were performed and no impairments were identified. There were no triggering events in 2018 that required a review for impairment.
Amortization expense was $8$42 million and $26 million for both years ended December 31, 20192022 and December 31, 2018.2021, respectively. We expect a consistent level of annualapproximately $120 million in total amortization expense from 2023 through 2024.2027 and approximately $283 million in remaining amortization expense thereafter.
The carrying amount of acquired water rights with indefinite lives as of December 31, 20192022 and December 31, 20182021 totaled $75 million. The acquired water rights are tested
Below is a summary of goodwill by segment for impairment annually in the third quarter, or whenever events or circumstances indicate the carrying value may not be recoverable. U. S. Steel performed a quantitative impairment evaluation of its acquired water rights during the third quarter of 2019. Based on the results of the evaluation, the water rights were not impaired.twelve months ended December 31, 2022:

(In millions)Flat-RolledMini MillUSSETubularTotal
Balance at December 31, 2021$— $916 $$— $920 
Additions     
Balance at December 31, 2022$ $916 $4 $ $920 

15. Stock-Based Compensation Plans

U. S. Steel has outstanding stock-based compensation awards that were granted by the Compensation & Organization Committee of the Board of Directors (the Committee), or its designee, under the 2005 Stock Incentive Plan (the 2005 Plan) and the 2016 Omnibus Incentive Compensation Plan, as amended and restated (the Omnibus Plan) (collectively the Plans). On April 26, 2016, the Company's stockholders approved the Omnibus Plan and authorized the Company to issue up to 7,200,000 shares of U. S. Steel common stock under the Omnibus Plan. The Company's stockholders authorized the issuance of an additional 6,300,000 shares under the Omnibus Plan on April 25, 2017.2017, an additional 4,700,000 shares under the Omnibus Plan on April 28, 2020 and an additional 14,500,000 shares under the Omnibus Plan on April 27, 2021. While awards that were previously granted under the 2005 Plan remain outstanding, all future awards will be granted under the Omnibus Plan. As of December 31, 2019,2022, there were 7,464,7799,080,478 shares available for future grants under the Omnibus Plan.

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Generally, a share issued under the Omnibus Plan pursuant to an award other than a stock option will reduce the number of shares available under the Stock Plan by 1.731.78 shares. Shares related to awards under either plan (i) that are forfeited, (ii) that terminate without shares having been issued or (iii) for which payment is made in cash or property other than shares, are again available for awards under the Omnibus Plan. Shares delivered to U. S. Steel or withheld for purposes of satisfying the exercise price or tax withholding obligations are not available for future awards. The purpose of the Plans is to attract, retainreward and motivateretain employees and non-employee directors of outstanding ability, and to align their interests with those of thewho create long-term value for our stockholders of U. S. Steel.by delivering on objectives that support our long-term strategy. The Committee administers the Plans, and under the Omnibus Plan may make grants of stock options, restricted stock units (RSUs), performance awards, and other stock-based awards.

The following table summarizes the total stock-based compensation awards granted during the years 2019, 20182022, 2021 and 2017:2020:
Stock OptionsRestricted Stock UnitsTSR Performance Awards
ROCE Performance Awards (a)
Performance-Based Restricted Stock Units
2022 1,249,830 236,520 408,870 83,951 
2021171,000 1,891,481 306,930 485,900 676,954 
2020— 2,640,690 671,390 — — 
(a) The ROCE awards granted in 2020 are not shown in the table because they were granted in cash.
  Stock Options Restricted Stock Units TSR Performance Awards ROCE Performance Awards
2019 Grants 
 1,005,500
 210,520
 527,470
2018 Grants 
 824,195
 79,190
 247,510
2017 Grants 647,780
 348,040
 169,850
 


Stock-based compensation expense
The following table summarizes the total compensation expense recognized for stock-based compensation awards:

(In millions, except per share amounts) Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017
Stock-based compensation expense recognized:      
Cost of sales $9
 $11
 $10
Selling, general and administrative expenses 17
 21
 17
Decrease in net income 26
 32
 27
Decrease in basic earnings per share 0.15
 0.14
 0.15
Decrease in diluted earnings per share 0.15
 0.13
 0.15


(In millions, except per share amounts)Year Ended December 31, 2022Year Ended December 31, 2021Year Ended December 31, 2020
Stock-based compensation expense recognized:
Cost of sales$15 $14 $
Selling, general and administrative expenses42 41 18 
Total57 55 26 
Related deferred income tax benefit (a)
14 14 — 
Decrease in net income43 41 26 
Decrease in basic earnings per share0.18 0.16 0.13 
Decrease in diluted earnings per share0.16 0.15 0.13 

(a) Amounts for 2020 do not reflect a tax benefit as a result of a full valuation allowance on our domestic deferred tax assets.

As of December 31, 2019,2022, total future compensation cost related to nonvested stock-based compensation arrangements was $16$45 million and the average period over which this cost is expected to be recognized is approximately 1816 months.

Stock options
Compensation expense for stock options is recorded over the vesting period based on the fair value on the date of grant, as calculated by U. S. Steel using the Black-Scholes model and the assumptions listed below. Awards generally vest ratably over a three-yearthree-year service period and have a term of ten years.years. Stock options are generally issued at the average market price of the underlying stock on the date of the grant. Upon exercise of stock options, shares of U. S. Steel stock are issued from treasury stock or from authorized, but unissued common stock. There were 171,000 performance-based stock options granted in 2021. There were no stock options granted in 20192022 and 2018.2020.

Black-Scholes Assumptions (a)
 2017 Grants
Grant date price per share of option award $36.94
Exercise price per share of option award $36.94
Expected annual dividends per share $0.20
Expected life in years 5.0
Expected volatility 57%
Risk-free interest rate 2.0%
Average grant date fair value per share of unvested option awards as calculated from above $17.28
(a) The assumptions represent a weighted-average for all grants during the year.

The expected annual dividends per share are based on the latest annualized dividend rate at the date of grant; the expected life in years is determined primarily from historical stock option exercise data; the expected volatility is based on the historical volatility of U. S. Steel stock; and the risk-free interest rate is based on the U.S. Treasury strip rate for the expected life of the option.

The 171,000 performance-based stock options granted in December 2021 do not become vested and exercisable until the Company's 20-trading day average closing stock price meets or exceeds the following stock price hurdles during the seven-year period beginning on the grant date, as follows:

20-trading day Average Closing Stock Price Achievement During 7-Year Period Beginning on Grant Date (a)
Percentage of Performance-Based Stock Options Exercisable
$35.00 33.33 %
$45.00 33.33 %
$55.00 33.34 %
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(a) The $35.00 tranche vested in April 2022.

The following table shows a summary of the status and activity of stock options for the year ended December 31, 2019:2022:

  Shares Weighted-
Average
Exercise Price
(per share)
 Weighted-
Average
Remaining
Contractual Term
(in years)
 Aggregate
Intrinsic
Value
(in millions)
Outstanding at January 1, 2019 2,746,520
 $27.73
    
Granted 
 $
    
Exercised (10,435) $16.05
    
Forfeited or expired (384,254) $32.00
    
Outstanding at December 31, 2019 2,351,831
 $27.08
 4.43 $
Exercisable at December 31, 2019 2,209,073
 $26.50
 4.28 $
Exercisable and expected to vest at December 31, 2019 2,323,996
 $26.97
 4.40 $

SharesWeighted-
Average
Exercise Price
(per share)
Weighted-
Average
Remaining
Contractual Term
(in years)
Aggregate
Intrinsic
Value
(in millions)
Outstanding at January 1, 20221,659,764 $25.31 
Granted— $— 
Exercised(408,760)$20.29 
Forfeited or expired(40,789)$29.08 
Outstanding at December 31, 20221,210,215 $26.88 2.97$
Exercisable at December 31, 20221,096,215 $27.24 2.65$
Exercisable and expected to vest at December 31, 20221,210,215 $26.88 2.97$

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (difference between our closing stock price on the last trading day of 20192022 and the exercise price, multiplied by the number of in-the-money options). Intrinsic value changes are a function of the fair market value of our stock.

The total intrinsic value of stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee to exercise the option) was $5 million and $3 million during the years ended December 31, 2022 and December 31, 2021, respectively, and immaterial during the year ended December 31, 2019, $27 million during the year ended December 31, 2018 and $11 million during the year ended December 31, 2017.2020. The total amount of cash received by U. S. Steel from the exercise of options was $8 million and $7 million during the yearyears ended December 31, 20192022 and December 31, 2018, was an immaterial amount and $35 million, respectively, and the2021, respectively. The related net tax benefit realized from the exercise of these options was an immaterial amountin 2022 and $3 million in 2019 and 2018, respectively.2021.


Stock awards
Compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant.

RSUs awarded as part of annual grants generally vest ratably over three years.years. Their fair value is the average market price of the underlying common stock on the date of grant. RSUs granted in connection with new-hire or retention awards generally cliff vest three years from the date of the grant.

Total shareholder return (TSR) performance awards may vest at varying levels at the end of a three-yearthree-year performance period if U. S. Steel’s total shareholder return compared to the total shareholder return of a peer group of companies meets performance criteria during the three-year performance period. For the 2017 and 2018 awards, TSR is calculated over the full three-year performance period. For the 2019 awards, TSR is calculated as follows: 20 percent for each year in the three-yearthree-year performance period and 40 percent for the full three-year period. TSR performance awards may vest and payout 50 percent at the threshold level, 100 percent at the target level and 200 percent at the maximum level for payouts. Payment for performance in between the threshold percentages will be interpolated. The fair value of the performance awards is calculated using a Monte-Carlo simulation.

Performance awards based on the return on capital employed (ROCE) metric were granted in 2019equity in 2022 and 2018 in equity2021, and in 2017cash in cash.2020. ROCE awards granted will be measured on a weighted average basis of the Company’s consolidated worldwide earnings (loss) before interest and income taxes, as adjusted, divided by consolidated worldwide capital employed, as adjusted, over a three year period.

WeightedFor outstanding 2020 and 2021 ROCE-based equity awards, weighted average ROCE is calculated based on the ROCE achieved in the first, second and third years of the performance period, weighted at 20 percent, 30 percent and 50 percent, respectively. For outstanding 2022 ROCE-based equity awards, weighted average ROCE is calculated based on the ROCE achieved in the first, second and third years of the performance period, weighted at 20 percent for each year in the three-year performance period and 40 percent for the full three-year period. The ROCE awards will payout 50 percent at the threshold level, 100 percent at the target level and 200 percent at the maximum level. Payouts for performance in between the threshold percentages will be interpolated.

Compensation expense associated with the ROCE awards will be contingent based upon the achievement of the specified ROCE performance goals and will be adjusted on a quarterly basis to reflect the probability of achieving the ROCE metric.

ROCE performance awards may vest at the end of a three-year performance period contingent upon meeting ROCE performance goals approved by the Committee. The fair value of the ROCE performance awards is the average market price of the underlying common stock on the date of grant.
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In December 2021 and August 2022, special performance-based restricted stock unit awards (PSUs) were granted to members of the Company’s executive leadership team. Shares are earned based on the achievement of certain pre-set quantitative performance criteria during the four-year performance period, January 1, 2022 through December 31, 2025. Shares may vest following the expiration of the Performance Period if the Company satisfies the performance criteria.

The Chief Executive Officer was granted PSUs that vest with the following, equally weighted, performance metrics: (i) EBITDA margin expansion, (ii) greenhouse gas emissions intensity reduction, (iii) asset portfolio optimization, (iv) leverage metrics and (v) corporate relative valuation. Other members of the executive leadership team were granted PSUs that vest with performance criteria related to: (i) on time and on budget completion of the second mini mill (30% of the grant), (ii) EBITDA margin expansion (40% of the grant) and (iii) greenhouse gas emissions intensity reduction (30% of the grant).

For the PSU awards, a payout is achievable at threshold (50% of target), target (100% of target) or maximum (200% of target) performance achievement. Payout amounts will be interpolated between the threshold, target and maximum amounts.

The following table shows a summary of the performance awards outstanding as of December 31, 2019,2022, and their fair market value on the respective grant date:

Performance Period Fair Value
(in millions)
 Minimum
Shares
 Target
Shares
 Maximum
Shares
2019 - 2021 $17
 
 653,194
 1,306,388
2018 - 2020 $14
 
 288,379
 576,758
2017 - 2019 $4
 
 101,587
 203,174

Performance PeriodFair Value
(in millions)
Minimum
Shares
Target
Shares
Maximum
Shares
2022 - 2024$17 — 641,773 1,283,546 
2021 - 2023$31 — 1,475,765 2,951,530 
2020 - 2022$— 641,005 1,282,010 

The following table shows a summary of the status and activity of nonvested stock awards for the year ended December 31, 2019:2022:

Restricted
Stock Units
TSR Performance
Awards
(a)
ROCE Performance
Awards
(a)
Performance-Based Restricted Stock Units (a)
TotalWeighted-
Average
Grant-Date
Fair Value
 Restricted
Stock Units
 
TSR Performance
Awards
(a)
 
ROCE Performance
Awards
(a)
 Total Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2018 1,496,272
 375,787
 235,898
 2,107,957
 $30.92
Nonvested at January 1, 2022Nonvested at January 1, 20223,699,689 1,121,703 915,969 676,954 6,414,315 $16.85 
Granted 1,005,500
 210,520
 527,470
 1,743,490
 24.46
Granted1,249,830 236,520 408,870 83,951 1,979,171 24.52 
Vested (771,677) (384,664) 
 (1,156,341) 18.26
Vested(1,547,733)(69,508)(881,878)— (2,499,119)18.10 
Performance adjustment factor (b)
 
 192,332
 
 192,332
 10.02
Performance adjustment factor (b)
— (104,260)440,939 — 336,679 22.26 
Forfeited or expired (140,271) (43,658) (70,525) (254,454) 30.45
Forfeited or expired(76,039)— (7,297)(63,420)(146,756)21.21 
Nonvested at December 31, 2019 1,589,824
 350,317
 692,843
 2,632,984
 $30.72
Nonvested at December 31, 2022Nonvested at December 31, 20223,325,747 1,184,455 876,603 697,485 6,084,290 $19.02 
(a)The number of shares shown for the performance awards is based on the target number of share awards.
(b)Consists of adjustments to vested performance awards to reflect actual performance. The adjustments were required since the original grants of the awards were at 100 percent of the targeted amounts and the awards vested at greater than target.

The following table presents information on RSUs and performance awards granted:

  2019 2018 2017
Number of awards granted 1,743,490
 1,150,895
 517,890
Weighted-average grant-date fair value per share $24.46
 $41.65
 $37.68

202220212020
Number of awards granted1,979,171 3,361,265 3,312,080 
Weighted-average grant-date fair value per share$24.52 $20.24 $8.69 

During the years ended December 31, 2019, 2018,2022, 2021, and 2017,2020, the total fair value of shares vested was $21$45 million, $14$29 million, and $11$16 million, respectively.

16. Derivative Instruments

U. S. Steel is exposed to foreign currency exchange rate risks in our European operations. USSE’s revenues are primarily in euros and costs are primarily in euros and U.S. dollars (USD).dollars. U. S. Steel uses foreign exchange forward sales contracts (foreign exchange forwards) with maturities no longer than 12up to 23 months to exchange euros for USD to manage our currency requirements and exposure to foreign currency exchange rate fluctuations. Derivative instruments are required to be recognized at fair value in the Consolidated Balance Sheet. U. S. Steel did not designate euroThe USSE and Flat-Rolled segments use hedge accounting for their foreign exchange forwards. The Mini Mill segment has foreign exchange forwards entered into prior to July 1, 2019, as hedges;for which hedge accounting has not been elected; therefore, the changes in theirthe fair value wereof their foreign exchange forwards are recognized immediately in the Consolidated Statements of Operations (mark-to-market accounting). For those contracts,
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U. S. Steel will continuealso uses financial swaps to recognize changes in fair value immediately through earnings untilprotect from the contracts mature. U. S. Steelcommodity price risk associated with purchases of natural gas, zinc, tin, electricity, and iron ore pellets (commodity purchase swaps). We elected cash flow hedge accounting for euro foreign exchange forwards prospectively effective July 1, 2019. Accordingly, future gainscommodity purchase swaps for natural gas, zinc, tin, and lossesiron ore pellets and use mark-to-market accounting for euro foreign exchange forwards entered into after July 1, 2019 will be recorded within accumulated other comprehensive income (AOCI) until the related contract impacts earnings. We mitigate the risk of concentration of counterparty credit risk by purchasing our forwards from several counterparties.
In 2018, U. S. Steel entered into long-term freight contracts in its domestic operations that require payment in Canadian dollars (CAD). We entered into foreign exchange forward contracts with remainingelectricity swaps. The commodity purchase swaps where hedge accounting was elected have maturities up to 12 monthsmonths. The commodity purchase swaps where hedge accounting was not elected have maturities up to exchange USD for CAD to mitigate a portion of the related risk of exchange rate fluctuations and to manage our currency requirements. We elected to designate these contracts as cash flow hedges.

12 months.
U. S. Steel may use fixed-price forward physical purchase contractshas entered into financial derivatives that are used to partially manage our exposure tothe sales price risk relatedof certain hot-rolled coil sales (sales swaps) and iron ore pellet sales (sales swaps and zero cost collars). The sales swaps and the zero cost collars are all accounted for using hedge accounting. The hot-rolled coil sales swaps and the iron ore zero cost collars have reached maturity, and the iron ore sales swaps have maturities up to the purchases of natural gas, zinc and tin used in the production process. 13 months.
Generally, forward physical purchase contracts qualify for the normal purchase and normal sales exceptions described in ASC Topic 815 and are not subject to mark-to-market accounting. U. S. Steel also uses financial swaps to protect from the commodity price risk associated with purchases of natural gas, zinc and tin (commodity purchase swaps). We elected cash flow hedge accounting for domestic commodity purchase swaps and use mark-to-market accounting for commodity purchase swaps used in our European operations.
From time to time, we enter into financial swaps that are used to partially manage the sales price of certain hot-rolled coil and iron ore pellet sales (sales swaps). We elected cash flow hedge accounting for hot-rolled coil sales swaps effective January 1, 2018 and for iron ore pellet sales swaps effective January 1, 2019.
In accordance with the guidance in ASC Topic 820 on fair value measurements and disclosures, the fair value of our foreign exchange forwards, commodity purchase swaps and sales swaps was determined using Level 2 inputs, which are defined as "significant other observable" inputs. The inputs used are from market sources that aggregate data based upon market transactions.
The table below shows the outstanding swap quantities used to hedge forecasted purchases and sales as of December 31, 20192022, and December 31, 2018:2021:
Hedge ContractsClassification December 31, 2019 December 31, 2018
Natural gas (in mmbtus)Commodity purchase swaps 56,613,200
 33,951,016
Tin (in metric tons)Commodity purchase swaps 145
 585
Zinc (in metric tons)Commodity purchase swaps 9,819
 3,471
Hot-rolled coils (in tons)Sales swaps 
 9,000
Foreign currency (in millions of euros)Foreign exchange forwards 282
 286
Foreign currency (in millions of CAD)Foreign exchange forwards C$25
 C$50

Hedge ContractsClassificationDecember 31, 2022December 31, 2021
Natural gas (in mmbtus)Commodity purchase swaps45,174,00040,498,000
Tin (in metric tons)Commodity purchase swaps7381,648
Zinc (in metric tons)Commodity purchase swaps5,2227,167
Electricity (in megawatt hours)Commodity purchase swaps460,320810,720
Iron ore pellets (in metric tons)Commodity purchase swaps280,00030,000
Iron ore pellets (in metric tons)Zero cost collars108,0001,296,000
Iron ore pellets (in metric tons)Sales swaps1,087,500— 
Hot-rolled coils (in tons)Sales swaps11,000157,120
Foreign currency (in millions of euros)Foreign exchange forwards€266€308
Foreign currency (in millions of dollars)Foreign exchange forwards$90$2
Foreign currency (in millions of CAD)Foreign exchange forwards$1$0
The following summarizes the fair value amounts included in our Consolidated Balance Sheets as of December 31, 20192022, and December 31, 2018:2021:
(In millions)Balance Sheet LocationDecember 31, 2022December 31, 2021
Designated as Hedging Instruments
Sales swapsAccounts receivable$3 $10 
Sales swapsAccounts payable8 30 
Sales swapsInvestments and long-term receivables 
Sales swapsOther long-term liabilities1 — 
Commodity purchase swapsAccounts receivable14 17 
Commodity purchase swapsAccounts payable51 29 
Commodity purchase swapsInvestments and long-term receivables 
Commodity purchase swapsOther long-term liabilities11 
Foreign exchange forwardsAccounts receivable3 15 
Foreign exchange forwardsAccounts payable9 — 
Foreign exchange forwardsOther long-term liabilities3 — 
Not Designated as Hedging Instruments
Commodity purchase swapsAccounts receivable13 
Commodity purchase swapsInvestments and long-term receivables1 
(In millions) Designated as Hedging InstrumentsBalance Sheet Location December 31, 2019 December 31, 2018
Sales swapsAccounts payable $
 $1
Commodity purchase swapsAccounts receivable 1
 2
Commodity purchase swapsAccounts payable 17
 17
Commodity purchase swapsInvestments and long-term receivables 1
 
Commodity purchase swapsOther long-term liabilities 7
 1
Foreign exchange forwardsAccounts payable 1
 1
Foreign exchange forwardsOther long-term liabilities 
 1
      
Not Designated as Hedging Instruments     
Foreign exchange forwardsAccounts receivable 4
 12
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The table below summarizes the effect of hedge accounting on AOCI and amounts reclassified from AOCI into earnings for 2019, 2018,2022, 2021, and 2017:2020:
 Gain (Loss) on Derivatives in AOCI Amount of Gain (Loss) Recognized in Income(Loss) Gain on Derivatives in AOCIAmount of (Loss) Gain Recognized in Income
(In millions) 2019 2018 2017 
Location of Reclassification from AOCI (a)
 2019 2018 2017(In millions)202220212020
Location of Reclassification from AOCI (a)
202220212020
Sales swaps $1
 $
 $
 
Net sales (b)
 $(1) $(13) $
Sales swaps$14 $$(26)Net sales$(18)$(170)$— 
Commodity purchase swaps (6) (15) 1
 
Cost of sales (c)
 (19) (8) (2)Commodity purchase swaps(35)(11)17 
Cost of sales (b)
103 57 (24)
Foreign exchange forwards 1
 (2) 
 Cost of sales (1) 
 
Foreign exchange forwards(16)33 (17)Cost of sales44 (3)(7)
(a) The earnings impact of our hedging instruments substantially offsets the earnings impact of the related hedged items since ineffectiveness is less than $1 million.resulting in immaterial ineffectiveness.
(b) U. S. Steel elected cash flow hedge accounting for hot-rolled coil sales swaps effective January 1, 2018 and for iron ore pellet sales swaps effective January 1, 2019.
(c) Costs for commodity purchase swaps are recognized in cost of sales as products are sold.

The table below summarizes the impact of derivative activity where hedge accounting has not been elected on our Consolidated Statements of Operations for 2019, 20182022, 2021 and 2017:2020:
   Amount of Gain (Loss) Recognized in Income
(In millions)Consolidated Statement of Operations Location 2019 2018 2017
Sales swaps (a)
Net sales $
 $(1) $6
Commodity purchase swaps (b)
Cost of sales 
 
 3
Foreign exchange forwards (c)
Other financial costs 17
 24
 (23)
Amount of (Loss) Gain Recognized in Income
(In millions)Consolidated Statement of Operations Location202220212020
Commodity purchase swapsCost of sales$18 $19 $(1)
Foreign exchange forwardsOther financial costs(7)— 
(a)
U. S. Steel elected cash flow hedge accounting for hot-rolled coil sales swaps effective January 1, 2018 and for iron ore pellet sales swaps effective January 1, 2019.
(b) The 2017 impacts were for de-designated zinc contracts for our domestic operations.
(c) U. S. Steel has elected hedge accounting for foreign exchange forwards to exchange USD for CAD. U. S. Steel elected cash flow hedge accounting for euro foreign exchange forwards prospectively effective July 1, 2019.

At current contract values, $17$43 million in AOCI as of December 31, 20192022, will be recognized as an increase in cost of sales over the next year, and $5 million in AOCI as related hedged items areof December 31, 2022, will be recognized as a decrease in earnings. The maximum derivative contract duration for commodity purchase swaps is 23 months andnet sales over the maximum duration for foreign exchange forwards is 12 months. There are no outstanding contracts for commodity sales swaps.next year.


17. Debt

      December 31,
(In millions) Interest
Rates %
 Maturity 2019 2018
2037 Senior Notes 6.650 2037 $350
 $350
2026 Senior Notes 6.250 2026 650
 650
2026 Senior Convertible Notes 5.000 2026 350
 
2025 Senior Notes 6.875 2025 750
 750
Environmental Revenue Bonds 4.875 - 6.750 2024 - 2049 620
 400
Fairfield Caster Lease   2022 18
 22
Other finance leases and all other obligations   2020-2029 48
 6
Amended Credit Facility, $2.0 billion Variable 2024 600
 
USSK Credit Agreement Variable 2023 393
 229
USSK credit facilities Variable 2021 
 
Total debt     3,779
 2,407
Less unamortized discount and debt issuance costs     138
 26
Less short-term debt and long-term debt due within one year     14
 65
Long-term debt     $3,627
 $2,316

December 31,
(In millions)Issuer/BorrowerInterest
Rates %
Maturity20222021
2037 Senior NotesU. S. Steel6.6502037$274 $350 
2029 Senior Secured NotesBig River Steel6.6252029720 720 
2029 Senior NotesU. S. Steel6.8752029475 750 
2026 Senior Convertible NotesU. S. Steel5.0002026350 350 
Environmental Revenue BondsU. S. Steel4.125 - 6.7502024 - 2052924 647 
Environmental Revenue BondsBig River Steel4.500 - 4.7502049752 752 
Finance leases and all other obligationsU. S. SteelVarious2023-2029100 67 
Finance leases and all other obligationsBig River SteelVarious2023-2031176 122 
ECA Credit AgreementBig River SteelVariable2031136 136 
Credit Facility AgreementU. S. SteelVariable2027 — 
Big River Steel ABL FacilityBig River SteelVariable2026 — 
USSK Credit AgreementU. S. Steel KosiceVariable2026 — 
USSK Credit FacilityU. S. Steel KosiceVariable2024 — 
Total debt3,907 3,894 
Less unamortized discount, premium and debt issuance costs(70)
Less short-term debt, long-term debt due within one year, and short-term issuance costs63 28 
Long-term debt$3,914 $3,863 

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The following is a summary of debt repayments for our Senior notes and environmental revenue bonds made during the twelve months ended December 31, 2022:

Year Ended December 31, 2022
Debt Instrument (in millions)DateDebt Extinguished
2037 Senior Notes(a)
Third quarter 2022$76 
2029 Senior Notes(b)
Third quarter 2022225 
Hoover, AL Environmental Revenue BondsSecond quarter 202214 
2029 Senior Notes(b)
Second quarter 202248 
2029 Senior Notes(b)
First quarter 2022
Total$365
(a) There were redemption discounts and unamortized debt issuance cost write-offs of $6 million and $1 million, respectively, included in (gain) loss on debt extinguishment on the Consolidated Statement of Operations related to the repayment.
(b) During the twelve months ended December 31, 2022, there were no redemption premiums paid and a net loss of $4 million for the write-off of unamortized discounts and debt issuance costs, included in (gain) loss on debt extinguishment on the Consolidated Statement of Operations, as a result of these debt repayments.

Arkansas Development Finance Authority Environmental Improvement Revenue Bonds, Series 2022 (United States Steel Corporation Project) (Green Bonds)
On September 6, 2022, U. S. Steel closed on an offering of $290 million aggregate principal amount of 5.450% Environmental Improvement Revenue Bonds due 2052 (2052 ADFA Green Bonds). U. S. Steel received net proceeds of approximately $287 million after fees of approximately $3 million related to the underwriting and third-party expenses. The net proceeds from the issuance of the 2052 ADFA Green Bonds will be used to partially fund work related to U. S. Steel's solid waste disposal facilities, including two EAFs and other equipment facilities at its new technologically-advanced flat rolled steel making facility, BR2, currently under construction near Osceola, Arkansas.

On and after September 1, 2025, the Company may redeem the 2052 ADFA Green Bonds at its option, at any time in whole or from time to time in part at the redemption prices (expressed in percentages of principal amount) listed below, plus accrued and unpaid interest on the 2052 ADFA Green Bonds, if any, to, but excluding, the applicable redemption date, if redeemed during the twelve-month period beginning on September 1 of each of the years indicated below.

YearRedemption Price
2025105.000 %
2026104.000 %
2027103.000 %
2028102.000 %
2029101.000 %
2030 and thereafter100.000 %

At any time prior to September 1, 2025, U. S. Steel may also redeem the 2052 ADFA Green Bonds, at our option, in whole or in part, or from time to time, at a price equal to the greater of 100 percent of the principal amount of the 2052 ADFA Green Bonds plus accrued and unpaid interest, if any, or the sum of the present value of the redemption price of the 2052 ADFA Green Bonds if they were redeemed on September 1, 2025, plus interest payments due through September 1, 2025, discounted to the date of redemption on a semi-annual basis at the applicable tax-exempt municipal bond rate, plus accrued and unpaid interest, if any.

2026 Senior Convertible Notes
OnIn October 21, 2019, U. S. Steel issued an aggregate principal amount of $300$350 million of 5.00% Senior Convertible Notes due November 1, 2026 (2026 Senior Convertible Notes), with a 30-day option to purchase up to an additional $50 million in aggregate principal amount of 2026 Senior Convertible Notes, on the same terms and conditions. On October 25, 2019, U. S. Steel issued an additional $50 million of 2026 Senior Convertible Notes after the full option was exercised. U. S. Steel received net proceeds of approximately $340 million from the sale of the 2026 Senior Convertible Notes after deducting underwriting fees and estimated offering expenses. The Company intends to use the net proceeds for general corporate purposes, including, without limitation, for previously announced strategic investments and capital expenditures.. Interest on the 2026 Senior Convertible Notes is payable semi-annually on May 1 and November 1 of each year, commencing on May 1, 2020.

year. The initial conversion rate for the 2026 Senior Convertible Notes is 74.8391 shares of U. S. Steel common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $13.36 per share of common stock, subject to adjustment as defined in the 2026 Senior Convertible Notes. On the issuance date ofpursuant to the 2026 Senior Convertible Notes the market price of U. S. Steel’s common stock was below the stated conversion price of $13.36 so there was no beneficial conversion option to the holders.indenture. Based on the initial conversion rate, the 2026 Senior Convertible Notes are convertible into 26,193,685 shares of U. S. Steel common stock and we reserved for the possible issuance of 33,396,930 shares, which is the maximum amount that could be issued upon conversion. Prior to August 1, 2026, holders of notes may convert all or a portion of their notes at their option only upon the satisfaction of specified conditions and during certain periods. On or after August 1, 2026, holders may convert all or a portion of their notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, we will satisfy the obligation with cash, common stock, or a combination thereof, at our election. U. S. Steel may not redeem the 2026 Senior Convertible Notes prior to November 5, 2023. On or after November 5, 2023, and prior to August 1, 2026, if the price per share of U. S. Steel's common stock has been at least 130% of the conversion price for specified periods, U. S. Steel may redeem all or a portion of the 2026 Senior Convertible Notes at a cash redemption price of 100% of the principal amount, plus accrued and unpaid interest.
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If U. S. Steel undergoes a fundamental change, as defined in the 2026 Senior Convertible Notes, holders may require us to repurchase the 2026 Senior Convertible Notes in whole or in part for cash at a price equal to 100% of the principal amount of the 2026 Senior Convertible Notes to be purchased plus any accrued and unpaid interest (including additional interest, if any) up to, but excluding the repurchase date.


Big River Steel — Sustainability Linked ABL Facility
For accounting purposes, the proceeds received from the issuance of the notes were allocated between debt and equity to reflect the fair value of the conversion option embedded in the notes and the fair value of similar debt without the conversion option. As a result, based on the aggregate principal amount of $350 million, we recorded approximately $106 million of the gross proceeds of the 2026 Senior Convertible Notes as an increase in additional paid-in capital with the offsetting amount recorded as a debt discount. The debt discount will be amortized over the term of the 2026 Senior Convertible Notes using an estimated interest rate of 10.5% (the estimated effective borrowing rate for nonconvertible debt at the time of issuance) which will accrete the carrying value of the notes to the principal amount at maturity. As of December 31, 2019, the remaining unamortized debt discount was $103 million and the net carrying amount of the 2026 Senior Convertible Notes was $247 million.

Environmental Revenue Bonds
On October 10, 2019, we launched offerings of 2 series of environmental revenue bonds in aggregate principal amount of approximately $368 million, that will mature between 2024 and 2049 (collectively, the “2019 Environmental Revenue Bonds”). Proceeds of the 2019 Environmental Revenue Bonds in the amount of approximately $93 million were used to redeem a portion of our existing outstanding environmental revenue bonds for which we issued a conditional redemption notice. Proceeds of the 2019 Environmental Revenue Bonds in the amount of $275 million will be used to finance or refinance the acquisition, construction, equipping and installation of certain solid waste disposal facilities, including an electric arc furnace and other equipment and facilities at the Company’s Fairfield Works. The 2019 Environmental Revenue Bonds closed on October 25, 2019.

The Company also redeemed $55 million of outstanding Indiana Finance Authority environmental revenue bonds in December 2019.

Amended and Restated Credit Agreement
On October 25, 2019, we entered into a new five-yearBig River Steel's amended senior secured asset-based revolving credit facility (Big River Steel ABL Facility) matures on July 23, 2026. The facility is secured by first-priority liens on accounts receivable and inventory and certain other assets and second priority liens on most tangible and intangible assets of Big River Steel in each case subject to permitted liens. Additionally, the amendment includes sustainability targets related to greenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

The Big River Steel ABL Facility provides for borrowings for working capital and general corporate purposes in an aggregate amount equal up to the lesser of $2.0 billion (Fifth(a) $350 million and (b) a borrowing base calculated based on specified percentages of eligible accounts receivables and inventory, subject to certain adjustments and reserves.

Big River Steel LLC must maintain a fixed charge coverage ratio of at least 1.00 to 1.00 for the most recent twelve consecutive months when availability under the Big River Steel ABL Facility is less than the greater of ten percent of the borrowing base availability and $13 million. Based on the most recent four quarters as of December 31, 2022, Big River Steel would have met the fixed charge coverage ratio test. The facility includes affirmative and negative covenants and events of default that are customary for facilities of this type.

There were no loans outstanding under the Big River Steel ABL Facility at December 31, 2022.

U. S. Steel — Sustainability Linked Credit Facility Agreement
On May 27, 2022, U. S. Steel entered into the Sixth Amended and Restated Credit Facility Agreement (Credit Facility Agreement) to replace the prior $1.5 billion credit facility agreement.existing Fifth Amended and Restated Credit Facility Agreement (Fifth Credit Facility Agreement). The Fifth Credit Facility Agreement has substantially the same terms as the prior creditFifth Credit Facility Agreement, except the Credit Facility Agreement references the Secured Overnight Financing Rate instead of the London Interbank Offered Rate, adjusts the individual lenders' commitments, and renews the five-year maturity to May 27, 2027. The Credit Facility Agreement also adjusts the threshold for the fixed charge coverage ratio. The total availability under the facility agreement, exceptremained the same at $1,750 million, and the financial impact from replacing the Fifth Credit Facility Agreement will mature five years from the date of effectiveness, includes a “first-in, last-out” tranche in an amount of $150 million and includes certain other changes, including changes to the fixed charge negative covenant test allowing us to exclude (i) certain capital expenditures from the calculation of the test and (ii) certain restricted payments made pursuant to any share repurchase program from the calculation of "consolidated fixed charges." On October 30, 2019, we drew $700 million, which included $5 million in fees, onwas immaterial. Consistent with the Fifth Credit Facility Agreement, the Credit Facility Agreement is secured by first-priority liens on certain accounts receivable and inventory and includes targets related to fundgreenhouse gas emissions intensity reduction, safety performance and facility certification by ResponsibleSteel™.

The Credit Facility Agreement provides for borrowings for working capital and general corporate purchases in an amount equal to the closinglesser of our acquisition(a) $1,750 million or (b) a borrowing base calculated based on specified percentages of a 49.9% interest in Big River Steel. On November 14, 2019, $100 million of outstanding drawings was repaid on the facility. On January 16, 2020, U. S. Steel made an additional payment of $50 million on this facility.
eligible accounts receivable and inventory, subject to certain adjustments and reserves. As of December 31, 2019,2022, there was $600were approximately $4 million of letters of credit issued and no loans drawn under the $2.0 billion Fifth Credit Facility Agreement. U. S. Steel must maintain a fixed charge coverage ratio of at least 1.00 to 1.00 for the most recent four consecutive quarters when availability under the Fifth Credit Facility Agreement is less than the greater of 10ten percent of the total aggregate commitmentsmaximum facility availability and $200$140 million. Based on the most recent four quarters as of December 31, 2019, we2022, the Company would have met the fixed charge negative covenantcoverage ratio test. However, since the value of our accounts receivable and inventory less specified reserves do not support the full amount of the facility at December 31, 2019, the amount available to the Company under this facility was reduced by $20 million. The availability under the Fifth Credit Facility Agreement was $1.38 billion as of December 31, 2019.

The Fifth Credit Facility Agreement provides for borrowings at interest rates based on defined, short-term market rates plus a spread based on availability and includes other customary terms and conditions including restrictions on our ability to create certain liens and to consolidate, merge or transfer all, or substantially all, of our assets. The Fifth Credit Facility Agreement expires in October 2024. Maturity may be accelerated 91 days prior to the stated maturity of any outstanding senior debt if excess cash and credit facility availability do not meet the liquidity conditions set forth in the Fifth Credit Facility Agreement. Borrowings are secured by liens on substantially all inventory and trade accounts receivable of the Company and subsidiary guarantors.


U. S. Steel Košice (USSK) credit facilities
At December 31, 2019, USSK had borrowings of €350Credit Facilities
On September 29, 2021, USSK entered into a €300 million (approximately $393$320 million) under its €460 million (approximately $517 million) revolvingunsecured sustainability linked credit facility. At December 31, 2018, USSK had borrowings of €200 million (approximately $229 million) under its €460 million (approximately $527 million) revolving credit facility.agreement (USSK Credit Agreement). The USSK Credit Agreement matures in 2026 and contains certain USSK specific financial covenants including a minimum stockholders' equityas well as sustainability targets related to assets ratiogreenhouse gas emissions intensity reduction, safety performance and net debt to EBITDA ratio. The covenants are measured semi-annually at June and December each year for the period covering the last twelve calendar months, with the first net debt to EBITDA measurement occurring at June 2021. If USSK does not comply with the USSK Credit Agreement financial covenants, it would constitute an event of default under the USSK Credit Agreement, under which USSK may not draw upon the facility and the majority lenders, as defined in the USSK Credit Agreement, may cancel any and all commitments, and/or accelerate full repayment of any or all amounts outstanding under the USSK Credit Agreement. On December 23, 2019, USSK entered into a supplemental agreement that amended the USSK Credit Agreement leverage covenant and pledged certain USSK trade receivables and inventory as collateral in support of USSK's obligations.certification by ResponsibleSteel™. At December 31, 2019,2022, USSK had availability of €110 million (approximately $124 million)no borrowings under the USSK Credit Agreement.

Under the USSK Credit Agreement, USSK is required to maintain a net debt to EBITDA ratio of less than 3.50:1.00 for the rolling twelve months ending June 30, 2023. The Company has determined that it may not be able to comply with the EBITDA ratio covenant at June 30, 2023, based on the currently forecasted EBITDA for the twelve-month period ending June 30, 2023. This could partially or fully limit USSK’s ability to borrow under the USSK Credit Agreement.

Any amendment or waiver may lead to additional lender protections, including a reduction of loan commitments or less favorable terms, and there can be no assurance that USSK can obtain waivers or amendments in timely fashion, or on acceptable terms or at all. The Company believes that USSK will have adequate cash on hand as of June 30, 2023, and will not need to borrow under the USSK Credit Agreement.

At December 31, 2019,2022, USSK had 0no borrowings under its €20 million and €10 million credit facilities (collectively approximately $33facility (approximately $21 million) (USSK Credit Facility) and the availability was approximately $31$5 million due to approximately $2$16 million of customs and other guarantees outstanding.
Each
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Table of these facilities bear interest at the applicable inter-bank offer rate plus a margin and contain customary terms and conditions.Contents

Export Credit Agreement
On December 10, 2019, U. S. Steel entered into an Export Credit Agreement (ECA) with KfW IPEX-Bank GMBH (Facility Agent) and certain other lenders (Lenders). Funding of the ECA is expected to occur during the first quarter of 2020. The purpose of the ECA is to finance equipment purchased for the endless casting and rolling facility under construction at our Mon Valley Works facility in Braddock, Pennsylvania. Loans available under the ECA total approximately $288 million and are made up of a Commercial Facility of approximately $38 million and a Covered Facility of approximately $250 million. The Covered Facility was entered into in conjunction with a guarantee agreement between the Lenders and Oesterreichische Kontrollbank AG (OeKB Guarantor) which provides certain guarantees (OeKB Guarantee) to the Lenders and the project equipment supplier (Supplier). Payment of loans will be due every six months from the earlier of the date on which the relevant goods and services are accepted from the Supplier or April 30, 2023 (Starting Point of Credit). Each loan granted from the Covered Facility must be repaid in full within eight years from the Starting Point of Credit. Each loan granted from the Commercial Facility must be repaid in full within five years from the Starting Point of Credit.

If at any time, any portion of the OeKB Guarantee becomes unlawful or invalid, or if at any time the OeKB Guarantor attempts to rescind, suspend, or terminate any portion of the OeKB Guarantee, each Lender’s Covered Facility commitments are reduced to zero and each Covered Facility amount outstanding becomes fully due within 30 days. If at any time performance under the agreement with the Supplier becomes impaired the Facility Agent may request that U. S. Steel prepay outstanding loans within 30 days. If the costs under the agreement with the Supplier against which loans may be drawn are reduced, the Facility Agent may request prepayment in an amount corresponding with the reduction within 30 days. The Company is required to comply with a number of customary covenants and there are customary events of default and remedies for credit facilities of this nature.

Change in control event
If there is a change in control of U. S. Steel: (a) debt obligations totaling $3,093 million as of December 31, 2019 may be declared due and payable; (b) the Credit Facility Agreement and the USSK credit facilities may be terminated and any amounts outstanding declared due and payable; and (c) U. S. Steel may be required to either repurchase the leased Fairfield Works slab caster for $19 million or provide a letter of credit to secure the remaining obligation.

Debt Maturities – Aggregate maturities of debt are as follows (in millions):
20232024202520262027Later YearsTotal
$65 $132 $44 $520 $99 $3,046 $3,906 
2020 2021 2022 2023 2024 Later
Years
 Total
$14
 $12
 $17
 $399
 $664
 $2,673
 $3,779




18. Pensions and Other Benefits

U. S. Steel has defined contribution or multi-employermultiemployer retirement benefits for more than three-quarters80 percent of its employees in the United States and non-contributory defined benefit pension plans covering the remaining employees. Benefits under the defined benefit pension plans are based upon years of service and final average pensionable earnings, orwith a minimum benefit based upon years of service, whichever is greater.service. In addition, pension benefits for most non-represented employees under these plans are based upon a percent of total career pensionable earnings. Effective December 31, 2015, non-represented participants in the defined benefit plan no longer accrue additional benefits under the plan. For those non-represented employees without defined benefit coverage (defined benefit pension plan was closed to new participants in 2003) and those for which the defined benefit plan was frozen, the Company also provides in the defined contribution plans (401(k) plans) a retirement account benefit based on salary and attained age. Most non-represented employees also participate in the 401(k) plans whereby the Company matches a certain percentage of salary based on the amount contributed by the participant. AtAs of December 31, 2019,2022, more than two-thirds75 percent of U. S. Steel’s represented employees in the United States are covered by the Steelworkers Pension Trust (SPT),SPT, a multi-employermultiemployer pension plan, to which U. S. Steel contributes on the basis of a fixed dollar amount for each hour worked.


On November 13, 2018,Certain hourly employees of U. S. Steel’s flat-rolled, tubular, cokemaking and iron ore operations in the United States are covered by collective bargaining agreements with the USW ratified successor four year Collective Bargainingentered into effective September 1, 2022 (the 2022 Labor Agreements) that expire on September 1, 2026. The 2022 Labor Agreements withinclude a signing bonus for each eligible USW-represented employee and annual 5% wage increases effective September 1, 2022, 2023, 2024 and 2025. Additionally, the 2022 Labor Agreements provide for increases to our pension and retirement benefits, including increases to our defined benefit pension plan, retiree healthcare contributions, and to the contribution rate to the SPT from $3.50 to $4.00 per hour effective January 1, 2023. During the fourth quarter of 2022, U. S. Steel recorded a charge of approximately $67 million for the 2022 Labor Agreements signing bonus and related costs which was recognized primarily as a component of Cost of sales on the Consolidated Statements of Operations.

In addition, as part of the collective bargaining process, U. S. Steel and the USW agreed to leverage the overfunded OPEB plans to support the benefits provided to active represented employees. Beginning January 1, 2023, this agreement allows the Company to use a certain amount of surplus VEBA assets (the surplus amount) to pay for legally permissible benefits under Section 501(c)(9) of the Internal Revenue Code for active employees and retirees of the USW. The surplus amount will represent a one-time transfer of VEBA assets to a subaccount to be used for these employees and retirees, which will take place in the first quarter 2023. The surplus amount of $595 million was determined as of December 31, 2022 (after merger of the UPI VEBA) and is the balance of VEBA assets in excess of 135% of the retiree obligation. The Company will be permitted to withdraw a target of $75 million annually, with a guaranteed annual minimum of $50 million, on a quarterly pro rata basis, from the subaccount to cover the cost of the permissible benefits for active USW employees and USW retirees. As a result of its designation for this purpose, the surplus amount is presented as $75 million in Other current assets and $520 million in Other noncurrent assets on the Consolidated Balance Sheet as of December 31, 2022. Pursuant to the agreement with the USW, the Company merged the United States Steel Corporation Plan for Active Employee Insurance Benefits with and into the United States Steel Corporation Plan for Retiree Insurance Benefits effective January 1, 2023. Upon the one-time transfer from the VEBA to the subaccount, the surplus assets will no longer be accounted for under ASC 715, Compensation-Retirement Benefits and is instead expected to be accounted for primarily under the provisions of ASC 825 Financial Instruments, which is likely to result in the portfolio being accounted for on a fair value basis, with gains and losses recognized in earnings, and reported as activity in Other financial costs (benefits) on the Company's Consolidated Statements of Operations.

On November 8, 2021, U. S. Steel Tubular Products, Inc. subsidiaryentered into a commitment agreement with Banner Life Insurance Company and William Penn Life Insurance Company of New York (the 2018 Labor Agreements).“Insurers”) and State Street Global Advisors Trust Company, as independent fiduciary to the United States Steel Corporation Plan for Employee Pension Benefits (Revision of 2003), for the plan to purchase group annuity contracts and transfer approximately $284 million of its pension plan obligations to the Insurers. The 2018 Labor Agreements were effectivepurchase of the group annuity contracts was funded directly by the assets of the pension plan. The purchase resulted in the transfer of administrative and benefit-paying responsibilities for approximately 17,800 U.S. retirees and beneficiaries to the Insurers. The Insurers began paying benefits for certain retirees and beneficiaries in the Plan on January 1, 2022. There was no change to the pension benefits for any retirees and beneficiaries as a result of September 1, 2018 and expire on September 1, 2022.the transaction. As a result of the 2018 Labor Agreements,transaction, the Corporation recognized a non-cash pension settlement charge of approximately $93 million. This amount was reclassified to earnings through Net interest and other financial costs from Accumulated other comprehensive loss.

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In addition during 2021, the Company recorded termination charges of approximately $34 million in pensions and $17 million in other benefits related to the planned disposition of a component within the flat-roll segment. These charges were recognized as Restructuring and other charges on the Consolidated Statements of Operations.

In February of 2020, U. S. Steel acquired the remaining 50% ownership of its joint venture with UPI and its associated benefit plans. Upon acquisition, UPI's defined benefit pension and other benefit liability increased $26was estimated on a net basis at $8 million after considering higher wagesand $55 million, respectively.

On October 26, 2022, U. S. Steel entered into an agreement with Pacific Life Insurance Company (the Insurer) and State Street Global Advisors Trust Company, as independent fiduciary to the UPI Pension Plan, for the plan to purchase group annuity contracts and transfer approximately $115 million of its pension plan obligations to the Insurer. The purchase of the group annuity contracts was completed on final average pay formulasNovember 1, 2022 and higher flat rate minimum multipliers.funded directly by the assets of the pension plan. The purchase resulted in the transfer of the administrative and benefit-paying responsibilities for approximately 850 U.S. retirees and beneficiaries to the Insurer. The Insurer began paying benefits for certain retirees and beneficiaries in the Plan on January 1, 2023. There was no change to the pension benefits for any retirees and beneficiaries as a result of the transaction. As a result of the transaction, the Corporation recognized a non-cash pension settlement credit of approximately $3 million. This amount was reclassified to earnings through Net interest and other financial costs from accumulated other comprehensive loss.

Effective as of December 15, 2022, the UPI Pension Plan was merged into the U. S. Steel pension plan.

U. S. Steel’s defined benefit retiree health care and life insurance plans (Other Benefits) cover the majority of its represented employees in the United States upon their retirement. Health care benefits are provided for Medicare and pre-Medicare retirees, with Medicare retirees largely enrolled in Medicare Advantage Plans. Both are subject to various cost sharing features, and in most cases domestically, an employer cap on total costs. The Other Benefits plan was closed to represented employees hired or rehired under certain conditions on or after January 1, 2016.

Per an amendment effective June 30, 2014 to theThe retiree medical and retiree life insurance plan,plans, for non-represented employees were amended to eliminate retiree medical benefits effective December 31, 2017, and to eliminate retiree life insurance benefits for non-represented employees who retired after December 31, 2017 were eliminated.2017.

The majority of U. S. Steel’s European employees are covered by government-sponsored programs into which U. S. Steel makes required contributions. Also, U. S. Steel sponsors defined benefit plans for most European employees covering benefit payments due to employees upon their retirement, some of which are government mandated. These same employees receive service awards throughout their careers based on stipulated service and, in some cases, age and service.


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U. S. Steel uses a December 31 measurement date for its plans and may have an interim measurement date if significant events occur. Details relating to pension benefits and Other Benefits are below.

Pension BenefitsOther Benefits
(In millions)2022202120222021
Change in benefit obligations
Benefit obligations at January 1$5,422 $6,186 $1,620 $1,841 
Service cost45 53 9 11 
Interest cost157 163 49 50 
Plan amendments120 — 10 — 
Actuarial losses (gains)(1,011)(202)(332)(171)
Exchange rate gain(1)(3) — 
Settlements, curtailments and termination benefits(108)(358)2 19 
Benefits paid(438)(417)(122)(130)
Benefit obligations at December 31$4,186 $5,422 $1,236 $1,620 
Change in plan assets
Fair value of plan at January 1$5,632 $6,035 $2,094 $2,111 
Actual return on plan assets(904)394 (258)70 
Plan Spin-Offs and Mergers — (595)— 
Asset reversion —  (4)
Employer contributions — 2 
Settlements(121)(380)  
Benefits paid from plan assets(437)(417)(92)(85)
Fair value of plan assets at December 31$4,170 $5,632 $1,151 $2,094 
Funded status of plans at December 31(16)210 (85)474 
  Pension Benefits Other Benefits
(In millions) 2019 2018 2019 2018
Change in benefit obligations        
Benefit obligations at January 1 $5,626
 $6,107
 $2,121
 $2,379
Service cost 44
 49
 13
 17
Interest cost 237
 233
 91
 92
Plan amendments 
 26
 
 
Actuarial (gains) losses 416
 (223) (195) (185)
Exchange rate loss 1
 (3) 
 
Settlements, curtailments and termination benefits 
 (18) 
 
Benefits paid (502) (545) (154) (182)
Benefit obligations at December 31 $5,822
 $5,626
 $1,876
 $2,121
Change in plan assets        
Fair value of plan at January 1 $4,960
 $5,732
 $1,860
 $2,042
Actual return on plan assets 948
 (228) 274
 (49)
Employer contributions 
 
 
 
Benefits paid from plan assets (502) (544) (109) (133)
Fair value of plan assets at December 31 $5,406
 $4,960
 $2,025
 $1,860
Funded status of plans at December 31 (416) (666) 149
 (261)


For Pension Benefits,pension benefits, the largest contributor to the actuarial lossgain in 20192022 was the decreaseincrease in the discount rate from 4.41%3.01% at December 31, 20182021 to 3.35%5.55% at December 31, 2019. This loss was partially offset by a change in mortality assumptions.2022. In 2018,2021, the largest contributor of actuarial gain was the increase in the discount rate from 4.00%2.72% at December 31, 20172020 to 4.41%3.01% at December 31, 2018.2021.

For Other Benefits, the largest contributor to the actuarial gain in 20192022 was the increase in the discount rate from 3.11% at December 31, 2021 to 5.66% at December 31, 2022. There were also gains at December 31, 2022 attributable to reductions in future health care costs. In 2021, the largest contributor of actuarial gain was attributable to reductions in future health care costs and assumptions on future participant enrollment in the plan. The gain was partially offset by a decreaseincrease in the discount rate from 4.47%2.80% at December 31, 20182020 to 3.43%3.11% at December 31, 2019. In 2018, the largest contributor of actuarial gain was the increase in discount rate from 4.03% at December 31, 2017 to 4.47% at December 31, 2018. Reductions to future health care costs at December 31, 2018 also contributed to the actuarial gain.2021.

Amounts recognized in accumulated other comprehensive loss:

    2019  
(In millions) 12/31/2018 Amortization Activity 12/31/2019
Pensions    
Prior Service Cost $18
 $(2) $
 $16
Actuarial Losses 2,442
 (134) (207) 2,101
Other Benefits        
Prior Service Cost (80) (29) 
 (109)
Actuarial Gains (17) (3) (391) (411)


2022
(In millions)12/31/2021AmortizationActivity12/31/2022
Pensions
Prior Service Cost$12 $(2)$120 $130 
Actuarial Losses1,296 (70)250 1,476 
Other Benefits
Prior Service Credit(74)24 (41)
Actuarial Gains(693)53 18 (622)










As of December 31, 20192022 and 2018,2021, the following amounts were recognized in the Consolidated Balance Sheet:

Pension BenefitsOther Benefits
(In millions)2022202120222021
Noncurrent assets$10 $252 $ $535 
Current liabilities(2)(1)(37)(3)
Noncurrent liabilities(24)(41)(48)(59)
Accumulated other comprehensive loss (a)
1,606 1,308 (663)(767)
Net amount recognized$1,590 $1,518 $(748)$(294)

(a)    Accumulated other comprehensive loss effects associated with accounting for pensions and other benefits in accordance with ASC Topic 715 at December 31, 2022 and December 31, 2021, respectively, are reflected net of tax of $626 million and $531 million respectively, on the Consolidated Statements of Stockholders’ Equity.
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  Pension Benefits Other Benefits
(In millions) 2019 2018 2019 2018
Noncurrent assets (a)
 
 
 158
 
Current liabilities (3) (2) (1) (52)
Noncurrent liabilities (413) (664) (8) (209)
Accumulated other comprehensive loss (b)
 2,117
 2,460
 (520) (97)
Net amount recognized $1,701
 $1,794
 $(371) $(358)
(a)
Included in Noncurrent assets are $49 million of expected retiree medical and life insurance payments for the next twelve months.
(b)
Accumulated other comprehensive loss effects associated with accounting for pensions and other benefits in accordance with ASC Topic 715 at December 31, 2019 and December 31, 2018, respectively, are reflected net of tax of $800 million and $991 million respectively, on the Consolidated Statements of Stockholders’ Equity.

The Accumulated Benefit Obligation (ABO) for all defined benefit pension plans was $5,636$4,103 million and $5,454$5,274 million at December 31, 20192022 and 2018,2021, respectively.

  December 31,
(In millions) 2019 2018
Information for pension plans with an accumulated benefit obligation in excess of plan assets:    
Aggregate accumulated benefit obligations (ABO) $(5,636) $(5,454)
Aggregate projected benefit obligations (PBO) (5,822) (5,626)
Aggregate fair value of plan assets 5,406
 4,960

December 31,
(In millions)20222021
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
Aggregate accumulated benefit obligations (ABO)$(19)$(294)
Aggregate projected benefit obligations (PBO)(26)(309)
Aggregate fair value of plan assets 268 

The aggregate PBO in excess of plan assets reflected above is included in the payroll and benefits payable and employee benefits lines on the Consolidated Balance Sheet.

Following are the details of net periodic benefit costs related to Pension and Other Benefits:

Pension BenefitsOther Benefits
(In millions)202220212020202220212020
Components of net periodic benefit cost (credits):
Service cost$45 $53 $51 $9 $11 $12 
Interest cost157 163 193 49 50 63 
Expected return on plan assets(357)(361)(333)(91)(81)(80)
Amortization - prior service costs (credits)2 (24)(29)(6)
- actuarial losses (gains)73 132 145 (53)(23)(16)
Net periodic benefit cost, excluding below(80)(11)58 (110)(72)(27)
Multiemployer plans (a)
74 75 76  — — 
Settlement, termination and curtailment losses12 135 11 2 19 
Net periodic benefit cost (credits)$6 $199 $145 $(108)$(53)$(23)
  Pension Benefits Other Benefits
(In millions) 2019 2018 2017 2019 2018 2017
Components of net periodic benefit cost:            
Service cost $44
 $49
 $50
 $13
 $17
 $17
Interest cost 237
 233
 235
 91
 92
 94
Expected return on plan assets (324) (361) (390) (79) (82) (65)
Amortization - prior service costs 2
 
 
 29
 29
 29
- actuarial losses 132
 152
 148
 3
 4
 3
Net periodic benefit cost, excluding below 91
 73
 43
 57
 60
 78
Multiemployer plans (a)
 77
 60
 59
 
 
 
Settlement, termination and curtailment losses 11
 10
 7
 
 
 
Net periodic benefit cost $179
 $143
 $109
 $57
 $60
 $78
(a)(a)    Primarily represents pension expense for the SPT covering USW employees hired from National Steel Corporation and new USW employees hired after May 21, 2003.


Net periodic benefit costexpense (credits) for pensions and Other Benefits is projected to be approximately $141$39 million and approximately $(29)$(83) million, respectively, in 2020.2023. The pension cost projection includes approximately $79$84 million of contributions to the SPT.









Weighted average assumptions used to determine the benefit obligation at December 31 and net periodic benefit cost for the year ended December 31 are detailed below.

  Pension Benefits Other Benefits
  20192018 20192018
  U.S. and Europe U.S. and Europe U.S. U.S.
Actuarial assumptions used to determine benefit obligations at December 31:        
Discount rate 3.35% 4.41% 3.43% 4.47%
Increase in compensation rate 2.60% 2.60% N/A
 N/A

  Pension Benefits
  20192018 2017
  U.S. and Europe U.S. and Europe U.S. and Europe
Actuarial assumptions used to determine net periodic benefit cost for the year ended December 31:      
Discount rate 4.41% 4.00% 4.00%
Expected annual return on plan assets 6.50% 6.85% 7.25%
Increase in compensation rate 2.60% 2.60% 2.60%

  Other Benefits
  201920182017
  U.S. U.S. U.S.
Discount rate 4.47% 4.03% 4.00%
Expected annual return on plan assets 4.25% 4.25% 3.25%
Increase in compensation rate N/A
 N/A
 3.50%

Pension BenefitsOther Benefits
2022202120222021
U.S. and EuropeU.S. and EuropeU.S.U.S.
Actuarial assumptions used to determine benefit obligations at December 31:
Discount rate5.55 %3.01 %5.66 %3.11 %
Increase in compensation rate3.15 %2.60 %N/AN/A

Pension BenefitsOther Benefits
202220212020202220212020
U.S. and EuropeU.S. and EuropeU.S. and EuropeU.S.U.S.U.S.
Actuarial assumptions used to determine net periodic benefit cost for the year ended December 31:
Discount rate3.01 %2.72 %3.35 %3.11 %2.80 %3.42 %
Expected annual return on plan assets6.82 %6.82 %6.47 %4.50 %4.25 %4.25 %
Increase in compensation rate2.60 %2.60 %2.62 %N/AN/AN/A
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The discount rate reflects the current rate at which the pension and Other Benefit liabilities could be effectively settled at the measurement date. In 2017, we refined our discount rate determination process for our U.S. plans by using a bond matching approach to select specific bonds that would satisfy our projected benefit payments. We believe the bond matching approach more closely reflects the process we would employ to settle our pension and other benefits obligations. For our European pension plan, the discount rate is determined using a yield curve methodology based ondata published by European bonds.Central Bank and underlying data provided by EuroMTS Ltd. The discount rate assumptions are updated annually.

20222021
Assumed health care cost trend rates at December 31:U.S.U.S.
Health care cost trend rate assumed for next year6.00%5.75%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)4.50%4.50%
Year that the rate reaches the ultimate trend rate20382029
  2019 2018
Assumed health care cost trend rates at December 31: U.S. U.S.
Health care cost trend rate assumed for next year 6.50% 7.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50% 5.00%
Year that the rate reaches the ultimate trend rate 2028 2023



U. S. Steel reviews its actual historical rate experience and expectations of future health care cost trends to determine the escalation of per capita health care costs under U. S. Steel’s benefit plans. About 75 percentthree quarters of our costs for the domestic USW participants’ retiree health benefits in the Company’s main domestic benefit plan are limited to a per capita dollar maximum calculation based on 2006 base year actual costs incurred under the main U. S. Steel benefit plan for USW participants (cost cap). The full effect of the cost cap is expected to be realized around 2028.2030. After 2028,2030, the Company’s costs for a majority of USW retirees and their dependents are expected to remain fixed and as a result, the cost impact of health care escalation for the Company is projected to be limited for this group.




Plan Assets

ASC Topic 820 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Plan's investments, and requires additional disclosure about fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy are summarized below:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.
Level 2 – Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data by correlation or other means

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

U. S. Steel’s Pension plan and Other Benefits plan assets are classified as follows:
Level 1Level 2Level 3
Short-term InvestmentsCorporate Bonds - U.S. & Non U.S.Private Equities
Equity Securities - U.S. & Non U.S.Government Bonds - U.S. & Non U.S.Real Estate
Exchange-traded FundsMortgage and asset-backed securitiesMineral Interests
Investment TrustsTimberlands


An instrument’s level is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 20192022 and 2018.2021.

Short-term investments are valued at amortized cost which approximates fair value due to the short-term maturity of the instruments. Equity securities - U.S. & Non U.S., investments in investment trusts and exchange-traded fundsInternational are valued at the closing price reported on the active exchange on which the individual securities are traded. U.S. &and Non U.S. government bonds are valued using pricing models maximizing the use of observable inputs for similar securities. Corporate U.S. & Non U.S. bonds are also valued using pricing models maximizing the use of observable inputs for similar securities, which includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks. Mortgage and asset-backed securities are valued using quotes from a broker dealer. Private equities and real estate are valued using information provided by external managers for each individual investment held in the fund or using NAV (net asset value) as a practical expedient. Timberland investments are valued at their appraised value. Mineral Interests and other alternatives are valued at the present value of estimated future cash flows discounted at estimated market rates for assets of similar quality and duration.


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The following is a summaryfair value of U. S. Steel’s PensionSteel's pension plan assets carried at fair valueby asset category at December 31 were as follows (in millions):
2019 and 2018:
20222021
Level 1Level 2Level 3
measured at NAV (a)
TotalLevel 1Level 2Level 3
measured at NAV (a)
Total
Asset Category
Equity
U. S. companies$273 $— $— $— $273 $433 $— $— $— $433 
International companies366 — — — 366 183 — — — 183 
Total equity639 — — — 639 616 — — — 616 
Fixed Income
Corporate Bonds - U.S.— 989 — — 989 — 1,405 — — 1,405 
Corporate Bonds - Non-U.S.— 206 — — 206 — 251 — — 251 
U.S. government and agencies— 244 — — 244 — 426 — — 426 
Non-U.S. government— 51 — — 51 — 78 — — 78 
Mortgage and asset-backed securities— 10 — — 10 — — — 
Derivative financial instruments(7)— — — — — — — — 
Total fixed income(7)1,507 — — 1,500 — 2,161 — — 2,161 
Alternatives
Timberlands— — — 19 19 — — — 268 268 
Mineral Interests and other alternatives— — 54 125 179 — — 22 31 
Private equity— — 251 251 — — — 259 259 
Real estate— — 35 193 228 — — 32 187 219 
Total alternatives— — 89 588 677 — — 54 723 777 
Commingled Funds— — — 1,176 1,176 — — — 1,964 1,964 
Short-Term Investments116 39 — — 155 117 — — — 117 
Other (b)
23 — — — 23 (3)— — — (3)
Total assets at fair value$771 $1,546 $89 $1,764 $4,170 $730 $2,161 $54 $2,687 $5,632 
  Fair Value Measurements at December 31, 2019 (in millions)
  Total Quoted Prices in
Active Markets
(Level 1)
 Other Significant Observable Inputs
(Level 2)
 Significant
Unobservable
Inputs
(Level 3)
Asset Classes 
 
   
Equity Securities (a)
 130
 130
 
 
Corporate & Government Bonds (b)
 2,277
 
 2,277
 
Mineral Interests 2
 
 
 2
Timberlands 283
 
 
 283
Real Estate (c)
 32
 
 
 32
All Other (d)
 34
 34
 
 
Total assets in the fair value hierarchy $2,758
 $164
 $2,277
 $317
Investments measured at net asset value (e)
 2,648
      
Investments at fair value $5,406
      
(a) Includes $123 million of U.S. equity securities and $7 million of Non U.S. equity securities.
(b) Underlying investments include:
Corporate Bonds – U.S.$1,004
Corporate Bonds - Non U.S.160
Government Bonds – U.S.771
Government Bonds - Non U.S.77
Mortgage and asset-backed securities265
Total$2,277
(c) Includes investments in the Avanti Funds and the Mariano Ranch properties.
(d) Includes $26 million of cash, $19 million of accrued income, $(8) million of investment purchases and $(3) million of miscellaneous payables.
(e) In accordance with ASC Topic 820, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.
(b)Includes cash, accrued income, and miscellaneous payables.

The following table represents investments based on netsets forth a summary of changes in the fair value of U. S. Steel’s Pension plan Level 3 assets for the years ended December 31, 2022 and 2021:

Level 3 assets only
(In millions)20222021
Balance at beginning of period$54 $324 
Transfers in and/or out of Level 3— (269)
Actual return on plan assets:
Realized gain
Net unrealized gain
Purchases, sales, issuances and settlements:
Purchases33 24 
Sales(5)(30)
Balance at end of period$89 $54 

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The fair value of U. S. Steel's Other Benefits plan assets by asset value and the significant unobservable inputs and the ranges of values for those inputscategory at December 31 were as follows (in millions):

  Net Asset Value at December 31, 2019 Unfunded Commitments Redemption Frequency Redemption Notice Period
Private Equity Funds (a)
 $238
 $48
 Not redeemable N/A
Real Estate Funds (a)
 240
 62
 Not redeemable N/A
Commingled Funds 2,170
 N/A
 N/A N/A
Investments measured at net asset value $2,648
      
20222021
Level 1Level 2Level 3
measured at NAV (a)
TotalLevel 1Level 2Level 3
measured at NAV (a)
Total
Asset Category
Equity
U. S. companies$50 $— $— $— $50 $186 $— $— $— $186 
International companies19 — — — 19 97 — — — 97 
Total equity69 — — — 69 283 — — — 283 
Fixed Income
Corporate Bonds - U.S.— 479 — — 479 — 718 — — 718 
Corporate Bonds - Non-U.S.— 112 — — 112 — 191 — — 191 
U.S. government and agencies— 26 — — 26 — 198 — — 198 
Non-U.S. government— — — — 17 — — 17 
Mortgage and asset-backed securities— — — — — — 
Total fixed income— 626 — — 626 — 1,133 — — 1,133 
Alternatives
Timberlands— — — — — — 35 35 
Other alternatives— — 47 29 76 — — 39 41 
Private equity— — — 39 39 — — — 59 59 
Real estate— — — 17 17 — — — 26 26 
Total alternatives— — 47 87 134 — — 39 122 161 
Commingled Funds— — — 262 262 — — — 434 434 
Short-Term Investments33 — — 42 71 — — — 71 
Other (b)
18 — — — 18 12 — — — 12 
Total assets at fair value (c)
$120 $635 $47 $349 $1,151 $366 $1,133 $39 $556 $2,094 
(a) The remaining lives of such investments range from approximately less than 1 year to up to 9 years.



  Fair Value Measurements at December 31, 2018 (in millions)
  Total Quoted Prices in
Active Markets
(Level 1)
 
Other Significant Observable Inputs
(Level 2)
 Significant
Unobservable
Inputs
(Level 3)
Asset Classes        
Short-term investments $7
 $7
 $
 $
Equity Securities (a)
 101
 101
 
 
Corporate & Government Bonds (b)
 2,143
 
 2,143
 
Mineral Interests 2
 
 
 2
Timberlands 294
 
 
 294
Private equities (c)
 2
 
 
 2
Real Estate (d)
 33
 
 
 33
All Other (e)
 14
 14
 
 
Total assets in the fair value hierarchy $2,596
 $122
 2,143
 $331
Investments measured at net asset value (f)
 2,364
      
Investments at fair value $4,960
      
(a) Includes $95 million of U.S. equity securities and $6 million of Non U.S. equity securities.
(b) Underlying investments include:
Corporate Bonds – U.S.$933
Corporate Bonds – Non U.S.149
Government Bonds – U.S.858
Government Bonds – Non U.S.67
Mortgage and asset-backed securities136
Total$2,143
(c) Includes investments in CAI Partners and Company III LP, Clayton Dubilier Rice Fund VI and Epiris Club 2007.
(d) Includes investments in the Avanti Funds and the Mariano Ranch properties.
(e) Includes $32 million of cash, $57 million of investment sales, $21 million of accrued income, and $(80) million of investment purchases and $(16) million of miscellaneous payables.
(f) In accordance with ASC Topic 820, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

The following table represents investments based on net asset value and the significant unobservable inputs and the ranges of values for those inputs (in millions):
  Net Asset Value at December 31, 2018 Unfunded Commitments Redemption Frequency Redemption Notice Period
Private Equity Funds (a)
 $254
 $68
 Not redeemable N/A
Real Estate Funds (a)
 236
 93
 Not redeemable N/A
Commingled Funds 1,874
 N/A
 N/A N/A
Investments measured at net asset value $2,364
      
(a) The remaining lives of such investments range from approximately less than 1 year to up to 10 years.


(b)Includes cash, accrued income, and miscellaneous payables.
(c)The following table sets forth a summary of changes inclassification within the fair value hierarchy and the composition of U. S. Steel’s Pension plan Level 3 assetsthe asset categories for the years ended December 31, 2019 and 2018:
  
Level 3 assets only
(In millions) 2019 2018
Balance at beginning of period $331
 $340
Transfers in and/or out of Level 3 
 
Actual return on plan assets:    
Realized gain 8
 11
Net unrealized loss (21) (8)
Purchases, sales, issuances and settlements:    
Purchases 1
 
Sales (2) (12)
Balance at end of period $317
 $331


The following is a summaryVEBA assets surplus amount of U. S. Steel’s$595 million are the same as the Other Benefits plan assets carried at fair value atas of December 31, 2019 and 2018.2022.
  Fair Value Measurements at December 31, 2019 (in millions)
  Total Quoted Prices in
Active Markets
(Level 1)
 Other Significant Observable Inputs (Level 2) Significant
Unobservable
Inputs
(Level 3)
Asset Classes     
  
Short-term investments $31
 $31
 
 $
Equity Securities (a)
 49
 49
 
 
Corporate & Government Bonds  (b)
 1,799
 
 1,799
 
Timberlands 35
 
 
 35
All Other (c)
 25
 25
 
 
Total assets in the fair value hierarchy $1,939
 $105
 $1,799
 $35
Investments measured at net asset value (d)
 86
      
Investments at fair value $2,025
      
(a) Includes $30 million of U.S. equity securities and $19 million of Non U.S. equity securities.
(b) Underlying investments include:
Corporate Bonds – U.S. $1,132
Corporate Bonds - Non U.S. 287
Government Bonds – U.S. 329
Government Bonds - Non U.S. 13
Mortgage and asset-backed Securities 38
Total $1,799
(c) Includes $12 million of cash, $16 million of accrued income, $2 million of investments sales and $(5) million of miscellaneous payables.
(d) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

The following table represents investments based on net asset value and the significant unobservable inputs and the ranges of values for those inputs (in millions):
  Net Asset Value at December 31, 2019 Unfunded Commitments Redemption Frequency Redemption Notice Period
Private Equity Funds (a)
 $54
 $8
 Not redeemable NA
Real Estate Funds (a)
 32
 10
 Not redeemable NA
Investments measured at net asset value $86
 
 
 
(a) The remaining lives of such investments range from approximately less than 1 year up to 9 years.


  Fair Value Measurements at December 31, 2018 (in millions)
  Total Quoted Prices in
Active Markets
(Level 1)
 Other Significant Observable Inputs (Level 2) Significant
Unobservable
Inputs
(Level 3)
Asset Classes        
Short-term investments 42
 42
 
 
Equity Securities (a)
 45
 45
 
 
Corporate & Government Bonds (b)
 1,631
 
 1,631
 
Timberlands 35
 
 
 35
All Other (c)
 13
 13
 
 
Total assets in the fair value hierarchy $1,766
 $100
 1,631
 $35
Investments measured at net asset value (d)
 94
      
Investments at fair value $1,860
      

(a) Includes $27 million of U.S. equity securities and $18 million of Non U.S. equity securities.
(b) Underlying investments include:
Corporate Bonds – U.S. $1,052
Corporate Bonds - Non U.S. 271
Government Bonds – U.S. 270
Government Bonds - Non U.S. 8
Mortgage and asset-backed Securities 30
Total $1,631
(c) Includes $16 million of accrued income and $(3) million of investment purchase payables.
(d) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

The following table represents investments based on net asset value and the significant unobservable inputs and the ranges of values for those inputs (in millions):
  Net Asset Value at December 31, 2018 Unfunded Commitments Redemption Frequency Redemption Notice Period
Private Equity Funds (a)
 $61
 $10
 Not redeemable N/A
Real Estate Funds (a)
 33
 12
 Not redeemable N/A
Investments measured at net asset value $94
      
(a) The remaining lives of such investments range from approximately less than 1 year to up to 10 years.

The following table sets forth a summary of changes in the fair value of U. S. Steel’s Other Benefits plan Level 3 assets for the years ended December 31, 20192022 and 2018:2021:

  
Level 3 assets only
(In millions) 2019 2018
Balance at beginning of period $35
 $35
Transfers in and/or out of Level 3 
 
Actual return on plan assets:    
Realized gain 
 1
Net unrealized loss 
 (1)
Purchases, sales, issuances and settlements:    
Sales 
 
Balance at end of period $35
 $35

Level 3 assets only
(In millions)20222021
Balance at beginning of period$39 $35 
Transfers in and/or out of Level 3(25)(35)
Actual return on plan assets:
Realized gain— — 
Net unrealized loss(2)
Purchases, sales, issuances and settlements:
Purchases35 39 
Sales— (1)
Balance at end of period$47 $39 


U. S. Steel’s investment strategy for its U.S. pension and Other Benefits plan assets provides for a diversified mix of high quality bonds, public equities and selected smaller investments in private equities, private credit, timber and mineral

interests. For its U.S. pension, U. S. Steel has a target allocation for plan assets of 4550 percent in corporate bonds, government bonds and mortgage, private credit, and asset-backed securities. The balance is invested in equity securities, timber, private equity and real estate partnerships. U. S. Steel believes that returns on equities over the long term will be higher than returns from fixed-income securities as actual historical returns from U. S. Steel’s trusts have shown. Returns on bonds tend to offset some of the short-term volatility of stocks. Both equity and fixed-income investments are made across a broad range of industries and companies (both domestic and foreign) to provide protection against the impact of volatility in any single industry as well as company specific developments. U. S. Steel will use a 6.506.90 percent assumed rate of return on assets for the development of net periodic cost for the main defined benefit pension plan in 2020. The 2020 assumed rate2023. Actual
101

Table of return is consistent with the rate of return used for 2019 domestic expense and was determined by taking into account the intended asset mix and some moderation of the historical premiums that fixed-income and equity investments have yielded above government bonds. Actual Contents
returns since the inception of the plan have exceeded this 6.506.90 percent rate and while recent annual returns have been volatile, it is U. S. Steel’s expectation that rates will achieve this level in future periods.

For its Other Benefits plan, U. S. Steel is employing a liability driven investment strategy. The plan assets are allocated to match the plan cash flows with maturing investments. To achieve this strategy, U. S. Steel has a target allocation for plan assets of 9088 percent in high quality bonds with thefixed income and private credit. The balance is primarily invested in equity securities, timber, private equity and real estate partnerships. U. S. Steel will use a 4.254.50 percent assumed rate of return on assets for the development of net periodic cost for its Other Benefits planBenefit plans for 2020. The 2020 assumed rate of return is consistent with the rate of return used for 2019 and has been conservatively set, taking into account the intended asset mix.2023.

Steelworkers Pension Trust

For most bargaining unit employees participating in the SPT, U. S. Steel contributescontributed to the SPT a fixed dollar amount for each hour worked of $3.15$3.50 through December 31, 2019.2022. SPT contributions per hour worked increaseincreased to $3.35 and $3.50$4.00 effective January 1, 2020 and January 1, 2021, respectively.2023. U. S. Steel’s contributions to the SPT represented greater than 5%30% of the total combined contributions of all employers participating in the plan for the years ended December 31, 2019, 20182022, 2021 and 2017.2020.

Participation in a multi-employer pension plan agreed to under the terms of a collective bargaining agreement differ from a traditional qualified single employer defined benefit pension plan. The SPT shares risks associated with the plan in the following respects:

a. Contributions to the SPT by U. S. Steel may be used to provide benefits to employees of other participating employers;

b. If a participating employer stops contributing to the SPT, the unfunded obligations of the plan may be borne by the remaining participating employers;

c. If U. S. Steel chooses to stop participating in the SPT, U. S. Steel may be required to pay an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

On March 21, 2011 the Board of Trustees of the SPT elected funding relief which has the effect of decreasing the amount of required minimum contributions in near-term years, but will increase the minimum funding requirements during later plan years. As a result of the election of funding relief, the SPT’s zone funding under the Pension Protection Act may be impacted.

In addition to the funding relief election, the Board of Trustees also elected a special amortization rule, which allows the SPT to separately amortize investment losses incurred during the SPT’s December 31, 2008 plan year-end over a 29 year period, whereas they were previously required to be amortized over a 15 year period.


U. S. Steel’s participation in the SPT for the annual periods ended December 31, 2019, 20182022, 2021 and 20172020 is outlined in the table below.

 Employer
Identification
Number/
Pension Plan
Number
Pension
Protection
Act Zone
Status as of
December 31
(a)
FIP/RP Status
Pending/Implemented
(b)
U.S. Steel
Contributions
(in millions)
Surcharge
Imposed
(c)
Expiration Date
of Collective
Bargaining
Agreement
Pension Fund2019201820192018201720192018
Steelworkers Pension Trust23-6648508/499GreenGreenNo$77
$60
$59
NoNo
September 1, 2022

(a)
Employer
Identification
Number/
Pension Plan
Number
Pension
Protection
Act Zone
Status as of
December 31
(a)
FIP/RP Status
Pending/Implemented
(b)
U.S. Steel
Contributions
(in millions)
Surcharge
Imposed
(c)
Expiration Date
of Collective
Bargaining
Agreement
Pension Fund2022202120222021202020222021
Steelworkers Pension Trust23-6648508/499GreenGreenNo$74 $75 $76 NoNoSeptember 1, 2022
(a)The zone status is based on information that U. S. Steel received from the plan and is certified by the plan’s actuary. Among other factors, plans in the green zone are at least 80 percent funded, while plans in the yellow zone are less than 80 percent funded and plans in the red zone are less than 65 percent funded.
(b)Indicates if a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.
(c)Indicates whether there were charges to U. S. Steel from the plan.

80 percent funded, while plans in the yellow zone are less than 80 percent funded and plans in the red zone are less than 65 percent funded.
(b)Indicates if a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.
(c)Indicates whether there were charges to U. S. Steel from the plan.

Cash Flows

The following information is in addition to the contributions to the SPT noted in the table above.

Employer Contributions – U. S. Steel did not make any voluntary or mandatory contributions to the U. S. Steel Retirement Plan Trust in 20192022 or 2018.2021. The U. S. Steel Retirement Plan Trust is the funding vehicle for the Company's main defined benefit pension plan. U. S. Steel did make a voluntary contribution of $75 million to the main pension plan on November 20, 2017.

For pension plans not funded by trusts, U. S. Steel made $8$2 million, $20$11 million and $13$7 million of pension payments not funded by trusts in 2019, 20182022, 2021 and 2017,2020, respectively.

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Cash payments totaling $45$32 million, $48$46 million and $59$46 million were made for other post-employment benefit payments not funded by trusts in 2019, 20182022, 2021 and 2017,2020, respectively. In 2019, 20182022, 2021 and 2017,2020, U. S. Steel continued to use assets from our VEBA trust for represented retiree health care and life insurance benefits to pay USW post-employment benefit claims.

Estimated Future Benefit Payments – The following benefit payments, which reflect expected future service as appropriate, are expected to be paid from U. S. Steel’s defined benefit plans:

(In millions) Pension
Benefits
 Other
Benefits
2020 $483
 $153
2021 465
 152
2022 442
 151
2023 418
 149
2024 406
 146
Years 2025 - 2028 1,850
 680

(In millions)Pension BenefitsOther Benefits
2023$427 $118 
2024408 114 
2025364 109 
2026357 121 
2027352 122 
Years 2028 - 20301,619 543 

Defined contribution plans
U. S. Steel also contributes to several defined contribution plans for its salaried employees. Effective December 31, 2015,January 1, 2016, all non-represented salaried employees in North America receive pension benefits in the form of a separate retirement account through a defined contribution plan with contribution percentages based upon age, for which company contributions totaled $23$21 million, $23$20 million and $22$10 million in 2019, 20182022, 2021 and 2017,2020, respectively. U. S. Steel’s matching contributions to salaried employees’ defined contribution plans, which are 100 percent of the employees’ contributions up to 6six percent of their eligible salary, totaled $19 million, $18 million in 2019and $17$8 million in 20182022, 2021 and 2017.2020, respectively. U. S. Steel also maintains non-qualified defined contribution plans to provide benefits which are otherwise limited by the Internal Revenue Code for qualified plans. U. S. Steel’s contributions under these defined contribution plans were less than $1 million in 2022 and totaled $1 million $4 million,for both 2021 and $1 million in 2020.
2019, 2018 and 2017, respectively.


Most represented employees are eligible to participate in a defined contribution plan where there is no company match on savings except for certain Tubular hourly employees. Effective with the 2015 Labor Agreement, represented hires on or after January 1, 2016 are eligible for a $0.50 per hour savings account contribution. As a result of the 2018 Labor Agreements, the savings account contribution for each hour worked will increaseincreased to $0.55 effective January 1, 2019, $0.60 effective January 1, 2020, and $0.65 effective January 1, 2021. As a result of the 2022 Labor Agreements, it will be increased to $0.75 effective January 1, 2023. These Company contributions for represented employees totaled $3$5 million, $2$4 million and $1$4 million in 2019, 20182022, 2021 and 2017,2020, respectively.

Other post-employment benefits
The Company provides benefits to former or inactive employees after employment but before retirement. Certain benefits including workers’ compensation and black lung benefits represent material obligations to the Company and under the guidance for nonretirement post-employment benefits, have historically been treated as accrued benefit obligations. Liabilities for these benefits recorded at December 31, 2019,2022, totaled $111$88 million as compared to $110 million at December 31, 2018.2021. Liability amounts were developed assuming a discount rate of 3.40%5.65% and 4.36%2.87% at December 31, 20192022 and 2018.2021. Net periodic benefit cost for these benefits is projected to be $15$16 million in 20202023 compared to $21$(1) million in 20192022 and $10$17 million in 2021.
2018.

Pension Funding

In November 2015, pension stabilization legislationMarch 2021, the American Rescue Plan Act (ARPA - H.R. 1319) further extended a revisedthe pension relief interest rate formula to becorridor used to measure defined benefit pension obligations for calculating minimum annual contributions. The new interest rate formula results in higher interest rates for minimum funding calculations as compared to prior law over the next few years, which will improve the funded status of our main defined benefit pension plan and reduce minimum required contributions.

U. S. Steel will monitor the funded status of the plan to determine when voluntary contributions may be prudent in order to mitigate potentially larger mandatory contributions in later years.

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19. Asset Retirement Obligations

U. S. Steel’s asset retirement obligations (AROs) primarily relate to mine, landfill closure and post-closure costs. The following table reflects changes in the carrying values of AROs for the years ended December 31, 20192022 and 2018:2021:
December 31,
(In millions)20222021
Balance at beginning of year$66 $60 
Additional obligations incurred13 
Obligations settled(12)(7)
Change in estimate of obligations(5)(1)
Foreign currency translation effects (1)
Accretion expense4 12 
Balance at end of period$66 $66 
  December 31,
(In millions) 2019 2018
Balance at beginning of year $60
 $69
Additional obligations incurred 4
 
Obligations settled (9) (12)
Accretion expense 3
 3
Balance at end of period $58
 $60


Certain AROs related to disposal costs of the majority of fixed assets at our integrated steel facilities have not been recorded because they have an indeterminate settlement date. These AROs will be initially recognized in the period in which sufficient information exists to estimate their fair value.

20. Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, current accounts and notes receivable, accounts payable bank checks outstanding, and accrued interest included in the Consolidated Balance Sheet approximate fair value. See Note 16 for disclosure of U. S. Steel’s derivative instruments, which are accounted for at fair value on a recurring basis.

Stelco Option for Minntac Mine Interest
On OctoberApril 30, 2020, the Company entered into an Option Agreement with Stelco, that grants Stelco the option to purchase a 25 percent interest (the Option Interest) in a to-be-formed entity (the Joint Venture) that will own the Company’s current iron ore mine located in Mt. Iron, Minnesota (the Minntac Mine). As consideration for the option, Stelco paid the Company an aggregate amount of $100 million in five $20 million installments during the year-ended December 31, 2019, a wholly owned subsidiary2020 which are recorded net of transaction costs in the Consolidated Balance Sheet. In the event Stelco exercises the option, Stelco will contribute an additional $500 million to the Joint Venture, which amount shall be remitted solely to U. S. Steel purchasedin the form of a 49.9% ownership interestone-time special distribution, and the parties will engage in Big River Steel. The transaction included a call option (U. S. Steel Call Option)good faith negotiations to finalize the master agreement (pursuant to which Stelco will acquire the remaining 50.1% within the next four years at an agreed-upon price formula, which in years three and four is based on Big River Steel’s achievement of certain metrics that include: free cash flow, product development, safetyOption Interest) and the completion of

a proposed expansion of Big River Steel's existing manufacturing line. The transaction also included options where the other Big River Steel equity owners can require U. S. Steel to purchase their 50.1% ownership interest (Class B Common Put Option) or require U. S. Steel to sell its ownership interest (Class B Common Call Option) after the U. S. Steel Call Option expires.

Alllimited liability company agreement of the options are marked to fair value each period using a Monte Carlo simulation which is considered a Level 3 valuation technique. Level 3 valuation techniques include inputs to the valuation methodology that are considered unobservable and significant to the fair value measurement. The simulation relies on assumptions that include Big River Steel's future equity value, volatility, the risk free interest rate and U. S. Steel's credit spread. The net change in fair value of the options during 2019 resulted in a $7 million increase to net interest and other financial costs. See Note 5 and Note 7 for further details.

The following table shows the change in fair value by option from purchase date through December 31, 2019.
(In millions) Balance Sheet Location 
Fair Value asset/(liability)
at Purchase Date
(a)
 Fair Value
Mark to Market
gain/(loss)
 Fair Value asset/(liability)
at December 31, 2019
U. S. Steel Call Option Investments and Long-Term Receivables $162
 $4
 $166
Class B Common
Put Option
 Deferred credits and other noncurrent liabilities $(181) $(11) $(192)
Class B Common
Call Option
 Deferred credits and other noncurrent liabilities $(2) $
 $(2)
Net Mark to Market Impact     $(7)  
Joint Venture.
(a)On October 31, 2019, a wholly owned subsidiary of U. S. Steel purchased a 49.9% ownership interest in Big River Steel

The following table shows the net fair values of the options at December 31, 2019 and the effect on these amounts of a hypothetical change in the market prices or rates that existed as of December 31, 2019.
 Fair Value asset/(liability) Big River Steel Equity Value Volatility Risk Free Interest Rate U. S. Steel's Credit Spread
(In millions) 5%(5)% 10%(10)% 1%(1)% 1%(1)%
U. S. Steel Call Option$166 $19$(17) $34$(34) $3$(3) N/AN/A
Class B Common Put Option$(192) $15$(16) $(25)$25 $13$(14) $7$(8)
Class B Common Call Option$(2) $—$— $—$— $—$— N/AN/A


The following tables shows the assumptions used in the calculations shown in the table directly above.
  At December 31, 2019
Big River Steel Equity Value (in approximate billions) $1.4
Volatility 54.1%
Risk Free Interest Rate 1.6%
Credit Spread 7.9%



The following table summarizes U. S. Steel’s financial assets and liabilities that were not carried at fair value at December 31, 20192022 and 2018.2021.
 December 31, 2019 December 31, 2018December 31, 2022December 31, 2021
(In millions) Fair Value Carrying
Amount
 Fair Value Carrying
Amount
(In millions)Fair ValueCarrying
Amount
Fair ValueCarrying
Amount
Financial liabilities:        Financial liabilities:
Long-term debt (a)
 $3,576
 $3,575
 $2,182
 $2,353
Long-term debt (a)
$3,815 $3,701 $4,379 $3,702 
(a)Excludes finance lease obligations.

The fair value of long-term debt was determined using Level 2 inputs which were derived from quoted market prices and is based on the yield on public debt where available or current borrowing rates available for financings with similar terms and maturities.prices.


Fair value of the financial assets and liabilities disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.
Financial guarantees are U. S. Steel’s only unrecognized financial instrument. For details relating to financial guarantees see Note 26.

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21. Reclassifications from Accumulated Other Comprehensive Income (AOCI)
(In millions) 
Pension and
Other Benefit
Items
 
Foreign
Currency
Items
 Unrealized Gain (Loss) on Derivatives Total(In millions)Pension and
Other Benefit
Items
Foreign
Currency
Items
Unrealized Gain (Loss) on DerivativesTotal
Balance at December 31, 2017 $(1,309) $463
 $1
 $(845)
Other comprehensive loss before reclassifications (b)
 (255) (60) 
 (315)
Amounts reclassified from AOCI (a)(b)
 148
 
 (14) 134
Net current-period other comprehensive loss (107) (60) (14) (181)
Balance at December 31, 2018 $(1,416) $403
 $(13) $(1,026)
Balance at December 31, 2020Balance at December 31, 2020$(458)$449 $(38)$(47)
Other comprehensive income (loss) before reclassifications 446
 (22) (19) 405
Other comprehensive income (loss) before reclassifications297 (78)(56)163 
Amounts reclassified from AOCI (a)
 127
 
 16
 143
Amounts reclassified from AOCI (a)
136 — 79 215 
Net current-period other comprehensive income (loss) 573
 (22) (3) 548
Net current-period other comprehensive income (loss)433 (78)23 378 
Balance at December 31, 2019 $(843) $381
 $(16) $(478)
Balance at December 31, 2021Balance at December 31, 2021$(25)$371 $(15)$331 
Other comprehensive (loss) income before reclassificationsOther comprehensive (loss) income before reclassifications(292)(91)74 (309)
Amounts reclassified from AOCI (a)
Amounts reclassified from AOCI (a)
(5) (102)(107)
Net current-period other comprehensive lossNet current-period other comprehensive loss(297)(91)(28)(416)
Balance at December 31, 2022Balance at December 31, 2022$(322)$280 $(43)$(85)
(a)See table below for further details.
(b)
Details about AOCI components (a)
Amount reclassified from AOCI
(In millions)202220212020
Amortization of pension and other benefit items
Prior service credits (a)
$(23)$(27)$(4)
Actuarial losses (a)
20 109 129 
Settlements, termination and curtailment (gains) losses (a)
(3)100 
UPI purchase accounting adjustment — 23 
Total pensions and other benefits items(6)182 150 
Derivative reclassifications to Consolidated Statements of Operations(133)105 32 
Total before tax(139)287 182 
Tax provision (benefit)32 (72)(41)
Net of tax$(107)$215 $141 
(a)The Company previously disclosed in Note 21 to the Consolidated Financial Statements in its Annual Report on Form 10-K for the period ended December 31, 2018, an increase toThese AOCI of $41 millioncomponents are included in the Other comprehensive income before reclassifications line item and a decrease to AOCIcomputation of $148 million in the Amounts reclassified from AOCI line itemnet periodic benefit cost (see Note 18 for the twelve months ended December 31, 2018 amounts for Pension and Other Benefit Items. These amounts should have been disclosed as a decrease to AOCI of $255 million and an increase to AOCI of $148 million, respectively, which have been corrected in the table above. The Company concluded that the errors were not material to the financial statements of any prior annual or interim period and therefore, amendments of previously filed reports are not required. The revision had no impact on the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Cash Flows or the Consolidated Statements of Comprehensive Income (Loss)additional details). Quarterly periods not presented herein will be revised, as applicable, in future filings.

    
Amount reclassified from AOCI (c)
(In millions) (a)
 Details about AOCI components 2019 2018 2017
  Amortization of pension and other benefit items      
  
     Prior service costs (a)
 $31
 $29
 $29
  
     Actuarial losses (a)
 135
 156
 151
  
     Settlements, termination and curtailment losses (a)
 3
 10
 7
  Total pensions and other benefits items 169
 195
 187
  Derivative reclassifications to Consolidated Statements of Operations 22
 (19) (4)
  Total before tax 191
 176
 183
  
Tax provision (b)
 (48) (42) 
  Net of tax $143
 $134
 $183

(a)
These AOCI components are included in the computation of net periodic benefit cost (see Note 18 for additional details).
(b) Amounts in 2017 do not reflect a tax benefit as a result of a full valuation allowance on our domestic deferred tax assets.
(c) The corrections noted in footnote (b) to the table above are consistently reflected in this table.


22. Supplemental Cash Flow Information

 Year Ended December 31,Year Ended December 31,
(In millions) 2019 2018 2017(In millions)202220212020
Net cash (used in) provided by operating activities included:      Net cash (used in) provided by operating activities included:
Interest and other financial costs paid (net of amount capitalized) $(151) $(207) $(242)Interest and other financial costs paid (net of amount capitalized)$(161)$(319)$(248)
Income taxes refunded (paid) $38
 $(39) $(40)
Income taxes (paid) refundedIncome taxes (paid) refunded$(242)$(75)$45 
Non-cash investing and financing activities:      Non-cash investing and financing activities:
Change in accrued capital expenditures $(70) $135
 $208
Change in accrued capital expenditures$351 $40 $(121)
U. S. Steel common stock issued for employee/non-employee director stock plans $19
 $21
 $49
U. S. Steel common stock issued for employee/non-employee director stock plans$46 $28 $19 
Capital expenditures funded by finance lease borrowings $46
 $
 $
Capital expenditures funded by finance lease borrowings$52 $18 $31 
Big River Steel put and call options (a)
 $21
 $
 $
Export Credit Agreement (ECA) financingExport Credit Agreement (ECA) financing$ $23 $34 
(a)The Big River Steel put and call options amount represents the excess of the Class B Common Put Option and the Class B Common Call Option liabilities over the U. S. Steel Call Option asset from U. S. Steel's acquisition of its 49.9% ownership interest in Big River Steel on October 31, 2019. See Note 20 for further details.

23. Transactions with Related Parties

Net sales to related parties and receivables from related parties primarily reflect sales of raw materials and steel products to equity investees. Generally, transactions are conducted under long-term contractual arrangements. Related party sales and service transactions were $1,431 million, $1,420 million and $1,204 million in 2019, 2018 and 2017, respectively. As of December 31, 2019, theare primarily related party receivable included a short-term note receivable of $10 million to PRO-TEC. Payment on the note receivable is anticipated in the first quarter of 2020.
Purchases from related parties for outside processing services provided by equity investees amounted to $31 million, $29 millionand $70were $1,942 million, during 2019, 2018 $1,311 million and 2017, respectively. Purchases of iron ore pellets from related parties amounted to $104$976 million, $91 million in 2022, 2021 and 2020, respectively.
$140 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Accounts payable to related parties include balances due to PRO-TEC Coating Company (PRO-TEC) of $82$142 million and $80$98 million at December 31, 20192022 and 2018,2021, respectively for invoicing and receivables collection services provided by U. S. Steel on PRO-TEC's behalf. U. S. Steel, as PRO-TEC’s exclusive sales agent, is responsible for credit risk related to
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those receivables. U. S. Steel also provides PRO-TEC marketing, selling and customer service functions. Payables to other related parties totaled $2$1 million for both periods ending December 31, 2022 and 2021, respectively.
Purchases from related parties for outside processing services provided by equity investees amounted to $27 million, $38 million and $1$90 million atduring 2022, 2021 and 2020, respectively. Purchases of iron ore pellets from related parties amounted to $131 million, $111 million and $78 million for the years ended December 31, 20192022, 2021 and 2018,2020, respectively.

Upon the acquisition of Big River Steel on January 15, 2021, there were related party payables of approximately $27 million for steel substrate sales from Big River Steel to U. S. Steel. After the acquisition, the related party payables became intercompany payables that are eliminated in consolidation.

Upon the acquisition of UPI on February 29, 2020 there were $135 million of related party receivables for prior sales of steel substrate from U. S. Steel to UPI. After the acquisition, the related party receivables became intercompany receivables that are eliminated in consolidation.

24. Leases
Effective January 1, 2019, U. S. Steel adopted ASU 2016-02 using the optional modified retrospective transition method outlined in ASU 2018-11 which permitted application of ASU 2016-02 on January 1, 2019 using a cumulative effect adjustment to the opening balance of retained earnings. As of December 31, 2019, an operating lease asset of $230 million and current and noncurrent liabilities for operating leases of $60 million and $177 million, respectively, were recorded (see below tabular disclosure for further details). There was an insignificant cumulative effect of adoption for operating lease liabilities that exceeded their related asset values for leases where payment started after lease commencement.
Operating lease assets consist primarily of office space, heavy mobile equipment used in our mining operations and facilities and equipment under operating service agreements for electricity generation and scrap processing. We also have operating lease assets for light mobile equipment and information technology assets. The Company also has short term leases related to transportation services for which we apply the short-term lease exception. Significant finance leases include the Fairfield slab caster lease andprimarily consist of heavy mobile equipment used in our mining operations (see Note 17 for further details).operations. Variable lease payments are primarily related to operating service agreements where payment is solely dependent on consumption of certain services, such as raw material and by-product processing. Most long-term leases include renewal options and, in certain leases, purchase options. Generally, we are not reasonably certain that these options will be exercised. We have residual value guarantees under certain light mobile equipment leases. There is no impact to our leased assets for residual value guarantees as the potential loss is not probable (see “Other Contingencies” in Note 26 for further details). We do not have

material restrictive covenants associated with our leases or material amounts of sublease income. From time to time, U. S. Steel may enter into arrangements for the construction or purchase of an asset and then enter into a financing arrangement to lease the asset. U. S. Steel recognizes leased assets and liabilities under these arrangements when it obtains control of the asset.
U. S. Steel elected the option within ASU 2016-02 to straight-line expense and not record assets or liabilities for leases with an initial term of 12 months or less. For leases beginning in 2019 and later, we separate non-lease components from lease components for leases under operating service agreements. We do not separate non-lease components for other lease types as they are not significant. The Company does not have secured notes outstanding; therefore, we use an estimated secured borrowing rate as the discount rate for most of our leases. In accordance with the practical expedients outlined in ASU 2016-02, we did not use hindsight in determining the lease term for existing leases and elected not to reassess the following for existing leases: whether contracts contain a lease, lease classification, and initial direct costs.
The following table summarizes the lease amounts included in our Consolidated Balance Sheet as of December 31, 2019.2022.
(In millions)Balance Sheet LocationDecember 31, 2019(In millions)Balance Sheet LocationDecember 31, 2022December 31, 2021
Assets  Assets
Operating
Operating lease assets (a) (c)
$230
Operating
Operating lease assets (a)
$146 $185 
Finance
Property, plant and equipment (b)
56
Finance
Property, plant and equipment (b)
126 101 
Total Lease Assets $286
Total Lease Assets$272 $286 
  
Liabilities  Liabilities
Current  Current
Operating
Current operating lease liabilities (c)
$60
OperatingCurrent operating lease liabilities$49 $58 
FinanceCurrent portion of long-term debt11
FinanceCurrent portion of long-term debt25 16 
Non-Current  Non-Current
Operating
Noncurrent operating lease liabilities (c)
177
OperatingNoncurrent operating lease liabilities105 136 
FinanceLong-term debt less unamortized discount and issue costs51
FinanceLong-term debt less unamortized discount and issue costs98 76 
Total Lease Liabilities $299
Total Lease Liabilities$277 $286 
(a) Operating lease assets are recorded net of accumulated amortization of $50 million.$142 million and $128 million as of December 31, 2022, and December 31, 2021, respectively.
(b) Finance lease assets are recorded net of accumulated depreciation of $27 million.$86 million and $59 million as of December 31, 2022, and December 31, 2021, respectively.
(c) Operating lease assets and noncurrent operating lease liabilities were reduced by $7 million for an amendment to a building lease and $4 million for retirements. The impact on the current operating lease liabilities was immaterial.

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The following table summarizes lease costs included in our Consolidated Statement of Operations for the twelve month periodsyears ended December 31, 2019.

(In millions)ClassificationYear Ended December 31, 2019
Operating Lease Cost (a)
Cost of sales$81
Operating Lease CostSelling, general and administrative expenses11
Finance Lease Cost  
  AmortizationDepreciation, depletion and amortization7
  InterestInterest expense3
Total Lease Cost $102
2022, December 31, 2021, and December 31, 2020.

(In millions)ClassificationYear Ended December 31, 2022Year Ended December 31, 2021Year Ended December 31, 2020
Operating Lease Cost (a)
Cost of sales$65 $69 $67 
Operating Lease CostSelling, general and administrative expenses14 14 14 
Finance Lease Cost
  AmortizationDepreciation, depletion and amortization26 21 14 
  InterestInterest expense9 
Total Lease Cost$114 $113 $99 
(a) Operating lease cost recorded in cost of sales includes $15$12 million, $11 million and $7 million of variable lease cost for the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively. Operating lease cost recorded in selling, general and administrative expenses includes $1 million of variable lease cost for the year ended December 31, 2019.2022. An immaterial amount of variable lease cost is included in selling, general and administrative expenses and immaterial amounts of short-term lease cost arewas included in cost of sales and selling, general and administrative expenses.expenses for each of the years ended December 31, 2021, and December 31, 2020. $1 million of short-term lease cost is included in cost of sales and selling, general and administrative expenses for the years ended December 31, 2022, December 31, 2021, and December 31, 2020.

Lease liability maturities as of December 31, 20192022, are shown belowbelow.

(In millions)Operating Finance Total
2020$74
 $15
 $89
202158
 14
 72
202246
 18
 64
202334
 7
 41
202426
 6
 32
After 202451
 12
 63
  Total Lease Payments$289
 $72
 $361
  Less: Interest52
 10
 62
  Present value of lease liabilities$237
 $62
 $299


(In millions)OperatingFinanceTotal
2023$58 $37 $95 
202443 35 78 
202531 33 64 
202621 28 49 
202714 13 27 
After 202710 13 
  Total Lease Payments$177 $149 $326 
  Less: Interest23 26 49 
  Present value of lease liabilities$154 $123 $277 
Future minimum commitments for capital and operating leases having non-cancelable lease terms in excess of one year as of the year ended December 31, 2018 were as follows.
(In millions) Capital
Leases
 Operating
Leases
2019 $5
 $66
2020 5
 55
2021 5
 45
2022 11
 37
2023 
 28
After 2023 
 72
   Total minimum lease payments $26
 $303
Less imputed interest costs 4
  
   Present value of net minimum lease payments included in long-term debt $22
  


Lease terms and discount rates are shown below.

December 31, 20192022
Weighted average lease term
  Finance54 years
  Operating54 years
Weighted average discount rate
  Finance6.055.79 %
  Operating7.766.73 %
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Supplemental cash flow information related to leases follows.is as follows:
(In millions)Year Ended December 31, 2022Year Ended December 31, 2021Year Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
    Operating cash flows from operating leases$66 $70 $71 
    Operating cash flows from finance leases9 
    Financing cash flows from finance leases20 30 13 
Right-of-use assets exchanged for lease liabilities:
    Operating leases20 40 41 
    Finance leases52 18 31 
(In millions)Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities: 
    Operating cash flows from operating leases$72
    Operating cash flows from finance leases3
    Financing cash flows from finance leases7
Right-of-use assets exchanged for lease liabilities: 
    Operating leases53
    Finance leases46


25. Restructuring and Other Charges

During 2019, U. S. Steel2022, the Company recorded restructuring and other charges of $275$48 million, which consists of charges of $25$30 million related to the planned disposition of a component within the Flat-Rolled segment, $23 million related to headcount reductions under a voluntary early retirement program (VERP) offered at USSK, for headcount reductions and planta $9 million favorable adjustment to the expected exit costs $227of indefinitely idled facilities, and $4 million of severance-related charges at other facilities. Cash payments were made related to severance and exit costs of approximately $95 million.
During 2021, the Company recorded restructuring and other charges of $128 million, which consists of charges of $29 million for Great Lakes Works, charges of approximately $89 million related to the indefinite idlingplanned disposition of our East Chicago Tin operations, our finishing facility in Dearborn, Michigan,a component within the Flat-Rolled segment, and environmental-related charges at other facilities of $10 million. Cash payments were made related to severance and exit costs of approximately $58 million.
During 2020, the intendedCompany recorded restructuring and other charges of $138 million, which consists of charges of $66 million for the indefinite idling of a significant portion of Great Lakes Works, and $23our Keetac mining operations which was restarted in the fourth quarter, $25 million for the indefinite idling of Lorain Tubular Operations and Lone Star Tubular Operations, and $15 million and $32 million for employee benefit costs related to Company-wide headcount reductions.reductions and headcount reductions under a VERP offered at USSK, respectively. Cash payments were made related to severance and exit costs of $35approximately $169 million. A portion of these cash payments, approximately $38 million, were funded by the postretirement benefit trust (VEBA) per an agreement with the United Steelworkers of America.

During 2018, restructuring and other charges recorded were immaterial. Cash payments were made related to severance and exit costs of $21 million.

During 2017, U. S. Steel recorded net restructuring and other charges of approximately $31 million, which consists of charges of $37 million primarily related to the permanent shutdown and relocation of the No. 6 Quench & Temper Mill at Lorain Tubular Operations and a favorable adjustment of $6 million primarily associated with a change in estimate for previously recorded costs for environmental obligations and Company-wide headcount reductions. Cash payments were made related to severance and exit costs of $32 million.

Charges for restructuring and ongoing cost reduction initiatives are recorded in the period U. S. Steel commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met. Charges related to the restructuring and cost reductions are reported in restructuring and other charges in the Consolidated Statements of Operations.

The activity in the accrued balances incurred in relation to restructuring and other cost reduction programs during the years ended December 31, 20192022, and December 31, 20182021, were as follows:
(in millions)Employee Related CostsExit CostsNon-cash ChargesTotal
Balance at December 31, 2020$51 $126 $— $177 
Additional charges76 51 $128 
Cash payments/utilization(36)(28)(1)(65)
Balance at December 31, 2021$91 $149 $ $240 
Additional charges58 (10) 48 
Cash payments/utilization(a)
(17)(89) (106)
Balance at December 31, 2022$132 $50 $ $182 
(in millions) Employee Related Costs Exit Costs 
Non-cash Charges (a)
 Total
Balance at December 31, 2017 $4
 $34
 $
 $38
Cash payments/utilization (4) (17) 
 (21)
Balance at December 31, 2018 $
 $17
 $
 $17
Additional charges 111
 119
 45
 275
Cash payments/utilization (24) (11) (45) (80)
Balance at December 31, 2019 $87
 $125
 $
 $212
(a)$7 million and $11 million of payments were made from the pension fund trust assets in the Employee Related Cost column during the years ended December 31, 2021, and December 31, 2022, respectively.

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(a) Non-cash charges primarily relate to accelerated depreciation associated with the intended indefinite idlingTable of our ECT operations and Dearborn, Michigan, finishing facility.Contents



Accrued liabilities for restructuring and other cost reduction programs are included in the following balance sheet lines:
(in millions)December 31, 2022December 31, 2021
Accounts payable$33 $34 
Payroll and benefits payable 
Employee benefits131 88 
Deferred credits and other noncurrent liabilities18 116 
Total$182 $240 
(in millions) December 31, 2019 December 31, 2018
Accounts payable $46
 $11
Payroll and benefits payable 64
 
Employee benefits 23
 
Deferred credits and other noncurrent liabilities 79
 6
Total $212
 $17


26. Contingencies and Commitments

U. S. Steel is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Certain of these matters are discussed below. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the Consolidated Financial Statements. However, management believes that U. S. Steel will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably.

U. S. Steel accrues for estimated costs related to existing lawsuits, claims and proceedings when it is probable that it will incur these costs in the future and the costs are reasonably estimable.

Asbestos matters – As of December 31, 2019,2022, U. S. Steel was a defendant in approximately 800920 active cases involving approximately 2,3902,510 plaintiffs. The vast majority of these cases involve multiple defendants. About 1,540,1,545, or approximately 6562 percent, of these plaintiff claims are currently pending in jurisdictions which permit filings with massive numbers of plaintiffs. At December 31, 2018,2021, U. S. Steel was a defendant in approximately 755915 cases involving approximately 2,3202,505 plaintiffs. Based upon U. S. Steel’s experience in such cases, it believes that the actual number of plaintiffs who ultimately assert claims against U. S. Steel will likely be a small fraction of the total number of plaintiffs.

The following table shows the number of asbestos claims in the current year and the prior two years:
Period ended Opening
Number
of Claims
 
Claims
Dismissed,
Settled
and Resolved
(a)
 New
Claims
 Closing
Number
of Claims
December 31, 2017 3,340 275 250 3,315
December 31, 2018 3,315 1,285 290 2,320
December 31, 2019 2,320 195 265 2,390

(a) The period ending December 31, 2018 includes approximately 1,000 dismissed cases previously pending in the State of Texas.
Historically, asbestos-related claims against U. S. Steel fall into three groups: (1) claims made by persons who allegedly were exposed to asbestos on the premises of U. S. Steel facilities; (2) claims made by persons allegedly exposed to products manufactured by U. S. Steel; and (3) claims made under certain federal and maritime laws by employees of former operations of U. S. Steel.
Period endedOpening
Number
of Claims
Claims Dismissed, Settled and ResolvedNew
Claims
Closing
Number
of Claims
December 31, 20202,3902402952,445
December 31, 20212,4452002602,505
December 31, 20222,5052302352,510
The amount U. S. Steel accrues for pending asbestos claims is not material to U. S. Steel’s financial condition. However, U. S. Steel is unable to estimate the ultimate outcome of asbestos-related claims due to a number of uncertainties, including: (1) the rates at which new claims are filed, (2) the number of and effect of bankruptcies of other companies traditionally defending asbestos claims, (3) uncertainties associated with the variations in the litigation process from jurisdiction to jurisdiction, (4) uncertainties regarding the facts, circumstances and disease process with each claim, and (5) any new legislation enacted to address asbestos-related claims.
Further, U. S. Steel does not believe that an accrual for unasserted claims is required. At any given reporting date, it is probable that there are unasserted claims that will be filed against the Company in the future. In 2018 and 2019, theThe Company engagedengages an outside valuation consultant to assist in assessing its ability to estimate an accrual for unasserted claims. This assessment wasis based on the Company's settlement experience, including recent claims trends. TheThis analysis focusedfocuses on settlements made over the last several years as these claims are likely to best represent future claim characteristics. After review by the valuation consultant and U. S. Steel management, it was determined that the Company could not estimate an accrual for unasserted claims.

Despite these uncertainties, management believes that the ultimate resolution of these matters will not have a material adverse effect on U. S. Steel’s financial condition.

Environmental Matters – U. S. Steel is subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for noncompliance. Changes in accrued liabilities for remediation activities where U. S. Steel is identified as a named party are summarized in the following table:

  Year Ended December 31,
(In millions) 2019 2018
Beginning of period $187
 $179
Accruals for environmental remediation deemed probable and reasonably estimable 20
 14
Obligations settled (21) (6)
End of period $186
 $187

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Year Ended December 31,
(In millions)20222021
Beginning of period$158 $146 
Accruals for environmental remediation deemed probable and reasonably estimable20 43 
Adjustments for changes in estimates3 — 
Obligations settled(55)(31)
End of period$126 $158 

Accrued liabilities for remediation activities are included in the following Consolidated Balance Sheet lines:

(In millions) December 31, 2019 December 31, 2018
Accounts payable $53
 $37
Deferred credits and other noncurrent liabilities 133
 150
Total $186
 $187

(In millions)December 31, 2022December 31, 2021
Accounts payable$32 $65 
Deferred credits and other noncurrent liabilities94 93 
Total$126 $158 

Expenses related to remediation are recorded in cost of sales and were immaterial$21 million and $47 million for the years ended December 31, 2019, December 31, 20182022 and December 31, 2017.2021, respectively. It is not currently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties that may be imposed. Due to uncertainties inherent in remediation projects and the associated liabilities, it is reasonably possible that total remediation costs for active matters may exceed the accrued liabilities by as much as 1520 to 3035 percent.

Remediation Projects
U. S. Steel is involved in environmental remediation projects at or adjacent to several current and former U. S. Steel facilities and other locations that are in various stages of completion ranging from initial characterization through post-closure monitoring. Based on the anticipated scope and degree of uncertainty of projects, we categorize projects as follows:

(1)
Projects with Ongoing Study and Scope Development – Projects which are still in the development phase. For these projects, the extent of remediation that may be required is not yet known, the remediation methods and plans are not yet developed, and/or cost estimates cannot be determined. Therefore, significant costs, in addition to the accrued liabilities for these projects, are reasonably possible. There are 6 environmental remediation projects where additional costs for completion are not currently estimable, but could be material. These projects are at Fairfield Works, Lorain Tubular, USS-POSCO Industries (UPI), the Fairless Plant, Gary Works and the former steelmaking plant at Joliet, Illinois. As of December 31, 2019, accrued liabilities for these projects totaled $2 million for the costs of studies, investigations, interim measures, design and/or remediation. It is reasonably possible that additional liabilities associated with future requirements regarding studies, investigations, design and remediation for these projects could be as much as $30 million to $45 million.

(2)
Significant Projects with Defined Scope – Projects with significant accrued liabilities with a defined scope. As of December 31, 2019, there are 4 significant projects with defined scope greater than or equal to $5 million each, with a total accrued liability of $128 million. These projects are: Gary Resource Conservation and Recovery Act (RCRA) (accrued liability of $25 million), the former Geneva facility (accrued liability of $48 million), the Cherryvale Zinc site (accrued liability of $10 million) and the former Duluth facility St. Louis River Estuary (accrued liability of $45 million).

(3)
Other Projects with a Defined Scope – Projects with relatively small accrued liabilities for which we believe that, while additional costs are possible, they are not likely to be significant, and also include those projects for which we do not yet possess sufficient information to estimate potential costs to U. S. Steel. There are

2(1) Projects with Ongoing Study and Scope Development – Projects which are still in the development phase. For these projects, the extent of remediation that may be required is not yet known, the remediation methods and plans are not yet developed, and/or cost estimates cannot be determined. Therefore, significant costs, in addition to the accrued liabilities for these projects, are reasonably possible. There are four environmental remediation projects where additional costs for completion are not currently estimable, but could be material. These projects are at Fairfield Works, Lorain Tubular, USS-UPI LLC (UPI) formerly known as USS-POSCO Industries and the former steelmaking plant at Joliet, Illinois. As of December 31, 2022, accrued liabilities for these projects totaled $1 million for the costs of studies, investigations, interim measures, design and/or remediation. It is reasonably possible that additional liabilities associated with future requirements regarding studies, investigations, design and remediation for these projects could be as much as $22 million to $36 million.

(2) Significant Projects with Defined Scope – Projects with significant accrued liabilities with a defined scope. As of December 31, 2022, there are three significant projects with defined scope greater than or equal to $5 million each, with a total accrued liability of $69 million. These projects are: Gary Resource Conservation and Recovery Act (RCRA) (accrued liability of $28 million), Duluth Works (accrued liability of $22 million) and the former Geneva facility (accrued liability of $19 million).

(3)     Other Projects with a Defined Scope – Projects with relatively small accrued liabilities for which we believe that, while additional costs are possible, they are not likely to be significant, and also include those projects for which we do not yet possess sufficient information to estimate potential costs to U. S. Steel. There are three other environmental remediation projects which each had an accrued liability of between $1 million and $5 million. The total accrued liability for these projects at December 31, 20192022 was $4 million. These projects have progressed through a significant portion of the design phase and material additional costs are not expected.

The remaining environmental remediation projects each have an accrued liability of less than $1 million each. The total accrued liability for these projects at December 31, 20192022 was approximately $2$6 million. We doThe Company does not foresee material additional liabilities for any of these sites.

Post-Closure Costs – Accrued liabilities for post-closure site monitoring and other costs at various closed landfills totaled $23$24 million at December 31, 20192022 and were based on known scopes of work.

Administrative and Legal Costs – As of December 31, 2019,2022, U. S. Steel had an accrued liability of $11$10 million for administrative and legal costs related to environmental remediation projects. These accrued liabilities were based on projected administrative and legal costs for the next three years and do not change significantly from year to year.
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Capital Expenditures For a number of years, U. S. Steel has made substantial capital expenditures to comply with various regulations, laws, and other requirements relating to the environment. In 2019 and 2018, suchSuch capital expenditures totaled $123$43 million and $125$27 million In 2022 and 2021, respectively. U. S. Steel anticipates making additional such expenditures in the future, which may be material; however, the exact amounts and timing of such expenditures are uncertain because of the continuing evolution of specific regulatory requirements.
EUEuropean Union (the EU) Environmental Requirements– Under- Phase IV of the EU Emissions Trading Scheme (ETS), USSK'sSystem (the EU ETS) commenced on January 1, 2021 and will finish on December 31, 2030. The European Commission issued final allocationapproval of the updated 2021-2025 Slovak National Allocation table in February 2022. Subsequently, the Slovak Ministry of Environment allocated the full amount of 2022 free allowances for the Phase III period, which covers the years 2013 through 2020 is 48totaling 6.3 million allowances. Based on projected total production levels, we startedEUA to purchase allowancesUSSE in the third quarter of 2017 to meet the annual compliance submission in the future.February and April 2022. As of December 31, 2019,2022, we have purchasedpre-purchased approximately 11.72.1 million European Union Allowances (EUA)EUA totaling €132€147 million (approximately $148$157 million) to cover the estimatedexpected 2022 and 2023 shortfall of emission allowances. We estimate that the total shortfall will be approximately 12.5 million allowances for the Phase III period. The full cost of complying with the ETS regulations will depend on future production levels and future emissions intensity levels.
The EU'sEU’s Industrial Emissions Directive requires implementation of EU determinedEU-determined best available techniques (BAT) for Iron and Steel production to reduce environmental impacts as well as compliance with BAT associated emission levels. Our most recent estimate of totalTotal capital expenditures for projects to comply with or go beyond BAT requirements iswere €138 million (approximately $155$147 million). These costs were partially offset by the EU funding received and may be mitigated over the 2017 to 2020 program period. These costs may be mitigatednext measurement periods if USSK complies with certain financial covenants, which are assessed annually. USSK complied with these covenants as of December 31, 2019.2022. If we are unable to meet these covenants in the future, USSK might be required to provide additional collateral (e.g., bank guarantee) to secure 50 percent of the full value of estimated expenditures. There could be increased operating costs associated with these projects, such as increased energy and maintenance costs. We are currently unable to reliably estimate what the increase in operating costs will be as many projects are in the development stage.EU funding received.
Environmental indemnifications – Throughout its history, U. S. Steel has sold numerous properties and businesses and many of these sales included indemnifications and cost sharing agreements related to the assets that were divested. These indemnifications and cost sharing agreements have included provisions related to the condition of the property, the approved use, certain representations and warranties, matters of title, and environmental matters. While most of these provisions have not specifically dealt with environmental issues, there have been transactions in which U. S. Steel indemnified the buyer for clean-up or remediation costs relating to the business sold or its then existing conditions or past practices related to non-compliance with environmental laws. Most of the recent indemnification and cost sharing agreements are of a limited nature, only applying to non-compliance with past and/or current laws. Some indemnifications and cost sharing agreements only run for a specified period of time after the transactions close and others run indefinitely. In addition, current owners or operators of property formerly owned or operated by U. S. Steel may have common law claims and cost recovery and contribution rights against U. S. Steel related to environmental matters. The amount of potential environmental liability associated with these transactions and properties is not estimable due to the nature and extent of the unknown conditions related to the properties divested and deconsolidated. Aside from the environmental liabilities already recorded as a result of these transactions due to specific environmental remediation activities and cases (included in the $186$126 million of accrued liabilities for remediation discussed above), there are no other known probable and estimable environmental liabilities related to these transactions.

Guarantees – The maximum guarantees of the indebtedness of unconsolidated entities of U. S. Steel totaled $4$7 million at December 31, 2019.2022.
Other contingencies Under certain operating lease agreements covering various equipment, U. S. Steel has the option to renew the lease or to purchase the equipment at the end of the lease term. If U. S. Steel does not exercise the purchase option by the end of the lease term, U. S. Steel guarantees a residual value of the equipment as determined at the lease inception date (totaling approximately $23$13 million at December 31, 2019)2022). NaNNo liability has been recorded for these guarantees as the potential loss is not probable.
The Company's BR2 project in Osceola, Arkansas qualifies for financing and related economic incentives associated with the acquisition, development, construction and operation of the facility. These incentives consist of advance lump-sum payments which are included in deferred credits and other noncurrent liabilities on the Consolidated Balance Sheet. In March 2022, the Company received a lump-sum payment of approximately $82 million as proceeds from the sale of a portion of expected future tax credits to be earned by the Company under the State of Arkansas's Recycling Tax Credit program. These funds are to be used primarily for the acquisition of project related equipment, however they may also be used for the training and development of new employees hired for the project. The Company is contingently liable for certain repayment penalties if the Company fails to meet certain employment requirements in any given period. In April 2022, the Company received a $3 million grant from Mississippi County, Arkansas, and in May 2022, the Company received a $50 million grant from the State of Arkansas Quick Action Closing Fund. Both grants pertain to the reimbursement of qualifying project costs. For each of these incentives and grants, the balance of deferred income will be recognized into Other gains, net in the accompanying Consolidated Statements of Operations on a systematic basis over the periods in which the Company earns the granted funds by complying with the investment and employment requirements of the grant programs.
Insurance U. S. Steel maintains insurance for certain property damage, equipment, business interruption and general liability exposures; however, insurance is applicable only after certain deductibles and retainages. U. S. Steel is self-insured for certain other exposures including workers’ compensation (where permitted by law) and auto liability. Liabilities are recorded for workers’ compensation and personal injury obligations. Other costs resulting from losses under deductible or retainage amounts or not otherwise covered by insurance are charged against income upon occurrence.
U. S. Steel uses surety bonds, trusts and letters of credit to provide whole or partial financial assurance for certain obligations such as workers’ compensation. The total amount of active surety bonds, trusts and letters of credit being used for financial assurance purposes was approximately $164$178 million as of December 31, 2019,2022, which reflects U. S. Steel’s maximum exposure under these financial guarantees, but not its total exposure for the underlying obligations. A significant portion of our trust arrangements and letters of credit are collateralized by ourthe Credit Facility Agreement. The remaining trust arrangements and letters of credit are collateralized by restricted cash. Restricted cash, which is recorded in other
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current and noncurrent assets, totaled $190$35 million and $40$78 million at December 31, 20192022 and December 31, 20182021 respectively.
Capital Commitments At December 31, 2019,2022, U. S. Steel’s contractual commitments to acquire property, plant and equipment totaled $880 million.$2.235 billion.

Contractual Purchase Commitments – U. S. Steel is obligated to make payments under contractual purchase commitments, including unconditional purchase obligations. Payments for contracts with remaining terms in excess of one year are summarized below (in millions):

2020 2021 2022 2023 2024 Later years Total
$430 $404 $337 $338 $107 $611 $2,227


20232024202520262027Later yearsTotal
$477$258$352$285$267$394$2,033

The majority of U. S. Steel’s unconditional purchase obligations relate to the supply of industrial gases, and certain energy and utility services with terms ranging from two to 1613 years. Unconditional purchase obligations also include coke and steam purchase commitments related to a coke supply agreement with Gateway Energy & Coke Company LLC (Gateway) under which Gateway is obligated to supply a minimum volume of the expected targeted annual production of the heat recovery coke plant, and U. S. Steel is obligated to purchase the coke from Gateway at the contract price. As of December 31, 2019,2022, if U. S. Steel were to terminate the agreement, it may be obligated to pay in excess of $138$24 million.


Total payments relating to unconditional purchase obligations were approximately $653$850 million in 2019, $6002022, $767 million in 20182021 and $576$553 million in 2020.
2017.

27. Common Stock Repurchase ProgramIssued and Repurchased

In November 2018, U. S. Steel announcedOn October 25, 2021, the Board of Directors authorized a common stockshare repurchase program that allowed for the repurchase of up to $300 million of its outstanding common stock from time to time in the open market or privately negotiated transactions. On January 24, 2022 the Board of Directors authorized an additional $500 million under the share repurchase program.
On July 25, 2022, following the completion of the previously authorized $800 million share repurchase programs, the Board of Directors authorized a new share repurchase program that allows for the repurchase of up to $500 million of its outstanding common stock from time to time in the open market or privately negotiated transactions through 2020 at the discretion of management. The Company's share repurchase program does not obligate it to acquire any specific number of shares.
U. S. Steel repurchased 5,289,47537.6 million shares and 2,760,1126.6 million shares of common stock for approximately $88$849 million and $75$150 million under this programthese programs during 20192022 and 2018,2021, respectively.
In December 2019, the BoardFebruary 2021, U. S. Steel issued 48.3 million shares of Directors terminated the authorization for the common stock repurchase program.for net proceeds of approximately $790 million.

28. Subsequent Event

On January 23,In June 2020, U. S. Steel and POSCO-California Corporation, a subsidiaryissued 50 million shares of POSCO (POSCAL), entered into an agreement under which U. S. Steel will acquire POSCAL’s 50% ownership interest in USS-POSCO Industries (UPI). UPI is located in Pittsburg, California and markets sheet and tin mill products, principally in the western United States. UPI produces hot rolled pickled and oiled, cold-rolled sheets, galvanized sheets and tin mill products made from hot bands principally provided by U. S. Steel. UPI’s annual production capability iscommon stock for net proceeds of approximately 1.5 million tons. The closing$410 million.
112

Table of the transaction is expected to occur sometime during the first quarter of 2020, subject to customary closing terms and conditions. U. S. Steel currently accounts for UPI using the equity method of accounting. Upon the closing of the transaction, UPI’s financial results will be fully consolidated in U. S. Steel’s financial statements. 




Contents
SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

  2019 2018
(In millions, except per share data) 
4th Qtr. (a)
 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Net sales $2,824
 $3,069
 $3,545
 $3,499
 $3,691
 $3,729
 $3,609
 $3,149
Segment (loss) earnings before interest and income taxes:                
Flat-rolled (79) 46
 134
 95
 321
 305
 224
 33
USSE (30) (46) (10) 29
 62
 72
 115
 110
Tubular (46) (25) (6) 10
 (3) 7
 (35) (27)
Total reportable segments $(155) $(25) $118
 $134
 $380
 $384
 $304
 $116
Other Businesses (3) 8
 10
 8
 11
 16
 17
 11
Items not allocated to segments (218) (63) (13) (31) (78) (27) (20) 10
Total (loss) earnings before interest and income taxes $(376) $(80) $115
 $111
 $313
 $373
 $301
 $137
Net (loss) earnings (668) (84) 68
 54
 592
 291
 214
 18
Net (loss) earnings attributable to United States Steel Corporation $(668) $(84) $68
 $54
 $592
 $291
 $214
 $18
                 
Gross profit $43
 $167
 $318
 $327
 $487
 $557
 $488
 $341
                 
Common stock data                
Net (loss) earnings per share attributable to United States Steel Corporation                
- Basic $(3.93) $(0.49) $0.39
 $0.31
 $3.36
 $1.64
 $1.21
 $0.10
- Diluted $(3.93) $(0.49) $0.39
 $0.31
 $3.34
 $1.62
 $1.20
 $0.10
Dividends paid per share $0.05
 $0.05
 $0.05
 $0.05
 $0.05
 $0.05
 $0.05
 $0.05
(a)
Fourth quarter and full year 2019 results have been revised from the Company's earnings release issued on January 30, 2020 for an adjustment to the deferred tax asset valuation allowance.


SUPPLEMENTARY INFORMATION ON MINERAL RESERVES OTHER THAN OIL AND GAS (Unaudited)


Mineral Reserves

U. S. Steel operates two surface iron ore mining complexes in Minnesota consisting of the Minntac Mine and Pellet Plant and the Keetac Mine and Pellet Plant. As of December 31, 2019 U. S. Steel owns an interest in the iron ore mining assets of Hibbing Taconite Company.

The following table provides a summary of our reserves and minerals production by mining complex:

  Proven and Probable Reserves
As of December 31, 2019
 Production
(Millions of short tons) Owned Leased Total 2019 2018 2017
Iron ore pellets:            
Minntac Mine and Pellet Plant 116
 298
 414
 14.4
 15.9
 16.0
Keetac Mine and Pellet Plant 19
 349
 368
 5.8
 5.9
 5.1
Tilden Mining Company, L.C.(1)( 2)
 
 
 
 
 
 0.8
Hibbing Taconite Company(1)
 
 5
 5
 1.2
 1.3
 1.3
Total 135
 652
 787
 21.4
 23.1
 23.2
(1)Represents U. S. Steel’s proportionate share of proven and probable reserves and production as these investments are unconsolidated equity affiliates.
(2)On September 29, 2017, a subsidiary of U. S. Steel completed the sale of its 15% ownership interest in Tilden Mining Company, L.C.

Iron Ore Reserves
Reserves are defined by SEC Industry Standard Guide 7 as that part of a mineral deposit that could be economically and legally extracted and produced at the time of the reserve determination. The estimate of proven and probable reserves is of recoverable tons. Recoverable tons mean the tons of product that can be used internally or delivered to a customer after considering mining and beneficiation or preparation losses. Neither inferred reserves nor resources that exist in addition to proven and probable reserves were included in these figures. At December 31, 2019, all 787 million tons of proven and probable reserves are assigned, which means that they have been committed by U. S. Steel to its operating mines and are of blast furnace pellet grade.

U. S. Steel estimates its iron ore reserves using exploration drill holes, physical inspections, sampling, laboratory testing, 3-D computer models, economic pit analysis and fully-developed pit designs for its operating mines. These estimates are reviewed and reassessed from time to time. The most recent such review for our Keetac operating mine was completed in 2013 and resulted in an increase in the proven and probable reserves primarily due to additional exploration drilling and development of an economic computerized mine plan. The most recent review for our Minntac operating mine was conducted in 2019 and resulted in a decrease due to updated drilling and economic parameters. Estimates for our share of unconsolidated equity affiliates are based upon information supplied by the joint ventures. The most recent such review for Hibbing Taconite Company was conducted in 2015.

FIVE-YEAR OPERATING SUMMARY (Unaudited)

(Thousands of tons, unless otherwise noted)20222021202020192018
Raw Steel Production
Gary, IN5,3265,6644,6754,9745,958
Great Lakes, MI3281,9642,369
Mon Valley, PA2,1612,6682,5522,3312,640
Granite City, IL1,3591,5491,7582,140926
Total Flat-Rolled facilities8,8469,8819,31311,40911,893
Mini Mill facility2,6502,688
U. S. Steel Košice3,8394,9313,3663,9035,023
Tubular facility63446416
Total15,96917,96412,69515,31216,916
Raw Steel Capability
Flat-Rolled13,20013,20017,00017,00017,000
Mini Mill3,3003,300
USSE5,0005,0005,0005,0005,000
Tubular (c)
900900900
Total22,40022,40022,90022,00022,000
Production as % of total capability:
Flat-Rolled67 %58 %55 %67 %70 %
Mini Mill80 %81 %— %— %— %
USSE77 %99 %67 %78 %100 %
Tubular (c)
70 %52 %%— %— %
Coke Production
Flat-Rolled3,6273,8482,5573,4853,718
USSE1,4071,5481,1161,3281,514
Total5,0345,3963,6734,8135,232
Iron Ore Pellet Production (a)
Total22,05923,36916,98121,45023,054
Steel Shipments by Segment (b)
Flat-Rolled8,3739,0188,71110,70010,510
Mini Mill2,2872,230
USSE3,7594,3023,0413,5904,457
Tubular523444464769780
Total steel shipments14,94215,99412,21615,05915,747
Average Realized Price (dollars per net ton)
Flat-Rolled$1,261 $1,172 $718 $753 $811 
Mini Mill$1,134 $1,314 $— $— $— 
USSE$1,090 $966 $626 $652 $693 
Tubular$2,978 $1,696 $1,271 $1,450 $1,483 
(a)Includes our share of production from Hibbing.
(b)Does not include intersegment shipments or shipments by joint ventures and other equity investees of U. S. Steel. Includes shipments from U. S. Steel to joint ventures and equity investees of substrate materials, primarily hot-rolled and cold-rolled sheets.
(c)The Fairfield Electric Arc Furnace commenced operation in October 2020. The 2020 production as a % of total capability amount is based on an October 1, 2020 start date.


113

(Thousands of tons, unless otherwise noted) 2019 2018 2017 2016 2015
Raw Steel Production          
Gary, IN 4,974
 5,958
 5,755
 5,608
 5,172
Great Lakes, MI 1,964
 2,369
 2,592
 2,543
 2,257
Mon Valley, PA 2,331
 2,640
 2,473
 2,555
 2,266
Granite City, IL 2,140
 926
 0
 0
 1,162
Fairfield, AL(a)
 0
 0
 0
 0
 480
Total Flat-Rolled facilities 11,409
 11,893
 10,820
 10,706
 11,337
U. S. Steel Košice 3,903
 5,023
 5,091
 4,967
 4,669
Total 15,312
 16,916
 15,911
 15,673
 16,006
Raw Steel Capability          
Flat-Rolled(a)
 17,000
 17,000
 17,000
 17,000
 17,000
USSE 5,000
 5,000
 5,000
 5,000
 5,000
Total 22,000
 22,000
 22,000
 22,000
 22,000
Production as % of total capability:          
Flat-Rolled 67% 70% 64% 63% 60%
USSE 78% 100% 102% 99% 93%
Coke Production          
Flat-Rolled(a)
 3,485
 3,718
 3,416
 2,961
 3,957
USSE 1,328
 1,514
 1,497
 1,545
 1,600
Total 4,813
 5,232
 4,913
 4,506
 5,557
Iron Ore Pellet Production(b)
          
Total 21,450
 23,054
 23,246
 17,635
 17,422
Steel Shipments by Segment(c)
          
Flat-Rolled(a)
 10,700
 10,510
 9,887
 10,094
 10,595
USSE 3,590
 4,457
 4,585
 4,496
 4,357
Tubular 769
 780
 688
 400
 593
Total steel shipments 15,059
 15,747
 15,160
 14,990
 15,545
Average Realized Price (dollars per net ton)          
Flat-Rolled $753
 $811
 $726
 $666
 $695
USSE $652
 $693
 $622
 $483
 $516
Tubular $1,450
 $1,483
 $1,253
 $1,071
 $1,464
Table of Contents
(a)As a result of the permanent shutdown of the blast furnace and associated steelmaking operations, along with most of the flat-rolled finishing operations at Fairfield Works late in the third quarter of 2015, Flat-Rolled's annual raw steel capability was reduced to 17.0 million tons. In 2015, coke operations at Gary Works and Granite City Works were permanently shutdown.
(b)Includes our share of production from Hibbing and Tilden. As a result of the sale of our ownership interest, iron ore pellet production amounts do not include Tilden after September 29, 2017.
(c)Does not include intersegment shipments or shipments by joint ventures and other equity investees of U. S. Steel. Includes shipments from U. S. Steel to joint ventures and equity investees of substrate materials, primarily hot-rolled and cold-rolled sheets.




FIVE-YEAR OPERATING SUMMARY (Unaudited) (Continued)

(Thousands of net tons)20222021202020192018
Steel Shipments by Market - North American Facilities (a) (c)
Steel service centers2,2082,6601,4501,9021,904
Further conversion:
Trade customers2,9352,3852,0632,8232,273
Joint ventures (b)
256490415819810
Transportation and automotive (b)
2,6312,3722,0122,6202,874
Construction and construction products1,2611,5241,2951,120991
Containers and packaging706959913652768
Appliances and electrical equipment509679497570599
Oil, gas and petrochemicals494426430725742
All other183197100238329
Total11,18311,6929,17511,46911,290
Steel Shipments by Market - USSE
Steel service centers839995690740799
Further conversion:
Trade customers289314202214287
Transportation and automotive619590517676728
Construction and construction products1,0521,3467751,0481,637
Containers and packaging423449435440439
Appliances and electrical equipment225266194220261
Oil, gas and petrochemicals38511
All other309334223252295
Total3,7594,3023,0413,5904,457
(a)Does not include shipments by joint ventures and other equity investees of U. S. Steel, but instead reflects the shipments of substrate materials, primarily hot-rolled and cold-rolled sheets, to those entities.
(b)PRO-TEC automotive substrate shipments are included in the Transportation and Automotive category.
(c)Shipments previously reported in 2018 as Exports have been reclassified to one of the other categories to which they relate.

114

(Thousands of net tons) 2019 2018 2017 2016 2015
Steel Shipments by Market - North American Facilities(a) (c)
          
Steel service centers 1,902 1,904 1,953 2,094 1,946
Further conversion:          
Trade customers 2,823 2,273 1,738 1,420 2,146
Joint ventures (b)
 819 810 715 414 260
Transportation and automotive (b)
 2,620 2,874 2,982 2,228 3,536
Construction and construction products 1,120 991 951 1,025 948
Containers and packaging 652 768 715 2,107 982
Appliances and electrical equipment 570 599 594 600 611
Oil, gas and petrochemicals 725 742 647 360 538
All other 238 329 280 246 221
Total 11,469 11,290 10,575 10,494 11,188
Steel Shipments by Market - USSE          
Steel service centers 740 799 761 801 718
Further conversion:          
Trade customers 214 287 284 274 304
Transportation and automotive 676 728 708 660 705
Construction and construction products 1,048 1,637 1,831 1,811 1,703
Containers and packaging 440 439 438 436 424
Appliances and electrical equipment 220 261 247 236 236
Oil, gas and petrochemicals 0 11 10 4 0
All other 252 295 306 274 267
Total 3,590 4,457 4,585 4,496 4,357
Table of Contents
(a)Does not include shipments by joint ventures and other equity investees of U. S. Steel, but instead reflects the shipments of substrate materials, primarily hot-rolled and cold-rolled sheets, to those entities.
(b)PRO-TEC automotive substrate shipments are included in the Transportation and Automotive category.
(c)Shipments previously reported in 2018, 2017, 2016 and 2015 as Exports have been reclassified to one of the other categories to which they relate.


FIVE-YEAR FINANCIAL SUMMARY (Unaudited) (Continued)
 
(Dollars in millions, except per share amounts)20222021202020192018
Net sales by segment:
Flat-Rolled$12,872 $12,358 $7,279 $9,560 $9,912 
Mini Mill3,047 3,516 — — — 
USSE4,256 4,266 1,970 2,420 3,228 
Tubular1,616 809 646 1,191 1,236 
Total reportable segments$21,791 $20,949 $9,895 $13,171 $14,376 
Other9 101 162 168 186 
Intersegment sales(735)(775)(316)(402)(384)
Total$21,065 $20,275 $9,741 $12,937 $14,178 
Segment earnings (loss) before interest and income taxes:
Flat-Rolled$1,951 $2,630 $(596)$196 $883 
Mini Mill481 1,206 — — — 
USSE444 975 (57)359 
Tubular544 (179)(67)(58)
Total reportable segments$3,420 $4,812 $(766)$72 $1,184 
Other22 (11)(39)23 55 
Items not allocated to segments (a)
(282)145 (270)(325)(115)
Total earnings (loss) before interest and income taxes$3,160 $4,946 $(1,075)$(230)$1,124 
Net interest and other financial costs(99)602 232 222 312 
Income tax expense (benefit)735 170 (142)178 (303)
Net earnings (loss) attributable to United States Steel Corporation$2,524 $4,174 $(1,165)$(630)$1,115 
Per common share:
- Basic$10.22 $15.77 $(5.92)$(3.67)$6.31 
- Diluted$9.16 $14.88 $(5.92)$(3.67)$6.25 
(a)See Note 4 to the Consolidated Financial Statements.


115
(Dollars in millions, except per share amounts) 
2019 (c)
 2018 2017 2016 2015
Net sales by segment:          
Flat-Rolled $9,560
 $9,912
 $8,491
 $7,532
 $8,561
USSE 2,420
 3,228
 2,974
 2,246
 2,326
Tubular 1,191
 1,236
 945
 451
 898
Total reportable segments $13,171
 $14,376
 $12,410
 $10,229
 $11,785
Other Businesses 168
 186
 179
 169
 165
Intersegment sales (402) (384) (339) (137) (376)
Total $12,937
 $14,178
 $12,250
 $10,261
 $11,574
Segment earnings (loss) before interest and income taxes:          
Flat-Rolled $196
 $883
 $375
 $22
 $(249)
USSE (57) 359
 327
 185
 81
Tubular (67) (58) (99) (303) (181)
Total reportable segments $72
 $1,184
 $603
 $(96) $(349)
Other Businesses 23
 55
 44
 63
 33
Items not allocated to segments(b)
 (325) (115) 22
 (168) (826)
Total (loss) earnings before interest and income taxes (a)
 $(230) $1,124
 $669
 $(201) $(1,142)
Net interest and other financial costs (a)
 222
 312
 368
 215
 317
Income tax provision (benefit) 178
 (303) (86) 24
 183
Net (loss) earnings attributable to United States Steel Corporation $(630) $1,115
 $387
 $(440) $(1,642)
Per common share:          
- Basic $(3.67) $6.31
 $2.21
 $(2.81) $(11.24)
- Diluted $(3.67) $6.25
 $2.19
 $(2.81) $(11.24)
(a)
Amounts have been adjusted to include $61 million, ($36) million and $60 million in 2017, 2016 and 2015, respectively, of postretirement benefit expense (other than service cost) related to the retrospective presentation change of net periodic benefit cost of our defined benefit pension and other post-employment benefits as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018.
(b)See Note 4 to the Consolidated Financial Statements.
(c)Fourth quarter and full year 2019 results have been revised from the Company's earnings release issued on January 30, 2020 for an adjustment to the deferred tax asset valuation allowance.

FIVE-YEAR FINANCIAL SUMMARY (Unaudited) (Continued)


 2019 2018 2017 2016 2015
Balance Sheet Position at Year-End (dollars in millions)          
Current assets $3,813
 $4,830
 $4,755
 $4,356
 $3,917
Net property, plant & equipment 5,447
 4,865
 4,280
 3,979
 4,411
Total assets (a)
 11,608
 10,982
 9,862
 9,160
 9,167
Short-term debt and current maturities of long-term debt 14
 65
 3
 50
 45
Other current liabilities 2,611
 3,132
 2,770
 2,281
 2,103
Long-term debt (a)
 3,627
 2,316
 2,700
 2,981
 3,093
Employee benefits 532
 980
 759
 1,216
 1,101
Total United States Steel Corporation stockholders’ equity 4,092
 4,202
 3,320
 2,274
 2,436
Cash Flow Data (dollars in millions)          
Net cash provided by operating activities (b) (c)
 $682
 $938
 $826
 $754
 $360
Capital expenditures 1,252
 1,001
 505
 306
 500
Dividends paid 35
 36
 35
 31
 29
Employee Data          
Total employment costs (dollars in millions) $2,870
 $2,824
 $2,477
 $2,342
 $2,780
Average North America employment costs (dollars per hour) $65.70
 $65.97
 $62.32
 $61.75
 $65.64
Average number of North America employees 16,633
 16,258
 15,326
 15,048
 19,391
Average number of USSE employees 11,314
 11,993
 11,948
 11,927
 12,052
Number of pensioners at year-end 41,198
 43,573
 45,837
 47,765
 49,802
Stockholder Data at Year-End          
Common shares outstanding, net of treasury shares (millions) 170.0
 174.5
 175.2
 173.8
 146.3
Registered stockholders (thousands) 12.1
 13.0
 13.8
 14.8
 15.4
Market price of common stock $11.41
 $18.24
 $35.19
 $33.01
 $7.98
(a)
2015 amounts have been adjusted to retroactively adopt Accounting Standards Update 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability.
(b)
2016 and 2015 amounts have been adjusted to retroactively adopt Accounting Standards Update 2016-09, Compensation - Stock Compensation, which requires that cash taxes paid by the Company when directly withholding shares for tax withholding purposes be classified as a cash flow from financing activity.
(c)
2017, 2016 and 2015 amounts have been adjusted to retroactively adopt Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which requires that all payments to extinguish debt now be presented as cash outflows from financing activities on our Consolidated Statement of Cash Flows.




Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of U. S. Steel’s management, including the chief executive officer and chief financial officer, U. S. Steel conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, U. S. Steel’s chief executive officer and chief financial officer concluded that U. S. Steel’s disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control Over Financial Reporting

See “Item 8. Financial Statements and Supplementary Data – Management’s Reports to Stockholders – Internal Control Over Financial Reporting.”

Attestation Report of Independent Registered Public Accounting Firm

See “Item 8. Financial Statements and Supplementary Data – Report of Independent Registered Public Accounting Firm.”

Changes in Internal Control Over Financial Reporting

There have not been any changes in U. S. Steel’s internal control over financial reporting that occurred during the fourth quarter of 20192022 which have materially affected, or are reasonably likely to materially affect, U. S. Steel’s internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.


Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.
PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information concerning the directors of U. S. Steel required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Election of Directors” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, no later than 120 days after the end of the fiscal year. Information concerning the Audit Committee and its financial expert required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Corporate Governance - Board Committees – Audit Committee”Audit” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders. Information regarding the Nominating Committee required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Corporate Governance - Board Committees – Corporate Governance & Sustainability Committee”Sustainability” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders. Information regarding the ability of stockholders to communicate with the Board of Directors is incorporated and made part hereof by reference to the material appearing under the heading “Communications“Corporate Governance - Commitment to Stockholder Engagement - Communications from Stockholders and Interested Parties” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders. Information regarding compliance with Section 16(a) of the Exchange Act required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Delinquent Section 16(a) Reports” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders. Information concerning the executive officers of U. S. Steel is contained in Part I of this Form 10-K under the caption “Executive Officers of the Registrant.“Information about our Executive Officers.

U. S. Steel has adopted a Code of Ethical Business Conduct that applies to all of our directors and officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. U. S. Steel will provide a copy of this code free of charge upon request. To obtain a copy, contact the Office of the Corporate Secretary, United States Steel Corporation, 600 Grant Street, Pittsburgh, Pennsylvania, 15219-2800 (telephone: 412-433-1121). The Code of Ethical Business Conduct is also available through the Company’s website at www.ussteel.com. U. S. Steel does not intend to incorporate the contents of our website into this Annual Report on Form 10-K.

116


Item 11. EXECUTIVE COMPENSATION

Information required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Compensation & Organization Committee Report” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

Plan Category(1) Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
(2) Weighted-average
exercise price of
outstanding options,
warrants and rights
(3) Number of securities
remaining available for
future issuance under
equity compensation
plans excluding
securities reflected in
Column (1)
(b)
Equity compensation plans approved by security holders (a)
10,700,781$26.889,080,478
Equity compensation plans not approved by security holders(c)
(one for one)
Total10,700,7819,080,478
Plan Category(1) Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
(2) Weighted-average
exercise price of
outstanding options,
warrants and rights
(3) Number of securities
remaining available for
future issuance under
equity compensation
plans [excluding
securities reflected in
Column (1)]
(b)
Equity compensation plans approved by security holders (a)
6,491,060$27.087,464,779
Equity compensation plans not approved by security holders(c)
5,000(one for one)
Total6,496,0607,464,779
(a)The numbers in columns (1) and (2) of this row contemplate all shares that could potentially be issued as a result of outstanding grants under the 2005 Stock Incentive Plan and the 2016 Omnibus Incentive Compensation Plan, as amended and restated as of December 31, 2022. (For more information, see Note 15 to the Consolidated Financial Statements). Column (1) includes (i) 647,733 shares of common stock that could be issued for the Common Stock Units outstanding under the Deferred Compensation Program for Non-Employee Directors and (ii) 5,517,086 shares that could be issued for the 2,758,543 performance awards outstanding under the Long-Term Incentive Compensation Program (a program under the 2016 Omnibus Incentive Compensation Plan, as amended and restated). The calculation in column (2) does not include the Common Stock Units since the weighted average exercise price for Common Stock Units is one for one; that is, one share of common stock will be given in exchange for each unit of such phantom stock accumulated through the date of the director’s retirement. Also, the calculation in column (2) does not include the performance awards since the shares issued for performance awards can range from zero for one to two for one; that is, performance awards may result in up to 5,517,086 of common stock being issued (two for one), or some lesser number of shares (including zero shares of common stock issued), depending upon the Corporation’s common stock performance versus that of a peer group of companies or the Corporation's return on capital employed performance over a performance period.
(a)
(b)Represents shares available under the 2016 Omnibus Incentive Compensation Plan, as amended and restated.
(c)At December 31, 2022, U. S. Steel had no securities remaining for future issuance under equity compensation plans that had not been approved by security holders. Column (1) represents Common Stock Units that were issued pursuant to the Deferred Compensation Plan for Non-Employee Directors prior to its being amended to make it a program under the 2005 Stock Incentive Plan and 2016 Omnibus Incentive Compensation Plan, as amended and restated. The weighted average exercise price for Common Stock Units in column (2) is one for one; that is, one share of common stock will be given in exchange for each unit of phantom stock upon the director’s retirement from the Board of Directors. All future grants under this amended plan/program will count as shares issued under to the 2016 Omnibus Incentive Compensation Plan, as amended and restated, a stockholder approved plan.

The numbers in columns (1) and (2) of this row contemplate all shares that could potentially be issued as a result of outstanding grants under the 2005 Stock Incentive Plan and the 2016 Omnibus Incentive Compensation Plan as of December 31, 2019. (For more information, see Note 15 to the Consolidated Financial Statements. Column (1) includes (i) 463,085 shares of common stock that could be issued for the Common Stock Units outstanding under the Deferred Compensation Program for Non-Employee Directors and (ii) 2,086,320 shares that could be issued for the 1,043,160 performance awards outstanding under the Long-Term Incentive Compensation Program (a program under the 2016 Omnibus Incentive Compensation Plan). The calculation in column (2) does not include the Common Stock Units since the weighted average exercise price for Common Stock Units is one for one; that is, one share of common stock will be given in exchange for each unit of such phantom stock accumulated through the date of the director’s retirement. Also, the calculation in column (2) does not include the performance awards since the weighted average exercise price for performance awards can range from zero for one to two for one; that is, performance awards may result in up to 2,086,320 of common stock being issued (two for one), or some lesser number of shares (including zero shares of common stock issued), depending upon the Corporation’s common stock performance versus that of a peer group of companies or the Corporation's return on capital employed performance over a performance period.
(b)
Represents shares available under the 2016 Omnibus Incentive Compensation Plan.
(c)
At December 31, 2019, U. S. Steel had no securities remaining for future issuance under equity compensation plans that had not been approved by security holders. Column (1) represents Common Stock Units that were issued pursuant to the Deferred Compensation Plan for Non-Employee Directors prior to its being amended to make it a program under the 2005 Stock Incentive Plan and 2016 Omnibus Incentive Compensation Plan. The weighted average exercise price for Common Stock Units in column (2) is one for one; that is, one share of common stock will be given in exchange for each unit of phantom stock upon the director’s retirement from the Board of Directors. All future grants under this amended plan/program will count as shares issued under to the 2016 Omnibus Incentive Compensation Plan, a stockholder approved plan.

Other information required by this item is incorporated and made part hereof by reference to the material appearing under the headings “Stock Ownership of Directors and Executive Officers” and “Stock Ownership of Certain Beneficial Owners” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this item is incorporated and made part hereof by reference to the material appearing under the headings “Policy with Respect to“Corporate Governance - Related Person Transactions”Transactions Policy” and “Corporate Governance – Director Independence” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item is incorporated and made part hereof by reference to the material appearing under the heading “Audit Fees” in U. S. Steel’s Proxy Statement for the 20202023 Annual Meeting of Stockholders.

117

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

A. Documents Filed as Part of the Report

1.    Financial Statements and Supplementary Data
Financial Statements filed as part of this report are included in “Item 8 – Financial Statements and Supplementary Data” list on page F-1..

2.    Financial Statement Schedules
“ScheduleSee “Schedule II – Valuation and Qualifying Accounts and Reserves" for years ended December 31, 2019, 2018,2022, 2021, and 2017 is included on page 107.2020. All other schedules are omitted because they are not applicable or the required information is contained in the applicable financial statements or notes thereto.

B. Exhibits

Exhibit No.

2.    Plan of acquisition, reorganization, arrangement, liquidation or succession


3.    Articles of Incorporation and By-Laws
(a)Incorporated by reference to Exhibit 3.1 to United States Steel Corporation's Form 8-K filed on April 28, 2017, Commission File Number 1-16811.
(b)Incorporated by reference to Exhibit 3.1 to United States Steel Corporation's Form 8-K filed on NovemberFebruary 2, 2016,2023, Commission File Number 1-16811.

4.    Instruments Defining the Rights of Security Holders, Including Indentures
(a)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on May 22, 2007, Commission File Number 1-16811.
(b)Incorporated by reference to Exhibit 4.2 to United States Steel Corporation’s Form 8-K filed on May 22, 2007, Commission File Number 1-16811.
(c)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on March 23, 2010,February 11, 2021, Commission File Number 1-16811.
(d)Incorporated by reference to Exhibit 3.1 to United States Steel Corporation's Form 8-K filed on December 6, 2007, Commission File Number 1-16811.
(e)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on August 4, 2017, Commission File Number 1-16811.
(f)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on March 15, 2018, Commission File Number 1-16811.
(g)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on October 21, 2019, Commission File Number 1-16811.
(e)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(f)Incorporated by reference to Exhibit 4.1 to United States Steel Corporation’s Form 10-K filed on February 14, 2020, Commission File Number 1-16811.

Certain long-term debt instruments are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. U. S. Steel agrees to furnish to the Commission on request a copy of any instrument defining the rights of holders of long-term debt of U. S. Steel and of any subsidiary for which consolidated or unconsolidated financial statements are required to be filed.


118

10.    Material Contracts

(a)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended September 30, 2015, Commission File Number 1-16811.
(b)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on August 21, 2015, Commission File Number 1-16811.
(c)Incorporated by reference to Exhibit 10.7 to United States Steel Corporation’s Form 10-Q for the quarter ended September 30, 2013, Commission File Number 1-16811.
(d)Incorporated by reference to Exhibit 10(d) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2011, Commission File Number 1-16811.
(e)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation's Form 8-K filed on August 20, 2013, Commission File Number 1-16811.
(f)Incorporated by reference to Exhibit 99.5 to United States Steel Corporation’s Form 8-K filed on January 3, 2002, Commission File Number 1-16811.
(g)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended June 30, 2015, Commission File Number 1-16811.
(h)Incorporated by reference to Exhibit 10(L) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2015, Commission File Number 1-16811.
(i)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q for the quarter ended June 30, 2015, Commission File Number 1-16811.
(j)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on February 24, 2016, Commission File Number 1-16811.
(k)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on August 21, 2015, Commission File Number 1-16811.
(l)Incorporated by reference to Exhibit 10(dd) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2013, Commission File Number 1-16811.

(m)Incorporated by reference to Appendix B to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 11, 2005, Commission File Number 1-16811.
(n)Incorporated by reference to Appendix A to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 12, 2010, Commission File Number 1-16811.
(o)

Incorporated by reference to Appendix A to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 14, 2014, Commission File Number 1-16811.

(p)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on May 30, 2013, Commission File Number 1-16811.
(q)
Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on March 3, 2014, Commission File Number 1-16811.

(r)
Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2015, Commission File Number 1-16811.

(s)Incorporated by reference to Exhibit 10(x) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2006, Commission File Number 1-16811.
(t)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2011, Commission File Number 1-16811.
(u)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2011, Commission File Number 1-16811.
(v)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2011, Commission File Number 1-16811.
(w)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2011, Commission File Number 1-16811.
(x)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 8-K filed on July 2, 2012, Commission File Number 1-16811.

(y)

Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2015, Commission File Number 1-16811.
(z)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2015, Commission File Number 1-16811.
(aa)Incorporated by reference to Appendix B to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 12, 2010, Commission File Number 1-16811.
(bb)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on January 31, 2014, Commission File Number 1-16811.
(cc)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2015, Commission File Number 1-16811.
(dd)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on November 6, 2015, Commission File Number 1-16811.
(ee)
Incorporated by reference to Exhibit 10(kk) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2015, Commission File Number 1-16811.

(ff)
Incorporated by reference to Exhibit 10(ll) to United States Steel Corporation’s Form 10-K for the year ended December 31, 2015, Commission File Number 1-16811.

(gg)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended March 31, 2016, Commission File Number 1-16811.
(hh)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended June 30, 2016, Commission File Number 1-16811.
(ii)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q for the quarter ended June 30, 2016, Commission File Number 1-16811.
(jj)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q for the quarter ended June 30, 2016, Commission File Number 1-16811.

(kk)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q for the quarter ended September 30, 2016, Commission File Number 1-16811.
(ll)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q for the quarter ended September 30, 2016, Commission File Number 1-16811.
(mm)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q for the quarter ended September 30, 2016, Commission File Number 1-16811.
(nn)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 26, 2017, Commission File Number 1-16811.
(oo)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on March 2, 2018, Commission File Number 1-16811.
(pp)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on March 2, 2018, Commission File Number 1-16811.
(qq)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 8-K filed on March 2, 2018, Commission File Number 1-16811.
(rr)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on March 15, 2018, Commission File Number 1-16811.
(ss)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(tt)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(uu)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(vv)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.

(ww)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(xx)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on October 2, 2018, Commission File Number 1-16811.
(yy)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(zz)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(aaa)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(bbb)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(ccc)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(ddd)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(eee)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(fff)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(ggg)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.

(hhh)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(iii)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on October 1, 2019, Commission File Number 1-16811.
(jjj)(b)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on October 1, 2019, Commission File Number 1-16811.
(kkk)(c)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on October 21, 2019,April 30, 2020, Commission File Number 1-16811.
(lll)(d)FifthIncorporated by reference to Exhibit 1.1 to United States Steel Corporation’s Form 8-K filed on February 11, 2021, Commission File Number 1-16811.
(e)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on June 8, 2021, Commission File Number 1-16811.
(f)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(g)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on October 28, 2019,June 3, 2022, Commission File Number 1-16811.
(mmm)(h)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on October 28, 2019,June 3, 2022, Commission File Number 1-16811.
(nnn)(i)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 8-K filed on October 28, 2019,June 3, 2022, Commission File Number 1-16811.
(ooo)(j)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 8-K filed on June 3, 2022, Commission File Number 1-16811.
(k)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 8-K filed on October 28, 2019, Commission File Number 1-16811.
(ppp)(l)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 8-K filed on October 28, 2019, Commission File Number 1-16811.
(qqq)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on December 23, 2019, Commission File Number 1-16811.

4.1(m)
10.1.
10.2
10.3
10.4Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-K filed on February 14, 2020, Commission File Number 1-16811.
21.(n)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-K filed on February 12, 2021, Commission File Number 1-16811.
(o)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on November 24, 2020, Commission File Number 1-16811.
119

(p)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on November 24, 2020, Commission File Number 1-16811.
(q)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(r)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(s)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on July 30, 2021, Commission File Number 1-16811.
(t)Incorporated by reference to Exhibit 10.2.1 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(u)Incorporated by reference to Exhibit 10.2.2 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(v)Incorporated by reference to Exhibit 10.3.1 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(w)Incorporated by reference to Exhibit 10.3.2 to United States Steel Corporation’s Form 8-K filed on January 19, 2021, Commission File Number 1-16811.
(x)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on October 28, 2022, Commission File Number 1-16811.
(y)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on October 1, 2021, Commission File Number 1-16811.
(z)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(aa)Incorporated by reference to Appendix B to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 11, 2005, Commission File Number 1-16811.
(bb)Incorporated by reference to Appendix A to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 12, 2010, Commission File Number 1-16811.
120

(cc)

Incorporated by reference to Appendix A to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 14, 2014, Commission File Number 1-16811.
(dd)Incorporated by reference to Exhibit 10(x) to United States Steel Corporation’s Form 10-K filed on February 27, 2007, Commission File Number 1-16811.
(ee)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 26, 2011, Commission File Number 1-16811.
(ff)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 26, 2011, Commission File Number 1-16811.
(gg)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on April 26, 2011, Commission File Number 1-16811
(hh)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on April 26, 2011, Commission File Number 1-16811.
(ii)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 8-K filed on July 2, 2012, Commission File Number 1-16811.
(jj)

Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 29, 2015, Commission File Number 1-16811.
(kk)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on May 30, 2013, Commission File Number 1-16811.
(ll)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on March 3, 2014, Commission File Number 1-16811.
(mm)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 29, 2015, Commission File Number 1-16811.
(nn)Incorporated by reference to Exhibit 10(kk) to United States Steel Corporation’s Form 10-K filed on February 29, 2016, Commission File Number 1-16811.
(oo)Incorporated by reference to Exhibit 10(d) to United States Steel Corporation’s Form 10-K filed on February 28, 2012, Commission File Number 1-16811.
(pp)Incorporated by reference to Appendix B to United States Steel Corporation’s Definitive Proxy Statement on Schedule 14A filed on March 12, 2010, Commission File Number 1-16811.
(qq)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 29, 2015, Commission File Number 1-16811.
121

(rr)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on January 31, 2014, Commission File Number 1-16811.
(ss)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on April 29, 2015, Commission File Number 1-16811.
(tt)Incorporated by reference to Exhibit 10(ll) to United States Steel Corporation’s Form 10-K filed on February 29, 2016, Commission File Number 1-16811.
(uu)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on November 2, 2016, Commission File Number 1-16811.
(vv)Incorporated by reference to Exhibit 10.7 to United States Steel Corporation’s Form 10-Q filed on October 29, 2013, Commission File Number 1-16811.
(ww)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on November 2, 2016, Commission File Number 1-16811.
(xx)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(yy)Incorporated by reference to Exhibit 10(dd) to United States Steel Corporation’s Form 10-K filed on February 25, 2014, Commission File Number 1-16811.
(zz)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on November 2, 2016, Commission File Number 1-16811.
(aaa)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(bbb)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on August 21, 2015, Commission File Number 1-16811.
(ccc)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 8-K filed on August 21, 2015, Commission File Number 1-16811.
(ddd)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on November 4, 2015, Commission File Number 1-16811.
(eee)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(fff)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on November 6, 2015, Commission File Number 1-16811.
(ggg)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on July 30, 2020, Commission File Number 1-16811.
(hhh)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on December 20, 2021, Commission File Number 1-16811.
(iii)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 27, 2016, Commission File Number 1-16811.
122

(jjj)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 26, 2017, Commission File Number 1-16811.
(kkk)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 8-K filed on May 1, 2020, Commission File Number 1-16811.
(lll)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(mmm)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on July 27, 2016, Commission File Number 1-16811.
(nnn)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on July 27, 2016, Commission File Number 1-16811
(ooo)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on July 27, 2016, Commission File Number 1-16811.
(ppp)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(qqq)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(rrr)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(sss)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(ttt)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(uuu)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on May 1, 2020, Commission File Number 1-16811.
(vvv)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on May 1, 2020, Commission File Number 1-16811.
(www)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(xxx)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(yyy)Incorporated by reference to Exhibit 10.6 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(zzz)Incorporated by reference to Exhibit 10.7 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(yyy)Incorporated by reference to Exhibit 10.8 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(aaaa)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(bbbb)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
123

(cccc)Incorporated by reference to Exhibit 10.6 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(dddd)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on April 29, 2022, Commission File Number 1-16811.
(eeee)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on April 29, 2022, Commission File Number 1-16811.
(ffff)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on April 27, 2018, Commission File Number 1-16811.
(gggg)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-Q filed on May 3, 2019, Commission File Number 1-16811.
(hhhh)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-Q filed on May 1, 2020, Commission File Number 1-16811.
(iiii)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 30, 2021, Commission File Number 1-16811.
(jjjj)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-K filed on February 15, 2019, Commission File Number 1-16811.
(kkkk)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-K filed on February 14, 2020, Commission File Number 1-16811.
(llll)Incorporated by reference to Exhibit 10.7 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(mmmm)Incorporated by reference to Exhibit 10.2 to United States Steel Corporation’s Form 10-K filed on February 14, 2020, Commission File Number 1-16811.
(nnnn)Incorporated by reference to Exhibit 10.8 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(oooo)Incorporated by reference to Exhibit 10.4 to United States Steel Corporation’s Form 10-K filed on February 12, 2021, Commission File Number 1-16811.
(pppp)Incorporated by reference to Exhibit 10.3 to United States Steel Corporation’s Form 10-K filed on February 14, 2020, Commission File Number 1-16811.
(qqqq)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-K filed on February 12, 2021, Commission File Number 1-16811.
(rrrr)Incorporated by reference to Exhibit 10.9 to United States Steel Corporation’s Form 10-K filed on February 11, 2022, Commission File Number 1-16811.
(ssss)Incorporated by reference to Exhibit 10.1 to United States Steel Corporation’s Form 10-Q filed on April 29, 2022, Commission File Number 1-16811.
124

(tttt)Incorporated by reference to Exhibit 10.5 to United States Steel Corporation’s Form 10-Q filed on July 29, 2022, Commission File Number 1-16811.

125

Amendment No. 1 to Sixth Amended and Restated Credit Agreement, dated as of December 19, 2022, among United States Steel Corporation, the Subsidiary Guarantors from time to time party thereto, the Lenders party thereto, the LC Issuing Banks party thereto, and JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent.**
Third Amendment to ABL Credit Agreement by and among Big River Steel LLC, BRS Intermediate Holdings LLC, Goldman Sachs Bank USA and each lender party thereto, dated as of December 19, 2022.**
First Supplemental Agreement, dated December 15, 2022, between U. S. Steel Košice, s.r.o., and ING Bank N.V., as Facility Agent, relating to an up to EUR 300,000,000 credit agreement dated September 29, 2021.**
List of Subsidiaries
23.
24.
31.1.
31.2.
32.1.
32.2.
95.
101.101The following financial information from United States Steel Corporation's Annual Report on Form 10-K for the year ended December 31, 20192022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Consolidated Statement of Operations, (ii) the Consolidated Statement of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheet, (iv) the Consolidated Statement of Cash Flows, and (v) Notes to the Consolidated Financial Statements.
104.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Portions of the exhibit have been omitted pursuant to a request for confidential treatment
** Indicates management contract or compensatory plan or arrangement.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017
(Millions** Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Dollars)

Regulation S-K. The Corporation hereby undertakes to furnish supplemental copies of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission.
    Additions Deductions  
Description Balance at
Beginning
of Period
 Charged to
Costs and
Expenses
 Charged
to Other
Accounts
 Charged to
Costs and
Expenses
 Charged
to Other
Accounts
 Balance 
at End
of Period
Year ended December 31, 2019:            
Reserves deducted in the balance sheet from the assets to which they apply:            
Allowance for doubtful accounts $29
 $
 $
 $
 $1
 $28
Investments and long-term receivables reserve 5
 
 
 
 
 5
Deferred tax valuation allowance:            
Domestic 211
 349
 
 
 
 560
Foreign 3
 
 
 
 
 3
Year ended December 31, 2018:            
Reserves deducted in the balance sheet from the assets to which they apply:            
Allowance for doubtful accounts $28
 $5
 $
 $
 $4
 $29
Investments and long-term receivables reserve 11
 
 
 
 6
 5
Deferred tax valuation allowance:            
Domestic 604
 
 
 393
 
 211
Foreign 4
 
 
 1
 
 3
Year ended December 31, 2017:            
Reserves deducted in the balance sheet from the assets to which they apply:            
Allowance for doubtful accounts $25
 $2
 $2
 $
 $1
 $28
Allowance for related party doubtful accounts 265
 
 
 
 265
 
Investments and long-term receivables reserve 10
 
 1
 
 
 11
Long-term receivables from related parties reserve 1,627
 
 
 
 1,627
 
Deferred tax valuation allowance:            
Domestic 1,109
 42
 
 373
 174
 604
Foreign 4
 
 
 
 
 4
126

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020
(millions of dollars)
AdditionsDeductions
DescriptionBalance at
Beginning
of Period
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Balance 
at End
of Period
Year ended December 31, 2022:
Reserves deducted in the balance sheet from the assets to which they apply:
Allowance for doubtful accounts$44 $17 $ $ $23 $38 
Investments and long-term receivables reserve4     4 
Deferred tax valuation allowance:
Domestic159 18  61  116 
Foreign3     3 
Year ended December 31, 2021:
Reserves deducted in the balance sheet from the assets to which they apply:
Allowance for doubtful accounts$34 $16 $$— $10 $44 
Investments and long-term receivables reserve— — — 
Deferred tax valuation allowance:
Domestic793 86 25 745 — 159 
Foreign— — — — 
Year ended December 31, 2020:
Reserves deducted in the balance sheet from the assets to which they apply:
Allowance for doubtful accounts$28 $$$— $$34 
Investments and long-term receivables reserve— — 
Deferred tax valuation allowance:
Domestic560 240 — 793 
Foreign— — — — 





Item 16. FORM 10-K SUMMARY

None.



127

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 14, 20203, 2023

UNITED STATES STEEL CORPORATION

By:/s/ Manpreet S. Grewal
Manpreet S. Grewal
Vice President, Controller & Chief Accounting Officer
SignatureTitle
/s/ David B. BurrittPresident & Chief Executive Officer & Director
David B. Burritt(Principal Executive Officer)
/s/ Jessica T. GrazianoSenior Vice President & Chief Financial Officer
Jessica T. Graziano(Principal Financial Officer)
/s/ Manpreet S. GrewalVice President, Controller & Chief Accounting Officer
Manpreet S. Grewal(Principal Accounting Officer)
By:*/s/ Kimberly D. FastDirector
Tracy A. AtkinsonKimberly D. Fast
Acting Controller
Signature*TitleDirector
Andrea J. Ayers
/s/ David B. BurrittPresident & Chief Executive Officer & Director
David B. Burritt*(Principal Executive Officer)Director
Terry L. Dunlap
/s/ Christine S. BrevesSenior Vice President & Chief Financial Officer
Christine S. Breves*(Principal Financial Officer)Director
/s/ Kimberly D. FastActing Controller
Kimberly D. Fast(Principal Accounting Officer)
*Director
Patricia Diaz Dennis
*Director
Dan O. Dinges
*Director
John J. Engel
*Director
John V. Faraci
*Director
Murry S. Gerber
*Director
Stephen J. GirskyJeh C. Johnson
*Director
Paul A. Mascarenas
*Director
Michael H. McGarry
*DirectorBoard Chair
Eugene B. Sperling
*Chairman of the Board
David S. Sutherland
*Director
Patricia A. Tracey

*
BBY:Y:
/s/ Kimberly D. FastManpreet S. Grewal
Kimberly D. FastManpreet S. Grewal
Attorney-in-Fact

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GLOSSARY OF CERTAIN DEFINED TERMS

The following definitions apply to terms used in this document:

2019 Environmental Revenue Bondstwo series of environmental revenue bonds that will mature between 2024 and 2049
2026 Senior Convertible NotesSenior Convertible Notes due November 1, 2026
2052 ADFA Green BondsArkansas Development Finance Authority Environmental Improvement Revenue Bonds due 2052
401(k) plansdefined contribution plans
ABOABLAsset-Based Loan
ABOAccumulated Benefit Obligation
ACHDAllegheny County Health Department
ADantidumping
AHSSAD/CVDantidumping and countervailing duty
ADFAArkansas Development Finance Authority
AHSSadvanced high-strength steelssteel
AMTAISIAlternative Minimum TaxAmerican Iron and Steel Institute
AOCIAccumulated Other Comprehensive Income
AROAsset Retirement Obligation
ASCARPAAmerican Rescue Plan Act
ASCAccounting Standards Codification
ASUAccounting Standards Update
BARTBest Available Retrofit Technology
BATBest Available Technique
BGEBig River Steel ABL FacilityButch Gilliam Enterprises, Inc.Big River Steel amended senior secured asset-based revolving credit facility
BOFBasic Oxygen Furnace Steelmaking
CAABOPBasic Oxygen Process
BR2Big River 2
BRSBig River Steel
CAAClean Air Act
CADCAFCCanadian dollars
CAFCU.S. Court of Appeals for the Federal Circuit
CAFECorporate Average Fuel Economy
CALCAMTcontinuous annealing linecorporate alternative minimum tax
CAMUCorrective Action Management Unit
CDCChrome Deposit Corporation
CERCLAComprehensive Environmental Response, Compensation and Liability Act
CGLCITcontinuous galvanizing line
CITU.S. Court of International Trade
CMSCorrective MeasureMeasures Study
CO2CNITcarbon dioxidecorporate net income tax
COSOCO2carbon dioxide
commodity purchase swapsfinancial swaps associated with purchases of natural gas, zinc, tin and electricity
COSOCommittee of Sponsoring Organizations of the Treadway Commission
CVDcost capcountervailing dutiesper capita dollar maximum the company is expected to pay per participant under the main U. S. Steel benefit plan
CWACredit Facility AgreementSixth Amended and Restated Credit Facility Agreement
CVDcountervailing duties
CWAClean Water Act
DECDAFWDepartment of Environmental ConservationOSHA Days Away From Work
DESCODOCDouble Eagle Steel Coating Company
DOCU.S. Department of Commerce
DOJThe United States Department of Justice
Double GDouble G Coatings Company LLC
EAFDRdirect reduced
DRIdirect reduced iron
EAFElectric Arc Furnace
EBITDAearnings before interest, taxes, depreciation and amortization
ECEuropean Commission
ECAExport Credit Agreement
ECTEGUEast Chicago Tinelectric generating unit
EGLEEPSEnvironment, Great Lakes and Energyearnings per share
ERISAERGsemployee resource groups
ERISAEmployee Retirement Income Security Act of 1974
ERWelectric resistance welded
ETSEmissions Trading System
EUEuropean Union
EUAEuropean Union Allowances
FASBFinancial Accounting Standards Board
FIFOfirst in, first out

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ESGenvironmental, social and governance
ETSEmissions Trading System
EUEuropean Union
EU ETSEU Emissions Trading System
EUAEuropean Union Emission Allowances
EWPMelectric-weld pipe mil
Export-Import Credit AgreementExport-Import Transaction Specific Loan and Security Agreement
FASBFinancial Accounting Standards Board
FIFOfirst in, first out
FIPFederal Implementation Plan
Fifth Credit Facility Agreement$2.0 billion five-year senior secured asset-based revolving credit facilityFifth Amended and Restated Credit Facility Agreement
FIPFlat-RolledFederal Implementation Plan
Flat-RolledNorth American Flat-Rolled segment
FPCforeign exchange forwardsFeralloy Processing Companyforeign exchange forward sales contracts
FXforeign exchange
GBCGAAPgeneral business creditsGenerally Accepted Accounting Principles
GDPRGatewayGeneral Data Protection RegulationGateway Energy and Coke Company LLC
GHGGEN3greenhouse gasgeneration 3
GLNPOGHGgreenhouse gas
GLNPOGreat Lakes National Program Office
HDCGreen Steelssteels made with low greenhouse gas emissions intensity
HBIhot briquetted iron
HDCHibbing Development Company
HibbingHibbing Taconite Company
IEPAIllinois Environmental Protection Agency
IMIRSinterim measures
IRSInternal Revenue Service
ISOInternational Organization for Standardization
ITCU.S. International Trade Commission
KDHEKansas Department of Health & Environment
KeetacU. S. Steel’s iron ore operations at Keewatin, Minnesota
LIFOlast in, first out
LMFMACTladle metallurgy facility
MACTMaximum Achievable Control Technology
MidwestMidwest Plant
MinntacU. S. Steel’s iron ore operations at Mt. Iron, Minnesota
MPCAmmbtusMetric Million British Thermal Units
mntthousand net tons
MPCAMinnesota Pollution Control Agency
NAAQSNational Ambient Air Quality Standards
NAVnet asset value
NESHAPNational Emission Standards for Hazardous Air Pollutants
NFRNGONo Further Remediationnon-grain oriented
NGONOVnon-grain oriented
non-GAAPNon-Generally Accepted Accounting Principles
NOVNotice of Violation
NOxnitrogen oxide
O.D.NPDESouter diameterNational Pollutant Discharge Elimination System
OCTGoil country tubular goods
OEPAOEMOhio Environmental Protection Agencyoriginal equipment manufacturer
OPEBOrderother post-employment benefitsAdministrative Order on Consent
Other Benefitsdefined benefit retiree health care and life insurance plans
PADEPPatriotPennsylvania Department of Environmental Protection
PATH ActProtecting Americans from Tax Hikes Act
PatriotPatriot Premium Threading Services, LLC
PBGCPCAOBPension Benefit Guarantee Corporation
PBOProjected Benefit Obligations
PCAOBPublic Company Accounting Oversight Board (United States)
PIIPersonally Identifiable Information
PMParticulate Matter
POSCALPPAPOSCO-California Corporation, a subsidiary of POSCO
PPAPension Protection Act of 2006
ppbparts per billion
PRO-TECPRO-TEC Coating Company, U. S. Steel and Kobe Steel Ltd. joint venture
PRPpotentially responsible party
PSUPerformance Share AwardsPerformance-based restricted Stock Unit
RCRAResource Conservation and Recovery Act
RFIRCRA Facility Investigation
ROCEReturn On Capital Employed

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RPRFIRehabilitation planRCRA Facility Investigation
RSUROCEReturn On Capital Employed
RPRehabilitation plan
RSURestricted Stock UnitsUnit
RTRS&PResidual Risk and Technology Review
S&P’sStandard & Poor’s
SECsales swapsfinancial swaps hot-rolled coil and iron ore pellet sales
SAOSettlement Agreement and Order
SECSecurities and Exchange Commission
SIPState Implementation Plan
SOSO22
Sulfur dioxide
SPTSteelworkers Pension Trust
SSBSSSSalomon Smith Barney Holdings, Inc.site-specific standard
SWMUStelcoStelco Inc.
sustainable steelssteels made with low greenhouse gas emissions
SWMUSolid Waste Management Units
the 20182005 Plan2005 Stock Incentive Plan
the 2022 Labor Agreementscollective bargaining agreements with United Steelworkers effective September 1, 20182022
the Committeethe Compensation & Organization Committee of the Board of Directors
the "Company"United States Steel Corporation and its subsidiaries
the Exchange Actthe Securities Exchange Act of 1934
the "Insurers"Banner Life Insurance Company and William Penn Life Insurance Company of New York
the insurerPacific Life Insurance Company
the Minntac Mineiron ore mine located in Mt. Iron, Minnesota
the Omnibus Plan2016 Omnibus Incentive Compensation Plan, as amended and restated
the USSK Credit AgreementUSSK €460€300 million revolvingunsecured sustainability linked credit facilityagreement
TildenTRQTilden Mining Company, L.C.
TRQtariff rate quotas
TSRTranstarTranstar LLC and its direct and indirect subsidiaries
TSRTotal Shareholder Return
TubularTubular Products segment
U. S. SteelUnited States Steel Corporation
U.S. EPAUnited States Environmental Protection Agency
U.S. GAAPaccounting standards generally accepted in the United States
UDEQUtah Department of Environmental Quality
ug/m3micrograms per cubic meter
UPIUKUSS-POSCO Industries, U. S. Steel and POSCO joint ventureUnited Kingdom
USDUPIU.S. dollarsUSS-POSCO Industries
USSCUSSEU. S. Steel Canada Inc.
USSEU. S. Steel Europe segment
USSKU. S. Steel Košice
USSTPU. S. Steel Tubular Products LLC
USWUSTRUnited SteelworkersStates Trade Representative
WorthingtonUSWUnited Steelworkers
USXUnited States Steel Corporation
VEBAtrusts for retiree healthcare and life insurance
VERPvoluntary early retirement program
weldedseamless and electric resistance welded
WorthingtonWorthington Specialty Processing, U. S. Steel and Worthington Industries, Inc. joint venture
WTOWOTUSWaters of the United States
WTOWorld Trade Organization
WQSwater quality standard

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