UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 20202021
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 number1-16811
x-20210630_g1.jpg
United States Steel Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-16811 25-1897152
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
600 Grant Street,Pittsburgh,PA 15219-2800
(Address of principal executive offices) (Zip Code)
(412) 433-1121
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
United States Steel Corporation Common StockXNew York Stock Exchange
United States Steel Corporation Common StockXChicago Stock Exchange
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 the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller 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.o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No x
Common stock outstanding at July 27, 202026, 2021220,400,813270,128,597 shares



INDEX
Page
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements:
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2
Item 3
Item 4.
Item 5.
Item 6.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains information that may constitute ”forward-looking“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,"“should,” “will,” "may" and similar expressions or by using future dates in connection with any discussion of, among other things, operating 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's future ability or plansanticipated disruptions to take ownershipour operations and industry due to the COVID-19 pandemic, changes in global supply and demand conditions and prices for our products, international trade duties and other aspects of international trade policy, the integration of Big River Steel joint venture as a wholly owned subsidiary,in our existing business, business strategies related to the combined business 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 and in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, our Quarterly Report on Form 10-Q for the period ended March 31, 2020 and those described from time to time in our future reports filed with the Securities and Exchange Commission.

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





UNITED STATES STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions, except per share amounts)2020201920202019
Net sales:
Net sales$2,000  $3,175  $4,397  $6,299  
Net sales to related parties (Note 19)91  370  442  745  
Total (Note 6)2,091  3,545  4,839  7,044  
Operating expenses (income):
Cost of sales (excludes items shown below)2,274  3,227  4,879  6,399  
Selling, general and administrative expenses62  82  134  160  
Depreciation, depletion and amortization159  150  319  293  
Loss (earnings) from investees39  (28) 47  (37) 
Tubular asset impairment charges (Notes 1 and 9)—  —  263  —  
Gain on equity investee transactions—  —  (31) —  
Restructuring and other charges (Note 20)89  —  130  —  
Net loss on sale of assets—  —  —   
Other losses, net—  (1)  (1) 
Total2,623  3,430  5,746  6,818  
(Loss) earnings before interest and income taxes(532) 115  (907) 226  
Interest expense64  31  114  65  
Interest income(1) (5) (5) (10) 
Other financial benefits    
Net periodic benefit (income) cost (other than service cost)(8) 23  (16) 46  
     Net interest and other financial costs62  54  97  103  
(Loss) earnings before income taxes(594) 61  (1,004) 123  
Income tax (benefit) provision (Note 12)(5) (7) (24)  
Net (loss) earnings(589) 68  (980) 122  
Less: Net earnings attributable to noncontrolling interests—  —  —  —  
Net (loss) earnings attributable to United States Steel Corporation$(589) $68  $(980) $122  
(Loss) earnings per common share (Note 13):
(Loss) earnings per share attributable to United States Steel Corporation stockholders:
-Basic$(3.36) $0.39  $(5.67) $0.71  
-Diluted$(3.36) $0.39  $(5.67) $0.70  





Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions, except per share amounts)2021202020212020
Net sales:
Net sales$4,684 $2,000 $8,053 $4,397 
Net sales to related parties (Note 19)341 91 636 442 
Total (Note 6)5,025 2,091 8,689 4,839 
Operating expenses (income):
Cost of sales3,678 2,274 6,752 4,879 
Selling, general and administrative expenses106 62 208 134 
Depreciation, depletion and amortization202 159 391 319 
(Earnings) loss from investees(35)39 (49)47 
Asset impairment charges (Note 1)28 28 263 
Gain on equity investee transactions (Note 5)0 (111)(31)
Restructuring and other charges (Note 20)31 89 37 130 
Net gain on sale of assets(15)(15)
Other (gains) losses, net(4)(11)
Total3,991 2,623 7,230 5,746 
Earnings (loss) before interest and income taxes1,034 (532)1,459 (907)
Interest expense84 64 176 114 
Interest income(1)(1)(2)(5)
Loss on debt extinguishment1 256 
Other financial costs4 22 
Net periodic benefit income(29)(8)(60)(16)
     Net interest and other financial costs59 62 392 97 
Earnings (loss) before income taxes975 (594)1,067 (1,004)
Income tax benefit (Note 12)(37)(5)(36)(24)
Net earnings (loss)1,012 (589)1,103 (980)
Less: Net earnings attributable to noncontrolling interests0 0 
Net earnings (loss) attributable to United States Steel Corporation$1,012 $(589)$1,103 $(980)
Earnings (loss) per common share (Note 13):
Earnings (loss) per share attributable to United States Steel Corporation stockholders:
-Basic$3.75 $(3.36)$4.25 $(5.67)
-Diluted$3.53 $(3.36)$4.02 $(5.67)
The accompanying notes are an integral part of these condensed consolidated financial statements.
-1-


UNITED STATES STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2020201920202019
Net (loss) earnings$(589) $68  $(980) $122  
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments20  12  (3) (5) 
Changes in pension and other employee benefit accounts29  32  81  64  
Changes in derivative financial instruments15  (11) 10   
Total other comprehensive income, net of tax64  33  88  63  
Comprehensive (loss) income including noncontrolling interest(525) 101  (892) 185  
Comprehensive income attributable to noncontrolling interest—  —  —  —  
Comprehensive (loss) income attributable to United States Steel
Corporation
$(525) $101  $(892) $185  




































Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)2021202020212020
Net earnings (loss)$1,012 $(589)$1,103 $(980)
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments23 20 (24)(3)
Changes in pension and other employee benefit accounts205 29 229 81 
Changes in derivative financial instruments(31)15 (51)10 
Total other comprehensive income, net of tax197 64 154 88 
Comprehensive income (loss) including noncontrolling interest1,209 (525)1,257 (892)
Comprehensive income attributable to noncontrolling interest0 0 
Comprehensive income (loss) attributable to United States Steel
Corporation
$1,209 $(525)$1,257 $(892)
The accompanying notes are an integral part of these condensed consolidated financial statements.
-2-


UNITED STATES STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in millions)(Dollars in millions)June 30, 2020December 31, 2019(Dollars in millions)June 30, 2021December 31, 2020
AssetsAssetsAssets
Current assets:Current assets:Current assets:
Cash and cash equivalents (Note 7)Cash and cash equivalents (Note 7)$2,300  $749  Cash and cash equivalents (Note 7)$1,329 $1,985 
Receivables, less allowance of $34 and $28879  956  
Receivables, less allowance of $43 and $34Receivables, less allowance of $43 and $341,903 914 
Receivables from related parties (Note 19)Receivables from related parties (Note 19)60  221  Receivables from related parties (Note 19)107 80 
Inventories (Note 8)Inventories (Note 8)1,634  1,785  Inventories (Note 8)1,914 1,402 
Assets held for saleAssets held for sale154 
Other current assetsOther current assets51  102  Other current assets231 51 
Total current assetsTotal current assets4,924  3,813  Total current assets5,638 4,432 
Long-term restricted cash (Note 7)Long-term restricted cash (Note 7)128  188  Long-term restricted cash (Note 7)95 130 
Operating lease assetsOperating lease assets236  230  Operating lease assets192 214 
Property, plant and equipmentProperty, plant and equipment17,269  17,077  Property, plant and equipment19,757 17,704 
Less accumulated depreciation and depletionLess accumulated depreciation and depletion11,859  11,630  Less accumulated depreciation and depletion12,382 12,260 
Total property, plant and equipment, netTotal property, plant and equipment, net5,410  5,447  Total property, plant and equipment, net7,375 5,444 
Investments and long-term receivables, less allowance of $8 and $51,376  1,466  
Intangibles – net (Note 9)132  150  
Investments and long-term receivables, less allowance of $4 and $5Investments and long-term receivables, less allowance of $4 and $5572 1,177 
Intangibles, net (Note 9)Intangibles, net (Note 9)533 129 
Deferred income tax benefits (Note 12)Deferred income tax benefits (Note 12)19  19  Deferred income tax benefits (Note 12)44 22 
Goodwill (Note 9)Goodwill (Note 9)909 
Other noncurrent assetsOther noncurrent assets326  295  Other noncurrent assets726 507 
Total assetsTotal assets$12,551  $11,608  Total assets$16,084 $12,059 
LiabilitiesLiabilitiesLiabilities
Current liabilities:Current liabilities:Current liabilities:
Accounts payable and other accrued liabilitiesAccounts payable and other accrued liabilities$1,385  $1,970  Accounts payable and other accrued liabilities$2,675 $1,779 
Accounts payable to related parties (Note 19)Accounts payable to related parties (Note 19)74  84  Accounts payable to related parties (Note 19)144 105 
Payroll and benefits payablePayroll and benefits payable354  336  Payroll and benefits payable425 308 
Accrued taxesAccrued taxes116  116  Accrued taxes208 154 
Accrued interestAccrued interest60  45  Accrued interest100 59 
Current operating lease liabilitiesCurrent operating lease liabilities58  60  Current operating lease liabilities56 59 
Current portion of long-term debt (Note 15)94  14  
Short-term debt and current maturities of long-term debt (Note 15)Short-term debt and current maturities of long-term debt (Note 15)763 192 
Liabilities held for saleLiabilities held for sale80 
Total current liabilitiesTotal current liabilities2,141  2,625  Total current liabilities4,451 2,656 
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities185  177  Noncurrent operating lease liabilities145 163 
Long-term debt, less unamortized discount and debt issuance costs (Note 15)Long-term debt, less unamortized discount and debt issuance costs (Note 15)5,505  3,627  Long-term debt, less unamortized discount and debt issuance costs (Note 15)4,803 4,695 
Employee benefitsEmployee benefits563  532  Employee benefits208 322 
Deferred income tax liabilities (Note 12)Deferred income tax liabilities (Note 12)  Deferred income tax liabilities (Note 12)46 11 
Deferred credits and other noncurrent liabilitiesDeferred credits and other noncurrent liabilities497  550  Deferred credits and other noncurrent liabilities488 333 
Total liabilitiesTotal liabilities8,897  7,515  Total liabilities10,141 8,180 
Contingencies and commitments (Note 21)Contingencies and commitments (Note 21)Contingencies and commitments (Note 21)00
Stockholders’ Equity (Note 17):Stockholders’ Equity (Note 17):Stockholders’ Equity (Note 17):
Common stock (229,052,239 and 178,555,206 shares issued) (Note 13)229  179  
Treasury stock, at cost (8,661,462 shares and 8,509,337 shares)(175) (173) 
Common stock (279,242,676 and 229,105,589 shares issued) (Note 13)Common stock (279,242,676 and 229,105,589 shares issued) (Note 13)279 229 
Treasury stock, at cost (9,118,582 shares and 8,673,131 shares)Treasury stock, at cost (9,118,582 shares and 8,673,131 shares)(183)(175)
Additional paid-in capitalAdditional paid-in capital4,391  4,020  Additional paid-in capital5,168 4,402 
(Accumulated deficit) retained earnings(438) 544  
Accumulated other comprehensive loss (Note 18)(390) (478) 
Retained earnings (accumulated deficit)Retained earnings (accumulated deficit)480 (623)
Accumulated other comprehensive income (loss) (Note 18)Accumulated other comprehensive income (loss) (Note 18)107 (47)
Total United States Steel Corporation stockholders’ equityTotal United States Steel Corporation stockholders’ equity3,617  4,092  Total United States Steel Corporation stockholders’ equity5,851 3,786 
Noncontrolling interestsNoncontrolling interests37   Noncontrolling interests92 93 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$12,551  $11,608  Total liabilities and stockholders’ equity$16,084 $12,059 
The accompanying notes are an integral part of these condensed consolidated financial statements.
-3-


UNITED STATES STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,Six Months Ended June 30,
(Dollars in millions)(Dollars in millions)20202019(Dollars in millions)20212020
Increase (decrease) in cash, cash equivalents and restricted cashIncrease (decrease) in cash, cash equivalents and restricted cashIncrease (decrease) in cash, cash equivalents and restricted cash
Operating activities:Operating activities:Operating activities:
Net (loss) earnings$(980) $122  
Net earnings (loss)Net earnings (loss)$1,103 $(980)
Adjustments to reconcile to net cash provided by operating activities:Adjustments to reconcile to net cash provided by operating activities:Adjustments to reconcile to net cash provided by operating activities:
Depreciation, depletion and amortizationDepreciation, depletion and amortization319  293  Depreciation, depletion and amortization391 319 
Tubular asset impairment charges (Notes 1 and 9)263  —  
Asset impairment charges (Note 1)Asset impairment charges (Note 1)28 263 
Gain on equity investee transactionsGain on equity investee transactions(31) —  Gain on equity investee transactions(111)(31)
Restructuring and other charges (Note 20)Restructuring and other charges (Note 20)130  —  Restructuring and other charges (Note 20)37 130 
Loss on debt extinguishmentLoss on debt extinguishment256 
Pensions and other postretirement benefitsPensions and other postretirement benefits(10) 55  Pensions and other postretirement benefits(46)(10)
Deferred income taxes (Note 12)Deferred income taxes (Note 12)(12) (3) Deferred income taxes (Note 12)(77)(12)
Net loss on sale of assets—   
Equity investee earnings, net of distributions received47  (35) 
Net gain on sale of assetsNet gain on sale of assets(15)
Equity investee (earnings) loss, net of distributions receivedEquity investee (earnings) loss, net of distributions received(49)47 
Changes in:Changes in:Changes in:
Current receivablesCurrent receivables134  (28) Current receivables(875)134 
InventoriesInventories244  (77) Inventories(343)244 
Current accounts payable and accrued expensesCurrent accounts payable and accrued expenses(420) (28) Current accounts payable and accrued expenses789 (420)
Income taxes receivable/payableIncome taxes receivable/payable10  39  Income taxes receivable/payable47 10 
All other, netAll other, net(56) 24  All other, net(32)(56)
Net cash (used in) provided by operating activities(362) 366  
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities1,103 (362)
Investing activities:Investing activities:Investing activities:
Capital expendituresCapital expenditures(455) (628) Capital expenditures(284)(455)
Acquisition of Big River Steel, net of cash acquired (Note 5)Acquisition of Big River Steel, net of cash acquired (Note 5)(625)
Investment in Big River SteelInvestment in Big River Steel(3) —  Investment in Big River Steel0 (3)
Proceeds from sale of assetsProceeds from sale of assets  Proceeds from sale of assets25 
Proceeds from sale of ownership interests in equity investeesProceeds from sale of ownership interests in equity investees —  Proceeds from sale of ownership interests in equity investees0 
Investments, net(4) —  
Other investing activitiesOther investing activities(1)(4)
Net cash used in investing activitiesNet cash used in investing activities(453) (627) Net cash used in investing activities(885)(453)
Financing activities:Financing activities:Financing activities:
Repayment of short-term debt (Note 15)Repayment of short-term debt (Note 15)(180)
Revolving credit facilities - borrowings, net of financing costs (Note 15)Revolving credit facilities - borrowings, net of financing costs (Note 15)1,462  —  Revolving credit facilities - borrowings, net of financing costs (Note 15)50 1,462 
Revolving credit facilities - repayments (Note 15)Revolving credit facilities - repayments (Note 15)(644) —  Revolving credit facilities - repayments (Note 15)(911)(644)
Issuance of long-term debt, net of financing costs (Note 15)Issuance of long-term debt, net of financing costs (Note 15)1,048  —  Issuance of long-term debt, net of financing costs (Note 15)825 1,048 
Repayment of long-term debt (Note 15)Repayment of long-term debt (Note 15)(6) (1) Repayment of long-term debt (Note 15)(1,418)(6)
Net proceeds from public offering of common stock (Note 23)410  —  
Proceeds from public offering of common stock (Note 22)Proceeds from public offering of common stock (Note 22)790 410 
Proceeds from Stelco Option AgreementProceeds from Stelco Option Agreement40  —  Proceeds from Stelco Option Agreement0 40 
Common stock repurchased (Note 23)—  (70) 
Dividends paid(3) (18) 
Taxes paid for equity compensation plans (Note 11)(1) (7) 
Net cash provided by (used in) financing activities2,306  (96) 
Other financing activitiesOther financing activities(11)(4)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(855)2,306 
Effect of exchange rate changes on cashEffect of exchange rate changes on cash(1) (1) Effect of exchange rate changes on cash(9)(1)
Net increase (decrease) in cash, cash equivalents and restricted cash1,490  (358) 
Net (decrease) increase in cash, cash equivalents and restricted cashNet (decrease) increase in cash, cash equivalents and restricted cash(646)1,490 
Cash, cash equivalents and restricted cash at beginning of year (Note 7)Cash, cash equivalents and restricted cash at beginning of year (Note 7)939  1,040  Cash, cash equivalents and restricted cash at beginning of year (Note 7)2,118 939 
Cash, cash equivalents and restricted cash at end of period (Note 7)Cash, cash equivalents and restricted cash at end of period (Note 7)$2,429  $682  Cash, cash equivalents and restricted cash at end of period (Note 7)$1,472 $2,429 

Supplemental Cash Flow Information:
Non-cash investing and financing activities:Non-cash investing and financing activities:Non-cash investing and financing activities:
Change in accrued capital expendituresChange in accrued capital expenditures$(98) $(6) Change in accrued capital expenditures$(26)$(98)
U. S. Steel common stock issued for employee/non-employee director stock plansU. S. Steel common stock issued for employee/non-employee director stock plans18  25  U. S. Steel common stock issued for employee/non-employee director stock plans27 18 
Capital expenditures funded by finance lease borrowingsCapital expenditures funded by finance lease borrowings30  35  Capital expenditures funded by finance lease borrowings10 30 
Export Credit Agreement (ECA) financingExport Credit Agreement (ECA) financing34  —  Export Credit Agreement (ECA) financing23 34 
The accompanying notes are an integral part of these condensed consolidated financial statements.
-4-


Notes to Condensed Consolidated Financial Statements (Unaudited)
1.     Basis of Presentation and Significant Accounting Policies
The year-end Consolidated Balance Sheet data was derived from audited statements but does not include all disclosures required for complete financial statements by accounting principles generally accepted in the United States of America (U.S. GAAP). The other information in these condensed financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair statement of the results for the periods covered, including 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 our current expectations, including consideration of the unknown future impacts of the COVID-19 pandemic, 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. These condensed financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. Additional information is contained in the United States Steel Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2020, which should be read in conjunction with these condensed financial statements.
Asset Impairment
ForIn 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 Company'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 Company determined not to pursue this project and is re-evaluating uses for the already purchased equipment. An impairment of $28 million was recognized for this project during the three-month period ended March 31, 2020, the steep decline in oil prices that resulted from market oversupply and declining demand was considered a triggering event for the welded tubular and seamless tubular asset groups. A quantitative analysis was completed for both asset groups and a $263 million impairment, consisting of an impairment of $196 million for property, plant and equipment and $67 million for intangible assets was recorded for the welded tubular asset group while no impairment was indicated for the seamless tubular asset group. June 30, 2021.

There were no triggering events that required an impairment evaluation of our long-lived asset groups as of June 30, 2020.2021.
2.    New Accounting Standards
In MarchAugust 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2020-04,2020-06, Facilitation of the Effects of Reference Rate Reform on Financial ReportingAccounting for Convertible Instruments and Contracts in an Entity’s Own Equity, (ASU 2020-04)2020-06). ASU 2020-04 provides optional exceptions2020-06 simplifies the accounting for applying generally accepted accounting principlescertain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 requires entities to modificationsprovide expanded disclosures about the terms and features of convertible instruments and amends certain guidance in ASC 260 on the computation of EPS for convertible instruments and contracts hedging relationships,on an entity’s own equity. ASU 2020-06 is effective for public companies for fiscal years beginning after December 15, 2021, and other transactions that reference LIBOR or another rate that will be discontinued by reference rate reform if certain criteria are met. U. S. Steelinterim periods within those fiscal years, with early adoption of all amendments in the same period permitted. The Company is currently assessingcontinuing to assess the impact of adoption of the ASU but does not believe it will have a material impact on its Consolidated Financial Statements.ASU.
3.    Recently Adopted Accounting Standards
In December 2019, the FASB issued ASU 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 impact of the ASU, but does not believe it will have a significant impact on its Consolidated Financial Statements.

3. Recently Adopted Accounting Standard

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. Under 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 was effective for public companies for fiscal years beginning after December 15, 2019 including interim reporting periods. U. S. Steel adopted this standard effectiveguidance on January 1, 2020.2021. The adoption of this guidance did not have a material impact of adoption was not material toon the Company's Condensed Consolidated Financial Statements.

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U. 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 2 receivable pools, U.S. and U. S. Steel Europe (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 75 percent of its receivables balance using credit insurance, letters of credit, bank guarantees, prepayments or other collateral. Below is a summary of the allowance for doubtful accounts for the segments. Additional reserve recorded in the six month period ended June 30, 2020 primarily reflects uncertainty over near-term anticipated market conditions.

(in millions)U.S.USSETotal Allowance
Balance at December 31, 2019$12  $16  $28  
Additional reserve —   
Balance at June 30, 2020$18  $16  $34  

4.    Segment Information
U. S. Steel has 34 reportable segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE); and Tubular Products (Tubular). U. S. Steel'sThe 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. Prior to the purchase, the equity earnings of Big River Steel were included in the Other segment. The Tubular Products segment includes the newly constructed EAF at our Fairfield Tubular Operations in Fairfield, Alabama. The results of our railroad, real estate businesses and the previously held equity method investment in Big River Steel and the results of our railroad and real estate businesses that do not constitute reportable segments are combined and disclosed in the Other Businesses category.
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The results of segment operations for the three months ended June 30, 20202021 and 20192020 are:
(In millions) Three Months Ended June 30, 2020
Customer
Sales
Intersegment
Sales
Net
Sales
Earnings (loss)
from
investees
Earnings (loss) before interest and income taxes
Flat-Rolled$1,497  $42  $1,539  $(16) $(329) 
USSE403   404  —  (26) 
Tubular182   185   (47) 
Total reportable segments2,082  46  2,128  (14) (402) 
Other Businesses 19  28  (25) (21) 
Reconciling Items and Eliminations—  (65) (65) —  (109) 
Total$2,091  $—  $2,091  $(39) $(532) 
Three Months Ended June 30, 2019
Flat-Rolled$2,539  $95  $2,634  $26  $134  
USSE678   681  —  (10) 
Tubular316   317   (6) 
Total reportable segments3,533  99  3,632  28  118  
Other Businesses12  30  42  —  10  
Reconciling Items and Eliminations—  (129) (129) —  (13) 
Total$3,545  $—  $3,545  $28  $115  
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(In millions) Three Months Ended June 30, 2021Customer
Sales
Intersegment
Sales
Net
Sales
Earnings (loss)
from
investees
Earnings (loss) before interest and income taxes
Flat-Rolled$2,991 $63 $3,054 $32 $579 
Mini Mill759 142 901 0 284 
USSE1,078 1 1,079 0 207 
Tubular184 3 187 3 0 
Total reportable segments5,012 209 5,221 35 1,070 
Other13 27 40 0 14 
Reconciling Items and Eliminations (236)(236)0 (50)
Total$5,025 $ $5,025 $35 $1,034 
Three Months Ended June 30, 2020
Flat-Rolled$1,497 $42 $1,539 $(16)$(329)
USSE403 404 (26)
Tubular182 185 (47)
Total reportable segments2,082 46 2,128 (14)(402)
Other19 28 (25)(21)
Reconciling Items and Eliminations— (65)(65)(109)
Total$2,091 $— $2,091 $(39)$(532)
The results of segment operations for the six months ended June 30, 20202021 and 20192020 are:
(In millions) Six Months Ended June 30, 2020
Customer
Sales
Intersegment
Sales
Net
Sales
Earnings (loss)
from
investees
Earnings (loss) before interest and income taxes
(In millions) Six Months Ended June 30, 2021(In millions) Six Months Ended June 30, 2021Customer
Sales
Intersegment
Sales
Net
Sales
Earnings (Loss)
from
investees
Earnings (loss) before interest and income taxes
Flat-RolledFlat-Rolled$5,263 $106 $5,369 $37 $725 
Mini MillMini Mill1,209 204 1,413 0 416 
USSEUSSE1,876 2 1,878 0 312 
TubularTubular318 7 325 6 (29)
Total reportable segmentsTotal reportable segments8,666 319 8,985 43 1,424 
OtherOther23 56 79 6 22 
Reconciling Items and EliminationsReconciling Items and Eliminations (375)(375)0 13 
TotalTotal$8,689 $ $8,689 $49 $1,459 
Six Months Ended June 30, 2020Six Months Ended June 30, 2020
Flat-RolledFlat-Rolled$3,471  $104  $3,575  $(12) $(364) Flat-Rolled$3,471 $104 $3,575 $(12)$(364)
USSEUSSE908   910  —  (40) USSE908 910 (40)
TubularTubular437   443   (95) Tubular437 443 (95)
Total reportable segmentsTotal reportable segments4,816  112  4,928  (9) (499) Total reportable segments4,816 112 4,928 (9)(499)
Other Businesses23  47  70  (38) (20) 
OtherOther23 47 70 (38)(20)
Reconciling Items and EliminationsReconciling Items and Eliminations—  (159) (159) —  (388) Reconciling Items and Eliminations— (159)(159)(388)
TotalTotal$4,839  $—  $4,839  $(47) $(907) Total$4,839 $— $4,839 $(47)$(907)
Six Months Ended June 30, 2019
Flat-Rolled$4,944  $164  $5,108  $33  $229  
USSE1,415   1,421  —  19  
Tubular659   662    
Total reportable segments7,018  173  7,191  37  252  
Other Businesses26  60  86  —  18  
Reconciling Items and Eliminations—  (233) (233) —  (44) 
Total$7,044  $—  $7,044  $37  $226  
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A summary of total assets by segment is as follows:
(In millions)June 30, 2021December 31, 2020
Flat-Rolled$7,468 $7,099 
Mini Mill4,246 
USSE5,871 5,502 
Tubular1,026 887 
Total reportable segments$18,611 $13,488 
Other$313 $911 
Corporate, reconciling items, and eliminations(a)
(2,840)(2,340)
Total assets$16,084 $12,059 
(a)The majority of Corporate, reconciling items, and eliminations total assets is comprised of cash and the elimination of intersegment amounts.
The following is a schedule of reconciling items to consolidated earnings before interest and income taxes:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2020201920202019(In millions)2021202020212020
Items not allocated to segments:Items not allocated to segments:Items not allocated to segments:
Tubular asset impairment charges (Notes 1 and 9)$—  $—  $(263) $—  
Gain on previously held investment in Big River SteelGain on previously held investment in Big River Steel$0 $$111 $
Big River Steel - inventory step-up amortizationBig River Steel - inventory step-up amortization0 (24)
Big River Steel - unrealized losses (a)
Big River Steel - unrealized losses (a)
(6)(15)
Big River Steel - acquisition costsBig River Steel - acquisition costs0 (9)
Restructuring and other charges (Note 20)Restructuring and other charges (Note 20)(89) —  (130) —  Restructuring and other charges (Note 20)(31)(89)(37)(130)
Asset impairment charges (Note 1)Asset impairment charges (Note 1)(28)(28)(263)
Property SaleProperty Sale15 15 
Gain on previously held investment in UPIGain on previously held investment in UPI—  —  25  —  Gain on previously held investment in UPI0 0 25 
Tubular inventory impairment chargeTubular inventory impairment charge(24) —  (24) —  Tubular inventory impairment charge0 (24)0 (24)
December 24, 2018 Clairton coke making facility fireDecember 24, 2018 Clairton coke making facility fire (13)  (44) December 24, 2018 Clairton coke making facility fire0 0 
Total reconciling itemsTotal reconciling items$(109) $(13) $(388) $(44) Total reconciling items$(50)$(109)$13 $(388)
a) Big River Steel – unrealized losses represent the post-acquisition mark-to-market impacts of hedging instruments acquired with the purchase of the remaining equity interest in Big River Steel on January 15, 2021. See Note 14 for further details.
5.    Acquisitions and Disposition

5.Transtar Disposition
On July 28, 2021, U. S. Steel sold 100 percent of the equity interests in its wholly-owned short-line railroad, Transtar, LLC (Transtar) to an affiliate of Fortress Transportation and Infrastructure Investors, LLC for a cash purchase price of $640 million subject to certain customary adjustments as set forth in the Membership Interest Purchase Agreement. 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 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 constitute a reportable business segment, its results are reported in the Other category. See Note 4 for further details. The assets and liabilities that are included in the transaction are reported as assets held for sale and liabilities held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2021. Assets held for sale consist primarily of property, plant and equipment and receivables of $129 million and $10 million, respectively. Liabilities held for sale primarily consist of accounts payable and employee benefits of $33 million and $28 million, respectively.

Big River Steel Acquisition
On January 15, 2021, U. S. Steel purchased the remaining equity interest in Big River Steel for approximately $625 million in cash net of $36 million and $62 million in cash and restricted cash received, respectively, and the assumption of liabilities of approximately $50 million. There were acquisition related costs of approximately $9 million during the six months ended June 30, 2021.

Prior to the closing of the acquisition on January 15, 2021, U. S. Steel accounted for its 49.9% equity interest in Big River Steel under the equity method as control and risk of loss were shared among the partnership members. Using step
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acquisition accounting the Company increased the value of its previously held equity investment to its fair value of $770 million which resulted in a gain of approximately $111 million. The gain was recorded in gain on equity investee transactions in the Condensed 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 $905 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 will be partially 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. See Note 15 for further details.

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%.

The following table presents the preliminary 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 
Goodwill905 
Other noncurrent assets19 
Total Assets Acquired$3,990 
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 liabilities44 
Deferred credits and other long-term liabilities182 
Total Liabilities Assumed$2,545 
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.

U. S. Steel is continuing to conform accounting policies and procedures and evaluate assets and liabilities assumed. During the one-year measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. The final purchase price allocation may include changes in allocations to intangible assets, such as customer relationships, as well as
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goodwill, changes to the fair value of long-term debt and other changes to assets and liabilities. We will apply any material adjustments in the reporting period in which the adjustments are determined.

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.

Six Months Ended June 30,
(in millions)20212020
Net sales$8,761 $5,289 
Net earnings (loss)$1,033 $(967)

USS-POSCO Industries (UPI) Acquisition
On February 29, 2020, U. S. Steel purchased the remaining 50% ownershipequity interest in USS-POSCO Industries (UPI) that it did not already own, now known as USS-UPI, LLC, from its joint venture partner 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 is reflected as a reduction in receivables from related parties on the Company's Condensed Consolidated Balance Sheet.
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 is approximately 1.5 million tons. The Company had a liability that resulted from historical losses recorded due to our continuing involvement in the previously held equity investment in UPI. Using step acquisition accounting wethe Company increased the value of ourits previously held equity investment to its fair value of $5 million
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which resulted in a gain of approximately $25 million. The gain was recorded in gain on equity investee transactions in the Condensed 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 a fair value step-up of $47 million and an intangible asset of $54 million were also recorded on the Company's Condensed 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 form of deductions from electricity costs.
U. S. Steel is continuing to conform accounting policies and procedures and evaluate assets and liabilities assumed. The results of this process may lead to further adjustments to the purchase price allocation presented above.

6.     Revenue

Revenue is generated primarily from contracts to produce, ship and deliver steel products, and to a lesser extent, raw materials sales such as iron ore pellets and coke by-products and railroad services and real estate sales. Generally, U. S. Steel’s performance obligations are satisfied and revenue is recognized at a point in time, when title transfers to our customer for product shipped or 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.

The following tables disaggregate our revenue by product for each of ourthe reportable business segments for the three months and six months ended June 30, 20202021 and 2019,2020, respectively:

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Net Sales by Product (In millions):
Three Months Ended June 30, 2020Flat-RolledUSSETubularOther BusinessesTotal
Three Months Ended June 30, 2021Three Months Ended June 30, 2021Flat-RolledMini MillUSSETubularOtherTotal
Semi-finishedSemi-finished$31  $ $—  $���  $32  Semi-finished$0 $0 $46 $0 $0 $46 
Hot-rolled sheetsHot-rolled sheets239  146  —  —  385  Hot-rolled sheets653 451 561 0 0 1,665 
Cold-rolled sheetsCold-rolled sheets342  26  —  —  368  Cold-rolled sheets889 127 102 0 0 1,118 
Coated sheetsCoated sheets713  202  —  —  915  Coated sheets1,020 179 334 0 0 1,533 
Tubular productsTubular products—  11  178  —  189  Tubular products0 0 14 178 0 192 
All Other (a)
All Other (a)
172  17    202  
All Other (a)
429 2 21 6 13 471 
TotalTotal$1,497  $403  $182  $ $2,091  Total$2,991 $759 $1,078 $184 $13 $5,025 
(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.
Three Months Ended June 30, 2020Flat-RolledUSSETubularOtherTotal
Semi-finished$31 $$$$32 
Hot-rolled sheets239 146 385 
Cold-rolled sheets342 26 368 
Coated sheets713 202 915 
Tubular products11 178 189 
All Other (a)
172 17 202 
Total$1,497 $403 $182 $$2,091 
(a) Consists primarily of sales of raw materials and coke making by-products.
Three Months Ended June 30, 2019Flat-RolledUSSETubularOther BusinessesTotal
Six Months Ended June 30, 2021Six Months Ended June 30, 2021Flat-RolledMini MillUSSETubularOtherTotal
Semi-finishedSemi-finished$121  $ $—  $—  $126  Semi-finished$12 $0 $49 $0 $0 $61 
Hot-rolled sheetsHot-rolled sheets682  287  —  —  969  Hot-rolled sheets1,103 700 947 0 0 2,750 
Cold-rolled sheetsCold-rolled sheets643  82  —  —  725  Cold-rolled sheets1,673 206 185 0 0 2,064 
Coated sheetsCoated sheets816  269  —  —  1,085  Coated sheets1,898 300 632 0 0 2,830 
Tubular productsTubular products—  11  311  —  322  Tubular products0 0 24 306 0 330 
All Other (a)
All Other (a)
277  24   12  318  
All Other (a)
577 3 39 12 23 654 
TotalTotal$2,539  $678  $316  $12  $3,545  Total$5,263 $1,209 $1,876 $318 $23 $8,689 
(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.
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Six Months Ended June 30, 2020Flat-RolledUSSETubularOther BusinessesTotal
Semi-finished$58  $ $—  $—  $60  
Hot-rolled sheets741  351  —  —  1,092  
Cold-rolled sheets940  71  —  —  1,011  
Coated sheets1,424  431  —  —  1,855  
Tubular products—  20  429  —  449  
All Other (a)
308  33   23  372  
Total$3,471  $908  $437  $23  $4,839  
(a) Consists primarily of sales of raw materials and coke making by-products.
Six Months Ended June 30, 2019Flat-RolledUSSETubularOther BusinessesTotal
Semi-finished$209  $ $—  $—  $218  
Hot-rolled sheets1,445  619  —  —  2,064  
Cold-rolled sheets1,304  170  —  —  1,474  
Coated sheets1,544  548  —  —  2,092  
Tubular products—  20  646  —  666  
All Other (a)
442  49  13  26  530  
Total$4,944  $1,415  $659  $26  $7,044  
(a) Consists primarily of sales of raw materials and coke making by-products.
Six Months Ended June 30, 2020Flat-RolledUSSETubularOtherTotal
Semi-finished$58 $$$$60 
Hot-rolled sheets741 351 1,092 
Cold-rolled sheets940 71 1,011 
Coated sheets1,424 431 1,855 
Tubular products20 429 449 
All Other (a)
308 33 23 372 
Total$3,471 $908 $437 $23 $4,839 
(a) Consists primarily of sales of raw materials and coke making by-products.
7.     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 Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statement of Cash Flows:
(In millions)June 30, 2020June 30, 2019
Cash and cash equivalents$2,300  $651  
Restricted cash in other current assets  
Restricted cash in other noncurrent assets128  30  
      Total cash, cash equivalents and restricted cash$2,429  $682  
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(In millions)June 30, 2021June 30, 2020
Cash and cash equivalents$1,329 $2,300 
Restricted cash in other current assets47 
Restricted cash in other noncurrent assets95 128 
Transtar cash in assets held for sale$1 $
      Total cash, cash equivalents and restricted cash$1,472 $2,429 

Amounts included in restricted cash represent cash balances which are legally or contractually restricted, primarily for electric arc furnace construction, environmental and other capital expenditure projects, collateral for open cash flow hedge positions and insurance purposes.

8.    Inventories
The LIFO method is the predominant method of inventory costing infor our Flat-Rolled and Tubular segments. The FIFO and moving average methods are the United States. Thepredominant inventory costing methods for our Mini Mill segment and the FIFO method is the predominant inventory costing method in Europe.for our USSE segment. At June 30, 20202021 and December 31, 2019,2020, the LIFO method accounted for 7046 percent and 7559 percent of total inventory values, respectively.
(In millions)(In millions)June 30, 2020December 31, 2019(In millions)June 30, 2021December 31, 2020
Raw materialsRaw materials$582  $628  Raw materials$658 $416 
Semi-finished productsSemi-finished products630  720  Semi-finished products900 633 
Finished productsFinished products365  376  Finished products305 300 
Supplies and sundry itemsSupplies and sundry items57  61  Supplies and sundry items51 53 
TotalTotal$1,634  $1,785  Total$1,914 $1,402 
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Current acquisition costs were estimated to exceed the above inventory values by $1,205$667 million and $735$848 million at June 30, 20202021 and December 31, 2019,2020, respectively. As a result of the liquidation of LIFO inventories, cost of sales decreased and earnings before interest and income taxes increased by $6 million and $7 million for the three months and six monthsended June 30, 2021, respectively. Cost of sales increased and earnings before interest and income taxes decreased by $1 million and $6 million for the three months and six monthsended June 30, 2020, respectively. Cost of sales increased and earnings before interest and income taxes decreased by $8 million and $7 million for the three and six months ended June 30, 2019, respectively, as a result of liquidation of LIFO inventories.
Inventory includes $42 million and $40 million of land held for residential/commercial development as of June 30, 2020 and December 31, 2019, respectively.
9.     Intangible Assets and Goodwill
Intangible assets that are being amortized on a straight-line basis over their estimated useful lives are detailed below:
As of June 30, 2020As of December 31, 2019As of June 30, 2021As of December 31, 2020
(In millions)(In millions)Useful
Lives
Gross
Carrying
Amount
Accumulated Impairment (a)
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
(In millions)Useful
Lives
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated ImpairmentAccumulated
Amortization
Net
Amount
Customer relationshipsCustomer relationships22 Years$132  $55  $77  $—  $132  $76  $56  Customer relationships22 Years$413 $9 $404 $132 $55 $77 $
PatentsPatents10-15 Years22   10   22   14  Patents10-15 Years17 10 7 22 10 
Energy ContractEnergy Contract10 Years54  —   52  —  —  —  Energy Contract10 Years54 7 47 54 49 
OtherOther4-20 Years14    —  14    Other4-20 Years0 0 0 14 
Total amortizable intangible assetsTotal amortizable intangible assets$222  $67  $98  $57  $168  $93  $75  Total amortizable intangible assets$484 $26 $458 $222 $67 $101 $54 
(a) The impairment charge was the result of the quantitative impairment analysis of the welded tubular asset group for the period ended March 31, 2020. See Note 1 for further details.
TheTotal estimated amortization expense for the remainder of 20202021 is $3$13 million. We expect approximately $6$25 million in annual amortization expense through 20252026 and approximately $24$320 million in remaining amortization expense thereafter.

The carrying amount of acquired water rights with indefinite lives as of June 30, 20202021 and December 31, 20192020 totaled $75 million.

Below is a summary of goodwill by segment for the six months ended June 30, 2021:
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Flat-RolledMini MillUSSETubularTotal
Balance at December 31, 2020$0 $0 $4 $0 $4 
Additions0 905 0 0 905 
Balance at June 30, 2021$0 $905 $4 $0 $909 
10.    Pensions and Other Benefits
The following table reflects the components of net periodic benefit cost (income) for the three months ended June 30, 20202021 and 2019:2020:
Pension
Benefits
Other
Benefits
Pension
Benefits
Other
Benefits
(In millions)(In millions)2020201920202019(In millions)2021202020212020
Service costService cost$13  $11  $ $ Service cost$14 $13 $3 $
Interest costInterest cost48  59  16  23  Interest cost41 48 12 16 
Expected return on plan assetsExpected return on plan assets(84) (81) (20) (20) Expected return on plan assets(89)(84)(20)(20)
Amortization of prior service cost  (2)  
Amortization of actuarial net loss36  33  (4)  
Net periodic benefit cost, excluding below14  23  (7) 14  
Amortization of prior service creditAmortization of prior service credit1 (7)(2)
Amortization of actuarial net loss (gain)Amortization of actuarial net loss (gain)37 36 (6)(4)
Net periodic benefit cost (income), excluding belowNet periodic benefit cost (income), excluding below4 14 (18)(7)
Multiemployer plansMultiemployer plans18  19  —  —  Multiemployer plans18 18 0 
Settlement, termination and curtailment losses (a)
Settlement, termination and curtailment losses (a)
$ $—  $—  $—  
Settlement, termination and curtailment losses (a)
3 0 0 
Net periodic benefit cost$34  $42  $(7) $14  
(a) During the three months ended June 30, 2020 the pension plan incurred special termination charges of approximately $2 million due to workforce restructuring.
Net periodic benefit cost (income)Net periodic benefit cost (income)$25 $34 $(18)$(7)
(a) During the three months ended June 30, 2021 the pension plan incurred curtailment charges of approximately $3 million with the sale of Transtar. For the three months ended June 30, 2020 the pension plan incurred special termination charges of $2 million due to workforce restructuring.(a) During the three months ended June 30, 2021 the pension plan incurred curtailment charges of approximately $3 million with the sale of Transtar. For the three months ended June 30, 2020 the pension plan incurred special termination charges of $2 million due to workforce restructuring.
The following table reflects the components of net periodic benefit cost (income) for the six months ended June 30, 20202021 and 2019:2020:
Pension
Benefits
Other
Benefits
Pension
Benefits
Other
Benefits
(In millions)(In millions)2020201920202019(In millions)2021202020212020
Service costService cost$25  $22  $ $ Service cost$28 $25 $6 $
Interest costInterest cost96  119  32  46  Interest cost81 96 24 32 
Expected return on plan assetsExpected return on plan assets(165) (162) (40) (40) Expected return on plan assets(178)(165)(40)(40)
Amortization of prior service costAmortization of prior service cost  (4) 14  Amortization of prior service cost1 (14)(4)
Amortization of actuarial net loss72  66  (8)  
Net periodic benefit cost, excluding below29  46  (14) 28  
Amortization of actuarial net loss (gain)Amortization of actuarial net loss (gain)75 72 (12)(8)
Net periodic benefit cost (income), excluding belowNet periodic benefit cost (income), excluding below7 29 (36)(14)
Multiemployer plansMultiemployer plans39  37  —  —  Multiemployer plans37 39 0 
Settlement, termination and curtailment losses (a)
Settlement, termination and curtailment losses (a)
$ $—  $—  $—  
Settlement, termination and curtailment losses (a)
3 8 0 0 
Net periodic benefit cost$76  $83  $(14) $28  
(a) During the six months ended June 30, 2020 the pension plan incurred special termination charges of approximately $8 million due to workforce restructuring.
Net periodic benefit cost (income)Net periodic benefit cost (income)$47 $76 $(36)$(14)
(a) During the six months ended June 30, 2021 the pension plan incurred curtailment charges of approximately $3 million with the sale of Transtar. For the six months ended June 30, 2020 the pension plan incurred settlement and special termination charges of approximately $8 million due to workforce restructuring and lump sum payments made to certain individuals(a) During the six months ended June 30, 2021 the pension plan incurred curtailment charges of approximately $3 million with the sale of Transtar. For the six months ended June 30, 2020 the pension plan incurred settlement and special termination charges of approximately $8 million due to workforce restructuring and lump sum payments made to certain individuals
Employer Contributions
During the first six months of 2020,2021, U. S. Steel made cash payments of $39$37 million to the Steelworkers’ Pension Trust and $1$2 million of pension payments not funded by trusts.
During the first six months of 2020,2021, cash payments of $23$18 million were made for other postretirement benefit payments not funded by trusts.
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Company contributions to defined contribution plans totaled $4$11 million and $12$4 million for the three months ended June 30, 20202021 and 2019,2020, respectively. Company contributions to defined contribution plans totaled $15$21 million and $22$15 million for the six months ended June 30, 2021 and 2020, respectively.
Transtar Disposition
In connection with the Transtar sale, U. S. Steel remeasured its main pension benefit plan as of June 30, 2021. As a result of the remeasurement, the net pension obligation was reduced by $255 million and 2019, respectively.the funded status level of plan increased to 103 percent.

11.    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)(Committee), or its designee, under the 2005 Stock Incentive Plan (the
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2005(2005 Plan) and the 2016 Omnibus Incentive Compensation Plan, (the Omnibusas amended and restated (Omnibus Plan). On April 26, 2016, theThe Company's stockholders approved the Omnibus Plan and authorized the Company to issue up to 7,200,00032,700,000 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, and an additional 4,700,000 shares on April 28, 2020. While the awards that were previously granted under the 2005 Plan remain outstanding, all future awards will be granted under the Omnibus Plan. As of June 30, 2020,2021, there were 5,949,13016,428,281 shares available for future grants under the Omnibus Plan.

Recent grants of stock-based compensation consist of restricted stock units, total stockholder return (TSR) performance awards and return on capital employed (ROCE) performance awards. Shares of common stock under the Omnibus Plan are issued from authorized, but unissued stock. The following table is a summary of the awards made under the Omnibus Plan during the first six months of 20202021 and 2019.2020.
2020201920212020
Grant DetailsGrant Details
Shares(a)
Fair Value(b)
Shares(a)
Fair Value(b)
Grant Details
Shares(a)
Fair Value(b)
Shares(a)
Fair Value(b)
Restricted Stock UnitsRestricted Stock Units2,640,690  $8.82  1,002,400  $23.78  Restricted Stock Units1,492,880 $18.30 2,640,690 $8.82 
Performance Awards (c)
Performance Awards (c)
Performance Awards (c)
TSR TSR671,390  $8.19  210,520  $29.22   TSR306,930 $19.46 671,390 $8.19 
ROCE (d)
ROCE (d)
—  $—  526,140  $23.92  
ROCE (d)
485,900 $17.92 $
(a) The share amounts shown in this table do not reflect an adjustment for estimated forfeitures.
(b) Represents the per share weighted-averageweighted average for all grants during the period.
(c) The number of performance awards shown represents the target valueshare grant of the award.
(d) The ROCE awards granted in 2020 and a portion of ROCE awards granted in 2021 are not shown in the table because they were granted in cash.

U. S. Steel recognized pretax stock-based compensation expense in the amount of $9$15 million and $12$9 million in the three-month periods ended June 30, 20202021 and 2019,2020, respectively and $13$26 million and $20$13 million in the first six months of 20202021 and 2019,2020 respectively.

As of June 30, 2020,2021, total future compensation expense related to nonvested stock-based compensation arrangements was $22$48 million, and the weighted average period over which this expense is expected to be recognized is approximately 1817 months.

Restricted stock units awarded as part of annual grants generally vest ratably over three years. Their fair value is the market price of the underlying common stock on the date of grant. Restricted stock units granted in connection with new-hire or retention grants generally cliff vest three years from the date of the grant.

TSR performance awards may vest at varying levels at the end of a three-yearthree-year performance period if U. S. Steel's total stockholder return compared to the total stockholder return of a peer group of companies meets specified performance criteria with each year in the three-yearthree-year performance period weighted at 20 percent and the full three-yearthree-year performance weighted at 40 percent. TSR performance awards can vest at between 0 and 200 percent of the target award. The fair value of the TSR performance awards is calculated using a Monte-CarloMonte Carlo simulation.

ROCE performance awards may vest at the end of a three-yearthree-year performance period contingent upon meeting the specified ROCE performance metric. ROCE performance awards can vest at between 0 and 200 percent of the target award. The fair value of the ROCE performance awards is the average market price of the underlying common stock on the date of grant.

For further details about our stock-based compensation incentive plans and stock awards see Note 15 of the United States Steel Corporation Annual Report on Form 10-K for the fiscal year-ended December 31, 2019.
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12.    Income Taxes
Tax provisionbenefit
For the six months ended June 30, 2021 and 2020, and 2019, wethe Company recorded a tax benefit of $36 million and $24 million, on our pretax loss of $1,004 million and a tax provision of $1 million on our pretax earnings of $123 million, respectively. In general, the amount of tax expense or benefit from continuing operations is determined without regard to the tax effect of other categories of income or loss, such as other comprehensive income. However, an
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exception to this rule applies when there is a loss from continuing operations and income from other categories.In 2020, the tax benefit includes a discrete benefit of $14 million related to this accounting exception. The tax benefit in 2020 also includes an expense of $13 million for an updated estimate to tax reserves related to an unrecognized tax benefit. Due to the full valuation allowance on our domestic deferred tax assets, the tax benefit in 2020 does not reflect any additional tax benefit for domestic pretax losses.In 2019, the tax provision reflects a benefit for percentage depletion in excess of cost depletion from iron ore that we produce and consume or sell.

The tax benefit for the first six months of 20202021 was based on an estimated annual effective rate, which requires management to make its best estimate of annual pretax income or loss.loss and discrete items recognized during the period.

The tax benefit for the six months ended June 30, 2021 includes a benefit of $262 million for the release of the domestic valuation allowance recorded against domestic deferred tax assets that are more likely than not to be realized. During the second quarter of 2021, the Company evaluated all available positive and negative evidence, including the impact of profitability generated from current year operations and future projections of profitability. As a result, the Company determined that all of its domestic deferred tax assets were more likely than not to be realized with the exception of certain of its state net operating losses and state tax credits and reversed the valuation allowance against those deferred tax assets accordingly.

The tax benefit for the six months ended June 30, 2020 includes a $14 million benefit related to recording a loss from continuing operations and income from other comprehensive income categories.

Throughout the year, management regularly updates forecasted annual pretax results for the various countries in which we operate based on changes in factors such as prices, shipments, product mix, plant operating performance and cost estimates. To the extent that actual 20202021 pretax results for U.S. and foreign income or loss vary from estimates applied herein, the actual tax provision or benefit recognized in 20202021 could be materially different from the forecasted amount used to estimate the tax benefit for the six months ended June 30, 2020.
Unrecognized tax benefits
As of June 30, 2020, and December 31, 2019, the total amount of gross unrecognized tax benefits was $16 million and $3 million, respectively. The total amount of net unrecognized tax benefits that, if recognized, would affect the effective tax rate was $15 million and $2 million as of June 30, 2020 and December 31, 2019, respectively.

2021.
13.    Earnings and Dividends Per Common Share
Earnings (Loss) Earnings Per Share Attributable to United States Steel Corporation Stockholders
The effect of dilutive securities on weighted average common shares outstanding included in the calculation of diluted earnings (loss) per common share for the three and six months ended June 30, 20202021 and June 30, 20192020 were as follows.
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions, except per share amounts)(Dollars in millions, except per share amounts)2020201920202019(Dollars in millions, except per share amounts)2021202020212020
(Loss) earnings attributable to United States Steel Corporation stockholders$(589) $68  $(980) $122  
Earnings (loss) attributable to United States Steel Corporation stockholdersEarnings (loss) attributable to United States Steel Corporation stockholders$1,012 $(589)$1,103 $(980)
Weighted-average shares outstanding (in thousands):Weighted-average shares outstanding (in thousands):Weighted-average shares outstanding (in thousands):
BasicBasic175,327  171,992  172,775  172,613  Basic269,872 175,327 259,668 172,775 
Effect of Senior Convertible NotesEffect of Senior Convertible Notes—  —  —  —  Effect of Senior Convertible Notes11,975 10,439 
Effect of stock options, restricted stock units and performance awardsEffect of stock options, restricted stock units and performance awards—  520  —  862  Effect of stock options, restricted stock units and performance awards4,490 4,405 
Adjusted weighted-average shares outstanding, dilutedAdjusted weighted-average shares outstanding, diluted175,327  172,512  172,775  173,475  Adjusted weighted-average shares outstanding, diluted286,337 175,327 274,512 172,775 
Basic (loss) earnings per common share$(3.36) $0.39  $(5.67) $0.71  
Diluted (loss) earnings per common share$(3.36) $0.39  $(5.67) $0.70  
Basic earnings (loss) per common shareBasic earnings (loss) per common share$3.75 $(3.36)$4.25 $(5.67)
Diluted earnings (loss) per common shareDiluted earnings (loss) per common share$3.53 $(3.36)$4.02 $(5.67)
Excluded from the computation of diluted earnings (loss) earnings per common share due to their anti-dilutive effect were 0.9 million and 1.3 million outstanding securities granted under the Omnibus Plan for the three and six months ended June 30, 2021, respectively and 5.9 million and 5.4 million outstanding securities granted under the Omnibus Plan for the three and six months ended June 30, 2020, respectively, and 3.8 million and 3.4 million outstanding securities granted under the Omnibus Plan for the three and six months ended June 30, 2019.respectively.
Dividends Paid Per Share
The dividend for each of the first and second quarters of 20202021 and 20192020 was 1 cent and 5 cents per common share, respectively.share.

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14.    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. U. S. SteelThe USSE segment uses foreign exchange forward sales contracts (foreign exchange forwards) with maturities no longer than 12 months to exchange euros for U.S. dollars (USD), our Flat-Rolled segment used foreign exchange forwards to manageexchange USD for Canadian dollars and our currency requirementsMini Mill segment uses foreign exchange forwards to exchange USD for euros. All of our foreign exchange forwards have maturities no longer than 13 months and exposureare used to mitigate the risk of foreign currency exchange rate fluctuations. Derivative instruments are required to be recognized atfluctuations and manage our foreign currency requirements. The USSE and Flat-Rolled segments use hedge accounting for their foreign exchange forwards. The Mini Mill segment has not elected hedge accounting; therefore, the changes in the fair value in the Condensed Consolidated Balance Sheet. U. S. Steel did not designate euroof their foreign exchange forwards entered into prior to July 1, 2019, as hedges; therefore, changes in their fair value wereare recognized immediately in the Condensed Consolidated Statements of Operations (mark-to-market accounting). As of June 30, 2020, all foreign exchange forwards for

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The Flat-Rolled and USSE that were not classified as hedges had matured. U. S. Steel elected cash flow hedge accounting for euro foreign exchange forwards prospectively effective July 1, 2019. Accordingly, future gains and losses for euro foreign exchange forwards entered into after July 1, 2019 are 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 remaining maturities up to 6 months 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.
U. S. Steel maysegments also use fixed-price forward physical purchase contracts to partially manage our exposure to price risk related to the purchases of natural gas, zinc, and tin used in the production process. 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, tin and tinelectricity (commodity purchase swaps). In January 2020, the Company began purchasing commodity purchase swaps to mitigate variable purchase price risk for electricity at our Gary Works location. We elected cash flow hedge accounting for our U.S.Flat-Rolled commodity purchase swaps for natural gas, zinc and tin and use mark-to-market accounting for electricity swaps used in our domestic operations and for commodity purchase swaps used in our European operations andoperations. The maximum derivative contract duration for electricity commodity purchase swaps.
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 where hedge accounting was elected and was not elected is six months and 30 months, respectively.

The Flat-Rolled and Mini Mill segments have entered into financial swaps that are used to partially manage the sales price risk of certain hot-rolled coil sales (sales swaps). The Flat-Rolled segment uses hedge accounting for its 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.and the Mini Mill segment uses mark-to-market accounting for its sales swaps. Sales swaps have maturities of up to six months.
The table below shows the outstanding swap quantities used to hedge forecasted purchases and sales as of June 30, 20202021 and June 30, 2019:2020:
Hedge ContractsHedge ContractsClassificationJune 30, 2020June 30, 2019Hedge ContractsClassificationJune 30, 2021June 30, 2020
Natural gas (in mmbtus)Natural gas (in mmbtus)Commodity purchase swaps44,462,00064,354,000Natural gas (in mmbtus)Commodity purchase swaps25,251,00044,462,000
Tin (in metric tons)Tin (in metric tons)Commodity purchase swaps1,221990Tin (in metric tons)Commodity purchase swaps7961,221
Zinc (in metric tons)Zinc (in metric tons)Commodity purchase swaps12,56413,942Zinc (in metric tons)Commodity purchase swaps12,85112,564
Electricity (in megawatt hours)Electricity (in megawatt hours)Commodity purchase swaps936,000Electricity (in megawatt hours)Commodity purchase swaps986,400936,000
Hot-rolled coils (in tons)Hot-rolled coils (in tons)Sales swaps159,8800
Foreign currency (in millions of euros)Foreign currency (in millions of euros)Foreign exchange forwards239  301  Foreign currency (in millions of euros)Foreign exchange forwards278 239 
Foreign currency (in millions of dollars)Foreign currency (in millions of dollars)Foreign exchange forwards$9 $
Foreign currency (in millions of CAD)Foreign currency (in millions of CAD)Foreign exchange forwards$15  $40  Foreign currency (in millions of CAD)Foreign exchange forwards$0 $15 
The following summarizes the fair value amounts included
There were $34 million and $5 million in our Condensed Consolidated Balance Sheetsaccounts receivable and $151 million and $54 million in accounts payable recorded for derivatives designated as hedging instruments as of June 30, 20202021 and December 31, 2019:2020, respectively. Amounts recorded in long-term asset and long-term liability accounts for derivatives were not material as of June 30, 2021 and December 31, 2020. Accounts payable recorded in the Condensed Consolidated Balance sheet for derivatives not designated as hedging instruments was $14 million as of June 30, 2021 and was immaterial as of December 31, 2020.
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(In millions) Designated as Hedging Instruments
Balance Sheet LocationJune 30, 2020December 31, 2019
Commodity purchase swapsAccounts receivable$ $ 
Commodity purchase swapsAccounts payable14  17  
Commodity purchase swapsInvestments and long-term receivables—   
Commodity purchase swapsOther long-term liabilities  
Foreign exchange forwardsAccounts receivable —  
Foreign exchange forwardsAccounts payable  
Not Designated as Hedging Instruments
Commodity purchase swapsAccounts payable —  
Commodity purchase swapsOther long-term liabilities —  
Foreign exchange forwardsAccounts receivable—   
The table below summarizes the effect of hedge accounting on AOCI and amounts reclassified from AOCI into earnings for the three and six months ended June 30, 20202021 and 2019:2020:
Gain (Loss) on Derivatives in AOCIAmount of Gain (Loss) Recognized in IncomeGain (Loss) on Derivatives in AOCIAmount of Gain (Loss) Recognized in Income
(In millions)(In millions)Three Months Ended June 30, 2020Three Months Ended June 30, 2019
Location of Reclassification from AOCI (a)
Three Months Ended June 30, 2020Three Months Ended June 30, 2019(In millions)Three Months Ended June 30, 2021Three Months Ended June 30, 2020
Location of Reclassification from AOCI (a)
Three Months Ended June 30, 2021Three Months Ended June 30, 2020
Sales swaps (b)
Sales swaps (b)
$—  $—  Net sales$—  $—  
Sales swaps (b)
$(79)$Net sales$(23)$
Commodity purchase swapsCommodity purchase swaps19  (15) 
Cost of sales (c)
(12) (6) Commodity purchase swaps22 19 
Cost of sales (b)
5 (12)
Foreign exchange forwardsForeign exchange forwards(4)  Cost of sales—  —  Foreign exchange forwards2 (4)Cost of sales(5)
(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 has elected hedge accounting prospectively for iron ore pellet sales swaps on January 1, 2019.
(c) Costs for commodity purchase swaps are recognized in cost of sales as products are sold.
Gain (Loss) on Derivatives in AOCIAmount of Gain (Loss) Recognized in Income
(In millions)Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Location of Reclassification from AOCI (a)
Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Sales swaps (b)
$—  $ Net sales$—  $(1) 
Commodity purchase swaps11   
Cost of sales (c)
(20) (10) 
Foreign exchange forwards  Cost of sales—  —  
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Gain (Loss) on Derivatives in AOCIAmount of Gain (Loss) Recognized in Income
(In millions)Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Location of Reclassification from AOCI (a)
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Sales swaps$(123)$Net sales$(33)$
Commodity purchase swaps32 11 
Cost of sales (b)
4 (20)
Foreign exchange forwards21 Cost of sales(10)
(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 has elected hedge accounting prospectively for iron ore pellet sales swaps on January 1, 2019.
(c) Costs for commodity purchase swaps are recognized in cost of sales as products are sold.


At current contract values, $31 million currently in AOCI as of June 30, 2021 will be recognized as a decrease in cost of sales over the next year and $149 million currently in AOCI as of June 30, 2021 will be recognized as a decrease in net sales over the next year.
The table below summarizes the impact of derivative activityloss recognized for sales swaps where hedge accounting haswas not been elected on our Condensed Consolidated Statementwas $6 million and $15 million and was recognized in cost of Operationssales for the three and six months ended June 30, 2020 and 2019:
Amount of Gain (Loss) Recognized in Income
(In millions)Statement of Operations LocationThree Months Ended June 30, 2020Three Months Ended June 30, 2019
Foreign exchange forwardsOther financial costs$— $(2)
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Amount of Gain (Loss) Recognized in Income
(In millions)Statement of Operations LocationSix Months Ended June 30, 2020Six Months Ended June 30, 2019
Commodity purchase swaps (a)
Cost of sales$(2) $—  
Foreign exchange forwardsOther financial costs  
(a) In January 2020, we began utilizing commodity purchase swaps to mitigate variable electricity price risk at our Gary Works location.

At current contract values, $9 million currently in AOCI as of June 30, 2020 will be2021, respectively. The loss recognized as an increase in cost offor sales over the next year as related hedged items are recognized in earnings. The maximum derivative contract duration for commodity purchase swaps where hedge accounting was elected is 18 months. The maximum contract duration for commodity purchase swaps where hedge accounting was not elected is 31 months.was not material for the three and six months ended June 30, 2020.
15.    Debt
(In millions)Interest
Rates %
MaturityJune 30, 2020December 31, 2019
2037 Senior Notes6.6502037$350  $350  
2026 Senior Notes6.2502026650  650  
2026 Senior Convertible Notes5.0002026350  350  
2025 Senior Notes6.8752025750  750  
2025 Senior Secured Notes12.00020251,056  —  
Environmental Revenue Bonds4.875 - 6.7502024 - 2049620  620  
Fairfield Caster Lease202216  18  
Other finance leases and all other obligations2020 - 202973  48  
ECA Credit AgreementVariable2031104  —  
Amended Credit Facility, $2.0 billionVariable20241,400  600  
UPI Amended Credit FacilityVariable202077  —  
USSK Credit AgreementVariable2023392  393  
USSK Credit FacilitiesVariable2021—  —  
Total Debt5,838  3,779  
Less unamortized discount and debt issuance costs239  138  
Less short-term debt and long-term debt due within one year94  14  
Long-term debt$5,505  $3,627  
To the extent not otherwise discussed below, information concerning the senior notes and other listed obligations can be found in Note 17 of the audited financial statements in the United States Steel Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
(In millions)Issuer/BorrowerInterest
Rates %
MaturityJune 30, 2021December 31, 2020
2037 Senior NotesU. S. Steel6.6502037350 350 
2029 Senior Secured NotesBig River Steel6.6252029900 
2029 Senior NotesU. S. Steel6.8752029750 
2026 Senior NotesU. S. Steel6.2502026600 650 
2026 Senior Convertible NotesU. S. Steel5.0002026350 350 
2025 Senior NotesU. S. Steel6.8752025718 750 
2025 Senior Secured NotesU. S. Steel12.00020250 1,056 
Arkansas Teacher Retirement System Notes PayableBig River Steel5.500 - 7.7502023106 
Export-Import Credit AgreementU. S. SteelVariable20210 180 
Environmental Revenue BondsU. S. Steel4.125 - 6.7502024 - 2050717 717 
Environmental Revenue BondsBig River Steel4.500 - 4.7502049752 
Finance leases and all other obligationsU. S. SteelVarious2021 - 202980 81 
Finance leases and all other obligationsBig River SteelVarious2021 - 2031115 
Export Credit Agreement (ECA)U. S. SteelVariable2031136 113 
Credit Facility AgreementU. S. SteelVariable20240 500 
Big River Steel ABL Facility, $350 millionBig River SteelVariable20220 
USSK Credit AgreementU. S. Steel KosiceVariable20230 368 
USSK Credit FacilitiesU. S. Steel KosiceVariable20210 
Total Debt5,574 5,115 
Less unamortized discount, premium, and debt issuance costs8 228 
Less short-term debt, long-term debt due within one year, and short-term issuance costs763 192 
Long-term debt$4,803 $4,695 


2025 Senior Secured Notes, Senior Notes and Export-Import Credit Agreement Repayments
On May 29, 2020,The following debt repayments were made by U. S. Steel issued $1.056 billion aggregate principal amount of 12.000% Senior Secured Notes dueduring the six-month period ended June 1, 2025 (2025 Senior Secured Notes) in a 144A private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. The notes were issued at a price equal to 94.665% of their face value. U. S. Steel received net proceeds from the offering of approximately $977 million after fees of approximately $23 million related to underwriting and third party expenses. The notes will pay interest semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020. The notes are fully and unconditionally guaranteed on a senior secured basis by all of our existing and future direct and indirect material domestic subsidiaries (other than certain subsidiaries30, 2021:
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excluded in the indenture). The notes and notes guarantees are secured by first priority-liens, subject to permitted liens, on substantially all of U. S. Steel’s domestic assets, other than certain excluded assets per the termsAll of the notes indentureremaining outstanding principal of approximately $180 million under the Export-Import Credit Agreement was repaid. There were approximately $3 million in non-cash debt extinguishment costs associated with the repayment. The Export-Import Credit Agreement and exclusiverelated security interests were terminated in conjunction with the payment in full. No early termination penalties applied with respect to the prepayment.
The full optional redemption of the collateral required underoutstanding 12.000% Senior Secured Notes due 2025 for an aggregate principal amount of approximately $1.056 billion was completed. There were redemption premiums and unamortized discount and debt issuance write-offs of approximately $181 million and $71 million, respectively related to the Credit Facility Agreement.repayment.
Open market repurchases were made of approximately $50 million and $32 million of aggregate principal on the 6.250% Senior Notes due 2026 and its 6.875% Senior Notes due 2025, respectively.

2025 Senior Notes
On June 17, 2021, U. S. Steel issued an irrevocable notice of redemption to redeem the entirety of its approximately $718 million aggregate principal amount of outstanding 6.875% Senior Notes due 2025 (2025 Senior Notes). The Company may redeemexpects the 2025 Senior Secured Notes, in whole or part, at our option on or after June 1, 2022 attotal payment to the holders including the redemption premium to be approximately $730 million (reflecting a redemption price for such notes as a percentageof 101.719% of the aggregate principal amount,amount), plus accrued and unpaid interest to, but excluding, the redemption date of August 15, 2021. The 2025 Senior Notes will be redeemed with cash on hand. The 2025 Senior Notes are reflected in short-term debt and current maturities of long-term debt on the Condensed Consolidated Balance Sheet as of June 30, 2021.

2029 Senior Notes
On February 11, 2021, U. S. Steel issued $750 million aggregate principal amount of 6.875% Senior Notes due 2029 (2029 Senior Notes). U. S. Steel received net proceeds of approximately $739 million after fees of approximately $11 million related to underwriting and third-party expenses. The net proceeds from the issuance of the 2029 Senior Notes, together with the proceeds of our recent common stock issuance were used to redeem all of our outstanding 2025 Senior Secured Notes as discussed above. See Note 22 for further details regarding our recent common stock issuance. The 2029 Senior Notes will pay interest semi-annually in arrears on March 1 and September 1 of each year beginning on September 1, 2021, and will mature on March 1, 2029, unless earlier redeemed or repurchased.

On and after March 1, 2024, the Company may redeem the 2029 Senior Notes at its option, at any time in whole or from time to time in part, upon not less than 15 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount) listed below, plus accrued and unpaid interest on the 2029 Senior Notes, if any, to, but excluding, the applicable redemption date, if redeemed during the twelve-month period beginning on June 1stMarch 1 of each of the years indicated below.

YearRedemption Price
2022106 %
2023103 %
2024 and thereafter100 %
YearRedemption Price
2024103.438 %
2025101.719 %
2026 and thereafter100.000 %

PriorAt any time prior to JuneMarch 1, 2022,2024, U. S. Steel may also redeem the Company2029 Senior Notes, 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 2029 Senior Notes to be redeemed, or the sum of the present value of the redemption price of the 2029 Senior Notes if they were redeemed on March 1, 2024 plus interest payments due through March 1, 2024 discounted to the date of redemption on a semi-annual basis at the applicable treasury yield, plus 50 basis points and accrued and unpaid interest, if any.

At any time prior to March 1, 2024 we may redeemalso purchase up to 35% of the original aggregate principal amount of the 20252029 Senior Secured Notes with the net cash proceeds of one or more equity offerings for a price of 112.000% of principal amount of the 2025 Senior Secured Notesat 106.875%, plus accrued and unpaid interest, if any, up to, but excluding the applicable date of redemption. Upon the occurrence of certain assets sales, we are requiredredemption, with proceeds from equity offerings.

Similar to apply asset sale proceeds towards investments in assets that constitute Notes collateral. If all asset sale proceeds are not invested within one year, or such longer period as permitted byour other senior notes, the indenture we may be requiredgoverning the 2029 Senior Notes restricts our ability to create certain liens, to enter into sale leaseback transactions and to consolidate, merge, transfer or sell all, or substantially all of our assets. It also contains provisions requiring that U. S. Steel make an offer to repurchasepurchase the 20252029 Senior Notes from holders upon a change of control under certain specified circumstances, as well as other customary provisions.

2029 Senior Secured Notes
On September 18, 2020, Big River Steel's indirect subsidiaries, Big River Steel LLC and BRS Finance Corp. (Issuers), issued $900 million in aggregate principal amount of 6.625% Senior Secured Notes up(Green Bonds) (2029 Senior Secured Notes). The 2029 Senior Secured Notes pay interest semi-annually in arrears on January 31 and July 31 of each year and will mature on January 31, 2029, unless earlier redeemed or repurchased.

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On and after September 15, 2023, Big River Steel LLC may redeem the 2029 Senior Secured Notes 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 Notes, if any, to, but excluding, the applicable redemption date, if redeemed during the twelve-month period beginning on September 15 of each of the years indicated below.

YearRedemption Price
2023103.313 %
2024101.656 %
2025 and thereafter100.000 %

The obligations under the 2029 Senior Secured Notes are fully and unconditionally guaranteed, jointly and severally, on a secured basis by the Issuers’ parent company, BRS Intermediate Holdings LLC (BRS Intermediate), which is a direct subsidiary of Big River Steel, and by all future direct and indirect wholly owned domestic subsidiaries of the Issuers. Additionally, the 2029 Senior Secured Notes and related guarantees are secured by (i) first priority liens on most of the tangible and intangible assets of the Issuers and the guarantors and all of the equity interests of the Issuers held by BRS Intermediate (shared in equal priority with each other pari passu lien secured party) (ii) and second priority liens on accounts receivable, inventory and certain other related assets of the Issuers and the guarantors (shared in equal priority with each other pari passu lien secured party).

If the Issuers or BRS Intermediate experience specified change in control events, the Issuers must make an amount of asset sale proceeds that remain uninvestedoffer to purchase the 2029 Senior Secured Notes. If the Issuers sell assets under specified circumstances, the Issuers must make an offer to purchase the 2029 Senior Secured Notes at a price equal to 100% of the aggregate principal amount plus accrued and unpaid interest. The Indenture also limits the ability of the Issuers and their restricted subsidiaries to: incur or guarantee additional indebtedness; pay dividends and make other restricted payments; make investments; consummate certain asset sales; engage in transactions with affiliates; grant or assume liens; and consolidate, merge or transfer all or substantially all of their assets. The Indenture also includes other customary events of default.

Big River Steel Environmental Revenue Bonds - Series 2019
On May 31, 2019, Arkansas Development Finance Authority (ADFA) issued $487 million of tax-exempt bonds and loaned 100% of the proceeds to Big River Steel LLC under a bond financing agreement to finance the expansion of Big River Steel's electric arc furnace steel mill and fund the issuance cost of the bonds (2019 ADFA Bonds). The 2019 ADFA Bonds accrue interest at the rate of 4.50% per annum payable semiannually on March 1 and September 1 of each year with a final maturity of September 1, 2049.

The 2019 ADFA Bonds are subject to optional redemption during the periods and at the redemption prices shown below plus, in each case, accrued interest.

YearRedemption Price
September 1, 2026 to August 31, 2027103 %
September 1, 2027 to August 31, 2028102 %
September 1, 2028 to August 31, 2029101 %
On and after September 1, 2029100 %
Prior to September 1, 2026, the 2019 ADFA Bonds are not redeemable.

The 2019 ADFA Bonds are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by first priority liens on most of the tangible and intangible assets and second priority liens on accounts receivable, inventory and certain other related assets of BRS Intermediate and by all future direct and indirect wholly owned domestic subsidiaries of the Issuers.

The 2019 ADFA Bonds are subject to certain mandatory sinking fund redemption provisions beginning in 2040, as well as extraordinary mandatory redemption, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption, from surplus funds at the earlier of the completion of the tax-exempt project or expiration of a certain period for construction financings, and unpaidupon an event of taxability. The 2019 ADFA Bonds are subject to substantially similar asset sale offer and change of control offer provisions, affirmative and negative covenants, events of default and remedies as the Indenture governing the 2029 Senior Secured Notes.

Big River Steel Environmental Revenue Bonds - Series 2020
On September 10, 2020, ADFA issued $265 million of tax-exempt bonds with a green bond designation and loaned 100% of the proceeds to Big River Steel LLC under a bond financing agreement to finance or refinance the expansion of Big River Steel's electric arc furnace steel mill and fund the issuance cost of the bonds (2020 ADFA Bonds). The 2020 ADFA Bonds accrue interest at 4.75% per annum payable semi-annually on March 1 and September 1 of each year with final maturity on September 1, 2049.
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The 2020 ADFA Bonds are subject to optional redemption during the periods and at the redemption prices shown below, plus, in each case accrued interest.

YearRedemption Price
September 1, 2027 to August 31, 2028103 %
September 1, 2028 to August 31, 2029102 %
September 1, 2029 to August 31, 2030101 %
On and after September 1, 2030100 %

At any time prior to September 1, 2027, Big River Steel LLC may also redeem the 2020 ADFA Bonds, at its 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 2020 ADFA Bonds to be redeemed, or the present value of the redemption price of the 2020 ADFA Bonds if anythey were redeemed on September 1, 2027 plus interest payments due through September 1, 2027 discounted to the date of such purchase. The indenture pursuantredemption on a semi-annual basis at the applicable tax exempt municipal bond rate and accrued and unpaid interest to which the 2025 Senior Secured Notes were issued contains limitations on the incurrence of additional debt secured by liens and additional customary covenants and other obligations.date fixed for redemption.

Export Credit AgreementThe 2020 ADFA Bonds are fully and unconditionally guaranteed, jointly and severally, on a secured basis by certain of Big River Steel's subsidiaries and subject to first priority liens and second priority liens on certain Big River Steel collateral.
Funding
The 2020 ADFA Bonds are subject to substantially similar asset sale offer and change of U. S. Steel’s vendor supported Export Credit Agreement (ECA) occurredcontrol offer provisions, affirmative and negative covenants, events of default and remedies as the Indenture governing the 2029 Senior Secured Notes.

Arkansas Teacher Retirement System Notes Payable
Big River Steel entered into 3 financing agreements with the Arkansas Teacher Retirement System during 2018 and 2019. The interest rates on February 19, 2020. U. S.the notes range from 5.50% to 7.75% at present. Interest on these agreements may be paid-in-kind through the respective dates of maturity and therefore requires no interim debt service by Big River Steel borrowed $104 millionprior to the date of maturity or early repayment, as the case may be. Big River Steel may prepay amounts owed under these agreements at any time without penalty. One such agreement has the ECA asbenefit of a pledge of future income streams generated through an anticipated monetization of recycling tax credits provided by the State of Arkansas in conjunction with the expansion of Big River Steel. As of June 30, 2021, the outstanding balance for these financing agreements was $106 million.

Big River Steel ABL Facility
On August 23, 2017, subsidiaries of Big River Steel entered into a senior secured asset-based revolving credit facility and subsequently amended such facility (Big River Steel ABL Facility) by entering into the First Amendment to the Big River Steel ABL Credit Agreement, dated as of September 10, 2020. Loan repayments start six months after the starting pointThe Big River Steel ABL 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 credit as definedBig River Steel in the loan agreement with a total repayment termeach case subject to permitted liens.

The Big River Steel ABL Facility provides for borrowings for working capital and general corporate purposes in an amount equal up to eight years. Loan availabilitythe lesser of (a) $350 million and repayment terms are(b) a borrowing base calculated based on specified percentages of eligible accounts receivables and inventory, subject to certain customary covenantsadjustments and events of default.reserves. The purpose ofBig River Steel ABL Facility matures on August 23, 2022. The outstanding principal balance was 0 at June 30, 2021. Availability under 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. In responseBig River Steel ABL Facility, pursuant to the decline in demand for our products resulting from the COVID-19 pandemic, we have delayed construction of our endless casting and rolling lineavailable borrowing base was $350 million at Mon Valley Works. We have also paused our borrowing under the ECA pending an update to the agreement or resumption of construction.June 30, 2021.

AmendedThe Big River Steel ABL Facility provides for borrowings at interest rates based on defined, short-term market rates plus a spread based on availability. The Big River Steel ABL Facility also requires a commitment fee on the unused portion of the Big River Steel ABL Facility, determined quarterly based on Big River Steel LLC's utilization levels.

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 Restated $13 million. Based on the most recent four quarters as of March 31, 2021, Big River Steel would have met the fixed charge coverage ratio test. The Big River Steel ABL Facility includes affirmative and negative covenants that are customary for facilities of this type. The Big River Steel ABL Facility also includes customary events of default.

Credit Facility Agreement
As of June 30, 2020,2021, there was $1.4 billionwere approximately $5 million of letters of credit issued, and no loans drawn under the $2.0 billion Fifth Amended and Restated Credit Facility Agreement (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 Credit Facility Agreement is less than the greater of 10ten percent of the total aggregate commitments and $200 million. Based on the most recent four quarters as of June 30, 2020, we2021, the Company would not have met the fixed charge coverage ratio test; therefore, the amount available to the Company under this facility is effectively reduced by $200 million.test. In
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addition, since the value of our inventory and trade accounts receivable less specified reserves calculated in accordance with the Credit Facility Agreement do not support the full amount of the facility at June 30, 2020,2021, the amount available to the Company under this facility was further reduced by $210$77 million. The availability under the Credit Facility Agreement was $190 million$1.918 billion as of June 30, 2020.

The 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 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 Credit Facility Agreement. Borrowings are secured by liens on certain North American inventory and trade accounts receivable.

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The Credit Facility Agreement has customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse change in our business or financial condition that is not disclosed in our last published financial results. The facility also has customary defaults, including a cross-default to material indebtedness of U. S. Steel and our subsidiaries.2021.

U. S. Steel Košice (USSK) Credit Facilities
At June 30, 2020,2021, USSK had no borrowings of €350 million (approximately $392 million) under its €460 million (approximately $515$547 million) revolving credit facility (USSK Credit Agreement). The USSK Credit Agreement contains certain USSK specific financial covenants including a minimum stockholders' equity to assets ratio 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. USSK must maintain a net debt to EBITDA ratio of less than 6.5 as of June 30, 2021 and 3.5 for semi-annual measurements starting December 31, 2021. The Company has determined that it may not be able to comply with the net debt to EBITDA covenant as of June 30, 2021 based on recent forecast scenarios. Although we may seek to obtain a waiver for this covenant, we believe that we will have sufficient cash on hand as of June 30, 2021 to reduce net debt as calculated under the covenant to avoid a covenant violation, if necessary. If covenant compliance requirements are not amended or waived or we are not able to reduce USSK's net debt with cash on hand, it may result in an event of default, 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. An event of default under the USSK Credit Agreement could also result in an event of default under the Credit Facility 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.

At June 30, 2020, USSK had availability of €110 million (approximately $123 million) under the USSK Credit Agreement. The USSK Credit Agreement expires in September 2023.

The USSK Credit Agreement contains customary representations and warranties including, as a condition to borrowing, that it met certain financial covenants since the last measurement date, and that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, and representations as to no material adverse change in our business or financial condition since December 31, 2017. The USSK Credit Facility Agreement also contains customary events of default, including a cross-default upon acceleration of material indebtedness of USSK and its subsidiaries.
At June 30, 2020,2021, USSK had 0 borrowings under its €20 million and €10 million credit facilities (collectively, approximately $34$36 million) and the availability was approximately $32 million due to approximately $2$4 million of customs and other guarantees outstanding.
Each of these facilities bear interest at the applicable inter-bank offer rate plus a margin and contain customary terms and conditions.
USS-POSCO Industries Credit Facility
At June 30, 2020, USS-POSCO Industries (UPI) had borrowings of $77 million under its $110 million revolving credit facility (UPI Amended Credit Facility). Borrowings are secured by liens on certain UPI inventory and trade accounts receivable. The UPI Amended Credit Facility 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. At June 30, 2020, UPI had availability of $7 million under the UPI Amended Credit Facility. The UPI Amended Credit Facility agreement was terminated on July 17, 2020 and the outstanding borrowings were repaid using cash on hand. Upon termination of the UPI Amended Credit Facility, UPI was added as a subsidiary guarantor to the Credit Facility Agreement which increased the inventory and trade accounts receivable under that facility and resulted in an increase in U. S. Steel's liquidity.
Change in control event
If there is a change in control of U. S. Steel, the following may occur: (a) debt obligations totaling $5,129 million as of June 30, 2020 may be declared due and payable; (b) the Credit Facility Agreement and the
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USSK credit facilities may be terminated and any amounts outstanding declared due and payable; and (c) U. S. Steel may be required to either purchase the leased Fairfield Works slab caster for approximately $17 million or provide a letter of credit to secure the remaining obligation.
16.    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 Condensed Consolidated Balance Sheet approximate fair value. See Note 14 for disclosure of U. S. Steel’s derivative instruments, which are accounted for at fair value on a recurring basis.
Big River Steel
On October 31, 2019, a wholly owned subsidiary of U. S. Steel purchased a 49.9% ownership interest in Big River Steel. The transaction included a call option (U. S. Steel Call Option) to acquire the remaining equity interest within the next four years at an agreed-upon price formula. The investment purchase included other options that were marked to fair value during 2020. The net change in fair value of the options related to our purchase of the equity investment in Big River Steel during the six months ended June 30, 2020 resulted in ana $6 million decrease to net interest and other financial costs. The financial impact was due to an increase inWhen the U. S. Steel’s credit spread and higher volatility partially offset by a lower risk free interest rateSteel Call Option was exercised on December 8, 2020, the other options were legally extinguished and a lowernew contingent forward asset was recorded for $11 million. As the contingent forward was a contract to purchase a business, it was no longer considered a derivative subject to ASC 815, Derivative Instruments and Hedging Activities, and was not subject to subsequent fair value adjustments. The contingent forward asset was removed with the recognition of the gain on the previously held investment in Big River Steel equity value.
The following table showswhen the changepurchase of the remaining interest closed on January 15, 2021. See Note 20 to the Consolidated Financial Statements in fair value by optionour Annual Report on Form 10-K for the six month period ended June 30, 2020.year-ended December 31, 2020 and Note 5 for further details.
(In millions)Balance Sheet LocationFair Value asset/(liability)
at December 31, 2019
Fair Value
Mark to Market
gain/(loss)
Fair Value asset/(liability)
at June 30, 2020
U. S. Steel Call OptionInvestments and Long-Term Receivables$166  $(35) $131  
Class B Common
Put Option
Deferred credits and other noncurrent liabilities$(192) $42  $(150) 
Class B Common
Call Option
Deferred credits and other noncurrent liabilities$(2) $(1) $(3) 
Net Mark to Market Impact$ 

The fair valuePrior to exercise of the U. S. Steel Call Option, the options were 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 Class B Common Put Option are most significantly impacted by certain unobservable inputs includingsignificant to the fair value measurement. The simulation relied on assumptions that included Big River Steel’sSteel's equity value, volatility, the risk-free interest rate and volatility. The Class B Common Put Option is also significantly impacted by U. S. Steel’sSteel's credit spread. See Note 20 of the audited financial statements in the United States Steel Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for further details.
Stelco Option for Minntac Mine Interest
On April 30, 2020 (the Effective(Effective Date), the Company entered into an Option Agreement with Stelco, Inc. (Stelco), that grants Stelco the option to purchase a 25 percent interest (the Option(Option Interest) in a to-be-formed entity (the Joint(Joint Venture) that will own the Company’s current iron ore mine located in Mt. Iron, Minnesota (the Minntac(Minntac Mine). As consideration for the Option, Stelco will paypaid the Company an aggregate amount of $100 million in 5 $20 million installments, which began on the Effective Date and will endended on December 31, 2020.2020 and are recorded net of transaction costs in noncontrolling interest in the Condensed 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 in the form of a one-time special distribution, and the parties will engage in good faith negotiations to finalize the master agreement (pursuant to which Stelco will acquire the Option Interest) and the limited liability company agreement of the Joint Venture. As of June 30, 2020, Stelco has made installment payments totaling $40 million which are recorded net of transaction costs in noncontrolling interest in the Condensed Consolidated Balance Sheet.

The following table summarizes U. S. Steel’s financial liabilities that were not carried at fair value at June 30, 20202021 and December 31, 2019.2020. The fair value of long-term debt was determined using Level 2 inputs.
June 30, 2020December 31, 2019June 30, 2021December 31, 2020
(In millions)(In millions)Fair
Value
Carrying
Amount
Fair
Value
Carrying
Amount
(In millions)Fair
Value
Carrying
Amount
Fair
Value
Carrying
Amount
Financial liabilities:Financial liabilities:Financial liabilities:
Long-term debt (a)
$5,029  $5,510  $3,576  $3,575  
Short-term and long-term debt (a)
Short-term and long-term debt (a)
$6,005 $5,265 $5,323 $4,806 
(a) Excludes finance lease obligations.

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17.    Statement of Changes in Stockholders’ Equity

The following table reflects the first six months of 20202021 and 20192020 reconciliation of the carrying amount of total equity, equity attributable to U. S. Steel and equity attributable to noncontrolling interests:
Six Months Ended June 30, 2020 (In millions)TotalRetained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive
(Loss) Income
Common
Stock
Treasury
Stock
Paid-in
Capital
Non-
Controlling
Interest
Balance at beginning of year$4,093  $544  $(478) $179  $(173) $4,020  $ 
Comprehensive income (loss):
Net loss(391) (391) —  —  —  —  —  
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments52  —  52  —  —  —  —  
Currency translation adjustment(23) —  (23) —  —  —  —  
Derivative financial instruments(5) —  (5) 
Employee stock plans —  —  —  (2)  —  
Dividends paid on common stock(2) (2) —  —  —  —  —  
Balance at March 31, 20203,726  151  (454) 179  (175) 4,024   
Comprehensive income (loss):
Net loss(589) (589) —  —  —  —  —  
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments29  —  29  —  —  —  —  
Currency translation adjustment20  —  20  —  —  —  —  
Derivative financial instruments15  —  15  —  —  —  —  
Employee stock plans —  —  —  —   —  
Common Stock Issued410  —  —  50  —  360  —  
Dividends paid on common stock(1) —  —  —  —  (1) —  
Stelco Option Agreement37  —  —  —  —  —  37  
Other(1) —  —  —  —  —  (1) 
Balance at June 30, 2020$3,654  $(438) $(390) $229  $(175) $4,391  $37  

Six Months Ended June 30, 2021 (In millions)Total(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive
(Loss) Income
Common
Stock
Treasury
Stock
Paid-in
Capital
Non-
Controlling
Interest
Balance at beginning of year$3,879 $(623)$(47)$229 $(175)$4,402 $93 
Comprehensive income (loss):
Net earnings91 91      
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments24  24     
Currency translation adjustment(47) (47)    
Derivative financial instruments(20) (20)    
Employee stock plans6   2 (7)11  
Common Stock Issued790   48  742  
Dividends paid on common stock(3)0    (3) 
Balance at March 31, 2021$4,720 $(532)$(90)$279 $(182)$5,152 $93 
Comprehensive income (loss):
Net earnings1,012 1,012 — — — — — 
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments205 — 205 — — — — 
Currency translation adjustment23 — 23 — — — — 
Derivative financial instruments(31)— (31)— — — — 
Employee stock plans17 — — (1)18 — 
Dividends paid on common stock(2)— — — (2)— 
Other(1)— —    (1)
Balance at June 30, 2021$5,943 $480 $107 $279 $(183)$5,168 $92 
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Six Months Ended June 30, 2019 (In millions)TotalRetained EarningsAccumulated
Other
Comprehensive
(Loss) Income
Common
Stock
Treasury
Stock
Paid-in
Capital
Non-
Controlling
Interest
Balance at beginning of year$4,203  $1,212  $(1,026) $177  $(78) $3,917  $ 
Comprehensive income (loss):
Net earnings54  54  —  —  —  —  —  
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments32  —  32  —  —  —  —  
Currency translation adjustment(17) —  (17) —  —  —  —  
Derivative financial instruments15  15  
Employee stock plans —  —   (6)  —  
Common stock repurchased(42) —  —  —  (42) —  —  
Dividends paid on common stock(9) (9) —  —  —  —  —  
Cumulative effect upon adoption of lease accounting standard(2) (2) —  —  —  —  —  
Balance at March 31, 20194,236  1,255  (996) 178  (126) 3,924   
Comprehensive income (loss):
Net earnings68  68  —  —  —  —  —  
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments32  —  32  —  —  —  —  
Currency translation adjustment12  —  12  —  —  —  —  
Derivative financial instruments(11) —  (11) —  —  —  —  
Employee stock plans12  —  —   (1) 12  —  
Common stock repurchased(28) —  —  —  (28) —  —  
Dividends paid on common stock(9) (9) —  —  —  —  —  
Balance at June 30, 2019$4,312  $1,314  $(963) $179  $(155) $3,936  $ 

Six Months Ended June 30, 2020 (In millions)TotalRetained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive
Loss
Common
Stock
Treasury
Stock
Paid-in
Capital
Non-
Controlling
Interest
Balance at beginning of year$4,093 $544 $(478)$179 $(173)$4,020 $1 
Comprehensive income (loss):
Net loss(391)(391)     
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments52  52     
Currency translation adjustment(23) (23)    
Derivative financial instruments(5) (5)    
Employee stock plans2   0 (2)4  
Dividends paid on common stock(2)(2)     
Balance at March 31, 2020$3,726 $151 $(454)$179 $(175)$4,024 $1 
Comprehensive income (loss):
Net loss(589)(589)     
Other comprehensive income (loss), net of tax:
Pension and other benefit adjustments29  29     
Currency translation adjustment20  20     
Derivative financial instruments15  15     
Employee stock plans8   0 0 8  
Common Stock Issued410   50  360  
Dividends paid on common stock(1)0    (1) 
Stelco Option Agreement37      37 
Other(1)     (1)
Balance at June 30, 2020$3,654 $(438)$(390)$229 $(175)$4,391 $37 
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18.    Reclassifications from Accumulated Other Comprehensive Income (AOCI)
(In millions)Pension and
Other Benefit
Items
Foreign
Currency
Items
Unrealized Gain (Loss) on DerivativesTotal
Balance at December 31, 2019$(843) $381  $(16) $(478) 
Other comprehensive income (loss) before reclassifications (3) (8) (3) 
Amounts reclassified from AOCI (a)
73  —  18  91  
Net current-period other comprehensive income (loss)81  (3) 10  88  
Balance at June 30, 2020$(762) $378  $(6) $(390) 
Balance at December 31, 2018$(1,416) $403  $(13) $(1,026) 
Other comprehensive income (loss) before reclassifications (5) 15  11  
Amounts reclassified from AOCI (a)
63  —  (11) 52  
Net current-period other comprehensive income (loss)64  (5)  63  
Balance at June 30, 2019$(1,352) $398  $(9) $(963) 

(In millions)Pension and
Other Benefit
Items
Foreign
Currency
Items
Unrealized Gain (Loss) on DerivativesTotal
Balance at December 31, 2020$(458)$449 $(38)$(47)
Other comprehensive income (loss) before reclassifications191 (24)(79)88 
Amounts reclassified from AOCI (a)
38 0 28 66 
Net current-period other comprehensive income (loss)229 (24)(51)154 
Balance at June 30, 2021$(229)$425 $(89)$107 
Balance at December 31, 2019$(843)$381 $(16)$(478)
Other comprehensive income (loss) before reclassifications(3)(8)(3)
Amounts reclassified from AOCI (a)
73 18 91 
Net current-period other comprehensive income (loss)81 (3)10 88 
Balance at June 30, 2020$(762)$378 $(6)$(390)
(a)See table below for further details.

Amount reclassified from AOCI (a)
Amount reclassified from AOCI (a)
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
Details about AOCI components (in million)2020201920202019
Details about AOCI components (in millions)Details about AOCI components (in millions)2021202020212020
Amortization of pension and other benefit itemsAmortization of pension and other benefit itemsAmortization of pension and other benefit items
Prior service costs (a)
$(1) $ $(3) $15  
Prior service credits (a)
Prior service credits (a)
$(6)$(1)$(13)$(3)
Actuarial losses (a)
Actuarial losses (a)
32  34  64  68  
Actuarial losses (a)
32 32 63 64 
Settlement, termination and curtailment losses (a)
Settlement, termination and curtailment losses (a)
1 1 
UPI Purchase Accounting AdjustmentUPI Purchase Accounting Adjustment—  —  

23  

—  UPI Purchase Accounting Adjustment0 0 23 
Total pensions and other benefits itemsTotal pensions and other benefits items31  42  84  83  Total pensions and other benefits items27 31 51 84 
Derivative reclassifications to Condensed Consolidated Statements of OperationsDerivative reclassifications to Condensed Consolidated Statements of Operations10  (1) 22  (14) Derivative reclassifications to Condensed Consolidated Statements of Operations22 10 37 22 
Total before taxTotal before tax41  41  106  69  Total before tax49 41 88 106 
Tax provisionTax provision(7) (10) (15) (17) Tax provision(21)(7)(22)(15)
Net of taxNet of tax$34  $31  $91  $52  Net of tax$28 $34 $66 $91 
(a)These AOCI components are included in the computation of net periodic benefit cost (seecost. See Note 10 for additional details).

details.
19.    Transactions with Related Parties
Related party sales and service transactions are primarily related to equity investees and were $91$341 million and $370$91 million for the three months ended June 30, 20202021 and 2019,2020, respectively and $442$636 million and $745$442 million for the six months ended June 30, 2021 and 2020, and 2019, respectively. The transaction to purchase UPI included the assumption of $135 million of accounts payable owed to U. S. Steel for prior sales of steel substrate to UPI. This amount is reflected as a reduction in receivables from related parties on the Company's Condensed Consolidated Balance Sheet as both the corresponding receivable and payable amounts between U. S. Steel and UPI are eliminated in consolidation upon acquisition. See Note 5 to the Condensed Consolidated Financial Statements for further details.
Purchases from related parties for outside processing services provided by equity investees amounted to $10 million and $7 million for the three months ended June 30, 2020 and 2019, respectively and $38 million and $16 million for the six months ended June 30, 2020 and 2019, respectively. Purchases of iron ore pellets from related parties amounted to $16 million and $31 million for the three months ended June 30, 2020 and 2019, respectively, and $34 million and $51 million for the six months ended June 30, 2020 and 2019.
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Accounts payable to related parties include balances due to PRO-TEC Coating Company, LLC (PRO-TEC) of $72$143 million and $82$86 million at June 30, 20202021 and December 31, 2019,2020, 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 those receivables. U. S. Steel also provides PRO-TEC marketing, selling and customer service functions. Payables to other related parties totaled $2$1 million and $19 million for the periods ending June 30, 20202021 and December 31, 2019.2020, respectively.
Purchases from related parties for outside processing services provided by equity investees amounted to $6 million and $10 million for the three months ended June 30, 2021 and 2020, respectively and $26 million and $38 million for the six months ended June 30, 2021 and 2020, respectively. Purchases of iron ore pellets from related parties amounted to $30 million and $16 million for the three months ended June 30, 2021 and 2020, respectively and $54 million and $34 million for the six months ended June 30, 2021 and 2020, respectively.
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20.    Restructuring and Other Charges
During the three months ended June 30, 2021, the Company recorded restructuring and other charges of $31 million, which consist of $25 million for Great Lakes Works and $6 million for environmental and other charges. Cash payments were made related to severance and exit costs of approximately $15 million.
During the six months ended June 30, 2021, the Company recorded restructuring and other charges of $37 million, which consists of $27 million for Great Lakes Works and $10 million for environmental related charges at other facilities and costs related to severance. Cash payments were made related to severance and exit costs of approximately $44 million.
During the three months ended June 30, 2020, the Company recorded restructuring and other charges of $89 million, which consists of charges of $47 million for the indefinite idling of our Keetac mining operations and a significant portion of Great Lakes Works, $2 million for other charges, $8 million for employee benefit costs related to Company-wide headcount reductions and $32 million headcount reductions under a Voluntary Early Retirement Program (VERP) offered at USSK.
During the six months ended June 30, 2020, the Company recorded restructuring and other charges of $130 million, which consists of charges of $72 million for the indefinite idling of our Keetac mining operations and a significant portion of Great Lakes Works, $13 million for the indefinite idling of Lorain Tubular Operations and Lone Star Tubular Operations, $13 million and $32 million for employee benefit costs related to Company-wide headcount reductions and headcount reductions under a VERP offered at USSK, respectively. Cash payments were made related to severance and exit costs of approximately $33 million.
The activity in the accrued balances incurred in relation to restructuring programs during the six months ended June 30, 20202021 were as follows:

(In millions)(In millions)Employee Related CostsExit CostsNon-cash ChargesTotal(In millions)Employee Related CostsExit CostsNon-cash ChargesTotal
Balance at December 31, 2019$87  $125  $—  $212  
Balance at December 31, 2020Balance at December 31, 2020$51 $126 $$177 
Additional chargesAdditional charges75  51   130  Additional charges3 33 1 37 
Cash payments/utilization(a)Cash payments/utilization(a)(12) (21) (4) (37) Cash payments/utilization(a)(27)(23)(1)(51)
Balance at June 30, 2020$150  $155  $—  $305  
Balance at June 30, 2021Balance at June 30, 2021$27 $136 $0 $163 
(a)Payments of $6 million were made from the pension fund trust.
(a)Payments of $6 million were made from the pension fund trust.

Accrued liabilities for restructuring programs are included in the following balance sheet lines:

(In millions)June 30, 2020December 31, 2019
Accounts payable$63  $46  
Payroll and benefits payable119  64  
Employee benefits30  23  
Deferred credits and other noncurrent liabilities93  79  
Total$305  $212  

(In millions)June 30, 2021December 31, 2020
Accounts payable$38 $34 
Payroll and benefits payable11 29 
Employee benefits16 22 
Deferred credits and other noncurrent liabilities98 92 
Total$163 $177 
21.    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 Condensed 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.
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Asbestos matters As of June 30, 2020,2021, U. S. Steel was a defendant in approximately 816935 active cases involving approximately 2,4002,525 plaintiffs. The vast majority of these cases involve multiple defendants. About 1,540,1,545, or approximately 6461 percent, of these plaintiff claims are currently pending in jurisdictionsa jurisdiction which permitpermits filings with massive numbers of plaintiffs. At December 31, 2019,2020, U. S. Steel was a defendant in approximately 800855 cases involving approximately 2,3902,445 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.
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The following table shows the number of asbestos claims in the current period and the prior three years:
Period endedPeriod endedOpening
Number
of Claims
Claims
Dismissed,
Settled and
Resolved (a)
New ClaimsClosing
Number
of Claims
Period endedOpening
Number
of Claims
Claims
Dismissed,
Settled and
Resolved (a)
New ClaimsClosing
Number
of Claims
December 31, 20173,3402752503,315
December 31, 2018December 31, 20183,3151,2852902,320December 31, 20183,3151,2852902,320
December 31, 2019December 31, 20192,3201952652,390December 31, 20192,3201952652,390
June 30, 20202,3901301402,400
December 31, 2020December 31, 20202,3902402952,445
June 30, 2021June 30, 20212,445751552,525
(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 3 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.
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 2020 and 2019, the Company engaged an outside valuation consultant to assist in assessing its ability to estimate an accrual 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.
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:
(In millions)Six Months Ended June 30, 20202021
Beginning of period$186146 
Accruals for environmental remediation deemed probable and reasonably estimable2 
Obligations settled(15)(10)
End of period$173138 
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Accrued liabilities for remediation activities are included in the following Condensed Consolidated Balance Sheet lines:
(In millions)(In millions)June 30, 2020December 31, 2019(In millions)June 30, 2021December 31, 2020
Accounts payable$54  $53  
Accounts payable and other accrued liabilitiesAccounts payable and other accrued liabilities$42 $43 
Deferred credits and other noncurrent liabilitiesDeferred credits and other noncurrent liabilities119  133  Deferred credits and other noncurrent liabilities96 103 
TotalTotal$173  $186  Total$138 $146 
Expenses related to remediation are recorded in cost of sales and were immaterial for both the three and six-month periods ended June 30, 20202021 and June 30, 2019.2020. 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 2040 to 3060 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 categorizethe Company categorizes projects as follows:
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(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 65 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, GaryDuluth Works and the former steelmaking plant at Joliet, Illinois. As of June 30, 2020,2021, accrued liabilities for these projects totaled $2$34 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$50 million to $45$75 million.
(2)Significant Projects with Defined Scope - Projects with significant accrued liabilities with a defined scope. As of June 30, 2020,2021, there are 42 significant projects with defined scope greater than or equal to $5 million each, with a total accrued liability of $115$43 million. These projects are Gary Resource Conservation and Recovery Act (RCRA) (accrued liability of $24 million), and the former Geneva facility (accrued liability of $38 million), the Cherryvale zinc site (accrued liability of $9 million) and the former Duluth facility St. Louis River Estuary (accrued liability of $44$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 23 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 June 30, 20202021 was $3$7 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 June 30, 20202021 was approximately $3$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 million at June 30, 20202021 and were based on known scopes of work.
Administrative and Legal Costs – As of June 30, 2020,2021, U. S. Steel had an accrued liability of $11$13 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. InSuch capital expenditures totaled $7 million in both the first six months of 20202021 and 2019, such capital expenditures totaled $7 million and $30 million, respectively.2020. 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 (EU) Environmental Requirements - 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 approval of the Slovak National Allocation table in July 2021. The Slovak Ministry of Environment's decision on USSE’s free allocation for the first five years of allowancesthe Phase IV period is expected by the end of September 2021. In the fourth quarter of 2020 USSE started purchasing European Union Allowances (EUA) for the Phase III period, which covers the years 2013 through 2020 is 48 million allowances. Based on projected total production levels, we started to purchase allowances in the third quarter of 2017 to meet the annual compliance submission in the future.IV period. As of June 30, 2020,2021, we have purchasedpre-purchased approximately 12.32.0 million European Union AllowancesEUA totaling €141.1€67 million (approximately $154.6$79 million) to cover the estimated shortfall of emission allowances. We estimate that the total shortfall will be approximately 12 million allowances for the Phase III period. The exact cost of complying with the ETS regulations will depend on future production levels and future emissions intensity levels, however our estimated shortfall of emission allowances is covered by purchased European Union Allowances..
The EU’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 $151$164 million) over the actual program period. These costs were partially offset by the EU funding received and may be mitigated over the next measurement periods if USSK complies with certain financial covenants, which are assessed annually according to EU funding rules.annually. USSK complied with these covenants as of June 30, 2020.2021. 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 $173$138 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 $7 million at June 30, 2020.2021.
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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 $25$21 million at June 30, 2020)2021). NaN liability has been recorded for these guarantees as the potential loss is not probable.
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
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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 $209$215 million as of June 30, 2020,2021, 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 current and noncurrent assets, totaled $129$142 million and $190$133 million at June 30, 20202021 and December 31, 2019,2020, respectively.
Capital Commitments At June 30, 2020,2021, U. S. Steel’s contractual commitments to acquire property, plant and equipment totaled $790$573 million.
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):
Remainder of 20202021202220232024Later
Years
Total
$306$699$622$386$160$851$3,024
Remainder of 20212022202320242025Later
Years
Total
$616$1,136$464$227$204$842$3,489
The majority of U. S. Steel’s unconditional purchase obligations relates to the supply of industrial gases, and certain energy and utility services with terms ranging from two to 1615 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 June 30, 2020,2021, if U. S. Steel were to terminate the agreement, it may be obligated to pay in excess of $125$95 million.
Total payments relating to unconditional purchase obligations were $134$169 million and $168$134 million for the three months ended June 30, 20202021 and 2019,2020, respectively, and $302$369 million and $326$302 million for the six months ended June 30, 20202021 and 2019,2020, respectively.
22.    Significant Equity Investments

Summarized unaudited income statement information for our significant equity investments for the six months ended June 30, 2020 and 2019 is reported below (amounts represent 100% of investee financial information):
(In millions)20202019
Net sales$461  $648  
Cost of sales435  559  
Operating (loss) income(1) 64  
Net (loss) earnings(23) 58  
Net (loss) earnings attributable to significant equity investments(23) 58  

U. S. Steel's portion of the equity in net (loss) earnings of the significant equity investments above was $(10) million and $30 million for the six months ended June 30, 2020 and 2019, respectively, which is included in the earnings from investees line on the Condensed Consolidated Statement of Operations.
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23. Common Stock Issued and Repurchased
OnIn February 2021, U. S. Steel issued 48,300,000 shares of common stock for net proceeds of approximately $790 million.
In June 22, 2020, U. S. Steel issued 50 million shares of common stock (par value $1 per share) at a price of $8.2075 per share, resulting infor net proceeds of approximately $410 million. An overallotment option was granted to the underwriter for 7.5 million shares at a price of $8.2075 per share. The overallotment option expired unexercised on
23.    Subsequent Event
On July 17, 2020.
In November 2018,23, 2021, U. S. Steel announced a two year common stock repurchase programchanges to its Credit Facility Agreement and Big River Steel ABL Facility that allowsreward performance in meeting sustainability targets, part of the ongoing execution of the company’s Best for the repurchaseAll℠ strategy of upcreating profitable pathways to $300 million of its outstanding common stock from timesustainable steelmaking. The Credit Facility Agreement has been amended to timeinclude an increase or decrease in the open market or privately negotiated transactions atmargin payable based on achievement targets related to carbon reduction, safety performance and facility certifications by ResponsibleSteelTM. In addition to the discretion of management. Duringnew sustainability link, the six months ended June 30, 2019, U. S. Steel repurchased 3,964,191 shares of common stock for approximately $70 million. In December 2019,Credit Facility Agreement has been amended to reduce the Board of Directors terminatedcredit line to $1.75 billion from $2.0 billion, which is consistent with the authorization for the common stock repurchase program.

Company's efforts to optimize its global liquidity position.
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
U. S. Steel's results in the three and six months ended June 30, 2021 compared to the same periods in 2020 werebenefited from significantly impactedimproved business conditions as certain challenges presented by market challenges in eachthe COVID-19 pandemic began to subside. Flat-
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Rolled results improved due to higher steel demand across most consumer and manufacturing industries, pushing both spot and contract prices higher. In Mini Mill, with the acquisition of the Company's three reportable segments: North American Flat-Rolled (Flat-Rolled), U. S.Big River Steel Europe (USSE) and Tubular Products (Tubular). In Flat-Rolled, theon January 15, 2021, results were largely impacted byadded for the resetfirst time in the first quarter of calendar year fixed contract prices, lost shipments2021. USSE results improved due to many customers ceasing operations due to restrictions put in place in response to the coronavirus (COVID-19) pandemic, and the resultant spot price erosion realized as U.S. industry capacity utilization plummeted to the lowest level in 11 years. USSE continues to experience margin compression due to ongoing weakstronger performance of the manufacturing sector and construction sectors and higher selling prices though continued high levels of imports.imports persist. In Tubular, net sales increased slightly in the COVID-19 outbreak reduced demand forthree months ended June 30, 2021 and decreased in the six months ended June 30, 2021 as disruptions in the oil and gas and severely impacted energy prices, creating unprecedentedindustry continue to create significant reductions of drilling activity in the U.S. and continued high levels of tubular imports persist.

Net sales by segment for the three months and six months ended June 30, 20202021 and 20192020 are set forth in the following table:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions, excluding intersegment sales)(Dollars in millions, excluding intersegment sales)20202019%
Change
20202019%
Change
(Dollars in millions, excluding intersegment sales)20212020%
Change
20212020%
Change
Flat-Rolled Products (Flat-Rolled)Flat-Rolled Products (Flat-Rolled)$1,497  $2,539  (41)%$3,471  $4,944  (30)%Flat-Rolled Products (Flat-Rolled)$2,991 $1,497 100 %$5,263 $3,471 52 %
Mini Mill (a)
Mini Mill (a)
759 — n/a1,209 — n/a
U. S. Steel Europe (USSE)U. S. Steel Europe (USSE)403  678  (41)%908  1,415  (36)%U. S. Steel Europe (USSE)1,078 403 167 %1,876 908 107 %
Tubular Products (Tubular)Tubular Products (Tubular)182  316  (42)%437  659  (34)%Tubular Products (Tubular)184 182 %318 437 (27)%
Total sales from reportable segments Total sales from reportable segments2,082  3,533  (41)%4,816  7,018  (31)% Total sales from reportable segments5,012 2,082 141 %8,666 4,816 80 %
Other Businesses 12  (25)%23  26  (12)%
OtherOther13 44 %23 23 — %
Net salesNet sales$2,091  $3,545  (41)%$4,839  $7,044  (31)%Net sales$5,025 $2,091 140 %$8,689 $4,839 80 %
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

Management’s analysis of the percentage change in net sales for U. S. Steel’s reportable business segments for the three months ended June 30, 20202021 versus the three months ended June 30, 20192020 is set forth in the following table:
Steel Products (a)
VolumePriceMix
FX (b)
Other (c)
Net
Change
Flat-Rolled26 %58 %(1)%— %17 %100 %
Mini Mill (d)
n/an/an/an/an/an/a
USSE87 %77 %(14)%18 %(1)%167 %
Tubular(20)%14 %%— %%%
(a) Excludes intersegment sales
(b) Foreign currency translation effects
(c) Primarily of sales of raw materials and coke making by-products
(d) Not applicable (n/a), Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

Three Months EndedNet sales for the three months ended June 30, 2021 compared to the same period in 2020 versus Three Months Ended June 30, 2019were $5,025 million and $2,091 million, respectively.
Steel Products(a)
VolumePriceMix
FX(b)
Coke & Other(c)
Net Change
Flat-Rolled(32)%(8)%3%—%(4)%(41)%
USSE(39)%(3)%3%(2)%—%(41)%
Tubular(32)%(9)%(1)%—%—%(42)%
For the Flat-Rolled segment the increase in sales primarily resulted from higher average realized prices ($357 per ton) and increased shipments (536 thousand tons) across most products.
a) Excludes intersegmentFor the USSE segment the increase in sales primarily resulted from higher average realized prices ($273 per net ton) and increased shipments (557 thousand tons) across all products.
For the Tubular segment the increase in sales primarily resulted from higher average realized prices ($345 per net ton) across all products, partially offset by decreased shipments (27 thousand tons) predominantly for electric resistance welded (ERW) products.

-28-


(b) Foreign currency translation effects
(c) Includes sales of coke and scrap inventory

Net sales were $2,091 million in the three months ended June 30, 2020, compared with $3,545 million in the same period last year. The decrease in sales for the Flat-Rolled segment resulted from decreased shipments (decrease of 1,014 thousand tons) across all products and lower realized prices (decrease of $58 per net ton) across all products. The USSE segment continues to experience significant market challenges, which resulted in decreased sales versus the same period last year. The decrease in sales for the USSE segment resulted from decreased shipments (decrease of 394 thousand tons) across most products and lower realized prices (decrease of $20 per net ton) across all products from continued high levels of imports and significantly weaker economic conditions, primarily in the manufacturing sector. The decrease in sales for the Tubular segment resulted from decreased shipments (decrease of 63 thousand tons) across all prime products and lower realized prices (decrease of $236 per net ton) across all products.

Management’s analysis of the percentage change in net sales for U. S. Steel’s reportable business segments for the six months ended June 30, 2021 versus the six months endedJune 30, 2020 versus the six months ended June 30, 2019 is set forth in the following table:

Six Months Ended June 30, 2020 versus Six Months Ended June 30, 2019
Steel Products (a)
VolumePriceMix
FX (b)
Other (c)
Net Change
Flat-Rolled%34 %%— %%52 %
Mini Mill (d)
n/an/an/an/an/an/a
USSE55 %45 %(7)%15 %(1)%107 %
Tubular(38)%%%— %%(27)%
(a) Excludes intersegment sales
(b) Foreign currency translation effects
(c) Primarily of sales of raw materials and coke making by-products
(d) Not applicable (n/a), Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.
Steel Products(a)
VolumePriceMix
FX(b)
Coke & Other(c)
Net Change
Flat-Rolled(20)%(9)%2%—%(3)%(30)%
USSE(32)%(5)%3%(2)%—%(36)%
Tubular(20)%(11)%(2)%—%(1)%(34)%
(a) Excludes intersegment sales
(b) Foreign currency translation effects
(c) Includes sales of coke and scrap inventory
Net sales were $4,839 million infor the six months ended June 30, 2020,2021 compared with $7,044 million into the same period last year. The decrease in sales for2020 were $8,689 million and $4,839 million, respectively.
For the Flat-Rolled segment the increase in sales primarily resulted from decreased shipments (decrease of 1,230 thousand tons)higher average realized prices ($268 per ton) across all products and lower realized prices (decrease of $74 per net ton) across allincreased shipments (359 thousand tons) primarily for cold-rolled and coated sheet products. The USSE segment continues to experience significant market challenges, which resulted in decreased sales versus the same period last year. The decrease in sales for
For the USSE segment the increase in sales primarily resulted from decreased shipments (decrease of 657 thousand tons) across most products and lowerhigher average realized prices (decrease of $41($211 per net ton) across all products from continued high levels of imports and significantly weaker economic conditions, primarily inincreased shipments (799 thousand tons) across most products.
For the manufacturing sector. TheTubular segment the decrease in sales for the Tubular segmentprimarily resulted from decreased shipments (decrease of 83(125 thousand tons) across all prime products, and lowerpartially offset by higher average realized prices (decrease of $252($228 per net ton) across allpredominantly for seamless products.

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 Condensed Consolidated Statements of Operations.
Defined benefit and multiemployer pension plan costs included in cost of sales totaled $31 million and $64 million in the three and six months ended June 30, 2020, respectively, compared to $30 million and $59 million in the comparable periods in 2019.
Costs related to defined contribution plans totaled $4 million and $15 million for the three and six months ended June 30, 2020, respectively, compared to $11 million and $23 million in the comparable periods in 2019.
Other benefit expense included in cost of sales totaled $3 million and $6 million in the three and six months ended June 30, 2020, respectively, and $3 million and $6 million in the comparable periods in 2019.





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Selling, general and administrative expenses

Selling, general and administrative expenses were $106 million and $208 million in the three months and six months ended June 30, 2021, respectively, compared to $62 million and $134 million in the three months and six months ended June 30, 2020, respectively. The increase in expenses in the three and six months ended June 30, 2021 versus the same periods in 2020 respectively, compared to $82 millionprimarily resulted from increased profit based payments and $160 million in the three and six months ended June 30, 2019, respectively.addition of Big River Steel with the purchase of its remaining equity interest.

Restructuring and other charges
During the three months and six months ended June 30, 2020,2021, the Company recorded restructuring and other charges of $31 million and $37 million, respectively compared to $89 million which consists of charges of $47and $130 million forin the indefinite idling of our Keetac mining operationsthree months and a significant portion of Great Lakes Works, $2 million for other charges, $8 million for employee benefit costs related to Company-wide headcount reductions and $32 million headcount reductions under a Voluntary Early Retirement Program (VERP) offered at USSK.
During the six months ended June 30, 2020, the Company recorded restructuring and other charges of $130 million, which consists of charges of $72 million for the indefinite idling of our Keetac mining operations and a significant portion of Great Lakes Works, $13 million for the indefinite idling of Lorain Tubular Operations and Lone Star Tubular Operations, $13 million and $32 million for employee benefit costs relatedrespectively. See Note 20 to Company-wide headcount reductions and headcount reductions under a VERP offered at USSK, respectively. Cash payments were made related to severance and exit costs of approximately $33 million.

Charges for restructuring initiatives are recorded in the period the Company commits to a restructuring plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met. Charges related to restructuring are reported in restructuring and other charges in the Condensed Consolidated Financial Statements of Operations.for further details.

Strategic projects and technology investments

The Company expectsWe are delivering on our customer-centric and world-competitive, Best of BothSM strategy, by combining the best of the integrated steelmaking model with the best of the mini mill steelmaking model. We are reshaping U. S. Steel to invest approximately $500 million,be Best for AllSM by providing customers with profitable steel solutions for all of which approximately 45 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. The Company currently has paused planned upgrades andour stakeholders. We will continue to evaluate the paceexpand our capabilities to deliver product and timelineprocess innovation to create unmatched value for completing the remaining investments in the Gary Works hot strip mill.our customers while enhancing our earnings profile and delivering long-term cash flow through industry cycles.

In October 2019,On January 15, 2021, the Company completed a significant strategic step with the first stepacquisition of the remaining equity interest in acquiring Big River Steel in Osceola, Arkansas through the purchase of a 49.9% ownership interest at a purchase price offor approximately $700$625 million in cash with a call option to acquire the remaining 50.1% within the next four years at an agreed-upon price formula based on Big River Steel’s achievementnet of certain metrics that include: free$36 million and $62 million in cash flow, product development, safetyand restricted cash received, respectively, and the completionassumption of a proposed expansionliabilities of approximately $50 million. The results of Big River Steel are reflected within the new Mini Mill segment. The acquisition of Big River Steel increased U. S. Steel's existing manufacturingannual raw steel production capability by 3.3 million net tons to 26.2 million net tons. The Mini Mill segment has two electric arc furnaces (EAFs), two ladle metallurgical furnace stations (LMFs), a Ruhrstahl Heraeus degasser, two continuous slab casters, a pickle line tandem cold mill, batch annealing, a temper mill and a galvanizing line. Big River Steel currently operates a technologically advanced mini mill with approximately 1.65 million tons of steel making capacity.

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 thecommenced commercial 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. The company has delayed groundbreaking for this project for an indeterminate period until market conditions become more certain.

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 rounds 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 fourth quarter of 2020.

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 insecond EAF during the fourth quarter of 2020, but based on market conditions,doubling its raw steel production capacity. In the project is delayed. Upon its completion,second quarter, the new line will enable production of sophisticated silicon grades ofCompany announced plans to build a non-grain oriented (NGO) electrical steel line at Big River Steel. The Company expects this investment to make Big River Steel a leader in NGO electric steels by delivering product capabilities unmatched in today's market. The approximately $450 million investment is expected to support increasedbe funded by cash generated from Big River Steel's robust profitability and cash flow. The 200,000 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 vehicles and generators.the United States over the coming years.

In addition to the investments at Big River Steel, the Company will continue to evaluate capability-focused opportunities across the Flat-Rolled segment, including at the Gary Hot Strip Mill.

-30--29-



COVID-19 and Disruptions in the Oil and Gas Industries

The global pandemic resulting from the novel coronavirus designated as COVID-19 has had a significant impact on economies, businesses and individuals around the world. Efforts by governments around the world to contain the virus have involved, among other things, border closings and other significant travel restrictions; mandatory stay-at-home and work-from-home orders in numerous countries, including the United States; mandatory business closures; public gathering limitations; and prolonged quarantines. These efforts and other governmental and individual reactions to the pandemic have led to significant disruptions to commerce, lower consumer demand for goods and services and general uncertainty regarding the near-term and long-term impact of the COVID-19 virus on the domestic and international economy and on public health. These developments and other consequences of the outbreak have had, and could continue to have, a material adverse impact on the Company's results of operations, financial condition and cash flows.

The U.S. Department of Homeland Security guidance has identified U. S. Steel's business as a critical infrastructure industry, essential to the economic prosperity, security and continuity of the United States. Similarly, in Slovakia, U. S. Steel Košice (USSK) was identified by the government as a strategic and critical company, essential to economic prosperity, and continues to operate. We are following the Centers for Disease Control and Prevention guidelines and other applicable local requirements to mitigate the threat of COVID-19 exposure in our workplace.

The duration, severity, speed and scope of the COVID-19 pandemic remains highly uncertain and the extent to which COVID-19 will affect our operations depends on future developments, such as potential surges of the outbreak, which cannot be predicted at this time. Although we have continued to operate, we have experienced, and may continue to experience, significant reductions in demand for our products. We believe that our second quarter financial results marked the trough for the year as customer demand has started to return.

The oil and gas industry, which is one of our significant end markets, has experienced and continues to experience, a significant amount of disruption and oversupply at a time of declining demand, resulting in a decline in profitability. Our Tubular operations support the oil and gas industry, and therefore the industry's decline has led to a significant decline in demand for our Tubular products. In the first quarter of 2020 the steep decline in oil prices was considered a triggering event for our welded tubular and seamless tubular asset groups, and as a consequence, we recorded a $263 million impairment charge for the welded tubular asset group (see Note 1 to the Condensed Consolidated Financial Statements for further details).

In response to the decline in demand for our products resulting from the COVID-19 pandemic and the disruptions in the oil and gas industry, we have taken a number of actions to mitigate the impact on our business and to preserve cash and enhance our liquidity, including:
On June 22, 2020, we issued 50 million shares of common stock for $8.2075 per share, yielding net proceeds of approximately $410 million.
On May 29, 2020, we completed the sale of $1.056 billion aggregate principal amount of 12.000% Senior Secured Notes due 2025 for net proceeds of approximately $977 million.
On March 23, 2020, we borrowed an additional $800 million under the Credit Facility Agreement to bolster our cash balance, $100 million of which was subsequently repaid in the second quarter of 2020.
We announced a $125 million reduction in expected 2020 capital expenditures, including a delay in the construction of our endless casting and rolling line at Mon Valley Works.

Operating configuration changes in response to market conditions and COVID-19adjustments

The Company hasalso adjusted its operating configuration in response to changing market conditions including the economic impacts from the COVID-19 pandemic, significant recent changes in global oil and gas markets and increasing global overcapacity, unfair trade practices and unfairly tradedincreases in domestic 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 align production withmaximize its order bookstrategy of combining the Best of Both leading integrated and meet the needs of our customers.

In March and April of 2020, we took additional footprint actions to temporarily idle certain operations for an indefinite period to better align production with customer demand, including:
Blast Furnaces #4, #6 and #8 at Gary Works
Blast Furnace A at Granite City Works
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Blast Furnace #1 at Mon Valley Works
Lone Star Tubular Operations
Lorain Tubular Operations
Keetac Iron Ore Operations

Additionally, U. S. Steel reduced coke production at its Clairton Plant and adjusted production at its Minntac operations in line with the blast furnace idlings. U. S. Steel reduced operating levels in the Tubular business and other production facilities and will continue to evaluate its operating configuration to properly respond to ever changing conditions. As market conditions change, we continually assess the footprint required to support our customers’ needs and make decisions about resuming production at idled facilities or increasing production at facilities operating at reduced levels. Since then we also began to indefinitely idle the Hughes Springs, Texas coupling production facility of Wheeling Machine Products in May 2020. As demand has increased, the Company restarted blast furnace #1 at Mon Valley Works in June 2020 and blast furnace #6 at Gary Works in July 2020. Plans were also underway in late July 2020 to restart blast furnace #8 at Gary Works on August 1, 2020. In addition, to mitigate impacts from the pandemic we reduced certain costs at our plants and headquarters. In connection with the temporary idlings described above, we have taken actions to appropriately streamline our footprint and workforce.

As of June 30, 2020 the carrying value of the idled fixed assets within the non restarted or not currently planning to restart facilities noted above was: Gary Works blast furnace #4, $45 million; Granite City Works Blast Furnace A, $65 million; Lone Star Tubular Operations, $10 million; Lorain Tubular Operations, $75 million; and Keetac Iron Ore Operations, $85 million.mini mill technology.

In December 2019, U. S. Steel announced that it would indefinitely idle a significant portion of Great Lakes Works.Works due to market conditions including continued high levels of imports. The Company began idling the iron and steelmaking facilities in March 2020 and the hot strip mill rolling facility in June 2020. The carrying value of the Great Lakes Works facilities that we intend towere indefinitely idleidled was approximately $355$310 million as of June 30, 2020.2021.

In December 2019, the Company completed the indefinite idling 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, U. S. Steel indefinitely idled its finishing facility in Dearborn, Michigan (which operates an electrolytic galvanizing line), during the fourth quarter of 2019. The carrying value of these facilities was approximately $20$15 million as of June 30, 2020.2021.

In October 2019,2020, we took actions to adjust our footprint by temporarily idling certain operations for an indefinite period to better align production with customer demand and respond to the Company announced an enhanced operating model and organizational structure to accelerateimpacts from the Company’s strategic transformation and better serve its customers.COVID-19 pandemic. The new operating model was effective January 1,operations that were initially idled in 2020 and is centered around manufacturing, commercial, and technological excellence. Our former “commercial entity” structure was put into place to deepen understandingremained idle as 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.June 30, 2021 included:
Blast Furnace A at Granite City Works
Lone Star Tubular Operations
Lorain Tubular Operations
Wheeling Machine Products coupling production facility at Hughes Springs, Texas

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 was anticipated that the labor productivity strategy would result in total headcount reductions, including contractors, of approximately 2,500 by the end of 2021. As part of the labor productivity strategy, a voluntary early retirement program was offered in April 2020, which allowed employees to terminate their employment contract effective July 1, 2020. As of July 1, 2020 approximately 2,950 positions, including approximately 475 contractors, were eliminated.

In June 2019, to better align global production with its order book U. S. Steel idled a blast furnace in Europe resulting in a monthly blast furnace production capacity reduction of approximately 125,000 tons. Blast furnace production may resume when market conditions improve. As of June 30, 20202021 the carrying value of thisthe idled blast furnace was $10 million.fixed assets for facilities noted above was: Granite City Works Blast Furnace A, $60 million; Lone Star Tubular Operations, $5 million; Lorain Tubular Operations, $70 million and Wheeling Machine Product's production facility, immaterial.







































-32--30-


Earnings (loss) before interest and income taxes by segment for the three and six months ended June 30, 2020 and 2019 is set forth in the following table:
Three months ended June 30,%
Change
Six months ended June 30,%
Change
Three months ended June 30,%
Change
Six months ended June 30,%
Change
(Dollars in millions)2020201920202019%
Change
(Dollars in millions)20212020%
Change
2021%
Change
Flat-RolledFlat-Rolled$(329) $134  (346)%$(364) $229  (259)%Flat-Rolled$579 $(329)276 %$(364)299 %
Mini Mill (a)
Mini Mill (a)
284 — n/a416 — n/a
USSEUSSE(26) (10) (160)%(40) 19  (311)%USSE207 (26)896 %312 (40)880 %
TubularTubular(47) (6) (683)%(95)  (2,475)%Tubular (47)100 %(29)(95)69 %
Total earnings from reportable segments(402) 118  (441)%(499) 252  (298)%Total earnings (loss) from reportable segments1,070 (402)366 %1,424 (499)385 %
Other Businesses(21) 10  (310)%(20) 18  (211)%
OtherOther14 (21)167 %22 (20)210 %
Segment earnings before interest and income taxes(423) 128  (430)%(519) 270  (292)%Segment earnings (loss) before interest and income taxes1,084 (423)356 %1,446 (519)379 %
Items not allocated to segments:Items not allocated to segments:Items not allocated to segments:
Tubular asset impairment charge—  —  (263) —  Big River Steel - inventory step-up amortization — (24)— 
Restructuring and other charges(89) —  (130) —  Big River Steel - unrealized losses(6)— (15)— 
Gain on previously held investment in UPI—  —  25  —  Big River Steel - acquisition costs — (9)— 
Tubular inventory impairment charge(24) —  (24) —  Restructuring and other charges(31)(89)(37)(130)
December 24, 2018 Clairton coke making facility fire (13)  (44) Gain on previously held investment in Big River Steel 111 
Total earnings before interest and income taxes$(532) $115  (563)%$(907) $226  (501)%
Asset impairment charge(28)— (28)(263)
Property sale15 — 15 — 
Tubular inventory impairment (24) (24)
Gain on previously held investment in UPI —  25 
December 24, 2018 Clairton coke making facility fire$ $$ $
Total earnings (loss) before interest and income taxesTotal earnings (loss) before interest and income taxes$1,034 $(532)294 %$1,459 $(907)261 %
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

Segment results for Flat-Rolled
Three months ended June 30,%
Change
Six months ended June 30,%
Change
Three months ended June 30,%
Change
Six months ended June 30,%
Change
20202019202020192021202020212020
(Loss) earnings before interest and taxes ($ millions)$(329) $134  (346)%$(364) $229  (259)%
Earnings (loss) before interest and taxes ($ millions)Earnings (loss) before interest and taxes ($ millions)$579 $(329)276 %$725 $(364)299 %
Gross marginGross margin(10)%11 %(21)%— %11 %(11)%Gross margin25 %(10)%35 %21 %— %21 %
Raw steel production (mnt)Raw steel production (mnt)1,468  2,984  (51)%4,616  6,059  (24)%Raw steel production (mnt)2,485 1,468 69 %5,066 4,616 10 %
Capability utilizationCapability utilization35 %70 %(35)%54 %72 %(18)%Capability utilization59 %35 %24 %60 %54 %%
Steel shipments (mnt)Steel shipments (mnt)1,790  2,804  (36)%4,299  5,529  (22)%Steel shipments (mnt)2,326 1,790 30 %4,658 4,299 %
Average realized steel price per tonAverage realized steel price per ton$721  $779  (7)%$715  $789  (9)%Average realized steel price per ton$1,078 $721 50 %$983 $715 37 %

The decreaseincrease in Flat-Rolled results for the three months ended June 30, 20202021 compared to the same period in 20192020 was primarily due to lowerto:
increased average realized prices (approximately $180$850 million), decreased
increased shipments including substrate to our Tubular segment (approximately $180$10 million), decreased Mining Solution
increased mining sales (approximately $35$105 million) and
increased other costs primarily due to LIFO inventory adjustments, joint venture earnings and depreciationcoke sales (approximately $80$30 million). These changes were,
this change was partially offset by lowerby:
higher raw material costs (approximately $10$15 million)
higher other costs, primarily variable compensation partially offset by favorable equity investee income, (approximately $70 million).

The decreaseincrease in Flat-Rolled results for the six months ended June 30, 20202021 compared to the same period in 20192020 was primarily due to lowerto:
increased average realized prices (approximately $440$1,195 million), decreased shipments, including substrate to our Tubular segment (approximately $230 million), decreased Mining Solution
increased mining sales (approximately $35$75 million) and
-31-


increased other costs primarily due to joint venture earnings and depreciationcoke sales (approximately $65$30 million). These changes were,
this change was partially offset by lowerby:
higher raw material costs (approximately $85$35 million), decreased maintenance and outage
higher energy costs (approximately $15 million) and lower energy
higher other costs, primarily variable compensation (approximately $75$160 million).
Gross margin for the three and six months ended June 30, 20202021 compared to the same period in 2019 decreased2020 increased primarily as a result of lowerhigher sales volume and average realized prices.

Segment results for Mini Mill
(a)
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Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
2021202020212020
Earnings before interest and taxes ($ millions)$284 $— n/a$416 $— n/a
Gross margin45 %— %n/a41 %— %n/a
Raw steel production (mnt)747 — n/a1,257 — n/a
Capability utilization91 %— %n/a84 %— %n/a
Steel shipments (mnt)616 — n/a1,063 — n/a
Average realized steel price per ton$1,207 $— n/a$1,106 $— n/a
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.
Segment results for USSE
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
20202019202020192021202020212020
(Loss) earnings before interest and taxes ($ millions)$(26) $(10) (160)%$(40) $19  (311)%
Earnings (loss) before interest and taxes ($ millions)Earnings (loss) before interest and taxes ($ millions)$207 $(26)896 %$312 $(40)880 %
Gross marginGross margin%%(2)%%%(3)%Gross margin22 %%20 %20 %%17 %
Raw steel production (mnt)Raw steel production (mnt)645  1,148  (44)%1,527  2,307  (34)%Raw steel production (mnt)1,279 645 98 %2,476 1,527 62 %
Capability utilizationCapability utilization52 %92 %(40)%61 %93 %(32)%Capability utilization103 %52 %51 %100 %61 %39 %
Steel shipments (mnt)Steel shipments (mnt)610  1,004  (39)%1,411  2,068  (32)%Steel shipments (mnt)1,167 610 91 %2,210 1,411 57 %
Average realized steel price per ($/ton)Average realized steel price per ($/ton)$632  $652  (3)%$620  $661  (6)%Average realized steel price per ($/ton)$905 $632 43 %$831 $620 34 %
Average realized steel price per (€/ton)Average realized steel price per (€/ton)575  580  (1)%563  585  (4)%Average realized steel price per (€/ton)750 575 30 %689 563 22 %

The decreaseincrease in USSE results for the three months ended June 30, 20202021 compared to the same period in 20192020 was primarily due to lowerto:
increased average realized prices (approximately $20$300 million), decreased
increased shipments, including volume inefficienciesefficiencies (approximately $30 million) and the weakening
strengthening of the U. S. dollarEuro versus the euroU.S. dollar (approximately $30 million)
increased energy efficiencies (approximately $5 million). These,
these changes were partially offset by lowerby:
higher raw material costs (approximately $10$120 million), lower energy
increased operating costs (approximately $5 million)
higher other costs (approximately $10 million) lower spending and other costs (approximately $20 million).

The decreaseincrease in USSE results for the six months ended June 30, 20202021 compared to the same period in 20192020 was primarily due to lowerto:
increased average realized prices (approximately $60$400 million), decreased
increased shipments, including volume inefficienciesefficiencies (approximately $50$30 million) and the weakening
strengthening of the U. S. dollarEuro versus the euroU.S. dollar (approximately $20$45 million). These
increased energy efficiencies (approximately $15 million),
these changes were partially offset by lowerby:
higher raw material costs (approximately $10$120 million), lower energy
increased operating costs (approximately $15$10 million) and lower spending and
higher other costs (approximately $45$10 million).
Gross margin for the three and six months ended June 30, 20202021 compared to the same periodperiods in 2019 decreased2020 increased primarily as a result of lowerhigher sales volume and higher average realized prices.
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Segment results for Tubular
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
20202019202020192021202020212020
(Loss) earnings before interest and taxes ($ millions)$(47) $(6) (683)%$(95) $ (2,475)%
Loss before interest and taxes ($ millions)Loss before interest and taxes ($ millions)$ $(47)100 %$(29)$(95)69 %
Gross marginGross margin(21)%%(23)%(16)%%(21)%Gross margin7 %(21)%28 %(1)%(16)%15 %
Raw steel production (mnt) (a)
Raw steel production (mnt) (a)
114 — n/a207 — n/a
Capability utilization (a)
Capability utilization (a)
51 %— %51 %46 %— %46 %
Steel shipments (mnt)Steel shipments (mnt)132  195  (32)%319  402  (21)%Steel shipments (mnt)105 132 (20)%194 319 (39)%
Average realized steel price per tonAverage realized steel price per ton$1,288  $1,524  (15)%$1,285  $1,537  (16)%Average realized steel price per ton$1,633 $1,288 27 %$1,513 $1,285 18 %
(a) Tubular segment raw steel added in October 2020 with the start-up of the new electric arc furnace.
(a) Tubular segment raw steel added in October 2020 with the start-up of the new electric arc furnace.

The decreaseincrease in Tubular results for the three months ended June 30, 20202021 as compared to the same period in 20192020 occurred despite continued high levels of imports and was primarily due to lowerto:
increased average realized prices (approximately $25$35 million) and decreased shipments, including volume inefficiencies
lower other costs, primarily idled plant carrying costs, (approximately $20 million) and increased maintenance and outage,
these changes were partially offset by:
higher raw material costs (approximately $5 million). These changes were partially offset by lower substrate and rounds
higher energy costs (approximately $5 million) and a decrease in other costs (approximately $5 million).

The decreaseincrease in Tubular results for the six months ended June 30, 20202021 as compared to the same period in 2019 was2020 occurred despite continued high levels of imports and was primarily due to lowerto:
increased average realized prices (approximately $70$35 million), decreased shipments, including volume inefficiencies
lower operating costs (approximately $10 million)
lower other costs, primarily idled plant carrying costs, (approximately $40 million), increased maintenance and outage
these changes were partially offset by:
decreased shipments (approximately $5 million)
higher raw material costs (approximately $15$10 million),
higher energy costs (approximately $5 million) and increased other costs (approximately $5 million). These changes were partially offset by lower substrate and rounds costs (approximately $35 million).
Gross margin for the three and six months ended June 30, 20202021 compared to the same periodperiods in 2019 decreased2020 increased primarily as a result of lower sales andhigher average realized prices.
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Results for Other Businesses

Other Businesses had losses of $21 millionprices and $20 million inpositive cost improvements from the threenew EAF and six months ended June 30, 2020, compared to earnings of $10 million and $18 million in the three and six months ended June 30, 2019.plant idlings, partially offset by increased raw material costs.

Items not allocated to segments

We recorded tubular asset impairment chargesBig River Steel - inventory step-up amortization chargeof $263$24 million in the six months ended June 30, 2020 as described in Notes 1 and 92021. See Note 5 to the Condensed Consolidated Financial Statements.Statements for further details.

We recorded restructuring and other chargesBig River Steel - unrealized losses of $89$6 million and $130$15 million in the three months and six months ended June 30, 2020 as described2021, respectivelyfor the post-acquisition mark-to-market impacts of hedging instruments acquired with the purchase of the remaining equity interest in Big River Steel. See Note 14 to the Condensed Consolidated Financial Statements for further details.
We recorded Big River Steel - acquisition costs of $9 million in the six months ended June 30, 2021. See Note 5 to the Condensed Consolidated Financial Statements for further details.
We recorded restructuring and other charges of $31 million and $37 million in the three months and six months ended June 30, 2021, respectively. See Note 20 to the Condensed Consolidated Financial Statements.Statements for further details.

We recorded a $25 million gain on our previously held equity investmentin UPIBig River Steelof $111 million in the six months ended June 30, 2020 as described in2021. See Note 5 to the Condensed Consolidated Financial Statements.Statements for further details.
We recorded an impairment of $28 million for the Mon Valley Works endless casting and rolling project. See Note 1 to the Condensed Consolidated Financial Statement for further details.
We recorded a property sale gain of $15 million on the sale of a non-core real estate asset.

We recorded a tubular inventory impairment change of $24 million in the three and six months ended June 30, 2020.

We recorded a $4 million reduction of costs associated with the
December 24, 2018 Clairton coke making facility fire
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in the three and six months ended June 30, 2020. We incurred $13 million and $44 million of costs associated with the
December 24, 2018 Clairton coke making facility fire in the three and six months ended June 30, 2019, respectively (see Environmental Matters, Litigation and Contingencies in the Liquidity and Capital Resources section for more details).

Net interest and other financial costs
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
Three Months Ended June 30,%
Change
Six Months Ended June 30,%
Change
(Dollars in millions)(Dollars in millions)2020201920202019(Dollars in millions)2021202020212020
Interest expenseInterest expense$64  $31  106 %$114  $65  75 %Interest expense$84 $64 (31)%$176 $114 (54)%
Interest incomeInterest income(1) (5) (80)%(5) (10) (50)%Interest income(1)(1)— %(2)(5)(60)%
Loss on debt extinguishmentLoss on debt extinguishment1 — (100)%256 — (100)%
Other financial costsOther financial costs  40 %  100 %Other financial costs4 43 %22 (450)%
Net periodic benefit cost (other than service cost)(8) 23  (135)%(16) 46  (135)%
Net periodic benefit incomeNet periodic benefit income(29)(8)263 %(60)(16)275 %
Total net interest and other financial costsTotal net interest and other financial costs$62  $54  15 %$97  $103  (6)%Total net interest and other financial costs$59 $62 %$392 $97 (304)%

The increase in netNet interest and other financial costs decreased in the three months ended June 30, 20202021 as compared to the same period last year is primarily due to a higher level of debtfrom an increase in net periodic benefit income (as discussed further below), partially offset by lower net periodic benefit cost (as discussed below).increased interest expense.
The decrease in net
Net interest and other financial costs increased in the six months ended June 30, 20202021 as compared to the same period last year is primarily due to lowerfrom increased interest expense, debt retirement costs and higher other financial costs, partially offset by an increase in net periodic benefit costincome (as discussed below) partially offset by a higher level of debt..

The net periodic benefit cost (other than service cost)income components of pension and other benefit costs are reflected in the table above, and decreasedincreased in the three months and six months ended June 30, 2020 2021as compared to the same periods last year primarily due to the better than expected 2019 asset performance and lower amortization of prior service costs, lower future healthcare costs, and reduced participation in our retiree health plans.costs.
Income taxes
The income tax (benefit) provisionbenefit was $(37) million and $(36) million in the three and six months ended June 30, 2021, respectively compared to $(5) million and $(24) million in the three and six months ended June 30, 2020, comparedrespectively.

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 $(7)certain state net operating losses and state tax credits, which resulted in a $262 million non-cash net benefit to earnings. That determination was based, in part, on U. S. Steel’s cumulative income from the past three years and projections of income in future years. The release of the valuation allowance contains discrete and current year impacts that are recorded in the income tax benefit and will be remeasured in upcoming 2021 periods.

The tax benefit for the six months ended June 30, 2020 includes a $14 million benefit related to recording a loss from continuing operations and income from other comprehensive income categories.

Net earnings attributable to United States Steel Corporation were $1,012 million and $1$1,103 million in the three and six months ended June 30, 2019. In general, the amount2021, respectively, compared to a net loss of tax expense or benefit from continuing operations is determined without regard to the tax effect of other categories of income or loss, such as other comprehensive income. However, an exception to this rule applies when there is a loss from continuing operations and income from other categories. Included in the tax benefit in the three
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and six months ended June 30, 2020 is a discrete benefit of $4$(589) million and $14 million, respectively related to this accounting exception. Also included in the tax benefit in the six months ended June 30, 2020 is an expense of $13 million for an updated estimate to tax reserves related to an unrecognized tax benefit. Due to the full valuation allowance on our domestic deferred tax assets, the tax benefit in 2020 does not reflect any additional tax benefit for domestic pretax losses. In 2019, the tax provision reflects a benefit for percentage depletion in excess of cost depletion from iron ore that we produce and consume or sell. For further information on income taxes see Note 12 to the Condensed Consolidated Financial Statements.

Net losses attributable to United States Steel Corporation were $589 million and $980$(980) million in the three and six months ended June 30, 2020, compared to net earnings of $68 million and $122 million in the three and six months ended June 30, 2019.respectively. The changes primarily reflect the factors discussed above.
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LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW
Net cash usedprovided by operating activities was $362$1,103 million for the six months ended June 30, 20202021 compared to net cash providedused by operating activities of $366$362 million in the same period last year. The decreaseincrease in cash from operations is primarily due to lowerstronger financial results, partially offset by changes in working capital period over period.
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 key working capital components include accounts receivable and inventory. The accounts receivable and inventory turnover ratios for the three months and twelve months ended June 30, 2020 and 2019 are as follows:
Three Months Ended June 30,Twelve Months Ended June 30,
2020201920202019
Accounts Receivable Turnover2.0  2.1  8.3  8.8  
Inventory Turnover1.2  1.5  5.6  6.4  

The decrease in the accounts receivable turnover approximates 3 days and 2 days for the three and twelve months ended June 30, 2020 as compared to the three and twelve months ended June 30, 2019, respectively.

The decrease in the inventory turnover approximates 14 days and 8 days for the three and twelve months ended June 30, 2020 as compared to the three and twelve months ended June 30, 2019, respectively, and is primarily due to decreased shipments across all our segments.

The last-in, first-out (LIFO) inventory method is the predominant method of inventory costing in the United States. At both June 30, 2020 and June 30, 2019, the LIFO method accounted for 70 percent of total inventory values. In the U.S., management monitors 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 June 30, 2020, and December 31, 2019 the replacement cost of the inventory was higher by approximately $1,205 million and $735 million, respectively. Additionally, based on the Company’s latest internal forecasts and its inventory requirements, management does not believe there will be significant permanent LIFO liquidations that would impact earnings for the remainder of 2020.
Our cash conversion cycle for the second quarter of 2020 increased2021 improved by thirteenten days as compared to the fourth quarter of 20192020 as shown below:
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Cash Conversion Cycle20212020
$ millionsDays$ millionsDays
Accounts receivable, net (a)
$2,01033$99438
+ Inventories (b)
$1,91445$1,40254
- Accounts Payable and Other Accrued Liabilities (c)
$2,68464$1,86168
= Cash Conversion Cycle (d)
1424


Cash Conversion Cycle20202019
$ millionsDays$ millionsDays
Accounts receivable, net (a)
$93946$1,17742
+ Inventories (b)
$1,63474$1,78564
- Accounts Payable and Other Accrued Liabilities (c)
$1,43870$1,97069
= Cash Conversion Cycle (d)
5037
(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-generally accepted accounting principles (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 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.

The last-in, first-out (LIFO) inventory method is the predominant method of inventory costing in the United States. Based on the Company’s latest internal forecasts and its inventory requirements, management does not believe there will be significant permanent LIFO liquidations that would impact earnings for the remainder of 2021.

Capital expenditures for the six months ended June 30, 2020,2021, were $455$284 million, compared with $628$455 million in the same period in 2019. Flat-rolled2020. Flat-Rolled capital expenditures were $310$167 million and included spending for Mon Valley Works Endless Casting and Rolling, Gary Hot Strip Mill upgrades, Mining Equipment and various other infrastructure, environmental, and strategic projects. Mini Mill capital expenditures were $56 million and primarily included spending for Phase II expansion. USSE capital expenditures of $48$26 million consisted of spending for improved Sinter Strand Emission control and improved Ore Bridges Emission controlDegasser improvements, Dynamo Line and various other infrastructure, and environmental projects. Tubular capital expenditures were $94$34 million and included spending for the Fairfield Electric Arc Furnace (EAF) project and various other infrastructure, and environmental projects.
To align its strategic projects with the market realities, in March 2020 the Company announced a reduction in total planned capital expenditures for 2020 by $125 million to approximately $750 million.
U. S. Steel’s contractual commitments to acquire property, plant and equipment at June 30, 2020,2021, totaled $790$573 million.
Revolving credit facilities - borrowings, net of financing costs totaled $1,462 million primarily due to borrowings on the Credit Facility Agreement and UPI Amended Credit Facility.

Revolving credit facilities - repayments totaled $644 million primarily due to repayments on the Credit Facility Agreement and UPI Amended Credit Facility.

Issuance of long-term debt, net of financing costs totaled $1,048 million primarily due to issuance of the 2025 Senior Secured Notes.

Net proceeds from ourcash used by financing activities public offering of 50,000,000 shares of common stock totaled $410 million.

Critical Accounting Estimates

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, welded tubular, seamless tubular and USSE.

During 2019, the challenging steel market environment in the U.S. and Europe and recent losses in the welded tubular asset group were considered triggering eventswas $855 million 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
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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.

For the period ended March 31, 2020, the steep decline in oil prices that resulted from market oversupply and declining demand was considered a triggering event for the welded tubular and seamless tubular asset groups. A quantitative analysis was completed for both asset groups. The percentage excess of estimated future cash flows over the net assets was greater than 100% for the seamless tubular asset group but indicated an impairment and required further evaluation of the net assets in the welded tubular asset group. The liquidation method was used to determine the fair value of the welded tubular assets which resulted in an impairment of $196 million and $67 million to property, plant and equipment and intangibles, respectively. There were no triggering events for the Flat-Rolled and USSE asset groups that required long-lived assets to be evaluated for impairment as of March 31, 2020.

There were no triggering events that required an impairment evaluation of our long-lived asset groups for the three month periodsix months ended June 30, 2020.
LIQUIDITY AND CAPITAL RESOURCES2021 compared to net cash provided of $2,306 million in the same period last year. The decrease was primarily due to the repayment of debt, partially offset by the issuance of common stock.
The following table summarizes U. S. Steel’s liquidity as of June 30, 2020:2021:
(Dollars in millions)
Cash and cash equivalents$2,3001,329 
Amount available under $2.0 Billion Credit Facility Agreement1901,918 
Amount available under Big River Steel - Revolving Line of Credit350 
Amount available under USSK credit facilities155579 
UPI Amended Credit Facility Agreement
Total estimated liquidity$2,6524,176 

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In the first half of 2021, we issued 48,300,000 shares of common stock for net proceeds of approximately $790 million and issued $750 million in aggregate principal amount of 6.875% Senior Notes due 2029 (2029 Senior Notes) for net proceeds of $739 million after transaction costs. With the common stock and 2029 Senior Notes issuance proceeds and cash on hand we fully redeemed our 12.000% Senior Secured Notes due 2025 in the aggregate principal amount of $1.056 billion plus premiums of $181 million, repaid in full our Export-Import Credit Agreement in the amount of $180 million and reduced the borrowing under our Credit Facility Agreement and USSK Facility Agreement by $500 million and $368 million, respectively. See Note 15 to the Condensed Consolidated Financial Statements for further details.

On June 17, 2021, U. S. Steel issued an irrevocable notice of redemption to redeem the entirety of its approximately $718 million aggregate principal amount of outstanding 6.875% Senior Notes due 2025 (2025 Senior Notes). The Company expects the total payment to the holders including the redemption premium to be approximately $730 million (reflecting a redemption price of 101.719% of the aggregate principal amount), plus accrued and unpaid interest to, but excluding, the redemption date of August 15, 2021. The 2025 Senior Notes will be redeemed with cash on hand. The 2025 Senior Notes are reflected in short-term debt and current maturities of long-term debt on the Condensed Consolidated Balance Sheet as of June 30, 2021.

With the acquisition of Big River Steel on January 15, 2021 we assumed additional indebtedness. Below is a summary of the most significant debt acquired as of June 30, 2021. See Note 15 to the Condensed Consolidated Financial Statements for further details.
6.625% Senior Secured Notes in the aggregate principal amount of $900 million that mature in January 2029;
4.50% Arkansas Development Finance Authority Bonds in the aggregate principal amount of $487 million that have a final maturity in September 2049;
4.75% Arkansas Development Finance Authority Bonds Tax Exempt Series 2020 (Green Bonds) in the aggregate principal amount of $265 million that have a final maturity in September 2049;
Arkansas Teacher Retirement System Notes Payable in the amount of $106 million that mature in 2023.

As of June 30, 2020, $2792021, $107 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.

On June 22, 2020, the Company issued 50 million shares of common stock, par value of $1 per share, atApril 12, 2021, United States Steel Corporation entered into a price of $8.2075 per share, in an underwritten public offering. Third-party expenses related to the issuance of less than $1 million were recorded as a decrease to additional paid-in capital, resulting in net proceeds of approximately $410 million.

On May 29, 2020, U. S. Steel issued an aggregate principal amount of $1,056 million of 12.000% Senior Secured Notes due June 1, 2025 (2025 Senior Secured Notes). The notes were issued at a price equal to 94.665% of their face value. U. S. Steel received net proceeds of approximately $977 million after fees of approximately $23 million related to underwritingNotice and third party expenses. The Company intends to use the net proceeds to strengthen its balance sheet, increase liquidity and for general corporate purposes. The notes will pay interest semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020.The notes are fully and unconditionally guaranteed on a senior secured basis by all of our existing and future direct and indirect material domestic subsidiaries (other than certain subsidiaries excluded in the indenture). The notes and notes guarantees are secured by first priority-liens, subject to permitted liens, on substantially all of U. S. Steel’s domestic assets, other than certain excluded assets per the terms of the notes indenture and exclusive of the collateral required under the Credit Facility Agreement.

As of June 30, 2020, we had borrowings of $104 million underAcknowledgement with the Export Credit Agreement (ECA). Loan repayments start six months after lender, facility agent and ECA agent, KFW IPEX-BANK GMBH to acknowledge that the starting point of credit as defined in the loan agreement with a total repayment term up to eight years. Loan availability and repayment terms are subject to certain customary covenants and events of default. The purpose of the ECA is to finance equipment purchased for thepreviously announced endless casting and rolling facility under constructionproject at our Mon Valley Works facility in Braddock, Pennsylvania. In response towould no longer be pursued and the decline in demandassociated equipment for our products resulting from the COVID-19 outbreak, we have delayed construction of our endless
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casting and rolling line at Mon Valley Works. We have also paused our borrowing under the ECA pending an update to the agreement or resumption of construction.

During March 2020, as a precautionary measure taken to mitigate the potential economic impactsproject is now being evaluated for other uses. Use of the COVID-19 pandemic, U. S. Steel increased its borrowings under its Credit Facility Agreement.Export-Credit Agreement for further equipment purchases is also being evaluated. As of June 30, 2020, there2021, $136 million was $1.4 billion drawn under the $2.0 billion 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 Credit Facility Agreement is less than the greater of 10 percent of the total aggregate commitments and $200 million. Basedowed on the four quarters as of June 30, 2020, we would not have met this covenant. So long as we continue to not meet this covenant, the amount available to the Company is effectively reduced by $200 million. In addition, since the value of our inventory and trade accounts receivable less specified reserves calculated in accordance with the Credit Facility Agreement do not support the full amount of the facility at June 30, 2020, the amount available to the Company under this facility was further reduced by $210 million As a result, availability under this facility was $190 million as of June 30, 2020. Availability under this facility may be impacted by additional footprint decisions that are made to the extent the value of the collateral pool of inventory and accounts receivable that support our borrowing availability are reduced.

As of June 30, 2020, USSK had borrowings of €350 million (approximately $392 million) under its €460 million (approximately $515 million) revolving credit facility. The USSK Credit Agreement contains certain USSK financial covenants, including a maximum net debt to EBITDA ratio and a minimum stockholders' equity to assets 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. USSK must maintain a net debt to EBITDA ratio of less than 6.5 as of June 30, 2021 and 3.5 for semi-annual measurements starting December 31, 2021. The Company has determined that it may not be able to comply with the net debt to EBITDA covenant as of June 30, 2021 based on recent forecast scenarios. Although we may seek to obtain a waiver for this covenant, we believe that we will have sufficient cash on hand as of June 30, 2021 to reduce net debt as calculated under the covenant to avoid a covenant violation, if necessary. If covenant compliance requirements are not amended or waived or we are not able to reduce USSK’s net debt with cash on hand, it may result in an event of default, 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. An event of default under the USSK Credit Agreement could also result in an event of default under the Credit Facility Agreement.

At June 30, 2020, USSK had availability of €110 million (approximately $123 million) under the USSK Credit Agreement. The USSK Credit Agreement expires in September 2023.

The USSK Credit Agreement contains customary representations and warranties including, as a condition to borrowing, that it met certain financial covenants since the last measurement date, and that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, and representations as to no material adverse change in our business or financial condition since December 31, 2017. The USSK Credit Agreement also contains customary events of default, including a cross-default upon acceleration of material indebtedness of USSK and its subsidiaries.

As of June 30, 2020, USSK had no borrowings under its €20 million and €10 million credit facilities (collectively, approximately $34 million) and the availability was approximately $32 million due to approximately $2 million of customs and other guarantees outstanding. These facilities expire in December 2021.

At June 30, 2020, UPI had borrowings of $77 million under its $110 million revolving credit facility (UPI Amended Credit Facility). Borrowings are secured by liens on certain UPI inventory and trade accounts receivable. The UPI Amended Credit Facility 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. At June 30, 2020, UPI had availability of $7 million under the UPI Amended Credit Facility. The agreement was terminated on July 17, 2020 and the outstanding borrowings were repaid using cash on hand. Upon termination of the UPI Amended Credit Facility, UPI was added as a subsidiary guarantor to the Credit Facility Agreement which increased the inventory and trade accounts receivable under that facility and resulted in an increase in U. S. Steel's liquidity.ECA.

Certain of our credit facilities, including the Credit Facility Agreement, the Big River Steel ABL Facility, the USSK Credit Agreement and the ECA,Export Credit Agreement, contain standard terms and conditions including customary material adverse change clauses. If a material adverse change werewas to occur, our ability to fund future operating and capital requirements could be negatively impacted.

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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 15 to the Condensed Consolidated Financial Statements for further details regarding U. S. Steel's debt.

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 $209$215 million of liquidity sources for financial assurance purposes as of June 30, 2020.2021. Increases in certain of these commitments which use collateral are reflected within cash, cash equivalents and restricted cash on the Condensed Consolidated Statement of Cash Flows.

At June 30,In October 2020, in the eventCompany entered into a supply chain finance agreement with a third-party administrator with an initial term of a change in controlone year which is guaranteed by the Export Import Bank of U. S. Steel, the following may occur: (a) debt obligations totaling $5.129 billion asUnited States (Ex-Im Guarantee). See our Annual Report on Form 10-K for the year-ended December 31, 2020 for further details. As of June 30, 20202021, accounts payable and accrued expenses included $75 million of outstanding payment obligations which suppliers elected to sell to participating financial institutions. Access to supply chain financing could be curtailed in the future if the terms of the Ex-Im Guarantee are modified or if our credit ratings are downgraded. If access to supply chain financing is curtailed, working capital could be negatively impacted which 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 $17 million or provide a cash collateralized letter of credit to secure the remaining obligation.necessitate additional borrowing.

The maximum guarantees of the indebtedness of unconsolidated entities of U. S. Steel totaled $7 million at June 30, 2020. 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.

Our major cash requirements in 2020 are expected to be for capital expenditures, employee benefits and operating costs, which includes purchases of raw materials. We finished the second quarter of 20202021 with $2.300 billion$1,329 million of cash and cash equivalents and $2.652 billion$4,176 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.

On April 30, 2020 (the Effective Date), the Company entered into an Option Agreement (Option Agreement) with Stelco Inc. (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 will pay the Company an aggregate amount of $100 million in five $20 million installments, which began on the Effective Date and will end on December 31, 2020. 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 in the form of a one-time special distribution, and the parties will engage in good faith negotiations to finalize the master agreement (pursuant to which Stelco will acquire the Option Interest) and the limited liability company agreement of the Joint Venture. As of June 30, 2020, Stelco has made installment payments totaling $40 million which are recorded in noncontrolling interest in the Condensed Consolidated Balance Sheet. Subject to the terms and conditions of the Option Agreement, Stelco may exercise the Option at any time during the period commencing on the Final Payment Date and expiring on January 31, 2027 unless earlier terminated.

U. S. Steel management believes that our liquidity will be adequate to fund our requirements based on our current assumptions with respect to our results of operations and financial condition, including the continued impact of the COVID-19 pandemic, particularly when taken together with the ongoing disruption in the oil and gas industry.condition.
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We expect that our estimated liquidity requirements will consist primarily of the remaining portion of our 20202021 planned strategic and sustaining capital expenditures, additional debt repayment, working capital requirements, interest expense, and operating costs and employee benefits for our operations after taking into account therecent footprint actions and cost reductions at our plants and headquarters described above, partially offset by the anticipated benefits of working capital management.headquarters. Our available liquidity at June 30, 20202021 consists principally of our cash and cash equivalents and available borrowings under the Fifth Credit Facility Agreement, Big River Steel ABL Facility and the USSK Credit Facilities. 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, which may includeincluding but not limited to, repayment or refinancing of outstanding debt, the incurrence of additional debt or the issuance of additional debt or equity securities, drawing on available capacity under the Fifth Credit Facility Agreement, Big River Steel ABL Facility and/or the USSK Credit Facilities, or reducing outstanding borrowings under those facilities from time to time if deemed appropriate by management.

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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 approval of the Slovak National Allocation table in July 2021. The Slovak Ministry of Environment's decision on USSE’s free allocation for the first five years of allowancesthe Phase IV period is expected by the end of September 2021. In the fourth quarter of 2020 USSE started purchasing EUA for the Phase III period, which covers the years 2013 through 2020 is 48 million allowances. Based on projected total production levels, we started to purchase allowances in the third quarter of 2017 to meet the annual compliance submission in the future.IV period. As of June 30, 2020,31, 2021, we have purchasedpre-purchased approximately 12.32.0 million European Union Allowances (EUA)EUA totaling €141.1€67 million (approximately $154.6$79 million) to cover the estimated shortfall of emission allowances. We estimate that the total shortfall will be approximately 12 million allowances for the Phase III period. The exact cost of complying with the ETS regulations will depend on future production levels and future emissions intensity levels, however our estimated shortfall of emission allowances is covered by purchased European Union Allowances..

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 broad estimate of totalTotal capital expenditures for projects to comply with or go beyond BAT requirements iswere €138 million (approximately $151$164 million) over the actual program period. These costs were partially offset by the EU funding received and may be mitigated over the next measurement periods if USSK complies with certain financial covenants, which are assessed annually according to EU funding rules.annually. USSK complied with these covenants as of June 30, 2020.2021. 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 21 to the Condensed Consolidated Financial Statements, “Contingencies and Commitments - Environmental Matters, EU Environmental Requirements.”

New and Emerging Environmental Regulations

United States and European Greenhouse Gas Emissions Regulations

Future compliance with CO2CO2 emission requirements may include substantial costs for emission allowances, restriction of production and higher prices for coking coal, natural gas and electricity generated by carbon-based systems. Because 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,Plan (CPP). As a result, in June 2019, the U.S. EPA proposed topublished a final rule, the “Affordable Clean Energy (ACE) Rule” that replaced the CPP. Twenty-three states, the District of Columbia, and seven municipalities are challenging the CPP repeal and ACE rule in the Clean Power Plan after reviewingU.S. Court of Appeals for the plan pursuant to President Trump’s executive order. Any repeal and/or replacementD.C. Circuit. A coalition of 21 states has intervened in the litigation in support of the Clean Power Plan is likely to be challenged by various proponents of the plan, such as environmentalU.S. EPA. Various other public interest organizations, industry groups, and certain states.Members of Congress are also participating in the litigation. On January 19, 2021, the District of Columbia Circuit vacated and remanded the ACE to the U.S. EPA, while the CPP remains stayed. It is unclear as to how the new Biden administration will proceed with the remand. Any impacts to our operations as a result of any 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.

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ThereThe 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 are still being finalized and may differ between the periods. Currently, the overall EU target is a 40 percent reduction of 1990 emissions by 2030. Free allocation of CO2 allowances is based on reduced benchmark values which have been no materialpublished 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 decreases in production. The threshold for adjustments is set at 15 percent and will be assessed on the basis of a rolling average of two precedent years. Production data verified by an external auditor shows that USSE missed the 15 percent threshold in 2019-20; therefore, the free allocation for 2021 will be decreased. Additionally, lower production in 2019 and 2020 will have an impact on the future free allocation for 2026-2030, where the historical production average for years 2019-2023 will be assessed.

In order to achieve the EU political goal of carbon emissions 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 in U. S. Steel’s exposure to European Greenhouse Gas Emissions regulations since December 31, 2019.current EU ETS functions and requirements, including: a new carbon border adjustment mechanism (CBAM) 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 proposals are subject to the EU legislative process and we cannot predict their future impact.

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.

The U.S. EPA is currently inOn July 13, 2020, the process of completing 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 May 5, 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. 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 (AISI), Clean Air Council and others, were filed with the United States Court of Appeals for the District of Columbia Circuit. The cases were consolidated and are being held in abeyance until the U.S. EPA accepted comments on the proposed rule until November 7, 2019. Based upon our analysis of the integrated ironreviews and steel proposed rule, the Company does not expect any material impact if the rule is finalized as proposed.responds to administrative petitions for review. 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, U.S. EPA is proposing no revisions to 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 proposed taconite rule, the Company does not expect any material impact ifas a result of the rule. However, petitions for review of the rule is finalized as proposed.were filed in the United States Court of Appeals for the District of Columbia Circuit, in which the Company and AISI intervened. 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.

On March 12, 2018, the New York State Department of Environmental Conservation (DEC), along with other petitioners, submitted a CAA Section 126(b) petition to the U.S. EPA. In the petition, the DEC asserts that stationary sources from the following nine states are interfering with attainment or maintenance of the 2008 and 2015 ozone National Ambient Air Quality Standards (NAAQS) in New York: Illinois, Indiana, Kentucky, Maryland, Michigan, Ohio, Pennsylvania, Virginia, and West Virginia. DEC is requesting the U.S. EPA to require sources of nitrogen oxides in the nine states to reduce such emissions. In a final rule promulgated in the October 18, 2019, Federal Register, the U.S. 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.the U.S. EPA’s denial of the petition. The matter remains beforeIn July 2020, the Court.Court vacated the U.S. EPA’s determination and remanded it back to the U.S. EPA to reconsider the 126(b) petition in a manner consistent with the Court’s opinion. At this time, since the U.S. EPA’s decision after its reconsideration is unknown, the impacts of any reconsideration are indeterminable and inestimable.

The CAA also requires the U.S. EPA to develop and implement NAAQS for criteria pollutants, which include, among others, particulate matter (PM) - consisting of PM10PM10 and PM2.5,PM2.5, lead, carbon monoxide, nitrogen dioxide, sulfur dioxide (SO2)(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
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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
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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 District of Columbia Circuit. Several other states and industry trade groups intervened in support of the U. S. EPA’s action. The case remains before the Court.

On December 14, 2012, the U.S. EPA lowered the annual standard for PM2.5PM2.5 from 15 micrograms per cubic meter (ug/m3)m3) to 12 ug/m3,m3, and retained the PM2.5PM2.5 24-hour and PM10PM10 NAAQS rules. In December 2014, the U.S. EPA designated some areas in which U. S. Steel operates as nonattainment with the 2012 annual PM2.5PM2.5 standard. On April 6, 2018, the U.S. EPA published a notice that Pennsylvania, California 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, was required to submit a SIPState Implementation Plan (SIP) to the U.S. EPA no later than November 7, 2019 to avoid sanctions. On April 29, 2019, the ACHD published a draft SIP for the Allegheny County nonattainment area which demonstrates that all of Allegheny County will meet its reasonable further progress requirements and be in attainment with the 2012 PM2.5PM2.5 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. The draft SIP was then sent to the Pennsylvania Department of Environmental Protection (PADEP). PADEP submitted the SIP to the U.S. EPA for approval on November 1, 2019. To date, the U.S. EPA has not taken action on PADEP’s submittal. On April 14,December 18, 2020, the U.S. EPA proposedpublished a final rule pursuant to retainits statutorily required review of NAAQS that retains the 12 ug/m3 annual and 35 ug/3 24-hour PM2.5existing PM2.5 standards without revision. In early 2021, several states and non-governmental organizations filed petitions for judicial review of the action with the United States Court of Appeals for the District of Columbia Circuit. Several industry trade groups intervened in support of the U.S. EPA’s action. The case remains before the Court.

In July 2018,On January 26, 2021, ACHD announced that for the ACHD provided U. S. Steel, ACHD Regulation Subcommittee members and interested parties with draft regulations that would modify the existingfirst time in history all eight 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 plantquality monitors in Allegheny County met the federal air quality standards including particulate matter (PM2.5and one of two remaining in Pennsylvania), the draft regulations would reducePM10).

On November 20, 2020, ACHD proposed a reduction to the current allowable emissions from coke plant operations, andincluding the hydrogen sulfide content of coke oven gas, that 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 details onBecause U. S. Steel believes ACHD did not follow the procedures prescribed in the June 27, 2019 Settlement Agreement (Agreement) with ACHD, see "Item 1. Legal Proceedings - Environmental Proceedings - Mon Valley Works."

Environmental Remediation

In the United States, U. S. Steel has been identified as a potentially responsible party (PRP) at six sites under CERCLA asinvoked dispute resolution per the terms of June 30, 2020. Of these, there are three sites for which information requests have been received or there are other indications thatthe Agreement regarding ACHD’s proposed coke rule. U. S. Steel may be a PRP under CERCLA, but sufficient information is not presently available to confirmand ACHD are currently negotiating resolution of the existence of liability or to make a reasonable estimate with respect to any potential liabilities. There are also 17 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
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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.disputes.

For further discussion of relevant environmental matters, including environmental remediation obligations, see "Item 1. Legal Proceedings - Environmental Proceedings."
OFF-BALANCE SHEET ARRANGEMENTS
U. S. Steel did not enter into any new material off-balance sheet arrangements during the second quarter of 2020.2021.

INTERNATIONAL TRADE
U. S. Steel continues to face import competition, much of which is unfairly traded, supported by foreign governments, and fueled by massive global steel overcapacity, currently estimated to be over 500625 million metric tons per year.year—more than seven times the entire U.S. steel market and more than thirty times total U.S. steel imports. These imports, as well as the underlying policies/practices and overcapacity, 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 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 one-year temporary product exclusions from the Section 232 tariffs orand quotas. Over 160,000276,000 temporary 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
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Multiple legal challenges and retaliatory trade measures have been initiated in response to the Section 232 action. In June 2020, the U.S. Supreme Court decided not to hear the American Institute for International Steel’s (AIIS) appeal challenging the constitutionality of the Section 232 statute, ending AIIS’ two-year legal challenge. On July 14, 2020, in an appeal brought by importer Transpacific Steel LLC,action continue before the U.S. Court of International Trade (CIT) ruled thatand U.S. Court of Appeals for the Presidential Proclamation temporarily increasingFederal Circuit (CAFC). U.S. courts have consistently rejected constitutional and statutory challenges to the initial steel Section 232 tariffs on Turkish steel imports from 25 to 50 percent was unlawful because the increase did not adhere to the implementation timeline established in the Section 232 statute. As such, the CIT found that the President cannot modify Section 232 measures without following statutory procedural steps. There are currently 26 other Section 232 challenges still pending before the CIT.action and overall product exclusion process. Multiple countries have challenged the Section 232 action at the World Trade Organization (WTO), imposed retaliatory tariffs, and/or acted to safeguard their domestic steel industries from increased steel imports. In turn, the United States has challenged the retaliation at the WTO.

In May 2021, the United States and the EU agreed to begin discussions to address global steel overcapacity and the Section 232 action. The EU suspended the doubling of Section 232 retaliation scheduled for June 2021 for six months until December 2021. In June 2021, the United States and the EU issued a joint statement committing to complete discussions on a wide range of trade issues including overcapacity and the Section 232 action and retaliation by the end of 2021.

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 capacity,production capabilities, technology, and skills, thereby strengthening U.S. national and economic security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) imposed a definitive tariff rate quota safeguard on certain steel imports:of 25 percent tariffs on certain steel imports that exceed quotas effective through June 2021.established quotas. In June 2020,2021, the EC made several minor adjustmentsvoted to extend the safeguard.safeguard for an additional three years, until June 2024.

Antidumping duties (AD) and countervailing/antisubsidycountervailing duties (CVD) apply(CVD or anti-subsidy duties) are applied to certain steel product imports in addition to the Section 232 tariffs and quotas andmeasures in the EC’sUnited States or the steel safeguard in the EU, and AD/CVD orders will lastcontinue beyond the Section 232 action and the EC’s safeguard. Thus, U. S. Steel continues to actively defend and maintain the 5455 U.S. AD/CVD orders and 1112 EU AD/CVD orders covering products that can be manufactured by 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.

In MayJune 2021, the DOC made a final affirmative determination that corrosion-resistant steel (CORE) from Malaysia made from Chinese and June 2020,Taiwanese substrate circumvent the AD/CVD orders on CORE from China and Taiwan, resulting in AD/CVD between 4 and 248 percent on such imports. In the EU, in April 2021, the EC initiated new AD/CVD investigationsannounced definitive 4.7 to 7.3 percent AD duties on EU imports of hot-rolled steel from Turkey. Provisional measures could be imposed by JanuaryTurkey, effective July 2021. In June 2021, the EC initiated new AD investigations of EU imports of hot-dipped galvanized steel from Turkey and final duties could be imposed by July 2021.
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Russia.

In July 2020, the ITC votedAdditional tariffs of 7.5 to 25 percent continue the AD/CVD orders on oil country tubular goods from India, Korea, Turkey, Ukraine, and Vietnam for another five years. Also in July 2020, Vallourec Star filed new AD/CVD petitions onto apply to certain U.S. imports of seamless standard, line,from China, including certain raw materials used in steel production, semi-finished and pressure pipe from Czech Republic, Korea, Russia,finished steel products, and Ukraine.

Following the 2018 investigation underdownstream steel products, pursuant to Section 301 of the Trade Act of 1974, the United States continues to impose 7.5 to 25 percent tariffs on certain imports from China, including certain steel products.

The Global Forum on Steel Excess Capacity, the Organization for Economic Co-operation and Development Steel Committee and trilateral negotiations between the United States, EU, and Japan continue to address global overcapacity.1974.

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.

NEW ACCOUNTING STANDARDS
See Notes 2 and 3 to the Condensed Consolidated Financial Statements in Part I Item 1 of this Quarterly Report on Form 10-Q.

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For quantitative and qualitative disclosures about market risk, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, there were no material changes in U. S. Steel is exposedSteel's exposure to certain risks related to its ongoing business operations, including financial, market political, and economic risks. The global pandemic resultingrisk from the novel coronavirus designated as COVID-19 has had a significant impact on our business and the global economy. The economic uncertainty has increased volatility in the financial markets and could adversely affect our liquidity and ability to access the capital markets. In response to the decline in demand for our products resulting from the COVID-19 pandemic, in March 2020 we borrowed an additional $800 million under the Fifth Amended and Restated Credit Agreement (Credit Facility Agreement). During the second quarter 2020, we repaid $100 million on the Credit Facility Agreement. As of June 30, 2020, the Company had approximately $2.0 billion in outstanding variable interest debt. An increase in the variable interest rate increases our interest expense and interest paid. A quarter percent increase in the variable interest rate on the amount of variable interest rate indebtedness as of June 30, 2020 would increase annual interest expense by approximately $5 million. See Note 15 in the Notes to the Condensed Consolidated Financial Statements for further details. In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility.   December 31, 2020.

Item 4.CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
U. S. Steel has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2020.2021. These disclosure controls and procedures are the controls and other procedures that were designed to ensure that information required to be disclosed in reports that are filed with or submitted to the U.S. Securities and Exchange Commission are: (1) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported within the time periods specified in applicable law and regulations. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2020,2021, U. S. Steel’s disclosure controls and procedures were effective.
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 fiscal quarter covered by this quarterly report, which have materially affected, or are reasonably likely to materially affect, U. S. Steel’s internal control over financial reporting.




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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
GENERAL LITIGATION

On 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 the United States District Court for the Southern District of Texas against Nucor, U. S. Steel, AK Steel Holding Group, and Cleveland-Cliffs (collectively, the 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 Defendants acted in violation of Section 1 of the Sherman Act and the Clayton Act (federal antitrust), and violation of the Texas Free Enterprise and Antitrust Act. JSW also alleges that the Defendants formed a civil conspiracy in violation of Texas common law, and that the Defendants tortiously interfered with JSW’s business relationships. The basis for JSW’s allegations relate to the Defendants participation in the U. S. Department of Commerce’s Section 232 process, including Defendants’ support of the enactment of the President’s Section 232 proclamation, statements made by the Defendants after the enactment of Section 232, and Defendants’ participation in the Section 232 exclusion process. Plaintiffs seek monetary damages including $45 million for payment of Section 232 tariffs and unspecified amounts for financial penalties, termination fees and lost profits as well as other damages. The Company intends to vigorously defend the matter.
On January 22, 2021, NLMK Pennsylvania, LLC and NLMK Indiana, LLC (NLMK) filed a Complaint in the Court of Common Pleas of Allegheny County, Pennsylvania against the Company. The Complaint alleges that the Company made misrepresentations to the U. S. Department of Commerce regarding NLMK’s requests to be excluded from tariffs assessed on steel slabs imported into the United States pursuant to the March 2018 Section 232 Presidential Order imposing tariffs. NLMK claims over $100 million in compensatory and other damages. The Company removed the claim to the United States District Court for the Western District of Pennsylvania on February 25, 2021. NLMK filed a Motion to Remand the claim back to State court, which is currently pending before the court. The Company is vigorously defending the matter.
On April 11, 2017, there was a process waste-water release at our Midwest Plant (Midwest) in Portage, Indiana, that impacted a water outfall that discharges to Burns Waterway near Lake Michigan. U. S. Steel identified the source 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 Foundation and the City of Chicago initiated suits in the Northern District of Indiana alleging Clean Water Act (CWA) and Permitpermit violations at Midwest. On April 2, 2018, the U.S. EPA and the State of Indiana initiated a separate action against the Company and lodged a Consent Decree negotiated between U. S. Steel and the relevant governmental agencies consisting of all material terms to resolve the CWA and National Pollutant Discharge Elimination System (NPDES) 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) filed a revised Consent Decree and a motion with the Courtcourt 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 March 8, 2021, the Court granted the Company’s Motion to Dismiss the Surfrider Foundation and City of Chicago Complaints in Intervention and granted leave to amend their respective Complaints.
On November 30, 2018, the Minnesota Pollution Control Agency (MPCA) issued a new Water Discharge Permit for the Minntac Tailings Basin waters. The Permitpermit 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 Minnesota 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 courtCourt issued a favorable ruling to U. S. Steel, removing the sulfate limitations for the Tailings Basin and groundwater. The opposing parties filed appeals with the Minnesota Supreme Court on January 8, 2020 which were accepted by that Court. The Court is currently reviewing motions related toOn February 10, 2021 the impacts of a recent U. S.Minnesota Supreme Court reversed the Court of Appeals’ decision regarding sulfate limitations and remanded the case uponfor further proceedings, including a determination on the U. S. Steel case.Company’s requests for variances. On June 28, 2021, the Court of Appeals issued a ruling denying the Company’s request for a variance from the sulfate standard for a contested case hearing.

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 State and Federal 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 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) 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
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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 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 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 Court granted Plaintiffs’ motion to certify the proceeding as a class action. The Company's appeal of that decision has been denied by the Third Circuit Court of Appeals.Appeals and the class has been notified. Discovery is proceeding.


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ENVIRONMENTAL PROCEEDINGS
The following is a summary of the proceedings of U. S. Steel that were pending or contemplated as of June 30, 2020,2021, under federal and state environmental laws.laws and which U. S. Steel reasonably believes may result in monetary sanctions of at 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) 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 June 30, 2020,2021, U. S. Steel has received information requests or been identified as a PRP at a total of sixfour 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 three sitessite will be between $100,000 and $1 million for two 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 Units that could impact the Estuary 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 costs associated with implementing the proposed remedial plan at the site.

WhileRemediation contracts were issued by both USS and GLNPO for the first phase of the remedial work at the site during the fourth quarter of 2020. USS has recently contracted for the second phase of work at the site which will extend through early 2022. Work continues on refinement of the final phase of the remedial design permitting, contractor selection and educating the public and key stakeholders on the details of the plan, there has been no material change in the status of the project during the six months ended June 30, 2020.permitting. Additional, study, investigation, design, oversight costs, and implementation of U. S. Steel'sPhase 1 and Phase 2 of the preferred remedial alternativesalternative on the upland property and Estuary are currently estimated as of June 30, 20202021 at approximately $44$33 million. Significant additional costs associated with this site are possible and are referenced in Note 21 to the Condensed Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

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 17nine 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 seven 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

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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 possible at this time to define a scope or estimate costs for what may be requiredfacility. An Interim Stabilization Measure work plan has been approved by the U.S. EPA.EPA for one of the six areas and a contractor has recently completed 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 $24 million as of June 30, 2020,2021, 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 21 to the Condensed 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 investigation on a majority of the remaining areas identified in the permit, U. S. Steel hashad determined the most effective means to address the remaining impacted material iswas 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 $38$19 million as of June 30, 2020,2021, for our estimated share of the remaining costs of remediation.remediation at the site.

USS-POSCO Industries (UPI)

In February 2020, U. S. Steel purchased the remaining 50 percent interest in UPI, a former joint venture that is located in Pittsburg, California between subsidiaries of U. S. Steel and POSCO. Prior to formation of the joint venture, UPI's facilities were previously owned and operated solely by U. S. Steel which assumed 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 six months ended June 30, 2020.2021. As of June 30, 2020,2021, 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 21 to the Condensed Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.” See Note 5 to the Condensed Consolidated Financial Statements "Acquisition" for further details regarding U. S. Steel's purchase of UPI.

In 2017, the Contra Costa Health Services Hazardous Materials Programs (County Health Services) conducted inspections of UPI’s facility, which resulted in the identification of several alleged environmental violations. Thereafter, UPI was able to resolve many of the issues to the satisfaction of County Health Services, but UPI also encountered some delays and disagreements pertaining to certain alleged violations. In 2018, County Health Services referred the matter to the Contra Costa District Attorney’s Office. In October 2019, UPI and the District Attorney’s Office agreed to a tentative settlement whereby UPI would pay $2.4 million in civil penalties in installments over 24 months. The tentative settlement also calls for UPI to spend $1 million on environmental compliance at its facility (expenditures that benefit UPI). In addition, the tentative settlement includes a $1 million suspended penalty that would be due if UPI were to fall out of compliance during the compliance period. The tentative settlement has been finalized and will be submitted for Court approval.

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 six months ended June 30, 2020.2021. In total, the accrued liability for remaining work under the Corrective Action Program, was approximately $131,000$118,000 at June 30, 2020. Significant additional costs associated with this site are possible and are referenced in Note 21 to the Condensed Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

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Fairless Plant

In April 1993, 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 September 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 six months ended June 30, 2020. As of June 30, 2020, the accrued liability to maintain the interim measures, and clear properties through the Act 2 process is approximately $143,000. Significant additional costs associated with this site are possible and are referenced in Note 21 to the Condensed Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

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 six months ended June 30, 2020. As of June 30, 2020, 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 21 to the Condensed 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 extent of impacts at the remaining subarea, there has been no material change in the status of the project during the six months ended June 30, 2020. U. S. Steel has an accrued liability of $240,000 as of June 30, 2020.2021. Significant additional costs associated with this site are possible and are referenced in Note 21 to the Condensed Consolidated Financial Statements “Contingencies and Commitments - Environmental Matters - Remediation Projects - Projects with Ongoing Study and Scope Development.”

Cherryvale (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
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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 is now underway and is projected to continue through 2022. U. S. Steel has an accrued liability of approximately $9$4 million as of June 30, 2020,2021, for our estimated share of the cost of remediation.

South Works

On August 29, 2017, U. S. Steel was notified by the U.S. Coast Guard of a sheen on the water in the North Vessel Slip at our former South Works in Chicago, Illinois.  U. S. Steel has been working with the IEPA under their voluntary Site Remediation Program since 1993 to evaluate the condition of the property including the North Vessel Slip. The result of this cooperative effort has been the issuance of a series of “No Further Remediation” (NFR) notices to U. S. Steel including one specific to the North Vessel Slip. U. S. Steel has notified the IEPA of the potential changed
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condition and is working closely with the IEPA 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 $39,000 as of June 30, 2020.

Air Related Matters

Great Lakes Works

In June 2010, the U.S. 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, the 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 $370,000 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

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 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
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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) jointly issued a Notice of Violation (NOV) regarding the Company’s Edgar Thomson facility in Braddock, PA. 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
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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, the U.S. EPA Region III and U. S. Steel continue to negotiate a potential resolution of the matter.

On December 24, 2018, U. S. Steel's Clairton Plant experienced a fire, affecting portions of 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 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 jurisdiction 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 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 Liberty 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 alleged 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. An action was initiated in Federal Court in the Western District of Pennsylvania. U. S. Steel moved to dismiss that action in its entirety. That motion was granted by the District Court on May 14, 2020. The Plaintiffs have appealed that dismissal.Water Related Matters

On April 24,February 7, 2020, the Indiana Department of Environmental Management (IDEM) issued an Amended Notice of Violation and Proposed Agreed Order related to alleged NPDES permit water discharge violations at our Midwest Plant (Midwest) in Portage, Indiana during the period of November 2018 through December 2019 U. S. Steel was served with a class action complaint that was filedunrelated to the violations resolved in the Allegheny Court of Common Pleas related to the December 24, 2018 fire at Clairton.Consent Decree. The complaint asserts common law nuisanceProposed Agreed Order seeks corrective actions, a civil penalty, 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.stipulated penalties for future violations. The parties are currently engaged in discovery. U. S. Steel is vigorously defending the matter.continue to negotiate a Proposed Agreed Order.
ASBESTOS LITIGATION
As of June 30, 2020, U. S. Steel was a defendant in approximately 816 active cases involving approximately 2,400 plaintiffs. The vast majority of these cases involve multiple defendants. About 1,540, or approximately 64 percent, of these plaintiff claims are currently pending in jurisdictions which permit filings with massive numbers of plaintiffs. At December 31, 2019, U. S. Steel was a defendant in approximately 800 active cases involving approximately 2,390
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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 activity with respect to asbestos litigation:
Period endedOpening
Number
of Claims
Claims
Dismissed, Settled and Resolved(a)
New
Claims
Closing
Number
of Claims
December 31, 20173,3402752503,315
December 31, 20183,3151,2852902,320
December 31, 20192,3201952652,390
June 30, 20202,3901301402,400
(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 exposedSee Note 21 to our Consolidated Financial Statements, Contingencies and Commitments for a description of our 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.
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 2019, the Company engaged an outside valuation consultant to assist in assessing its ability to estimate an accrual 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.
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.litigation.

Item 1A. Risk Factors
Item 1A.RISK FACTORS
The outbreak of COVID-19 and disruptions in the oil and gas industryThere have had, and are expected to continue to have, an adverse impact on the Company’s results of operations, financial condition and cash flows.

The global pandemic resulting from the novel coronavirus designated as COVID-19 has had a significant impact on economies, businesses and individuals around the world. Efforts by governments around the world to contain the virus have involved, among other things, border closings and other significant travel restrictions; mandatory stay-at-home and work-from-home orders in numerous countries, including the United States; mandatory business closures; public gathering limitations; and prolonged quarantines. These efforts and other governmental, business and individual responsesbeen no material changes or updates to the COVID-19 pandemic have led to significant disruptions to commerce, lower consumer demand for goods and services and general uncertainty regarding the near-term and long-term impact of the COVID-19 virus on the domestic and international economy and on public health. These developments and other consequences of the outbreak have and could continue to materially adversely impact the Company's results of operations, financial condition and cash flows.

The U.S. Department of Homeland Security guidance has identified U. S. Steel's business as a critical infrastructure industry, essential to the economic prosperity, security and continuity of the United States. Similarly,risk factors previously disclosed in Slovakia, U. S. Steel Kosice was identified by the government as a strategic and critical company, essential to economic
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prosperity, and continues to operate. However, although we continue to operate, we have experienced and are likely to continue to experience, significant reductions in demand. For example, the oil and gas industry, which is one of our significant end markets, has been experiencing a significant amount of disruption and has been experiencing oversupply at a time of declining demand, resulting in a decline in profitability. Our Tubular operations support the oil and gas industry, and therefore the industry's decline has led to a significant decline in demand for our Tubular products. We also may experience disruptions to our operations resulting from changes in government policy or guidance; quarantines of employees, customers and suppliers in areas affected by the outbreak; and closures of businesses or manufacturing facilities that are critical to our business or our supply chain.

The COVID-19 pandemic could also adversely affect our liquidity and ability to access the capital markets. The Company’s credit ratings were downgraded earlier this year by three credit ratings agencies, all citing, among other things, the uncertainty in duration and impact of the COVID-19 outbreak on our business. Uncertainty regarding the duration of the COVID-19 pandemic and disruptions to the oil and gas industry may, for example, adversely impact our ability to raise additional capital, or require additional capital, or require additional reductions in capital expenditures that are otherwise needed, to support working capital or continuation of our "best of both" strategy. Additionally, government stimulus programs may not be available to the Company, its customers, or its suppliers, or may prove to be ineffective. Furthermore, in the event that the impact from the COVID-19 outbreak causes us to be unable to satisfy any of our financial covenants under the agreements governing our outstanding indebtedness, the availability of credit facilities may become limited, or we may be required to renegotiate such agreements on less favorable terms. For example, based on the most recent four quarters as of June 30, 2020, we have not met the fixed charge negative covenant test under our Credit Facility Agreement, and accordingly, the amount available to the Company under this facility was reduced by $200 million. In addition, since the value of our inventory and trade accounts receivable less specified reserves calculated in accordance with the Credit Facility Agreement do not support the full amount of the facility at June 30, 2020, the amount available to the Company under this facility was further reduced by $210 million. As of June 30, 2020, the availability under the Credit Facility Agreement was $190 million. If we are unable to access additional credit at the levels we require, or the cost of credit is greater than expected, it could materially adversely affect our operating results.

COVID-19 could negatively affect our internal controls over financial reporting as a portion of our workforce is required to work from home and therefore new processes, procedures, and controls could be required to respond to changes in our business environment.

The Company may be susceptible to increased litigation related to, among other things, the financial impacts of the pandemic on its business, its ability to meet contractual obligations due to the pandemic, employment practices or policies adopted during the health crisis, or litigation related to individuals contracting COVID-19 as result of alleged exposures on Company premises.

In addition, the COVID-19 outbreak has significantly increased economic and demand uncertainty. The current outbreak and continued spread of COVID-19 has caused a global recession, which has had a further material adverse impact on our results of operations, financial condition and cash flows. The full extent to which the COVID-19 outbreak will affect our operations, and the steel industry generally, remains highly uncertain and will ultimately depend on future developments which cannot be predicted at this time, including, but not limited to, the duration, severity, speed and scope of the outbreak, the length of time required for demand to return and normal economic and operating conditions to resume. The impact of the COVID-19 outbreak may also have the effect of exacerbating many of the other risks described in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
We may not be able to generate sufficient cash to service all of our debt, and may be forced to take other actions to satisfy our obligations under our debt, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations 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, such as the disruption caused by the COVID-19 pandemic and the disruption in the oil and gas industry. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our debt.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our debt. We may not
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be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The Fifth Credit Facility Agreement governing the ABL Facility, the documents governing the USSK Credit Facilities, the documents governing the Export Credit Facility and the indentures governing our existing senior unsecured notes and our 2025 Senior Secured Notes 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 debt on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations.
If we cannot make scheduled payments on our debt, we will be in default and holders of our notes could declare all outstanding principal and interest to be due and payable, the lenders under the ABL Facility and the USSK Credit Facilities 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 forced into bankruptcy or liquidation. All of these events would materially and adversely affect our financial position and results of operations.2020.

We may not fully realize the expected monetary benefits from our iron ore assets.
Item 2.PURCHASES OF EQUITY SECURITIES BY ISSUER AND AFFILIATED PURCHASERS
None.

A component of our strategy includes monetizing our excess iron ore assets. Once Stelco Inc. completes the remaining payments and U. S. Steel has received the $100 million aggregate option price, Stelco will hold an option (“Option”) to acquire an undivided 25% 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 make the remaining partial payments and 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.
Item 3.DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.MINE SAFETY DISCLOSURES
The information concerning mine safety violations and other regulatory matters required by Section 150 of the Dodd-Frank Wall Street Reform Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Form 10-Q.

Item 5.OTHER INFORMATION
None.
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Item 6.EXHIBITS
3.1
3.13.2
10.1
10.2
10.3
10.4
31.1
31.2
32.1
32.2
95
101
The following financial information from United States Steel Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 20202021 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Statement of Operations, (ii) the Condensed Consolidated Statement of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheet, (iv) the Condensed Consolidated Statement of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
104Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101).
* Schedules and exhibits have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned chief accounting officer thereunto duly authorized.
UNITED STATES STEEL CORPORATION
By/s/ Manpreet S. Grewal
Manpreet S. Grewal
Vice President, Controller & ControllerChief Accounting Officer

July 31, 202030, 2021
WEB SITE POSTING
This Form 10-Q will be posted on the U. S. Steel web site, www.ussteel.com, within a few days of its filing.
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