Statement Of Income Alternative
Statement Of Income Alternative (USD $) | ||||
In Millions, except Share data in Thousands | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Net sales: | ||||
Net sales | $1,991 | $6,414 | $4,596 | $11,317 |
Net sales to related parties (Note 24) | 136 | 330 | 281 | 623 |
Total | 2,127 | 6,744 | 4,877 | 11,940 |
Operating expenses (income): | ||||
Cost of sales (excludes items shown below) | 2,340 | 5,497 | 5,347 | 10,140 |
Selling, general and administrative expenses | 154 | 171 | 297 | 313 |
Depreciation, depletion and amortization | 159 | 159 | 317 | 315 |
Loss (Income) from investees | 10 | (34) | 31 | (41) |
Net gains on disposal of assets | (36) | (1) | (133) | (2) |
Other income, net (Note 9) | (35) | (2) | (39) | (5) |
Total | 2,592 | 5,790 | 5,820 | 10,720 |
(Loss) Income from operations | (465) | 954 | (943) | 1,220 |
Interest expense | 38 | 42 | 74 | 88 |
Interest income | (1) | (3) | (3) | (8) |
Other financial (income) costs (Note 10) | (28) | (14) | 9 | (87) |
Net interest and other financial costs (income) | 9 | 25 | 80 | (7) |
(Loss) Income before income taxes | (474) | 929 | (1,023) | 1,227 |
Income tax (benefit) provision (Note 12) | (82) | 255 | (192) | 313 |
Net (loss) income | (392) | 674 | (831) | 914 |
Less: Net (loss) income attributable to noncontrolling interests | 0 | 6 | 0 | 11 |
Net (loss) income attributable to United States Steel Corporation | ($392) | $668 | ($831) | $903 |
Net (loss) income per share attributable to United States Steel Corporation shareholders: | ||||
- Basic | -2.92 | 5.69 | -6.63 | 7.68 |
- Diluted | -2.92 | 5.65 | -6.63 | 7.64 |
Weighted average shares, in thousands: | ||||
- Basic | 134,634 | 117,507 | 125,420 | 117,551 |
- Diluted | 134,634 | 118,217 | 125,420 | 118,190 |
Dividends paid per share | 0.05 | 0.25 | 0.35 | 0.5 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Dec. 31, 2008 |
Current assets: | ||
Cash and cash equivalents | $1,950 | $724 |
Receivables, less allowance of $53 and $52 (Note 20) | 1,144 | 2,106 |
Receivables from related parties (Note 24) | 113 | 182 |
Inventories (Note 14) | 1,781 | 2,492 |
Income Tax Receivable (Note 12) | 129 | 0 |
Deferred income tax benefits (Note 12) | 290 | 177 |
Other current assets | 51 | 51 |
Total current assets | 5,458 | 5,732 |
Investments and long-term receivables, less allowance of $6 and $10 | 630 | 695 |
Property, plant and equipment - net (Note 8) | 6,740 | 6,676 |
Intangibles - net (Note 6) | 279 | 282 |
Goodwill (Note 6) | 1,648 | 1,609 |
Assets held for sale (Note 5) | 12 | 211 |
Deferred income tax benefits (Note 12) | 665 | 666 |
Other noncurrent assets | 305 | 216 |
Total assets | 15,737 | 16,087 |
Current liabilities: | ||
Accounts payable | 986 | 1,440 |
Accounts payable to related parties (Note 24) | 87 | 43 |
Bank checks outstanding | 10 | 11 |
Payroll and benefits payable | 787 | 967 |
Accrued taxes (Note 12) | 226 | 203 |
Accrued interest | 35 | 33 |
Short-term debt and current maturities of long-term debt (Note 16) | 18 | 81 |
Total current liabilities | 2,149 | 2,778 |
Long-term debt, less unamortized discount (Note 16) | 3,333 | 3,064 |
Employee benefits | 4,720 | 4,767 |
Deferred credits and other noncurrent liabilities | 406 | 419 |
Total liabilities | 10,608 | 11,028 |
Contingencies and commitments (Note 25) | - | - |
Stockholders' Equity (Note 23): | ||
Common stock (150,925,911 and 123,785,911 shares issued) (Note 13) | 151 | 124 |
Treasury stock, at cost (7,600,571 and 7,587,322 shares) | (610) | (612) |
Additional paid-in capital | 3,637 | 2,986 |
Retained earnings | 4,793 | 5,666 |
Accumulated other comprehensive loss (Note 22) | (3,098) | (3,269) |
Total United States Steel Corporation stockholders' equity | 4,873 | 4,895 |
Noncontrolling interests | 256 | 164 |
Total liabilities and stockholders' equity | $15,737 | $16,087 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
Receivables, allowance | $53 | $52 |
Investments and long-term receivables, allowance | $6 | $10 |
Common stock, shares issued | 150,925,911 | 123,785,911 |
Treasury stock, shares | 7,600,571 | 7,587,322 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating activities: | ||
Net (loss) income | ($831) | $914 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 317 | 315 |
Provision for doubtful accounts | 5 | 5 |
Pensions and other postretirement benefits | 1 | (216) |
Deferred income taxes | (248) | 97 |
Net gains on disposal of assets | (133) | (2) |
Distributions received, net of equity investees income | 40 | (16) |
Changes in: | ||
Current receivables - sold | 0 | 450 |
- repurchased | 0 | (460) |
- operating turnover | 1,028 | (1,043) |
Inventories | 718 | (292) |
Current accounts payable and accrued expenses | (532) | 798 |
Bank checks outstanding | (1) | (5) |
Foreign currency translation | (36) | (56) |
All other, net | 33 | (26) |
Net cash provided by operating activities | 361 | 463 |
Investing activities: | ||
Capital expenditures | (206) | (299) |
Capital expenditures - variable interest entities | (93) | (41) |
Acquisition of Stelco Inc. | 0 | (1) |
Disposal of assets | 339 | 7 |
Restricted cash, net | (47) | 0 |
Investments, net | (8) | (16) |
Net cash used in investing activities | (15) | (350) |
Financing activities: | ||
Issuance of long-term debt, net of financing costs | 839 | 0 |
Repayment of long-term debt | (667) | (36) |
Common stock issued | 666 | 11 |
Common stock repurchased | 0 | (85) |
Distributions from noncontrolling interests | 90 | 25 |
Dividends paid | (42) | (59) |
Excess tax benefits from stock-based compensation | 0 | 9 |
Net cash provided by (used in) financing activities | 886 | (135) |
Effect of exchange rate changes on cash | (6) | 12 |
Net increase (decrease) in cash and cash equivalents | 1,226 | (10) |
Cash and cash equivalents at beginning of year | 724 | 401 |
Cash and cash equivalents at end of period | $1,950 | $391 |
Notes to Financial Statements
Notes to Financial Statements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
1.Basis of Presentation | 1. Basis of Presentation United States Steel Corporation (U. S. Steel) produces and sells steel mill products, including flat-rolled and tubular, in North America and Central Europe. Operations in North America also include real estate management and development, transportation services and engineering and consulting services. The year-end consolidated balance sheet data was derived from audited statements but does not include all disclosures required by accounting principles generally accepted in the United States. Additionally, the year-end consolidated balance sheet data includes certain reclassifications and adjustments that were made to conform the presentation and disclosure to U. S. Steels current presentation, as required by Financial Accounting Standards Board Statement of Financial Accounting Standards No.160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No.51. The other information in these financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. These financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission (SEC) and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. Additional information is contained in the United States Steel Corporation Annual Report on Form 10-K for the year ended December31, 2008. Certain other reclassifications of prior years data have been made. U. S. Steel has evaluated subsequent events through July28, 2009, the date it filed its report on Form 10-Q for the quarter ended June30, 2009 with the SEC, and has no material subsequent events to report. |
2.New Accounting Standards | 2. New Accounting Standards In June 2009, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standard (FAS) No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No.162 (FAS 168). FAS 168 prescribes the Accounting Standards Codification (Codification) as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP). The Codification is effective for interim and annual periods ending after September15, 2009. This will have an impact to our financial statement disclosures since all future references to authoritative accounting literature will be referenced in accordance with the Codification. In June 2009, the FASB issued FAS No.167, Amendments to FASB Interpretation No.46(R) (FAS 167). FAS 167 is a revision to FASB Interpretation No.46(R), Consolidation of Variable Interest Entities, and amends the consolidation guidance for variable interest entities. Additionally, FAS 167 will require additional disclosures about involvement with variable interest entities and any significant changes in risk exposure due to that involvement. FAS 167 is effective January1, 2010 for companies reporting on a calendar-year basis. U. S. Steel does not expect any material financial statement implications relating to the adoption of FAS 167. In June 2009, the FASB issued FAS No.166, Accounting for Transfers of Financial Assets (FAS 166). FAS 166 is a revision to FAS No.140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, and will require more information about transfer of financial assets, including securitization transactions, and enhanced disclosures when companies have continuing exposure to the risks related to transferred financial assets. Additionally, FAS 166 eliminates the concept of a qualifying special-purpose entity. FAS 166 is effective January1, 2010 for companies reporting on a calendar-year basis. U. S. Steel does not expect any material financial statement implications relating to the adoption of FAS 166. In May 2009, the FASB issued FAS No.165, Subsequent Events (FAS 165). FAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. FAS 165 is effective for interim and annual periods ending after June15, 2009 and should be applied prospectively. The disclosures required by FAS 165 are reflected in Note 1 of our financial statements. In April 2009, the FASB issued FASB Staff Position (FSP) No.107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP requires disclosures of fair value for any financial instruments not currently reflected at fair value on the balance sheet for all interim periods. This FSP is effective for interim and annual periods ending after June15, 2009 and should be applied prospectively. The disclosures required by this FSP are reflected in Note 21 of our financial statements. In April 2009 the FASB issued FSP No.115-2 and Financial Accoun |
3.Segment Information | 3. Segment Information U.S.Steel has three reportable segments: Flat-rolled Products (Flat-rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The results of several operating segments that do not constitute reportable segments are combined and disclosed in the Other Businesses category. Effective with the fourth quarter of 2008, the operating results of our iron ore operations, which were previously included in Other Businesses, are included in the Flat-rolled segment. Almost all of our iron ore production is consumed by our Flat-rolled operations and the iron ore operations are managed as part of our Flat-rolled business. The prior periods have been restated to reflect this change. The chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations. Income from operations for reportable segments and Other Businesses does not include net interest and other financial costs, income taxes, benefit expenses for current retirees and certain other items that management believes are not indicative of future results. Information on segment assets is not disclosed, as the chief operating decision maker does not review it. The accounting principles applied at the operating segment level in determining income from operations are generally the same as those applied at the consolidated financial statement level. The transfer value for steel rounds from Flat-rolled to Tubular is based on cost. All other intersegment sales and transfers are accounted for at market-based prices and are eliminated at the corporate consolidation level. Corporate-level selling, general and administrative expenses and costs related to certain former businesses are allocated to the reportable segments and Other Businesses based on measures of activity that management believes are reasonable. The results of segment operations for the second quarter of 2009 and 2008 are: (In millions) Second Quarter 2009 Customer Sales Intersegment Sales Net Sales (Loss) Income from investees (Loss) Income from operations Flat-rolled $ 1,310 $ 26 $ 1,336 $ (10 ) $ (362 ) USSE 645 1 646 - (53 ) Tubular 157 - 157 - (88 ) Total reportable segments 2,112 27 2,139 (10 ) (503 ) Other Businesses 15 41 56 - (7 ) Reconciling Items - (68 ) (68 ) - 45 Total $ 2,127 $ - $ 2,127 $ (10 ) $ (465 ) Second Quarter 2008 Flat-rolled $ 4,018 $ 404 $ 4,422 $ 33 $ 468 USSE 1,760 - 1,760 1 298 Tubular 912 1 913 - 177 Total reportable segments 6,690 405 7,095 34 943 Other Businesses 54 179 233 - 16 Reconciling Items - (584 ) (584 ) - (5 ) |
4.Acquisitions | 4. Acquisitions Non-controlling interests of Clairton 1314B Partnership, L.P. On October31, 2008, U. S. Steel acquired the interests in the Clairton 1314B Partnership, L.P. (1314B)held by unrelated parties for $104 million, and 1314B was terminated. The acquisition has been accounted for in accordance with FAS 141. U. S. Steel accounted for the purchase price of this acquisition, in excess of the acquired noncontrolling interest, using step acquisition accounting. This resulted in a partial step-up in the book value of property, plant and equipment of $73 million, which will be depreciated over 15 years. Pickle Lines On August29, 2008, U. S. Steel Canada Inc. (USSC) paid C$38 million (approximately $36million) to acquire three pickle lines in Nanticoke, Ontario, Canada. The acquisition of the pickle lines strengthened USSCs position as a premier supplier of flat-rolled steel products to the North American market. The acquisition has been accounted for in accordance with FAS 141. The purchase price has been allocated to the acquired property, plant and equipment. |
5.Assets Held for Sale | 5. Assets Held for Sale On January31, 2009, U. S. Steel completed the previously announced sale of the majority of the operating assets of Elgin, Joliet and Eastern Railway Company (EJE) to Canadian National Railway Company (CN) for approximately $300 million. U. S. Steel retained railroad assets, equipment, and employees that support the Gary Works. As a result of the transaction, U. S. Steel recognized a net gain of approximately $97 million, net of a $10 million pension curtailment charge (see Note 7), in the first quarter 2009. As of December31, 2008, the assets of EJE that were to be sold, consisting primarily of property, plant and equipment, were classified as held for sale in accordance with FAS No.144, Accounting for Impairment or Disposal of Long-Lived Assets. |
6.Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets The changes in the carrying amount of goodwill by segment for the six months ended June30, 2009 are as follows: Flat-rolled Segment Tubular Segment Total Balance at December31, 2008 $ 760 $ 849 $ 1,609 Currency translation 39 - 39 Balance at June30, 2009 $ 799 $ 849 $ 1,648 Goodwill represents the excess of the cost over the fair value of acquired identifiable tangible and intangible assets and liabilities assumed from businesses acquired. We have two reporting units that have a significant amount of goodwill. Our Flat-rolled reporting unit was allocated goodwill from the Stelco and Lone Star acquisitions in 2007. These amounts reflect the benefits we expect the Flat-rolled reporting unit to realize from expanding our flexibility in meeting our customers needs and running our Flat-rolled facilities at higher operating rates to source our semi-finished product needs. Our Texas Operations reporting unit, which is part of our Tubular operating segment, was allocated goodwill from the Lone Star acquisition, reflecting the benefits we expect the reporting unit to realize from expanding our tubular operations. Goodwill is tested for impairment at the reporting unit level annually in the third quarter and whenever events or circumstances indicate that the carrying value may not be recoverable. The evaluation of impairment involves comparing the fair value of the associated reporting unit to its carrying value, including goodwill. Fair value is determined using the income approach, which is based on projected future cash flows discounted to present value using factors that consider the timing and the risk associated with the future cash flows. Effective January1, 2009, fair value will be determined in accordance with Financial Accounting Standard No.157, Fair Value Measurements, using a combination of the income, market and cost approaches as applicable. Our annual goodwill impairment test completed in the third quarter of 2008 did not indicate that goodwill was impaired for either reporting unit. The change in business and economic conditions in the fourth quarter of 2008 was considered a triggering event as defined by FAS 142, Goodwill and Other Intangible Assets, and goodwill was subsequently tested for impairment as of December31, 2008. Fair value for the Flat-rolled and Texas Operations reporting units was estimated using future cash flow projections based on managements long range estimates of market conditions over a five-year horizon with a 2.25 percent compound annual growth rate thereafter. We used a discount rate of approximately 11 percent for both reporting units. Our testing did not indicate that goodwill was impaired for either reporting unit as of December31, 2008. In order to determine if an interim goodwill impairment test was necessary in the second quarter of 2009, U. S. Steel evaluated the events and economic factors that occurred since the last goodwill impairment test, including the restart of certain idled facilities due to improvements in the order book for our Flat-rolled rep |
7.Pensions and Other Benefits | 7. Pensions and Other Benefits The following table reflects components of net periodic benefit cost for the three months ended June30, 2009 and 2008: Pension Benefits Other Benefits (In millions) 2009 2008 2009 2008 Service cost $ 26 $ 31 $ 5 $ 5 Interest cost 145 143 62 55 Expected return on plan assets (177 ) (199 ) (26 ) (24 ) Amortization of prior service cost 6 6 5 (8 ) Amortization of net loss (gain) 36 26 (2 ) 6 Net periodic benefit cost, excluding below 36 7 44 34 Multiemployer plans 13 8 - - Settlement, termination and curtailment benefits 9 - 2 - Net periodic benefit cost $ 58 $ 15 $ 46 $ 34 The following table reflects components of net periodic benefit cost for the six months ended June30, 2009 and 2008: Pension Benefits Other Benefits (In millions) 2009 2008 2009 2008 Service cost $ 52 $ 61 $ 10 $ 9 Interest cost 287 286 124 111 Expected return on plan assets (352 ) (399 ) (53 ) (48 ) Amortization of prior service cost 12 12 11 (16 ) Amortization of net loss (gain) 71 52 (4 ) 12 Net periodic benefit cost, excluding below 70 12 88 68 Multiemployer plans 25 16 - - Settlement, termination and curtailment benefits 72 1 13 - Net periodic benefit cost $ 167 $ 29 $ 101 $ 68 Postemployment Benefits U. S. Steel recorded charges of $3 million and $93 million in the three and first six months ended June30, 2009, respectively, related to the recognition of estimated future employee costs for supplemental unemployment benefits, salary continuance and continuation of health care benefits and life insurance coverage for employees associated with the temporary idling of certain facilities and reduced production at others. The charges were recorded in accordance with FAS No.112, Employers Accounting for Postemployment Benefits, which requires that costs associated with such ongoing benefit arrangements be recorded no later than the period when it becomes probable that the costs will be incurred and the costs are reasonably estimable. During the second quarter of 2009, U. S. Steel paid $36 million for these benefits. Settlements, Terminations and Curtailments During the first quarter of 2009, approximately 500 non-represented employees in the UnitedStates elected to retire under a Voluntary Early Retirement Program (VERP). Employee severance and net employee benefit charges of $86 million (including $37 million of pension termination charges, $13 million of pension settlement charges, $3 million of pension curtailment charges and $11 million of other |
8.Depreciation and Depletion | 8. Depreciation and Depletion Effective January1, 2009, U. S. Steel discontinued the use of the modified straight-line basis of depreciation for certain steel-related assets located in the United States based upon raw steel production levels and records depreciation on a straight-line basis for all assets. In the second quarter 2009, the modified straight-line basis of depreciation would have reduced our loss from operations, net loss and net loss per common share by $14 million, $9 million and $0.06, respectively. In the first six months of 2009, the modified straight-line basis of depreciation would have reduced our loss from operations, net loss and net loss per common share by $27 million, $17million and $0.13, respectively. Accumulated depreciation and depletion totaled $8,924 million and $8,669 million at June30, 2009 and December31, 2008, respectively. |
9.Other Income | 9. Other Income Other income for the three and six months ended June30, 2009 includes a refund of $34 million received in the second quarter of 2009 associated with the recovery of black lung excise taxes that were paid on coal export sales during the period October1, 1990 to December31, 1992. Of the $34 million of cash received, $24 million represents interest. |
10.Net Interest and Other Financial Costs | 10. Net Interest and Other Financial Costs Other financial costs primarily include foreign currency gains and losses as a result of transactions denominated in currencies other than the functional currencies of U. S. Steels operations. During the second quarters of 2009 and 2008, net foreign currency gains of $32 million and $17 million, respectively, were recorded in other financial costs. During the six months ended June30, 2009, net foreign currency losses of $2 million were recorded in other financial costs, compared with net foreign currency gains of $93 million in the six months ended June30, 2008. See Note 15 for additional information on U. S. Steels foreign currency exchange activity. |
11.Stock-Based Compensation Plans | 11. Stock-Based Compensation Plans U. S. Steel has outstanding stock-based compensation awards that were granted under several stock-based employee compensation plans, which are more fully described in Note 13 of the United States Steel Corporation 2008 Annual Report on Form 10-K. U. S. Steel recognized pretax stock-based compensation cost in the amount of $16 million and $15 million in the first six months of 2009 and 2008, respectively. Recent grants of stock-based compensation consist of stock options, restricted stock units and performance shares. The Compensation Organization Committee of the Board of Directors (the Compensation Committee) has made grants of stock-based awards under a stockholder approved stock incentive plan (the Plan). The following table is a general summary of the awards made under the Plan. May 2009 Grant May 2008 Grant Grant Details Shares(a) FairValue(b) Shares(a) FairValue(b) Stock Options 1,026,580 $ 14.87 281,200 $ 64.51 Restricted Stock Units 564,210 $ 29.84 111,790 $ 169.01 Performance Shares (c) 116,410 $ 40.16 32,870 $ 214.52 (a) The share amounts shown in this table do not reflect an adjustment for estimated forfeitures. (b) Per share amounts (c) The number of Performance Shares shown represents the target value of the award. As of June30, 2009, total future compensation cost related to nonvested stock-based compensation arrangements was $56 million, and the weighted average period over which this cost is expected to be recognized is approximately 1.4 years. In accordance with FAS 123(R), compensation expense for stock options is recorded over the vesting period based on the fair value on the date of grant, as calculated by U. S. Steel using the Black-Scholes model and the assumptions listed below. The stock options vest ratably over a three-year service period and have a term of ten years. Black-Scholes Assumptions May2009Grant May2008Grant Grant date price per share of option award $ 29.81 $ 169.23 Expected annual dividends per share, at grant date $ 0.20 $ 1.00 Expected life in years 4.5 4.5 Expected volatility 62 % 43 % Risk-free interest rate 2.6 % 3.2 % Grant date fair value per share of unvested option awards as calculated from above $ 14.87 $ 64.51 The expected annual dividends per share are based on the latest annualized dividend rate at the date of grant; the expected life in years is determined primarily from historical stock option exercise data; the expected volatility is based on the historical volatility of U. S. Steel stock; and the risk-free interest rate is based on the U.S. Treasury strip rate for the expected life of the option. Restricted stock units vest ratably over three years. The fair value of the restricted stock units is the market price of the underlying common stock on the date of the grant less a discount factor for the delayed payment of quarterly dividends. Performance shares vest at the end of a three-year perf |
12.Income Taxes | 12. Income Taxes Tax benefits The effective tax benefit rate of 19 percent for the first six months of 2009 is lower than the statutory rate because losses in jurisdictions where we have recorded full valuation allowances do not generate a tax benefit for accounting purposes. Included in the first six months of 2009 tax benefit is $35 million of tax expense related to the net gain on the sale of EJE and $13 million of tax expense related to the federal excise tax refund. Income Tax Receivable The income tax receivable of $129 million at June30, 2009 reflects a portion of the federal income tax refund that we expect to receive in 2010, as a result of carrying back our expected 2009 losses to prior years. Deferred taxes As of June30, 2009, the net domestic deferred tax asset was $852 million compared to $802 million at December31, 2008. A substantial amount of U. S. Steels domestic deferred tax assets relate to employee benefits that will become deductible for tax purposes over an extended period of time as cash contributions are made to employee benefit plans and payments are made to retirees. As a result of our cumulative historical earnings, we continue to believe it is more likely than not that the net domestic deferred tax asset will be realized. As of June30, 2009, the net foreign deferred tax asset was $103 million, net of an established valuation allowance of $430 million. As of December31, 2008, the net foreign deferred tax asset recorded was $32 million, net of an established valuation allowance of $281 million. Net foreign deferred tax assets will fluctuate as the value of the U.S. dollar changes with respect to the euro, the Canadian dollar and the Serbian dinar. A full valuation allowance is provided for the Serbian deferred tax assets because current projected investment tax credits, which must be used before net operating losses and credit carryforwards, are more than sufficient to offset future tax liabilities. A full valuation allowance is recorded for Canadian deferred tax assets due to the absence of positive evidence at USSC to support the realizability of the deferred tax assets. If USSC and USSS generate sufficient income, the valuation allowance of $353 million for Canadian deferred tax assets and $66 million for Serbian deferred tax assets as of June30, 2009, would be partially or fully reversed at such time that it is more likely than not that the company will realize the deferred tax assets. In accordance with FAS 141(R), any reversals of these amounts will result in a decrease to tax expense. Unrecognized tax benefits The total amount of unrecognized tax benefits was $94 million and $99 million as of June30, 2009 and December31, 2008, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $84 million and $83 million as of June30, 2009 and December31, 2008, respectively. Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes pursuant to FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes a |
13.Common Shares and Income Per Common Share | 13. Common Shares and Income Per Common Share Common Stock Issued On May4, 2009, U. S. Steel issued 27,140,000 shares of common stock (par value of $1 per share) at a price of $25.50 per share. The underwriting discount and third-party expenses related to the issuance of the common stock of $31 million was recorded as a decrease to additional paid-in capital, resulting in net proceeds of $661 million. Based on the initial conversion rate, our 2014 Senior Convertible Notes (see Note 16), are convertible into 27,058,781 shares of U.S.Steel common stock. However, we reserved 33,824,000 shares, which is the maximum amount that could be issued upon conversion. Common Stock Repurchase Program In the fourth quarter of 2008, U. S. Steel suspended the previously approved Common Stock Repurchase Program. At June30, 2009, the repurchase of an additional 4,446,400 shares remains authorized. During the second quarter and first six months of 2008, 320,000 shares and 625,000 shares of common stock were repurchased for $52 million and $85 million, respectively. Net (Loss) Income Attributable to United States Steel Corporation Shareholders Basic net income or loss per common share is based on the weighted average number of common shares outstanding during the quarter. Diluted net income per common share assumes the exercise of stock options and the vesting of restricted stock, restricted stock units, performance shares and the conversion of convertible notes (under the if-converted method), provided in each case the effect is dilutive. Due to the net loss position for the second quarter and six months ended June30, 2009, no securities were included in the computation of diluted net loss per common share because the effect would be antidilutive. Securities granted under our 2005 Stock Incentive Plan represented 3,676,862 potentially dilutive shares for the three and six months ended June30, 2009. Securities convertible under our 2014 Senior Convertible Notes represented 27,058,781 potentially dilutive shares for the three and six months ended June30, 2009. Securities granted under our 2005 Stock Incentive Plan representing 346,940 and 459,730 potentially dilutive shares for the three and six months ended June30, 2008, respectively, were not included in the computation of diluted net income per common share because their effect would have been anti-dilutive. The computations for basic and diluted earnings per common share from continuing operations are as follows: ThreeMonthsEnded June30, Six Months Ended June30, (Dollars in millions, except per share amounts) 2009 2008 2009 2008 Net (loss) income attributable to UnitedStatesSteelCorporation shareholders $ (392 ) $ 668 $ (831 ) $ 903 Plus income effect of assumed conversion-interest on convertible notes - - - - Net (Loss) income after assumed conversion $ (392 ) $ 668 $ (831 ) $ 903 Weighted-average shares outstanding (in thousands): Basic 134,634 117,507 125,420 117,55 |
14.Inventories | 14. Inventories Inventories are carried at the lower of cost or market on a worldwide basis. The first-in, first-out method is the predominant method of inventory costing for USSC and USSE. The last-in, first-out (LIFO) method is the predominant method of inventory costing in the United States. At June30, 2009 and December31, 2008, the LIFO method accounted for 48 percent and 39 percent of total inventory values, respectively. (In millions) June30, 2009 December31, 2008 Raw materials $ 978 $ 1,322 Semi-finished products 371 552 Finished products 315 518 Supplies and sundry items 117 100 Total $ 1,781 $ 2,492 Current acquisition costs were estimated to exceed these inventory values by $1.1 billion at June30, 2009 and at December31, 2008. Cost of sales was reduced by $32 million and $16million in the second quarter of 2009 and the second quarter of 2008, respectively, as a result of liquidations of LIFO inventories. Cost of sales was reduced by $70 million and $32 million in the first six months of 2009 and 2008, respectively, as a result of liquidations of LIFO inventories. During the three and six months ended June30, 2009, we recorded lower of cost or market related adjustments (LCM) totaling approximately $100 million and $165 million, respectively. No LCM adjustment was recorded in the three or six months ended June30, 2008. Inventory includes $104 million and $96million of land held for residential or commercial development as of June30, 2009 and December31, 2008, respectively. U. S. Steel has coke swap agreements with other steel manufacturers designed to reduce transportation costs. U. S. Steel did not ship or receive any coke under the swap agreements during the first six months of 2009. U. S. Steel shipped approximately 546,000 tons and received approximately 492,000 tons of coke under the swap agreements during the first six months of 2008. U. S. Steel also has iron ore pellet swap agreements with an iron ore mining and processing company to obtain iron ore pellets that meet U. S. Steels specifications. U. S. Steel shipped and received approximately 101,000 tons of iron ore pellets during the first six months of 2009. U.S.Steel shipped and received approximately 833,000 tons of iron ore pellets during the first six months of 2008. The coke and iron ore pellet swaps are recorded at cost in accordance with APB 29, Accounting for Nonmonetary Transactions and FAS No.153, Exchanges of Nonmonetary Assets. There was no income statement impact related to these swaps in either 2009 or 2008. |
15.Derivative Instruments | 15. Derivative Instruments U. S. Steel is exposed to foreign currency exchange rate risks as a result of our European and Canadian operations. USSEs revenues are primarily in euros and costs are primarily in U.S.dollars, euros and Serbian dinars. Prior to Slovakias entry into the Eurozone as of January1, 2009, the USSE segment also had foreign currency exchange rate risks related to the Slovak koruna. USSCs revenues and costs are denominated in both Canadian and U.S. dollars. In addition, the acquisition of USSC was funded both from the United States and through the reinvestment of undistributed earnings from USSE, creating intercompany monetary assets and liabilities in currencies other than the functional currency of the entities involved, which can impact income when remeasured at the end of each quarter. An $824 million U.S. dollar-denominated intercompany loan (the Intercompany Loan) to a European subsidiary was the primary exposure at June30, 2009. U. S. Steel holds or purchases derivative financial instruments for purposes other than trading to mitigate foreign currency exchange rate risk. U. S. Steel uses euro forward sales contracts with maturities no longer than 18 months to exchange euros for U.S. dollars to manage our exposure to foreign currency rate fluctuations. The gains and losses recognized on these euro forward sales contracts may partially offset gains and losses recognized on the Intercompany Loan. As of June30, 2009, U. S. Steel held euro forward sales contracts with a total notional value of approximately $190 million. We mitigate the risk of concentration of counterparty credit risk by purchasing our forward sales contracts from several counterparties. FAS No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133), requires derivative instruments to be recognized at fair value in the balance sheet. U.S.Steel has not elected to designate these forward contracts as hedges under FAS 133. Therefore, changes in the fair value of the forward contracts are recognized immediately in the results of operations. Additionally, we routinely enter into contracts to hedge a portion of our purchase commitments for natural gas to lower our financial exposure related to commodity price fluctuations. As part of this strategy, we utilize fixed-price forward physical purchase contracts. Historically, these forward physical purchase contracts have qualified for the normal purchases and normal sales exemption under FAS 133. However, due to reduced natural gas consumption, we have net settled some of our excess natural gas purchase contracts. Therefore, some of the remaining contracts no longer meet the exemption criteria and are therefore subject to mark-to-market accounting. As of June30, 2009, U. S. Steel held commodity contracts for natural gas with a total notional value of approximately $66 million that are subject to mark-to-market accounting. As of June30, 2008, all contracts qualified for the normal purchase normal sales exemption under FAS 133 and were not subject to mark-to-market accounting. The following summarizes the location and amounts of the fair values and gains or losses rel |
16.Debt | 16. Debt (In millions) Interest Rates% Maturity June30, 2009 December31, 2008 2037 Senior Notes 6.65 2037 $ 350 $ 350 2018 Senior Notes 7.00 2018 500 500 2017 Senior Notes 6.05 2017 450 450 2014 Senior Convertible Notes 4.00 2014 863 - 2013 Senior Notes 5.65 2013 300 300 Five-year Term Loan Variable 20092012 - 475 Three-year Term Loan Variable 20092010 - 180 Province Note (C$150 million) 1.00 2015 129 122 Environmental Revenue Bonds 4.756.25 20112016 458 458 Fairfield Caster Lease 20092012 29 37 Other capital leases and all other obligations 20092014 33 35 Credit Facility, $734.5 million and $750 million Variable 2012 - - USSK Revolver, 200million Variable 2011 283 282 USSK credit facilities, 60million ($77 and $85 million) Variable 2009 - - USSS credit facility, 50 ($49 and $70 million) Variable 20092010 - - Total 3,395 3,189 Less Province Note fair value adjustment 38 38 Less unamortized discount 6 6 Less short-term debt and long-term debt due within one year 18 81 Long-term debt $ 3,333 $ 3,064 Issuance of Senior Convertible Notes On May4, 2009, U. S. Steel issued $863 million of 4.00% Senior Convertible Notes (the 2014 Senior Convertible Notes) due May15, 2014. U. S. Steel received net proceeds from the offering of $836 million after fees of $27 million related to the underwriting discount and third party expenses. The fees for the issuance of the 2014 Senior Convertible Notes will be amortized to interest expense over the five-year term of the 2014 Senior Convertible Notes. The 2014 Senior Convertible Notes are senior and unsecured obligations that rank equally with U.S. Steels other existing and future senior and unsecured indebtedness. Interest on the 2014 Senior Convertible Notes is payable semi-annually on May15th and November15th of each year, beginning on November15, 2009. If an event of default regarding the 2014 Senior Convertible Notes should occur and be continuing, either the trustee or the holders of not less than 25% in the principal amount of outstanding 2014 Senior Convertible Notes may declare the 2014 Senior Convertible Notes immediately due and payable. The 2014 Senior Convertible Notes were issued under U. S. Steels shelf registration statement and are not listed on any national securities exchange. U. S. Steel may not redeem the 2014 Senior Convertible Notes prior to their maturity date. Holders may convert their 2014 Senior Convertible Notes into shares of U. S. Steel common stock at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date of May15, 2014. The initial conversion rate for the 2014 Senior Convertible Notes is 31.3725 shares of U. S. Steel common stock per $1,000 principal amount of 2014 Senior Co |
17.Asset Retirement Obligations | 17. Asset Retirement Obligations U. S. Steels asset retirement obligations primarily relate to mine and landfill closure and post-closure costs. The following table reflects changes in the carrying values of asset retirement obligations: (In millions) June30, 2009 December31, 2008 Balance at beginning of year $ 48 $ 40 Additional obligations incurred - 4 Obligations settled (3 ) - Revisions in estimated closure costs - (1 ) Foreign currency translation effects 1 2 Accretion expense 1 3 Balance at end of period $ 47 $ 48 Certain asset retirement obligations related to disposal costs of certain fixed assets at our steel facilities have not been recorded because they have an indeterminate settlement date. These asset retirement obligations will be initially recognized in the period in which sufficient information exists to estimate their fair value. |
18.2008 Collective Bargaining Agreements | 18. 2008 Collective Bargaining Agreements U. S. Steel and its U. S. Steel Tubular Products, Inc. subsidiary reached new collective bargaining agreements with the United Steelworkers (USW), which cover approximately 16,900 employees at our flat-rolled, tubular, coke-making and iron ore operations in the United States (the 2008 CBAs). The 2008 CBAs were ratified by the USW membership in September 2008 and expire on September1, 2012. The 2008 CBAs were effective September1, 2008, contain no-strike provisions and resulted in wage increases ranging from $0.65 to $1.00 per hour as of the effective date. Each subsequent September1 thereafter, employees will receive a four percent wage increase. The 2008 CBAs also provide for pension and other benefit enhancements for both current employees and retirees. The 2008 CBAs also require U. S. Steel to make annual $75 million contributions during the contract period to a restricted account within our trust for retiree health care and life insurance. In April 2009, we reached agreement with the USW to defer some of these contributions until 2012 and 2013. See Note 7 for further details. Also, effective January1, 2009, profit sharing includes income from operations from Texas Operations. At the same time the profit sharing formula has been modified such that at certain higher levels of income from operations, profit sharing payments will be capped and any excess amounts will be contributed to our trust to fund retiree health care and life insurance benefits for USW retirees. |
19.Variable Interest Entities | 19. Variable Interest Entities In accordance with Financial Accounting Standards Board Interpretation No.46 (revised December 2003), Consolidation of Variable Interest Entities, an interpretation of ARB No.51 (FIN 46R), U. S. Steel consolidates the following entities: Blackbird Acquisition Inc. Blackbird Acquisition Inc. (Blackbird) is an entity established to facilitate the purchase and sale of certain fixed assets. U.S.Steel has no ownership interest in Blackbird; however, because the entity was established to conduct substantially all of its activities on behalf of U. S. Steel and does not have sufficient equity investment at risk to finance its activities without additional subordinated financial support from U. S. Steel, U. S. Steel is considered to be the primary beneficiary. At June30, 2009 and December31, 2008, there were no assets or liabilities consolidated through Blackbird. Daniel Ross Bridge, LLC Daniel Ross Bridge, LLC (DRB) was established for the development of a 1,600 acre master-planned community in Hoover, Alabama. DRB manages the development and marketing of the property. At June30, 2009, DRB was financed primarily through a secured, non-recourse lot development loan of approximately $1 million. The creditors of DRB have no recourse to the general credit of U. S. Steel. The majority of the expected returns flow to U. S. Steel; therefore, U.S. Steel is the primary beneficiary of DRB. The consolidation of DRB had an insignificant effect on U. S. Steels results from operations for the quarters and six month periods ended June30, 2009 and 2008. The assets of DRB consolidated by U. S. Steel totaled $13 million at June30, 2009 and December31, 2008. The assets are primarily comprised of inventory of $9 million as of June30, 2009 and December31, 2008. Total liabilities of DRB consolidated by U. S. Steel totaled $3 million at June30, 2009 and December31, 2008. The liabilities of DRB consolidated by U. S. Steel are primarily comprised of accounts payable and accrued development costs of $2 million as of June30, 2009 and December31, 2008. Gateway Energy Coke Company, LLC In the first quarter 2008, U. S. Steel entered into a coke supply agreement with Gateway Energy Coke Company, LLC (Gateway), a wholly owned subsidiary of SunCoke Energy, Inc. Gateway has agreed to construct a heat recovery coke plant with an expected annual capacity of 651,000 tons of coke at U. S. Steels Granite City Works that is expected to begin operations in the fourth quarter of 2009. U. S. Steel has no ownership interest in Gateway; however, because U. S. Steel is the primary beneficiary of Gateway, U. S. Steel consolidates Gateway in its financial results. The primary beneficiary designation was determined because U. S. Steel has a 15-year arrangement to purchase coke, which is a significant factor in the agreement. Under this arrangement, Gateway is obligated to supply 90 percent to 105 percent of the expected annual capacity of the heat recovery coke plant, and U. S. Steel is obligated to purchase the coke from Gateway at the contract price. After January1, 2010, a maximum default payment of approximately $285 million wou |
20.Sale of Accounts Receivable | 20. Sale of Accounts Receivable U. S. Steel has a Receivables Purchase Agreement under which trade accounts receivable are sold, on a daily basis without recourse, to U. S. Steel Receivables, LLC (USSR), a wholly owned, bankruptcy-remote, special purpose entity used only for the securitization program. USSR can then sell senior undivided interests in up to $500 million of the receivables to certain third-party commercial paper conduits for cash, while maintaining a subordinated undivided interest in a portion of the receivables. U. S. Steel has agreed to continue servicing the sold receivables at market rates. Because U. S. Steel receives adequate compensation for these services, no servicing asset or liability is recorded. In June 2009, U. S. Steel entered into agreements which amended the Receivables Purchase Agreement. The amendments revised pricing, increased reserve factors and percentages, provide for a termination event if there is a change of control of U. S. Steel, amended the definition of Eligible Receivables, changed certain performance triggers and made conforming and clarifying changes. The amended Receivables Purchase Agreement expires on September24, 2010. Sales of accounts receivable are reflected as a reduction of receivables in the balance sheet and the proceeds and repurchases related to the securitization program are included in cash flows from operating activities in the statement of cash flows. Generally, the facility provides that as payments are collected from the sold accounts receivables, USSR may elect to have the conduits reinvest the proceeds in new eligible accounts receivable. At June30, 2009 and December31, 2008, $295 million and $500 million, respectively, of eligible accounts receivable could have been sold under this facility. The net book value of U. S. Steels retained interest in the receivables represents the best estimate of the fair market value due to the short-term nature of the receivables. The retained interest in the receivables is recorded net of the allowance for bad debts, which has historically not been significant. USSR pays the conduits a discount based on the conduits borrowing costs plus incremental fees. We incurred insignificant costs for the three and six months ended June30, 2009 and $1 million for the three and six months ended June30, 2008 relating to fees on the Receivables Purchase Agreement. These costs are included in other financial costs in the statement of operations. The table below summarizes cash flows related to the program: SixMonthsEnded June30, (In millions) 2009 2008 Proceeds from: Collections reinvested $ - $ 6,200 The table below summarizes the trade receivables for USSR: (In millions) June30, 2009 December31, 2008 Balance of accounts receivable net, purchased by USSR $ 568 $ 1,030 Revolving interest sold to conduits - - Accounts receivable net, included in the accounts receivable balance on the balance sheet of U. S. Steel $ 568 $ 1,030 The facility may be terminated on the occurrence and failure to cure certain event |
21.Fair Value of Financial Instruments | 21. Fair Value of Financial Instruments Fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. The following table summarizes financial instruments, excluding derivative financial instruments disclosed in Note15, by individual balance sheet account. U.S.Steels financial instruments at June30,2009 and December31, 2008 were: June30, 2009 December31,2008 (In millions) Fair Value Carrying Amount Fair Value Carrying Amount Financial assets: Cash and cash equivalents $ 1,950 $ 1,950 $ 724 $ 724 Receivables 1,144 1,144 2,106 2,106 Receivables from related parties 113 113 182 182 Income Tax Receivable 129 129 - - Investments and long-term receivables (a) 15 15 23 23 Total financial assets $ 3,351 $ 3,351 $ 3,035 $ 3,035 Financial liabilities: Accounts payable $ 986 $ 986 $ 1,440 $ 1,440 Accounts payable to related parties 87 87 43 43 Accrued interest 35 35 33 33 Debt (b) 3,287 3,291 2,650 3,075 Total financial liabilities $ 4,395 $ 4,399 $ 4,166 $ 4,591 (a) Excludes equity method investments. (b) Excludes capital lease obligations. The fair value of financial instruments classified as current assets or liabilities approximates the carrying value due to the short-term maturity of the instruments. The fair value of investments and long-term receivables was based on discounted cash flows. U.S.Steel is subject to market risk and liquidity risk related to its investments; however, these risks are not readily quantifiable. The fair value of long-term debt instruments was based on the yield on public debt where available or current borrowing rates available for financings with similar terms and maturities. Financial guarantees are U.S.Steels only unrecognized financial instrument. For details relating to financial guarantees see Note25. |
22.Comprehensive Income (Loss) | 22. Comprehensive Income (Loss) The following table reflects the components of comprehensive income: ThreeMonthsEnded June30, SixMonthsEnded June30, (In millions) 2009 2008 2009 2008 Net (loss) income $ (392 ) $ 674 $ (831 ) $ 914 Changes in foreign currency translation adjustments, net of tax 202 17 132 51 Changes in employee benefit accounts, net of tax 22 13 40 40 Comprehensive (loss) income $ (168 ) $ 704 $ (659 ) $ 1,005 |
23.Statement of Changes in Stockholders' Equity | 23. Statement of Changes in Stockholders Equity The following table reflects the reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to United States Steel Corporation and equity attributable to the noncontrolling interests: Six Months Ended June30, 2009 Total Comprehensive Income Retained Earnings AccumulatedOther Comprehensive Income Common Stock Treasury Stock Paid-in Capital Non- Controlling Interest Balance at beginning of year $ 5,059 $ 5,666 $ (3,269 ) $ 124 $ (612 ) $ 2,986 $ 164 Comprehensive income: Net Loss (831 ) (831 ) (831 ) Other comprehensive income (loss), net of tax: Pension and Other Benefit Adjustments 40 40 40 Currency Translation Adjustment 132 132 131 1 Common Stock Issued 666 27 639 Employee stock plans 14 2 12 Dividends paid on common stock (42 ) (42 ) Partner Contributions 90 90 Other 1 1 Balance at June30, 2009 $ 5,129 $ (659 ) $ 4,793 $ (3,098 ) $ 151 $ (610 ) $ 3,637 $ 256 Six Months Ended June30, 2008 Total Comprehensive Income Retained Earnings Accumulated Other Comprehensive Income Common Stock Treasury Stock Paid-in Capital Non- Controlling Interest Balance at beginning of year $ 5,619 $ 3,683 $ (836 ) $ 124 $ (395 ) $ 2,955 $ 88 Comprehensive income: Net Income 914 914 903 11 Other comprehensive income (loss), net of tax: Pension and Other Benefit Adjustments 40 40 40 Currency Translation Adjustment 51 51 51 Employee stock plans 27 10 17 Common stock issued/repurchased (85 ) (85 ) Dividends paid on common stock (59 ) (59 ) Partner Contributions 25 25 Other 2 1 1 Balance at June30, 2008 $ 6,534 $ 1,005 $ 4,527 $ (744 ) $ 124 $ (470 ) $ 2,972 $ 125 |
24.Related Party Transactions | 24. Related Party Transactions Net sales to related parties and receivables from related parties primarily reflect sales of steel products, transportation services and fees for providing various management and other support services to equity and other related parties. Generally, transactions are conducted under long-term market-based contractual arrangements. Related party sales and service transactions were $136million and $330million for the quarters ended June30, 2009 and 2008, respectively and $281 million and $623 million for the six months ended June30, 2009 and 2008, respectively. Sales to related parties were conducted under terms comparable to those with unrelated parties. Purchases from equity investees for outside processing services amounted to $17 million and $66million for the quarters ended June30, 2009 and 2008, respectively and $71 million $85million for the six months ended June30, 2009 and 2008, respectively. Purchases of taconite pellets from equity investees amounted to $41 million and $53 million for the quarters ended June30, 2009 and 2008, respectively and $52 million and $68 million for the six months ended June30, 2009 and 2008. Accounts payable to related parties include balances due to PRO-TEC Coating Company (PRO-TEC) of $44 million and $42 million at June30, 2009 and December31, 2008, respectively, for invoicing and receivables collection services provided by U. S. Steel. U. S. Steel, as PRO-TECs 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 equity investees totaled $43 million and $1 million at June30, 2009 and December31, 2008, respectively. |
25.Contingencies and Commitments | 25. Contingencies and Commitments U.S.Steel is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Certain of these matters are discussed below. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the consolidated financial statements. However, management believes that U.S.Steel will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably. U.S.Steel accrues for estimated costs related to existing lawsuits, claims and proceedings when it is probable that it will incur these costs in the future. Asbestos matters As of June30, 2009, U.S. Steel was a defendant in approximately 415 active cases involving approximately 3,015 plaintiffs. Many of these cases involve multiple defendants (typically from fifty to more than one hundred). Approximately 2,600, or about 86percent, of these claims are currently pending in jurisdictions which permit filings with massive numbers of plaintiffs. Based upon U.S.Steels 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. During the six months ended June30, 2009, U. S. Steel paid approximately $6 million in settlements. These settlements and other dispositions resolved approximately 145 claims. New case filings in the first six months of 2009 added approximately 110 claims. At December31, 2008, U. S. Steel was a defendant in approximately 450 active cases involving approximately 3,050 plaintiffs. During 2008, U. S. Steel paid approximately $13 million in settlements. These settlements and other dispositions resolved approximately 400 claims. New case filings in the year ended December31, 2008 added approximately 450 claims. Most claims filed in 2008 and 2009 involved individual or small groups of claimants as many jurisdictions no longer permit the filing of mass complaints. Historically, these claims against U.S.Steel fall into three major groups: (1)claims made by persons who allegedly were exposed to asbestos at U.S.Steel facilities (referred to as premises claims); (2)claims made by industrial workers allegedly exposed to products manufactured by U.S.Steel; and (3)claims made under certain federal and general maritime laws by employees of former operations of U. S. Steel. In general, the only insurance available to U. S. Steel with respect to asbestos claims is excess casualty insurance, which has multi-million dollar retentions. To date, U.S.Steel has received minimal payments under these policies relating to asbestos claims. These asbestos cases allege a variety of respiratory and other diseases based on alleged exposure to asbestos. U.S.Steel is currently a defendant in cases in which a total of approximately 185 plaintiffs allege that they are suffering from mesothelioma. The potential for damages against defendants may be greater in cases in which the plaintiffs can prove mesothelioma. |
Document Information
Document Information | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Amendment Description | N.A. |
Document Period End Date | 2009-06-30 |
Entity Information
Entity Information (USD $) | |||
6 Months Ended
Jun. 30, 2009 | Jul. 24, 2009
| Jun. 30, 2008
| |
Entity [Text Block] | |||
Trading Symbol | X | ||
Entity Registrant Name | UNITED STATES STEEL CORP | ||
Entity Central Index Key | 0001163302 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 143,325,348 | ||
Entity Public Float | $21,600,000,000 |