x-20220331

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 March 31, 2022


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-16811

United States Steel Corporation

(Exact name of registrant as specified in its charter)

Delaware

25-1897152

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)

600 Grant Street,

Pittsburgh,

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 class	Trading Symbol	Name of each exchange on which registered
United States Steel Corporation Common Stock	X	New York Stock Exchange
United States Steel Corporation Common Stock	X	Chicago 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 pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

Common stock outstanding at April 25, 2022 – 260,634,961 shares

INDEX


			Page
PART I – FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Condensed Consolidated Statement of Operations (Unaudited)	1
		Condensed Consolidated Statement of Comprehensive Income (Loss) (Unaudited)	2
		Condensed Consolidated Balance Sheet (Unaudited)	3
		Condensed Consolidated Statement of Cash Flows (Unaudited)	4
		Notes to Condensed Consolidated Financial Statements (Unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
	Item 4.	Controls and Procedures	33
PART II – OTHER INFORMATION
	Item 1.	Legal Proceedings	33
	Item 1A.	Risk Factors	38
	Item 2	Purchases of Equity Securities by Issuer and Affiliated Purchasers	39
	Item 3	Defaults upon Senior Securities	39
	Item 4.	Mine Safety Disclosure	39
	Item 5.	Other Information	39
	Item 6.	Exhibits	40
SIGNATURE			41
WEB SITE POSTING			41

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” "may" and similar expressions or by using future dates in connection with any discussion of, among other things, the construction or operation of new or existing facilities, 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, anticipated disruptions to our 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, statements regarding our future strategies, products and innovations, statements regarding our greenhouse gas emissions intensity reduction goals 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, 2021 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, (ii) “Big River Steel” refer to Big River Steel Holdings LLC and its direct and indirect subsidiaries unless otherwise indicated by the context and (iii).”Transtar” refers to Transtar LLC and its direct and indirect subsidiaries unless otherwise indicated by the context.

UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,
(Dollars in millions, except per share amounts)	2022		2021
Net sales:
Net sales	$	4,843	$	3,369
Net sales to related parties (Note 19)	391		295
Total (Note 6)	5,234		3,664
Operating expenses (income):
Cost of sales	3,823		3,074
Selling, general and administrative expenses	117		102
Depreciation, depletion and amortization	198		189
Earnings from investees	(36)		(14)


Gain on equity investee transactions (Note 5)	—		(111)
Restructuring and other charges (Note 20)	17		6
Net gain on sale of assets	(2)		—
Other gains, net	(1)		(7)
Total	4,116		3,239
Earnings before interest and income taxes	1,118		425
Interest expense	50		92
Interest income	(1)		(1)
Loss on debt extinguishment	—		255
Other financial costs	2		18
Net periodic benefit income	(61)		(31)
Net interest and other financial (benefits) costs	(10)		333
Earnings before income taxes	1,128		92
Income tax expense (Note 12)	246		1
Net earnings	882		91
Less: Net earnings attributable to noncontrolling interests	—		—
Net earnings attributable to United States Steel Corporation	$	882	$	91
Earnings per common share (Note 13):
Earnings per share attributable to United States Steel Corporation stockholders:
'-Basic	$	3.37	$	0.36
'-Diluted	$	3.02	$	0.35

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(Dollars in millions)	2022		2021
Net earnings	$	882	$	91
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments	(28)		(47)
Changes in pension and other employee benefit accounts	(3)		24
Changes in derivative financial instruments	22		(20)
Total other comprehensive loss, net of tax	(9)		(43)
Comprehensive income including noncontrolling interest	873		48
Comprehensive income attributable to noncontrolling interest	—		—
Comprehensive income attributable to United States Steel Corporation	$	873	$	48

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)


(Dollars in millions)	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents (Note 7)	$	2,866	$	2,522
Receivables, less allowance of $40 and $44	2,267		1,968
Receivables from related parties (Note 19)	148		121
Inventories (Note 8)	2,663		2,210
Other current assets	436		331
Total current assets	8,380		7,152
Long-term restricted cash (Note 7)	58		76
Operating lease assets	174		185
Property, plant and equipment	19,965		19,676
Less accumulated depreciation and depletion	12,549		12,422
Total property, plant and equipment, net	7,416		7,254
Investments and long-term receivables, less allowance of $4 in both periods	727		694
Intangibles, net (Note 9)	509		519
Deferred income tax benefits (Note 12)	24		32
Goodwill (Note 9)	920		920
Other noncurrent assets	1,016		984
Total assets	$	19,224	$	17,816
Liabilities
Current liabilities:
Accounts payable and other accrued liabilities	$	3,172	$	2,809
Accounts payable to related parties (Note 19)	171		99
Payroll and benefits payable	407		425
Accrued taxes	492		365
Accrued interest	47		68
Current operating lease liabilities	56		58
Short-term debt and current maturities of long-term debt (Note 15)	60		28
Total current liabilities	4,405		3,852
Noncurrent operating lease liabilities	127		136
Long-term debt, less unamortized discount and debt issuance costs (Note 15)	3,917		3,863
Employee benefits	195		235
Deferred income tax liabilities (Note 12)	216		122
Deferred credits and other noncurrent liabilities	573		505
Total liabilities	9,433		8,713
Contingencies and commitments (Note 21)
Stockholders’ Equity (Note 17):
Common stock (282,244,228 and 279,522,227 shares issued) (Note 13)	282		280
Treasury stock, at cost (21,552,955 shares and 15,708,839 shares)	(477)		(334)
Additional paid-in capital	5,146		5,199
Retained earnings	4,425		3,534
Accumulated other comprehensive income (Note 18)	322		331
Total United States Steel Corporation stockholders’ equity	9,698		9,010
Noncontrolling interests	93		93
Total liabilities and stockholders’ equity	$	19,224	$	17,816

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(Dollars in millions)	2022		2021
Increase (decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net earnings	$	882	$	91
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, depletion and amortization	198		189


Gain on equity investee transactions	—		(111)
Restructuring and other charges (Note 20)	17		6
Loss on debt extinguishment	—		255
Pensions and other postretirement benefits	(60)		(25)
Deferred income taxes (Note 12)	121		3
Net gain on sale of assets	(2)		—
Equity investee earnings, net of distributions received	(36)		(14)
Changes in:
Current receivables	(355)		(477)
Inventories	(467)		(183)
Current accounts payable and accrued expenses	360		386
Income taxes receivable/payable	140		3
All other, net	(27)		(12)
Net cash provided by operating activities	771		111
Investing activities:
Capital expenditures	(349)		(136)
Acquisition of Big River Steel, net of cash acquired (Note 5)	—		(625)

Proceeds from sale of assets	4		—
Other investing activities	(7)		(1)
Net cash used in investing activities	(352)		(762)
Financing activities:
Repayment of short-term debt (Note 15)	—		(180)
Revolving credit facilities - borrowings, net of financing costs (Note 15)	—		50
Revolving credit facilities - repayments (Note 15)	—		(671)
Issuance of long-term debt, net of financing costs (Note 15)	4		826
Repayment of long-term debt (Note 15)	(6)		(1,379)
Net proceeds from public offering of common stock (Note 22)	—		791
Common stock repurchased (Note 22)	(123)		—
Proceeds from government incentives (Note 21)	82		—
Other financing activities	(28)		(10)
Net cash used in financing activities	(71)		(573)
Effect of exchange rate changes on cash	(7)		(12)
Net increase (decrease) in cash, cash equivalents and restricted cash	341		(1,236)
Cash, cash equivalents and restricted cash at beginning of year (Note 7)	2,600		2,118
Cash, cash equivalents and restricted cash at end of period (Note 7)	$	2,941	$	882


Non-cash investing and financing activities:
Change in accrued capital expenditures	$	22	$	5
U. S. Steel common stock issued for employee/non-employee director stock plans	45		18
Capital expenditures funded by finance lease borrowings	7		1
Export Credit Agreement (ECA) financing	—		23

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 such as 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, 2021, which should be read in conjunction with these condensed financial statements.

2. New Accounting Standards

In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. ASU 2021-08 is effective to public companies for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption of all amendments in the same period permitted. The Company is currently assessing the impact of ASU 2021-08 but does not believe it will have a material impact on its Condensed Consolidated Financial Statements.

3. Recently Adopted Accounting Standards

In August 2020, the FASB issued Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 also requires entities to provide expanded disclosures about the terms and features of convertible instruments and amends certain guidance in ASC 260 on the computation of earnings per share (EPS) for convertible instruments and contracts on an entity’s own equity. The update requires entities to use the If-Converted Method for calculating diluted earnings per share, retiring the previous alternative calculation of the Treasury Stock Method for calculating diluted earnings per share for convertible instruments.

U. S. Steel has adopted this guidance using the modified retrospective implementation method as of January 1, 2022. The cumulative effect of the changes made to our consolidated January 1, 2022, balance sheet for the adoption of ASU 2020-06 was as follows:


(in millions)	Balance as of December 31, 2021	Adjustments due to ASU 2020-06	Balance as of January 1, 2022
Condensed Consolidated Balance Sheet
Assets
Deferred income tax benefits	32	4	36

Liabilities
Long-term debt, less unamortized discount and debt issuance costs	3,863	74	3,937
Deferred income tax liabilities	122	(15)	107

Equity
Additional paid-in capital	5,199	(78)	5,121
Retained Earnings	3,534	22	3,556

In November 2021, the FASB issued Accounting Standards Update 2021-10, Disclosures by Business Entities about Government Assistance (ASU 2021-10). ASU 2021-10 provides expanded annual disclosure requirements for business entities that account for a transaction with a government by applying a grant or contribution accounting model by

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analogy. U. S. Steel adopted this guidance effective January 1, 2022. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

4. Segment Information

U. S. Steel has four reportable segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE); and Tubular Products (Tubular). The Mini Mill segment reflects the acquisition of Big River Steel after the purchase of the remaining equity interest on January 15, 2021 (see Note 5 for further details) and a new mini mill under construction in Osceola, Arkansas. The Tubular Products segment includes the electric arc furnace at our Fairfield Tubular Operations in Fairfield, Alabama. The results of our real estate businesses and of our former railroad business are combined and disclosed in the Other category.

The results of segment operations for the three months ended March 31, 2022 and 2021 are:


(In millions) Three Months Ended March 31, 2022	Customer Sales		Intersegment Sales		Net Sales		Earnings from investees		Earnings (loss) before interest and income taxes
Flat-Rolled	$	2,954	$	52	$	3,006	$	30	$	513
Mini Mill	718		130		848		—		278
USSE	1,251		4		1,255		—		264
Tubular	309		3		312		6		77
Total reportable segments	5,232		189		5,421		36		1,132
Other	2		—		2		—		7
Reconciling Items and Eliminations	—		(189)		(189)		—		(21)
Total	$	5,234	$	—	$	5,234	$	36	$	1,118

Three Months Ended March 31, 2021
Flat-Rolled	$	2,272	$	43	$	2,315	$	5	$	146
Mini Mill	450		62		512		—		132
USSE	798		1		799		—		105
Tubular	134		4		138		3		(29)
Total reportable segments	3,654		110		3,764		8		354
Other	10		29		39		6		8
Reconciling Items and Eliminations	—		(139)		(139)		—		63
Total	$	3,664	$	—	$	3,664	$	14	$	425

A summary of total assets by segment is as follows:


(In millions)	March 31, 2022		December 31, 2021
Flat-Rolled	$	7,924	$	7,337
Mini Mill(a)	4,850		4,715
USSE	6,400		6,111
Tubular	1,072		1,054
Total reportable segments	$	20,246	$	19,217
Other	$	123	$	88
Corporate, reconciling items, and eliminations(b)	(1,145)		(1,489)
Total assets	$	19,224	$	17,816

(a)Includes assets of $587 million and $347 million at March 31, 2022 and December 31, 2021, respectively, related to a new mini mill under construction in Osceola, Arkansas.

(b)The majority of corporate, reconciling items, and eliminations is comprised of cash and the elimination of intersegment amounts.

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The following is a schedule of reconciling items to consolidated earnings before interest and income taxes:


	Three Months Ended March 31,
(In millions)	2022		2021
Items not allocated to segments:
Restructuring and other charges (Note 20)	$	(17)	$	(6)
Other charges, net	(4)		(42)
Gains on assets sold and previously held investments	—		111
Total reconciling items	$	(21)	$	63

5. Acquisitions and Dispositions

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 recorded in 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 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 $916 million were also recorded, respectively. Goodwill represents the excess of purchase price over the fair market value of the net assets. Goodwill is primarily attributable to Big River Steel's operational abilities, workforce and the anticipated benefits from their recent expansion and 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 allocation of the aggregate purchase price based on estimated fair values:


	(in millions)
Assets Acquired:
Receivables	$	166
Receivables with U. S. Steel (1)	99
Inventories	184
Other current assets	16
Property, plant and equipment	2,188
Intangibles	413
Goodwill	916
Other noncurrent assets	19
Total Assets Acquired	$	4,001

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Liabilities Assumed:
Accounts payable and accrued liabilities	$	224
Payroll and benefits payable	27
Accrued taxes	9
Accrued interest	33
Short-term debt and current maturities of long-term debt	29
Long-term debt	1,997
Deferred income tax liabilities	26
Deferred credits and other long-term liabilities	211
Total Liabilities Assumed	$	2,556

Fair value of previously held investment in Big River Steel	$	770
Purchase price, including assumed liabilities and net of cash acquired	675
Difference in assets acquired and liabilities assumed	$	1,445

(1) The transaction to purchase Big River Steel included receivables for payments made by Big River Steel on behalf of U. S. Steel for retention bonuses of $22 million that impacted the previously held equity investment and for U. S. Steel liabilities assumed in the purchase of approximately $50 million. In addition, there were assumed receivables of approximately $27 million for steel substrate sales from Big River Steel to U. S. Steel. The receivables with U. S. Steel eliminate in consolidation with offsetting intercompany payables from U. S. Steel.

The following unaudited pro forma information for U. S. Steel includes the results of the Big River Steel acquisition as if it had been consummated on January 1, 2020. The unaudited pro forma information is based on historical information and is adjusted for amortization of the intangible asset, property, plant and equipment and debt fair value step-ups discussed above. Non-recurring acquisition related items included in the 2020 period include $111 million for the gain on previously held equity investment, $9 million in acquisition related costs and $24 million in inventory step-up amortization related to the purchase of the remaining interest in Big River Steel. In addition, costs for non-recurring retention bonuses of $44 million that occurred in January 2021 prior to the purchase of the remaining equity interest are included in the 2020 period. The pro forma information does not include any anticipated cost savings or other effects of the integration of Big River Steel. Accordingly, the unaudited pro forma information does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations. Pro forma adjustments were not tax-effected in 2020 as U. S. Steel had a full valuation allowance on its domestic deferred tax assets.


	Three Months Ended March 31,
(in millions)	2021		2020
Net sales	$	3,736	$	2,994
Net earnings (loss)	$	18	$	(367)

Transtar Disposition

On July 28, 2021, U. S. Steel completed the sale of 100 percent of its equity interests in its wholly-owned short-line railroad, Transtar, LLC (Transtar) to an affiliate of Fortress Transportation and Infrastructure Investors, LLC. The Company received net cash proceeds of $627 million, subject to certain customary adjustments as set forth in the Membership Interest Purchase Agreement, and recognized a pretax gain of approximately $506 million in 2021. In connection with the closing of the transaction, the Company entered into certain ancillary agreements including a railway services agreement, providing for continued rail services for its Gary 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 through the date of disposition are reported in the Other category. See Note 4 for further details.

Other Transactions

In December 2021, the Company entered into an agreement to sell certain assets related to a component of its flat-roll business. As a result of this commitment, the Company has recognized a total of $106 million in restructuring-related charges during the fourth quarter 2021 and first quarter 2022. These charges are expected to be paid out on a long-term basis. This transaction is expected to result in a gain upon closure, which is subject to customary closing conditions.

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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 real estate sales. Generally, U. S. Steel’s performance obligations are satisfied and revenue is recognized 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 the reportable business segments for the three months ended March 31, 2022 and 2021, respectively:

Net Sales by Product (In millions):


Three Months Ended March 31, 2022	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	49	$	—	$	1	$	—	$	—	$	50
Hot-rolled sheets	514		399		593		—		—		1,506
Cold-rolled sheets	971		92		139		—		—		1,202
Coated sheets	1,196		224		483		—		—		1,903
Tubular products	—		—		15		306		—		321
All Other (a)	224		3		20		3		2		252
Total	$	2,954	$	718	$	1,251	$	309	$	2	$	5,234
(a) Consists primarily of sales of raw materials and coke making by-products.


Three Months Ended March 31, 2021	Flat-Rolled		Mini Mill (b)		USSE		Tubular		Other		Total
Semi-finished	$	12	$	—	$	3	$	—	$	—	$	15
Hot-rolled sheets	450		249		386		—		—		1,085
Cold-rolled sheets	784		79		83		—		—		946
Coated sheets	878		121		298		—		—		1,297
Tubular products	—		—		10		128		—		138
All Other (a)	148		1		18		6		10		183
Total	$	2,272	$	450	$	798	$	134	$	10	$	3,664
(a) Consists primarily of sales of raw materials and coke making by-products.
(b) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

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 Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statement of Cash Flows:


(In millions)	March 31, 2022		December 31, 2021		March 31, 2021
Cash and cash equivalents	$	2,866	$	2,522	$	753
Restricted cash in other current assets	17		2		7
Restricted cash in other noncurrent assets	58		76		122

Total cash, cash equivalents and restricted cash	$	2,941	$	2,600	$	882

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

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8. Inventories

The LIFO method is the predominant method of inventory costing for our Flat-Rolled and Tubular segments. The FIFO and moving average methods are the predominant inventory costing methods for our Mini Mill segment and the FIFO method is the predominant inventory costing method for our USSE segment. At March 31, 2022 and December 31, 2021, the LIFO method accounted for 41 percent and 46 percent of total inventory values, respectively.


(In millions)	March 31, 2022		December 31, 2021
Raw materials	$	1,098	$	713
Semi-finished products	1,112		1,056
Finished products	407		388
Supplies and sundry items	46		53
Total	$	2,663	$	2,210

Current acquisition costs were estimated to exceed the above inventory values by $1.62 billion and $896 million at March 31, 2022 and December 31, 2021, respectively. As a result of the liquidation of LIFO inventories, cost of sales decreased and earnings before interest and income taxes increased by $8 million and $1 million for the three months ended March 31, 2022 and 2021, 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 March 31, 2022						As of December 31, 2021
(In millions)	Useful Lives	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Customer relationships	22 Years	$	413	$	22	$	391	$	413	$	18	$	395
Patents	5-15 Years	17		11		6		17		11		6
Energy Contract	2 Years	54		17		37		54		11		43
Total amortizable intangible assets		$	484	$	50	$	434	$	484	$	40	$	444

Total estimated amortization expense for the remainder of 2022 is $31 million. We expect approximately $120 million in annual amortization expense through 2027 and approximately $282 million in remaining amortization expense thereafter.

The carrying amount of acquired water rights with indefinite lives as of March 31, 2022 and December 31, 2021 totaled $75 million.

Below is a summary of goodwill by segment for the three months ended March 31, 2022:


	Flat-Rolled		Mini Mill		USSE		Tubular		Total
Balance at December 31, 2021	$	—	$	916	$	4	$	—	$	920
Additions	—		—		—		—		—
Balance at March 31, 2022	$	—	$	916	$	4	$	—	$	920

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10. Pensions and Other Benefits

The following table reflects the components of net periodic benefit (income) cost for the three months ended March 31, 2022 and 2021:


	Pension Benefits				Other Benefits
(In millions)	2022		2021		2022		2021
Service cost	$	11	$	14	$	2	$	3
Interest cost	39		40		12		12
Expected return on plan assets	(89)		(89)		(22)		(20)
Amortization of prior service credit	—		—		(7)		(7)
Amortization of actuarial net loss (gain)	18		38		(13)		(6)
Net periodic benefit cost (income), excluding below	(21)		3		(28)		(18)
Multiemployer plans	19		19		—		—
Settlement, termination and curtailment losses (a)	1		—		—		—
Net periodic benefit cost (income)	$	(1)	$	22	$	(28)	$	(18)
(a) During the three months ended March 31, 2022, pension benefits incurred special termination charges of approximately $1 million due to workforce restructuring.

Employer Contributions

During the first three months of 2022, U. S. Steel made cash payments of $18 million to the Steelworkers Pension Trust and $1 million of pension payments not funded by trusts.

During the first three months of 2022, cash payments of $12 million were made for other postretirement benefit payments not funded by trusts.

Company contributions to defined contribution plans totaled $11 million and $10 million for the three months ended March 31, 2022 and 2021, respectively.

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, or its designee, under the 2005 Stock Incentive Plan (2005 Plan) and the 2016 Omnibus Incentive Compensation Plan, as amended and restated (Omnibus Plan). The Company's stockholders approved the Omnibus Plan and authorized the Company to issue up to 32,700,000 shares of U. S. Steel common stock under the Omnibus Plan. 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 March 31, 2022, there were 9,339,845 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 three months of 2022 and 2021.