x-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the Quarterly Period Ended June 30, 2024


			☐			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 July 29, 2024 – 224,961,894 shares

INDEX


			Page
PART I – FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Condensed Consolidated Statement of Operations (Unaudited)	1
		Condensed Consolidated Statement of Comprehensive Income (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	28
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
	Item 4.	Controls and Procedures	40
PART II – OTHER INFORMATION
	Item 1.	Legal Proceedings	42
	Item 1A.	Risk Factors	45
	Item 2	Purchases of Equity Securities by Issuer and Affiliated Purchasers	45
	Item 3	Defaults upon Senior Securities	45
	Item 4.	Mine Safety Disclosure	45
	Item 5.	Other Information	45
	Item 6.	Exhibits	46
SIGNATURE			47
WEB SITE POSTING			47

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains information regarding the Company and NSC that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. 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, statements expressing general views about future operating or financial results, operating or financial performance, trends, events or developments that we expect or anticipate will occur in the future, anticipated cost savings, potential capital and operational cash improvements and changes in the global economic environment, the construction or operation of new or existing facilities or capabilities, statements regarding our greenhouse gas emissions reduction goals, as well as statements regarding the proposed transaction, including the timing of the completion of the transaction. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of the Company’s or NSC’s control. It is possible that the Company’s or NSC’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management of the Company 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. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company or NSC to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally; and the risk the pending proposed transaction could distract management of the Company. The Company directs readers to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and Form 10-K for the year ended December 31, 2023, and the other documents it files with the SEC for other risks associated with the Company’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. All information in this report is as of the date above. The Company does not undertake any duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations whether as a result of new information, future events or otherwise, except as required by law.

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

UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share amounts)	2024		2023		2024		2023
Net sales:
Net sales	$	3,473	$	4,520	$	6,973	$	8,432
Net sales to related parties (Note 19)	645		488		1,305		1,046
Total (Note 6)	4,118		5,008		8,278		9,478
Operating expenses (income):
Cost of sales (excludes items shown below)	3,629		4,161		7,294		8,114
Selling, general and administrative expenses	105		103		224		202
Depreciation, depletion and amortization	217		224		427		445
Earnings from investees	(45)		(38)		(59)		(25)
Asset impairment charges	12		—		19		4

Restructuring and other charges (Note 20)	—		2		6		3

Other losses (gains), net	19		(8)		32		(18)
Total	3,937		4,444		7,943		8,725
Earnings before interest and income taxes	181		564		335		753
Interest expense	2		20		4		47
Interest income	(25)		(34)		(57)		(64)
Loss on debt extinguishment	1		—		2		—
Other financial costs	5		6		16		12
Net periodic benefit income	(33)		(41)		(66)		(83)
Net gain from investments related to active employee benefits (Note 16)	(8)		(8)		(12)		(30)
Net interest and other financial benefits	(58)		(57)		(113)		(118)
Earnings before income taxes	239		621		448		871
Income tax expense (Note 12)	56		144		94		195
Net earnings	183		477		354		676
Less: Net earnings attributable to noncontrolling interests	—		—		—		—
Net earnings attributable to United States Steel Corporation	$	183	$	477	$	354	$	676
Earnings per common share (Note 13):
Earnings per share attributable to United States Steel Corporation stockholders:
'-Basic	$	0.82	$	2.12	$	1.58	$	2.99
'-Diluted	$	0.72	$	1.89	$	1.40	$	2.67

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

-1-

UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2024		2023		2024		2023
Net earnings	$	183	$	477	$	354	$	676
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments	(18)		(1)		(54)		31
Changes in pension and other employee benefit accounts	(5)		(12)		(12)		(22)
Changes in derivative financial instruments	32		33		75		(11)
Changes in fair value of active employee benefit investments	—		(1)		—		2
Total other comprehensive income, net of tax	9		19		9		—
Comprehensive income including noncontrolling interest	192		496		363		676
Comprehensive income attributable to noncontrolling interest	—		—		—		—
Comprehensive income attributable to United States Steel Corporation	$	192	$	496	$	363	$	676

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

-2-

UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)


(Dollars in millions)	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents (Note 7)	$	2,031	$	2,948
Receivables, less allowance of $40 and $38	1,508		1,390
Receivables from related parties (Note 19)	170		158
Inventories (Note 8)	2,020		2,128
Other current assets	221		319
Total current assets	5,950		6,943
Long-term restricted cash (Note 7)	32		32
Operating lease assets	90		109
Property, plant and equipment	25,148		23,975
Less accumulated depreciation and depletion	13,926		13,582
Total property, plant and equipment, net	11,222		10,393
Investments and long-term receivables, less allowance of $3 in both periods	809		761
Intangibles, net (Note 9)	426		436
Deferred income tax benefits (Note 12)	4		19
Goodwill (Note 9)	920		920
Other noncurrent assets	963		838
Total assets	$	20,416	$	20,451
Liabilities
Current liabilities:
Accounts payable and other accrued liabilities	$	2,471	$	2,889
Accounts payable to related parties (Note 19)	209		139
Payroll and benefits payable	333		442
Accrued taxes	172		222
Accrued interest	69		70
Current operating lease liabilities	40		44
Short-term debt and current maturities of long-term debt (Note 15)	162		142
Total current liabilities	3,456		3,948
Noncurrent operating lease liabilities	58		73
Long-term debt, less unamortized discount and debt issuance costs (Note 15)	4,078		4,080
Employee benefits	117		126
Deferred income tax liabilities (Note 12)	679		587
Deferred credits and other noncurrent liabilities	542		497
Total liabilities	8,930		9,311
Contingencies and commitments (Note 21)
Stockholders’ Equity (Note 17):
Common stock (287,752,765 and 285,959,739 shares issued) (Note 13)	288		286
Treasury stock, at cost (62,797,237 shares and 62,288,523 shares)	(1,442)		(1,418)
Additional paid-in capital	5,281		5,253
Retained earnings	7,211		6,880
Accumulated other comprehensive income (Note 18)	55		46
Total United States Steel Corporation stockholders’ equity	11,393		11,047
Noncontrolling interests	93		93
Total liabilities and stockholders’ equity	$	20,416	$	20,451

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

-3-

UNITED STATES STEEL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(Dollars in millions)	2024		2023
Increase (decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net earnings	$	354	$	676
Adjustments to reconcile to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	427		445
Asset impairment charges	19		4

Restructuring and other charges (Note 20)	6		3
Loss on debt extinguishment	2		—
Pensions and other postretirement benefits	(62)		(84)
Active employee benefit investments	41		7
Deferred income taxes (Note 12)	87		135
Net gain on sale of assets	(1)		(2)
Equity investee earnings, net of distributions received	(48)		(24)
Changes in:
Current receivables	(156)		(232)
Inventories	89		(167)
Current accounts payable and accrued expenses	(152)		288
Income taxes receivable/payable	(42)		48
All other, net	(118)		(203)
Net cash provided by operating activities	446		894
Investing activities:
Capital expenditures	(1,271)		(1,353)
Proceeds from sale of assets	1		3
Other investing activities	(5)		—
Net cash used in investing activities	(1,275)		(1,350)
Financing activities:



Issuance of long-term debt, net of financing costs (Note 15)	—		238
Repayment of long-term debt (Note 15)	(33)		(20)

Common stock repurchased (Note 22)	—		(150)
Other financing activities	(43)		(42)
Net cash (used in) provided by financing activities	(76)		26
Effect of exchange rate changes on cash	(10)		8
Net decrease in cash, cash equivalents and restricted cash	(915)		(422)
Cash, cash equivalents and restricted cash at beginning of year (Note 7)	2,988		3,539
Cash, cash equivalents and restricted cash at end of period (Note 7)	$	2,073	$	3,117


Non-cash investing and financing activities:
Change in accrued capital expenditures	$	(173)	$	(146)
U. S. Steel common stock issued for employee/non-employee director stock plans	37		28
Capital expenditures funded by finance lease borrowings	51		55
Export Credit Agreement (ECA) financing	—		2

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

-4-

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation and Significant Accounting Policies

The year-end Consolidated Balance Sheet data was derived from audited statements but does not include all disclosures required for complete financial statements by accounting principles generally accepted in the United States of America (U.S. GAAP). The other information in these condensed financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair statement of the results for the periods covered, including assessment of certain accounting matters using all available information such as consideration of forecasted financial information in context with other information reasonably available to us. However, our future assessment of our current expectations could result in material impacts to our consolidated financial statements in future reporting periods. All such adjustments are of a normal recurring nature unless disclosed otherwise. These condensed financial statements, including notes, have been prepared in accordance with the applicable rules of the SEC 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, 2023, which should be read in conjunction with these condensed financial statements.

Agreement and Plan of Merger with Nippon Steel Corporation

On December 18, 2023, the Company entered into an Agreement and Plan of Merger (such agreement, as it may be amended, modified or supplemented from time to time, the “Merger Agreement”) by and among the Company, Nippon Steel North America, Inc., a New York corporation (“Purchaser”), 2023 Merger Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Purchaser (“Merger Sub”), and solely as provided in Section 9.13 therein, Nippon Steel Corporation, a Japanese corporation (“NSC”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions described therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Purchaser (the “Merger”). On April 12, 2024, the Company obtained the approval of its stockholders required to adopt the Merger Agreement. U. S. Steel stockholders approved the Merger with 98.8% approval of shares voted, satisfying a significant condition to closing. Subject to the terms and conditions set forth in the Merger Agreement, each share of the Company's common stock, par value $1.00 per share, outstanding immediately prior to the effective time of the Merger (the "Effective Time") will, at the Effective Time, automatically be converted into the right to receive $55.00 per share in cash, without interest, subject to any required tax withholding. The Company and NSC are continuing to pursue certain required regulatory approvals in the United States and expect to close in the second half of 2024. The Company and NSC each received, and are working to respond to, a request for additional information and documentary materials from the U.S. Department of Justice in connection with the antitrust review of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. All required regulatory approvals outside of the United States related to the Merger have been received.

The Merger Agreement requires us to operate in the ordinary course of business and restricts us, without the consent of Purchaser, from taking certain specified actions agreed by the parties to be outside the ordinary course of business until the pending Merger occurs or the Merger Agreement terminates.

2. New Accounting Standards

During the six months ended June 30, 2024, and the twelve months ended December 31, 2023, there were no accounting standards and interpretations issued which are expected to have a material impact on the Company's financial position, operations or cash flows.

In March 2024, the Securities and Exchange Commission (SEC) adopted final rules that will require certain climate related disclosures. Certain disclosures will be required in a footnote to the audited financial statements beginning in fiscal year 2025. The audited financial statement disclosures include capitalized costs and expenses related to severe weather events and other natural conditions subject to certain materiality thresholds. Beginning in annual disclosures for fiscal year 2026, certain greenhouse gas emission disclosures will also be required. In April 2024, the SEC issued a stay on the rules until legal challenges to the rule are addressed. U. S. Steel is monitoring the legal challenges and assessing the impact of the rules on its disclosures.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 includes requirements that an entity disclose specific categories in the rate reconciliation, provide additional information for reconciling items that are greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate, and income taxes paid by jurisdiction that are greater than 5 percent of total income taxes paid. The standard also requires that entities disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) each disaggregated between domestic and foreign. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. U. S. Steel is currently assessing the impact of ASU 2023-09 on its disclosures.

-5-

In November 2023, the FASB issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 includes requirements that an entity disclose the title of the chief operating decision maker (CODM) and on an interim and annual basis, significant segment expenses and the composition of other segment items for each segment's reported profit. The standard also permits disclosure of additional measures of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. U. S. Steel is currently assessing the impact of ASU 2023-07 on its disclosures.

3. Recently Adopted Accounting Standards

In September 2022, the FASB issued Accounting Standards Update 2022-04, Disclosure of Supplier Finance Program Obligations (ASU 2022-04). ASU 2022-04 requires that an entity disclose certain information about supplier finance programs used in connection with the purchase of goods and services. ASU 2022-04 is effective for all entities with fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, except for the amendment on annual roll-forward information, which is effective for fiscal years beginning after December 15, 2023. U. S. Steel adopted this guidance effective January 1, 2023, with the exception of the amendment on roll-forward information, which will be adopted in our fiscal year beginning on January 1, 2024.

The Company has a SCF arrangement with a third-party administrator which allows participating suppliers, at their sole discretion, to make offers to sell payment obligations of the Company prior to their scheduled due dates at a discounted price to a participating financial institution. The third-party administrator entered into a separate agreement with the Export Import Bank of the United States to guarantee 90 percent of supplier obligations sold for up to $200 million. No guarantees or collateral are provided by the Company or any of its subsidiaries under the SCF program, and the Company does not benefit from any preferential payment terms or discounts as a result of supplier participation.

The Company’s goal is to capture overall supplier savings and improve working capital efficiency. The agreements facilitate the suppliers’ ability to sell payment obligations, while providing them with greater working capital flexibility. The Company has no economic interest in the sale of the suppliers’ receivables and no direct financial relationship with the financial institution concerning these services. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to sell amounts under the arrangements. The SCF program requires the Company to pay the third-party administrator the stated amount of the confirmed participating supplier invoices. The payment terms for confirmed invoices range from 75 to 90 days after the end of the month in which the invoice was issued.

The underlying costs from suppliers that elected to participate in the SCF program are generally recorded in cost of sales in the Company’s Condensed Consolidated Statement of Operations. Amounts due to suppliers who participate in the SCF program are reflected in accounts payable and accrued expenses on the Company’s Condensed Consolidated Balance Sheet and payments on the obligations by our suppliers are included in cash used in operating activities in the Condensed Consolidated Statement of Cash Flows. As of June 30, 2024, accounts payable and accrued expenses included $63 million of outstanding payment obligations which suppliers elected to sell to participating financial institutions.

In October 2021, the FASB issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. ASU 2021-08 is effective for public companies with 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. U. S. Steel adopted this guidance effective January 1, 2023, and will apply it to any future business combinations.

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 results of our real estate businesses are disclosed in the Other category.

The chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being earnings (loss) before interest and income taxes. Earnings (loss) before interest and income taxes for reportable segments and the Other category does not include net interest and other financial costs (income), income taxes, stock-based compensation expense, and certain other items that management believes are not indicative of future results.

The accounting principles applied at the operating segment level in determining earnings (loss) before interest and income taxes are generally the same as those applied at the consolidated financial statement level. Intersegment sales and transfers are accounted for at market-based prices and are eliminated at the corporate consolidation level. Corporate-level selling, general and administrative expenses and costs related to certain former businesses are allocated to the reportable segments and Other based on measures of activity that management believes are reasonable.

-6-

The results of segment operations for the three months ended June 30, 2024, and 2023 are:


(In millions) Three Months Ended June 30, 2024	Customer Sales		Intersegment Sales		Net Sales		Earnings (loss) from investees		Earnings (loss) before interest and income taxes
Flat-Rolled	$	2,623	$	64	$	2,687	$	40	$	183
Mini Mill	510		91		601		—		28
USSE	743		7		750		—		(10)
Tubular	241		2		243		5		29
Total reportable segments	4,117		164		4,281		45		230
Other	1		—		1		—		(4)
Reconciling Items and Eliminations	—		(164)		(164)		—		(45)
Total	$	4,118	$	—	$	4,118	$	45	$	181

Three Months Ended June 30, 2023
Flat-Rolled	$	2,956	$	93	$	3,049	$	29	$	231
Mini Mill	619		169		788		—		132
USSE	1,032		7		1,039		—		72
Tubular	398		—		398		9		157
Total reportable segments	5,005		269		5,274		38		592
Other	3		—		3		—		(12)
Reconciling Items and Eliminations	—		(269)		(269)		—		(16)
Total	$	5,008	$	—	$	5,008	$	38	$	564

-7-

The results of segment operations for the six months ended June 30, 2024, and 2023 are:


(In millions) Six Months Ended June 30, 2024	Customer Sales		Intersegment Sales		Net Sales		Earnings (loss) from investees		Earnings (loss) before interest and income taxes
Flat-Rolled	$	5,014	$	126	$	5,140	$	45	$	217
Mini Mill	1,088		216		1,304		—		127
USSE	1,661		14		1,675		—		6
Tubular	512		6		518		14		86
Total reportable segments	8,275		362		8,637		59		436
Other	3		—		3		—		(6)
Reconciling Items and Eliminations	—		(362)		(362)		—		(95)
Total	$	8,278	$	—	$	8,278	$	59	$	335

Six Months Ended June 30, 2023
Flat-Rolled	$	5,526	$	183	$	5,709	$	13	$	224
Mini Mill	1,172		239		1,411		—		144
USSE	1,870		13		1,883		—		38
Tubular	903		1		904		12		389
Total reportable segments	9,471		436		9,907		25		795
Other	7		—		7		—		(9)
Reconciling Items and Eliminations	—		(436)		(436)		—		(33)
Total	$	9,478	$	—	$	9,478	$	25	$	753

A summary of total assets by segment is as follows:


(In millions)	June 30, 2024		December 31, 2023
Flat-Rolled	$	7,387	$	7,546
Mini Mill (a)	8,499		7,569
USSE	2,132		2,229
Tubular	955		1,002
Total reportable segments	$	18,973	$	18,346
Other	$	129	$	140
Corporate, reconciling items, and eliminations (b)	1,314		1,965
Total assets	$	20,416	$	20,451

(a) Includes assets of $3.9 billion and $3.0 billion at June 30, 2024, and December 31, 2023, respectively, related to a new technologically advanced flat rolled steelmaking facility, Big River 2 (BR2), currently under construction near Osceola, Arkansas.

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

-8-

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2024		2023		2024		2023
Items not allocated to segments:
Restructuring and other charges (Note 20)	$	—	$	(2)	$	(6)	$	(3)
Stock-based compensation expense (Note 11)	(16)		(12)		(27)		(23)
Asset impairment charges	(12)		—		(19)		(4)
Environmental remediation charges	(1)		(2)		(3)		(2)
Strategic alternatives review process costs	(18)		—		(41)		—
Other charges, net	2		—		1		(1)
Total reconciling items	$	(45)	$	(16)	$	(95)	$	(33)

5. Disposition

In December 2023, production at USS-UPI, LLC ("UPI") was indefinitely idled. The Company has accrued a total of $62 million and $108 million for severance, exit costs and employee benefits as of June 30, 2024 and December 31, 2023, respectively. Payments of $5 million and $45 million for these items were made during the three months and six months ended June 30, 2024, respectively. The Company has previously committed to, and continues to intend to, pursue the disposition of certain assets related to the UPI facility.

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 and six months ended June 30, 2024, and 2023, respectively (Net Sales by Product, in millions, excluding intersegment sales):


Three Months Ended June 30, 2024	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	23	$	—	$	24	$	—	$	—	$	47
Hot-rolled sheets	406		275		352		—		—		1,033
Cold-rolled sheets	991		72		62		—		—		1,125
Coated sheets	784		161		265		—		—		1,210
Tubular products	—		—		15		237		—		252
All Other (a)	419		2		25		4		1		451
Total	$	2,623	$	510	$	743	$	241	$	1	$	4,118
(a) Consists primarily of sales of raw materials and coke making by-products.

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Three Months Ended June 30, 2023	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	77	$	—	$	38	$	—	$	—	$	115
Hot-rolled sheets	549		331		507		—		—		1,387
Cold-rolled sheets	958		102		80		—		—		1,140
Coated sheets	922		184		357		—		—		1,463
Tubular products	—		—		15		393		—		408
All Other (a)	450		2		35		5		3		495
Total	$	2,956	$	619	$	1,032	$	398	$	3	$	5,008
(a) Consists primarily of sales of raw materials and coke making by-products.


Six Months Ended June 30, 2024	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	51	$	—	$	49	$	—	$	—	$	100
Hot-rolled sheets	898		589		827		—		—		2,314
Cold-rolled sheets	1,936		170		139		—		—		2,245
Coated sheets	1,544		326		565		—		—		2,435
Tubular products	—		—		27		505		—		532
All Other (a)	585		3		54		7		3		652
Total	$	5,014	$	1,088	$	1,661	$	512	$	3	$	8,278
(a) Consists primarily of sales of raw materials and coke making by-products.


Six Months Ended June 30, 2023	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	136	$	—	$	70	$	—	$	—	$	206
Hot-rolled sheets	1,103		663		855		—		—		2,621
Cold-rolled sheets	1,859		174		151		—		—		2,184
Coated sheets	1,775		332		697		—		—		2,804
Tubular products	—		—		27		893		—		920
All Other (a)	653		3		70		10		7		743
Total	$	5,526	$	1,172	$	1,870	$	903	$	7	$	9,478
(a) Consists primarily of sales of raw materials and coke making by-products.

7. Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within U. S. Steel's Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statement of Cash Flows:


(In millions)	June 30, 2024		December 31, 2023		June 30, 2023
Cash and cash equivalents	$	2,031	$	2,948	$	3,080
Restricted cash in other current assets	10		8		5
Long-term restricted cash	32		32		32

Total cash, cash equivalents and restricted cash	$	2,073	$	2,988	$	3,117

Amounts included in restricted cash represent cash balances which are legally or contractually restricted, primarily for insurance purposes, environmental liabilities and certain capital projects.

8. Inventories

The last-in, first-out (LIFO) method is the predominant method of inventory costing for our Flat-Rolled and Tubular segments. The first-in, first-out (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 June 30, 2024, and December 31, 2023, the LIFO method accounted for 51 percent and 53 percent of total inventory values, respectively.

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(In millions)	June 30, 2024		December 31, 2023
Raw materials	$	877	$	773
Semi-finished products	753		877
Finished products	344		428
Supplies and sundry items	46		50
Total	$	2,020	$	2,128

Current acquisition costs for LIFO inventories were estimated to exceed the above inventory values by $1.2 billion at both June 30, 2024, and December 31, 2023, respectively. As a result of the liquidation of LIFO inventories, cost of sales decreased and earnings before interest and income taxes increased by $7 million and $9 million for the three months and six months ended June 30, 2024, respectively. Cost of sales decreased and earnings before interest and income taxes increased by $3 million and $12 million for the three months and six months ended June 30, 2023, respectively, as a result of liquidation of LIFO inventories.

9. Intangible Assets and Goodwill

Intangible assets that are being amortized on a straight-line basis over their estimated useful lives are detailed below:


		As of June 30, 2024						As of December 31, 2023
(In millions)	Useful Lives	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization	Net Amount
Customer relationships	22 Years	$	413	$	65	$	348	$	413	$