U. S. Steel(X) - 2024 Q4 - Annual Report

Financial Performance - In 2024, U.S. Steel's total steel shipments reached 14.206 million tons, a decrease from 15.507 million tons in 2023, representing a decline of approximately 8.4%[26] - Net earnings attributable to U.S. Steel in 2024 were $384 million, a decrease from$895 million in 2023, primarily due to reduced earnings before taxes[359] - The income tax expense for the year ended December 31, 2024, was $54 million, down from$152 million in 2023, reflecting a decrease in earnings before taxes and a benefit of $59 million related to 2023 tax returns[357] - Net cash provided by operating activities decreased to$919 million in 2024 from $2,100 million in 2023, primarily due to lower net earnings and changes in working capital[360] - The cash conversion cycle increased by 7 days in Q4 2024 compared to Q4 2023, driven by lower average realized prices (approximately$520 million) and decreased shipments (approximately $35 million)[361] Capital Expenditures and Investments - U.S. Steel's capital expenditures for strategic projects were$1.6 billion for the year ended December 31, 2024[34] - The construction of the BR2 mini mill, with a capacity of about 3 million tons per year, was completed in October 2024, with total capital spend expected to be approximately $3.6 billion[34] - Capital expenditures for 2024 were$2,287 million, down from $2,576 million in 2023, with Mini Mill capital expenditures accounting for$1,641 million[371] - Capital expenditures for 2025 are expected to total approximately $1.0 billion, significantly lower than 2024 due to the completion of several strategic projects[380] - The company had contractual commitments to acquire property, plant, and equipment totaling$683 million as of December 31, 2024[381] Environmental Initiatives - Environmental expenditures totaled $354 million in 2024, representing approximately 2$167 million) to cover emissions shortfalls[123] - U. S. Steel's environmental capital expenditures accounted for 4% of total capital expenditures in 2024, 3% in 2023, and 2% in 2022[402] Market and Competitive Landscape - The global steel production in 2024 was approximately 1.88 billion metric tons, consistent with 2023, with the top five producing countries accounting for about 74% of the total[29] - In 2025, additional steelmaking capacity is expected to enter the domestic market as competitors ramp up production[33] - U.S. Steel faces significant import competition due to global steel overcapacity estimated at over 630 million net tons per year, impacting operational and financial performance[99] - The Section 232 tariffs impose a 25% tariff on certain steel imports, with specific exemptions for countries like Argentina, Brazil, South Korea, and others[100] - U.S. Steel actively defends 69 U.S. and 14 EU antidumping and countervailing duty orders to protect its products from unfair competition[105] Product Development and Innovation - The company aims to enhance its competitive advantage in low-cost iron ore by completing a direct reduced grade pellet facility at Keetac ore operations in December 2023[34] - U. S. Steel's five-year plan includes developing low-carbon, high recycled-content steel grades, enhancing sustainability for customers in various industries[39] - The verdeX sustainable steel product line, launched in 2021, contains up to 90% recycled steel and reduces carbon emissions by 70-80% compared to traditional methods[39] - In 2023, U. S. Steel began production of InduX electrical steel products, which are ultra-thin, lightweight, and recyclable, targeting electric vehicles and generators[39] - The company has research centers in Pennsylvania, Slovakia, and Texas, focusing on developing innovative steel solutions to meet customer needs[39] Debt and Liquidity - The company repaid approximately $128 million in debt in 2024, ending the year with$3.62 billion in total liquidity[58] - Total estimated liquidity as of December 31, 2024, was $3,624 million, including$1,367 million in cash and cash equivalents[382] - Net cash used in financing activities was $199 million for the twelve months ended December 31, 2024, compared to$98 million in 2023, primarily due to the absence of proceeds from long-term debt issuance[372] - The company’s total contractual obligations amounted to $16,225 million, with$6,417 million due in 2025[392] Operational Performance - U.S. Steel achieved a corporate Days Away From Work (DAFW) rate of 0.06 in 2024, significantly better than the industry benchmark of 0.60[49] - Approximately 76% of Flat-Rolled sales, 56% of Mini Mill sales, 50% of USSE sales, and 82% of Tubular sales were contract sales in 2024[42] - Annual production capability of Flat-Rolled operations includes 7.5 million tons of raw steel at Gary Works and 22.4 million tons of iron ore pellets at Minnesota Ore Operations[67] - U.S. Steel's joint ventures include Hibbing Taconite Company with a production capability of 9.0 million tons, where U.S. Steel's share is 1.3 million tons[69] - Mini Mill operations at Big River Steel and Big River Steel 2 have a combined annual production capability of 6.3 million tons of raw steel[71] Regulatory and Compliance Issues - The U.S. EPA proposed a revised iron and steel rule on July 31, 2023, with finalization expected in 2024, which may have material impacts on U.S. Steel's operations[134] - The U.S. EPA's final rule on PM NAAQS significantly lowers the primary annual PM standard from 12 µg/m³ to 9.0 µg/m³, with ongoing litigation regarding its implementation[140] - U.S. Steel filed petitions for reconsideration and review regarding several environmental rules, indicating potential operational impacts that are currently not estimable[136][139] - The ongoing Russia-Ukraine conflict is affecting the legislative process related to emerging environmental regulations, creating uncertainty for U.S. Steel's operations[130] - U.S. Steel is exploring innovative steelmaking technologies to produce low greenhouse gas emissions intensity products[119]