U. S. Steel(X) - 2024 Q3 - Quarterly Report

Merger and Corporate Actions - The Company entered into a Merger Agreement with NSC, with stockholder approval of 98.8% received on April 12, 2024, and expects to close the Merger in Q4 2024[155][158]. - There were no common stock repurchased under the share repurchase program in the nine months ended September 30, 2024, and the company does not expect to utilize the remainder of this authorization due to the Merger Agreement[207]. - The company received eleven demand letters from stockholders regarding disclosures related to a merger, which it believes are without merit[250]. Financial Performance - Net sales for Q3 2024 were $3,853 million, a decrease of 13$4,431 million in Q3 2023, with declines across all segments except for a minor increase in "Other" sales[168]. - Total earnings from reportable segments decreased by 76% to $81 million for the three months ended September 30, 2024, compared to$341 million in 2023[177]. - Net earnings attributable to United States Steel Corporation were $119 million and$473 million for the three months and nine months ended September 30, 2024, respectively, compared to $299 million and$975 million for the same periods in 2023, reflecting a decrease of 60% and 51% respectively[196]. - Total earnings before interest and income taxes for the nine months ended September 30, 2024, decreased by 63% to $383 million compared to$1,030 million in 2023[177]. - Net cash provided by operating activities was $711 million for the nine months ended September 30, 2024, down from$1,711 million in the same period in 2023, primarily due to lower net earnings and changes in working capital[198]. - Net cash used in investing activities was $1,784 million for the nine months ended September 30, 2024, compared to$1,935 million in the same period in 2023, indicating a decrease in capital expenditures[202]. - Capital expenditures for the nine months ended September 30, 2024, were $1,782 million, down from$1,939 million in the same period in 2023[203]. Segment Performance - The Flat-Rolled segment reported a 14% decrease in sales due to lower shipment volumes (255 thousand tons) and lower average realized prices ($43 per ton)[170]. - The Mini Mill segment saw a 5$101 per ton), despite an increase in shipment volumes (41 thousand tons)[170]. - The Tubular segment experienced a 31% decrease in sales, driven by lower average realized prices ($1,122 per ton), although shipments increased by 7 thousand tons[170]. - Flat-Rolled segment earnings dropped by 53$106 million for the three months ended September 30, 2024, with raw steel production down 12% to 2,107 thousand metric tons[178]. - Mini Mill segment reported a loss of $28 million for the three months ended September 30, 2024, a 167$42 million in 2023, with average realized steel price per ton down 11% to $800[182]. - USSE segment earnings increased by 154$7 million for the three months ended September 30, 2024, driven by lower raw material costs[187]. - Tubular segment reported a loss of $4 million for the three months ended September 30, 2024, a 105$87 million in 2023, with average realized steel price per ton down 38% to $1,805[189]. Cost and Expenses - Selling, general and administrative expenses were$104 million for Q3 2024, down from $118 million in Q3 2023, attributed to lower profit and variable-based incentive costs[171]. - The Company recognized restructuring and other charges of$5 million for Q3 2024, compared to $18 million in Q3 2023[172]. - The cash conversion cycle increased by 5 days in the third quarter of 2024 compared to the fourth quarter of 2023, resulting in a cash conversion cycle of 24 days[199]. Capital Expenditures and Liquidity - The company finished the third quarter of 2024 with$1,773 million in cash and cash equivalents and total estimated liquidity of $4,052 million[209]. - The company expects 2024 capital spending to be$2.3 billion, with contractual commitments to acquire property, plant, and equipment totaling $830 million as of September 30, 2024[208]. Environmental and Regulatory Matters - U.S. Steel continues to monitor emerging regulations on Per- and Polyfluoroalkyl Substances (PFAS) as the U.S. EPA introduces additional regulations[223]. - U.S. Steel is currently involved in legal challenges regarding the final integrated iron and steel rule, which was signed on March 11, 2024, and published on April 3, 2024[226]. - The U.S. EPA proposed to lower the annual PM NAAQS from 12 µg/m³ to within the range of 9.0 to 10.0 µg/m³, with the final rule published on March 6, 2024[231]. - U.S. Steel continues to negotiate the resolution of a Notice of Violation regarding emissions at Granite City Works[268]. - The company received a civil penalty demand of$1.8 million from the ACHD for alleged exceedances of air standards at the Clairton plant, with ongoing appeals[272]. - A subsequent civil penalty demand of $2.2 million was received from the ACHD for alleged air standard exceedances from March 2, 2022, to November 30, 2023, also under appeal[273]. - The company faces a civil penalty demand of$4.6 million for alleged air permit violations at the Clairton plant, with a hearing scheduled for October 14, 2024[273]. - An additional civil penalty demand of $2.0 million for air permit violations from March 16, 2022, to December 31, 2023, is also under appeal, with a hearing set for October 29, 2024[273]. Market Conditions and Competition - U.S. Steel faces import competition due to global steel overcapacity, currently estimated at over 608 million net tons per year, significantly impacting operational and financial performance[233]. - U.S. imports of certain steel products are subject to a 25$23 million[262]. - U.S. Steel has an accrued liability of approximately $17 million for remediation costs at the former Geneva Works site as of September 30, 2024[264]. - The company has accrued liability of approximately$8 million as of September 30, 2024, for estimated remaining costs of remediation at the Fairfield Works facility[266]. - An accrued liability of $525,000 is reported as of September 30, 2024, for environmental issues at the South Works site[267]. - U.S. Steel estimates expenditures of$25 million to $30 million for the installation of low NOx burners at its Minnesota Ore Operations[270]. - As of September 30, 2024, approximately$3 million has been accrued for ongoing environmental studies, investigations, and remedial monitoring related to USS-UPI LLC[265]. Legal Matters - The company is involved in ongoing litigation related to asbestos, as noted in the financial statements[274].