U. S. Steel(X) - 2021 Q4 - Annual Report

Steel Production and Capacity - In 2021, U.S. Steel's total steel shipments reached 15,994 thousand tons, a 31% increase from 12,216 thousand tons in 2020[22] - The acquisition of Big River Steel increased U.S. Steel's annual raw steel production capability by 3.3 million net tons[33] - A new mini mill in Osceola, Arkansas is expected to have a steelmaking capability of 3 million tons per year, utilizing state-of-the-art EAFs[35] - Big River Steel, located in Osceola, Arkansas, has an annual production capability of 3.3 million tons of raw steel, producing hot-rolled, cold-rolled, and coated sheets[69] - U.S. Steel Košice in Slovakia has an annual production capability of 5.0 million tons of raw steel, producing coke, slabs, and various steel products[71] - Tubular operations include Fairfield Tubular (0.9 million tons), Lorain Tubular (380 thousand tons), and Lone Star Tubular (totaling 780 thousand tons)[74] Financial Performance - Net earnings attributable to U.S. Steel in 2021 was $4,174 million compared to a net loss of $1,165 million in 2020[301] - Net cash provided by operating activities was $4,090 million in 2021, a significant increase from $138 million in 2020[303] - Capital expenditures in 2021 were $863 million, up from $725 million in 2020, with major investments in various segments[308] - Net cash used in financing activities was $2,747 million in 2021, primarily due to debt repayments and common stock repurchases[311] - U.S. Steel made debt payments of approximately $3.4 billion in 2021, including significant repayments of Senior Notes and other obligations[312] - The income tax expense for 2021 was $170 million, compared to an income tax benefit of $142 million in 2020[299] Environmental Initiatives - U.S. Steel aims to develop low-carbon footprint steels, including the verdeX product line, which produces up to 70% less greenhouse gas emissions compared to traditional methods[39] - U.S. Steel's environmental expenditures totaled $302 million in 2021, $278 million in 2020, and $376 million in 2019, representing approximately 2% of total costs and expenses[101] - The company aims to reduce greenhouse gas emissions intensity by 20% by 2030, based on 2018 levels, and has set a goal for net-zero emissions by 2050[106][107] - The company has incurred approximately $199 million in costs for emission allowances under the EU Emissions Trading System as of December 31, 2021[111] - U.S. Steel's operations are subject to stringent environmental regulations, including the Clean Air Act and the Clean Water Act[109] Strategic Investments and Acquisitions - U.S. Steel plans to invest $450 million in a non-grain oriented electrical steel line at Big River Steel, expected to deliver first coil in September 2023[33] - The company integrated commercial teams from U.S. Steel and Big River Steel to enhance customer service and leverage combined capabilities[38] - The Company has invested in new technologies and products as part of its Best for All strategy, including a mini mill facility in Osceola, Arkansas, and new product lines[128] - The company seeks growth through strategic acquisitions and may encounter difficulties in integrating or separating these businesses[129] Debt and Liquidity - U.S. Steel ended 2021 with total liquidity of $4.971 billion[57] - The company has approximately $3.9 billion in total debt, which may lead to liquidity problems if cash flows are insufficient to meet capital expenditures or debt service obligations[162] - The company's ability to service or refinance its debt is influenced by economic conditions and disruptions such as the COVID-19 pandemic and supply chain issues, particularly in the automotive industry[163] - U. S. Steel's liquidity is expected to be sufficient to meet obligations, including capital spending programs and operational costs[324] Market Conditions and Competition - U.S. Steel continues to face significant import competition, with global steel overcapacity estimated at over 400 million metric tons per year[91] - Global steel production capacity significantly exceeds demand, leading to downward pricing pressure and potential revenue loss[139] - The company faces increased competition from alternative materials, which may reduce demand for steel products and impact profitability[146] Safety and Workforce - U.S. Steel achieved a corporate Days Away From Work (DAFW) rate of 0.06, which is 0.64 better than the industry benchmark of 0.70[49] - U.S. Steel's focus on safety resulted in record safety performance, routinely achieving better results than industry benchmarks[48] - The company aims to maintain a diverse workforce and achieved a 100% score on the Human Rights Campaign's Corporate Equality Index in 2021[50] Regulatory and Compliance Issues - The company is involved in numerous remediation projects that could negatively affect its results of operations and cash flows[182] - Regulatory changes regarding greenhouse gas emissions could impose significant costs on the company's operations and affect its competitiveness[184] - The U.S. imposed six new antidumping/countervailing duty orders on seamless pipe imports, with duties ranging from 6% to 258%[98] Challenges and Risks - The COVID-19 pandemic has had a significant adverse impact on the Company's results of operations, financial condition, and cash flows[132] - Labor shortages and increased labor costs may disrupt operations and adversely affect financial results[153][154] - The company relies on third-party transportation services, and any disruptions could harm reputation and financial position[159][160]