UNITED STATES STEEL CORP [X] Filings

10-Q 1 x-20230930.htm 10-Q x-20230930

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 September 30, 2023


			☐			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 October 23, 2023 – 223,038,500 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	29
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43
	Item 4.	Controls and Procedures	43
PART II – OTHER INFORMATION
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	47
	Item 2	Purchases of Equity Securities by Issuer and Affiliated Purchasers	47
	Item 3	Defaults upon Senior Securities	47
	Item 4.	Mine Safety Disclosure	47
	Item 5.	Other Information	47
	Item 6.	Exhibits	48
SIGNATURE			49
WEB SITE POSTING			49

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 or operating capabilities, the timing, size and form of share repurchase transactions, operating or financial 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, changes in the global economic environment, including supply and demand conditions, inflation, interest rates, supply chain disruptions and changes in 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 reduction goals, statements regarding existing or new regulations 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 include all statements that are not historical facts, but instead represent only the Company’s beliefs regarding goals, plans and expectations about our prospects for the future and other future events, many of which, by their nature, are inherently uncertain, qualified by important factors 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, whether the objectives of the Company’s previously announced strategic alternatives review process will be achieved; the terms, timing, structure, benefits and costs of any strategic transaction; whether any such transaction will be consummated at all; the risk that the strategic alternatives review process and its announcement could have an adverse effect on the ability of the Company to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, shareholders and other business relationships and on its operating results and business generally; the risk that the strategic alternatives review process could divert the attention and time of the Company’s management, the risk of any unexpected costs or expenses resulting from the strategic alternatives review process; the risk of any litigation relating to the strategic alternatives review process; and 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, 2022, and those described from time to time in our future reports filed with the Securities and Exchange Commission (SEC).

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 September 30,				Nine Months Ended September 30,
(Dollars in millions, except per share amounts)	2023		2022		2023		2022
Net sales:
Net sales	$	3,943	$	4,667	$	12,375	$	15,304
Net sales to related parties (Note 19)	488		536		1,534		1,423
Total (Note 6)	4,431		5,203		13,909		16,727
Operating expenses (income):
Cost of sales (excludes items shown below)	3,838		4,359		11,952		12,843
Selling, general and administrative expenses	118		95		320		324
Depreciation, depletion and amortization	230		198		675		594
Earnings from investees	(51)		(71)		(76)		(202)
Asset impairment charges	—		—		4		157

Restructuring and other charges (Note 20)	18		23		21		57

Other losses (gains), net	1		(15)		(17)		(32)
Total	4,154		4,589		12,879		13,741
Earnings before interest and income taxes	277		614		1,030		2,986
Interest expense	16		38		63		127
Interest income	(39)		(15)		(103)		(20)

Other financial costs	7		7		19		27
Net periodic benefit income	(42)		(60)		(125)		(182)
Net gain from investments related to active employee benefits (Note 16)	(6)		—		(36)		—
Net interest and other financial benefits	(64)		(30)		(182)		(48)
Earnings before income taxes	341		644		1,212		3,034
Income tax expense (Note 12)	42		154		237		684
Net earnings	299		490		975		2,350
Less: Net earnings attributable to noncontrolling interests	—		—		—		—
Net earnings attributable to United States Steel Corporation	$	299	$	490	$	975	$	2,350
Earnings per common share (Note 13):
Earnings per share attributable to United States Steel Corporation stockholders:
'-Basic	$	1.34	$	2.07	$	4.33	$	9.33
'-Diluted	$	1.20	$	1.85	$	3.86	$	8.38

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 September 30,				Nine Months Ended September 30,
(Dollars in millions)	2023		2022		2023		2022
Net earnings	$	299	$	490	$	975	$	2,350
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustments	(35)		(92)		(4)		(220)
Changes in pension and other employee benefit accounts	(13)		—		(35)		(2)
Changes in derivative financial instruments	47		18		36		54
Changes in fair value of active employee benefit investments	1		—		3		—
Total other comprehensive income (loss), net of tax	—		(74)		—		(168)
Comprehensive income including noncontrolling interest	299		416		975		2,182
Comprehensive income attributable to noncontrolling interest	—		—		—		—
Comprehensive income attributable to United States Steel Corporation	$	299	$	416	$	975	$	2,182

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)	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents (Note 7)	$	3,222	$	3,504
Receivables, less allowance of $39 and $38	1,404		1,485
Receivables from related parties (Note 19)	137		150
Inventories (Note 8)	2,304		2,359
Other current assets	328		368
Total current assets	7,395		7,866
Long-term restricted cash (Note 7)	32		31
Operating lease assets	116		146
Property, plant and equipment	23,097		21,222
Less accumulated depreciation and depletion	13,186		12,730
Total property, plant and equipment, net	9,911		8,492
Investments and long-term receivables, less allowance of $3 and $4	863		840
Intangibles, net (Note 9)	447		478
Deferred income tax benefits (Note 12)	—		10
Goodwill (Note 9)	920		920
Other noncurrent assets	711		675
Total assets	$	20,395	$	19,458
Liabilities
Current liabilities:
Accounts payable and other accrued liabilities	$	2,759	$	2,873
Accounts payable to related parties (Note 19)	180		143
Payroll and benefits payable	498		493
Accrued taxes	169		271
Accrued interest	52		67
Current operating lease liabilities	45		49
Short-term debt and current maturities of long-term debt (Note 15)	98		63
Total current liabilities	3,801		3,959
Noncurrent operating lease liabilities	79		105
Long-term debt, less unamortized discount and debt issuance costs (Note 15)	4,129		3,914
Employee benefits	138		209
Deferred income tax liabilities (Note 12)	712		456
Deferred credits and other noncurrent liabilities	439		504
Total liabilities	9,298		9,147
Contingencies and commitments (Note 21)
Stockholders’ Equity (Note 17):
Common stock (284,962,478 and 282,487,412 shares issued) (Note 13)	285		283
Treasury stock, at cost (61,932,549 shares and 54,089,559 shares)	(1,402)		(1,204)
Additional paid-in capital	5,235		5,194
Retained earnings	6,971		6,030
Accumulated other comprehensive loss (Note 18)	(85)		(85)
Total United States Steel Corporation stockholders’ equity	11,004		10,218
Noncontrolling interests	93		93
Total liabilities and stockholders’ equity	$	20,395	$	19,458

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)


	Nine Months Ended September 30,
(Dollars in millions)	2023		2022
Increase (decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net earnings	$	975	$	2,350
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, depletion and amortization	675		594
Asset impairment charges	4		157

Restructuring and other charges (Note 20)	21		57

Pensions and other postretirement benefits	(124)		(164)
Active employee benefit investments	20		—
Deferred income taxes (Note 12)	275		561
Net gain on sale of assets	(2)		(10)
Equity investee earnings, net of distributions received	(75)		(181)
Changes in:
Current receivables	99		(36)
Inventories	52		(697)
Current accounts payable and accrued expenses	76		188
Income taxes receivable/payable	(86)		(88)
All other, net	(199)		19
Net cash provided by operating activities	1,711		2,750
Investing activities:
Capital expenditures	(1,939)		(1,138)
Proceeds from cost reimbursement government grants (Note 21)	—		53
Proceeds from sale of assets	4		28
Other investing activities	—		(8)
Net cash used in investing activities	(1,935)		(1,065)
Financing activities:



Issuance of long-term debt, net of financing costs (Note 15)	241		291
Repayment of long-term debt (Note 15)	(69)		(375)

Common stock repurchased (Note 22)	(175)		(699)
Proceeds from government incentives (Note 21)	—		82
Other financing activities	(50)		(51)
Net cash used in financing activities	(53)		(752)
Effect of exchange rate changes on cash	(3)		(46)
Net (decrease) increase in cash, cash equivalents and restricted cash	(280)		887
Cash, cash equivalents and restricted cash at beginning of year (Note 7)	3,539		2,600
Cash, cash equivalents and restricted cash at end of period (Note 7)	$	3,259	$	3,487


Non-cash investing and financing activities:
Change in accrued capital expenditures	$	(82)	$	373
U. S. Steel common stock issued for employee/non-employee director stock plans	29		46
Capital expenditures funded by finance lease borrowings	74		43
Export Credit Agreement (ECA) financing	5		—

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, 2022, which should be read in conjunction with these condensed financial statements.

2. New Accounting Standards

During the nine months ended September 30, 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.

3. Recently Adopted Accounting Standards

In September 2022, the Financial Accounting Standards Board (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 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 supply chain finance (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 September 30, 2023, accounts payable and accrued expenses included $93 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.

-5-

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.

The results of segment operations for the three months ended September 30, 2023, and 2022 are:


(In millions) Three Months Ended September 30, 2023	Customer Sales		Intersegment Sales		Net Sales		Earnings from investees		Earnings (loss) before interest and income taxes(a)
Flat-Rolled	$	2,749	$	85	$	2,834	$	39	$	225
Mini Mill	529		140		669		—		42
USSE	838		6		844		—		(13)
Tubular	314		—		314		12		87
Total reportable segments	4,430		231		4,661		51		341
Other	1		—		1		—		7
Reconciling Items and Eliminations	—		(231)		(231)		—		(71)
Total	$	4,431	$	—	$	4,431	$	51	$	277

Three Months Ended September 30, 2022
Flat-Rolled	$	3,248	$	104	$	3,352	$	59	$	518
Mini Mill	602		60		662		—		1
USSE	925		2		927		—		(32)
Tubular	425		—		425		12		155
Total reportable segments	5,200		166		5,366		71		642
Other	3		—		3		—		21
Reconciling Items and Eliminations	—		(166)		(166)		—		(49)
Total	$	5,203	$	—	$	5,203	$	71	$	614
(a) Earnings (loss) before interest and income taxes has been updated for the three months ended September 30, 2022, for Flat-Rolled and Reconciling Items and Eliminations. This is the result of a retroactive adjustment for the reclassification of stock-based compensation expense as an item not allocated to segment results. See the schedule of reconciling items to consolidated earnings before interest and income taxes below for further details.

-6-

The results of segment operations for the nine months ended September 30, 2023, and 2022 are:


(In millions) Nine Months Ended September 30, 2023	Customer Sales		Intersegment Sales		Net Sales		Earnings from investees		Earnings (loss) before interest and income taxes(a)
Flat-Rolled	$	8,275	$	268	$	8,543	$	52	$	449
Mini Mill	1,701		379		2,080		—		186
USSE	2,708		19		2,727		—		25
Tubular	1,217		1		1,218		24		476
Total reportable segments	13,901		667		14,568		76		1,136
Other	8		—		8		—		(2)
Reconciling Items and Eliminations	—		(667)		(667)		—		(104)
Total	$	13,909	$	—	$	13,909	$	76	$	1,030

Nine Months Ended September 30, 2022
Flat-Rolled	$	9,926	$	303	$	10,229	$	175	$	1,840
Mini Mill	2,158		337		2,495		—		549
USSE	3,518		10		3,528		—		512
Tubular	1,115		5		1,120		27		339
Total reportable segments	16,717		655		17,372		202		3,240
Other	10		—		10		—		16
Reconciling Items and Eliminations	—		(655)		(655)		—		(270)
Total	$	16,727	$	—	$	16,727	$	202	$	2,986
(a) Earnings (loss) before interest and income taxes has been updated for the nine months ended September 30, 2022, for Flat-Rolled and Reconciling Items and Eliminations. This is the result of a retroactive adjustment for the reclassification of stock-based compensation expense as an item not allocated to segment results. See the schedule of reconciling items to consolidated earnings before interest and income taxes below for further details.

A summary of total assets by segment is as follows:


(In millions)	September 30, 2023		December 31, 2022
Flat-Rolled	$	7,779	$	7,936
Mini Mill (a)	7,074		5,787
USSE (b)	2,240		2,175
Tubular	1,027		1,140
Total reportable segments	$	18,120	$	17,038
Other	$	136	$	141
Corporate, reconciling items, and eliminations (b) (c)	2,139		2,279
Total assets	$	20,395	$	19,458

(a) Includes assets of $2.5 billion and $1.4 billion at September 30, 2023, and December 31, 2022, respectively, related to a new technologically advanced flat rolled steelmaking facility, Big River 2 (BR2), currently under construction near Osceola, Arkansas.

(b) In the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the amounts disclosed for total assets for USSE and Corporate were inadvertently misstated for an intersegment balance. Management determined the disclosure misstatement was not material to the 2022 financial statements. The revised amounts have been included in the table above.

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

-7-

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Items not allocated to segments:
Restructuring and other charges (Note 20)	$	(18)	$	(23)	$	(21)	$	(57)
Stock-based compensation expense (Note 11)	(14)		(13)		(37)		(45)
Asset impairment charges	—		—		(4)		(157)
Environmental remediation charges	(9)		(13)		(11)		(13)
Strategic alternatives review process costs	(16)		—		(16)		—
Granite City idling costs	(14)		—		(14)		—
Other charges, net	—		—		(1)		2
Total reconciling items	$	(71)	$	(49)	$	(104)	$	(270)

5. Disposition

In January 2022, the Company informed its employees, customers, and other key stakeholders that the Company would be idling its subsidiary in Pittsburg, California, USS-UPI, LLC ("UPI"), at the end of 2023. UPI primarily produces galvanized sheet and tin mill products. In September 2023, the Company issued WARN notices to employees at UPI to notify them of employment losses resulting from the idling of operations. As of September 30, 2023, the Company had accrued a total of $120 million for severance, exit costs and employee benefits. $1 million of these charges were incurred during the nine months ended September 30, 2023. No payments for these charges have been made as of September 30, 2023. 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 nine months ended September 30, 2023, and 2022, respectively:

Net Sales by Product (In millions):


Three Months Ended September 30, 2023	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	68	$	—	$	43	$	—	$	—	$	111
Hot-rolled sheets	422		263		388		—		—		1,073
Cold-rolled sheets	916		101		61		—		—		1,078
Coated sheets	893		164		312		—		—		1,369
Tubular products	—		—		13		310		—		323
All Other (a)	450		1		21		4		1		477
Total	$	2,749	$	529	$	838	$	314	$	1	$	4,431
(a) Consists primarily of sales of raw materials and coke making by-products.

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Three Months Ended September 30, 2022	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	48	$	—	$	27	$	—	$	—	$	75
Hot-rolled sheets	622		332		389		—		—		1,343
Cold-rolled sheets	974		92		73		—		—		1,139
Coated sheets	1,127		176		376		—		—		1,679
Tubular products	—		—		20		418		—		438
All Other (a)	477		2		40		7		3		529
Total	$	3,248	$	602	$	925	$	425	$	3	$	5,203
(a) Consists primarily of sales of raw materials and coke making by-products.


Nine Months Ended September 30, 2023	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	204	$	—	$	113	$	—	$	—	$	317
Hot-rolled sheets	1,525		926		1,243		—		—		$	3,694
Cold-rolled sheets	2,775		275		212		—		—		$	3,262
Coated sheets	2,668		496		1,009		—		—		$	4,173
Tubular products	—		—		40		1,203		—		$	1,243
All Other (a)	1,103		4		91		14		8		$	1,220
Total	$	8,275	$	1,701	$	2,708	$	1,217	$	8	$	13,909
(a) Consists primarily of sales of raw materials and coke making by-products.


Nine Months Ended September 30, 2022	Flat-Rolled		Mini Mill		USSE		Tubular		Other		Total
Semi-finished	$	177	$	—	$	90	$	—	$	—	$	267
Hot-rolled sheets	1,846		1,238		1,618		—		—		$	4,702
Cold-rolled sheets	3,053		307		335		—		—		$	3,695
Coated sheets	3,687		606		1,315		—		—		$	5,608
Tubular products	—		—		56		1,103		—		$	1,159
All Other (a)	1,163		7		104		12		10		$	1,296
Total	$	9,926	$	2,158	$	3,518	$	1,115	$	10	$	16,727
(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)	September 30, 2023		December 31, 2022		September 30, 2022
Cash and cash equivalents	$	3,222	$	3,504	$	3,364
Restricted cash in other current assets	5		4		—
Long-term restricted cash	32		31		123

Total cash, cash equivalents and restricted cash	$	3,259	$	3,539	$	3,487

Amounts included in restricted cash represent cash balances which are legally or contractually restricted, primarily for insurance purposes, environmental liabilities and other 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 September 30, 2023, and December 31, 2022, the LIFO method accounted for 44 percent and 43 percent of total inventory values, respectively.

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(In millions)	September 30, 2023		December 31, 2022
Raw materials	$	850	$	1,098
Semi-finished products	934		811
Finished products	477		398
Supplies and sundry items	43		52
Total	$	2,304	$	2,359

Current acquisition costs for LIFO inventories were estimated to exceed the above inventory values by $1.3 billion and $1.2 billion at September 30, 2023, and December 31, 2022, respectively. As a result of the liquidation of LIFO inventories, cost of sales decreased and earnings before interest and income taxes increased by $33 million and $45 million for the three months and nine months ended September 30, 2023, respectively. Cost of sales decreased and earnings before interest and income taxes increased by $1 million and $8 million for the three and nine months ended September 30, 2022, 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 September 30, 2023

As of December 31, 2022

(In millions)

Useful
Lives

Gross
Carrying
Amount