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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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1-16811
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25-1897152
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(State or other
jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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600 Grant Street, Pittsburgh, PA
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15219-2800
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
P
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Accelerated filer
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Non-accelerated filer
|
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Smaller reporting company
|
|
|
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(Do not check if a smaller reporting company)
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|
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Page
|
||
PART I – FINANCIAL INFORMATION
|
|
||
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Item 1.
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Financial Statements:
|
|
|
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||
|
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||
|
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Item 2.
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||
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Item 3.
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Item 4.
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PART II – OTHER INFORMATION
|
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||
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Item 1.
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||
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Item 4.
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||
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Item 5.
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Item 6.
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(Dollars in millions, except per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
2,370
|
|
|
$
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2,446
|
|
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$
|
6,716
|
|
|
$
|
7,901
|
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Net sales to related parties (Note 18)
|
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316
|
|
|
384
|
|
|
895
|
|
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1,101
|
|
||||
Total
|
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2,686
|
|
|
2,830
|
|
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7,611
|
|
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9,002
|
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||||
Operating expenses (income):
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excludes items shown below)
|
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2,360
|
|
|
2,654
|
|
|
7,193
|
|
|
8,512
|
|
||||
Selling, general and administrative expenses
|
|
73
|
|
|
99
|
|
|
206
|
|
|
308
|
|
||||
Depreciation, depletion and amortization
|
|
126
|
|
|
136
|
|
|
384
|
|
|
418
|
|
||||
Earnings from investees
|
|
(18
|
)
|
|
(6
|
)
|
|
(91
|
)
|
|
(29
|
)
|
||||
Impairment of intangible assets (Note 5)
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Losses associated with U. S. Steel Canada Inc. (Note 21)
|
|
—
|
|
|
16
|
|
|
—
|
|
|
271
|
|
||||
Restructuring and other charges (Note 19)
|
|
(3
|
)
|
|
103
|
|
|
1
|
|
|
275
|
|
||||
Net loss (gain) on disposal of assets
|
|
3
|
|
|
(1
|
)
|
|
6
|
|
|
(2
|
)
|
||||
Other income, net
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Total
|
|
2,554
|
|
|
3,000
|
|
|
7,712
|
|
|
9,751
|
|
||||
Earnings (loss) before interest and income taxes
|
|
132
|
|
|
(170
|
)
|
|
(101
|
)
|
|
(749
|
)
|
||||
Interest expense
|
|
58
|
|
|
56
|
|
|
173
|
|
|
160
|
|
||||
Interest income
|
|
(2
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(2
|
)
|
||||
Loss on debt extinguishment
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Other financial (income) costs
|
|
6
|
|
|
(1
|
)
|
|
18
|
|
|
12
|
|
||||
Net interest and other financial costs (Note 7)
|
|
62
|
|
|
53
|
|
|
208
|
|
|
170
|
|
||||
Earnings (loss) before income taxes
|
|
70
|
|
|
(223
|
)
|
|
(309
|
)
|
|
(919
|
)
|
||||
Income tax provision (benefit) (Note 9)
|
|
19
|
|
|
(50
|
)
|
|
26
|
|
|
(410
|
)
|
||||
Net earnings (loss)
|
|
51
|
|
|
(173
|
)
|
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(335
|
)
|
|
(509
|
)
|
||||
Less: Net earnings attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings (loss) attributable to United States Steel Corporation
|
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$
|
51
|
|
|
$
|
(173
|
)
|
|
$
|
(335
|
)
|
|
$
|
(509
|
)
|
Earnings (loss) per common share
(Note 10):
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to United States Steel Corporation stockholders:
|
|
|
|
|
|
|
|
|
||||||||
-Basic
|
|
$
|
0.32
|
|
|
$
|
(1.18
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(3.49
|
)
|
-Diluted
|
|
$
|
0.32
|
|
|
$
|
(1.18
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(3.49
|
)
|
|
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net earnings (loss)
|
|
$
|
51
|
|
|
$
|
(173
|
)
|
|
$
|
(335
|
)
|
|
$
|
(509
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Changes in foreign currency translation adjustments
|
|
10
|
|
|
(5
|
)
|
|
41
|
|
|
(83
|
)
|
||||
Changes in pension and other employee benefit accounts
|
|
48
|
|
|
(131
|
)
|
|
(134
|
)
|
|
(44
|
)
|
||||
Changes in unrecognized (losses) gains on other
|
|
(4
|
)
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Total other comprehensive income (loss), net of tax
|
|
54
|
|
|
(136
|
)
|
|
(76
|
)
|
|
(127
|
)
|
||||
Comprehensive income (loss) including noncontrolling interest
|
|
105
|
|
|
(309
|
)
|
|
(411
|
)
|
|
(636
|
)
|
||||
Comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income (loss) attributable to United States Steel Corporation
|
|
$
|
105
|
|
|
$
|
(309
|
)
|
|
$
|
(411
|
)
|
|
$
|
(636
|
)
|
(Dollars in millions)
|
|
(Unaudited)
September 30, 2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,445
|
|
|
$
|
755
|
|
Receivables, less allowance of $26 and $28
|
|
1,014
|
|
|
864
|
|
||
Receivables from related parties, less allowance of $270 and $254 (Note 18)
|
|
182
|
|
|
199
|
|
||
Inventories (Note 11)
|
|
1,742
|
|
|
2,074
|
|
||
Other current assets
|
|
28
|
|
|
25
|
|
||
Total current assets
|
|
4,411
|
|
|
3,917
|
|
||
Property, plant and equipment
|
|
14,453
|
|
|
14,253
|
|
||
Less accumulated depreciation and depletion
|
|
10,235
|
|
|
9,842
|
|
||
Total property, plant and equipment, net
|
|
4,218
|
|
|
4,411
|
|
||
Investments and long-term receivables, less allowance of $7 and $7
|
|
538
|
|
|
540
|
|
||
Long-term receivables from related parties, less allowance of $1,624 and $1,446 (Note 18)
|
|
—
|
|
|
—
|
|
||
Intangibles – net (Note 5)
|
|
177
|
|
|
196
|
|
||
Deferred income tax benefits (Note 9)
|
|
6
|
|
|
15
|
|
||
Other noncurrent assets
|
|
117
|
|
|
88
|
|
||
Total assets
|
|
$
|
9,467
|
|
|
$
|
9,167
|
|
Liabilities
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
|
$
|
1,566
|
|
|
$
|
1,412
|
|
Accounts payable to related parties (Note 18)
|
|
89
|
|
|
81
|
|
||
Payroll and benefits payable
|
|
464
|
|
|
462
|
|
||
Accrued taxes
|
|
108
|
|
|
99
|
|
||
Accrued interest
|
|
78
|
|
|
49
|
|
||
Current portion of long-term debt (Note 13)
|
|
92
|
|
|
45
|
|
||
Total current liabilities
|
|
2,397
|
|
|
2,148
|
|
||
Long-term debt, less unamortized discount and debt issuance costs (Note 13)
|
|
2,988
|
|
|
3,093
|
|
||
Employee benefits
|
|
1,097
|
|
|
1,101
|
|
||
Deferred income tax liabilities (Note 9)
|
|
28
|
|
|
29
|
|
||
Deferred credits and other noncurrent liabilities
|
|
355
|
|
|
359
|
|
||
Total liabilities
|
|
6,865
|
|
|
6,730
|
|
||
Contingencies and commitments (Note 20)
|
|
|
|
|
||||
Stockholders’ Equity
(Note 16):
|
|
|
|
|
||||
Common stock (176,424,554 shares and 150,925,911 shares issued)
(Notes 10 and 22) |
|
176
|
|
|
151
|
|
||
Treasury stock, at cost (3,966,770 and 4,644,867 shares)
|
|
(277
|
)
|
|
(339
|
)
|
||
Additional paid-in capital
|
|
4,092
|
|
|
3,603
|
|
||
(Accumulated deficit) retained earnings
|
|
(145
|
)
|
|
190
|
|
||
Accumulated other comprehensive loss (Note 17)
|
|
(1,245
|
)
|
|
(1,169
|
)
|
||
Total United States Steel Corporation stockholders’ equity
|
|
2,601
|
|
|
2,436
|
|
||
Noncontrolling interests
|
|
1
|
|
|
1
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
9,467
|
|
|
$
|
9,167
|
|
|
|
Nine Months Ended
September 30, |
||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
||||
Increase (decrease) in cash and cash equivalents
|
|
|
|
|
||||
Operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(335
|
)
|
|
$
|
(509
|
)
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion and amortization
|
|
384
|
|
|
418
|
|
||
Impairment of intangible assets (Note 5)
|
|
14
|
|
|
—
|
|
||
Losses associated with U. S. Steel Canada Inc. (Note 21)
|
|
—
|
|
|
271
|
|
||
Restructuring and other charges (Note 19)
|
|
1
|
|
|
275
|
|
||
Provision for doubtful accounts
|
|
—
|
|
|
(13
|
)
|
||
Pensions and other postretirement benefits
|
|
(38
|
)
|
|
(33
|
)
|
||
Deferred income taxes
|
|
9
|
|
|
(385
|
)
|
||
Net loss (gain) on disposal of assets
|
|
6
|
|
|
(2
|
)
|
||
Distributions received, net of equity investees earnings
|
|
(86
|
)
|
|
(26
|
)
|
||
Changes in:
|
|
|
|
|
||||
Current receivables
|
|
(127
|
)
|
|
529
|
|
||
Inventories
|
|
339
|
|
|
38
|
|
||
Current accounts payable and accrued expenses
|
|
279
|
|
|
(261
|
)
|
||
Income taxes receivable/payable
|
|
14
|
|
|
7
|
|
||
Bank checks outstanding
|
|
15
|
|
|
8
|
|
||
All other, net
|
|
102
|
|
|
(64
|
)
|
||
Net cash provided by operating activities
|
|
577
|
|
|
253
|
|
||
Investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(268
|
)
|
|
(354
|
)
|
||
Acquisitions (Note 4)
|
|
—
|
|
|
(25
|
)
|
||
Disposal of assets
|
|
6
|
|
|
2
|
|
||
Change in restricted cash, net
|
|
(3
|
)
|
|
8
|
|
||
Investments, net
|
|
(17
|
)
|
|
(2
|
)
|
||
Net cash used in investing activities
|
|
(282
|
)
|
|
(371
|
)
|
||
Financing activities:
|
|
|
|
|
||||
Issuance of long-term debt, net of financing costs
|
|
958
|
|
|
—
|
|
||
Repayment of long-term debt
|
|
(1,019
|
)
|
|
(18
|
)
|
||
Settlement of contingent consideration
|
|
(15
|
)
|
|
—
|
|
||
Net proceeds from public offering of common stock (Note 22)
|
|
482
|
|
|
—
|
|
||
Receipts from exercise of stock options
|
|
4
|
|
|
1
|
|
||
Dividends paid
|
|
(22
|
)
|
|
(22
|
)
|
||
Net cash provided by (used in) financing activities
|
|
388
|
|
|
(39
|
)
|
||
Effect of exchange rate changes on cash
|
|
7
|
|
|
(32
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
690
|
|
|
(189
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
755
|
|
|
1,354
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,445
|
|
|
$
|
1,165
|
|
(In millions)
Three Months Ended September 30, 2016
|
|
Customer
Sales |
|
Intersegment
Sales |
|
Net
Sales |
|
Earnings
(Loss) from Investees |
|
Earnings (Loss) Before Interest and Income Taxes
|
||||||||||
Flat-Rolled
|
|
$
|
1,986
|
|
|
$
|
—
|
|
|
$
|
1,986
|
|
|
$
|
18
|
|
|
$
|
114
|
|
USSE
|
|
575
|
|
|
1
|
|
|
576
|
|
|
—
|
|
|
81
|
|
|||||
Tubular
|
|
114
|
|
|
—
|
|
|
114
|
|
|
1
|
|
|
(75
|
)
|
|||||
Total reportable segments
|
|
2,675
|
|
|
1
|
|
|
2,676
|
|
|
19
|
|
|
120
|
|
|||||
Other Businesses
|
|
11
|
|
|
27
|
|
|
38
|
|
|
(1
|
)
|
|
18
|
|
|||||
Reconciling Items and Eliminations
|
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Total
|
|
$
|
2,686
|
|
|
$
|
—
|
|
|
$
|
2,686
|
|
|
$
|
18
|
|
|
$
|
132
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Flat-Rolled
|
|
$
|
2,070
|
|
|
$
|
72
|
|
|
$
|
2,142
|
|
|
$
|
4
|
|
|
$
|
(18
|
)
|
USSE
|
|
546
|
|
|
1
|
|
|
547
|
|
|
—
|
|
|
18
|
|
|||||
Tubular
|
|
199
|
|
|
—
|
|
|
199
|
|
|
2
|
|
|
(50
|
)
|
|||||
Total reportable segments
|
|
2,815
|
|
|
73
|
|
|
2,888
|
|
|
6
|
|
|
(50
|
)
|
|||||
Other Businesses
|
|
15
|
|
|
28
|
|
|
43
|
|
|
—
|
|
|
10
|
|
|||||
Reconciling Items and Eliminations
|
|
—
|
|
|
(101
|
)
|
|
(101
|
)
|
|
—
|
|
|
(130
|
)
|
|||||
Total
|
|
$
|
2,830
|
|
|
$
|
—
|
|
|
$
|
2,830
|
|
|
$
|
6
|
|
|
$
|
(170
|
)
|
(In millions)
Nine Months Ended September 30, 2016
|
|
Customer
Sales |
|
Intersegment
Sales |
|
Net
Sales |
|
Earnings
(Loss) from Investees |
|
Earnings (Loss) Before Interest and Income Taxes
|
||||||||||
Flat-Rolled
|
|
$
|
5,643
|
|
|
$
|
16
|
|
|
$
|
5,659
|
|
|
$
|
88
|
|
|
$
|
(68
|
)
|
USSE
|
|
1,616
|
|
|
2
|
|
|
1,618
|
|
|
—
|
|
|
122
|
|
|||||
Tubular
|
|
303
|
|
|
2
|
|
|
305
|
|
|
5
|
|
|
(217
|
)
|
|||||
Total reportable segments
|
|
7,562
|
|
|
20
|
|
|
7,582
|
|
|
93
|
|
|
(163
|
)
|
|||||
Other Businesses
|
|
49
|
|
|
80
|
|
|
129
|
|
|
(2
|
)
|
|
42
|
|
|||||
Reconciling Items and Eliminations
|
|
—
|
|
|
(100
|
)
|
|
(100
|
)
|
|
—
|
|
|
20
|
|
|||||
Total
|
|
$
|
7,611
|
|
|
$
|
—
|
|
|
$
|
7,611
|
|
|
$
|
91
|
|
|
$
|
(101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Flat-Rolled
|
|
$
|
6,388
|
|
|
$
|
245
|
|
|
$
|
6,633
|
|
|
$
|
26
|
|
|
$
|
(149
|
)
|
USSE
|
|
1,837
|
|
|
2
|
|
|
1,839
|
|
|
—
|
|
|
75
|
|
|||||
Tubular
|
|
730
|
|
|
—
|
|
|
730
|
|
|
6
|
|
|
(115
|
)
|
|||||
Total reportable segments
|
|
8,955
|
|
|
247
|
|
|
9,202
|
|
|
32
|
|
|
(189
|
)
|
|||||
Other Businesses
|
|
47
|
|
|
81
|
|
|
128
|
|
|
(3
|
)
|
|
24
|
|
|||||
Reconciling Items and Eliminations
|
|
—
|
|
|
(328
|
)
|
|
(328
|
)
|
|
—
|
|
|
(584
|
)
|
|||||
Total
|
|
$
|
9,002
|
|
|
$
|
—
|
|
|
$
|
9,002
|
|
|
$
|
29
|
|
|
$
|
(749
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Items not allocated to segments:
|
|
|
|
|
|
|
|
|
||||||||
Postretirement benefit (expense)
(a)
|
|
$
|
8
|
|
|
$
|
(11
|
)
|
|
$
|
36
|
|
|
$
|
(38
|
)
|
Other items not allocated to segments:
|
|
|
|
|
|
|
|
|
||||||||
Impairment of intangible assets
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Loss on shutdown of Fairfield flat-rolled operations
(b)(d)
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
||||
Losses associated with U. S. Steel Canada Inc. (Note 21)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(271
|
)
|
||||
Restructuring and other charges and adjustments
(c)
|
|
—
|
|
|
(12
|
)
|
|
(2
|
)
|
|
(31
|
)
|
||||
Loss on shutdown of coke production facilities
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
||||
Total other items not allocated to segments
|
|
(14
|
)
|
|
(119
|
)
|
|
(16
|
)
|
|
(546
|
)
|
||||
Total reconciling items
|
|
$
|
(6
|
)
|
|
$
|
(130
|
)
|
|
$
|
20
|
|
|
$
|
(584
|
)
|
|
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||
(In millions)
|
|
Useful
Lives |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Amount |
||||||||||||
Customer relationships
|
|
22-23 Years
|
|
$
|
132
|
|
|
$
|
57
|
|
|
$
|
75
|
|
|
$
|
132
|
|
|
$
|
52
|
|
|
$
|
80
|
|
Other
|
|
2-20 Years
|
|
17
|
|
|
9
|
|
|
8
|
|
|
17
|
|
|
8
|
|
|
9
|
|
||||||
Total amortizable intangible assets
|
|
|
|
$
|
149
|
|
|
$
|
66
|
|
|
$
|
83
|
|
|
$
|
149
|
|
|
$
|
60
|
|
|
$
|
89
|
|
|
|
Pension
Benefits |
|
Other
Benefits |
|
||||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Service cost
|
|
$
|
14
|
|
|
$
|
25
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
Interest cost
|
|
64
|
|
|
66
|
|
|
25
|
|
|
24
|
|
|
||||
Expected return on plan assets
|
|
(106
|
)
|
|
(109
|
)
|
|
(38
|
)
|
|
(38
|
)
|
|
||||
Amortization of prior service cost
|
|
2
|
|
|
4
|
|
|
6
|
|
|
(2
|
)
|
|
||||
Amortization of actuarial net loss
|
|
33
|
|
|
60
|
|
|
1
|
|
|
2
|
|
|
||||
Net periodic benefit cost (income), excluding below
|
|
7
|
|
|
46
|
|
|
(1
|
)
|
|
(9
|
)
|
|
||||
Multiemployer plans
|
|
16
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
||||
Settlement, termination and curtailment losses
|
|
10
|
|
|
24
|
|
(a)
|
—
|
|
|
(4
|
)
|
(a)
|
||||
Net periodic benefit cost (income)
|
|
$
|
33
|
|
|
$
|
87
|
|
|
$
|
(1
|
)
|
|
$
|
(13
|
)
|
|
|
|
Pension
Benefits |
|
Other
Benefits |
|
||||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Service cost
|
|
$
|
40
|
|
|
$
|
78
|
|
|
$
|
15
|
|
|
$
|
16
|
|
|
Interest cost
|
|
194
|
|
|
197
|
|
|
74
|
|
|
73
|
|
|
||||
Expected return on plan assets
|
|
(316
|
)
|
|
(330
|
)
|
|
(113
|
)
|
|
(115
|
)
|
|
||||
Amortization of prior service cost
|
|
8
|
|
|
13
|
|
|
19
|
|
|
(5
|
)
|
|
||||
Amortization of actuarial net loss
|
|
97
|
|
|
188
|
|
|
2
|
|
|
5
|
|
|
||||
Net periodic benefit cost (income), excluding below
|
|
23
|
|
|
146
|
|
|
(3
|
)
|
|
(26
|
)
|
|
||||
Multiemployer plans
|
|
48
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
||||
Settlement, termination and curtailment losses
|
|
13
|
|
|
29
|
|
(a)
|
—
|
|
|
(4
|
)
|
(a)
|
||||
Net periodic benefit cost (income)
|
|
$
|
84
|
|
|
$
|
226
|
|
|
$
|
(3
|
)
|
|
$
|
(30
|
)
|
|
|
2016
|
|
2015
|
||||||||
Grant Details
|
Shares
(a)
|
Fair Value
(b)
|
|
Shares
(a)
|
Fair Value
(b)
|
||||||
Stock Options
|
1,333,210
|
|
$
|
6.24
|
|
|
1,638,540
|
|
$
|
10.02
|
|
Restricted Stock Units
|
1,117,495
|
|
$
|
14.27
|
|
|
800,500
|
|
$
|
24.64
|
|
TSR Performance Awards
(c)
|
308,130
|
|
$
|
10.02
|
|
|
273,560
|
|
$
|
24.95
|
|
Black-Scholes Assumptions
(a)
|
|
2016 Grants
|
2015 Grants
|
||||
Grant date price per share of option award
|
|
$
|
14.78
|
|
$
|
24.74
|
|
Exercise price per share of option award
|
|
$
|
14.78
|
|
$
|
24.74
|
|
Expected annual dividends per share, at grant date
|
|
$
|
0.20
|
|
$
|
0.20
|
|
Expected life in years
|
|
5
|
|
5
|
|
||
Expected volatility
|
|
53
|
%
|
47
|
%
|
||
Risk-free interest rate
|
|
1.463
|
%
|
1.639
|
%
|
||
Grant date fair value per share of unvested option awards as calculated from above
|
|
$
|
6.24
|
|
$
|
10.02
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions, except per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Earnings (loss) attributable to United States Steel Corporation stockholders
|
|
$
|
51
|
|
|
$
|
(173
|
)
|
|
$
|
(335
|
)
|
|
$
|
(509
|
)
|
Weighted-average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
160,513
|
|
|
146,324
|
|
|
151,199
|
|
|
146,008
|
|
||||
Effect of stock options, restricted stock units and performance awards
|
|
1,187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Adjusted weighted-average shares outstanding, diluted
|
|
161,700
|
|
|
146,324
|
|
|
151,199
|
|
|
146,008
|
|
||||
Basic earnings (loss) per common share
|
|
$
|
0.32
|
|
|
$
|
(1.18
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(3.49
|
)
|
Diluted earnings (loss) per common share
|
|
$
|
0.32
|
|
|
$
|
(1.18
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(3.49
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||
(In thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||
Securities granted under the 2005 Stock Incentive Plan, as amended and the Omnibus Plan
|
|
4,613
|
|
|
8,623
|
|
9,568
|
|
|
8,623
|
(In millions)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
|
$
|
450
|
|
|
$
|
766
|
|
Semi-finished products
|
|
813
|
|
|
841
|
|
||
Finished products
|
|
415
|
|
|
392
|
|
||
Supplies and sundry items
|
|
64
|
|
|
75
|
|
||
Total
|
|
$
|
1,742
|
|
|
$
|
2,074
|
|
|
|
|
|
Fair Value
|
|
Fair Value
|
||||
(In millions)
|
|
Balance Sheet
Location |
|
September 30, 2016
|
|
December 31, 2015
|
||||
Foreign exchange forward contracts
|
|
Accounts receivable
|
|
$
|
1
|
|
|
$
|
4
|
|
Foreign exchange forward contracts
|
|
Accounts payable
|
|
$
|
1
|
|
|
$
|
1
|
|
(In millions)
|
|
Statement of
Operations Location |
|
Amount of Gain (Loss)
|
|
Amount of Gain (Loss)
|
||||
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended
September 30, 2016 |
||||||
Foreign exchange forward contracts
|
|
Other financial income/
costs |
|
$
|
—
|
|
|
$
|
(4
|
)
|
(In millions)
|
|
Statement of
Operations Location |
|
Amount of Gain (Loss)
|
|
Amount of Gain (Loss)
|
||||
|
|
Three Months Ended
September 30, 2015 |
|
Nine Months Ended September 30, 2015
|
||||||
Foreign exchange forward contracts
|
|
Other financial income/
costs |
|
$
|
—
|
|
|
$
|
32
|
|
(In millions)
|
|
Interest
Rates %
|
|
Maturity
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
2037 Senior Notes
|
|
6.65
|
|
2037
|
|
$
|
350
|
|
|
$
|
350
|
|
2022 Senior Notes
|
|
7.50
|
|
2022
|
|
400
|
|
|
400
|
|
||
2021 Senior Notes
|
|
6.875
|
|
2021
|
|
200
|
|
|
275
|
|
||
2021 Senior Secured Notes
|
|
8.375
|
|
2021
|
|
980
|
|
|
—
|
|
||
2020 Senior Notes
|
|
7.375
|
|
2020
|
|
439
|
|
|
600
|
|
||
2018 Senior Notes
|
|
7.00
|
|
2018
|
|
161
|
|
|
500
|
|
||
2017 Senior Notes
|
|
6.05
|
|
2017
|
|
—
|
|
|
450
|
|
||
Environmental Revenue Bonds
|
|
5.50 - 6.88
|
|
2016 - 2042
|
|
490
|
|
|
490
|
|
||
Recovery Zone Facility Bonds
|
|
6.75
|
|
2040
|
|
70
|
|
|
70
|
|
||
Fairfield Caster Lease
|
|
|
|
2022
|
|
29
|
|
|
30
|
|
||
Other capital leases and all other obligations
|
|
|
|
2019
|
|
1
|
|
|
1
|
|
||
Third Amended and Restated Credit Agreement
|
|
Variable
|
|
2020
|
|
—
|
|
|
—
|
|
||
USSK Revolver
|
|
Variable
|
|
2019
|
|
—
|
|
|
—
|
|
||
USSK credit facilities
|
|
Variable
|
|
2016 - 2018
|
|
—
|
|
|
—
|
|
||
Total Debt
|
|
|
|
|
|
3,120
|
|
|
3,166
|
|
||
Less unamortized discount and debt issuance costs
|
|
|
|
|
|
40
|
|
|
28
|
|
||
Less short-term debt and long-term debt due within one year
|
|
|
|
|
|
92
|
|
|
45
|
|
||
Long-term debt
|
|
|
|
|
|
$
|
2,988
|
|
|
$
|
3,093
|
|
Year
|
Redemption Price
|
|
2018
|
106.28
|
%
|
2019
|
104.19
|
%
|
2020 and thereafter
|
100.00
|
%
|
(In millions)
|
|
September 30, 2016
|
|
December 31, 2015
|
|
||||
Balance at beginning of year
|
|
$
|
89
|
|
|
$
|
48
|
|
|
Additional obligations incurred
|
|
3
|
|
|
45
|
|
(a)
|
||
Obligations settled
|
|
(9
|
)
|
|
(6
|
)
|
|
||
Foreign currency translation effects
|
|
—
|
|
|
(1
|
)
|
|
||
Accretion expense
|
|
2
|
|
|
3
|
|
|
||
Balance at end of period
|
|
$
|
85
|
|
|
$
|
89
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
(In millions)
|
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
(a)
|
|
$
|
3,098
|
|
|
$
|
3,051
|
|
|
$
|
1,896
|
|
|
$
|
3,107
|
|
Nine Months Ended September 30, 2016 (In millions)
|
|
Total
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Common
Stock |
|
Treasury
Stock |
|
Paid-in
Capital |
|
Non-
Controlling Interest |
||||||||||||||
Balance at beginning of year
|
|
$
|
2,437
|
|
|
$
|
190
|
|
|
$
|
(1,169
|
)
|
|
$
|
151
|
|
|
$
|
(339
|
)
|
|
$
|
3,603
|
|
|
$
|
1
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
|
(335
|
)
|
|
(335
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension and other benefit adjustments
|
|
(134
|
)
|
|
|
|
(134
|
)
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustment
|
|
41
|
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee stock plans
|
|
16
|
|
|
|
|
|
|
|
|
62
|
|
|
(46
|
)
|
|
|
|||||||||||
Common Stock Issued
|
|
582
|
|
|
|
|
|
|
|
25
|
|
|
|
|
557
|
|
|
|
||||||||||
Dividends paid on common stock
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(22
|
)
|
|
|
||||||||||
Other
|
|
17
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at September 30, 2016
|
|
$
|
2,602
|
|
|
$
|
(145
|
)
|
|
$
|
(1,245
|
)
|
|
$
|
176
|
|
|
$
|
(277
|
)
|
|
$
|
4,092
|
|
|
$
|
1
|
|
Nine Months Ended September 30, 2015 (In millions)
|
|
Total
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Common
Stock |
|
Treasury
Stock |
|
Paid-in
Capital |
|
Non-
Controlling Interest |
||||||||||||||
Balance at beginning of year
|
|
$
|
3,800
|
|
|
$
|
1,862
|
|
|
$
|
(1,441
|
)
|
|
$
|
151
|
|
|
$
|
(396
|
)
|
|
$
|
3,623
|
|
|
$
|
1
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
|
(509
|
)
|
|
(509
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension and other benefit adjustments
|
|
(44
|
)
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
||||||||||||
Currency translation adjustment
|
|
(83
|
)
|
|
|
|
(83
|
)
|
|
|
|
|
|
|
|
|
||||||||||||
Employee stock plans
|
|
30
|
|
|
|
|
|
|
|
|
55
|
|
|
(25
|
)
|
|
|
|||||||||||
Dividends paid on common stock
|
|
(22
|
)
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at September 30, 2015
|
|
$
|
3,172
|
|
|
$
|
1,331
|
|
|
$
|
(1,568
|
)
|
|
$
|
151
|
|
|
$
|
(341
|
)
|
|
$
|
3,598
|
|
|
$
|
1
|
|
(In millions)
(a)
|
|
Pension and
Other Benefit Items |
|
Foreign
Currency Items |
|
Other
|
|
Total
|
||||||||
Balance at December 31, 2015
|
|
$
|
(1,479
|
)
|
|
$
|
312
|
|
|
$
|
(2
|
)
|
|
$
|
(1,169
|
)
|
Other comprehensive income before reclassifications
|
|
5
|
|
|
41
|
|
|
16
|
|
|
62
|
|
||||
Amounts reclassified from AOCI
|
|
(139
|
)
|
(b)
|
—
|
|
|
1
|
|
|
(138
|
)
|
||||
Net current-period other comprehensive (loss) income
|
|
(134
|
)
|
|
41
|
|
|
17
|
|
|
(76
|
)
|
||||
Balance at September 30, 2016
|
|
$
|
(1,613
|
)
|
|
$
|
353
|
|
|
$
|
15
|
|
|
$
|
(1,245
|
)
|
|
|
|
Amount reclassified from AOCI
|
||||||||||||||
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
(a)
|
Details about AOCI components
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
Amortization of pension and other benefit items
|
|
|
|
|
|
|
|
|
||||||||
|
Prior service costs
(b)
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
|
$
|
(27
|
)
|
|
$
|
(8
|
)
|
|
Actuarial losses
(b)
|
|
(34
|
)
|
|
(62
|
)
|
|
(99
|
)
|
|
(193
|
)
|
||||
|
Settlement, termination and curtailment
(losses) (b) |
|
(10
|
)
|
|
(20
|
)
|
|
(13
|
)
|
|
(25
|
)
|
||||
|
Total before tax
|
|
(52
|
)
|
|
(84
|
)
|
|
(139
|
)
|
|
(226
|
)
|
||||
|
Tax benefit
|
|
—
|
|
|
32
|
|
|
—
|
|
|
86
|
|
||||
|
Net of tax
(c)
|
|
$
|
(52
|
)
|
|
$
|
(52
|
)
|
|
$
|
(139
|
)
|
|
$
|
(140
|
)
|
|
|
Employee Related
|
|
Exit
|
|
|
||||||
(in millions)
|
|
Costs
|
|
Costs
|
|
Total
|
||||||
Balance at December 31, 2015
|
|
$
|
48
|
|
|
$
|
107
|
|
|
$
|
155
|
|
|
|
|
|
|
|
|
||||||
Additional charges
|
|
19
|
|
|
—
|
|
|
19
|
|
|||
Cash payments/utilization
|
|
(31
|
)
|
|
(34
|
)
|
|
(65
|
)
|
|||
Other adjustments and reclassifications
|
|
(17
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|||
|
|
|
|
|
|
|
||||||
Balance at September 30, 2016
|
|
$
|
19
|
|
|
$
|
72
|
|
|
$
|
91
|
|
(in millions)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accounts payable
|
|
$
|
53
|
|
|
$
|
90
|
|
Payroll and benefits payable
|
|
17
|
|
|
48
|
|
||
Employee Benefits
|
|
1
|
|
|
—
|
|
||
Deferred credits and other noncurrent liabilities
|
|
20
|
|
|
17
|
|
||
Total
|
|
$
|
91
|
|
|
$
|
155
|
|
Period ended
|
|
Opening
Number of Claims |
|
Claims
Dismissed, Settled and Resolved |
|
New
Claims |
|
Closing
Number of Claims |
December 31, 2013
|
|
3,330
|
|
250
|
|
240
|
|
3,320
|
December 31, 2014
|
|
3,320
|
|
190
|
|
325
|
|
3,455
|
December 31, 2015
|
|
3,455
|
|
415
|
|
275
|
|
3,315
|
September 30, 2016
|
|
3,315
|
|
180
|
|
200
|
|
3,335
|
(In millions)
|
Nine Months Ended September 30, 2016
|
||
Beginning of period
|
$
|
197
|
|
Accruals for environmental remediation deemed probable and reasonably estimable
|
1
|
|
|
Adjustments for changes in estimates
|
(4
|
)
|
|
Obligations settled
|
(9
|
)
|
|
End of period
|
$
|
185
|
|
(In millions)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accounts payable
|
|
$
|
15
|
|
|
$
|
14
|
|
Deferred credits and other noncurrent liabilities
|
|
170
|
|
|
183
|
|
||
Total
|
|
$
|
185
|
|
|
$
|
197
|
|
(1)
|
Projects with Ongoing Study and Scope Development -
Projects which are still in the development phase. For these projects, the extent of remediation that may be required is not yet known, the remediation methods and plans are not yet developed, and/or cost estimates cannot be determined. Therefore, significant costs, in addition to the accrued liabilities for these projects, are reasonably possible. There are
five
environmental remediation projects where additional costs for completion are not currently estimable, but could be material. These projects are at Fairfield Works, Lorain Tubular, USS-POSCO Industries (UPI), the Fairless Plant, and the former steelmaking plant at Joliet, Illinois. As of
September 30, 2016
, accrued liabilities for these projects totaled
$1 million
for the costs of studies, investigations, interim measures, design and/or remediation. It is reasonably possible that additional liabilities associated with future requirements regarding studies, investigations, design and remediation for these projects could be as much as
$25 million
to
$40 million
.
|
(2)
|
Significant Projects with Defined Scope -
Projects with significant accrued liabilities with a defined scope. As of
September 30, 2016
, there are
four
significant projects with defined scope greater than or equal to
$3 million
each, with a total accrued liability of
$144 million
. These projects are Gary RCRA (accrued liability of
$30 million
), the former Geneva facility (accrued liability of
$63 million
), the former Duluth facility St. Louis River Estuary (accrued liability of
$48 million
), and the Solid Waste Management Unit (SWMU) #4 at UPI (accrued liability of
$3 million
).
|
(3)
|
Other Projects with a Defined Scope -
Projects with relatively small accrued liabilities for which we believe that, while additional costs are possible, they are not likely to be significant, and also include those projects
|
Remainder of 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Later
Years |
|
Total
|
$276
|
|
$740
|
|
$642
|
|
$323
|
|
$300
|
|
$1,383
|
|
$3,664
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Three Months Ended
September 30, |
|
|
|
Nine Months Ended
September 30, |
|
||||||||||||||
(Dollars in millions, excluding intersegment sales)
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
%
Change
|
||||||||||
Flat-Rolled Products (Flat-Rolled)
|
|
$
|
1,986
|
|
|
$
|
2,070
|
|
|
(4
|
)%
|
|
$
|
5,643
|
|
|
$
|
6,388
|
|
(12
|
)%
|
U. S. Steel Europe (USSE)
|
|
575
|
|
|
546
|
|
|
5
|
%
|
|
1,616
|
|
|
1,837
|
|
(12
|
)%
|
||||
Tubular Products (Tubular)
|
|
114
|
|
|
199
|
|
|
(43
|
)%
|
|
303
|
|
|
730
|
|
(58
|
)%
|
||||
Total sales from reportable segments
|
|
2,675
|
|
|
2,815
|
|
|
(5
|
)%
|
|
7,562
|
|
|
8,955
|
|
(16
|
)%
|
||||
Other Businesses
|
|
11
|
|
|
15
|
|
|
(27
|
)%
|
|
49
|
|
|
47
|
|
4
|
%
|
||||
Net sales
|
|
$
|
2,686
|
|
|
$
|
2,830
|
|
|
(5
|
)%
|
|
$
|
7,611
|
|
|
$
|
9,002
|
|
(15
|
)%
|
|
|
Hypothetical Rate
Increase (Decrease) |
||||||
(Dollars in millions)
|
|
1%
|
|
(1)%
|
||||
Expected return on plan assets
|
|
|
|
|
||||
Incremental (decrease) increase in:
|
|
|
|
|
||||
Net periodic pension cost
|
|
$
|
(76
|
)
|
|
$
|
76
|
|
Discount rate
|
|
|
|
|
||||
Incremental (decrease) increase in:
|
|
|
|
|
||||
Net periodic pension & other benefits costs for 2016
|
|
$
|
(9
|
)
|
|
$
|
7
|
|
Pension & other benefits obligations
|
|
$
|
(752
|
)
|
|
$
|
885
|
|
Health care cost escalation trend rates
|
|
|
|
|
||||
Incremental increase (decrease) in:
|
|
|
|
|
||||
Other postretirement benefit obligations
|
|
$
|
95
|
|
|
$
|
(82
|
)
|
Service and interest cost components for 2016
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
|
Three Months Ended
September 30, |
|
%
Change |
|
Nine Months Ended
September 30, |
|
%
Change |
||||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Flat-Rolled
|
|
$
|
114
|
|
|
$
|
(18
|
)
|
|
NM
|
|
|
$
|
(68
|
)
|
|
$
|
(149
|
)
|
|
(54
|
)%
|
USSE
|
|
81
|
|
|
18
|
|
|
NM
|
|
|
122
|
|
|
75
|
|
|
63
|
%
|
||||
Tubular
|
|
(75
|
)
|
|
(50
|
)
|
|
50
|
%
|
|
(217
|
)
|
|
(115
|
)
|
|
89
|
%
|
||||
Total earnings (loss) from reportable segments
|
|
120
|
|
|
(50
|
)
|
|
NM
|
|
|
(163
|
)
|
|
(189
|
)
|
|
(14
|
)%
|
||||
Other Businesses
|
|
18
|
|
|
10
|
|
|
80
|
%
|
|
42
|
|
|
24
|
|
|
75
|
%
|
||||
Segment earnings (loss) before interest and income taxes
|
|
138
|
|
|
(40
|
)
|
|
NM
|
|
|
(121
|
)
|
|
(165
|
)
|
|
(27
|
)%
|
||||
Items not allocated to segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Postretirement benefit income (expense)
|
|
8
|
|
|
(11
|
)
|
|
(173
|
)%
|
|
36
|
|
|
(38
|
)
|
|
(195
|
)%
|
||||
Other items not allocated to segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Impairment of intangible assets
|
|
(14
|
)
|
|
—
|
|
|
100
|
%
|
|
(14
|
)
|
|
—
|
|
|
100
|
%
|
||||
Loss on shutdown of Fairfield Flat-Rolled Operations
|
|
—
|
|
|
(91
|
)
|
|
(100
|
)%
|
|
—
|
|
|
(91
|
)
|
|
(100
|
)%
|
||||
Losses associated with U. S. Steel Canada Inc.
|
|
—
|
|
|
(16
|
)
|
|
(100
|
)%
|
|
—
|
|
|
(271
|
)
|
|
(100
|
)%
|
||||
Restructuring and other charges and related adjustments
|
|
—
|
|
|
(12
|
)
|
|
(100
|
)%
|
|
(2
|
)
|
|
(31
|
)
|
|
(94
|
)%
|
||||
Loss on shutdown of coke production facilities
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(153
|
)
|
|
(100
|
)%
|
||||
Total earnings (loss) before interest and income taxes
|
|
$
|
132
|
|
|
$
|
(170
|
)
|
|
(178
|
)%
|
|
$
|
(101
|
)
|
|
$
|
(749
|
)
|
|
(87
|
)%
|
|
|
Three Months Ended
September 30, |
|
%
Change |
|
Nine Months Ended
September 30, |
|
% Change
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Earnings (loss) before interest and income taxes ($ millions)
|
|
$
|
114
|
|
|
$
|
(18
|
)
|
|
NM
|
|
|
$
|
(68
|
)
|
|
$
|
(149
|
)
|
|
(54
|
)%
|
Gross margin
|
|
12.9
|
%
|
|
7.0
|
%
|
|
5.9
|
%
|
|
5.1
|
%
|
|
4.7
|
%
|
|
0.4
|
%
|
||||
Raw steel production (mnt)
|
|
2,734
|
|
|
3,240
|
|
|
(16
|
)%
|
|
8,248
|
|
|
8,916
|
|
|
(7
|
)%
|
||||
Capability utilization
|
|
64
|
%
|
|
66
|
%
|
|
(2
|
)%
|
|
65
|
%
|
|
61
|
%
|
|
4
|
%
|
||||
Steel shipments (mnt)
|
|
2,535
|
|
|
2,676
|
|
|
(5
|
)%
|
|
7,725
|
|
|
8,005
|
|
|
(3
|
)%
|
||||
Average realized steel price per ton
|
|
$
|
718
|
|
|
$
|
674
|
|
|
7
|
%
|
|
$
|
658
|
|
|
$
|
712
|
|
|
(8
|
)%
|
|
|
Three Months Ended
September 30, |
|
%
Change |
|
Nine Months Ended
September 30, |
|
% Change
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Earnings before interest and income taxes ($ millions)
|
|
$
|
81
|
|
|
$
|
18
|
|
|
350
|
%
|
|
$
|
122
|
|
|
$
|
75
|
|
|
63
|
%
|
Gross margin
|
|
19.8
|
%
|
|
9.1
|
%
|
|
10.7
|
%
|
|
13.7
|
%
|
|
9.7
|
%
|
|
4.0
|
%
|
||||
Raw steel production (mnt)
|
|
1,279
|
|
|
1,133
|
|
|
13
|
%
|
|
3,689
|
|
|
3,615
|
|
|
2
|
%
|
||||
Capability utilization
|
|
102
|
%
|
|
90
|
%
|
|
12
|
%
|
|
98
|
%
|
|
97
|
%
|
|
1
|
%
|
||||
Steel shipments (mnt)
|
|
1,105
|
|
|
1,020
|
|
|
8
|
%
|
|
3,235
|
|
|
3,375
|
|
|
(4
|
)%
|
||||
Average realized steel price per ton ($)
|
|
$
|
503
|
|
|
$
|
516
|
|
|
(3
|
)%
|
|
$
|
483
|
|
|
$
|
527
|
|
|
(8
|
)%
|
Average realized steel price per ton (€)
|
|
€
|
451
|
|
|
€
|
464
|
|
|
(3
|
)%
|
|
€
|
433
|
|
|
€
|
473
|
|
|
(8
|
)%
|
|
|
Three Months Ended
September 30, |
|
%
Change |
|
Nine Months Ended
September 30, |
|
% Change
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Loss before interest and income taxes ($ millions)
|
|
$
|
(75
|
)
|
|
$
|
(50
|
)
|
|
50
|
%
|
|
$
|
(217
|
)
|
|
$
|
(115
|
)
|
|
89
|
%
|
Gross margin
|
|
(42.7
|
)%
|
|
(18.0
|
)%
|
|
(24.7
|
)%
|
|
(44.5
|
)%
|
|
(5.6
|
)%
|
|
(38.9
|
)%
|
||||
Steel shipments (mnt)
|
|
103
|
|
|
154
|
|
|
(33
|
)%
|
|
262
|
|
|
465
|
|
|
(44
|
)%
|
||||
Average realized steel price per ton
|
|
$
|
1,049
|
|
|
$
|
1,264
|
|
|
(17
|
)%
|
|
$
|
1,094
|
|
|
$
|
1,516
|
|
|
(28
|
)%
|
|
|
Three Months Ended
September 30, |
|
%
Change
|
|
Nine Months Ended
September 30, |
|
%
Change |
||||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Interest expense
|
|
$
|
58
|
|
|
$
|
56
|
|
|
4
|
%
|
|
$
|
173
|
|
|
$
|
160
|
|
|
8
|
%
|
Interest income
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
%
|
|
(5
|
)
|
|
(2
|
)
|
|
150
|
%
|
||||
Loss on debt extinguishment
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
22
|
|
|
—
|
|
|
NM
|
|
||||
Other financial costs (income)
|
|
6
|
|
|
(1
|
)
|
|
NM
|
|
|
18
|
|
|
12
|
|
|
50
|
%
|
||||
Total net interest and other financial costs
|
|
$
|
62
|
|
|
$
|
53
|
|
|
17
|
%
|
|
$
|
208
|
|
|
$
|
170
|
|
|
22
|
%
|
|
|
Three Months Ended
September 30, |
|
Twelve Months Ended
September 30, |
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Accounts Receivable Turnover
|
|
2.2
|
|
|
2.0
|
|
|
8.0
|
|
|
7.7
|
|
Inventory Turnover
|
|
1.4
|
|
|
1.1
|
|
|
4.7
|
|
|
5.2
|
|
(Dollars in millions)
|
|
|
||
|
Cash and cash equivalents
|
$
|
1,445
|
|
|
Amount available under $1.5 Billion Credit Facility
|
1,341
|
|
|
|
Amount available under USSK credit facilities
|
278
|
|
|
|
Total estimated liquidity
|
$
|
3,064
|
|
•
|
2016 net loss of approximately $355 million, or a loss of $2.26 per share, and adjusted EBITDA of approximately $475 million;
|
•
|
Results for our Flat-Rolled and European segments to be higher than 2015 results and results for our Tubular segment to be lower than 2015 results;
|
•
|
To be cash positive for the year, including net proceeds from our equity offering of $482 million and approximately $500 million of cash benefits from working capital improvement in 2016, primarily related to better inventory management, driven by improved sales and operations planning practices; and
|
•
|
Improved results for Other Businesses and approximately $52 million of postretirement benefit income.
|
UNITED STATES STEEL CORPORATION
|
||||
RECONCILIATION OF ANNUAL ADJUSTED EBITDA OUTLOOK
|
||||
|
|
|
||
|
|
Year Ended
|
||
|
|
Dec. 31
|
||
(Dollars in millions)
|
2016
|
|||
Reconciliation to Projected Annual Adjusted EBITDA Included in Outlook
|
|
|||
|
Projected net loss attributable to United States Steel Corporation included in Outlook
|
$
|
(355
|
)
|
|
Estimated income tax expense
|
40
|
|
|
|
Estimated net interest and other financial costs
|
270
|
|
|
|
Estimated depreciation, depletion and amortization
|
505
|
|
|
|
Restructuring, impairment and other charges
|
15
|
|
|
|
|
|
||
|
Estimated projected annual adjusted EBITDA included in Outlook
|
$
|
475
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
SEGMENT EARNINGS (LOSS) BEFORE INTEREST AND INCOME TAXES:
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
|
|
$
|
114
|
|
|
$
|
(18
|
)
|
|
$
|
(68
|
)
|
|
$
|
(149
|
)
|
U. S. Steel Europe
|
|
81
|
|
|
18
|
|
|
122
|
|
|
75
|
|
||||
Tubular
|
|
(75
|
)
|
|
(50
|
)
|
|
(217
|
)
|
|
(115
|
)
|
||||
Total reportable segments
|
|
120
|
|
|
(50
|
)
|
|
(163
|
)
|
|
(189
|
)
|
||||
Other Businesses
|
|
18
|
|
|
10
|
|
|
42
|
|
|
24
|
|
||||
Items not allocated to segments:
|
|
|
|
|
|
|
|
|
||||||||
Postretirement benefit income (expense)
|
|
8
|
|
|
(11
|
)
|
|
36
|
|
|
(38
|
)
|
||||
Other items not allocated to segments:
|
|
|
|
|
|
|
|
|
||||||||
Impairment of intangible assets
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Loss on shutdown of Fairfield Flat-Rolled Operations
(a)
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
||||
Loss on write-down of retained interest in USSC
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(271
|
)
|
||||
Restructuring and other charges and adjustments
|
|
—
|
|
|
(12
|
)
|
|
(2
|
)
|
|
(31
|
)
|
||||
Loss on shutdown of coke production facilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
||||
Total earnings (loss) before interest and income taxes
|
|
$
|
132
|
|
|
$
|
(170
|
)
|
|
$
|
(101
|
)
|
|
$
|
(749
|
)
|
CAPITAL EXPENDITURES
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
(b)
|
|
$
|
23
|
|
|
$
|
63
|
|
|
$
|
97
|
|
|
$
|
196
|
|
U. S. Steel Europe
|
|
17
|
|
|
33
|
|
|
68
|
|
|
78
|
|
||||
Tubular
|
|
11
|
|
|
35
|
|
|
81
|
|
|
75
|
|
||||
Other Businesses
|
|
—
|
|
|
2
|
|
|
22
|
|
|
5
|
|
||||
Total
(c)
|
|
$
|
51
|
|
|
$
|
133
|
|
|
$
|
268
|
|
|
$
|
354
|
|
OPERATING STATISTICS
|
|
|
|
|
|
|
|
|
||||||||
Average realized price: ($/net ton)
(d)
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
|
|
$
|
718
|
|
|
$
|
674
|
|
|
$
|
658
|
|
|
$
|
712
|
|
U. S. Steel Europe
|
|
503
|
|
|
516
|
|
|
483
|
|
|
527
|
|
||||
Tubular
|
|
1,049
|
|
|
1,264
|
|
|
1,094
|
|
|
1,516
|
|
||||
Steel Shipments:
(d)(e)
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
|
|
2,535
|
|
|
2,676
|
|
|
7,725
|
|
|
8,005
|
|
||||
U. S. Steel Europe
|
|
1,105
|
|
|
1,020
|
|
|
3,235
|
|
|
3,375
|
|
||||
Tubular
|
|
103
|
|
|
154
|
|
|
262
|
|
|
465
|
|
||||
Raw Steel Production:
(e)
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
|
|
2,734
|
|
|
3,240
|
|
|
8,248
|
|
|
8,916
|
|
||||
U. S. Steel Europe
|
|
1,279
|
|
|
1,133
|
|
|
3,689
|
|
|
3,615
|
|
||||
Raw Steel Capability Utilization:
(f)
|
|
|
|
|
|
|
|
|
||||||||
Flat-Rolled
|
|
64
|
%
|
|
66
|
%
|
|
65
|
%
|
|
61
|
%
|
||||
U. S. Steel Europe
|
|
102
|
%
|
|
90
|
%
|
|
98
|
%
|
|
97
|
%
|
Period ended
|
|
Opening
Number of Claims |
|
Claims
Dismissed, Settled and Resolved |
|
New
Claims |
|
Closing
Number of Claims |
December 31, 2013
|
|
3,330
|
|
250
|
|
240
|
|
3,320
|
December 31, 2014
|
|
3,320
|
|
190
|
|
325
|
|
3,455
|
December 31, 2015
|
|
3,455
|
|
415
|
|
275
|
|
3,315
|
September 30, 2016
|
|
3,315
|
|
180
|
|
200
|
|
3,335
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
|
|
|
10.1
|
|
Administrative Procedures for the Executive Management Annual Incentive Compensation Program under the United States Steel Corporation Annual Incentive Compensation Plan, as amended November 1, 2016.
|
|
|
|
10.2
|
|
United States Steel Corporation Non Tax-Qualified Retirement Account Program, amended effective as of January 1, 2016.
|
|
|
|
10.3
|
|
United States Steel Corporation Supplemental Thrift Program, as amended November 1, 2016.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer required by Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as promulgated by the Securities and Exchange Commission pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer required by Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as promulgated by the Securities and Exchange Commission pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95
|
|
Mine Safety Disclosure required under Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
|
|
|
101 INS
|
|
XBRL Instance Document
|
|
|
|
101 SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101 CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101 DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101 LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101 PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
UNITED STATES STEEL CORPORATION
|
||
|
|
|
By
|
|
/s/ Colleen M. Darragh
|
|
|
|
|
|
Colleen M. Darragh
|
|
|
Vice President & Controller
|
1.
|
Administration
. The Compensation & Organization Committee (the “Committee”) shall administer the Annual Incentive Compensation Program (the “Program”) under and pursuant to the authority provided in the Board of Directors’ April 27, 2010 delegation to the Committee and Section 3 of the United States Steel Corporation Annual Incentive Compensation Plan (the “Plan”).
|
A.
|
Definitions
. Unless otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Plan.
|
2.
|
Participation/Eligibility
. All management employees of the Corporation, its Subsidiaries and affiliates are eligible to participate in the Program upon designation by the Committee, in the case of Covered Employees, or, in the case of other management employees, upon designation by the Chief Executive Officer.
|
A.
|
Executive Management
. All Executive Management employees (defined as those employees whose compensation is approved or reviewed by the Committee) of U. S. Steel, its subsidiaries and affiliates designated via written notice as participants are eligible to participate (“Eligible Employees” or “Participants”).
|
B.
|
New Participants
. A Participant who was not a Participant on the first day of the Performance Period may, subject to the Committee’s discretion, become a Participant during the Performance Period, participating on a pro rata basis for the remaining portion of the period in which such Participant first becomes eligible to participate, but shall be ineligible to participate in this Program for any portion of a year during which the Participant participates in any other cash incentive or bonus plan or program;
provided
, however, that a Covered Employee (as defined in Section 162(m) of the Internal Revenue Code) may so participate only if he or she becomes a Participant effective not later than 90 days after the beginning of the Performance Period.
|
C.
|
Rights
. No Participant or other employee shall have any claim to be granted an Award under the Program, and nothing contained in the Program or any Award Agreement shall confer upon any Participant any right to continue in the employ of the Corporation, its Subsidiaries or affiliates or interfere in any way with the right of the Corporation, its Subsidiaries or affiliates to terminate a Participant's employment at any time.
|
3.
|
Performance Period
.
|
A.
|
Calendar year
. Unless otherwise determined by the Committee at the commencement of each Performance Period, each such Performance Period shall be a calendar year.
|
4.
|
Award Pool
.
|
A.
|
Amount of the Award Pool
. The amount of the award pool (the “Award Pool”) shall be established by the Committee during the first 90 days of the Performance Period, and
|
B.
|
Funding the Pool
. The funding of the Award Pool will be dependent on the achievement of the Threshold Corporation Performance Goal, which shall also be established by the Committee during the first 90 days of the Performance Period. Unless otherwise determined by the Committee, the Threshold Corporation Performance Goal shall be based on net sales, which is a permitted performance measure pursuant to Section 5.03(a) of the Plan. If the Threshold Corporation Performance Goal is achieved, the Award Pool will be funded at the level established by the Committee with respect to the degree of attainment of the Threshold Performance Goal. Should the Company fail to meet the Threshold Corporation Performance Goal, the Total Award Pool shall not be funded and no awards shall be made under the Plan for the Performance Period.
|
C.
|
Threshold Corporation Performance Goal
. The Threshold Corporation Performance Goal for the Performance Period shall be the target assigned to one or more Performance Goals, which shall be set by the Committee during the first 90 days of the Performance Period. Unless otherwise determined by the Committee at the beginning of the relevant Performance Period, the Threshold Corporation Performance Goal will be the following objective measure:
|
(1)
|
Net Sales
. Net Sales shall mean the total amount of net sales reported on the consolidated statements of operations of United States Steel Corporation, including net sales to related parties. It is intended that the target for this measure and its related performance calculation be consistent with the target and performance calculations for the Segment Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), Total EBITDA, and Cash Flow, including the Business Plan Target Segment EBITDA, Business Plan Target Total EBITDA, and Business Plan Cash Flow, such that, to the extent an asset is excluded for any reason from the target calculation for Business Plan Target Segment EBITDA, Business Plan Total EBITDA, and Business Plan Cash Flow, the corresponding net sales, if any, are to be excluded from the Net Sales target and performance calculations, and, if an asset is included in the target calculation for the Business Plan Target Segment EBITDA, Business Plan Target Total EBITDA, and Business Plan Cash Flow, the corresponding net sales, if any, are to be included in the Net Sales target and performance calculations.
|
(2)
|
Adjustments
. Subject to the foregoing, the Committee may determine that changes in accounting standards or extraordinary items (as determined by the independent accountants of the Corporation in accordance with generally accepted accounting principles), shall be excluded from the calculation of the Threshold Corporation Performance Goal to the extent permitted in Section 162(m) of the Code.
|
5.
|
Incentive Award Determination
.
|
A.
|
Incentive Award Goals
. The Committee will use negative discretion pursuant to Section 5.05 of the Plan to reduce the amount of the Individual Maximum Award payable based on the achievement of one or more Incentive Award Goals, which will be used in the Incentive Award Calculation Formula. Unless otherwise determined by the Committee, the Incentive Award Goals shall be the following objective measures:
|
(1)
|
Segment EBITDA and Total EBITDA
. Segment EBITDA shall mean, for the Performance Period, EBITDA for each business unit (reportable segments and other businesses). Total EBITDA shall mean, for the Performance Period, total EBITDA for consolidated worldwide operations (including minority interests). EBITDA shall be determined as described in paragraph (2)(a) below.
|
(2)
|
Cash Flow
. Cash Flow shall mean, for the Performance Period, EBITDA for consolidated worldwide operations (including minority interests), plus or minus changes in current receivables, inventories, and current accounts payable and accrued expenses, less consolidated worldwide capital expenditures.
|
(a)
|
EBITDA for consolidated worldwide operations (including minority interests) shall mean income from operations as reported in the consolidated statements of operations of United States Steel Corporation, plus or minus the effect of items not allocated to segments (excluding postretirement benefit expenses) as disclosed in the notes to the consolidated financial statements of United States Steel Corporation, plus depreciation, depletion and amortization as reported in the consolidated statements of cash flows of United States Steel Corporation.
|
(b)
|
Changes in current receivables, inventories, and current accounts payable and accrued expenses shall mean those amounts reported on the consolidated statements of cash flows of United States Steel Corporation.
|
(c)
|
Consolidated worldwide capital expenditures shall mean capital expenditures as reported on the consolidated statements of cash flows of United States Steel Corporation.
|
B.
|
Adjustments
. The Committee may make adjustments to the Incentive Award Goal calculations as determined by the Committee in its discretion.
|
C.
|
Setting of Individual Incentive Targets and Payout Scales
.
|
(1)
|
The Individual Incentive Target, defined as a percentage of base salary (expressed for the Participant, grade level and/or position), and the Payout Scales for all levels of performance goals shall be set by the Committee.
|
(2)
|
The Individual Incentive Target shall be calculated by multiplying the designated target percentage by the actual base salary earned by the Participant during the relevant portions of the Performance Period.
|
(3)
|
The Payout Scale applied to all performance goals based on the actual performance achieved will determine the payout percent applied in the Incentive Award Calculation Formula under section 6, subject to negative adjustment by the Committee and the Individual Maximum Award for the Performance Period.
|
D.
|
Assignment of Segment EBITDA Performance Goal to Participants
. The Committee shall assign to each Participant a Segment EBITDA performance goal representing the reportable segment’s performance for which the Participant is responsible for driving. Participants who are “corporate staff” executives responsible for multiple segments may be assigned a Weighted Segment EBITDA performance goal, which shall be determined by the Committee and reflect a relative weighting of the segments for which the Participant is responsible. Certain Participants (i.e., the Chief Executive Officer) may be assigned a Total EBITDA performance goal.
|
E.
|
Individual Performance
. Individual Performance relative to individual performance goals as specified in the Participant’s goal plan for the Performance Period will be assessed for each Participant by the Chief Executive Officer with input from the Participant’s direct manager following the end of the Performance Period. The Chief Executive Officer’s Individual Performance will be assessed by the Committee with input from the full Board of Directors. The Individual Performance assessment will impact the Participant’s calculated award as set forth under the Incentive Award Calculation Formula, however, the assessment of Individual Performance does not preclude the Committee from exercising downward discretion and/or determining that no award should be paid to a Participant for a Performance Period.
|
6.
|
Incentive Award Calculation Formula
.
|
A.
|
Relative weighting
. Unless otherwise determined by the Committee when establishing the Incentive Award Goals, the relative weighting assigned to each of the performance measures shall be as follows:
|
(1)
|
Segment EBITDA/Total EBITDA
. Segment EBITDA/Total EBITDA shall be weighted at 50% of the Total Corporate Payout Percent.
|
(2)
|
Cash Flow
. Cash Flow shall be weighted at 50% of the Total Corporate Payout Percent.
|
(3)
|
Individual Performance
. Individual Performance shall be applied as a modifier to the Total Corporate Payout Percent, which is the sum of the weighted Segment EBITDA/Total EBITDA and Cash Flow payout percentages. The assessment of Individual Performance shall be quantified as a percentage between 50% (representing individual performance at a level of “needs improvement”) and 130% (representing individual performance at a level of “far exceeds expectations”), with 100% representing a level of “meets expectations.”
|
B.
|
Calculated award
. The calculated award for each Participant shall be determined as the product of the Individual Incentive Target, the Total Corporate Payout Percent, and the Individual Performance modifier, as illustrated below:
|
C.
|
Maximum award level
. The maximum award level shall be 228% of the Individual Incentive Target value with achievement of the highest level of performance for the Segment EBITDA, Total EBITDA, Cash Flow, and Individual Performance Goals, further subject to the individual per‑employee maximum set forth in the Plan.
|
7.
|
Payout Mechanics
.
|
A.
|
Payout determination
.
|
(1)
|
Evaluation
. The Committee shall determine and certify in writing the extent to which the Threshold Corporation Performance Goal for the Performance Period was satisfied following the end of the relevant Performance Period and if satisfied, determine through the exercise of negative discretion the amount of the Incentive Award payable to each Participant.
|
(2)
|
Calculation
.
|
(a)
|
Rounding Performance Calculations
. The calculation of actual performance for each performance measure in the Incentive Award Formula shall be rounded to the nearest decimal place consistent with the number of decimal places approved by the Committee at the time it set the relevant target, rounding up in the case of 5 or more and rounding down in the case of 4 or less.
|
(b)
|
Interpolation
. Interpolation will be used to determine an Incentive Award for performance that correlates to performance between the pre-determined Segment EBITDA, Total EBITDA and Cash Flow Performance Goals. The interpolated payout percentages for Segment EBITDA, Total EBITDA and Cash Flow shall be rounded independently to the nearest whole percentage point, rounding up in the case of 5 or more and rounding down in the case of 4 or less.
|
(c)
|
Maximum award
. No one Participant may receive more than $20 million in Incentive Awards for any one calendar year, as provided in the Plan.
|
B.
|
Form of Payout
.
|
(1)
|
Cash and/or Common Stock
. The Committee may determine to pay the awards in the form of cash or common stock, or any combination thereof, which determination may be made on a non-uniform basis among Participants.
|
(2)
|
Common Stock Awards
. The determination to pay awards in the form of common stock shall be a determination to satisfy the award through shares available under the 2005 Stock Incentive Plan (or any successor plan thereto), subject to the terms and conditions of such plan, and
provided
that the performance period under this Program shall also count toward any minimum performance period required for an unrestricted grant of shares under such plan.
|
(3)
|
Award Unit Determination Procedure
. If the Committee determines to pay all or a portion of an award in the form of common stock, the value of such award, or portion thereof, under this Program shall be converted into a number of shares of common stock by dividing (i) the value of such award, or portion thereof, by (ii) the Common Stock Unit Value, which is to be determined as follows:
|
(a)
|
Common Stock Unit Value
. The Common Stock Unit Value shall be equal to the Fair Market Value (as defined in the 2005 Stock Incentive Plan, or any successor plan thereto) of a share of common stock on the date of award (Date of Award). The Date of Award shall be established prospectively by the Committee at the time it determines the award, with the goal of setting the date close in proximity to the related payroll processing date for awards under the Plan. Unless otherwise established by the Committee, the Date of Award shall be the day prior to the date the Corporation files its report on Form 10-K with the Securities and Exchange Commission for the period ending on the last date of the relevant Performance Period.
|
(4)
|
Netting of Common Stock Shares
. To the extent permitted under the 2005 Stock Incentive Plan and unless otherwise determined by the Committee or an election with respect to a different medium of payment is offered to and elected by a Participant in accordance with procedures approved by the Company, the shares of common stock delivered in connection with any common stock award under this Program shall be net of any tax withholding obligation.
|
8.
|
Timing of Payments
. Unless otherwise determined by the Committee in its discretion, payment of Annual Incentive Compensation, if any, under this Program with respect to any Performance Period will be paid following the Committee’s determination of such Incentive Award and following the date the Corporation files its report on Form 10-K with the Securities and Exchange Commission for the period ending on the last date of relevant Performance Period;
provided
, however, the payment of any such award shall be paid on or before March 15 of the year following the end of the relevant calendar year Performance Period and as provided in Section 6 of the Plan.
|
9.
|
Termination of Employment
. The following provisions apply in the case of a Participant’s termination of employment during the Performance Period:
|
A.
|
Retirement, Death, or Disability
. Following a Participant’s Retirement, Death or Disability, a prorated value of such Participant’s Award may be awarded by the Committee based upon the base salary earned during the Performance Period;
provided
that (i) such Award is calculated and delivered following the relevant Performance Period in accordance with the terms of the Plan, (ii) the relevant Threshold Corporation Performance Goal and other performance goals are achieved, (iii) the Participant is employed for a minimum period of time determined by the Committee and (iv) the Committee retains its negative discretion with respect to such awards.
|
(1)
|
Retirement
. Retirement shall mean, for all purposes under the Program, the applicable Participant’s termination of employment that constitutes a separation from service under Section 409A of the Code after having satisfied the age, service and/or other requirements necessary to commence an immediate pension under either: (i) the applicable defined benefit pension plan for the Participant’s home country, regardless of whether the Participant is a participant in such pension plan, or (ii) in the case of a home country for which there is no applicable defined benefit plan, the applicable local law or regulation;
provided
, however, such term does not include, unless the Committee consents with knowledge of the specific facts, retirement under circumstances in which the Participant accepts employment with a company that owns, or is owned by, a business that competes with the Corporation, or its Subsidiaries or affiliates. Further, to the extent necessary under applicable local law, Retirement may have such other meaning adopted by the Committee and set forth in the applicable Award notice.
|
B.
|
Resignation, Early Retirement and Other Termination
. Following a Participant’s Resignation, Early Retirement or other termination, all pending Incentive Awards are forfeited.
|
(1)
|
Early Retirement
. Early Retirement shall mean a retirement other than a Retirement.
|
10.
|
Forfeiture and Repayment
. The Committee may determine that an Incentive Award shall be forfeited and/or any value received from the Incentive Award shall be repaid to the Corporation pursuant to any recoupment policies, rules or regulations in effect at the time of the Incentive Award.
|
1.
|
the product of the Member’s monthly base salary that, on a year-to-date basis, is in excess of the Code section 401(a)(17) annual compensation limit for the year, multiplied by the applicable age-weighted crediting rate in effect for the Member, as shown below:
|
Age at Beginning of Month
|
Crediting Rate under Program
|
Less than 35 years
|
4.75%
|
35 to less than 40
|
6.00%
|
40 to less than 45
|
7.25%
|
45 and above
|
8.50%
|
2.
|
the amount of Retirement Account contribution which could not be contributed to the Savings Plans as a result of the applicable limit under Code section 415(c).
|
a.
|
Lump Sum Distribution and Annuity Option for Benefits Accruing Through August 31, 2013
|
b.
|
Annuity Distribution and Lump Sum Option for Benefits Accruing On and After September 1, 2013
|
d. |
Full and Final Settlement
|
e.
|
Termination of Employment
|
(a)
|
save on both a pre-tax and after-tax basis under either of the Plans at a rate at least equal to the maximum rate of matching Company contributions applicable to his service is restricted by law (including the limitations under Code sections 401(a)(17), 401(k), 402(g), and 415), or
|
(b)
|
save on an after-tax basis under either of the Plans at a rate at least equal to the maximum rate of matching Company contributions applicable to his service is restricted by Code section 401(m),
|
Continuous Service
|
Crediting Rate under Program
|
1 month but less than 10 years
|
5.0%
|
10 years but less than 15 years
|
5.5%
|
15 years and over
|
6.0%
|
a.
|
Lump Sum Distribution and Annuity Option for Benefits Accruing Through August 31, 2013
|
1.
|
Effective January 1, 2005, subject to section 4.c. below, with respect to benefits accrued from January 1, 2005 through August 31, 2013, a Member shall receive a lump sum distribution of the benefits payable under this Program upon the Member’s (a) termination of employment with the Corporation with five or more years of continuous service, (b) termination of employment with the Corporation prior to attaining five years of continuous service with the consent of the Corporation, or (c) death prior to termination of employment with the Corporation. Except as provided in section 5.e., benefits provided by this Program shall be paid by the Corporation in cash out of the general assets of the Corporation. The payment date shall be on the last business day of the calendar month following the month in which such termination of employment occurred. Effective February 28, 2009, Members who retire under the 2009 Voluntary Early Retirement Program will be treated as having Company consent to retire even if they have not attained the five-year vesting requirement under this Program at retirement.
|
2.
|
Notwithstanding the form of payment specified in paragraph 1, with respect to benefits accrued from January 1, 2005 through August 31, 2013, and subject to section 4.c. below, a Member may irrevocably elect to receive such benefits payable in the form of a single life annuity. An election may not become effective for 12 months from the date on which it is made, and such election must be submitted to the Corporation more than 12 months prior to the date the benefits are otherwise scheduled to be paid. In addition, the payment date elected for the commencement of monthly annuity installment payments must be deferred for a minimum of five years from the date such benefits would otherwise have been paid. The Member shall also have the right to elect among actuarially equivalent life annuity forms of payment, which election may be made at any time when the Member has made a valid election to receive an annuity form of payment.
|
3.
|
In the event a Member dies prior to termination of employment, the benefits will be paid to the Member’s surviving spouse (or to the Member’s estate, if there is no surviving spouse) in the form of a lump sum distribution. The payment date shall be on the last business day of the calendar month following the month in which such death occurred.
|
4.
|
In the event a Member dies after termination of employment but prior to receiving the benefits credited to his account under the Program, the benefits will be paid to the Member’s surviving spouse (or to the Member’s estate, if there is no surviving spouse) in the form of a lump sum distribution on the last business day of the calendar month following the month in which the Member’s termination of employment occurred.
|
b.
|
Annuity Distribution and Lump Sum Option for Benefits Accruing On and After September 1, 2013
|
1.
|
Effective January 1, 2005, subject to section 4.c. below, with respect to benefits accrued on and after September 1, 2013, a Member shall receive a distribution of the benefits payable under this Program in the form of a single life annuity upon the Member’s (a) termination of employment with the Corporation with five or more years of continuous service, (b) termination of employment with the Corporation prior to attaining five years of continuous service with the consent of the Corporation, or (c) death prior to termination of employment with the Corporation. Except as provided in section 5.e., benefits provided by this Program shall be paid by the Corporation in cash out of the general assets of the Corporation. The payment date for commencement of annuity installment payments shall be on the first regularly scheduled payroll date of the second calendar month following the month in which such termination of employment occurred.
|
2.
|
Notwithstanding the foregoing specified form of payment, with respect to benefits that may accrue on and after September 1, 2013, and subject to section 4.c. below, an employee may receive such benefits in the form of a lump sum payment on the last business day of the calendar month following the month in which termination of employment occurred, provided the employee makes a timely benefit election. For employees in the Program on July 31, 2013, a one‑time irrevocable election to receive a lump sum payment must be made prior to September 1, 2013 in order to be valid. For
|
3.
|
In the event a Member dies prior to termination of employment, the benefits will be paid to the Member’s surviving spouse (or to the Member’s estate, if there is no surviving spouse) in the form of a lump sum distribution. The payment date shall be on the last business day of the calendar month following the month in which such death occurred.
|
4.
|
In the event a Member dies after termination of employment but prior to receiving the benefits credited to his account under the Program, the benefits will be paid to the Member’s surviving spouse (or to the Member’s estate, if there is no surviving spouse) in the form of a lump sum distribution on the last business day of the calendar month following the month in which the Member’s termination of employment occurred.
|
d.
|
Full and Final Settlement
|
e. |
Termination of Employment
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United States Steel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 2, 2016
|
|
/s/ Mario Longhi
|
|
|
Mario Longhi
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United States Steel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 2, 2016
|
|
/s/ David B. Burritt
|
|
|
David B. Burritt
|
|
|
Executive Vice President
|
|
|
and Chief Financial Officer
|
(1)
|
The Quarterly Report on Form 10-Q of United States Steel Corporation for the period ending
September 30, 2016
, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the foregoing report fairly presents, in all material respects, the financial condition and results of operations of United States Steel Corporation.
|
/s/ Mario Longhi
|
Mario Longhi
|
President and Chief Executive Officer
|
(1)
|
The Quarterly Report on Form 10-Q of United States Steel Corporation for the period ending
September 30, 2016
, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the foregoing report fairly presents, in all material respects, the financial condition and results of operations of United States Steel Corporation.
|
/s/ David B. Burritt
|
David B. Burritt
|
Executive Vice President
|
and Chief Financial Officer
|
Mine (Federal Mine Safety and
Health Administration (MSHA) ID)
|
Total # of
Significant &
Substantial
violations
under
§104(a)
(a)
|
|
Total # of
orders
under
§104(b)
(a)
|
|
Total # of
unwarrantable
failure
citations and
orders under
§104(d) (a) |
|
Total # of
violations
under
§110(b)(2)
(a)
|
|
Total # of
orders
under
§107(a)
(a)
|
|
Total dollar
value of
proposed
assessments
from
MSHA
|
|
Total # of
mining
related
fatalities
|
|
Received
Notice of
Pattern of
Violations
under
§104(e)
(a)
(yes/no)?
|
|
Received Notice
of Potential to
have Pattern
under
§104(e)
(a)
(yes/no)?
|
|
Total # of Legal
Actions Pending
with the Mine
Safety and
Health Review
Commission as
of Last Day of
Period (b) |
|
Legal
Actions
Initiated
During
Period
|
|
Legal
Actions
Resolved
During
Period
|
|
Mt. Iron
(2100820, 2100282)
|
13
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$16,140
|
|
—
|
|
no
|
|
no
|
|
50
|
|
11
|
|
115
|
Keewatin
(2103352)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
no
|
|
no
|
|
1
|
|
—
|
|
13
|
(a)
|
References to Section numbers are to sections of the Federal Mine Safety and Health Act of 1977.
|
(b)
|
Includes all legal actions pending before the Federal Mine Safety and Health Review Commission, together with the Administrative Law Judges thereof, for each of our iron ore operations. These actions may have been initiated in prior quarters. All of the legal actions were initiated by us to contest citations, orders or proposed assessments issued by the Federal Mine Safety and Health administration, and if we are successful, may result in the reduction or dismissal of those citations, orders or assessments. As of the last day of the period, all 168 legal actions were to contest citations and proposed assessments.
|