SEGMENT REPORTING

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 5 - SEGMENT REPORTING

We are vertically integrated from mined raw materials and direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing. We are organized into four operating segments based on our differentiated products – Steelmaking, Tubular, Tooling and Stamping, and European Operations. We have one reportable segment – Steelmaking. The operating segment results of our Tubular, Tooling and Stamping, and European Operations that do not constitute reportable segments are combined and disclosed in the Other Businesses category. Our Steelmaking segment operates as the largest flat-rolled steel producer supported by being the largest iron ore pellet producer as well as a leading prime scrap processor in North America, primarily serving the automotive, distributors and converters, and infrastructure and manufacturing markets. Our Other Businesses primarily include the operating segments that provide customer solutions with carbon and stainless steel tubing products, advanced-engineered solutions, tool design and build, hot- and cold-stamped steel components, and complex assemblies. All intersegment transactions were eliminated in consolidation.

We evaluate performance on an operating segment basis, as well as a consolidated basis, based on Adjusted EBITDA, which is a non-GAAP measure. This measure is used by management, investors, lenders and other external users of our financial statements to assess our operating performance and to compare operating performance to other companies in the steel industry. In addition, management believes Adjusted EBITDA is a useful measure to assess the earnings power of the business without the impact of capital structure and can be used to assess our ability to service debt and fund future capital expenditures in the business.

Our results by segment are as follows:

	(In Millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Steelmaking	$	5,511	$	5,869	$	17,481	$	14,710
Other Businesses	142		135		464		388
Total revenues	$	5,653	$	6,004	$	17,945	$	15,098
Adjusted EBITDA:
Steelmaking	$	436	$	1,934	$	2,967	$	3,796
Other Businesses	9		6		58		25
Eliminations1	7		(7)		8		(15)
Total Adjusted EBITDA	$	452	$	1,933	$	3,033	$	3,806
1 In 2022, we began allocating Corporate SG&A to our operating segments. Prior periods have been adjusted to reflect this change. The Eliminations line now only includes sales between segments.

The following table provides a reconciliation of our consolidated Net income to total Adjusted EBITDA:

	(In Millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	165	$	1,282	$	1,580	$	2,134
Less:
Interest expense, net	(64)		(81)		(205)		(258)
Income tax expense	(10)		(334)		(404)		(559)
Depreciation, depletion and amortization	(237)		(239)		(788)		(664)
	476		1,936		2,977		3,615
Less:
EBITDA of noncontrolling interests1	22		17		57		60
Asset impairment	—		—		(29)		—
Gain (loss) on extinguishment of debt	4		—		(76)		(88)
Severance costs	(2)		(3)		(9)		(15)
Acquisition-related costs excluding severance costs	—		(1)		(1)		(3)
Acquisition-related loss on equity method investment	—		—		—		(18)
Amortization of inventory step-up	—		(11)		—		(129)
Impact of discontinued operations	—		1		2		2
Total Adjusted EBITDA	$	452	$	1,933	$	3,033	$	3,806
1 EBITDA of noncontrolling interests includes the following:
Net income attributable to noncontrolling interests	$	13	$	8	$	31	$	39
Depreciation, depletion and amortization	9		9		26		21
EBITDA of noncontrolling interests	$	22	$	17	$	57	$	60

The following summarizes our assets by segment:

	(In Millions)
	September 30, 2022		December 31, 2021
Assets:
Steelmaking	$	18,843	$	18,326
Other Businesses	313		306
Total segment assets	19,156		18,632
Corporate/Eliminations	532		343
Total assets	$	19,688	$	18,975

The following table summarizes our depreciation, depletion and amortization and capital additions by segment:

	(In Millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Depreciation, depletion and amortization:
Steelmaking	$	(227)	$	(230)	$	(758)	$	(637)
Other Businesses	(10)		(9)		(30)		(27)
Total depreciation, depletion and amortization	$	(237)	$	(239)	$	(788)	$	(664)
Capital additions1:
Steelmaking	$	240	$	233	$	712	$	512
Other Businesses	6		10		21		42
Corporate	1		—		3		18
Total capital additions	$	247	$	243	$	736	$	572
1 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for additional information.