SEGMENT REPORTING

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 4 - 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:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Revenues:
Steelmaking	$	5,443	$	5,511	$	16,377	$	17,481
Other Businesses	162		142		507		464
Total revenues	$	5,605	$	5,653	$	16,884	$	17,945
Adjusted EBITDA:
Steelmaking	$	603	$	447	$	1,608	$	2,980
Other Businesses	9		9		32		58
Eliminations	2		7		(8)		8
Total Adjusted EBITDA	$	614	$	463	$	1,632	$	3,046

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Net income	$	275	$	165	$	589	$	1,580
Less:
Interest expense, net	(70)		(64)		(226)		(205)
Income tax expense	(29)		(10)		(118)		(404)
Depreciation, depletion and amortization	(249)		(237)		(738)		(788)
	623		476		1,671		2,977
Less:
EBITDA of noncontrolling interests1	20		22		60		57
Gain (loss) on extinguishment of debt	—		4		—		(76)
Asset impairment	—		—		—		(29)
Other, net	(11)		(13)		(21)		(21)
Total Adjusted EBITDA	$	614	$	463	$	1,632	$	3,046
1 EBITDA of noncontrolling interests includes the following:
Net income attributable to noncontrolling interests	$	11	$	13	$	35	$	31
Depreciation, depletion and amortization	9		9		25		26
EBITDA of noncontrolling interests	$	20	$	22	$	60	$	57

The following summarizes our assets by segment:

(In millions)	September 30, 2023		December 31, 2022
Assets:
Steelmaking	$	17,481	$	18,070
Other Businesses	819		836
Intersegment eliminations	(531)		(521)
Total segment assets	17,769		18,385
Corporate	290		370
Total assets	$	18,059	$	18,755

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Depreciation, depletion and amortization:
Steelmaking	$	(241)	$	(227)	$	(711)	$	(758)
Other Businesses	(8)		(10)		(27)		(30)
Total depreciation, depletion and amortization	$	(249)	$	(237)	$	(738)	$	(788)
Capital additions1:
Steelmaking	$	217	$	240	$	503	$	712
Other Businesses	—		6		3		21
Corporate	1		1		2		3
Total capital additions	$	218	$	247	$	508	$	736
1 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for additional information.