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Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.22.2
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract] Ìý
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
June 30,		 Six Months Ended
June 30,
2022 2021 2022 2021
Revenues:
Steelmaking $ 6,176Ìý $ 4,922Ìý $ 11,970Ìý $ 8,841Ìý
Other Businesses 161Ìý 123Ìý 322Ìý 253Ìý
Total revenues $ 6,337Ìý $ 5,045Ìý $ 12,292Ìý $ 9,094Ìý
Adjusted EBITDA:
Steelmaking $ 1,108Ìý $ 1,360Ìý $ 2,531Ìý $ 1,862Ìý
Other Businesses 20Ìý 8Ìý 49Ìý 19Ìý
Eliminations1
2Ìý (8) 1Ìý (8)
Total Adjusted EBITDA $ 1,130Ìý $ 1,360Ìý $ 2,581Ìý $ 1,873Ìý
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
June 30,		 Six Months Ended
June 30,
2022 2021 2022 2021
Net income $ 601Ìý $ 795Ìý $ 1,415Ìý $ 852Ìý
Less:
Interest expense, net (64) (85) (141) (177)
Income tax expense (157) (216) (394) (225)
Depreciation, depletion and amortization (250) (208) (551) (425)
1,072Ìý 1,304Ìý 2,501Ìý 1,679Ìý
Less:
EBITDA of noncontrolling interests1
13Ìý 21Ìý 35Ìý 43Ìý
Asset impairment —Ìý —Ìý (29) —Ìý
Loss on extinguishment of debt (66) (22) (80) (88)
Severance costs (6) (1) (7) (12)
Acquisition-related costs excluding severance costs —Ìý —Ìý (1) (2)
Acquisition-related loss on equity method investment —Ìý (18) —Ìý (18)
Amortization of inventory step-up —Ìý (37) —Ìý (118)
Impact of discontinued operations 1Ìý 1Ìý 2Ìý 1Ìý
Total Adjusted EBITDA $ 1,130Ìý $ 1,360Ìý $ 2,581Ìý $ 1,873Ìý
1 EBITDA of noncontrolling interests includes the following:
Net income attributable to noncontrolling interests $ 5Ìý $ 15Ìý $ 18Ìý $ 31Ìý
Depreciation, depletion and amortization 8Ìý 6Ìý 17Ìý 12Ìý
EBITDA of noncontrolling interests $ 13Ìý $ 21Ìý $ 35Ìý $ 43Ìý
The following summarizes our assets by segment:
(In Millions)
June 30,
2022		 December 31,
2021
Assets:
Steelmaking $ 19,259Ìý $ 18,326Ìý
Other Businesses 322Ìý 306Ìý
Total segment assets 19,581Ìý 18,632Ìý
Corporate/Eliminations 458Ìý 343Ìý
Total assets $ 20,039Ìý $ 18,975Ìý
The following table summarizes our capital additions by segment:
(In Millions)
Three Months Ended
June 30,		 Six Months Ended
June 30,
2022 2021 2022 2021
Capital additions1:
Steelmaking $ 297Ìý $ 146Ìý $ 472Ìý $ 279Ìý
Other Businesses 9Ìý 21Ìý 15Ìý 32Ìý
Corporate 2Ìý —Ìý 2Ìý 18Ìý
Total capital additions $ 308Ìý $ 167Ìý $ 489Ìý $ 329Ìý
1 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for additional information.