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Item 1A. Risk Factors

2025-02-25 compared with 2024-02-08 · 183 added, 135 removed, 247 unchanged (56% of the section changed)

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We describe below certain risks and uncertainties, the occurrences of which could have a material adverse effect on us.

The risks and uncertainties described below include known material risks that we face currently, but our material risks are constantly evolving, and the below descriptions may not include future risks that are not presently known, that are not currently believed to be material or that are common to all businesses.

Investors should not interpret the disclosure of any risk to imply that such risk has not already materialized.

The risks and uncertainties described below include known material risks that we face currently, but our material risks are continually evolving, and the below descriptions may not include future risks that are not presently known, risks that are not currently believed to be material or risks that generally apply to most businesses.

Although we have extensive risk management policies, practices and procedures in place that are aimed at mitigating these risks, the occurrence of these uncertainties may nevertheless impair our business operations and adversely affect the actual outcome of matters as to which forward-looking statements are made.

This report is qualified in its entirety by these risk factors.

Before making an investment decision, investors should carefully consider all of the risks described below together with the other information included in this report and the other reports we file with the SEC.

Before making an investment decision, investors should carefully consider all the risks described below together with the other information included in this report and the other reports we file with the SEC.

Management has identified several categories of material risks that we are subject to, including:

(I) economic and market, (II) regulatory, (III) financial, (IV) operational, (V) sustainability and development and (VI) human capital.

(I) economic and market;

(II) regulatory;

(III) financial;

(IV) operational;

(V) sustainability and development;

and (VI) human capital.

Although we have organized the risks by these headings and we have discussed each risk separately, many of the risks are interrelated.

ECONOMIC AND MARKET RISKS

The volatility of commodity prices, including steel, iron ore and scrap metal, directly and indirectly affects our ability to generate revenue, maintain stable cash flows and fund our operations.

Our profitability is dependent upon the historically volatile market prices of steel, iron ore and scrap metal.

We experience direct impacts of steel price fluctuations through customer sales, as well as direct and indirect impacts of iron ore and scrap metal price fluctuations through third-party sales and the impacts that movements in iron ore and scrap metal prices have on steel prices.

As described elsewhere in this report, the prices of steel, iron ore and scrap metal have fluctuated significantly in the recent past, and these pricing shifts are unpredictable and affected by factors beyond our control, including:

The volatility of commodity prices, including steel, scrap metal and iron ore, directly and indirectly affects our ability to generate revenue, maintain stable cash flows and fund our operations.

Our profitability is dependent upon the historically volatile market prices of steel, scrap metal and iron ore.

We experience direct impacts of steel price fluctuations through customer sales, as well as direct and indirect impacts of scrap metal and iron ore price fluctuations through third-party sales and the impacts that movements in scrap metal and iron ore prices have on steel prices.

As described elsewhere in this report, the prices of steel, scrap metal and iron ore have fluctuated significantly in the recent past, and these pricing shifts are unpredictable and affected by factors beyond our control, including:

international demand for, and the impact of higher rates of inflation on, raw materials used in steel production;

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volumes of unfairly traded imports;

imposition or termination of duties, tariffs, import and export controls and other trade barriers impacting the steel and iron ore markets;

climate change and other weather-related disruptions, infectious disease outbreaks, such as the COVID-19 pandemic, or natural disasters that may impact the global supply of steel, iron ore or scrap metal;

imposition or termination of duties or tariffs, including tariffs and retaliatory tariffs that have recently been and may in the future be instituted following the recent change in U.S.

presidential administrations, which among other things may affect our cross-border shipments, import and export controls, and other trade barriers impacting the steel and iron ore markets;

climate change and other weather-related disruptions, infectious disease outbreaks or natural disasters that may impact the global supply of steel, scrap metal or iron ore;

and the proximity, capacity and cost of infrastructure and transportation.

Our revenues, therefore, vary in accordance with the prices of the products we sell.

During 2023, for example, we experienced lower average selling prices for our steel products as compared to 2022 due to the impact from lower index pricing, which resulted in lower revenues despite increased sales volumes.

During 2024, for example, we experienced lower average selling prices for our steel products as compared to 2023 due to the impact from lower index pricing, which resulted in lower revenues.

In addition, we had lower sales volumes in 2024, which also contributed to lower revenues.

To the extent that commodity prices, including the HRC price, coated and other specialty steel prices, international steel prices and scrap metal prices, significantly decline for an extended period, we may have to further revise our operating plans, including curtailing production, reducing operating costs and deferring capital expenditures.

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Moreover, despite our position as the largest flat-rolled steel producer in North America, competition for automotive business has intensified in recent years, as steel producers and companies producing alternative materials have focused their efforts on capturing and/or expanding their market share of automotive business because of less favorable conditions in other markets for steel and other metals, including commodity products.

As a result, the potential exists that we may lose market share to existing or new entrants or that automotive manufacturers will take advantage of the intense competition among potential suppliers during periodic contract renewal negotiations to pressure our pricing and margins in order to maintain or expand our market share with them, which could negatively affect our revenues, financial results and cash flows.

Global steelmaking overcapacity, steel imports and oversupply of iron ore could lead to lower or more volatile global steel and iron ore prices, directly or indirectly impacting our profitability.

Moreover, despite our position as a leading North America-based flat-rolled steel producer, competition for automotive business has intensified in recent years, as steel producers and companies producing alternative materials have focused their efforts on capturing and/or expanding their market share of automotive business because of less favorable conditions in other markets for steel and other metals, including commodity products.

As a result, the potential exists that we may lose market share to existing or new entrants or that automotive manufacturers will take advantage of the intense competition among potential suppliers during periodic contract renewal negotiations to pressure our pricing and margins in order for us to maintain or expand our market share with them, which could negatively affect our revenues, financial results and cash flows.

Global steelmaking overcapacity and overproduction, steel imports, and oversupply of iron ore could lead to lower or more volatile global steel and iron ore prices, directly or indirectly impacting our profitability.

Significant existing global steel capacity and new or expanded production capacity in recent years could potentially cause capacity to exceed demand globally.

Although certain of our U.S.

competitors have shut down production capacity, certain of our competitors have announced and are moving ahead with plans to develop new steelmaking capacity in the near term.

In addition, certain foreign competitors, which may have cost advantages due to being owned, controlled or subsidized by foreign governments, have substantially increased their steel production capacity in the last few years and in some instances appear to have targeted the U.S.

Although certain American steel producers have shut down production capacity, certain of our competitors have announced and are moving ahead with plans to develop new steelmaking capacity in the near term.

In addition, certain foreign competitors, which may have cost advantages due to being owned, controlled or subsidized by foreign governments, have substantially increased their steelmaking capacity and/or production in the last few years and in some instances appear to have targeted the U.S.

market for imports.

The risk of even greater levels of imports may continue, depending upon foreign market and economic conditions, changes in trade agreements and treaties, laws, regulations or government policies affecting trade, the ability of foreign producers to circumvent U.S.

trade sanctions and policy (including in the markets for tin mill products and electrical steels), the value of the U.S.

trade sanctions and policy (including in the markets for electrical steels), the value of the U.S.

dollar relative to other currencies and other variables beyond our control.

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Some of our customers are highly leveraged.

If there is a significant weakening of current economic conditions, whether because of operational, cyclical, supply chain or other issues, including inflationary pressures, higher interest rates or an infectious disease outbreak, it could cause customers to reduce, delay or cancel their orders with us, impact significantly the creditworthiness of our customers, and lead to other financial difficulties or even bankruptcy filings by our customers.

If there is a sustained weakening of current economic conditions, whether because of operational, cyclical, supply chain or other issues, including inflationary pressures, higher interest rates or an infectious disease outbreak, it could cause customers to reduce, delay or cancel their orders with us, impact significantly the creditworthiness of our customers, and lead to other financial difficulties or even bankruptcy filings by our customers.

Failure to receive payment from our customers for products that we have delivered could adversely affect our results of operations, financial condition and liquidity.

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Such events could cause us to experience lost sales or losses associated with the potential inability to collect all outstanding accounts receivable as well as reduced liquidity.

Similarly, if our key vendors face financial hardship or need to operate in bankruptcy, as we experienced with one of our major steel mill slag services providers during 2022-2023, such vendors could suffer operational disruption or even face liquidation, which could result in such vendor defaulting on its obligations to us or in our inability to secure replacement materials or services on a timely basis, or at all, or cause us to incur increased costs to do so.

Similarly, certain of our key vendors have recently suffered, and from time to time may continue to suffer, financial hardship, including bankruptcy.

Such vendors could face operational disruption or even be forced to liquidate, which could result in such vendors defaulting on their obligations to us or in our inability to secure replacement materials or services on a timely basis, or at all, or cause us to incur increased costs to do so.

Such events could adversely impact our continuity of operations, financial results and cash flows.

REGULATORY RISKS

government actions on trade agreements and treaties, laws, regulations, or policies affecting trade could lead to lower or more volatile global steel prices, impacting our profitability.

government actions and other countries’ reactions in respect of trade agreements and treaties, laws, regulations, or policies affecting trade could lead to lower or more volatile global steel prices, impacting our profitability.

In recent years, the U.S.

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presidential election, negotiations between the U.S.

government and other governments have resulted in revisions to these measures.

government and other governments resulted in revisions to these measures.

For example, the U.S.

government agreed to modified tariff rate quota systems with each of the European Union, Japan and the United Kingdom that allow more imports from those trading partners to enter the U.S.

government agreed to modified tariff rate quota systems with each of the European Union, Japan and the United Kingdom that allowed more imports from those trading partners to enter the U.S.

market free of Section 232 tariffs.

government may also negotiate reductions or eliminations of Section 232 duties with other trading partners.

If the Section 232 measures are further removed or substantially lessened, whether through legal challenge, legislation, executive action or otherwise, imports of foreign steel would likely increase and steel prices in the U.S.

However, in early 2025, the U.S.

government announced that the 25% Section 232 tariffs on steel imports would be re-imposed without exemptions and exclusions, beginning in March 2025.

Even so, as has occurred in the past, the U.S.

government may later determine to negotiate exemptions and exclusions from Section 232 tariffs with certain trading partners.

And if the Section 232 measures are removed, modified or substantially weakened, whether through legal challenge, legislation, further executive action or otherwise, imports of foreign steel would likely increase and steel prices in the U.S.

would likely fall, which could materially adversely affect our revenues, financial results and cash flows.

In addition, during 2020, the USMCA was implemented among the U.S., Mexico and Canada in place of the North American Free Trade Agreement.

Because all of our steel manufacturing facilities are located in North America and one of our principal markets is automotive manufacturing in North America, we believe that the USMCA has the potential to positively impact our business by incentivizing automakers and other manufacturers to increase manufacturing production in North America and to use North

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American steel.

However, it is difficult to predict the short- and long-term implications of changes in trade policy and, therefore, whether the USMCA or other new or renegotiated trade agreements, treaties, laws, regulations or policies that may be implemented by the U.S.

In addition, during 2020, the USMCA was implemented among the U.S., Mexico and Canada in place of the North American Free Trade Agreement.

Because all our steel manufacturing facilities are located in North America and one of our principal markets is automotive manufacturing in North America, we believe that the USMCA has the potential to positively impact our business by incentivizing automakers and other manufacturers to increase manufacturing production in North America and to use North American steel.

However, it is difficult to predict the implications of changes in trade policy and, therefore, whether the USMCA or other new or renegotiated trade agreements, treaties, laws, regulations or policies that may be implemented by the U.S.

government, or otherwise, will have a beneficial or detrimental impact on our business and our customers’ and suppliers’ businesses.

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While we may currently benefit from certain antidumping and countervailing duty orders, any such relief is subject to periodic reviews and challenges, which can result in revocation or modification of the orders or reduction of the duties.

During 2022 and 2023, the U.S.

International Trade Commission reviewed and continued antidumping and countervailing duty orders covering imports from several major trading partners of some of our key products, including corrosion-resistant steel, cold-rolled steel, hot-rolled steel and cut-to-length plate.

However, previously granted petitions for trade relief may not be successful or fully effective at preventing harm from dumped and subsidized imports.

Currently, there are ongoing antidumping and countervailing duty investigations involving imports of corrosion-resistant steel into the U.S.

from various countries, including Canada, Mexico, Brazil, Australia, the Netherlands, South Korea, Taiwan, Turkey, Vietnam and the United Arab Emirates.

The outcomes of those investigations are uncertain and could adversely affect the competitiveness and viability of our U.S.

and/or Canadian corrosion-resistant steel businesses.

Following the recent change in U.S.

presidential administrations, the U.S.

government may seek to alter the USMCA and has imposed and may in the future impose new or additional tariffs on goods imported into the U.S.

(including steel or critical production inputs), which has led to and could in the future lead to other countries imposing or threatening to impose retaliatory tariffs on exports of American-made products (including steel) to those countries or other retaliatory efforts, such as restricting exports of critical production inputs to the U.S.

In addition, previously granted petitions for trade relief may not be successful or fully effective at preventing harm from subsidized and dumped imports into the U.S.

Any of these actions and their direct and indirect impacts could materially adversely affect our revenues, financial results and cash flows.

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This includes, among other things:

changes in MSHA regulations, such as respirable silica standards and surface mobile equipment rules;

reevaluation of the National Ambient Air Quality Standards, such as revised nitrogen dioxide, sulfur dioxide, lead, ozone and particulate matter criteria;

changes in the interpretation of OSHA regulations, such as standards for occupational exposure to noise, certain chemicals or hazardous substances, infectious diseases and potentially hazardous machinery;

and changes in tax laws and regulations, including the possible taxation under U.S.

• changes in, and enforcement of, MSHA regulations, such as respirable silica standards and surface mobile equipment rules;

• evaluation of the National Ambient Air Quality Standards, such as revised nitrogen dioxide, sulfur dioxide, lead, ozone and particulate matter criteria;

• changes in the interpretation of OSHA regulations, such as standards for occupational exposure to noise, ergonomics, protection from chemicals or hazardous substances, infectious diseases, heat stress and potentially hazardous machinery;

• changes in tax laws and regulations, including the possible taxation under U.S.

or foreign country laws of certain income from worldwide operations.

We and our operations are subject to various international, foreign, federal, state, provincial and local laws and regulations relating to protection of the environment and human health and safety, including those relating to air quality, water quality and conservation, plant, wetlands, natural resources and wildlife protection (including endangered or threatened species), reclamation, remediation and restoration of properties and related surety bonds or other financial assurances, land use, the discharge of materials into the environment, the effects that industrial operations and mining have on groundwater quality and availability, the management of electrical equipment containing polychlorinated biphenyls, and other related matters.

Our operations are subject to various laws and regulations relating to protection of the environment and human health and safety, including those relating to:

• air quality, water quality and conservation;

• plant, wetlands, natural resources and wildlife protection (including endangered or threatened species);

• reclamation, remediation and restoration of properties and related surety bonds or other financial assurances;

• the discharge of materials into the environment;

• the effects that industrial operations and mining have on groundwater quality and availability, such as the potential effects of laws or regulations related to per-and polyfluoroalkyl substances (“PFAS”).

Despite implementation of rigorous environmental protocols and management systems, we cannot be certain that we have been or will be at all times in complete compliance with all such laws and regulations.

If we violate or fail to comply with these laws or regulations, we could be fined, required to cease operations, subject to criminal or civil liability, or otherwise sanctioned by regulators or barred from participating in government contracts.

In addition, federal or state regulatory agencies have the authority to order a mine or production facility to be temporarily or permanently closed where imminent danger that could cause death or serious physical harm is perceived.

If we violate or fail to comply with these laws or regulations, we could be fined, required to retrofit or cease operations, subject to criminal or civil liability, or otherwise sanctioned by regulators or barred from participating in government contracts.

In addition, regulatory agencies have the authority to order a mine or production facility to be temporarily or permanently closed where imminent danger that could cause death or serious physical harm is perceived.

Compliance with the complex and extensive laws and regulations to which we are subject imposes substantial costs on us, which could increase over time because of heightened regulatory oversight, adoption of more stringent environmental, health and safety standards and greater demand for remediation services leading to shortages of equipment, supplies and labor, as well as other factors.

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Specifically, there are several notable proposed or recently enacted rulemakings or activities to which we would be subject or that would further regulate and/or tax us and our customers, which may also require us or our customers to reduce or otherwise change operations significantly or incur significant additional costs, potentially limiting our ability to produce our raw materials and products, depending on their ultimate outcome.

These emerging or recently enacted rules, regulations and policy guidance include, but are not limited to:

trade regulations, such as the USMCA and/or other trade agreements, treaties or policies;

changes in tariff policy, including with respect to the 25% tariff on certain imported steel imposed under Section 232;

• trade regulations, trade agreements, treaties or related policies;

• changes in tariff policy, including with respect to the 25% tariff on certain imported steel imposed under Section 232, and including the new or additional tariffs recently imposed by the U.S.

government on Canada, China and Mexico and the retaliatory tariffs that have already been, or may in the future be, imposed in response to such tariffs;

• revised National Emission Standards for Hazardous Air Pollutants in the taconite, integrated iron and steel, and coke sectors;

• climate change mitigation strategies and GHG regulation;

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• revisions to the sulfate wild rice water quality standard and its implementation;

Minnesota’s Mercury TMDL and associated federal rules governing mercury air emission reductions;

the Regional Haze FIP Rule;

• Minnesota’s Mercury TMDL;

• ozone transport regulations;

agency decisions related to environmental justice initiatives;

revised National Ambient Air Quality Standards, particularly for ozone and particulate matter;

revised National Emission Standards for Hazardous Air Pollutants in the taconite, coke, and iron and steel sectors;

and additional regulations regarding per- and polyfluoroalkyl substances.

We similarly expect both federal and state governments to continue to propose more stringent environmental regulation, in particular related to climate change.

• state agency decisions related to environmental justice initiatives;

• reduction of SO 2 levels at steel plants in Canada;

• revised National Ambient Air Quality Standards, particularly for particulate matter;

• additional regulations regarding PFAS.

We similarly expect some state governments to continue to propose more stringent environmental regulation, in particular related to climate change.

Any new or more stringent legislation, regulations, rules, interpretations or orders, when enacted and enforced, including any related to required monitoring and reporting or reductions in, or taxes on, levels of carbon emissions, could have a material adverse effect on our business, results of operations, financial condition or profitability.

In addition, judicial decisions or executive actions limiting the authority of regulatory agencies, or impacting current regulations and policies implemented by such agencies, could create uncertainty regarding the regulatory landscape and impact our ability to operate our existing business and plan for future investments.

Our operations may be impacted by the recent enactment, and ongoing consideration, of significant federal and state laws and regulations relating to certain mine-related issues, such as the stability of tailings basins, mine drainage and fill activities, reclamation and safety in underground and surface mines.

With respect to underground mines, for example, these laws and regulations include requirements for constructing and maintaining caches for the storage of additional self-contained self-rescuers throughout the mines;

installing rescue chambers in the mines;

continuous tracking of and communication with personnel in the mines;

installing cable lifelines from the mine portal to all sections of the mine to assist in emergency escape;

submission and approval of emergency response plans;

and additional safety training.

Additionally, there are requirements for the prompt reporting

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of accidents and increased fines and penalties for violations of these and existing regulations.

These laws and regulations may cause us to incur substantial additional costs.

Additionally, there are requirements for the prompt reporting of accidents and increased fines and penalties for violations of these laws and regulations.

Enforcement of existing mine-related laws and regulations, as well as enactment of any new such laws or regulations, may cause us to incur substantial additional compliance costs and fines and penalties for any violations.

In addition, certain of our operations are subject to the risks of doing business abroad and we must comply with complex foreign and U.S.

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We require our employees, contractors and agents to comply with these and all other applicable laws and regulations, but failure to do so could result in possible administrative, civil or criminal liability and reputational harm to us and our employees.

As a supplier on federal, state and local public procurement projects, including projects that may arise out of proposed or recently enacted governmental legislation regarding infrastructure investments such as the Infrastructure Investment and Jobs Act of 2021, we may be subject to certain stringent procurement regulations that may present compliance challenges or may increase the costs of securing certain business.

As a supplier on public procurement projects, including projects that may arise out of proposed or recently enacted governmental legislation regarding infrastructure investments such as the Infrastructure Investment and Jobs Act of 2021, we may be subject to certain stringent regulations that may present compliance challenges or may increase the costs of securing certain business.

For example, in order to remain eligible for DOE funding, our major Butler and Middletown capital projects are subject to extensive U.S.

government and DOE-specific regulations with which we must comply, including with respect to restrictions related to the use of foreign contractors and workers.

Also, the U.S.

government has rights to, and imposes restrictions on, intellectual property from the projects.

The additional burdens and restrictions imposed by these regulations increase our costs, may limit our operational and contracting flexibility, and may disincentivize certain technology providers or other vendors from working with us.

We may also be indirectly affected through regulatory changes that impact our customers, which in turn could reduce the quantity of our products they demand, adversely impact the terms upon which they purchase or the prices for our products they are willing to pay.

Regulatory changes that impact our suppliers, such as any changes in labor or environmental standards in China, could decrease the availability of products or services they sell to us or could increase the price they demand for products or services they sell to us.

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Our operations use hazardous materials and inadvertently may impact the environment, which could result in material liabilities to us.

Our operations currently use, and have in the past used, hazardous materials and substances, and we have generated, and expect to continue to generate, solid and hazardous waste.

We have been, and may in the future be, subject to claims under international, foreign, federal, state, provincial and local laws and regulations for toxic torts, natural resource damages and other damages as well as for the investigation and clean-up of soil, surface water, sediments, groundwater and other natural resources and reclamation of properties.

We have been, and may in the future be, subject to claims under laws and regulations for toxic torts, natural resource damages and other damages as well as for the investigation and clean-up of soil, surface water, sediments, groundwater and other natural resources and reclamation of properties.

Such claims for damages, as well as investigation, remediation and reclamation requirements, have arisen and may arise in the future out of current, future or former conditions at sites that we or our acquired companies own, lease or operate, as well as sites that we or our acquired companies formerly owned, leased or operated, and at contaminated sites that are or have been owned, leased or operated by our joint venture partners.

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We must obtain, maintain and comply with numerous permits and licenses that require approval of operational plans and impose strict conditions on various environmental, health and safety matters in connection with our steel production and processing and mining and other operations.

These include permits and approvals issued by various federal, state, provincial, foreign and local agencies and regulatory bodies, with which we may not always be able to comply.

These include permits and approvals issued by various agencies and regulatory bodies, with which we may not always be able to comply.

The permitting rules are complex and may change over time, making our ability to comply with the applicable requirements more difficult or potentially impractical and costly, possibly precluding the continuance of ongoing operations or the development of future operations.

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Moreover, despite our ongoing efforts to reduce our environmental footprint and improve the resiliency of our business model, heightened levels of regulatory oversight focused on addressing climate change and industrial activities that generate GHG emissions, such as our steelmaking, cokemaking and mining operations, could impact, delay, or disrupt our ability to obtain new or renewed permits or modifications to existing permits.

In addition, the public, including special interest groups and individuals, have certain rights under various statutes and burgeoning environmental justice policies to comment upon, submit objections to, and otherwise engage in the permitting process, including bringing citizens’ lawsuits to challenge such permits or activities.

For example, we have encountered and expect to continue to encounter public objections to permit renewal applications relating to certain of our major steelmaking facilities, including our Indiana Harbor Works.

Due to these factors or for other reasons, required permits may not be issued or renewed in a timely fashion or at all, or permits issued or renewed may include conditions that we cannot meet or otherwise be conditioned in ways that may restrict our ability to conduct our production, mining and processing activities efficiently or include requirements for additional financial assurances that we may not be able to provide on commercially reasonable terms or at all, which could reduce available borrowing capacity under our ABL Facility.

In addition, the public, including special interest groups, Tribal nations and individuals, have certain rights under various laws and burgeoning environmental justice policies to comment upon, submit objections to, and otherwise engage in the permitting process, including bringing citizens’ lawsuits to challenge such permits or activities.

For example, we have encountered and expect to continue to encounter public objections to permit renewal applications relating to our major steelmaking facilities.

Such conditions could include requirements for additional financial assurances that we may not be able to provide on commercially reasonable terms or at all, which could reduce available borrowing capacity under our ABL Facility.

Such conditions, restrictions or requirements could also reduce our production, cash flows or profitability.

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FINANCIAL RISKS

Our existing and future indebtedness may limit cash flow available to invest in the ongoing needs of our businesses, which could prevent us from fulfilling our obligations under our senior notes, ABL Facility and other debt, and we may be forced to take other actions to satisfy our obligations under our debt, which may not be successful.

As of December 31, 2023, we had $3,192 million aggregate principal amount of long-term debt outstanding, $829 million of which was secured (excluding $56 million of outstanding letters of credit and $215 million of finance leases), and $198 million of cash on our statement of consolidated financial position.

As of December 31, 2023, $3,192 million aggregate principal amount of our senior notes was outstanding.

The aggregate principal amount of revolver commitments under our ABL Facility is $4.75 billion.

As of December 31, 2023, we had no outstanding borrowings under our ABL Facility, and the principal amount of letters of credit obligations and other commitments totaled $56 million.

As of December 31, 2023, borrowing availability under our ABL Facility was $4,341 million based on outstanding letters of credit obligations and our borrowing base at that time.

A portion of our cash flow from operations is used to service debt under our senior notes and ABL Facility, reducing the availability of cash to fund capital expenditures, acquisitions or strategic development initiatives, and other general corporate purposes or to return capital to shareholders, including via share repurchases.

As of December 31, 2024, we had $7.1 billion aggregate principal amount of long-term debt outstanding (excluding $62 million of outstanding letters of credit and $382 million of finance leases) and $54 million of cash on our statement of consolidated financial position.

As of December 31, 2024, we had $5.6 billion aggregate principal amount of our senior notes and $1.6 billion aggregate borrowings under our ABL Facility outstanding.

Our aggregate amount of outstanding debt has increased year-over-year due primarily to additional debt we incurred and/or assumed in connection with completing the Stelco Acquisition during the fourth quarter of 2024.

The aggregate principal amount of revolver commitments under our ABL Facility is $4.75 billion, comprised of $4.25 billion of lending commitments available to be borrowed by us and certain of our U.S.

subsidiaries, and $500 million of lending commitments available to be borrowed by certain of our Canadian subsidiaries.

As of December 31, 2024, the aggregate borrowing availability under our ABL Facility was $2.5 billion based on outstanding letters of credit obligations and our borrowing base.

A portion of our cash flow from operations is used to service debt under our senior notes and ABL Facility, reducing the availability of cash to fund capital expenditures, acquisitions or strategic development initiatives, and other general corporate purposes or to retire debt or return capital to shareholders, including via share repurchases.

Although it is uncertain whether the U.S.

Federal Reserve will lower, maintain or further raise interest rates during 2024 and beyond, higher rates would increase the amount of cash we would need to allocate to servicing the interest expense on our debt in the event we have an outstanding balance drawn under our ABL Facility.

Federal Reserve will lower, maintain or raise interest rates during 2025 and beyond, higher rates would increase the amount of cash we would need to allocate to servicing the interest expense on our debt for so long as we have an outstanding balance drawn under our ABL Facility.

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Our ability to make scheduled payments on the principal, premium, if any, and interest on our debt, or to refinance our debt obligations, depends on our ability to generate cash in the future and our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control, as described elsewhere in this “Risk Factors” section.

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We do not accept any responsibility for any projections or reports published by any such third parties.

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Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results.

Guidance is necessarily speculative in nature, and it can be expected that some or all the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results.

Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release.

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For example, certain of our subsidiaries have been named in lawsuits claiming exposure to asbestos, many of which have been dismissed and/or settled for non-material amounts.

Nevertheless, it is likely that similar types of claims will continue to be filed in the future, and we could experience material adverse judgments or incur significant costs to defend such claims or any other existing and future lawsuits, claims, arbitrations or governmental proceedings.

The insurance we maintain may not be adequate to protect us in the event of significant claims.

Legal Proceedings , which could adversely affect our results of operations, cash flows, financial condition and liquidity.

The insurance we maintain may not cover certain claims and, even when coverage applies, it may not be adequate to protect us in the event of significant claims.

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OPERATIONAL RISKS

Our operating expenses could increase significantly if the prices of raw materials, electrical power, fuel or other energy sources increase.

Our operations require significant use of energy and raw materials.

Although we are fully self-sufficient in iron ore and partially self-sufficient in coke, metallurgical coal and scrap metal, we are wholly or partially dependent on third-party suppliers for certain critical raw materials and production inputs, including industrial gases, graphite electrodes, chrome, zinc, coke, metallurgical coal, scrap metal and other alloys.

Prices for electricity, natural gas, diesel fuel, oils and raw materials can fluctuate widely with availability and demand levels from other users, including fluctuations caused by the impact of recent inflationary pressures, supply chain constraints, infectious disease outbreaks and geopolitical conflicts.

Our operations require significant use of energy, water and raw materials.

Although we are largely self-sufficient in iron ore and partially self-sufficient in coke, metallurgical coal and scrap metal, we are wholly or partially dependent on third-party suppliers for certain critical raw materials and production inputs, including industrial gases, graphite electrodes, chrome, zinc, coke, metallurgical coal, scrap metal, fluxing compounds and other alloys.

Prices for electricity, natural gas, diesel fuel, oils and raw materials can fluctuate widely with availability and demand levels from other users, including fluctuations caused by the impact of inflationary pressures, supply chain constraints, infectious disease outbreaks and geopolitical conflicts.

For example, increased electricity demand to the grid in response to physical climate-related risks, adverse or extreme weather events and electrification of the economy could adversely impact energy prices.

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While we have some long-term contracts with electrical, natural gas and raw material suppliers, we are exposed to fluctuations in energy, natural gas and raw material costs that can affect our production costs.

We enter into many market-based pricing supply contracts for electricity, natural gas and diesel fuel for use in our operations.

We regularly enter into market-based pricing supply contracts for electricity, natural gas and diesel fuel for use in our operations.

Those contracts expose us to price increases in energy costs, which could cause our profitability to decrease significantly.

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environmental regulations or other charges that may require significant capital investment and/or use of cleaner fuels in the future.

Recent executive orders from President Biden regarding the environment and climate change, and the regulations providing for GHG emissions standards proposed by the EPA, indicate that new or revised regulations or other government actions could result in rate and/or cost increases from U.S.

public utilities, which could significantly increase the costs of operating our mining and manufacturing facilities.

New or revised regulations or other government actions related to GHG emissions standards could result in rate and/or cost increases from U.S.

public utilities, which could significantly increase the costs of operating our manufacturing and mining facilities.

Although we regularly monitor and from time to time challenge rate cases initiated by these utilities or other sources seeking to increase the amounts that our facilities must pay for electricity, natural gas or water, there is no assurance that our challenges will be successful in reducing or eliminating proposed rate and/or cost increases.

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Some of our customer contracts include variable-pricing or surcharge mechanisms allowing us to adjust the total sales price based on changes in specified raw materials, supplies and energy costs.

Those adjustments, however, rarely reflect all of our underlying raw materials, supplies and energy cost changes.

Those adjustments, however, rarely reflect all our underlying raw materials, supplies and energy cost changes.

The scope of the adjustment may also be limited by the terms of the negotiated language, including limitations on when and to what extent the adjustment occurs.

Further, as a result of recent inflationary pressures, many of our vendors have been seeking substantial price increases in order to continue providing critical goods and services, and to the extent we are required to pay relatively more for our steelmaking inputs and are unable to recognize corresponding sales price increases, we would realize lower margins on sales of our products, negatively impacting our results of operations.

Further, due to recent inflationary pressures, many of our vendors have been seeking substantial price increases in order to continue providing critical goods and services, and to the extent we are required to pay relatively more for our steelmaking inputs and are unable to recognize corresponding sales price increases, we would realize lower margins on sales of our products, negatively impacting our results of operations.

Our need to consume existing inventories may also delay the impact of a change in prices of raw materials or supplies.

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and China triggering or exacerbating sanctions or trading restrictions could lead to us experiencing disruptions, delays or higher costs in supplying our operations and maintaining steady-state production.

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prices we would need to pay to acquire third-party scrap metal for consumption in our operations, which would adversely affect the margins we would realize on our fixed price contracts.

In addition, even though we are partially self-sufficient in scrap metal, if the market price of scrap metal were to experience a sustained price increase, our cost to produce steel would be adversely affected due to the higher prices we would need to pay to acquire third-party scrap metal for consumption in our operations, which would adversely affect the margins we would realize on our fixed price contracts.

Our sales and competitive position depend on transporting our products to customers at competitive rates and in a timely manner, and our ability to optimize our operational footprint depends on predictably and cost effectively moving products and raw materials internally among our facilities.

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Similarly, we depend on third-party transportation services for delivery of raw materials and other production inputs to us, and failures or delays in delivery would have an adverse effect on our ability to maintain steady-state production and processing operations to meet customer obligations.

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The cost or time to implement a strategic or sustaining capital project may prove to be greater than originally anticipated.

Most of our mines and production and processing facilities have been in operation for several decades, and the equipment is aged, requiring that we continually and successfully implement extensive and costly maintenance practices, programs and upgrades, which may take longer or be more costly than expected.

From time to time, we undertake capital projects to enhance, expand, maintain or upgrade our production, mining and processing capabilities, such as the 2022 blast furnace reline project at our Cleveland Works, or to diversify our customer base, such as our Toledo direct reduction plant.

Our ability to achieve the anticipated production volumes, revenues or otherwise realize acceptable returns on capital projects that we may undertake is subject to a number of risks, many of which are beyond our control, including a variety of market, operational, permitting and labor-related factors.

From time to time, we undertake capital projects to enhance, expand, maintain or upgrade our production, mining and processing capabilities.

For example, we are engaged in major initiatives at each of our Butler and Middletown facilities to leverage DOE funding to complete capital projects intended to increase our competitiveness and reduce GHG emissions relating to our steelmaking operations.

In addition, we are developing an electrical transformer production plant at our former Weirton tinplate facility.

Our ability to complete these and other capital projects that we may undertake on time and on budget and achieve the anticipated production volumes, revenues or otherwise realize acceptable returns is subject to a number of risks, many of which are beyond our control, including a variety of market, operational, funding, permitting and labor-related factors.

Further, the cost to implement any given capital project may prove to be greater or may take more time than originally anticipated, including due to supply chain issues that may be experienced by our vendors, and the scope of a capital project may expand or otherwise be modified.

Capital projects may also interrupt production capabilities, which could have an adverse effect on costs and profitability.

Capital projects undertaken at existing active operations, such as Butler and Middletown, may also interrupt production capabilities, which could have an adverse effect on costs and profitability.

Inability to achieve the expected results from the implementation of our capital projects, incurring unanticipated costs or delays, or the inability to meet contractual obligations could adversely affect our results of operations, future earnings and cash flow generation.

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Operating levels within our industry and the industries of our customers and suppliers are subject to unexpected conditions and events that are beyond the industries’ control.

Those events, including the occurrence of an infectious disease, widespread illness or public health emergency, could cause industry members or their suppliers to curtail production or shut down a portion or all of their operations, which could reduce the demand for our products and adversely affect our revenues, margins and profitability.

For example, the temporary production shutdowns in the automotive industry that occurred during 2020 due to the onset of the COVID‑19 pandemic and associated reduction in demand for our products led to our decision to temporarily idle certain steelmaking facilities and iron ore mines.

Those events, including the occurrence of an infectious disease outbreak, widespread illness or public health emergency, could cause industry members or their suppliers to curtail production or shut down a portion or all of their operations, which could reduce the demand for our products and adversely affect our revenues, margins and profitability.

Our operating levels are subject to conditions beyond our control that can delay deliveries or increase the cost of production for varying lengths of time.

Factors that could cause production disruptions could include adverse weather conditions due to climate change or otherwise (such as severe winter weather, tornadoes, floods, temperature extremes and the lack of availability of process water due to drought) and natural and human-caused disasters, lack of adequate raw materials, energy or other supplies, and infectious disease outbreaks.

Additional factors that could adversely impact production and operations at our mining facilities include tailings dam failures, pit wall failures, unanticipated geological conditions, including variations in the amount of rock and soil overlying deposits of iron ore and metallurgical coal, and processing changes.

Our mining operations, processing facilities, steelmaking and logistics operations depend on critical pieces of equipment.

This equipment may, on occasion, be out of service because of unanticipated failures or unplanned outages.

In the future, we may experience additional lengthy shutdowns or periods of reduced production because of equipment failures or unplanned maintenance activities.

Factors that could cause production disruptions could include adverse weather conditions influenced by climate change or otherwise (such as severe winter weather, tornadoes, floods, temperature extremes and the lack of availability of process water due to drought) and natural and human-caused disasters, lack of adequate raw materials, energy or other supplies, and infectious disease outbreaks.

Additional factors that could adversely impact production and operations at our mining facilities include tailings dam failures, pit wall failures or ground subsidence, unanticipated geological conditions, including variations in the amount of overburden overlying deposits of iron ore and metallurgical coal, and processing changes.

Our mining operations, processing facilities, logistics capabilities and steelmaking operations depend on critical pieces of equipment.

This equipment may, on occasion, be out of service because of unanticipated failures or unplanned outages, including due to long lead times for replacement of critical spares.

From time to time, we may experience lengthy shutdowns or periods of reduced production because of equipment failures or unplanned maintenance activities.

Further, remediation of any interruption in production capability may require us to make large capital expenditures that could have a negative impact on our profitability and cash flows.

Our business interruption insurance may not be available to cover lost revenues associated with equipment failures or maintenance difficulties.

Our business interruption insurance may not be available to cover lost revenues associated with maintenance difficulties or damage to or failures of equipment.

Longer-term business disruptions could result in a loss of customers, which could adversely affect our future sales levels and revenues.

Many of our production facilities and mines are dependent on a sole source for electric power, natural gas, water, industrial gases and/or certain other raw materials or supplies.

A significant interruption in service from our suppliers due to production or transportation issues, workforce difficulties, terrorism or sabotage, weather conditions such as heat waves that may be attributable

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to climate change, natural disasters, equipment failure or any other cause could result in substantial losses that may not be fully recoverable, either from our business interruption insurance or responsible third parties.

A disruption in or failure of our IT systems, including those related to cybersecurity, could adversely affect our business operations, reputation and financial performance.

We rely on the accuracy, capacity, integrity and security of our IT systems for the operation of many of our business processes and to comply with regulatory, legal and tax requirements.

A significant interruption in service from our suppliers due to production or transportation issues, workforce difficulties, terrorism or sabotage, weather conditions that may be influenced by climate change, natural disasters, equipment damage or failure, or any other cause could result in substantial losses that may not be fully recoverable, either from our business interruption insurance or responsible third parties.

A disruption in or failure of our IT systems, including those related to cybersecurity, could adversely affect our business operations, reputation and financial performance and could expose us to third-party liability.

We rely on the availability, confidentiality, integrity and security of our IT systems for the operation of many of our business processes and to comply with regulatory, legal and tax requirements.

While we maintain some of our critical IT systems, we are also dependent on third parties to provide important IT services relating to, among other things, off-site content hosting, operational process technology at our facilities, human resources, electronic communications and certain finance functions.

Further, in connection with our recent acquisitions, we inherited certain legacy hardware and software IT systems that can be supported only by a very limited number of specialists in the market, and our increased reliance on these legacy IT systems may increase the risk of IT system disruption or failure, which could adversely affect our operations.

Further, we operate certain IT hardware and software systems that can be supported only by a very limited number of specialists still remaining in the market with the required skill sets, and our continued reliance on these IT systems may increase the risk of IT system disruption or failure, which could adversely affect our operations.

Despite the security measures that we have implemented, including those related to cybersecurity and data privacy, our IT systems could be breached or damaged by computer viruses, ransomware, natural or human-caused incidents or disasters, or unauthorized physical or electronic access or intrusions, any of which could result in the loss, theft or corruption of sensitive or essential business or personal information and the inability to access or control our IT systems or information.

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business and defense interests and the U.S.

government’s broad support of Ukraine in defending against Russia’s invasion, we may be the target of malicious cyber activities sponsored by the Russian or Chinese governments or other state actors like those described in recent threat advisories issued by the U.S.

government’s broad support of Ukraine in defending against Russia’s invasion, we may be the target of malicious cyber activities sponsored by the Russian or Chinese governments or other state

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actors like those described in threat advisories issued from time to time by the U.S.

Cybersecurity & Infrastructure Security Agency.

Though we have controls in place and regularly conduct employee training, we cannot provide assurance that a cyberattack will not occur or cause damage or business interruption.

Cybersecurity threat actors also may attempt to exploit vulnerabilities through software, including software commonly used by companies in cloud-based services and bundled software.

Though we have controls in place and regularly conduct employee training, we cannot provide assurance that a cybersecurity incident or cyberattack will not occur or cause damage or business interruption.

Furthermore, despite our efforts to audit certain critical vendors’ information security controls, significant risk may remain with respect to security measures employed by third-party service providers, which may ultimately prove to be ineffective at countering threats.

Failures of our IT systems, whether caused maliciously or inadvertently, may result in the disruption of our business processes, or in the unauthorized release of sensitive, confidential, personally identifiable or otherwise protected information, or result in the corruption of data, each of which could adversely affect our businesses.

For example, cybersecurity vulnerabilities could result in an interruption of the functionality of our automated manufacturing, operating, or health and safety systems, which, if compromised, could cease, threaten, delay or slow down our ability to produce or process steel or any of our other products for the duration of such interruption or lead to unanticipated health or safety incidents, which could result in reputational harm and may adversely affect our employees, results of operations, financial condition and cash flows.

In addition, any compromise of the security of our IT systems could result in a loss of confidence in our security measures and subject us to litigation, regulatory investigations and negative publicity that could adversely affect our reputation and financial condition.

Failures of our IT systems, whether caused maliciously or inadvertently, may result in the disruption of our business processes, or in the unauthorized release of sensitive, confidential, personally identifiable or otherwise protected information, or result in the corruption of data, or a cybersecurity incident, each of which could adversely affect our businesses.

For example, cybersecurity vulnerabilities or other cybersecurity incidents could result in an interruption of the functionality of our automated manufacturing, operating, or health, safety and environmental systems, which, if compromised, could cease, threaten, delay or slow down our ability to produce or process steel or any of our other products for the duration of such interruption or lead to unanticipated health, safety or environmental incidents.

This, in turn, could result in reputational harm and lead to litigation, including individual claims or class actions, commercial litigation, administrative, civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs, and may adversely affect our employees, results of operations, financial condition and cash flows.

In addition, any compromise of the security of our IT systems could result in a loss of confidence in our security measures or in the unauthorized release of third-party confidential information stored in our systems, which could subject us to litigation, regulatory investigations and negative publicity that could adversely affect our reputation and expose us to third-party liability.

Our customers, suppliers and vendors may also access or store certain of our sensitive information on their IT systems, which, if breached, attacked or accessed by unauthorized persons, could likewise expose our sensitive information and adversely impact our businesses.

Furthermore, as cybersecurity threats continue to evolve and become more sophisticated, including through the use of artificial intelligence, we may be required to incur significant costs and invest additional resources to protect against and, if required, remediate the damage caused by such disruptions or system failures in the future.

The amount of insurance coverage we maintain and require our vendors to maintain may be inadequate to cover claims or liabilities resulting from cybersecurity attacks.

Furthermore, as cybersecurity threats continue to evolve and may become more sophisticated, including in connection with the ongoing development of Artificial Intelligence, we may be required to incur significant costs and invest additional resources to protect against and, if required, remediate the damage caused by such disruptions or system failures in the future.

The amount of insurance coverage we maintain and require our vendors to maintain may be inadequate to cover claims or liabilities resulting from cybersecurity incidents and attacks, and there is no guarantee that such coverage will continue to be available on commercially reasonable terms or at all.

The closure of an operating facility or mine entails substantial costs.

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To the extent an idled or closed facility formerly supplied critical inputs to our upstream production facilities, we may need to secure alternate sources for such critical inputs, the cost and availability of which may be uncertain.

For example, during 2024, we indefinitely idled our Weirton, West Virginia tinplate production facility, which caused us to recognize costs of approximately $210 million in respect of employee-related costs, asset impairments and exit costs.

The closure of a steelmaking or other operating facility or mining operation involves significant closure costs, including reclamation and other environmental costs, the costs of terminating long-term obligations, including customer, energy and transportation contracts and equipment and real property leases, costs associated with the altered tax profile of an idled or closed facility, and certain accounting charges, including asset impairment and accelerated depreciation.

In addition, a permanent facility or mine closure could accelerate and significantly increase employment legacy costs, including our expense and funding costs for pension and OPEB obligations and multiemployer pension withdrawal liabilities.

For example, a number of employees would be eligible for immediate retirement under special eligibility rules that apply upon a steelmaking facility or mine closure.

For example, employees could be eligible for immediate retirement under special eligibility rules that apply upon a steelmaking facility or mine closure.

The employees eligible for immediate retirement under the pension plans at the time of the permanent closure also could be eligible for OPEB, thereby accelerating our obligation to provide these benefits.

Certain closures would precipitate a pension closure liability significantly greater than an ongoing operation liability and may trigger certain severance liability obligations.

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additional obligations on behalf of the joint venture, including costs of environmental remediation and pension and OPEB obligations.

Certain closures could precipitate a pension closure liability significantly greater than an ongoing operation liability and may trigger certain severance liability obligations.

In addition, we are party to several joint ventures relating to iron ore mining, downstream steel processing and scrap metal recycling, and if our joint venture partners experience financial hardships or fail to perform their obligations upon closure, we may be required to assume significant additional obligations on behalf of the joint venture, including costs of environmental remediation and pension and OPEB obligations.

Although we base our assumptions regarding the life of our mines on detailed studies we perform from time to time, which are reviewed and validated by QPs, those studies and assumptions are subject to uncertainties and estimates that may not be accurate.

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In addition, if we were to significantly reduce the estimated life of any of our mines, the mine closure costs would be applied to a shorter period of production, which would increase costs per ton produced and could adversely affect our results of operations and financial condition.

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We incur certain costs when production capacity is idled, as well as increased costs to resume production at previously idled facilities.

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The amount of any such costs could be significant, depending on a variety of factors, such as the period of idle time, necessary repairs and available employees, and is difficult to project.

We face ongoing risks relating to the recent Stelco Acquisition.

During the fourth quarter of 2024, we completed the Stelco Acquisition.

The Stelco Acquisition may be less accretive than expected, or may be dilutive, to our earnings per share, which could cause the price of our common shares to decline.

In addition, the Stelco Acquisition involves significant risks and uncertainties that may adversely affect us over the short, medium and long terms, including the following:

• we may be unable to realize anticipated synergies or other expected benefits or cost savings from the Stelco Acquisition;

• additional debt incurred or assumed in connection with the Stelco Acquisition could limit our financial flexibility;

• we have assumed additional environmental liabilities, commitments, contingencies, and remediation and reclamation projects relating to Stelco, including the obligation to pay taxes on Stelco’s GHG emissions and the potential requirement to implement desulfurization capabilities at Stelco’s operations;

• potential impairment of recorded tangible and intangible asset values for Stelco, including goodwill, could result in material non-cash charges to our results of operations in the future;

• we face challenges associated with managing international cokemaking, steelmaking and finishing operations, including complying with existing and emerging Canadian regulatory requirements, as well as other risks of operating in multiple countries, such as fluctuations in currency exchange rates, potentially adverse tax consequences due to overlapping or differing tax structures, burdens to comply with multiple and potentially conflicting foreign laws and regulations, including with respect to import or export controls, tariffs, duties and other trade barriers;

• we may be unable to satisfy our operational, employment, environmental or other undertakings or commitments made to the Canadian government in connection with the Stelco Acquisition;

• exposure to unknown liabilities and unforeseen costs relating to Stelco that were not disclosed to us or discovered during due diligence could adversely affect our results of operations;

• the potential loss of key employees, suppliers, customers or other business partners of Stelco could adversely affect our operating and financial performance;

• tariffs imposed by the U.S.

government on Canadian products could effectively increase the price of any steel products that Stelco seeks to sell into the U.S., and retaliatory tariffs imposed by the Canadian government on U.S.

products could effectively increase the cost of any production inputs that Stelco sources from U.S.

suppliers, either of which could adversely affect Stelco's results of operations to the extent it is required to bear any such increases.

If one or more of these risks and uncertainties were to materialize, we could experience reduced revenues, higher costs, lower profitability and other adverse impacts to our operations and businesses.

We may not have adequate insurance coverage for some business risks.

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As a result, despite the insurance coverage that we carry, accidents or other negative developments involving our production, mining, processing or transportation activities causing losses in excess of policy limits, or losses arising from events not covered under insurance policies or subject to substantial deductibles, could have a material adverse effect on our financial condition and cash flows.

In addition, the potential increase in extreme weather events due to climate change or otherwise may adversely impact our access to cost effective insurance in the future.

In addition, the potential increase in extreme weather events influenced by climate change or otherwise may adversely impact our access to cost effective insurance in the future.

The risk of increased insurance costs may have greater impact where the adverse event results in us asserting an insurance claim, the cost of which our insurers may seek to recoup during a future insurance renewal through increased premiums or limitations on coverage.

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SUSTAINABILITY AND DEVELOPMENT RISKS

As we and our customers, competitors and investors seek reduced carbon footprints, transition toward carbon neutrality and enhance business sustainability, we face increased financial, regulatory, legal and reputational risks and potential loss of business opportunities because our operations utilize carbon-based energy sources and produce GHG emissions.

As we and our stakeholders seek reduced carbon footprints, transition toward carbon neutrality and enhance business sustainability, we face increased financial, regulatory, legal, and reputational risks and potential loss of business opportunities because our operations utilize carbon-based energy sources and produce GHG emissions.

As described in detail in Part I - Item 1.

Business - Environmental Matters - Regulatory Developments - Climate Change and GHG Regulations above, because our operations use carbon-based energy and produce GHG emissions, we are subject to a number of risks relating to decarbonization initiatives being undertaken by regulators and other stakeholders as part of global efforts to address the potential impacts of climate change.

For example, as part of climate change mitigation strategies, federal, state, local or foreign governmental authorities may introduce mandatory carbon pricing obligations, carbon emissions limitations, carbon taxes or carbon trading mechanisms, any of which could impose significant costs on our operations, including causing us to incur higher energy and supplier costs, invest in costly and potentially unproven emissions control or reduction technologies, and engage in more intensive environmental monitoring and reporting efforts.

In addition, complying with current or future international treaties and federal, state, local or foreign laws or regulations concerning climate change and GHG emissions could negatively impact our ability, and that of our customers and suppliers, to compete with companies located in areas not subject to or not complying with such constraints.

Business - Environmental Matters - Regulatory Developments - Climate Change and GHG Regulations above, because our operations use carbon-based energy and produce GHG emissions, we are subject to risks relating to decarbonization initiatives being undertaken by regulators and other stakeholders as part of global efforts to address the potential impacts of climate change.

For example, as part of climate change mitigation strategies, governmental authorities may introduce mandatory carbon pricing obligations, carbon emissions limitations, carbon taxes or carbon trading mechanisms, such as the carbon taxes we are required to pay in respect of Stelco’s emissions, any of which could impose significant costs on our operations, including causing us to incur higher energy and supplier costs, invest in costly and potentially unproven emissions control or reduction technologies, and engage in more intensive environmental monitoring and reporting efforts.

In addition, complying with current or future international treaties and laws or regulations concerning climate change and GHG emissions could negatively impact our ability, and that of our customers and suppliers, to compete with companies located in areas not subject to or not complying with such constraints.

We may also face more limited access to, or increased costs of, capital to the extent financial institutions and investors increase expectations relating to lowering GHG emissions or reduce investments in carbon-intensive businesses or industries.

Further, increased pressure from customers or other business partners seeking to reduce their indirect carbon footprints and achieve certain overall decarbonization targets, including by sourcing a larger percentage of steel products from recycled steel, could result in the potential loss of business opportunities if we are unable to meet their carbon, GHG emissions or sustainability expectations, or if we are perceived to have higher GHG intensity than our competition.

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In addition, as part of our decarbonization strategy, we are investigating and from time to time may consider investments in or other relationships with various renewable and clean energy initiatives.

For example, we engaged in various discussions with other companies, universities and national research laboratories to leverage funding available under the DOE's Regional Clean Hydrogen Hubs Funding Opportunity Announcement to develop and implement clean hydrogen solutions for our industrial applications.

The DOE awarded funding to seven hydrogen hubs, and we have expressed interest in offtaking hydrogen from two of them and have recently commissioned a pipeline and completed a hydrogen injection trial at our Indiana Harbor blast furnace #7 with the aim of enabling us to utilize clean hydrogen once it becomes commercially available.

We continue to engage with renewable energy developers on clean energy projects, including the previously announced 200-megawatt Headwaters III Wind Farm being proposed for construction in Indiana as well as onsite solar applications.

While we are pursuing these decarbonization and energy-related projects with the aim of contributing to a greener power grid and lowering our GHG emissions in alignment with our targets, there are no guarantees that sufficient funding or the necessary advanced technology will be available to complete any of these projects under currently anticipated timeframes or at all, and we may experience delays and higher-than-anticipated costs to install the necessary infrastructure to implement such renewable and clean energy initiatives.

In addition, we may not be successful in achieving our current or any future short, medium or long-term GHG emissions reduction goals, including any net-zero or near-zero goals, due to adverse changes in business conditions over time, unanticipated financial challenges, operational improvement efforts like carbon capture, utilization and sequestration projects at certain of our facilities that may not be as successful as originally forecasted, or regulatory developments arising after such goals were initially announced.

For example, we have engaged in various discussions with other companies, universities and national research laboratories to leverage funding available under various DOE programs to support GHG emissions reductions.

In 2024, the DOE awarded us funding to pursue two innovative projects intended to enhance business competitiveness and reduce GHG emissions at our Butler Works facility in Pennsylvania and our Middletown Works facility in Ohio.

The Butler Works project involves replacing natural gas furnaces with electric induction furnaces for high-temperature reheating of GOES.

The Middletown Works project involves a flex-fuel plant capable of consuming hydrogen or natural gas for the production of direct reduced iron, as well as two electric melting furnaces to melt the direct reduced iron into molten iron for use in the existing co-located BOF to produce the quality of steel currently produced at the mill.

During 2024, the DOE awarded funding to multiple hydrogen hubs, and we have expressed interest in offtaking hydrogen from hubs near our operations.

We commissioned a pipeline and completed a successful hydrogen injection trial at our Indiana Harbor blast furnace #7 in 2024, with the aim of enabling us to utilize clean hydrogen once it becomes viable at industrial quantities.

In addition, we continue to engage with renewable energy developers on clean energy projects, with an emphasis on behind-the-meter solar projects located onsite at our operating facilities.

While we are actively pursuing these decarbonization and energy-related projects, there are no guarantees that sufficient funding or the necessary advanced technology will be available to complete any of these projects under currently anticipated timeframes or at all.

Additionally, we may not be successful in achieving our current or any future short, medium or long-term GHG emissions reduction goals, including any net-zero or near-zero goals, due to adverse changes in business conditions over time, unanticipated financial challenges or operational improvement efforts that may not be as successful as originally forecasted, or regulatory developments arising after such goals were initially announced.

To maintain consistent operational performance and foster growth in our businesses, we must maintain our social license to operate with our stakeholders.

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We regularly evaluate, and engage third-party QPs to review and validate, our mineral reserves based on revenues and costs and update them as required in accordance with SEC regulations.

Estimates of mineral reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, some of which are beyond our control, such as production capacity, effects of governmental regulations, future prices for minerals we mine, future industry conditions and operating costs, severance and excise taxes, development costs, and costs of extraction and reclamation.

Estimating the quantity and grade of mineral reserves requires us to determine the size, shape and depth of our mineralized bodies by analyzing geological data, such as samplings of drill holes, and a QP to review and validate our determinations.

Estimates of mineral reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, some of which are beyond our control, such as production capacity, effects of governmental regulations, future prices for minerals we mine, future industry conditions and operating costs, taxes, development costs, and costs of extraction and reclamation.

Estimating the quantity and grade of mineral reserves requires us to

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determine the size, shape and depth of our mineralized bodies by analyzing geological data, such as samplings of drill holes, and a QP to review and validate our determinations.

Estimated mineral reserves could be affected by future industry conditions, future changes in the SEC’s mining property disclosure requirements, variation in geological conditions and ongoing mine planning.

Actual volume and grade of reserves recovered, production rates, revenues on third-party sales and expenditures with respect to our reserves will likely vary from estimates, and if such variances are material, our sales and gross margins could be adversely affected.

Defects in title or loss of any access rights or leasehold interests in our mining properties could limit our ability to mine these properties or result in significant unanticipated costs.

Many of our mining operations are conducted on properties we lease, license or as to which we have easements or other possessory interests.

Defects in title or loss of any access rights or leasehold or option interests in mining properties could limit our ability to mine these properties or result in significant unanticipated costs.

Many of our mining operations are conducted on properties we lease, license or for which we have easements, options or other possessory interests.

We generally do not maintain title insurance on our mining properties, and certain of our land access arrangements were negotiated many years ago and have not been updated.

Any title defect, inability to negotiate future access rights required by our mine plans, or the loss of any lease, license, easement or other possessory interest for any mining property could adversely affect our ability to mine any associated reserves.

Any title defect, inability to negotiate future access rights required by our mine plans, or the loss of any lease, license, option, easement or other possessory interest for any mining property could adversely affect our ability to access and mine any associated reserves.

In addition, from time to time the rights of third parties for competing uses of adjacent, overlying or underlying lands, such as for roads, easements, public facilities or other mining activities, may result in disputes and affect our ability to operate as planned if our title is not superior or mutually acceptable arrangements cannot be negotiated.

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In the event we lose reserves, resources, deposits or surface rights, we may be required to shut down or significantly alter impacted mining operations, thereby affecting future production, internal supply patterns and margins, revenues and cash flows.

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HUMAN CAPITAL RISKS

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Due to union activities or other employee actions, we could experience labor disputes, work stoppages or other disruptions in our production that could affect us adversely.

While we successfully negotiated all three of our labor agreements that expired in 2023 and a new labor agreement at our Northshore operation, we have several other labor agreements that will expire in 2024, including those covering union workers at our Dearborn, Rockport and Toledo operations, and the outcomes of those labor negotiations are uncertain.

Although we successfully negotiated all of our labor agreements that expired in 2024, we have several other labor agreements that will expire in 2025, including those covering union workers at our Butler, Monessen, Zanesville and certain FPT operations, and the outcomes of those labor negotiations are uncertain.

If we enter into a new labor agreement with any union that significantly increases our labor costs relative to our competitors or fail to come to an agreement upon expiry, our ability to compete or continuity of production may be materially and adversely affected.

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If a multiemployer plan were to terminate or if we choose to withdraw, we could be subject to a liability based on the plan's underfunded status.

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In addition, some of the transactions in which we previously sold or otherwise disposed of our non-core assets included provisions transferring certain pension and other liabilities to the purchasers or acquirers of those assets.

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We may encounter labor shortages for critical operational positions, which could adversely affect our ability to produce our products.

We are predicting a long-term shortage of skilled workers in heavy industry, such as electricians, and in certain highly specialized IT roles, and competition for available workers limits our ability to attract and retain employees as well as engage third-party contractors.

We are predicting a long-term shortage of skilled workers in heavy industry, such as electricians, and in certain highly specialized IT roles, such as legacy systems support, and competition for available workers limits our ability to attract and retain employees as well as engage third-party contractors.

We may face potential labor shortages, as many of our most specialized and skilled roles are held by our more senior, experienced employees.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors