Annual report pursuant to Section 13 and 15(d)

REVENUES

v3.20.4
REVENUES
 12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
We generate our revenue through product sales, in which shipping terms generally indicate when we have fulfilled our performance obligations and transferred control of products to our customer. Our revenue transactions consist of a single performance obligation to transfer promised goods. Our contracts with customers usually define the mechanism for determining the sales price, which is generally fixed upon transfer of control, but the contracts generally do not impose a specific quantity on either party. Quantities to be delivered to the customer are generally determined at a point near the date of delivery through purchase orders or other written instructions we receive from the customer. Spot market sales are made through purchase orders or other written instructions. We consider our performance obligation to be complete and recognize revenue when control transfers in accordance with shipping terms.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring product. We reduce the amount of revenue recognized for estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value to be realized. Payment terms are consistent with terms standard to the markets we serve. Sales taxes collected from customers are excluded from revenues.
Prior to the AM USA Transaction, we had a supply agreement with ArcelorMittal USA, which included supplemental revenue or refunds based on the HRC price in the year the iron ore was consumed in ArcelorMittal USA's blast furnaces. As control transferred prior to consumption, the supplemental revenue was recorded in accordance with Topic 815. All sales occurring subsequent to the AM USA Transaction are intercompany and eliminated in consolidation. Included within Revenues related to Topic 815 for the supplemental revenue portion of the supply agreement is derivative revenue of $122 million, $78 million and $426 million for the years ended December 31, 2020, 2019 and 2018, respectively.
The following table represents our Revenues by market:
(In Millions)
Year Ended December 31,
2020 2019 2018
Steelmaking:
Automotive $ 2,062  $ —  $ — 
Infrastructure and manufacturing 784  —  — 
Distributors and converters 696  —  — 
Steel producers1
1,423 1,990  2,332 
Total steelmaking 4,965  1,990  2,332 
Other Businesses:
Automotive 329  —  — 
Infrastructure and manufacturing 34  —  — 
Distributors and converters 26  —  — 
Total Other Businesses 389  —  — 
Total revenues $ 5,354  $ 1,990  $ 2,332 
1 Includes Realization of deferred revenue of $35 million for the year ended December 31, 2020.
The following table represents our consolidated Revenues by product line:
(Dollars In Millions, Sales Volumes in Thousands)
Year Ended December 31,
2020 2019 2018
Revenue
Volume1
Revenue
Volume1
Revenue
Volume1
Steelmaking:
Hot-rolled steel $ 386  633  $ —  —  $ —  — 
Cold-rolled steel 490  682  —  —  —  — 
Coated steel 1,747  1,911  —  —  —  — 
Stainless and electrical steel 868  416  —  —  —  — 
Other steel products 92  141  —  —  —  — 
Iron products2
1,335  11,707  1,990  18,583  2,332  20,563 
Other 47  N/A —  —  —  — 
Total steelmaking 4,965  1,990  2,332 
Other Businesses:
Other 389  N/A —  N/A —  N/A
Total revenues $ 5,354  $ 1,990  $ 2,332 
1 Carbon steel products, stainless and electrical steel and plate steel volumes are stated in net tons. Iron product volumes are stated in long tons.
2 Includes Realization of deferred revenue of $35 million for the year ended December 31, 2020.
Deferred Revenue
The table below summarizes our deferred revenue balances:
(In Millions)
Deferred Revenue (Current) Deferred Revenue (Long-Term)
2020 2019 2020 2019
Opening balance as of January 1 $ 22  $ 21  $ 26  $ 39 
Net increase (decrease) (15) 1  (26) (13)
Closing balance as of December 31 $ 7  $ 22  $ —  $ 26 
Prior to the AK Steel Merger, our iron ore pellet sales agreement with Severstal Dearborn, LLC, subsequently assumed by AK Steel, required supplemental payments to be paid by the customer during the period from 2009 through 2013. Installment amounts received under this arrangement in excess of sales were classified as deferred revenue in the Statements of Consolidated Financial Position upon receipt of payment and the revenue was recognized over the term of the supply agreement, which had extended until 2022, in equal annual installments. As a result of the termination of that iron ore pellet sales agreement, we realized $35 million of deferred revenue, which was recognized within Realization of deferred revenue in the Statements of Consolidated Operations during the year ended December 31, 2020.
We have certain other sales agreements that require customers to pay in advance. Payments received pursuant to these agreements prior to revenue being recognized are recorded as deferred revenue in Other current liabilities.