Annual report [Section 13 and 15(d), not S-K Item 405]

FAIR VALUE OF FINANCIAL INSTRUMENTS

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FAIR VALUE OF FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of certain financial instruments (e.g. Accounts receivable, net, Accounts payable and Other current liabilities) approximate fair value and, therefore, have been excluded from the table below. See NOTE 15 - DERIVATIVE INSTRUMENTS AND HEDGING for information on our derivative instruments, which are accounted for at fair value on a recurring basis.
The following table summarizes the carrying value and fair value of other financial instruments:
December 31, 2024 December 31, 2023
(In millions) Classification Carrying
Value		 Fair Value Carrying
Value		 Fair Value
Senior notes Level 1 $ 5,505  $ 5,496  $ 3,137  $ 3,118 
ABL Facility - outstanding balance Level 2 1,560  1,560  —  — 
Total $ 7,065  $ 7,056  $ 3,137  $ 3,118 
The valuation of financial assets classified in Level 2 was determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.
EMPLOYEE BENEFIT COMMITMENT
In connection with the Stelco Acquisition, we have acquired funding commitments to employee life and health trusts. These obligations pertain to plans previously sponsored by Stelco prior to its bankruptcy. The commitments primarily involve fixed scheduled payments that will continue until 2042, with an additional variable component tied to Stelco's standalone operating performance. The financial liability is recorded at fair value on a recurring basis using a discounted cash flow model, which incorporates observable and unobservable inputs for risk-free interest rates and future operating estimates. The liability is classified as a Level 3 within the fair value hierarchy. The current and non-current portions of the employee benefit commitment are classified within Other current liabilities and Other non-current liabilities on the Statements of Consolidated Financial Position, respectively.
The following table summarizes the changes in fair value of the employee benefit commitment:
(In millions) 2024
Beginning balance as of January 1 $ — 
Fair value of commitment assumed in connection with Stelco Acquisition (197)
Total losses included in earnings (2)
Payments 5 
Foreign currency translation 6 
Ending balance as of December 31 $ (188)
MINNTAC OPTION
Stelco is party to an option to purchase a 25% ownership interest in the MinnTac iron ore mine and related infrastructure located in Mt. Iron, Minnesota from U. S. Steel for $500 million. This option is exercisable by Stelco at any time until January 31, 2027. This option is recorded as a derivative instrument at fair value on a recurring basis and included within Other non-current assets on the Statements of Consolidated Financial Position. Any gain or loss recorded in relation to the fair value of this option is presented within Other non-operating income (loss). The fair value of the derivative asset is estimated using the Black-Scholes option pricing model, which incorporates observable or unobservable inputs for risk-free interest rates, foreign exchange rates, commodity prices,
discount rates, corresponding market volatility levels and other market-based pricing factors. This option is classified as a Level 3 derivative asset within the fair value hierarchy.
The following table summarizes the changes in fair value of the MinnTac option:
(In millions) 2024
Beginning balance as of January 1 $ — 
Fair value of option acquired in connection with Stelco Acquisition 110 
Total losses included in earnings (12)
Foreign currency translation (3)
Ending balance as of December 31 $ 95