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Quarterly report [Sections 13 or 15(d)]

FAIR VALUE MEASUREMENTS

v3.25.1
FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract] Ìý
FAIR VALUE MEASUREMENTS
NOTE 12 - FAIR VALUE MEASUREMENTS
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 13 - DERIVATIVE INSTRUMENTS AND HEDGING for information on our derivative instruments, which are accounted for at fair value on a recurring basis.
A summary of the carrying value and fair value of other financial instruments were as follows:
March 31, 2025 December 31, 2024
(In millions) Valuation Hierarchy Classification Carrying
Value		 Fair
Value		 Carrying
Value		 Fair
Value
Senior notes Level 1 $ 6,346Ìý $ 6,240Ìý $ 5,505Ìý $ 5,496Ìý
ABL Facility - outstanding balance Level 2 1,255Ìý 1,255Ìý 1,560Ìý 1,560Ìý
Total $ 7,601Ìý $ 7,495Ìý $ 7,065Ìý $ 7,056Ìý
The valuation of the financial asset 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) 2025
Beginning balance as of January 1 $ (188)
Change in fair value (2)
Payments 5Ìý
Ending balance as of March 31 $ (185)
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 $500Ìýmillion. 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) 2025
Beginning balance as of January 1 $ 95Ìý
Change in fair value (9)
Ending balance as of March 31 $ 86Ìý