X US Steel Corp

---

---

---

Note:	Other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA have been omitted as they are not applicable.

---

Report of Independent Registered Public Accounting Firm

To the Administrator and Plan Participants of the

USS 401(k) Plan for USW-Represented Employees     

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the USS 401(k) Plan for USW-Represented Employees (the “Plan”) as of December 31, 2018 and 2017 and the related statement of changes in net assets available for benefits for the year ended December 31, 2018, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018 and 2017, and the changes in net assets available for benefits for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental Information

The supplemental Schedule H, line 4i - Schedule of Assets (Held at End of Year) at December 31, 2018 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

June 19, 2019

We have served as the Plan’s auditor since 1993.

---

USS 401(k) Plan for USW-Represented Employees

Statements of Net Assets Available for Benefits

($ in thousands)

	December 31,
	2018			2017
Assets
Investments:
Investments at fair value (see Notes 9 & 11)	$	869,087		$	968,516
Receivables:
Participant Loans (see Note 10)	36,504			36,418
Other	82			284
Total Receivables	36,586			36,702
Net assets available for benefits	$	905,673		$	1,005,218

The accompanying notes are an integral part of these financial statements.

Statement of Changes in Net Assets Available for Benefits

($ in thousands)

	Year Ended December 31,
	2018
Additions
Earnings on investments:
Interest	$	4,767
Dividends	37,137
Net depreciation in fair value of investments	(98,648		)
Total loss on investments	(56,744		)
Contributions Received from:
Employers (see Note 1)	1,716
Participants (including rollovers)	53,720
Total contributions	55,436
Loss on investments, net of contributions received	(1,308		)
Deductions
Benefit payments directly to participants or beneficiaries	97,551
Administration expenses	377
Total deductions	97,928
Net deductions	(99,236		)
Net transfers from the plan (see Note 4)	(309		)
Net assets available for benefits:
Beginning of year	1,005,218
End of year	$	905,673

---

1.

Plan description - The following description provides general information regarding the USS 401(k) Plan for USW-Represented Employees (the Plan), a defined contribution plan. The Plan covers full-time employees of United States Steel Corporation (USS or Plan Sponsor) and certain Employing Companies (collectively, “Company”) who are covered by a collective bargaining agreement that adopts the Plan and who have completed at least six months of continuous service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). For a more complete description of the Plan, participants should refer to the Summary Plan Description, which is available from the United States Steel and Carnegie Pension Fund (the Plan Administrator).

a.

Contributions - The Plan receives (1) Participant contributions (a) as pre-tax savings and/or Roth 401(k) savings and/or (b) rollover contributions, and (2) for certain bargaining units, employer contributions, as non-contributory defined contribution Retirement Account contributions and/or Retiree Health Care Account contributions. Each component of contributions is described in further detail below. Participants may contribute from 1 percent to 40 percent (in whole percentages) of regular compensation as pre-tax contributions and/or Roth 401(k) contributions (18% if the participant is a highly compensated employee) and, in 10 percent increments, up to 100 percent of bonus type payments, as defined by the Plan. Other qualified plan limits include:

	2018			2017
Dollar Limit on IRC Sec. 401(k) pre-tax contributions	$	18,500		$	18,000
Dollar Limit on IRC Sec. 414(v) catch-up contributions	$	6,000		$	6,000
Maximum covered compensation [IRC 401(a)(17)]	$	275,000		$	270,000
Highly Compensated Employee Definition	$	120,000		$	120,000

b.

Benefit payments - On termination of employment, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s account, take partial withdrawals, or defer the distribution. Under certain conditions, the Plan allows for hardship withdrawals before termination of employment prior to attaining age 59 ½. The Plan also allows in-service withdrawals upon attainment of age 59 ½ and from rollover contributions. Upon the death of a participant, a lump-sum amount is paid to the beneficiary no later than one year from the end of the year in which the participant died, except that a spousal beneficiary may keep funds in the Plan subject to plan terms.

c.

Participant accounts - Investment elections and percentage of savings elections may be changed at any time. Investments in 1 percent increments may be transferred daily. Transfer requests made before the time the market closes on a day stock markets are open are processed after markets close that same day. All other transfer requests are processed after markets close on the next day that the stock markets are open. Transfers are permitted daily but may be subject to fund specific

---

d.

Notes receivable from participants - Participants may borrow from their account the lesser of up to 50 percent of their account balance (other than the Retirement Account and the Retiree Health Care Account) or $50,000 with a maximum of two loans outstanding at a time. Interest will be fixed for the duration of the loan at the prime rate (obtained from Reuters) in effect at the time the loan is entered into plus one percent, with the rate set each quarter. The loans are secured by the balance in the participant's account. The loans bear interest at rates that range from 4.25 to 6.25 percent and from 4.25 to 5.25 percent on loans outstanding December 31, 2018 and 2017, respectively. Principal and interest are paid ratably through payroll deductions and/or manual loan repayments. Loans are recorded at net realizable value in the financial statements.

e.	Investment options - Please refer to the Summary Plan Description for details on the investment options offered by the Plan.

2.	Accounting policies:

a.	Basis of accounting - Financial statements are prepared under the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America (US GAAP).

b.	Use of estimates - The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

c.

Forfeited accounts - Any forfeited nonvested company contributions ($146 thousand in 2018) from the Retirement Account contributions are accumulated in an account and may be applied to reduce any subsequent company contributions required under the Plan. Retirement Account contributions (and earnings thereon) forfeited on or after January 1, 2015 during the previous or current calendar year may be applied to administrative expenses of the Plan.

d.	Investment valuation - The Plan’s investments are stated at fair value as defined by Accounting Standards Codification (ASC) Topic 820, Fair Value Measurement (see Note 11).

e.	Net appreciation/depreciation - The Plan presents in the accompanying Statement of Changes in Net Assets Available for Benefits the net appreciation/depreciation in the fair value of its investments which consists of the net realized gains or losses and the net unrealized appreciation or depreciation on those investments.

f.	Investments by the trustee - Fidelity Management Trust Company (the Trustee) invests any monies received with respect to any investment option in the appropriate shares, units or other investments as soon as practicable. Purchases and sales of securities are recorded on a trade-date basis.

g.	Administrative, recordkeeping and investment expenses - The cost of administering the Plan is paid by the Employing Companies, except to the extent that it is paid for by the Plan participants. Investment option fees, additional trustee fees, expenses and/or commissions are passed back to participants either in the net value of the investment or the cost of the transaction.

h.	Payment of benefits - Benefits are recorded when paid.

i.	Income recognition - Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

j.	Participant loans - Notes receivable from participants are measured at their unpaid principal balances plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. The Plan does not have an allowance for credit losses as of December 31, 2018 or 2017. Loans in default are classified as benefit payments to participants based upon the terms of the plan.

---

k.	Excess contributions payable - Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to contributions.

l.	Subsequent events - The Plan has evaluated subsequent events through June 19, 2019 on which the financial statements were available to be issued.

3.	Plan amendments - Effective July 16, 2018, the Plan was amended to reflect administrative changes in the Managed Accounts Service.

4.	Net transfers from the Plan - Net transfers from the plan totaled $0.3 million in 2018. For 2018, the transfers were primarily related to voluntary direct plan transfers to the United States Steel Corporation Savings Fund Plan for Salaried Employees for former union employees who transferred to eligible salaried positions.

5.	Employer-related investments - Participant directed purchases and sales of United States Steel Corporation Common Stock in accordance with provisions of the Plan are permitted under ERISA.

6.

Tax status - The Internal Revenue Service (IRS) has determined and informed the Plan Sponsor by letter dated September 16, 2013 that the Plan, as amended and restated effective January 1, 2013, continues to qualify under §401(a) of the Internal Revenue Code (IRC) of 1986, as amended, and its related trust is exempt from tax under §501(a) of the IRC of 1986, as amended. The Plan has been amended after the amendments considered by the IRS in conjunction with its issuance of the September 16, 2013 determination letter. The Plan Sponsor and Tax Counsel for the Plan believe the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and therefore, believe that the Plan is qualified, and the related trust is tax-exempt.

7.	Plan termination - The Plan can be amended, changed or terminated subject to the provisions of the collective bargaining agreement. If the Plan is terminated, each participant's account will be adjusted to reflect expenses, investment gains and losses, and unallocated contributions, and then distributed to each participant.

8 .

Risks and uncertainties - Investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with these investments and the level of uncertainty related to changes in the value of these investments, it is at least reasonably possible that changes in the near term could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits.

9.	Stable value common collective trust - The Plan invests in stable value wrap contracts through a stable value common collective trust, the Fidelity Managed Income Portfolio II - Class 3 (MIP II). This investment option calculates its net asset value per unit as of the close of business of the New York Stock Exchange. Investments in wrap contracts are fair valued using a

---

10.

Related party transactions - Certain investments of the Plan are mutual funds and common collective trusts managed by Fidelity Investments. Fidelity is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for the investment management services amounted to approximately $0.377 million for the year ended December 31, 2018.

11.

Fair value measurement - ASC Topic 820 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Plan’s investments, and requires additional disclosure about fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy are summarized below.

•	Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Partnership has the ability to access.

•	Level 2 - Inputs to the valuation methodology include:

◦	Quoted prices for similar assets or liabilities in active markets;

◦	Quoted prices for identical or similar assets or liabilities in inactive markets;

◦	Inputs other than quoted prices that are observable for the asset or liability;

◦	Inputs that are derived principally from or corroborated by observable market data by correlation or other means

•	Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

---

	Investments at Fair Value at December 31, 2018
	($ in thousands)
	Asset Classes	Total			Quoted Prices(Level 1)
	Interest-bearing cash	$	19,802		$	19,802
	Common stock	42,584			42,584
	Mutual Funds	682,479			682,479
	Total assets in the fair value hierarchy	$	744,865		$	744,865
	Investments measured at net asset value (a)	124,222
	Investments at fair value	$	869,087

---

USS 401(k) Plan for USW-Represented Employees

NOTES TO FINANCIAL STATEMENTS

December 31, 2018 and 2017

	Investments at Fair Value at December 31, 2017
	($ in thousands)
	Asset Classes	Total			Quoted Prices(Level 1)
	Interest-bearing cash	$	18,932		$	18,932
	Common stock	75,343			75,343
	Mutual Funds	753,863			753,863
	Total assets in the fair value hierarchy	$	848,138		$	848,138
	Investments measured at net asset value (a)	120,378
	Investments at fair value	$	968,516

(a)

In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Statement of Net Assets Available for Benefit. These investments represent holdings in the stable value common collective trust.

---

USS 401(k) Plan for USW-Represented Employees

EIN 25-1897152/PN 029

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

December 31, 2018

(a)	(b)	(c)	(e)
	Identity of Issuer, Borrower, Lessor or Similar Party	Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value	Current Value
*	U. S. Steel Stock Fund - Common Stock	Employer-related security	$	42,577,218
*	U. S. Steel Stock Fund - Stock Purchase Account	Employer-related security	6,844
*	Fidelity Freedom Index Income Fund - Institutional Premium Class	Mutual fund	8,498,604
*	Fidelity Low-Price Stock Fund - Class K	Mutual fund	26,888,705
*	Fidelity Freedom Index 2010 Fund - Institutional Premium Class	Mutual fund	13,337,266
*	Fidelity Freedom Index 2020 Fund - Institutional Premium Class	Mutual fund	58,814,978
*	Fidelity Freedom Index 2030 Fund - Institutional Premium Class	Mutual fund	53,631,147
*	Fidelity Freedom Index 2040 Fund - Institutional Premium Class	Mutual fund	34,973,967
*	Fidelity Freedom Index 2050 Fund - Institutional Premium Class	Mutual fund	15,874,413
*	Fidelity Freedom Index 2060 Fund - Institutional Premium Class	Mutual fund	991,320
*	Fidelity U.S. Bond Index Fund - Institutional Class	Mutual fund	35,598,006
*	Fidelity Real Estate Investment Portfolio	Mutual fund	11,269,484
*	Fidelity Contrafund - Class K	Mutual fund	139,167,357
*	Fidelity 500 Index Fund - Institutional Premium Class	Mutual fund	159,248,912
*	Morgan Stanley Institutional Fund, Inc. International Equity Portfolio Class I	Mutual fund	22,983,269
	Vanguard Windsor II Fund - Admiral Shares	Mutual fund	16,198,747
	Vanguard Explorer Fund - Admiral Shares	Mutual fund	14,306,972
	Vanguard Inflation-Protected Securities Fund Institutional Shares	Mutual fund	5,502,904
	Janus Henderson Enterprise Fund Class I	Mutual fund	65,193,242
	Fidelity Managed Income Portfolio II - Class 3	Common/Collective Trust	124,222,685
*	Vanguard Treasury Money Market Fund Investor Shares	Interest-bearing cash	19,801,949
*	Participant Loans	Maturity dates of 0 - 5 years with interest rates ranging from 4.25% to 6.25%	36,503,711
	Total Investments at 12/31/18		$	905,591,700
	* Party-in-interest
	All investments are participant directed.

9

---

SIGNATURES            

THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the administrator of the USS 401(k) Plan for USW-Represented Employee has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on June 19, 2019 .

    

UNITED STATES STEEL AND CARNEGIE PENSION FUND, AS PLAN ADMINISTRATOR

        

By:	/s/ Kimberly D. Fast
	Kimberly D. Fast,
	Comptroller & Assistant Secretary

    

---

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-231215) of United States Steel Corporation of our report dated June 19, 2019 relating to the financial statements and supplemental schedule of USS 401(k) Plan for USW-Represented Employees, which appears in this Form 11-K.

/s/ PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

June 19, 2019

US Steel (NYSE:X)
Historical Stock Chart
From Mar 2024 to Apr 2024

US Steel (NYSE:X)
Historical Stock Chart
From Apr 2023 to Apr 2024