Our revenues of $20.4 billion, net income of $3 billion, adjusted EBITDA of $5.3 billion, and free cash flow of $2.1 billion were all-time annual records in our company's history.
We reinvested in our business, acquired the leading prime scrap processor in North America, delevered our balance sheet, and reduced our diluted share count by 10% last year.
Last quarter, we generated adjusted EBITDA of $1.5 billion on 3.4 million tons of steel shipments, the second-best quarterly performance in our company's history, only behind the previous quarter's $1.9 billion adjusted EBITDA on 4.2 million tons shipped.
These actions reduced our sequential quarter-over-quarter steel production by 675,000 crude tons in Q4, ultimately also impacting our unit costs.
Partially offsetting the volume and cost impacts were higher selling prices in Q4, which rose by approximately $90 per ton from $1,334 to our highest level of the year of $1,423 per net ton.
For context, if we applied the contracts we have in place now in 2022 to the fourth quarter of 2021, holding all else constant, our Q4 2021 adjusted EBITDA would have been nearly $500 million higher.
Despite the lower shipments and additional inventory build, we generated $900 million of free cash flow in Q4 of 2021.
Of this $900 million, we used $761 million to acquire FPT and use the remaining $150 million or so to pay down debt.
We keep a close eye on our overall debt levels on a dollar basis, but we also look at our overall leverage on a total debt-to-last 12 months adjusted EBITDA basis.
Given this increased collateral base, we were able to take advantage of these asset levels and upsized our ABL facility last quarter, increasing our available liquidity by $1 billion to our current level of $2.6 billion.
On another very important note on the balance sheet, our net pension and OPEB liabilities saw a $1 billion reduction during Q4, primarily due to actuarial gains and strong asset performance, leading to a $1.3 billion or nearly 30% net reduction during 2021.
Just for reference going forward, for every 50-basis-point increase in our discount rate, our expected liabilities would decline by about $500 million, all things equal.
Looking ahead, even under today's pessimistic HRC futures curve, we would expect higher overall average selling prices in 2022 than we saw in 2021 when HRC averaged $1,600 per ton.
Our capex budget for this year is $800 million to $900 million, an increase from the previous year, primarily due to an additional reliability and environmental projects, inflation and the reline of one of our Cleveland blast furnaces, which will be out for over 100 days during Q1 and Q2.
Full-year DD&A should be about $900 million.
Exclusive and one-time items, our 2022 SG&A expense should be around $520 million, which includes higher wages and also $40 million of FPT overhead.
Now that we have effectively exhausted our tax NOLs, our cash tax rate should be in the 15% to 20% range, with our book tax rate at 21%.
Our first full calendar year as the new Cleveland-Cliffs was an absolute success, and we could not have accomplished all the great results we were able to accomplish without the hard work and commitment of our 26,000 employees, approximately 20,000 represented by the USW, the UAW, the Machinists, and other unions.
The shortage of microchips cut their opportunity to build 18 million cars or more in 2021.
And the automotive sector ended the year with a much smaller 13 million units.
And our adjusted EBITDA in January was a solid $588 million.
We typically sell 5 million tons of steel directly to automotive manufacturers and also sell another 2 million to 3 million tons through intermediaries.
With our capex needs in 2022 relatively low and strong confidence in our cash flows, we are very comfortable putting in place the $1 billion share buyback program just announced.
We currently sell about 45% of our volumes under annual fixed-price contracts, by far, the highest in our industry and we want this number to continue to grow.
The integration of FPT has gone remarkably well, and we are grateful for the buy-ins of the 600 employees of FPT, they are now employees of Cleveland-Cliffs.
This particular stamping plant alone generates more than 150,000 tons of prime scrap per year.
As you may know, our state-of-the-art direct reduction plant was originally designed and built with the possibility of using up to 70% of hydrogen in the mix as reductant gas.
In addition, iron ore pellets are Scope 1 emission for Cleveland-Cliffs, but they are Scope 3 emissions for the clients we sell them to.
Unfortunately, the Scope 3 emissions are not accounted for, not counted in anyone's reduction targets and surprisingly, at least for now, no one really seems to care about Scope 3 emissions, therefore, producing fewer tons of pellets automatically reduce our Scope 1 emissions.
And that's good enough for us, at least until Scope 3 becomes a topic of concern.
This action will not only further improve our carbon footprint but will also save us approximately $400 million in capex originally planned for this facility over the next few years.
Of all CO2 emissions generated in the United States, the emissions related to the production of steel represent just 1% of the total.
One more time, just 1%.
This number is 15% in China and 7% worldwide.
But here in the United States, it is just 1%.
Meanwhile, transportation, particularly affected by automotive tailpipe emissions, is responsible for 29%, while energy is responsible for another 25%.
This is where the importance of steel made in U.S.A. is most significant as our very small emissions footprint, again, just 1%.
We will play a critical role in improving the emissions of these two sectors, which, combined, are responsible for more than 50% of all CO2 emissions in the United States.
And we have the right steels necessary to meet the automotive industry target of 50% EV adoption by 2030.
Cliffs is the only producer in the United States of the electrical steels needed for the modernization of the electrical grid, which received $65 billion in funding under the recently passed infrastructure bill.
The infrastructure bill also includes another $7.5 billion earmarked for charging stations for electric vehicles.
Each charger uses approximately 50 pounds of GOES, grain-oriented electrical steel, and we are talking about half a million of charging stations, plus the equivalent amount of transformers to tie down these charging stations into the grid.
And that's just the beginning of the EV revolution, which will certainly progress between now and 2030.
With all we at Cleveland-Cliffs are doing related to carbon emissions, I can't believe so many companies are being given a free pass by the investment community, despite not doing much more than just saying they will be carbon-neutral by 2050.
We will continue to be able to track our progress in 2022, 2023, 2030, and beyond.

Summary:
Our revenues of $20.4 billion, net income of $3 billion, adjusted EBITDA of $5.3 billion, and free cash flow of $2.1 billion were all-time annual records in our company's history.
Given this increased collateral base, we were able to take advantage of these asset levels and upsized our ABL facility last quarter, increasing our available liquidity by $1 billion to our current level of $2.6 billion.
On another very important note on the balance sheet, our net pension and OPEB liabilities saw a $1 billion reduction during Q4, primarily due to actuarial gains and strong asset performance, leading to a $1.3 billion or nearly 30% net reduction during 2021.
Looking ahead, even under today's pessimistic HRC futures curve, we would expect higher overall average selling prices in 2022 than we saw in 2021 when HRC averaged $1,600 per ton.
With our capex needs in 2022 relatively low and strong confidence in our cash flows, we are very comfortable putting in place the $1 billion share buyback program just announced.
In addition, iron ore pellets are Scope 1 emission for Cleveland-Cliffs, but they are Scope 3 emissions for the clients we sell them to.
Unfortunately, the Scope 3 emissions are not accounted for, not counted in anyone's reduction targets and surprisingly, at least for now, no one really seems to care about Scope 3 emissions, therefore, producing fewer tons of pellets automatically reduce our Scope 1 emissions.
Of all CO2 emissions generated in the United States, the emissions related to the production of steel represent just 1% of the total.
One more time, just 1%.
But here in the United States, it is just 1%.
This is where the importance of steel made in U.S.A. is most significant as our very small emissions footprint, again, just 1%.