Dan Lesnak – Manager of Investor Relations John Surma – U.S. Steel Chairman and Chief Executive Officer Gretchen Haggerty – Executive Vice President and Chief Financial Officer Analysts : Michael Gambardella – JPMorgan Timna Tanners – UBS Kuni Chen – Banc of America Securities Sal Tharani – Goldman Sachs Mark Parr – KeyBanc Capital Market David Martin – Deutsche Bank [John Schwab] – Independent Research Michael Willemse – CIBC World Markets Evan Kurtz – Morgan Stanley Charles Bradford – Bradford Research [Bob Somolik] – New River Capital [Christine Fisher] – Goldman Sachs [Zach Schreiber] – [Dukane Capital]

Welcome to the United States Steel Corporation fourth quarter 2008 earnings conference call and webcast. (Operator Instructions) I would now like to turn the conference over to Mr. Dan Lesnak. Please go ahead.

We’ll start the call with some brief introductory remarks from U.S. Steel Chairman and CEO, John Surma. Next, I will provide some additional details for the fourth quarter and then Gretchen Haggerty, U.S. Steel Executive Vice President and CFO will comment on the outlook for the first quarter 2009. Following our prepared remarks we’ll be happy to take any questions. Before we begin, however, I must caution you to that today’s conference call contains forward-looking statements and that future results may differ materially from statements or objections made on today’s call. For your convenience, the forward-looking statements and risk factors that could effect those statements are referenced at the end of our release and are included in our most recent annual report on Form 10-K and updated on our quarterly reports on From 10-Q in accordance with the Safe Harbor Provisions. Now let’s begin the call, here is U.S. Steel Chairman and CEO, John Surma.

Earlier today we reported fourth quarter 2008 earnings of $308 million or $2.65 per diluted share. As we noted in our release, that figure included the $0.65 per share net effect of $150 million pre-tax gain from a contingency reversal and a $28 million pre-tax charge to exit the drawn-over-mandrel tubular business. If you exclude those items our earnings were $2.00 per share, which exceeded the consensus estimate, which Dan informs me as of today was $0.71 per share. Although we are currently operating in an extremely difficult environment, it is worth noting that 2008 was a record year for United States Steel Corporation with revenues of $23.8 billion, operating income of $3.1 billion and net income of $2.1 billion or $18.11 per share. The assets in operations and people that we have assembled through our strategic activities over the past eight years, positioned us to realize substantial benefits from the strong global market conditions that existed throughout most of 2008. Also we are particularly pleased with our long-term trend of improving safety performance. In 2008 on a global basis, our OSHA reportable rate improved by 7% and we achieved a 30% reduction in days away from work cases. Our employees who accept the responsibly for their own safety and that of their colleagues, deserve the credit for this continued improvement. Turning now to our segment results, in the fourth quarter our North American flat-rolled segment had an operating loss of $2 million reflecting the reselling prices as spot prices continued to fall throughout the quarter lower shipments and the unfavorable cost impact of operating at a utilization rate of less than 45%. That’s our lowest quarterly utilization rate since 1983 as customer demand remained severely depressed. The unfavorable impact from these items was partially offset by net favorable inventory effects of approximately $90 million, primarily from LIFO inventory liquidations and lower raw material and energy costs. Shipments for the fourth quarter totaled 2.8 million tons that was down 38% from the third quarter and average selling prices decreased just over 11%, again, as compared to the third quarter. We had an operating loss of $134 million for the fourth quarter in our European segment. This was only the second time we’ve had a quarterly loss since we expanded into Europe in 2000 and as was the case in North America. This result reflected decreased selling prices, lower shipments and the adverse cost effects resulting from low operating rates. Our utilization rate fell to 51% for the quarter. Shipments were just over 900,000 tons or 36% lower than the third quarter, and selling prices declined by 22% to an average selling price of $847 per ton. Our raw material costs continue to reflect the higher prices that were set earlier in 2008. For our tubular segment, operating income was $559 million in the fourth quarter, a record performance. Operating income per ton increased by $309 to $1,118 per ton, primarily due to higher selling prices. Our average realized price for the quarter increased by $285 per ton from the third quarter and shipments remained strong at 500,000 tons for the quarter. With that introduction, I’ll now turn the call over to Dan for some additional information about the quarterly results. Dan.

Capital spending totaled $197 million in the fourth quarter, resulting in a full year capital spending of $735 million. This was lower than our earlier estimate of $860 million. These amounts exclude spending by our variable interest entities of $67 million in the fourth quarter and $161 million for the full year primarily related to the non-recovery coke battery project at Granite City. We also spent $140 million in 2008 to acquire the remaining interest in the Clairton 1314B partnership and three pickle lines in Canada. Our current plan for 2009 has total capital spending at approximately $740 million, excluding spending related to the non-recovery coke battery in Granite City, was $610 million for North American operations and $130 million for European operations. Significant North American capital projects for 2009 include construction of a new coke battery at our Clairton coke operations, and the completion of co-generation facility at Granite City, which will be sourced primarily by the steam produced from the non-recovery coke battery. In Europe, 2009 capital spending will focus on several environmental projects. We intend to manage our spending on these and other smaller projects in a manner appropriate in relation to changes in market conditions and cash flows. Depreciation, depletion and amortization totaled $141 million in the fourth quarter and $605 million for the year. Depreciation is expected to be about $650 million in 2009. Defined benefit and multi-employer pension and OPEC costs for the quarter totaled $70 million. We made cash payments for pension and OPEC of $193 million. For the total year, defined benefit and multi-employer pension and OPEC cost were $227 million and we made cash payments for pensions and OPEC of $739 million, which included $140 million of voluntary contributions to our main defined benefit pension plan. For 2009, we expect our pension and OPEC cost to be roughly $360 million compared to $227 million in 2009. Excluding any voluntary contributions, we expect cash pension and OPEC payments to be approximately $535 million in 2009. Gretchen will discuss this in a moment and additional details will be included in our 10-K, which will be filed the last week of February. Net interest and other financial costs totaled $23 million in the fourth quarter compared to $46 million in the third quarter. Fourth quarter net interest and other financial costs included a foreign currency gain of $17 million and the third quarter included a $6 million foreign currency loss. We expect first quarter net interest expense to be about $38 million before any foreign currency gains or losses. Our effective tax rate of 28% for the year was higher than projected at the end of third quarter as a result of lower than projected earnings from our European segment. As a result, the tax provision in the fourth quarter included a $55 million adjustment to previously recorded tax expense. We currently estimate our annual effective tax rate will be 28% in 2009. Lastly, for the quarter we averaged $116.4 million fully diluted outstanding shares. Now Gretchen will review some additional information and the outlook for the first quarter.

In the fourth quarter, cash flow provided by operating activities was $327 million. The fourth quarter included a record U.S. Steel worker profit sharing payment based on our third quarter results. The final contribution to our trust for retiree healthcare and life insurance for USW retirees under a December 2007 letter agreement and a $75 million annual contribution to the trust under our new USW labor agreement that was effective on September 1st. We also had a large federal catch-up tax payment in the fourth quarter. In total, these payments were in excess of $400 million. Reduced working capital levels was a significant source of cash in the fourth quarter. Cash flow provided by operating activities was approximately $1.7 billion for the full year in 2008, and our free cash flow after capital spending and dividends, but before external financing, was approximately $500 million. We ended the year with $724 million of cash and about $2.1 billion of total liquidity. We re-measured our OPEB obligations as of December 31, 2008 and our unfunded OPEB position is estimated to be $3.1 billion. OPEB expense was $149 million in 2008, and we expect OPEB expense to total approximately $180 million for 2009. We also re-measured our pension obligations as of December 31, 2008, and on a consolidated basis, they are now under funded by an estimated $2 billion for accounting purposes. As a result of the voluntary contributions that we've made in the past, we do not anticipate having to make any mandatory cash contribution to our main plan in 2009. We have voluntarily contributed in excess of $900 million to our main plan since late 2003, and we may continue to make voluntary contributions. We expect pension expense of roughly $180 million in 2009, compared with $78 million in 2008. The increase is primarily the result of 2008 asset performance. As noted in the earnings release, we repurchased 260,000 shares of common stock in the fourth quarter, for a total cost of $14 million. This brings our total repurchases to 16.3 million shares for approximately $1 billion, and represents approximately 12% of the balance of fully diluted shares outstanding when we authorized the original repurchase program in July of 2005. As of December 31, 2008, 4.4 million shares remained available for repurchase under the current authorization. We have suspended repurchases under this program. Turning to our outlook, we expect an operating loss in the first quarter as results continue to reflect the extremely difficult global economic environment. We do not know when conditions may improve, but we are well-positioned to fully participate in a market recovery when it occurs. In the meantime, we continue aggressive efforts to maximize liquidity and reduce costs, and will take additional actions as market conditions warrant. Flat-roll results for first quarter of 2009 are expected to decrease substantially from fourth quarter 2008, primarily due to further declines in shipments as a result of lower customer demand, lower average realized prices, and reduced effects from LIFO liquidation. First quarter 2009 results for U.S. Steel Europe are expected to be comparable to the fourth quarter, as lower raw material acquisition costs begin to be reflected in cost of sales and averaged realized prices are expected to be lower. Results for tubular in the first quarter of 2009 are expected to decrease significantly from fourth quarter of 2008, although we expect to remain profitable. Shipments and averaged realized prices are expected to decrease in line with market trends. Dan.

[Julie], could you please queue the line for questions?

(Operator Instructions) Our first question comes from Michael Gambardella – J.P. Morgan. Michael Gambardella – J.P. Morgan: Quick question on tubulars, you had almost $600 million in operating profit in the quarter. My understanding is that most of your tubular sales go through distributors. Is that correct?

Yes, certain in the OCTG to some degree it’s a standard line. That's correct. Michael Gambardella – J.P. Morgan: John, is that more of a quarterly fixed price or how does that go, quarterly or monthly?

It's generally order-by-order pricing. There are some programs that we would work with our distributors through to the end customer that would have longer pricing, but at this point, I would say it's relatively short-term pricing. Michael Gambardella – J.P. Morgan: And just in terms of your outlook, where you're saying earnings would be down significantly, but still profitable. Does that mean we're going to go near breakeven for the first quarter?

We hope not, Mike, but because of the relatively short lead times and just all the noise in the market, we don't have a great deal of visibility forward. We were not necessarily trying to move it to breakeven, but it really remains to be seen what the order book shapes up at the later months in the quarter. Michael Gambardella – J.P. Morgan: The industry has been really good so far on supply discipline, a big change from previous cycles. Do you still feel that the other players out there are still holding the line on the production discipline, and is that a concern going forward?

I can't really comment, Mike, on what others might or might not be doing. We see the AISI statistics which, through the end of last week as I glanced at this morning, capability was 43% or 44%. That's really all we know and all we need to know. We don't really need to or want to know what anybody else is doing. I could just tell you what our policy is and has been that we see no value right now in manufacturing product to either have it be in the warehouse or on the ground or to try to force it into a customer with a price that doesn't create demand. It just creates inventory. So I can only tell you what we're doing and that's continuing to be our policy. Michael Gambardella – J.P. Morgan: Are you seeing any kind of leading indicators that would suggest some type of recovery?

Not really, Mike. I wish I could say we see a great ramp coming, but not really. I think we see fits and starts and spurts, but not really any sustained pattern of strong demand or order flow across virtually all the markets that we serve. We all see, you all see the service center statistics and they have been fairly grim in terms of shipments and inventories have continued to come down, particularly on the sheet side. It seems to be clear to us, at least, that apparent demand, which is what we're observing from an order standpoint, most probably is less than real consumption. And as long as those two lines are going in different directions, they probably will cross at some point, but we don't see any great evidence they've crossed so far.

Your next question comes from Timna Tanners – UBS. Timna Tanners – UBS: Two questions, really. One is regarding some of the reported potential asset divestitures. Do you think of yourself as buyer? What are the parameters you'd like to look for in potential asset divestitures available on the market?

In other words, what might we be interested in acquiring if something became available? Timna Tanners – UBS: Yes. I know you can't give me specifics, but what are the parameters? What are the guidelines that you look at in considering opportunities?

I think, among other things, we have tried to be disciplined in our approach. We're not, and have never been, seeking tons for the sake of tons. We’re not looking for a certain number, or for a certain size. We have tried to acquire things, and I think have acquired things, that we saw company-specific synergy value in. And that certainly was the case in the Lone Star Technologies transaction, going back further to the National Steel transaction and the Stucco transaction and we had things that we knew we could do were the acquired facilities, and what we had, the markets, the customers, that we could make some additional money doing that, and therefore, justify the acquisition. We, I think, would have the same kind of disciplined approach as opportunities might arise. The big difference I would point out even compared, not just to last year or two years ago, but back to two and three. The capital markets were functioning well, even though our sector was in extremis at the time. So capital was available. I think that's a big question mark right now. The capital markets are in a very difficult condition, we all know that. Gretchen, of course, advises us on that. So I think we'd have to be really thoughtful and very careful from a capital structure standpoint as well, and would be very, very mindful of maintaining a strong capital structure, which we've been successful in doing recently. Timna Tanners – UBS: Sometimes the uses of cash [inaudible] identified acquisitions is a top priority recently. Is that a fair assessment?

Our top priority right now, I think, is to maximize liquidity and reduce our cost structure and deal with the market that we have in front of us, but we're mindful that through these periods come opportunities and we're not necessarily going to forsake the potential for opportunities. But given the capital markets where they are, I think that would be a difficult thing right now. Timna Tanners – UBS: Then the other question is related to OCTG. I think you addressed a little bit on the demand side, and then I'm really curious in the more medium to longer term supply issues. If you could talk a little bit about the status of dumping cases in the near-term, and then into 2011 it appears that there's several new mills that are starting or looking to start up that could be quite competitive, perhaps, with your product? Can you talk a little bit about supply of the tubular side?

Sure. There's a couple questions in there. It's always been a competitive market and we've always had [inaudible]. I think one of the bigger concerns we have is we think, clear evidence of excessive, unfairly traded product, particularly from China, where there has been excess expansion that's been aided and abetted by export tax rebates, which we think is front-page news in "Unfair Trade Illustrated" magazine. When you look at the volume of imports of OCTG from China, they have in some cases exceeded monthly consumption, which we think is excessive. I think we'll have to deal with that in our own way. There's no cases on OCTG from that region right now. There may be in the future. We are successfully prosecuting nearly to the final steps, although I think there’s a little bit more to go yet, on I think it's a welded line pipe, 16 inch, if I have the right size, diameter case. And that one has proceeded almost completely through the process will result in anti-dumping and, because of subsidy, the countervail and duty requirements we think that's an appropriate outcome and that may be the outcome in other cases as well. Timna Tanners – UBS: And the new capacity and longer term? Sorry.

There's been probably more talked about than done, which is usually the case, and there were a number of projects talked about in the western hemisphere, I guess I might say. But I think given the difficulties in the overall market, I'm not sure how quickly they will happen. There are a number of projects that are coming on in the Smart Weld market, which may be what you're referring to. One of those is the joint venture we have. We think that the long-term demand outlook in that market is still pretty good and we think we can still make a pretty good living at the project we're involved in. So I think over the long-term, supply and demand, as long as it's left to market forces, we’ll have a way of calibrating and we think we'll do quite well there. There has been talk of new seamless mills. That's a very expensive proposition without I think a clear demand pool outside of subsidized capital. It's hard to make that case in today's world.

Your next question comes from Kuni Chen – Banc of America Securities. Kuni Chen – Banc of America Securities: I don't know if I missed it in your opening comments, can you comment on contract mix for 2009, contract versus spot and what the differential is between contracted spot process and how many tons have yet to be re-priced for this year?

Sure. In general we usually talk about a sort of a 50/50 blend and that's about where we'll be for 2009. There's a big question mark, of course, about how many tons because of demand across all sectors, spot versus contract are very opaque and we really don’t have good visibility, but our mix will probably be about 50/50. I would guess maybe just a little bit heavier on the contract side. Maybe it's 55/45 somewhere in that zone probably. We had last year a little more on the spot side versus contract just the way the market worked out, but it will be about the same. We had a good bit of contract business up to re-quote and re-price at the end of last year and that's virtually all completed with reasonable increases across most major markets. We also changed to some degree the character of the contracts. We still have some of the normal fixed price 4A period with a nominated volume. We have some others that have periodic adjustments based on certain cost inputs where that makes more sense for the kind of customer and market it’s in. And then we have a growing number of tons that’ll be on some kind of periodic adjustment based on a market reference price. So we really have all three of those, but wrapping those up, that'll be 50% plus a little bit more. Kuni Chen – Banc of America Securities: And as far as anything yet to be re-priced for this year, otherwise, in the middle of the year or anything like that?

Not a whole lot to do during the course of 2009, a bit that would come up at the end of April and some at June, but not a whole lot. Kuni Chen – Banc of America Securities: Lastly, on the cost side of the equation, can you just talk about input costs across each of the segments and which businesses will lead and lag on the way down as your costs sequentially are moving lower?

Sure, that's a good question. First on tubular where we're effectively producing the preponderance of substrate either rounds or flat-roll in effect where we're transferring that at market or something close to market of full cost plus a modest mark up in the case of rounds. So I think the North American steel making, which is all inside of flat-roll, is really where that question is relevant, let me start there. In North American steel making, of course, our iron costs are going to be relatively stable changing for just some mixed cost absorption if we're at lower levels, and some energy plus or minus, some transportation plus or minus, but fairly stable on the iron cost I would think. Our coal costs in North America in 2008 were very competitive. We did a good job of buying our coal in 2008 and we'll have some increase in coal cost, less than we might have led this group to conclude when we last spoke about it. And I'm just going to use raw numbers of our full cost and total for North America was something in the order of $125 a ton, something along those lines. Probably an increment of 40 on top of that for 2009 might be what we're looking at. We might be more successful. We might have less depending on where the market shakes out, but we’ll have some increase there. Those would be the major inputs in North America. Things like coating metals, alloy agents, the phero complex, those are all trending down. You can see the market quotes on those and we'll enjoy that ride down as it comes down. Natural gas we buy hits on but they're also market takers you can see what happened in gas, electricity relatively stable. In Europe, I think it's a little more complicated story. In Europe, we had agreed some raw material input prices in the earlier part of 2008 at very high prices when the markets are very tight, and we wanted to make sure we had material. Those prices ran through the end of the year so we were acquiring and buying at a pretty high price all the way through the end of 2008. We renegotiated to much, much more competitive prices for both carbon and pharos inputs in central Europe starting at the beginning of the year, but we have a large inventory in material we have to consume that is not going down as fast as we would like because our consumption is relatively low. We have lower input costs negotiated for acquisitions starting at January 1st through the end of the first quarter, and after that we'll take a look at where the various settlement prices settle for the larger negotiations and that’ll be a guide to us and our suppliers. I think I covered most of them.

Your next question comes from Sal Tharani – Goldman Sachs. Sal Tharani – Goldman Sachs: On the contract side of the auto industry, I think you had guided they were slightly up in your last conversation, has there been any renegotiations on those?

No. I think our contrast that we had for discussion at the end of last year are largely completed and with reasonable increases that we were satisfied with. Sal Tharani – Goldman Sachs: Going back to the OCTG, you mentioned that Chinese and portions of the U.S. are more than the action monthly consumption over here. What prevents you from filing a case? Especially as Gretchen in her outlook mentioned that you expect a significant decline in the earnings. Would that be a better time when the earnings come to a level where you can go to the ITC and file a case?

It's a good question, Sal. These are matters of litigation and trade loss so I'm not an expert. But in general when we file a trade case we want to make sure it's a case that we can win that has solid technical grounding and we're working on that right now. The statute, as I understand it, does not require one to be losing money to win a trade case, but I think the relative level of profitability is something I understand has been considered from time to time. So we're going to look over our hand and when we file a case we'll make sure it's a case we're going to win. Sal Tharani – Goldman Sachs: In the welded line pipe case, if you win, would that be a positive or be likely the way to follow through with the OCTG?

I don't know that they would necessarily be linked but winning that case handily, as we have done so far and I expect will, I hope, I think that would probably be a positive. It can't be a negative. Sal Tharani – Goldman Sachs: Lastly, I don't know if you made the comment earlier in your prepared remarks I wasn't on the call, but have you given us indication of what utilization rate you ran in the fourth quarter at what [inaudible] rate do you think you can become breakeven in the U.S. flat-roll operation?

I think in our earnings release, Gretchen's going to flip just to make sure I got the right numbers, it’s roughly 45% in the U.S. and about 50 in Europe. That's a complicated question, Sal, because there’s so many dynamics there. There's prices and mix and other inputs and a lot of things that could change, but there have been other periods in the last few years when we operated at 65% plus or minus and managed to make a profit and I think we could still do that at that level. It would be difficult to have a sustained strong profitability of 44% capacity. Somewhere in between there probably is where our breakeven is but it depends on really too many factors for me to give you a sort of specific answer.

Your next question comes from Mark Parr – KeyBanc Capital Markets. Mark Parr – KeyBanc Capital Markets: One thing I was curious about is your iron ore [keytac] and [mentac] are sized to satisfy a larger steel consumption environment. Are you considering selling any iron ore in to the spot market right now or in addition to that you’re semi-finished capability out of Stelco and with slab production there, does that provide opportunities to sell slabs into the world market?

Let me take the last one first. It does. We did do a fairly brisk business, slab business last year, a good bit of from Canada, not all, but a good bit from both Lake Erie and Hamilton. We’ve got decent access to Blue Water there so that was pretty good business for those, for us. If there is a market that’s certainly something we’ll pursue. There isn’t a strong market for that, at least not right now. On the iron ore side, Mark, we have from time to time, and are actually right now doing a little bit of movements of product from our Minnesota operations to either export customers or occasionally to our operations in Europe where that has made sense just from a market perspective. The Great Lakes transportation system is not really suited to a steady diet of high volume iron ore export when you look at the cost and number of moves you have to make. So it’s something we will do periodically but probably not something we will make a steady diet of. Mark Parr – KeyBanc Capital Markets: I was just thinking about this and the context of the weakness in the shipping rates that have emerged recently and also some of the idling of rail capacity. So –

Yes. It is something tat we take a look at all the time. We’ve got plenty of rocks to blow up and plenty of capacity to palletize them. It’s just a question of whether the economics work given the transportation, a good question. Mark Parr – KeyBanc Capital Markets: I’d just like to get your take on some of the stuff coming out of Washington regarding infrastructure spending and potential new project opportunities that would involve steel. How do you feel about how good a job they’ve addressed the opportunities and if you had the ability to advise them, what source of areas would you encourage them to look more aggressively?

Well I’m not sure I am qualified to give them advice but I think the overall infrastructure emphasis is a very good thing. You may have seen that our industry group AISI had a press release recently saying that we were disappointed in the lack of meaningful infrastructure spending was actually the headline. We would prefer a larger amount of whatever stimulus package there is moving in the infrastructure spending because it does create construction jobs. It does need manufactured products, the majority of those from American sources with American labor, of course. So we would think of great portion would be good. It would be good for us to directly and indirectly, some portion of the stimulus that would be aimed at stimulating business investments, which is a form of infrastructure but also would be good for the kinds of customers that we sell to that make manufactured goods and industrial equipment that would be very positive. And some element that might stimulate consumer demand is okay from our standpoint because a piece of flat-roll business is gauged more to consumer demand so across that spectrum we think all of that is good. Heavier on infrastructure would be better from our standpoint of where they will settle out on the other competing social needs. I’m not expert enough to really give any good advice on that. Mark Parr – KeyBanc Capital Markets: Could you comment at all on the automotive steel supply chain? This economic down turn has kind of hit everybody, I’m just wondering if on the raw materials side that the automotive supply chain, how would you characterize it as reasonably in line? Is it over served right now? Is there some destocking that’s going on at the end user level there?

It’s hard to tell, but I think from us all the way to the stamping plant and assembly plant I think inventories are and even the vehicle inventories are relatively low. I think one clear effective of the credit crisis and the lack of credit is that everyone including us on all of our inputs are trying to drive down everything we hold to the lowest possible level to maintain the maximum possible liquidity. Everybody is doing that. I think that the steel supply chain is in relatively good shape as near as we can tell. Our relationships are fine or functioning well. We hope that they get back to work and make as many cars as the can and we’ll be prepared to serve them when they do.

Your next question comes from Dave Martin – Deutsche Bank. David Martin – Deutsche Bank : I wanted to start with inventories. I would have expected you would have seen a bigger draw on inventories in the quarter and as a result you probably didn’t generate as much cash I would have thought. Can you comment on that in your ability to generate cash via working capital in the coming quarters?

I’ll just start and then I’ll turn it to Gretchen. She’s got the numbers better in mind than I do but if you’re just looking at the gross inventory number out, which I don’t see that way necessarily. I think our raw material inventories might be a little bit higher on both the pellet and coke standpoint because we’re continuing to run our coke batteries on extended coke times. We’re not making more than we need to but we probably have a bit of an inventory investment on the coke and pellet side. On the steel inventories, we’ve run them down very, very low and took a lot of working capital out on the steel inventory side. The end of December inventory, steel inventory for us is the lowest it’s been in some years for as long as I can remember.

Now I think that’s right, John; I wouldn’t say anything differently. I mean particularly on the coke side we have to keep our batteries running and we’re not using as much and we’re building coke and that’s just where we’re going to be. And we’re probably going to keep producing that but ultimately it will come back.

And that may actually work well for us because we’ve had to buy a good bit of imported coke in the last year or two or three really going back to 2004. That price is up to $600 and $700 a ton so us making it for less than half of that and having it on the ground for a short time we think that’s a reasonable proposition. David Martin – Deutsche Bank: Secondly, on variable costs and thinking about moving parts this year and profit sharing in particular, what was the profit sharing amount you paid out in 2008?

In round numbers I think our profit sharing for the year and, of course, we’ll give you a pretty wholesome disclosure on this when we get to the 10-K and in a couple of weeks, but I think it was about $220 million. David Martin – Deutsche Bank: Lastly on the income statement, the other income line of $143, what was in that?

That’s where the $150 million reversal of the contingent funding obligation that we had set up for our partnership on 1314 B, that’s where that flowed through.

Your next question comes from [John Schwab] – Independent Research. [John Schwab] – Independent Research: How are the tube volumes in the first three weeks of January? You’re selling close to 40,000 tons a week or is it more like a couple of trucks going out every day?

It’s probably somewhere between there, [John]. I don’t have it down to weeks but I think it was publicly observed that we’ve idled one tube mill in Belleville, Texas and we are taking shorter turns and fewer turns at most of the other mills so our volume of production has begun to ebb a bit and shipments will follow that, probably already are. But I don’t have it down to the tons per week or anything but clearly a bit slower as we enter the new year. [John Schwab] – Independent Research: Have you flushed out all the $30 mauling and expense of alloys so that they are contemporaneous with prices today or do you still have some stale raw materials from a few months ago?

Not a whole lot on the furnace editions alloy, that suite of things John. I think there we don’t have a real long supply to begin with and if there is any carryover it won’t last for very long. It’ll be gone pretty quickly, probably gone by today. I mean it would go quicker if we were running at a higher rate, of course, but that will not be a long-term drag, I don’t think.

Your next question comes from Michael Willemse – CIBC World Markets. Michael Willemse – CIBC World Markets: I was just wondering, and maybe I missed this earlier, if you could give a sense of exposure to the big three, just from a credit perspective even if you could give on a percentage of sales if we were to take the two ones that are in trouble, GM and Chrysler, would they be less than 5% of your sales?

Well that kind of ebbs and flows over time and we don’t have any single customer that we have to disclose as a 10% customer so that’s an outlier. I guess I don’t really want to talk specifically about what we have there. We generally have our fair share of whatever it is that they’re selling. And so they haven’t been selling much lately. We are at low levels relative to our history but in total our exposure there is quite manageable. Michael Willemse – CIBC World Markets: To move on to Europe, you had a pretty big operating loss there the first one that I can see ever. How much of that loss would you itemize as just higher raw material costs going through costs of goods sold, or a mismatch between your costs and selling prices and how much of that loss is just due to the big decline in shipments or the weak capacity utilization? I guess what I'm trying to get at is, once raw material prices kind of decline and stabilize do you think the European operations can be profitable again?

By all means, in response to your last question, they can and I'm confident they will. Our European operation has demonstrated over a wide range of market circumstances and ability to generate a very competitive conversion margin because we have a competitive cost structure and have a good market position in a good steel intensive part of the world. Over the years, Mike, as the steel prices would ebb, we were able to negotiate our raw materials to a level that would allow us to have a good conversion margin. In this particular instance because of the abrupt and rapid reduction in volume and in prices we weren't really able to ride it out the way we have in previous cycles. So the lines crossed in a very significant way in a hurry and because of lower volume, as I may have mentioned, we're taking a longer time to work our way through the higher cost raw materials, which on the FIFO average costs where out in Europe? Gretchen would advise it will take a little bit more time to work through. But in the long-term, and I don't mean 20 years, it would be sooner than that, but I hope – I think we'll be able to generate a competitive conversion margin because we've got good plans, with good costs, nice cost advantage over most of western and northern Europe and we think a good product and market position. So I'm confident that the European business will do well. Michael Willemse – CIBC World Markets: One last question kind of similar to that, the contract pricing you're able to secure for 2009 would you look at that as profitable business?

Yes. In fact, considering what’s happened in the marketplace just looking at the published prices that are available on the various indices, pricing has remained relatively positive. Relatively speaking, it's not where it was earlier in the year or last year even, but at this price level and the contract business that we have, what we can do reasonably well. This is more a volume question than a price question right now we're looking forwards. We need the country to get back to work.

Your next question comes from Evan Kurtz – Morgan Stanley. Evan Kurtz – Morgan Stanley: Just more follow-up on tubular, I was hoping you could kind of walk us through the evolution of pricing through the fourth quarter. Where do we start realizations at the beginning and the end and where they might be right now?

I'm not sure I could do that from my head. Gretchen might be able to help us in a moment but we had a number of significant price moves during the middle part of last year, I might say, and they weren't all fully realized and collected until we began the fourth quarter I think, if you take them in sequence. And therefore we were fully collecting essentially everything we had priced into the market by the time we got to the fourth quarter. And those were very full prices as you see and the margins were quite full. They were record in either case so it really was a cumulative sum of the price increases we've had throughout the year. Is that a fair way to say it, Gretchen?

Yes. So 285 from the third quarter but it was flowing through pretty steadily. Evan Kurtz – Morgan Stanley: On the last call we had talked a little bit about the coke and coal costs and you had thought at the time that you might be paying somewhere above 200 next year and that's 165. I was just wanted if you could provide some detail and why that changed? Were contracts renegotiated, were they deferred or canceled even?

Well I think when we gave you that outlook before it was based on what we saw in the market. We really hadn’t placed everything and priced everything then but the market then, as you know, was heading towards 300 or some other astronomical number. I think what we're looking at now is just a more realistic expression for us of what is actually in the market and what we can realize based on where our coke plants are, the transport we have, the access and the long relationship we have with some of these mines. So I think that was reflective of the market then. This is a more concrete reflection of what the market is today and we'll do better if we can. This is what we're guessing right now.

Your next question comes from Charles Bradford – Bradford Research. Charles Bradford – Bradford Research: Can you give me some color on the status of what's happening with the EJ&E?

Certainly as I understand it, Chuck, the relevant regulatory body, which I believe is the Surface Transportation Board, has issued their final order and we are moving towards a closing in the near-term. Charles Bradford – Bradford Research: Can you tell us whether you'll book a profit on that or just what the situation will be?

I am sure there will be a profit. That property for the most part dates from Judge Gary's day so I'm sure there will be a profit on it, but how much it is I don't know and, assuming it does proceed to closing, it will be a transaction probably worthy of probably a separate mention in our results next time around. And we'll make sure we let you know that that is. Charles Bradford – Bradford Research: The automobile bailout bill has provisions requiring suppliers or participants in the automobile industry like the union, debt holders and so on to share some of the pain. Is the steel industry covered by any of that?

Chuck, there were pretty broad provisions in there and I know that they're trying to do the best that they can. I don't think that it serves anybody to talk about what they may or may not be doing right now. Charles Bradford – Bradford Research: How many blast furnaces are you currently operating and how many are on idle in U.S.?

Chuck, we’ve kind of gotten out of keeping score. We're operating at about what the operating rate was you saw in the quarter. It's 50% or less and on any given day we may be taking one furnace up at Gary and one furnace down somewhere else so I'm not really inclined to get into a day-by-day scorecard. But we're operating at a relatively low level. We've got plenty of blast furnace capacity. When the orders come we can get them up really quick.

Your next question comes from [Bob Somolik] – New River. [Bob Somolik] – New River Capital: You mentioned that iron consumption is below sales. Would you kind of estimate that in kind of what operative that would imply? Is there a way to talk about that?

I think if you're referring to my comment that apparent demand, what we're seeing and what we're producing to is below consumption, that's a bit of a conjecture based on what the economists are saying what the real economy is doing. We can see pretty clearly what the industry production is through the industry-wide statistics. I don't know how great that difference is or how significant any recalibration would be, but if that's what you're referring to all I can see is the general trend. I can't really derive from that any particular number of tons or direction for our order book. [Bob Somolik] – New River Capital: That is apparent from just the way the industry is ticking down in inventory, right?

Well let me give it to you this way. The domestic steel industry as reported through the AISI industry group statistics for the last two months maybe longer has been operating at 50% or less capacity. I don't have any reason to think that the U.S. economy has begun to operate at 50% or less of its total capacity. So I think what's happening is that somewhere in the system inventory is being taken out, which we then see as lower apparent demand. We gear our production to that. At some point we think that those would have to recalibrate. It always has. Whether that happens sooner or later it's impossible to say right now.

Your next question comes from [Christine Fisher] – Goldman Sachs. [Christine Fisher] – Goldman Sachs: I just wanted to check the covenants in your credit facility to make sure I have them right. I think the 751 isn't drawn, but is the 3.75 times leverage covenant and a two times coverage covenant. Is that right?

Yes. [Christine Fisher] – Goldman Sachs: How much total did you have available? I think it's that one and the $500 million A/R facility.

Those weren't drawn on at the end of the year. [Christine Fisher] – Goldman Sachs: So I guess if, obviously if the $500 million one is not drawn then any fluctuations in A/R it doesn't really matter, but would the availability decline potentially or you're not going to cross that bridge until it's drawn?

I think the availability on receivables can decline over time but that $500 million we've got a fair amount of room on that $500 million. That's a pretty modest level for us given our receivables. [Christine Fisher] – Goldman Sachs: Last question is just on the credit facilities that you guys have drawn down on, are there any collateral posting requirements on those facilities, or no?

No.

Your next question comes from [Zach Schreiber] – [Dukane Capital]. [Zach Schreiber] – [Dukane Capital]: Question on this apparent demand versus what you think actual demand is, if you can just put some numbers around it? How much lower is apparent demand? What do you think this gap is between apparent demand and actual demand ? As a result how much destocking has occurred and what kind of evidence do you have that supports that or is it more sort of qualitative feel and so forth?

Well, it’s a little bit of all that, [Zach]. It’s a fair question. Since I brought it up let me try and answer it. The most observable data point we have is the MSCI material steel service center statistics that they publish, I think, monthly if I recall, and we look at the flat-roll numbers they have in overall steel and other categories. We look at flat-roll and I don’t have the numbers immediately in mind but I think in the last several months the inventories have gotten down to 4.5 million tons maybe something in that range, and I believe that the lowest it’s been in the last 30 or 40 years was about 3 million tons. Now earlier in the last five years 5, 6, 7 million tons was not uncommon, even eight. So that’s the level of destocking that’s gone on. We don’t know when the low point is, is it 4.5? Is it 4? As I mentioned, there was a data point somewhere a long time ago of three, so whether the system can function much lower than it is today is a question. So I can’t qualitatively say when that inflection point is, but that’s one bright spot we see has continued to be drawn down. [Zach Schreiber] – [Dukane Capital]: What’s the rate of destocking for those inventories and what is the apparent demand the clients show up as? You’re running at 48% utilizations, basically, as an industry, is apparent demand down more than 50%?

I think that’s a fair proxy for apparent demand, at least I can decipher our company. We’re producing roughly to what the order book is and the order book is net of the inventory draw so I think that’s a fair proxy for apparent demand. Any MSCI on their website has statistics going back a long way. I think you can see the actual numbers there pretty easily. If not, Dan Lesnak can probably get them for you.

We have no further questions.

Thanks for joining us. We’ll talk to you next quarter.

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