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

Dave Martin - Deutsche Bank Kuni Chen - Banc of America Securities Jeff Cramer - UBS Luke Folta - Longbow Research Timna Tanners - UBS Brett Levy - Jefferies & Co. Brian Yu - Citigroup [Eliott Glazer - Unidentified Firm] David Gagliano - Credit Suisse Anthony Rizzuto - Dahlman Rose & Co. Mark Parr - KeyBanc Capital Markets

Ladies and gentlemen, we'd like to thank you for standing by and welcome you to the United States Steel Corp. first quarter 2009 earnings conference call and webcast. (Operator Instructions) I would now like to turn the conference over to your host, Dan Lesnak. Please go ahead, sir.

Thank you, [Steve]. Good morning and thank you for participating in United States Steel Corp.'s first quarter 2009 earnings conference call webcast. 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 first quarter, and then Gretchen Haggerty, U.S. Steel Executive Vice President and CFO, will comment on the outlook for the second quarter of 2009. Following our prepared remarks we'll be happy to take and questions. Before we begin, however, I must caution you that today's conference call contains forward-looking statements and that future results may differ materially from statements and projections made on today's call. For your convenience, forward-looking statements and risk factors that could affect 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 in our quarterly reports on Form 10-Q in accordance with the safe harbor provision. I must also caution you that last evening we announced a public offering of common stock and convertible senior notes. SEC rules limit what we can say during the offering. While we are allowed to talk about our results and business, there may be some questions that we will be unable to answer. Also, we are on a tight time schedule with our annual shareholders' meeting, so we will need to end this call by 8:25 a.m. Now to begin the call, here's U.S. Steel Chairman and CEO John Surma.

Thank you, Dan, and good morning, everyone. Thanks for joining us. We appreciate you all amending your schedules to join us a little bit ahead of our original plan. Yesterday for the first quarter we reported a quarterly loss of $439 million or $3.78 per diluted share, including a $0.06 per share favorable net effect of two non-operating items which I'll mention in a moment. Before I get into more detail on the results I'd like to discuss some of the actions we announced yesterday to enhance our liquidity position, address the covenants in our existing revolver and term loans, strengthen our balance sheet and position us for growth over the longer term. Our Board of Directors reduced our quarterly dividend from $0.30 per share to $0.05 per share. This difficult but necessary step will conserve approximately $116 million in cash on an annual basis. We have received executed consents from the lenders under our $750 million credit facility and the $655 million of outstanding term loans to eliminate the existing financial covenants and replace them with a fixed charge coverage ratio that is only tested if availability under the $750 million credit facility falls below a specified level. When the amendments become effective, which we anticipate will be later in the second quarter, pricing will be adjusted to current market levels and we'll be required to provide collateral principally in the form of inventory. In conjunction with these amendments we've agreed to amend our $500 million receivables purchase agreement to revise the pricing and amend certain other terms and conditions. We announced a public offering of 18 million shares of common stock and $300 million of senior convertible notes due in 2014. Neither the completion of the convertible notes offering nor the completion of the common stock offering will be contingent on the completion of the other. We intend to use the net proceeds from the offerings to repay our term loans and to use any remaining proceeds for general corporate purposes. We have substantially reduced our estimated capital spending for 2009 from the $740 million that we discussed last quarter to $410 million. That compares to the $735 million we spent on capital in 2008. The remaining amount consists largely of required environmental and other infrastructure projects that are already under way. A large portion of the $330 million reduction from the previous estimate is due to the delay of our previously announced coke plant modernization project at Clairton. We generated significant cash flow from working capital reductions in the last two quarters, including a substantial reduction in accounts receivable. We expect continued cash flow from further working capital reductions over the balance of 2009 which we expect will be generated largely from reductions in inventories. We reached agreement with the United Steelworkers to defer $95 million in contributions to our trust for retiree health care and life insurance and further the USW has agreed to permit us to use all or part of the $75 million in contribution we made in 2008 to pay current retiree health care and death benefit claims. In addition to layoffs and an early retirement program, we had previously placed a freeze on hiring and annual merit-based salary increases. We discontinued the company match on our 401(k) program and discontinued all nonessential travel and other outside services costs. As a further demonstration of our leadership's strong commitment to do what is necessary during these very difficult times, effective July 1st my base compensation will be reduced by 20%, other executive base salaries will be reduced by 10%, general manager salaries will be reduced from 5% to 10%, and fees for our Board of Directors will also be reduced by 10%. Also I informed the compensation and organization committee of our Board of Directors that I am declining to be considered for any 2009 long-term incentive grants this year since my existing long-term incentive grants and direct share ownership provides sufficient incentive and alignment with our shareholders' interests. The committee accepted my recommendation. You can find more detail about all these matters in our 10-Q, which was filed last evening. Although difficult, these actions position us well to participate in an economic recovery when it occurs, as it inevitably will. We believe that steel will remain the material of choice in many important and exacting applications and we have the right people, facilities and technology to deliver the steel solutions our customers need. In addition to all of the actions I just described, we continue to focus on reducing our costs and operating as efficiently as possible, even at these very low utilization levels. Although this is a difficult operating environment, we have maintained our focus on safety. I'm pleased to report that our long-term trend of improving safety performance continues. Year to date our global OSHA reportable case rate has improved 33% from our 2008 performance, while our global days away from work case rate has held steady at 2008 levels, which was the best for employee safety in our company's long history. We remain firm in our commitment to drive our business with the safety and well-being of our employees as our key core value. Our drive to zero injuries and incidents is relentless and it's the right thing to do for our employees and our business. Now let me turn back to our first quarter results. We reported a first quarter loss from operations of $478 million, which included a pre-tax net gain of $97 million on the sale of a majority of the operating assets of the Elgin, Joliet and Eastern Railway Company at a pre-tax charge of $86 million related to the voluntary early retirement program accepted by approximately 500 non-represented employees in the United States. Net interest and other financial costs in the quarter included a foreign currency loss that decreased net income by $28 million or $0.24 per diluted share related to the re-measurement of a U.S. dollar denominated intercompany loan to a European affiliate and some related euro-U.S. dollar derivatives activity. Let me look at our segment results for a moment. In the first quarter we recorded a pre-tax charge of $90 million related to the recognition of estimated future layoff benefits for approximately 9,400 employees associated with the temporary idling of certain facilities and reduced production at others, with $72 million of that allocated to the Flat-rolled segment and the remaining $18 million to Tubular. Our North American Flat-rolled segment had an operating loss of $422 million in the first quarter. In addition to the $72 million charge I just discussed, the Flat-rolled results included approximately $230 million of continuing employee and other costs associated with our idle facilities, including fuels, utilities, depreciation and allocated corporate costs. As a result of weak demand and the continued destocking of inventory throughout the supply chain, our Flat-rolled segment operated only 38% of raw steel capability in the first quarter, down from 45% in the fourth quarter of 2008 and somewhat below the industry average for the first quarter of 43%. Operating at these very low levels significantly reduced our consumption of natural gas, resulting in a $50 million charge in the first quarter for excess natural gas purchase commitments which were subject to marked-to-market accounting as we took steps to dispose of the excess amounts. Compared to our fourth quarter results, shipments decreased 24% to 2.1 million net tons and averaged realized prices decreased 11% to $715 per net ton. We had an operating loss of $159 million for the first quarter in our European segment. Although we're facing weak demand and inventory destocking in our European markets, shipments remained close to last quarter's levels and capability utilization rose slightly to 55%. While average realized prices were off by more than 20% to $672 per ton, we started to realize the benefits from lower raw material costs and reduced spending. For the Tubular segment operating income was $127 million in the first quarter, significantly below our record performance in last year's fourth quarter. This severe downturn was primarily as a result of reducing drilling activity due to lower oil and gas prices, as well as unprecedented levels of unfairly traded and subsidized tubular imports from China. These market conditions resulted in a sharp decline in shipments, falling prices and high inventory levels. The Tubular results also reflect idle facility carrying costs of approximately $20 million and an $18 million share of the charge recorded for future layoff benefits that I referred to earlier. Let me now turn the call over to Dan for some additional information about the quarterly results.

Thank you, John. Capital spending totaled $118 million in the first quarter and, as John mentioned earlier, we are now estimating that full year capital spending will be $410 million. Depreciation, depletion and amortization totaled $115 million in the first quarter and we currently expect it to be approximately $620 million for the year. Pension and other benefit costs for the quarter totaled $164 million. Included in this total were $74 million of charges primarily related to the early retirement program. We made cash payments for pensions and other benefits of $159 million. For the full year we expect our pension and other benefits cost to be roughly $440 million and we expect cash for pension and other benefits to be approximately $525 million. Net interest on the financial costs totaled $71 million in the first quarter and included a foreign currency loss of $34 million. Our effective tax benefit rate of 20% in the quarter was lower than the statutory rate because losses in Canada and Serbia, which are jurisdictions where we have recorded a full valuation allowance on deferred tax assets, do not generate a tax benefit for accounting purposes. Lastly, for the quarter we averaged 116.1 million fully diluted outstanding shares. Now Gretchen will review some additional information and the outlook for the second quarter.

Thank you, Dan. In the first quarter cash flow provided by operating activities was $309 million, including a working capital benefit of $790 million. Cash flow provided by investing activities was a favorable $116 million as the $300 million cash proceeds from the sale of a majority of the operating assets of Elgin, Joliet and Eastern Railway Company exceeded our capital spending and other investing activities. The total change in cash was an increase of $407 million in the first quarter and we ended the quarter with over $1.1 billion in cash and total liquidity of approximately $2.5 billion. Turning to our outlook, we continue to face an extremely difficult global economic environment. We expect an operating loss in the second quarter as our order book remains at low levels and idle facility carrying costs continue to be incurred. Extremely short lead times, coupled with the uncertainty surrounding financial markets and steel-consuming industries such as automotive and construction make it difficult to forecast beyond a very short horizon. The second quarter 2009 Flat-rolled results are expected to improve slightly as compared to the first quarter of 2009 primarily due to the accruals in the first quarter for estimated future layoff benefits and losses on excess natural gas purchase contracts that John mentioned. These effects are expected to be offset by lower average realized prices and additional idle facility carrying costs. Shipments are expected to be in line with the first quarter of 2009. We expect an operating loss for U.S. Steel Europe in the second quarter of 2009, with improvement compared to the first quarter of 2009 primarily due to lower raw material costs, sales of CO2 emissions allowances, and efficiencies resulting from consolidating European raw steel production to U. S. Steel Kosice in early April. These items are expected to be partially offset by lower average realized prices. Shipments should be in line with the first quarter level. We expect an operating loss for Tubular in the second quarter of 2009 due to a continuing decrease in shipments and lower average realized prices as compared to the first quarter of 2009, reflecting lower oil and gas exploration, high inventory levels, and the surge of unfairly traded and subsidized product from China. Dan?

Thank you, Gretchen. Steve, can you please queue the line for questions?

(Operator Instructions) Your first question comes from Dave Martin - Deutsche Bank. Dave Martin - Deutsche Bank: I had two questions on costs. On the ongoing costs in the Flat-rolled business, could you detail what's included and maybe give us a breakdown of what's included and what the change would have been quarter-over-quarter?

Sure, Dave, I'll try. I mentioned a couple of them in my remarks, but with respect to quarter-over-quarter, I don't have an exact figure but we were just in the process of idling facilities in the fourth quarter, so we weren't really seeing it that way and trying to keep track of it that way, quite frankly. We did feel it was important to give you a sense of what the effect was in the quarter. So the majority of the $230 million or whatever the number was I mentioned, the majority of that was related to facilities that had been idle for the entirety of the first quarter - Great Lakes, Granite City, Keewatin - and a bit for some of the Tubular facilities in Lake Erie, which was idled later in the quarter, and then some of the coke operation as well. But the biggest chunk was for several integrated plants and the iron ore operation, which was out for the entire period. So I don't have a good comparison of the fourth quarter, but it would have been less just because the facilities weren't idle for that much of it. In terms of categories, we do have fuel and utilities to keep, you know, boiler houses heated up and water circulation and steam generation, etc. There is some continuing employment cost, staff cost, although we're continuing to whack that down, and some also for represented labor just for maintenance and fire watch and security, etc. We also have some continuing costs for contractual commitments for industrial gases and other services that we're trying to minimize, reschedule, reduce, but some continuing carrying cost there. Depreciation, allocated headquarters costs - I'm not sure I'm missing anything. Gretchen?

We had a large LIFO credit in the fourth quarter.

Yes, but in terms of idle facility costs that really wouldn't affect it too much. So I think those would be the major categories, Dave. Dave Martin - Deutsche Bank: And then secondly, can you comment on second quarter costs in the Flat-rolled business and maybe provide an estimate of how much costs will decline on a per ton basis?

It's hard to do on a per ton basis. Again, we're trying to isolate the idle facility costs. There's a few things going in different directions there. In the one instance we will have at least at this moment, I'm not predicting anything, but we have an additional larger integrated facility idle, that is the Lake Erie plant in Canada, we just brought that to an idle status in late March, mid to late March, if I recall right, so there wasn't much from that in that idle category. That'll be idle - it is idle now - and for all or part of the second quarter, so that would be a higher level of cost that would be included in what we're isolating, really for your use as cost. We did make two accruals that would have the effect of accelerating the accounting recognition of some cost items into the first quarter under the accounting rules, I'm told. The layoff benefit accrual I described of $78 million, I think, for Flat-rolled, and then the natural gas accrual of about $50 million. Those will moderate cost effects in the second quarter, but otherwise we'll continue to try to reduce things. We're trying to get boilers off and reduce employment cost and reduce spending and reschedule commitments, but in 40% land, as I describe it, there's a pretty significant chunk of that that's going to take us a little time to work down.

Your next question comes from Kuni Chen - Banc of America Securities. Kuni Chen - Banc of America Securities: Are you guys able to talk sort of in a broad sense about how you can position the business to be more competitive going forward, maybe talk about some of the cost reduction goals over a longer period of time. Are you trying to take out $200 a ton, $300 a ton of costs, and maybe give some examples around that?

I wish I had these examples of reducing costs by $300 a ton, Kuni. That's a very difficult thing for us to do or for anyone to do, for that matter. I think in terms of our competitive position, we earned $18 a share last year, so I would submit that was moderately competitive in a world where U.S. steel apparent demand, according to the international forecast, is projected to be 68 million tons or some number like that. That's kind of a 1950s level and that's a very difficult world for us to manage our costs down in a short period of time. In Europe, let me just start there for a moment, in Europe our costs will come down pretty significantly beginning in the second quarter because our overall raw materials position there is a merchant position and instead of buying ferrous inputs at $120 a ton we're in the $65 a ton or $75 a ton range now. That'll start to filter through; Gretchen mentioned that in her comments. Likewise with the carbon inputs in Europe. So I think in Europe, being a merchant producer, that'll move down pretty quickly. In the U.S. that's a much more difficult process. Our [inaudible] costs are our costs and while they're as competitive with anybody in the world, we think, they're not going to change much under this environment, and our coal costs will actually go up a bit this year from last year because we did a good job of buying our coal last year in 2007. When you take those larger material categories out, the kind of cost changes you're talking about are difficult. It might lead you to other configuration considerations, but really I have nothing to say on that at this point. Kuni Chen - Banc of America Securities: And then just as a follow up, I noticed that there was some deferred retiree payments. You were able to get some concessions there. It seems like that could be the tip of the iceberg. Can you maybe talk about what other discussions you might be having with the unions to try to get some more concessions going forward?

I wouldn't describe it so much as a concession as it just was an idea that we and the union were able to agree on that was in the best long-term interest of the company and I think that's how we try to work, cooperatively with the union leadership. That was one item we could deal with. There are a variety of other matters we talk about all the time to try to maximize productivity and make sure that we're doing the best thing for the company while also being faithful to the agreements that we have. I don't want to get into too much labor negotiation on the phone, of course. You can appreciate that. But quite honestly, our labor contract is very competitive. The productivity provisions are very good; we're able to be very flexible on labor. And while we'll continue to manage that cost item as aggressively and appropriately as we can, any sort of near-term major changes may be more difficult to achieve because, again, the amount of actual production we have, the amount of labor we're using for that, it's probably not our biggest cost issue right now.

Your next question comes from Jeff Cramer - UBS. Jeff Cramer - UBS: I was wondering if you could just comment on from a volume perspective the mix between spot and contract sales during the quarter and how that shaked out and do you see shaking out in the second quarter?

Yes, we usually talk about sort of a 50/50-ish kind of a blend between contract and spot. That's been blurred a little bit because three or four years ago contract meant one-year fixed price for everything. Our contract business has had a little bit more flexibility introduced into it together with our customers and through discussion with them. So we have contracts that have some variability, either based on cost inputs, which we agree on a scorecard to measure and/or some market input, you know, one of the public indices that you can see in the publications every day. And so even the contract business will have some variability. But generally speaking, our contract business is a larger proportion now just because some of the contract industries have held up relatively speaking a little better than some of the spot industries we sell to. Neither one are doing very well, of course, but I think the blend now might be more 60/40-ish, something like that, maybe a little bit higher than that. Jeff Cramer - UBS: And maybe for Gretchen, just on the revolver, is that only going to be secured by inventory and is it subject to advance rates?

Yes, it is subject to advance rates. That's a very typical structure. It's primarily inventory. You know, there's some other excess accounts receivable and things that go along with that, but it's primarily inventory. Jeff Cramer - UBS: Do you expect to be $750 million? I guess I'm curious why you went down this route versus a straight [inaudible] revolver.

Well, we had been operating with a secured credit facility since 2001 until about 2007 when we put this unsecured $760 million revolver in and really, in order to facilitate getting the amendments to drop the existing financial covenants out of the revolver and out of the term loans, the $655 million of term loans we have outstanding, we just concluded that it was appropriate to, in addition to revising pricing, agree to go back to a borrowing base type secured facility. Now the thing that we have to keep our eye on is that of our existing inventory, the first $655 million goes to the term loans, you know, whatever eligible inventory there is; there's a lot of definition around that. We just think that we can't say - and you'll see from our disclosures - that we're always going to have enough collateral to support the $750 million of revolver, so that's why we are trying to repay the terms loans. But that'll free up whatever's left if we're able to do that for the revolver and be less likely to have that constraint.

Your next question comes from Luke Folta - Longbow Research. Luke Folta - Longbow Research: My first question, you've thrown a number out there for raw material costs in Europe, the $65 - $70. I'm assuming that was iron ore. Can you give us an update on what the approximate met coal/coke cost would be over there in the second quarter?

The number I mentioned was in fact ferrous inputs and that's just one element. I think I was thinking [inaudible] probably; it'd be different for [inaudible], different for lump ore. The coal cost would have had the same general trend. The numbers would have been higher and maybe our coal cost was over 200 and maybe it's coming down to 110, 120, something like that. I'm just trying to do it from memory, but I think it would be roughly probably in the 120 - 130 and it was probably a bit higher than that at the peak of the merchant market that we were buying in last year, probably 180 to 200, something in that range, maybe even higher. Luke Folta - Longbow Research: In your Tubular business, can you either give us kind of a monthly breakdown of shipments or just tell us where you left the quarter from a capacity utilization standpoint?

Well, I can't. I don't have it in my head monthly. I can just tell you that during the first quarter the trend was a pretty sharp decline, starting really at the very end of the year and then running through the first quarter. I think we tipped you off on that in our earnings outlook in the January discussion. And at this point we have really all of our welded Tubular - this is all in the disclosure - we have all of our welded operations are effectively idled at the moment. Maybe there's some sporadic runs, but very little. We're really serving whatever market we have, which is not very much thanks to the import situation, from our two seamless plants in Lorraine and Fairfield, Alabama. So we're just running the two seamless mills - three mills, two plants. Even they are at a reduced schedule, so it's not easy for me to give you a capacity utilization rate, but if I had it, it wouldn't be very high. Luke Folta - Longbow Research: If I could just ask one more quick one regarding your iron ore costs domestically, I'm sure with the utilization so low fixed cost absorption's a lesser amount. Can you kind of just give us a ballpark quantification of what the quarter-over-quarter increase in per ton iron ore costs in North America?

I don't have that in my head, either. I'm just going to be guessing. I think we went into the year - and I'm going to give you a delivered number; that's the number I typically look at - production plus transport to the Midwest furnaces would have been in the, I don't know, $50-ish range probably. And when we look at the drastically reduced tons I don't keep track of it that way because we've isolated the idle facility costs, but it would be, if you took all the costs over those much fewer tons, it would be a much higher number. It would probably be in the $60s, I would guess, something like that.

Your next question comes from Timna Tanners - UBS. Timna Tanners - UBS: If you could give us - maybe if Gretchen could go through and give a little bit more detail on how to think about working capital liquidation? It was a really big number in the first quarter and you anticipate further. But could you give us a little bit more detail around that?

Let me just start while Gretchen's getting her 10-Q handy. I'm going to use just the earnings release; it's a little simpler. But I think, as Gretchen's remarks mentioned, the first quarter working capital pool was largely receivables. There was some inventory, but you could see the components, I think, in the 10-Q. I think we harvested a lot of the receivables now. A lot of that was the large flow through from our [inaudible] in the fourth quarter of last year. We would be looking forward to future working capital, but it would be largely from inventory. Timna Tanners - UBS: Right. I mean, inventory came down quite a bit already, so days outstanding was already 42 and I'm just wondering if there's any further color that you might have there.

No, I think that there is some room there. One of the things, you know, just one of the considerations, Timna, is that we have not rushed to idle our coke facilities; we've been running them on extended coking times and really waiting for a little more clarity on what the right direction there was. So now that we ran up a considerable amount of coke inventory and now we've idled our coke facilities, we have a fair amount of raw material inventory to draw down as a result of that. But we made pretty good progress over the fourth and first quarter on our [inaudible] inventories. We still have room to go, particularly on raw materials.

We did have a normal level of inventory on the pellet side and we're running those down as well with the idling of the pellet operations. We're also redirecting materials of all kinds but mostly coal coke and iron from the idle facilities to consume that at active facilities so we can generate cash from that as well. That seems to be a sensible thing to do. And we're going to try to minimize what we buy, particularly on the coal side, and we've made pretty good progress on that. There's discussion still going on; that's more of a commercial matter. I won't get into too much detail. And then I think, as Gretchen pointed out, on the steel side, including some material at idle facilities that we could convert and apply to an order, we've been doing that as well. So we're looking to take inventory down every way we can, but in a way that's consistent with still giving our customers what they need in this difficult market. Timna Tanners - UBS: The other question is if you could please give us a status report on the blast furnaces at Gary Works. There's reports in the media, as I'm sure you've seen, on No. 14 in particular and then some restart problems, I think, might have been smaller. If you could characterize those for us and give us any timeline you might have for restarts of those.

Yes, there's usually more reports than are necessary and you could decide how much of it's actually factual, but what the facts are is that the smaller furnaces are fine. We're making the iron we need. The large furnace, Gary No. 14, relatively new, did have an unexpected failure in some refractory lining in the hearth area. That furnace has been off for a week or so since it happened. We're doing diagnostics and have a fairly extensive technical team on site. We've got a medium-term repair plan that should have the furnace repaired and closed and beginning to get back in operation by the end of this week, early next week, something like that I think is the current schedule. Don't hold me to the days just because those things change pretty quickly. And then we'll run it at some reduced level just to make sure that things are okay until we feel more comfortable. It may be that we decide based on some more diagnostics and some more analysis and technical assistance that a more extensive repair in that area would be needed. It's not a huge thing if it is; it would just be a matter of scheduling. Unfortunately in this market we've got some flexibility to schedule. But our blast furnace issues have not in anyway restricted our ability, fortunately, to meet the customer demand that we have.

Your next question comes from Brett Levy - Jefferies & Co.. Brett Levy - Jefferies & Co.: It looks like you guys are in full covenant compliance after the amendments and this next transaction. Can you talk about kind of where you are with your banks and if there's anything coming up in the next couple of quarters where you're going to need additional amendments?

Well, Brett, we took these steps to avoid having issues later this year. We've received all the necessary consents we need from all our banks on the term loans and on the revolving credit facility. The amendment is subject to definitive documentation, which we expect to have in place by the end of the second quarter. And subject to collateral reviews and those sort of things, we don't anticipate having any problem getting that in place. And then once those amendments are in place, the only financial covenant we have will be a fixed charge coverage covenant, which only comes into play in the event that the availability under the revolver falls below a certain level, which is approximately $112.5 million, as we disclosed on our 10-Q. That is a similar type covenant that we had when we operated under a secured credit facility before, so we're pretty comfortable with that type of covenant. As long as we maintain sufficient availability under the revolver it shouldn't even come into play. Brett Levy - Jefferies & Co.: And what is liquidity pro forma for the transaction?

I'm not allowed to talk about the transaction on this call, so I think I just have to refer you to the prospectus supplement that's been filed; there's some information in there.

Your next question comes from Brian Yu - Citigroup. Brian Yu - Citigroup: John, if we assume that there's a slow recovery in apparent demand, what are the opportunities to reduce some of your idling costs, maybe by taking them off idle and complete shutdown? And also can you give us a sense of what the restart time difference is between the two?

Sure. The first part of the question, everything that we put back into production absorbs cost and we get additional product out, so the correlation is very direct of course. I don't have an algorithm that could easily be recited as to how it would work, but if you just look back in our quarterly data in the last two or three or four years, we've had occasional quarters where our North American Flat-rolled business ran at 65%, 62%, 69%, rates like that, and we were able to make a little bit of money, just above breakeven or around breakeven and basically earn a living. That correlation probably still holds relatively true today. When we get back up into the mid to higher 60s, things look a lot sunnier for us, but every percent or two certainly helps. In the interim since that time we've added a very strong position in Tubular that can take away a good bit of Flat-rolled when it's operating and we would think that gas is good, natural gas is going to have a pretty bright future in whatever energy policy there is, and to the extent that the gas markets, energy markets come back and the price gets up to where drillers want to drill again and we need to make pipe again, that adds a little bit of strength to our Flat-rolled operation as well and that would be a positive for us. In terms of restart, it isn't a very lengthy process, furnace by furnace. We have to put some natural gas onto the stoves to get the blast stoves heated. That takes Week 2. And we get those to the right temperature, fill the furnaces with material, and we have a few days worth of operation that doesn't produce anything usable and then after that it's usable. And maybe it's $1 million worth of scrap and slag and we're back in business. So it's a little bit of money, a little bit of time, but quite predictable and quite achievable and we can do it relatively quickly. Brian Yu - Citigroup: What in terms of idling cost savings, additional cost savings, you could realize if you were to shut down your facilities completed versus where you have them right now?

Well, that's a hypothetical that I'm really not prepared to get into much detail on. There are costs associated either way. There are costs associated with idling and costs associated with some more permanent action involving all the components - environmental, labor, facility contract - and we've done that before over many decades. We have some experience in it. But I don't have any real good figures to give you at this point on that.

And there's opportunity costs in taking that permanent of a step.

Yes, I mean, there's risks to moving quickly and risks to moving slowly and we try to avoid risks generally speaking. I mentioned to someone recently that when we acquired National Steel in 2003 there was a school of thought - not by us, but a school of thought - that Granite City Works was something that should be shut down. We looked at that and said no, it doesn't seem like a good idea. Had we shut that down we would have missed over $1 billion of operating results since that time. So I think those are questions which have to be given pretty deliberate thought. Not that we don't think about it, but really nothing definitive to say now. Brian Yu - Citigroup: In terms of your FRP guidance, does that assume no change in utilization rates and current steel prices?

Well, it really assumes what we can see, which is what you just described.

Your next question comes from [Eliott Glazer - Unidentified Firm]. Eliott Glazer - Unidentified Firm: John, can you give us your impression of the Chinese steel situation in terms of production and imports into the United States? The China Iron and Steel Association Sunday was quoted as saying "The production of crude steel has rise since December from 1.2 million tons a day to 1.4 million. Some have accused them of subsidizing steel companies, offering preferential tax rates, giving access to low priced materials, and exempting Chinese steel firms from labor and [inaudible] rules." What is your assessment of the situation? Is your assessment that they're actually increasing their production still? And what about their imports into the United States now that Europe has restricted Chinese imports into Europe? Are we looking at even more imports into the United States?

I think you've got a pretty good assessment of what I think about China already with some of the facts that you described. The steel industry in China is huge. It's hugely important to the world. It's hugely important to China. And all the factors you described, run by a tight-knit central authority - even though they're called companies, they're really just individual expressions of the government policy - they have their own view on environmental, their own view on subsidy, their own view on cost. And as long as that all stays inside China, they're welcome to their own view. When a product of that system enters the world trading system, it needs to respect the world trading system rules, the WTO - there are many cases at the WTO about this - and when it enters the United States or Europe it needs to respect the European and U.S. national trade policy. And in the Tubular sector, where OCTG imports from China in the fourth and first quarters were greater than end use consumption at values that were way, way below any cost structure based on market inputs would justify, together with export rebates and capital subsidiaries and everything else with it, we feel that's just beyond what trade laws would allow, either international or national. And as you saw, our industry participants and our union took action with a trade case filing just a week or so ago. It's really hard to tell and there are number of other trade actions already one the books - one that is winding its way to completion on line pipe, 16-inch welded line pipe, where we sought, together with other companies antidumping and countervailing duty both, antidumping being dumping below cost, countervailing duty being illegal subsidy. We won on both their [inaudible] and it'll make a very distinct impression on trade flows that are not in compliance with our national trade laws. We make no apology for that. That's what the laws are and they should be applied as far as we're concerned. Hard to tell what the real trajectory is for production and consumption in China. Recent reports suggest that industrial production and the property market and the other large steel-consuming industries in China may be doing a bit better, but very hard to tell. I think the policy in China of trying to reduce some of the older inefficient capacity and have larger, more efficient facilities is a sensible one. A policy which says they don't want to have extensive exports is a sensible one. So we'll have to wait and see what kind of behavior is actually entailed. The World Steel Association forecast, which was out over the weekend or yesterday or some time, you can see, I think, predicts 400 and some million metric tons of apparent steel demand from the China industry. That seems like a bit of a low figure to us, but it may well be right. I don't have really a good crisp view of the actual results in China at this point, but I can tell you it's something we watch carefully. I'm sorry for that long answer, but it was a good question.

Your next question comes from the line of David Gagliano - Credit Suisse. David Gagliano - Credit Suisse: Just following up on the contract versus spot question earlier, you mentioned more flexibility in the contract business. When were the majority of the contracts signed and when did they start to roll off? That's my first question.

That's a good question, David. Most would have been entered around the end of last year with the calendar start. That's a general rule - most but not all. And some portion - and I don't have these broken down - but some would be quarterly resets, some would be semiannual resets, and some would still have an annual factor. And there would be meaningful percentages across all three of those; I just don't have the breakdown in front of me right now. And there are some other contracts that because of history and customer preferences don't a year end date. We have some that we I think just worked on effective at the end of this month and some will be expiring at the end of June and we'll work our way through those as best we can. David Gagliano - Credit Suisse: My second question, you mentioned in the prepared remarks expected pension costs of about $440 million in '09, [inaudible], two questions. How much of that actually flows to the income statement for the full year and how much actually flowed through the income statement in Q1?

Let's see. Well, $440 million, that's our estimate of the year for both pension and OPEB. In the first quarter - $164 million. David Gagliano - Credit Suisse: And then my last question, just if you could quantify the LIFO impact in Q1 and the expected LIFO impact, if there is one, in Q2.

LIFO, it's hard to really forecast that. We did highlight it in the fourth quarter because really the significant decline at the end of the year ended up creating a significant LIFO credit. Really all that means is that it's just a costing approach, so maybe some of that should have been earlier in that year. There really isn't a significant impact in the first quarter really to talk about.

Your next question comes from Anthony Rizzuto - Dahlman Rose & Co.. Anthony Rizzuto - Dahlman Rose & Co.: I just wanted to follow up on that capacity utilization question again because obviously I do think it's critical in this environment. And with the Tubular acquisitions you've made, obviously with that market being very depressed, has that now reduced, if you were to look at that kind of breakeven level? It seemed like your comments were alluding to a breakeven level that might even have to be a little bit higher or capacity utilization that might have to be a little bit higher given the depressed state of Tubular right now.

Well, you have to, I guess, make an assumption about what's happening in each individual market, Tony. This is a very unusual time now because looking back over our history - Gretchen and I were talking about this last night - at least in our history it's unusual to have all three of our major segments in such difficult times at the same time. Generally, you know, we've had some counter cyclicality and they're generally running to slightly different markets, so that's been a real difficult thing for us that makes it even more difficult. But when we added the Lone Star Texas operations - let's just use a million tons for the sake of discussion - and after a short time we were sourcing virtually all that from either Granite City and Fairfield - well, let's just assume Granite City for the sake of discussion - that amounts to one blast furnace operation that would be supported by that and that would help us if the Tubular business was otherwise strong when the Flat-rolled business wasn't, which is not uncommon. That was a real positive for us. Not having the operation running now isn't necessarily negative, but it sure wasn't positive through the end of last year when we had what amounted to an existing furnace running to keep that operation filled. So I wouldn't imply too much precision that that will make future breakeven more difficult; it would just be a lot better of Tubular was going well and both the Texas operations and the seamless operations, because we're making rounds in Fairfield, when that energy market is strong it does tend to support our Flat-rolled utilization. Anthony Rizzuto - Dahlman Rose & Co.: How do you see the second half playing out, John, with respect to the auto situation, destocking at service centers. Everything else remaining the same, how do you see the situation evolving from that perspective in some of your other key end markets outside of Tubular?

I wish I had a good crystal ball, Tony, but it hasn't been working well recently. We sure hope that things improve, but we don't really have anything empirical in front of us today that tells us that. The lead times are short. We talk to our customers about what they see through the end of the year and their general response is we're not sure either, so no one really has much visibility. There are uncertainties in the auto sector that could yet be difficult for all of us to deal with. Maybe it works out well, maybe it doesn't, but it'll be something we have to get through. Certainly the credit markets making some progress and being more stable, that would be a hugely important thing because, whether it's residential, auto, appliances, a lot of that is more discretionary consumer oriented. That would be very, very important to us. You know, we look at the inventories that we can see, and whether it's the European service center inventories, which have come down a little bit just recently, which was overdue, or the MSCI inventories here, we look at Flat-rolled and we're down to the lowest level in probably five years - maybe not low enough in terms of months' sales just because their in use sales have not been very strong. We would like to think that the production of the industry at 41% last week or whatever it was is probably below end use consumption and therefore the stock drawdown has to be continuing throughout the entire supply chain. But when that line crosses, usually there's a pretty good response, but we don't really see anything as far as we can - which isn't very far - that tells us that line's been crossed yet. But everyday we go like this we should be getting closer to it.

Your last question comes from Mark Parr - KeyBanc Capital Markets. Mark Parr - KeyBanc Capital Markets: One thing I was curious about - and, John and Gretchen, thanks for all the color that you've given on current operations and it's all really helpful - but I was just wondering, you know, with some of the changes that you've made and you've gotten buy in on this macro environment not only from the banks from the union, executive management, it really seems like there's a tremendous coordinated effort here to enhance and ensure the viability of your company, and I wanted to congratulate you on that.

Thanks, Mark.

Thank you. Mark Parr - KeyBanc Capital Markets: But I was wondering if you could provide a little more color on kind of how you view your liquidity needs. Given what you've done here, could you talk about the underlying assumptions that went into determining these are good things or these are the necessary things that we need to do? And also could you talk about are there any incremental things that you've got in your back pocket, kind of on an adjusting case basis, you know, things do not improve over the next 12 months.

I guess taking the second part of your question first, Mark, there's a couple of things. One, the agreement by the union to allow us to defer up to $170 million of contributions that we have made or otherwise would make, that's very helpful and I look at that as kind of a near-term pool of liquidity, if you will. Also in the past we have made significant voluntary contributions to our retiree health care trust and if you went back over the years and added up everywhere we said we made a voluntary contribution there, it'd be on the order of $130 million. So right there you've got about $300 million of a near-term liquidity pool that we could reimburse ourselves for retiree health care costs, so I think that's a very positive thing. Also, our pension plan, while we, as everybody did, had a tough time in the market last year, by virtue of our $1 billion of voluntary contributions there, we're at least in a position this year where we don't have to make a contribution should we not want to. So those are kind of what I call near-term flexibility, okay? But as far as our liquidity needs going forward, one of the things that we've been trying to position ourselves for and plan for is that as we've taken significant working capital out of our business and intend to continue to drive that down if operations stay where they are, at some point as things turn and it can turn pretty quickly - John talked about the inventory situation in North America - we're going to need some significant working capital build. So we're trying to position ourselves with all these actions to be in a good position as things turn around to not have real liquidity constraints as that comes to pass. And we're really trying to give ourselves as much flexibility for as long a period of time as possible.

Thanks, Mark. I appreciate your comment, by the way. The conclusion you reached was precisely what we hoped thoughtful observers would reach, that we're trying to demonstrate in every one of the companies involved and making sure we do the right thing, so I very much appreciate your very thoughtful comment.

There are no further questions in queue at this time. Please continue, sir.

That's it for the day. We do have a tight time schedule and we appreciate you getting up this morning to be with us.

Yes, thanks for changing your plans.

We'll talk to you again next quarter.

Ladies and gentlemen, that does conclude our conference call. On behalf of today's panel I'd like to thank you for your participation and for using AT&T. Have a wonderful day. You may now disconnect.