Dan Lesnak - John P. Surma - Chairman, Chief Executive Officer and Member of Proxy Committee Gretchen Robinson Haggerty - Chief Financial Officer and Executive Vice President

Shneur Z. Gershuni - UBS Investment Bank, Research Division Brett Levy - Jefferies & Company, Inc., Research Division Luke Folta - Jefferies & Company, Inc., Research Division Kuni M. Chen - CRT Capital Group LLC, Research Division Anthony B. Rizzuto - Dahlman Rose & Company, LLC, Research Division David S. Martin - Deutsche Bank AG, Research Division Evan L. Kurtz - Morgan Stanley, Research Division Michael F. Gambardella - JP Morgan Chase & Co, Research Division Timna Tanners - BofA Merrill Lynch, Research Division David Katz - JP Morgan Chase & Co, Research Division Arun S. Viswanathan - Longbow Research LLC Mark L. Parr - KeyBanc Capital Markets Inc., Research Division Sohail Tharani - Goldman Sachs Group Inc., Research Division John Tumazos Aldo J. Mazzaferro - Macquarie Research David Gagliano - Barclays Capital, Research Division Michelle Applebaum Richard Garchitorena - Crédit Suisse AG, Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the United States Steel Corp. First Quarter 2012 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, the conference is being recorded. I will now turn the conference over to our host, Manager of Investor Relations, Mr. Dan Lesnak. Please go ahead.

Thank you, Ernie. Good afternoon and thank you for participating in today's earnings conference call and webcast. For those of you participating by phone, the slides that are included on the webcast are also available under the Investors section of our website at www.ussteel.com. We will start the call with introductory remarks from U.S. Steel Chairman and CEO, John Surma, covering our first quarter 2012 results. 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 a few financial matters and our outlook for the second quarter of 2012. Following our prepared remarks, we'll be happy to take your questions. Before we begin, I must caution you that today's conference call contains forward-looking statements, and that future results may differ materially from statements or projections made on today's call. For your convenience, the 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 provisions. Now to begin the call, here is U.S. Steel Chairman and CEO, John Surma. John P. Surma: Thanks, Dan, and good afternoon, everyone. Thanks for joining us. Earlier today, we reported a first quarter net loss of $219 million or $1.52 per diluted share on net sales of $5.2 billion in shipments of 5.7 million tons. Excluding the loss on the sale of our Serbian operations and gains from a domestic asset sale and property tax settlements, our adjusted net income was $110 million or $0.67 per diluted share as compared to adjusted net losses of $1.03 per share last quarter and $1.16 per share in the first quarter of last year. Improving demand and pricing for our Flat-rolled and Tubular segments were the primary drivers of the increases in our operating results from the fourth quarter. Our segments' operating income was $295 million in the first quarter, a significant improvement from the $4 million we reported for the first quarter of 2011. Our Flat-rolled segment income from operations improved by $219 million or $54 per ton, and our Tubular segment continued to produce strong results, improving by $97 million as compared to the first quarter of last year. Our Flat-rolled segment income from operations for the first quarter of $183 million. Average realized prices increased in the first quarter as increases in annual contracts and spot prices more than offset lower prices on our quarterly index-based agreements. Raw steel production and shipments reached their highest levels since the third quarter of 2008, as our utilization rate exceeded 90% at our U.S. facilities and was 83% for the entire segment. Our first quarter results also reflect the cost benefits from a strong and consistent performance by our operators. And we applaud them for their strong efforts. Our improved operating levels throughout the first quarter reflect favorable conditions in most market segments. Demand from the automotive, industrial equipment, agricultural and pipe and tube markets was good in the first quarter, yet remained volatile during the quarter in the more spot-oriented service center and converter markets. Mild winter weather positively impacted the construction segment in the first quarter. However, the overall demand in the U.S. construction market remains relatively weak. Results improved for our European segment in the first quarter. While the sale of our Serbian operations was the primary reason for this improvement as we had a loss of $17 million in Serbia in the first quarter as compared to a $67 million loss for the fourth quarter, results at U.S. Steel Košice began to improve. Results at USSK improved by $5 million as compared to the fourth quarter, reflecting lower raw materials costs and increased shipments. Shipments increased 7% in the first quarter to 972,000 tons, reaching their highest level since the first quarter of 2011. Although average realized prices were lower than the fourth quarter, spot prices reversed the declining trend they had coming into the quarter and increased throughout the first quarter. As a result of higher shipments, lower materials costs and increased spot prices, USSK did record a small operating profit in March and we entered the second quarter from an improved position. Our Tubular segment posted another strong performance in the first quarter, operating income of $129 million. Shipments of 529,000 tons were a quarterly record for our Tubular segment. Average realized prices increased for the fourth consecutive quarter, reaching their highest level since the first quarter of 2009. These increases were partially offset by higher substrate costs for rounds and hot-rolled bands supplied by our Flat-rolled segment. Drilling activity in the U.S. continued at a high level in the first quarter. The quarterly average rig count was one of the highest in decades and continues to drive demand for energy-related Tubular Products. The transition from natural gas direct to drilling to oil and liquids-based drilling continues, with onshore drilling for oil and increased activity in the Gulf of Mexico being significant drivers for the energy sector. We're making significant progress on the development of proprietary premium and semi-premium connections, and we'll be introducing new connections this quarter to meet the increasing requirements of our customers. Our evolving family of connections, as well as increased heat treat and finishing capabilities are enabling us to meet the higher demand for these products, driven by the growth in shale resource development. In the first quarter, we opened our new Innovation and Technology Center at our Houston Tubular office. The new center presents our Tubular Products services, inspection and testing capabilities, and our commitment to the research and development required to become a full solution supplier of choice. Similar to our automotive center in Detroit, the Innovation and Technology Center was built to serve our customers, and reflects the level of commitment we have to the energy industry and the value we can offer our customers. While our markets are gradually improving, the economic recovery is certainly not complete. And we continue to focus our efforts on the opportunities we have to maximize the value of our assets and develop a world-class cost structure that can compete across a wide range of market conditions. Engineering work continues on defining the scope of an expansion of our iron ore operations at Keetac that will position us to benefit from a long-term, cost-competitive natural gas environment to produce low-cost iron units in the form of DRI that can then be used in our existing operations, or possibly in an EAF, to increase our operating flexibility. We remain focused on improving our carbon costs through both the substitution of competitively priced natural gas for coke in our blast furnaces and by increasing our overall coke self-sufficiency as our Carbonyx facility at Gary Works goes into production this year when we complete the new C-Battery at our Clairton coke plant. I've already mentioned the significant product development efforts we are pursuing at our Tubular segment. And in Flat-rolled, we're on track to start our new continuous annealing line at our PRO-TEC automotive joint venture in Ohio in early 2013. That facility will position us to support our automotive customers and meet their requirements for the advanced, high-strength steels that will keep steel as the material of choice for future generations of vehicles. Now, I'll turn the call over to Dan for some additional details on the first quarter. Dan?

Thanks, John. Capital spending totaled $189 million in the first quarter, and we currently estimate that the full-year capital spending will be approximately $900 million. Depreciation, depletion and amortization totaled $163 million in the first quarter and we currently expect it to be approximately $650 million for the year. Pension and other benefits costs for the quarter totaled $130 million. We made cash payments for pension and other benefits of $137 million. In addition to this $137 million, we also made a $140 million voluntary contribution to our main defined benefit pension plan during the first quarter. We expect pension and other benefits costs to be approximately $530 million in 2012, a decrease of $70 million from 2011. And we expect cash payments for pension and other benefits to be approximately $500 million in 2012, excluding any voluntary pension contributions and any contributions to our trust for retirees' health care and life insurance. Net interest and other financial costs were $50 million for the quarter, and we expect net interest and other financial costs to be approximately $70 million in the second quarter, which includes $18 million related to the make-whole redemption provision on bonds to be repaid in April, which Gretchen will discuss in more detail. And now, Gretchen will review some additional information and our outlook for the second quarter of 2012. Gretchen?

Okay. Thank you, Dan. Our cash flow from operations was $426 million for the first quarter, reflecting strong operating results and favorable changes in working capital, primarily due to reductions in raw material inventories that resulted from both seasonal effects and continued inventory reduction efforts. As you know, we've been focusing on reducing our raw material inventory, and we're pleased to report some results from these efforts. After deducting cash used in investing activities and dividends paid, we have free cash flow of $363 million in the first quarter. We ended the quarter in a strong liquidity position with cash of $652 million and total liquidity of $2.5 billion. During the first quarter, we took advantage of strong, high-yield capital markets to reduce our 2013 debt maturities, which improves our near-term financial flexibility. So in March, we issued $400 million of 7.5% Senior Notes due in 2022, and in April, we used those proceeds to redeem our $300 million senior notes that are due in 2013 that were due. Now, turning to our outlook for the second quarter. We expect all 3 of our operating segments to reflect positive results from operations, with total segment results consistent with the first quarter. Our European segment is expected to return to positive income from operations, reflecting improved average realized prices. Our Tubular segment is expected to perform well with results similar to the first quarter, and our Flat-rolled segment results are expected to decrease due primarily to higher maintenance costs. Shipments and average realized prices for our Flat-rolled segment are expected to remain comparable to the first quarter as end user demand remains stable and spot market inventories appear to be aligned with end user demand. Maintenance costs are expected to increase by approximately $50 million over the first quarter primarily for spending related to scheduled blast furnace and other maintenance projects. All other operating costs are expected to be comparable with the first quarter. While the economic conditions in Europe remain challenging, second quarter results for our European segment should improve compared to the first quarter. Average realized prices are expected to improve as higher spot market prices carryover into the second quarter and quarterly contract prices increase. Our shipments and utilization rates for U.S. Steel Košice are expected to be in line with the first quarter as modest seasonal improvements offset a slowdown in the restocking cycle. Operating costs are expected to be comparable to the first quarter. Second quarter 2012 results for our Tubular segment should remain consistent with the solid performance achieved in each of the past 3 quarters. Average realized prices are expected to remain near first quarter levels and operating costs are expected to be lower due to reduced spending levels. Our shipments are expected to remain strong but slightly below the record levels of the first quarter as end users continue to rebalance their inventory positions, as oil-directed drilling continues to drive the rig count, while natural gas drilling is being negatively affected by high storage levels and low prices. That concludes the outlook. Dan?

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

[Operator Instructions] And we'll be taking our first question from the line of Shneur Gershuni from UBS. Shneur Z. Gershuni - UBS Investment Bank, Research Division: My first question, I guess, is kind of related to, I guess, a big picture question about your cost structure on a go-forward basis. I was hoping you can sort of touch on a couple of things. First, if you can talk about the progress that you've made about putting more gas into the blast furnaces, and if you can sort of update us as to where you think the cost trend is headed longer-term. And maybe if you can also comment about Carbonyx and the C-Battery and so forth, and how all of it plays together as to how we should see your cost trend on a longer-term basis. John P. Surma: Sure. I'll just give you that big picture. I think we can do fairly easily. Our metallics costs are largely in the form of iron ingots we’re mining and producing ourselves in Minnesota and Michigan. We buy a little bit of pellets from third-party suppliers, less of that this year but still some at a higher cost. But overall, our pellets [ph] costs are going to be pretty stable at about where they have been in the last year or 2. On the scrap side, that's not a big piece of our charge but it's not inconsequential. But you can read about that every day and we can't add any more to what the world knows about the scrap market. We don't know very much, I don't think. On the fuel side, that's our single biggest cost we can manage. We've already got our coal purchase for the year, for the most part, at a slightly higher cost than last year. I think we bought wisely and our supplies are pretty well secured. So that piece of our cost structure should be about the same. By virtue of the expectation that our Carbonyx modules come on this year, and then early next year, late this year or late next year, our C-Battery comes on, we should be pretty well out to the purchased coke game. And that was a bad place for us to be, expensive, tight market, poor quality, hard deliveries. So we'll be much better off, both cost and operating-wise, to be out of that market. And then we have to do some battery rationalization as we reached the end of lives through different environmental settlements. But we'll be well positioned, we think, to not have to do a lot of new capital in coke, and our coke costs should be very stable, really coal plus some processing costs. And one of the ways we do that is the new facilities plus the increased use of natural gas. We've got a target of 100 or so pounds of coke replacement tracking back to exit rates in 2010. And we made pretty good progress there. We get a slowdown occasionally where we're doing projects on blast furnaces, and when we do that, the coke rates have to be higher for different reasons and we're bringing down, starting up. We can't do the same amount of gas there, but our target is still 100 pounds. We made pretty good progress and we've got expectations that we'll be looking at that kind of a reduction by the time we exit this year. Whether we achieve that or not depends on how quickly we get the projects done. Just a couple of big things we have to work on. One is our largest blast furnace. We've had a project we've been thinking about scheduling for some time and currently scheduled later in the year. Once that's behind us, we'll be able to use a lot more gas on that large unit. So I can tell you that from an economic standpoint, there's no reason not to use gas. We want to use as much as we can because the economics are overwhelmingly positive. We just have to make sure we can do that in a safe and responsible way throughout our operating infrastructure. So I'd say our cost structure overall should be stable. The more gas we use, the better it's going to get. The big plays, the carbon, the ferrous costs stabled, other operating cost should be stable. Next quarter, we have -- we called out to your attention some increased maintenance costs, largely around blast furnaces, chart that over long periods of time on a per ton basis, will be a little higher this year because we'll be doing some projects we didn't do during the real dark days, and we just run more tons and that requires more process work and more maintenance work. But there again, they come in clumps. It's awfully hard to predict that. But we'll be a little bit above the average, but probably higher second, third quarter, settling down a bit in the fourth quarter. But overall, that's been $15 a ton over a long time or $14. Maybe this year, it's $17, next year, it’s $16. So relatively modest amounts. That's probably more than you asked for, but that's a -- you asked for a broad-based, high-level cost structure -- it's pretty good right now. Shneur Z. Gershuni - UBS Investment Bank, Research Division: Great. Just my follow-up question, Gretchen mentioned a very sizable free cash flow number of generation this quarter. Even if I just out the working capital adjustment, it's still a very healthy number north of the 200 zone. And you've got it towards a similar operating income for Q2 as well, too. So you kind of would expect that to continue. I was wondering if you can talk about capital redeployment and maybe specifically talk about Keetac, when you would expect to look forward to green lighting it. And maybe, if you can walk through kind of the economics there of the iron ore production with a third-party, offsetting third-party purchases, as well as the economics on the DRI as well. John P. Surma: Sure. Well, the economics are pretty good all the way around, I think. And we're getting closer to making that decision one way or the other. And naturally, it involves trying to look at it in the long-term iron ore price structure, and so there's lots of experts on that, all of which we try to consider and think about the costs on our project, both capital and operating, would be such that we think it makes pretty good economic sense under most forecast curves. We've got to get ourselves comfortable about that before we actually pull the trigger. Secondly, it kind of tacks back to your last question. It's an $800 million or so project, could be bigger, could be smaller. But that's a big number for us and we've got to have some confidence in the way the world is heading. And we wouldn't want to get into that just before we go into another tailspin, not predicting that, but we want to think carefully about that and make sure we balance the risks appropriately. Once the project's done, the actual incremental production cost per unit of pellet is quite low. It's probably less than $50. And today, we're probably buying those tons that we do buy for more than $100. So you take that difference and multiply it times 1 million or 2 million, and it's quite a substantial savings that has a very positive impact on the return right away. And then if you take that, call it $50, and you put that into a DRI tunnel furnace with 10 Ms [ph] of gas and much is saved today, that's $40 to be generous to our gas friends, that's a -- with some operating cost on top of that, that's a pretty competitive iron yield as well. So that the cost on that are very, very favorable also if we're starting with our own pellets with today's gas structure. So two very, very positive opportunities for us.

Our next question is from the line of Brett Levy with Jefferies & Company. Brett Levy - Jefferies & Company, Inc., Research Division: One of your competitors actually went so far as to say second half will be better than the first half based on their outlooks for their own end markets. Broadbrush, are you thinking the same kind of thing? John P. Surma: Well, hard to say right now. I'll defer to Gretchen, maybe. I don't usually -- quite that far ahead. That's pretty far in this business. We've looked at our second quarter and said things look pretty good for us at least. I think the way I'm seeing the world right now is there's the potential for some degree of stability, which hasn't visited us much since 2008. There seems to be a pretty good supply-demand balance or at least a pretty good demand from our standpoint, and our supply cost structure relatively stable as I commented on. And prices seem to be in the zone, just based on the public reports, that we can earn a pretty good living at. So things look like stability might be happening without us really expecting it. But whether we can look out any further, Gretchen, do you want to comment any further than that?

No. I mean, our guidance, Brett, usually is from quarter-to-quarter. And things are looking pretty stable in that period of time. I think John commented on some of the positive things that we've seen on our underlying demand in many of our markets. And even on the construction side, things have improved a bit, but we're still at a pretty low base there. So probably some more momentum on the construction side would help the back end of the year. Brett Levy - Jefferies & Company, Inc., Research Division: And the second one is really on the pension side. I think you guys have guided to pension payments north of $500 million for this year and for 2013. But one's going to think that first off, there might be some legislation or some relief that you guys might be getting from some laws passed. Can you tell us a little bit about that? And then also just from an actuarial standpoint, about what is the age of your average pensioneer? And can you start to sort of see that point where the number of actives relative to the retired starts to actually move significantly in your favor?

I mean, I guess there's a couple of things in your question. First off, I think we gave you 2012. I don't think we gave 2013. But from the pension payment standpoint, it's been relatively stable, pension OPEB costs relatively. So -- but I guess what I would say from the makeup of our plan, a couple of things. We closed our main defined-benefit plan in the U.S. and now, the plans that we have in Canada as well, to new entrants. In the U.S., it was since 2003, and in Canada, just in our recent contract negotiations. So when we talk about pensions, we're usually talking about the main defined-benefit plan because of the funding requirements in the U.S. And so we've been in a situation where there's no new actives going in and our retiree base is declining, okay? So we call that the natural maturation of our plan. But it's really slowly, but we have a lot of retirees that in the late 70s, early 80s, mid-80s, so that's where the bubble of retirees came from. From a funding standpoint, we don't actually have mandatory funding requirements and haven't for some years. But we've been voluntarily funding at a level that is around or maybe a bit higher than what our normal cost has been running. So the $140 million that we put in this year really more than covers this year's normal cost. And I think that's what's put us in a reasonable funding state even in a very low interest rate environment. Now the legislation you're talking about, of course, is -- it's related to the very low levels of interest that we see now, which are really being artificially held at these levels by the Federal Reserve, and I mean for good and valid policy reasons. But it is having a tough effect on those with defined-benefit pension plans. So the legislation, we've seen some proposals, some to really affect that interest rate in a way that would make funding more stable. Some of that were dependent to Highway bills. We've also seen some action on maybe having separate legislation for that, which could come by the end of the year. But as you know, it's an election year and it's pretty tough to predict whether that will occur or not. But having said that, I think we've tried to manage the risks of our plan by funding proactively even when we haven't had a mandatory requirement.

We have our next question from the line of Luke Folta with Jefferies. Luke Folta - Jefferies & Company, Inc., Research Division: The first question, I wanted to get maybe a little bit more specific on the cost reduction initiatives. You provided some good, high-level kind of thoughts and I appreciate that. But just to get maybe more specific on the model, can you talk about relative to your goal of $100 -- excuse me, 100-pound per ton coke rate reduction leaving 2010 as one part, the actual decline we've seen in natural gas prices and how that flows through as a second part, and then just how much less merchant coke that you're buying. Kind of how those numbers compare to the 2010 exit rate or to last year, just to give us some sense of how to model these benefits going forward. John P. Surma: I may have to ask Dan to do a little digging on some of the historical stuff, which we'll get back to you on, but right now and really for all this year, we're not planning on doing any merchant coke-buying at all. And during 2010, I'm sure we did some. So we can produce for a number, we were buying for a much higher number. So that's a nice savings no matter how we look at it. Dan will have to go back and dig my memory, doesn't tell me how much we would've bought back in 2010. Likewise, on natural gas, I don't recall what the gas rep was back in 2010. We pretty well know what it is today. Dan can give you some specific numbers. I know he's been thinking about that. But on an absolute gas usage, we're going to use 125 million MMBtu's in North America, some number like that, plus or minus probably this year with the injection. So every dollar's got a nice number on its trip, got a nice number attached to it. Dan, do you want to comment on that?

No, I think you're right. Looking back at '10, we were at about $5. John P. Surma: Okay. So we're at least $2 lower than that probably today. And all the way, we've earned our tip ph] .

Probably $1.50 to $2. John P. Surma: Yes, so that's had some positive effect. Now the absolute number of MMBtus is probably higher this year than it was back then where we're running harder, plus we're using more on the injection side. And then on the injection, again, our sort of near-term goal is 100 pounds reduction. And there's -- we've given you some information before on our quarterly slides about what that means at sort of $4 or $5 gas versus $400 coke. It's got a nice economic benefit to it. We're probably about halfway there and we have blast furnace outages, as we will this quarter or have in this quarter, when there's some kind of an upset to a project. We have to back off and use more coke just from a furnace operating standpoint. So we haven't gotten to a stable 100-pound reduction. We probably flirted with it in certain months, certainly on certain furnaces. And we'll do a few projects this year that we are aiming to be exiting this year at the 100-pound level, which ought to be sustainable or around that number. And then there's some longer-term things that when we have a little more oxygen available in certain locations, we can probably up that a bit. But we're not dragging our feet on gas injection. We're using as much as we can within the limits we think are safe from an operating parameter standpoint because we don't want to go too far and have more hydrogen buildup than we need. That has really unpleasant consequences to it. So we're pushing that as hard as we can because the economics of gas at this level are just so good. Luke Folta - Jefferies & Company, Inc., Research Division: Okay. That's helpful. Secondly, on the maintenance costs, can you talk about what it is that you guys are doing that is resulting in that uptick in the second quarter? And can you help us understand what is the normalized -- what's a good representation of what your kind of normal everyday maintenance cost is? Is it the average of the first half or can you give us some sense of how to think about that going forward? John P. Surma: Sure. The matter that we referred you to in the earnings guidance about the $50 million item, we're talking there really about major maintenance projects that are scheduled and separately identified and managed. I don't have the numbers for our everyday, every shift, every turn maintenance cost, but it's -- not inconsequential, but it's part of operations. These projects that have the costs that we mentioned, the $50 million higher costs in the second quarter versus the first, I think, was the number, they're -- they typically would be related to larger blast furnace, the hot end related projects that are periodic and episodic. They're not every year, but they could be every 3 years or every 18 months depending on what else is happening in the particular operating parameters we've been working on. The average if -- and we analyze these and control them and schedule them for analytical purposes, control purposes. This isn't a GAAP measurement, but I think they're reasonably accurate. We keep track of it and measure it over time. So I think the long term average has been, Dan, correct me if I'm wrong, somewhere in the order of $14 a ton, plus or minus?

Yes. John P. Surma: $14 to $15, does that sound about right? And that number was much lower in the first quarter, and it'll be quite a bit higher in the second quarter because we didn't have any blast furnace outage projects scheduled in the first quarter, and in fact, we do in the second quarter. So we're working on, as we speak, one of the furnaces at Granite City, I think it's B-furnace. And we're doing one of the smaller furnaces at Gary later on this second quarter, at least that's our current plan. We have the right to change our minds, of course. When we do that, we will add in other work that needs to be done from a structural repair and replacement. We also naturally would do work on the oxygen furnace area. And we'll naturally do work in the hot strip mill and some other downstream activities because the iron flow isn't as great. So we end up doing a lot of maintenance that things will have to be done periodically all at one time. And again, I think the numbers are going to vary from quarter-to-quarter and period to period. It really depends on how much work we do. And it'll be a fairly elevated level on the second quarter compared to first. It's the reason we pointed it out to you. It'll probably be around that same level in the third quarter, depending if we go ahead with what we expect to do, but we could change our minds. And then we could do some flexibility on these projects. And then probably, it’d recede a bit in the fourth quarter, but those are just trends and we reserve the right to tell you exactly what's going to happen to quarter performance.

We'll go to the line of Kuni Chen from CRT Capital Group. Kuni M. Chen - CRT Capital Group LLC, Research Division: I guess just on the guidance for the second quarter in terms of Flat-rolled pricing, can you talk a bit about the mix there in terms of, sequentially, what's happening with the market-based pricing versus spot prices? Did the 2 sort of cancel each other out? John P. Surma: A couple of things, Kuni. I think the overall mix will be about like what you see on the pie chart we gave you. I think there was one in the pie chart, wasn't there? And maybe just a little heavier towards the sum of the firm and cost-based contract as some of our OEM businesses are pretty robust, and therefore, might be just a tad bit higher but more weighted on that particular aspect of the business. But that's okay. Those prices have been quite attractive and it's good business for us. Spot prices will be what they're going to be, of course, and you can watch that as much as we do. But on the -- the one thing we do have that's a positive would be, for sure, would be the second quarter versus first quarter quarterly based index contracts because the first quarter pricing was based on fourth to third, which was actually a relatively lower number comparing first to fourth as a pretty good-sized adjustment. You all can figure it out yourselves, but I think it's $63 a ton or something like that on what amounts to about 20% of our book. So it's a pretty good-sized adjustment. And those things together will keep our prices slightly higher as our current estimate, I think, we put in the outlook. Kuni M. Chen - CRT Capital Group LLC, Research Division: Great. And then just as a follow-up, I guess on the Tubular side of the business, obviously, you have this mix shift here between oil and gas. How do you see that playing out, positively or negatively, for your business as you look out over the next couple of quarters? John P. Surma: Yes, I think in general, over the medium-term to longer-term, we're sort of agnostic about that. We're more interested in seeing the number of rigs actually working to be a high number. That's good. And if there are not a lot of rigs drilling, if it happens to be for more oil than more gas. Our pipe works in either one and we think we're with the right partners and customers, very important people who are going to be drilling for liquids. And they're all making that transition from dry gas to either wet gas or oil. And in the meantime, as there's some physical transition going from play A to play B, there might be a bit of a pause in some of the business. We don't think it's going to be a lot just because they've got to get repositioned, both the rig and the material, and we want to make sure that we're in a position with them. So we've encompassed all that in our guidance, which Gretchen gave you, which is still for a pretty good quarter. Long term, as long as there -- I think that last week's number was 1973 or some number like that, if we're in that zone, I think over time, we're going to be just fine given what we can produce and also given some of the progress we've made on our proprietary connections. And then it would seem that there is some pretty good expectation of increased activity in the Gulf of Mexico, particularly the deepwater. We have some products which are very well suited for those applications and we've actually had some orders already. Those are big projects, lots of pipe, heavy gauge or thick wall, larger diameter, really good things for us. And the extent that comes back stronger, which we hope it will, that's a really positive for us in the medium to long term as well.

We'll go to the line of Tony Rizzuto from Dahlman Rose. Anthony B. Rizzuto - Dahlman Rose & Company, LLC, Research Division: It's a tough to please market out there, I think, John and Gretchen. Listen, I just have a couple of follow-ups here. First, I wanted to make sure that I heard correctly about the blast furnace outages. Did I hear you say that you're going to have some in the third quarter as well at a similar elevated level? John P. Surma: Well, we're -- in the current outlook, I think that's -- in our current plan, that's what we're expecting. But we've had lots of things that we plan and we decide to change it because business is particularly positive or because something else happens. So we've got a longer-range outlook that suggests that, that we won't really know until we do it. We may do them later, we may do them sooner. It all depends on how the market looks and what our capabilities are. But given as it currently stands, we'll probably do some work in the third quarter, and we normally would. Anthony B. Rizzuto - Dahlman Rose & Company, LLC, Research Division: Okay. And as far as Košice, did you guys -- are you building in any potential impact? I'm not quite sure what the overall mix is there, but I do think you have some auto there. And I think you were doing some upgrading in some hot-dip lines and things like that in recent years, but have you built in any potential impact for that resin disruption out of Germany? John P. Surma: No, Tony, not yet. Not in Europe. And you're correct, we have an excellent hot-dip line there that's automotive capable and is very strong in the automotive market. We don't know a whole lot more than everyone else knows except we have not been advised of any schedule changes in Europe or in North America. And we're advised that we're going to continue on the shipping and build schedules that we have, and that's what we're planning for. So we don't know any more than that and we're watching it as intently as everyone else is. The only gratuitous observation I would have is that we've been through these things, our automotive customers and friends have been through these things, whether it's a flood in Thailand or the terrible events in Japan, and the sector is extraordinarily resilient. And they find their way through these problems in extraordinarily positive ways. So we're expecting this to still be a pretty good year for automotive, but we're watching like everybody else is. Anthony B. Rizzuto - Dahlman Rose & Company, LLC, Research Division: Okay, good. And I just want to follow up a little bit. I'm sorry if I didn't hear this and you already answered it, but in terms of the purchases of merchant coke as kind of a baseline, and you guys -- I did hear you say that you're out of that market this year. I thought it was like a couple of million tons a year, if I'm not mistaken. Is that what you guys were purchasing? John P. Surma: Oh, yes. At one point for North America alone, we were in the 2 million ton zone and those were often $500 per ton tons. And it was not screened, there was poor stability and the furnaces would get plugged. It was really, really nasty stuff that was really expensive and we didn't like it at all. So I think we're out of that game and at least for the foreseeable future, should not be back into it.

We'll go to the line of Dave Martin with Deutsche Bank. David S. Martin - Deutsche Bank AG, Research Division: I had a couple of questions. First, just starting with the North American business and first quarter costs. I know your costs were down about $45 per ton quarter-over-quarter. I'm wondering if you could identify the key drivers of that change, including energy, and what impact just fixed cost absorbs in it? John P. Surma: Yes, I -- I'm not -- I'm never quite sure what the analysis you might be doing, Dave. I'm sure it's based just on the public numbers. But just a couple of things that might be a bit different. One is that our overall level of maintenance and other outage spending and overall labor cost, because of our relatively high rate of production, our overall unit costs were down from an operating cost spending standpoint. We had some positive effects from natural gas as the overall strip trended down. It took me a while about that. We would like it to be where our gas drillers are a little busier than they are today if we had a choice. We also had -- and I don't know if this is in your numbers or not, but we do -- we did have some iron ore pellet sales effects that were a large cost item in the fourth quarter. And I don't know how you're dealing with that. If it's in your number, that would be a big reason -- not having that in the first quarter would be a big reason that, that would've turned around. Those would be, I think, Gretchen or Dan, unless you have something different, those will be the couple of highlight categories I would give you. David S. Martin - Deutsche Bank AG, Research Division: Yes. Okay, that's helpful. I... John P. Surma: I'm sorry, we did -- we also had -- in the fourth quarter, we had some costs related to the ratification of the Hamilton labor agreements on bonus costs, things like that, startup costs. So I think really a couple of things there that I think we called out in the fourth quarter that didn't recur. So some of it is lower cost in the first quarter, some is higher cost in the fourth quarter. David S. Martin - Deutsche Bank AG, Research Division: Okay. And then also in the blast furnace work you're doing, as you see it today, how far would your operating rate fall in the second quarter? John P. Surma: I think we said for Flat-rolled that it would be comparable or something [indiscernible]. So...

Everything was pretty comparable but the maintenance spend. John P. Surma: Yes. So our expectation is that we'll be able to run hard enough, long enough, everywhere. And that assumes, of course, that we get started on time, which we did, and that we get finished on time, which I think we will, but we expect to be able to be pretty close to that same operating level. David S. Martin - Deutsche Bank AG, Research Division: Okay. And then lastly, on the capital projects, when you discussed the iron ore project that I think you noted a capital budget of about $800 million, can you put a capital budget around the DRI component of that? John P. Surma: We haven't gotten quite that far yet. But just a rule of thumb, I'm told that the -- they come roughly in million ton increments. It's about $250 million per million ton increments, so that's a pretty good size. So say $250 million per item.

We'll go to the line of Evan Kurtz with Morgan Stanley. Evan L. Kurtz - Morgan Stanley, Research Division: Just a first question here on the wording of the Flat-rolled guidance. You said that Flat-rolled results are decreasing primarily on the maintenance outage, not exclusively. And I just wanted to double check. Does that mean if you were to x out the maintenance outage, we would actually still be down a little bit?

Well, actually, I think, Evan, we went on to say that shipments in our averaged realized prices should be comparable to the first quarter and all other costs, other operating costs other than the spending should be comparable. So I think we're pretty comparable I think is what I would say. John P. Surma: And keep in mind, Evan, we've got about a 4-plus week in terms of the booking rates. So we still have a lot of business to do in June that we haven't booked yet, so there's still some questions about where prices settle and what our volumes are going to be. So we don't have absolutely everything in so far, so we've got to make sure that we chase hard and we want to leave ourselves some room. Evan L. Kurtz - Morgan Stanley, Research Division: Got you, okay. And then secondly, just wanted to talk about Tubular a little bit. I thought it was interesting, you're bringing on a bunch of new premier connections in the near term here. What percentage would you say do you sell tubes fitted with your premium connections currently? And where do you see that kind of evolving over the next couple of years? John P. Surma: Evan, there's some commercial value in that. And rather -- we would rather not specifically say those volumes because it's probably best that we keep that to ourselves. So forgive us for not wanting to give you the number now, but we would expect that based on what we think our customers need, what they tell us, that wherever we are today, it's got to be 1.5 or 2x that in a couple of years’ time. Because the way the world is going with longer laterals and the way the pipe gets tortured on the way down and the expectations our customers have not only for good performance, we think they'll be moving more in that direction. That's why we're chasing them so hard. But the actual, absolute numbers, we've had big increases in how much we're selling with them but the absolutes, we prefer to keep commercially to ourselves. Please forgive us.

We'll go to the line of Michael Gambardella with JPMorgan. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: A couple of questions. One, what's the tax rate going to look like going forward?

Well, I -- we've narrowed down some little changes, okay? So without Serbia, without the Serbian losses, we don't have that, the issue where we really wouldn't have any tax benefit in our effective tax rate associated with that. Now we do have -- we continue to have a large valuation allowance at U.S. Steel Canada. So to the extent that we have any losses there, you're going to have that issue. I don't know -- anything in the U.S. is effectively a 35% tax rate. So it really is going to depend on kind of the mix of earnings and locations, if I can put it that way. Because to the extent that we're heavily weighted to the U.S. in terms of profitability, you're going to have a U.S. type effective tax rate more likely than not. In Slovakia, it's like a 19% rate, so. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: Okay. And then second question, if you look at the entire U.S. Steel retiree population that's in a defined-benefit plan, what would the -- what would that retiree to active ratio look like today?

Yes, I guess I would say -- I mean, if you're thinking -- I don't have the numbers in my head because of Canada. John P. Surma: It would be about 2:1, Mike. I'm just guessing. I think our active employment's at 37,000, 38,000, something like that, probably with Serbia out of the picture. And I'm using my memory, Gretchen. Actual retirees may be, not necessarily dependents, would be 65,000 plus or minus, something like that. Dan, you'd know it, but I would...

[indiscernible] to say, yes. John P. Surma: Yes, somewhere in that zone. So that -- and that would just be the domestic pension plan against all employment. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: And then what is -- do you have an idea what the average age on the retiree, the main DB [ph] retiree population is?

Yes. Probably -- we're just thinking maybe late 70s or so. I mean it's -- we have a relatively mature plan, I would say, maybe average -- weighted average life of 10 years or less. John P. Surma: Yes. And keep in mind, we closed the plan in August or July of 2003, almost 10 years ago. Majority of our active employees now are in the defined contribution plans, both representative and non. But if, I mean -- we'll have someone in our plan for a long time because of a 21-year old person joined in 2003, he or she has sort of 60 years to go before the game's over. So we'll have the plan for a long time, but the majority -- we went over the high watermark a decade ago, I think.

Yes, that's right. John P. Surma: I don't have the exact numbers in my head, but correct me, Gretchen, if I'm directionally -- that if we're at 60-some now, when we exit this decade, that number's probably 45 or some number like that. There's a measurable decline over time.

Right. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: Yes, I mean, you were not hiring many 22-year-olds in the early 2000, late '90 period. John P. Surma: Very few.

Right. Michael F. Gambardella - JP Morgan Chase & Co, Research Division: And then last question. John, you mentioned Gretchen was going to talk a little bit about this $18 million make-whole cost in the second quarter. John P. Surma: Gretchen?

Oh, yes. That's related to the redemption of our $300 million 2013 senior notes. So I mean, that was really -- it's a call option under those notes. So really, it was just calculated on a rate, a treasury related rate that was in those bonds. But that's really how we got our hands on them, so that we could refund them in a -- it's a pretty good interest rate environment and it gets the maturity out of the way. So we really essentially have no debt maturities over the next 2 years now, 2012 and 2013.

Our next question is from Timna Tanners with Bank of America Merrill Lynch. Timna Tanners - BofA Merrill Lynch, Research Division: I wanted to ask a little bit more about maintenance and operations. So I just was wondering why the maintenance in the second quarter? Is that anything to contain supply? It seems like that's usually a strong quarter. Is there anything -- any rationale behind that? And then along the same lines, any update on your thinking about Hamilton? John P. Surma: Sort of, sort of. No, not really on the first point, Timna. At some point, we have to do certain maintenance projects and these were on a need-to-do and now, they're on a have-to-do. So it's just a matter of having to get the projects done. We plan for these things for a long time, and that includes having some slab staged in there right in front of the strip mill so we can maintain our customer supply. We had some higher inventories that you saw earlier in the year, late last year, and now, we're working those down as we go through the process. So it's just a matter of having to get it done. And we can delay or accelerate manage, but sooner or later, there are certain things we have to do and that's what we're doing now. On Hamilton, I think, really wouldn't have much to say anything different than we have before. This is really a question of do we need the supply and can we place it in the market at a price we're going to be happy with, and do we -- whether we see that continuing for a period of time to justify the startup costs and also the working capital investments. So that's really our question. And we study them all the time. Timna Tanners - BofA Merrill Lynch, Research Division: Okay, that makes sense. And if I could switch gears to the Tubular segment, I wanted to ask on -- I just wanted to ask how you're seeing the market. It's interesting, you had a really strong volume number and that's a testament to what you've been saying about strong demand there. But if I look at the record shipments and compare that with the profits that you earned when you were also with high shipments in the second half of '08, margins per ton have come down quite a bit. So I just wanted a little bit more of your context on what you think is happening there and how we should think about margins going forward, given imports and new supply coming on, relative to also very good demand. John P. Surma: Well, I think the earnings we had is what the market gave us here, Timna. I think costs are higher for everybody including us. Scrap is higher. Carbon units are much higher, offset somewhat by gas, but still -- I don't recall what met coal was back then, but it's quite a bit higher now, I believe. So costs are higher and the absolute price levels then were the highest of all time back in '08. So if -- given our cost structure now, whatever the price was then, average price per ton, give us that today and we'll have the same number or better. So I think the absolute costs are higher and the prices aren't quite where they were, and that would appear to be lower margin. But I think in some earlier quarters, even not too long ago where prices were averaging $30 or $40 higher, you take $30 or $40 times 4 million tons for a quarter, and you get a bigger number pretty quickly. So I think it's a question of the price cost relationship.

We'll go to the line of Dave Katz with JPMorgan. David Katz - JP Morgan Chase & Co, Research Division: I was hoping to follow on some of the earlier questions, specifically if you take a look at North America, you guys operated, excluding Hamilton, above 90% capacity. And if you x out the maintenance, it looks like operating profit would be roughly the same. Now you've identified some things, for example, with the gas and Carbonyx going forward, that should benefit the bottom line. But is there something else that represents some big step change that can be done to improve profitability? John P. Surma: Well, I think that there's a couple of things we outlined. The iron ore project that we talked about, where we would be producing something at a very much lower cost than we would be buying it for is one that would have a pretty significant impact just based on the numbers I mentioned before. And then I think the potential for DRI given what the cost would be with 1.4 tons of pellets at our cost and 10 Ms of gas at today's gas prices, that's pretty powerful economics. That's a big play for us if and when we could get there. David Katz - JP Morgan Chase & Co, Research Division: Okay. And then coming back to the gas, like gas substitution for coke, I know that you had outlined trying to eventually get to 900 pounds down to 800 pounds. My understanding is that you can maybe get to 750 without doing a massive amount of new CapEx. What would make you try to strive to get below 750? Is there some magic gas price that makes that appealing? John P. Surma: No. At this price, we want to have our coke rate as low as we can within safe operating parameters. So there's -- it is not a matter of choice. We -- at these economics, with met coal where it is and gas where it is, it's a can't miss prospect. The only question is, how far we can take it without having safety concerns, without beginning to affect furnace performance because paradoxically, you wouldn't think this, but natural gas injection to the [indiscernible] level is actually a coolant compared to the normal reductants-based thermal reactions that take place in the furnace with coke. So we have to balance all those things and we can throw some oxygen at it, which we don't have enough of. Everywhere, we could do more. So it's not a question of choosing to get to a certain number. We have to respect the laws of thermodynamics. We can only go so far. But we want to go as far as we can, as fast as we can, subject to safe operating parameters. So it's not a matter of if it's not good enough, the incremental pound of gas is weight. So the more gas we use, the better off we are.

We go to the line of Arun Viswanathan with Longbow Research. Arun S. Viswanathan - Longbow Research LLC: Most of my questions have been answered. I guess I just had an overall question. First off, on the interest expense, so do you expect that $70 million, that's kind of a run rate now with the new debt level?

No, that includes an $18 million onetime item for the redemption of the bonds that we did in April. Arun S. Viswanathan - Longbow Research LLC: Right, okay. So going forward, debt will come back to where it was then after this quarter?

I guess you might have a little difference because the new notes are at a higher interest rate to the old notes, but that will be the only difference. Arun S. Viswanathan - Longbow Research LLC: Okay. And then I guess philosophically, I mean, what do you guys think about the North American market as it stands today? You guys have gotten out of Serbia, you've talked about a couple of different projects. I mean, is there any scenario where you would take more of a leadership position as far as consolidation or to try and tackle the oversupply situation? John P. Surma: No, I think the North American market is -- despite the fact that the economic recovery has been very choppy and it's been up and down and back and forth, it's still a pretty good market. We're still not, as an industry or as a country, as a sector, back to the levels of steel use that averaged between 5, 6 and 7 or maybe somewhere in the 90% range. And I think the biggest missing link there is in construction. Most other markets have come back fairly well. So I think if you can look forward and begin to see something happening good in the construction side, I'm not saying we do, but if you could foresee that, I think it's a very attractive market and we can make a very excellent return and have strong cash flows for our shareholders. With respect to the strategic activity that you referred to, from our standpoint, with the capital we have, our current view is that the things we can do inside the company, which we've enumerated here today, have really excellent returns. And that is our primary focus at the moment.

We'll go to the line of Mark Parr with KeyBanc. Mark L. Parr - KeyBanc Capital Markets Inc., Research Division: I've got a couple of questions. One thing, John, could you talk a little bit about the tin market in terms of how that's unfolding? There were some capacity. I think one of your competitors announced they were shutting down some mines. And then we're seeing some industry data that would suggest that tin consumption is actually up a bit. So that might mean you've got some share opportunities. Could you give some color on how that market's unfolding? John P. Surma: Sure. I think the tin market last year was a little slower, particularly later in the year, and some of the more recent industry statistics that we've seen from AISI I think is larger than we see it. Although we also look at the can manufacturers' data, has been a bit more positive. We have been increasing our share from time to time when those opportunities arose. You mentioned one that I think has probably been a positive force, although it's still pretty early to tell. We're to the point where we're running most of our facilities in that sector pretty close to full. We'll probably have some additional room and we'll take additional orders if everybody on the call wants to place one, but it's an excellent market, strong relationship with those customers, lots of technical work that we do to try to make sure our product is staying apace with what they need for better gauge, different things from easy open ends that make your life easier at home. Excellent market for us. We're a large player in it and tend to be, and we'll stay close to our customers. And if any of them are having trouble meeting supply, they know where to reach us. Mark L. Parr - KeyBanc Capital Markets Inc., Research Division: All right. So would there be an opportunity then to further ramp those facilities as the year progresses? Or that's something that really hasn't happened yet, you haven't really added any new customers here as of yet? John P. Surma: No, we've been adding customers and volume all the way along in the last year or 2, Mark, I would say. But in general, we have some flex but not like 20% more or 30%, 40% more. Some flex, but not a huge amount. Mark L. Parr - KeyBanc Capital Markets Inc., Research Division: Okay. Also, I'd like to have kind of a similar conversation around the automotive market. I know it's a little bigger market for you. You've got a lot of capital that you're spending there now. But could you talk about how the order book for automotive is trending and how you would envision that through the second quarter? And maybe do you have any visibility into the second half you could share with us at this point? John P. Surma: I just had a footnote here that this resin question is a matter that everyone's focused on. As far as we know, we haven't had any schedule changes, so I'll leave that for your consideration. I think we'll all learn about that at roughly the same time, if there's anything to learn. On the overall automotive market for us in North America, we've been doing very well. I think the sentiment there would be quite positive in talking with our customers. The SAR number is up to a very healthy level. I think the first quarter was 14.5 or some number like that. The dealer inventories at 55 days is a number I see as relatively low. Production last year was healthier than it was, still not up to the levels of the olden days. But overall, production estimate's now 14.1, 14.6, somewhere in that range. So all in all, that looks pretty good for us and our automotive-capable facilities are quite well loaded right now. As you know, we've brought up the Z-Line in Hamilton and we're busy getting that loaded up with high-quality automotive demand. And our market's quite good right now in automotive. Some room left for us, but not a whole lot. I think we've done a pretty good job of demonstrating we can serve our customers and they've awarded us for it.

Our next question is from the line of Sohail Tharani with Goldman Sachs. Sohail Tharani - Goldman Sachs Group Inc., Research Division: Gretchen, you mentioned about the working capital reduction in the first quarter. I was just wondering if you still have that. Because your revenue went up and despite that you took some money out of that working capital, I was wondering if you could expect that trend to continue and you still have a lot of inventories you can work with?

Well, we probably have a little bit of -- a little more work we'll continue to do on the raw materials side. We continue to work on that. When we start talking about the facility maintenance work, we had to do those, Sal. We have to probably build some inventory there. So I wouldn't really expect a big effect one way or the other in the second quarter. But as the year goes on, I think we're still kind of at somewhat heavier inventory levels than we had been. So maybe a bit more to come out. But the first quarter was a pretty significant reduction. So I'm not counting on a whole lot, but some more, but maybe not second quarter. Sohail Tharani - Goldman Sachs Group Inc., Research Division: Good thing. John, I have one question on DRI. If I look at the earned unit volume of busheling scrap versus pig iron or iron you make from a $65 per ton iron ore, scrap still is more expensive in that term [ph] . I mean not the market price of iron ore, but your cost of iron ore is very expensive. And I was wondering if you are looking at DRI versus -- opposed of the iron ore base, which is coking coal replacing natural gas. Are you looking at like a 100% DRI in that EAF? Because at 40% DRI, the math doesn't really work that well. It look -- comes to be as almost same cost as if you were making steel using your $65 a ton iron ore and $200 coking coal. John P. Surma: We haven't fully come to a final conclusion on those variables, Sal. It's a good analysis you're doing there. But our starting point on DRI would be if we could make it at the kind of cost that I'm talking about, which would be quite a bit below our scrap cost that we pay, we could use it in a -- as a scrap substitute in our oxygen furnaces. We could use it as a yield enhancement in our blast furnaces, and both work just fine. If we decided to go all the way to an EAF, we haven't really worked out what the loading would be. And I would -- somewhat if you're doing hot DRI or cold, if you have hot DRI, you get some thermal benefit there that improves the yield even more. So a lot of variables there and we really haven't settled on that. But I think that the economics that we do were accurate comparing the cost of that to what we'll be paying for the scrap we buy for our oxygen furnaces, it's got pretty good economics.

We'll go to the line of John Tumazos with John Tumazos Very Independent Research.

It's a little confusing. I listened to the 11:00 call this morning and AK Steel lost a little bit of money. It was down in all the value-added product categories of note. And Nucor talked all this about import competition and Steel Dynamics said they were going to be maybe half as much in the third quarter because the next quarter is the first quarter, and your guidance and performance are very, very good. Have you managed to segment your sales almost completely away from the import price sensitive categories where whatever commodity hot-rolled comes out of Fairfield, Alabama or Granite City is going to Lone Star for tube scope? And you have a safe and secure home for the products that might be viewed as import-sensitive or your Tubulars are for directional drilling and your tinplate and your automotive stuff is all very secure? I'm just amazed at how it's a difference in guidance and performance. John P. Surma: Well, John as usual, you're more well-read than I am, because I'm not as well-versed in all those other comments and I'll leave you to analyze them.

Well, you're not singing the blues, John, and I'm so happy for you. John P. Surma: Yes, we're -- it's rare, but that's probably true. Our strategy has been precisely what you described. Our strategy has been for a long time to be more concentrated on higher value-added products that would be more domestically oriented, where we could perform better. And certainly, our push in automotive, our capital spending on the continuous annealing line right now augments that. Our addition of Lone Star back in 2007, with unit trains running from Granite City to East Texas is wonderful. And it supports a very good supply chain, and keeps both plants busy and doing all the right things and actually supports our iron ore operating parameters in Minnesota as well. So that all worked exactly as we -- is working exactly as we intended it to. And as we've gone into some other more value-added applications, even on the hot-rolled, cold-rolled side, any amount of spot commodity hot-rolled we have is probably lesser than it might have been some time ago. Having said all that, we're still affected by the overall market. And imports can still do a lot of damage and they are in a lot of different product groups. And we're particularly focused now on what we see as increasing import levels of lighter gauge cold-rolled and coated products that, based on what we're understanding in the marketplace, has to be unfairly traded. So we've got to keep a close eye on that. And we can all be affected by it. And I'm, of course, concerned only about our company, but I think if it affects the market, it affects us. And we need to make sure we're vigilant on that. And no good call would be appropriate without mentioning that we are also paying close attention to, on the Tubular side, some of the carbon imports from some of the Asian countries that, again, must be traded below cost, based on what market inputs are and affect the overall market. So there are areas of great concern. And if those were expressed by others, we would share them.

John, if I could ask a non-creampuff follow-up, and maybe this is an unfair question because the U.S. economy is doing relatively well now and overseas isn't, the U.S. businesses are performing very well and Canada has been rough because the C dollar's appreciated, et cetera, et cetera. But looking back on the last decade, do you think that the energies are better spent on domestic opportunities? And if you shorten your frequent flyer miles and just stayed at home, it would be just as well? John P. Surma: Well, if you're just looking at today's world, you'd certainly have to conclude that North America, and U.S. in particular, for our company is more favorable than some of the European activities. Obviously, what we did, we had to do in Serbia. But there are other times in the last decade or so that we were earning $100 million plus per quarter in Slovakia and the world looked pretty good at that point. So it's interesting in our total picture, our Slovakian operation, she’s an excellent facility from an operating standpoint and a reasonably good commercial position, which we hope to improve there from a value-added standpoint, more manufacturer-oriented, that it's a merchant buyer of materials and there could be markets where that would be an advantage. So we think it provides some good balance for our overall cost structure, overall operating structure, but it is a different piece of the business. It does not have the level of integration that the overall North American Tubular and Flat-rolled operations have, there's no doubt about that, but it may not be our best-performing business right now, but there've been a lot of times when it was. And so we have to think that through carefully.

We'll now go to the line of Aldo Mazzaferro with The Macquarie Group. Aldo J. Mazzaferro - Macquarie Research: Just a quick question. A lot of mine have been answered, but on that EAF, it's interesting to me that if you're thinking about an EAF, I'm wondering would that result in an increase in your steelmaking capacity? And would you be able to shift workers from other operations over to that facility and go ahead with more volume and the same headcount? John P. Surma: Well, you're taking it a little further than we have so far, Aldo. I think it's possible that it could be incremental capacity in some place. It's possible if we would do such a thing that it might replace other capacity which is nearing the end of its life. Those are both possibilities. They may both happen for that matter. With respect to the labor aspects of that, that's often a complicated matter to be resolved based on contract terms and local bargaining matters, and I'll defer to my experts on that who aren't here, unfortunately. So having said that, I'm confident we can work those kinds of things out. I think our relationship is positive, and generally, any kind of capital investment is very much welcomed by our union colleagues. So I'm confident we can work that out and we've talked about this on and off over the years, but I think in terms of what its purpose would be where those are lots of possibilities, we're still reserving judgment on those questions yet. Aldo J. Mazzaferro - Macquarie Research: Right. And if I could just follow up, too, on one of the questions earlier, was on the market -- the impact of possibly a slowdown in demand. And I know you got the blast furnace outage in the quarter and you got flat shipments, but how about in the incoming orders? Have you noticed any changes in trend in the last several weeks or so in terms of the amount of spot business you might be seeing come in? John P. Surma: We have. I can't segregate it, spot versus non-spot. But our order rates in the last month or so have been better than the previous 2 months. So demand, as we said, has been steady. Undoubtedly, the spot-oriented businesses, the service centers, processing and converters are cautious because of the uncertainties that are in the world but the orders come. They come a little bit late, but they're coming, and our contract business, which would typically be more manufacture-oriented because we're pretty robust. So our orders have actually been okay.

We'll go to the line of Dave Gagliano with Barclays. David Gagliano - Barclays Capital, Research Division: Most of my questions have been covered. I just wanted to go back to the price mix question from earlier. If spot prices in the U.S. stay flat for the rest of the second quarter, what's the magnitude of a Q3 decline in realized prices that we should be expecting, given the lag effect associated with the quarterly contract prices?

Dave, what -- say -- ask your question again. David Gagliano - Barclays Capital, Research Division: If we have no change in the spot market as of today versus, say, at the end of the quarter, my question was for the third quarter, what's the magnitude of the decline that we should be expecting in realized prices given the reverse of the lag effect benefit that we have coming out of the second quarter? John P. Surma: Good question, Dave, on the -- if we can do the math ourselves is based on the indexes. But I think if -- and this would only be applicable to the quarterly reset volumes that we talk about because you have to go through the entire order book to find out what the total would be. But if we stayed relatively flat from here, I think the adjustments on that business probably would be in the $10 to $20 range based on what's been incurred so far. So I'm guessing based on the weekly shadow stuff, but that's probably about the zone that we would end up being in.

We'll go to the line of Michelle Applebaum with SMI.

So I was glad to hear that you weren't in products that had import sensitivity because I thought OCTG was one of your biggest product lines. And I thought that, that's actually been the product where we've had the biggest problems with imports. But I was glad to have that corrected. John P. Surma: Michelle, I'm not sure -- that's not at all what I said.

No, that's not what you said. That's what someone else said. John P. Surma: Oh, okay.

Right, okay. Yes, no, you didn't say that at all. And, in fact, the import numbers for today for March just came out, so were very topical. And imports year-to-date are up 35% from last year. And imports are more than tripled off the bottom, and we almost hit 3 million tons in March, the highest level since the recession came. So I was wondering if we look year-on-year at the metrics in the U.S. economy, we'd be looking at all these great things like automotive and all these other markets that are picking up. But when you look at the global scale economy, we're seeing other things. Do you think that there's a chance that the, a, the U.S. could inflate itself better? And I know, obviously, Nucor is not alone in complaining about this. Or b, is there a chance that you could find supply demand equilibrium in China just by market forces? John P. Surma: Well, I'm just not sure I'm clear on the questions, Michelle, on the latter point about China. That's a very mysterious place, but the profitability of the major companies there has not been good. That's been widely reported. The World Steel group will be coming out with their short-range outlook fairly soon, so we'll have a little more information on that maybe this week or next week. I'm not sure what the schedule is there, but the overall supply-demand balance in China has to be looked at by product ranges, and we have some concern about some of the lighter gauge things that we're seeing coming from Asia in general, and some of it, obviously, would be from China. So we're not seeing China necessarily as particularly benign. I think it bears watching and we're quite concerned about it. So we have many concerns about imports, and I think the high level of imports that are now showing up in the statistics were probably the result, at least in the sectors, of product range we care about. Yes, with price differential, which got pretty wide against some of the other territories back earlier in the year and that phenomenon has been played out many times. And we're vigilant and we're going to make sure that we look after our affairs. And if we find that we're being victimized by unfair trade, we don't mind defending ourselves. And we do that when we think we can win. And if we have to, we will.

We do have a final question from the line of Richard Garchitorena with Crédit Suisse. Richard Garchitorena - Crédit Suisse AG, Research Division: Just on U.S., Europe. So the USSE includes one month of Serbian operations, is that correct? John P. Surma: That's correct. I think we tried to give you the number. It turned out to be the same as some other number. So a little confusing, but I think it was $17 million for the first quarter. Dan, Gretchen, is that right?

Yes.

Yes. Richard Garchitorena - Crédit Suisse AG, Research Division: Great. And then just to follow up on that. So when you referred to cost being comparable to the first quarter, is there any way we can adjust for the reported? Because I would assume that Serbian costs were higher on a per ton basis.

I mean, on a per ton basis, yes. I think we also reported for you what the U.S. Steel Košice shipments were on a standalone basis. And we can probably try and help you -- most reckon I'm smart enough to do that on the call, but we could probably try and walk you through that calculating cost number then for just U.S. Steel Košice. Because you do want to strip that $17 million out. And I think you're surmising probably correctly that it was -- it would've been higher there in U.S. Steel Košice.

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That is it for us. We look forward to talking to you again next quarter. Thank you.

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