Dan Lesnak – Manager-Investor Relations Mario Longhi – President and Chief Executive Officer David B. Burritt – Executive Vice President and Chief Financial Officer

Evan L. Kurtz – Morgan Stanley & Co. LLC David Gagliano – Barclays Capital Sal Tharani – Goldman Sachs & Co. Dave A. Katz – JPMorgan Securities LLC Luke Folta – Jefferies LLC Matt Vittorioso – Barclays Capital Tony B. Rizzuto – Cowen & Co. LLC Brian Hsien Yu – Citigroup Global Markets Inc. Gordon L. Johnson – Axiom Capital Management, Inc. Timna Tanners – Bank of America Merrill Lynch Michael Gambardella – JPMorgan Justine Beth Fisher – Goldman, Sachs & Co. Philip N. Gibbs – KeyBanc Capital Markets, Inc. John C. Tumazos – John Tumazos Very Independent Research LLC Aldo Mazzaferro – Macquarie Capital, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the U.S. Steel First Quarter 2014 Earnings Conference Call. For the conference, all the participants are in a listen-only mode. There will be an opportunity for your questions; instructions will be given at that time. (Operator Instructions) And as a reminder, today’s call is being recorded. I’ll turn the conference over to Mr. Dan Lesnak, Manager of Investors Relations. Please go ahead.

Thanks, John. Good morning and thank you for participating in United States Steel Corporation’s first quarter 2014 earnings conference call webcast. For those of you participating by phone, the slides are included on the webcast are also available under the Investors section of our website at www.ussteel.com. On the call with me today will be U.S. Steel President and CEO, Mario Longhi; and Executive Vice President and CFO, Dave Burritt. 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 start the call, I’ll turn it over to our CFO, Dave Burritt. David B. Burritt: Thank you, Dan. Good morning, everyone and thank you for joining us. We reported income from operations for our reportable segments and other businesses of $154 million. This represents an improvement from the fourth quarter at the segment level. We are pleased to start 2014 with the profit and strong cash flow. We weathered not only the economic storm with five years of losses, but also the first quarter’s extreme weather. We are encouraged by the way employees overcame much of the first quarter hardships, which included a significant spike in natural gas prices and logistical challenges in both receiving raw materials and delivering steel products to our customers. Carnegie Way plays a significant role in driving performance improvements and offset many of the first quarter challenges. We have instituted a lost-and-found management approach. if bad things happen, might be extreme adverse weather condition this year. we know that is a lost value. We are developing a culture, a collaborative accountability culture that highlights lost value quickly and then uses Six Sigma based project teams to find the offsets. Today, there is a lost-and-found process, it is far from perfect, but it does set expectations and encourages teamwork at multiple levels. Now turning to cash flow on Slide 4, as we have been placing much more focus on cash flow, we are pleased to report that the end of the first quarter, we have an excess of $1 billion of cash on the balance sheet, and our total cash and liquidity is now an excess of $2.7 billion. We have been consistently generating cash from our operations, generating over $650 million in the last 12 months. but as we look forward, we will need more cash to pursue high return projects and profitable growth opportunities. In addition to the increased cash generation, that will come from improving margins through our Carnegie Way transformation. we identified approximately $700 million in additional cash flow improvement that will be realized in 2014. Of that $700 million, we will generate over $300 million of additional cash flow from a tax deduction, resulting from liquidating for tax purposes, a non-U.S. entity; there is a holding company for most of U.S. Steel’s non-U.S. operations. You can find more details on this transaction in our 2013 10-K that was filed on February 25. The remaining $400 million will be generated by improvements in working capital. once again, the Carnegie Way transformation is helping us look at each of our business processes, compare them with world-class performance and make the changes necessary to capture value. For the first quarter, we realized about $250 million in cash flow benefits from these projects. so we have about $450 million remaining to be realized over the final three quarters 2014. Looking forward, we are putting together a cash deployment strategy that will – that also allows us to increase our funding of R&D to accelerate our development of new and innovative products for our customers and to target capital projects to increase our operating capability, flexibility and reliability. To support this new cash deployment strategy, we have announced the creation of a new role of Chief Technology Officer at U.S. Steel. David L. Britten has assumed the newly created role and will be responsible for a further expansion of the company’s worldwide innovation, technology, engineering and research and development of products, and services and solutions. Dan will now provide additional details about our first quarter segment results.

: Over the last couple of years, we’ve improved our ability to ship our blast furnace fuel mix, based on changes in natural gas, injection coal and coke costs, and we’ve quickly switched to less natural gas and more coal and coke, where natural gas prices spike. but we still had a $50 million increase in natural gas prices, as compared to the fourth quarter. Lower repair and maintenance costs and benefits from Carnegie Way products that have been implemented are hitting – are hitting by in line helps us achieve income in line with the fourth quarter. Our Tubular segment had operating income of $24 million in the first quarter. Prices continued to be pressured by high levels of imports. The effects of lower prices and higher substrate entry costs only partially offsets by lower operating costs, including benefits from Carnegie Way initiatives in the Tubular segment. Our European segment had operating income of $32 million. The increase in the fourth quarter was primarily due to income from the sale and swap of carbon emission allowances, as higher average realized prices in Carnegie Way initiatives were offset by higher raw materials and operating costs. Now, I will turn the call back over to Dave for some additional comments on our Carnegie Way transformation. David B. Burritt: Thanks Dan. As promise, we will update you every quarter on our progress on the Carnegie Way transformation, and we are delighted to inform you that we are making solid progress. In the third quarter, we highlighted $75 million of ongoing profitability improvements for 2014. Last quarter, we highlighted a $100 million more annualized improvements from process improvements, supply chain and logistics, and SG&A savings with $75 million being realized in 2014. This quarter we have implemented projects that will improve our margins by an additional $140 million in 2014. These benefits primarily include improvements in our manufacturing processes, supply chain and logistics and additional SG&A reductions. This increases our total Carnegie Way benefits to be realized in 2014 to $290 million. I once again like to emphasize that these are not targets or objectives and they are not speculative, these are the results of projects and improvements that have been implemented. Now I would like to provide additional color on our Carnegie Way transformation on Slide 9. Fundamentally, difference in other transformation that Carnegie Way has anchored in a strategy of value creation supported by disciplined and relentless improvement. Our aspiration is to earn an economic profit throughout the cycle and thus deliver above market returns to our stockholders. Our strategy has two phases; Phase 1 is earning the right to grow; Phase 2 is about driving profitable growth. I mean, the right to grow is not just about having the goal and picking great people, we follow consistent execution methodology called Six Sigma and our entire leadership team is fully committed and accountable for the goals we set. We measure where we succeed and where we fall short. We are very clear about our aspirations and we monitor progress through the performance score card. We will award our people when they succeed. We will deliver on our commitments and when we do, we earn the right to grow. Let’s discuss Phase 2, drive and sustain profitable growth. To drive and sustain profitable growth, we will organize around where we make money and have an intense purposeful march to where we create value for our stakeholders. With our increased cash flows, we have increased flexibility to support our key initiatives such as research and development. We are developing robust business processes and driving improvement efforts with Lean Six Sigma methodologies across manufacturing, supply chain, commercial, procurement, innovation and functional support like HR, IT, legal and accounting. All of these areas are being benchmarked with companies in the steel industry and best practice companies outside the steel industry. We know a journey doesn’t happen overnight. So far we have made some progress. The Carnegie Way is comprehensive. There are no sacred cows, everything is on the table, strategy, commercial operations, organization. If someone has an idea, they build the business case, construct the possibilities, recommend a team with clear deliverables to succeed. If it passes our selection filters, we just give it. The Carnegie Way is driven by value creation. We want to deliver economic profits, profits that exceed the weighted average cost of capital every year. We have identified a robust pipeline of value creation opportunities. We are managing a very disciplined execution across this pipeline. The Carnegie Way has a unique DNA within U.S. Steel. The Carnegie Way builds off of unique strength of U.S. Steel, our history, our brand. Our employees believe in our success as they embrace our journey, their capabilities grow. Our brand still means something. Our Gary principles are foundational in a source of value and pride. Our strategic review is taking a rigorous and fresh look at where and how we make money and that will drive major strategic decisions going forward. We have a strong market position in automotive, despite the recent announcement on other materials, we have put together a formidable team with more aggressive plans to defend and strengthen our position in automotive. We are thoroughly reviewing our operations and identifying facilities, regions, products, and contracts, where we do and do not occur in economic profits. We are evaluating what are the potential areas where and if improvements can be achieved. We expect to generate cash in excess of that required to service our balance sheet and we are reviewing opportunities to deploy that cash to high return projects, both internal and M&A. We will keep you posted as these progress. And now I will turn the call over to Mario to cover several important areas.

Thank you, Dave. Good morning, everyone. I would like to begin by discussing our safety performance. But we remain fully committed to our core value of safety and to be in a global leader in safety processes and performance, both inside and outside of our industry. From a statistical standpoint, last year was one of the safest in our company’s history. The results you see here reflect a safety management process and requires good structure, engagement, teamwork, individual accountability, and process ownership by our entire workforce. Every employee understands that they are responsible for working safely each and every day, and they must look out for their well-being over their co-workers as well. Based on the latest data available from the Bureau of Labor Statistics, our performance for case is involving 31 or more days away from work. U. S. Steel ranks among the best performing companies in the iron and steel industry category. For the second consecutive year and for only the second time in our long history, our performance in this category reached the single-digit level with only five such cases in 2013. These figures represent real and important progress on our part, and for that, I would like to thank our employees around the world. However, we still have experienced incidence at our facilities that resulted in fatalities. And when this happens, we always take immediate action to address their root causes and reaffirm safety is importance throughout our company. We recognized as we began engineering our corporate transformation through the Carnegie Way, we could draw inspiration from safeties approach to improvement. In addition, we saw opportunities for the Carnegie Way to create what I call a virtual circle, safety by identifying new, innovative approaches to processes companywide that we will deliver and drive further improvements in our safety performance. Now turning to steel market conditions. Most forecasts we have seen call for demand increases year-over-year, and despite the very rough start to the year that much of the country has experienced, that seem to really skew to supply and demand relationships in the market. We are seeing plenty of positive signs out there, which suggest some solid demand increases our in-store. March auto sales were at their best level since June 2008, a major appliance manufacturer reiterated in their most recent outlook and they see growth between 5% and 7% this year. And our construction customers indicate that things may heat up in their field after a difficult winter. Perhaps, the one area where we see less robust demand is from our Flat-rolled customers who produce OCTG. As they two are fueling the effects of them fairly trading material landing on our stores. All in all though, demand seems to be slowly picking up speed and it is the across most every Flat-rolled industry that we participate in. Tubular market drivers during the first quarter of 2014 were mostly positive with continued strength in oil direct drilling and colder-than-normal winter condition as the promoted increased natural gas prices. Sustained crude prices near $100 per barrel continued to motivate producers to the well of oil resources, as evidenced by the increase in the number of oil directed rigs during the quarter. : Overall, tubular demand is good, but prices continue to be impacted by the unfairly and fairly traded import volumes. For our European operations, we expect a continuation of the market conditions seen in the first quarter. However, when compared with the same period of last year, conditions have improved. Forward-looking indicators for the manufacturing and construction sector improved recently and should this trend continue, it will likely still take some time before this improved sentiment, translates into higher activity in the steel consuming sectors. Now turning to outlook for the second quarter, we expect reduced income from operations in the second quarter. Our production will be limited, which will temporarily slow shipments, primarily due to continued weather related logistical issues, affecting both raw materials and finished goods. We expect to report a loss for our Flat-rolled segment in the second quarter as these operational difficulties have limited our production, resulting in lower shipments and higher operating costs, as compared to the first quarter. Although market conditions in North America are improving, average realized prices should be comparable to the first quarter. Given our production disruptions, second quarter shipments will be geared to fulfilling contract commitments where prices are not moving at the same rate at this spot market, as well as negatively influenced by lower automotive coated production and shipments in this quarter. But we do believe that our operational difficulties will be behind us, as we exit the second quarter. We expect results for our European segment to decrease in the second quarter, due to the absence of the sale and swap of emissions allowances in the first quarter. Shipments and average realized prices are expected to be comparable to the first quarter. Our Tubular results are expected to increase, compared to the first quarter. Shipments are projected to be higher due to increased drilling activity. And we expect average realized prices to be in line with the first quarter. Before we take your questions, I would like to give a quick update on our operations, including the significant challenges we’re facing this quarter. And then cover our increased focus and progress on innovation and product developments. As we mentioned earlier, the unusually harsh winter conditions created many challenges for us in the first quarter. And while we were able to offset some of the adverse impacts of the higher natural gas prices in operational and logistical difficulties, we are being confounded by much more significant assets of these extreme weather conditions in the second quarter. Our iron ore pellets are transported primarily across Lake Superior and as has been widely reported ice conditions in the Great Lakes and particularly Lake Superior are the worst we have seen in over 30 years. Following early disruptions to typical lake shipping at the end of last year shipping season, the opening of the 2014 shipping season has been slowed by record-setting ice levels, which continue to affect us today. Typically, the haul to lake shipping lasts approximately 70 days. For this year, we are currently over 120 days and vessels traveling across Lake Superior, we still require a Coast Guard ice cutter squad, which limits the number of vessels and expand the normal travel time. As a result of the difficulty, moving pellets from our mines to our plant. We are managing our steel production in line with our available pellet inventories. We have also been challenged in our ability to make certain products due to an unplanned outage at the steel shop at our Great Lake Works. We’re working to complete repairs and we expect to resumes to make an operation at the Great Lake Works by the middle of May, while the steel shop has been down. we have worked aggressively to utilize our entire steel making system to satisfy our customers’ needs. We have moved certain products to other plans were possible and have drawn our – down our in-process and finished steel inventories and we have brought in slabs from our other plants to see the finishing operations at the Great Lake Works. We have been communicating with our customers on a daily basis and remain intensely focused on finding solutions to their specific individual needs. It will continue to do so until this temporary disruption to our supply chain has been resolved. Speaking of our customers, we are increasing our support and commitment to research and development to expand and accelerate our capability to provide the steel products and solutions of the future. Our customers are requiring increasingly demanding and complex products to support the future needs, and we are positioning ourselves to develop and deliver in those products to keep steel as a material of choice, an environmentally sound and value enhancing choice for all of our customers’ needs. We continue to make significant progress in developing and taking to market a full suite of our own proprietary premium and semi-premium connections for our Tubular customers, as well as providing the technical support and services to provide the best total solution for their exploration and production operations. As we noted earlier, our connections volumes continue to grow and with our increasing investment in our facilities. We will see our rate of progress accelerate in this extremely important and highly profitable segment of the energy tubular business. In automotive market, competing materials have been aggressively advancing the discussion about their ability to offer lightweight solutions to the automotive industry. We take these alternative threats very seriously. And our customers are coming to us and actively seeking steel solutions, and there are many individual products that we are working on directly with it. : Using these advanced steel solutions, we have designed the steel body in light for a midsize sedan that can also be applied to other vehicle platforms, including SUV and pickup trucks. That will fully enable the light weighting with our customers have identified as necessary to meet their cash requirements. We believe this is the best long-term solution for our automotive customers and it will involve the extensive use what we call commonly as the generation three advanced high-strength steels. Fortunately, our company has been on the forefront of developing new grades and applications for the automobile manufacturers. And now have an important piece of ammunition in our arsenal, that being the continuous annealing line at our PRO-TEC joint adventure. You’ve heard me talk about this before and perhaps several of you were at our open house just under a year ago. The last 12 months at the line have been just extraordinary, as we have began making grades of steel there that we are conceptual in nature less than two years ago. In fact, we have run coils produced at our existing steel making facility through the continuous annealing line that have properties that fall not on the threshold, but right in the middle of the spectrum of generation three steel. : So, we see these challenges from other materials as real. I believe that we have in our steel creating steel solutions that we will deliver even more value through the automobile manufacturers into our customers. We have made the commitment and we have made the investments and we intend to deliver on these solutions. Now, let me turn it back to Dan.

Thank you, Mario. John, can you please queue the line for questions.

(Operator Instructions) And first from the line of Evan Kurtz with Morgan Stanley. Please go ahead. Evan L. Kurtz – Morgan Stanley & Co. LLC: Hi, good morning, guys.

Good morning, Evan. David B. Burritt: Good morning, Evan. Evan L. Kurtz – Morgan Stanley & Co. LLC: Congrats on the results given such a tough environment.

Thank you. It was certainly challenging. Evan L. Kurtz – Morgan Stanley & Co. LLC: Maybe just a quick one on repair and maintenance going to the course of the year, it’s getting pretty difficult to model with all these moving pieces Great Lakes and Gary, iron ore and so forth. Could you just maybe walk us through some of the numbers of how you kind of see repair and maintenance impacting 2Q versus 1Q, and in the second half of the year has been able to move any maintenance outages up into the first half with this equipment down, so that maybe we can look for lower costs in the second half?

Yes. I mean, let me just briefly address this. Of course, in the second quarter, we will see an increase in maintenance given the fact that we have to deal with the challenge that were unexpected. The second half though we should get back to normal in your model, should be good for that.

Yes. I mean, we’re still – we look across the total year. We’re still comfortable to be in line with what we talked about last quarter being a little bit better than we were last year. We’re working hard to be more efficient to do a better job, so I think it will be offset some additional costs from couple of these recent incidence. Evan L. Kurtz – Morgan Stanley & Co. LLC: Okay. And then just maybe on coal, I know you are expecting some of the benefits of lower coal prices are circling during the second quarter, but given that you’ve been operating at reduced levels. How should we be thinking about that?

We’re still seeing some of the flow. I mean they may have been slowed a little bit, we’re still positive quarter-over-quarter, the coal costs continue to drop. Evan L. Kurtz – Morgan Stanley & Co. LLC: Great, okay. and then maybe just one on Europe, what sort of impact have you seen from Ukraine, thank you for the detail on some of the demand in the region, but maybe you can match that up with what you are seeing on the supply front as well?

: Evan L. Kurtz – Morgan Stanley & Co. LLC: Okay. And then how about this supply of steel in the region? How do you see the market shaping up over the remainder of the year?

It should improve, but slowly. I mean we are seeing that there is a better sentiment in many of the markets that we’re playing. It shouldn’t be anything dermatic, but we should see a slow improvement in the course of the year. Evan L. Kurtz – Morgan Stanley & Co. LLC: Great. Thanks, guys. I’ll turn it over.

Thank you.

Our next question is from David Gagliano with Barclays. Please go ahead. David Gagliano – Barclays Capital: Great, thanks. Just a couple of quick questions, if we look ahead to the third quarter, we assume the operating logistic issues are behind the company. What should we be expecting in terms of a sequential improvement in the Flat-rolled business in the third quarter? If we assume all the other non-controllable stated the same, I guess what I’m ask is, what’s the total dollar impact strictly tied to these production disruption and logistic issues?

I don’t think we have a figure that we can offer you at this point unfortunately. David B. Burritt: I think a lot of this is going to depend on the flow materials, as deliveries pick up the phase that will determine how quick we ramp back up. So, at this point, we can’t give you a clear number and we’re definitely not ready for third quarter guidance. David Gagliano – Barclays Capital: Okay. Let’s switch to Carnegie. Total $290 million of savings for 2014 obviously that’s very impressive, yes, we are still looking at a loss in the second quarter obviously impacted by everything we talked about already on the production logistic issues. So my question is, how much of the $290 million is actually flowing through the second quarter expectation?

We’re not getting into that kind of granularity, while these projects, some are immediate, some are over time. We’re more comfortable that we have a better grip on the full-year. It’d be nice if they were all $50 million increments like Hamilton. but there hundreds of furnace going on, there are some that – some blast furnace, fuel usage, efficiency, central usage improvements in Europe. that’s a project that is going to deliver somewhere in the neighborhood of $30 million. Some contractor – in-sourcing contract work, several facilities we find much of our solutions, that’s part of a $20 million piece. But they go to all projects, may get to 90 would take long, long time, because there are really 100 projects there and 100 to more coming behind them that make up those numbers. so I said we’re trying to release healthy guys on what segment they’re in, and whether it’s business process despite any logistics. but I’d say those are couple good examples, some in the bigger ones, there’s just a lot of projects that are implemented that are smaller pieces that when you do half of them, it’s up to a big number. David Gagliano – Barclays Capital: Yes, I totally understood. I guess – and the actual information has been very helpful. I guess what I’m trying to get is just the timing here is this – it is the back half; back-end loaded, or is a lot of it already in the second quarter expectations. can you give us some sort of framework as the timing here?

I mean there is a mix about, when we think about like the big piece of all the Flat-rolled Hamilton that’s protocol for fourth quarter, that’s the perfect January 1. there will be – I’d say there will be projects that are basically steady for several quarters. there will be some projects that depending on how fast we ramp back up, and when we get there, the flow will change. so you said, it’s just the overall guidance, the to Flat-rolled is going to move to a lot, because of all this does include that there are benefits flow through there, but as they really get into quarter-by-quarter benefit is pretty tough. David Gagliano – Barclays Capital: Okay, all right. thanks.

Our next is from Sal Tharani with Goldman Sachs. Please go ahead. Sal Tharani – Goldman Sachs & Co.: Good morning.

Good morning, Sal. Sal Tharani – Goldman Sachs & Co.: You made a comment about deployment of cash for growth projects. I was wondering if these are – if there is an M&A possibility or are you looking at those also, these are all internally growth – internal growth projects?

It really covers everything, Sal. We never know what comes around. we just feel like we need to keep our eye in cash generation, be prepared. Sal Tharani – Goldman Sachs & Co.: And these are – these growth projects are – these are aside for what you’re doing for Carnegie Way. Is that correct?

I think everybody, everything right is for the Carnegie Way transformation. I mean there – I don’t think we would say there is anything we do, that’s not influenced by – and certainly driven by where we’re trading value. so in the project, they trade value, the ones we’re going to pursue. I think as Dave said, we have a lot of things we’re considering. When we have something that’s far along that it’s pretty definite that we’ll talk about and we really don’t have anything today that we’re ready to get into. Sal Tharani – Goldman Sachs & Co.: Okay. In terms of the chart you have on Slide 8 about Carnegie Way savings, supply chain is about – that’s about $100 million, just wondering if you can give us an example, that’s a big amount on just the supply chain and logistics.

I mean logistics is certainly a big piece of it. we spend a considerable effort in where we source from and who we source from, consolidation of suppliers to get volume positions, strategic alliances, contracting a lot of its contractors, eliminating contractors as part of that. so those are a lot of things that if you think about what you spend in the $16 billion cost structure. there is a lot opportunities, but the some of bigger wins would be improvements in the supplier base, more strategic alliances, more consolidation, consistency and logistical efficiencies, taking as much transpirational, I think equation as we can. Sal Tharani – Goldman Sachs & Co.: Okay. The last question I have is that, you’ve been giving this guidance on Carnegie Way for the last three quarters, you’re getting spoiled over. yes, I mean I was just wondering which inning are you in, you think on this whole effort?

It’s a journey, Sal. We’re building on it. And hopefully, we can continue to find the important areas where we can take away start of the system, improve the value that we can create and keep building on it. Sal Tharani – Goldman Sachs & Co.: You think there’s still lot more fact that we’ve taken out of the cost structure?

Well, we’re looking to underwrite and grow, and the journey there is going to require that we find more in that aspect. that’s why, we have disciplined approach with value in front of everything we do is, how we’re going at it. David B. Burritt: Yes. and part of it is, we implement a project with Gary Works, we implement a project with Gary that we find value in. That probably spurs five new projects behind it where we feel Great Lakes wherever is the work to Gary, let’s go to next plant and see what we can do there and what the value is? So every successful project has the potential to inspire more projects behind it and that part of the pipeline continues to build.

Our next question is from Dave Katz with JPMorgan. Please go ahead. Dave A. Katz – JPMorgan Securities LLC: Good morning. You said you expected $700 million of cash released in 2014 of which $400 million would be working capital. You released $363 million of working capital in 1Q, but said that the cash release in total in 1Q of that $700 million was only $250 million. Can you help reconcile that to expect working capital flows over the remaining quarters and the timing of the tax inflow? David B. Burritt: Well, on tax fees, certainly in a bigger piece the tax fees will come when we get the refunds from prior years. I mean in that kind, we lighted on the 10-K everything. So that’s one piece, one of the bigger pieces of working capital is, we – we’re making sure of where benchmarking is, right people and moving our terms, consistent with our competitors with the market. So getting our payment terms in line with the market is a big piece of that, and that would build throughout the year. Dave A. Katz – JPMorgan Securities LLC: Okay, I bet. Again, coming back to the $363 million and the $250 million, there is a discrepancy between those two amounts; I just want to get a little more clarity there? David B. Burritt: There’ll be really normal working capital fluctuations there as a part of doing business. The two items we call it out will be items that are outside of what you would normally see in our working capital flows. Dave A. Katz – JPMorgan Securities LLC: Okay. And then at the beginning of the call, you talked about the lost-and-found management approach where you’re looking to find offsets, when things go wrong or there are unforeseen circumstances. You talked about our Great Lakes Works, how you are bringing inflows from other locations? but in terms of longer term offsets, you avoided some of those. Can you talk about what you’ve done to help prepare the company, so that we don’t see a repeat of that outage? David B. Burritt: Well it’s in general every time that you make some plans, you have assumptions and you have structure that you put behind those assumptions to go execute. And those things are not always perfect, things happen. The ability to really identify what changes and then go look for how can we compensate is really a mindset of speed, tenacity and structure to do it. One example of what is going to be a better support for planning and execution comes out of what we are calling reliability centric maintenance. It’s a very expensive process in which you are going to create a much more robust ability to be more dependable. And things like that should certainly move us into direction, where some of these issues that catches by surprise are going to be minimized.

Our next question from Luke Folta with Jefferies. Please go ahead. Luke Folta – Jefferies LLC: Good morning, gentlemen.

Good morning, Luke.

Good morning, Luke. Luke Folta – Jefferies LLC: Two quick ones; first on North American Flat-rolled shipments, industry data suggest that U.S shipments are roughly flat year-on-year for the first quarter, you are down 8.5%, is that mostly due to the constraints in terms of capacity in raw materials, or is there some, I guess Carnegie Way limiting sales to unprofitable customers or some sort of strategy there that’s impacting that number?

Well, I think it’s both. We do have an impact, but there is, we have currently last contract percentage in the portfolio. We have more flexibility on the spot side, where we can make choices in areas, where they are not delivering the value that we need. So it’s really both. Luke Folta – Jefferies LLC: And just as a follow-up to that, can you, I mean, can you talk about any of the contract business that you have rationalized, I mean, the percentage of your contract businesses – business that you had last year, how much of that didn’t repeat into this year just given those choices?

I mean, we were probably running in rate 70% contract business last year. I think that number is quite closer to 60% today. Luke Folta – Jefferies LLC: All right, okay. Okay, and then just secondly, the energy cost you said that taking that gas costs were up $60 million if I heard correctly sequentially in 1Q, how of that reverses into the second quarter? Thanks?

I think generally it depends on what gas prices though. Luke Folta – Jefferies LLC: Yes.

I mean the way we said, we took a lot of actions, where we could swap different fuels for better net cost we did. But I think that really could be driven by the relationship of gas to coal and coal cost.

Yes. If we had moved this quickly as we did that $60 million would have been a meaningfully worse number, Luke. Luke Folta – Jefferies LLC: Thanks, guys

Thanks.

And we will go Matt Vittorioso with Barclays. Please go ahead. Matt Vittorioso – Barclays Capital: Yes, thanks for taking my question. I guess I’m going to ask an earlier question in a slightly different way. You did report a positive benefit from working capital in the first quarter of $363 million, by the time we get to year-end, what would you expect that $363 million to be for the full year, is that the $400 million that you noted earlier, or they are offsets for that that would reduce it, how do we map your guidance to what will be reported on the income statement at year end?

I think that’s just, I mean, what are our operating levels will be with demand, I mean that’s pretty profit try and forecast. Like I said, any other particular items we carved out or going to flow through outside of normal fluctuations. But I would say that if you walk market conditions as they go up and down, you expect to see on the reservoir working capital more as they normally would. Matt Vittorioso – Barclays Capital: Okay. And does the tax refund also flow through your changes in working capital on the income statement?

No. Matt Vittorioso – Barclays Capital: That will be an addition, okay. Just a quick follow-up on the overall market, we’ve heard some investors talk about potentially some of the recent strength in HRC prices being related to disruptions like you’ve seen in your own supply chain, those supply disruptions being that with normal spring demand, but as we move through the year that might ease. With raw material price is coming down, iron ore is coming down, met coals at pretty low prices, what’s your view on the second half of the year for steel prices given the lower raw material price environment and given the fact that supply chain disruptions are to be curtailed in the back half of the year? How do you sort of put all that together to come out with a price forecast? David B. Burritt: I would suggest that, these mini cycles will continue and depending on the amount of foreseen supply conditions. I just – we just go with the way that mini cycles are, it’s really hard to give you a figure there. It’s going to bounce up and down.

Our next question from Tony Rizzuto with Cowen & Co. Please go ahead. Tony B. Rizzuto – Cowen & Co. LLC: Thanks very much. Good morning.

Good morning, Tony. Tony B. Rizzuto – Cowen & Co. LLC: You quantified the natural gas impact in Q1 at $60 million, I was wondering if you could quantify the logistical challenges that you’re facing, and what those resulted in the quarter?

I mean, natural gas is easily measurable. I don’t think we have a nice clean number, where we call that one out. I’d say, I think everybody in the markets saw a lot of that impact, and I guess we’re finding difference in, from that standpoint, finding a difference in all of our competitors in our regions in the first quarter. Tony B. Rizzuto – Cowen & Co. LLC: Okay, all right. If I could just look at the guidance that you guys provided for this level, obviously it’s the guidance that you’re picking up or you could drive a truck through in terms of the loss for Flat-rolled, but just trying to think about that a little bit more. If you could give us a sense of the operating rate, the average operating rate that you guys are expecting for the second quarter. You did better than we thought, you might do in Q1, but is there anything you can say about that, the hope is now try to model the fixed cost aspect?

Well, we are expecting to restart Great Lakes 10 days from now something like that. And Gary has come back to live. It’s still tied to the supply material, so we’re monitoring that closely. The ability that we are going to have from a supply perspective to ramp up faster, will really determine how much we are going to be able to recover Tony, and we are right at the beginning of that phase right now. Tony B. Rizzuto – Cowen & Co. LLC: Okay. And then you guys mentioned earlier on the last quarterly conference call, there was a question earlier about coal, and you had indicated, I think in the last quarter that for the full year there are going to be some pretty significant savings. And I imagine obviously those are coming through a little bit more slowly, but where you along the lines that you’d kind of indicated $25 a ton, I think you guys put what $9 million tons a year?

Yes.

Yes. Tony B. Rizzuto – Cowen & Co. LLC: How far into that would you be and if you could give us sense there as well?

I mean that number is still, I mean those contracts are in place, so that’s what the numbers are going to be. Let’s say, it does take a little bit, you have to carry over time, you have some inventory burn. So we are trying to explode a little bit. But you would expect it as we get to those again in the second half of the year, we should be very close to the number we will talk about. Tony B. Rizzuto – Cowen & Co. LLC: Okay. And then as far as mix, you made some comments about mix, and just to explore that a little bit, so your contractual ratios come in a little bit as you indicated. But could you give us a little bit more delineation on your mix as you are seeing the second quarter shape up auto versus some of the other products that containers et cetera?

The only thing that I can tell you, Tony is that we have a lot more flexibility, giving the challenges that we have, as we have opened up more space for spot business. We’ve given the pressure that we have – we really have a lot more flexibility to address the contracts that we have. So I think we’re going to be somehow skewed towards contracts in the second quarter more than spot.

Next we’ll go to Brian Yu with Citi. Please go ahead. Brian Hsien Yu – Citigroup Global Markets Inc.: Great, thank you. First question is, just going a little back to what Tony was asking is, can you give us a sense of how much of your capacity is available today in Great Lakes outages and then possibly iron ore. Once Great Lakes come back on – comes back online, where does that put your available capacity and by the end of second quarter, should we assume that effectively you would be pretty close back to normal operations?

We will be back to depth that what we’re expecting is that we’re going to be back at the end of the second quarter to normal operations. Brian Hsien Yu – Citigroup Global Markets Inc.: Okay. Would you give us a – we will get a sense of the steps and the milestones where is the utilization or available capacity today, once greatly come back online, where is that in 2Q?

Well. I think the more that the premier challenge there is going to be the steady supply of iron ore, because I think we had some pictures that you saw, the cutters are still necessary to bring the vessels through. the pace is slower and we have two vessels, they have been pierced by unheard of icebergs that are – they have been removed for repair and then it’s going to take a week at least to get them back on. So, it’s really more dependent on our ability to keep bringing the ore in and crank the capacity up and supported their run rather than you go up and then you have to back down. So I think we are being careful and provide a steady flow, keep the operations in control, and then get to the end of the quarter at a very sustainable pace. Brian Hsien Yu – Citigroup Global Markets Inc.: Okay. A follow-up question on budget Carnegie is the $200 million in cost savings and I’ve already seen the U.S. Steel was one of those companies that you always try to save cost just like your competitors with this incremental $290 million, is this something that above and beyond what the company has been doing in the past and effectively would lead probably to you guys ahead of your and essentially move you down the cost curve or some of this had normal cost savings that everybody else has joined to?

It’s definitely something that should differentiate as going forward. no question about it, that’s the determination that is a – that’s the teams have in front of them. It’s to do a lot better and to make it sustainable, not something that we’re curtailing temporary. It’s changing the way in which we do things. We’d look at the amount of ways and we take it out, it’s really, that’s why we call it transformation. Brian Hsien Yu – Citigroup Global Markets Inc.: Okay. Thank you.

You’re welcome.

Our next question is from Gordon Johnson with Axiom Capital Management. Please go ahead. Gordon L. Johnson – Axiom Capital Management, Inc.: Thanks. let me ask the question. I guess just focusing on prior question that was asked, looking at the second half. we’re looking at import licenses in the U.S., the spread between U.S. and foreign HRC prices and that looks like unfortunately, you guys may not get the benefit from the price side for 2Q. So, looking to the second half and specifically the expectations for your earnings, it looks like people are expecting the earnings increased significantly. Is there a potential risk to those earnings, if we see an influx of imports onto – into U.S. shores and I have a follow-up?

Well, as I was mentioning before Gordon, these many cycles have so many different leverage there that it is hard to say, but to look the recent past that there has been quite an interesting sustainable period where prices have been sustained here regardless of the ups and downs. but I’d personally feel that if it’s going to be volatile, big time imports come in, I think it will certainly impact prices. Gordon L. Johnson – Axiom Capital Management, Inc.: Okay, that’s helpful. and then I guess focusing on the questions asked again, this is a different way looking at where iron ore prices are right now and some, I guess puts and takes are on iron ore prices with import inventory in China, and I guess potential risk there. if we continue to see a deterioration in iron ore prices, again, do you guys expect that to negatively impact overall steel pricing, and how do you plan to navigate if iron ore prices and the steel prices continue to fall through the second half? Thanks, again.

It think you’ve going back to what we are going, we are focus on the side of that equation we control, I mean, supplying demand we can control. So our focus is on, our business model and how we improve our structure because it’s a tough market, it’s a volatile market. We need a lower structure, we need more flexibility in that, the objective is I think that’s how we combat it. Gordon L. Johnson – Axiom Capital Management, Inc.: Thank you.

Thank you.

Our next question comes from Timna Tanners with Bank of America Merrill Lynch. Please go ahead. Timna Tanners – Bank of America Merrill Lynch: Hi, good morning.

Good morning. Timna Tanners – Bank of America Merrill Lynch: Just wanted to pull a little bit take a step back so you’re going to pay down the covert that matures in a couple of week. We kind of thought maybe you would preserve liquidity, a good chance to revisit uses of cash going forward. So if you could kind of provide us an update on how you’re looking at some other things you talked about with regard to DRI of on expanding iron ore we stop you are pursuing a coke batteries I am not sure how that fix in, but if could just give us an update on some other projects you talked about? David B. Burritt: So, I mean we are certainly here with $2.7 billion of liquidity. So, I don’t think that’s a very small number, the projects that we sat out to go pursue that remain in the queue before working that the DRI attachment continues, we have validated our lower certainly is capable, we do have enough reserves. It will play eventually a roll in two front, I mean it maybe and I’ll turn it to supply for us once you get the electric arc furnace in place, it may turn into a product we are analyzing that possibility too early to tell that the converts are the convert, if the share price gets there pay that way we got enough cash to deal with it Timna Tanners – Bank of America Merrill Lynch: Yes, go ahead and say

I think we have couple of additional cash items we just called out, even after we got converts, we are looking into pretty substantial cash position here. Timna Tanners – Bank of America Merrill Lynch: : David B. Burritt: Well, I think in SG&A, our view is that needs to go down that’s still, they’re still a lot of work that we have in the pipeline. I don’t think we are satisfied where we need to be there I think CapEx if you look back in appendix and then filed in 10-Q, we are forecast 620 for the year.

Accounting David B. Burritt: I mean that we are asked first quarter flows I think we quite saw some challenges on projects, you might had some delay in your area, but we are still looking at somewhere in that 620 range for the year. Timna Tanners – Bank of America Merrill Lynch: Okay, got it thanks David B. Burritt: You’re welcome.

Our next question is from Michael Gambardella with JP Morgan.please go ahead. Michael Gambardella – JPMorgan: Yes good morning guys. David B. Burritt: Hi, Mike. Good morning Mike. Michael Gambardella – JPMorgan: Couple of questions, first on the outages. The outages, because the ones that are related to the raw materials slow limitation. In the stay that you guys are being more negative expected and most ever grows in the late? David B. Burritt: Yes, it is , if you look at the geographic position that we have when you compare the mine and they were supplied with the operating facilities we really are the once that are much more dependent on Lake Superior than any other ones. And what we have learned throughout this winter here certainly is a new data point and we’re analyzing how we’re going to be prepared to deal with this. Is this the new norm and are we going to have what is the best solution, do we put more or some other place, are we go into [semi-fab inventors] (ph), semi-fabricated inventory. So all of those things are being analyzed as a consequence of what we just learned here. Michael Gambardella – JPMorgan: So a lot of your competitors on their conference calls for the first quarter highlighted the significant outages in the sheet market and they’re primarily your operations. And one of your competitors Nucor on their call they identified you specifically but they didn’t say that and they have customers coming to them that are customers at these plants that do not have outages like yours. They are basically saying, we are not going to take your business, unless you can guarantee that you buy from us the rest of the year. And they say that they are locking in business for the rest of the year with basically your clients. I know your outages you expect to be backup by the third quarter, but do you feel that you’ve lost market share not permanently but for the rest of the year, because some of your competitors may be all of them at Nucor have basically turned the customers they are not going to give them the volume right now, unless they guaranty to take volume from them and not you for the rest of the year. David B. Burritt: Well, I think what you’re commenting is just the effect of life, this is the way goes and there is more to a customer relationship as you also know Mike than a temporary disruption. The context in which we operate with our customers is much broader than that. And everybody is susceptible to having a difficult but at certain point and time, I’d look at the relationships and the way that we’re handling the situation, the way that customers are responding to a very large degree, it’s the opposite on what you just commented. They are working with us, because they understand how we’re dealing with it, they understand what has happened. And they demonstrate that they are committed because there is a lot more benefit that they have in dealing with us, than just looking at this temporary issue.

Our next question is from Justine Fisher, Goldman Sachs. Please go ahead. Justine Beth Fisher – Goldman, Sachs & Co.: Good morning. David B. Burritt: Good morning Justine. Justine Beth Fisher – Goldman, Sachs & Co.: I just wanted to get clarify on the cash flow side again, when you started the presentation there was a slide on cash flows you can expect all the credit analyst to turn up on this issue. When you say that you expect this $700 million cash flow improvement, can you just define what you mean by that is that total cash flow versus, what it was in 2013? I know we know working capital for your comment should be about $400 million gain for the year, but how do you define that $700 million, is it relative to something or is it just absolute working capital plus cash from operations? Can you just give us some color on that please? David B. Burritt: These are two the straight incremental projects that are worth $700 million on cash. Justine Beth Fisher – Goldman, Sachs & Co.: But is this $700 million, an increase in cash versus full year 2013, or is it just cash that should be generated and will it be offset by something? I mean, I just don’t know how we define that number? David B. Burritt: This is cash that’s going to be generated that’s new. I mean, our movement payment term is cash, that’s new cash that’s going to stay. Justine Beth Fisher – Goldman, Sachs & Co.: Okay. David B. Burritt: Once you’ve said you’re paying terms back out of the industry standard that will bring $400 million indoor. Justine Beth Fisher – Goldman, Sachs & Co.: Okay. And then my only question is…

The tax piece is, the tax piece is we have refunds coming. I mean that’s just (indiscernible). Justine Beth Fisher – Goldman, Sachs & Co.: Right, okay. Okay. And then my other question is just as far as how we might judge the impact of project Carnegie, I mean, one way I might think we can look at it is by looking at the company’s EBITDA margin, but of course every quarter EBITDA margin can also be significantly affected by changes in price or outages as we saw in the first quarter. So if you were to give investors and analysts a number to look at, so that we can see tangible results of project Carnegie, should we look at EBITDA margin with the company consider giving us kind of a margin excluding raw materials, is there something like that going forward, so that we can see in the numbers, the benefits of project Carnegie maybe not overshadowed by changes in pricing or raw materials?

Well, I think all of your market force is always going to be there. I think, I mean our changes are going to show up in our margins. But I mean, depending on what you plug into your model for HRC or whatever else, the commercial impacts are going to be what they are. So I don’t think we would try and model that out, I mean, it’s just what we are attacking the other side of the business. To the extent, our objective is that our margins will be the best that can be with whatever the commercial conditions are. Justine Beth Fisher – Goldman, Sachs & Co.: Okay, thanks.

Our next question is from Phil Gibbs with KeyBanc. Please go ahead. Philip N. Gibbs – KeyBanc Capital Markets, Inc.: Good morning.

Hey, Philips.

Good morning. Philip N. Gibbs – KeyBanc Capital Markets, Inc.: Thanks for taking my question.

Sure. Philip N. Gibbs – KeyBanc Capital Markets, Inc.: Mario, I just wanted to get some of your thoughts on the automotive platform and some of your vision on some value creating efficiency projects and that piece of the business. I know you discuss in your orientation of the footprint, some new products, geographies, where are we in that process, and what should to some of the bigger things in that piece look like going forward, or what do you envision in that piece? David B. Burritt: Well, early here to game, we’re boosting the capabilities that we add for a while, we know both in the energy business, as well as the automotive business. So we should see an acceleration of delivery in the delivery of new products to market. So there is a combination of, for example, connection development with the ability to ramp up production in those which we should see coming up in the next 18 or 24 months becoming very meaningful. The other one is the acceleration of the breadth of high-strength steels that are going to be required for the light weighting that we’re envisioning delivering to the OEMs. It really has been probably a lack of proper amount of resources, and I think we’re addressing that quite intensely over here. The other thing is the closer that we get with the customers, we’re learning more, and we’re able to give them reference using how they structure their designs for the applications they need. That can accelerate the utilization of these steels. Moving away from previous references on angels matures, how they connect things, is going to give us more of an opportunity to help them achieve what they want and preserve the value of that steel brings. So that sort of in general what we should see happening in the next two years. And we’re going to put in place a group that is going to begin to look beyond the normal technologies and try to identify what are the new technologies that are coming in that we can connect to the solutions that we’re thinking of bringing to the table. So a lot to work on in, in the next two years for sure. Philip N. Gibbs – KeyBanc Capital Markets, Inc.: Okay. And then I just had one more if I could Mario, I appreciate that. You say you’ll have production essentially up by the end of the second quarter. but when should we expect you to catch up on your backlog, call it on the contract side, so that you can be a more meaningful player in the spot piece? Thanks.

I think that by the time we entered the third quarter, I would like to see our operations getting back to that kind of flexibility that we designed for the year, and therefore, be a part with the contract commitments and having the flexibility on the spot side, that’s what we’re looking at right now.

Our next question from John Tumazos with John Tumazos Very Independent Research. Please go ahead. John C. Tumazos – John Tumazos Very Independent Research LLC: Thank you very much for taking my question. First, you said your automotive gal volume will be a little less in the second quarter. I would think from your standpoint, you’d rather so less slabs, you’re less hot-rolled and more of the higher value product. Are the constrained facilities at Great Lakes and Gary important for it is interstitial free steels and depriving you of the feedstock for the automotive gal product, number one question? Second, could you update us on your strategy for hot strip growing in the generation three or generation four automotive steels a year ago, you have had some discussions without tech about their new rolling though?

For the first question, the answer is yes, of course, they were connected. And there is a challenge there until we get the facilities back up from running. There is a challenge there and that’s why we’re so closer to customers to minimize the impact on them.

I think John, the other thing we’ve made – we’ve just referred in comments. We have produced gen three steel from our existing facilities. But certainly, we would never rule out, if there is something available to us and will help us, we look at it. But we actually did the coals we have that our gen three came off and partly our own facilities.

It is one of those things that we have been accelerating of when it comes to development, related to the previous questions that were asked. we’re faster in bringing to market solutions that we can deploy to a commercial volume more quickly. John C. Tumazos – John Tumazos Very Independent Research LLC: Do you feel a disadvantage to the ArcelorMittal, Nippon and Sumitomo solution being offered to the customers from calendar number one? And number two, they are – the number two Japanese Steel Company, JFE also will want to get into the market and supply the automotive companies from Japan in the U.S. How is your capability in gen three or program improvements compared to those two solutions from competitors?

In simple terms, I don’t think we’re a second to anybody at this point in the development and these steels and based on what we’ve seen and the responses that we’ve had from the customers that we’re working with. they actually are very surprised with the quality of the material that we’ve developed. So I have absolutely no sense that we’re buying to anybody at this point in time.

Our next question is from Aldo Mazzaferro with Macquarie. Please go ahead. You got to go. Aldo Mazzaferro – Macquarie Capital, Inc.: Good morning, Mario. How are you?

Hey, good morning, Aldo. Aldo Mazzaferro – Macquarie Capital, Inc.: John just asked my question on the automotive deploying there on the coated products. So, you’d see to say, it was due to the supply constraints rather than any loss of market to aluminum or anything like that, right?

Yes. Aldo Mazzaferro – Macquarie Capital, Inc.: Yes. And my other question is on the – well on the production run rate and things, and I’m looking at your working capital declines, which were quite impressive sources of cash out of the working capital. can you say if a lot of that was from finished products that you sold out inventory, or it was a lot of it more from the ability to get raw materials?

You broke up Aldo, we lost the end of your question. Aldo Mazzaferro – Macquarie Capital, Inc.: I’m sorry.

Aldo, we missed the last part of the question. Aldo Mazzaferro – Macquarie Capital, Inc.: Do you want me to repeat the question?

Yes, we broke up on our end a little bit. Aldo Mazzaferro – Macquarie Capital, Inc.: Sorry, on the working capital reduction, especially in the inventory, I’m wondering if a lot of that is due to a sale of finished products from inventory, as you replaced the lost production or whether it was for some other changes.

A part of it is we have some more in-process and finished, because we’re catching up. but not on the pellet side, we have pellet inventory. it was just not where we needed to be. so but I mean as we – you have your own fluctuations, but certainly as we alluded to, to sort of our customers, we’ve had the utilized in-process and finished that otherwise we won’t.

But there is also the raw material is less, and in this inventory space, over time, we’ll see probably a couple of hundred million dollars increase in inventories throughout the rest of the year. with a portion of that we mentioned earlier, relative to pay may more than terms on tax benefits will continue. but the inventory number will probably come back by a couple of hundred million and a big chunk of that was related to raw materials. Aldo Mazzaferro – Macquarie Capital, Inc.: Again. And my second question, thank you. On the outages that you’re suffering in the first quarter or even right now, say the month of April. Can you say whether the Great Lakes outage is impacting your [outputs] (ph) by a greater amount in the Gary limitations or is it Gary that’s greater than Great Lakes?

I think it’s balanced, Aldo.

That really, it’s driven by the pellets, as pellet availability is the winning factor.

All right. Hey, we’d like to thank everybody for being with us today. We appreciate your interest in. we will be back with you in coming July. Thank you.

Ladies and gentlemen, this conference is available for replay, it starts today at 11:00 A.M. Eastern Time until May 14 at midnight, you may access the replay at anytime by dialing 320-365-3844, the access code, 324155. That number again, 320-365-3844 and the access code, 324155. That does conclude your conference. thank you for your participation. You may now disconnect.