Dan Lesnak - General Manager, IR Mario Longhi - President and CEO David B. Burritt - EVP and CFO

Luke Folta - Jefferies & Co. Anthony Rizzuto - Cowen Group Evan Kurtz - Morgan Stanley Sal Tharani - Goldman Sachs Brett Levy - Jefferies Matt Vittorioso - Barclays Capital Curtis Woodworth - Nomura Securities International Timna Tanners - Bank of America Merrill Lynch Justine Fisher - Goldman Sachs Phillip Gibbs - KeyBanc Capital Markets Jorge Beristain - Deutsche Bank Research Charles Bradford - Bradford Research Brian Yu - Citigroup Research Aldo Mazzaferro - Macquarie Research Matt Murphy - UBS

Ladies and gentlemen, good morning. Thank you for standing by, and welcome to the United States Steel Corporation's Second Quarter 2014 Earnings Conference Call and Webcast. At this time, all lines are in a listen-only mode. Later there will be an opportunity for your questions and instructions will be given at that time. (Operator Instructions) And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, General Manager of Investors Relations, Mr. Dan Lesnak. Please go ahead.

Thank you, Tom. Good morning and thanks all of you for participating in this morning's conference call and webcast. For those of you participating by phone, the slides included on the webcast are also available under the Investors section of our Web-site 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 would turn it over to our CFO, Dave Burritt. David B. Burritt: Thank you, Dan. Good morning, everyone, and thank you for joining us. Turning to Slide 3, we reported income from operations for our reportable segments and other businesses of $132 million. This is notable because we were faced with significant operating challenges, particularly in our Flat-rolled segment. Despite that, our employees remained committed to finding opportunities and developing solutions to offset all of the challenging issues they faced. By utilizing the lost and found management approach we discussed with you on our April earnings call and maintaining the focus and intensity of our Carnegie Way transformation efforts, our employees found sources of value that kept us profitable through this difficult period. We are driving disciplined execution against the pipeline of projects as part of the Carnegie Way methodology. This pipeline of projects covers all core business processes including commercial, supply chain, manufacturing, procurement, innovation, and functional support. This is a deliberate purposeful march towards value. This is being driven by the thousands of employees and it's driving a culture of accountability at all levels of our organisation. 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 at the end of the second quarter we have almost $1.5 billion of cash on the balance sheet after we repaid $322 million of debt. This $1.5 billion on the balance sheet is up from $600 million at the end of 2013 and $1.1 billion at the end of the first quarter. As a result of this significant increase in our cash position and the debt repayment, our net debt has improved by almost $1.2 billion since the end of 2013, it is now approximately $2.2 billion. Our total cash and liquidity is now an excess of $3.2 billion. As part of the Carnegie Way transformation, we have generated almost $1.4 billion of cash flow from our operations. Last quarter we highlighted two projects that would generate an incremental cash benefit this year of $700 million in 2014, $400 million from working capital improvements and $300 million resulting from a large tax reduction we are able to take at the end of 2013. We had already realized $250 million of those benefits in the first quarter and we realized an additional $400 million this quarter. Needless to say, we continue to look for more opportunities to strengthen our cash position. We have developed a customer-focused macro business strategy that will drive resource allocation going forward. We'll use the cash to fund high return projects and to pursue profitable growth opportunities. We are comfortable that we have the cash on hand as well as the ongoing ability to generate cash to survive adverse market conditions. We have started execution of several strategic projects that will develop the value-added products and services that our customers will need in the future that will keep U.S. Steel as the supplier of choice for the products they need. While we are pleased with our Carnegie Way journey, we recognize the large improvements required to deliver sustainable profits and we are collaborating with appropriate stakeholders in a mutually beneficial way. We are very pleased with the teamwork. Dan will now provide additional details about our second quarter segment results.

Thank you, Dave. Our Flat-rolled segment had operating income of $30 million in the second quarter. Despite the weather and operational issues typically impacting the quarter, the Flat-rolled segment remained profitable, thanks to benefits generated by our Carnegie Way efforts. Logistic and operational issues curtailed production in part of the quarter resulting in operating inefficiencies, high repair and maintenance cost and lower shipments as compared to the first quarter. Average proceeds benefited from improved market conditions in North America in the second quarter. Our Tubular segment had operating income of $47 million in second quarter. Imports into that market continue to put pressure on pricing. Despite stagnant prices, operating income rose on higher shipments due to increased drilling activity and lower substrate cost as compared to the first quarter. Our European segment had operating income of $38 million. Operating income increased compared to first quarter despite the absence of income from the sale and swap of carbon emission allowances realized in the first quarter. The segment primarily benefited from low iron ore costs while prices of shipments remained flat versus the first quarter. Now I'll turn the call back to Dave for some additional comments on our Carnegie Way transformation. David B. Burritt: Hanks Dan. As promised, we will update you every quarter on our progress on the Carnegie Way transformation. Turning to Slide 8, we continue to make significant progress as our pipeline of value creating projects continues to grow and we continue to focus on the detailed and structured execution and implementation of these projects. Carnegie Way benefits now total $435 million, with $140 million of benefits we reported in April. Our total benefits had grown to $290 million for 2014. During the second quarter, we implemented new projects that will improve our margins by an additional $145 million in 2014, getting us to the new total of $435 million. These benefits primarily include improvements in our manufacturing processes, supply chain and logistics as well as additional SG&A reductions. Couple of examples of some of the bigger projects include, the continuing reduction of the use of outside contractors. Last quarter we reported to you that the benefit from this in 2014 would be $20 million and that number has now grown to $30 million. Additional improvements in steel making costs at USSK, last quarter we disclosed $30 million from the improved cost and yields at the blast furnaces and we have now implemented improvements at the basic oxygen steel shop that increased this benefit to $35 million. And as we continue to implement our ERP solution, we eliminate the costs associated with supporting our old proprietary legacy systems providing a $15 million benefit this year. Again, this increases our total Carnegie Way benefits to be realized in 2014 to $435 million. I'd once again like to emphasize that these are not targets or objectives and they are not speculative, these are results of projects and improvements that have been implemented. We have established best practices around measurement and tracking of the benefits we are realizing from these projects. As I have said before, we are executing this at a rapid pace. Our favorable results in the second quarter, given the challenges we face in our strong third quarter guidance, are just beginning to show the improved earnings power that we are creating. Now on Slide 9, I would like to provide an update on our Carnegie Way transformation process. As we have discussed in the past, the Carnegie Way is focused on value creation through a disciplined and structured improvement process, with the ultimate objective being to earn an economic profit throughout the economic cycle and deliver above market returns to our stockholders. Our strategy has two phases. Phase I is earning the right to grow, Phase II is about driving profitable growth. We are clearly still in Phase I but we are encouraged by the significant progress we have made and more importantly by the rate at which the process has been moving. The momentum we have generated has facilitated the engagement of more of our talented people throughout all levels of organization and we are seeing the talent and capabilities of our workforce expanding as they learn and adopt the Carnegie Way approach to problem-solving and implementing effective and sustainable change. While it would be convenient for the world to wait for us to get through Phase I, that is not likely to be the case and we understand that if opportunities arise, that would help us achieve the Phase II objective of driving and sustaining profitable growth, then we will have to adapt and pursue those opportunities with the same focus and intensity that is driving improvements as we speak. We are focused on the opportunity and challenges of getting each of our existing operations to deliver the returns we need in order to earn the right to grow. When we earn the right to grow, we can accelerate our profitable growth strategy. The way we think about profitable growth is to pursue business where we can achieve economic profit. In addition to organic growth, we will explore M&A activities only where we can earn economic profit, that is acquisitions that have return on invested capital greater than our weighted average cost of capital. But to be clear, we must be comfortable. We generate adequate returns. We look at a lot of possibilities but pass on most because we don't see a line of sight to value. We've already made some significant improvements to many of our businesses and we have made the difficult decision to exit a couple that we could not fix. We still have difficult problems to solve in many areas and we are committed to finding the appropriate solutions to these problems on a timely basis. We need to be ready to capture and create value for all of our stakeholders when the opportunity arises, and now I will turn the call over to Mario to cover several important areas.

Thank you, Dave. Good morning, everyone. The flat-rolled market in North America appears to be very stable at this time as steel consumption in the U.S. market has bounced back quite well after the harsh winter weather finally subsided. The extreme weather conditions at the start of the year impacted numerous industry statistics such as steel production, service center shipment volumes, and construction starts. Just getting materials moved around the country proved to be an extraordinary task which likely dampened expectations as to the underlying strength of the economy. However, second quarter data points have suggested that the market here is consuming flat-rolled at a rate well above 2013 levels and has prompted both spot and contractual industries to keep buying steel to keep up with demand. The inventory supply chain continues to operate at a relatively low level and mill lead times were fairly stable at four to five weeks for hot-rolled coiled most of the quarter. We have not seen the typical summer slowdown in the North American market for several reasons. Automotive build rate, which is usually slow significantly in July for model year changeovers, have remained strong. Both U.S. and Canadian service center inventories are below typical levels and both regions are shipping at higher volumes year-over-year. The effects of significant mill outages in the second quarter have resulted in very lean supply chain inventories carried over into the third quarter. Construction demand and order rates have been improving. The constant threat of importing steel remains significant and can put somewhat of a cap in North American prices. However, stronger demand has been helping to keep prices relatively stable. Fundamentals in the energy tubular market were generally strong during the second quarter led by strength in onshore horizontal oil drilling. By the end of the second quarter, the oil direct rig count had climbed to the highest level in that case. We expect the average third quarter U.S. rig count to increase to its highest level in the past two years, generating increased operator consumption of OCTG. We expect the oil directed recount will remain strong with oil prices projected to remain near $100 per barrel throughout the third quarter. Natural gas prices are projected to remain significantly above the year ago levels during the third quarter but we expect natural gas drilling to remain relatively low as compared to the strength in oil directed drilling. The U.S. Department of Commerce issued final margin determination in the OCTG trade case on July 11. Most importantly, for the domestic industry, anti-dumping margins were also placed on Korean imports reversing the preliminary ruling from February. Although we view the final DoC determination as positive, OCTG supply particularly commodity grade ERW will likely remain abundant into the third quarter as the market is well supplied with inventory, foreign offerings and additional domestic capacity. However, increased demand for premium products could allow for some upward price movement. Economic data currently indicates that a recovery in Europe is beginning to take hold, although momentum remains rather modes. While demand has strengthened moderately, imports continue to make this a challenging market. Now turning to our outlook for the third quarter, we expect a significant improvement in our Flat-rolled earnings as we return to normal operating levels and are able to more fully participate in all of the markets we typically serve. The contractual volumes we have in our order book are what we expected them to be and we have not seen any negative change in spot market purchasing patterns on our facilities. We expect our contract versus spot shipping mix to be in line with the expectations we had as we entered the year. Our operational challenges in the second quarter negatively affected our North American flat-rolled earnings by approximately $150 million, but those challenges are behind us now and we are well positioned to benefit from favorable demand in many of the markets we serve, and our increasing Carnegie Way benefits will continue and they will find their way to the bottom line. In Europe, we expect seasonally lower demand and we have blast furnace and caster maintenance projects to complete, but lower raw material costs will partially offset these items and our operations will continue to be profitable. In our Tubular segment, we expect lower volumes as we complete the idling of our unprofitable operations in McKeesport and Bellville, but improving pricing and a stronger product mix will result in slightly higher margins for our Tubular business. While we are pleased that the DoC has granted us some relief in their recent ruling on the OCTG trade case, we do not anticipate that any benefits will be realized until after the third quarter. Before we take your questions, I would like to give a quick update on our operations as we work through the significant challenges we were faced with in the second quarter and our increased focus and progress on innovation and product development. The operational challenges we faced in the second quarter were far greater than those we faced in the first quarter and were some of the most difficult we have ever faced. For example, the steel shop at our Great Lakes Works was offline for half of the quarter. And while we were dealing with all of these challenges, we worked aggressively to utilize our entire steel-making system to satisfy our customers' needs. We moved certain products to other plants where possible, we brought in slabs from our European operations and we drilled down on our in-process and finished steel inventory as far as possible. With all of our operations back on line and our iron ore pellets arriving at normal rates by mid-May, we were able to address our backlog of customer orders by the end of the quarter. We entered the third quarter in a normal operating position, although it will take more time to completely restore our steel and iron ore pellet inventories to their appropriate levels. I do want to express my sincere thanks to all our customers who endured the difficulties of the second quarter with us, as we are actively aware of the intense cooperation and communication that was required to keep their facilities running with flat-rolled steel deliveries from our plants. Their willingness to work hard with us is a testament to the relationships which we have developed over the years and we are committed to serving them even more effectively moving forward as we continue to rollout our reliability-centric maintenance program at our mills and our dynamic sales and operation planning process as part of our Carnegie Way transformation. Also to support our customers, we are increasing our commitment to research and development to expand and accelerate our capability to provide steel products and solutions of the future. We're expanding the capability of our research and technology center in Pittsburgh adding new research equipment and personnel that will support automotive and tubular product and process research, fundamental research and the development of steel solutions for our customers. At our dedicated automotive research facility in Michigan, we continue to advance the development of advanced high strength steel. We have many process development projects, customer focused projects using new products and we are designing automotive part solutions with our customers. We have been developing new steels for use in vehicle platforms and there are steel-based intensive vehicle platforms in 2015 that are capable of delivering comparable fuel economy to platforms using alternative materials for both cars and trucks. And it's worth noting that these steel solutions offer a more economical total value proposition to our customers and leave a smaller carbon footprint than materials that cannot be easily recycled like steel already used today. We are also developing new grades of steel that are making their way into future platforms which will offer even greater value to our customers, and in fact, we have produced Generation 3 grades of steel that are being evaluated by our customers right now and we look forward to accelerating our commercial volumes of these grades with our customers. Our dedicated tubular research facility continues to develop our line of proprietary premium and semi-premium connections and to work with our customers to develop solutions for all of their exploration and production needs. We are committed to innovation and we plan to increase investments in innovation across the Company as we pursue those differentiated products, markets and steel solutions that can bring real values to our customers.

Thank you, Mario. Tom, can you please queue line for questions?

(Operator Instructions) Our first question today comes from the line of Luke Folta representing Jefferies. Please go ahead. Luke Folta - Jefferies & Co.: Congrats to you and the team on your execution this quarter, pretty impressive. First question, on the $150 million of cost improvement that you see in 3Q, can you talk about how much of that you expect to be discrete cost items that you saw in the second quarter associated with repair and maintenance and otherwise versus volumes? I guess the main question being, does that $150 million include the volume benefit or would that be something on top of that?

That $150 million is basically what the change in 2Q would have been if we not had all those challenges. So when we talk about, we talk about higher volumes in the 3Q, that will be a separate item aside from that $150 million. That $150 million is just kind of what equalises you back to a normalised quarter. Luke Folta - Jefferies & Co.: So that $150 million, at your volume level that you saw in 2Q, the discrete items that if you didn't had the weather issues, that that would – that's how to think about that, just ship that right out there?

Yes, that's right. Luke Folta - Jefferies & Co.: Okay. Second one, I'm interested in your thoughts just on the Severstal deal, I think it was in the press that you guys released, kicking the tires on it and looking at it, just curious as to what your – ultimately is that something that you looked at, didn't see enough synergy or value in or is it a function of the purchase price that was ultimately paid, can you just give us I guess some thoughts on why you didn't pursue that to a greater extent?

Luke, you will certainly get a much better level of information talking directly to them. As far as we are concerned, we normally just remain alert to everything that happens in the marketplace and we would pursue opportunities that would provide support to a solid business case. Luke Folta - Jefferies & Co.: Okay. And just lastly, the $435 million of Carnegie savings that you've announced here today, I guess how much of that should we think about already being in the first or the second quarter kind of run rate numbers versus what we can see in the second half?

Those were really put in place throughout the quarter. So I mean if you were going to allocate it, whether you'd say half a quarter benefit and spread the rest, that would probably directionally get you in probably the right zone. Luke Folta - Jefferies & Co.: Okay, thanks a lot.

Our next question today comes from the line of Tony Rizzuto with Cowen and Company. Please go ahead. Anthony Rizzuto - Cowen Group: My first question is just the follow-up of flat-rolled shipment volumes, looked they were stronger than what we were anticipating and thinking about the third quarter and you made the comment earlier about flat-rolled demand being above 2013 levels. Should we be thinking about the shipment levels for 3Q being closer to the first quarter levels or is it possible we could be looking closer to 2012 levels?

I think you could consider potentially being slightly better than first quarter levels. Anthony Rizzuto - Cowen Group: Alright, that's helpful. And just want to ask a question just a follow-up question on Severstal and you had Great Lakes out for half of the quarter and there's been some comments by some of the folks I speak to in the industry that U.S. Steel maybe needed those assets to help improve the situation in the Great Lakes, and I was wondering if you could maybe make some comments about that and how that might have affected? Was it something that might have been important from a synergistic standpoint or maybe you could just comment on that and any thoughts you may have to give us a little bit more color in understanding your position there?

We are not in the situation where we would need anything else. So we really need is to keep focusing through the Carnegie Way approach for maintenance and reliability. There's plenty of opportunities there and we know that we're not where we need to be nor where we can be and that's what we're diligently working for and the change in that regard has started.

Our next question comes from the line of Evan Kurtz representing Morgan Stanley. Please go ahead. Evan Kurtz - Morgan Stanley: So a question on 8K that you guys filed a couple of days ago, I think you made some amendments to some of your receivables purchase agreement up in Canada, and it seemed like that might have been an initial step to potentially distance yourself a little bit from that business in case you did want to pursue some sort of a restructuring process up there. And I was just wondering, is that something that – how you're thinking about that as something that we could see sooner or later or just thoughts there?

The filing that you saw basically is geared up to continue to give us the additional levels of flexibility that in this kinds of business that we're in are necessary, and we've been looking at every angle of our business and Canada certainly is one that is challenging and we're still working on it and we're going to keep working on it. No decisions have been made on anything yet over that. Evan Kurtz - Morgan Stanley: Can you say if that business is currently generating a profit or is it loss making?

Unfortunately it's not generating a profit. Evan Kurtz - Morgan Stanley: Okay, that's helpful, thanks. And maybe just one question on OCTG. You mentioned that the trade case won't have any impact on the third quarter, but I guess the ruling left a lot of people kind of scratching their head, what does 10% to 15% mean for the industry. So as you kind of maybe look out further when it will actually have an impact once inventories are rolled down a little bit, how do you see that impacting the market? Do you think that it's more of a volume impact or is it maybe benefit on pricing, any sort of color there will be helpful?

What we perceive is that certainly the decisions that have been made will not have an impact on third quarter and certainly the market will absorb as it normally does any forces that come to play. So we shall see what it's going to do. But certainly it was a positive decision because we really have a position to compete and succeed as the level-playing field is there. Evan Kurtz - Morgan Stanley: Thanks so much, guys.

Our next question today comes from the line of Sal Tharani with Goldman Sachs. Please go ahead. Sal Tharani - Goldman Sachs: David, a couple of housekeeping items in the press release. Income from investees, can you explain what that was $57 million I believe, and what is the reason to take this big legal reserve at this point?

Sal, on income from investees, that's actually, a big piece of that is related to our mining JVs but actually it's just the accounting treatment. There is actually a pretty big offset actually in cost of goods sold. So if you net that out, income from investees is really probably net more in the range of $20 million, which is more of a normal level. We were pricing some better results from the other flat-rolled JVs. So, if you take that COGS piece out, offset against that, $20 million income from investees is not really an unusual number. Sal Tharani - Goldman Sachs: Right. And the legal reserve?

We always have things out there. We really don't want to comment on litigation when it's still in the courts. We just had a piece that fell in the category of where you should take your reserve when you have some knowledge of quantifying it and we did. Sal Tharani - Goldman Sachs: Okay. Mario, just one more question. You look at the flat-rolled market right now and look at the imports, you can see the imports share in the U.S. and the steel has increased a lot and obviously you and other steel participants have commented about it, but even despite that – and you look at the service center shipment only up 5%, does it look like that actual demand, underlying demand is even stronger than what the macro data suggests because we don't see inventory build despite all these imports coming in and steel mills are shipping and having lead times extending continuously, although we are going to the summer, what do you hear from your customers?

First of all, as we're related, Sal, we're not seeing the normal summer slowdown that happens in some of the market segments. The orders are coming in on a fairly regular basis per the robust form and the interaction with the customers is not revealing any sign that there is a weakness that we could be realizing coming into the third quarter. So I think the third quarter is poised to remain robust.

Our next question comes from the line of Brett Levy with Jefferies. Please go ahead. Brett Levy - Jefferies: 8K talks sort of about and I know that your pension cash payment and [other] (ph) cash payment outlook is different than theirs, or profile is different than theirs, but I mean the interest rates in actuarial tables, it seems like in some of the out years it's been 16, et cetera, there's going to be a big benefit to anyone who's got pension. Can you define what the cash benefit might be to you guys as you look out in December or further into the future years?

I guess, Brett, we don't have any mandatory cash payments on the pension side outside of the specific agreement we have on the [stock hold] (ph) plans. So from that standpoint, our piece that's into our, things that go into the defined contribution plans, that just is going to flow with the business, but without having mandatory contributions in the defined benefit plan, there's quite not much of an impact that we would see out of that. Brett Levy - Jefferies: Not even in '15 or '16 due to actuarial or interest rate or something?

Yes, because we have no default – we have no mandatory contributions now. Brett Levy - Jefferies: And then on the Carnegie Way initiatives, is there a headcount number that's sort of flowing out of this, I mean sort of has headcount been substantially reduced as part of the initial effort? I guess at some point on some metric I know it's sort of not the most pleasant topic, but some jobs are going to be reduced to achieve all of these things, is there a number that I can put to that?

Not necessarily a number on the headcount. As we mentioned before, Brett, we have a pretty significant ERP implementation taking place and as we continue to rollout the process and the efficiencies that come from it, that does generate an improvement on headcount. Carnegie Way focus though is a much, much broader affair, much, much broader in context and it's never been designed to go after people, that's not – people are what are creating the Carnegie Way for us and there is plenty of shift from folks that have been dedicating a lot of their effort on a tactical matter, they are shifting their abilities to become much more analytical and strategic and intense. So it's a very fluid environment over there but the Carnegie Way is a much, much broader, much more powerful approach to unleash value than solely focus on people.

Our next question today comes from the line of Matt Vittorioso with Barclays. Please go ahead, sir. Matt Vittorioso - Barclays Capital: Just wanted to get some more color on the working capital. Obviously a great job in managing that over the first half of this year and it's contributed pretty significantly to your cash balance. Could you give us some sense for how much of that cash contribution you would expect to potentially reverse in the second half? If we look at 2013, you had a fairly large usage at the end of the year. Are we looking to get back to sort of neutral over the course of '13 and '14? Just some color on the back half would be helpful.

I think we mentioned that we do have some inventories back in line throughout the rest of the year because we really drilled down pretty hard in the second quarter to take care of all our customers. Probably $200 million to $300 million would probably may be the inventory build that we're looking at for the balance of the year. Matt Vittorioso - Barclays Capital: Okay. And did you get the cash tax refund in the second quarter or is that still coming in the second half?

Most of all that came in. So I said in our update, we have 700 we identified for payables improvements and tax, we really have 650 of that in hand through the end of the first half of the year. Matt Vittorioso - Barclays Capital: Okay great. And lastly just big picture, clearly your credit profile is looking a lot better here, plenty of liquidity leverage on a net basis has come down, you talked about wanting to wait and earn the right to grow but if opportunities come in obviously you got to look at them. How do you think about your balance sheet just for your bondholders, what should we be thinking about as far as leverage targets, usage of this big cash balance that you've got, how should we think about that going forward?

I think Mario described it, Dave described it pretty well, we're going to look to use that cash on higher return projects, things that really deliver value for us. I wouldn't say we have specific targets but we certainly do recognize that improved earnings and improved cash generation can move [indiscernible] statistics pretty quickly.

Our next question comes from the line of Curt Woodworth with Nomura. Please go ahead. Curtis Woodworth - Nomura Securities International: Mario, you talk about the right to grow and you're on pace for almost $0.5 billion Project Carnegie benefits and over $1.2 billion of free cash just in the first six months of this year. So it seems like you would be pretty close to the tipping point of when you could do something more meaningful on the CapEx side or in the acquisition front. In the past it seems like you talked about the desire for more EAF-based capacity to try to have more levelized production throughout the year and potentially DRI facilities. So I'm just wondering if you could kind of frame the opportunities that you see and even in the context of the SDI acquisition of Columbus for $1.6 billion, with that value you could build your own DRI facility and a sizable EAF. So maybe just help us a little more context on the buy versus build decisions and maybe some of the things you're looking at?

Very early, we really focused hard that one of the big levers that we needed to create was the liquidity and the cash on hand, because this is a very volatile world and opportunities come by when you don't expect. We also coming into this year we knew that we had a debt that was maturing and we're going to have to take care of it, and we were beginning to conceive the fact that EAFs were going to have a role to play as we move out into a more flexible environment into the future that they were going to have to generate cash to be able to cover the investments that we're willing to make. So the EAFs, they were going to become a reality, we'll continue to move forward, I think the flexibility that we'll derive from that is going to be very valuable for us. DRI certainly is an opportunity that we continue to evaluate because DRI is not necessarily just a raw material, an additional raw material input to the system especially with EAFs coming in, it will potentially become a new product for us and we are trying to establish what that truly means because that defines the size of the opportunity for us. And on top of that, it's my view that we have to invest significantly more when it comes to innovation and that's an area where a lot of opportunities will come as we develop the new products and the new solutions going into the future. So we are going to have to have the flexibility to go pursue those. So I think there is plenty in the pipeline that we're looking at. The EAF certainly is something that is closer to materializing than some of the other ones but that's where we're going. Curtis Woodworth - Nomura Securities International: Okay, that's helpful. And then just a question for Dave on the working capital side. Do you feel like there's more to go there as you look into 2015 or do you feel like kind of the initiatives underway is going to get you kind of what your target is by the end of this year? David B. Burritt: This is Dave. Yes, we can do better. We're of course seeing a couple of innings in the Carnegie Way, so there's a lot more opportunity for us to improve. We're focused on Six Sigma disciplines, we're very focused on the value creation, and as we look at all the work streams, whether it'd be manufacturing or supply chain and some basic things that we can put in place that we will improve, we think there's more to be done on cash flow, inventories, across the whole value chain in effect. One step at a time, again there's deliberate purposeful march toward value, and as we learn to adapt to the changing economic environment, we will find opportunities and we will act on them. But again to get back to something Mario said earlier is, it's all about making sure that we create the value. This is not about shipping more tons, this is about becoming more profitable, creating a greater intimacy with the customers to meet their needs, and all that being said, yes, there is more to do in all aspects of our business.

Our next question is from Timna Tanners representing Bank of America. Please go ahead. Timna Tanners - Bank of America Merrill Lynch: My first question is just, if you could give us some more color on what happened in the quarter from when you gave us the guidance to your final result, there was a big swing in your Tubular guidance, it was much better than you expected but also particularly Flat-rolled you had guided to much poorer result than you ended up with, so what happened in the last two months of the quarter that maybe switched that so sharply?

Primarily what happened was a remarkable reaction on the part of our teams as we utilized the approach of lost and found. When we first talked to you last quarter, we were really under a lot of pressure and the teams moved so quick, so collaborative and they were able to counter some of the issues that we're dealing with, with a lot of creativity and good work. So to a degree I think that we could easily say that that was the primary driver that drove the results that you saw and to a degree it surprised us too. It was just remarkable what they did. Timna Tanners - Bank of America Merrill Lynch: Okay. I don't know if that means lower costs, higher prices, better volume, but we can follow-up offline. I wanted to follow up on CapEx, this is a bigger picture question, but in 2007, again different management, the statement was made that $35 a ton was your very minimum that you could do in terms of CapEx. So if we look at just first half run rate, it's about $17 a ton. So how does that work if it's torn by half, is the second half going to recover, how does this reconcile with some Mon Valley and Great Lakes unplanned outages?

We didn't say $35 was the minimum, we said $35 was kind of what you would expect as kind of maybe a normal run rate. So certainly the minimum you can see, we've spent well below that in prior years when we were really focused on protecting our cash, 2009, 2010. So I would say that that $35 was not meant to be a minimum on what it takes to maintain the business. Going forward, we did – one of the [indiscernible] appendix [indiscernible] Q, we're talking about 600 for the year now, we do expect that we'll have things flowing a little bit heavier in the second half certainly than in the first half.

Our next question is from the line of Justine Fisher with Goldman Sachs. Please go ahead. Justine Fisher - Goldman Sachs: I just had one other question on the working capital issue. Specifically on the payables and the receivables line, so obviously it's cleared up the inventory issue for us, but we've read in some industry trade rags that you guys have been stretching some of your payment terms with suppliers and I'm looking at payables and they are up significantly, probably the highest that they've been in a really long time, and receivables are down a bit, not as big a change as the payables, but I was just wondering to one of the points made earlier, if those are sustainable changes and might go up, I mean have the payment terms changed such that you guys can just have the payables stay at a consistently higher level or was there something in the payable line specifically, then also for receivables, that have led those two to be a big benefit in working capital this quarter that might reverse as well?

No, we wouldn't expect it to reverse. Really what happened is we actually got ourselves in line with the rest of kind of the industry standards. The fact is we were paying too fast and collecting too slow. And I think as we get in sync with what the world standards are, that's the changes you saw and we would expect to maintain that. Justine Fisher - Goldman Sachs: Okay, thanks. And then the other question is just on the Canadian province note on the balance sheet. It's not as significant amount, just a little bit over $100 million notional on the balance sheet, and with respect to the 8K that you guys filed last week, the issue was getting some flexibility regarding that note, and my question is given the Company's significant liquidity, why would U.S. Steel not just repay that note if there was any issue surrounding the default definitions et cetera and what may or may not happen in Canada, why would the Company not just repay it as opposed to go out and get consent in order to have flexibility around definitions in that note?

I would say that note matures in the end of '15. Actually I think we're interested in really maintaining a strong cash liquidity position. There is always [fluctuations] (ph) in the business, so I don't think we are anxious to send money off the door before it has to go.

We have a question from Phillip Gibbs with KeyBanc. Please go ahead. Phillip Gibbs - KeyBanc Capital Markets: As far as the second half CapEx, just going off of Timna's question for a little further clarity in the second half, you say it's loaded in the second half but that's still a pretty big chunk, $400 million plus or minus. So where do we think some of the CapEx goes as far as projects or facility downtime or how do we think about that?

It's a whole array of things that are in there. It certainly is going to be larger than what you've seen in the first half and if we're efficient in delivery in every front that we are working on, the numbers that we gave you, I think it was $600 million total, that's probably where we're going to end up at the end of the year. Phillip Gibbs - KeyBanc Capital Markets: Okay. And I just had a follow up on the Tubular mix. Has there been a change in the mix between line pipe and OCTG following the idling of those two facilities or any flavor you could give us in the mix on the seamless side versus the welded products?

There is a transition going on, Phil. Certainly for example one of the facilities are still running, one of them is about to end operations the next couple of days, the other facility is going to operate until the end of August. So there will be a natural transition as they are idle.

Our next question comes from the line of Jorge Beristain with Deutsche Bank. Please go ahead. Jorge Beristain - Deutsche Bank Research: Just really one follow-up on Timna's question earlier, if you could just give us exactly the sort of change that happened in the last two months versus your prior guidance that kind of led to the much stronger than expected results, was it cost driven would you say primarily, price driven, volume driven, if we just could get a sense as to what kind of happened versus the last guidance that you gave a few months ago which was admittedly fairly weak on all the weather issues and now we're seeing this much stronger piece, so just trying to attribute what that was to specifically?

If I was to categorize them in order of importance, there is no question that the heaviest weight contributor was cost improvement. Out of some additional efficiency that they were able to draw from some of the other locations, we were able to have a little bit of a volume benefit to it, and certainly in the end prices held up pretty well. So cost was really the biggest driver. Jorge Beristain - Deutsche Bank Research: Great. And my second question actually was related to price and also just following up on Sal's question, if you could help us kind of square the current environment that you're seeing, imports are up strongly to the U.S., you're still able to be maintaining prices well above world standards, and what are you seeing in terms of the client end demand right now, do you think there's a restocking move happening right now or do you think it's just an actual solid recovery in underlying economic use of steel right now because it seems to be kind of going against what would think would be happening in the market right now given the import parity difference that you're at?

I think that that's a demonstration that there is a resilience in the economic fundamentals that are now beginning to manifest themselves, and in that regard there is a tendency for people to boost their inventories a little bit more to make sure that they're going to be ready for what everybody seems to believe is going to continue throughout the rest of the year.

Our next question is from the line of Charles Bradford with Bradford Research. Your line is open. Charles Bradford - Bradford Research: Kind of question about Double Eagle, you had previously said you were going to close it in the spring but now that AK Steel has bought Dearborn, will that change the situation at all and do you not have the right of first refusal on the acquisition?

Chuck, that's a subject that we have not yet had an opportunity to discuss with our partners. Certainly the discussion is going to take place and then we'll be able to give you a more clear answer on what is going to happen there.

Our next question is from the line of Brian Yu with Citi. Please go ahead. Brian Yu - Citigroup Research: Congrats on a good quarter. My question is on Carnegie and I think this goes back to Luke's question earlier, so if you look at the $290 million target previously and if you realized about half of it, call it $145 million, and your new target is $435 million, that leaves I guess $290 million for the rest of the year. How should we allocate that to the various segments, and more in terms of I guess I'm looking specifically at 3Q where you said that the 2Q outages had about $150 million impact and then should we grow that number to include the Carnegie savings or is that amount incorporated already?

Brian, actually the Carnegie – the improvement in Carnegie savings is not part of that $150 million. That $150 million really is a standalone number. I guess the only thing we would really clarify is that remember these aren't targets, these are real, this is stuff that we have done. So I mean we're not setting targets, we're just telling you what's real and what we've accomplished, but like I said, that is not – any improvement in Carnegie quarter over quarter for each of the segments would not be part of that $150 million in the Flat-rolled. Brian Yu - Citigroup Research: Okay, so we should gross that number up by even more with those savings coming.

Absolutely. Brian Yu - Citigroup Research: Okay. And then second one is, the loss on assets held for sale, can you just remind me what's in there?

We have non-core assets, smaller assets that as we focus on cash, it's just not useful to us, it's not productive, we were going to get rid of it. So there's just small things that fall in that category and as we get the opportunity of monetizing, we will. Brian Yu - Citigroup Research: Where was that sitting before?

What's that? Brian Yu - Citigroup Research: Where were those $19 million I think in losses, where was that before?

I mean that's just a fact that we got rid of some assets we had a higher basis for than we got proceeds for. Brian Yu - Citigroup Research: Okay, got it. Thank you.

Our next question is from the line of Aldo Mazzaferro with Macquarie. Please go ahead. Aldo Mazzaferro - Macquarie Research: I just had a question on your operations in Europe regarding raw materials and energy supply. Is there some risk that we should worry about in terms of the [indiscernible] coming out of Ukraine or the actual gas possibly coming from Ukraine in terms of the fighting going on there?

What I can tell you, Aldo, is that so far we have not been impacted in any meaningful way throughout this whole period, and what you hear about the sanctions and all of that, we don't really have any specificity on what these additional sanctions might mean. Once we better understand it, then we'll be able to assess them. But we've been all along putting backup plans and alternative plans in place in order to mitigate the potential risk that might come from it. Aldo Mazzaferro - Macquarie Research: Do you have an alternative natural gas supply now if you needed it?

That would be probably the weakest link because Europe doesn't have an alternative for it. So to one degree that would be one of the buffers because any curtailment of gas to us would mean curtailment of gas to a much larger broad audience and that would be impacted by it. So it's not that easy for them to just do that.

Our final question today will come from the line of Matt Murphy with UBS. Please go ahead. Matt Murphy - UBS: I guess just reflecting on what we're seeing in a strong demand environment, good pricing, obviously imports have ramped up and can you comment at all on the view you have for necessity for further sort of trade action to try and reduce the big ramp up we've seen in imports?

You have to tie trade actions, Matt, to specifics, you can't just look at imports and consider them because they are of a certain magnitude that you're going to bring a trade case. There is a lot of work that needs to be put in place to get factual around how those trades are occurring, is there really a dumping situation that you can validate, and it takes quite a bit of time to do that. So this is one of the things that when it comes to international trade, that is critical. The big change that potentially will occur in the future is that the definition of harm eventually will have to be adjusted to reflect the realities of how the modern world is playing, especially the ones that don't want to live under the rule of law. So, trade cases are going to be brought about, we're vigilant. Every time that we can validate something which does take time and effort, we're going to be prepared to do it. Matt Murphy - UBS: And how do you feel about the sort of acceptance on Department of Commerce and ITC these days, I mean Nucor made some comments they feel like the government is finally getting it, are you seeing the same thing?

It certainly is a decision in the right direction and you need to look at this as a whole also. All that we asked for, we asked for absolutely no favors, all that we asked is for a level playing field so that all of our people and our capabilities can be rewarded by the efforts they put in, and the other competitors that want to come and play in North America, let they come and play by the proper rules under the law, and we have absolutely nothing against trade but we don't properly, we don't actually respect the fact that people are not respecting the law, that is not the right thing. So we're going to keep vigilant.

Thank you. We appreciate all the questions. Now I'd like to turn it back over to Mario for a couple of final comments.

Thanks, Dan. Before we sign off, I really would like to thank our employees for remaining fully committed to our core value of safety. From a statistical standpoint, last year was one of the safest in our Company's history and so far this year we're doing even better. And as we've noted before, the substantial engagement of our entire workforce is the key to the huge improvement in safety we have accomplished over the last 10 years and we're working to leverage that same type of employee engagement to drive our Carnegie Way transformation. As we all know, transformation can be difficult, stressful, sometimes messy, but ultimately very, very rewarding and we truly appreciate our employees' commitment to working with us and with determination to create a successful future.

Thanks, Mario. I'd like to thank all of you for joining us and for your continued interest in U.S. Steel and we look forward to updating you again in October. Thank you.

Ladies and gentlemen, this conference will be available for replay starting at 11 AM this morning and running through August 13 at midnight. You may access the AT&T Executive playback service at any time by dialing 1-320-365-3844 and entering the access code of 330885. Those numbers again are 320-365-3844 and please enter the access code of 330885. That does conclude our conference for today. We thank you for your participation and using the AT&T Executive TeleConference Service. You may now disconnect.