Dan Lesnak - General Manager, Investor Relations David Burritt - President and Chief Executive Officer Kevin Bradley - Executive Vice President and Chief Financial Officer

Chris Terry - Deutsche Bank Securities, Inc. Matthew Korn - Goldman Sachs & Co. LLC Seth Rosenfeld - Jefferies International Ltd. Michael Gambardella - JPMorgan Securities LLC David Gagliano - BMO Capital Markets Timna Tanners - Bank of America Merrill Lynch Philip Gibbs - KeyBanc Capital Markets, Inc. Paretosh Misra - Berenberg Matthew Fields - Bank of America Merrill Lynch Derek Hernandez - Seaport Global Securities Alexander Hacking - Citigroup Global Markets, Inc. Nick Jarmoszuk - Stifel John Tumazos - John Tumazos Very Independent Research LLC Karl Blunden - Goldman Sachs & Co. LLC Paul Cleary - AIG

Good morning, everyone, and welcome to United States Steel Corporation's Third Quarter 2018 Earnings Conference Call and Webcast. As a reminder, today's call is being recorded. Now, on the call this morning will be U. S. Steel President and CEO, Dave Burritt; Executive Vice President and CFO, Kevin Bradley; and Dan Lesnak, General Manager of Investor Relations. Now, after close of business yesterday, the company posted its earnings release, earnings presentation under the Investors section of its website. Today's conference call contains forward-looking statements, and future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced at the end of the company's earnings release and the earnings presentation and included in U. S. Steel's most recent annual report on Form 10-K and updated in their quarterly reports on Form 10-Q in accordance with the Safe Harbor provisions. I would now like to turn the conference call over to your host, U. S. Steel President and CEO, Dave Burritt.

Good morning, everyone and thank you for joining us. Before we begin I know you are all aware of the tragic event that occurred at the Tree of Life Synagogue on Saturday. On the behalf of US Steel, I like to extend our condolences to all. We stand united with the Tree of Life Synagogue, our friends and neighbors in this world health community, the people of Pittsburg and all of those impacted by this senseless act of violence and hate. Thank you for allowing us to express our feelings and thank you for your interest in US Steel. Now for the six takeaways we want to leave you with today. First, the third quarter met our expectations and we adjusted annual guidance to $1.8 billion of EBITDA due to a longer than expected buyer strike and faster than anticipated drop in selling prices over the last two months. We view this as just a timing difference as steel demand has remained strong and we are now seeing higher daily order rates, longer lead time and improved pricing. Second, we issued a press release last night announcing the authorization to buy back $300 million of stock and our plan to redeem our 2020 bonds. Third, on asset revitalization our $2 billion investment plan continues and everything is on track. Fourth, related to labor. We have a tentative agreement with our represented employees that could be approved by mid-November so we will hold off on detail comments until ratification is complete. Again we're going to hold off on detailed comments until ratification is complete. Fifth on trade. We remain optimistic that the fair trade actions that President Trump has put in place will continue. Sixth, while we're not ready to provide details on next year, we believe we are in a good position to deliver another strong year in 2019. I'll now turn the call over to Kevin to provide an overview of our financials. Kevin?

Thanks Dave and good morning everyone. Third quarter adjusted EBITDA was $526 million in line with our expectations. Revenues for the quarter of $3.7 billion represented a 15%growth over Q3 of 2017. Adjusted EPS of $1.79 was $0.87 higher than the prior year quarter. Adjustments in the period were $30 million with the vast majority related to the Granite City startup costs. North American flat roll generated 14.7% EBITDA margins in Q3, a 200 basis point expansion over Q2. Europe generated EBITDA margins of 12.3% in the quarter. This segment has generated EBITDA margins over 12% in nine of the past ten quarters. Our European business continues to perform well and is a major contributor to the progress we are making across the enterprise. Our Tubular segments returned to profitability delivering $18 million of EBITDA in the quarter as we began to see the impact of pricing actions initiated earlier in the year. Now turning to the guidance. We expect adjusted EBITDA for the fourth quarter to be approximately $575 million which would result in full-year adjusted EBITDA of approximately $1.8 billion. We continue to see consistent and strong end-user consumption in our North American flat-rolled markets. We did see a pause in order rates and a decline in index pricing beginning in Q3, impacts of this dynamic are being realized in Q4. $575 million would represent margins of approximately 15% in the quarter roughly 500 basis points above Q4 of 2017. Let me go through some highlights of our balance sheet and capital allocation strategy. In September, we up sized and extended our European revolver. This enhancement provides additional liquidity and flexibility in our capital structure and has allowed us to take additional actions to optimize our debt maturity profile. In October, we drew on this facility and repatriated approximately $220 million of low-cost capital to the United States. As announced last night, we will be using these proceeds along with approximately $140 million in cash on hand to redeem the remainder of our 2020 senior notes. This is our highest coupon debt and excluding the revolver drawing is the only significant maturity between now and 2025. We will continue to be vigilant on our capital structure but this redemption completes the major body of work on the balance sheet that we began last summer. Upon the completion of this redemption we will have made the following improvements since Q2 of 2017. Debt reductions of $554 million, extended average maturities of over nine years, reduced annualized interest expense of $73 million. With that work behind us, we are pleased to announce the share repurchase authorization of $300 million over the next two years. This authorization is a reflection of the strength of our balance sheet, the strong fundamentals in the steel industry and the structural improvements we have made to our company. We are pleased to be taking this first step and expect direct capital returns to our stockholders to be a core component of our capital allocation strategy going forward. We are committed to creating long-term stockholder value you as we execute our disciplined and balanced capital allocation strategy. With that I'll turn it back Dave.

Thank you, Kevin. Before we move to Q&A here is a quick recap, we have worked hard to strengthen our balance sheet and credit profile to create a solid foundation to support our business. We are making progress on our strategy to create value by one focusing on our most attractive by investing in our customers with a focus on creating differentiated solutions that will help our customers succeed. Two, moving down the cost curve through the investments we are making in our facilities to increase productivity. Three, moving up the talent curve by providing our employees with the training and resources they need to succeed, effectively executing our strategy will secure our long-term position as an industry leader. We are making progress and see many opportunities for our future. As we create value, we must make sure the value we create translates into rewards for our stockholders. We believe we are now making progress in this very important area. Dan, let's move to Q&A.

Thanks, Dave. Bratt, can you please queue line for questions.

[Operator Instructions] And we'll go to the line of Chris Terry with Deutsche Bank. Please go ahead.

And our next question will come from Matthew Korn with Goldman Sachs. Please go ahead.

And we'll move to the line of Seth Rosenfeld with Jefferies. Please go ahead.

And we'll go to the line of Michael Gambardella with JPMorgan. Please go ahead.

And we'll go to line of David Gagliano with BMO Capital Markets. Please go ahead.

And we'll go to line of Timna Tanners with Bank of America. Please go ahead.

And we'll go to the next question come from Phil Gibbs of KeyBanc. Please go ahead.

And we'll little line of Paretosh Misra with Berenberg. Please go ahead.

And we go to line of Matthew Fields with Bank of America Merrill Lynch. Please go ahead.

Our next question will come from the line of Derek Hernandez with Seaport Global Securities. Please go ahead.

And our next question will come from line of up Alex Hacking with Citi. Please go ahead.

And our next question will come from Nick Jarmoszuk with Stifel. Please go ahead.

And our next question will come from John Tumazos from John Tumazos Very Independent Research.

And we'll go to line up Karl Blunden with Goldman Sachs. Please go ahead.

And our last question in queue will come from a follow-up from Phil Gibbs with KeyBanc. Please go ahead.

And we do have a question comes from the line of Paul Cleary with AIG. Please go ahead.

And that does conclude the questions for today.

Dave, some final remarks for us?

Yes. I'd like to end today with some comments about our safety performance. Safety is and always has been our top priority. US Steel has a long and proud safety legacy including being a founding member of the National Safety Council in 1913. We continue this legacy today as well as our partnership with National Safety Council sharing our mission of eliminating preventable deaths. Last week, I was honored to join the National Safety Council Board of Directors. Additionally, our company was accepted into the Campbell Institute, the National Safety Council Center of Excellence. These partnerships complement our regular benchmarking efforts to continuously improve our safety process, as we drive to reduce injuries we create value for our employees and customers. I'm proud to say that since the beginning of the year, we have reduced our days away from work injury frequency by over 17%. For context we are 80% better than Bureau of Labor Statistics for iron and steel and 46% better than the American Iron and Steel Institute when it comes to days away from work injury frequency. Safety remains our most important core value, and I'd like to personally thank each of our employees for their hard work and dedication and driving continuous improvement in our safety performance. We believe our intense focus on our operations and improving safety, quality, delivery and cost will result in more reliable and consistent results and create value for all of our stakeholders. Our stockholders, our customers, our employees and the communities where we operate. Thank you. It's time to get back to work.

Thank you. Ladies and gentlemen, the conference will be made available for replay after 10:30 this morning and running through November 16th, 2019 at midnight. You may access AT&T executive playback service at any time by dialing 1800-475-6701and entering the access code 455200. International parties may dial 1320-365-3844. Those numbers again, 1800-475-6701 or 1320-365-3844 with the access code 455200. That does conclude our conference for today. Thanks for participation and for using AT&T teleconference. You may now disconnect.