1163302--2/27/2008--UNITED_STATES_STEEL

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Risk Factors Concerning the Steel Industry Steel consumption is cyclical and worldwide overcapacity in the steel industry and the availability of alternative products have resulted in intense competition, which may have an adverse effect on profitability and cash flow. Rapidly growing supply in China and other developing economies, which may increase faster than increases in demand, may result in additional excess worldwide capacity and falling steel prices. Increased imports of steel products into North America and Europe could negatively affect steel prices and demand levels and reduce our profitability. Increases in prices and limited availability of raw materials and energy may constrain operating levels and reduce profit margins. Environmental compliance and remediation could result in substantially increased capital requirements and operating costs. Risk Factors Concerning U. S. Steel Legacy Obligations Many lawsuits have been filed against U. S. Steel involving asbestos-related injuries, which could have a material adverse effect on our financial position, results of operations and cash flow. Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, and our pension plan costs in North America are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow. We have higher environmental remediation costs than our competitors. This creates a competitive disadvantage and negatively affects our profitability and cash flow. Other Risk Factors Applicable to U. S. Steel Unplanned equipment outages and other unforeseen disruptions may reduce our results of operations. We may be unable to recover cost increases as we supply customers with steel under long-term fixed price sales contracts. Customer payment defaults could have an adverse effect on our financial position, results of operations and cash flow. The terms of our indebtedness contain provisions that may limit our flexibility. Rating agencies may downgrade our credit ratings, which would make it more difficult for us to raise capital and would increase our financial costs. Change in control clauses may require us to immediately purchase or repay debt. Our foreign operations expose us to uncertainties and risks, which could negatively affect our results of operations and cash flow. We are subject to significant foreign currency risks, which could negatively impact our profitability and cash flows. Greenhouse gas policies could negatively affect our results of operations and cash flows. Our business requires substantial expenditures for debt service, contingent obligations, capital investment, operating leases and maintenance that we may be unable to fund. U. S. Steel is exposed to uninsured losses. Our collective bargaining agreements may limit our flexibility. There are risks associated with the Lone Star and Stelco acquisitions, as well as any acquisitions we may make in the future. Provisions of Delaware Law, our governing documents and our rights plan may make a takeover of U. S. Steel more difficult. We may suffer employment losses, which could negatively affect our future performance. We may experience difficulties implementing our enterprise resource planning (ERP) system.

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1163302--2/27/2008--UNITED_STATES_STEEL_CORP