1163302--2/28/2006--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 demand and supply in China and other developing economies may result in additional excess worldwide capacity and falling steel prices. Increases in prices and limited availability of raw materials and energy may constrain operating levels and reduce profit margins. Increased imports of steel products into the U.S. could negatively affect domestic steel prices and demand levels and reduce profitability of domestic producers. Environmental compliance and remediation could result in substantially increased capital requirements and operating costs. Unplanned equipment outages and other unforeseen disruptions may reduce our results of operations. 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 operation and cash flow. Our retiree employee health care and retiree life insurance plan costs, most of which are unfunded obligations, are higher than those of many of our competitors. These plans create a competitive disadvantage and negatively affect our profitability and cash flow. Our defined benefit pension plan costs are higher than those 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 The terms of our indebtedness may restrict our ability to pay dividends. The terms of our indebtedness and our accounts receivable program contain restrictive 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. We have deferred tax assets that we may not be able to realize. Our international operations expose us to uncertainties and risks from abroad, which could negatively affect our results of operations. Natural gas supplies to USSB may be curtailed and such curtailments would have a negative effect on our profitability and cash flows. The carbon dioxide emission limits established by the European Commission may limit the amount of steel that can be produced at USSK and negatively affect our results of operations and cash flow. Our business requires substantial debt service, contingent obligations, capital investment, operating lease, capital commitments and maintenance expenditures that we may be unable to fulfill. U. S. Steel is exposed to uninsured losses. Our collective bargaining agreements may limit our flexibility. U. S. Steel is subject to work stoppages as a result of periodic labor negotiations at facilities in Europe. Customer payment defaults could have an adverse effect on our financial condition and results of operations. There are risks associated with acquisitions. Provisions of Delaware Law, our governing documents and our rights plan may make a takeover of U. S. Steel more difficult.

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1163302--2/28/2006--UNITED_STATES_STEEL_CORP