Stock Report | April 16, 2011 | NYS Symbol: X | X is in the S&P 500

United States Steel Corp

S&P Recommendation HOLD
★★★★★ Price
$50.52 (as of Apr 15, 2011)
12-Mo. Target Price
$53.00
Investment Style
Large-Cap Value
GICS Sector Materials Summary This company manufactures and sells a wide variety of steel sheet, plate, tubular
Sub-Industry Steel and tin products, coke, and taconite pellets.

Key Stock Statistics (Source S&P, Vickers, company reports)

52-Wk Range $64.03– 36.93 S&P Oper. EPS 2011E 4.29 Market Capitalization(B) $7.263 Beta 2.43
Trailing 12-Month EPS $-3.36 S&P Oper. EPS 2012E 5.07 Yield (%) 0.40 S&P 3-Yr. Proj. EPS CAGR(%) NM
Trailing 12-Month P/E NM P/E on S&P Oper. EPS 2011E 11.8 Dividend Rate/Share $0.20 S&P Credit Rating BB
$10K Invested 5 Yrs Ago $8,415 Common Shares Outstg. (M) 143.8 Institutional Ownership (%) 89

Price Performance Qualitative Risk Assessment

30-Week Mov. Avg. 10-Week Mov. Avg. GAAP Earnings vs. Previous Year Volume Above Avg. STARS
LOW MEDIUM HIGH
12-Mo. Target Price Relative Strength Up Down No Change Below Avg.
Our risk assessment reflects the company's
200 exposure to highly cyclical industries such as
autos and construction along with what we view
80 as its high ratio of liabilities to assets and its
unfunded pension and health care liabilities of
40
$4.9 billion at the end of 2010.
20
Quantitative Evaluations
Vol.
Mil. S&P Quality Ranking B-
90
60
D C B- B B+ A- A A+
30
0
5
Relative Strength Rank WEAK
5 4 15
3 3
2 2 2
LOWEST = 1 HIGHEST = 99
1
N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

2008 2009 2010 2011 Revenue/Earnings Data

Options: ASE, CBOE
Revenue (Million $)
Analysis prepared by Leo J. Larkin on April 13, 2011, when the stock traded at $ 50.62.
1Q 2Q 3Q 4Q Year
Highlights Investment Rationale/Risk 2010 3,896 4,681 4,497 4,300 17,374
2009 2,750 2,127 2,817 3,354 11,048
➤ Following a revenue advance of 57% in 2010, ➤ Long-term, we see X's EPS generally rising on a 2008 5,196 6,744 7,312 4,502 23,754
we look for an 11% gain in 2011, on another in- gradual decline in pension and health care 2007 3,756 4,228 4,354 4,535 16,873
crease in tons shipped and steel prices. Our costs, well-controlled raw material costs in do- 2006 3,728 4,107 4,106 3,774 15,715
forecast rests on several assumptions. First, mestic operations, consolidation of the global 2005 3,787 3,582 3,200 3,470 14,039
S&P forecasts real GDP growth of 2.9% in 2011, steel industry, and a secular increase in de-
versus real GDP growth of 2.9% in 2010. We see mand for oil country tubular goods used for en- Earnings Per Share ($)
further gains in GDP leading to rising demand ergy. In particular, we believe the concentra- 2010 -1.10 -0.17 -0.35 -1.74 -3.36
for durable goods. Second, we think demand tion of steel output in the hands of fewer com- 2009 -3.78 -2.92 -2.11 -1.86 -10.42
for oil country tubular goods will rise again in panies will result in greater pricing and produc- 2008 1.98 5.65 7.79 2.50 17.96
2011 as drilling activity picks up. Third, we see tion discipline. In turn, we think this will lead to 2007 2.30 2.54 2.27 0.30 7.40
distributors adding more to inventory in 2011 af- less volatile swings in pricing and profits over 2006 2.04 3.22 3.42 2.50 11.18
ter just modest increases in 2010. Fourth, we the course of the business cycle. But, with the 2005 3.51 1.91 0.71 0.85 7.00
expect demand for durable goods in Europe to shares recently trading with just modest upside Fiscal year ended Dec. 31. Next earnings report expected: Late
April. EPS Estimates based on S&P Operating Earnings; historical
increase again in 2011. to our target price, we would hold, but not add GAAP earnings are as reported.
to positions.
➤ Aided by another increase in volume and rev-
Dividend Data (Dates: mm/dd Payment Date: mm/dd/yy)
enue per ton, along with less rapidly rising raw ➤ Risks to our recommendation and target price
material costs, we look for X to return to oper- include a decline in steel prices and shipments Amount Date Ex-Div. Stk. of Payment
ating profitability. After interest expense and in 2011 instead of the increase we project. ($) Decl. Date Record Date
taxes, we project EPS of $4.29 for 2011, versus a 0.050 04/27 05/10 05/12 06/10/10
per-share loss of $3.36 in 2010. ➤ Our 12-month target price of $53 is based on 0.050 07/27 08/09 08/11 09/10/10
our view that the shares should trade at a multi- 0.050 10/26 11/08 11/10 12/10/10
➤ We think earnings over the long term will in- ple of 12.3X our 2011 EPS estimate. On this pro- 0.050 01/25 02/07 02/09 03/10/11
Dividends have been paid since 1991. Source: Company reports.
crease on industry consolidation, rising de- jected multiple, X's valuation would be just
mand for oil country tubular goods, and a grad- above the mid-point of its historical range of the
ual decline in costs for employee pensions and past 10 years and would be a discount to the
health care. peer average P/E.

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Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

Business Summary April 13, 2011 Corporate Information

CORPORATE OVERVIEW. Following its acquisition of Stelco Inc. and Lone Star Technologies in 2007, U.S. Investor Contact
Steel is the fifth largest steel producer in the world, the largest integrated steel producer headquartered in N. Harper (412-433-1184)
North America, and one of the largest integrated flat-rolled producers in Central Europe. In 2010, X pro-
duced 18.4 million tons of steel in North America and 6.1 million tons of steel in Europe. By way of compari-
Office
son, X produced 11.7 million tons of steel in North America and 5.1 million tons of steel in Europe in 2009.
600 Grant Street, Pittsburgh, PA 15219-2702.
The company's other business activities include the production of coke in North America and Central Eu-
rope; and the production of iron ore pellets from taconite, transportation services (railroad and barge oper- Telephone
ations), real estate operations, and engineering and consulting services in North America. 412-433-1121.

CORPORATE STRATEGY. The company seeks to boost its revenues and earnings by expanding its value- Email
added product mix, becoming a prime supplier of steel to growing European markets, strengthening its bal- shareholderservices@uss.com
ance sheet, and becoming more cost competitive.
Website
MARKET PROFILE. The primary factor affecting demand for steel products is economic growth in general, http://www.ussteel.com
and growth in demand for durable goods in particular. The two largest end markets for steel products in
the U.S. are autos and construction, which together accounted for 32% of shipments in 2010. Other end
markets include appliances, containers, machinery, and oil and gas. Distributors, also known as service Officers
centers, accounted for 26% of industry shipments in the U.S. in 2010. Distributors are the largest single
market for the steel industry in the U.S. Because distributors sell to a wide variety of OEMs, it is very diffi- Chrmn & CEO SVP & General
J.P. Surma, Jr. Counsel
cult to trace the final destination of much of the industry's shipments. Consequently, consumption of steel
J.D. Garraux
by the auto, construction, and other industries may be higher than the shipment data would suggest. U.S.
COO & SVP
production was 88.7 million tons in 2010. X's largest end markets in 2010 were distributors (19.4% of tons
G.F. Babcoke Chief Admin Officer
shipped), appliances (4.6%), converters (30.3%), construction (11.8%), automotive (12.4%), containers
D.H. Lohr
(8.9%), oil and gas (6.5%), and other (6.1%). U.S. consumption decreased at a compound annual rate of
EVP & CFO
2.8% from 2001 through 2010. Global steel production totaled 1.41 billion metric tons in 2010, versus 1.23 bil-
G.R. Haggerty
lion metric tons in 2009.

COMPETITIVE LANDSCAPE. In the U.S., X's main competitors are AK Steel Holding, Arcelor Mittal Steel
and Nucor Corp. In its domestic operations, X enjoys a raw material cost advantage over its rivals but has Board Members
higher total labor costs than Nucor. Prior to a severe industry downturn in 1998, the U.S. market was very D. O. Dinges
fragmented, and severe price cutting at the trough of the cycle was rampant. Since then, the U.S. market J. G. Drosdick
has become far more concentrated as a result of merger activity and bankruptcies, and companies are re- R. A. Gephardt
gaining some pricing power. Due to cost cutting, the U.S. industry is more competitive than ever, and C. R. Lee
should be able to hold market share against imports. With transportation and raw material costs increas- F. J. Lucchino
ing globally, we do not believe foreign producers will be able to undercut the U.S. companies on price to G. G. McNeal
the extent seen in past cycles. Globally, steel is fragmented as compared with other base metals indus- S. E. Schofield
tries. Whereas the three largest aluminum companies accounted for some 48% of global output in 2009, G. Spanier
the world's 10 largest steel companies accounted for about 23% of global output. However, rising costs J. P. Surma, Jr.
are forcing consolidation, and we believe that as the global industry becomes more concentrated, it will D. S. Sutherland
regain some pricing power. X's main competitors in Europe are Arcelor Mittal, Riva, Tata Steel Ltd., and P. A. Tracey
ThyssenKrupp.

FINANCIAL TRENDS. From 2001 through 2010, revenues increased at a compound annual growth rate Domicile
(CAGR) of 12%, while the dividend declined at a compound annual rate of 11%. From 1999 through 2008, Delaware
EPS rose at a CAGR of 50%; the company incurred losses in 2009 and 2010. From 2001 through 2008, free
cash flow before dividends and acquisitions advanced at a CAGR of 10%. Free cash flow was negative in Founded
1999, 2000, 2009 and 2010. From 2001 through 2010, capital spending averaged 121.8% of depreciation and 2001
amortization. Most of X's sales growth since 2002 had been the result of acquisitions in North America and
Europe. We look for free cash flow to turn positive in 2011, mostly reflecting a return to profitability. Employees
42,000
On January 25, 2011, X reported a loss of $1.74 per share for 2010's fourth quarter on a 28% sales gain, ver-
sus a loss per share of $1.86 in the year-earlier quarter. In its release, the company said that it expected to Stockholders
report a modest improvement in reportable segment results for 2011's first quarter in comparison to 2010's 20,322
fourth quarter. The company noted that order rates for most customer groups and publicly reported spot
market prices had begun to increase late in 2010's fourth quarter and that it remained remain cautiously
optimistic that global economic conditions will continue to improve in 2011's first quarter. Flat-rolled re-
sults for 2011's first quarter were expected to improve compared to 2010's fourth quarter although the ben-
efits of increased average realized prices, shipments and production volumes were expected to be partial-
ly offset by higher raw materials costs, primarily for scrap and coal. While Tubular operations were ex-
pected to trail 2010's fourth quarter due to a raw material cost squeeze, X anticipates that the unit will re-
main profitable. Results for USSE were expected to improve in 2011's first quarter compared to 2010's
fourth quarter although increased shipments and production volumes were expected to be partially offset
by higher raw material costs. Raw steel capacity utilization rates for 2011's first quarter were expected to
increase in both North American and Europe from 2010's fourth quarter.

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Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

Quantitative Evaluations Expanded Ratio Analysis

S&P Fair Value NR 1 2 3 4 5 2010 2009 2008 2007

Rank LOWEST HIGHEST Price/Sales 0.48 0.67 0.18 0.85
Based on S&P's proprietary quantitative model, stocks are ranked Price/EBITDA 16.13 NM 1.28 7.96
from most overvalued (1) to most undervalued (5). Price/Pretax Income NM NM 1.46 12.97
P/E Ratio NM NM 2.07 16.34
Fair Value NA Avg. Diluted Shares Outstg (M) 143.6 134.5 117.6 118.8
Calculation Figures based on calendar year-end price

Investability 21 Key Growth Rates and Averages

Quotient LOWEST = 1 HIGHEST = 100
Percentile X scored lower than 79% of all companies for which an S&P Past Growth Rate (%) 1 Year 3 Years 5 Years 9 Years
Report is available.
Sales 57.26 -6.55 1.01 11.13
Net Income NM NM NM NM
Volatility LOW AVERAGE HIGH

Ratio Analysis (Annual Avg.)

Technical BEARISH Since March, 2011, the technical indicators for X have been Net Margin (%) NM NM 1.48 2.01
BEARISH.
Evaluation % LT Debt to Capitalization 46.37 41.38 35.56 36.81
Return on Equity (%) NM NM 10.85 11.15
Insider Activity UNFAVORABLE NEUTRAL FAVORABLE

Company Financials Fiscal Year Ended Dec. 31

Per Share Data ($) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Tangible Book Value 12.64 18.62 25.85 28.81 36.82 25.63 32.30 7.98 15.81 28.16
Cash Flow 1.23 -5.50 23.26 11.66 14.69 11.54 11.17 -0.57 4.24 1.42
Earnings -3.36 -10.42 17.96 7.40 11.18 7.00 8.37 -4.09 0.62 -2.45
S&P Core Earnings -2.29 -9.64 14.34 7.42 11.76 6.64 8.74 -1.06 -4.10 -8.47
Dividends 0.20 0.45 1.10 0.60 0.25 0.28 0.20 0.20 0.20 0.55
Payout Ratio NM NM 6% 8% 2% 4% 2% NM 32% NM
Prices:High 70.95 58.19 196.00 127.26 79.01 63.90 54.06 37.05 22.00 22.00
Prices:Low 36.93 16.66 20.71 68.83 48.05 33.59 25.22 9.61 10.66 13.00
P/E Ratio:High NM NM 11 17 7 9 6 NM 35 NM
P/E Ratio:Low NM NM 1 9 4 5 3 NM 17 NM

Income Statement Analysis (Million $)

Revenue 17,374 11,048 23,754 16,873 15,715 14,039 14,108 9,458 7,054 6,375
Operating Income 520 -1,056 3,406 1,804 2,143 1,740 1,964 316 478 -61.0
Depreciation 658 661 605 506 441 366 382 363 350 344
Interest Expense 274 159 176 163 117 107 138 148 136 153
Pretax Income -385 -1,845 3,007 1,108 1,723 1,312 1,461 -860 13.0 -546
Effective Tax Rate NA 23.8% 28.4% 19.7% 18.8% 27.8% 24.0% NM NM NM
Net Income -482 -1,401 2,112 879 1,374 910 1,077 -406 61.0 -218
S&P Core Earnings -329 -1,296 1,686 882 1,438 847 1,104 -109 -398 -755

Balance Sheet & Other Financial Data (Million $)

Cash 578 1,218 724 401 1,422 1,479 1,037 316 243 147
Current Assets 5,375 5,015 5,732 4,959 5,196 4,831 4,243 3,107 2,440 2,073
Total Assets 15,350 15,422 16,087 15,632 10,586 9,822 10,956 7,838 7,977 8,337
Current Liabilities 3,147 2,474 2,778 3,003 2,702 2,749 2,531 2,130 1,372 1,259
Long Term Debt 3,517 3,345 3,064 3,147 943 1,363 1,363 1,890 1,408 1,434
Common Equity 3,851 4,676 4,895 5,531 4,365 3,108 3,754 867 2,027 2,506
Total Capital 7,585 8,343 8,132 8,736 5,346 4,719 5,959 2,989 3,658 4,672
Capital Expenditures 676 619 896 692 612 741 579 316 258 287
Cash Flow 176 -740 2,735 1,385 1,807 1,258 1,441 -59.0 411 126
Current Ratio 1.7 2.1 2.1 1.7 1.9 1.8 1.7 1.5 1.8 1.6
% Long Term Debt of Capitalization 46.4 40.1 37.7 36.0 17.6 28.9 22.9 63.2 38.5 30.7
% Net Income of Revenue NM NM 8.9 5.2 8.7 6.5 7.8 NM 0.9 NM
% Return on Assets NM NM 13.3 6.7 13.5 8.7 11.5 NM 0.7 NM
% Return on Equity NM NM 40.5 17.8 36.6 25.6 45.8 NM 2.7 NM

Data as orig reptd.; bef. results of disc opers/spec. items. Per share data adj. for stk. divs.; EPS diluted. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.

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Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

Sub-Industry Outlook Stock Performance
We have a positive fundamental outlook for the steel increase in domestic steel supply and rising raw GICS Sector: Materials
industry for the next 12 months. Following a small material costs will limit the upside for spot prices Sub-Industry: Steel
loss in 2010 for the four companies that comprise and profits.
our industry index, we anticipate a return to Based on S&P 1500 Indexes
profitability in 2011, as we believe that a Year to date to March 11, the S&P Steel Index rose Month-end Price Performance as of 03/31/11
combination of rising GDP, a smaller decline in 5.2%, compared to a 3.8% gain for the S&P 1500
nonresidential construction, another rise in auto Composite Index and a 1.1% decline in the S&P
sales and some inventory accumulation by Materials Index. In 2010, the S&P Steel Index rose 250
distributors will lead to an increase in the volume of 13%, versus a 14.2% gain for the 1500 and a 20.6%
steel shipped and the average price per ton. increase in the Materials Index. Longer term, we
Accordingly, we believe the industry will return to think the industry will benefit from greater pricing 200
the black on another rise in sales in 2011. power stemming from further expected
consolidation, a lower cost structure, and a secular
For 2011, we project a 15% increase in steel decline we see in the U.S. dollar.
consumption, versus 2010's gain of 42%. Our 150
forecast rests on four assumptions. First, S&P --Leo Larkin
projects a 3.1% increase in U.S. GDP in 2011,
following GDP growth of 2.8% in 2010. We believe
100
that as a result of another rise in GDP, durable
goods demand will increase. Second, we forecast a
3.0% decline in nonresidential construction, after a
decline of 13.8% in 2010. Third, S&P anticipates an 50
increase in auto sales in 2011 to 13.2 million units,
from 11.5 million units in 2010. Fourth, we believe
that distributors will continue to add to inventory in
2011 following just a minor increase in 2010. Autos, 0
distribution and nonresidential construction are 2007 2008 2009 2010 2011
three of the steel industry's largest markets.
Sub-Industry Sector S&P 1500
In our opinion, another gain in consumption will lead
to a further rise in spot prices in 2011. In addition,
with durable goods demand likely to climb again, we NOTE: All Sector & Sub-Industry information is based on the
Global Industry Classification Standard (GICS)
believe that producers will be able to increase
contract prices further in 2011. Together with higher
spot prices, this should result in another increase in
revenue per ton in 2011 following a cyclical rebound
in 2010. Along with increased shipment volume, we
see this leading to another rise in sales and a return
to profitability in 2011. At the same time, we
anticipate that a rise in imports along with an

Sub-Industry : Steel Peer Group*: Integrated Steelmakers - Domestic

Stk.Mkt. Recent 52 Fair S&P Return on LTD to
Stock Cap. Stock Week Yield P/E Value Quality IQ Revenue Cap
Peer Group Symbol (Mil. $) Price($) High/Low($) Beta (%) Ratio Calc.($) Ranking %ile (%) (%)
U.S. Steel X 7,263 50.52 64.03/36.93 2.43 0.4 NM NA B- 21 NA 46.4
AK Steel Holding AKS 1,692 15.35 21.24/11.34 2.62 1.3 NM NA B- 27 NA 50.3
ArcelorMittal'A' MT 52,774 34.96 44.69/26.28 2.01 1.8 20 45.20 NR 13 7.5 22.6

NA-Not Available NM-Not Meaningful NR-Not Rated. *For Peer Groups with more than 15 companies or stocks, selection of issues is based on market capitalization.

Source: S&P.
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Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

S&P Analyst Research Notes and other Company News
requirements. /L.Larkin
April 12, 2011
02:42 pm ET ... S&P RAISES OPINION ON SHARES OF UNITED STATES STEEL TO January 25, 2011
HOLD FROM SELL (X 50.57***): Our opinion change is based on valuation. We X posts $1.74 Q4 loss vs. $1.86 loss on 28% higher sales The Street was looking for
continue to estimate EPS of $4.29 for '11 and $5.07 for '12 and we retain our $1.12 Q4 loss. For Q1, expects to report a modest improvement in reportable
12-month target price of $53. On our projected P/E on '11's estimate, X would segment results in comparison to Q4.
trade at a discount to the group average of 13.1X. However, following a recent
sharp decline in the stock price, we no longer believe that the shares are
December 20, 2010
overvalued, currently trading at about 11.8X our estimate for '11. With X now
02:55 pm ET ... S&P LOWERS RECOMMENDATION ON SHARES OF UNITED
trading below our 12-month target price, we would hold the stock. /LLarkin
STATES STEEL TO SELL FROM HOLD (X 58.24**): Our opinion change is based on
valuation. We continue to estimate a loss of $2.41 for '10 and EPS of $4.87 for '11,
February 15, 2011 and we are maintaining our 12-month target price of $49. On our projected P/E of
UP 2.15 to 62.50... Goldman reportedly upgrades X to buy from neutral. X 10X '11's estimate, X would trade at a discount to the P/E we apply to peers. We
unavailable. ... are using a discount given the company's higher relative debt levels. Following a
recent sharp advance in the stock price, we think that X is overvalued on a
relative and absolute basis currently selling at nearly 12X our '11 estimate. On
February 15, 2011
that basis, our opinion is sell. /L.Larkin
01:51 pm ET ... UNITED STATES STEEL CORP. (X 62.39) UP 2.04, GOLDMAN
UPGRADES U.S. STEEL (X) TO BUY FROM NEUTRAL... Analyst Sal Tharani tells
salesforce he favors X's leverage to rising steel prices and demand and believes December 14, 2010
it offers a good opportunity. Believes X's vertical integration into iron ore and United States Steel Corp. announced several appointments in its North American
attractive priced coking coal contract for 2011 in the U.S., combined with higher operations unit effective January 1, 2011. Scott H. Coleman has been named
realized prices beyond Q1 should be strong earnings drivers. Raises his general manager of Great Lakes Works, U. S. Steel's integrated steelmaking
2011/2012/2013 EPS estimates to $3.50/$6.00/$6.25 from $2.50/$5.00/$5.50 on the facility in Ecorse and River Rouge, Mich. Anton Jura, who currently serves as
back of lower-than-expected coking coal cost and higher utilization rates in U.S. general manager -- Canadian operations for the company's U. S. Steel Canada
Ups target to $75 from $61. S.Trombino subsidiary, will advance to the role of president and general manager of U. S.
Steel Canada. Coleman and Jura will succeed David J. Rintoul, who was recently
elected vice president -- European operations and president -- U. S. Steel Kosice
January 26, 2011
(USSK) in the Slovak Republic. Also, Thomas Kelly has been appointed to
United States Steel Corp. announced three management appointments in its
succeed Coleman as general manager -- Minnesota Ore Operations. Coleman,
supply chain organization effective immediately. Gerald W. Gagliano has been
Jura and Kelly will report to Senior Vice President-North American Flat-Roll
named general manager -- customer service. Gagliano replaces Elizabeth L.
Operations Michael S. Williams. Coleman, 44, will assume responsibility for all
Swearingin, who has left the company to pursue other opportunities. James V.
steelmaking and finishing activities at Great Lakes Works. Coleman joined U. S.
Bard will succeed Gagliano as general manager -- logistics services. Peter J.
Steel in 1994 as a shift manager in the finishing operations at Fairfield Works in
Alvarado will add Bard's former responsibilities for delivery performance to his
Fairfield, Ala., after spending five years at the former AK Steel facility in Dover,
current duties in the newly created role of general manager -- delivery
Ohio. Coleman was named to his most recent post, general manager -- Minnesota
performance & processed products. All three will report to Vice President --
Ore Operations, in 2007. A native of Pittsburgh, Kelly, 55, will oversee matters at
Supply Chain & Customer Service Anton Lukac. In his new role, Gagliano, 56, will
both Minnesota Ore Operations iron ore mining and pelletizing facilities: Minntac
be responsible for customer service functions, including order entry and
in Mountain Iron, Minn., and Keetac in Keewatin, Minn. Kelly began his career at
non-prime product sales, for U. S. Steel's North American flat-rolled operations.
U. S. Steel in 1978 as a laborer at Gary Works in Gary, Ind. Kelly assumed his most
Gagliano joined U. S. Steel in 1977 as a programmer in the systems &
recent positions, managing director -- transportation for U. S. Steel and president
communications department in Pittsburgh. Bard, 54, will be responsible for
of the company's transportation subsidiary Transtar Inc., in May 2009.
overseeing all outbound rail, barge and truck operations at U. S. Steel facilities in
the United States and Canada. Bard's career with U. S. Steel began in 1981 in the
business planning organization at Gary Works in Gary, Ind. Over the next 22
years, he advanced through increasingly responsible positions in business and
operations planning at Gary Works' flat-rolled and former plate products facilities
as well as at the former Fairless Works in Fairless Hills, Pa. In 2003, Bard was
selected to serve as manager -- business planning on the first U. S. Steel
management team at Great Lakes Works near Detroit, a facility acquired from the
former National Steel Corporation. Alvarado, 54, will add the responsibility of
overseeing delivery performance for the company's North American flat-rolled
products to his existing duties related to the management of U. S. Steel's
centralized sheet products processing operations. Alvarado began his career
with U. S. Steel in 1981 as a metallurgical engineer at the company's Research
and Technology Center near Pittsburgh. In 1985, he transferred into marketing
and sales and during the next 20 years he advanced through a series of
increasingly responsible positions covering a broad range of flat-rolled products,
including nine years in automotive applications. Alvarado was appointed vice
president -- commercial, Europe in 2008 and relocated to Slovakia to oversee all
commercial activities related to U. S. Steel's European operations -- U. S. Steel
Kosice in the Slovak Republic and U. S. Steel Serbia in the Republic of Serbia. He
returned to North America in February 2010 and assumed his most recent
position, director -- processed products, shortly thereafter.

January 25, 2011

05:11 pm ET ... S&P KEEPS SELL OPINION ON SHARES OF UNITED STATES STEEL
(X 57.3**): X posts Q4 loss of $1.74, vs. a loss of $1.86, on a 28% sales gain, wider
than our $0.79 loss estimate, on greater than expected margin erosion. Based on
a more cautious outlook for margins, we reduce our '11 EPS estimate to $4.29
from $4.87. However, despite our revised estimate for '11, we raise our 12-month
target price to $53 from $49 to bring the projected P/E more in line with the P/E
that we apply to peers. We think X is overvalued given our view that cash flow
will be strained by higher capital spending and increased working capital

Source: S&P.
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Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

Analysts' Recommendations Wall Steet Consensus Opinion

Monthly Average Trend Buy Buy/Hold Hold Weak Hold Sell No Opinion X Trend HOLD
B BH H WH S

Wall Street Average Companies Offering Coverage

B
Argus Research Company
BH
Citi
H
Cleveland Research Company
WH
Credit Agricole Securities
S
Credit Suisse - North America
Number of Analysts Following Stock Dahlman Rose & Co.
Deutsche Bank North America
14 Goldman Sachs & Co.
Jpmorgan
13
Keybanc Capital Mkts
12 Longbow Research
Michelle Applebaum Research
Morgan Stanley
Stock Price ($)
Morningstar, Inc.
80

60

40

20
M J J A S O N D J F M A M J J A S O N D J F M A

2009 2010 2011

Of the total 14 companies following X, 13 analysts currently publish recommendations.

No. of Ratings % of Total 1 Mo. Prior 3 Mos. Prior

Buy 1 8 1 1
Buy/Hold 5 38 5 4
Hold 5 38 5 7
Weak Hold 0 0 0 0
Sell 1 8 1 1
No Opinion 1 8 1 1
Total 13 100 13 14
Wall Street Consensus Estimates Wall Street Consensus vs. Performance

For fiscal year 2011, analysts estimate that X will

Estimates 2010 2011 2012 2010 Actual $-3.36 earn $4.06. For fiscal year 2012, analysts estimate
8 that X's earnings per share will grow by 55% to
$6.29.
4

-4 D J F M A M J J A S O N D J F M A

2010 2011

Fiscal Years Avg Est. High Est. Low Est. # of Est. Est. P/E
2012 6.29 10.40 4.12 12 8.0
2011 4.06 6.65 3.07 13 12.4
2012 vs. 2011 55% 56% 34% -8% -35%

Q1'12 1.34 1.75 1.03 3 37.7

Q1'11 -0.38 0.10 -0.61 10 NM
Q1'12 vs. Q1'11 453% 1650% 269% -70% NM

A company's earnings outlook plays a major part in any investment decision. Standard & Poor's organizes the earnings estimates of over 2,300
Wall Street analysts, and provides their consensus of earnings over the next two years. This graph shows the trend in analyst estimates over
the past 15 months.

Source: S&P,I/B/E/S International, Inc.

Redistribution or reproduction is prohibited without written permission. Copyright ©2011 The McGraw-Hill Companies,Inc.
Stock Report | April 16, 2011 | NYS Symbol: X
United States Steel Corp
Glossary
S&P STARS
Since January 1, 1987, Standard & Poor’s Equity
Research Services has ranked a universe of U.S.
common stocks, ADRs (American Depositary Receipts),
and ADSs (American Depositary Shares) based on a
given equity’s potential for future performance. Similarly,
Standard & Poor’s Equity Research Services has used
STARS® methodology to rank Asian and European
equities since June 30, 2002. Under proprietary STARS
(STock Appreciation Ranking System), S&P equity
analysts rank equities according to their individual
forecast of an equity’s future total return potential versus
the expected total return of a relevant benchmark (e.g., a
regional index (S&P Asia 50 Index, S&P Europe 350®
Index or S&P 500® Index)), based on a 12-month time
horizon. STARS was designed to meet the needs of
investors looking to put their investment decisions in
perspective.
S&P Quality Ranking
(also known as S&P Earnings & Dividend Rankings)-
Growth and stability of earnings and dividends are
deemed key elements in establishing S&P’s earnings and
dividend rankings for common stocks, which are
designed to capsulize the nature of this record in a single
symbol. It should be noted, however, that the process
also takes into consideration certain adjustments and
modifications deemed desirable in establishing such
rankings. The final score for each stock is measured
against a scoring matrix determined by analysis of the
scores of a large and representative sample of stocks.
The range of scores in the array of this sample has been
aligned with the following ladder of rankings:
A+ Highest B Below Average
A High B- Lower
A- Above Average C Lowest
B+ Average D In Reorganization
NR Not Ranked
S&P Issuer Credit Rating
A Standard & Poor’s Issuer Credit Rating is a current
opinion of an obligor’s overall financial capacity (its
creditworthiness) to pay its financial obligations. This
opinion focuses on the obligor’s capacity and willingness
to meet its financial commitments as they come due. It
does not apply to any specific financial obligation, as it
does not take into account the nature of and provisions
of the obligation, its standing in bankruptcy or liquidation,
statutory preferences, or the legality and enforceability
of the obligation. In addition, it does not take into
account the creditworthiness of the guarantors, insurers,
or other forms of credit enhancement on the obligation.
S&P Core Earnings
Standard & Poor's Core Earnings is a uniform
methodology for adjusting operating earnings by
focusing on a company's after-tax earnings generated
from its principal businesses. Included in the Standard &
Poor's definition are employee stock option grant
expenses, pension costs, restructuring charges from
ongoing operations, write-downs of depreciable or
amortizable operating assets, purchased research and
development, M&A related expenses and unrealized
gains/losses from hedging activities. Excluded from the
definition are pension gains, impairment of goodwill
charges, gains or losses from asset sales, reversal of
prior-year charges and provision from litigation or
insurance settlements.
S&P 12-Month Target Price
The S&P equity analyst’s projection of the market price a
given security will command 12 months hence, based on
a combination of intrinsic, relative, and private market
valuation metrics.
Redistribution or reproduction is prohibited without written permission. Copyright © 2011 Standard & Poor's Financial Services LLC.
STANDARD & POOR’S, S&P, S&P 500, S&P Europe 350 and STARS are registered trademarks of Standard & Poor’s Financial Services LLC.
S&P Equity Research Services
Standard & Poor’s Equity Research Services U.S.
includes Standard & Poor’s Investment Advisory
Services LLC; Standard & Poor’s Equity Research
Services Europe includes Standard &Poor’s LLC-
London; Standard & Poor’s Equity Research Services
Asia includes Standard & Poor’s LLC’s offices in
Singapore, Standard & Poor’s Investment Advisory
Services (HK) Limited in Hong Kong, Standard & Poor’s
Malaysia Sdn Bhd, and Standard & Poor’s Information
Services (Australia) Pty Ltd.
Abbreviations Used in S&P Equity Research Reports
CAGR- Compound Annual Growth Rate; CAPEX- Capital
Expenditures; CY- Calendar Year; DCF- Discounted Cash
Flow; EBIT- Earnings Before Interest and Taxes; EBITDA-
Earnings Before Interest, Taxes, Depreciation and
Amortization; EPS- Earnings Per Share; EV- Enterprise
Value; FCF- Free Cash Flow; FFO- Funds From Operations;
FY- Fiscal Year; P/E- Price/Earnings ; PEG Ratio-
P/E-to-Growth Ratio; PV- Present Value; R&D- Research
& Development; ROE- Return on Equity; ROI- Return on
Investment; ROIC- Return on Invested Capital; ROA-
Return on Assets; SG&A- Selling, General &
Administrative Expenses; WACC- Weighted Average
Cost of Capital
Dividends on American Depository Receipts (ADRs) and
American Depository Shares (ADSs) are net of taxes
(paid in the country of origin).
Required Disclosures
In contrast to the qualitative STARS recommendations
covered in this report, which are determined and
assigned by S&P equity analysts, S&P’s quantitative
evaluations are derived from S&P’s proprietary Fair
Value quantitative model. In particular, the Fair Value
Ranking methodology is a relative ranking methodology,
whereas the STARS methodology is not. Because the
Fair Value model and the STARS methodology reflect
different criteria, assumptions and analytical methods,
quantitative evaluations may at times differ from (or even
contradict) an equity analyst’s STARS recommendations.
As a quantitative model, Fair Value relies on history and
consensus estimates and does not introduce an element
of subjectivity as can be the case with equity analysts in
assigning STARS recommendations.
S&P Global STARS Distribution
In North America: As of December 31, 2010, research
analysts at Standard & Poor's Equity Research Services
North America recommended 35.0% of issuers with buy
recommendations, 56.4% with hold recommendations
and 8.6% with sell recommendations.
In Europe: As of December 31, 2010, research analysts at
Standard & Poor's Equity Research Services Europe
recommended 33.6% of issuers with buy
recommendations, 45.6% with hold recommendations
and 20.8% with sell recommendations.
In Asia: As of December 31, 2010, research analysts at
Standard & Poor's Equity Research Services Asia
recommended 39.4% of issuers with buy
recommendations, 51.8% with hold recommendations
and 8.8% with sell recommendations.
Globally: As of December 31, 2010, research analysts at
Standard & Poor's Equity Research Services globally
recommended 35.2% of issuers with buy
recommendations, 54.0% with hold recommendations
and 10.8% with sell recommendations.
★★★★★ 5-STARS (Strong Buy): Total return is
expected to outperform the total return of a relevant
benchmark, by a wide margin over the coming 12
months, with shares rising in price on an absolute basis.
★★★★★ 4-STARS (Buy): Total return is expected to
outperform the total return of a relevant benchmark over
the coming 12 months, with shares rising in price on an
absolute basis.
★★★★★ 3-STARS (Hold): Total return is expected to
closely approximate the total return of a relevant
benchmark over the coming 12 months, with shares
generally rising in price on an absolute basis.
★★★★★ 2-STARS (Sell): Total return is expected to
underperform the total return of a relevant benchmark
over the coming 12 months, and the share price not
anticipated to show a gain.
★★★★★1-STARS (Strong Sell): Total return is
expected to underperform the total return of a relevant
benchmark by a wide margin over the coming 12 months,
with shares falling in price on an absolute basis.
Relevant benchmarks: In North America the relevant
benchmark is the S&P 500 Index, in Europe and in Asia,
the relevant benchmarks are generally the S&P Europe
350 Index and the S&P Asia 50 Index.
For All Regions: All of the views expressed in this
research report accurately reflect the research analyst's
personal views regarding any and all of the subject
securities or issuers. No part of analyst compensation
was, is, or will be directly or indirectly, related to the
specific recommendations or views expressed in this
research report.
S&P Global Quantitative Recommendations Distribution
In Europe: As of December 31, 2010, Standard & Poor's
Quantitative Services Europe recommended 45.0% of
issuers with buy recommendations, 22.0% with hold
recommendations and 31.0% with sell recommendations.
In Asia: As of December 31, 2010, Standard & Poor's
Quantitative Services Asia recommended 39.4% of
issuers with buy recommendations, 17.0% with hold
recommendations and 33.0% with sell recommendations.
Globally: As of December 31, 2010, Standard & Poor's
Quantitative Services globally recommended 45.0% of
issuers with buy recommendations, 19.0% with hold
recommendations and 35.0% with sell recommendations.
Additional information is available upon request.
Other Disclosures
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research reports are prepared by Standard & Poor's
Investment Advisory Services LLC ("SPIAS"). In the
United States, research reports are issued by Standard
& Poor's ("S&P"), in the United Kingdom by Standard &
Poor's LLC ("S&P LLC"), which is authorized and
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Kong by Standard & Poor's LLC which is regulated by the
Hong Kong Securities Futures Commission, in Singapore
by Standard & Poor's LLC, which is regulated by the
Monetary Authority of Singapore; in by Standard &
Poor's Malaysia Sdn Bhd ("S&PM") which is regulated by
the Securities Commission; in Australia by Standard &
Poor's Information Services (Australia) Pty Ltd ("SPIS")
which is regulated by the Australian Securities &
Investments Commission; and in Korea by SPIAS, which
is also registered in Korea as a cross-border investment
advisory company.
The research and analytical services performed by
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separately from any other analytical activity of Standard
& Poor's.
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to, or otherwise have a financial interest in, certain
issuers of securities, including exchange-traded
investments whose investment objective is to
substantially replicate the returns of a proprietary
Stock Report | April 16, 2011 | NYS Symbol: X
United States Steel Corp
Standard & Poor's index, such as the S&P 500. In cases
where Standard & Poor's or an affiliate is paid fees that
are tied to the amount of assets that are invested in the
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investment in the fund will generally result in Standard &
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considered to be investment advice.
Indexes are unmanaged, statistical composites and their
returns do not include payment of any sales charges or
fees an investor would pay to purchase the securities
they represent. Such costs would lower performance. It
is not possible to invest directly in an index.
Standard & Poor's and its affiliates provide a wide range
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or services they may recommend, rate, include in model
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the past twelve months.
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With respect to reports issued to clients in Japan and in
the case of inconsistencies between the English and
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Past performance is not necessarily indicative of future
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Ratings from Standard & Poor’s Ratings Services are
statements of opinion as of the date they are expressed
and not statements of fact or recommendations to
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investment decisions. Standard & Poor’s assumes no
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be relied on and are not substitutes for the skill,
judgment and experience of the user, its management,
employees, advisors and/or clients when making
investment and other business decisions. Standard &
Redistribution or reproduction is prohibited without written permission. Copyright © 2011 Standard & Poor's Financial Services LLC.
STANDARD & POOR’S, S&P, S&P 500, S&P Europe 350 and STARS are registered trademarks of Standard & Poor’s Financial Services LLC.
Poor’s rating opinions do not address the suitability of
any security. Standard & Poor’s does not act as a
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Poor’s has established policies and procedures to
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process.
Standard & Poor’s Ratings Services did not participate in
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only current as of the stated date of their issue. Prices,
values, or income from any securities or investments
mentioned in this report may fall against the interests of
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being likely to yield income, please note that the amount
of income that the investor will receive from such an
investment may fluctuate. Where an investment or
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person in receipt of the recommendation, before the
person makes a commitment to purchase the investment
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U.S. STARS Cumulative Model Performance
Hypothetical Growth Due to Price Appreciation of $100
For the Period 12/31/1986 through 03/31/2011
S&P 500 5 STARS 4 STARS 3 STARS 2 STARS 1 STARS
2,400
1,600
800
0
'92 '94 '96 '98 '0 '02 '04 '06 '08 '10
The performance above represents only the results of
Standard & Poor’s model portfolios. Model performance
has inherent limitations. Standard & Poor’s maintains the
models and calculates the model performance shown,
but does not manage actual assets. The U.S. STARS
model performance chart is only an illustration of
Standard & Poor’s (S&P) research; it shows how U.S.
common stocks, ADRs (American Depositary Receipts)
and ADSs (American Depositary Shares), collectively
“equities”, that received particular STARS rankings
performed. STARS categories are models only; they are
not collective investment funds. The STARS performance
does not show how any actual portfolio has performed.
STARS model performance does not represent the
results of actual trading of investor assets. Thus, the
model performance shown does not reflect the impact
that material economic and market factors might have
had on decision-making if actual investor money had
been managed. Performance is calculated using a
time-weighted rate of return. While model performance
for some or all STARS categories performed better than
the S&P 500 for the period shown, the performance
during any shorter period may not have, and there is no
assurance that they will perform better than the S&P 500
in the future. STARS does not take into account any
particular investment objective, financial situation or
need and is not intended as an investment
recommendation or strategy. Investments based on the
STARS methodology may lose money. High returns are
not necessarily the norm and there is no assurance that
Stock Report | April 16, 2011 | NYS Symbol: X

United States Steel Corp

they can be sustained. Past model performance of
STARS is no guarantee of future performance.

For model performance calculation purposes, the

equities within each STARS category at December 31,
1986 were equally weighted. Thereafter, additions to the
composition of the equities in each STARS category are
made at the average value of the STARS category at the
preceding month end with no rebalancing. Deletions are
made at the closing price of the day that the deletion is
made. Performance was calculated from inception
through March 31, 2003 on a monthly basis. Thereafter,
performance is calculated daily. Equities in each STARS
category will change over time, and some or all of the
equities that received STARS rankings during the time
period shown may not have maintained their STARS
ranking during the entire period.

The model performance does not consider taxes and

brokerage commissions, nor does it reflect the deduction
of any advisory or other fees charged by advisors or
other parties that investors will incur when their
accounts are managed in accordance with the models.
The imposition of these fees and charges would cause
actual performance to be lower than the performance
shown. For example, if a model returned 10 percent on a
$100,000 investment for a 12-month period (or $10,000)
and an annual asset-based fee of 1.5 percent were
imposed at the end of the period (or $1,650), the net
return would be 8.35 percent (or $8,350) for the year.
Over 3 years, an annual 1.5% fee taken at year end with
an assumed 10% return per year would result in a
cumulative gross return of 33.1%, a total fee of $5,375
and a cumulative net return of 27.2% (or $27,200). Fees
deducted on a frequency other than annual would result
in a different cumulative net return in the preceding
example.

The Standard & Poor’s 500 index is the benchmark for

U.S. STARS. The S&P 500 index is calculated in U.S.
dollars and does not take into account the reinvestment
of dividends. Indexes are unmanaged, statistical
composites and their returns do not include payment of
any sales charges or fees an investor would pay to
purchase the securities they represent. Such costs
would lower performance. It is not possible to invest
directly in an index. The S&P 500 index includes a
different number of constituents and has different risk
characteristics than the STARS equities. Some of the
STARS equities may have been included in the S&P 500
index for some (but not necessarily all) of the period
covered in the chart, and some such equities may not
have been included at all. The S&P 500 excludes ADRs
and ADSs. The methodology for calculating the return of
the S&P 500 index differs from the methodology of
calculating the return for STARS. Past performance of
the S&P 500 index is no guarantee of future
performance.

An investment based upon the models should only be

made after consulting with a financial advisor and with
an understanding of the risks associated with any
investment in securities, including, but not limited to,
market risk, currency risk, political and credit risks, the
risk of economic recession and the risk that issuers of
securities or general stock market conditions may
worsen, over time. Foreign investing involves certain
risks, including currency fluctuations and controls,
restrictions on foreign investments, less governmental
supervision and regulation, less liquidity and the
potential for market volatility and political instability. As
with any investment, investment returns and principal
value will fluctuate, so that when redeemed, an
investor’s shares may be worth more or less than their
original cost.

Redistribution or reproduction is prohibited without written permission. Copyright © 2011 Standard & Poor's Financial Services LLC.
STANDARD & POOR’S, S&P, S&P 500, S&P Europe 350 and STARS are registered trademarks of Standard & Poor’s Financial Services LLC.