Overview



During the three months ended March 31, 2023, the Company noted favorable trends
in the commercial environment for all reportable segments. For the North
American Flat-Rolled segment, sequential results were lower in the first quarter
due in part to the typical seasonal mining headwinds and lower average selling
prices. Customer demand and selling prices improved as the quarter progressed.
Improved market prices should be more fully reflected in our second quarter
results as extended lead times delayed pricing realization in the first quarter.
The improving commercial environment led to our decision to restart blast
furnace #3 at Mon Valley Works in January and blast furnace #8 at Gary Works in
March. The Mini Mill segment benefited from rising spot prices and normalizing
raw material costs on a sequential basis to the fourth quarter 2022. For the
second quarter, we expect the Mini Mill segment's average selling price to
continue to increase sequentially. The U. S. Steel Europe segment benefited from
higher volume and lower raw material costs on a sequential basis to the fourth
quarter 2022 partially offset by lower average selling prices. As a result of
improving demand in Europe, the Company restarted blast furnace #2 at USSK in
January. For the second quarter, we expect results at USSE to improve due to
increased realization of higher market prices in the segment's average selling
price compared to the first quarter 2023. The Tubular segment results benefited
from continued strong demand and higher pricing on a sequential basis to the
fourth quarter 2022. In the second quarter, we expect lower pricing coming off
elevated fourth quarter 2022 levels and customer inventory rebalancing to impact
segment performance in relation to the first quarter 2023.

The Company continued to advance its Best for All® strategy in the first
quarter. Construction of Big River 2 in Osceola, Arkansas continued during the
quarter. This new mini mill is expected to have about 3 million tons per year of
steelmaking capability and will combine two state-of-the-art EAFs with
differentiated steelmaking and finishing technology, including endless casting
and rolling equipment and a planned advanced high-strength steel (AHSS)
finishing line. This project is on track to be completed in 2024. In addition,
construction of a direct reduced (DR) grade pellet facility at the Company's
Keetac ore operations continues, as well as the construction on a 200 thousand
ton non-grain oriented (NGO) electrical steel line and a 325 thousand ton
galvanize/Galvalume® line, both at Big River Steel. These projects are on-budget
and on track for on-time completion. Capital expenditures for strategic projects
were $582 million during the three months ended March 31, 2023.

Fluctuations in the market price of raw materials and other inflationary impacts
have affected the results of each of our reportable segments, and fluctuations
going-forward are reasonably likely to have a material impact on future results.
We could experience inflation related headwinds for certain raw materials and
other costs.

In February 2022, Russia invaded Ukraine and active conflict continues in the
country. The war in Ukraine will likely continue to cause disruption and
instability in Russia, Ukraine, as well as the markets in which we operate. The
Company is constantly monitoring the situation for impacts and risks to the
business and has implemented risk mitigating strategies where possible. As a
result of the invasion, governments around the world, including the European
Union (EU) and the United States of America (U.S.), have enacted sanctions
against Russia and Russian interests. We are complying with all applicable
sanctions that impact our business.

Since the onset of the war, and before, USSE has been building its inventory of
iron ore and coal and procuring them through alternate sources. With the EU
prohibiting purchases of coal from suppliers in Russia, new purchases of coal
originating from Russia have stopped. The Company has built up sufficient
inventory on site or in-transit to meet current customer demand and alternate
supply chains have been fully implemented.

Additionally, Russian supply of natural gas to Europe has decreased
significantly in response to enacted sanctions. However, Slovakia has natural
gas storage and access to additional supply from countries including Norway, the
U.S. and Africa. Together,
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these sources are enough to support the country's expected consumption through the first half of 2023, which includes demand for natural gas for our USSE segment operations.

RESULTS OF OPERATIONS



U. S. Steel's results in the three months ended March 31, 2023, compared to the
same period in 2022, declined for the North American Flat-Rolled, Mini Mill and
U. S. Steel Europe segments, primarily as a result of lower sales pricing. The
Company's Tubular Products segment outperformed the prior year period due to
higher sales pricing and increased demand.

•North American Flat-Rolled (Flat-Rolled): Flat-Rolled results declined primarily due to lower sales price across many customer and manufacturing industries.

•Mini Mill: Mini Mill results declined primarily due to lower sales price across most consuming industries.

•USSE: USSE results declined primarily due to lower sales volume and price and higher raw material and energy costs.



•Tubular: Tubular results improved primarily due to higher sales price from the
steady high levels of drilling activity, partially offset by continued high
levels of imports.
Net sales by segment for the three months ended March 31, 2023 and 2022 are set
forth in the following table:

                                                   Three Months Ended March 31,
(Dollars in millions, excluding intersegment
sales)                                                2023              2022             % Change
Flat-Rolled                                     $        2,570    $       2,954           (13)%
Mini Mill                                                  553              718           (23)%
USSE                                                       838            1,251           (33)%
Tubular                                                    505              309            63%
   Total sales from reportable segments                  4,466            5,232           (15)%
Other                                                        4                2            100%
Net sales                                       $        4,470    $       5,234           (15)%



Management's analysis of the percentage change in net sales for U. S. Steel's
reportable business segments for the three months ended March 31, 2023 versus
the three months ended March 31, 2022:

                              Steel Products (a)
                        Volume        Price   Mix    FX (b)   Other (c)   Net Change
Flat-Rolled                    15  %  (24) %  (3) %     -  %       (1) %       (13) %
Mini Mill                      29  %  (52) %   -  %     -  %        -  %       (23) %
USSE                          (20) %   (9) %  (1) %    (4) %        1  %       (33) %
Tubular                         2  %   60  %   1  %     -  %        -  %        63  %
(a) Excludes intersegment sales.
(b) Foreign currency translation effects.
(c) Primarily sales of raw materials and coke making by-products.



Net sales for the three months ended March 31, 2023 compared to the same period
in 2022 were $4,470 million and $5,234 million, respectively.
•For the Flat-Rolled segment, the decrease in sales primarily resulted from
lower average realized prices ($356 per ton) across most products, partially
offset by increased shipments (331 thousand tons) across most products.
•For the Mini Mill segment, the decrease in sales primarily resulted from lower
average realized prices ($578 per ton) across all products, partially offset by
increased shipments (152 thousand tons) across all products.
•For the USSE segment, the decrease in sales primarily resulted from lower
average realized prices ($200 per ton) across most products and decreased
shipments (227 thousand tons) across most products.
•For the Tubular segment, the increase in sales primarily resulted from higher
average realized prices ($1,408 per ton) and increased shipments (3 thousand
tons).

Selling, general and administrative expenses


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Selling, general and administrative expenses were $99 million in the three
months ended March 31, 2023 compared to $117 million in the three months ended
March 31, 2022. The change in period over period expenses was primarily driven
by profit and variable based incentive costs.

Restructuring and other charges



During the three months ended March 31, 2023, the Company recognized
restructuring and other charges of $1 million compared to charges of $17 million
recognized during the three months ended March 31, 2022. The charges recognized
in the current and the prior year period pertain to the planned disposition of
certain assets related to a component of the Company's flat-rolled business. See
Note 20 to the Condensed Consolidated Financial Statements for further details.

Operating configuration adjustments



The Company adjusts its operating configuration in response to changes in market
conditions, global overcapacity, unfair trade practices, and changes in customer
demand. These operating configuration adjustments can include indefinitely and
temporarily idling certain of its facilities as well as re-starting production
at certain of its facilities. The Company will continue to adjust its operating
configuration in order to ensure its order book and production footprint are
balanced.

Idled Operations

The following operations were initially idled in 2020 and remained idle as of
March 31, 2023. These facilities and their respective carrying values as of
March 31, 2023 included:
•Blast furnace A at Granite City Works, $55 million
•Lone Star Tubular Operations, $5 million
•Lorain Tubular Operations, $60 million
•Wheeling Machine Products coupling production facility at Hughes Springs,
Texas, immaterial

In 2022, U. S. Steel indefinitely idled the majority of the tin mill operations
at Gary Works. This included the Tin Line #5 and the Tin Line #6. As of
March 31, 2023, the carrying value of the indefinitely idled tin mill operations
assets at Gary Works is $80 million.

In the first quarter of 2023, the Company completed the previously announced permanent shutdown of coke batteries numbers 1 through 3 at the Mon Valley Works.

Earnings (loss) before interest and income taxes by segment is set forth in the following table:


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                                                                      Three months ended March 31,           %
(Dollars in millions)                                                     2023             2022            Change
Flat-Rolled                                                         $           (7)   $        529             (101) %
Mini Mill                                                                       12             278              (96) %
USSE                                                                           (34)            264             (113) %
Tubular                                                                        232              77              201  %
                  Total earnings from reportable segments                      203           1,148              (82) %
Other                                                                            3               7              (57) %
                  Segment earnings before interest and income taxes            206           1,155              (82) %

Items not allocated to segments:


                  Restructuring and other charges                               (1)            (17)
                  Stock-based compensation expense(a)                          (11)            (16)

                  Other charges, net                                            (5)             (4)
Total earnings before interest and income taxes                     $          189    $      1,118              (83) %

(a) The prior year was retroactively adjusted to reflect the reclassification of stock-based compensation expense.

Segment results for Flat-Rolled



                                                        Three months ended March 31,            %
                                                           2023              2022             Change
(Loss) earnings before interest and taxes ($
millions)                                           $           (7)    $          529             (101) %
Gross margin                                                     9   %             23  %           (14) %
Raw steel production (mnt)                                   2,393              2,205                9  %
Capability utilization                                          74   %             68  %             6  %
Steel shipments (mnt)                                        2,278              1,947               17  %
Average realized steel price per ton                $        1,012     $        1,368              (26) %



The decrease in Flat-Rolled results for the three months ended March 31, 2023
compared to the same period in 2022 was primarily due to:
•lower average realized prices, including mix (approximately $755 million)
•lower non-prime sales (approximately $10 million)
•higher raw material costs (approximately $30 million)
•higher energy costs (approximately $40 million)
•unfavorable equity investees income (approximately $40 million),
these changes were partially offset by:
•increased shipments, including volume efficiencies (approximately $225 million)
•lower operating costs (approximately $30 million)
•lower other costs, predominantly variable compensation (approximately $85
million).

Gross margin for the three months ended March 31, 2023 compared to the same period in 2022 decreased primarily as a result of lower average realized prices, partially offset by higher sales volume.


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Segment results for Mini Mill

                                                        Three Months Ended March 31,             %
                                                           2023               2022             Change
Earnings before interest and taxes ($ millions)     $           12                278               (96) %
Gross margin                                                    10   %             46   %           (36) %
Raw steel production (mnt)                                     759                601                26  %
Capability utilization                                          93   %             74   %            19  %
Steel shipments (mnt)                                          659                507                30  %
Average realized steel price per ton                $          794     $        1,372               (42) %



The decrease in Mini Mill results for the three months ended March 31, 2023
compared to the same period in 2022 was primarily due to:
•lower average realized prices, including mix (approximately $430 million)
•lower other and non-prime sales (approximately $10 million)
these changes were partially offset by:
•increased shipments (approximately $110 million)
•lower raw material costs (approximately $40 million)
•lower other costs, primarily variable compensation (approximately $25 million).

Gross margin for the three months ended March 31, 2023 compared to the same period in 2022 decreased primarily as a result of lower average realized sales price, partially offset by higher sales volume.



Segment results for USSE

                                                        Three Months Ended March 31,             %
                                                           2023               2022             Change
(Loss) earnings before interest and taxes ($
millions)                                           $          (34)    $          264              (113) %
Gross margin                                                     -   %             24   %           (24) %
Raw steel production (mnt)                                   1,092              1,088                 -  %
Capability utilization                                          89   %             88   %             1  %
Steel shipments (mnt)                                          883              1,110               (20) %
Average realized steel price per ($/ton)            $          909     $        1,109               (18) %
Average realized steel price per (€/ton)            €          847     €          988               (14) %



The decrease in USSE results for the three months ended March 31, 2023 compared
to the same period in 2022 was primarily due to:
•lower average realized prices, including mix (approximately $115 million)
•decreased shipments (approximately $45 million)
•higher raw material costs (approximately $125 million)
•higher energy costs (approximately $10 million)
•weakening of the Euro versus the U.S. dollar (approximately $25 million),
these changes were partially offset by:
•lower operating costs (approximately $5 million)
•lower other costs (approximately $15 million).

Gross margin for the three months ended March 31, 2023 compared to the same period in 2022 decreased primarily as a result of lower average realized prices and sales volume.



Segment results for Tubular
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                                                        Three Months Ended March 31,            %
                                                           2023              2022             Change

Earnings before interest and taxes ($ millions) $ 232 $ 


       77              201  %
Gross margin                                                    49   %             29  %            20  %
Raw steel production (mnt)                                     171                156               10  %
Capability utilization                                          77   %             70  %             7  %
Steel shipments (mnt)                                          131                128                2  %
Average realized steel price per ton                $        3,757     $        2,349               60  %



The increase in Tubular results for the three months ended March 31, 2023
compared to the same period in 2022 was primarily due to:
•higher average realized prices (approximately $170 million)
•increased shipments (approximately $5 million)
•lower raw material costs (approximately $5 million),
these changes were partially offset by:
•higher operating costs (approximately $5 million)
•higher other costs, primarily variable compensation (approximately $20
million).

Gross margin for the three months ended March 31, 2023 compared to the same period in 2022 increased primarily as a result of higher average realized prices.

Net interest and other financial benefits



                                                      Three Months Ended March 31,             %
(Dollars in millions)                                     2023              2022            Change
Interest expense                                   $            27    $          50                46  %
Interest income                                                (30)              (1)            2,900  %

Other financial costs                                            6                2              (200) %
Net periodic benefit income                                    (42)             (61)              (31) %
Net gain from investments related to active
employee benefits                                              (22)               -                  n/a
Total net interest and other financial benefits    $           (61)   $         (10)              510  %



Net interest and other financial benefits improved in the three months ended
March 31, 2023, as compared to the same period in 2022 primarily due to
increased interest income on cash deposits, lower interest expense as a result
of increased capitalized interest, and gains on the investments in the surplus
VEBA subaccount portfolio, partially offset by reduced net periodic benefit
income due to 2022 plan asset performance, the transfer of $595 million in
surplus VEBA funds, and increased prior service cost.

Income taxes



Income tax expense was $51 million and $246 million for the three months ended
March 31, 2023 and March 31, 2022, respectively. The change from the prior year
period was primarily due to a decrease in earnings before taxes.

Net earnings



Net earnings attributable to United States Steel Corporation were $199 million
in the three months ended March 31, 2023 compared to net earnings of $882
million in the three months ended March 31, 2022. The changes primarily reflect
the factors discussed above.
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LIQUIDITY AND CAPITAL RESOURCES

Net Cash Provided by Operating Activities



Net cash provided by operating activities was $181 million for the three months
ended March 31, 2023 compared to net cash provided by operating activities of
$771 million in the same period in 2022. The period over period decrease in cash
from operations from the prior year period was primarily due to lower net
earnings and changes in income taxes payable and deferred taxes, partially
offset by changes in working capital. Changes in working capital can vary
significantly depending on factors such as the timing of inventory production
and purchases, which is affected by the length of our business cycles as well as
our captive raw materials position, customer payments of accounts receivable and
payments to vendors in the regular course of business.

As shown below our cash conversion cycle for the first quarter of 2023 decreased by 5 days as compared to the fourth quarter of 2022.



Cash Conversion Cycle                                      First Quarter of 2023                Fourth Quarter of 2022
                                                        $ millions            Days            $ millions            Days
Accounts receivable, net (a)                              $1,808               35               $1,634               39

+ Inventories (b)                                         $2,541               56               $2,359               60

- Accounts Payable and Other Accrued Liabilities
(c)                                                       $3,001               67               $2,831               70
= Cash Conversion Cycle (d)                                                    24                                    29


(a) Calculated as Average Accounts Receivable, net divided by total Net Sales
multiplied by the number of days in the period.
(b) Calculated as Average Inventory divided by total Cost of Sales multiplied by
the number of days in the period.
(c) Calculated as Average Accounts Payable and Other Accrued Liabilities less
bank checks outstanding and other current liabilities divided by total Cost of
Sales multiplied by the number of days in the period.
(d) Calculated as Accounts Receivable Days plus Inventory Days less Accounts
Payable Days.

The cash conversion cycle is a non-generally accepted accounting principles
(non-GAAP) financial measure. We believe the cash conversion cycle is a useful
measure in providing investors with information regarding our cash management
performance and is a widely accepted measure of working capital management
efficiency. The cash conversion cycle should not be considered in isolation or
as an alternative to other GAAP metrics as an indicator of performance.

The last-in, first-out (LIFO) inventory method is the predominant method of inventory costing for our Flat-Rolled and Tubular segments. Based on the Company's latest internal forecasts and its inventory requirements, management does not believe there will be significant permanent LIFO liquidations that would impact earnings for the remainder of 2023.

Net Cash Used in Investing Activities



Net cash used in investing activities was $738 million for the three months
ended March 31, 2023 compared to net cash used in investing activities of $352
million in the same period in 2022. The increase in net cash used in investing
activities was primarily due to increased capital expenditures (discussed in
more detail below).

Capital expenditures for the three months ended March 31, 2023, were $740
million, compared with $349 million in the same period in 2022. Mini Mill
capital expenditures were $563 million and included $419 million for BR2,
exclusive of the air separation unit, as well as spending for the CGL and the
NGO being built at the existing Big River Steel facility. Flat-Rolled capital
expenditures were $139 million which includes spending for the construction of a
DR grade pellet facility at Keetac as well as mining equipment and other
infrastructure, environmental, Gary pig iron facility and other strategic
projects across the Flat-Rolled footprint. USSE capital expenditures were $26
million and included spending for the blast furnace, enterprise resource
planning (ERP) project, 5-stand control system upgrades and various other
projects. Tubular capital expenditures were $12 million and included spending to
support steelmaking, infrastructure, and environmental projects within the
Tubular footprint.

Net Cash Used in Financing Activities



Net cash used in financing activities was $117 million for the three months
ended March 31, 2023 compared to net cash used in financing activities of $71
million in the same period last year. The period over period increase in cash
used in financing activities was primarily due to the absence of proceeds from
government incentives in the current period, partially offset by decreased
repurchases of common stock.

Debt Financing



Certain of our credit facilities, including the Credit Facility Agreement, the
Big River Steel ABL Facility, the USSK Credit Agreement and the Export Credit
Agreement, contain standard terms and conditions including customary material
adverse
                                      -30-
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change clauses. If a material adverse change was to occur, our ability to fund
future operating and capital requirements could be negatively impacted. The €300
million USSK Credit Agreement contains certain USSK specific financial
covenants. There are currently no amounts outstanding under the facility. The
USSK Credit Agreement requires USSK to maintain a net debt to earnings before
interest, taxes, depreciation and amortization (EBITDA) ratio of less than
3.50:1 for the rolling twelve months ending June 30, 2023. The Company has
determined that it may not be able to comply with this covenant at June 30, 2023
based on the currently forecasted EBITDA for the twelve-month period ending June
30, 2023. This could partially or fully limit USSK's ability to borrow under the
USSK Credit Agreement. Any amendment or waiver may lead to additional lender
protections, including a reduction of loan commitments or less favorable terms,
and there can be no assurance that USSK can obtain waivers or amendments in
timely fashion, or on acceptable terms or at all. The Company believes that USSK
will have adequate cash on hand as of June 30, 2023 and will not need to borrow
under the USSK Credit Agreement.

We use surety bonds, trusts and letters of credit to provide financial assurance
for certain transactions and business activities. The use of some forms of
financial assurance and cash collateral have a negative impact on liquidity. U.
S. Steel has committed approximately $182 million of liquidity sources for
financial assurance purposes as of March 31, 2023. Changes in certain of these
commitments which use collateral are reflected within cash, cash equivalents and
restricted cash on the Condensed Consolidated Statement of Cash Flows.

Share Repurchases



On July 25, 2022, following the completion of the previously authorized $800
million share repurchase programs, the Board of Directors authorized a new share
repurchase program that allows for the repurchase of up to $500 million of its
outstanding common stock from time to time in the open market or privately
negotiated transactions at the discretion of management. The Company's share
repurchase program does not obligate it to acquire any specific number of
shares. Common stock repurchased under our share repurchase programs totaled
2.8 million shares for approximately $75 million in the three months ended
March 31, 2023. See Note 22 to the Condensed Consolidated Financial Statements
for further details.

Capital Requirements

U. S. Steel's contractual commitments to acquire property, plant and equipment at March 31, 2023, totaled $2.203 billion.

Liquidity



The following table summarizes U. S. Steel's liquidity as of March 31, 2023:

  (Dollars in millions)
  Cash and cash equivalents                                               $ 2,837
  Amount available under Credit Facility Agreement

1,746


  Amount available under Big River Steel - Revolving Line of Credit           350
  Amount available under USSK Credit Agreement and USSK Credit Facility       342
  Total estimated liquidity                                               $ 5,275



We finished the first quarter of 2023 with $2,837 million of cash and cash
equivalents and $5,275 million of total liquidity. Available cash is left on
deposit with financial institutions or invested in highly liquid securities with
parties we believe to be creditworthy. Substantially all of the liquidity
attributable to our foreign subsidiaries can be accessed without the imposition
of income taxes as a result of a prior election to liquidate for U.S. income tax
purposes a foreign subsidiary that holds most of our international operations.

We expect that our estimated liquidity requirements will consist primarily of
our 2023 planned strategic and sustaining capital expenditures, working capital
requirements, interest expense, and operating costs and employee benefits for
our operations after taking into account the footprint actions and cost
reductions at our plants and headquarters. Our available liquidity at March 31,
2023 consists principally of our cash and cash equivalents and available
borrowings under the Credit Facility Agreement, Big River Steel ABL Facility,
USSK Credit Agreement and the USSK Credit Facility.

Management continues to evaluate market conditions in our industry and our
global liquidity position and may consider additional actions to further
strengthen our balance sheet and optimize liquidity, including but not limited
to the repayment or refinancing of outstanding debt and the incurrence of
additional debt to opportunistically finance strategic projects. The Company may
also return excess liquidity to shareholders through share repurchases and
dividends from time to time if deemed appropriate by management.

U. S. Steel management believes that our liquidity will be adequate to fund our
requirements based on our current assumptions with respect to our results of
operations and financial condition.

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The Company has a supply chain finance (SCF) arrangement with a third-party
administrator which allows participating suppliers, at their sole discretion, to
make offers to sell payment obligations of the Company prior to their scheduled
due dates at a discounted price to a participating financial institution. The
third-party administrator entered into a separate agreement with the Export
Import Bank of the United States to guarantee 90 percent of supplier obligations
sold for up to $200 million. No guarantees or collateral are provided by the
Company or any of its subsidiaries under the SCF program.

The Company's goal is to capture overall supplier savings and improve working
capital efficiency. The agreements facilitate the suppliers' ability to sell
payment obligations, while providing them with greater working capital
flexibility. The Company has no economic interest in the sale of the suppliers'
receivables and no direct financial relationship with the financial institution
concerning these services. The Company's obligations to its suppliers, including
amounts due and scheduled payment dates, are not impacted by suppliers'
decisions to sell amounts under the arrangements. The SCF program requires the
Company to pay the third-party administrator the stated amount of the confirmed
participating supplier invoices. The payment terms for confirmed invoices range
from 75 to 90 days after the end of the month in which the invoice was issued.

The underlying costs from suppliers that elected to participate in the SCF
program are generally recorded in cost of sales in the Company's Condensed
Consolidated Statement of Operations. Amounts due to suppliers who participate
in the SCF program are reflected in accounts payable and accrued expenses on the
Company's Condensed Consolidated Balance Sheet and payments on the obligations
by our suppliers are included in cash used in operating activities in the
Condensed Consolidated Statement of Cash Flows. As of March 31, 2023, accounts
payable and accrued expenses included $107 million of outstanding payment
obligations which suppliers elected to sell to participating financial
institutions.

Environmental Matters, Litigation and Contingencies



Some of U. S. Steel's facilities were in operation before 1900. Although the
Company believes that its environmental practices have either led the industry
or at least been consistent with prevailing industry practices, hazardous
materials have been and may continue to be released at current or former
operating sites or delivered to sites operated by third parties.

Our U.S. facilities are subject to environmental laws applicable in the U.S.,
including the Clean Air Act (the CAA), the Clean Water Act (CWA), the Resource
Conservation and Recovery Act (RCRA) and the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), as well as state and local
laws and regulations.

U. S. Steel has incurred and will continue to incur substantial capital, operating, and maintenance and remediation expenditures as a result of environmental laws and regulations, related to release of hazardous materials, which in recent years have been mainly for process changes to meet the CAA obligations and similar obligations in Europe.

EU Environmental Requirements and Slovak Operations



Phase IV of the EU Emissions Trading System (the EU ETS) commenced on January 1,
2021 and will finish on December 31, 2030. The European Commission issued final
approval of the updated 2021-2025 Slovak National Allocation table in February
2022. The Slovak Ministry of Environment has not yet allocated 2023 emission
credits that it grants at no charge (free allowances) to the USSE account. As of
March 31, 2023, we have pre-purchased approximately 1.35 million European Union
Emission Allowances (EUA) totaling €107 million (approximately $116 million) to
cover the expected 2023 shortfall of emission allowances.

The EU's Industrial Emissions Directive requires implementation of EU determined
best available techniques (BAT) for Iron and Steel production to reduce
environmental impacts as well as compliance with BAT associated emission levels.
Total capital expenditures for projects to comply with or go beyond BAT
requirements were €138 million (approximately $150 million). These costs were
partially offset by the EU funding received and may be mitigated over the next
measurement periods if USSK complies with certain financial covenants, which are
assessed annually. The last assessment of financial covenants will be performed
as of June 30, 2026. USSK complied with these covenants as of March 31, 2023. If
we are unable to meet these covenants in the future, USSK might be required to
provide additional collateral (e.g., bank guarantee) to secure 50 percent of the
EU funding received.

For further discussion of laws applicable in Slovakia and the EU and their impact on USSE, see Note 21 to the Condensed Consolidated Financial Statements, "Contingencies and Commitments - Environmental Matters, EU Environmental Requirements."

New and Emerging Environmental Regulations

United States and European Greenhouse Gas Emissions Regulations



The Phase IV EU ETS period spans 2021-2030 and began on January 1, 2021.The
Phase IV period is divided into two sub periods (2021-2025 and 2026-2030), rules
for the first subperiod are finalized, however we expect that rules for the
second subperiod may be more stringent than those for the first one. Once
approved, the rules may impact subperiod 2026-2030. Currently, the overall EU
ETS target is a 40 percent reduction of 1990 emissions by 2030. Free allocation
of CO2 allowances is based on reduced benchmark values which have been published
in the first quarter of 2021 and historical levels of production from 2014-2018.
Allocations to individual installations may be adjusted annually to reflect
relevant increases and decreases in
                                      -32-
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production. The threshold for adjustments is set at 15 percent and will be
assessed on the basis of a rolling average of two precedent years. Production
data verified by an external auditor shows that USSE's rolling average for
2020-2021 returned to the base limit for hot metal production resulting in an
increase to the free allocation for 2022 compared to 2021, however the 2022 free
allocation was still slightly reduced due to missing the 15 percent threshold
for sinter production. Additionally, lower production in 2019 through 2021 will
have an impact on the future free allocation for 2026-2030, where the historical
production average for years 2019-2023 will be assessed. Based on actual
production data for 2022, we expect that the free allocation for hot metal will
remain unchanged for 2023, however allocations for sinter will be lower.

In order to achieve the EU political goal of carbon emissions neutrality by
2050, on July 14, 2021, the European Commission released a package of
legislative proposals called Fit for 55. The proposals contain significant
changes to current EU ETS functions and requirements, including: a new carbon
border adjustment mechanism to impose carbon fees on EU imports, further
reduction of free CO2 allowance allocation to heavy industry and measures to
strengthen the supply of carbon allowances. The legislative process is being
impacted by the ongoing Russia-Ukraine crisis. The proposals are subject to the
EU legislative process, and we cannot predict their future impact.

United States - Air



The CAA imposes stringent limits on air emissions with a federally mandated
operating permit program and civil and criminal enforcement sanctions. The CAA
requires, among other things, the regulation of hazardous air pollutants through
the development and promulgation of National Emission Standards for Hazardous
Air Pollutants (NESHAP) and Maximum Achievable Control Technology (MACT)
Standards. The U.S. EPA has developed various industry-specific MACT standards
pursuant to this requirement. The CAA requires the U.S. EPA to promulgate
regulations establishing emission standards for each category of Hazardous Air
Pollutants. The U.S. EPA also must conduct risk assessments on each source
category that is already subject to MACT standards and determine if additional
standards are needed to reduce residual risks.

While our operations are subject to several different categories of NESHAP and
MACT standards, the principal impact of these standards on U. S. Steel's
operations includes those that are specific to coke making, iron making, steel
making and iron ore processing.

On July 13, 2020, the U.S. EPA published a Residual Risk and Technology Review
rule for the Integrated Iron and Steel MACT category in the Federal Register.
Based on the results of the U.S. EPA's risk review, the agency determined that
risks due to emissions of air toxics from the Integrated Iron and Steel category
are acceptable and that the current regulations provided an ample margin of
safety to protect public health. Under the technology review, the U.S. EPA
determined that there are no developments in practices, processes or control
technologies that necessitate revision of the standards. In September 2020,
several petitions for review of the rule, including those filed by the Company,
the American Iron and Steel Institute (the AISI), Clean Air Council and others,
were filed with the United States Court of Appeals for the D.C. Circuit. The
cases were consolidated and are being held in abeyance until the U.S. EPA
reviews and responds to administrative petitions for review. The U.S. EPA is
required by court order to issue a final rule by October 26, 2023. Because the
U.S. EPA has yet to propose a revised iron and steel rule, any impacts are not
estimable at this time.

For the Taconite Iron Ore Processing category, based on the results of the U.S.
EPA's risk review, the agency promulgated a final rule on July 28, 2020, in
which the U.S. EPA determined that risks from emissions of air toxics from this
source category are acceptable and that the existing standards provide an ample
margin of safety. Furthermore, under the technology review, the agency
identified no cost-effective developments in controls, practices, or processes
to achieve further emissions reductions. Petitions for review of the rule were
filed in the United States Court of Appeals for the D.C. Circuit, in which the
Company and the AISI intervened. The U.S. EPA is required by court order to
issue a final rule by November 16, 2023. Because the U.S. EPA has yet to propose
a revised taconite rule, any impacts are not estimable at this time.

The U.S. EPA is in the process of conducting its statutorily obligated residual
risk and technology review of coke oven standards. Because the U.S. EPA has not
completed its review of the Coke MACT regulations, any impacts related to the
U.S. EPA's review of the coke standards cannot be estimated at this time. The
U.S. EPA is under a court-ordered deadline to complete the residual risk and
technology rulemaking by May 23, 2024.

In response to Court orders that invalidated prior U.S. EPA determinations
regarding ozone attainment interference, on April 6, 2022, the U.S. EPA proposed
a Federal Implementation Plan (that would replace several pending or disapproved
State Implementation Plans) for Regional Ozone Transport for the 2015 Ozone
National Ambient Air Quality Standard. The proposed rule would affect electric
generating units (EGUs) in 26 states and certain non-EGU industries, including,
among several others, coke ovens, taconite production kilns, boilers, blast
furnaces, basic oxygen furnaces, reheating furnaces, and annealing furnaces in
23 states, including those where U. S. Steel has operations. The impacts of the
rule, if promulgated as proposed, could be material. U. S. Steel submitted
comments on the proposed rule on June 21, 2022. The U.S. EPA announced the final
rule on March 15, 2023. The final rule only included regulation of boilers and
reheat furnaces for the iron and steel industry limiting the potential impacts.
U. S. Steel is still reviewing the changes and will further evaluate the
potential impacts to operations.

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The CAA also requires the U.S. EPA to develop and implement National Ambient Air
Quality Standards (NAAQS) for criteria pollutants, which include, among others,
particulate matter (PM) - consisting of PM10 and PM2.5, lead, carbon monoxide,
nitrogen dioxide, sulfur dioxide (SO2) and ozone.

In October 2015, the U.S. EPA lowered the NAAQS for ozone from 75 parts per
billion (ppb) to 70 ppb. On November 6, 2017, the U.S. EPA designated most areas
in which we operate as attainment with the 2015 standard. In a separate ruling,
on June 4, 2018, the U.S. EPA designated other areas in which we operate as
"marginal nonattainment" with the 2015 ozone standard. On December 6, 2018, the
U.S. EPA published a final rule regarding implementation of the 2015 ozone
standard. Because no state regulatory or permitting actions to bring the ozone
nonattainment areas into attainment have yet to be proposed or developed for U.
S. Steel facilities, the operational and financial impact of the ozone NAAQS
cannot be reasonably estimated at this time. On December 31, 2020, the U.S. EPA
published a final rule pursuant to its statutorily required review of NAAQS that
retains the ozone NAAQS at 70 ppb. In January 2021, New York, along with several
states and non-governmental organizations filed petitions for judicial review of
the action with the United States Court of Appeals for the D.C. Circuit. Several
other states and industry trade groups intervened in support of the U. S. EPA's
action. The case remains in abeyance before the court until December 15, 2023,
as the U.S. EPA voluntarily reconsiders the ozone NAAQS. Because the U.S. EPA
has yet to complete its reconsideration and proposes to revise or retain the
2020 ozone NAAQS, any impacts are not estimable at this time.

On December 18, 2020, the U.S. EPA published a final rule pursuant to its
statutorily required review of NAAQS that retains the existing PM2.5 standards
without revision. In early 2021, several states and non-governmental
organizations filed petitions for judicial review of the action with the United
States Court of Appeals for the D.C. Circuit. Several industry trade groups
intervened in support of the U.S. EPA's action. The case remains in abeyance
before the court until March 1, 2023, as the U.S. EPA voluntarily reconsiders
the PM2.5 NAAQS. On January 6, 2023, the U.S. EPA proposed to lower the annual
PM2.5 NAAQS from the current 12 ug/m3 standard to within the range of 9.0 to
10.0 ug/m3. U. S. Steel is currently reviewing the proposal and comments to
determine the potential impacts. Because the U.S. EPA has proposed the rule
without specificity, any impacts are inestimable at this time.

For calendar year 2022, all Allegheny County ambient air quality monitors met
all U.S. EPA health based National Ambient Air Quality Standards for the second
consecutive year. On March 16, 2022, the U.S. EPA published a final rule, a
clean data determination, showing that Allegheny County has attained the 2012
annual PM2.5 NAAQS based on the 2018 - 2020 ambient air quality data. Based on
these and other data, ACHD submitted a Redesignation Request and Maintenance
Plan to the U.S. EPA requesting that the U.S. EPA redesignate all of Allegheny
County in attainment with the current PM2.5 NAAQS.

United States - Water



The U.S. EPA issued the final rule redefining the Waters of the United States
(WOTUS), and it became effective March 1, 2023. The definition of WOTUS has had
many changes and legal challenges over the last several years and this rule is
no different. Due to certain state challenges and requests for injunctions, the
Rule has been enjoined and is not in effect in Idaho and Texas. The new WOTUS
rule expands the definition of what all waters will be considered to be a waters
of the United States. The expansion of the WOTUS definition is likely to lead to
additional legal challenges. It is also possible that the ruling in the U. S.
Supreme court case Sackett v. EPA would impact the WOTUS definition as it
relates to wetlands. The Sackett case was heard by the Court in the Fall 2022
term and a decision is expected sometime in 2023. U. S. Steel will continue to
review and follow the final WOTUS definition and associated litigation for its
potential impact on the Company.

For further discussion of relevant environmental matters, including environmental remediation obligations, see "Item 1. Legal Proceedings - Environmental Proceedings."

OFF-BALANCE SHEET ARRANGEMENTS

U. S. Steel did not enter into any new material off-balance sheet arrangements during the first quarter of 2023.

INTERNATIONAL TRADE



U. S. Steel continues to face import competition, much of which is unfairly
traded and fueled by massive global steel overcapacity, currently estimated to
be over 620 million metric tons per year-more than six times the entire U.S.
steel market and over twenty times total U.S. steel imports. These imports and
overcapacity negatively impact the Company's operational and financial
performance. U. S. Steel continues to lead efforts to address these challenges
that threaten the Company, our workers, our stockholders and our country's
national and economic security.

As of the date of this filing, pursuant to a series of Presidential
Proclamations issued in accordance with Section 232 of the Trade Expansion Act
of 1962, U.S. imports of certain steel products are subject to a 25 percent
tariff, except imports from: (1) Argentina, Brazil, and South Korea, which are
subject to restrictive quotas; (2) the European Union (EU), Japan and the United
Kingdom (UK) that are melted and poured in the EU/Japan/UK, within quarterly
tariff-rate quota (TRQ) limits; (3) Canada and Mexico, which are not subject to
tariffs or quotas, but tariffs could be re-imposed on surging product groups
after consultations; (4) Ukraine, which are exempt from tariffs until June 1,
2023; and (5) Australia, which are not subject to tariffs, quotas or an
anti-surge mechanism.

                                      -34-
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The U.S. Department of Commerce (DOC) is managing a process in which U.S. companies may request and/or oppose temporary product exclusions from the Section 232 tariffs and quotas. U. S. Steel opposes exclusion requests for imported products that are the same as, or substitutes for, products manufactured by U. S. Steel.



Multiple legal challenges to the Section 232 action continue before the U.S.
Court of International Trade (CIT) and the U.S. Court of Appeals for the Federal
Circuit (CAFC), the latter which has consistently rejected constitutional and
statutory challenges to the Section 232 action.

Since its implementation in March 2018, the Section 232 action has supported the
U.S. steel industry's and U. S. Steel's investments in advanced steel production
capabilities, technology, and skills, strengthening U.S. national and economic
security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) implemented a definitive
safeguard on global steel imports in the form of TRQs that impose 25 percent
tariffs on steel imports that exceed the TRQ limit, effective through June 2024.
In December 2022, the EC initiated a fourth review of the safeguard.

Antidumping duties (AD) and countervailing duties (CVD or antisubsidy duties)
apply in addition to the Section 232 tariffs, quotas, TRQs and the EC's
safeguard, and AD/CVD orders may continue beyond the Section 232 action and the
EC's safeguard. U. S. Steel continues to actively defend and maintain the 61
U.S. AD/CVD orders and 14 EU AD/CVD orders covering U. S. Steel products in
multiple proceedings before the DOC, U.S. International Trade Commission (ITC),
CIT, CAFC, the EC and European courts, and the World Trade Organization (WTO).

In January 2023, Cleveland-Cliffs and the USW filed new AD/CVD petitions on U.S.
imports of tin mill products from eight countries. In March 2023, the ITC voted
to continue the investigations. DOC's preliminary AD/CVD determinations are
expected by August 2023 and the ITC final phase hearing in the fourth quarter of
2023.

In February 2023, President Biden announced additional increases to normal tariffs of up to 70 percent on certain products from Russia, including pig iron, certain steel products and ferroalloys, effective April 1, 2023.



Additional tariffs of 7.5 to 25 percent continue to apply to certain U.S.
imports from China, including certain raw materials used in steel production,
semi-finished and finished steel products, and downstream steel-intensive
products, pursuant to Section 301 of the Trade Act of 1974. The Office of the
United States Trade Representative (USTR) is currently conducting a statutory
review of the Section 301 tariffs.

The United States and EU are currently negotiating a global sustainable steel
arrangement to restore market-oriented conditions and address carbon intensity
that is targeted for completion by the end of 2023.

U. S. Steel will continue to execute a broad, global strategy to maximize opportunities and navigate challenges presented by imports, global steel overcapacity, and international trade law and policy developments.

NEW ACCOUNTING STANDARDS

See Notes 2 and 3 to the Condensed Consolidated Financial Statements in Part I

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