RESULTS OF OPERATIONS
U. S. Steel's results in the three months ended March 31, 2021 compared to the
same period in 2020, across the reportable segments, benefited from improving
business conditions despite continued challenges presented by the COVID-19
pandemic. Flat-Rolled results improved due to higher steel demand across most
consumer and manufacturing industries, pushing both spot and contract prices
higher. In Mini Mill, with the acquisition of Big River Steel on January 15,
2021, results were added for the first time in the first quarter of 2021. USSE
results improved due to stronger performance of the manufacturing and
construction sectors and higher selling prices though continued high levels of
imports persist. In Tubular, net sales decreased as disruptions in the oil and
gas industry continue to create significant reductions of drilling activity in
the U.S and continued high levels of energy tubular imports persist.

Net sales by segment for the months ended March 31, 2021 and 2020 are set forth in the following table:


                                                             Three Months Ended March 31,
(Dollars in millions, excluding intersegment                                                                %
sales)                                                         2021                  2020                Change
Flat-Rolled Products (Flat-Rolled)                       $        2,272          $    1,974                    15  %
Mini Mill (a)                                                       450                   -                   100  %
U. S. Steel Europe (USSE)                                           798                 505                    58  %
Tubular Products (Tubular)                                          134                 255                   (47) %
   Total sales from reportable segments                           3,654               2,734                    34  %
Other                                                                10                  14                   (29) %
Net sales                                                $        3,664          $    2,748                    33  %

(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.


                                      -27-
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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, 2021 versus
the three months ended March 31, 2020 is set forth in the following table:
                                                Steel Products (a)
                                                                                                                           Net
                           Volume              Price               Mix            FX (b)            Other (c)            Change
Flat-Rolled                      (6)  %                17  %            3  %              -  %                 1  %             15  %
Mini Mill (d)                       n/a                  n/a             n/a               n/a                  n/a               n/a
USSE                             30   %                19  %           (3) %             12  %                 -  %             58  %
Tubular                         (51)  %                 -  %            3  %              -  %                 1  %            (47) %
(a) Excludes intersegment sales
(b) Foreign currency translation effects
(c) Primarily of sales of raw materials and coke making by-products
(d) Not applicable (n/a), Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big
River Steel.



Net sales for the three months ended March 31, 2021 compared to the same period
in 2020 were $3,664 million and $2,748 million, respectively.
•For the Flat-Rolled segment the increase in sales primarily resulted from
higher realized prices ($177 per ton) across all products, partially offset by
decreased shipments (177 thousand tons) notably for hot-rolled products.
•For the USSE segment the increase in sales resulted from increased shipments
(242 thousand tons) predominantly for hot-rolled products and higher average
realized prices ($137 per net ton) across all products.
•For the Tubular segment the decrease in sales primarily resulted from decreased
shipments (98 thousand tons) across all products.

Selling, general and administrative expenses



Selling, general and administrative expenses were $96 million and $72 million in
the three months ended March 31, 2021 and 2020. The increase in expenses in the
three months ended March 31, 2021 versus the same period in 2020 primarily
resulted from the addition of Big River Steel with the purchase of its remaining
equity interest and increased profit-based payments.

Restructuring and other charges
During the three months ended March 31, 2021 and 2020, the Company recorded
restructuring and other charges of $6 million and $41 million, respectively. See
Note 20 to the Condensed Consolidated Financial Statements for further details.

Strategic projects and technology investments



We are executing on our customer-centric strategy to transform U. S. Steel into
a world-competitive, Best of BothSM, steelmaker by combining the best of the
integrated steelmaking model with the best of the mini mill steelmaking model.
Our strategy will deliver product and process innovation to create unmatched
value for our customers while enhancing our earnings profile and delivering
long-term cash flow through industry cycles.

On January 15, 2021, the Company completed a significant step in this
transformation with the acquisition of the remaining equity interest in Big
River Steel for approximately $625 million in cash net of $36 million and
$62 million in cash and restricted cash received, respectively, and the
assumption of liabilities of approximately $50 million. The results of Big River
Steel are reflected within the new Mini Mill segment. The acquisition of Big
River Steel increased U. S. Steel's annual raw steel production capability by
3.3 million net tons to 26.2 million net tons. The Mini Mill segment has two
electric arc furnaces (EAFs), two ladle metallurgical furnace stations (LMFs), a
Ruhrstahl Heraeus degasser, two continuous slab casters, a pickle line tandem
cold mill, batch annealing, a temper mill and a galvanizing line. Big River
Steel commenced commercial production on the second EAF during the fourth
quarter of 2020, doubling its raw steel production capacity.

In addition to the investment in Big River Steel, the Company has identified other core assets for investment as part of its Best of Both strategy.



The Company expects to invest approximately $550 million, of which approximately
50 percent has already been spent, to upgrade the Gary Works hot strip mill
through a series of projects focused on expanding the line's competitive
advantages. The Gary Works hot strip mill will further differentiate itself as a
leader in heavy-gauge products in strategic markets. In the fourth quarter of
2020 the Company resumed certain capability upgrades after it had delayed
upgrades as part of the Company's comprehensive response to impacts from
COVID-19 in the first quarter of 2020. The Company will continue to evaluate the
pace and timeline for completing the remaining investments in the Gary Works hot
strip mill.

                                      -28-
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In January 2019, U. S. Steel announced the construction of a new Dynamo line at
USSE. The new line, a $130 million investment, has an annual capacity of
approximately 100,000 metric tons. Construction on the Dynamo line began in
mid-2019 but due to challenging market conditions, has been paused. Upon its
completion, the new line will enable production of sophisticated silicon grades
of non-grain oriented (NGO) electrical steels to support increased demand in
vehicles and generators.

In May 2019, U. S. Steel announced that it plans to construct a new endless
casting and rolling facility at its Edgar Thomson Plant in Braddock,
Pennsylvania, and a cogeneration facility at its Clairton Plant in Clairton,
Pennsylvania, both part of the Company's Mon Valley Works, an expected
investment of at least $1.5 billion. The Company purchased certain equipment for
this project before delaying groundbreaking in March 2020 in response to
COVID-19. As of March 31, 2021, the Company had capitalized approximately $200
million related to the project. The Company has determined not to pursue this
project and is re-evaluating uses for the already purchased equipment.

Ongoing Impact of COVID-19



In 2020 the spread of the coronavirus pandemic across the globe significantly
impacted global markets and nearly every industry, U. S. Steel included. We
quickly recognized the uncertainty and potential severity the pandemic would
cause, and implemented our crisis response plan. Overseen by our Board of
Directors, and led by our executive team, we implemented a comprehensive and
adaptive response to the pandemic focused on protecting lives and livelihoods,
remaining nimble to execute our strategy and supporting our customers and
communities, all in line with our S.T.E.E.L. Principles: Safety First; Trust and
Respect; Environmental Stewardship; Excellence and Accountability; and Lawful
and Ethical Conduct. Some of the measures we continue to practice include:
•Issuing regular communications, including preventive tips, and a dedicated
website for employees and their families;
•Providing employees with protective equipment, masks, and sanitizing and
cleaning supplies and enhanced cleaning frequency;
•Limiting outside visitors to our facilities, restricting access for
non-essential vendors, suppliers and contractors;
•Actively managing physical distancing while at work; and
•Permitting a majority of our employees in our administrative offices and
headquarters to work from home.

Operating configuration adjustments



The Company also adjusted its operating configuration in response to changing
market conditions including global overcapacity, unfair trade practices and
increases in domestic demand as a result of tariffs on imports by indefinitely
and temporarily idling and then re-starting production at certain of its
facilities. U. S. Steel will continue to adjust its operating configuration in
order to maximize its strategy of combining the Best of Both leading integrated
and mini mill technology.

In December 2019, U. S. Steel announced that it would indefinitely idle a significant portion of Great Lakes Works due to market conditions including continued high levels of imports. The Company began idling the iron and steelmaking facilities in March 2020 and the hot strip mill rolling facility in June 2020. The carrying value of the Great Lakes Works facilities that were indefinitely idled was approximately $320 million as of March 31, 2021.



In December 2019, the Company completed the indefinite idling of its East
Chicago Tin (ECT) operations within its Flat-Rolled segment. ECT was
indefinitely idled primarily due to increased tin import levels in the U.S.
Additionally, U. S. Steel indefinitely idled its finishing facility in Dearborn,
Michigan (which operates an electrolytic galvanizing line), during the fourth
quarter of 2019. The carrying value of these facilities was approximately $15
million as of March 31, 2021.

In 2020, we took actions to adjust our footprint by temporarily idling certain
operations for an indefinite period to better align production with customer
demand and respond to the impacts from the COVID-19 pandemic. The operations
that were initially idled in 2020 and remained idle as of March 31, 2021
included:
•Blast Furnace A at Granite City Works
•Lone Star Tubular Operations
•Lorain Tubular Operations
•Wheeling Machine Products coupling production facility at Hughes Springs, Texas

As of March 31, 2021 the carrying value of the idled fixed assets for facilities noted above was: Granite City Works Blast Furnace A, $65 million; Lone Star Tubular Operations, $5 million; Lorain Tubular Operations, $70 million and Wheeling Machine Product's production facility, immaterial.









                                      -29-

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


                                      -30-
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                                                                   Three months ended March 31,            %
       (Dollars in millions)                                         2021                  2020         Change
Flat-Rolled                                                    $          146          $     (35)            517  %
Mini Mill (a)                                                             132                  -          n/a
USSE                                                                      105                (14)            850  %
Tubular                                                                   (29)               (48)             40  %

       Total earnings (loss) from reportable segments                     354                (97)            465  %
Other                                                                       8                  1             700  %

Segment earnings (loss) before interest and income


       taxes                                                              362                (96)            477  %

Items not allocated to segments:


       Big River Steel - inventory step-up amortization                   (24)                 -
       Big River Steel - unrealized losses                                 (9)                 -
       Big River Steel - acquisition costs                                 (9)                 -
       Restructuring and other charges                                     (6)               (41)
       Gain on previously held investment in Big River Steel

111


       Asset impairment charge                                              -               (263)
       Gain on previously held investment in UPI                            -                 25

Total earnings (loss) before interest and income taxes $ 425 $ (375)

            213  %

(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in Big River Steel.

Segment results for Flat-Rolled


                                                           Three months ended March 31,            %
                                                               2021              2020            Change

Earnings (loss) before interest and taxes ($ millions) $ 146 $ (35)

             517  %
Gross margin                                                       15    %             7  %             8  %
Raw steel production (mnt)                                      2,581              3,148              (18) %
Capability utilization                                             62    %            74  %           (12) %
Steel shipments (mnt)                                           2,332              2,509               (7) %
Average realized steel price per ton                    $         888      $         711               25  %



The increase in Flat-Rolled results for the three months ended March 31, 2021
compared to the same period in 2020 was primarily due to:
•increased average realized prices (approximately $345 million),
this change was partially offset by:
•decreased shipments (approximately $15 million)
•decreased mining sales (approximately $30 million)
•higher raw material costs (approximately $20 million)
•higher energy costs (approximately $15 million)
•higher other costs, primarily variable compensation and LIFO inventory
adjustments, (approximately $85 million).
Gross margin for the three months ended March 31, 2021 compared to the same
period in 2020 increased primarily as a result of higher average realized
prices.
                                      -31-
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Segment results for Mini Mill (a)


                                                                     Three 

Months Ended March 31,


                                                                      2021                    2020
Earnings before interest and taxes ($ millions)             $              132        $                -
Gross margin                                                                36      %                  -  %
Raw steel production (mnt)                                                 510                         -
Capability utilization                                                      75      %                  -  %
Steel shipments (mnt)                                                      447                         -
Average realized steel price per ton                        $              967        $                -
(a) Mini Mill segment added after January 15, 2021 with the purchase of the remaining equity interest in
Big River Steel.



Segment results for USSE
                                                           Three Months Ended March 31,            %
                                                               2021              2020            Change

Earnings (loss) before interest and taxes ($ millions) $ 105 $ (14)

             850  %
Gross margin                                                       17    %             4  %            13  %
Raw steel production (mnt)                                      1,197                882               36  %
Capability utilization                                             97    %            71  %            26  %
Steel shipments (mnt)                                           1,043                801               30  %
Average realized steel price per ($/ton)                $         748      $         611               22  %
Average realized steel price per (€/ton)                €         620      €         554               12  %



The increase in USSE results for the three months ended March 31, 2021 compared
to the same period in 2020 was primarily due to:
•Increased average realized prices (approximately $100 million)
•increased shipments (approximately $20 million)
•strengthening of the Euro versus the U.S. dollar (approximately $25 million),
these changes were partially offset by:
•higher raw material costs (approximately $20 million)
•higher other costs (approximately $5 million).
Gross margin for the three months ended March 31, 2021 compared to the same
periods in 2020 increased primarily as a result of higher sales volume and
higher average realized prices.

Segment results for Tubular


                                                                                                       %
                                                           Three Months Ended March 31,             Change
                                                              2021                 2020
Loss before interest and taxes ($ millions)          $              (29)     $          (48)               40  %
Gross margin                                                        (11)   %            (12) %              1  %
Raw steel production (mnt) (a)                                       93                   -           n/a
Capability utilization (a)                                           42    %              -  %             42  %
Steel shipments (mnt)                                                89                 187               (52) %
Average realized steel price per ton                 $            1,372      $        1,283                 7  %

(a) Tubular segment raw steel added in October 2020 with the start-up of the new electric arc furnace.


                                      -32-
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The increase in Tubular results for the three months ended March 31, 2021 as
compared to the same period in 2020 was primarily due to:
•increased average realized prices (approximately $5 million)
•lower operating costs (approximately $10 million)
•lower other costs, primarily idled plant carrying costs, (approximately $25
million).
these changes were partially offset by:
•decreased shipments (approximately $10 million)
•higher raw material costs (approximately $10 million).
Gross margin for the three months ended March 31, 2021 compared to the same
period in 2020 increased primarily as a result of the positive cost improvements
from the Tubular plant idlings, partially offset by increased raw material
costs.

Items not allocated to segments



•We recorded Big River Steel - inventory step-up amortization charge of
$24 million in the three months ended March 31, 2021. See Note 5 to the
Condensed Consolidated Financial Statements for further details.
•We recorded Big River Steel - unrealized losses of $9 million in the three
months ended March 31, 2021 for the post-acquisition mark-to-market impacts of
hedging instruments acquired with the purchase of the remaining equity interest
in Big River Steel. See Note 14 to the Condensed Consolidated Financial
Statements for further details.
•We recorded Big River Steel - acquisition costs of $9 million in the three
months ended March 31, 2021.
•We recorded restructuring and other charges of $6 million in the three months
ended March 31, 2021. See Note 20 to the Condensed Consolidated Financial
Statements for further details.
•We recorded a gain on previously held equity investment in Big River Steel of
$111 million in the three months ended March 31, 2021. See Note 5 to the
Condensed Consolidated Financial Statements for further details.

Net interest and other financial costs


                                                                Three Months Ended March 31,           %
(Dollars in millions)                                                2021             2020          Change
Interest expense                                             $              92    $       50             (84) %
Interest income                                                             (1)           (4)            (75) %
Loss on debt extinguishment                                                255             -            (100) %
Other financial cost (gains)                                                18            (3)           (700) %
Net periodic benefit income                                                (31)           (8)            288  %
Total net interest and other financial costs                 $             333    $       35            (851) %



Net interest and other financial costs increased in the three months ended March
31, 2021 as compared to the same period last year from increased interest
expense due to a higher level of debt, debt retirement costs and higher other
financial costs primarily from the absence of the prior year's favorable Big
River Steel call and put option adjustments and foreign exchange losses,
partially offset by an increase in net periodic benefit income (as discussed
below).

The net periodic benefit income components of pension and other benefit costs
are reflected in the table above, and increased in the three months ended March
31, 2021 as compared to the same periods last year primarily due to better than
expected asset performance and lower amortization of prior service costs.
Income taxes
The income tax provision (benefit) was $1 million in the three months ended
March 31, 2021 compared to $(19) million in the three months ended March 31,
2020.

The Company regularly evaluates the need for a valuation allowance for its
deferred income tax benefits by assessing whether it is more likely than not it
will realize these benefits in future periods. In assessing the need for a
valuation allowance, the Company considers all available evidence, both positive
and negative, related to the likelihood of realization of its deferred income
tax benefits, and based on the weight of that evidence, determines whether a
valuation allowance is required.

Net earnings attributable to United States Steel Corporation were $91 million in
the three months ended March 31, 2021, compared to a net loss of $391 million in
the three months ended March 31, 2020. The changes primarily reflect the factors
discussed above.
                                      -33-
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LIQUIDITY AND CAPITAL RESOURCES



Net cash provided by operating activities was $111 million for the three months
ended March 31, 2021 compared to net cash used by operating activities of $142
million in the same period last year. The increase in cash from operations is
primarily due to stronger financial results, partially offset by changes in
working capital period over period. 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.

Our cash conversion cycle for the first quarter of 2021 improved by nine days as compared to the fourth quarter of 2020 as shown below: Cash Conversion Cycle

                                         2021                                           2020
                                                   $ millions             Days                    $ millions             Days
Accounts receivable, net (a)                         $1,619                32                        $994                 38

+ Inventories (b)                                    $1,750                46                       $1,402                54

- Accounts Payable and Other Accrued
Liabilities (c)                                      $2,491                63                       $1,861                68

= Cash Conversion Cycle (d)                                                15                                             24


(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 in the United States. At both March 31, 2021 and March 31,
2020, the LIFO method accounted for 51 percent and 65 percent of total inventory
values, respectively. In the U.S., management monitors inventory realizability
by comparing the LIFO cost of inventory with the replacement cost of inventory.
To the extent the replacement cost (i.e., market value) of inventory is lower
than the LIFO cost of inventory, management will write the inventory down. As of
March 31, 2021, and December 31, 2020 the replacement cost of the inventory was
higher by approximately $878 million and $848 million, respectively.
Additionally, 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 2021.

Capital expenditures for the three months ended March 31, 2021, were $136
million, compared with $282 million in the same period in 2020. Flat-rolled
capital expenditures were $74 million and included spending for Mon Valley
Endless Casting and Rolling, Gary Hot Strip Mill upgrades, Mining Equipment and
various other infrastructure, environmental, and strategic projects. Mini Mill
capital expenditures were $36 million and primarily included spending for Phase
II expansion. USSE capital expenditures of $14 million consisted of spending for
Degasser improvements, Dynamo Line and various other infrastructure, and
environmental projects. Tubular capital expenditures were $12 million and
included spending for the Fairfield Electric Arc Furnace (EAF) project and
various other infrastructure, and environmental projects.
U. S. Steel's contractual commitments to acquire property, plant and equipment
at March 31, 2021, totaled $588 million.

Net cash used by financing activities was $573 million for the three months
ended March 31, 2021 compared to net cash provided of $983 million in the same
period last year. The decrease was primarily due to the net change in short-term
and long-term debt and revolving credit facilities, partially offset by the
issuance of common stock.
                                      -34-
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The following table summarizes U. S. Steel's liquidity as of March 31, 2021:

(Dollars in millions)


   Cash and cash equivalents                                            $   

753

Amount available under $2.0 Billion Credit Facility Agreement 1,543

Amount available under Big River Steel - Revolving Line of Credit 251


   Amount available under USSK credit facilities                            

362


   Total estimated liquidity                                            $ 

2,909





In the first quarter of 2021, we issued 48,300,000 shares of common stock for
net proceeds of approximately $791 million and issued $750 million in aggregate
principal amount of 6.875% Senior Notes due 2029 (2029 Senior Notes) for net
proceeds of $739 million after transaction costs. With the common stock and 2029
Senior Notes issuance proceeds and cash on hand we fully redeemed our 12.000%
Senior Secured Notes due 2025 in the aggregate principal amount of $1.056
billion plus premiums of $181 million, repaid in full our Export-Import Credit
Agreement in the amount of $180 million and reduced the borrowing under our
Credit Facility Agreement and USSK Facility Agreement by $500 million and $163
million, respectively. See Note 15 to the Condensed Consolidated Financial
Statements for further details.

With the acquisition of Big River Steel on January 15, 2021 we assumed
additional indebtedness. Below is a summary of the most significant debt
acquired as of March 31, 2021. See Note 15 to the Condensed Consolidated
Financial Statements for further details.
•6.625% Senior Secured Notes in the aggregate principal amount of $900 million
that mature in January 2029;
•4.50% Arkansas Development Finance Authority Bonds in the aggregate principal
amount of $487 million that have a final maturity in September 2049;
•4.75% Arkansas Development Finance Authority Bonds Tax Exempt Series 2020
(Green Bonds) in the aggregate principal amount of $265 million that have a
final maturity in September 2049;
•Arkansas Teacher Retirement System Notes Payable in the amount of $106 million
that mature in 2023;
•ABL Credit Agreement with current borrowings of $30 million and maturity in
August 2022.

As of March 31, 2021, $161 million of the total cash and cash equivalents was
held by foreign subsidiaries. Substantially all of the liquidity attributable to
our foreign subsidiaries can be accessed without the imposition of income taxes
as a result of the election effective December 31, 2013 to liquidate for U.S.
income tax purposes a foreign subsidiary that holds most of our international
operations.

On April 12, 2021, United States Steel Corporation entered into a Notice and
Acknowledgement with the Export Credit Agreement (ECA) lender, facility agent
and ECA agent, KFW IPEX-BANK GMBH to acknowledge that the previously announced
endless casting and rolling project at Mon Valley Works would no longer be
pursued and the associated equipment for the project is now being evaluated for
other uses. Use of the Export-Credit Agreement for further equipment purchases
is also being evaluated. As of March 31, 2021, $136 million was owed on the ECA.

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 change clauses. If a material adverse change was to occur, our ability
to fund future operating and capital requirements could be negatively impacted.

We may from time to time seek to retire or repurchase our outstanding long-term
debt through open market purchases, privately negotiated transactions, exchange
transactions, redemptions or otherwise. Such purchases or exchanges, if any,
will depend on prevailing market conditions, our liquidity requirements, and
other factors and may be commenced or suspended at any time. The amounts
involved may be material. See Note 15 to the Condensed Consolidated Financial
Statements for further details regarding U. S. Steel's debt.

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 $220 million of liquidity sources for financial
assurance purposes as of March 31, 2021. Increases 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.

In October 2020, the Company entered into a supply chain finance agreement with
a third party administrator with an initial term of one year which is guaranteed
by the Export Import Bank of the United States (Ex-Im Guarantee), see our Annual
Report on Form 10-K for the year-ended December 31, 2020 for further details. As
of March 31, 2021, accounts payable and accrued expenses included $78 million of
outstanding payment obligations which suppliers elected to sell to participating
financial institutions. Access to supply chain financing could be curtailed in
the future if the terms of the Ex-Im Guarantee are modified or if
                                      -35-
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our credit ratings are downgraded. If access to supply chain financing is curtailed, working capital could be negatively impacted which may necessitate additional borrowing.



We finished the first quarter of 2021 with $753 million of cash and cash
equivalents and $2,909 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. 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.

We expect that our estimated liquidity requirements will consist primarily of
the remaining portion of our 2021 planned strategic and sustaining capital
expenditures, additional debt repayment, working capital requirements, interest
expense, and operating costs and employee benefits for our operations after
taking into account recent footprint actions and cost reductions at our plants
and headquarters. Our available liquidity at March 31, 2021 consists principally
of our cash and cash equivalents and available borrowings under the Credit
Facility Agreement, Big River Steel ABL Facility and the USSK Credit Facilities.
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, repayment or refinancing of outstanding debt, the incurrence of additional
debt or the issuance of additional debt or equity securities, drawing on
available capacity under the Credit Facility Agreement, Big River Steel ABL
Facility and/or the USSK Credit Facilities, or reducing outstanding borrowings
under those facilities from time to time if deemed appropriate by management.
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 (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 CAA obligations and similar obligations in Europe.

EU Environmental Requirements and Slovak Operations Under the EU Emissions Trading System (EU ETS), USSE's final allocation for the Phase III period, which covered the years 2013 through 2020 was 48 million European Union Allowances (EUA). During the years 2017 - 2020 we purchased approximately 12.3 million EUA totaling €141 million (approximately $165 million) to cover the Phase III period shortfall of EUA.



Phase IV commenced on 1 January 2021 and will finish on 31 December 2030. The
decision on USSE's free allocation for the first five years of the Phase IV
period is expected by the end of June 2021. In the fourth quarter of 2020 USSE
started with purchases of EUA for Phase IV period. As of March 31, 2021, we have
pre-purchased approximately 1.6 million EUA totaling €38 million (approximately
$46 million).

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 $162 million) over the actual
program period. 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. USSK complied with these
covenants as of March 31, 2021. 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 USSK, 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



Future compliance with CO2 emission requirements may include substantial costs
for emission allowances, restriction of production and higher prices for coking
coal, natural gas and electricity generated by carbon-based systems. Because we
cannot predict what requirements ultimately will be imposed in the U.S. and
Europe, it is difficult to estimate the likely impact on U. S. Steel, but it
could be substantial. On March 28, 2017, President Trump signed Executive Order
13783 instructing the United States Environmental Protection Agency (U.S. EPA)
to review the Clean Power Plan (CPP). As a result, in June 2019, the U.S. EPA
published a final rule, the "Affordable Clean Energy (ACE) Rule" that replaced
the CPP. Twenty-three states, the District of
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Columbia, and seven municipalities are challenging the CPP repeal and ACE rule
in the U.S. Court of Appeals for the D.C. Circuit. A coalition of 21 states has
intervened in the litigation in support of the U.S. EPA. Various other public
interest organizations, industry groups, and Members of Congress are also
participating in the litigation. On January 19, 2021, the D.C. Circuit vacated
and remanded the ACE to EPA, while the CPP remains stayed. It is unclear as to
how the new Biden administration will proceed with the remand. Any impacts to
our operations as a result of any future greenhouse gas regulations are not
estimable at this time since the matter is unsettled. In any case, to the extent
expenditures associated with any greenhouse gas regulation, as with all costs,
are not ultimately reflected in the prices of U. S. Steel's products and
services, operating results will be reduced.

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).
Revised rules for Phase IV are still being finalized and may differ between the
periods. However, the legislation as currently drafted places more stringent
requirements over reduction targets and the amount of the free allocation of CO2
emissions credits. Currently, the overall target is a 40 percent reduction of
1990 emissions by 2030. Ongoing political discussions indicate that an even more
stringent target of 60 percent may be instituted. At this time, carbon
neutrality of the EU industry is set to be achieved by 2050.
Revised rules for free allocation of CO2 emissions credits are based on reduced
benchmark values which have not yet been published and historical levels of
production from 2014-2018. USSE submitted all required historical production
data in 2019. The final EU decision on the free allocation amount for 2021-2025
is expected in the second quarter of 2021. Allocations to individual
installations may be adjusted annually to reflect relevant increases and
decreases in production. The threshold for adjustments was set at 15 percent and
will be assessed on the basis of a rolling average of two years. The average
production level of 2019 and 2020 will be assessed to determine the free
allocation for 2021. Preliminary production data shows that USSE missed the 15
percent threshold in 2020; therefore, the free allocation for 2021 may be
decreased. Lower production in 2019 and 2020 may have an impact on the future
free allocation for 2026-2030, where historical production average for years
2019-2023 are assessed.

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
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
(RTR) 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, AISI, Clean Air Council and others, were filed with the United States
Court of Appeals for the District of Columbia Circuit. The cases were
consolidated and are being held in abeyance until EPA reviews and responds to
administrative petitions for review. For the Taconite Iron Ore Processing
category, based on the results of the Agency's risk review, U.S. EPA promulgated
a final rule on July 28, 2020, in which 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. Based upon our
analysis of the proposed taconite rule, the Company does not expect any material
impact as a result of the rule. However, petitions for review of the rule were
filed in the United States Court of Appeals for the District of Columbia
Circuit, in which the Company and AISI intervened. 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.

On March 12, 2018, the New York State Department of Environmental Conservation
(DEC), along with other petitioners, submitted a CAA Section 126(b) petition to
the U.S. EPA. In the petition, the DEC asserts that stationary sources from the
following nine states are interfering with attainment or maintenance of the 2008
and 2015 ozone National Ambient Air Quality Standards (NAAQS) in New York:
Illinois, Indiana, Kentucky, Maryland, Michigan, Ohio, Pennsylvania, Virginia,
and West Virginia. DEC is requesting the U.S. EPA to require sources of nitrogen
oxides in the nine states to reduce such emissions. In a final rule promulgated
in the October 18, 2019, Federal Register, EPA denied the petition. On October
29, 2019, New York, New Jersey, and the City of New York petitioned the United
States Court of Appeals for the District of Columbia Circuit for review of U.S.
EPA's denial of the petition. In July 2020, the Court vacated EPA's
determination and remanded it back to EPA to reconsider
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the 126(b) petition in a manner consistent with the Court's opinion. At this
time, since EPA's decision after its reconsideration is unknown, the impacts of
any reconsideration are indeterminable and inestimable.

The CAA also requires the U.S. EPA to develop and implement 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, 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, 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 District of Columbia
Circuit. Several other states and industry trade groups intervened in support of
U. S. EPA's action. The case remains before the Court.

On December 14, 2012, the U.S. EPA lowered the annual standard for PM2.5 from 15
micrograms per cubic meter (ug/m3) to 12 ug/m3, and retained the PM2.5 24-hour
and PM10 NAAQS rules. In December 2014, the U.S. EPA designated some areas in
which U. S. Steel operates as nonattainment with the 2012 annual PM2.5 standard.
On April 6, 2018, the U.S. EPA published a notice that Pennsylvania, California
and Idaho failed to submit a SIP to demonstrate attainment with the 2012 fine
particulate standard by the deadline established by the CAA. As a result of the
notice, Pennsylvania, a state in which we operate, was required to submit a
State Implementation Plan (SIP) to the U.S. EPA no later than November 7, 2019
to avoid sanctions. On April 29, 2019, the ACHD published a draft SIP for the
Allegheny County nonattainment area which demonstrates that all of Allegheny
County will meet its reasonable further progress requirements and be in
attainment with the 2012 PM2.5 annual and 24-hour NAAQS by December 31, 2021
with the existing controls that are in place. On September 12, 2019, the
Allegheny County Board of Health unanimously approved the draft SIP. The draft
SIP was then sent to the Pennsylvania Department of Environmental Protection
(PADEP). PADEP submitted the SIP to U.S. EPA for approval on November 1, 2019.
To date, U.S. EPA has not taken action on PADEP's submittal. On December 18,
2020, 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 District of
Columbia Circuit. Several industry trade groups intervened in support of U. S.
EPA's action. The case remains before the Court.

On January 26, 2021, ACHD announced that for the first time in history all eight
air quality monitors in Allegheny County met the federal air quality standards
including particulate matter (PM2.5 and PM10).

On November 20, 2020, ACHD proposed a reduction to the current allowable
emissions from coke plant operations, including the hydrogen sulfide content of
coke oven gas, that would be more stringent than the Federal Best Available
Control Technology and Lowest Achievable Emission Rate requirements. In various
meetings with ACHD, U. S. Steel has raised significant objections, in
particular, that ACHD has not demonstrated that continuous compliance with the
draft rule is economically and technologically feasible. While U. S. Steel
continues to meet with ACHD regarding the draft rule, U. S. Steel believes that
any rule promulgated by ACHD must comply with its statutory authority. If the
draft rule or similar rule is adopted, the financial and operational impacts to
U. S. Steel could be material. To assist in developing rules objectively and
with adequate technical justification, the June 27, 2019, Settlement Agreement,
establishes procedures that would be used when developing a new rule. Because U.
S. Steel believes ACHD did not follow the procedures prescribed in the June 27,
2019 Settlement Agreement (Agreement) with ACHD, U. S. Steel has invoked dispute
resolution per the terms of the Agreement regarding ACHD's proposed coke rule.
U. S. Steel and ACHD are currently negotiating resolution of the disputes.

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 2021.

INTERNATIONAL TRADE
U. S. Steel continues to face import competition, much of which is unfairly
traded, supported by foreign governments, and fueled by massive global steel
overcapacity, currently estimated to be over 625 million metric tons per
year-over seven times the entire U.S. steel market and over thirty times total
U.S. steel imports. These imports, as well as the underlying policies/practices
and overcapacity, 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 for imports from: (1)


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Argentina, Brazil, and South Korea, which are subject to restrictive quotas; (2)
Canada and Mexico, which are not subject to either tariffs or quotas but tariffs
could be re-imposed on surging product groups after consultations; and (3)
Australia, which is not subject to tariffs, quotas, or an anti-surge mechanism.

The U.S. Department of Commerce (DOC) is managing a process in which U.S.
companies may request and/or oppose one-year temporary product exclusions from
the Section 232 tariffs and quotas. Over 248,000 temporary exclusions have been
requested for steel products. In December 2020, DOC announced 108 indefinite and
not importer-specific "General Approved Exclusions" for products DOC determined
not to be domestically available.

Multiple legal challenges to the Section 232 action continue before the U.S.
Court of International Trade (CIT) and U.S. Court of Appeals for the Federal
Circuit (CAFC). Though U.S. courts have rejected constitutional and statutory
challenges to the initial steel Section 232 action and overall product exclusion
process, the CIT struck down both the 2018-2019 temporary increase in Section
232 tariffs on imports from Turkey (the government's appeal is pending before
the CAFC) and the January 2021 expansion of the Section 232 action to certain
downstream steel products (pending appeal to the CAFC). Multiple countries have
challenged the Section 232 action at the World Trade Organization (WTO), imposed
retaliatory tariffs, and/or acted to safeguard their domestic steel industries
from increased steel imports. In turn, the United States has challenged the
retaliation at the WTO.

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 capacity,
technology, and skills, thereby strengthening U.S. national and economic
security. The Company continues to actively defend the Section 232 action.

In February 2019, the European Commission (EC) imposed a definitive tariff rate
quota safeguard of 25 percent on certain steel imports that exceed established
quotas. In February 2021, the EC initiated its ongoing review to determine
whether to extend the safeguard beyond June 2021.

Antidumping duties (AD) and countervailing duties (CVD or antisubsidy duties)
apply in addition to the Section 232 tariffs and quotas and the EC's safeguard,
and AD/CVD orders will continue beyond the Section 232 action and the EC's
safeguard. Thus, U. S. Steel continues to actively defend and maintain the 55
U.S. AD/CVD orders and 11 European Union (EU) AD/CVD orders covering U. S. Steel
products in multiple proceedings before the DOC, U.S. International Trade
Commission, CIT, CAFC, the EC and European courts, and the WTO.

In April 2021, DOC issued an AD order on U.S. imports of seamless standard, line, and pressure pipe from Czechia. Final determinations in the parallel AD/CVD investigations on U.S. imports from South Korea, Russia, and Ukraine are expected during the third quarter of 2021.

Additional tariffs of 7.5 to 25 percent continue to apply to certain U.S. imports from China, including certain steel raw materials, steel and downstream products, pursuant to Section 301 of the Trade Act of 1974.

The Global Forum on Steel Excess Capacity, the Organization for Economic Co-operation and Development Steel Committee, and trilateral negotiations between the United States, EU, and Japan continue to address overcapacity.

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
Item 1 of this Form 10-Q.

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