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United States Steel Corporation Reports 2002 Fourth Quarter and Full-Year Results

PRNewswire-FirstCall
PITTSBURGH
01.28.2003

United States Steel Corporation (NYSE: X) today issued the following:

                           Earnings Highlights
               (Dollars in millions except per share data)

                                     4Q         4Q
                                    2002        2001      2002      2001

  Revenues and other income        $1,899     $1,414     $7,054    $6,375

  Net income (loss)
   per diluted share                $0.12      $(1.95)    $0.64    $(2.45)
  Net income (loss) adjusted
   per diluted share                $0.44      $(1.36)    $0.70    $(2.89)
  Net income (loss)                   $12      $(174)       $62     $(218)

  Adjustments for special items
   (pretax):
    Pension settlement loss            90          -        100         -
    Asset impairments - receivables     -         72         14       146
    Asset impairments - intangible
     asset                              -         20          -        20
    Costs related to separation         -         16          -        25
    Costs related to Fairless shutdown  -          9          1        38
    Federal excise tax refund          (2)         -        (38)        -
    Insurance recoveries related
     to USS-POSCO fire                (19)       (23)       (39)      (46)
    Gain on VSZ share sale            (20)         -        (20)        -
    Reversal of litigation accrual      -          -         (9)        -
    Gain on Transtar reorganization     -          -          -       (68)
    Prior year tax adjustments          -         (9)         -       (62)
    Tax effect of special items       (17)       (32)        (3)      (92)

  Net income (loss) adjusted
   for special items                  $44      $(121)       $68     $(257)

United States Steel Corporation (NYSE: X) recorded fourth quarter 2002 net income of $12 million, or 12 cents per diluted share, compared with a net loss of $174 million, or $1.95 per diluted share, in fourth quarter 2001.

Adjusted fourth quarter 2002 net income was $44 million, or 44 cents per diluted share, compared with an adjusted net loss of $121 million, or $1.36 per diluted share in fourth quarter 2001.

For the year 2002, U. S. Steel's net income was $62 million, or 64 cents per diluted share, reflecting a significant improvement from 2001's net loss of $218 million, or $2.45 per diluted share.

Fourth quarter 2002 income from operations before special items was $54 million, or $15 per ton, substantially improved from an operating loss of $158 million, or $51 per ton, in fourth quarter 2001. For full-year 2002, the company recorded income from operations before special items of $140 million, or $10 per ton, versus a loss of $290 million, or $21 per ton, in 2001.

Commenting on 2002 results, U. S. Steel Chairman Thomas J. Usher said, "Our return to profitability in 2002 can be attributed to a number of positives, including a dramatic improvement in our domestic flat-rolled business and the continued solid performance of U. S. Steel Kosice in the Slovak Republic. While our tubular business experienced a difficult marketplace throughout the year, it did an excellent job of managing costs and operations. Ongoing company-wide cost reduction efforts exceeded our goals, and we made significant progress toward implementing our strategies of growing our value-added capabilities and expanding globally as we pursued acquisition opportunities both in the United States and in Central Europe."

Usher also noted that, since its implementation in March 2002, President Bush's three-year Section 201 remedy has helped improve domestic industry conditions and has aided consolidation efforts under way within the domestic steel industry.

Effective with fourth quarter 2002, U. S. Steel has five reportable segments: Flat-rolled Products (Flat-rolled); Tubular Products (Tubular); U. S. Steel Kosice (USSK); Straightline Source (Straightline); and USS Real Estate (Real Estate). The composition of the Flat-rolled, Tubular and USSK segments remains unchanged from prior periods. The Straightline and Real Estate segments were previously reflected in Other Businesses. The presentation of Straightline and Real Estate as separate segments results from the application of quantitative threshold tests under generally accepted accounting principles rather than any fundamental change in the management or structure of the businesses. Comparative 2001 results have been conformed to the current year presentation.

U. S. Steel's Flat-rolled segment recorded fourth quarter income from operations of $8 million, or $3 per ton, and a full-year 2002 loss from operations of $31 million, or $3 per ton. These were substantial improvements from the respective fourth quarter and full-year 2001 losses from operations of $154 million, or $76 per ton, and $536 million, or $61 per ton. The average realized price in fourth quarter 2002 was $431 per ton, up $35 per ton from the year-earlier quarter, and slightly higher than in the 2002 third quarter. Fourth quarter 2002 shipments were 2.4 million net tons, up 19 percent from 2.0 million net tons in 2001's fourth quarter, but down 8 percent from third quarter 2002. As previously disclosed, Flat-rolled results in the fourth quarter were negatively impacted by the acceleration of several blast furnace outages that were originally scheduled to occur in 2003 and by higher natural gas prices. Costs related to these outages totaled approximately $27 million.

The Tubular segment recorded a loss from operations of $9 million, or $59 per ton, in the 2002 fourth quarter, compared with income from operations of $9 million, or $50 per ton, in the fourth quarter of 2001. For the year, this segment realized income from operations of $4 million, or $5 per ton, compared with income of $88 million, or $86 per ton, in 2001. Fourth quarter 2002 Tubular shipments of 152,000 net tons were down significantly from 180,000 net tons in fourth quarter 2001 and from 216,000 net tons in third quarter 2002. The quarter's average realized price fell $13 per ton from $681 per ton in fourth quarter 2001, but was up slightly from the prior 2002 quarter.

The USSK segment recorded fourth quarter income from operations of $45 million, or $42 per net ton, compared with $2 million, or $2 per net ton, in the 2001 fourth quarter. Fourth quarter 2002 shipments totaled 1.1 million net tons, up from 0.9 million net tons in the comparable 2001 quarter, and moderately higher than third quarter 2002 levels. USSK's average realized price in the fourth quarter rose to $306 per net ton, an increase of $55 per net ton versus the 2001 fourth quarter and $16 per net ton versus the 2002 third quarter. These increases reflect price increases implemented during 2002 for most products, as well as favorable foreign currency exchange effects. These favorable currency exchange effects on average realized prices were partially offset by unfavorable effects of these exchange rates on operating costs. For the year, USSK's income from operations was $110 million, or $28 per net ton, versus $123 million, or $33 per net ton, in the prior year. USSK's 2002 results included losses on conversion operations at Sartid in Serbia and business development expenses associated with Sartid and other expansion opportunities in Europe.

The Straightline segment includes the operating results of U. S. Steel's technology-enabled distribution business that serves steel consuming customers primarily in the eastern and central United States. The Straightline segment reported a fourth quarter loss from operations of $13 million, compared with a loss of $7 million in the year-earlier quarter when Straightline commenced shipments to customers. Straightline had full-year operating losses of $41 million and $17 million, respectively, during 2002 and 2001.

The Real Estate segment includes the operating results of U. S. Steel's domestic mineral interests that are not assigned to other operating units; timber properties; and residential, commercial and industrial real estate that is managed and developed for sale or lease. The Real Estate segment reported income from operations of $20 million in the 2002 fourth quarter, up from $14 million in the year-earlier quarter. This increase was primarily due to increased land sales. For the year, Real Estate posted operating income of $57 million, reflecting a decrease of $12 million from 2001. The decline resulted mainly from lower mineral interest royalties.

Units comprising U. S. Steel's Other Businesses, which are involved in the production and sale of coal, coke and iron-bearing taconite pellets; transportation services; and engineering and consulting services, had fourth quarter 2002 income from operations of $3 million, compared with a loss from operations of $22 million in fourth quarter 2001. For the year, these units reported income from operations of $41 million, compared with a loss of $17 million in 2001.

Available sources of liquidity at the end of 2002 were $1.03 billion, an increase of $326 million from year-end 2001, primarily due to the equity offering that was completed in May 2002 and improved operations during the year.

Looking ahead, shipments for the Flat-rolled segment in the 2003 first quarter are expected to improve somewhat from fourth quarter levels. The first quarter average realized price is also expected to improve slightly from the previous quarter. First quarter costs, however, will continue to be negatively affected by higher prices for natural gas. For full-year 2003, Flat-rolled shipments are expected to approximate 10.1 million net tons.

For the Tubular segment, first quarter 2003 shipments are projected to be up substantially from the 2002 fourth quarter, and the average realized price is expected to be lower than in the fourth quarter. Shipments for full-year 2003 are expected to be approximately 1.1 million net tons, as higher energy prices should spur a recovery in North American drilling activity in the second half of 2003.

USSK's first quarter 2003 shipments are expected to increase slightly from the 2002 fourth quarter, and shipments for the full year are projected to be approximately 4.1 million net tons. USSK's average realized price in the first quarter should improve slightly from the fourth quarter due primarily to a January 1, 2003, price increase for all products.

In the fourth quarter 2002, as previously reported, U. S. Steel recorded a pretax pension settlement loss of $90 million for the nonunion qualified plan and, under the accounting rules related to additional minimum pension liabilities, a charge to equity of $748 million for the union plan. In addition, based on preliminary actuarial information for 2003, the company expects annual net periodic pension costs to be $65 million and annual retiree medical and life insurance costs to be $210 million. In 2002, U. S. Steel recorded a credit of $103 million for pensions (excluding settlement charges of $100 million) and a $138 million expense for retiree medical and life insurance (excluding multiemployer and other plans). Pension costs are expected to increase from 2002 primarily because of lower plan assets, average asset return assumptions that have been reduced by 0.6 percentage points to 8.2 percent, and a discount rate that has been reduced from 7.0 percent to 6.25 percent. The anticipated increase in retiree medical and life insurance costs primarily reflects unfavorable health care claims cost experience in 2002 for union retirees, the use of the lower discount rate and higher assumed medical cost inflation.

U. S. Steel recently announced that it has signed an Asset Purchase Agreement with National Steel Corporation to acquire substantially all of National's steelmaking and finishing assets for approximately $950 million, which includes the assumption of liabilities of approximately $200 million. Net working capital will account for at least $450 million of this amount.

This transaction is contingent on the successful negotiation of a new labor contract with the United Steelworkers of America covering the National employees, the approval of the bankruptcy court and other customary regulatory approvals. A court hearing to consider the Asset Purchase Agreement and related matters is scheduled for January 30, 2003.

Work continues on several potential transactions to dispose of non- strategic assets. These include the sale of the raw materials and transportation businesses to an entity to be formed by affiliates of Apollo Management L.P., which U. S. Steel estimates would result in a pretax loss of up to $300 million; the sale of U. S. Steel Mining; and the contribution of certain timber properties to one or more employee benefit plans.

*****

This release contains forward-looking statements with respect to market conditions, operating costs, shipments and prices, benefit costs, a potential acquisition and potential asset dispositions. Some factors, among others, that could affect 2003 market conditions, costs, shipments and prices include import levels, future product demand, prices and mix, global and company steel production, plant operating performance, domestic natural gas prices and usage, the resumption of operation of steel facilities sold under the bankruptcy laws, and U.S. and European economic performance and political developments. Steel shipments and prices can be affected by imports and actions of the U.S. Government and its agencies. Factors that may affect USSK results are similar to domestic factors, including excess world supply, plus foreign currency fluctuations, matters peculiar to international marketing such as tariffs, and completion of facility projects at USSK. Factors that may affect the amount of the expected pension and retiree medical and life insurance costs in 2003 include pension fund investment performance, liability changes and interest rates. Factors that may impact the occurrence and timing of the acquisition of National's steelmaking and finishing assets include the negotiation of a new labor agreement between U. S. Steel and the United Steelworkers of America covering employees of the National facilities, receipt of necessary clearances from the Federal Trade Commission and the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvement Act, approval by the Surface Transportation Board under the Surface Transportation Act for the acquisition of the Delray Connecting Railroad Company, the absence of any injunctions blocking the acquisition, and the results of the auction process contemplated in National's bankruptcy court filing. Consummation of the asset dispositions will depend upon a number of factors including negotiation of definitive agreements; regulatory approvals, including Department of Labor approvals for the benefit plan contributions; and the ability of the purchasers to arrange financing. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, cautionary statements identifying important factors, but not necessarily all factors, that could cause actual results to differ materially from those set forth in the forward-looking statements have been included in the Form 10-K of U. S. Steel for the year ended December 31, 2001, and in subsequent filings for U. S. Steel.

A Statement of Operations, Other Financial Data and Preliminary Supplemental Statistics for U. S. Steel are attached.

The company will conduct a conference call on fourth quarter earnings on Tuesday, January 28, at 1 p.m. EST. To listen to the web cast of the conference call, visit the U. S. Steel web site, www.ussteel.com, and click on the "Investors" button. Replays of the web cast will be available through February 11.

For more information on U. S. Steel, visit our web site at www.ussteel.com.

                     UNITED STATES STEEL CORPORATION
                   STATEMENT OF OPERATIONS (Unaudited)
                   -----------------------------------

                            Fourth Quarter                Twelve Months
                                Ended                        Ended
                             December 31                  December 31
  (Dollars in millions,
   except per share
   amounts)                 2002         2001          2002          2001
  --------------------------------------------------------------------------
  REVENUES AND OTHER INCOME:
    Revenues              $1,852        $1,398       $6,949        $6,286
    Income from investees     22            13           33            64
    Net gains on disposal
     of assets                22             2           29            22
    Other income               3             1           43             3
                          ------        ------       ------        ------
        Total revenues and
         other income      1,899         1,414        7,054         6,375
                          ------        ------       ------        ------
  COSTS AND EXPENSES:
    Cost of revenues       1,638         1,452        6,156         6,166
    Selling, general and
     administrative expenses 172           116          417           270
    Depreciation, depletion
     and amortization         84            98          350           344
                          ------        ------       ------        ------
        Total costs and
         expenses          1,894         1,666        6,923         6,780
                          ------        ------       ------        ------
  INCOME (LOSS) FROM
   OPERATIONS                  5          (252)         131          (405)
  Net interest and other
   financial costs            30            67          115           141
                          ------        ------       ------        ------
  INCOME (LOSS) BEFORE
   INCOME TAXES              (25)         (319)          16          (546)
  Income tax benefit         (37)         (145)         (46)         (328)
                          ------        ------       ------        ------
  NET INCOME (LOSS)          $12         $(174)         $62         $(218)
                          ======        ======       ======        ======
  COMMON STOCK DATA:
    Net income (loss),
     per share
     - Basic and diluted    $.12        $(1.95)        $.64        $(2.45)

    Weighted average shares,
     in thousands
     - Basic             102,349        89,223       97,426        89,223
     - Diluted           102,349        89,223       97,428        89,223

    Dividends paid per share:
     United States Steel
      Corporation Common
      Stock                 $.05             -         $.20             -
     USX - U. S. Steel Group
      Common Stock             -          $.10            -          $.55


  Note:  Net income per common share for the periods of 2002 are based on
         the weighted average number of common shares outstanding during the
         periods.  Net loss per common share for the periods of 2001 are
         based on outstanding common shares at December 31, 2001, the date
         of the Separation.


  The following notes are an integral part of this financial statement.


                     UNITED STATES STEEL CORPORATION
                  SELECTED NOTES TO FINANCIAL STATEMENT
                  -------------------------------------

   1.  United States Steel Corporation (U. S. Steel) is engaged domestically
       in the production, sale and transportation of steel mill products,
       coal, coke and taconite pellets (iron ore); the management of mineral
       resources; the management and development of real estate; and
       engineering and consulting services and, through U. S. Steel Kosice
       (USSK) in the Slovak Republic, in the production and sale of steel
       mill products and coke primarily for the Central European market.
       Prior to December 31, 2001, the businesses of U. S. Steel comprised
       an operating unit of USX Corporation, now named Marathon Oil
       Corporation (Marathon).  Marathon had two outstanding classes of
       common stock: USX-Marathon Group common stock, which was intended to
       reflect the performance of Marathon's energy business, and USX-U. S.
       Steel Group common stock (Steel Stock), which was intended to reflect
       the performance of Marathon's steel business.  On December 31, 2001,
       U. S. Steel was capitalized through the issuance of 89.2 million
       shares of common stock to the holders of Steel Stock in exchange for
       all outstanding shares of Steel Stock on a one-for-one basis (the
       Separation).

       The accompanying Statement of Operations includes the fourth quarter
       and twelve months of 2002 results of operations of U. S. Steel on a
       stand-alone basis, while the fourth quarter and twelve months of 2001
       results of operations represent a carve-out presentation of the
       businesses comprising U. S. Steel and are not intended to be a
       complete presentation of the results of operations of U. S. Steel on
       a stand-alone basis.  The results of operations for the 2001 periods
       contain certain transactions related to interest and other financial
       costs that were attributed to U. S. Steel by Marathon based on U. S.
       Steel's cash flows and its capital structure.  Corporate general and
       administrative costs were allocated to U. S. Steel during the periods
       of 2001 based upon utilization or other methods that management
       believed to be reasonable and which considered certain measures of
       business activities, such as employment, investments and revenues.
       Income taxes were allocated to U. S. Steel during the periods of 2001
       in accordance with Marathon's tax allocation policy.  In general,
       such policy provided that the consolidated provision and related tax
       payments or refunds be allocated based principally upon the financial
       income, taxable income, credits, preferences and other amounts
       directly related to U. S. Steel.

       Effective January 1, 2002, net pension and other postretirement costs
       associated with active employees at operating locations are reflected
       in cost of revenues.  Net costs and credits associated with corporate
       headquarters personnel and all retirees are reflected in selling,
       general and administrative expenses.  Prior year data has been
       reclassified to conform to the current year presentation, which
       resulted in a decrease in cost of revenues and an increase in
       selling, general and administrative expenses of $41 million and
       $162 million for the fourth quarter and twelve months of 2001,
       respectively.

   2.  In 2002, U. S. Steel recognized a pretax gain of $38 million,
       associated with the recovery of black lung excise taxes that were
       paid on coal export sales during the period 1993 through 1999.  This
       gain is included in other income in the statement of operations and
       resulted from a 1998 federal district court decision that found such
       taxes to be unconstitutional.  Of the $38 million recognized,
       $11 million represented the interest component of the claim.

   3.  On March 1, 2001, U. S. Steel completed the purchase of the tin mill
       products business of LTV Corporation (LTV), which is now operated as
       East Chicago Tin.  In this noncash transaction, U. S. Steel assumed
       approximately $66 million of certain employee-related obligations
       from LTV.  The acquisition was accounted for using the purchase
       method of accounting.  Results of operations for 2001 included the
       operations of East Chicago Tin from the date of acquisition.  In the
       fourth quarter of 2001, following the discontinuation of LTV
       operations at East Chicago, U. S. Steel recorded a pretax charge of
       $20 million to impair an intangible asset related to a five-year
       agreement for LTV to supply U. S. Steel with pickled hot bands
       entered into in conjunction with the acquisition of the LTV's tin
       mill products business.  The impairment charge is reflected in
       depreciation, depletion and amortization.

       On March 23, 2001, Transtar, Inc. (Transtar) completed a
       reorganization with its two voting shareholders, U. S. Steel and
       Transtar Holdings, L.P. (Holdings), an affiliate of Blackstone
       Capital Partners L.P., which resulted in U. S. Steel becoming the
       sole owner of Transtar and certain of its subsidiaries while Holdings
       became the owner of the other subsidiaries.  U. S. Steel recorded
       $68 million in income from investees to reflect its share of the gain
       recognized by Transtar as a result of the reorganization.  Also, in
       connection with this transaction, U. S. Steel recognized a favorable
       deferred tax adjustment of $33 million related to its investment in
       the stock of Transtar.  U. S. Steel previously accounted for its
       investment in Transtar under the equity method of accounting.

   4.  U. S. Steel has a 16% investment in Republic Technologies
       International Holdings, LLC (Republic) which was accounted for under
       the equity method of accounting until the first quarter of 2001 when
       investments in and advances to Republic were reduced to zero.
       Republic filed a voluntary petition for bankruptcy in April of 2001
       to reorganize under Chapter 11 of the U.S. Bankruptcy Code.  Due to
       Republic's filing for bankruptcy, further deterioration of Republic's
       financial position and progression in the bankruptcy proceedings,
       U. S. Steel recorded pretax charges reflected as reductions in
       revenues of $74 million in the first quarter of 2001 and $26 million
       in the fourth quarter of 2001 to impair trade accounts receivable
       from Republic and an additional $4 million in the fourth quarter of
       2001 for receivables from another bankrupt steel company.  Additional
       pretax charges of $42 million in the fourth quarter of 2001 and
       $14 million in the second quarter of 2002 were recorded to impair
       retiree medical claim reimbursements owed by Republic.  These charges
       are reflected in selling, general and administrative expenses.  At
       December 31, 2002, U. S. Steel had no remaining financial exposure to
       Republic.

   5.  The income tax benefit in 2002 and 2001 reflected pretax losses from
       domestic operations and pretax income from USSK for which virtually
       no income tax provision was recorded.  In addition to a $4 million
       deferred tax charge related to a newly enacted state tax law, an
       $8 million tax benefit related to prior years' taxes was recorded
       during 2002.

       The income tax benefit in 2001 included a $33 million deferred tax
       benefit related to the Transtar reorganization, as discussed in
       Note 3.  In addition, net interest and other financial costs in 2001
       included a favorable adjustment of $67 million and the income tax
       benefit included an unfavorable adjustment of $15 million, both of
       which were related to prior years' taxes.

   6.  Selling, general and administrative expenses for the fourth quarter
       and twelve months of 2002 included pretax pension settlement losses
       of $90 million and $100 million, respectively.  Also included in the
       twelve months of 2002 is a $14 million pretax charge related to
       reserving Republic receivables, as discussed in Note 4.

       Selling, general and administrative expenses for the fourth quarter
       and twelve months of 2001 included $5 million and $14 million,
       respectively, of Separation costs for professional fees and
       $11 million in both periods for Separation costs related to a
       Voluntary Early Retirement Program.  Also included in the fourth
       quarter and twelve months of 2001 is a pretax charge of $42 million
       related to reserving retiree medical claim reimbursements from
       Republic, as discussed in Note 4.

   7.  Income from investees included pretax gains of $19 million and
       $23 million for the fourth quarter of 2002 and 2001, respectively,
       and $39 million and $46 million for the twelve months of 2002 and
       2001, respectively, for U. S. Steel's share of insurance recoveries
       related to the May 31, 2001 fire at the USS-POSCO joint venture.

   8.  In October 2002, U. S. Steel granted an option to purchase its shares
       of VSZ a.s. (VSZ).  U. S. Steel subsequently sold these shares.  Cash
       proceeds of approximately $31 million were received in consideration
       for the option and the sale of the shares, which resulted in a pretax
       gain of approximately $20 million, which is included in net gains on
       disposal of assets.  U. S. Steel previously accounted for its
       investment in VSZ under the cost method.

   9.  On August 14, 2001, U. S. Steel announced its intention to
       permanently close the cold rolling and tin mill operations at its
       Fairless Works.  In the fourth quarter and twelve months of 2001,
       U. S. Steel recorded a pretax charge of $9 million and $38 million,
       respectively, relative to the shutdown.

  10.  Statement of Financial Accounting Standards No. 87 "Employer's
       Accounting for Pensions" provides that if, at any plan measurement
       date, the fair value of plan assets is less than the plan's
       accumulated benefit obligation (ABO), the sponsor must establish a
       minimum liability at least equal to the amount by which the ABO
       exceeds the fair value of the plan assets and any pension asset must
       be removed from the balance sheet.  The sum of the liability and
       pension asset is offset by the recognition of an intangible asset or
       as a direct charge to stockholders' equity, net of tax effects.  Such
       adjustments have no direct impact on earnings per share or cash.  As
       of December 31, 2002, the fair value of plan assets for the U. S.
       Steel pension plan for union employees was $4.5 billion.  The ABO for
       this plan at December 31, 2002, exceeded the fair value of plan
       assets, resulting in a required minimum liability adjustment charge
       to equity of $748 million.


                     UNITED STATES STEEL CORPORATION
                     OTHER FINANCIAL DATA (Unaudited)
                   -----------------------------------

  Cash Flow Data                      (In millions)   2002          2001
  --------------------------------------------------------------------------
     Cash from operating activities:
      Net income (loss)                                $62          $(218)
      Depreciation                                     350            344
      Working capital changes                          (71)           577
      Other operating activities                       (62)           (34)
                                                    ------         ------
       Total                                           279            669
                                                    ------         ------
     Cash from (used in) investing activities:
      Capital expenditures                            (258)          (287)
      Other investing activities                       (51)            48
                                                    ------         ------
       Total                                          (309)          (239)
                                                    ------         ------
     Cash from (used in) financing activities
      and foreign exchange rate changes                126           (502)
                                                    ------         ------
       Total net cash flow                              96            (72)
     Cash at beginning of the year                     147            219
                                                    ------         ------
     Cash at end of the year                          $243           $147
                                                    ======         ======


                                                    Dec. 31       Dec. 31
  Balance Sheet Data                  (In millions)  2002           2001
  --------------------------------------------------------------------------
     Cash and cash equivalents                        $243           $147
     Other current assets                            2,198          1,926
     Property, plant and equipment - net             2,978          3,084
     Pension asset                                   1,654          2,745
     Other assets                                      905            435
                                                    ------         ------
       Total assets                                 $7,978         $8,337
                                                    ======         ======
     Current liabilities                            $1,371         $1,259
     Long-term debt                                  1,408          1,434
     Employee benefits                               2,601          2,008
     Other long-term liabilities                       569          1,130
     Stockholders' equity                            2,029          2,506
                                                    ------         ------
       Total liabilities and stockholders' equity   $7,978         $8,337
                                                    ======         ======


                     UNITED STATES STEEL CORPORATION
             PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
             -----------------------------------------------

                             Fourth Quarter                   Year
                            Ended December 31          Ended December 31
  (Dollars in millions)      2002         2001          2002         2001
  --------------------------------------------------------------------------
  INCOME (LOSS) FROM OPERATIONS
  Flat-rolled Products        $8         $(154)        $(31)        $(536)
  Tubular Products            (9)            9            4            88
  U. S. Steel Kosice          45             2          110           123
  Straightline               (13)           (7)         (41)          (17)
  Real Estate                 20            14           57            69
  Other Businesses             3           (22)          41           (17)
                           -----         -----        -----         -----
  Income (Loss) from
   Operations before
   special items              54          (158)         140          (290)
    Special Items:
     Pension settlement
      loss                   (90)            -         (100)            -
     Asset impairments -
      receivables              -           (72)         (14)         (146)
     Asset impairments -
      intangible assets        -           (20)           -           (20)
     Costs related to
      Separation               -           (16)           -           (25)
     Costs related to
      Fairless shutdown        -            (9)          (1)          (38)
     Federal excise
      tax refund               2             -           38             -
     Insurance recoveries
      related to USS-POSCO
      fire                    19            23           39            46
     Gain on VSZ share sale   20             -           20             -
     Reversal of litigation
      accrual                  -             -            9             -
     Gain on Transtar
      reorganization           -             -            -            68
                           -----         -----        -----         -----
       Total Income (Loss)
        from Operations       $5         $(252)        $131         $(405)

  CAPITAL EXPENDITURES
   Flat-rolled Products      $19           $18          $42          $129
   Tubular Products           24             5           52             5
   U. S. Steel Kosice         52            30           97            61
   Straightline                1             5            8            19
   Real Estate                 -             1            1             2
   Other Businesses           12            31           58            71
                           -----         -----        -----         -----
      Total                 $108           $90         $258          $287

  OPERATING STATISTICS

   Average realized price:
    ($/net ton)(a)
      Flat-rolled Products  $431          $396         $410          $397
      Tubular Products       668           681          651           685
      U. S. Steel Kosice     306           251          276           260

      Steel Shipments:(a)(b)
         Flat-rolled
          Products         2,400         2,020        9,900         8,775
         Tubular Products    152           180          773         1,022
         U. S. Steel
          Kosice           1,079           873        3,949         3,714

      Raw Steel-Production:
       (b)
         Domestic
          Facilities       2,609         2,160       11,535        10,093
         U. S. Steel
          Kosice           1,142           837        4,394         4,051

      Raw Steel-Capability
       Utilization:(c)
         Domestic
          Facilities        80.8%         67.0%        90.1%         78.9%
         U. S. Steel
          Kosice            90.6%         66.4%        87.9%         81.0%

      Domestic iron ore
       shipments(b)(d)     4,100         3,319       16,267        14,913
      Domestic coke
       shipments(b)(d)     1,323         1,040        5,185         4,731

  -----------
  (a)  Excludes intersegment transfers.
  (b)  Thousands of net tons.
  (c)  Based on annual raw steel production capability of 12.8 million net
       tons for domestic facilities and 5.0 million net tons for U. S. Steel
       Kosice.
  (d)  Includes intersegment transfers.

SOURCE: United States Steel Corporation

CONTACT: Media, Mike Dixon or John Armstrong, +1-412-433-6870, or
Investors/Analysts, John Quaid, +1-412-433-1184, all of United States Steel
Corporation

Web site: http://www.ussteel.com/

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