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U. S. Steel Withdraws Damage Claim Against Miller Citizens Corporation

Urges Industry, Government And Citizens to Work Together to Solve Lake County Tax Problems

GARY, Ind.

United States Steel Corporation (NYSE: X) announced today that it has withdrawn its request to be compensated by the Miller Citizens Corporation (MCC) for legal fees incurred defending against a filing by the MCC to oppose the proposed tax settlement between the company, Lake County and the state of Indiana. The Indiana Tax Court recently held that MCC had no right to intervene and that the MCC motion was not timely filed.

Commenting on the company's decision, U. S. Steel Gary Works General Manager George Babcoke said, "While we were deeply offended by certain language in the brief, which unnecessarily degraded U. S. Steel and our employees, the citizens of Lake County and its local governments, we are withdrawing our request for damages at the urging of local government officials and because we want to continue to focus on the important issues. It is not our intent to do anything that would financially impact individual homeowners.

"We have met with the leadership of the MCC several times and continue to offer to meet with all members of the MCC. All constituents - including the citizens of Miller - should work together to find workable solutions to the tax problem, which not only affects the citizens of Northwest Indiana, but which has also discouraged investment in the area and poses a significant threat to the area's future economic vitality."

U. S. Steel believes that the settlement agreement is in the best interest of all parties and significantly benefits Northwest Indiana. Under that agreement, Lake County will receive $53 million - $44 million from U. S. Steel and the remainder from the state of Indiana. U. S. Steel has also agreed to invest no less than $150 million in our Lake County operations over a period of four years and to work with the City of Gary to redevelop and donate to the city approximately 200 acres of lakeshore land on the west end of the plant. Under the settlement U. S. Steel also will relinquish legitimate tax refund claims totaling $65 million for prior years 1994 to 1996 and 1999.

"Gary Works remains the most highly taxed of all of U. S. Steel's facilities and among our competitors on a per-ton-of-steel basis," added Babcoke. "Steelmaking is a cyclical business, and if we don't take steps to reduce costs and improve productivity during the good times, we will not be prepared to weather the bad times.

"Thousands of U. S. Steel employees and retirees make their homes in Lake County. These are hardworking men and women who want to see a bright future for their families. We should all be working together to achieve that brighter future. To do so, we must find a common ground where industry, employees, government and citizens can work together to control costs, reduce taxes and revitalize our community. It's the only hope for a prosperous future for all of Northwest Indiana."

For more information about U. S. Steel visit .

SOURCE: United States Steel Corporation

CONTACT: John Armstrong, +1-412-433-6792, or Carlee Vargo,
+1-412-433-6777, both of United States Steel Corporation

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