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We will start the call with introductory remarks from U.S. Steel Chairman and CEO, John Surma covering our third quarter results as well as certain strategic projects we are pursuing. Next, I will provide some additional details for the third quarter; and then Gretchen Haggerty, U.S. Steel Executive Vice President and CFO, will comment on a few financial matters and our outlook for the fourth quarter. Following our prepared remarks, we'll be happy to take your questions.Before we begin, I must caution you that today's conference call contains forward-looking statements, and that future results may differ materially from statements or projections made on today's call. For your convenience, the forward-looking statements and risk factors that could affect those statements are referenced at the end of our release and are included in our most recent annual report on Form 10-K and updated on our quarterly reports on Form 10-Q in accordance with the Safe Harbor provisions. Now to begin the call, here is U.S. Steel Chairman and CEO, John Surma. John P. Surma Thanks, Dan, and good afternoon, everyone. Thanks again for joining us. Earlier today, we reported third quarter net income of $22 million or $0.15 per diluted share on a net sales of $5.1 billion and shipments of 5.5 million tons. Excluding the effect of foreign currency losses, primarily related to the accounting remeasurements of an intercompany loan, our adjusted net income was $118 million, less than the second quarter as we expected, but still a significant improvement of almost $300 million from the third quarter of last year. Our adjusted earnings of $0.72 per share was almost $2 per share better than last year's third quarter. Now before discussing our financial results in more detail, I want to comment, as I usually do, on our safety performance. We continue to make significant progress in the elimination of injuries and illnesses in our company. Since 2005, we have reduced our OSHA recordable rate by 47%, and we have reduced the number of days away from work injuries by 66% over that same period. We're not content with this performance even though it is quite good compared to the average for our industry, and we continue to strive for our ultimate goal of 0 injuries. With the support of all of our employees, we remain focused on having each and every one of our people return home from work safely every day.
Now let me turn to our third quarter results. Our Flat-rolled segment had another strong quarter, with operating income of $203 million. The decrease from second quarter results was caused by lower average realized prices due to lower spot market demand in prices and lower shipment volumes and capability utilization rates, reflecting increased domestic capacity and imports. While our operating income of $53 per ton was less than the $95 per ton we achieved in the second quarter, our margins were significantly better than they were in the third quarter of last year, as our strong iron ore position enabled us to benefit from this year's comparatively stronger price environment.Now before moving on to our European segment, I would like to say that we're pleased to have a new labor agreement in place at our Hamilton Works. We have good people at Hamilton, and we are glad to have them back to work. Gretchen will provide some details on the new labor contract and our near-term plans for the facility in a few minutes. Previous to Europe, our operating loss increased to $50 million compared to an $18 million loss in the second quarter primarily due to lower average realized prices as a result in a weaker spot market caused by the very difficult economic conditions in Europe, and in particularly, southern Europe. While our raw materials costs were in line with the second quarter and we have lower operating costs, primarily related to reduced facility maintenance and outage spending. We continue to face particularly -- particular challenges in Serbia with comparatively high raw materials costs primarily due to our complete reliance on purchased coke and a less favorable product mix. A slow recovery in the Bakken region, in particular, and pressure from lower-priced imports has resulted in reduced spot market prices and weak demand.
Our European raw steel capability utilization rate for the third quarter decreased to 71%, our lowest rates since the second quarter of 2009 has a blast furnace in Serbia that was idled during the second quarter in response to weak demand remain idled throughout the third quarter.Now before moving on to our Tubular segment, let me be clear that we are not satisfied with our poor financial results in Serbia, and we are evaluating all options to improve our situation. Our Tubular segment has best quarter since 2008, with income from operations of $134 million or $279 per ton. Demand for our tubular products remained firm throughout the quarter. Rig counts continue to increase as high liquids prices supported increased drilling activity. Shipments in the second quarter increased by more than 10% to 481,000 tons. The significant expansion in our Tubular margins was driven by increased price realizations for both seamless and welded products, as well as lower substrate costs for hot-rolled bands for our welded pipe facilities. Read the rest of this transcript for free on seekingalpha.com