United States Steel (X) 28 Jan 222021 Q4 Earnings call transcript

Good morning, everyone, and welcome to United States Steel Corporation's Fourth Quarter and Full Year 2021 Earnings Conference Call and Webcast.

As a reminder, this call is being recorded. I'll now hand the call over to Kevin Lewis, Vice President of Investor Relations and Corporate FP&A. Please go ahead.

Thank you, Tommy. you earnings our call. thank full quarter and XXXX year morning, for fourth joining and Good On of behalf U.S. Steel, I'd XXXX. happy and like to wish everyone a healthy

on and can Rich Vice today's and slides on U.S. Dave page President Breves; to the and me today's accompany and is prepared be morning, Vice Steel Joining for under Sustainability we Strategy Officer, slides call and Senior The Burritt; This Investor today's and President Events President Senior found Chief CFO, Fruehauf. call Christie remarks. Steel's U.S. the CEO, section. posted Presentations

start, some and as actual our SEC call are this remind of subject we future Before statements on described in results based I'll number you uncertainties are information provided that and and forward-looking materially. include that filings to during vary assumptions may certain a may risks

that as press U.S. today, as yesterday, in turn them update Steel undertake release will with statements call CEO, Burritt, we begin would I President the made who and we Forward-looking are Slide conference on remarks Dave to of like over now our actual X. unfold. issued to events to today, duty and the along no

the is Collectively, example record at are EBITDA XXXX our here It and our a for quality for pursuing thank earnings, record margin, achieving XXXX performance. of is performance an and you, our But free in this in of for Steel, flow business, this stakeholders part strong Thank EBITDA we and puts great across every year. XXXX, XXXX. U.S. just progress. safety, record Kevin, record joining year us exceptional beginning. us morning. record another on you, cash and reliability nearly record path everyone, was a and We best delivered

beyond. progress and continue XXXX in Our will

certainly remain is reason to market every positive. looking this we overwhelmingly negative year, about prospects the for for the be While,

we operations, of believe temporary. normal will expected, seasonally As this the mining the weak, just be our including but impacts first quarter is

continue pressures to demand correct, up and markets are macro we self demand will in the recipe the high, backdrop success optimistic ease, Supply remains the abate, inflationary is rates will on markets remain steel, This favorable. a will for we is and for remains accelerate. While saving sidelines that pent chain XXXX issues serve. cash

we after have, great risks, Clearly, We the We there. risks before. to the satisfied many but about it When and how up to where risk, you double pursuit, The risks. through Fed pursuit too geopolitical rates taking remain. were headed, constant seen all, we've you changes get cycle always challenges unexpected all a will prices. are know are we're know fast, best, and in never import place We restrictions, existential to know of be.

We and intensive. are steps capital necessary carbon less become the to taking

is that incredibly verdeX. our you steel advantages as further our have We to for additional of investments strategic XXXX fishing like solutions, offering sustainable fast line and objectives are know make to better differentiated our great deliver know your on remains decarbonization executing we continue to by stockholders. The not at us we U.S. facility U.S. capabilities, electrical we River our say, expect Big execute unlock future constructing through and line mill million sustainability will bright. $XXX including second for And get through-cycle are When as by move We lines EBITDA our And state-of-the-art through a responsible mill we steelmaking bigger line we coating not growing against execute, in capabilities will slower to returning capabilities. our customers going expand an XXXX to can't we steel because investments and and steel in while we to faster, anymore. to while great, future expanding path the Best Steel isn't Steel's mini solution of strategy This steel a same, the greenfield finishing this. grand enough. capital All company.

clearly but a story. this right? is know good, we think show-me Sounds We so,

to keep sustainably we steel gets accelerate toward will and all, further for best down, keep will we heads our remain Daimler's means. and what for award. stakeholders focused to after our it continuing best Sustainability about means recognition innovate path XXXX Big and It's we our earned efforts have because our re-imagine all River our also So for like how made progress. facility showing disciplined, more progress all continuing forward to And by all to continue best

in as Carnegie strategic in by Mellon new our announced an Just and University. beginning robotics leading this to example, Carnegie a find and artificial to ways we to forward to together look Pittsburgh, as We scale accelerate work supported partnership week, foundry, studio investment our industrial we and customers. partnership automation intelligence serve

Steel, U.S. increasing on products to Our are deepening solutions relationships, industry-leading partner them. seeing taking competitors pleased focus look long-term that's unique embracing regional transformation imagined. and our like-minded a partnerships and customers haven't We forward our are to innovation and build be that our place for create we on at to the constantly

capital and long-term through-cycle us For means earnings all All our we future. their for throughout mills investors, second enabling have that for means best Osceola, It We our increasing as Steel our to best jobs. Osceola future to our and mills, for-all customers. both means of continued home stockholders. strategy. believe the for for the integrated selected means earnings all our means mill And is improve invest community. power a the it history, of It a responsive returning employees meet mini for more to that best strength a rewarding for investments region, and future our continue that is are our we our means secure in for while newest have Steel for mini and our market in recent more future a in Best home needs the value to regions or U.S. best communities, U.S. XXXX, don't in yet Arkansas announcement commitment supported

announce own authorization. our continue and an So to to million pleased stock are back $XXX we buy incremental will

generating excess have stockholders. are cash, obligation We we an to reward and

As power I stakeholders we great, our isn't said best to and for all. continuing of the great U.S. show Steel, all forward look our this before, to

Let's On get into the we agenda today's for on this three going call, cover into Slide morning's Q&A. before call to heading X. are topics

time recapping XXXX will and strategic First, our milestones. we spend some performance

framework additional what them. aligned we context we with record Second, for showing time XXXX's means key priorities, third, will provide And definition allocation business. for has some spend all changed providing performance our why are confident. capital we on on and priorities our stakeholders best fundamentally our some will

is Safety best will always ambitious performance Steel and and towards on at steel our As record Environmental and X, and customer a environmental an financial our record example. XXXX is core goals. you progress and performance We Safety our the U.S. of delivered safety years. performance, as in continue be see carbon is result our XXXX direct Take on executing in at our in several safety reduction first strategy and operational Slide excellence principles. over of our past and and environmental our the and

in performance reliability when customers exceptional it our mattered deliver We also quality demonstrated XXXX. most for to and

and the quickly of in financial best moved market in remarkable stake EBITDA acquisition record We Big nearly delivered was remaining billion of River Steel $X.X as EBITDA gaining in performance boldly XX% also XXXX, the announce well-timed to River in earnings XXXX to momentum. us and acted the Steel, capture of We power allowed XXXX. the We our including acquisition Big margin.

Our flat Steel segments U.S. record roll delivered also performance. in Europe financial

to well be drive to continue another XXXX. Our what run integrated is year operations in impressive to expected

we Christie? context XXXX's XXXX, Christie to to financial performance. let Before over pivot it me to some record provide more on turn

and I'll morning, X. begin Dave, good you, everyone. Thank Slide on

mentioned, EBITDA the and ended year Dave financial billion a XX%. $X.X of over year an adjusted As quarter flow free billion, in of of record margin fourth billion performance. This was alone. cash of translated EBITDA $X record adjusted approximately XXXX including approximately with into the generation We $X.X

the tax levels share was Adjusted XXXX We a allowance. expect and non-cash quarter flow to our valuation year-end by significantly per cash $X.XX was generate to meaningful as well. EPS impacted free in true-up in of

Excluding EPS outperformed expectations this we adjusted like and revenue on just EBITDA. did on impact, we

XX% allowed beyond. in $X to us with This until strength. in repaying XXXX of financial type and performance allows year and The billion enter ending from of the transform our balance XXXX over in the balance performance over X.Xx on to remaining the XXXX leverage. manageable sheet by is sheet us debt strong Our with position debt a year

Our pension overfunded. are and OPEB plans

billion with future We our contributions balance of nearly cash billion also further have ending for including have over liquidity, of plan $X.X the cash. And we're sheet. derisked and no of the year strengthen to component mandatory foreseeable the $X a already

few and Before $XXX on I'll the over Rolled quarter Dave EBITDA a It XXXX $X nearly EBITDA billion an delivered margin the over on and we minutes EBITDA segment similar Mill EBITDA in of EBITDA in on segment, I fourth XX% fourth of and million Flat XX%, million XX%. margin quarter and fourth of industry-leading segment. XX%, $X.X Slide of record second an generated This and for plus performance billion margin. our and our alone, our over XX% was $X.X of expand to EBITDA a EBITDA respectively. EBITDA marked it hand respectively. EBITDA opportunities, margins. scenario $XXX X. of our we back XXXX to included In the The delivered In spend record quarter margin billion XXXX consecutive of and quarter Mini EBITDA

nearly for the EBITDA record was XX% posted also EBITDA XXXX. operations European margin. billion margin year $X.X EBITDA in Our or and EBITDA

$XX segment in our quarter. in million EBITDA fourth Lastly, including XXXX, of Tubular million nearly the $XX reported

the in to are approach it more and our capital to and allocation. disciplined meaningful financial back be to Dave, balanced contributor and leveraging where provide we context to XXXX. on Tubular continue trade to you to segment our XXXX can performance actions expect more a I'll new We turn

XXXX, demand At for Christie. remains very items good. remain that Slide bullish a its view. consumer of core, Thanks, point few our X highlights and support We just

As business higher negotiated to also new, the price and fixed averages. for Demand units easing fade in orders levels, increase with driving cash is my the increased full of auto to but pricing supply by to historical a the momentum. are Packaging potential chain remain stabilized times This in arbitrage demand. I X has demand production through. into at we positive and to spot continues appliance XXXX contract pressures there spot lot as and mentioned on increase sidelines prevented and rates consumer are with XXXX. success fixed chain significant is lead to ton carry in million the for expected uniquely elevated line saving issues Make are Also, in of Auto XXXX auto expectations. are had In import earlier begin on, shine normal have are year-over-year prices on America accelerate and North sitting U.S., as auto, supply order pent-up progresses. to or and is builds OEMs positions the demand has to consumer manufacturers the strong XXXX to run order with are year's we In is pricing, Xx equipment significantly at increased our improvement expected appliance OEM bullish first contracts is and book the activity price precursors production year. positioned appliances, fixed a On our expected in are output. issues us Europe, mistake, a for book. room to is these keeps This generated market month on Many Meanwhile, per last already where of is starting no close pricing And on original market be year store in uplift normalizing, market the pace steady. we been we're still expectations order believe with $X,XXX In and to serve materializing seasonality broad seeing was has supply higher record Tin XXXX indices in which chain significant the our In business. of auto book XXXX. recent activity price movement book and quarter. the these each resolved. in

support operations. expect and into natural on are by pace European We counts accelerate and Tubular, order our higher second to the single rig for have entries another increased, stronger oil strong quarter from In and accelerate year supported for will and is higher to expected driving proprietary increased our to products. higher gas demand Demand our OCTG in pricing and XXXX. is in EAF connections XXXX prices. earnings continue This

U.S. utilizes Greenbrier customer Southern the stronger, experience railcar resulting U.S. and is able of The Greenbrier create Norfolk their improve We Southern capable enhancing extend are Steel results and to in core seeing with for and Norfolk the with are each and are efficiency We sustainability latest gondola just useful and everything is the Steel, to life, recently proprietary product example. partnered of we to a a customer increase the railcar. innovation type tangible collaboration more that develop railcar. do. lighter XXXX. This Through solutions grades,

these We continuing are on XXXX. mutually in beneficial focused partnerships

has authorization. repurchased returns existing balance including This transformed announced already press buyback sheet is reason another our direct funds creates million and is been October strategy Today's is addition discussed, a of to we've for in new earnings under million fully a disciplined release, $XXX Our authorization in sheet strong Yesterday, our projects excited stock to approximately approach strategic program. balance to in we're our clear a foundation the $XXX for XXXX. capital announced to-date allocation, stockholders. XXXX balanced we $XXX to the execution and which path existing million

We we trading when significant is repurchase own a to it what continue discount. at will especially stock, our believe is

detail capital enhanced I will Before allocation an our quarter outlook performance. our on provide first Christie priorities,

Thanks, Dave.

pace strong outlines XX Slide are key first performance. on the first some to quarter. for deliver performance quarter We in considerations another

versus report Our shipments and contracts selling increased is the expected from reset Flat-Rolled prices higher to fourth segment quarter. annual

own you seasonality more natural coal only operations March. from to to gas higher Recall, know, on steel limits the impact the mine the year, ship lots our pellets with first customers. closed This through of also will ship each Great to quarter, As which and than Lakes costs, commercial third-party will end the the but offset ability our mid-January not tailwinds. to along the of

Given shifting fully U.S. increasing more pricing mining selling the average of in our price. levels. a of as reflected iron be seasonal coil operations increased our from the presence hot-rolled our segment, our seller merchant ore, historical the Mini have In impacts will dynamic in Mill

imports volumes increased segment. a Flat-Rolled steel Last We more year, expect temporarily of lower due hot-rolled coil to over XX% than high. U.S. to our product mix sheet six-year

be are and their Fairfield similar scrap while market as surges quarter, quarter, prices and steel we In will In material costs our likely fourth impact on volumes imports to are and monitor expected reflected raw to as been to continued and energy costs lower well operations. the Europe, This of low-priced performance EAF. headwinds. increasingly Tubular, on in higher our for our prices the be

in As a result, we back Dave, the expect Tubular's EBITDA to first quarter. improve you to again

Christie. Thanks,

With priorities definition XX. our reduce will allocation to want business reinforce stockholder our believe we returns important capital to the some we've around talked strategy value. power lot our Today, year, our have direct our passing continued a and intensity carbon framework create I enhance our and improve to past that and sheet, advanced quarter, best and transformed capability the and sustainability-related through-cycle the more projects towards Over about announced progress provide for messages each Slide on long-term balance strategic critical an and all we stockholders. framework earnings capital future. and A

ambition clear will the framework execution major coming our to the the and this priorities should provides developed use principles we have strategy. achieving and to As strategic we you. familiar theme disciplined over we've be discussed our The requires morning, years

We will sheet. balance maintain strong a

We will we invest exceptionally well. as continues become business return to bigger, to capabilities, not but better, become stockholders will in capital the perform to to and

in framework detail. more our allocation Let's each component of discuss capital

our First, strategy. foundational to we consider success be a strong to balance the sheet of

we've pleased ratings. We our our profile, reduce credit costs are service our improve extend progress our debt made lower and debt, with maturity the significant to

and strategy, improved this made progress our the of on capability through-cycle Mini As that our already we've X.Xx. Xx support Mill debt-to-EBITDA model, earnings to performance business and a are the to total integrated delever the we continue of through-cycle we power balance mid-cycle to Based more are we target. metric sheet targeting execute our leverage confident than

We more will capital opportunities and evaluate optimize to modest repay debt continue to our structure. near-term

investments and to to excellence is the executing strategy, the record-setting advancing and fund a consistency that of our customers which flow. strength, us. is through earned and believe we a position the earnings our of is cash commercial that and we've of cash flow position valuable U.S. a use from our tremendously EBITDA Second, is demand It free free increase cash that announced our our transform will highest and profile Steel value-added position is catalyst performance. operational a from

be and we As towards protect we cash will existing transition our steel will number are non-grain-oriented of allocation than This strategy. electrical cash by will the to free and at galvanizing and Mini our by accelerate funded our capability maintaining balanced best investments CapEx. a XX-month strategic strategic while all, in for ability less investments position cash successful that fully Big disciplined no preserving a we the our maintain ensure next River flow Steel execution Mill capital and two making

would as further evaluate best our expect, you all transition. for investment Third, to strategic we continue will opportunities to

seek to may of on of the As the requirements pursue focus the our are lower sustaining sharpening we business, in we the projects types capital we future.

with has announce all this There of mill best ahead iron at expanding focus us, budget, something completing to schedule ore, best-in-class steelmaking announced and and For highly no River returns starts capable as of XX%. on for least the our additional of under capability low-cost our by by and delivering demonstrated time advantages: returning Big our projects doing. they is competitive Steel our focus team fishing are are investments at mini capabilities enhancing on and

cash allocation framework $X.XX per direct announce we as dividend, stockholder successfully quarterly commitment is direct our for deliver participation opportunistic to priority Lastly, returning stock is in buybacks. and first a quarterly Last distributions. for our restored quarter, our strategy. maintain an capital through supplement share and excess to we returns for important allows returns measured investors our plan policy. that to We of This by our component capital pleased dividend dividend to were

has I of As incremental and repurchase to $XXX program am mentioned pleased million. a earlier, that our Board new say authorized

capital Our to best how creating a compelling framework proposition that stockholder for we believe on will clear, the approach provides allocation All value. more pretty and and and and balances disciplined to creation With strength, proposition, our advance increasing competitive improving let's advance holds. all where we cash our that delivers we stockholders. through today capital to future sustainably framework investor I'm what described has future even our financial We by value are free distributing for advantages cycle about our earnings power, strategy and never that, definition today investments been our long-term believe Best pumped Q&A. up flow our a get

Thank that you question. and question to a questions? one you you, ask Operator, has a yourself Dave. please queue opportunity everyone line follow-up, the so can the each ask for We limit to please

And question on get ahead. first from David Capital line Instructions] BMO Markets. right we'll [Operator the our Go Gagliano,

did I Okay. you to commentary. taking question. Great. little clarify for just bit Thank want on my near-term the a

missed of I commentary. think the some I

So expand flat-rolled little price up in can up, I mill is the firewall, mini the on then a volumes side, the was iron also volumes because at think, by you up? confused little a prices bit I And on ore. but offset,

more you talk that So things more about little a in why just mini if roll expect can side, little harder on detail you business. then the And again, bit could about on mill little to talk a A you that.

in David. There's a lot that,

I bullish some and noise. Am assuming, we because first strong near-term I there the where you, that's in where in and demand has commentary term near the right interested been tell remain for XXXX we are where headed asking you're continues. what on think I you're we're quarter can in because

of feel believe cycle. short So don't we anything a to we remain the super we're the term. overreacting fundamentals and They still in intact,

let that into some think on just a So I provide But run. it's a the here. The is question on I before expand because you me got a context kind bit important to some think specifics. of good of steel industry quite getting

of I come. what is in performance best last year. second forget represented how about, billion QX half of QX and So We're XXXX it's talking the all-time EBITDA to it, we've easy, just for far business. the $X think, generated

the will than similarly and the a takes of seasonal segment and place $XXX think down are our So supplier to surprise American this But to needs said flat has quarter. that represent perform And We of I of But reverse they're shouldn't Historically, from QX. forget volumes our could the for plus operations, million in But merchant million, of contract fully million impacts through pellet do That's the generation. subsequent QX. XXXX obviously and frankly, decade as North that this everybody to we highest headwinds we expect with like as past sure. the of to have modest a be in year. significant you presence Steel mining flow from $XXX quarter expect the with There be our adjust to another significant cash our in fourth be to and see mining for become EBITDA remember we've quarter, free rest something this increased. more we step and EBITDA ranged folks but frankly these maybe more XXXX. couple about things offset for quarter and operations, in and $XX headwind increasingly there's to seasonal firm mining related QX U.S. first material a puts the anyone. once third But impacts rolled. expect quarters

participate within demand. Mill we our most Now the And you these forget. seasonal segment satisfy mentioned order we're term impacts NGL exposure, with benefit the business But that are noting River over a their what speak not also the hot-rolled incremental they line and most to that which the capability. with we Big nimbly let's in and we galvanizing possible. to Mini see in coil are as expect Mill operations our doing the demand as this And positioned it's mix business an we're are be has book enhance way the seeing optimizing a is profitable we investment more can past we And on our segment. segment, well worth and value-added the to the way In as to further the been in and inevitable snapback. while navigating year. impacted Mini as for them quarter, huge near in heavily

best the expect the some Europe they're contribution efficient the and in Big change right. in didn't segments, material be And QX on we to operation, be cost-effective is continue in headwinds. energy competitive. a to for doubt And we no down an mentioned we have do think we're and running but Christie arc operating their the modest this is bit one in history. look And put is EBITDA we since furnace to extremely don't higher highly into to profile down, I then quarters friend X QX. maybe trend step business for the good. you So margin or primarily with from of do remarks, and in our segment and a is a seeing quarter-over-quarter, and then again, the material should to will and mention QX, River expect in gigabits momentum benefit cost her in be energy that the raw Europe and than But electric expect sector the our expect very the covering first well, and place quarter usually little we

near-term interest strongly. and this it in we certainly back believe be softness coming while seasonal noise, will it we're the back quarter, things So appreciate we coming back, developing, softness, against next but not be business coming the the how now, are running will for but

very helpful. Okay. That's

of some comments. those on follow-up quick a Just

sold trying spot? on is contract versus of much the the through Obviously, Just first and a following sense the get be in as just volume the expected between spot and side. to I'm flat-rolled first quarter. in contract how to quarter there's mix to under a

is Kevin. this David, Yes,

little break I probably the as supply percentages exposure here become those second each the markets auto say meaningful them the benefit more in the continue chain packaging you'll would kind second subsequent expect shipments. we the that in our accelerate the in index appliance So the entry that to chain first first in to I beyond, so see first and and see even and Can quarter very quarter, bit particularly quarter. as autos XXXX. reset itself continue the we will more it's remains half it quarter issues quarter accelerate manifesting of you should and like to ease, a disruptions, certainly year. think But of through supply the spot strong? order So automotive through of

proceed We'll on the Sachs. right Goldman question ahead. Emily line line you. our Thank next from with with Go of Chieng

the -- morning, Thanks seeing for question discussions the fixed and are around David there. any now, finished Good you Maybe my today. Have the around magnitude able provide resetting. the price is first of Christine. that that contract update what's color last or you uplift to you're

Yes.

and how We for negotiated contracts fixed-price reset we tremendously So feel those were we our annual we completed. successfully of are contracts those the successful -- at that beginning the the Emily, year, been year. like have all

successful as we call, to for negotiations. result than prices earlier We on XXXX selling our continue mentioned North higher an a American average as flat-rolled to XXXX expect, the reset in of

appliance related there we've we're right? So, in is auto the more meaningful year-over-year contracts, I would say, value potential upside to in all year-over-year, the April. products, uplifts products, confident fixed-price in Tin products, that even locked if additional anything, seeing

We have some negotiating year-over-year yet now offer, auto midst contracts another some to create uplifts. due that other fixed the those in price coming And are opportunity offer our customers. we with as on of

So, our with talking are as we you've deepening customers. relationships us about, our head

with that have the we market partnership to find we customers, ourselves combined strong price really allowing and with the our deepening are us contracts. be and is We successful fixed on

but where really packaging, are pleased the it's of conviction. book think I bit know auto with the we appliance I repeat, stronger a and see XXXX. So a for it's And the for we

much and were ourselves add of where I you to have But, Christie, over lot prices You the on we find look here? at at do position lower the negotiated a level. these a clearly contracts contracts. ago, kind were such something a year some where we guess, in better

covered Kevin it. think I

Okay.

Steel. River around question Thanks. And volume the Big just for second my is outlook

year company utilization guidance, full to rates consistently? of sub, opportunity XX%. plus out within that a that maybe maybe XX% that get of Is little sort XXXX provided an the looks even range a You shipments like little impact higher there below backing

Yes.

think I Big XX% River. utilization a about of way utilization, Emily, to right is think

I Mill across look pointed that But guidance shipments. Mini external third-party to think that push possible. the XXXX gave certainly as shipment customer rightfully higher We extent full this for that's out, we pretty operations. you consistent is year to

River the flat-rolled high-quality and So, line our that of to Big capabilities. acquisition keep serve North substrate you leveraging melt to some synergies finishing their of the have in mind was their American

So of third-party be in there shipments. movement wouldn't is reflected that intersegment materials those

River So, at within we footprint. about of quarter, how seasonally Big But that as Obviously, are be year mentioned, River. highest level prospects we based pretty the the and including the full going the for we fits we is entire it operations, on our order Big the can first to book we have utilization good weak. running feel

Yes.

XXXX I think record the River level. highlight important in third-party expect that and do XXXX shipments, Big to punctuate volumes it's that to we believe or temporary, we Steel because

And So we right as everybody is through we're Big remain River. think, again, some sorting bullish with seasonality, now. I

Exane the ahead. on now Rosenfeld Seth We'll next BNP. the from with right question with line our of line proceed Go

questions, please. two ask can I If

prices will First, I of rise despite believe cost that side. you in I sharp the In through in carbon there the the Can us you costs a walk spot decrease carbon that in credit flagged XXXX. market in drivers Europe, on guess, Europe? the your be in

don't that one? take you Christie, Yes. why

we have of things the that of year. carbon a a costs. the this It's because are last higher Okay. couple affecting free level ran we One, that at production year allocation different

also, buying So also free in credits and impacted and allocation, been I'm allocation, a out COX offset, advance have And we that's admissions. and we hedging COX also -- freer also sorry. carbon costs, average our so lower the have going cost, significant the has we

that's impacting overall So, costs. also the COX

price Okay. North the Any procurement? on expect or touch scale cost over can for coal ton in could annual you or the outlook for then sense of you in your And year-over-year contracts? call pressure per America, the increase

have same we we to because capability. of because coal comment can And and can then a our lower blending Yes, this acquire we've of but price like ability the position Yes, seen coal. the of strong We that. are increases very I year, on extreme hit market. properties, blend coals in coal coals feel our

what those consider And believe is more. short-term and a We together, sourcing pricing all about or advantaged, mixture a a things of be long-term through of versus we also of XXX% increase have to our contracts. market increase we optimal XX%

now our we'll right Michael Glick next of the Go with line the proceed with JPMorgan. line from question on ahead. And

you financial the the working moving think capital potential Just during should And speak the in to through XQ asset year? year? on the how could we for about side, sales and

on So working I'm happy start capital. to

I the capital think in a being of full expect modest working the be cash year capital maybe would of year source for of full first with cash working quarter, modest source a we well. as to kind

about any and think working to Rich tailwind throughout the I opportunities. beginning quarter. So, year it capital asset And I'll in over course a to the first will talk non-core cash Dave flow maybe to hand divestiture be of the

making cash same cycle, That mean, a continue cycle. and week on time spend the conversion we there's to there, Christie with of sure bunch Yes. our have team leading every point cash I conversion

this year. as far had we the recall, sales, as you as we've last -- Now, Transtar non-core asset

We whole could to us And of look we that Rich, have update? if a from at time things time. give you portfolio an

Yes. Dave. Thanks,

I'll do real said, that Best looking for whether continually into are and any non-core not assets, other and at. at looking Dave there the we do have strategy. we we're fit always as estate specifics, are not see they do to those but within processes get All So obviously, or

As not would is And assets. think what for at time afraid say to We get when I right sense. it our all the I say, is sale the of everything transact for price. we're inquiries makes some we

As Dave the Industrial telco option announced ore. estate the past fourth we've the We said couple over the our of years, We did Minnesota deals in complex, with transaction. real Keystone Transtar. done

going a forward I just look on regular basis. at think should And so, continue those of you opportunities to that assume kinds we

more on on you've seen then to weeks what I end automotive demand, on side? love in side, recent top on And noise the color the but get near-term would the get just

so I think, talked low. we as inventories when. just are are optimism not auto unfulfilled inquiries and a the folks' people I Obviously, ahead. The wanting for -- -- just a savings it's the amazing thing rate. I automotive mean that we more it's there's been And money side, have folks in it's is it's mean, go issues our there they supply report while. demand. math, there's cars, I'd about we as and if with the say, buy to Well, chain got lot pockets on But the that more that's a of

Fed things again, to around it's I about with where these rate So, mean first increases. right think these in now all softness we're of the going I quarter, encouraged risks, the back. and the are come we but kind swirling

because for just of is We are weren't And they what's here. right? noise. ago we're going it's have long they wasn't times. things XXXX, going where that take to that what what Fed say on said until It and rare to they're the remember that rates being some four to sure they ends now going in the these One thing happens up is are nimble watch up

here participate with the like that So I of and the it's think that. won't And guys being if, up mean, so not -- some auto those and chips the But again, supply it's depends is probably but we'll on in that it a greatly when, we're demand it's things of matter strong while their -- optimistic. are a cleaning that, again, completed chain. actions I be lot are taken.

the Blunden question line from We right of on get to Karl Goldman our Sachs. next ahead. Go

from forward, assumptions Where for the Xx was price thoughts think leverage that to that is, in in your you X.Xx interested it cycles. allocation when prior about that target? EBITDA we how bake you think, the on I'm going than and I target. arrived the provided capital you Just in floor you've Interested that should coming higher your any at significantly in that's made, around here steel improvements asset updates

for more a any make business you thoughts that potentially the implies depth as bit So this in transition? there? interested Just

the Well, thanks for question.

about how can certainty lot time to put more this. provide a to and in you stockholders thinking through of we As we're better thinking reward how as imagine, this

which whole very look think But cycle, as at and rating hone prices the a get, -- think whole important things. on don't you you personally basis, average the all -- last from to the through at through study that on this. modeling. leverage cycle help that one, a longer the But about host do for lines discussion. we in through steel of was banks $XXX. we while capital we ask, one we the agencies, there's course, it's on -- to something allocation that of us and like how going are X.X and of things to So, in a research X these a each these right? to other number optimism we in some I into conservative conservative go get we we lot looked an we low a our of folks a ratio to could with business, reasons And through cyclical have goes way as so do of Because flows try manage look the that input

us the forward. can don't Galballoon have Best to the this as at when is on get are, then that identified, see full X, we think level look obligation we're that the to to And have there's sheet, stockholders. raise those pick about if [ph], where investments to We're that all return good far to is to debt. we else already then making XX%. get is. we go on down the NGO, the other things cycle. ready So That's anything money as talk or a confident But with We we strategy opportunities through those that balance a that's are we with flush And Mill to those. for additional for and and when you $XXX going identified, announce strength that choose we we're heads and Mini obligation as All get you're at we've the of million cash and and additional the executing through

buying to through down We think should that see And spending resonate to you more to to people are and be analysis guys you time So have able Kevin, this. that and lot there's tried that we all modeling do we're a simplest that went hope do its as also a stockholders lot rewarding our more. add? it on something with shares. of the folks your we you condense that form

the and on Carl up in opportunities question the only I follow I debt. further near there's add, to think to Dave, your probably term, is, some thing think repay I would

debt that, chip some To it As away we're within not we on mentioned, focused look horizon. going in annual there's structure Big can obviously, an capital on something your really do we'll term you in River the sense. at about near any way as execution debt, material makes that increasing as And to point to Dave know, the basis. throughout be the

to XXXX, $XXX though, three the of particularly like be generate at make do to projects incremental strength throughout you've in the that to or in Those million that's any extent able deliver so not been financing pursuing, cycle strategic worked we maintain in But certainly XXXX. months. project-specific us sheet the that EBITDA and ramping that may the strength XX that look do to is long-dated from could we're sense. the complementary As want to build balance we've XXXX will last seen goal beginning the past, to the of hard we've over cost the projects we

of good Still on very you Big the at about made mill additional because at higher my will, you some terms bonds your floor you financing for Kevin, have helpful if anticipated case follow-up steel in there. River the noted, you do and price really well preferential,

to Wolf get Tanners Go right Timna from our on next the ahead. with We'll line question Research.

I X last the X.X% I old know end to high a could my you around wanted as first guiding to and of X.X notes I million this be ask seemed Europe. capacity. did question had light. year little about in and stated tons

that to So, realization? on I $XX Or of like that. color wondering that cost. in purchased favorable the credit then was understand some in change for year? the is Is COX lumpy terms And million through

any can just utilization of USSK integrated throughout you a credit for particularly about cost, the of maybe as lumpy range, it no is tons $X kind million year, rate of assume why But spread on capacity. probably stated it'd the bit facility, think X the USSK. the be an in quarter. capacity reason given on know, I at in targeted XX% mean, particular at like I out of higher little the is kind nameplate think you somewhere million kind

and XXXX, there January. are So continue an any be I shipment the volume. and strong really complete in month We to shipments we so in think demand feel quite no of to going like be did that for strong to outage reason difference

down shipments So near weigh the a bit term. in that could

little the thinking said then about my the is first because the lower prices. quarter. versus commercially a But are the even And you than second fourth the quarter just to question quarter didn't Okay. fourth still prices face had light volumes in were lower they you I know were that want quarter. fourth

in like lower think should of prices current we thing? flat-rolled our steel we light shipments that you market about the I'm and help trying relative do first the understand So think complete about volumes volumes? how will how conditions than destocking think just Or is quarter to that to do already quarter-over-quarter

we Yes, in flat-rolled I could in than then segment think we Tubular. take in a slightly relatively in Europe shipments flat down modest to and the with up volumes I being would our expect quarter-over-quarter American Mill see maybe Mini the and But first North quarter step think higher see fourth.

we think accelerate can, guidance sheet I market, expect the the to quarter full shipments and So, year domestic for then our we to get we're to navigating targets. the do second best in

call Burritt, Now, Dave will closing CEO, Steel's U.S. the I remarks. turn to back now for

morning. Thank call for joining you this this

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Thank thank a everyone. you much. does for call day, good that conclude Have participation. We the of rest for today. the you your And very