Cleveland-Cliffs (CLF) 14 Feb 222022 Q4 Earnings call transcript

Good morning, ladies and gentlemen. My name is Maria, and I am your conference facilitator today. I would like to welcome everyone to Cleveland-Cliffs Full Year and Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].

The company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking within the safe harbor protection of the Private Securities Litigation Reform Act of 1995.

to that statements statements and are could actual believes reasonable based uncertainties company cause such assumptions, subject results the its are forward-looking on that Although materially. differ to risks in with could website. that the XX-Q, differ set XX-K results Important which reports releases are factors Forms filed cause on news company's SEC, materially to are forth the and on and available

archived is call, clevelandcliffs.com. call conference be the At it also the conclusion of being available at Today's and available broadcast the will for on website and replay.

Regulation certain The purposes company results the published discuss found will was earnings be also special yesterday. excluding items. release, which Reconciliation for can in G

ahead, introduce At Goncalves, Financial President Executive sir. this Vice go Chief I time, like to Celso and Please would Officer.

to priority, that repayment. billion. joining XXXX our improvement for most cash the standpoint, company debt and eliminated XXXX the majority significant in the Maria, a Thank the our said, we $X.X derisking is reductions. free this us I liabilities remain and was obligation top for we and billion of thanks second $XX will you, exceeded were since the flow OPEB toward financial sheet, one each our balance was EBITDA balance free by $X.X paydown clear where over dramatic day in we in and accomplishment billion debt consistent of pension From $X in to via by and of morning. milestone been my deploying revenues have Cleveland-Cliffs, history, XXXX. billion flow celebrated year highest and XXXth of cash profitability only adjusted That record this generating everyone sheet

to year-over-year. average testament increased index spent revenues was We $XXX have a with the contracts which, Cliffs XXXX. strengthened record and reinvesting This price in ton ton our and an the to XXXX in negotiated, around facilities, dropping by only XXXX, in the despite which, capital into almost $XXX the operating driver price we primary our steel pressures, majority by per uptick fixed along selling led way, of the of In hot-rolled inflationary prices per costs. for improvements

significantly expect certain see With these inflationary meaningful easing cost now to us, XXXX, forward. we behind reductions and pressures in going initiatives

operating evident indicate, We are as cost already our lower and the than at more in cost much continued more report COGS will what quarters. we decreases recent coming be which would sequential

EBITDA we of which XXXX, of of QX, our achieved guidance, is In with reduction adjusted we steel back of going forward. pricing of which unit million, in target the environment year. $XXX last quarter index the quarterly we our in partially offset in fourth believe the the lower per EBITDA sold Consistent adjusted half generated to trough ton $XX helped cost

our in we declined a shares debt tons buy real-time the $XX another used in second for cash free a quarter, standpoint, shipped and a the down During be that would commentary $XXX us Consistent we source of to our pay strategy, X of of this about million costs with cash to us back $XXX million as share. million $XX year. ongoing half deployed the at capital EBITDA giving quarter, prior of our we shipment X.X cash flow quarter steel, working a best million, in over than million meaningful our Xx From more affirming the generated year.

Looking level million-ton the should demand. rise ahead XXXX, improved on X our to the shipments first visibly of to quarter

volumes; to; and normalized cost unit per energy our repair two, higher maintenance ton three, costs; addition, lower net production $XX and one, another In levels. decline should due

lower-priced contracts, mitigate impact. deals CRU help index improved impacted discounts to Our some QX this surcharges, selling spot-based higher price on will fixed-price will lower by our on but be contracts and lags

decline price driving in is first QX. the decline margin compared quarter than accretion selling the average unit to costs, less in Overall, expected to be

that, generating second EBITDA the much considerable quarter expect prices and improvement fall further to cost higher, accelerate into to QX. a Beyond we from continue to QX to

So QX than be should to QX than be QX. far and should significantly QX higher we be EBITDA EBITDA as higher can as see, clear,

at expect million As noted we related million an XXXX to improvement approximately but our reduction natural a steelmaking $XXX to offset inputs. in $X of million idle higher to further in a in normalized be cost levels, an our at related today's volumes. and in by compared reduction do quantify and in $XXX billion alloy We and certain To that will on components provide supplies decline hedges, costs maintenance today's year-over-year a coal by costs, a $XXX other million $XXX expect production cost to scrap release, that $X improvement a expect cost, we uptick decline $XXX XXXX, volumes, in decrease costs and million gas coke likely for billion, curve. costs including in context today's based curve, and

spent meaningful Last take should XXXX, XXXX. an reline of the blast and had expected $XXX maintenance Our million furnace. to we of the to catch-up capital a million related down also year, $XXX #X step expenditures we in range compared in to $XXX with our million Cleveland spending

upgrade margin only IT modernize projects which being our at highest We million are CapEx, a closer our sustaining and to an stainless will highest one bright line level products. the of above now running production a and of priced of our anneal new facility, trim, major the Coshocton with $XX

expect of which from we $XXX XXXX, million by pension relief a years, mandatory some to related these see are in is portion over $X.X to billion our released. two credits liabilities million and OPEB letters of last cash decline to which contributions $XXX XXXX related as liquidity neutral With the on will in also reduced plans, we

in our outlook, Under current expect of drive source cash. an to reductions further we working capital additional

by million, half expect also year. the around Federal evenly quarter. And first a tax SG&A XXXX the split million $XXX of in in be cash expense We should our refund of $XXX

weather cash fewer flow with fundamentals price while we lower costs are healthy even better a with year, business obligations, we half much contracts. fixed With along further lower cash back this generator. of through to the prices, volatility improving and In position benefit were an better remaining to able and in XXXX, market

I'll that, for remarks. his it With to turn Lourenco over

Thank we and are good before to that mainly, what not call could The the That's things flat-rolled latest executed in have synergies of or morning, you, exactly through the others. We largest empire value before ones our obvious also, renegotiations. from situations company. transformation everyone. we but in anyone as so price do so create done synergies, to value such by only demonstrated explored actually of XXXX, just are fixed we acquisitions ones real identified not not identify, Celso, unlock the an these the or round build ourselves actually that obvious, never but can contract and steel never

on automotive For carbon hot $X,XXX and ton the XXXX, average full consisted coated per was mix year of our steel net contracts price XX% steel rolled. about for cold-rolled about that XX% weighted XX% our a realized products,

the clients. much nonautomotive products, For years, than end the to two those users service the and of center of service the executed on technically customer sales on margins margins challenging with intensive automotive less sales less our past majority obtained and were lower

the our XXXX, company service situation of by Entering our this at The been has deepest industry ability is automotive to fixed core. Cleveland-Cliffs.

Our their anticipate us needs. team's knowledge of effectively automotive clients to enables

with the all our of have record proven the consistent the in Even during clients a true have of sector supply chain disruptions, of past years. performance. We automotive couple track been

from During to disruption Cleveland-Cliffs. a had that caused time, had but steel single of clients the things, by a lot about worry they never

automatic. there, always was steel The

tons We steel at sales. and over X of sector, why are good that, including to That's over the automotive of the know clients X tons tons X direct million million we and are. million of Cleveland-Cliffs supplies indirect sales

be these do. Cleveland-Cliffs to deserves for paid what we reasons, For all

replacing buy steel be their From another intriguing, standpoint, the might is particularly two than so when share Cliffs market and will at The steel better. eager selling cheaper supplier around, companies steel Cliffs promise or cheap that, offers automotive this by look company does. to well known. performance time buyer's script steel are A mill one with

front It save disaster. dollars always like recipe almost make hero look per bosses, in some buyer his her that's ton may the a of spreadsheet paper, on However, a and for or of on steel and not it's specification, assembly at always a time in, the sinks ugly. line, does for when time. match arrive period then And not limit reality does or but

Well, in value. in in gap reconciling made progress the late XXXX, we some

not However, underlying view, strong to was only particularly we the the price in last outside XXXX was That that new cycle this was the investors, approach renegotiating market. became until achieved from that fully apparent. case, business price Cleveland-Cliffs it the of but because overall not the towards the increases

our time able automotive little period, flat rolled steel pricing to environment decent XX% without increases achieve on an one commodity sales in over sacrificing in were we year volume. So where contracts a decreased

in to XXXX actually the sales expecting higher are than XXXX. sector in We volume automotive

needs. direct that, that with still customers per for increase year, unique one-stop the for can the significant, we how net ton, selling volumes with value $X,XXX majority net BOF from We steel of $XXX standards price stringent With year expect meet our increase of of per automotive a we solid inflation. XXXX full and recognize only our million our typical quality basically ton in service based vast the market, of shop our blast customer flat-rolled end modest past carbon flat-rolled business, X their they to Also, tons provide, our furnace the advantage largest line to all year-over-year. enjoy our consider capabilities per and price but steel increase, most

route. the to is Differently in other technological from steel committed BOF every fully United Cleveland-Cliffs company the furnace's blast States,

they massive sophisticated transition supplier scrap automotive the major furnaces others. actually highly particularly China, flat-rolled with to highly such steel EAFs, South Germany, or have and of such and as BOFs. of, we the Korea, generate from Our are automotive countries furnaces These rely the a presence of blast of a a significant BOFs. relies to pellets parts, EAFs alone. specified products, materials, country use And for and ore France even iron import of Every still lot amounts not Japan, presence not carbon blast certainly on do feed in countries in as currently producer world, automotive. dictates these as but of not And manufacturing, largest all center on do automotive-grade and exposed

need need also beyond steel not their automotive BOFs. that's the furnaces they The domestic more the already reason X we why case invest blast and EAFs, and to Cleveland-Cliffs is to got in I United the plan to, That's States, own lot that, supply our you've a picture. EAFs but here In operate. clients, in simple. There's does believe new does their not and to to order

low low the In automotive cars the XXXX. backlog, steel on age consuming sector unemployment still improved of of lots is road, and inventory exciting our production their now view particularly at most have supply rate of chains. the performance in when levels the coming years, to current economic to sales continue growth landscape, point the dealer the automotive the for finally and current The consumer the over they the

nearly this momentum expect Our its January was year, to continue shipment auto best we a steel rate XXXX. and in throughout

a on to we all November, availability first in have taken the capitalized helped automotive pricing the positive market forward, scrap fair for which to steel Going the finally reduced demand to what now our both service moved which inflection an broader Back has higher. note behavior the as clients and to our center price announced the in direction. our of This for is and auto to in market. We increases, our prices has X obtain and committed in begun buying overall this also of we pricing remain market, in started point in automotive sell support sector. nonautomotive hold to continuing the businesses increased we improvement

the in While have a where have for to business, prices general, we dumped achieve flat area have tariffs due a XXXX, imports become not major and in significantly tinplate our about in place, and we of roll of unfairly-traded is a one which steel, would our us problem fair have duties subsidized tinplate dramatic issue imports been in negotiation undermine XXX,XXX contract tin year clients. per tons mill surge with imports sales which otherwise for we seen Cleveland-Cliffs. products, Since of our the represents

X countries in We the have allow bad practices. food price We fully become critical market a United trade imports. cannot supply with States here this piece trade cases dependent against distorted of our recently on to have who chain the filed

union our partners, filed We have alongside this case Steelworkers. trade United the

situation grateful on to is the our fixed. everything properly fight are this the have power make trade laws are and with sure us, We will USW in and to we U.S. taking respected, do

is however, products, for good. The other our outlook very specialty

by We modernize it led electrical profit XXXX, highest AK its Steel's steel as This strong driven primarily expect steels, business that in high grid XXXX, was our electro when is will products the center. XX-year since main electrical ongoing to post demand. back GOES, profitability to efforts have grain-oriented

we now serve have and our investments into Zanesville, achieve on our able facilities XXXX. even were we past Butler, the Ohio increases year, put these capacity over With have We to clients. PA the for price also unprecedented products more to

multiyear XXXX steels, to electrical and backlogs the demand and Investments steel our by assets the our the and be solid for Jobs electrical in profitability additional created beyond. should Act, Given contributors Infrastructure

Finally, XXXX progress of was goals. side, environmental on carbon reduction towards year the emission our another achieving

a that that's We on primarily we footprint based. less are believers firm deliver targets XXXX aggressive with furnace will our

our of plant. our in Harbor, We the are largest full-scale at pleased carbon steel with made capture have Burns we progress study

on As this generate carbon project the U.S. the we it based IRR. offered unit now, sequestered, a incentives should government look has of at meaningful per

hydrogen use increase our use furnaces. the and We Lakes hydrogen also a industry the Hydrogen in itself. on hub production will already depend throughout our partners, of direct the but Midwest entire transition the the low-carbon academic broader or mainly some effort use its hydrogen informing joined in have center. facilitate ability into we is There leading Great footprint, availability in GLCH, replacing hydrogen blast this, to fuel-based economic our that with coordinated operations, [indiscernible], a reduction fuel plant to Coalition, the To we like processes the Clean in fossil and energy substantially particularly of in use

of HBI Cleveland-Cliffs blast has use implemented in the successfully furnaces.

iron Now hydrogen steel scale. full the in the first becoming to oxides to industry look as we world a to forward company in clean utilize a reductant

about To two what have last proud for we be ahead. the wrap up, have more at even we excited a and to accomplished Cleveland-Cliffs looking in of lot years to be

the We like a broken commodity. have from free be paradigm priced that automotive old harmful steel should

past the Our and balance will it improvement sheet only from remarkable, over better get year is here.

of costs backlog time capital of been on Our down, the and the are Prices trend. acquisitions the upward of. care has our from are needs taking

to fourth forward bring With that XXXX behind EBITDA the will we Cleveland-Cliffs. trough success to the us, look quarter

for With that, I'll operator questions. it turn over to the

[Operator Instructions] first comes Sachs. Chieng question Our Emily with Goldman from

My around expectations first the year. for question full is shipment

that perhaps do perhaps break perspective demand a need So XX-million-ton to I to expectation that down underlying think, in production from number? put you you're end for underpins So the from seeing if could as assumption well? XXXX. automotive What see press other out release, a end you market, that you to what shipments and hit that and your markets

are X of in base. QX, quarter tons And million already tons. we're XX the per We million ahead anticipating

were constraint million can not are main We is confident very we this simple. XX we we're fixing equipment. So only achieve, number we that confident but are beat the tons. that The year production is reason last

ton. our less, are a We per producing deleterious that in impact and has cost

get remarks, we thing at are automotive very I Like first year we XX prepared said automotive. X tons others, centers, tons is through million X in direct can that. said, X million? a sales you million of mean like tons provider least how things forward, million my processors, I the service steel, the a Going through and Well,

even believe will cars. number based building the that automotive we on be a -- sector in this from expectation higher higher So achieved

on bit the little a probably is number this So conservative side.

of the rest the levels last to only that slightly is we likely less to or is number, better. automotive need the performed For it we because year perform

tons is the long short, think story that don't any XX So I million stretch.

good shape get to there. in are We

do and but in the component a also a opportunistic balancing of this you allocation maybe Or of time Is Great. Thank piece? some capital dividend on so the about there think the just strategy part the question, become more you, for, your still Lourenco. returns the how deleveraging focusing My we Celso, may point capital bigger where buybacks and point? discussion? are at deleveraging second

remain it, consistent. have past executed we some over Yes, question. what reduction. call allocated going we're the debt toward going share that's to look flow mean for of going we've continue what doing you thanks we're cash the few buybacks. done quarters, well-timed if But we've the And Hale, to Yes. at I opportunistic forward. majority,

feel the in deploy to we can cash reduction do, that balance like penalty more there's prepayment the is on great debt still sheet Although shape, no we ABL. some towards that. particularly There's

next kind So just the the debt the at of out we've for balance buybacks few look kind paydown of quarters. and you of that the can that in versus quarters, prior done model

Yes.

me to one answer Let add point in terms returns. capital this of

are share the dividends you the dividend we the because for that time company the new of the look a you after and amount, FPT. numbers to that ArcelorMittal, we paying by that prior stretch numbers AK, it's the a the amount year, based any on kept paid cut COVID was past. and buying last by buybacks you not money we around have you compare the buying the time But reinstituted if buying it against have returned dividend through would to that compare If into never dollar disadvantage, of

So share with to -- give a I'll -- easily If other more explanation I we the say replace X impact you the neutral and be to can cash value with to would tend you flow investors long a tell the buyback than dividends on something. us.

I'm decision least, be soon, to a be, very we our neutral to this It's made cash will that haven't decision at just flow. are something and the And that buybacks efficient this share interrupt that we're and more one the dividends. possibility But the strong a can that internally. believe discussing just there's go I tax distributed a than thinking, to yet. is we making other. but we

BNP Our Gresser next Paribas. with question comes from Tristan

full you're curve. it on comfortable level have I you visibility first the given you notably ASP year good contract? quarters, the the sharing Is guidance think past something your in today based one, provided on some The of forward

on are at Tristan, are probably we will before. that a help Remember, time better than might believe not with this that are because assumption What the materialize. are that doing names, single to say against ASP because some they look, on competitors their the you that in get much competitors, the a competitor the manufacturer granular lower is way, information two we negotiating prices. curve one these competitor we prices are the just that automotive are these not we were or throwing offering that is that by were prices, negotiations every contracts gave forward-looking to doing future cases, signed. us but more we're Tristan, And never lower automotive what easy real or

was the uphill order that that in to got. to fight battle we we what get had So

And proud dime. again, we These are can what future of these numbers. numbers are These real on will And change assumptions we that firm. not are a towards did. are be that

model believe before. than I we that for better I enough we're to So agree hope you information that. with what you gave doing

on at XXXX, you're already full evolve the think and stainless the that. Yes. the -- evolve flagged No, growing sense and volumes product looking fair, in previously and -- would side, product on full could the and into quite seen I how achieve I QX capacity? the quite the mix maybe us on give totally you I of can If a the much that's finally, a notably mix QX, and improvement. you you year maybe. more We've contract that, you volumes, maybe especially I on structure follow-up or color appreciate And HRC electrical in think on side? a how coated bit expect Maybe to

Why should less on concentrated As and side cars, we're high be build higher automotive. value-added is guys to far more on The low mix, these you as in value-added more the that? the side. One, general expect the in more overall side. the going the

XX% saw XX% mix the these hot-rolled, the That's we You automotive coated, that sell mix cold-rolled. XX% we informed, that days.

hot-rolled, automotive, cars galvanneal, more more more going the and less one. galvanized, in more continues That's less to participation we're to the and build have more they So percentage-wise, electrogalvanized; cold-rolled. increase

to more Ohio, it's Zanesville, Second, non-oriented investment ability electrical will about that called electrical in steels, NOES, our grain-oriented made heard freeing steels only -- -- motors non-oriented to the We electrical increased an facility Butler with more have goes our you electrical no to steels. to And that produce on electrical to transformers. that, the we that of vehicles. goes steels GOES, goes the grid, grain-oriented concentrate on up that are electric

in we're basically Butler we're and increase throughput for separating a expecting meaningful because for Zanesville NOES GOES. So

team So -- towards and EBITDA again, added. contracts that, And are the business. negotiated high in of per The that's extremely very type the ton value a more it's high well by XXXX.

And that component and I there's if more -- as we a well. the well not to one least, before stainless last, -- want is for big but Stainless last comment. we there Stainless, one did automotive. of

that trim sell, also margin. anneal per -- $X,XXX mentioned ton of These material type plus I per our So the the material bright highest $X,XXX material. and ton are we that's

But high really it’s setting really, value-added good, that well. it's So automotive, as was stone it's material. too. And

to liability We're personal up that last one. tinplate. and not big we talking kind going do we start very really pretty against scheme issue for us of suppliers, ended a a go about to the Because to the collusion court critical enormous I'm for particularly of I it's in terms starting of in against absurd with the for the XXX,XXX a of making is things. item easy in It's of Cleveland-Cliffs. serious what believe absurd. that's information type law is the is case that in individuals. totally And what might And tons, typical Because few NAC a gather are is a But but starve are ITC on tinplate strategically they exposing dump, of country. the us a

And to personally fighting state of war we reason be fight. of the produce higher like their are are expect responsible that's we end this our that other the And a at ability acting right foods. at few that to day, in now, a we're outsource thugs prices canned actions. cold in But people end. We to the for cannot, the particularly main

very lawyers on we're with working our that. on So seriously

next Pipes with B. comes from question Our Riley. Lucas

through pricing the have I all of thank details, walk you Celso, QX the and us admit, pricing. on and catch the And minuses Lourenco for on kind pluses you could color you didn't if to much the really the I be some And, but ideally, looking that QX price color there, Thank front could helpful. your in QX, very versus color. for out also you on shed QX. increase to would

We to are contracts expecting QX be Remember, prices higher. have approximately QX. average lags that down December. against are $XX to sub-XXX sales $XX in And and will go from price November from we index price that the fixed

So XXXX, average of remember by impacted of Also, we the sales XXXX. this contracts type be renegotiation for have to that price will thing. is

So talk year. the that we're will happen about things through

initiatives in are cut we to So that be what we average explained, all going cost sales of And lower are price. the to is that's margin. increase expecting cutting QX because impact all, than Celso cost higher -- our

it's So our margins. cost not the average cut will sales just that of enlarge initiatives but also a matter price,

be than than expect, better we to better, And EBITDA QX then on so and higher EBITDA EBITDA and be to forth. be EBITDA. will QX QX QX QX So so

that's the hope I So answered. I story.

helpful color. was No, Yes. that very

pricing, full essentially through higher the would And higher the of see So the lag? prices then... coming with for spot fixed QX the alongside prices we benefit

That's correct. That's correct.

ballpark? What would I could would cost improvement But and right key second And continued drivers the it's it's my estimate perspective. of you, you Lourenco. additional that cost the working that through see I be there? your in question. appreciate Is we is And side, on about add QX. the assume $XX or also Thank on in cost so would if QX. such. versus savings QX QX, And in higher I savings inventories cost continued

you this one? want Yes. take to Celso, do

these to from But and some guided, increases the decreased we 'XX our we pressures you in and furnace, maintenance of through the like of from as output, and projects a inflationary see lot driven Cleveland work we special Lucas, by well, as beyond with relief can forward, sure. our reline in level to Yes, the in as initiatives know, cost volume we then, $XX cetera. QX were to And $XX ton, be, increased as the line per reduction that going et call And and ton QX repair probably those, costs another QX QX. or to kind per another Does of get you a from $XX need where so expect it, in plug you then and $XX QX QX, the guidance. another Lucas? ton per you QX. that ton we that,

that's super is better I expected. helpful, I'd Celso. That than say

I the the cadence the continued and So of best I year, luck. for appreciate and detail the really color of you team and wish

up, the are so higher thing continue both initiated Lucas. contracts prices being I And ton, with it's we'll that you, priced good a volumes the good and for Thank function in trend going are a at automotive, cost This included numbers that. insist and all we're business where hopefully, talking higher volume prices, cost-cutting for per and and, are the with initiatives other these you. the that's of because that to fixed also we in given November us. And so so volume, in far Celso

year. margin meaningful that pretty of enlargement the it's So throughout we're expecting

Bank Our America next question from comes Securities. of Lawson Winder,

about I volume. to ask price wanted fixed the

of guidance on tons, million million short to million be color So which would more fall at the you tons. XX like X.X to So you historically, provide a able percentage to volume imply just bit under little those of fixed-price X.X said your XX%, contracting? XX% would would sort looking of what

volume? and that just So price fixed service wanted I assumptions sense, whether your of to included still made that center not confirm any around or if

Yes.

centers, tinplate, XXX,XXX, of tonnage X electrical, much million. own the and we are on XXX,XXX. XX on We some million fixed some between tons include some it's pretty contract include tinplates, on altogether, X have have of auto, direct X in something and like some stainless, service several everything. others But

at it's So number really, would assume anyway, But XX% million of a not in scheme I the things, it's the X good enough. not tons. is big

comment could Okay. also maybe variability quarterly on Fantastic. that ratio? in you any And

they I build January did Yes. volume cars they be are quarter, build previous will Not the more automotive expect our that of the months than anything meaningful. in They of in by each cars. quarter. was quarter. building cadence shipment industry more It the of January the best all one cars to absolutely previous the the dictated for

is expect data hand be as to way things we saw not crazy shape level are right And we we very now. a one at inflation we point employment the in better seeing may morning, these January. least that's this that that saw have okay, going So same start things CPI -- up we that It if or on as down, at another. will the still continue

doing is So the anticipating doomsday were It's materializing. really good. some not scenario that

We are doing good.

we're Our showing everything. yesterday, so the last good the we XX to were that's And price announced The good. increase. why order in one far so bookings able and hours enforce and book is previous announce

we're So good shape. in

with Our Phil Feel comes Markets. SP-XX next KeyBanc from Capital question Gibbs

Lourenco also, and what expectations credit year? because that pension to And is year, been this then expense expense last what rates your have I relative the know or Celso, are changing? interest

this Yes, Celso, I go ahead. to want to reply one. Celso

Yes, sure. Hey, Phil.

So big a we the have balance ABL. on drawn

instrument. a So and -- floating rate that's

your year. it $XXX been it, all million that. basis, So relates of including -- a can was that the exactly on bonds the On million pension what $XXX we plus you going as interest to to OPEB, year because full and can expense expense has for you the call And of then up that? interest ABL, have, question

changed line. had or to full expense that below a I everything rates? most interest done last that the of but given -- your and year, but was is you credit plan that from think How you've year decent credit,

$XXX about cash $XXX of expense should Yes. call it million credits It and of in million XXXX. be plus

Okay. Perfect.

XXXX. little less A than

next question from UBS. comes Andreas Bokkenheuser Our with

a me. capacity about I lot clarity some utilization your restarted bit in sitting peers, which for think talk us give on questions utilization Can given among been is little moment some your Obviously, surprising production? the XX%. just is a quick average of about industry little you versus of of at of bit was a where two the that terms Just being sector there's

Those fully it getting price now? obviously two about differs on Are And are XXX you've producers. secondly, my are XXX giving HRC. I you XXX? to push seen between hikes obviously, fully headlines you comfort the questions. further But it HRC now getting towards know you

idling Our are assets, utilization, running and are we we anything. not of all our

I these The We So our to have deliver have profitability. We We what automotive care last time. number, don't our do. the to on run I guidelines. And are XX/X follow, take assets on ton. for We relevant the costs of you. don't run tell that's I mitigate don't that's maximum what the fight not can clients. we it, and to

We different a have business. to approach

invest money So because loud take hope and of equipment we to we across instead in exhaustion. I what came the care running business. that's we what commodity why clear of just this that's and are are, and do, the we that's message not

in are going I shape, that's that's the So what what saw maximum ago, from and good are assets to XXXX. we're The of that for two in and quality years we acquired profitability. And assets more. part no are maximum deliver producing

What was question, second the Andreas?

Just going on headlines pricing, obviously pricing, we on XXX. to saw it

You you I XX raised think guys -- another XXX. to

to good you XXX getting the sense Just comfort push whether get of wanted XXX? now you're to giving fully you that can a

Well, increase, XXX. first band when the price we hot start was

now announcing XXX. So we're

So What not? what take? think? it sticky your do is or Is you

but it to point. from. guess coming to in utilization, it not to utilization for of But about of kind I where the terms Yes. with have push guess, XXX. back I XXX, the I'm XX% you're for of the strength comes market guess the you thinking guess I comfort appreciate just I utilization just industry, that's the I on can

and our Well, XXX we is we take. achievable. are at XXX, That's believe

Sachs. with Our next Goldman question comes from Karl Blunden

a free debt in and flow, buybacks towards terms reduction. to then that cash here outlined also plan You'd share of deploy

about it now? is be potential where you footprint for the to think -- 'XX the M&A? think about pretty want is also beyond, a Or much should is we right we and there As

footprint, I exercise. we this company. like the never like talk M&A, the I footprint. never Karl. talk a theoretical about about M&A as in We

my a can theoretical as I I all So tell exercise, footprint. now. That's like right

also profile, the helpful. both down That's lot the debt, you. ABL. on progress And then Got and of then debt a made the in you've bonds paying

think an Or kind also cap paying primarily down focus the think now? for should debt optimal is pay extending of down? being about towards the about that there just you in beyond interest just we As structure,

think liabilities. This dollars debt all X the pay said, pension/OPEB years that, about and down use we cash. being in point-something billion our were We like and conversations main to debt. still things with liabilities will ago, of continue about pension/OPEB X It's

sub $X.X are at we something. and billion Now

just we things. much about, So of don't these we take We care talk it. do

the And a term, is for are trigger shareholders, are flow trades than continue we vested that that a underlying of we'll in for that. This ones number, and not EBITDA. for to employees, sometimes company are higher EPS. not running is lot the that do minute-by-minute, people that they for based, bondholders, play-by-play great. a Cash long There's

long then then a USA, is proved We when and AK for us. acquired that FPT. we years Two time ArcelorMittal and

in So $X two were years billion we making revenues. ago,

crypto have That's XXXX in that the important It's now between a we relationship things not assets. we've was to picture, The company, in But industry the steel So company. like back automotive billion supplier and in fixing the years the itself. company. the and to look major XXX real. major the $XX to was steel revenue the marketplace. automotive It's did a thing The are real really in most important a most even company, making thing years. step look industry fixing a Cleveland-Cliffs, how two not old got I'm take

the If you Inland, Inland and cause bankrupt, and of bankruptcies go was look Bethlehem LTV back and didn't it the Mital. to by of Armco acquired root

the industry you had biggest back still XXXX, chain. as price. that. of it's the the that talk And the And thing past, last to about example. that that majority they thing to promoted names steel we're microchips, year destruction was these But not go they is want of of facing with We between good this companies. supply go client So only a automotive a the negotiate to value XXXX, vast

understood. ready not of end being day, very to But appreciated. was all the all really I a the So car They renewed. they manufacturer. I'm renew entirely They contract a at polite. all with

accomplishment. that. I about few very questions be will got biggest the but good, So continue And things to that's

So that's why ore I'm emphasizing company a it's what game I steel believe company, is the real game a changer. real iron It's changer. becoming like an

not begging of supplier prices a another orders it, for it's Now offering game and to changer. get big lower automotive

XXXX It's February. just tuned. starting. is So stay

more have So to we months go. XX

Okay, Karl?

Congrats the reduction. continued Yes, debt helpful. on that's

right. the the Mr. All turn like Goncalves our of for question-and-answer session. to end to reached I now closing have over comments. We floor would back

this trying appreciate it. I Thanks, you, in Cleveland-Cliffs. the Maria. for to Appreciate model company for and call Thank pretty really to for hard that's the a complex your everyone, attention the support. questions and work

the a today, look we Celso a and great to committed about Thanks lot, that I everything now. and have and forward continuing extremely are Bye We with dialogue. spoke day.

This concludes today's teleconference.

may for You participation. at your your this lines disconnect you time. Thank