Q3 2023 United States Steel Corp Earnings Call

Okay.

Okay.

Speaker 1: Good morning, everyone, and welcome to the United States Steel Corporation's third quarters, 2023, our next conference call and web.

Good morning, everyone and welcome to the United States Steel Corporation's third quarter 2023 earnings conference call and webcast.

Speaker 1: As reminded today's call is being recorded. On the hand of call over to Kevin Lewis, Vice President, why not?

As a reminder, today's call is being recorded.

I'll hand, the call over to Kevin Lewis Vice President Finance.

Speaker 2: Thank you Tommy. Good morning and thank you for joining our third quarter 2023 earnings call.

Thank you Tony Good morning, and thank you for joining our third quarter 2023 earnings call.

Speaker 2: Joining me on today's call is US Deal President and CEO Dave Burrett.

Joining me on today's call is U S steel President and CEO, Dave Burritt senior.

Speaker 2: Senior Vice President and CFO Jessica Graviano, and Senior Vice President and Chief Strategy and Sustainability Officer, Rich Ruhoff.

Senior Vice President and CFO, Jessica Graziano, and senior Vice President and Chief strategy, and sustainability Officer, Richard Hough.

Speaker 2: I would also like to take the opportunity to welcome Emily Chang, who recently joined US Steel as our Investor Relations Office.

I would also like to take the opportunity to walk in Emily Chang, who recently joined US steel as our Investor Relations Officer.

Speaker 2: Emily brings tremendous experience from her time as a self-dialist covering metals and mining.

Emily brings tremendous experience from her time as they sell side analysts covering metals and mining.

Speaker 2: I know many of you already had the chance to meet Emily in her new role and we look forward to your continued engagement with her and the investor relations team.

Many of you already had the chance to meet him only in her new role and we look forward to your continued engagement with her and the Investor Relations team.

Speaker 2: This morning we posted slides to accompanies today's preparing mark.

This morning, we posted slides to accompany today's prepared remarks.

Speaker 2: These can be found on the USDO Investor Relations page under the overview section.

These can be found on the <unk> Investor Relations page under the overview section.

Speaker 2: Before we start, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions, and or subject to a number of risks and uncertainties, as described in RSSC filings, and actual future results may very materials.

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

Speaker 2: Forward-looking statements in the press release that we issued yesterday, along with our remarks today, are made as of today, and we undertake no duty to update them as actual events unfold.

Forward looking statements in the press release that we issued yesterday along with our remarks today are made as of today and we undertake no duty to update them as actual events unfold.

Speaker 2: With that, I would like to turn the conference call over to US Bureau President CEO Dave Burrett, who will begin on slide.

With that I would like to turn the conference call over to U S steel President and CEO, Dave Burritt, who will begin on slide four.

Speaker 3: Thank you, Kevin, and good morning to all of you joining us. We appreciate your continued interest in U.S. deal and look forward to this morning's discussion. But.

Thank you Kevin and good morning to all of you joining us. We appreciate your continued interest in USD and look forward to this morning's discussion.

As we begin.

Speaker 3: We're deeply saddened by recent events in Ukraine, the Middle East, or earlier this week in Maine. Our thoughts and prayers go out to those impacted by these tragedies.

We are deeply saddened by recent events in Ukraine, the middle East or earlier this week in Maine.

And prayers go out to those impacted by these tragedies.

Speaker 3: But this morning we'd like to focus on three key messages that will shape our commentary. First...

But this morning, we'd like to focus on three key messages that will shape our commentary first.

Speaker 3: The high level of interest in U.S. steel that has come to light from the strategic alternative's review process.

The high level of interest in U S steel that has come to light from the strategic alternatives review process.

Speaker 3: Second, the continued strong performance of the business today as Jess will discuss in our third quarter results.

<unk>.

The continued strong performance of the business today as Jess will discuss in our third quarter results.

And third.

Speaker 3: The opportunity we have today to bridge the market to higher expected EBIDA than what we currently believe is being projected by the street for 2024.

The opportunity we have today to bridge the market to higher expected EBITDA than what we currently believe is being projected by the street for 2024.

Speaker 3: Throughout the call, we hope you'll hear the enthusiasm we have for maximizing stockholder values.

Throughout the call we hope you'll hear the enthusiasm we have for maximizing stockholder value.

Speaker 3: Let's start with the first point, the strategic alternatives review process.

Let's start with the first point the <unk>.

Strategic alternatives review process.

Speaker 3: We announced in August that after receiving multiple unsolicited proposals from credible bidders ranging from the acquisition of certain production assets to the entirety of US deal, the US Steel Board of Directors had initiated this strategic alternative review process.

We announced in August that after receiving multiple unsolicited proposals from credible bidders ranging from the acquisition of certain production assets to the entirety of USD <unk>. The U S. Steel board of directors had initiated the strategic alternatives review process.

Speaker 3: The company's board of directors with the assistance of the management team and it invites

The company's board of directors with the assistance of the management team and its advisers.

Speaker 3: is progressing a robust, fair, and rigorous review process.

Is progressing our robust.

Fair and rigorous review process.

Speaker 3: The boards in North Star is and will continue to be maximizing Staccala value.

The board's Northstar is and will continue to be maximizing stockholder value.

Speaker 3: process remains ongoing and therefore we must respect our confidentiality obligations and the work the board is doing.

The process remains ongoing and therefore, we must respect our confidentiality obligations and the work the board is doing.

Speaker 3: Rest assured, steady progress is being made as we continue to support the due diligence efforts of the bidders in the process.

Rest assured steady progress is being made as we continue to support the due diligence efforts of the bidders in the process.

Speaker 3: to be very clear. Again, our board is fully committed to maximizing stockholder rally.

To be very clear again, our board is fully committed to maximizing stockholder value.

Speaker 3: While I can't speak to the specifics of the process, I can tell you this.

While I can't speak to the specifics of the process I can tell you. This.

Speaker 3: There is serious interest from many highly credible bitters and the board's competitive process.

There is serious interest from many highly credible bidders and the board's competitive process.

I did buy our code of conduct known as our steel principles.

Speaker 3: Once the process is complete, the U.S. Steel Board will make a decision that is in the best interest of our stock.

Once the process is complete the U S Steel board will make a decision that is in the best interest of our stockholders.

Operator: Good morning, everyone, and welcome to United States Steel Corporation's third quarter, 2023 earnings conference call and webcast. I was reminded today's call is being recorded.

Speaker 3: With that update, we will not answer any questions about the process or participants.

With that update we will not answer any questions about the process or participants.

Kevin Lewis: I'll now hand a call over to Kevin Lewis, vice president, finance. Thank you, Tommy.

Speaker 3: We are flattered by all the interest in our company, flattered but not surprised. We know that U.S. Steel is strategically positioned for tremendous value creation in the months and years ahead.

We are flattered by all the interest in our company flattered, but not surprised we know that U S. Steel is strategically positioned for tremendous value creation in the months and years ahead.

Kevin Lewis: Good morning, and thank you for joining our third quarter, 2023 earnings call.

Speaker 3: We've been climbing a mountain of strategic CapEx and now that we're coming down the other side of the mountain, we're not surprised so many see it won't be long before these new world-class assets generate strong free cash flow. In fact, we are creating value today as we continue to deliver on our best for all strategy. The second point of enthusiasm.

We've been climbing a mountain of strategic Capex and now that we're coming down the other side of the mountain we're not surprised so many see it won't be long before these new world class assets generate strong free cash flow. In fact, we are creating value today as we continue to deliver on our best for all strategy.

Kevin Lewis: Joining me on today's call is US Steel president and CEO Dave Burritt, senior vice president and CFO Jessica Graziano, and senior vice president and chief strategy and sustainability officer, Rich Ruhoff.

Kevin Lewis: I would also like to take the opportunity to welcome Emily Chang, who recently joined US Steel as our investor relations officer. Emily brings tremendous experience from her time as a Southside analyst covering metals and mining. I know many of you already had the chance to meet Emily in her new role, and we look forward to your continued engagement with her and the investor relations team.

The second point of the enthusiasm for stockholders to that end. We are very pleased to have safe safely delivered a.

Speaker 3: To that end, we are very pleased to have safely delivered.

Speaker 3: a strong third quarter performance, our 12th consecutive quarter of profitability, and even with elevated capital spending, we generated another positive free cash flow quarter. Consistency has become our middle name.

A strong third quarter performance, our 12th consecutive quarter of profitability and even with elevated capital spending we generated another positive free cash flow quarter consistency has become our middle name.

Kevin Lewis: This morning we posted slides to accompanies today's prepared remarks. These can be found on the US Steel Investor Relations page under the overview section.

Kevin Lewis: Before we start, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions, and or subject to a number of risks and uncertainties, as described in our SSC filings, and actual future results may vary materially. Forward-looking statements in the press release that we issued yesterday, along with our remarks today, are made as of today, and we undertake no duty to update them as actual events unfold.

Speaker 3: Our results reflect a solid operational performance, our position in the heart of the USA, the world's most robust steel industry.

Our results reflect a solid operational performance our position in the heart of the USA the world's most robust steel industry, our resilience and flexibility in the face of shifting business conditions and our continued laser focus on safety and in fact, we're on pace for another record best year of <unk>.

Speaker 3: our resilience and flexibility in the face of shifting business conditions, and our continued laser focus on safety. In fact, we're on pace for another record best year of safety performance. I say another because our exceptional safety record follows record safety performances in 2020, in 2021, and in 2020.

Safety performance I'd say, another because our exceptional safety record follows a record safety performances in 2020.

David Burritt: With that, I would like to turn the conference call over to US Steel president, CEO Dave Burritt, who will begin on slide four. Thank you, Kevin, and good morning to all of you joining us. We appreciate your continued interest in US Steel and look forward to this morning's discussion.

2021, and in 2022, our stellar safety record is part and parcel of our stellar operations, we have a culture of carrying <unk>.

Speaker 3: Our stellar safety record is part and parcel of our stellar operations. We have a culture of caring. Safety has always been and always will be one of our core values.

Safety has always been and always will be one of our core values. The way we see it if you arent operating safely you arent operating well.

Speaker 3: The way we see it, if you aren't operating safely, you aren't operating well.

David Burritt: But as we begin, we are deeply saddened by recent events in Ukraine, the Middle East, or earlier this week in Maine. Our thoughts and prayers go out to those impacted by these tragedies. But this morning, we'd like to focus on three key messages that will shape our commentary. First, the high level of interest in US Steel that has come to light from the strategic alternative's review process.

Speaker 3: Our safety performance, enabled by the best employees in the steel industry, allowed us to deliver strong financials in the third quarter. Our best-for-all strategy is paying off.

Our safety performance enabled by the best employees in the steel industry allowed us to deliver strong financials in the third quarter, our best for all strategy is paying off.

Speaker 3: We've talked about this before, U.S. Steel is well positioned to leverage megatrends that favor our industry.

We've talked about this before U S steel is well positioned to leverage megatrends that favor our industry.

Speaker 3: We are up to the challenge to harness these megatrends with our competitive advantage.

We are up to the challenge to harness these mega trends with our competitive advantages.

Speaker 3: With much of the global steel industry stagnant at best, when you consider industry dynamics in China and in Europe , we are bullish on American steel.

David Burritt: Second, the continued strong performance of the business today as Jess will discuss in our third quarter results. And third, the opportunity we have today to bridge the market to higher expected EBIDA than what we currently believe is being projected by the street for 2024. Throughout the call, we hope you'll hear the enthusiasm we have for maximizing stockholder value.

With much of the global steel industry stagnant at best when you consider industry dynamics in China and in Europe.

We are bullish on American steel.

Speaker 3: Why? On our last call, I mentioned the three global megatrends that will provide tailwinds for American Steel and our business in the months and years to come. One is accelerating deglobalization.

Why on our last call I mentioned, the three global Megatrends that will provide tailwind for American steel and our business in the months and years to come one is accelerating the globalization and.

Speaker 3: In a world impacted by conflicts like those in the Middle East and Ukraine, and emerging from a global pandemic that stretched supply chains to the limit, we are witnessing a stark reversal after decades of globalization.

In a world impacted by conflicts like those in the middle East and Ukraine, and emerging from a global pandemic that stretch supply chains to the limit we are witnessing a stark reversal after decades of globalization.

David Burritt: Let's start with the first point, the strategic alternative's review process. We announced in August that after receiving multiple unsolicited proposals from credible bidders, ranging from the acquisition of certain production assets to the entirety of US Steel, the US Steel Board of Directors had initiated this strategic alternative's review process. The company's Board of Directors with the assistance of the management team and its advisors is progressing a robust, fair and rigorous review process.

The upshot.

Speaker 3: Enabled by legislation like the bipartisan infrastructure law, the CHIPS Act, and the Inflation Reduction Act, what we like to call the Manufacturing Renaissance Act.

Enabled by legislation like the bipartisan infrastructure law, the chipset and the.

<unk> reduction act, what we like to call the manufacturing Renaissance Act.

Speaker 3: The United States is experiencing a once in a generation on shoring boom.

Cited states is experience once in a generation onshoring boom.

Speaker 3: The de-globalization boom means U.S. Steel's nearly 123-year history of producing steel that is mined, melted, and made in the USA is paying significant dividends, with more to come and significant room for continued growth in North American steel demand.

The globalization boom means U S. Steel's nearly a 123 year history of producing steel that is mined melted and made in the USA is paying significant dividends with more to come and significant room for continued growth in north American steel demand.

David Burritt: The board's north star is and will continue to be maximizing stockholder value. The process remains ongoing and therefore we must respect our confidentiality obligations and the work the board is doing. Rest assured, steady progress is being made as we continue to support the due diligence efforts of the bidders in the process. To be very clear, again, our board is fully committed to maximizing stockholder value. While I can't speak to the specifics of the process, I can tell you this.

Speaker 3: Fundamental to the deglobalization trend is the USA's achievement of energy independence.

Fundamental to the globalization trend is the USA achievement of energy independence.

Speaker 3: Between our strong segment in tubular steel and our line pipe products coming out of North America in the flat rolled, we are seeing and we will continue to see a robust order book supporting America's energy markets.

Between our strong segment in tubular steel and our line pipe products coming out of North American flat rolled we are seeing and we will continue to see a robust order book supporting America's energy markets.

Another megatrend is de carbonization.

Speaker 3: There is a strong global commitment to reducing greenhouse gas emissions.

There is a strong global commitment to reducing greenhouse gas emissions.

David Burritt: There is serious interest from many highly credible bidders in the board's competitive process. Guided by our code of conduct known as our Steel Principles, once the process is complete, the U.S. Steel Board will make a decision that is in the best interest of our stockholders.

Speaker 3: With our electrical steels that are empowering the transition to EVs, plus our exposure to sustainable steelmaking at Big River, U.S. steel is well positioned to harness the decarbonization trend.

With our electrical steels that are empowering the transition to evs plus our exposure to sustainable steelmaking at Big River U S. Steel is well positioned to harness the de carbonization trend.

Speaker 3: And the last is digitization. Tools like generative AI are enabling us to improve safety and efficiency and capture value in truly unprecedented ways. For instance, at our Minnesota mining operations, we are using AI to improve the maintenance of our truck fleet. AI applications are assisting crews with truck repairs, ordering parts, and distilling.

And the last is digitization tools like Jenny.

Generally of AI are enabling us to improve safety and efficiency and capture value in truly unprecedented ways for instance, at our Minnesota mining operations, we're using AI to improve the maintenance of our truck fleet AI applications are assisting crews with truck repairs ordering parts and distilling.

David Burritt: With that update, we will not answer any questions about the process or participants. We are flattered by all the interest in our company, flattered but not surprised. We know that U.S. Steel is strategically positioned for tremendous value creation in the months and years ahead. We've been climbing a mountain of strategic capex and now that we're coming down the other side of the mountain, we're not surprised so many see it won't be long before these new world-class assets generate strong free cash flow.

Complex information.

Speaker 3: We believe these megatrends will provide strong tailwinds for the domestic steel industry and a special

We believe these megatrends will provide strong tailwind for the domestic steel industry.

And especially for U S steel.

Speaker 3: And finally, we're excited for what lies ahead as our best-for-all strategy unlocks significant value in the next 12 months. This is an exciting time. We are in the heart of, if not the world's best and brightest steel industry.

And finally, we're excited for what lies ahead as our best for all strategy unlocks significant value in the next 12 months. This is an exciting time.

David Burritt: In fact, we are creating value today as we continue to deliver on our best-for-all strategy, the second point of enthusiasm for stockholders. To that end, we are very pleased to have safely delivered a strong third-quarter performance, our 12th consecutive quarter of profitability, and even with elevated capital spending, we generated another positive free cash flow quarter. Consistency has become our middle name. Our results reflect a solid operational performance, our position in the heart of the U.S.A., the world's most robust steel industry, our resilience and flexibility in the face of shifting business conditions, and our continued laser focus on safety.

We are in the heart of if not the world's best and brightest steel industry.

The United States of America.

Yes.

Speaker 3: Of course, it's up to us to harness these megatrends to strengthen our business and ride the tailwinds. And that's exactly what we're doing with our strategic investment.

Of course, it's up to us to harness these mega trends to strengthen our business and ride the tailwind and that's exactly what we're doing with our strategic investments.

Speaker 3: This leads us to the third key message of today's call, bridging to 2020. In 2021, the first key message of today is the first key message of today's call, bridging to 2020. The first key message of today's call, bridging to 2020.

This leads us to the third key message of today call bridging to 2024.

Speaker 3: As mentioned at the start of the call, our best-for-all strategy unlocks significant value, value we don't believe the street is fully projecting into their expectations for next year.

As mentioned at the start of the call are best for all strategy unlocks significant value value. We don't believe the street is fully projecting into their expectations for next year.

Speaker 3: Consider our new non-grain oriented or NGO electrical steel line, which just had its completion celebrated with a ribbon cutting this month at Big River Steel.

Consider our new non grain oriented or NGL electrical steel line, which just had its completion celebrated with a ribbon cutting this month at Big River steel.

David Burritt: In fact, we're on pace for another record best year of safety performance. I say another because our exceptional safety record follows record safety performances in 2020, in 2021, and in 2022. Our stellar safety record is part and parcel of our stellar operations. We have a culture of carrying, safety has always been, and always will be, one of our core values. The way we see it, if you aren't operating safely, you aren't operating well.

Speaker 3: Our new Indux-branded electrical steel is now officially out in the market, enabling us to leverage both the decarbonization and deglobalization trend.

Our new index branded electrical steel is now officially out in the market, enabling us to leverage both the de carbonization and D globalization trends and by the way, we delivered mgo on time and on budget.

Speaker 3: And by the way, we delivered NGO on time and on budget.

Speaker 3: Next, our dual galvanized Galvolume coating line, or CGL2, at Big River, is nearing its anticipated start-up in 2024. This line will leverage the sustainable steel making at the Big River complex to offer value at a construction and appliance steel.

Next our dual galvanize galba wound coding line <unk> at Big River is nearing its anticipated startup in 2024.

David Burritt: Our safety performance, enabled by the best employees in the steel industry, allowed us to deliver strong financials in the third quarter. Our best-for-all strategy is paying off. We've talked about this before. US Steel is well-positioned to leverage megatrends that favor our industry. We're up to the challenge to harness these megatrends with our competitive advantages. With much of the global steel industry stagnant, at best, when you consider industry dynamics in China and in Europe, we are bullish on American steel. Why?

This line will leverage the sustainable steel, making at the Big River complex to offer value added construction and appliance deals.

Speaker 3: And then there's Big River 2, our state-of-the-art mini-mill that remains on track for a second half 2024 startup.

And then Theres, a big river to our state of the art Mini mill that remains on track for a second half 2024 startup.

Speaker 3: As we shared during the last call, Big River 2, in combination with the existing Big River Steel, will form a cutting edge, six million ton mega mill, supplying the most advanced and sustainable steels in North America, with up to 70 to 80% fewer greenhouse gas emissions than the traditional integrated steel making route.

As we shared during the last call Big River two in combination with the existing Big River steel will form a cutting edge 6 million ton Mega mill supplying the most advanced and sustainable steels in North America with up to 70% to 80% fewer greenhouse gas emissions than the traditional integrated steel.

David Burritt: On our last call, I mentioned the three global megatrends that will provide tailwinds for American steel and our business in the months and years to come. One is accelerating de-globalization. In a world impact by conflicts like those in the Middle East and Ukraine and emerging from a global pandemic that stretched supply chains to the limit, we are witnessing a stark reversal after decades of globalization. The upshot enabled by legislation like the bipartisan infrastructure law, the Chips Act, and the Inflation Reduction Act, what we like to call the Manufacturing Renaissance Act.

And making route.

Speaker 3: Our progress at Big River II is tangible. When we last spoke in July , we just had a quarter of the equipment on site. Today, almost two-thirds, and our experienced construction team is progressing us closer to first coil in the second half of 2024.

Our progress at Big River too is tangible when we last spoke in July we just had a quarter of the equipment on site today, almost two thirds and our experienced construction team is progressing as closer to first coil in the second half of 2024.

Speaker 3: Today, we'll spend time unpacking 2024 and helping bridge the gap between best for all and 2024 street estimate.

Today, we'll spend time, unpacking 2024, and helping bridge the gap between best for all in 2024th Street estimates.

Speaker 3: This is time well spent given the transformation in our business model and the benefits we expect to see next year. Simply put,

This is time well spent given the transformation in our business model and the benefits we expect to see next year.

David Burritt: The United States is experienced once in a generation on-shoring boom. The de-globalization boom means US Steel's nearly 123-year history of producing steel that is mined, melted, and made, and the USA is paying significant dividends with more to come and significant room for continued growth in North American steel demand. Fundamental to de-globalization trend is the USA's achievement of energy independence. Between our strong segment and tubular bit steel and our linepipe products coming out of North American flat rolled, we are seeing and we will continue to see a robust order book supporting America's energy markets.

Simply put we believe that.

Speaker 3: the trajectory of our performance, both today and tomorrow, has not been fully appreciated by the market. We are 12 months away from the scheduled launch of Big River II, which means incremental strategic EBITDA creation and about a billion dollar reduction to CapEx in 2024, relative to 2023.

The trajectory of our performance both today and tomorrow has not been fully appreciated by the market.

We are 12 months away from the scheduled launch of Big River to which means incremental strategic EBITDA creation and about $1 billion reduction to Capex in 2024 relative to 2023.

Speaker 3: After years of heavy investment, we are finally coming down the CapEx mountain and ready to collect the bounty of free cash flow and unlock stockholder value.

After years of heavy investment we are finally coming down the Capex mountain and ready to collect the boundary of free cash flow and unlock stockholder value.

Speaker 3: Even as we invest in strategic projects that will reshape our footprint and drive our best-for-all strategy forward in 2024, we are taking necessary actions today in the face of volatile market conditions.

Even as we invest in strategic projects that will reshape our footprint and drive our best for all strategy forward. In 2024, we are taking necessary actions today in the face of volatile market conditions we.

David Burritt: Another mega trend is decarbonization. There is a strong global commitment to reducing greenhouse gas emissions. With our electrical steels that are empowering the transition to EVs, plus our exposure to sustainable steel making at Big River, US Steel is well positioned to harness the decarbonization trend. The last is digitization. Tools like generative AI are enabling us to improve safety and efficiency and capture value in truly unprecedented ways. For instance at our Minister of Mining Operations, we are using AI to improve the maintenance of our truck fleet.

Speaker 3: We have recently had to make some tough decisions related to reducing fixed costs, and in September we made the difficult decision to temporarily idle our last operating blast furnace at Granite City Works. I say this was a difficult decision, and it truly was, but it was a necessary one.

We have recently had to make some tough decisions related to reducing fixed cost and in September we made the difficult decision to temporarily idle our last operating blast furnaces at granite City works I'd say this was a difficult decision and it truly was but it was a necessary one.

Speaker 3: With the AutoWorker Strike impacting the order book and the fourth quarter, we acted to ensure that our melt capacity is in line with demand. We remain nimble in haveliness to maintain profitability as we manage through uncertain market conditions.

With the auto workers strike impacting the order book in the fourth quarter, we acted to ensure that our melt capacity is in line with demand we remain nimble, enabling us to maintain profitability as we managed through uncertain market conditions.

Speaker 3: Now let's turn things over to Jess who will go over the financials and 2024 expectations.

Now, let's turn things over to Jeff who will go over the financials and 2024 expectations Jess.

David Burritt: AI applications are assisting crews with truck repairs, ordering parts, and distilling complex information. We believe these mega trends will provide strong tailwinds for the domestic steel industry and especially for US Steel. Finally, we are excited for what lies ahead as our best for all strategy unlocks significant value in the next 12 months. This is an exciting time. We are in the heart of if not the world's best and brightest steel industry, the United States of America. Of course, it's up to us to harness these mega trends to strengthen our business and ride the tailwinds. That's exactly what we're doing with our strategic investment.

Speaker 4: Thanks, Dave, and good morning to everyone on the call. I'll pick up on slide five, where we'll start with a look at the third quarter. We were very pleased with third quarter performance, with net earnings of $299 million, or $1.20 per diluted share. Adjusting for certain one-time items, adjusted net earnings were $350 million, or $1.40 per share.

Thanks, Dave and good morning to everyone on the call I'll pick up on slide five where we will start with a look at the third quarter. We are very pleased with third quarter performance with net earnings of $299 million or $1 20 per diluted share adjusting for certain one time items adjusted net earnings were 300.

$50 million or $1 40 per share.

Speaker 4: Both the adjusted EPS of $1.40 and adjusted EBITDA of $578 million were stronger than expected in large part from better performance across our NAFER segment.

Both the adjusted EPS of $1 40, and adjusted EBITDA of $578 million were stronger than expected in large part from better performance across our Napa segment.

Speaker 4: Free cash flow during the quarter was a positive 232 million. When you consider that we spent 423 million in strategic capex related to our in-flight projects, I'll note the business generated a robust 655 million in investible free cash last car holidays and 150 million site

Free cash flow during the quarter was a positive $232 million. When you consider that we spent $423 million in strategic capex related to our in flight projects.

David Burritt: This leads us to the third key message of today's call, bridging to 2024. As mentioned at the start of the call, our best for all strategy and lock significant value. Value we don't believe the street is fully projecting into their expectations for next year. Consider our new non-green oriented or NGO electrical steel line, which just had its completion celebrated with a ribbon cutting this month at Big River Steel. Our new index branded electrical steel is now officially out in the market, enabling us to leverage both the decarbonization and de-globalization trends.

The business generated a robust $655 million in investable free cash flow in the third quarter.

Speaker 4: The balance sheet continues to be in excellent shape. We ended the quarter with $5.5 billion of total liquidity, including $3.2 billion of cash.

Balance sheet continues to be in excellent shape, we ended the quarter with $5 $5 billion of total liquidity, including $3 $2 billion of cash.

David Burritt: And by the way, we delivered NGO on time and on budget. Next, our dual galvanized galvolume coating line, or CGL2, at Big River, is nearing its anticipated start-up in 2024. This line will leverage the sustainable steel making at the Big River complex to offer value added construction and appliance steels. And then there's Big River 2, our state-of-the-art mini-mill that remains on track for a second half 2024 start-up. As we shared during the last call, Big River 2, in combination with the existing Big River Steel, will form a cutting edge, 6 million ton mega-mill, supplying the most advanced and sustainable steels in North America.

Speaker 4: Our leverage at September 30th remains very low. At two times, adjusted debt to Ibiza.

Our leverage at September 30th remained very low at two times adjusted debt to EBITDA.

Speaker 4: 5X are on a pause as a result of the strategic alternatives review. And to date, we have $125 million left to buy on our authorized $500 million program.

Buybacks are on our pause as a result of the strategic alternatives review and to date, we have $125 million left to buy on our authorized $500 million program.

Speaker 4: Now let's spend a few minutes on Q3 within the segments on slide 6.

Now, let's spend a few minutes on Q3 within the segments on slide six.

Speaker 4: Our flat-rolled segment delivered a sequentially strong third quarter with EBITDA of $378 million. That's in line with Q2 performance.

Our flat rolled segment delivered a sequentially strong third quarter with EBITDA of $378 million.

And that's in line with Q2 performance.

Speaker 4: Despite a sequentially lower HRC environment in Q3, we realized higher than expected average selling prices, driven by mixed benefits from a greater proportion of higher value products sold in the quarter.

Despite a sequentially lower HRC environment in Q3, we realized higher than expected average selling prices driven by mix benefits from a greater proportion of higher value products sold in the quarter.

Speaker 4: The third quarter was also helped by raw material tailwinds, including lower outside purchased scrap and alloy costs.

The third quarter was also helped by raw material tailwind, including lower outside purchased scrap and alloy costs. We also benefited from fixed cost reductions and lower mining related costs during the quarter.

Speaker 4: We also benefited from fixed cost reductions and lower mining-related costs during the quarter. Minimil segment EBITDA declined sequentially to $84 million as fat steel prices were lower and we had slightly lower shimmings.

Mini mill segment, EBITDA declined sequentially to $84 million as thought steel prices were lower and we had slightly lower shipments.

David Burritt: With up to 70-80% fewer greenhouse gas emissions than the traditional integrated steel making route. Our progress at Big River 2 is tangible. When we last spoke in July, we just had a quarter of the equipment on site. Today, almost two-thirds, and our experience construction team, is progressing as closer to first coil in the second half of 2024.

Speaker 4: Lower metallic costs serve to offset some of the pricing headwinds we experienced in Q3. With both the benefit of having our Gary Pig machine ramped to full run rate production during the quarter, as well as lower scrap price.

Lower metallics costs served to offset some of the pricing headwinds we experienced in Q3 with both the benefit of having our Gary pig machine ramped to full run rate production during the quarter as well as lower scrap prices.

And mini mill segment EBITDA margin for the quarter was 13% and I will note that.

Speaker 4: The mini-mill segment EBITDA margin for the quarter was 13%. Now I will note that results as quarter included about $17 million of non-recurring anticipated startup costs for our in-flight projects of Big River. Adjusting for those expenses, Big River EBITDA margin would have been 15% in Q3, which is in line with expectations.

That results. This quarter included about $17 million of nonrecurring anticipated startup costs for our in flight projects at Big River adjusting for those expenses Big River EBITA margin would have been 15% in Q3, which is in line with expectations.

David Burritt: Today, we'll spend time unpacking 2024 and helping bridge the gap between best for all and 2024 street estimates. This is time well spent given the transformation in our business model and the benefits we expect to see next year. Simply put, we believe that the trajectory of our performance both today and tomorrow has not been fully appreciated by the market. We are 12 months away from the schedule launch of Big River 2, which means incremental strategic EBITDA creation and about a billion dollar reduction to CAPEX in 2024 relative to 2023.

Speaker 4: Moving to our European business, we delivered $10 million of EBITDA in the third quarter. We experienced declining prices and lower volumes impacting the top line in Europe . We also incurred costs related to the planned outage in August on one of our blasphurnists.

Moving to our European business, we delivered $10 million of EBITDA in the third quarter, we experienced declining prices and lower volumes impacting the top line in Europe. We also incurred costs related to the planned outage in August and one of our blast furnaces.

Speaker 4: The tubular segment continued to deliver a historically high EBITDA for the third quarter of 99 million at a very healthy 32% margin.

The tubular segment continued to deliver a historically high EBITDA for the third quarter of $99 million at a very healthy 32% margin.

Speaker 4: You'll recall that we mentioned on our earnings call back in July , that we expected results to slow in Q3 versus Q2.

Youll recall that we mentioned on our earnings call back in July that we expected results to slow in Q3 versus Q2.

David Burritt: After years of heavy investment, we are finally coming down the CAPEX mountain and ready to collect the bounty of free cashflow and unlock stockholder value. Even as we invest in strategic projects that will reshape our footprint and drive our best for all strategy forward in 2024, we are taking necessary actions today in the face of volatile market conditions. We have recently had to make some tough decisions related to reducing fixed cost.

Speaker 4: The sequential decrease in EBITDA was primarily driven by a reduction in lower average, realized prices and shipments for tubular.

The sequential decrease in EBITDA was primarily driven by a reduction in lower averaged realized prices and shipments for tubular.

Speaker 4: Later, I'll wrap up my prepared remarks with our customary outlook for the fourth quarter. But before I do that, I'll send a few minutes providing contacts around 2024 expectations.

Ah later I'll wrap up my prepared remarks, with our customary outlook for the fourth quarter, but before I do that I'll spend a few minutes, providing context around 2024 expectations.

Speaker 4: As Dave mentioned, 2024 is an important year for us strategically. As all of our in-flight projects will begin generating EBITDA and cashflow for at least a portion of the year, and our strategic capital spending starts to wind down.

As Dave mentioned 2024 is an important year for us strategically as all of our in flight projects will begin generating EBITDA and cash flow for at least a portion of the year and our strategic capital spending starts to wind down.

David Burritt: In September, we made the difficult decision to temporarily idle our last operating blast for an asset granted city works. I say this was a difficult decision and it truly was, but it was a necessary one, with the auto worker strike impacting the order book in the fourth quarter. We acted to ensure that our melt capacity is in line with demand. We remain nimble, enabling us to maintain profitability as we manage through uncertain market conditions.

Speaker 4: We're assessing the timing of those benefits as we get closer to project completion.

We're assessing the timing of those benefits as we get closer to project completion.

Speaker 4: We also expect to generate savings from identified and in some cases completed actions that we're taking in fixed costs and with continuous improvement projects in our mills and mines.

We also expect to generate savings from identified and in some cases completed actions that we're taking and fixed costs and with continuous improvement projects in our mills and mines.

Speaker 4: These 2024 numbers are still asumptive and subject to change. So we'll continue to provide quarterly guidance. But as we've pulled forecasts together for the year, we noticed a sizable gap to current analyst models. So to be helpful, we wanted to highlight year-over-year changes that we expect to see.

These 2024 numbers are still assumptive and subject to change. So we will continue to provide quarterly guidance, but as we've pulled forecast together for the year, we noticed a sizable gap to current analyst models. So to be helpful. We wanted to highlight year over year changes that we expect to see.

Jessica Graziano: Now let's turn things over to Jess who will go over the financials and 2024 expectations. Jess? Thanks Dave and good morning to everyone on the call.

Jessica Graziano: I'll pick up on slide five, where we'll start with a look at the third quarter. We were very pleased with third quarter performance with net earnings of $299 million or $1.20 cents per diluted share. Adjusting for certain one time items, adjusted net earnings were $350 million or $1.40 per share. Both the adjusted EPS of $1.40 and adjusted EBITDA of $578 million were stronger than expected in large part from better performance across our NAFOR segment.

Speaker 4: I want to start on slide seven by showing you the strategic project progress made over the last couple of years.

I wanted to start on slide seven by showing you the strategic project progress made over the last couple of years.

Speaker 4: Now as you can see, we are over the hump on the heavy capex that is a critical path to best for all. We're about 12 months away from when we expect all of these initiatives will be up and running.

Now as you can see we are over the hump on the heavy capex that is a critical path to best for all or about 12 months away from when we expect all of these initiatives will be up and running.

Speaker 4: And we're in the execution phase of our Gary Pig Machine project. And as we've discussed, first coil was achieved last month on our NGO line.

And we are in the execution phase of our Gary Pig machine project and as we've discussed first coil was achieved last month on our NGL line.

Jessica Graziano: Free cash flow during the quarter was a positive $232 million. When you consider that we spent $423 million in strategic capex related to our in-flight projects, I'll note the business generated a robust $655 million in investible free cash.

Speaker 4: Next up at Big River is our Continuous Galveline, or CGL2, which remains on track for startup in mid-2024.

Next up that Big River is our continuous galvanized or <unk>, which remains on track for startup in mid 2024.

Speaker 4: Our DR grade pellet facility in Minnesota is also on track for a fourth quarter 2023 start-up.

Our Dr Grade pellet facility in Minnesota is also on track for a fourth quarter 2023 startup.

Jessica Graziano: The balance sheet continues to be in excellent shape. We ended the quarter with $5.5 billion of total liquidity, including $3.2 billion of cash. Our leverage at September 30 remains very low at two times adjusted debt to EBITDA. Bybacks are on a pause as a result of the strategic alternatives review and to date we have $125 million left to buy on our authorized $500 million program.

Speaker 4: We're in the midst of completing equipment installation as we speak in Minnesota and our commercial team is progressing negotiations for off-take agreements.

We're in the midst of completing equipment installation as we speak in Minnesota, and our commercial team is progressing negotiations for off take agreements.

Speaker 4: And finally, Big River 2 is progressing by leaps and bounds.

And finally Big River Q is progressing by leaps and bounds.

Speaker 4: Take a look at the photos on slide 8 in our investor presentation. Clearly, a picture's worth a thousand words. It is a beautiful sight.

Take a look at the photos on slide eight in our Investor presentation, clearly a picture's worth a thousand words it is a beautiful site.

Speaker 4: So, as you can see on slide nine, using Dave's analogy, we are getting to the other side of the mountain towards the point of considerable value on land.

So as you can see on slide nine using Dave's analogy, we are getting to the other side of the mountain towards the point of considerable value unlock.

Jessica Graziano: Now let's spend a few minutes on Q3 within the segments on slide six. Our flat-rolled segment delivered a sequentially strong third quarter with EBITDA of $378 million. That's in line with Q2 performance.

Speaker 4: Once this investment period is complete, our footprint will support increased earning stability, decreasing capital intensity, and improving free cash flow generation next year.

Once this investment period is complete our footprint will support increased earnings stability decreasing capital intensity and improving free cash flow generation next year.

Speaker 4: On slide 10, we want to provide some detail behind the pieces that together will help bridge the gap to 2024. Let's start with 2023 as our baseline, which we're expecting will shake out at around $2 billion of adjusted EBITDA.

On slide 10, we want to provide some detail behind the pieces that together will help bridge the gap to 2024, let's start with 2023 is our baseline, which we're expecting will shake out at around $2 billion of adjusted EBITDA.

Jessica Graziano: Despite a sequentially lower HRC environment in Q3, we realized higher than expected average selling prices driven by mixed benefits from a greater proportion of higher value products sold in the quarter. The third quarter was also helped by raw material tailwinds, including lower outside purchased scrap and alloy costs. We also benefited from fixed cost reductions and lower mining-related costs during the quarter.

Speaker 4: Moving from left to right, let's first layer in the $155 to $210 million of incremental EBITDA from our strategic projects. And where we fall in that range is largely dependent on the exact timing of the startup.

Moving from left to right, let's first layer in the $155 million to $210 million of incremental EBITDA from our strategic projects and where we fall in that range is largely dependent on the exact timing of the startup.

Jessica Graziano: Many mills segment EBITDA declined sequentially to $84 million as thought steel prices were lower and we had slightly lower shimmings. Lower metallic costs served to offset some of the pricing headwinds we experienced in Q3 with both the benefit of having our Gary Pig machine ramped to full run rate production during the quarter, as well as lower scrap prices. The mini mill segment EBITDA margin for the quarter was 13%.

Speaker 4: Next, we are implementing roughly $100 million of cost benefits focused primarily on fixed-cost reductions within the North American flat-rolled segment.

Next we are implementing roughly $100 million of cost benefits focused primarily on fixed cost reductions within the north American flat rolled segment.

Speaker 4: And finally, we anticipate certain headwinds, primarily from foreign exchange impacts, and lower steel prices, based on average consensus sell side estimates of about $750 per tonne HRC in 2024.

And finally, we anticipate certain headwinds primarily from foreign exchange impacts and lower steel prices based on average consensus sell side estimates of about $750 per ton HRC in 2024.

That's partially offset by tailwind from raw material costs and some of those impacts reflect is reflected in the all other bucket of $300 million.

Speaker 4: That's partially offset by tailwinds from raw material costs. And some of those impacts is reflected in the all other bucket of 300 million.

Jessica Graziano: Now I will note that results as quarter included about $17 million of non-recurring anticipated startup costs for our in-flight projects at Big River. Adjusting for those expenses, Big River EBITDA margin would have been 15% in Q3, which is in line with expectations. Moving to our European business, we delivered $10 million of EBITDA in the third quarter. We experienced declining prices and lower volumes impacting the top line in Europe. We also incurred costs related to the planned outage in August on one of our blast furnaces.

Speaker 4: Taken together, we feel comfortable with projecting at least a similar level of EBITDA performance in 2024 compared to 2023.

Taken together, we feel comfortable with projecting at least a similar level of EBITDA performance in 2024 compared to 2023.

And it's worth spending a few minutes on the strategic project contributions in 2024 and slide 11.

Speaker 4: Now it's worth spending a few minutes on the strategic project contributions in 2024 on slide 11 that together make up the $155 to $210 million range.

Together make up the $155 million to $210 million range.

Speaker 4: We believe the contributions from these projects in 2024 remain underappreciated in many of the analyst models.

We believe the contributions from these projects in 2024 remain underappreciated and many of the analysts' models.

Jessica Graziano: Kansas. The tubular segment continued to deliver historically high EBITDA for the third quarter of 99 million at a very healthy 32 percent margin.

Let's start with the Gary Pig machine as you May remember this came online under budget and ahead of schedule in Q4 2022.

Speaker 4: As you may remember, this came online under budget and ahead of schedule in Q4 2022.

Jessica Graziano: You'll recall that we mentioned on our earnings call back in July that we expected results to slow in Q3 versus Q2. The sequential decrease in EBITDA was primarily driven by a reduction in lower average realized prices and shipments for tubular.

Speaker 4: Using pig iron from Gary provides an approximate $50 per ton cost advantage relative to third party purchase.

Using pig iron from Gary provides an approximate $50 per ton cost advantage relative to third party purchases.

Speaker 4: We expect to see the full $30 million of EBITDA benefit next year.

We expect to see the full $30 million of EBITDA benefit next year move.

Speaker 4: Moving to the NGO line, we expect to deliver a $60 million EBITDA uplift in 2024. On our way to the full $140 million EBITDA benefit in 2026, as we ramp up and optimize products.

Moving to the NGL line, we expect to deliver a $60 million EBITDA uplift in 2024 on our way to the full $140 million EBITDA benefit in 2026, as we ramp up and optimized product mix.

Jessica Graziano: A later, I'll wrap up my prepared remarks with our customary outlooks for the fourth quarter, but before I do that, I'll send a few minutes providing context around 2024 expectations. As Dave mentioned, 2024 is an important year for us strategically, as all of our in-flight projects will begin generating EBITDA and cashflow for at least a portion of the year, and our strategic capital spending starts to wind down. We're assessing the timing of those benefits as we get closer to project completion.

Speaker 4: on our dual coding line or CGL2. It's on track for startup in the second half of 2024. Depending on the exact timing of that startup, we are anticipating an incremental 10 to 15 million dollars of EBITDA.

On our dual coding line or <unk>.

On track for startup in the second half of 2024.

On the exact timing of that startup, we are anticipating an incremental $10 million to $15 million of EBITDA.

Speaker 4: And finally, BR2. Depending on the exact timing of the start up in the back half of the year, we're expecting to deliver an additional $75 to $125 million of EBITDA that we did not have in 2023.

And finally be or two depending on the exact timing of the start up in the back half of the year, we're expecting to deliver an additional $75 million to $125 million of EBITDA and we did not have in 2023.

Jessica Graziano: We also expect to generate savings from identified, and in some cases completed actions that we are taking in fixed costs and with continuous improvement projects in our mills and mines. These 2024 numbers are still assumptive and subject to change, so we'll continue to provide quarterly guidance.

Speaker 4: We wanted to provide a segment view for 2024 on flight 12. Starting off with the North America.

We wanted to provide a segment view for 2024 on slide 12.

Starting off with the North American flat rolled business.

Speaker 4: We believe our flat-rolled segment can deliver approximately a billion dollars of EBITDA in 2024. Now that's in line with the billion or so we believe through cycle looks like for this segment when you consider the impact of recent investments and improvements we've made over the last few years.

We believe our flat rolled segment can deliver approximately $1 billion of EBITDA in 2024, and that's in line with the $1 billion or so we believe through cycle looks like for this segment. When you consider the impact of recent investments and improvements we've made over the last few years.

Jessica Graziano: But as we've pulled forecasts together for the year, we noticed a sizable gap to current analyst models, so to be helpful, we wanted to highlight year-over-year changes that we expect to see. I want to start on slide 7 by showing you the strategic project progress made over the last couple of years. Now, as you can see, we are over the hump on the heavy capex that is a critical path to best for all.

Speaker 4: We've talked a lot about the value being generated in our mini-mill segment, and we think it's only going to keep getting better. We expect 2024, just at EBITDA, in the neighborhood of 600 million. On its way to a projected $1.3 billion of EBITDA in 2026, as Big River 2 hits run rate.

We've talked a lot about the value being generated in our mini mill segment, and we think it's only going to keep getting better. We expect 2024 adjusted EBITDA in the neighborhood of 600 million on its way to a projected $1 $3 billion of EBITDA in 2026, as Big River to hit run rate.

Jessica Graziano: We're about 12 months away from when we expect all of these initiatives will be up and running. And we're in the execution phase of our Gary Pig Machine project, and as we've discussed, first coil was achieved last month on our NGO line. Next up at Big River is our continuous Galveline or CGL2, which remains on track for start-up in mid-2024. Our DR-grade pellet facility in Minnesota is also on track for a fourth quarter 2023 start-up. We're in the midst of completing equipment installation as we speak in Minnesota, and our commercial team is progressing negotiations for off-take agreements. And finally, Big River 2 is progressing by leaps and bounds.

Speaker 4: We've action cost savings in Europe , which together with expected energy tailwinds should deliver about $100 million of EBITDA in 2024, offsetting impacts from a top line that's going to continue to be challenged and from an extended supply chain.

We have action cost savings in Europe, which together with expected energy tailwind should deliver about $100 million of EBITDA in 2020 for offsetting impacts from a top line that's going to continue to be challenged and from an extended supply chain.

Speaker 4: and finally, tubular, a true transformation. What was recently a segment that was inconsistent and vulnerable to commodity cycles is now generating material and resilient EBITDA. We've seen tubular benefit from a structural improvement in the cost structure, in-sourced rounds production and proprietary connections, and a continued strong commercial backdrop. Our current estimates for 2024 will see tubular contribute about $300 million of EBITDA.

And finally tubular a true transformation what was recently a segment that was inconsistent and vulnerable to commodity cycles is now generating material and resilient EBITDA, we've seen tubular benefit from a structural improvement in the cost structure in source rounds production and proprietary connections and a continued strong.

Jessica Graziano: Take a look at the photos on slide 8 in our investor presentation. Clearly, a picture's worth a thousand words. It is a beautiful site. So as you can see on slide 9 using Dave's analogy, we are getting to the other side of the mountain towards the point of considerable value unlock. Once this investment period is complete, our footprint will support increased earnings stability, decreasing capital intensity, and improving free cash flow generation next year.

Commercial backdrop, our current estimates for 2024, we will see tubular contribute about $300 million of EBITDA.

Speaker 4: Let's take a look at the free cash flow profile on slide 13.

Let's take a look at the free cash flow profile on slide 13.

Speaker 4: Our free cash flow profile has fundamentally changed over the last 10 years. Our annual average free cash flow generation has gone from essentially break even in the 2015 to 2019 period to what we estimate could average about a billion dollars in the 2021 to 2024 time frame.

Free cash flow profile has fundamentally changed over the last 10 years.

Our annual average free cash flow generation has gone from essentially breakeven in the 2015 to 2019 period to what we estimate could average about $1 billion in the 2021 to 2024 timeframe.

Jessica Graziano: On slide 10, we want to provide some detail behind the pieces that together will help bridge the gap to 2024. Let's start with 2023 as our baseline, which we're expecting will shake out at around $2 billion of adjusted EBITDA. Moving from left to right, let's first layer in the $155 to $210 million of incremental EBITDA from our strategic projects. And where we fall in that range is largely dependent on the exact timing of the start-up.

Speaker 4: Again, as you consider what is driving our free cash flow outlook, it's three things. The decline in our strategic CAPEX requirements, the ramp up of our strategic projects, and the decrease in capital intensity of our transformed footprint.

Again as you consider what is driving our free cash flow outlook. It's three things the decline in our strategic capex requirements, the ramp up of our strategic projects and a decrease in capital intensity of our transformed footprint.

Speaker 4: As you can see on slide 14, this has afforded us the flexibility to strengthen our balance sheet, invest in our strategy, and return capital to stockholders, checking the box on each of our capital allocation priorities.

As you can see on slide 14. This is afforded us the flexibility to strengthen our balance sheet invest in our strategy and return capital to stockholders checking the box on each of our capital allocation priorities.

Jessica Graziano: Next, we are implementing roughly $100 million of cost benefits focused primarily on fixed-cost reductions within the North American flat-rolled segment. And finally, we anticipate certain headwinds, primarily from foreign exchange impacts and lower steel prices based on average consensus sell-side estimates of about $750 per ton on HRC in 2024. That's partially offset by tailwinds from raw material costs. And some of those impacts is reflected in the all-other bucket of $300 million.

Speaker 4: As we discussed earlier, our balance sheet is, as I like to say, strong as steel. We're advancing our strategic projects and we have maintained our quarterly dividend.

As we discussed earlier, our balance sheet is as I like to say strongest steel, we're advancing our strategic projects and we have maintained our quarterly dividend.

Jessica Graziano: Taken together, we feel comfortable with projecting at least a similar level of EBITDA performance in 2024 compared to 2023.

Speaker 4: And while our buyback program is currently on a pause, we will continue to assess capital returns as appropriate. Given the business, we'll continue to generate excess cash. I'll wrap up.

And while our buyback program is currently on a pause we will continue to assess capital returns as appropriate given the business will continue to generate excess cash.

I'll wrap up with our current view of the fourth quarter.

Speaker 4: Pricing across the segments will be a headwind in the quarter. And we expect sequentially lower EBITDA in the fourth quarter versus the third.

Pricing across the segments will be a headwind in the quarter and we expect sequentially lower EBITDA in the fourth quarter versus the third.

Speaker 4: We expect a sequential decline in flat-rolled segment EBITDA, reflecting lower pricing and volumes. This is due in part to lower spot prices and the decreased volumes and associated costs from planned maintenance that's occurring in the fourth quarter.

We expect a sequential decline in flat rolled segment, EBITDA reflect reflecting lower pricing and volumes.

Jessica Graziano: Now, it's worth spending a few minutes on the strategic project contributions in 2024 on slide 11 that together make up the $155 to $210 million range. We believe the contributions from these projects in 2024 remain underappreciated in many of the analyst models. Let's start with the Gary Pig machine. As you may remember, this came online under budget and ahead of schedule in Q4 2022. Using pig iron from Gary provides an approximate $50 per ton cost advantage relative to third-party purchases.

This is due in part to lower spot prices and the decreased volumes and associated costs from planned maintenance that's occurring in the fourth quarter.

Speaker 4: In the mini mill segment, we expect lower steel prices and a planned maintenance outage to impact fourth quarter results, driving lower sequential EBITDA. These items are expected to be partially offset from lower metallics costs.

And the mini Mills segment, we expect lower steel prices and a planned maintenance outage to impact fourth quarter results driving lower sequential EBITDA. These items are expected to be partially offset from lower metallics costs.

Speaker 4: In Europe , we expect Q4 EBITDA to be consistent with Q3 performance as we expect lower raw material costs and the absence of planned outage spending to broadly offset pricing headwinds during the quarter.

In Europe, we expect Q4 EBITDA to be consistent with Q3 performance as we expect lower raw material costs and the absence of planned outage spending to broadly offset pricing headwinds during the quarter and.

Jessica Graziano: We expect to see the full $30 million of EBITDA benefit next year. Moving to the NGO line, we expect to deliver a $60 million EBITDA uplift in 2024. On our way to the full $140 million EBITDA benefit in 2026 as we ramp up and optimize product mix. On our dual coding line, or CGL2, it's on track for start-up in the second half of 2024. Depending on the exact timing of that start-up, we are anticipating an incremental $10 to $15 million of EBITDA. And finally, BR2. Depending on the exact timing of the start-up in the back half of the year, we're expecting to deliver an additional $75 to $125 million of EBITDA that we did not have in 2023.

Speaker 4: And finally, we also expect sequentially lower EBIT dot or tubular operation.

And finally, we also expect sequentially lower EBITDA at our tubular operations that that reflects decreased average selling prices, partially offset by shipments returning to more normalized levels.

Speaker 4: That reflects decreased average selling prices, partially offset by shipments returning to more normalized levels.

Speaker 4: Taken together, we expect fourth quarter adjusted EBITDA to be between $200 and $250 million.

Taken together, we expect fourth quarter, adjusted EBITDA to be between 200 and $250 million.

Speaker 4: Now, before I turn it back to Dave, I do want to invite you to take a look at refreshed slides we've included in the appendix of this presentation on our website. The analysis includes detailed assumptions on pricing and product mix information, and a bottoms-up cost breakdown for our integrated segments and the mini-mill business.

Now before I turn it back to Dave I do want to invite you to take a look at refreshed slides. We've included in the appendix of this presentation on our website. The analysis includes detailed assumptions on pricing and product mix information and a bottoms up cost breakdown for our integrated segments and the mini mill business and of course, you can always reach out to the investor.

Speaker 3: And, of course, you can always reach out to the Investor Relations team with any questions you may have. So, with that, I'll turn it back to Dave before we take your Q&A. Dave? Thanks, Jess. Before we move to Q&A, I'd like to thank the stockholders for the opportunity to provide an update on the Strategic Alternatives Review process.

<unk> team with any questions you may have so with that I'll turn it back to Dave before we take your Q&A safe. Thanks, Jess before we move to Q&A I'd like to thank the stockholders for the opportunity to provide an update on the strategic alternatives review process, we are flattered and excited by the robust interest in USD.

Jessica Graziano: We wanted to provide a segment view for 2024 on slide 12. Starting off with the North American flat-rolled business, we believe our flat-rolled segment can deliver approximately a billion dollars of EBITDA in 2024. Now, that's in line with the billion or so we believe through cycle looks like for this segment when you consider the impact of recent investments and improvements we've made over the last few years. We've talked a lot about the value being generated in our mini-mail segment, and we think it's only going to keep getting better.

Speaker 3: We are flattered and excited by the robust interest in U.S. steel and especially excited for our stockholders.

And especially excited for our stockholders, but.

Speaker 3: But we have provided all of the information we are going to give.

But we have provided all of the information we are going to give we kindly ask that you keep your questions focused on our operational and financial performance, which we will be more than happy to discuss.

Speaker 3: We kindly ask that you keep your questions focused on our operational and financial performance, which we will be more than happy to discuss. Kevin, let's open up the line for Q&A.

Jessica Graziano: We expect 2024, just at EBITDA, in the neighborhood of 600 million. On its way to a projected $1.3 billion of EBITDA in 2026 as Big River 2 hits run rate. We've action cost savings in Europe, which together with expected energy tailwinds should deliver about $100 million of EBITDA in 2024, offsetting impacts from a top line that's going to continue to be challenged and from an extended supply chain.

Kevin Let's open up the line for Q&A.

Speaker 2: Okay, thank you, Dave. And of course, as many of you know, we typically begin our calls with a question submitted from our retail and institutional investors platforms, say, technologies. But today, we believe we've adequately addressed these and are preparing marks. So I will now ask the operator to open the line for questions.

Okay. Thank you, Dave and of course as many of you know we typically begin our calls with a question submitted from our retail and institutional investors platform say technologies, but today. We believe we have adequately address these in our prepared remarks. So I'll now ask the operator to open the line for questions.

Speaker 1: Certainly, thank you very much. And if you'd like to register a question, please press the one by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If a question has been answered, I'd like to draw your registration. It is the one followed by the three. One moment, please, for our first question.

Certainly thank you very much and if you'd like to register a question. Please press the one provider, Florida on your telephone.

Jessica Graziano: And finally, tubular, a true transformation. What was recently a segment that was inconsistent and vulnerable to commodity cycles is now generating material and resilient EBITDA. We've seen tubular benefit from a structural improvement in the cost structure, in-sourced rounds production and proprietary connections, and a continued strong commercial backdrop. Our current estimates for 2024 will see tubular contribute about $300 million of EBITDA.

Here are three home pump technology request. If a question has been answered I'd like to draw your registration. It is the one followed by the three.

One moment please for our first question.

Speaker 1: Thank you and we'll proceed with our first question on the line from Bill Peterson with G.P. Morgan. Let's go right ahead with your question.

Thank you I will proceed with our first question on the line from Bill Peterson with Jpmorgan. Please go right ahead with your question.

Speaker 1: Yeah, a high good morning and thanks for taking the questions. Interesting you're putting out the 24 sort of illustrative guidance on EBITDA. Just for a clarify, you're using 750 I guess HRC just to make sure. And then also, can you give a little more detail on the underlying assumptions around input costs, energy, labor or inflation or any other things on the cost side?

Yes, hi, good morning, and thanks for taking the questions.

Just to put it out to 24 sort of illustrative guidance on EBITDA.

Jessica Graziano: Let's take a look at the free cash flow profile on slide 13. Our free cash flow profile has fundamentally changed over the last 10 years. Our annual average free cash flow generation has gone from essentially break even in the 2015-2019 period to what we estimate could average about a billion dollars in the 2021 to 2024 time frame. Again, as you consider what is driving our free cash flow outlook, it's three things, the decline in our strategic CAPEX requirements, the ramp-up of our strategic projects, and the decrease in capital intensity of our transformed footprint.

Clarify youre using 750, I guess HRC just to make sure and then also can.

Can you give a little more detail on the underlying assumptions around input costs energy labor inflation or any other things on the cost side.

Speaker 4: Hi there. Yes. Morning, Bill. So we are using 750. That's right. I'll start there. And then I'll give a little bit of color behind both NAFER and the mini mill segment.

Hi, there yes.

And bill So we are using some 50 that that's right I'll start there and then I'll give a little bit of color behind that.

With Napa and mini mill segment.

Speaker 4: Couple of things. So first off, clearly that $750 HRC is going to have some sensitivity around it, right? Just given that 30% of our shipments are sold on fixed price contracts.

A couple.

A couple of things so first off.

Clearly the that $750 HRC is going to have some sensitivity around it right just given that 30% of our shipments are sold on fixed price contracts.

Jessica Graziano: As you can see on slide 14, this has afforded us the flexibility to strengthen our balance sheet, invest in our strategy, and return capital to stockholders, checking the box on each of our capital allocation priorities. As we discussed earlier, our balance sheet is, as I like to say, strongest steel. We're advancing our strategic projects, and we have maintained our quarterly dividend. And while our buyback program is currently on a pause, we will continue to assess capital returns as appropriate, given the business will continue to generate excess cash.

Speaker 4: And our market-based contracts, particularly the quarterly ones, are going to exhibit a little less volatility than what we would experience in spot price movement.

And our market based contracts, particularly the quarterly ones are going to exhibit a little less volatility than what we would experience in spot price movements. So that plays through some of our estimates for the $1 billion that that we're expecting for Napa.

Speaker 4: So that plays through some of our estimates for the billion dollars that we're expecting for NAFR. We do believe that we will see a tailwind in coal costs.

We do believe that we will see a tailwind in coal costs.

Speaker 4: So 2024 coal costs are expected to be a tailwind. When you think about, you know, we sort of start off with lower cost space than the competition in coal. And we have a competitive advantage in our coal blinding ability.

'twenty 'twenty four coal costs are expected to be a tailwind when you think about we sort of start off with.

Jessica Graziano: I'll wrap up with our current view of the fourth quarter. Pricing across the segments will be a headwind in the quarter, and we expect sequentially lower EBITDA in the fourth quarter versus the third. We expect a sequential decline in flat-rolled segment EBITDA, reflecting lower pricing and volumes. This is due in part to lower spot prices, and the decreased volumes and associated costs from planned maintenance that's occurring in the fourth quarter. In the minimale segment, we expect lower steel prices and a planned maintenance outage to impact fourth quarter results, driving lower sequential EBITDA.

Lower cost base than the competition in coal and we have a competitive advantage in our coal blending abilities right. So when we put that together and we're looking out across commodity prices. We believe that's going to be a benefit in that number. We also believe raw materials, we're not going to go into much more detail by commodity barometer.

Speaker 4: Right, so when we put that together and we're looking out across commodity prices, we believe that's going to be a benefit in that number. We also believe raw materials, you know, we're not gonna go into much more detail by commodity, but raw materials as a whole will be a tailwind for us in the year as well. And then for now for, you know, that $100 million of cost benefits, right? That annualized number that we're seeing in 2024 is a significant driver as well.

<unk> as a whole will be a tailwind for us in the year as well.

And then for now for.

That $100 million of cost benefits right that annualized number that we're seeing in 2024 is a significant driver as well.

Speaker 4: As far as Big River, right, in terms of the mini-mill, we do see an increase in the shipments that are expected, particularly when you think about the impact of the additional lines, right, the NGO line at about 100,000 tons and additional shipments from the CGL-2 and Big River, depending on the timing of when those get started. We do also see better product.

As far as Big River right in terms of the mini mill, we do see.

Jessica Graziano: These items are expected to be partially offset from lower metallics costs. In Europe, we expect Q4 EBITDA to be consistent with Q3 performance, as we expect lower raw material costs, and the absence of planned outage spending to broadly offset pricing headwinds during the quarter.

An increase in the shipments that are expected, particularly when you think about the impact of the additional lines right. The NGL line at about 100000 tons.

And additional shipments from <unk> and Big River, depending on the timing of when those get started.

Jessica Graziano: And finally, we also expect sequentially lower EBITDA at our tubular operations. That reflects decreased average selling prices, partially offset by shipments returning to more normalized levels.

We do also see better product mix as we think about the value added benefit to the portfolio and bringing those lines up and running right NGL and <unk> specifically.

Jessica Graziano: Taken together, we expect fourth quarter adjusted EBITDA to be between $200 and $250 million.

Speaker 4: as we think about, you know, the value-added benefit to the portfolio in bringing those lines up and running, right, NGO and CGL specifically.

Speaker 4: We do also see additional benefit in the mini-mill and that's playing through that $600 million number from the continued benefit coming out of Gary Fig and within the metallics class.

We do also see additional benefit in the mini mill and that playing through that $600 million number from the continued benefit coming out of Gary Peg.

Jessica Graziano: Now, before I turn it back to Dave, I do want to invite you to take a look at refresh slides we've included in the appendix of this presentation on our website. The analysis includes detailed assumptions on pricing and product mix information, and a bottoms up cost breakdown for our integrated segments and the minimale business. And of course, you can always reach out to the investor relations team with any questions you may have.

And within the metallics costs so.

Speaker 4: So, I think that gives a high level of probably some of the biggest puts and takes within those numbers if there's something more specific bill, if you'd ask a second question.

I think I think that gives a high level of probably some of the biggest puts and takes.

Within those numbers, if there's something more specific bell.

If you'd ask a second question.

Speaker 2: Yeah, no, that's a good overview. What did I ask about, I guess, what you're looking for in terms of a market environment that turned grants to the B back on? I mean, you know, we've seen prices improve here in recent weeks, but what are the kind of, you know, signpost or guideplister looking at before you turn that asset back on?

Yes.

That's a good overview.

David Burritt: So with that, I'll turn it back to Dave before we take your Q&A. Dave? Thanks, Jess.

I wanted to ask about I guess, what youre looking for in terms of a market environment.

David Burritt: Before we move to Q&A, I'd like to thank the stockholders for the opportunity to provide an update on the strategic alternatives review process. We are flattered and excited by the robust interest in U.S, deal, and especially excited for our stockholders. But we have provided all of the information we are going to give. We kindly ask that you keep your questions focused on our operational and financial performance which we will be more than happy to discuss.

Grants to be back on I mean, we've seen prices improve here in recent weeks.

What are the kind of signposts or guidepost youre looking at before you turn that asset back on.

Speaker 4: Yeah, maybe I'll just make a, this is Dave, just make a few comments, then Jess, I'll turn it to you. The key for us is we got to be nimble and respond to whatever the market dynamics are. And certainly the update we've heard from the UAW and Ford is clearly a positive sign. But negotiations with Stellantis and General Motors remain outstanding. It's clearly something we're watching closely as the days go by. And maybe, Jess, you just give a little more color if you should. Sure, Dave, thank you. So clearly, as Dave just mentioned, it's a positive outcome to see the settling of the strike between Ford and the UAW. But we are still watching for both Stellantis and GM to see what happens. Auto makes up about 30% of the flat-rolled segment.

Yes, maybe just make this is Dave just to make a few comments and just I'll turn it to you.

The key for US is we got to be nimble and respond to whatever the market dynamics are and certainly the update we've heard from the UAW Ford is clearly a positive sign but the negotiations with the Atlantis and General Motors remain outstanding it's clearly something that we're watching closely as the days go by an and.

Kevin Lewis: Kevin, let's open up the line for Q&A. Okay, thank you, Dave. And of course, as many of you know, we typically begin our calls with a question submitted from our retail and institutional investors platforms, say technologies.

Maybe just you just give a little more color picture sure. Thank you.

So clearly as David just mentioned, it's a positive outcome to see.

Kevin Lewis: But today, we believe we've adequately addressed these in our prepared remarks.

The settling of the strike between Ford and the UAW, but we are still watching for both still anzus and GM to see what happens at auto makes up about 30% of the flat rolled segment.

Operator: So I will now ask the operator to open the line for questions. Certainly, thank you very much. And if you'd like to register a question, please press the one by the four on your telephone. You will hear three tone prompt, technology requests. If a question has been answered, like to draw your registration, it is the one followed by the three, one moment, please, for our first question.

Speaker 4: And so while we also have exposure to other transplants which have not been impacted, we did take the impact of the strike into consideration on the decision to temporarily idle granite city. So as we look through the quarter, we're really going to focus on the order book, right? And ultimately make a decision on whether or not we see that order book activity re-accelerate.

And so while we also have exposure to other transplants, which have not been impacted.

We did take the the impact of the strike into consideration.

On the decision to temporarily idle granite city. So as we look through the quarter, we're really going to focus on the order book right and ultimately make a decision on whether or not we see that order book activity Reaccelerate.

William Peterson: Thank you. And we'll proceed with our first question on the line from Bill Peterson with JP Morgan. Let's go right ahead with your question. Yeah, hi, good morning and thanks for taking the questions. Interesting, you're putting out the 24 sort of illustrative guidance on EBITDA. Just for a clarify, you're using 750, I guess HRC is just to make sure. And then also, can you give a little more detail on the underlying assumptions around input costs, energy, labor or inflation or any other things on the cost side?

Speaker 4: and use that as the guide to decide on making the most efficient use of the footprint and then get to ultimately whether or not we decide to turn granted city back on. It's too early at this point to be-

And use that as the guide to decide on making the most efficient use of the footprint.

And then get to ultimately.

Or not we decide to turn granite city back on.

Just it's too early at this point to be able to give an update on that.

Speaker 1: Thank you very much and we'll proceed with our next question on the line. It is from the line of Alex Hacking with Citi. Go right ahead.

Thank you very much.

Our next question on the line.

William Peterson: Hi there, yes. Morning, Bill. So we are using some 50. That's right. I'll start there. And then I'll give a little bit of color behind both NAFOR and the mini mill segment. A couple of things. So first off, clearly that 750 dollar HRC is going to have some sensitivity around it, right? Just given that 30% of our shipments are sold on fixed price contracts. And our market-based contracts, particularly the quarterly ones, are going to exhibit a little less volatility than what we would experience in spot price movements.

This is from the line of Alex hacking with Citi go right ahead.

Okay.

Speaker 5: Yeah, morning. Thanks for the thanks for the call. So I guess first question on on Big River, the new mill, one that was announced.

Yeah morning, Thanks for the thanks for the call.

I guess first question on that on Big River, the new mill.

One that was announced.

Speaker 5: You know, I think you guys said that that that would not necessarily represent incremental tons into the marketplace.

I think you guys said that those that that would not necessarily represent incremental tons into the marketplace.

Speaker 5: You know, as we approach the thought of that mill next year, is that still the strategy, or will you take more of a market-based approach and, you know, see how demand is? Thank you.

As we approach the startup of that mill next year.

Is that still the strategy or will you take more of a market based approach and.

And.

See how demand is thank you.

William Peterson: So that plays through some of our estimates for the billion dollars that we're expecting for NAFOR. We do believe that we will see a tailwind in coal costs, right? So 2024 coal costs are expected to be a tailwind when you think about, you know, we sort of start off with lower cost space than the competition in coal. And we have a competitive advantage in our coal blinding abilities, right? So when we put that together and we're looking out across commodity prices, we believe that's going to be a benefit in that number.

Speaker 3: I'd say yes, Alex. Big rivers progressing well. And obviously this is the driver to incremental EBITDA in 2024.

I'd say, yes, Alex Big river's progressing well and obviously this is the driver to incremental EBITDA in 2024, and I think thats one of the reasons that we focused on that today with Jeff providing additional color, but the opportunity to align the market on the tremendous value is.

Speaker 3: And I think that's one of the reasons that we focused on that today with Jeff providing additional color, but the opportunity to align the market on the tremendous value is obviously going to be happening next year. We're tracking towards a second half 2024 startup, and we're going to be generating EBITDA, of course, next year.

Obviously going to be happening in the next year, we're tracking towards.

Second half 2020 for startup in and we're going to be generating EBITDA.

EBITDA of course next year.

Speaker 4: Jess, I think you got maybe some more to say on that. Yeah, I think it's similar to, you know, as you think about the footprint and the impact on incremental volumes. I think it's a similar conversation as we just had for Granite City, which is we're going to look at the order book, right? We're going to make sure that we're always balanced in terms of the way we think about our capacity with.

William Peterson: We also believe raw materials, you know, we're not going to go into much more detail by commodity, but raw materials as a whole will be a tailwind for us in the year as well. And then for NAFOR, you know, that $100 million of cost benefits, right? That annualized number that we're seeing in 2024 is a significant driver as well. As far as Big River, right, in terms of the minimale, we do see an increase in the shipments that are expected, particularly when you think about the impact of the additional lines, right?

Jeff I think you've got maybe some more to say on that yeah. I think it's similar to as you think about the footprint and the impact on incremental volumes I think it's a it's a similar.

Conversation as we just had for granite city, which is we're going to look at the order book right. We're going to make sure that we're always balanced in terms of the way, we think about our capacity with with our footprint now we're not going beyond 2024 today, so as we make decisions.

Speaker 4: with our footprint. Now, we're not going beyond 2024 today. So as we make decisions in the future, it's too early to be able to talk about any other changes to the footprint as we bring Big River to online and we start to look at the volumes that we expect will come into the market from BR2.

And in the future, it's too early to be able to talk about any other changes to the footprint as.

William Peterson: The NGO line at about 100,000 tons and additional shipments from CGL2 and Big River, depending on the timing of when those get started. We do also see better products mix as we think about, you know, the value added benefit to the portfolio in bringing those lines up and running, right, NGO and CGL specifically. We do also see additional benefit in the minimale and that's playing through that $600 million number from the continued benefit coming out of Gary Fig or within the metallics cost.

As we bring big River to online and we start to.

Look at the volumes that we expect will come into the market from BR to specifically in 2024, right, we're really kind of limiting our conversation today to what we see the level of visibility we have for 2024, but obviously those decisions our real time ones that we make as far as.

Speaker 4: specifically in 2024, right? We're really kind of limiting our conversation today to what we see, you know, the level of visibility we have for 2024. But obviously those decisions are real time ones that we make as far as how to best align our footprint with what we're seeing across the market. And we'll continue to do that.

As how to best align our footprint with what we're seeing across the market and we'll continue to do that.

Speaker 5: Okay, thanks. And then a follow-up. I have in my notes that all the strategic CapEx is done in 2024 and there's no carryover into 2025. Is that correct?

David Burritt: So, you know, I think I think that gives a high level of probably some of the biggest puts and takes within those numbers, if there's something more specific bill, if you'd ask a second question. Yeah, no, that's a good overview. I wanted to ask about, I guess, what you're looking for in terms of a market environment to turn grants to the B back on. I mean, you know, we've seen prices improve here in recent weeks, but what are the kind of signposts or guide posts you're looking at before you turn that asset back on.

Okay. Thanks, and then a follow up I have in my notes that all the strategic Capex is done in 2024 and there is no carryover into 2025 is that correct.

Speaker 4: There's a little bit of timing, so right now we're looking at, you know, let's call it maybe $50 to $100 million of some cash outlay, not commitments, cash outlay that would flow into 2025, but nothing material. The bulk of it, I mean, almost all of it really, is going to be completed by 2024. Okay, thanks. Best of luck.

There's a little bit of timing so right now we're looking at let's call it maybe $50 million to $100 million of.

Some cash outlay not commitments cash outlay that would flow into 2025, but nothing material.

The bulk of it I mean, almost all of it really is going to be completed by 2024.

David Burritt: Yeah, maybe I'll just make a, this is Dave, just make a few comments then, Jess, I'll turn it to you. The key for us is we got to be nimble and respond to whatever the market dynamics are. And certainly the update that we've heard from the UAW and Ford is clearly a positive sign. But negotiations with Stellantis and General Motors remain outstanding. It's clearly something we're watching closely as the days go by and maybe Jess, you just give a little more color if you should.

Okay. Thanks best of luck with everything thanks, Alex.

Speaker 1: Thank you very much. We'll get our next question on the line from Carlos de Alba with the Morgan Stanley . Please go right ahead.

Thank you very much.

Question on the line.

Steve <unk> with Morgan Stanley. Please go right ahead.

Yes. Good morning, Thank you.

We saw news this morning that you're still is.

Increasing <unk> prices.

All flat prices by about $100 per ton.

I just wanted to maybe you could confirm this.

David Burritt: Sure, Dave, thank you. So clearly, Dave just mentioned, you know, it's a positive outcome to see the settling of the strike between Ford and the UAW. But we are still watching for both Stellantis and GM to see what happens. Right, auto makes up about 30% of the flat-rolled segment. And so while we also have exposure to other transplants which have not been impacted, we did take the impact of the strike into consideration on the decision to temporarily idle granite city.

Quarter can you offer what did you see in the marketplace.

Hum.

To support these decision if indeed, you're going ahead with it.

Speaker 3: Yeah, I'd say, yeah, I confirm that, of course, and.

I'd say the confirm that of course.

Speaker 6: Obviously, we got a full order book for this quarter, so a lot of the price increases that will come will likely show up in the first quarter of next year. But we're seeing a lot of different drivers across our four operating segments. And maybe, Kevin, I'll ask you just to go through each one of these real quickly here to give them a sense of what those drivers are.

Obviously, we've got a full order book for this quarter. So a lot of the price increases that will come will likely show up in the first quarter of next year, but.

We're seeing a lot of different.

Drivers across our four operating segments.

Maybe Kevin I'll ask you just to go through each one of these real quickly here to give them a sense of what those drivers are.

David Burritt: So as we look through the quarter, we're really going to focus on the order book, right, and ultimately make a decision on whether or not we see that order book activity re-accelerate. And use that as the guide to decide on making the most efficient use of the footprint and then get to ultimately whether or not we decide to turn granite city back on. Just it's too early at this point to be able to give an update on that. Thank you very much.

Speaker 2: Yeah, thanks, Dave. Happy to do that. And good morning, Carlos. So as Dave mentioned, we were out with $100 a ton price increase earlier this week.

Yes, Thanks, Dave happy to do that and good morning, Carlos So as Dave mentioned, we were out with $100 a ton price increase earlier. This week. We believe it's very much supported by the strength that we're seeing in the order book and the continued momentum that continues to be built out here as we conclude calendar year 2024. So if you think about.

Speaker 2: We believe it's very much supported by the strength that we're seeing in the order book and the continued momentum that continues to be built here as we conclude calendar year 2024. So if you think about automotive, we know it's been impacted by UAW work stoppage, but hopefully with some light at the end of the tunnel, we think that will rectify itself in the short term and will continue to support demand through our automotive portfolio.

Alexander Hacking: I will proceed with our next question on the line.

We know it's been impacted by the UAW work stoppage, but hopefully with some light at the end of the tunnel. We think that we think that will rectify itself in the short term and we will continue to support support demand through our automotive portfolio.

Alexander Hacking: It is from the line of Alex Hacking with city. Go ahead ahead. Yeah, morning. Thanks for the, thanks for the call. So I get first question on on Big River, the new mill. One that was announced. You know, I think you guys said that that that would not necessarily represent incremental tons into the marketplace. You know, as we approach the thought of that mill next year, is that still the strategy or will you take more of a market-based approach and see how demand is?

Speaker 2: You know, we have a unique and diverse end market exposure through our product portfolio. So we've benefited from increase in inquiries and order activity through line pipe and energy markets.

We have a unique and diverse end market exposure through our product portfolio. So we benefited from increase in inquiries and order activity through line pipe and energy markets appliance sector remains strong on track to achieve its third best year ever.

Speaker 2: applying sector remains strong, you know, on track to achieve its third best year ever in appliances.

Appliances construction has been stable and service center activity I think.

Speaker 2: Construction's been stable and service center activity, I think, you know, from our vantage point is beginning to increase, and we're seeing higher levels of order activity in the fourth quarter. So with inventories low and continued, you know, strong demand through our diverse and markets, we think the pricing momentum is real and certainly excited about the increase that we announced this week.

From our vantage point is beginning to increase and we're seeing higher levels of order activity in the fourth quarter, So with inventories low and continued strong demand for our diverse end markets, we think the need.

I think the pricing momentum.

Alexander Hacking: Thank you. I'd say yes, Alex, you know, Big River is progressing well and obviously this is the driver to incremental EBITDA in 2024. And I think that's one of the reasons that we focused on that today with Jeff providing additional color, but the opportunity to line the market on the tremendous value is obviously going to be happening next year. We're tracking towards a second half 2024 startup and we're going to be generating EBITDA course next year.

It is real and certainly.

Excited about the increase that we announced this week in Europe, we do expect higher volumes versus the third quarter. We have all three blast furnaces operating for the quarter. We did have a two month planned outage.

Speaker 2: In Europe , we do expect higher volumes versus the third quarter. We have all three blast furnaces operating for the quarter. We did have a two month planned outage.

Speaker 2: in Europe . So while the man remains, sluggish is probably how we would call it. We still will be in a position to run all three blast furnaces.

In Europe, so while demand remains sluggish is probably how we would call it.

We still will be in a position to run all three blast furnaces, and then tubular oil and gas markets are improving they remain quite strong and we've seen rig counts tick up imports have declined throughout up from peak levels, but still remain obviously elevated and with reduced inventories in the system, we see certainly improved.

Speaker 2: And then tubular. Oil and gas markets are improving. They remain quite strong. We've seen rig counts tick up. Imports have declined from peak levels but still remain.

Alexander Hacking: Jeff, I think you got maybe some more to say on that. Yeah, I think it's similar to, you know, as you think about the footprint and the impact on incremental volumes, I think it's a, it's a similar conversation as we just had for granted city, which is we're going to look at the order book. Right, we're going to make sure that we're always balanced in terms of the way we think about our capacity with, with our footprint.

Speaker 2: obviously elevated and with reduced inventories in this system we see certainly improve Q4 shipments. So all in all I think we're starting to see a positive momentum continue to be built in.

Q4 shipments so all in all I think we're starting to see a.

Positive momentum continued to be built and we.

Speaker 2: We expect that to begin to flow through in Q4 and put us in a very good position to start 2024.

We expect that to begin to flow through in Q4 and put us in a very good position to start 2024.

Thank you Kevin.

Another question.

Speaker 7: Given that you are well ahead, well advanced in your transformation and with your capital projects on time and on budget.

Alexander Hacking: Now, we're not going beyond 2024 today, so as we make decisions, you know, in the future, right, it's too early to be able to talk about any other changes to the footprint as we bring Big River to online. And we start to, you know, look at the volumes that we expect will come into the market from BR2 specifically in 2024, right, we're really kind of limiting our conversation today to what we see, you know, the level of visibility we have for 2024. But obviously those decisions are real time ones that we make as far as how to best align our footprint with what we're seeing across the market and we'll continue to do that.

Given that you are well well ahead well advanced in your transformation in with your capital projects.

On time and on budget.

Speaker 7: Is there any timing as to when would you make a decision on whether to increase the dividend or buybacks? Or establish a capital allocation framework that either links returns to shareholders or money cash to shareholders to EBD minus sustaining cap eggs or fake cash flow or some sort of that that that that that

Is there any timing as to when would you make a decision on whether to increase the dividend.

Or buybacks.

Nor.

Establish a.

Capital allocation framework that either lease returns to shareholders of money cash flows to shareholders too.

EBITDA minus sustaining capex or free cash flow, so on sort of that.

That metric.

Yes.

Carlos you've seen our capital allocation.

Speaker 4: Process if you will and the priorities for cash, and we're going to be staying with that But just maybe you talk a little bit more specifically about The dividend question sure sure absolutely Well as I mentioned in prepared remarks. I mean as we continue with the strategic alternatives review process, right? It's not that we aren't prioritizing our capital allocation framework. I mean I'm on the contrary right we've been checking boxes across those priorities

Process, if you will and the priorities for cash and we're going to be staying with that but just maybe you could talk a little bit more specifically about.

Alexander Hacking: Okay, thanks, and then a follow-up. I have in my notes that all the strategic capex is done in 2024, and there's no carry-over into 2025. Is that correct? There's a little bit of timing, so right now, we're looking at, you know, let's call it maybe $50 to $100 million of some cash outlay, not commitments, cash outlay, that would flow into 2025, but nothing material. The bulk of it, I mean, almost all of it. Really, it's going to be completed by 2024. Okay, thanks. That's what's with everything. Thanks, Alex.

The dividend question sure sure absolutely.

Carlos Alba: Thank you very much.

As I mentioned in prepared remarks, I mean.

As we continue with the strategic alternatives review process right.

It's not that we are in prioritizing our capital allocation framework I mean on the contrary right we've been checking boxes across those priorities as we manage the business every day, but as far as what's next right. That's a conversation that is.

Speaker 4: as we manage the business every day, but as far as.

Speaker 4: what's next, right? That's a conversation that if and when appropriate, we would have with our board, right? Right now, the focus is on completing a

If and when appropriate we would have with our board right right now the focus is on completing a.

Speaker 4: fair and adequate process. The board is fully committed to and engaged in that process. And as the conversation on capital allocation and priorities with dividend and buybacks will be something we'll have, again, if and when appropriate.

Fair and adequate process. The board is fully committed to and engaged in that process.

Carlos Alba: We'll get to our next question on the line from Carlos Alba with the Morgan Stanley. Please go right ahead. Yeah, good morning. Thank you. Just we saw news this morning that you still is increasing horoscope prices or all flat prices by about a hundred dollars per ton. I just wanted to maybe as you could confirm this, what color can you offer, what are you seeing in the marketplace that you support this decision if indeed you're going ahead with it?

And as.

The conversation on capital allocation and priorities with dividend and buybacks will be something we will have again, if and when appropriate. So I appreciate the question.

Speaker 4: So, I appreciate the question. You know, it's clear that as we think about where we are in, to your point, the best for all process, right, there is a tremendous free cash flow unlock that's coming for us, as Dave says, as we get to the other side of the mountain on CapEx, right? So, clearly, we are focused on being the best stewards of that cash and we'll have conversations, as appropriate, on what to do with that cash.

It is clear that as we think about where we are in to your point. The the best for all process right. There is a tremendous free cash flow unlock that's coming for us as Dave says as we get to the other side of the mountain on Capex right. So clearly.

Carlos Alba: I can confirm that, of course, and obviously we got a full order book for this quarter, so a lot of the price increases that will come will likely show up in the first quarter of next year, but we're seeing a lot of different. Drivers across our four operating segments, and maybe Kevin, I'll ask you just to go through each one of these real quickly here to give them a sense of what those drivers are.

We are focused on being the best stewards of that cash and we'll have conversations as appropriate on what to do with that cash.

Speaker 6: We're focused on very clearly maximizing stockholder value in this strategic process.

We're focused on very clearly maximizing stockholder value in this.

<unk> processes has put us in a really good place for unleashing a lot of value in and you know you heard just his remarks about.

Speaker 6: put us in a really good place for unleashing a lot of value. And you know, he heard just his remarks about, you know, the stock buy back program was delayed, frankly, for confidentiality reasons, right? Because we have lots of information of what's going on here. So we can't actually do that program. So we've got to get through this, obviously. And...

The stock buyback program was delayed frankly for confidentiality reasons right because we have a lots of information of what's going on here. So we can't actually do that program. So we got to get through this obviously and you can count on us in this.

Carlos Alba: Yeah, thanks, Dave. Happy to do that and good morning, Carlos. So as Dave mentioned, we were out with a hundred dollar a ton price increase earlier this week. We believe it's very much supported by the strength that we're seeing in the order book and the continued momentum that continues to be built here as we conclude calendar year 2024. So think about automotive. We know it's been impacted by the UAW work stoppage, but hopefully with some light at the end of the tunnel, we think that we think that will rectify itself in the short term and will continue to support sport demand through our automotive portfolio.

Speaker 6: You can count on us in this environment, the board will make a great decision to maximize stockholder value. In fact, every time we meet on this, we talk about our jobs or our fiduciary duties to maximize stockholder value within the code of conduct, our Steel Principles.

In this environment the board will make a great decision to maximize stockholder value.

In fact every time, we meet on this we talk about our jobs are.

Our fiduciary duties to maximize stockholder value within the code of conduct our steel principles. So we're committed to doing that and then we.

Speaker 6: So we're committed to doing that. And then we can talk about some of these other issues, but our priorities are getting through this strategic alternative process and maximizing that value.

Carlos Alba: You know, we have a unique and diverse and market exposure through our product portfolio. So we've benefited from increase in inquiries and order activity through line pipe and energy markets. Appliance sector remains strong, you know, on track to achieve its third best year ever in appliances, instructions been stable and service center activity. I think, you know, from our vantage point is beginning to increase and we're seeing higher levels of order activity in the fourth quarter.

Can talk about some of these other issues, but our priorities are getting through this strategic alternative process and maximizing that value.

Speaker 1: Thank you very much. We'll proceed with our next question. On the line is Tristan Gresser, Exane CNV Paribus. Please go right ahead.

Thank you very much our next question on the line.

Kristen grocer.

Can be purpose. Please go right ahead.

Speaker 8: Yes, hi, good morning and thank you for taking my questions.

Yes, hi, good morning, Thank you for taking my questions.

Speaker 8: The first one is on Europe . It looks like you operate full again, despite the poor market conditions. So, if I understood correctly, you don't anticipate capacity cuts there and maybe shutting down the furnace like last year?

First one is on Europe. It looks like you operate full again.

Carlos Alba: So with inventory is low and continued, you know, strong demand through our diverse and markets, we think the, you think the pricing momentum is real and certainly really excited about the increase we announced this week. In Europe, we do expect higher volumes versus a third quarter. We have all three blast furnaces operating for the quarter. We did have a two month planned outage in Europe. So while demand remains sluggish is probably how we would call it, you know, we still will be in a position to run all three blast furnaces.

Despite the poor market conditions.

If I understood correctly, you don't anticipate capacity cuts, there and maybe shutting down at the furnace like last year.

Speaker 8: And also you guide for stable a bit quarter on quarter, but if I look at spot margins there, demand and all the indicators are pretty negative. So why is it not as bad as last year and why your message is a bit more constructive this year versus last year? That's my first question.

And also your guide was stable quarter on quarter, but if I look at spot margins. There demand all the indicators are pretty negative. So why is it not as bad as last year.

And while your message is a bit more constructive this year versus last year. That's my first question.

Carlos Alba: And then tubular oil and gas markets are improving. They remain quite strong. And we've seen read counts, tick up imports have declined throughout from peak levels, but still remain. Obviously elevated and with reduced inventories in this system, we see certainly improved Q4 shipment. So all in all, I think we're starting to see a positive momentum continue to be built. And we expect that to begin to flow through in Q4 and put us in a very good position to start 2024. Thank you Kevin.

Speaker 2: Thanks, Tristan. This is Kevin. If we look at the fourth quarter, for your right, we're kind of guiding to a flat quarter-over-quarter level of performance. There's some moving pieces, obviously, that uniquely impact the third quarter, and then will really start to reverse themselves in the fourth quarter, and that's being some of the significant outage work that was done.

Thanks, Chris.

As Kevin if we look at the fourth quarter for Europe, you're right, we're kind of guiding to a flat quarter over quarter level of performance. There are some moving pieces, obviously that uniquely impacted third quarter and then we'll really start to reverse themselves in the fourth quarter and thats being some of the significant outage work that was done in <unk>, we do expect to.

Speaker 2: in 3Q. We do expect to have an order book that supports three blast furnaces worth of production, and we'll see that really generate, you know, sequentially higher shipments in the fourth quarter versus the third quarter. Order of magnitude maybe somewhere between 30,000 and 40,000 tons quarter over quarter of incremental load.

Have an order book that supports three blast furnaces worth of production and we will see that really generates sequentially higher shipments in the fourth quarter versus the third quarter order of magnitude, maybe somewhere between 30% and 40000 tonnes quarter over quarter of incremental volumes. We are seeing proceeds often as you mentioned in the fourth quarter.

Carlos Alba: Just another question. Given that you are well ahead, well advanced in your transformation and with your capital projects on time and on budget, is there any time in as to when would you make a decision on whether to increase the dividend or buybacks? I know or establish a capital allocation framework that either links returns to shareholders or money cash flows to shareholders to EB Dam and sustaining cap eggs or free cash flow or some sort of that metric.

Speaker 2: We are seeing proceeds soften, as you mentioned, in the fourth quarter, but with our continued focus on costs, some of the operating efficiencies that we will be able to generate in the fourth quarter and some raw material tailwinds, we think the business will be in a position in Slovakia to deliver a stable EBITDA quarter on quarter.

But with our continued focus on cost some of the operating efficiencies that we will be able to generate in the fourth quarter and some raw material tailwind. We think the business will be in a position in Slovakia to deliver stable EBITDA quarter on quarter.

There is no dollar or euro.

Challenge.

Speaker 6: where we are today, but just keep in mind also that this business has been an extraordinary well run. These guys know how to run the operations very, very well. This last year, I think the EU steel demand is expected to fall 5%, and it's more like expected to rebound 6%. So how all of that transfers through our numbers into this next year, we'll have to see, but it is not as strong, and frankly as what it has been in the past, it's a challenged business for sure in the short time.

We are today, but just keep in mind also that this business has been extraordinary well run. These guys know how to run the operations very very well. This this last year I think the EU steel demand is expected to fall, 5% and it's more like expected to rebound, 6%. So how all of that transfers through our numbers into this next year, we will have to see but.

Carlos Alba: Yeah, Carlos, you've seen our capital allocation process, if you will, in the priorities for cash and we're going to be staying with that, but just maybe you talk a little bit more specifically about the dividend question. Sure, sure, absolutely. Well, as I mentioned in prepared remarks, I mean, as we continue with the strategic alternatives review process, right? It's not that we are prioritizing our capital allocation framework, I mean on the contrary, right?

It is not as strong and frankly as what it has been in the past, it's a challenged business for sure in the short term.

Speaker 8: All right, that's that that's yours and actually it brings me to a quick fall out there for for next year. I mean, a hundred million a bit off for the business. It's pretty much what the COVID levels. I mean, expectation are we would see some rebound in demand at this up front demand. So is there something in the business that is structurally different? Or are you just being really conservative on how the first half of the year will shape out there?

Alright.

That's clear.

Actually brings me to two quick follow up there for for next year, I mean, the 100 million a bit so.

Carlos Alba: We've been checking boxes across those priorities as we manage the business every day, but as far as what's next, right? That's a conversation that, if and when appropriate, we would have with our board, right? Right now, the focus is on completing a fair and adequate process. The board is fully committed to and engaged in that process. And as, you know, the conversation on capital allocation and priorities with dividend and buybacks will be something we'll have, again, if and when appropriate.

The business is pretty much what the coverage levels.

I mean, the expectation we would see some rebound in demand at these upfront demand.

So is there something in the business that is structurally different.

Are you just being really conservative on.

The first half of the year will shape out there.

So if we think about the performance in 2024 versus 2023, let me speak to some of the favorable changes that we expect to see in this segment.

Speaker 2: So if we think about performance in 2024 versus 2023, you know, let me speak to some of the favorable changes that we expect to see in the segment. First, energy should be a tailwind for us in 2024 versus 2023.

Carlos Alba: So I appreciate the question. You know, it's clear that as we think about where we are in to your point, the best for all process, right? There is a tremendous free cash flow unlock that's coming for us. As Dave says, as we get to the other side of the mountain on CapEx, right? So clearly, we are focused on being the best stewards of that cash and we'll have conversations as appropriate on what to do with that cash.

First energy should be a tailwind for us in 2024 versus 2023, we do expect to see increased shipment volume once again with three blast furnaces running throughout the year recall the two month outage that we had in the third quarter of this year plus we did have an idled furnace to start calendar year 2023.

Speaker 2: We do expect to see increased shipment volume once again with three blast furnaces running throughout the year.

Speaker 2: Recall the two-month outage that we had in the third quarter of this year, plus we did have an idle furnace to start calendar year 2023, so that's a year-on-year change.

That's a year on year change.

Speaker 2: We will see likely some raw material headwinds, whether that's in iron ore pellets using the IDEX kind of as our barometer for costs, or with coking coal versus 2023, as well as some higher labor and CO2 costs. But all that taken together gives us a line of sight to sequentially stable EBITDA, as well as FX being flat on a year-over-year basis.

We will see likely some raw material headwinds, whether that's in iron ore pellets, using the IDEXX kind of as a barometer for cost or with coking coal versus 2023, as well as some higher labor and <unk> costs.

Carlos Alba: We're focused on very clearly maximizing stockholder value and this strategic process is, as put us in a really good place for unleashing a lot of value. And you know, you heard just his remarks about, you know, the stock buyback program with delayed, frankly, for confidentiality reasons, right? Because we have lots of information of what's going on here. So we can't actually do that program. So we've got to get through this, obviously.

But all of that taken together gives us a line of sight to sequentially stable EBITDA.

As well as FX being flat on a year over year basis.

Speaker 8: All right, that's fair. And just a quick one on CO2 costs you just mentioned, is that a big hike into next year?

Alright, that's all right that's fair and just a quick one on C. O. Two costs. You just mentioned is that a big hike into next year.

Speaker 2: It will certainly be a headwind. I don't think we're in a position right now to assess an absolute value, the level of year-on-year change, but you should think about it as a year-on-year headwind.

It will certainly be a headwind I don't think we're in a position right now to assess an absolute values the level of year on year change, but you should think about it as a year on year headwind.

Carlos Alba: And you can count on us in this environment. The board will make a great decision to maximize stockholder value, because we, in fact, every time we meet on this, we talk about our jobs, our fiduciary duties, to maximize stockholder value within the code of conduct, our steel principles. So we're committed to doing that. And then we can talk about some of these other issues, but our priorities are getting through this strategic alternative process and maximizing that value. Thank you very much.

Kristin Gresser: We'll put you in the next question on the line.

Speaker 8: All right, that's that's very clear. And maybe my second question, given that that was all Europe is a bit more on capital allocation and

Alright thats.

That's very clear.

My second question given that that was all Europe is a bit more on capital allocation.

Speaker 8: and putting the strategy process aside, I think, you know, looking for 2025, what would really be the plan after Big River 2 from the point of view of management? Is there, you know, a Big River 3 somewhere in the future, it seems that is, you know, the strategy that is maximizing a shoulder value, or do you expect some time off in 2025 on growth and, you know, pose a bit to growth and reward shoulders a bit more? What kind of is a strategy after Big River 2?

And putting the strategy process aside I think looking forward 2025.

Really beat the plan after a big river to from from the point of view of management is there a big river three somewhere in the future. It seems that is the <unk>.

Strategy that is maximizing shareholder value or do you expect some some time off in 2025 on growth.

Kristin Gresser: There's some Kristen Grusser, XA, CNB, Parabus. The short ahead. Yes, I good morning.

Those a bit grow within reward shareholders a bit more what what's kind of is a strategy thats a big river too.

Kristin Gresser: Thank you for taking my questions. The first one is on Europe. It looks like you operate full again, despite the poor market conditions. So if I understood correctly, you don't anticipate capacity cuts there and maybe shutting down a furnace like last year. And also you guide for stable a bit quarter on quarter, but if I look at spot margins there, demand, all the indicators are pretty negative. So why is it not as bad as last year and why your message is a bit more constructed this year versus last year?

Sure.

Speaker 4: I have to say, you're getting a little greedy on this call. I just gave you 2024. Now, listen, we're not going to go that far on this call right now, right? We feel very comfortable with the path we see for 2024. We're very comfortable with talking about what we expect the financial impacts of that are going to look like, but we're not going farther than that today.

I have to say youre getting a little greedy on this call I just gave you 2024.

Now, let's say.

We're not going to to go that far on this call right now right, we feel very comfortable with the path. We see for 2024, we're very comfortable with talking about what we expect the financial impacts of that are going to look like but we're not going farther than that today.

Speaker 8: good thing we didn't give him any more he'd be asking for 2020. Did you imagine? Yeah. No, that's fair and I appreciate the additional disclosure. Are you provided? Thank you. That's all from. Thank you.

It's a good thing we didn't give them any more he basket for 2020 could you imagine.

No.

Kristin Gresser: That's my first question. Thanks, Tristan. If this is Kevin, if we look at the fourth quarter for your right, we're kind of guiding to a flat quarter over quarter level of performance. There's some moving pieces, obviously, that uniquely impacted third quarter. And then we'll really start to reverse themselves in the fourth quarter and that's being some of the significant outage work that was done in 3Q. We do expect to have an order book that supports three blast furnaces worth of production.

That's fair and I appreciate the additional disclosure you provided thank you thats all from debut.

Speaker 1: Thank you. We'll get to our next question on the live from Gordon Johnson with GLGA Research. Please go right ahead.

Thank you.

Next question on the line from Gordon Johnson with <unk>.

<unk> research. Please go ahead.

Speaker 9: Big guys, we have some results. Thank you. It's a quick question for me. I mean, a lot of the questions have been asked. So maybe I can ask a tough one.

Hey, guys congrats on the results. Thank.

Thank you and just a quick question for me I mean, a lot of a lot of the questions have been asked so maybe I can ask the tough winter.

Speaker 9: So it seems like there's been some inventory built, some purchases made up until now, prices are up. I have worked some concerns from some of the service centers and distributors in the Midwest that you could potentially see a wall in buying, given that some of the image work concerns have been addressed. Have you guys seen any of that? And if not, could you elaborate? Thanks.

Hum.

So it seems like there's been some inventory build some purchases made up until now prices are up.

Kristin Gresser: And we'll see that really generate sequentially higher shipments in the fourth quarter versus the third quarter. Order of magnitude, maybe somewhere between 30 and 40,000 tons quarter over quarter of incremental volumes. We are seeing proceeds often, as you mentioned in the fourth quarter, but with our continued focus on costs, some of the operating efficiencies that we will be able to generate in the fourth quarter and raw material tailwinds. We think the business will be in a position in falakia to deliver stable EBITDA quarter on quarter.

I have heard some concerns from some of the service centers.

And distributors in the Midwest.

Particularly see a lull in buying <unk>.

That some of the inventory concerns have been addressed have you guys seen any of that and if not could you elaborate thank you.

Speaker 2: Yeah, sure, Gordon. This is Kevin. I would say on the inventory side, you know, inventories at service centers were low as we ended the third quarter. You know, I think it was somewhere around 1.9 months of inventory on hand, which is well below the 10-year average. So we think with the resolution to the UAW, better demand picture entering into 2024, that'll actually bring some of the buyers off the sidelines.

Yes sure Gordon this is Kevin I would say on the inventory side.

Inventories at service centers were low as we ended the third quarter.

Kristin Gresser: There's no dollar here on this challenge where we are today, but just keep in mind also that this business hasn't an extraordinary well run. These guys know how to run the operations very, very well. This last year, I think the EU steel demands expected to fall 5%, and it's more like expected to rebound 6%. So how all of that transfers through our numbers into this next year, we'll have to see, but it is not as strong, and frankly as what it has been in the past, it's a challenged business for sure in the short term.

Somewhere around $1 nine months of inventory on hand, which is well below the 10 year average. So we think with some resolution to the UAW better demand picture entering into 2024 that will actually bring some of the buyers off the sidelines.

Speaker 2: and start to see as we already have a recovery in order entry rate. So I think we're quite at least optimistic in the near term that if some of the uncertainty becomes more resolved, more fully resolved, that that'll provide some good demand.

And start to see as we already have a recovery and order entry rates. So I think were quite at least optimistic in the near term. There is some of the uncertainty becomes more more resolved and we're fully resolved that that will provide some some good demand.

Speaker 9: Actually, one more if I could. You guys are assuming 750 in 2024 for the guide, but the curve is currently at 850. Could you guys be being a little conservative there? Hey.

Actually one more if I could you guys are assuming 70 in 2020 core for the guide, but the curve is currently at $8 50.

Kristin Gresser: All right, that's gears, and actually it brings me to a quick fall out there for next year. A hundred million EBITDA for the business is pretty much what the COVID levels. I mean, expectation are we would see some rebound in demand at this upfront demand. So is there something in the business that is structurally different? Or are you just being really conservative on how the first half of the year will shape out there?

Could you guys be being a little conservative there. Thank you.

Okay.

Speaker 2: You know, obviously Gordon, we wanted to align around a level of expectations that we believe is currently reflected in the market from a sales side perspective at 750.

Obviously, Gordon we wanted to align around our level of expectations that we believe is currently reflected in the market from a sell side perspective of 750, obviously, our results will fluctuate as steel prices move and to the extent and just recently as you pointed out the forward curve has has kicked out significantly.

Speaker 2: Obviously, our results will fluctuate as steel prices move, and to the extent, and just recently, as you pointed out, the forward curve has kicked out significantly. Obviously, we'll continue to be focused on running our operations extremely well, having the right commercial strategy in place, whether that's the right mix of end market exposure, the right mix of contracts.

Obviously, we will be continue to be focused on running our operations extremely well, having the right commercial strategy in place whether that's the right mix of end market exposure the right mix of contract.

Kristin Gresser: So if we think about performance in 2024 versus 2023, you know, let me speak to some of the favorable changes that we expect to see in this segment. First energy should be a tailwind for us in 2024 versus 2023. We do expect to see increase shipment volume. Once again, with three blast furnaces running throughout the year, recall the two-month outages that we had in the third quarter of this year, plus we did have an idle furnace to start calendar year 2023.

Speaker 2: fixed volumes indexed monthly in spot to optimize results regardless of the pricing environment.

Fixed fixed volumes index monthly and spot to optimize results regardless of the pricing environment. So we do see that same momentum that youre seeing but we didn't necessarily included in our outlook for 2024 at this juncture, but I'll pass over to Josh Who's got some additional comments, yes, just to just to underscore we.

Speaker 2: We do see that same momentum that you're seeing, but we didn't necessarily include it in our outlook for 2024 at this juncture. But I'll pass it over to Jess, she's got some additional.

We wanted to be helpful and bridging the gap that we saw and these numbers are still have some debt right. So from our perspective, if you think about on the slide where we show the walk right that all other $300 billion, that's going to that's going to move right. That's going to have the puts and takes of what happens across the market in 2020 for both.

Kristin Gresser: So that's a year on your change. We will see likely some raw material headwinds, whether that's in 2023, as well as some higher labor and CO2 costs. But all that taken together gives us a line of sight to sequentially stable EBITDA, as well as that that's being flat on a year-over-year basis. Justice. All right, that's fair and just a quick one on CO2 costs you just mentioned. Is that a big hike into next year?

Speaker 1: That's gonna move, right? That's gonna have the puts and takes of what happens across the market in 2024, both in the top line and within the cost base. So for the level of visibility that we have right now, right, we feel comfortable making clear that we expect 2024 will likely look in the same ballpark as 2023. But all the puts and takes in the business that we're gonna experience are kind of in that bucket, if you will. Thanks for getting that, congrats. Thanks. Thank you very much. And once again, as a reminder, if you'd like to ask a question or have any comments, you may do so now.

The top line and within the cost base. So for the type of different level of visibility that we have right now right we feel comfortable make.

Making clear that we expect 2024 will likely look.

The same right in the same ballpark as 2023, but you know all the puts and takes in the business that we're going to experience our.

Kristin Gresser: It will certainly be a headwind. I don't think we're in a position right now to assess and absolute values, the level of year on year change, but you should think about it as a year on year headwind. All right, that's very clear.

Kind of like.

Speaker 4: in that bucket, if you will.

In that bucket, if you will.

Thanks again guys congrats.

Thanks.

Speaker 1: Thank you very much. And once again, as a reminder, if you'd like to ask a question or have any comments, you may do so now by pressing the one for by the floor on your telephone keypad. Once again, is it one for two?

Kristin Gresser: And maybe my second question given that that was all Europe is a bit more on capital allocation and putting the strategy process aside. I think looking for 2025, what would really be the plan after Big River 2 from the point of view of management? Is there a Big River 3 somewhere in the future? It seems that is the strategy that is maximizing a shoulder value, or do you expect some time off in 2025 on growth and pose a bit to growth and reward shoulders a bit more?

Thank you very much and once again as a reminder, if you'd like to ask a question or have any comments you may do so now by pressing the one by the floor on your telephone keypad.

Once again, it's a one four.

Register for a question.

Speaker 1: I will get to the next question on the line from Closet the album from Morgan Stanley . Go right ahead.

And we'll go to our next question on the LIFO Carlos de Alba from Morgan Stanley go right ahead.

Speaker 7: Yeah, thank you very much. And they, so I heard what you said about no comments on the process. I just have one. I'm going to risk it. Any color on the timing, like not details other than you know, is this a process that the boroughs is taking very seriously, but is there a sense of would it be completed this year next year, early next year, that will be extremely helpful. Thanks.

Yes, thank you very much.

So.

I heard what you said about no comments on the process I, just got one I'm going to risk it.

Any color on the timing.

Kristin Gresser: What kind of is a strategy after Big River 2? I have to say you're getting a little greedy on this call. I just gave you 2024. Now, let's say we're not going to go that far on this call right now. We feel very comfortable with the path we see for 2024. We're very comfortable with talking about what we expect the financial impacts of that are going to look like, but we're not going farther than that today. That's a good thing we didn't give him anymore. He'd be asking for 2020. Could you imagine? No, that's fair and I appreciate the additional disclosure I provided. Thank you.

No details on that.

It's a process of the borrowers these taking various usually but.

Operator: That's all from Thank you.

Is there a sense of what it would be completed this year early.

Early next year that will be extremely helpful. Thank you.

Speaker 6: Well, Carlos, I just want to make sure you heard my earlier comments that I just say, you know, we're really not able to provide any further details on the strategic alternative process beyond what's already been said. As I stated earlier, there is a serious interest from many highly credible bidders, right? And it also said we're very flattered by that interest.

Well Carlos I, just wanted to make sure you heard my earlier comments that I would just say.

We're really not able to provide any further details on the strategic alternative process beyond what's already been said as I stated earlier there is a serious interest from many highly credible bidders right.

It also said, we're very flattered by that interest.

Speaker 6: Rest assured, we're running a robust, fair, and rigorous process.

This shared we're running a robust fare and rigorous process. We will remain focused on maximizing the stockholder value and we will provide updates.

Speaker 6: We will remain focused on maximizing the stockholder value and we'll provide updates.

Gordon Johnson: Thank you. We'll get to our next question on the live from Gordon Johnson with GLG research. Please go right ahead. Hey guys, we have one of the results. Thank you. It's a quick question for me. I mean a lot of the questions have been asked. So maybe I can ask it tough when it's so real. So it seems like there's been some inventory built. Some purchases made up until now. Trices are up.

Speaker 6: when it's appropriate but not before them. And until then we're just not gonna be able to give you additional details. Beno, I respect.

When it's appropriate but not before then.

And until then we're just not going to be able to give you additional details.

Fair enough.

Thank you very much.

Yes.

Speaker 1: Thank you and that was the final question. I'll turn it back now to over back to USDA CEO Dave Birch for closing comments.

Thank you.

That was the final question I'll turn it back now to over back to the U S D Burke for closing comments.

Gordon Johnson: I have heard some concerns from some of the service centers and distributors in the Midwest that you could potentially see a wall in buying given that some of the inventory concerns have been addressed. Have you guys seen any of that? And if not, could you elaborate? Thank you.

Thank you to everyone for joining us this morning and for the discussion we truly appreciate your interest in and engagement with USD.

Speaker 6: Thank you to everyone for joining us this morning and for the discussion. We truly appreciate your interest in and engagement with U.S. Deal.

Speaker 6: Thank you as always to our stockholders. We appreciate your feedback as we progress on our strategic alternative process to maximize stockholders' value.

Thank you as always to our stockholders. We appreciate your feedback as we progress on our strategic alternative process to maximize stockholder value. Thank.

Gordon Johnson: Yes, sure, Gordon. This is Kevin. I would say on the inventory side, you know, inventory that service centers were low as we ended the third quarter. I think it was somewhere around 1.9 months of inventory on hand, which is well below the 10-year average. So we think with the resolution to the UAW, better demand picture entering into 2024, that will actually bring some of the buyers off the sidelines and start to see as we already have our recovery and order entry rates.

Speaker 6: Thank you as well to our customers. We're honored to partner with you and to help you fulfill your needs by serving you with the best deal solutions available anywhere. Of course.

Thank you as well to our customers we're honored to partner with you and help you fulfill your needs by serving you with the best steel solutions available anywhere of course, there wouldn't be so much interest in U S steel if it werent for the incredible employees, we have we're.

Speaker 6: There wouldn't be so much interest in UF Steel if it weren't for the incredible employees we have, where...

Speaker 6: and enable our success every single day. So thank you to the US Steel employees everywhere. We're truly, you guys are truly the best in the industry and in your hard work, your innovation.

Enabling our success every single day. So thank you to the U S steel employees everywhere. We're truly you guys are truly the best in the industry and your hard work. Your innovation your commitment to safety <unk> are taking U S steel to new Heights.

Gordon Johnson: So I think we're quite at least optimistic in the near term that if some of the uncertainty becomes more resolved and more fully resolved, that will provide some good demand. Actually, one more if I could. You guys are assuming 750 in 2024 for the guide, but the curve is currently at 850. Could you guys be being a little conservative there? Thank you. You know, obviously, Gordon, we wanted to align around a level of expectations that we believe is currently reflected in the market from a sales side perspective at 750.

Speaker 6: Your commitment to safety first are taking U.S. Steel to new heights. At U.S. Steel, we value each of these stakeholders. We are pleased to deliver differentiated steel solutions that are best for not only people, but for the planet as well.

U S steel we value each of these stakeholders. We are pleased to deliver differentiated steel solutions that are best for not only people.

But for the planet as well.

Now, let's get back to work safely.

Speaker 1: Thank you. That is conclude the conference conference today. We thank you for your participation. And we ask you please, disinfect your lines. Have a good day.

Thank you that does conclude the conference call for today, we thank you for your participation and we ask you. Please disconnect your lines.

Gordon Johnson: Obviously, our results will fluctuate as fuel prices move and to the extent, and just recently, as you pointed out, the Ford curve has kicked out significantly. Obviously, we'll be continuing to be focused on on running our operations extremely well, having the right commercial strategy in place, whether that's the right mix event market exposure, the right mix of contract, fixed volumes, index, monthly and spot, to optimize results regardless of the pricing environment.

Good day everyone.

Speaker 10: Oh Oh Oh

[music].

Okay.

Okay.

Yeah.

Yes.

Okay.

Okay.

Gordon Johnson: So we do see that same momentum that you're seeing, but we didn't necessarily include it in our outlook for 2024 at this juncture, but I'll pass over to Jess. She's got some additional comments. Yeah, just to underscore, you know, we wanted to be helpful in bridging the gap that we saw and these numbers are still something, right? So from our perspective, if you think about on the slide where we show the walk, right, that all other $300 million, that's going to move, right?

Okay.

Yes.

Okay.

No.

Okay.

So.

Thanks.

Okay.

Pete.

Uh huh.

Okay.

Okay.

Okay.

[music].

Gordon Johnson: That's going to have the puts and takes of what happens across the market in 2024, both in the top line and within the cost base. So for the level of visibility that we have right now, right? We feel comfortable making clear that we expect 2024 will likely look in the same ballpark as 2023, but you know, all the puts and takes in the business that we're going to experience are kind of in that bucket, if you will.

Yes.

Okay.

Sure.

Okay.

Sure.

Third.

[music].

Okay.

Okay.

Uh huh.

Yes.

Okay.

Yes.

Okay.

Sure.

Yes.

Yeah.

[music].

Gordon Johnson: Thanks for getting guys to grab. Thanks. Thank you very much. And once again as a reminder, if you'd like to ask a question or have any comments, you may do so now by pressing the one for by the floor on your telephone keypad. Once again is the one for to register your question.

Okay.

Hum.

Hum.

Carlos Alba: I will get your next question on the line from across the album from Morgan Stanley Corridor Head. Yeah, thank you very much. And so I heard what you said about no comments on the process. I just have one. I'm going to risk it.

[music].

Hum.

Hum.

[music].

Okay.

David Burritt: Any color on the timing, like not details other than you know, is this a process that the borrower is taking very seriously, but is there a sense of would it be completed this year next year, early years? Well, Carlos, I just want to make sure you heard my earlier comments that I just say, you know, we're really not able to provide any further details on the strategic alternative process beyond what's already been said.

Uh huh.

[music].

Okay.

[music].

Speaker 11: Co.

Okay.

David Burritt: As I stated earlier, here is a serious interest from many highly credible bidders, right? And it also said we're very flattered by that interest rest assured, we're running a robust fair and rigorous process. We will remain focused on maximizing the stock of the value and will provide updates when it's appropriate, but not before then. And until then, we're just not going to be able to give you additional details. Thank you very much. Thanks. Thank you.

[music].

Operator: And I was this final question.

Hum.

Hum.

Hum.

[music].

David Burritt: I'll turn it back now to a little more back to USDO Daybirds for closing comments.

David Burritt: Thank you to everyone for joining us this morning and for the discussion. We truly appreciate your interest in and engagement with US Deal. Thank you as always to our stockholders. We appreciate your feedback as we progress on our strategic alternative process to maximize stockholder value. Thank you as well to our customers. We're honored to partner with you and to help you fulfill your needs by serving you with the best deal solutions available anywhere.

David Burritt: Of course, there wouldn't be so much interest in US Deal if it weren't for the incredible employees we have. We're enabling our success every single day. So thank you to the US Deal employees everywhere. We're truly, you guys are truly the best in the industry and in your hard work, your innovation, your commitment to safety first are taking US Deal the new height. At US Deal, we value each of these stakeholders. We are pleased to deliver differentiated steel solutions that are best for not only people, but for the planet as well.

Operator: Now let's get back to work. Safely. Thank you.

Operator: That does conclude the conference conference today. We thank you for your participation and we ask you please to check your lines.

Operator: Have a good day everyone.

Operator: Kevin Lewis, Jessica Graziano, Gordon Johnson Kevin Lewis, Jessica Graziano, Gordon Johnson, Alexander Hacking, David Burritt, Tristan Gresser, United States Steel Corp