Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA loss of $174 million for Q1 2025, reflecting a challenging pricing environment and underperformance of non-core assets [30] - Total shipments in Q1 were 4.14 million tons, consistent with guidance to exceed 4 million tons, aided by a full quarter contribution from Stelco [30] - Price realization for Q1 was $980 per net ton, a slight improvement from Q4's $970, but still weighed down by lower realizations in cold rolled products [30] Business Line Data and Key Metrics Changes - The automotive sector remains a high-margin business for the company, with expectations of an annual EBITDA benefit of $250 million to $500 million starting in the second half of 2025 [10] - The company is idling several non-core assets, which is expected to generate annual savings of over $300 million [18] - The idling of loss-making operations is aimed at optimizing the operating footprint and improving profitability [11][12] Market Data and Key Metrics Changes - In 2024, only 50% of cars sold in the U.S. were domestically produced, highlighting the need for reshoring automotive production [6] - The company is seeing a shift of automotive production back to the U.S., with key customers increasing domestic manufacturing [9] - The domestic flat rolled prices have increased, while the company's realized prices under a Brazilian price-linked slab contract have declined, leading to negative margins [21] Company Strategy and Development Direction - The company is focused on returning to consistent profitability and free cash flow generation through operational changes and strategic initiatives [5] - The strategic repositioning of Stelco as a Canadian supplier is expected to provide more business opportunities for U.S. mills [24] - The company is actively engaging with automotive clients to secure longer-term steel supply contracts as they increase domestic production [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved pricing and operational efficiencies in the second half of 2025, with expectations for a reset in financial results in 2026 [31] - The company is committed to reducing costs and optimizing operations to remain competitive in the U.S. steel market [11][36] - Management highlighted the importance of enforcing trade laws to protect against unfair competition from dumped steel imports [36] Other Important Information - The company has reduced its 2025 capital expenditure guidance from $700 million to $625 million, primarily due to idled assets and canceled projects [34] - The company maintains a healthy liquidity position with approximately $3 billion in available liquidity and $3.3 billion in secured capacity [35] - Management indicated that cash charges related to idling operations would be minimal, with expected non-cash accounting charges of around $300 million in Q2 [87] Q&A Session Summary Question: Timing for achieving $300 million savings - Management indicated that the full impact of the $300 million savings would start to materialize in the second half of 2025, primarily from the Cleveland Dearborn switch and other operational changes [42][43] Question: Impact of steel tariffs on Stelco - Management clarified that the acquisition of Stelco was planned to redirect sales to the Canadian market, and the Section 232 tariffs would not change their strategy [50][51] Question: Assumptions around domestic auto production increase - Management expressed confidence that the overall number of cars produced in the U.S. would increase, benefiting steel suppliers like the company [60] Question: Updates on asset sales and debt covenants - Management confirmed that unsolicited inquiries for non-core assets have been received, with potential sales bringing several billion dollars in value, which would be used for debt reduction [69][70] Question: CapEx and blast furnace reline updates - Management stated that CapEx guidance has been lowered and that blast furnace relines are planned for 2027, with ongoing reliance on blast furnaces for production [105][95]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported an adjusted EBITDA loss of $81 million, primarily due to weaker automotive demand and lagged pricing [33] - Total shipments in Q4 were 3.8 million tons, lower than Q3 due to the idling of the C6 furnace and seasonally weaker demand [37] - Q4 price realization was $976 per net ton, a decrease of $70 per net ton from the previous quarter, influenced by the inclusion of Stelco and its lower price mix [37] Business Line Data and Key Metrics Changes - Direct shipments to the automotive sector in Q4 were the lowest since the pandemic, reflecting a significant impact from weak demand [33] - The company expects to improve shipment levels above 4 million tons in Q1 2025 due to better demand and full utilization of Stelco [37] - The inclusion of Stelco is expected to reduce average costs by an additional $40 per net ton in 2025 [39] Market Data and Key Metrics Changes - The demand for steel in 2024 was the weakest since 2010, with significant declines in automotive and construction sectors [8] - The company noted a significant uptick in demand for automotive products as 2025 begins, indicating a recovery in market share [23] - The first quarter of 2025 is expected to see a price increase of at least $10 per ton compared to Q4 2024 due to increased automotive shipments [101] Company Strategy and Development Direction - The company is focused on leveraging tariffs to strengthen domestic production and reduce reliance on foreign steel imports [11][12] - The acquisition of Stelco is seen as a strategic move to enhance operational efficiency and cost structure [16][18] - The company aims to achieve $120 million in synergies from the Stelco acquisition by the end of 2025, with a strong focus on maximizing value from the combination [18][145] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing improvements in order books and rising steel prices as positive indicators [6][23] - The company is prepared for the implementation of tariffs, which are expected to bolster domestic demand and reduce competition from foreign producers [10][109] - Management emphasized a commitment to debt reduction and maintaining financial flexibility despite current leverage levels [41][132] Other Important Information - The company reported a total reportable incident rate of 0.9% for 2024, highlighting a strong safety record [26] - The company has $3 billion in liquidity and plans to use free cash flow for debt reduction [40][132] - Capital expenditures for 2025 are expected to be $700 million, down from $800 million in 2024 [46] Q&A Session Summary Question: Discussion on evolving tariff environment and implications for Stelco - Management stated that tariffs are necessary and will benefit the overall business, with minimal negative impact on Stelco due to its Canadian operations [54][55] Question: Clarification on reporting tariffs in adjusted EBITDA - Management confirmed that results will be reported as they are, without excluding tariffs from adjusted EBITDA [58][59] Question: Volume cadence and cost guidance for 2025 - Management indicated that only 30% to 35% of volumes will be under fixed pricing, with cost reductions expected to materialize more in the latter half of the year [76][78] Question: Update on capital expenditures and project timelines - Management outlined a clear CapEx plan for 2025, with specific allocations for legacy operations and ongoing projects [88][90] Question: Conditions for potential restart of C6 furnace - Management stated that the C6 furnace remains indefinitely idle with no current plans for a restart [141] Question: Synergies from Stelco acquisition - Management expressed confidence in achieving and potentially exceeding the $120 million synergy target from the Stelco acquisition [145] Question: Working capital expectations for Q1 - Management indicated that working capital build in Q4 was to prepare for improved demand in 2025, with benefits expected in subsequent quarters [114][115] Question: Possibility of equity issuance - Management confirmed there are no plans for equity issuance, focusing instead on debt reduction [128][132]