Financial Data and Key Metrics Changes - The company reported a net income of $511 million or $1.28 per share, reflecting an increase of almost 40% compared to the prior year's quarter [7] - Operating income increased by 12% to $440 million or $1.10 per share, with a return on beginning-of-year equity of 21% [7] - The pre-tax quarterly underwriting income rose by 8.2% to $287 million, with a calendar year combined ratio of 90.9% [7][8] - Stockholders' equity reached a record of $9.8 billion, up 16.7% from the beginning of the year [10] - The company generated significant capital, with liquidity remaining strong at almost $2.4 billion in cash and cash equivalents [10][11] Business Line Data and Key Metrics Changes - Quarterly net premiums earned reached over $3.2 billion, with net premiums written growing to $3.8 billion [8] - The insurance segment's accident year loss ratio ex-cats was consistent with the first half of 2025 at 60.9% [8] - The reinsurance and monoline excess segment's accident year loss ratio ex-cats was 52.6%, with a strong combined ratio before CATs of 82.4% [8] Market Data and Key Metrics Changes - The current accident year loss ratio ex-cats for the quarter was 59.9%, reflecting an increase over the prior year due to business mix [8] - The company noted that the property market, particularly property CAT, is experiencing margin erosion [12] Company Strategy and Development Direction - The company focuses on specialty and small accounts, which provide a buffer against market challenges [5][12] - Management expressed a commitment to maintaining rate adequacy and not compromising underwriting standards for growth [18][60] - The company is actively reducing exposure in certain areas while seeking growth in personal lines and accident and health business [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the cyclical nature of the insurance industry and the challenges posed by competition and market dynamics [5][12] - There is a cautious outlook on the reinsurance market, with expectations of increased competition and potential for margin erosion [12][14] - The company remains focused on making good risk-adjusted returns and is prepared to shrink the business if necessary [44] Other Important Information - The company has proactively refinanced its debt, resulting in a low cost of capital and a strong capital structure [10] - The fixed maturity portfolio had a book yield of 4.8%, with expectations for growth in investment income [9][10] Q&A Session Summary Question: Capital position and growth plans - Management indicated significant headroom for excess capital and flexibility in capital utilization, emphasizing the importance of returning capital to shareholders if not effectively utilized [29][30] Question: Industry-wide excess capital concerns - Management acknowledged the industry-wide phenomenon of excess capital but emphasized their focus on their own value proposition and risk-adjusted returns [42][43] Question: Catastrophe losses in the insurance segment - Management noted that catastrophe losses were in line with averages, attributing it to frequency with modest severity and increased exposure due to growth in short tail lines [64] Question: Performance of Berkley One - Berkley One has proven successful, growing to over $500 million, with targeted growth in specific states rather than California [66][67] Question: Competition in casualty lines - Management acknowledged some competition in casualty lines but emphasized their strategic pivoting of the portfolio [73][110] Question: Workers' compensation growth - Management indicated that growth in workers' compensation is driven by specialty and high hazard lines, with a focus on maintaining quality [121]

Financial Data and Key Metrics Changes - The company reported a net income of $511 million or $1.28 per share, reflecting an increase of almost 40% compared to the prior year's quarter [7] - Operating income increased by 12% to $440 million or $1.10 per share, with a return on beginning-of-year equity of 21% [7] - The pre-tax quarterly underwriting income rose by 8.2% to $287 million, with a calendar year combined ratio of 90.9% [7][8] - Stockholders' equity reached a record of $9.8 billion, up 16.7% from the beginning of the year [10] Business Line Data and Key Metrics Changes - Quarterly net premiums earned reached over $3.2 billion, with net premiums written growing to $3.8 billion [8] - The insurance segment's accident year loss ratio ex-cats was consistent with the first half of 2025 at 60.9% [8] - The reinsurance and monoline excess segment's accident year loss ratio ex-cats was 52.6%, with a strong accident year combined ratio before cats of 82.4% [8] Market Data and Key Metrics Changes - The current accident year loss ratio ex-cats for the quarter was 59.9%, reflecting an increase over the prior year due to business mix [8] - The company noted that the property market, particularly property cat, is experiencing margin erosion [12] Company Strategy and Development Direction - The company focuses on specialty and small accounts to mitigate challenges in the cyclical insurance industry [5] - There is a strategic emphasis on maintaining rate adequacy and making good risk-adjusted returns rather than solely pursuing growth [18] - The company is reducing exposure in certain areas while still pursuing growth in personal lines and accident and health business [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the competitive landscape, particularly in the reinsurance market, and the potential for irrational pricing behavior among competitors [12][14] - The company remains focused on its value proposition and is prepared to shrink its business if necessary to maintain profitability [44] - Management indicated that while some parts of the market are in transition, there are still opportunities for healthy growth [60] Other Important Information - The company has a strong liquidity position with almost $2.4 billion in cash and cash equivalents [10] - The fixed maturity portfolio had a book yield of 4.8%, with expectations for growth in investment income [9][10] Q&A Session Summary Question: Capital position and growth plans - Management indicated significant headroom for excess capital and flexibility in capital utilization, with a focus on returning capital to shareholders if not effectively utilized [29][30] Question: Industry-wide excess capital concerns - Management acknowledged the industry-wide phenomenon of excess capital but emphasized their focus on their own operations and value proposition [42][43] Question: Catastrophe losses in the insurance segment - Management noted that catastrophe losses were in line with averages, attributing it to frequency with modest severity and increased exposure due to growth in short tail lines [64] Question: Performance of Berkley One - Berkley One has proven successful, growing to over $500 million, with growth focused on specific states rather than high-catastrophe areas like California [66][67] Question: Competition in casualty lines - Management acknowledged some competition in casualty lines but emphasized their pivoting strategy in response to market conditions [73][110] Question: Workers' compensation growth - Management indicated that growth in workers' compensation is driven by specialty and high-hazard segments, with a focus on maintaining a balanced portfolio [121]

Financial Data and Key Metrics Changes - The company reported a return on beginning of year equity of 24.3%, reflecting an increase of almost 40% in net income to $511 million or $1.28 per share compared to the prior year's quarter [7] - Operating income increased by 12% to $440 million or $1.1 per share, with a return on beginning of year equity of 21% [7] - The pretax quarterly underwriting income rose by 8.2% to $287 million, with a calendar year combined ratio of 90.9% [7][8] - Stockholders' equity reached a record of $9.8 billion, increasing by 16.7% from the beginning of the year [11] Business Line Data and Key Metrics Changes - Quarterly net premiums earned reached a record of over $3.2 billion, with gross net premiums written at $3.8 billion [8] - The insurance segment's quarterly accident year loss ratio ex cat was consistent with the previous year at 60.9%, while the reinsurance and monoline excess segments reported a loss ratio ex cats of 52.6% [8] - The expense ratio for the comparable third quarter was 28.5%, benefiting from growing net premiums earned and operational efficiencies from technology enhancements [9][10] Market Data and Key Metrics Changes - The company noted that the property market, particularly property cat, is experiencing margin erosion, while the liability side remains competitive [13][14] - The company highlighted that larger accounts face more competition, while smaller accounts present less competition, which is favorable for its strategy [15] - The company is seeing growth in personal lines and accident and health business, contributing to overall growth despite challenges in other areas [21][22] Company Strategy and Development Direction - The company is focused on maintaining rate adequacy and ensuring good risk-adjusted returns rather than solely pursuing growth [21][54] - The management expressed a commitment to discipline in underwriting, indicating a willingness to shrink business if necessary to maintain profitability [41][42] - The company is investing in technology and operational efficiencies to improve expense ratios and overall performance [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the cyclical nature of the insurance industry and the challenges posed by competition and market dynamics [5][13] - The company is optimistic about its investment portfolio, expecting growth in investment income due to strong operating cash flow and favorable new money rates [10][24] - Management indicated that while some parts of the market are under pressure, there are still opportunities for growth, particularly in specialty lines [15][17] Other Important Information - The company has significant excess capital, providing flexibility for future growth or shareholder returns [30][31] - The company is proactively managing its debt and capital structure, with a focus on returning capital to shareholders through dividends and share repurchases [31][34] Q&A Session Summary Question: Capital position and growth plans - Management indicated significant headroom in capital, allowing for flexibility in growth and potential returns to shareholders [30][31] Question: Industry-wide excess capital concerns - Management acknowledged the presence of excess capital in the industry but emphasized their focus on their own value proposition and risk-adjusted returns [39][41] Question: Catastrophe losses and geographic exposure - Management noted that catastrophe losses were in line with averages, attributing it to frequency with modest severity and growth in short tail lines [59][60] Question: Performance of Berkeley One and growth strategy - Management reported that Berkeley One has been successful, growing significantly without leaning into high-risk markets like California [63][64] Question: Competition in other liability lines - Management acknowledged some competition in other liability lines but emphasized their strategic pivot in response to market conditions [68][102] Question: Workers' compensation growth and specialty exposure - Management indicated that a significant portion of their workers' compensation business is specialty or high hazard, contributing to growth [111]

Financial Data and Key Metrics Changes - The company reported a return on beginning-of-year equity of 24.3%, reflecting a nearly 40% increase in net income to $511 million or $1.28 per share compared to the prior year [6] - Operating income increased by 12% to $440 million or $1.10 per share, with a return on beginning-of-year equity of 21% [6] - Pre-tax quarterly underwriting income rose by 8.2% to $287 million, with a calendar year combined ratio of 90.9% [6][10] - Stockholders' equity reached a record of $9.8 billion, up 16.7% from the beginning of the year [10] Business Line Data and Key Metrics Changes - Quarterly net premiums earned reached over $3.2 billion, with net premiums written growing to $3.8 billion [7] - The insurance segment's accident year loss ratio ex-cats was 60.9%, while the reinsurance and monoline excess segment's was 52.6% [7] - The expense ratio for the comparable third quarter was 28.5%, benefiting from operational efficiencies and scale in startup units [8][9] Market Data and Key Metrics Changes - The current accident year loss ratio ex-cats for the quarter was 59.9%, reflecting an increase due to business mix [7] - The company noted that the property market, particularly property CAT, is experiencing margin erosion, while the liability side remains competitive [12][14] Company Strategy and Development Direction - The company focuses on specialty and small accounts to mitigate challenges in the insurance industry [4] - There is a strategic emphasis on maintaining rate adequacy and making good risk-adjusted returns rather than solely pursuing growth [18][39] - The company is reducing exposure in certain areas while still pursuing growth in personal lines and accident and health business [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the competitive landscape, particularly in the reinsurance market, and the potential for irrational pricing behavior among competitors [12][30] - The company remains cautious about the overall growth environment, indicating that growth could fluctuate between 4% and 10% in the near term [64] - Management highlighted the importance of maintaining underwriting discipline and not compromising on rate integrity [39] Other Important Information - The company has a strong liquidity position with nearly $2.4 billion in cash and cash equivalents [10] - The fixed maturity portfolio's book yield was reported at 4.8%, with expectations for growth in investment income [9][21] Q&A Session Summary Question: Capital position and growth plans - Management indicated significant headroom for excess capital and flexibility in capital utilization, emphasizing the importance of returning capital to shareholders if not effectively utilized [24][25] Question: Industry-wide excess capital concerns - Management acknowledged the presence of excess capital in the industry but emphasized their focus on their own value proposition and risk-adjusted returns [30][31] Question: Catastrophe losses in the insurance segment - Management noted that catastrophe losses were in line with averages, attributing them to frequency with modest severity and increased exposure due to growth in short tail lines [42] Question: Performance of Berkley One - Berkley One has proven successful, growing to over $500 million, with growth focused on states where the company has a strong value proposition [44][46] Question: Competition in casualty lines - Management acknowledged some competition in casualty lines but emphasized their strategic pivot in the portfolio to manage exposure effectively [49][72] Question: Workers' compensation growth - Management indicated that growth in workers' compensation is driven by specialty and high hazard segments, with a focus on maintaining a balanced portfolio [74]

Financial Data and Key Metrics Changes - Year-to-date shareholder returns were 20% as of last Friday's close, 23% over the last year, and nearly 72% over the last three years with dividends reinvested [4] - Total economic return for the quarter was 10.3% and 11.5% year-to-date, reflecting disciplined management of Agency RMBS [4] - The common equity market cap is now above $1.8 billion, indicating growth in investor trust [5] Business Line Data and Key Metrics Changes - Net interest income continues to trend upward due to new investments with attractive yields, with over $130 million of gains on the portfolio in the third quarter [8] - The portfolio has grown over 50% larger since the beginning of the year and is 10% larger since the end of the second quarter [9] Market Data and Key Metrics Changes - Agency mortgages offered wide spreads to Treasuries and interest rate swaps, with implied volatility declining early in the quarter [11] - The agency current coupon yield declined from nearly 5.75% to nearly 5%, leading to a sharp increase in the refinance index [12] Company Strategy and Development Direction - The company aims to build a resilient platform at the intersection of capital markets and housing finance, focusing on risk discipline and liquidity management [4] - A new office in New York City is being opened to attract talent and strengthen business partnerships [10] Management's Comments on Operating Environment and Future Outlook - The operating environment remains complex with vulnerabilities due to persistent inflation and geopolitical factors [5] - The Federal Reserve is committed to bringing rates down to more neutral levels, but uncertainty in the rate path is significant [6] - The company is prepared for potential surprises in the market, emphasizing a deliberate growth strategy [7] Other Important Information - The company has raised $254 million in new capital in the third quarter and $776 million year-to-date, allowing for capital growth at a premium to book value [9] - The company is focused on disciplined risk management and liquidity to weather future volatility, with liquidity at over $1 billion [9] Q&A Session Summary Question: Current ROEs and dividend implications - ROEs in Agency RMBS remain in the high teens net of hedging costs, with gross in the mid-20s on a large percentage of the coupon stack [23] Question: Update on book value - Estimated book value is $1,271 net of the dividend accrual as of Friday's close [25] Question: Mortgage spreads and historical context - Mortgage spreads are still in the top quartile of the widest levels when compared to interest rate swaps [29] Question: Demand side outlook for GSEs - GSE holdings of Agency MBS could increase, with the capacity to add as much as $450 billion under current agreements [36] Question: Impact of implied volatility on hedging strategy - The company is looking at pockets of cheap volatility to stabilize the duration of the portfolio [41] Question: Market's reaction to volatility themes - The market has reacted to increased certainty in policy outcomes, but the company remains prepared for unexpected events [45]

Financial Data and Key Metrics Changes - Year-to-date shareholder returns were 20% as of last Friday's close, and 23% over the last year, with nearly 72% returns over the last three years when dividends are reinvested [6] - Total economic return for the quarter was 10.3% and 11.5% year-to-date, reflecting disciplined management of Agency RMBS [6] - The common equity market cap surpassed $1.8 billion, indicating broadening trust from individuals and institutions [7] - Estimated book value was $12.71 net of the dividend accrual as of Friday's close [31] Business Line Data and Key Metrics Changes - Net interest income continues to trend upward due to new investments with attractive yields, with over $130 million in gains on the portfolio in the third quarter [12][13] - The portfolio has grown over 50% larger since the beginning of the year and is 10% larger since the end of the second quarter [14] Market Data and Key Metrics Changes - Agency mortgages offered wide spreads to treasuries and interest rate swaps, with nominal spreads remaining wide [16] - The GSEs have the capacity to add up to $450 billion under current stock purchase agreements, which could increase demand for Agency MBS [44] Company Strategy and Development Direction - The company aims to build a resilient platform at the intersection of capital markets and housing finance, focusing on risk discipline and liquidity management [5] - The strategy includes a deliberate bias towards lower coupons, which are expected to outperform as mortgage rates decline [17] - The company is opening a new office in New York City to attract talent and strengthen market position [15] Management's Comments on Operating Environment and Future Outlook - The operating environment remains complex, with vulnerabilities due to persistent inflation and geopolitical factors [7] - The Federal Reserve is committed to bringing rates down to more neutral levels, but uncertainty in the rate path is significant [8] - The company is prepared for potential surprises in the private credit market, emphasizing a deliberate growth strategy [10] Other Important Information - The company has raised $254 million in new common equity capital in the third quarter, bringing year-to-date new capital growth to $776 million [13][17] - The company continues to focus on disciplined risk management and liquidity to weather future volatility [14] Q&A Session Summary Question: Where do you see incremental spreads and current ROEs? - ROEs in agency RMBS remain in the high teens net of hedging costs, with gross in the mid-twenties for a large percentage of the coupon stack [29] Question: Can we get an update on book value quarter to date? - Estimated book value is $12.71 net of the dividend accrual as of Friday's close [31] Question: Can you discuss the demand side outlook for agencies? - GSE holdings of Agency MBS could increase, with the capacity to add significant amounts under current agreements [44] Question: How are you thinking about swap spreads? - The federal deficit is a major factor, and while spreads could go more negative, there is a buffer at current levels [38] Question: What are the implications of lower volatility on your hedging strategy? - Lower volatility allows for the repurchase of options that were short in a levered mortgage position, stabilizing the portfolio's duration [48] Question: Do you see opportunities to pick up alpha within the coupon stack? - There are tremendous opportunities across the coupon stack, allowing for flexibility beyond the current coupon [60]

Financial Data and Key Metrics Changes - Year-to-date shareholder returns were 20% as of last Friday's close, 23% over the last year, and nearly 72% over the last three years with dividends reinvested [4] - Total economic return for the quarter was 10.3% and 11.5% year-to-date, reflecting disciplined management of Agency RMBS [4] - The common equity market cap is now above $1.8 billion, indicating growth in investor trust [5] - Estimated book value is $1,271 net of the dividend accrual as of Friday's close [24] Business Line Data and Key Metrics Changes - Net interest income continues to trend upward due to new investments with attractive yields, with over $130 million of gains on the portfolio in the third quarter [9] - The portfolio has grown over 50% larger since the beginning of the year and is 10% larger since the end of the second quarter [10] Market Data and Key Metrics Changes - Agency mortgages offered wide spreads to Treasuries and interest rate swaps, with nominal spreads remaining wide [12] - The agency current coupon yield declined from nearly 5.75% to nearly 5%, leading to a sharp increase in the refinance index [13] - GSE holdings of Agency MBS could potentially increase, with the capacity to add as much as $450 billion under current agreements [32] Company Strategy and Development Direction - The company focuses on building a resilient platform at the intersection of capital markets and housing finance, emphasizing risk discipline and liquidity management [4] - The strategy includes opportunistic investing and focused value creation, with a deliberate bias towards lower coupons expected to outperform [12][15] - The company is opening a new office in New York City to attract talent and enhance business partnerships [11] Management's Comments on Operating Environment and Future Outlook - The operating environment remains complex, with vulnerabilities due to persistent inflation and geopolitical factors [5] - The Federal Reserve is committed to bringing rates down to more neutral levels, but uncertainty in the rate path is significant [6] - The company is prepared for potential surprises in the market and remains focused on strengthening its market position [8] Other Important Information - The company raised $254 million in new capital in the third quarter, bringing year-to-date new capital growth to $776 million [10] - The liquidity at quarter end was over $1 billion, representing over 50% of total equity [10] Q&A Session Summary Question: Where do you see incremental spreads and current ROEs? - ROEs in Agency RMBS remain in the high teens net of hedging costs, with gross in the mid-20s on a large percentage of the coupon stack [22] Question: Can we get an update on book value quarter to date? - Estimated book value is $1,271 net of the dividend accrual as of Friday's close [24] Question: Can you elaborate on mortgage spreads being wide relative to history? - Mortgage spreads are still in the top quartile of the widest levels when compared to interest rate swaps [27] Question: What is the potential for GSEs as a player on the demand side? - GSE holdings of Agency MBS could increase, with a capacity to add as much as $450 billion under current agreements [32] Question: How are you thinking about the hedging strategy with lower volatility? - The company is looking to repurchase options that are inherently short in a levered mortgage position, focusing on pockets of cheap volatility [36] Question: Why has the market shrugged off volatility themes? - There is more certainty in the market due to policy commitments from the Fed and clearer policy outcomes from the administration [40]

Financial Data and Key Metrics Changes - The third quarter adjusted EBITDA improved to $143 million, a 52% increase over the prior quarter, driven by margin expansion from higher realized prices and improved mix [17] - Steel shipment volumes were 4 million tons in the quarter, a reduction from the prior quarter due to summer slowdowns and continued market discipline [17] - The average selling price increased to $1,032 per net ton, up $17 per net ton over the prior quarter, driven by an increase in automotive shipments from 26% to 30% share [17][18] Business Line Data and Key Metrics Changes - The automotive sector is leading the rebound in domestic steel demand, with the third quarter being the best auto steel shipment quarter since Q1 2024 [3] - The company locked in multi-year agreements with major automotive OEMs, covering higher sales volumes and favorable pricing through 2027 or 2028 [3][4] - The mix shifted favorably toward automotive, with coated volumes increasing from 27% to 29% share [17] Market Data and Key Metrics Changes - The Canadian market continues to lag expectations, with 9% of total sales coming from Stelco, and imported steel penetration into Canada at 65% [11] - The U.S. automotive sector is experiencing a resurgence, supported by domestic steel production, which is critical for national security [4][5] Company Strategy and Development Direction - The company is focused on strengthening its position in the automotive steel market and is prepared for increased demand in 2026 [6][7] - A memorandum of understanding with a major global steelmaker aims to leverage the company's U.S. footprint for downstream industrial clients moving production to the U.S. [10] - The company is exploring opportunities in rare earth elements within its mining portfolio, identifying two sites in Minnesota and Michigan for potential development [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the automotive sector and the effectiveness of cost actions taken [24] - The company anticipates that operational improvements will lead to amplified EBITDA and cash flow as demand stabilizes [22][23] - The management highlighted the importance of consistent demand and stable policy to sustain the recovery [22] Other Important Information - The company was awarded a five-year, $400 million fixed-price contract by the U.S. Department of War for grain-oriented electrical steel, reinforcing its strategic importance [14] - The company is on track to achieve projected annual savings of $300 million from operational efficiencies implemented earlier in the year [18] Q&A Session Summary Question: How quickly could the company produce products in the rare earth vertical? - The company has identified two promising sites and is working with geologists to assess their commercial viability, with potential cooperation opportunities with Canada [26][30] Question: Can you provide details on the asset sale process? - The company has closed on a portion of the sale of FPT and is considering selling its direct reduction plant in Toledo, Ohio, due to a lack of strategic value [34][35] Question: Did any new auto contracts kick in during this quarter? - Some contracts began on October 1, and the company expects significant activity from these contracts as the year turns to 2026 [52] Question: What does the guidance imply for further unit cost reductions? - The company expects costs to be down $50 a ton year-over-year when adjusted for the increased automotive mix, with shipments expected to be similar to Q3 [54][56] Question: Can you comment on the volume growth from the new auto agreements? - The new contracts are expected to generate more margin, and the company has significant capacity to meet the automotive industry's needs [61][62]

Financial Data and Key Metrics Changes - The adjusted EBITDA for Q3 2025 improved to $143 million, a 52% increase over the prior quarter, driven by margin expansion from higher realized prices and improved mix [16] - Steel shipment volumes were 4 million tons in the quarter, a reduction from the prior quarter due to summer slowdowns and continued market discipline [16] - The average selling price increased to $1,032 per net ton, up $17 per net ton over the prior quarter, driven by an increase in automotive shipments from 26% to 30% share [16] Business Line Data and Key Metrics Changes - The automotive sector is leading the rebound in domestic steel demand, with the third quarter being the best auto steel shipment quarter since Q1 2024 [3] - The company locked in multi-year agreements with major automotive OEMs, covering higher sales volumes and favorable pricing through 2027 or 2028 [3][4] - The automotive-grade galvanized steel plants are fully operational, with significant capacity ready to meet increasing demand [5][6] Market Data and Key Metrics Changes - The Canadian market continues to lag expectations, with 9% of total sales coming from Stelco, primarily due to high levels of imported steel [10] - Imported steel penetration into the Canadian market stands at 65%, which the company attributes to the Canadian government's inaction against dumped steel [10][11] Company Strategy and Development Direction - The company is focused on strengthening its position in the automotive sector and enhancing domestic steel sourcing to reduce exposure to tariffs and foreign volatility [4][5] - A memorandum of understanding with a major global steelmaker is expected to facilitate the onboarding of their downstream industrial clients moving production to the U.S. [9] - The company is exploring opportunities in rare earth elements within its mining portfolio, identifying two sites in Minnesota and Michigan for potential development [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the automotive sector and the positive impact of trade policies on domestic steel demand [20][22] - The company anticipates that operational improvements and cost reductions will lead to amplified EBITDA and cash flow as demand stabilizes [21] - The management remains cautious but acknowledges the first signs of recovery in the automotive sector and the potential for increased volumes and pricing in the future [22][39] Other Important Information - The company was awarded a five-year, $400 million fixed-price contract by the U.S. Department of Defense for grain-oriented electrical steel, reinforcing its strategic importance [12] - The company plans to proceed with projects receiving grants from the Department of Energy, which were not included in a recent cancellation list [13] Q&A Session Summary Question: How quickly could the company produce products in the rare earth vertical? - The company has identified two promising sites and is working with geologists to assess their commercial viability, with potential cooperation opportunities with Canada [24][27] Question: What is the status of the asset sale process? - The company has closed on a portion of the sale of FPT and is considering selling its direct reduction plant in Toledo, Ohio, due to a lack of strategic value [30][31] Question: Did any new automotive contracts kick in during this quarter? - Some contracts began on October 1, and the company expects significant activity from these contracts as the year turns to 2026 [38] Question: What is the guidance for further unit cost reductions? - The company expects costs to be down $50 a ton year over year, with shipments anticipated to be similar to Q3 [41] Question: Can the company provide details on the auto contracts and volume growth? - The new contracts are expected to generate more margin, and the company has significant capacity to meet the automotive industry's needs [43][45]

Financial Data and Key Metrics Changes - The adjusted EBITDA for Q3 2025 improved to $143 million, representing a 52% increase over the prior quarter, driven by margin expansion from higher realized prices and improved mix [23] - Steel shipment volumes were 4 million tons in the quarter, a reduction from the prior quarter due to summer slowdowns and continued market discipline, but the average selling price increased to $10.32 per net ton, up $17 per net ton over the prior quarter [23][24] - The CapEx budget for 2025 is now $525 million, down from the original expectation of $700 million, reflecting reduced spending at Stelco and changes in the DOE project at Middletown [25] Business Line Data and Key Metrics Changes - Automotive shipments increased from 26% to 30% share, while coated volumes moved from 27% to 29% share, contributing to the improved average selling price [24] - The company locked in multi-year agreements with major automotive OEMs, covering higher sales volumes and favorable pricing through 2027 or 2028 [5][6] Market Data and Key Metrics Changes - The U.S. automotive sector is experiencing a significant rebound, with domestic steel demand increasing, particularly in the automotive sector [4][5] - The Canadian market continues to lag expectations, with only 9% of total sales coming from Stelco, attributed to the Canadian government's inaction against steel dumping [15][16] Company Strategy and Development Direction - The company is focused on capitalizing on the resurgence of the U.S. automotive sector and has positioned itself as a key supplier of domestic steel [11][12] - A memorandum of understanding was entered into with a major global steelmaker to leverage the company's U.S. footprint for onboarding their downstream industrial clients [13][14] - The company is exploring opportunities in rare earth elements within its mining portfolio, identifying two sites in Minnesota and Michigan for potential development [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the automotive sector and the effectiveness of cost actions taken, while cautioning that the company is not declaring victory yet [30] - The company expects continued demand growth from automotive contracts and anticipates that operational improvements will lead to amplified EBITDA and cash flow [29] Other Important Information - The company was awarded a five-year $400 million fixed-price contract by the U.S. Department of War for grain-oriented electrical steel, reinforcing its strategic importance to national security [19][20] - The company is proceeding with the Butler project on schedule and is working with the DOE on the Middletown project, which is critical for future operations [21] Q&A Session Summary Question: How quickly could the company produce products in the rare earth vertical? - The company is assessing two promising sites and is optimistic about developing mining capabilities, potentially in cooperation with Canada [33][34][39] Question: What is the status of the asset sale process? - The company has closed on a portion of the sale of FPT and is considering selling its direct reduction plant in Toledo, Ohio, while deprioritizing the asset sale process due to the MOU with the global steelmaker [44][46] Question: Did any new automotive contracts kick in during this quarter? - Some contracts began on October 1, and while Q4 may not see significant activity due to typical shutdowns, the company is excited about the upcoming contracts in 2026 [61][62] Question: What is the expected volume growth from new automotive agreements? - The new contracts are expected to generate more margin, and the company has significant capacity to meet the automotive industry's needs [72][75] Question: What is the nature of the electrical steel contract with the U.S. government? - The contract is a multiyear opportunity to build a strategic inventory of electrical steel for national security purposes [89][90]