United States Steel Corporation

Good morning, everyone, and welcome to the United States Steel Corporation's fourth quarter and full year 2021 earnings conference call and webcast. As a reminder, today's call is being recorded. I'll now hand the call over to Kevin Lewis, Vice President of Investor Relations and Corporate at TNA.

Thank you, Tommy. Good morning and thank you for joining our fourth quarter and full year 2021 earnings call. On behalf of U.S. Steel, I'd like to wish everyone a happy and healthy 2022. Joining me on today's call is U.S. Steel President and CEO Dave Burritt, Senior Vice President and CFO Christy Brees, and Senior Vice President and Chief Strategy and Sustainability Officer Rich Kruhoff. This morning, we posted slides to accompany today's prepared remarks. The link and slides for today's call can be found on the U.S. Steel Investor page under the Events and Presentation section. Before we start, we'll 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. 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. I would now like to turn the conference call over to U.S. Steel President and CEO Dave Burrett, who will begin on slide four.

Thank you, Kevin, and thank you, everyone, for joining us this morning. 2021 was an exceptional year, and it puts us on a path for another strong year in 2022. We delivered for our stakeholders in 2021, achieving record performance across nearly every part of our business. Record earnings. record EBITDA, record EBITDA margin, record free cash flow, and record safety, quality, and reliability performance. Collectively, we are pursuing best here at U.S. Steel, and 2021 is a great example of our progress. But this is just the beginning. Our progress will continue in 2022 and beyond. While the market is certainly looking for every reason to be negative about the prospects for this year, we remain overwhelmingly positive. As expected, the first quarter will be seasonally weak, including the normal impacts of our mining operations. But we believe this is just temporary. While markets continue to self-correct, the macro backdrop is favorable. Supply chain issues will ease. Inflationary pressures will abate. Saving rates remain high, cash remains on the sidelines, and demand remains pent up for the markets we serve. This is a recipe for success in steel, and we are optimistic that 2022 demand will accelerate. We have, after all, double through cycle prices. Clearly a great place to be. We know about the risks. The Fed taking rates up too fast. Unexpected changes to import restrictions, geopolitical risks, existential risks. The risks are many, but we've seen it all before. We know where we're headed and we know how to get there. When you are in pursuit, constant pursuit of best, you are never satisfied and challenges will always remain. We're taking the necessary steps to become less capital and carbon intensive. We're executing on strategic investments to expand our capabilities, capabilities that will make us a better, not bigger steel company. And we're going to move faster, not slower in 2022, because as we like to say, we can't get to the future fast enough. This isn't your great, great grandpappy's U.S. Steel anymore. U.S. Steel's future is incredibly bright. The solution remains the same, execute our best for all strategy by constructing a second greenfield facility and expanding finishing lines through our investments in an electrical steel line and coating line at Big River while returning capital to stockholders. When we execute, we expect to unlock $850 million of additional through cycle EBITDA through state of the art mini mill steelmaking and finishing line capabilities. And we will have further differentiated our sustainability advantages by customers as we continue to deliver against our responsible steel and 2050 decarbonization objectives while growing our offering of sustainable steel solutions, including Vertex. We know you know this. Sounds good, right? We think so. But we clearly know this is a show me story. So we will keep our heads down. remain focused and disciplined, and we will continue our progress toward our best for all path forward. Because after all, we have to keep showing our stakeholders what best for all means. It's about continuing to reimagine how steel gets made more sustainably, like efforts earned by Big River Facility Daimler's 2021 Sustainability Recognition Award. And it also means continuing to innovate, to accelerate, and further our best-for-all progress. Just this week, as an example, we announced a strategic investment and partnership in Carnegie Foundry, a leading robotics and artificial intelligence studio in Pittsburgh, supported by Carnegie Mellon University. We look forward to beginning our partnership together as we work to accelerate and scale industrial automation to find new ways to serve our customers. Our customers are seeing and embracing the transformation that's taking place at U.S. Steel, and we are pleased to be a like-minded regional partner for them. We look forward to deepening our partnerships to create unique solutions that build on our long-term relationships industry-leading innovation, and constantly increasing focus on products our competitors haven't imagined. For our employees and communities, best for all means investments in their future. In our recent announcement that we have selected Osceola, Arkansas, as a home for our second mini mill means jobs. It means a commitment to that community. It means a more secure future for the region. and it means a more responsive U.S. Steel to meet the needs of our customers. Osceola is our newest home, and we continue to invest in regions that have supported U.S. Steel throughout our history, integrated mills and mini-mills, our best of both enabling our best-for-all future. And for investors, best-for-all means increasing our future earnings power while returning capital to stockholders. We don't believe the market is rewarding us yet for continued strength in 2022, improved through cycle earnings, or for the long-term value, our best-for-all strategy. So we will continue to buy back our own stock and are pleased to announce an incremental $500 million authorization. We are generating excess cash, and we have an obligation to reward stockholders. As I said before, this isn't your great-great-grandpappy's U.S. deal, and we look forward to continuing to show all our stakeholders the power of best for all. Let's get into the agenda for today's call on slide five. On this morning's call, we are going to cover three topics before heading into Q&A. First, we will spend some time recapping our 2021 performance and strategic milestones. Second, we will provide some additional context on why we are confident. And third, we will spend some time providing definition on our capital allocation framework and key priorities. Priorities aligned with showing our stakeholders what best for all means for them. 2021's record performance has fundamentally changed our business. As you see on slide six, our record performance in safety and environmental, in customer and operational excellence, and in our financial performance is a direct result of executing our strategy over the past several years. Take safety and environmental as an example. Safety is and will always be first at U.S. Steel and is at the core of our steel principles. we delivered our best safety and environmental performance on record and continue our progress towards our ambitious 2030 and 2050 carbon reduction goals we also demonstrated exceptional quality and reliability performance when it mattered most to deliver for our customers in 2021 We also delivered record financial performance in 2021. We acted boldly in 2020 to announce the acquisition of the remaining stake in Big River Steel, just as the market was gaining momentum. We moved quickly, and our well-timed acquisition allowed us to capture the remarkable earnings power of Big River Steel in 2021, including nearly $1.4 billion of EBITDA and 39% EBITDA margins. Our flat-rolled and US Steel Europe segments also delivered record financial performance. Our integrated operations continue to run well to drive what is expected to be another impressive year in 2022. Before we pivot to 2022, let me turn it over to Christy to provide some more context on 2021's record financial performance. Christy?