Good morning, everyone, and welcome to United States Steel Corporation's Fourth Quarter and Full-Year 2017 Earnings Conference Call and Webcast. As a reminder, today's call is being recorded. Now on the call this morning will be U.S. Steel President and CEO, Dave Burritt; Executive Vice President and CFO, Kevin Bradley; and Dan Lesnak, General Manager of Investor Relations. After close of business yesterday, the company posted its earnings release, earnings presentation and an updated version Q&A -- updated question-and-answer document under the Investors section of its Web site. Today's conference call contains forward-looking statements and future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced at the end of the company's earnings release, in the earnings presentation and in the question-and-answer document and are included in U.S. Steel's most recent annual report on Form 10-K and updated on their quarterly reports on Form10-Q in accordance with the Safe Harbor Provisions. I'd now like to turn the conference over to your host U.S. Steel President and CEO, Dave Burritt. Please go ahead, sir. David B. Burritt: Good morning. We finished 2017 in a good position we look forward to 2018. Our earnings have improved, our facilities are operating better and market conditions are supportive of continuing improvements. We are focused on the fundamental drivers of our business, safety, quality, delivery and cost. This is how we’re establishing a foundation for future growth. There is nothing flashy or untested here, it's all about focus, discipline, and execution and we’re on it. Our investments in our assets are delivering results. We established a scorecard for investors to track our progress on our asset revitalization program setting out our goals for 2017. The results are now in and we exceeded our targets for improving quality and reliability, and our more consistent results reflect this. The investments we're making in our employees are critical to our success. Our employees are talented, dedicated and passionate about keeping U.S Steel a critical foundation of the U.S manufacturing base and nothing is more important to us than their safety. Throughout 2017, we continue to expand our safety programs, introducing new techniques and processes that will take our safety performance to the next level. While we are already well above industry standards for safety performance, we're not at zero injury, so we are not satisfied and must do better. Zero injuries is the only acceptable outcome. The investments we're making in our assets and our employees are driven by our commitment to our customers. Improving our quality and reliability makes us a stronger business partner and increases the value we can create. Providing stronger support for the current needs of our customers is only the first step. We're also focused on developing the next generation of steel products and solutions that will keep steel the material of choice. Looking ahead into 2018, we've established new targets on our asset revitalization scorecard that reflect continued progress toward our 2020 goals. We currently expect capital spending for the program to be in the range of $275 million to $325 million. This is lower than our previous estimate, but does not reflect a slowdown in our commitment to raise our assets to a higher standard and deliver strong returns on our investment. Our eyes are on the 2020 price of 15% to 20% return and we get more confident with each success. As we’ve stated in the past, we structured this program as a series of smaller projects to reduce project execution risk and to give us the flexibility to move projects around so that we can continue to take care of our contract customers. We're seeing increased demand from our customers and have rescheduled some projects to ensure that we can make enough steel to support our customers' needs. Also, we're not going to spend money just to spend money. We are executing our asset revitalization program in a very prudent, controlled and disciplined manner to ensure we get the highest possible return on our investment. We've communicated our goals for improvements in quality and reliability and are committed to reaching those goals in a cost-effective and timely manner. More reliable operations will improve our position with our customers and increase the consistency and predictability of our earnings. We are proud of our 2017 accomplishments and are looking forward to 2018, but realize we still have a lot of work to do.

Thank you, Dave. Kevin, can you please queue the line for questions.

Thank you. [Operator Instructions] And first question is from the line of Curt Woodworth, Credit Suisse. Please go ahead.

Yes. Good morning and congrats on a really great operational result after many challenges you faced in the first quarter. David B. Burritt: Thank you, Curt.

Dave, first question is just understanding the EBITDA bridge you provided, specifically with respect to the Flat-Rolled segment. So you're looking for about $270 million of EBITDA improvement. But just on my math if the spot price is up 75 to 80, call the $700 accrual, that gives you about $400 million, you’ve outlined improvement from revitalization are going to get this year of $75 million to $100 million on EBITDA. And then if we assume the contract book get you a little bit more leverage as well. It would suggest that you should be able to do more than the guide. So, I guess, my question is, are you assuming more OpEx creep in the guide relative to the return on revitalization you’re getting this year, or should we potentially assume that your contract book is -- maybe generating more EBITDA than it did last year? David B. Burritt: I could give maybe just a context here, first thing. thanks, Curt. This is Dave. Thanks for the kind words upfront on the -- certainly the Flat-Rolled segment have turned around a bit from the first quarter. We’ve been able to put together some consistent earnings in the second quarter and the third quarter, now the fourth quarter, we’re working really hard to make sure that we have the consistent predictable results and this is a big challenge. We are humbled by the challenge in many cases, but I'm really comfortable now that we are putting that type of discipline in place to make us a stronger, more consistently predictable type company. As far as the EBITDA bridge, I will turn that to Dan and have him talk through that.

Yes. Thanks, Dave. Yes, Curt, I think what we are seeing some cost, we’re expecting some cost pressures. We are reversing some of our own tails and headwinds. It's what we’re expecting now. Not necessarily -- certainly for us coal and iron ore, but scrap, gas, electricity, those type things and some of the other materials, we bought in smaller quantities, but they’re all moving higher, whether it's other metals or alloys, refractories, electrodes, like not one of those in itself is significant, but when you add them, it makes an impact on the numbers. So I’d say that the offset you’re probably looking for is on those materials and things like that.

Okay. And then, second question just on the volume guide this year for being flat. I’ve got your latent capacity close to a 1.5 million tons. So the question is, do you think that if the market were to stay at current robust price level, could you push revitalization back further to get more volume out of the business this year given the profitability level? And then where do you think your exit rate will be in terms of the amount of volume you can push through the U.S Flat-Rolled? Well, I assume that you’re going to get some capacity creep from the reinvestment spend you’re making? Thank you. David B. Burritt: Yes, Curt. I think we always said -- I think as Dave pointed out, we’re not chasing short-term results at the expense of this program. So we need to make enough to take care of our customers, our base. You have to leave a little bit of flex in your system, so you’re not running too tight, so you don’t -- you can serve them well. So that’s how 2 [ph] million tons, I think is by our choice, because we do want to get worked on the assets. I think as we’re looking at next year, it will be the same type assessment. Our capabilities may in fact be higher and they will be, but we’re going to look at the order book, we are going to listen to our customers and decide how much steel we make.

Okay. Thanks.

And next question is from the line of Novid Rassouli, Cowen & Company. Please go ahead.

Good morning, gentlemen. Thanks for taking my questions. Just to touch back on what Curt was just asking about, so the 1 million additional tons that you're expecting in capability -- in production capability by 2020, so we really shouldn't expect to see that incremental 1 million tons until 2020? As you said, you're sticking with the course regardless of what the market is doing? David B. Burritt: I'd not go that far. I said depending on what our customers need we will make our product around that. As our customers start showing a bigger need and we need to put that up to 10.2, 10.4, 10.5, we will move in that direction when we need to. So we’re not going to -- its going to be available to us sooner if our customers needed.

Okay.

We are going to make sure again that on the price is the 15% to 20% return by 2020, and so we will be adaptive here. But we do want to make sure that we get this revitalization in place and also the reliability centered maintenance. So we have to make sure that we manage this day-by-day, quarter-by-quarter and throughout the full-year. But just to be clear, it's about the longer-term that we’re focused on here and meeting the customer here need in the current period.

Great. And the 2018 U.S Flat-Rolled mix of contract versus spot, should we expect that will be very similar than the 2017? David B. Burritt: Yes. I think that’s pretty likely. If anything you could maybe inch up a little bit more in the contract, but nothing -- I would say nothing significant. That’s roughly 80-20, it's probably about the right mix.

And those incremental tons you're talking about, 10.2 to 10.2, where would those be distributed likely within that mix? David B. Burritt: It really depends on which customers need it. I mean, if any particular sector is running stronger, it's going to be for those customers that want more volume from us.

Okay. And my last question, on the Flat-Rolled per ton or cost per ton on the Flat-Rolled side, very steady over the past couple of quarters here, three quarters. Any reason for that to change in '18? I know that you guys kind of adjusted some of your spending. It look like revitalization spending used to be kind of peaking in '18, but based on the numbers it looks like that's more likely '19 and '20. So I just wanted to see if there's any reason that that would adjust or if we should continue to assume that that should remain pretty steady? David B. Burritt: I think it's a couple of headwinds I pointed out to Curt's question. So raw materials, some other materials costs are going to flow through, but nothing probably really significant beyond that with volumes pretty constant and the other major materials pretty constant, shouldn’t be a lot of surprises that we can see right now.

Great. Thanks, guys.

Next question is from the line of Timna Tanners, Bank of America. Please go ahead.

Yes. Hey, good morning, guys. David B. Burritt: Hi, Timna.

On the auto contract side, I know that another steel mill earlier this week talked about pretty competitive environment still. So I just wonder if you could provide a little bit more color now that they should be the annualized ones that are kind of the bulk of what I believe you do, if you could characterize the ability to pass through higher costs given that that’s about a third of your shipments in Flat-Rolled, roughly? David B. Burritt: Thanks, Timna. This is Dave. Maybe first, just autos finished the year with solid fourth quarter sales and we entered 2018 with the lowest day supply on hand since 2014. So we feel like automotive is likely to deliver consistent performance with this year. So I think given that we feel that autos can be pretty much in line with what we had for 2017.

I understand. David B. Burritt: Timna, I should -- I might add a little color on that. I think everybody knows we have a fair amount of seasonality faced out here, but when we think about first quarter at least we do expect that we will see some meaningful -- commercial uplift, particularly for prices in the Flat-Rolled segment. So, I mean, that’s what we’re seeing right now. Other method, we do have a normal seasonal headwinds in our mining, we’ve some near-term raw materials pressure probably in Europe, probably with higher maintenance and alloys expense, fourth quarter -- from first quarter versus fourth for Flat-Rolled in Europe. I think when we met that all out, we’re probably expecting the first quarter is going to come in somewhere -- move it down from fourth quarter price somewhere in the $250 million EBITDA range.

That is super helpful. It was not exactly what I was asking, but that was really helpful. I guess, I was just trying to understand the ability to get pass through higher costs in your contract business, given that competitive nature of that auto industry end market. But I understood the volume commentary on that consistent performance, but should we understand that to be something where you can sustain margin, is that the consistency you’re referring to? David B. Burritt: I asked that if you look at our outlook we certainly have bigger commercial tailwinds than we have cost headwinds. So we’re operating our costs.

Okay, great. And then I just wanted to ask, if I could, on tubular, I’m kind of confused with that market because on the one hand obviously the rig count forecast looks better on the higher oil price, December imports went down for OCTG and then they look like they’re back up for January. You said inventories look pretty low, so that was encouraging relative to historical levels, but why -- what do you assume in your guidance just today’s market environment or do you see prospects for that improving with the trade cases and rig count going forward? David B. Burritt: Well, maybe I will just -- this is David. Rig counts as you know remain stable in the mid 900s and with energy extraction at high levels. We could see the OCTG market demand continue its steady recovery, which of course is good for the tubular segment as well as our North American Flat-Rolled business via the hot-rolled coil sales to customers. Of course the way this works is when the hot-rolled coil increase cost to the tubular business they have to find offsets for that. But concerning the tubular business more specifically, Timna, you recall where we’ve come from with this business and in the last half we’ve been able to deliver a positive EBITDA as we foreshadow and now we’ve some heavy listing here as we get to next year and deliver a positive EBITDA for the entire year.

Okay. That’s …

Yes, [indiscernible] our outlook is based on as we pointed out market conditions as of last Wednesday. So any -- if you have any other market assumptions beyond that, we certainly understand you layer that into your thinking, but our outlook is a point in time with no future assumptions embedded in it.

No, fair enough. And just I know that -- you’ve in the past, said that it's for sale at the right price, but any updated thoughts on -- whether or not tubular is core to your business? David B. Burritt: Yes. Tubular continues to be core to our business and frankly manage very, very well. You’ve probably heard we have a leadership change, we will be making an announcement. I think it's a testimony [indiscernible]. I think everybody knows this, actually joining in another company as a CEO when it's a testimony to the strength that we have in our talent here that we have people that are considered for roles like that. So we will be announcing who will be the interim person is, but we feel that tubulars are really strong business, getting stronger and it certainly can be part of our portfolio. But you have heard me say this before, everything for sale all the time. We are here for our stockholders. And if there's an opportunity for us to sell a piece of the business that would make sense for our stockholders, we certainly consider that. It's a matter of price and a matter of -- again what we can do to create value. So it certainly is a good part of our business. We expect to grow that business and we look forward to at the appropriate time turning on the EAF. But we still have to see that the EBITDA continue to make progress and we want to make sure that we have a flexible cost structure. And there are few things left before we make that call to get back in the game on EAF. But, yes, it does have an important part of our future portfolio, but again everything is for sale all the time and as I said we’re here for the stockholders.

Okay. Thank you.

Next question is from the line of Chris Terry, Deutsche Bank. Please go ahead.

Hi, guys. I’m interested in your views on the spreads at the moment, just if you can talk through the different product mixes, particularly the HRC, the CRC spread. How do you see that evolving through the year? Where do you think that will stabilize at? David B. Burritt: Well, I think the market is going to tell us what happens here. Certainly, those spreads have been winder and historically, briefly [ph] they never move it. They are moving back out a little bit now. I think we’re going to see an ebb and flow within a fairly tight range, it's quite the best what we have right now.

Okay. Sure. Sure. And then just on the tax, where you talked about tax rate of less than 21%, when does that actually kick in and can you just talk through the valuation allowance and the NOLs at this point after all the tax reform we’re seeing? Kevin P. Bradley: Yes. Hi this is Kevin. Thanks for the question. I will give you a little color on tax. Obviously, reform alone right just like infrastructure, anything that that really attracts EU and encourages U.S investing, it's going to be positive for U.S Steel and the industry. So obviously it's a good thing for us, specific -- specifically for us in the fourth quarter and full-year rate. What you're seeing is an $81 million benefit that we recorded in Q4 from the reform. That included a $71 million release of valuation allowance on our AMT credits that was $71 million, that’s going to be a refund that we’re actually going to enjoy over the next four years starting in '18. And then there was about a $10 million benefit that we recorded, we had a tax liability that we’re now applying the lower rate to, and that’s about $10 million impact. So that’s what’s driving the rate in the year. As we look forward, we’re a tax payer, and always have been in Europe. That’s 21% rate on our European business. And then going forward given the NOLs today in the $2 billion range, we don't see ourselves being cash tax payer in the U.S for some time. It's not going to give a specific date on that, but certainly a couple of years out. In fact, we will be enjoying this refund so the positive tax impact in the U.S. David B. Burritt: Yes. I think that’s a good point, Kevin. Frankly, the tax reform doesn’t impact us so much directly as it does indirectly. This tax reform is good for U.S Steel, because it's good for the United States and good for the globe. I think it's -- everybody understand this when one day you’re getting big companies taxed at 35% and now it’s 21%, there's a lot more opportunity to invest. And so as we see the ancillary effects of that on the marketplace and on us, we’re going to have probably better projects, more projects we’re going to invest in the business and we will get better returns and when we perform better, our employees will be rewarded for that and employees will stay focused to help our customers succeed and reward our stockholders. So, clearly tax reform is going to be a really good thing for I think most -- everybody even though it's not a direct impact on us, because of the -- billions of NOLs that we have.

Okay. Thanks, guys.

And next is from the line of Seth Rosenfeld, Jefferies. Please go ahead.

Good morning. I’ve two different questions. First on the asset revitalization CapEx and then separately on Europe. First on the CapEx outlook, you’ve commented earlier that of course you’ve had trimmed revitalization CapEx target for '18, now only expecting I think a $50 million increase year-over-year. At the group level, however, you're still targeting I think a $350 million increase in CapEx. Can you walk us through where else in the system you're expecting that increase in CapEx spend for the current year? Is that a reclassification of projects out of the revitalization plan, it's now to be treated independent? I will start there and then come back on Europe, please. Kevin P. Bradley: Yes. Let me start this off, Seth, right. So a significant increase you’re seeing, you’re calling it out on capital spending. I just want to remind everyone that asset revitalization is a very specific program within North American Flat-Rolled. It's not a 100% North American Flat-Rolled. It doesn’t include our coke making facilities, our mining facilities. Obviously, it doesn’t include Europe or our tubular. So we’re seeing a significant increase. We are happy about that. We are investing in our assets globally. And the North American Flat-Rolled revitalization is more than we had called out originally, but overall we’re very happy with the amount of investment that we're making. David B. Burritt: Yes, I mean the only thing I would say on top of Kevin is, we haven't moved out anything out of the program. We did say we shifted some work into our future years, and we can make sure we’re making enough products for our customers. But we haven't taken any project out of the program. The program is still the $2 billion total program we started with. Kevin P. Bradley: And again to reemphasize, it's the 15% to 20% eye on the price for 2020. That's what we're going to deliver and we can shift things from quarter-to-quarter or year-to-year, about $2 billion worth of spend, and we’re going to get the return so that’s 15% to 20%.

Great. Thank you. And then, separately please on Europe, it looks like your guidance implies roughly stable EBITDA of course in spot condition. Can you talk a little bit about some of the cost pressures you’re seeing in Europe from coking coal and iron ore, given the unique raw materials dynamics there versus in the U.S? And on European auto contracts, I think the expectation was maybe for stronger margin progression in European auto contracts than the U.S? Is that still a reasonable assumption for 2018? Thank you. David B. Burritt: Yes. We try not to get too much into detail with the wrong customers. I think in Europe you do see pretty good correlation in selling prices versus raw materials cost, push and pull maybe the core lag sometimes that gets in the way. But I think in Europe the biggest difference year-over-year is we do have some higher maintenance in all these plans for this year. We could do a little bit extra work on the cost side there. So that’s probably offsetting some other positives you were thinking about. Kevin P. Bradley: And maybe just to add a little more context on this, just to recognize the people in Europe, they’ve done an extraordinary job. Scott Buckiso and the leadership role there, the fourth quarter our European operations remain -- maintained a strong operating performance and they’ve been delivering consistently for the last seven quarters and that’s the kind of thing that we want to have in the business, and -- we do have this unfavorable impact of the higher raw material prices and particularly for coking coal, PCI coal, iron ore pellets, concentrate and so on. But clearly our folks are very focused, very disciplined and it's showing that in the consistent reliable results that we wanted to deliver across our entire company.

Great. Thank you very much.

And next we have the line of David Gagliano of BMO Capital. Please go ahead.

Hi. Just, first of all, a quick clarification question in terms of what you said earlier Dan on the sort of progression on EBITDA for the year. And by the way thanks for the indication with the first quarter, I think you said $250 million. Obviously, to get to the 1.5, that implies quite a ramp after that. So two questions really. One, does that ramp happen almost immediately in the second quarter? And then, number two, if you could break down the drivers behind the ramp, specifically how much of that ramp is tied to contract prices resetting higher throughout the course of the year versus say lower outage costs or other drivers during the year?

Hi, its Dan. I think the biggest factor that would make second Q move quite big is the seasonality mining. The mining operator -- that is a pretty deep dive in the first quarter, gets back to normal in the second quarter. So a big ramp 1Q to 2Q just on seasonality mining is what we see. I said we’re -- that outlook is based on holding prices where they’re and let's have flow-through -- it does then flow-through a lot of our contracts over the next quarter or so. So that would be building there also. You think about our quarterly vessel contracts, they’re going to pick up a benefit in the second quarter just based on if we hold prices where they’re today, so those are probably the two biggest moving pieces.

Is it reasonable to assume that it happens right away in the second quarter versus the first quarter? It's a $165 million average increase, that’s what I’m wondering and how much of that is to seasonality in mining? It seems like a pretty high number.

No, the other piece would be the as these current spot prices flow into the monthly and quarterly contracts.

Right. And can you tell us how much -- can you just break it down to how much is each one? How much of the iron ore seasonality versus the contract?

If you open our chart, what our mix is in the back of our presentation on the contracts. You can get a feel for how many tons that’s going to apply to. And then, let's say, you just kind of -- if you look at average CRU, 4Q versus what this was turning to for 1Q price that we’re, that should give you a reasonable estimate.

Okay. That’s helpful. And then just moving on -- just the change in the allocation of capital versus expenses for the asset revitalization program over the next couple of years, $300million I think it is down in expenses and up in CapEx basically versus the previous commentary. How much of that $300 million change is flowing through the 2018 expectations?

No, in 2018 not much. I mean, yes, as we said -- as we -- as we scrub the projects more and more and we get more comfortable with our ability to see enough detail to capitalize more than we have in the past. We are just getting a better read on the projects overall. So it's just a lot of study on the advanced projects, but probably nothing dramatic in '18 from that.

So is it more of -- not the pressure on it, but is it more '19 and '20? I mean, I’m going to [multiple speakers].

Yes, it would be more on the projects that are coming in later. Like I said, we just keep on continually scrubbing and revising projects and looking at where we have the opportunity to fair pricing with the system capability we have now to capitalize more in line with what everybody else does as opposed to how we did it traditionally.

Okay. That’s helpful. Thanks very much.

And next we have the line Matthew Fields of Bank of America. Please go ahead. Matthew Fields, your line is open.

Hello. David B. Burritt: Yes.

Hey, sorry about that. I just wanted to ask about the balance sheet, obviously the fourth quarter transaction that redeemed $200 million in secured was a positive from that point of view. Do you anticipate more of that type of transaction may be going after the rest of that issue in 2018 before the -- before its callable? And then, ArcelorMittal yesterday talked about a net debt level that's appropriate sort of even at the low point of a credit cycle. What do you think your appropriate level of debt is even at the low point of the cycle? Kevin P. Bradley: Hey, Matt, this is Kevin thanks for the question. I will say we’re just -- we are committed to strengthening the balance sheet of U.S Steel, right. We see significant opportunities to improve the efficiency and flexibility of our capital structure while we continue to deleverage and derisk the company. So, if you look at where we are now with total debt of $2.7 billion, cash of $1.55 billion, we’re at a net debt of $1.15 billion. So we’re at 1.1x net debt to EBITDA which is obviously a pretty good place to be. So we feel good about that, but we're not done. We're looking for opportunities to continue some good work. If you look at historically the company, we’ve been forced in difficult times in trough to make decisions that don’t create value, in fact, do the opposite. So what we’re trying to do is being very disciplined and prudent during these good times to derisk our balance sheet and protect ourselves, so that we're not vulnerable. In fact, we want to be able to be on the offense and opportunistic in troughs going forward. So we’re going to continue to look at that. We did take out $200 million of the secured debt that was at 8 3/8. And we also made a voluntary pension contribution in Q4, which also we look at that as part of our capital structure and part of the derisking that we want to do. As far as timing on -- we’ve said, we don’t see that secured debt is having a long-term position in our capital structure. We still feel that way and we’re going to look for the right time to address that opportunity, but that’s all the color I’m going to give on this call. But if I could just sticking to the balance sheet right, some of the movement that we saw in our pension liability, right. So we got a total liability in the pensions of $8.5 billion. We took a reduction this year in '17 of unfunded liability from about $1.2 billion down to about $700 million. It's in over $450 million reduction in our unfunded liability or about 40% in one year. We're feeling really good about that. And I think -- and just being prudent and disciplined around derisking the company so that we can be less vulnerable in the troughs, in fact more aggressive opportunistic in the troughs is really what we're trying to do as a leadership team. David B. Burritt: Yes, I think that’s right, Kevin. Kevin have these regular updates. In fact, we're very cash conscious as you know and in fact we will often have leadership meetings on cash daily because it's so important to the bulk of our company. We take a look at liquidity very seriously and working with Christie Breves, who is the Senior VP of supply chain management and procurement and revitalization of assets. Together with commercial entities, it have very intense meetings on how we manage our cash and our working capital. We take these things very, very seriously: as the pulse of our business and I'm very pleased with the way the team is really stepped it up in these areas and that puts us in this good liquidity position today and the working capital is in good shape. But we still have more to do, there is no doubt about it. There's a lot of work to do, but cash focus is really intense for us and sometimes uncomfortable because we do it so frequently. We have our hands on that pulse of cash. Kevin P. Bradley: Yes, I just encourage you on the pension side, Page 11 and 12 of the presentation gives some great historical context and you can really see the improvement. Our pension is now funded at 93% ,which is really a game changer for this company.

You guys have certainly done a lot of work there. So, I guess, while there's not a dollar value that you’re going to put up there, the messages were not done yet? David B. Burritt: There's work to do, a lot work to do. Kevin P. Bradley: We are going to continue -- you can expect us to continue to improve the credit profile of this company.

All right, great. Thanks very much, guys.

And next question is from the line of Piyush Sood, Morgan Stanley. Please go ahead.

Good morning, guys. Couple of questions from me. The guide for Flat-Rolled since it's based on CRU from last week, if you think a hot dip galv price lower than cold-rolled? So this is really a question about the market. Why do you think hot dip galv pricing is lagging behind cold-rolled and when should we expect some normalization, if any?

Yes, like I said, there's -- it's going to be supply demand where customers needed the most or are right now, I guess, on the galv side, like how galvanized substrates margin is little bit lower, but it's just going to be driven by supply demand for three particular product.

All right. And the 2020 target of EBITDA increase of roughly $300 million, it now refers to the target as a 2020 exit rate. So is there some slippage in timing or are you just providing some more clarity around this? David B. Burritt: That was just a clarification. That was always how we saw the plan. If you look at those targets, those were all exit rate targets.

Great. Thank you.

And next we have Charles Bradford, Bradford Research. Please go ahead.

Good morning. David B. Burritt: Good morning, Charles.

I wanted to talk a bit about the seamless business. First of all, there are only a few guys domestically that are making blooms these days. Have you been able to either tie their selling price to your seamless price or are you straight supply and demand?

It's an open negotiation with our suppliers. It's going to be supply and demand driven.

Do you know if the Mexicans are considering or have reopened their plants in Lorain, which was your typical source?

Honestly, Chuck, I haven't asked our guys that question. I don’t know the answer to that one.

Okay. And then are you importing blooms?

No.

Good to hear. Thank you.

All right.

And next we have Phil Gibbs, KeyBanc Capital. Please go ahead.

Hey, good morning. David B. Burritt: Hey, Phil.

I had a question on the CapEx for 2018 of $850 million. How much of that specifically is targeted Flat-Rolled and is the contemplation of Fairfield EAF baked into that?

The EAF is its own standalone event. So, right now, I mean, this early in the year we’ve a lot of prospects at all three segments we are evaluating. So I don’t know that we have a specific targeted mix with any [indiscernible] just yet. We could probably give priority from change from the year. So I would say, at this time we really don’t have a really clearly defined amount by segment. We want to keep some flexibility. So like I said, if we get some better return projects, whether its Europe for tubular, we will shift in that direction.

Okay. And Kevin, what's your net working capital expectation for 2018 given how closely you manage the cash position of the company here? Kevin P. Bradley: Yes. Great progress that we've made. We’re actually looking to try to hold, especially with the inflation in raw material prices. We're also being very conscious, especially given this last winter in terms of what’s the right level of inventory to carryover, giving potential weather risks. So, right now we've made great progress. But I’d say we will look for improvement across the different components of working capital, but on the main, we'd like to kind of hold it where it is on a daily basis. We’ve come down considerably, we are upper quartile in terms of our cash conversion cycle. At 30 days we're pretty excited about that, but really right now we are looking to try and hold at that level and not give up ground. Kevin P. Bradley: That’s cash conversion cycle, it's something that we're very, very focused on and while we hit the 30 days that number will probably go a little bit higher here. The working capital, you will recall as we raised about a $1 billion worth of improvements in working capital over the last couple of years which helped us to be able to afford the revitalization program in addition to the equity raise that we had. So this cash conversion cycle, we actually had an all-time record here with the 30 days and so that could maybe go as high as 40, but we are focused very much on this piece as part of the liquidity, as part of the cash management, as part of this process and are we done now. We got work to do. There's more we can do in terms of the way we run our operations and the improvements that we need to make, but it continues to be a big focus for us.

Dave, I just have a strategic question for you on automotive. Give us any flavor in 2018 of your mix of advanced high strength steels in the automotive book, maybe versus five years ago and where you see that going in and call it 3 to 5 years based on your view of the market and then also some of the investments that you're making? Thanks. David B. Burritt: Yes, thanks for that question. I think everybody is aware of the investment that we've made in PRO-TEC. This is a galvanizing line investment with Kobe Steel. It’s about 0.5 million tons. And you figure if we’ve got 10 million tons in total that tells you basically what that new opportunity is, but for now on there's not a real big chunk that’s in this advanced high-strength steels. This is more future work that is in process. But this is kind of the keys to the kingdom for us here on this Gen 3. And it is going to grow and we’re going to continue invest in this. So longer-term it will become a bigger percentage. First, the additional 500,000 tons in the next couple of years will start ramping up there, but that’s going to be a number that grows over time. But for right now and for the near-term it will be a small number, but it is going to grow and we have to be very successful in this Generation 3 steel. You recall our Gen 3 steel is different than others, it's different than the press hardened steel. And our customers are lined up to participate in this. So this is our future in North American Flat-Rolled and we need to make sure that we're successful at it. So again getting more specific to your question is not a whole lot there, there's not a -- it's not a big number now. It's going to grow, but it is going to take some time for that to be a more important number in our total portfolio.

Thank you. And our final question is from the line of David of Macquarie. Please go ahead. David your line is open. Your mute button maybe on.

Can you hear me? Hello.

Okay, we can hear you now.

Just a quick question on the first quarter outages in mining and stuff like that. Is that [technical difficulty] weather this year than expected with the outages in the Flat-Rolled from other perspectives and are shipments impacted at all from a steel perspective? David B. Burritt: We are having trouble hearing you. You’re breaking up. Could you repeat that please?

So, I was just asking about the first quarter issues in the mining. Is that more to weather related than normal? And also are you having any issues from a weather related perspective in the Flat-Rolled business or with other steel business?

David this is Dan. No, the mining seasonality is based on really -- primarily the lofts closing. It's a scheduled event every year. So there's nothing there. As far as weather in general, we haven't seen any material impacts on our businesses at this point now. David B. Burritt: To be clear, every winter you have issues in this business. It's a challenging. The things freeze up and it's tough. So certainly the weather does have an impact on our facilities and we fight through that every year. And that’s another reason why typically the first quarter is a bit lighter.

There's nothing more than normal stuff, like there was anything extra. Like, I know that several years ago you had big issues from [multiple speakers]. David B. Burritt: [Multiple speakers] are running better this quarter, much better than a year-ago.

Thank you.

Okay. Thanks, David. Dave, you want to have some final comment for us. David B. Burritt: Well, thanks everybody for joining us in today. We are working hard every day and are focused on delivering long-term results without being distracted by short-term market volatility. We believe our intense focus on operations and improving safety, quality, delivery and cost will result in more reliable and consistent results and create value for all of our stakeholders, our stockholders, our customers, our employees and the communities where we operate. We are building the kind of results that should give investors more confidence in our ability to create value by delivering cost effective and reliable solutions for our customers. Thank you. It's time for us to get back to work.

Thank you. Ladies and gentlemen, that does conclude your conference. We do thank you for joining, while using AT&T Executive Teleconference. You may now disconnect.