Good morning, ladies and gentlemen. My name is Rob, and I am your conference facilitator today. I would like to welcome everyone to the Cleveland-Cliffs Inc. Second Quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. The company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking with the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995. We, the company, believe that its forward-looking statements are based on reasonable assumptions; such statements are subject to risks and uncertainties that could also cause actual results to differ materially. Important factors that could cause results to differ materially are set forth in reports on forms 10-K and 10-Q, news releases filed with the SEC, which are available on the company's website. The conference call is also available and being broadcast at clevelandcliffs.com. At the conclusion of the call, it will be archived on the website and available for replay. The company will also discuss results excluding certain special items. Reconciliation for regulatory purposes can be found in the earnings release, which was published this morning. At this time, I would like to introduce Lourenco Goncalves, chairman, president, and chief executive officer.

Thank you, Rob. And good morning, everyone. Our adjusted EBITDA in Q2 showed an improvement of $271 million from the prior quarter. We achieved higher shipment volume targets, and as a result, we improved our operational efficiency and lowered our production costs. Our recently announced footprint optimization initiatives are underway as planned, and you will see their impact in the second half of this year. We are laser-focused on cost-cutting and steel sales. That is the way we will continue to execute going forward. Section 232 tariffs, implemented on March 12 at a level of 25% and increased to 50% on June 4, have played a significant role in supporting the domestic steel industry. Foreigners competing unfairly will do whatever they can to get into our great American domestic market. They pay their workers much less than we pay our American workers. They receive direct subsidies from their governments and do not have to comply with the stringent environmental standards and laws we have in place in the United States. So far, there is no indication that the Section 232 tariffs will be used as a bargaining chip by the Trump administration as leverage in trade deals with other countries. We appreciate this and fully expect that the administration will keep in place and enforce the Section 232 tariffs. If the United States really wants to continue to have a strong domestic steel industry, proper enforcement of the Section 232 tariffs is absolutely necessary, with no exceptions or exemptions allowed. The import data that has been published thus far makes it very clear that the 232 tariffs are having a positive impact not just on steel but also on the automotive sector. Both flat-rolled steel imports and light vehicle imports reached multi-year lows in April. The Trump administration has prioritized two sectors: steel and automotive, that are critical to the strength of our economy, to the resilience of our supply chains, and to United States national security. Cleveland-Cliffs Inc. sits right there at the intersection of both sectors: steel and automotive. The place where imported steel remains a huge problem is Canada. We understand why the US has a 50% tariff on imported steel from Canada, and that is fine. We are keeping all this steel in Canada, and we are doing that by design. Since we acquired Stelco in November of last year, it has been well-known that the United States is a net importer of steel. What is not as well-known is that Canada is also a net importer of steel. Just like the US used to be prior to President Trump, Canada is still being taken advantage of by all foreign producers, friends and foes, all dumping steel into the Canadian market. The Canadian government's latest attempt to stop unfair trade is insufficient; it only covers 70% of steel imports into Canada. Because of the insistence on allowing free trade agreement countries, the so-called FTA friends, to continue to use Canada as their outlet for overproduction, our message is very clear and easy to understand. If Prime Minister Carney and his cabinet want to have a steel industry in Canada, they should put in place significant trade protections, and then they will have a strong domestic steel industry in Canada, capable of supporting a vibrant domestic Canadian market. We are doing just that here in the United States and it is working. Strategic protection leads to reinvestment, full employment, and long-term viability. Our Canadian employees need more action, real action, from Prime Minister Carney. Now on the topic of automotive, the most relevant issue to be attacked and resolved is enhancing the consumer's ability to finance the purchase of a vehicle. Despite no signs of tariffs reigniting inflation, the Federal Reserve continues to keep interest rates unnecessarily high. After making home buying unattractive with very expensive mortgages, the Fed's inaction on cutting interest rates is now an impediment to car buyers. Once Chairman Jerome Powell is gone, and that is not a matter of when, not if, and as soon as interest rates come down by 50 or 75 basis points, the automotive sector will take off again. Demand is there, but this Fed chairman will not act. We need a new Fed chairman appointed as soon as possible. At Cleveland-Cliffs Inc., even with the growth we have been seeing in our tonnage delivered to the sector, we still have underutilized automotive steel capacity. With the OEMs continuing to bring back production to the United States, coupled with consumer-friendly interest rates, the automotive sector will thrive. Cleveland-Cliffs Inc. is ready for that. We can ramp up quickly, and our capabilities, quality, and customer service are well-known by all OEMs. Cleveland-Cliffs Inc. is in a unique position to support the upcoming resurgence in American vehicle production. Right now, not in three or five years. Other relevant news in trade enforcement is the very important 50% tariff that will go into place on Brazilian pig iron starting August 1. Cleveland-Cliffs Inc. does not rely on imported pig iron at all; we have our own hot briquetted iron facility in Toledo, Ohio. However, several of our EAF competitors do rely on imported pig iron. We are vertically integrated and we use American iron ore, American coal, and American natural gas as feedstock, all produced right here in the United States of America, employing American workers. There is no justification to exempt imported pig iron from tariffs as it is merely creating an artificial cost advantage to benefit some players to the detriment of others. That would be equivalent to allowing imported steel into our market just because domestic steel is cheaper than mass-produced steel or allowing for imported cars made in China to be dumped into the United States just because Chinese cars are cheaper. Cleveland-Cliffs Inc.'s vertically integrated business model differentiates us from the rest of the industry by being completely independent from imported feedstock. The EAF mini-mills, rightfully so, do not support any exemptions for imported steel. As a matter of coherence, they should not ask for exemptions for imported pig iron from Brazil or from any other country. In Q2, we also had some exciting news for our stainless steel business. Our smaller but consistently profitable stainless business is one of our best-kept secrets. During the quarter, we completed and commissioned a $150 million investment in our bright anneal line at our Coshocton Works plant in Ohio. Bright annealed stainless is a premium stainless steel product for high-end automotive and critical appliance applications. If you think about the bright trim surrounding a car window or the inner drum of a washer and dryer, that is what we make there. With this investment, which should generate a quick return on invested capital, we are dramatically improving the quality and productivity of this critical product that our customers rely upon Cleveland-Cliffs Inc. for. Finally, let me briefly touch on the shifting competitive landscape in the domestic steel market. The United States remains the most desirable market for steel. Nippon Steel's entry into our market investment promises highlight the strengths and appeal of the opportunities here. Nippon's nearly $29 billion total investment proves something we have said all along: fully integrated mining, pelletizing, blast furnace, BOF production is necessary, particularly in a country like the United States that already has more than 70% of EAF-based steelmaking. If that was not the case, Nippon Steel would have just built a large number of new EAF mini-mills in the United States for a much lesser investment and would not have purchased a primarily integrated steelmaker. They see the value in blast furnaces just as we at Cleveland-Cliffs Inc. do. Through their recently acquired and now third-tier subsidiary, USU, Tokyo-based Nippon Steel is now an active participant within the American market. This is a fact, and the fact creates a new level of optionality for other market participants, Cleveland-Cliffs Inc. included. Among several possible outcomes, foreign investment in Cleveland-Cliffs Inc. becomes an attractive opportunity for other foreign entities, particularly due to our unique position as a major supplier to the automotive sector and of electrical steels. With that, I will turn it over to Celso. Thank you.

Q2 results were largely driven by better realized pricing, cost reductions, and record shipments. Volumes of 4.3 million tons represented a 150,000-ton increase from the prior quarter and allowed us to run our mills more efficiently. We had previously expected a slight unit cost increase quarter over quarter, but with the solid operating performance, we actually recorded a $15 per ton unit cost decrease. The average selling price of $1,015 per ton represented a $35 per ton increase from the prior quarter, driven primarily by higher index pricing and partially offset by lower slab and plate pricing. Stelco pricing was relatively flat. After the Arcelor slab agreement expires in December, assuming today's pricing and demand environment, we should get another $125 million per quarter EBITDA boost. From a cash flow perspective, inventory reductions, particularly in raw materials like iron ore and coke, served as a meaningful source of cash in Q2. The acquisition of Stelco came with the benefit of being able to use excess coke production out of Hamilton in our U.S. mills. Stelco's pricing has been hampered by the excessive imported steel penetration in Canada, but the value of being able to use Hamilton coke has been the biggest driver of us reaching our cost synergy target. As a result, we were able to let one of our third-party coke supply contracts expire on June 30, reducing our need to purchase coke externally. We have another coke contract expiring at the end of this year that we will no longer need either. Our ability to source more coke internally in and of itself has already made Stelco a valuable contributor for the combined company, and this will be further bolstered once the next coke contract expires. On top of that, based on current market dynamics, we expect even lower coal prices for 2026. Our balance sheet remains well-positioned as a result of Q2 and future working capital reductions. We ended the quarter with $2.7 billion of liquidity and no near-term maturities. Net debt remains manageable and is soon to be on a downward trajectory. Our capital allocation priorities remain clear: use excess free cash flow to pay down debt and reach our leverage target. This has been the history of my nine years at Cleveland-Cliffs Inc. We lever up to make necessary acquisitions, and we use the resulting cash flow to pay down debt quickly. Potential non-core asset sales could also accelerate debt reduction. We have now engaged JPMorgan as our advisor and launched sell-side processes to explore the potential sale of certain non-core operating assets. These selected assets could represent billions of dollars of value, and we will only sell these assets if the sum of the parts valuation unlocks trapped value for Cleveland-Cliffs Inc. shareholders. In addition to these non-core operating assets, we are also receiving inbound interest in some of our recently idled facilities, which could also sell for cash. These sites, particularly Riverdale, Steelton, and Conshohocken, are all uniquely positioned geographically and have what data center developers are looking for: access to power and water, with the infrastructure already in place. While these properties are idled, if opportunities do not arise that justify restarting, they have good value, and the amount of interest we have received in these properties so far is reflective of this. If we are successful in executing any sales, the cash proceeds will go directly to debt reduction. We also took actions during the quarter to lower both our SG&A run rate and capital expenditure budget. Our full-year 2025 expectations for these items were reduced by a combined $50 million. These were proactive, surgical reductions based on our newly tightened footprint. Our overhead structure is now leaner, and we are getting more out of every dollar we spend. Our steel unit cost reduction target of $50 per ton remains firmly on track. This cost reduction pace, combined with healthy HRC pricing, is expected to support growing EBITDA generation in the coming quarters. Operational discipline, capital prudence, and free cash flow generation remain our top financial priorities. We are confident that these principles will continue to guide us to even better results in the coming quarters. With that, I will turn it over to Lourenco for his closing remarks.

Thanks, Celso. We showed strong improvements in pricing, costs, and sales volumes in Q2. Going forward, the macro trends are aligning in our favor. With that, the second half of 2025 is shaping up to be much better than the first half. I will now turn it back to Rob for Q&A. Thank you.

At this time, we will be conducting a question and answer session. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, that is star one. Thank you. Our first question comes from the line of Nick Giles with B. Riley Securities. Please proceed with your questions.

Thank you, operator. Good morning, Lourenco and Celso. It's good to see the cost reductions come through in Q2. I was just wondering how we should think about the cadence of cost reductions from here? How much of a sequential change could we ultimately see in Q3? And then was curious just to get your thoughts on working capital considerations. Thank you very much.

Yeah. Sure. Hey, Nick. Good morning.

Happy to provide some general guidance for Q3. For Q2, quarter over quarter, costs were down $15 a ton versus our expectations to be up $5 per ton. So we are happy to get the cost reduction going here in this quarter. Looking ahead to next quarter, we expect costs to be down another, call it, $20 per ton from Q2 to Q3, with even further reductions in cost in Q4. Q3 costs were originally expected to be down more than $20 per ton, but some of the cost reductions were pulled forward into Q2, a trade-off that we are happy to take. The asset optimization initiatives that we have been talking about are in motion, and you can see that here already with the Q2 reductions. We expect Q3 to also benefit from similar shipment levels as Q2. As for the full year, we still expect costs to be down that $50 per ton in 2025 relative to 2024. That is largely driven by the optimization of our footprint, reduction of fixed costs, reduced overhead, improved efficiencies, and a favorable cost mix as well.

I appreciate that detail. My second question, I was wondering if you could remind us how we should start to think about CapEx expectations in 2027. I believe you do have a reline next year. So curious what kind of puts and takes we should have in mind, particularly some of the alterations at Middletown.

Yeah. I will take that, Nick. Look, we do not have a reline next year. Our next reline is 2027, so there is no reline, no CapEx related to reline in 2026. As far as Middletown, the original project that we had there was basically replacing the blast furnace with two EAFs and a direct reduction line. That line would be supported by hydrogen instead of natural gas. That was the end game of that project in Middletown. The very first thing is that it is clear by now that we will not have availability of hydrogen, so there is no point in pursuing something that we know for sure is not going to happen. It is not like that project was canceled by the DOE because it was not. We informed the DOE that we would not be pursuing that project. What generates a very good conversation with the current DOE's current team of the Department of Energy on revamping that project in a way that we preserve and enhance Middletown, using high-quality coal, coke, and natural gas, our American iron ore from Minnesota, keeping the flagship Middletown works as our flagship facility, supplying automotive steels, and making our blast furnace operate fully under AI. That is what we have in scope right now, and we are working with the DOE. I have been giving you as much detail as I can share at this very moment.

Lourenco, thank you very much. Guys, continue best of luck.

Our next question comes from the line of Michael Harris with Goldman Sachs. Please proceed with your question.

Yeah. Thank you, and good morning. Just a question around free cash flow. You have expectations that EBITDA continues to improve, and you have the cost reduction underway. So how should we think about free cash flow generation in the second half and maybe speak to expectations of that being positive and how sustainable that would be?

Yeah. Sure. Hey, Mike. It is Celso here. Starting with Q2 free cash flow, we had a cash outflow of $67 million for the quarter, largely driven by a meaningful release in working capital as we reduced inventory dramatically. Going forward, we should release even more working capital in the second half of this year. We have shown our ability to generate robust free cash flow in the past. If you look back, in prior years, we have averaged over a billion dollars of free cash flow each year since our transformation. So the potential for free cash flow generation is meaningful, and if we see some tailwinds and sustained support from pricing, that could accelerate pretty fast. As we go into an environment where we are generating free cash flow, we have been saying we will use all of that to pay down debt, so you could see the deleveraging happen very quickly.

Yeah. Lourenco here. Let me just add a couple of things on that, Mike. Remember that we shut down facilities that were eating into our ability to generate cash. Two in Pennsylvania and one in Illinois. That is behind us. So that is number one. Number two is that our model is predicated on an integrated model that is predicated on volume. So more than anything, we need consistent volumes. The volumes are going away not only through the well-established practice of importing steel into the country, but with the newly developed practice of importing cars into the country. President Trump addressed both with Section 232 tariffs for steel and for cars. The import of steel is no longer a fact as it was before. Now people touch imports with a lot of care because they could get burned. Secondly, car manufacturers are finally waking up to the fact that the easiest and fastest way to produce more cars in the United States is deploying back the installed capacity that is in place already. Just bring more shifts, hire more people. Produce more cars, start now. Do not just promise to build plants to produce cars in five or six years. That is not going to fly. Let us produce more cars now. We are seeing that as we speak. Cleveland-Cliffs Inc. is the only one that has the installed capacity to promote that to happen. It is happening already, and it will pick up steam as we go. All these things will point towards a higher cash flow generation. I did not mention anything regarding prices. We depend on volume, and our cost reduction in our integrated model is predicated on having base loads and volumes going through the footprint.

Okay. Thanks. That is very good color. Appreciate that. And then as a follow-up, if demand picks back up, how much can this reduce the working capital unwind?

Yeah. Sure. I think we have talked about it already. We saw a meaningful inventory reduction here in Q2 and we expect that trend to continue into Q3 and Q4.

Thanks, Mike.

The next question is from the line of Lawson Winder with Bank of America. Please proceed with your questions.

Good morning, Lourenco and Celso. Thank you, operator. Celso, you did not touch on the average selling price expected for Q3 2025. Could you touch on how that is shaping up? And could you also touch on the volume expectation for Q3 2025? And also, I just wanted to say nice work on the cost reduction in Q2. Thank you.

Yeah. Sure. Hey, Lawson. Just to add some more color into Q3, we expect to see continued EBITDA improvement from Q2 to Q3. I want to make that very clear. Shipments should be similar in Q3 as they were in Q2 at that 4.3 million ton level. As it relates to average selling price, you can calculate it based on how the composition works. If you want to take all the pieces and calculate it yourself from Q2 to Q3, it is about one-third fixed on a full-year price, with resets throughout the year. About 20% of our volumes are under CRU month lags. About 8% is the slab agreement on a two-month lag. About 5% is CRU with a quarter lag. And about a third is the remainder kind of spot. This should give you enough to calculate for Q3.

And then on the volumes, could you just give us an idea of how those are shaping up? And then further, I just wanted to ask about the D&A in Q3. There was a step up in Q2. How is that expected to move on a Q-over-Q basis versus Q2 into Q3? Thanks.

Volumes in Q3 should be around the same level as Q2 at that 4.3 million ton level total, so call it flat from Q2 to Q3. D&A stepped up due to accelerated depreciation from the idled facilities, but it should return to Q1 levels.

Fantastic. If I could just get your comments on Canada? There is some concern about the economy there slowing down. I would like to just hear your views on what you are seeing, particularly given that you are selling 100% of your volumes into Canada. Are those concerns justified from what you are seeing from a steel industry point of view? Thanks. That is all for me.

Lawson, look, let us clarify. We acquired Stelco, and Stelco is the steel company of Canada, in November of 2024. So it was not supposed to be the steel company that disrupts the domestic market in the Great Lakes of the United States. That was the main reason why I bought Stelco, because I believe in Canada. The problem is that apparently the Canadians, particularly the Canadian politicians, do not believe in Canada. They believe that Canada needs to be part of Europe. They are not. They believe that Canada depends on the United States. They do not. They need to wake up and stop being lazy in terms of thinking of their country as a satellite of Europe and the United States. Then they attract bad things said to them because they are all making. They need to grow a pair and understand that Canada is a very good country with a lot of potential, a lot of critical minerals, and a lot of things that can make it a powerhouse. The very first thing they need to tell foreigners is to get out of my market. Why do they have to lock in the import levels of 2024 that basically killed the Canadian steel industry? Because they cannot sell in Canada. At the very moment that Section 232 hit, we, out of stock, we started selling as far as British Columbia. Because the ones in the Western Canada market realized that they could no longer rely on Asians to supply steel to them. But then they went back because it is not just the liberals; the conservatives are doing a horrible job too. Long story short, Canada can fix themselves. The important amount of steel into Canada is roughly equivalent to the size of the Canadian market. If they stop that, we are done. They are self-sufficient, and we are able to supply that market. We have proven that. The difference between me and the rest is that I have little patience to keep repeating the same thing time and time again. I have repeated enough the normal pinna. Cleveland-Cliffs Inc., through Stelco in Canada, has a much bigger influence than Cleveland-Cliffs Inc. in the United States, and we have a lot of influence here. You should expect good things because I believe there are some politicians in Canada within the government that are waking up and seeing light. I have a lot of hope in my friends, cabinet members of the economy government. Let us see how Prime Minister Carney will react. He is not a central banker anymore. I do not like central bankers. But now he is a prime minister. So time to step up and do what is necessary for Canada. That is what I expect there. I do not know if I answered your question properly, Lawson. Are you okay with that?

That was fantastic. Thank you so much for your color. Thanks, Celso. Thank you.

Thank you. Thanks, Lawson.

The next question is from the line of Philip Gibbs with KeyBanc Capital Markets. Please proceed with your questions.

Hey, good morning. Lourenco, can you talk a little bit about automotive volumes in the second quarter and how they developed relative to maybe Q1 or the late stages of 2024? I know the volumes were under pressure.

Actually, if you are, it is the opposite. The volumes are growing. We are seeing all the OEMs producing more cars, announcing more moves into the US, stopping importing steel from Asia to feed their plants in Mexico, while they are moving the plants from Mexico to the United States. In the meantime, instead of buying steel from Asia, they are buying steel from the United States. We start to supply Mexico from the United States with the promise that we are going to supply them here as they grow the production of some models in the United States. We are seeing several announcements of models that used to be built in other places being moved back to the United States. The biggest example is one of the OEMs used to produce entire cars in South Korea and import them to the United States. They have already discontinued that practice and will start producing the model here in the United States. As we move into the second half, things will be more visible. Next year will be even more visible. It takes time, but it is already happening, and the numbers will start to show.

Thanks, Lourenco. I meant last year they were under pressure. I meant the recovery happening now just curious about the level and in terms of how much more you guys think you can grow that mix looking ahead?

We can grow a lot. I will not give you a number, first, because I do not have it. I do not want to give you an inaccurate number. But second, it all depends on how fast these folks will start producing cars. We are seeing even some OEMs that do not produce a lot of cars here in the United States planning to produce the totality of what they sell in this market in the United States. I think this will be one of the biggest accomplishments of the Trump administration when we look back in three or four years. It will be the resurgence of automotive production in the United States. Of course, Cleveland-Cliffs Inc. is the only one that is really equipped to support this growth as we speak. Of course, everybody can build as many plants as they want. It is so easy and fast to build a blast furnace and a BOF in this country. We should expect that to happen in the next 24 hours, but in the meantime, we have it. We have the facilities, finishing capabilities, and all the labs properly approved with the OEMs. So one of our competitors will not have these labs approved very soon, as you know. I cannot wait to get rid of that slab contract. That was the last thing that I negotiated when I acquired the assets of ArcelorMittal USA. I am glad I did for only five years. So in the five years, I am coming to an end. December 9, 2025, at 11:59 PM. I think I gave you as much color and volume as I could at this point, Phil.

Thanks, Lourenco. And I have a follow-up for Celso. How much of your overall business is on CRU quarterly? I think I got the rest of the calculations you provided. Thanks.

No problem, Phil. It is 5% CRU quarter lag.

The next question is from the line of Martin Englert with Seaport Research Partners. Please proceed with your questions.

Hello. Good morning, everyone. I appreciate the time. On the coke contracts, the June contract that ended was with Haberheld two for 550,000 tons, and that is the December-ending contract with Chevron one for 400. Is that correct?

Yes. That is correct, Marty.

Do you have roughly, like, around the $70 per ton benefit when you produce internal coke versus having to buy external on contract, or do you have any goalposts for a range? What does that benefit look like?

No. It is bigger than that. It is actually north of a hundred bucks.

Okay. Appreciate it. One quick follow-up. Are you seeing you mentioned winning some business and out of autos in Mexico for contracts. Are you seeing anything in the appliance market outside of the United States because of downstream 232 duties? Meaning, if they use US steel, they do not get hit with the duty when importing the appliance.

Yeah. It is a different dynamic in the two of them. Let us talk about Mexico: some facilities in Mexico were designed to be the dumping ground of transshipments from places like Korea and Japan and others. This practice is no longer acceptable. So these two suppliers that used to be the supplier for facilities in Mexico are now buying in the United States. That is where we see opportunity in Mexico. We are not super excited about it because this is a temporary thing. Do not forget. These plants are not supposed to be in Mexico; they are supposed to be in the United States. But for now, it is better to sell there instead of allowing steel from Japan to land in Mexico and then come to the United States to unfairly compete with our markets. That was not the spirit of the USMCA, and we are just bringing back what was on paper, and people started pushing the envelope until they crossed the line. We are fixing that. That is the dynamics with Mexico and the United States. As for appliances, we were able to include appliances in Section 232 as well, and that did for appliances exactly what it is doing for automotive. The big ones are starting to produce appliances in the United States again. This will be good for Cleveland-Cliffs Inc. and everyone who produces steel here in the United States.

So broadly speaking, it sounds like when you think about the total market size of fixed annual contracts, there will be a bigger market to participate in looking forward in the coming quarters, in the coming year? With some of that coming back and also winning business out of the border. Correct?

Yes, absolutely. That is a fair statement, a fair conclusion.

Any considerations when we think about winning more auto market share and fixed contracts in Mexico? On mix or that structure there with the contract or roughly comparable to what you participate in in the United States?

Very comparable. The only big difference at this point is freight, but freight is negotiable, and each case is different, and we are negotiating accordingly.

Okay. Appreciate it. Congratulations on the cost performance in the quarter. Thank you.

Thank you, Marty. Appreciate the questions and good luck at Seaport.

Our next question is from the line of Alex Hacking with Citi. Please proceed with your questions.

Yes. Good morning. I just have one question. Lourenco, in your comments, you mentioned that foreign investment in Cleveland-Cliffs Inc. could be an attractive opportunity. There is a lot of potential range in foreign investment, right, from minority stakes and assets to buying the whole company. Could you maybe give more color on what kind of transactions that you would potentially explore? Thank you.

Yeah. Look. We are an asset-rich company, and we believe that we are so undervalued at this point that the sum of the parts is a lot more valuable than the company as it trades on the stock exchange. So we are open, and we are, at this point, in active conversations regarding a number of non-core assets that could be generating billions of dollars in cash inflow to pay down debt, but we are entertaining a lot of inbound interest from different credible potential suitors for endeavors that we might or might not take going forward.

Okay. Thanks a lot, Lourenco.

The next question is from the line of Carlos De Alba with Morgan Stanley. Please proceed with your question.

Thank you. Good morning, gentlemen. On the cost guidance, sorry, on the cost performance in the quarter, obviously, it was much better than expected. Yet the guidance for the year remained at a $50 year-on-year decline. Is this a conservative outlook, and could you potentially perhaps perform better than the $50 decline just in line with what you did in the quarter?

Yeah. Look, we wanted to be conservative. As stated earlier, we were able to deliver a quarter-over-quarter cost reduction when we initially had an expectation to go up. Some of that has been pulled forward, which is why we are keeping the same guidance for the full year, but I think your point is fair. There are opportunities for us to exceed our own expectations. Things like scrap and pig iron tariffs are going to impact the market. We have the coal and coke opportunities that we talked about. We are running our mills more fully and efficiently, so all those things could provide tailwinds beyond what we have guided. But we wanted to be conservative and kept the overall guidance for the year flat.

Fair enough. And then can you like, what happened at the end with Dearborn and Cleveland-Cliffs Inc. number six? Can you confirm that Dearborn was idled? Updates would be great.

Yeah. Cleveland-Cliffs Inc. number six is up and running, and the other one is going down. We replaced one with the other. That is pretty much it. There is no change. I am not sure if I understood your question.

Just wanted to confirm that, Lourenco. So very, very clear. And then if I may, finally, can you provide any further color on the non-core assets that potentially you could sell?

Yeah. They are black. Some are blue. Some are yellow. That is the color I can give to you.

Thank you very much.

You are welcome.

Thank you. At this time, I will turn the floor back to management for closing remarks.

Thank you, everyone. I appreciate talking to you. Have a good day.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.