Please stand by. We're about to begin. Good day, and welcome to the Ryerson Holding Corporation's fourth quarter 2021 conference call. Today's conference is being recorded. There will be a question and answer session later. If you would like to ask a question, please press star one on your telephone keypad at any time. Again, that is star one to ask a question. At this time, I would like to turn the conference over to Mr. Jorge Beristain, Vice President of Finance. Please go ahead, sir.
Good morning. Thank you for joining Ryerson Holding Corporation's fourth quarter 2021 earnings call. On our call, we have Eddie Lehner, Ryerson's President and Chief Executive Officer, Mike Burbach, our Chief Operating Officer, Jim Claussen, our Executive Vice President and Chief Financial Officer, and Molly Kannan, our Controller and Chief Accounting Officer. John Orth, our Executive Vice President of Operations, will be joining us for Q&A. Certain comments on this call contain forward-looking statements within the meaning of the federal securities laws. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements and are not limited to those set forth under risk factors in our annual report on Form 10-K for the year ended December 31, 2021.
You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date they are made and are not guarantees of future performance. In addition, our remarks today refer to several non-GAAP financial measures and are intended to supplement, but not substitute, for the most directly comparable GAAP measures. A reconciliation of non-GAAP to the most directly comparable GAAP financial measures is provided in our earnings release filed on Form 8-K yesterday, also available on the investor relations section of our website. I'll now turn the call over to Eddie.
Thank you, Jorge, and thank you all for joining us this morning to discuss our fourth quarter 2021 results. To all of my Ryerson colleagues, 2021 was an exceptional year with many exceptions, to say the least. It was an extraordinary grind for all involved, requiring true grit that set Ryerson on a path for new, better, and accelerated possibilities for the business. Within that grind was a unity of mission and purpose and a collective will to get the job done with great effort, producing record results. I want to thank each and every one of my Ryerson colleagues for answering the bell safely round after round and working together so admirably and to such meaningful effect. I thank our customers whose business we never take for granted, especially when circumstances present improvisational challenges beyond compare.
I thank our suppliers for working with us through the pandemic-infused supply chain frictions and fractures on a scale not experienced in this modern era. I thank our shareholders for their continued support of and faith in an ever-improving Ryerson. Simply put, Ryerson is on a good trajectory. There is an important enterprise value shift well underway between equity and debt, with an operating model that can deliver better quality of earnings throughout the cycle. The fundamentals around liquidity, cash flow, working capital, and expense management are strong, and Ryerson's strategy as an intelligently connected network of value-added service centers is paying dividends, figuratively and literally. Debt is lower. Legacy liabilities are lower. Net book value is higher, as are shareholder returns.
The outlook for Ryerson's products and services has solid underpinnings as more investment in recyclable industrial metal supply and demand is needed in order to service society's survivability, progress, and a more broadly shared prosperity that is sustainable. Ryerson is making important investments to modernize and digitize our service center network while always evaluating strategically compatible acquisitions through our business development pipeline. Our base case for 2022 is optimistic on improving demand release via a gradual loosening of supply chain constraints against a backdrop of historically well-supported price drivers, while acknowledging the array of risks that may affect our base case outlook. I'll now turn the call over to Mike to further discuss the macro, pricing, and demand environment.
Thank you, Eddie, and good morning, everyone. At a global macro level, we are now seeing aluminum and stainless input prices increasing and reflecting geopolitical risk and ongoing supply-side constraints at LME warehouses. Ryerson's diversified metals mix, with 50% of revenues generated from bright metals, helped buffer gross margins in the fourth quarter, and we expect this trend to continue during 2022 as higher global energy costs support higher processed metals pricing. Closer to home, domestic HRC pricing descended faster than anticipated in the past three months but are now at parity with imports, and we are beginning to stabilize. On the demand side, we continue to observe positive demand factors supportive of manufacturing strength, including growing customer backlogs, decarbonization, infrastructure investment, and onshoring. U.S. commodity markets experienced pricing dichotomy during the fourth quarter of 2021.
Flat carbon steel products experienced a decline in pricing due to shortened mill lead times, while bright metals remained elevated, reflecting rising global energy costs and regional supply chain tightness. Pricing across carbon steel products began to decrease throughout the fourth quarter of 2021, with CRU hot roll prices down $422 per short ton or 22% over the period. On the other hand, LME aluminum decreased by 2%, while nickel prices rose by 15% during the period. At this point, given underlying supportive demand conditions and gradually improving metals availability, Ryerson anticipates that carbon prices after their recent pullback will level off in 2022, while aluminum and nickel maintain relative strength. While HRC lead times have normalized to four weeks from 10 weeks at the peak of the pandemic, we also foresee demand conditions remaining supported by longer term secular trends.
Macro indicators remained positive in the fourth quarter of 2021, with the ISM Purchasing Managers' Index, or PMI index, continuing well above 50 for each month and the U.S. industrial production also reporting year-over-year growth rates. North American industry shipments as measured by the Metals Service Center Institute, or MSCI, contracted 7.9% quarter-over-quarter compared with a 9.6% decline for Ryerson's North American volumes. Early first quarter indicators point to improved demand trends after the fifth pandemic wave that led to some demand deferral in the fourth quarter of 2021. End market performance followed normal seasonal sequential softness, whereby most customers reduced production due to the holiday season. Two other factors impacted Q4.
First, end customers' production downtimes were exacerbated by impacts of the Omicron variant of COVID-19, straining available labor and parts, leading to a deferral of demand into 2022. Second, due to the rapid decline in HRC prices, some customers appeared to continue to defer spot purchases of steel, anticipating lower pricing in this new year. However, customer commentary remains hopeful for 2022, indicating improving sales and catching up on backlogs. As such, Ryerson noted sequential shipment declines in most of its end markets in North America in the fourth quarter, including metal fabrication and machine shop, industrial equipment, and ground transportation.
Bucking the seasonal softness trend was Ryerson's oil and gas sector, which again posted quarter-over-quarter improvement in North America shipments per day due to recovering exploration activity driven by surging energy prices as well as Ryerson's HVAC end markets, which also posted positive growth due to increased demand from the construction and home building sectors. While near-term production bottleneck and COVID-related issues persisted into fourth quarter 2021 results, the outlook for 2022 remains optimistic. We expect the first quarter to recover as we've seen a downturn in North American COVID cases and as such, expect an uptick in sequential volumes. With that, I'll turn the call over to Jim for our first quarter outlook.
Thank you, Mike, and good morning, everyone. While 2021 ended on a strong financial note, we expect first quarter 2022 revenues to be up sequentially as 2%-4% lower average selling prices due to declines in HRC pricing are more than offset by a seasonal recovery in volumes of up 7%-9%. Due to weaker quarter-over-quarter HRC pricing, we expect LIFO to flip to $28 million-$32 million of income in the first quarter of 2022 compared to an expense of $76 million in the fourth quarter of 2021 as replacement costs are falling relative to average inventory costs for the first time in 5 quarters.
Given these expectations, adjusted EBITDA, excluding LIFO, is expected to be in the range of $195 million-$205 million, and earnings per diluted share is expected to be in the range of $3.78-$3.94. Ryerson generated $107 million of operating cash in the fourth quarter of 2021 and ended the period with $639 million of total debt and $588 million of net debt, a decrease in net debt of $45 million compared to $633 million for the third quarter of 2021, driven by strong operating results.
Due to the meaningful reduction in net debt, Ryerson's leverage ratio improved quarter-over-quarter to 0.7 times from 1 time. A record low since our IPO in 2014. The company's available global liquidity increased to $741 million as of December 31, 2021, from $698 million as of September 30, 2021. Ryerson maintained expense leverage in the fourth quarter of 2021 as warehousing, delivery, selling, general, and administrative expenses as a percent of sales remained low at 11.8% compared to 11.4% in the third quarter of 2021. Despite inflationary pressures on labor, fuel, and operating supplies, warehousing, delivery, selling, and administrative expenses increased less than $1 million quarter-over-quarter, or 0.4%.
On February 17, Ryerson's board of directors declared a quarterly cash dividend of $0.10 per share of common stock payable on March 17 to stockholders of record as of March 3, 2022, a sequential increase of 18%. During the fourth quarter, Ryerson returned approximately $4 million to shareholders in the form of dividends and share buybacks. Cumulatively, Ryerson repurchased $1.8 million in shares during 2021 in accordance with its share repurchase program, which authorizes up to an aggregate $50 million of repurchases through August 4, 2023. Now I'll turn the call over to Molly to provide further detail on our fourth quarter financial results.
Thank you, Jim, and good morning. Ryerson generated revenue of $1.53 billion in the fourth quarter of 2021 within the range communicated in our third quarter earnings release, with average selling prices up 6.6% and volume down 8.7% compared to the third quarter of 2021. Gross margin contracted by 180 basis points to 21.3% after hitting a record 23.1% in the third quarter of 2021 as rising cost of goods sold outpaced average selling prices. Included in gross margin is LIFO expense of $76 million, a decline of $27 million versus the third quarter's LIFO expense of $102 million.
Excluding the LIFO impact, fourth quarter gross margin contracted by 330 basis points from the third quarter of 2021 to 26.3%. Net income attributable to Ryerson Holding Corporation for the fourth quarter was $106 million or $2.71 per diluted share, compared to net income of $50 million or $1.27 per diluted share for the third quarter. Fourth quarter non-recurring items consisted of a $2 million gain on sale of assets and the related tax expense of $0.5 million. Excluding the gain on sale and the associated income taxes, adjusted net income attributable to Ryerson Holding Corporation was $105 million for the fourth quarter of 2021, or $2.68 per diluted share.
This compares to third quarter of 2021 adjusted net income of $127 million or $3.25 per diluted share. Closing the year on a strong note, Ryerson achieved its best fourth quarter adjusted EBITDA excluding LIFO of $239 million, which compares to the company's adjusted EBITDA excluding LIFO of $301 million achieved in the third quarter of 2021. For full year 2021, Ryerson generated a record adjusted EBITDA excluding LIFO of $861 million compared to $120 million in 2020. With this, I'll turn the call back to Eddie.
Thank you, Molly. 2022 will mark Ryerson's 180th year anniversary, and it is affirming that we ended 2021 on such a strong note ahead of our 18th decade operating under the Ryerson name. It comes down to four experiences interwoven as one that can help Ryerson withstand adversity and enable value-generating possibilities for another 180 years. The four experiences are the customer experience, the employee experience, the shareholder experience, and the supplier experience. Reinvent and demonstrate mastery of those four experiences, and we'll have a Ryerson of high value, strong values, and ongoing durability. Creating great customer experiences with passion and purpose and enabling an improved quality of life for our employees, customers, suppliers, and society at large is our mission.
We continue our work for a more just and inclusive society while enthusiastically advocating for the investments required in the many types of infrastructure that drive and sustain broad-based prosperity. That is why metal matters, as you'll see when visiting us at ryerson.com and why the Build Now movement at msci.org are so vital and imperative. Let's keep moving forward and advancing together. With that, let's take your questions. Operator.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal. We'll go first to Phil Gibbs at KeyBanc Capital Markets. Your line is open. Please go ahead.
Hey, good morning, and congrats on all the strategic progress, Eddie and team.
Phil, good morning. Appreciate the good words. Thank you.
Sure. Thinking about your CapEx spending this year, it's obviously bigger than it's ever been, which I think is actually a good thing as you're looking to sort of reposition and grow the portfolio, make it more defensible. What's your new maintenance CapEx baseline? And then maybe discuss these two new investments that you're making, and maybe return or timing expectations on those investments.
Sure. I'll start, Phil, and then I'll hand it over to John Orth. What I would say is when you look at the stack and you look at maintenance CapEx being between, I'd say, $25 million-$30 million steady state given this amount of square footage in our current footprint, on top of that would be a growth component of CapEx that gets us to our rate of annual depreciation. We're at least replacing that capital stock at that rate of GAAP depreciation as a benchmark.
Then above that, we have reinvestments in state-of-the-art facilities in Centralia, Washington, University Park, Illinois, that really fit with our theme of monetizing and beneficiating assets, really managing our portfolio smartly and then reinvesting in new and modern facilities that we believe is gonna create that better customer experience, but also create a better employee experience as we referenced in our comments. I mean, even if you look at benchmarks, if you look at another company, for example, that's very prominent in our industry, if you kind of look at ratios in terms of CapEx spend, and we're always mindful of what we can afford.
If you look at benchmarks for CapEx spend, take it on a ratio basis, even at a $100 million, given the improvements that we've made financially, throughout our financial statements, the amount seems reasonable and is very well aligned with our strategy and what we hope to accomplish going forward. I'll have John go ahead and append to that.
Good morning, Phil, and thank you, Eddie. Correct. From a CapEx perspective, with maintenance CapEx targeting about $30 million this year, we have developed a lot of digital tools to where we can now see the performance of our assets in real time. We are making these decisions on where to invest and how to invest based on asset utilization, along with a view across our entire network of how we optimize the network to better service our customers and to leverage our assets and inventories.
Yeah. I think. Oh, John, I'm sorry. Go ahead, please.
From a growth perspective, targeting $25 million-$30 million, we are targeting value-added assets where we can partner with our customers to provide better value to them and once again leverage our overall capabilities. Then, as Eddie mentioned, with an investment of $40 million-$45 million in new modernized service centers, we're bringing in higher levels of automation to improve the operator experience to better service the customers. I think it's really important to note that we are now able to build these state-of-the-art service centers at a cost that is below the fair market value of our industrial manufacturing real estate. As Eddie mentioned, we see opportunities to monetize, modernize, and optimize our overall operating assets.
Yeah. Phil, if you look at that beneficiation of existing owned real estate properties and then reinvesting that in state-of-the-art modern service center facilities, we expect to bring up Centralia more, I guess to finish the answer to the question. We expect to bring up Centralia in the second half of 2022 and be fully operational with all shakeouts and commissioning being done by early 2023. We'd expect University Park to follow about, you know, 12 months from that point, so early 2024. Okay?
Thanks so much. I know you guys are big into commercial transport, and it's not as like for like to auto, but it's close. I know given some of the semiconductor issues, and maybe a little bit of pent-up demand, and then the orders going into the last couple of years have been strong. The industry's ability, customer's ability, the OEs, excuse me, to get those Class 8s to market has been limited. I mean, what are they telling you now? What are you seeing in that market? Because I know it's an important one for you.
Yeah. I'm gonna have Mike go ahead and answer the bulk of that question, but I would just preface it by saying we're all working through these upsets and eruptions together. I think they've been well documented, well chronicled. It's really a wide array of things that are missing on any given day, whether it's labor, whether it's key inputs, whether it's in the transportation part of the equation. We expect those things to mend themselves over time as we move through 2022. Still a challenge, a significant number of gaps, and as we mentioned, those frictions that are still prominent in getting those bill of materials assembled so that our customers can finish their builds. Mike?
Yeah. Thanks, Eddie. Phil, thanks for the question. You know, Eddie touched on it in your comment hit some key points. There's no shortage of friction points, the chip issues, the labor issues, the parts issues. We see those all getting better, but we're still have some room to improve in those areas. I would say the outlook has been positive for 2022. The industry is forecasting close to 13% uptick in production for the year.
As we listen to the various customers that are involved in that supply chain, there's a pretty common theme among the key players that they're bullish about what's in store. You know, we're well-positioned to support them on a go-forward basis. You know, we watch this very closely. We've got great relationships. We track our inventory. We track you know, their future demand forecast signals. You know, we're optimistic that those forecasts do indeed happen.
Thanks. My last question, just housekeeping. What should the expectations be for one quarter one net working capital in terms of use or source? When should we think operating expense inflation, labor, energy, all that stuff, in terms of line of sight, in your opinion, starts to level out? Thanks.
Yeah. Boy, Phil, I'll tell you, I really wish I had a clear crystal ball just given everything that's going on in the world. I'll have Jim add some more heft to the answer. In terms of inflation, let's start with that. I mean, it's tracing a curve. The inflationary impacts are still winding their way through the value chain from beginning to end. We expect that inflation will continue. I believe it'll start to moderate when supply chains start becoming more wholesome and in better repair overall. I mean, I think we understand where the inflationary pressures have come from, given the pandemic knock-on effects.
When supply chains and lead times really start to come back in towards, I'd say, more normalized historical ranges. I would even say in the metals industry, I would say that, especially in the second half of last year, in the industrial metals landscape, I think a lot of those supply chain pressures really started to relieve themselves to a significant extent. I mean, there's still some there, but I think it's other places in the overall bill of materials where there's still gaps, and there's still frictions. I would expect that those things would begin to repair as we move through 2022. By the time we get to 2023, I would think that we would see some plateauing in those inflationary impacts.
Are we gonna see a reversion to the mean? That plateau and that leveling off is gonna take some time, but I think over time, we'll see inflation plateau as we move through really the fourth quarter and into 2023. That's our base case, and we might even get some reversion to a higher mean. Jim?
Thanks, Eddie. Good morning, Phil. I don't have a lot of heft to add to the inflation answer there. You know, as we think about working capital going through the quarter and forward, you know, really big working capital build last year on commodity pricing. We have certainly seen HRC pricing recede. However, the bright metals is still holding fairly strong. I think you're gonna get a little bit of a mixed bag here in the next couple of months as we head through early 2022 with on the pricing side. Then our volumes will, you know, become appropriate on the inventory side as we see demand signals and volumes.
You know, certainly expect to generate cash from operating activities in the quarter. You know, the working capital is a little bit of a plus/minus right now based on where non-ferrous pricing comes in versus our carbon pricing in the next, you know, 45, 60 days.
Thank you so much, guys.
I mean, I would say, look, if we put a hard marker down around this, and you look at how we guided for the quarter, we could certainly tune up inventory a little bit. We think based on the guidance that we gave, it feels like Q1 is a positive cash flow quarter.
Thank you.
Once again.
Thanks, Phil.
We'll move next to Alan Weber at Robotti & Company Advisors. Your line is open. Please go ahead.
Oh, good morning. Can you talk about acquisitions and how you think about valuing acquisitions given, you know, kind of where results are for your company and kind of anybody you're looking at?
Hi, Alan. Good morning. I think the most important comment I would make around how we view M&A is maintaining discipline and really looking for things in our funnel that are very on target with our overall strategy. Whether it's trying to fortify aspects of our shape mix or adding value-added components or intellectual property. I mean, every acquisition is different. I think there are things that we're seeing that we're really frankly happy to pass on. There's things that look good to us and sometimes we're successful when we look at how we value it versus other folks that are bidding on those assets or organizations.
In general, it's really keeping a discipline and making sure that whatever we're paying for that acquisition is going to manifest itself in the returns that we expect in that post-close synergy case. I mean, I wanna stay away from really giving hard multiples because everything's really in flux and fluid, but I think if past is prologue, if you look at what we've done since 2014, I think we've conducted that process very well on behalf of Ryerson stakeholders, and we'll continue to employ that same type of mindset and methodology as we go forward.
Thanks. Taking a step back, the acquisitions that you consider or look at, are they anywhere near as cheap as your stock is currently relative to its current EBITDA and like that?
Alan, what I would say is, I think that as we continue to perform and we're performing very well as the numbers indicate, I would expect that those things will take care of themselves, and we just need to keep doing our job and doing our job well. I think any of those perceived dislocations in value, I think those will resolve themselves.
Well, maybe I didn't make it. What I was really asking is, why would you I mean, I can't imagine that you could buy anything that's anywhere near as cheap as your stock currently is on its, you know, kind of on the current numbers. And so why wouldn't you just use that as kind of the hurdle currently and really be more aggressive than in buying back stock?
Yeah. Well, we have a buyback authorization out there for equity. We have a buyback authorization out there for our debt. I think that we also have to be mindful of our priorities, and there's still work for us to do on the debt side. I believe we have a really good balance now, Alan, between how we're looking at continuing to bring down debt, particularly the long-term debt, the high-yield bond part of that part of our capital structure, how we're returning cash to shareholders, I think, in a very responsible but also very attractive way, and then looking to pick our spots in fulfilling that buyback authorization while also investing in our growth.
Because for a number of years, we were frankly paying off the past. I think now we have an opportunity to really look forward and take some really good shots down the field. I think we have the right balance. I think we have the right equation. Where we see opportunities, we are prepared to act on those opportunities.
I guess my last question is. I appreciate your comments and obviously the results. When you look out over the next five years, how do you think about what's kind of, quote-unquote, "normal EBITDA"?
That's a great question. I'm gonna go ahead, and I'm gonna answer that in this way. If you go back and look at our EBITDA that we've generated, I'd say since 2016, so you go back and look at a six-year average, and you look at the things that we're doing strategically to improve our business, and we feel that our industry has good underpinnings, as we stated, I think that's a good guide. When you start to look at a new baseline and a good baseline and you look at targets that we've referenced in prior investor presentations, before 2021, I think you can construct a good baseline as to where our trajectory is and where it might be going.
In terms of trying to forecast EBITDA over the next five years, I would say past is prologue. Our highs are higher when you compare them to 2007, 2008. When you look at 2011 and 2018 and 2021, what I would say about Ryerson, our highs are higher, our lows are higher, so we are managing the peaks better, we're managing the troughs better, and we're managing the in-between better. I think that argues well for the next five years.
Okay. Great. Thanks a lot. Thank you.
Thanks, Alan.
We'll move next to Matthew Fields with Bank of America. Your line is open. Please go ahead.
Hey, everyone. Eddie, congrats on your promotion to the board. Well deserved.
Matthew, thanks. I appreciate that.
I know there's been a lot of questions about capital allocation, and I'm gonna try to beat that dead horse a little bit more, if you don't mind. Just a quick housekeeping item. When is the earliest you can use the next $50 million at 103 redemption on those 8.5 bonds? Is it July or August of this year?
Yeah, I'm gonna have Molly and Jim correct me if I'm wrong, but I believe it's August first. Okay, great.
Yeah, that's.
Molly?
Yeah. It's towards the end of July. Between the end of July and August first. That's right.
Okay, great. Thank you very much. Then, you know, I think you know, dovetailing with the earlier question about kinda what's normal EBITDA, I think the six-year average, if I'm just doing it right now from 2016, is a little over $300 million in EBITDA. If you think that's kind of the-
Yeah.
Sorry. Go ahead.
Yeah, I mean, it's certainly when you look at it, as I've said before, I think what we demonstrated, Matt, over the last six years, and the reason I bring those years, you know, into focus and into reference, is because I do think it indicates. It does indicate if you look for data points and you say, "Okay, well what can Ryerson accomplish? How can they manage the toughest of times? How can they manage through good industry conditions, regardless of the reasons for those industry conditions?
How can they manage that, those two markers, and then the points in between?" If you take that average EBITDA, $306 million or $307 million a year, that's a good strong baseline moving forward with a much better capital structure, lower fixed cash commitments, and an ability for us now to invest more heartily in the business in a way that's much more, you know, much more comparable to some of our peers. That's a really good story for us and our stakeholders.
My question is if 306 or 307, you know, let's call it 300, is the right sort of through the cycle long-term planning EBITDA, what's the right amount of debt on the business? Is it 2x that? Is it 3x that? Is it 1.5? You know, what do you think is the right number of debt to manage through the tough times that eventually sort of come and go in the business?
Yeah. You've heard from Jim and Molly and from me in the past that we think that a good level peak to trough is anywhere from half a turn to two turns to give ourselves maximum flexibility to realize opportunities, but still really maintain a very strong balance sheet. I think we still recognize we have room to improve our overall credit profile. I think our credit ratings have room to move up. I feel that there's really, you know, as we go forward, the question is why would we go ahead and incur debt in terms of permanent capital? Why would we do that? Well, we might do that in the future once we get to that reset point, Matt, and I think it's really important that we finish the work.
It's really, really important we finish the work. Finishing that work means we get to that reset point where we've paid off the high yield debt. Then I think we have a world of opportunities to look at in terms of how we size our debt loads relative to our capital structure, our EBITDA generating capability, and then looking for attractive growth opportunities once we get to that reset point. I think we have to finish our work, and I think that's important for all of our stakeholders, particularly our shareholders. I think it's really important we finish that work.
Okay. I mean, I'm just trying to get a rough idea of how much kind of deleveraging we can expect in 2022 in terms of absolute levels of debt paid down. I mean, you're at $650 now. It seems like $600 would get you to that sort of max of two turns, you know, through the cycle. But sort of, you know, now that there's other kind of free cash flow priorities, you know, shareholder returns and little bit of an increased CapEx and M&A, like, just wanna know, like, kind of now that debt reduction is not the only thing on your plate, you know, kind of what we can expect for 2022 and beyond on that front. Obviously, it sounds like the $50 million call in the summer is a priority, but you know, how much other than that are we, you know, kinda looking at?
Yeah. Look, to use a metaphor, it's about getting the not just the calories right, but the composition of those calories. As I said, when I was answering Alan.
You've said you've been on a diet before.
Yeah, no comment, Matt. What I would say is I think our equation is good, and I think our glide path is a good one as we've communicated. We have a good balance now. I think we have a good cadence in terms of how we're looking at our dividend to shareholders, how we're looking at buybacks, how we're looking at prospective maybe debt repurchases in addition to special redemption options that we have coming up on our first real call date of August 1, 2023.
I think we've done a really good job with that equation, and I also think we need to make sure that we exercise the discipline that I talked about. That we you know that our eyes don't get bigger than our stomachs, right? To follow through on this metaphor. We wanna be really smart in terms of how we approach this going forward. We're always open-minded for opportunities that we see or that we can create for ourselves. I think when we look to capitalize upon and then capitalize those opportunities, we'll know what to do within our capital structure when that happens. In the meantime, I think it's important to get to that reset point and continue to pay down these bonds.
Okay, great. Well, that's, I guess that's as helpful as we can get. You know, congratulations on a great year, and good luck in 2022.
Thanks, Matt. Much appreciated. Thank you.
Our final reminder to star one if you had a question. We'll go next to Phil Gibbs at KeyBanc Capital Markets. Your line is open. Please go ahead.
Thanks. Just a follow-up from me, and I promise I won't strong arm you into committing to a normalized EBITDA number. I will take the over on you guys taking out some debt this year. I think that was clear. Do you have any NOLs left?
Jim and Molly?
Yeah. Hi, Phil. Really, effectively, no. There's some straggling, you know, credits at some state and municipality levels, but really those were used in 2021 and yeah, effectively no.
Your cash and effective tax rate is about the same, but mid- to high twenties or something?
Our expected effective tax rate for this year is 26%.
Okay. Thank you. Appreciate it.
Bye.
Thanks. Thanks, Phil.
With no other questions holding, Eddie, I'll turn the conference back to you for any additional or closing comments.
I appreciate it. Look, thank you everybody for joining us today. We appreciate your support of and interest in Ryerson. Please stay safe and well, and we look forward to being with all of you again in May.
Ladies and gentlemen, that will conclude today's conference. We thank you for your participation. You may disconnect at this time, and have a great day.