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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cleveland Cliffs Inc | NYSE:CLF | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.225 | 1.30% | 17.505 | 17.56 | 17.305 | 17.44 | 3,046,858 | 18:35:26 |
Ohio
|
|
34-1464672
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
200 Public Square, Cleveland, Ohio
|
|
44114-2315
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
Abbreviation or acronym
|
|
Term
|
A&R 2015 Equity Plan
|
|
Amended and Restated Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan
|
ABL Facility
|
|
Amended and Restated Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, as the Lenders, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, and Amended and Restated as of February 28, 2018
|
Adjusted EBITDA
|
|
EBITDA excluding certain items such as impacts of discontinued operations, foreign currency exchange remeasurement, extinguishment of debt, impairment of long-lived assets and intersegment corporate allocations of SG&A costs
|
ArcelorMittal
|
|
ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco, as well as many other subsidiaries)
|
ALJ
|
|
Administrative Law Judge
|
AMT
|
|
Alternative Minimum Tax
|
ASC
|
|
Accounting Standards Codification
|
ASU
|
|
Accounting Standards Update
|
Bloom Lake Group
|
|
Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC
|
Canadian Entities
|
|
Bloom Lake Group, Wabush Group and certain other wholly-owned Canadian subsidiaries
|
CCAA
|
|
Companies' Creditors Arrangement Act (Canada)
|
Compensation Committee
|
|
Compensation and Organization Committee of the Board of Directors
|
Dodd-Frank Act
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
DR-grade
|
|
Direct Reduction-grade
|
EBITDA
|
|
Earnings before interest, taxes, depreciation and amortization
|
Empire
|
|
Empire Iron Mining Partnership
|
Exchange Act
|
|
Securities Exchange Act of 1934, as amended
|
FASB
|
|
Financial Accounting Standards Board
|
Fe
|
|
Iron
|
FERC
|
|
Federal Energy Regulatory Commission
|
FMSH Act
|
|
U.S. Federal Mine Safety and Health Act 1977, as amended
|
GAAP
|
|
Accounting principles generally accepted in the United States
|
HBI
|
|
Hot briquetted iron
|
Hibbing
|
|
Hibbing Taconite Company, an unincorporated joint venture
|
Koolyanobbing
|
|
Collective term for the operating deposits at Koolyanobbing, Mount Jackson and Windarling
|
Long ton
|
|
2,240 pounds
|
LTVSMC
|
|
LTV Steel Mining Company
|
Metric ton
|
|
2,205 pounds
|
MISO
|
|
Midcontinent Independent System Operator, Inc.
|
MMBtu
|
|
Million British Thermal Units
|
MSHA
|
|
U.S. Mine Safety and Health Administration
|
Monitor
|
|
FTI Consulting Canada Inc.
|
Net ton
|
|
2,000 pounds
|
Northshore
|
|
Northshore Mining Company
|
OPEB
|
|
Other postretirement employment benefits
|
Platts 62% Price
|
|
Platts IODEX 62% Fe Fines Spot Price
|
SEC
|
|
U.S. Securities and Exchange Commission
|
SG&A
|
|
Selling, general and administrative
|
Securities Act
|
|
Securities Act of 1933, as amended
|
Senior Notes Due 2020
|
|
5.90% senior notes due March 2020 and 4.80% senior notes due October 2020
|
SSR
|
|
System support resource
|
Tilden
|
|
Tilden Mining Company L.C.
|
Topic 606
|
|
ASC Topic 606, Revenue from Contracts with Customers
|
Topic 815
|
|
ASC Topic 815, Derivatives and Hedging
|
TSR
|
|
Total shareholder return
|
United Taconite
|
|
United Taconite LLC
|
U.S.
|
|
United States of America
|
U.S. Steel
|
|
U.S Steel Corporation and all subsidiaries
|
USW
|
|
United Steelworkers
|
Wabush Group
|
|
Wabush Iron Co. Limited and Wabush Resources Inc., and certain of its affiliates, including Wabush Mines (an unincorporated joint venture of Wabush Iron Co. Limited and Wabush Resources Inc.), Arnaud Railway Company and Wabush Lake Railway Company
|
Item 1.
|
Financial Statements
|
|
(In Millions)
|
||||||
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
897.1
|
|
|
$
|
978.3
|
|
Accounts receivable, net
|
141.4
|
|
|
106.7
|
|
||
Inventories
|
187.9
|
|
|
138.4
|
|
||
Supplies and other inventories
|
88.2
|
|
|
88.8
|
|
||
Derivative assets
|
190.8
|
|
|
37.9
|
|
||
Income tax receivable
|
110.3
|
|
|
13.3
|
|
||
Current assets of discontinued operations
|
16.1
|
|
|
118.5
|
|
||
Loans to and accounts receivable from the Canadian Entities
|
—
|
|
|
51.6
|
|
||
Other current assets
|
18.8
|
|
|
11.1
|
|
||
TOTAL CURRENT ASSETS
|
1,650.6
|
|
|
1,544.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
1,144.8
|
|
|
1,033.8
|
|
||
OTHER ASSETS
|
|
|
|
||||
Deposits for property, plant and equipment
|
94.6
|
|
|
17.8
|
|
||
Income tax receivable
|
113.6
|
|
|
235.3
|
|
||
Non-current assets of discontinued operations
|
—
|
|
|
20.3
|
|
||
Other non-current assets
|
121.4
|
|
|
101.6
|
|
||
TOTAL OTHER ASSETS
|
329.6
|
|
|
375.0
|
|
||
TOTAL ASSETS
|
$
|
3,125.0
|
|
|
$
|
2,953.4
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
684.7
|
|
|
$
|
530.7
|
|
|
$
|
1,525.9
|
|
|
$
|
1,195.0
|
|
Freight and venture partners' cost reimbursements
|
57.1
|
|
|
66.0
|
|
|
110.2
|
|
|
159.2
|
|
||||
|
741.8
|
|
|
596.7
|
|
|
1,636.1
|
|
|
1,354.2
|
|
||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
(480.2
|
)
|
|
(438.9
|
)
|
|
(1,028.5
|
)
|
|
(1,002.7
|
)
|
||||
SALES MARGIN
|
261.6
|
|
|
157.8
|
|
|
607.6
|
|
|
351.5
|
|
||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
(30.1
|
)
|
|
(23.8
|
)
|
|
(81.4
|
)
|
|
(75.5
|
)
|
||||
Miscellaneous – net
|
(6.0
|
)
|
|
(5.3
|
)
|
|
(16.2
|
)
|
|
1.3
|
|
||||
|
(36.1
|
)
|
|
(29.1
|
)
|
|
(97.6
|
)
|
|
(74.2
|
)
|
||||
OPERATING INCOME
|
225.5
|
|
|
128.7
|
|
|
510.0
|
|
|
277.3
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(29.5
|
)
|
|
(27.6
|
)
|
|
(93.1
|
)
|
|
(99.1
|
)
|
||||
Gain (loss) on extinguishment of debt
|
—
|
|
|
(88.6
|
)
|
|
0.2
|
|
|
(165.4
|
)
|
||||
Other non-operating income
|
4.3
|
|
|
2.6
|
|
|
13.1
|
|
|
7.6
|
|
||||
|
(25.2
|
)
|
|
(113.6
|
)
|
|
(79.8
|
)
|
|
(256.9
|
)
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
200.3
|
|
|
15.1
|
|
|
430.2
|
|
|
20.4
|
|
||||
INCOME TAX BENEFIT (EXPENSE)
|
(0.5
|
)
|
|
7.2
|
|
|
(14.4
|
)
|
|
7.2
|
|
||||
INCOME FROM CONTINUING OPERATIONS
|
199.8
|
|
|
22.3
|
|
|
415.8
|
|
|
27.6
|
|
||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
|
238.0
|
|
|
30.6
|
|
|
102.8
|
|
|
25.6
|
|
||||
NET INCOME
|
437.8
|
|
|
52.9
|
|
|
518.6
|
|
|
53.2
|
|
||||
LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
0.5
|
|
|
—
|
|
|
3.9
|
|
||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
437.8
|
|
|
$
|
53.4
|
|
|
$
|
518.6
|
|
|
$
|
57.1
|
|
INCOME PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS – BASIC
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.67
|
|
|
$
|
0.08
|
|
|
$
|
1.40
|
|
|
$
|
0.11
|
|
Discontinued operations
|
0.80
|
|
|
0.10
|
|
|
0.35
|
|
|
0.09
|
|
||||
|
$
|
1.47
|
|
|
$
|
0.18
|
|
|
$
|
1.75
|
|
|
$
|
0.20
|
|
INCOME PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS – DILUTED
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.64
|
|
|
$
|
0.08
|
|
|
$
|
1.37
|
|
|
$
|
0.11
|
|
Discontinued operations
|
0.77
|
|
|
0.10
|
|
|
0.34
|
|
|
0.08
|
|
||||
|
$
|
1.41
|
|
|
$
|
0.18
|
|
|
$
|
1.71
|
|
|
$
|
0.19
|
|
AVERAGE NUMBER OF SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Basic
|
297,878
|
|
|
296,079
|
|
|
297,587
|
|
|
285,771
|
|
||||
Diluted
|
310,203
|
|
|
301,075
|
|
|
303,518
|
|
|
290,512
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
437.8
|
|
|
$
|
53.4
|
|
|
$
|
518.6
|
|
|
$
|
57.1
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Changes in pension and other post-retirement benefits, net of tax
|
6.8
|
|
|
7.5
|
|
|
20.2
|
|
|
18.9
|
|
||||
Changes in foreign currency translation
|
(228.3
|
)
|
|
0.5
|
|
|
(225.4
|
)
|
|
(13.6
|
)
|
||||
Changes in derivative financial instruments, net of tax
|
0.3
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
(221.2
|
)
|
|
8.0
|
|
|
(204.4
|
)
|
|
5.3
|
|
||||
OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
216.6
|
|
|
$
|
55.7
|
|
|
$
|
314.2
|
|
|
$
|
61.3
|
|
|
(In Millions)
|
||||||
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
518.6
|
|
|
$
|
53.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
68.6
|
|
|
66.3
|
|
||
Loss (gain) on extinguishment of debt
|
(0.2
|
)
|
|
165.4
|
|
||
Loss on deconsolidation
|
—
|
|
|
16.3
|
|
||
Gain on derivatives
|
(136.4
|
)
|
|
(47.5
|
)
|
||
Gain on foreign currency translation
|
(228.1
|
)
|
|
—
|
|
||
Other
|
5.7
|
|
|
19.0
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables and other assets
|
96.2
|
|
|
68.9
|
|
||
Inventories
|
(57.1
|
)
|
|
(26.1
|
)
|
||
Payables, accrued expenses and other liabilities
|
(78.6
|
)
|
|
(108.8
|
)
|
||
Net cash provided by operating activities
|
188.7
|
|
|
206.7
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of property, plant and equipment
|
(111.4
|
)
|
|
(62.7
|
)
|
||
Deposits for property, plant and equipment
|
(83.3
|
)
|
|
(16.2
|
)
|
||
Proceeds on sales of assets
|
18.5
|
|
|
2.2
|
|
||
Other investing activities
|
2.5
|
|
|
(7.7
|
)
|
||
Net cash used by investing activities
|
(173.7
|
)
|
|
(84.4
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net proceeds from issuance of common shares
|
—
|
|
|
661.3
|
|
||
Proceeds from issuance of debt
|
—
|
|
|
1,057.8
|
|
||
Debt issuance costs
|
(1.5
|
)
|
|
(12.0
|
)
|
||
Repurchase of debt
|
(16.3
|
)
|
|
(1,720.7
|
)
|
||
Acquisition of noncontrolling interest
|
—
|
|
|
(105.0
|
)
|
||
Distributions of partnership equity
|
(44.2
|
)
|
|
(53.0
|
)
|
||
Other financing activities
|
(45.7
|
)
|
|
(17.0
|
)
|
||
Net cash used by financing activities
|
(107.7
|
)
|
|
(188.6
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(2.3
|
)
|
|
3.7
|
|
||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(95.0
|
)
|
|
(62.6
|
)
|
||
LESS: INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(13.8
|
)
|
|
23.1
|
|
||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(81.2
|
)
|
|
(85.7
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
978.3
|
|
|
312.8
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
897.1
|
|
|
$
|
227.1
|
|
|
Deferred Revenue (Current)
1
|
|
Deferred Revenue (Long-Term)
|
||||
Opening balance as of January 1, 2018
|
$
|
23.8
|
|
|
$
|
51.4
|
|
Closing balance as of September 30, 2018
|
16.1
|
|
|
42.8
|
|
||
Decrease
|
$
|
(7.7
|
)
|
|
$
|
(8.6
|
)
|
|
|
|
|
||||
1
The opening balance includes a $1.4 million adjustment from the December 31, 2017 balance due to the adoption of Topic 606.
|
|
|
(In Millions)
|
||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Finished Goods
|
|
$
|
171.8
|
|
|
$
|
127.1
|
|
Work-in-Process
|
|
16.1
|
|
|
11.3
|
|
||
Total Inventories
|
|
$
|
187.9
|
|
|
$
|
138.4
|
|
|
(In Millions)
|
||||||
|
September 30,
2018 |
|
December 31,
2017 |
||||
Land rights and mineral rights
|
$
|
549.6
|
|
|
$
|
549.6
|
|
Office and information technology
|
67.8
|
|
|
65.8
|
|
||
Buildings
|
84.1
|
|
|
85.2
|
|
||
Mining equipment
|
538.7
|
|
|
533.9
|
|
||
Processing equipment
|
619.0
|
|
|
610.9
|
|
||
Electric power facilities
|
58.7
|
|
|
56.9
|
|
||
Land improvements
|
24.2
|
|
|
23.7
|
|
||
Asset retirement obligation
|
16.9
|
|
|
16.9
|
|
||
Other
|
25.2
|
|
|
25.2
|
|
||
Construction in-progress
|
168.7
|
|
|
32.6
|
|
||
|
2,152.9
|
|
|
2,000.7
|
|
||
Allowance for depreciation and depletion
|
(1,008.1
|
)
|
|
(966.9
|
)
|
||
|
$
|
1,144.8
|
|
|
$
|
1,033.8
|
|
(In Millions)
|
||||||||||||||||||
September 30, 2018
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Secured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 4.875% 2024 Senior Notes
|
|
5.00%
|
|
$
|
400.0
|
|
|
$
|
(6.0
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
391.7
|
|
Unsecured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 5.90% 2020 Senior Notes
|
|
5.98%
|
|
88.4
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
88.2
|
|
||||
$500 Million 4.80% 2020 Senior Notes
|
|
4.83%
|
|
122.3
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
122.0
|
|
||||
$700 Million 4.875% 2021 Senior Notes
|
|
4.89%
|
|
124.2
|
|
|
(0.3
|
)
|
|
—
|
|
|
123.9
|
|
||||
$316.25 Million 1.50% 2025 Convertible Senior Notes
|
|
6.26%
|
|
316.3
|
|
|
(5.8
|
)
|
|
(78.1
|
)
|
|
232.4
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
6.01%
|
|
1,073.3
|
|
|
(10.3
|
)
|
|
(15.1
|
)
|
|
1,047.9
|
|
||||
$800 Million 6.25% 2040 Senior Notes
|
|
6.34%
|
|
298.4
|
|
|
(2.3
|
)
|
|
(3.3
|
)
|
|
292.8
|
|
||||
ABL Facility
|
|
N/A
|
|
450.0
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
||||
Fair Value Adjustment to Interest Rate Hedge
|
|
|
|
|
|
|
|
|
|
1.1
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,300.0
|
|
(In Millions)
|
||||||||||||||||||
December 31, 2017
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Secured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 4.875% 2024 Senior Notes
|
|
5.00%
|
|
$
|
400.0
|
|
|
$
|
(7.1
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
390.3
|
|
Unsecured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 5.90% 2020 Senior Notes
|
|
5.98%
|
|
88.9
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
88.6
|
|
||||
$500 Million 4.80% 2020 Senior Notes
|
|
4.83%
|
|
122.4
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
122.0
|
|
||||
$700 Million 4.875% 2021 Senior Notes
|
|
4.89%
|
|
138.4
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
138.0
|
|
||||
$316.25 Million 1.50% 2025 Convertible Senior Notes
|
|
6.26%
|
|
316.3
|
|
|
(6.6
|
)
|
|
(85.6
|
)
|
|
224.1
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
6.01%
|
|
1,075.0
|
|
|
(11.3
|
)
|
|
(16.5
|
)
|
|
1,047.2
|
|
||||
$800 Million 6.25% 2040 Senior Notes
|
|
6.34%
|
|
298.4
|
|
|
(2.4
|
)
|
|
(3.4
|
)
|
|
292.6
|
|
||||
ABL Facility
|
|
N/A
|
|
550.0
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
||||
Fair Value Adjustment to Interest Rate Hedge
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,304.2
|
|
|
|
(In Millions)
|
||
|
|
Maturities of Debt
|
||
2018
|
|
$
|
—
|
|
2019
|
|
—
|
|
|
2020
1
|
|
210.7
|
|
|
2021
|
|
124.2
|
|
|
2022
|
|
—
|
|
|
2023
|
|
—
|
|
|
2024 and thereafter
|
|
2,088.0
|
|
|
Total maturities of debt
|
|
$
|
2,422.9
|
|
|
|
|
||
1
On October 5, 2018, we redeemed the entirety of our outstanding Senior Notes Due 2020. The aggregate principal amount outstanding of the Senior Notes Due 2020 was approximately $211 million. Pursuant to the terms of the indenture governing the Senior Notes Due 2020, approximately $218 million in the aggregate, including make-whole premiums and accrued and unpaid interest to, but excluding, the redemption date, was paid to holders of the Senior Notes Due 2020.
|
|
(In Millions)
|
||||||||||||||
|
September 30, 2018
|
||||||||||||||
Description
|
Quoted Prices in Active
Markets for Identical Assets/Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
0.7
|
|
|
$
|
596.2
|
|
|
$
|
—
|
|
|
$
|
596.9
|
|
Derivative assets
|
—
|
|
|
0.2
|
|
|
190.6
|
|
|
190.8
|
|
||||
Total
|
$
|
0.7
|
|
|
$
|
596.4
|
|
|
$
|
190.6
|
|
|
$
|
787.7
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
5.7
|
|
|
$
|
5.8
|
|
Total
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
5.7
|
|
|
$
|
5.8
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2017
|
||||||||||||||
Description
|
Quoted Prices in Active
Markets for Identical Assets/Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
66.3
|
|
|
$
|
550.6
|
|
|
$
|
—
|
|
|
$
|
616.9
|
|
Derivative assets
|
—
|
|
|
—
|
|
|
37.9
|
|
|
37.9
|
|
||||
Total
|
$
|
66.3
|
|
|
$
|
550.6
|
|
|
$
|
37.9
|
|
|
$
|
654.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
Total
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
|
(In Millions)
|
||||||||||||||
|
Level 3 Liabilities
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Beginning balance
|
$
|
(3.0
|
)
|
|
$
|
(20.3
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
—
|
|
Total losses
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
(3.1
|
)
|
|
(15.3
|
)
|
|
(7.4
|
)
|
|
(35.6
|
)
|
||||
Settlements
|
0.4
|
|
|
30.2
|
|
|
3.4
|
|
|
30.2
|
|
||||
Ending balance - September 30
|
$
|
(5.7
|
)
|
|
$
|
(5.4
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(5.4
|
)
|
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date
|
$
|
(2.7
|
)
|
|
$
|
(10.9
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(6.4
|
)
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
$
|
4.7
|
|
|
$
|
3.4
|
|
|
$
|
14.0
|
|
|
$
|
12.9
|
|
Interest cost
|
7.6
|
|
|
7.9
|
|
|
22.7
|
|
|
22.9
|
|
||||
Expected return on plan assets
|
(15.0
|
)
|
|
(13.8
|
)
|
|
(45.0
|
)
|
|
(40.9
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service costs
|
0.6
|
|
|
0.6
|
|
|
1.7
|
|
|
1.9
|
|
||||
Net actuarial loss
|
5.3
|
|
|
6.1
|
|
|
15.9
|
|
|
16.7
|
|
||||
Net periodic benefit cost
|
$
|
3.2
|
|
|
$
|
4.2
|
|
|
$
|
9.3
|
|
|
$
|
13.5
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
$
|
0.6
|
|
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
1.3
|
|
Interest cost
|
2.1
|
|
|
1.9
|
|
|
6.2
|
|
|
6.2
|
|
||||
Expected return on plan assets
|
(4.6
|
)
|
|
(4.4
|
)
|
|
(13.8
|
)
|
|
(13.3
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service credits
|
(0.7
|
)
|
|
(0.8
|
)
|
|
(2.2
|
)
|
|
(2.3
|
)
|
||||
Net actuarial loss
|
1.3
|
|
|
0.9
|
|
|
3.8
|
|
|
3.4
|
|
||||
Net periodic benefit credit
|
$
|
(1.3
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(4.7
|
)
|
Grant Date
|
|
Grant Date Market Price
|
|
Average Expected Term (Years)
|
|
Expected Volatility
|
|
Risk-Free Interest Rate
|
|
Dividend Yield
|
|
Fair Value
|
|
Fair Value (Percent of Grant Date Market Price)
|
||||
February 21, 2018
|
|
$
|
7.53
|
|
|
2.86
|
|
86.8%
|
|
2.42%
|
|
—%
|
|
$
|
11.93
|
|
|
158.43%
|
|
(In Millions)
|
||||||
|
Capital Leases
|
|
Operating Leases
|
||||
2018 (October 1 - December 31)
|
$
|
1.1
|
|
|
$
|
1.1
|
|
2019
|
3.9
|
|
|
3.5
|
|
||
2020
|
3.7
|
|
|
3.1
|
|
||
2021
|
3.0
|
|
|
2.4
|
|
||
2022
|
6.2
|
|
|
1.8
|
|
||
2023 and thereafter
|
—
|
|
|
7.5
|
|
||
Total minimum lease payments
|
$
|
17.9
|
|
|
$
|
19.4
|
|
Amounts representing interest
|
2.1
|
|
|
|
|||
Present value of net minimum lease payments
1
|
$
|
15.8
|
|
|
|
||
|
|
|
|
||||
1
The total is comprised of $3.4 million and $12.4 million classified as
Other current liabilities
and
Other liabilities
, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position as of September 30, 2018.
|
|
(In Millions)
|
||||||
|
September 30,
2018 |
|
December 31,
2017 |
||||
Environmental
|
$
|
2.7
|
|
|
$
|
2.9
|
|
Mine closure
1
|
174.6
|
|
|
168.4
|
|
||
Total environmental and mine closure obligations
|
177.3
|
|
|
171.3
|
|
||
Less current portion
|
2.9
|
|
|
3.6
|
|
||
Long-term environmental and mine closure obligations
|
$
|
174.4
|
|
|
$
|
167.7
|
|
|
|
|
|
||||
1
Includes our active operating mines, our indefinitely idled Empire mine and a closed mine formerly operating as LTVSMC.
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Classification
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Permits
|
Other non-current assets
|
|
$
|
72.2
|
|
|
$
|
(23.1
|
)
|
|
$
|
49.1
|
|
|
$
|
72.2
|
|
|
$
|
(22.5
|
)
|
|
$
|
49.7
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
Derivative Instrument
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity Contracts
|
|
Derivative assets
|
|
$
|
0.2
|
|
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
0.1
|
|
|
Other current liabilities
|
|
$
|
0.3
|
|
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer supply agreement
|
|
Derivative assets
|
|
$
|
186.0
|
|
|
Derivative assets
|
|
$
|
37.9
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Provisional pricing arrangements
|
|
Derivative assets
|
|
4.6
|
|
|
|
|
—
|
|
|
Other current liabilities
|
|
5.7
|
|
|
Other current liabilities
|
|
1.7
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815
|
|
|
|
$
|
190.6
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
5.7
|
|
|
|
|
$
|
1.7
|
|
Total derivatives
|
|
|
|
$
|
190.8
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
5.8
|
|
|
|
|
$
|
2.0
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Asia Pacific Iron Ore
|
|
North American Coal
|
|
Total
|
|
Asia Pacific Iron Ore
|
|
North American Coal
|
|
Total
|
||||||||||||
Current assets of discontinued operations
|
|
$
|
16.1
|
|
|
$
|
—
|
|
|
$
|
16.1
|
|
|
$
|
118.5
|
|
|
$
|
—
|
|
|
$
|
118.5
|
|
Non-current assets of discontinued operations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
Current liabilities of discontinued operations
|
|
$
|
7.2
|
|
|
$
|
7.0
|
|
|
$
|
14.2
|
|
|
$
|
71.8
|
|
|
$
|
3.2
|
|
|
$
|
75.0
|
|
Non-current liabilities of discontinued operations
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
|
$
|
52.2
|
|
|
$
|
—
|
|
|
$
|
52.2
|
|
|
|
(In Millions)
|
||||||
|
|
Nine Months Ended
September 30, |
||||||
|
|
2018
|
|
2017
|
||||
Net cash provided (used) by operating activities
|
|
|
|
|
||||
Asia Pacific Iron Ore
|
|
$
|
(77.0
|
)
|
|
$
|
78.5
|
|
Canadian Operations
|
|
(14.6
|
)
|
|
—
|
|
||
|
|
$
|
(91.6
|
)
|
|
$
|
78.5
|
|
|
|
|
|
|
||||
Net cash provided (used) by investing activities
|
|
|
|
|
||||
Asia Pacific Iron Ore
|
|
$
|
17.8
|
|
|
$
|
(1.5
|
)
|
|
|
$
|
17.8
|
|
|
$
|
(1.5
|
)
|
|
|
(In Millions)
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
Income (Loss) from Discontinued Operations
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues from product sales and services
|
|
$
|
—
|
|
|
$
|
101.7
|
|
|
$
|
129.1
|
|
|
$
|
375.1
|
|
Cost of goods sold and operating expenses
|
|
(0.5
|
)
|
|
(98.7
|
)
|
|
(230.7
|
)
|
|
(323.9
|
)
|
||||
Sales margin
|
|
(0.5
|
)
|
|
3.0
|
|
|
(101.6
|
)
|
|
51.2
|
|
||||
Other operating income (expense)
|
|
14.8
|
|
|
(3.9
|
)
|
|
(4.0
|
)
|
|
(7.6
|
)
|
||||
Other expense
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|
(2.3
|
)
|
|
(4.0
|
)
|
||||
Income (loss) from discontinued operations before income taxes
|
|
14.2
|
|
|
(2.2
|
)
|
|
(107.9
|
)
|
|
39.6
|
|
||||
Gain on foreign currency translation
|
|
228.1
|
|
|
—
|
|
|
228.1
|
|
|
—
|
|
||||
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Income tax benefit (expense)
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
(0.4
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
|
$
|
242.3
|
|
|
$
|
(1.8
|
)
|
|
$
|
117.6
|
|
|
$
|
39.2
|
|
|
|
(In Millions)
|
||||||
Assets and Liabilities of Discontinued Operations
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
|
$
|
15.6
|
|
|
$
|
29.4
|
|
Accounts receivable, net
|
|
—
|
|
|
33.9
|
|
||
Inventories
|
|
—
|
|
|
45.0
|
|
||
Supplies and other inventories
|
|
—
|
|
|
5.1
|
|
||
Other current assets
|
|
0.5
|
|
|
5.1
|
|
||
Total current assets of discontinued operations
|
|
16.1
|
|
|
118.5
|
|
||
Property, plant and equipment, net
|
|
—
|
|
|
17.2
|
|
||
Other non-current assets
|
|
—
|
|
|
3.1
|
|
||
Total assets of discontinued operations
|
|
$
|
16.1
|
|
|
$
|
138.8
|
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
4.2
|
|
|
$
|
28.2
|
|
Accrued liabilities
|
|
3.0
|
|
|
28.0
|
|
||
Other current liabilities
|
|
—
|
|
|
15.6
|
|
||
Total current liabilities of discontinued operations
|
|
7.2
|
|
|
71.8
|
|
||
Environmental and mine closure obligations
|
|
—
|
|
|
28.8
|
|
||
Other liabilities
|
|
9.3
|
|
|
23.4
|
|
||
Total liabilities of discontinued operations
|
|
$
|
16.5
|
|
|
$
|
124.0
|
|
|
(In Millions)
|
||||||||||
|
Cliffs
Shareholders’ Equity (Deficit) |
|
Noncontrolling
Interest |
|
Total Equity
(Deficit) |
||||||
December 31, 2017
|
$
|
(444.3
|
)
|
|
$
|
0.2
|
|
|
$
|
(444.1
|
)
|
Adoption of accounting standard (REFER TO NOTE 2)
|
34.0
|
|
|
—
|
|
|
34.0
|
|
|||
Comprehensive income (loss)
|
|
|
|
|
|
||||||
Net loss
|
(84.3
|
)
|
|
—
|
|
|
(84.3
|
)
|
|||
Other comprehensive income
|
7.7
|
|
|
—
|
|
|
7.7
|
|
|||
Total comprehensive loss
|
(76.6
|
)
|
|
—
|
|
|
(76.6
|
)
|
|||
Stock and other incentive plans
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||
March 31, 2018
|
$
|
(485.0
|
)
|
|
$
|
0.2
|
|
|
$
|
(484.8
|
)
|
Comprehensive income
|
|
|
|
|
|
||||||
Net income
|
165.1
|
|
|
—
|
|
|
165.1
|
|
|||
Other comprehensive income
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|||
Total comprehensive income
|
174.2
|
|
|
—
|
|
|
174.2
|
|
|||
Stock and other incentive plans
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
June 30, 2018
|
$
|
(306.3
|
)
|
|
$
|
—
|
|
|
$
|
(306.3
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
||||||
Net income
|
437.8
|
|
|
—
|
|
|
437.8
|
|
|||
Other comprehensive loss
|
(221.2
|
)
|
|
—
|
|
|
(221.2
|
)
|
|||
Total comprehensive income
|
216.6
|
|
|
—
|
|
|
216.6
|
|
|||
Stock and other incentive plans
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|||
September 30, 2018
|
$
|
(86.2
|
)
|
|
$
|
—
|
|
|
$
|
(86.2
|
)
|
|
(In Millions)
|
||||||||||
|
Cliffs
Shareholders’ Equity (Deficit) |
|
Noncontrolling
Interest (Deficit) |
|
Total Equity
(Deficit) |
||||||
December 31, 2016
|
$
|
(1,464.3
|
)
|
|
$
|
133.8
|
|
|
$
|
(1,330.5
|
)
|
Comprehensive loss
|
|
|
|
|
|
||||||
Net loss
|
(28.1
|
)
|
|
(1.7
|
)
|
|
(29.8
|
)
|
|||
Other comprehensive loss
|
(3.0
|
)
|
|
(5.0
|
)
|
|
(8.0
|
)
|
|||
Total comprehensive loss
|
(31.1
|
)
|
|
(6.7
|
)
|
|
(37.8
|
)
|
|||
Issuance of common shares
|
661.3
|
|
|
—
|
|
|
661.3
|
|
|||
Stock and other incentive plans
|
4.0
|
|
|
—
|
|
|
4.0
|
|
|||
March 31, 2017
|
$
|
(830.1
|
)
|
|
$
|
127.1
|
|
|
$
|
(703.0
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
||||||
Net income (loss)
|
31.8
|
|
|
(1.7
|
)
|
|
30.1
|
|
|||
Other comprehensive income
|
4.9
|
|
|
0.4
|
|
|
5.3
|
|
|||
Total comprehensive income (loss)
|
36.7
|
|
|
(1.3
|
)
|
|
35.4
|
|
|||
Stock and other incentive plans
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
|||
June 30, 2017
|
$
|
(789.1
|
)
|
|
$
|
122.4
|
|
|
$
|
(666.7
|
)
|
Comprehensive income
|
|
|
|
|
|
||||||
Net income (loss)
|
53.4
|
|
|
(0.5
|
)
|
|
52.9
|
|
|||
Other comprehensive income
|
2.3
|
|
|
5.7
|
|
|
8.0
|
|
|||
Total comprehensive income
|
55.7
|
|
|
5.2
|
|
|
60.9
|
|
|||
Stock and other incentive plans
|
5.2
|
|
|
—
|
|
|
5.2
|
|
|||
Acquisition of noncontrolling interest
|
(89.1
|
)
|
|
(15.9
|
)
|
|
(105.0
|
)
|
|||
Distributions of partnership equity
|
(16.0
|
)
|
|
(116.7
|
)
|
|
(132.7
|
)
|
|||
Contributions by noncontrolling interest
|
—
|
|
|
5.2
|
|
|
5.2
|
|
|||
September 30, 2017
|
$
|
(833.3
|
)
|
|
$
|
0.2
|
|
|
$
|
(833.1
|
)
|
|
(In Millions)
|
||||||||||
|
Changes in Pension and OPEB, net of tax
|
|
Changes in Foreign Currency Translation
|
|
Accumulated Other Comprehensive Loss
|
||||||
December 31, 2016
|
$
|
(260.6
|
)
|
|
$
|
239.3
|
|
|
$
|
(21.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
3.3
|
|
|
(12.7
|
)
|
|
(9.4
|
)
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
6.4
|
|
|
—
|
|
|
6.4
|
|
|||
March 31, 2017
|
$
|
(250.9
|
)
|
|
$
|
226.6
|
|
|
$
|
(24.3
|
)
|
Other comprehensive loss before reclassifications
|
(0.1
|
)
|
|
(1.5
|
)
|
|
(1.6
|
)
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
6.5
|
|
|
—
|
|
|
6.5
|
|
|||
June 30, 2017
|
$
|
(244.5
|
)
|
|
$
|
225.1
|
|
|
$
|
(19.4
|
)
|
Other comprehensive income (loss) before reclassifications
|
(18.7
|
)
|
|
0.5
|
|
|
(18.2
|
)
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
6.8
|
|
|
—
|
|
|
6.8
|
|
|||
September 30, 2017
|
$
|
(256.4
|
)
|
|
$
|
225.6
|
|
|
$
|
(30.8
|
)
|
Mine
|
|
Cleveland-Cliffs Inc.
|
|
ArcelorMittal
|
|
U.S. Steel
|
|||
Hibbing
|
|
23.0
|
%
|
|
62.3
|
%
|
|
14.7
|
%
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income from Continuing Operations
|
$
|
199.8
|
|
|
$
|
22.3
|
|
|
$
|
415.8
|
|
|
$
|
27.6
|
|
Loss from Continuing Operations Attributable to Noncontrolling Interest
|
—
|
|
|
0.5
|
|
|
—
|
|
|
3.9
|
|
||||
Net Income from Continuing Operations Attributable to Cliffs Shareholders
|
$
|
199.8
|
|
|
$
|
22.8
|
|
|
$
|
415.8
|
|
|
$
|
31.5
|
|
Income from Discontinued Operations, net of tax
|
238.0
|
|
|
30.6
|
|
|
102.8
|
|
|
25.6
|
|
||||
Net Income Attributable to Cliffs Shareholders
|
$
|
437.8
|
|
|
$
|
53.4
|
|
|
$
|
518.6
|
|
|
$
|
57.1
|
|
Weighted Average Number of Shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
297.9
|
|
|
296.1
|
|
|
297.6
|
|
|
285.8
|
|
||||
Convertible Senior Notes
|
8.0
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
||||
Employee Stock Plans
|
4.3
|
|
|
5.0
|
|
|
4.0
|
|
|
4.7
|
|
||||
Diluted
|
310.2
|
|
|
301.1
|
|
|
303.5
|
|
|
290.5
|
|
||||
Income per Common Share Attributable to
Cliffs Common Shareholders - Basic: |
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.67
|
|
|
$
|
0.08
|
|
|
$
|
1.40
|
|
|
$
|
0.11
|
|
Discontinued operations
|
0.80
|
|
|
0.10
|
|
|
0.35
|
|
|
0.09
|
|
||||
|
$
|
1.47
|
|
|
$
|
0.18
|
|
|
$
|
1.75
|
|
|
$
|
0.20
|
|
Income per Common Share Attributable to
Cliffs Common Shareholders - Diluted: |
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.64
|
|
|
$
|
0.08
|
|
|
$
|
1.37
|
|
|
$
|
0.11
|
|
Discontinued operations
|
0.77
|
|
|
0.10
|
|
|
0.34
|
|
|
0.08
|
|
||||
|
$
|
1.41
|
|
|
$
|
0.18
|
|
|
$
|
1.71
|
|
|
$
|
0.19
|
|
Unaudited Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of September 30, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
892.5
|
|
|
$
|
1.9
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
897.1
|
|
Accounts receivable, net
|
7.8
|
|
|
137.4
|
|
|
0.1
|
|
|
(3.9
|
)
|
|
141.4
|
|
|||||
Inventories
|
—
|
|
|
187.9
|
|
|
—
|
|
|
—
|
|
|
187.9
|
|
|||||
Supplies and other inventories
|
—
|
|
|
88.2
|
|
|
—
|
|
|
—
|
|
|
88.2
|
|
|||||
Income tax receivable
|
110.1
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
110.3
|
|
|||||
Derivative assets
|
0.2
|
|
|
190.6
|
|
|
—
|
|
|
—
|
|
|
190.8
|
|
|||||
Current assets of discontinued operations
|
—
|
|
|
—
|
|
|
16.1
|
|
|
—
|
|
|
16.1
|
|
|||||
Other current assets
|
7.9
|
|
|
10.3
|
|
|
0.6
|
|
|
—
|
|
|
18.8
|
|
|||||
TOTAL CURRENT ASSETS
|
1,018.5
|
|
|
616.3
|
|
|
19.7
|
|
|
(3.9
|
)
|
|
1,650.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
14.3
|
|
|
1,079.7
|
|
|
50.8
|
|
|
—
|
|
|
1,144.8
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits for property, plant and equipment
|
—
|
|
|
80.0
|
|
|
14.6
|
|
|
—
|
|
|
94.6
|
|
|||||
Income tax receivable
|
109.9
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
113.6
|
|
|||||
Investment in subsidiaries
|
1,325.5
|
|
|
38.3
|
|
|
—
|
|
|
(1,363.8
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
121.3
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current assets
|
8.5
|
|
|
111.2
|
|
|
1.7
|
|
|
—
|
|
|
121.4
|
|
|||||
TOTAL OTHER ASSETS
|
1,443.9
|
|
|
233.2
|
|
|
137.6
|
|
|
(1,485.1
|
)
|
|
329.6
|
|
|||||
TOTAL ASSETS
|
$
|
2,476.7
|
|
|
$
|
1,929.2
|
|
|
$
|
208.1
|
|
|
$
|
(1,489.0
|
)
|
|
$
|
3,125.0
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
4.1
|
|
|
$
|
136.5
|
|
|
$
|
4.1
|
|
|
$
|
(3.9
|
)
|
|
$
|
140.8
|
|
Accrued expenses
|
16.7
|
|
|
78.2
|
|
|
0.2
|
|
|
—
|
|
|
95.1
|
|
|||||
Accrued interest
|
26.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26.2
|
|
|||||
Partnership distribution payable
|
—
|
|
|
43.1
|
|
|
—
|
|
|
—
|
|
|
43.1
|
|
|||||
Current liabilities of discontinued operations
|
4.0
|
|
|
—
|
|
|
10.2
|
|
|
—
|
|
|
14.2
|
|
|||||
Other current liabilities
|
1.8
|
|
|
57.7
|
|
|
1.8
|
|
|
—
|
|
|
61.3
|
|
|||||
TOTAL CURRENT LIABILITIES
|
52.8
|
|
|
315.5
|
|
|
16.3
|
|
|
(3.9
|
)
|
|
380.7
|
|
|||||
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES
|
64.3
|
|
|
415.1
|
|
|
(254.4
|
)
|
|
—
|
|
|
225.0
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
147.6
|
|
|
26.8
|
|
|
—
|
|
|
174.4
|
|
|||||
LONG-TERM DEBT
|
2,300.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,300.0
|
|
|||||
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
9.3
|
|
|
—
|
|
|
9.3
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
121.3
|
|
|
—
|
|
|
—
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
24.4
|
|
|
96.9
|
|
|
0.5
|
|
|
—
|
|
|
121.8
|
|
|||||
TOTAL LIABILITIES
|
2,562.8
|
|
|
975.1
|
|
|
(201.5
|
)
|
|
(125.2
|
)
|
|
3,211.2
|
|
|||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL CLIFFS SHAREHOLDERS' EQUITY (DEFICIT)
|
(86.1
|
)
|
|
954.1
|
|
|
409.6
|
|
|
(1,363.8
|
)
|
|
(86.2
|
)
|
|||||
TOTAL EQUITY (DEFICIT)
|
(86.1
|
)
|
|
954.1
|
|
|
409.6
|
|
|
(1,363.8
|
)
|
|
(86.2
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
2,476.7
|
|
|
$
|
1,929.2
|
|
|
$
|
208.1
|
|
|
$
|
(1,489.0
|
)
|
|
$
|
3,125.0
|
|
Unaudited Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of December 31, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
948.9
|
|
|
$
|
2.1
|
|
|
$
|
27.3
|
|
|
$
|
—
|
|
|
$
|
978.3
|
|
Accounts receivable, net
|
4.5
|
|
|
102.9
|
|
|
—
|
|
|
(0.7
|
)
|
|
106.7
|
|
|||||
Inventories
|
—
|
|
|
138.4
|
|
|
—
|
|
|
—
|
|
|
138.4
|
|
|||||
Supplies and other inventories
|
—
|
|
|
88.8
|
|
|
—
|
|
|
—
|
|
|
88.8
|
|
|||||
Income tax receivable
|
11.4
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
|||||
Derivative assets
|
—
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|||||
Current assets of discontinued operations
|
—
|
|
|
—
|
|
|
118.5
|
|
|
—
|
|
|
118.5
|
|
|||||
Loans to and accounts receivable from the Canadian Entities
|
44.7
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
51.6
|
|
|||||
Other current assets
|
5.0
|
|
|
5.6
|
|
|
0.5
|
|
|
—
|
|
|
11.1
|
|
|||||
TOTAL CURRENT ASSETS
|
1,014.5
|
|
|
384.5
|
|
|
146.3
|
|
|
(0.7
|
)
|
|
1,544.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
17.5
|
|
|
965.5
|
|
|
50.8
|
|
|
—
|
|
|
1,033.8
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits for property, plant and equipment
|
—
|
|
|
8.2
|
|
|
9.6
|
|
|
—
|
|
|
17.8
|
|
|||||
Income tax receivable
|
235.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235.3
|
|
|||||
Non-current assets of discontinued operations
|
—
|
|
|
—
|
|
|
20.3
|
|
|
—
|
|
|
20.3
|
|
|||||
Investment in subsidiaries
|
1,024.3
|
|
|
29.9
|
|
|
—
|
|
|
(1,054.2
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
242.0
|
|
|
(242.0
|
)
|
|
—
|
|
|||||
Other non-current assets
|
7.8
|
|
|
91.8
|
|
|
2.0
|
|
|
—
|
|
|
101.6
|
|
|||||
TOTAL OTHER ASSETS
|
1,267.4
|
|
|
129.9
|
|
|
273.9
|
|
|
(1,296.2
|
)
|
|
375.0
|
|
|||||
TOTAL ASSETS
|
$
|
2,299.4
|
|
|
$
|
1,479.9
|
|
|
$
|
471.0
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
7.1
|
|
|
$
|
92.3
|
|
|
$
|
0.8
|
|
|
$
|
(0.7
|
)
|
|
$
|
99.5
|
|
Accrued expenses
|
19.0
|
|
|
59.9
|
|
|
0.2
|
|
|
—
|
|
|
79.1
|
|
|||||
Accrued interest
|
31.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.4
|
|
|||||
Contingent claims
|
55.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.6
|
|
|||||
Partnership distribution payable
|
—
|
|
|
44.2
|
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|||||
Current liabilities of discontinued operations
|
—
|
|
|
—
|
|
|
75.0
|
|
|
—
|
|
|
75.0
|
|
|||||
Other current liabilities
|
2.1
|
|
|
63.5
|
|
|
1.8
|
|
|
—
|
|
|
67.4
|
|
|||||
TOTAL CURRENT LIABILITIES
|
115.2
|
|
|
259.9
|
|
|
77.8
|
|
|
(0.7
|
)
|
|
452.2
|
|
|||||
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES
|
66.4
|
|
|
430.6
|
|
|
(239.3
|
)
|
|
—
|
|
|
257.7
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
140.6
|
|
|
27.1
|
|
|
—
|
|
|
167.7
|
|
|||||
LONG-TERM DEBT
|
2,304.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,304.2
|
|
|||||
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
52.2
|
|
|
—
|
|
|
52.2
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
242.0
|
|
|
—
|
|
|
—
|
|
|
(242.0
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
15.7
|
|
|
147.2
|
|
|
0.6
|
|
|
—
|
|
|
163.5
|
|
|||||
TOTAL LIABILITIES
|
2,743.5
|
|
|
978.3
|
|
|
(81.6
|
)
|
|
(242.7
|
)
|
|
3,397.5
|
|
|||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL CLIFFS SHAREHOLDERS' EQUITY (DEFICIT)
|
(444.1
|
)
|
|
501.6
|
|
|
552.4
|
|
|
(1,054.2
|
)
|
|
(444.3
|
)
|
|||||
NONCONTROLLING INTEREST
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
TOTAL EQUITY (DEFICIT)
|
(444.1
|
)
|
|
501.6
|
|
|
552.6
|
|
|
(1,054.2
|
)
|
|
(444.1
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
2,299.4
|
|
|
$
|
1,479.9
|
|
|
$
|
471.0
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
Unaudited Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Nine Months Ended September 30, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(100.6
|
)
|
|
$
|
425.6
|
|
|
$
|
(136.3
|
)
|
|
$
|
—
|
|
|
$
|
188.7
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.1
|
)
|
|
(110.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(111.4
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(78.1
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
(83.3
|
)
|
|||||
Intercompany investing
|
185.7
|
|
|
(6.3
|
)
|
|
120.7
|
|
|
(300.1
|
)
|
|
—
|
|
|||||
Proceeds on sale of assets
|
—
|
|
|
0.6
|
|
|
17.9
|
|
|
—
|
|
|
18.5
|
|
|||||
Other investing activities
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||||
Net cash provided (used) by investing activities
|
184.6
|
|
|
(191.5
|
)
|
|
133.3
|
|
|
(300.1
|
)
|
|
(173.7
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|||||
Repurchase of debt
|
(16.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.3
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
|
(44.2
|
)
|
|||||
Intercompany financing
|
(120.7
|
)
|
|
(188.6
|
)
|
|
9.2
|
|
|
300.1
|
|
|
—
|
|
|||||
Other financing activities
|
(1.9
|
)
|
|
(1.5
|
)
|
|
(42.3
|
)
|
|
—
|
|
|
(45.7
|
)
|
|||||
Net cash used by financing activities
|
(140.4
|
)
|
|
(234.3
|
)
|
|
(33.1
|
)
|
|
300.1
|
|
|
(107.7
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(56.4
|
)
|
|
(0.2
|
)
|
|
(38.4
|
)
|
|
—
|
|
|
(95.0
|
)
|
|||||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(56.4
|
)
|
|
(0.2
|
)
|
|
(24.6
|
)
|
|
—
|
|
|
(81.2
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
948.9
|
|
|
2.1
|
|
|
27.3
|
|
|
—
|
|
|
978.3
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
892.5
|
|
|
$
|
1.9
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
897.1
|
|
Unaudited Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Nine Months Ended September 30, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(162.9
|
)
|
|
$
|
293.9
|
|
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
206.7
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.8
|
)
|
|
(59.4
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
(62.7
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(11.3
|
)
|
|
(4.9
|
)
|
|
—
|
|
|
(16.2
|
)
|
|||||
Intercompany investing
|
160.6
|
|
|
(6.5
|
)
|
|
(45.0
|
)
|
|
(109.1
|
)
|
|
—
|
|
|||||
Proceeds on sales of assets
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Other investing activities
|
(7.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.7
|
)
|
|||||
Net cash provided (used) by investing activities
|
151.1
|
|
|
(75.0
|
)
|
|
(51.4
|
)
|
|
(109.1
|
)
|
|
(84.4
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from issuance of common shares
|
661.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
661.3
|
|
|||||
Proceeds from issuance of debt
|
1,057.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,057.8
|
|
|||||
Debt issuance costs
|
(12.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.0
|
)
|
|||||
Repurchase of debt
|
(1,720.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,720.7
|
)
|
|||||
Acquisition of noncontrolling interest
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105.0
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(53.0
|
)
|
|
—
|
|
|
—
|
|
|
(53.0
|
)
|
|||||
Intercompany financing
|
45.0
|
|
|
(162.2
|
)
|
|
8.1
|
|
|
109.1
|
|
|
—
|
|
|||||
Other financing activities
|
(0.6
|
)
|
|
(3.8
|
)
|
|
(12.6
|
)
|
|
—
|
|
|
(17.0
|
)
|
|||||
Net cash used by financing activities
|
(74.2
|
)
|
|
(219.0
|
)
|
|
(4.5
|
)
|
|
109.1
|
|
|
(188.6
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(86.0
|
)
|
|
(0.1
|
)
|
|
23.5
|
|
|
—
|
|
|
(62.6
|
)
|
|||||
LESS: INCREASE IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
23.1
|
|
|
—
|
|
|
23.1
|
|
|||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(86.0
|
)
|
|
(0.1
|
)
|
|
0.4
|
|
|
—
|
|
|
(85.7
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
283.4
|
|
|
2.5
|
|
|
26.9
|
|
|
—
|
|
|
312.8
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
197.4
|
|
|
$
|
2.4
|
|
|
$
|
27.3
|
|
|
$
|
—
|
|
|
$
|
227.1
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2018
|
|
2017
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
105.65
|
|
|
$
|
90.52
|
|
|
$
|
15.13
|
|
|
16.7
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
62.54
|
|
|
60.79
|
|
|
1.75
|
|
|
2.9
|
%
|
|||
Depreciation, depletion & amortization
|
|
2.75
|
|
|
2.81
|
|
|
(0.06
|
)
|
|
(2.1
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
65.29
|
|
|
63.60
|
|
|
1.69
|
|
|
2.7
|
%
|
|||
Sales margin
|
|
$
|
40.36
|
|
|
$
|
26.92
|
|
|
$
|
13.44
|
|
|
49.9
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
6,481
|
|
|
5,863
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
6,200
|
|
|
6,048
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
4,719
|
|
|
4,265
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1
Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues and expenses also exclude venture partner cost reimbursements.
|
|||||||||||||||
2
Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. Refer to "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Tons are long tons.
|
•
|
An increase in the average year-to-date realized product revenue rate of
$15
per long ton or
16.7%
during the three months ended
September 30, 2018
, compared to the same period in the previous year, which resulted in an increase of
$100 million
. This is predominantly due to:
|
◦
|
An increase in the estimated average annual daily market price for hot-rolled coil steel, which positively affected the realized revenue rate for current-year sales by $12 per long ton or $79 million during the third quarter of 2018; and
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $7 per long ton or $45 million.
|
◦
|
These increases were offset partially by:
|
▪
|
Higher index freight rates, a component in most of our contract pricing formulas, which negatively affected the realized revenue rate by $4 per long ton or $24 million; and
|
▪
|
Lower full-year estimated Platts 62% Price as of September 30, 2018, compared to the prior year full-year estimated Platts 62% Price, which negatively affected the realized revenue rate by $2 per long ton or $14 million.
|
•
|
Higher sales volume of
0.6 million
long tons, which resulted in increased revenue of
$54 million
, predominantly due to increased demand from two customers resulting in two additional contracts that started during the current year.
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2018
|
|
2017
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
108.53
|
|
|
$
|
89.91
|
|
|
$
|
18.62
|
|
|
20.7
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
61.81
|
|
|
59.73
|
|
|
2.08
|
|
|
3.5
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.50
|
|
|
3.73
|
|
|
(0.23
|
)
|
|
(6.2
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
65.31
|
|
|
63.46
|
|
|
1.85
|
|
|
2.9
|
%
|
|||
Sales margin
|
|
$
|
43.22
|
|
|
$
|
26.45
|
|
|
$
|
16.77
|
|
|
63.4
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
14,060
|
|
|
13,291
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
19,060
|
|
|
18,353
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
14,731
|
|
|
13,233
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1
Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues and expenses also exclude venture partner cost reimbursements, where applicable.
|
|||||||||||||||
2
Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. Refer to "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Tons are long tons.
|
•
|
An increase in the average year-to-date realized product revenue rate of
$19
per long ton or
20.7%
during the nine months ended September 30, 2018, compared to the same period in the previous year, which resulted in an increase of
$263 million
. This is predominantly due to:
|
◦
|
An increase in the estimated average annual daily market price for hot-rolled coil steel, which positively affected both the realized revenue rate for current-year sales and the supplemental revenue associated with prior-period sales tons that will be consumed during 2018 and ultimately priced at the final full-year 2018 rate. These increases affected the realized revenue rate by $14 per long ton or $195 million during the first nine months of 2018; and
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $6 per long ton or $89 million; and
|
◦
|
Changes in customer and contract mix, which positively affected the realized revenue rate by $3 per long ton or $43 million.
|
◦
|
These increases were offset partially by:
|
▪
|
An increase in index freight rates, a component in most of our contract pricing formulas, which negatively affected the realized revenue rate by $3 per long ton or $41 million; and
|
▪
|
Lower full-year estimated Platts 62% Price as of September 30, 2018, compared to the prior year full-year estimated Platts 62% Price, which negatively affected the realized revenue rate by $3 per long ton or $37 million.
|
•
|
An increase in sales volume of
0.8 million
long tons, which resulted in increased costs of
$48 million
period-over-period; and
|
•
|
Unfavorable change in the full-year standard cost driven by higher employment-related and profit sharing costs of $23 million or $2 per long ton, increased royalties of $13 million or $1 per long ton and increased transportation rates of $9 million or $1 per long ton.
|
•
|
These increases were offset partially by a favorable impact to the full-year standard cost as a result of an expected LIFO layer liquidation of $19 million or $1 per long ton.
|
|
(In Millions)
|
||||||||||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||
|
2018
|
|
2017
|
|
Variance
|
|
2018
|
|
2017
|
|
Variance
|
||||||||||||
Income tax benefit (expense)
|
$
|
(0.5
|
)
|
|
$
|
7.2
|
|
|
$
|
(7.7
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
7.2
|
|
|
$
|
(21.6
|
)
|
Effective tax rate
|
0.2
|
%
|
|
(47.7
|
)%
|
|
47.9
|
%
|
|
3.3
|
%
|
|
(35.2
|
)%
|
|
38.5
|
%
|
|
|
2018 Outlook Summary
|
Per Long Ton Information
|
U.S. Iron Ore
|
|
Revenues from product sales and services
1
|
$105 - $110
|
|
|
|
|
Cost of goods sold and operating expense rate
|
$69 - $74
|
|
Less:
|
|
|
Freight expense rate
2
|
$8
|
|
Depreciation, depletion & amortization rate
|
$3
|
|
Cash cost of goods sold and operating expense rate
|
$58 - $63
|
|
|
|
|
Sales volume (million long tons)
|
21.0
|
|
Production volume (million long tons)
|
20.0
|
|
1
This expectation is based on the assumption that iron ore prices, steel prices, and pellet premiums will average for the remainder of 2018 their respective year-to-date averages.
|
||
2
Freight has an offsetting amount in revenue and has no impact on sales margin.
|
•
|
the Toledo HBI Project spend expectation was reduced by $25 million to $175 million due to further development and refined timing of the project spending plan;
|
•
|
the sustaining capital expectation of $75 million was maintained; and
|
•
|
the Northshore Mine upgrade spend expectation of $50 million was maintained.
|
•
|
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, reduced market demand and risks related to U.S. government actions with respect to Section 232 of the Trade Expansion Act (as amended by the Trade Act of 1974), the North American Free Trade Agreement and/or other trade agreements, treaties or policies;
|
•
|
continued volatility of iron ore and steel prices and other trends, including the supply approach of the major iron ore producers, affecting our financial condition, results of operations or future prospects, specifically the impact of price-adjustment factors on our sales contracts;
|
•
|
our ability to cost-effectively achieve planned production rates or levels, including at our HBI production plant;
|
•
|
our ability to successfully identify and consummate any strategic investments or development projects, including our HBI production plant;
|
•
|
the impact of our customers reducing their steel production due to increased market share of steel produced using other methods or lighter-weight steel alternatives;
|
•
|
our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele;
|
•
|
our actual economic iron ore reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve;
|
•
|
our ability to maintain appropriate relations with unions and employees;
|
•
|
the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration;
|
•
|
the ability of our customers and joint venture partners to meet their obligations to us on a timely basis or at all;
|
•
|
problems or uncertainties with productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry;
|
•
|
our ability to reach agreement with our customers regarding any modifications to sales contract provisions, renewals or new arrangements;
|
•
|
our actual levels of capital spending;
|
•
|
our level of indebtedness could limit cash flow available to fund working capital, capital expenditures, acquisitions and other general corporate purposes or ongoing needs of our business;
|
•
|
our ability to continue to pay cash dividends, and the amount and timing of any cash dividends;
|
•
|
availability of capital and our ability to maintain adequate liquidity;
|
•
|
changes in sales volume or mix;
|
•
|
events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets, as well as any resulting impairment charges;
|
•
|
impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory changes;
|
•
|
uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy, equipment failures and other unexpected events;
|
•
|
adverse changes in currency values, currency exchange rates, interest rates and tax laws; and
|
•
|
the potential existence of significant deficiencies or material weakness in our internal control over financial reporting.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares
(or Units) Purchased
1
|
|
Average Price Paid per Share
(or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs
|
|||||
July 1 - 31, 2018
|
|
3,948
|
|
|
$
|
10.15
|
|
|
—
|
|
$
|
—
|
|
August 1 - 31, 2018
|
|
163
|
|
|
$
|
9.92
|
|
|
—
|
|
$
|
—
|
|
September 1 - 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
|
4,111
|
|
|
$
|
10.14
|
|
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
1
These shares were delivered to us to satisfy tax withholding obligations due upon the vesting or payment of stock awards.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit
|
|
*Eighth Amendment to Trust Agreement No. 5, between Cleveland-Cliffs Inc. (f/k/a Cliffs Natural Resources Inc.) and KeyBank National Association, entered into and effective as of August 24, 2018 (filed herewith)
|
|
|
Certification Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves as of October 19, 2018 (filed herewith)
|
|
|
Certification Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed and dated by Timothy K. Flanagan as of October 19, 2018 (filed herewith)
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves, Chairman, President and Chief Executive Officer of Cleveland-Cliffs Inc., as of October 19, 2018 (filed herewith)
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Timothy K. Flanagan, Executive Vice President, Chief Financial Officer of Cleveland-Cliffs Inc., as of October 19, 2018 (filed herewith)
|
|
|
Mine Safety Disclosures (filed herewith)
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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CLEVELAND-CLIFFS INC.
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By:
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/s/ R. Christopher Cebula
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Name:
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R. Christopher Cebula
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Title:
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Vice President, Corporate Controller & Chief Accounting Officer
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Date:
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10/19/2018
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1 Year Cleveland Cliffs Chart |
1 Month Cleveland Cliffs Chart |
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