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
|
☐
|
(Do not check if a smaller reporting company)
|
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
|
|
Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, as amended
|
Adjusted EBITDA
|
|
EBITDA excluding certain items such as extinguishment/restructuring of debt, foreign currency exchange remeasurement, impacts of discontinued operations, severance and contractor termination costs 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
|
ASC
|
|
Accounting Standards Codification
|
ASU
|
|
Accounting Standards Updates
|
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)
|
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
|
SSR
|
|
System Support Resource
|
Tilden
|
|
Tilden Mining Company L.C.
|
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
|
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
|
2015 Equity Plan
|
|
Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan
|
Item 1.
|
Financial Statements
|
|
(In Millions)
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
260.8
|
|
|
$
|
323.4
|
|
Accounts receivable, net
|
63.9
|
|
|
128.7
|
|
||
Inventories
|
207.7
|
|
|
178.4
|
|
||
Supplies and other inventories
|
92.5
|
|
|
91.4
|
|
||
Derivative assets
|
89.5
|
|
|
33.1
|
|
||
Loans to and accounts receivable from the Canadian Entities
|
51.9
|
|
|
48.6
|
|
||
Other current assets
|
24.8
|
|
|
21.0
|
|
||
TOTAL CURRENT ASSETS
|
791.1
|
|
|
824.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
993.8
|
|
|
984.4
|
|
||
OTHER NON-CURRENT ASSETS
|
138.4
|
|
|
114.9
|
|
||
TOTAL ASSETS
|
$
|
1,923.3
|
|
|
$
|
1,923.9
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
627.5
|
|
|
$
|
508.6
|
|
|
$
|
1,552.3
|
|
|
$
|
1,237.0
|
|
Freight and venture partners' cost reimbursements
|
70.9
|
|
|
44.7
|
|
|
177.0
|
|
|
118.0
|
|
||||
|
698.4
|
|
|
553.3
|
|
|
1,729.3
|
|
|
1,355.0
|
|
||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
(538.2
|
)
|
|
(467.9
|
)
|
|
(1,328.3
|
)
|
|
(1,147.2
|
)
|
||||
SALES MARGIN
|
160.2
|
|
|
85.4
|
|
|
401.0
|
|
|
207.8
|
|
||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
(24.6
|
)
|
|
(31.1
|
)
|
|
(77.8
|
)
|
|
(81.8
|
)
|
||||
Miscellaneous - net
|
(5.9
|
)
|
|
(19.6
|
)
|
|
3.0
|
|
|
(16.9
|
)
|
||||
|
(30.5
|
)
|
|
(50.7
|
)
|
|
(74.8
|
)
|
|
(98.7
|
)
|
||||
OPERATING INCOME
|
129.7
|
|
|
34.7
|
|
|
326.2
|
|
|
109.1
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(28.9
|
)
|
|
(48.7
|
)
|
|
(103.1
|
)
|
|
(156.2
|
)
|
||||
Gain (loss) on extinguishment/restructuring of debt
|
(88.6
|
)
|
|
(18.3
|
)
|
|
(165.4
|
)
|
|
164.1
|
|
||||
Other non-operating income
|
0.8
|
|
|
0.1
|
|
|
2.3
|
|
|
0.4
|
|
||||
|
(116.7
|
)
|
|
(66.9
|
)
|
|
(266.2
|
)
|
|
8.3
|
|
||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
13.0
|
|
|
(32.2
|
)
|
|
60.0
|
|
|
117.4
|
|
||||
INCOME TAX BENEFIT
|
7.6
|
|
|
7.1
|
|
|
6.8
|
|
|
1.7
|
|
||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
20.6
|
|
|
(25.1
|
)
|
|
66.8
|
|
|
119.1
|
|
||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
32.3
|
|
|
(2.7
|
)
|
|
(13.6
|
)
|
|
(0.6
|
)
|
||||
NET INCOME (LOSS)
|
52.9
|
|
|
(27.8
|
)
|
|
53.2
|
|
|
118.5
|
|
||||
LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
0.5
|
|
|
2.0
|
|
|
3.9
|
|
|
(23.5
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
53.4
|
|
|
$
|
(25.8
|
)
|
|
$
|
57.1
|
|
|
$
|
95.0
|
|
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.25
|
|
|
$
|
0.51
|
|
Discontinued operations
|
0.11
|
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
—
|
|
||||
|
$
|
0.18
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.20
|
|
|
$
|
0.51
|
|
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - DILUTED
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.24
|
|
|
$
|
0.51
|
|
Discontinued operations
|
0.11
|
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
—
|
|
||||
|
$
|
0.18
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.19
|
|
|
$
|
0.51
|
|
AVERAGE NUMBER OF SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Basic
|
296,079
|
|
|
206,279
|
|
|
285,771
|
|
|
186,454
|
|
||||
Diluted
|
301,075
|
|
|
206,279
|
|
|
290,512
|
|
|
188,471
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
53.4
|
|
|
$
|
(25.8
|
)
|
|
$
|
57.1
|
|
|
$
|
95.0
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Changes in pension and other post-retirement benefits, net of tax
|
7.5
|
|
|
7.1
|
|
|
18.9
|
|
|
19.0
|
|
||||
Unrealized net gain (loss) on foreign currency translation
|
0.5
|
|
|
0.9
|
|
|
(13.6
|
)
|
|
2.6
|
|
||||
Unrealized net gain (loss) on derivative financial instruments, net of tax
|
—
|
|
|
0.7
|
|
|
—
|
|
|
(2.6
|
)
|
||||
OTHER COMPREHENSIVE INCOME
|
8.0
|
|
|
8.7
|
|
|
5.3
|
|
|
19.0
|
|
||||
OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST
|
(5.7
|
)
|
|
(0.9
|
)
|
|
(1.1
|
)
|
|
(2.2
|
)
|
||||
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
55.7
|
|
|
$
|
(18.0
|
)
|
|
$
|
61.3
|
|
|
$
|
111.8
|
|
|
(In Millions)
|
||||||
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
53.2
|
|
|
$
|
118.5
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
66.3
|
|
|
88.9
|
|
||
(Gain) loss on extinguishment/restructuring of debt
|
165.4
|
|
|
(164.1
|
)
|
||
(Gain) loss on deconsolidation
|
16.3
|
|
|
(3.2
|
)
|
||
Gain on derivatives
|
(47.5
|
)
|
|
(22.6
|
)
|
||
Other
|
19.0
|
|
|
31.6
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables and other assets
|
68.9
|
|
|
137.5
|
|
||
Inventories
|
(26.1
|
)
|
|
21.6
|
|
||
Payables, accrued expenses and other liabilities
|
(108.8
|
)
|
|
(136.1
|
)
|
||
Net cash provided by operating activities
|
206.7
|
|
|
72.1
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of property, plant and equipment
|
(78.9
|
)
|
|
(45.8
|
)
|
||
Other investing activities
|
(5.5
|
)
|
|
6.3
|
|
||
Net cash used by investing activities
|
(84.4
|
)
|
|
(39.5
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from issuance of senior notes
|
1,057.8
|
|
|
—
|
|
||
Debt issuance costs
|
(12.0
|
)
|
|
(5.2
|
)
|
||
Net proceeds from issuance of common shares
|
661.3
|
|
|
287.6
|
|
||
Repurchase of debt
|
(1,720.7
|
)
|
|
(301.0
|
)
|
||
Repayment of equipment loans
|
—
|
|
|
(95.6
|
)
|
||
Borrowings under credit facilities
|
—
|
|
|
105.0
|
|
||
Repayment under credit facilities
|
—
|
|
|
(105.0
|
)
|
||
Acquisition of noncontrolling interest
|
(105.0
|
)
|
|
—
|
|
||
Distributions of partnership equity
|
(53.0
|
)
|
|
(52.5
|
)
|
||
Other financing activities
|
(17.0
|
)
|
|
(19.3
|
)
|
||
Net cash used by financing activities
|
(188.6
|
)
|
|
(186.0
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
3.7
|
|
|
0.4
|
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(62.6
|
)
|
|
(153.0
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
323.4
|
|
|
285.2
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
260.8
|
|
|
$
|
132.2
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income (Loss)
|
$
|
52.9
|
|
|
$
|
(27.8
|
)
|
|
$
|
53.2
|
|
|
$
|
118.5
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(28.9
|
)
|
|
(48.7
|
)
|
|
(103.1
|
)
|
|
(156.2
|
)
|
||||
Income tax benefit
|
7.6
|
|
|
7.1
|
|
|
6.8
|
|
|
1.7
|
|
||||
Depreciation, depletion and amortization
|
(21.5
|
)
|
|
(26.8
|
)
|
|
(66.3
|
)
|
|
(88.9
|
)
|
||||
EBITDA
|
$
|
95.7
|
|
|
$
|
40.6
|
|
|
$
|
215.8
|
|
|
$
|
361.9
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on extinguishment/restructuring of debt
|
$
|
(88.6
|
)
|
|
$
|
(18.3
|
)
|
|
$
|
(165.4
|
)
|
|
$
|
164.1
|
|
Foreign exchange remeasurement
|
(2.4
|
)
|
|
(0.3
|
)
|
|
11.2
|
|
|
(1.2
|
)
|
||||
Impact of discontinued operations
|
32.3
|
|
|
(2.7
|
)
|
|
(13.6
|
)
|
|
(0.6
|
)
|
||||
Severance and contractor termination costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Adjusted EBITDA
|
$
|
154.4
|
|
|
$
|
61.9
|
|
|
$
|
383.6
|
|
|
$
|
199.7
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA
|
|
|
|
|
|
|
|
||||||||
U.S. Iron Ore
|
$
|
168.9
|
|
|
$
|
61.1
|
|
|
$
|
381.8
|
|
|
$
|
196.6
|
|
Asia Pacific Iron Ore
|
2.3
|
|
|
21.2
|
|
|
54.9
|
|
|
69.6
|
|
||||
Other
|
(75.5
|
)
|
|
(41.7
|
)
|
|
(220.9
|
)
|
|
95.7
|
|
||||
Total EBITDA
|
$
|
95.7
|
|
|
$
|
40.6
|
|
|
$
|
215.8
|
|
|
$
|
361.9
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
U.S. Iron Ore
|
$
|
174.2
|
|
|
$
|
65.3
|
|
|
$
|
399.8
|
|
|
$
|
208.6
|
|
Asia Pacific Iron Ore
|
4.9
|
|
|
23.7
|
|
|
61.7
|
|
|
73.2
|
|
||||
Other
|
(24.7
|
)
|
|
(27.1
|
)
|
|
(77.9
|
)
|
|
(82.1
|
)
|
||||
Total Adjusted EBITDA
|
$
|
154.4
|
|
|
$
|
61.9
|
|
|
$
|
383.6
|
|
|
$
|
199.7
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
Segment
|
Finished Goods
|
|
Work-in Process
|
|
Total Inventory
|
|
Finished Goods
|
|
Work-in Process
|
|
Total
Inventory
|
||||||||||||
U.S. Iron Ore
|
$
|
151.3
|
|
|
$
|
18.6
|
|
|
$
|
169.9
|
|
|
$
|
124.4
|
|
|
$
|
12.6
|
|
|
$
|
137.0
|
|
Asia Pacific Iron Ore
|
29.4
|
|
|
8.4
|
|
|
37.8
|
|
|
23.6
|
|
|
17.8
|
|
|
41.4
|
|
||||||
Total
|
$
|
180.7
|
|
|
$
|
27.0
|
|
|
$
|
207.7
|
|
|
$
|
148.0
|
|
|
$
|
30.4
|
|
|
$
|
178.4
|
|
|
(In Millions)
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
Land rights and mineral rights
|
$
|
500.7
|
|
|
$
|
500.5
|
|
Office and information technology
|
66.2
|
|
|
65.1
|
|
||
Buildings
|
80.0
|
|
|
67.9
|
|
||
Mining equipment
|
585.4
|
|
|
592.2
|
|
||
Processing equipment
|
607.9
|
|
|
552.0
|
|
||
Electric power facilities
|
57.0
|
|
|
49.4
|
|
||
Land improvements
|
23.7
|
|
|
23.5
|
|
||
Asset retirement obligation
|
19.6
|
|
|
19.8
|
|
||
Other
|
30.4
|
|
|
28.1
|
|
||
Construction in-progress
|
35.4
|
|
|
42.8
|
|
||
|
2,006.3
|
|
|
1,941.3
|
|
||
Allowance for depreciation and depletion
|
(1,012.5
|
)
|
|
(956.9
|
)
|
||
|
$
|
993.8
|
|
|
$
|
984.4
|
|
(In Millions)
|
||||||||||||||||||
September 30, 2017
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Unsecured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 5.90% 2020 Senior Notes
|
|
5.98%
|
|
$
|
88.9
|
|
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
88.5
|
|
$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
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
5.75%
|
|
1,075.0
|
|
|
(11.2
|
)
|
|
(17.0
|
)
|
|
1,046.8
|
|
||||
$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
|
|
|
|
|
|
|
|
|
|
1.5
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
1,689.4
|
|
(In Millions)
|
||||||||||||||||||
December 31, 2016
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Undiscounted Interest/
(Unamortized Discounts)
|
|
Total Debt
|
||||||||
Secured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$540 Million 8.25% 2020 First Lien Notes
|
|
9.97%
|
|
$
|
540.0
|
|
|
$
|
(8.0
|
)
|
|
$
|
(25.7
|
)
|
|
$
|
506.3
|
|
$218.5 Million 8.00% 2020 1.5 Lien Notes
|
|
N/A
|
|
218.5
|
|
|
—
|
|
|
65.7
|
|
|
284.2
|
|
||||
$544.2 Million 7.75% 2020 Second Lien Notes
|
|
15.55%
|
|
430.1
|
|
|
(5.8
|
)
|
|
(85.2
|
)
|
|
339.1
|
|
||||
Unsecured Notes
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 5.90% 2020 Senior Notes
|
|
5.98%
|
|
225.6
|
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|
224.5
|
|
||||
$500 Million 4.80% 2020 Senior Notes
|
|
4.83%
|
|
236.8
|
|
|
(0.7
|
)
|
|
(0.2
|
)
|
|
235.9
|
|
||||
$700 Million 4.875% 2021 Senior Notes
|
|
4.89%
|
|
309.4
|
|
|
(1.0
|
)
|
|
(0.2
|
)
|
|
308.2
|
|
||||
$800 Million 6.25% 2040 Senior Notes
|
|
6.34%
|
|
298.4
|
|
|
(2.5
|
)
|
|
(3.4
|
)
|
|
292.5
|
|
||||
ABL Facility
|
|
N/A
|
|
550.0
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
||||
Fair Value Adjustment to Interest Rate Hedge
|
|
|
|
|
|
|
|
|
|
1.9
|
|
|||||||
Total debt
|
|
|
|
|
|
|
|
|
|
|
$
|
2,192.6
|
|
|||||
Less current portion
|
|
|
|
|
|
|
|
|
|
17.5
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,175.1
|
|
|
(In Millions)
|
||
|
Maturities of Debt
|
||
2017 (October 1 - December 31)
|
$
|
—
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
211.3
|
|
|
2021
|
138.4
|
|
|
2022
|
—
|
|
|
2023 and thereafter
|
1,373.4
|
|
|
Total maturities of debt
|
$
|
1,723.1
|
|
|
(In Millions)
|
||||||||||||||
|
September 30, 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
|
$
|
40.0
|
|
|
$
|
37.0
|
|
|
$
|
—
|
|
|
$
|
77.0
|
|
Derivative assets
|
—
|
|
|
—
|
|
|
89.5
|
|
|
89.5
|
|
||||
Total
|
$
|
40.0
|
|
|
$
|
37.0
|
|
|
$
|
89.5
|
|
|
$
|
166.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
|
$
|
9.3
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
|
$
|
9.3
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2016
|
||||||||||||||
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
|
$
|
177.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
177.0
|
|
Derivative assets
|
—
|
|
|
1.5
|
|
|
31.6
|
|
|
33.1
|
|
||||
Total
|
$
|
177.0
|
|
|
$
|
1.5
|
|
|
$
|
31.6
|
|
|
$
|
210.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
(In Millions)
|
||||||||||||||
|
Level 3 Liabilities
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Beginning balance
|
$
|
(20.9
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(3.4
|
)
|
Total gains (losses)
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
(19.3
|
)
|
|
(2.9
|
)
|
|
(64.9
|
)
|
|
(12.8
|
)
|
||||
Settlements
|
30.9
|
|
|
2.8
|
|
|
56.1
|
|
|
13.5
|
|
||||
Ending balance - September 30
|
$
|
(9.3
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(9.3
|
)
|
|
$
|
(2.7
|
)
|
Total gains (losses) for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date
|
$
|
6.0
|
|
|
$
|
(2.7
|
)
|
|
$
|
(14.8
|
)
|
|
$
|
(2.7
|
)
|
|
|
(In Millions)
|
||||||||||||||||||
|
|
December 31, 2016
|
||||||||||||||||||
Description
|
|
Quoted Prices in Active
Markets for Identical Assets/
Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
|
Total Year-to-Date Gains (Losses)
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans to and accounts receivables from the Canadian Entities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48.6
|
|
|
$
|
48.6
|
|
|
$
|
(17.5
|
)
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37.2
|
|
|
$
|
37.2
|
|
|
$
|
0.4
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
3.4
|
|
|
$
|
4.2
|
|
|
$
|
12.9
|
|
|
$
|
13.2
|
|
Interest cost
|
7.9
|
|
|
7.8
|
|
|
22.9
|
|
|
22.7
|
|
||||
Expected return on plan assets
|
(13.8
|
)
|
|
(13.6
|
)
|
|
(40.9
|
)
|
|
(41.0
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service costs
|
0.6
|
|
|
0.5
|
|
|
1.9
|
|
|
1.6
|
|
||||
Net actuarial loss
|
6.1
|
|
|
5.4
|
|
|
16.7
|
|
|
15.9
|
|
||||
Net periodic benefit cost
|
$
|
4.2
|
|
|
$
|
4.3
|
|
|
$
|
13.5
|
|
|
$
|
12.4
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
Interest cost
|
1.9
|
|
|
2.3
|
|
|
6.2
|
|
|
6.8
|
|
||||
Expected return on plan assets
|
(4.4
|
)
|
|
(4.3
|
)
|
|
(13.3
|
)
|
|
(12.8
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service credits
|
(0.8
|
)
|
|
(0.9
|
)
|
|
(2.3
|
)
|
|
(2.8
|
)
|
||||
Net actuarial loss
|
0.9
|
|
|
1.7
|
|
|
3.4
|
|
|
4.5
|
|
||||
Net periodic benefit credit
|
$
|
(2.1
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(3.0
|
)
|
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, 2017
|
|
$
|
11.67
|
|
|
2.86
|
|
92.1%
|
|
1.51%
|
|
—%
|
|
$
|
19.69
|
|
|
168.72%
|
June 26, 2017
|
|
$
|
6.64
|
|
|
2.51
|
|
92.8%
|
|
1.45%
|
|
—%
|
|
$
|
10.74
|
|
|
161.75%
|
|
(In Millions)
|
||||||
|
Capital Leases
|
|
Operating Leases
|
||||
2017 (October 1 - December 31)
|
$
|
6.1
|
|
|
$
|
1.8
|
|
2018
|
19.3
|
|
|
5.9
|
|
||
2019
|
10.7
|
|
|
2.9
|
|
||
2020
|
9.7
|
|
|
2.9
|
|
||
2021
|
9.0
|
|
|
3.0
|
|
||
2022 and thereafter
|
0.7
|
|
|
—
|
|
||
Total minimum lease payments
|
$
|
55.5
|
|
|
$
|
16.5
|
|
Amounts representing interest
|
9.0
|
|
|
|
|||
Present value of net minimum lease payments
1
|
$
|
46.5
|
|
|
|
||
|
|
|
|
||||
1
The total is comprised of $17.0 million and $29.5 million classified as
Other current liabilities
and
Other liabilities
, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at September 30, 2017.
|
|
(In Millions)
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
Environmental
|
$
|
2.9
|
|
|
$
|
2.8
|
|
Mine closure
|
|
|
|
||||
U.S. Iron Ore
1
|
195.0
|
|
|
187.8
|
|
||
Asia Pacific Iron Ore
|
18.3
|
|
|
16.2
|
|
||
Total mine closure
|
213.3
|
|
|
204.0
|
|
||
Total environmental and mine closure obligations
|
216.2
|
|
|
206.8
|
|
||
Less current portion
|
10.8
|
|
|
12.9
|
|
||
Long-term environmental and mine closure obligations
|
$
|
205.4
|
|
|
$
|
193.9
|
|
|
|
|
|
||||
1
U.S. Iron Ore includes our active operating mines, our indefinitely idled Empire mine and a closed mine formerly operating as LTVSMC.
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Classification
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Permits
|
Other non-current assets
|
|
$
|
78.9
|
|
|
$
|
(26.1
|
)
|
|
$
|
52.8
|
|
|
$
|
78.4
|
|
|
$
|
(24.6
|
)
|
|
$
|
53.8
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
Derivative Instrument
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||||||
Customer supply agreements
|
|
Derivative assets
|
|
$
|
84.8
|
|
|
Derivative assets
|
|
$
|
21.3
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Provisional pricing arrangements
|
|
Derivative assets
|
|
4.7
|
|
|
Derivative assets
|
|
10.3
|
|
|
Derivative liabilities
|
|
9.3
|
|
|
Derivative liabilities
|
|
0.5
|
|
||||
Commodity contracts
|
|
|
|
—
|
|
|
Derivative assets
|
|
1.5
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815
|
|
|
|
$
|
89.5
|
|
|
|
|
$
|
33.1
|
|
|
|
|
$
|
9.3
|
|
|
|
|
$
|
0.5
|
|
|
(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 income (loss)
|
57.1
|
|
|
(3.9
|
)
|
|
53.2
|
|
|||
Other comprehensive income
|
4.2
|
|
|
1.1
|
|
|
5.3
|
|
|||
Total comprehensive income (loss)
|
61.3
|
|
|
(2.8
|
)
|
|
58.5
|
|
|||
Issuance of common shares
|
661.3
|
|
|
—
|
|
|
661.3
|
|
|||
Stock and other incentive plans
|
13.5
|
|
|
—
|
|
|
13.5
|
|
|||
Acquisition of noncontrolling interest
|
(89.1
|
)
|
|
(15.9
|
)
|
|
(105.0
|
)
|
|||
Distribution of partnership equity
|
(16.0
|
)
|
|
(116.7
|
)
|
|
(132.7
|
)
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
1.8
|
|
|
1.8
|
|
|||
September 30, 2017
|
$
|
(833.3
|
)
|
|
$
|
0.2
|
|
|
$
|
(833.1
|
)
|
|
(In Millions)
|
||||||||||
|
Cliffs
Shareholders’ Equity (Deficit) |
|
Noncontrolling
Interest (Deficit) |
|
Total Equity
(Deficit) |
||||||
December 31, 2015
|
$
|
(1,981.4
|
)
|
|
$
|
169.8
|
|
|
$
|
(1,811.6
|
)
|
Comprehensive income
|
|
|
|
|
|
||||||
Net income
|
95.0
|
|
|
23.5
|
|
|
118.5
|
|
|||
Other comprehensive income
|
16.8
|
|
|
2.2
|
|
|
19.0
|
|
|||
Total comprehensive income
|
111.8
|
|
|
25.7
|
|
|
137.5
|
|
|||
Issuance of common shares
|
315.2
|
|
|
—
|
|
|
315.2
|
|
|||
Stock and other incentive plans
|
10.1
|
|
|
—
|
|
|
10.1
|
|
|||
Distributions of partnership equity
|
—
|
|
|
(48.8
|
)
|
|
(48.8
|
)
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|||
September 30, 2016
|
$
|
(1,544.3
|
)
|
|
$
|
143.8
|
|
|
$
|
(1,400.5
|
)
|
|
(In Millions)
|
||||||||||||||||||
|
Changes in Pension and Other Post-Retirement Benefits, net of tax
|
|
Unrealized Net Gain (Loss) on Securities, net of tax
|
|
Unrealized Net Gain (Loss) on Foreign Currency Translation
|
|
Net Unrealized Gain (Loss) on Derivative Financial Instruments, net of tax
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
December 31, 2015
|
$
|
(241.4
|
)
|
|
$
|
0.1
|
|
|
$
|
220.7
|
|
|
$
|
2.6
|
|
|
$
|
(18.0
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1.5
|
)
|
|
(0.1
|
)
|
|
4.4
|
|
|
(3.4
|
)
|
|
(0.6
|
)
|
|||||
Net loss reclassified from accumulated other comprehensive loss
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|||||
March 31, 2016
|
$
|
(236.6
|
)
|
|
$
|
—
|
|
|
$
|
225.1
|
|
|
$
|
(0.8
|
)
|
|
$
|
(12.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
(0.4
|
)
|
|
—
|
|
|
(2.7
|
)
|
|
0.1
|
|
|
(3.0
|
)
|
|||||
Net loss reclassified from accumulated other comprehensive loss
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|||||
June 30, 2016
|
$
|
(230.7
|
)
|
|
$
|
—
|
|
|
$
|
222.4
|
|
|
$
|
(0.7
|
)
|
|
$
|
(9.0
|
)
|
Other comprehensive income (loss) before reclassifications
|
(0.5
|
)
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.4
|
|
|||||
Net loss reclassified from accumulated other comprehensive income (loss)
|
6.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
7.4
|
|
|||||
September 30, 2016
|
$
|
(224.5
|
)
|
|
$
|
—
|
|
|
$
|
223.3
|
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
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, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income (Loss) from Continuing Operations
|
$
|
20.6
|
|
|
$
|
(25.1
|
)
|
|
$
|
66.8
|
|
|
$
|
119.1
|
|
Loss (Income) from Continuing Operations Attributable to Noncontrolling Interest
|
0.5
|
|
|
2.0
|
|
|
3.9
|
|
|
(23.5
|
)
|
||||
Net Income (Loss) from Continuing Operations Attributable to Cliffs Shareholders
|
$
|
21.1
|
|
|
$
|
(23.1
|
)
|
|
$
|
70.7
|
|
|
$
|
95.6
|
|
Income (Loss) from Discontinued Operations, net of tax
|
32.3
|
|
|
(2.7
|
)
|
|
(13.6
|
)
|
|
(0.6
|
)
|
||||
Net Income (Loss) Attributable to Cliffs Shareholders
|
$
|
53.4
|
|
|
$
|
(25.8
|
)
|
|
$
|
57.1
|
|
|
$
|
95.0
|
|
Weighted Average Number of Shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
296.1
|
|
|
206.3
|
|
|
285.8
|
|
|
186.5
|
|
||||
Employee Stock Plans
|
5.0
|
|
|
—
|
|
|
4.7
|
|
|
2.0
|
|
||||
Diluted
|
301.1
|
|
|
206.3
|
|
|
290.5
|
|
|
188.5
|
|
||||
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Basic: |
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.25
|
|
|
$
|
0.51
|
|
Discontinued operations
|
0.11
|
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
—
|
|
||||
|
$
|
0.18
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.20
|
|
|
$
|
0.51
|
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Diluted: |
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.24
|
|
|
$
|
0.51
|
|
Discontinued operations
|
0.11
|
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
—
|
|
||||
|
$
|
0.18
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.19
|
|
|
$
|
0.51
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
(In Millions)
|
||||||||||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||
|
2017
|
|
2016
|
|
Variance
|
|
2017
|
|
2016
|
|
Variance
|
||||||||||||
Income tax benefit
|
$
|
7.6
|
|
|
$
|
7.1
|
|
|
$
|
0.5
|
|
|
$
|
6.8
|
|
|
$
|
1.7
|
|
|
$
|
5.1
|
|
Effective tax rate
|
(58.5
|
)%
|
|
22.1
|
%
|
|
(80.6
|
)%
|
|
(11.3
|
)%
|
|
(1.5
|
)%
|
|
(9.8
|
)%
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income (Loss)
|
$
|
52.9
|
|
|
$
|
(27.8
|
)
|
|
$
|
53.2
|
|
|
$
|
118.5
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(28.9
|
)
|
|
(48.7
|
)
|
|
(103.1
|
)
|
|
(156.2
|
)
|
||||
Income tax benefit
|
7.6
|
|
|
7.1
|
|
|
6.8
|
|
|
1.7
|
|
||||
Depreciation, depletion and amortization
|
(21.5
|
)
|
|
(26.8
|
)
|
|
(66.3
|
)
|
|
(88.9
|
)
|
||||
EBITDA
|
$
|
95.7
|
|
|
$
|
40.6
|
|
|
$
|
215.8
|
|
|
$
|
361.9
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on extinguishment/restructuring of debt
|
$
|
(88.6
|
)
|
|
$
|
(18.3
|
)
|
|
$
|
(165.4
|
)
|
|
$
|
164.1
|
|
Foreign exchange remeasurement
|
(2.4
|
)
|
|
(0.3
|
)
|
|
11.2
|
|
|
(1.2
|
)
|
||||
Impact of discontinued operations
|
32.3
|
|
|
(2.7
|
)
|
|
(13.6
|
)
|
|
(0.6
|
)
|
||||
Severance and contractor termination costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Adjusted EBITDA
|
$
|
154.4
|
|
|
$
|
61.9
|
|
|
$
|
383.6
|
|
|
$
|
199.7
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA:
|
|
|
|
|
|
|
|
||||||||
U.S. Iron Ore
|
$
|
168.9
|
|
|
$
|
61.1
|
|
|
$
|
381.8
|
|
|
$
|
196.6
|
|
Asia Pacific Iron Ore
|
2.3
|
|
|
21.2
|
|
|
54.9
|
|
|
69.6
|
|
||||
Other
|
(75.5
|
)
|
|
(41.7
|
)
|
|
(220.9
|
)
|
|
95.7
|
|
||||
Total EBITDA
|
$
|
95.7
|
|
|
$
|
40.6
|
|
|
$
|
215.8
|
|
|
$
|
361.9
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
U.S. Iron Ore
|
$
|
174.2
|
|
|
$
|
65.3
|
|
|
$
|
399.8
|
|
|
$
|
208.6
|
|
Asia Pacific Iron Ore
|
4.9
|
|
|
23.7
|
|
|
61.7
|
|
|
73.2
|
|
||||
Other
|
(24.7
|
)
|
|
(27.1
|
)
|
|
(77.9
|
)
|
|
(82.1
|
)
|
||||
Total Adjusted EBITDA
|
$
|
154.4
|
|
|
$
|
61.9
|
|
|
$
|
383.6
|
|
|
$
|
199.7
|
|
|
|
(in Millions)
|
|||||||||||||
|
|
Three Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
90.50
|
|
|
$
|
73.50
|
|
|
$
|
17.00
|
|
|
23.1
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
60.87
|
|
|
57.37
|
|
|
3.50
|
|
|
6.1
|
%
|
|||
Depreciation, depletion & amortization
|
|
2.81
|
|
|
3.56
|
|
|
(0.75
|
)
|
|
(21.1
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
63.68
|
|
|
60.93
|
|
|
2.75
|
|
|
4.5
|
%
|
|||
Sales margin
|
|
$
|
26.82
|
|
|
$
|
12.57
|
|
|
$
|
14.25
|
|
|
113.4
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
5,863
|
|
|
5,287
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
6,048
|
|
|
5,722
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
4,265
|
|
|
3,857
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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
$17
per long ton or
23.1%
during the three months ended September 30, 2017, compared to the same period in the previous year, which resulted in an increase of
$101 million
. This is predominantly due to:
|
◦
|
An increase in Platts 62% Price, which positively affected the realized revenue rate by $9 per long ton or $55 million;
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $5 per long ton or $31 million; and
|
◦
|
An increase in the average annual daily market price for hot-rolled coil steel, which positively affected the realized revenue rate by $5 per long ton or $30 million.
|
◦
|
These increases were offset partially by higher index freight rates, a component in some of our contract pricing formulas, which negatively affected the realized revenue rate by $4 per long ton or $22 million.
|
•
|
Higher sales volumes of
0.6 million
long tons, which resulted in increased revenue of
$42 million
. This is predominantly due to:
|
◦
|
Increased demand from a customer during the third quarter of 2017, providing additional sales volume of 0.7 million long tons, compared to the prior-year period when the customer had sufficient inventory due to the idle of one of its facilities and additional suppliers;
|
◦
|
Increased exports as a result of advantageous market pricing during the third quarter of 2017, providing additional sales volume of 0.5 million long tons, compared to the prior-year period; and
|
◦
|
Increased demand from a customer during the third quarter of 2017, providing additional sales volume of 0.3 million long tons, due to the customer's lack of storage space in the prior-year period.
|
◦
|
These increases were offset partially due to engaging in no spot contracts during the third quarter of 2017, resulting in a decrease in sales volume of 0.9 million long tons compared to the prior-year period.
|
•
|
Higher spending on repairs and maintenance of $15 million or $3 per long ton, higher profit sharing and benefit costs of $10 million or $2 per long ton, and higher energy rates for natural gas, diesel and electricity of $5 million or $1 per long ton; and
|
•
|
Increased sales volumes of
0.6 million
long tons, which resulted in increased costs of
$31 million
period-over-period.
|
•
|
Partially offset by decreased costs of
$9 million
or $2 per long ton due to the idle of the United Taconite and Northshore mines during the prior-year period compared to the 2017 period.
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Changes due to:
|
|
|
||||||||||||||||||||||
|
|
Nine Months Ended
September 30, |
|
Revenue
and cost rate
|
|
Sales volume
|
|
Idle cost/production volume variance
|
|
Freight and reimburse-ment
|
|
Total change
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
|
|
|
|
|||||||||||||||||||
Revenues from product sales and services
|
|
$
|
1,354.2
|
|
|
$
|
975.5
|
|
|
$
|
173.3
|
|
|
$
|
150.2
|
|
|
$
|
—
|
|
|
$
|
55.2
|
|
|
$
|
378.7
|
|
Cost of goods sold and operating expenses
|
|
(1,004.4
|
)
|
|
(825.8
|
)
|
|
(69.7
|
)
|
|
(108.3
|
)
|
|
54.6
|
|
|
(55.2
|
)
|
|
(178.6
|
)
|
|||||||
Sales margin
|
|
$
|
349.8
|
|
|
$
|
149.7
|
|
|
$
|
103.6
|
|
|
$
|
41.9
|
|
|
$
|
54.6
|
|
|
$
|
—
|
|
|
$
|
200.1
|
|
|
|
(in Millions)
|
|||||||||||||
|
|
Nine Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
89.91
|
|
|
$
|
76.82
|
|
|
$
|
13.09
|
|
|
17.0
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
59.86
|
|
|
57.89
|
|
|
1.97
|
|
|
3.4
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.73
|
|
|
5.74
|
|
|
(2.01
|
)
|
|
(35.0
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
63.59
|
|
|
63.63
|
|
|
(0.04
|
)
|
|
(0.1
|
)%
|
|||
Sales margin
|
|
$
|
26.32
|
|
|
$
|
13.19
|
|
|
$
|
13.13
|
|
|
99.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
13,291
|
|
|
11,343
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
18,353
|
|
|
16,622
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
13,233
|
|
|
11,059
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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
$13
per long ton or
17.0%
during the nine months ended September 30, 2017, compared to the same period in the previous year, which resulted in an increase of
$173 million
. This is predominantly due to:
|
◦
|
An increase in Platts 62% Price, which positively affected the realized revenue rate by $11 per long ton or $146 million;
|
◦
|
An increase in the average annual daily market price and customer pricing for hot-rolled coil steel, which positively affected the realized revenue rate by $6 per long ton or $78 million; and
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $5 per long ton or $63 million.
|
◦
|
These increases were offset partially by changes in customer and contract mix and carryover pricing impacts, which negatively affected the realized revenue rate by $6 per long ton or $84 million; and
|
◦
|
Higher index freight rates, a component in some of our contract pricing formulas, which negatively affected the realized revenue rate by $3 per long ton or $38 million.
|
•
|
Higher sales volumes of
1.9 million
long tons, which resulted in increased revenues of
$150 million
predominantly due to:
|
◦
|
Increased demand from a customer during the nine months ended September 30, 2017, providing additional sales volume of 1.8 million long tons, compared to the prior-year period when the customer had sufficient inventory due to the idle of one of its facilities and additional suppliers;
|
◦
|
Additional sales volume of 1.7 million long tons to a customer in the nine months ended September 30, 2017, compared to the prior-year period due to timing of shipments, increased demand due to higher operational levels in the current year and higher inventory levels in the prior year; and
|
◦
|
Increased demand from a customer during the nine months ended September 30, 2017, providing additional sales volume of 1.2 million long tons, resulting from the fourth quarter of 2015 termination of its contract, which was then reinstated and became effective during the first quarter of 2017.
|
◦
|
These increases were offset partially due to engaging in no spot contracts with two customers during the third quarter of 2017, resulting in a decrease in sales volume of 2.1 million long tons compared to the prior-year period; and
|
◦
|
Decreased sales from a customer due to timing and a transitioning to our Mustang pellet, resulting in a decrease in sales volume of 0.9 million long tons compared to the prior-year period.
|
•
|
Increased sales volumes as discussed above which resulted in increased costs of
$108 million
period-over-period; and
|
•
|
Higher spending on repairs and maintenance of $33 million or $3 per long ton, higher profit sharing and benefit costs of $22 million or $2 per long ton, and higher energy rates for natural gas, diesel and electricity of $12 million or $1 per long ton.
|
•
|
These increases were offset partially by decreased idle costs of
$55 million
or $4 per long ton due to the idle of the United Taconite and Northshore mines during the prior-year period.
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Change due to:
|
|
|
||||||||||||||||||||||
|
|
Three Months Ended
September 30, |
|
Revenue
and cost rate
|
|
Sales volume
|
|
Exchange rate
|
|
Freight and reimburse-ment
|
|
Total change
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
|
|
|
|
|||||||||||||||||||
Revenues from product sales and services
|
|
$
|
101.7
|
|
|
$
|
125.0
|
|
|
$
|
2.3
|
|
|
$
|
(25.6
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
(23.3
|
)
|
Cost of goods sold and operating expenses
|
|
(98.7
|
)
|
|
(106.1
|
)
|
|
(10.4
|
)
|
|
21.4
|
|
|
(3.8
|
)
|
|
0.2
|
|
|
7.4
|
|
|||||||
Sales margin
|
|
$
|
3.0
|
|
|
$
|
18.9
|
|
|
$
|
(8.1
|
)
|
|
$
|
(4.2
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
—
|
|
|
$
|
(15.9
|
)
|
|
|
(in Millions)
|
|||||||||||||
|
|
Three Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
43.36
|
|
|
$
|
42.87
|
|
|
$
|
0.49
|
|
|
1.1
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
40.54
|
|
|
33.87
|
|
|
6.67
|
|
|
19.7
|
%
|
|||
Depreciation, depletion & amortization
|
|
1.48
|
|
|
2.25
|
|
|
(0.77
|
)
|
|
(34.2
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
42.02
|
|
|
36.12
|
|
|
5.90
|
|
|
16.3
|
%
|
|||
Sales margin
|
|
$
|
1.34
|
|
|
$
|
6.75
|
|
|
$
|
(5.41
|
)
|
|
(80.1
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
2,235
|
|
|
2,799
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
2,477
|
|
|
2,968
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1
The information above excludes revenues and expenses related to freight, which are offsetting and have no impact on sales margin.
|
|||||||||||||||
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 metric tons.
|
•
|
Decreased sales volume of
0.6 million
metric tons, or 20.2%, to 2.2 million metric tons in the third quarter of 2017, compared to the prior-year period. The decrease was driven primarily by lower production volumes, a result of operational decisions reflecting current market conditions and quality ore availability which resulted in decreased revenue of
$26 million
compared to the prior-year period.
|
•
|
This decrease was offset partially by an increase in average year-to-date realized product revenue of
$0.49
per metric ton or
1.1%
during the three months ended September 30, 2017, compared to the same period in the previous year, which resulted in an increase of $2.5 million, including the impact of foreign exchange. This increase is predominantly a result of:
|
◦
|
An increase in the Platts 62% Price, which positively affected the realized revenue rate by $12 per metric ton or $26 million.
|
◦
|
This increase was offset partially by a decrease in revenue rate of $11 per metric ton or $24 million due to price and quality adjustments to meet market conditions and to compensate for varying quality ores and a reduction in iron content.
|
•
|
Decreased sales volume of
0.6 million
metric tons as discussed above which resulted in decreased costs of
$21 million
period-over-period.
|
•
|
This decrease was offset partially by an increase in production costs of
$10 million
or $5 per metric ton, predominantly due to increased mining costs driven by a higher strip ratio, higher logistic costs driven by increased freight rates, and higher administrative costs; and
|
•
|
Unfavorable foreign exchange rate variances of
$4 million
or $2 per metric ton.
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Change due to:
|
|
|
||||||||||||||||||||||
|
|
Nine Months Ended
September 30, |
|
Revenue
and cost rate
|
|
Sales volume
|
|
Exchange rate
|
|
Freight and reimburse-ment
|
|
Total change
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
|
|
|
|
|||||||||||||||||||
Revenues from product sales and services
|
|
$
|
375.1
|
|
|
$
|
379.5
|
|
|
$
|
35.0
|
|
|
$
|
(42.3
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
3.8
|
|
|
$
|
(4.4
|
)
|
Cost of goods sold and operating expenses
|
|
(323.9
|
)
|
|
(321.4
|
)
|
|
(23.8
|
)
|
|
34.8
|
|
|
(9.7
|
)
|
|
(3.8
|
)
|
|
(2.5
|
)
|
|||||||
Sales margin
|
|
$
|
51.2
|
|
|
$
|
58.1
|
|
|
$
|
11.2
|
|
|
$
|
(7.5
|
)
|
|
$
|
(10.6
|
)
|
|
$
|
—
|
|
|
$
|
(6.9
|
)
|
|
|
(in Millions)
|
|||||||||||||
|
|
Nine Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
46.03
|
|
|
$
|
41.99
|
|
|
$
|
4.04
|
|
|
9.6
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
37.98
|
|
|
33.11
|
|
|
4.87
|
|
|
14.7
|
%
|
|||
Depreciation, depletion & amortization
|
|
1.46
|
|
|
2.21
|
|
|
(0.75
|
)
|
|
(33.9
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
39.44
|
|
|
35.32
|
|
|
4.12
|
|
|
11.7
|
%
|
|||
Sales margin
|
|
$
|
6.59
|
|
|
$
|
6.67
|
|
|
$
|
(0.08
|
)
|
|
(1.2
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
7,763
|
|
|
8,705
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
7,910
|
|
|
8,575
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1
The information above excludes revenues and expenses related to freight, which are offsetting and have no impact on sales margin.
|
|||||||||||||||
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 metric tons.
|
•
|
Decreased sales volume of
0.9 million
metric tons, or 10.8%, to 7.8 million metric tons during the nine months ended September 30, 2017 compared to the prior-year period. The decrease in tons sold was driven by lower production, as discussed below, which limited our ability to engage in short-term contract sales and resulted in decreased revenue of
$42 million
during the nine months ended September 30, 2017 compared to the prior-year period.
|
•
|
This decrease was offset partially by an increase in the average year-to-date realized product revenue rate of
$4
per metric ton or
9.6%
during the nine months ended September 30, 2017, compared to the same period in the previous year, which resulted in an increase of $34 million, including the impact of foreign exchange. This increase is predominantly a result of:
|
◦
|
An increase in the Platts 62% Price, which positively affected the realized revenue rate by $18 per metric ton or $141 million.
|
◦
|
This increase was offset partially by a decrease in revenue rate of $10 per metric ton or $79 million due to price and quality adjustments to meet market competition and to compensate for varying quality ores and a reduction in iron content; and
|
◦
|
Higher average Western Australia to China freight rates, a component in some of our contract pricing formulas, unfavorably affected the revenue rate by $3 per metric ton or $21 million.
|
•
|
A decrease in sales volume of
0.9 million
metric tons, which decreased costs by
$35 million
.
|
•
|
This decrease was offset partially by an increase in production costs of
$24 million
or $3 per metric ton, predominantly due to increased mining costs driven by a higher strip ratio and increased administrative costs; and
|
•
|
Unfavorable foreign exchange rate variances of
$10 million
or $1 per metric ton.
|
|
|
2017 Outlook Summary
|
||
Per Sales Ton Information
|
U.S. Iron Ore
1
|
|
Asia Pacific Iron Ore
2
|
|
Cost of goods sold and operating expense rate
|
$70 - $75
|
|
$40 - $45
|
|
Less:
|
|
|
|
|
Freight and venture partners' cost reimbursements expense rate
3
|
$11
|
|
$3
|
|
Depreciation, depletion & amortization rate
|
$4
|
|
$1
|
|
Cash cost of goods sold and operating expense rate
|
$55 - $60
|
|
$36 - $41
|
|
|
|
|
|
|
Sales volume (million tons)
|
18.5
|
|
10.5
|
|
Production volume (million tons)
|
18.5
|
|
11.0
|
|
|
|
|
|
|
1
U.S. Iron Ore tons are reported in long tons of pellets.
|
||||
2
Asia Pacific Iron Ore tons are reported in metric tons of lump and fines.
|
||||
3
The freight and venture partners' cost reimbursements have offsetting amounts in revenue and have no impact on sales margin.
|
•
|
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, the impact of any reduced barriers to trade, the outcomes of recently filed and forthcoming trade cases, reduced market demand and any change to the economic growth rate in China;
|
•
|
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 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;
|
•
|
availability of capital and our ability to maintain adequate liquidity;
|
•
|
our ability to successfully conclude the CCAA process in a manner that minimizes cash outflows and associated liabilities;
|
•
|
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;
|
•
|
uncertainty relating to restructurings in the steel industry and/or affecting the steel industry;
|
•
|
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 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 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;
|
•
|
our ability to obtain the investments necessary for our HBI production plant;
|
•
|
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;
|
•
|
our ability to maintain appropriate relations with unions and employees;
|
•
|
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;
|
•
|
risks related to international operations; and
|
•
|
the potential existence of significant deficiencies or material weakness in our internal control over financial reporting.
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
U.S. Iron Ore
|
|
Asia Pacific Iron Ore
|
|
Total
|
|
U.S. Iron Ore
|
|
Asia Pacific Iron Ore
|
|
Total
|
||||||||||||
Cost of goods sold and operating expenses
|
|
$
|
(1,004.4
|
)
|
|
$
|
(323.9
|
)
|
|
$
|
(1,328.3
|
)
|
|
$
|
(825.8
|
)
|
|
$
|
(321.4
|
)
|
|
$
|
(1,147.2
|
)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Freight and reimbursements
|
|
(159.2
|
)
|
|
(17.8
|
)
|
|
(177.0
|
)
|
|
(104.0
|
)
|
|
(14.0
|
)
|
|
(118.0
|
)
|
||||||
Depreciation, depletion & amortization
|
|
(49.6
|
)
|
|
(11.3
|
)
|
|
(60.9
|
)
|
|
(65.1
|
)
|
|
(19.2
|
)
|
|
(84.3
|
)
|
||||||
Cash cost of goods sold and operating expenses
|
|
$
|
(795.6
|
)
|
|
$
|
(294.8
|
)
|
|
$
|
(1,090.4
|
)
|
|
$
|
(656.7
|
)
|
|
$
|
(288.2
|
)
|
|
$
|
(944.9
|
)
|
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, 2017
|
|
1,301
|
|
|
$
|
6.92
|
|
|
—
|
|
$
|
—
|
|
August 1 - 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
September 1 - 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
|
1,301
|
|
|
$
|
6.92
|
|
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
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
|
|
Amendment to Third Amended Articles of Incorporation of Cliffs, as filed with the Secretary of State of the State of Ohio on August 15, 2017 (filed as Exhibit 3.1 to Cliffs' Form 8-K on August 17, 2017 and incorporated herein by reference)
|
|
|
Indenture, dated as of February 27, 2017, among Cliffs Natural Resources Inc., the guarantors parties thereto, and U.S. Bank National Association, as trustee, including Form of 5.75% Senior Notes due 2025 (filed as Exhibit 4.1 to Cliffs' Form 8-K on August 7, 2017 and incorporated herein by reference)
|
|
|
First Supplemental Indenture, dated as of August 7, 2017, among, Cliffs Natural Resources Inc., the guarantors parties thereto, and U.S. Bank National Association, as trustee, including Form of 5.75% Senior Notes due 2025 (filed as Exhibit 4.2 to Cliffs' Form 8-K on August 7, 2017 and incorporated herein by reference)
|
|
|
Joinder to Registration Rights Agreement, by and among Cliffs Natural Resources Inc., each of the Guarantors named therein and Credit Suisse Securities (USA) LLC, as Representative of the Several Initial Purchasers, dated August 7, 2017 (filed as Exhibit 4.3 to Cliffs' Form 8-K on August 7, 2017 and incorporated herein by reference)
|
|
|
Form of Common Share Certificate (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 23, 2017 (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 23, 2017 (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 23, 2017 (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 & Treasurer of Cleveland-Cliffs Inc., as of October 23, 2017 (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
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
CLEVELAND-CLIFFS INC.
|
||||
|
|
|
|
|
|||
|
|
|
By:
|
|
/s/ R. Christopher Cebula
|
||
|
|
|
|
|
Name:
|
|
R. Christopher Cebula
|
|
|
|
|
|
Title:
|
|
Vice President, Corporate Controller & Chief Accounting Officer
|
|
|
|
|
|
|
|
|
Date:
|
October 23, 2017
|
|
|
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland-Cliffs Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 23, 2017
|
|
By:
|
|
/s/ Lourenco Goncalves
|
|
|
|
|
|
Lourenco Goncalves
|
|
|
|
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland-Cliffs Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 23, 2017
|
|
By:
|
|
/s/ Timothy K. Flanagan
|
|
|
|
|
|
Timothy K. Flanagan
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer & Treasurer
|
(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q.
|
Date:
|
|
October 23, 2017
|
|
|
|
|
|
|
|
By:
|
/s/ Lourenco Goncalves
|
|
|
|
Lourenco Goncalves
|
|
|
|
Chairman, President and Chief Executive Officer
|
(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q.
|
Date:
|
|
October 23, 2017
|
|
|
|
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
|
|
Timothy K. Flanagan
|
|
|
|
Executive Vice President, Chief Financial Officer & Treasurer
|
(A)
|
The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the FMSH Act (30 U.S.C. 814) for which the operator received a citation from MSHA;
|
(B)
|
The total number of orders issued under section 104(b) of the FMSH Act (30 U.S.C. 814(b));
|
(C)
|
The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the FMSH Act (30 U.S.C. 814(d));
|
(D)
|
The total number of imminent danger orders issued under section 107(a) of the FMSH Act (30 U.S.C. 817(a));
|
(E)
|
The total dollar value of proposed assessments from MSHA under the FMSH Act (30 U.S.C. 801 et seq.);
|
(F)
|
Legal actions pending before the Federal Mine Safety and Health Review Commission involving such coal or other mine as of the last day of the period;
|
(G)
|
Legal actions initiated before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period; and
|
(H)
|
Legal actions resolved before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period.
|
|
|
|
Three Months Ended September 30, 2017
|
|||||||||||||||||||||||
|
|
|
(A)
|
|
(B)
|
|
(C)
|
|
(D)
|
|
(E)
|
|
(F)
|
|
(G)
|
|
(H)
|
|||||||||
Mine Name/ MSHA ID No.
|
Operation
|
|
Section 104 S&S Citations
|
|
Section 104(b) Orders
|
|
Section 104(d) Citations & Orders
|
|
Section 107(a) Orders
|
|
Total Dollar Value of MSHA Proposed Assessments (1)
|
|
Legal Actions Pending as of Last Day of Period
|
|
Legal Actions Initiated During Period
|
|
Legal Actions Resolved During Period
|
|||||||||
Tilden / 2000422
|
Iron Ore
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,212
|
|
|
7
|
|
(2)
|
4
|
|
|
19
|
|
Empire / 2001012
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Northshore Plant / 2100831
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
(3)
|
—
|
|
|
3
|
|
|
Northshore Mine / 2100209
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Hibbing / 2101600
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
(4)
|
2
|
|
|
5
|
|
|
United Taconite Plant / 2103404
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
(5)
|
2
|
|
|
—
|
|
|
United Taconite Mine / 2103403
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
(1)
|
Amounts included under the heading “Total Dollar Value of MSHA Proposed Assessments” are the total dollar amounts for proposed assessments received from MSHA for the three months ended
September 30, 2017
.
|
(2)
|
This number consists of 6 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules and 1 pending legal action related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules.
|
(3)
|
This number consists of 4 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
(4)
|
This number consists of 5 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
(5)
|
This number consists of 7 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|