Ohio
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34-1464672
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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200 Public Square, Suite 3300, Cleveland, Ohio
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44114-2315
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Shares, par value $0.125 per share
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New York Stock Exchange
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TABLE OF CONTENTS
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Page Number
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DEFINITIONS
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PART I
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Item 1.
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Business
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Executive Officers of the Registrant
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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SIGNATURES
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Abbreviation or acronym
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Term
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ABL Facility
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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
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Adjusted EBITDA
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EBITDA excluding certain items such as extinguishment/restructuring of debt, impacts of discontinued operations, foreign currency exchange remeasurement, severance and contractor termination costs, certain supplies inventory write-offs, impairment of other long-lived assets and intersegment corporate allocations of SG&A costs
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AG
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Autogenous Grinding
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AK Steel
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AK Steel Corporation (including its facilities in Ashland, Ohio, Middletown, Ohio and Dearborn, Michigan)
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Algoma
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Essar Steel Algoma Inc.
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Amended 2015 Equity Plan
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Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan
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APBO
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Accumulated Postretirement Benefit Obligation
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ArcelorMittal
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ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco GP, as well as, many other subsidiaries)
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ArcelorMittal USA
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ArcelorMittal USA LLC (including many of its United States affiliates, subsidiaries and representatives. References to ArcelorMittal USA comprise all such relationships unless a specific ArcelorMittal USA entity is referenced)
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ALJ
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Administrative Law Judge
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AMT
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Alternative Minimum Tax
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Updates
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Bloom Lake
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The Bloom Lake Iron Ore Mine Limited Partnership
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Bloom Lake Group
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Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC
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BNSF
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Burlington Northern Santa Fe, LLC
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Canadian Entities
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Bloom Lake Group, Wabush Group and certain other wholly-owned subsidiaries
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CCAA
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Companies' Creditors Arrangement Act (Canada)
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CERCLA
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Comprehensive Environmental Response, Compensation and Liability Act of 1980
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CFR
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Cost and freight
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CLCC
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Cliffs Logan County Coal LLC
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Clean Water Act
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Federal Water Pollution Control Act
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CN
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Canadian National Railway Company
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CO
2
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Carbon Dioxide
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Codification
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FASB Accounting Standards Codification
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Compensation Committee
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Compensation and Organization Committee of Cliffs' Board of Directors
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CPP
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Clean Power Plan
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Directors’ Plan
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Cliffs Natural Resources Inc. Amended and Restated 2014 Nonemployee Directors’ Compensation Plan
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Dodd-Frank Act
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Dodd-Frank Wall Street Reform and Consumer Protection Act
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DR-grade pellets
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Direct Reduction pellets
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EAF
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Electric Arc Furnace
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EBITDA
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Earnings before interest, taxes, depreciation and amortization
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Empire
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Empire Iron Mining Partnership
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EPA
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U.S. Environmental Protection Agency
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EPS
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Earnings per share
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ERM
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Enterprise Risk Management
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Exchange Act
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Securities Exchange Act of 1934, as amended
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FASB
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Financial Accounting Standards Board
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Fe
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Iron
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FERC
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Federal Energy Regulatory Commission
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FeT
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Total Iron
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FIP
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Federal Implementation Plan
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FMSH Act
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U.S. Federal Mine Safety and Health Act 1977, as amended
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GAAP
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Accounting principles generally accepted in the U.S.
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GHG
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Greenhouse gas
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Abbreviation or acronym
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Term
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HBI
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Hot Briquetted Iron
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Hibbing
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Hibbing Taconite Company, an unincorporated joint venture
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Koolyanobbing
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Collective term for the operating deposits at Koolyanobbing, Mount Jackson and Windarling
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LIBOR
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London Interbank Offered Rate
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LIFO
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Last-in, first-out
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Long ton
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2,240 pounds
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LS&I
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Lake Superior & Ishpeming Railroad Company
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LTVSMC
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LTV Steel Mining Company
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Metric ton
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2,205 pounds
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MISO
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Midcontinent Independent System Operator, Inc.
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MMBtu
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Million British Thermal Units
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MPCA
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Minnesota Pollution Control Agency
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MPSC
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Michigan Public Service Commission
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Monitor
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FTI Consulting Canada Inc.
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NAAQS
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National Ambient Air Quality Standards
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Net ton
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2,000 pounds
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NO
2
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Nitrogen dioxide
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NO
x
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Nitrogen oxide
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Northshore
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Northshore Mining Company
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NPDES
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National Pollutant Discharge Elimination System, authorized by the U.S. Clean Water Act
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NYSE
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New York Stock Exchange
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Oak Grove
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Oak Grove Resources, LLC
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OPEB
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Other postretirement employment benefits
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OPEB cap
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Medical premium maximums
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PBO
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Projected benefit obligation
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Pinnacle
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Pinnacle Mining Company, LLC
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Platts 62% Price
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Platts IODEX 62% Fe Fines Spot Price
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Preferred Share
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7.00% Series A Mandatory Convertible Preferred Stock, Class A, without par value
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ROA
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Return on asset
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S&P
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Standard & Poor's Rating Services, a division of Standard & Poor's Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., and its successors
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SEC
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U.S. Securities and Exchange Commission
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SG&A
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Selling, general and administrative
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Seneca
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Seneca Coal Resources, LLC
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Silver Bay Power
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Silver Bay Power Company
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SIP
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State Implementation Plan
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SO
2
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Sulfur dioxide
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SSR
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System Support Resource
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STRIPS
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Separate Trading of Registered Interest and Principal of Securities
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Tilden
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Tilden Mining Company L.C.
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TMDL
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Total Maximum Daily Load
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TSR
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Total Shareholder Return
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United Taconite
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United Taconite LLC
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U.S.
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United States of America
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U.S. Steel
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United States Steel Corporation and all subsidiaries
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USW
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United Steelworkers
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VEBA
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Voluntary Employee Benefit Association trusts
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VWAP
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Volume Weighted Average Price
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Wabush
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Wabush Mines Joint Venture
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Wabush Group
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Wabush Iron Co. Limited and Wabush Resources Inc., and certain of their 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
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2012 Equity Plan
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Cliffs Natural Resources Inc. Amended and Restated 2012 Incentive Equity Plan
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2015 Equity Plan
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Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan
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Item 1.
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Business
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Name
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Age
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Position(s) Held
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Lourenco Goncalves
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60
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Chairman, President and Chief Executive Officer (August 2014 - present); and Chairman, President and Chief Executive Officer of Metals USA Holdings Corp., an
American manufacturer and processor of steel and other metals (May 2006 - April
2013).
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Terry G. Fedor
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53
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Executive Vice President, U.S. Iron Ore (January 2014 - present); and Vice
President, U.S. Iron Ore Operations (February 2011 - January 2014).
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Timothy K. Flanagan
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40
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Executive Vice President, Chief Financial Officer (January 2017 - present); Treasurer (March 2016
-
December 2017
); Vice President, Corporate Controller and Chief Accounting Officer (March 2012 - December 2016); and Assistant Controller (February 2010 - March 2012).
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James D. Graham
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52
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Executive Vice President (November 2014 - present); Chief Legal Officer (March 2013 - present); Secretary (March 2014 - present); Vice President (January 2011 - October 2014); and General Counsel - Global Operations (January 2011 - March 2013).
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Maurice D. Harapiak
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56
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Executive Vice President, Human Resources (March 2014 - present); Chief Administration Officer (January 2018 - present); and Regional Director, Human Resources - Barrick Gold of North America, a gold mining company (November
2011 - March 2014).
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Terrence R. Mee
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48
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Executive Vice President, Global Commercial (October 2014 - present); Vice President, Global Iron Ore Sales (February 2014 - October 2014); Senior Vice President, Global Iron Ore Sales (March 2012 - February 2014); and Senior Vice President, Global Iron Ore and Metallic Sales (January 2011 - March 2012).
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Clifford T. Smith
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58
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Executive Vice President, Business Development (April 2015 - present); Executive Vice President, Seaborne Iron Ore (January 2014 - April 2015); Executive Vice President, Global Operations (July 2013 - January 2014); Executive Vice President, Global Business Development (March 2013 - July 2013); and Senior Vice President, Global Business Development (January 2011 - March
2013).
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R. Christopher Cebula
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47
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Vice President, Corporate Controller & Chief Accounting Officer (February 2017 - present); Senior Director, Corporate Financial Planning & Analysis (April 2013 - February 2017); Senior Director, Enterprise Risk Management (April 2010 - March 2013).
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Item 1A.
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Risk Factors
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I.
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ECONOMIC AND MARKET RISKS
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II.
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REGULATORY RISKS
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III.
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FINANCIAL RISKS
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IV.
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OPERATIONAL RISKS
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V.
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DEVELOPMENT AND SUSTAINABILITY RISKS
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•
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completing infrastructure and construction work and the completion of commissioning and integration of all of the systems comprising our HBI production plant;
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VI.
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HUMAN CAPITAL RISKS
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Property
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Date of Latest Economic
Reserve Analysis
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U.S. Iron Ore
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Tilden
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2015
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Hibbing
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2015
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Northshore
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2015
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United Taconite
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2016
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Asia Pacific Iron Ore
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Koolyanobbing
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2013
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U.S. Iron Ore Mineral Reserves
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as of December 31, 2017
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(In Millions of Long Tons)
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Proven
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Probable
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Proven & Probable
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Saleable Product
2,3
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Previous Year
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Property
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Cliffs Share
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Tonnage
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% Grade
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Tonnage
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% Grade
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Tonnage
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% Grade
5
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Process Recovery
4
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Tonnage
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Proven & Probable Crude Ore
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Saleable Product
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Tilden
1
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100
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%
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263.6
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34.7
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82.7
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33.9
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346.3
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34.5
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37%
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129.2
|
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367.8
|
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136.3
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Hibbing
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23
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%
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154.0
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19.6
|
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24.7
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19.6
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178.7
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19.6
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26%
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47.2
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233.0
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61.7
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Northshore
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100
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%
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235.8
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24.9
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557.4
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24.2
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793.2
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24.4
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32%
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255.9
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808.0
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261.1
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United Taconite
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100
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%
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413.6
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22.6
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415.5
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21.9
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829.1
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22.2
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32%
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264.6
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842.8
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269.3
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Totals
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1,067.0
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1,080.3
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2,147.3
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696.9
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2,251.6
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728.4
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1
Tilden hematite reported grade is percent FeT; all other properties are percent magnetic iron. During 2017, our ownership interest in Tilden increased to 100%.
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2
Saleable product is a standard pellet containing 60% to 66% Fe calculated from both proven and probable mineral reserves.
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3
Saleable product is reported on a dry basis; shipped products typically contain 1% to 4% moisture.
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4
Process recovery includes all factors for converting crude ore tonnage to saleable product.
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5
Cutoff grades are 15% magnetic iron for Hibbing, 17% for United Taconite, 19% for Northshore. Cutoff for Tilden hematite is 25% FeT.
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Asia Pacific Iron Ore Mineral Reserves
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as of December 31, 2017
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(In Millions of Metric Tons)
1
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Proven
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Probable
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Proven & Probable
|
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Previous Year Total
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||||||
Property
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Cliffs Share
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Tonnage
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% Fe
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Tonnage
3
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% Fe
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Tonnage
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% Fe
2
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Tonnage
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Koolyanobbing
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100%
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1.7
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56.5
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8.0
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59.6
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9.7
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59.1
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42.7
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1
Tonnages reported are saleable product reported on a dry basis; shipped products contain approximately 5% moisture.
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2
Cutoff grade is 54% FeT.
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3
Tonnage decreased due to low grade pellet discount increase which reduced the amount of economic tonnage available.
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Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
2017
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2016
|
||||||||||||
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High
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Low
|
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High
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Low
|
||||||||
First Quarter
|
|
$
|
12.37
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|
|
$
|
7.70
|
|
|
$
|
3.75
|
|
|
$
|
1.20
|
|
Second Quarter
|
|
9.06
|
|
|
5.56
|
|
|
5.83
|
|
|
2.77
|
|
||||
Third Quarter
|
|
8.77
|
|
|
6.45
|
|
|
8.45
|
|
|
5.19
|
|
||||
Fourth Quarter
|
|
7.73
|
|
|
5.60
|
|
|
10.90
|
|
|
4.91
|
|
||||
Year
|
|
12.37
|
|
|
5.56
|
|
|
10.90
|
|
|
1.20
|
|
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Cleveland-Cliffs Inc.
|
Return %
|
|
—
|
|
|
(30.17)
|
|
(71.56)
|
|
(77.87)
|
|
432.28
|
|
(14.27)
|
|
Cum $
|
|
100.00
|
|
|
69.83
|
|
19.86
|
|
4.39
|
|
23.39
|
|
20.06
|
S&P 500 Index - Total Returns
|
Return %
|
|
—
|
|
|
32.36
|
|
13.65
|
|
1.38
|
|
11.93
|
|
21.80
|
|
Cum $
|
|
100.00
|
|
|
132.36
|
|
150.43
|
|
152.50
|
|
170.70
|
|
207.91
|
S&P Total Market Index
|
Return %
|
|
—
|
|
|
33.37
|
|
12.43
|
|
0.46
|
|
12.62
|
|
21.13
|
|
Cum $
|
|
100.00
|
|
|
133.37
|
|
149.95
|
|
150.64
|
|
169.65
|
|
205.49
|
S&P Metals and Mining
|
Return %
|
|
—
|
|
|
(5.35)
|
|
(25.63)
|
|
(50.76)
|
|
105.09
|
|
20.61
|
|
Cum $
|
|
100.00
|
|
|
94.65
|
|
70.39
|
|
34.66
|
|
71.09
|
|
85.74
|
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
|
|||
October 1 - 31, 2017
|
|
1,259
|
|
|
$
|
7.15
|
|
|
—
|
|
—
|
November 1 - 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
—
|
December 1 - 31, 2017
|
|
735,387
|
|
|
$
|
6.71
|
|
|
—
|
|
—
|
Total
|
|
736,646
|
|
|
$
|
6.71
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|||
1
These shares were delivered to us to satisfy tax withholding obligations due upon the vesting or payment of stock awards.
|
Item 6.
|
Selected Financial Data
|
* Management determined as of March 31, 2015, that our North American Coal operating segment met the criteria to be classified as held for sale under
ASC 205, Presentation of Financial Statements.
The North American Coal segment continued to meet the criteria throughout 2015 until we sold our North American Coal operations during the fourth quarter of 2015. As such, all current and historical North American Coal operating segment results are included in our financial statements and classified within discontinued operations. On January 27, 2015, we announced that Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC, which we refer to collectively as the Bloom Lake Group, commenced restructuring proceedings, in Montreal, Quebec under the CCAA to address the Bloom Lake Group's immediate liquidity issues and to preserve and protect its assets for the benefit of all stakeholders while restructuring and/or sale options were explored. At that time, the Bloom Lake Group was no longer generating revenues and was not able to meet its obligations as they came due. As part of the CCAA process, the court approved the appointment of a Monitor and certain other financial advisors. Additionally, on May 20, 2015, the Wabush Iron Co. Limited and Wabush Resources Inc., and certain of their 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, which we refer to collectively as the Wabush Group, commenced restructuring proceedings in Montreal, Quebec under the CCAA. The Wabush Group was no longer generating revenues and was not able to meet its obligations as they came due. As a result of this action, the protection granted to the Bloom Lake Group was extended to include the Wabush Group to facilitate the reorganization of each of their businesses and operations. The Monitor appointed by the court in the CCAA proceeding for the Bloom Lake Group has also been appointed by the court as the Monitor in the CCAA proceeding for the Wabush Group. Financial results prior to the respective deconsolidations of the Bloom Lake and Wabush Groups and subsequent expenses directly associated with the Bloom Lake and Wabush Groups and certain other wholly-owned Canadian subsidiaries are included in our financial statements and classified within discontinued operations.
|
|||||||||||||||||||
(a) During 2017, we issued 63.25 million common shares in an underwritten public offering. We received net proceeds of $661.3 million at a public offering price of $10.75 per common share. The net proceeds from the issuance of our common shares and the net proceeds from the issuance of $1.075 billion 5.75% 2025 Senior Notes were used to redeem in full all of our outstanding 8.25% 2020 First Lien Notes, 8.00% 2020 1.5 Lien Notes and 7.75% 2020 Second Lien Notes. Additionally, through tender offers, we purchased certain of our 5.90% 2020 Senior Notes, our 4.80% 2020 Senior Notes and our 4.875% 2021 Senior Notes. The aggregate principal amount outstanding of debt redeemed was $1.611 billion, which resulted in a loss on extinguishment of $165.4 million. During 2017, our ownership interest in Empire increased to 100% as we reached an agreement to distribute the noncontrolling interest net assets of $132.7 million to ArcelorMittal, in exchange for its interest in Empire. We also acquired the remaining 15% equity interest in Tilden Mining Company L.C. owned by United States Steel Corporation for $105.0 million. Prior to the end of the year Public Law 115–97, commonly known as the “Tax Cuts and Jobs Act”, was signed into law and among other items repeals the corporate AMT and will reduce the federal corporate tax rate to 21% for tax years beginning January 1, 2018. Along with the repeal of AMT, Public Law 115–97 provides that existing AMT credit carryovers are refundable beginning with the filing of the calendar year 2018 tax return. We have $235.3 million of AMT credit carryovers that are expected to be fully refunded between 2019 and 2022.
|
|||||||||||||||||||
(b) During 2016, we recorded a net gain of $166.3 million related to debt restructuring activities that occurred throughout the year, including the issuance of $218.5 million aggregate principal of 8.00% 2020 1.5 Lien Notes in exchange for $512.2 of our existing senior notes, the issuance of an aggregate of 8.2 million common shares in exchange for $56.9 million aggregate principal amount of our existing senior notes and a loss on the redemption of the full $283.6 million outstanding of our 3.95% 2018 Senior Notes at a total redemption price of $301.0 million. We also issued 44.4 million common shares in an underwritten public offering. We received net proceeds of $287.6 million at a public offering price of $6.75 per common share.
|
|||||||||||||||||||
(c) On January 27, 2015, we announced the Bloom Lake Group commenced restructuring proceedings in Montreal, Quebec under the CCAA. Additionally, on May 20, 2015, the Wabush Group commenced restructuring proceedings in Montreal, Quebec under the CCAA. As a result of this action, the CCAA protections granted to the Bloom Lake Group was extended to include the Wabush Group to facilitate the reorganization of each of their businesses and operations. Consistent with our strategy to extract maximum value from our current assets, on December 22, 2015, we sold our equity interests in all the remaining North American Coal operations to Seneca. The sale included the Pinnacle mine in West Virginia and the Oak Grove mine in Alabama. Additionally, Seneca may pay Cliffs an earn-out of up to $50 million contingent upon the terms of a revenue sharing agreement, which extends through the year 2020. As noted above, all current and historical North American Coal operating segment results are included in our financial statements and classified within discontinued operations.
|
|||||||||||||||||||
(d) During 2014, we recorded an impairment of goodwill and other long-lived assets of $635.5 million. The goodwill impairment charge of $73.5 million related to our Asia Pacific Iron Ore reporting unit. There were also other long-lived asset impairment charges of $562.0 million related to our continuing operations including the Asia Pacific Iron Ore operating segment and our Other reportable segments. The other long-lived asset impairment charges which related to our discontinued operations were $8,394.4 million related to our Wabush operation and Bloom Lake operation within our Eastern Canadian Iron Ore operating segment, and our CLCC thermal operation, Oak Grove operation and Pinnacle operation within our North American Coal operating segment, along with impairments charged to reporting units within our other reportable segments. The impairment charges were primarily a result of changes in life-of-mine cash flows due to declining pricing for both global iron ore and low-volatile metallurgical coal, which impacts our estimate of long-term pricing, along with changes in strategic focus including exploratory phases of possible divestiture of the operations as the new Chief Operating Decision Maker viewed Eastern Canadian Iron Ore, Asia Pacific Iron Ore, North American Coal and Ferroalloys as non-core assets. The CLCC assets were sold in the fourth quarter of 2014 on December 31, 2014, resulting in a loss on sale of $419.6 million. As noted above, all current and historical North American Coal operating segment results are included in our financial statements and classified within discontinued operations.
|
|||||||||||||||||||
(e) Upon performing our annual goodwill impairment test in the fourth quarter of 2013, a goodwill impairment charge of $80.9 million was recorded for our Cliffs Chromite Ontario and Cliffs Chromite Far North reporting units within our Ferroalloys operating segment. We also recorded other long-lived asset impairment charges of $169.9 million, of which $154.6 million relates to our Wabush reporting unit within our Eastern Canadian Iron Ore operating segment to reduce those assets to their estimated fair value as of December 31, 2013. These reporting units were included within the entities under the CCAA filing. As noted above, financial results prior to the respective deconsolidations of the Bloom Lake and Wabush Groups and subsequent expenses directly associated with the Canadian Entities are included in our financial statements and classified within discontinued operations.
|
|||||||||||||||||||
(f) On March 20, 2013, our Board of Directors declared a cash dividend of $13.6111 per preferred share, which is equivalent to $0.34 per depositary share. The cash dividend was paid on May 1, 2013, to our preferred shareholders of record as of the close of business on April 15, 2013. On May 7, 2013, September 9, 2013, and November 11, 2013, our Board of Directors declared a quarterly cash dividend of $17.50 per preferred share, which is equivalent to $0.44 per depositary share. The cash dividends were paid on August 1, 2013, November 1, 2013, and February 3, 2014 to our preferred shareholders of record as of the close of business on July 15, 2013, October 15, 2013, and January 15, 2014, respectively. On February 11, 2014, May 13, 2014, September 8, 2014, and November 19, 2014, our Board of Directors declared a quarterly cash dividend of $17.50 per preferred share, which is equivalent to $0.44 per depositary share. The cash dividends were paid on May 1, 2014, August 1, 2014, November 3, 2014, and February 2, 2015, to our preferred shareholders of record as of the close of business on April 15, 2014, July 15, 2014, October 15, 2014, and January 15, 2015, respectively. On March 27, 2015, July 1, 2015, and September 10, 2015, our Board of Directors declared the quarterly cash dividend of $17.50 per preferred share, which is equivalent to $0.44 per depositary share. The cash dividend was paid on May 1, 2015, August 3, 2015, and November 2, 2015 to our shareholders of record as of the close of business on April 15, 2015, July 15, 2015, and October 15, 2015, respectively. On January 4, 2016, we announced that our Board of Directors determined the final quarterly dividend of our preferred shares would not be paid in cash, but instead, pursuant to the terms of the preferred shares, the conversion rate was increased such that holders of the preferred shares received additional common shares in lieu of the accrued dividend at the time of the mandatory conversion of the preferred shares on February 1, 2016. The number of our common shares in the aggregate issued in lieu of the dividend was 1.3 million. This resulted in an effective conversion rate of 0.9052 common shares, rather than 0.8621 common shares, per depositary share, each representing 1/40th of a preferred share. Upon conversion on February 1, 2016, an aggregate of 26.5 million common shares were issued, representing 25.2 million common shares issuable upon conversion and 1.3 million that were issued in lieu of a final cash dividend.
|
(g) On February 11, 2013, our Board of Directors approved a reduction to our quarterly cash dividend rate by 76% to $0.15 per share. The decreased dividend of $0.15 per share was paid on March 1, 2013, June 3, 2013, September 3, 2013, and December 2, 2013 to our common shareholders of record as of the close of business on February 22, 2013, May 17, 2013, August 15, 2013, and November 22, 2013, respectively. Additionally, in 2014, the dividend of $0.15 per share was paid on March 3, 2014, June 3, 2014, September 2, 2014 and December 1, 2014 to our common shareholders of record as of the close of business on February 21, 2014, May 23, 2014, August 15, 2014, and November 15, 2014, respectively. On January 26, 2015, we announced that our Board of Directors had decided to eliminate the quarterly dividend of $0.15 per share on our common shares. The decision was applicable to the first quarter of 2015 and all subsequent quarters.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
(In Millions)
|
||||||||||
|
2017
|
|
2016
|
|
Variance
Favorable/
(Unfavorable)
|
||||||
Interest expense, net
|
$
|
(132.0
|
)
|
|
$
|
(200.5
|
)
|
|
$
|
68.5
|
|
Gain (loss) on extinguishment/restructuring of debt
|
(165.4
|
)
|
|
166.3
|
|
|
(331.7
|
)
|
|||
Other non-operating income
|
3.2
|
|
|
0.4
|
|
|
2.8
|
|
|||
|
$
|
(294.2
|
)
|
|
$
|
(33.8
|
)
|
|
$
|
(260.4
|
)
|
|
(In Millions)
|
||||||||||
|
2016
|
|
2015
|
|
Variance
Favorable/
(Unfavorable)
|
||||||
Revenues from product sales and services
|
$
|
2,109.0
|
|
|
$
|
2,013.3
|
|
|
$
|
95.7
|
|
Cost of goods sold and operating expenses
|
(1,719.7
|
)
|
|
(1,776.8
|
)
|
|
57.1
|
|
|||
Sales margin
|
$
|
389.3
|
|
|
$
|
236.5
|
|
|
$
|
152.8
|
|
Sales margin %
|
18.5
|
%
|
|
11.7
|
%
|
|
6.8
|
%
|
|
(In Millions)
|
||||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
Income tax benefit (expense)
|
$
|
12.2
|
|
|
$
|
(169.3
|
)
|
|
$
|
181.5
|
|
Effective tax rate
|
(5.9
|
)%
|
|
54.1
|
%
|
|
(60.0
|
)%
|
|
(In Millions)
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net Income
|
$
|
363.1
|
|
|
$
|
199.3
|
|
Less:
|
|
|
|
||||
Interest expense, net
|
(132.0
|
)
|
|
(200.5
|
)
|
||
Income tax benefit
|
252.4
|
|
|
12.2
|
|
||
Depreciation, depletion and amortization
|
(87.7
|
)
|
|
(115.4
|
)
|
||
Total EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
Less:
|
|
|
|
||||
Gain (loss) on extinguishment of debt
|
$
|
(165.4
|
)
|
|
$
|
166.3
|
|
Impact of discontinued operations
|
(18.7
|
)
|
|
(19.9
|
)
|
||
Foreign exchange remeasurement
|
11.4
|
|
|
(16.8
|
)
|
||
Severance and contractor termination costs
|
—
|
|
|
(0.1
|
)
|
||
Supplies inventory adjustment
|
(1.8
|
)
|
|
—
|
|
||
Total Adjusted EBITDA
|
$
|
504.9
|
|
|
$
|
373.5
|
|
|
|
|
|
||||
EBITDA:
|
|
|
|
||||
U.S. Iron Ore
|
$
|
534.9
|
|
|
$
|
342.4
|
|
Asia Pacific Iron Ore
|
40.7
|
|
|
128.3
|
|
||
Other (including discontinued operations)
|
(245.2
|
)
|
|
32.3
|
|
||
Total EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
U.S. Iron Ore
|
$
|
559.4
|
|
|
$
|
359.6
|
|
Asia Pacific Iron Ore
|
50.4
|
|
|
132.9
|
|
||
Other
|
(104.9
|
)
|
|
(119.0
|
)
|
||
Total Adjusted EBITDA
|
$
|
504.9
|
|
|
$
|
373.5
|
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Changes due to:
|
|
|
||||||||||||||||||||||
|
|
Year Ended
December 31, |
|
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
|
|
$
|
1,866.0
|
|
|
$
|
1,554.5
|
|
|
$
|
228.2
|
|
|
$
|
36.7
|
|
|
$
|
—
|
|
|
$
|
46.6
|
|
|
$
|
311.5
|
|
Cost of goods sold and operating expenses
|
|
(1,400.6
|
)
|
|
(1,278.8
|
)
|
|
(111.5
|
)
|
|
(18.4
|
)
|
|
54.7
|
|
|
(46.6
|
)
|
|
(121.8
|
)
|
|||||||
Sales margin
|
|
$
|
465.4
|
|
|
$
|
275.7
|
|
|
$
|
116.7
|
|
|
$
|
18.3
|
|
|
$
|
54.7
|
|
|
$
|
—
|
|
|
$
|
189.7
|
|
|
|
Year Ended
December 31, |
|
|
|
|
|||||||||
Per Long Sales Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
88.03
|
|
|
$
|
75.71
|
|
|
$
|
12.32
|
|
|
16.3
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
59.55
|
|
|
55.97
|
|
|
3.58
|
|
|
6.4
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.56
|
|
|
4.61
|
|
|
(1.05
|
)
|
|
(22.8
|
)%
|
|||
Total cost of goods sold and operating expense rate
|
|
63.11
|
|
|
60.58
|
|
|
2.53
|
|
|
4.2
|
%
|
|||
Sales margin
|
|
$
|
24.92
|
|
|
$
|
15.13
|
|
|
$
|
9.79
|
|
|
64.7
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
18,683
|
|
|
18,224
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
25,542
|
|
|
23,416
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
18,776
|
|
|
15,982
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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
$12.32
per long ton or
16.3%
during the year ended December 31, 2017, compared to 2016, which resulted in an increase of
$228.2 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 $176 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 $5 per long ton or $100 million; and
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $5 per long ton or $94 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 $5 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 $63 million.
|
•
|
Higher sales volumes of
0.5 million
long tons during the year ended December 31, 2017, which resulted in increased revenues of
$36.7 million
due to:
|
◦
|
Increased demand from a customer, providing additional sales volume of 1.8 million long tons, compared to the prior year when the customer had sufficient inventory due to the idle of one of its facilities and additional suppliers;
|
◦
|
Increased demand from a customer, providing additional sales volume of 1.3 million long tons, resulting from the fourth quarter 2015 termination of its contract causing a nine-month gap in sales to that customer; and
|
◦
|
An increase in exports to Asia in order to offset a fourth quarter reduction in domestic nomination from a major customer and fewer domestic spot contracts, providing additional sales volume of 0.9 million long tons compared to 2016.
|
◦
|
These increases were offset partially by 2.8 million long tons that were sold in 2016 on separate spot contracts with two customers and were not renewed; and
|
◦
|
Decreased sales to a customer due to timing of payments and a lower 2017 nomination, resulting in a decrease in sales volume of 0.8 million long tons.
|
•
|
Higher spending on repairs and maintenance of $44 million or $2 per long ton, higher profit sharing and benefit costs of $35 million or $2 per long ton, and higher energy rates for natural gas, diesel and electricity of $23 million or $1 per long ton; and
|
•
|
Increased sales volumes as discussed above which resulted in increased costs of $
18 million
period-over-period.
|
•
|
These increases were offset partially by decreased idle costs of
$55 million
or $3 per long ton due to the idle of the United Taconite and Northshore mines during the prior year.
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Change due to:
|
|
|
||||||||||||||||||||||
|
|
Year Ended
December 31, |
|
Revenue
and cost rate
|
|
Sales volume
|
|
Exchange rate
|
|
Freight and reimburse-ment
|
|
Total change
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
|
|
|
|
|||||||||||||||||||
Revenues from product sales and services
|
|
$
|
464.2
|
|
|
$
|
554.5
|
|
|
$
|
(4.9
|
)
|
|
$
|
(81.0
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(90.3
|
)
|
Cost of goods sold and operating expenses
|
|
(427.9
|
)
|
|
(440.9
|
)
|
|
(45.5
|
)
|
|
69.3
|
|
|
(11.9
|
)
|
|
1.1
|
|
|
13.0
|
|
|||||||
Sales margin
|
|
$
|
36.3
|
|
|
$
|
113.6
|
|
|
$
|
(50.4
|
)
|
|
$
|
(11.7
|
)
|
|
$
|
(15.2
|
)
|
|
$
|
—
|
|
|
$
|
(77.3
|
)
|
|
|
Year Ended
December 31, |
|
|
|
|
|||||||||
Per Metric Sales Ton Information
|
|
2017
|
|
2016
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
45.31
|
|
|
$
|
45.85
|
|
|
$
|
(0.54
|
)
|
|
(1.2
|
)%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
40.15
|
|
|
33.94
|
|
|
6.21
|
|
|
18.3
|
%
|
|||
Depreciation, depletion & amortization
|
|
1.46
|
|
|
2.16
|
|
|
(0.70
|
)
|
|
(32.4
|
)%
|
|||
Total cost of goods sold and operating expense rate
|
|
41.61
|
|
|
36.10
|
|
|
5.51
|
|
|
15.3
|
%
|
|||
Sales margin
|
|
$
|
3.70
|
|
|
$
|
9.75
|
|
|
$
|
(6.05
|
)
|
|
(62.1
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
9,812
|
|
|
11,642
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
10,113
|
|
|
11,839
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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
1.8 million
metric tons, or 15.7%, to 9.8 million metric tons. The decrease in tons sold was primarily driven by lower production, as discussed below, and unfavorable market conditions which limited the economic value on short-term contract sales and resulted in decreased revenue of
$81.0 million
.
|
•
|
A decrease in the average year-to-date realized product revenue rate of
$0.54
per metric ton or
1.2%
, which resulted in a decrease of
$8 million
, including the impact of foreign exchange. This increase is predominantly a result of:
|
◦
|
A decrease in revenue rate of $10 per metric ton or $95 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, which unfavorably affected the revenue rate by $3 per metric ton or $26 million.
|
◦
|
This decrease was offset partially by an increase in the Platts 62% Price, which positively affected the realized revenue rate by $12 per metric ton or $120 million.
|
•
|
A decrease in sales volume of
1.8 million
metric tons, which decreased costs by
$69.3 million
.
|
•
|
This decrease was offset partially by an increase in production costs of $37.6 million or $4 per metric ton, predominantly due to increased mining costs driven by a higher strip ratio, increased administrative costs and higher rail and port rates;
|
•
|
An unfavorable asset retirement obligation adjustment of $7.9 million or $1 per long ton driven by an increase in expected costs to be incurred at the end of life of mine; and
|
•
|
Unfavorable foreign exchange rate variances of
$11.9 million
or $1 per metric ton.
|
|
(In Millions)
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Net Income (Loss)
|
$
|
199.3
|
|
|
$
|
(748.4
|
)
|
Less:
|
|
|
|
||||
Interest expense, net
|
(200.5
|
)
|
|
(231.4
|
)
|
||
Income tax benefit (expense)
|
12.2
|
|
|
(163.3
|
)
|
||
Depreciation, depletion and amortization
|
(115.4
|
)
|
|
(134.0
|
)
|
||
EBITDA
|
$
|
503.0
|
|
|
$
|
(219.7
|
)
|
Less:
|
|
|
|
||||
Gain on extinguishment/restructuring of debt
|
$
|
166.3
|
|
|
$
|
392.9
|
|
Impact of discontinued operations
|
(19.9
|
)
|
|
(892.0
|
)
|
||
Foreign exchange remeasurement
|
(16.8
|
)
|
|
16.3
|
|
||
Severance and contractor termination costs
|
(0.1
|
)
|
|
(10.2
|
)
|
||
Supplies inventory write-off
|
—
|
|
|
(16.3
|
)
|
||
Impairment of other long-lived assets
|
—
|
|
|
(3.3
|
)
|
||
Total Adjusted EBITDA
|
$
|
373.5
|
|
|
$
|
292.9
|
|
|
|
|
|
||||
EBITDA:
|
|
|
|
||||
U.S. Iron Ore
|
$
|
342.4
|
|
|
$
|
317.6
|
|
Asia Pacific Iron Ore
|
128.3
|
|
|
35.3
|
|
||
Other (including discontinued operations)
|
32.3
|
|
|
(572.6
|
)
|
||
Total EBITDA
|
$
|
503.0
|
|
|
$
|
(219.7
|
)
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
U.S. Iron Ore
|
$
|
359.6
|
|
|
$
|
352.1
|
|
Asia Pacific Iron Ore
|
132.9
|
|
|
32.7
|
|
||
Other
|
(119.0
|
)
|
|
(91.9
|
)
|
||
Total Adjusted EBITDA
|
$
|
373.5
|
|
|
$
|
292.9
|
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Change due to
|
|
|||||||||||||||||||||||
|
|
Year Ended
December 31, |
|
Revenue and cost rate
|
|
Sales volume
|
|
Idle cost/production volume variance
|
|
Freight and reimburse-ment
|
|
Total change
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|
|
|||||||||||||||||||
Revenues from product sales and services
|
|
$
|
1,554.5
|
|
|
$
|
1,525.4
|
|
|
$
|
(62.0
|
)
|
|
$
|
73.5
|
|
|
$
|
—
|
|
|
$
|
17.6
|
|
|
$
|
29.1
|
|
Cost of goods sold and operating expenses
|
|
(1,278.8
|
)
|
|
(1,298.3
|
)
|
|
84.7
|
|
|
(55.4
|
)
|
|
7.8
|
|
|
(17.6
|
)
|
|
19.5
|
|
|||||||
Sales margin
|
|
$
|
275.7
|
|
|
$
|
227.1
|
|
|
$
|
22.7
|
|
|
$
|
18.1
|
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
$
|
48.6
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|||||||||
Per Long Sales Ton Information
|
|
2016
|
|
2015
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
75.71
|
|
|
$
|
79.12
|
|
|
$
|
(3.41
|
)
|
|
(4.3
|
)%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
55.97
|
|
|
60.27
|
|
|
(4.30
|
)
|
|
(7.1
|
)%
|
|||
Depreciation, depletion & amortization
|
|
4.61
|
|
|
5.72
|
|
|
(1.11
|
)
|
|
(19.4
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
60.58
|
|
|
65.99
|
|
|
(5.41
|
)
|
|
(8.2
|
)%
|
|||
Sales margin
|
|
$
|
15.13
|
|
|
$
|
13.13
|
|
|
$
|
2.00
|
|
|
15.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
18,224
|
|
|
17,292
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
23,416
|
|
|
26,138
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
15,982
|
|
|
19,317
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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. See
"Non-GAAP Reconciliation"
for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Tons are long tons (2,240 pounds).
|
•
|
Higher sales volumes of 0.9 million long tons, which resulted in increased revenues of
$73.5 million
due to:
|
◦
|
Additional short-term contracts in 2016 with two customers, one which we made no sales to in 2015, providing additional sales volume of 2.4 million long tons.
|
◦
|
This increase was offset partially by a 1.3 million net reduction in long tons from the termination of a customer contract in the fourth quarter of the prior year that was reinstated in June 2016, to begin in 2017, and nominations on short-term contracts made with the customer in the interim.
|
•
|
The average year-to-date realized product revenue rate declined by
$3.41
per long ton or
4.3%
to
$75.71
per long ton in the year ended December 31, 2016, which resulted in a decrease of
$62.0 million
, compared to the prior year. The decline is a result of:
|
◦
|
Changes in customer pricing negatively affected the realized revenue rate by $2 per long ton or $32 million driven primarily by the negative inflation of certain price indices;
|
◦
|
An unfavorable variance of $30 million or $2 per long ton due to overall net lower contracted pricing terms for two short-term customer contracts that were based on fixed negotiated rates compared to the prior-year which was based on a different method; and
|
◦
|
An unfavorable change of $17 million or $1 per long ton resulting from various price adjustments, unfavorable customer mix and net of increased service revenue.
|
◦
|
These decreases were offset partially by an increase in realized revenue rates of $1 per long ton or $17 million as a result of one major customer contract with a pricing mechanism tied to the full-year estimate of their hot-rolled coil steel pricing. The increase in revenue is primarily due to the hot-rolled coil steel estimate increasing in 2016 from the beginning of the year, compared to 2015 when the estimate was revised lower.
|
•
|
Lower maintenance and repair costs resulting from cost reduction initiatives and condition based monitoring and Empire's indefinite idle, which began in August 2016 of $28 million of $2 per long ton;
|
•
|
A year-over-year reduction in energy rates for natural gas and diesel, which lowered costs by $16 million or $1 per long ton and a reduction of employment costs of $12 million or $1 per long ton; and
|
•
|
Various one-time adjustments totaling $28 million or $2 per long ton impacted the year ended December 31, 2016 compared to the previous year, including a positive asset retirement obligation adjustment for a life of mine extension during 2016 of $9 million or $1 per long ton, and a supplies inventory adjustment that occurred in 2015 that was not repeated in 2016 of $15 million or $1 per long ton.
|
•
|
These decreases were offset partially by increased sales volume as discussed above that increased costs by
$55 million
or $3 per long ton, in addition to an unfavorable impact from LIFO liquidation of $9 million or $1 per long ton, compared to the prior year.
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
|
|
|
Change due to
|
|
|
||||||||||||||||||||||
|
Year Ended
December 31,
|
|
Revenue and cost rate
|
|
Sales volume
|
|
Exchange rate
|
|
Freight and reimburse-ment
|
|
Total change
|
|||||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|
||||||||||||||||||||
Revenues from product sales and services
|
|
$
|
554.5
|
|
|
$
|
487.9
|
|
|
$
|
69.2
|
|
|
$
|
0.7
|
|
|
$
|
(0.4
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
66.6
|
|
Cost of goods sold and operating expenses
|
|
(440.9
|
)
|
|
(478.5
|
)
|
|
29.8
|
|
|
(0.6
|
)
|
|
5.5
|
|
|
2.9
|
|
|
37.6
|
|
|||||||
Sales margin
|
|
$
|
113.6
|
|
|
$
|
9.4
|
|
|
$
|
99.0
|
|
|
$
|
0.1
|
|
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
104.2
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|||||||||
Per Metric Sales Ton Information
|
|
2016
|
|
2015
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
45.85
|
|
|
$
|
39.93
|
|
|
$
|
5.92
|
|
|
14.8
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
33.94
|
|
|
36.95
|
|
|
(3.01
|
)
|
|
(8.1
|
)%
|
|||
Depreciation, depletion & amortization
|
|
2.16
|
|
|
2.18
|
|
|
(0.02
|
)
|
|
(0.9
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
36.10
|
|
|
39.13
|
|
|
(3.03
|
)
|
|
(7.7
|
)%
|
|||
Sales margin
|
|
$
|
9.75
|
|
|
$
|
0.80
|
|
|
$
|
8.95
|
|
|
1,118.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
11,642
|
|
|
11,627
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
11,839
|
|
|
11,722
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
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. See "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Metric tons (2,205 pounds).
|
•
|
The average year-to-date realized product revenue rate increased
$5.92
per metric ton or
14.8%
to
$45.85
per metric ton, which resulted in an increase of $68.8 million, including the impact of foreign exchange. This increase is a result of:
|
◦
|
An increase in the Platts 62% Price positively affected the realized revenue rate by $3 per metric ton or $33 million; and
|
◦
|
A favorable variance of $3 per metric ton or $29 million due to the suspension in 2015 of the hedging program that protected against volatility in exchange rates. This did not occur in 2016.
|
•
|
Reduced administration and employment costs of $16 million or $1 per metric ton, due to lower headcount and contractor fees;
|
•
|
A reduction in mining costs of $12 million or $1 per metric ton, due to mining efficiencies gained from our revised mine plan, including a reduction in the required mined tons to meet our desired yields;
|
•
|
Lower transportation costs of $11 million or $1 per metric ton, due to decreased hauling volumes and reduced freight costs as a result of the revised mine plan; and
|
•
|
Favorable foreign exchange rate variances of $6 million or $1 per metric ton.
|
•
|
Partially offset by increased crushing costs due to increased maintenance activities and our use of a third-party mobile crushing until and increased royalties, which were driven by higher gross revenues, for $9 million or $1 per metric ton.
|
|
(In Millions)
|
||||||
|
December 31,
2017 |
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
1,007.7
|
|
|
$
|
323.4
|
|
|
|
|
|
||||
Available borrowing base on ABL Facility
1
|
$
|
273.2
|
|
|
$
|
333.0
|
|
ABL Facility loans drawn
|
—
|
|
|
—
|
|
||
Letter of credit obligations and other commitments
|
(46.5
|
)
|
|
(106.0
|
)
|
||
Borrowing capacity available
|
$
|
226.7
|
|
|
$
|
227.0
|
|
|
|
|
|
||||
1
The ABL Facility has the maximum borrowing base of $550 million, determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
|
•
|
Approximately $85 million in sustaining capital.
|
•
|
Approximately $250 million toward the HBI project in Toledo, OH (fully funded with the December 2017 debt offerings).
|
•
|
Approximately $50 million toward the upgrade of the Northshore mine to produce up to 3.5 million long tons of DR-grade pellets a year.
|
|
|
Pension
|
|
OPEB
|
||||||||||||
|
|
Funding
|
|
Expense
|
|
Funding
|
|
Expense (Benefit)
|
||||||||
2015
|
|
$
|
35.7
|
|
|
$
|
23.9
|
|
|
$
|
3.5
|
|
|
$
|
4.4
|
|
2016
|
|
1.2
|
|
|
16.5
|
|
|
1.1
|
|
|
(4.0
|
)
|
||||
2017
|
|
24.4
|
|
|
18.0
|
|
|
2.1
|
|
|
(6.1
|
)
|
||||
2018 (Estimated)
|
|
27.7
|
|
|
12.3
|
|
|
4.0
|
|
|
(6.2
|
)
|
|
Pension and Other Benefits
|
||||||
|
2017
|
|
|
2016
|
|
|
|
U.S. plan discount rate
|
|
|
|
|
|
||
Iron Hourly Pension Plan
|
3.60
|
|
%
|
|
4.02
|
|
%
|
Salaried Pension Plan
|
3.52
|
|
|
|
3.92
|
|
|
Ore Mining Pension Plan
|
3.61
|
|
|
|
4.04
|
|
|
SERP
|
3.50
|
|
|
|
3.90
|
|
|
Hourly OPEB Plan
|
3.60
|
|
|
|
4.02
|
|
|
Salaried OPEB Plan
|
3.57
|
|
|
|
3.99
|
|
|
U.S. rate of compensation increase - Salaried
|
3.00
|
|
|
|
3.00
|
|
|
U.S. rate of compensation increase - Hourly
|
2.00
|
|
|
|
2.00
|
|
|
U.S. pension plan expected return on plan assets
|
8.25
|
|
|
|
8.25
|
|
|
U.S. OPEB plan expected return on plan assets
|
7.00
|
|
|
|
7.00
|
|
|
Health care cost trend rate assumed for next year
|
7.00
|
|
|
|
6.50
|
|
|
Ultimate health care cost trend rate
|
5.00
|
|
|
|
5.00
|
|
|
Year that the ultimate rate is reached
|
2026
|
|
|
|
2023
|
|
|
|
|
Increase in Expense
|
|
Increase in Benefit Obligation
|
||||||||||||
|
|
(In Millions)
|
|
(In Millions)
|
||||||||||||
|
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
Decrease discount rate 0.25%
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
$
|
27.9
|
|
|
$
|
7.6
|
|
Decrease return on assets 1.00%
|
|
7.3
|
|
|
2.6
|
|
|
N/A
|
|
|
N/A
|
|
||||
Increase medical trend rate 1.00%
|
|
N/A
|
|
|
2.5
|
|
|
N/A
|
|
|
21.2
|
|
•
|
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, the impact of barriers to trade, the outcomes of 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 ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele, specifically successful completion of our HBI production plant;
|
•
|
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;
|
•
|
risks related to former and current international operations, including our ability to successfully conclude the CCAA process in Canada and plan for the end of mine life in Australia in a manner that minimizes cash outflows and associated liabilities;
|
•
|
our actual economic iron ore reserves or changes in current mineral estimates, including whether any mineralized material qualifies as a reserve;
|
•
|
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;
|
•
|
the ability of our customers, joint venture partners and significant suppliers and service providers to meet their obligations to us on a timely basis or at all;
|
•
|
the outcome of any litigation or arbitration, including any contractual disputes with our customers, joint venture partners or significant energy, material or service providers;
|
•
|
our ability to maintain satisfactory 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;
|
•
|
problems or uncertainties with productivity, tons mined, transportation, capital spending, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry;
|
•
|
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;
|
•
|
changes in sales volume or mix;
|
•
|
our ability to reach agreement with our customers regarding any modifications to sales contract provisions, renewals or new arrangements;
|
•
|
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;
|
•
|
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;
|
•
|
uncertainty relating to restructurings in the steel industry and/or affecting the steel industry;
and
|
•
|
the potential existence of significant deficiencies or material weaknesses in our internal control over financial reporting
.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,007.7
|
|
|
$
|
323.4
|
|
Accounts receivable, net
|
140.6
|
|
|
128.7
|
|
||
Inventories
|
183.4
|
|
|
178.4
|
|
||
Supplies and other inventories
|
93.9
|
|
|
91.4
|
|
||
Derivative assets
|
39.4
|
|
|
33.1
|
|
||
Loans to and accounts receivables from the Canadian Entities
|
51.6
|
|
|
48.6
|
|
||
Other current assets
|
28.0
|
|
|
21.0
|
|
||
TOTAL CURRENT ASSETS
|
1,544.6
|
|
|
824.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
1,051.0
|
|
|
984.4
|
|
||
Income tax receivable
|
235.3
|
|
|
—
|
|
||
Other non-current assets
|
122.5
|
|
|
114.9
|
|
||
TOTAL ASSETS
|
$
|
2,953.4
|
|
|
$
|
1,923.9
|
|
|
(In Millions)
|
||||||||||
|
Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
367.0
|
|
|
$
|
174.1
|
|
|
$
|
(749.3
|
)
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Pension and OPEB liability, net of tax
|
11.5
|
|
|
(19.8
|
)
|
|
45.2
|
|
|||
Unrealized net gain on marketable securities, net of tax
|
—
|
|
|
—
|
|
|
1.7
|
|
|||
Unrealized net gain (loss) on foreign currency translation
|
(13.9
|
)
|
|
18.6
|
|
|
155.6
|
|
|||
Unrealized net gain (loss) on derivative financial instruments, net of tax
|
(0.5
|
)
|
|
(2.6
|
)
|
|
20.7
|
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
(2.9
|
)
|
|
(3.8
|
)
|
|
223.2
|
|
|||
OTHER COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST
|
(1.1
|
)
|
|
0.5
|
|
|
4.6
|
|
|||
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
363.0
|
|
|
$
|
170.8
|
|
|
$
|
(521.5
|
)
|
|
(In Millions)
|
||||||||||
|
Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
363.1
|
|
|
$
|
199.3
|
|
|
$
|
(748.4
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
87.7
|
|
|
115.4
|
|
|
134.0
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
76.6
|
|
|||
Deferred income taxes
|
—
|
|
|
—
|
|
|
159.8
|
|
|||
Loss (gain) on extinguishment/restructuring of debt
|
165.4
|
|
|
(166.3
|
)
|
|
(392.9
|
)
|
|||
Loss on deconsolidation, net of cash deconsolidated
|
20.2
|
|
|
17.5
|
|
|
668.3
|
|
|||
Other
|
21.2
|
|
|
10.0
|
|
|
61.1
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables and other assets
|
(248.7
|
)
|
|
43.2
|
|
|
369.1
|
|
|||
Product inventories
|
(1.8
|
)
|
|
157.8
|
|
|
(62.0
|
)
|
|||
Payables and accrued expenses
|
(69.0
|
)
|
|
(73.9
|
)
|
|
(227.7
|
)
|
|||
Net cash provided by operating activities
|
338.1
|
|
|
303.0
|
|
|
37.9
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(151.7
|
)
|
|
(69.1
|
)
|
|
(80.8
|
)
|
|||
Other investing activities
|
(4.3
|
)
|
|
11.2
|
|
|
(22.4
|
)
|
|||
Net cash used by investing activities
|
(156.0
|
)
|
|
(57.9
|
)
|
|
(103.2
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net proceeds from issuance of common shares
|
661.3
|
|
|
287.4
|
|
|
—
|
|
|||
Proceeds from issuance of debt
|
1,771.5
|
|
|
—
|
|
|
503.5
|
|
|||
Debt issuance costs
|
(28.6
|
)
|
|
(5.2
|
)
|
|
(33.6
|
)
|
|||
Borrowings under credit facilities
|
—
|
|
|
105.0
|
|
|
309.8
|
|
|||
Repayment under credit facilities
|
—
|
|
|
(105.0
|
)
|
|
(309.8
|
)
|
|||
Repayments of equipment loans
|
—
|
|
|
(95.6
|
)
|
|
(45.4
|
)
|
|||
Repurchase of debt
|
(1,720.7
|
)
|
|
(305.4
|
)
|
|
(225.9
|
)
|
|||
Acquisition of noncontrolling interest
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions of partnership equity
|
(52.9
|
)
|
|
(59.9
|
)
|
|
(40.6
|
)
|
|||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
(51.2
|
)
|
|||
Other financing activities
|
(26.7
|
)
|
|
(27.7
|
)
|
|
(45.8
|
)
|
|||
Net cash provided (used) by financing activities
|
498.9
|
|
|
(206.4
|
)
|
|
61.0
|
|
|||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
3.3
|
|
|
(0.5
|
)
|
|
(1.4
|
)
|
|||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
684.3
|
|
|
38.2
|
|
|
(5.7
|
)
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
323.4
|
|
|
285.2
|
|
|
290.9
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
1,007.7
|
|
|
$
|
323.4
|
|
|
$
|
285.2
|
|
|
|
(In Millions)
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Cliffs Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Number
of Depositary Shares |
|
Depositary
Shares |
|
Number
of Common Shares |
|
Common
Shares |
|
Capital in
Excess of Par Value of Shares |
|
Retained
Earnings |
|
Common
Shares in Treasury |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Non-
Controlling Interest |
|
Total
|
||||||||||||||||||
January 1, 2015
|
|
29.3
|
|
|
$
|
731.3
|
|
|
153.2
|
|
|
$
|
19.8
|
|
|
$
|
2,309.8
|
|
|
$
|
(3,960.7
|
)
|
|
$
|
(285.7
|
)
|
|
$
|
(245.8
|
)
|
|
$
|
(303.0
|
)
|
|
$
|
(1,734.3
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(749.3
|
)
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
(748.4
|
)
|
||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227.8
|
|
|
(4.6
|
)
|
|
223.2
|
|
||||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.7
|
)
|
|
(525.2
|
)
|
||||||||||||||||
Capital contribution by noncontrolling
interest to subsidiary |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Distributions of partnership equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51.7
|
)
|
|
(51.7
|
)
|
||||||||
Effect of deconsolidation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
528.2
|
|
|
528.2
|
|
||||||||
Stock and other incentive plans
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(10.9
|
)
|
|
—
|
|
|
20.7
|
|
|
—
|
|
|
—
|
|
|
9.8
|
|
||||||||
Preferred Share dividends ($1.32 per
depositary share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.4
|
)
|
||||||||
December 31, 2015
|
|
29.3
|
|
|
$
|
731.3
|
|
|
153.5
|
|
|
$
|
19.8
|
|
|
$
|
2,298.9
|
|
|
$
|
(4,748.4
|
)
|
|
$
|
(265.0
|
)
|
|
$
|
(18.0
|
)
|
|
$
|
169.8
|
|
|
$
|
(1,811.6
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174.1
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
|
199.3
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
(0.5
|
)
|
|
(3.8
|
)
|
||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.7
|
|
|
195.5
|
|
||||||||||||||||
Preferred Share conversion
|
|
(29.3
|
)
|
|
(731.3
|
)
|
|
26.5
|
|
|
3.5
|
|
|
727.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Equity offering
|
|
—
|
|
|
—
|
|
|
44.4
|
|
|
5.5
|
|
|
281.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287.4
|
|
||||||||
Debt exchanges
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
1.0
|
|
|
44.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.2
|
|
||||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|
(3.2
|
)
|
||||||||
Distributions of partnership equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57.5
|
)
|
|
(57.5
|
)
|
||||||||
Stock and other incentive plans
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
(5.8
|
)
|
|
—
|
|
|
19.5
|
|
|
—
|
|
|
—
|
|
|
13.7
|
|
||||||||
December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
233.1
|
|
|
$
|
29.8
|
|
|
$
|
3,347.0
|
|
|
$
|
(4,574.3
|
)
|
|
$
|
(245.5
|
)
|
|
$
|
(21.3
|
)
|
|
$
|
133.8
|
|
|
$
|
(1,330.5
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
367.0
|
|
|
—
|
|
|
—
|
|
|
(3.9
|
)
|
|
363.1
|
|
||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
1.1
|
|
|
(2.9
|
)
|
||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.8
|
)
|
|
360.2
|
|
||||||||||||||||
Issuance of convertible debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.4
|
|
||||||||
Equity offering
|
|
—
|
|
|
—
|
|
|
63.3
|
|
|
7.9
|
|
|
653.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
661.3
|
|
||||||||
Acquisition of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70.2
|
)
|
|
—
|
|
|
—
|
|
|
(18.9
|
)
|
|
(15.9
|
)
|
|
(105.0
|
)
|
||||||||
Distribution of partnership equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.3
|
)
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
(116.7
|
)
|
|
(128.8
|
)
|
||||||||
Capital contributions by noncontrolling interest to subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
||||||||
Stock and other incentive plans
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
(62.4
|
)
|
|
—
|
|
|
75.9
|
|
|
—
|
|
|
—
|
|
|
13.5
|
|
||||||||
December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
297.4
|
|
|
$
|
37.7
|
|
|
$
|
3,933.9
|
|
|
$
|
(4,207.3
|
)
|
|
$
|
(169.6
|
)
|
|
$
|
(39.0
|
)
|
|
$
|
0.2
|
|
|
$
|
(444.1
|
)
|
Asset Class
|
|
Basis
|
|
Life
|
Office and information technology
|
|
Straight line
|
|
3 to 15 Years
|
Buildings
|
|
Straight line
|
|
45 Years
|
Mining equipment
|
|
Straight line/Double declining balance
|
|
3 to 20 Years
|
Processing equipment
|
|
Straight line
|
|
10 to 45 Years
|
Electric power facilities
|
|
Straight line
|
|
10 to 45 years
|
Land improvements
|
|
Straight line
|
|
20 to 45 years
|
Asset retirement obligation
|
|
Straight line
|
|
Life of mine
|
Intangible Assets
|
|
Basis
|
|
Useful Life
|
Permits -
Asia Pacific Iron Ore
|
|
Units of production
|
|
Life of mine
|
Permits -
USIO
|
|
Straight line
|
|
Life of mine
|
•
|
Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
|
|
(In Millions)
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
363.1
|
|
|
$
|
199.3
|
|
|
$
|
(748.4
|
)
|
Less:
|
|
|
|
|
|
||||||
Interest expense, net
|
(132.0
|
)
|
|
(200.5
|
)
|
|
(231.4
|
)
|
|||
Income tax benefit (expense)
|
252.4
|
|
|
12.2
|
|
|
(163.3
|
)
|
|||
Depreciation, depletion and amortization
|
(87.7
|
)
|
|
(115.4
|
)
|
|
(134.0
|
)
|
|||
Total EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
|
$
|
(219.7
|
)
|
Less:
|
|
|
|
|
|
||||||
Gain (loss) on extinguishment/restructuring of debt
|
$
|
(165.4
|
)
|
|
$
|
166.3
|
|
|
$
|
392.9
|
|
Impact of discontinued operations
|
(18.7
|
)
|
|
(19.9
|
)
|
|
(892.0
|
)
|
|||
Foreign exchange remeasurement
|
11.4
|
|
|
(16.8
|
)
|
|
16.3
|
|
|||
Severance and contractor termination costs
|
—
|
|
|
(0.1
|
)
|
|
(10.2
|
)
|
|||
Supplies inventory adjustment
|
(1.8
|
)
|
|
—
|
|
|
(16.3
|
)
|
|||
Impairment of other long-lived assets
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|||
Total Adjusted EBITDA
|
$
|
504.9
|
|
|
$
|
373.5
|
|
|
$
|
292.9
|
|
|
|
|
|
|
|
||||||
EBITDA:
|
|
|
|
|
|
||||||
U.S. Iron Ore
|
$
|
534.9
|
|
|
$
|
342.4
|
|
|
$
|
317.6
|
|
Asia Pacific Iron Ore
|
40.7
|
|
|
128.3
|
|
|
35.3
|
|
|||
Other (including discontinued operations)
|
(245.2
|
)
|
|
32.3
|
|
|
(572.6
|
)
|
|||
Total EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
|
$
|
(219.7
|
)
|
|
|
|
|
|
|
||||||
Adjusted EBITDA:
|
|
|
|
|
|
||||||
U.S. Iron Ore
|
$
|
559.4
|
|
|
$
|
359.6
|
|
|
$
|
352.1
|
|
Asia Pacific Iron Ore
|
50.4
|
|
|
132.9
|
|
|
32.7
|
|
|||
Other
|
(104.9
|
)
|
|
(119.0
|
)
|
|
(91.9
|
)
|
|||
Total Adjusted EBITDA
|
$
|
504.9
|
|
|
$
|
373.5
|
|
|
$
|
292.9
|
|
|
(In Millions)
|
||||||||||
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Assets:
|
|
|
|
|
|
||||||
U.S. Iron Ore
|
$
|
1,500.6
|
|
|
$
|
1,372.5
|
|
|
$
|
1,476.4
|
|
Asia Pacific Iron Ore
|
138.8
|
|
|
155.1
|
|
|
202.5
|
|
|||
Total segment assets
|
1,639.4
|
|
|
1,527.6
|
|
|
1,678.9
|
|
|||
Corporate
|
1,314.0
|
|
|
396.3
|
|
|
441.7
|
|
|||
Assets of discontinued operations
|
—
|
|
|
—
|
|
|
14.9
|
|
|||
Total assets
|
$
|
2,953.4
|
|
|
$
|
1,923.9
|
|
|
$
|
2,135.5
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Revenue category
|
|
|
|
|
|
|
|||
Product
|
|
90
|
%
|
|
91
|
%
|
|
91
|
%
|
Freight and venture partners’ cost reimbursements
|
|
10
|
%
|
|
9
|
%
|
|
9
|
%
|
Total revenues from product sales and services
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(In Millions)
|
||||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
Segment
|
Finished Goods
|
|
Work-in Process
|
|
Total Inventory
|
|
Finished Goods
|
|
Work-in
Process
|
|
Total
Inventory
|
||||||||||||
U.S. Iron Ore
|
$
|
127.1
|
|
|
$
|
11.3
|
|
|
$
|
138.4
|
|
|
$
|
124.4
|
|
|
$
|
12.6
|
|
|
$
|
137.0
|
|
Asia Pacific Iron Ore
|
33.3
|
|
|
11.7
|
|
|
45.0
|
|
|
23.6
|
|
|
17.8
|
|
|
41.4
|
|
||||||
Total
|
$
|
160.4
|
|
|
$
|
23.0
|
|
|
$
|
183.4
|
|
|
$
|
148.0
|
|
|
$
|
30.4
|
|
|
$
|
178.4
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land rights and mineral rights
|
$
|
549.6
|
|
|
$
|
500.5
|
|
Office and information technology
|
66.3
|
|
|
65.1
|
|
||
Buildings
|
86.8
|
|
|
67.9
|
|
||
Mining equipment
|
594.4
|
|
|
592.2
|
|
||
Processing equipment
|
617.0
|
|
|
552.0
|
|
||
Electric power facilities
|
57.0
|
|
|
49.4
|
|
||
Land improvements
|
23.7
|
|
|
23.5
|
|
||
Asset retirement obligation
|
19.2
|
|
|
19.8
|
|
||
Other
|
30.3
|
|
|
28.1
|
|
||
Construction in-progress
|
35.1
|
|
|
42.8
|
|
||
|
2,079.4
|
|
|
1,941.3
|
|
||
Allowance for depreciation and depletion
|
(1,028.4
|
)
|
|
(956.9
|
)
|
||
|
$
|
1,051.0
|
|
|
$
|
984.4
|
|
($ in Millions)
|
||||||||||||||||||
December 31, 2017
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Senior 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)
|
||||||||||||||||||
December 31, 2016
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Undiscounted Interest/(Unamortized Discounts)
|
|
Total Debt
|
||||||||
Senior 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
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
$
|
2,192.6
|
|
|||||
Less current portion
|
|
|
|
|
|
|
|
|
|
17.5
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,175.1
|
|
Debt Instrument
|
|
Maturity
|
|
Interest Payable
(until maturity)
|
$400 Million 5.90% 2020 Senior Notes
|
|
March 15, 2020
|
|
March 15 and September 15
|
$500 Million 4.80% 2020 Senior Notes
|
|
October 1, 2020
|
|
April 1 and October 1
|
$700 Million 4.875% 2021 Senior Notes
|
|
April 1, 2021
|
|
April 1 and October 1
|
$800 Million 6.25% 2040 Senior Notes
|
|
October 1, 2040
|
|
April 1 and October 1
|
|
(In Millions)
|
||
|
Maturities of Debt
|
||
2018
|
$
|
—
|
|
2019
|
—
|
|
|
2020
|
211.3
|
|
|
2021
|
138.4
|
|
|
2022
|
—
|
|
|
2023 and thereafter
|
2,089.7
|
|
|
Total maturities of debt
|
$
|
2,439.4
|
|
|
(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
|
—
|
|
|
—
|
|
|
39.4
|
|
|
39.4
|
|
||||
Total
|
$
|
66.3
|
|
|
$
|
550.6
|
|
|
$
|
39.4
|
|
|
$
|
656.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
2.4
|
|
|
$
|
2.7
|
|
Total
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
2.4
|
|
|
$
|
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
|
||||||||
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)
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
Change in benefit obligations:
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Benefit obligations — beginning of year
|
$
|
931.6
|
|
|
$
|
910.8
|
|
|
$
|
264.6
|
|
|
$
|
266.0
|
|
Service cost (excluding expenses)
|
17.1
|
|
|
17.6
|
|
|
1.8
|
|
|
1.7
|
|
||||
Interest cost
|
30.5
|
|
|
30.3
|
|
|
8.3
|
|
|
9.1
|
|
||||
Plan amendments
|
—
|
|
|
5.7
|
|
|
—
|
|
|
9.8
|
|
||||
Actuarial (gain) loss
|
54.6
|
|
|
38.1
|
|
|
7.4
|
|
|
(7.2
|
)
|
||||
Benefits paid
|
(60.7
|
)
|
|
(70.9
|
)
|
|
(21.4
|
)
|
|
(21.3
|
)
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
4.6
|
|
|
6.0
|
|
||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.5
|
|
||||
Benefit obligations — end of year
|
$
|
973.1
|
|
|
$
|
931.6
|
|
|
$
|
265.9
|
|
|
$
|
264.6
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
$
|
685.8
|
|
|
$
|
700.6
|
|
|
$
|
253.0
|
|
|
$
|
250.6
|
|
Actual return on plan assets
|
100.2
|
|
|
54.8
|
|
|
24.2
|
|
|
16.0
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
||||
Employer contributions
|
24.4
|
|
|
1.2
|
|
|
1.7
|
|
|
1.7
|
|
||||
Asset transfers
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(60.7
|
)
|
|
(70.9
|
)
|
|
(16.7
|
)
|
|
(15.8
|
)
|
||||
Fair value of plan assets — end of year
|
$
|
749.8
|
|
|
$
|
685.8
|
|
|
$
|
262.5
|
|
|
$
|
253.0
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status at December 31:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
749.8
|
|
|
$
|
685.8
|
|
|
$
|
262.5
|
|
|
$
|
253.0
|
|
Benefit obligations
|
(973.1
|
)
|
|
(931.6
|
)
|
|
(265.9
|
)
|
|
(264.6
|
)
|
||||
Amount recognized at December 31
|
$
|
(223.3
|
)
|
|
$
|
(245.8
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
(11.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in Statements of Financial Position:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35.4
|
|
|
$
|
27.3
|
|
Current liabilities
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(3.9
|
)
|
|
(4.1
|
)
|
||||
Noncurrent liabilities
|
(222.8
|
)
|
|
(245.7
|
)
|
|
(34.9
|
)
|
|
(34.8
|
)
|
||||
Total amount recognized
|
$
|
(223.3
|
)
|
|
$
|
(245.8
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
(11.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
318.7
|
|
|
$
|
315.9
|
|
|
$
|
88.3
|
|
|
$
|
87.0
|
|
Prior service cost (credit)
|
8.8
|
|
|
11.0
|
|
|
(25.6
|
)
|
|
(26.9
|
)
|
||||
Net amount recognized
|
$
|
327.5
|
|
|
$
|
326.9
|
|
|
$
|
62.7
|
|
|
$
|
60.1
|
|
|
|
|
|
|
|
|
|
||||||||
The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2018:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
21.1
|
|
|
|
|
$
|
4.9
|
|
|
|
||||
Prior service cost (credit)
|
2.2
|
|
|
|
|
(3.0
|
)
|
|
|
||||||
Net amount recognized
|
$
|
23.3
|
|
|
|
|
$
|
1.9
|
|
|
|
|
(In Millions)
|
||||||||||||||||||||||||||||||
|
2017
|
||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Benefits
|
||||||||||||||||||||||||||||
|
Salaried
|
|
Hourly
|
|
Mining
|
|
SERP
|
|
Total
|
|
Salaried
|
|
Hourly
|
|
Total
|
||||||||||||||||
Fair value of plan assets
|
$
|
269.4
|
|
|
$
|
473.0
|
|
|
$
|
7.4
|
|
|
$
|
—
|
|
|
$
|
749.8
|
|
|
$
|
—
|
|
|
$
|
262.5
|
|
|
$
|
262.5
|
|
Benefit obligation
|
(368.0
|
)
|
|
(590.0
|
)
|
|
(10.3
|
)
|
|
(4.8
|
)
|
|
(973.1
|
)
|
|
(37.7
|
)
|
|
(228.2
|
)
|
|
(265.9
|
)
|
||||||||
Funded status
|
$
|
(98.6
|
)
|
|
$
|
(117.0
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(223.3
|
)
|
|
$
|
(37.7
|
)
|
|
$
|
34.3
|
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2016
|
||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Benefits
|
||||||||||||||||||||||||||||
|
Salaried
|
|
Hourly
|
|
Mining
|
|
SERP
|
|
Total
|
|
Salaried
|
|
Hourly
|
|
Total
|
||||||||||||||||
Fair value of plan assets
|
$
|
242.9
|
|
|
$
|
436.9
|
|
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
685.8
|
|
|
$
|
—
|
|
|
$
|
253.0
|
|
|
$
|
253.0
|
|
Benefit obligation
|
(351.9
|
)
|
|
(565.6
|
)
|
|
(10.0
|
)
|
|
(4.1
|
)
|
|
(931.6
|
)
|
|
(37.6
|
)
|
|
(227.0
|
)
|
|
(264.6
|
)
|
||||||||
Funded status
|
$
|
(109.0
|
)
|
|
$
|
(128.7
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(245.8
|
)
|
|
$
|
(37.6
|
)
|
|
$
|
26.0
|
|
|
$
|
(11.6
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Discount rate
|
|
|
|
|
|
|
|
|
|
|
|
Iron Hourly Pension Plan
|
3.60
|
%
|
|
4.02
|
%
|
|
N/A
|
%
|
|
N/A
|
%
|
Salaried Pension Plan
|
3.52
|
|
|
3.92
|
|
|
N/A
|
|
|
N/A
|
|
Ore Mining Pension Plan
|
3.61
|
|
|
4.04
|
|
|
N/A
|
|
|
N/A
|
|
SERP
|
3.50
|
|
|
3.90
|
|
|
N/A
|
|
|
N/A
|
|
Hourly OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
3.60
|
|
|
4.02
|
|
Salaried OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
3.57
|
|
|
3.99
|
|
Salaried rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
3.00
|
|
|
3.00
|
|
Hourly rate of compensation increase
|
2.00
|
|
|
2.00
|
|
|
N/A
|
|
|
N/A
|
|
|
2017
|
|
2016
|
||
Health care cost trend rate assumed for next year
|
7.00
|
%
|
|
6.50
|
%
|
Ultimate health care cost trend rate
|
5.00
|
|
|
5.00
|
|
Year that the ultimate rate is reached
|
2026
|
|
|
2023
|
|
|
Pension Assets
|
|
VEBA Assets
|
||||||||||||||
Asset Category
|
2018
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
|
2018
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||
Equity securities
|
45.0
|
%
|
|
43.6
|
%
|
|
43.2
|
%
|
|
8.0
|
%
|
|
8.7
|
%
|
|
8.4
|
%
|
Fixed income
|
28.0
|
%
|
|
27.0
|
%
|
|
26.4
|
%
|
|
80.0
|
%
|
|
77.7
|
%
|
|
78.3
|
%
|
Hedge funds
|
5.0
|
%
|
|
5.0
|
%
|
|
5.9
|
%
|
|
4.0
|
%
|
|
4.4
|
%
|
|
4.4
|
%
|
Private equity
|
7.0
|
%
|
|
5.3
|
%
|
|
5.3
|
%
|
|
3.0
|
%
|
|
1.5
|
%
|
|
1.7
|
%
|
Structured credit
|
7.5
|
%
|
|
9.7
|
%
|
|
9.3
|
%
|
|
2.0
|
%
|
|
3.0
|
%
|
|
2.7
|
%
|
Real estate
|
7.5
|
%
|
|
8.7
|
%
|
|
9.0
|
%
|
|
3.0
|
%
|
|
4.6
|
%
|
|
4.4
|
%
|
Cash
|
—
|
%
|
|
0.7
|
%
|
|
0.9
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2017
|
||||||||||||||
Asset Category
|
Quoted Prices in Active
Markets for Identical
Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. large-cap
|
$
|
130.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130.1
|
|
U.S. small/mid-cap
|
35.5
|
|
|
—
|
|
|
—
|
|
|
35.5
|
|
||||
International
|
160.9
|
|
|
—
|
|
|
—
|
|
|
160.9
|
|
||||
Fixed income
|
173.6
|
|
|
28.8
|
|
|
—
|
|
|
202.4
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
37.4
|
|
|
37.4
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
39.8
|
|
|
39.8
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
72.9
|
|
|
72.9
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
65.5
|
|
|
65.5
|
|
||||
Cash
|
5.3
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
||||
Total
|
$
|
505.4
|
|
|
$
|
28.8
|
|
|
$
|
215.6
|
|
|
$
|
749.8
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2016
|
||||||||||||||
Asset Category
|
Quoted Prices in Active
Markets for Identical
Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. large-cap
|
$
|
144.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144.7
|
|
U.S. small/mid-cap
|
39.9
|
|
|
—
|
|
|
—
|
|
|
39.9
|
|
||||
International
|
111.8
|
|
|
—
|
|
|
—
|
|
|
111.8
|
|
||||
Fixed income
|
157.5
|
|
|
23.7
|
|
|
—
|
|
|
181.2
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
40.6
|
|
|
40.6
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
36.1
|
|
|
36.1
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
63.8
|
|
|
63.8
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
61.9
|
|
|
61.9
|
|
||||
Cash
|
5.8
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
||||
Total
|
$
|
459.7
|
|
|
$
|
23.7
|
|
|
$
|
202.4
|
|
|
$
|
685.8
|
|
|
(In Millions)
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2016
|
$
|
40.7
|
|
|
$
|
33.1
|
|
|
$
|
62.1
|
|
|
$
|
57.5
|
|
|
$
|
193.4
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at
the reporting date
|
(0.1
|
)
|
|
(2.7
|
)
|
|
10.0
|
|
|
5.1
|
|
|
12.3
|
|
|||||
Relating to assets sold during
the period |
—
|
|
|
3.7
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
3.3
|
|
|||||
Purchases
|
—
|
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
|||||
Sales
|
—
|
|
|
(6.0
|
)
|
|
(8.0
|
)
|
|
(0.6
|
)
|
|
(14.6
|
)
|
|||||
Ending balance — December 31, 2016
|
$
|
40.6
|
|
|
$
|
36.1
|
|
|
$
|
63.8
|
|
|
$
|
61.9
|
|
|
$
|
202.4
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2017
|
||||||||||||||
Asset Category
|
Quoted Prices in Active
Markets for Identical
Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. large-cap
|
$
|
11.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.4
|
|
U.S. small/mid-cap
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
||||
International
|
8.8
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
||||
Fixed income
|
164.1
|
|
|
40.0
|
|
|
—
|
|
|
204.1
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
11.4
|
|
|
11.4
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
7.9
|
|
|
7.9
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
12.0
|
|
|
12.0
|
|
||||
Cash
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total
|
$
|
187.3
|
|
|
$
|
40.0
|
|
|
$
|
35.2
|
|
|
$
|
262.5
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2016
|
||||||||||||||
Asset Category
|
Quoted Prices in Active
Markets for Identical Assets/Liabilities (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. large-cap
|
$
|
10.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.6
|
|
U.S. small/mid-cap
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
||||
International
|
8.1
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
||||
Fixed income
|
162.0
|
|
|
35.9
|
|
|
—
|
|
|
197.9
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
11.2
|
|
|
11.2
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
4.3
|
|
|
4.3
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
6.9
|
|
|
6.9
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
11.1
|
|
|
11.1
|
|
||||
Cash
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total
|
$
|
183.6
|
|
|
$
|
35.9
|
|
|
$
|
33.5
|
|
|
$
|
253.0
|
|
|
(In Millions)
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2016
|
$
|
11.2
|
|
|
$
|
5.5
|
|
|
$
|
5.8
|
|
|
$
|
10.0
|
|
|
$
|
32.5
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at the reporting date
|
—
|
|
|
(0.3
|
)
|
|
1.1
|
|
|
1.1
|
|
|
1.9
|
|
|||||
Relating to assets sold during the period
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|||||
Ending balance — December 31, 2016
|
$
|
11.2
|
|
|
$
|
4.3
|
|
|
$
|
6.9
|
|
|
$
|
11.1
|
|
|
$
|
33.5
|
|
|
|
(In Millions)
|
||||||||||||||
|
|
Pension
Benefits
|
|
Other Benefits
|
||||||||||||
Company Contributions
|
|
VEBA
|
|
Direct
Payments
|
|
Total
|
||||||||||
2016
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
1.1
|
|
2017
|
|
24.4
|
|
|
—
|
|
|
2.1
|
|
|
2.1
|
|
||||
2018 (Expected)
1
|
|
27.8
|
|
|
—
|
|
|
4.0
|
|
|
4.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
1
Pursuant to the bargaining agreement, benefits can be paid from VEBA trusts that are at least 70% funded (all VEBA trusts are over 70% funded at December 31, 2017). Funding obligations have been suspended as Hibbing's, UTAC's, Tilden's and Empire's share of the value of their respective trust assets have reached 90% of their obligation.
|
|
(In Millions)
|
||||||||||||||
|
Pension
Benefits
|
|
Other Benefits
|
||||||||||||
Gross
Company
Benefits
|
|
Less
Medicare
Subsidy
|
|
Net
Benefit
Payments
|
|||||||||||
2018
|
$
|
69.6
|
|
|
$
|
18.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
18.2
|
|
2019
|
66.7
|
|
|
18.0
|
|
|
(0.8
|
)
|
|
17.2
|
|
||||
2020
|
66.0
|
|
|
17.4
|
|
|
(0.9
|
)
|
|
16.5
|
|
||||
2021
|
65.1
|
|
|
16.9
|
|
|
(1.0
|
)
|
|
15.9
|
|
||||
2022
|
65.2
|
|
|
16.7
|
|
|
(1.1
|
)
|
|
15.6
|
|
||||
2023-2027
|
310.5
|
|
|
81.5
|
|
|
(6.6
|
)
|
|
74.9
|
|
Year of Grant
|
|
Restricted Equity Grant Shares
|
|
Deferred Equity Grant Shares
|
||
2015
|
|
109,408
|
|
|
25,248
|
|
2016
|
|
135,038
|
|
|
29,583
|
|
2017
|
|
93,359
|
|
|
17,289
|
|
|
(In Millions, except per
share amounts)
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of goods sold and operating expenses
|
$
|
2.3
|
|
|
$
|
2.1
|
|
|
$
|
4.0
|
|
Selling, general and administrative expenses
|
16.4
|
|
|
12.1
|
|
|
9.9
|
|
|||
Reduction of operating income from continuing operations before income
taxes and equity loss from ventures
|
18.7
|
|
|
14.2
|
|
|
13.9
|
|
|||
Income tax benefit
1
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reduction of net income attributable to Cliffs shareholders
|
$
|
18.7
|
|
|
$
|
14.2
|
|
|
$
|
13.9
|
|
Reduction of earnings per share attributable to Cliffs shareholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.06
|
|
|
$
|
0.07
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
||||||
1
No income tax benefit due to the full valuation allowance.
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding, beginning of year
|
7,430,122
|
|
|
$
|
5.55
|
|
Granted
|
1,999,562
|
|
|
$
|
12.19
|
|
Vested
|
(1,813,315
|
)
|
|
$
|
5.52
|
|
Forfeited/expired
|
(391,704
|
)
|
|
$
|
12.84
|
|
Outstanding, end of year
|
7,224,665
|
|
|
$
|
6.79
|
|
|
|
(In Millions)
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
90.7
|
|
|
$
|
124.9
|
|
|
$
|
314.2
|
|
Foreign
|
|
38.7
|
|
|
82.1
|
|
|
(1.1
|
)
|
|||
|
|
$
|
129.4
|
|
|
$
|
207.0
|
|
|
$
|
313.1
|
|
|
|
(In Millions)
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits balance as of January 1
|
|
$
|
30.7
|
|
|
$
|
156.2
|
|
|
$
|
72.6
|
|
Increase (decrease) for tax positions in prior years
|
|
(2.8
|
)
|
|
(61.0
|
)
|
|
6.7
|
|
|||
Increase for tax positions in current year
|
|
4.5
|
|
|
0.2
|
|
|
78.5
|
|
|||
Decrease due to foreign exchange
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
|
1.0
|
|
|
(64.7
|
)
|
|
(1.1
|
)
|
|||
Lapses in statutes of limitations
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||
Other
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits balance as of December 31
|
|
$
|
33.5
|
|
|
$
|
30.7
|
|
|
$
|
156.2
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Environmental
|
$
|
2.9
|
|
|
$
|
2.8
|
|
Mine closure
|
|
|
|
||||
U.S. Iron Ore
1
|
168.4
|
|
|
187.8
|
|
||
Asia Pacific Iron Ore
|
28.8
|
|
|
16.2
|
|
||
Total mine closure
|
197.2
|
|
|
204.0
|
|
||
Total environmental and mine closure obligations
|
200.1
|
|
|
206.8
|
|
||
Less current portion
|
3.6
|
|
|
12.9
|
|
||
Long-term environmental and mine closure obligations
|
$
|
196.5
|
|
|
$
|
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)
|
||||||||||||||||||||||
|
|
|
December 31, 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
|
|
$
|
78.8
|
|
|
$
|
(26.5
|
)
|
|
$
|
52.3
|
|
|
$
|
78.4
|
|
|
$
|
(24.6
|
)
|
|
$
|
53.8
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 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
|
||||||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity Contracts
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
0.3
|
|
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer Supply Agreements
|
Derivative assets
|
|
$
|
37.9
|
|
|
Derivative assets
|
|
$
|
21.3
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Provisional Pricing Arrangements
|
Derivative assets
|
|
1.5
|
|
|
Derivative assets
|
|
10.3
|
|
|
Other current liabilities
|
|
2.4
|
|
|
Other current liabilities
|
|
0.5
|
|
||||
Commodity Contracts
|
|
|
—
|
|
|
Derivative assets
|
|
1.5
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815:
|
|
|
$
|
39.4
|
|
|
|
|
$
|
33.1
|
|
|
|
|
$
|
2.4
|
|
|
|
|
$
|
0.5
|
|
Total derivatives
|
|
|
$
|
39.4
|
|
|
|
|
$
|
33.1
|
|
|
|
|
$
|
2.7
|
|
|
|
|
$
|
0.5
|
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended
December 31, |
||||||||||
Loss from Discontinued Operations
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues from product sales and services
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
392.9
|
|
Cost of goods sold and operating expenses
|
|
—
|
|
|
—
|
|
|
(449.2
|
)
|
|||
Sales margin
|
|
—
|
|
|
—
|
|
|
(56.3
|
)
|
|||
Other operating income (expense)
|
|
0.5
|
|
|
(4.5
|
)
|
|
(30.4
|
)
|
|||
Gain on sale of coal mines
|
|
2.1
|
|
|
2.1
|
|
|
9.3
|
|
|||
Other expense
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|||
Gain (loss) from discontinued operations before income taxes
|
|
2.6
|
|
|
(2.4
|
)
|
|
(79.2
|
)
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
(73.4
|
)
|
|||
Income tax benefit
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Gain (loss) from discontinued operations, net of tax
|
|
$
|
2.6
|
|
|
$
|
(2.4
|
)
|
|
$
|
(152.4
|
)
|
|
|
(In Millions)
|
||||||
Assets and Liabilities of Discontinued Operations
1
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
1.1
|
|
Other current liabilities
|
|
3.2
|
|
|
4.9
|
|
||
Total liabilities of discontinued operations
|
|
$
|
3.2
|
|
|
$
|
6.0
|
|
|
|
|
|
|
||||
1
At December 31, 2017, we had no contingent liabilities associated with our exit from the coal business recorded on our parent company compared to $2.1 million at December 31, 2016.
|
|
|
(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
|
|
Losses
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans to and accounts receivables from the Canadian Entities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48.6
|
|
|
$
|
48.6
|
|
|
$
|
17.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees and contingent liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37.2
|
|
|
$
|
37.2
|
|
|
$
|
—
|
|
|
(In Millions)
|
||||||||||
|
Pre-tax
Amount
|
|
Tax
Benefit
|
|
After-tax
Amount
|
||||||
As of December 31, 2017:
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
$
|
(387.3
|
)
|
|
$
|
123.4
|
|
|
$
|
(263.9
|
)
|
Foreign currency translation adjustments
|
225.4
|
|
|
—
|
|
|
225.4
|
|
|||
Unrealized net loss on derivative financial instruments
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
|
$
|
(162.4
|
)
|
|
$
|
123.4
|
|
|
$
|
(39.0
|
)
|
As of December 31, 2016:
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
$
|
(384.0
|
)
|
|
$
|
123.4
|
|
|
$
|
(260.6
|
)
|
Foreign currency translation adjustments
|
239.3
|
|
|
—
|
|
|
239.3
|
|
|||
|
$
|
(144.7
|
)
|
|
$
|
123.4
|
|
|
$
|
(21.3
|
)
|
As of December 31, 2015:
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
$
|
(364.8
|
)
|
|
$
|
123.4
|
|
|
$
|
(241.4
|
)
|
Foreign currency translation adjustments
|
220.7
|
|
|
—
|
|
|
220.7
|
|
|||
Unrealized net gain on derivative financial instruments
|
2.2
|
|
|
0.4
|
|
|
2.6
|
|
|||
Unrealized gain on securities
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
|
$
|
(141.8
|
)
|
|
$
|
123.8
|
|
|
$
|
(18.0
|
)
|
|
(In Millions)
|
||||||||||||||||||
|
Postretirement Benefit Liability, net of tax
|
|
Unrealized Net Gain (Loss) on Securities, net of tax
|
|
Unrealized Net Gain on Foreign Currency Translation
|
|
Net Unrealized Gain (Loss) on Derivative Financial Instruments, net of tax
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balance December 31, 2015
|
$
|
(241.4
|
)
|
|
$
|
0.1
|
|
|
$
|
220.7
|
|
|
$
|
2.6
|
|
|
$
|
(18.0
|
)
|
Other comprehensive income (loss) before reclassifications
|
(44.8
|
)
|
|
(0.1
|
)
|
|
18.4
|
|
|
(3.3
|
)
|
|
(29.8
|
)
|
|||||
Net loss reclassified from accumulated other comprehensive income (loss)
|
25.6
|
|
|
—
|
|
|
0.2
|
|
|
0.7
|
|
|
26.5
|
|
|||||
Balance December 31, 2016
|
$
|
(260.6
|
)
|
|
$
|
—
|
|
|
$
|
239.3
|
|
|
$
|
—
|
|
|
$
|
(21.3
|
)
|
|
(In Millions)
|
||||||||||||||||||
|
Postretirement Benefit Liability, 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 Income (Loss)
|
||||||||||
Balance December 31, 2014
|
$
|
(291.1
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
64.4
|
|
|
$
|
(18.1
|
)
|
|
$
|
(245.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
9.1
|
|
|
5.4
|
|
|
(26.4
|
)
|
|
1.9
|
|
|
(10.0
|
)
|
|||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss)
|
40.6
|
|
|
(4.3
|
)
|
|
182.7
|
|
|
18.8
|
|
|
237.8
|
|
|||||
Balance December 31, 2015
|
$
|
(241.4
|
)
|
|
$
|
0.1
|
|
|
$
|
220.7
|
|
|
$
|
2.6
|
|
|
$
|
(18.0
|
)
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Capital additions
1
|
$
|
156.0
|
|
|
$
|
68.5
|
|
|
$
|
96.7
|
|
Less:
|
|
|
|
|
|
||||||
Non-cash accruals
|
$
|
(2.2
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
14.4
|
|
Capital leases
|
6.5
|
|
|
—
|
|
|
1.5
|
|
|||
Cash paid for capital expenditures
|
$
|
151.7
|
|
|
$
|
69.1
|
|
|
$
|
80.8
|
|
|
|
|
|
|
|
||||||
1
Includes capital additions of $72.2 million and $24.5 million related to continuing operations and discontinued operations, respectively, for the year ended December 31, 2015.
|
Mine
|
|
Cleveland-Cliffs Inc.
|
|
ArcelorMittal
|
|
U.S. Steel
|
|||
Hibbing
|
|
23.0
|
%
|
|
62.3
|
%
|
|
14.7
|
%
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||
|
Year Ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income from Continuing Operations
|
$
|
381.8
|
|
|
$
|
219.2
|
|
|
$
|
143.7
|
|
Loss (Income) from Continuing Operations attributable to
Noncontrolling Interest |
3.9
|
|
|
(25.2
|
)
|
|
(8.6
|
)
|
|||
Net Income from Continuing Operations
attributable to Cliffs shareholders |
$
|
385.7
|
|
|
$
|
194.0
|
|
|
$
|
135.1
|
|
Loss from Discontinued Operations, net of tax
|
(18.7
|
)
|
|
(19.9
|
)
|
|
(884.4
|
)
|
|||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
367.0
|
|
|
$
|
174.1
|
|
|
$
|
(749.3
|
)
|
PREFERRED STOCK DIVIDENDS
|
—
|
|
|
—
|
|
|
(38.4
|
)
|
|||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS
|
$
|
367.0
|
|
|
$
|
174.1
|
|
|
$
|
(787.7
|
)
|
Weighted Average Number of Shares:
|
|
|
|
|
|
||||||
Basic
|
288.4
|
|
|
197.7
|
|
|
153.2
|
|
|||
Employee Stock Plans
|
4.6
|
|
|
2.4
|
|
|
0.4
|
|
|||
Diluted
|
293.0
|
|
|
200.1
|
|
|
153.6
|
|
|||
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Basic: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.34
|
|
|
$
|
0.98
|
|
|
$
|
0.63
|
|
Discontinued operations
|
(0.06
|
)
|
|
(0.10
|
)
|
|
(5.77
|
)
|
|||
|
$
|
1.28
|
|
|
$
|
0.88
|
|
|
$
|
(5.14
|
)
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Diluted: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.32
|
|
|
$
|
0.97
|
|
|
$
|
0.63
|
|
Discontinued operations
|
(0.06
|
)
|
|
(0.10
|
)
|
|
(5.76
|
)
|
|||
|
$
|
1.26
|
|
|
$
|
0.87
|
|
|
$
|
(5.13
|
)
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||||||
2017
|
|||||||||||||||||||
Quarters
|
|
|
|||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
Revenues from product sales and services
|
$
|
461.6
|
|
|
$
|
569.3
|
|
|
$
|
698.4
|
|
|
$
|
600.9
|
|
|
$
|
2,330.2
|
|
Sales margin
|
95.7
|
|
|
145.1
|
|
|
160.2
|
|
|
100.7
|
|
|
501.7
|
|
|||||
Income (Loss) from Continuing Operations
|
$
|
(30.3
|
)
|
|
$
|
76.5
|
|
|
$
|
20.6
|
|
|
$
|
315.0
|
|
|
$
|
381.8
|
|
Loss from Continuing Operations attributable to Noncontrolling Interest
|
1.7
|
|
|
1.7
|
|
|
0.5
|
|
|
—
|
|
|
3.9
|
|
|||||
Net Income (Loss) from Continuing Operations attributable to Cliffs shareholders
|
(28.6
|
)
|
|
78.2
|
|
|
21.1
|
|
|
315.0
|
|
|
385.7
|
|
|||||
Income (Loss) from Discontinued Operations, net of tax
|
0.5
|
|
|
(46.4
|
)
|
|
32.3
|
|
|
(5.1
|
)
|
|
(18.7
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
(28.1
|
)
|
|
$
|
31.8
|
|
|
$
|
53.4
|
|
|
$
|
309.9
|
|
|
$
|
367.0
|
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Basic: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
(0.11
|
)
|
|
$
|
0.26
|
|
|
$
|
0.07
|
|
|
$
|
1.06
|
|
|
$
|
1.34
|
|
Discontinued Operations
|
—
|
|
|
(0.16
|
)
|
|
0.11
|
|
|
(0.02
|
)
|
|
(0.06
|
)
|
|||||
|
$
|
(0.11
|
)
|
|
$
|
0.10
|
|
|
$
|
0.18
|
|
|
$
|
1.04
|
|
|
$
|
1.28
|
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Diluted: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
(0.11
|
)
|
|
$
|
0.26
|
|
|
$
|
0.07
|
|
|
$
|
1.05
|
|
|
$
|
1.32
|
|
Discontinued Operations
|
—
|
|
|
(0.15
|
)
|
|
0.11
|
|
|
(0.02
|
)
|
|
(0.06
|
)
|
|||||
|
$
|
(0.11
|
)
|
|
$
|
0.11
|
|
|
$
|
0.18
|
|
|
$
|
1.03
|
|
|
$
|
1.26
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||||||
|
2016
|
||||||||||||||||||
Quarters
|
|
|
|||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
Revenues from product sales and services
|
$
|
305.5
|
|
|
$
|
496.2
|
|
|
$
|
553.3
|
|
|
$
|
754.0
|
|
|
$
|
2,109.0
|
|
Sales margin
|
30.9
|
|
|
91.5
|
|
|
85.4
|
|
|
181.5
|
|
|
389.3
|
|
|||||
Income (Loss) from Continuing Operations
|
$
|
114.3
|
|
|
$
|
29.9
|
|
|
$
|
(25.1
|
)
|
|
$
|
100.1
|
|
|
$
|
219.2
|
|
Loss (Income) from Continuing Operations attributable to Noncontrolling Interest
|
(8.8
|
)
|
|
(16.7
|
)
|
|
2.0
|
|
|
(1.7
|
)
|
|
(25.2
|
)
|
|||||
Net Income (Loss) from Continuing Operations attributable to Cliffs shareholders
|
$
|
105.5
|
|
|
$
|
13.2
|
|
|
$
|
(23.1
|
)
|
|
$
|
98.4
|
|
|
$
|
194.0
|
|
Income (Loss) from Discontinued Operations, net of tax
|
2.5
|
|
|
(0.4
|
)
|
|
(2.7
|
)
|
|
(19.3
|
)
|
|
(19.9
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS
|
$
|
108.0
|
|
|
$
|
12.8
|
|
|
$
|
(25.8
|
)
|
|
$
|
79.1
|
|
|
$
|
174.1
|
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Basic: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
0.61
|
|
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.43
|
|
|
$
|
0.98
|
|
Discontinued Operations
|
0.01
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.08
|
)
|
|
(0.10
|
)
|
|||||
|
$
|
0.62
|
|
|
$
|
0.07
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.35
|
|
|
$
|
0.88
|
|
Earnings (Loss) per Common Share Attributable to
Cliffs Common Shareholders - Diluted: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
0.61
|
|
|
$
|
0.07
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
|
$
|
0.97
|
|
Discontinued Operations
|
0.01
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.08
|
)
|
|
(0.10
|
)
|
|||||
|
$
|
0.62
|
|
|
$
|
0.07
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.34
|
|
|
$
|
0.87
|
|
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
|
|
|
$
|
56.7
|
|
|
$
|
—
|
|
|
$
|
1,007.7
|
|
Accounts receivable, net
|
4.5
|
|
|
102.9
|
|
|
33.9
|
|
|
(0.7
|
)
|
|
140.6
|
|
|||||
Inventories
|
—
|
|
|
138.4
|
|
|
45.0
|
|
|
—
|
|
|
183.4
|
|
|||||
Supplies and other inventories
|
—
|
|
|
88.8
|
|
|
5.1
|
|
|
—
|
|
|
93.9
|
|
|||||
Derivative assets
|
—
|
|
|
37.9
|
|
|
1.5
|
|
|
—
|
|
|
39.4
|
|
|||||
Loans to and accounts receivables from the Canadian Entities
|
44.7
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
51.6
|
|
|||||
Other current assets
|
16.4
|
|
|
7.5
|
|
|
4.1
|
|
|
—
|
|
|
28.0
|
|
|||||
TOTAL CURRENT ASSETS
|
1,014.5
|
|
|
384.5
|
|
|
146.3
|
|
|
(0.7
|
)
|
|
1,544.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
17.5
|
|
|
959.0
|
|
|
74.5
|
|
|
—
|
|
|
1,051.0
|
|
|||||
INCOME TAX RECEIVABLE
|
235.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235.3
|
|
|||||
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
|
|
|
93.0
|
|
|
21.7
|
|
|
—
|
|
|
122.5
|
|
|||||
TOTAL ASSETS
|
$
|
2,299.4
|
|
|
$
|
1,466.4
|
|
|
$
|
484.5
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
7.1
|
|
|
$
|
89.7
|
|
|
$
|
31.6
|
|
|
$
|
(0.7
|
)
|
|
$
|
127.7
|
|
Accrued employment costs
|
13.7
|
|
|
38.9
|
|
|
3.5
|
|
|
—
|
|
|
56.1
|
|
|||||
State and local taxes payable
|
—
|
|
|
30.0
|
|
|
0.2
|
|
|
—
|
|
|
30.2
|
|
|||||
Accrued expenses
|
5.3
|
|
|
13.2
|
|
|
15.2
|
|
|
—
|
|
|
33.7
|
|
|||||
Accrued interest
|
31.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.4
|
|
|||||
Accrued royalties
|
—
|
|
|
7.8
|
|
|
9.5
|
|
|
—
|
|
|
17.3
|
|
|||||
Contingent claims
|
55.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.6
|
|
|||||
Partnership distribution payable
|
—
|
|
|
44.2
|
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|||||
Other current liabilities
|
2.1
|
|
|
33.5
|
|
|
20.4
|
|
|
—
|
|
|
56.0
|
|
|||||
TOTAL CURRENT LIABILITIES
|
115.2
|
|
|
257.3
|
|
|
80.4
|
|
|
(0.7
|
)
|
|
452.2
|
|
|||||
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions
|
59.2
|
|
|
403.6
|
|
|
(240.0
|
)
|
|
—
|
|
|
222.8
|
|
|||||
Other postretirement benefits
|
7.2
|
|
|
27.0
|
|
|
0.7
|
|
|
—
|
|
|
34.9
|
|
|||||
TOTAL POSTEMPLOYMENT BENEFIT LIABILITIES
|
66.4
|
|
|
430.6
|
|
|
(239.3
|
)
|
|
—
|
|
|
257.7
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
140.6
|
|
|
55.9
|
|
|
—
|
|
|
196.5
|
|
|||||
LONG-TERM DEBT
|
2,304.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,304.2
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
242.0
|
|
|
—
|
|
|
—
|
|
|
(242.0
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
15.7
|
|
|
147.2
|
|
|
24.0
|
|
|
—
|
|
|
186.9
|
|
|||||
TOTAL LIABILITIES
|
2,743.5
|
|
|
975.7
|
|
|
(79.0
|
)
|
|
(242.7
|
)
|
|
3,397.5
|
|
|||||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL CLIFFS SHAREHOLDERS' DEFICIT
|
(444.1
|
)
|
|
490.7
|
|
|
563.3
|
|
|
(1,054.2
|
)
|
|
(444.3
|
)
|
|||||
NONCONTROLLING INTEREST
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
TOTAL DEFICIT
|
(444.1
|
)
|
|
490.7
|
|
|
563.5
|
|
|
(1,054.2
|
)
|
|
(444.1
|
)
|
|||||
TOTAL LIABILITIES AND DEFICIT
|
$
|
2,299.4
|
|
|
$
|
1,466.4
|
|
|
$
|
484.5
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of December 31, 2016
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
283.4
|
|
|
$
|
2.5
|
|
|
$
|
37.5
|
|
|
$
|
—
|
|
|
$
|
323.4
|
|
Accounts receivable, net
|
4.5
|
|
|
59.3
|
|
|
65.7
|
|
|
(0.8
|
)
|
|
128.7
|
|
|||||
Inventories
|
—
|
|
|
137.0
|
|
|
41.4
|
|
|
—
|
|
|
178.4
|
|
|||||
Supplies and other inventories
|
—
|
|
|
86.4
|
|
|
5.0
|
|
|
—
|
|
|
91.4
|
|
|||||
Derivative assets
|
—
|
|
|
31.7
|
|
|
1.4
|
|
|
—
|
|
|
33.1
|
|
|||||
Loans to and accounts receivables from the Canadian Entities
|
41.7
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
48.6
|
|
|||||
Other current assets
|
8.6
|
|
|
8.2
|
|
|
4.2
|
|
|
—
|
|
|
21.0
|
|
|||||
TOTAL CURRENT ASSETS
|
338.2
|
|
|
332.0
|
|
|
155.2
|
|
|
(0.8
|
)
|
|
824.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
21.4
|
|
|
937.7
|
|
|
25.3
|
|
|
—
|
|
|
984.4
|
|
|||||
INVESTMENT IN SUBSIDIARIES
|
882.4
|
|
|
24.6
|
|
|
—
|
|
|
(907.0
|
)
|
|
—
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
—
|
|
|
—
|
|
|
197.0
|
|
|
(197.0
|
)
|
|
—
|
|
|||||
OTHER NON-CURRENT ASSETS
|
11.0
|
|
|
94.1
|
|
|
9.8
|
|
|
—
|
|
|
114.9
|
|
|||||
TOTAL ASSETS
|
$
|
1,253.0
|
|
|
$
|
1,388.4
|
|
|
$
|
387.3
|
|
|
$
|
(1,104.8
|
)
|
|
$
|
1,923.9
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
1.6
|
|
|
$
|
92.6
|
|
|
$
|
14.2
|
|
|
$
|
(0.8
|
)
|
|
$
|
107.6
|
|
Accrued employment costs
|
15.6
|
|
|
34.6
|
|
|
5.9
|
|
|
—
|
|
|
56.1
|
|
|||||
State and local taxes payable
|
—
|
|
|
28.1
|
|
|
0.2
|
|
|
—
|
|
|
28.3
|
|
|||||
Accrued expenses
|
7.6
|
|
|
14.4
|
|
|
19.1
|
|
|
—
|
|
|
41.1
|
|
|||||
Accrued interest
|
40.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.2
|
|
|||||
Accrued royalties
|
—
|
|
|
13.0
|
|
|
13.2
|
|
|
—
|
|
|
26.2
|
|
|||||
Partnership distribution payable
|
—
|
|
|
8.7
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|||||
Other current liabilities
|
23.0
|
|
|
35.3
|
|
|
24.6
|
|
|
—
|
|
|
82.9
|
|
|||||
TOTAL CURRENT LIABILITIES
|
88.0
|
|
|
226.7
|
|
|
77.2
|
|
|
(0.8
|
)
|
|
391.1
|
|
|||||
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions
|
56.9
|
|
|
397.4
|
|
|
(208.6
|
)
|
|
—
|
|
|
245.7
|
|
|||||
Other postretirement benefits
|
7.6
|
|
|
26.5
|
|
|
0.7
|
|
|
—
|
|
|
34.8
|
|
|||||
TOTAL POSTEMPLOYMENT BENEFIT LIABILITIES
|
64.5
|
|
|
423.9
|
|
|
(207.9
|
)
|
|
—
|
|
|
280.5
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
153.9
|
|
|
40.0
|
|
|
—
|
|
|
193.9
|
|
|||||
LONG-TERM DEBT
|
2,175.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,175.1
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
197.0
|
|
|
—
|
|
|
—
|
|
|
(197.0
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
58.9
|
|
|
118.8
|
|
|
36.1
|
|
|
—
|
|
|
213.8
|
|
|||||
TOTAL LIABILITIES
|
2,583.5
|
|
|
923.3
|
|
|
(54.6
|
)
|
|
(197.8
|
)
|
|
3,254.4
|
|
|||||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL CLIFFS SHAREHOLDERS' DEFICIT
|
(1,330.5
|
)
|
|
331.5
|
|
|
441.7
|
|
|
(907.0
|
)
|
|
(1,464.3
|
)
|
|||||
NONCONTROLLING INTEREST
|
—
|
|
|
133.6
|
|
|
0.2
|
|
|
—
|
|
|
133.8
|
|
|||||
TOTAL DEFICIT
|
(1,330.5
|
)
|
|
465.1
|
|
|
441.9
|
|
|
(907.0
|
)
|
|
(1,330.5
|
)
|
|||||
TOTAL LIABILITIES AND DEFICIT
|
$
|
1,253.0
|
|
|
$
|
1,388.4
|
|
|
$
|
387.3
|
|
|
$
|
(1,104.8
|
)
|
|
$
|
1,923.9
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the Year Ended December 31, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
1,644.6
|
|
|
$
|
444.6
|
|
|
$
|
—
|
|
|
$
|
2,089.2
|
|
Freight and venture partners' cost reimbursements
|
—
|
|
|
221.4
|
|
|
19.6
|
|
|
—
|
|
|
241.0
|
|
|||||
|
—
|
|
|
1,866.0
|
|
|
464.2
|
|
|
—
|
|
|
2,330.2
|
|
|||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
—
|
|
|
(1,400.6
|
)
|
|
(427.9
|
)
|
|
—
|
|
|
(1,828.5
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
465.4
|
|
|
36.3
|
|
|
—
|
|
|
501.7
|
|
|||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(81.4
|
)
|
|
(24.7
|
)
|
|
0.3
|
|
|
—
|
|
|
(105.8
|
)
|
|||||
Miscellaneous - net
|
(2.2
|
)
|
|
12.3
|
|
|
17.6
|
|
|
—
|
|
|
27.7
|
|
|||||
|
(83.6
|
)
|
|
(12.4
|
)
|
|
17.9
|
|
|
—
|
|
|
(78.1
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(83.6
|
)
|
|
453.0
|
|
|
54.2
|
|
|
—
|
|
|
423.6
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(126.8
|
)
|
|
(1.0
|
)
|
|
(4.2
|
)
|
|
—
|
|
|
(132.0
|
)
|
|||||
Loss on extinguishment/restructuring of debt
|
(165.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(165.4
|
)
|
|||||
Other non-operating income
|
0.1
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
|
(292.1
|
)
|
|
2.1
|
|
|
(4.2
|
)
|
|
—
|
|
|
(294.2
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(375.7
|
)
|
|
455.1
|
|
|
50.0
|
|
|
—
|
|
|
129.4
|
|
|||||
INCOME TAX BENEFIT (EXPENSE)
|
251.4
|
|
|
1.3
|
|
|
(0.3
|
)
|
|
—
|
|
|
252.4
|
|
|||||
EQUITY IN INCOME OF SUBSIDIARIES
|
512.6
|
|
|
11.8
|
|
|
—
|
|
|
(524.4
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
388.3
|
|
|
468.2
|
|
|
49.7
|
|
|
(524.4
|
)
|
|
381.8
|
|
|||||
LOSS (INCOME) FROM DISCONTINUED OPERATIONS, net of tax
|
(21.3
|
)
|
|
1.7
|
|
|
0.9
|
|
|
—
|
|
|
(18.7
|
)
|
|||||
NET INCOME
|
367.0
|
|
|
469.9
|
|
|
50.6
|
|
|
(524.4
|
)
|
|
363.1
|
|
|||||
LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
367.0
|
|
|
$
|
473.8
|
|
|
$
|
50.6
|
|
|
$
|
(524.4
|
)
|
|
$
|
367.0
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
(4.0
|
)
|
|
12.8
|
|
|
(5.2
|
)
|
|
(7.6
|
)
|
|
(4.0
|
)
|
|||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
363.0
|
|
|
$
|
486.6
|
|
|
$
|
45.4
|
|
|
$
|
(532.0
|
)
|
|
$
|
363.0
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the Year Ended December 31, 2016
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
1,379.6
|
|
|
$
|
533.9
|
|
|
$
|
—
|
|
|
$
|
1,913.5
|
|
Freight and venture partners' cost reimbursements
|
—
|
|
|
174.9
|
|
|
20.6
|
|
|
—
|
|
|
195.5
|
|
|||||
|
—
|
|
|
1,554.5
|
|
|
554.5
|
|
|
—
|
|
|
2,109.0
|
|
|||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
—
|
|
|
(1,278.8
|
)
|
|
(440.9
|
)
|
|
—
|
|
|
(1,719.7
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
275.7
|
|
|
113.6
|
|
|
—
|
|
|
389.3
|
|
|||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(97.9
|
)
|
|
(20.8
|
)
|
|
0.9
|
|
|
—
|
|
|
(117.8
|
)
|
|||||
Miscellaneous - net
|
(5.6
|
)
|
|
(10.8
|
)
|
|
(14.3
|
)
|
|
—
|
|
|
(30.7
|
)
|
|||||
|
(103.5
|
)
|
|
(31.6
|
)
|
|
(13.4
|
)
|
|
—
|
|
|
(148.5
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(103.5
|
)
|
|
244.1
|
|
|
100.2
|
|
|
—
|
|
|
240.8
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(195.0
|
)
|
|
0.6
|
|
|
(6.1
|
)
|
|
—
|
|
|
(200.5
|
)
|
|||||
Gain on extinguishment/restructuring of debt
|
166.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166.3
|
|
|||||
Other non-operating income (expense)
|
(0.5
|
)
|
|
0.4
|
|
|
0.5
|
|
|
—
|
|
|
0.4
|
|
|||||
|
(29.2
|
)
|
|
1.0
|
|
|
(5.6
|
)
|
|
—
|
|
|
(33.8
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(132.7
|
)
|
|
245.1
|
|
|
94.6
|
|
|
—
|
|
|
207.0
|
|
|||||
INCOME TAX BENEFIT
|
4.3
|
|
|
3.0
|
|
|
4.9
|
|
|
—
|
|
|
12.2
|
|
|||||
EQUITY IN INCOME OF SUBSIDIARIES
|
319.6
|
|
|
13.7
|
|
|
—
|
|
|
(333.3
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
191.2
|
|
|
261.8
|
|
|
99.5
|
|
|
(333.3
|
)
|
|
219.2
|
|
|||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
|
(17.1
|
)
|
|
2.6
|
|
|
(5.4
|
)
|
|
—
|
|
|
(19.9
|
)
|
|||||
NET INCOME
|
174.1
|
|
|
264.4
|
|
|
94.1
|
|
|
(333.3
|
)
|
|
199.3
|
|
|||||
INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
(25.2
|
)
|
|
—
|
|
|
—
|
|
|
(25.2
|
)
|
|||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
174.1
|
|
|
$
|
239.2
|
|
|
$
|
94.1
|
|
|
$
|
(333.3
|
)
|
|
$
|
174.1
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
(3.3
|
)
|
|
(20.7
|
)
|
|
13.8
|
|
|
6.9
|
|
|
(3.3
|
)
|
|||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
170.8
|
|
|
$
|
218.5
|
|
|
$
|
107.9
|
|
|
$
|
(326.4
|
)
|
|
$
|
170.8
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the Year Ended December 31, 2015
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
1,368.1
|
|
|
$
|
464.3
|
|
|
$
|
—
|
|
|
$
|
1,832.4
|
|
Freight and venture partners' cost reimbursements
|
—
|
|
|
157.3
|
|
|
23.6
|
|
|
—
|
|
|
180.9
|
|
|||||
|
—
|
|
|
1,525.4
|
|
|
487.9
|
|
|
—
|
|
|
2,013.3
|
|
|||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
—
|
|
|
(1,298.3
|
)
|
|
(478.5
|
)
|
|
—
|
|
|
(1,776.8
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
227.1
|
|
|
9.4
|
|
|
—
|
|
|
236.5
|
|
|||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(88.5
|
)
|
|
(21.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(110.0
|
)
|
|||||
Miscellaneous - net
|
7.7
|
|
|
(3.0
|
)
|
|
20.1
|
|
|
—
|
|
|
24.8
|
|
|||||
|
(80.8
|
)
|
|
(24.2
|
)
|
|
19.8
|
|
|
—
|
|
|
(85.2
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(80.8
|
)
|
|
202.9
|
|
|
29.2
|
|
|
—
|
|
|
151.3
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(221.4
|
)
|
|
(0.1
|
)
|
|
(7.0
|
)
|
|
—
|
|
|
(228.5
|
)
|
|||||
Gain on extinguishment/restructuring of debt
|
392.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
392.9
|
|
|||||
Other non-operating income (expense)
|
(114.6
|
)
|
|
1.2
|
|
|
110.8
|
|
|
—
|
|
|
(2.6
|
)
|
|||||
|
56.9
|
|
|
1.1
|
|
|
103.8
|
|
|
—
|
|
|
161.8
|
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY LOSS FROM VENTURES
|
(23.9
|
)
|
|
204.0
|
|
|
133.0
|
|
|
—
|
|
|
313.1
|
|
|||||
INCOME TAX BENEFIT (EXPENSE)
|
(19.1
|
)
|
|
(176.3
|
)
|
|
26.1
|
|
|
—
|
|
|
(169.3
|
)
|
|||||
EQUITY IN INCOME (LOSS) OF SUBSIDIARIES
|
(501.2
|
)
|
|
12.9
|
|
|
—
|
|
|
488.3
|
|
|
—
|
|
|||||
EQUITY LOSS FROM VENTURES, net of tax
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(544.2
|
)
|
|
40.6
|
|
|
159.0
|
|
|
488.3
|
|
|
143.7
|
|
|||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
|
(205.1
|
)
|
|
(762.2
|
)
|
|
75.2
|
|
|
—
|
|
|
(892.1
|
)
|
|||||
NET INCOME (LOSS)
|
(749.3
|
)
|
|
(721.6
|
)
|
|
234.2
|
|
|
488.3
|
|
|
(748.4
|
)
|
|||||
LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
(8.6
|
)
|
|
7.7
|
|
|
—
|
|
|
(0.9
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
(749.3
|
)
|
|
$
|
(730.2
|
)
|
|
$
|
241.9
|
|
|
$
|
488.3
|
|
|
$
|
(749.3
|
)
|
PREFERRED STOCK DIVIDENDS
|
(38.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.4
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS
|
$
|
(787.7
|
)
|
|
$
|
(730.2
|
)
|
|
$
|
241.9
|
|
|
$
|
488.3
|
|
|
$
|
(787.7
|
)
|
OTHER COMPREHENSIVE INCOME
|
266.2
|
|
|
20.0
|
|
|
176.4
|
|
|
(196.4
|
)
|
|
266.2
|
|
|||||
TOTAL COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
(521.5
|
)
|
|
$
|
(710.2
|
)
|
|
$
|
418.3
|
|
|
$
|
291.9
|
|
|
$
|
(521.5
|
)
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Year Ended December 31, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(166.8
|
)
|
|
$
|
430.4
|
|
|
$
|
74.5
|
|
|
$
|
—
|
|
|
$
|
338.1
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(3.4
|
)
|
|
(80.6
|
)
|
|
(67.7
|
)
|
|
—
|
|
|
(151.7
|
)
|
|||||
Intercompany investing
|
225.7
|
|
|
(7.4
|
)
|
|
(45.0
|
)
|
|
(173.3
|
)
|
|
—
|
|
|||||
Other investing activities
|
(7.7
|
)
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|||||
Net cash provided (used) in investing activities
|
214.6
|
|
|
(84.6
|
)
|
|
(112.7
|
)
|
|
(173.3
|
)
|
|
(156.0
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from issuance of common shares
|
661.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
661.3
|
|
|||||
Proceeds from issuance of debt
|
1,771.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,771.5
|
|
|||||
Debt issuance costs
|
(28.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.6
|
)
|
|||||
Repurchase of debt
|
(1,720.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,720.7
|
)
|
|||||
Acquisition of noncontrolling interest
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105.0
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(52.9
|
)
|
|
—
|
|
|
—
|
|
|
(52.9
|
)
|
|||||
Intercompany financing
|
45.0
|
|
|
(288.8
|
)
|
|
70.5
|
|
|
173.3
|
|
|
—
|
|
|||||
Other financing activities
|
(5.8
|
)
|
|
(4.5
|
)
|
|
(16.4
|
)
|
|
—
|
|
|
(26.7
|
)
|
|||||
Net cash provided (used) by financing activities
|
617.7
|
|
|
(346.2
|
)
|
|
54.1
|
|
|
173.3
|
|
|
498.9
|
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
665.5
|
|
|
(0.4
|
)
|
|
19.2
|
|
|
—
|
|
|
684.3
|
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
283.4
|
|
|
2.5
|
|
|
37.5
|
|
|
—
|
|
|
323.4
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
948.9
|
|
|
$
|
2.1
|
|
|
$
|
56.7
|
|
|
$
|
—
|
|
|
$
|
1,007.7
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Year Ended December 31, 2016
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(275.7
|
)
|
|
$
|
462.9
|
|
|
$
|
115.8
|
|
|
$
|
—
|
|
|
$
|
303.0
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(6.2
|
)
|
|
(60.0
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(69.1
|
)
|
|||||
Intercompany investing
|
356.6
|
|
|
(3.3
|
)
|
|
(117.0
|
)
|
|
(236.3
|
)
|
|
—
|
|
|||||
Other investing activities
|
0.4
|
|
|
10.8
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|||||
Net cash provided (used) by investing activities
|
350.8
|
|
|
(52.5
|
)
|
|
(119.9
|
)
|
|
(236.3
|
)
|
|
(57.9
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from issuance of common shares
|
287.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287.4
|
|
|||||
Debt issuance costs
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|||||
Borrowings under credit facilities
|
105.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105.0
|
|
|||||
Repayments under credit facilities
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105.0
|
)
|
|||||
Repayments on equipment loans
|
(95.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95.6
|
)
|
|||||
Repurchase of debt
|
(305.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(305.4
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(59.9
|
)
|
|
—
|
|
|
—
|
|
|
(59.9
|
)
|
|||||
Intercompany financing
|
117.0
|
|
|
(339.9
|
)
|
|
(13.4
|
)
|
|
236.3
|
|
|
—
|
|
|||||
Other financing activities
|
(0.6
|
)
|
|
(9.9
|
)
|
|
(17.2
|
)
|
|
—
|
|
|
(27.7
|
)
|
|||||
Net cash used by financing activities
|
(2.4
|
)
|
|
(409.7
|
)
|
|
(30.6
|
)
|
|
236.3
|
|
|
(206.4
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
72.7
|
|
|
0.7
|
|
|
(35.2
|
)
|
|
—
|
|
|
38.2
|
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
210.7
|
|
|
1.8
|
|
|
72.7
|
|
|
—
|
|
|
285.2
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
283.4
|
|
|
$
|
2.5
|
|
|
$
|
37.5
|
|
|
$
|
—
|
|
|
$
|
323.4
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Year Ended December 31, 2015
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
65.6
|
|
|
$
|
(23.7
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
—
|
|
|
$
|
37.9
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(6.9
|
)
|
|
(68.2
|
)
|
|
(5.7
|
)
|
|
—
|
|
|
(80.8
|
)
|
|||||
Intercompany investments
|
(205.8
|
)
|
|
(2.9
|
)
|
|
(80.0
|
)
|
|
288.7
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
(27.6
|
)
|
|
5.2
|
|
|
—
|
|
|
(22.4
|
)
|
|||||
Net cash used by investing activities
|
(212.7
|
)
|
|
(98.7
|
)
|
|
(80.5
|
)
|
|
288.7
|
|
|
(103.2
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
503.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
503.5
|
|
|||||
Debt issuance costs
|
(33.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.6
|
)
|
|||||
Borrowings under credit facilities
|
296.8
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
309.8
|
|
|||||
Repayments on credit facilities
|
(296.8
|
)
|
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
(309.8
|
)
|
|||||
Repayments on equipment loans
|
(43.6
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(45.4
|
)
|
|||||
Repurchase of debt
|
(225.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(225.9
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(40.6
|
)
|
|
—
|
|
|
—
|
|
|
(40.6
|
)
|
|||||
Preferred stock dividends
|
(51.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51.2
|
)
|
|||||
Intercompany financing
|
80.0
|
|
|
188.5
|
|
|
20.2
|
|
|
(288.7
|
)
|
|
—
|
|
|||||
Other financing activities
|
(5.0
|
)
|
|
(25.0
|
)
|
|
(15.8
|
)
|
|
—
|
|
|
(45.8
|
)
|
|||||
Net cash provided by financing activities
|
224.2
|
|
|
122.9
|
|
|
2.6
|
|
|
(288.7
|
)
|
|
61.0
|
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
77.1
|
|
|
0.5
|
|
|
(83.3
|
)
|
|
—
|
|
|
(5.7
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
133.6
|
|
|
1.3
|
|
|
156.0
|
|
|
—
|
|
|
290.9
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
210.7
|
|
|
$
|
1.8
|
|
|
$
|
72.7
|
|
|
$
|
—
|
|
|
$
|
285.2
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Exhibit
Number
|
Exhibit
|
|
Plan of purchase, sale, reorganization, arrangement, liquidation or succession
|
***Unit Purchase Agreement, dated as of December 22, 2015, by and among Cliffs Natural Resources Inc., CLF PinnOak LLC and Seneca Coal Resources, LLC (filed as Exhibit 2.3 to Cliffs’ Form 10-K for the period ended December 31, 2015 and incorporated herein by reference)
|
|
|
Articles of Incorporation and By-Laws of Cleveland-Cliffs Inc.
|
Third Amended Articles of Incorporation of Cliffs (as filed with the Secretary of State of the State of Ohio on May 13, 2013 (filed as Exhibit 3.1 to Cliffs’ Form 8-K on May 13, 2013 and incorporated herein by reference)
|
|
Certificate of Amendment to Third Amended Articles of Incorporation of Cliffs (as filed with the Secretary of State of the State of Ohio on April 26, 2017 (filed as Exhibit 3.1 to Cliffs’ Form 8-K on April 27, 2017 and incorporated herein by reference)
|
|
Certificate of Amendment to Third Amended Articles of Incorporation of Cliffs, as amended (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)
|
|
Regulations of Cliffs (filed as Exhibit 3.2 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
|
Instruments defining rights of security holders, including indentures
|
Indenture between Cliffs Natural Resources Inc. and U.S. Bank National Association, as trustee, dated March 17, 2010 (filed as Exhibit 4.3 to Cliffs’ Registration Statement on Form S-3 No. 333-186617 on February 12, 2013 and incorporated herein by reference)
|
|
Form of 5.90% Notes due 2020 First Supplemental Indenture between Cliffs Natural Resources Inc. and U.S. Bank National Association, as trustee, dated March 17, 2010, including Form of 5.90% Notes due 2020 (filed as Exhibit 4.2 to Cliffs’ Form 8-K on March 16, 2010 and incorporated herein by reference)
|
*Sixth Amendment to Trust Agreement No. 5 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of December 31, 2008 (filed as Exhibit 10(hh) to Cliffs’ Form 10-K for the period ended December 31, 2008 and incorporated herein by reference)
|
|
*Seventh Amendment to Trust Agreement No. 5 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of July 28, 2014 (filed as Exhibit 10.26 to Cliffs’ Form 10-K for the period ended December 31, 2014 and incorporated herein by reference)
|
|
* Trust Agreement No. 7, dated as of April 9, 1991, by and between Cliffs Natural Resources Inc and KeyBank National Association, Trustee, with respect to the Cleveland-Cliffs Inc Supplemental Retirement Benefit Plan (filed as Exhibit 10.23 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* First Amendment to Trust Agreement No. 7, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee, dated as of March 9, 1992 (filed as Exhibit 10.24 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Second Amendment to Trust Agreement No. 7, dated November 18, 1994, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee (filed as Exhibit 10.25 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Third Amendment to Trust Agreement No. 7, dated May 23, 1997, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee (filed as Exhibit 10.26 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Fourth Amendment to Trust Agreement No. 7, dated July 15, 1997, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee (filed as Exhibit 10.27 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Amendment to Exhibits to Trust Agreement No. 7, effective as of January 1, 2000, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee (filed as Exhibit 10.28 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Sixth Amendment to Trust Agreement No. 7 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of December 31, 2008 (filed as Exhibit 10(oo) to Cliffs’ Form 10-K for the period ended December 31, 2008 and incorporated herein by reference)
|
|
* Seventh Amendment to Trust Agreement No. 7 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of July 28, 2014 (filed as Exhibit 10.34 to Cliffs’ Form 10-K for the period ended December 31, 2014 and incorporated herein by reference)
|
|
* Trust Agreement No. 10, dated as of November 20, 1996, by and between Cleveland-Cliffs Inc and KeyBank National Association, Trustee, with respect to the Cleveland-Cliffs Inc Nonemployee Directors’ Compensation Plan (filed as Exhibit 10.36 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
*First Amendment to Trust Agreement No. 10 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of December 31, 2008 (filed as Exhibit 10(ww) to Cliffs’ Form 10-K for the period ended February 26, 2009 and incorporated herein by reference)
|
|
* Second Amendment to Trust Agreement No. 10 between Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc) and KeyBank National Association, Trustee, entered into and effective as of July 28, 2014 (filed as Exhibit 10.45 to Cliffs’ Form 10-K for the period ended December 31, 2014 and incorporated herein by reference)
|
|
*Severance Agreement and Release, by and between P. Kelly Tompkins and Cleveland-Cliffs Inc., effective December 31, 2017 (filed herewith)
|
|
* Letter Agreement, by and between Lourenco Goncalves and Cliffs Natural Resources Inc., signed as of September 11, 2014 (filed as Exhibit 10.1 to Cliffs’ Form 8-K/A on September 16, 2014 and incorporated herein by reference)
|
|
* Cleveland-Cliffs Inc and Subsidiaries Management Performance Incentive Plan Summary, effective January 1, 2004 (filed as Exhibit 10.47 to Cliffs’ Form 10-K for the period ended December 31, 2011 and incorporated herein by reference)
|
|
* Cliffs Natural Resources Inc. 2012 Executive Management Performance Incentive Plan effective March 13, 2012 (filed as Exhibit 10.3 to Cliffs’ Form 8-K on May 14, 2012 and incorporated herein by reference)
|
|
* Cliffs Natural Resources Inc. 2017 Executive Management Performance Incentive Plan effective January 1, 2017 (filed as Exhibit 10.2 to Cliffs' Form 8-K on April 27, 2017 and incorporated herein by reference)
|
|
* Cliffs Natural Resources Inc. Amended and Restated 2012 Incentive Equity Plan (filed as Exhibit 10.1 to Cliffs’ Form 8-K on August 4, 2014 and incorporated herein by reference)
|
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 February 14, 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 February 14, 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 February 14, 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 February 14, 2018 (filed herewith)
|
|
Mine Safety Disclosures (filed herewith)
|
|
Schedule II – Valuation and Qualifying Accounts (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
|
**
|
Confidential treatment requested and/or approved as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.
|
***
|
Certain immaterial schedules and exhibits to this exhibit have been omitted pursuant to the provisions of Regulation S-K, Item 601(b)(2). A copy of any of the omitted schedules and exhibits will be furnished to the Securities and Exchange Commission upon request.
|
Item 16.
|
Form 10-K Summary
|
|
|
|
CLEVELAND-CLIFFS INC.
|
||||
|
|
|
|
|
|||
|
|
|
By:
|
|
/s/ R. C. Cebula
|
||
|
|
|
|
|
Name:
|
|
R. Christopher Cebula
|
|
|
|
|
|
Title:
|
|
Vice President, Corporate Controller &
|
Date:
|
February 14, 2018
|
|
|
|
|
|
Chief Accounting Officer
|
Signatures
|
Title
|
Date
|
|||
|
|
|
|||
/s/ C. L. Goncalves
|
Chairman, President and
|
February 14, 2018
|
|||
C. L. Goncalves
|
Chief Executive Officer
|
|
|||
|
(Principal Executive Officer)
|
|
|||
/s/ T. K. Flanagan
|
Executive Vice President,
|
February 14, 2018
|
|||
T. K. Flanagan
|
Chief Financial Officer
|
|
|||
|
(Principal Financial Officer)
|
|
|||
/s/ R. C. Cebula
|
Vice President, Corporate Controller &
|
February 14, 2018
|
|||
R. C. Cebula
|
Chief Accounting Officer
|
|
|||
|
(Principal Accounting Officer)
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
J. T. Baldwin
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
R. P. Fisher, Jr.
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
S. M. Green
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
J. A. Rutkowski, Jr.
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
E. M. Rychel
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
M. D. Siegal
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
G. Stoliar
|
|
|
|||
*
|
Director
|
February 14, 2018
|
|||
D. C. Taylor
|
|
|
By:
|
/s/ T. K. Flanagan
|
|
(T. K. Flanagan, as Attorney-in-Fact)
|
CLIFFS EMPIRE II INC., as a Guarantor
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Treasurer
|
EMPIRE IRON MINING PARTNERSHIP, as a Guarantor
|
|
By: The Cleveland-Cliffs Iron Company, as its manager
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
CLEVELAND-CLIFFS INC.
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
|
|
|
By:
|
/s/ Elizabeth A. Thuning
|
|
Name: Elizabeth A. Thuning
|
|
Title: Vice President
|
CLIFFS TIOP II LLC, as a Guarantor
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Treasurer
|
MARQUETTE RANGE COAL SERVICE COMPANY,
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Treasurer
|
TILDEN MINING COMPANY L.C., as a Guarantor
|
|
By: The Cleveland-Cliffs Iron Company, as its manager
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
CLEVELAND-CLIFFS INC.
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
Name: Timothy K. Flanagan
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
|
|
|
By:
|
/s/ Elizabeth A. Thuning
|
|
Name: Elizabeth A. Thuning
|
|
Title: Vice President
|
1.
|
A lump sum cash payment equal to Seventy Thousand Dollars ($70,000), paid, less appropriate federal, State of Ohio and local withholdings and deductions, in a lump sum within fifteen (15) days after the Effective Date (the “Payment Date”).
|
2.
|
Employee shall continue to be covered by any provision for indemnification by the Company in effect on the date of the execution of this Agreement for so long as it provides such indemnification for its active senior executives. In addition, the Company shall continue to maintain D&O coverage that covers past executives to the same extent that it covers present executives. Finally, in the event of a change in control in which the Company is not the survivor, the Company shall use its reasonable
|
3.
|
Employee shall receive continued tax support services through April 30, 2018, including assistance with the filing of Employee’s 2017 tax return.
|
•
|
Employee has the sole right and exclusive authority to execute this Agreement.
|
•
|
The Company and the Plan are not obligated to pay, and will not pay, to Employee any Payment until the Release has become effective.
|
•
|
Employee signs this Agreement knowingly and voluntarily, in order to induce Company to provide the Payments.
|
•
|
Employee has not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Agreement.
|
•
|
No other person or entity has an interest in the claims, demands, obligations or causes of action referred to in this Agreement.
|
•
|
The Payments that Employee will receive in exchange for signing this Agreement and the Release are in addition to anything of value to which Employee is already entitled.
|
•
|
The Payments provided for in this Agreement are the only consideration that Employee ever will receive from the Company or any Released Parties (as defined below) for any and all claims, demands, obligations or causes of action released in this Agreement or the Release.
|
•
|
This Agreement and its terms shall not be construed as an admission of any liability whatsoever on the part of the Company or any other Released Parties described in this Agreement, by which/whom any liability is and always has been expressly denied.
|
•
|
As of the date of execution of this Agreement, Employee has not filed any administrative charges or lawsuits arising out of or relating to his employment with the Company or the separation of that employment.
|
•
|
As of the date of execution of this Agreement, Employee has no work-related injury and is medically stationary with no impairment of earning capacity.
|
•
|
Cleveland-Cliffs Inc.
|
•
|
Cliffs Natural Resources Inc.;
|
•
|
Northshore Mining Company;
|
•
|
Silver Bay Power Company;
|
•
|
Tilden Mining Company LC;
|
•
|
Empire Iron Mining Partnership;
|
•
|
Cliffs Mining Company;
|
•
|
Hibbing Taconite Company Joint Venture;
|
•
|
United Taconite LLC;
|
•
|
The Cleveland-Cliffs Iron Company;
|
•
|
Cliffs Mining Services Company;
|
•
|
Lake Superior & Ishpeming Railroad Company;
|
•
|
Cliffs International Management Company LLC;
|
•
|
Cliffs Sales Company;
|
•
|
Cliffs Natural Resources Exploration Ltda.;
|
•
|
Cliffs Natural Resources Pty Ltd;
|
•
|
All affiliates of Cleveland-Cliffs Inc. not already listed above, including any corporation or other entity which is controlled by or under common control with Cleveland-Cliffs Inc., or which is in the same affiliated service group or otherwise required to be aggregated with Cleveland-Cliffs Inc. under Sections 414 or 1563 of the Internal Revenue Code;
|
•
|
All current or former owners, officers, directors, shareholders, members, employees, managers, agents, attorneys, partners and insurers of the above entities; and
|
•
|
The predecessors, successors, and assigns of the above entities and individuals and the spouses, children, and family members of the individuals.
|
•
|
The federal Civil Rights Acts of 1866, 1871, 1964 and 1991 and all similar state civil rights statutes;
|
•
|
Unpaid wages, salary, commissions, vacation or other employee benefits;
|
•
|
Claims for Payments under this Agreement; or
|
•
|
Claims for benefits under any pension plan of the Company; or
|
•
|
Claims arising out of acts or practices which occur after the execution of this Agreement.
|
VI.
|
CONFIDENTIAL INFORMATION AND COVENANTS
|
|
|
CLEVELAND-CLIFFS INC.
|
|
|
/s/ Maurice D. Harapiak
|
|
|
Executive Vice President, Human Resources
|
|
|
|
|
|
|
Date: 21 Nov 2017
|
|
/s/ P. Kelly Tompkins
|
|
|
P. Kelly Tompkins
|
•
|
Employee has the sole right and exclusive authority to execute this Release.
|
•
|
The Company and the Plan are not obligated to pay, and will not pay, to Employee any Payment until this Release has become effective.
|
•
|
Employee signs this Release knowingly and voluntarily, in order to induce Company to provide the Payments.
|
•
|
Employee has not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Release.
|
•
|
No other person or entity has an interest in the claims, demands, obligations or causes of action referred to in this Release.
|
•
|
The Payments that Employee will receive in exchange for signing this Release are in addition to anything of value to which Employee is already entitled.
|
•
|
The Payments provided for in the Agreement are the only consideration that Employee ever will receive from the Company or any Released Parties (as defined below) for any and all claims, demands, obligations or causes of action released in this Release.
|
•
|
This Release and its terms shall not be construed as an admission of any liability whatsoever on the part of the Company or any other Released Parties described in this Release, by which/whom any liability is and always has been expressly denied.
|
•
|
As of the date of execution of this Release, Employee has not filed any administrative charges or lawsuits arising out of or relating to his employment with the Company or the separation of that employment.
|
•
|
As of the date of execution of this Release, Employee has no work-related injury and is medically stationary with no impairment of earning capacity.
|
•
|
Cleveland-Cliffs Inc.
|
•
|
Cliffs Natural Resources Inc.;
|
•
|
Northshore Mining Company;
|
•
|
Silver Bay Power Company;
|
•
|
Tilden Mining Company LC;
|
•
|
Empire Iron Mining Partnership;
|
•
|
Cliffs Mining Company;
|
•
|
Hibbing Taconite Company Joint Venture;
|
•
|
United Taconite LLC;
|
•
|
The Cleveland-Cliffs Iron Company;
|
•
|
Cliffs Mining Services Company;
|
•
|
Lake Superior & Ishpeming Railroad Company;
|
•
|
Cliffs International Management Company LLC;
|
•
|
Cliffs Sales Company;
|
•
|
Cliffs Natural Resources Exploration Ltda.;
|
•
|
Cliffs Natural Resources Pty Ltd;
|
•
|
All affiliates of Cleveland-Cliffs Inc. not already listed above, including any corporation or other entity which is controlled by or under common control with Cleveland-Cliffs Inc., or which is in the same affiliated service group or otherwise required to be aggregated with Cleveland-Cliffs Inc. under Sections 414 or 1563 of the Internal Revenue Code;
|
•
|
All current or former owners, officers, directors, shareholders, members, employees, managers, agents, attorneys, partners and insurers of the above entities; and
|
•
|
The predecessors, successors, and assigns of the above entities and individuals and the spouses, children, and family members of the individuals.
|
•
|
The federal Civil Rights Acts of 1866, 1871, 1964 and 1991 and all similar state civil rights statutes;
|
•
|
Unpaid wages, salary, commissions, vacation or other employee benefits;
|
•
|
Claims for Payments under the Agreement; or
|
•
|
Claims for benefits under any pension plan of the Company; or
|
•
|
Claims arising out of acts or practices which occur after the execution of this Release.
|
V.
|
TIME TO CONSIDER AND CANCEL RELEASE; EFFECTIVE DATE
|
|
|
CLEVELAND-CLIFFS INC.
|
|
|
/s/ Maurice D. Harapiak
|
|
|
Maurice D. Harapiak
|
|
|
Executive Vice President, Human Resources
|
|
|
|
|
|
|
Date: 21 Nov 2017
|
|
/s/ P. Kelly Tompkins
|
|
|
P. Kelly Tompkins
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
If to Cliffs:
|
Cliffs Mining Company
200 Public Square, Suite 3300
Cleveland, Ohio 44114
Attention: Executive Vice President, Global Commercial
Terrence.mee@cliffsnr.com
cc: Assistant General Counsel Commercial
susanne.dickerson@cliffsnr.com
|
If to AK Steel:
|
AK Steel Corporation
9227 Centre Pointe Drive
West Chester, OH 45069
Attn: General Manager, Raw Materials Purchasing
stephen.taylor@aksteel.com
cc: Vice President - Engineering, Raw Materials & Energy
mo.reed@aksteel.com
|
(i).
|
The place of arbitration shall be Cleveland, Ohio;
|
CLIFFS MINING COMPANY
|
|
AK STEEL CORPORATION
|
||
By:
|
/s/ Terrence R. Mee
|
|
By:
|
/s/ Maurice Reed
|
Name:
|
Terrence R. Mee
|
|
Name:
|
Maurice Reed
|
Title:
|
Sr. Vice President
|
|
Title:
|
VP Engineering, Raw Materials & Energy
|
|
|
|
|
|
THE CLEVELAND-CLIFFS IRON COMPANY
|
|
|
|
|
By:
|
/s/ Terrence R. Mee
|
|
|
|
Name:
|
Terrence R. Mee
|
|
|
|
Title:
|
Vice President
|
|
|
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
CLEVELAND-CLIFFS INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
|
EXHIBIT II
|
|||||||||||||||||||||
CLIFFS MINING COMPANY
|
|||||||||||||||||||||
AK STEEL CORPORATION
|
|||||||||||||||||||||
PELLET TYPICAL ANALYSIS AS LOADED TO VESSEL FOR SHIPMENT
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Report
|
|
|
TILDEN HEMATITE
|
|
|
TILDEN MAGNETITE
|
||||||||
|
|
|
|
|
|
|
Frequency
|
|
|
Typical
|
|
Minimum
|
|
Maximum
|
|
|
Typical
|
|
Minimum
|
|
Maximum
|
Moisture
|
|
V
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
|||||
A. DRY CHEMICAL ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Fe
|
|
V
|
|
|
61.5
|
|
***
|
|
|
|
|
61.3
|
|
***
|
|
|
||||
|
SiO2
|
|
V
|
|
|
***
|
|
***
|
|
***
|
|
|
***
|
|
***
|
|
***
|
||||
|
AI2O3
|
|
V
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
|
CaO
|
|
V
|
|
|
***
|
|
***
|
|
***
|
|
|
***
|
|
***
|
|
***
|
||||
|
MgO
|
|
V
|
|
|
***
|
|
***
|
|
***
|
|
|
***
|
|
***
|
|
***
|
||||
|
Mn
|
|
V
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
|
Phos
|
|
V
|
|
|
***
|
|
|
|
***
|
|
|
***
|
|
|
|
***
|
||||
|
Na2O
|
|
Q
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
|
K2O
|
|
Q
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
B. SIZING, Wt. %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
% + 1/2"
|
|
V
|
|
|
***
|
|
|
|
***
|
|
|
***
|
|
|
|
***
|
||||
|
% - 1/2" x + 3/8"
|
|
V
|
|
|
***
|
|
***
|
|
|
|
|
***
|
|
***
|
|
|
||||
|
% - 3/8" x + 1/4"
|
|
V
|
|
|
***
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
% - 1/4"
|
|
V
|
|
|
***
|
|
|
|
***
|
|
|
***
|
|
|
|
***
|
||||
C. TUMBLE TEST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
% + 1/4" before tumble
|
|
V
|
|
|
***
|
|
***
|
|
|
|
|
***
|
|
|
|
|
||||
|
% + 1/4" after tumble
|
|
V
|
|
|
***
|
|
***
|
|
|
|
|
***
|
|
***
|
|
|
||||
|
Q Index
|
|
V
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
|
Tumble Index - 28 mesh
|
|
V
|
|
|
***
|
|
|
|
|
|
|
***
|
|
|
|
|
||||
D. COMPRESSION TEST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Minus 1/2" by plus 3/8"
|
|
V
|
|
|
***
|
|
***
|
|
|
|
|
***
|
|
***
|
|
|
Ratio of Earnings To Combined Fixed Charges
|
|||||||||||||||||||
And Preferred Stock Dividend Requirements
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Consolidated pretax income (loss) from continuing operations
|
$
|
129.4
|
|
|
$
|
207.0
|
|
|
$
|
313.1
|
|
|
$
|
(19.7
|
)
|
|
$
|
1,190.9
|
|
Undistributed earnings of non-consolidated affiliates
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(9.9
|
)
|
|
(74.4
|
)
|
|||||
Amortization of capitalized interest
|
—
|
|
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
|
2.3
|
|
|||||
Interest expense
|
135.2
|
|
|
201.1
|
|
|
230.0
|
|
|
178.3
|
|
|
189.9
|
|
|||||
Acceleration of debt issuance costs
|
116.3
|
|
|
35.6
|
|
|
11.3
|
|
|
3.6
|
|
|
—
|
|
|||||
Interest portion of rental expense
|
0.2
|
|
|
0.3
|
|
|
0.9
|
|
|
2.3
|
|
|
2.1
|
|
|||||
Total Earnings
|
$
|
381.1
|
|
|
$
|
444.1
|
|
|
$
|
555.5
|
|
|
$
|
154.9
|
|
|
$
|
1,310.8
|
|
Interest expense
|
$
|
135.2
|
|
|
$
|
201.1
|
|
|
$
|
230.0
|
|
|
$
|
178.3
|
|
|
$
|
189.9
|
|
Acceleration of debt issuance costs
|
116.3
|
|
|
35.6
|
|
|
11.3
|
|
|
3.6
|
|
|
—
|
|
|||||
Interest portion of rental expense
|
0.2
|
|
|
0.3
|
|
|
0.9
|
|
|
2.3
|
|
|
2.1
|
|
|||||
Preferred Stock dividend requirements
|
—
|
|
|
—
|
|
|
38.4
|
|
|
51.2
|
|
|
48.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges Requirements
|
$
|
251.7
|
|
|
$
|
237.0
|
|
|
$
|
280.6
|
|
|
$
|
235.4
|
|
|
$
|
240.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges and Preferred Stock Dividend
Requirements
|
$
|
251.7
|
|
|
$
|
237.0
|
|
|
$
|
280.6
|
|
|
$
|
235.4
|
|
|
$
|
240.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
1.5
|
|
1.9
|
|
2.0
|
|
(A)
|
|
5.4
|
||||||||||
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
|
1.5
|
|
1.9
|
|
2.0
|
|
(A)
|
|
5.4
|
||||||||||
(A) For the year ended December 31, 2014, there was a deficiency of earnings to cover the fixed charges of $235.4 million.
|
SIGNIFICANT SUBSIDIARIES
|
CLEVELAND-CLIFFS INC. AS OF DECEMBER 31, 2017
|
Name
|
Cliffs' Effective Ownership
|
Place of Incorporation
|
Cleveland-Cliffs International Holding Company
|
100%
|
Delaware, USA
|
Cleveland-Cliffs Ore Corporation
|
100%
|
Ohio, USA
|
Cliffs Finance US LLC
|
100%
|
Ohio, USA
|
Cliffs Finance Lux SCS
|
100%
|
Luxembourg
|
Cliffs (Gibraltar) Holdings Limited
|
100%
|
Gibraltar
|
Cliffs (Gibraltar) Holdings Limited Luxembourg S.C.S.
|
100%
|
Luxembourg
|
Cliffs (Gibraltar) Limited
|
100%
|
Gibraltar
|
Cliffs Mining Company
|
100%
|
Delaware, USA
|
Cliffs Minnesota Mining Company
|
100%
|
Delaware, USA
|
Cliffs Natural Resources Pty Ltd.
|
100%
|
WA Australia
|
Cliffs Natural Resources Holdings Pty Ltd.
|
100%
|
WA Australia
|
Cliffs Natural Resources Luxembourg S.a.r.l
|
100%
|
Luxembourg
|
Cliffs TIOP Holding, LLC
|
100%
|
Delaware, USA
|
Cliffs TIOP, Inc.
|
100%
|
Michigan, USA
|
Cliffs TIOP II, LLC
|
100%
|
Ohio, USA
|
Cliffs UTAC Holding LLC
|
100%
|
Delaware, USA
|
The Cleveland-Cliffs Iron Company
|
100%
|
Ohio, USA
|
Tilden Mining Company L.C.
|
100%
|
Michigan, USA
|
Lake Superior & Ishpeming Railroad Company
|
100%
|
Michigan, USA
|
Cliffs PinnOak LLC
|
100%
|
Ohio, USA
|
Cliffs Marquette, Inc.
|
100%
|
Michigan, USA
|
Marquette Iron Mining Partnership
|
100%
|
Michigan, USA
|
Northshore Mining Company
|
100%
|
Michigan, USA
|
Pickands Hibbing Corporation
|
100%
|
Minnesota, USA
|
Cliffs Pickands Holding, LLC
|
100%
|
Delaware, USA
|
/s/ C. L. Goncalves
|
|
/s/ T. K. Flanagan
|
C. L. Goncalves,
Chairman, President and Chief Executive Officer
|
|
T. K. Flanagan,
Executive Vice President, Chief Financial Officer
|
/s/ R. C. Cebula
|
|
/s/ J. T. Baldwin
|
R. C. Cebula,
Vice President, Corporate Controller & Chief Accounting Officer
|
|
J. T. Baldwin, Director
|
/s/ R. P. Fisher, Jr.
|
|
/s/ S. M. Green
|
R. P. Fisher, Jr., Director
|
|
S. M. Green, Director
|
/s/ J. A. Rutkowski, Jr.
|
|
/s/ E. M. Rychel
|
J. A. Rutkowski, Jr., Director
|
|
E. M. Rychel, Director
|
/s/ M. D. Siegal
|
|
/s/ G. Stoliar
|
M. D. Siegal, Director
|
|
G. Stoliar, Director
|
/s/ D. C. Taylor
|
|
|
D. C. Taylor, Director
|
|
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 14, 2018
|
|
By:
|
|
/s/ Lourenco Goncalves
|
|
|
|
|
|
Lourenco Goncalves
|
|
|
|
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 14, 2018
|
|
By:
|
|
/s/ Timothy K. Flanagan
|
|
|
|
|
|
Timothy K. Flanagan
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Form 10-K 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-K 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-K.
|
Date:
|
|
February 14, 2018
|
|
|
|
|
|
|
|
By:
|
/s/ Lourenco Goncalves
|
|
|
|
Lourenco Goncalves
|
|
|
|
Chairman, President and Chief Executive Officer
|
(1)
|
The Form 10-K 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-K 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-K.
|
Date:
|
|
February 14, 2018
|
|
|
|
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
|
|
|
Timothy K. Flanagan
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(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.
|
(1)
|
Amounts included under the heading “Total Dollar Value of MSHA Proposed Assessments” are the total dollar amounts for proposed assessments received from MSHA on or before
December 31, 2017
.
|
(2)
|
This number consists of 17 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules, 10 pending legal actions related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules, and 2 pending legal actions related to complaints of discharge, discrimination, or interference referenced in Subpart E of FMSH Act's procedural rules.
|
(3)
|
This number consists of 7 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
Cleveland-Cliffs Inc. and Subsidiaries
|
|||||||||||||||||||||||
Schedule II – Valuation and Qualifying Accounts
|
|||||||||||||||||||||||
(Dollars in Millions)
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
Additions
|
|
|
|
|
||||||||||||||||
|
Balance at Beginning of Year
|
|
Charged to Cost and Expenses
|
|
Charged to Other Accounts
|
|
|
|
|
|
Balance at End of Year
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
Classification
|
|
|
|
Acquisition
|
|
Deductions
|
|
||||||||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred Tax Valuation Allowance
|
$
|
3,334.8
|
|
|
$
|
(1,104.3
|
)
|
|
$
|
(9.8
|
)
|
|
$
|
17.8
|
|
|
$
|
—
|
|
|
$
|
2,238.5
|
|
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred Tax Valuation Allowance
|
$
|
3,372.5
|
|
|
$
|
(40.6
|
)
|
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
$
|
3,334.8
|
|
Accounts Receivable Allowance
|
$
|
7.1
|
|
|
$
|
—
|
|
|
$
|
(7.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred Tax Valuation Allowance
|
$
|
1,152.3
|
|
|
$
|
54.3
|
|
|
$
|
2,165.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,372.5
|
|
Accounts Receivable Allowance
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.1
|
|