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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A&R 2015 Equity Plan
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Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan
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ABL Facility
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Amended and Restated Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, as the Lenders, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, and Amended and Restated as of February 28, 2018
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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, 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, Kentucky, Middletown, Ohio and Dearborn, Michigan)
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Algoma
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Algoma Steel Inc. (previously, Essar Steel Algoma Inc.)
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Amended 2015 Equity Plan
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Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan, as amended
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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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Atlantic Basin pellet premium
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Platts Atlantic Blast Furnace 65% Fe pellet premium
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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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Compensation Committee
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Compensation and Organization Committee of the 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
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Direct Reduction-grade
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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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Abbreviation or acronym
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Term
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GAAP
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Accounting principles generally accepted in the United States
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GHG
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Greenhouse gas
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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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IRC
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Internal Revenue Code
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IRS
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Internal Revenue Service
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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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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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MPUC
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Minnesota Public Utilities Commission
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MSHA
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U.S. Mine Safety and Health Administration
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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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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 CFR North China
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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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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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Securities Act
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Securities Act of 1933, as amended
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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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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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Topic 606
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ASC Topic 606, Revenue from Contracts with Customers
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Topic 815
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ASC Topic 815, Derivatives and Hedging
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TRIR
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Total Recordable Incident Rate
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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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U.S. 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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Abbreviation or acronym
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Term
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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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WEPC
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Wisconsin Electric Power 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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Percentage
Product Revenue |
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Customer
1
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2018
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2017
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2016
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ArcelorMittal
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57%
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48%
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51%
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AK Steel
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25%
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29%
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27%
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Algoma
2
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13%
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11%
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5%
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1
Includes subsidiaries.
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2
On October 5, 2015, we terminated the long-term agreement with Algoma; however, we entered into certain short-term contracts with Algoma throughout 2016. On May 16, 2016, we reinstated our agreement with Algoma, which took effect in January 2017.
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2018
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2017
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2016
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Mining and Pelletizing segment - Salaried
1
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514
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503
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485
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Mining and Pelletizing segment - Hourly
1,3
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2,208
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2,182
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2,189
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Metallics segment - Salaried
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26
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6
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—
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Discontinued Operations - Salaried
2
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2
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79
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86
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Corporate & Support Services - Salaried
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176
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168
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167
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Total
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2,926
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2,938
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2,927
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1
Includes our employees and our employees of the joint venture contained within our Mining and Pelletizing segment.
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2
Excludes contracted mining employees.
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3
Excludes employees considered on lay-off status as a result of an indefinite or temporary idle.
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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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61
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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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Clifford T. Smith
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59
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Executive Vice President, Chief Operating Officer (January 2019 – present); Executive Vice President, Business Development (April 2015 – December 2018); and Executive Vice President, Seaborne Iron Ore (January 2014 – April 2015).
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Terry G. Fedor
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54
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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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41
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Executive Vice President, Chief Financial Officer (January 2017 – present); Treasurer (March 2016
–
December 2017
); and Vice President, Corporate Controller and Chief Accounting Officer (March 2012 – December 2016).
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James D. Graham
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53
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Executive Vice President (November 2014 – present); Chief Legal Officer (March 2013 – present); Secretary (March 2014 – present); and Vice President (January 2011 – October 2014).
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Maurice D. Harapiak
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57
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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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49
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Executive Vice President, Global Commercial (October 2014 - present); and Vice President, Global Iron Ore Sales (February 2014 – October 2014).
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R. Christopher Cebula
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48
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Vice President, Corporate Controller & Chief Accounting Officer (February 2017
–
present); and Senior Director, Corporate Financial Planning & Analysis (April 2013
–
February 2017).
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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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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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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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2013
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2014
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2015
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2016
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2017
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2018
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Cleveland-Cliffs Inc.
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Return %
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—
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(71.56)
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(77.87)
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432.28
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(14.27)
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6.66
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Cum $
|
|
100.00
|
|
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28.44
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|
6.29
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33.50
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28.72
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30.63
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S&P 500 Index - Total Returns
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Return %
|
|
—
|
|
|
13.65
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|
1.38
|
|
11.93
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|
21.80
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(4.39)
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Cum $
|
|
100.00
|
|
|
113.65
|
|
115.22
|
|
128.96
|
|
157.08
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|
150.18
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S&P Total Market Index
|
Return %
|
|
—
|
|
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(25.63)
|
|
(50.76)
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|
105.09
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|
20.61
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(26.76)
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|
Cum $
|
|
100.00
|
|
|
74.37
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|
36.62
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|
75.10
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|
90.58
|
|
66.34
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S&P Metals and Mining
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Return %
|
|
—
|
|
|
12.43
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|
0.46
|
|
12.62
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|
21.13
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(5.30)
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|
Cum $
|
|
100.00
|
|
|
112.43
|
|
112.95
|
|
127.20
|
|
154.08
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|
145.91
|
Period
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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
2
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||||||
October 1 - 31, 2018
|
|
739
|
|
|
$
|
12.34
|
|
|
—
|
|
|
$
|
—
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|
November 1 - 30, 2018
|
|
500,000
|
|
|
$
|
8.83
|
|
|
500,000
|
|
|
$
|
195,583,300
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|
December 1 - 31, 2018
|
|
4,907,210
|
|
|
$
|
8.75
|
|
|
4,907,210
|
|
|
$
|
152,650,610
|
|
Total
|
|
5,407,949
|
|
|
$
|
8.76
|
|
|
5,407,210
|
|
|
—
|
|
|
|
|
|
|
|
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|
|
|
||||||
1
Includes 739 shares that were delivered to us in October 2018 to satisfy tax withholding obligations due upon the vesting or payment of stock awards.
|
||||||||||||||
2
On November 26, 2018, we announced a new share repurchase program which was authorized by the Board of Directors, pursuant to which we may buy back our outstanding common shares in the open market or in private negotiated transactions up to a maximum of $200 million dollars. The program may be executed through open-market purchases, including through Rule 10b5-1 agreements, or privately negotiated transactions. The authorization is effective until December 31, 2019.
|
Item 6.
|
Selected Financial Data
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Year Ended
December 31, |
|
|
|
|
|||||||||
Per Long Sales Ton Information
|
|
2018
|
|
2017
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate
1
|
|
$
|
105.64
|
|
|
$
|
88.03
|
|
|
$
|
17.61
|
|
|
20.0
|
%
|
Cash cost of goods sold and operating expense rate
1,2
|
|
62.95
|
|
|
59.43
|
|
|
3.52
|
|
|
5.9
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.32
|
|
|
3.56
|
|
|
(0.24
|
)
|
|
(6.7
|
)%
|
|||
Total cost of goods sold and operating expense rate
|
|
66.27
|
|
|
62.99
|
|
|
3.28
|
|
|
5.2
|
%
|
|||
Sales margin
|
|
$
|
39.37
|
|
|
$
|
25.04
|
|
|
$
|
14.33
|
|
|
57.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons
3
(In thousands)
|
|
20,563
|
|
|
18,683
|
|
|
|
|
|
|||||
Production tons
3
(In thousands)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
26,336
|
|
|
25,542
|
|
|
|
|
|
|||||
Cliffs’ share of total
|
|
20,329
|
|
|
18,776
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1
Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues and expenses also exclude venture partner cost reimbursements.
|
|||||||||||||||
2
Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. Refer to "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Tons are long tons.
|
•
|
An increase in the average year-to-date realized product revenue rate of
$17.61
per long ton or
20.0%
during the year ended December 31, 2018, compared to 2017, which resulted in an increase of
$364.3 million
. This is predominantly due to:
|
◦
|
An increase in the average annual daily market price for hot-rolled coil steel, which positively affected the realized revenue rate by $10 per long ton or $215 million during 2018;
|
◦
|
Higher pellet premiums, which positively affected the realized revenue rate by $7 per long ton or $141 million; and
|
◦
|
Changes in customer and contract mix, which positively affected the realized revenue rate by $3 per long ton or $70 million.
|
◦
|
These increases were offset partially by:
|
▪
|
An increase in index freight rates, a component in most of our contract pricing formulas, which negatively affected the realized revenue rate by $3 per long ton or $53 million; and
|
▪
|
Lower full-year Platts 62% Price, compared to the prior-year, which negatively affected the realized revenue rate by $1 per long ton or $30 million.
|
•
|
Higher sales volumes of
1.9 million
long tons, which resulted in increased revenues of
$163.5 million
, predominantly due to increased demand from two customers resulting in two additional contracts that started during the current year.
|
•
|
An increase in sales volume of
1.9 million
long tons, which resulted in increased costs of
$117 million
period-over-period; and
|
•
|
Unfavorable change in the full-year cost driven by higher employment-related and profit sharing costs of $35 million or $2 per long ton, increased royalties of $19 million or $1 per long ton and increased maintenance and fuel costs of $19 million or $1 per long ton.
|
|
(In Millions)
|
||||||||||
|
2018
|
|
2017
|
|
Variance
|
||||||
Income tax benefit
|
$
|
475.2
|
|
|
$
|
252.4
|
|
|
$
|
222.8
|
|
Effective tax rate
|
(84.1
|
)%
|
|
(233.3
|
)%
|
|
149.2
|
%
|
|
(In Millions)
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Net income
|
$
|
1,128.1
|
|
|
$
|
363.1
|
|
Less:
|
|
|
|
||||
Interest expense, net
|
(121.3
|
)
|
|
(132.0
|
)
|
||
Income tax benefit
|
460.3
|
|
|
252.4
|
|
||
Depreciation, depletion and amortization
|
(89.0
|
)
|
|
(87.7
|
)
|
||
Total EBITDA
|
$
|
878.1
|
|
|
$
|
330.4
|
|
Less:
|
|
|
|
||||
Loss on extinguishment of debt
|
$
|
(6.8
|
)
|
|
$
|
(165.4
|
)
|
Impact of discontinued operations
|
120.6
|
|
|
22.0
|
|
||
Foreign exchange remeasurement
|
(0.9
|
)
|
|
13.9
|
|
||
Impairment of other long-lived assets
|
(1.1
|
)
|
|
—
|
|
||
Total Adjusted EBITDA
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
|
|
|
||||
EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
852.9
|
|
|
$
|
534.9
|
|
Metallics
|
(3.3
|
)
|
|
(0.4
|
)
|
||
Other (including discontinued operations)
|
28.5
|
|
|
(204.1
|
)
|
||
Total EBITDA
|
$
|
878.1
|
|
|
$
|
330.4
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
875.3
|
|
|
$
|
559.4
|
|
Metallics
|
(3.3
|
)
|
|
(0.4
|
)
|
||
Other
|
(105.7
|
)
|
|
(99.1
|
)
|
||
Total Adjusted EBITDA
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
|
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
|
|
59.43
|
|
|
55.73
|
|
|
3.70
|
|
|
6.6
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.56
|
|
|
4.61
|
|
|
(1.05
|
)
|
|
(22.8
|
)%
|
|||
Total cost of goods sold and operating expenses rate
|
|
62.99
|
|
|
60.34
|
|
|
2.65
|
|
|
4.4
|
%
|
|||
Sales margin
|
|
$
|
25.04
|
|
|
$
|
15.37
|
|
|
$
|
9.67
|
|
|
62.9
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
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. See
"Non-GAAP Reconciliation"
for reconciliation in dollars back to our consolidated financial statements.
|
|||||||||||||||
3
Tons are long tons (2,240 pounds).
|
•
|
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)
|
||||||||||
|
2017
|
|
2016
|
|
Variance
Favorable/
(Unfavorable)
|
||||||
Interest expense, net
|
$
|
(126.8
|
)
|
|
$
|
(193.9
|
)
|
|
$
|
67.1
|
|
Gain (loss) on extinguishment/restructuring of debt
|
(165.4
|
)
|
|
166.3
|
|
|
(331.7
|
)
|
|||
Other non-operating income
|
10.2
|
|
|
7.3
|
|
|
2.9
|
|
|||
|
$
|
(282.0
|
)
|
|
$
|
(20.3
|
)
|
|
$
|
(261.7
|
)
|
|
(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
|
)
|
||
EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
Less:
|
|
|
|
||||
Gain (loss) on extinguishment/restructuring of debt
|
$
|
(165.4
|
)
|
|
$
|
166.3
|
|
Impact of discontinued operations
|
22.0
|
|
|
108.4
|
|
||
Foreign exchange remeasurement
|
13.9
|
|
|
(17.8
|
)
|
||
Total Adjusted EBITDA
|
$
|
459.9
|
|
|
$
|
246.1
|
|
|
|
|
|
||||
EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
534.9
|
|
|
$
|
342.4
|
|
Metallics
|
(0.4
|
)
|
|
—
|
|
||
Corporate and Other (including discontinued operations)
|
(204.1
|
)
|
|
160.6
|
|
||
Total EBITDA
|
$
|
330.4
|
|
|
$
|
503.0
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
559.4
|
|
|
$
|
359.6
|
|
Metallics
|
(0.4
|
)
|
|
—
|
|
||
Corporate and Other
|
(99.1
|
)
|
|
(113.5
|
)
|
||
Total Adjusted EBITDA
|
$
|
459.9
|
|
|
$
|
246.1
|
|
|
(In Millions)
|
||||||
|
December 31,
2018 |
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
823.2
|
|
|
$
|
978.3
|
|
|
|
|
|
||||
Available borrowing base on ABL Facility
1
|
$
|
323.7
|
|
|
$
|
273.2
|
|
ABL Facility loans drawn
|
—
|
|
|
—
|
|
||
Letter of credit obligations and other commitments
|
(55.0
|
)
|
|
(46.5
|
)
|
||
Borrowing capacity available
|
$
|
268.7
|
|
|
$
|
226.7
|
|
|
|
|
|
||||
1
The ABL Facility has a maximum borrowing base of $450 million, determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
|
|
2019 Outlook Summary
|
|
Per Long Ton Information
|
Mining and Pelletizing
|
|
Cost of goods sold and operating expense rate
|
$73 - $78
|
|
Less:
|
|
|
Freight expense rate
1
|
$7
|
|
Depreciation, depletion & amortization rate
|
$4
|
|
Cash cost of goods sold and operating expense rate
|
$62 - $67
|
|
|
|
|
Sales volume (million long tons)
|
20.0
|
|
Production volume (million long tons)
|
20.0
|
|
|
||
1
Freight has an offsetting amount in revenue and has no impact on sales margin.
|
•
|
Approximately $425 million toward the HBI project in Toledo, OH;
|
•
|
Approximately $70 million in sustaining capital;
|
•
|
Approximately $40 million toward the completion of the upgrade at the Northshore mine; and
|
•
|
Approximately $20 million in capitalized interest.
|
|
|
Pension
|
|
OPEB
|
||||||||||||
|
|
Funding
|
|
Expense
|
|
Funding
|
|
Expense (Benefit)
|
||||||||
2016
|
|
$
|
1.2
|
|
|
$
|
16.5
|
|
|
$
|
1.1
|
|
|
$
|
(4.0
|
)
|
2017
|
|
$
|
24.4
|
|
|
$
|
18.0
|
|
|
$
|
2.1
|
|
|
$
|
(6.1
|
)
|
2018
|
|
$
|
27.6
|
|
|
$
|
12.7
|
|
|
$
|
3.8
|
|
|
$
|
(5.9
|
)
|
2019 (Estimated)
|
|
$
|
15.9
|
|
|
$
|
21.5
|
|
|
$
|
3.5
|
|
|
$
|
(2.8
|
)
|
|
Pension and Other Benefits
|
||||||
|
2018
|
|
|
2017
|
|
|
|
Plan discount rates:
|
|
|
|
|
|
||
Iron Hourly Pension Plan
|
4.31
|
|
%
|
|
3.60
|
|
%
|
Salaried Pension Plan
|
4.21
|
|
|
|
3.52
|
|
|
Ore Mining Pension Plan
|
4.33
|
|
|
|
3.61
|
|
|
SERP
|
4.22
|
|
|
|
3.50
|
|
|
Hourly OPEB Plan
|
4.29
|
|
|
|
3.60
|
|
|
Salaried OPEB Plan
|
4.27
|
|
|
|
3.57
|
|
|
Rate of compensation increase - Salaried
|
3.00
|
|
|
|
3.00
|
|
|
Rate of compensation increase - Hourly
|
2.00
|
|
|
|
2.00
|
|
|
Pension plan expected return on plan assets
|
8.25
|
|
|
|
8.25
|
|
|
OPEB plan expected return on plan assets
|
7.00
|
|
|
|
7.00
|
|
|
Health care cost trend rate assumed for next year
|
6.75
|
|
|
|
7.00
|
|
|
Ultimate health care cost trend rate
|
5.00
|
|
|
|
5.00
|
|
|
Year that the ultimate rate is reached
|
2026
|
|
|
|
2026
|
|
|
|
|
Increase in Expense
|
|
Increase in Benefit Obligation
|
||||||||||||
|
|
(In Millions)
|
|
(In Millions)
|
||||||||||||
|
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
Decrease discount rate 0.25%
|
|
$
|
1.6
|
|
|
$
|
0.2
|
|
|
$
|
25.0
|
|
|
$
|
6.6
|
|
Decrease return on assets 1.00%
|
|
$
|
6.6
|
|
|
$
|
2.4
|
|
|
N/A
|
|
|
N/A
|
|
•
|
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, reduced market demand and risks related to U.S. government actions with respect to Section 232 of the Trade Expansion Act (as amended by the Trade Act of 1974), the United States-Mexico-Canada Agreement and/or other trade agreements, treaties or policies;
|
•
|
continued volatility of iron ore and steel prices and other trends, which may impact the price-adjustment calculations under our sales contracts;
|
•
|
our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele;
|
•
|
our ability to cost-effectively achieve planned production rates or levels, including at our HBI plant;
|
•
|
our ability to successfully identify and consummate any strategic investments or development projects, including our HBI plant;
|
•
|
the impact of our customers reducing their steel production due to increased market share of steel produced using other methods or lighter-weight steel alternatives;
|
•
|
our actual economic iron ore reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve;
|
•
|
the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration;
|
•
|
problems or uncertainties with sales volume or mix, productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry;
|
•
|
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;
|
•
|
our ability to maintain adequate liquidity, our level of indebtedness and the availability of capital could limit cash flow available to fund working capital, planned capital expenditures, acquisitions and other general corporate purposes or ongoing needs of our business;
|
•
|
our ability to continue to pay cash dividends, and the amount and timing of any cash dividends;
|
•
|
availability of capital and our ability to maintain adequate liquidity;
|
•
|
our ability to maintain appropriate relations with unions and employees;
|
•
|
the ability of our customers, joint venture partners and third party service providers to meet their obligations to us on a timely basis or at all;
|
•
|
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 interest rates and tax laws; and
|
•
|
the potential existence of significant deficiencies or material weakness 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,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
823.2
|
|
|
$
|
978.3
|
|
Accounts receivable, net
|
226.7
|
|
|
106.7
|
|
||
Inventories
|
87.9
|
|
|
138.4
|
|
||
Supplies and other inventories
|
93.2
|
|
|
88.8
|
|
||
Derivative assets
|
91.5
|
|
|
37.9
|
|
||
Income tax receivable, current
|
117.3
|
|
|
13.3
|
|
||
Loans to and accounts receivables from the Canadian Entities
|
—
|
|
|
51.6
|
|
||
Current assets of discontinued operations
|
12.4
|
|
|
118.5
|
|
||
Other current assets
|
27.4
|
|
|
11.1
|
|
||
TOTAL CURRENT ASSETS
|
1,479.6
|
|
|
1,544.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
1,286.0
|
|
|
1,033.8
|
|
||
OTHER ASSETS
|
|
|
|
||||
Deposits for property, plant and equipment
|
83.0
|
|
|
17.8
|
|
||
Income tax receivable, non-current
|
121.3
|
|
|
235.3
|
|
||
Deferred income taxes
|
464.8
|
|
|
—
|
|
||
Non-current assets of discontinued operations
|
—
|
|
|
20.3
|
|
||
Other non-current assets
|
94.9
|
|
|
101.6
|
|
||
TOTAL OTHER ASSETS
|
764.0
|
|
|
375.0
|
|
||
TOTAL ASSETS
|
$
|
3,529.6
|
|
|
$
|
2,953.4
|
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
1,128.1
|
|
|
$
|
367.0
|
|
|
$
|
174.1
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Changes in pension and other post-retirement benefits, net of tax
|
(17.2
|
)
|
|
11.5
|
|
|
(19.8
|
)
|
|||
Changes in foreign currency translation
|
(225.4
|
)
|
|
(13.9
|
)
|
|
18.6
|
|
|||
Changes in derivative financial instruments, net of tax
|
(2.3
|
)
|
|
(0.5
|
)
|
|
(2.6
|
)
|
|||
OTHER COMPREHENSIVE LOSS
|
(244.9
|
)
|
|
(2.9
|
)
|
|
(3.8
|
)
|
|||
OTHER COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST
|
—
|
|
|
(1.1
|
)
|
|
0.5
|
|
|||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
883.2
|
|
|
$
|
363.0
|
|
|
$
|
170.8
|
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
1,128.1
|
|
|
$
|
363.1
|
|
|
$
|
199.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
89.0
|
|
|
87.7
|
|
|
115.4
|
|
|||
Deferred income taxes
|
(460.5
|
)
|
|
—
|
|
|
—
|
|
|||
Loss (gain) on extinguishment of debt
|
6.8
|
|
|
165.4
|
|
|
(166.3
|
)
|
|||
Loss on deconsolidation
|
—
|
|
|
20.2
|
|
|
17.5
|
|
|||
Gain on derivatives
|
(110.2
|
)
|
|
(4.1
|
)
|
|
(30.1
|
)
|
|||
Gain on foreign currency translation
|
(228.1
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
20.7
|
|
|
25.3
|
|
|
40.1
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables and other assets
|
52.3
|
|
|
(248.7
|
)
|
|
43.2
|
|
|||
Inventories
|
42.9
|
|
|
(1.8
|
)
|
|
157.8
|
|
|||
Payables, accrued expenses and other liabilities
|
(62.5
|
)
|
|
(69.0
|
)
|
|
(73.9
|
)
|
|||
Net cash provided by operating activities
|
478.5
|
|
|
338.1
|
|
|
303.0
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(208.6
|
)
|
|
(134.9
|
)
|
|
(61.7
|
)
|
|||
Deposits for property, plant and equipment
|
(87.5
|
)
|
|
(16.8
|
)
|
|
(7.4
|
)
|
|||
Other investing activities
|
23.0
|
|
|
(4.3
|
)
|
|
11.2
|
|
|||
Net cash used by investing activities
|
(273.1
|
)
|
|
(156.0
|
)
|
|
(57.9
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net proceeds from issuance of common shares
|
—
|
|
|
661.3
|
|
|
287.4
|
|
|||
Repurchase of common shares
|
(47.5
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of debt
|
—
|
|
|
1,771.5
|
|
|
—
|
|
|||
Debt issuance costs
|
(1.5
|
)
|
|
(28.6
|
)
|
|
(5.2
|
)
|
|||
Borrowings under credit facilities
|
—
|
|
|
—
|
|
|
105.0
|
|
|||
Repayment under credit facilities
|
—
|
|
|
—
|
|
|
(105.0
|
)
|
|||
Repayments of equipment loans
|
—
|
|
|
—
|
|
|
(95.6
|
)
|
|||
Repurchase of debt
|
(234.5
|
)
|
|
(1,720.7
|
)
|
|
(305.4
|
)
|
|||
Acquisition of noncontrolling interest
|
—
|
|
|
(105.0
|
)
|
|
—
|
|
|||
Distributions of partnership equity
|
(44.2
|
)
|
|
(52.9
|
)
|
|
(59.9
|
)
|
|||
Other financing activities
|
(47.5
|
)
|
|
(26.7
|
)
|
|
(27.7
|
)
|
|||
Net cash provided (used) by financing activities
|
(375.2
|
)
|
|
498.9
|
|
|
(206.4
|
)
|
|||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(2.3
|
)
|
|
3.3
|
|
|
(0.5
|
)
|
|||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(172.1
|
)
|
|
684.3
|
|
|
38.2
|
|
|||
LESS: INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(17.0
|
)
|
|
18.8
|
|
|
(35.3
|
)
|
|||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(155.1
|
)
|
|
665.5
|
|
|
73.5
|
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
978.3
|
|
|
312.8
|
|
|
239.3
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
823.2
|
|
|
$
|
978.3
|
|
|
$
|
312.8
|
|
|
|
(In Millions)
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Cliffs Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Number
of Depositary Shares |
|
Depositary
Shares |
|
Number
of Common Shares Outstanding |
|
Common
Shares |
|
Capital in
Excess of Par Value of Shares |
|
Retained
Earnings |
|
Common
Shares in Treasury |
|
Accumulated
Other Comprehensive Loss |
|
Non-
Controlling Interest |
|
Total
|
||||||||||||||||||
January 1, 2016
|
|
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
|
)
|
Adoption of accounting standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.0
|
|
||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,128.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,128.1
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(244.9
|
)
|
|
—
|
|
|
(244.9
|
)
|
||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
883.2
|
|
||||||||||||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Stock and other incentive plans
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
(17.2
|
)
|
|
—
|
|
|
31.0
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
||||||||
Common stock repurchases
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.5
|
)
|
|
—
|
|
|
—
|
|
|
(47.5
|
)
|
||||||||
Common stock dividends ($0.05 per
share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.0
|
)
|
||||||||
December 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
292.6
|
|
|
$
|
37.7
|
|
|
$
|
3,916.7
|
|
|
$
|
(3,060.2
|
)
|
|
$
|
(186.1
|
)
|
|
$
|
(283.9
|
)
|
|
$
|
—
|
|
|
$
|
424.2
|
|
Name
|
|
Location
|
|
Status of Operations
|
Northshore
|
|
Minnesota
|
|
Active
|
United Taconite
|
|
Minnesota
|
|
Active
|
Tilden
|
|
Michigan
|
|
Active
|
Empire
|
|
Michigan
|
|
Indefinitely Idled
|
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
|
Mineral rights
|
|
Units of production
|
|
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)
|
||||||||||||||
|
Deferred Revenue (Current)
1
|
|
Deferred Revenue (Long-Term)
|
||||||||||||
|
Year Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Opening balance as of January 1
|
$
|
23.8
|
|
|
$
|
16.2
|
|
|
$
|
51.4
|
|
|
$
|
64.3
|
|
Closing balance as of December 31
|
21.0
|
|
|
22.4
|
|
|
38.5
|
|
|
51.4
|
|
||||
Increase (Decrease)
|
$
|
(2.8
|
)
|
|
$
|
6.2
|
|
|
$
|
(12.9
|
)
|
|
$
|
(12.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
1
The opening balance for the year ended December 31, 2018 includes a $1.4 million adjustment from the December 31, 2017 balance due to the adoption of Topic 606.
|
|
|
||||||||||
|
2018
|
|
2017
|
2016
|
|||||||
Revenues from product sales and services:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
2,332.4
|
|
|
$
|
1,866.0
|
|
|
$
|
1,554.5
|
|
|
|
|
|
|
|
||||||
Sales margin:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
809.6
|
|
|
$
|
467.6
|
|
|
$
|
280.1
|
|
Other operating expense
|
(136.4
|
)
|
|
(77.4
|
)
|
|
(149.4
|
)
|
|||
Other expense
|
(108.5
|
)
|
|
(282.0
|
)
|
|
(20.3
|
)
|
|||
Income from continuing operations before income taxes
|
$
|
564.7
|
|
|
$
|
108.2
|
|
|
$
|
110.4
|
|
|
(In Millions)
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
1,128.1
|
|
|
$
|
363.1
|
|
|
$
|
199.3
|
|
Less:
|
|
|
|
|
|
||||||
Interest expense, net
|
(121.3
|
)
|
|
(132.0
|
)
|
|
(200.5
|
)
|
|||
Income tax benefit
|
460.3
|
|
|
252.4
|
|
|
12.2
|
|
|||
Depreciation, depletion and amortization
|
(89.0
|
)
|
|
(87.7
|
)
|
|
(115.4
|
)
|
|||
Total EBITDA
|
$
|
878.1
|
|
|
$
|
330.4
|
|
|
$
|
503.0
|
|
Less:
|
|
|
|
|
|
||||||
Gain (loss) on extinguishment/restructuring of debt
|
$
|
(6.8
|
)
|
|
$
|
(165.4
|
)
|
|
$
|
166.3
|
|
Impact of discontinued operations
|
120.6
|
|
|
22.0
|
|
|
108.4
|
|
|||
Foreign exchange remeasurement
|
(0.9
|
)
|
|
13.9
|
|
|
(17.8
|
)
|
|||
Impairment of long-lived assets
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|||
Total Adjusted EBITDA
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
$
|
246.1
|
|
|
|
|
|
|
|
||||||
EBITDA:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
852.9
|
|
|
$
|
534.9
|
|
|
$
|
342.4
|
|
Metallics
|
(3.3
|
)
|
|
(0.4
|
)
|
|
—
|
|
|||
Corporate and Other
1
|
28.5
|
|
|
(204.1
|
)
|
|
160.6
|
|
|||
Total EBITDA
|
$
|
878.1
|
|
|
$
|
330.4
|
|
|
$
|
503.0
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
875.3
|
|
|
$
|
559.4
|
|
|
$
|
359.6
|
|
Metallics
|
(3.3
|
)
|
|
(0.4
|
)
|
|
—
|
|
|||
Corporate
|
(105.7
|
)
|
|
(99.1
|
)
|
|
(113.5
|
)
|
|||
Total Adjusted EBITDA
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
$
|
246.1
|
|
|
|
|
|
|
|
||||||
1
Corporate and Other includes activity from discontinued operations.
|
|
(In Millions)
|
||||||||||
|
December 31,
2018 |
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Assets:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
1,694.1
|
|
|
$
|
1,500.6
|
|
|
$
|
1,372.5
|
|
Metallics
|
265.9
|
|
|
13.4
|
|
|
—
|
|
|||
Total segment assets
|
1,960.0
|
|
|
1,514.0
|
|
|
1,372.5
|
|
|||
Corporate
|
1,557.2
|
|
|
1,300.6
|
|
|
396.3
|
|
|||
Assets of discontinued operations
|
12.4
|
|
|
138.8
|
|
|
155.1
|
|
|||
Total assets
|
$
|
3,529.6
|
|
|
$
|
2,953.4
|
|
|
$
|
1,923.9
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Revenue category:
|
|
|
|
|
|
|
|||
Product
|
|
93
|
%
|
|
88
|
%
|
|
89
|
%
|
Freight and venture partners’ cost reimbursements
|
|
7
|
%
|
|
12
|
%
|
|
11
|
%
|
Total revenues from product sales and services
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
(In Millions)
|
||||||
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Finished Goods
|
|
$
|
77.8
|
|
|
$
|
127.1
|
|
Work-in-Process
|
|
10.1
|
|
|
11.3
|
|
||
Total Inventories
|
|
$
|
87.9
|
|
|
$
|
138.4
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land rights and mineral rights
|
$
|
549.6
|
|
|
$
|
549.6
|
|
Office and information technology
|
70.0
|
|
|
65.8
|
|
||
Buildings
|
87.2
|
|
|
85.2
|
|
||
Mining equipment
|
548.5
|
|
|
533.9
|
|
||
Processing equipment
|
645.8
|
|
|
610.9
|
|
||
Electric power facilities
|
58.7
|
|
|
56.9
|
|
||
Land improvements
|
23.8
|
|
|
23.7
|
|
||
Asset retirement obligation
|
14.8
|
|
|
16.9
|
|
||
Other
|
25.2
|
|
|
25.2
|
|
||
Construction-in-progress
|
284.8
|
|
|
32.6
|
|
||
|
2,308.4
|
|
|
2,000.7
|
|
||
Allowance for depreciation and depletion
|
(1,022.4
|
)
|
|
(966.9
|
)
|
||
|
$
|
1,286.0
|
|
|
$
|
1,033.8
|
|
(In Millions)
|
||||||||||||||||||
December 31, 2018
|
||||||||||||||||||
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
|
|
|
$
|
(5.7
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
392.1
|
|
Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
$700 Million 4.875% 2021 Senior Notes
|
|
4.89%
|
|
124.0
|
|
|
(0.2
|
)
|
|
—
|
|
|
123.8
|
|
||||
$316.25 Million 1.50% 2025 Convertible Senior Notes
|
|
6.26%
|
|
316.3
|
|
|
(5.5
|
)
|
|
(75.6
|
)
|
|
235.2
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
6.01%
|
|
1,073.3
|
|
|
(9.9
|
)
|
|
(14.6
|
)
|
|
1,048.8
|
|
||||
$800 Million 6.25% 2040 Senior Notes
|
|
6.34%
|
|
298.4
|
|
|
(2.3
|
)
|
|
(3.3
|
)
|
|
292.8
|
|
||||
ABL Facility
|
|
N/A
|
|
450.0
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
||||
Fair Value Adjustment to Interest Rate Hedge
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,092.9
|
|
(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
|
|
Debt Instrument
|
|
Maturity
|
|
Interest Payable
(until maturity)
|
$700 Million 4.875% 2021 Senior Notes
|
|
April 1, 2021
|
|
April 1 and October 1
|
$1.075 Billion 5.75% 2025 Senior Notes
|
|
March 1, 2025
|
|
March 1 and September 1
|
$800 Million 6.25% 2040 Senior Notes
|
|
October 1, 2040
|
|
April 1 and October 1
|
|
(In Millions)
|
||
|
Maturities of Debt
|
||
2019
|
$
|
—
|
|
2020
|
—
|
|
|
2021
|
124.0
|
|
|
2022
|
—
|
|
|
2023
|
—
|
|
|
2024 and thereafter
|
2,088.0
|
|
|
Total maturities of debt
|
$
|
2,212.0
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2018
|
||||||||||||||
|
Quoted Prices in Active
Markets for Identical Assets/Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
0.8
|
|
|
$
|
542.6
|
|
|
$
|
—
|
|
|
$
|
543.4
|
|
Derivative assets
|
—
|
|
|
0.1
|
|
|
91.4
|
|
|
91.5
|
|
||||
Total
|
$
|
0.8
|
|
|
$
|
542.7
|
|
|
$
|
91.4
|
|
|
$
|
634.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Total
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2017
|
||||||||||||||
|
Quoted Prices in Active
Markets for Identical
Assets/Liabilities (Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
66.3
|
|
|
$
|
550.6
|
|
|
$
|
—
|
|
|
$
|
616.9
|
|
Derivative assets
|
—
|
|
|
—
|
|
|
37.9
|
|
|
37.9
|
|
||||
Total
|
$
|
66.3
|
|
|
$
|
550.6
|
|
|
$
|
37.9
|
|
|
$
|
654.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
Total
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
|
(In Millions)
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
Change in benefit obligations:
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Benefit obligations — beginning of year
|
$
|
973.1
|
|
|
$
|
931.6
|
|
|
$
|
265.9
|
|
|
$
|
264.6
|
|
Service cost (excluding expenses)
|
18.7
|
|
|
17.1
|
|
|
2.2
|
|
|
1.8
|
|
||||
Interest cost
|
30.3
|
|
|
30.5
|
|
|
8.3
|
|
|
8.3
|
|
||||
Plan amendments
|
2.2
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
||||
Curtailment gain
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain) loss
|
(57.0
|
)
|
|
54.6
|
|
|
(29.4
|
)
|
|
7.4
|
|
||||
Benefits paid
|
(60.7
|
)
|
|
(60.7
|
)
|
|
(24.4
|
)
|
|
(21.4
|
)
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
5.6
|
|
|
4.6
|
|
||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.6
|
|
||||
Benefit obligations — end of year
|
$
|
905.7
|
|
|
$
|
973.1
|
|
|
$
|
241.9
|
|
|
$
|
265.9
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
$
|
749.8
|
|
|
$
|
685.8
|
|
|
$
|
262.5
|
|
|
$
|
253.0
|
|
Actual return on plan assets
|
(29.6
|
)
|
|
100.2
|
|
|
(8.2
|
)
|
|
24.2
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.3
|
|
||||
Employer contributions
|
27.6
|
|
|
24.4
|
|
|
3.0
|
|
|
1.7
|
|
||||
Asset transfers
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(60.7
|
)
|
|
(60.7
|
)
|
|
(17.6
|
)
|
|
(16.7
|
)
|
||||
Fair value of plan assets — end of year
|
$
|
687.2
|
|
|
$
|
749.8
|
|
|
$
|
240.2
|
|
|
$
|
262.5
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status at December 31:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
687.2
|
|
|
$
|
749.8
|
|
|
$
|
240.2
|
|
|
$
|
262.5
|
|
Benefit obligations
|
(905.7
|
)
|
|
(973.1
|
)
|
|
(241.9
|
)
|
|
(265.9
|
)
|
||||
Amount recognized at December 31
|
$
|
(218.5
|
)
|
|
$
|
(223.3
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in Statements of Financial Position:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32.1
|
|
|
$
|
35.4
|
|
Current liabilities
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(3.5
|
)
|
|
(3.9
|
)
|
||||
Non-current liabilities
|
(218.4
|
)
|
|
(222.8
|
)
|
|
(30.3
|
)
|
|
(34.9
|
)
|
||||
Total amount recognized
|
$
|
(218.5
|
)
|
|
$
|
(223.3
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
330.1
|
|
|
$
|
318.7
|
|
|
$
|
82.1
|
|
|
$
|
88.3
|
|
Prior service cost (credit)
|
8.5
|
|
|
8.8
|
|
|
(9.9
|
)
|
|
(25.6
|
)
|
||||
Net amount recognized
|
$
|
338.6
|
|
|
$
|
327.5
|
|
|
$
|
72.2
|
|
|
$
|
62.7
|
|
|
(In Millions)
|
||||||||||||||||||||||||||||||
|
2018
|
||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Benefits
|
||||||||||||||||||||||||||||
|
Salaried
|
|
Hourly
|
|
Mining
|
|
SERP
|
|
Total
|
|
Salaried
|
|
Hourly
|
|
Total
|
||||||||||||||||
Fair value of plan assets
|
$
|
249.8
|
|
|
$
|
429.4
|
|
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
687.2
|
|
|
$
|
—
|
|
|
$
|
240.2
|
|
|
$
|
240.2
|
|
Benefit obligation
|
(340.8
|
)
|
|
(548.9
|
)
|
|
(10.7
|
)
|
|
(5.3
|
)
|
|
(905.7
|
)
|
|
(32.9
|
)
|
|
(209.0
|
)
|
|
(241.9
|
)
|
||||||||
Funded status
|
$
|
(91.0
|
)
|
|
$
|
(119.5
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(5.3
|
)
|
|
$
|
(218.5
|
)
|
|
$
|
(32.9
|
)
|
|
$
|
31.2
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
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
|
)
|
|
(In Millions)
|
||||||||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
$
|
18.7
|
|
|
$
|
17.1
|
|
|
$
|
17.6
|
|
|
$
|
2.2
|
|
|
$
|
1.8
|
|
|
$
|
1.7
|
|
Interest cost
|
30.3
|
|
|
30.5
|
|
|
30.3
|
|
|
8.3
|
|
|
8.3
|
|
|
9.1
|
|
||||||
Expected return on plan assets
|
(60.0
|
)
|
|
(54.5
|
)
|
|
(54.7
|
)
|
|
(18.4
|
)
|
|
(17.7
|
)
|
|
(17.1
|
)
|
||||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service costs (credits)
|
2.2
|
|
|
2.6
|
|
|
2.2
|
|
|
(3.0
|
)
|
|
(3.0
|
)
|
|
(3.7
|
)
|
||||||
Net actuarial loss
|
21.2
|
|
|
22.3
|
|
|
21.1
|
|
|
5.0
|
|
|
4.5
|
|
|
6.0
|
|
||||||
Curtailments
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
12.7
|
|
|
$
|
18.0
|
|
|
$
|
16.5
|
|
|
$
|
(5.9
|
)
|
|
$
|
(6.1
|
)
|
|
$
|
(4.0
|
)
|
Curtailment effects
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Current year actuarial loss (gain)
|
31.6
|
|
|
9.3
|
|
|
37.8
|
|
|
(2.9
|
)
|
|
1.2
|
|
|
(8.1
|
)
|
||||||
Amortization of net loss
|
(21.2
|
)
|
|
(22.3
|
)
|
|
(21.1
|
)
|
|
(5.0
|
)
|
|
(4.5
|
)
|
|
(6.0
|
)
|
||||||
Current year prior service cost
|
2.2
|
|
|
—
|
|
|
5.7
|
|
|
12.8
|
|
|
—
|
|
|
9.8
|
|
||||||
Amortization of prior service credit (cost)
|
(2.2
|
)
|
|
(2.6
|
)
|
|
(2.2
|
)
|
|
3.0
|
|
|
3.0
|
|
|
3.7
|
|
||||||
Total recognized in other comprehensive income (loss)
|
$
|
10.1
|
|
|
$
|
(15.6
|
)
|
|
$
|
20.2
|
|
|
$
|
7.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.6
|
)
|
Total recognized in net periodic cost and other
comprehensive income (loss)
|
$
|
22.8
|
|
|
$
|
2.4
|
|
|
$
|
36.7
|
|
|
$
|
2.0
|
|
|
$
|
(6.4
|
)
|
|
$
|
(4.6
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount rate:
|
|
|
|
|
|
|
|
|
|
|
|
Iron Hourly Pension Plan
|
4.31
|
%
|
|
3.60
|
%
|
|
N/A
|
%
|
|
N/A
|
%
|
Salaried Pension Plan
|
4.21
|
|
|
3.52
|
|
|
N/A
|
|
|
N/A
|
|
Ore Mining Pension Plan
|
4.33
|
|
|
3.61
|
|
|
N/A
|
|
|
N/A
|
|
Supplemental Executive Retirement Plan
|
4.22
|
|
|
3.50
|
|
|
N/A
|
|
|
N/A
|
|
Hourly OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
4.29
|
|
|
3.60
|
|
Salaried OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
4.27
|
|
|
3.57
|
|
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
|
|
|
2018
|
|
2017
|
||
Health care cost trend rate assumed for next year
|
6.75
|
%
|
|
7.00
|
%
|
Ultimate health care cost trend rate
|
5.00
|
|
|
5.00
|
|
Year that the ultimate rate is reached
|
2026
|
|
|
2026
|
|
|
Pension Assets
|
|
VEBA Assets
|
||||||||||||||
Asset Category
|
2019
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
|
2019
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||
Equity securities
|
45.0
|
%
|
|
38.9
|
%
|
|
43.6
|
%
|
|
8.0
|
%
|
|
8.1
|
%
|
|
8.7
|
%
|
Fixed income
|
28.0
|
%
|
|
26.0
|
%
|
|
27.0
|
%
|
|
80.0
|
%
|
|
77.0
|
%
|
|
77.7
|
%
|
Hedge funds
|
5.0
|
%
|
|
5.4
|
%
|
|
5.0
|
%
|
|
4.0
|
%
|
|
4.7
|
%
|
|
4.4
|
%
|
Private equity
|
7.0
|
%
|
|
6.2
|
%
|
|
5.3
|
%
|
|
3.0
|
%
|
|
1.2
|
%
|
|
1.5
|
%
|
Structured credit
|
7.5
|
%
|
|
11.4
|
%
|
|
9.7
|
%
|
|
2.0
|
%
|
|
3.5
|
%
|
|
3.0
|
%
|
Real estate
|
7.5
|
%
|
|
10.3
|
%
|
|
8.7
|
%
|
|
3.0
|
%
|
|
5.4
|
%
|
|
4.6
|
%
|
Cash
|
—
|
%
|
|
1.8
|
%
|
|
0.7
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2018
|
||||||||||||||
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
|
$
|
112.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112.6
|
|
U.S. small/mid-cap
|
22.5
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
||||
International
|
132.0
|
|
|
—
|
|
|
—
|
|
|
132.0
|
|
||||
Fixed income
|
151.1
|
|
|
27.4
|
|
|
—
|
|
|
178.5
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
37.2
|
|
|
37.2
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
42.6
|
|
|
42.6
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
78.8
|
|
|
78.8
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
70.5
|
|
|
70.5
|
|
||||
Cash
|
12.5
|
|
|
—
|
|
|
—
|
|
|
12.5
|
|
||||
Total
|
$
|
430.7
|
|
|
$
|
27.4
|
|
|
$
|
229.1
|
|
|
$
|
687.2
|
|
|
(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)
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2017
|
$
|
40.6
|
|
|
$
|
36.1
|
|
|
$
|
63.8
|
|
|
$
|
61.9
|
|
|
$
|
202.4
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at
the reporting date
|
2.5
|
|
|
0.3
|
|
|
9.1
|
|
|
4.2
|
|
|
16.1
|
|
|||||
Relating to assets sold during
the period |
0.4
|
|
|
4.5
|
|
|
—
|
|
|
(0.1
|
)
|
|
4.8
|
|
|||||
Purchases
|
39.0
|
|
|
4.5
|
|
|
—
|
|
|
14.4
|
|
|
57.9
|
|
|||||
Sales
|
(45.1
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
(14.9
|
)
|
|
(65.6
|
)
|
|||||
Ending balance — December 31, 2017
|
$
|
37.4
|
|
|
$
|
39.8
|
|
|
$
|
72.9
|
|
|
$
|
65.5
|
|
|
$
|
215.6
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 2018
|
||||||||||||||
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
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.7
|
|
U.S. small/mid-cap
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||
International
|
7.3
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
||||
Fixed income
|
146.8
|
|
|
37.8
|
|
|
—
|
|
|
184.6
|
|
||||
Hedge funds
|
—
|
|
|
—
|
|
|
11.4
|
|
|
11.4
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
||||
Structured credit
|
—
|
|
|
—
|
|
|
8.5
|
|
|
8.5
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
13.1
|
|
|
13.1
|
|
||||
Cash
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total
|
$
|
166.4
|
|
|
$
|
37.8
|
|
|
$
|
36.0
|
|
|
$
|
240.2
|
|
|
(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)
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2017
|
$
|
11.2
|
|
|
$
|
4.3
|
|
|
$
|
6.9
|
|
|
$
|
11.1
|
|
|
$
|
33.5
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at the reporting date
|
0.8
|
|
|
0.9
|
|
|
2.0
|
|
|
3.4
|
|
|
7.1
|
|
|||||
Relating to assets sold during the period
|
—
|
|
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|
(3.9
|
)
|
|||||
Purchases
|
17.1
|
|
|
1.8
|
|
|
2.1
|
|
|
3.0
|
|
|
24.0
|
|
|||||
Sales
|
(17.7
|
)
|
|
(2.7
|
)
|
|
(2.1
|
)
|
|
(3.0
|
)
|
|
(25.5
|
)
|
|||||
Ending balance — December 31, 2017
|
$
|
11.4
|
|
|
$
|
3.9
|
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
|
$
|
35.2
|
|
|
|
(In Millions)
|
||||||||||||||
|
|
Pension
Benefits
|
|
Other Benefits
|
||||||||||||
Company Contributions
|
|
VEBA
|
|
Direct
Payments
|
|
Total
|
||||||||||
2017
|
|
$
|
24.4
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
2.1
|
|
2018
|
|
27.6
|
|
|
—
|
|
|
3.8
|
|
|
3.8
|
|
||||
2019 (Expected)
1
|
|
15.9
|
|
|
—
|
|
|
3.5
|
|
|
3.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
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, 2018). Funding obligations have been suspended as 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
|
|||||||||||
2019
|
$
|
70.4
|
|
|
$
|
18.0
|
|
|
$
|
(0.8
|
)
|
|
$
|
17.2
|
|
2020
|
67.9
|
|
|
17.7
|
|
|
(0.8
|
)
|
|
16.9
|
|
||||
2021
|
67.5
|
|
|
17.2
|
|
|
(0.9
|
)
|
|
16.3
|
|
||||
2022
|
67.0
|
|
|
17.0
|
|
|
(0.9
|
)
|
|
16.1
|
|
||||
2023
|
67.9
|
|
|
16.9
|
|
|
(1.0
|
)
|
|
15.9
|
|
||||
2024-2028
|
309.7
|
|
|
82.2
|
|
|
(5.4
|
)
|
|
76.8
|
|
Grant Year
|
|
Vesting Date
|
|
Plan Issued Under
|
|
Restricted Stock Units Granted
|
|
Performance Shares Granted
|
||
2018
|
|
12/31/2020
|
|
A&R 2015 Equity Plan
|
|
685,599
|
|
|
675,599
|
|
2017
|
|
12/31/2019
|
|
A&R 2015 Equity Plan
|
|
532,358
|
|
|
249,106
|
|
2017
|
|
12/31/2019
|
|
Amended 2015 Equity Plan
|
|
553,725
|
|
|
553,725
|
|
2016
|
|
12/31/2018
|
|
2015 Equity Plan
|
|
3,406,716
|
|
|
—
|
|
Performance
Share Plan Year |
|
Performance Shares Granted
|
|
Forfeitures to Date
|
|
Expected to Vest
|
|
Grant Date
|
|
Grant Date Fair Value
|
|
Performance Period
|
|||||
2018
|
|
675,599
|
|
|
2,236
|
|
|
673,363
|
|
|
2/21/2018
|
|
$
|
11.93
|
|
|
1/1/2018 - 12/31/2020
|
2017
|
|
249,106
|
|
|
—
|
|
|
249,106
|
|
|
6/26/2017
|
|
$
|
10.74
|
|
|
5/31/2017 - 12/31/2019
|
2017
|
|
553,725
|
|
|
51,471
|
|
|
502,254
|
|
|
2/21/2017
|
|
$
|
19.69
|
|
|
1/1/2017 - 12/31/2019
|
|
(In Millions, except per
share amounts)
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of goods sold and operating expenses
|
$
|
1.7
|
|
|
$
|
1.9
|
|
|
$
|
1.8
|
|
Selling, general and administrative expenses
|
13.4
|
|
|
16.3
|
|
|
11.8
|
|
|||
Reduction of operating income from continuing operations before
income taxes
|
15.1
|
|
|
18.2
|
|
|
13.6
|
|
|||
Income tax benefit
1
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reduction of net income from continuing operations attributable to Cliffs shareholders
|
$
|
15.1
|
|
|
$
|
18.2
|
|
|
$
|
13.6
|
|
Reduction of continuing operations earnings per common share attributable to Cliffs shareholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
||||||
1
No income tax benefit due to the full valuation allowance.
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding, beginning of year
|
7,224,665
|
|
|
$
|
6.79
|
|
Granted
|
1,498,386
|
|
|
$
|
9.51
|
|
Vested and issued
|
(1,181,460
|
)
|
|
$
|
7.38
|
|
Forfeited/canceled
|
(749,390
|
)
|
|
$
|
10.22
|
|
Outstanding, end of year
|
6,792,201
|
|
|
$
|
6.90
|
|
|
|
(In Millions)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
565.0
|
|
|
$
|
90.7
|
|
|
$
|
124.9
|
|
Foreign
|
|
(0.3
|
)
|
|
17.5
|
|
|
(14.5
|
)
|
|||
|
|
$
|
564.7
|
|
|
$
|
108.2
|
|
|
$
|
110.4
|
|
|
|
(In Millions)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits balance as of January 1
|
|
$
|
33.5
|
|
|
$
|
30.7
|
|
|
$
|
156.2
|
|
Increase (decrease) for tax positions in prior years
|
|
0.1
|
|
|
(2.8
|
)
|
|
(61.0
|
)
|
|||
Increase for tax positions in current year
|
|
3.6
|
|
|
4.5
|
|
|
0.2
|
|
|||
Settlements
|
|
—
|
|
|
1.0
|
|
|
(64.7
|
)
|
|||
Lapses in statutes of limitations
|
|
(8.2
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Unrecognized tax benefits balance as of December 31
|
|
$
|
29.0
|
|
|
$
|
33.5
|
|
|
$
|
30.7
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Environmental
|
$
|
2.5
|
|
|
$
|
2.9
|
|
Mine closure
1
|
172.4
|
|
|
168.4
|
|
||
Total environmental and mine closure obligations
|
174.9
|
|
|
171.3
|
|
||
Less current portion
|
2.9
|
|
|
3.6
|
|
||
Long-term environmental and mine closure obligations
|
$
|
172.0
|
|
|
$
|
167.7
|
|
|
|
|
|
||||
1
Includes our active operating mines, our indefinitely idled Empire mine and a closed mine formerly operating as LTVSMC.
|
|
(In Millions)
|
||||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
Derivative Instrument
|
Balance Sheet Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Derivative assets
|
|
$
|
0.1
|
|
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
3.7
|
|
|
Other current liabilities
|
|
$
|
0.3
|
|
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer supply agreement
|
Derivative assets
|
|
89.3
|
|
|
Derivative assets
|
|
37.9
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Provisional pricing arrangements
|
Derivative assets
|
|
2.1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Other current liabilities
|
|
1.7
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815:
|
|
|
$
|
91.4
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1.7
|
|
Total derivatives
|
|
|
$
|
91.5
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
3.7
|
|
|
|
|
$
|
2.0
|
|
|
(Quantities in Millions)
|
||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
Natural gas
|
1.8
|
|
MMBtu
|
|
January 2019 - August 2019
|
|
3.5
|
|
MMBtu
|
|
January 2018 - November 2018
|
Diesel
|
11.0
|
|
Gallons
|
|
January 2019 - December 2019
|
|
—
|
|
|
|
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) from discontinued operations, net of tax
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
118.3
|
|
|
$
|
21.2
|
|
|
$
|
96.6
|
|
North American Coal
|
|
(3.6
|
)
|
|
2.6
|
|
|
(2.4
|
)
|
|||
Canadian Operations
|
|
(26.5
|
)
|
|
(21.3
|
)
|
|
(17.5
|
)
|
|||
|
|
$
|
88.2
|
|
|
$
|
2.5
|
|
|
$
|
76.7
|
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Asia Pacific Iron Ore
|
|
North American Coal
|
|
Total
|
|
Asia Pacific Iron Ore
|
|
North American Coal
|
|
Total
|
||||||||||||
Current assets of discontinued operations
|
|
$
|
12.4
|
|
|
$
|
—
|
|
|
$
|
12.4
|
|
|
$
|
118.5
|
|
|
$
|
—
|
|
|
$
|
118.5
|
|
Non-current assets of discontinued operations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
Current liabilities of discontinued operations
|
|
$
|
3.8
|
|
|
$
|
2.9
|
|
|
$
|
6.7
|
|
|
$
|
71.8
|
|
|
$
|
3.2
|
|
|
$
|
75.0
|
|
Non-current liabilities of discontinued operations
|
|
$
|
8.3
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
|
$
|
52.2
|
|
|
$
|
—
|
|
|
$
|
52.2
|
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided (used) by operating activities
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
(81.3
|
)
|
|
$
|
79.6
|
|
|
$
|
99.8
|
|
Canadian Operations
|
|
(14.6
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
$
|
(95.9
|
)
|
|
$
|
79.6
|
|
|
$
|
99.8
|
|
|
|
|
|
|
|
|
||||||
Net cash provided (used) by investing activities
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
19.8
|
|
|
$
|
(2.8
|
)
|
|
$
|
(0.4
|
)
|
Canadian Operations
|
|
—
|
|
|
(7.7
|
)
|
|
6.8
|
|
|||
North American Coal
|
|
—
|
|
|
2.1
|
|
|
3.6
|
|
|||
|
|
$
|
19.8
|
|
|
$
|
(8.4
|
)
|
|
$
|
10.0
|
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
Income from Discontinued Operations
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues from product sales and services
|
|
$
|
129.1
|
|
|
$
|
464.2
|
|
|
$
|
554.5
|
|
Cost of goods sold and operating expenses
|
|
(230.7
|
)
|
|
(427.9
|
)
|
|
(440.9
|
)
|
|||
Sales margin
|
|
(101.6
|
)
|
|
36.3
|
|
|
113.6
|
|
|||
Other operating expense
|
|
(3.3
|
)
|
|
(9.9
|
)
|
|
(10.4
|
)
|
|||
Other expense
|
|
(2.3
|
)
|
|
(5.2
|
)
|
|
(6.6
|
)
|
|||
Gain on foreign currency translation
|
|
228.1
|
|
|
—
|
|
|
—
|
|
|||
Impairment of long-lived assets
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|||
Income from discontinued operations, net of tax
|
|
$
|
118.3
|
|
|
$
|
21.2
|
|
|
$
|
96.6
|
|
|
|
(In Millions)
|
||||||
Assets and Liabilities of Discontinued Operations
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
|
$
|
12.4
|
|
|
$
|
29.4
|
|
Accounts receivable, net
|
|
—
|
|
|
33.9
|
|
||
Inventories
|
|
—
|
|
|
45.0
|
|
||
Supplies and other inventories
|
|
—
|
|
|
5.1
|
|
||
Other current assets
|
|
—
|
|
|
5.1
|
|
||
Total current assets of discontinued operations
|
|
12.4
|
|
|
118.5
|
|
||
Property, plant and equipment, net
|
|
—
|
|
|
17.2
|
|
||
Other non-current assets
|
|
—
|
|
|
3.1
|
|
||
Total assets of discontinued operations
|
|
$
|
12.4
|
|
|
$
|
138.8
|
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
3.4
|
|
|
$
|
28.2
|
|
Accrued liabilities
|
|
0.4
|
|
|
28.0
|
|
||
Other current liabilities
|
|
—
|
|
|
15.6
|
|
||
Total current liabilities of discontinued operations
|
|
3.8
|
|
|
71.8
|
|
||
Environmental and mine closure obligations
|
|
—
|
|
|
28.8
|
|
||
Other liabilities
|
|
8.3
|
|
|
23.4
|
|
||
Total liabilities of discontinued operations
|
|
$
|
12.1
|
|
|
$
|
124.0
|
|
|
(In Millions)
|
||||||||||
|
Pre-tax
Amount
|
|
Tax
Benefit
|
|
After-tax
Amount
|
||||||
As of December 31, 2018:
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
$
|
(408.1
|
)
|
|
$
|
127.0
|
|
|
$
|
(281.1
|
)
|
Unrealized net loss on derivative financial instruments
|
(3.5
|
)
|
|
0.7
|
|
|
(2.8
|
)
|
|||
|
$
|
(411.6
|
)
|
|
$
|
127.7
|
|
|
$
|
(283.9
|
)
|
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
|
)
|
|
(In Millions)
|
||||||||||||||
|
Postretirement Benefit Liability, net of tax
|
|
Unrealized Net Gain (Loss) on Foreign Currency Translation
|
|
Net Unrealized Loss on Derivative Financial Instruments, net of tax
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance December 31, 2016
|
$
|
(260.6
|
)
|
|
$
|
239.3
|
|
|
$
|
—
|
|
|
$
|
(21.3
|
)
|
Other comprehensive loss before reclassifications
|
(29.8
|
)
|
|
(13.9
|
)
|
|
(0.5
|
)
|
|
(44.2
|
)
|
||||
Net loss reclassified from accumulated other comprehensive loss
|
26.5
|
|
|
—
|
|
|
—
|
|
|
26.5
|
|
||||
Balance December 31, 2017
|
$
|
(263.9
|
)
|
|
$
|
225.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
(39.0
|
)
|
|
(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 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 loss
|
25.6
|
|
|
—
|
|
|
0.2
|
|
|
0.7
|
|
|
26.5
|
|
|||||
Balance December 31, 2016
|
$
|
(260.6
|
)
|
|
$
|
—
|
|
|
$
|
239.3
|
|
|
$
|
—
|
|
|
$
|
(21.3
|
)
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Capital additions
1
|
$
|
394.8
|
|
|
$
|
156.0
|
|
|
$
|
68.5
|
|
Less:
|
|
|
|
|
|
||||||
Non-cash accruals
|
93.6
|
|
|
(2.2
|
)
|
|
(0.6
|
)
|
|||
Capital leases
|
7.6
|
|
|
6.5
|
|
|
—
|
|
|||
Grants
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|||
Cash paid for capital expenditures including deposits
|
$
|
296.1
|
|
|
$
|
151.7
|
|
|
$
|
69.1
|
|
|
|
|
|
|
|
||||||
1
Includes capital additions related to discontinued operations of $0.1 million, $2.8 million and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.
|
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, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income from continuing operations
|
$
|
1,039.9
|
|
|
$
|
360.6
|
|
|
$
|
122.6
|
|
Loss (income) from continuing operations attributable to
noncontrolling interest |
—
|
|
|
3.9
|
|
|
(25.2
|
)
|
|||
Net income from continuing operations
attributable to Cliffs shareholders |
$
|
1,039.9
|
|
|
$
|
364.5
|
|
|
$
|
97.4
|
|
Income from discontinued operations, net of tax
|
88.2
|
|
|
2.5
|
|
|
76.7
|
|
|||
Net income attributable to Cliffs shareholders
|
$
|
1,128.1
|
|
|
$
|
367.0
|
|
|
$
|
174.1
|
|
Weighted average number of shares:
|
|
|
|
|
|
||||||
Basic
|
297.2
|
|
|
288.4
|
|
|
197.7
|
|
|||
$316.25 million 1.50% 2025 Convertible Senior Notes
|
3.4
|
|
|
—
|
|
|
—
|
|
|||
Employee stock plans
|
3.5
|
|
|
4.6
|
|
|
2.4
|
|
|||
Diluted
|
304.1
|
|
|
293.0
|
|
|
200.1
|
|
|||
Earnings per common share attributable to
Cliffs common shareholders - basic: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.50
|
|
|
$
|
1.27
|
|
|
$
|
0.49
|
|
Discontinued operations
|
0.30
|
|
|
0.01
|
|
|
0.39
|
|
|||
|
$
|
3.80
|
|
|
$
|
1.28
|
|
|
$
|
0.88
|
|
Earnings per common share attributable to
Cliffs common shareholders - diluted: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.42
|
|
|
$
|
1.25
|
|
|
$
|
0.49
|
|
Discontinued operations
|
0.29
|
|
|
0.01
|
|
|
0.38
|
|
|||
|
$
|
3.71
|
|
|
$
|
1.26
|
|
|
$
|
0.87
|
|
|
(In Millions, Except Per Share Amounts)
1
|
||||||||||||||||||
2018
|
|||||||||||||||||||
Quarters
|
|
|
|||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
Revenues from product sales and services
|
$
|
180.0
|
|
|
$
|
714.3
|
|
|
$
|
741.8
|
|
|
$
|
696.3
|
|
|
$
|
2,332.4
|
|
Sales margin
|
61.5
|
|
|
284.5
|
|
|
261.6
|
|
|
202.0
|
|
|
809.6
|
|
|||||
Net income (loss) from continuing operations attributable to Cliffs shareholders
|
(13.4
|
)
|
|
229.4
|
|
|
199.8
|
|
|
624.1
|
|
|
1,039.9
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
(70.9
|
)
|
|
(64.3
|
)
|
|
238.0
|
|
|
(14.6
|
)
|
|
88.2
|
|
|||||
Net income (loss) attributable to Cliffs common shareholders
|
$
|
(84.3
|
)
|
|
$
|
165.1
|
|
|
$
|
437.8
|
|
|
$
|
609.5
|
|
|
$
|
1,128.1
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - basic: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.05
|
)
|
|
$
|
0.77
|
|
|
$
|
0.67
|
|
|
$
|
2.11
|
|
|
$
|
3.50
|
|
Discontinued operations
|
(0.24
|
)
|
|
(0.22
|
)
|
|
0.80
|
|
|
(0.05
|
)
|
|
0.30
|
|
|||||
|
$
|
(0.29
|
)
|
|
$
|
0.55
|
|
|
$
|
1.47
|
|
|
$
|
2.06
|
|
|
$
|
3.80
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - diluted: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.05
|
)
|
|
$
|
0.76
|
|
|
$
|
0.64
|
|
|
$
|
2.03
|
|
|
$
|
3.42
|
|
Discontinued operations
|
(0.24
|
)
|
|
(0.21
|
)
|
|
0.77
|
|
|
(0.05
|
)
|
|
0.29
|
|
|||||
|
$
|
(0.29
|
)
|
|
$
|
0.55
|
|
|
$
|
1.41
|
|
|
$
|
1.98
|
|
|
$
|
3.71
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
1
On January 1, 2018, we adopted Topic 606 and applied it to all contracts that were not completed using the modified retrospective method. The comparative period information has not been retrospectively revised and continues to be reported under the accounting standards in effect for those periods. Refer to NOTE 2 - NEW ACCOUNTING STANDARDS for information regarding the adoption of Topic 606.
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||||||
|
2017
|
||||||||||||||||||
Quarters
|
|
|
|||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
Revenues from product sales and services
|
$
|
286.2
|
|
|
$
|
471.3
|
|
|
$
|
596.7
|
|
|
$
|
511.8
|
|
|
$
|
1,866.0
|
|
Sales margin
|
49.0
|
|
|
144.7
|
|
|
157.8
|
|
|
116.1
|
|
|
467.6
|
|
|||||
Income (loss) from continuing operations
|
$
|
(78.5
|
)
|
|
$
|
83.8
|
|
|
$
|
22.3
|
|
|
$
|
333.0
|
|
|
$
|
360.6
|
|
Loss (income) 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
|
$
|
(76.8
|
)
|
|
$
|
85.5
|
|
|
$
|
22.8
|
|
|
$
|
333.0
|
|
|
$
|
364.5
|
|
Income (loss) from discontinued operations, net of tax
|
48.7
|
|
|
(53.7
|
)
|
|
30.6
|
|
|
(23.1
|
)
|
|
2.5
|
|
|||||
Net income (loss) attributable to Cliffs common shareholders
|
$
|
(28.1
|
)
|
|
$
|
31.8
|
|
|
$
|
53.4
|
|
|
$
|
309.9
|
|
|
$
|
367.0
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - basic: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.28
|
|
|
$
|
0.08
|
|
|
$
|
1.12
|
|
|
$
|
1.27
|
|
Discontinued operations
|
0.18
|
|
|
(0.18
|
)
|
|
0.10
|
|
|
(0.08
|
)
|
|
0.01
|
|
|||||
|
$
|
(0.11
|
)
|
|
$
|
0.10
|
|
|
$
|
0.18
|
|
|
$
|
1.04
|
|
|
$
|
1.28
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - diluted: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.28
|
|
|
$
|
0.08
|
|
|
$
|
1.11
|
|
|
$
|
1.25
|
|
Discontinued operations
|
0.18
|
|
|
(0.18
|
)
|
|
0.10
|
|
|
(0.08
|
)
|
|
0.01
|
|
|||||
|
$
|
(0.11
|
)
|
|
$
|
0.10
|
|
|
$
|
0.18
|
|
|
$
|
1.03
|
|
|
$
|
1.26
|
|
Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of December 31, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
819.8
|
|
|
$
|
0.7
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
823.2
|
|
Accounts receivable, net
|
9.2
|
|
|
221.3
|
|
|
0.3
|
|
|
(4.1
|
)
|
|
226.7
|
|
|||||
Inventories
|
—
|
|
|
87.9
|
|
|
—
|
|
|
—
|
|
|
87.9
|
|
|||||
Supplies and other inventories
|
—
|
|
|
93.2
|
|
|
—
|
|
|
—
|
|
|
93.2
|
|
|||||
Derivative assets
|
0.1
|
|
|
91.4
|
|
|
—
|
|
|
—
|
|
|
91.5
|
|
|||||
Income tax receivable, current
|
117.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117.3
|
|
|||||
Current assets of discontinued operations
|
—
|
|
|
—
|
|
|
12.4
|
|
|
—
|
|
|
12.4
|
|
|||||
Other current assets
|
10.0
|
|
|
16.9
|
|
|
0.5
|
|
|
—
|
|
|
27.4
|
|
|||||
TOTAL CURRENT ASSETS
|
956.4
|
|
|
511.4
|
|
|
15.9
|
|
|
(4.1
|
)
|
|
1,479.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
13.3
|
|
|
1,221.9
|
|
|
50.8
|
|
|
—
|
|
|
1,286.0
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits for property, plant and equipment
|
—
|
|
|
68.4
|
|
|
14.6
|
|
|
—
|
|
|
83.0
|
|
|||||
Income tax receivable, non-current
|
117.2
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
121.3
|
|
|||||
Deferred income taxes
|
463.6
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
464.8
|
|
|||||
Investment in subsidiaries
|
1,262.3
|
|
|
50.8
|
|
|
—
|
|
|
(1,313.1
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
121.3
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current assets
|
8.0
|
|
|
85.4
|
|
|
1.5
|
|
|
—
|
|
|
94.9
|
|
|||||
TOTAL OTHER ASSETS
|
1,851.1
|
|
|
208.7
|
|
|
138.6
|
|
|
(1,434.4
|
)
|
|
764.0
|
|
|||||
TOTAL ASSETS
|
$
|
2,820.8
|
|
|
$
|
1,942.0
|
|
|
$
|
205.3
|
|
|
$
|
(1,438.5
|
)
|
|
$
|
3,529.6
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
5.3
|
|
|
$
|
181.4
|
|
|
$
|
4.2
|
|
|
$
|
(4.1
|
)
|
|
$
|
186.8
|
|
Accrued employment costs
|
28.5
|
|
|
45.4
|
|
|
0.1
|
|
|
—
|
|
|
74.0
|
|
|||||
State and local taxes payable
|
—
|
|
|
35.4
|
|
|
0.1
|
|
|
—
|
|
|
35.5
|
|
|||||
Accrued interest
|
38.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38.4
|
|
|||||
Partnership distribution payable
|
—
|
|
|
43.5
|
|
|
—
|
|
|
—
|
|
|
43.5
|
|
|||||
Current liabilities of discontinued operations
|
—
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
6.7
|
|
|||||
Other current liabilities
|
30.6
|
|
|
51.3
|
|
|
1.4
|
|
|
—
|
|
|
83.3
|
|
|||||
TOTAL CURRENT LIABILITIES
|
102.8
|
|
|
357.0
|
|
|
12.5
|
|
|
(4.1
|
)
|
|
468.2
|
|
|||||
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions
|
58.3
|
|
|
390.5
|
|
|
(230.4
|
)
|
|
—
|
|
|
218.4
|
|
|||||
Other postretirement benefits
|
6.0
|
|
|
23.9
|
|
|
0.4
|
|
|
—
|
|
|
30.3
|
|
|||||
TOTAL POSTEMPLOYMENT BENEFIT LIABILITIES
|
64.3
|
|
|
414.4
|
|
|
(230.0
|
)
|
|
—
|
|
|
248.7
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
152.1
|
|
|
19.9
|
|
|
—
|
|
|
172.0
|
|
|||||
LONG-TERM DEBT
|
2,092.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,092.9
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
121.3
|
|
|
—
|
|
|
—
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
8.3
|
|
|
—
|
|
|
8.3
|
|
|||||
OTHER LIABILITIES
|
15.3
|
|
|
99.5
|
|
|
0.5
|
|
|
—
|
|
|
115.3
|
|
|||||
TOTAL LIABILITIES
|
2,396.6
|
|
|
1,023.0
|
|
|
(188.8
|
)
|
|
(125.4
|
)
|
|
3,105.4
|
|
|||||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL EQUITY
|
424.2
|
|
|
919.0
|
|
|
394.1
|
|
|
(1,313.1
|
)
|
|
424.2
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
2,820.8
|
|
|
$
|
1,942.0
|
|
|
$
|
205.3
|
|
|
$
|
(1,438.5
|
)
|
|
$
|
3,529.6
|
|
Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of December 31, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
948.9
|
|
|
$
|
2.1
|
|
|
$
|
27.3
|
|
|
$
|
—
|
|
|
$
|
978.3
|
|
Accounts receivable, net
|
4.5
|
|
|
102.9
|
|
|
—
|
|
|
(0.7
|
)
|
|
106.7
|
|
|||||
Inventories
|
—
|
|
|
138.4
|
|
|
—
|
|
|
—
|
|
|
138.4
|
|
|||||
Supplies and other inventories
|
—
|
|
|
88.8
|
|
|
—
|
|
|
—
|
|
|
88.8
|
|
|||||
Derivative assets
|
—
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|||||
Income tax receivable, current
|
11.4
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
|||||
Loans to and accounts receivables from the Canadian Entities
|
44.7
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
51.6
|
|
|||||
Current assets of discontinued operations
|
—
|
|
|
—
|
|
|
118.5
|
|
|
—
|
|
|
118.5
|
|
|||||
Other current assets
|
5.0
|
|
|
5.6
|
|
|
0.5
|
|
|
—
|
|
|
11.1
|
|
|||||
TOTAL CURRENT ASSETS
|
1,014.5
|
|
|
384.5
|
|
|
146.3
|
|
|
(0.7
|
)
|
|
1,544.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
17.5
|
|
|
965.5
|
|
|
50.8
|
|
|
—
|
|
|
1,033.8
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits for property, plant and equipment
|
—
|
|
|
8.2
|
|
|
9.6
|
|
|
—
|
|
|
17.8
|
|
|||||
Income tax receivable, non-current
|
235.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235.3
|
|
|||||
Investment in subsidiaries
|
1,024.3
|
|
|
29.9
|
|
|
—
|
|
|
(1,054.2
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
242.0
|
|
|
(242.0
|
)
|
|
—
|
|
|||||
Non-current assets of discontinued operations
|
—
|
|
|
—
|
|
|
20.3
|
|
|
—
|
|
|
20.3
|
|
|||||
Other non-current assets
|
7.8
|
|
|
91.8
|
|
|
2.0
|
|
|
—
|
|
|
101.6
|
|
|||||
TOTAL OTHER ASSETS
|
1,267.4
|
|
|
129.9
|
|
|
273.9
|
|
|
(1,296.2
|
)
|
|
375.0
|
|
|||||
TOTAL ASSETS
|
$
|
2,299.4
|
|
|
$
|
1,479.9
|
|
|
$
|
471.0
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
7.1
|
|
|
$
|
92.3
|
|
|
$
|
0.8
|
|
|
$
|
(0.7
|
)
|
|
$
|
99.5
|
|
Accrued employment costs
|
13.7
|
|
|
38.9
|
|
|
0.1
|
|
|
—
|
|
|
52.7
|
|
|||||
State and local taxes payable
|
—
|
|
|
30.0
|
|
|
0.2
|
|
|
—
|
|
|
30.2
|
|
|||||
Accrued interest
|
31.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.4
|
|
|||||
Contingent claims
|
55.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.6
|
|
|||||
Partnership distribution payable
|
—
|
|
|
44.2
|
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|||||
Current liabilities of discontinued operations
|
—
|
|
|
—
|
|
|
75.0
|
|
|
—
|
|
|
75.0
|
|
|||||
Other current liabilities
|
7.4
|
|
|
54.5
|
|
|
1.7
|
|
|
—
|
|
|
63.6
|
|
|||||
TOTAL CURRENT LIABILITIES
|
115.2
|
|
|
259.9
|
|
|
77.8
|
|
|
(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
|
|
|
27.1
|
|
|
—
|
|
|
167.7
|
|
|||||
LONG-TERM DEBT
|
2,304.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,304.2
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
242.0
|
|
|
—
|
|
|
—
|
|
|
(242.0
|
)
|
|
—
|
|
|||||
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
52.2
|
|
|
—
|
|
|
52.2
|
|
|||||
OTHER LIABILITIES
|
15.7
|
|
|
147.2
|
|
|
0.6
|
|
|
—
|
|
|
163.5
|
|
|||||
TOTAL LIABILITIES
|
2,743.5
|
|
|
978.3
|
|
|
(81.6
|
)
|
|
(242.7
|
)
|
|
3,397.5
|
|
|||||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL CLIFFS SHAREHOLDERS' EQUITY (DEFICIT)
|
(444.1
|
)
|
|
501.6
|
|
|
552.4
|
|
|
(1,054.2
|
)
|
|
(444.3
|
)
|
|||||
NONCONTROLLING INTEREST
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
TOTAL DEFICIT
|
(444.1
|
)
|
|
501.6
|
|
|
552.6
|
|
|
(1,054.2
|
)
|
|
(444.1
|
)
|
|||||
TOTAL LIABILITIES AND DEFICIT
|
$
|
2,299.4
|
|
|
$
|
1,479.9
|
|
|
$
|
471.0
|
|
|
$
|
(1,296.9
|
)
|
|
$
|
2,953.4
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income
|
|||||||||||||||||||
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
|
$
|
—
|
|
|
$
|
1,379.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,379.7
|
|
Freight and venture partners' cost reimbursements
|
—
|
|
|
174.8
|
|
|
—
|
|
|
—
|
|
|
174.8
|
|
|||||
|
—
|
|
|
1,554.5
|
|
|
—
|
|
|
—
|
|
|
1,554.5
|
|
|||||
COST OF GOODS SOLD AND OPERATING EXPENSES
|
—
|
|
|
(1,274.4
|
)
|
|
—
|
|
|
—
|
|
|
(1,274.4
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
280.1
|
|
|
—
|
|
|
—
|
|
|
280.1
|
|
|||||
OTHER OPERATING INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(94.3
|
)
|
|
(18.0
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(115.8
|
)
|
|||||
Miscellaneous - net
|
(5.6
|
)
|
|
(12.4
|
)
|
|
(15.6
|
)
|
|
—
|
|
|
(33.6
|
)
|
|||||
|
(99.9
|
)
|
|
(30.4
|
)
|
|
(19.1
|
)
|
|
—
|
|
|
(149.4
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(99.9
|
)
|
|
249.7
|
|
|
(19.1
|
)
|
|
—
|
|
|
130.7
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(194.5
|
)
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
|
(193.9
|
)
|
|||||
Gain on extinguishment/restructuring of debt
|
166.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166.3
|
|
|||||
Other non-operating income (expense)
|
(4.1
|
)
|
|
(5.0
|
)
|
|
16.4
|
|
|
—
|
|
|
7.3
|
|
|||||
|
(32.3
|
)
|
|
(4.9
|
)
|
|
16.9
|
|
|
—
|
|
|
(20.3
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(132.2
|
)
|
|
244.8
|
|
|
(2.2
|
)
|
|
—
|
|
|
110.4
|
|
|||||
INCOME TAX BENEFIT
|
4.3
|
|
|
3.0
|
|
|
4.9
|
|
|
—
|
|
|
12.2
|
|
|||||
EQUITY IN INCOME OF SUBSIDIARIES
|
319.1
|
|
|
13.7
|
|
|
—
|
|
|
(332.8
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
191.2
|
|
|
261.5
|
|
|
2.7
|
|
|
(332.8
|
)
|
|
122.6
|
|
|||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
|
(17.1
|
)
|
|
2.6
|
|
|
91.2
|
|
|
—
|
|
|
76.7
|
|
|||||
NET INCOME (LOSS)
|
174.1
|
|
|
264.1
|
|
|
93.9
|
|
|
(332.8
|
)
|
|
199.3
|
|
|||||
INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
—
|
|
|
(25.2
|
)
|
|
—
|
|
|
—
|
|
|
(25.2
|
)
|
|||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
174.1
|
|
|
$
|
238.9
|
|
|
$
|
93.9
|
|
|
$
|
(332.8
|
)
|
|
$
|
174.1
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
(3.3
|
)
|
|
(20.7
|
)
|
|
15.4
|
|
|
5.3
|
|
|
(3.3
|
)
|
|||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
$
|
170.8
|
|
|
$
|
218.2
|
|
|
$
|
109.3
|
|
|
$
|
(327.5
|
)
|
|
$
|
170.8
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Year Ended December 31, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(120.7
|
)
|
|
$
|
741.0
|
|
|
$
|
(141.8
|
)
|
|
$
|
—
|
|
|
$
|
478.5
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.2
|
)
|
|
(207.3
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(208.6
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(82.3
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
(87.5
|
)
|
|||||
Intercompany investing
|
399.1
|
|
|
(7.1
|
)
|
|
120.7
|
|
|
(512.7
|
)
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
3.1
|
|
|
19.9
|
|
|
—
|
|
|
23.0
|
|
|||||
Net cash provided (used) in investing activities
|
397.9
|
|
|
(293.6
|
)
|
|
135.3
|
|
|
(512.7
|
)
|
|
(273.1
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase of common shares
|
(47.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.5
|
)
|
|||||
Debt issuance costs
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|||||
Repurchase of debt
|
(234.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(234.5
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
|
(44.2
|
)
|
|||||
Intercompany financing
|
(120.7
|
)
|
|
(402.4
|
)
|
|
10.4
|
|
|
512.7
|
|
|
—
|
|
|||||
Other financing activities
|
(2.1
|
)
|
|
(2.2
|
)
|
|
(43.2
|
)
|
|
—
|
|
|
(47.5
|
)
|
|||||
Net cash used by financing activities
|
(406.3
|
)
|
|
(448.8
|
)
|
|
(32.8
|
)
|
|
512.7
|
|
|
(375.2
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
(129.1
|
)
|
|
(1.4
|
)
|
|
(41.6
|
)
|
|
—
|
|
|
(172.1
|
)
|
|||||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
(17.0
|
)
|
|
—
|
|
|
(17.0
|
)
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(129.1
|
)
|
|
(1.4
|
)
|
|
(24.6
|
)
|
|
—
|
|
|
(155.1
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
948.9
|
|
|
2.1
|
|
|
27.3
|
|
|
—
|
|
|
978.3
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
819.8
|
|
|
$
|
0.7
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
823.2
|
|
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
|
)
|
|
$
|
430.0
|
|
|
$
|
74.9
|
|
|
$
|
—
|
|
|
$
|
338.1
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(3.4
|
)
|
|
(79.8
|
)
|
|
(51.7
|
)
|
|
—
|
|
|
(134.9
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(11.7
|
)
|
|
(5.1
|
)
|
|
—
|
|
|
(16.8
|
)
|
|||||
Intercompany investing
|
225.7
|
|
|
(7.3
|
)
|
|
(45.1
|
)
|
|
(173.3
|
)
|
|
—
|
|
|||||
Other investing activities
|
(7.7
|
)
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|||||
Net cash provided (used) by investing activities
|
214.6
|
|
|
(95.4
|
)
|
|
(101.9
|
)
|
|
(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
|
|
|
(277.6
|
)
|
|
59.3
|
|
|
173.3
|
|
|
—
|
|
|||||
Other financing activities
|
(5.8
|
)
|
|
(4.5
|
)
|
|
(16.4
|
)
|
|
—
|
|
|
(26.7
|
)
|
|||||
Net cash provided (used) by financing activities
|
617.7
|
|
|
(335.0
|
)
|
|
42.9
|
|
|
173.3
|
|
|
498.9
|
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
665.5
|
|
|
(0.4
|
)
|
|
19.2
|
|
|
—
|
|
|
684.3
|
|
|||||
LESS: INCREASE IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
18.8
|
|
|
—
|
|
|
18.8
|
|
|||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
665.5
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
—
|
|
|
665.5
|
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
283.4
|
|
|
2.5
|
|
|
26.9
|
|
|
—
|
|
|
312.8
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
948.9
|
|
|
$
|
2.1
|
|
|
$
|
27.3
|
|
|
$
|
—
|
|
|
$
|
978.3
|
|
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
|
)
|
|
(55.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(61.7
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(4.9
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
(7.4
|
)
|
|||||
Intercompany investments
|
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 on 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, INCLUDING CASH CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
72.7
|
|
|
0.7
|
|
|
(35.2
|
)
|
|
—
|
|
|
38.2
|
|
|||||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS CLASSIFIED WITHIN CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
(35.3
|
)
|
|
—
|
|
|
(35.3
|
)
|
|||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
72.7
|
|
|
0.7
|
|
|
0.1
|
|
|
—
|
|
|
73.5
|
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
210.7
|
|
|
1.8
|
|
|
26.8
|
|
|
—
|
|
|
239.3
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
283.4
|
|
|
$
|
2.5
|
|
|
$
|
26.9
|
|
|
$
|
—
|
|
|
$
|
312.8
|
|
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 6.25% Notes due 2040 Third Supplemental Indenture between Cliffs Natural Resources Inc. and U.S. Bank National Association, as trustee, dated September 20, 2010, including Form of 6.25% Notes due 2040 (filed as Exhibit 4.4 to Cliffs’ Form 8-K on September 17, 2010 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 as Exhibit 10.36 to Cliffs' Form 10-K for period ended December 31, 2017 and incorporated herein by reference)
|
|
* 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. 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)
|
|
* Form of Cliffs Natural Resources Inc. Amended and Restated 2012 Incentive Equity Plan Performance Unit Award Memorandum (2014 Grant) and Performance Unit Award Agreement (filed as Exhibit 10.3 to Cliffs’ Form 8-K/A on September 16, 2014 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. Amended and Restated 2012 Incentive Equity Plan Non-Qualified Stock Option Award Memorandum (3-Year Vesting – January 2015 Grant) and Stock Option Award Agreement (filed as Exhibit 10.69 to Cliffs’ Form 10-K for the period ended December 31, 2014 and incorporated herein by reference)
|
|
* Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan (filed as Exhibit 10.1 to Cliffs’ Form 8-K on May 21, 2015 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan Restricted Stock Unit Award Memorandum (Vesting December 31, 2018) and Restricted Stock Unit Award Agreement (filed as Exhibit 10.1 to Cliffs’ Form 10-Q for the period ended March 31, 2016 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan Cash Incentive Award Memorandum (TSR) (Vesting December 31, 2018) and Cash Incentive Award Agreement (TSR) (filed as Exhibit 10.2 to Cliffs’ Form 10-Q for the period ended March 31, 2016 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan Cash Incentive Award Memorandum (EBITDA) (January 1, 20XX - December 31, 20XX) and Cash Incentive Award Agreement (EBITDA) (filed as Exhibit 10.3 to Cliffs’ Form 10-Q for the period ended March 31, 2016 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan, as Amended, Performance Share Award Memorandum and Performance Share Award Agreement (filed as Exhibit 10.3 to Cliffs’ Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference)
|
|
* Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan (filed as Exhibit 10.1 to Cliffs’ Form 8-K on April 27, 2017 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan Performance Share Award Memorandum and Performance Share Award Agreement (filed as Exhibit 10.4 to Cliffs’ Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference)
|
|
* Form of Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan Restricted Stock Unit Award Memorandum and Restricted Stock Unit Award Agreement (filed as Exhibit 10.5 to Cliffs’ Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference)
|
**
|
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 8, 2019
|
|
|
|
|
|
Chief Accounting Officer
|
Signatures
|
Title
|
Date
|
|||
|
|
|
|||
/s/ C. L. Goncalves
|
Chairman, President and
|
February 8, 2019
|
|||
C. L. Goncalves
|
Chief Executive Officer
|
|
|||
|
(Principal Executive Officer)
|
|
|||
/s/ T. K. Flanagan
|
Executive Vice President,
|
February 8, 2019
|
|||
T. K. Flanagan
|
Chief Financial Officer
|
|
|||
|
(Principal Financial Officer)
|
|
|||
/s/ R. C. Cebula
|
Vice President, Corporate Controller &
|
February 8, 2019
|
|||
R. C. Cebula
|
Chief Accounting Officer
|
|
|||
|
(Principal Accounting Officer)
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
J. T. Baldwin
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
R. P. Fisher, Jr.
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
S. M. Green
|
|
|
|||
|
Director
|
N/A
|
|||
M. A. Harlan
|
|
|
|||
|
Director
|
N/A
|
|||
J. L. Miller
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
J. A. Rutkowski, Jr.
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
E. M. Rychel
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
M. D. Siegal
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
G. Stoliar
|
|
|
|||
*
|
Director
|
February 8, 2019
|
|||
D. C. Taylor
|
|
|
By:
|
/s/ T. K. Flanagan
|
|
(T. K. Flanagan, as Attorney-in-Fact)
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
If to Cliffs:
|
200 Public Square - 32nd Floor
Cleveland, Ohio 44114
Attention: Senior Vice President Global Iron Ore Metallic Sales
cc: Group Counsel - Commercial
E-mail: Terrence.mee@cliffsnr.com
Susanne.dickerson@cliffsnr.com
|
If to AK Steel:
|
9227 Centre Pointe Drive
West Chester, OH 45069
Attn: Vice President - Engineering, Raw Materials & Energy
E-mail: mo.reed@aksteel.com
cc: Manager Raw Materials Purchasing
E-mail: alexander.vincze@akstell.com
|
CLIFFS SALES COMPANY
|
|
AK STEEL CORPORATION
|
||
By:
|
/s/ P. Kelly Tompkins
|
|
By:
|
/s/ Mo Reed
|
Name:
|
P. Kelly Tompkins
|
|
Name:
|
Mo Reed
|
Title:
|
|
|
Title:
|
VP Engineering, Raw Materials & Energy
|
Date:
|
2/27/2014
|
|
Date:
|
2/20/2014
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
EXHIBIT A
|
||||||||||||||
CLIFFS SALES COMPANY
|
||||||||||||||
AK STEEL CORPORATION
|
||||||||||||||
PELLET TYPICAL ANALYSIS AS LOADED TO VESSEL FOR SHIPMENT
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Report
|
|
|
TILDEN HEMATITE
|
||||
|
|
|
|
|
|
|
Frequency
|
|
|
Typical
|
|
Minimum
|
|
Maximum
|
Moisture
|
|
V
|
|
|
***
|
|
|
|
***
|
|||||
A. DRY CHEMICAL ANALYSIS
|
|
|
|
|
|
|
|
|
|
|||||
|
Fe
|
|
|
|
|
V
|
|
|
61.0
|
|
|
|
|
|
|
SiO2
|
|
|
|
V
|
|
|
***
|
|
***
|
|
***
|
||
|
AI2O3
|
|
|
V
|
|
|
***
|
|
***
|
|
***
|
|||
|
CaO
|
|
|
|
V
|
|
|
***
|
|
***
|
|
***
|
||
|
MgO
|
|
|
|
V
|
|
|
***
|
|
***
|
|
***
|
||
|
Mn
|
|
|
|
V
|
|
|
***
|
|
|
|
|
||
|
Phos
|
|
|
V
|
|
|
***
|
|
|
|
***
|
|||
|
CaO / SiO2
|
|
V
|
|
|
***
|
|
***
|
|
***
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B. SIZING, Wt. %
|
|
|
|
|
|
|
|
|
|
|||||
|
% + 1/2"
|
|
V
|
|
|
***
|
|
|
|
***
|
||||
|
% - 1/2" x + 3/8"
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
% - 1/4"
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. TUMBLE TEST
|
|
|
|
|
|
|
|
|
|
|||||
|
% + 1/4" before tumble
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
% + 1/4" after tumble
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. COMPRESSION TEST
|
|
|
|
|
|
|
|
|
|
|||||
|
Minus 1/2" by plus 3/8"
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
% - 300 lbs
|
|
V
|
|
|
***
|
|
|
|
***
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. METALLURGICAL TESTS
|
|
|
|
|
|
|
|
|
|
|||||
|
LTB
|
|
|
|
V
|
|
|
***
|
|
***
|
|
|
||
|
Reducibility R40
|
|
V
|
|
|
***
|
|
***
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LETTER "V" DENOTES THAT ANALYSIS TO BE PROVIDED ON EACH VESSEL SHIPMENT OF PELLETS
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
|
EXHIBIT C
|
|
CLIFFS SALES COMPANY
|
|
AK STEEL CORPORATION
|
|
EXAMPLE OF 2014 - 2023 ANNUAL PELLET PRICE CALCULATION
|
|
|
|
|
|
2014 Pellet Price Calculation
|
|
(All dollar values and index percent changes are estimated for illustrative purposes only.)
|
|
|
|
Percent Change in PPI - *** (***)
1
|
***
|
Percent Change in PPI - ***
|
***
|
|
|
Percent Change in PPI - *** (***)
1
|
***
|
Percent Change in PPI - ***
|
***
|
|
|
Percent Change in PPI - *** (***)
1
|
***
|
Percent Change in PPI ***
|
***
|
|
|
*** arithmetic average of each ***
2
|
***
|
*** arithmetic average of each *** price
2
|
***
|
Percent Change in *** (***)
|
***
|
Percent Change in ***
|
***
|
|
|
Total Adjustment Factors Percent Change
|
***
|
|
|
|
|
2014 Base Price Per Iron Unit Delivered to Toledo, OH
|
***
|
Per Iron Unit Price Change
|
***
|
Final 2014 Price Per Iron Unit Delivered to Toledo, OH
|
***
|
|
|
2014 Base Price Per Iron Unit Delivered to Ashtabula, OH
|
***
|
Per Iron Unit Price Change
|
***
|
Final 2014 Price Per Iron Unit Delivered to Ashtabula, OH
|
***
|
|
|
1
As published by the Bureau of Labor Statistics, based on a ***
|
|
|
|
2
***
|
SIGNIFICANT SUBSIDIARIES
|
CLEVELAND-CLIFFS INC. AS OF DECEMBER 31, 2018
|
Name
|
Cliffs' Effective Ownership
|
Place of Incorporation
|
Cliffs Mining Company
|
100%
|
Delaware, USA
|
Cliffs Minnesota Mining Company
|
100%
|
Delaware, USA
|
Cliffs TIOP Holding, LLC
|
100%
|
Delaware, USA
|
Cliffs TIOP, Inc.
|
100%
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Michigan, USA
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Cliffs UTAC Holding LLC
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100%
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Delaware, USA
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The Cleveland-Cliffs Iron Company
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100%
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Ohio, USA
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Northshore Mining Company
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100%
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Michigan, USA
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/s/ C. L. Goncalves
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/s/ T. K. Flanagan
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C. L. Goncalves,
Chairman, President and Chief Executive Officer
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T. K. Flanagan,
Executive Vice President, Chief Financial Officer
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/s/ R. C. Cebula
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/s/ J. T. Baldwin
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R. C. Cebula,
Vice President, Corporate Controller & Chief Accounting Officer
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J. T. Baldwin, Director
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/s/ R. P. Fisher, Jr.
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/s/ S. M. Green
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R. P. Fisher, Jr., Director
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S. M. Green, Director
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/s/ J. A. Rutkowski, Jr.
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/s/ E. M. Rychel
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J. A. Rutkowski, Jr., Director
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E. M. Rychel, Director
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/s/ M. D. Siegal
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/s/ G. Stoliar
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M. D. Siegal, Director
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G. Stoliar, Director
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/s/ D. C. Taylor
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D. C. Taylor, Director
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1.
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I have reviewed this annual report on Form 10-K of Cleveland-Cliffs Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 8, 2019
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By:
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/s/ Lourenco Goncalves
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Lourenco Goncalves
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Chairman, President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Cleveland-Cliffs Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 8, 2019
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By:
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/s/ Timothy K. Flanagan
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Timothy K. Flanagan
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Executive Vice President, Chief Financial Officer
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(1)
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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
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(2)
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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.
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Date:
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February 8, 2019
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By:
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/s/ Lourenco Goncalves
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Lourenco Goncalves
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Chairman, President and Chief Executive Officer
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(1)
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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
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(2)
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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.
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Date:
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February 8, 2019
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By:
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/s/ Timothy K. Flanagan
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Timothy K. Flanagan
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Executive Vice President, Chief Financial Officer
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(A)
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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;
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(B)
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The total number of orders issued under section 104(b) of the FMSH Act (30 U.S.C. 814(b));
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(C)
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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));
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(D)
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The total number of imminent danger orders issued under section 107(a) of the FMSH Act (30 U.S.C. 817(a));
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(E)
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The total dollar value of proposed assessments from MSHA under the FMSH Act (30 U.S.C. 801 et seq.);
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(F)
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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;
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(G)
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Legal actions initiated before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period; and
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(H)
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Legal actions resolved before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period.
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(1)
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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, 2018
.
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(2)
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This number consists of 12 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules and 1 pending legal action related to complaints of discharge, discrimination, or interference referenced in Subpart E of FMSH Act's procedural rules.
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(3)
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This number consists of 11 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
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(4)
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This number consists of 8 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules and 1 pending legal action related to complaints of discharge, discrimination, or interference referenced in Subpart E of FMSH Act's procedural rules.
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Cleveland-Cliffs Inc. and Subsidiaries
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|||||||||||||||||||||||
Schedule II – Valuation and Qualifying Accounts
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(In Millions)
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||||||||||||
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Additions
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||||||||||||||||
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Balance at Beginning of Year
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Charged to Cost and Expenses
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Charged to Other Accounts
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Balance at End of Year
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||||||||||||
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||||||||||||||||
Classification
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Acquisition
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Deductions
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||||||||||||||||
Year Ended December 31, 2018:
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||||||||||||
Deferred Tax Valuation Allowance
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$
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1,983.1
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|
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$
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(691.3
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)
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$
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(4.5
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)
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$
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—
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$
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—
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$
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1,287.3
|
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Year Ended December 31, 2017:
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Deferred Tax Valuation Allowance
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$
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3,095.1
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|
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$
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(1,120.0
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)
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$
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(9.8
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)
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$
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17.8
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|
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$
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—
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$
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1,983.1
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Year Ended December 31, 2016:
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Deferred Tax Valuation Allowance
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$
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3,099.8
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$
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(7.6
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)
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$
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5.1
|
|
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$
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—
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|
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$
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2.2
|
|
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$
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3,095.1
|
|
Accounts Receivable Allowance
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$
|
7.1
|
|
|
$
|
—
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|
|
$
|
(7.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|