|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
Ohio
|
|
34-1464672
|
|
||
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
||
|
|
|
|
|
||
|
200 Public Square,
|
Cleveland,
|
Ohio
|
|
44114-2315
|
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common shares, par value $0.125 per share
|
|
CLF
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
Abbreviation or acronym
|
|
Term
|
A&R 2015 Equity Plan
|
|
Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan
|
ABL Facility
|
|
Amended and Restated Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, as the Lenders, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, and Amended and Restated as of February 28, 2018
|
Adjusted EBITDA
|
|
EBITDA excluding certain items such as extinguishment/restructuring of debt, impacts of discontinued operations, foreign currency exchange remeasurement, impairment of other long-lived assets, severance and intersegment corporate allocations of SG&A costs
|
ArcelorMittal
|
|
ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco, as well as many other subsidiaries)
|
AMT
|
|
Alternative Minimum Tax
|
ASC
|
|
Accounting Standards Codification
|
ASU
|
|
Accounting Standards Update
|
Bloom Lake Group
|
|
Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC
|
CCAA
|
|
Companies' Creditors Arrangement Act (Canada)
|
Compensation Committee
|
|
Compensation and Organization Committee of the Board of Directors
|
Dodd-Frank Act
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
DR-grade
|
|
Direct Reduction-grade
|
EBITDA
|
|
Earnings before interest, taxes, depreciation and amortization
|
Empire
|
|
Empire Iron Mining Partnership
|
Exchange Act
|
|
Securities Exchange Act of 1934, as amended
|
FASB
|
|
Financial Accounting Standards Board
|
Fe
|
|
Iron
|
FMSH Act
|
|
U.S. Federal Mine Safety and Health Act 1977, as amended
|
GAAP
|
|
Accounting principles generally accepted in the United States
|
HBI
|
|
Hot briquetted iron
|
Hibbing
|
|
Hibbing Taconite Company, an unincorporated joint venture
|
Hot-rolled coil steel price
|
|
Estimated average annual daily market price for hot-rolled coil steel
|
Long ton
|
|
2,240 pounds
|
Metric ton
|
|
2,205 pounds
|
MMBtu
|
|
Million British Thermal Units
|
MSHA
|
|
U.S. Mine Safety and Health Administration
|
Net ton
|
|
2,000 pounds
|
Northshore
|
|
Northshore Mining Company
|
OPEB
|
|
Other postretirement employment benefits
|
Platts 62% Price
|
|
Platts IODEX 62% Fe Fines CFR North China
|
PPI
|
|
Producer Price Indices
|
SEC
|
|
U.S. Securities and Exchange Commission
|
SG&A
|
|
Selling, general and administrative
|
Tilden
|
|
Tilden Mining Company L.C.
|
Topic 606
|
|
ASC Topic 606, Revenue from Contracts with Customers
|
Topic 815
|
|
ASC Topic 815, Derivatives and Hedging
|
TSR
|
|
Total shareholder return
|
United Taconite
|
|
United Taconite LLC
|
U.S.
|
|
United States of America
|
U.S. Steel
|
|
U.S Steel Corporation and all subsidiaries
|
Wabush Group
|
|
Wabush Iron Co. Limited and Wabush Resources Inc., and certain of its affiliates, including Wabush Mines (an unincorporated joint venture of Wabush Iron Co. Limited and Wabush Resources Inc.), Arnaud Railway Company and Wabush Lake Railway Company
|
Item 1.
|
Financial Statements
|
|
(In Millions)
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
399.3
|
|
|
$
|
823.2
|
|
Accounts receivable, net
|
164.9
|
|
|
226.7
|
|
||
Finished goods inventories
|
162.2
|
|
|
77.8
|
|
||
Work-in-process inventories
|
55.2
|
|
|
10.1
|
|
||
Supplies and other inventories
|
110.8
|
|
|
93.2
|
|
||
Derivative assets
|
72.8
|
|
|
91.5
|
|
||
Income tax receivable, current
|
58.7
|
|
|
117.3
|
|
||
Other current assets
|
40.7
|
|
|
39.8
|
|
||
TOTAL CURRENT ASSETS
|
1,064.6
|
|
|
1,479.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
1,769.9
|
|
|
1,286.0
|
|
||
OTHER ASSETS
|
|
|
|
||||
Deposits for property, plant and equipment
|
41.6
|
|
|
83.0
|
|
||
Income tax receivable, non-current
|
62.7
|
|
|
121.3
|
|
||
Deferred income taxes
|
437.5
|
|
|
464.8
|
|
||
Other non-current assets
|
114.9
|
|
|
94.9
|
|
||
TOTAL OTHER ASSETS
|
656.7
|
|
|
764.0
|
|
||
TOTAL ASSETS
|
$
|
3,491.2
|
|
|
$
|
3,529.6
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
515.0
|
|
|
$
|
684.7
|
|
|
$
|
1,357.8
|
|
|
$
|
1,525.9
|
|
Freight
|
40.6
|
|
|
57.1
|
|
|
98.0
|
|
|
110.2
|
|
||||
|
555.6
|
|
|
741.8
|
|
|
1,455.8
|
|
|
1,636.1
|
|
||||
COST OF GOODS SOLD
|
(400.7
|
)
|
|
(480.2
|
)
|
|
(1,007.0
|
)
|
|
(1,028.5
|
)
|
||||
SALES MARGIN
|
154.9
|
|
|
261.6
|
|
|
448.8
|
|
|
607.6
|
|
||||
OTHER OPERATING EXPENSE
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
(25.5
|
)
|
|
(29.1
|
)
|
|
(82.2
|
)
|
|
(78.9
|
)
|
||||
Miscellaneous – net
|
(7.8
|
)
|
|
(7.0
|
)
|
|
(19.0
|
)
|
|
(18.7
|
)
|
||||
|
(33.3
|
)
|
|
(36.1
|
)
|
|
(101.2
|
)
|
|
(97.6
|
)
|
||||
OPERATING INCOME
|
121.6
|
|
|
225.5
|
|
|
347.6
|
|
|
510.0
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(25.3
|
)
|
|
(29.5
|
)
|
|
(76.5
|
)
|
|
(93.1
|
)
|
||||
Gain (loss) on extinguishment of debt
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|
0.2
|
|
||||
Other non-operating income
|
0.3
|
|
|
4.3
|
|
|
1.3
|
|
|
13.1
|
|
||||
|
(25.0
|
)
|
|
(25.2
|
)
|
|
(93.4
|
)
|
|
(79.8
|
)
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
96.6
|
|
|
200.3
|
|
|
254.2
|
|
|
430.2
|
|
||||
INCOME TAX EXPENSE
|
(4.8
|
)
|
|
(0.5
|
)
|
|
(23.1
|
)
|
|
(14.4
|
)
|
||||
INCOME FROM CONTINUING OPERATIONS
|
91.8
|
|
|
199.8
|
|
|
231.1
|
|
|
415.8
|
|
||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
(0.9
|
)
|
|
238.0
|
|
|
(1.5
|
)
|
|
102.8
|
|
||||
NET INCOME
|
$
|
90.9
|
|
|
$
|
437.8
|
|
|
$
|
229.6
|
|
|
$
|
518.6
|
|
|
|
|
|
|
|
|
|
||||||||
EARNINGS (LOSS) PER COMMON SHARE – BASIC
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.34
|
|
|
$
|
0.67
|
|
|
$
|
0.83
|
|
|
$
|
1.40
|
|
Discontinued operations
|
—
|
|
|
0.80
|
|
|
(0.01
|
)
|
|
0.35
|
|
||||
|
$
|
0.34
|
|
|
$
|
1.47
|
|
|
$
|
0.82
|
|
|
$
|
1.75
|
|
EARNINGS (LOSS) PER COMMON SHARE – DILUTED
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.64
|
|
|
$
|
0.80
|
|
|
$
|
1.37
|
|
Discontinued operations
|
—
|
|
|
0.77
|
|
|
—
|
|
|
0.34
|
|
||||
|
$
|
0.33
|
|
|
$
|
1.41
|
|
|
$
|
0.80
|
|
|
$
|
1.71
|
|
AVERAGE NUMBER OF SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Basic
|
269,960
|
|
|
297,878
|
|
|
278,418
|
|
|
297,587
|
|
||||
Diluted
|
276,578
|
|
|
310,203
|
|
|
287,755
|
|
|
303,518
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
NET INCOME
|
$
|
90.9
|
|
|
$
|
437.8
|
|
|
$
|
229.6
|
|
|
$
|
518.6
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Changes in pension and other post-retirement benefits, net of tax
|
5.8
|
|
|
6.8
|
|
|
17.3
|
|
|
20.2
|
|
||||
Changes in foreign currency translation
|
—
|
|
|
(228.3
|
)
|
|
—
|
|
|
(225.4
|
)
|
||||
Changes in derivative financial instruments, net of tax
|
0.4
|
|
|
0.3
|
|
|
1.0
|
|
|
0.8
|
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
6.2
|
|
|
(221.2
|
)
|
|
18.3
|
|
|
(204.4
|
)
|
||||
TOTAL COMPREHENSIVE INCOME
|
$
|
97.1
|
|
|
$
|
216.6
|
|
|
$
|
247.9
|
|
|
$
|
314.2
|
|
|
(In Millions)
|
||||||
|
Nine Months Ended
September 30, |
||||||
|
2019
|
|
2018
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
229.6
|
|
|
$
|
518.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
63.1
|
|
|
68.6
|
|
||
Deferred income taxes
|
22.7
|
|
|
—
|
|
||
Loss (gain) on extinguishment of debt
|
18.2
|
|
|
(0.2
|
)
|
||
Change in derivatives
|
48.4
|
|
|
(136.4
|
)
|
||
Gain on foreign currency translation
|
—
|
|
|
(228.1
|
)
|
||
Other
|
49.4
|
|
|
5.7
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables and other assets
|
156.5
|
|
|
96.2
|
|
||
Inventories
|
(129.4
|
)
|
|
(57.1
|
)
|
||
Payables, accrued expenses and other liabilities
|
(70.4
|
)
|
|
(78.6
|
)
|
||
Net cash provided by operating activities
|
388.1
|
|
|
188.7
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of property, plant and equipment
|
(447.9
|
)
|
|
(111.4
|
)
|
||
Deposits for property, plant and equipment
|
(12.8
|
)
|
|
(83.3
|
)
|
||
Other investing activities
|
11.2
|
|
|
21.0
|
|
||
Net cash used by investing activities
|
(449.5
|
)
|
|
(173.7
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Repurchase of common shares
|
(252.9
|
)
|
|
—
|
|
||
Dividends paid
|
(45.1
|
)
|
|
—
|
|
||
Proceeds from issuance of debt
|
720.9
|
|
|
—
|
|
||
Debt issuance costs
|
(6.8
|
)
|
|
(1.5
|
)
|
||
Repurchase of debt
|
(729.3
|
)
|
|
(16.3
|
)
|
||
Distributions of partnership equity
|
(44.2
|
)
|
|
(44.2
|
)
|
||
Other financing activities
|
(9.5
|
)
|
|
(45.7
|
)
|
||
Net cash used by financing activities
|
(366.9
|
)
|
|
(107.7
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
(2.3
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN OTHER CURRENT ASSETS RELATED TO DISCONTINUED OPERATIONS
|
(428.3
|
)
|
|
(95.0
|
)
|
||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS, CLASSIFIED WITHIN OTHER CURRENT ASSETS
|
(4.4
|
)
|
|
(13.8
|
)
|
||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(423.9
|
)
|
|
(81.2
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
823.2
|
|
|
978.3
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
399.3
|
|
|
$
|
897.1
|
|
|
(In Millions)
|
|||||||||||||||||||||||||
|
Number
of Common Shares Outstanding |
|
Par Value of Common
Shares Issued |
|
Capital in
Excess of Par Value of Shares |
|
Retained
Deficit |
|
Common
Shares in Treasury |
|
Accumulated
Other Comprehensive Loss |
|
Total
|
|||||||||||||
December 31, 2018
|
292.6
|
|
|
$
|
37.7
|
|
|
$
|
3,916.7
|
|
|
$
|
(3,060.2
|
)
|
|
$
|
(186.1
|
)
|
|
$
|
(283.9
|
)
|
|
$
|
424.2
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.1
|
)
|
|
—
|
|
|
—
|
|
|
(22.1
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|
8.4
|
|
||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(13.7
|
)
|
||||||||||||
Stock and other incentive plans
|
1.7
|
|
|
—
|
|
|
(56.5
|
)
|
|
—
|
|
|
46.5
|
|
|
—
|
|
|
(10.0
|
)
|
||||||
Common share repurchases
|
(11.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124.3
|
)
|
|
—
|
|
|
(124.3
|
)
|
||||||
Common share dividends ($0.05 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.5
|
)
|
|
—
|
|
|
—
|
|
|
(14.5
|
)
|
||||||
March 31, 2019
|
282.8
|
|
|
$
|
37.7
|
|
|
$
|
3,860.2
|
|
|
$
|
(3,096.8
|
)
|
|
$
|
(263.9
|
)
|
|
$
|
(275.5
|
)
|
|
$
|
261.7
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
160.8
|
|
|
—
|
|
|
—
|
|
|
160.8
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
3.7
|
|
||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
164.5
|
|
||||||||||||
Stock and other incentive plans
|
0.1
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
4.6
|
|
||||||
Common share repurchases
|
(12.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128.6
|
)
|
|
—
|
|
|
(128.6
|
)
|
||||||
Common share dividends ($0.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.6
|
)
|
|
—
|
|
|
—
|
|
|
(16.6
|
)
|
||||||
June 30, 2019
|
270.0
|
|
|
$
|
37.7
|
|
|
$
|
3,863.6
|
|
|
$
|
(2,952.6
|
)
|
|
$
|
(391.3
|
)
|
|
$
|
(271.8
|
)
|
|
$
|
285.6
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
90.9
|
|
|
—
|
|
|
—
|
|
|
90.9
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
6.2
|
|
||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
97.1
|
|
||||||||||||
Stock and other incentive plans
|
0.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
4.5
|
|
||||||
Common share dividends ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.3
|
)
|
|
—
|
|
|
—
|
|
|
(27.3
|
)
|
||||||
September 30, 2019
|
270.1
|
|
|
$
|
37.7
|
|
|
$
|
3,867.7
|
|
|
$
|
(2,889.0
|
)
|
|
$
|
(390.9
|
)
|
|
$
|
(265.6
|
)
|
|
$
|
359.9
|
|
|
(In Millions)
|
|||||||||||||||||||||||||||||
|
Number
of Common Shares Outstanding |
|
Par Value of Common
Shares Issued |
|
Capital in
Excess of Par Value of Shares |
|
Retained
Deficit |
|
Common
Shares in Treasury |
|
Accumulated
Other Comprehensive Loss |
|
Non-Controlling Interest
|
|
Total
|
|||||||||||||||
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 loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(84.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84.3
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
7.7
|
|
|||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(76.6
|
)
|
||||||||||||||
Stock and other incentive plans
|
0.3
|
|
|
—
|
|
|
(15.8
|
)
|
|
—
|
|
|
17.7
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||||
March 31, 2018
|
297.7
|
|
|
$
|
37.7
|
|
|
$
|
3,918.1
|
|
|
$
|
(4,257.6
|
)
|
|
$
|
(151.9
|
)
|
|
$
|
(31.3
|
)
|
|
$
|
0.2
|
|
|
$
|
(484.8
|
)
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
165.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165.1
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174.2
|
|
||||||||||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Stock and other incentive plans
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|||||||
June 30, 2018
|
297.8
|
|
|
$
|
37.7
|
|
|
$
|
3,918.3
|
|
|
$
|
(4,092.5
|
)
|
|
$
|
(147.6
|
)
|
|
$
|
(22.2
|
)
|
|
$
|
—
|
|
|
$
|
(306.3
|
)
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
437.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
437.8
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(221.2
|
)
|
|
|
|
(221.2
|
)
|
||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
216.6
|
|
||||||||||||||
Stock and other incentive plans
|
0.2
|
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|||||||
September 30, 2018
|
298.0
|
|
|
$
|
37.7
|
|
|
$
|
3,913.3
|
|
|
$
|
(3,654.7
|
)
|
|
$
|
(139.1
|
)
|
|
$
|
(243.4
|
)
|
|
$
|
—
|
|
|
$
|
(86.2
|
)
|
Name
|
|
Location
|
|
Business Segment
|
|
Status of Operations
|
Northshore
|
|
Minnesota
|
|
Mining and Pelletizing
|
|
Active
|
United Taconite
|
|
Minnesota
|
|
Mining and Pelletizing
|
|
Active
|
Tilden
|
|
Michigan
|
|
Mining and Pelletizing
|
|
Active
|
Empire
|
|
Michigan
|
|
Mining and Pelletizing
|
|
Indefinitely Idled
|
Toledo HBI
|
|
Ohio
|
|
Metallics
|
|
Construction Stage
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
90.9
|
|
|
$
|
437.8
|
|
|
$
|
229.6
|
|
|
$
|
518.6
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(25.4
|
)
|
|
(29.7
|
)
|
|
(76.8
|
)
|
|
(95.5
|
)
|
||||
Income tax expense
|
(4.8
|
)
|
|
(0.5
|
)
|
|
(23.1
|
)
|
|
(14.4
|
)
|
||||
Depreciation, depletion and amortization
|
(22.2
|
)
|
|
(19.2
|
)
|
|
(63.1
|
)
|
|
(68.6
|
)
|
||||
EBITDA
|
$
|
143.3
|
|
|
$
|
487.2
|
|
|
$
|
392.6
|
|
|
$
|
697.1
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Impact of discontinued operations
|
$
|
(0.8
|
)
|
|
$
|
238.2
|
|
|
$
|
(1.2
|
)
|
|
$
|
120.4
|
|
Gain (loss) on extinguishment of debt
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|
0.2
|
|
||||
Severance costs
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
||||
Foreign exchange remeasurement
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Impairment of long-lived assets
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||
Adjusted EBITDA
|
$
|
144.1
|
|
|
$
|
250.3
|
|
|
$
|
413.7
|
|
|
$
|
578.3
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA:
|
|
|
|
|
|
|
|
||||||||
Mining and Pelletizing
|
$
|
177.5
|
|
|
$
|
273.1
|
|
|
$
|
494.9
|
|
|
$
|
641.6
|
|
Metallics
|
(2.1
|
)
|
|
(1.0
|
)
|
|
(4.0
|
)
|
|
(2.5
|
)
|
||||
Corporate and Other (including discontinued operations)
|
(32.1
|
)
|
|
215.1
|
|
|
(98.3
|
)
|
|
58.0
|
|
||||
Total EBITDA
|
$
|
143.3
|
|
|
$
|
487.2
|
|
|
$
|
392.6
|
|
|
$
|
697.1
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Mining and Pelletizing
|
$
|
182.7
|
|
|
$
|
279.5
|
|
|
$
|
510.7
|
|
|
$
|
657.9
|
|
Metallics
|
(2.1
|
)
|
|
(1.0
|
)
|
|
(4.0
|
)
|
|
(2.5
|
)
|
||||
Corporate
|
(36.5
|
)
|
|
(28.2
|
)
|
|
(93.0
|
)
|
|
(77.1
|
)
|
||||
Total Adjusted EBITDA
|
$
|
144.1
|
|
|
$
|
250.3
|
|
|
$
|
413.7
|
|
|
$
|
578.3
|
|
|
(In Millions)
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
Land rights and mineral rights
|
$
|
549.7
|
|
|
$
|
549.6
|
|
Office and information technology
|
72.9
|
|
|
70.0
|
|
||
Buildings
|
101.2
|
|
|
87.2
|
|
||
Mining equipment
|
577.0
|
|
|
548.5
|
|
||
Processing equipment
|
755.5
|
|
|
645.8
|
|
||
Electric power facilities
|
58.7
|
|
|
58.7
|
|
||
Land improvements
|
23.8
|
|
|
23.8
|
|
||
Asset retirement obligation
|
14.8
|
|
|
14.8
|
|
||
Other
|
29.2
|
|
|
25.2
|
|
||
Construction-in-progress
|
668.9
|
|
|
284.8
|
|
||
|
2,851.7
|
|
|
2,308.4
|
|
||
Allowance for depreciation and depletion
|
(1,081.8
|
)
|
|
(1,022.4
|
)
|
||
|
$
|
1,769.9
|
|
|
$
|
1,286.0
|
|
(In Millions)
|
||||||||||||||||||
September 30, 2019
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Secured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 4.875% 2024 Senior Notes
|
|
5.00%
|
|
$
|
400.0
|
|
|
$
|
(4.9
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
393.2
|
|
Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
$316.25 Million 1.50% 2025 Convertible Senior Notes
|
|
6.26%
|
|
316.3
|
|
|
(4.8
|
)
|
|
(67.7
|
)
|
|
243.8
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
6.01%
|
|
473.3
|
|
|
(3.8
|
)
|
|
(5.8
|
)
|
|
463.7
|
|
||||
$750 Million 5.875% 2027 Senior Notes
|
|
6.49%
|
|
750.0
|
|
|
(6.5
|
)
|
|
(28.0
|
)
|
|
715.5
|
|
||||
$800 Million 6.25% 2040 Senior Notes
|
|
6.34%
|
|
298.4
|
|
|
(2.2
|
)
|
|
(3.3
|
)
|
|
292.9
|
|
||||
ABL Facility
|
|
N/A
|
|
450.0
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
2,109.1
|
|
(In Millions)
|
||||||||||||||||||
December 31, 2018
|
||||||||||||||||||
Debt Instrument
|
|
Annual Effective
Interest Rate
|
|
Total Principal Amount
|
|
Debt Issuance Costs
|
|
Unamortized Discounts
|
|
Total Debt
|
||||||||
Secured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
$400 Million 4.875% 2024 Senior Notes
|
|
5.00%
|
|
$
|
400.0
|
|
|
$
|
(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)
|
||||||||||||||
|
|
Three Months Ended
September 30, 2018
|
|
Nine Months Ended
September 30, 2018
|
||||||||||||
Debt Instrument
|
|
Debt Extinguished
|
|
Gain on Extinguishment
|
|
Debt Extinguished
|
|
Gain on Extinguishment
|
||||||||
$400 Million 5.90% 2020 Senior Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
$500 Million 4.80% 2020 Senior Notes
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
$700 Million 4.875% 2021 Senior Notes
|
|
1.0
|
|
|
—
|
|
|
14.2
|
|
|
0.1
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
0.1
|
|
||||
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
16.5
|
|
|
$
|
0.2
|
|
|
|
(In Millions)
|
||
|
|
Maturities of Debt
|
||
2019
|
|
$
|
—
|
|
2020
|
|
—
|
|
|
2021
|
|
—
|
|
|
2022
|
|
—
|
|
|
2023
|
|
—
|
|
|
2024
|
|
400.0
|
|
|
2025 and thereafter
|
|
1,838.0
|
|
|
Total maturities of debt
|
|
$
|
2,238.0
|
|
|
(In Millions)
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Available borrowing base on ABL Facility1
|
$
|
400.8
|
|
|
$
|
323.7
|
|
Letter of credit obligations2
|
(34.1
|
)
|
|
(55.0
|
)
|
||
Borrowing capacity available3
|
$
|
366.7
|
|
|
$
|
268.7
|
|
|
|
|
|
||||
1 The ABL Facility has a maximum borrowing base of $450 million. The available borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.
|
|||||||
2 We issued standby letters of credit with certain financial institutions in order to support business obligations including, but not limited to, workers compensation and environmental obligations.
|
|||||||
3 As of September 30, 2019 and December 31, 2018, we had no loans drawn under the ABL Facility.
|
|
(In Millions)
|
||||||||||||||
|
September 30, 2019
|
||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
272.5
|
|
|
$
|
—
|
|
|
$
|
272.5
|
|
Derivative assets
|
—
|
|
|
—
|
|
|
72.8
|
|
|
72.8
|
|
||||
Total
|
$
|
—
|
|
|
$
|
272.5
|
|
|
$
|
72.8
|
|
|
$
|
345.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
30.2
|
|
|
$
|
32.6
|
|
Total
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
30.2
|
|
|
$
|
32.6
|
|
|
(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)
|
||||||||||||||
|
Level 3 Liabilities
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Beginning balance
|
$
|
—
|
|
|
$
|
(3.0
|
)
|
|
$
|
—
|
|
|
$
|
(1.7
|
)
|
Total losses included in earnings
|
(34.4
|
)
|
|
(3.1
|
)
|
|
(39.7
|
)
|
|
(7.4
|
)
|
||||
Settlements
|
4.2
|
|
|
0.4
|
|
|
9.5
|
|
|
3.4
|
|
||||
Ending balance - September 30
|
$
|
(30.2
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
(5.7
|
)
|
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date
|
$
|
(30.2
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
(5.7
|
)
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
4.6
|
|
|
$
|
4.7
|
|
|
$
|
12.9
|
|
|
$
|
14.0
|
|
Interest cost
|
8.9
|
|
|
7.6
|
|
|
26.2
|
|
|
22.7
|
|
||||
Expected return on plan assets
|
(13.7
|
)
|
|
(15.0
|
)
|
|
(41.0
|
)
|
|
(45.0
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service costs
|
0.3
|
|
|
0.6
|
|
|
0.9
|
|
|
1.7
|
|
||||
Net actuarial loss
|
5.9
|
|
|
5.3
|
|
|
17.7
|
|
|
15.9
|
|
||||
Net periodic benefit cost
|
$
|
6.0
|
|
|
$
|
3.2
|
|
|
$
|
16.7
|
|
|
$
|
9.3
|
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
$
|
1.3
|
|
|
$
|
1.6
|
|
Interest cost
|
2.3
|
|
|
2.1
|
|
|
7.0
|
|
|
6.2
|
|
||||
Expected return on plan assets
|
(4.2
|
)
|
|
(4.6
|
)
|
|
(12.6
|
)
|
|
(13.8
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service credits
|
(0.5
|
)
|
|
(0.7
|
)
|
|
(1.5
|
)
|
|
(2.2
|
)
|
||||
Net actuarial loss
|
1.3
|
|
|
1.3
|
|
|
3.8
|
|
|
3.8
|
|
||||
Net periodic benefit credit
|
$
|
(0.6
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(4.4
|
)
|
Grant Date
|
|
Grant Date Market Price
|
|
Average Expected Term (Years)
|
|
Expected Volatility
|
|
Risk-Free Interest Rate
|
|
Dividend Yield
|
|
Fair Value
|
|
Fair Value (Percent of Grant Date Market Price)
|
||||
February 19, 2019
|
|
$
|
11.24
|
|
|
2.87
|
|
67.5%
|
|
2.55%
|
|
—%
|
|
$
|
18.31
|
|
|
162.90%
|
|
(In Millions)
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
Environmental
|
$
|
2.1
|
|
|
$
|
2.5
|
|
Mine closure1
|
179.5
|
|
|
172.4
|
|
||
Total environmental and mine closure obligations
|
181.6
|
|
|
174.9
|
|
||
Less current portion
|
2.5
|
|
|
2.9
|
|
||
Long-term environmental and mine closure obligations
|
$
|
179.1
|
|
|
$
|
172.0
|
|
|
|
|
|
||||
1 Includes our active operating mines, our indefinitely idled Empire mine and a closed mine formerly operating as LTV Steel Mining Company.
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
|
September 30, 2019
|
|
December 31, 2018
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||
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
|
|
|
Derivative liabilities
|
|
$
|
2.4
|
|
|
Derivative liabilities
|
|
$
|
3.7
|
|
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer supply agreement
|
|
Derivative assets
|
|
$
|
71.2
|
|
|
Derivative assets
|
|
$
|
89.3
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Provisional pricing arrangements
|
|
Derivative assets
|
|
1.6
|
|
|
Derivative assets
|
|
2.1
|
|
|
Derivative liabilities
|
|
30.2
|
|
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815
|
|
|
|
$
|
72.8
|
|
|
|
|
$
|
91.4
|
|
|
|
|
$
|
30.2
|
|
|
|
|
$
|
—
|
|
Total derivatives
|
|
|
|
$
|
72.8
|
|
|
|
|
$
|
91.5
|
|
|
|
|
$
|
32.6
|
|
|
|
|
$
|
3.7
|
|
|
(In Millions)
|
||||||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||||||
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
Natural gas
|
7.0
|
|
MMBtu
|
|
October 2019 - November 2020
|
|
1.8
|
|
MMBtu
|
|
January 2019 - August 2019
|
Diesel
|
2.4
|
|
Gallons
|
|
October 2019 - December 2019
|
|
11.0
|
|
Gallons
|
|
January 2019 - December 2019
|
|
|
(In Millions)
|
||||||
|
|
Nine Months Ended
September 30, |
||||||
|
|
2019
|
|
2018
|
||||
Net cash used by operating activities
|
|
|
|
|
||||
Asia Pacific Iron Ore
|
|
$
|
(1.9
|
)
|
|
$
|
(77.0
|
)
|
Canadian Operations
|
|
—
|
|
|
(14.6
|
)
|
||
|
|
$
|
(1.9
|
)
|
|
$
|
(91.6
|
)
|
|
|
|
|
|
||||
Net cash provided by investing activities
|
|
|
|
|
||||
Asia Pacific Iron Ore
|
|
$
|
0.1
|
|
|
$
|
17.8
|
|
|
|
$
|
0.1
|
|
|
$
|
17.8
|
|
|
|
(In Millions)
|
||||||||||||||
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
Income (Loss) from Discontinued Operations
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues from product sales and services
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129.1
|
|
Cost of goods sold
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(230.7
|
)
|
||||
Sales margin
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(101.6
|
)
|
||||
Other operating expense
|
|
—
|
|
|
14.8
|
|
|
(0.8
|
)
|
|
(4.0
|
)
|
||||
Other expense
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
(2.3
|
)
|
||||
Gain on foreign currency translation
|
|
—
|
|
|
228.1
|
|
|
—
|
|
|
228.1
|
|
||||
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
|
$
|
(0.1
|
)
|
|
$
|
242.3
|
|
|
$
|
(1.1
|
)
|
|
$
|
117.6
|
|
|
(In Millions)
|
||||||||||
|
Postretirement Benefit Liability, net of tax
|
|
Derivative Financial Instruments, net of tax
|
|
Accumulated Other Comprehensive Loss
|
||||||
December 31, 2018
|
$
|
(281.1
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
(283.9
|
)
|
Other comprehensive income before reclassifications
|
0.2
|
|
|
2.5
|
|
|
2.7
|
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
5.5
|
|
|
0.2
|
|
|
5.7
|
|
|||
March 31, 2019
|
$
|
(275.4
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(275.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.3
|
|
|
(2.3
|
)
|
|
(2.0
|
)
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
5.5
|
|
|
0.2
|
|
|
5.7
|
|
|||
June 30, 2019
|
$
|
(269.6
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(271.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.3
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|||
Net loss reclassified from accumulated other comprehensive loss
|
5.5
|
|
|
0.9
|
|
|
6.4
|
|
|||
September 30, 2019
|
$
|
(263.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(265.6
|
)
|
|
(In Millions)
|
||||||||||||||
|
Postretirement Benefit Liability, net of tax
|
|
Foreign Currency Translation
|
|
Derivative Financial Instruments, net of tax
|
|
Accumulated Other Comprehensive Loss
|
||||||||
December 31, 2017
|
$
|
(263.9
|
)
|
|
$
|
225.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
(39.0
|
)
|
Other comprehensive income before reclassifications
|
0.5
|
|
|
0.7
|
|
|
0.4
|
|
|
1.6
|
|
||||
Net loss (gain) reclassified from accumulated other comprehensive loss
|
6.2
|
|
|
—
|
|
|
(0.1
|
)
|
|
6.1
|
|
||||
March 31, 2018
|
$
|
(257.2
|
)
|
|
$
|
226.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
(31.3
|
)
|
Other comprehensive income before reclassifications
|
0.2
|
|
|
2.2
|
|
|
0.2
|
|
|
2.6
|
|
||||
Net loss reclassified from accumulated other comprehensive loss
|
6.5
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
||||
June 30, 2018
|
$
|
(250.5
|
)
|
|
$
|
228.3
|
|
|
$
|
—
|
|
|
$
|
(22.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
0.3
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
0.3
|
|
||||
Net loss (gain) reclassified from accumulated other comprehensive loss
|
6.5
|
|
|
(228.1
|
)
|
|
0.1
|
|
|
(221.5
|
)
|
||||
September 30, 2018
|
$
|
(243.7
|
)
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
(243.4
|
)
|
|
(In Millions)
|
||||||
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Capital additions1
|
$
|
505.6
|
|
|
$
|
242.0
|
|
Less:
|
|
|
|
||||
Non-cash accruals
|
26.1
|
|
|
42.2
|
|
||
Right-of-use assets – finance leases
|
29.3
|
|
|
7.6
|
|
||
Grants
|
(10.5
|
)
|
|
(2.5
|
)
|
||
Cash paid for capital expenditures including deposits
|
$
|
460.7
|
|
|
$
|
194.7
|
|
|
|
|
|
||||
1 Includes capital additions related to discontinued operations of $0.1 million, for the nine months ended September 30, 2018.
|
Mine
|
|
Cleveland-Cliffs Inc.
|
|
ArcelorMittal
|
|
U.S. Steel
|
Hibbing
|
|
23.0%
|
|
62.3%
|
|
14.7%
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income from continuing operations
|
$
|
91.8
|
|
|
$
|
199.8
|
|
|
$
|
231.1
|
|
|
$
|
415.8
|
|
Income (loss) from discontinued operations, net of tax
|
(0.9
|
)
|
|
238.0
|
|
|
(1.5
|
)
|
|
102.8
|
|
||||
Net income
|
$
|
90.9
|
|
|
$
|
437.8
|
|
|
$
|
229.6
|
|
|
$
|
518.6
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
270.0
|
|
|
297.9
|
|
|
278.4
|
|
|
297.6
|
|
||||
Convertible senior notes
|
3.7
|
|
|
8.0
|
|
|
5.8
|
|
|
1.9
|
|
||||
Employee stock plans
|
2.9
|
|
|
4.3
|
|
|
3.6
|
|
|
4.0
|
|
||||
Diluted
|
276.6
|
|
|
310.2
|
|
|
287.8
|
|
|
303.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per common share - basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.34
|
|
|
$
|
0.67
|
|
|
$
|
0.83
|
|
|
$
|
1.40
|
|
Discontinued operations
|
—
|
|
|
0.80
|
|
|
(0.01
|
)
|
|
0.35
|
|
||||
|
$
|
0.34
|
|
|
$
|
1.47
|
|
|
$
|
0.82
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per common share - diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.33
|
|
|
$
|
0.64
|
|
|
$
|
0.80
|
|
|
$
|
1.37
|
|
Discontinued operations
|
—
|
|
|
0.77
|
|
|
—
|
|
|
0.34
|
|
||||
|
$
|
0.33
|
|
|
$
|
1.41
|
|
|
$
|
0.80
|
|
|
$
|
1.71
|
|
Unaudited Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of September 30, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
396.2
|
|
|
$
|
0.4
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
399.3
|
|
Accounts receivable, net
|
7.4
|
|
|
161.4
|
|
|
0.2
|
|
|
(4.1
|
)
|
|
164.9
|
|
|||||
Finished goods inventories
|
—
|
|
|
162.2
|
|
|
—
|
|
|
—
|
|
|
162.2
|
|
|||||
Work-in-process inventories
|
—
|
|
|
55.2
|
|
|
—
|
|
|
—
|
|
|
55.2
|
|
|||||
Supplies and other inventories
|
—
|
|
|
110.8
|
|
|
—
|
|
|
—
|
|
|
110.8
|
|
|||||
Derivative assets
|
—
|
|
|
72.8
|
|
|
—
|
|
|
—
|
|
|
72.8
|
|
|||||
Income tax receivable, current
|
58.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58.7
|
|
|||||
Other current assets
|
9.3
|
|
|
22.9
|
|
|
8.5
|
|
|
—
|
|
|
40.7
|
|
|||||
TOTAL CURRENT ASSETS
|
471.6
|
|
|
585.7
|
|
|
11.4
|
|
|
(4.1
|
)
|
|
1,064.6
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
12.3
|
|
|
1,706.8
|
|
|
50.8
|
|
|
—
|
|
|
1,769.9
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits for property, plant and equipment
|
—
|
|
|
27.1
|
|
|
14.5
|
|
|
—
|
|
|
41.6
|
|
|||||
Income tax receivable, non-current
|
58.6
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
62.7
|
|
|||||
Deferred income taxes
|
436.3
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
437.5
|
|
|||||
Investment in subsidiaries
|
1,780.5
|
|
|
39.7
|
|
|
—
|
|
|
(1,820.2
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
121.3
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current assets
|
15.6
|
|
|
98.0
|
|
|
1.3
|
|
|
—
|
|
|
114.9
|
|
|||||
TOTAL OTHER ASSETS
|
2,291.0
|
|
|
168.9
|
|
|
138.3
|
|
|
(1,941.5
|
)
|
|
656.7
|
|
|||||
TOTAL ASSETS
|
$
|
2,774.9
|
|
|
$
|
2,461.4
|
|
|
$
|
200.5
|
|
|
$
|
(1,945.6
|
)
|
|
$
|
3,491.2
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
4.7
|
|
|
$
|
207.8
|
|
|
$
|
4.4
|
|
|
$
|
(4.1
|
)
|
|
$
|
212.8
|
|
Accrued employment costs
|
17.1
|
|
|
40.1
|
|
|
0.1
|
|
|
—
|
|
|
57.3
|
|
|||||
Accrued interest
|
34.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.1
|
|
|||||
Derivative liabilities
|
2.4
|
|
|
30.2
|
|
|
—
|
|
|
—
|
|
|
32.6
|
|
|||||
Partnership distribution payable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liabilities
|
38.5
|
|
|
75.9
|
|
|
7.3
|
|
|
—
|
|
|
121.7
|
|
|||||
TOTAL CURRENT LIABILITIES
|
96.8
|
|
|
354.0
|
|
|
11.8
|
|
|
(4.1
|
)
|
|
458.5
|
|
|||||
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES
|
63.3
|
|
|
414.2
|
|
|
(244.3
|
)
|
|
—
|
|
|
233.2
|
|
|||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
|
—
|
|
|
159.7
|
|
|
19.4
|
|
|
—
|
|
|
179.1
|
|
|||||
LONG-TERM DEBT
|
2,109.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,109.1
|
|
|||||
LONG-TERM INTERCOMPANY NOTES
|
121.3
|
|
|
—
|
|
|
—
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
24.5
|
|
|
120.8
|
|
|
6.1
|
|
|
—
|
|
|
151.4
|
|
|||||
TOTAL LIABILITIES
|
2,415.0
|
|
|
1,048.7
|
|
|
(207.0
|
)
|
|
(125.4
|
)
|
|
3,131.3
|
|
|||||
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL EQUITY
|
359.9
|
|
|
1,412.7
|
|
|
407.5
|
|
|
(1,820.2
|
)
|
|
359.9
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
2,774.9
|
|
|
$
|
2,461.4
|
|
|
$
|
200.5
|
|
|
$
|
(1,945.6
|
)
|
|
$
|
3,491.2
|
|
Unaudited 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
|
|
|||||
Finished goods inventories
|
—
|
|
|
77.8
|
|
|
—
|
|
|
—
|
|
|
77.8
|
|
|||||
Work-in-process inventories
|
—
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|||||
Supplies and other inventories
|
—
|
|
|
93.2
|
|
|
—
|
|
|
—
|
|
|
93.2
|
|
|||||
Derivative assets
|
0.1
|
|
|
91.4
|
|
|
—
|
|
|
—
|
|
|
91.5
|
|
|||||
Income tax receivable, current
|
117.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117.3
|
|
|||||
Other current assets
|
10.0
|
|
|
16.9
|
|
|
12.9
|
|
|
—
|
|
|
39.8
|
|
|||||
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
|
|
|||||
Accrued interest
|
38.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38.4
|
|
|||||
Derivative liabilities
|
3.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||
Partnership distribution payable
|
—
|
|
|
43.5
|
|
|
—
|
|
|
—
|
|
|
43.5
|
|
|||||
Other current liabilities
|
26.9
|
|
|
86.7
|
|
|
8.2
|
|
|
—
|
|
|
121.8
|
|
|||||
TOTAL CURRENT LIABILITIES
|
102.8
|
|
|
357.0
|
|
|
12.5
|
|
|
(4.1
|
)
|
|
468.2
|
|
|||||
PENSION AND 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
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
15.3
|
|
|
99.5
|
|
|
8.8
|
|
|
—
|
|
|
123.6
|
|
|||||
TOTAL LIABILITIES
|
2,396.6
|
|
|
1,023.0
|
|
|
(188.8
|
)
|
|
(125.4
|
)
|
|
3,105.4
|
|
|||||
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
|
|
Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income
|
|||||||||||||||||||
For the Three Months Ended September 30, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
515.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
515.0
|
|
Freight
|
—
|
|
|
40.6
|
|
|
—
|
|
|
—
|
|
|
40.6
|
|
|||||
|
—
|
|
|
555.6
|
|
|
—
|
|
|
—
|
|
|
555.6
|
|
|||||
COST OF GOODS SOLD
|
—
|
|
|
(400.7
|
)
|
|
—
|
|
|
—
|
|
|
(400.7
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
154.9
|
|
|
—
|
|
|
—
|
|
|
154.9
|
|
|||||
OTHER OPERATING EXPENSE
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(20.7
|
)
|
|
(4.7
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(25.5
|
)
|
|||||
Miscellaneous – net
|
—
|
|
|
(7.7
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(7.8
|
)
|
|||||
|
(20.7
|
)
|
|
(12.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(33.3
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(20.7
|
)
|
|
142.5
|
|
|
(0.2
|
)
|
|
—
|
|
|
121.6
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(24.9
|
)
|
|
(0.6
|
)
|
|
0.2
|
|
|
—
|
|
|
(25.3
|
)
|
|||||
Other non-operating income (expense)
|
(0.9
|
)
|
|
(3.4
|
)
|
|
4.6
|
|
|
—
|
|
|
0.3
|
|
|||||
|
(25.8
|
)
|
|
(4.0
|
)
|
|
4.8
|
|
|
—
|
|
|
(25.0
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(46.5
|
)
|
|
138.5
|
|
|
4.6
|
|
|
—
|
|
|
96.6
|
|
|||||
INCOME TAX EXPENSE
|
(4.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|||||
EQUITY IN INCOME OF SUBSIDIARIES
|
142.2
|
|
|
4.6
|
|
|
—
|
|
|
(146.8
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
90.9
|
|
|
143.1
|
|
|
4.6
|
|
|
(146.8
|
)
|
|
91.8
|
|
|||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
—
|
|
|
(0.3
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||||
NET INCOME
|
$
|
90.9
|
|
|
$
|
142.8
|
|
|
$
|
4.0
|
|
|
$
|
(146.8
|
)
|
|
$
|
90.9
|
|
OTHER COMPREHENSIVE INCOME
|
6.2
|
|
|
6.8
|
|
|
—
|
|
|
(6.8
|
)
|
|
6.2
|
|
|||||
TOTAL COMPREHENSIVE INCOME
|
$
|
97.1
|
|
|
$
|
149.6
|
|
|
$
|
4.0
|
|
|
$
|
(153.6
|
)
|
|
$
|
97.1
|
|
Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income
|
|||||||||||||||||||
For the Nine Months Ended September 30, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
1,357.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,357.8
|
|
Freight
|
—
|
|
|
98.0
|
|
|
—
|
|
|
—
|
|
|
98.0
|
|
|||||
|
—
|
|
|
1,455.8
|
|
|
—
|
|
|
—
|
|
|
1,455.8
|
|
|||||
COST OF GOODS SOLD
|
—
|
|
|
(1,007.0
|
)
|
|
—
|
|
|
—
|
|
|
(1,007.0
|
)
|
|||||
SALES MARGIN
|
—
|
|
|
448.8
|
|
|
—
|
|
|
—
|
|
|
448.8
|
|
|||||
OTHER OPERATING EXPENSE
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(67.1
|
)
|
|
(14.7
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(82.2
|
)
|
|||||
Miscellaneous – net
|
—
|
|
|
(17.9
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(19.0
|
)
|
|||||
|
(67.1
|
)
|
|
(32.6
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
(101.2
|
)
|
|||||
OPERATING INCOME (LOSS)
|
(67.1
|
)
|
|
416.2
|
|
|
(1.5
|
)
|
|
—
|
|
|
347.6
|
|
|||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(75.0
|
)
|
|
(1.9
|
)
|
|
0.4
|
|
|
—
|
|
|
(76.5
|
)
|
|||||
Loss on extinguishment of debt
|
(18.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|||||
Other non-operating income (expense)
|
(3.0
|
)
|
|
(9.8
|
)
|
|
14.1
|
|
|
—
|
|
|
1.3
|
|
|||||
|
(96.2
|
)
|
|
(11.7
|
)
|
|
14.5
|
|
|
—
|
|
|
(93.4
|
)
|
|||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(163.3
|
)
|
|
404.5
|
|
|
13.0
|
|
|
—
|
|
|
254.2
|
|
|||||
INCOME TAX EXPENSE
|
(22.7
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(23.1
|
)
|
|||||
EQUITY IN INCOME OF SUBSIDIARIES
|
415.5
|
|
|
13.3
|
|
|
—
|
|
|
(428.8
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
229.5
|
|
|
417.5
|
|
|
12.9
|
|
|
(428.8
|
)
|
|
231.1
|
|
|||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
|
0.1
|
|
|
(0.3
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||||
NET INCOME
|
$
|
229.6
|
|
|
$
|
417.2
|
|
|
$
|
11.6
|
|
|
$
|
(428.8
|
)
|
|
$
|
229.6
|
|
OTHER COMPREHENSIVE INCOME
|
18.3
|
|
|
20.1
|
|
|
—
|
|
|
(20.1
|
)
|
|
18.3
|
|
|||||
TOTAL COMPREHENSIVE INCOME
|
$
|
247.9
|
|
|
$
|
437.3
|
|
|
$
|
11.6
|
|
|
$
|
(448.9
|
)
|
|
$
|
247.9
|
|
Unaudited Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Nine Months Ended September 30, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(11.0
|
)
|
|
$
|
402.8
|
|
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
388.1
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.2
|
)
|
|
(446.7
|
)
|
|
—
|
|
|
—
|
|
|
(447.9
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(12.3
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(12.8
|
)
|
|||||
Intercompany investing
|
(83.6
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
84.8
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
10.4
|
|
|
0.8
|
|
|
—
|
|
|
11.2
|
|
|||||
Net cash provided (used) by investing activities
|
(84.8
|
)
|
|
(449.8
|
)
|
|
0.3
|
|
|
84.8
|
|
|
(449.5
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase of common shares
|
(252.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(252.9
|
)
|
|||||
Dividends paid
|
(45.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45.1
|
)
|
|||||
Proceeds from issuance of debt
|
720.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
720.9
|
|
|||||
Debt issuance costs
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
|||||
Repurchase of debt
|
(729.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(729.3
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
|
(44.2
|
)
|
|||||
Intercompany financing
|
—
|
|
|
83.1
|
|
|
1.7
|
|
|
(84.8
|
)
|
|
—
|
|
|||||
Other financing activities
|
(14.6
|
)
|
|
7.8
|
|
|
(2.7
|
)
|
|
—
|
|
|
(9.5
|
)
|
|||||
Net cash provided (used) by financing activities
|
(327.8
|
)
|
|
46.7
|
|
|
(1.0
|
)
|
|
(84.8
|
)
|
|
(366.9
|
)
|
|||||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN OTHER CURRENT ASSETS RELATED TO DISCONTINUED OPERATIONS
|
(423.6
|
)
|
|
(0.3
|
)
|
|
(4.4
|
)
|
|
—
|
|
|
(428.3
|
)
|
|||||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS, CLASSIFIED WITHIN OTHER CURRENT ASSETS
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(423.6
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(423.9
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
819.8
|
|
|
0.7
|
|
|
2.7
|
|
|
—
|
|
|
823.2
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
396.2
|
|
|
$
|
0.4
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
399.3
|
|
Unaudited Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Nine Months Ended September 30, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(100.6
|
)
|
|
$
|
425.6
|
|
|
$
|
(136.3
|
)
|
|
$
|
—
|
|
|
$
|
188.7
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.1
|
)
|
|
(110.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(111.4
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(78.1
|
)
|
|
(5.2
|
)
|
|
—
|
|
|
(83.3
|
)
|
|||||
Intercompany investing
|
185.7
|
|
|
(6.3
|
)
|
|
120.7
|
|
|
(300.1
|
)
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
3.1
|
|
|
17.9
|
|
|
—
|
|
|
21.0
|
|
|||||
Net cash provided (used) by investing activities
|
184.6
|
|
|
(191.5
|
)
|
|
133.3
|
|
|
(300.1
|
)
|
|
(173.7
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|||||
Repurchase of debt
|
(16.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.3
|
)
|
|||||
Distributions of partnership equity
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
|
(44.2
|
)
|
|||||
Intercompany financing
|
(120.7
|
)
|
|
(188.6
|
)
|
|
9.2
|
|
|
300.1
|
|
|
—
|
|
|||||
Other financing activities
|
(1.9
|
)
|
|
(1.5
|
)
|
|
(42.3
|
)
|
|
—
|
|
|
(45.7
|
)
|
|||||
Net cash used by financing activities
|
(140.4
|
)
|
|
(234.3
|
)
|
|
(33.1
|
)
|
|
300.1
|
|
|
(107.7
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||||
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN OTHER CURRENT ASSETS RELATED TO DISCONTINUED OPERATIONS
|
(56.4
|
)
|
|
(0.2
|
)
|
|
(38.4
|
)
|
|
—
|
|
|
(95.0
|
)
|
|||||
LESS: DECREASE IN CASH AND CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS, CLASSIFIED WITHIN OTHER CURRENT ASSETS
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(56.4
|
)
|
|
(0.2
|
)
|
|
(24.6
|
)
|
|
—
|
|
|
(81.2
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
948.9
|
|
|
2.1
|
|
|
27.3
|
|
|
—
|
|
|
978.3
|
|
|||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
892.5
|
|
|
$
|
1.9
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
897.1
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
(In Millions)
|
||||||||||||||||||||||
|
|
|
|
Changes due to:
|
|
|
||||||||||||||||||
|
|
Three Months Ended
September 30, |
|
Revenue
and cost rate
|
|
Sales volume
|
|
Freight
|
|
Total change
|
||||||||||||||
|
|
2019
|
|
2018
|
|
|
|
|
||||||||||||||||
Revenues from product sales and services
|
|
$
|
590.6
|
|
|
$
|
741.8
|
|
|
$
|
(63.2
|
)
|
|
$
|
(71.4
|
)
|
|
$
|
(16.6
|
)
|
|
$
|
(151.2
|
)
|
Cost of goods sold
|
|
(424.8
|
)
|
|
(480.2
|
)
|
|
(7.7
|
)
|
|
46.5
|
|
|
16.6
|
|
|
55.4
|
|
||||||
Sales margin
|
|
$
|
165.8
|
|
|
$
|
261.6
|
|
|
$
|
(70.9
|
)
|
|
$
|
(24.9
|
)
|
|
$
|
—
|
|
|
$
|
(95.8
|
)
|
|
|
Three Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2019
|
|
2018
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate1
|
|
$
|
95.65
|
|
|
$
|
105.65
|
|
|
$
|
(10.00
|
)
|
|
(9.5
|
)%
|
Cash cost of goods sold rate1,2
|
|
63.20
|
|
|
62.54
|
|
|
0.66
|
|
|
1.1
|
%
|
|||
Depreciation, depletion & amortization
|
|
3.62
|
|
|
2.75
|
|
|
0.87
|
|
|
31.6
|
%
|
|||
Total cost of goods sold
|
|
66.82
|
|
|
65.29
|
|
|
1.53
|
|
|
2.3
|
%
|
|||
Sales margin
|
|
$
|
28.83
|
|
|
$
|
40.36
|
|
|
$
|
(11.53
|
)
|
|
(28.6
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons3 (In thousands)
|
|
5,750
|
|
|
6,481
|
|
|
|
|
|
|||||
Production tons3 (In thousands)
|
|
5,159
|
|
|
4,719
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1 Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin.
|
|||||||||||||||
2 Cash cost of goods sold 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. Includes Cliffs' 23% share of the Hibbing mine production. Includes intercompany sales to our Metallics segment of 346 thousand long tons, for the three months ended September 30, 2019.
|
•
|
Lower sales volume of 0.7 million long tons, which resulted in decreased revenue of $71 million, due to decreased customer demand;
|
•
|
A decrease in the average year-to-date realized product revenue rate of $10.00 per long ton, or 9.5%, during the three months ended September 30, 2019, compared to the prior-year period, which resulted in a decrease of $63.2 million, predominantly due to:
|
◦
|
A decrease in the hot-rolled coil steel price, which negatively affected the realized revenue rate by $20 per long ton, or $117 million, during the third quarter of 2019; and
|
◦
|
Lower full-year estimated pellet premiums, which negatively affected the realized revenue rate by $5 per long ton, or $27 million.
|
◦
|
These decreases were offset partially by an increase in the full-year estimated Platts 62% Price as of September 30, 2019, compared to the prior-year period's full-year estimated Platts 62% Price, which positively affected the realized revenue rate by $17 per long ton, or $96 million.
|
•
|
A decrease in sales volume of 0.7 million long tons, which resulted in decreased costs of $47 million.
|
•
|
This decrease was offset partially by an increase in the cost of goods sold rate of $1.53 per long ton, or 2.3%, during the three months ended September 30, 2019, compared to the prior-year period, which resulted in an increase of $7.7 million, predominantly due to an unfavorable change in the full-year standard cost driven by:
|
◦
|
Lower ore recovery, which increased costs by $5 million, or $1 per long ton, increased commodity supply usage of $5 million, or $1 per long ton, increased maintenance costs of $4 million, or $1 per long ton, and increased depreciation of $3 million, or $1 per long ton; and
|
◦
|
An unfavorable impact of $8 million, or $1 per long ton, to the full-year standard cost as a result of an expected LIFO layer liquidation in the prior year which was not recurring.
|
◦
|
These increases were offset partially by decreased royalties and labor costs of $7 million, or $1 per long ton.
|
|
|
Nine Months Ended
September 30, |
|
|
|
|
|||||||||
Per Ton Information
|
|
2019
|
|
2018
|
|
Difference
|
|
Percent change
|
|||||||
Realized product revenue rate1
|
|
$
|
103.26
|
|
|
$
|
108.53
|
|
|
$
|
(5.27
|
)
|
|
(4.9
|
)%
|
Cash cost of goods sold rate1,2
|
|
64.80
|
|
|
61.81
|
|
|
2.99
|
|
|
4.8
|
%
|
|||
Depreciation, depletion & amortization
|
|
4.35
|
|
|
3.50
|
|
|
0.85
|
|
|
24.3
|
%
|
|||
Total cost of goods sold
|
|
69.15
|
|
|
65.31
|
|
|
3.84
|
|
|
5.9
|
%
|
|||
Sales margin
|
|
$
|
34.11
|
|
|
$
|
43.22
|
|
|
$
|
(9.11
|
)
|
|
(21.1
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Sales tons3 (In thousands)
|
|
13,527
|
|
|
14,060
|
|
|
|
|
|
|||||
Production tons3 (In thousands)
|
|
14,737
|
|
|
14,731
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
1 Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin.
|
|||||||||||||||
2 Cash cost of goods sold 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. Includes Cliffs' 23% share of the Hibbing mine production. Includes intercompany sales to our Metallics segment of 384 thousand long tons, for the nine months ended September 30, 2019.
|
•
|
A decrease in the average year-to-date realized product revenue rate of $5.27 per long ton, or 4.9%, during the nine months ended September 30, 2019, compared to the prior-year period, which resulted in a decrease of $78 million, predominantly due to:
|
◦
|
A decrease in the hot-rolled coil steel price, which negatively affected the realized revenue rate by $20 per long ton, or $267 million, during the nine months ended September 30, 2019.
|
◦
|
This decrease was offset partially by higher full-year estimated Platts 62% Price as of September 30, 2019, compared to the prior-year period, which positively affected the realized revenue rate by $15 per long ton, or $204 million.
|
•
|
Lower sales volume of 0.5 million long tons, which resulted in decreased revenue of $51 million, due to decreased customer demand.
|
•
|
An unfavorable change in the full-year standard cost driven by:
|
◦
|
Increased stripping and lower ore recovery, which together increased costs by $19 million, or $1 per long ton, increased commodity supply usage of $11 million, or $1 per long ton, increased depreciation of $10 million, or $1 per long ton, and increased maintenance of $9 million, or $1 per long ton;
|
◦
|
An unfavorable impact of $19 million, or $1 per long ton, to the full-year standard cost as a result of an expected LIFO layer liquidation in the prior year which was not recurring;
|
◦
|
Offset partially by decreased royalties and labor costs of $16 million, or $1 per long ton.
|
•
|
This increase was offset partially by a decrease in sales volume of 0.5 million long tons, which resulted in decreased costs of $33 million period-over-period.
|
|
(In Millions)
|
||||||||||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||
|
2019
|
|
2018
|
|
Variance
Favorable/ (Unfavorable) |
|
2019
|
|
2018
|
|
Variance
Favorable/
(Unfavorable)
|
||||||||||||
Selling, general and administrative expenses
|
$
|
(25.5
|
)
|
|
$
|
(29.1
|
)
|
|
$
|
3.6
|
|
|
$
|
(82.2
|
)
|
|
$
|
(78.9
|
)
|
|
$
|
(3.3
|
)
|
Miscellaneous – net:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Empire idle costs
|
(5.5
|
)
|
|
(4.5
|
)
|
|
(1.0
|
)
|
|
(14.8
|
)
|
|
(14.1
|
)
|
|
(0.7
|
)
|
||||||
Metallics startup costs
|
(2.0
|
)
|
|
(1.1
|
)
|
|
(0.9
|
)
|
|
(3.9
|
)
|
|
(2.5
|
)
|
|
(1.4
|
)
|
||||||
Other
|
(0.3
|
)
|
|
(1.4
|
)
|
|
1.1
|
|
|
(0.3
|
)
|
|
(2.1
|
)
|
|
1.8
|
|
||||||
Total Miscellaneous – net
|
(7.8
|
)
|
|
(7.0
|
)
|
|
(0.8
|
)
|
|
(19.0
|
)
|
|
(18.7
|
)
|
|
(0.3
|
)
|
||||||
|
$
|
(33.3
|
)
|
|
$
|
(36.1
|
)
|
|
$
|
2.8
|
|
|
$
|
(101.2
|
)
|
|
$
|
(97.6
|
)
|
|
$
|
(3.6
|
)
|
|
(In Millions)
|
||||||||||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||
|
2019
|
|
2018
|
|
Variance
Favorable/ (Unfavorable) |
|
2019
|
|
2018
|
|
Variance
Favorable/
(Unfavorable)
|
||||||||||||
Interest expense, net
|
$
|
(25.3
|
)
|
|
$
|
(29.5
|
)
|
|
$
|
4.2
|
|
|
$
|
(76.5
|
)
|
|
$
|
(93.1
|
)
|
|
$
|
16.6
|
|
Gain (loss) on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|
0.2
|
|
|
(18.4
|
)
|
||||||
Other non-operating income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net periodic benefit costs other than service cost component
|
(0.3
|
)
|
|
3.4
|
|
|
(3.7
|
)
|
|
(0.4
|
)
|
|
10.7
|
|
|
(11.1
|
)
|
||||||
Other
|
0.6
|
|
|
0.9
|
|
|
(0.3
|
)
|
|
1.7
|
|
|
2.4
|
|
|
(0.7
|
)
|
||||||
|
$
|
(25.0
|
)
|
|
$
|
(25.2
|
)
|
|
$
|
0.2
|
|
|
$
|
(93.4
|
)
|
|
$
|
(79.8
|
)
|
|
$
|
(13.6
|
)
|
|
(In Millions)
|
||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
90.9
|
|
|
$
|
437.8
|
|
|
$
|
229.6
|
|
|
$
|
518.6
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(25.4
|
)
|
|
(29.7
|
)
|
|
(76.8
|
)
|
|
(95.5
|
)
|
||||
Income tax expense
|
(4.8
|
)
|
|
(0.5
|
)
|
|
(23.1
|
)
|
|
(14.4
|
)
|
||||
Depreciation, depletion and amortization
|
(22.2
|
)
|
|
(19.2
|
)
|
|
(63.1
|
)
|
|
(68.6
|
)
|
||||
EBITDA
|
$
|
143.3
|
|
|
$
|
487.2
|
|
|
$
|
392.6
|
|
|
$
|
697.1
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Impact of discontinued operations
|
$
|
(0.8
|
)
|
|
$
|
238.2
|
|
|
$
|
(1.2
|
)
|
|
$
|
120.4
|
|
Gain (loss) on extinguishment of debt
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|
0.2
|
|
||||
Severance costs
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
||||
Foreign exchange remeasurement
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Impairment of other long-lived assets
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||
Adjusted EBITDA
|
$
|
144.1
|
|
|
$
|
250.3
|
|
|
$
|
413.7
|
|
|
$
|
578.3
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA:
|
|
|
|
|
|
|
|
||||||||
Mining and Pelletizing
|
$
|
177.5
|
|
|
$
|
273.1
|
|
|
$
|
494.9
|
|
|
$
|
641.6
|
|
Metallics
|
(2.1
|
)
|
|
(1.0
|
)
|
|
(4.0
|
)
|
|
(2.5
|
)
|
||||
Corporate and Other (including discontinued operations)
|
(32.1
|
)
|
|
215.1
|
|
|
(98.3
|
)
|
|
58.0
|
|
||||
Total EBITDA
|
$
|
143.3
|
|
|
$
|
487.2
|
|
|
$
|
392.6
|
|
|
$
|
697.1
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Mining and Pelletizing
|
$
|
182.7
|
|
|
$
|
279.5
|
|
|
$
|
510.7
|
|
|
$
|
657.9
|
|
Metallics
|
(2.1
|
)
|
|
(1.0
|
)
|
|
(4.0
|
)
|
|
(2.5
|
)
|
||||
Corporate
|
(36.5
|
)
|
|
(28.2
|
)
|
|
(93.0
|
)
|
|
(77.1
|
)
|
||||
Total Adjusted EBITDA
|
$
|
144.1
|
|
|
$
|
250.3
|
|
|
$
|
413.7
|
|
|
$
|
578.3
|
|
|
|
2019 Outlook Summary
|
Per Long Ton Information
|
Mining and Pelletizing
|
|
Cost of goods sold rate
|
$73 - $78
|
|
Less:
|
|
|
Freight expense rate1
|
$7
|
|
Depreciation, depletion & amortization rate
|
$4
|
|
Cash cost of goods sold rate
|
$62 - $67
|
|
|
|
|
Sales volume (million long tons)
|
19.5
|
|
Production volume (million long tons)
|
20.0
|
|
|
||
1 Freight has an offsetting amount in revenue and has no impact on sales margin.
|
•
|
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;
|
•
|
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 or production plant 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 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares
(or Units) Purchased1
|
|
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 Programs2
|
||||||
July 1 - 31, 2019
|
|
1,502
|
|
|
$
|
10.72
|
|
|
—
|
|
|
$
|
229,356
|
|
August 1 - 31, 2019
|
|
3,615
|
|
|
$
|
8.45
|
|
|
—
|
|
|
$
|
229,356
|
|
September 1 - 30, 2019
|
|
13,951
|
|
|
$
|
11.45
|
|
|
—
|
|
|
$
|
229,356
|
|
Total
|
|
19,068
|
|
|
$
|
10.83
|
|
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
1 All 19,068 shares were delivered to us 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 our 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, excluding commissions and fees. On April 25, 2019, we announced that our Board of Directors increased the common share repurchase authorization by an additional $100 million, excluding commissions and fees. 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 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit
|
|
Form of Common Share Certificate (filed herewith)
|
|
|
Certification Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves as of October 23, 2019 (filed herewith)
|
|
|
Certification Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed and dated by Keith A. Koci as of October 23, 2019 (filed herewith)
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves, Chairman, President and Chief Executive Officer of Cleveland-Cliffs Inc., as of October 23, 2019 (filed herewith)
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Keith A. Koci, Executive Vice President, Chief Financial Officer of Cleveland-Cliffs Inc., as of October 23, 2019 (filed herewith)
|
|
|
Mine Safety Disclosures (filed herewith)
|
|
101
|
|
The following financial information from Cleveland-Cliffs Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Statements of Financial Position, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.
|
104
|
|
The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.
|
|
|
|
CLEVELAND-CLIFFS INC.
|
||||
|
|
|
|
|
|||
|
|
|
By:
|
|
/s/ R. Christopher Cebula
|
||
|
|
|
|
|
Name:
|
|
R. Christopher Cebula
|
|
|
|
|
|
Title:
|
|
Vice President, Corporate Controller & Chief Accounting Officer
|
|
|
|
|
|
|
|
|
Date:
|
October 23, 2019
|
|
|
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland-Cliffs Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 23, 2019
|
|
By:
|
|
/s/ Lourenco Goncalves
|
|
|
|
|
|
Lourenco Goncalves
|
|
|
|
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cleveland-Cliffs Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 23, 2019
|
|
By:
|
|
/s/ Keith A. Koci
|
|
|
|
|
|
Keith A. Koci
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q.
|
Date:
|
|
October 23, 2019
|
|
|
|
|
|
|
|
By:
|
/s/ Lourenco Goncalves
|
|
|
|
Lourenco Goncalves
|
|
|
|
Chairman, President and Chief Executive Officer
|
(1)
|
The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q.
|
Date:
|
|
October 23, 2019
|
|
|
|
|
|
|
|
By:
|
/s/ Keith A. Koci
|
|
|
|
Keith A. Koci
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(A)
|
The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the FMSH Act (30 U.S.C. 814) for which the operator received a citation from MSHA;
|
(B)
|
The total number of orders issued under section 104(b) of the FMSH Act (30 U.S.C. 814(b));
|
(C)
|
The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the FMSH Act (30 U.S.C. 814(d));
|
(D)
|
The total number of imminent danger orders issued under section 107(a) of the FMSH Act (30 U.S.C. 817(a));
|
(E)
|
The total dollar value of proposed assessments from MSHA under the FMSH Act (30 U.S.C. 801 et seq.);
|
(F)
|
Legal actions pending before the Federal Mine Safety and Health Review Commission involving such coal or other mine as of the last day of the period;
|
(G)
|
Legal actions instituted before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period; and
|
(H)
|
Legal actions resolved before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period.
|
|
|
|
Three Months Ended September 30, 2019
|
|||||||||||||||||||||||
|
|
|
(A)
|
|
(B)
|
|
(C)
|
|
(D)
|
|
(E)
|
|
(F)
|
|
(G)
|
|
(H)
|
|||||||||
Mine Name/ MSHA ID No.
|
Operation
|
|
Section 104 S&S Citations
|
|
Section 104(b) Orders
|
|
Section 104(d) Citations & Orders
|
|
Section 107(a) Orders
|
|
Total Dollar Value of MSHA Proposed Assessments (1)
|
|
Legal Actions Pending as of Last Day of Period
|
|
Legal Actions Instituted During Period
|
|
Legal Actions Resolved During Period
|
|||||||||
Tilden / 2000422
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
1
|
|
(2)
|
1
|
|
|
3
|
|
Empire / 2001012
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Northshore Plant / 2100831
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
(3)
|
1
|
|
|
5
|
|
|
Northshore Mine / 2100209
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
(4)
|
2
|
|
|
1
|
|
|
Hibbing / 2101600 (7)
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
(5)
|
2
|
|
|
1
|
|
|
United Taconite Plant / 2103404
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
(6)
|
1
|
|
|
1
|
|
|
United Taconite Mine / 2103403
|
Iron Ore
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Amounts included under the heading “Total Dollar Value of MSHA Proposed Assessments” are the total dollar amounts for proposed assessments received from MSHA for the three months ended September 30, 2019.
|
(2)
|
This number consists of 1 pending legal action related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
(3)
|
This number consists of 3 pending legal actions related to contests of proposed penalties referenced in Subpart C, and 4 pending legal actions related to appeals of judges' decisions or orders to FMSHRC referenced in Subpart H of FMSH Act's procedural rules.
|
(4)
|
This number consists of 4 pending legal actions related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules.
|
(5)
|
This number consists of 4 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
(6)
|
This number consists of 1 pending legal action related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
|
(7)
|
On August 12, 2019, Cliffs Mining Company, our subsidiary, ceased performing manager duties at Hibbing (including operating the mine) and transitioned those duties to ArcelorMittal. As a result, data for Hibbing / 2101600 is for the period July 1, 2019 through August 11, 2019.
|