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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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,
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Cleveland,
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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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Trading Symbol(s)
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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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CLF
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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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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Information About Our Executive Officers
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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 of debt, impacts of discontinued operations, foreign currency exchange remeasurement, severance, impairment of other long-lived assets, acquisition costs and intersegment corporate allocations of selling, general and administrative costs
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AK Steel
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AK Steel Holding Corporation and its consolidated subsidiaries (including AK Steel Corporation and its facilities in Ashland, Kentucky, Middletown, Ohio, and Dearborn, Michigan)
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AK Steel 7.50% 2023 Notes
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AK Steel Corporation’s existing 7.50% secured notes due 2023
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AK Steel 7.625% 2021 Notes
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AK Steel Corporation’s existing 7.625% unsecured notes due 2021
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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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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 Update
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Atlantic Basin pellet premium
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Platts Atlantic Basin Blast Furnace 65% Fe pellet premium
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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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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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Compensation Committee
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Compensation and Organization Committee of the Board of Directors
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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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DRI
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Direct Reduced Iron
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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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FeT
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Total Iron
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FIP
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Federal Implementation Plan
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FMSH Act
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U.S. Federal Mine Safety and Health Act 1977, as amended
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GAAP
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Accounting principles generally accepted in the 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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Abbreviation or acronym
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Term
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Hot-rolled coil steel price
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Average annual daily market price for hot-rolled coil steel
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IRC
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Internal Revenue Code
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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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Merger
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The merger of Merger Sub with and into AK Steel, with AK Steel surviving the merger as a wholly owned subsidiary of Cliffs, subject to the conditions set forth in the Merger Agreement
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Merger Agreement
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Agreement and Plan of Merger, dated as of December 2, 2019, among Cliffs, AK Steel and Merger Sub
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Merger Sub
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Pepper Merger Sub Inc., a direct, wholly owned subsidiary of Cliffs
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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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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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New ABL Facility
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New asset-based revolving credit facility expected to be entered into in connection with the Merger to replace the ABL Facility
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New Cliffs Secured/Unsecured Notes
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New series of secured notes and a new series of unsecured notes expected to be entered into in connection with the Merger to repurchase or redeem the AK Steel 7.50% 2023 Notes and, depending on market and other conditions, the AK Steel 7.625% 2021 Notes
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NO2
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Nitrogen dioxide
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NOx
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Nitrogen oxide
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Northshore
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Northshore Mining Company
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NYSE
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New York Stock Exchange
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OPEB
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Other postretirement benefits
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OPEB cap
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Medical premium maximums
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OSHA
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Occupational Safety and Health Administration
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PBO
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Projected benefit obligation
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Platts 62% price
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Platts IODEX 62% Fe Fines cost and freight North China
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PPI
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Producer Price Indices
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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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Securities Act
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Securities Act of 1933, as amended
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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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SO2
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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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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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Item 1.
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Business
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Percentage
Product Revenue |
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Customer1
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2019
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2018
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2017
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ArcelorMittal
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50%
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57%
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48%
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AK Steel
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29%
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25%
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29%
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Algoma
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18%
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13%
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11%
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1 Includes subsidiaries.
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December 31,
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|||||||
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2019
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2018
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2017
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Mining and Pelletizing segment - Salaried1
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397
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514
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503
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Mining and Pelletizing segment - Hourly1, 2
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1,712
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2,208
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2,182
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Metallics segment - Salaried
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40
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26
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6
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Metallics segment - Hourly
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48
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—
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—
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Discontinued Operations - Salaried
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—
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2
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79
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Corporate & Support Services - Salaried
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175
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176
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168
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Total
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2,372
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2,926
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2,938
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1 The December 31, 2018 and 2017 data includes the employees of the Hibbing mine that we managed prior to transitioning those duties to ArcelorMittal USA in August 2019.
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2 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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62
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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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60
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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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Keith A. Koci
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55
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Executive Vice President, Chief Financial Officer (February 2019 – present); and Senior Vice President and Chief Financial Officer, Metals USA Holdings Corp. (2013 – February 2019).
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Terry G. Fedor
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55
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Executive Vice President, Operations (February 2019 – present); Executive Vice President, U.S. Iron Ore (January 2014 – January 2019); and Vice President, Operations (February 2011 – January 2014).
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Traci L. Forrester
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48
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Executive Vice President, Business Development (May 2019 – present); Vice President (January 2018 – May 2019); Deputy General Counsel & Assistant Secretary (January 2017 – May 2019); and Assistant General Counsel (August 2013 – January 2017).
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James D. Graham
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54
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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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58
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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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R. Christopher Cebula
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49
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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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maintaining required federal, state and local permits;
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•
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completing construction work, commissioning and integration of all of the systems comprising our HBI production plant;
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•
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negotiating sales contracts for our planned production; and
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•
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other factors, many of which are beyond our control.
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VI.
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HUMAN CAPITAL RISKS
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VII.
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RISKS RELATED TO THE PROPOSED MERGER
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•
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the adoption of the Merger Agreement by AK Steel stockholders;
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•
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the approval by our shareholders of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the issuance of our common shares in connection with the Merger;
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•
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the receipt of required regulatory approval in Mexico;
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•
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the absence of any governmental order or law prohibiting the consummation of the Merger;
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•
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the accuracy of our and AK Steel’s respective representations and warranties under the Merger Agreement (subject to the materiality standards set forth in the Merger Agreement);
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•
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the performance by us and AK Steel of our respective obligations under the Merger Agreement in all material respects; and
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•
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the absence of a material adverse effect (as described in the Merger Agreement) on us or AK Steel.
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•
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we may experience negative reactions from the financial markets, including negative impacts on the market price of our common shares;
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•
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the manner in which customers, vendors, business partners and other third parties perceive us may be negatively impacted, which in turn could affect our ability to compete for new business or obtain renewals in the marketplace more broadly;
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•
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we may experience negative reactions from employees, which may adversely affect, among other things, productivity and occupational safety; and
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•
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we will have expended significant time and resources that could otherwise have been spent on our existing businesses and the pursuit of other opportunities that could have been beneficial to us, and our ongoing business and financial results may be adversely affected.
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•
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adverse changes in market conditions;
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•
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commodity prices for iron ore and steel;
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•
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production levels;
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•
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operating results;
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•
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competitive conditions;
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•
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laws and regulations affecting the iron ore and steel businesses;
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•
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capital expenditure obligations;
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•
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higher than expected integration costs;
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•
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lower than expected synergies; and
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•
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general economic conditions.
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•
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increasing our vulnerability to changing economic, regulatory and industry conditions;
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•
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limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and industry;
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•
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limiting our ability to pay dividends to our shareholders;
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•
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limiting our ability to borrow additional funds; and
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•
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requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, share repurchases, dividends and other purposes.
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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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Period
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Total Number of Shares
(or Units) Purchased1
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Average Price Paid per Share
(or Unit)
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Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
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Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs2
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October 1 - 31, 2019
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1,375
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$
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7.19
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—
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$
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229,356
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November 1 - 30, 2019
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709
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$
|
6.96
|
|
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—
|
|
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$
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229,356
|
|
December 1 - 31, 2019
|
|
—
|
|
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$
|
—
|
|
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—
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|
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$
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229,356
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|
Total
|
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2,084
|
|
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$
|
7.11
|
|
|
—
|
|
|
—
|
|
|
|
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|
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1 All shares were delivered to us to satisfy tax withholding obligations due upon the vesting or payment of stock awards.
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2 On November 26, 2018, we announced a new share repurchase program which was authorized by our Board of Directors, pursuant to which we could buy back our outstanding common shares in the open market or in privately 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 could be executed through open-market purchases, including through Rule 10b5-1 agreements, or privately negotiated transactions. The authorization was effective until December 31, 2019.
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Item 6.
|
Selected Financial Data
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
(In Millions)
|
||||||||||
|
2019
|
|
2018
|
|
Variance
Favorable/ (Unfavorable) |
||||||
Interest expense, net
|
$
|
(101.2
|
)
|
|
$
|
(118.9
|
)
|
|
$
|
17.7
|
|
Loss on extinguishment of debt
|
(18.2
|
)
|
|
(6.8
|
)
|
|
(11.4
|
)
|
|||
Other non-operating income (expense):
|
|
|
|
|
|
||||||
Net periodic benefit costs other than service cost component
|
(0.6
|
)
|
|
14.0
|
|
|
(14.6
|
)
|
|||
Other
|
2.8
|
|
|
3.2
|
|
|
(0.4
|
)
|
|||
|
$
|
(117.2
|
)
|
|
$
|
(108.5
|
)
|
|
$
|
(8.7
|
)
|
|
(In Millions)
|
||||||
|
2019
|
|
2018
|
||||
Income tax benefit (expense)
|
$
|
(17.6
|
)
|
|
$
|
475.2
|
|
Effective tax rate
|
5.7
|
%
|
|
(84.1
|
)%
|
•
|
A decrease in the average year-to-date realized product revenue rate of $6.14 per long ton, or 5.8%, during the year ended December 31, 2019, compared to 2018, which resulted in a decrease of $127.3 million, predominantly due to:
|
◦
|
A decrease in the hot-rolled coil steel price, which negatively affected the realized revenue rate by $16 per long ton or $311 million; and
|
◦
|
Lower pellet premiums which negatively affected the realized revenue rate by $2 per long ton or $40 million.
|
◦
|
These decreases were offset partially by higher full-year Platts 62% price, which positively affected the realized revenue rate by $13 per long ton, or $260 million.
|
•
|
Lower third-party sales volume of 2.0 million long tons, due to decreased customer demand, which was offset partially by increased intercompany demand of 0.8 million long tons, for a net decrease of 1.2 million long tons or decreased revenues of $117.7 million.
|
•
|
A decrease in sales volume of 1.2 million long tons, which resulted in decreased costs of $75 million period-over-period.
|
•
|
This decrease was offset partially by an unfavorable change in the full-year cost predominantly due to:
|
◦
|
Increased stripping and lower ore recovery, which together increased costs by $35 million, or $2 per long ton, increased depreciation of $15 million, or $1 per long ton, increased commodity supply usage of $12 million, or $1 per long ton, and increased maintenance of $9 million, or $1 per long ton.
|
◦
|
This unfavorable change was offset partially by decreased royalties of $14 million, or $1 per long ton, lower energy rates resulting in lower costs of $12 million, or $1 per long ton, and decreased labor costs of $11 million, or $1 per long ton.
|
|
(In Millions)
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
Less:
|
|
|
|
||||
Interest expense, net
|
(101.6
|
)
|
|
(121.3
|
)
|
||
Income tax benefit (expense)
|
(17.6
|
)
|
|
460.3
|
|
||
Depreciation, depletion and amortization
|
(85.1
|
)
|
|
(89.0
|
)
|
||
Total EBITDA
|
$
|
497.1
|
|
|
$
|
878.1
|
|
Less:
|
|
|
|
||||
Impact of discontinued operations
|
$
|
(1.3
|
)
|
|
$
|
120.6
|
|
Loss on extinguishment of debt
|
(18.2
|
)
|
|
(6.8
|
)
|
||
Severance costs
|
(1.7
|
)
|
|
—
|
|
||
Acquisition costs
|
(6.5
|
)
|
|
—
|
|
||
Foreign exchange remeasurement
|
—
|
|
|
(0.9
|
)
|
||
Impairment of other long-lived assets
|
—
|
|
|
(1.1
|
)
|
||
Total Adjusted EBITDA
|
$
|
524.8
|
|
|
$
|
766.3
|
|
|
|
|
|
||||
EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
648.1
|
|
|
$
|
852.9
|
|
Metallics
|
(8.1
|
)
|
|
(3.3
|
)
|
||
Corporate and Other (including discontinued operations)
|
(142.9
|
)
|
|
28.5
|
|
||
Total EBITDA
|
$
|
497.1
|
|
|
$
|
878.1
|
|
|
|
|
|
||||
Adjusted EBITDA:
|
|
|
|
||||
Mining and Pelletizing
|
$
|
668.3
|
|
|
$
|
875.3
|
|
Metallics
|
(8.1
|
)
|
|
(3.3
|
)
|
||
Corporate
|
(135.4
|
)
|
|
(105.7
|
)
|
||
Total Adjusted EBITDA
|
$
|
524.8
|
|
|
$
|
766.3
|
|
|
(In Millions)
|
||||||
|
December 31,
2019 |
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
352.6
|
|
|
$
|
823.2
|
|
|
|
|
|
||||
Available borrowing base on ABL Facility1
|
$
|
395.7
|
|
|
$
|
323.7
|
|
ABL Facility loans drawn
|
—
|
|
|
—
|
|
||
Letter of credit obligations and other commitments
|
(37.9
|
)
|
|
(55.0
|
)
|
||
Borrowing capacity available
|
$
|
357.8
|
|
|
$
|
268.7
|
|
|
|
|
|
||||
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.
|
|
|
Pension
|
|
OPEB
|
||||||||||||
|
|
Funding
|
|
Expense (Benefit)
|
|
Funding
|
|
Expense (Benefit)
|
||||||||
2017
|
|
$
|
24.4
|
|
|
$
|
18.0
|
|
|
$
|
2.1
|
|
|
$
|
(6.1
|
)
|
2018
|
|
27.6
|
|
|
12.7
|
|
|
3.8
|
|
|
(5.9
|
)
|
||||
2019
|
|
16.4
|
|
|
22.4
|
|
|
3.7
|
|
|
(2.5
|
)
|
||||
2020 (Estimated)
|
|
20.2
|
|
|
16.7
|
|
|
3.5
|
|
|
(8.7
|
)
|
|
Pension and Other Benefits
|
||||||
|
2019
|
|
|
2018
|
|
||
Plan discount rates:
|
|
|
|
|
|
||
Iron Hourly Pension Plan
|
3.34
|
|
%
|
|
4.31
|
|
%
|
Salaried Pension Plan
|
3.18
|
|
|
|
4.21
|
|
|
Ore Mining Pension Plan
|
N/A
|
|
|
|
4.33
|
|
|
SERP
|
3.05
|
|
|
|
4.22
|
|
|
Hourly OPEB Plan
|
3.28
|
|
|
|
4.29
|
|
|
Salaried OPEB Plan
|
3.29
|
|
|
|
4.27
|
|
|
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
|
6.50
|
|
|
|
6.75
|
|
|
Ultimate health care cost trend rate
|
5.00
|
|
|
|
5.00
|
|
|
Year that the ultimate rate is reached
|
2026
|
|
|
|
2026
|
|
|
•
|
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply of 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 blast furnace 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;
|
•
|
the potential existence of significant deficiencies or material weakness in our internal control over financial reporting;
|
•
|
the possibility that the Merger Agreement may be terminated and the proposed Merger may not be completed, whether due to the inability to obtain regulatory approvals, as a result of litigation instituted against AK Steel and/or us, the inability to obtain shareholder approval, or the inability to satisfy any other condition to the completion of the Merger;
|
•
|
our ability to realize the anticipated benefits of the proposed Merger and to successfully integrate the businesses of AK Steel into our existing businesses, including uncertainties associated with maintaining relationships with customers, vendors and employees, as well as realizing the estimated future synergies;
|
•
|
the possibility that the Merger may be less accretive than expected, and may be dilutive, to our earnings per share, whether as a result of adverse changes in market conditions, volatility in the commodity prices for iron ore and/or steel, adverse regulatory developments or otherwise; and
|
•
|
additional debt we assume, or other proposed financing transactions we may enter into, in connection with the proposed Merger may negatively impact our credit profile and limit our financial flexibility.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
352.6
|
|
|
$
|
823.2
|
|
Accounts receivable, net
|
94.0
|
|
|
226.7
|
|
||
Inventories
|
317.4
|
|
|
181.1
|
|
||
Derivative assets
|
45.8
|
|
|
91.5
|
|
||
Income tax receivable, current
|
58.6
|
|
|
117.3
|
|
||
Other current assets
|
29.5
|
|
|
39.8
|
|
||
Total current assets
|
897.9
|
|
|
1,479.6
|
|
||
Non-current assets:
|
|
|
|
||||
Property, plant and equipment, net
|
1,929.0
|
|
|
1,286.0
|
|
||
Income tax receivable, non-current
|
62.7
|
|
|
121.3
|
|
||
Deferred income taxes
|
459.5
|
|
|
464.8
|
|
||
Other non-current assets
|
154.7
|
|
|
177.9
|
|
||
TOTAL ASSETS
|
$
|
3,503.8
|
|
|
$
|
3,529.6
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
193.2
|
|
|
$
|
186.8
|
|
Accrued liabilities
|
126.3
|
|
|
158.9
|
|
||
State and local taxes payable
|
37.9
|
|
|
35.5
|
|
||
Other current liabilities
|
52.0
|
|
|
87.0
|
|
||
Total current liabilities
|
409.4
|
|
|
468.2
|
|
||
Non-current liabilities:
|
|
|
|
||||
Long-term debt
|
2,113.8
|
|
|
2,092.9
|
|
||
Pension and OPEB liabilities
|
311.5
|
|
|
248.7
|
|
||
Environmental and mine closure obligations
|
164.9
|
|
|
172.0
|
|
||
Other non-current liabilities
|
146.3
|
|
|
123.6
|
|
||
TOTAL LIABILITIES
|
3,145.9
|
|
|
3,105.4
|
|
||
Commitments and contingencies (See Note 18)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Shares - par value $0.125 per share
|
|
|
|
||||
Authorized - 600,000,000 shares (2018 - 600,000,000 shares);
|
|
|
|
||||
Issued - 301,886,794 shares (2018 - 301,886,794 shares);
|
|
|
|
||||
Outstanding - 270,084,005 shares (2018 - 292,611,569 shares)
|
37.7
|
|
|
37.7
|
|
||
Capital in excess of par value of shares
|
3,872.1
|
|
|
3,916.7
|
|
||
Retained deficit
|
(2,842.4
|
)
|
|
(3,060.2
|
)
|
||
Cost of 31,802,789 common shares in treasury (2018 - 9,275,225 shares)
|
(390.7
|
)
|
|
(186.1
|
)
|
||
Accumulated other comprehensive loss
|
(318.8
|
)
|
|
(283.9
|
)
|
||
TOTAL EQUITY
|
357.9
|
|
|
424.2
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
3,503.8
|
|
|
$
|
3,529.6
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues from product sales and services
|
$
|
1,989.9
|
|
|
$
|
2,332.4
|
|
|
$
|
1,866.0
|
|
Cost of goods sold and operating expenses
|
(1,414.2
|
)
|
|
(1,522.8
|
)
|
|
(1,398.4
|
)
|
|||
Sales margin
|
575.7
|
|
|
809.6
|
|
|
467.6
|
|
|||
Other operating income (expense):
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
(119.4
|
)
|
|
(113.5
|
)
|
|
(102.9
|
)
|
|||
Miscellaneous - net
|
(27.0
|
)
|
|
(22.9
|
)
|
|
25.5
|
|
|||
Total other operating expense
|
(146.4
|
)
|
|
(136.4
|
)
|
|
(77.4
|
)
|
|||
Operating income
|
429.3
|
|
|
673.2
|
|
|
390.2
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense, net
|
(101.2
|
)
|
|
(118.9
|
)
|
|
(126.8
|
)
|
|||
Loss on extinguishment of debt
|
(18.2
|
)
|
|
(6.8
|
)
|
|
(165.4
|
)
|
|||
Other non-operating income
|
2.2
|
|
|
17.2
|
|
|
10.2
|
|
|||
Total other expense
|
(117.2
|
)
|
|
(108.5
|
)
|
|
(282.0
|
)
|
|||
Income from continuing operations before income taxes
|
312.1
|
|
|
564.7
|
|
|
108.2
|
|
|||
Income tax benefit (expense)
|
(17.6
|
)
|
|
475.2
|
|
|
252.4
|
|
|||
Income from continuing operations
|
294.5
|
|
|
1,039.9
|
|
|
360.6
|
|
|||
Income (loss) from discontinued operations, net of tax
|
(1.7
|
)
|
|
88.2
|
|
|
2.5
|
|
|||
Net income
|
292.8
|
|
|
1,128.1
|
|
|
363.1
|
|
|||
Loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
3.9
|
|
|||
Net income attributable to Cliffs shareholders
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
|
$
|
367.0
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per common share attributable to Cliffs shareholders - basic
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.07
|
|
|
$
|
3.50
|
|
|
$
|
1.27
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.30
|
|
|
0.01
|
|
|||
|
$
|
1.06
|
|
|
$
|
3.80
|
|
|
$
|
1.28
|
|
Earnings (loss) per common share attributable to Cliffs shareholders - diluted
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.04
|
|
|
$
|
3.42
|
|
|
$
|
1.25
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.29
|
|
|
0.01
|
|
|||
|
$
|
1.03
|
|
|
$
|
3.71
|
|
|
$
|
1.26
|
|
Average number of shares (in thousands)
|
|
|
|
|
|
||||||
Basic
|
276,761
|
|
|
297,176
|
|
|
288,435
|
|
|||
Diluted
|
284,480
|
|
|
304,141
|
|
|
292,961
|
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Cliffs shareholders
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
|
$
|
367.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Changes in pension and OPEB, net of tax
|
(34.6
|
)
|
|
(17.2
|
)
|
|
11.5
|
|
|||
Changes in foreign currency translation
|
—
|
|
|
(225.4
|
)
|
|
(13.9
|
)
|
|||
Changes in derivative financial instruments, net of tax
|
(0.3
|
)
|
|
(2.3
|
)
|
|
(0.5
|
)
|
|||
Other comprehensive loss
|
(34.9
|
)
|
|
(244.9
|
)
|
|
(2.9
|
)
|
|||
Other comprehensive loss attributable to the noncontrolling interest
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|||
Total comprehensive income attributable to Cliffs shareholders
|
$
|
257.9
|
|
|
$
|
883.2
|
|
|
$
|
363.0
|
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
|
$
|
363.1
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
85.1
|
|
|
89.0
|
|
|
87.7
|
|
|||
Deferred income taxes
|
16.8
|
|
|
(460.5
|
)
|
|
—
|
|
|||
Loss on extinguishment of debt
|
18.2
|
|
|
6.8
|
|
|
165.4
|
|
|||
Loss (gain) on derivatives
|
46.8
|
|
|
(110.2
|
)
|
|
(4.1
|
)
|
|||
Gain on foreign currency translation
|
—
|
|
|
(228.1
|
)
|
|
—
|
|
|||
Other
|
65.4
|
|
|
20.7
|
|
|
45.5
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables and other assets
|
254.5
|
|
|
51.7
|
|
|
(246.3
|
)
|
|||
Inventories
|
(136.3
|
)
|
|
43.5
|
|
|
(4.2
|
)
|
|||
Payables, accrued expenses and other liabilities
|
(80.8
|
)
|
|
(62.5
|
)
|
|
(69.0
|
)
|
|||
Net cash provided by operating activities
|
562.5
|
|
|
478.5
|
|
|
338.1
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(639.0
|
)
|
|
(208.6
|
)
|
|
(134.9
|
)
|
|||
Deposits for property, plant and equipment
|
(17.0
|
)
|
|
(87.5
|
)
|
|
(16.8
|
)
|
|||
Other investing activities
|
11.6
|
|
|
23.0
|
|
|
(4.3
|
)
|
|||
Net cash used by investing activities
|
(644.4
|
)
|
|
(273.1
|
)
|
|
(156.0
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Repurchase of common shares
|
(252.9
|
)
|
|
(47.5
|
)
|
|
—
|
|
|||
Dividends paid
|
(72.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of common shares
|
—
|
|
|
—
|
|
|
661.3
|
|
|||
Proceeds from issuance of debt
|
720.9
|
|
|
—
|
|
|
1,771.5
|
|
|||
Debt issuance costs
|
(6.8
|
)
|
|
(1.5
|
)
|
|
(28.6
|
)
|
|||
Repurchase of debt
|
(729.3
|
)
|
|
(234.5
|
)
|
|
(1,720.7
|
)
|
|||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(105.0
|
)
|
|||
Distributions of partnership equity
|
(44.2
|
)
|
|
(44.2
|
)
|
|
(52.9
|
)
|
|||
Other financing activities
|
(9.7
|
)
|
|
(47.5
|
)
|
|
(26.7
|
)
|
|||
Net cash provided (used) by financing activities
|
(394.1
|
)
|
|
(375.2
|
)
|
|
498.9
|
|
|||
Effect of exchange rate changes on cash
|
—
|
|
|
(2.3
|
)
|
|
3.3
|
|
|||
Increase (decrease) in cash and cash equivalents, including cash classified within other current assets related to discontinued operations
|
(476.0
|
)
|
|
(172.1
|
)
|
|
684.3
|
|
|||
Less: increase (decrease) in cash and cash equivalents from discontinued operations, classified within other current assets
|
(5.4
|
)
|
|
(17.0
|
)
|
|
18.8
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(470.6
|
)
|
|
(155.1
|
)
|
|
665.5
|
|
|||
Cash and cash equivalents at beginning of year
|
823.2
|
|
|
978.3
|
|
|
312.8
|
|
|||
Cash and cash equivalents at end of year
|
$
|
352.6
|
|
|
$
|
823.2
|
|
|
$
|
978.3
|
|
|
(In Millions)
|
|||||||||||||||||||||||||||||
|
Cliffs Shareholders
|
|
|
|
|
|||||||||||||||||||||||||
|
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
|
|||||||||||||||
January 1, 2017
|
233.1
|
|
|
$
|
29.8
|
|
|
$
|
3,347.0
|
|
|
$
|
(4,574.3
|
)
|
|
$
|
(245.5
|
)
|
|
$
|
(21.3
|
)
|
|
$
|
133.8
|
|
|
$
|
(1,330.5
|
)
|
Comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
367.0
|
|
|
—
|
|
|
(4.0
|
)
|
|
(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
|
)
|
|||||||
Distributions 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)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,128.1
|
|
|
—
|
|
|
(244.9
|
)
|
|
—
|
|
|
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
|
|
Comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
292.8
|
|
|
—
|
|
|
(34.9
|
)
|
|
—
|
|
|
257.9
|
|
|||||||
Stock and other incentive plans
|
1.9
|
|
|
—
|
|
|
(44.6
|
)
|
|
—
|
|
|
48.3
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||||
Common stock repurchases
|
(24.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(252.9
|
)
|
|
—
|
|
|
—
|
|
|
(252.9
|
)
|
|||||||
Common stock dividends ($0.27 per
share) |
—
|
|
|
—
|
|
|
—
|
|
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75.0
|
)
|
|||||||
December 31, 2019
|
270.1
|
|
|
$
|
37.7
|
|
|
$
|
3,872.1
|
|
|
$
|
(2,842.4
|
)
|
|
$
|
(390.7
|
)
|
|
$
|
(318.8
|
)
|
|
$
|
—
|
|
|
$
|
357.9
|
|
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
|
Asset Class
|
|
Basis
|
|
Life
|
Land rights and mineral rights
|
|
Units of production
|
|
Life of mine
|
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
|
•
|
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)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue category:
|
|
|
|
|
|
||||||
Product
|
$
|
1,848.1
|
|
|
$
|
2,172.3
|
|
|
$
|
1,644.6
|
|
Freight
|
141.8
|
|
|
160.1
|
|
|
166.7
|
|
|||
Venture partner's cost reimbursements
|
—
|
|
|
—
|
|
|
54.7
|
|
|||
Total revenues from product sales and services
|
$
|
1,989.9
|
|
|
$
|
2,332.4
|
|
|
$
|
1,866.0
|
|
|
(In Millions)
|
||||||||||||||
|
Deferred Revenue (Current)
|
|
Deferred Revenue (Long-Term)
|
||||||||||||
|
Year Ended
December 31, |
|
Year Ended
December 31, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Opening balance as of January 1
|
$
|
21.0
|
|
|
$
|
23.8
|
|
|
$
|
38.5
|
|
|
$
|
51.4
|
|
Closing balance as of December 31
|
22.1
|
|
|
21.0
|
|
|
25.7
|
|
|
38.5
|
|
||||
Increase (Decrease)
|
$
|
1.1
|
|
|
$
|
(2.8
|
)
|
|
$
|
(12.8
|
)
|
|
$
|
(12.9
|
)
|
|
(In Millions)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Capital additions1
|
$
|
689.8
|
|
|
$
|
394.8
|
|
|
$
|
156.0
|
|
Less:
|
|
|
|
|
|
||||||
Non-cash accruals
|
15.3
|
|
|
93.6
|
|
|
(2.2
|
)
|
|||
Right-of-use assets - finance leases
|
29.3
|
|
|
7.6
|
|
|
6.5
|
|
|||
Grants
|
(10.8
|
)
|
|
(2.5
|
)
|
|
—
|
|
|||
Cash paid for capital expenditures including deposits
|
$
|
656.0
|
|
|
$
|
296.1
|
|
|
$
|
151.7
|
|
|
|
|
|
|
|
||||||
1 Includes capital additions related to discontinued operations of $0.1 million and $2.8 million for the years ended December 31, 2018 and 2017, respectively.
|
|
(In Millions)
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
|
$
|
363.1
|
|
Less:
|
|
|
|
|
|
||||||
Interest expense, net
|
(101.6
|
)
|
|
(121.3
|
)
|
|
(132.0
|
)
|
|||
Income tax benefit (expense)
|
(17.6
|
)
|
|
460.3
|
|
|
252.4
|
|
|||
Depreciation, depletion and amortization
|
(85.1
|
)
|
|
(89.0
|
)
|
|
(87.7
|
)
|
|||
Total EBITDA
|
$
|
497.1
|
|
|
$
|
878.1
|
|
|
$
|
330.4
|
|
Less:
|
|
|
|
|
|
||||||
Impact of discontinued operations
|
$
|
(1.3
|
)
|
|
$
|
120.6
|
|
|
$
|
22.0
|
|
Loss on extinguishment of debt
|
(18.2
|
)
|
|
(6.8
|
)
|
|
(165.4
|
)
|
|||
Severance costs
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition costs
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign exchange remeasurement
|
—
|
|
|
(0.9
|
)
|
|
13.9
|
|
|||
Impairment of other long-lived assets
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|||
Total Adjusted EBITDA
|
$
|
524.8
|
|
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
|
|
|
|
|
||||||
EBITDA:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
648.1
|
|
|
$
|
852.9
|
|
|
$
|
534.9
|
|
Metallics
|
(8.1
|
)
|
|
(3.3
|
)
|
|
(0.4
|
)
|
|||
Corporate and Other (including discontinued operations)
|
(142.9
|
)
|
|
28.5
|
|
|
(204.1
|
)
|
|||
Total EBITDA
|
$
|
497.1
|
|
|
$
|
878.1
|
|
|
$
|
330.4
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA:
|
|
|
|
|
|
||||||
Mining and Pelletizing
|
$
|
668.3
|
|
|
$
|
875.3
|
|
|
$
|
559.4
|
|
Metallics
|
(8.1
|
)
|
|
(3.3
|
)
|
|
(0.4
|
)
|
|||
Corporate
|
(135.4
|
)
|
|
(105.7
|
)
|
|
(99.1
|
)
|
|||
Total Adjusted EBITDA
|
$
|
524.8
|
|
|
$
|
766.3
|
|
|
$
|
459.9
|
|
|
|
(In Millions)
|
||||||
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Product inventories
|
|
|
|
|
||||
Finished goods
|
|
$
|
114.1
|
|
|
$
|
77.8
|
|
Work-in-process
|
|
68.7
|
|
|
10.1
|
|
||
Total product inventories
|
|
182.8
|
|
|
87.9
|
|
||
Supplies and other inventories
|
|
134.6
|
|
|
93.2
|
|
||
Inventories
|
|
$
|
317.4
|
|
|
$
|
181.1
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Land rights and mineral rights
|
$
|
549.7
|
|
|
$
|
549.6
|
|
Office and information technology
|
71.9
|
|
|
70.0
|
|
||
Buildings
|
157.8
|
|
|
87.2
|
|
||
Mining equipment
|
581.9
|
|
|
548.5
|
|
||
Processing equipment
|
791.8
|
|
|
645.8
|
|
||
Electric power facilities
|
81.9
|
|
|
58.7
|
|
||
Land improvements
|
32.5
|
|
|
23.8
|
|
||
Asset retirement obligation
|
1.7
|
|
|
14.8
|
|
||
Other
|
27.9
|
|
|
25.2
|
|
||
Construction-in-progress
|
730.3
|
|
|
284.8
|
|
||
|
3,027.4
|
|
|
2,308.4
|
|
||
Allowance for depreciation and depletion
|
(1,098.4
|
)
|
|
(1,022.4
|
)
|
||
|
$
|
1,929.0
|
|
|
$
|
1,286.0
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Land rights
|
$
|
12.4
|
|
|
$
|
12.4
|
|
Mineral rights:
|
|
|
|
||||
Cost
|
$
|
537.3
|
|
|
$
|
537.2
|
|
Depletion
|
(134.1
|
)
|
|
(126.5
|
)
|
||
Net mineral rights
|
$
|
403.2
|
|
|
$
|
410.7
|
|
(In Millions)
|
||||||||||||||||||
December 31, 2019
|
||||||||||||||||||
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
|
|
|
$
|
(4.6
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
393.6
|
|
Senior Unsecured Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
$316.25 Million 1.50% 2025 Convertible Senior Notes
|
|
6.26%
|
|
316.3
|
|
|
(4.6
|
)
|
|
(65.0
|
)
|
|
246.7
|
|
||||
$1.075 Billion 5.75% 2025 Senior Notes
|
|
6.01%
|
|
473.3
|
|
|
(3.6
|
)
|
|
(5.5
|
)
|
|
464.2
|
|
||||
$750 Million 5.875% 2027 Senior Notes
|
|
6.49%
|
|
750.0
|
|
|
(6.3
|
)
|
|
(27.3
|
)
|
|
716.4
|
|
||||
$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
|
|
|
|
|
|
|
|
|
|
$
|
2,113.8
|
|
(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 Senior 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
|
|
Debt Instrument
|
|
Maturity
|
|
Interest Payable
(until maturity)
|
$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
|
||
2020
|
$
|
—
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
2023
|
—
|
|
|
2024
|
400.0
|
|
|
2025 and thereafter
|
1,838.0
|
|
|
Total maturities of debt
|
$
|
2,238.0
|
|
|
(In Millions)
|
||||||||||||||
|
December 31, 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
|
$
|
—
|
|
|
$
|
187.6
|
|
|
$
|
—
|
|
|
$
|
187.6
|
|
Derivative assets
|
—
|
|
|
—
|
|
|
45.8
|
|
|
45.8
|
|
||||
Total
|
$
|
—
|
|
|
$
|
187.6
|
|
|
$
|
45.8
|
|
|
$
|
233.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
1.1
|
|
|
$
|
4.3
|
|
Total
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
1.1
|
|
|
$
|
4.3
|
|
|
(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)
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Defined benefit pension plans
|
$
|
22.4
|
|
|
$
|
12.7
|
|
|
$
|
18.0
|
|
Defined contribution pension plans
|
3.4
|
|
|
3.1
|
|
|
2.9
|
|
|||
OPEB plans
|
(2.5
|
)
|
|
(5.9
|
)
|
|
(6.1
|
)
|
|||
Total
|
$
|
23.3
|
|
|
$
|
9.9
|
|
|
$
|
14.8
|
|
|
(In Millions)
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
Change in benefit obligations:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Benefit obligations — beginning of year
|
$
|
905.7
|
|
|
$
|
973.1
|
|
|
$
|
241.9
|
|
|
$
|
265.9
|
|
Service cost (excluding expenses)
|
17.3
|
|
|
18.7
|
|
|
1.7
|
|
|
2.2
|
|
||||
Interest cost
|
34.9
|
|
|
30.3
|
|
|
9.5
|
|
|
8.3
|
|
||||
Plan amendments
|
—
|
|
|
2.2
|
|
|
—
|
|
|
12.8
|
|
||||
Actuarial (gain) loss
|
111.8
|
|
|
(57.0
|
)
|
|
18.9
|
|
|
(29.4
|
)
|
||||
Benefits paid
|
(62.2
|
)
|
|
(60.7
|
)
|
|
(25.6
|
)
|
|
(24.4
|
)
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
5.8
|
|
|
5.6
|
|
||||
Other
|
13.6
|
|
|
(0.9
|
)
|
|
2.3
|
|
|
0.9
|
|
||||
Benefit obligations — end of year
|
$
|
1,021.1
|
|
|
$
|
905.7
|
|
|
$
|
254.5
|
|
|
$
|
241.9
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
$
|
687.2
|
|
|
$
|
749.8
|
|
|
$
|
240.2
|
|
|
$
|
262.5
|
|
Actual return on plan assets
|
98.1
|
|
|
(29.6
|
)
|
|
35.1
|
|
|
(8.2
|
)
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||
Employer contributions
|
16.4
|
|
|
27.6
|
|
|
2.5
|
|
|
3.0
|
|
||||
Benefits paid
|
(62.2
|
)
|
|
(60.7
|
)
|
|
(18.6
|
)
|
|
(17.6
|
)
|
||||
Other
|
9.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets — end of year
|
$
|
748.9
|
|
|
$
|
687.2
|
|
|
$
|
259.7
|
|
|
$
|
240.2
|
|
Funded status
|
$
|
(272.2
|
)
|
|
$
|
(218.5
|
)
|
|
$
|
5.2
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in Statements of Financial Position:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48.5
|
|
|
$
|
32.1
|
|
Current liabilities
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(3.5
|
)
|
|
(3.5
|
)
|
||||
Non-current liabilities
|
(271.7
|
)
|
|
(218.4
|
)
|
|
(39.8
|
)
|
|
(30.3
|
)
|
||||
Total amount recognized
|
$
|
(272.2
|
)
|
|
$
|
(218.5
|
)
|
|
$
|
5.2
|
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
382.1
|
|
|
$
|
330.1
|
|
|
$
|
72.6
|
|
|
$
|
82.1
|
|
Prior service cost (credit)
|
7.3
|
|
|
8.5
|
|
|
(7.9
|
)
|
|
(9.9
|
)
|
||||
Net amount recognized
|
$
|
389.4
|
|
|
$
|
338.6
|
|
|
$
|
64.7
|
|
|
$
|
72.2
|
|
|
(In Millions)
|
||||||||||||||||||||||||||
|
2019
|
||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Benefits
|
||||||||||||||||||||||||
|
Salaried
|
|
Hourly
|
|
SERP
|
|
Total
|
|
Salaried
|
|
Hourly
|
|
Total
|
||||||||||||||
Fair value of plan assets
|
$
|
293.7
|
|
|
$
|
455.2
|
|
|
$
|
—
|
|
|
$
|
748.9
|
|
|
$
|
—
|
|
|
$
|
259.7
|
|
|
$
|
259.7
|
|
Benefit obligation
|
(407.2
|
)
|
|
(607.3
|
)
|
|
(6.6
|
)
|
|
(1,021.1
|
)
|
|
(37.7
|
)
|
|
(216.8
|
)
|
|
(254.5
|
)
|
|||||||
Funded status
|
$
|
(113.5
|
)
|
|
$
|
(152.1
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
(272.2
|
)
|
|
$
|
(37.7
|
)
|
|
$
|
42.9
|
|
|
$
|
5.2
|
|
|
(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
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Discount rate:
|
|
|
|
|
|
|
|
|
|
|
|
Iron Hourly Pension Plan
|
3.34
|
%
|
|
4.31
|
%
|
|
N/A
|
%
|
|
N/A
|
%
|
Salaried Pension Plan
|
3.18
|
|
|
4.21
|
|
|
N/A
|
|
|
N/A
|
|
Ore Mining Pension Plan
|
N/A
|
|
|
4.33
|
|
|
N/A
|
|
|
N/A
|
|
Supplemental Executive Retirement Plan
|
3.05
|
|
|
4.22
|
|
|
N/A
|
|
|
N/A
|
|
Hourly OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
3.28
|
|
|
4.29
|
|
Salaried OPEB Plan
|
N/A
|
|
|
N/A
|
|
|
3.29
|
|
|
4.27
|
|
Interest crediting rate
|
6.00
|
|
|
6.00
|
|
|
N/A
|
|
|
N/A
|
|
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
|
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
Health care cost trend rate assumed for next year
|
6.50
|
%
|
|
6.75
|
%
|
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
|
|
2020
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
|
2020
Target
Allocation
|
|
Percentage of
Plan Assets at
December 31,
|
||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Equity securities
|
|
45.0
|
%
|
|
44.0
|
%
|
|
38.9
|
%
|
|
8.0
|
%
|
|
7.2
|
%
|
|
8.1
|
%
|
Fixed income
|
|
28.0
|
%
|
|
26.1
|
%
|
|
26.0
|
%
|
|
80.0
|
%
|
|
79.8
|
%
|
|
77.0
|
%
|
Hedge funds
|
|
5.0
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
|
4.0
|
%
|
|
4.8
|
%
|
|
4.7
|
%
|
Private equity
|
|
7.0
|
%
|
|
6.6
|
%
|
|
6.2
|
%
|
|
3.0
|
%
|
|
0.7
|
%
|
|
1.2
|
%
|
Structured credit
|
|
7.5
|
%
|
|
7.0
|
%
|
|
11.4
|
%
|
|
2.0
|
%
|
|
2.1
|
%
|
|
3.5
|
%
|
Real estate
|
|
7.5
|
%
|
|
9.4
|
%
|
|
10.3
|
%
|
|
3.0
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
Cash
|
|
—
|
%
|
|
1.5
|
%
|
|
1.8
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
(In Millions)
|
||||||||||||||
|
|
December 31, 2019
|
||||||||||||||
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
|
|
$
|
139.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139.1
|
|
U.S. small/mid-cap
|
|
29.3
|
|
|
—
|
|
|
—
|
|
|
29.3
|
|
||||
International
|
|
161.4
|
|
|
—
|
|
|
—
|
|
|
161.4
|
|
||||
Fixed income
|
|
173.0
|
|
|
22.3
|
|
|
—
|
|
|
195.3
|
|
||||
Hedge funds
|
|
—
|
|
|
—
|
|
|
40.2
|
|
|
40.2
|
|
||||
Private equity
|
|
—
|
|
|
—
|
|
|
49.5
|
|
|
49.5
|
|
||||
Structured credit
|
|
—
|
|
|
—
|
|
|
52.3
|
|
|
52.3
|
|
||||
Real estate
|
|
—
|
|
|
—
|
|
|
70.4
|
|
|
70.4
|
|
||||
Cash
|
|
11.4
|
|
|
—
|
|
|
—
|
|
|
11.4
|
|
||||
Total
|
|
$
|
514.2
|
|
|
$
|
22.3
|
|
|
$
|
212.4
|
|
|
$
|
748.9
|
|
|
|
(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)
|
||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2018
|
$
|
37.4
|
|
|
$
|
39.8
|
|
|
$
|
72.9
|
|
|
$
|
65.5
|
|
|
$
|
215.6
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at
the reporting date
|
(0.2
|
)
|
|
1.4
|
|
|
5.9
|
|
|
5.4
|
|
|
12.5
|
|
|||||
Relating to assets sold during
the period |
—
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|||||
Purchases
|
—
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|||||
Sales
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(8.2
|
)
|
|||||
Ending balance — December 31, 2018
|
$
|
37.2
|
|
|
$
|
42.6
|
|
|
$
|
78.8
|
|
|
$
|
70.5
|
|
|
$
|
229.1
|
|
|
|
(In Millions)
|
||||||||||||||
|
|
December 31, 2019
|
||||||||||||||
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
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
U.S. small/mid-cap
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
||||
International
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
||||
Fixed income
|
|
166.4
|
|
|
40.9
|
|
|
—
|
|
|
207.3
|
|
||||
Hedge funds
|
|
—
|
|
|
—
|
|
|
12.4
|
|
|
12.4
|
|
||||
Private equity
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
||||
Structured credit
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
5.5
|
|
||||
Real estate
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|
14.0
|
|
||||
Cash
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total
|
|
$
|
185.2
|
|
|
$
|
40.9
|
|
|
$
|
33.6
|
|
|
$
|
259.7
|
|
|
|
(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)
|
||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Hedge
Funds
|
|
Private Equity
Funds
|
|
Structured
Credit Fund
|
|
Real
Estate
|
|
Total
|
||||||||||
Beginning balance — January 1, 2018
|
$
|
11.4
|
|
|
$
|
3.9
|
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
|
$
|
35.2
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at the reporting date
|
—
|
|
|
(0.1
|
)
|
|
0.6
|
|
|
1.1
|
|
|
1.6
|
|
|||||
Relating to assets sold during the period
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|||||
Ending balance — December 31, 2018
|
$
|
11.4
|
|
|
$
|
3.0
|
|
|
$
|
8.5
|
|
|
$
|
13.1
|
|
|
$
|
36.0
|
|
|
|
(In Millions)
|
||||||||||||||
|
|
Pension
Benefits
|
|
Other Benefits
|
||||||||||||
Company Contributions
|
|
VEBA
|
|
Direct
Payments
|
|
Total
|
||||||||||
2018
|
|
$
|
27.6
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
3.8
|
|
2019
|
|
16.4
|
|
|
—
|
|
|
3.7
|
|
|
3.7
|
|
||||
2020 (Expected)1
|
|
20.2
|
|
|
—
|
|
|
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, 2019). 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
|
|||||||||||
2020
|
$
|
73.6
|
|
|
$
|
17.2
|
|
|
$
|
(0.7
|
)
|
|
$
|
16.5
|
|
2021
|
71.1
|
|
|
16.6
|
|
|
(0.8
|
)
|
|
15.8
|
|
||||
2022
|
70.4
|
|
|
16.3
|
|
|
(0.8
|
)
|
|
15.5
|
|
||||
2023
|
71.2
|
|
|
16.3
|
|
|
(0.8
|
)
|
|
15.5
|
|
||||
2024
|
66.9
|
|
|
16.1
|
|
|
(0.9
|
)
|
|
15.2
|
|
||||
2025-2029
|
318.2
|
|
|
77.3
|
|
|
(4.6
|
)
|
|
72.7
|
|
|
(In Millions, except per
share amounts)
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of goods sold and operating expenses
|
$
|
2.0
|
|
|
$
|
1.7
|
|
|
$
|
1.9
|
|
Selling, general and administrative expenses
|
15.6
|
|
|
13.4
|
|
|
16.3
|
|
|||
Reduction of operating income from continuing operations before
income taxes
|
17.6
|
|
|
15.1
|
|
|
18.2
|
|
|||
Income tax benefit1
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|||
Reduction of net income from continuing operations attributable to Cliffs shareholders
|
$
|
13.9
|
|
|
$
|
15.1
|
|
|
$
|
18.2
|
|
Reduction of continuing operations earnings per common share attributable to Cliffs shareholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
||||||
1 No income tax benefit in 2018 and 2017 due to the full valuation allowance.
|
Grant Year
|
|
Vesting Date
|
|
Plan Issued Under
|
|
Restricted Stock Units Granted
|
|
Performance Shares Granted
|
||
2019
|
|
12/31/2021
|
|
A&R 2015 Equity Plan
|
|
572,104
|
|
|
572,104
|
|
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
|
|
Performance
Share Plan Year |
|
Performance Shares Granted
|
|
Forfeitures to Date
|
|
Expected to Vest
|
|
Grant Date
|
|
Grant Date Fair Value
|
|
Performance Period
|
|||||
2019
|
|
572,104
|
|
|
15,879
|
|
|
556,225
|
|
|
2/19/2019
|
|
$
|
18.31
|
|
|
1/1/2019 - 12/31/2021
|
2018
|
|
675,599
|
|
|
35,320
|
|
|
640,279
|
|
|
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
|
|
|
63,457
|
|
|
490,268
|
|
|
2/21/2017
|
|
$
|
19.69
|
|
|
1/1/2017 - 12/31/2019
|
Year of Grant
|
|
Restricted Shares
|
|
Deferred Shares
|
||
2019
|
|
86,477
|
|
|
23,659
|
|
2018
|
|
92,718
|
|
|
17,170
|
|
2017
|
|
93,359
|
|
|
17,289
|
|
|
2019
|
|
2018
|
|
2017
|
|||
|
Shares
|
|
Shares
|
|
Shares
|
|||
Stock options:
|
|
|
|
|
|
|||
Outstanding at beginning of year
|
563,230
|
|
|
599,870
|
|
|
599,870
|
|
Exercised
|
—
|
|
|
(36,640
|
)
|
|
—
|
|
Forfeited/canceled
|
—
|
|
|
—
|
|
|
—
|
|
Outstanding at end of year
|
563,230
|
|
|
563,230
|
|
|
599,870
|
|
Restricted awards:
|
|
|
|
|
|
|||
Outstanding and restricted at beginning of year
|
4,804,248
|
|
|
4,776,483
|
|
|
5,461,783
|
|
Granted during the year
|
682,240
|
|
|
795,487
|
|
|
1,196,731
|
|
Vested and issued
|
(3,168,195
|
)
|
|
(627,567
|
)
|
|
(1,813,315
|
)
|
Forfeited/canceled
|
(60,974
|
)
|
|
(140,155
|
)
|
|
(68,716
|
)
|
Outstanding and restricted at end of year
|
2,257,319
|
|
|
4,804,248
|
|
|
4,776,483
|
|
Performance shares:
|
|
|
|
|
|
|||
Outstanding at beginning of year
|
1,424,723
|
|
|
1,848,312
|
|
|
1,368,469
|
|
Granted during the year
|
572,104
|
|
|
675,599
|
|
|
802,831
|
|
Vested and issued
|
—
|
|
|
(489,953
|
)
|
|
—
|
|
Forfeited/canceled
|
(60,949
|
)
|
|
(609,235
|
)
|
|
(322,988
|
)
|
Outstanding at end of year
|
1,935,878
|
|
|
1,424,723
|
|
|
1,848,312
|
|
Vested or expected to vest as of December 31, 20191
|
4,756,427
|
|
|
|
|
|
||
Directors’ retainer and voluntary shares:
|
|
|
|
|
|
|||
Outstanding at beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
Granted during the year
|
31,075
|
|
|
27,300
|
|
|
25,476
|
|
Vested and issued
|
(31,075
|
)
|
|
(27,300
|
)
|
|
(25,476
|
)
|
Outstanding at end of year
|
—
|
|
|
—
|
|
|
—
|
|
Reserved for future grants or awards at end of year:
|
|
|
|
|
|
|||
Employee plans
|
9,931,740
|
|
|
|
|
|
||
Directors’ plans
|
389,692
|
|
|
|
|
|
||
Total
|
10,321,432
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
1 We assume all shares will vest until the date of vesting or forfeiture.
|
|
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Outstanding, beginning of year
|
6,792,201
|
|
|
$
|
6.90
|
|
Granted
|
1,285,419
|
|
|
$
|
14.18
|
|
Vested and issued
|
(3,199,270
|
)
|
|
$
|
2.20
|
|
Forfeited/canceled
|
(121,923
|
)
|
|
$
|
12.21
|
|
Outstanding, end of year
|
4,756,427
|
|
|
$
|
11.90
|
|
|
|
(In Millions)
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
|
$
|
311.9
|
|
|
$
|
565.0
|
|
|
$
|
90.7
|
|
Foreign
|
|
0.2
|
|
|
(0.3
|
)
|
|
17.5
|
|
|||
|
|
$
|
312.1
|
|
|
$
|
564.7
|
|
|
$
|
108.2
|
|
|
|
(In Millions)
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Other comprehensive income:
|
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
|
$
|
11.4
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
Unrealized net loss on derivative financial instruments
|
|
0.1
|
|
|
0.7
|
|
|
—
|
|
|||
Total
|
|
$
|
11.5
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
(In Millions)
|
||||||
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Environmental
|
$
|
2.0
|
|
|
$
|
2.5
|
|
Mine closure1
|
165.3
|
|
|
172.4
|
|
||
Total environmental and mine closure obligations
|
167.3
|
|
|
174.9
|
|
||
Less current portion
|
2.4
|
|
|
2.9
|
|
||
Long-term environmental and mine closure obligations
|
$
|
164.9
|
|
|
$
|
172.0
|
|
|
|
|
|
||||
1 Includes $22.0 million and $35.0 million related to our active operations as of December 31, 2019 and 2018, respectively, with the remaining balance attributable to inactive operations, including our indefinitely idled Empire mine and a closed mine formerly operating as LTV Steel Mining Company.
|
|
(In Millions)
|
||||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 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
|
|
|
Other current liabilities
|
|
$
|
3.2
|
|
|
Other current liabilities
|
|
$
|
3.7
|
|
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer supply agreement
|
Derivative assets
|
|
44.5
|
|
|
Derivative assets
|
|
89.3
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Provisional pricing arrangements
|
Derivative assets
|
|
1.3
|
|
|
Derivative assets
|
|
2.1
|
|
|
Other current liabilities
|
|
1.1
|
|
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815:
|
|
|
$
|
45.8
|
|
|
|
|
$
|
91.4
|
|
|
|
|
$
|
1.1
|
|
|
|
|
$
|
—
|
|
Total derivatives
|
|
|
$
|
45.8
|
|
|
|
|
$
|
91.5
|
|
|
|
|
$
|
4.3
|
|
|
|
|
$
|
3.7
|
|
|
|
(Quantities in Millions)
|
||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
|
Notional Amount
|
|
Unit of Measure
|
|
Varying Maturity Dates
|
Natural gas
|
|
20.1
|
|
MMBtu
|
|
January 2020 - December 2021
|
|
1.8
|
|
MMBtu
|
|
January 2019 - August 2019
|
Diesel
|
|
0.8
|
|
Gallons
|
|
January 2020
|
|
11.0
|
|
Gallons
|
|
January 2019 - December 2019
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Income (loss) from discontinued operations, net of tax
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
(1.5
|
)
|
|
118.3
|
|
|
21.2
|
|
||
Canadian Operations
|
|
0.3
|
|
|
(26.5
|
)
|
|
(21.3
|
)
|
|||
Other
|
|
(0.5
|
)
|
|
(3.6
|
)
|
|
2.6
|
|
|||
|
|
$
|
(1.7
|
)
|
|
$
|
88.2
|
|
|
$
|
2.5
|
|
|
|
(In Millions)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided (used) by operating activities
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
(2.1
|
)
|
|
$
|
(81.3
|
)
|
|
$
|
79.6
|
|
Canadian Operations
|
|
—
|
|
|
(14.6
|
)
|
|
—
|
|
|||
|
|
$
|
(2.1
|
)
|
|
$
|
(95.9
|
)
|
|
$
|
79.6
|
|
|
|
|
|
|
|
|
||||||
Net cash provided (used) by investing activities
|
|
|
|
|
|
|
||||||
Asia Pacific Iron Ore
|
|
$
|
0.1
|
|
|
$
|
19.8
|
|
|
$
|
(2.8
|
)
|
Canadian Operations
|
|
0.3
|
|
|
—
|
|
|
(7.7
|
)
|
|||
Other
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
|
|
$
|
0.4
|
|
|
$
|
19.8
|
|
|
$
|
(8.4
|
)
|
|
(In Millions)
|
||||||||||
|
Pre-tax
Amount
|
|
Tax
Benefit
|
|
After-tax
Amount
|
||||||
As of December 31, 2019:
|
|
|
|
|
|
||||||
Postretirement benefit liability
|
$
|
(454.1
|
)
|
|
$
|
138.4
|
|
|
$
|
(315.7
|
)
|
Unrealized net loss on derivative financial instruments
|
(3.9
|
)
|
|
0.8
|
|
|
(3.1
|
)
|
|||
|
$
|
(458.0
|
)
|
|
$
|
139.2
|
|
|
$
|
(318.8
|
)
|
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
|
)
|
Mine
|
|
Cleveland-Cliffs Inc.
|
|
ArcelorMittal USA
|
|
U.S. Steel
|
Hibbing
|
|
23.0%
|
|
62.3%
|
|
14.7%
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income from continuing operations
|
$
|
294.5
|
|
|
$
|
1,039.9
|
|
|
$
|
360.6
|
|
Loss from continuing operations attributable to
noncontrolling interest |
—
|
|
|
—
|
|
|
3.9
|
|
|||
Net income from continuing operations
attributable to Cliffs shareholders |
294.5
|
|
|
1,039.9
|
|
|
364.5
|
|
|||
Income (loss) from discontinued operations, net of tax
|
(1.7
|
)
|
|
88.2
|
|
|
2.5
|
|
|||
Net income attributable to Cliffs shareholders
|
$
|
292.8
|
|
|
$
|
1,128.1
|
|
|
$
|
367.0
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares:
|
|
|
|
|
|
||||||
Basic
|
276.8
|
|
|
297.2
|
|
|
288.4
|
|
|||
Convertible senior notes
|
4.4
|
|
|
3.4
|
|
|
—
|
|
|||
Employee stock plans
|
3.3
|
|
|
3.5
|
|
|
4.6
|
|
|||
Diluted
|
284.5
|
|
|
304.1
|
|
|
293.0
|
|
|||
|
|
|
|
|
|
||||||
Earnings (loss) per common share attributable to
Cliffs common shareholders - basic: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.07
|
|
|
$
|
3.50
|
|
|
$
|
1.27
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.30
|
|
|
0.01
|
|
|||
|
$
|
1.06
|
|
|
$
|
3.80
|
|
|
$
|
1.28
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - diluted: |
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.04
|
|
|
$
|
3.42
|
|
|
$
|
1.25
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.29
|
|
|
0.01
|
|
|||
|
$
|
1.03
|
|
|
$
|
3.71
|
|
|
$
|
1.26
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||||||
2019
|
|||||||||||||||||||
Quarters
|
|
|
|||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
Revenues from product sales and services
|
$
|
157.0
|
|
|
$
|
743.2
|
|
|
$
|
555.6
|
|
|
$
|
534.1
|
|
|
$
|
1,989.9
|
|
Sales margin
|
30.9
|
|
|
263.0
|
|
|
154.9
|
|
|
126.9
|
|
|
575.7
|
|
|||||
Net income (loss) from continuing operations attributable to Cliffs shareholders
|
$
|
(22.1
|
)
|
|
$
|
161.4
|
|
|
$
|
91.8
|
|
|
$
|
63.4
|
|
|
$
|
294.5
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(1.7
|
)
|
|||||
Net income (loss) attributable to Cliffs common shareholders
|
$
|
(22.1
|
)
|
|
$
|
160.8
|
|
|
$
|
90.9
|
|
|
$
|
63.2
|
|
|
$
|
292.8
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - basic: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.08
|
)
|
|
$
|
0.59
|
|
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
$
|
1.07
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
|
$
|
(0.08
|
)
|
|
$
|
0.59
|
|
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
$
|
1.06
|
|
Earnings (loss) per common share attributable to
Cliffs common shareholders - diluted: |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
(0.08
|
)
|
|
$
|
0.57
|
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
1.04
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
|
$
|
(0.08
|
)
|
|
$
|
0.57
|
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
1.03
|
|
|
(In Millions, Except Per Share Amounts)
|
||||||||||||||||||
|
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
|
|
Condensed Consolidating Statement of Financial Position
|
|||||||||||||||||||
As of December 31, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
349.7
|
|
|
$
|
0.1
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
352.6
|
|
Accounts receivable, net
|
4.9
|
|
|
93.0
|
|
|
0.3
|
|
|
(4.2
|
)
|
|
94.0
|
|
|||||
Inventories
|
—
|
|
|
317.4
|
|
|
—
|
|
|
—
|
|
|
317.4
|
|
|||||
Derivative assets
|
—
|
|
|
45.8
|
|
|
—
|
|
|
—
|
|
|
45.8
|
|
|||||
Income tax receivable, current
|
58.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58.6
|
|
|||||
Other current assets
|
9.1
|
|
|
13.0
|
|
|
7.4
|
|
|
—
|
|
|
29.5
|
|
|||||
Total current assets
|
422.3
|
|
|
469.3
|
|
|
10.5
|
|
|
(4.2
|
)
|
|
897.9
|
|
|||||
Non-current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
11.2
|
|
|
1,867.1
|
|
|
50.7
|
|
|
—
|
|
|
1,929.0
|
|
|||||
Income tax receivable, non-current
|
58.6
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
62.7
|
|
|||||
Deferred income taxes
|
458.3
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
459.5
|
|
|||||
Investment in subsidiaries
|
1,821.1
|
|
|
47.2
|
|
|
—
|
|
|
(1,868.3
|
)
|
|
—
|
|
|||||
Long-term intercompany notes
|
—
|
|
|
—
|
|
|
121.3
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current assets
|
15.1
|
|
|
121.4
|
|
|
18.2
|
|
|
—
|
|
|
154.7
|
|
|||||
TOTAL ASSETS
|
$
|
2,786.6
|
|
|
$
|
2,509.1
|
|
|
$
|
201.9
|
|
|
$
|
(1,993.8
|
)
|
|
$
|
3,503.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
5.7
|
|
|
$
|
187.5
|
|
|
$
|
4.2
|
|
|
$
|
(4.2
|
)
|
|
$
|
193.2
|
|
Accrued liabilities
|
80.7
|
|
|
45.5
|
|
|
0.1
|
|
|
—
|
|
|
126.3
|
|
|||||
State and local taxes payable
|
—
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|||||
Other current liabilities
|
6.0
|
|
|
38.6
|
|
|
7.4
|
|
|
—
|
|
|
52.0
|
|
|||||
Total current liabilities
|
92.4
|
|
|
309.5
|
|
|
11.7
|
|
|
(4.2
|
)
|
|
409.4
|
|
|||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
2,113.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,113.8
|
|
|||||
Pension and OPEB liabilities
|
80.5
|
|
|
496.9
|
|
|
(265.9
|
)
|
|
—
|
|
|
311.5
|
|
|||||
Environmental and mine closure obligations
|
—
|
|
|
145.6
|
|
|
19.3
|
|
|
—
|
|
|
164.9
|
|
|||||
Long-term intercompany notes
|
121.3
|
|
|
—
|
|
|
—
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current liabilities
|
20.7
|
|
|
120.3
|
|
|
5.3
|
|
|
—
|
|
|
146.3
|
|
|||||
TOTAL LIABILITIES
|
2,428.7
|
|
|
1,072.3
|
|
|
(229.6
|
)
|
|
(125.5
|
)
|
|
3,145.9
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL EQUITY
|
357.9
|
|
|
1,436.8
|
|
|
431.5
|
|
|
(1,868.3
|
)
|
|
357.9
|
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
2,786.6
|
|
|
$
|
2,509.1
|
|
|
$
|
201.9
|
|
|
$
|
(1,993.8
|
)
|
|
$
|
3,503.8
|
|
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
|
—
|
|
|
181.1
|
|
|
—
|
|
|
—
|
|
|
181.1
|
|
|||||
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
|
|
|||||
Non-current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
13.3
|
|
|
1,221.9
|
|
|
50.8
|
|
|
—
|
|
|
1,286.0
|
|
|||||
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
|
|
|
153.8
|
|
|
16.1
|
|
|
—
|
|
|
177.9
|
|
|||||
TOTAL ASSETS
|
$
|
2,820.8
|
|
|
$
|
1,942.0
|
|
|
$
|
205.3
|
|
|
$
|
(1,438.5
|
)
|
|
$
|
3,529.6
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
5.3
|
|
|
$
|
181.4
|
|
|
$
|
4.2
|
|
|
$
|
(4.1
|
)
|
|
$
|
186.8
|
|
Accrued liabilities
|
92.7
|
|
|
66.1
|
|
|
0.1
|
|
|
—
|
|
|
158.9
|
|
|||||
State and local taxes payable
|
—
|
|
|
35.4
|
|
|
0.1
|
|
|
—
|
|
|
35.5
|
|
|||||
Other current liabilities
|
4.8
|
|
|
74.1
|
|
|
8.1
|
|
|
—
|
|
|
87.0
|
|
|||||
Total current liabilities
|
102.8
|
|
|
357.0
|
|
|
12.5
|
|
|
(4.1
|
)
|
|
468.2
|
|
|||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
2,092.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,092.9
|
|
|||||
Pension and OPEB liabilities
|
64.3
|
|
|
414.4
|
|
|
(230.0
|
)
|
|
—
|
|
|
248.7
|
|
|||||
Environmental and mine closure obligations
|
—
|
|
|
152.1
|
|
|
19.9
|
|
|
—
|
|
|
172.0
|
|
|||||
Long-term intercompany notes
|
121.3
|
|
|
—
|
|
|
—
|
|
|
(121.3
|
)
|
|
—
|
|
|||||
Other non-current liabilities
|
15.3
|
|
|
99.5
|
|
|
8.8
|
|
|
—
|
|
|
123.6
|
|
|||||
TOTAL LIABILITIES
|
2,396.6
|
|
|
1,023.0
|
|
|
(188.8
|
)
|
|
(125.4
|
)
|
|
3,105.4
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
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 Operations and Comprehensive Income
|
|||||||||||||||||||
For the Year Ended December 31, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues from product sales and services
|
$
|
—
|
|
|
$
|
1,989.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,989.9
|
|
Cost of goods sold and operating expenses
|
—
|
|
|
(1,414.2
|
)
|
|
—
|
|
|
—
|
|
|
(1,414.2
|
)
|
|||||
Sales margin
|
—
|
|
|
575.7
|
|
|
—
|
|
|
—
|
|
|
575.7
|
|
|||||
Other operating income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(100.7
|
)
|
|
(18.3
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(119.4
|
)
|
|||||
Miscellaneous - net
|
0.1
|
|
|
(26.0
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(27.0
|
)
|
|||||
Total other operating expense
|
(100.6
|
)
|
|
(44.3
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
(146.4
|
)
|
|||||
Operating income (loss)
|
(100.6
|
)
|
|
531.4
|
|
|
(1.5
|
)
|
|
—
|
|
|
429.3
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(99.4
|
)
|
|
(2.3
|
)
|
|
0.5
|
|
|
—
|
|
|
(101.2
|
)
|
|||||
Loss on extinguishment of debt
|
(18.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
|||||
Other non-operating income (expense)
|
(4.0
|
)
|
|
(12.9
|
)
|
|
19.1
|
|
|
—
|
|
|
2.2
|
|
|||||
Total other income (expense)
|
(121.6
|
)
|
|
(15.2
|
)
|
|
19.6
|
|
|
—
|
|
|
(117.2
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(222.2
|
)
|
|
516.2
|
|
|
18.1
|
|
|
—
|
|
|
312.1
|
|
|||||
Income tax expense
|
(17.0
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(17.6
|
)
|
|||||
Equity in income of subsidiaries
|
531.6
|
|
|
18.3
|
|
|
—
|
|
|
(549.9
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
292.4
|
|
|
534.1
|
|
|
17.9
|
|
|
(549.9
|
)
|
|
294.5
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
0.4
|
|
|
(0.3
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(1.7
|
)
|
|||||
Net income attributable to Cliffs shareholders
|
$
|
292.8
|
|
|
$
|
533.8
|
|
|
$
|
16.1
|
|
|
$
|
(549.9
|
)
|
|
$
|
292.8
|
|
Other comprehensive income (loss)
|
(34.9
|
)
|
|
(35.8
|
)
|
|
16.9
|
|
|
18.9
|
|
|
(34.9
|
)
|
|||||
Total comprehensive income attributable to Cliffs shareholders
|
$
|
257.9
|
|
|
$
|
498.0
|
|
|
$
|
33.0
|
|
|
$
|
(531.0
|
)
|
|
$
|
257.9
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the Year Ended December 31, 2018
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues from product sales and services
|
$
|
—
|
|
|
$
|
2,332.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,332.4
|
|
Cost of goods sold and operating expenses
|
—
|
|
|
(1,522.8
|
)
|
|
—
|
|
|
—
|
|
|
(1,522.8
|
)
|
|||||
Sales margin
|
—
|
|
|
809.6
|
|
|
—
|
|
|
—
|
|
|
809.6
|
|
|||||
Other operating income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(86.1
|
)
|
|
(27.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(113.5
|
)
|
|||||
Miscellaneous - net
|
(0.3
|
)
|
|
(26.9
|
)
|
|
4.3
|
|
|
—
|
|
|
(22.9
|
)
|
|||||
Total other operating income (expense)
|
(86.4
|
)
|
|
(54.0
|
)
|
|
4.0
|
|
|
—
|
|
|
(136.4
|
)
|
|||||
Operating income (loss)
|
(86.4
|
)
|
|
755.6
|
|
|
4.0
|
|
|
—
|
|
|
673.2
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(117.6
|
)
|
|
(2.1
|
)
|
|
0.8
|
|
|
—
|
|
|
(118.9
|
)
|
|||||
Loss on extinguishment of debt
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
|||||
Other non-operating income (expense)
|
(3.5
|
)
|
|
0.9
|
|
|
19.8
|
|
|
—
|
|
|
17.2
|
|
|||||
Total other income (expense)
|
(127.9
|
)
|
|
(1.2
|
)
|
|
20.6
|
|
|
—
|
|
|
(108.5
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(214.3
|
)
|
|
754.4
|
|
|
24.6
|
|
|
—
|
|
|
564.7
|
|
|||||
Income tax benefit
|
474.7
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
475.2
|
|
|||||
Equity in income of subsidiaries
|
858.2
|
|
|
25.5
|
|
|
—
|
|
|
(883.7
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
1,118.6
|
|
|
779.9
|
|
|
25.1
|
|
|
(883.7
|
)
|
|
1,039.9
|
|
|||||
Income from discontinued operations, net of tax
|
9.5
|
|
|
12.3
|
|
|
66.4
|
|
|
—
|
|
|
88.2
|
|
|||||
Net income attributable to Cliffs shareholders
|
$
|
1,128.1
|
|
|
$
|
792.2
|
|
|
$
|
91.5
|
|
|
$
|
(883.7
|
)
|
|
$
|
1,128.1
|
|
Other comprehensive loss
|
(244.9
|
)
|
|
(24.1
|
)
|
|
(256.7
|
)
|
|
280.8
|
|
|
(244.9
|
)
|
|||||
Total comprehensive income (loss) attributable to Cliffs shareholders
|
$
|
883.2
|
|
|
$
|
768.1
|
|
|
$
|
(165.2
|
)
|
|
$
|
(602.9
|
)
|
|
$
|
883.2
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income
|
|||||||||||||||||||
For the Year Ended December 31, 2017
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues from product sales and services
|
$
|
—
|
|
|
$
|
1,866.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,866.0
|
|
Cost of goods sold and operating expenses
|
—
|
|
|
(1,398.4
|
)
|
|
—
|
|
|
—
|
|
|
(1,398.4
|
)
|
|||||
Sales margin
|
—
|
|
|
467.6
|
|
|
—
|
|
|
—
|
|
|
467.6
|
|
|||||
Other operating income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
(77.2
|
)
|
|
(19.9
|
)
|
|
(5.8
|
)
|
|
—
|
|
|
(102.9
|
)
|
|||||
Miscellaneous - net
|
(2.3
|
)
|
|
11.0
|
|
|
16.8
|
|
|
—
|
|
|
25.5
|
|
|||||
Total other operating income (expense)
|
(79.5
|
)
|
|
(8.9
|
)
|
|
11.0
|
|
|
—
|
|
|
(77.4
|
)
|
|||||
Operating income (loss)
|
(79.5
|
)
|
|
458.7
|
|
|
11.0
|
|
|
—
|
|
|
390.2
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(126.8
|
)
|
|
(1.0
|
)
|
|
1.0
|
|
|
—
|
|
|
(126.8
|
)
|
|||||
Loss on extinguishment of debt
|
(165.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(165.4
|
)
|
|||||
Other non-operating income (expense)
|
(4.0
|
)
|
|
(3.0
|
)
|
|
17.2
|
|
|
—
|
|
|
10.2
|
|
|||||
Total other income (expense)
|
(296.2
|
)
|
|
(4.0
|
)
|
|
18.2
|
|
|
—
|
|
|
(282.0
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(375.7
|
)
|
|
454.7
|
|
|
29.2
|
|
|
—
|
|
|
108.2
|
|
|||||
Income tax benefit (expense)
|
251.4
|
|
|
1.3
|
|
|
(0.3
|
)
|
|
—
|
|
|
252.4
|
|
|||||
Equity in income of subsidiaries
|
512.6
|
|
|
11.8
|
|
|
—
|
|
|
(524.4
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
388.3
|
|
|
467.8
|
|
|
28.9
|
|
|
(524.4
|
)
|
|
360.6
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
(21.3
|
)
|
|
1.7
|
|
|
22.1
|
|
|
—
|
|
|
2.5
|
|
|||||
Net income
|
367.0
|
|
|
469.5
|
|
|
51.0
|
|
|
(524.4
|
)
|
|
363.1
|
|
|||||
Loss attributable to noncontrolling interest
|
—
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|||||
Net income attributable to Cliffs shareholders
|
$
|
367.0
|
|
|
$
|
473.4
|
|
|
$
|
51.0
|
|
|
$
|
(524.4
|
)
|
|
$
|
367.0
|
|
Other comprehensive income (loss)
|
(4.0
|
)
|
|
12.9
|
|
|
(4.8
|
)
|
|
(8.1
|
)
|
|
(4.0
|
)
|
|||||
Total comprehensive income attributable to Cliffs shareholders
|
$
|
363.0
|
|
|
$
|
486.3
|
|
|
$
|
46.2
|
|
|
$
|
(532.5
|
)
|
|
$
|
363.0
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the Year Ended December 31, 2019
|
|||||||||||||||||||
(In Millions)
|
|||||||||||||||||||
|
Cleveland-Cliffs Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided (used) by operating activities
|
$
|
(50.0
|
)
|
|
$
|
616.3
|
|
|
$
|
(3.8
|
)
|
|
$
|
—
|
|
|
$
|
562.5
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
(1.2
|
)
|
|
(637.8
|
)
|
|
—
|
|
|
—
|
|
|
(639.0
|
)
|
|||||
Deposits for property, plant and equipment
|
—
|
|
|
(14.0
|
)
|
|
(3.0
|
)
|
|
—
|
|
|
(17.0
|
)
|
|||||
Intercompany investing
|
(63.9
|
)
|
|
(3.7
|
)
|
|
(0.1
|
)
|
|
67.7
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
10.8
|
|
|
0.8
|
|
|
—
|
|
|
11.6
|
|
|||||
Net cash used by investing activities
|
(65.1
|
)
|
|
(644.7
|
)
|
|
(2.3
|
)
|
|
67.7
|
|
|
(644.4
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase of common shares
|
(252.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(252.9
|
)
|
|||||
Dividends paid
|
(72.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72.1
|
)
|
|||||
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
|
0.1
|
|
|
63.4
|
|
|
4.2
|
|
|
(67.7
|
)
|
|
—
|
|
|||||
Other financing activities
|
(14.9
|
)
|
|
8.6
|
|
|
(3.4
|
)
|
|
—
|
|
|
(9.7
|
)
|
|||||
Net cash provided (used) by financing activities
|
(355.0
|
)
|
|
27.8
|
|
|
0.8
|
|
|
(67.7
|
)
|
|
(394.1
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Decrease in cash and cash equivalents, including cash classified within other current assets related to discontinued operations
|
(470.1
|
)
|
|
(0.6
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
(476.0
|
)
|
|||||
Less: decrease in cash and cash equivalents from discontinued operations, classified within other current assets
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(470.1
|
)
|
|
(0.6
|
)
|
|
0.1
|
|
|
—
|
|
|
(470.6
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
819.8
|
|
|
0.7
|
|
|
2.7
|
|
|
—
|
|
|
823.2
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
349.7
|
|
|
$
|
0.1
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
352.6
|
|
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) by 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 other current assets related to discontinued operations
|
(129.1
|
)
|
|
(1.4
|
)
|
|
(41.6
|
)
|
|
—
|
|
|
(172.1
|
)
|
|||||
Less: decrease in cash and cash equivalents from discontinued operations, classified within other current assets
|
—
|
|
|
—
|
|
|
(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 investments
|
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 on cash
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||||
Increase (decrease) in cash and cash equivalents, including cash classified within other current assets related to discontinued operations
|
665.5
|
|
|
(0.4
|
)
|
|
19.2
|
|
|
—
|
|
|
684.3
|
|
|||||
Less: increase in cash and cash equivalents from discontinued operations, classified within other current assets
|
—
|
|
|
—
|
|
|
18.8
|
|
|
—
|
|
|
18.8
|
|
|||||
Net increase (decrease) 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
|
|
•
|
We tested the operating effectiveness of internal controls related to the Company’s estimation of mineral reserve quantities and the related mine closure dates.
|
•
|
We evaluated the experience, qualifications and objectivity of management’s experts, including in-house mine engineers.
|
•
|
For an iron ore mine subject to the Company’s routine annual assessment we evaluated management’s assessment by:
|
◦
|
Understanding the process used by management to survey and analyze the geological and operational status of current year mine production.
|
◦
|
Evaluating the historical accuracy of management’s technical model as compared to actual mine production results.
|
◦
|
Comparing the mine plan, updated for current year depletion, to
|
▪
|
Presentations to the Audit Committee.
|
▪
|
Information by asset group, asset retirement obligation valuation models, and depreciation, depletion and amortization expense calculations.
|
•
|
For an iron ore mine subject to the Company’s periodic in-depth evaluation of its mineral reserve estimate:
|
◦
|
We evaluated management’s determination of the size and scope of the iron ore body, by:
|
▪
|
Understanding the process used by management to complete research and exploration activities including mineralized resource drill samples.
|
▪
|
Understanding the methodology utilized by management to apply the research and exploration data to the development of a technical model of the iron ore body.
|
▪
|
Evaluating the historical accuracy of management’s technical model as compared to actual mine production results.
|
◦
|
We evaluated management’s estimates of future iron ore prices, production costs and capital expenditures (the “financial assumptions”), by:
|
▪
|
Understanding and testing the methodology utilized by management for development of the
|
▪
|
Evaluated management’s ability to accurately forecast future iron ore prices, production costs and capital expenditures by comparing actual results to management’s historical forecasts.
|
▪
|
Evaluated the reasonableness of management’s estimates of future iron ore prices to forecasted information included in analyst reports.
|
▪
|
Evaluated the reasonableness of management’s forecast for production costs and capital expenditures by comparing the forecasts to: (1) historical results and (2) internal communications to management and the Board of Directors.
|
◦
|
We evaluated management’s mine plan for the proven and probable mineral reserves, by:
|
▪
|
Understanding the process used by management to develop the mine plan for proven and probable mineral reserves applying key inputs such as the technical model of the iron ore body and the financial assumptions.
|
▪
|
Comparing the mine plan to
|
•
|
Presentations to the Audit Committee.
|
•
|
Historical mine plan(s).
|
•
|
Information by asset group, asset retirement obligation valuation models, and depreciation, depletion and amortization expense calculations.
|
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
|
***Agreement and Plan of Merger, dated as of December 2, 2019, by and among Cleveland-Cliffs Inc., AK Steel Holding Corporation, and Pepper Merger Sub Inc. (filed as Exhibit 2.1 to Cliffs' Form 8-K filed on December 4, 2019 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)
|
|
Fifth Supplemental Indenture between Cliffs Natural Resources Inc. and U.S. Bank National Association, as trustee, dated March 31, 2011 (filed as Exhibit 4(b) to Cliffs’ Form 10-Q for the period ended June 30, 2011 and incorporated herein by reference)
|
Power of Attorney (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 February 20, 2020 (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 February 20, 2020 (filed herewith)
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves, Chairman, President and Chief Executive Officer of Cleveland-Cliffs Inc., as of February 20, 2020 (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 February 20, 2020 (filed herewith)
|
|
Mine Safety Disclosures (filed herewith)
|
|
101
|
The following financial information from Cleveland-Cliffs Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Statements of Consolidated Financial Position, (ii) the Statements of Consolidated Operations, (iii) the Statements of Consolidated Comprehensive Income, (iv) the Statements of Consolidated Cash Flows, (v) the Statements of Consolidated Changes in Equity, and (vi) Notes to the Consolidated Financial Statements.
|
104
|
The cover page from this Annual Report on Form 10-K, formatted in Inline XBRL.
|
**
|
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(a)(5). 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 20, 2020
|
|
|
|
|
|
Chief Accounting Officer
|
Signatures
|
Title
|
Date
|
|||
|
|
|
|||
/s/ C. L. Goncalves
|
Chairman, President and
|
February 20, 2020
|
|||
C. L. Goncalves
|
Chief Executive Officer
|
|
|||
|
(Principal Executive Officer)
|
|
|||
/s/ K. A. Koci
|
Executive Vice President,
|
February 20, 2020
|
|||
K. A. Koci
|
Chief Financial Officer
|
|
|||
|
(Principal Financial Officer)
|
|
|||
/s/ R. C. Cebula
|
Vice President, Corporate Controller &
|
February 20, 2020
|
|||
R. C. Cebula
|
Chief Accounting Officer
|
|
|||
|
(Principal Accounting Officer)
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
J. T. Baldwin
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
R. P. Fisher, Jr.
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
S. M. Green
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
M. A. Harlan
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
J. L. Miller
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
J. A. Rutkowski, Jr.
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
E. M. Rychel
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
M. D. Siegal
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
G. Stoliar
|
|
|
|||
*
|
Director
|
February 20, 2020
|
|||
D. C. Taylor
|
|
|
By:
|
/s/ K. A. Koci
|
|
(K. A. Koci, as Attorney-in-Fact)
|
IRONUNITS LLC, as a Guarantor
|
|
|
|
By:
|
/s/ James D. Graham
|
Name:
|
James D. Graham
|
Title:
|
Secretary
|
CLEVELAND-CLIFFS INC.
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
Name:
|
Timothy K. Flanagan
|
Title:
|
Executive Vice President & Chief Financial Officer
|
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
|
|
|
By:
|
/s/ Elizabeth Thuning
|
Name:
|
Elizabeth Thuning
|
Title:
|
Vice President
|
IRONUNITS LLC, as a Guarantor
|
|
|
|
By:
|
/s/ James D. Graham
|
Name:
|
James D. Graham
|
Title:
|
Secretary
|
CLEVELAND-CLIFFS INC.
|
|
|
|
By:
|
/s/ Timothy K. Flanagan
|
Name:
|
Timothy K. Flanagan
|
Title:
|
Executive Vice President & Chief Financial Officer
|
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
|
|
|
By:
|
/s/ Elizabeth Thuning
|
Name:
|
Elizabeth Thuning
|
Title:
|
Vice President
|
•
|
the articles of incorporation expressly provide that the corporation is not subject to the statute (the Company has not made this election); or
|
•
|
the board of directors of the corporation approves the chapter 1704 transaction or the acquisition of the shares before the date the shares were acquired.
|
SIGNIFICANT SUBSIDIARIES
|
CLEVELAND-CLIFFS INC. AS OF DECEMBER 31, 2019
|
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%
|
Michigan, USA
|
Cliffs TIOP II, LLC
|
100%
|
Delaware, USA
|
Cliffs UTAC Holding LLC
|
100%
|
Delaware, USA
|
IronUnits LLC
|
100%
|
Delaware, USA
|
Northshore Mining Company
|
100%
|
Delaware, USA
|
The Cleveland-Cliffs Iron Company
|
100%
|
Ohio, USA
|
/s/ C. L. Goncalves
|
|
/s/ Keith A. Koci
|
C. L. Goncalves,
Chairman, President and Chief Executive Officer
|
|
K. A. Koci,
Executive Vice President, Chief Financial Officer
|
/s/ R. C. Cebula
|
|
/s/ J. T. Baldwin
|
R. C. Cebula,
Vice President, Corporate Controller & Chief Accounting Officer
|
|
J. T. Baldwin, Director
|
/s/ R. P. Fisher, Jr.
|
|
/s/ S. M. Green
|
R. P. Fisher, Jr., Director
|
|
S. M. Green, Director
|
/s/ M. A. Harlan
|
|
/s/ J. L. Miller
|
M. A. Harlan, Director
|
|
J. L. Miller, Director
|
/s/ J. A. Rutkowski, Jr.
|
|
/s/ E. M. Rychel
|
J. A. Rutkowski, Jr., Director
|
|
E. M. Rychel, Director
|
/s/ M. D. Siegal
|
|
/s/ G. Stoliar
|
M. D. Siegal, Director
|
|
G. Stoliar, Director
|
/s/ D. C. Taylor
|
|
|
D. C. Taylor, Director
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Cleveland-Cliffs Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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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 20, 2020
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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)
|
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):
|
(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
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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 20, 2020
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By:
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/s/ Keith A. Koci
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Keith A. Koci
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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 20, 2020
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By:
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/s/ Lourenco Goncalves
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|
Lourenco Goncalves
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|
|
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Chairman, President and Chief Executive Officer
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(1)
|
The Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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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 20, 2020
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By:
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/s/ Keith A. Koci
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Keith A. Koci
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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 instituted 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, 2019.
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(2)
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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.
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(3)
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This number consists of 13 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 3 pending legal actions related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules and 2 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
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(5)
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This number consists of 7 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
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(6)
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This number consists of 3 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules.
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(7)
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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 USA. As a result, data for Hibbing / 2101600 is for the period January 1, 2019 through August 11, 2019.
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