Ohio | 34-1464672 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
200 Public Square, Cleveland, Ohio | 44114-2315 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | ☐ |
Emerging growth company | ☐ |
TABLE OF CONTENTS | |||||
Page Number | |||||
DEFINITIONS | |||||
PART I - FINANCIAL INFORMATION | |||||
Item 1. | Financial Statements | ||||
Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016 | |||||
Statements of Unaudited Condensed Consolidated Operations for the Three and Six Months Ended June 30, 2017 and 2016 | |||||
Statements of Unaudited Condensed Consolidated Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 | |||||
Statements of Unaudited Condensed Consolidated Cash Flows for the Six Months Ended June 30, 2017 and 2016 | |||||
Notes to Unaudited Condensed Consolidated Financial Statements | |||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||
Item 4. | Controls and Procedures | ||||
PART II - OTHER INFORMATION | |||||
Item 1. | Legal Proceedings | ||||
Item 1A. | Risk Factors | ||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Item 4. | Mine Safety Disclosures | ||||
Item 6. | Exhibits | ||||
Signatures | |||||
Abbreviation or acronym | Term | |
A&R 2015 Equity Plan | Amended and Restated Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan | |
ABL Facility | Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, Cliffs Natural Resources Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, as amended | |
ArcelorMittal | ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco, as well as, many other subsidiaries) | |
ALJ | Administrative Law Judge | |
ASC | Accounting Standards Codification | |
ASU | Accounting Standards Updates | |
Bloom Lake Group | Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC | |
Canadian Entities | Bloom Lake Group, Wabush Group and certain other wholly-owned Canadian subsidiaries | |
CCAA | Companies' Creditors Arrangement Act (Canada) | |
Dodd-Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act | |
DR-grade | Direct reduced-grade | |
EBITDA | Earnings before interest, taxes, depreciation and amortization | |
Empire | Empire Iron Mining Partnership | |
Exchange Act | Securities Exchange Act of 1934, as amended | |
FASB | Financial Accounting Standards Board | |
Fe | Iron | |
FERC | Federal Energy Regulatory Commission | |
FMSH Act | U.S. Federal Mine Safety and Health Act 1977, as amended | |
GAAP | Accounting principles generally accepted in the United States | |
HBI | Hot briquetted iron | |
Hibbing | Hibbing Taconite Company, an unincorporated joint venture | |
Koolyanobbing | Collective term for the operating deposits at Koolyanobbing, Mount Jackson and Windarling | |
Long ton | 2,240 pounds | |
LTVSMC | LTV Steel Mining Company | |
MACT | Maximum achievable control technology | |
Metric ton | 2,205 pounds | |
MISO | Midcontinent Independent System Operator, Inc. | |
MMBtu | Million British Thermal Units | |
MSHA | U.S. Mine Safety and Health Administration | |
Monitor | FTI Consulting Canada Inc. | |
Net ton | 2,000 pounds | |
Northshore | Northshore Mining Company | |
OPEB | Other postretirement employment benefits | |
Platts 62% Price | Platts IODEX 62% Fe Fines Spot Price | |
SEC | U.S. Securities and Exchange Commission | |
SG&A | Selling, general and administrative | |
Securities Act | Securities Act of 1933, as amended | |
SSR | System Support Resource | |
Tilden | Tilden Mining Company L.C. | |
TSR | Total Shareholder Return | |
United Taconite | United Taconite LLC | |
U.S. | United States of America | |
Wabush Group | Wabush Iron Co. Limited and Wabush Resources Inc., and certain of its affiliates, including Wabush Mines (an unincorporated joint venture of Wabush Iron Co. Limited and Wabush Resources Inc.), Arnaud Railway Company and Wabush Lake Railway Company | |
2015 Equity Plan | Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan |
Item 1. | Financial Statements |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 321.5 | $ | 323.4 | |||
Accounts receivable, net | 76.7 | 128.7 | |||||
Inventories | 287.6 | 178.4 | |||||
Supplies and other inventories | 83.6 | 91.4 | |||||
Loans to and accounts receivable from the Canadian Entities | 50.1 | 48.6 | |||||
Other current assets | 88.8 | 54.1 | |||||
TOTAL CURRENT ASSETS | 908.3 | 824.6 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 999.1 | 984.4 | |||||
OTHER NON-CURRENT ASSETS | 122.7 | 114.9 | |||||
TOTAL ASSETS | $ | 2,030.1 | $ | 1,923.9 |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
LIABILITIES | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 111.7 | $ | 107.6 | |||
Accrued expenses | 112.8 | 123.3 | |||||
Accrued interest | 30.7 | 40.2 | |||||
Contingent claims | 50.0 | — | |||||
Other current liabilities | 108.1 | 120.0 | |||||
TOTAL CURRENT LIABILITIES | 413.3 | 391.1 | |||||
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES | 276.1 | 280.5 | |||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS | 201.9 | 193.9 | |||||
LONG-TERM DEBT | 1,611.8 | 2,175.1 | |||||
OTHER LIABILITIES | 193.7 | 213.8 | |||||
TOTAL LIABILITIES | 2,696.8 | 3,254.4 | |||||
COMMITMENTS AND CONTINGENCIES (SEE NOTE 18) | |||||||
EQUITY | |||||||
CLIFFS SHAREHOLDERS' DEFICIT | |||||||
Preferred Stock - no par value | |||||||
Class A - 3,000,000 shares authorized | |||||||
Class B - 4,000,000 shares authorized | |||||||
Common Shares - par value $0.125 per share | |||||||
Authorized - 600,000,000 shares (2016 - 400,000,000 shares); | |||||||
Issued - 301,886,794 shares (2016 - 238,636,794 shares); | |||||||
Outstanding - 296,496,321 shares (2016 - 233,074,091 shares) | 37.7 | 29.8 | |||||
Capital in excess of par value of shares | 3,999.7 | 3,347.0 | |||||
Retained deficit | (4,570.6 | ) | (4,574.3 | ) | |||
Cost of 5,390,473 common shares in treasury (2016 - 5,562,703 shares) | (236.5 | ) | (245.5 | ) | |||
Accumulated other comprehensive loss | (19.4 | ) | (21.3 | ) | |||
TOTAL CLIFFS SHAREHOLDERS' DEFICIT | (789.1 | ) | (1,464.3 | ) | |||
NONCONTROLLING INTEREST | 122.4 | 133.8 | |||||
TOTAL DEFICIT | (666.7 | ) | (1,330.5 | ) | |||
TOTAL LIABILITIES AND DEFICIT | $ | 2,030.1 | $ | 1,923.9 |
(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
REVENUES FROM PRODUCT SALES AND SERVICES | |||||||||||||||
Product | $ | 512.0 | $ | 452.8 | $ | 924.8 | $ | 728.4 | |||||||
Freight and venture partners' cost reimbursements | 57.3 | 43.4 | 106.1 | 73.3 | |||||||||||
569.3 | 496.2 | 1,030.9 | 801.7 | ||||||||||||
COST OF GOODS SOLD AND OPERATING EXPENSES | (424.2 | ) | (404.7 | ) | (790.1 | ) | (679.3 | ) | |||||||
SALES MARGIN | 145.1 | 91.5 | 240.8 | 122.4 | |||||||||||
OTHER OPERATING INCOME (EXPENSE) | |||||||||||||||
Selling, general and administrative expenses | (27.5 | ) | (22.5 | ) | (53.2 | ) | (50.7 | ) | |||||||
Miscellaneous - net | (3.0 | ) | 5.7 | 8.9 | 2.7 | ||||||||||
(30.5 | ) | (16.8 | ) | (44.3 | ) | (48.0 | ) | ||||||||
OPERATING INCOME | 114.6 | 74.7 | 196.5 | 74.4 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (31.4 | ) | (50.7 | ) | (74.2 | ) | (107.5 | ) | |||||||
Gain (loss) on extinguishment/restructuring of debt | (4.9 | ) | 3.6 | (76.8 | ) | 182.4 | |||||||||
Other non-operating income | 0.8 | 0.2 | 1.5 | 0.3 | |||||||||||
(35.5 | ) | (46.9 | ) | (149.5 | ) | 75.2 | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 79.1 | 27.8 | 47.0 | 149.6 | |||||||||||
INCOME TAX BENEFIT (EXPENSE) | (2.6 | ) | 2.1 | (0.8 | ) | (5.4 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 76.5 | 29.9 | 46.2 | 144.2 | |||||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | (46.4 | ) | (0.4 | ) | (45.9 | ) | 2.1 | ||||||||
NET INCOME | 30.1 | 29.5 | 0.3 | 146.3 | |||||||||||
LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | 1.7 | (16.7 | ) | 3.4 | (25.5 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS | $ | 31.8 | $ | 12.8 | $ | 3.7 | $ | 120.8 | |||||||
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.07 | $ | 0.18 | $ | 0.67 | |||||||
Discontinued operations | (0.16 | ) | — | (0.16 | ) | 0.01 | |||||||||
$ | 0.10 | $ | 0.07 | $ | 0.02 | $ | 0.68 | ||||||||
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - DILUTED | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.07 | $ | 0.17 | $ | 0.67 | |||||||
Discontinued operations | (0.15 | ) | — | (0.16 | ) | 0.01 | |||||||||
$ | 0.11 | $ | 0.07 | $ | 0.01 | $ | 0.68 | ||||||||
AVERAGE NUMBER OF SHARES (IN THOUSANDS) | |||||||||||||||
Basic | 296,070 | 182,330 | 280,617 | 177,003 | |||||||||||
Diluted | 300,711 | 184,557 | 285,247 | 178,305 |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS | $ | 31.8 | $ | 12.8 | $ | 3.7 | $ | 120.8 | |||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
Changes in pension and other post-retirement benefits, net of tax | 6.7 | 6.5 | 11.4 | 11.9 | |||||||||||
Unrealized net gain (loss) on foreign currency translation | (1.4 | ) | (2.7 | ) | (14.1 | ) | 1.7 | ||||||||
Unrealized net gain (loss) on derivative financial instruments, net of tax | — | 0.2 | — | (3.3 | ) | ||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | 5.3 | 4.0 | (2.7 | ) | 10.3 | ||||||||||
OTHER COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST | (0.4 | ) | (0.7 | ) | 4.6 | (1.3 | ) | ||||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS | $ | 36.7 | $ | 16.1 | $ | 5.6 | $ | 129.8 |
(In Millions) | |||||||
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 0.3 | $ | 146.3 | |||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | |||||||
Depreciation, depletion and amortization | 44.8 | 62.1 | |||||
(Gain) loss on extinguishment/restructuring of debt | 76.8 | (182.4 | ) | ||||
(Gain) loss on deconsolidation | 48.6 | (4.1 | ) | ||||
Other | (8.3 | ) | 5.2 | ||||
Changes in operating assets and liabilities: | |||||||
Receivables and other assets | 68.3 | 103.6 | |||||
Inventories | (106.6 | ) | (52.2 | ) | |||
Payables, accrued expenses and other liabilities | (56.1 | ) | (97.8 | ) | |||
Net cash provided (used) by operating activities | 67.8 | (19.3 | ) | ||||
INVESTING ACTIVITIES | |||||||
Purchase of property, plant and equipment | (49.4 | ) | (20.2 | ) | |||
Other investing activities | 1.1 | 5.9 | |||||
Net cash used by investing activities | (48.3 | ) | (14.3 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from issuance of senior notes | 500.0 | — | |||||
Debt issuance costs | (8.5 | ) | (5.2 | ) | |||
Net proceeds from issuance of common shares | 661.3 | — | |||||
Repurchase of debt | (1,154.0 | ) | — | ||||
Distributions of partnership equity | (8.7 | ) | (28.1 | ) | |||
Repayment of equipment loans | — | (95.6 | ) | ||||
Borrowings under credit facilities | — | 105.0 | |||||
Repayment under credit facilities | — | (105.0 | ) | ||||
Other financing activities | (13.9 | ) | (13.6 | ) | |||
Net cash used by financing activities | (23.8 | ) | (142.5 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 2.4 | (0.9 | ) | ||||
DECREASE IN CASH AND CASH EQUIVALENTS | (1.9 | ) | (177.0 | ) | |||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 323.4 | 285.2 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 321.5 | $ | 108.2 |
Name | Location | Ownership Interest | Operation | Status of Operations | ||||
Northshore | Minnesota | 100.0% | Iron Ore | Active | ||||
United Taconite | Minnesota | 100.0% | Iron Ore | Active | ||||
Tilden | Michigan | 85.0% | Iron Ore | Active | ||||
Empire | Michigan | 79.0% | Iron Ore | Indefinitely Idled | ||||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | Active |
(In Millions) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Remeasurement of short-term intercompany loans | $ | 1.5 | $ | (0.1 | ) | $ | 16.6 | $ | 0.2 | |||||||
Remeasurement of cash and cash equivalents | (0.5 | ) | 0.5 | (1.7 | ) | 1.5 | ||||||||||
Other remeasurement | (1.0 | ) | (0.2 | ) | (1.3 | ) | (2.6 | ) | ||||||||
Net impact of transaction gains and (losses) resulting from remeasurement | — | 0.2 | 13.6 | (0.9 | ) |
(In Millions) | |||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Revenues from product sales and services: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 471.3 | 83 | % | $ | 361.7 | 73 | % | $ | 757.5 | 73 | % | $ | 547.2 | 68 | % | |||||||||||
Asia Pacific Iron Ore | 98.0 | 17 | % | 134.5 | 27 | % | 273.4 | 27 | % | 254.5 | 32 | % | |||||||||||||||
Total revenues from product sales and services | $ | 569.3 | 100 | % | $ | 496.2 | 100 | % | $ | 1,030.9 | 100 | % | $ | 801.7 | 100 | % | |||||||||||
Sales margin: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 144.2 | $ | 70.0 | $ | 192.6 | $ | 83.2 | |||||||||||||||||||
Asia Pacific Iron Ore | 0.9 | 21.5 | 48.2 | 39.2 | |||||||||||||||||||||||
Sales margin | 145.1 | 91.5 | 240.8 | 122.4 | |||||||||||||||||||||||
Other operating expense | (30.5 | ) | (16.8 | ) | (44.3 | ) | (48.0 | ) | |||||||||||||||||||
Other income (expense) | (35.5 | ) | (46.9 | ) | (149.5 | ) | 75.2 | ||||||||||||||||||||
Income from continuing operations before income taxes | $ | 79.1 | $ | 27.8 | $ | 47.0 | $ | 149.6 |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income | $ | 30.1 | $ | 29.5 | $ | 0.3 | $ | 146.3 | |||||||
Less: | |||||||||||||||
Interest expense, net | (31.4 | ) | (50.7 | ) | (74.2 | ) | (107.5 | ) | |||||||
Income tax benefit (expense) | (2.6 | ) | 2.1 | (0.8 | ) | (5.4 | ) | ||||||||
Depreciation, depletion and amortization | (21.6 | ) | (26.9 | ) | (44.8 | ) | (62.1 | ) | |||||||
EBITDA | $ | 85.7 | $ | 105.0 | $ | 120.1 | $ | 321.3 | |||||||
Less: | |||||||||||||||
Gain (loss) on extinguishment/restructuring of debt | (4.9 | ) | 3.6 | (76.8 | ) | 182.4 | |||||||||
Foreign exchange remeasurement | — | 0.2 | 13.6 | (0.9 | ) | ||||||||||
Impact of discontinued operations | (46.4 | ) | (0.4 | ) | (45.9 | ) | 2.1 | ||||||||
Severance and contractor termination costs | — | — | — | (0.1 | ) | ||||||||||
Adjusted EBITDA | $ | 137.0 | $ | 101.6 | $ | 229.2 | $ | 137.8 | |||||||
EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 155.0 | $ | 94.1 | $ | 212.9 | $ | 135.5 | |||||||
Asia Pacific Iron Ore | 1.2 | 26.1 | 52.6 | 48.4 | |||||||||||
Other | (70.5 | ) | (15.2 | ) | (145.4 | ) | 137.4 | ||||||||
Total EBITDA | $ | 85.7 | $ | 105.0 | $ | 120.1 | $ | 321.3 | |||||||
Adjusted EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 161.5 | $ | 97.2 | $ | 225.6 | $ | 143.3 | |||||||
Asia Pacific Iron Ore | 3.0 | 26.5 | 56.8 | 49.5 | |||||||||||
Other | (27.5 | ) | (22.1 | ) | (53.2 | ) | (55.0 | ) | |||||||
Total Adjusted EBITDA | $ | 137.0 | $ | 101.6 | $ | 229.2 | $ | 137.8 |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Depreciation, depletion and amortization: | |||||||||||||||
U.S. Iron Ore | $ | 16.7 | $ | 19.4 | $ | 33.1 | $ | 46.3 | |||||||
Asia Pacific Iron Ore | 3.3 | 6.1 | 8.0 | 12.9 | |||||||||||
Other | 1.6 | 1.4 | 3.7 | 2.9 | |||||||||||
Total depreciation, depletion and amortization | $ | 21.6 | $ | 26.9 | $ | 44.8 | $ | 62.1 | |||||||
Capital additions: | |||||||||||||||
U.S. Iron Ore | $ | 24.6 | $ | 9.2 | $ | 51.7 | $ | 13.7 | |||||||
Asia Pacific Iron Ore | 0.6 | — | 0.8 | — | |||||||||||
Other | — | 2.1 | — | 4.4 | |||||||||||
Total capital additions1 | $ | 25.2 | $ | 11.3 | $ | 52.5 | $ | 18.1 | |||||||
1 Includes cash paid for capital additions of $49.4 million and $20.2 million and an increase in non-cash accruals of $3.1 million and a decrease in non-cash accruals of $2.1 million for the six months ended June 30, 2017 and 2016, respectively. |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
U.S. Iron Ore | $ | 1,525.9 | $ | 1,372.5 | |||
Asia Pacific Iron Ore | 157.7 | 155.1 | |||||
Total segment assets | 1,683.6 | 1,527.6 | |||||
Corporate | 346.5 | 396.3 | |||||
Total assets | $ | 2,030.1 | $ | 1,923.9 |
(In Millions) | |||||||||||||||||||||||
June 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Segment | Finished Goods | Work-in Process | Total Inventory | Finished Goods | Work-in Process | Total Inventory | |||||||||||||||||
U.S. Iron Ore | $ | 238.3 | $ | 14.3 | $ | 252.6 | $ | 124.4 | $ | 12.6 | $ | 137.0 | |||||||||||
Asia Pacific Iron Ore | 22.7 | 12.3 | 35.0 | 23.6 | 17.8 | 41.4 | |||||||||||||||||
Total | $ | 261.0 | $ | 26.6 | $ | 287.6 | $ | 148.0 | $ | 30.4 | $ | 178.4 |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Land rights and mineral rights | $ | 500.7 | $ | 500.5 | |||
Office and information technology | 66.0 | 65.1 | |||||
Buildings | 71.8 | 67.9 | |||||
Mining equipment | 600.1 | 592.2 | |||||
Processing equipment | 621.5 | 552.0 | |||||
Electric power facilities | 54.0 | 49.4 | |||||
Land improvements | 23.8 | 23.5 | |||||
Asset retirement obligation | 19.7 | 19.8 | |||||
Other | 28.7 | 28.1 | |||||
Construction in-progress | 19.8 | 42.8 | |||||
2,006.1 | 1,941.3 | ||||||
Allowance for depreciation and depletion | (1,007.0 | ) | (956.9 | ) | |||
$ | 999.1 | $ | 984.4 |
(In Millions) | ||||||||||||||||||
June 30, 2017 | ||||||||||||||||||
Debt Instrument | Annual Effective Interest Rate | Total Principal Amount | Debt Issuance Costs | Unamortized Discounts | Total Debt | |||||||||||||
Secured Notes | ||||||||||||||||||
$540 Million 8.25% 2020 First Lien Notes | 9.97% | $ | 504.4 | $ | (6.3 | ) | $ | (20.7 | ) | $ | 477.4 | |||||||
Unsecured Notes | ||||||||||||||||||
$400 Million 5.90% 2020 Senior Notes | 5.98% | 88.9 | (0.2 | ) | (0.2 | ) | 88.5 | |||||||||||
$500 Million 4.80% 2020 Senior Notes | 4.83% | 122.4 | (0.3 | ) | (0.1 | ) | 122.0 | |||||||||||
$700 Million 4.875% 2021 Senior Notes | 4.89% | 138.4 | (0.4 | ) | (0.1 | ) | 137.9 | |||||||||||
$500 Million 5.75% 2025 Senior Notes | 5.75% | 500.0 | (8.1 | ) | — | 491.9 | ||||||||||||
$800 Million 6.25% 2040 Senior Notes | 6.34% | 298.4 | (2.5 | ) | (3.4 | ) | 292.5 | |||||||||||
ABL Facility | N/A | 550.0 | N/A | N/A | — | |||||||||||||
Fair Value Adjustment to Interest Rate Hedge | 1.6 | |||||||||||||||||
Long-term debt | $ | 1,611.8 |
(In Millions) | ||||||||||||||||||
December 31, 2016 | ||||||||||||||||||
Debt Instrument | Annual Effective Interest Rate | Total Principal Amount | Debt Issuance Costs | Undiscounted Interest/(Unamortized Discounts) | Total Debt | |||||||||||||
Secured Notes | ||||||||||||||||||
$540 Million 8.25% 2020 First Lien Notes | 9.97% | $ | 540.0 | $ | (8.0 | ) | $ | (25.7 | ) | $ | 506.3 | |||||||
$218.5 Million 8.00% 2020 1.5 Lien Notes | N/A | 218.5 | — | 65.7 | 284.2 | |||||||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | 15.55% | 430.1 | (5.8 | ) | (85.2 | ) | 339.1 | |||||||||||
Unsecured Notes | ||||||||||||||||||
$400 Million 5.90% 2020 Senior Notes | 5.98% | 225.6 | (0.6 | ) | (0.5 | ) | 224.5 | |||||||||||
$500 Million 4.80% 2020 Senior Notes | 4.83% | 236.8 | (0.7 | ) | (0.2 | ) | 235.9 | |||||||||||
$700 Million 4.875% 2021 Senior Notes | 4.89% | 309.4 | (1.0 | ) | (0.2 | ) | 308.2 | |||||||||||
$800 Million 6.25% 2040 Senior Notes | 6.34% | 298.4 | (2.5 | ) | (3.4 | ) | 292.5 | |||||||||||
ABL Facility | N/A | 550.0 | N/A | N/A | — | |||||||||||||
Fair Value Adjustment to Interest Rate Hedge | 1.9 | |||||||||||||||||
Total debt | $ | 2,192.6 | ||||||||||||||||
Less current portion | 17.5 | |||||||||||||||||
Long-term debt | $ | 2,175.1 |
(In Millions) | ||||||||||||
Gain (Loss) on Extinguishment1 | ||||||||||||
Debt Extinguished | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
Secured Notes | ||||||||||||
$540 Million 8.25% 2020 First Lien Notes | $ | 35.6 | $ | (4.9 | ) | $ | (4.9 | ) | ||||
$218.5 Million 8.00% 2020 1.5 Lien Notes | 218.5 | — | 45.1 | |||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | 430.1 | — | (104.5 | ) | ||||||||
Unsecured Notes | ||||||||||||
$400 Million 5.90% 2020 Senior Notes | 136.8 | — | (7.8 | ) | ||||||||
$500 Million 4.80% 2020 Senior Notes | 114.4 | — | (1.9 | ) | ||||||||
$700 Million 4.875% 2021 Senior Notes | 171.0 | — | (2.8 | ) | ||||||||
$ | 1,106.4 | $ | (4.9 | ) | $ | (76.8 | ) | |||||
1 Includes write-off of undiscounted interest, unamortized discounts and debt issuance costs. In addition, this includes premiums paid of $2.9 million and $47.6 million related to the redemption of our notes for the three and six months ended June 30, 2017, respectively. |
(In Millions) | |||
Maturities of Debt | |||
2017 (July 1 - December 31) | $ | — | |
2018 | — | ||
2019 | — | ||
2020 | 715.7 | ||
2021 | 138.4 | ||
2022 | — | ||
2023 and thereafter | 798.4 | ||
Total maturities of debt | $ | 1,652.5 |
(In Millions) | |||||||||||||||
June 30, 2017 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 40.0 | $ | 120.0 | $ | — | $ | 160.0 | |||||||
Derivative assets | — | — | 72.5 | 72.5 | |||||||||||
Total | $ | 40.0 | $ | 120.0 | $ | 72.5 | $ | 232.5 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 20.8 | $ | 20.8 | |||||||
Total | $ | — | $ | — | $ | 20.8 | $ | 20.8 |
(In Millions) | |||||||||||||||
December 31, 2016 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 177.0 | $ | — | $ | — | $ | 177.0 | |||||||
Derivative assets | — | 1.5 | 31.6 | 33.1 | |||||||||||
Total | $ | 177.0 | $ | 1.5 | $ | 31.6 | $ | 210.1 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 0.5 | $ | 0.5 | |||||||
Total | $ | — | $ | — | $ | 0.5 | $ | 0.5 |
Qualitative/Quantitative Information About Level 3 Fair Value Measurements | ||||||||||||
(In Millions) Fair Value at June 30, 2017 | Balance Sheet Location | Valuation Technique | Unobservable Input | Range or Point Estimate (Weighted Average) | ||||||||
Provisional pricing arrangements | $ | 6.1 | Other current assets | Market Approach | Management's Estimate of Platts 62% Price per dry metric ton | $60 - $75 ($72) | ||||||
Market Hot-Rolled Coil Steel Estimate per net ton | $580 - $660 ($634) | |||||||||||
Provisional pricing arrangements | $ | 20.8 | Other current liabilities | Market Approach | Management's Estimate of Platts 62% Price per dry metric ton | $60 - $75 ($72) | ||||||
Customer supply agreements | $ | 66.4 | Other current assets | Market Approach | Customer Hot-Rolled Steel Estimate per net ton | $541 - $630 ($578) | ||||||
Market Hot-Rolled Coil Steel Estimate per net ton | $580 - $660 ($634) |
(In Millions) | |||||||||||||||
Level 3 Assets | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Beginning balance | $ | 59.4 | $ | 9.0 | $ | 31.6 | $ | 7.8 | |||||||
Total gains (losses) | |||||||||||||||
Included in earnings | 53.3 | 34.5 | 95.4 | 45.7 | |||||||||||
Settlements | (40.2 | ) | (17.7 | ) | (54.5 | ) | (27.7 | ) | |||||||
Ending balance - June 30 | $ | 72.5 | $ | 25.8 | $ | 72.5 | $ | 25.8 | |||||||
Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date | $ | 20.1 | $ | 21.6 | $ | 53.3 | $ | 21.9 |
(In Millions) | |||||||||||||||
Level 3 Liabilities | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Beginning balance | $ | (9.1 | ) | $ | (6.2 | ) | $ | (0.5 | ) | $ | (3.4 | ) | |||
Total gains (losses) | |||||||||||||||
Included in earnings | (36.8 | ) | (2.8 | ) | (45.5 | ) | (8.4 | ) | |||||||
Settlements | 25.1 | 6.4 | 25.2 | 9.2 | |||||||||||
Ending balance - June 30 | $ | (20.8 | ) | $ | (2.6 | ) | $ | (20.8 | ) | $ | (2.6 | ) | |||
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date | $ | (11.7 | ) | $ | (0.7 | ) | $ | (20.8 | ) | $ | (2.6 | ) |
(In Millions) | |||||||||||||||||
June 30, 2017 | December 31, 2016 | ||||||||||||||||
Classification | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Long-term debt: | |||||||||||||||||
Secured Notes | |||||||||||||||||
First Senior Lien Notes —$540 million | Level 1 | $ | 477.4 | $ | 550.0 | $ | 506.3 | $ | 595.0 | ||||||||
1.5 Senior Lien Notes —$218.5 million | Level 2 | — | — | 284.2 | 229.5 | ||||||||||||
Second Senior Lien Notes —$544.2 million | Level 1 | — | — | 339.1 | 439.7 | ||||||||||||
Unsecured Notes | |||||||||||||||||
Senior Notes—$500 million | Level 1 | 491.9 | 473.8 | — | — | ||||||||||||
Senior Notes—$400 million | Level 1 | 88.5 | 86.0 | 224.5 | 219.6 | ||||||||||||
Senior Notes—$1.3 billion | Level 1 | 414.5 | 339.7 | 528.4 | 455.8 | ||||||||||||
Senior Notes—$700 million | Level 1 | 137.9 | 131.6 | 308.2 | 283.1 | ||||||||||||
ABL Facility | Level 2 | — | — | — | — | ||||||||||||
Fair value adjustment to interest rate hedge | Level 2 | 1.6 | 1.6 | 1.9 | 1.9 | ||||||||||||
Total long-term debt | $ | 1,611.8 | $ | 1,582.7 | $ | 2,192.6 | $ | 2,224.6 |
(In Millions) | ||||||||||||||||||||
June 30, 2017 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Gains | |||||||||||||||
Assets: | ||||||||||||||||||||
Loans to and accounts receivables from the Canadian Entities | $ | — | $ | — | $ | 50.1 | $ | 50.1 | $ | 1.5 | ||||||||||
Liabilities: | ||||||||||||||||||||
Guarantees | $ | — | $ | — | $ | 38.5 | $ | 38.5 | $ | 1.3 |
(In Millions) | ||||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Gains (Losses) | |||||||||||||||
Assets: | ||||||||||||||||||||
Loans to and accounts receivables from the Canadian Entities | $ | — | $ | — | $ | 48.6 | $ | 48.6 | $ | (17.5 | ) | |||||||||
Liabilities: | ||||||||||||||||||||
Guarantees | $ | — | $ | — | $ | 37.2 | $ | 37.2 | $ | 0.4 |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 4.7 | $ | 4.5 | $ | 9.5 | $ | 9.0 | |||||||
Interest cost | 7.5 | 7.5 | 15.0 | 14.9 | |||||||||||
Expected return on plan assets | (13.6 | ) | (13.7 | ) | (27.1 | ) | (27.4 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.7 | 0.5 | 1.3 | 1.1 | |||||||||||
Net actuarial loss | 5.3 | 5.3 | 10.6 | 10.5 | |||||||||||
Net periodic benefit cost | $ | 4.6 | $ | 4.1 | $ | 9.3 | $ | 8.1 |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 0.5 | $ | 0.4 | $ | 1.0 | $ | 0.9 | |||||||
Interest cost | 2.2 | 2.3 | 4.3 | 4.5 | |||||||||||
Expected return on plan assets | (4.5 | ) | (4.3 | ) | (8.9 | ) | (8.5 | ) | |||||||
Amortization: | |||||||||||||||
Prior service credits | (0.8 | ) | (0.9 | ) | (1.5 | ) | (1.8 | ) | |||||||
Net actuarial loss | 1.3 | 1.4 | 2.5 | 2.8 | |||||||||||
Net periodic benefit credit | $ | (1.3 | ) | $ | (1.1 | ) | $ | (2.6 | ) | $ | (2.1 | ) |
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | Fair Value (Percent of Grant Date Market Price) | |||||||||||
February 21, 2017 | $ | 11.67 | 2.86 | 92.1% | 1.51% | —% | $ | 19.69 | 168.72% | |||||||||
June 26, 2017 | $ | 6.64 | 2.51 | 92.8% | 1.45% | —% | $ | 10.74 | 161.75% |
(In Millions) | |||||||
Capital Leases | Operating Leases | ||||||
2017 (July 1 - December 31) | $ | 11.7 | $ | 3.6 | |||
2018 | 18.9 | 5.8 | |||||
2019 | 10.5 | 2.9 | |||||
2020 | 9.5 | 2.9 | |||||
2021 | 8.8 | 3.0 | |||||
2022 and thereafter | 0.6 | — | |||||
Total minimum lease payments | $ | 60.0 | $ | 18.2 | |||
Amounts representing interest | 10.0 | ||||||
Present value of net minimum lease payments1 | $ | 50.0 | |||||
1 The total is comprised of $17.4 million and $32.6 million classified as Other current liabilities and Other liabilities, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at June 30, 2017. |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Environmental | $ | 2.8 | $ | 2.8 | |||
Mine closure | |||||||
U.S. Iron Ore1 | 193.6 | 187.8 | |||||
Asia Pacific Iron Ore | 17.7 | 16.2 | |||||
Total mine closure | 211.3 | 204.0 | |||||
Total environmental and mine closure obligations | 214.1 | 206.8 | |||||
Less current portion | 12.2 | 12.9 | |||||
Long-term environmental and mine closure obligations | $ | 201.9 | $ | 193.9 | |||
1 U.S. Iron Ore includes our active operating mines, our indefinitely idled Empire mine and a closed mine formerly operating as LTVSMC. |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Asset retirement obligation at beginning of period | $ | 204.0 | $ | 230.4 | |||
Accretion expense | 7.1 | 14.0 | |||||
Remediation payments | (0.8 | ) | (2.2 | ) | |||
Exchange rate changes | 1.0 | (0.2 | ) | ||||
Revision in estimated cash flows | — | (38.0 | ) | ||||
Asset retirement obligation at end of period | $ | 211.3 | $ | 204.0 |
(In Millions) | |||||||||||||||||||||||||
June 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||
Classification | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Permits | Other non-current assets | $ | 78.8 | $ | (25.6 | ) | $ | 53.2 | $ | 78.4 | $ | (24.6 | ) | $ | 53.8 |
(In Millions) | ||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||
June 30, 2017 | December 31, 2016 | June 30, 2017 | December 31, 2016 | |||||||||||||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||
Customer supply agreements | Other current assets | 66.4 | Other current assets | 21.3 | — | — | ||||||||||||||||||
Provisional pricing arrangements | Other current assets | 6.1 | Other current assets | 10.3 | Other current liabilities | 20.8 | Other current liabilities | 0.5 | ||||||||||||||||
Commodity contracts | — | Other current assets | 1.5 | — | — | |||||||||||||||||||
Total derivatives not designated as hedging instruments under ASC 815 | $ | 72.5 | $ | 33.1 | $ | 20.8 | $ | 0.5 |
(In Millions) | ||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivative | Amount of Gain (Loss) Recognized in Income on Derivative | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Customer Supply Agreements | Product revenues | 51.9 | 19.5 | 69.6 | 19.9 | |||||||||||||
Provisional Pricing Arrangements | Product revenues | (35.4 | ) | 1.8 | (19.8 | ) | 0.3 | |||||||||||
Commodity Contracts | Cost of goods sold and operating expenses | — | — | (1.3 | ) | — | ||||||||||||
Total | $ | 16.5 | $ | 21.3 | $ | 48.5 | $ | 20.2 |
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity (Deficit) | Noncontrolling Interest (Deficit) | Total Equity (Deficit) | |||||||||
December 31, 2016 | $ | (1,464.3 | ) | $ | 133.8 | $ | (1,330.5 | ) | |||
Comprehensive loss | |||||||||||
Net income (loss) | 3.7 | (3.4 | ) | 0.3 | |||||||
Other comprehensive income (loss) | 1.9 | (4.6 | ) | (2.7 | ) | ||||||
Total comprehensive income (loss) | 5.6 | (8.0 | ) | (2.4 | ) | ||||||
Issuance of common shares | 661.3 | — | 661.3 | ||||||||
Stock and other incentive plans | 8.3 | — | 8.3 | ||||||||
Distributions to noncontrolling interest | — | (3.4 | ) | (3.4 | ) | ||||||
June 30, 2017 | $ | (789.1 | ) | $ | 122.4 | $ | (666.7 | ) |
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity (Deficit) | Noncontrolling Interest (Deficit) | Total Equity (Deficit) | |||||||||
December 31, 2015 | $ | (1,981.4 | ) | $ | 169.8 | $ | (1,811.6 | ) | |||
Comprehensive income | |||||||||||
Net income | 120.8 | 25.5 | 146.3 | ||||||||
Other comprehensive income | 9.0 | 1.3 | 10.3 | ||||||||
Total comprehensive income | 129.8 | 26.8 | 156.6 | ||||||||
Issuance of common shares | 14.4 | — | 14.4 | ||||||||
Stock and other incentive plans | 6.5 | — | 6.5 | ||||||||
Distributions of partnership equity | — | (41.4 | ) | (41.4 | ) | ||||||
Distributions to noncontrolling interest | — | (3.4 | ) | (3.4 | ) | ||||||
June 30, 2016 | $ | (1,830.7 | ) | $ | 151.8 | $ | (1,678.9 | ) |
(In Millions) | |||||||||||
Changes in Pension and Other Post-Retirement Benefits, net of tax | Unrealized Net Gain (Loss) on Foreign Currency Translation | Accumulated Other Comprehensive Loss | |||||||||
December 31, 2016 | $ | (260.6 | ) | $ | 239.3 | $ | (21.3 | ) | |||
Other comprehensive income (loss) before reclassifications | 3.3 | (12.7 | ) | (9.4 | ) | ||||||
Net loss reclassified from accumulated other comprehensive loss | 6.4 | — | 6.4 | ||||||||
March 31, 2017 | $ | (250.9 | ) | $ | 226.6 | $ | (24.3 | ) | |||
Other comprehensive loss before reclassifications | (0.1 | ) | (1.5 | ) | (1.6 | ) | |||||
Net loss reclassified from accumulated other comprehensive loss | 6.5 | — | 6.5 | ||||||||
June 30, 2017 | $ | (244.5 | ) | $ | 225.1 | $ | (19.4 | ) |
(In Millions) | |||||||||||||||||||
Changes in Pension and Other Post-Retirement Benefits, net of tax | Unrealized Net Gain (Loss) on Securities, net of tax | Unrealized Net Gain (Loss) on Foreign Currency Translation | Net Unrealized Gain (Loss) on Derivative Financial Instruments, net of tax | Accumulated Other Comprehensive Loss | |||||||||||||||
December 31, 2015 | $ | (241.4 | ) | $ | 0.1 | $ | 220.7 | $ | 2.6 | $ | (18.0 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (1.5 | ) | (0.1 | ) | 4.4 | (3.4 | ) | (0.6 | ) | ||||||||||
Net loss reclassified from accumulated other comprehensive loss | 6.3 | — | — | — | 6.3 | ||||||||||||||
March 31, 2016 | $ | (236.6 | ) | $ | — | $ | 225.1 | $ | (0.8 | ) | $ | (12.3 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (0.4 | ) | — | (2.7 | ) | 0.1 | (3.0 | ) | |||||||||||
Net loss reclassified from accumulated other comprehensive loss | 6.3 | — | — | — | 6.3 | ||||||||||||||
June 30, 2016 | $ | (230.7 | ) | $ | — | $ | 222.4 | $ | (0.7 | ) | $ | (9.0 | ) |
(In Millions) | ||||||||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | Amount of (Gain)/Loss Reclassified into Income | Affected Line Item in the Statement of Unaudited Condensed Consolidated Operations | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Amortization of pension and postretirement benefit liability: | ||||||||||||||||||
Prior service credits1 | $ | (0.1 | ) | $ | (0.4 | ) | $ | (0.2 | ) | $ | (0.7 | ) | ||||||
Net actuarial loss1 | 6.6 | 6.7 | 13.1 | 13.3 | ||||||||||||||
Total before taxes | 6.5 | 6.3 | 12.9 | 12.6 | ||||||||||||||
— | — | — | — | Income tax benefit (expense) | ||||||||||||||
Total reclassifications for the period, net of tax | $ | 6.5 | $ | 6.3 | $ | 12.9 | $ | 12.6 | ||||||||||
1 These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (credit). See NOTE 7 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS for further information. |
Mine | Cliffs Natural Resources | ArcelorMittal | U.S. Steel Corporation | ||||||
Empire | 79.0 | % | 21.0 | % | — | ||||
Tilden | 85.0 | % | — | 15.0 | % | ||||
Hibbing | 23.0 | % | 62.3 | % | 14.7 | % |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Product revenues from related parties | $ | 227.5 | $ | 241.6 | $ | 336.9 | $ | 345.0 | |||||||
Total product revenues | 512.0 | 452.8 | 924.8 | 728.4 | |||||||||||
Related party product revenue as a percent of total product revenue | 44.4 | % | 53.4 | % | 36.4 | % | 47.4 | % |
(In Millions) | |||||||||
Balance Sheet Location | June 30, 2017 | December 31, 2016 | |||||||
Amounts due from related parties | Accounts receivable, net | $ | 18.8 | $ | 46.9 | ||||
Customer supply agreements and provisional pricing agreements | Other current assets | 68.0 | 26.8 | ||||||
Amounts due to related parties | Other current liabilities | 15.9 | 8.7 |
(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income from Continuing Operations | $ | 76.5 | $ | 29.9 | $ | 46.2 | $ | 144.2 | |||||||
Loss (Income) from Continuing Operations Attributable to Noncontrolling Interest | 1.7 | (16.7 | ) | 3.4 | (25.5 | ) | |||||||||
Net Income from Continuing Operations Attributable to Cliffs Shareholders | $ | 78.2 | $ | 13.2 | $ | 49.6 | $ | 118.7 | |||||||
Income (Loss) from Discontinued Operations, net of tax | (46.4 | ) | (0.4 | ) | (45.9 | ) | 2.1 | ||||||||
Net Income Attributable to Cliffs Shareholders | $ | 31.8 | $ | 12.8 | $ | 3.7 | $ | 120.8 | |||||||
Weighted Average Number of Shares: | |||||||||||||||
Basic | 296.1 | 182.3 | 280.6 | 177.0 | |||||||||||
Employee Stock Plans | 4.6 | 2.3 | 4.6 | 1.3 | |||||||||||
Diluted | 300.7 | 184.6 | 285.2 | 178.3 | |||||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Basic: | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.07 | $ | 0.18 | $ | 0.67 | |||||||
Discontinued operations | (0.16 | ) | — | (0.16 | ) | 0.01 | |||||||||
$ | 0.10 | $ | 0.07 | $ | 0.02 | $ | 0.68 | ||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Diluted: | |||||||||||||||
Continuing operations | $ | 0.26 | $ | 0.07 | $ | 0.17 | $ | 0.67 | |||||||
Discontinued operations | (0.15 | ) | — | (0.16 | ) | 0.01 | |||||||||
$ | 0.11 | $ | 0.07 | $ | 0.01 | $ | 0.68 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
(In Millions) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | Variance Favorable/ (Unfavorable) | 2017 | 2016 | Variance Favorable/ (Unfavorable) | ||||||||||||||||||
Revenues from product sales and services | $ | 569.3 | $ | 496.2 | $ | 73.1 | $ | 1,030.9 | $ | 801.7 | $ | 229.2 | |||||||||||
Cost of goods sold and operating expenses | (424.2 | ) | (404.7 | ) | (19.5 | ) | (790.1 | ) | (679.3 | ) | (110.8 | ) | |||||||||||
Sales margin | $ | 145.1 | $ | 91.5 | $ | 53.6 | $ | 240.8 | $ | 122.4 | $ | 118.4 | |||||||||||
Sales margin % | 25.5 | % | 18.4 | % | 7.1 | % | 23.4 | % | 15.3 | % | 8.1 | % |
(In Millions) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | Variance Favorable/ (Unfavorable) | 2017 | 2016 | Variance Favorable/ (Unfavorable) | ||||||||||||||||||
Selling, general and administrative expenses | $ | (27.5 | ) | $ | (22.5 | ) | $ | (5.0 | ) | $ | (53.2 | ) | $ | (50.7 | ) | $ | (2.5 | ) | |||||
Miscellaneous - net | (3.0 | ) | 5.7 | (8.7 | ) | 8.9 | 2.7 | 6.2 | |||||||||||||||
$ | (30.5 | ) | $ | (16.8 | ) | $ | (13.7 | ) | $ | (44.3 | ) | $ | (48.0 | ) | $ | 3.7 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | Variance Favorable/ (Unfavorable) | 2017 | 2016 | Variance Favorable/ (Unfavorable) | ||||||||||||||||||
Foreign exchange remeasurement | $ | — | $ | 0.2 | $ | (0.2 | ) | $ | 13.6 | $ | (0.9 | ) | $ | 14.5 | |||||||||
Management and royalty fees | 1.9 | 3.2 | (1.3 | ) | 3.2 | 5.9 | (2.7 | ) | |||||||||||||||
Empire idle costs | (5.7 | ) | — | (5.7 | ) | (12.5 | ) | — | (12.5 | ) | |||||||||||||
Other | 0.8 | 2.3 | (1.5 | ) | 4.6 | (2.3 | ) | 6.9 | |||||||||||||||
$ | (3.0 | ) | $ | 5.7 | $ | (8.7 | ) | $ | 8.9 | $ | 2.7 | $ | 6.2 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | Variance Favorable/ (Unfavorable) | 2017 | 2016 | Variance Favorable/ (Unfavorable) | ||||||||||||||||||
Interest expense, net | $ | (31.4 | ) | $ | (50.7 | ) | $ | 19.3 | $ | (74.2 | ) | $ | (107.5 | ) | $ | 33.3 | |||||||
Gain (loss) on extinguishment/restructuring of debt | (4.9 | ) | 3.6 | (8.5 | ) | (76.8 | ) | 182.4 | (259.2 | ) | |||||||||||||
Other non-operating income | 0.8 | 0.2 | 0.6 | 1.5 | 0.3 | 1.2 | |||||||||||||||||
$ | (35.5 | ) | $ | (46.9 | ) | $ | 11.4 | $ | (149.5 | ) | $ | 75.2 | $ | (224.7 | ) |
(In Millions) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2017 | 2016 | Variance | 2017 | 2016 | Variance | ||||||||||||||||||
Income tax benefit (expense) | $ | (2.6 | ) | $ | 2.1 | $ | (4.7 | ) | $ | (0.8 | ) | $ | (5.4 | ) | $ | 4.6 | |||||||
Effective tax rate | 3.3 | % | (7.6 | )% | 10.9 | % | 1.6 | % | 3.6 | % | (2.0 | )% |
(In Millions) | |||||||||||||
Six Months Ended June 30, | |||||||||||||
2017 | 2016 | ||||||||||||
Tax at U.S. statutory rate of 35% | $ | 16.5 | 35.0 | % | $ | 52.4 | 35.0 | % | |||||
Increases/(Decreases) due to: | |||||||||||||
Percentage depletion | (9.0 | ) | (19.2 | ) | (34.3 | ) | (22.9 | ) | |||||
State taxes | 0.5 | 1.1 | — | — | |||||||||
Impact of foreign operations | (1.3 | ) | (2.8 | ) | 0.6 | 0.4 | |||||||
Income not subject to tax | 0.2 | 0.4 | (6.4 | ) | (4.3 | ) | |||||||
Valuation allowance reversal on current year operations | (6.3 | ) | (13.3 | ) | (9.6 | ) | (6.5 | ) | |||||
Other items - net | — | 0.1 | 2.0 | 1.4 | |||||||||
Provision for income tax and effective income tax rate before discrete items | 0.6 | 1.3 | 4.7 | 3.1 | |||||||||
Discrete Items: | |||||||||||||
Audit settlements | (0.5 | ) | (1.1 | ) | — | — | |||||||
Tax uncertainties | 0.7 | 1.5 | 0.8 | 0.5 | |||||||||
Prior-year adjustments made in current year | — | (0.1 | ) | (0.1 | ) | — | |||||||
Provision for income tax expense and effective income tax rate including discrete items | $ | 0.8 | 1.6 | % | $ | 5.4 | 3.6 | % |
(In Millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income | $ | 30.1 | $ | 29.5 | $ | 0.3 | $ | 146.3 | |||||||
Less: | |||||||||||||||
Interest expense, net | (31.4 | ) | (50.7 | ) | (74.2 | ) | (107.5 | ) | |||||||
Income tax benefit (expense) | (2.6 | ) | 2.1 | (0.8 | ) | (5.4 | ) | ||||||||
Depreciation, depletion and amortization | (21.6 | ) | (26.9 | ) | (44.8 | ) | (62.1 | ) | |||||||
EBITDA | $ | 85.7 | $ | 105.0 | $ | 120.1 | $ | 321.3 | |||||||
Less: | |||||||||||||||
Gain (loss) on extinguishment/restructuring of debt | $ | (4.9 | ) | $ | 3.6 | $ | (76.8 | ) | $ | 182.4 | |||||
Foreign exchange remeasurement | — | 0.2 | 13.6 | (0.9 | ) | ||||||||||
Impact of discontinued operations | (46.4 | ) | (0.4 | ) | (45.9 | ) | 2.1 | ||||||||
Severance and contractor termination costs | — | — | — | (0.1 | ) | ||||||||||
Adjusted EBITDA | $ | 137.0 | $ | 101.6 | $ | 229.2 | $ | 137.8 | |||||||
EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 155.0 | $ | 94.1 | $ | 212.9 | $ | 135.5 | |||||||
Asia Pacific Iron Ore | 1.2 | 26.1 | 52.6 | 48.4 | |||||||||||
Other | (70.5 | ) | (15.2 | ) | (145.4 | ) | 137.4 | ||||||||
Total EBITDA | $ | 85.7 | $ | 105.0 | $ | 120.1 | $ | 321.3 | |||||||
Adjusted EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 161.5 | $ | 97.2 | $ | 225.6 | $ | 143.3 | |||||||
Asia Pacific Iron Ore | 3.0 | 26.5 | 56.8 | 49.5 | |||||||||||
Other | (27.5 | ) | (22.1 | ) | (53.2 | ) | (55.0 | ) | |||||||
Total Adjusted EBITDA | $ | 137.0 | $ | 101.6 | $ | 229.2 | $ | 137.8 |
(In Millions) | ||||||||||||||||||||||||||||
Changes due to: | ||||||||||||||||||||||||||||
Three Months Ended June 30, | Revenue and cost rate | Sales volume | Idle cost/production volume variance | Freight and reimburse-ment | Total change | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Revenues from product sales and services | $ | 471.3 | $ | 361.7 | $ | 87.1 | $ | 7.3 | $ | — | $ | 15.2 | $ | 109.6 | ||||||||||||||
Cost of goods sold and operating expenses | (327.1 | ) | (291.7 | ) | (32.8 | ) | (7.0 | ) | 19.6 | (15.2 | ) | (35.4 | ) | |||||||||||||||
Sales margin | $ | 144.2 | $ | 70.0 | $ | 54.3 | $ | 0.3 | $ | 19.6 | $ | — | $ | 74.2 | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||
Per Ton Information | 2017 | 2016 | Difference | Percent change | ||||||||||||||||||||||||
Realized product revenue rate1 | $ | 96.75 | $ | 77.81 | $ | 18.94 | 24.3 | % | ||||||||||||||||||||
Cash cost of goods sold and operating expense rate1,2 | 59.47 | 56.25 | 3.22 | 5.7 | % | |||||||||||||||||||||||
Depreciation, depletion & amortization | 3.87 | 4.68 | (0.81 | ) | (17.3 | )% | ||||||||||||||||||||||
Total cost of goods sold and operating expenses rate | 63.34 | 60.93 | 2.41 | 4.0 | % | |||||||||||||||||||||||
Sales margin | $ | 33.41 | $ | 16.88 | $ | 16.53 | 97.9 | % | ||||||||||||||||||||
Sales tons3 (In thousands) | 4,310 | 4,146 | ||||||||||||||||||||||||||
Production tons3 (In thousands) | ||||||||||||||||||||||||||||
Total | 6,491 | 5,987 | ||||||||||||||||||||||||||
Cliffs’ share of total | 4,691 | 4,155 | ||||||||||||||||||||||||||
1 Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues and expenses also exclude venture partner cost reimbursements. | ||||||||||||||||||||||||||||
2 Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. See "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements. | ||||||||||||||||||||||||||||
3 Tons are long tons. |
• | An increase in the average year-to-date realized product revenue rate of $18.94 per long ton or 24.3% during the three months ended June 30, 2017, compared to the same period in the previous year, which resulted in an increase of $87.1 million. This is primarily a result of: |
◦ | An increase in Platts 62% Price, which positively affected the realized revenue rate by $11 per long ton or $48 million; and |
◦ | An increase in the average annual daily market price for hot-rolled coil steel, which positively affected the realized revenue rate by $7 per long ton or $30 million. |
• | Higher sales volumes of 164 thousand long tons, which resulted in increased revenue of $7.3 million. |
• | Higher profit sharing and benefit costs of $9 million or $2 per long ton, higher energy rates for natural gas, diesel and electricity of $7 million or $2 per long ton, increased repair costs of $3 million or $1 per long ton and increased royalty costs of $3 million or $1 per long ton; |
• | An unfavorable year-to-date standard cost adjustment as a result of higher overall expenses as discussed above for increased costs of $9 million or $2 per long ton; and |
• | Increased sales volumes of 164 thousand long tons, which resulted in increased costs of $7 million. |
• | Partially offset by decreased costs of $20 million or $5 per long ton due to the idle of the United Taconite and Northshore mines during the prior-year period. |
(In Millions) | ||||||||||||||||||||||||||||
Changes due to: | ||||||||||||||||||||||||||||
Six Months Ended June 30, | Revenue and cost rate | Sales volume | Idle cost/production volume variance | Freight and reimburse-ment | Total change | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Revenues from product sales and services | $ | 757.5 | $ | 547.2 | $ | 77.5 | $ | 104.0 | $ | — | $ | 28.8 | $ | 210.3 | ||||||||||||||
Cost of goods sold and operating expenses | (564.9 | ) | (464.0 | ) | (38.8 | ) | (78.4 | ) | 45.1 | (28.8 | ) | (100.9 | ) | |||||||||||||||
Sales margin | $ | 192.6 | $ | 83.2 | $ | 38.7 | $ | 25.6 | $ | 45.1 | $ | — | $ | 109.4 | ||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||
Per Ton Information | 2017 | 2016 | Difference | Percent change | ||||||||||||||||||||||||
Realized product revenue rate1 | $ | 89.43 | $ | 79.72 | $ | 9.71 | 12.2 | % | ||||||||||||||||||||
Cash cost of goods sold and operating expense rate1,2 | 59.05 | 58.34 | 0.71 | 1.2 | % | |||||||||||||||||||||||
Depreciation, depletion & amortization | 4.46 | 7.65 | (3.19 | ) | (41.7 | )% | ||||||||||||||||||||||
Total cost of goods sold and operating expenses rate | 63.51 | 65.99 | (2.48 | ) | (3.8 | )% | ||||||||||||||||||||||
Sales margin | $ | 25.92 | $ | 13.73 | $ | 12.19 | 88.8 | % | ||||||||||||||||||||
Sales tons3 (In thousands) | 7,428 | 6,056 | ||||||||||||||||||||||||||
Production tons3 (In thousands) | ||||||||||||||||||||||||||||
Total | 12,305 | 10,900 | ||||||||||||||||||||||||||
Cliffs’ share of total | 8,968 | 7,202 | ||||||||||||||||||||||||||
1 Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues and expenses also exclude venture partner cost reimbursements. | ||||||||||||||||||||||||||||
2 Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. See "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements. | ||||||||||||||||||||||||||||
3 Tons are long tons. |
• | Higher sales volumes of 1.4 million long tons, which resulted in increased revenues of $104.0 million primarily due to: |
◦ | Increased demand from a customer during the six months ended June 30, 2017, providing additional sales volume of 1.1 million long tons, following the termination of its contract in the fourth quarter of 2015 that was reinstated and became effective during the first quarter of 2017; |
◦ | Increased demand from a customer during the six months ended June 30, 2017, providing additional sales volume of 1.1 million long tons, compared to the prior-year period when the customer had excess inventory volumes due to its idle of one of its facilities and additional contracted suppliers; and |
◦ | Increased demand from a customer during the six months ended June 30, 2017, providing additional sales volume of 0.4 million long tons, due to the customer's prior-year inventory levels, timing and vessel availability. |
◦ | These increases were offset partially due to engaging in no short-term contracts with two customers during the six months ended June 30, 2017, compared to the prior-year period for a decrease in sales volume of 1.2 million long tons. |
• | The average year-to-date realized product revenue rate increased $9.71 per long ton or 12.2% during the six months ended June 30, 2017, compared to the same period in the previous year, which resulted in an increase of $77.5 million. This is predominantly due to: |
◦ | An increase in Platts 62% Price, which positively affected the realized revenue rate by $8 per long ton or $57 million; |
◦ | An increase in the average annual daily market price and customer pricing for hot-rolled coil steel, which positively affected the realized revenue rate by $6 per long ton or $48 million; and |
◦ | Higher pellet premiums, which positively affected the realized revenue rate by $3 per long ton or $24 million. |
◦ | These increases were offset partially by carryover pricing impacts and changes in customer and contract mix, which negatively affected the realized revenue rate by $7 per long ton or $52 million. |
• | Increased sales volumes as discussed above which resulted in increased costs of $78.4 million period-over-period; and |
• | Higher profit sharing and benefit costs of $15 million or $2 per long ton, higher energy rates for natural gas, diesel and electricity of $12 million or $2 per long ton, increased repair costs of $6 million or $1 per long ton and increased royalty costs of $5 million or $1 per long ton. |
• | Partially offset by decreased idle costs of $45.1 million or $6 per long ton due to the idle of the United Taconite and Northshore mines during the prior-year period. |
(In Millions) | ||||||||||||||||||||||||||||
Change due to: | ||||||||||||||||||||||||||||
Three Months Ended June 30, | Revenue and cost rate | Sales volume | Exchange rate | Freight and reimburse-ment | Total change | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Revenues from product sales and services | $ | 98.0 | $ | 134.5 | $ | (6.5 | ) | $ | (27.9 | ) | $ | (0.8 | ) | $ | (1.3 | ) | $ | (36.5 | ) | |||||||||
Cost of goods sold and operating expenses | (97.1 | ) | (113.0 | ) | (7.3 | ) | 22.5 | (0.6 | ) | 1.3 | 15.9 | |||||||||||||||||
Sales margin | $ | 0.9 | $ | 21.5 | $ | (13.8 | ) | $ | (5.4 | ) | $ | (1.4 | ) | $ | — | $ | (20.6 | ) | ||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||
Per Ton Information | 2017 | 2016 | Difference | Percent change | ||||||||||||||||||||||||
Realized product revenue rate1 | $ | 38.23 | $ | 41.96 | $ | (3.73 | ) | (8.9 | )% | |||||||||||||||||||
Cash cost of goods sold and operating expense rate1,2 | 36.52 | 33.06 | 3.46 | 10.5 | % | |||||||||||||||||||||||
Depreciation, depletion & amortization | 1.33 | 1.97 | (0.64 | ) | (32.5 | )% | ||||||||||||||||||||||
Total cost of goods sold and operating expenses rate | 37.85 | 35.03 | 2.82 | 8.1 | % | |||||||||||||||||||||||
Sales margin | $ | 0.38 | $ | 6.93 | $ | (6.55 | ) | (94.5 | )% | |||||||||||||||||||
Sales tons3 (In thousands) | 2,485 | 3,103 | ||||||||||||||||||||||||||
Production tons3 (In thousands) | 2,762 | 2,800 | ||||||||||||||||||||||||||
1 The information above excludes revenues and expenses related to freight, which are offsetting and have no impact on sales margin. | ||||||||||||||||||||||||||||
2 Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. See "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements. | ||||||||||||||||||||||||||||
3 Tons are metric tons. |
• | Decreased sales volume of 618 thousand metric tons, or 19.9%, to 2.5 million metric tons in the second quarter of 2017 compared to the prior-year period. The decrease in tons sold resulted in decreased revenue of $27.9 million for the three months ended June 30, 2016 and was due to fewer shipments during the quarter, as a result of the timing of shipments and market conditions, which resulted in the termination of certain spot sales. |
• | Decreased average year-to-date realized product revenue of $3.73 per metric ton or 8.9% during the three months ended June 30, 2017, compared to the same period in the previous year, which resulted in a decrease of $7.3 million, including the impact of foreign exchange. This decrease is a result of: |
◦ | A decrease in revenue rate of $9 per metric ton or $22 million due to price and quality adjustments to meet market conditions and to compensate for varying quality ores and a reduction in iron content; and |
◦ | Higher average Australia to Asia freight rates in the second quarter of 2017 compared to the prior-year period, which is a component in the formula pricing, unfavorably affected the revenue rate by $4 per metric ton or $9 million. |
◦ | Partially offset by an increase in the Platts 62% Price, which positively affected the realized revenue rate by $7 per metric ton or $17 million; and |
◦ | Favorable net timing of contract settlements primarily due to favorable lag pricing compared to the prior year positively affecting the realized revenue rate by $3 per metric ton or $8 million. |
• | Decreased sales volume of 618 thousand metric tons as discussed above decreased costs by $22.5 million. |
• | Partially offset by an increase in production costs of $7.3 million or $3 per metric ton due to increased mining costs, driven by a change in the overall operating plan resulting in a higher strip ratio. |
(In Millions) | ||||||||||||||||||||||||||||
Change due to: | ||||||||||||||||||||||||||||
Six Months Ended June 30, | Revenue and cost rate | Sales volume | Exchange rate | Freight and reimburse-ment | Total change | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||||
Revenues from product sales and services | $ | 273.4 | $ | 254.5 | $ | 32.9 | $ | (16.9 | ) | $ | (1.1 | ) | $ | 4.0 | $ | 18.9 | ||||||||||||
Cost of goods sold and operating expenses | (225.2 | ) | (215.3 | ) | (13.4 | ) | 13.8 | (6.3 | ) | (4.0 | ) | (9.9 | ) | |||||||||||||||
Sales margin | $ | 48.2 | $ | 39.2 | $ | 19.5 | $ | (3.1 | ) | $ | (7.4 | ) | $ | — | $ | 9.0 | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||
Per Ton Information | 2017 | 2016 | Difference | Percent change | ||||||||||||||||||||||||
Realized product revenue rate1 | $ | 47.11 | $ | 41.58 | $ | 5.53 | 13.3 | % | ||||||||||||||||||||
Cash cost of goods sold and operating expense rate1,2 | 36.94 | 32.76 | 4.18 | 12.8 | % | |||||||||||||||||||||||
Depreciation, depletion & amortization | 1.45 | 2.18 | (0.73 | ) | (33.5 | )% | ||||||||||||||||||||||
Total cost of goods sold and operating expenses rate | 38.39 | 34.94 | 3.45 | 9.9 | % | |||||||||||||||||||||||
Sales margin | $ | 8.72 | $ | 6.64 | $ | 2.08 | 31.3 | % | ||||||||||||||||||||
Sales tons3 (In thousands) | 5,528 | 5,906 | ||||||||||||||||||||||||||
Production tons3 (In thousands) | 5,433 | 5,607 | ||||||||||||||||||||||||||
1 The information above excludes revenues and expenses related to freight, which are offsetting and have no impact on sales margin. | ||||||||||||||||||||||||||||
2 Cash cost of goods sold and operating expense rate is a non-GAAP financial measure. See "Non-GAAP Reconciliation" for reconciliation in dollars back to our consolidated financial statements. | ||||||||||||||||||||||||||||
3 Tons are metric tons. |
• | An increase in the average year-to-date realized product revenue rate of $5.53 per metric ton or 13.3% during the six months ended June 30, 2017, compared to the same period in the previous year, which resulted in an increase of $31.8 million, including the impact of foreign exchange. This increase is predominantly a result of: |
◦ | An increase in the Platts 62% Price which positively affected the realized revenue rate by $21 per metric ton or $118 million; |
◦ | Partially offset by a decrease in revenue rate of $10 per metric ton or $56 million due to price adjustments to meet market competition to compensate for varying quality ores and a reduction in iron content; |
◦ | Higher average Australia to Asia freight rates during the first six months of 2017 compared to the prior-year period, which is a component in the formula pricing, unfavorably affected the revenue rate by $3 per metric ton or $17 million. |
• | Decreased sales volume of 378 thousand metric tons, or 6.4%, to 5.5 million metric tons during the six months ended June 30, 2017 compared to the prior-year period. The decrease in tons sold resulted in decreased revenue of $16.9 million due to fewer shipments as a result of timing and market conditions during the six months ended June 30, 2017 compared to the prior-year period. |
• | An increase in production costs of $13.4 million or $2 per metric ton due to increased mining costs driven by a higher strip ratio, partially offset by reductions in rail volumes due to increased port inventory levels at the beginning of the period; and |
• | Unfavorable foreign exchange rate variances of $6.3 million or $1 per metric ton. |
• | Partially offset by a decrease in sales volume of 378 thousand metric tons as discussed above which decreased costs by $13.8 million; |
(In Millions) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Cash and cash equivalents | $ | 321.5 | $ | 323.4 | |||
Available borrowing base on ABL Facility1 | 296.6 | 333.0 | |||||
ABL Facility loans drawn | — | — | |||||
Letter of credit obligations and other commitments | (82.5 | ) | (106.0 | ) | |||
Borrowing capacity available | $ | 214.1 | $ | 227.0 | |||
1 The ABL Facility has a maximum borrowing base of $550 million, determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment. |
2017 Outlook Summary | ||||
Per Sales Ton Information | U.S. Iron Ore1 | Asia Pacific Iron Ore2 | ||
Cost of goods sold and operating expense rate | $70 - $75 | $37 - $42 | ||
Less: | ||||
Freight and venture partners' cost reimbursements expense rate3 | $11 | $2 | ||
Depreciation, depletion & amortization rate | $4 | $1 | ||
Cash cost of goods sold and operating expense rate | $55 - $60 | $34 - $39 | ||
Sales volume (million tons) | 19.0 | 11.0 | ||
Production volume (million tons) | 19.0 | 11.5 | ||
1 U.S. Iron Ore tons are reported in long tons of pellets. | ||||
2 Asia Pacific Iron Ore tons are reported in metric tons of lump and fines. | ||||
3 The freight and venture partners' cost reimbursements have offsetting amounts in revenue and have no impact on sales margin. |
(In Millions) | ||||
Year Ending December 31, | ||||
2017 | ||||
Net Income | $ | 310.0 | ||
Less: | ||||
Interest expense, net | (135.0 | ) | ||
Income tax expense | (0.9 | ) | ||
Depreciation, depletion and amortization | (95.0 | ) | ||
EBITDA | $ | 540.9 | ||
Less*: | ||||
Impact of discontinued operations | $ | (45.9 | ) | |
Loss on extinguishment/restructuring of debt | (76.8 | ) | ||
Foreign exchange remeasurement | 13.6 | |||
Adjusted EBITDA | $ | 650.0 | ||
*Adjustments to EBITDA are unpredictable by nature and thus cannot be forecasted beyond June 30, 2017. |
• | uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply or imported products, the impact of any reduced barriers to trade, the outcomes of recently filed and forthcoming trade cases, reduced market demand and any change to the economic growth rate in China; |
• | continued volatility of iron ore and steel prices and other trends, including the supply approach of the major iron ore producers, affecting our financial condition, results of operations or future prospects, specifically the impact of price-adjustment factors on our sales contracts; |
• | our level of indebtedness could limit cash flow available to fund working capital, capital expenditures, acquisitions and other general corporate purposes or ongoing needs of our business; |
• | availability of capital and our ability to maintain adequate liquidity; |
• | our ability to successfully conclude the CCAA process in a manner that minimizes cash outflows and associated liabilities; |
• | the impact of our customers reducing their steel production due to increased market share of steel produced using other methods or lighter-weight steel alternatives; |
• | uncertainty relating to restructurings in the steel industry and/or affecting the steel industry; |
• | the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration; |
• | the ability of our customers and joint venture partners to meet their obligations to us on a timely basis or at all; |
• | problems or uncertainties with productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry; |
• | our ability to reach agreement with our customers regarding any modifications to sales contract provisions, renewals or new arrangements; |
• | our actual levels of capital spending; |
• | our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele; |
• | our actual economic iron ore reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve; |
• | our ability to cost-effectively achieve planned production rates or levels, including at our HBI production plant; |
• | our ability to successfully identify and consummate any strategic investments or development projects, including our HBI production plant; |
• | our ability to obtain the investments necessary for our HBI production plant; |
• | changes in sales volume or mix; |
• | events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets, as well as any resulting impairment charges; |
• | our ability to maintain appropriate relations with unions and employees; |
• | impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory changes; |
• | uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy, equipment failures and other unexpected events; |
• | adverse changes in currency values, currency exchange rates, interest rates and tax laws; |
• | risks related to international operations; and |
• | the potential existence of significant deficiencies or material weakness in our internal control over financial reporting. |
(In Millions) | ||||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
U.S. Iron Ore | Asia Pacific Iron Ore | Total | U.S. Iron Ore | Asia Pacific Iron Ore | Total | |||||||||||||||||||
Cost of goods sold and operating expenses | $ | (327.1 | ) | $ | (97.1 | ) | $ | (424.2 | ) | $ | (291.7 | ) | $ | (113.0 | ) | $ | (404.7 | ) | ||||||
Less: | ||||||||||||||||||||||||
Freight and reimbursements | (54.3 | ) | (3.0 | ) | (57.3 | ) | (39.1 | ) | (4.3 | ) | (43.4 | ) | ||||||||||||
Depreciation, depletion & amortization | (16.7 | ) | (3.3 | ) | (20.0 | ) | (19.4 | ) | (6.1 | ) | (25.5 | ) | ||||||||||||
Cash cost of goods sold and operating expenses | $ | (256.1 | ) | $ | (90.8 | ) | $ | (346.9 | ) | $ | (233.2 | ) | $ | (102.6 | ) | $ | (335.8 | ) |
(In Millions) | ||||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
U.S. Iron Ore | Asia Pacific Iron Ore | Total | U.S. Iron Ore | Asia Pacific Iron Ore | Total | |||||||||||||||||||
Cost of goods sold and operating expenses | $ | (564.9 | ) | $ | (225.2 | ) | $ | (790.1 | ) | $ | (464.0 | ) | $ | (215.3 | ) | $ | (679.3 | ) | ||||||
Less: | ||||||||||||||||||||||||
Freight and reimbursements | (93.2 | ) | (13.0 | ) | (106.2 | ) | (64.4 | ) | (8.9 | ) | (73.3 | ) | ||||||||||||
Depreciation, depletion & amortization | (33.1 | ) | (8.0 | ) | (41.1 | ) | (46.3 | ) | (12.9 | ) | (59.2 | ) | ||||||||||||
Cash cost of goods sold and operating expenses | $ | (438.6 | ) | $ | (204.2 | ) | $ | (642.8 | ) | $ | (353.3 | ) | $ | (193.5 | ) | $ | (546.8 | ) |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares (or Units) Purchased1 | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs | |||||||||
April 1 - 30, 2017 | 1,077 | $ | 8.06 | — | $ | — | |||||||
May 1 - 31, 2017 | — | $ | — | — | $ | — | |||||||
June 1 - 30, 2017 | 9,590 | $ | 5.69 | — | $ | — | |||||||
10,667 | $ | 5.93 | — | $ | — | ||||||||
1 These shares were delivered to us to satisfy tax withholding obligations due upon the vesting or payment of stock awards. |
Item 4. | Mine Safety Disclosures |
Item 6. | Exhibits |
(a) | List of Exhibits — Refer to Exhibit Index on pg. 58. |
CLIFFS NATURAL RESOURCES INC. | |||||||
By: | /s/ R. Christopher Cebula | ||||||
Name: | R. Christopher Cebula | ||||||
Title: | Vice President, Corporate Controller & Chief Accounting Officer | ||||||
Date: | July 27, 2017 |
Exhibit Number | Exhibit | |
3.1 | Amendment to Third Amended Articles of Incorporation of Cliffs Natural Resources Inc. (filed as Exhibit 3.1 to Cliffs’ Form 8-K on April 27, 2017 and incorporated herein by reference | |
10.1 | Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan (filed as Exhibit 10.1 to Cliffs’ Form 8-K on April 27, 2017 and incorporated herein by reference | |
10.2 | Cliffs Natural Resources Inc. 2017 Executive Management Performance Incentive Plan (filed as Exhibit 10.2 to Cliffs’ Form 8-K on April 27, 2017 and incorporated herein by reference | |
* Form of Cliffs Natural Resources Inc. 2015 Equity and Incentive Compensation Plan, as Amended, Performance Share Award Memorandum and Performance Share Award Agreement (filed herewith) | ||
* Form of Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan Performance Share Award Memorandum and Performance Share Award Agreement (filed herewith) | ||
* Form of Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan Restricted Stock Unit Award Memorandum and Restricted Stock Unit Award Agreement (filed 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 July 27, 2017 (filed herewith) | ||
Certification Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed and dated by Timothy K. Flanagan as of July 27, 2017 (filed herewith) | ||
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Lourenco Goncalves, Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc., as of July 27, 2017 (filed herewith) | ||
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Timothy K. Flanagan, Executive Vice President, Chief Financial Officer & Treasurer of Cliffs Natural Resources Inc., as of July 27, 2017 (filed herewith) | ||
Mine Safety Disclosures (filed herewith) | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Indicates management contract or other compensatory arrangement. |
Employee: | PARTICIPANT NAME | |
Date of Grant: | GRANT DATE | |
Number of Shares Subject to Award: | XXXX | |
Performance Metric: | Relative Total Shareholder Return | |
Incentive Period: | XXXXX - XXXXX |
(b) | The grant of the Performance Shares is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in lieu of Performance Shares, even if Performance Shares have been granted in the past; |
(c) | All decisions with respect to future Performance Shares or other grants, if any, will be at the sole discretion of the Company; |
(d) | The Participant’s participation in the Plan is voluntary; |
(e) | The Performance Share award and the Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company or any Subsidiary and shall not interfere with the ability of the Company, or any Subsidiary, as applicable, to terminate the Participant’s employment or service relationship (if any); |
(f) | The future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty; |
(g) | No claim or entitlement to compensation or damages shall arise from forfeiture of any Performance Shares resulting from the Participant ceasing to provide employment or other services to the Company or a Subsidiary (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and in consideration of the grant of the Performance Shares to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company or any of its Subsidiaries, and the Participant waives his or her ability, if any, to bring |
(h) | Neither the Plan nor the Performance Shares shall be construed to create an employment relationship where any employment relationship did not otherwise already exist; |
(i) | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying Shares. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Performance Shares; |
(j) | The Performance Shares and the Shares subject to the Performance Shares, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; |
(k) | The Company reserves the right to impose other requirements on participation in the Performance Shares and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or other applicable rules or facilitate the administration of the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing; and |
(l) | The Performance Shares and any related benefit or compensation under this Agreement is subject to the Company's Clawback Policy (or any other applicable recoupment, recapture, clawback or recovery policy of the Company as adopted by the Board or the Committee and in effect from time to time), a copy of which is available upon request. |
(m) | Notwithstanding anything in this Agreement to the contrary, the Participant acknowledges and agrees that this Performance Share Award, this Agreement and any related benefits or compensation under this Agreement are subject to the terms and conditions of the Company’s clawback policy (if any) as may be in effect from time to time specifically to implement Section 10D of the Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Shares may be traded) (the “Compensation Recovery Policy”), and that applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. |
1. | If the stock is listed on an exchange in the U.S. or Canada, then the value on such exchange will be used; |
2. | Otherwise, if the stock is traded in the U.S. as an American Depositary Receipt (“ADR”), then the value of the ADR will be used; or |
3. | Otherwise, the value on the exchange in the country where the company is headquartered will be used. |
Performance Level | ||||
Performance Factor | Below Threshold | Threshold | Target | Maximum |
Relative TSR | less than 25th percentile | 25th percentile | 50th percentile | 75th or greater percentile |
Payout For Relative TSR | 0% | 50% | 100% | 200% |
1. | The Total Shareholder Return as defined in Section 1.8 of these terms and conditions for the Incentive Period for the Company shall be compared to the Total Shareholder Return for each of the entities within the Peer Group for the Incentive Period. The results shall be ranked to determine the Company’s Relative Total Shareholder Return percentile ranking compared to the Peer Group. |
2. | The Company’s Relative Total Shareholder Return for the Incentive Period shall be compared to the Relative Total Shareholder Return performance target range established for the Incentive Period. |
3. | The Relative Total Shareholder Return performance target range has been established for the XXXX - XXXX Incentive Period as follows: |
Performance Level | XXXX - XXXX Relative Total Shareholder Return Percentile Ranking | |
Maximum | 75th Percentile | |
Target | 50th Percentile | |
Threshold | 25th Percentile |
PARTICIPANT NAME | ACCEPTANCE DATE | |
Participant Name | Date | |
ELECTRONIC SIGNATURE | ||
Participant Signature |
Employee: | PARTICIPANT NAME | |
Date of Grant: | XXXX | |
Number of Shares Subject to Award: | XXXX | |
Performance Metric: | Relative Total Shareholder Return | |
Incentive Period: | XXXX - XXXX |
(a) | The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(b) | The grant of the Performance Shares is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in lieu of Performance Shares, even if Performance Shares have been granted in the past; |
(c) | All decisions with respect to future Performance Shares or other grants, if any, will be at the sole discretion of the Company; |
(d) | The Participant’s participation in the Plan is voluntary; |
(e) | The Performance Share award and the Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company or any Subsidiary and shall not interfere with the ability of the Company, or any Subsidiary, as applicable, to terminate the Participant’s employment or service relationship (if any); |
(f) | The future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty; |
(g) | No claim or entitlement to compensation or damages shall arise from forfeiture of any Performance Shares resulting from the Participant ceasing to provide employment or other services to the Company or a Subsidiary (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and in consideration of the grant of the Performance Shares to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company or any of its Subsidiaries, and the Participant waives his or her ability, if any, to bring any such claim, and releases the Company and its Subsidiaries from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; |
(h) | Neither the Plan nor the Performance Shares shall be construed to create an employment relationship where any employment relationship did not otherwise already exist; |
(i) | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying Shares. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Performance Shares; |
(j) | The Performance Shares and the Shares subject to the Performance Shares, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; |
(k) | The Company reserves the right to impose other requirements on participation in the Performance Shares and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or other applicable rules or facilitate the administration of the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing; and |
(l) | The Performance Shares and any related benefit or compensation under this Agreement is subject to the Company's Clawback Policy (or any other applicable recoupment, recapture, clawback or recovery policy of the Company as adopted by the Board or the Committee and in effect from time to time), a copy of which is available upon request. |
(m) | Notwithstanding anything in this Agreement to the contrary, the Participant acknowledges and agrees that this Performance Share Award, this Agreement and any related benefits or compensation under this Agreement are subject to the terms and conditions of the Company’s clawback policy (if any) as may be in effect from time to time specifically to implement Section 10D of the Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Shares may be traded) (the “Compensation Recovery Policy”), and that applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. |
1. | If the stock is listed on an exchange in the U.S. or Canada, then the value on such exchange will be used; |
2. | Otherwise, if the stock is traded in the U.S. as an American Depositary Receipt (“ADR”), then the value of the ADR will be used; or |
3. | Otherwise, the value on the exchange in the country where the company is headquartered will be used. |
Performance Level | ||||
Performance Factor | Below Threshold | Threshold | Target | Maximum |
Relative TSR | less than 25th percentile | 25th percentile | 50th percentile | 75th or greater percentile |
Payout For Relative TSR | 0% | 50% | 100% | 200% |
1. | The Total Shareholder Return as defined in Section 1.8 of these terms and conditions for the Incentive Period for the Company shall be compared to the Total Shareholder Return for each of the entities within the Peer Group for the Incentive Period. The results shall be ranked to determine the Company’s Relative Total Shareholder Return percentile ranking compared to the Peer Group. |
2. | The Company’s Relative Total Shareholder Return for the Incentive Period shall be compared to the Relative Total Shareholder Return performance target range established for the Incentive Period. |
3. | The Relative Total Shareholder Return performance target range has been established for the Incentive Period as follows: |
Performance Level | XXXX - XXXX Relative Total Shareholder Return Percentile Ranking | |
Maximum | 75th Percentile | |
Target | 50th Percentile | |
Threshold | 25th Percentile |
PARTICIPANT NAME | ACCEPTANCE DATE | |
Participant Name | Date | |
ELECTRONIC SIGNATURE | ||
Participant Signature |
Employee: | PARTICIPANT NAME | |
Date of Grant: | XXXX | |
Grant Price: | $XXXX | |
Number of Restricted Stock Units (Common Shares) Subject to Award: | XXXX | |
Vesting Date: | XXXX |
(b) | The grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past; |
(c) | All decisions with respect to future Restricted Stock Units or other grants, if any, will be at the sole discretion of the Company; |
(d) | The Participant’s participation in the Plan is voluntary; |
(e) | The Restricted Stock Unit Award and the Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company or any Subsidiary and shall not interfere with the ability of the Company, or any Subsidiary, as applicable, to terminate the Participant’s employment or service relationship (if any); |
(f) | The future value of the underlying Common Shares is unknown, indeterminable and cannot be predicted with certainty; |
(g) | No claim or entitlement to compensation or damages shall arise from forfeiture of any Restricted Stock Units resulting from the Participant ceasing to provide employment or other services to the Company or a Subsidiary (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment agreement, if any), and in consideration of the grant of the Restricted Stock Units to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the |
(h) | Neither the Plan nor the Restricted Stock Units shall be construed to create an employment relationship where any employment relationship did not otherwise already exist; |
(i) | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying Common Shares. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Restricted Stock Units; |
(j) | The Restricted Stock Units and the Common Shares subject to the Restricted Stock Units, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; and |
(k) | The Company reserves the right to impose other requirements on participation in the Restricted Stock Units and on any Common Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or other applicable rules or facilitate the administration of the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
PARTICIPANT NAME | ACCEPTANCE DATE | |
Participant Name | Date | |
ELECTRONIC SIGNATURE | ||
Participant Signature |
1. | I have reviewed this quarterly report on Form 10-Q of Cliffs Natural Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | July 27, 2017 | By: | /s/ Lourenco Goncalves | ||
Lourenco Goncalves | |||||
Chairman, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Cliffs Natural Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | July 27, 2017 | By: | /s/ Timothy K. Flanagan | ||
Timothy K. Flanagan | |||||
Executive Vice President, Chief Financial Officer & Treasurer |
(1) | The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q. |
Date: | July 27, 2017 | ||
By: | /s/ Lourenco Goncalves | ||
Lourenco Goncalves | |||
Chairman, President and Chief Executive Officer |
(1) | The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-Q. |
Date: | July 27, 2017 | ||
By: | /s/ Timothy K. Flanagan | ||
Timothy K. Flanagan | |||
Executive Vice President, Chief Financial Officer & Treasurer |
(A) | The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the FMSH Act (30 U.S.C. 814) for which the operator received a citation from MSHA; |
(B) | The total number of orders issued under section 104(b) of the FMSH Act (30 U.S.C. 814(b)); |
(C) | The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the FMSH Act (30 U.S.C. 814(d)); |
(D) | The total number of imminent danger orders issued under section 107(a) of the FMSH Act (30 U.S.C. 817(a)); |
(E) | The total dollar value of proposed assessments from MSHA under the FMSH Act (30 U.S.C. 801 et seq.); |
(F) | Legal actions pending before the Federal Mine Safety and Health Review Commission involving such coal or other mine as of the last day of the period; |
(G) | Legal actions initiated before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period; and |
(H) | Legal actions resolved before the Federal Mine Safety and Health Review Commission involving such coal or other mine during the period. |
Three Months Ended June 30, 2017 | ||||||||||||||||||||||||||
(A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | |||||||||||||||||||
Mine Name/ MSHA ID No. | Operation | Section 104 S&S Citations | Section 104(b) Orders | Section 104(d) Citations & Orders | Section 107(a) Orders | Total Dollar Value of MSHA Proposed Assessments (1) | Legal Actions Pending as of Last Day of Period | Legal Actions Initiated During Period | Legal Actions Resolved During Period | |||||||||||||||||
Tilden / 2000422 | Iron Ore | 21 | — | — | — | $ | 36,349 | 22 | (2) | 3 | 1 | |||||||||||||||
Empire / 2001012 | Iron Ore | — | — | — | — | — | — | — | 8 | |||||||||||||||||
Northshore Plant / 2100831 | Iron Ore | — | — | — | — | — | 7 | (3) | 5 | — | ||||||||||||||||
Northshore Mine / 2100209 | Iron Ore | — | — | — | — | — | — | — | — | |||||||||||||||||
Hibbing / 2101600 | Iron Ore | 9 | — | — | — | 72,154 | 8 | (4) | 2 | — | ||||||||||||||||
United Taconite Plant / 2103404 | Iron Ore | 6 | — | — | — | 16,833 | 5 | (5) | 1 | — | ||||||||||||||||
United Taconite Mine / 2103403 | Iron Ore | — | — | — | — | — | 1 | (6) | — | — |
(1) | Amounts included under the heading “Total Dollar Value of MSHA Proposed Assessments” are the total dollar amounts for proposed assessments received from MSHA for the three months ended June 30, 2017. |
(2) | This number consists of 11 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules, 10 pending legal actions related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules, and 1 pending legal action related to complaints of discharge, discrimination, or interference referenced in Subpart E of FMSH Act's procedural rules. |
(3) | This number consists of 7 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules. |
(4) | This number consists of 7 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules, and 1 pending legal action related to contests of citations and orders referenced in Subpart B of FMSH Act's procedural rules. |
(5) | This number consists of 5 pending legal actions related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules. |
(6) | This number consists of 1 pending legal action related to contests of proposed penalties referenced in Subpart C of FMSH Act's procedural rules. |
Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2017 |
Jul. 24, 2017 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | CLIFFS NATURAL RESOURCES INC. | |
Entity Central Index Key | 0000764065 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 296,506,003 | |
Trading Symbol | clf |
Statements Of Condensed Consolidated Financial Position (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Class of Stock [Line Items] | ||
Preferred stock, par value | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0.125 | $ 0.125 |
Common shares, authorized (in shares) | 600,000,000 | 400,000,000 |
Common shares, issued (in shares) | 301,886,794 | 238,636,794 |
Common shares, outstanding | 296,496,321 | 233,074,091 |
Common shares in treasury | 5,390,473 | 5,562,703 |
Preferred Class A [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Cumulative Mandatory Convertible | 7.00% | 7.00% |
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | $ 1,000 |
Preferred Shares, Issued and Outstanding, Shares | 0 | 0 |
Preferred Class B [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Statements Of Condensed Consolidated Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS | $ 31.8 | $ 12.8 | $ 3.7 | $ 120.8 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Changes in pension and other post-retirement benefits, net of tax | 6.7 | 6.5 | 11.4 | 11.9 |
Unrealized net gain (loss) on foreign currency translation | (1.4) | (2.7) | (14.1) | 1.7 |
Unrealized net gain (loss) on derivative financial instruments, net of tax | 0.0 | 0.2 | 0.0 | (3.3) |
OTHER COMPREHENSIVE INCOME (LOSS) | 5.3 | 4.0 | (2.7) | 10.3 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 0.4 | 0.7 | (4.6) | 1.3 |
Other comprehensive income (loss) | $ 36.7 | $ 16.1 | $ 5.6 | $ 129.8 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with SEC rules and regulations and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of results to be expected for the year ending December 31, 2017 or any other future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2016. We report our results from continuing operations in two reportable segments: U.S. Iron Ore and Asia Pacific Iron Ore. Basis of Consolidation The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned and majority-owned subsidiaries, including the following operations as of June 30, 2017:
Intercompany transactions and balances are eliminated upon consolidation. Equity Method Investments Our 23% ownership interest in Hibbing is recorded as an equity method investment. As of June 30, 2017 and December 31, 2016, our investment in Hibbing was $6.5 million and $8.7 million, respectively, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position. Foreign Currency Our financial statements are prepared with the U.S. dollar as the reporting currency. The functional currency of our Australian subsidiaries is the Australian dollar. The functional currency of all other international subsidiaries is the U.S. dollar. The financial statements of our Australian subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for revenues, expenses, gains and losses. Translation adjustments are recorded as Accumulated other comprehensive loss. Income taxes generally are not provided for foreign currency translation adjustments. To the extent that monetary assets and liabilities, including short-term intercompany loans, are recorded in a currency other than the functional currency, these amounts are remeasured each reporting period, with the resulting gain or loss being recorded in the Statements of Unaudited Condensed Consolidated Operations. Transaction gains and losses resulting from remeasurement of short-term intercompany loans are included in Miscellaneous - net in the Statements of Unaudited Condensed Consolidated Operations. The following represents the transaction gains and losses resulting from remeasurement for the three and six months ended June 30, 2017 and 2016:
Significant Accounting Policies A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended December 31, 2016 included in our Annual Report on Form 10-K filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein. Recent Accounting Pronouncements Issued and Not Effective In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new standard requires the service cost component of pension and other postretirement benefit expenses to be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of net benefit cost as defined by paragraphs 715-30-35-4 and 715-60-35-9 to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The guidance is effective for fiscal years beginning after December 15, 2017, and early adoption is permitted. The adoption of ASU No. 2017-07 will impact Statements of Unaudited Condensed Consolidated Operations by changing our classification of the components of pension and OPEB costs; however, it will not impact our Net Income. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures. Based on our analysis to date, we anticipate the largest impact will be the balance sheet recognition of operating leases. In May 2014, the FASB issued ASU No. 2014-09, Revenues from Contracts with Customers. The new revenue guidance broadly replaces the revenue guidance provided throughout the Codification. The core principle of the revenue guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Reporting entities must prepare new disclosures providing qualitative and quantitative information on the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. New disclosures also include qualitative and quantitative information on significant judgments, changes in judgments, and contract acquisition assets. At issuance, ASU No. 2014-09 was effective starting in 2017 for calendar-year public entities, and interim periods within that year. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the adoption of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted. As of June 30, 2017, we have completed the initial evaluation of the new standard and the related review and assessment of a representative sample of existing contracts with our customers. We determined, on a preliminary basis, that the timing and pattern of revenue recognition for our U.S. Iron Ore contracts will likely change; however, the total amount of revenue recognized during the year should remain substantially the same as under current GAAP. We do not anticipate any significant changes in the timing and pattern of revenue recognition for our Asia Pacific Iron Ore contracts. We anticipate utilizing the modified retrospective transition method. Based on our analysis to date, we anticipate the primary impact of the adoption on our consolidated financial statements will be the additional required disclosures around revenue recognition in the notes to the consolidated financial statements. |
SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | NOTE 2 - SEGMENT REPORTING Our continuing operations are organized and managed according to geographic location: U.S. Iron Ore and Asia Pacific Iron Ore. Our U.S. Iron Ore segment is a major supplier of iron ore pellets to the North American steel industry from our mines and pellet plants located in Michigan and Minnesota. The Asia Pacific Iron Ore segment is located in Western Australia and provides iron ore to the seaborne market for Asian steel producers. There were no intersegment revenues in the first six months of 2017 or 2016. We evaluate segment performance based on sales margin, defined as revenues less cost of goods sold and operating expenses identifiable to each segment. Additionally, we evaluate segment performance based on EBITDA, defined as net income before interest, income taxes, depreciation, depletion and amortization, and Adjusted EBITDA, defined as EBITDA excluding certain items such as extinguishment/restructuring of debt, foreign currency exchange remeasurement, impacts of discontinued operations, severance and contractor termination costs and intersegment corporate allocations of SG&A costs. These measures allow management and investors to focus on our ability to service our debt as well as illustrate how the business and each operating segment are performing. Additionally, EBITDA and Adjusted EBITDA assist management and investors in their analysis and forecasting as these measures approximate the cash flows associated with operational earnings. The following tables present a summary of our reportable segments for the three and six months ended June 30, 2017 and 2016, including a reconciliation of segment sales margin to Income from Continuing Operations Before Income Taxes and a reconciliation of Net Income to EBITDA and Adjusted EBITDA:
A summary of assets by segment is as follows:
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INVENTORIES |
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Inventories | NOTE 3 - INVENTORIES The following table presents the detail of our Inventories in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
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PROPERTY, PLANT AND EQUIPMENT |
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PROPERTY, PLANT AND EQUIPMENT | NOTE 4 - PROPERTY, PLANT AND EQUIPMENT The following table indicates the value of each of the major classes of our consolidated depreciable assets as of June 30, 2017 and December 31, 2016:
We recorded depreciation and depletion expense of $21.2 million and $43.8 million in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017, respectively. This compares with depreciation and depletion expense of $25.7 million and $59.5 million for the three and six months ended June 30, 2016, respectively. |
DEBT AND CREDIT FACILITIES |
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT AND CREDIT FACILITIES | NOTE 5 - DEBT AND CREDIT FACILITIES The following represents a summary of our long-term debt as of June 30, 2017 and December 31, 2016:
$500 million 5.75% 2025 Senior Notes - 2017 Offering On February 27, 2017, we entered into an indenture among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the issuance of $500 million aggregate principal amount of 5.75% Senior Notes due 2025 (the "5.75% Senior Notes"). The 5.75% Senior Notes were issued on February 27, 2017 in a private transaction exempt from the registration requirements of the Securities Act. The 5.75% Senior Notes bear interest at a rate of 5.75% per annum, which is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2017. The 5.75% Senior Notes mature on March 1, 2025. The 5.75% Senior Notes are general unsecured senior obligations and rank equally in right of payment with all of our existing and future senior unsecured indebtedness and rank senior in right of payment to all of our existing and future subordinated indebtedness. The 5.75% Senior Notes are effectively subordinated to our existing or future secured indebtedness to the extent of the value of the assets securing such indebtedness. The 5.75% Senior Notes are guaranteed on a senior unsecured basis by our material direct and indirect wholly-owned domestic subsidiaries and, therefore, are structurally senior to any of our existing and future indebtedness that is not guaranteed by such guarantors and are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries that do not guarantee the 5.75% Senior Notes. The terms of the 5.75% Senior Notes are governed by an indenture, which contains customary covenants that, among other things, limit our and our subsidiaries' ability to create liens on property that secure indebtedness, enter into sale and leaseback transactions and merge, consolidate or amalgamate with another company. Upon the occurrence of a “change of control triggering event,” as defined in the indenture, we are required to offer to repurchase the 5.75% Senior Notes at 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest, if any, to, but excluding, the repurchase date. We may redeem the 5.75% Senior Notes, in whole or in part, on or after March 1, 2020, at the redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, and prior to March 1, 2020, at a redemption price equal to 100% of the principal amount thereof plus a “make-whole” premium set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. We may also redeem up to 35% of the aggregate principal amount of the 5.75% Senior Notes on or prior to March 1, 2020 at a redemption price equal to 105.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption with the net cash proceeds of one or more equity offerings. The 5.75% Senior Notes indenture contains customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to pay or acceleration of certain other indebtedness, certain events of bankruptcy and insolvency and failure to pay certain judgments. An event of default under the indenture will allow either the trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding notes issued under the indenture to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under the 5.75% Senior Notes. Debt issuance costs of $8.5 million were incurred related to the offering of the 5.75% Senior Notes, $8.1 million of which is included in Long-term debt in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017. Debt Extinguishment The following is a summary of the debt extinguished during the six months ended June 30, 2017 and the respective gain (loss) on extinguishment for the three and six months ended June 30, 2017:
Debt Maturities The following represents a summary of our maturities of debt instruments, excluding borrowings under the ABL Facility, based on the principal amounts outstanding at June 30, 2017:
ABL Facility As of June 30, 2017 and December 31, 2016, no loans were drawn under the ABL Facility and we had total availability of $296.6 million and $333.0 million, respectively, as a result of borrowing base limitations. As of June 30, 2017 and December 31, 2016, the principal amount of letter of credit obligations totaled $82.5 million and $106.0 million, respectively, to support business obligations primarily related to workers compensation and environmental obligations, thereby further reducing available borrowing capacity on our ABL Facility to $214.1 million and $227.0 million, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | NOTE 6 - FAIR VALUE MEASUREMENTS The following represents the assets and liabilities of the Company measured at fair value at June 30, 2017 and December 31, 2016:
Financial assets classified in Level 1 as of June 30, 2017 and December 31, 2016 include money market funds of $40.0 million and $177.0 million, respectively. The valuation of these instruments is based upon unadjusted quoted prices for identical assets in active markets. The valuation of financial assets and liabilities classified in Level 2 is determined using a market approach based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable. Level 2 assets included $120.0 million of commercial paper and $1.5 million of commodity hedge contracts at June 30, 2017 and December 31, 2016, respectively. The Level 3 assets include derivative assets that consist of a freestanding derivative instrument related to certain supply agreements with one of our U.S Iron Ore customers and certain provisional pricing arrangements with our U.S. Iron Ore and Asia Pacific Iron Ore customers. The supply agreements included in our Level 3 assets/liabilities include provisions for supplemental revenue or refunds based on the customer’s annual steel pricing or the average annual daily market price for hot-rolled coil steel at the time the product is consumed in the customer’s blast furnaces. We account for these provisions as derivative instruments at the time of sale and adjust these provisions to fair value as an adjustment to Product revenues each reporting period until the product is consumed and the amounts are settled. The fair value of the instruments are determined using a market approach with one supply agreement based on an estimate of the annual realized price of hot-rolled coil steel at the steelmaker’s facilities and the other supply agreement based on the estimate of the average annual daily market price for hot-rolled coil steel. Both estimates take into consideration current market conditions and nonperformance risk. We had assets of $66.4 million and $21.3 million at June 30, 2017 and December 31, 2016, respectively, related to supply agreements. The provisional pricing arrangements included in our Level 3 assets/liabilities specify provisional price calculations, where the pricing mechanisms generally are based on market pricing, with the final revenue rate to be based on market inputs at a specified point in time in the future, per the terms of the supply agreements. The difference between the estimated final revenue at the date of sale and the estimated final revenue rate at the measurement date is characterized as a derivative and is required to be accounted for separately once the revenue has been recognized. The derivative instrument is adjusted to fair value through Product revenues each reporting period based upon current market data and forward-looking estimates provided by management until the final revenue rate is determined. We had assets of $6.1 million and $10.3 million at June 30, 2017 and December 31, 2016, respectively, related to provisional pricing arrangements. In addition, we have liabilities of $20.8 million and $0.5 million related to provisional pricing arrangements at June 30, 2017 and December 31, 2016, respectively. The following table illustrates information about quantitative inputs and assumptions for the assets and liabilities categorized in Level 3 of the fair value hierarchy:
The significant unobservable inputs used in the fair value measurement of our provisional pricing arrangements are management’s estimates of Platts 62% Price based upon current market data, index pricing, and the average annual daily steel market price for hot-rolled coil steel, each of which include forward-looking estimates determined by management. Significant increases or decreases in these inputs would result in a significantly higher or lower fair value measurement, respectively. The significant unobservable inputs used in the fair value measurement of our customer supply agreements are the customer's future hot-rolled coil steel price that is estimated based on projections provided by the customer, analysts' projections and estimates determined by management, and the average annual daily market price for hot-rolled coil steel, each of which include forward-looking estimates determined by management. Significant increases or decreases in these inputs would result in a significantly higher or lower fair value measurement, respectively. We recognize any transfers between levels as of the beginning of the reporting period, including both transfers into and out of levels. There were no transfers between Level 1 and Level 2 and no transfers into or out of Level 3 of the fair value hierarchy during the three and six months ended June 30, 2017 and 2016. The following tables represent a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2017 and 2016.
Gains and losses from derivative assets and liabilities are included in earnings and are reported in Product revenues for the three and six months ended June 30, 2017 and 2016. The carrying amount of certain financial instruments (e.g., Accounts receivable, net, Accounts payable and Accrued expenses) approximates fair value and, therefore, has been excluded from the table below. A summary of the carrying amount and fair value of other financial instruments at June 30, 2017 and December 31, 2016 were as follows:
The fair value of long-term debt was determined using quoted market prices based upon current borrowing rates. Items Measured at Fair Value on a Non-Recurring Basis The following tables present information about the financial assets and liabilities that were measured on a fair value basis at June 30, 2017 and December 31, 2016 for the Canadian Entities. The tables also indicate the fair value hierarchy of the valuation techniques used to determine such fair value.
We determined the fair value and recoverability of our Canadian investments by comparing the estimated fair value of the remaining underlying assets of the Canadian Entities to remaining estimated liabilities. We recorded the guarantees at book value, which best approximated fair value. To assess the fair value and recoverability of the amounts receivable from the Canadian Entities, we estimated the fair value of the underlying net assets of the Canadian Entities available for distribution to their creditors in relation to the estimated creditor claims and the priority of those claims. Our estimates involve significant judgment and are based on currently available information, an assessment of the validity of certain claims and estimated payments made by the Canadian Entities. Our ultimate recovery is subject to the final liquidation value of the Canadian Entities. Further, the final liquidation value and ultimate recovery of the creditors of the Canadian Entities, including, if any, to Cliffs and various subsidiaries, may impact our estimates of liability exposure described previously. |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS |
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Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | NOTE 7 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS We offer defined benefit pension plans, defined contribution pension plans and OPEB plans, primarily consisting of retiree healthcare benefits, to most employees in the United States as part of a total compensation and benefits program. We do not have employee retirement benefit obligations at our Asia Pacific Iron Ore operations. The defined benefit pension plans largely are noncontributory and benefits generally are based on a minimum formula or employees’ years of service and average earnings for a defined period prior to retirement. The following are the components of defined benefit pension and OPEB costs and credits for the three and six months ended June 30, 2017 and 2016: Defined Benefit Pension Costs
Other Postretirement Benefits Credit
We made pension contributions of $2.3 million for the three and six months ended June 30, 2017. We made no contributions for the three months ended June 30, 2016 and $0.3 million for the six months ended June 30, 2016. OPEB contributions are typically made on an annual basis in the first quarter of each year, but due to plan funding requirements being met, no OPEB contributions were required or made for the three and six months ended June 30, 2017 and June 30, 2016. |
STOCK COMPENSATION PLANS |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Plans | NOTE 8 - STOCK COMPENSATION PLANS Employees’ Plans On June 26, 2017, the Compensation and Organization Committee of the Board of Directors approved a grant under the A&R 2015 Equity Plan to the Chief Executive Officer for the performance period commencing June 1, 2017 and ending December 31, 2019. Shares granted under the awards consisted of 0.5 million restricted share units and 0.2 million performance shares. On February 21, 2017, the Compensation and Organization Committee of the Board of Directors approved grants under the 2015 Equity Plan to certain officers and employees for the 2017 to 2019 performance period. Shares granted under the awards consisted of 0.6 million restricted share units and 0.6 million performance shares. Restricted share units granted during 2017 are subject to continued employment, are retention based, will vest December 31, 2019, and are payable in common shares at a time determined by the Compensation and Organization Committee at its discretion. Performance shares are subject to continued employment, and each performance share, if earned, entitles the holder to receive common shares within a range between a threshold and maximum number of our common shares, with the actual number of common shares earned dependent upon whether the Company achieves certain objectives and performance goals as established by the Compensation and Organization Committee. The performance share grants vest over the performance period. The performance awards granted have a performance condition that is measured on the basis of relative TSR for the period of January 1, 2017 to December 31, 2019 and the period of June 1, 2017 to December 31, 2019, for the February 21, 2017 and the June 26, 2017 grants, respectively, and measured against the constituents of the S&P Metals and Mining ETF Index and the SPDR S&P Metals and Mining ETF Index, respectively, at the beginning of the relevant performance period. The final payout will vary from zero to 200% of the original grant. Determination of Fair Value The fair value of each performance share grant is estimated on the date of grant using a Monte Carlo simulation to forecast relative TSR performance. A correlation matrix of historic and projected stock prices was developed for both the Company and our predetermined peer group of mining and metals companies. The fair value assumes that performance goals will be achieved. The expected term of the grant represents the time from the grant date to the end of the service period for each of the plan agreements. We estimate the volatility of our common shares and that of the peer group of mining and metals companies using daily price intervals for all companies. The risk-free interest rate is the rate at the grant date on zero-coupon government bonds with a term commensurate with the remaining life of the performance period. The following assumptions were utilized to estimate the fair value for the 2017 performance share grants:
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INCOME TAXES |
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Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - INCOME TAXES Our 2017 estimated annual effective tax rate before discrete items is approximately 1.3%. The annual effective tax rate differs from the U.S. statutory rate of 35% primarily due to the reversal of valuation allowance from operations in the current year and deductions for percentage depletion in excess of cost depletion related to U.S. operations. The 2016 estimated annual effective tax rate before discrete items at June 30, 2016 was 3.1%. |
LEASE OBLIGATIONS |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASE OBLIGATIONS | NOTE 10 - LEASE OBLIGATIONS We lease certain mining, production and other equipment under operating and capital leases. The capital leases are for varying lengths, generally at market interest rates and contain purchase and/or renewal options at the end of the terms. Our operating lease expense was $1.8 million and $3.5 million for the three and six months ended June 30, 2017, compared with $2.2 million and $4.6 million for the comparable periods in 2016. Future minimum payments under capital leases and non-cancellable operating leases at June 30, 2017 are as follows:
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ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS |
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Environmental Remediation Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS | NOTE 11 - ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS We had environmental and mine closure liabilities of $214.1 million and $206.8 million at June 30, 2017 and December 31, 2016, respectively. The following is a summary of the obligations as of June 30, 2017 and December 31, 2016:
Mine Closure The accrued closure obligation for our active mining operations provides for contractual and legal obligations associated with the eventual closure of the mining operations. The accretion of the liability and amortization of the related asset is recognized over the estimated mine lives for each location. The following represents a roll forward of our asset retirement obligation liability for the six months ended June 30, 2017 and for the year ended December 31, 2016:
For the year ended December 31, 2016, the revisions in estimated cash flows recorded during the year related primarily to revisions in the timing of the estimated cash flows related to two of our U.S. mines. The Empire mine asset retirement obligation was reduced $29.6 million as a result of the further refinement of the timing of cash flows and a downward revision of estimated asset retirement costs related to technology associated with required storm water management systems expected to be implemented. Additionally, during 2016, a new economic reserve estimate was completed for United Taconite, increasing salable product reserves by 115 million long tons and consequently significantly increasing the life-of-mine plan, resulting in a $9.2 million decrease in the asset retirement obligation. |
GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES | NOTE 12 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The carrying amount of goodwill as of June 30, 2017 and December 31, 2016 was $2.0 million and related to our U.S. Iron Ore operating segment. Other Intangible Assets The following table is a summary of definite-lived intangible assets as of June 30, 2017 and December 31, 2016:
Amortization expense relating to intangible assets was $0.4 million and $1.0 million for the three and six months ended June 30, 2017 and is recognized in Cost of goods sold and operating expenses in the Statements of Unaudited Condensed Consolidated Operations. Amortization expense relating to other intangible assets was $1.2 million and $2.6 million for the comparable periods in 2016. Amortization expense of other intangible assets is expected to continue to be immaterial going forward. |
DERIVATIVE INSTRUMENTS |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 13 - DERIVATIVE INSTRUMENTS The following table presents the fair value of our derivative instruments and the classification of each in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
Derivatives Not Designated as Hedging Instruments Customer Supply Agreements Certain supply agreements with one U.S. Iron Ore customer provide for supplemental revenue or refunds to the customer based on the customer’s average annual steel pricing or based on the average annual daily steel market price for hot-rolled coil steel at the time the product is consumed in the customer’s blast furnace. The supplemental pricing is characterized as a freestanding derivative and is required to be accounted for separately once the product is shipped. The derivative instrument, which is finalized based on a future price, is adjusted to fair value as a revenue adjustment each reporting period until the pellets are consumed and the amounts are settled. We recognized a $51.4 million and $69.2 million net gain in Product revenues in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017, respectively, related to the supplemental payments. This compares with a net gain in Product revenues of $19.5 million and $19.9 million for the comparable periods in 2016. Other current assets, representing the fair value of the supplemental revenue, were $66.4 million and $21.3 million as of June 30, 2017 and December 31, 2016 in the Statements of Unaudited Condensed Consolidated Financial Position, respectively. Provisional Pricing Arrangements Certain of our U.S. Iron Ore and Asia Pacific Iron Ore customer supply agreements specify provisional price calculations, where the pricing mechanisms generally are based on market pricing, with the final revenue rate to be based on market inputs at a specified period in time in the future, per the terms of the supply agreements. The market inputs are tied to indexed price adjustment factors that are integral to the iron ore supply contracts and vary based on the agreement. The pricing mechanisms typically include adjustments based upon changes in the Platts 62% Price, along with pellet premiums, published Platts international indexed freight rates and changes in specified Producer Price Indices, including those for industrial commodities, fuel and steel. The pricing adjustments generally operate in the same manner, with each factor typically comprising a portion of the price adjustment, although the weighting of each factor varies based upon the specific terms of each agreement. U.S. Iron Ore sales revenue is primarily recognized when cash is received. For U.S. Iron Ore sales, the difference between the provisionally agreed-upon price and the estimated final revenue rate is characterized as a freestanding derivative and must be accounted for separately once the provisional revenue has been recognized. Asia Pacific Iron Ore sales revenue is recorded initially at the provisionally agreed-upon price with the pricing provision embedded in the receivable. The pricing provision is an embedded derivative that must be bifurcated and accounted for separately from the receivable. Subsequently, the derivative instruments for both U.S. Iron Ore and Asia Pacific Iron Ore are adjusted to fair value through Product revenues each reporting period based upon current market data and forward-looking estimates provided by management until the final revenue rate is determined. At June 30, 2017, we recorded $6.1 million as Other current assets and $20.8 million as Other current liabilities related to our estimate of the final revenue rate with our U.S. Iron Ore and Asia Pacific Iron Ore customers in the Statements of Unaudited Condensed Consolidated Financial Position. At December 31, 2016, we recorded $10.3 million as Other current assets and $0.5 million as Other current liabilities related to our estimate of the final revenue rate with our U.S. Iron Ore and Asia Pacific Iron Ore customers in the Statements of Unaudited Condensed Consolidated Financial Position. These amounts represent the difference between the provisional price agreed upon with our customers based on the supply agreement terms and our estimate of the final revenue rate based on the price calculations established in the supply agreements. As a result, we recognized a net decrease of $35.4 million and $19.8 million in Product revenues in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017, respectively, related to these arrangements. This compares with a net increase of $1.8 million and $0.3 million in Product revenues for the comparable periods in 2016, respectively. The following summarizes the effect of our derivatives that are not designated as hedging instruments in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017 and 2016:
Refer to NOTE 6 - FAIR VALUE MEASUREMENTS for additional information. |
CAPITAL STOCK |
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Equity [Abstract] | |
CAPITAL STOCK | NOTE 14 - CAPITAL STOCK Common Share Public Offering On February 9, 2017, we issued 63.25 million common shares in an underwritten public offering. We received net proceeds of $661.3 million at a public offering price of $10.75 per common share. The net proceeds from the issuance of our common shares and our issuance of $500 million aggregate principal amount of 5.75% Senior Notes were used to redeem in full all of our outstanding 8.00% 1.5 Lien Notes due 2020 and 7.75% Second Lien Notes due 2020. The aggregate principal amount outstanding of debt redeemed was $648.6 million. Additionally, through tender offers, we purchased $422.2 million in aggregate principal amount of debt, excluding unamortized discounts and deferred charges, of our 5.90% Senior Notes due 2020, our 4.80% Senior Notes due 2020 and our 4.875% Senior Notes due 2021. During the second quarter of 2017, we redeemed $35.6 million aggregate principal amount of the 8.25% First Lien Notes due 2020 with the remaining net proceeds from our common share offering. |
SHAREHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | NOTE 15 - SHAREHOLDERS' DEFICIT The following table reflects the changes in shareholders' deficit attributable to both Cliffs and the noncontrolling interests primarily related to Tilden and Empire of which Cliffs owns 85% and 79%, respectively, for the six months ended June 30, 2017 and June 30, 2016:
The following table reflects the changes in Accumulated other comprehensive loss related to Cliffs shareholders’ deficit for June 30, 2017 and June 30, 2016:
The following table reflects the details about Accumulated other comprehensive loss components related to Cliffs shareholders’ deficit for the three and six months ended June 30, 2017 and 2016:
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RELATED PARTIES |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTIES | NOTE 16 - RELATED PARTIES Two of our four operating U.S. iron ore mines and our indefinitely-idled Empire mine are co-owned joint ventures with companies that are integrated steel producers or their subsidiaries. We are the manager of each of the mines we co-own and rely on our joint venture partners to make their required capital contributions and to pay for their share of the iron ore pellets that we produce. One of the joint venture partners is also our customer. The following is a summary of the mine ownership of these iron ore mines at June 30, 2017:
As part of a 2014 extension agreement between us and ArcelorMittal, which amended certain terms of the Empire partnership agreement, certain distributions of the partners' equity amounts were required to be made on a quarterly basis beginning in the first quarter of 2015. These equity distributions were made through the termination of the partnership agreement on December 31, 2016. We paid $8.7 million in January 2017 related to 2016 distributions. During the three and six months ended June 30, 2016, we recorded distributions of $24.4 million and $41.4 million, respectively, under this agreement of which $17.0 million was paid as of June 30, 2016. In addition, we paid $11.1 million in January 2016 related to 2015 distributions. ArcelorMittal's equity balance in the Empire partnership as of December 31, 2016 was approximately $132.7 million. During the second quarter of 2017, the partners reached an agreement in principle regarding the final distribution of partnership equity. We expect the partnership equity distribution to be made per the partnership agreement in three equal installments over a period of 24 months, commencing upon the finalization of the agreement. This agreement is expected to be finalized during the third quarter of 2017. Product revenues from related parties were as follows:
The following table presents the classification of related party assets and liabilities in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
Certain supply agreements with one U.S. Iron Ore customer provide for supplemental revenue or refunds to the customer based on the customer’s average annual steel pricing or based on the average annual daily market price for hot-rolled coil steel at the time the product is consumed in the customer’s blast furnace. The supplemental pricing is characterized as a freestanding derivative. Refer to NOTE 13 - DERIVATIVE INSTRUMENTS for further information. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | NOTE 17 - EARNINGS PER SHARE The following table summarizes the computation of basic and diluted earnings (loss) per share:
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COMMITMENTS AND CONTINGENCIES |
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Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 - COMMITMENTS AND CONTINGENCIES Contingencies We are currently the subject of, or party to, various claims and legal proceedings incidental to our operations. If management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount of the loss or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate outcome of these matters, individually and in the aggregate, will not have a material effect on our financial position, results of operations or cash flows. However, these claims and legal proceedings are subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, additional funding requirements or an injunction. If an unfavorable ruling were to occur, there exists the possibility of a material impact on the financial position and results of operations for the period in which the ruling occurs or future periods. However, we do not believe that any pending claims or legal proceedings will result in a material liability in relation to our consolidated financial statements. Currently, we have recorded a liability in the Statements of Unaudited Condensed Consolidated Financial Position related to the following legal matters: Michigan Electricity Matters. On February 19, 2015, in connection with various proceedings before FERC with respect to certain cost allocations for continued operation of the Presque Isle Power Plant in Marquette, Michigan, FERC issued an order directing MISO to submit a revised methodology for allocating SSR costs that identified the load serving entities that require the operation of SSR units at the power plant for reliability purposes. On September 17, 2015, FERC issued an order conditionally approving MISO’s revised allocation methodology. On September 22, 2016, FERC denied requests for rehearing of the February 19 order, rejecting arguments that FERC did not have the authority to order refunds in a cost allocation case and to impose retroactive surcharges to effectuate such refunds. FERC, however, suspended any refunds and surcharges pending its review of a July 25, 2016 ALJ initial decision on the appropriate amount of SSR compensation. Should FERC award SSR costs based on retroactive surcharges and the amount of SSR compensation not be adjusted, our current estimate of the potential liability to the Empire and Tilden mines is $13.6 million, based on MISO's June 14, 2016 refund report (as revised in MISO's July 20, 2016 errata refund report) for the Escanaba, White Pine and Presque Isle SSRs. We, however, continue to vigorously challenge both the amount of the SSR compensation and the imposition of any SSR costs before FERC and the U.S. Court of Appeals for the D.C. Circuit. As of June 30, 2017, this potential liability of $13.6 million is included in our Statements of Unaudited Condensed Consolidated Financial Position as part of Accrued expenses. On November 8, 2016, Tilden and Empire, along with various Michigan-aligned parties, filed petitions for review of FERC’s order regarding allocation and non-cost SSR issues with the U.S. Court of Appeals for the D.C. Circuit. On January 27, 2017, Tilden, Empire and other appellants filed a motion to terminate further abeyance of briefing so that cost allocation issues could be heard earlier at the Court of Appeals than revenue requirement issues still pending at FERC, which motion was granted on April 4, 2017. We will continue to vigorously challenge both the amount of the SSR compensation and the imposition of any SSR costs before FERC and the U.S. Court of Appeals for the D.C. Circuit. CCAA Proceedings In January 2015, the Bloom Lake Group commenced CCAA proceedings. Effective January 27, 2015, following the CCAA filing of the Bloom Lake Group, we deconsolidated the Bloom Lake Group and certain other wholly-owned subsidiaries comprising substantially all of our Canadian operations. Additionally, on May 20, 2015, the Wabush Group commenced CCAA proceedings which resulted in the deconsolidation of the remaining Wabush Group entities that were not previously deconsolidated. As a result of this action, the CCAA protections granted to the Bloom Lake Group were extended to include the Wabush Group to facilitate the reorganization or divestiture of each of their businesses and operations. Prior to the deconsolidations, various Cliffs wholly-owned entities made loans to the Canadian Entities for the purpose of funding their operations and had accounts receivable generated in the ordinary course of business. The loans, corresponding interest and the accounts receivable were considered intercompany transactions and eliminated from our consolidated financial statements. Since the deconsolidations, the loans, associated interest and accounts receivable are considered related party transactions and have been recognized in our consolidated financial statements at their estimated fair value of $50.1 million and $48.6 million classified as Loans to and accounts receivable from the Canadian Entities in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016, respectively. During the three months ended June 30, 2017, we became aware that it was probable the Monitor will assert a preference claim of the CCAA estate against the Company. Given that it is probable the claim will be asserted by the Monitor, we have recorded an estimated liability approximately equal to the value of the Company’s related-party claims against the CCAA estate of $50.0 million, classified as Contingent claims in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and included within Income (Loss) from Discontinued Operations, net of tax in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017. Should the Monitor proceed to assert the claim, we believe the Monitor will demand an amount in excess of the value of Cliffs’ related-party claims against the estate. Thus, it is possible that a change in the estimated liability may occur in the future. Cliffs denies it is liable for any amount and will vigorously defend such claim. Additionally, we have liabilities of $38.5 million and $37.2 million including guarantees for certain environmental obligations of the Canadian Entities in our consolidated results, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016, respectively. Refer to NOTE 19 - SUBSEQUENT EVENTS for additional information. As of June 30, 2017, substantially all of the assets available to the estate have been liquidated. The CCAA proceedings are still ongoing and the Monitor is evaluating all claims into the estate including our related-party claims. Currently, there is uncertainty as to the amount of the distribution that will be made to the creditors of the estate, including, if any, to Cliffs, and whether Cliffs could be held liable for claims that may be asserted by or on behalf of the Bloom Lake Group or the Wabush Group or by their respective representatives against non-debtor affiliates of the Bloom Lake Group and the Wabush Group. After payment of sale expenses, taxes and repayment of the DIP financing, the net proceeds from the liquidation of assets and certain other divestitures by the Canadian Entities are currently being held by the Monitor, on behalf of the Canadian Entities, to fund the costs of the CCAA proceedings and for eventual distribution to creditors of the Canadian Entities pending further order of the Montreal Court. |
SUBSEQUENT EVENTS |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 - SUBSEQUENT EVENTS On July 18, 2017, all conditions were satisfied to complete a court-supervised sale of the Wabush Scully Mine assets to a third-party buyer. The buyer agreed to provide replacement financial assurance for environmental obligations of the Wabush Scully Mine, thus eliminating the Company's liability. As a result of this arrangement, the remaining guarantee instruments that supported the Wabush Mine environmental obligations are in the process of being cancelled and, as a result, in the third quarter of 2017, the Company will eliminate the Guarantees liability balance recorded as of June 30, 2017 of $38.5 million. We expect the closing of this sale to result in a gain of approximately $30 million during the third quarter of 2017. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis Of Consolidation | Basis of Consolidation The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned and majority-owned subsidiaries, including the following operations as of June 30, 2017:
Intercompany transactions and balances are eliminated upon consolidation. |
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Equity Method Investments | Equity Method Investments Our 23% ownership interest in Hibbing is recorded as an equity method investment. As of June 30, 2017 and December 31, 2016, our investment in Hibbing was $6.5 million and $8.7 million, respectively, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position. |
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Foreign Currency | Foreign Currency Our financial statements are prepared with the U.S. dollar as the reporting currency. The functional currency of our Australian subsidiaries is the Australian dollar. The functional currency of all other international subsidiaries is the U.S. dollar. The financial statements of our Australian subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for revenues, expenses, gains and losses. Translation adjustments are recorded as Accumulated other comprehensive loss. Income taxes generally are not provided for foreign currency translation adjustments. To the extent that monetary assets and liabilities, including short-term intercompany loans, are recorded in a currency other than the functional currency, these amounts are remeasured each reporting period, with the resulting gain or loss being recorded in the Statements of Unaudited Condensed Consolidated Operations. Transaction gains and losses resulting from remeasurement of short-term intercompany loans are included in Miscellaneous - net in the Statements of Unaudited Condensed Consolidated Operations. The following represents the transaction gains and losses resulting from remeasurement for the three and six months ended June 30, 2017 and 2016:
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Significant Accounting Policies | Significant Accounting Policies A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended December 31, 2016 included in our Annual Report on Form 10-K filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Issued and Not Effective In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new standard requires the service cost component of pension and other postretirement benefit expenses to be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of net benefit cost as defined by paragraphs 715-30-35-4 and 715-60-35-9 to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The guidance is effective for fiscal years beginning after December 15, 2017, and early adoption is permitted. The adoption of ASU No. 2017-07 will impact Statements of Unaudited Condensed Consolidated Operations by changing our classification of the components of pension and OPEB costs; however, it will not impact our Net Income. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures. Based on our analysis to date, we anticipate the largest impact will be the balance sheet recognition of operating leases. In May 2014, the FASB issued ASU No. 2014-09, Revenues from Contracts with Customers. The new revenue guidance broadly replaces the revenue guidance provided throughout the Codification. The core principle of the revenue guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Reporting entities must prepare new disclosures providing qualitative and quantitative information on the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. New disclosures also include qualitative and quantitative information on significant judgments, changes in judgments, and contract acquisition assets. At issuance, ASU No. 2014-09 was effective starting in 2017 for calendar-year public entities, and interim periods within that year. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the adoption of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted. As of June 30, 2017, we have completed the initial evaluation of the new standard and the related review and assessment of a representative sample of existing contracts with our customers. We determined, on a preliminary basis, that the timing and pattern of revenue recognition for our U.S. Iron Ore contracts will likely change; however, the total amount of revenue recognized during the year should remain substantially the same as under current GAAP. We do not anticipate any significant changes in the timing and pattern of revenue recognition for our Asia Pacific Iron Ore contracts. We anticipate utilizing the modified retrospective transition method. Based on our analysis to date, we anticipate the primary impact of the adoption on our consolidated financial statements will be the additional required disclosures around revenue recognition in the notes to the consolidated financial statements. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Subsidiaries | The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned and majority-owned subsidiaries, including the following operations as of June 30, 2017:
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Foreign Currency Transaction [Table Text Block] | The following represents the transaction gains and losses resulting from remeasurement for the three and six months ended June 30, 2017 and 2016:
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SEGMENT REPORTING (Tables) |
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Schedule Of Segment Reporting Information, By Segment | The following tables present a summary of our reportable segments for the three and six months ended June 30, 2017 and 2016, including a reconciliation of segment sales margin to Income from Continuing Operations Before Income Taxes and a reconciliation of Net Income to EBITDA and Adjusted EBITDA:
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Summary of Assets by Segment | A summary of assets by segment is as follows:
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventories | The following table presents the detail of our Inventories in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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Value Of Each Of The Major Classes Of Consolidated Depreciable Assets | The following table indicates the value of each of the major classes of our consolidated depreciable assets as of June 30, 2017 and December 31, 2016:
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DEBT AND CREDIT FACILITIES (Tables) |
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Schedule Of Long-Term Debt | The following represents a summary of our long-term debt as of June 30, 2017 and December 31, 2016:
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Schedule of Extinguishment of Debt [Table Text Block] | The following is a summary of the debt extinguished during the six months ended June 30, 2017 and the respective gain (loss) on extinguishment for the three and six months ended June 30, 2017:
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Schedule of Maturities of Long-term Debt | Debt Maturities The following represents a summary of our maturities of debt instruments, excluding borrowings under the ABL Facility, based on the principal amounts outstanding at June 30, 2017:
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FAIR VALUE MEASUREMENTS (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following represents the assets and liabilities of the Company measured at fair value at June 30, 2017 and December 31, 2016:
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Fair Value, Recurring and Nonrecurring, Valuation Techniques | The following table illustrates information about quantitative inputs and assumptions for the assets and liabilities categorized in Level 3 of the fair value hierarchy:
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Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation |
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Schedule Of Carrying Value And Fair Value Of Financial Instruments | A summary of the carrying amount and fair value of other financial instruments at June 30, 2017 and December 31, 2016 were as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | Items Measured at Fair Value on a Non-Recurring Basis The following tables present information about the financial assets and liabilities that were measured on a fair value basis at June 30, 2017 and December 31, 2016 for the Canadian Entities. The tables also indicate the fair value hierarchy of the valuation techniques used to determine such fair value.
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PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The following are the components of defined benefit pension and OPEB costs and credits for the three and six months ended June 30, 2017 and 2016: Defined Benefit Pension Costs
Other Postretirement Benefits Credit
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STOCK COMPENSATION PLANS STOCK COMPENSATION PLANS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | The following assumptions were utilized to estimate the fair value for the 2017 performance share grants:
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LEASE OBLIGATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Future Minimum Lease Payments For Capital Leases And Operating Leases | Future minimum payments under capital leases and non-cancellable operating leases at June 30, 2017 are as follows:
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ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Remediation Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Mine Closure Obligations | The following is a summary of the obligations as of June 30, 2017 and December 31, 2016:
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Asset Retirement Obligation Disclosure | The following represents a roll forward of our asset retirement obligation liability for the six months ended June 30, 2017 and for the year ended December 31, 2016:
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GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Finite-Lived Intangible Assets By Major Class | The following table is a summary of definite-lived intangible assets as of June 30, 2017 and December 31, 2016:
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DERIVATIVE INSTRUMENTS (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Derivative Instruments In Statement Of Financial Position, Fair Value | The following table presents the fair value of our derivative instruments and the classification of each in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
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Schedule Of Derivatives Not Designated As Hedging Instruments Statements Of Financial Performance Location Table | The following summarizes the effect of our derivatives that are not designated as hedging instruments in the Statements of Unaudited Condensed Consolidated Operations for the three and six months ended June 30, 2017 and 2016:
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SHAREHOLDERS' EQUITY Shareholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | The following table reflects the changes in shareholders' deficit attributable to both Cliffs and the noncontrolling interests primarily related to Tilden and Empire of which Cliffs owns 85% and 79%, respectively, for the six months ended June 30, 2017 and June 30, 2016:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following table reflects the changes in Accumulated other comprehensive loss related to Cliffs shareholders’ deficit for June 30, 2017 and June 30, 2016:
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Details of Accumulated Other Comprehensive Income (Loss) Components | The following table reflects the details about Accumulated other comprehensive loss components related to Cliffs shareholders’ deficit for the three and six months ended June 30, 2017 and 2016:
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RELATED PARTIES (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Other Ownership Interests | The following is a summary of the mine ownership of these iron ore mines at June 30, 2017:
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Summary Of Related Party Transactions Table Disclosure | Product revenues from related parties were as follows:
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Summary of Balance Sheet Presentation [Table Text Block] | The following table presents the classification of related party assets and liabilities in the Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2017 and December 31, 2016:
|
EARNINGS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Computation | The following table summarizes the computation of basic and diluted earnings (loss) per share:
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - Hibbing [Member] - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Noncurrent Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership interest, equity method investment | 23.00% | 23.00% |
Other Noncurrent Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Equity Method Investments | $ 6.5 | $ 8.7 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Foreign Currency Translation) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Foreign Currency Transaction Gain (Loss), before Tax | $ 0.0 | $ 0.2 | $ 13.6 | $ (0.9) |
Short-term intercompany loan [Member] | ||||
Foreign Currency Transaction Gain (Loss), before Tax | 1.5 | (0.1) | 16.6 | 0.2 |
Cash and Cash Equivalents [Member] | ||||
Foreign Currency Transaction Gain (Loss), before Tax | (0.5) | 0.5 | (1.7) | 1.5 |
Other Remeasurement | ||||
Foreign Currency Transaction Gain (Loss), before Tax | $ (1.0) | $ (0.2) | $ (1.3) | $ (2.6) |
SEGMENT REPORTING Segment Reporting (Summary of Assets by Segment) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 2,030.1 | $ 1,923.9 |
U.S. Iron Ore [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,525.9 | 1,372.5 |
Asia Pacific Iron Ore [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 157.7 | 155.1 |
Total Segment Assets [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,683.6 | 1,527.6 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 346.5 | $ 396.3 |
INVENTORIES (Schedule Of Inventories) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished Goods | $ 261.0 | $ 148.0 |
Work-in Process | 26.6 | 30.4 |
Total Inventory | 287.6 | 178.4 |
U.S. Iron Ore [Member] | ||
Inventory, Net [Abstract] | ||
Finished Goods | 238.3 | 124.4 |
Work-in Process | 14.3 | 12.6 |
Total Inventory | 252.6 | 137.0 |
Asia Pacific Iron Ore [Member] | ||
Inventory, Net [Abstract] | ||
Finished Goods | 22.7 | 23.6 |
Work-in Process | 12.3 | 17.8 |
Total Inventory | $ 35.0 | $ 41.4 |
PROPERTY, PLANT AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation and depletion | $ 21.2 | $ 25.7 | $ 43.8 | $ 59.5 |
DEBT AND CREDIT FACILITIES DEBT AND CREDIT FACILITIES (Schedule of Debt Maturities) (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2017 (July 1 - December 31) | $ 0.0 |
Debt Maturities 2018 | 0.0 |
Debt Maturities 2019 | 0.0 |
Debt Maturities 2020 | 715.7 |
Debt Maturities 2021 | 138.4 |
Debt Maturities 2022 | 0.0 |
2023 and thereafter | 798.4 |
Total maturities of debt | $ 1,652.5 |
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Fair Value Measurements, Nonrecurring) (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans to and accounts receivable from the Canadian Entities | $ 50.1 | $ 48.6 |
Fair Value, Asset, Measured on a Nonrecurring Basis, Gain (Loss) Included in Earnings | 1.5 | (17.5) |
Contingent Liabilities recognized in Consolidated Financials | 38.5 | 37.2 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 1.3 | 0.4 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans to and accounts receivable from the Canadian Entities | 50.1 | 48.6 |
Contingent Liabilities recognized in Consolidated Financials | $ 38.5 | $ 37.2 |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Pension Plans, Defined Benefit [Member] | ||||
Definted Benefit Plan Disclosure [Line Items] | ||||
Pension Contributions | $ 2.3 | $ 0.0 | $ 2.3 | $ 0.3 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Definted Benefit Plan Disclosure [Line Items] | ||||
OPEB Contributions | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Estimated Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 4.7 | $ 4.5 | $ 9.5 | $ 9.0 |
Interest cost | 7.5 | 7.5 | 15.0 | 14.9 |
Expected return on plan assets | (13.6) | (13.7) | (27.1) | (27.4) |
Prior service credits | 0.7 | 0.5 | 1.3 | 1.1 |
Net actuarial loss | 5.3 | 5.3 | 10.6 | 10.5 |
Net periodic benefit credit | 4.6 | 4.1 | 9.3 | 8.1 |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.5 | 0.4 | 1.0 | 0.9 |
Interest cost | 2.2 | 2.3 | 4.3 | 4.5 |
Expected return on plan assets | (4.5) | (4.3) | (8.9) | (8.5) |
Prior service credits | (0.8) | (0.9) | (1.5) | (1.8) |
Net actuarial loss | 1.3 | 1.4 | 2.5 | 2.8 |
Net periodic benefit credit | $ (1.3) | $ (1.1) | $ (2.6) | $ (2.1) |
STOCK COMPENSATION PLANS STOCK COMPENSATION PLANS (Assumptions Utilized to Estimate Fair Value for Performance Share Grants) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant Date Market Price | $ 6.64 | $ 11.67 |
Average Expected Term | 2 years 6 months 2 days | 2 years 10 months 9 days |
Expected Volatility | 92.80% | 92.10% |
Risk-Free Interest Rate | 1.45% | 1.51% |
Dividend Yield | 0.00% | 0.00% |
Fair Value | $ 10.74 | $ 19.69 |
Fair Value (Percent of Grant Date Market Price) | 161.75% | 168.72% |
INCOME TAXES (Narrative) (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 1.30% | 3.10% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% |
LEASE OBLIGATIONS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 1.8 | $ 2.2 | $ 3.5 | $ 4.6 |
LEASE OBLIGATIONS (Future Minimum Lease Payments) (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Capital Leases | |
2017 (July 1 - December 31) | $ 11.7 |
2018 | 18.9 |
2019 | 10.5 |
2020 | 9.5 |
2021 | 8.8 |
2022 and thereafter | 0.6 |
Total minimum lease payments | 60.0 |
Amounts representing interest | 10.0 |
Present value of net minimum lease payments | 50.0 |
Operating Leases | |
2017 (July 1 - December 31) | 3.6 |
2018 | 5.8 |
2019 | 2.9 |
2020 | 2.9 |
2021 | 3.0 |
2022 and thereafter | 0.0 |
Total minimum lease payments | 18.2 |
Other Current Liabilities [Member] | |
Capital Leases | |
Present value of net minimum lease payments | 17.4 |
Other Liabilities [Member] | |
Capital Leases | |
Present value of net minimum lease payments | $ 32.6 |
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS (Narrative) (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016
USD ($)
T
|
Jun. 30, 2017
USD ($)
|
|
Accrual for Environmental Loss Contingencies, Period Increase (Decrease) | $ 9.2 | |
Reserve increase (decrease), tons | T | 115,000,000 | |
Selenium [Domain] | ||
Accrual for Environmental Loss Contingencies, Period Increase (Decrease) | $ 29.6 | |
Eastern Canadian Iron Ore [Member] | Owned Or Operating Facilities [Member] | ||
Mine Reclamation and Closing Liability, current and noncurrent | $ 206.8 | $ 214.1 |
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS (Asset Retirement Obligation Disclosure) (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Asset Retirement Obligation [Roll Forward] | ||
Asset retirement obligation at beginning of period | $ 204.0 | $ 230.4 |
Accretion expense | 7.1 | 14.0 |
Asset Retirement Obligation, Liabilities Settled | (0.8) | (2.2) |
Exchange rate changes | 1.0 | (0.2) |
Revision in estimated cash flows | (38.0) | |
Asset retirement obligation at end of period | $ 211.3 | $ 204.0 |
GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Cost of Sales [Member] | |||||
Goodwill [Line Items] | |||||
Amortization expense relating to intangible assets | $ 0.4 | $ 1.2 | $ 1.0 | $ 2.6 | |
U.S. Iron Ore [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 2.0 | $ 2.0 | $ 2.0 |
GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES (Schedule Of Finite-Lived Intangible Assets By Major Class) (Details) - Permits [Member] - Other Assets [Member] - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets - Gross Carrying Amount | $ 78.8 | $ 78.4 |
Definite lived intangible assets - Accumulated Amortization | (25.6) | (24.6) |
Definite lived intangible assets - Net Carrying Amount | $ 53.2 | $ 53.8 |
CAPITAL STOCK (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Feb. 09, 2017 |
Dec. 31, 2016 |
|
Class of Stock [Line Items] | ||||
Common Stock, Shares, Issued | 63,250 | |||
Net proceeds from issuance of common shares | $ 661.3 | $ 0.0 | ||
Shares Issued, Price Per Share | $ 10.75 | |||
Extinguishment of Debt, Amount | 1,106.4 | |||
$500 Million 5.75% 2025 Senior Notes [Member] | ||||
Class of Stock [Line Items] | ||||
Debt Instrument, Par Value | 500.0 | |||
Secured Debt [Member] | ||||
Class of Stock [Line Items] | ||||
Extinguishment of Debt, Amount | 648.6 | |||
Unsecured Debt [Member] | ||||
Class of Stock [Line Items] | ||||
Extinguishment of Debt, Amount | 422.2 | |||
$540 Million 8.25% 2020 Lien Notes [Member] | ||||
Class of Stock [Line Items] | ||||
Debt Instrument, Par Value | 504.4 | $ 540.0 | ||
Extinguishment of Debt, Amount | $ 35.6 |
SHAREHOLDERS' EQUITY Narrative (Details) |
Jun. 30, 2017 |
---|---|
Empire [Member] | |
Noncontrolling Interest, Ownership Percentage by Parent | 79.00% |
Tilden [Member] | |
Noncontrolling Interest, Ownership Percentage by Parent | 85.00% |
RELATED PARTIES (Narrative) (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
Facility
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
|
U.S. Iron Ore [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of mines (in number of facilities) | Facility | 4 | ||||
Joint Venture Partners [Member] | U.S. Iron Ore [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of mines (in number of facilities) | Facility | 2 | ||||
Empire [Member] | Arcelor Mittal [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Subsequent Paid Distributions of Partners' Equity Amounts | $ 8.7 | $ 11.1 | |||
Recorded Distributions of Partners' Equity Amounts | $ 24.4 | $ 41.4 | |||
Paid Distributions of Partners' Equity Amounts | $ 17.0 | $ 17.0 |
RELATED PARTIES (Summary Of Related Party Transactions Table Disclosure) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Related Party Transactions [Abstract] | ||||
Product revenues from related parties | $ 227.5 | $ 241.6 | $ 336.9 | $ 345.0 |
Product | $ 512.0 | $ 452.8 | $ 924.8 | $ 728.4 |
Related party product revenue as a percent of total product revenue | 44.40% | 53.40% | 36.40% | 47.40% |
RELATED PARTIES RELATED PARTIES (Summary of Balance Sheet Presentation) (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Due to Related Parties, Current | $ 15.9 | $ 8.7 |
Trade Accounts Receivable [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | 18.8 | 46.9 |
Other Current Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | $ 68.0 | $ 26.8 |
COMMITMENTS AND CONTINGENCIES Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Loss Contingencies [Line Items] | ||
Loans to and accounts receivable from the Canadian Entities | $ 50.1 | $ 48.6 |
Contingent claims | 50.0 | 0.0 |
Contingent Liabilities recognized in Consolidated Financials | 38.5 | 37.2 |
Michigan Electricity Matters [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency Accrual | 13.6 | |
Fair Value, Inputs, Level 3 [Member] | ||
Loss Contingencies [Line Items] | ||
Loans to and accounts receivable from the Canadian Entities | 50.1 | 48.6 |
Contingent Liabilities recognized in Consolidated Financials | $ 38.5 | $ 37.2 |
SUBSEQUENT EVENTS SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2017 |
Jul. 18, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Subsequent Event [Line Items] | ||||
Contingent Liabilities recognized in Consolidated Financials | $ 38.5 | $ 37.2 | ||
Wabush Scully Mine Sale [Domain] | ||||
Subsequent Event [Line Items] | ||||
Contingent Liabilities recognized in Consolidated Financials | $ 38.5 | |||
Scenario, Forecast [Member] | Wabush Scully Mine Sale [Domain] | ||||
Subsequent Event [Line Items] | ||||
Gain on Sale of Wabush Scully Mine | $ 30.0 |
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