XML 56 R30.htm IDEA: XBRL DOCUMENT v3.20.2
ACQUISITION OF AK STEEL (Tables)
 6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Schedule of Business Acquisitions by Acquisition, by Acquisition [Table Text Block]
The fair value of the total purchase consideration was determined as follows:
 
(In Millions)
Fair value of Cliffs common shares issued for AK Steel outstanding common stock
$
617.6

Fair value of replacement equity awards
3.9

Fair value of AK Steel debt
913.6

Total purchase consideration
$
1,535.1


The fair value of AK Steel's debt included in the consideration is calculated as follows:
 
(In Millions)
Credit Facility
$
590.0

7.50% Senior Secured Notes due July 2023
323.6

Fair value of debt included in consideration
$
913.6
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable [Table Text Block]
The fair value of the total purchase consideration was determined as follows:
 
(In Millions)
Fair value of Cliffs common shares issued for AK Steel outstanding common stock
$
617.6

Fair value of replacement equity awards
3.9

Fair value of AK Steel debt
913.6

Total purchase consideration
$
1,535.1


The fair value of Cliffs common shares issued for outstanding shares of AK Steel common stock and with respect to Cliffs common shares underlying converted AK Steel equity awards that vested upon completion of the Merger is calculated as follows:
 
(In Millions, Except Per Share Amounts)
Number of shares of AK Steel common stock issued and outstanding
316.9

Exchange ratio
0.400

Shares of Cliffs common shares issued to AK Steel stockholders
126.8

Price per share of Cliffs common shares
$
4.87

Fair value of Cliffs common shares issued for AK Steel outstanding common stock
$
617.6
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
The preliminary purchase price allocation to assets acquired and liabilities assumed in the Merger was:
 
(In Millions)
 
Initial Allocation of Consideration
 
Measurement Period Adjustments
 
June 30,
2020
Cash and cash equivalents
$
37.7

 
$
2.0

 
$
39.7

Accounts receivable
666.0

 
(3.2
)
 
662.8

Inventories
1,562.8

 
(37.8
)
 
1,525.0

Other current assets
67.5

 
(14.5
)
 
53.0

Property, plant and equipment
2,184.4

 
2.9

 
2,187.3

Intangible assets
163.0

 
(15.0
)
 
148.0

Right of use asset, operating leases
225.9

 
(16.3
)
 
209.6

Other non-current assets
85.9

 
25.9

 
111.8

Accounts payable
(636.3
)
 
(2.9
)
 
(639.2
)
Accrued liabilities
(222.5
)
 
(2.1
)
 
(224.6
)
Other current liabilities
(181.8
)
 
7.0

 
(174.8
)
Long-term debt
(1,179.4
)
 
—

 
(1,179.4
)
Deferred income taxes
(19.7
)
 
(1.7
)
 
(21.4
)
Operating lease liability, non-current
(188.1
)
 
—

 
(188.1
)
Intangible liabilities
(140.0
)
 
65.0

 
(75.0
)
Pension and OPEB liabilities
(873.0
)
 
—

 
(873.0
)
Asset retirement obligations
(13.9
)
 
—

 
(13.9
)
Other non-current liabilities
(144.2
)
 
(5.7
)
 
(149.9
)
Net identifiable assets acquired
1,394.3

 
3.6

 
1,397.9

Goodwill
141.2

 
(4.0
)
 
137.2

Total net assets acquired
$
1,535.5

 
$
(0.4
)
 
$
1,535.1
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]
The preliminary purchase price allocated to identifiable intangible assets and liabilities acquired was:
 
(In Millions)
 
Weighted Average Life (In Years)
Intangible assets:
 
 
 
Customer relationships
$
77.0

 
18
Developed technology
60.0

 
17
Trade names and trademarks
11.0

 
10
Total identifiable intangible assets
$
148.0

 
17
Intangible liabilities:
 
 
 
Above-market supply contracts
$
(75.0
)
 
12
Business Acquisition, Pro Forma Information [Table Text Block]
The following table provides unaudited pro forma financial information, prepared in accordance with Topic 805, for the three and six months ended June 30, 2020 and 2019, as if AK Steel had been acquired as of January 1, 2019:
 
(In Millions)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2020
 
2019
 
2020
 
2019
Revenues
$
979.1

 
$
2,233.8

 
$
2,427.7

 
$
4,021.1

Net income (loss) attributable to Cliffs shareholders
(125.3
)
 
184.9

 
(163.7
)
 
128.3