(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Not Applicable | ||
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||||||||
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered: | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Item 9.01. | Financial Statements and Exhibits. |
(a)Financial Statements of Business Acquired. | ||||||||
The following audited and unaudited financial statements as required by Item 9.01(a) are attached hereto as Exhibits to this Current Report on Form 8-K/A and are incorporated by reference herein: | ||||||||
(i) | Exhibit 99.1 – The audited combined consolidated financial statements of ArcelorMittal USA LLC and Affiliates as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
(ii) | Exhibit 99.2 – The unaudited condensed combined consolidated financial statements of ArcelorMittal USA LLC and Affiliates as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
(iii) | Exhibit 99.3 – The audited financial statements of I/N Kote (a partnership between subsidiaries of ArcelorMittal USA LLC and Nippon Steel Corporation) (“I/N Kote”) as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
(iv) | Exhibit 99.4 – The unaudited condensed financial statements of I/N Kote as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
(v) | Exhibit 99.5 – The audited financial statements of I/N Tek (a partnership between subsidiaries of ArcelorMittal USA LLC and Nippon Steel Corporation) (“I/N Tek”) as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
(vi) | Exhibit 99.6 – The unaudited condensed financial statements of I/N Tek as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
(b)Pro Forma Financial Information. | ||||||||
The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the nine months ended September 30, 2020 give effect to the AM USA Transaction as if it had been consummated on January 1, 2019. The unaudited pro forma condensed combined statement of financial position as of September 30, 2020 has been prepared to give effect to the AM USA Transaction as if it had been consummated on September 30, 2020. The unaudited pro forma combined financial information, and the notes related thereto, are incorporated by reference as Exhibit 99.7 to this Current Report on Form 8-K/A and into this Item 9.01(b). | ||||||||
Exhibit Number | Description | |||||||
23.1* | Consent of Deloitte & Touche LLP related to ArcelorMittal USA LLC and Affiliates | |||||||
23.2* | Consent of Deloitte & Touche LLP related to I/N Kote | |||||||
23.3* | Consent of Deloitte & Touche LLP related to I/N Tek | |||||||
99.1* | The audited combined consolidated financial statements of ArcelorMittal USA LLC and Affiliates as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
99.2* | The unaudited condensed combined consolidated financial statements of ArcelorMittal USA LLC and Affiliates as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
99.3* | The audited financial statements of I/N Kote as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
99.4* | The unaudited condensed financial statements of I/N Kote as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
99.5* | The audited financial statements of I/N Tek as of December 31, 2019 and 2018 and for the years then ended, and the notes related thereto. | |||||||
99.6* | The unaudited condensed financial statements of I/N Tek as of September 30, 2020 and for the nine-months ended September 30, 2020 and 2019, and the notes related thereto. | |||||||
99.7* | The unaudited pro forma condensed combined statement of financial position as of September 30, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the nine months ended September 30, 2020, and the notes related thereto. | |||||||
101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | |||||||
* | Filed herein |
CLEVELAND-CLIFFS INC. | |||||||||||
Date: | February 8, 2021 | By: | /s/ James D. Graham | ||||||||
Name: | James D. Graham | ||||||||||
Title: | Executive Vice President, Chief Legal Officer & Secretary |
Delaware | 71-0871875 | ||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | ||||
1 South Dearborn, Chicago, Illinois | 60603 | ||||
(Address of Principal Executive Offices) | (Zip Code) |
(In Millions) | |||||||||||
Year Ended December 31 | |||||||||||
2019 | 2018 | ||||||||||
Net sales | $ | 10,169 | $ | 11,334 | |||||||
Costs and expenses: | |||||||||||
Cost of sales, excluding depreciation and amortization | (9,614) | (9,904) | |||||||||
Selling, general and administrative expenses | (369) | (420) | |||||||||
Other operating income (expense) | 68 | (41) | |||||||||
Depreciation and amortization | (359) | (356) | |||||||||
Asset impairments | (21) | — | |||||||||
Total | (10,295) | (10,721) | |||||||||
Operating income (loss) | (126) | 613 | |||||||||
Non-operating postretirement benefit expense | (59) | (63) | |||||||||
Interest and other financing expense, third party | (100) | (104) | |||||||||
Interest income, related party | 146 | 137 | |||||||||
Interest income, third party | 7 | 4 | |||||||||
Total | (6) | (26) | |||||||||
Income (loss) before income taxes | (132) | 587 | |||||||||
Benefit (provision) for income taxes | 53 | (2) | |||||||||
Net income (loss) | $ | (79) | $ | 585 |
(In Millions) | |||||||||||
Year Ended December 31 | |||||||||||
2019 | 2018 | ||||||||||
Net income (loss) | $ | (79) | $ | 585 | |||||||
Other comprehensive income (loss): | |||||||||||
Pension and Other Postretirement Employee Benefits: | |||||||||||
Net actuarial gains arising during the period | (32) | 222 | |||||||||
Prior service cost from plan amendments | — | (16) | |||||||||
Amortization of net actuarial losses and prior service recognized in earnings | (21) | 7 | |||||||||
Net | (53) | 213 | |||||||||
Derivative financial instruments designated as cash flow hedges: | |||||||||||
Change in value during the period | 319 | (509) | |||||||||
Recognized in earnings | 34 | 123 | |||||||||
Income tax provision | (49) | — | |||||||||
Net | 304 | (386) | |||||||||
Total other comprehensive income (loss) | 251 | (173) | |||||||||
Comprehensive income | $ | 172 | $ | 412 |
(In Millions) | |||||||||||
December 31 | |||||||||||
2019 | 2018 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 31 | $ | 96 | |||||||
Receivables, net of allowances of $35 in 2019 and $33 in 2018 | 77 | 114 | |||||||||
Receivables from related companies | 1,169 | 1,269 | |||||||||
Inventories | 1,641 | 1,817 | |||||||||
Investments in and advances to joint ventures | 4 | 3 | |||||||||
Prepaid expenses and other | 22 | 75 | |||||||||
Assets held for sale | — | 72 | |||||||||
Total current assets | 2,944 | 3,446 | |||||||||
Long-term assets: | |||||||||||
Property, plant and equipment, net | 3,760 | 3,723 | |||||||||
Finance Right-of-use assets, net | 134 | 171 | |||||||||
Operating Right-of-use assets, net | 72 | — | |||||||||
Investments in and advances to joint ventures | 124 | 136 | |||||||||
Receivable from related companies | 2,263 | 2,138 | |||||||||
Other assets | 101 | 89 | |||||||||
Total assets | $ | 9,398 | $ | 9,703 | |||||||
LIABILITIES AND MEMBER EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 781 | $ | 1,107 | |||||||
Payables to related companies | 615 | 647 | |||||||||
Accrued salaries, wages and benefits | 363 | 407 | |||||||||
Accrued taxes | 59 | 62 | |||||||||
Accrued expenses and other liabilities | 261 | 376 | |||||||||
Liabilities of assets held for sale | — | 38 | |||||||||
Unfavorable contracts and firm commitments | 32 | 11 | |||||||||
Debt | 531 | 296 | |||||||||
Finance lease obligations | 68 | 51 | |||||||||
Operating lease obligations | 17 | — | |||||||||
Total current liabilities | 2,727 | 2,995 | |||||||||
Long-term liabilities: | |||||||||||
Finance lease obligations | 172 | 231 | |||||||||
Operating lease obligations | 55 | — | |||||||||
Pension and other retiree benefits | 2,937 | 2,828 | |||||||||
Deferred income taxes | 3 | 3 | |||||||||
Other long-term liabilities | 396 | 710 | |||||||||
Total long-term liabilities | 3,563 | 3,772 | |||||||||
Total liabilities | 6,290 | 6,767 | |||||||||
Net parent equity: | |||||||||||
Net parent investment | 6,248 | 6,248 | |||||||||
Retained deficit | (4,329) | (4,250) | |||||||||
Accumulated other comprehensive income | 1,189 | 938 | |||||||||
Total parent equity | 3,108 | 2,936 | |||||||||
Total liabilities and parent equity | $ | 9,398 | $ | 9,703 |
(In Millions) | |||||||||||
Year Ended December 31 | |||||||||||
2019 | 2018 | ||||||||||
Operating activities: | |||||||||||
Net income (loss) | $ | (79) | $ | 585 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 359 | 356 | |||||||||
Deferred employee benefit costs | 124 | 140 | |||||||||
Stock compensation | — | 3 | |||||||||
Asset impairments | 21 | — | |||||||||
Undistributed earnings from joint ventures | (2) | (1) | |||||||||
Loss on firm commitments | 21 | (2) | |||||||||
Other non-cash operating expenses | 38 | (101) | |||||||||
Change in operating assets and liabilities: | |||||||||||
Receivables | 69 | (25) | |||||||||
Inventories | 197 | 13 | |||||||||
Prepaid expenses and other assets | 4 | (3) | |||||||||
Accounts payable | (407) | 48 | |||||||||
Payables to and receivables from related companies | (172) | 89 | |||||||||
Deferred employee benefit payments | (98) | (169) | |||||||||
Change in operating lease liabilities | (18) | — | |||||||||
Accrued expenses and other liabilities | (57) | 61 | |||||||||
Net cash provided by operating activities | — | 994 | |||||||||
Investing activities: | |||||||||||
Capital expenditures | (348) | (349) | |||||||||
(Increase) decrease in note receivable from related companies | 270 | (600) | |||||||||
Investment in, advances to and distributions from joint ventures, net | — | 1 | |||||||||
Proceeds from sale of property, plant and equipment and joint venture | 47 | 50 | |||||||||
Increase in other assets and other deposits, net | (210) | (31) | |||||||||
Net cash used in investing activities | (241) | (929) | |||||||||
Financing activities: | |||||||||||
Proceeds from asset backed bank loan | 300 | 11 | |||||||||
Payments of asset backed bank loan | (300) | (11) | |||||||||
Payments of finance leases | (54) | (43) | |||||||||
Payable to banks | 235 | (203) | |||||||||
Deferred financing costs | (5) | — | |||||||||
Net cash provided by (used in) financing activities | 176 | (246) | |||||||||
Net change in cash and cash equivalents | (65) | (181) | |||||||||
Cash and cash equivalents — beginning of year | 96 | 277 | |||||||||
Cash and cash equivalents — end of year | $ | 31 | $ | 96 | |||||||
Supplemental disclosures of noncash operating, investing and financing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | 16 | $ | 34 | |||||||
Capital lease obligations | 9 | (8) | |||||||||
Reclassification from supplier payable to debt | 235 | (203) | |||||||||
Cash paid during the year for: | |||||||||||
Interest (net of amount capitalized) | $ | 44 | $ | 50 | |||||||
Income taxes (received) paid, net | (6) | (11) |
(In Millions) | |||||||||||||||||||||||
Net Parent Investment | Retained Deficit | Accumulated Other Comprehensive Income (Loss) | Total Parent Equity | ||||||||||||||||||||
Balance at January 1, 2018 | $ | 6,245 | $ | (4,835) | $ | 1,111 | $ | 2,521 | |||||||||||||||
Net Income | — | 585 | — | 585 | |||||||||||||||||||
Other comprehensive loss | — | — | (173) | (173) | |||||||||||||||||||
Stock based compensation | 3 | — | — | 3 | |||||||||||||||||||
Balance at December 31, 2018 | 6,248 | (4,250) | 938 | 2,936 | |||||||||||||||||||
Net loss | — | (79) | — | (79) | |||||||||||||||||||
Other comprehensive income | — | — | 251 | 251 | |||||||||||||||||||
Balance at December 31, 2019 | $ | 6,248 | $ | (4,329) | $ | 1,189 | $ | 3,108 |
2019 | 2018 | ||||||||||
Hot Rolled | 39 | % | 39 | % | |||||||
Cold Rolled | 22 | % | 23 | % | |||||||
Coated | 17 | % | 17 | % | |||||||
Plate | 9 | % | 10 | % | |||||||
Tin Plate | 2 | % | 2 | % | |||||||
Bars, Rail and Other | 11 | % | 9 | % | |||||||
100 | % | 100 | % |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Nominal amount of receivables sold | $ | 8,021 | $ | 8,941 | |||||||
Proceeds from sales | 7,989 | 8,909 | |||||||||
Loss on sales | 32 | 32 | |||||||||
Amount outstanding under the arrangement at period-end | 570 | 768 |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
First In First Out (FIFO) or average cost: | |||||||||||
Raw materials | $ | 803 | $ | 872 | |||||||
Finished and semi-finished goods | 1,463 | 1,655 | |||||||||
2,266 | 2,527 | ||||||||||
LIFO reserve | (625) | (710) | |||||||||
Total | $ | 1,641 | $ | 1,817 |
December 31 | |||||
2018 | |||||
Assets: | |||||
Receivables | $ | 29 | |||
Inventories | 22 | ||||
Property, plant and equipment | 21 | ||||
Total Assets | $ | 72 | |||
Liabilities: | |||||
Accounts payable.............................................................................................................................................................. | $ | 17 | |||
Accrued expenses and other liabilities | 5 | ||||
Pension and other retiree benefits | 16 | ||||
Total Liabilities | $ | 38 |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Land | $ | 200 | $ | 197 | |||||||
Buildings, mineral reserves and land improvements | 649 | 640 | |||||||||
Machinery and equipment | 6,938 | 6,721 | |||||||||
Construction in progress | 309 | 278 | |||||||||
Total | 8,096 | 7,836 | |||||||||
Accumulated depreciation | (4,336) | (4,113) | |||||||||
Total property, plant and equipment, net | $ | 3,760 | $ | 3,723 |
Name | Ownership Percentage | Description | ||||||||||||
Double G Coatings | 50.0% | 270,000 ton capacity sheet coating line producing galvanized and Galvalume. | ||||||||||||
Empire Iron Mining | 21.0% | Mine and pelletizing plant; sold in 2017. | ||||||||||||
Hibbing Taconite | 62.3% | Mine and pelletizing plant. | ||||||||||||
I/N Kote | 50.0% | 1.0 million ton capacity sheet coating facility. | ||||||||||||
I/N Tek | 60.0% | 1.7 million ton capacity cold-rolling mill. | ||||||||||||
PCI Associates | 50.0% | Pulverized coal injection facility. |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Results for the year: | |||||||||||
Gross revenue | $ | 698 | $ | 753 | |||||||
Costs and expenses | 584 | 662 | |||||||||
Net income | $ | 114 | $ | 91 |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Financial position at December 31: | |||||||||||
Current assets | $ | 172 | $ | 178 | |||||||
Total assets | 395 | 398 | |||||||||
Current liabilities | 61 | 70 | |||||||||
Total liabilities | 206 | 222 | |||||||||
Net assets | $ | 189 | $ | 176 |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Supplier payables with extended terms | $ | 531 | $ | 296 |
December 31, 2019 | |||||||||||
Finance Leases | Operating Leases | Total | |||||||||
Right-of-use assets, net of amortization | $ | 134 | $ | 72 | $ | 206 | |||||
Lease liabilities (current) | 68 | 17 | 85 | ||||||||
Lease liabilities (long-term) | 172 | 55 | 227 | ||||||||
Total lease liabilities | $ | 240 | $ | 72 | $ | 312 | |||||
Weighted average remaining lease term (in months) | 45 | 67 | |||||||||
Weighted average discount rate | 16.9 | % | 4.9 | % |
2019 | |||||
Finance lease costs: | |||||
Amortization of right-of-use assets | $ | 45 | |||
Interest on lease liabilities | 42 | ||||
Operating lease costs | 18 | ||||
Short-term lease costs | 83 | ||||
Variable lease costs | 15 | ||||
Total lease costs | $ | 203 |
2019 | |||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases (rental payments) | $ | 18 | |||
Operating cash flows from finance leases (interest expense) | 42 | ||||
Financing cash flows from finance leases (principal payments) | 54 | ||||
Right-of-use assets obtained in exchange for lease liabilities: | |||||
Operating leases | 2 | ||||
Finance leases | 20 |
Finance Leases | Operating Leases | ||||||||||
2020 | $ | 103 | $ | 20 | |||||||
2021 | 76 | 17 | |||||||||
2022 | 75 | 11 | |||||||||
2023 | 58 | 9 | |||||||||
2024 | 5 | 9 | |||||||||
Thereafter | 8 | 17 | |||||||||
Total future undiscounted lease payments | 325 | 83 | |||||||||
Less imputed interest | (85) | (11) | |||||||||
Total | $ | 240 | $ | 72 |
Capital Leases | Operating Leases | ||||||||||
2019 | $ | 93 | $ | 26 | |||||||
2020 | 100 | 19 | |||||||||
2021 | 73 | 16 | |||||||||
2022 | 72 | 10 | |||||||||
2023 | 55 | 8 | |||||||||
Thereafter | 12 | 20 | |||||||||
Total future undiscounted lease payments | 405 | 99 | |||||||||
Less imputed interest | (125) | ||||||||||
Total | $ | 280 |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Current receivables: | |||||||||||
Short term loan receivable with ArcelorMittal Treasury | $ | 546 | $ | 341 | |||||||
Trade and interest receivables with ArcelorMittal subsidiaries | 616 | 908 | |||||||||
Receivable with AM/NS Calvert | 4 | 8 | |||||||||
Receivable with I/N Tek | 1 | 1 | |||||||||
Receivable with I/N Kote | 2 | 11 | |||||||||
Current receivables from related companies | $ | 1,169 | $ | 1,269 | |||||||
Long-term receivables: | |||||||||||
Loans with ArcelorMittal Holdings LLC and ArcelorMittal USA Holdings II LLC | $ | 2,263 | $ | 2,138 | |||||||
Current payables: | |||||||||||
Trade payables with ArcelorMittal subsidiaries | $ | 390 | $ | 419 | |||||||
Loans with ArcelorMittal Holdings LLC and ArcelorMittal USA Holdings II LLC | 145 | 145 | |||||||||
Payable with AM/NS Calvert | 15 | 20 | |||||||||
Payable with I/N Tek | 50 | 46 | |||||||||
Payable with I/N Kote | 15 | 17 | |||||||||
Payables to related companies | $ | 615 | $ | 647 |
Year Ended December 31 | |||||||||||
2019 | 2018 | ||||||||||
Interest income on notes receivable from related companies | $ | 146 | $ | 137 | |||||||
ArcelorMittal charges for management, financial and legal services | 175 | 201 | |||||||||
Research and development fees from subsidiaries of ArcelorMittal | 42 | 44 | |||||||||
Gain on sale of right to use intellectual property | 46 | 46 | |||||||||
ArcelorMittal USA and affiliates purchases of inventory from subsidiaries of ArcelorMittal | 57 | 56 | |||||||||
ArcelorMittal USA and affiliates sales of inventory to subsidiaries of ArcelorMittal | 889 | 934 | |||||||||
Sales to I/N Kote | 321 | 329 | |||||||||
Tolling with I/N Tek | 167 | 168 | |||||||||
Sales commission with AM/NS Calvert | 31 | 29 | |||||||||
Derivative Liabilities | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||
Derivative instruments designated as cash flow hedges: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Accrued expenses and other liabilities | $ | 2 | Accrued expenses and other liabilities | $ | 1 | |||||||||||||||||
Iron ore supply contract | Accrued expenses and other liabilities | 39 | Accrued expenses and other liabilities | 115 | |||||||||||||||||||
Iron ore supply contract | Other long-term liabilities | 138 | Other long-term liabilities | 453 | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 179 | $ | 569 | |||||||||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Accrued expenses and other liabilities | $ | 1 | Accrued expenses and other liabilities | $ | 1 | |||||||||||||||||
Iron ore supply contract | Accounts payable | 11 | Accounts payable | 20 | |||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 12 | $ | 21 | |||||||||||||||||||
Total derivative liabilities | $ | 191 | $ | 590 |
Amount of Gain or (Loss) Recognized in OCI on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | |||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||
Derivatives Designated in Cash Flow Hedging Relationships: | |||||||||||||||||||||||||||||
Base metal contracts | $ | (4) | $ | (10) | Cost of Sales | $ | (3) | $ | (6) | ||||||||||||||||||||
Iron ore supply contract | 323 | (499) | Sales | (31) | (117) | ||||||||||||||||||||||||
Total | $ | 319 | $ | (509) | $ | (34) | $ | (123) |
Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | ||||||||||||||||
2019 | 2018 | ||||||||||||||||
Derivatives not designed in a hedging relationship: | |||||||||||||||||
Iron ore supply contact | Other operating income (expense) | $ | 36 | $ | (71) |
Commodity | Notional Amount | |||||||
Base metal contracts | 8,528 Metric Tons | |||||||
Iron ore supply contract | 54,880,000 Net Tons |
Commodity | Notional Amount | |||||||
Base metal contracts | 2,284 Metric Tons | |||||||
Iron ore supply contract | 1,762,970 Net Tons |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Commodity derivatives | $ | — | $ | 3 | $ | 188 | $ | 191 | |||||||||||||||
Net liabilities | $ | — | $ | 3 | $ | 188 | $ | 191 | |||||||||||||||
December 31, 2018 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Commodity derivatives | $ | — | $ | 2 | $ | 588 | $ | 590 | |||||||||||||||
Net liabilities | $ | — | $ | 2 | $ | 588 | $ | 590 |
2019 | 2018 | ||||||||||
Beginning balance | $ | (588) | $ | (306) | |||||||
Total losses included in earnings | 5 | (188) | |||||||||
Included in other comprehensive income (loss) | 354 | (382) | |||||||||
Settlements | 41 | 288 | |||||||||
Ending balance | $ | (188) | $ | (588) | |||||||
2019 | |||||||||||
Total unrealized losses included in 2019 earnings attributable to liabilities held at December 31, 2019 | $ | (4) | |||||||||
Total unrealized gains included in 2019 other comprehensive income attributable to liabilities held at December 31, 2019 | $ | 239 |
Date of Grant | Number of Units | Grant Type | Number of Employees | |||||||||||||||||
December 2018 | 139,300 | PSU | 48 | |||||||||||||||||
December 2019 | 198,590 | PSU | 47 |
Restricted share unit (RSU) | Performance share unit (PSU) | |||||||||||||||||||||||||
Number of shares | Fair Value per share | Number of shares | Fair value per share | |||||||||||||||||||||||
Outstanding, January 1, 2018 | 50,839 | $ | 17.73 | 842,088 | $ | 14.90 | ||||||||||||||||||||
Granted | — | — | 139,300 | 21.31 | ||||||||||||||||||||||
Exercised | (49,302) | 17.93 | (27,730) | 29.24 | ||||||||||||||||||||||
Forfeited | (1,537) | 11.49 | (45,891) | 19.59 | ||||||||||||||||||||||
Outstanding, December 31, 2018 | — | — | 907,767 | 15.21 | ||||||||||||||||||||||
Granted* | — | 198,590 | 18.28 | |||||||||||||||||||||||
Exercised | — | — | (207,138) | 13.48 | ||||||||||||||||||||||
Forfeited | — | — | (193,578) | 14.45 | ||||||||||||||||||||||
Outstanding, December 31, 2019 | — | 705,641 | 17.07 |
Fair Value Per share | Number of shares | Maturity | ||||||||||||
$13.17 | 288,780 | January 1, 2021 | ||||||||||||
18.42 | 98,511 | January 1, 2021 | ||||||||||||
21.31 | 127,850 | January 1, 2022 | ||||||||||||
18.57 | 190,500 | January 1, 2023 |
2019 | 2018 | ||||||||||||||||||||||
Shares | Weighted Average Price | Shares | Weighted Average Price | ||||||||||||||||||||
Options outstanding — beginning of the year | 320,033 | $ | 100.41 | 570,437 | $ | 152.78 | |||||||||||||||||
Expired | (179,451) | 106.77 | (250,404) | 219.71 | |||||||||||||||||||
Transfers | (5,334) | 100.56 | — | ||||||||||||||||||||
Options outstanding and exercisable — end of year | 135,248 | $ | 91.98 | 320,033 | $ | 100.41 |
Grant Date | Exercise Prices | Shares Outstanding | Weighted Average Life | Options Exercisable | ||||||||||||||||||||||
August 2010 | $91.98 | 135,248 | 0.59 | 135,248 |
Outstanding | Exercisable | ||||||||||
December 31, 2019 | 0.59 years | 0.59 years | |||||||||
December 31, 2018 | 1.10 years | 1.10 years |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Payable to multiemployer pension plan | $ | 12 | $ | 11 | |||||||
Defined benefit pensions (including supplemental benefits plans) | 604 | 577 | |||||||||
Other postretirement benefits | 2,430 | 2,386 | |||||||||
Total | $ | 3,046 | $ | 2,974 | |||||||
Amounts in current accrued salaries, wages, and benefits for: | |||||||||||
Multiemployer pension plan | $ | (12) | $ | (11) | |||||||
Defined benefit pensions | (4) | (5) | |||||||||
Other postretirement benefits | (101) | (114) | |||||||||
Amount in liabilities of assets held for sale | — | (16) | |||||||||
Amount in long-term assets | 8 | — | |||||||||
Long-term pension and other retiree benefits | $ | 2,937 | $ | 2,828 |
Pension Fund | Steelworkers Pension Trust | American Maritime Officers Plan | ||||||
EIN/Pension Plan Number | EIN 23-6648508 /No. 499 | EIN 13-1936709/No. 1 | ||||||
Pension Protection Act Zone Status 2019 and Prior | Safe | Safe | ||||||
FIP/RP Status Pending/Implemented | N/A | Implemented | ||||||
Contributions in 2019 | $82 | Less than $1 | ||||||
Contributions in 2018 | $65 | Less than $1 | ||||||
Surcharge Imposed | No | No | ||||||
Expiration Date of Collective Bargaining Agreement | Sept. 1, 2022 | July 31, 2021 |
Pension | Other Benefits | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation - beginning of year | $ | 3,219 | $ | 3,455 | $ | 2,879 | $ | 3,237 | |||||||||||||||
Service cost | 25 | 30 | 39 | 48 | |||||||||||||||||||
Interest cost | 128 | 118 | 122 | 118 | |||||||||||||||||||
Net benefits paid | (259) | (256) | (138) | (155) | |||||||||||||||||||
Net actuarial loss (gain) | 330 | (151) | 24 | (359) | |||||||||||||||||||
Plan amendment | — | 24 | — | (10) | |||||||||||||||||||
Benefit obligation - end of year | 3,443 | 3,220 | 2,926 | 2,879 | |||||||||||||||||||
Accumulated benefit obligation for pensions | 3,430 | 3,213 | n/a | n/a | |||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets - beginning of year | 2,642 | 2,952 | 493 | 538 | |||||||||||||||||||
Net contributions | 11 | 46 | 87 | 122 | |||||||||||||||||||
Benefits paid | (259) | (256) | (139) | (155) | |||||||||||||||||||
Actual return on plan assets | 445 | (100) | 54 | (12) | |||||||||||||||||||
Fair value of plan assets - end of year | 2,839 | 2,642 | 495 | 493 | |||||||||||||||||||
Funded status of plan: | |||||||||||||||||||||||
Unfunded obligation | (604) | (577) | (2,430) | (2,386) | |||||||||||||||||||
Recognized in accumulated other comprehensive income: | |||||||||||||||||||||||
Actuarial loss (gain) | 769 | 783 | (433) | (437) | |||||||||||||||||||
Prior service cost (credit) | 27 | 32 | (377) | (436) | |||||||||||||||||||
Total | 796 | 815 | (810) | (873) | |||||||||||||||||||
Net deferred cost (accrued) | $ | 192 | $ | 238 | $ | (3,240) | $ | (3,259) |
Pension | Other Benefits | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Discount rate used to calculate periodic benefit cost: | |||||||||||||||||||||||
Legacy retirees | n/a | n/a | 4.11% | 3.58% | |||||||||||||||||||
Other retirees | 4.12% | 3.58% | 4.36% | 3.81% | |||||||||||||||||||
Discount rate used to value year-end obligation: | |||||||||||||||||||||||
Legacy retirees | n/a | n/a | 2.98% | 4.11% | |||||||||||||||||||
Other retirees | 3.01% | 4.12% | 3.36% | 4.36% | |||||||||||||||||||
Expected long-term return on plan assets: | |||||||||||||||||||||||
Legacy retirees | n/a | n/a | 4.00% | 4.50% | |||||||||||||||||||
Other retirees | 5.74% | 5.71% | 7.00% | 7.00% | |||||||||||||||||||
Average rate of compensation increase | 2.50% | 2.50% | n/a | n/a | |||||||||||||||||||
Projected health care cost trend rate: | |||||||||||||||||||||||
Pre-Medicare | n/a | n/a | 6.55% | 6.90% | |||||||||||||||||||
Post-Medicare | n/a | n/a | 3.66% | 2.50% | |||||||||||||||||||
Pre and Post-Medicare for Legacy retirees | n/a | n/a | (2.54)% | (3.12)% | |||||||||||||||||||
Ultimate trend rate | n/a | n/a | 4.50% | 4.50% | |||||||||||||||||||
Year ultimate trend rate is reached | n/a | n/a | 2028 | 2028 |
Pension | Other Benefits | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Net periodic benefit cost: | |||||||||||||||||||||||
Service cost | $ | 25 | $ | 30 | $ | 39 | $ | 48 | |||||||||||||||
Interest cost | 127 | 118 | 122 | 118 | |||||||||||||||||||
Expected return on plan assets | (150) | (161) | (20) | (23) | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Net actuarial loss (gain) | 49 | 67 | (14) | — | |||||||||||||||||||
Prior service cost (credit) | 5 | 2 | (59) | (59) | |||||||||||||||||||
Net periodic benefit cost (credit) | $ | 56 | $ | 56 | $ | 68 | $ | 84 |
Pension | Other Benefits | ||||||||||
2020 | $ | 252 | $ | 144 | |||||||
2021 | 250 | 143 | |||||||||
2022 | 249 | 141 | |||||||||
2023 | 246 | 142 | |||||||||
2024 | 242 | 142 | |||||||||
2025 to 2029 | 1,064 | 710 |
Pension | Other Benefits | ||||||||||
Equity securities — domestic | 20 to 60% | 20 | % | ||||||||
Equity securities — international | 10 to 3 % | 10 | % | ||||||||
Fixed income (including cash) | 15 to 100% | 70 | % | ||||||||
Real estate | 0 to 10% | — | % | ||||||||
Alternative investments | 0 to 15% | — | % | ||||||||
Total | 100 | % | 100 | % |
Pension Assets | Other Benefit Assets | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
December 31, 2019: | |||||||||||||||||||||||||||||
Equity securities — domestic | $ | 186 | $ | 652 | $ | — | $ | 838 | $ | — | $ | 93 | $ | 2 | $ | 95 | |||||||||||||
Equity securities — international | 260 | 91 | — | 351 | — | 50 | — | 50 | |||||||||||||||||||||
Equity securities — emerging market | — | 65 | — | 65 | — | — | — | — | |||||||||||||||||||||
Fixed income (including cash) | 158 | 1,050 | — | 1,208 | 3 | 345 | — | 348 | |||||||||||||||||||||
Real estate | — | — | 103 | 103 | — | — | — | — | |||||||||||||||||||||
Alternative investments | — | 115 | 159 | 274 | — | — | 2 | 2 | |||||||||||||||||||||
Total | $ | 604 | $ | 1,973 | $ | 262 | $ | 2,839 | $ | 3 | $ | 488 | $ | 4 | $ | 495 | |||||||||||||
December 31, 2018: | |||||||||||||||||||||||||||||
Equity securities — domestic | $ | 190 | $ | 624 | $ | — | $ | 814 | $ | 2 | $ | 90 | $ | — | $ | 92 | |||||||||||||
Equity securities — international | 202 | 71 | — | 273 | 1 | 41 | — | 42 | |||||||||||||||||||||
Equity securities — emerging market | 26 | 50 | — | 76 | — | — | — | — | |||||||||||||||||||||
Fixed income (including cash) | 116 | 909 | — | 1,025 | 26 | 326 | — | 352 | |||||||||||||||||||||
Real estate | — | — | 154 | 154 | — | — | 3 | 3 | |||||||||||||||||||||
Alternative investments | — | 123 | 177 | 300 | — | — | 4 | 4 | |||||||||||||||||||||
Total | $ | 534 | $ | 1,777 | $ | 331 | $ | 2,642 | $ | 29 | $ | 457 | $ | 7 | $ | 493 |
2019 | 2018 | ||||||||||
United States | $ | (131) | $ | 587 | |||||||
Foreign | — | — | |||||||||
Total | $ | (131) | $ | 587 | |||||||
2019 | 2018 | ||||||||||
Current: | |||||||||||
Federal | $ | 2 | $ | (4) | |||||||
State | 2 | 2 | |||||||||
Deferred: | |||||||||||
Federal | 42 | (3) | |||||||||
State | 7 | 3 | |||||||||
Total | $ | 53 | $ | (2) | |||||||
2019 | 2018 | ||||||||||
Taxes at statutory rate | $ | 28 | $ | (123) | |||||||
Valuation allowance | (10) | 128 | |||||||||
State and local income taxes, net of federal effect | 9 | (1) | |||||||||
Percentage depletion | 19 | 20 | |||||||||
Base Erosion Anti-Abuse Tax | — | (2) | |||||||||
General business tax credits | 1 | — | |||||||||
Prior year return to provision adjustment | (5) | (7) | |||||||||
Other deferred adjustments | 16 | (14) | |||||||||
Other | (5) | (3) | |||||||||
Total | $ | 53 | $ | (2) |
December 31 | |||||||||||
2019 | 2018 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards and tax credits | $ | 547 | $ | 533 | |||||||
Employee benefit costs | 719 | 694 | |||||||||
Financial accruals and reserves | 49 | 136 | |||||||||
Environmental liabilities | 44 | 47 | |||||||||
Other | 65 | 62 | |||||||||
Total deferred tax assets | 1,424 | 1,472 | |||||||||
Deferred tax liabilities: | |||||||||||
Property, plant and equipment | (419) | (442) | |||||||||
Inventory | — | (11) | |||||||||
Other | (13) | (14) | |||||||||
Total deferred tax liabilities | (432) | (467) | |||||||||
Valuation allowance | (995) | (1,008) | |||||||||
Net deferred taxes | $ | (3) | $ | (3) |
2020 | $ | 2,872 | ||||||
2021 | 1,234 | |||||||
2022 | 1,085 | |||||||
2023 | 958 | |||||||
2024 | 662 | |||||||
Thereafter | 1,171 | |||||||
Total | $ | 6,811 |
(In Millions) | |||||||||||||||||||||||
Environmental Liabilities | Asset Retirement Obligations | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Balance - beginning of year | $ | 121 | $ | 127 | $ | 75 | $ | 78 | |||||||||||||||
Accretion and changes in estimates and timing of spending | 6 | 5 | 2 | 3 | |||||||||||||||||||
Spending | (9) | (11) | (1) | (6) | |||||||||||||||||||
Balance - end of year | 118 | 121 | 76 | 75 | |||||||||||||||||||
In current accrued expenses and other liabilities | (12) | (15) | (2) | (3) | |||||||||||||||||||
In other long-term liabilities | 106 | 106 | 74 | 72 | |||||||||||||||||||
Undiscounted amount | $ | 178 | $ | 184 | $ | 120 | $ | 122 |
2020 | $ | 15 | ||||||
2021 | 12 | |||||||
2022 | 20 | |||||||
2023 | 18 | |||||||
2024 | 8 |
Unrecognized pension and other postretirement benefit cost | Derivative instruments designated as cash flow hedges | Total AOCI | |||||||||||||||||||||||||||||||||||||||
Gross | Income Taxes | Net of Taxes | Gross | Income Taxes | Net of Taxes | Net of Taxes | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | (157) | 1,265 | 1,108 | 3 | — | 3 | 1,111 | ||||||||||||||||||||||||||||||||||
Other comprehensive income before reclassifications | 206 | — | 206 | (509) | — | (509) | (303) | ||||||||||||||||||||||||||||||||||
Reclassified from AOCI | 7 | — | 7 | 123 | — | 123 | 130 | ||||||||||||||||||||||||||||||||||
Net current period other comprehensive income | 213 | — | 213 | (386) | — | (386) | (173) | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 56 | 1,265 | 1,321 | (383) | — | (383) | 938 | ||||||||||||||||||||||||||||||||||
Other comprehensive income before reclassifications | (32) | — | (32) | 319 | (49) | 270 | 238 | ||||||||||||||||||||||||||||||||||
Reclassified from AOCI | (21) | — | (21) | 34 | — | 34 | 13 | ||||||||||||||||||||||||||||||||||
Net current period other comprehensive income | (53) | — | (53) | 353 | (49) | 304 | 251 | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | 3 | $ | 1,265 | $ | 1,268 | $ | (30) | $ | (49) | $ | (79) | $ | 1,189 |
Amount Reclassified from AOCI | Affected line in Statement of Operations | ||||||||||||||||
2019 | 2018 | ||||||||||||||||
Other comprehensive income items: | |||||||||||||||||
Amortization of pension and other postretirement benefit costs | $ | (21) | $ | 7 | Non-operating costs | ||||||||||||
Losses from cash flow hedges | 3 | 6 | Cost of sales | ||||||||||||||
Losses from cash flow hedges | 31 | 117 | Sales | ||||||||||||||
Total reclassifications for the period | $ | 13 | $ | 130 |
Delaware | 71-0871875 | ||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | ||||
1 South Dearborn, Chicago, Illinois | 60603 | ||||
(Address of Principal Executive Offices) | (Zip Code) |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 68 | $ | 31 | |||||||
Receivables, net of allowances of $26 in 2020 and $35 in 2019 | 80 | 77 | |||||||||
Receivables from related companies | 511 | 1,169 | |||||||||
Inventories | 1,328 | 1,641 | |||||||||
Investments in and advances to joint ventures | 5 | 4 | |||||||||
Prepaid expenses and other | 38 | 22 | |||||||||
Total current assets | 2,030 | 2,944 | |||||||||
Long-term assets: | |||||||||||
Property, plant and equipment, net | 3,569 | 3,760 | |||||||||
Finance Right-of-use assets, net | 134 | 134 | |||||||||
Operating Right-of-use assets, net | 60 | 72 | |||||||||
Investments in and advances to joint ventures | 128 | 124 | |||||||||
Receivable from related companies | 2,358 | 2,263 | |||||||||
Other assets | 101 | 101 | |||||||||
Total assets | $ | 8,380 | $ | 9,398 | |||||||
LIABILITIES AND MEMBER EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 737 | $ | 781 | |||||||
Payables to related companies | 565 | 615 | |||||||||
Accrued salaries, wages and benefits | 361 | 363 | |||||||||
Accrued taxes | 58 | 59 | |||||||||
Accrued expenses and other liabilities | 100 | 261 | |||||||||
Unfavorable contracts and firm commitments | 34 | 32 | |||||||||
Debt | 436 | 531 | |||||||||
Finance lease obligations | 52 | 68 | |||||||||
Operating lease obligations | 16 | 17 | |||||||||
Total current liabilities | 2,359 | 2,727 | |||||||||
Long-term liabilities: | |||||||||||
Finance lease obligations | 178 | 172 | |||||||||
Operating lease obligations | 45 | 55 | |||||||||
Pension and other retiree benefits | 2,964 | 2,937 | |||||||||
Deferred income taxes | 3 | 3 | |||||||||
Other long-term liabilities | 441 | 396 | |||||||||
Total long-term liabilities | 3,631 | 3,563 | |||||||||
Total liabilities | 5,990 | 6,290 | |||||||||
Parent equity: | |||||||||||
Net parent investment | 6,250 | 6,248 | |||||||||
Retained deficit | (5,031) | (4,329) | |||||||||
Accumulated other comprehensive income | 1,171 | 1,189 | |||||||||
Total parent equity | 2,390 | 3,108 | |||||||||
Total liabilities and parent equity | $ | 8,380 | $ | 9,398 |
(In Millions) | ||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
Net sales | $ | 5,629 | $ | 8,001 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales, excluding depreciation and amortization | (5,794) | (7,448) | ||||||||||||||||||
Selling, general and administrative expenses | (243) | (283) | ||||||||||||||||||
Other operating income | 18 | 55 | ||||||||||||||||||
Depreciation and amortization | (309) | (262) | ||||||||||||||||||
Asset impairments | (26) | — | ||||||||||||||||||
Total | (6,354) | (7,938) | ||||||||||||||||||
Operating income (loss) | (725) | 63 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Non-operating postretirement benefit expense | (34) | (44) | ||||||||||||||||||
Interest and other financing expense, third party | (50) | (81) | ||||||||||||||||||
Interest income, related party | 103 | 110 | ||||||||||||||||||
Interest income, third party | 1 | 6 | ||||||||||||||||||
Total | 20 | (9) | ||||||||||||||||||
Income (loss) before income taxes | (705) | 54 | ||||||||||||||||||
Benefit for income taxes | 3 | — | ||||||||||||||||||
Net income (loss) | $ | (702) | $ | 54 |
(In Millions) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Net income (loss) | $ | (702) | $ | 54 | |||||||
Other comprehensive income (loss): | |||||||||||
Pension and Other Postretirement Employee Benefits: | |||||||||||
Net actuarial gains arising during the period | (9) | 2 | |||||||||
Amortization of net actuarial losses and prior service recognized in earnings | 13 | (14) | |||||||||
Net | 4 | (12) | |||||||||
Derivative financial instruments designated as cash flow hedges: | |||||||||||
Change in value during the period | (28) | 80 | |||||||||
Recognized in earnings | 6 | 36 | |||||||||
Net | (22) | 116 | |||||||||
Total other comprehensive income (loss) | (18) | 104 | |||||||||
Comprehensive income (loss) | $ | (720) | $ | 158 |
Net Parent Investment | Retained Deficit | Accumulated Other Comprehensive Income (Loss) | Total Parent Equity | ||||||||||||||||||||
Balance at December 31, 2019 | $ | 6,248 | $ | (4,329) | $ | 1,189 | $ | 3,108 | |||||||||||||||
Net loss | — | (702) | — | (702) | |||||||||||||||||||
Other comprehensive loss | — | — | (18) | (18) | |||||||||||||||||||
Stock based compensation | 2 | — | — | 2 | |||||||||||||||||||
Balance at September 30, 2020 | $ | 6,250 | $ | (5,031) | $ | 1,171 | $ | 2,390 |
Net Parent Investment | Retained Deficit | Accumulated Other Comprehensive Income (Loss) | Total Parent Equity | ||||||||||||||||||||
Balance at December 31, 2018 | $ | 6,248 | $ | (4,250) | $ | 938 | $ | 2,936 | |||||||||||||||
Net income | — | 54 | — | $ | 54 | ||||||||||||||||||
Other comprehensive income | — | — | 104 | 104 | |||||||||||||||||||
Stock based compensation | 2 | 2 | |||||||||||||||||||||
Balance at September 30, 2019 | $ | 6,250 | $ | (4,196) | $ | 1,042 | $ | 3,096 |
(In Millions) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities: | |||||||||||
Net income (loss) | $ | (702) | $ | 54 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 309 | 262 | |||||||||
Deferred employee benefit costs | 93 | 93 | |||||||||
Stock compensation | 2 | 2 | |||||||||
Asset impairments | 26 | — | |||||||||
Undistributed earnings from joint ventures | (13) | (14) | |||||||||
Loss on firm commitments | 3 | 59 | |||||||||
Other non-cash operating expenses | 50 | 44 | |||||||||
Change in operating assets and liabilities: | |||||||||||
Receivables | (3) | 31 | |||||||||
Inventories | 310 | 203 | |||||||||
Prepaid expenses and other assets | (7) | (5) | |||||||||
Accounts payable | (56) | (322) | |||||||||
Payables to and receivables from related companies | (168) | (134) | |||||||||
Deferred employee benefit payments | (62) | (77) | |||||||||
Change in operating lease liabilities | (12) | (13) | |||||||||
Accrued expenses and other liabilities | (27) | (118) | |||||||||
Net cash provided by (used in) operating activities | (257) | 65 | |||||||||
Investing activities: | |||||||||||
Capital expenditures | (218) | (262) | |||||||||
Decrease in note receivable from related companies | 330 | 10 | |||||||||
Investment in, advances to and distributions from joint ventures, net | 6 | 3 | |||||||||
Proceeds from sale of property, plant and equipment and joint venture | 5 | 46 | |||||||||
Decrease (increase) in other assets and other deposits, net | 301 | (39) | |||||||||
Net cash provided by (used in) investing activities | 424 | (242) | |||||||||
Financing activities: | |||||||||||
Proceeds from asset backed bank loan | 290 | 300 | |||||||||
Payments of asset backed bank loan | (290) | (300) | |||||||||
Payments of finance leases | (47) | (39) | |||||||||
Payable to banks | (83) | 193 | |||||||||
Deferred financing costs | — | (5) | |||||||||
Net cash provided by (used in) financing activities | (130) | 149 | |||||||||
Net change in cash and cash equivalents | 37 | (28) | |||||||||
Cash and cash equivalents — beginning of period | 31 | 96 | |||||||||
Cash and cash equivalents — end of period | $ | 68 | $ | 68 | |||||||
Supplemental disclosures of noncash operating, investing and financing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | (105) | $ | (47) | |||||||
Finance lease obligations | 38 | — | |||||||||
Reclassification from supplier payable to debt | (95) | 193 | |||||||||
Cash paid during the year for: | |||||||||||
Interest (net of amount capitalized) | $ | 28 | $ | 33 | |||||||
Income taxes (received) paid, net | (3) | (1) |
2020 | 2019 | ||||||||||
Hot Rolled | 40 | % | 38 | % | |||||||
Cold Rolled | 21 | % | 22 | % | |||||||
Coated | 16 | % | 18 | % | |||||||
Plate | 10 | % | 9 | % | |||||||
Tin Plate | 3 | % | 2 | % | |||||||
Bars, Rail and Other | 10 | % | 11 | % | |||||||
100 | % | 100 | % |
(In Millions) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Nominal amount of receivables sold | $ | 4,842 | $ | 6,351 | |||||||
Proceeds from sales | 4,829 | 6,325 | |||||||||
Loss on sales | 13 | 26 | |||||||||
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Amount outstanding under the arrangement at period-end | 551 | 570 |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
First In First Out (FIFO) or average cost: | |||||||||||
Raw materials | $ | 725 | $ | 803 | |||||||
Finished and semi-finished goods | 1,040 | 1,463 | |||||||||
1,765 | 2,266 | ||||||||||
LIFO reserve | (437) | (625) | |||||||||
Total | $ | 1,328 | $ | 1,641 |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Land | $ | 200 | $ | 200 | |||||||
Buildings, mineral reserves and land improvements | 652 | 649 | |||||||||
Machinery and equipment | 7,030 | 6,938 | |||||||||
Construction in progress | 229 | 309 | |||||||||
Total | 8,111 | 8,096 | |||||||||
Accumulated depreciation | (4,542) | (4,336) | |||||||||
Total property, plant and equipment, net | $ | 3,569 | $ | 3,760 |
Name | Ownership Percentage | Description | ||||||||||||
Double G Coatings | 50.0% | 270,000 ton capacity sheet coating line producing galvanized and Galvalume. | ||||||||||||
Hibbing Taconite | 62.3% | Mine and pelletizing plant. | ||||||||||||
I/N Kote | 50.0% | 1.0 million ton capacity sheet coating facility. | ||||||||||||
I/N Tek | 60.0% | 1.7 million ton capacity cold-rolling mill. | ||||||||||||
PCI Associates | 50.0% | Pulverized coal injection facility. |
(In Millions) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Results for the year: | |||||||||||
Gross revenue | $ | 395 | $ | 512 | |||||||
Costs and expenses | 328 | 427 | |||||||||
Net income | $ | 67 | $ | 85 |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Financial position at period end: | |||||||||||
Current assets | $ | 208 | $ | 172 | |||||||
Total assets | 432 | 395 | |||||||||
Current liabilities | 80 | 61 | |||||||||
Total liabilities | 210 | 206 | |||||||||
Net assets | $ | 222 | $ | 189 |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Supplier payables with extended terms | $ | 436 | $ | 531 |
(In Millions) | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Current receivables: | |||||||||||
Short term loan receivable with ArcelorMittal Treasury | $ | 246 | $ | 546 | |||||||
Trade and interest receivables with ArcelorMittal subsidiaries | 252 | 616 | |||||||||
Receivable with AM/NS Calvert | 5 | 4 | |||||||||
Receivable with I/N Tek | 1 | 1 | |||||||||
Receivable with I/N Kote | 7 | 2 | |||||||||
Current receivables from related companies | $ | 511 | $ | 1,169 | |||||||
Long-term receivables: | |||||||||||
Loans with ArcelorMittal Holdings LLC and ArcelorMittal USA Holdings II LLC | $ | 2,358 | $ | 2,263 | |||||||
Current payables: | |||||||||||
Short term loan payable with ArcelorMittal Treasury | $ | 12 | $ | — | |||||||
Trade payables with ArcelorMittal subsidiaries | 309 | 390 | |||||||||
Loans with ArcelorMittal Holdings LLC and ArcelorMittal USA Holdings II LLC | 145 | 145 | |||||||||
Payable with AM/NS Calvert | 22 | 15 | |||||||||
Payable with I/N Tek | 45 | 50 | |||||||||
Payable with I/N Kote | 32 | 15 | |||||||||
Payables to related companies | $ | 565 | $ | 615 |
(In Millions) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Interest income on notes receivable from related companies | $ | 103 | $ | 110 | |||||||
ArcelorMittal charges for management, financial and legal services | 98 | 138 | |||||||||
Research and development fees from subsidiaries of ArcelorMittal | 25 | 31 | |||||||||
Gain on sale of right to use intellectual property | — | 34 | |||||||||
ArcelorMittal USA and affiliates purchases of inventory from subsidiaries of ArcelorMittal | 7 | 57 | |||||||||
ArcelorMittal USA and affiliates sales of inventory to subsidiaries of ArcelorMittal | 464 | 702 | |||||||||
Sales to I/N Kote | 154 | 249 | |||||||||
Tolling with I/N Tek | 108 | 123 | |||||||||
Sales commission with AM/NS Calvert | 17 | 25 |
(In Millions) | |||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||
Derivative instruments designated as cash flow hedges: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Prepaid expenses and other | $ | — | Prepaid expenses and other | $ | — | |||||||||||||||||
Total derivatives designated as hedging instruments | $ | — | $ | — | |||||||||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Prepaid expenses and other | $ | 1 | Accrued expenses and other liabilities | $ | — | |||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 1 | $ | — | |||||||||||||||||||
Total derivative assets | $ | 1 | $ | — |
(In Millions) | |||||||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||
Derivative instruments designated as cash flow hedges: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Accrued expenses and other liabilities | $ | — | Accrued expenses and other liabilities | $ | 2 | |||||||||||||||||
Base metal contracts (primarily zinc) | Other long-term liabilities | 1 | — | ||||||||||||||||||||
Iron ore supply contract | Accrued expenses and other liabilities | 47 | Accrued expenses and other liabilities | 39 | |||||||||||||||||||
Iron ore supply contract | Accounts payable | 19 | Accounts payable | — | |||||||||||||||||||
Iron ore supply contract | Other long-term liabilities | 143 | Other long-term liabilities | 138 | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 210 | $ | 179 | |||||||||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||||||||||||
Base metal contracts (primarily zinc) | Accrued expenses and other liabilities | $ | — | Accrued expenses and other liabilities | $ | 1 | |||||||||||||||||
Iron ore supply contract | Accounts payable | 4 | Accounts payable | 11 | |||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 4 | $ | 12 | |||||||||||||||||||
Total derivative liabilities | $ | 214 | $ | 191 |
Amount of Gain or (Loss) Recognized in OCI on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | |||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Derivatives Designated in Cash Flow Hedging Relationships: | |||||||||||||||||||||||||||||
Base metal contracts | (2) | (3) | Cost of Sales | (4) | (1) | ||||||||||||||||||||||||
Iron ore supply contract | (26) | 83 | Sales | (2) | (35) | ||||||||||||||||||||||||
Total | $ | (28) | $ | 80 | $ | (6) | $ | (36) |
Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | ||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
Derivatives not designed in a hedging relationship: | |||||||||||||||||
Iron ore supply contact | Other operating income | (10) | 33 | ||||||||||||||
Total | $ | (10) | $ | 33 |
Commodity | Notional Amount | |||||||
Base metal contracts | 8,106 Metric Tons | |||||||
Iron ore supply contract | 47,488,000 Net Tons |
Commodity | Notional Amount | |||||||
Base metal contracts | 4,717 Metric Tons | |||||||
Iron ore supply contract | 3,805,610 Net Tons |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Commodity derivatives | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Commodity derivatives | $ | — | $ | 1 | $ | 213 | $ | 214 | |||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Commodity derivatives | $ | — | $ | 3 | $ | 188 | $ | 191 |
(In Millions) | |||||||||||||||||||||||
Defined Benefit Pension Costs (Credits) | Other Postretirement Benefit Plans | ||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | 21 | $ | 19 | $ | 33 | $ | 30 | |||||||||||||||
Interest cost | 75 | 96 | 72 | 92 | |||||||||||||||||||
Expected return on plan assets | (111) | (113) | (15) | (16) | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Net actuarial loss (gain) | 64 | 36 | (10) | (11) | |||||||||||||||||||
Prior service cost (credit) | 4 | 4 | (44) | (44) | |||||||||||||||||||
Special termination benefits | 2 | — | 3 | — | |||||||||||||||||||
Net periodic benefit cost | $ | 55 | $ | 42 | $ | 39 | $ | 51 |
2020 (remaining period of year) | $ | 819 | ||||||
2021 | 1,710 | |||||||
2022 | 1,049 | |||||||
2023 | 934 | |||||||
2024 | 656 | |||||||
2025 | 596 | |||||||
Thereafter | 479 | |||||||
Total | $ | 6,243 |
(In Millions) | |||||||||||||||||||||||
Environmental Liabilities | Asset Retirement Obligations | ||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||
Total Balance | $ | 112 | $ | 118 | $ | 79 | $ | 76 | |||||||||||||||
Less current portion | 9 | 12 | 2 | 2 | |||||||||||||||||||
Long-term portion | $ | 103 | $ | 106 | $ | 77 | $ | 74 |
(In Millions) | |||||||||||||||||||||||
Environmental Liabilities | Asset Retirement Obligations | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Liability as of January 1 | $ | 118 | $ | 121 | $ | 76 | $ | 75 | |||||||||||||||
Accretion and changes in estimates and timing of spending | 8 | 6 | 3 | 2 | |||||||||||||||||||
Spending | (14) | (9) | — | (1) | |||||||||||||||||||
Liability of September 30 | $ | 112 | $ | 118 | $ | 79 | $ | 76 |
Unrecognized pension and other postretirement benefit cost | Derivative instruments designated as cash flow hedges | Total AOCI | |||||||||||||||||||||||||||||||||||||||
Gross | Income Taxes | Net of Taxes | Gross | Income Taxes | Net of Taxes | Net of Taxes | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | 3 | $ | 1,265 | $ | 1,268 | $ | (30) | $ | (49) | $ | (79) | $ | 1,189 | |||||||||||||||||||||||||||
Other comprehensive income before reclassifications | (9) | — | (9) | (28) | — | (28) | (37) | ||||||||||||||||||||||||||||||||||
Reclassified from AOCI | 13 | — | 13 | 6 | — | 6 | 19 | ||||||||||||||||||||||||||||||||||
Net current period other comprehensive income | 4 | — | 4 | (22) | — | (22) | (18) | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | 7 | $ | 1,265 | $ | 1,272 | $ | (52) | $ | (49) | $ | (101) | $ | 1,171 |
Unrecognized pension and other postretirement benefit cost | Derivative instruments designated as cash flow hedges | Total AOCI | |||||||||||||||||||||||||||||||||||||||
Gross | Income Taxes | Net of Taxes | Gross | Income Taxes | Net of Taxes | Net of Taxes | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | 56 | $ | 1,265 | $ | 1,321 | $ | (383) | $ | — | $ | (383) | $ | 938 | |||||||||||||||||||||||||||
Other comprehensive income before reclassifications | 2 | — | 2 | 80 | — | 80 | 82 | ||||||||||||||||||||||||||||||||||
Reclassified from AOCI | (14) | — | (14) | 36 | — | 36 | 22 | ||||||||||||||||||||||||||||||||||
Net current period other comprehensive income | (12) | — | (12) | 116 | — | 116 | 104 | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | 44 | $ | 1,265 | $ | 1,309 | $ | (267) | $ | — | $ | (267) | $ | 1,042 |
Amount Reclassified from AOCI | Affected line in Statement of Operations | ||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2020 | 2019 | ||||||||||||||||
Other comprehensive income (loss) items: | |||||||||||||||||
Amortization of pension and other postretirement benefit costs (credits) | $ | 13 | $ | (14) | Non-operating postretirement benefit expense | ||||||||||||
Losses from cash flow hedges | 4 | 1 | Cost of sales | ||||||||||||||
Losses from cash flow hedges | 2 | 35 | Sales | ||||||||||||||
Total reclassifications for the period | $ | 19 | $ | 22 |
2019 | 2018 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 1,155,468 | $ | 20,452,515 | |||||||
Accounts receivable – less allowances of – 2019 – $1,190,123; 2018 – $1,355,957 | 29,714,001 | 29,273,030 | |||||||||
Inventories | 63,448,669 | 53,705,007 | |||||||||
Receivables from related parties: | |||||||||||
AMUSA Kote, Inc. | 223,564 | — | |||||||||
NS Kote, Inc. | 223,564 | — | |||||||||
ArcelorMittal USA LLC–Burns Harbor | 4,947,600 | 3,954,966 | |||||||||
ArcelorMittal USA LLC | 9,288,612 | 11,598,130 | |||||||||
Total Current Assets | 109,001,478 | 118,983,648 | |||||||||
PROPERTY, PLANT, AND EQUIPMENT–At cost: | |||||||||||
Land and improvements | 7,407,789 | 7,407,789 | |||||||||
Building and improvements | 130,676,398 | 130,676,398 | |||||||||
Machinery and equipment | 514,465,806 | 513,073,542 | |||||||||
Construction in progress | 7,866,675 | 5,354,319 | |||||||||
Total property, plant, and equipment | 660,416,668 | 656,512,048 | |||||||||
Less accumulated depreciation and amortization | (568,590,799) | (562,949,178) | |||||||||
Property, plant, and equipment–net | 91,825,869 | 93,562,870 | |||||||||
OTHER ASSETS–Spares and repair parts | 9,052,996 | 8,750,884 | |||||||||
TOTAL | $ | 209,880,343 | $ | 221,297,402 | |||||||
LIABILITIES AND PARTNERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | 1,680,139 | $ | 2,461,614 | |||||||
Payable to related parties: | |||||||||||
ArcelorMittal USA LLC–Indiana Harbor East | 2,672,069 | 9,754,502 | |||||||||
I/N Tek | 361,027 | 174,459 | |||||||||
Nippon Steel & Sumitomo Metal USA | 32,274 | 32,146 | |||||||||
AMUSA Kote, Inc. | — | 2,137,234 | |||||||||
NS Kote, Inc. | — | 2,137,234 | |||||||||
Accrued interest to Partners | 277,048 | 299,536 | |||||||||
Other accrued liabilities | 9,678,665 | 11,751,321 | |||||||||
Current portion of capital loans from Partners | 7,284,462 | 5,344,834 | |||||||||
Total current liabilities | 21,985,684 | 34,092,880 | |||||||||
LONG-TERM LIABILITIES: | |||||||||||
Long-term capital loans from Partners | 8,072,386 | 11,317,073 | |||||||||
Deferred employee benefits | 49,030,100 | 43,925,521 | |||||||||
Total long-term liabilities | 57,102,486 | 55,242,594 | |||||||||
Total liabilities | 79,088,170 | 89,335,474 | |||||||||
COMMITMENTS AND CONTINGENCIES (Note 5 and Note 9) | |||||||||||
Partners’ equity: | |||||||||||
Contributed capital—net of distributions | 130,729,722 | 124,428,191 | |||||||||
Retained earnings—net of distributions | 9,467,967 | 14,513,782 | |||||||||
Accumulated other comprehensive loss | (9,405,516) | (6,980,045) | |||||||||
TOTAL PARTNERS’ EQUITY | 130,792,173 | 131,961,928 | |||||||||
TOTAL | $ | 209,880,343 | $ | 221,297,402 |
2019 | 2018 | ||||||||||
SALES REVENUE | $ | 498,132,379 | $ | 552,768,095 | |||||||
OPERATING COSTS AND EXPENSES: | |||||||||||
Production costs — excluding depreciation and amortization disclosed below | 140,369,587 | 170,627,330 | |||||||||
Substrate costs (Note 5) | 313,544,975 | 333,643,983 | |||||||||
Depreciation and amortization | 5,875,266 | 7,451,949 | |||||||||
Total operating costs and expenses | 459,789,828 | 511,723,262 | |||||||||
OPERATING INCOME | 38,342,551 | 41,044,833 | |||||||||
OTHER (EXPENSE) INCOME: | |||||||||||
Non-operating post retirement benefit expense | (196,544) | (261,931) | |||||||||
Interest expense to Partners | (451,316) | (618,245) | |||||||||
Interest income | 513,894 | 579,082 | |||||||||
Total other expense, net | (133,966) | (301,094) | |||||||||
NET INCOME | 38,208,585 | 40,743,739 | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME: | |||||||||||
Defined benefit plans: | |||||||||||
Net actuarial (losses) gains arising during period | (1,882,222) | 868,260 | |||||||||
Prior service cost from plan amendments | — | (1,515,225) | |||||||||
Amortization of actuarial losses and prior service cost (credit) | (543,249) | (555,573) | |||||||||
Total other comprehensive (loss) income | (2,425,471) | (1,202,538) | |||||||||
COMPREHENSIVE INCOME | $ | 35,783,114 | $ | 39,541,201 |
Contributed Capital - Net of Distributions | Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity | ||||||||||||||||||||
Balance January 1, 2018 | $ | 119,572,707 | $ | 20,299,993 | $ | (5,777,507) | $ | 134,095,193 | |||||||||||||||
Contributions from partners (Note 5) | 4,855,484 | — | — | 4,855,484 | |||||||||||||||||||
Distributions to partners - return on investment | — | (46,529,950) | — | (46,529,950) | |||||||||||||||||||
Net income | — | 40,743,739 | — | 40,743,739 | |||||||||||||||||||
Other comprehensive loss | — | — | (1,202,538) | (1,202,538) | |||||||||||||||||||
Balance December 31, 2018 | 124,428,191 | 14,513,782 | (6,980,045) | 131,961,928 | |||||||||||||||||||
Contributions from partners (Note 5) | 6,301,531 | — | — | 6,301,531 | |||||||||||||||||||
Distributions to partners - return on investment | — | (43,254,400) | — | (43,254,400) | |||||||||||||||||||
Net income | — | 38,208,585 | — | 38,208,585 | |||||||||||||||||||
Other comprehensive income | — | — | (2,425,471) | (2,425,471) | |||||||||||||||||||
Balance December 31, 2019 | $ | 130,729,722 | $ | 9,467,967 | $ | (9,405,516) | $ | 130,792,173 |
2019 | 2018 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Income | $ | 38,208,585 | $ | 40,743,739 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 5,875,266 | 7,451,949 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (440,971) | (2,995,241) | |||||||||
Inventories | (9,733,086) | 7,537,470 | |||||||||
Other assets | (302,112) | (169,388) | |||||||||
Accounts payable | (762,256) | 1,118,109 | |||||||||
Payables to and receivables from related parties | (5,578,853) | 6,053,406 | |||||||||
Accrued interest | (22,488) | (75,654) | |||||||||
Other accrued liabilities | (2,072,655) | 1,405,035 | |||||||||
Deferred employee benefits | 2,679,108 | (1,191,441) | |||||||||
Net cash used in operating activities | 27,850,538 | 59,877,984 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES– | |||||||||||
Capital expenditures | (4,168,060) | (3,813,080) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from capital loans from Partners | 4,037,464 | — | |||||||||
Principal payments on capital loans from Partners | (5,342,523) | (5,155,966) | |||||||||
Contributions from Partners: | |||||||||||
AMUSA Kote, Inc. | 2,427,742 | 3,891,753 | |||||||||
NS Kote, Inc. | 2,427,742 | 3,891,753 | |||||||||
Distributions to Partners: | |||||||||||
AMUSA Kote, Inc. | (23,264,975) | (22,176,450) | |||||||||
NS Kote, Inc. | (23,264,975) | (22,176,450) | |||||||||
Net cash used in financing activities | (42,979,525) | (41,725,360) | |||||||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (19,297,047) | 14,339,544 | |||||||||
CASH AND CASH EQUIVALENTS–Beginning of year | 20,452,515 | 6,112,971 | |||||||||
CASH AND CASH EQUIVALENTS–End of year | $ | 1,155,468 | $ | 20,452,515 | |||||||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
Capital expenditures included in accounts payable at period-end | $ | 98,011 | $ | 117,239 | |||||||
Distributions declared included in payable to Partners | $ | (5,854,400) | $ | (9,129,950) | |||||||
Capital contributions receivable from Partners | $ | (6,301,531) | $ | 4,855,484 | |||||||
Cash paid during the year for interest | $ | 638,228 | $ | 765,773 |
Building | 45 years | |||||||||||||
Land improvements | 20 years | |||||||||||||
Computer equipment and software | 5 years | |||||||||||||
Furniture and fixtures | 10 years |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Steel inventories: | |||||||||||
Raw substrate | $ | 658,316 | $ | 2,061,960 | |||||||
Finished products | 62,032,276 | 50,309,490 | |||||||||
Total steel inventories | 62,690,592 | 52,371,450 | |||||||||
Coating materials and supplies | 758,077 | 1,333,557 | |||||||||
Total inventories | $ | 63,448,669 | $ | 53,705,007 |
2019 | 2018 | ||||||||||
Current loans under Capital Agreements: | |||||||||||
AMUSA Kote | $ | 3,642,231 | $ | 2,672,417 | |||||||
NS Kote | 3,642,231 | 2,672,417 | |||||||||
Total current portion of capital loans from Partners | $ | 7,284,462 | $ | 5,344,834 |
2019 | 2018 | ||||||||||
Loans under Capital Agreements maturing from January 1, 2021 to July 12, 2021: | |||||||||||
AMUSA Kote | $ | 4,036,193 | $ | 5,658,537 | |||||||
NS Kote | 4,036,193 | 5,658,536 | |||||||||
Total noncurrent portion of capital loans from Partners | 8,072,386 | 11,317,073 | |||||||||
Total capital loans from Partners | $ | 15,356,848 | $ | 16,661,907 |
Years Ending December 31 | ||||||||
2020 | $ | 7,284,462 | ||||||
2021 | 8,072,386 | |||||||
Total | $ | 15,356,848 |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Freight Liability - net of receivable | $ | (914,870) | $ | (488,482) | |||||||
Substrate purchases payable | (1,757,199) | (9,266,020) | |||||||||
Total | $ | (2,672,069) | $ | (9,754,502) |
Equity securities - domestic | 20 to 60 | % | ||||||
Equity securities - international | 10 to 35 | |||||||
Fixed income (including cash) | 15 to 45 | |||||||
Real estate | 0 to 10 | |||||||
Alternative investments | 0 to 25 |
2019 | 2018 | ||||||||||
Change in benefit obligation: | |||||||||||
Benefit obligation - beginning of year | $ | 76,397,045 | $ | 80,335,194 | |||||||
Service cost | 2,094,821 | 2,454,496 | |||||||||
Interest cost | 3,265,552 | 2,920,855 | |||||||||
Actuarial (gain) loss | 10,115,725 | (7,321,016) | |||||||||
Plan ammendments | — | 741,355 | |||||||||
Benefits Paid | (3,290,303) | (2,733,839) | |||||||||
Benefit obligation - end of year | $ | 88,582,840 | $ | 76,397,045 | |||||||
Change in plan assets: | |||||||||||
Fair value of plan assets - beginning of year | 69,263,328 | 74,740,979 | |||||||||
Actual return on plan assets | 13,346,531 | (6,209,812) | |||||||||
Employer contribution | — | 3,466,000 | |||||||||
Benefits paid | (3,290,303) | (2,733,839) | |||||||||
Fair value of plan assets - end of year | $ | 79,319,556 | $ | 69,263,328 | |||||||
Unfunded status of the plan | $ | (9,263,284) | $ | (7,133,717) | |||||||
Noncurrent pension liability - end of year | $ | (9,263,284) | $ | (7,133,717) |
2019 | 2018 | ||||||||||
Service cost | $ | 2,094,821 | $ | 2,454,496 | |||||||
Interest cost | 3,265,552 | 2,920,855 | |||||||||
Expected return on plan assets | (4,197,936) | (4,116,476) | |||||||||
Net actuarial loss recognized | — | 604,647 | |||||||||
Amortization of prior service cost | 413,213 | 345,421 | |||||||||
Net periodic benefit cost | $ | 1,575,650 | $ | 2,208,943 |
Years Ending December 31 | |||||
2020 | $ | 3,291,689 | |||
2021 | 3,714,244 | ||||
2022 | 4,122,096 | ||||
2023 | 4,561,395 | ||||
2024 | 4,873,728 | ||||
2025 - 2029 | 29,396,659 |
Asset Type | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Domestic equity | $ | 5,526,492 | $ | 19,596,971 | $ | — | $ | 25,123,463 | |||||||||||||||
International equity | 7,811,706 | 2,734,886 | — | 10,546,592 | |||||||||||||||||||
Emerging market equity | — | 1,961,466 | — | 1,961,466 | |||||||||||||||||||
Fixed income | 3,410,972 | 27,392,806 | — | 30,803,778 | |||||||||||||||||||
Real estate | — | — | 3,110,916 | 3,110,916 | |||||||||||||||||||
Alternatives | — | 3,453,648 | 4,319,693 | 7,773,341 | |||||||||||||||||||
Total | $ | 16,749,170 | $ | 55,139,777 | $ | 7,430,609 | $ | 79,319,556 |
Asset Type | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Domestic equity | $ | 4,754,654 | $ | 13,923,196 | $ | — | $ | 18,677,850 | |||||||||||||||
International equity | 5,957,465 | 2,095,172 | — | 8,052,637 | |||||||||||||||||||
Emerging market equity | — | 1,470,065 | — | 1,470,065 | |||||||||||||||||||
Fixed income | 2,274,766 | 26,663,190 | — | 28,937,956 | |||||||||||||||||||
Real estate | — | — | 4,165,767 | 4,165,767 | |||||||||||||||||||
Alternatives | — | 3,618,900 | 4,340,153 | 7,959,053 | |||||||||||||||||||
Total | $ | 12,986,885 | $ | 47,770,523 | $ | 8,505,920 | $ | 69,263,328 |
2019 | 2018 | ||||||||||
Benefit obligation – beginning of year | $ | 37,819,079 | $ | 39,236,919 | |||||||
Service cost | 866,639 | 1,011,977 | |||||||||
Interest cost | 1,672,179 | 1,489,263 | |||||||||
Actuarial loss (gain) | 915,092 | (3,873,532) | |||||||||
Plan amendments | — | 773,870 | |||||||||
Benefits Paid | (438,054) | (819,418) | |||||||||
Benefit obligation – end of year | 40,834,935 | 37,819,079 | |||||||||
Unfunded status of the plan | $ | (40,834,935) | $ | (37,819,079) | |||||||
Current retiree medical liability | $ | (1,068,119) | $ | (1,027,275) | |||||||
Noncurrent retiree medical liability | (39,766,816) | (36,791,804) | |||||||||
Benefit liability - end of year | $ | (40,834,935) | $ | (37,819,079) |
2019 | 2018 | ||||||||||
Service Cost | $ | 866,639 | $ | 1,011,977 | |||||||
Interest Cost | 1,672,179 | 1,489,263 | |||||||||
Recognition net actuarial loss | — | — | |||||||||
Amortization of prior service credit | (956,464) | (1,505,641) | |||||||||
Net periodic benefit cost | $ | 1,582,354 | $ | 995,599 |
Years Ending December 31 | |||||
2020 | $ | 1,068,119 | |||
2021 | 1,147,716 | ||||
2022 | 1,236,438 | ||||
2023 | 1,377,742 | ||||
2024 | 1,555,988 | ||||
2025 - 2029 | 9,350,027 |
2019 | 2018 | ||||||||||
Unrecognized actuarial loss | $ | 10,523,028 | $ | 8,640,808 | |||||||
Prior service cost not yet recognized | (1,117,512) | (1,660,763) | |||||||||
Accumulated other comprehensive loss | $ | 9,405,516 | $ | 6,980,045 |
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 21,971,700 | $ | 1,155,468 | |||||||
Accounts receivable - net | 41,394,550 | 29,714,001 | |||||||||
Inventory - steel | 39,735,419 | 63,448,669 | |||||||||
Receivables from related parties: | |||||||||||
AMUSA Kote | 5,831,500 | 223,564 | |||||||||
NS Kote | 5,831,500 | 223,564 | |||||||||
AMUSA - Corporate | 28,177,769 | 9,288,612 | |||||||||
AMUSA - Burns Harbor | 6,181,158 | 4,947,600 | |||||||||
Total Current Assets | 149,123,596 | 109,001,478 | |||||||||
Property plant & equipment, at cost: | |||||||||||
Property plant & equipment | 661,940,184 | 660,416,668 | |||||||||
Less: accumulated depreciation | (572,498,157) | (568,590,799) | |||||||||
Total property, plant & equipment, net | 89,442,027 | 91,825,869 | |||||||||
Other assets: | |||||||||||
Spares and repair parts | 9,112,172 | 9,052,996 | |||||||||
TOTAL ASSETS | $ | 247,677,795 | $ | 209,880,343 | |||||||
LIABILITIES AND PARTNERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,325,698 | $ | 1,680,139 | |||||||
Accrued interest | 79,624 | 277,048 | |||||||||
Payable to related parties: | |||||||||||
AMUSA - IHE | 9,776,679 | 2,672,069 | |||||||||
I/N Tek | 784,045 | 361,027 | |||||||||
Nippon Steel & Sumitomo Metal Corp. USA | 5,239 | 32,274 | |||||||||
Current portion of long term debt | 10,642,492 | 7,284,462 | |||||||||
Other accrued liabilities | 10,437,715 | 9,678,665 | |||||||||
Total current liabilities | 33,051,492 | 21,985,684 | |||||||||
Long-term liabilities: | |||||||||||
Partner loans | — | 8,072,386 | |||||||||
Post retirement benefits | 51,092,196 | 49,030,100 | |||||||||
TOTAL LIABILITIES | 84,143,688 | 79,088,170 | |||||||||
Commitments and contingencies (See Note 5 and Note 9) | |||||||||||
Partners’ equity (see Note 1): | |||||||||||
Contributions from partners, net of distributions | 142,392,722 | 130,729,722 | |||||||||
Accumulated other comprehensive loss | (9,224,019) | (9,405,516) | |||||||||
Retained earnings, net of distributions | 30,365,404 | 9,467,967 | |||||||||
TOTAL EQUITY | $ | 163,534,107 | $ | 130,792,173 | |||||||
TOTAL LIABILITIES AND EQUITY | $ | 247,677,795 | $ | 209,880,343 |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Sales revenue | $ | 265,247,423 | $ | 364,650,786 | |||||||
Operating costs and expenses: | |||||||||||
Production expenses - excludes depreciation and amortization expense disclosed below | 69,424,178 | 89,552,937 | |||||||||
Substrate costs | 170,642,824 | 240,834,459 | |||||||||
Depreciation and amortization expense | 4,180,984 | 4,341,455 | |||||||||
Interest expense to Partners | 102,000 | 428,736 | |||||||||
Total expenses costs | 244,349,986 | 335,157,587 | |||||||||
Net income | $ | 20,897,437 | $ | 29,493,199 | |||||||
Other Comprehensive income (loss): | |||||||||||
Defined benefit plans: | |||||||||||
Amortization of actuarial losses and prior service (credit) | $ | 181,497 | $ | (407,438) | |||||||
Total other comprehensive income (loss) | 181,497 | (407,438) | |||||||||
Comprehensive income | $ | 21,078,934 | $ | 29,085,761 |
Contributed Capital - Net of Distributions | Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity | ||||||||||||||||||||
Balance January 1, 2020 | $ | 130,729,722 | $ | 9,467,967 | $ | (9,405,516) | $ | 130,792,173 | |||||||||||||||
Contributions from partners (Note 5) | 11,663,000 | — | — | 11,663,000 | |||||||||||||||||||
Net income | — | 20,897,437 | — | 20,897,437 | |||||||||||||||||||
Other comprehensive income | — | — | 181,497 | 181,497 | |||||||||||||||||||
Balance - September 30, 2020 | $ | 142,392,722 | $ | 30,365,404 | $ | (9,224,019) | $ | 163,534,107 |
Contributed Capital - Net of Distributions | Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity | ||||||||||||||||||||
Balance January 1, 2019 | $ | 124,428,191 | $ | 14,513,782 | $ | (6,980,045) | $ | 131,961,928 | |||||||||||||||
Contributions from partners (Note 5) | 4,377,000 | — | — | 4,377,000 | |||||||||||||||||||
Net income | — | 29,493,199 | — | 29,493,199 | |||||||||||||||||||
Other comprehensive loss | — | — | (407,438) | (407,438) | |||||||||||||||||||
Balance September 30, 2019 | $ | 128,805,191 | $ | 44,006,981 | $ | (7,387,483) | $ | 165,424,689 |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net Income | $ | 20,897,437 | $ | 29,493,199 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 4,180,984 | 4,341,455 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (11,680,549) | (7,760,390) | |||||||||
Inventories | 23,439,624 | (10,545,536) | |||||||||
Other assets | (59,152) | (219,841) | |||||||||
Accounts payable | (273,628) | (310,697) | |||||||||
Payables to and receivables from related parties | (12,622,123) | (11,365,993) | |||||||||
Accrued interest | (197,424) | (176,824) | |||||||||
Other accrued liabilities | 2,821,119 | 968,511 | |||||||||
Deferred employee benefits | 181,497 | (407,438) | |||||||||
Net cash provided by operating activities | 26,687,785 | 4,016,446 | |||||||||
Cash flows used in investing activities: | |||||||||||
Capital expenditures | (1,604,329) | (2,998,663) | |||||||||
Net cash used in investing activities | (1,604,329) | (2,998,663) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from capital loans from Partners | 2,570,203 | 2,577,163 | |||||||||
Principal payments on capital loans from Partners | (7,284,559) | (5,342,522) | |||||||||
Contributions from partners - AMUSA Kote, Inc. | 3,150,766 | 2,427,742 | |||||||||
Contributions from partners - NS Kote, Inc. | 3,150,766 | 2,427,742 | |||||||||
Distributions to partners - AMUSA Kote, Inc. | (2,927,200) | (4,564,975) | |||||||||
Distributions to partners - NS Kote, Inc. | (2,927,200) | (4,564,975) | |||||||||
Net cash used in financing activities | (4,267,224) | (7,039,825) | |||||||||
Net increase (decrease) in cash & equivalents | 20,816,232 | (6,022,042) | |||||||||
Cash & equivalents - beginning of period | 1,155,468 | 20,452,515 | |||||||||
Cash & equivalents - end of period | $ | 21,971,700 | $ | 14,430,473 | |||||||
Noncash investing and financing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | 17,199 | $ | 213,272 | |||||||
Cash paid during the period for interest | $ | 537,204 | $ | 638,445 |
September 30, 2020 | December 31, 2019 | ||||||||||
Steel inventories: | |||||||||||
Raw substrate | $ | 1,688,908 | $ | 658,316 | |||||||
Finished products | 37,174,324 | 62,032,276 | |||||||||
Total steel inventories | $ | 38,863,232 | $ | 62,690,592 | |||||||
Coating materials and supplies | 872,187 | 758,077 | |||||||||
Total inventories | $ | 39,735,419 | $ | 63,448,669 |
September 30, 2020 | December 31, 2019 | ||||||||||
Current loans under Capital Agreements: | |||||||||||
AMUSA Kote | $ | 5,321,246 | $ | 3,642,231 | |||||||
NS Kote | 5,321,246 | 3,642,231 | |||||||||
Total current portion of capital loans from Partners | 10,642,492 | 7,284,462 | |||||||||
Noncurrent loans under Capital Agreements: | |||||||||||
AMUSA Kote | — | 4,036,193 | |||||||||
NS Kote | — | 4,036,193 | |||||||||
Total noncurrent portion of capital loans from Partners | — | 8,072,386 | |||||||||
Total capital loans from Partners | $ | 10,642,492 | $ | 15,356,848 |
September 30, 2020 | December 31, 2019 | ||||||||||
Freight Liability - net of receivable | $ | (474,909) | $ | (914,870) | |||||||
Substrate purchases payable | (9,301,769) | (1,757,199) | |||||||||
Total | $ | (9,776,678) | $ | (2,672,069) |
Defined Benefit Pension Costs (Credits) | Other Postretirement Benefit Plans | ||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | 1,847,072 | $ | 1,571,116 | $ | 708,570 | $ | 649,979 | |||||||||||||||
Interest cost | 2,112,371 | 2,449,164 | 1,042,595 | 1,254,134 | |||||||||||||||||||
Expected return on plan assets | (3,253,574) | (3,148,452) | — | — | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Prior service costs (credits) | 83,485 | 309,910 | (717,348) | (717,348) | |||||||||||||||||||
Net actuarial loss | 815,360 | — | — | — | |||||||||||||||||||
Net periodic benefit cost | $ | 1,604,714 | $ | 1,181,738 | $ | 1,033,817 | $ | 1,186,765 |
2019 | 2018 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 1,924,633 | $ | 2,113,310 | |||||||
Receivables from related parties: | |||||||||||
I/N Kote | 361,027 | 174,459 | |||||||||
ArcelorMittal USA LLC–Indiana Harbor East | 50,253,269 | 45,979,458 | |||||||||
Other current assets | 538,962 | 628,265 | |||||||||
Total current assets | 53,077,891 | 48,895,492 | |||||||||
PROPERTY, PLANT, AND EQUIPMENT–At cost | |||||||||||
Land and improvements | 10,184,106 | 10,187,367 | |||||||||
Building and improvements | 58,546,857 | 58,546,857 | |||||||||
Machinery and equipment | 591,388,129 | 578,315,830 | |||||||||
Construction in progress | 9,222,380 | 12,023,954 | |||||||||
Less accumulated depreciation and amortization | (569,629,541) | (563,499,895) | |||||||||
Property, plant, and equipment–net | 99,711,931 | 95,574,113 | |||||||||
Other assets: | |||||||||||
Spares and repair parts | 15,871,557 | 15,070,715 | |||||||||
Other noncurrent assets | 61,313 | 78,831 | |||||||||
Total other assets | 15,932,870 | 15,149,546 | |||||||||
TOTAL | $ | 168,722,692 | $ | 159,619,151 | |||||||
LIABILITIES | |||||||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable | $ | 3,303,549 | $ | 2,674,269 | |||||||
Payable to related parties: | |||||||||||
ArcelorMittal USA LLC | 1,081,549 | 1,219,706 | |||||||||
Nippon Steel & Sumitomo Metal U.S.A., Inc. | 35,200 | 30,103 | |||||||||
AMUSA Tek, Inc. | 3,391,747 | 2,655,444 | |||||||||
NS Tek, Inc. | 2,261,164 | 1,770,296 | |||||||||
Accrued interest to Partners | 608,307 | 654,630 | |||||||||
Accrued utilities | 2,996,426 | 2,921,510 | |||||||||
Other accrued liabilities | 11,083,661 | 11,970,835 | |||||||||
Current portion of capital loan from Partners | 18,562,624 | 13,728,151 | |||||||||
Total current liabilities | 43,324,227 | 37,624,944 | |||||||||
Long-term liabilities: | |||||||||||
Long-term capital loan from Partners | 19,688,407 | 28,285,288 | |||||||||
Deferred employee benefits | 76,478,366 | 65,752,917 | |||||||||
Total long-term liabilities | 96,166,773 | 94,038,205 | |||||||||
Total liabilities | 139,491,000 | 131,663,149 | |||||||||
Commitments and contingencies (See Note 4 and Note 8) | |||||||||||
PARTNERS’ EQUITY: | |||||||||||
Retained earnings, net of distributions | 39,436,678 | 30,446,862 | |||||||||
Accumulated other comprehensive loss | (10,204,986) | (2,490,860) | |||||||||
Total partners’ equity | 29,231,692 | 27,956,002 | |||||||||
TOTAL | $ | 168,722,692 | $ | 159,619,151 |
2019 | 2018 | ||||||||||
TOLLING REVENUE | $ | 167,216,544 | $ | 167,776,879 | |||||||
OPERATING COSTS AND EXPENSES: | |||||||||||
Processing costs - excluding depreciation and amortization disclosed below | 89,187,581 | 92,646,971 | |||||||||
General and administrative expenses | 877,407 | 900,301 | |||||||||
Depreciation and amortization | 8,862,240 | 9,044,443 | |||||||||
Total operating costs and expenses | 98,927,228 | 102,591,715 | |||||||||
OPERATING INCOME | 68,289,316 | 65,185,164 | |||||||||
NON-OPERATING POSTRETIREMENT BENEFIT EXPENSE | (825,142) | (624,386) | |||||||||
INTEREST EXPENSE TO PARTNERS | (1,050,507) | (1,099,989) | |||||||||
Total other expense, net | (1,875,649) | (1,724,375) | |||||||||
NET INCOME | 66,413,667 | 63,460,789 | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME: | |||||||||||
Defined benefit plans: | |||||||||||
Net actuarial (losses) gains arising during period | (6,483,281) | 5,086,296 | |||||||||
Prior service cost from plan amendments | — | (1,654,135) | |||||||||
Amortization of actuarial losses and prior service (credit) | (1,230,845) | (858,345) | |||||||||
Total other comprehensive (loss) income | (7,714,126) | 2,573,816 | |||||||||
COMPREHENSIVE INCOME | $ | 58,699,541 | $ | 66,034,605 |
Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity (Deficit) | |||||||||||||||
BALANCE–January 1, 2018 | $ | 25,910,023 | $ | (5,064,676) | $ | 20,845,347 | |||||||||||
Distributions to Partners - return on investment | (58,923,950) | — | (58,923,950) | ||||||||||||||
Net income | 63,460,789 | — | 63,460,789 | ||||||||||||||
Other comprehensive income | — | 2,573,816 | 2,573,816 | ||||||||||||||
BALANCE–December 31, 2018 | $ | 30,446,862 | $ | (2,490,860) | $ | 27,956,002 | |||||||||||
Distributions to Partners - return on investment | (57,423,853) | — | (57,423,853) | ||||||||||||||
Net income | 66,413,667 | — | 66,413,667 | ||||||||||||||
Other comprehensive income | — | (7,714,126) | (7,714,126) | ||||||||||||||
BALANCE–December 31, 2019 | $ | 39,436,676 | $ | (10,204,986) | $ | 29,231,690 |
2019 | 2018 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Income | $ | 66,413,667 | $ | 63,460,789 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 8,873,246 | 9,044,443 | |||||||||
Changes in assets and liabilities: | |||||||||||
Receivable from related parties | (4,460,379) | (4,846,815) | |||||||||
Other current assets | 89,303 | (22,195) | |||||||||
Other assets | (783,324) | (534,571) | |||||||||
Accounts payable | 509,972 | (81,388) | |||||||||
Payables to related parties | 1,094,112 | 20,764 | |||||||||
Accrued interest | (46,323) | 14,473 | |||||||||
Other accrued liabilities | (812,258) | 3,290,508 | |||||||||
Deferred employee benefits | 3,011,323 | 2,936,073 | |||||||||
Net cash provided by operating activities | 73,889,339 | 73,282,081 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES–Capital expenditures: | (12,891,757) | (13,226,577) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from capital loans from Partners | 9,964,930 | 8,099,710 | |||||||||
Principal payments on capital loans from Partners | (13,727,336) | (11,468,883) | |||||||||
Distributions to Partners: | |||||||||||
AMUSA Tek, Inc. | (34,454,312) | (35,354,370) | |||||||||
NS Tek, Inc. | (22,969,541) | (23,569,580) | |||||||||
Net cash used in financing activities | (61,186,259) | (62,293,123) | |||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (188,677) | (2,237,619) | |||||||||
CASH AND CASH EQUIVALENTS–Beginning of year | 2,113,310 | 4,350,929 | |||||||||
CASH AND CASH EQUIVALENTS–End of year | $ | 1,924,633 | $ | 2,113,310 | |||||||
NONCASH INVESTING ACTIVITIES–Capital expenditures included in accounts payable at year-end | $ | 565,045 | $ | 445,737 | |||||||
CASH PAID DURING THE YEAR FOR–Interest | $ | 1,530,769 | $ | 1,479,688 |
Building | 45 years | ||||
Land Improvements | 20 years | ||||
Computer equipment and software | 5 years | ||||
Machinery and equipment | 21.5 years | ||||
Furniture and fixtures | 10 years |
2019 | 2018 | ||||||||||
Current portion of loans under capital agreements | |||||||||||
AMUSA Tek | $ | 11,137,574 | $ | 8,236,891 | |||||||
NS Tek | 7,425,050 | 5,491,260 | |||||||||
Total current portion of capital loans from Partners | $ | 18,562,624 | $ | 13,728,151 |
2019 | 2018 | ||||||||||
Loans under capital agreements maturing from January 1, 2021 to July 21, 2021: | |||||||||||
AMUSA Tek | $ | 11,813,044 | $ | 16,971,173 | |||||||
NS Tek | 7,875,363 | 11,314,115 | |||||||||
Total noncurrent portion of capital loans from Partners | $ | 19,688,407 | $ | 28,285,288 | |||||||
Total capital loans from Partners | $ | 38,251,031 | $ | 42,013,437 |
Years Ending December 31 | |||||
2020 | $ | 18,562,624 | |||
2021 | 19,688,407 | ||||
Total | $ | 38,251,031 |
Equity securities - domestic | 20 to 60 | % | ||||||
Equity securities - international | 10 to 35 | |||||||
Fixed income (including cash) | 15 to 45 | |||||||
Real estate | 0 to 10 | |||||||
Alternative investments | 0 to 25 |
2019 | 2018 | ||||||||||
Change in benefit obligation: | |||||||||||
Benefit obligation - beginning of year | $ | 80,708,576 | $ | 82,400,419 | |||||||
Service cost | 1,916,495 | 2,296,128 | |||||||||
Interest cost | 3,419,270 | 2,980,356 | |||||||||
Actuarial loss (gain) | 13,358,093 | (4,500,396) | |||||||||
Plan amendments | — | 783,729 | |||||||||
Benefits Paid | (3,393,821) | (3,251,660) | |||||||||
Projected benefit obligation - end of year | $ | 96,008,613 | $ | 80,708,576 | |||||||
Change in plan assets: | |||||||||||
Fair value of plan assets - beginning of year | $ | 56,894,876 | $ | 62,722,493 | |||||||
Actual return on plan assets | 10,752,032 | (2,575,957) | |||||||||
Benefits paid | (3,393,821) | (3,251,660) | |||||||||
Fair value of plan assets - end of year | $ | 64,253,087 | $ | 56,894,876 | |||||||
Unfunded status of the plan | $ | (31,755,526) | $ | (23,813,700) | |||||||
Noncurrent pension liability - end of year | $ | (31,755,526) | $ | (23,813,700) |
2019 | 2018 | ||||||||||
Service cost | $ | 1,916,495 | $ | 2,296,128 | |||||||
Interest cost | 3,419,270 | 2,980,356 | |||||||||
Expected return on plan assets | (3,271,634) | (3,275,580) | |||||||||
Amortization of prior service cost | — | 13,942 | |||||||||
Recognized net actuarial loss | 116,280 | 408,084 | |||||||||
Net periodic benefit cost | $ | 2,180,411 | $ | 2,422,930 |
Years Ending December 31 | |||||
2020 | $ | 4,075,366 | |||
2021 | 4,005,918 | ||||
2022 | 4,834,656 | ||||
2023 | 5,250,855 | ||||
2024 | 5,756,527 | ||||
2025 - 2029 | 30,708,237 |
Asset Type | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Domestic equity | $ | 4,476,754 | $ | 15,874,595 | $ | — | $ | 20,351,349 | |||||||||||||||
International equity | 6,327,900 | 2,215,404 | — | 8,543,304 | |||||||||||||||||||
Emerging market equity | — | 1,588,893 | — | 1,588,893 | |||||||||||||||||||
Fixed income | 2,763,070 | 22,189,640 | — | 24,952,710 | |||||||||||||||||||
Real estate | — | — | 2,520,008 | 2,520,008 | |||||||||||||||||||
Alternatives | — | 2,797,640 | 3,499,183 | 6,296,823 | |||||||||||||||||||
Total | $ | 13,567,724 | $ | 44,666,172 | $ | 6,019,191 | $ | 64,253,087 |
Asset Type | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Domestic equity | $ | 3,905,609 | $ | 11,436,911 | $ | — | $ | 15,342,520 | |||||||||||||||
International equity | 4,893,632 | 1,721,034 | — | 6,614,666 | |||||||||||||||||||
Emerging market equity | — | 1,207,553 | — | 1,207,553 | |||||||||||||||||||
Fixed income | 1,868,558 | 21,901,906 | — | 23,770,464 | |||||||||||||||||||
Real estate | — | — | 3,421,880 | 3,421,880 | |||||||||||||||||||
Alternatives | — | 2,972,668 | 3,565,125 | 6,537,793 | |||||||||||||||||||
Total | $ | 10,667,799 | $ | 39,240,072 | $ | 6,987,005 | $ | 56,894,876 |
2019 | 2018 | ||||||||||
Change in benefit obligation: | |||||||||||
Benefit obligation - beginning of year | $ | 43,353,750 | $ | 47,117,652 | |||||||
Service cost | 915,596 | 1,064,740 | |||||||||
Interest cost | 1,908,351 | 1,777,955 | |||||||||
Actuarial loss (gain) | 605,586 | (6,437,437) | |||||||||
Benefits paid | (611,253) | (1,037,566) | |||||||||
Plan amendments | — | 870,406 | |||||||||
Benefit obligation - end of year | 46,172,030 | 43,355,750 | |||||||||
Unfunded status of the plan | $ | (46,172,030) | $ | (43,355,750) | |||||||
Current retiree medical liability | $ | (1,449,190) | $ | (1,414,533) | |||||||
Noncurrent retiree medical liability | (44,722,840) | (41,939,217) | |||||||||
Benefit liability - end of year | $ | (46,172,030) | $ | (43,353,750) |
2019 | 2018 | ||||||||||
Service Cost | $ | 915,596 | $ | 1,064,740 | |||||||
Interest Cost | 1,908,351 | 1,777,955 | |||||||||
Amortization of prior service cost | (1,347,125) | (1,481,033) | |||||||||
Recognized net actuarial loss | — | 200,662 | |||||||||
Net periodic benefit cost | $ | 1,476,822 | $ | 1,562,324 |
Years Ending December 31 | |||||
2020 | $ | 1,449,190 | |||
2021 | 1,522,936 | ||||
2022 | 1,699,131 | ||||
2023 | 1,770,942 | ||||
2024 | 1,898,396 | ||||
2025 - 2029 | 10,037,225 |
2019 | 2018 | ||||||||||
Unrecognized actuarial loss | $ | 13,019,230 | $ | 6,535,949 | |||||||
Prior service cost not yet recognized | (2,814,244) | (4,045,089) | |||||||||
Accumulated other comprehensive loss | $ | 10,204,986 | $ | 2,490,860 |
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,738,795 | $ | 1,924,633 | |||||||
Receivables from related parties: | |||||||||||
Due from AMUSA - IHE | 44,540,869 | 50,253,269 | |||||||||
Due from I/N Kote | 784,045 | 361,027 | |||||||||
Other current assets | 658,045 | 538,962 | |||||||||
Total current assets | 47,721,754 | 53,077,891 | |||||||||
Property, plant & equipment, at cost: | |||||||||||
Property, plant & equipment | 678,271,215 | 669,341,472 | |||||||||
Less: accumulated depreciation | (576,129,316) | (569,629,541) | |||||||||
Total property, plant & equipment, net | 102,141,899 | 99,711,931 | |||||||||
Other assets: | |||||||||||
Spares and repair parts | 16,494,608 | 15,871,557 | |||||||||
Other Assets | 39,416 | 61,313 | |||||||||
TOTAL ASSETS | $ | 166,397,677 | $ | 168,722,692 | |||||||
LIABILITIES AND PARTNERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 2,522,986 | $ | 3,303,549 | |||||||
Accrued interest | 180,057 | 608,307 | |||||||||
Payable to related parties: | |||||||||||
AMUSA - Corporate | 974,550 | 1,081,549 | |||||||||
Nippon Steel | 24,169 | 35,200 | |||||||||
AMUSA Tek. Inc. | 2,604,088 | 3,391,747 | |||||||||
NS Tek. Inc. | 1,736,058 | 2,261,164 | |||||||||
Current portion of long term debt | 25,955,100 | 18,562,624 | |||||||||
Other accrued liabilities | 13,478,700 | 14,080,087 | |||||||||
Total current liabilities | 47,475,708 | 43,324,227 | |||||||||
Long-term liabilities: | |||||||||||
Partner loans | — | 19,688,407 | |||||||||
Post retirement benefits | 79,428,636 | 76,478,366 | |||||||||
TOTAL LIABILITIES | 126,904,344 | 139,491,000 | |||||||||
Commitments and contingencies (See Note 4 and Note 8) | |||||||||||
Partners’ equity (see Note 1): | |||||||||||
Accumulated other comprehensive loss | (10,312,187) | (10,204,986) | |||||||||
Retained earnings, net of distributions | 49,805,520 | 39,436,678 | |||||||||
TOTAL EQUITY | 39,493,333 | 29,231,692 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 166,397,677 | $ | 168,722,692 |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Tolling revenue | $ | 108,342,570 | $ | 123,519,821 | |||||||
Operating costs and expenses: | |||||||||||
Production expenses - excludes depreciation and amortization expense disclosed below | 57,441,301 | 67,268,893 | |||||||||
Depreciation and amortization expense | 6,499,776 | 6,400,165 | |||||||||
Interest expense to partners | 457,254 | 909,609 | |||||||||
Total expenses costs | 64,398,331 | 74,578,667 | |||||||||
Net income | $ | 43,944,239 | $ | 48,941,154 | |||||||
Other Comprehensive income (loss): | |||||||||||
Defined benefit plans: | |||||||||||
Amortization of actuarial losses and prior service (credit) | $ | (107,201) | $ | (923,134) | |||||||
Total other comprehensive loss | (107,201) | (923,134) | |||||||||
Comprehensive income | $ | 43,837,038 | $ | 48,018,020 |
Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity | |||||||||||||||
Balance January 1, 2020 | $ | 39,436,676 | $ | (10,204,986) | $ | 29,231,690 | |||||||||||
Distributions to partners - return on investment | (33,575,395) | — | (33,575,395) | ||||||||||||||
Net income | 43,944,239 | — | 43,944,239 | ||||||||||||||
Other comprehensive loss | — | (107,201) | (107,201) | ||||||||||||||
Balance - September 30, 2020 | $ | 49,805,520 | $ | (10,312,187) | $ | 39,493,333 |
Retained Earnings - Net of Distributions | Accumulated Other Comprehensive Loss | Total Partners’ Equity | |||||||||||||||
Balance January 1, 2019 | $ | 30,446,862 | $ | (2,490,860) | $ | 27,956,002 | |||||||||||
Distributions to partners - return on investment | (42,690,990) | — | (42,690,990) | ||||||||||||||
Net income | 48,941,154 | — | 48,941,154 | ||||||||||||||
Other comprehensive loss | — | (923,134) | (923,134) | ||||||||||||||
Balance September 30, 2019 | $ | 36,697,026 | $ | (3,413,994) | $ | 33,283,032 |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net Income | $ | 43,944,239 | $ | 48,941,154 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 6,499,776 | 6,400,164 | |||||||||
Changes in assets and liabilities: | |||||||||||
Receivable from related parties | 5,289,382 | 124,051 | |||||||||
Other current assets | (119,083) | 56,091 | |||||||||
Other assets | (601,153) | (452,970) | |||||||||
Accounts payable | (351,228) | 1,612,457 | |||||||||
Payables to related parties | (118,030) | (31,823) | |||||||||
Accrued interest | (428,251) | (380,216) | |||||||||
Other accrued liabilities | 2,348,883 | 1,668,645 | |||||||||
Deferred employee benefits | (107,201) | (923,134) | |||||||||
Net cash provided by operating activities | 56,357,334 | 57,014,419 | |||||||||
Cash flows used in investing activities: | |||||||||||
Capital expenditures | (9,359,079) | (8,480,926) | |||||||||
Net cash used in investing activities | (9,359,079) | (8,480,926) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from capital loans from Partners | 6,267,000 | 7,125,466 | |||||||||
Principal payments on capital loans from Partners | (18,562,931) | (13,727,336) | |||||||||
Distributions to partners - AMUSA Tek, Inc. (see Note 1) | (20,932,897) | (25,266,052) | |||||||||
Distributions to partners - NS Tek, Inc. (see Note 1) | (13,955,265) | (16,844,035) | |||||||||
Net cash used in financing activities | (47,184,093) | (48,711,957) | |||||||||
Net decrease in cash & equivalents | (185,838) | (178,464) | |||||||||
Cash & equivalents - beginning of period | 1,924,633 | 2,113,310 | |||||||||
Cash & equivalents - end of period | $ | 1,738,795 | $ | 1,934,846 | |||||||
Noncash investing and financing activities: | |||||||||||
Capital expenditures included in accounts payable | $ | 135,709 | $ | 765,240 | |||||||
Cash paid during the period for interest | $ | 1,373,366 | $ | 1,530,769 |
September 30, 2020 | December 31, 2019 | ||||||||||
Current portion of loans under capital agreements | |||||||||||
AMUSA Tek | $ | 15,573,060 | $ | 11,137,574 | |||||||
NS Tek | 10,382,040 | 7,425,050 | |||||||||
Total current portion of capital loans from Partners | $ | 25,955,100 | $ | 18,562,624 | |||||||
Noncurrent loans under Capital Agreements: | |||||||||||
AMUSA Tek | — | $ | 11,813,044 | ||||||||
NS Tek | — | 7,875,363 | |||||||||
Total noncurrent portion of capital loans from Partners | — | 19,688,407 | |||||||||
Total capital loans from Partners | $ | 25,955,100 | $ | 38,251,031 |
Defined Benefit Pension Costs (Credits) | Other Postretirement Benefit Plans | ||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | 1,756,628 | $ | 1,437,371 | $ | 756,110 | $ | 686,697 | |||||||||||||||
Interest cost | 2,261,319 | 2,564,452 | 1,177,801 | 1,431,263 | |||||||||||||||||||
Expected return on plan assets | (2,527,208) | (2,453,726) | — | — | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Prior service costs (credits) | 87,210 | 87,210 | (1,010,344) | (1,010,344) | |||||||||||||||||||
Net actuarial loss | 815,933 | — | — | — | |||||||||||||||||||
Net periodic benefit cost | $ | 2,393,882 | $ | 1,635,307 | $ | 923,567 | $ | 1,107,616 |
Historical Cleveland-Cliffs Inc. | AK Steel Holding Corporation Measurement Period Transaction Accounting Adjustments (Note 8) | Notes (Note 8) | Pro Forma After AK Steel Merger | Historical AM USA After Reclassifications (Note 4) | Historical I/N Kote After Reclassifications (Note 4) | Historical I/N Tek After Reclassifications (Note 4) | Transaction Accounting Adjustments (Note 9) | Eliminations (Note 9) | Notes (Note 9) | Pro Forma Combined Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 56.0 | $ | — | $ | 56.0 | $ | 68.0 | $ | 22.0 | $ | 1.7 | $ | 3.2 | $ | — | 9f | $ | 150.9 | ||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable, net | 653.7 | — | 653.7 | 591.0 | 87.5 | 45.3 | (246.0) | (148.5) | 9a | 983.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | 1,795.1 | (203.2) | 8a | 1,591.9 | 1,390.8 | 48.8 | 16.5 | 734.8 | — | 9b | 3,782.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax receivable, current | 9.0 | — | 9.0 | 13.0 | — | — | — | — | 22.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current assets | 115.0 | — | 115.0 | 30.0 | — | 0.7 | (55.5) | (58.5) | 9c | 31.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current assets | 2,628.8 | (203.2) | 2,425.6 | 2,092.8 | 158.3 | 64.2 | 436.5 | (207.0) | 4,970.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment, net | 4,550.7 | 148.4 | 8b | 4,699.1 | 3,703.0 | 89.4 | 102.1 | (134.5) | — | 9d | 8,459.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 144.0 | 32.4 | 8c | 176.4 | — | — | — | 1,355.4 | — | 9e | 1,531.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets, net | 190.1 | — | 190.1 | — | — | — | — | — | 190.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes | 519.5 | 30.6 | 8d | 550.1 | — | — | — | — | — | 550.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Right-of-use asset, operating lease | 207.7 | — | 207.7 | 60.0 | — | — | — | — | 267.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current assets | 240.1 | — | 240.1 | 2,587.0 | — | — | (2,450.8) | (23.3) | 9h | 353.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL ASSETS | $ | 8,480.9 | $ | 8.2 | $ | 8,489.1 | $ | 8,442.8 | $ | 247.7 | $ | 166.3 | $ | (793.4) | $ | (230.3) | $ | 16,322.2 | |||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 710.7 | $ | — | $ | 710.7 | $ | 1,335.3 | $ | 12.0 | $ | 7.8 | $ | (195.1) | $ | (148.5) | 9i | $ | 1,722.2 | ||||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities | 279.4 | — | 279.4 | 414.0 | 0.1 | 0.2 | (39.1) | — | 9j | 654.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | 224.0 | — | 224.0 | 672.5 | 21.0 | 39.4 | (412.5) | (58.5) | 9k | 485.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current liabilities | 1,214.1 | — | 1,214.1 | 2,421.8 | 33.1 | 47.4 | (646.7) | (207.0) | 2,862.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | 4,309.8 | — | 4,309.8 | — | — | — | 693.0 | — | 9l | 5,002.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating lease liability, non-current | 174.1 | — | 174.1 | 45.0 | — | — | 0.2 | — | 9f | 219.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible liabilities, net | 65.9 | — | 65.9 | — | — | — | — | — | 65.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and OPEB liabilities | 1,130.6 | — | 1,130.6 | 2,964.0 | 51.1 | 79.4 | 109.4 | — | 9m | 4,334.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset retirement obligations | 182.0 | — | 182.0 | 77.0 | — | — | 17.6 | — | 9f | 276.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current liabilities | 280.7 | 8.2 | 8e | 288.9 | 545.0 | — | — | (154.6) | — | 9n | 679.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL LIABILITIES | 7,357.2 | 8.2 | 7,365.4 | 6,052.8 | 84.2 | 126.8 | 18.9 | (207.0) | 13,441.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B Participating Redeemable Preferred Stock | — | — | — | — | — | — | 738.4 | — | 9o | 738.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares | 53.6 | — | 53.6 | — | — | — | 9.7 | — | 9p | 63.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital in excess of par value of shares | 4,446.3 | — | 4,446.3 | 6,250.0 | 142.4 | — | (5,412.3) | (23.3) | 9p | 5,403.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained deficit | (3,052.5) | — | (3,052.5) | (5,031.0) | 30.3 | 49.8 | 4,953.9 | 9p | (3,049.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury shares | (354.8) | — | (354.8) | — | — | — | — | — | 9p | (354.8) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | (282.0) | — | (282.0) | 1,171.0 | (9.2) | (10.3) | (1,117.0) | — | 9p | (247.5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL EQUITY | 810.6 | — | 810.6 | 2,390.0 | 163.5 | 39.5 | (1,565.7) | (23.3) | 1,814.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest | 313.1 | — | 313.1 | 15.0 | — | 9p | 328.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 8,480.9 | $ | 8.2 | $ | 8,489.1 | $ | 8,442.8 | $ | 247.7 | $ | 166.3 | $ | (793.4) | $ | (230.3) | $ | — | $ | 16,322.2 |
Historical Cleveland-Cliffs Inc. | Historical AK Steel Holding Corporation After Reclassifications (Note 4) | Transaction Accounting Adjustments (Note 6) | Elims. (Note 6) | Notes (Note 6) | Pro Forma After AK Steel Merger | AM USA after Reclass. (Note 4) | I/N KOTE after Reclass. (Note 4) | I/N TEK after Reclass (Note 4) | Transaction Accounting Adjustments (Note 7) | Elims. (Note 7) | Notes (Note 7) | Pro Forma Combined Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from product sales and services | $ | 1,989.9 | $ | 6,359.4 | $ | — | $ | (597.1) | 6a | $ | 7,752.2 | $ | 10,169.0 | $ | 498.1 | $ | 167.2 | $ | — | $ | (1,423.4) | 7a | $ | 17,163.1 | |||||||||||||||||||||||||||||||||||||||||
Operating costs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold | (1,414.2) | (5,798.9) | (67.7) | 569.8 | 6b | (6,711.0) | (9,973.0) | (459.8) | (98.1) | (223.8) | 1,415.9 | 7b | (16,049.8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (112.9) | (293.4) | (10.0) | — | 6c | (416.3) | (369.0) | — | (0.9) | 129.0 | — | 7c | (657.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition-related costs | (6.5) | (1.8) | — | — | (8.3) | — | — | — | (21.0) | — | 7d | (29.3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous – net | (27.0) | (56.0) | — | — | (83.0) | 42.0 | — | — | (31.4) | — | 7e | (72.4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating costs | (1,560.6) | (6,150.1) | (77.7) | 569.8 | (7,218.6) | (10,300.0) | (459.8) | (99.0) | (147.2) | 1,415.9 | (16,808.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | 429.3 | 209.3 | (77.7) | (27.3) | 533.6 | (131.0) | 38.3 | 68.2 | (147.2) | (7.5) | 354.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income (expense), net | (101.2) | (145.7) | 16.5 | — | 6d | (230.4) | 58.0 | 0.1 | (1.0) | (108.8) | — | 7f | (282.1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | (18.2) | 0.6 | — | — | (17.6) | — | — | — | — | — | (17.6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-operating income (expense) | 2.2 | 5.0 | (12.1) | — | 6e | (4.9) | (59.0) | (0.2) | (0.8) | (20.8) | — | 7g | (85.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other income (expense) | (117.2) | (140.1) | 4.4 | — | (252.9) | (1.0) | (0.1) | (1.8) | (129.6) | — | (385.4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 312.1 | 69.2 | (73.3) | (27.3) | 280.7 | (132.0) | 38.2 | 66.4 | (276.8) | (7.5) | (31.0) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | (17.6) | (6.2) | 13.6 | 6.6 | 6f | (3.6) | 53.0 | — | — | 77.3 | 1.8 | 7h | 128.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | 294.5 | 63.0 | (59.7) | (20.7) | 277.1 | (79.0) | 38.2 | 66.4 | (199.5) | (5.7) | 97.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | (1.7) | — | — | (1.7) | — | — | — | — | — | (1.7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 292.8 | 63.0 | (59.7) | (20.7) | 275.4 | (79.0) | 38.2 | 66.4 | (199.5) | (5.7) | 95.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income attributable to noncontrolling interest | — | (51.8) | — | — | (51.8) | — | — | — | — | — | (51.8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Cliffs shareholders | $ | 292.8 | $ | 11.2 | $ | (59.7) | $ | (20.7) | $ | 223.6 | $ | (79.0) | $ | 38.2 | $ | 66.4 | $ | (199.5) | $ | (5.7) | $ | 44.0 | |||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - basic | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.06 | 6g | $ | 0.56 | 7j | $ | 0.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | (0.01) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 1.05 | $ | 0.56 | $ | 0.08 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - diluted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.04 | 6h | $ | 0.55 | 7k | $ | 0.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | (0.01) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 1.03 | $ | 0.55 | $ | 0.08 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average number of shares (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 276,761 | 6g | 403,520 | 7j | 481,707 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted | 284,480 | 6h | 412,371 | 7k | 548,885 |
Historical Cleveland-Cliffs Inc. | Historical AK Steel Holding Corporation (Pre-AK Steel Merger Period) | Transaction Accounting Adjustments (Note 6) | Elims. (Note 6) | Notes (Note 6) | Pro Forma After AK Steel Merger | AM USA after Reclass. (Note 4) | I/N KOTE after Reclass. (Note 4) | I/N TEK after Reclass (Note 4) | Transaction Accounting Adjustments (Note 7) | Elims. (Note 7) | Notes (Note 7) | Pro Forma Combined Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from product sales and services | $ | 3,097.8 | $ | 1,235.0 | $ | — | $ | (67.8) | 6a | $ | 4,265.0 | $ | 5,629.0 | $ | 265.2 | $ | 108.3 | $ | — | $ | (776.3) | 7a | $ | 9,491.2 | |||||||||||||||||||||||||||||||||||||||||
Operating costs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold | (3,088.9) | (1,172.9) | 7.0 | 81.4 | 6b | (4,173.4) | (6,103.0) | (244.2) | (63.9) | 79.3 | 763.8 | 7b | (9,741.4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (149.2) | (59.0) | (1.5) | — | 6c | (209.7) | (243.0) | — | — | 98.0 | — | 7c | (354.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition-related costs | (68.4) | (3.4) | — | — | (71.8) | — | — | — | — | — | (71.8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous – net | (40.5) | — | — | — | (40.5) | (8.0) | — | — | 10.0 | — | 7e | (38.5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating costs | (3,347.0) | (1,235.3) | 5.5 | 81.4 | (4,495.4) | (6,354.0) | (244.2) | (63.9) | 187.3 | 763.8 | (10,206.4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | (249.2) | (0.3) | 5.5 | 13.6 | (230.4) | (725.0) | 21.0 | 44.4 | 187.3 | (12.5) | (715.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income (expense), net | (167.9) | (27.0) | (17.5) | — | 6d | (212.4) | 54.0 | (0.1) | (0.5) | (87.9) | 7f | (246.9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | 132.6 | — | — | — | 132.6 | — | — | — | — | — | 132.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-operating income (expense) | 31.2 | 5.4 | 1.1 | — | 6e | 37.7 | (34.0) | — | — | 14.1 | — | 7g | 17.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other income (expense) | (4.1) | (21.6) | (16.4) | — | (42.1) | 20.0 | (0.1) | (0.5) | (73.8) | — | (96.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (253.3) | (21.9) | (10.9) | 13.6 | (272.5) | (705.0) | 20.9 | 43.9 | 113.5 | (12.5) | (811.7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 98.5 | 2.2 | 10.1 | (3.3) | 6f | 107.5 | 3.0 | — | — | 144.7 | 3.0 | 7h | 258.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | (154.8) | (19.7) | (0.8) | 10.3 | (165.0) | (702.0) | 20.9 | 43.9 | 258.2 | (9.5) | (553.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | (154.8) | (19.7) | (0.8) | 10.3 | (165.0) | (702.0) | 20.9 | 43.9 | 258.2 | (9.5) | (553.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss (income) attributable to noncontrolling interest | (31.2) | (12.5) | — | — | (43.7) | — | — | — | 8.4 | — | 7i | (35.3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Cliffs shareholders | $ | (186.0) | $ | (32.2) | $ | (0.8) | $ | 10.3 | $ | (208.7) | $ | (702.0) | $ | 20.9 | $ | 43.9 | $ | 266.6 | $ | (9.5) | $ | (588.8) | |||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - basic | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.51) | 6g | $ | (0.52) | 7j | $ | (1.22) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | (0.51) | $ | (0.52) | $ | (1.22) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - diluted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.51) | 6h | $ | (0.52) | 7k | $ | (1.22) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | (0.51) | $ | (0.52) | $ | (1.22) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average number of shares (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 365,245 | 6g | 403,520 | 7j | 481,707 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted | 365,245 | 6h | 403,520 | 7k | 481,707 |
Financial Statement Line | Historical AK Steel Holding Corporation Before Reclassifications | Reclassifications | Notes | Historical AK Steel Holding Corporation After Reclassifications | ||||||||||||||||||||||
Cost of products sold (exclusive of items shown separately below) | $ | (5,606.3) | $ | 5,606.3 | i | $ | — | |||||||||||||||||||
Cost of goods sold | — | (5,798.9) | i | (5,798.9) | ||||||||||||||||||||||
Selling and administrative expenses | (295.2) | 295.2 | vii, viii | — | ||||||||||||||||||||||
Selling, general and administrative expenses | — | (293.4) | viii | (293.4) | ||||||||||||||||||||||
Acquisition related costs | — | (1.8) | vii | (1.8) | ||||||||||||||||||||||
Miscellaneous – net | — | (56.0) | ii | (56.0) | ||||||||||||||||||||||
Depreciation | (192.6) | 192.6 | i | — | ||||||||||||||||||||||
Ashland Works closure | (56.0) | 56.0 | ii | — | ||||||||||||||||||||||
Interest expense, net | (146.6) | 0.9 | iii | (145.7) | ||||||||||||||||||||||
Gain (loss) on extinguishment of debt | — | 0.6 | iv | 0.6 | ||||||||||||||||||||||
Pension and OPEB income (expense) | (12.0) | 12.0 | v | — | ||||||||||||||||||||||
Other income (expense) | 18.5 | (18.5) | iii, iv, vi, | — | ||||||||||||||||||||||
Other non-operating income | — | 5.0 | v, vi | 5.0 | ||||||||||||||||||||||
Financial Statement Line | Historical AM USA Before Reclassifications | Reclassifications | Notes | Historical AM USA After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | (9,614.0) | $ | (359.0) | i | $ | (9,973.0) | |||||||||||||||||||
Miscellaneous – net | — | 42.0 | ii, iii, v | 42.0 | ||||||||||||||||||||||
Depreciation and amortization | (359.0) | 359.0 | i | — | ||||||||||||||||||||||
Asset impairments | (21.0) | 21.0 | ii | — | ||||||||||||||||||||||
Other operating income (expense) | 68.0 | (68.0) | iii | — | ||||||||||||||||||||||
Interest and other financing expense, third party | (100.0) | 100.0 | v, vi | — | ||||||||||||||||||||||
Interest expense, net | — | 58.0 | iv, vi | 58.0 | ||||||||||||||||||||||
Interest income, related party | 146.0 | (146.0) | iv | — | ||||||||||||||||||||||
Interest income, third party | 7.0 | (7.0) | iv | — | ||||||||||||||||||||||
Non-operating postretirement benefit expense | (59.0) | 59.0 | vii | — | ||||||||||||||||||||||
Other non-operating income (expense) | — | (59.0) | vii | (59.0) |
Financial Statement Line | Historical I/N Kote Before Reclassifications | Reclassifications | Notes | Historical I/N Kote After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | — | $ | (459.8) | i,ii,iii | $ | (459.8) | |||||||||||||||||||
Production costs-excluding depreciation and amortization disclosed below | (140.4) | 140.4 | i | — | ||||||||||||||||||||||
Substrate costs | (313.5) | 313.5 | ii | — | ||||||||||||||||||||||
Depreciation and amortization | (5.9) | 5.9 | iii | — | ||||||||||||||||||||||
Interest expense to Partners | (0.4) | 0.4 | iv | — | ||||||||||||||||||||||
Interest income | 0.5 | (0.5) | v | — | ||||||||||||||||||||||
Interest expense, net | — | 0.1 | iv,v | 0.1 | ||||||||||||||||||||||
Non-operating post retirement benefit expense | (0.2) | 0.2 | vi | — | ||||||||||||||||||||||
Other non-operating income (expense) | — | (0.2) | vi | (0.2) |
Financial Statement Line | Historical I/N Tek Before Reclassifications | Reclassifications | Notes | Historical I/N Tek After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | — | $ | (98.1) | i,ii | $ | (98.1) | |||||||||||||||||||
Processing costs-excluding depreciation and amortization disclosed below | (89.2) | 89.2 | i | — | ||||||||||||||||||||||
Depreciation and amortization | (8.9) | 8.9 | ii | — | ||||||||||||||||||||||
Interest expense to Partners | (1.0) | 1.0 | iii | — | ||||||||||||||||||||||
Interest expense, net | — | (1.0) | iii | (1.0) | ||||||||||||||||||||||
Non-operating post retirement benefit expense | (0.8) | 0.8 | iv | — | ||||||||||||||||||||||
Other non-operating income (expense) | — | (0.8) | iv | (0.8) |
Financial Statement Line | Historical AM USA Before Reclassifications | Reclassifications | Notes | Historical AM USA After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | (5,794.0) | $ | (309.0) | i | $ | (6,103.0) | |||||||||||||||||||
Miscellaneous – net | — | (8.0) | ii, iii, | (8.0) | ||||||||||||||||||||||
Depreciation and amortization | (309.0) | 309.0 | i | — | ||||||||||||||||||||||
Asset impairments | (26.0) | 26.0 | ii | — | ||||||||||||||||||||||
Other operating income | 18.0 | (18.0) | iii | — | ||||||||||||||||||||||
Interest and other financing expense, third party | (50.0) | 50.0 | v | |||||||||||||||||||||||
Interest expense, net | — | 54.0 | iv, v | 54.0 | ||||||||||||||||||||||
Interest income, related party | 103.0 | (103.0) | iv | |||||||||||||||||||||||
Interest income, third party | 1.0 | (1.0) | iv | |||||||||||||||||||||||
Pension and OPEB income (expense) | (34.0) | 34.0 | vi | — | ||||||||||||||||||||||
Other non-operating income (expense) | — | (34.0) | vi | (34.0) |
Financial Statement Line | Historical I/N Kote Before Reclassifications | Reclassifications | Notes | Historical I/N Kote After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | — | $ | (244.2) | i,ii,iii | $ | (244.2) | |||||||||||||||||||
Production expenses - excludes depreciation and amortization expense disclosed below | (69.4) | 69.4 | i | — | ||||||||||||||||||||||
Substrate costs | (170.6) | 170.6 | ii | — | ||||||||||||||||||||||
Depreciation and amortization | (4.2) | 4.2 | iii | — |
Financial Statement Line | Historical I/N Tek Before Reclassifications | Reclassifications | Notes | Historical I/N Tek After Reclassifications | ||||||||||||||||||||||
Cost of goods sold | $ | — | $ | (63.9) | i,ii | $ | (63.9) | |||||||||||||||||||
Production expenses - excludes depreciation and amortization expense disclosed below | (57.4) | 57.4 | i | — | ||||||||||||||||||||||
Depreciation and amortization | (6.5) | 6.5 | ii | — |
Financial Statement Line | Historical AM USA Before Reclassifications | Reclassifications | Notes | Historical AM USA After Reclassifications | ||||||||||||||||||||||
Accounts receivable, net | $ | 80.0 | $ | 511.0 | i | $ | 591.0 | |||||||||||||||||||
Receivables from related companies | 511.0 | (511.0) | i | — | ||||||||||||||||||||||
Inventories | 1,328.0 | 62.8 | ii | 1,390.8 | ||||||||||||||||||||||
Income tax receivable, current | — | 13.0 | iv | 13.0 | ||||||||||||||||||||||
Investments in and advances to joint ventures | 5.0 | (5.0) | iii | — | ||||||||||||||||||||||
Other current assets | — | 30.0 | iii,iv,v | 30.0 | ||||||||||||||||||||||
Prepaid expenses and other | 38.0 | (38.0) | v,iv | — | ||||||||||||||||||||||
Property, plant and equipment, net | 3,569.0 | 134.0 | vi | 3,703.0 | ||||||||||||||||||||||
Investments in and advances to joint ventures | 128.0 | (128.0) | vii | — | ||||||||||||||||||||||
Receivables from related companies | 2,358.0 | (2,358.0) | viii | — | ||||||||||||||||||||||
Finance Right-of-use assets, net | 134.0 | (134.0) | vi | — | ||||||||||||||||||||||
Other non-current assets | 101.0 | 2,486.0 | vii,viii | 2,587.0 | ||||||||||||||||||||||
Accounts payable | 737.0 | 598.3 | ii,ix,x | 1,335.3 | ||||||||||||||||||||||
Payables to related parties | 565.0 | (565.0) | ix | — | ||||||||||||||||||||||
Accrued salaries, wages and benefits | 361.0 | (361.0) | xi | — | ||||||||||||||||||||||
Accrued taxes | 58.0 | (58.0) | xv | — | ||||||||||||||||||||||
Accrued expenses and other liabilities | 100.0 | (100.0) | xii,xiii | — | ||||||||||||||||||||||
Accrued liabilities | — | 414.0 | xi,xiii | 414.0 | ||||||||||||||||||||||
Unfavorable contracts and firm commitments | 34.0 | (34.0) | xiv | — | ||||||||||||||||||||||
Debt | 436.0 | (436.0) | xvi | — | ||||||||||||||||||||||
Finance lease obligations | 52.0 | (52.0) | xvii | — | ||||||||||||||||||||||
Operating lease obligations | 16.0 | (16.0) | xviii | — | ||||||||||||||||||||||
Other current liabilities | — | 672.5 | ii,x,xii,xiv,xv,xvi, xvii,xviii | 672.5 | ||||||||||||||||||||||
Finance lease obligations | 178.0 | (178.0) | xix | — | ||||||||||||||||||||||
Deferred income taxes | 3.0 | (3.0) | xx | — | ||||||||||||||||||||||
Other long-term liabilities | 441.0 | (441.0) | xxi,xxii | — | ||||||||||||||||||||||
Asset retirement obligations | — | 77.0 | xxi | 77.0 | ||||||||||||||||||||||
Other non-current liabilities | — | 545.0 | xix,xx,xxii | 545.0 |
Financial Statement Line | Historical I/N Kote Before Reclassifications | Reclassifications | Notes | Historical I/N Kote After Reclassifications | ||||||||||||||||||||||
Accounts receivable, net | $ | 41.4 | $ | 46.1 | i | $ | 87.5 | |||||||||||||||||||
Receivables from related companies | 46.1 | (46.1) | i | — | ||||||||||||||||||||||
Inventories | 39.7 | 9.1 | ii | 48.8 | ||||||||||||||||||||||
Spares and repair parts | 9.1 | (9.1) | ii | |||||||||||||||||||||||
Accounts payable | 1.3 | 10.7 | iii | 12.0 | ||||||||||||||||||||||
Payables to related parties | 10.7 | (10.7) | iii | — | ||||||||||||||||||||||
Accrued interest | 0.1 | (0.1) | iv | — | ||||||||||||||||||||||
Accrued liabilities | — | 0.1 | iv | 0.1 | ||||||||||||||||||||||
Current portion of long term debt | 10.6 | (10.6) | v | — | ||||||||||||||||||||||
Other accrued liabilities | 10.4 | (10.4) | vi | — | ||||||||||||||||||||||
Other current liabilities | — | 21.0 | v, vi | 21.0 |
Financial Statement Line | Historical I/N Tek Before Reclassifications | Reclassifications | Notes | Historical I/N Tek After Reclassifications | ||||||||||||||||||||||
Accounts receivable, net | $ | — | $ | 45.3 | i | $ | 45.3 | |||||||||||||||||||
Receivables from related parties | 45.3 | (45.3) | i | — | ||||||||||||||||||||||
Inventories | — | 16.5 | ii | 16.5 | ||||||||||||||||||||||
Spares and repair parts | 16.5 | (16.5) | ii | |||||||||||||||||||||||
Accounts payable | 2.5 | 5.3 | iii | 7.8 | ||||||||||||||||||||||
Payables to related parties | 5.3 | (5.3) | iii | — | ||||||||||||||||||||||
Accrued interest | 0.2 | (0.2) | iv | — | ||||||||||||||||||||||
Accrued liabilities | — | 0.2 | iv | 0.2 | ||||||||||||||||||||||
Current portion of long term debt | 25.9 | (25.9) | v | — | ||||||||||||||||||||||
Other accrued liabilities | 13.5 | (13.5) | vi | — | ||||||||||||||||||||||
Other current liabilities | — | 39.4 | v, vi | 39.4 |
Amount | ||||||||
Fair value of Cliffs common shares issued | $ | 989.8 | ||||||
Fair value of Cliffs preferred stock issued | 738.4 | |||||||
Estimated cash consideration paid | 631.2 | |||||||
Fair value of settlement of a pre-existing relationship | 236.6 | |||||||
Total estimated transaction consideration | $ | 2,596.0 |
Amount | ||||||||
Number of Cliffs common shares issued | 78.2 | |||||||
Closing price of Cliffs common share as of December 9, 2020 | $ | 12.66 | ||||||
Fair value of Cliffs common shares issued | $ | 989.8 |
Amount | ||||||||
Number of Cliffs Series B Participating Redeemable Preferred Stock issued | 0.6 | |||||||
Redemption price as of December 9, 2020 | $ | 1,266 | ||||||
Fair value of Cliffs preferred stock issued | $ | 738.4 |
Amount | ||||||||
Cash consideration pursuant to the AM USA Transaction Agreement | $ | 505.0 | ||||||
Cash consideration for purchase of the remaining JV partners' interest of I/N Kote and I/N Tek | 182.3 | |||||||
Estimated total cash consideration payable (receivable) | (56.1) | |||||||
Total estimated transaction consideration | $ | 631.2 |
Amount | ||||||||
Accounts receivable | $ | 96.9 | ||||||
Freestanding derivative asset from customer supply agreement | 139.7 | |||||||
Fair value of settlement of a pre-existing relationship | $ | 236.6 |
Amount | |||||
Cash and cash equivalents | $ | 94.9 | |||
Accounts receivable, net | 389.6 | ||||
Inventories | 2,190.9 | ||||
Income tax receivable, current | 13.0 | ||||
Other current assets | 31.2 | ||||
Property, plant and equipment, net | 3,760.0 | ||||
Right-of-use asset, operating leases | 60.0 | ||||
Other non-current assets | 112.9 | ||||
Accounts payable | (1,011.5) | ||||
Accrued liabilities | (375.2) | ||||
Other current liabilities | (261.9) | ||||
Operating lease liability, non-current | (45.2) | ||||
Pension and other postretirement benefit liabilities | (3,203.9) | ||||
Asset retirement obligations | (94.6) | ||||
Other non-current liabilities | (404.6) | ||||
Noncontrolling interest | (15.0) | ||||
Net identifiable assets acquired | $ | 1,240.6 | |||
Goodwill | 1,355.4 | ||||
Total net assets acquired | $ | 2,596.0 |
Nine Months Ended September 30, 2020 | Year Ended December 31, 2019 | |||||||||||||
Amortization of acquired intangible liabilities (i) | $ | 3.6 | $ | 17.5 | ||||||||||
Depreciation of property, plant and equipment (ii) | 5.8 | (7.8) | ||||||||||||
Amortization of fair value step up of inventory (iii) | — | (74.2) | ||||||||||||
Amortization of equity method investment basis adjustment (iv) | (2.4) | (3.2) | ||||||||||||
Total transaction accounting adjustments | $ | 7.0 | $ | (67.7) | ||||||||||
Elimination of costs related to intercompany sales from Cliffs to AK Steel (v) | $ | 81.4 | $ | 569.8 |
Nine Months Ended September 30, 2020 | Year Ended December 31, 2019 | |||||||||||||
Elimination of AK Steel's historical debt issuance costs and original issue discounts | $ | 1.5 | $ | 14.5 | ||||||||||
Decreased (increase) interest expense from the planned debt refinancing | (19.0) | 2.0 | ||||||||||||
Total transaction accounting adjustments | $ | (17.5) | $ | 16.5 |
Nine Months Ended September 30, 2020 | Year Ended December 31, 2019 | |||||||||||||
Depreciation of property, plant and equipment (i) | $ | 107.3 | $ | 90.3 | ||||||||||
Depletion of mineral reserves (ii) | (19.6) | (26.2) | ||||||||||||
Incremental Hibbing idle costs (iii) | (8.4) | — | ||||||||||||
Amortization of fair value step up of inventory (iv) | — | (287.9) | ||||||||||||
Total transaction accounting adjustments | $ | 79.3 | $ | (223.8) | ||||||||||
Elimination of costs related to intercompany revenue (v) | $ | 763.8 | $ | 1,415.9 |
Nine Months Ended September 30, 2020 | Year Ended December 31, 2019 | |||||||||||||
Elimination of AM USA's historical deferred financing cost | $ | 4.3 | $ | 5.2 | ||||||||||
Reversal of interest income on notes receivable settled with former parent and subsidiaries at acquisition date | (103.0) | (146.0) | ||||||||||||
Decreased interest expense | 10.8 | 32.0 | ||||||||||||
Total transaction accounting adjustments | $ | (87.9) | $ | (108.8) |
Transaction Accounting Adjustments | ||||||||
Fair value step-up of inventory (i) | $ | 287.9 | ||||||
Elimination of LIFO inventory method (ii) | 437.0 | |||||||
Impact of consolidation of Hibbing joint venture (iii) | 9.9 | |||||||
Total | $ | 734.8 |
Property, Plant and Equipment Classification | Estimated Fair Value | Estimated Remaining Useful Life | ||||||||||||
Land, land improvements and leasehold improvements | $ | 310.1 | NA | |||||||||||
Buildings | 260.9 | 20-30 years | ||||||||||||
Machinery and equipment | 2,725.0 | 2-15 years | ||||||||||||
Mineral reserves | 235.0 | 6-13 years | ||||||||||||
Construction in progress | 229.0 | NA | ||||||||||||
Total | $ | 3,760.0 |
Financial Statement Line | Transaction Accounting Adjustments | |||||||
Cash and equivalents | $ | 3.2 | ||||||
Inventories | 9.9 | |||||||
Other current assets | 0.5 | |||||||
Property, plant and equipment, net | 31.9 | |||||||
Other non-current assets | 4.6 | |||||||
Accounts payable | 11.8 | |||||||
Accrued liabilities | 7.8 | |||||||
Other current liabilities | 8.1 | |||||||
Operating lease liability, non-current | 0.2 | |||||||
Pension and OPEB liabilities | 30.4 | |||||||
Asset retirement obligations | 17.6 | |||||||
Other non-current liabilities | 2.3 | |||||||
Equity (see Note 9p. below) | (28.1) |
Common shares | Capital in excess of par value of shares | Retained deficit | Accumulated other comprehensive loss | Noncontrolling interest | ||||||||||||||||||||||||||||
Fair value of Cliffs common shares issued | $ | 9.7 | $ | 980.1 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Fair value of the noncontrolling interest | — | — | — | — | 15.0 | |||||||||||||||||||||||||||
Elimination of AM USA's, I/N Kote's and I/N Tek's historical equity | — | (6,522.9) | 5,062.7 | — | — | |||||||||||||||||||||||||||
Elimination of Cliffs' accumulated other comprehensive loss related to Hibbing | — | — | — | 34.5 | — | |||||||||||||||||||||||||||
Impact of fully consolidating Hibbing | — | 130.5 | (111.8) | (46.8) | — | |||||||||||||||||||||||||||
Gain recognized on elimination of Cliffs' investment related to Hibbing | — | — | 3.0 | — | — | |||||||||||||||||||||||||||
Elimination of AM USA's, I/N Kote's and I/N Tek's historical unrealized losses related to pension and postretirement benefits | — | — | — | (1,104.7) | — | |||||||||||||||||||||||||||
Total | $ | 9.7 | $ | (5,412.3) | $ | 4,953.9 | $ | (1,117.0) | $ | 15.0 |
Cover Document |
Dec. 07, 2020 |
---|---|
Cover [Abstract] | |
Document Type | 8-K/A |
Document Period End Date | Dec. 07, 2020 |
Entity Registrant Name | CLEVELAND-CLIFFS INC. |
Entity Incorporation, State or Country Code | OH |
Entity File Number | 1-8944 |
Entity Tax Identification Number | 34-1464672 |
Entity Address, Address Line One | 200 Public Square, |
Entity Address, Address Line Two | Suite 3300, |
Entity Address, City or Town | Cleveland, |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44114-2315 |
City Area Code | 216 |
Local Phone Number | 694-5700 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Shares, par value $0.125 per share |
Trading Symbol | CLF |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000764065 |
Amendment Flag | false |
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