SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

ALLOWANCE FOR CREDIT LOSSES

The following is a roll-forward of our allowance for credit losses associated with Accounts receivable, net:

(In millions)	2023		2022
Allowance for credit losses as of January 1	$	(4)	$	(4)
Decrease (increase) in allowance	(3)		1
Allowance for credit losses as of June 30	$	(7)	$	(3)

INVENTORIES

The following table presents the detail of our Inventories on the Statements of Unaudited Condensed Consolidated Financial Position:

(In millions)	June 30, 2023		December 31, 2022
Product inventories
Finished and semi-finished goods	$	2,765	$	2,971
Raw materials	1,582		1,794
Total product inventories	4,347		4,765
Manufacturing supplies and critical spares	380		365
Inventories	$	4,727	$	5,130

SUPPLY CHAIN FINANCE PROGRAMS

We negotiate payment terms directly with our suppliers for the purchase of goods and services. We currently offer voluntary supply chain finance programs that enable our suppliers to sell their Cliffs receivables to financial intermediaries, at the sole discretion of both the suppliers and financial intermediaries. No guarantees are provided by us or our subsidiaries under the supply chain finance programs. The supply chain finance programs allow our suppliers to be paid by the financial intermediaries earlier than the due date on the applicable invoice. Supply chain finance programs that extend terms or provide us an economic benefit are classified as short-term financings. As of June 30, 2023 and December 31, 2022, we had $23 million and $19 million, respectively, deemed as short-term financings that are classified in Other current liabilities. Additionally, as of June 30, 2023 and December 31, 2022, we had $94 million and $112 million, respectively, classified as Accounts payable.

CASH FLOW INFORMATION

A reconciliation of capital additions to cash paid for capital expenditures is as follows:

	Six Months Ended June 30,
(In millions)	2023		2022
Capital additions	$	290	$	489
Less:
Non-cash accruals	(89)		(2)
Right-of-use assets - finance leases	60		23
Cash paid for capital expenditures including deposits	$	319	$	468

Cash payments (receipts) for income taxes and interest are as follows:

	Six Months Ended June 30,
(In millions)	2023		2022
Income taxes paid	$	37	$	299
Income tax refunds	(138)		(1)
Interest paid on debt obligations net of capitalized interest1	142		133
1 Capitalized interest was $6 million and $5 million for the six months ended June 30, 2023 and 2022, respectively.