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Name | Location | Ownership Interest | Operation | |||
Northshore | Minnesota | 100.0% | Iron Ore | |||
United Taconite | Minnesota | 100.0% | Iron Ore | |||
Wabush | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | |||
Bloom Lake | Quebec, Canada | 82.8% | Iron Ore | |||
Tilden | Michigan | 85.0% | Iron Ore | |||
Empire | Michigan | 79.0% | Iron Ore | |||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | |||
Pinnacle | West Virginia | 100.0% | Coal | |||
Oak Grove | Alabama | 100.0% | Coal | |||
CLCC | West Virginia | 100.0% | Coal |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2014 | December 31, 2013 | |||||||||
Hibbing | Other non-current assets1 | Equity Method | 23% | $ | 8.1 | $ | (3.9 | ) | ||||||
Other | Other non-current assets | Equity Method | Various | 24.4 | 34.7 | |||||||||
$ | 32.5 | $ | 30.8 |
|
(In Millions) | |||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Revenues from product sales and services: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 767.4 | 59 | % | $ | 782.4 | 51 | % | $ | 1,643.3 | 49 | % | $ | 1,894.2 | 45 | % | |||||||||||
Eastern Canadian Iron Ore | 148.0 | 11 | % | 284.2 | 18 | % | 480.3 | 15 | % | 743.4 | 18 | % | |||||||||||||||
Asia Pacific Iron Ore | 212.3 | 17 | % | 301.7 | 20 | % | 699.6 | 21 | % | 899.5 | 22 | % | |||||||||||||||
North American Coal | 170.5 | 13 | % | 178.3 | 11 | % | 515.8 | 15 | % | 638.5 | 15 | % | |||||||||||||||
Total revenues from product sales and services | $ | 1,298.2 | 100 | % | $ | 1,546.6 | 100 | % | $ | 3,339.0 | 100 | % | $ | 4,175.6 | 100 | % | |||||||||||
Sales margin: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 219.5 | $ | 273.5 | $ | 461.7 | $ | 647.1 | |||||||||||||||||||
Eastern Canadian Iron Ore | (76.8 | ) | (22.0 | ) | (165.0 | ) | (52.3 | ) | |||||||||||||||||||
Asia Pacific Iron Ore | 9.1 | 99.0 | 111.4 | 255.3 | |||||||||||||||||||||||
North American Coal | (24.3 | ) | (1.8 | ) | (125.4 | ) | 6.6 | ||||||||||||||||||||
Other | — | — | — | (1.9 | ) | ||||||||||||||||||||||
Sales margin | 127.5 | 348.7 | 282.7 | 854.8 | |||||||||||||||||||||||
Other operating expense | (7,886.6 | ) | (124.7 | ) | (8,104.2 | ) | (200.5 | ) | |||||||||||||||||||
Other expense | (40.3 | ) | (45.9 | ) | (124.4 | ) | (137.4 | ) | |||||||||||||||||||
Income (loss) from continuing operations before income taxes and equity loss from ventures | $ | (7,799.4 | ) | $ | 178.1 | $ | (7,945.9 | ) | $ | 516.9 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Net Income (Loss) | $ | (6,887.2 | ) | $ | 113.9 | $ | (6,943.4 | ) | $ | 376.0 | |||||||||||||
Less: | |||||||||||||||||||||||
Interest expense, net | (47.4 | ) | (44.7 | ) | (134.9 | ) | (134.5 | ) | |||||||||||||||
Income tax benefit (expense) | 921.4 | (65.7 | ) | 1,012.3 | (69.0 | ) | |||||||||||||||||
Depreciation, depletion and amortization | (144.0 | ) | (153.1 | ) | (430.4 | ) | (438.0 | ) | |||||||||||||||
EBITDA | $ | (7,617.2 | ) | $ | 377.4 | $ | (7,390.4 | ) | $ | 1,017.5 | |||||||||||||
Less: | |||||||||||||||||||||||
Impairment of goodwill and other long-lived assets | $ | (7,769.1 | ) | $ | — | $ | (7,773.1 | ) | $ | — | |||||||||||||
Wabush related costs | (64.0 | ) | (13.0 | ) | (122.3 | ) | (2.3 | ) | |||||||||||||||
Wabush sales margin | (20.0 | ) | (1.3 | ) | (47.5 | ) | (44.2 | ) | |||||||||||||||
Foreign exchange remeasurement | 26.4 | (14.1 | ) | 8.4 | 36.5 | ||||||||||||||||||
Proxy contest and change in control costs in SG&A | (21.9 | ) | — | (26.2 | ) | — | |||||||||||||||||
Litigation judgment | — | (9.6 | ) | — | (9.6 | ) | |||||||||||||||||
Severance in SG&A | (1.9 | ) | (8.1 | ) | (12.6 | ) | (8.1 | ) | |||||||||||||||
Adjusted EBITDA | $ | 233.3 | $ | 423.5 | $ | 582.9 | $ | 1,045.2 | |||||||||||||||
EBITDA: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 242.1 | $ | 296.9 | $ | 538.4 | $ | 715.9 | |||||||||||||||
Eastern Canadian Iron Ore | (6,423.2 | ) | (43.8 | ) | (6,537.6 | ) | (9.6 | ) | |||||||||||||||
Asia Pacific Iron Ore | (330.9 | ) | 138.1 | (148.7 | ) | 367.6 | |||||||||||||||||
North American Coal | (827.5 | ) | 31.0 | (875.6 | ) | 85.4 | |||||||||||||||||
Other | (277.7 | ) | (44.8 | ) | (366.9 | ) | (141.8 | ) | |||||||||||||||
Total EBITDA | $ | (7,617.2 | ) | $ | 377.4 | $ | (7,390.4 | ) | $ | 1,017.5 | |||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 248.7 | $ | 305.0 | $ | 556.1 | $ | 738.0 | |||||||||||||||
Eastern Canadian Iron Ore | (33.2 | ) | (8.6 | ) | (49.3 | ) | 50.0 | ||||||||||||||||
Asia Pacific Iron Ore | 46.1 | 140.9 | 234.5 | 375.5 | |||||||||||||||||||
North American Coal | 6.1 | 37.4 | (32.2 | ) | 103.2 | ||||||||||||||||||
Other | (34.4 | ) | (51.2 | ) | (126.2 | ) | (221.5 | ) | |||||||||||||||
Total Adjusted EBITDA | $ | 233.3 | $ | 423.5 | $ | 582.9 | $ | 1,045.2 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Depreciation, depletion and amortization: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 25.9 | $ | 27.3 | $ | 81.2 | $ | 82.3 | |||||||||||||||
Eastern Canadian Iron Ore | 43.6 | 46.8 | 127.2 | 130.3 | |||||||||||||||||||
Asia Pacific Iron Ore | 42.2 | 38.0 | 123.6 | 116.1 | |||||||||||||||||||
North American Coal | 30.3 | 38.8 | 92.2 | 99.7 | |||||||||||||||||||
Other | 2.0 | 2.2 | 6.2 | 9.6 | |||||||||||||||||||
Total depreciation, depletion and amortization | $ | 144.0 | $ | 153.1 | $ | 430.4 | $ | 438.0 | |||||||||||||||
Capital additions1: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 8.5 | $ | 15.2 | $ | 37.4 | $ | 39.1 | |||||||||||||||
Eastern Canadian Iron Ore | 37.9 | 181.5 | 112.2 | 535.3 | |||||||||||||||||||
Asia Pacific Iron Ore | 3.1 | 10.4 | 8.3 | 8.6 | |||||||||||||||||||
North American Coal | 4.6 | 2.0 | 24.8 | 37.2 | |||||||||||||||||||
Other | 0.5 | 2.2 | 3.3 | 4.9 | |||||||||||||||||||
Total capital additions | $ | 54.6 | $ | 211.3 | $ | 186.0 | $ | 625.1 |
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Assets: | |||||||
U.S. Iron Ore | $ | 1,715.8 | $ | 1,671.6 | |||
Eastern Canadian Iron Ore | 1,113.2 | 7,915.5 | |||||
Asia Pacific Iron Ore | 577.2 | 1,078.4 | |||||
North American Coal | 904.0 | 1,841.8 | |||||
Other | 217.0 | 455.6 | |||||
Total segment assets | 4,527.2 | 12,962.9 | |||||
Corporate | 284.0 | 159.0 | |||||
Total assets | $ | 4,811.2 | $ | 13,121.9 |
|
(In Millions) | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | September 30, 2014 | December 31, 2013 | ||||||||||||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Interest Rate Swaps | $ | — | $ | — | $ | — | Other current liabilities | $ | 2.1 | ||||||||||||||
Foreign Exchange Contracts | — | Other current assets | 0.3 | Other current liabilities | 17.4 | Other current liabilities | 25.8 | ||||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | 0.3 | $ | 17.4 | $ | 27.9 | |||||||||||||||
Derivatives not designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 1.1 | ||||||||||||||
Customer Supply Agreement | Other current assets | 54.5 | Other current assets | 55.8 | — | — | |||||||||||||||||
Provisional Pricing Arrangements | — | Other current assets | 3.1 | Other current liabilities | 23.3 | Other current liabilities | 10.3 | ||||||||||||||||
Total derivatives not designated as hedging instruments under ASC 815 | $ | 54.5 | $ | 58.9 | $ | 23.3 | $ | 11.4 | |||||||||||||||
Total derivatives | $ | 54.5 | $ | 59.2 | $ | 40.7 | $ | 39.3 |
(In Millions) | |||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) Recognized in OCI on Derivatives | Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings | Amount of Gain (Loss) Reclassified from Accumulated OCI into Earnings | ||||||||||||||
(Effective Portion) | (Effective Portion) | (Effective Portion) | |||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (12.6 | ) | $ | 2.9 | Product revenues | $ | 1.6 | $ | (8.9 | ) | ||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | (7.4 | ) | 9.2 | Cost of goods sold and operating expenses | (1.0 | ) | (7.3 | ) | |||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | — | — | ||||||||||||
Total | $ | (20.0 | ) | $ | 12.1 | $ | 0.6 | $ | (16.2 | ) | |||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (3.4 | ) | $ | (25.2 | ) | Product revenues | $ | (11.2 | ) | $ | (4.5 | ) | ||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | (9.2 | ) | (9.9 | ) | Cost of goods sold and operating expenses | (7.1 | ) | (7.5 | ) | ||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | (0.5 | ) | — | |||||||||||
$ | (12.6 | ) | $ | (35.1 | ) | $ | (18.8 | ) | $ | (12.0 | ) |
(In Millions) | ||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivative | Amount of Gain (Loss) Recognized in Income on Derivative | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Foreign Exchange Contracts | Cost of goods sold and operating expenses | $ | — | $ | — | $ | (3.3 | ) | $ | — | ||||||
Commodity Contracts | Other non-operating income (expense) | — | (2.7 | ) | — | (2.7 | ) | |||||||||
Customer Supply Agreement | Product revenues | 62.6 | 53.9 | 124.6 | 113.4 | |||||||||||
Provisional Pricing Arrangements | Product revenues | (3.1 | ) | 24.3 | (23.3 | ) | (6.8 | ) | ||||||||
$ | 59.5 | $ | 75.5 | $ | 98.0 | $ | 103.9 |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Segment | Finished Goods | Work-in Process | Total Inventory | Finished Goods | Work-in Process | Total Inventory | |||||||||||||||||
U.S. Iron Ore | $ | 279.5 | $ | 23.5 | $ | 303.0 | $ | 92.1 | $ | 13.0 | $ | 105.1 | |||||||||||
Eastern Canadian Iron Ore | 18.2 | 15.8 | 34.0 | 65.3 | 48.1 | 113.4 | |||||||||||||||||
Asia Pacific Iron Ore | 25.8 | 85.1 | 110.9 | 39.7 | 50.6 | 90.3 | |||||||||||||||||
North American Coal | 52.7 | 16.1 | 68.8 | 59.4 | 23.2 | 82.6 | |||||||||||||||||
Total | $ | 376.2 | $ | 140.5 | $ | 516.7 | $ | 256.5 | $ | 134.9 | $ | 391.4 |
|
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Land rights and mineral rights | $ | 1,947.6 | $ | 7,819.6 | |||
Office and information technology | 80.7 | 125.7 | |||||
Buildings | 88.9 | 255.2 | |||||
Mining equipment | 1,399.5 | 1,819.3 | |||||
Processing equipment | 361.9 | 2,148.6 | |||||
Electric power facilities | 57.4 | 114.3 | |||||
Port facilities | 27.6 | 99.4 | |||||
Interest capitalized during construction | 18.8 | 23.8 | |||||
Land improvements | 32.5 | 69.3 | |||||
Other | 65.5 | 104.4 | |||||
Construction in-progress | 94.1 | 991.3 | |||||
4,174.5 | 13,570.9 | ||||||
Accumulated depreciation and depletion | (966.6 | ) | (2,417.5 | ) | |||
$ | 3,207.9 | $ | 11,153.4 |
|
(In Millions) | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||
U.S. Iron Ore | Eastern Canadian Iron Ore | Asia Pacific Iron Ore | North American Coal | Other | Total | U.S. Iron Ore | Eastern Canadian Iron Ore | Asia Pacific Iron Ore | North American Coal | Other | Total | ||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 2.0 | $ | — | $ | 72.5 | $ | — | $ | — | $ | 74.5 | $ | 2.0 | $ | — | $ | 84.5 | $ | — | $ | 80.9 | $ | 167.4 | |||||||||||||||||||||||
Arising in business combinations | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Impairment | — | — | (73.5 | ) | — | — | (73.5 | ) | — | — | — | — | (80.9 | ) | (80.9 | ) | |||||||||||||||||||||||||||||||
Impact of foreign currency translation | — | — | 1.0 | — | — | 1.0 | — | — | (12.0 | ) | — | — | (12.0 | ) | |||||||||||||||||||||||||||||||||
Ending Balance | $ | 2.0 | $ | — | $ | — | $ | — | $ | — | $ | 2.0 | $ | 2.0 | $ | — | $ | 72.5 | $ | — | $ | — | $ | 74.5 | |||||||||||||||||||||||
Accumulated goodwill impairment loss | $ | — | $ | (1,000.0 | ) | (73.5 | ) | $ | (27.8 | ) | $ | (80.9 | ) | $ | (1,182.2 | ) | $ | — | $ | (1,000.0 | ) | $ | — | $ | (27.8 | ) | $ | (80.9 | ) | $ | (1,108.7 | ) |
(In Millions) | |||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Classification | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Definite-lived intangible assets: | |||||||||||||||||||||||||
Permits | Other non-current assets | $ | 91.6 | $ | (16.8 | ) | $ | 74.8 | $ | 127.4 | $ | (35.9 | ) | $ | 91.5 | ||||||||||
Utility contracts | Other non-current assets | 54.3 | (53.9 | ) | 0.4 | 54.7 | (53.1 | ) | 1.6 | ||||||||||||||||
Leases | Other non-current assets | 2.4 | (0.2 | ) | 2.2 | 2.4 | (0.1 | ) | 2.3 | ||||||||||||||||
Total intangible assets | $ | 148.3 | $ | (70.9 | ) | $ | 77.4 | $ | 184.5 | $ | (89.1 | ) | $ | 95.4 | |||||||||||
Below-market sales contracts | Other current liabilities | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | ||||||||
Below-market sales contracts | Other liabilities | (205.9 | ) | 175.0 | (30.9 | ) | (205.9 | ) | 159.7 | (46.2 | ) | ||||||||||||||
Total below-market sales contracts | $ | (228.9 | ) | $ | 175.0 | $ | (53.9 | ) | $ | (228.9 | ) | $ | 159.7 | $ | (69.2 | ) |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2014 (remaining three months) | $ | 1.4 | |
2015 | 5.6 | ||
2016 | 5.3 | ||
2017 | 5.1 | ||
2018 | 5.3 | ||
2019 | 5.3 | ||
Total | $ | 28.0 |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2014 (remaining three months) | $ | 7.8 | |
2015 | 23.0 | ||
2016 | 23.1 | ||
Total | $ | 53.9 |
|
(In Millions) | |||||||||||||||
September 30, 2014 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 120.0 | $ | — | $ | — | $ | 120.0 | |||||||
Derivative assets | — | — | 54.5 | 54.5 | |||||||||||
Available-for-sale marketable securities | 6.1 | — | — | 6.1 | |||||||||||
Foreign exchange contracts | — | — | — | — | |||||||||||
Total | $ | 126.1 | $ | — | $ | 54.5 | $ | 180.6 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 23.3 | $ | 23.3 | |||||||
Foreign exchange contracts | — | 17.4 | — | 17.4 | |||||||||||
Total | $ | — | $ | 17.4 | $ | 23.3 | $ | 40.7 |
(In Millions) | |||||||||||||||
December 31, 2013 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 85.0 | $ | — | $ | — | $ | 85.0 | |||||||
Derivative assets | — | — | 58.9 | 58.9 | |||||||||||
Available-for-sale marketable securities | 21.4 | — | — | 21.4 | |||||||||||
Foreign exchange contracts | — | 0.3 | — | 0.3 | |||||||||||
Total | $ | 106.4 | $ | 0.3 | $ | 58.9 | $ | 165.6 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | 2.1 | $ | 10.3 | $ | 12.4 | |||||||
Foreign exchange contracts | — | 26.9 | — | 26.9 | |||||||||||
Total | $ | — | $ | 29.0 | $ | 10.3 | $ | 39.3 |
Qualitative/Quantitative Information About Level 3 Fair Value Measurements | ||||||||||||
($ in millions) Fair Value at September 30, 2014 | Balance Sheet Location | Valuation Technique | Unobservable Input | Range or Point Estimate (Weighted Average) | ||||||||
Provisional Pricing Arrangements | $ | 23.3 | Derivative liabilities | Market Approach | Management's Estimate of 62% Fe | $78 | ||||||
Customer Supply Agreement | $ | 54.5 | Derivative assets | Market Approach | Hot-Rolled Steel Estimate | $635 - $665 ($650) |
(In Millions) | |||||||||||||||
Derivative Assets (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Beginning balance | $ | 33.0 | $ | 45.1 | $ | 58.9 | $ | 62.4 | |||||||
Total gains | |||||||||||||||
Included in earnings | 62.6 | 57.6 | 124.6 | 118.0 | |||||||||||
Settlements | (41.1 | ) | (36.0 | ) | (129.0 | ) | (113.7 | ) | |||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | 54.5 | $ | 66.7 | $ | 54.5 | $ | 66.7 | |||||||
Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date | $ | 62.6 | $ | 57.6 | $ | 124.6 | $ | 118.0 |
(In Millions) | |||||||||||||||
Derivative Liabilities (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Beginning balance | $ | (20.2 | ) | $ | (32.0 | ) | $ | (10.3 | ) | $ | (11.3 | ) | |||
Total gains | |||||||||||||||
Included in earnings | (3.1 | ) | 20.6 | (23.3 | ) | (11.4 | ) | ||||||||
Settlements | — | — | 10.3 | 11.3 | |||||||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | (23.3 | ) | $ | (11.4 | ) | $ | (23.3 | ) | $ | (11.4 | ) | |||
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date | $ | (3.1 | ) | $ | 20.6 | $ | (23.3 | ) | $ | (11.4 | ) |
(In Millions) | |||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||
Classification | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Long-term debt: | |||||||||||||||||
Senior notes—$700 million | Level 2 | $ | 699.5 | $ | 539.6 | $ | 699.4 | $ | 718.2 | ||||||||
Senior notes—$1.3 billion | Level 2 | 1,289.8 | 974.7 | 1,289.6 | 1,404.9 | ||||||||||||
Senior notes—$400 million | Level 2 | 398.6 | 341.8 | 398.4 | 432.1 | ||||||||||||
Senior notes—$500 million | Level 2 | 497.1 | 433.0 | 496.5 | 523.8 | ||||||||||||
Revolving loan | Level 2 | — | — | — | — | ||||||||||||
Equipment loan facilities | Level 2 | 124.6 | 124.6 | 140.8 | 140.8 | ||||||||||||
Fair value adjustment to interest rate hedge | Level 2 | 2.9 | 2.9 | (2.1 | ) | (2.1 | ) | ||||||||||
Total long-term debt | $ | 3,012.5 | $ | 2,416.6 | $ | 3,022.6 | $ | 3,217.7 |
(In Millions) | ||||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Losses | |||||||||||||||
Assets: | ||||||||||||||||||||
Goodwill impairment - Asia Pacific Iron Ore reporting unit | $ | — | $ | — | $ | — | $ | — | $ | 73.5 | ||||||||||
Other long-lived assets - Property, plant and equipment and Mineral rights: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 343.4 | 343.4 | 291.9 | |||||||||||||||
North American Coal reporting unit | ||||||||||||||||||||
CLCC thermal asset group | — | — | 62.6 | 62.6 | 195.5 | |||||||||||||||
Pinnacle asset group | — | — | 30.7 | 30.7 | 394.5 | |||||||||||||||
Oak Grove asset group | — | — | 58.2 | 58.2 | 237.8 | |||||||||||||||
Eastern Canadian Iron Ore reporting unit | ||||||||||||||||||||
Bloom Lake asset group | — | — | 937.2 | 937.2 | 6,279.2 | |||||||||||||||
Wabush asset group | — | — | 1.0 | 1.0 | 12.8 | |||||||||||||||
Ferroalloys reporting unit | — | — | 12.2 | 12.2 | 259.5 | |||||||||||||||
Other reporting units | — | — | — | — | 3.1 | |||||||||||||||
Other long-lived assets - Intangibles and other long-term assets: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 11.9 | 11.9 | 10.1 | |||||||||||||||
Eastern Canadian Iron Ore reporting unit | ||||||||||||||||||||
Wabush asset group | — | — | — | — | 15.2 | |||||||||||||||
Investment in ventures impairment - Global Exploration | — | — | — | — | 9.2 | |||||||||||||||
$ | — | $ | — | $ | 1,457.2 | $ | 1,457.2 | $ | 7,782.3 |
(In Millions) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Losses | |||||||||||||||
Assets: | ||||||||||||||||||||
Goodwill impairment - Ferroalloys reporting unit | $ | — | $ | — | $ | — | $ | — | $ | 80.9 | ||||||||||
Other long-lived assets - Property, plant and equipment | — | — | 46.3 | 46.3 | 155.4 | |||||||||||||||
Other long-lived assets - Intangibles and long-term deposits | — | — | 1.6 | 1.6 | 14.5 | |||||||||||||||
Investment in ventures impairment - Amapá | — | — | — | — | 67.6 | |||||||||||||||
$ | — | $ | — | $ | 47.9 | $ | 47.9 | $ | 318.4 |
|
($ in Millions) | |||||||||||||||
September 30, 2014 | |||||||||||||||
Debt Instrument | Type | Annual Effective Interest Rate | Final Maturity | Total Face Amount | Total Debt | ||||||||||
$700 Million 4.875% 2021 Senior Notes | Fixed | 4.89% | 2021 | $ | 700.0 | $ | 699.5 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 500.0 | 499.3 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 800.0 | 790.5 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 400.0 | 398.6 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 4.14% | 2018 | 500.0 | 497.1 | (5) | |||||||||
$1.25 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 1.87% | 2017 | 1,250.0 | — | (6) | |||||||||
Equipment Loans | Fixed | Various | 2020 | 164.8 | 146.1 | ||||||||||
Short-Term Borrowing Arrangements | 2014/2015 | 213.2 | 213.2 | ||||||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.9 | ||||||||||||||
Total debt | $ | 4,528.0 | $ | 3,247.2 | |||||||||||
Less: Short-term and current portion of long-term debt | 234.7 | ||||||||||||||
Long-term debt | $ | 3,012.5 |
($ in Millions) | |||||||||||||||
December 31, 2013 | |||||||||||||||
Debt Instrument | Type | Annual Effective Interest Rate | Final Maturity | Total Face Amount | Total Debt | ||||||||||
$700 Million 4.875% 2021 Senior Notes | Fixed | 4.88% | 2021 | 700.0 | 699.4 | (1) | |||||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 500.0 | 499.2 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 800.0 | 790.4 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 400.0 | 398.4 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 4.14% | 2018 | 500.0 | 496.5 | (5) | |||||||||
$1.75 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 1.64% | 2017 | 1,750.0 | — | (6) | |||||||||
Equipment Loans | Fixed | Various | 2020 | 164.8 | 161.7 | ||||||||||
Fair Value Adjustment to Interest Rate Hedge | (2.1 | ) | |||||||||||||
Total debt | $ | 4,814.8 | $ | 3,043.5 | |||||||||||
Less: Short-term and current portion of long-term debt | 20.9 | ||||||||||||||
Long-term debt | $ | 3,022.6 |
(1) | As of September 30, 2014 and December 31, 2013, the $700 million 4.875 percent senior notes were recorded at a par value of $700 million less unamortized discounts of $0.5 million and $0.6 million, respectively, based on an imputed interest rate of 4.89 percent. |
(2) | As of September 30, 2014 and December 31, 2013, the $500 million 4.80 percent senior notes were recorded at a par value of $500 million less unamortized discounts of $0.7 million and $0.8 million, respectively, based on an imputed interest rate of 4.83 percent. |
(3) | As of September 30, 2014 and December 31, 2013, the $800 million 6.25 percent senior notes were recorded at a par value of $800 million less unamortized discounts of $9.5 million and $9.6 million, respectively, based on an imputed interest rate of 6.34 percent. |
(4) | As of September 30, 2014 and December 31, 2013, the $400 million 5.90 percent senior notes were recorded at a par value of $400 million less unamortized discounts of $1.4 million and $1.6 million, respectively, based on an imputed interest rate of 5.98 percent. |
(5) | As of September 30, 2014 and December 31, 2013, the $500 million 3.95 percent senior notes were recorded at a par value of $500 million less unamortized discounts of $2.9 million and $3.5 million, respectively, based on an imputed interest rate of 4.14 percent. |
(6) | As of September 30, 2014 and December 31, 2013, no revolving loans were drawn under the revolving credit agreement. As of September 30, 2014 and December 31, 2013, the principal amount of letter of credit obligations totaled $5.2 million and $8.4 million, respectively, thereby reducing available borrowing capacity to $1.2 billion and $1.7 billion for each period, respectively. |
• | Permitting a one-time exemption of up to $200 million in share repurchases (consummated in a single transaction or series of related transactions), effective until December 31, 2015. |
• | Reducing the size of the existing unsecured facility from $1.75 billion to $1.25 billion. |
• | Adding restrictions on the granting of certain pledges and guarantees. |
• | Adding an obligation to enter into a security agreement, on or before June 30, 2015, to grant security interests to secure obligations under the revolving credit agreement, subject to certain limitations. |
• | Replacing the current maximum leverage covenant ratio of debt to earnings of less than 3.5 times with a maximum balance sheet leverage ratio of debt to capitalization of less than 45 percent. |
• | Resetting the minimum interest coverage ratio from 2.5 to 1.0 to the ratio of 3.5 to 1.0. |
• | Amending the definition of EBITDA to include certain cash charges related to the Company’s Wabush mine and other cash restructuring charges and the definition of net worth to exclude up to $1 billion in non-cash impairment charges. |
• | Modifying the covenants restricting certain investments and acquisitions, the incurrence of certain indebtedness and liens, and the amount of dividends that may be declared or paid and shares that may be repurchased. |
(In Millions) | |||
Maturities of Debt | |||
2014 (October 1 - December 31) | $ | 218.5 | |
2015 | 21.8 | ||
2016 | 22.7 | ||
2017 | 23.6 | ||
2018 | 524.7 | ||
2019 and thereafter | 2,448.0 | ||
Total maturities of debt | $ | 3,259.3 |
|
(In Millions) | |||||||
Capital Leases | Operating Leases | ||||||
2014 (October 1 - December 31) | $ | 16.1 | $ | 4.7 | |||
2015 | 86.6 | 14.0 | |||||
2016 | 35.9 | 9.2 | |||||
2017 | 28.6 | 8.2 | |||||
2018 | 20.9 | 6.9 | |||||
2019 and thereafter | 35.3 | 14.7 | |||||
Total minimum lease payments | $ | 223.4 | $ | 57.7 | |||
Amounts representing interest | 37.0 | ||||||
Present value of net minimum lease payments | $ | 186.4 | (1) |
(1) | The total is comprised of $78.0 million and $108.4 million classified as Other current liabilities and Other liabilities, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at September 30, 2014. |
|
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Environmental | $ | 5.6 | $ | 8.4 | |||
Mine closure | |||||||
LTVSMC | 22.7 | 22.0 | |||||
Operating mines: | |||||||
U.S. Iron Ore | 138.5 | 152.2 | |||||
Eastern Canadian Iron Ore | 81.9 | 78.2 | |||||
Asia Pacific Iron Ore | 25.8 | 25.5 | |||||
North American Coal | 36.2 | 34.7 | |||||
Total mine closure | 305.1 | 312.6 | |||||
Total environmental and mine closure obligations | 310.7 | 321.0 | |||||
Less current portion | 5.3 | 11.3 | |||||
Long term environmental and mine closure obligations | $ | 305.4 | $ | 309.7 |
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 (1) | ||||||
Asset retirement obligation at beginning of period | $ | 290.6 | $ | 231.1 | |||
Accretion expense | 10.9 | 18.1 | |||||
Exchange rate changes | (0.7 | ) | (3.4 | ) | |||
Revision in estimated cash flows | (18.4 | ) | 44.8 | ||||
Asset retirement obligation at end of period | $ | 282.4 | $ | 290.6 |
(1) | Represents a 12-month rollforward of our asset retirement obligation at December 31, 2013. |
|
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Service cost | $ | 7.3 | $ | 9.6 | $ | 23.2 | $ | 29.2 | |||||||
Interest cost | 12.4 | 11.2 | 37.4 | 34.4 | |||||||||||
Expected return on plan assets | (18.1 | ) | (16.2 | ) | (54.1 | ) | (49.3 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.7 | 0.8 | 2.0 | 2.3 | |||||||||||
Net actuarial (gain) loss | 3.3 | 7.5 | 10.5 | 22.5 | |||||||||||
Curtailments/settlements | 1.7 | $ | — | 2.9 | — | ||||||||||
Net periodic benefit cost | $ | 7.3 | $ | 12.9 | $ | 21.9 | $ | 39.1 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Service cost | $ | 2.1 | $ | 3.0 | $ | 6.1 | $ | 9.2 | |||||||
Interest cost | 4.0 | 4.3 | 12.1 | 13.0 | |||||||||||
Expected return on plan assets | (4.2 | ) | (5.0 | ) | (12.8 | ) | (15.0 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | (0.9 | ) | (0.9 | ) | (2.7 | ) | (2.7 | ) | |||||||
Net actuarial loss | 1.2 | 2.9 | 3.5 | 8.7 | |||||||||||
Net periodic benefit cost | $ | 2.2 | $ | 4.3 | $ | 6.2 | $ | 13.2 |
|
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | Fair Value (Percent of Grant Date Market Price) | |||||||||||
February 10, 2014 | $ | 20.58 | 2.89 | 54.0% | 0.54% | 2.92% | $ | 22.21 | 107.92% | |||||||||
May 12, 2014 | $ | 17.54 | 2.61 | 54.0% | 0.54% | 2.92% | $ | 18.93 | 107.92% | |||||||||
July 29, 2014 | $ | 17.62 | 2.42 | 51.3% | 0.83% | 3.40% | $ | 19.02 | 107.92% |
|
|
|
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity | Noncontrolling Interest | Total Equity | |||||||||
December 31, 2013 | $ | 6,069.5 | $ | 814.8 | $ | 6,884.3 | |||||
Comprehensive income | |||||||||||
Net loss | (5,939.0 | ) | (1,004.4 | ) | (6,943.4 | ) | |||||
Other comprehensive income | 11.5 | 1.6 | 13.1 | ||||||||
Total comprehensive income | (5,927.5 | ) | (1,002.8 | ) | (6,930.3 | ) | |||||
Stock and other incentive plans | (3.4 | ) | — | (3.4 | ) | ||||||
Common and preferred share dividends | (107.9 | ) | — | (107.9 | ) | ||||||
Undistributed losses to noncontrolling interest | — | (20.0 | ) | (20.0 | ) | ||||||
September 30, 2014 | $ | 30.7 | $ | (208.0 | ) | $ | (177.3 | ) |
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity | Noncontrolling Interest | Total Equity | |||||||||
December 31, 2012 | $ | 4,632.7 | $ | 1,128.2 | $ | 5,760.9 | |||||
Comprehensive income | |||||||||||
Net income | 370.2 | 5.8 | 376.0 | ||||||||
Other comprehensive income | (122.8 | ) | 3.2 | (119.6 | ) | ||||||
Total comprehensive income | 247.4 | 9.0 | 256.4 | ||||||||
Issuance of common shares | 285.3 | — | 285.3 | ||||||||
Issuance of preferred shares | 709.4 | — | 709.4 | ||||||||
Stock and other incentive plans | 9.6 | — | 9.6 | ||||||||
Common and preferred share dividends | (104.7 | ) | — | (104.7 | ) | ||||||
Capital contribution by noncontrolling interest to subsidiary | — | 17.7 | 17.7 | ||||||||
September 30, 2013 | $ | 5,779.7 | $ | 1,154.9 | $ | 6,934.6 |
(In Millions) | |||||||||||||||||||
Changes in Pension and Other Post-Retirement Benefits, net of tax | Unrealized Net Gain (Loss) on Securities, net of tax | Unrealized Net Gain (Loss) on Foreign Currency Translation | Net Unrealized Gain (Loss) on Derivative Financial Instruments, net of tax | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance December 31, 2013 | $ | (204.9 | ) | $ | 6.2 | $ | 106.7 | $ | (20.9 | ) | $ | (112.9 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (0.4 | ) | 3.8 | 40.5 | (2.3 | ) | 41.6 | ||||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 3.3 | 0.1 | — | 12.8 | 16.2 | ||||||||||||||
Balance March 31, 2014 | $ | (202.0 | ) | $ | 10.1 | $ | 147.2 | $ | (10.4 | ) | $ | (55.1 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (1.4 | ) | (2.4 | ) | 19.7 | 9.7 | 25.6 | ||||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 4.0 | (1.3 | ) | — | 6.6 | 9.3 | |||||||||||||
Balance June 30, 2014 | $ | (199.4 | ) | $ | 6.4 | $ | 166.9 | $ | 5.9 | $ | (20.2 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 3.5 | 1.3 | (65.9 | ) | (20.0 | ) | (81.1 | ) | |||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 7.6 | (7.1 | ) | — | (0.6 | ) | (0.1 | ) | |||||||||||
Balance September 30, 2014 | $ | (188.3 | ) | $ | 0.6 | $ | 101.0 | $ | (14.7 | ) | $ | (101.4 | ) |
(In Millions) | |||||||||||||||||||
Changes in Pension and Other Post-Retirement Benefits, net of tax | Unrealized Net Gain (Loss) on Securities, net of tax | Unrealized Net Gain (Loss) on Foreign Currency Translation | Net Unrealized Gain (Loss) on Derivative Financial Instruments, net of tax | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance December 31, 2012 | $ | (382.7 | ) | $ | 2.1 | $ | 316.3 | $ | 8.7 | $ | (55.6 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (1.1 | ) | 2.5 | 3.3 | (5.0 | ) | (0.3 | ) | |||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 6.4 | 0.1 | — | (2.0 | ) | 4.5 | |||||||||||||
Balance March 31, 2013 | $ | (377.4 | ) | $ | 4.7 | $ | 319.6 | $ | 1.7 | $ | (51.4 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (1.5 | ) | (2.0 | ) | (152.0 | ) | (42.2 | ) | (197.7 | ) | |||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 8.1 | 3.6 | — | (2.2 | ) | 9.5 | |||||||||||||
Balance June 30, 2013 | $ | (370.8 | ) | $ | 6.3 | $ | 167.6 | $ | (42.7 | ) | $ | (239.6 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (0.6 | ) | 3.5 | 22.8 | 12.1 | 37.8 | |||||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 6.3 | 0.9 | — | 16.2 | 23.4 | ||||||||||||||
Balance September 30, 2013 | $ | (365.1 | ) | $ | 10.7 | $ | 190.4 | $ | (14.4 | ) | $ | (178.4 | ) |
(In Millions) | ||||||||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | Amount of (Gain)/Loss Reclassified into Income | Affected Line Item in the Statement of Unaudited Condensed Consolidated Operations | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Amortization of Pension and Postretirement Benefit Liability: | ||||||||||||||||||
Prior service costs | $ | (0.2 | ) | $ | (0.1 | ) | $ | (0.7 | ) | $ | (0.4 | ) | (1) | |||||
Net actuarial loss | 4.5 | 10.4 | 14.0 | 31.2 | (1) | |||||||||||||
Settlements/curtailments | 1.7 | — | 2.9 | — | (1) | |||||||||||||
6.0 | 10.3 | 16.2 | 30.8 | Total before taxes | ||||||||||||||
1.6 | (4.0 | ) | (1.3 | ) | (10.0 | ) | Income tax benefit (expense) | |||||||||||
$ | 7.6 | $ | 6.3 | $ | 14.9 | $ | 20.8 | Net of taxes | ||||||||||
Unrealized gain (loss) on marketable securities: | ||||||||||||||||||
Sale of marketable securities | $ | (9.7 | ) | $ | 0.6 | $ | (11.4 | ) | $ | (0.5 | ) | Other non-operating income (expense) | ||||||
Impairment | (0.3 | ) | — | (0.3 | ) | 5.3 | Other non-operating income (expense) | |||||||||||
(10.0 | ) | 0.6 | (11.7 | ) | 4.8 | Total before taxes | ||||||||||||
2.9 | 0.3 | 3.4 | (0.2 | ) | Income tax benefit (expense) | |||||||||||||
$ | (7.1 | ) | $ | 0.9 | $ | (8.3 | ) | $ | 4.6 | Net of taxes | ||||||||
Unrealized gain (loss) on derivative financial instruments: | ||||||||||||||||||
Australian dollar foreign exchange contracts | $ | (1.6 | ) | $ | 12.7 | $ | 16.7 | $ | 6.4 | Product revenues | ||||||||
Canadian dollar foreign exchange contracts | 1.5 | 11.0 | 11.4 | 11.3 | Cost of goods sold and operating expenses | |||||||||||||
(0.1 | ) | 23.7 | 28.1 | 17.7 | Total before taxes | |||||||||||||
(0.5 | ) | (7.5 | ) | (9.3 | ) | (5.7 | ) | Income tax benefit (expense) | ||||||||||
$ | (0.6 | ) | $ | 16.2 | $ | 18.8 | $ | 12.0 | Net of taxes | |||||||||
Total Reclassifications for the Period | $ | (0.1 | ) | $ | 23.4 | $ | 25.4 | $ | 37.4 |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic benefit cost. See NOTE 11 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS for further information. |
|
Mine | Cliffs Natural Resources | ArcelorMittal | U.S. Steel Corporation | WISCO | ||||||||
Empire | 79.0 | % | 21.0 | % | — | — | ||||||
Tilden | 85.0 | % | — | 15.0 | % | — | ||||||
Hibbing | 23.0 | % | 62.3 | % | 14.7 | % | — | |||||
Bloom Lake | 82.8 | % | — | — | 17.2 | % |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Product revenues from related parties | $ | 390.0 | $ | 455.5 | $ | 929.0 | $ | 1,211.6 | |||||||
Total product revenues | 1,190.8 | 1,454.6 | 3,070.3 | 3,928.8 | |||||||||||
Related party product revenue as a percent of total product revenue | 32.8 | % | 31.3 | % | 30.3 | % | 30.8 | % |
|
(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net Income (Loss) from Continuing Operations Attributable to Cliffs Shareholders | $ | (5,879.6 | ) | $ | 115.2 | $ | (5,939.0 | ) | $ | 368.2 | |||||
Income from Discontinued Operations, net of tax | — | 2.0 | — | 2.0 | |||||||||||
Net Income (Loss) Attributable to Cliffs Shareholders | $ | (5,879.6 | ) | $ | 117.2 | $ | (5,939.0 | ) | $ | 370.2 | |||||
Preferred Stock Dividends | (12.8 | ) | (12.9 | ) | (38.4 | ) | (35.9 | ) | |||||||
Net Income (Loss) Attributable to Cliffs Common Shareholders | $ | (5,892.4 | ) | $ | 104.3 | $ | (5,977.4 | ) | $ | 334.3 | |||||
Weighted Average Number of Shares: | |||||||||||||||
Basic | 153.1 | 153.0 | 153.1 | 151.3 | |||||||||||
Depositary Shares | — | 25.2 | — | 21.1 | |||||||||||
Employee Stock Plans | — | 0.2 | — | 0.2 | |||||||||||
Diluted | 153.1 | 178.4 | 153.1 | 172.6 | |||||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Basic: | |||||||||||||||
Continuing operations | $ | (38.49 | ) | $ | 0.67 | $ | (39.05 | ) | $ | 2.20 | |||||
Discontinued operations | — | 0.01 | — | 0.01 | |||||||||||
$ | (38.49 | ) | $ | 0.68 | $ | (39.05 | ) | $ | 2.21 | ||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Diluted: | |||||||||||||||
Continuing operations | $ | (38.49 | ) | $ | 0.65 | $ | (39.05 | ) | $ | 2.13 | |||||
Discontinued operations | — | 0.01 | — | 0.01 | |||||||||||
$ | (38.49 | ) | $ | 0.66 | $ | (39.05 | ) | $ | 2.14 |
|
|
(In Millions) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Capital additions | $ | 186.0 | $ | 625.1 | |||
Cash paid for capital expenditures | 233.2 | 742.2 | |||||
Difference | $ | (47.2 | ) | $ | (117.1 | ) | |
Non-cash accruals | $ | (57.1 | ) | $ | (117.1 | ) | |
Capital leases | 9.9 | — | |||||
Total | $ | (47.2 | ) | $ | (117.1 | ) |
|
• | Reduces the size of the existing facility from $1.250 billion to $1.125 billion. |
• | Grants a valid and perfected first-priority (subject to certain permitted liens) security interest in certain property and assets of the Company and certain of its subsidiaries, subject to customary exclusions all specified in a security agreement. |
• | With effect as of September 30, 2014, removes the maximum balance sheet leverage ratio of debt to capitalization of less than 45 percent, which was a covenant introduced in June 2014, and replaces that covenant with a maximum leverage ratio covenant of secured debt to EBITDA that is not to exceed 3.5 times. |
• | Retains the minimum interest coverage ratio requirement of 3.5 times, and subsequently reduces the minimum interest coverage ratio to 2.0 times upon completion of certain collateral actions within 60 days of the execution of the amendment. |
• | Subjects restricted payments (including the $200 million share repurchase, which was approved in September 2014) and current dividend structure to a $400 million liquidity test. |
• | Adds limitations regarding acquisitions, investments (including investments in non-wholly owned subsidiaries and joint ventures) and subsidiary debt. |
• | Eliminates the accounts receivable securitization facility. |
• | Terminates the ability to have foreign borrowers under the revolving credit agreement. |
|
Name | Location | Ownership Interest | Operation | |||
Northshore | Minnesota | 100.0% | Iron Ore | |||
United Taconite | Minnesota | 100.0% | Iron Ore | |||
Wabush | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | |||
Bloom Lake | Quebec, Canada | 82.8% | Iron Ore | |||
Tilden | Michigan | 85.0% | Iron Ore | |||
Empire | Michigan | 79.0% | Iron Ore | |||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | |||
Pinnacle | West Virginia | 100.0% | Coal | |||
Oak Grove | Alabama | 100.0% | Coal | |||
CLCC | West Virginia | 100.0% | Coal |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2014 | December 31, 2013 | |||||||||
Hibbing | Other non-current assets1 | Equity Method | 23% | $ | 8.1 | $ | (3.9 | ) | ||||||
Other | Other non-current assets | Equity Method | Various | 24.4 | 34.7 | |||||||||
$ | 32.5 | $ | 30.8 |
|
Name | Location | Ownership Interest | Operation | |||
Northshore | Minnesota | 100.0% | Iron Ore | |||
United Taconite | Minnesota | 100.0% | Iron Ore | |||
Wabush | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | |||
Bloom Lake | Quebec, Canada | 82.8% | Iron Ore | |||
Tilden | Michigan | 85.0% | Iron Ore | |||
Empire | Michigan | 79.0% | Iron Ore | |||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | |||
Pinnacle | West Virginia | 100.0% | Coal | |||
Oak Grove | Alabama | 100.0% | Coal | |||
CLCC | West Virginia | 100.0% | Coal |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2014 | December 31, 2013 | |||||||||
Hibbing | Other non-current assets1 | Equity Method | 23% | $ | 8.1 | $ | (3.9 | ) | ||||||
Other | Other non-current assets | Equity Method | Various | 24.4 | 34.7 | |||||||||
$ | 32.5 | $ | 30.8 |
|
(In Millions) | |||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Revenues from product sales and services: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 767.4 | 59 | % | $ | 782.4 | 51 | % | $ | 1,643.3 | 49 | % | $ | 1,894.2 | 45 | % | |||||||||||
Eastern Canadian Iron Ore | 148.0 | 11 | % | 284.2 | 18 | % | 480.3 | 15 | % | 743.4 | 18 | % | |||||||||||||||
Asia Pacific Iron Ore | 212.3 | 17 | % | 301.7 | 20 | % | 699.6 | 21 | % | 899.5 | 22 | % | |||||||||||||||
North American Coal | 170.5 | 13 | % | 178.3 | 11 | % | 515.8 | 15 | % | 638.5 | 15 | % | |||||||||||||||
Total revenues from product sales and services | $ | 1,298.2 | 100 | % | $ | 1,546.6 | 100 | % | $ | 3,339.0 | 100 | % | $ | 4,175.6 | 100 | % | |||||||||||
Sales margin: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 219.5 | $ | 273.5 | $ | 461.7 | $ | 647.1 | |||||||||||||||||||
Eastern Canadian Iron Ore | (76.8 | ) | (22.0 | ) | (165.0 | ) | (52.3 | ) | |||||||||||||||||||
Asia Pacific Iron Ore | 9.1 | 99.0 | 111.4 | 255.3 | |||||||||||||||||||||||
North American Coal | (24.3 | ) | (1.8 | ) | (125.4 | ) | 6.6 | ||||||||||||||||||||
Other | — | — | — | (1.9 | ) | ||||||||||||||||||||||
Sales margin | 127.5 | 348.7 | 282.7 | 854.8 | |||||||||||||||||||||||
Other operating expense | (7,886.6 | ) | (124.7 | ) | (8,104.2 | ) | (200.5 | ) | |||||||||||||||||||
Other expense | (40.3 | ) | (45.9 | ) | (124.4 | ) | (137.4 | ) | |||||||||||||||||||
Income (loss) from continuing operations before income taxes and equity loss from ventures | $ | (7,799.4 | ) | $ | 178.1 | $ | (7,945.9 | ) | $ | 516.9 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Net Income (Loss) | $ | (6,887.2 | ) | $ | 113.9 | $ | (6,943.4 | ) | $ | 376.0 | |||||||||||||
Less: | |||||||||||||||||||||||
Interest expense, net | (47.4 | ) | (44.7 | ) | (134.9 | ) | (134.5 | ) | |||||||||||||||
Income tax benefit (expense) | 921.4 | (65.7 | ) | 1,012.3 | (69.0 | ) | |||||||||||||||||
Depreciation, depletion and amortization | (144.0 | ) | (153.1 | ) | (430.4 | ) | (438.0 | ) | |||||||||||||||
EBITDA | $ | (7,617.2 | ) | $ | 377.4 | $ | (7,390.4 | ) | $ | 1,017.5 | |||||||||||||
Less: | |||||||||||||||||||||||
Impairment of goodwill and other long-lived assets | $ | (7,769.1 | ) | $ | — | $ | (7,773.1 | ) | $ | — | |||||||||||||
Wabush related costs | (64.0 | ) | (13.0 | ) | (122.3 | ) | (2.3 | ) | |||||||||||||||
Wabush sales margin | (20.0 | ) | (1.3 | ) | (47.5 | ) | (44.2 | ) | |||||||||||||||
Foreign exchange remeasurement | 26.4 | (14.1 | ) | 8.4 | 36.5 | ||||||||||||||||||
Proxy contest and change in control costs in SG&A | (21.9 | ) | — | (26.2 | ) | — | |||||||||||||||||
Litigation judgment | — | (9.6 | ) | — | (9.6 | ) | |||||||||||||||||
Severance in SG&A | (1.9 | ) | (8.1 | ) | (12.6 | ) | (8.1 | ) | |||||||||||||||
Adjusted EBITDA | $ | 233.3 | $ | 423.5 | $ | 582.9 | $ | 1,045.2 | |||||||||||||||
EBITDA: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 242.1 | $ | 296.9 | $ | 538.4 | $ | 715.9 | |||||||||||||||
Eastern Canadian Iron Ore | (6,423.2 | ) | (43.8 | ) | (6,537.6 | ) | (9.6 | ) | |||||||||||||||
Asia Pacific Iron Ore | (330.9 | ) | 138.1 | (148.7 | ) | 367.6 | |||||||||||||||||
North American Coal | (827.5 | ) | 31.0 | (875.6 | ) | 85.4 | |||||||||||||||||
Other | (277.7 | ) | (44.8 | ) | (366.9 | ) | (141.8 | ) | |||||||||||||||
Total EBITDA | $ | (7,617.2 | ) | $ | 377.4 | $ | (7,390.4 | ) | $ | 1,017.5 | |||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 248.7 | $ | 305.0 | $ | 556.1 | $ | 738.0 | |||||||||||||||
Eastern Canadian Iron Ore | (33.2 | ) | (8.6 | ) | (49.3 | ) | 50.0 | ||||||||||||||||
Asia Pacific Iron Ore | 46.1 | 140.9 | 234.5 | 375.5 | |||||||||||||||||||
North American Coal | 6.1 | 37.4 | (32.2 | ) | 103.2 | ||||||||||||||||||
Other | (34.4 | ) | (51.2 | ) | (126.2 | ) | (221.5 | ) | |||||||||||||||
Total Adjusted EBITDA | $ | 233.3 | $ | 423.5 | $ | 582.9 | $ | 1,045.2 |
(In Millions) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Depreciation, depletion and amortization: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 25.9 | $ | 27.3 | $ | 81.2 | $ | 82.3 | |||||||||||||||
Eastern Canadian Iron Ore | 43.6 | 46.8 | 127.2 | 130.3 | |||||||||||||||||||
Asia Pacific Iron Ore | 42.2 | 38.0 | 123.6 | 116.1 | |||||||||||||||||||
North American Coal | 30.3 | 38.8 | 92.2 | 99.7 | |||||||||||||||||||
Other | 2.0 | 2.2 | 6.2 | 9.6 | |||||||||||||||||||
Total depreciation, depletion and amortization | $ | 144.0 | $ | 153.1 | $ | 430.4 | $ | 438.0 | |||||||||||||||
Capital additions1: | |||||||||||||||||||||||
U.S. Iron Ore | $ | 8.5 | $ | 15.2 | $ | 37.4 | $ | 39.1 | |||||||||||||||
Eastern Canadian Iron Ore | 37.9 | 181.5 | 112.2 | 535.3 | |||||||||||||||||||
Asia Pacific Iron Ore | 3.1 | 10.4 | 8.3 | 8.6 | |||||||||||||||||||
North American Coal | 4.6 | 2.0 | 24.8 | 37.2 | |||||||||||||||||||
Other | 0.5 | 2.2 | 3.3 | 4.9 | |||||||||||||||||||
Total capital additions | $ | 54.6 | $ | 211.3 | $ | 186.0 | $ | 625.1 |
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Assets: | |||||||
U.S. Iron Ore | $ | 1,715.8 | $ | 1,671.6 | |||
Eastern Canadian Iron Ore | 1,113.2 | 7,915.5 | |||||
Asia Pacific Iron Ore | 577.2 | 1,078.4 | |||||
North American Coal | 904.0 | 1,841.8 | |||||
Other | 217.0 | 455.6 | |||||
Total segment assets | 4,527.2 | 12,962.9 | |||||
Corporate | 284.0 | 159.0 | |||||
Total assets | $ | 4,811.2 | $ | 13,121.9 |
|
(In Millions) | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | September 30, 2014 | December 31, 2013 | ||||||||||||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Derivatives designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Interest Rate Swaps | $ | — | $ | — | $ | — | Other current liabilities | $ | 2.1 | ||||||||||||||
Foreign Exchange Contracts | — | Other current assets | 0.3 | Other current liabilities | 17.4 | Other current liabilities | 25.8 | ||||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | 0.3 | $ | 17.4 | $ | 27.9 | |||||||||||||||
Derivatives not designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 1.1 | ||||||||||||||
Customer Supply Agreement | Other current assets | 54.5 | Other current assets | 55.8 | — | — | |||||||||||||||||
Provisional Pricing Arrangements | — | Other current assets | 3.1 | Other current liabilities | 23.3 | Other current liabilities | 10.3 | ||||||||||||||||
Total derivatives not designated as hedging instruments under ASC 815 | $ | 54.5 | $ | 58.9 | $ | 23.3 | $ | 11.4 | |||||||||||||||
Total derivatives | $ | 54.5 | $ | 59.2 | $ | 40.7 | $ | 39.3 |
(In Millions) | |||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) Recognized in OCI on Derivatives | Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings | Amount of Gain (Loss) Reclassified from Accumulated OCI into Earnings | ||||||||||||||
(Effective Portion) | (Effective Portion) | (Effective Portion) | |||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (12.6 | ) | $ | 2.9 | Product revenues | $ | 1.6 | $ | (8.9 | ) | ||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | (7.4 | ) | 9.2 | Cost of goods sold and operating expenses | (1.0 | ) | (7.3 | ) | |||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | — | — | ||||||||||||
Total | $ | (20.0 | ) | $ | 12.1 | $ | 0.6 | $ | (16.2 | ) | |||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (3.4 | ) | $ | (25.2 | ) | Product revenues | $ | (11.2 | ) | $ | (4.5 | ) | ||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | (9.2 | ) | (9.9 | ) | Cost of goods sold and operating expenses | (7.1 | ) | (7.5 | ) | ||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | (0.5 | ) | — | |||||||||||
$ | (12.6 | ) | $ | (35.1 | ) | $ | (18.8 | ) | $ | (12.0 | ) |
(In Millions) | ||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivative | Amount of Gain (Loss) Recognized in Income on Derivative | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Foreign Exchange Contracts | Cost of goods sold and operating expenses | $ | — | $ | — | $ | (3.3 | ) | $ | — | ||||||
Commodity Contracts | Other non-operating income (expense) | — | (2.7 | ) | — | (2.7 | ) | |||||||||
Customer Supply Agreement | Product revenues | 62.6 | 53.9 | 124.6 | 113.4 | |||||||||||
Provisional Pricing Arrangements | Product revenues | (3.1 | ) | 24.3 | (23.3 | ) | (6.8 | ) | ||||||||
$ | 59.5 | $ | 75.5 | $ | 98.0 | $ | 103.9 |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Segment | Finished Goods | Work-in Process | Total Inventory | Finished Goods | Work-in Process | Total Inventory | |||||||||||||||||
U.S. Iron Ore | $ | 279.5 | $ | 23.5 | $ | 303.0 | $ | 92.1 | $ | 13.0 | $ | 105.1 | |||||||||||
Eastern Canadian Iron Ore | 18.2 | 15.8 | 34.0 | 65.3 | 48.1 | 113.4 | |||||||||||||||||
Asia Pacific Iron Ore | 25.8 | 85.1 | 110.9 | 39.7 | 50.6 | 90.3 | |||||||||||||||||
North American Coal | 52.7 | 16.1 | 68.8 | 59.4 | 23.2 | 82.6 | |||||||||||||||||
Total | $ | 376.2 | $ | 140.5 | $ | 516.7 | $ | 256.5 | $ | 134.9 | $ | 391.4 |
|
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Land rights and mineral rights | $ | 1,947.6 | $ | 7,819.6 | |||
Office and information technology | 80.7 | 125.7 | |||||
Buildings | 88.9 | 255.2 | |||||
Mining equipment | 1,399.5 | 1,819.3 | |||||
Processing equipment | 361.9 | 2,148.6 | |||||
Electric power facilities | 57.4 | 114.3 | |||||
Port facilities | 27.6 | 99.4 | |||||
Interest capitalized during construction | 18.8 | 23.8 | |||||
Land improvements | 32.5 | 69.3 | |||||
Other | 65.5 | 104.4 | |||||
Construction in-progress | 94.1 | 991.3 | |||||
4,174.5 | 13,570.9 | ||||||
Accumulated depreciation and depletion | (966.6 | ) | (2,417.5 | ) | |||
$ | 3,207.9 | $ | 11,153.4 |
|
(In Millions) | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||
U.S. Iron Ore | Eastern Canadian Iron Ore | Asia Pacific Iron Ore | North American Coal | Other | Total | U.S. Iron Ore | Eastern Canadian Iron Ore | Asia Pacific Iron Ore | North American Coal | Other | Total | ||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 2.0 | $ | — | $ | 72.5 | $ | — | $ | — | $ | 74.5 | $ | 2.0 | $ | — | $ | 84.5 | $ | — | $ | 80.9 | $ | 167.4 | |||||||||||||||||||||||
Arising in business combinations | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Impairment | — | — | (73.5 | ) | — | — | (73.5 | ) | — | — | — | — | (80.9 | ) | (80.9 | ) | |||||||||||||||||||||||||||||||
Impact of foreign currency translation | — | — | 1.0 | — | — | 1.0 | — | — | (12.0 | ) | — | — | (12.0 | ) | |||||||||||||||||||||||||||||||||
Ending Balance | $ | 2.0 | $ | — | $ | — | $ | — | $ | — | $ | 2.0 | $ | 2.0 | $ | — | $ | 72.5 | $ | — | $ | — | $ | 74.5 | |||||||||||||||||||||||
Accumulated goodwill impairment loss | $ | — | $ | (1,000.0 | ) | (73.5 | ) | $ | (27.8 | ) | $ | (80.9 | ) | $ | (1,182.2 | ) | $ | — | $ | (1,000.0 | ) | $ | — | $ | (27.8 | ) | $ | (80.9 | ) | $ | (1,108.7 | ) |
(In Millions) | |||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Classification | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Definite-lived intangible assets: | |||||||||||||||||||||||||
Permits | Other non-current assets | $ | 91.6 | $ | (16.8 | ) | $ | 74.8 | $ | 127.4 | $ | (35.9 | ) | $ | 91.5 | ||||||||||
Utility contracts | Other non-current assets | 54.3 | (53.9 | ) | 0.4 | 54.7 | (53.1 | ) | 1.6 | ||||||||||||||||
Leases | Other non-current assets | 2.4 | (0.2 | ) | 2.2 | 2.4 | (0.1 | ) | 2.3 | ||||||||||||||||
Total intangible assets | $ | 148.3 | $ | (70.9 | ) | $ | 77.4 | $ | 184.5 | $ | (89.1 | ) | $ | 95.4 | |||||||||||
Below-market sales contracts | Other current liabilities | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | ||||||||
Below-market sales contracts | Other liabilities | (205.9 | ) | 175.0 | (30.9 | ) | (205.9 | ) | 159.7 | (46.2 | ) | ||||||||||||||
Total below-market sales contracts | $ | (228.9 | ) | $ | 175.0 | $ | (53.9 | ) | $ | (228.9 | ) | $ | 159.7 | $ | (69.2 | ) |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2014 (remaining three months) | $ | 1.4 | |
2015 | 5.6 | ||
2016 | 5.3 | ||
2017 | 5.1 | ||
2018 | 5.3 | ||
2019 | 5.3 | ||
Total | $ | 28.0 |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2014 (remaining three months) | $ | 7.8 | |
2015 | 23.0 | ||
2016 | 23.1 | ||
Total | $ | 53.9 |
|
(In Millions) | |||||||||||||||
September 30, 2014 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 120.0 | $ | — | $ | — | $ | 120.0 | |||||||
Derivative assets | — | — | 54.5 | 54.5 | |||||||||||
Available-for-sale marketable securities | 6.1 | — | — | 6.1 | |||||||||||
Foreign exchange contracts | — | — | — | — | |||||||||||
Total | $ | 126.1 | $ | — | $ | 54.5 | $ | 180.6 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 23.3 | $ | 23.3 | |||||||
Foreign exchange contracts | — | 17.4 | — | 17.4 | |||||||||||
Total | $ | — | $ | 17.4 | $ | 23.3 | $ | 40.7 |
(In Millions) | |||||||||||||||
December 31, 2013 | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 85.0 | $ | — | $ | — | $ | 85.0 | |||||||
Derivative assets | — | — | 58.9 | 58.9 | |||||||||||
Available-for-sale marketable securities | 21.4 | — | — | 21.4 | |||||||||||
Foreign exchange contracts | — | 0.3 | — | 0.3 | |||||||||||
Total | $ | 106.4 | $ | 0.3 | $ | 58.9 | $ | 165.6 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | 2.1 | $ | 10.3 | $ | 12.4 | |||||||
Foreign exchange contracts | — | 26.9 | — | 26.9 | |||||||||||
Total | $ | — | $ | 29.0 | $ | 10.3 | $ | 39.3 |
Qualitative/Quantitative Information About Level 3 Fair Value Measurements | ||||||||||||
($ in millions) Fair Value at September 30, 2014 | Balance Sheet Location | Valuation Technique | Unobservable Input | Range or Point Estimate (Weighted Average) | ||||||||
Provisional Pricing Arrangements | $ | 23.3 | Derivative liabilities | Market Approach | Management's Estimate of 62% Fe | $78 | ||||||
Customer Supply Agreement | $ | 54.5 | Derivative assets | Market Approach | Hot-Rolled Steel Estimate | $635 - $665 ($650) |
(In Millions) | |||||||||||||||
Derivative Assets (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Beginning balance | $ | 33.0 | $ | 45.1 | $ | 58.9 | $ | 62.4 | |||||||
Total gains | |||||||||||||||
Included in earnings | 62.6 | 57.6 | 124.6 | 118.0 | |||||||||||
Settlements | (41.1 | ) | (36.0 | ) | (129.0 | ) | (113.7 | ) | |||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | 54.5 | $ | 66.7 | $ | 54.5 | $ | 66.7 | |||||||
Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date | $ | 62.6 | $ | 57.6 | $ | 124.6 | $ | 118.0 |
(In Millions) | |||||||||||||||
Derivative Liabilities (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Beginning balance | $ | (20.2 | ) | $ | (32.0 | ) | $ | (10.3 | ) | $ | (11.3 | ) | |||
Total gains | |||||||||||||||
Included in earnings | (3.1 | ) | 20.6 | (23.3 | ) | (11.4 | ) | ||||||||
Settlements | — | — | 10.3 | 11.3 | |||||||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | (23.3 | ) | $ | (11.4 | ) | $ | (23.3 | ) | $ | (11.4 | ) | |||
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date | $ | (3.1 | ) | $ | 20.6 | $ | (23.3 | ) | $ | (11.4 | ) |
(In Millions) | |||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||
Classification | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Long-term debt: | |||||||||||||||||
Senior notes—$700 million | Level 2 | $ | 699.5 | $ | 539.6 | $ | 699.4 | $ | 718.2 | ||||||||
Senior notes—$1.3 billion | Level 2 | 1,289.8 | 974.7 | 1,289.6 | 1,404.9 | ||||||||||||
Senior notes—$400 million | Level 2 | 398.6 | 341.8 | 398.4 | 432.1 | ||||||||||||
Senior notes—$500 million | Level 2 | 497.1 | 433.0 | 496.5 | 523.8 | ||||||||||||
Revolving loan | Level 2 | — | — | — | — | ||||||||||||
Equipment loan facilities | Level 2 | 124.6 | 124.6 | 140.8 | 140.8 | ||||||||||||
Fair value adjustment to interest rate hedge | Level 2 | 2.9 | 2.9 | (2.1 | ) | (2.1 | ) | ||||||||||
Total long-term debt | $ | 3,012.5 | $ | 2,416.6 | $ | 3,022.6 | $ | 3,217.7 |
(In Millions) | ||||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Losses | |||||||||||||||
Assets: | ||||||||||||||||||||
Goodwill impairment - Asia Pacific Iron Ore reporting unit | $ | — | $ | — | $ | — | $ | — | $ | 73.5 | ||||||||||
Other long-lived assets - Property, plant and equipment and Mineral rights: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 343.4 | 343.4 | 291.9 | |||||||||||||||
North American Coal reporting unit | ||||||||||||||||||||
CLCC thermal asset group | — | — | 62.6 | 62.6 | 195.5 | |||||||||||||||
Pinnacle asset group | — | — | 30.7 | 30.7 | 394.5 | |||||||||||||||
Oak Grove asset group | — | — | 58.2 | 58.2 | 237.8 | |||||||||||||||
Eastern Canadian Iron Ore reporting unit | ||||||||||||||||||||
Bloom Lake asset group | — | — | 937.2 | 937.2 | 6,279.2 | |||||||||||||||
Wabush asset group | — | — | 1.0 | 1.0 | 12.8 | |||||||||||||||
Ferroalloys reporting unit | — | — | 12.2 | 12.2 | 259.5 | |||||||||||||||
Other reporting units | — | — | — | — | 3.1 | |||||||||||||||
Other long-lived assets - Intangibles and other long-term assets: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 11.9 | 11.9 | 10.1 | |||||||||||||||
Eastern Canadian Iron Ore reporting unit | ||||||||||||||||||||
Wabush asset group | — | — | — | — | 15.2 | |||||||||||||||
Investment in ventures impairment - Global Exploration | — | — | — | — | 9.2 | |||||||||||||||
$ | — | $ | — | $ | 1,457.2 | $ | 1,457.2 | $ | 7,782.3 |
(In Millions) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Losses | |||||||||||||||
Assets: | ||||||||||||||||||||
Goodwill impairment - Ferroalloys reporting unit | $ | — | $ | — | $ | — | $ | — | $ | 80.9 | ||||||||||
Other long-lived assets - Property, plant and equipment | — | — | 46.3 | 46.3 | 155.4 | |||||||||||||||
Other long-lived assets - Intangibles and long-term deposits | — | — | 1.6 | 1.6 | 14.5 | |||||||||||||||
Investment in ventures impairment - Amapá | — | — | — | — | 67.6 | |||||||||||||||
$ | — | $ | — | $ | 47.9 | $ | 47.9 | $ | 318.4 |
|
($ in Millions) | |||||||||||||||
September 30, 2014 | |||||||||||||||
Debt Instrument | Type | Annual Effective Interest Rate | Final Maturity | Total Face Amount | Total Debt | ||||||||||
$700 Million 4.875% 2021 Senior Notes | Fixed | 4.89% | 2021 | $ | 700.0 | $ | 699.5 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 500.0 | 499.3 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 800.0 | 790.5 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 400.0 | 398.6 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 4.14% | 2018 | 500.0 | 497.1 | (5) | |||||||||
$1.25 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 1.87% | 2017 | 1,250.0 | — | (6) | |||||||||
Equipment Loans | Fixed | Various | 2020 | 164.8 | 146.1 | ||||||||||
Short-Term Borrowing Arrangements | 2014/2015 | 213.2 | 213.2 | ||||||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.9 | ||||||||||||||
Total debt | $ | 4,528.0 | $ | 3,247.2 | |||||||||||
Less: Short-term and current portion of long-term debt | 234.7 | ||||||||||||||
Long-term debt | $ | 3,012.5 |
($ in Millions) | |||||||||||||||
December 31, 2013 | |||||||||||||||
Debt Instrument | Type | Annual Effective Interest Rate | Final Maturity | Total Face Amount | Total Debt | ||||||||||
$700 Million 4.875% 2021 Senior Notes | Fixed | 4.88% | 2021 | 700.0 | 699.4 | (1) | |||||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 500.0 | 499.2 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 800.0 | 790.4 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 400.0 | 398.4 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 4.14% | 2018 | 500.0 | 496.5 | (5) | |||||||||
$1.75 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 1.64% | 2017 | 1,750.0 | — | (6) | |||||||||
Equipment Loans | Fixed | Various | 2020 | 164.8 | 161.7 | ||||||||||
Fair Value Adjustment to Interest Rate Hedge | (2.1 | ) | |||||||||||||
Total debt | $ | 4,814.8 | $ | 3,043.5 | |||||||||||
Less: Short-term and current portion of long-term debt | 20.9 | ||||||||||||||
Long-term debt | $ | 3,022.6 |
(1) | As of September 30, 2014 and December 31, 2013, the $700 million 4.875 percent senior notes were recorded at a par value of $700 million less unamortized discounts of $0.5 million and $0.6 million, respectively, based on an imputed interest rate of 4.89 percent. |
(2) | As of September 30, 2014 and December 31, 2013, the $500 million 4.80 percent senior notes were recorded at a par value of $500 million less unamortized discounts of $0.7 million and $0.8 million, respectively, based on an imputed interest rate of 4.83 percent. |
(3) | As of September 30, 2014 and December 31, 2013, the $800 million 6.25 percent senior notes were recorded at a par value of $800 million less unamortized discounts of $9.5 million and $9.6 million, respectively, based on an imputed interest rate of 6.34 percent. |
(4) | As of September 30, 2014 and December 31, 2013, the $400 million 5.90 percent senior notes were recorded at a par value of $400 million less unamortized discounts of $1.4 million and $1.6 million, respectively, based on an imputed interest rate of 5.98 percent. |
(5) | As of September 30, 2014 and December 31, 2013, the $500 million 3.95 percent senior notes were recorded at a par value of $500 million less unamortized discounts of $2.9 million and $3.5 million, respectively, based on an imputed interest rate of 4.14 percent. |
(6) | As of September 30, 2014 and December 31, 2013, no revolving loans were drawn under the revolving credit agreement. As of September 30, 2014 and December 31, 2013, the principal amount of letter of credit obligations totaled $5.2 million and $8.4 million, respectively, thereby reducing available borrowing capacity to $1.2 billion and $1.7 billion for each period, respectively. |
(In Millions) | |||
Maturities of Debt | |||
2014 (October 1 - December 31) | $ | 218.5 | |
2015 | 21.8 | ||
2016 | 22.7 | ||
2017 | 23.6 | ||
2018 | 524.7 | ||
2019 and thereafter | 2,448.0 | ||
Total maturities of debt | $ | 3,259.3 |
|
(In Millions) | |||||||
Capital Leases | Operating Leases | ||||||
2014 (October 1 - December 31) | $ | 16.1 | $ | 4.7 | |||
2015 | 86.6 | 14.0 | |||||
2016 | 35.9 | 9.2 | |||||
2017 | 28.6 | 8.2 | |||||
2018 | 20.9 | 6.9 | |||||
2019 and thereafter | 35.3 | 14.7 | |||||
Total minimum lease payments | $ | 223.4 | $ | 57.7 | |||
Amounts representing interest | 37.0 | ||||||
Present value of net minimum lease payments | $ | 186.4 | (1) |
(1) | The total is comprised of $78.0 million and $108.4 million classified as Other current liabilities and Other liabilities, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at September 30, 2014. |
|
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 | ||||||
Environmental | $ | 5.6 | $ | 8.4 | |||
Mine closure | |||||||
LTVSMC | 22.7 | 22.0 | |||||
Operating mines: | |||||||
U.S. Iron Ore | 138.5 | 152.2 | |||||
Eastern Canadian Iron Ore | 81.9 | 78.2 | |||||
Asia Pacific Iron Ore | 25.8 | 25.5 | |||||
North American Coal | 36.2 | 34.7 | |||||
Total mine closure | 305.1 | 312.6 | |||||
Total environmental and mine closure obligations | 310.7 | 321.0 | |||||
Less current portion | 5.3 | 11.3 | |||||
Long term environmental and mine closure obligations | $ | 305.4 | $ | 309.7 |
(In Millions) | |||||||
September 30, 2014 | December 31, 2013 (1) | ||||||
Asset retirement obligation at beginning of period | $ | 290.6 | $ | 231.1 | |||
Accretion expense | 10.9 | 18.1 | |||||
Exchange rate changes | (0.7 | ) | (3.4 | ) | |||
Revision in estimated cash flows | (18.4 | ) | 44.8 | ||||
Asset retirement obligation at end of period | $ | 282.4 | $ | 290.6 |
(1) | Represents a 12-month rollforward of our asset retirement obligation at December 31, 2013. |
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(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Service cost | $ | 7.3 | $ | 9.6 | $ | 23.2 | $ | 29.2 | |||||||
Interest cost | 12.4 | 11.2 | 37.4 | 34.4 | |||||||||||
Expected return on plan assets | (18.1 | ) | (16.2 | ) | (54.1 | ) | (49.3 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.7 | 0.8 | 2.0 | 2.3 | |||||||||||
Net actuarial (gain) loss | 3.3 | 7.5 | 10.5 | 22.5 | |||||||||||
Curtailments/settlements | 1.7 | $ | — | 2.9 | — | ||||||||||
Net periodic benefit cost | $ | 7.3 | $ | 12.9 | $ | 21.9 | $ | 39.1 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Service cost | $ | 2.1 | $ | 3.0 | $ | 6.1 | $ | 9.2 | |||||||
Interest cost | 4.0 | 4.3 | 12.1 | 13.0 | |||||||||||
Expected return on plan assets | (4.2 | ) | (5.0 | ) | (12.8 | ) | (15.0 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | (0.9 | ) | (0.9 | ) | (2.7 | ) | (2.7 | ) | |||||||
Net actuarial loss | 1.2 | 2.9 | 3.5 | 8.7 | |||||||||||
Net periodic benefit cost | $ | 2.2 | $ | 4.3 | $ | 6.2 | $ | 13.2 |
|
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | Fair Value (Percent of Grant Date Market Price) | |||||||||||
February 10, 2014 | $ | 20.58 | 2.89 | 54.0% | 0.54% | 2.92% | $ | 22.21 | 107.92% | |||||||||
May 12, 2014 | $ | 17.54 | 2.61 | 54.0% | 0.54% | 2.92% | $ | 18.93 | 107.92% | |||||||||
July 29, 2014 | $ | 17.62 | 2.42 | 51.3% | 0.83% | 3.40% | $ | 19.02 | 107.92% |
|
Mine | Cliffs Natural Resources | ArcelorMittal | U.S. Steel Corporation | WISCO | ||||||||
Empire | 79.0 | % | 21.0 | % | — | — | ||||||
Tilden | 85.0 | % | — | 15.0 | % | — | ||||||
Hibbing | 23.0 | % | 62.3 | % | 14.7 | % | — | |||||
Bloom Lake | 82.8 | % | — | — | 17.2 | % |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Product revenues from related parties | $ | 390.0 | $ | 455.5 | $ | 929.0 | $ | 1,211.6 | |||||||
Total product revenues | 1,190.8 | 1,454.6 | 3,070.3 | 3,928.8 | |||||||||||
Related party product revenue as a percent of total product revenue | 32.8 | % | 31.3 | % | 30.3 | % | 30.8 | % |
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(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net Income (Loss) from Continuing Operations Attributable to Cliffs Shareholders | $ | (5,879.6 | ) | $ | 115.2 | $ | (5,939.0 | ) | $ | 368.2 | |||||
Income from Discontinued Operations, net of tax | — | 2.0 | — | 2.0 | |||||||||||
Net Income (Loss) Attributable to Cliffs Shareholders | $ | (5,879.6 | ) | $ | 117.2 | $ | (5,939.0 | ) | $ | 370.2 | |||||
Preferred Stock Dividends | (12.8 | ) | (12.9 | ) | (38.4 | ) | (35.9 | ) | |||||||
Net Income (Loss) Attributable to Cliffs Common Shareholders | $ | (5,892.4 | ) | $ | 104.3 | $ | (5,977.4 | ) | $ | 334.3 | |||||
Weighted Average Number of Shares: | |||||||||||||||
Basic | 153.1 | 153.0 | 153.1 | 151.3 | |||||||||||
Depositary Shares | — | 25.2 | — | 21.1 | |||||||||||
Employee Stock Plans | — | 0.2 | — | 0.2 | |||||||||||
Diluted | 153.1 | 178.4 | 153.1 | 172.6 | |||||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Basic: | |||||||||||||||
Continuing operations | $ | (38.49 | ) | $ | 0.67 | $ | (39.05 | ) | $ | 2.20 | |||||
Discontinued operations | — | 0.01 | — | 0.01 | |||||||||||
$ | (38.49 | ) | $ | 0.68 | $ | (39.05 | ) | $ | 2.21 | ||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Diluted: | |||||||||||||||
Continuing operations | $ | (38.49 | ) | $ | 0.65 | $ | (39.05 | ) | $ | 2.13 | |||||
Discontinued operations | — | 0.01 | — | 0.01 | |||||||||||
$ | (38.49 | ) | $ | 0.66 | $ | (39.05 | ) | $ | 2.14 |
|
(In Millions) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
Capital additions | $ | 186.0 | $ | 625.1 | |||
Cash paid for capital expenditures | 233.2 | 742.2 | |||||
Difference | $ | (47.2 | ) | $ | (117.1 | ) | |
Non-cash accruals | $ | (57.1 | ) | $ | (117.1 | ) | |
Capital leases | 9.9 | — | |||||
Total | $ | (47.2 | ) | $ | (117.1 | ) |
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