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Name | Location | Ownership Interest | Operation | Status of Operations | ||||
Northshore | Minnesota | 100.0% | Iron Ore | Active | ||||
United Taconite | Minnesota | 100.0% | Iron Ore | Active | ||||
Tilden | Michigan | 85.0% | Iron Ore | Active | ||||
Empire | Michigan | 79.0% | Iron Ore | Active | ||||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | Active | ||||
Pinnacle | West Virginia | 100.0% | Coal | Active - Held for Sale | ||||
Oak Grove | Alabama | 100.0% | Coal | Active - Held for Sale | ||||
Wabush1 | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | Permanent closure | ||||
Bloom Lake1 | Quebec, Canada | 82.8% | Iron Ore | Care-and-maintenance | ||||
1 As of January 27, 2015 and May 20, 2015, we deconsolidated substantially all of our Canadian operations following the CCAA filing. See NOTE 14 - DISCONTINUED OPERATIONS for further information. |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2015 | December 31, 2014 | |||||||||
Hibbing | Other non-current assets | Equity Method | 23% | $ | 2.1 | $ | 3.1 | |||||||
Other | Other non-current assets | Equity Method | Various | 1.1 | 1.0 | |||||||||
$ | 3.2 | $ | 4.1 |
|
(In Millions) | |||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Revenues from product sales and services: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 471.0 | 79 | % | $ | 767.4 | 78 | % | $ | 1,152.5 | 75 | % | $ | 1,643.3 | 70 | % | |||||||||||
Asia Pacific Iron Ore | 122.2 | 21 | % | 212.3 | 22 | % | 384.8 | 25 | % | 699.6 | 30 | % | |||||||||||||||
Total revenues from product sales and services | $ | 593.2 | 100 | % | $ | 979.7 | 100 | % | $ | 1,537.3 | 100 | % | $ | 2,342.9 | 100 | % | |||||||||||
Sales margin: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 48.7 | $ | 219.5 | $ | 177.7 | $ | 461.7 | |||||||||||||||||||
Asia Pacific Iron Ore | 6.4 | 9.1 | 15.5 | 111.4 | |||||||||||||||||||||||
Eliminations with discontinued operations | — | 27.6 | — | 56.6 | |||||||||||||||||||||||
Sales margin | 55.1 | 256.2 | 193.2 | 629.7 | |||||||||||||||||||||||
Other operating expense | (25.9 | ) | (399.0 | ) | (66.4 | ) | (494.0 | ) | |||||||||||||||||||
Other income (expense) | 17.4 | (38.1 | ) | 221.7 | (118.2 | ) | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes and equity loss from ventures | $ | 46.6 | $ | (180.9 | ) | $ | 348.5 | $ | 17.5 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Income (Loss) | $ | 6.0 | $ | (6,887.2 | ) | $ | (690.5 | ) | $ | (6,943.4 | ) | ||||
Less: | |||||||||||||||
Interest expense, net | (62.3 | ) | (47.4 | ) | (170.7 | ) | (134.9 | ) | |||||||
Income tax benefit (expense) | 4.8 | 921.4 | (167.3 | ) | 1,012.3 | ||||||||||
Depreciation, depletion and amortization | (35.6 | ) | (144.0 | ) | (99.1 | ) | (430.4 | ) | |||||||
EBITDA | $ | 99.1 | $ | (7,617.2 | ) | $ | (253.4 | ) | $ | (7,390.4 | ) | ||||
Less: | |||||||||||||||
Impairment of goodwill and other long-lived assets | $ | — | $ | (377.0 | ) | $ | (3.3 | ) | $ | (378.6 | ) | ||||
Impact of discontinued operations | (44.8 | ) | (7,543.0 | ) | (865.9 | ) | (7,737.1 | ) | |||||||
Gain on extinguishment of debt | 79.2 | — | 392.9 | — | |||||||||||
Severance and contractor termination costs | 2.2 | (2.6 | ) | (9.3 | ) | (19.3 | ) | ||||||||
Foreign exchange remeasurement | 2.4 | 25.8 | 15.2 | 8.4 | |||||||||||
Adjusted EBITDA | $ | 60.1 | $ | 279.6 | $ | 217.0 | $ | 736.2 | |||||||
EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 69.2 | $ | 241.9 | $ | 239.6 | $ | 538.2 | |||||||
Asia Pacific Iron Ore | 11.1 | (302.2 | ) | 38.7 | (150.8 | ) | |||||||||
Other | 18.8 | (7,556.9 | ) | (531.7 | ) | (7,777.8 | ) | ||||||||
Total EBITDA | $ | 99.1 | $ | (7,617.2 | ) | $ | (253.4 | ) | $ | (7,390.4 | ) | ||||
Adjusted EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 72.3 | $ | 249.5 | $ | 254.6 | $ | 559.1 | |||||||
Asia Pacific Iron Ore | 9.7 | 49.7 | 32.8 | 225.5 | |||||||||||
Other | (21.9 | ) | (19.6 | ) | (70.4 | ) | (48.4 | ) | |||||||
Total Adjusted EBITDA | $ | 60.1 | $ | 279.6 | $ | 217.0 | $ | 736.2 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Depreciation, depletion and amortization: | |||||||||||||||
U.S. Iron Ore | $ | 27.9 | $ | 25.9 | $ | 71.6 | $ | 81.2 | |||||||
Asia Pacific Iron Ore | 6.1 | 42.2 | 19.1 | 123.6 | |||||||||||
Other | 1.6 | 2.0 | 5.2 | 5.9 | |||||||||||
Total depreciation, depletion and amortization | $ | 35.6 | $ | 70.1 | $ | 95.9 | $ | 210.7 | |||||||
Capital additions1: | |||||||||||||||
U.S. Iron Ore | $ | 15.0 | $ | 8.5 | $ | 35.8 | $ | 37.4 | |||||||
Asia Pacific Iron Ore | 0.3 | 3.1 | 4.8 | 8.3 | |||||||||||
Other | 2.4 | 0.5 | 6.0 | 3.3 | |||||||||||
Total capital additions | $ | 17.7 | $ | 12.1 | $ | 46.6 | $ | 49.0 |
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Assets: | |||||||
U.S. Iron Ore | $ | 1,498.3 | $ | 1,464.9 | |||
Asia Pacific Iron Ore | 210.5 | 274.6 | |||||
Other | 26.3 | 147.0 | |||||
Total segment assets | 1,735.1 | 1,886.5 | |||||
Corporate | 395.0 | 546.8 | |||||
Assets of Discontinued Operations | 141.4 | 730.7 | |||||
Total assets | $ | 2,271.5 | $ | 3,164.0 |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||
Segment | Finished Goods | Work-in Process | Total Inventory | Finished Goods | Work-in Process | Total Inventory | |||||||||||||||||
U.S. Iron Ore | $ | 260.3 | $ | 23.3 | $ | 283.6 | $ | 132.1 | $ | 13.5 | $ | 145.6 | |||||||||||
Asia Pacific Iron Ore | 18.5 | 49.6 | 68.1 | 26.4 | 88.1 | 114.5 | |||||||||||||||||
Total | $ | 278.8 | $ | 72.9 | $ | 351.7 | $ | 158.5 | $ | 101.6 | $ | 260.1 |
|
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Land rights and mineral rights | $ | 500.6 | $ | 500.5 | |||
Office and information technology | 68.5 | 73.7 | |||||
Buildings | 60.1 | 59.8 | |||||
Mining equipment | 583.8 | 585.1 | |||||
Processing equipment | 514.4 | 510.2 | |||||
Electric power facilities | 46.4 | 46.8 | |||||
Land improvements | 24.8 | 24.7 | |||||
Other | 99.8 | 55.0 | |||||
Construction in-progress | 34.5 | 14.4 | |||||
1,932.9 | 1,870.2 | ||||||
Allowance for depreciation and depletion | (880.3 | ) | (799.7 | ) | |||
$ | 1,052.6 | $ | 1,070.5 |
|
($ in Millions) | |||||||||||||||
September 30, 2015 | |||||||||||||||
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 | $ | 412.5 | $ | 412.3 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 306.7 | 306.3 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 492.8 | 487.0 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 290.8 | 289.9 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 6.36% | 2018 | 311.2 | 309.9 | (5) | |||||||||
$540 Million 8.25% 2020 First Lien Notes | Fixed | 9.97% | 2020 | 540.0 | 506.4 | (6) | |||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | Fixed | 15.55% | 2020 | 544.2 | 407.4 | (7) | |||||||||
$550 Million ABL Facility: | |||||||||||||||
ABL Facility | Variable | N/A | 2020 | 550.0 | — | (8) | |||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.4 | ||||||||||||||
Long-term debt | $ | 3,448.2 | $ | 2,721.6 |
($ in Millions) | |||||||||||||||
December 31, 2014 | |||||||||||||||
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 | $ | 690.0 | $ | 689.5 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 490.0 | 489.4 | (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 | 395.0 | 393.7 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 5.17% | 2018 | 480.0 | 477.4 | (5) | |||||||||
$1.125 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 2.94% | 2017 | 1,125.0 | — | (9) | |||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.8 | ||||||||||||||
Long-term debt | $ | 3,980.0 | $ | 2,843.3 |
(1) | During the third quarter of 2015, we purchased $10.7 million of outstanding 4.875 percent senior notes that were trading at 50.0 percent of par which resulted in a gain on extinguishment of $5.3 million. In addition, during the first quarter of 2015, we purchased $58.3 million of outstanding 4.875 percent senior notes that were trading at 52.0 percent of par, which resulted in a gain on extinguishment of $20.0 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $208.5 million of the 4.875 percent senior notes for $170.3 million of the 7.75 percent second lien notes at a discount of $46.0 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $83.1 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(2) | During the third quarter of 2015, we purchased $1.8 million of outstanding 4.80 percent senior notes that were trading at 50.0 percent of par, which resulted in a gain on extinguishment of $0.9 million. In addition, during the first quarter of 2015, we purchased $43.8 million of outstanding 4.80 percent senior notes that were trading at 54.3 percent of par, which resulted in a gain on extinguishment of $15.6 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $137.8 million of the 4.80 percent senior notes for $112.9 million of the 7.75 percent second lien notes at a discount of $30.5 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $54.6 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(3) | During the first quarter of 2015, we purchased $45.9 million of outstanding 6.25 percent senior notes that were trading at 52.5 percent of par, which resulted in a gain on extinguishment of $15.0 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $261.3 million of the 6.25 percent senior notes for $203.5 million of the 7.75 percent second lien notes at a discount of $55.0 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $107.3 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(4) | During the third quarter of 2015, we purchased $36.0 million of outstanding 5.90 percent senior notes that were trading at 50.0 percent of par, which resulted in a gain on extinguishment of $18.0 million. In addition, during the first quarter of 2015, we purchased $1.3 million of outstanding 5.90 percent senior notes that were trading at 58.0 percent of par, which resulted in a gain on extinguishment of $0.3 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $67.0 million of the 5.90 percent senior notes for $57.5 million of the 7.75 percent second lien notes at a discount of $15.5 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $24.5 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(5) | During the third quarter, on August 28, 2015, we purchased for cash as part of a tender offer, $124.8 million of the 3.95 percent senior notes for $68.6 million, resulting in a gain on extinguishment of $54.9 million, net of amounts expensed for reacquisition costs, unamortized original issue discount and deferred origination fees. In addition, during the first quarter of 2015, we purchased $44.0 million of outstanding 3.95 percent senior notes that were trading at 77.5 percent of par, which resulted in a gain on the extinguishment of debt of $7.1 million. |
(6) | As of September 30, 2015, the $540.0 million 8.25 percent first lien notes were recorded at a par value of $540.0 million less unamortized discounts of $33.6 million, based on an imputed interest rate of 9.97 percent. |
(7) | As of September 30, 2015, the $544.2 million 7.75 percent second lien notes were recorded at a par value of $544.2 million less unamortized discounts of $136.8 million, based on an imputed interest rate of 15.55 percent. See NOTE 6 - FAIR VALUE MEASUREMENTS for further discussion of unamortized discount as a result of the exchange offers. |
(8) | As of September 30, 2015, no loans were drawn under the ABL Facility and we had total availability of $442.9 million as a result of borrowing base limitations. As of September 30, 2015, the principal amount of letter of credit obligations totaled $187.3 million, thereby further reducing available borrowing capacity on our ABL Facility to $255.6 million. |
(9) | As of December 31, 2014, we had no revolving loans drawn under the revolving credit agreement which had $1.125 billion availability. As of December 31, 2014, the principal amount of letter of credit obligations totaled $149.5 million, thereby reducing available borrowing capacity on the revolving credit agreement to $975.5 million. |
(In Millions) | |||
Maturities of Debt | |||
2015 (October 1 - December 31) | $ | — | |
2016 | — | ||
2017 | — | ||
2018 | 311.2 | ||
2019 | — | ||
2020 | 1,681.7 | ||
2021 and thereafter | 905.3 | ||
Total maturities of debt | $ | 2,898.2 |
|
(In Millions) | |||||||||||||||
September 30, 2015 | |||||||||||||||
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 | $ | 80.0 | $ | — | $ | — | $ | 80.0 | |||||||
Derivative assets | — | — | 10.4 | 10.4 | |||||||||||
Total | $ | 80.0 | $ | — | $ | 10.4 | $ | 90.4 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 0.8 | $ | 0.8 | |||||||
Total | $ | — | $ | — | $ | 0.8 | $ | 0.8 |
(In Millions) | |||||||||||||||
December 31, 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: | |||||||||||||||
Derivative assets | $ | — | $ | — | $ | 63.2 | $ | 63.2 | |||||||
Available-for-sale marketable securities | 4.3 | — | — | 4.3 | |||||||||||
Total | $ | 4.3 | $ | — | $ | 63.2 | $ | 67.5 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 9.5 | $ | 9.5 | |||||||
Foreign exchange contracts | — | 31.5 | — | 31.5 | |||||||||||
Total | $ | — | $ | 31.5 | $ | 9.5 | $ | 41.0 |
Qualitative/Quantitative Information About Level 3 Fair Value Measurements | ||||||||||||
(In Millions) Fair Value at September 30, 2015 | Balance Sheet Location | Valuation Technique | Unobservable Input | Range or Point Estimate per ton (Weighted Average) | ||||||||
Provisional Pricing Arrangements | $ | 0.6 | Other current assets | Market Approach | Management's Estimate of 62% Fe | $56 | ||||||
$ | 0.8 | Other current liabilities | ||||||||||
Customer Supply Agreement | $ | 9.8 | Other current assets | Market Approach | Hot-Rolled Steel Estimate | $470 - $515 ($489) |
(In Millions) | |||||||||||||||
Derivative Assets (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | 7.7 | $ | 33.0 | $ | 63.2 | $ | 57.7 | |||||||
Total gains (losses) | |||||||||||||||
Included in earnings | 15.0 | 62.6 | 28.1 | 124.6 | |||||||||||
Settlements | (12.3 | ) | (41.1 | ) | (80.9 | ) | (127.8 | ) | |||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | 10.4 | $ | 54.5 | $ | 10.4 | $ | 54.5 | |||||||
Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date | $ | 12.2 | $ | 62.6 | $ | 22.7 | $ | 124.6 |
(In Millions) | |||||||||||||||
Derivative Liabilities (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | (8.0 | ) | $ | (20.2 | ) | $ | (9.5 | ) | $ | (1.0 | ) | |||
Total gains (losses) | |||||||||||||||
Included in earnings | (13.7 | ) | 2.3 | (45.4 | ) | (17.9 | ) | ||||||||
Settlements | 20.9 | — | 54.1 | 1.0 | |||||||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | (0.8 | ) | $ | (17.9 | ) | $ | (0.8 | ) | $ | (17.9 | ) | |||
Total gains (losses) for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date | $ | (0.5 | ) | $ | 2.3 | $ | (0.8 | ) | $ | (17.9 | ) |
(In Millions) | |||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||
Classification | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Long-term debt: | |||||||||||||||||
Senior Notes—$700 million | Level 1 | $ | 412.3 | $ | 115.4 | $ | 689.5 | $ | 367.3 | ||||||||
Senior Notes—$1.3 billion | Level 1 | 793.3 | 242.4 | 1,279.9 | 704.0 | ||||||||||||
Senior Notes—$400 million | Level 1 | 289.9 | 99.6 | 393.7 | 228.1 | ||||||||||||
Senior Notes—$500 million | Level 1 | 309.9 | 162.6 | 477.4 | 312.0 | ||||||||||||
Senior First Lien Notes —$540 million | Level 1 | 506.4 | 477.9 | — | — | ||||||||||||
Senior Second Lien Notes —$544.2 million | Level 1 | 407.4 | 217.7 | — | — | ||||||||||||
ABL Facility | Level 2 | — | — | — | — | ||||||||||||
Fair value adjustment to interest rate hedge | Level 2 | 2.4 | 2.4 | 2.8 | 2.8 | ||||||||||||
Total long-term debt | $ | 2,721.6 | $ | 1,318.0 | $ | 2,843.3 | $ | 1,614.2 |
(In Millions) | ||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Gains | |||||||||||||||
Liabilities: | ||||||||||||||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | $ | — | $ | 397.2 | $ | — | $ | 397.2 | $ | 269.5 | ||||||||||
$ | — | $ | 397.2 | $ | — | $ | 397.2 | $ | 269.5 |
(In Millions) | ||||||||||||||||||||
December 31, 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 | — | — | 72.4 | 72.4 | 526.5 | |||||||||||||||
Other reporting units | — | — | — | — | 11.3 | |||||||||||||||
Other long-lived assets - Intangibles and other long-term assets: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 7.0 | 7.0 | 24.2 | |||||||||||||||
Investment in ventures impairment - Global Exploration | — | — | — | — | 9.2 | |||||||||||||||
$ | — | $ | — | $ | 79.4 | $ | 79.4 | $ | 644.7 |
|
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | 3.1 | $ | 4.7 | $ | 15.7 | $ | 18.2 | |||||||
Interest cost | 9.0 | 9.6 | 27.9 | 29.8 | |||||||||||
Expected return on plan assets | (14.5 | ) | (14.1 | ) | (44.4 | ) | (43.1 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.5 | 0.7 | 1.7 | 1.9 | |||||||||||
Net actuarial loss | 4.5 | 3.3 | 15.3 | 10.4 | |||||||||||
Curtailments/settlements | (0.1 | ) | $ | 1.7 | 0.2 | 2.9 | |||||||||
Net periodic benefit cost to continuing operations | $ | 2.5 | $ | 5.9 | $ | 16.4 | $ | 20.1 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | (1.6 | ) | $ | (1.9 | ) | $ | 1.4 | $ | 1.4 | |||||
Interest cost | 2.1 | 2.2 | 8.6 | 9.0 | |||||||||||
Expected return on plan assets | (4.5 | ) | (4.2 | ) | (13.7 | ) | (12.8 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.6 | 0.6 | (1.2 | ) | (1.2 | ) | |||||||||
Net actuarial loss | 1.1 | 1.0 | 4.2 | 3.5 | |||||||||||
Net periodic benefit cost to continuing operations | $ | (2.3 | ) | $ | (2.3 | ) | $ | (0.7 | ) | $ | (0.1 | ) |
|
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | Fair Value (Percent of Grant Date Market Price) | |||||||||||
January 12, 2015 | $ | 7.70 | 2.97 | 58.3% | 0.91% | —% | $ | 11.56 | 150.13% | |||||||||
February 9, 2015 | $ | 6.57 | 2.89 | 58.3% | 0.87% | —% | $ | 9.86 | 150.13% |
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | ||||||||||
January 12, 2015 | $ | 7.70 | 6.47 | 75.3% | 1.60% | —% | $ | 5.23 |
|
|
(In Millions) | |||||||
Capital Leases | Operating Leases | ||||||
2015 (October 1 - December 31) | $ | 5.9 | $ | 2.6 | |||
2016 | 23.2 | 7.6 | |||||
2017 | 21.3 | 7.0 | |||||
2018 | 17.2 | 6.4 | |||||
2019 | 9.5 | 4.8 | |||||
2020 and thereafter | 17.5 | 9.9 | |||||
Total minimum lease payments | $ | 94.6 | $ | 38.3 | |||
Amounts representing interest | 19.5 | ||||||
Present value of net minimum lease payments | $ | 75.1 | (1) |
(1) | The total is comprised of $16.9 million and $58.2 million classified as Other current liabilities and Other liabilities, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at September 30, 2015. |
|
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Environmental | $ | 4.3 | $ | 5.5 | |||
Mine closure | |||||||
LTVSMC | 23.9 | 22.9 | |||||
Operating mines: | |||||||
U.S. Iron Ore | 171.5 | 120.9 | |||||
Asia Pacific Iron Ore | 15.6 | 21.5 | |||||
Total mine closure | 211.0 | 165.3 | |||||
Total environmental and mine closure obligations | 215.3 | 170.8 | |||||
Less current portion | 3.4 | 5.2 | |||||
Long term environmental and mine closure obligations | $ | 211.9 | $ | 165.6 |
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 (1) | ||||||
Asset retirement obligation at beginning of period | $ | 142.4 | $ | 177.6 | |||
Accretion expense | 4.5 | 5.7 | |||||
Exchange rate changes | (1.7 | ) | (2.4 | ) | |||
Revision in estimated cash flows | 41.9 | (38.5 | ) | ||||
Asset retirement obligation at end of period | $ | 187.1 | $ | 142.4 | |||
(1) Represents a 12-month rollforward of our asset retirement obligation at December 31, 2014. |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2015 | December 31, 2014 (1) | ||||||||||||||||||||||
U.S. Iron Ore | Asia Pacific Iron Ore | Total | U.S. Iron Ore | Asia Pacific Iron Ore | Total | ||||||||||||||||||
Beginning Balance | $ | 2.0 | $ | — | $ | 2.0 | $ | 2.0 | $ | 72.5 | $ | 74.5 | |||||||||||
Impairment | — | — | — | — | (73.5 | ) | (73.5 | ) | |||||||||||||||
Impact of foreign currency translation | — | — | — | — | 1.0 | 1.0 | |||||||||||||||||
Ending Balance | $ | 2.0 | $ | — | $ | 2.0 | $ | 2.0 | $ | — | $ | 2.0 | |||||||||||
Accumulated goodwill impairment loss | $ | — | $ | (73.5 | ) | $ | (73.5 | ) | $ | — | $ | (73.5 | ) | $ | (73.5 | ) | |||||||
(1) Represents a 12-month rollforward of our goodwill at December 31, 2014. |
(In Millions) | |||||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||||
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 | $ | 78.2 | $ | (19.3 | ) | $ | 58.9 | $ | 79.2 | $ | (16.5 | ) | $ | 62.7 | ||||||||||
Total intangible assets | $ | 78.2 | $ | (19.3 | ) | $ | 58.9 | $ | 79.2 | $ | (16.5 | ) | $ | 62.7 | |||||||||||
Below-market sales contracts | Other current liabilities | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | ||||||||
Below-market sales contracts | Other liabilities | (205.9 | ) | 198.1 | (7.8 | ) | (205.9 | ) | 182.8 | (23.1 | ) | ||||||||||||||
Total below-market sales contracts | $ | (228.9 | ) | $ | 198.1 | $ | (30.8 | ) | $ | (228.9 | ) | $ | 182.8 | $ | (46.1 | ) |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2015 (remaining three months) | $ | 0.9 | |
2016 | 3.7 | ||
2017 | 4.2 | ||
2018 | 4.1 | ||
2019 | 3.0 | ||
2020 | 2.5 | ||
Total | $ | 18.4 |
(In Millions) | |||
Year Ending December 31, | |||
2015 (remaining three months) | $ | 7.7 | |
2016 | 23.1 | ||
Total | $ | 30.8 |
|
(In Millions) | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||||
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: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 21.6 | ||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | — | $ | — | $ | 21.6 | |||||||||||||||
Derivatives not designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 9.9 | ||||||||||||||
Customer Supply Agreement | Other current assets | 9.8 | Other current assets | 63.2 | — | — | |||||||||||||||||
Provisional Pricing Arrangements | Other current assets | 0.6 | — | Other current liabilities | 0.8 | Other current liabilities | 9.5 | ||||||||||||||||
Total derivatives not designated as hedging instruments under ASC 815 | $ | 10.4 | $ | 63.2 | $ | 0.8 | $ | 19.4 | |||||||||||||||
Total derivatives | $ | 10.4 | $ | 63.2 | $ | 0.8 | $ | 41.0 |
(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, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | 0.1 | $ | (12.6 | ) | Product revenues | $ | (0.1 | ) | $ | 1.6 | ||||||
Australian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Product revenues | (4.3 | ) | — | |||||||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | — | (7.4 | ) | Cost of goods sold and operating expenses | — | (1.0 | ) | ||||||||||
Total | $ | 0.1 | $ | (20.0 | ) | $ | (4.4 | ) | $ | 0.6 | |||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (2.0 | ) | $ | (3.4 | ) | Product revenues | $ | (7.4 | ) | $ | (11.2 | ) | ||||
Australian Dollar Foreign Exchange Contracts (prior to de-designation) | (4.5 | ) | — | Product revenues | (11.1 | ) | — | ||||||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | — | (9.2 | ) | Cost of goods sold and operating expenses | — | (7.1 | ) | ||||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | — | (0.5 | ) | |||||||||||
$ | (6.5 | ) | $ | (12.6 | ) | $ | (18.5 | ) | $ | (18.8 | ) |
(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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Foreign Exchange Contracts | Other non-operating income (expense) (1) | $ | (1.1 | ) | $ | — | $ | (3.6 | ) | $ | (3.3 | ) | ||||
Foreign Exchange Contracts | Product revenues | (2.1 | ) | — | (11.8 | ) | — | |||||||||
Commodity Contracts | Cost of goods sold and operating expenses | — | — | (3.4 | ) | — | ||||||||||
Customer Supply Agreement | Product revenues | 11.6 | 62.6 | 22.1 | 124.6 | |||||||||||
Provisional Pricing Arrangements | Product revenues | 7.6 | 2.3 | (0.2 | ) | (17.9 | ) | |||||||||
$ | 16.0 | $ | 64.9 | $ | 3.1 | $ | 103.4 |
(1) | At September 30, 2014, the location of the Gain (Loss) Recognized in Income on Derivative for Foreign Exchange Contracts was Cost of goods sold and operating expenses. |
|
(In Millions) | ||||||||||||||||||
Canadian Operations | ||||||||||||||||||
North American Coal | Eastern Canadian Iron Ore | Other | Total Canadian Operations | Total of Discontinued Operations | ||||||||||||||
Statements of Unaudited Condensed Consolidated Operations | ||||||||||||||||||
Loss from Discontinued Operations, net of tax | QTD September 30, 2015 | $ | (29.8 | ) | $ | (14.1 | ) | $ | — | $ | (14.1 | ) | $ | (43.9 | ) | |||
Loss from Discontinued Operations, net of tax | QTD September 30, 2014 | $ | (579.7 | ) | $ | (5,782.5 | ) | $ | (250.8 | ) | $ | (6,033.3 | ) | $ | (6,613.0 | ) | ||
Loss from Discontinued Operations, net of tax | YTD September 30, 2015 | $ | (137.0 | ) | $ | (731.9 | ) | $ | (0.1 | ) | $ | (732.0 | ) | $ | (869.0 | ) | ||
Loss from Discontinued Operations, net of tax | YTD September 30, 2014 | $ | (643.6 | ) | $ | (5,930.4 | ) | $ | (255.8 | ) | $ | (6,186.2 | ) | $ | (6,829.8 | ) | ||
Statements of Unaudited Condensed Consolidated Financial Position | ||||||||||||||||||
Short-term assets of discontinued operations | As of September 30, 2015 | $ | 141.4 | $ | — | $ | — | $ | — | $ | 141.4 | |||||||
Long-term assets of discontinued operations | As of September 30, 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Short-term liabilities of discontinued operations | As of September 30, 2015 | $ | 182.2 | $ | — | $ | — | $ | — | $ | 182.2 | |||||||
Long-term liabilities of discontinued operations | As of September 30, 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Short-term assets of discontinued operations | As of December 31, 2014 | $ | 143.8 | $ | 183.5 | $ | 3.3 | $ | 186.8 | $ | 330.6 | |||||||
Long-term assets of discontinued operations | As of December 31, 2014 | $ | 130.4 | $ | 256.0 | $ | 13.7 | $ | 269.7 | $ | 400.1 | |||||||
Short-term liabilities of discontinued operations | As of December 31, 2014 | $ | 81.3 | $ | 316.3 | $ | 3.0 | $ | 319.3 | $ | 400.6 | |||||||
Long-term liabilities of discontinued operations | As of December 31, 2014 | $ | 125.9 | $ | 304.6 | $ | 5.6 | $ | 310.2 | $ | 436.1 | |||||||
Non-Cash Operating and Investing Activities | ||||||||||||||||||
Depreciation, depletion and amortization: | YTD September 30, 2015 | $ | 3.2 | $ | — | $ | — | $ | — | $ | 3.2 | |||||||
Purchase of property, plant and equipment | YTD September 30, 2015 | $ | 13.1 | $ | — | $ | — | $ | — | $ | 13.1 | |||||||
Impairment of goodwill and other long-lived assets | YTD September 30, 2015 | $ | 73.4 | $ | — | $ | — | $ | — | $ | 73.4 | |||||||
Depreciation, depletion and amortization: | YTD September 30, 2014 | $ | 92.1 | $ | 126.4 | $ | 0.3 | $ | 126.7 | $ | 218.8 | |||||||
Purchase of property, plant and equipment | YTD September 30, 2014 | $ | 25.8 | $ | 160.9 | $ | — | $ | 160.9 | $ | 186.7 | |||||||
Impairment of goodwill and other long-lived assets | YTD September 30, 2014 | $ | — | $ | 6,307.3 | $ | 259.5 | $ | 6,566.8 | $ | 6,566.8 |
(In Millions) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Loss from Discontinued Operations | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues from product sales and services | $ | 78.8 | $ | 170.5 | $ | 338.1 | $ | 515.8 | ||||||||
Cost of goods sold and operating expenses | (102.9 | ) | (194.7 | ) | (377.2 | ) | (641.2 | ) | ||||||||
Sales margin | (24.1 | ) | (24.2 | ) | (39.1 | ) | (125.4 | ) | ||||||||
Other operating expense | (7.4 | ) | (5.6 | ) | (25.7 | ) | (15.2 | ) | ||||||||
Other expense | (0.4 | ) | (0.9 | ) | (1.4 | ) | (1.8 | ) | ||||||||
Loss from discontinued operations before income taxes | (31.9 | ) | (30.7 | ) | (66.2 | ) | (142.4 | ) | ||||||||
Impairment of long-lived assets | — | (827.8 | ) | (73.4 | ) | (827.8 | ) | |||||||||
Income tax benefit | 2.1 | 278.8 | 2.6 | 326.6 | ||||||||||||
Loss from discontinued operations, net of tax | $ | (29.8 | ) | $ | (579.7 | ) | $ | (137.0 | ) | $ | (643.6 | ) |
(In Millions) | ||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
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: | ||||||||||||||||||||
Other long-lived assets - Property, plant and equipment and Mineral rights: North American Coal operating unit | $ | — | $ | — | $ | 20.4 | $ | 20.4 | $ | 73.4 | ||||||||||
$ | — | $ | — | $ | 20.4 | $ | 20.4 | $ | 73.4 |
(In Millions) | ||||||||
Assets and Liabilities of Discontinued Operations | September 30, 2015 | December 31, 2014 | ||||||
Accounts receivable, net | $ | 35.8 | $ | 44.8 | ||||
Inventories | 21.4 | 50.3 | ||||||
Supplies and other inventories | 28.0 | 28.2 | ||||||
Other current assets | 24.1 | 20.5 | ||||||
Property, plant and equipment, net | 31.3 | 94.7 | ||||||
Other non-current assets | 0.8 | 35.7 | ||||||
Total assets of discontinued operations | $ | 141.4 | $ | 274.2 | ||||
Accounts payable | $ | 18.6 | $ | 22.4 | ||||
Accrued liabilities | 16.6 | 27.9 | ||||||
Other current liabilities | 19.7 | 31.0 | ||||||
Pension and postemployment benefit liabilities1 | 59.5 | 55.8 | ||||||
Environmental and mine closure obligations | 35.4 | 33.9 | ||||||
Other liabilities | 32.4 | 36.2 | ||||||
Total liabilities of discontinued operations | $ | 182.2 | $ | 207.2 | ||||
1 This does not include a liability of approximately $330 million, which is the most recent estimate of Pinnacle and Oak Grove’s combined share of the underfunded liability under the UMWA 1974 Pension Plan. |
(In Millions) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Loss from Discontinued Operations | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues from product sales and services | $ | — | $ | 148.0 | $ | 11.3 | $ | 480.3 | ||||||||
Cost of goods sold and operating expenses | — | (224.7 | ) | (11.1 | ) | (645.2 | ) | |||||||||
Eliminations with continuing operations | — | (27.6 | ) | — | (56.6 | ) | ||||||||||
Sales margin | — | (104.3 | ) | 0.2 | (221.5 | ) | ||||||||||
Other operating expense | — | (87.4 | ) | (33.8 | ) | (200.4 | ) | |||||||||
Other expense | — | (1.5 | ) | (1.0 | ) | (4.5 | ) | |||||||||
Loss from discontinued operations before income taxes | — | (193.2 | ) | (34.6 | ) | (426.4 | ) | |||||||||
Loss from deconsolidation | (13.4 | ) | — | (697.4 | ) | — | ||||||||||
Impairment of long-lived assets | — | (6,566.8 | ) | — | (6,566.8 | ) | ||||||||||
Income tax benefit (expense) | (0.7 | ) | 726.7 | — | 807.0 | |||||||||||
Loss from discontinued operations, net of tax | $ | (14.1 | ) | $ | (6,033.3 | ) | $ | (732.0 | ) | $ | (6,186.2 | ) |
(In Millions) | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2015 | 2015 | |||||||
Investment impairment on deconsolidation1 | $ | (13.9 | ) | $ | (494.3 | ) | ||
Contingent liabilities | 0.5 | (203.1 | ) | |||||
Total loss from deconsolidation | $ | (13.4 | ) | $ | (697.4 | ) | ||
1 Includes the adjustment to fair value of our remaining interest in the Canadian Entities. |
(In Millions) | ||||||||||||||||||||
September 30, 2015 | ||||||||||||||||||||
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: | ||||||||||||||||||||
Loans to and accounts receivables from the Canadian Entities | $ | — | $ | — | $ | 84.5 | $ | 84.5 | $ | 494.3 | ||||||||||
Liabilities: | ||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 142.4 | $ | 142.4 | $ | 203.1 |
(In Millions) | ||||
Assets and Liabilities of Discontinued Operations | December 31, 2014 | |||
Cash and cash equivalents | $ | 19.7 | ||
Accounts receivable, net | 37.9 | |||
Inventories | 16.3 | |||
Supplies and other inventories | 48.5 | |||
Income tax receivable | 20.1 | |||
Other current assets | 44.3 | |||
Property, plant and equipment, net | 249.8 | |||
Other non-current assets | 19.9 | |||
Total Assets | $ | 456.5 | ||
Accounts payable | $ | 83.6 | ||
Accrued expenses | 200.0 | |||
Other current liabilities | 35.7 | |||
Pension and postemployment benefit liabilities | 79.8 | |||
Environmental and mine closure obligations | 56.5 | |||
Other liabilities | 173.9 | |||
Total Liabilities | $ | 629.5 |
|
|
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity (Deficit) | Noncontrolling Interest (Deficit) | Total Equity (Deficit) | |||||||||
December 31, 2014 | $ | (1,431.3 | ) | $ | (303.0 | ) | $ | (1,734.3 | ) | ||
Comprehensive income | |||||||||||
Net loss | (689.0 | ) | (1.5 | ) | (690.5 | ) | |||||
Other comprehensive income (loss) | 220.7 | (9.3 | ) | 211.4 | |||||||
Total comprehensive loss | (468.3 | ) | (10.8 | ) | (479.1 | ) | |||||
Effect of deconsolidation | — | 528.2 | 528.2 | ||||||||
Stock and other incentive plans | 6.0 | — | 6.0 | ||||||||
Preferred share dividends | (38.4 | ) | — | (38.4 | ) | ||||||
Distributions of partnership equity | — | (40.7 | ) | (40.7 | ) | ||||||
Undistributed losses to noncontrolling interest | — | (1.2 | ) | (1.2 | ) | ||||||
September 30, 2015 | $ | (1,932.0 | ) | $ | 172.5 | $ | (1,759.5 | ) |
(In Millions) | |||||||||||
Cliffs Shareholders’ Equity (Deficit) | Noncontrolling Interest (Deficit) | Total Equity (Deficit) | |||||||||
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 loss | (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) | |||||||||||||||||||
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, 2014 | $ | (291.1 | ) | $ | (1.0 | ) | $ | 64.4 | $ | (18.1 | ) | $ | (245.8 | ) | |||||
Other comprehensive income (loss) before reclassifications | 9.3 | 2.8 | (14.7 | ) | (7.1 | ) | (9.7 | ) | |||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | 30.3 | (2.0 | ) | 182.7 | 6.3 | 217.3 | |||||||||||||
Balance March 31, 2015 | $ | (251.5 | ) | $ | (0.2 | ) | $ | 232.4 | $ | (18.9 | ) | $ | (38.2 | ) | |||||
Other comprehensive income before reclassifications | 1.3 | 1.0 | 1.2 | 0.5 | 4.0 | ||||||||||||||
Net loss (gain) reclassified from accumulated other comprehensive income (loss) | (1.6 | ) | (0.9 | ) | — | 7.8 | 5.3 | ||||||||||||
Balance June 30, 2015 | $ | (251.8 | ) | $ | (0.1 | ) | $ | 233.6 | $ | (10.6 | ) | $ | (28.9 | ) | |||||
Other comprehensive income (loss) before reclassifications | (0.7 | ) | 0.1 | (11.4 | ) | 4.8 | (7.2 | ) | |||||||||||
Net loss reclassified from accumulated other comprehensive income (loss) | 6.6 | — | — | 4.4 | 11.0 | ||||||||||||||
Balance September 30, 2015 | $ | (245.9 | ) | $ | — | $ | 222.2 | $ | (1.4 | ) | $ | (25.1 | ) |
(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 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) | ||||||||||||||||||
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, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Amortization of pension and postretirement benefit liability: | ||||||||||||||||||
Prior service costs (1) | $ | 1.1 | $ | 1.3 | $ | 0.5 | $ | 0.7 | ||||||||||
Net actuarial loss (1) | 5.6 | 4.3 | 19.5 | 13.9 | ||||||||||||||
Settlements/curtailments (1) | (0.1 | ) | 1.7 | 0.2 | 2.9 | |||||||||||||
Effect of deconsolidation (2) | — | — | 15.1 | — | Loss from Discontinued Operations, net of tax | |||||||||||||
6.6 | 7.3 | 35.3 | 17.5 | Total before taxes | ||||||||||||||
— | 1.6 | — | (1.3 | ) | Income tax benefit (expense) | |||||||||||||
$ | 6.6 | $ | 8.9 | $ | 35.3 | $ | 16.2 | Net of taxes | ||||||||||
Unrealized gain (loss) on marketable securities: | ||||||||||||||||||
Sale of marketable securities | $ | — | $ | (9.7 | ) | $ | — | $ | (11.4 | ) | Other non-operating income (expense) | |||||||
Impairment | — | (0.3 | ) | (3.2 | ) | (0.3 | ) | Other non-operating income (expense) | ||||||||||
— | (10.0 | ) | (3.2 | ) | (11.7 | ) | Total before taxes | |||||||||||
— | 2.9 | 0.3 | 3.4 | Income tax benefit (expense) | ||||||||||||||
$ | — | $ | (7.1 | ) | $ | (2.9 | ) | $ | (8.3 | ) | Net of taxes | |||||||
Unrealized gain (loss) on foreign currency translation: | ||||||||||||||||||
Effect of deconsolidation (3) | $ | — | $ | — | $ | 182.7 | $ | — | Loss from Discontinued Operations, net of tax | |||||||||
— | — | — | — | Income tax benefit (expense) | ||||||||||||||
$ | — | $ | — | $ | 182.7 | $ | — | Net of taxes | ||||||||||
Unrealized gain (loss) on derivative financial instruments: | ||||||||||||||||||
Australian dollar foreign exchange contracts | $ | 6.3 | $ | (1.6 | ) | $ | 26.4 | $ | 16.7 | Product revenues | ||||||||
Canadian dollar foreign exchange contracts | — | 1.5 | — | 11.4 | Cost of goods sold and operating expenses | |||||||||||||
6.3 | (0.1 | ) | 26.4 | 28.1 | Total before taxes | |||||||||||||
(1.9 | ) | (0.5 | ) | (7.9 | ) | (9.3 | ) | Income tax benefit (expense) | ||||||||||
$ | 4.4 | $ | (0.6 | ) | $ | 18.5 | $ | 18.8 | Net of taxes | |||||||||
Total Reclassifications for the Period | $ | 11.0 | $ | 1.2 | $ | 233.6 | $ | 26.7 |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic benefit cost. See NOTE 7 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS for further information. |
(2) | Represents Canadian postretirement benefit liabilities that were deconsolidated. See NOTE 14 - DISCONTINUED OPERATIONS for further information. |
(3) | Represents Canadian accumulated currency translation adjustments that were deconsolidated. See NOTE 14 - DISCONTINUED OPERATIONS for further information. |
|
(In Millions) | |||||||
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Capital additions (1) | $ | 69.0 | $ | 186.0 | |||
Cash paid for capital expenditures | 57.9 | 233.2 | |||||
Difference | $ | 11.1 | $ | (47.2 | ) | ||
Non-cash accruals | $ | 10.4 | $ | (57.1 | ) | ||
Capital leases | 0.7 | 9.9 | |||||
Total | $ | 11.1 | $ | (47.2 | ) |
(1) | Includes capital additions of $46.6 million and $22.4 million related to continuing operations and discontinued operations, respectively, for the nine months ended September 30, 2015. Includes capital additions of $49.0 million and $137.0 million related to continuing operations and discontinued operations, respectively, for the nine months ended September 30, 2014. |
|
Mine | Cliffs Natural Resources | ArcelorMittal | U.S. Steel Corporation | |||||||
Empire | 79.0 | % | 21.0 | % | — | |||||
Tilden | 85.0 | % | — | 15.0 | % | |||||
Hibbing | 23.0 | % | 62.3 | % | 14.7 | % |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Product revenues from related parties | $ | 208.0 | $ | 285.2 | $ | 468.0 | $ | 625.4 | |||||||
Total product revenues | 542.5 | 901.9 | 1,399.9 | 2,161.7 | |||||||||||
Related party product revenue as a percent of total product revenue | 38.3 | % | 31.6 | % | 33.4 | % | 28.9 | % |
|
(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income (Loss) from Continuing Operations | $ | 49.9 | $ | (274.2 | ) | $ | 178.5 | $ | (113.6 | ) | |||||
Loss (Income) from Continuing Operations Attributable to Noncontrolling Interest | 4.6 | (2.5 | ) | (6.2 | ) | (22.4 | ) | ||||||||
Net Income (Loss) from Continuing Operations Attributable to Cliffs Shareholders | $ | 54.5 | $ | (276.7 | ) | $ | 172.3 | $ | (136.0 | ) | |||||
Loss from Discontinued Operations, net of tax | (43.9 | ) | (5,602.9 | ) | (861.3 | ) | (5,803.0 | ) | |||||||
Net Income (Loss) Attributable to Cliffs Shareholders | $ | 10.6 | $ | (5,879.6 | ) | $ | (689.0 | ) | $ | (5,939.0 | ) | ||||
Preferred Stock Dividends | (25.6 | ) | (12.8 | ) | (38.4 | ) | (38.4 | ) | |||||||
Net Loss Attributable to Cliffs Common Shareholders | $ | (15.0 | ) | $ | (5,892.4 | ) | $ | (727.4 | ) | $ | (5,977.4 | ) | |||
Weighted Average Number of Shares: | |||||||||||||||
Basic | 153.2 | 153.1 | 153.2 | 153.1 | |||||||||||
Depositary Shares | — | — | — | — | |||||||||||
Employee Stock Plans | — | — | — | — | |||||||||||
Diluted | 153.2 | 153.1 | 153.2 | 153.1 | |||||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Basic: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | (1.89 | ) | $ | 0.87 | $ | (1.14 | ) | |||||
Discontinued operations | (0.29 | ) | (36.60 | ) | (5.62 | ) | (37.91 | ) | |||||||
$ | (0.10 | ) | $ | (38.49 | ) | $ | (4.75 | ) | $ | (39.05 | ) | ||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Diluted: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | (1.89 | ) | $ | 0.87 | $ | (1.14 | ) | |||||
Discontinued operations | (0.29 | ) | (36.60 | ) | (5.62 | ) | (37.91 | ) | |||||||
$ | (0.10 | ) | $ | (38.49 | ) | $ | (4.75 | ) | $ | (39.05 | ) |
|
|
|
Name | Location | Ownership Interest | Operation | Status of Operations | ||||
Northshore | Minnesota | 100.0% | Iron Ore | Active | ||||
United Taconite | Minnesota | 100.0% | Iron Ore | Active | ||||
Tilden | Michigan | 85.0% | Iron Ore | Active | ||||
Empire | Michigan | 79.0% | Iron Ore | Active | ||||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | Active | ||||
Pinnacle | West Virginia | 100.0% | Coal | Active - Held for Sale | ||||
Oak Grove | Alabama | 100.0% | Coal | Active - Held for Sale | ||||
Wabush1 | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | Permanent closure | ||||
Bloom Lake1 | Quebec, Canada | 82.8% | Iron Ore | Care-and-maintenance | ||||
1 As of January 27, 2015 and May 20, 2015, we deconsolidated substantially all of our Canadian operations following the CCAA filing. See NOTE 14 - DISCONTINUED OPERATIONS for further information. |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2015 | December 31, 2014 | |||||||||
Hibbing | Other non-current assets | Equity Method | 23% | $ | 2.1 | $ | 3.1 | |||||||
Other | Other non-current assets | Equity Method | Various | 1.1 | 1.0 | |||||||||
$ | 3.2 | $ | 4.1 |
|
Name | Location | Ownership Interest | Operation | Status of Operations | ||||
Northshore | Minnesota | 100.0% | Iron Ore | Active | ||||
United Taconite | Minnesota | 100.0% | Iron Ore | Active | ||||
Tilden | Michigan | 85.0% | Iron Ore | Active | ||||
Empire | Michigan | 79.0% | Iron Ore | Active | ||||
Koolyanobbing | Western Australia | 100.0% | Iron Ore | Active | ||||
Pinnacle | West Virginia | 100.0% | Coal | Active - Held for Sale | ||||
Oak Grove | Alabama | 100.0% | Coal | Active - Held for Sale | ||||
Wabush1 | Newfoundland and Labrador/ Quebec, Canada | 100.0% | Iron Ore | Permanent closure | ||||
Bloom Lake1 | Quebec, Canada | 82.8% | Iron Ore | Care-and-maintenance | ||||
1 As of January 27, 2015 and May 20, 2015, we deconsolidated substantially all of our Canadian operations following the CCAA filing. See NOTE 14 - DISCONTINUED OPERATIONS for further information. |
(In Millions) | ||||||||||||||
Investment | Classification | Accounting Method | Interest Percentage | September 30, 2015 | December 31, 2014 | |||||||||
Hibbing | Other non-current assets | Equity Method | 23% | $ | 2.1 | $ | 3.1 | |||||||
Other | Other non-current assets | Equity Method | Various | 1.1 | 1.0 | |||||||||
$ | 3.2 | $ | 4.1 |
|
(In Millions) | |||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Revenues from product sales and services: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 471.0 | 79 | % | $ | 767.4 | 78 | % | $ | 1,152.5 | 75 | % | $ | 1,643.3 | 70 | % | |||||||||||
Asia Pacific Iron Ore | 122.2 | 21 | % | 212.3 | 22 | % | 384.8 | 25 | % | 699.6 | 30 | % | |||||||||||||||
Total revenues from product sales and services | $ | 593.2 | 100 | % | $ | 979.7 | 100 | % | $ | 1,537.3 | 100 | % | $ | 2,342.9 | 100 | % | |||||||||||
Sales margin: | |||||||||||||||||||||||||||
U.S. Iron Ore | $ | 48.7 | $ | 219.5 | $ | 177.7 | $ | 461.7 | |||||||||||||||||||
Asia Pacific Iron Ore | 6.4 | 9.1 | 15.5 | 111.4 | |||||||||||||||||||||||
Eliminations with discontinued operations | — | 27.6 | — | 56.6 | |||||||||||||||||||||||
Sales margin | 55.1 | 256.2 | 193.2 | 629.7 | |||||||||||||||||||||||
Other operating expense | (25.9 | ) | (399.0 | ) | (66.4 | ) | (494.0 | ) | |||||||||||||||||||
Other income (expense) | 17.4 | (38.1 | ) | 221.7 | (118.2 | ) | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes and equity loss from ventures | $ | 46.6 | $ | (180.9 | ) | $ | 348.5 | $ | 17.5 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Income (Loss) | $ | 6.0 | $ | (6,887.2 | ) | $ | (690.5 | ) | $ | (6,943.4 | ) | ||||
Less: | |||||||||||||||
Interest expense, net | (62.3 | ) | (47.4 | ) | (170.7 | ) | (134.9 | ) | |||||||
Income tax benefit (expense) | 4.8 | 921.4 | (167.3 | ) | 1,012.3 | ||||||||||
Depreciation, depletion and amortization | (35.6 | ) | (144.0 | ) | (99.1 | ) | (430.4 | ) | |||||||
EBITDA | $ | 99.1 | $ | (7,617.2 | ) | $ | (253.4 | ) | $ | (7,390.4 | ) | ||||
Less: | |||||||||||||||
Impairment of goodwill and other long-lived assets | $ | — | $ | (377.0 | ) | $ | (3.3 | ) | $ | (378.6 | ) | ||||
Impact of discontinued operations | (44.8 | ) | (7,543.0 | ) | (865.9 | ) | (7,737.1 | ) | |||||||
Gain on extinguishment of debt | 79.2 | — | 392.9 | — | |||||||||||
Severance and contractor termination costs | 2.2 | (2.6 | ) | (9.3 | ) | (19.3 | ) | ||||||||
Foreign exchange remeasurement | 2.4 | 25.8 | 15.2 | 8.4 | |||||||||||
Adjusted EBITDA | $ | 60.1 | $ | 279.6 | $ | 217.0 | $ | 736.2 | |||||||
EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 69.2 | $ | 241.9 | $ | 239.6 | $ | 538.2 | |||||||
Asia Pacific Iron Ore | 11.1 | (302.2 | ) | 38.7 | (150.8 | ) | |||||||||
Other | 18.8 | (7,556.9 | ) | (531.7 | ) | (7,777.8 | ) | ||||||||
Total EBITDA | $ | 99.1 | $ | (7,617.2 | ) | $ | (253.4 | ) | $ | (7,390.4 | ) | ||||
Adjusted EBITDA: | |||||||||||||||
U.S. Iron Ore | $ | 72.3 | $ | 249.5 | $ | 254.6 | $ | 559.1 | |||||||
Asia Pacific Iron Ore | 9.7 | 49.7 | 32.8 | 225.5 | |||||||||||
Other | (21.9 | ) | (19.6 | ) | (70.4 | ) | (48.4 | ) | |||||||
Total Adjusted EBITDA | $ | 60.1 | $ | 279.6 | $ | 217.0 | $ | 736.2 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Depreciation, depletion and amortization: | |||||||||||||||
U.S. Iron Ore | $ | 27.9 | $ | 25.9 | $ | 71.6 | $ | 81.2 | |||||||
Asia Pacific Iron Ore | 6.1 | 42.2 | 19.1 | 123.6 | |||||||||||
Other | 1.6 | 2.0 | 5.2 | 5.9 | |||||||||||
Total depreciation, depletion and amortization | $ | 35.6 | $ | 70.1 | $ | 95.9 | $ | 210.7 | |||||||
Capital additions1: | |||||||||||||||
U.S. Iron Ore | $ | 15.0 | $ | 8.5 | $ | 35.8 | $ | 37.4 | |||||||
Asia Pacific Iron Ore | 0.3 | 3.1 | 4.8 | 8.3 | |||||||||||
Other | 2.4 | 0.5 | 6.0 | 3.3 | |||||||||||
Total capital additions | $ | 17.7 | $ | 12.1 | $ | 46.6 | $ | 49.0 |
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Assets: | |||||||
U.S. Iron Ore | $ | 1,498.3 | $ | 1,464.9 | |||
Asia Pacific Iron Ore | 210.5 | 274.6 | |||||
Other | 26.3 | 147.0 | |||||
Total segment assets | 1,735.1 | 1,886.5 | |||||
Corporate | 395.0 | 546.8 | |||||
Assets of Discontinued Operations | 141.4 | 730.7 | |||||
Total assets | $ | 2,271.5 | $ | 3,164.0 |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||
Segment | Finished Goods | Work-in Process | Total Inventory | Finished Goods | Work-in Process | Total Inventory | |||||||||||||||||
U.S. Iron Ore | $ | 260.3 | $ | 23.3 | $ | 283.6 | $ | 132.1 | $ | 13.5 | $ | 145.6 | |||||||||||
Asia Pacific Iron Ore | 18.5 | 49.6 | 68.1 | 26.4 | 88.1 | 114.5 | |||||||||||||||||
Total | $ | 278.8 | $ | 72.9 | $ | 351.7 | $ | 158.5 | $ | 101.6 | $ | 260.1 |
|
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Land rights and mineral rights | $ | 500.6 | $ | 500.5 | |||
Office and information technology | 68.5 | 73.7 | |||||
Buildings | 60.1 | 59.8 | |||||
Mining equipment | 583.8 | 585.1 | |||||
Processing equipment | 514.4 | 510.2 | |||||
Electric power facilities | 46.4 | 46.8 | |||||
Land improvements | 24.8 | 24.7 | |||||
Other | 99.8 | 55.0 | |||||
Construction in-progress | 34.5 | 14.4 | |||||
1,932.9 | 1,870.2 | ||||||
Allowance for depreciation and depletion | (880.3 | ) | (799.7 | ) | |||
$ | 1,052.6 | $ | 1,070.5 |
|
($ in Millions) | |||||||||||||||
September 30, 2015 | |||||||||||||||
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 | $ | 412.5 | $ | 412.3 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 306.7 | 306.3 | (2) | |||||||||
$800 Million 6.25% 2040 Senior Notes | Fixed | 6.34% | 2040 | 492.8 | 487.0 | (3) | |||||||||
$400 Million 5.90% 2020 Senior Notes | Fixed | 5.98% | 2020 | 290.8 | 289.9 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 6.36% | 2018 | 311.2 | 309.9 | (5) | |||||||||
$540 Million 8.25% 2020 First Lien Notes | Fixed | 9.97% | 2020 | 540.0 | 506.4 | (6) | |||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | Fixed | 15.55% | 2020 | 544.2 | 407.4 | (7) | |||||||||
$550 Million ABL Facility: | |||||||||||||||
ABL Facility | Variable | N/A | 2020 | 550.0 | — | (8) | |||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.4 | ||||||||||||||
Long-term debt | $ | 3,448.2 | $ | 2,721.6 |
($ in Millions) | |||||||||||||||
December 31, 2014 | |||||||||||||||
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 | $ | 690.0 | $ | 689.5 | (1) | |||||||
$1.3 Billion Senior Notes: | |||||||||||||||
$500 Million 4.80% 2020 Senior Notes | Fixed | 4.83% | 2020 | 490.0 | 489.4 | (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 | 395.0 | 393.7 | (4) | |||||||||
$500 Million 3.95% 2018 Senior Notes | Fixed | 5.17% | 2018 | 480.0 | 477.4 | (5) | |||||||||
$1.125 Billion Credit Facility: | |||||||||||||||
Revolving Credit Agreement | Variable | 2.94% | 2017 | 1,125.0 | — | (9) | |||||||||
Fair Value Adjustment to Interest Rate Hedge | 2.8 | ||||||||||||||
Long-term debt | $ | 3,980.0 | $ | 2,843.3 |
(1) | During the third quarter of 2015, we purchased $10.7 million of outstanding 4.875 percent senior notes that were trading at 50.0 percent of par which resulted in a gain on extinguishment of $5.3 million. In addition, during the first quarter of 2015, we purchased $58.3 million of outstanding 4.875 percent senior notes that were trading at 52.0 percent of par, which resulted in a gain on extinguishment of $20.0 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $208.5 million of the 4.875 percent senior notes for $170.3 million of the 7.75 percent second lien notes at a discount of $46.0 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $83.1 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(2) | During the third quarter of 2015, we purchased $1.8 million of outstanding 4.80 percent senior notes that were trading at 50.0 percent of par, which resulted in a gain on extinguishment of $0.9 million. In addition, during the first quarter of 2015, we purchased $43.8 million of outstanding 4.80 percent senior notes that were trading at 54.3 percent of par, which resulted in a gain on extinguishment of $15.6 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $137.8 million of the 4.80 percent senior notes for $112.9 million of the 7.75 percent second lien notes at a discount of $30.5 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $54.6 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(3) | During the first quarter of 2015, we purchased $45.9 million of outstanding 6.25 percent senior notes that were trading at 52.5 percent of par, which resulted in a gain on extinguishment of $15.0 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $261.3 million of the 6.25 percent senior notes for $203.5 million of the 7.75 percent second lien notes at a discount of $55.0 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $107.3 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(4) | During the third quarter of 2015, we purchased $36.0 million of outstanding 5.90 percent senior notes that were trading at 50.0 percent of par, which resulted in a gain on extinguishment of $18.0 million. In addition, during the first quarter of 2015, we purchased $1.3 million of outstanding 5.90 percent senior notes that were trading at 58.0 percent of par, which resulted in a gain on extinguishment of $0.3 million. Also during the first quarter, on March 27, 2015, we exchanged as part of a tender offer $67.0 million of the 5.90 percent senior notes for $57.5 million of the 7.75 percent second lien notes at a discount of $15.5 million based on an imputed interest rate of 15.55 percent, resulting in a gain on extinguishment of $24.5 million, net of amounts expensed for unamortized original issue discount and deferred origination fees. |
(5) | During the third quarter, on August 28, 2015, we purchased for cash as part of a tender offer, $124.8 million of the 3.95 percent senior notes for $68.6 million, resulting in a gain on extinguishment of $54.9 million, net of amounts expensed for reacquisition costs, unamortized original issue discount and deferred origination fees. In addition, during the first quarter of 2015, we purchased $44.0 million of outstanding 3.95 percent senior notes that were trading at 77.5 percent of par, which resulted in a gain on the extinguishment of debt of $7.1 million. |
(6) | As of September 30, 2015, the $540.0 million 8.25 percent first lien notes were recorded at a par value of $540.0 million less unamortized discounts of $33.6 million, based on an imputed interest rate of 9.97 percent. |
(7) | As of September 30, 2015, the $544.2 million 7.75 percent second lien notes were recorded at a par value of $544.2 million less unamortized discounts of $136.8 million, based on an imputed interest rate of 15.55 percent. See NOTE 6 - FAIR VALUE MEASUREMENTS for further discussion of unamortized discount as a result of the exchange offers. |
(8) | As of September 30, 2015, no loans were drawn under the ABL Facility and we had total availability of $442.9 million as a result of borrowing base limitations. As of September 30, 2015, the principal amount of letter of credit obligations totaled $187.3 million, thereby further reducing available borrowing capacity on our ABL Facility to $255.6 million. |
(9) | As of December 31, 2014, we had no revolving loans drawn under the revolving credit agreement which had $1.125 billion availability. As of December 31, 2014, the principal amount of letter of credit obligations totaled $149.5 million, thereby reducing available borrowing capacity on the revolving credit agreement to $975.5 million. |
(In Millions) | |||
Maturities of Debt | |||
2015 (October 1 - December 31) | $ | — | |
2016 | — | ||
2017 | — | ||
2018 | 311.2 | ||
2019 | — | ||
2020 | 1,681.7 | ||
2021 and thereafter | 905.3 | ||
Total maturities of debt | $ | 2,898.2 |
|
(In Millions) | |||||||||||||||
September 30, 2015 | |||||||||||||||
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 | $ | 80.0 | $ | — | $ | — | $ | 80.0 | |||||||
Derivative assets | — | — | 10.4 | 10.4 | |||||||||||
Total | $ | 80.0 | $ | — | $ | 10.4 | $ | 90.4 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 0.8 | $ | 0.8 | |||||||
Total | $ | — | $ | — | $ | 0.8 | $ | 0.8 |
(In Millions) | |||||||||||||||
December 31, 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: | |||||||||||||||
Derivative assets | $ | — | $ | — | $ | 63.2 | $ | 63.2 | |||||||
Available-for-sale marketable securities | 4.3 | — | — | 4.3 | |||||||||||
Total | $ | 4.3 | $ | — | $ | 63.2 | $ | 67.5 | |||||||
Liabilities: | |||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 9.5 | $ | 9.5 | |||||||
Foreign exchange contracts | — | 31.5 | — | 31.5 | |||||||||||
Total | $ | — | $ | 31.5 | $ | 9.5 | $ | 41.0 |
Qualitative/Quantitative Information About Level 3 Fair Value Measurements | ||||||||||||
(In Millions) Fair Value at September 30, 2015 | Balance Sheet Location | Valuation Technique | Unobservable Input | Range or Point Estimate per ton (Weighted Average) | ||||||||
Provisional Pricing Arrangements | $ | 0.6 | Other current assets | Market Approach | Management's Estimate of 62% Fe | $56 | ||||||
$ | 0.8 | Other current liabilities | ||||||||||
Customer Supply Agreement | $ | 9.8 | Other current assets | Market Approach | Hot-Rolled Steel Estimate | $470 - $515 ($489) |
(In Millions) | |||||||||||||||
Derivative Assets (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | 7.7 | $ | 33.0 | $ | 63.2 | $ | 57.7 | |||||||
Total gains (losses) | |||||||||||||||
Included in earnings | 15.0 | 62.6 | 28.1 | 124.6 | |||||||||||
Settlements | (12.3 | ) | (41.1 | ) | (80.9 | ) | (127.8 | ) | |||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | 10.4 | $ | 54.5 | $ | 10.4 | $ | 54.5 | |||||||
Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date | $ | 12.2 | $ | 62.6 | $ | 22.7 | $ | 124.6 |
(In Millions) | |||||||||||||||
Derivative Liabilities (Level 3) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | (8.0 | ) | $ | (20.2 | ) | $ | (9.5 | ) | $ | (1.0 | ) | |||
Total gains (losses) | |||||||||||||||
Included in earnings | (13.7 | ) | 2.3 | (45.4 | ) | (17.9 | ) | ||||||||
Settlements | 20.9 | — | 54.1 | 1.0 | |||||||||||
Transfers into Level 3 | — | — | — | — | |||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||
Ending balance - September 30 | $ | (0.8 | ) | $ | (17.9 | ) | $ | (0.8 | ) | $ | (17.9 | ) | |||
Total gains (losses) for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date | $ | (0.5 | ) | $ | 2.3 | $ | (0.8 | ) | $ | (17.9 | ) |
(In Millions) | |||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||
Classification | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Long-term debt: | |||||||||||||||||
Senior Notes—$700 million | Level 1 | $ | 412.3 | $ | 115.4 | $ | 689.5 | $ | 367.3 | ||||||||
Senior Notes—$1.3 billion | Level 1 | 793.3 | 242.4 | 1,279.9 | 704.0 | ||||||||||||
Senior Notes—$400 million | Level 1 | 289.9 | 99.6 | 393.7 | 228.1 | ||||||||||||
Senior Notes—$500 million | Level 1 | 309.9 | 162.6 | 477.4 | 312.0 | ||||||||||||
Senior First Lien Notes —$540 million | Level 1 | 506.4 | 477.9 | — | — | ||||||||||||
Senior Second Lien Notes —$544.2 million | Level 1 | 407.4 | 217.7 | — | — | ||||||||||||
ABL Facility | Level 2 | — | — | — | — | ||||||||||||
Fair value adjustment to interest rate hedge | Level 2 | 2.4 | 2.4 | 2.8 | 2.8 | ||||||||||||
Total long-term debt | $ | 2,721.6 | $ | 1,318.0 | $ | 2,843.3 | $ | 1,614.2 |
(In Millions) | ||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Total Gains | |||||||||||||||
Liabilities: | ||||||||||||||||||||
$544.2 Million 7.75% 2020 Second Lien Notes | $ | — | $ | 397.2 | $ | — | $ | 397.2 | $ | 269.5 | ||||||||||
$ | — | $ | 397.2 | $ | — | $ | 397.2 | $ | 269.5 |
(In Millions) | ||||||||||||||||||||
December 31, 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 | — | — | 72.4 | 72.4 | 526.5 | |||||||||||||||
Other reporting units | — | — | — | — | 11.3 | |||||||||||||||
Other long-lived assets - Intangibles and other long-term assets: | ||||||||||||||||||||
Asia Pacific Iron Ore reporting unit | — | — | 7.0 | 7.0 | 24.2 | |||||||||||||||
Investment in ventures impairment - Global Exploration | — | — | — | — | 9.2 | |||||||||||||||
$ | — | $ | — | $ | 79.4 | $ | 79.4 | $ | 644.7 |
|
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | 3.1 | $ | 4.7 | $ | 15.7 | $ | 18.2 | |||||||
Interest cost | 9.0 | 9.6 | 27.9 | 29.8 | |||||||||||
Expected return on plan assets | (14.5 | ) | (14.1 | ) | (44.4 | ) | (43.1 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.5 | 0.7 | 1.7 | 1.9 | |||||||||||
Net actuarial loss | 4.5 | 3.3 | 15.3 | 10.4 | |||||||||||
Curtailments/settlements | (0.1 | ) | $ | 1.7 | 0.2 | 2.9 | |||||||||
Net periodic benefit cost to continuing operations | $ | 2.5 | $ | 5.9 | $ | 16.4 | $ | 20.1 |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | (1.6 | ) | $ | (1.9 | ) | $ | 1.4 | $ | 1.4 | |||||
Interest cost | 2.1 | 2.2 | 8.6 | 9.0 | |||||||||||
Expected return on plan assets | (4.5 | ) | (4.2 | ) | (13.7 | ) | (12.8 | ) | |||||||
Amortization: | |||||||||||||||
Prior service costs | 0.6 | 0.6 | (1.2 | ) | (1.2 | ) | |||||||||
Net actuarial loss | 1.1 | 1.0 | 4.2 | 3.5 | |||||||||||
Net periodic benefit cost to continuing operations | $ | (2.3 | ) | $ | (2.3 | ) | $ | (0.7 | ) | $ | (0.1 | ) |
|
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | Fair Value (Percent of Grant Date Market Price) | |||||||||||
January 12, 2015 | $ | 7.70 | 2.97 | 58.3% | 0.91% | —% | $ | 11.56 | 150.13% | |||||||||
February 9, 2015 | $ | 6.57 | 2.89 | 58.3% | 0.87% | —% | $ | 9.86 | 150.13% |
Grant Date | Grant Date Market Price | Average Expected Term (Years) | Expected Volatility | Risk-Free Interest Rate | Dividend Yield | Fair Value | ||||||||||
January 12, 2015 | $ | 7.70 | 6.47 | 75.3% | 1.60% | —% | $ | 5.23 |
|
(In Millions) | |||||||
Capital Leases | Operating Leases | ||||||
2015 (October 1 - December 31) | $ | 5.9 | $ | 2.6 | |||
2016 | 23.2 | 7.6 | |||||
2017 | 21.3 | 7.0 | |||||
2018 | 17.2 | 6.4 | |||||
2019 | 9.5 | 4.8 | |||||
2020 and thereafter | 17.5 | 9.9 | |||||
Total minimum lease payments | $ | 94.6 | $ | 38.3 | |||
Amounts representing interest | 19.5 | ||||||
Present value of net minimum lease payments | $ | 75.1 | (1) |
(1) | The total is comprised of $16.9 million and $58.2 million classified as Other current liabilities and Other liabilities, respectively, in the Statements of Unaudited Condensed Consolidated Financial Position at September 30, 2015. |
|
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Environmental | $ | 4.3 | $ | 5.5 | |||
Mine closure | |||||||
LTVSMC | 23.9 | 22.9 | |||||
Operating mines: | |||||||
U.S. Iron Ore | 171.5 | 120.9 | |||||
Asia Pacific Iron Ore | 15.6 | 21.5 | |||||
Total mine closure | 211.0 | 165.3 | |||||
Total environmental and mine closure obligations | 215.3 | 170.8 | |||||
Less current portion | 3.4 | 5.2 | |||||
Long term environmental and mine closure obligations | $ | 211.9 | $ | 165.6 |
(In Millions) | |||||||
September 30, 2015 | December 31, 2014 (1) | ||||||
Asset retirement obligation at beginning of period | $ | 142.4 | $ | 177.6 | |||
Accretion expense | 4.5 | 5.7 | |||||
Exchange rate changes | (1.7 | ) | (2.4 | ) | |||
Revision in estimated cash flows | 41.9 | (38.5 | ) | ||||
Asset retirement obligation at end of period | $ | 187.1 | $ | 142.4 | |||
(1) Represents a 12-month rollforward of our asset retirement obligation at December 31, 2014. |
|
(In Millions) | |||||||||||||||||||||||
September 30, 2015 | December 31, 2014 (1) | ||||||||||||||||||||||
U.S. Iron Ore | Asia Pacific Iron Ore | Total | U.S. Iron Ore | Asia Pacific Iron Ore | Total | ||||||||||||||||||
Beginning Balance | $ | 2.0 | $ | — | $ | 2.0 | $ | 2.0 | $ | 72.5 | $ | 74.5 | |||||||||||
Impairment | — | — | — | — | (73.5 | ) | (73.5 | ) | |||||||||||||||
Impact of foreign currency translation | — | — | — | — | 1.0 | 1.0 | |||||||||||||||||
Ending Balance | $ | 2.0 | $ | — | $ | 2.0 | $ | 2.0 | $ | — | $ | 2.0 | |||||||||||
Accumulated goodwill impairment loss | $ | — | $ | (73.5 | ) | $ | (73.5 | ) | $ | — | $ | (73.5 | ) | $ | (73.5 | ) | |||||||
(1) Represents a 12-month rollforward of our goodwill at December 31, 2014. |
(In Millions) | |||||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||||
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 | $ | 78.2 | $ | (19.3 | ) | $ | 58.9 | $ | 79.2 | $ | (16.5 | ) | $ | 62.7 | ||||||||||
Total intangible assets | $ | 78.2 | $ | (19.3 | ) | $ | 58.9 | $ | 79.2 | $ | (16.5 | ) | $ | 62.7 | |||||||||||
Below-market sales contracts | Other current liabilities | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | $ | (23.0 | ) | $ | — | $ | (23.0 | ) | ||||||||
Below-market sales contracts | Other liabilities | (205.9 | ) | 198.1 | (7.8 | ) | (205.9 | ) | 182.8 | (23.1 | ) | ||||||||||||||
Total below-market sales contracts | $ | (228.9 | ) | $ | 198.1 | $ | (30.8 | ) | $ | (228.9 | ) | $ | 182.8 | $ | (46.1 | ) |
(In Millions) | |||
Amount | |||
Year Ending December 31, | |||
2015 (remaining three months) | $ | 0.9 | |
2016 | 3.7 | ||
2017 | 4.2 | ||
2018 | 4.1 | ||
2019 | 3.0 | ||
2020 | 2.5 | ||
Total | $ | 18.4 |
(In Millions) | |||
Year Ending December 31, | |||
2015 (remaining three months) | $ | 7.7 | |
2016 | 23.1 | ||
Total | $ | 30.8 |
|
(In Millions) | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||||
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: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 21.6 | ||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | — | $ | — | $ | 21.6 | |||||||||||||||
Derivatives not designated as hedging instruments under ASC 815: | |||||||||||||||||||||||
Foreign Exchange Contracts | $ | — | $ | — | $ | — | Other current liabilities | $ | 9.9 | ||||||||||||||
Customer Supply Agreement | Other current assets | 9.8 | Other current assets | 63.2 | — | — | |||||||||||||||||
Provisional Pricing Arrangements | Other current assets | 0.6 | — | Other current liabilities | 0.8 | Other current liabilities | 9.5 | ||||||||||||||||
Total derivatives not designated as hedging instruments under ASC 815 | $ | 10.4 | $ | 63.2 | $ | 0.8 | $ | 19.4 | |||||||||||||||
Total derivatives | $ | 10.4 | $ | 63.2 | $ | 0.8 | $ | 41.0 |
(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, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | 0.1 | $ | (12.6 | ) | Product revenues | $ | (0.1 | ) | $ | 1.6 | ||||||
Australian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Product revenues | (4.3 | ) | — | |||||||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | — | (7.4 | ) | Cost of goods sold and operating expenses | — | (1.0 | ) | ||||||||||
Total | $ | 0.1 | $ | (20.0 | ) | $ | (4.4 | ) | $ | 0.6 | |||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Australian Dollar Foreign Exchange Contracts (hedge designation) | $ | (2.0 | ) | $ | (3.4 | ) | Product revenues | $ | (7.4 | ) | $ | (11.2 | ) | ||||
Australian Dollar Foreign Exchange Contracts (prior to de-designation) | (4.5 | ) | — | Product revenues | (11.1 | ) | — | ||||||||||
Canadian Dollar Foreign Exchange Contracts (hedge designation) | — | (9.2 | ) | Cost of goods sold and operating expenses | — | (7.1 | ) | ||||||||||
Canadian Dollar Foreign Exchange Contracts (prior to de-designation) | — | — | Cost of goods sold and operating expenses | — | (0.5 | ) | |||||||||||
$ | (6.5 | ) | $ | (12.6 | ) | $ | (18.5 | ) | $ | (18.8 | ) |
(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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Foreign Exchange Contracts | Other non-operating income (expense) (1) | $ | (1.1 | ) | $ | — | $ | (3.6 | ) | $ | (3.3 | ) | ||||
Foreign Exchange Contracts | Product revenues | (2.1 | ) | — | (11.8 | ) | — | |||||||||
Commodity Contracts | Cost of goods sold and operating expenses | — | — | (3.4 | ) | — | ||||||||||
Customer Supply Agreement | Product revenues | 11.6 | 62.6 | 22.1 | 124.6 | |||||||||||
Provisional Pricing Arrangements | Product revenues | 7.6 | 2.3 | (0.2 | ) | (17.9 | ) | |||||||||
$ | 16.0 | $ | 64.9 | $ | 3.1 | $ | 103.4 |
(1) | At September 30, 2014, the location of the Gain (Loss) Recognized in Income on Derivative for Foreign Exchange Contracts was Cost of goods sold and operating expenses. |
|
(In Millions) | ||||||||||||||||||
Canadian Operations | ||||||||||||||||||
North American Coal | Eastern Canadian Iron Ore | Other | Total Canadian Operations | Total of Discontinued Operations | ||||||||||||||
Statements of Unaudited Condensed Consolidated Operations | ||||||||||||||||||
Loss from Discontinued Operations, net of tax | QTD September 30, 2015 | $ | (29.8 | ) | $ | (14.1 | ) | $ | — | $ | (14.1 | ) | $ | (43.9 | ) | |||
Loss from Discontinued Operations, net of tax | QTD September 30, 2014 | $ | (579.7 | ) | $ | (5,782.5 | ) | $ | (250.8 | ) | $ | (6,033.3 | ) | $ | (6,613.0 | ) | ||
Loss from Discontinued Operations, net of tax | YTD September 30, 2015 | $ | (137.0 | ) | $ | (731.9 | ) | $ | (0.1 | ) | $ | (732.0 | ) | $ | (869.0 | ) | ||
Loss from Discontinued Operations, net of tax | YTD September 30, 2014 | $ | (643.6 | ) | $ | (5,930.4 | ) | $ | (255.8 | ) | $ | (6,186.2 | ) | $ | (6,829.8 | ) | ||
Statements of Unaudited Condensed Consolidated Financial Position | ||||||||||||||||||
Short-term assets of discontinued operations | As of September 30, 2015 | $ | 141.4 | $ | — | $ | — | $ | — | $ | 141.4 | |||||||
Long-term assets of discontinued operations | As of September 30, 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Short-term liabilities of discontinued operations | As of September 30, 2015 | $ | 182.2 | $ | — | $ | — | $ | — | $ | 182.2 | |||||||
Long-term liabilities of discontinued operations | As of September 30, 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Short-term assets of discontinued operations | As of December 31, 2014 | $ | 143.8 | $ | 183.5 | $ | 3.3 | $ | 186.8 | $ | 330.6 | |||||||
Long-term assets of discontinued operations | As of December 31, 2014 | $ | 130.4 | $ | 256.0 | $ | 13.7 | $ | 269.7 | $ | 400.1 | |||||||
Short-term liabilities of discontinued operations | As of December 31, 2014 | $ | 81.3 | $ | 316.3 | $ | 3.0 | $ | 319.3 | $ | 400.6 | |||||||
Long-term liabilities of discontinued operations | As of December 31, 2014 | $ | 125.9 | $ | 304.6 | $ | 5.6 | $ | 310.2 | $ | 436.1 | |||||||
Non-Cash Operating and Investing Activities | ||||||||||||||||||
Depreciation, depletion and amortization: | YTD September 30, 2015 | $ | 3.2 | $ | — | $ | — | $ | — | $ | 3.2 | |||||||
Purchase of property, plant and equipment | YTD September 30, 2015 | $ | 13.1 | $ | — | $ | — | $ | — | $ | 13.1 | |||||||
Impairment of goodwill and other long-lived assets | YTD September 30, 2015 | $ | 73.4 | $ | — | $ | — | $ | — | $ | 73.4 | |||||||
Depreciation, depletion and amortization: | YTD September 30, 2014 | $ | 92.1 | $ | 126.4 | $ | 0.3 | $ | 126.7 | $ | 218.8 | |||||||
Purchase of property, plant and equipment | YTD September 30, 2014 | $ | 25.8 | $ | 160.9 | $ | — | $ | 160.9 | $ | 186.7 | |||||||
Impairment of goodwill and other long-lived assets | YTD September 30, 2014 | $ | — | $ | 6,307.3 | $ | 259.5 | $ | 6,566.8 | $ | 6,566.8 |
(In Millions) | ||||||||
Assets and Liabilities of Discontinued Operations | September 30, 2015 | December 31, 2014 | ||||||
Accounts receivable, net | $ | 35.8 | $ | 44.8 | ||||
Inventories | 21.4 | 50.3 | ||||||
Supplies and other inventories | 28.0 | 28.2 | ||||||
Other current assets | 24.1 | 20.5 | ||||||
Property, plant and equipment, net | 31.3 | 94.7 | ||||||
Other non-current assets | 0.8 | 35.7 | ||||||
Total assets of discontinued operations | $ | 141.4 | $ | 274.2 | ||||
Accounts payable | $ | 18.6 | $ | 22.4 | ||||
Accrued liabilities | 16.6 | 27.9 | ||||||
Other current liabilities | 19.7 | 31.0 | ||||||
Pension and postemployment benefit liabilities1 | 59.5 | 55.8 | ||||||
Environmental and mine closure obligations | 35.4 | 33.9 | ||||||
Other liabilities | 32.4 | 36.2 | ||||||
Total liabilities of discontinued operations | $ | 182.2 | $ | 207.2 | ||||
1 This does not include a liability of approximately $330 million, which is the most recent estimate of Pinnacle and Oak Grove’s combined share of the underfunded liability under the UMWA 1974 Pension Plan. |
(In Millions) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Loss from Discontinued Operations | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues from product sales and services | $ | 78.8 | $ | 170.5 | $ | 338.1 | $ | 515.8 | ||||||||
Cost of goods sold and operating expenses | (102.9 | ) | (194.7 | ) | (377.2 | ) | (641.2 | ) | ||||||||
Sales margin | (24.1 | ) | (24.2 | ) | (39.1 | ) | (125.4 | ) | ||||||||
Other operating expense | (7.4 | ) | (5.6 | ) | (25.7 | ) | (15.2 | ) | ||||||||
Other expense | (0.4 | ) | (0.9 | ) | (1.4 | ) | (1.8 | ) | ||||||||
Loss from discontinued operations before income taxes | (31.9 | ) | (30.7 | ) | (66.2 | ) | (142.4 | ) | ||||||||
Impairment of long-lived assets | — | (827.8 | ) | (73.4 | ) | (827.8 | ) | |||||||||
Income tax benefit | 2.1 | 278.8 | 2.6 | 326.6 | ||||||||||||
Loss from discontinued operations, net of tax | $ | (29.8 | ) | $ | (579.7 | ) | $ | (137.0 | ) | $ | (643.6 | ) |
(In Millions) | ||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||
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: | ||||||||||||||||||||
Other long-lived assets - Property, plant and equipment and Mineral rights: North American Coal operating unit | $ | — | $ | — | $ | 20.4 | $ | 20.4 | $ | 73.4 | ||||||||||
$ | — | $ | — | $ | 20.4 | $ | 20.4 | $ | 73.4 |
(In Millions) | ||||
Assets and Liabilities of Discontinued Operations | December 31, 2014 | |||
Cash and cash equivalents | $ | 19.7 | ||
Accounts receivable, net | 37.9 | |||
Inventories | 16.3 | |||
Supplies and other inventories | 48.5 | |||
Income tax receivable | 20.1 | |||
Other current assets | 44.3 | |||
Property, plant and equipment, net | 249.8 | |||
Other non-current assets | 19.9 | |||
Total Assets | $ | 456.5 | ||
Accounts payable | $ | 83.6 | ||
Accrued expenses | 200.0 | |||
Other current liabilities | 35.7 | |||
Pension and postemployment benefit liabilities | 79.8 | |||
Environmental and mine closure obligations | 56.5 | |||
Other liabilities | 173.9 | |||
Total Liabilities | $ | 629.5 |
(In Millions) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Loss from Discontinued Operations | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues from product sales and services | $ | — | $ | 148.0 | $ | 11.3 | $ | 480.3 | ||||||||
Cost of goods sold and operating expenses | — | (224.7 | ) | (11.1 | ) | (645.2 | ) | |||||||||
Eliminations with continuing operations | — | (27.6 | ) | — | (56.6 | ) | ||||||||||
Sales margin | — | (104.3 | ) | 0.2 | (221.5 | ) | ||||||||||
Other operating expense | — | (87.4 | ) | (33.8 | ) | (200.4 | ) | |||||||||
Other expense | — | (1.5 | ) | (1.0 | ) | (4.5 | ) | |||||||||
Loss from discontinued operations before income taxes | — | (193.2 | ) | (34.6 | ) | (426.4 | ) | |||||||||
Loss from deconsolidation | (13.4 | ) | — | (697.4 | ) | — | ||||||||||
Impairment of long-lived assets | — | (6,566.8 | ) | — | (6,566.8 | ) | ||||||||||
Income tax benefit (expense) | (0.7 | ) | 726.7 | — | 807.0 | |||||||||||
Loss from discontinued operations, net of tax | $ | (14.1 | ) | $ | (6,033.3 | ) | $ | (732.0 | ) | $ | (6,186.2 | ) |
(In Millions) | ||||||||||||||||||||
September 30, 2015 | ||||||||||||||||||||
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: | ||||||||||||||||||||
Loans to and accounts receivables from the Canadian Entities | $ | — | $ | — | $ | 84.5 | $ | 84.5 | $ | 494.3 | ||||||||||
Liabilities: | ||||||||||||||||||||
Contingent liabilities | $ | — | $ | — | $ | 142.4 | $ | 142.4 | $ | 203.1 |
(In Millions) | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2015 | 2015 | |||||||
Investment impairment on deconsolidation1 | $ | (13.9 | ) | $ | (494.3 | ) | ||
Contingent liabilities | 0.5 | (203.1 | ) | |||||
Total loss from deconsolidation | $ | (13.4 | ) | $ | (697.4 | ) | ||
1 Includes the adjustment to fair value of our remaining interest in the Canadian Entities. |
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(In Millions) | |||||||
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Capital additions (1) | $ | 69.0 | $ | 186.0 | |||
Cash paid for capital expenditures | 57.9 | 233.2 | |||||
Difference | $ | 11.1 | $ | (47.2 | ) | ||
Non-cash accruals | $ | 10.4 | $ | (57.1 | ) | ||
Capital leases | 0.7 | 9.9 | |||||
Total | $ | 11.1 | $ | (47.2 | ) |
(1) | Includes capital additions of $46.6 million and $22.4 million related to continuing operations and discontinued operations, respectively, for the nine months ended September 30, 2015. Includes capital additions of $49.0 million and $137.0 million related to continuing operations and discontinued operations, respectively, for the nine months ended September 30, 2014. |
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Mine | Cliffs Natural Resources | ArcelorMittal | U.S. Steel Corporation | |||||||
Empire | 79.0 | % | 21.0 | % | — | |||||
Tilden | 85.0 | % | — | 15.0 | % | |||||
Hibbing | 23.0 | % | 62.3 | % | 14.7 | % |
(In Millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Product revenues from related parties | $ | 208.0 | $ | 285.2 | $ | 468.0 | $ | 625.4 | |||||||
Total product revenues | 542.5 | 901.9 | 1,399.9 | 2,161.7 | |||||||||||
Related party product revenue as a percent of total product revenue | 38.3 | % | 31.6 | % | 33.4 | % | 28.9 | % |
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(In Millions, Except Per Share Amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income (Loss) from Continuing Operations | $ | 49.9 | $ | (274.2 | ) | $ | 178.5 | $ | (113.6 | ) | |||||
Loss (Income) from Continuing Operations Attributable to Noncontrolling Interest | 4.6 | (2.5 | ) | (6.2 | ) | (22.4 | ) | ||||||||
Net Income (Loss) from Continuing Operations Attributable to Cliffs Shareholders | $ | 54.5 | $ | (276.7 | ) | $ | 172.3 | $ | (136.0 | ) | |||||
Loss from Discontinued Operations, net of tax | (43.9 | ) | (5,602.9 | ) | (861.3 | ) | (5,803.0 | ) | |||||||
Net Income (Loss) Attributable to Cliffs Shareholders | $ | 10.6 | $ | (5,879.6 | ) | $ | (689.0 | ) | $ | (5,939.0 | ) | ||||
Preferred Stock Dividends | (25.6 | ) | (12.8 | ) | (38.4 | ) | (38.4 | ) | |||||||
Net Loss Attributable to Cliffs Common Shareholders | $ | (15.0 | ) | $ | (5,892.4 | ) | $ | (727.4 | ) | $ | (5,977.4 | ) | |||
Weighted Average Number of Shares: | |||||||||||||||
Basic | 153.2 | 153.1 | 153.2 | 153.1 | |||||||||||
Depositary Shares | — | — | — | — | |||||||||||
Employee Stock Plans | — | — | — | — | |||||||||||
Diluted | 153.2 | 153.1 | 153.2 | 153.1 | |||||||||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Basic: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | (1.89 | ) | $ | 0.87 | $ | (1.14 | ) | |||||
Discontinued operations | (0.29 | ) | (36.60 | ) | (5.62 | ) | (37.91 | ) | |||||||
$ | (0.10 | ) | $ | (38.49 | ) | $ | (4.75 | ) | $ | (39.05 | ) | ||||
Earnings (Loss) per Common Share Attributable to Cliffs Common Shareholders - Diluted: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | (1.89 | ) | $ | 0.87 | $ | (1.14 | ) | |||||
Discontinued operations | (0.29 | ) | (36.60 | ) | (5.62 | ) | (37.91 | ) | |||||||
$ | (0.10 | ) | $ | (38.49 | ) | $ | (4.75 | ) | $ | (39.05 | ) |
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