Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v2.4.1.9
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
SEGMENT REPORTING
NOTE 2 - SEGMENT REPORTING
Our continuing operations are organized and managed according to product category and geographic location: U.S. Iron Ore and Asia Pacific Iron Ore. The U.S. Iron Ore segment is comprised of our interests in five U.S. mines that provide iron ore to the integrated steel industry. The Asia Pacific Iron Ore segment is located in Western Australia and provides iron ore to the seaborne market for Asian steel producers. There were no intersegment product revenues in the first quarters of 2015 or 2014.
We have historically evaluated segment performance based on sales margin, defined as revenues less cost of goods sold, and operating expenses identifiable to each segment. Additionally, beginning in the third quarter of 2014, concurrent with the change in control on July 29, 2014, management began to evaluate segment performance based on EBITDA, defined as Net Loss before interest, income taxes, depreciation, depletion and amortization, and Adjusted EBITDA, defined as EBITDA excluding certain items such as impacts of discontinued operations, foreign currency remeasurement, severance recorded in Selling, general and administrative expenses, or SG&A, extinguishment of debt and intersegment corporate allocations of SG&A costs. Management uses and believes that investors benefit from referring to these measures in evaluating operating and financial results, as well as in planning, forecasting and analyzing future periods as these financial measures approximate the cash flows associated with the operational earnings.
The following tables present a summary of our reportable segments for the three months ended March 31, 2015 and 2014, including a reconciliation of segment sales margin to Income from Continuing Operations Before Income Taxes and Equity Loss from Ventures and a reconciliation of Net Loss to EBITDA and Adjusted EBITDA:
 
(In Millions)
 
Three Months Ended
March 31,
 
2015
 
2014
Revenues from product sales and services:
 
 
 
 
 
 
 
U.S. Iron Ore
$
311.8

 
70
%
 
$
361.3

 
59
%
Asia Pacific Iron Ore
134.2

 
30
%
 
254.2

 
41
%
Total revenues from product sales and services
$
446.0

 
100
%
 
$
615.5

 
100
%
 
 
 
 
 
 
 
 
Sales margin:
 
 
 
 
 
 
 
U.S. Iron Ore
$
80.0

 
 
 
$
95.0

 
 
Asia Pacific Iron Ore
0.8

 
 
 
66.3

 
 
Eliminations with Discontinued Operations
—

 
 
 
28.7

 
 
Sales margin
80.8

 
 
 
190.0

 
 
Other operating income
(8.9
)
 
 
 
(50.8
)
 
 
Other income (expense)
270.0

 
 
 
(39.6
)
 
 
Income from continuing operations before income taxes and equity loss from ventures
$
341.9

 
 
 
$
99.6

 
 


 
(In Millions)
 
Three Months Ended
March 31,
 
2015
 
2014
Net Loss
$
(761.7
)
 
$
(70.7
)
Less:
 
 
 
Interest expense, net
(44.2
)
 
(42.7
)
Income tax benefit (expense)
(175.0
)
 
21.8

Depreciation, depletion and amortization
(33.0
)
 
(141.1
)
EBITDA
$
(509.5
)
 
$
91.3

Less:
 
 
 
Impact of discontinued operations
$
(924.1
)
 
$
(118.1
)
North American Coal operations impact
(5.5
)
 
18.2

Gain on extinguishment of debt
313.7

 
—

Severance in SG&A
(1.5
)
 
(6.0
)
Foreign exchange remeasurement
13.5

 
(11.4
)
Adjusted EBITDA
$
94.4

 
$
208.6

 
 
 
 
EBITDA:
 
 
 
U.S. Iron Ore
$
101.6

 
$
123.6

Asia Pacific Iron Ore
18.0

 
85.3

Other
(629.1
)
 
(117.6
)
Total EBITDA
$
(509.5
)
 
$
91.3

 
 
 
 
Adjusted EBITDA:
 
 
 
U.S. Iron Ore
$
105.1

 
$
128.7

Asia Pacific Iron Ore
5.7

 
99.1

Other
(16.4
)
 
(19.2
)
Total Adjusted EBITDA
$
94.4

 
$
208.6

 
(In Millions)
 
Three Months Ended
March 31,
 
2015
 
2014
Depreciation, depletion and amortization:
 
 
 
U.S. Iron Ore
$
21.7

 
$
28.7

Asia Pacific Iron Ore
6.3

 
39.1

Other
1.8

 
1.9

Total depreciation, depletion and amortization
$
29.8

 
$
69.7

 
 
 
 
Capital additions1:
 
 
 
U.S. Iron Ore
$
9.5

 
$
14.9

Asia Pacific Iron Ore
3.4

 
3.2

Other
0.4

 
0.9

Total capital additions
$
13.3

 
$
19.0

                                         
1    Includes capital lease additions and non-cash accruals. Refer to NOTE 17 - CASH FLOW INFORMATION.
A summary of assets by segment is as follows:
 
(In Millions)
 
March 31,
2015
 
December 31,
2014
Assets:
 
 
 
U.S. Iron Ore
$
1,550.1

 
$
1,464.9

Asia Pacific Iron Ore
250.6

 
274.6

Other
31.2

 
147.0

Total segment assets
1,831.9

 
1,886.5

Corporate
673.5

 
546.8

Assets of Discontinued Operations
197.2

 
730.7

Total assets
$
2,702.6

 
$
3,164.0