RELATED PARTIES |
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| RELATED PARTIES |
NOTE 16 - RELATED PARTIES
Two of our four operating U.S. iron ore mines and our indefinitely-idled Empire mine are co-owned joint ventures with companies that are integrated steel producers or their subsidiaries. We are the manager of each of the mines we co-own and rely on our joint venture partners to make their required capital contributions and to pay for their share of the iron ore pellets that we produce. One of the joint venture partners is also our customer. The following is a summary of the mine ownership of these iron ore mines at March 31, 2017:
ArcelorMittal has a unilateral right to put its interest in the Empire mine to us but has not exercised this right to date. Furthermore, as part of a 2014 extension agreement between us and ArcelorMittal, which amended certain terms of the Empire partnership agreement, certain minimum distributions of the partners’ equity amounts were required to be made on a quarterly basis beginning in the first quarter of 2015 and continued through January 2017. The partnership dissolved on December 31, 2016, and the partners are in discussion regarding distribution of the remaining assets and/or equity interest, if any, in the partnership. We paid $8.7 million in January 2017 related to 2016 distributions. During the three months ended March 31, 2016, we recorded distributions of $17.0 million under this agreement and paid distributions of $11.1 million related to 2015 distributions.
Product revenues from related parties were as follows:
Amounts due from related parties recorded in Accounts receivable, net were $9.1 million and $46.9 million at March 31, 2017 and December 31, 2016, respectively. Amounts including a customer supply agreement and provisional pricing arrangements recorded in Other current assets were $53.8 million and $26.8 million at March 31, 2017 and December 31, 2016, respectively. Additionally, at December 31, 2016 we had $8.7 million recorded in Other current liabilities, including provisional pricing arrangements and liabilities to related parties.
A supply agreement with one of our customers includes provisions for supplemental revenue or refunds based on the customer’s annual steel pricing for the year the product is consumed in the customer’s blast furnace. The supplemental pricing is characterized as a freestanding derivative. Refer to NOTE 13 - DERIVATIVE INSTRUMENTS for further information.
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