| SUPPLEMENTARY GUARANTOR INFORMATION |
NOTE 23 - SUPPLEMENTARY GUARANTOR INFORMATION
The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Certain of our subsidiaries have guaranteed the obligations under the $1.075 billion 5.75% 2025 Senior Notes issued by Cleveland-Cliffs Inc. See NOTE 5 - DEBT AND CREDIT FACILITIES for further information.
The following presents the condensed consolidating financial information for: (i) the Parent Company and the Issuer of the guaranteed obligations (Cleveland-Cliffs Inc.); (ii) the Guarantor subsidiaries, on a combined basis; (iii) the non-guarantor subsidiaries, on a combined basis; (iv) consolidating eliminations; and (v) Cleveland-Cliffs Inc. and Subsidiaries on a consolidated basis. Each Guarantor subsidiary is 100% owned by the Parent Company as of December 31, 2017. The condensed consolidating financial information is presented as if the Guarantor structure at December 31, 2017 existed for all years presented. As a result, the Guarantor subsidiaries within the condensed consolidating financial information as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 include results of subsidiaries that were previously less than wholly-owned and were historically non-guarantors until 100% ownership was obtained.
Each of the Guarantor subsidiaries fully and unconditionally guarantee, on a joint and several basis, the obligations of Cleveland-Cliffs Inc. under the $1.075 billion 5.75% 2025 Senior Notes. The guarantee of a Guarantor subsidiary will be automatically and unconditionally released and discharged, and such Guarantor subsidiary’s obligations under the guarantee and the related indenture governing the $1.075 billion 5.75% 2025 Senior Notes (the “Indenture”) will be automatically and unconditionally released and discharged, upon:
(a) any sale, exchange, transfer or disposition of such Guarantor subsidiary (by merger, consolidation, or the sale of) or the capital stock of such Guarantor subsidiary after which the applicable Guarantor subsidiary is no longer a subsidiary of the Company or the sale of all or substantially all of such Guarantor subsidiary’s assets (other than by lease);
(b) upon designation of any Guarantor subsidiary as an “excluded subsidiary” (as defined in the Indenture); and
(c) upon defeasance or satisfaction and discharge of the Indenture.
Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements. The accompanying condensed consolidating financial information has been presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for the subsidiaries’ cumulative results of operations, capital contributions and distributions, and other changes in equity. Elimination entries include consolidating and eliminating entries for investments in subsidiaries, and intra-entity activity and balances.
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Financial Position |
As of December 31, 2017 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
948.9 |
|
|
$ |
2.1 |
|
|
$ |
56.7 |
|
|
$ |
— |
|
|
$ |
1,007.7 |
|
Accounts receivable, net |
4.5 |
|
|
102.9 |
|
|
33.9 |
|
|
(0.7 |
) |
|
140.6 |
|
Inventories |
— |
|
|
138.4 |
|
|
45.0 |
|
|
— |
|
|
183.4 |
|
Supplies and other inventories |
— |
|
|
88.8 |
|
|
5.1 |
|
|
— |
|
|
93.9 |
|
Derivative assets |
— |
|
|
37.9 |
|
|
1.5 |
|
|
— |
|
|
39.4 |
|
Loans to and accounts receivables from the Canadian Entities |
44.7 |
|
|
6.9 |
|
|
— |
|
|
— |
|
|
51.6 |
|
Other current assets |
16.4 |
|
|
7.5 |
|
|
4.1 |
|
|
— |
|
|
28.0 |
|
TOTAL CURRENT ASSETS |
1,014.5 |
|
|
384.5 |
|
|
146.3 |
|
|
(0.7 |
) |
|
1,544.6 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
17.5 |
|
|
959.0 |
|
|
74.5 |
|
|
— |
|
|
1,051.0 |
|
INCOME TAX RECEIVABLE |
235.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
235.3 |
|
INVESTMENT IN SUBSIDIARIES |
1,024.3 |
|
|
29.9 |
|
|
— |
|
|
(1,054.2 |
) |
|
— |
|
LONG-TERM INTERCOMPANY NOTES |
— |
|
|
— |
|
|
242.0 |
|
|
(242.0 |
) |
|
— |
|
OTHER NON-CURRENT ASSETS |
7.8 |
|
|
93.0 |
|
|
21.7 |
|
|
— |
|
|
122.5 |
|
TOTAL ASSETS |
$ |
2,299.4 |
|
|
$ |
1,466.4 |
|
|
$ |
484.5 |
|
|
$ |
(1,296.9 |
) |
|
$ |
2,953.4 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
7.1 |
|
|
$ |
89.7 |
|
|
$ |
31.6 |
|
|
$ |
(0.7 |
) |
|
$ |
127.7 |
|
Accrued employment costs |
13.7 |
|
|
38.9 |
|
|
3.5 |
|
|
— |
|
|
56.1 |
|
State and local taxes payable |
— |
|
|
30.0 |
|
|
0.2 |
|
|
— |
|
|
30.2 |
|
Accrued expenses |
5.3 |
|
|
13.2 |
|
|
15.2 |
|
|
— |
|
|
33.7 |
|
Accrued interest |
31.4 |
|
|
— |
|
|
— |
|
|
— |
|
|
31.4 |
|
Accrued royalties |
— |
|
|
7.8 |
|
|
9.5 |
|
|
— |
|
|
17.3 |
|
Contingent claims |
55.6 |
|
|
— |
|
|
— |
|
|
— |
|
|
55.6 |
|
Partnership distribution payable |
— |
|
|
44.2 |
|
|
— |
|
|
— |
|
|
44.2 |
|
Other current liabilities |
2.1 |
|
|
33.5 |
|
|
20.4 |
|
|
— |
|
|
56.0 |
|
TOTAL CURRENT LIABILITIES |
115.2 |
|
|
257.3 |
|
|
80.4 |
|
|
(0.7 |
) |
|
452.2 |
|
POSTEMPLOYMENT BENEFIT LIABILITIES |
|
|
|
|
|
|
|
|
|
Pensions |
59.2 |
|
|
403.6 |
|
|
(240.0 |
) |
|
— |
|
|
222.8 |
|
Other postretirement benefits |
7.2 |
|
|
27.0 |
|
|
0.7 |
|
|
— |
|
|
34.9 |
|
TOTAL POSTEMPLOYMENT BENEFIT LIABILITIES |
66.4 |
|
|
430.6 |
|
|
(239.3 |
) |
|
— |
|
|
257.7 |
|
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS |
— |
|
|
140.6 |
|
|
55.9 |
|
|
— |
|
|
196.5 |
|
LONG-TERM DEBT |
2,304.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,304.2 |
|
LONG-TERM INTERCOMPANY NOTES |
242.0 |
|
|
— |
|
|
— |
|
|
(242.0 |
) |
|
— |
|
OTHER LIABILITIES |
15.7 |
|
|
147.2 |
|
|
24.0 |
|
|
— |
|
|
186.9 |
|
TOTAL LIABILITIES |
2,743.5 |
|
|
975.7 |
|
|
(79.0 |
) |
|
(242.7 |
) |
|
3,397.5 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
TOTAL CLIFFS SHAREHOLDERS' DEFICIT |
(444.1 |
) |
|
490.7 |
|
|
563.3 |
|
|
(1,054.2 |
) |
|
(444.3 |
) |
NONCONTROLLING INTEREST |
— |
|
|
— |
|
|
0.2 |
|
|
— |
|
|
0.2 |
|
TOTAL DEFICIT |
(444.1 |
) |
|
490.7 |
|
|
563.5 |
|
|
(1,054.2 |
) |
|
(444.1 |
) |
TOTAL LIABILITIES AND DEFICIT |
$ |
2,299.4 |
|
|
$ |
1,466.4 |
|
|
$ |
484.5 |
|
|
$ |
(1,296.9 |
) |
|
$ |
2,953.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Financial Position |
As of December 31, 2016 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
283.4 |
|
|
$ |
2.5 |
|
|
$ |
37.5 |
|
|
$ |
— |
|
|
$ |
323.4 |
|
Accounts receivable, net |
4.5 |
|
|
59.3 |
|
|
65.7 |
|
|
(0.8 |
) |
|
128.7 |
|
Inventories |
— |
|
|
137.0 |
|
|
41.4 |
|
|
— |
|
|
178.4 |
|
Supplies and other inventories |
— |
|
|
86.4 |
|
|
5.0 |
|
|
— |
|
|
91.4 |
|
Derivative assets |
— |
|
|
31.7 |
|
|
1.4 |
|
|
— |
|
|
33.1 |
|
Loans to and accounts receivables from the Canadian Entities |
41.7 |
|
|
6.9 |
|
|
— |
|
|
— |
|
|
48.6 |
|
Other current assets |
8.6 |
|
|
8.2 |
|
|
4.2 |
|
|
— |
|
|
21.0 |
|
TOTAL CURRENT ASSETS |
338.2 |
|
|
332.0 |
|
|
155.2 |
|
|
(0.8 |
) |
|
824.6 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
21.4 |
|
|
937.7 |
|
|
25.3 |
|
|
— |
|
|
984.4 |
|
INVESTMENT IN SUBSIDIARIES |
882.4 |
|
|
24.6 |
|
|
— |
|
|
(907.0 |
) |
|
— |
|
LONG-TERM INTERCOMPANY NOTES |
— |
|
|
— |
|
|
197.0 |
|
|
(197.0 |
) |
|
— |
|
OTHER NON-CURRENT ASSETS |
11.0 |
|
|
94.1 |
|
|
9.8 |
|
|
— |
|
|
114.9 |
|
TOTAL ASSETS |
$ |
1,253.0 |
|
|
$ |
1,388.4 |
|
|
$ |
387.3 |
|
|
$ |
(1,104.8 |
) |
|
$ |
1,923.9 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
1.6 |
|
|
$ |
92.6 |
|
|
$ |
14.2 |
|
|
$ |
(0.8 |
) |
|
$ |
107.6 |
|
Accrued employment costs |
15.6 |
|
|
34.6 |
|
|
5.9 |
|
|
— |
|
|
56.1 |
|
State and local taxes payable |
— |
|
|
28.1 |
|
|
0.2 |
|
|
— |
|
|
28.3 |
|
Accrued expenses |
7.6 |
|
|
14.4 |
|
|
19.1 |
|
|
— |
|
|
41.1 |
|
Accrued interest |
40.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
40.2 |
|
Accrued royalties |
— |
|
|
13.0 |
|
|
13.2 |
|
|
— |
|
|
26.2 |
|
Partnership distribution payable |
— |
|
|
8.7 |
|
|
— |
|
|
— |
|
|
8.7 |
|
Other current liabilities |
23.0 |
|
|
35.3 |
|
|
24.6 |
|
|
— |
|
|
82.9 |
|
TOTAL CURRENT LIABILITIES |
88.0 |
|
|
226.7 |
|
|
77.2 |
|
|
(0.8 |
) |
|
391.1 |
|
POSTEMPLOYMENT BENEFIT LIABILITIES |
|
|
|
|
|
|
|
|
|
Pensions |
56.9 |
|
|
397.4 |
|
|
(208.6 |
) |
|
— |
|
|
245.7 |
|
Other postretirement benefits |
7.6 |
|
|
26.5 |
|
|
0.7 |
|
|
— |
|
|
34.8 |
|
TOTAL POSTEMPLOYMENT BENEFIT LIABILITIES |
64.5 |
|
|
423.9 |
|
|
(207.9 |
) |
|
— |
|
|
280.5 |
|
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS |
— |
|
|
153.9 |
|
|
40.0 |
|
|
— |
|
|
193.9 |
|
LONG-TERM DEBT |
2,175.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,175.1 |
|
LONG-TERM INTERCOMPANY NOTES |
197.0 |
|
|
— |
|
|
— |
|
|
(197.0 |
) |
|
— |
|
OTHER LIABILITIES |
58.9 |
|
|
118.8 |
|
|
36.1 |
|
|
— |
|
|
213.8 |
|
TOTAL LIABILITIES |
2,583.5 |
|
|
923.3 |
|
|
(54.6 |
) |
|
(197.8 |
) |
|
3,254.4 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
TOTAL CLIFFS SHAREHOLDERS' DEFICIT |
(1,330.5 |
) |
|
331.5 |
|
|
441.7 |
|
|
(907.0 |
) |
|
(1,464.3 |
) |
NONCONTROLLING INTEREST |
— |
|
|
133.6 |
|
|
0.2 |
|
|
— |
|
|
133.8 |
|
TOTAL DEFICIT |
(1,330.5 |
) |
|
465.1 |
|
|
441.9 |
|
|
(907.0 |
) |
|
(1,330.5 |
) |
TOTAL LIABILITIES AND DEFICIT |
$ |
1,253.0 |
|
|
$ |
1,388.4 |
|
|
$ |
387.3 |
|
|
$ |
(1,104.8 |
) |
|
$ |
1,923.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the Year Ended December 31, 2017 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
REVENUES FROM PRODUCT SALES AND SERVICES |
|
|
|
|
|
|
|
|
|
Product |
$ |
— |
|
|
$ |
1,644.6 |
|
|
$ |
444.6 |
|
|
$ |
— |
|
|
$ |
2,089.2 |
|
Freight and venture partners' cost reimbursements |
— |
|
|
221.4 |
|
|
19.6 |
|
|
— |
|
|
241.0 |
|
|
— |
|
|
1,866.0 |
|
|
464.2 |
|
|
— |
|
|
2,330.2 |
|
COST OF GOODS SOLD AND OPERATING EXPENSES |
— |
|
|
(1,400.6 |
) |
|
(427.9 |
) |
|
— |
|
|
(1,828.5 |
) |
SALES MARGIN |
— |
|
|
465.4 |
|
|
36.3 |
|
|
— |
|
|
501.7 |
|
OTHER OPERATING INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
(81.4 |
) |
|
(24.7 |
) |
|
0.3 |
|
|
— |
|
|
(105.8 |
) |
Miscellaneous - net |
(2.2 |
) |
|
12.3 |
|
|
17.6 |
|
|
— |
|
|
27.7 |
|
|
(83.6 |
) |
|
(12.4 |
) |
|
17.9 |
|
|
— |
|
|
(78.1 |
) |
OPERATING INCOME (LOSS) |
(83.6 |
) |
|
453.0 |
|
|
54.2 |
|
|
— |
|
|
423.6 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
(126.8 |
) |
|
(1.0 |
) |
|
(4.2 |
) |
|
— |
|
|
(132.0 |
) |
Loss on extinguishment/restructuring of debt |
(165.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(165.4 |
) |
Other non-operating income |
0.1 |
|
|
3.1 |
|
|
— |
|
|
— |
|
|
3.2 |
|
|
(292.1 |
) |
|
2.1 |
|
|
(4.2 |
) |
|
— |
|
|
(294.2 |
) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(375.7 |
) |
|
455.1 |
|
|
50.0 |
|
|
— |
|
|
129.4 |
|
INCOME TAX BENEFIT (EXPENSE) |
251.4 |
|
|
1.3 |
|
|
(0.3 |
) |
|
— |
|
|
252.4 |
|
EQUITY IN INCOME OF SUBSIDIARIES |
512.6 |
|
|
11.8 |
|
|
— |
|
|
(524.4 |
) |
|
— |
|
INCOME FROM CONTINUING OPERATIONS |
388.3 |
|
|
468.2 |
|
|
49.7 |
|
|
(524.4 |
) |
|
381.8 |
|
LOSS (INCOME) FROM DISCONTINUED OPERATIONS, net of tax |
(21.3 |
) |
|
1.7 |
|
|
0.9 |
|
|
— |
|
|
(18.7 |
) |
NET INCOME |
367.0 |
|
|
469.9 |
|
|
50.6 |
|
|
(524.4 |
) |
|
363.1 |
|
LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST |
— |
|
|
3.9 |
|
|
— |
|
|
— |
|
|
3.9 |
|
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
367.0 |
|
|
$ |
473.8 |
|
|
$ |
50.6 |
|
|
$ |
(524.4 |
) |
|
$ |
367.0 |
|
OTHER COMPREHENSIVE INCOME (LOSS) |
(4.0 |
) |
|
12.8 |
|
|
(5.2 |
) |
|
(7.6 |
) |
|
(4.0 |
) |
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
363.0 |
|
|
$ |
486.6 |
|
|
$ |
45.4 |
|
|
$ |
(532.0 |
) |
|
$ |
363.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the Year Ended December 31, 2016 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
REVENUES FROM PRODUCT SALES AND SERVICES |
|
|
|
|
|
|
|
|
|
Product |
$ |
— |
|
|
$ |
1,379.6 |
|
|
$ |
533.9 |
|
|
$ |
— |
|
|
$ |
1,913.5 |
|
Freight and venture partners' cost reimbursements |
— |
|
|
174.9 |
|
|
20.6 |
|
|
— |
|
|
195.5 |
|
|
— |
|
|
1,554.5 |
|
|
554.5 |
|
|
— |
|
|
2,109.0 |
|
COST OF GOODS SOLD AND OPERATING EXPENSES |
— |
|
|
(1,278.8 |
) |
|
(440.9 |
) |
|
— |
|
|
(1,719.7 |
) |
SALES MARGIN |
— |
|
|
275.7 |
|
|
113.6 |
|
|
— |
|
|
389.3 |
|
OTHER OPERATING INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
(97.9 |
) |
|
(20.8 |
) |
|
0.9 |
|
|
— |
|
|
(117.8 |
) |
Miscellaneous - net |
(5.6 |
) |
|
(10.8 |
) |
|
(14.3 |
) |
|
— |
|
|
(30.7 |
) |
|
(103.5 |
) |
|
(31.6 |
) |
|
(13.4 |
) |
|
— |
|
|
(148.5 |
) |
OPERATING INCOME (LOSS) |
(103.5 |
) |
|
244.1 |
|
|
100.2 |
|
|
— |
|
|
240.8 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
(195.0 |
) |
|
0.6 |
|
|
(6.1 |
) |
|
— |
|
|
(200.5 |
) |
Gain on extinguishment/restructuring of debt |
166.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
166.3 |
|
Other non-operating income (expense) |
(0.5 |
) |
|
0.4 |
|
|
0.5 |
|
|
— |
|
|
0.4 |
|
|
(29.2 |
) |
|
1.0 |
|
|
(5.6 |
) |
|
— |
|
|
(33.8 |
) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(132.7 |
) |
|
245.1 |
|
|
94.6 |
|
|
— |
|
|
207.0 |
|
INCOME TAX BENEFIT |
4.3 |
|
|
3.0 |
|
|
4.9 |
|
|
— |
|
|
12.2 |
|
EQUITY IN INCOME OF SUBSIDIARIES |
319.6 |
|
|
13.7 |
|
|
— |
|
|
(333.3 |
) |
|
— |
|
INCOME FROM CONTINUING OPERATIONS |
191.2 |
|
|
261.8 |
|
|
99.5 |
|
|
(333.3 |
) |
|
219.2 |
|
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax |
(17.1 |
) |
|
2.6 |
|
|
(5.4 |
) |
|
— |
|
|
(19.9 |
) |
NET INCOME |
174.1 |
|
|
264.4 |
|
|
94.1 |
|
|
(333.3 |
) |
|
199.3 |
|
INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST |
— |
|
|
(25.2 |
) |
|
— |
|
|
— |
|
|
(25.2 |
) |
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
174.1 |
|
|
$ |
239.2 |
|
|
$ |
94.1 |
|
|
$ |
(333.3 |
) |
|
$ |
174.1 |
|
OTHER COMPREHENSIVE INCOME (LOSS) |
(3.3 |
) |
|
(20.7 |
) |
|
13.8 |
|
|
6.9 |
|
|
(3.3 |
) |
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
170.8 |
|
|
$ |
218.5 |
|
|
$ |
107.9 |
|
|
$ |
(326.4 |
) |
|
$ |
170.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) |
For the Year Ended December 31, 2015 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
REVENUES FROM PRODUCT SALES AND SERVICES |
|
|
|
|
|
|
|
|
|
Product |
$ |
— |
|
|
$ |
1,368.1 |
|
|
$ |
464.3 |
|
|
$ |
— |
|
|
$ |
1,832.4 |
|
Freight and venture partners' cost reimbursements |
— |
|
|
157.3 |
|
|
23.6 |
|
|
— |
|
|
180.9 |
|
|
— |
|
|
1,525.4 |
|
|
487.9 |
|
|
— |
|
|
2,013.3 |
|
COST OF GOODS SOLD AND OPERATING EXPENSES |
— |
|
|
(1,298.3 |
) |
|
(478.5 |
) |
|
— |
|
|
(1,776.8 |
) |
SALES MARGIN |
— |
|
|
227.1 |
|
|
9.4 |
|
|
— |
|
|
236.5 |
|
OTHER OPERATING INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
(88.5 |
) |
|
(21.2 |
) |
|
(0.3 |
) |
|
— |
|
|
(110.0 |
) |
Miscellaneous - net |
7.7 |
|
|
(3.0 |
) |
|
20.1 |
|
|
— |
|
|
24.8 |
|
|
(80.8 |
) |
|
(24.2 |
) |
|
19.8 |
|
|
— |
|
|
(85.2 |
) |
OPERATING INCOME (LOSS) |
(80.8 |
) |
|
202.9 |
|
|
29.2 |
|
|
— |
|
|
151.3 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
(221.4 |
) |
|
(0.1 |
) |
|
(7.0 |
) |
|
— |
|
|
(228.5 |
) |
Gain on extinguishment/restructuring of debt |
392.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
392.9 |
|
Other non-operating income (expense) |
(114.6 |
) |
|
1.2 |
|
|
110.8 |
|
|
— |
|
|
(2.6 |
) |
|
56.9 |
|
|
1.1 |
|
|
103.8 |
|
|
— |
|
|
161.8 |
|
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY LOSS FROM VENTURES |
(23.9 |
) |
|
204.0 |
|
|
133.0 |
|
|
— |
|
|
313.1 |
|
INCOME TAX BENEFIT (EXPENSE) |
(19.1 |
) |
|
(176.3 |
) |
|
26.1 |
|
|
— |
|
|
(169.3 |
) |
EQUITY IN INCOME (LOSS) OF SUBSIDIARIES |
(501.2 |
) |
|
12.9 |
|
|
— |
|
|
488.3 |
|
|
— |
|
EQUITY LOSS FROM VENTURES, net of tax |
— |
|
|
— |
|
|
(0.1 |
) |
|
— |
|
|
(0.1 |
) |
INCOME (LOSS) FROM CONTINUING OPERATIONS |
(544.2 |
) |
|
40.6 |
|
|
159.0 |
|
|
488.3 |
|
|
143.7 |
|
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax |
(205.1 |
) |
|
(762.2 |
) |
|
75.2 |
|
|
— |
|
|
(892.1 |
) |
NET INCOME (LOSS) |
(749.3 |
) |
|
(721.6 |
) |
|
234.2 |
|
|
488.3 |
|
|
(748.4 |
) |
LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST |
— |
|
|
(8.6 |
) |
|
7.7 |
|
|
— |
|
|
(0.9 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
(749.3 |
) |
|
$ |
(730.2 |
) |
|
$ |
241.9 |
|
|
$ |
488.3 |
|
|
$ |
(749.3 |
) |
PREFERRED STOCK DIVIDENDS |
(38.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(38.4 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS |
$ |
(787.7 |
) |
|
$ |
(730.2 |
) |
|
$ |
241.9 |
|
|
$ |
488.3 |
|
|
$ |
(787.7 |
) |
OTHER COMPREHENSIVE INCOME |
266.2 |
|
|
20.0 |
|
|
176.4 |
|
|
(196.4 |
) |
|
266.2 |
|
TOTAL COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
(521.5 |
) |
|
$ |
(710.2 |
) |
|
$ |
418.3 |
|
|
$ |
291.9 |
|
|
$ |
(521.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows |
For the Year Ended December 31, 2017 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
Net cash provided (used) by operating activities |
$ |
(166.8 |
) |
|
$ |
430.4 |
|
|
$ |
74.5 |
|
|
$ |
— |
|
|
$ |
338.1 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
(3.4 |
) |
|
(80.6 |
) |
|
(67.7 |
) |
|
— |
|
|
(151.7 |
) |
Intercompany investing |
225.7 |
|
|
(7.4 |
) |
|
(45.0 |
) |
|
(173.3 |
) |
|
— |
|
Other investing activities |
(7.7 |
) |
|
3.4 |
|
|
— |
|
|
— |
|
|
(4.3 |
) |
Net cash provided (used) in investing activities |
214.6 |
|
|
(84.6 |
) |
|
(112.7 |
) |
|
(173.3 |
) |
|
(156.0 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net proceeds from issuance of common shares |
661.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
661.3 |
|
Proceeds from issuance of debt |
1,771.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,771.5 |
|
Debt issuance costs |
(28.6 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(28.6 |
) |
Repurchase of debt |
(1,720.7 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(1,720.7 |
) |
Acquisition of noncontrolling interest |
(105.0 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(105.0 |
) |
Distributions of partnership equity |
— |
|
|
(52.9 |
) |
|
— |
|
|
— |
|
|
(52.9 |
) |
Intercompany financing |
45.0 |
|
|
(288.8 |
) |
|
70.5 |
|
|
173.3 |
|
|
— |
|
Other financing activities |
(5.8 |
) |
|
(4.5 |
) |
|
(16.4 |
) |
|
— |
|
|
(26.7 |
) |
Net cash provided (used) by financing activities |
617.7 |
|
|
(346.2 |
) |
|
54.1 |
|
|
173.3 |
|
|
498.9 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
— |
|
|
— |
|
|
3.3 |
|
|
— |
|
|
3.3 |
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
665.5 |
|
|
(0.4 |
) |
|
19.2 |
|
|
— |
|
|
684.3 |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
283.4 |
|
|
2.5 |
|
|
37.5 |
|
|
— |
|
|
323.4 |
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
$ |
948.9 |
|
|
$ |
2.1 |
|
|
$ |
56.7 |
|
|
$ |
— |
|
|
$ |
1,007.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows |
For the Year Ended December 31, 2016 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
Net cash provided (used) by operating activities |
$ |
(275.7 |
) |
|
$ |
462.9 |
|
|
$ |
115.8 |
|
|
$ |
— |
|
|
$ |
303.0 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
(6.2 |
) |
|
(60.0 |
) |
|
(2.9 |
) |
|
— |
|
|
(69.1 |
) |
Intercompany investing |
356.6 |
|
|
(3.3 |
) |
|
(117.0 |
) |
|
(236.3 |
) |
|
— |
|
Other investing activities |
0.4 |
|
|
10.8 |
|
|
— |
|
|
— |
|
|
11.2 |
|
Net cash provided (used) by investing activities |
350.8 |
|
|
(52.5 |
) |
|
(119.9 |
) |
|
(236.3 |
) |
|
(57.9 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net proceeds from issuance of common shares |
287.4 |
|
|
— |
|
|
— |
|
|
— |
|
|
287.4 |
|
Debt issuance costs |
(5.2 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(5.2 |
) |
Borrowings under credit facilities |
105.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
105.0 |
|
Repayments under credit facilities |
(105.0 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(105.0 |
) |
Repayments on equipment loans |
(95.6 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(95.6 |
) |
Repurchase of debt |
(305.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(305.4 |
) |
Distributions of partnership equity |
— |
|
|
(59.9 |
) |
|
— |
|
|
— |
|
|
(59.9 |
) |
Intercompany financing |
117.0 |
|
|
(339.9 |
) |
|
(13.4 |
) |
|
236.3 |
|
|
— |
|
Other financing activities |
(0.6 |
) |
|
(9.9 |
) |
|
(17.2 |
) |
|
— |
|
|
(27.7 |
) |
Net cash used by financing activities |
(2.4 |
) |
|
(409.7 |
) |
|
(30.6 |
) |
|
236.3 |
|
|
(206.4 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
— |
|
|
— |
|
|
(0.5 |
) |
|
— |
|
|
(0.5 |
) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
72.7 |
|
|
0.7 |
|
|
(35.2 |
) |
|
— |
|
|
38.2 |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
210.7 |
|
|
1.8 |
|
|
72.7 |
|
|
— |
|
|
285.2 |
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
$ |
283.4 |
|
|
$ |
2.5 |
|
|
$ |
37.5 |
|
|
$ |
— |
|
|
$ |
323.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows |
For the Year Ended December 31, 2015 |
(In Millions) |
|
Cleveland-Cliffs Inc. |
|
Guarantor Subsidiaries |
|
Non-Guarantor Subsidiaries |
|
Eliminations |
|
Consolidated |
Net cash provided (used) by operating activities |
$ |
65.6 |
|
|
$ |
(23.7 |
) |
|
$ |
(4.0 |
) |
|
$ |
— |
|
|
$ |
37.9 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
(6.9 |
) |
|
(68.2 |
) |
|
(5.7 |
) |
|
— |
|
|
(80.8 |
) |
Intercompany investments |
(205.8 |
) |
|
(2.9 |
) |
|
(80.0 |
) |
|
288.7 |
|
|
— |
|
Other investing activities |
— |
|
|
(27.6 |
) |
|
5.2 |
|
|
— |
|
|
(22.4 |
) |
Net cash used by investing activities |
(212.7 |
) |
|
(98.7 |
) |
|
(80.5 |
) |
|
288.7 |
|
|
(103.2 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of debt |
503.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
503.5 |
|
Debt issuance costs |
(33.6 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(33.6 |
) |
Borrowings under credit facilities |
296.8 |
|
|
— |
|
|
13.0 |
|
|
— |
|
|
309.8 |
|
Repayments on credit facilities |
(296.8 |
) |
|
— |
|
|
(13.0 |
) |
|
— |
|
|
(309.8 |
) |
Repayments on equipment loans |
(43.6 |
) |
|
— |
|
|
(1.8 |
) |
|
— |
|
|
(45.4 |
) |
Repurchase of debt |
(225.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(225.9 |
) |
Distributions of partnership equity |
— |
|
|
(40.6 |
) |
|
— |
|
|
— |
|
|
(40.6 |
) |
Preferred stock dividends |
(51.2 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(51.2 |
) |
Intercompany financing |
80.0 |
|
|
188.5 |
|
|
20.2 |
|
|
(288.7 |
) |
|
— |
|
Other financing activities |
(5.0 |
) |
|
(25.0 |
) |
|
(15.8 |
) |
|
— |
|
|
(45.8 |
) |
Net cash provided by financing activities |
224.2 |
|
|
122.9 |
|
|
2.6 |
|
|
(288.7 |
) |
|
61.0 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
— |
|
|
— |
|
|
(1.4 |
) |
|
— |
|
|
(1.4 |
) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
77.1 |
|
|
0.5 |
|
|
(83.3 |
) |
|
— |
|
|
(5.7 |
) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
133.6 |
|
|
1.3 |
|
|
156.0 |
|
|
— |
|
|
290.9 |
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
$ |
210.7 |
|
|
$ |
1.8 |
|
|
$ |
72.7 |
|
|
$ |
— |
|
|
$ |
285.2 |
|
|