| Schedule of New Accounting Pronouncements and Changes in Accounting Principles |
The effect of the retrospective presentation change related to the net periodic cost of our defined benefit pension and other postretirement employee benefits plans on our Statements of Unaudited Condensed Consolidated Operations was as follows:
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|
|
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|
($ in Millions) |
|
Three Months Ended September 30, 2017 |
|
Nine Months Ended
September 30, 2017
|
|
As Revised |
|
Without Adoption of ASU 2017-07 |
|
Effect of Change |
|
As Revised |
|
Without Adoption of ASU 2017-07 |
|
Effect of Change |
Cost of goods sold and operating expenses |
$ |
(438.9 |
) |
|
$ |
(439.5 |
) |
|
$ |
0.6 |
|
|
$ |
(1,002.7 |
) |
|
$ |
(1,004.4 |
) |
|
$ |
1.7 |
|
Selling, general and administrative expenses |
$ |
(23.8 |
) |
|
$ |
(21.8 |
) |
|
$ |
(2.0 |
) |
|
$ |
(75.5 |
) |
|
$ |
(69.6 |
) |
|
$ |
(5.9 |
) |
Miscellaneous – net |
$ |
(5.3 |
) |
|
$ |
(4.9 |
) |
|
$ |
(0.4 |
) |
|
$ |
1.3 |
|
|
$ |
2.4 |
|
|
$ |
(1.1 |
) |
Operating income |
$ |
128.7 |
|
|
$ |
130.5 |
|
|
$ |
(1.8 |
) |
|
$ |
277.3 |
|
|
$ |
282.6 |
|
|
$ |
(5.3 |
) |
Other non-operating income |
$ |
2.6 |
|
|
$ |
0.8 |
|
|
$ |
1.8 |
|
|
$ |
7.6 |
|
|
$ |
2.3 |
|
|
$ |
5.3 |
|
Net Income |
$ |
52.9 |
|
|
$ |
52.9 |
|
|
$ |
— |
|
|
$ |
53.2 |
|
|
$ |
53.2 |
|
|
$ |
— |
|
The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of Topic 606 were as follows:
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($ in Millions) |
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|
Balance at December 31, 2017 |
|
Adjustments due to Topic 606 |
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Balance at January 1, 2018 |
ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
|
$ |
978.3 |
|
|
$ |
— |
|
|
$ |
978.3 |
|
Accounts receivable, net |
|
106.7 |
|
|
76.6 |
|
|
183.3 |
|
Inventories |
|
138.4 |
|
|
(51.4 |
) |
|
87.0 |
|
Supplies and other inventories |
|
88.8 |
|
|
— |
|
|
88.8 |
|
Derivative assets |
|
37.9 |
|
|
11.6 |
|
|
49.5 |
|
Income tax receivable |
|
13.3 |
|
|
— |
|
|
13.3 |
|
Current assets of discontinued operations |
|
118.5 |
|
|
— |
|
|
118.5 |
|
Loans to and accounts receivable from the Canadian Entities |
|
51.6 |
|
|
— |
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|
51.6 |
|
Other current assets |
|
11.1 |
|
|
— |
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|
11.1 |
|
TOTAL CURRENT ASSETS |
|
1,544.6 |
|
|
36.8 |
|
|
1,581.4 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
|
1,033.8 |
|
|
— |
|
|
1,033.8 |
|
OTHER ASSETS |
|
|
|
|
|
|
Deposits for property, plant and equipment |
|
17.8 |
|
|
— |
|
|
17.8 |
|
Income tax receivable |
|
235.3 |
|
|
— |
|
|
235.3 |
|
Non-current assets of discontinued operations |
|
20.3 |
|
|
— |
|
|
20.3 |
|
Other non-current assets |
|
101.6 |
|
|
— |
|
|
101.6 |
|
TOTAL OTHER ASSETS |
|
375.0 |
|
|
— |
|
|
375.0 |
|
TOTAL ASSETS |
|
$ |
2,953.4 |
|
|
$ |
36.8 |
|
|
$ |
2,990.2 |
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|
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|
LIABILITIES |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
$ |
99.5 |
|
|
$ |
1.4 |
|
|
$ |
100.9 |
|
Accrued expenses |
|
79.1 |
|
|
— |
|
|
79.1 |
|
Accrued interest |
|
31.4 |
|
|
— |
|
|
31.4 |
|
Contingent claims |
|
55.6 |
|
|
— |
|
|
55.6 |
|
Partnership distribution payable |
|
44.2 |
|
|
— |
|
|
44.2 |
|
Current liabilities of discontinued operations |
|
75.0 |
|
|
— |
|
|
75.0 |
|
Other current liabilities |
|
67.4 |
|
|
1.4 |
|
|
68.8 |
|
TOTAL CURRENT LIABILITIES |
|
452.2 |
|
|
2.8 |
|
|
455.0 |
|
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES |
|
257.7 |
|
|
— |
|
|
257.7 |
|
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS |
|
167.7 |
|
|
— |
|
|
167.7 |
|
LONG-TERM DEBT |
|
2,304.2 |
|
|
— |
|
|
2,304.2 |
|
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS |
|
52.2 |
|
|
— |
|
|
52.2 |
|
OTHER LIABILITIES |
|
163.5 |
|
|
— |
|
|
163.5 |
|
TOTAL LIABILITIES |
|
3,397.5 |
|
|
2.8 |
|
|
3,400.3 |
|
EQUITY |
|
|
|
|
|
|
CLIFFS SHAREHOLDERS' DEFICIT |
|
(444.3 |
) |
|
34.0 |
|
|
(410.3 |
) |
NONCONTROLLING INTEREST |
|
0.2 |
|
|
— |
|
|
0.2 |
|
TOTAL DEFICIT |
|
(444.1 |
) |
|
34.0 |
|
|
(410.1 |
) |
TOTAL LIABILITIES AND DEFICIT |
|
$ |
2,953.4 |
|
|
$ |
36.8 |
|
|
$ |
2,990.2 |
|
The impact of adoption on our Statements of Unaudited Condensed Consolidated Operations and Statements of Unaudited Condensed Consolidated Financial Position is as follows:
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|
($ in Millions) |
|
Three Months Ended
September 30, 2018
|
|
Nine Months Ended
September 30, 2018
|
|
As Reported |
|
Balances without Adoption of Topic 606 |
|
Effect of Change |
|
As Reported |
|
Balances without Adoption of Topic 606 |
|
Effect of Change |
REVENUES FROM PRODUCT SALES AND SERVICES |
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Product |
$ |
684.7 |
|
|
$ |
675.6 |
|
|
$ |
9.1 |
|
|
$ |
1,525.9 |
|
|
$ |
1,471.2 |
|
|
$ |
54.7 |
|
Freight and venture partners' cost reimbursements |
57.1 |
|
|
56.5 |
|
|
0.6 |
|
|
110.2 |
|
|
107.7 |
|
|
2.5 |
|
|
741.8 |
|
|
732.1 |
|
|
9.7 |
|
|
1,636.1 |
|
|
1,578.9 |
|
|
57.2 |
|
COST OF GOODS SOLD AND OPERATING EXPENSES |
(480.2 |
) |
|
(475.9 |
) |
|
(4.3 |
) |
|
(1,028.5 |
) |
|
(1,006.6 |
) |
|
(21.9 |
) |
SALES MARGIN |
261.6 |
|
|
256.2 |
|
|
5.4 |
|
|
607.6 |
|
|
572.3 |
|
|
35.3 |
|
OTHER OPERATING EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
(30.1 |
) |
|
(30.1 |
) |
|
— |
|
|
(81.4 |
) |
|
(81.4 |
) |
|
— |
|
Miscellaneous – net |
(6.0 |
) |
|
(6.0 |
) |
|
— |
|
|
(16.2 |
) |
|
(16.2 |
) |
|
— |
|
|
(36.1 |
) |
|
(36.1 |
) |
|
— |
|
|
(97.6 |
) |
|
(97.6 |
) |
|
— |
|
OPERATING INCOME |
225.5 |
|
|
220.1 |
|
|
5.4 |
|
|
510.0 |
|
|
474.7 |
|
|
35.3 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
(29.5 |
) |
|
(29.5 |
) |
|
— |
|
|
(93.1 |
) |
|
(93.1 |
) |
|
— |
|
Gain on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
|
— |
|
Other non-operating income |
4.3 |
|
|
4.3 |
|
|
— |
|
|
13.1 |
|
|
13.1 |
|
|
— |
|
|
(25.2 |
) |
|
(25.2 |
) |
|
— |
|
|
(79.8 |
) |
|
(79.8 |
) |
|
— |
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
200.3 |
|
|
194.9 |
|
|
5.4 |
|
|
430.2 |
|
|
394.9 |
|
|
35.3 |
|
INCOME TAX EXPENSE |
(0.5 |
) |
|
(0.5 |
) |
|
— |
|
|
(14.4 |
) |
|
(14.4 |
) |
|
— |
|
INCOME FROM CONTINUING OPERATIONS |
199.8 |
|
|
194.4 |
|
|
5.4 |
|
|
415.8 |
|
|
380.5 |
|
|
35.3 |
|
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX |
238.0 |
|
|
238.0 |
|
|
— |
|
|
102.8 |
|
|
102.8 |
|
|
— |
|
NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS |
$ |
437.8 |
|
|
$ |
432.4 |
|
|
$ |
5.4 |
|
|
$ |
518.6 |
|
|
$ |
483.3 |
|
|
$ |
35.3 |
|
INCOME PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS – BASIC |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
0.67 |
|
|
$ |
0.65 |
|
|
$ |
0.02 |
|
|
$ |
1.40 |
|
|
$ |
1.28 |
|
|
$ |
0.12 |
|
Discontinued operations |
0.80 |
|
|
0.80 |
|
|
— |
|
|
0.35 |
|
|
0.35 |
|
|
— |
|
|
$ |
1.47 |
|
|
$ |
1.45 |
|
|
$ |
0.02 |
|
|
$ |
1.75 |
|
|
$ |
1.63 |
|
|
$ |
0.12 |
|
INCOME PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS – DILUTED |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
0.64 |
|
|
$ |
0.62 |
|
|
$ |
0.02 |
|
|
$ |
1.37 |
|
|
$ |
1.25 |
|
|
$ |
0.12 |
|
Discontinued operations |
0.77 |
|
|
0.77 |
|
|
— |
|
|
0.34 |
|
|
0.34 |
|
|
— |
|
|
$ |
1.41 |
|
|
$ |
1.39 |
|
|
$ |
0.02 |
|
|
$ |
1.71 |
|
|
$ |
1.59 |
|
|
$ |
0.12 |
|
AVERAGE NUMBER OF SHARES (IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
297,878 |
|
|
297,878 |
|
|
|
|
297,587 |
|
|
297,587 |
|
|
|
Diluted |
310,203 |
|
|
310,203 |
|
|
|
|
303,518 |
|
|
303,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in Millions) |
|
|
September 30, 2018 |
|
|
As Reported |
|
Balances without Adoption of Topic 606 |
|
Effect of Change |
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
897.1 |
|
|
$ |
897.1 |
|
|
$ |
— |
|
Accounts receivable, net |
|
141.4 |
|
|
34.8 |
|
|
106.6 |
|
Inventories |
|
187.9 |
|
|
257.5 |
|
|
(69.6 |
) |
Supplies and other inventories |
|
88.2 |
|
|
88.2 |
|
|
— |
|
Derivative assets |
|
190.8 |
|
|
156.6 |
|
|
34.2 |
|
Income tax receivable |
|
110.3 |
|
|
110.3 |
|
|
— |
|
Current assets of discontinued operations |
|
16.1 |
|
|
16.1 |
|
|
— |
|
Other current assets |
|
18.8 |
|
|
18.8 |
|
|
— |
|
TOTAL CURRENT ASSETS |
|
1,650.6 |
|
|
1,579.4 |
|
|
71.2 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
|
1,144.8 |
|
|
1,144.8 |
|
|
— |
|
OTHER ASSETS |
|
|
|
|
|
|
Deposits for property, plant and equipment |
|
94.6 |
|
|
94.6 |
|
|
— |
|
Income tax receivable |
|
113.6 |
|
|
113.6 |
|
|
— |
|
Other non-current assets |
|
121.4 |
|
|
121.4 |
|
|
— |
|
TOTAL OTHER ASSETS |
|
329.6 |
|
|
329.6 |
|
|
— |
|
TOTAL ASSETS |
|
$ |
3,125.0 |
|
|
$ |
3,053.8 |
|
|
$ |
71.2 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
$ |
140.8 |
|
|
$ |
140.1 |
|
|
$ |
0.7 |
|
Accrued expenses |
|
95.1 |
|
|
95.1 |
|
|
— |
|
Accrued interest |
|
26.2 |
|
|
26.2 |
|
|
— |
|
Partnership distribution payable |
|
43.1 |
|
|
43.1 |
|
|
— |
|
Current liabilities of discontinued operations |
|
14.2 |
|
|
14.2 |
|
|
— |
|
Other current liabilities |
|
61.3 |
|
|
61.5 |
|
|
(0.2 |
) |
TOTAL CURRENT LIABILITIES |
|
380.7 |
|
|
380.2 |
|
|
0.5 |
|
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES |
|
225.0 |
|
|
225.0 |
|
|
— |
|
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS |
|
174.4 |
|
|
174.4 |
|
|
— |
|
LONG-TERM DEBT |
|
2,300.0 |
|
|
2,300.0 |
|
|
— |
|
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS |
|
9.3 |
|
|
9.3 |
|
|
— |
|
OTHER LIABILITIES |
|
121.8 |
|
|
121.8 |
|
|
— |
|
TOTAL LIABILITIES |
|
3,211.2 |
|
|
3,210.7 |
|
|
0.5 |
|
EQUITY |
|
|
|
|
|
|
CLIFFS SHAREHOLDERS' DEFICIT |
|
(86.2 |
) |
|
(156.9 |
) |
|
70.7 |
|
TOTAL LIABILITIES AND DEFICIT |
|
$ |
3,125.0 |
|
|
$ |
3,053.8 |
|
|
$ |
71.2 |
|
|