Cleveland-Cliffs Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

12 Months Ended

Dec. 31, 2019

Disclosure Text Block [Abstract]

Supplementary Financial Statement Information

NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

Revenues from Product Sales and Services

The following table represents our Revenues from product sales and services contributed by each category of products and services:



	(In Millions)
	Year Ended December 31,
	2019		2018		2017
Revenue category:
Product	$	1,848.1	$	2,172.3	$	1,644.6
Freight	141.8		160.1		166.7
Venture partner's cost reimbursements	—		—		54.7
Total revenues from product sales and services	$	1,989.9	$	2,332.4	$	1,866.0

Freight and venture partner's cost reimbursements are included in both Revenues from product sales and services and Cost of goods sold and operating expenses and are offset within Sales margin.

There was no allowance for doubtful accounts at December 31, 2019 and 2018 and no bad debt expense for the years ended December 31, 2019, 2018 and 2017.

Deferred Revenue

The table below summarizes our deferred revenue balances:



	(In Millions)
	Deferred Revenue (Current)					Deferred Revenue (Long-Term)
	Year Ended December 31,					Year Ended December 31,
	2019		2018			2019			2018
Opening balance as of January 1	$	21.0	$	23.8		$	38.5		$	51.4
Closing balance as of December 31	22.1		21.0			25.7			38.5
Increase (Decrease)	$	1.1	$	(2.8	)	$	(12.8	)	$	(12.9	)

The terms of one of our pellet supply agreements required supplemental payments to be paid by the customer during the period 2009 through 2012. Installment amounts received under this arrangement in excess of sales were classified as Other current liabilities and Other non-current liabilities in the Statements of Consolidated Financial Position upon receipt of payment. Revenue is recognized over the life of the supply agreement, which extends until 2022, in equal annual installments. As of December 31, 2019 and December 31, 2018, installment amounts received in excess of sales totaled $38.5 million and $51.3 million, respectively, related to this agreement. As of December 31, 2019, and December 31, 2018, deferred revenue of $12.8 million was recorded in Other current liabilities and $25.7 million and $38.5 million, respectively, was recorded as long-term in Other non-current liabilities in the Statements of Consolidated Financial Position, related to this agreement.

Due to the payment terms and the timing of cash receipts near a period end, cash receipts can exceed deliveries for certain customers. Revenue associated with these transactions totaling $9.3 million and $8.2 million was deferred and included in Other current liabilities in the Statements of Consolidated Financial Position as of December 31, 2019 and December 31, 2018, respectively.

Accrued Liabilities

The following table presents the detail of our Accrued liabilities in the Statements of Consolidated Financial Position:



	(In Millions)
	December 31,
	2019		2018
Accrued employment costs	$	61.7	$	74.0
Accrued interest	29.0		38.4
Accrued dividends	17.8		15.0
Accrued royalties	8.4		17.3
Other	9.4		14.2
Accrued liabilities	$	126.3	$	158.9

Cash Flow Information

A reconciliation of capital additions to cash paid for capital expenditures is as follows:



	(In Millions)
	Year Ended December 31,
	2019			2018			2017
Capital additions¹	$	689.8		$	394.8		$	156.0
Less:
Non-cash accruals	15.3			93.6			(2.2		)
Right-of-use assets - finance leases	29.3			7.6			6.5
Grants	(10.8		)	(2.5		)	—
Cash paid for capital expenditures including deposits	$	656.0		$	296.1		$	151.7

¹Includes capital additions related to discontinued operations of $0.1 million and $2.8 million for the years ended December 31, 2018 and 2017, respectively.

Cash payments (receipts) for interest and income taxes are as follows:



	(In Millions)
	2019			2018			2017
Taxes paid on income	$	0.2		$	2.9		$	1.7
Income tax refunds	(117.9		)	(11.3		)	(7.8		)
Interest paid on debt obligations net of capitalized interest¹	97.6			105.7			139.0

¹Capitalized interest was $24.8 million and $6.5 million for the years ended December 31, 2019 and 2018, respectively.

Non-Cash Financing Activities - Declared Dividends

On December 2, 2019, the Board of Directors declared a quarterly cash dividend on our common shares of $0.06 per share. The cash dividend of $16.2 million was paid on January 15, 2020 to shareholders of record as of the close of business on January 3, 2020.