Cleveland-Cliffs Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES

GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill

The increase in the balance of Goodwill as of March 31, 2020 is due to the preliminary assignment of $141.2 million to Goodwill in the first quarter of 2020 based on the preliminary purchase price allocation for the acquisition of AK Steel. The carrying amount of goodwill related to our Mining and Pelletizing segment was $2.1 million as of both March 31, 2020 and December 31, 2019.

Intangible Assets and Liabilities

The following is a summary of our intangible assets and liability:



		(In Millions)
	Classification	Gross Amount			Accumulated Amortization			Net Amount
As of March 31, 2020
Intangible assets:
Customer relationships	Intangible assets, net	$	91.0		$	(0.5	)	$	90.5
Developed technology	Intangible assets, net	61.0			(0.3		)	60.7
Trade names and trademarks	Intangible assets, net	11.0			(0.1		)	10.9
Mining permits	Intangible assets, net	72.2			(24.3		)	47.9
Total intangible assets		$	235.2		$	(25.2	)	$	210.0
Intangible liability:
Above-market supply contract	Intangible liability, net	$	(140.0	)	$	2.1		$	(137.9	)

As of December 31, 2019
Intangible assets:
Mining permits	Intangible assets, net	$	72.2		$	(24.1	)	$	48.1

Amortization expense related to intangible assets was $1.1 million and $0.2 million for the three months ended March 31, 2020 and 2019, respectively, and is recognized in Selling, general and administrative expenses in the Statements of Unaudited Condensed Consolidated Operations.

Estimated future amortization expense related to intangible assets at March 31, 2020 is as follows:



	(In Millions)
Years ending December 31,
2020 (remaining period of the year)	$	8.1
2021	10.8
2022	10.8
2023	10.8
2024	10.8
2025	10.8

Income from amortization of the intangible liability was $2.1 million for the three months ended March 31, 2020 and is recognized in Cost of goods sold in the Statements of Unaudited Condensed Consolidated Operations.

Estimated future amortization income related to the intangible liability at March 31, 2020 is as follows:



	(In Millions)
Years ending December 31,
2020 (remaining period of the year)	$	7.0
2021	10.9
2022	10.9
2023	10.9
2024	10.9
2025	10.9