Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
 12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting

NOTE 2 — SEGMENT REPORTING

Our company's primary operations are organized and managed according to product category and geographic location: U.S. Iron Ore, Eastern Canadian Iron Ore, North American Coal, Asia Pacific Iron Ore, Asia Pacific Coal, Latin American Iron Ore, Ferroalloys and our Global Exploration Group. The U.S. Iron Ore segment is comprised of our interests in five U.S. mines that provide iron ore to the integrated steel industry. The Eastern Canadian Iron Ore segment is comprised of two Eastern Canadian mines that primarily provide iron ore to the seaborne market for Asian steel producers. The North American Coal segment is comprised of our five metallurgical coal mines and one thermal coal mine that provide metallurgical coal primarily to the integrated steel industry and thermal coal primarily to the energy industry. The Asia Pacific Iron Ore segment is located in Western Australia and provides iron ore to steel producers in China and Japan. There are no intersegment revenues.

The Asia Pacific Coal operating segment is comprised of our 45 percent economic interest in Sonoma, located in Queensland, Australia. The Latin American Iron Ore operating segment is comprised of our 30 percent Amapá interest in Brazil. The Ferroalloys operating segment is comprised of our interests in chromite deposits held by Freewest and Spider in Northern Ontario, Canada and the Global Exploration Group is focused on early involvement in exploration activities to identify new world-class projects for future development or projects that add significant value to existing operations. The Asia Pacific Coal, Latin American Iron Ore, Ferroalloys and Global Exploration Group operating segments do not meet reportable segment disclosure requirements and therefore are not separately reported.

We evaluate segment performance based on sales margin, defined as revenues less cost of goods sold and operating expenses identifiable to each segment. This measure of operating performance is an effective measurement as we focus on reducing production costs throughout the Company.

 

The following table presents a summary of our reportable segments for the years ended December 31, 2011, 2010 and 2009, including a reconciliation of segment sales margin to Income from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures:

 

     (In Millions)  
     2011     2010     2009  

Revenues from product sales and services:

             

U.S Iron Ore

    $ 3,509.9        52 %    $ 2,443.7        52 %    $ 1,211.6        52 % 

Eastern Canadian Iron Ore

      1,178.1        17 %      477.7        10 %      236.2        10 % 

North American Coal

      512.1        8 %      438.2        9 %      207.2        9 % 

Asia Pacific Iron Ore

      1,363.5        20 %      1,123.9        24 %      542.1        23 % 

Other

      230.7        3 %      198.6        4 %      144.9        6 % 
  

 

 

      

 

 

      

 

 

    

Total revenues from product sales and services for reportable segments

    $ 6,794.3        100 %    $ 4,682.1        100 %    $ 2,342.0        100 % 
  

 

 

      

 

 

      

 

 

    

Sales margin:

             

U.S. Iron Ore

    $ 1,679.3        $ 788.4        $ 213.2     

Eastern Canadian Iron Ore

      290.9          133.6          62.3     

North American Coal

      (58.4 )        (28.6 )        (71.9 )   

Asia Pacific Iron Ore

      699.5          566.2          87.2     

Other

      77.3          66.9          20.9     
  

 

 

      

 

 

      

 

 

    

Sales margin

      2,688.6          1,526.5          311.7     

Other operating expense

      (340.0 )        (256.3 )        (75.6 )   

Other income (expense)

      (107.1 )        32.8          60.4     
  

 

 

      

 

 

      

 

 

    

Income from continuing operations before income taxes and equity income (loss) from ventures

    $ 2,241.5        $ 1,303.0        $ 296.5     
  

 

 

      

 

 

      

 

 

    

Depreciation, depletion and amortization:

             

U.S. Iron Ore

    $ 86.2        $ 61.7        $ 67.4     

Easten Canadian Iron Ore

      124.6          41.9          6.9     

North American Coal

      86.5          60.4          38.2     

Asia Pacific Iron Ore

      100.9          133.9          110.6     

Other

      28.7          24.4          13.5     
  

 

 

      

 

 

      

 

 

    

Total depreciation, depletion and amortization

    $ 426.9        $ 322.3        $ 236.6     
  

 

 

      

 

 

      

 

 

    

Capital additions (1):

             

U.S. Iron Ore

    $ 191.4        $ 84.7        $ 42.6     

Eastern Canadian Iron Ore

      303.1          18.8          —       

North American Coal

      181.0          89.5          20.8     

Asia Pacific Iron Ore

      262.0          53.6          96.2     

Other

      23.4          29.2          8.6     
  

 

 

      

 

 

      

 

 

    

Total capital additions

    $ 960.9        $ 275.8        $ 168.2     
  

 

 

      

 

 

      

 

 

    

Assets:

             

U.S. Iron Ore

    $ 1,691.8        $ 1,537.1         

Eastern Canadian Iron Ore

      7,973.1          629.6         

North American Coal

      1,814.4          1,623.8         

Asia Pacific Iron Ore

      1,511.2          1,195.3         

Other

      1,017.6          1,257.8         
  

 

 

      

 

 

        

Total segment assets

      14,008.1          6,243.6         

Corporate

      533.6          1,534.6         
  

 

 

      

 

 

        

Total assets

    $ 14,541.7        $ 7,778.2         
  

 

 

      

 

 

        

(1) Includes capital lease additions.

 

Included in the consolidated financial statements are the following amounts relating to geographic locations:

 

     (In Millions)  
     2011      2010      2009  

Revenue (1)

         

United States

    $ 2,774.1       $ 1,966.3       $ 1,049.5   

China

      2,123.4         1,262.0         711.5   

Canada

      914.3         696.5         236.6   

Japan

      460.4         311.1         157.4   

Other countries

      522.1         446.2         187.0   
  

 

 

     

 

 

     

 

 

  

Total revenue

    $ 6,794.3       $ 4,682.1       $ 2,342.0   
  

 

 

     

 

 

     

 

 

  

Property, Plant and Equipment, Net

         

United States

    $ 2,684.9       $ 2,498.8      

Australia

      1,138.3         973.7      

Canada

      6,701.4         506.7      
  

 

 

     

 

 

     

Total Property, Plant and Equipment, Net

    $ 10,524.6       $ 3,979.2      
  

 

 

     

 

 

     

(1) Revenue is attributed to countries based on the location of the customer and includes both Product sales and services.

Concentrations in Revenue

In 2011, we had one customer that individually accounted for more than 10 percent of our consolidated product revenue. In 2010 and 2009, we had two and one additional customers that individually accounted for more than 10 percent of our consolidated product revenue, respectively. Total revenue from those customers that accounted for more than 10 percent of our consolidated product revenues represents approximately $1.4 billion, $1.8 billion and $0.8 billion of our total consolidated product revenue in 2011, 2010 and 2009, respectively, and is attributable to our U.S. Iron Ore, Eastern Canadian Iron Ore and North American Coal business segments.

The following table represents the percentage of our total revenue contributed by each category of products and services in 2011, 2010 and 2009:

 

     2011     2010     2009  

Revenue Category

       

Iron ore

      85 %      81 %      81 % 

Coal

      11        13        14   

Freight and venture partners' cost reimbursements

      4        6        5   
  

 

 

    

 

 

    

 

 

  

Total revenue

      100 %      100 %      100 %