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

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	(In Millions)
	2013		2012			2011
Unrecognized tax benefits balance as of January 1	$	55.5	$	102.1		$	79.8
Increases for tax positions in prior years	13.6		2.7			42.1
Increases for tax positions in current year	5.3		11.1			29.5
Increase due to foreign exchange	—		—			—
Settlements	—		(60.4		)	(3.5		)
Lapses in statutes of limitations	—		—			(45.8		)
Other	—		—			—
Unrecognized tax benefits balance as of December 31	$	74.4	$	55.5		$	102.1

Deferred Tax Assets and Liabilities by Location [Table Text Block]

The deferred tax amounts are classified in the Statements of Consolidated Financial Position as current or long-term consistently with the underlying asset or liability that generates the basis difference between financial reporting and tax. Following is a summary:



	(In Millions)
	2013			2012
Deferred tax assets:
United States	$	7.2		$	5.2
Foreign
Current	29.4			3.8
Long-term	41.5			151.5
Total deferred tax assets	78.1			160.5
Deferred tax liabilities:
United States	175.3			58.4
Foreign
Current	6.1			—
Long-term	971.2			1,108.7
Total deferred tax liabilities	1,152.6			1,167.1
Net deferred tax (liabilities)	$	(1,074.5	)	$	(1,006.6	)

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Income (Loss) from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures includes the following components:



	(In Millions)
	2013			2012			2011
United States	$	837.7		$	838.6		$	1,506.5
Foreign	(348.4		)	(1,340.4		)	684.0
	$	489.3		$	(501.8	)	$	2,190.5

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The components of the provision (benefit) for income taxes on continuing operations consist of the following:



	(In Millions)
	2013			2012			2011
Current provision (benefit):
United States federal	$	101.3		$	71.1		$	246.8
United States state & local	4.0			7.6			2.8
Foreign	87.9			50.2			224.7
	193.2			128.9			474.3
Deferred provision (benefit):
United States federal	23.3			221.2			23.8
United States state & local	3.0			1.4			4.7
Foreign	(164.4		)	(95.6		)	(95.1		)
	(138.1		)	127.0			(66.6		)
Total provision on income (loss) from continuing operations	$	55.1		$	255.9		$	407.7

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate is as follows:



	(In Millions)
	2013					2012					2011
Tax at U.S. statutory rate of 35 percent	$	171.3		35.0	%	$	(175.6	)	35.0	%	$	766.7		35.0	%
Increase (decrease) due to:
Foreign exchange remeasurement	(2.6		)	(0.5	)	62.3			(12.4	)	(62.6		)	(2.9	)
Non-taxable income related to noncontrolling interests	(1.5		)	(0.3	)	61.0			(12.0	)	(63.6		)	(2.9	)
Impact of tax law change	—			—		(357.1		)	71.2		—			—
Percentage depletion in excess of cost depletion	(97.6		)	(19.9	)	(109.1		)	21.7		(153.4		)	(7.0	)
Impact of foreign operations	(10.2		)	(2.1	)	65.2			(13.0	)	(44.0		)	(2.0	)
Income not subject to tax	(106.6		)	(21.8	)	(108.0		)	21.5		(67.5		)	(3.1	)
Goodwill impairment	20.5			4.2		202.2			(40.3	)	—			—
Non-taxable hedging income	—			—		—			—		(32.4		)	(1.5	)
State taxes, net	5.6			1.1		7.3			(1.5	)	7.5			0.3
Manufacturer’s deduction	(7.9		)	(1.6	)	(4.7		)	0.9		(11.9		)	(0.5	)
Valuation allowance	73.0			14.9		634.5			(126.5	)	49.5			2.3
Tax uncertainties	19.6			5.3		(14.8		)	2.9		17.7			0.8
Prior year adjustment in current year	(11.4		)	(3.6	)	(5.7		)	1.1		(18.0		)	(0.8	)
Other items — net	2.9			0.6		(1.6		)	0.4		19.7			0.9
Income tax expense	$	55.1		11.3	%	$	255.9		(51.0	)%	$	407.7		18.6	%

Income Taxes Other Than Continuing Operations Disclosure Text Block [Table Text Block]

The components of income taxes for other than continuing operations consisted of the following:



	(In Millions)
	2013			2012			2011
Other comprehensive (income) loss:
Pension/OPEB liability	$	100.0		$	13.8		$	(60.2	)
Mark-to-market adjustments	2.0			1.7			(17.7		)
Other	(12.4		)	2.6			—
Total	$	89.6		$	18.1		$	(77.9	)

Paid in capital — acquisition of noncontrolling interest	$	102.1		$	—		$	—
Paid in capital — stock based compensation	$	3.5		$	(12.8	)	$	(4.6	)
Discontinued Operations	$	(2.0	)	$	10.4		$	3.2

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Significant components of our deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows:



	(In Millions)
	2013			2012
Deferred tax assets:
Pensions	$	88.4		$	161.2
MRRT starting base allowance	300.3			357.1
Postretirement benefits other than pensions	58.0			87.7
Alternative minimum tax credit carryforwards	299.2			274.9
Investment in ventures	—			14.1
Asset retirement obligations	61.7			48.2
Operating loss carryforwards	524.4			396.4
Product inventories	16.4			45.4
Property, plant and equipment and mineral rights	56.0			49.2
Lease liabilities	31.9			31.0
Other liabilities	138.3			140.9
Total deferred tax assets before valuation allowance	1,574.6			1,606.1
Deferred tax asset valuation allowance	864.1			858.4
Net deferred tax assets	710.5			747.7
Deferred tax liabilities:
Property, plant and equipment and mineral rights	1,400.8			1,350.5
Investment in ventures	196.4			207.6
Intangible assets	33.5			24.6
Income tax uncertainties	48.5			48.5
Financial derivatives	—			1.6
Product inventories	12.8			19.6
Other assets	93.0			101.9
Total deferred tax liabilities	1,785.0			1,754.3
Net deferred tax (liabilities) assets	$	(1,074.5	)	$	(1,006.6	)