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

Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTIES (Notes)

RELATED PARTIES (Notes)

9 Months Ended

Sep. 30, 2020

We have certain co-owned joint ventures with companies from the steel and mining industries, including integrated steel companies, their subsidiaries and other downstream users of steel and iron ore products. In addition, we have certain long-term contracts, and from time to time, enter into other sales agreements with these parties, and as a result, generate Revenues from related parties.

Hibbing is a co-owned joint venture with companies that are integrated steel producers or their subsidiaries. The following is a summary of the mine ownership of the co-owned iron ore mine at September 30, 2020:

Mine

Cleveland-Cliffs Inc.

ArcelorMittal USA

U.S. Steel

Hibbing

23.0%

62.3%

14.7%

The tables below summarize our material related party transactions:

Revenues from related parties were as follows:


	(Dollars In Millions)
	Three Months Ended September 30,									Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue from related parties	$	294.9		$	293.5		$	587.5		$	792.8
Revenues¹	$	1,646.0		$	555.6		$	3,097.8		$	1,455.8
Related party revenues as a percent of Revenues¹	17.9		%	52.8		%	19.0		%	54.5		%
Purchases from related parties	$	8.2		$	—		$	20.4		$	—

¹ Includes Realization of deferred revenue of $34.6 million for the nine months ended September 30, 2020.

The following table presents the classification of related party assets and liabilities in the Statements of Unaudited Condensed Consolidated Financial Position:


	(In Millions)
Balance Sheet Location	September 30, 2020		December 31, 2019
Accounts receivable, net	$	91.6	$	31.1
Other current assets	58.5		44.5
Accounts payable	(1.2)		—
Other current liabilities	(1.7)		(2.0)

Other current assets

A supply agreement with one customer provides for supplemental revenue or refunds to the customer based on the hot-rolled coil steel price at the time the product is consumed in the customer’s blast furnaces. The supplemental pricing is characterized as a freestanding derivative. Additionally, the customer also has certain provisional pricing arrangements where the difference between the estimated final revenue rate at the date of sale and the estimated final revenue rate at the measurement date is characterized as a derivative and is required to be accounted for separately once control has transferred upon delivery. Refer to NOTE 12 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES for further information.