CLEVELAND, April 28, 2015 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today reported first-quarter
results for the period ended March 31, 2015. Revenues were
$574 million not considering the
revised accounting treatment for North American Coal and the
Canadian Entities, as further discussed below. In addition,
adjusted EBITDA1 was $94
million. The following table provides a summary of revenues
and adjusted EBITDA1 by operating segment.
|
|
|
Revenues and
Adjusted EBITDA1 by Segment (in millions)
|
|
|
U.S.
Iron Ore
|
|
Asia Pacific Iron
Ore
|
|
North American
Coal
|
|
Corporate/
Other
|
|
Total
|
Q1 2015
Revenues
(in
millions)
|
|
$
|
311.8
|
|
|
$
|
134.2
|
|
|
$
|
116.6
|
|
|
$
|
11.3
|
|
|
$
|
573.9
|
|
Q1 2015 Adjusted
EBITDA1 (in millions)
|
|
$
|
105.1
|
|
|
$
|
5.7
|
|
|
$
|
5.5
|
|
|
$
|
(21.9)
|
|
|
$
|
94.4
|
|
Summary of the Revised Accounting Treatment
In January 2015, Cliffs announced
that Bloom Lake General Partner Limited and certain of its
affiliates, including Cliffs Quebec Iron Mining ULC (collectively,
the "Bloom Lake Group") commenced restructuring proceedings in
Montreal, Quebec, Canada under the
Companies' Creditors Arrangement Act (the "CCAA"). As a result of
the filing, the Company deconsolidated the Bloom Lake Group and
certain other wholly-owned subsidiaries (the "Canadian Entities")
effective January 27, 2015 and
historical operating results related to the former Eastern Canadian
Iron Ore and Ferroalloys operating segments are included in the
Company's financial statements and classified within discontinued
operations.
In addition, as of March 31, 2015,
management has determined that the North American Coal operating
segment met the criteria to be classified as held for sale. This
determination was made in light of North American Coal's treatment
as a non-core, non-strategic asset that the Company expects to
sell. As such, all current and historical North American Coal
operating segment results are included in the Company's financial
statements and classified within discontinued operations. This
accounting treatment has no impact on the operating plans for the
remaining two mines, which the Company expects to run at an
EBITDA-neutral level until a sale is concluded.
The discussion of the Company's results that follows takes into
account the impact of the North American Coal and the Canadian
Entities being treated as discontinued operations.
First-Quarter Consolidated Results
First-quarter 2015 consolidated revenues of $446 million decreased 28 percent from the prior
year's first quarter revenues of $616
million. The 2015 and 2014 amounts each exclude the revenue
contribution from North American Coal. Cost of goods sold decreased
by 14 percent to $365 million
compared to $426 million reported in
the first quarter of 2014. Similarly, the 2015 and 2014 amounts
each exclude the amount attributable to North American Coal.
For the first quarter of 2015, Cliffs recorded net income from
continuing operations attributable to Cliffs' common shareholders
of $167 million, or $0.94 per diluted share. These results include
the gain related to extinguishment of debt, as well as income tax
valuation allowances and other items. Excluding these items, Cliffs
reported first-quarter adjusted net income2 from
continuing operations of $2 million,
or $0.02 per diluted share.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, said, "Cliffs has
delivered another strong quarter in the face of a challenging
operating and commercial environment. The first quarter has
confirmed the strength of our pricing structure in the USIO
business, and our ability to continue to drive costs down in all
operating segments - USIO, APIO and NAC." Mr. Goncalves added, "We
are extremely pleased with the positive results of the recent
refinancing exercise, and we will continue to be focused on
reducing our debt and maximizing our liquidity."
Cliffs' first-quarter 2015 SG&A expenses were $29 million, a 22 percent decrease when compared
to a first-quarter 2014 expense of $38
million, as a result of reduced headcount and other cost
saving initiatives.
During the first quarter of 2015, miscellaneous - net income
increased to $20 million and included
a $14 million favorable impact from
foreign currency exchange re-measurements, among other items.
First-quarter 2015 results included an income tax expense of
$175 million versus an expense of
$30 million reported in the previous
year's comparable quarter. Of this amount, $166 million is related to the recording of
valuation allowances for certain U.S. deferred tax
assets.
The deconsolidation of the Canadian Entities resulted in a
pretax loss of $818 million, which
was recorded in Loss from Discontinued Operations. The pretax loss
includes the derecognition of the carrying value of the Canadian
Entities and the recording of remaining interests at fair value. In
addition, the company recorded an impairment charge related to
North American Coal of $73 million,
which was also included in Loss from Discontinued Operations.
During the quarter, the Company recorded a $314 million gain on extinguishment of debt. This
included $181 million related to
discount capture from the Company's previously announced exchange
offers and previously disclosed open-market repurchases, as well as
$147 million related to the
accounting treatment of the new second lien notes, representing the
discount between face value and fair value. This was partially
offset by a $14 million charge due to
write-offs of fees relating to the former revolving-credit
facility.
U.S. Iron
Ore
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Long Tons
|
|
|
|
|
Total sales
volume
|
|
2,947
|
|
|
2,837
|
|
Total production
volume
|
|
5,376
|
|
|
4,637
|
|
Sales Margin - In
Millions
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
311.8
|
|
|
$
|
361.3
|
|
Cost of goods sold
and operating expenses
|
|
231.8
|
|
|
266.3
|
|
Sales
margin
|
|
$
|
80.0
|
|
|
$
|
95.0
|
|
Sales Margin - Per
Long Ton
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
92.70
|
|
|
$
|
109.02
|
|
Cash production
cost3
|
|
64.98
|
|
|
81.15
|
|
Non-production cash
cost3
|
|
(6.79)
|
|
|
(15.73)
|
|
Cash
cost3
|
|
58.19
|
|
|
65.42
|
|
Depreciation,
depletion and amortization
|
|
7.36
|
|
|
10.12
|
|
Cost of goods sold
and operating expenses*
|
|
65.55
|
|
|
75.54
|
|
Sales
margin
|
|
$
|
27.15
|
|
|
$
|
33.48
|
|
|
|
|
|
|
* Excludes revenues
and expenses related to domestic freight, which are offsetting and
have no impact on sales margin. Revenues per ton also exclude
venture partner cost reimbursements.
|
U.S. Iron Ore pellet sales volume in the first quarter of 2015
was 2.9 million tons, a 4 percent increase when compared with 2.8
million tons sold in the first quarter of 2014. The increase was
primarily driven by more favorable shipping conditions in the Great
Lakes compared to the first quarter of 2014.
Cash production cost per ton3 in U.S. Iron Ore was
$64.98, down 20 percent from
$81.15 in the prior year's first
quarter. The decrease was driven by operating improvements, mainly
due to reduced energy and supply rates, increased production
volumes and reduced repair and maintenance expenditures.
Asia Pacific Iron
Ore
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Metric Tons
|
|
|
|
|
Total sales
volume
|
|
3,034
|
|
|
2,641
|
|
Total production
volume
|
|
2,879
|
|
|
2,790
|
|
Sales Margin - In
Millions
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
134.2
|
|
|
$
|
254.2
|
|
Cost of goods sold
and operating expenses
|
|
133.4
|
|
|
187.9
|
|
Sales
margin
|
|
$
|
0.8
|
|
|
$
|
66.3
|
|
Sales Margin - Per
Metric Ton
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
42.81
|
|
|
$
|
96.25
|
|
Cash production
cost3
|
|
36.77
|
|
|
50.72
|
|
Non-production cash
cost3
|
|
3.70
|
|
|
5.62
|
|
Cash
cost3
|
|
40.47
|
|
|
56.34
|
|
Depreciation,
depletion and amortization
|
|
2.08
|
|
|
14.80
|
|
Cost of goods sold
and operating expenses*
|
|
42.55
|
|
|
71.14
|
|
Sales
margin
|
|
$
|
0.26
|
|
|
$
|
25.11
|
|
|
|
|
|
|
*Excludes revenues
and expenses related to freight, which are offsetting and have no
impact on sales margin.
|
First-quarter 2015 Asia Pacific Iron Ore sales volume increased
15 percent to 3.0 million tons, from 2.6 million tons in 2014's
first quarter. The increase was driven by a favorable first-quarter
shipping schedule.
Cash production cost per ton3 in Asia Pacific Iron
Ore was $36.77, down 28 percent from
$50.72 in the prior year's first
quarter. The decrease was driven primarily by reduced mining and
administrative costs, as well as favorable exchange rate variances
of approximately $5 per ton.
North American
Coal
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Short Tons
|
|
|
|
|
Total sales
volume
|
|
1,338
|
|
|
1,571
|
|
Total production
volume
|
|
1,396
|
|
|
1,705
|
|
Sales Margin - In
Millions
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
116.6
|
|
|
$
|
166.2
|
|
Cost of goods sold
and operating expenses
|
|
107.3
|
|
|
214.6
|
|
Sales
margin
|
|
$
|
9.3
|
|
|
$
|
(48.4)
|
|
Sales Margin - Per
Short Ton
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
70.93
|
|
|
$
|
88.61
|
|
Cash production
cost3
|
|
60.18
|
|
|
80.02
|
|
Non-production cash
cost3
|
|
1.40
|
|
|
20.36
|
|
Cash
cost3
|
|
61.58
|
|
|
100.38
|
|
Depreciation,
depletion and amortization
|
|
2.39
|
|
|
19.03
|
|
Cost of goods sold
and operating expenses*
|
|
63.97
|
|
|
119.41
|
|
Sales
margin
|
|
$
|
6.96
|
|
|
$
|
(30.80)
|
|
|
|
|
|
|
* Excludes revenues
and expenses related to domestic freight, which are offsetting and
have no impact on sales margin.
|
North American Coal sales volume in the first quarter of 2015
was 1.3 million tons, a 15 percent decrease when compared with 1.6
million tons sold in the first quarter of 2014. The decrease was
primarily driven by the divestiture of Cliffs Logan County Coal,
partially offset by increased sales from Pinnacle due to new
customer contracts.
Cash production cost per ton3 in North American Coal
was $60.18, down 25 percent from
$80.02 in the prior year's first
quarter. The decrease was primarily driven by higher volumes from
the remaining two mines, as well as reduced staff costs, contractor
spending and repairs.
Cash Flow and Liquidity
Due to the usual seasonality of the business during the first
quarter, working capital adjustments drove a cash use of
$236 million during the quarter.
To further supplement the Company's liquidity position, during
the quarter Cliffs successfully completed an offering of
$540 million aggregate principal
amount of 8.25% Senior Secured Notes due March 31, 2020. From the offering of these new
first lien notes, the Company received net proceeds, after the
initial purchasers' discounts and the payment of fees and expenses,
of approximately $491 million.
At the end of first quarter of 2015, Cliffs had net
debt4 of $2.5 billion,
compared to $2.9 billion of net
debt4 at the end of the first quarter of 2014. There was
nothing drawn on the Company's new asset-based lending facility at
the end of the first quarter of 2015. Such reduction in net
debt4 was a consequence of several actions including
previously-announced exchange offers and open-market bond
repurchases.
Capital expenditures during the quarter were $16 million, an 85 percent decrease compared to
$103 million in first quarter of
2014. This includes capital expenditures related to North American
Coal. Cliffs also reported depreciation, depletion and amortization
of $33 million in the first quarter
of 2015.
Outlook
Cliffs provides full-year expected revenues-per-ton ranges based
on different assumptions of seaborne iron ore prices. Cliffs
indicated that each different pricing assumption holds all other
assumptions constant, including customer mix, as well as industrial
commodity prices, freight rates, energy prices, production input
costs and/or hot-band steel prices (all factors contained in
certain of Cliffs' supply agreements).
The table below provides certain Platts IODEX averages for the
remaining nine months and the corresponding full-year realization
for the U.S. Iron Ore and Asia Pacific Iron Ore segments. The
estimates consider actual Platts IODEX rates for the first quarter.
Cliffs previously furnished 2015 pricing expectations on
February 2, 2015. Due to favorable
changes in freight rates and customer mix, partially offset by
reduced steel price assumptions, the Company has since raised its
revenues-per-ton expectations for U.S. Iron Ore. In addition, due
to increased lump premium assumptions, revenues-per-ton
expectations in Asia Pacific Iron Ore increased as well.
2015 Full-Year
Realized Revenues-Per-Ton Range Summary
|
Apr. - Dec. Platts
IODEX (1)
|
|
U.S. Iron Ore
(2)
|
|
Asia Pacific Iron
Ore (3)
|
$30
|
|
$75 - $80
|
|
$20 - $25
|
$35
|
|
$75 - $80
|
|
$25 - $30
|
$40
|
|
$75 - $80
|
|
$30 - $35
|
$45
|
|
$80 - $85
|
|
$30 - $35
|
$50
|
|
$80 - $85
|
|
$35 - $40
|
$55
|
|
$80 - $85
|
|
$40 - $45
|
$60
|
|
$80 - $85
|
|
$40 - $45
|
$65
|
|
$80 - $85
|
|
$45 - $50
|
$70
|
|
$80 - $85
|
|
$50 - $55
|
$75
|
|
$80 - $85
|
|
$50 - $55
|
$80
|
|
$85 - $90
|
|
$55 - $60
|
(1)
|
The Platts IODEX is
the benchmark assessment based on a standard specification of iron
ore fines with 62% iron content (C.F.R. China).
|
(2)
|
U.S. Iron Ore tons
are reported in long tons of pellets.
|
(3)
|
Asia Pacific Iron Ore
tons are reported in metric tons of lump and fines, F.O.B. the
port.
|
|
|
|
|
|
|
U.S. Iron Ore Outlook (Long Tons)
For 2015, the Company is lowering its full-year sales and
production volume expectation to 20.5 million tons of iron ore
pellets, reflecting currently low capacity utilization rates among
U.S. steel producers, mainly attributed to heavy imported steel
penetration. A majority of the tonnage removed from the
outlook was priced below average realizations and was related to a
higher cost of production. Given these factors, as well as
the positive impact of SG&A reductions (see "SG&A
Expenses and Other Expectations") and other cost reductions,
the overall impact on total EBITDA for the year is expected to be
neutral-to-positive when compared to the previous forecast.
Despite the reduction in production tonnage, Cliffs is
maintaining its previous cash production cost
expectation3 of $55 - $60
per ton and the previous cash cost of goods sold per
ton3 expectation of $60 -
$65.
Depreciation, depletion and amortization for full-year 2015 is
expected to be approximately $5 per
ton.
Asia Pacific Iron Ore Outlook (Metric Tons, F.O.B. the
port)
Cliffs is maintaining its full-year 2015 Asia Pacific Iron Ore
expected sales and production volumes of approximately 11
million tons. The product mix is expected to contain 51 percent
lump and 49 percent fines. This expectation assumes no divestiture
of this business in 2015, which may or may not occur.
Based on a full-year average exchange rate of $0.77 U.S. Dollar to Australian Dollar, the
Company's full-year 2015 Asia Pacific Iron Ore cash production cost
per ton3 expectation has been lowered to $30 - $35. Cliffs' cash cost of goods sold per
ton3 expectation has been lowered to $35 - $40. This expectation reflects additional
operational improvements in light of current market conditions as
well as a more favorable foreign exchange rate expectation.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $3 per ton for
full-year 2015.
North American Coal Outlook
The Company will no longer be providing detailed outlook for its
North American Coal business as a result of its accounting
treatment, as previously explained in this release.
The following table provides a summary of Cliffs' 2015 guidance
for its two continuing business segments:
|
|
2015 Outlook
Summary
|
|
|
U.S. Iron Ore
(A)
|
Asia
Pacific
Iron Ore
(B)
|
Sales volume
(million tons)
|
20.5
|
|
11
|
|
Production volume
(million tons)
|
20.5
|
|
11
|
|
Cash production
cost per ton3
|
$55 -
$60
|
|
$30 -
$35
|
|
Cash cost of goods
sold per ton3
|
$60 -
$65
|
|
$35 -
$40
|
|
DD&A per
ton
|
$5
|
|
$3
|
|
(A)
|
U.S. Iron Ore tons
are reported in long tons of pellets.
|
(B)
|
Asia Pacific Iron Ore
tons are reported in metric tons of lumps and fines.
|
SG&A Expenses and Other Expectations
Cliffs is lowering its full-year 2015 SG&A expense
expectation to $120 million, a
$20 million reduction from its
previous expectation of $140
million.
Cliffs no longer anticipates any spending related to
exploration.
Consolidated full-year 2015 depreciation, depletion and
amortization is expected to be approximately $140 million.
Capital Budget Update
Cliffs is lowering its full-year 2015 capital expenditures
budget to a range of $100 - $125
million, from its previous expectation of $125 - $150 million. This reduction reflects a
continued focus on reducing expenditures. The spending range
includes outflows related to North American Coal and assumes no
additional asset divestitures.
Conference Call Information
Cliffs Natural Resources Inc. will host a conference call
tomorrow, April 29, 2015, at
10 a.m. ET. The call will be
broadcast live and archived on Cliffs' website:
www.cliffsnaturalresources.com.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is a leading mining and natural
resources company in the United
States. The Company is a major supplier of iron ore pellets
to the North American steel industry from its mines and pellet
plants located in Michigan and
Minnesota. Cliffs also operates an
iron ore mining complex in Western
Australia. Additionally, Cliffs produces low-volatile
metallurgical coal in the U.S. from its mines located in
Alabama and West Virginia. Driven by the core values of
safety, social, environmental and capital stewardship, Cliffs'
employees endeavor to provide all stakeholders operating and
financial transparency. News releases and other information on the
Company are available at:
http://www.cliffsnaturalresources.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the federal securities laws. Although Cliffs believes
that these forward-looking statements and the underlying
assumptions are reasonable, we cannot assure you that they will
prove to be correct. Forward-looking statements involve a number of
risks and uncertainties, and there are factors that could cause
actual results to differ materially from those expressed or implied
in our forward-looking statements. These risk factors include
without limitation: our ability to successfully execute an exit
option for our Canadian entities that minimizes the cash outflows
and associated liabilities of such entities, including the
Companies' Creditors Arrangement Act (Canada) process; trends affecting our
financial condition, results of operations or future prospects,
particularly the continued volatility of iron ore and coal prices;
our actual levels of capital spending; availability of capital and
our ability to maintain adequate liquidity and successfully
implement our financing plans; uncertainty or weaknesses in global
economic conditions, including downward pressure on prices, reduced
market demand and any slowing of the economic growth rate in
China; our ability to successfully
identify and consummate any strategic investments and complete
planned divestitures; the outcome of any contractual disputes with
our customers, joint venture partners or significant energy,
material or service providers or any other litigation or
arbitration; the ability of our customers and joint venture
partners to meet their obligations to us on a timely basis or at
all; our ability to reach agreement with our iron ore customers
regarding any modifications to sales contract provisions; the
impact of price-adjustment factors on our sales contracts; changes
in sales volume or mix; our actual economic iron ore and coal
reserves or reductions in current mineral estimates, including
whether any mineralized material qualifies as a reserve; the impact
of our customers using other methods to produce steel or reducing
their steel production; events or circumstances that could impair
or adversely impact the viability of a mine and the carrying value
of associated assets, as well as any resulting impairment charges;
the results of prefeasibility and feasibility studies in relation
to projects; impacts of existing and increasing governmental
regulation and related costs and liabilities, including failure to
receive or maintain required operating and environmental permits,
approvals, modifications or other authorization of, or from, any
governmental or regulatory entity and costs related to implementing
improvements to ensure compliance with regulatory changes; our
ability to cost-effectively achieve planned production rates or
levels; uncertainties associated with natural disasters, weather
conditions, unanticipated geological conditions, supply or price of
energy, equipment failures and other unexpected events; adverse
changes in currency values, currency exchange rates, interest rates
and tax laws; our ability to maintain appropriate relations with
unions and employees and enter into or renew collective bargaining
agreements on satisfactory terms; risks related to international
operations; availability of capital equipment and component parts;
the potential existence of significant deficiencies or material
weakness in our internal control over financial reporting; problems
or uncertainties with productivity, tons mined, transportation,
mine-closure obligations, environmental liabilities,
employee-benefit costs and other risks of the mining industry; and
other factors and risks that are set forth in the Company's most
recently filed reports with the U.S. Securities and Exchange
Commission. The information contained herein speaks as of the date
of this release and may be superseded by subsequent events. Except
as may be required by applicable securities laws, we do not
undertake any obligation to revise or update any forward-looking
statements contained in this release.
FINANCIAL TABLES FOLLOW
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED
OPERATIONS
|
|
|
|
(In Millions,
Except Per Share Amounts)
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
REVENUES FROM PRODUCT
SALES AND SERVICES
|
|
|
|
|
Product
|
|
$
|
399.5
|
|
|
$
|
559.2
|
|
Freight and venture
partners' cost reimbursements
|
|
46.5
|
|
|
56.3
|
|
|
|
446.0
|
|
|
615.5
|
|
COST OF GOODS SOLD
AND OPERATING EXPENSES
|
|
(365.2)
|
|
|
(425.5)
|
|
SALES
MARGIN
|
|
80.8
|
|
|
190.0
|
|
OTHER OPERATING
INCOME (EXPENSE)
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(29.1)
|
|
|
(37.5)
|
|
Miscellaneous -
net
|
|
20.2
|
|
|
(13.3)
|
|
|
|
(8.9)
|
|
|
(50.8)
|
|
OPERATING
INCOME
|
|
71.9
|
|
|
139.2
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
Interest expense,
net
|
|
(42.9)
|
|
|
(40.4)
|
|
Gain on
extinguishment of debt
|
|
313.7
|
|
|
—
|
|
Other non-operating
income (expense)
|
|
(0.8)
|
|
|
0.8
|
|
|
|
270.0
|
|
|
(39.6)
|
|
INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY LOSS FROM
VENTURES
|
|
341.9
|
|
|
99.6
|
|
INCOME TAX
EXPENSE
|
|
(175.1)
|
|
|
(29.6)
|
|
EQUITY LOSS FROM
VENTURES, net of tax
|
|
—
|
|
|
(0.3)
|
|
INCOME FROM
CONTINUING OPERATIONS
|
|
166.8
|
|
|
69.7
|
|
LOSS FROM
DISCONTINUED OPERATIONS, net of tax
|
|
(928.5)
|
|
|
(140.4)
|
|
NET LOSS
|
|
(761.7)
|
|
|
(70.7)
|
|
LOSS ATTRIBUTABLE TO
NONCONTROLLING INTEREST (2015 - Loss of $7.7 million related to
Discontinued Operations, 2014 - Loss of $7.3 million related to
Discontinued Operations)
|
|
1.9
|
|
|
0.4
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS SHAREHOLDERS
|
|
$
|
(759.8)
|
|
|
$
|
(70.3)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
(12.8)
|
|
|
(12.8)
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS COMMON SHAREHOLDERS
|
|
$
|
(772.6)
|
|
|
$
|
(83.1)
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC
|
|
|
|
|
Continuing
operations
|
|
$
|
1.02
|
|
|
$
|
0.37
|
|
Discontinued
operations
|
|
(6.06)
|
|
|
(0.92)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC
|
|
$
|
(5.04)
|
|
|
$
|
(0.55)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS -
DILUTED
|
|
|
|
|
Continuing
operations
|
|
$
|
0.94
|
|
|
$
|
0.37
|
|
Discontinued
operations
|
|
(5.20)
|
|
|
(0.91)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS -
DILUTED
|
|
$
|
(4.26)
|
|
|
$
|
(0.54)
|
|
AVERAGE NUMBER OF
SHARES (IN THOUSANDS)
|
|
|
|
|
Basic
|
|
153,185
|
|
|
153,040
|
|
Diluted
|
|
178,696
|
|
|
153,653
|
|
CASH DIVIDENDS
DECLARED PER DEPOSITARY SHARE
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
CASH DIVIDENDS
DECLARED PER COMMON SHARE
|
|
$
|
—
|
|
|
$
|
0.15
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
POSITION
|
|
|
|
(In
Millions)
|
|
|
March 31,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
355.7
|
|
|
$
|
271.3
|
|
Accounts receivable,
net
|
|
87.1
|
|
|
122.7
|
|
Inventories
|
|
408.5
|
|
|
260.1
|
|
Supplies and other
inventories
|
|
120.4
|
|
|
118.6
|
|
Income tax
receivable
|
|
165.5
|
|
|
217.6
|
|
Short-term assets of
discontinued operations
|
|
197.2
|
|
|
330.6
|
|
Other current
assets
|
|
190.0
|
|
|
128.0
|
|
TOTAL CURRENT
ASSETS
|
|
1,524.4
|
|
|
1,448.9
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
|
1,047.2
|
|
|
1,070.5
|
|
OTHER
ASSETS
|
|
|
|
|
Long-term assets of
discontinued operations
|
|
—
|
|
|
400.1
|
|
Other non-current
assets
|
|
131.0
|
|
|
244.5
|
|
TOTAL OTHER
ASSETS
|
|
131.0
|
|
|
644.6
|
|
TOTAL
ASSETS
|
|
$
|
2,702.6
|
|
|
$
|
3,164.0
|
|
LIABILITIES
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$
|
114.3
|
|
|
$
|
166.1
|
|
Accrued
expenses
|
|
167.1
|
|
|
201.7
|
|
Short-term
liabilities of discontinued operations
|
|
265.0
|
|
|
400.6
|
|
Other current
liabilities
|
|
300.1
|
|
|
190.2
|
|
TOTAL CURRENT
LIABILITIES
|
|
846.5
|
|
|
958.6
|
|
PENSION AND
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
250.2
|
|
|
259.7
|
|
ENVIRONMENTAL AND
MINE CLOSURE OBLIGATIONS
|
|
165.6
|
|
|
165.6
|
|
LONG-TERM
DEBT
|
|
2,880.9
|
|
|
2,843.3
|
|
LONG-TERM LIABILITIES
OF DISCONTINUED OPERATIONS
|
|
125.2
|
|
|
436.1
|
|
OTHER
LIABILITIES
|
|
216.3
|
|
|
235.0
|
|
TOTAL
LIABILITIES
|
|
4,484.7
|
|
|
4,898.3
|
|
EQUITY
|
|
|
|
|
CLIFFS SHAREHOLDERS'
DEFICIT
|
|
(1,995.7)
|
|
|
(1,431.3)
|
|
NONCONTROLLING
INTEREST (DEFICIT)
|
|
213.6
|
|
|
(303.0)
|
|
TOTAL
DEFICIT
|
|
(1,782.1)
|
|
|
(1,734.3)
|
|
TOTAL LIABILITIES AND
DEFICIT
|
|
$
|
2,702.6
|
|
|
$
|
3,164.0
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH
FLOWS
|
|
|
|
(In
Millions)
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net loss
|
|
$
|
(761.7)
|
|
|
$
|
(70.7)
|
|
Adjustments to
reconcile net loss to net cash provided (used) by operating
activities:
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
33.0
|
|
|
141.1
|
|
Impairment of
long-lived assets
|
|
76.6
|
|
|
—
|
|
Deferred income
taxes
|
|
165.8
|
|
|
15.1
|
|
Gain on
extinguishment of debt
|
|
(313.7)
|
|
|
—
|
|
Loss on
deconsolidation, net of cash deconsolidated
|
|
776.1
|
|
|
—
|
|
Other
|
|
31.6
|
|
|
3.2
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables and other
assets
|
|
71.7
|
|
|
161.5
|
|
Product
inventories
|
|
(154.9)
|
|
|
(214.5)
|
|
Payables and accrued
expenses
|
|
(152.7)
|
|
|
(117.7)
|
|
Net cash used by
operating activities
|
|
(228.2)
|
|
|
(82.0)
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(15.9)
|
|
|
(103.3)
|
|
Other investing
activities
|
|
0.2
|
|
|
12.6
|
|
Net cash used by
investing activities
|
|
(15.7)
|
|
|
(90.7)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Proceeds from first
lien notes offering
|
|
503.5
|
|
|
—
|
|
Debt issuance
costs
|
|
(33.1)
|
|
|
—
|
|
Repurchase of
debt
|
|
(133.3)
|
|
|
—
|
|
Borrowings under
credit facilities
|
|
295.0
|
|
|
225.0
|
|
Repayment under
credit facilities
|
|
(295.0)
|
|
|
—
|
|
Common stock
dividends
|
|
—
|
|
|
(23.0)
|
|
Preferred stock
dividends
|
|
(12.8)
|
|
|
(12.8)
|
|
Other financing
activities
|
|
(14.3)
|
|
|
8.7
|
|
Net cash provided by
financing activities
|
|
310.0
|
|
|
197.9
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(1.3)
|
|
|
3.3
|
|
INCREASE IN CASH AND
CASH EQUIVALENTS
|
|
64.8
|
|
|
28.5
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
290.9
|
|
|
335.5
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
355.7
|
|
|
$
|
364.0
|
|
1 CLIFFS NATURAL RESOURCES
INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION - EBITDA
AND ADJUSTED EBITDA
In addition to the consolidated financial statements presented
in accordance with U.S. GAAP, the Company has presented EBITDA and
adjusted EBITDA on both a consolidated basis and on a segment
basis, which are non-GAAP financial measures that management uses
in evaluating operating performance. The presentation of these
measures is not intended to be considered in isolation from, as a
substitute for, or as superior to, the financial information
prepared and presented in accordance with U.S. GAAP. The
presentation of these measures may be different from non-GAAP
financial measures used by other companies. A reconciliation of
these measures on a segment basis is provided on page 2 of the news
release. A reconciliation of these consolidated measures to their
most directly comparable GAAP measures is provided in the table
below.
|
|
(In
Millions)
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
Net Loss
|
|
$
|
(761.7)
|
|
|
$
|
(70.7)
|
|
Less:
|
|
|
|
|
Interest expense,
net
|
|
(44.2)
|
|
|
(42.7)
|
|
Income tax benefit
(expense)
|
|
(175.0)
|
|
|
21.8
|
|
Depreciation,
depletion and amortization
|
|
(33.0)
|
|
|
(141.1)
|
|
EBITDA
|
|
$
|
(509.5)
|
|
|
$
|
91.3
|
|
Less:
|
|
|
|
|
Impact of
discontinued operations
|
|
$
|
(924.1)
|
|
|
$
|
(118.1)
|
|
Gain on
extinguishment of debt
|
|
313.7
|
|
|
—
|
|
North American Coal
operations impact
|
|
(5.5)
|
|
|
18.2
|
|
Severance in
SG&A
|
|
(1.5)
|
|
|
(6.0)
|
|
Foreign exchange
remeasurement
|
|
13.5
|
|
|
(11.4)
|
|
Adjusted
EBITDA
|
|
$
|
94.4
|
|
|
$
|
208.6
|
|
2 CLIFFS NATURAL RESOURCES
INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION - ADJUSTED
EARNINGS
In addition to the consolidated financial statements presented
in accordance with U.S. GAAP, the Company has presented Adjusted
Net Income attributable to Cliffs' shareholders, which is a
non-GAAP financial measure that management uses in evaluating
operating performance. The presentation of this measure is not
intended to be considered in isolation from, as a substitute for,
or as superior to, the financial information prepared and presented
in accordance with U.S. GAAP. The presentation of this measure may
be different from non-GAAP financial measures used by other
companies. A reconciliation of this measure to its most directly
comparable GAAP measure is provided in the table below.
|
(In
Millions)
|
|
|
Three Months
Ended
March 31,
|
|
|
2015
|
|
2014
|
Net Income from
Continuing Operations Attributable to Cliffs
Shareholders
|
|
$
|
168.7
|
|
|
$
|
70.1
|
|
Loss from
Discontinued Operations, net of tax
|
|
(928.5)
|
|
|
(140.4)
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS SHAREHOLDERS
|
|
$
|
(759.8)
|
|
|
$
|
(70.3)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
(12.8)
|
|
|
(12.8)
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS COMMON SHAREHOLDERS
|
|
$
|
(772.6)
|
|
|
$
|
(83.1)
|
|
Less:
|
|
|
|
|
Gain on
extinguishment of debt
|
|
313.7
|
|
|
—
|
|
Foreign exchange
remeasurement
|
|
13.5
|
|
|
(11.4)
|
|
Severance in
SG&A
|
|
(1.5)
|
|
|
(6.0)
|
|
Tax effect of
adjustments
|
|
(6.3)
|
|
|
2.1
|
|
Income tax valuation
allowances
|
|
(165.8)
|
|
|
—
|
|
NET INCOME FROM
CONTINUING OPERATIONS ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS -
ADJUSTED
|
|
$
|
2.3
|
|
|
$
|
72.6
|
|
Weighted Average
Number of Shares:
|
|
|
|
|
Basic
|
|
153.2
|
|
|
153.0
|
|
Depositary
Shares
|
|
25.2
|
|
|
—
|
|
Employee Stock
Plans
|
|
0.3
|
|
|
0.6
|
|
Diluted
|
|
178.7
|
|
|
153.6
|
|
Adjusted Earnings per
Common Share Attributable to
Cliffs Common Shareholders - Basic:
|
|
|
|
|
Continuing
operations
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
Discontinued
operations
|
|
(6.06)
|
|
|
(0.92)
|
|
|
|
$
|
(6.04)
|
|
|
$
|
(0.53)
|
|
Adjusted Earnings per
Common Share Attributable to
Cliffs Common Shareholders - Diluted:
|
|
|
|
|
Continuing
operations
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
Discontinued
operations
|
|
(5.20)
|
|
|
(0.91)
|
|
|
|
$
|
(5.18)
|
|
|
$
|
(0.52)
|
|
3 CLIFFS NATURAL RESOURCES
INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
EXPLANATIONS
Cash production cost, non-production cash cost, and cash cost
per ton are non-GAAP financial measures that management uses in
evaluating operating performance. The presentation of these
measures is not intended to be considered in isolation from, as a
substitute for, or as superior to, the financial information
prepared and presented in accordance with U.S. GAAP. The
presentation of these measures may be different from non-GAAP
financial measures used by other companies.
- Cash production cost per ton is defined as cost of goods sold
and operating expenses per ton less depreciation, depletion and
amortization; as well as period costs, costs of services and
inventory effects per ton.
- Non-production cash cost per ton is defined as the sum of period
costs (including royalties), costs of services, and inventory
effects per ton.
- Cash cost per ton is defined as cost of goods sold and
operating expenses per ton less depreciation, depletion and
amortization per ton.
4 NET DEBT
RECONCILIATION
Net debt is a non-GAAP financial measures that management uses
in evaluating financial position. The presentation of this measure
is not intended to be considered in isolation from, as a substitute
for, or as superior to, the financial information prepared and
presented in accordance with U.S. GAAP. The presentation of these
measures may be different from non-GAAP financial measures used by
other companies. Net debt is defined as long-term debt plus the
current portion of short term debt, less cash and cash equivalents.
A reconciliation of this consolidated measure to its most directly
comparable GAAP measures is provided in the table below.
|
|
(In
Millions)
|
|
|
March 31,
2015
|
|
March 31,
2014
|
Long-term
debt
|
|
$
|
2,880.9
|
|
|
$
|
3,194.8
|
|
Short-term debt and
current portion of long-term debt
|
|
—
|
|
|
96.9
|
|
Total Debt
|
|
$
|
2,880.9
|
|
|
$
|
3,291.7
|
|
Less:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
355.7
|
|
|
$
|
364.0
|
|
Net Debt
|
|
$
|
2,525.2
|
|
|
$
|
2,927.7
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-reports-first-quarter-2015-results-300073739.html
SOURCE Cliffs Natural Resources Inc.