CLEVELAND, July 29, 2015 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today reported second-quarter results
for the period ended June 30, 2015. Second-quarter 2015
consolidated revenues of $498 million
decreased 33 percent from the prior year's second quarter revenues
of $748 million. Cost of goods sold
decreased by 22 percent to $441
million compared to $564
million reported in the second quarter of 2014.
For the second quarter of 2015, Cliffs recorded net income
attributable to Cliffs' common shareholders of $60 million, or $0.39 of earnings per diluted share, compared to
a net loss attributable to Cliffs' common shareholders of
$2 million, or $0.02 per diluted share recorded in the second
quarter of 2014.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, said, "Over the
past twelve months we have taken actions to protect the long-term
viability of Cliffs. These include the elimination of a revolver
with restrictive covenants, the removal of loss-making Eastern
Canadian Iron Ore, the divestiture of several non-core assets, the
significant reduction of SG&A and capital expenditures, and the
optimization of costs in U.S. Iron Ore and Asia Pacific Iron Ore."
Mr. Goncalves added, "As actions are taken to combat the influence
of unfairly-traded steel in the United
States, we expect to see improved industry operating
conditions and profitability in the second half of this year."
For the second-quarter 2015, adjusted EBITDA1 was
$65 million.
|
|
Adjusted
EBITDA1 by Segment (in millions)
|
|
|
U.S.
Iron Ore
|
|
Asia Pacific
Iron Ore
|
|
Corporate/
Other
|
|
Total
|
Q2 2015
Adjusted
EBITDA1 (in millions)
|
|
$
|
77.2
|
|
|
$
|
17.4
|
|
|
$
|
(29.7)
|
|
|
$
|
64.9
|
|
YTD 2015
Adjusted
EBITDA1 (in millions)
|
|
$
|
182.3
|
|
|
$
|
23.1
|
|
|
$
|
(51.5)
|
|
|
$
|
153.9
|
|
Cliffs' second-quarter 2015 SG&A expenses were $31 million, a 25 percent decrease when compared
to the second-quarter 2014 expense of $41
million, as a result of reduced headcount and other
continued cost saving initiatives.
Cliffs' second-quarter 2015 interest expense was $64 million, a 51 percent increase when compared
to a second-quarter 2014 expense of $42
million. The increase was primarily driven by the issuance
of secured notes during the first quarter of 2015. The Company
noted that of the $64 million
recorded, $56 million is a cash
expense and the remaining $8 million
is non-cash.
U.S. Iron
Ore
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Long Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
4,244
|
|
|
4,337
|
|
|
7,190
|
|
|
7,174
|
|
Total production
volume
|
|
5,503
|
|
|
5,805
|
|
|
10,879
|
|
|
10,442
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
369.7
|
|
|
$
|
514.6
|
|
|
$
|
681.5
|
|
|
$
|
875.9
|
|
Cost of goods sold
and operating expenses
|
|
320.7
|
|
|
367.4
|
|
|
552.5
|
|
|
633.7
|
|
Sales
margin
|
|
$
|
49.0
|
|
|
$
|
147.2
|
|
|
$
|
129.0
|
|
|
$
|
242.2
|
|
Sales Margin - Per
Long Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
78.32
|
|
|
$
|
106.80
|
|
|
$
|
84.23
|
|
|
$
|
107.68
|
|
Cash production
cost3
|
|
56.06
|
|
|
61.37
|
|
|
60.36
|
|
|
69.62
|
|
Non-production cash
cost3
|
|
5.53
|
|
|
5.36
|
|
|
(0.15)
|
|
|
(3.41)
|
|
Cash
cost3
|
|
61.59
|
|
|
66.73
|
|
|
60.21
|
|
|
66.21
|
|
Depreciation,
depletion and amortization
|
|
5.18
|
|
|
6.13
|
|
|
6.08
|
|
|
7.71
|
|
Cost of goods sold
and operating expenses*
|
|
66.77
|
|
|
72.86
|
|
|
66.29
|
|
|
73.92
|
|
Sales
margin
|
|
$
|
11.55
|
|
|
$
|
33.94
|
|
|
$
|
17.94
|
|
|
$
|
33.76
|
|
|
|
|
|
|
|
|
|
|
* 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 second quarter of 2015
was 4.2 million tons, a 2 percent decrease when compared to the
second quarter of 2014. The decrease was driven by reduced
year-over-year export sales and lower demand by U.S. mills,
partially offset by improved shipping conditions on the Great
Lakes.
Cash production cost per ton3 in U.S. Iron Ore was
$56.06, down 9 percent from
$61.37 in the prior year's second
quarter. The decrease was driven by a reduction in salaried
workforce headcount and overall reductions in employment costs
along with a year-over-year reduction in energy rates. This
was partially offset by decreases in production volume due to
scheduled maintenance and repairs.
Realized revenue rates of $78.32
per ton were lower than previously guided as a result of a
significant adjustment to the hot-band steel price estimate for one
major contract. The adjustment to hot-band estimates was based on
updated quarter-end forecasts provided by the customer. This
adjustment drove a $5 per ton
reduction in realized pricing and a $20
million reduction in Adjusted EBITDA for U.S. Iron Ore
during the quarter.
Asia Pacific Iron
Ore
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Metric Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
2,750
|
|
|
2,900
|
|
|
5,784
|
|
|
5,541
|
|
Total production
volume
|
|
2,847
|
|
|
2,731
|
|
|
5,727
|
|
|
5,521
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
128.4
|
|
|
$
|
233.1
|
|
|
$
|
262.6
|
|
|
$
|
487.3
|
|
Cost of goods sold
and operating expenses
|
|
120.1
|
|
|
197.1
|
|
|
253.5
|
|
|
385.0
|
|
Sales
margin
|
|
$
|
8.3
|
|
|
$
|
36.0
|
|
|
$
|
9.1
|
|
|
$
|
102.3
|
|
Sales Margin - Per
Metric Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
44.29
|
|
|
$
|
80.38
|
|
|
$
|
43.53
|
|
|
$
|
87.94
|
|
Cash production
cost3
|
|
34.32
|
|
|
51.59
|
|
|
35.56
|
|
|
51.09
|
|
Non-production cash
cost3
|
|
4.52
|
|
|
1.79
|
|
|
4.15
|
|
|
3.70
|
|
Cash
cost3
|
|
38.84
|
|
|
53.38
|
|
|
39.71
|
|
|
54.79
|
|
Depreciation,
depletion and amortization
|
|
2.44
|
|
|
14.59
|
|
|
2.25
|
|
|
14.69
|
|
Cost of goods sold
and operating expenses*
|
|
41.28
|
|
|
67.97
|
|
|
41.96
|
|
|
69.48
|
|
Sales
margin
|
|
$
|
3.01
|
|
|
$
|
12.41
|
|
|
$
|
1.57
|
|
|
$
|
18.46
|
|
|
|
|
|
|
|
|
|
|
*Excludes revenues
and expenses related to freight, which are offsetting and have no
impact on sales margin.
|
Second-quarter 2015 Asia Pacific Iron Ore sales volume decreased
5 percent to 2.8 million tons, from 2.9 million tons in 2014's
second quarter. The volume decrease was driven by the impact of
previously scheduled port maintenance activities.
Cash production cost per ton3 in Asia Pacific Iron
Ore was $34.32, down 33 percent from
$51.59 in the prior year's second
quarter. The decrease was driven primarily by reduced mining and
administrative costs, as well as favorable exchange rate variances
of approximately $7 per ton.
Cash Flow and Liquidity
Due to the usual seasonality of the business during the first
half of the year, higher levels of working capital drove a
year-to-date cash use of $236
million.
At the end of second quarter of 2015, Cliffs had net
debt4 of $2.6 billion,
compared to $3.1 billion of net
debt4 at the end of the second quarter of 2014. There
were no borrowings on the Company's asset-based lending facility at
the end of the second quarter of 2015. The reduction in net
debt4 was a consequence of several actions including
asset sales, exchange offers and open-market bond repurchases
during the prior twelve months.
Capital expenditures during the quarter were $19 million, a 70 percent decrease compared to
$61 million in second quarter of
2014. This includes capital expenditures related to North American
Coal. Cliffs also reported depreciation, depletion and amortization
of $31 million in the second 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 six 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 half of
2015. Cliffs previously furnished 2015 pricing expectations on
April 28, 2015. Due primarily to a
significant price forecast adjustment for hot-band steel for one
major customer contract based on information provided by that
customer, Cliffs has lowered its revenues-per-ton expectations for
U.S. Iron Ore. Expectations of revenue realizations for Asia
Pacific Iron Ore have not changed significantly since the end of
the first quarter.
2015 Full-Year
Realized Revenues-Per-Ton Range Summary
|
July - Dec.
Platts IODEX (1)
|
|
U.S. Iron Ore
(2)
|
|
Asia Pacific Iron
Ore (3)
|
$30
|
|
$75 - $80
|
|
$30 - $35
|
$35
|
|
$75 - $80
|
|
$30 - $35
|
$40
|
|
$75 - $80
|
|
$35 - $40
|
$45
|
|
$75 - $80
|
|
$35 - $40
|
$50
|
|
$75 - $80
|
|
$35 - $40
|
$55
|
|
$75 - $80
|
|
$40 - $45
|
$60
|
|
$75 - $80
|
|
$40 - $45
|
$65
|
|
$80 - $85
|
|
$45 - $50
|
$70
|
|
$80 - $85
|
|
$45 - $50
|
$75
|
|
$80 - $85
|
|
$45 - $50
|
$80
|
|
$80 - $85
|
|
$50 - $55
|
(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 by 1.5 million tons to 19 million
tons of iron ore pellets, reflecting currently low capacity
utilization rates among Cliffs' U.S. steel customers, mainly
attributed to heavy imported steel penetration. The Company expects
these conditions to improve in the second half of 2015, but is
basing the sales forecast on current nominations.
Despite the reduction in production tonnage, Cliffs is
maintaining its previous cash production cost3
expectation 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 52 percent lump and 48
percent fines.
Based on a full-year average exchange rate of $0.77 U.S. Dollar to Australian Dollar, the
Company is maintaining its full-year 2015 Asia Pacific Iron Ore
cash production cost per ton3 expectation of
$30 - $35. Cliffs' cash cost of goods
sold per ton3 expectation of $35
- $40 was also maintained.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $3 per ton for
full-year 2015.
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)
|
19
|
|
11
|
|
Production volume
(million tons)
|
19
|
|
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 maintaining its full-year 2015 SG&A expenses
expectation of $120 million.
The Company expects full-year 2015 interest expense to be
approximately $235 million, of which
approximately $205 million is cash
interest. Consolidated full-year 2015 depreciation, depletion and
amortization is expected to be approximately $145 million.
Cliffs expects to receive a cash tax refund during the third
quarter of 2015 of approximately $160
million.
Capital Budget Update
Cliffs is maintaining its full-year 2015 capital expenditures
budget in the range of $100 - $125
million. 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 this
morning, July 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 statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking
statements relate to anticipated trends and expectations rather
than historical matters. Forward-looking statements are
subject to uncertainties and factors relating to Cliffs' operations
and business environment that are difficult to predict and may be
beyond our control. Such uncertainties and factors may cause
actual results to differ materially from those expressed or implied
by the forward-looking statements. These statements speak
only as of the date of this release, and we undertake no ongoing
obligation, other than that imposed by law, to update these
statements. Uncertainties and risk factors that could affect
Cliffs' future performance and cause results to differ from the
forward-looking statements in this release include, but are not
limited to: 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 CCAA
process; trends affecting our financial condition, results of
operations or future prospects, particularly the continued
volatility of iron ore and coal prices; availability of capital and
our ability to maintain adequate liquidity; uncertainty or
weaknesses in global economic conditions, including downward
pressure on prices caused by oversupply or imported products,
reduced market demand and any change to the economic growth rate in
China; our ability to successfully
identify and consummate any strategic investments and complete
planned divestitures, including with respect to our North American
Coal operating segment; our ability to successfully diversify our
product mix and add new customers beyond our traditional blast
furnace clientele; 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 or renewals; the impact of
price-adjustment factors on our sales contracts; changes in sales
volume or mix; our actual levels of capital spending; 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
the risk factors identified in Part I - Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2014. 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
REVENUES FROM PRODUCT
SALES AND SERVICES
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
454.3
|
|
|
$
|
696.3
|
|
|
$
|
857.4
|
|
|
$
|
1,259.8
|
|
Freight and venture
partners' cost reimbursements
|
|
43.8
|
|
|
51.4
|
|
|
86.7
|
|
|
103.4
|
|
|
|
498.1
|
|
|
747.7
|
|
|
944.1
|
|
|
1,363.2
|
|
COST OF GOODS SOLD
AND OPERATING EXPENSES
|
|
(440.8)
|
|
|
(564.2)
|
|
|
(806.0)
|
|
|
(989.7)
|
|
SALES
MARGIN
|
|
57.3
|
|
|
183.5
|
|
|
138.1
|
|
|
373.5
|
|
OTHER OPERATING
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(30.8)
|
|
|
(40.9)
|
|
|
(59.8)
|
|
|
(81.4)
|
|
Miscellaneous -
net
|
|
(0.8)
|
|
|
(3.3)
|
|
|
19.3
|
|
|
(13.6)
|
|
|
|
(31.6)
|
|
|
(44.2)
|
|
|
(40.5)
|
|
|
(95.0)
|
|
OPERATING
INCOME
|
|
25.7
|
|
|
139.3
|
|
|
97.6
|
|
|
278.5
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(63.6)
|
|
|
(42.1)
|
|
|
(106.5)
|
|
|
(82.5)
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
313.7
|
|
|
—
|
|
Other non-operating
income (expense)
|
|
(2.1)
|
|
|
1.6
|
|
|
(2.9)
|
|
|
2.4
|
|
|
|
(65.7)
|
|
|
(40.5)
|
|
|
204.3
|
|
|
(80.1)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE
INCOME TAXES AND EQUITY LOSS FROM VENTURES
|
|
(40.0)
|
|
|
98.8
|
|
|
301.9
|
|
|
198.4
|
|
INCOME TAX BENEFIT
(EXPENSE)
|
|
1.8
|
|
|
(7.6)
|
|
|
(173.3)
|
|
|
(37.2)
|
|
EQUITY LOSS FROM
VENTURES, net of tax
|
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.6)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
|
|
(38.2)
|
|
|
90.9
|
|
|
128.6
|
|
|
160.6
|
|
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, net of tax
|
|
103.4
|
|
|
(76.4)
|
|
|
(825.1)
|
|
|
(216.8)
|
|
NET INCOME
(LOSS)
|
|
65.2
|
|
|
14.5
|
|
|
(696.5)
|
|
|
(56.2)
|
|
INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST
|
|
(5.0)
|
|
|
(3.6)
|
|
|
(3.1)
|
|
|
(3.2)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS
SHAREHOLDERS
|
|
$
|
60.2
|
|
|
$
|
10.9
|
|
|
$
|
(699.6)
|
|
|
$
|
(59.4)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
—
|
|
|
(12.8)
|
|
|
(12.8)
|
|
|
(25.6)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS COMMON
SHAREHOLDERS
|
|
$
|
60.2
|
|
|
$
|
(1.9)
|
|
|
$
|
(712.4)
|
|
|
$
|
(85.0)
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - BASIC
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.28)
|
|
|
$
|
0.49
|
|
|
$
|
0.74
|
|
|
$
|
0.86
|
|
Discontinued
operations
|
|
0.67
|
|
|
(0.50)
|
|
|
(5.39)
|
|
|
(1.42)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - BASIC
|
|
$
|
0.39
|
|
|
$
|
(0.01)
|
|
|
$
|
(4.65)
|
|
|
$
|
(0.56)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - DILUTED
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.28)
|
|
|
$
|
0.48
|
|
|
$
|
0.70
|
|
|
$
|
0.86
|
|
Discontinued
operations
|
|
0.67
|
|
|
(0.50)
|
|
|
(4.62)
|
|
|
(1.41)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - DILUTED
|
|
$
|
0.39
|
|
|
$
|
(0.02)
|
|
|
$
|
(3.92)
|
|
|
$
|
(0.55)
|
|
AVERAGE NUMBER OF
SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
|
Basic
|
|
153,232
|
|
|
153,087
|
|
|
153,203
|
|
|
153,064
|
|
Diluted
|
|
153,232
|
|
|
153,881
|
|
|
178,685
|
|
|
153,860
|
|
CASH DIVIDENDS
DECLARED PER DEPOSITARY SHARE
|
|
$
|
—
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
0.88
|
|
CASH DIVIDENDS
DECLARED PER COMMON SHARE
|
|
$
|
—
|
|
|
$
|
0.15
|
|
|
$
|
—
|
|
|
$
|
0.30
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
POSITION
|
|
|
|
(In
Millions)
|
|
|
June 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
276.2
|
|
|
$
|
271.3
|
|
Accounts receivable,
net
|
|
49.2
|
|
|
122.7
|
|
Inventories
|
|
487.1
|
|
|
260.1
|
|
Supplies and other
inventories
|
|
115.8
|
|
|
118.6
|
|
Income tax
receivable
|
|
163.1
|
|
|
217.6
|
|
Short-term assets of
discontinued operations
|
|
150.5
|
|
|
330.6
|
|
Other current
assets
|
|
140.3
|
|
|
128.0
|
|
TOTAL CURRENT
ASSETS
|
|
1,382.2
|
|
|
1,448.9
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
|
1,077.2
|
|
|
1,070.5
|
|
OTHER
ASSETS
|
|
|
|
|
Long-term assets of
discontinued operations
|
|
—
|
|
|
400.1
|
|
Other non-current
assets
|
|
150.0
|
|
|
244.5
|
|
TOTAL OTHER
ASSETS
|
|
150.0
|
|
|
644.6
|
|
TOTAL
ASSETS
|
|
$
|
2,609.4
|
|
|
$
|
3,164.0
|
|
LIABILITIES
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$
|
140.0
|
|
|
$
|
166.1
|
|
Accrued
expenses
|
|
175.5
|
|
|
201.7
|
|
Short-term
liabilities of discontinued operations
|
|
196.9
|
|
|
400.6
|
|
Other current
liabilities
|
|
246.0
|
|
|
190.2
|
|
TOTAL CURRENT
LIABILITIES
|
|
758.4
|
|
|
958.6
|
|
PENSION AND
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
244.8
|
|
|
259.7
|
|
ENVIRONMENTAL AND
MINE CLOSURE OBLIGATIONS
|
|
214.9
|
|
|
165.6
|
|
LONG-TERM
DEBT
|
|
2,887.4
|
|
|
2,843.3
|
|
LONG-TERM LIABILITIES
OF DISCONTINUED OPERATIONS
|
|
—
|
|
|
436.1
|
|
OTHER
LIABILITIES
|
|
244.1
|
|
|
235.0
|
|
TOTAL
LIABILITIES
|
|
4,349.6
|
|
|
4,898.3
|
|
EQUITY
|
|
|
|
|
CLIFFS SHAREHOLDERS'
DEFICIT
|
|
(1,923.8)
|
|
|
(1,431.3)
|
|
NONCONTROLLING
INTEREST (DEFICIT)
|
|
183.6
|
|
|
(303.0)
|
|
TOTAL
DEFICIT
|
|
(1,740.2)
|
|
|
(1,734.3)
|
|
TOTAL LIABILITIES AND
DEFICIT
|
|
$
|
2,609.4
|
|
|
$
|
3,164.0
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH
FLOWS
|
|
|
|
(In
Millions)
|
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net loss
|
|
$
|
(696.5)
|
|
|
$
|
(56.2)
|
|
Adjustments to
reconcile net loss to net cash provided (used) by operating
activities:
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
63.5
|
|
|
286.4
|
|
Impairment of
long-lived assets
|
|
76.6
|
|
|
2.4
|
|
Deferred income
taxes
|
|
162.6
|
|
|
(139.0)
|
|
Gain on
extinguishment of debt
|
|
(313.7)
|
|
|
—
|
|
Loss on
deconsolidation, net of cash deconsolidated
|
|
641.4
|
|
|
—
|
|
Other
|
|
54.3
|
|
|
22.4
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables and other
assets
|
|
136.6
|
|
|
85.5
|
|
Product
inventories
|
|
(217.4)
|
|
|
(251.7)
|
|
Payables and accrued
expenses
|
|
(155.6)
|
|
|
(73.7)
|
|
Net cash used by
operating activities
|
|
(248.2)
|
|
|
(123.9)
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(34.4)
|
|
|
(164.3)
|
|
Other investing
activities
|
|
0.4
|
|
|
16.0
|
|
Net cash used by
investing activities
|
|
(34.0)
|
|
|
(148.3)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Proceeds from first
lien notes offering
|
|
503.5
|
|
|
—
|
|
Debt issuance
costs
|
|
(33.6)
|
|
|
—
|
|
Repurchase of
debt
|
|
(133.3)
|
|
|
—
|
|
Borrowings under
credit facilities
|
|
309.8
|
|
|
730.4
|
|
Repayment under
credit facilities
|
|
(309.8)
|
|
|
(315.6)
|
|
Common stock
dividends
|
|
—
|
|
|
(46.0)
|
|
Preferred stock
dividends
|
|
(25.6)
|
|
|
(25.6)
|
|
Other financing
activities
|
|
(42.6)
|
|
|
(52.5)
|
|
Net cash provided by
financing activities
|
|
268.4
|
|
|
290.7
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(0.9)
|
|
|
5.9
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
(14.7)
|
|
|
24.4
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
290.9
|
|
|
335.5
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
276.2
|
|
|
$
|
359.9
|
|
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 1 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)
|
|
(In
Millions)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income
(Loss)
|
|
$
|
65.2
|
|
|
$
|
14.5
|
|
|
$
|
(696.5)
|
|
|
$
|
(56.2)
|
|
Less:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(64.3)
|
|
|
(44.8)
|
|
|
(108.5)
|
|
|
(87.5)
|
|
Income tax benefit
(expense)
|
|
2.9
|
|
|
69.1
|
|
|
(172.1)
|
|
|
90.9
|
|
Depreciation,
depletion and amortization
|
|
(30.5)
|
|
|
(145.3)
|
|
|
(63.5)
|
|
|
(286.4)
|
|
EBITDA
|
|
$
|
157.1
|
|
|
$
|
135.5
|
|
|
$
|
(352.4)
|
|
|
$
|
226.8
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Impact of
discontinued operations
|
|
103.0
|
|
|
(76.0)
|
|
|
(821.1)
|
|
|
(194.1)
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
313.7
|
|
|
—
|
|
Foreign exchange
remeasurement
|
|
(0.8)
|
|
|
(6.0)
|
|
|
12.7
|
|
|
(17.5)
|
|
Severance and
contractor termination
costs
|
|
(10.0)
|
|
|
(6.2)
|
|
|
(11.6)
|
|
|
(16.6)
|
|
Adjusted
EBITDA
|
|
$
|
64.9
|
|
|
$
|
223.7
|
|
|
$
|
153.9
|
|
|
$
|
455.0
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income (Loss)
from Continuing Operations
Attributable to Cliffs Shareholders
|
|
$
|
(43.2)
|
|
|
$
|
87.3
|
|
|
$
|
125.5
|
|
|
$
|
157.4
|
|
Income (Loss) from
Discontinued Operations, net of
tax
|
|
103.4
|
|
|
(76.4)
|
|
|
(825.1)
|
|
|
(216.8)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS
SHAREHOLDERS
|
|
$
|
60.2
|
|
|
$
|
10.9
|
|
|
$
|
(699.6)
|
|
|
$
|
(59.4)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
—
|
|
|
(12.8)
|
|
|
(12.8)
|
|
|
(25.6)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS
COMMON SHAREHOLDERS
|
|
$
|
60.2
|
|
|
$
|
(1.9)
|
|
|
$
|
(712.4)
|
|
|
$
|
(85.0)
|
|
Less:
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313.7
|
|
|
$
|
—
|
|
Foreign exchange
remeasurement
|
|
(0.8)
|
|
|
(6.0)
|
|
|
12.7
|
|
|
(17.5)
|
|
Severance and
contractor termination costs
|
|
(10.0)
|
|
|
(6.2)
|
|
|
(11.6)
|
|
|
(16.6)
|
|
Tax effect of
adjustments
|
|
—
|
|
|
2.2
|
|
|
(6.3)
|
|
|
5.8
|
|
Income tax valuation
allowances
|
|
—
|
|
|
—
|
|
|
(165.8)
|
|
|
—
|
|
NET INCOME (LOSS)
FROM CONTINUING
OPERATIONS ATTRIBUTABLE TO CLIFFS COMMON
SHAREHOLDERS - ADJUSTED
|
|
$
|
(32.4)
|
|
|
$
|
84.5
|
|
|
$
|
(30.0)
|
|
|
$
|
160.1
|
|
Weighted Average
Number of Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
153.2
|
|
|
153.1
|
|
|
153.2
|
|
|
153.1
|
|
Depositary
Shares
|
|
—
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
Employee Stock
Plans
|
|
—
|
|
|
0.8
|
|
|
0.3
|
|
|
0.8
|
|
Diluted
|
|
153.2
|
|
|
153.9
|
|
|
178.7
|
|
|
153.9
|
|
Earnings (Loss) per
Common Share Attributable to
Cliffs Common Shareholders - Basic:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.21)
|
|
|
$
|
0.47
|
|
|
$
|
(0.28)
|
|
|
$
|
0.88
|
|
Discontinued
operations
|
|
0.67
|
|
|
(0.50)
|
|
|
(5.39)
|
|
|
(1.42)
|
|
|
|
$
|
0.46
|
|
|
$
|
(0.03)
|
|
|
$
|
(5.67)
|
|
|
$
|
(0.54)
|
|
Earnings (Loss) per
Common Share Attributable to
Cliffs Common Shareholders - Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.21)
|
|
|
$
|
0.47
|
|
|
$
|
(0.24)
|
|
|
$
|
0.87
|
|
Discontinued
operations
|
|
0.67
|
|
|
(0.50)
|
|
|
(4.62)
|
|
|
(1.41)
|
|
|
|
$
|
0.46
|
|
|
$
|
(0.03)
|
|
|
$
|
(4.86)
|
|
|
$
|
(0.54)
|
|
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 measure 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 this
measure 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)
|
|
|
June
30,
2015
|
|
June
30,
2014
|
Long-term
debt
|
|
$
|
2,887.4
|
|
|
$
|
3,293.0
|
|
Short-term debt and
current portion of long-term debt
|
|
—
|
|
|
161.1
|
|
Total Debt
|
|
$
|
2,887.4
|
|
|
$
|
3,454.1
|
|
Less:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
276.2
|
|
|
$
|
359.9
|
|
Net Debt
|
|
$
|
2,611.2
|
|
|
$
|
3,094.2
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-reports-second-quarter-2015-results-300120402.html
SOURCE Cliffs Natural Resources Inc.