CLEVELAND, Jan. 27, 2016 /PRNewswire/ --
- Achieves fourth-quarter Adjusted EBITDA1 of
$76 million
- Realizes significant year-over-year cost savings
- U.S. Iron Ore cash production costs3 decrease 23
percent to $45 per ton in the fourth
quarter
- Asia Pacific Iron Ore cash production costs3
decrease 40 percent to $26 per ton in
the fourth quarter
Cliffs Natural Resources Inc. (NYSE: CLF) today reported
fourth-quarter and full-year results for the period ended
December 31, 2015.
Fourth-quarter 2015 consolidated revenues of $476 million decreased 54 percent from the prior
year's fourth-quarter revenues of $1.0
billion. Cost of goods sold decreased by 44 percent to
$433 million compared to $774 million reported in the fourth quarter of
2014.
For the fourth quarter of 2015, the Company recorded a net loss
of $58 million compared to a net loss
of $1.4 billion recorded in the
prior-year quarter. The Company recorded a net loss attributable to
Cliffs' common shareholders of $60
million, or $0.39 per diluted
share, compared to a net loss attributable to Cliffs' common
shareholders of $1.3 billion, or
$7.19 per diluted share recorded in
the fourth quarter of 2014.
For the fourth-quarter 2015, adjusted EBITDA1 was
$76 million. Cliffs noted that this
figure includes idle expenses of $30
million related to previously announced production
curtailments. Excluding these idle expenses associated with the
United Taconite, Northshore and Empire mines, Cliffs' adjusted
EBITDA1 would have been $106
million.
Full-Year Consolidated Results
Full-year 2015 consolidated revenues of $2.0 billion decreased 40 percent from the prior
year's revenues of $3.4 billion. Cost
of goods sold decreased by 29 percent to $1.8 billion compared to $2.5 billion reported in 2014.
For the full-year 2015, the Company recorded a net loss of
$748 million compared to a net loss
of $8.3 billion recorded in the prior
year. The Company recorded a full-year net loss attributable to
Cliffs' common shareholders of $788
million, or $5.13 per diluted
share, compared to a net loss attributable to Cliffs' common
shareholders of $7.3 billion, or
$40.36 per diluted share recorded in
2014.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, said, "Despite the
severely negative impacts of global iron ore and domestic steel
prices, in 2015 we achieved substantial cost reductions in all
areas of the business." He added, "On top of an outstanding year of
operating performance, we checked a number of boxes in line with
our U.S. pellet-centric strategy, most recently with the full
divestiture of our North American Coal business."
The following table provides a summary of adjusted
EBITDA1 by operating segment:
|
|
|
|
Adjusted
EBITDA1 by Segment (in millions)
|
|
|
U.S.
Iron Ore
|
|
Asia Pacific
Iron Ore
|
|
Corporate/
Other
|
|
Total
|
Q4 2015
Adjusted
EBITDA1 (in millions)
|
|
$
|
97.5
|
|
|
$
|
(0.1)
|
|
|
$
|
(21.5)
|
|
|
$
|
75.9
|
|
YTD 2015
Adjusted
EBITDA1 (in millions)
|
|
$
|
352.1
|
|
|
$
|
32.7
|
|
|
$
|
(91.9)
|
|
|
$
|
292.9
|
|
|
Cliffs' fourth-quarter 2015 interest expense was $60 million, a 25 percent increase when compared
to a fourth-quarter 2014 expense of $48
million. The increase was primarily driven by the issuance
of secured notes during the first quarter of 2015. The Company
noted that of the $60 million
recorded, $51 million is cash with
the remaining $9 million a non-cash
expense.
U.S. Iron Ore
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Long Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
4,501
|
|
|
7,818
|
|
|
17,292
|
|
|
21,840
|
|
Total production
volume
|
|
4,340
|
|
|
6,175
|
|
|
19,317
|
|
|
22,431
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
372.9
|
|
|
$
|
863.2
|
|
|
$
|
1,525.4
|
|
|
$
|
2,506.5
|
|
Cost of goods sold
and operating expenses
|
|
323.5
|
|
|
614.5
|
|
|
1,298.3
|
|
|
1,796.1
|
|
Sales
margin
|
|
$
|
49.4
|
|
|
$
|
248.7
|
|
|
$
|
227.1
|
|
|
$
|
710.4
|
|
Sales Margin - Per
Long Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
74.23
|
|
|
$
|
98.93
|
|
|
$
|
79.12
|
|
|
$
|
102.36
|
|
Cash production
cost3
|
|
45.36
|
|
|
58.96
|
|
|
54.35
|
|
|
63.83
|
|
Non-production cash
cost3
|
|
11.83
|
|
|
4.80
|
|
|
5.92
|
|
|
1.08
|
|
Cash
cost3
|
|
57.19
|
|
|
63.76
|
|
|
60.27
|
|
|
64.91
|
|
Depreciation,
depletion and amortization
|
|
6.07
|
|
|
3.35
|
|
|
5.72
|
|
|
4.92
|
|
Cost of goods sold
and operating expenses*
|
|
63.26
|
|
|
67.11
|
|
|
65.99
|
|
|
69.83
|
|
Sales
margin
|
|
$
|
10.97
|
|
|
$
|
31.82
|
|
|
$
|
13.13
|
|
|
$
|
32.53
|
|
|
|
|
|
|
|
|
|
|
* 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 fourth quarter of 2015
was 4.5 million tons, a 42 percent decrease when compared with 7.8
million tons sold in the fourth quarter of 2014. The decrease was
driven principally by the termination of a customer contract, lower
demand from U.S. mills and higher sales in the comparable quarter
in the prior year from the delayed start-up of the 2014 shipping
season.
Cash production cost per ton3 in U.S. Iron Ore was
$45.36, down 23 percent from
$58.96 in the prior year's fourth
quarter. The decrease was driven by lower employment costs, reduced
maintenance and repair costs, and year-over-year lower energy
rates.
Asia Pacific Iron Ore
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Volumes - In
Thousands of Metric Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
2,917
|
|
|
2,915
|
|
|
11,627
|
|
|
11,531
|
|
Total production
volume
|
|
3,068
|
|
|
3,042
|
|
|
11,722
|
|
|
11,352
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
103.1
|
|
|
$
|
167.1
|
|
|
$
|
487.9
|
|
|
$
|
866.7
|
|
Cost of goods sold
and operating expenses
|
|
109.2
|
|
|
156.8
|
|
|
478.5
|
|
|
745.0
|
|
Sales
margin
|
|
$
|
(6.1)
|
|
|
$
|
10.3
|
|
|
$
|
9.4
|
|
|
$
|
121.7
|
|
Sales Margin - Per
Metric Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
33.73
|
|
|
$
|
54.96
|
|
|
$
|
39.93
|
|
|
$
|
74.56
|
|
Cash production
cost3
|
|
25.76
|
|
|
42.79
|
|
|
30.82
|
|
|
49.29
|
|
Non-production cash
cost3
|
|
7.94
|
|
|
0.98
|
|
|
6.13
|
|
|
2.07
|
|
Cash
cost3
|
|
33.70
|
|
|
43.77
|
|
|
36.95
|
|
|
51.36
|
|
Depreciation,
depletion and amortization
|
|
2.13
|
|
|
7.65
|
|
|
2.18
|
|
|
12.65
|
|
Cost of goods sold
and operating expenses*
|
|
35.83
|
|
|
51.42
|
|
|
39.13
|
|
|
64.01
|
|
Sales
margin
|
|
$
|
(2.10)
|
|
|
$
|
3.54
|
|
|
$
|
0.80
|
|
|
$
|
10.55
|
|
|
|
|
|
|
|
|
|
|
*Cliffs began selling
a portion of its product on a CFR basis in 2014. As such, the
information above excludes revenues and expenses related to
freight, which are offsetting and have no impact on sales
margin.
|
|
Fourth-quarter 2015 Asia Pacific Iron Ore sales volume of 2.9
million was flat compared to the fourth quarter of 2014.
Cash production cost per ton3 in Asia Pacific Iron
Ore was $25.76, down 40 percent from
$42.79 in the prior year's fourth
quarter. The decrease was driven by reduced mining and haulage
costs, lower headcount, and favorable foreign exchange variances of
$5 per ton.
Debt and Cash Flow
Total debt at the end of the fourth quarter of 2015 was
$2.7 billion, versus a comparable
$2.8 billion at the end of the fourth
quarter of 2014. Fourth quarter cash and cash equivalents totaled
$285 million, compared to
$271 million at the end of the fourth
quarter of 2014.
At the end of the fourth quarter of 2015, Cliffs had net
debt4 of $2.4 billion,
compared to $2.6 billion of net
debt4 at the end of the fourth quarter of 2014.
Capital expenditures during the quarter were $26 million, which is a 49 percent decrease
compared to $51 million in the fourth
quarter of 2014. Full-year 2015 capital expenditures were
$83 million, a 71 percent reduction
compared to $284 million in the prior
year.
Cliffs also reported depreciation, depletion and amortization of
$35 million in the fourth 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 U.S. Iron Ore table further assumes full-year hot-band steel
pricing of approximately $450 per
short ton. The Company notes that this estimate is based on its
customers' realized prices and not an index or spot market price.
In 2015, the customers' realized price was approximately
$40 per ton higher than the U.S.
Domestic Midwest Hot Rolled Coil Steel Index. In terms of
sensitivity, for every $50 per ton
change in the customers' hot-rolled steel prices, Cliffs U.S. Iron
Ore revenue realizations per ton would be expected to change by
$2.25 if steel prices increase, and
$1.75 if steel
prices decrease.
The table below provides certain Platts IODEX averages for 2016
and the corresponding full-year realization for the U.S. Iron Ore
and Asia Pacific Iron Ore segments.
2016 Full-Year
Realized Revenues-Per-Ton Range Summary
|
Platts IODEX
(1)
|
|
U.S. Iron Ore
(2)
|
|
Asia Pacific Iron
Ore (3)
|
$30
|
|
$71 - $73
|
|
$19 - $21
|
$35
|
|
$71 - $73
|
|
$23 - $25
|
$40
|
|
$72 - $74
|
|
$28 - $30
|
$45
|
|
$73 - $75
|
|
$32 - $34
|
$50
|
|
$74 - $76
|
|
$36 - $38
|
$55
|
|
$75 - $77
|
|
$40 - $42
|
$60
|
|
$76 - $78
|
|
$45 - $47
|
(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. This table assumes full-year
hot-rolled steel pricing of approximately $450 per short ton, which
is based on customer realizations and not a public
index.
|
(3)
|
Asia Pacific Iron Ore
tons are reported in metric tons of lumps and fines, F.O.B. the
port.
|
|
|
|
|
|
|
U.S. Iron Ore Outlook (Long Tons)
For 2016, Cliffs expects full-year sales volume of approximately
17.5 million tons from its U.S. Iron Ore business. In order to
reduce pellet inventory levels and generate cash flow from working
capital, the Company currently plans to produce approximately 16
million tons of iron ore pellets.
Cliffs' full-year 2016 U.S. Iron Ore cash production cost per
ton3 expectation is $50 -
$55. The Company's cash cost of goods sold per
ton3 expectation is $55 -
$60, representing a reduction of $5 from the previously disclosed 2016 cash costs
of goods sold per ton3 expectation of $60 - $65.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $7 per ton for
full-year 2016.
Labor Update
The Company remains in active negotiations with the United
Steelworkers and is committed to reaching a fair and equitable
agreement. The current contract has been extended by mutual
agreement of both parties. The contract extension covers
approximately 2,200 USW-represented workers at
Cliffs' Empire and Tilden mines
in Michigan, and its United Taconite and Hibbing Taconite
mines in Minnesota.
Asia Pacific Iron Ore Outlook (Metric Tons, F.O.B. the
port)
Cliffs' full-year 2016 Asia Pacific Iron Ore expected sales and
production volume is approximately 11.5 million tons. The product
mix is expected to contain 50 percent lump and 50 percent
fines.
Based on a full-year average exchange rate of $0.69 U.S. Dollar to Australian Dollar, the
Company is expecting a full-year 2016 Asia Pacific Iron Ore cash
production cost per ton3 of $25 -
$30. Cliffs' cash cost of goods sold per ton3
expectation is expected to be $30 -
$35. Cliffs indicated that for every $0.01 change in this exchange rate on a full-year
basis, the Company's cash cost of goods sold is impacted by
approximately $6 million.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $2 per ton for
full-year 2016.
The following table provides a summary of Cliffs' 2016 guidance
for its two business segments:
|
|
2016 Outlook
Summary
|
|
|
U.S. Iron Ore
(A)
|
Asia
Pacific
Iron Ore
(B)
|
Sales volume
(million tons)
|
17.5
|
|
11.5
|
|
Production volume
(million tons)
|
16
|
|
11.5
|
|
Cash production
cost per ton3
|
$50 -
$55
|
|
$25 -
$30
|
|
Cash cost of goods
sold per ton3
|
$55 -
$60
|
|
$30 -
$35
|
|
DD&A per
ton
|
$7
|
|
$2
|
|
|
|
|
|
|
|
(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
Full-year 2016 SG&A expenses are expected to be
approximately $95 million, a
$15 million reduction from the
full-year 2015 expense. Cliffs also notes that of the $95 million expectation, approximately
$30 million is considered
non-cash.
The Company expects full-year 2016 interest expense to be
approximately $240 million, of which
approximately $205 million is cash
interest. Consolidated full-year 2016 depreciation, depletion and
amortization is expected to be approximately $145 million.
Capital Budget Update
Cliffs expects full-year 2016 capital expenditures to be
$50 million, a significant reduction
compared to 2015 expenditures of $83
million. The reduction is driven by the divestiture of the
remaining coal assets as well as spending discipline exhibited in
the U.S. Iron Ore business.
Conference Call Information
Cliffs Natural Resources Inc. will host a conference call this
morning, January 27, 2016, 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. 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: trends affecting our
financial condition, results of operations or future prospects,
particularly the continued volatility of iron ore prices;
availability of capital and our ability to maintain adequate
liquidity, in particular considering borrowing base reductions from
the sale of non-core assets such as North American Coal; continued
weaknesses in global economic conditions, including downward
pressure on prices caused by oversupply or imported products,
including the impact of any reduced barriers to trade, reduced
market demand and any change to the economic growth rate in
China; our ability to reach
agreement with our iron ore customers regarding any modifications
to sales contract provisions, renewals or new arrangements;
uncertainty relating to restructurings in the steel industry and/or
affecting the steel industry; our ability to maintain appropriate
relations with unions and employees and enter into or renew
collective bargaining agreements on satisfactory terms; the impact
of our customers reducing their steel production or using other
methods to produce steel; 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 process; our ability to
successfully identify and consummate any strategic investments and
complete planned divestitures; our ability to successfully
diversify our product mix and add new customers beyond our
traditional blast furnace clientèle; 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; 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 reserves or reductions in
current mineral estimates, including whether any mineralized
material qualifies as a reserve; 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 laws and 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; 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 or costs,
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
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
REVENUES FROM PRODUCT
SALES AND SERVICES
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
432.5
|
|
|
$
|
933.5
|
|
|
$
|
1,832.4
|
|
|
$
|
3,095.2
|
|
Freight and venture
partners' cost reimbursements
|
|
43.5
|
|
|
96.8
|
|
|
180.9
|
|
|
278.0
|
|
|
|
476.0
|
|
|
1,030.3
|
|
|
2,013.3
|
|
|
3,373.2
|
|
COST OF GOODS SOLD
AND OPERATING EXPENSES
|
|
(432.7)
|
|
|
(774.3)
|
|
|
(1,776.8)
|
|
|
(2,487.5)
|
|
SALES
MARGIN
|
|
43.3
|
|
|
256.0
|
|
|
236.5
|
|
|
885.7
|
|
OTHER OPERATING
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(27.8)
|
|
|
(23.6)
|
|
|
(110.0)
|
|
|
(154.7)
|
|
Impairment of
goodwill and other long-lived assets
|
|
—
|
|
|
(256.9)
|
|
|
(3.3)
|
|
|
(635.5)
|
|
Miscellaneous -
net
|
|
9.0
|
|
|
19.0
|
|
|
28.1
|
|
|
34.6
|
|
|
|
(18.8)
|
|
|
(261.5)
|
|
|
(85.2)
|
|
|
(755.6)
|
|
OPERATING
INCOME
|
|
24.5
|
|
|
(5.5)
|
|
|
151.3
|
|
|
130.1
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
16.2
|
|
|
392.9
|
|
|
16.2
|
|
Interest expense,
net
|
|
(60.3)
|
|
|
(48.4)
|
|
|
(228.5)
|
|
|
(176.7)
|
|
Other non-operating
income (expense)
|
|
0.4
|
|
|
0.5
|
|
|
(2.6)
|
|
|
10.7
|
|
|
|
(59.9)
|
|
|
(31.7)
|
|
|
161.8
|
|
|
(149.8)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE
INCOME TAXES AND EQUITY LOSS FROM VENTURES
|
|
(35.4)
|
|
|
(37.2)
|
|
|
313.1
|
|
|
(19.7)
|
|
INCOME TAX BENEFIT
(EXPENSE)
|
|
0.6
|
|
|
539.0
|
|
|
(169.3)
|
|
|
417.7
|
|
EQUITY LOSS FROM
VENTURES, net of tax
|
|
—
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(9.9)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
|
|
(34.8)
|
|
|
501.7
|
|
|
143.7
|
|
|
388.1
|
|
LOSS FROM
DISCONTINUED OPERATIONS, net of tax
|
|
(23.1)
|
|
|
(1,869.8)
|
|
|
(892.1)
|
|
|
(8,699.7)
|
|
NET INCOME
(LOSS)
|
|
(57.9)
|
|
|
(1,368.1)
|
|
|
(748.4)
|
|
|
(8,311.6)
|
|
LOSS (INCOME)
ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
|
(2.4)
|
|
|
83.0
|
|
|
(0.9)
|
|
|
1,087.4
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
|
$
|
(60.3)
|
|
|
$
|
(1,285.1)
|
|
|
$
|
(749.3)
|
|
|
$
|
(7,224.2)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
—
|
|
|
(12.8)
|
|
|
(38.4)
|
|
|
(51.2)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS
|
|
$
|
(60.3)
|
|
|
$
|
(1,297.9)
|
|
|
$
|
(787.7)
|
|
|
$
|
(7,275.4)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - BASIC
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.24)
|
|
|
$
|
3.17
|
|
|
$
|
0.63
|
|
|
$
|
2.03
|
|
Discontinued
operations
|
|
(0.15)
|
|
|
(11.65)
|
|
|
(5.77)
|
|
|
(49.55)
|
|
|
|
$
|
(0.39)
|
|
|
$
|
(8.48)
|
|
|
$
|
(5.14)
|
|
|
$
|
(47.52)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO
CLIFFS SHAREHOLDERS - DILUTED
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.24)
|
|
|
$
|
2.79
|
|
|
$
|
0.63
|
|
|
$
|
2.02
|
|
Discontinued
operations
|
|
(0.15)
|
|
|
(9.98)
|
|
|
(5.76)
|
|
|
(42.38)
|
|
|
|
$
|
(0.39)
|
|
|
$
|
(7.19)
|
|
|
$
|
(5.13)
|
|
|
$
|
(40.36)
|
|
AVERAGE NUMBER OF
SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
|
Basic
|
|
153,278
|
|
|
153,136
|
|
|
153,230
|
|
|
153,098
|
|
Diluted
|
|
153,278
|
|
|
178,636
|
|
|
153,605
|
|
|
179,029
|
|
CASH DIVIDENDS
DECLARED PER DEPOSITARY SHARE
|
|
$
|
—
|
|
|
$
|
0.44
|
|
|
$
|
1.32
|
|
|
$
|
1.76
|
|
CASH DIVIDENDS
DECLARED PER COMMON SHARE
|
|
$
|
—
|
|
|
$
|
0.15
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
POSITION
|
|
|
|
(In
Millions)
|
|
|
December
31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
285.2
|
|
|
$
|
271.3
|
|
Accounts receivable,
net
|
|
40.2
|
|
|
122.7
|
|
Inventories
|
|
329.6
|
|
|
260.1
|
|
Supplies and other
inventories
|
|
110.4
|
|
|
118.6
|
|
Income tax
receivable
|
|
2.0
|
|
|
217.6
|
|
Short-term assets of
discontinued operations
|
|
14.9
|
|
|
326.9
|
|
Loans to and accounts
receivables from the Canadian Entities
|
|
73.0
|
|
|
0.4
|
|
Other current
assets
|
|
123.8
|
|
|
107.7
|
|
TOTAL CURRENT
ASSETS
|
|
979.1
|
|
|
1,425.3
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
|
1,059.0
|
|
|
1,070.5
|
|
OTHER
ASSETS
|
|
|
|
|
Deferred income
taxes
|
|
2.6
|
|
|
154.7
|
|
Long-term assets of
discontinued operations
|
|
—
|
|
|
403.7
|
|
Other non-current
assets
|
|
93.8
|
|
|
93.0
|
|
TOTAL OTHER
ASSETS
|
|
96.4
|
|
|
651.4
|
|
TOTAL
ASSETS
|
|
$
|
2,134.5
|
|
|
$
|
3,147.2
|
|
LIABILITIES
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$
|
106.3
|
|
|
$
|
166.1
|
|
Accrued employment
costs
|
|
53.0
|
|
|
73.8
|
|
State and local taxes
payable
|
|
35.2
|
|
|
40.7
|
|
Accrued
expenses
|
|
179.2
|
|
|
99.4
|
|
Accrued
royalties
|
|
17.3
|
|
|
28.5
|
|
Short-term
liabilities of discontinued operations
|
|
0.8
|
|
|
399.4
|
|
Contingent
liabilities
|
|
96.5
|
|
|
—
|
|
Other current
liabilities
|
|
89.7
|
|
|
146.6
|
|
TOTAL CURRENT
LIABILITIES
|
|
578.0
|
|
|
954.5
|
|
TOTAL POSTEMPLOYMENT
BENEFIT LIABILITIES
|
|
221.0
|
|
|
268.3
|
|
ENVIRONMENTAL AND
MINE CLOSURE OBLIGATIONS
|
|
231.2
|
|
|
165.6
|
|
LONG-TERM
DEBT
|
|
2,699.4
|
|
|
2,826.5
|
|
LONG-TERM LIABILITIES
OF DISCONTINUED OPERATIONS
|
|
—
|
|
|
427.5
|
|
OTHER
LIABILITIES
|
|
216.5
|
|
|
239.1
|
|
TOTAL
LIABILITIES
|
|
3,946.1
|
|
|
4,881.5
|
|
EQUITY
|
|
|
|
|
CLIFFS SHAREHOLDERS'
DEFICIT
|
|
(1,981.4)
|
|
|
(1,431.3)
|
|
NONCONTROLLING
INTEREST
|
|
169.8
|
|
|
(303.0)
|
|
TOTAL
DEFICIT
|
|
(1,811.6)
|
|
|
(1,734.3)
|
|
TOTAL LIABILITIES AND
DEFICIT
|
|
$
|
2,134.5
|
|
|
$
|
3,147.2
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH
FLOWS
|
|
|
|
(In
Millions)
|
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net loss
|
|
$
|
(748.4)
|
|
|
$
|
(8,311.6)
|
|
Adjustments to
reconcile net loss to net cash provided (used) by operating
activities:
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
134.0
|
|
|
504.0
|
|
Impairment of
goodwill and other long-lived assets
|
|
76.6
|
|
|
9,029.9
|
|
Equity loss in
ventures (net of tax)
|
|
(0.1)
|
|
|
9.9
|
|
Deferred income
taxes
|
|
159.8
|
|
|
(1,153.9)
|
|
Changes in deferred
revenue and below-market sales contracts
|
|
(42.6)
|
|
|
(18.0)
|
|
Gain on
extinguishment of debt
|
|
(392.9)
|
|
|
(16.2)
|
|
Loss on
deconsolidation, net of cash deconsolidated
|
|
668.3
|
|
|
—
|
|
Loss (gain) on sale
of North American Coal mines
|
|
(9.3)
|
|
|
419.6
|
|
Other
|
|
115.7
|
|
|
(21.5)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables and other
assets
|
|
355.1
|
|
|
(82.8)
|
|
Product
inventories
|
|
(62.0)
|
|
|
37.8
|
|
Payables and accrued
expenses
|
|
(227.7)
|
|
|
(38.3)
|
|
Net cash provided by
operating activities
|
|
26.5
|
|
|
358.9
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(83.4)
|
|
|
(284.1)
|
|
Proceeds (uses) from
sale of North American Coal mines
|
|
(15.2)
|
|
|
155.0
|
|
Other investing
activities
|
|
6.8
|
|
|
25.5
|
|
Net cash used in
investing activities
|
|
(91.8)
|
|
|
(103.6)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Proceeds from first
lien notes offering
|
|
503.5
|
|
|
—
|
|
Debt issuance
costs
|
|
(33.6)
|
|
|
(9.0)
|
|
Borrowings under
credit facilities
|
|
309.8
|
|
|
1,219.5
|
|
Repayment under
credit facilities
|
|
(309.8)
|
|
|
(1,219.5)
|
|
Repayments of
equipment loans
|
|
(45.4)
|
|
|
(20.9)
|
|
Repurchase of
debt
|
|
(225.9)
|
|
|
(28.8)
|
|
Contributions by
joint ventures, net
|
|
0.1
|
|
|
(25.7)
|
|
Distributions of
partnership equity
|
|
(40.6)
|
|
|
—
|
|
Common stock
dividends
|
|
—
|
|
|
(92.5)
|
|
Preferred stock
dividends
|
|
(51.2)
|
|
|
(51.2)
|
|
Other financing
activities
|
|
(45.9)
|
|
|
(60.2)
|
|
Net cash provided by
(used in) financing activities
|
|
61.0
|
|
|
(288.3)
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(1.4)
|
|
|
(11.6)
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
(5.7)
|
|
|
(44.6)
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
290.9
|
|
|
335.5
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
285.2
|
|
|
$
|
290.9
|
|
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 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)
|
|
(In
Millions)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income
(Loss)
|
|
$
|
(57.9)
|
|
|
$
|
(1,368.1)
|
|
|
$
|
(748.4)
|
|
|
$
|
(8,311.6)
|
|
Less:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(60.7)
|
|
|
(50.3)
|
|
|
(231.4)
|
|
|
(185.2)
|
|
Income tax benefit
(expense)
|
|
4.0
|
|
|
289.7
|
|
|
(163.3)
|
|
|
1,302.0
|
|
Depreciation,
depletion and amortization
|
|
(34.9)
|
|
|
(73.6)
|
|
|
(134.0)
|
|
—
|
|
(504.0)
|
|
EBITDA
|
|
$
|
33.7
|
|
|
$
|
(1,533.9)
|
|
|
$
|
(219.7)
|
|
—
|
|
$
|
(8,924.4)
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Impairment of
goodwill and other long-lived assets
|
|
$
|
—
|
|
|
$
|
(256.9)
|
|
|
$
|
(3.3)
|
|
|
$
|
(635.5)
|
|
Impact of
discontinued operations
|
|
(26.1)
|
|
|
(1,595.4)
|
|
|
(892.0)
|
|
|
(9,332.5)
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
16.2
|
|
|
392.9
|
|
|
16.2
|
|
Severance and
contractor termination costs
|
|
(0.9)
|
|
|
(4.0)
|
|
|
(10.2)
|
|
|
(23.3)
|
|
Foreign exchange
remeasurement
|
|
1.1
|
|
|
20.6
|
|
|
16.3
|
|
|
29.0
|
|
Proxy contest and
change in control in SG&A
|
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(26.6)
|
|
Supplies inventory
write-off
|
|
(16.3)
|
|
|
—
|
|
|
(16.3)
|
|
|
—
|
|
Adjusted
EBITDA*
|
|
$
|
75.9
|
|
|
$
|
286.0
|
|
|
$
|
292.9
|
|
|
$
|
1,048.3
|
|
|
*Excluding $30.0
million of idle expenses primarily associated with the Empire and
United Taconite mines, Cliffs' adjusted EBITDA of $75.9 million
would have been $105.9 million.
|
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
December 31,
|
|
Year Ended
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income (Loss) from
Continuing Operations
|
|
$
|
(34.8)
|
|
|
$
|
501.7
|
|
|
$
|
143.7
|
|
|
$
|
388.1
|
|
Income from
Continuing Operations Attributable to
Noncontrolling Interest
|
|
(2.4)
|
|
|
(3.4)
|
|
|
(8.6)
|
|
|
(25.9)
|
|
Net Income (Loss)
from Continuing Operations
attributable to Cliffs shareholders
|
|
$
|
(37.2)
|
|
|
$
|
498.3
|
|
|
$
|
135.1
|
|
|
$
|
362.2
|
|
Loss from
Discontinued Operations, net of tax
|
|
(23.1)
|
|
|
(1,783.4)
|
|
|
(884.4)
|
|
|
(7,586.4)
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS SHAREHOLDERS
|
|
$
|
(60.3)
|
|
|
$
|
(1,285.1)
|
|
|
$
|
(749.3)
|
|
|
$
|
(7,224.2)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
—
|
|
|
(12.8)
|
|
|
(38.4)
|
|
|
(51.2)
|
|
NET LOSS ATTRIBUTABLE
TO CLIFFS COMMON
SHAREHOLDERS
|
|
$
|
(60.3)
|
|
|
$
|
(1,297.9)
|
|
|
$
|
(787.7)
|
|
|
$
|
(7,275.4)
|
|
Less:
|
|
|
|
|
|
|
|
|
Impairment of
goodwill and other long-lived assets
|
|
$
|
—
|
|
|
$
|
(256.9)
|
|
|
$
|
(3.3)
|
|
|
$
|
(635.5)
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
16.2
|
|
|
392.9
|
|
|
16.2
|
|
Severance and
contractor termination costs
|
|
(0.9)
|
|
|
(4.0)
|
|
|
(10.2)
|
|
|
(23.3)
|
|
Foreign exchange
remeasurement
|
|
1.1
|
|
|
20.6
|
|
|
16.3
|
|
|
29.0
|
|
Proxy contest and
change in control in SG&A
|
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(26.6)
|
|
Supplies inventory
write-off
|
|
(16.3)
|
|
|
—
|
|
|
(16.3)
|
|
|
—
|
|
Tax effect of
adjustments
|
|
0.3
|
|
|
4.2
|
|
|
7.3
|
|
|
(3.4)
|
|
Income tax valuation
allowances
|
|
—
|
|
|
—
|
|
|
(165.8)
|
|
|
—
|
|
NET INCOME (LOSS)
FROM CONTINUING
OPERATIONS ATTRIBUTABLE TO CLIFFS COMMON
SHAREHOLDERS - ADJUSTED
|
|
$
|
(21.4)
|
|
|
$
|
705.8
|
|
|
$
|
(124.2)
|
|
|
$
|
954.6
|
|
Weighted Average
Number of Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
153.3
|
|
|
153.1
|
|
|
153.2
|
|
|
153.1
|
|
Depositary
Shares
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
Employee Stock
Plans
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.7
|
|
Diluted
|
|
153.3
|
|
|
178.6
|
|
|
153.2
|
|
|
179.0
|
|
Earnings (Loss) per
Common Share Attributable to
Cliffs Common Shareholders - Basic:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.14)
|
|
|
$
|
4.61
|
|
|
$
|
(0.81)
|
|
|
$
|
6.24
|
|
Discontinued
operations
|
|
(0.15)
|
|
|
(11.65)
|
|
|
(5.77)
|
|
|
(49.55)
|
|
|
|
$
|
(0.29)
|
|
|
$
|
(7.04)
|
|
|
$
|
(6.58)
|
|
|
$
|
(43.31)
|
|
Earnings (Loss) per
Common Share Attributable to
Cliffs Common Shareholders - Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.14)
|
|
|
$
|
4.02
|
|
|
$
|
(0.81)
|
|
|
$
|
5.62
|
|
Discontinued
operations
|
|
(0.15)
|
|
|
(9.99)
|
|
|
(5.77)
|
|
|
(42.38)
|
|
|
|
$
|
(0.29)
|
|
|
$
|
(5.97)
|
|
|
$
|
(6.58)
|
|
|
$
|
(36.76)
|
|
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 idle
costs, 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)
|
|
|
December
31,
2015
|
|
December
31,
2014
|
Long-term
debt
|
|
$
|
2,699.4
|
|
|
$
|
2,826.5
|
|
Short-term debt and
current portion of long-term debt
|
|
—
|
|
|
—
|
|
Total Debt
|
|
$
|
2,699.4
|
|
|
$
|
2,826.5
|
|
Less:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
285.2
|
|
|
$
|
271.3
|
|
Net Debt
|
|
$
|
2,414.2
|
|
|
$
|
2,555.2
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-reports-fourth-quarter-and-full-year-2015-results-300210415.html
SOURCE Cliffs Natural Resources Inc.