CLEVELAND, July 28, 2016 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) today reported second-quarter
results for the period ended June 30,
2016. Second-quarter 2016 consolidated revenues of
$496 million were relatively flat
compared to the prior year's second-quarter revenues of
$498 million. Cost of goods sold
decreased by 8 percent to $405
million compared to $441
million reported in the second quarter of 2015.
For the second quarter of 2016, the Company recorded net income
from continuing operations of $30
million compared to a net loss from continuing operations of
$38 million recorded in the
prior-year quarter. The Company recorded earnings attributable to
Cliffs shareholders from continuing operations of $0.07 per diluted common share, compared to a net
loss attributable to Cliffs shareholders from continuing operations
of $0.28 per diluted common share
recorded in the second quarter of 2015.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, said, "During the
second quarter we finalized a range of deals that are essential to
Cliffs' future prosperity and growth. Among them, the most
significant was the renewal of our multi-year supply agreement with
ArcelorMittal. This deal is a win-win for both Cliffs and
ArcelorMittal, and demonstrates the strength of the Cliffs
franchise. We also negotiated a low-cost power agreement in
Minnesota that put cash on the
balance sheet, and ensures cost-effective power for years to come.
Then, we negotiated additional sales with a new customer, U.S.
Steel Canada, previously supplied
by its parent company, U.S. Steel." Mr. Goncalves continued, "On
top of this, we reported very strong quarterly results, earning
$102 million in adjusted EBITDA, with
all of the credit going to our superior operating performance and
cost discipline." Mr. Goncalves added: "With our clear focus on
debt reduction and balance sheet strength, I am very optimistic
about where Cliffs can go from here."
For the second quarter of 2016, adjusted EBITDA1 was
$102 million, compared to
$65 million reported in the second
quarter of 2015. Cliffs noted that second-quarter 2016 adjusted
EBITDA1 includes idle expenses of $20 million related to the previously announced
production curtailments at the Northshore and United Taconite
mines. Excluding these idle expenses, Cliffs' adjusted
EBITDA1 would have been $122
million.
|
|
|
Adjusted
EBITDA1 by Segment (in millions)
|
|
|
U.S.
Iron Ore
|
|
Asia Pacific
Iron Ore
|
|
Corporate/
Other
|
|
Total
|
Q2 2016 Adjusted
EBITDA1
|
|
$
|
97.2
|
|
|
$
|
26.5
|
|
|
$
|
(22.1)
|
|
|
$
|
101.6
|
YTD 2016 Adjusted
EBITDA1
|
|
$
|
143.3
|
|
|
$
|
49.5
|
|
|
$
|
(55.0)
|
|
|
$
|
137.8
|
Cliffs' second-quarter 2016 SG&A expenses were $23 million, a 27 percent decrease when compared
to the second-quarter 2015 expenses of $31
million. The decrease was driven primarily by reduced staff
and external services costs.
Cliffs' second-quarter 2016 interest expense was $51 million, a 20 percent decrease when compared
to a second-quarter 2015 expense of $64
million. The Company noted that of the $51 million recorded, $42
million was a cash expense and the remainder was
non-cash.
U.S. Iron Ore
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Volumes - In
Thousands of Long Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
4,146
|
|
|
4,244
|
|
|
6,056
|
|
|
7,190
|
|
Total production
volume
|
|
4,155
|
|
|
5,503
|
|
|
7,202
|
|
|
10,879
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
361.7
|
|
|
$
|
369.7
|
|
|
$
|
547.2
|
|
|
$
|
681.5
|
|
Cost of goods sold
and operating expenses
|
|
291.7
|
|
|
320.7
|
|
|
464.0
|
|
|
552.5
|
|
Sales
margin
|
|
$
|
70.0
|
|
|
$
|
49.0
|
|
|
$
|
83.2
|
|
|
$
|
129.0
|
|
Sales Margin - Per
Long Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
77.81
|
|
|
$
|
78.32
|
|
|
$
|
79.72
|
|
|
$
|
84.23
|
|
Cash production
cost2
|
|
46.32
|
|
|
56.06
|
|
|
46.97
|
|
|
60.36
|
|
Non-production cash
cost2
|
|
9.93
|
|
|
5.53
|
|
|
11.37
|
|
|
(0.15)
|
|
Cash
cost2
|
|
56.25
|
|
|
61.59
|
|
|
58.34
|
|
|
60.21
|
|
Depreciation,
depletion and amortization
|
|
4.68
|
|
|
5.18
|
|
|
7.65
|
|
|
6.08
|
|
Cost of goods sold
and operating expenses*
|
|
60.93
|
|
|
66.77
|
|
|
65.99
|
|
|
66.29
|
|
Sales
margin
|
|
$
|
16.88
|
|
|
$
|
11.55
|
|
|
$
|
13.73
|
|
|
$
|
17.94
|
|
|
|
|
|
|
|
|
|
|
* 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 2016
was 4.1 million long tons, a 2 percent decrease when compared to
the second quarter of 2015. The decrease was driven principally by
the termination of a customer contract, largely offset by a new
customer arrangement.
Cash production cost per long ton2 in U.S. Iron Ore
was $46.32, down 17 percent from
$56.06 in the prior year's second
quarter. The decrease was driven by improved maintenance practices
involving condition based monitoring, lower diesel fuel and natural
gas rates, and lower employee-related costs.
Non-production cash cost per long ton2 of
$9.93 included $20 million of idle costs related to the
Northshore and United Taconite mines.
Asia Pacific Iron Ore
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Volumes - In
Thousands of Metric Tons
|
|
|
|
|
|
|
|
|
Total sales
volume
|
|
3,103
|
|
|
2,750
|
|
|
5,906
|
|
|
5,784
|
|
Total production
volume
|
|
2,800
|
|
|
2,847
|
|
|
5,607
|
|
|
5,727
|
|
Sales Margin - In
Millions
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services
|
|
$
|
134.5
|
|
|
$
|
128.4
|
|
|
$
|
254.5
|
|
|
$
|
262.6
|
|
Cost of goods sold
and operating expenses
|
|
113.0
|
|
|
120.1
|
|
|
215.3
|
|
|
253.5
|
|
Sales
margin
|
|
$
|
21.5
|
|
|
$
|
8.3
|
|
|
$
|
39.2
|
|
|
$
|
9.1
|
|
Sales Margin - Per
Metric Ton
|
|
|
|
|
|
|
|
|
Revenues from product
sales and services*
|
|
$
|
41.96
|
|
|
$
|
44.29
|
|
|
$
|
41.58
|
|
|
$
|
43.53
|
|
Cash production
cost2
|
|
28.46
|
|
|
34.32
|
|
|
27.70
|
|
|
35.56
|
|
Non-production cash
cost2
|
|
4.60
|
|
|
4.52
|
|
|
5.06
|
|
|
4.15
|
|
Cash
cost2
|
|
33.06
|
|
|
38.84
|
|
|
32.76
|
|
|
39.71
|
|
Depreciation,
depletion and amortization
|
|
1.97
|
|
|
2.44
|
|
|
2.18
|
|
|
2.25
|
|
Cost of goods sold
and operating expenses*
|
|
35.03
|
|
|
41.28
|
|
|
34.94
|
|
|
41.96
|
|
Sales
margin
|
|
$
|
6.93
|
|
|
$
|
3.01
|
|
|
$
|
6.64
|
|
|
$
|
1.57
|
|
|
|
|
|
|
|
|
|
|
*Excludes revenues
and expenses related to freight, which are offsetting and have no
impact on sales margin.
|
Second-quarter 2016 Asia Pacific Iron Ore sales volume increased
13 percent to 3.1 million metric tons, from 2.8 million metric tons
in 2015's second quarter. The volume increase was driven by the
timing of shipments related to prior year port maintenance
activities.
Cash production cost per metric ton2 in Asia Pacific
Iron Ore was $28.46, down 17 percent
from $34.32 in the prior year's
second quarter. The decrease was driven by reduced mining and
haulage costs, lower headcount and decreased site administrative
expenses.
Debt and Cash Flow
Total debt at the end of the second quarter of 2016 was
$2.5 billion, versus a comparable
$2.9 billion at the end of the
prior-year quarter. There were no borrowings on the Company's
asset-based lending facility at the end of the second quarter of
2016 or 2015. Cash and cash equivalents were $108 million, compared to $276 million at the end of the prior-year
quarter.
At the end of the second quarter of 2016, Cliffs had net
debt3 of $2.3 billion,
compared to $2.6 billion of net
debt3 at the end of the second quarter of 2015.
During the quarter, Cliffs received $31
million in cash as part of a long-term purchased power
arrangement with Minnesota Power. Also during the quarter, the
Company paid off the remaining balance of the outstanding equipment
loans of $23 million.
Capital expenditures during the quarter were $10 million, a 47 percent decrease compared to
$19 million in the second quarter of
2015. Cliffs also reported depreciation, depletion and amortization
of $27 million in the second quarter
of 2016.
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 $480 per
short ton. The Company notes that this estimate is based on its
customers' realized prices and not an index or spot market price,
valid through the end of 2016. For every $50 per short ton change in the customers'
full-year hot-rolled steel prices, Cliffs U.S. Iron Ore revenue
realizations per long ton in 2016 would be expected to increase or
decrease $2.00 if steel prices
increase or decrease, respectively.
The table below provides certain Platts IODEX averages for the
remaining six months of 2016 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 and
Cliffs' actual revenue realizations for the first six months of
2016. Due primarily to the price forecast increase for hot-band
steel, Cliffs has increased its revenues-per-ton expectations for
U.S. Iron Ore.
2016 Full-Year
Realized Revenues-Per-Ton Range Summary
|
Jul. - Dec.
Platts
IODEX (1)
|
|
U.S. Iron Ore
(2)
|
|
Asia Pacific Iron
Ore (3)
|
$40
|
|
$75 - $77
|
|
$34 - $36
|
$45
|
|
$75 - $77
|
|
$36 - $38
|
$50
|
|
$75 - $77
|
|
$38 - $40
|
$55
|
|
$76 - $78
|
|
$40 - $42
|
$60
|
|
$76 - $78
|
|
$42 - $44
|
$65
|
|
$76 - $78
|
|
$45 - $47
|
$70
|
|
$77 - $79
|
|
$47 - $49
|
(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 $480 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)
During the second quarter, Cliffs increased its full-year sales
volume expectation to 18 million long tons from its previous
expectation of 17.5 million long tons as a result of additional
sales to U.S. Steel Canada. In
addition, the Company's 2016 production volume guidance was
increased by 500,000 long tons to 16.5 million long tons.
Cliffs is maintaining its cash production cost per long
ton2 expectation of $50 -
$55 and the cash cost of goods sold per long ton2
expectation of $55 - $60. The cash
cost of goods sold per long ton2 expectation includes
expected idle costs of $55 million
for the full year, a $10 million
decrease from the previous expectation of $65 million as a result of earlier than expected
restarts of the Northshore and United Taconite mines.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $5 per long ton for
full-year 2016.
Asia Pacific Iron Ore Outlook (Metric Tons, F.O.B. the
port)
The Company is maintaining its full-year 2016 Asia Pacific Iron
Ore sales and production volume forecast of approximately 11.5
million metric tons. The product mix is expected to contain 50
percent lump and 50 percent fines.
Based on a full-year average exchange rate of $0.75 U.S. Dollar to Australian Dollar, the
Company is maintaining its full-year 2016 Asia Pacific Iron Ore
cash production cost per metric ton2 expectation of
$25 - $30. Cliffs' cash cost of goods
sold per metric ton2 is also unchanged at $30 - $35. Cliffs indicated that for every
$0.01 change in this exchange rate
for the remainder of the year, the Company's full-year cash cost of
goods sold is impacted by approximately $3
million.
Cliffs anticipates depreciation, depletion and amortization to
be approximately $3 per metric 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)
|
18
|
|
11.5
|
|
Production volume
(million tons)
|
16.5
|
|
11.5
|
|
Cash production
cost per ton2
|
$50 -
$55
|
|
$25 -
$30
|
|
Cash cost of goods
sold per ton2
|
$55 -
$60
|
|
$30 -
$35
|
|
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' full-year 2016 SG&A expense expectation is being
maintained at $100 million.
The Company is decreasing its full-year 2016 interest expense
expectation to be approximately $200
million, from its previous guidance of $220 million, as a result of several liability
management activities that were executed during the first half of
the year. Of the $200 million
expectation, approximately $170
million is considered cash and $30
million is considered non-cash.
Consolidated full-year 2016 depreciation, depletion and
amortization is expected to be approximately $120 million.
Capital Budget Update
Cliffs is maintaining its full-year 2016 capital expenditures
expectation of $75 million, which
includes approximately $25 million in
capital spend required to produce a specialized, super-flux pellet
called "Mustang" at United Taconite in order to meet a customer's
pellet specification requirements.
Conference Call Information
Cliffs Natural Resources Inc. will host a conference call this
morning, July 28, 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. Driven by the core values of safety, social,
environmental and capital stewardship, Cliffs' employees endeavor
to provide all stakeholders operating and financial
transparency.
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; our level of indebtedness
could limit cash flow available to fund working capital, capital
expenditures, acquisitions and other general corporate purposes or
ongoing needs of our business, which could prevent us from
fulfilling our debt obligations; 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, recently filed and forthcoming trade
cases, 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 CCAA 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 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; 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 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; and
problems or uncertainties with productivity, tons mined,
transportation, mine-closure obligations, environmental
liabilities, employee-benefit costs and other risks of the mining
industry. For additional factors affecting the business of Cliffs,
refer to Part I – Item 1A. Risk Factors of our Annual Report
on Form 10-K for the year ended December 31,
2015. You are urged to carefully consider these risk
factors.
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,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
REVENUES FROM PRODUCT
SALES AND SERVICES
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
452.8
|
|
|
$
|
454.3
|
|
|
$
|
728.4
|
|
|
$
|
857.4
|
|
Freight and venture
partners' cost reimbursements
|
|
43.4
|
|
|
43.8
|
|
|
73.3
|
|
|
86.7
|
|
|
|
496.2
|
|
|
498.1
|
|
|
801.7
|
|
|
944.1
|
|
COST OF GOODS SOLD
AND OPERATING EXPENSES
|
|
(404.7)
|
|
|
(440.8)
|
|
|
(679.3)
|
|
|
(806.0)
|
|
SALES
MARGIN
|
|
91.5
|
|
|
57.3
|
|
|
122.4
|
|
|
138.1
|
|
OTHER OPERATING
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(22.5)
|
|
|
(30.8)
|
|
|
(50.7)
|
|
|
(59.8)
|
|
Miscellaneous -
net
|
|
5.7
|
|
|
(0.8)
|
|
|
2.7
|
|
|
19.3
|
|
|
|
(16.8)
|
|
|
(31.6)
|
|
|
(48.0)
|
|
|
(40.5)
|
|
OPERATING
INCOME
|
|
74.7
|
|
|
25.7
|
|
|
74.4
|
|
|
97.6
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(50.7)
|
|
|
(63.6)
|
|
|
(107.5)
|
|
|
(106.5)
|
|
Gain on
extinguishment/restructuring of debt
|
|
3.6
|
|
|
—
|
|
|
182.4
|
|
|
313.7
|
|
Other non-operating
income (expense)
|
|
0.2
|
|
|
(2.1)
|
|
|
0.3
|
|
|
(2.9)
|
|
|
|
(46.9)
|
|
|
(65.7)
|
|
|
75.2
|
|
|
204.3
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
27.8
|
|
|
(40.0)
|
|
|
149.6
|
|
|
301.9
|
|
INCOME TAX BENEFIT
(EXPENSE)
|
|
2.1
|
|
|
1.8
|
|
|
(5.4)
|
|
|
(173.3)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
|
|
29.9
|
|
|
(38.2)
|
|
|
144.2
|
|
|
128.6
|
|
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX
|
|
(0.4)
|
|
|
103.4
|
|
|
2.1
|
|
|
(825.1)
|
|
NET INCOME
(LOSS)
|
|
29.5
|
|
|
65.2
|
|
|
146.3
|
|
|
(696.5)
|
|
INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST
|
|
(16.7)
|
|
|
(5.0)
|
|
|
(25.5)
|
|
|
(3.1)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
|
|
$
|
12.8
|
|
|
$
|
60.2
|
|
|
$
|
120.8
|
|
|
$
|
(699.6)
|
|
PREFERRED STOCK
DIVIDENDS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.8)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS
|
|
$
|
12.8
|
|
|
$
|
60.2
|
|
|
$
|
120.8
|
|
|
$
|
(712.4)
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.07
|
|
|
$
|
(0.28)
|
|
|
$
|
0.67
|
|
|
$
|
0.74
|
|
Discontinued
operations
|
|
—
|
|
|
0.67
|
|
|
0.01
|
|
|
(5.39)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - BASIC
|
|
$
|
0.07
|
|
|
$
|
0.39
|
|
|
$
|
0.68
|
|
|
$
|
(4.65)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS -
DILUTED
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.07
|
|
|
$
|
(0.28)
|
|
|
$
|
0.67
|
|
|
$
|
0.70
|
|
Discontinued
operations
|
|
—
|
|
|
0.67
|
|
|
0.01
|
|
|
(4.62)
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS -
DILUTED
|
|
$
|
0.07
|
|
|
$
|
0.39
|
|
|
$
|
0.68
|
|
|
$
|
(3.92)
|
|
AVERAGE NUMBER OF
SHARES (IN THOUSANDS)
|
|
|
|
|
|
|
|
|
Basic
|
|
182,330
|
|
|
153,232
|
|
|
177,003
|
|
|
153,203
|
|
Diluted
|
|
184,557
|
|
|
153,232
|
|
|
178,305
|
|
|
178,685
|
|
CASH DIVIDENDS
DECLARED PER DEPOSITARY SHARE
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.44
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
|
STATEMENTS OF
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION
|
|
|
|
(In
Millions)
|
|
|
June 30,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
108.2
|
|
|
$
|
285.2
|
|
Accounts receivable,
net
|
|
61.5
|
|
|
40.2
|
|
Inventories
|
|
391.2
|
|
|
329.6
|
|
Supplies and other
inventories
|
|
102.0
|
|
|
110.4
|
|
Short-term assets of
discontinued operations
|
|
—
|
|
|
14.9
|
|
Loans to and accounts
receivable from the Canadian Entities
|
|
70.2
|
|
|
72.9
|
|
Insurance coverage
receivable
|
|
0.8
|
|
|
93.5
|
|
Other current
assets
|
|
45.3
|
|
|
36.0
|
|
TOTAL CURRENT
ASSETS
|
|
779.2
|
|
|
982.7
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
|
993.1
|
|
|
1,059.0
|
|
OTHER
ASSETS
|
|
|
|
|
Other non-current
assets
|
|
78.7
|
|
|
93.8
|
|
TOTAL OTHER
ASSETS
|
|
78.7
|
|
|
93.8
|
|
TOTAL
ASSETS
|
|
$
|
1,851.0
|
|
|
$
|
2,135.5
|
|
LIABILITIES
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts
payable
|
|
$
|
91.9
|
|
|
$
|
106.3
|
|
Accrued
expenses
|
|
141.1
|
|
|
156.0
|
|
Short-term
liabilities of discontinued operations
|
|
4.4
|
|
|
6.9
|
|
Guarantees
|
|
0.2
|
|
|
96.5
|
|
Insured
loss
|
|
0.8
|
|
|
93.5
|
|
Other current
liabilities
|
|
137.7
|
|
|
122.5
|
|
TOTAL CURRENT
LIABILITIES
|
|
376.1
|
|
|
581.7
|
|
PENSION AND
POSTEMPLOYMENT BENEFIT LIABILITIES
|
|
206.4
|
|
|
221.0
|
|
ENVIRONMENTAL AND
MINE CLOSURE OBLIGATIONS
|
|
217.4
|
|
|
231.2
|
|
LONG-TERM
DEBT
|
|
2,489.7
|
|
|
2,699.4
|
|
OTHER
LIABILITIES
|
|
240.3
|
|
|
213.8
|
|
TOTAL
LIABILITIES
|
|
3,529.9
|
|
|
3,947.1
|
|
EQUITY
|
|
|
|
|
CLIFFS SHAREHOLDERS'
DEFICIT
|
|
(1,830.7)
|
|
|
(1,981.4)
|
|
NONCONTROLLING
INTEREST
|
|
151.8
|
|
|
169.8
|
|
TOTAL
DEFICIT
|
|
(1,678.9)
|
|
|
(1,811.6)
|
|
TOTAL LIABILITIES AND
DEFICIT
|
|
$
|
1,851.0
|
|
|
$
|
2,135.5
|
|
CLIFFS NATURAL
RESOURCES INC. AND SUBSIDIARIES
|
STATEMENTS OF
UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS
|
|
|
|
(In
Millions)
|
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2015
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net income
(loss)
|
|
$
|
146.3
|
|
|
$
|
(696.5)
|
|
Adjustments to
reconcile net income (loss) to net cash used by operating
activities:
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
62.1
|
|
|
63.5
|
|
Impairment of other
long-lived assets
|
|
—
|
|
|
76.6
|
|
Deferred income
taxes
|
|
—
|
|
|
162.6
|
|
Gain on
extinguishment/restructuring of debt
|
|
(182.4)
|
|
|
(313.7)
|
|
(Gain) loss on
deconsolidation, net of cash deconsolidated
|
|
(4.1)
|
|
|
641.4
|
|
Other
|
|
5.2
|
|
|
54.3
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables and other
assets
|
|
103.6
|
|
|
136.6
|
|
Inventories
|
|
(52.2)
|
|
|
(217.4)
|
|
Payables, accrued
expenses and other liabilities
|
|
(97.8)
|
|
|
(155.6)
|
|
Net cash used by
operating activities
|
|
(19.3)
|
|
|
(248.2)
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(20.2)
|
|
|
(34.4)
|
|
Other investing
activities
|
|
5.9
|
|
|
0.4
|
|
Net cash used by
investing activities
|
|
(14.3)
|
|
|
(34.0)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Repayment of
equipment loans
|
|
(95.6)
|
|
|
(1.9)
|
|
Distributions of
partnership equity
|
|
(28.1)
|
|
|
(17.1)
|
|
Debt issuance
costs
|
|
(5.2)
|
|
|
(33.6)
|
|
Proceeds from first
lien notes offering
|
|
—
|
|
|
503.5
|
|
Repurchase of
debt
|
|
—
|
|
|
(133.3)
|
|
Borrowings under
credit facilities
|
|
105.0
|
|
|
309.8
|
|
Repayment under
credit facilities
|
|
(105.0)
|
|
|
(309.8)
|
|
Preferred stock
dividends
|
|
—
|
|
|
(25.6)
|
|
Other financing
activities
|
|
(13.6)
|
|
|
(23.6)
|
|
Net cash provided
(used) by financing activities
|
|
(142.5)
|
|
|
268.4
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(0.9)
|
|
|
(0.9)
|
|
DECREASE IN CASH AND
CASH EQUIVALENTS
|
|
(177.0)
|
|
|
(14.7)
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
285.2
|
|
|
290.9
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
|
108.2
|
|
|
$
|
276.2
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Income
(Loss)
|
|
$
|
29.5
|
|
|
$
|
65.2
|
|
|
$
|
146.3
|
|
|
$
|
(696.5)
|
|
Less:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(50.7)
|
|
|
(64.3)
|
|
|
(107.5)
|
|
|
(108.5)
|
|
Income tax benefit
(expense)
|
|
2.1
|
|
|
2.9
|
|
|
(5.4)
|
|
|
(172.1)
|
|
Depreciation,
depletion and amortization
|
|
(26.9)
|
|
|
(30.5)
|
|
|
(62.1)
|
|
|
(63.5)
|
|
EBITDA
|
|
$
|
105.0
|
|
|
$
|
157.1
|
|
|
$
|
321.3
|
|
|
$
|
(352.4)
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Impact of
discontinued operations
|
|
(0.4)
|
|
|
103.0
|
|
|
2.1
|
|
|
(821.1)
|
|
Gain on
extinguishment/restructuring of debt
|
|
3.6
|
|
|
—
|
|
|
182.4
|
|
|
313.7
|
|
Foreign exchange
remeasurement
|
|
0.2
|
|
|
(0.8)
|
|
|
(0.9)
|
|
|
12.7
|
|
Severance and
contractor termination costs
|
|
—
|
|
|
(10.0)
|
|
|
(0.1)
|
|
|
(11.6)
|
|
Adjusted
EBITDA*
|
|
$
|
101.6
|
|
|
$
|
64.9
|
|
|
$
|
137.8
|
|
|
$
|
153.9
|
|
|
*Excluding $20
million of idle expenses primarily associated with the Northshore
and United Taconite mines, Cliffs' adjusted EBITDA of $101.6
million would have been approximately $122 million.
|
2 CLIFFS NATURAL RESOURCES
INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
EXPLANATIONS
Cash production cost, non-production cash cost, and cash cost
per long/metric 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. A
reconciliation of these measures to their most directly comparable
GAAP measures is provided in the U.S. Iron Ore and Asia Pacific
Iron Ore results tables on pages 3 and 4 of this release. The
presentation of these measures may be different from non-GAAP
financial measures used by other companies.
- Cash production cost per long/metric 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 long/metric ton.
- Non-production cash cost per long/metric ton is defined as the
sum of idle costs, period costs (including royalties), costs of
services, and inventory effects per long/metric ton.
- Cash cost per long/metric ton is defined as cost of goods sold
and operating expenses per ton less depreciation, depletion and
amortization per long/metric ton.
3 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
and undiscounted interest. A reconciliation of this consolidated
measure to its most directly comparable GAAP measures is provided
in the table below.
|
|
(In
Millions)
|
|
|
June
30,
2016
|
|
June
30,
2015
|
Long-term
debt
|
|
$
|
2,489.7
|
|
|
$
|
2,887.4
|
|
Short-term debt and
current portion of long-term debt
|
|
17.5
|
|
|
—
|
|
Total Debt
|
|
$
|
2,507.2
|
|
|
$
|
2,887.4
|
|
Less:
|
|
|
|
|
Cash and cash
equivalents
|
|
108.2
|
|
|
276.2
|
|
Undiscounted
interest
|
|
74.3
|
|
|
—
|
|
Net Debt
|
|
$
|
2,324.7
|
|
|
$
|
2,611.2
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cliffs-natural-resources-inc-reports-second-quarter-2016-results-300305460.html
SOURCE Cliffs Natural Resources Inc.