- Net Income from Continuing Operations
of $77 million
- Earnings from Continuing Operations of
$0.26 per diluted share
Cliffs Natural Resources Inc. (NYSE: CLF) today reported
second-quarter results for the period ended June 30, 2017. The
Company reported consolidated revenues of $569 million, an increase
of 15 percent compared to the prior year's second-quarter revenues
of $496 million. Cost of goods sold increased by 5 percent to $424
million compared to $405 million reported in the second quarter of
2016.
The Company recorded net income from continuing operations of
$77 million in the second quarter, including a $5 million, or $0.02
per share, loss on extinguishment of debt. This compares to net
income from continuing operations of $30 million recorded in the
prior-year quarter, which included a $4 million gain on
extinguishment of debt. Second-quarter 2017 net income of $30
million included a $46 million non-cash loss from discontinued
operations.
For the second quarter of 2017, adjusted EBITDA1 was $137
million, a 35 percent increase compared to $102 million reported in
the second quarter of 2016.
Adjusted EBITDA1 by Segment (in
millions) U.S. Asia Pacific
Corporate/ Iron Ore Iron Ore
Other Total Q2 2017 Adjusted EBITDA1 $
161.5 $ 3.0 $ (27.5 )
$ 137.0
Lourenco Goncalves, Cliffs' Chairman, President and Chief
Executive Officer, said, "Our second quarter results clearly
demonstrate the true power of our U.S. Iron Ore business, in which
we have unrivaled operational, commercial, logistical, and quality
advantages. Even as iron ore prices in Asia dropped substantially
during the second quarter, these unique advantages enabled us to
achieve EBITDA margins that are at the peak of the industry in the
United States." Mr. Goncalves added, "Going forward, we will
further expand on our unquestionable strength as a supplier of
customized iron units in the Great Lakes, with the development of
our HBI production plant in Toledo, Ohio. The new plant will enable
Cliffs to supply high-quality, customized HBI as feedstock to
select Electric Arc Furnace steelmakers. As EAF's become Cliffs’
clients, we expect the earnings power of U.S. Iron Ore will carry
over to this new business."
U.S. Iron Ore
Three Months Ended Six Months Ended
June 30, June 30, 2017 2016
2017
2016
Volumes - In
Thousands of Long Tons
Sales volume
4,310 4,146
7,428 6,056 Production
volume
4,691 4,155
8,968 7,202
Sales Margin - In
Millions
Revenues from product sales and services
$ 471.3 $
361.7
$ 757.5 $ 547.2 Cost of goods sold and
operating expenses
327.1 291.7
564.9
464.0 Sales margin
$ 144.2 $ 70.0
$ 192.6 $ 83.2
Sales Margin -
Per Long Ton
Revenues from product sales and services*
$ 96.75 $
77.81
$ 89.43 $ 79.72
Cash cost of goods sold and operating
expense rate2
59.47 56.25
59.05 58.34 Depreciation, depletion and
amortization
3.87
4.68
4.46 7.65 Cost of goods sold and
operating expenses*
63.34 60.93
63.51
65.99 Sales margin
$ 33.41 $ 16.88
$ 25.92 $ 13.73 *Excludes
revenues and expenses related to domestic freight, which are
offsetting and have no impact on sales margin. Revenues and
expenses also exclude venture partner cost reimbursements.
U.S. Iron Ore pellet sales volume in the second quarter of 2017
was 4.3 million long tons, a 4 percent increase when compared to
the second quarter of 2016 as a result of increased customer
demand.
Cash cost of goods sold and operating expense rate2 in U.S. Iron
Ore was $59.47 per long ton, a 6 percent increase from $56.25 per
long ton in the prior year's second quarter. The increase was
primarily driven by higher employee-related expenses, as well as
increased energy, repair and royalty costs. This was partially
offset by reduced idle costs.
Asia Pacific Iron Ore
Three Months Ended Six Months Ended
June 30, June 30, 2017 2016
2017
2016
Volumes - In
Thousands of Metric Tons
Sales volume
2,485 3,103
5,528 5,906 Production
volume
2,762 2,800
5,433 5,607
Sales Margin - In
Millions
Revenues from product sales and services
$ 98.0 $
134.5
$ 273.4 $ 254.5 Cost of goods sold and
operating expenses
97.1 113.0
225.2 215.3 Sales margin
$ 0.9 $ 21.5
$ 48.2 $ 39.2
Sales Margin -
Per Metric Ton
Revenues from product sales and services*
$ 38.23 $
41.96
$ 47.11 $ 41.58 Cash cost of goods sold and
operating expense rate2
36.52 33.06
36.94 32.76
Depreciation, depletion and amortization
1.33
1.97
1.45 2.18 Cost of goods sold and
operating expenses*
37.85 35.03
38.39 34.94 Sales margin
$
0.38
$
6.93
$ 8.72 $ 6.64 *Excludes revenues and expenses
related to freight, which are offsetting and have no impact on
sales margin.
Second-quarter 2017 Asia Pacific Iron Ore sales volume decreased
20 percent to 2.5 million metric tons, from 3.1 million metric tons
in the second quarter of 2016. The decrease was driven by the
timing of shipments and market conditions, which resulted in the
termination of certain spot sales.
Cash cost of goods sold and operating expense rate2 in Asia
Pacific Iron Ore was $36.52 per metric ton in the second quarter of
2017, a 10 percent increase from the prior-year quarter. The
increase was attributable to increased mining costs, driven by a
change in the overall operating plan resulting in a higher strip
ratio.
Other Income Statement Items
Cliffs' second-quarter 2017 SG&A expenses were $28 million
compared to second-quarter 2016 expenses of $23 million. The
increase was driven primarily by higher spend related to incentive
compensation accruals, as well as prefeasibility spend on the
development of the HBI production plant.
Cliffs' net interest expense during the second quarter was $31
million, a 38 percent decrease when compared to the second-quarter
2016 expense of $51 million, as a result of approximately $930
million in principal amount of debt reduced over the previous 12
months.
Miscellaneous-net expense of $3 million included, among other
items, $6 million in charges related to the indefinite idle at
Empire mine.
During the quarter, Cliffs reported a $46 million non-cash loss
from discontinued operations, as a liability was recorded related
to a probable preference claim against Cliffs as part of the CCAA
proceedings. The estimated liability is approximately equal to the
value of the Company’s related-party claims against the CCAA
estate.
Debt and Cash Flow
Total debt at the end of the second quarter of 2017 was $1.6
billion, approximately $900 million lower than the $2.5 billion
total debt at the end of the prior-year quarter. Cliffs had net
debt3 of $1.3 billion at the end of the second quarter of 2017,
compared to $2.3 billion of net debt3 at the end of the second
quarter of 2016. The Company had no borrowings under its
asset-based lending facility at the end of the second quarter of
2017 or 2016.
Capital expenditures during the quarter were $22 million,
compared to $10 million in the prior-year quarter. The increase was
driven primarily by spending related to the Mustang Project at the
United Taconite mine.
Outlook
Based on the assumption that iron ore and steel prices will
average for the remainder of 2017 their respective year-to-date
averages, Cliffs would generate approximately $310
million of net income and $650 million of adjusted EBITDA1 for
the full-year 2017.
Segment Outlook
2017 Outlook Summary
Asia Pacific
Per Sales Ton Information
U.S. Iron Ore (A)
Iron Ore (B)
Cost of goods sold and operating expense rate $70 - $75 $37 - $42
Less: Freight and venture partners' cost reimbursements expense
rate (C) $11 $2 Depreciation, depletion & amortization rate $4
$1 Cash cost of goods sold and operating expense rate2 $55 - $60
$34 - $39 Sales volume (million tons) 19.0 11.0 Production
volume (million tons) 19.0 11.5 (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 lump and fines. (C) The freight and
venture partners' cost reimbursements have offsetting amounts in
revenue and have no impact on sales margin.
U.S. Iron Ore Outlook (Long Tons)
Cliffs full-year sales and production volumes expectation is
unchanged at approximately 19 million long tons.
Cliffs' full-year 2017 U.S. Iron Ore cash cost of goods sold and
operating expense2 expectation is unchanged at $55 - $60 per long
ton.
Asia Pacific Iron Ore Outlook (Metric Tons, F.O.B. the
port)
Cliffs' full-year 2017 Asia Pacific Iron Ore expected production
volume is unchanged at approximately 11.5 million metric tons. Due
to market conditions, sales volume outlook has been reduced by
500,000 metric tons to 11 million metric tons. The product mix is
expected to contain 52 percent lump ore and 48 percent fines.
Based on a full-year average exchange rate of $0.76 U.S. Dollar
to Australian Dollar, Cliffs' full-year 2017 cash cost of goods
sold and operating expense2 expectation is unchanged at $34 - $39
per metric ton.
SG&A Expenses and Other Expectations
Cliffs increased its full-year SG&A expense expectation by
$10 million to $110 million to incorporate HBI prefeasibility spend
and higher-than-anticipated incentive compensation accruals. Cliffs
also notes that of the $110 million expectation, approximately $25
million is considered non-cash.
The Company's full-year 2017 interest expense is expected to be
approximately $135 million. Of this $135 million, approximately $20
million is expected to be non-cash.
Capital Budget Update
Cliffs' full-year 2017 capital expenditures budget was increased
by $10 million to $115 million, with the increase attributable to
early spending related to the HBI production plant.
Conference Call Information
Cliffs Natural Resources Inc. will host a conference call this
morning, July 27, 2017, 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. Founded in 1847, we are recognized as the
largest and oldest independent iron ore mining company in the
United States. We are a major supplier of iron ore pellets to the
North American steel industry from our mines and pellet plants
located in Michigan and Minnesota. Additionally, we operate an iron
ore mining complex in Western Australia. By 2020, Cliffs expects to
be the sole producer of hot briquetted iron in the Great Lakes
region with the development of its first production plant in
Toledo, Ohio. Driven by the core values of safety, social,
environmental and capital stewardship, our employees endeavor to
provide all stakeholders with 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: uncertainty and weaknesses
in global economic conditions, including downward pressure on
prices caused by oversupply or imported products, the impact of any
reduced barriers to trade, the outcomes of recently filed and
forthcoming trade cases, reduced market demand and any change to
the economic growth rate in China; continued volatility of iron ore
and steel prices and other trends, including the supply approach of
the major iron ore producers, affecting our financial condition,
results of operations or future prospects, specifically the impact
of price-adjustment factors on our sales contracts; 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; availability
of capital and our ability to maintain adequate liquidity; our
ability to successfully conclude the CCAA process in a manner that
minimizes cash outflows and associated liabilities; the impact of
our customers reducing their steel production due to increased
market share of steel produced using other methods or
lighter-weight steel alternatives; uncertainty relating to
restructurings in the steel industry and/or affecting the steel
industry; 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; problems or
uncertainties with productivity, tons mined, transportation,
mine-closure obligations, environmental liabilities,
employee-benefit costs and other risks of the mining industry; our
ability to reach agreement with our customers regarding any
modifications to sales contract provisions, renewals or new
arrangements; our actual levels of capital spending; our ability to
successfully diversify our product mix and add new customers beyond
our traditional blast furnace clientele; our actual economic iron
ore reserves or reductions in current mineral estimates, including
whether any mineralized material qualifies as a reserve; our
ability to cost-effectively achieve planned production rates or
levels, including at our HBI production plant; our ability to
successfully identify and consummate any strategic investments or
development projects, including our HBI production plant; our
ability to obtain the investments necessary for our HBI production
plant; changes in sales volume or mix; 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; our ability to maintain appropriate relations
with unions and employees; 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; 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; and the potential existence of significant deficiencies
or material weakness in our internal control over financial
reporting.
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, 2016. 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 Six Months Ended June 30,
June 30, 2017 2016
2017 2016
REVENUES FROM PRODUCT SALES AND SERVICES Product
$
512.0 $ 452.8
$ 924.8 $ 728.4 Freight and
venture partners' cost reimbursements
57.3 43.4
106.1 73.3
569.3 496.2
1,030.9 801.7 COST OF GOODS SOLD AND OPERATING EXPENSES
(424.2 ) (404.7 )
(790.1 ) (679.3 )
SALES MARGIN
145.1 91.5
240.8 122.4 OTHER OPERATING
INCOME (EXPENSE) Selling, general and administrative expenses
(27.5 ) (22.5 )
(53.2 ) (50.7 )
Miscellaneous - net
(3.0 ) 5.7
8.9
2.7
(30.5 ) (16.8 )
(44.3
) (48.0 ) OPERATING INCOME
114.6 74.7
196.5
74.4 OTHER INCOME (EXPENSE) Interest expense, net
(31.4
) (50.7 )
(74.2 ) (107.5 ) Gain (loss) on
extinguishment/restructuring of debt
(4.9 ) 3.6
(76.8 ) 182.4 Other non-operating income
0.8
0.2
1.5 0.3
(35.5
) (46.9 )
(149.5 ) 75.2 INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
79.1 27.8
47.0 149.6 INCOME TAX BENEFIT (EXPENSE)
(2.6 )
2.1
(0.8 ) (5.4 ) INCOME FROM CONTINUING
OPERATIONS
76.5 29.9
46.2 144.2 INCOME (LOSS) FROM
DISCONTINUED OPERATIONS, NET OF TAX
(46.4 ) (0.4 )
(45.9 ) 2.1 NET INCOME
30.1 29.5
0.3 146.3 LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING
INTEREST
1.7 (16.7 )
3.4 (25.5 ) NET
INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS
$ 31.8
$ 12.8
$ 3.7 $ 120.8
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CLIFFS
SHAREHOLDERS - BASIC Continuing operations
$ 0.26 $
0.07
$ 0.18 $ 0.67 Discontinued operations
(0.16 ) —
(0.16 ) 0.01
$ 0.10 $ 0.07
$ 0.02
$ 0.68 EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE
TO CLIFFS SHAREHOLDERS - DILUTED Continuing operations
$
0.26 $ 0.07
$ 0.17 $ 0.67 Discontinued
operations
(0.15 ) —
(0.16 )
0.01
$ 0.11 $ 0.07
$
0.01 $ 0.68 AVERAGE NUMBER OF SHARES (IN
THOUSANDS) Basic
296,070 182,330
280,617 177,003
Diluted
300,711 184,557
285,247 178,305
CLIFFS NATURAL RESOURCES INC. AND SUBSIDIARIES STATEMENTS
OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION
(In Millions) June 30, December 31,
2017 2016
ASSETS
CURRENT ASSETS Cash and cash equivalents
$ 321.5 $
323.4 Accounts receivable, net
76.7 128.7 Inventories
287.6 178.4 Supplies and other inventories
83.6 91.4
Loans to and accounts receivable from the Canadian Entities
50.1 48.6 Other current assets
88.8 54.1
TOTAL CURRENT ASSETS
908.3 824.6 PROPERTY, PLANT AND
EQUIPMENT, NET
999.1 984.4 OTHER NON-CURRENT ASSETS
122.7 114.9 TOTAL ASSETS
$
2,030.1 $ 1,923.9
LIABILITIES
CURRENT LIABILITIES Accounts payable
$ 111.7 $ 107.6
Accrued expenses
112.8 123.3 Accrued interest
30.7
40.2 Contingent claims
50.0 — Other current liabilities
108.1 120.0 TOTAL CURRENT LIABILITIES
413.3 391.1 PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES
276.1 280.5 ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS
201.9 193.9 LONG-TERM DEBT
1,611.8 2,175.1 OTHER
LIABILITIES
193.7 213.8 TOTAL LIABILITIES
2,696.8 3,254.4
EQUITY
CLIFFS SHAREHOLDERS' DEFICIT
(789.1 ) (1,464.3 )
NONCONTROLLING INTEREST
122.4 133.8 TOTAL
DEFICIT
(666.7 ) (1,330.5 ) TOTAL LIABILITIES AND
DEFICIT
$ 2,030.1 $ 1,923.9
CLIFFS NATURAL RESOURCES INC. AND SUBSIDIARIES STATEMENTS
OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS (In
Millions) Six Months Ended June 30, 2017
2016 OPERATING ACTIVITIES Net income
$ 0.3 $
146.3 Adjustments to reconcile net income to net cash provided
(used) by operating activities: Depreciation, depletion and
amortization
44.8 62.1 (Gain) loss on
extinguishment/restructuring of debt
76.8 (182.4 ) (Gain)
loss on deconsolidation
48.6 (4.1 ) Other
(8.3
) 5.2 Changes in operating assets and liabilities:
Receivables and other assets
68.3 103.6 Inventories
(106.6 ) (52.2 ) Payables, accrued expenses and other
liabilities
(56.1 ) (97.8 ) Net cash provided (used)
by operating activities
67.8 (19.3 ) INVESTING ACTIVITIES
Purchase of property, plant and equipment
(49.4 )
(20.2 ) Other investing activities
1.1 5.9
Net cash used by investing activities
(48.3 ) (14.3 ) FINANCING ACTIVITIES Proceeds from
issuance of senior notes
500.0 — Debt issuance costs
(8.5 ) (5.2 ) Net proceeds from issuance of common
shares
661.3 — Repurchase of debt
(1,154.0 ) —
Distributions of partnership equity
(8.7 ) (28.1 )
Repayment of equipment loans
— (95.6 ) Borrowings under
credit facilities
— 105.0 Repayment under credit facilities
— (105.0 ) Other financing activities
(13.9 )
(13.6 ) Net cash used by financing activities
(23.8 )
(142.5 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH
2.4
(0.9 ) DECREASE IN CASH AND CASH EQUIVALENTS
(1.9 )
(177.0 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
323.4 285.2 CASH AND CASH EQUIVALENTS AT END
OF PERIOD
$ 321.5 $ 108.2
1 CLIFFS NATURAL RESOURCES INC. AND
SUBSIDIARIESNON-GAAP RECONCILIATION - EBITDA AND ADJUSTED
EBITDA
In addition to the consolidated financial statements presented
in accordance with U.S. GAAP, the Company has presented adjusted
EBITDA on a segment basis, and both EBITDA and adjusted EBITDA on a
consolidated basis. EBITDA and Adjusted EBITDA 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 consolidated measures to their
most directly comparable GAAP measures is provided in the table
below.
(In Millions) (In Millions) Three
Months Ended Six Months Ended June 30, June
30, 2017 2016
2017 2016 Net Income
$ 30.1 $ 29.5
$ 0.3 $ 146.3 Less:
Interest expense, net
(31.4 ) (50.7 )
(74.2
) (107.5 ) Income tax benefit (expense)
(2.6 )
2.1
(0.8 ) (5.4 ) Depreciation, depletion and
amortization
(21.6 ) (26.9 )
(44.8 )
(62.1 ) EBITDA
$
85.7
$ 105.0
$ 120.1 $ 321.3
Less: Impact of discontinued operations
$
(46.4 ) $ (0.4 )
$ (45.9 ) $ 2.1
Gain (loss) on extinguishment/restructuring of debt
(4.9
) 3.6
(76.8 )
182.4 Foreign exchange remeasurement
— 0.2
13.6 (0.9
) Severance and contractor termination costs
— —
— (0.1 ) Adjusted EBITDA
$ 137.0
$ 101.6
$ 229.2 $ 137.8
NON-GAAP RECONCILIATION - EBITDA AND
ADJUSTED EBITDA OUTLOOK
(In Millions) Year Ending December 31,
2017 Net Income
$ 310.0 Less: Interest
expense, net
(135.0 ) Income tax expense
(0.9
) Depreciation, depletion and amortization
(95.0
) EBITDA
$ 540.9 Less*: Impact
of discontinued operations
$ (45.9 ) Loss on
extinguishment/restructuring of debt
(76.8 ) Foreign exchange remeasurement
13.6
Adjusted EBITDA
$ 650.0 *Adjustments to
EBITDA are unpredictable by nature and thus cannot be forecasted
beyond June 30, 2017.
2 CLIFFS NATURAL RESOURCES INC. AND
SUBSIDIARIESNON-GAAP RECONCILIATION EXPLANATIONS
The Company presents cash cost of goods sold and operating
expense rate per long/metric ton, which is a non-GAAP financial
measure that management uses in evaluating operating performance.
Cliffs believes the presentation of non-GAAP cash cost of goods
sold and operating expenses is useful to investors because it
excludes depreciation, depletion and amortization, which are
non-cash, and freight and venture partners' cost reimbursements,
which have no impact on sales margin, thus providing a more
accurate view of the cash outflows related to the sale of iron ore.
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.
(In Millions) Three Months Ended June 30,
Three Months Ended June 30,
2017 2016
U.S.
Iron
Asia Pacific
U.S. Iron
Asia Pacific
Ore Iron Ore Total Ore Iron Ore Total
Cost of goods sold and operating expenses
$ (327.1
) $ (97.1 ) $ (424.2
) $ (291.7 ) $ (113.0 ) $ (404.7 ) Less: Freight and
reimbursements
(54.3 ) (3.0 )
(57.3 ) (39.1 ) (4.3 ) (43.4 ) Depreciation,
depletion & amortization
(16.7 ) (3.3
) (20.0 ) (19.4 ) (6.1 ) (25.5 ) Cash cost of
goods sold and operating expenses
$ (256.1 )
$ (90.8 ) $ (346.9 ) $
(233.2 ) $ (102.6 ) $ (335.8 )
(In Millions) Six
Months Ended June 30, Six Months Ended June 30,
2017 2016
U.S. Iron
Asia Pacific
U.S. Iron
Asia Pacific
Ore Iron Ore Total Ore Iron Ore Total
Cost of goods sold and operating expenses
$ (564.9
) $ (225.2 ) $ (790.1
) $ (464.0 ) $ (215.3 ) $ (679.3 ) Less: Freight and
reimbursements
(93.2 ) (13.0 )
(106.2 ) (64.4 ) (8.9 ) (73.3 ) Depreciation,
depletion & amortization
(33.1 ) (8.0
) (41.1 ) (46.3 ) (12.9 ) (59.2 ) Cash cost of
goods sold and operating expenses
$ (438.6 )
$ (204.2 ) $ (642.8 ) $
(353.3 ) $ (193.5 ) $ (546.8 )
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 measure to its
most directly comparable GAAP measure is provided in the table
below.
(In Millions) June 30, June 30,
2017 2016 Long-term debt
$ 1,611.8 $
2,489.7 Short-term debt and current portion of long-term debt
— 17.5 Total Debt
$ 1,611.8 $
2,507.2 Less: Cash and cash equivalents
$ 321.5 $
108.2 Undiscounted interest
— 74.3 Net Debt
$
1,290.3 $ 2,324.7
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727005336/en/
Cliffs Natural Resources Inc.MEDIA CONTACT:Patricia
Persico, 216-694-5316Director, Corporate
CommunicationsorINVESTOR CONTACT:Paul Finan,
216-694-6544Director, Investor Relations
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