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			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Ohio

34-1464672

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

200 Public Square,

Cleveland,

Ohio

44114-2315

(Address of Principal Executive Offices)

(Zip Code)

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common shares, par value $0.125 per share

CLF

New York Stock Exchange

Large accelerated filer			☒			Accelerated filer			☐
Non-accelerated filer			☐			Smaller reporting company			☐
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Yes  ☐                                        No  ☒

Page Number

DEFINITIONS

1

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

Statements of Unaudited Condensed Consolidated Financial Position as of September 30, 2020 and December 31, 2019

3

Statements of Unaudited Condensed Consolidated Operations for the Three and Nine Months Ended September 30, 2020 and 2019

4

Statements of Unaudited Condensed Consolidated Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2020 and 2019

5

Statements of Unaudited Condensed Consolidated Cash Flows for the Nine Months Ended September 30, 2020 and 2019

6

Statements of Unaudited Condensed Consolidated Changes in Equity for the Three and Nine Months Ended September 30, 2020 and 2019

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

38

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

61

Item 4.

Controls and Procedures

61

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

63

Item 1A.

Risk Factors

63

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

68

Item 4.

Mine Safety Disclosures

68

Item 5.

Other Information

68

Item 6.

Exhibits

68

Signatures

70

Abbreviation or acronym						Term
ABL Facility						Asset-Based Revolving Credit Agreement, by and among Bank of America, N.A., as Agent, the Lenders that are parties thereto, as the Lenders, and Cleveland-Cliffs Inc., as Parent and a Borrower, dated as of March 13, 2020, as amended
Adjusted EBITDA						EBITDA excluding certain items such as EBITDA of noncontrolling interests, extinguishment of debt, severance, acquisition-related costs, amortization of inventory step-up, impacts of discontinued operations and intersegment corporate allocations of selling, general and administrative costs
AK Coal						AK Coal Resources, Inc., an indirect, wholly owned subsidiary of AK Steel, and related coal mining assets
AK Steel						AK Steel Holding Corporation and its consolidated subsidiaries, including AK Steel Corporation, its direct, wholly owned subsidiary, collectively, unless stated otherwise or the context indicates otherwise
AK Tube						AK Tube LLC, an indirect, wholly owned subsidiary of AK Steel
AMT						Alternative Minimum Tax
AOCI						Accumulated Other Comprehensive Income (Loss)
ArcelorMittal S.A.						ArcelorMittal S.A., an entity formed under the laws of Luxembourg and the ultimate parent entity of ArcelorMittal USA
ArcelorMittal USA						ArcelorMittal USA LLC (including many of its United States affiliates, subsidiaries and representatives. References to ArcelorMittal USA comprise all such relationships unless a specific ArcelorMittal USA entity is referenced)
ASC						Accounting Standards Codification
Atlantic Basin Pellet Premium						Platts Atlantic Basin Blast Furnace 65% Fe pellet premium
Board						The Board of Directors of Cleveland-Cliffs Inc.
CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CERCLA						Comprehensive Environmental Response, Compensation and Liability Act
Compensation Committee						Compensation and Organization Committee of the Board
COVID-19						A novel strain of coronavirus that the World Health Organization declared a global pandemic in March 2020
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act
DR-grade						Direct Reduction-grade
EAF						Electric Arc Furnace
EBITDA						Earnings before interest, taxes, depreciation and amortization
Empire						Empire Iron Mining Partnership
EPA						U.S. Environmental Protection Agency
ERISA						Employee Retirement Income Security Act of 1974, as amended
Exchange Act						Securities Exchange Act of 1934, as amended
Fe						Iron
FILO						First-in, last-out
Former ABL Facility						Amended and Restated Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent, the Lenders that are parties thereto, as the Lenders, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party thereto, as Borrowers, dated as of March 30, 2015, as amended and restated as of February 28, 2018, and as further amended
GAAP						Accounting principles generally accepted in the United States
HBI						Hot Briquetted Iron
Hibbing						Hibbing Taconite Company, an unincorporated joint venture
Hot-rolled coil steel price						Estimated average annual daily market price for hot-rolled coil steel
IRBs						Industrial Revenue Bonds
LIBOR						London Interbank Offered Rate
LIFO						Last-in, first-out
Long ton						2,240 pounds
Merger						The merger of Merger Sub with and into AK Steel, with AK Steel surviving the merger as a wholly owned subsidiary of Cliffs, subject to the terms and conditions set forth in the Merger Agreement, effective as of March 13, 2020
Merger Agreement						Agreement and Plan of Merger, dated as of December 2, 2019, among Cliffs, AK Steel and Merger Sub
Merger Sub						Pepper Merger Sub Inc., a direct, wholly owned subsidiary of Cliffs prior to the Merger
Metric ton						2,205 pounds
MMBtu						Million British Thermal Units
MSHA						U.S. Mine Safety and Health Administration
Net ton						2,000 pounds
Northshore						Northshore Mining Company
OPEB						Other postretirement benefits
Platts 62% Price						Platts IODEX 62% Fe Fines cost and freight North China
PPI						Producer Price Indices

Abbreviation or acronym						Term
Precision Partners						PPHC Holdings, LLC (an indirect, wholly owned subsidiary of AK Steel) and its subsidiaries, collectively, unless stated otherwise or the context indicates otherwise
RCRA						Resource Conservation and Recovery Act
SEC						U.S. Securities and Exchange Commission
Section 232						Section 232 of the Trade Expansion Act of 1962, as amended
Securities Act						Securities Act of 1933, as amended
SunCoke Middletown						Middletown Coke Company, LLC, a subsidiary of SunCoke Energy, Inc.
Tilden						Tilden Mining Company L.C.
Topic 805						ASC Topic 805, Business Combinations
Topic 815						ASC Topic 815, Derivatives and Hedging
Transaction						The purchase of substantially all of the operations of ArcelorMittal USA, subject to the terms and conditions set forth in the Transaction Agreement
Transaction Agreement						Transaction Agreement, by and between Cliffs and ArcelorMittal S.A., dated as of September 28, 2020
United Taconite						United Taconite LLC
U.S.						United States of America
U.S. Steel						Ontario Hibbing Company, a subsidiary of United States Steel Corporation and a participant in Hibbing
USMCA						United States-Mexico-Canada Agreement
VIE						Variable Interest Entity

Item 1.			Financial Statements

			(In Millions)
			September 30, 2020						December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents			$	56.0					$	352.6
Accounts receivable, net			653.7						94.0
Inventories			1,795.1						317.4
Income tax receivable, current			9.0						58.6
Other current assets			115.0						75.3
Total current assets			2,628.8						897.9
Non-current assets:
Property, plant and equipment, net			4,550.7						1,929.0
Goodwill			144.0						2.1
Intangible assets, net			190.1						48.1
Income tax receivable, non-current			—						62.7
Deferred income taxes			519.5						459.5
Right-of-use asset, operating lease			207.7						11.7
Other non-current assets			240.1						92.8
TOTAL ASSETS			$	8,480.9					$	3,503.8
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable			$	710.7					$	193.2
Accrued liabilities			279.4						126.3
Other current liabilities			224.0						89.9
Total current liabilities			1,214.1						409.4
Non-current liabilities:
Long-term debt			4,309.8						2,113.8
Operating lease liability, non-current			174.1						10.5
Intangible liabilities, net			65.9						—
Pension and OPEB liabilities			1,130.6						311.5
Asset retirement obligations			182.0						163.2
Other non-current liabilities			280.7						137.5
TOTAL LIABILITIES			7,357.2						3,145.9
Commitments and contingencies (See Note 18)
Equity:
Common shares - par value $0.125 per share
Authorized - 600,000,000 shares (2019 - 600,000,000 shares);
Issued - 428,645,866 shares (2019 - 301,886,794 shares);
Outstanding - 399,229,917 shares (2019 - 270,084,005 shares)			53.6						37.7
Capital in excess of par value of shares			4,446.3						3,872.1
Retained deficit			(3,052.5)						(2,842.4)
Cost of 29,415,949 common shares in treasury (2019 - 31,802,789 shares)			(354.8)						(390.7)
Accumulated other comprehensive loss			(282.0)						(318.8)
Total Cliffs shareholders' equity			810.6						357.9
Noncontrolling interest			313.1						—
TOTAL EQUITY			1,123.7						357.9
TOTAL LIABILITIES AND EQUITY			$	8,480.9					$	3,503.8

			(In Millions, Except Per Share Amounts)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Revenues			$	1,646.0					$	555.6					$	3,063.2					$	1,455.8
Realization of deferred revenue			—						—						34.6						—
Operating costs:
Cost of goods sold			(1,525.4)						(400.7)						(3,088.9)						(1,007.0)
Selling, general and administrative expenses			(59.6)						(25.5)						(149.2)						(82.2)
Acquisition-related costs			(7.5)						—						(68.4)						—
Miscellaneous – net			(15.5)						(7.8)						(40.5)						(19.0)
Total operating costs			(1,608.0)						(434.0)						(3,347.0)						(1,108.2)
Operating income (loss)			38.0						121.6						(249.2)						347.6
Other income (expense):
Interest expense, net			(68.2)						(25.3)						(167.9)						(76.5)
Gain (loss) on extinguishment of debt			—						—						132.6						(18.2)
Other non-operating income			10.0						0.3						31.2						1.3
Total other expense			(58.2)						(25.0)						(4.1)						(93.4)
Income (loss) from continuing operations before income taxes			(20.2)						96.6						(253.3)						254.2
Income tax benefit (expense)			22.4						(4.8)						98.5						(23.1)
Income (loss) from continuing operations			2.2						91.8						(154.8)						231.1
Loss from discontinued operations, net of tax			(0.3)						(0.9)						—						(1.5)
Net income (loss)			1.9						90.9						(154.8)						229.6
Income attributable to noncontrolling interest			(11.9)						—						(31.2)						—
Net income (loss) attributable to Cliffs shareholders			$	(10.0)					$	90.9					$	(186.0)					$	229.6
Earnings (loss) per common share attributable to Cliffs shareholders - basic
Continuing operations			$	(0.02)					$	0.34					$	(0.51)					$	0.83
Discontinued operations			—						—						—						(0.01)
			$	(0.02)					$	0.34					$	(0.51)					$	0.82
Earnings (loss) per common share attributable to Cliffs shareholders - diluted
Continuing operations			$	(0.02)					$	0.33					$	(0.51)					$	0.80
Discontinued operations			—						—						—						—
			$	(0.02)					$	0.33					$	(0.51)					$	0.80
Average number of shares (in thousands)
Basic			399,399						269,960						365,245						278,418
Diluted			399,399						276,578						365,245						287,755

			(In Millions)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Net income (loss)			$	1.9					$	90.9					$	(154.8)					$	229.6
Other comprehensive income:
Changes in pension and OPEB, net of tax			6.6						5.8						18.2						17.3
Changes in foreign currency translation			1.6						—						1.4						—
Changes in derivative financial instruments, net of tax			15.7						0.4						17.2						1.0
Total other comprehensive income			23.9						6.2						36.8						18.3
Comprehensive income (loss)			25.8						97.1						(118.0)						247.9
Comprehensive income attributable to noncontrolling interests			(11.9)						—						(31.2)						—
Comprehensive income (loss) attributable to Cliffs shareholders			$	13.9					$	97.1					$	(149.2)					$	247.9

			(In Millions)
			Nine Months Ended September 30,
			2020						2019
OPERATING ACTIVITIES
Net income (loss)			$	(154.8)					$	229.6
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation, depletion and amortization			183.9						63.1
Amortization of inventory step-up			74.0						—
Deferred income taxes			(89.9)						22.7
Loss (gain) on extinguishment of debt			(132.6)						18.2
Loss (gain) on derivatives			(19.1)						48.4
Other			(13.0)						49.4
Changes in operating assets and liabilities, net of business combination:
Receivables and other assets			259.8						174.1
Inventories			(4.2)						(147.0)
Payables, accrued expenses and other liabilities			(157.3)						(70.4)
Net cash provided (used) by operating activities			(53.2)						388.1
INVESTING ACTIVITIES
Purchase of property, plant and equipment			(378.9)						(460.7)
Acquisition of AK Steel, net of cash acquired			(869.3)						—
Other investing activities			8.0						11.2
Net cash used by investing activities			(1,240.2)						(449.5)
FINANCING ACTIVITIES
Repurchase of common shares			—						(252.9)
Proceeds from issuance of debt			1,762.9						720.9
Debt issuance costs			(57.5)						(6.8)
Repurchase of debt			(999.5)						(729.3)
Borrowings under credit facilities			800.0						—
Repayments under credit facilities			(400.0)						—
Dividends paid			(40.8)						(45.1)
SunCoke Middletown distributions to noncontrolling interest owners			(47.6)						—
Other financing activities			(23.3)						(53.7)
Net cash provided (used) by financing activities			994.2						(366.9)
Decrease in cash and cash equivalents, including cash classified within other current assets related to discontinued operations			(299.2)						(428.3)
Less: decrease in cash and cash equivalents from discontinued operations, classified within other current assets			(2.6)						(4.4)
Net decrease in cash and cash equivalents			(296.6)						(423.9)
Cash and cash equivalents at beginning of period			352.6						823.2
Cash and cash equivalents at end of period			$	56.0					$	399.3

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

			(In Millions)
			Number of Common Shares Outstanding						Par Value of Common Shares Issued						Capital in Excess of Par Value of Shares						Retained Deficit						Common Shares in Treasury						AOCI						Non-controlling Interests						Total
December 31, 2019			270.1						$	37.7					$	3,872.1					$	(2,842.4)					$	(390.7)					$	(318.8)					$	—					$	357.9
Comprehensive income (loss)			—						—						—						(52.1)						—						1.7						3.5						(46.9)
Stock and other incentive plans			1.7						—						(23.6)						—						25.7						—						—						2.1
Acquisition of AK Steel			126.8						15.9						601.7						—						—						—						329.8						947.4
Common share dividends ($0.06 per share)			—						—						—						(24.0)						—						—						—						(24.0)
Net distributions to noncontrolling interests			—						—						—						—						—						—						(5.5)						(5.5)
March 31, 2020			398.6						$	53.6					$	4,450.2					$	(2,918.5)					$	(365.0)					$	(317.1)					$	327.8					$	1,231.0
Comprehensive income (loss)			—						—						—						(123.9)						—						11.2						15.8						(96.9)
Stock and other incentive plans			0.6						—						(6.6)						—						9.1						—						—						2.5
Common share dividends			—						—						—						(0.1)						—						—						—						(0.1)
Net distributions to noncontrolling interests			—						—						—						—						—						—						(18.3)						(18.3)
June 30, 2020			399.2						$	53.6					$	4,443.6					$	(3,042.5)					$	(355.9)					$	(305.9)					$	325.3					$	1,118.2
Comprehensive income (loss)			—						—						—						(10.0)						—						23.9						11.9						25.8
Stock and other incentive plans			—						—						2.7						—						1.1						—						—						3.8
Net distributions to noncontrolling interests			—						—						—						—						—						—						(24.1)						(24.1)
September 30, 2020			399.2						$	53.6					$	4,446.3					$	(3,052.5)					$	(354.8)					$	(282.0)					$	313.1					$	1,123.7

			(In Millions)
			Number of Common Shares Outstanding						Par Value of Common Shares Issued						Capital in Excess of Par Value of Shares						Retained Deficit						Common Shares in Treasury						AOCI												Total
December 31, 2018			292.6						$	37.7					$	3,916.7					$	(3,060.2)					$	(186.1)					$	(283.9)											$	424.2
Comprehensive income (loss)			—						—						—						(22.1)						—						8.4												(13.7)
Stock and other incentive plans			1.7						—						(56.5)						—						46.5						—												(10.0)
Common share repurchases			(11.5)						—						—						—						(124.3)						—												(124.3)
Common share dividends ($0.05 per share)			—						—						—						(14.5)						—						—												(14.5)
March 31, 2019			282.8						$	37.7					$	3,860.2					$	(3,096.8)					$	(263.9)					$	(275.5)											$	261.7
Comprehensive income			—						—						—						160.8						—						3.7												164.5
Stock and other incentive plans			0.1						—						3.4						—						1.2						—												4.6
Common share repurchases			(12.9)						—						—						—						(128.6)						—												(128.6)
Common share dividends ($0.06 per share)			—						—						—						(16.6)						—						—												(16.6)
June 30, 2019			270.0						$	37.7					$	3,863.6					$	(2,952.6)					$	(391.3)					$	(271.8)											$	285.6
Comprehensive income			—						—						—						90.9						—						6.2												97.1
Stock and other incentive plans			0.1						—						4.1						—						0.4						—												4.5
Common share dividends ($0.10 per share)			—						—						—						(27.3)						—						—												(27.3)
September 30, 2019			270.1						$	37.7					$	3,867.7					$	(2,889.0)					$	(390.9)					$	(265.6)											$	359.9

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

    The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with SEC rules and regulations and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020 or any other future period. Due to the acquisition of AK Steel, certain balances have become material and are no longer being condensed in our Statements of Unaudited Condensed Consolidated Financial Position, such as balances for Right-of-use asset, operating lease and Operating lease liability, non-current. As a result, certain prior period amounts have been reclassified to conform with the current year presentation. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020.

On September 28, 2020, we entered into a Transaction Agreement with ArcelorMittal S.A., pursuant to which Cliffs will acquire substantially all of the operations of ArcelorMittal USA for an aggregate purchase price of approximately $1.4 billion, consisting of (i) $505 million in cash, (ii) 78,186,671 of our common shares, par value $0.125 per share, and (iii) 583,273 shares of a new series of our Serial Preferred Stock, Class B, without par value, to be designated as the “Series B Participating Redeemable Preferred Stock” at closing. The cash portion of the purchase price is subject to customary working capital and purchase price adjustments.

We expect to complete the Transaction in the fourth quarter of 2020. Completion of the Transaction is subject to various customary closing conditions, including the receipt of required regulatory approvals in identified jurisdictions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act, and it is possible that factors outside of our control could result in the Transaction being completed at a later time or not at all. The Transaction Agreement also contains certain termination rights that may be exercised by either us or ArcelorMittal S.A. We plan to complete the Transaction as soon as reasonably practicable following the satisfaction or waiver of all applicable conditions.

Acquisition of AK Steel

Investee

Segment Reported Within

Equity Ownership Percentage

Combined Metals of Chicago, LLC

Steel and Manufacturing

40.0%

Hibbing Taconite Company

Mining and Pelletizing

23.0%

Spartan Steel Coating, LLC

Steel and Manufacturing

48.0%

    On March 2, 2020, the SEC issued a final rule that amended the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rule 3-10, which required separate financial statements for subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met. The final rule replaces the previous requirement under Rule 3-10 to provide condensed consolidating financial information in the registrant’s financial statements with a requirement to provide alternative financial disclosures (which include summarized financial information of the parent and any issuers and guarantors, as well as other qualitative disclosures) in either the registrant’s Management's Discussion and Analysis of Financial Condition and Results of Operations or its financial statements, in addition to other simplifications. The final rule is effective for filings on or after January 4, 2021, and early adoption is permitted. We elected to early adopt this disclosure update for the period ended March 31, 2020. As a result, we have excluded the footnote disclosures required under the previous Rule 3-10, and applied the final rule by including the summarized financial information and qualitative disclosures in Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Exhibit 22.1, hereto.

Issued and Not Effective

In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update requires certain convertible instruments to be accounted for as a single liability measured at its amortized cost. Additionally, the update requires the use of the "if-converted" method, removing the treasury stock method, when calculating diluted shares. The two methods of adoption are the full and modified retrospective approaches. We expect to utilize the modified retrospective approach. Using this approach, the guidance shall be applied to transactions outstanding as of the beginning of the fiscal year in which the amendment is adopted. The final rule is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are continuing to evaluate the impact of this update to our financials and would expect to adopt at the required adoption date of January 1, 2022.

    The following table represents our consolidated Revenues (excluding intercompany revenues) by market:

			(In Millions)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Steel and Manufacturing:
Automotive			$	920.0					$	—					$	1,404.0					$	—
Infrastructure and manufacturing			198.8						—						446.2						—
Distributors and converters			142.9						—						344.1						—
Total Steel and Manufacturing			1,261.7						—						2,194.3						—
Mining and Pelletizing:
Steel producers1			384.3						555.6						903.5						1,455.8
Total revenues			$	1,646.0					$	555.6					$	3,097.8					$	1,455.8
1 Includes Realization of deferred revenue of $34.6 million for the nine months ended September 30, 2020.

    The following table represents our consolidated Revenues (excluding intercompany revenues) by product line:

			(In Millions)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Steel and Manufacturing:
Carbon steel			$	821.2					$	—					$	1,391.6					$	—
Stainless and electrical steel			303.2						—						585.1						—
Tubular products, components and other			137.3						—						217.6						—
Total Steel and Manufacturing			1,261.7						—						2,194.3						—
Mining and Pelletizing:
Iron ore1			357.1						515.0						838.1						1,357.8
Freight			27.2						40.6						65.4						98.0
Total Mining and Pelletizing			384.3						555.6						903.5						1,455.8
Total revenues			$	1,646.0					$	555.6					$	3,097.8					$	1,455.8
1 Includes Realization of deferred revenue of $34.6 million for the nine months ended September 30, 2020.

    We sell to customers located primarily in the United States and to foreign customers, primarily in Canada, Mexico and Western Europe. Net revenues to customers located outside the United States were $265.0 million and $487.7 million for the three and nine months ended September 30, 2020, respectively, and $138.9 million and $318.3 million for the three and nine months ended September 30, 2019, respectively.

    The following is a roll forward of our allowance for credit losses associated with Accounts receivable, net:

			(In Millions)
			2020						2019
Allowance for credit losses as of January 1			$	—					$	—
Increase in allowance			5.2						—
Allowance for credit losses as of September 30			$	5.2					$	—

    The following table presents the detail of our Inventories in the Statements of Unaudited Condensed Consolidated Financial Position:

			(In Millions)
			September 30, 2020						December 31, 2019
Product inventories
Finished and semi-finished goods			$	940.5					$	114.1
Work-in-process			78.2						68.7
Raw materials			382.3						9.4
Total product inventories			1,401.0						192.2
Manufacturing supplies and critical spares			394.1						125.2
Inventories			$	1,795.1					$	317.4

			(In Millions)
			Deferred Revenue (Current)																		Deferred Revenue (Long-Term)
			2020						2019						2020						2019
Opening balance as of January 1			$	22.1					$	21.0					$	25.7					$	38.5
Net decrease			(19.8)						(2.7)						(25.7)						(8.5)
Closing balance as of September 30			$	2.3					$	18.3					$	—					$	30.0

    Prior to the Merger, our iron ore pellet sales agreement with Severstal, subsequently assumed by AK Steel, required supplemental payments to be paid by the customer during the period 2009 through 2013. Installment amounts received under this arrangement in excess of sales were classified as deferred revenue in the Statements of Consolidated Financial Position upon receipt of payment and the revenue was recognized over the term of the supply agreement, which had extended until 2022, in equal annual installments. As a result of the termination of that iron ore pellet sales agreement, we realized $34.6 million of deferred revenue, which was recognized within Realization of deferred revenue in the Statements of Unaudited Condensed Consolidated Operations, during the nine months ended September 30, 2020.

    We have certain other sales agreements that require customers to pay in advance. Payments received pursuant to these agreements prior to revenue being recognized are recorded as deferred revenue in Other current liabilities.

    The following table presents the detail of our Accrued liabilities in the Statements of Unaudited Condensed Consolidated Financial Position:

			(In Millions)
			September 30, 2020						December 31, 2019
Accrued employment costs			$	146.6					$	61.7
Accrued interest			81.8						29.0
Accrued dividends			1.0						17.8
Other			50.0						17.8
Accrued liabilities			$	279.4					$	126.3

			(In Millions)
			Nine Months Ended September 30,
			2020						2019
Capital additions			$	333.0					$	505.6
Less:
Non-cash accruals			(88.4)						26.1
Right-of-use assets - finance leases			42.5						29.3
Grants			—						(10.5)
Cash paid for capital expenditures including deposits			$	378.9					$	460.7

			(In Millions)
			Nine Months Ended September 30,
			2020						2019
Taxes paid on income			$	3.2					$	0.1
Income tax refunds			(119.3)						(117.9)
Interest paid on debt obligations net of capitalized interest1			106.0						71.9
1 Capitalized interest was $38.0 million and $16.9 million for the nine months ended September 30, 2020 and 2019, respectively.

    Non-Cash Investing and Financing Activities

			(In Millions)
			Nine Months Ended September 30,
			2020						2019
Fair value of common shares issued for consideration for business combination			$	617.6					$	—
Fair value of equity awards assumed from AK Steel acquisition			3.9						—

    Total net revenues for AK Steel for the most recent pre-acquisition year ended December 31, 2019 were $6,359.4 million. Following the acquisition, the operating results of AK Steel are included in our unaudited condensed consolidated financial statements and are reported as part of our Steel and Manufacturing segment. For the three months ended September 30, 2020, AK Steel generated Revenues of $1,261.7 million and a loss of $30.4 million included within Net income (loss) attributable to Cliffs shareholders, which included $14.6 million and $2.4 million related to amortization of the fair value inventory step-up and severance costs, respectively. For the period subsequent to the acquisition (March 13, 2020 through September 30, 2020), AK Steel generated Revenues of $2,194.3 million and a loss of $292.0 million included within Net income (loss) attributable to Cliffs shareholders, which included $74.0 million and $35.1 million related to amortization of the fair value inventory step-up and severance costs, respectively.

    Additionally, we incurred acquisition-related costs in connection with the acquisition of AK Steel, excluding severance costs, of $0.6 million and $25.6 million for the three and nine months ended September 30, 2020, respectively, which were recorded in Acquisition-related costs on the Statements of Unaudited Condensed Consolidated Operations.

			(In Millions)
Fair value of Cliffs common shares issued for AK Steel outstanding common stock			$	617.6
Fair value of replacement equity awards			3.9
Fair value of AK Steel debt			913.6
Total purchase consideration			$	1,535.1

			(In Millions, Except Per Share Amounts)
Number of shares of AK Steel common stock issued and outstanding			316.9
Exchange ratio			0.400
Number of Cliffs common shares issued to AK Steel stockholders			126.8
Price per share of Cliffs common shares			$	4.87
Fair value of Cliffs common shares issued for AK Steel outstanding common stock			$	617.6

			(In Millions)
Credit Facility			$	590.0
7.50% Senior Secured Notes due July 2023			323.6
Fair value of debt included in consideration			$	913.6

			(In Millions)
			Initial Allocation of Consideration						Measurement Period Adjustments						Updated Preliminary Allocation
Cash and cash equivalents			$	37.7					$	2.0					$	39.7
Accounts receivable			666.0						(3.1)						662.9
Inventories			1,562.8						(39.8)						1,523.0
Other current assets			67.5						(15.4)						52.1
Property, plant and equipment			2,184.4						(20.1)						2,164.3
Intangible assets			163.0						(15.0)						148.0
Right of use asset, operating leases			225.9						(16.3)						209.6
Other non-current assets			85.9						26.2						112.1
Accounts payable			(636.3)						(6.1)						(642.4)
Accrued liabilities			(222.5)						0.1						(222.4)
Other current liabilities			(181.8)						6.6						(175.2)
Long-term debt			(1,179.4)						—						(1,179.4)
Deferred income taxes			(19.7)						(0.2)						(19.9)
Operating lease liability, non-current			(188.1)						12.7						(175.4)
Intangible liabilities			(140.0)						69.5						(70.5)
Pension and OPEB liabilities			(873.0)						2.1						(870.9)
Asset retirement obligations			(13.9)						(2.0)						(15.9)
Other non-current liabilities			(144.2)						(2.3)						(146.5)
Net identifiable assets acquired			1,394.3						(1.1)						1,393.2
Goodwill			141.2						0.7						141.9
Total net assets acquired			$	1,535.5					$	(0.4)					$	1,535.1

    During the second and third quarter of 2020, we made certain measurement period adjustments to the acquired assets and liabilities assumed due to clarification of information utilized to determine fair value during the measurement period. The Inventories measurement period adjustments of $39.8 million resulted in a favorable impact of $0.2 million and $8.0 million, respectively, to Cost of goods sold for the three and nine months ended September 30, 2020.

			(In Millions)						Weighted Average Life (In Years)
Intangible assets:
Customer relationships			$	77.0					18
Developed technology			60.0						17
Trade names and trademarks			11.0						10
Total identifiable intangible assets			$	148.0					17
Intangible liabilities:
Above-market supply contracts			$	(70.5)					12

			(In Millions)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Revenues			$	1,646.0					$	1,937.6					$	4,265.1					$	5,958.7
Net income (loss) attributable to Cliffs shareholders			(6.0)						84.2						(123.9)						213.3

1.The elimination of intercompany revenues between Cliffs and AK Steel of $135.6 million and $394.8 million for the three and nine months ended September 30, 2020, respectively, and $153.5 million and $410.8 million for the three and nine months ended September 30, 2019, respectively.

2.The 2020 pro forma net loss was adjusted to exclude $14.6 million and $74.0 million of non-recurring inventory acquisition accounting adjustments incurred during the three and nine months ended September 30, 2020, respectively. The 2019 pro forma net income was adjusted to include $74.0 million of non-recurring inventory acquisition accounting adjustments for the nine months ended September 30, 2019.

3.The elimination of nonrecurring transaction costs incurred by Cliffs and AK Steel in connection with the Merger of $0.7 million and $29.1 million for the three and nine months ended September 30, 2020, respectively.

4.Total other pro forma adjustments included expense of $10.0 million for the three and nine months ended September 30, 2020, primarily due to increased interest expense, offset by reduced amortization expense, depreciation expense and pension and OPEB expense. Total other pro forma adjustments for the three and nine months ended September 30, 2019 included expense of $1.1 million and $7.0 million, respectively, primarily due to reduced interest and amortization expense, offset by additional depreciation expense and pension and OPEB expense.

5.The income tax impact of pro forma transaction adjustments that affect Net income (loss) attributable to Cliffs shareholders at a statutory rate of 24.3% resulted in an income tax benefit of $5.6 million and $2.1 million for the three and nine months ended September 30, 2020, respectively, and an income tax benefit of $2.1 million and $4.5 million for the three and nine months ended September 30, 2019, respectively.

			(In Millions, Except Sales Tons)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Sales volume (in thousands):
Steel and Manufacturing (net tons)			1,117						—						1,935						—
Mining and Pelletizing sales (long tons)			4,907						5,750						11,800						13,527
Less: Intercompany sales (long tons)			(1,204)						(346)						(3,028)						(384)
Mining and Pelletizing consolidated sales (long tons)			3,703						5,404						8,772						13,143
Revenues:
Steel and Manufacturing net sales to external customers			$	1,261.7					$	—					$	2,194.3					$	—
Mining and Pelletizing net sales1			520.3						590.6						1,238.7						1,494.8
Less: Intercompany sales			(136.0)						(35.0)						(335.2)						(39.0)
Mining and Pelletizing net sales to external customers			384.3						555.6						903.5						1,455.8
Total revenues			$	1,646.0					$	555.6					$	3,097.8					$	1,455.8
Adjusted EBITDA:
Steel and Manufacturing			$	33.3					$	(2.1)					$	(81.8)					$	(4.0)
Mining and Pelletizing			145.3						182.7						309.5						510.7
Corporate and eliminations			(52.3)						(36.5)						(160.7)						(93.0)
Total Adjusted EBITDA			$	126.3					$	144.1					$	67.0					$	413.7
1 Includes Realization of deferred revenue of $34.6 million for the nine months ended September 30, 2020.

    The following table provides a reconciliation of our consolidated Net income (loss) to total Adjusted EBITDA:

			(In Millions)
			Three Months Ended September 30,																		Nine Months Ended September 30,
			2020						2019						2020						2019
Net income (loss)			$	1.9					$	90.9					$	(154.8)					$	229.6
Less:
Interest expense, net			(68.2)						(25.4)						(167.9)						(76.8)
Income tax benefit (expense)			22.4						(4.8)						98.5						(23.1)
Depreciation, depletion and amortization			(72.4)						(22.2)						(183.9)						(63.1)
Total EBITDA			$	120.1					$	143.3					$	98.5					$	392.6
Less:
EBITDA of noncontrolling interests1			$	16.2					$	—					$	41.3					$	—
Gain (loss) on extinguishment of debt			—						—						132.6						(18.2)
Severance costs			(2.4)						—						(38.3)						(1.7)
Acquisition-related costs excluding severance costs			(5.1)						—						(30.1)						—
Amortization of inventory step-up			(14.6)						—						(74.0)						—
Impact of discontinued operations			(0.3)						(0.8)						—						(1.2)
Total Adjusted EBITDA			$	126.3					$	144.1					$	67.0					$	413.7
1 EBITDA of noncontrolling interests includes $11.9 million and $31.2 million for income and $4.3 million and $10.1 million for depreciation, depletion and amortization for the three and nine months ended September 30, 2020, respectively.

    The following summarizes our assets by segment:

			(In Millions)
			September 30, 2020						December 31, 2019
Assets:
Steel and Manufacturing			$	6,345.7					$	913.6
Mining and Pelletizing			1,643.3						1,643.1