What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-25 compared with 2024-02-08 · 217 added, 207 removed, 426 unchanged (50% of the section changed)

6 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 8, 2024.

Throughout 2023, we continued to position the Company for long-term success as we had record steel shipments, with particular strength in automotive;

significantly reduced our operational costs with greater emphasis on throughput and productivity;

dramatically improved our balance sheet;

reached our stated net debt target of $3.0 billion;

Throughout 2024, we continued to position the Company for long-term success and further established ourselves as a leading North America based steel producer.

We completed the Stelco Acquisition, which diversifies our end-markets, expands our geographical presence in Canada and incorporates Stelco's industry low-cost structure into our overall asset portfolio.

We also announced new strategic initiatives that are expected to provide meaningful earnings improvement in years to come;

reduced our operational costs;

returned substantial capital to shareholders through share repurchases;

and continued to focus on our goal of reducing GHG emissions, all with an eye toward the future and in line with our consistent strategic objectives.

As of December 31, 2023, we have a record level of liquidity of $4.5 billion.

Our strong balance sheet and operational achievements further strengthens our position as an American leader in the steel industry as we continue to create value for all stakeholders of the Company.

and announced new GHG emissions reduction targets after achieving our prior commitments, all with an eye toward the future and in line with our consistent strategic objectives.

The Stelco Acquisition, our operational achievements and strategic initiatives further strengthen our position as a North American leader in the steel industry and are expected to create value for all Company stakeholders.

2024 HIGHLIGHTS

• Net income of $450 million

• Adjusted EBITDA of $1.9 billion

• Revenues of $22 billion and third consecutive year of revenues over $20 billion

• Significantly reduced unit costs year-over-year

• Record steel shipments of 16.4 million net tons

• Record automotive shipments

• Reduced total outstanding long-term debt by $1.1 billion to $3.2 billion

• Net debt of $2.9 billion below stated target of $3.0 billion and lowest net debt level since becoming a steel company

• Reached record liquidity of $4.5 billion

42 | CLF 2023 FORM 10-K

• Returned $152 million in capital to shareholders through share repurchase program

• Net pension and OPEB liabilities of $586 million are lowest since becoming a steel company

• Successfully implemented Cliffs H surcharge for steel melted with HBI

• Continued focus on our goal of reducing GHG emissions

• Secured award of Nashwauk state mineral leases, which is expected to provide additional long-term iron ore reserves

We also continued our best practices from both a safety and environmental standpoint.

During 2023, our safety Total Reportable Incident Rate (including contractors) was 1.22 per 200,000 hours worked.

Throughout 2023, we continued to focus on our goal of reducing GHG emissions with our optimal utilization of HBI and scrap throughout our facilities, as well as efficient power generation through recycling of off-gases.

We have also continued our partnership with the DOE as part of the Better Climate Challenge initiative, which was established in December 2021.

We continue to pursue opportunities such as carbon capture and the use of hydrogen within our facilities.

• Record safety year since becoming a steel company with lowest Total Reportable Incident Rate of 0.9, which represents a 26% improvement from prior year

• Completed the Stelco Acquisition during the fourth quarter of 2024

• Further reduced unit costs year-over-year

• Returned $733 million in capital to shareholders through share repurchases

• Announced new GHG emissions reduction goals

• Selected by the DOE for award negotiations to receive up to $575 million for two decarbonization initiatives

• Announced $600 million of future annual EBITDA improvement from strategic projects expected to be completed by the end of 2029

• Announced project to develop new state-of-the-art electrical transformer production plant in Weirton, West Virginia

• Completed successful hydrogen injection trial at Indiana Harbor #7 blast furnace

We continued our best practices from both a safety and environmental standpoint.

During 2024, our safety Total Reportable Incident Rate (including contractors) was 0.9 per 200,000 hours worked, the lowest since becoming a steel company in 2020.

Throughout 2024, we continued to focus on our goal of reducing GHG emissions with our optimal utilization of HBI and scrap throughout our facilities, as well as efficient power generation through recycling off-gases.

In May 2024, we announced our commitment to new GHG emissions reductions targets after we successfully achieved our prior commitments set in 2021.

We have also continued our partnerships with the DOE as part of the Better Climate Challenge initiative and the DOE Better Plants programs.

We continue to evaluate opportunities such as carbon capture and the use of hydrogen within our facilities.

With the U.S.

government awarding funding for the development of regional hydrogen hubs throughout the country, including near our largest facilities, we expect to dramatically increase our use of hydrogen gas as both a reducing agent and energy source as the clean hydrogen production facilities come online.

government potentially awarding funding for the development of regional hydrogen hubs throughout the country, including near our largest facilities, we would be able to dramatically increase our use of hydrogen gas as both a reducing agent and energy source as the clean hydrogen production facilities come online and become commercially and economically viable.

Additionally, we have continued forming partnerships to develop renewable and clean energy sources – such as wind, solar and hydrogen – which will benefit our own environmental footprint while combating the global impacts of climate change.

45 | CLF 2024 FORM 10-K

FINANCIAL SUMMARY

1 unchanged sentence

Total Revenue Net Income Adjusted EBITDA Diluted EPS

See "— Non-GAAP Financial Measures" below for a reconciliation of our Net income to Adjusted EBITDA.

See "— Non-GAAP Financial Measures" below for a reconciliation of our Net income (loss) to Adjusted EBITDA.

ECONOMIC OVERVIEW

STEEL MARKET OVERVIEW

Steel market conditions in 2023 were marked by notable volatility, driven by both improved light vehicle production but also inconsistent service center buying behavior.

The price for domestic HRC, the most significant index impacting our revenues and profitability, averaged $906 per net ton for 2023, which was 10% lower than 2022.

Demand for steel from automotive manufacturers improved in 2023 as supply chain issues continued to ease and light vehicle sales increased.

North American light vehicle production of 15.6 million units in 2023 was the highest since 2019.

Demand for steel from service centers was adversely impacted at certain points of the year due to recessionary fears and the anticipation of, and ultimate occurrence of, the UAW strike at certain domestic automotive producers.

During 2023, service center inventories were as low as 1.6 months of inventory on hand, significantly lower than the prior ten-year average of 2.2 months of inventory on hand.

Low inventory levels generated significant demand for steel toward the end of 2023 as the UAW strike concluded and service centers needed to meet the continued healthy demand from their end-use customers.

Additionally, steel imports remained unattractive for the majority of 2023 due to low pricing spreads between the U.S.

and other regions.

Looking forward, we expect domestic steel demand to remain healthy as automotive production continues to improve, service centers restock inventory and incremental steel demand stimulated by government legislation is realized.

The Infrastructure and Jobs Act, the CHIPS Act and Inflation Reduction Act should continue to provide meaningful support for overall domestic steel demand in the coming years.

Our extensive portfolio of products should result in increased steel demand from some of our end markets.

The Infrastructure and Jobs Act was signed into law in November 2021 and includes approximately $550 billion of authorized spending for new investments and programs.

This legislation provides direct spending support for roads, bridges and other infrastructure projects, including upgrades to the domestic power grid and building out a national network of EV chargers.

We expect to continue to benefit from these steel-intensive projects in the coming years as they will consume our hot-rolled, plate, electrical, rail and other steel products.

Steel market conditions in 2024 were driven by weaker than anticipated light vehicle production, lower demand and higher import levels.

The price for domestic HRC, the most significant index impacting our revenues and profitability, averaged $772 per net ton for 2024, which was 15% lower than 2023 and the lowest annual average per net ton since 2020.

Import levels were elevated in 2024, which contributed to downward pressure on HRC pricing.

North American light vehicle production of 15.4 million units in 2024 was down from 15.7 million units in 2023 and significantly lower than the original expectation to exceed 16 million units.

Looking forward, we expect domestic steel demand to grow as interest rates have started to decline, steel imports are currently unattractive, other end-user demand is improving, and incremental steel demand stimulated by recent government legislation and manufacturing on-shoring is realized.

The Infrastructure and Jobs Act, the CHIPS Act and the Inflation Reduction Act should provide meaningful support for overall domestic steel demand for years to come.

Our extensive portfolio of products should result in increased steel demand from most of our end markets.

As passed initially, the Infrastructure and Jobs Act includes approximately $550 billion of authorized spending for new investments and programs.

This legislation provides direct spending support for roads, bridges and other infrastructure projects, including upgrades to the domestic power grid.

The CHIPS Act promotes semiconductor manufacturing in the U.S., which should help support non-residential construction as well as machinery and equipment.

The Inflation Reduction Act provides incentives for the use of domestic steel for investments in clean energy projects, including wind and solar projects, which consume a substantial amount of steel.

Additionally, the on-shoring of manufacturing in the U.S.

should reduce risk of supply chain issues in the future.

The Inflation Reduction Act provides a tax credit for consumers who buy new EVs, which further incentivizes consumers to purchase vehicles in an environment where pent-up

43 | CLF 2023 FORM 10-K

demand is still very strong from a low unemployment rate, recent supply chain issues and lower than historical dealer inventory levels.

The Inflation Reduction Act also provides incentives for the use of domestic steel for investments in clean energy projects, including wind and solar projects, which consume a substantial amount of steel.

We expect to benefit from the spending related to this legislation for years to come.

should prompt more domestic steel demand as well as reduce the risk of supply chain issues in the future.

OTHER KEY DRIVERS

The largest market for our steel products is the automotive industry in North America, which makes light vehicle production a key driver of demand.

During 2023, North American light vehicle production was approximately 15.6 million units, up from 14.3 million units in 2022, and the highest level since 2019.

Light vehicle production in 2024 was well below initial expectations.

North American light vehicle production in 2024 was 15.5 million units, down from 15.7 million units in 2023.

North American light vehicle production in 2025 and beyond is expected to remain above 15 million units annually.

During 2024, light vehicle sales in the U.S.

saw an average seasonally adjusted annualized rate of 15.8 million units sold, representing a 2% increase compared to 2023.

North American light vehicle production in 2024 is estimated to exceed 2023 units, indicating continued strength from the automotive industry.

December 2024 seasonally adjusted annualized rate was 16.8 million units sold, the highest published rate since 2021, indicating healthy consumer demand.

Additionally, the average age of light vehicles on the road in the U.S.

reached an all-time high during 2023, surpassing the previous record set in 2022, which should support demand as older vehicles need to be replaced.

As a leading supplier of automotive-grade steel in the U.S., we expect to benefit from increased vehicle production over the coming years.

is at an all-time high of 12.6 years, surpassing the previous record set in 2023, which should support demand as older vehicles need to be replaced.

As a leading supplier of automotive-grade steel in the U.S., we expect to benefit from healthy vehicle production over the coming years.

Since 2021, the price for busheling scrap, a necessary input for flat-rolled steel production in EAFs in the U.S., has continued to average well above the prior annual ten-year average of approximately $400 per long ton.

5 unchanged sentences

While higher iron ore prices play a role in increased steel prices, we also directly benefit from higher iron ore prices for the portion of iron ore pellets we sell to third parties.

OTHER FACTORS

On September 14, 2023, the UAW announced a simultaneous labor strike against three domestic automotive manufacturers, as each of the individual companies were unable to come to terms on a new labor agreement.

The strike originally impacted one assembly plant at each company and was further expanded to additional facilities, including certain parts-distribution centers for each company.

Steel demand remained strong from the automotive industry as the strike was limited to certain facilities, allowing the automotive manufacturers to continue production at other facilities within their footprint.

On October 30, 2023, the UAW strike concluded after the UAW reached tentative labor deals with each of the three domestic automotive manufacturers.

The conclusion of the strike led to increased demand in the fourth quarter of 2023 from automotive customers as well as service centers who had significantly reduced their inventory levels in anticipation of a broader strike.

In January 2023, we announced that we partnered with the USW and filed antidumping and countervailing duty petitions against eight countries related to unfairly traded tin and chromium coated sheet steel products.

Tin mill products are used primarily for packaging applications, particularly canned food.

We produce tin mill products at our Weirton, West Virginia operating facility and sell approximately 300,000 net tons per year, representing approximately two percent of total Company steel sales volumes.

Department of Commerce determined that imports of tin mill products from Canada, China, Germany and South Korea are being unfairly priced and dumped into the United States and that imports from China are being unfairly subsidized.

On January 5, 2024, the U.S.

Department of Commerce announced its final countervailing and antidumping determination of tin mill products.

Department of Commerce imposed countervailing subsidy rates on China ranging from 331.88% to 649.98%, based on the exporter.

Final antidumping duty rates on tin and chromium-coated sheet steel products were imposed on Canada, China, Germany and South Korea ranging from 2.69% to 122.52%.

However, on February 6, 2024, the U.S.

International Trade Commission terminated the investigation on South Korea and reached negative determinations in the investigations on Canada, China and Germany.

As a result, countervailing duties and antidumping duties will not be imposed on imports of tin and chromium-coated steel sheet products from these four countries.

During 2023, we significantly reduced costs compared to the prior year as we had higher production volume, normalized repair and maintenance spending, and inflationary pressures on input and energy costs eased.

We expect to benefit further from reduced costs in 2024 as we have worked through higher cost inventory, production volumes should remain similar, and reductions in coal and alloy costs should mitigate any cost increases.

46 | CLF 2024 FORM 10-K

OTHER FACTORS

On February 10, 2025, President Donald Trump signed an executive order to implement 25% tariffs on all steel imports without exceptions or exemptions, beginning March 2025.

We expect these steel tariffs will help level the playing field against countries that have long taken advantage of the domestic steel market.

A level playing field in steel, along with President Trump's pro-manufacturing and America-first agenda, should support a healthy domestic steel environment for years to come.

On April 4, 2024, the DOE issued its final transformer efficiency standards rule that will provide for the continued utilization of GOES in virtually all of our distribution transformer end markets.

With the revised rule, the DOE acknowledged the fundamental importance of GOES and the essential role played by our steel plants in Butler, Pennsylvania and Zanesville, Ohio in effectively sustaining the functionality of the U.S.

electric grid.

The originally proposed distribution transformer rule would have required the use of amorphous metal in nearly all transformer production in the U.S., putting demand for our GOES product at serious risk.

The final rule provides clarity going forward on production requirements, allowing for increased investments in the transformer market, such as our announced project at Weirton, which should ultimately lead to increased GOES demand.

During 2024, we continued our cost cutting efforts, which began in 2023, further reducing our year-over-year cost per ton as we worked through higher cost inventory and lower natural gas, coal and alloy costs mitigated any inflationary cost increases.

STEELMAKING RESULTS

COMPARISON OF 2024 TO 2023

The following is a summary of the Steelmaking segment operating results for the years ended December 31, 2023 and 2022 (dollars in millions, except for average selling price and shipments in thousands of net tons):

The following is a summary of the Steelmaking segment operating results, net of intersegment eliminations, for the years ended December 31, 2024 and 2023 (dollars in millions, except for average selling price and shipments in thousands of net tons):

Total Revenue Gross Margin Adjusted EBITDA Steel Shipments (nt)

5 unchanged sentences

$19,237 $16,865 6% —% 9% 4% $1,171 $1,081

47 | CLF 2024 FORM 10-K

The following tables represent our steel shipments by product and total revenues by market:

8 unchanged sentences

Slab and other steel products 1,680 1,772 (5) %

Total steel shipments by product 16,432 14,751 11 %

Total steel shipments 15,596 16,432 (5) %

Year Ended December 31,

5 unchanged sentences

Steel producers 2,469 2,949 (16) %

Total Steelmaking revenues by market $ 21,331 $ 22,383 (5) %

Revenues decreased by 5% during the year ended December 31, 2023, as compared to the prior year, primarily due to:

• A decrease in revenues from the distributors and converters market of $1,058 million, or 17%, predominantly due to the average HRC price declining, which was partially offset by increased hot-rolled steel shipments;

• A decrease in revenues from the steel producers market of $516 million, or 15%, which was primarily due to the decrease in pricing indices for slabs and busheling scrap.

• These decreases were partially offset by an increase in revenues from the direct automotive market of $779 million, or 12%, predominantly due to increases in selling prices as a result of favorable renewals of annual fixed price contracts and an increase in shipments.

45 | CLF 2023 FORM 10-K

Gross margin decreased by $1,117 million, or 45%, during the year ended December 31, 2023, as compared to the prior year, primarily due to:

• A decrease in selling prices (approximately $2.4 billion impact) predominantly due to lower spot prices, which was partially offset by favorable renewals of annual sales contracts.

• This decrease was partially offset by a decrease in costs of production (approximately $700 million impact) driven by lower raw materials and utility costs, including natural gas, coal, coke, alloys and scrap, coupled with decreased maintenance costs;

• An increase in sales volumes (approximately $500 million impact).

Total Steelmaking revenues $ 18,529 $ 21,331 (13) %

Revenues from our Steelmaking segment decreased by 13% during the year ended December 31, 2024, as compared to the prior year, primarily due to:

• A decrease of $1.9 billion, or 25%, in revenues from the direct automotive market, predominantly due to a decrease in demand;

• A decrease of $404 million, or 7%, in revenues from the infrastructure and manufacturing market, predominantly due to a decrease in steel index pricing;

• A decrease of $480 million, or 16%, in revenues from the steel producers market, predominantly due to the decrease in pricing indices for slabs and busheling scrap.

Gross margin from our Steelmaking segment decreased by $1.3 billion, during the year ended December 31, 2024, as compared to the prior year, primarily due to:

• A decrease in average selling price (approximately $775 million impact), predominantly due to lower spot prices and lower direct automotive mix;

• A decrease in sales volume (approximately $500 million impact).

ADJUSTED EBITDA

Adjusted EBITDA from our Steelmaking segment for the year ended December 31, 2023, decreased by $1,216 million, as compared to 2022, primarily due to the decreased gross margin from our operations.

Adjusted EBITDA from our Steelmaking segment for the year ended December 31, 2024, decreased by $1.1 billion, as compared to 2023, due to the decreased gross margin from our operations.

Additionally, our Steelmaking Adjusted EBITDA included $457 million and $549 million of Selling, general and administrative expenses for the years ended December 31, 2024 and 2023, respectively.

2 unchanged sentences

REVENUES AND GROSS MARGIN

During the year ended December 31, 2023, our consolidated Revenues decreased by $993 million, compared to 2022.

The decrease was primarily due to the decrease in the average steel product selling price of $189 per net ton, partially offset by the increase of 1.7 million net tons of steel shipments from our Steelmaking segment.

During the year ended December 31, 2023, our consolidated gross margin decreased by $1,127 million, as compared to 2022.

During the year ended December 31, 2024, our consolidated Revenues decreased by $2.8 billion, as compared to 2023.

The decrease was primarily due to the decrease in the average steel product selling price of $90 per net ton and a decrease of 0.8 million net tons of steel shipments from our Steelmaking segment.

During the year ended December 31, 2024, our consolidated gross margin decreased by $1.3 billion, as compared to 2023.

See "— Steelmaking Results" above for further detail on our operating results.

48 | CLF 2024 FORM 10-K

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased by $112 million during the year ended December 31, 2023, as compared to 2022.

The increase primarily relates to employment-related costs, including higher incentive compensation, and external service costs.

Selling, general and administrative expenses decreased by $91 million during the year ended December 31, 2024, as compared to 2023.

The decrease primarily relates to employment-related costs due to lower incentive compensation.

RESTRUCTURING AND OTHER CHARGES & ASSET IMPAIRMENT

On February 15, 2024, we announced the indefinite idle of our Weirton tinplate production plant.

This resulted in restructuring and other charges primarily related to severance, other employee-related benefits and asset retirement obligation charges of $129 million for the year ended December 31, 2024.

Additionally, this resulted in an asset impairment of $79 million for year ended December 31, 2024.

ACQUISITION-RELATED COSTS

The increase of Acquisition-related costs primarily relates to third-party expenses associated with the Stelco Acquisition in 2024.

Refer to NOTE 3 - ACQUISITIONS for further information.

GOODWILL IMPAIRMENT

Our 2023 annual goodwill impairment analysis resulted in an impairment charge of $125 million for goodwill related to our Tooling and Stamping reporting unit.

Refer to "— Market Risks" below for further detail.

In 2023, our annual goodwill impairment analysis resulted in an impairment charge of $125 million for goodwill related to our Tooling and Stamping reporting unit.

MISCELLANEOUS – NET

Miscellaneous expense decreased by $110 million for the year ended December 31, 2023, as compared to 2022.

The decrease in miscellaneous expense for the year ended December 31, 2023, was primarily related to the $63 million gain on sale of business, along with lower idle expenses as compared to the prior year.

Additionally, in 2022, we had a $29 million asset impairment, which was not repeated in 2023.

These decreases were partially offset by the higher expenses in 2023 related to our asset retirement obligations for our indefinitely idled and closed operations as a result of our three-year detailed assessment.

Miscellaneous expense increased by $88 million for the year ended December 31, 2024, as compared to 2023.

The increase in miscellaneous expense for the year ended December 31, 2024 was primarily related to a $63 million gain on sale of business in 2023, which was not repeated in 2024.

Additionally, to a lesser extent, this increase was also due to higher currency exchange expense, primarily related to routine remeasurement of an intercompany note with our Stelco subsidiary during 2024.

INTEREST EXPENSE, NET

During the year ended December 31, 2024, our consolidated Interest expense, net increased by $81 million compared to 2023.

The increase primarily relates to increased interest incurred on outstanding borrowings, year over year, as well as fees incurred in 2024 associated with financing arrangements undertaken in connection with the Stelco Acquisition.

LOSS ON EXTINGUISHMENT OF DEBT

The loss on extinguishment of debt of $75 million for the year ended December 31, 2022 primarily resulted from the redemption of all $607 million aggregate principal amount of our outstanding 9.875% 2025 Senior Secured Notes in April 2022 and the redemption of all $294 million aggregate principal amount of our outstanding 1.500% 2025 Convertible Senior Notes in January 2022.

The losses were partially offset by the net gain on extinguishment for the repurchase of $417 million aggregate principal amount of our outstanding industrial revenue bonds and senior notes of various series.

Our effective tax rate is impacted by state income tax expense and permanent items, primarily depletion.

During the year ended December 31, 2024, our consolidated Loss on extinguishment of debt increased by $27 million compared to 2023.

The increase entirely relates to the repurchase of $829 million aggregate principal amount of our then-outstanding 6.750% 2026 Senior Secured Notes.

Refer to NOTE 8 - DEBT AND CREDIT FACILITIES for further information.

NET PERIODIC BENEFIT CREDITS OTHER THAN SERVICE COST COMPONENT

During the year ended December 31, 2024, our consolidated Net periodic benefit credits other than service cost component increased $43 million compared to 2023.

This increase primarily relates to an increase in actuarial gains reclassified from AOCI to net income and a decrease in interest cost year over year.

Refer to NOTE 9 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS for further information.

OTHER NON-OPERATING INCOME (LOSS)

During the year ended December 31, 2024, our consolidated Other non-operating income (loss) decreased by $42 million compared to 2023.

The decrease primarily relates to a loss recorded in 2024 as a result of a fair value adjustment of the MinnTac option, as well as a loss recorded on foreign currency contracts obtained in connection with financing the Stelco Acquisition.

Refer to NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS and NOTE 15 - DERIVATIVE INSTRUMENTS AND HEDGING for further information.

Our effective tax rate is impacted by state income taxes and permanent items, primarily depletion.

It also is affected by discrete items that may occur in any given period but are not consistent from period to period.

2 unchanged sentences

(In millions) 2024 2023

Income tax expense $ (148) $ (423)

Income tax benefit (expense) $ 235 $ (148)

Effective tax rate 25 % 25 %

14 unchanged sentences

Other items, net 20 (2) 11 2

Provision for income tax expense and effective income tax rate including discrete items $ 148 25 % $ 423 23 %

The decrease in income tax expense in 2023, as compared to the prior year, is predominantly related to the decrease in the pre-tax book income year-over-year.

Provision for income tax (benefit) expense and effective income tax rate including discrete items $ (235) 25 % $ 148 25 %

The increase in income tax benefit in 2024, as compared to income tax expense in 2023, is predominantly related to the decrease in the pre-tax book income year-over-year.

See NOTE 11 - INCOME TAXES for further information.

CASH FLOW, LIQUIDITY AND CAPITAL RESOURCES

Our capital allocation decision-making process is focused on preserving healthy liquidity levels while maintaining the strength of our balance sheet and creating financial flexibility to manage through the cyclical demand for our products and volatility in commodity prices.

Our capital allocation decision-making process is focused on preserving healthy liquidity levels, strengthening our balance sheet, and creating financial flexibility to manage through the cyclical demand for our products and volatility in commodity prices.

We are focused on maximizing the cash generation of our operations, reducing debt, returning capital to shareholders and aligning capital investments with our strategic priorities and the requirements of our business plan, including regulatory and permission-to-operate related projects.

10 unchanged sentences

1 See "— Non-GAAP Financial Measures" for a reconciliation of our free cash flow.

The recent market environment has provided us opportunities to reduce our debt and return capital to shareholders with our free cash flow generation.

We also continue to look at the composition of our debt, as we are interested in both extending our average maturity length and increasing our ratio of unsecured debt to secured debt, which can be accomplished with cash provided by operating activities.

During 2023, we took action in alignment with our capital allocation priorities, as follows:

• We issued $750 million aggregate principal amount of our 6.750% 2030 Senior Notes.

The net proceeds from the 6.750% 2030 Senior Notes issuance were used to repay a portion of the borrowings under our ABL Facility.

The transaction increased our financial flexibility and liquidity, extended our debt maturity profile, and was effectively leverage and interest expense neutral.

• We entered into the Fourth ABL Amendment, which, among other things, extended the maturity date of our ABL Facility to June 9, 2028, and increased the overall commitments under our ABL Facility to $4.75 billion, which added $250 million of commitments.

• We used our free cash flow to reduce the total principal of our long-term debt by $1.1 billion.

• We returned capital to shareholders through our share repurchase program, repurchasing 10.4 million common shares at a cost of $152 million in the aggregate.

The market environment in 2024 provided us the ability to take advantage of favorable debt markets and return capital to shareholders, as follows:

• During the first quarter of 2024, we issued $825 million aggregate principal amount of our 7.000% 2032 Senior Notes at par.

A portion of the net proceeds from the 7.000% 2032 Senior Notes issuance was used to repurchase our 6.750% 2026 Senior Secured Notes.

We no longer have any secured notes outstanding.

• During the second half of 2024, we issued an additional $600 million aggregate principal amount of our 7.000% 2032 Senior Notes at 99.25% of their principal amount, $900 million aggregate principal amount of 6.875% Senior Notes due 2029 at par, and $900 million aggregate principal amount of 7.375% Senior Notes due 2033 at par.

The net proceeds from these transactions were used to finance a portion of the cash consideration payable in connection with the Stelco Acquisition, which we completed on November 1, 2024.

• During the first quarter of 2025, we issued $850 million aggregate principal amount of 7.500% Senior Notes due 2031 at par.

The net proceeds will be used for general corporate purposes, including the repayment of borrowings under our ABL Facility.

• Additionally, during the year ended December 31, 2024, we returned capital to shareholders through our share repurchase programs, repurchasing 37.9 million common shares at a cost of $733 million in the aggregate.

50 | CLF 2024 FORM 10-K

These actions with respect to our debt give us additional flexibility and liquidity, along with extending our average debt maturity date, which will better prepare us to navigate more easily through potentially volatile industry conditions in the future.

Additionally, we expect to have opportunities to continue to reduce our debt and return capital to shareholders with our free cash flow generation during 2024.

As of December 31, 2023, we had $1.5 billion aggregate principal amount outstanding of callable notes and had $608 million remaining under the authorization of our share repurchase program.

Our financial flexibility has allowed us to remain active in our opportunistic pursuit of value-enhancing mergers and acquisitions.

During 2024, we completed the Stelco Acquisition, which diversifies our end markets, expands our geographical presence in Canada and incorporates Stelco's industry low-cost structure into our overall asset portfolio.

We have a track record of demonstrating that we can quickly deleverage our balance sheet following prior acquisitions.

We expect to generate healthy free cash flow in the coming years and intend to utilize it to deleverage our balance sheet following the Stelco Acquisition.

Going forward, we will continue to use the financial levers available to us in order to continue to pursue assets that would grow our business, reduce our debt, and return capital to shareholders.

OPERATING ACTIVITIES

1 unchanged sentence

(In millions) 2024 2023 Variance

Net income $ 450 $ 1,376 $ (926)

Non-cash adjustments to net income 1,125 1,218 (93)

Net income (loss) $ (708) $ 450 $ (1,158)

Non-cash adjustments to net income (loss) 1,030 1,125 (95)

Income taxes (17) 122 (139)

3 unchanged sentences

The variance was driven by:

• A $1,019 million decrease in net income after adjustments for non-cash items due to lower gross margins resulting from a decrease in selling prices for our steel products, which was partially offset by an increase in sales volumes and a decrease in costs of production.

• A $1.3 billion decrease in net income after adjustments for non-cash items due to lower gross margins resulting from a decrease in selling prices and sales volumes for our steel products.

See "— Steelmaking Results" above for further detail on our operating results.

• A $110 million decrease in payments and contributions relating to our pension and OPEB plans.

As part of the 2022 USW labor negotiations, we paused the contribution requirement to the Cleveland-Cliffs Steel LLC VEBA plan and introduced certain Medicare-eligible retirees to Medicare Advantage plans.

Additionally, we negotiated favorable Medical Advantage Prescription Drug healthcare rates, which went into effect January 1, 2023.

• A $609 million increase in cash provided for working capital is primarily due to a decrease in inventories resulting from lower costs of steel driven by higher production, cost control and lower raw material costs.

• A $669 million decrease in cash provided for working capital is primarily related to ending inventory levels remaining consistent year over year.

This differs from the prior year when inventory levels decreased significantly.

This prior year decrease was primarily the result of lower costs of steel, driven by higher production, cost control and lower raw material costs.

INVESTING ACTIVITIES

6 unchanged sentences

The variance was driven by:

• A $297 million decrease in cash used for capital expenditures.

We incurred higher capital expenditures in 2022 compared to 2023 primarily relating to sustaining capital expenditures, including the completion of a reline of blast furnace #5 at Cleveland Works during the third quarter of 2022.

After elevated spend in 2022 to perform overdue maintenance work at the facilities acquired as part of the 2020 acquisitions, we resumed normalized levels of maintenance capital and operating expense in 2023.

Included within cash used for capital expenditures was $25 million for the year ended December 31, 2023, compared to $12 million for the year ended December 31, 2022, related to our non-owned SunCoke Middletown VIE.

Our capital expenditures primarily relate to sustaining capital spend, which includes infrastructure, mobile equipment, fixed equipment, product quality, environmental, and health and safety.

• A $2.5 billion increase in cash used for acquisitions, net of cash acquired related to the Stelco Acquisition, which was completed on November 1, 2024.

Refer to NOTE 3 - ACQUISITIONS for further information.

FINANCING ACTIVITIES

6 unchanged sentences

Net cash used by financing activities $ 2,970 $ (1,504) $ 4,474

The variance was driven by:

• A $5.1 billion increase in cash provided from net borrowings on both debt and under credit facilities, primarily related to the issuance of 7.000% 2032 Senior Notes, 6.875% 2029 Senior Notes and 7.375% 2033 Senior Notes and additional borrowings on the ABL Facility.

Approximately $2.5 billion of the net borrowings were utilized to finance the Stelco Acquisition, completed on November 1, 2024.

We also used a portion of the net proceeds to repurchase $829 million in aggregate principal amount of our 6.750% 2026 Secured Senior Notes.

This variance was partially offset by a $581 million increase in cash used to repurchase common shares during the year ended December 31, 2024.

51 | CLF 2024 FORM 10-K

2 unchanged sentences

Cash and cash equivalents, which totaled $54 million as of December 31, 2024, include cash on hand and on deposit, as well as short-term securities held for the primary purpose of general liquidity.

The combination of cash and availability under our ABL Facility gives us $4.5 billion in liquidity as of December 31, 2023.

During 2023, we issued $750 million in aggregate principal amount of our 6.750% 2030 Senior Notes.

We used the net proceeds from the offering to repay a portion of the borrowings under our ABL Facility, increasing our liquidity.

Additionally, during 2023, we entered into the Fourth ABL Amendment to our ABL Facility, increasing the commitments thereunder by $250 million.

The combination of cash and availability under our ABL Facility equated to $2.6 billion in liquidity as of December 31, 2024.

During 2024, we issued $1.4 billion in aggregate principal amount of 7.000% 2032 Senior Notes, $900 million in aggregate principal amount of 6.875% 2029 Senior Notes, and $900 million in aggregate principal amount of 7.375% 2033 Senior Notes.

We used a portion of the net proceeds from the initial offering of the 7.000% 2032 Senior Notes and available liquidity to repurchase $829 million in aggregate principal amount of our 6.750% 2026 Secured Senior Notes pursuant to a tender offer and subsequent redemption.

We used remaining net proceeds of the debt issuances to finance a portion of the Stelco Acquisition.

We believe our liquidity and access to capital markets will be adequate to fund our cash requirements for the next 12 months and for the foreseeable future.

Our ABL Facility, which now matures in June 2028, has a maximum borrowing base of $4.75 billion.

Our ABL Facility, which matures in June 2028, has a maximum borrowing base of $4.75 billion.

The available borrowing base is determined by applying customary advance rates to eligible accounts receivable, inventory and certain mobile equipment.

4 unchanged sentences

As of December 31, 2024, we were in compliance with all of our ABL Facility covenants.

We have the capability to issue additional unsecured notes and, subject to the limitations set forth in our existing senior notes indentures and ABL Facility, additional secured notes, if we elect to access the debt capital markets.

We have the capability to issue additional unsecured notes and, subject to the limitations set forth in our existing senior notes indentures and ABL Facility, additional secured debt, if we elect to access the debt capital markets.

On February 6, 2025, we issued $850 million aggregate principal amount of 7.500% Senior Notes due 2031 at par.

The net proceeds will be used for general corporate purposes, including the repayment of borrowings under our ABL Facility.

However, our ability to issue additional notes could be limited by market conditions.

1 unchanged sentence

Such redemptions or repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material.

Refer to NOTE 8 - DEBT AND CREDIT FACILITIES for more information on our ABL Facility and debt.

Refer to NOTE 8 - DEBT AND CREDIT FACILITIES and NOTE 21 - SUBSEQUENT EVENTS for further information on our ABL Facility and debt.

MATERIAL CASH REQUIREMENTS

1 unchanged sentence

CAPITAL EXPENDITURES

We anticipate total cash used for capital expenditures during the next 12 months to be between $675 and $725 million, which primarily consists of sustaining capital spend.

The necessary resources that we have invested in our footprint are expected to keep our assets at an automotive-grade level of quality and reliability for years to come.

We have principal long-term debt of $3,192 million with maturities starting in 2026.

We anticipate total cash used for capital expenditures during the next 12 months to be approximately $700 million, which primarily consists of sustaining capital spend of approximately $600 million, including Stelco, as well as initial spend on our capital projects at Middletown Works, Butler Works and Weirton.

Each of these three capital projects are expected to be value-adding growth projects that have governmental support.

We have principal long-term debt of $7.1 billion with maturities starting in 2027.

Refer to NOTE 8 - DEBT AND CREDIT FACILITIES for further information on our long-term debt and interest.

1 unchanged sentence

We have future minimum lease payments under noncancellable finance and operating leases.

As of December 31, 2023, the current and long-term liabilities for our lease obligations were $90 million and $363 million, respectively.

As of December 31, 2024, the current and non-current liabilities for our lease obligations were $113 million and $594 million, respectively.

Refer to NOTE 12 - LEASE OBLIGATIONS for further information.

2 unchanged sentences

Required contributions are based on minimum funding requirements pursuant to ERISA regulations.

We expect to make $122 million in pension contributions and payments in 2024.

We expect to make $69 million in pension contributions and payments in 2025, which is down from $119 million in 2024.

The cash requirements for our OPEB plans consist of VEBA contributions and direct payments from corporate assets primarily for medical and drug costs.

We expect to make $66 million in OPEB contributions and payments from corporate assets in 2024.

We expect to make $74 million in OPEB contributions and net payments from corporate assets in 2025, which is down from $76 million in 2024.

Contributions and payments in future years can significantly change and will depend on the actual returns on assets, discount rates, actual health care trend rates, government regulations, changes to employee benefits through labor agreements and other demographic factors.

1 unchanged sentence

ENVIRONMENTAL AND ASSET RETIREMENT OBLIGATIONS

Refer to NOTE 20 - COMMITMENTS AND CONTINGENCIES and NOTE 13 - ASSET RETIREMENT OBLIGATIONS for further information on our environmental and asset retirement obligations.

Refer to NOTE 13 - ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS for further information on our environmental and asset retirement obligations.

52 | CLF 2024 FORM 10-K

SHARE REPURCHASE PROGRAM

On February 10, 2022, our Board of Directors authorized a program to repurchase outstanding common shares in the open market or in privately negotiated transactions, which may include purchases pursuant to Rule 10b5-1 plans or accelerated share repurchases, up to a maximum of $1 billion.

As of December 31, 2023, there was $608 million remaining under the authorization.

We are not obligated to make any purchases and the program may be suspended or discontinued at any time.

On April 22, 2024, our Board of Directors authorized a program to repurchase our outstanding common shares in the open market or in privately negotiated transactions, which may include purchases pursuant to Rule 10b5-1 plans or accelerated share repurchases, up to a maximum of $1.5 billion.

We are not obligated to make any repurchases, and the program may be suspended or discontinued at any time.

The share repurchase program does not have a specific expiration date.

49 | CLF 2023 FORM 10-K

As of December 31, 2024, there was $1.4 billion remaining authorization under the share repurchase program.

OFF-BALANCE SHEET ARRANGEMENTS

15 unchanged sentences

In addition, management believes Adjusted EBITDA is a useful measure to assess the earnings power of the business without the impact of capital structure and can be used to assess our ability to service debt and fund future capital expenditures in the business.

The following table provides a reconciliation of our Net income to Adjusted EBITDA:

53 | CLF 2024 FORM 10-K

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

Year Ended December 31,

(In millions) 2024 2023 2022

Net income $ 450 $ 1,376 $ 3,033

Net income (loss) $ (708) $ 450 $ 1,376

Interest expense, net (370) (289) (276)

Income tax expense (148) (423) (773)

Income tax benefit (expense) 235 (148) (423)

Depreciation, depletion and amortization (951) (973) (1,034)

2 unchanged sentences

$ 76 $ 83 $ 74

Acquisition-related expenses and adjustments (12) (1) (197)

Goodwill impairment (125) — —

Non-cash gain on sale of business 28 — —

Weirton indefinite idle (217) — —

Arbitration decision (71) — —

Acquisition-related costs (44) (12) (1)

Changes in fair value of derivatives, net (41) — —

Loss on extinguishment of debt (27) — (75)

Asset impairment — (29) —

Amortization of inventory step-up (26) — —

Loss on currency exchange (20) — —

Loss on disposal of assets (16) (15) (22)

Goodwill impairment — (125) —

Other, net (16) 18 (36)

4 unchanged sentences

EBITDA of noncontrolling interests $ 76 $ 83 $ 74

50 | CLF 2023 FORM 10-K

The following table provides a summary of our Adjusted EBITDA by segment:

4 unchanged sentences

Other Businesses 53 43

Eliminations (5) 11

Intersegment Eliminations 5 (5)

Total Adjusted EBITDA $ 780 $ 1,911

2 unchanged sentences

Management believes it is an important measure to assess the cash generation available to service debt, strategic initiatives or other financing activities.

The following table provides a reconciliation of our operating cash flow to free cash flow:

The following table provides a reconciliation of our Net cash provided by operating activities to free cash flow:

Year Ended December 31,

3 unchanged sentences

Free cash flow $ (590) $ 1,621

Net debt is a non-GAAP financial measure that management uses in evaluating financial position.

Net debt is defined as long-term debt less cash and cash equivalents.

Management believes net debt is an important measure of our financial position due to the amount of cash and cash equivalents on hand.

The following table provides a reconciliation of our long-term debt to net debt:

(In millions) December 31, 2023 December 31, 2022

Long-term debt $ 3,137 $ 4,249

Cash and cash equivalents 198 26

Net debt $ 2,939 $ 4,223

54 | CLF 2024 FORM 10-K

INFORMATION ABOUT OUR GUARANTORS AND THE ISSUER OF OUR GUARANTEED SECURITIES

The accompanying summarized financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered,” and Rule 13-01 "Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralized a Registrant's Securities." Certain of our subsidiaries (the "Guarantor subsidiaries") as of December 31, 2023 have fully and unconditionally, and jointly and severally, guaranteed the obligations under (a) the 5.875% 2027 Senior Notes, the 7.000% 2027 Senior Notes, the 4.625% 2029 Senior Notes, the 6.750% 2030 Senior Notes, and the 4.875% 2031 Senior Notes issued by Cleveland-Cliffs Inc.

on a senior unsecured basis and (b) the 6.750% 2026 Senior Secured Notes issued by Cleveland-Cliffs Inc.

on a senior secured basis.

The accompanying summarized financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered,” and Rule 13-01 "Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralized a Registrant's Securities." Certain of our subsidiaries (the "Guarantor subsidiaries") as of December 31, 2024 have fully and unconditionally, and jointly and severally, guaranteed the obligations under the 5.875% 2027 Senior Notes, the 7.000% 2027 Senior Notes, the 4.625% 2029 Senior Notes, the 6.875% 2029 Senior Notes, the 6.750% 2030 Senior Notes, the 4.875% 2031 Senior Notes, the 7.000% 2032 Senior Notes and the 7.375% 2033 Senior Notes issued by Cleveland-Cliffs Inc.

on a senior unsecured basis.

See NOTE 8 - DEBT AND CREDIT FACILITIES for further information.

6 unchanged sentences

Refer to Exhibit 22 , incorporated herein by reference, for the detailed list of entities included within the obligated group as of December 31, 2024.

As of December 31, 2023, the guarantee of a Guarantor subsidiary with respect to Cliffs' 6.750% 2026 Senior Secured Notes, the 5.875% 2027 Senior Notes, the 7.000% 2027 Senior Notes, the 4.625% 2029 Senior Notes, the 6.750% 2030 Senior Notes and the 4.875% 2031 Senior Notes will be automatically and unconditionally released and discharged, and such Guarantor subsidiary’s obligations under the guarantee and the related indentures (the “Indentures”) will be automatically and unconditionally released and discharged, upon the occurrence of any of the following, along with the delivery to the trustee of an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the applicable Indenture relating to the release and discharge of such Guarantor subsidiary’s guarantee have been complied with:

51 | CLF 2023 FORM 10-K

As of December 31, 2024, the guarantee of a Guarantor subsidiary with respect to the 5.875% 2027 Senior Notes, the 7.000% 2027 Senior Notes, the 4.625% 2029 Senior Notes, the 6.875% 2029 Senior Notes, the 6.750% 2030 Senior Notes, the 4.875% 2031 Senior Notes, the 7.000% 2032 Senior Notes and the 7.375% 2033 Senior Notes will be automatically and unconditionally released and discharged, and such Guarantor subsidiary’s obligations under the guarantee and the related indentures (the “Indentures”) will be automatically and unconditionally released and discharged, upon the occurrence of any of the following, along with the delivery to the trustee of an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the applicable Indenture relating to the release and discharge of such Guarantor subsidiary’s guarantee have been complied with:

(a) any sale, exchange, transfer or disposition of such Guarantor subsidiary (by merger, consolidation, or the sale of) or the capital stock of such Guarantor subsidiary after which the applicable Guarantor subsidiary is no longer a subsidiary of the Company or the sale of all or substantially all of such Guarantor subsidiary’s assets (other than by lease), whether or not such Guarantor subsidiary is the surviving entity in such transaction, to a person which is not the Company or a subsidiary of the Company;

14 unchanged sentences

Non-current liabilities (9,241)

55 | CLF 2024 FORM 10-K

The following table is summarized combined financial information from the Statements of Condensed Consolidated Operations of the obligated group:

2 unchanged sentences

Cost of goods sold (18,530)

Income from continuing operations 531

Net income 532

Net income attributable to Cliffs shareholders 532

As of December 31, 2023 and 2022, the obligated group had the following balances with non-Guarantor subsidiaries and other related parties:

Loss from continuing operations (710)

Net loss (707)

Net loss attributable to Cliffs shareholders (707)

As of December 31, 2024, the obligated group had the following balances with non-Guarantor subsidiaries and other related parties:

(In millions) 2024

9 unchanged sentences

however, certain risks are beyond our control.

52 | CLF 2023 FORM 10-K

PRICING RISKS

3 unchanged sentences

Our financial results can vary for our operations as a result of fluctuations in market prices.

We attempt to mitigate these risks by aligning fixed and variable components in our customer pricing contracts, supplier purchasing agreements and derivative financial instruments.

We attempt to mitigate these risks by aligning fixed and variable components in our customer pricing contracts, supplier purchasing agreements and derivative instruments.

Some customer contracts have fixed pricing terms, which increase our exposure to fluctuations in raw material and energy costs.

10 unchanged sentences

There is a risk, however, that the variable-price mechanisms in the sales contracts may not necessarily change in tandem with the variable-price mechanisms in our purchase agreements, negatively affecting our results of operations and cash flows.

56 | CLF 2024 FORM 10-K

Our strategy to address volatile natural gas rates and electricity rates includes improving efficiency in energy usage, identifying alternative providers and utilizing the lowest cost alternative fuels.

17 unchanged sentences

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units and if a quantitative assessment is deemed necessary in determination of the fair value of each reporting unit.

The fair value of each reporting unit is estimated using the guideline public company method, the discounted cash flow methodology, or a combination of both, which considers forecasted cash flows

53 | CLF 2023 FORM 10-K

discounted at an estimated weighted average cost of capital.

Assessing the recoverability of our goodwill requires significant assumptions regarding the estimated future cash flows and other factors to determine the fair value of a reporting unit, including, among other things, estimates related to forecasts of future revenues, expected Adjusted EBITDA, expected capital expenditures and working capital requirements, which are based upon our long-range plan estimates.

The fair value of each reporting unit is estimated using the guideline public company method, the discounted cash flow methodology, or a combination of both, which considers forecasted cash flows discounted at an estimated weighted average cost of capital.

Assessing the recoverability of our goodwill requires significant assumptions regarding discount rates, market multiples, the estimated future cash flows and other factors to determine the fair value of a reporting unit, including, among other things, estimates related to forecasts of future revenues, Adjusted EBITDA, capital expenditures and working capital requirements, which are based upon our long-range plan estimates.

The assumptions used to calculate the fair value of a reporting unit may change from year to year based on operating results, market conditions and other factors.

Changes in these assumptions could materially affect the determination of fair value for each reporting unit.

Our 2023 annual goodwill impairment analysis resulted in an impairment charge of $125 million for goodwill related to our Tooling and Stamping reporting unit.

The decline in the fair value of our Tooling and Stamping reporting unit below its carrying value during 2023 resulted from forgoing previous investment and capital plans in favor of other opportunities and an increase in the discount rate.

No impairment charges were identified in connection with our annual goodwill assessment with respect to our other identified reporting units.

We determined that our other identified reporting units were not at risk of failing the goodwill impairment test as of December 31, 2023.

No impairment charges were identified in connection with our annual goodwill impairment test with respect to our identified reporting units.

OTHER LONG-LIVED ASSETS

11 unchanged sentences

We estimate fair value using a market approach, an income approach or a cost approach.

During the year ended December 31, 2023, we concluded there were no triggering events resulting in the need for an asset impairment assessment except for our Tooling and Stamping operations.

The goodwill impairment we recorded at our Tooling and Stamping operations was deemed a triggering event;

however, the other long-lived assets recoverability assessment did not result in an asset impairment charge.

During the year ended December 31, 2024, we concluded there were no triggering events resulting in the need for an asset impairment assessment except for the announcement of the indefinite idle of our Weirton tinplate production plant, which resulted in a $79 million asset impairment charge.

57 | CLF 2024 FORM 10-K

FOREIGN CURRENCY EXCHANGE RATE RISK

We are subject to changes in foreign currency exchange rates primarily as a result of our operations in Canada, which could impact our financial condition.

Foreign exchange rate risk arises from our exposure to fluctuations in foreign currency exchange rates because our reporting currency is the U.S.

dollar, but the functional currency of our Stelco subsidiaries is the Canadian dollar.

Specifically, we are primarily exposed to fluctuations in foreign currency rates in relation to an intercompany note with our Stelco subsidiary that is denominated in the Canadian dollar.

Changes in the Canadian dollar exchange rate may result in volatility in our financial condition due to the routine remeasurement of this note.

As of December 31, 2024, a 1% change in the Canadian dollar foreign currency exchange rate would result in a $9 million change in currency exchange income (expense).

Additionally, we engage in routine transactions denominated in foreign currencies, such as the purchases of goods and services.

However, the potential impact of these transactions to our financial condition is significantly less than the potential impact of the routine remeasurement of the intercompany note.

INTEREST RATE RISK

1 unchanged sentence

Interest payable under our ABL Facility is at a variable rate based upon the applicable base rate plus the applicable base rate margin depending on the excess availability.

As of December 31, 2023, we had no outstanding borrowings under our ABL Facility.

As of December 31, 2024, we had $1.6 billion outstanding borrowings under our ABL Facility.

An increase in prevailing interest rates would increase interest expense and interest paid for any outstanding borrowings under our ABL Facility.

For example, a 100 basis point change to interest rates under our ABL Facility at the December 31, 2024 borrowing level would result in a change of $16 million to interest expense on an annual basis.

For a discussion of the attendant risk, see Part I – Item 1A.

14 unchanged sentences

Management believes that the following critical accounting estimates and judgments have a significant impact on our financial statements.

BUSINESS COMBINATIONS

Assets acquired and liabilities assumed in a business combination are recognized and measured based on their estimated fair values at the acquisition date, while the acquisition-related costs are expensed as incurred.

Any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill.

We engage independent valuation specialists to assist with the determination of the fair value of assets acquired, liabilities assumed and goodwill associated with an acquisition.

If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded.

Subsequent to the acquisition date, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that existed as of the date of the acquisition.

Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustment arises.

VALUATION OF GOODWILL AND OTHER LONG-LIVED ASSETS

1 unchanged sentence

Refer to "–Market Risks" above for additional information.

54 | CLF 2023 FORM 10-K

IRON ORE MINERAL RESERVES

1 unchanged sentence

We perform an in-depth evaluation of our mineral reserve estimates by mine on a periodic basis, in addition to routine annual assessments.

The determination of mineral reserves requires us and third-party QPs to make significant estimates and assumptions related to key inputs, including, but not limited to, (1) the determination of the size and scope of the iron ore body through technical modeling, (2) the estimates of future iron ore prices, production costs and capital expenditures, and (3) management’s mine plan for the proven and probable mineral reserves.

The determination of mineral reserves requires us and third-party QPs to make

58 | CLF 2024 FORM 10-K

significant estimates and assumptions related to key inputs, including, but not limited to, (1) the determination of the size and scope of the iron ore body through technical modeling, (2) the estimates of future iron ore prices, production costs and capital expenditures, and (3) management’s mine plan for the proven and probable mineral reserves.

The significant estimates and assumptions could be affected by future industry conditions, geological conditions and ongoing mine planning.

6 unchanged sentences

We also utilize mineral reserves for evaluating potential impairments of goodwill and mine asset groups as they are indicative of future cash flows and in determining maximum useful lives utilized to calculate depreciation, depletion and amortization of long-lived mine assets.

The consolidated asset retirement obligation balance was $459 million as of December 31, 2023, of which $171 million related to active iron ore mine operations.

Refer to NOTE 13 - ASSET RETIREMENT OBLIGATIONS for further information.

Refer to NOTE 13 - ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS for further information.

ASSET RETIREMENT OBLIGATIONS

The accrued closure obligation is related to our indefinitely idled and closed iron ore mining operations and provides for contractual and legal obligations associated with the eventual closure of our active operations.

Asset retirement obligations provide for contractual and legal obligations related to our indefinitely idled and closed operations and also provide for the eventual closure of our active operations.

We perform an in-depth evaluation of the liability every three years in addition to our routine annual assessments.

7 unchanged sentences

Changes in the base estimates of legal and contractual closure costs due to changes in legal or contractual requirements, available technology, inflation, overhead or profit rates also could have a significant impact on the recorded obligations.

Refer to NOTE 13 - ASSET RETIREMENT OBLIGATIONS, for further information.

Refer to NOTE 13 - ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS, for further information.

ENVIRONMENTAL REMEDIATION COSTS

5 unchanged sentences

Expected future expenditures are discounted to present value unless the amount and timing of the cash disbursements cannot be reasonably estimated.

Refer to NOTE 13 - ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS, for further information.

Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management's best assessment of estimated future taxes to be paid.

9 unchanged sentences

deferred tax assets was $39 million and $40 million, respectively, and the valuation allowance on our foreign deferred tax assets was $349 million and $356 million, respectively.

55 | CLF 2023 FORM 10-K

During 2023, we recorded a $14 million valuation allowance against a portion of our Canadian deferred tax assets due to losses in recent years.

We intend to maintain a valuation allowance against these deferred tax assets, unless and until sufficient positive evidence exists to support the realization of such assets.

Our losses in Luxembourg in recent periods represent sufficient negative evidence to require a full valuation allowance against the deferred tax assets in that jurisdiction.

Our losses in Luxembourg in recent periods represent sufficient negative

59 | CLF 2024 FORM 10-K

evidence to require a full valuation allowance against the deferred tax assets in that jurisdiction.

We intend to maintain a valuation allowance against the deferred tax assets related to these operating losses, unless and until sufficient positive evidence exists to support the realization of such assets.

22 unchanged sentences

Although our actual returns will likely differ from our estimate on any given year, the returns over the long term are expected to match our assumptions.

In 2024, our weighted average expected return on assets for pension and OPEB plans will increase from 7.66% to 7.85% and from 5.87% to 5.94%, respectively.

In 2025, our weighted average expected return on assets for pension plans will remain at 7.85% while OPEB plans will decrease from 5.95% to 5.89%.

Cumulative actuarial gains and losses will be amortized to expense using the corridor method, where gains and losses are recognized if they exceed 10% of the greater of the fair value of plan assets or the plans' benefit obligations.

6 unchanged sentences

Refer to NOTE 9 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS for further information.

56 | CLF 2023 FORM 10-K

FORWARD-LOOKING STATEMENTS

6 unchanged sentences

Uncertainties and risk factors that could affect our future performance and cause results to differ from the forward-looking statements in this report include, but are not limited to:

• continued volatility of steel, iron ore and scrap metal market prices, which directly and indirectly impact the prices of the products that we sell to our customers;

• continued volatility of steel, scrap metal and iron ore market prices, which directly and indirectly impact the prices of the products that we sell to our customers;

60 | CLF 2024 FORM 10-K

• uncertainties associated with the highly competitive and cyclical steel industry and our reliance on the demand for steel from the automotive industry;

• potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity, oversupply of iron ore, prevalence of steel imports and reduced market demand;

• potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity and production, prevalence of steel imports, reduced market demand and oversupply of iron ore;

• severe financial hardship, bankruptcy, temporary or permanent shutdowns or operational challenges of one or more of our major customers, key suppliers or contractors, which, among other adverse effects, could disrupt our operations or lead to reduced demand for our products, increased difficulty collecting receivables, and customers and/or suppliers asserting force majeure or other reasons for not performing their contractual obligations to us;

• risks related to U.S.

government actions with respect to Section 232, the USMCA and/or other trade agreements, tariffs, treaties or policies, as well as the uncertainty of obtaining and maintaining effective antidumping and countervailing duty orders to counteract the harmful effects of unfairly traded imports;

• impacts of existing and increasing governmental regulation, including potential environmental regulations relating to climate change and carbon emissions, and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorizations of, or from, any governmental or regulatory authority and costs related to implementing improvements to ensure compliance with regulatory changes, including potential financial assurance requirements, and reclamation and remediation obligations;

government actions and other countries' reactions with respect to Section 232, the USMCA and/or other trade agreements, tariffs, treaties or policies, as well as the uncertainty of obtaining and maintaining effective antidumping and countervailing duty orders to counteract the harmful effects of unfairly traded imports;

• impacts of existing and increasing governmental regulation, including actual and potential environmental regulations relating to climate change and carbon emissions, and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorizations of, or from, any governmental or regulatory authority and costs related to implementing improvements to ensure compliance with regulatory changes, including potential financial assurance requirements, and reclamation and remediation obligations;

• potential impacts to the environment or exposure to hazardous substances resulting from our operations;

2 unchanged sentences

• adverse changes in credit ratings, interest rates, foreign currency rates and tax laws;

• challenges to successfully implementing our business strategy to achieve operating results in line with our guidance;

• the outcome of, and costs incurred in connection with, lawsuits, claims, arbitrations or governmental proceedings relating to commercial and business disputes, antitrust claims, environmental matters, government investigations, occupational or personal injury claims, property-related matters, labor and employment matters, or suits involving legacy operations and other matters;

4 unchanged sentences

• uncertainties associated with natural or human-caused disasters, adverse weather conditions, unanticipated geological conditions, critical equipment failures, infectious disease outbreaks, tailings dam failures and other unexpected events;

• cybersecurity incidents relating to, disruptions in, or failures of, information technology systems that are managed by us or third parties that host or have access to our data or systems, including the loss, theft or corruption of sensitive or essential business or personal information and the inability to access or control systems;

• cybersecurity incidents relating to, disruptions in, or failures of, information technology systems that are managed by us or third parties that host or have access to our data or systems, including the loss, theft or corruption of our or third parties' sensitive or essential business or personal information and the inability to access or control systems;

• liabilities and costs arising in connection with any business decisions to temporarily or indefinitely idle or permanently close an operating facility or mine, which could adversely impact the carrying value of associated assets and give rise to impairment charges or closure and reclamation obligations, as well as uncertainties associated with restarting any previously idled operating facility or mine;

57 | CLF 2023 FORM 10-K

• our ability to realize the anticipated synergies or other expected benefits of the Stelco Acquisition, as well as the impact of additional liabilities and obligations incurred in connection with the Stelco Acquisition;

• our level of self-insurance and our ability to obtain sufficient third-party insurance to adequately cover potential adverse events and business risks;

1 unchanged sentence

• challenges to maintaining our social license to operate with our stakeholders, including the impacts of our operations on local communities, reputational impacts of operating in a carbon-intensive industry that produces GHG emissions, and our ability to foster a consistent operational and safety track record;

• our actual economic mineral reserves or reductions in current mineral reserve estimates, and any title defect or loss of any lease, license, easement or other possessory interest for any mining property;

61 | CLF 2024 FORM 10-K

• our actual economic mineral reserves or reductions in current mineral reserve estimates, and any title defect or loss of any lease, license, option, easement or other possessory interest for any mining property;

• our ability to maintain satisfactory labor relations with unions and employees;

1 unchanged sentence

• uncertain availability or cost of skilled workers to fill critical operational positions and potential labor shortages caused by experienced employee attrition or otherwise, as well as our ability to attract, hire, develop and retain key personnel;

• the amount and timing of any repurchases of our common shares;

• potential significant deficiencies or material weaknesses in our internal control over financial reporting.

3 unchanged sentences

Forward-looking and other statements in this Annual Report on Form 10-K regarding our GHG reduction plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC.

In addition, historical, current and forward-looking GHG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Historical, current and forward-looking GHG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis