What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-05 · 300 added, 317 removed, 489 unchanged (56% of the section changed)

3 unchanged sentences

AND SUBSIDIARIES

(In millions, except share information) September 30,

(In millions, except share information) March 31,

2025 December 31,

8 unchanged sentences

Goodwill 1,767 1,768

Intangible assets 1,150 1,170

Pension and OPEB assets 443 427

12 unchanged sentences

Deferred income taxes 723 858

Asset retirement and environmental obligations 609 601

Other non-current liabilities 1,442 1,453

19 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions, except per share amounts) 2025 2024

3 unchanged sentences

Selling, general and administrative expenses ( 133 ) ( 132 )

Acquisition-related costs ( 14 ) ( 5 ) ( 14 ) ( 5 )

Restructuring and other charges ( 3 ) ( 104 )

Asset impairments — — ( 79 ) —

Asset impairment — ( 64 )

Miscellaneous – net ( 11 ) ( 23 )

Total operating costs ( 5,167 ) ( 5,237 )

Operating income (loss) ( 259 ) 325 ( 291 ) 777

Operating loss ( 538 ) ( 38 )

Other income (expense):

2 unchanged sentences

Net periodic benefit credits other than service cost component 57 60

Changes in fair value of foreign currency contracts, net ( 7 ) — ( 7 ) —

Other non-operating income (expense) ( 9 ) 2

Total other expense ( 92 ) ( 23 )

Income (loss) from continuing operations before income taxes ( 306 ) 303 ( 373 ) 705

Income tax benefit (expense) 76 ( 29 ) 99 ( 118 )

Income (loss) from continuing operations ( 230 ) 274 ( 274 ) 587

Income from discontinued operations, net of tax — 1 — 2

Net income (loss) ( 230 ) 275 ( 274 ) 589

Income attributable to noncontrolling interests ( 12 ) ( 11 ) ( 33 ) ( 35 )

Net income (loss) attributable to Cliffs shareholders $ ( 242 ) $ 264 $ ( 307 ) $ 554

Earnings (loss) per common share attributable to Cliffs shareholders - basic

Continuing operations $ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Discontinued operations — — — —

$ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Earnings (loss) per common share attributable to Cliffs shareholders - diluted

Continuing operations $ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Discontinued operations — — — —

$ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Loss before income taxes ( 630 ) ( 61 )

Income tax benefit 147 8

Net loss ( 483 ) ( 53 )

Net income attributable to noncontrolling interests ( 12 ) ( 14 )

Net loss attributable to Cliffs shareholders $ ( 495 ) $ ( 67 )

Loss per common share attributable to Cliffs shareholders:

Basic $ ( 1.00 ) $ ( 0.14 )

Diluted $ ( 1.00 ) $ ( 0.14 )

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

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED COMPREHENSIVE LOSS

CLEVELAND-CLIFFS INC.

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

Net income (loss) $ ( 230 ) $ 275 $ ( 274 ) $ 589

Net loss $ ( 483 ) $ ( 53 )

Other comprehensive income (loss):

3 unchanged sentences

Total other comprehensive income (loss) 75 ( 9 )

Comprehensive income (loss) ( 256 ) 279 ( 291 ) 406

Comprehensive loss ( 408 ) ( 62 )

Comprehensive income attributable to noncontrolling interests ( 12 ) ( 14 )

Comprehensive income (loss) attributable to Cliffs shareholders $ ( 268 ) $ 268 $ ( 324 ) $ 371

Comprehensive loss attributable to Cliffs shareholders $ ( 420 ) $ ( 76 )

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

2 unchanged sentences

AND SUBSIDIARIES

Nine Months Ended

September 30,

Three Months Ended

(In millions) 2025 2024

OPERATING ACTIVITIES

Net income (loss) $ ( 274 ) $ 589

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net loss $ ( 483 ) $ ( 53 )

Adjustments to reconcile net loss to net cash provided (used) by operating activities:

Depreciation, depletion and amortization 282 230

Restructuring and other charges 131 —

Asset impairments 79 —

Pension and OPEB credits ( 48 ) ( 51 )

Loss on extinguishment of debt 27 —

Deferred income taxes ( 151 ) ( 8 )

Changes in operating assets and liabilities:

5 unchanged sentences

Other, net 4 21

Net cash provided by operating activities 577 1,615

Net cash provided (used) by operating activities ( 351 ) 142

INVESTING ACTIVITIES

3 unchanged sentences

FINANCING ACTIVITIES

Repurchase of common shares ( 733 ) ( 152 )

Proceeds from issuance of senior notes 850 825

Repayments of senior notes — ( 652 )

Repurchase of common shares — ( 608 )

Borrowings (repayments) under credit facilities, net ( 305 ) 342

1 unchanged sentence

Other financing activities ( 33 ) ( 25 )

Net cash used by financing activities ( 259 ) ( 1,140 )

Net cash provided (used) by financing activities 499 ( 131 )

Net increase (decrease) in cash and cash equivalents 3 ( 168 )

Cash and cash equivalents at beginning of period 198 26

Cash, cash equivalents, and restricted cash at beginning of period 60 198

Effect of exchange rate changes on cash — —

Cash, cash equivalents, and restricted cash at end of period 63 30

Restricted cash ( 6 ) —

Cash and cash equivalents at end of period $ 57 $ 30

11 unchanged sentences

Comprehensive income (loss) — — — ( 495 ) — 75 12 ( 408 )

Common stock repurchases, net of excise tax ( 30.4 ) — — — ( 615 ) — — ( 615 )

Stock and other incentive plans 0.6 — ( 2 ) — 12 — — 10

1 unchanged sentence

March 31, 2025 494.5 $ 66 $ 4,756 $ 484 $ ( 664 ) $ 1,612 $ 230 $ 6,484

Comprehensive income — — — 2 — 18 7 27

Common stock repurchases, net of excise tax ( 7.5 ) — — — ( 125 ) — — ( 125 )

Stock and other incentive plans — — 13 — 1 — — 14

Net distributions to noncontrolling interests — — — — — — 14 14

June 30, 2024 468.0 $ 66 $ 4,864 $ 1,668 $ ( 1,154 ) $ 1,666 $ 262 $ 7,372

Comprehensive income (loss) — — — ( 242 ) — ( 26 ) 12 ( 256 )

Stock and other incentive plans 0.1 — 11 — 1 — — 12

Net distributions to noncontrolling interests — — — — — — ( 33 ) ( 33 )

September 30, 2024 468.1 $ 66 $ 4,875 $ 1,426 $ ( 1,153 ) $ 1,640 $ 241 $ 7,095

(In millions) Number of

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Comprehensive income (loss) — — — ( 67 ) — ( 9 ) 14 ( 62 )

Stock and other incentive plans 1.8 — ( 39 ) — 30 — — ( 9 )

Net distributions to noncontrolling interests — — — — — — ( 19 ) ( 19 )

March 31, 2023 515.1 $ 66 $ 4,832 $ 1,277 $ ( 280 ) $ 1,651 $ 247 $ 7,793

Comprehensive income (loss) — — — 347 — ( 8 ) 9 348

Common stock repurchases, net of excise tax ( 30.4 ) — — — ( 615 ) — — ( 615 )

1 unchanged sentence

Net distributions to noncontrolling interests — — — — — — ( 8 ) ( 8 )

June 30, 2023 508.7 $ 66 $ 4,841 $ 1,624 $ ( 372 ) $ 1,643 $ 242 $ 8,044

Comprehensive income — — — 264 — 4 11 279

Common stock repurchases, net of excise tax ( 3.9 ) — — — ( 59 ) — — ( 59 )

Stock and other incentive plans — — 9 — — — — 9

Net distributions to noncontrolling interests — — — — — — ( 9 ) ( 9 )

September 30, 2023 504.8 $ 66 $ 4,850 $ 1,888 $ ( 431 ) $ 1,647 $ 244 $ 8,264

March 31, 2024 475.5 $ 66 $ 4,851 $ 1,666 $ ( 1,030 ) $ 1,648 $ 241 $ 7,442

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

8 unchanged sentences

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, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024 or any other future period.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or any other future period.

Certain prior period amounts have been reclassified to conform with the current year presentation.

2 unchanged sentences

We are a leading North America-based steel producer with focus on value-added sheet products, particularly for the automotive industry.

We are also a leading producer of electrical steels referred to as GOES and NOES in the U.S.

We are vertically integrated from the mining of iron ore, production of pellets and direct reduced iron, and processing of ferrous scrap through primary steelmaking and downstream finishing, stamping, tooling and tubing.

Headquartered in Cleveland, Ohio, with the closing of the Stelco Acquisition, we employ approximately 30,000 people across our operations in the United States and Canada.

Headquartered in Cleveland, Ohio, we employ approximately 30,000 people across our operations in the United States and Canada.

More than 90% of our approximately 23,000 hourly workforce is represented by three prominent unions - USW, UAW and IAM.

ACQUISITION OF STELCO

1 unchanged sentence

In connection with closing, Stelco shareholders received CAD $ 60.00 in cash and 0.454 shares of Cliffs common stock per share of Stelco common stock.

Refer to NOTE 3 - ACQUISITIONS for further information.

BUSINESS OPERATIONS

2 unchanged sentences

BASIS OF CONSOLIDATION

The unaudited condensed consolidated financial statements consolidate our accounts and the accounts of our wholly owned subsidiaries, all subsidiaries in which we have a controlling interest and VIEs for which we are the primary beneficiary.

The consolidated financial statements consolidate our accounts and the accounts of our wholly owned subsidiaries, all subsidiaries in which we have a controlling interest and VIEs for which we are the primary beneficiary.

All intercompany transactions and balances are eliminated upon consolidation.

2 unchanged sentences

These investments are included within our Steelmaking segment.

Our investment in affiliates of $ 117 million and $ 123 million as of September 30, 2024 and December 31, 2023, respectively, was classified in Other non-current assets.

We review an investment for impairment when circumstances indicate that a loss in value below its carrying amount is other than temporary.

Our investment in affiliates of $ 131 million at both March 31, 2025 and December 31, 2024, was classified in Other non-current assets.

SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

RECENT ACCOUNTING PRONOUNCEMENTS AND LEGISLATION

In September 2022, the FASB issued ASU No.

2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations .

This guidance requires annual and interim disclosure of the key terms of outstanding supplier finance programs and a roll-forward of the related obligations.

The new standard does not affect the recognition, measurement or financial statement presentation of the supplier finance program obligations.

We have adopted this standard, except for the amendment on roll-forward information, which is effective for fiscal years beginning after December 15, 2023.

Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for further information.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This guidance requires additional annual and interim disclosures for reportable segments.

This new standard does not affect the recognition, measurement or financial statement presentation.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

ACCOUNTING PRONOUNCEMENTS - ISSUED AND NOT EFFECTIVE

In December 2023, the FASB issued ASU No.

1 unchanged sentence

Improvements to Income Tax Disclosures .

This guidance requires additional annual and interim disclosures for income taxes.

This new standard does not affect the

recognition, measurement or financial statement presentation.

The amendments are effective for fiscal years beginning after December 15, 2024.

This guidance requires additional annual disclosures for income taxes.

This new standard does not affect the recognition, measurement or financial statement presentation.

The amendments are effective for annual reporting periods beginning after December 15, 2024.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This new standard does not affect the recognition, measurement or financial statement presentation.

However, this guidance does require additional annual and interim disclosures related to the disaggregation of various income statement expense captions.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

ALLOWANCE FOR CREDIT LOSSES

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

(In millions) 2024 2023

Allowance for credit losses as of January 1 $ ( 5 ) $ ( 4 )

Decrease (increase) in allowance 1 ( 3 )

Allowance for credit losses as of September 30 $ ( 4 ) $ ( 7 )

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

(In millions) September 30,

(In millions) March 31,

2025 December 31,

11 unchanged sentences

Supply chain finance programs that extend terms or provide us an economic benefit are classified as short-term financings.

As of September 30, 2024 and December 31, 2023, we had $ 27 million and $ 21 million, respectively, deemed as short-term financings that are classified in Other current liabilities .

Additionally , as of September 30, 2024 and December 31, 2023, we had $ 71 million and $ 91 million, respectively, classified as Accounts payable.

WEIRTON INDEFINITE IDLE

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

As of September 30, 2024, we have incurred $ 212 million of charges related to the idle and estimate that we will incur nominal future charges to Restructuring and other charges, primarily related to employee related costs which are expected to be incurred by the end of 2024.

The following table represents a reconciliation of our accrued liabilities related to the Weirton indefinite idle:

(In millions) Employee- Related Costs Exit Costs Asset Impairment Total

Balance as of December 31, 2023 $ — $ — $ — $ —

Costs incurred 1

Cash payments — ( 2 ) — ( 2 )

Non-cash — — ( 64 ) ( 64 )

Balance as of March 31, 2024 $ 58 $ 46 $ — $ 104

Costs incurred 2

Cash payments ( 8 ) ( 10 ) — ( 18 )

Non-cash — — ( 15 ) ( 15 )

Balance as of June 30, 2024 $ 73 $ 38 $ — $ 111

Costs incurred 3

Cash payments ( 10 ) ( 11 ) — ( 21 )

Balance as of September 30, 2024 $ 63 $ 29 $ — $ 92

1 Of the $ 170 million of cost incurred, $ 104 million was recorded in Restructuring and other charges, $ 64 million was recorded in Asset impairments and $ 2 million was recorded in Net periodic benefit credits other than service cost component .

2 Of the $ 40 million of costs incurred, $ 25 million was recorded in Restructuring and other charges and $ 15 million was recorded in Asset impairments.

3 Costs incurred of $ 2 million were recorded in Restructuring and other charges.

As of March 31, 2025 and December 31, 2024, we had $ 22 million and $ 29 million, respectively, deemed as short-term financings that are classified in Other current liabilities .

Additionally , as of March 31, 2025 and December 31, 2024, we had $ 79 million and $ 76 million, respectively, classified as Accounts payable.

CASH FLOW INFORMATION

A reconciliation of capital additions to cash paid for capital expenditures is as follows:

Nine Months Ended

September 30,

Three Months Ended

(In millions) 2025 2024

5 unchanged sentences

Cash payments (receipts) for income taxes and interest are as follows:

Nine Months Ended

September 30,

Three Months Ended

(In millions) 2025 2024

2 unchanged sentences

Interest paid on debt obligations net of capitalized interest 1

1 Capitalized interest was $ 11 million and $ 8 million for the nine months ended September 30, 2024 and 2023, respectively.

1 Capitalized interest was $ 4 million for both the three months ended March 31, 2025 and 2024, respectively.

NOTE 3 - ACQUISITIONS

STELCO ACQUISITION OVERVIEW

On November 1, 2024, pursuant to the Arrangement Agreement, we completed the Stelco Acquisition, in which we were the acquirer.

The Stelco Acquisition expands our existing presence in Canada and diversifies our customer base across service centers, construction and other industrial end markets in Canada with higher volumes of spot sales.

The Stelco Acquisition was accounted for under the acquisition method of accounting for business combinations.

The fair value of the total purchase consideration was determined as follows:

(In millions)

Total cash consideration $ 2,450

Total share exchange consideration 343

Total debt consideration 415

Total purchase consideration $ 3,208

Total consideration shares are calculated as follows:

Number of outstanding Stelco shares 54,448,388

Number of outstanding share-based compensation awards 2,516,415

Total consideration shares 56,964,803

Total estimated cash consideration is calculated as follows:

Number of consideration shares 56,964,803

Consideration share price per share (CAD) $ 60.00

Total cash consideration (CAD) (in millions) 3,418

Exchange rate (November 1, 2024) 0.7168

Total cash consideration (USD) $ 2,450

The fair value of share exchange consideration is as follows:

Number of consideration shares 56,964,803

Fixed share exchange factor 0.454

Total Cliffs exchange shares 25,862,021

Cliffs share price at closing date (November 1, 2024) $ 13.27

Total share exchange consideration (in millions) $ 343

The fair value of debt consideration includes outstanding obligations with preexisting change-in-control provisions requiring repayment at the time of closing.

The debt consideration includes amounts repaid in connection with retiring Stelco's asset-based lending facility and inventory monetization arrangement.

VALUATION ASSUMPTION AND PURCHASE PRICE ALLOCATION

We estimated fair values at November 1, 2024 for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in connection with the Stelco Acquisition.

During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates.

If we determine any measurement period adjustments are material, we will apply those adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined.

We are in the process of conducting a valuation of the assets acquired and liabilities assumed related to the Stelco Acquisition, most notably, personal and real property, deferred taxes, environmental obligations, asset retirement obligations and intangible assets, and the final allocation will be made when completed, including the result of any identified goodwill.

Accordingly, the provisional measurements noted below are preliminary and subject to modification in the future.

The preliminary purchase price allocation to assets acquired and liabilities assumed in the Stelco Acquisition was:

(In millions) Initial Allocation of Consideration Measurement Period Adjustments Updated Allocation

Cash and cash equivalents $ 341 $ — $ 341

Accounts receivable 104 — 104

Inventories 726 ( 7 ) 719

Other current assets 107 ( 1 ) 106

Property, plant and equipment 1,286 ( 5 ) 1,281

Intangible assets 1,025 — 1,025

Other non-current assets 250 — 250

Accounts payable ( 212 ) — ( 212 )

Accrued employment costs ( 29 ) — ( 29 )

Accrued expenses ( 6 ) ( 1 ) ( 7 )

Other current liabilities ( 71 ) — ( 71 )

Pension and OPEB liability, non-current ( 14 ) — ( 14 )

Deferred income taxes ( 449 ) 10 ( 439 )

Asset retirement and environmental obligations ( 20 ) — ( 20 )

Other non-current liabilities ( 616 ) 5 ( 611 )

Net identifiable assets acquired 2,422 1 2,423

Goodwill 786 ( 1 ) 785

Total net assets acquired $ 3,208 $ — $ 3,208

The goodwill resulting from the Stelco Acquisition primarily represents the growth opportunities through diversification within our customer base across service centers, construction and other industrial end markets with higher volumes of spot sales, as well as any synergistic benefits to be realized from the Stelco Acquisition within our Steelmaking segment.

Goodwill is not expected to be deductible for U.S.

federal income tax purposes.

The purchase price allocated to identifiable intangible assets acquired was:

(In millions) Weighted Average Life (In years)

Intangible assets:

Customer relationships $ 953 15

Trade names and trademarks 72 15

Total identifiable intangible assets $ 1,025 15

PRO FORMA RESULTS

The following table provides unaudited pro forma financial information, prepared in accordance with Topic 805, Business Combinations, as if Stelco had been acquired as of January 1, 2023:

Three Months Ended March 31,

(In millions) 2024

Revenues $ 5,752

Net loss attributable to Cliffs shareholders ( 93 )

The unaudited pro forma financial information has been calculated after applying our accounting policies and adjusting the historical results with pro forma adjustments, net of tax, that assume the Stelco Acquisition occurred on January 1, 2023.

There were no significant non-recurring pro forma adjustments included in the pro forma results for the three months ended March 31, 2024.

The unaudited pro forma financial information does not reflect the potential realization of synergies or cost savings, nor does it reflect other costs relating to the integration of the acquired company.

This unaudited pro forma financial information should not be considered indicative of the results that would have actually occurred if the Stelco Acquisition had been consummated on January 1, 2023, nor are they indicative of future results.

NOTE 4 - REVENUES

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Sales taxes collected from customers are excluded from revenues.

Revenue by market and product are presented net of intersegment revenues, which are entirely related to the Steelmaking segment.

The following table represents our Revenues by market:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

3 unchanged sentences

Steel producers

608 737 1,846 2,234

Total Steelmaking 4,467 5,027

7 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

11 unchanged sentences

NOTE 5 - SEGMENT REPORTING

We are vertically integrated from mined raw materials and direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing.

We are organized into four operating segments based on our differentiated products – Steelmaking, Tubular, Tooling and Stamping, and European Operations.

1 unchanged sentence

The operating segment results of our Tubular, Tooling and Stamping, and European Operations that do not constitute reportable segments are combined and disclosed in the Other Businesses category.

Our Steelmaking segment operates as a leading North America-based steel producer supported by being the largest iron ore pellet producer as well as a leading prime scrap processor, primarily serving the automotive, distributors and converters, and infrastructure and manufacturing markets.

Our Steelmaking segment operates as a leading North America-based steel producer with focus on value-added sheet products, primarily serving the automotive, infrastructure and manufacturing, and distributors and converters markets.

Our Other Businesses primarily include the operating segments that provide customer solutions with carbon and stainless steel tubing products, advanced-engineered solutions, tool design and build, hot- and cold-stamped steel components, and complex assemblies.

All intersegment transactions were eliminated in consolidation.

Corporate assets and capital additions are primarily related to and support the operations of the Steelmaking segment and therefore have been incorporated within the Steelmaking segment total assets and capital additions below.

We allocate Corporate Selling, general and administrative expenses to our operating segments.

We evaluate performance on an operating segment basis, as well as a consolidated basis, based on Adjusted EBITDA, which is a non-GAAP measure.

This measure is used by management, investors, lenders and other external users of our financial statements to assess our operating performance and to compare operating performance to other companies in the steel industry, showing results exclusive of certain non-recurring and/or non-cash items.

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.

Our results by segment are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023 2024 2023

Steelmaking $ 4,419 $ 5,443 $ 14,361 $ 16,377

Other Businesses 150 162 499 507

Total revenues $ 4,569 $ 5,605 $ 14,860 $ 16,884

Adjusted EBITDA:

Steelmaking $ 113 $ 603 $ 814 $ 1,608

Other Businesses 8 9 43 32

Eliminations 3 2 4 ( 8 )

Our CODM, Lourenco Goncalves, Chairman, President and CEO, evaluates performance on an operating segment basis, as well as a consolidated basis, based on Adjusted EBITDA, which is a non-GAAP measure.

This measure is used by our CODM, management, investors, lenders and other external users of our financial statements to assess our operating performance and to compare operating performance to other companies in the steel industry.

In addition, our CODM 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 tables provide our results by segment as well as a reconciliation from consolidated Adjusted EBITDA to our consolidated Net income (loss) :

Three Months Ended March 31, 2025

(In millions) Steelmaking Other Businesses Eliminations Total

Revenues $ 4,495 $ 162 $ ( 28 ) $ 4,629

Cost of goods sold ( 4,895 ) ( 153 ) 28 ( 5,020 )

Selling, general and administrative expenses ( 126 ) ( 7 ) — ( 133 )

Net periodic benefit credits other than service cost component 57 — — 57

Excluding depreciation, depletion and amortization 274 8 — 282

Other segment items 1

Total Adjusted EBITDA $ ( 184 ) $ 10 $ — $ ( 174 )

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023 2024 2023

Net income (loss) $ ( 230 ) $ 275 $ ( 274 ) $ 589

Interest expense, net ( 140 )

Income tax benefit (expense) 76 ( 29 ) 99 ( 118 )

Income tax benefit 147

Depreciation, depletion and amortization ( 282 )

Total EBITDA 31 623 555 1,671

EBITDA of noncontrolling interests 1

EBITDA from noncontrolling interests 2

Weirton indefinite idle ( 3 )

( 2 ) — ( 219 ) —

Loss on extinguishment of debt — — ( 27 ) —

Acquisition-related costs ( 14 ) ( 3 ) ( 14 ) ( 5 )

Changes in fair value of foreign currency contracts, net ( 7 ) — ( 7 ) —

Arbitration decision ( 71 ) — ( 71 ) —

Idled facilities employment charges ( 41 )

Changes in fair value of derivatives, net ( 9 )

Amortization of inventory step-up 7

Other, net ( 6 )

Net loss $ ( 483 )

Capital Additions $ 123 $ 6 $ — $ 129

1 Other segment items primarily consists of the exclusion of EBITDA of noncontrolling interests and idled facilities employment charges from Adjusted EBITDA and the inclusion of items within Miscellaneous – net and Other non-operating income (loss).

2 EBITDA of noncontrolling interests includes net income attributable to noncontrolling interests of $ 12 million and the exclusion of depreciation, depletion, and amortization of $ 6 million.

Three Months Ended March 31, 2024

(In millions) Steelmaking Other Businesses Eliminations Total

Revenues $ 5,053 $ 172 $ ( 26 ) $ 5,199

Cost of goods sold ( 4,785 ) ( 157 ) 28 ( 4,914 )

Selling, general and administrative expenses ( 125 ) ( 7 ) — ( 132 )

Net periodic benefit credits other than service cost component 60 — — 60

Excluding depreciation, depletion and amortization 222 8 — 230

Other segment items 1

( 30 ) 1 — ( 29 )

Total Adjusted EBITDA $ 395 $ 17 $ 2 $ 414

1 EBITDA of noncontrolling interests includes the following:

Net income attributable to noncontrolling interests $ 12 $ 11 $ 33 $ 35

Depreciation, depletion and amortization 8 9 23 25

EBITDA of noncontrolling interests $ 20 $ 20 $ 56 $ 60

2 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for further information.

The following table summarizes our depreciation, depletion and amortization and capital additions by segment:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023 2024 2023

Interest expense, net ( 64 )

Income tax benefit 8

Depreciation, depletion and amortization ( 230 )

Steelmaking $ ( 228 ) $ ( 241 ) $ ( 669 ) $ ( 711 )

Other Businesses ( 7 ) ( 8 ) ( 24 ) ( 27 )

Total depreciation, depletion and amortization $ ( 235 ) $ ( 249 ) $ ( 693 ) $ ( 738 )

EBITDA from noncontrolling interests 2

Weirton indefinite idle ( 177 )

Loss on extinguishment of debt ( 21 )

Other, net ( 4 )

Net loss $ ( 53 )

Capital Additions $ 156 $ 1 $ — $ 157

Steelmaking $ 211 $ 217 $ 554 $ 503

Other Businesses — — 3 3

Corporate — 1 — 2

Total capital additions $ 211 $ 218 $ 557 $ 508

1 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for additional information.

1 Other segment items primarily consists of the exclusion of EBITDA of noncontrolling interests from Adjusted EBITDA and the inclusion of items within Miscellaneous – net and Other non-operating income (loss).

2 EBITDA of noncontrolling interests includes net income attributable to noncontrolling interests of $ 14 million and the exclusion of depreciation, depletion, and amortization of $ 7 million.

The following summarizes our assets by segment:

(In millions) September 30,

(In millions) March 31,

2025 December 31,

1 unchanged sentence

Other Businesses 636 620

Intersegment eliminations ( 489 ) ( 507 )

Total segment assets $ 20,836 $ 20,947

Corporate 413 507

Total assets $ 16,796 $ 17,537

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

The following table indicates the carrying value of each of the major classes of our depreciable assets:

(In millions) September 30,

(In millions) March 31,

2025 December 31,

8 unchanged sentences

Property, plant and equipment, net $ 9,797 $ 9,942

1 Includes right-of-use assets related to finance leases of $ 358 million and $ 306 million as of September 30, 2024 and December 31, 2023, respectively.

We recorded depreciation and depletion expense of $ 233 million and $ 687 million for the three and nine months ended September 30, 2024, respectively, and $ 247 million and $ 732 million for the three and nine months ended September 30, 2023, respectively.

During the first quarter of 2024, we announced the indefinite idle of our Weirton tinplate production plant, which resulted in a $ 46 million impairment charge to Property, plant and equipment, net .

1 Includes right-of-use assets related to finance leases of $ 528 million and $ 505 million as of March 31, 2025 and December 31, 2024, respectively.

We recorded depreciation and depletion expense of $ 264 million and $ 227 million for the three months ended March 31, 2025 and 2024, respectively.

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES

The following is a summary of Goodwill by segment:

(In millions) September 30,

(In millions) March 31,

2025 December 31,

2 unchanged sentences

Total goodwill $ 1,767 $ 1,768

The decrease of $ 1 million in the balance of Goodwill in our Steelmaking segment as of March 31, 2025, compared to December 31, 2024, is due to the change in estimated identified goodwill as a result of measurement period adjustments to the preliminary purchase price allocation for the acquisition of Stelco.

Refer to NOTE 3 - ACQUISITIONS for further details.

INTANGIBLE ASSETS AND LIABILITIES

The following is a summary of our intangible assets and liabilities:

September 30, 2024

March 31, 2025

December 31, 2024

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1 Intangible assets are classified as Other non-current assets.

Amortization related to mining permits is recognized in Cost of goods sold .

Amortization related to mining permits and supplier relationships is recognized in Cost of goods sold .

Amortization of all other intangible assets is recognized in Selling, general and administrative expenses.

1 unchanged sentence

Amortization of all intangible liabilities is recognized in Cost of goods sold .

Amortization expense related to intangible assets was $ 3 million for both the three months ended September 30, 2024 and 2023, and $ 10 million for both the nine months ended September 30, 2024 and 2023.

Amortization expense related to Intangible assets was $ 19 million and $ 4 million for the three months ended March 31, 2025 and 2024, respectively.

Estimated future amortization expense is $ 59 million for the remainder of 2025 and $ 79 million annually for the years 2026 through 2030.

Income from amortization related to the intangible liabilities was $ 1 million for both the three months ended September 30, 2024 and 2023, and $ 4 million for both the nine months ended September 30, 2024 and 2023.

Income from amortization related to the intangible liabilities was $ 1 million for each of the three months ended March 31, 2025 and 2024.

Estimated future income from amortization is $ 4 million for the remainder of 2025 and $ 5 million annually for the years 2026 through 2030.

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Annual Effective

Interest Rate September 30,

Interest Rate March 31,

2025 December 31,

Senior Secured Notes:

6.750 % 2026 Senior Secured Notes

Cliffs 6.990 % $ — $ 829

Senior Unsecured Notes:

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Cliffs 7.500 % 850 —

7.000 % 2032 Senior Notes

Cliffs 7.054 % 1,425 1,425

7.375 % 2033 Senior Notes

Cliffs 7.375 % 900 900

6.250 % 2040 Senior Notes

Cliffs 6.340 % 235 235

ABL Facility Cliffs 2

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as borrower under our ABL Facility.

3 Our ABL Facility annual effective interest rate was 8.25 % as of September 30, 2024.

Any incremental borrowings on our ABL Facility, as of September 30, 2024, would have had an interest rate between 5.63 % and 8.25 %.

3 Our ABL Facility annual effective interest rate was 5.68 % as of March 31, 2025.

7.500% 2031 SENIOR NOTES OFFERING

On March 18, 2024, we entered into an indenture among Cliffs, the guarantors party thereto and U.S.

On February 6, 2025, we entered into an indenture among Cliffs, the guarantors party thereto and U.S.

Bank Trust Company, National Association, as trustee, relating to the issuance of $ 850 million aggregate principal amount of our 7.500% 2031 Senior Notes, which were issued at par.

The 7.500 % 2031 Senior Notes were issued in a private placement transaction exempt from the registration requirements of the Securities Act.

On August 16, 2024, we issued an additional $ 600 million aggregate principal amount of our 7.000% 2032 Senior Notes in a private placement transaction exempt from the registration requirements of the Securities Act.

These additional notes were issued at a price of 99.25 % of their principal amount.

Furthermore, the additional notes are treated as the same class and series as the initial notes issued on March 18, 2024, other than with respect to the date of issuance and issue price.

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

The 7.500% 2031 Senior Notes bear interest at a rate of 7.500% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2025.

The 7.000% 2032 Senior Notes mature on March 15, 2032.

The 7.500% 2031 Senior Notes mature on September 15, 2031.

The 7.500% 2031 Senior Notes are unsecured senior obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness.

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however, there are no financial covenants.

On July 31, 2024 and September 13, 2024, in connection with the Stelco Acquisition, we entered into the fifth and sixth amendments to our ABL Facility, respectively.

The amendments, among other things, (i) amend the normal conditions for borrowing loans to allow for the Stelco Acquisition and permit additional borrowings for the purpose of financing a portion of the Stelco Acquisition purchase price, and (ii) subsequent to the Stelco Acquisition and the satisfaction of customary conditions, divide the existing $ 4.75 billion of aggregate lending commitments under our ABL Facility into two tranches, (x) a $ 4.25 billion tranche of lending commitments available to be borrowed by the Company and certain U.S.

subsidiaries of the Company that are designated as borrowers from time to time in accordance with the ABL Facility and (y) a $ 500 million tranche of lending commitments available to be borrowed by certain Canadian subsidiaries of the Company that are designated as borrowers from time to time in accordance with the ABL Facility.

As of September 30, 2024, we were in compliance with the ABL Facility liquidity requirements and, therefore, the springing financial covenant requiring a minimum fixed charge coverage ratio of 1.0 to 1.0 was not applicable.

As of March 31, 2025, we were in compliance with the ABL Facility liquidity requirements and, therefore, the springing financial covenant requiring a minimum fixed charge coverage ratio of 1.0 to 1.0 was not applicable.

The following represents a summary of our borrowing capacity under the ABL Facility:

(In millions) September 30,

(In millions) March 31,

Available borrowing base on ABL Facility 1

2 unchanged sentences

Borrowing capacity available $ 2,926

1 As of September 30, 2024, the ABL Facility has a maximum available borrowing base of $ 4.75 billion.

1 As of March 31, 2025, the ABL Facility has a maximum available borrowing base of $ 4.75 billion.

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

2 We issued standby letters of credit with certain financial institutions in order to support business obligations, including, but not limited to, operating agreements, employee severance, environmental obligations, workers' compensation and insurance obligations.

COMMITMENT LETTER

In the third quarter of 2024, we entered into a Commitment Letter under which a syndicate of banks committed to provide us with up to $ 3.3 billion of financing under a Bridge Facility to finance the Stelco Acquisition.

Per terms outlined in the Commitment Letter, the Bridge Facility was subsequently reduced to $ 2.4 billion at September 13, 2024, the effective date of the sixth amendment to the ABL Facility.

As of September 30, 2024, the Bridge Facility was available in a single draw on the closing date of the Stelco Acquisition and had a maturity date 364 days after the closing date.

The Bridge Facility is also subject to further reductions as outlined in the Commitment Letter, including reductions equal to 100% of the net cash proceeds from any issuance of senior notes.

The Bridge Facility commitment terminates on the earliest of (i) five business days after April 14, 2025 (or as such date may be extended under the terms of the Arrangement Agreement), (ii) the consummation of the Stelco Acquisition and (iii) the date that the Arrangement Agreement is terminated or expires in accordance with its terms without the closing of the Stelco Acquisition.

See NOTE 18 - SUBSEQUENT EVENTS for further information.

DEBT EXTINGUISHMENTS

On March 18, 2024, we used a portion of the net proceeds from the initial 7.000% 2032 Senior Notes issuance to repurchase $ 640 million in aggregate principal amount of our 6.750 % 2026 Senior Secured Notes pursuant to a tender offer.

On April 3, 2024, we redeemed the remaining $ 189 million in aggregate principal amount of our then-outstanding 6.750% 2026 Senior Secured Notes with the remaining portion of the net proceeds from the initial 7.000% 2032 Senior Notes issuance and available liquidity.

DEBT MATURITIES

The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at September 30, 2024 (in millions):

The following represents a summary of our maturities of debt instruments based on the principal amounts outstanding at March 31, 2025 (in millions):

2025 2026 2027 2028 2029 Thereafter Total

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Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

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Prior service costs 4 4

Net actuarial loss — — — 2

Net actuarial gain ( 2 ) —

Net periodic benefit credits $ ( 17 ) $ ( 14 )

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

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1 The termination benefits relate to the announcement of the indefinite idle of our Weirton tinplate production plant.

Based on funding requirements, we made $ 75 million and $ 91 million of defined benefit pension contributions for the three and nine months ended September 30, 2024, respectively.

Based on funding requirements, we made nominal defined benefit pension contributions for the three and nine months ended September 30, 2023.

Based on funding requirements, we made no contributions to our voluntary employee benefit association trust plans for both the three and nine months ended September 30, 2024 and 2023.

Based on funding requirements, we made $ 15 million and a nominal amount of defined benefit pension contributions for the three months ended March 31, 2025 and 2024, respectively.

Based on funding requirements, we made no contributions to our voluntary employee benefit association trust plans for both the three months ended March 31, 2025 and 2024.

NOTE 10 - INCOME TAXES

Our income tax benefit for the three and nine months ended September 30, 2024 is $ 76 million and $ 99 million, respectively, compared to income tax expense of $ 29 million and $ 118 million for the three and nine months ended September 30, 2023, respectively, changed primarily due to depletion in excess of state income tax expense and the impact of immaterial discrete items relative to changes in pre-tax income.

NOTE 10 - ASSET RETIREMENT OBLIGATIONS

Our income tax benefit for the three months ended March 31, 2025 was $ 147 million, compared to income tax benefit of $ 8 million for the three months ended March 31, 2024, primarily due to an increase in Loss before income taxes and the impact of immaterial discrete items relative to those losses.

NOTE 11 - ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS

The accrued closure obligation provides for contractual and legal obligations related to our indefinitely idled and closed operations and for the eventual closure of our active operations.

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For indefinitely idled or closed mines, the accretion of the liability is recognized over the anticipated timing of remediation.

Asset retirement obligations at our active steelmaking operations primarily include the closure and post-closure care for on-site landfills and other waste containment facilities.

Asset retirement obligations at our steelmaking operations primarily include the closure and post-closure care for on-site landfills and other waste containment facilities.

Asset retirement obligations have been recorded at present values using settlement dates based on when we expect these facilities to reach capacity and close.

The following is a summary of our asset retirement obligations:

(In millions) September 30,

(In millions) March 31,

2025 December 31,

2 unchanged sentences

Long-term asset retirement obligations $ 506 $ 501

1 Includes $ 269 million and $ 259 million related to our active operations as of September 30, 2024 and December 31, 2023, respectively.

1 Includes $ 305 million and $ 302 million related to our active operations as of March 31, 2025 and December 31, 2024, respectively.

The following is a roll-forward of our asset retirement obligations:

4 unchanged sentences

Remediation payments ( 8 ) ( 2 )

Asset retirement obligations as of September 30 $ 501 $ 522

Asset retirement obligations as of March 31 $ 525 $ 510

During the first quarter of 2024, we announced the indefinite idle of our Weirton tinplate production plant, resulting in an increase to our asset retirement obligations as a result of acceleration of the timing and refinement in the cost of required remediation.

ENVIRONMENTAL OBLIGATIONS

Our operations currently use, and have in the past used, hazardous materials and substances, and we have generated, and expect to continue to generate, solid and hazardous waste.

We have been, and may in the future be, subject to claims under laws and regulations for toxic torts, natural resource damages and other damages, as well as for the investigation and clean-up of soil, surface water, sediments, groundwater, and other natural resources and reclamation of properties.

If we reasonably can, we estimate potential remediation expenditures for those sites where future remediation efforts are probable based on identified conditions, regulatory requirements, or contractual obligations arising from the sale of a business or facility.

For sites involving government required investigations, including pursuant to RCRA and CERCLA, we typically make an estimate of potential remediation expenditures only after the investigation is complete and when we better understand the nature and scope of the remediation.

In general, the material factors in these estimates include the costs associated with investigations, delineations, risk assessments, remedial work, governmental response and oversight, site monitoring and preparation of reports to the appropriate environmental agencies.

The following is a summary of our environmental obligations:

(In millions) March 31,

2025 December 31,

Environmental obligations $ 113 $ 114

current portion 11 14

Long-term environmental obligations $ 102 $ 100

NOTE 12 - FAIR VALUE MEASUREMENTS

2 unchanged sentences

A summary of the carrying value and fair value of other financial instruments were as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(In millions) Valuation Hierarchy Classification Carrying

4 unchanged sentences

The valuation of the financial asset classified in Level 2 was determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.

EMPLOYEE BENEFIT COMMITMENT

In connection with the Stelco Acquisition, we have acquired funding commitments to employee life and health trusts.

These obligations pertain to plans previously sponsored by Stelco prior to its bankruptcy.

The commitments primarily involve fixed scheduled payments that will continue until 2042, with an additional variable component tied to Stelco's standalone operating performance.

The financial liability is recorded at fair value on a recurring basis using a discounted cash flow model, which incorporates observable and unobservable inputs for risk-free interest rates and future operating estimates.

The liability is classified as a Level 3 within the fair value hierarchy.

The current and non-current portions of the employee benefit commitment are classified within Other current liabilities and Other non-current liabilities on the Statements of Consolidated Financial Position, respectively.

The following table summarizes the changes in fair value of the employee benefit commitment:

(In millions) 2025

Beginning balance as of January 1 $ ( 188 )

Change in fair value ( 2 )

Ending balance as of March 31 $ ( 185 )

MINNTAC OPTION

Stelco is party to an option to purchase a 25 % ownership interest in the MinnTac iron ore mine and related infrastructure located in Mt.

Iron, Minnesota from U.

Steel for $ 500 million.

This option is exercisable by Stelco at any time until January 31, 2027.

This option is recorded as a derivative instrument at fair value on a recurring basis and included within Other non-current assets on the Statements of Consolidated Financial Position.

Any gain or loss recorded in relation to the fair value of this option is presented within Other non-operating income (loss).

The fair value of the derivative asset is estimated using the Black-Scholes option pricing model, which incorporates observable or unobservable inputs for risk-free interest rates, foreign exchange rates, commodity prices, discount rates, corresponding market volatility levels and other market-based pricing factors.

This option is classified as a Level 3 derivative asset within the fair value hierarchy.

The following table summarizes the changes in fair value of the MinnTac option:

(In millions) 2025

Beginning balance as of January 1 $ 95

Change in fair value ( 9 )

Ending balance as of March 31 $ 86

NOTE 13 - DERIVATIVE INSTRUMENTS AND HEDGING

COMMODITY CONTRACTS

We are exposed to fluctuations in market prices of raw materials and energy sources.

We may use cash-settled commodity swaps to hedge the market risk associated with the purchase of certain of our raw materials and energy requirements.

Our hedging strategy is to reduce the effect on earnings from the price volatility of these various commodity exposures.

Our commodity contracts are designated as cash flow hedges for accounting purposes, and we record the gains and losses for the derivatives in Accumulated other comprehensive income until we reclassify them into Cost of goods sold when we recognize the associated underlying operating costs.

Impacts of our designated commodity contracts are reflected within Other, net in the Statements of Unaudited Condensed Consolidated Cash Flows.

We are exposed to price risk associated with fluctuations in the market prices of purchased raw materials and energy sources and the sales price of certain steel products.

We may use cash-settled commodity purchase swaps to hedge the market risk associated with the purchase of certain of our raw materials and energy requirements and cash-settled sales swaps to hedge the sales price risk of certain steel products.

Our hedging strategy is to reduce the effect on earnings from the price volatility of these various exposures.

Our commodity purchase swaps and sales swaps are designated as cash flow hedges for accounting purposes, and we record the gains and losses for the derivatives in Accumulated other comprehensive income until we reclassify them into Cost of goods sold when we recognize the associated underlying operating costs or Revenues when we recognize the associated underlying sale .

Impacts of our designated commodity purchase swaps and sales swaps are reflected within Other, net in the Statements of

Unaudited Condensed Consolidated Cash Flows.

Refer to NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE INCOME for further information.

Our commodity contracts are classified as Level 2 as values were determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.

Our commodity purchase swaps and sales swaps are classified as Level 2 as values were determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.

The following table presents the notional amount of our outstanding hedge contracts:

Notional Amount

Commodity Contracts Unit of Measure Maturity Dates September 30,

Hedge Contract Type Classification Unit of Measure Maturity Dates March 31,

2025 December 31,

Natural Gas MMBtu October 2024 - August 2027 157,430,000 168,590,000

Electricity Megawatt hours October 2024 - October 2027 3,499,413 3,501,898

At September 30, 2024, we estimate $ 97 million of net losses related to our hedge contracts will reclassify from Accumulated other comprehensive income into Cost of goods sold during the next 12 months.

These estimates are based on September 30, 2024 fair values, some of which will change before their actual reclassification into Cost of goods sold.

Natural Gas Commodity purchase swaps MMBtu April 2025 - August 2027 120,600,000 143,250,000

Electricity Commodity purchase swaps Megawatt hours April 2025 - October 2027 2,729,940 3,224,227

HRC Sales swaps Metric tons April 2025 - August 2025 395,000 —

At March 31, 2025, we estimate $ 37 million of net gains and $ 8 million of net losses related to our hedge contracts will be reclassified from Accumulated other comprehensive income into Cost of goods sold and Revenues, respectively, during the next 12 months.

These estimates are based on March 31, 2025 fair values, some of which will change before their actual reclassification into Cost of goods sold and Revenues.

The following table presents the fair value of our outstanding cash flow hedges and the classification in the Statements of Unaudited Condensed Consolidated Financial Position:

Balance Sheet Location (In millions) September 30,

Balance Sheet Location (In millions) March 31,

2025 December 31,

3 unchanged sentences

Other non-current liabilities — ( 6 )

FOREIGN CURRENCY CONTRACTS

On July 15, 2024, we announced that we had entered into the Arrangement Agreement with Stelco to acquire all of its common shares in a cash and stock transaction valued, at the time, at approximately $ 2.5 billion.

We hedged a portion of the purchase price by entering into foreign currency option contracts with a notional amount of $ 1.5 billion as of September 30, 2024 with a maturity date of October 15, 2024.

Our foreign currency contracts are classified as Level 2 as values were determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.

These hedge contracts are considered economic hedges and do not qualify for hedge accounting.

As a result, the hedge contracts are recorded at fair value as a derivative asset or liability on the Statements of Unaudited Condensed Consolidated Financial Position with their corresponding change in fair value recognized in Other (income) expense .

These options had a fair value of $ 3 million at September 30, 2024 and are included in Other Current Assets on the Statements of Unaudited Condensed Consolidated Financial Position.

During the three and nine months ended September 30, 2024, these contracts resulted in a loss of $ 7 million presented in Changes in fair value of foreign currency contracts, net.

NOTE 14 - CAPITAL STOCK

1 unchanged sentence

During the first quarter of 2024, we fully utilized the remaining portion of our prior $ 1 billion share repurchase program, which was approved by our Board of Directors on February 10, 2022.

On April 22, 2024, our Board of Directors authorized a new 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.

During the second quarter of 2024, our Board of Directors authorized a new 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.

During the three months ended September 30, 2024, we did not repurchase any common shares.

During the nine months ended September 30, 2024, we repurchased 37.9 million common shares at an aggregate cost of $ 733 million, excluding any excise tax due under the Inflation Reduction Act.

During the three and nine months ended September 30, 2023, we repurchased 3.9 million and 10.4 million common shares, respectively, at a cost of $ 58 million and $ 152 million in the aggregate, respectively.

As of September 30, 2024, there was approximately $ 1.4 billion remaining authorization under our active share repurchase program.

During the three months ended March 31, 2025, we did not repurchase any common shares.

During the three months ended March 31, 2024, we repurchased 30.4 million common shares at an aggregate cost of $ 608 million, excluding any excise tax due under the Inflation Reduction Act.

As of March 31, 2025, there was $ 1.4 billion remaining authorization under our active share repurchase program.

PREFERRED STOCK

1 unchanged sentence

No preferred shares are issued or outstanding.

STELCO ACQUISITION

As more fully described in NOTE 3 - ACQUISITIONS, we completed the Stelco Acquisition on November 1, 2024.

At closing, each Stelco shareholder received CAD $ 60.00 in cash and 0.454 shares of Cliffs common stock per share of Stelco common stock.

Additionally, Stelco equity award holders received CAD $ 60.00 in cash and 0.454 shares of Cliffs common stock per outstanding restricted share unit and deferred share unit.

As a result of the Stelco Acquisition, we issued a total of 25.9 million Cliffs treasury shares at a fair value of $ 343 million.

NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE INCOME

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2025 2024

1 unchanged sentence

Beginning balance $ ( 70 ) $ —

Other comprehensive gain before reclassifications 1 — — —

Other comprehensive income (loss) before reclassifications 1 ( 1 )

Ending balance $ ( 69 ) $ ( 1 )

1 unchanged sentence

Beginning balance $ ( 53 ) $ ( 170 )

Other comprehensive loss before reclassifications ( 36 ) ( 21 ) ( 67 ) ( 229 )

Other comprehensive income (loss) before reclassifications 101 ( 33 )

Income tax (benefit) ( 24 ) 8

Other comprehensive loss before reclassifications, net of tax ( 27 ) ( 16 ) ( 50 ) ( 173 )

Losses reclassified from AOCI to net income (loss) 1

Other comprehensive income (loss) before reclassifications, net of tax 77 ( 25 )

Losses reclassified from AOCI to net loss 1

Income tax benefit 2

( 9 ) ( 16 ) ( 39 ) ( 23 )

Net losses reclassified from AOCI to net income (loss) 29 47 119 70

Net losses reclassified from AOCI to net loss 24 45

Ending balance $ 48 $ ( 150 )

1 unchanged sentence

Beginning balance $ 1,660 $ 1,827

Gains reclassified from AOCI to net income (loss) 3

Gains reclassified from AOCI to net loss 3

( 35 ) ( 38 )

Income tax expense 2

Net gains reclassified from AOCI to net income (loss) ( 29 ) ( 27 ) ( 86 ) ( 80 )

Net gains reclassified from AOCI to net loss ( 27 ) ( 28 )

Ending balance $ 1,633 $ 1,799

Total AOCI Ending Balance $ 1,612 $ 1,648

1 Amounts recognized in Cost of goods sold in the Statements of Unaudited Condensed Consolidated Operations.

2 Amounts recognized in Income tax benefit (expense) in the Statements of Unaudited Condensed Consolidated Operations.

1 Amounts recognized in Cost of goods sold for commodity purchase swaps within the Statements of Unaudited Condensed Consolidated Operations.

2 Amounts recognized in Income tax benefit in the Statements of Unaudited Condensed Consolidated Operations.

3 Amounts recognized in Net periodic benefit credits other than service cost component in the Statements of Unaudited Condensed Consolidated Operations.

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We consolidate SunCoke Middletown as a VIE because we are the primary beneficiary despite having no ownership interest in SunCoke Middletown.

SunCoke Middletown had income before income taxes of $ 14 million and $ 38 million for the three and nine months ended September 30, 2024, respectively, compared to $ 13 million and $ 40 million for the three and nine months ended September 30, 2023, respectively, that was included in our consolidated income before income taxes.

Additionally, SunCoke Middletown had cash used for capital expenditures of $ 20 million for the nine months ended September 30, 2024, compared to $ 21 million for the nine months ended September 30, 2023, that was included in our consolidated Purchase of property, plant and equipment on the Statements of Unaudited Condensed Consolidated Cash Flows.

SunCoke Middletown had income before income taxes of $ 15 million for both the three months ended March 31, 2025 and 2024, that was included in our consolidated Loss before income taxes .

Additionally, SunCoke Middletown had cash used for capital expenditures of a nominal amount and $ 4 million for the three months ended March 31, 2025 and 2024, respectively, that are included in our consolidated Purchase of property, plant and equipment on the Statements of Unaudited Condensed Consolidated Cash Flows.

The assets of the consolidated VIE can only be used to settle the obligations of the consolidated VIE and not obligations of the Company.

1 unchanged sentence

The Statements of Unaudited Condensed Consolidated Financial Position includes the following amounts for SunCoke Middletown:

(In millions) September 30,

(In millions) March 31,

2025 December 31,

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Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions, except per share amounts) 2025 2024

Income (loss) from continuing operations $ ( 230 ) $ 274 $ ( 274 ) $ 587

Income from continuing operations attributable to noncontrolling interests ( 12 ) ( 11 ) ( 33 ) ( 35 )

Net income (loss) from continuing operations attributable to Cliffs shareholders ( 242 ) 263 ( 307 ) 552

Income from discontinued operations, net of tax — 1 — 2

Net income (loss) attributable to Cliffs shareholders $ ( 242 ) $ 264 $ ( 307 ) $ 554

Net loss $ ( 483 ) $ ( 53 )

Net income attributable to noncontrolling interests ( 12 ) ( 14 )

Net loss attributable to Cliffs shareholders $ ( 495 ) $ ( 67 )

Weighted average number of shares:

2 unchanged sentences

Diluted 495 492

Earnings (loss) per common share attributable to Cliffs shareholders - basic:

Continuing operations $ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Discontinued operations — — — —

$ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Earnings (loss) per common share attributable to Cliffs shareholders - diluted:

Continuing operations $ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

Discontinued operations — — — —

$ ( 0.52 ) $ 0.52 $ ( 0.64 ) $ 1.08

1 Excluded from the diluted EPS calculation are anti-dilutive shares related to employee stock plans.

For both the three and nine months ended September 30, 2024 2 million shares were excluded.

For both the three and nine months ended September 30, 2023 2 million shares were excluded.

Loss per common share attributable to Cliffs shareholders:

Basic $ ( 1.00 ) $ ( 0.14 )

Diluted $ ( 1.00 ) $ ( 0.14 )

1 For both the three months ended March 31, 2025 and 2024, 2 million potentially dilutive shares were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive.

NOTE 18 - COMMITMENTS AND CONTINGENCIES

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We purchase portions of the principal raw materials required for our steel manufacturing operations under annual and multi-year agreements, some of which have minimum quantity requirements.

We also use large volumes of natural gas, electricity and industrial gases in our steel manufacturing operations.

We also use large volumes of natural gas, electricity and industrial gases in our operations.

We negotiate most of our purchases of chrome, industrial gases and a portion of our electricity under multi-year agreements.

Our purchases of coke are made under annual or multi-year agreements with periodic price adjustments.

Our purchases of coke and iron ore are made under annual or multi-year agreements with periodic price adjustments.

We typically purchase coal under annual fixed price agreements.

2 unchanged sentences

We use surety bonds and letters of credit to provide financial assurance for certain obligations and statutory requirements.

As of September 30, 2024, we had $ 270 million of surety-backed letters of credit and surety bonds outstanding.

Additionally, as of September 30, 2024, we had $ 46 million of outstanding letters of credit issued under our ABL Facility.

As of March 31, 2025, we had $ 261 million of surety-backed letters of credit and surety bonds outstanding.

Additionally, as of March 31, 2025, we had $ 55 million of outstanding letters of credit issued under our ABL Facility.

CONTINGENCIES

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ENVIRONMENTAL CONTINGENCIES

Although we believe our operating practices have been consistent with prevailing industry standards, hazardous materials may have been released at operating sites or third-party sites in the past, including operating sites that we no longer own.

For sites involving government required investigations, we typically estimate potential remediation expenditures only after the investigation is complete and when we better understand the nature and scope of the remediation.

In general, the material factors in these estimates include the costs associated with investigations, delineations, risk assessments, remedial work, governmental response and oversight, site monitoring, and preparation of reports to the appropriate environmental agencies.

The following is a summary of our environmental obligations:

(In millions) September 30,

2024 December 31,

Environmental obligations $ 128 $ 134

current portion 16 21

Long-term environmental obligations $ 112 $ 113

We cannot predict the ultimate costs for each site with certainty because of the evolving nature of the investigation and remediation process.

Our environmental remediation obligations for known environmental matters at active and closed operations have been recognized based on estimates of the cost of investigation and remediation at each facility.

We cannot predict the ultimate costs for each site

with certainty because of the evolving nature of the investigation and remediation process.

Rather, to estimate the probable costs, we must make certain assumptions.

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Costs for future investigation and remediation are not discounted to their present value, unless the amount and timing of the cash disbursements are readily known.

To the extent that we have been able to reasonably estimate future liabilities, we do not believe that there is a reasonable possibility that we will incur a loss or losses that exceed the amounts we accrued for the environmental matters discussed below that would, either individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

To the extent that we have been able to reasonably estimate future liabilities, we do not believe that there is a reasonable possibility that we will incur a loss or losses that exceed the amounts we accrued that would, either individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

However, since we recognize amounts in the consolidated financial statements in accordance with GAAP that exclude potential losses that are not probable or that may not be currently estimable, the ultimate costs of these environmental matters may be higher than the liabilities we currently have recorded in our consolidated financial statements.

Pursuant to the Resource Conservation and Recovery Act, which governs the treatment, handling and disposal of hazardous waste, the EPA and authorized state environmental agencies may conduct inspections of Resource Conservation and Recovery Act-regulated facilities to identify areas where there have been releases of hazardous waste or hazardous constituents into the environment and may order the facilities to take corrective action to remediate such releases.

Pursuant to RCRA, which governs the treatment, handling and disposal of hazardous waste, the EPA and authorized state environmental agencies may conduct inspections of RCRA-regulated facilities to identify areas where there have been releases of hazardous waste or hazardous constituents into the environment and may order the facilities to take corrective action to remediate such releases.

Likewise, the EPA or the states may require closure or post-closure care of residual, industrial and hazardous waste management units.

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While we cannot predict the future actions of these regulators, it is possible that they may identify conditions in future inspections of these facilities that they believe require corrective action.

Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the EPA and state environmental authorities have conducted site investigations at some of our facilities and other third-party facilities, portions of which previously may have been used for disposal of materials that are currently regulated.

The results of certain of these investigations are still pending, and we could be directed to spend funds for remedial activities at the former disposal areas.

Pursuant to CERCLA, the EPA and state environmental authorities have conducted site investigations at some of our facilities and other third-party facilities, portions of which previously may have been used for disposal of materials that are currently regulated.

The results of certain of these investigations remain pending, and we could be directed to spend funds for remedial activities at the former disposal areas.

Because of the uncertain status of these investigations, however, we cannot reasonably predict whether or when such spending might be required or its magnitude.

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A favorable tax settlement would be recognized as a reduction in our effective tax rate in the year of resolution.

Refer to NOTE 11 - INCOME TAXES for further information.

OTHER CONTINGENCIES

In addition to the matters discussed above, there are various pending and potential claims against us and our subsidiaries involving product liability, personal injury, commercial, employee benefits and other matters arising in the ordinary course of business.

In addition to the matters discussed above, there are various pending and potential claims against us and our subsidiaries involving antitrust, product liability, personal injury, commercial, employee benefits and other matters arising in the ordinary course of business.

Because of the considerable uncertainties that exist for any claim, it is difficult to reliably or accurately estimate what the amount of a loss would be if a claimant prevails.

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NOTE 19 - SUBSEQUENT EVENTS

On October 22, 2024, we issued $ 900 million aggregate principal amount of 6.875 % 2029 Senior Guaranteed Notes and $ 900 million aggregate principal amount of 7.375 % 2033 Senior Guaranteed Notes in a private placement transaction that was exempt from the registration requirements of the Securities Act.

The completion of the notes offering further reduced the Bridge Facility by $ 1.8 billion.

The net proceeds from the notes offering were used to finance a portion of the cash consideration paid in connection with the Stelco Acquisition.

On November 1, 2024, pursuant to the terms of the Arrangement Agreement announced on July 15, 2024, we completed the Stelco Acquisition.

In connection with closing, Stelco shareholders received CAD $ 60.00 in cash and 0.454 shares of Cliffs common stock per share of Stelco common stock.

Additionally, Stelco equity award holders received CAD $ 60.00 in cash and 0.454 shares of Cliffs common stock per outstanding restricted share unit and deferred share unit.

The total purchase consideration of the Stelco Acquisition was approximately $ 3.2 billion.

Additionally, pursuant to the terms outlined in the Commitment Letter, the Bridge Facility was terminated concurrently with the completion of the acquisition.

The Stelco Acquisition will be accounted for using the acquisition method of accounting for business combinations pursuant to ASC 805 - Business Combinations , which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date.

Any excess of consideration to be transferred over the estimated fair value of assets acquired and liabilities assumed will be recorded as goodwill.

Determining the fair value of acquired assets and liabilities assumed requires management’s judgment and the use of independent valuation specialists.

At the time of this filing, it is impracticable to disclose all the information required by ASC 805 - Business Combinations , as we are in the process of evaluating the purchase accounting and pro forma implications of this transaction.

In the second quarter of 2025, it was determined we will idle our Conshohocken, Riverdale, and Steelton plants due to financial underperformance at these operations.

We are currently assessing the financial impacts on the remainder of 2025 related to these idles, as well as the Minorca, Hibbing and Dearborn idles, which could be material.

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-Q

Item 1. Financial Statements