Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
(In millions, except share information) March 31,
2025 December 31,
2024
ASSETS
Current assets:
Cash and cash equivalents $ 57 $ 54
Accounts receivable, net 1,798 1,576
Inventories 4,886 5,094
Other current assets 223 183
Total current assets 6,964 6,907
Non-current assets:
Property, plant and equipment, net 9,797 9,942
Goodwill 1,767 1,768
Intangible assets 1,150 1,170
Pension and OPEB assets 443 427
Other non-current assets 715 733
TOTAL ASSETS $ 20,836 $ 20,947
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 2,020 $ 2,008
Accrued employment costs 443 447
Accrued expenses 361 375
Other current liabilities 442 492
Total current liabilities 3,266 3,322
Non-current liabilities:
Long-term debt 7,601 7,065
Pension and OPEB liabilities 711 751
Deferred income taxes 723 858
Asset retirement and environmental obligations 609 601
Other non-current liabilities 1,442 1,453
TOTAL LIABILITIES 14,352 14,050
Commitments and contingencies (See Note 18)
Equity:
Common shares - par value $ 0.125 per share
Authorized - 1,200,000,000 shares (2024 - 1,200,000,000 shares);
Issued - 531,051,530 shares (2024 - 531,051,530 shares);
Outstanding - 494,490,795 shares (2024 - 493,948,905 shares)
66 66
Capital in excess of par value of shares 4,756 4,758
Retained earnings 484 979
Cost of 36,560,735 common shares in treasury (2024 - 37,102,625 shares)
( 664 ) ( 676 )
Accumulated other comprehensive income 1,612 1,537
Total Cliffs shareholders' equity 6,254 6,664
Noncontrolling interests 230 233
TOTAL EQUITY 6,484 6,897
TOTAL LIABILITIES AND EQUITY $ 20,836 $ 20,947
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED OPERATIONS
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
Three Months Ended
March 31,
(In millions, except per share amounts) 2025 2024
Revenues $ 4,629 $ 5,199
Operating costs:
Cost of goods sold ( 5,020 ) ( 4,914 )
Selling, general and administrative expenses ( 133 ) ( 132 )
Restructuring and other charges ( 3 ) ( 104 )
Asset impairment — ( 64 )
Miscellaneous – net ( 11 ) ( 23 )
Total operating costs ( 5,167 ) ( 5,237 )
Operating loss ( 538 ) ( 38 )
Other income (expense):
Interest expense, net ( 140 ) ( 64 )
Loss on extinguishment of debt — ( 21 )
Net periodic benefit credits other than service cost component 57 60
Other non-operating income (expense) ( 9 ) 2
Total other expense ( 92 ) ( 23 )
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.
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STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED COMPREHENSIVE LOSS
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
Three Months Ended
March 31,
(In millions) 2025 2024
Net loss $ ( 483 ) $ ( 53 )
Other comprehensive income (loss):
Changes in pension and OPEB, net of tax ( 27 ) ( 28 )
Changes in derivative financial instruments, net of tax 101 20
Changes in foreign currency translation 1 ( 1 )
Total other comprehensive income (loss) 75 ( 9 )
Comprehensive loss ( 408 ) ( 62 )
Comprehensive income attributable to noncontrolling interests ( 12 ) ( 14 )
Comprehensive loss attributable to Cliffs shareholders $ ( 420 ) $ ( 76 )
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
Three Months Ended
March 31,
(In millions) 2025 2024
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
Pension and OPEB credits ( 48 ) ( 51 )
Deferred income taxes ( 151 ) ( 8 )
Other 65 241
Changes in operating assets and liabilities:
Accounts receivable, net ( 223 ) ( 27 )
Inventories 182 ( 8 )
Income taxes 7 ( 1 )
Pension and OPEB payments and contributions ( 43 ) ( 32 )
Payables, accrued employment and accrued expenses 57 ( 170 )
Other, net 4 21
Net cash provided (used) by operating activities ( 351 ) 142
INVESTING ACTIVITIES
Purchase of property, plant and equipment ( 152 ) ( 182 )
Other investing activities 7 3
Net cash used by investing activities ( 145 ) ( 179 )
FINANCING ACTIVITIES
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
Debt issuance costs ( 13 ) ( 13 )
Other financing activities ( 33 ) ( 25 )
Net cash provided (used) by financing activities 499 ( 131 )
Net increase (decrease) in cash and cash equivalents 3 ( 168 )
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
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CHANGES IN EQUITY
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
(In millions) Number of
Common Shares Outstanding Par Value of Common
Shares Issued Capital in
Excess of
Par Value
of Shares Retained
Earnings Common
Shares
in
Treasury AOCI Non-Controlling Interest Total
December 31, 2024 493.9 $ 66 $ 4,758 $ 979 $ ( 676 ) $ 1,537 $ 233 $ 6,897
Comprehensive income (loss) — — — ( 495 ) — 75 12 ( 408 )
Stock and other incentive plans 0.6 — ( 2 ) — 12 — — 10
Net distributions to noncontrolling interests — — — — — — ( 15 ) ( 15 )
March 31, 2025 494.5 $ 66 $ 4,756 $ 484 $ ( 664 ) $ 1,612 $ 230 $ 6,484
(In millions) Number of
Common Shares Outstanding Par Value of Common
Shares Issued Capital in
Excess of
Par Value
of Shares Retained
Earnings Common
Shares
in
Treasury AOCI Non-Controlling Interest Total
December 31, 2023 504.9 $ 66 $ 4,861 $ 1,733 $ ( 430 ) $ 1,657 $ 235 $ 8,122
Comprehensive income (loss) — — — ( 67 ) — ( 9 ) 14 ( 62 )
Common stock repurchases, net of excise tax ( 30.4 ) — — — ( 615 ) — — ( 615 )
Stock and other incentive plans 1.0 — ( 10 ) — 15 — — 5
Net distributions to noncontrolling interests — — — — — — ( 8 ) ( 8 )
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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CLEVELAND-CLIFFS INC. AND SUBSIDIARIES
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
BUSINESS, CONSOLIDATION AND PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with SEC rules and regulations and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. The results of operations for the three 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. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.
NATURE OF BUSINESS
We are a leading North America-based steel producer with focus on value-added sheet products, particularly for the automotive industry. 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, 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
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. Refer to NOTE 3 - ACQUISITIONS for further information.
BUSINESS OPERATIONS
We are organized into four operating segments based on differentiated products – Steelmaking, Tubular, Tooling and Stamping, and European Operations. We primarily operate through one reportable segment – the Steelmaking segment.
BASIS OF CONSOLIDATION
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.
INVESTMENTS IN AFFILIATES
We have investments in several businesses accounted for using the equity method of accounting. These investments are included within our Steelmaking segment. 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
A detailed description of our significant accounting policies can be found in the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein.
RECENT ACCOUNTING PRONOUNCEMENTS AND LEGISLATION
ACCOUNTING PRONOUNCEMENTS - ISSUED AND NOT EFFECTIVE
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . 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.
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NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
INVENTORIES
The following table presents the detail of our Inventories on the Statements of Unaudited Condensed Consolidated Financial Position:
(In millions) March 31,
2025 December 31,
2024
Product inventories
Finished and semi-finished goods $ 2,396 $ 2,393
Raw materials 1,974 2,208
Total product inventories 4,370 4,601
Manufacturing supplies and critical spares 516 493
Inventories $ 4,886 $ 5,094
SUPPLY CHAIN FINANCE PROGRAMS
We negotiate payment terms directly with our suppliers for the purchase of goods and services. We currently offer voluntary supply chain finance programs that enable our suppliers to sell their Cliffs receivables to financial intermediaries, at the sole discretion of both the suppliers and financial intermediaries. No guarantees are provided by us or our subsidiaries under the supply chain finance programs. The supply chain finance programs allow our suppliers to be paid by the financial intermediaries earlier than the due date on the applicable invoice. Supply chain finance programs that extend terms or provide us an economic benefit are classified as short-term financings. 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:
Three Months Ended
March 31,
(In millions) 2025 2024
Capital additions $ 129 $ 157
Less:
Non-cash accruals ( 68 ) ( 45 )
Equipment financed with seller 16 —
Right-of-use assets - finance leases 29 20
Cash paid for capital expenditures including deposits $ 152 $ 182
Cash payments (receipts) for income taxes and interest are as follows:
Three Months Ended
March 31,
(In millions) 2025 2024
Income taxes paid $ 1 $ 1
Income tax refunds ( 5 ) ( 2 )
Interest paid on debt obligations net of capitalized interest 1
77 53
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.
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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.
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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.
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NOTE 4 - REVENUES
We generate our revenue through product sales, in which shipping terms indicate when we have fulfilled our performance obligations and transferred control of products to our customer. Our revenue transactions consist of a single performance obligation to transfer promised goods. Our contracts with customers define the mechanism for determining the sales price, which is generally fixed upon transfer of control, but the contracts generally do not impose a specific quantity on either party. Quantities to be delivered to the customer are determined at a point near the date of delivery through purchase orders or other written instructions we receive from the customer. Spot market sales are made through purchase orders or other written instructions. We consider our performance obligation to be complete and recognize revenue when control transfers in accordance with shipping terms.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring product. We reduce the amount of revenue recognized for estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value to be realized. Payment terms are consistent with terms standard to the markets we serve. 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
March 31,
(In millions) 2025 2024
Steelmaking:
Direct automotive $ 1,297 $ 1,617
Infrastructure and manufacturing 1,354 1,392
Distributors and converters 1,228 1,412
Steel producers
588 606
Total Steelmaking 4,467 5,027
Other Businesses:
Direct automotive 130 140
Infrastructure and manufacturing 10 10
Distributors and converters 22 22
Total Other Businesses 162 172
Total revenues $ 4,629 $ 5,199
The following tables represent our Revenues by product line:
Three Months Ended
March 31,
(In millions) 2025 2024
Steelmaking:
Hot-rolled steel $ 1,166 $ 1,128
Cold-rolled steel 591 749
Coated steel 1,361 1,623
Stainless and electrical steel 444 461
Plate 247 333
Slab and other steel products 247 335
Other 411 398
Total Steelmaking 4,467 5,027
Other Businesses:
Other 162 172
Total revenues $ 4,629 $ 5,199
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NOTE 5 - SEGMENT REPORTING
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. We are organized into four operating segments based on our differentiated products – Steelmaking, Tubular, Tooling and Stamping, and European Operations. We have one reportable segment – Steelmaking. 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 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.
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
11 — — 11
Total Adjusted EBITDA $ ( 184 ) $ 10 $ — $ ( 174 )
Interest expense, net ( 140 )
Income tax benefit 147
Depreciation, depletion and amortization ( 282 )
EBITDA from noncontrolling interests 2
18
Weirton indefinite idle ( 3 )
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.
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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
Interest expense, net ( 64 )
Income tax benefit 8
Depreciation, depletion and amortization ( 230 )
EBITDA from noncontrolling interests 2
21
Weirton indefinite idle ( 177 )
Loss on extinguishment of debt ( 21 )
Other, net ( 4 )
Net loss $ ( 53 )
Capital Additions $ 156 $ 1 $ — $ 157
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) March 31,
2025 December 31,
2024
Assets:
Steelmaking $ 20,200 $ 20,327
Other Businesses 636 620
Total segment assets $ 20,836 $ 20,947
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) March 31,
2025 December 31,
2024
Land, land improvements and mineral rights $ 1,452 $ 1,451
Buildings 1,104 1,104
Equipment 11,185 11,119
Other 354 349
Construction in progress 759 728
Total property, plant and equipment 1
14,854 14,751
Allowance for depreciation and depletion ( 5,057 ) ( 4,809 )
Property, plant and equipment, net $ 9,797 $ 9,942
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.
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NOTE 7 - GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES
GOODWILL
The following is a summary of Goodwill by segment:
(In millions) March 31,
2025 December 31,
2024
Steelmaking $ 1,718 $ 1,719
Other Businesses 49 49
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:
March 31, 2025
December 31, 2024
(In millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount
Intangible assets 1 :
Customer relationships $ 1,014 $ ( 51 ) $ 963 $ 1,015 $ ( 34 ) $ 981
Developed technology 60 ( 18 ) 42 60 ( 17 ) 43
Trade names and trademarks 87 ( 9 ) 78 87 ( 8 ) 79
Mining permits 72 ( 29 ) 43 72 ( 29 ) 43
Supplier relationships 29 ( 5 ) 24 29 ( 5 ) 24
Total intangible assets $ 1,262 $ ( 112 ) $ 1,150 $ 1,263 $ ( 93 ) $ 1,170
Intangible liabilities 2 :
Above-market supply contracts $ ( 71 ) $ 31 $ ( 40 ) $ ( 71 ) $ 30 $ ( 41 )
1 Intangible assets are classified as Other non-current assets. 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.
2 Intangible liabilities are classified as Other non-current liabilities. Amortization of all intangible liabilities is recognized in Cost of goods sold .
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 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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NOTE 8 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
(In millions)
Debt Instrument Issuer 1
Annual Effective
Interest Rate March 31,
2025 December 31,
2024
Senior Unsecured Notes:
7.000 % 2027 Senior Notes
Cliffs 9.240 % $ 73 $ 73
7.000 % 2027 AK Senior Notes
AK Steel 9.240 % 56 56
5.875 % 2027 Senior Notes
Cliffs 6.490 % 556 556
4.625 % 2029 Senior Notes
Cliffs 4.625 % 368 368
6.875 % 2029 Senior Notes
Cliffs 6.875 % 900 900
6.750 % 2030 Senior Notes
Cliffs 6.750 % 750 750
4.875 % 2031 Senior Notes
Cliffs 4.875 % 325 325
7.500 % 2031 Senior Notes
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
Variable 3
1,255 1,560
Total principal amount 7,693 7,148
Unamortized discounts and issuance costs ( 92 ) ( 83 )
Total long-term debt $ 7,601 $ 7,065
1 Unless otherwise noted, references in this column and throughout this NOTE 8 - DEBT AND CREDIT FACILITIES to "Cliffs" are to Cleveland-Cliffs Inc., and references to "AK Steel" are to AK Steel Corporation (n/k/a Cleveland-Cliffs Steel Corporation).
2 Refers to Cleveland-Cliffs Inc. as borrower under our ABL Facility.
3 Our ABL Facility annual effective interest rate was 5.68 % as of March 31, 2025.
7.500% 2031 SENIOR NOTES OFFERING
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.
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 7.500% 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. The 7.500% 2031 Senior Notes are guaranteed on a senior unsecured basis by our material direct and indirect wholly owned domestic subsidiaries. The 7.500% 2031 Senior Notes are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries that do not guarantee the 7.500% 2031 Senior Notes.
The 7.500% 2031 Senior Notes may be redeemed, in whole or in part, at any time at our option not less than 10 days nor more than 60 days after prior notice is sent to the holders of the 7.500% 2031 Senior Notes. The 7.500% 2031 Senior Notes are redeemable prior to March 15, 2028, at a redemption price equal to 100 % of the principal amount thereof plus a "make-whole" premium set forth in the indenture. We may also redeem up to 35 % of the aggregate principal amount of the 7.500% 2031 Senior Notes prior to March 15, 2028, at a redemption price equal to 107.500 % of the principal amount thereof with the net cash proceeds of one or more equity offerings. The 7.500% 2031 Senior Notes are redeemable beginning on March 15, 2028, at a redemption price equal to 103.750 % of the principal amount thereof, decreasing to 101.875 % on March 15, 2029, and are redeemable at par beginning on March 15, 2030. In each case, we pay the applicable redemption or "make-whole" premiums plus accrued and unpaid interest, if any, to, but not including, the date of redemption.
In addition, if a change in control triggering event, as defined in the indenture, occurs with respect to the 7.500% 2031 Senior Notes, we will be required to offer to repurchase the notes at a purchase price equal to 101 % of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
The terms of the 7.500% 2031 Senior Notes contain certain customary covenants; however, there are no financial covenants.
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ABL FACILITY
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) March 31,
2025
Available borrowing base on ABL Facility 1
$ 4,236
Borrowings ( 1,255 )
Letter of credit obligations 2
( 55 )
Borrowing capacity available $ 2,926
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.
DEBT MATURITIES
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
$ — $ — $ 685 $ 1,255 $ 1,268 $ 4,485 $ 7,693
NOTE 9 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS
We offer defined benefit pension plans, defined contribution pension plans and OPEB plans to a significant portion of our employees and retirees. Benefits are also provided through multiemployer plans for certain union members.
The following are the components of defined benefit pension and OPEB costs (credits):
DEFINED BENEFIT PENSION COSTS (CREDITS)
Three Months Ended
March 31,
(In millions) 2025 2024
Service cost $ 7 $ 7
Interest cost 53 55
Expected return on plan assets ( 79 ) ( 80 )
Amortization:
Prior service costs 4 4
Net actuarial gain ( 2 ) —
Net periodic benefit credits $ ( 17 ) $ ( 14 )
OPEB COSTS (CREDITS)
Three Months Ended
March 31,
(In millions) 2025 2024
Service cost $ 2 $ 2
Interest cost 14 12
Expected return on plan assets ( 11 ) ( 11 )
Termination benefits 1
— 2
Amortization:
Prior service credits ( 3 ) ( 4 )
Net actuarial gain ( 33 ) ( 38 )
Net periodic benefit credits $ ( 31 ) $ ( 37 )
1 The termination benefits relate to the announcement of the indefinite idle of our Weirton tinplate production plant.
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.
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NOTE 10 - INCOME TAXES
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. The closure date for each of our active mine sites was determined based on the exhaustion date of the remaining mineral reserves, and the amortization of the related asset and accretion of the liability is recognized over the estimated mine lives. The closure date and expected timing of the capital requirements to meet our obligations for our indefinitely idled or closed mines is determined based on the unique circumstances of each property. For indefinitely idled or closed mines, the accretion of the liability is recognized over the anticipated timing of remediation. 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) March 31,
2025 December 31,
2024
Asset retirement obligations 1
$ 525 $ 526
Less: current portion 19 25
Long-term asset retirement obligations $ 506 $ 501
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:
(In millions) 2025 2024
Asset retirement obligations as of January 1 $ 526 $ 459
Accretion expense 7 5
Revision in estimated cash flows — 48
Remediation payments ( 8 ) ( 2 )
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,
2024
Environmental obligations $ 113 $ 114
Less: current portion 11 14
Long-term environmental obligations $ 102 $ 100
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NOTE 12 - FAIR VALUE MEASUREMENTS
The carrying values of certain financial instruments (e.g., Accounts receivable, net , Accounts payable and Other current liabilities ) approximate fair value and, therefore, have been excluded from the table below. See NOTE 13 - DERIVATIVE INSTRUMENTS AND HEDGING for information on our derivative instruments, which are accounted for at fair value on a recurring basis.
A summary of the carrying value and fair value of other financial instruments were as follows:
March 31, 2025 December 31, 2024
(In millions) Valuation Hierarchy Classification Carrying
Value Fair
Value Carrying
Value Fair
Value
Senior notes Level 1 $ 6,346 $ 6,240 $ 5,505 $ 5,496
ABL Facility - outstanding balance Level 2 1,255 1,255 1,560 1,560
Total $ 7,601 $ 7,495 $ 7,065 $ 7,056
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 )
Payments 5
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. S. 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
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
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Unaudited Condensed Consolidated Cash Flows. Refer to NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE INCOME for further information.
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
Hedge Contract Type Classification Unit of Measure Maturity Dates March 31,
2025 December 31,
2024
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) March 31,
2025 December 31,
2024
Other current assets $ 69 $ 5
Other non-current assets 25 9
Other current liabilities ( 8 ) ( 41 )
Other non-current liabilities — ( 6 )
NOTE 14 - CAPITAL STOCK
SHARE REPURCHASE PROGRAM
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. 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 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
We have 3 million shares of Serial Preferred Stock, Class A, without par value, authorized and 4 million shares of Serial Preferred Stock, Class B, without par value, authorized. 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.
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NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE INCOME
The components of Accumulated other comprehensive income within Cliffs shareholders’ equity and related tax effects allocated to each are shown below:
Three Months Ended
March 31,
(In millions) 2025 2024
Foreign Currency Translation
Beginning balance $ ( 70 ) $ —
Other comprehensive income (loss) before reclassifications 1 ( 1 )
Ending balance $ ( 69 ) $ ( 1 )
Derivative Instruments
Beginning balance $ ( 53 ) $ ( 170 )
Other comprehensive income (loss) before reclassifications 101 ( 33 )
Income tax (benefit) ( 24 ) 8
Other comprehensive income (loss) before reclassifications, net of tax 77 ( 25 )
Losses reclassified from AOCI to net loss 1
32 59
Income tax benefit 2
( 8 ) ( 14 )
Net losses reclassified from AOCI to net loss 24 45
Ending balance $ 48 $ ( 150 )
Pension and OPEB
Beginning balance $ 1,660 $ 1,827
Gains reclassified from AOCI to net loss 3
( 35 ) ( 38 )
Income tax expense 2
8 10
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 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.
NOTE 16 - VARIABLE INTEREST ENTITIES
SUNCOKE MIDDLETOWN
We purchase all the coke and electrical power generated from SunCoke Middletown’s plant under long-term supply agreements and have committed to purchase all the expected production from the facility through 2032. 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 $ 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.
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The assets of the consolidated VIE can only be used to settle the obligations of the consolidated VIE and not obligations of the Company. The creditors of SunCoke Middletown do not have recourse to the assets or general credit of the Company to satisfy liabilities of the VIE. The Statements of Unaudited Condensed Consolidated Financial Position includes the following amounts for SunCoke Middletown:
(In millions) March 31,
2025 December 31,
2024
Inventories $ 28 $ 27
Property, plant and equipment, net 283 288
Accounts payable ( 12 ) ( 19 )
Other assets (liabilities), net ( 53 ) ( 47 )
Noncontrolling interests ( 246 ) ( 249 )
NOTE 17 - EARNINGS PER SHARE
The following table summarizes the computation of basic and diluted EPS:
Three Months Ended
March 31,
(In millions, except per share amounts) 2025 2024
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:
Basic 495 492
Employee stock plans 1
— —
Diluted 495 492
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
PURCHASE COMMITMENTS
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 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 and iron ore are made under annual or multi-year agreements with periodic price adjustments. We typically purchase coal under annual fixed price agreements. We also purchase certain transportation services under multi-year contracts with minimum quantity requirements.
OTHER COMMERCIAL COMMITMENTS
We use surety bonds and letters of credit to provide financial assurance for certain obligations and statutory requirements. 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
We are currently the subject of, or party to, various claims and legal proceedings incidental to our current and historical operations. These claims and legal proceedings are subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, additional funding requirements or an injunction. If an unfavorable ruling were to occur, there exists the possibility of a material adverse effect on our financial position and results of operations for the period in which the ruling occurs or future periods. However, based on currently available information, we do not believe that any pending claims or legal proceedings will result in a material adverse effect in relation to our consolidated financial statements.
ENVIRONMENTAL CONTINGENCIES
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
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with certainty because of the evolving nature of the investigation and remediation process. Rather, to estimate the probable costs, we must make certain assumptions. The most significant of these assumptions is for the nature and scope of the work that will be necessary to investigate and remediate a particular site and the cost of that work. Other significant assumptions include the cleanup technology that will be used, whether and to what extent any other parties will participate in paying the investigation and remediation costs, reimbursement of past response costs and future oversight costs by governmental agencies, and the reaction of the governing environmental agencies to the proposed work plans. 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 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 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. Environmental regulators have the authority to inspect all of our facilities. 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 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.
In addition to the foregoing matters, we are or may be involved in proceedings with various regulatory authorities that may require us to pay fines, comply with more rigorous standards or other requirements or incur capital and operating expenses for environmental compliance. We believe that the ultimate disposition of any such proceedings will not have, individually or in the aggregate, a material adverse effect on our consolidated financial condition, results of operations or cash flows.
TAX MATTERS
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We also recognize tax benefits to the extent that it is more likely than not that our positions will be sustained when challenged by the taxing authorities. To the extent we prevail in matters for which liabilities have been established, or are required to pay amounts in excess of our liabilities, our effective tax rate in a given period could be materially affected. An unfavorable tax settlement would require use of our cash and result in an increase in our effective tax rate in the year of resolution. 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 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. If material assumptions or factual understandings we rely on to evaluate exposure for these contingencies prove to be inaccurate or otherwise change, we may be required to record a liability for an adverse outcome. If, however, we have reasonably evaluated potential future liabilities for all of these contingencies, including those described more specifically above, it is our opinion, unless we otherwise noted, that the ultimate liability from these contingencies, individually or in the aggregate, should not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
NOTE 19 - SUBSEQUENT EVENTS
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.
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