Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended June 30, 2019



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

For the transition period from to .

Commission File Number: 1-8944

CLEVELAND-CLIFFS INC.

(Exact Name of Registrant as Specified in Its Charter)



Ohio			34-1464672
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

200 Public Square,	Cleveland,	Ohio	44114-2315
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s Telephone Number, Including Area Code: (216) 694-5700

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, par value $0.125 per share	CLF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares outstanding of the registrant’s common shares, par value $0.125 per share, was 270,048,477 as of July 17, 2019.

Table of Contents

TABLE OF CONTENTS


			Page Number

DEFINITIONS				1

PART I - FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Statements of Unaudited Condensed Consolidated Financial Position as of June 30, 2019 and December 31, 2018		2
		Statements of Unaudited Condensed Consolidated Operations for the Three and Six Months Ended June 30, 2019 and 2018		4
		Statements of Unaudited Condensed Consolidated Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018		5
		Statements of Unaudited Condensed Consolidated Cash Flows for the Six Months Ended June 30, 2019 and 2018		6
		Statements of Unaudited Condensed Consolidated Changes in Equity for the Three and Six Months Ended June 30, 2019 and 2018		7
		Notes to Unaudited Condensed Consolidated Financial Statements		9
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		38
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		51
	Item 4.	Controls and Procedures		51

PART II - OTHER INFORMATION
	Item 1.	Legal Proceedings		52
	Item 1A.	Risk Factors		52
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		52
	Item 4.	Mine Safety Disclosures		53
	Item 5.	Other Information		53
	Item 6.	Exhibits		53

Signatures				54

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DEFINITIONS

The following abbreviations or acronyms are used in the text. References in this report to the “Company,” “we,” “us,” “our” and “Cliffs” are to Cleveland-Cliffs Inc. and subsidiaries, collectively.



Abbreviation or acronym		Term
A&R 2015 Equity Plan		Cliffs Natural Resources Inc. Amended and Restated 2015 Equity and Incentive Compensation Plan
ABL Facility		Amended and Restated Syndicated Facility Agreement by and among Bank of America, N.A., as Administrative Agent and Australian Security Trustee, the Lenders that are parties hereto, as the Lenders, Cleveland-Cliffs Inc., as Parent and a Borrower, and the Subsidiaries of Parent party hereto, as Borrowers dated as of March 30, 2015, and Amended and Restated as of February 28, 2018
Adjusted EBITDA		EBITDA excluding certain items such as extinguishment/restructuring of debt, impacts of discontinued operations, foreign currency exchange remeasurement, impairment of other long-lived assets, severance and intersegment corporate allocations of SG&A costs
ArcelorMittal		ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco, as well as many other subsidiaries)
AMT		Alternative Minimum Tax
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
CECL		Current Expected Credit Losses model
Compensation Committee		Compensation and Organization Committee of the Board of Directors
Dodd-Frank Act		Dodd-Frank Wall Street Reform and Consumer Protection Act
DR-grade		Direct Reduction-grade
EBITDA		Earnings before interest, taxes, depreciation and amortization
Empire		Empire Iron Mining Partnership
Exchange Act		Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standards Board
Fe		Iron
FMSH Act		U.S. Federal Mine Safety and Health Act 1977, as amended
GAAP		Accounting principles generally accepted in the United States
HBI		Hot briquetted iron
Hibbing		Hibbing Taconite Company, an unincorporated joint venture
Hot-rolled coil steel price		Estimated average annual daily market price for hot-rolled coil steel
Long ton		2,240 pounds
Metric ton		2,205 pounds
MMBtu		Million British Thermal Units
MSHA		U.S. Mine Safety and Health Administration
Net ton		2,000 pounds
Northshore		Northshore Mining Company
OPEB		Other postretirement employment benefits
Platts 62% Price		Platts IODEX 62% Fe Fines CFR North China
PPI		Producer Price Indices
SEC		U.S. Securities and Exchange Commission
SG&A		Selling, general and administrative
Tilden		Tilden Mining Company L.C.
Topic 606		ASC Topic 606, Revenue from Contracts with Customers
Topic 815		ASC Topic 815, Derivatives and Hedging
TSR		Total shareholder return
United Taconite		United Taconite LLC
U.S.		United States of America
U.S. Steel		U.S Steel Corporation and all subsidiaries

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PART I



Item 1.	Financial Statements

Statements of Unaudited Condensed Consolidated Financial Position

Cleveland-Cliffs Inc. and Subsidiaries



	(In Millions)
	June 30, 2019		December 31, 2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	377.2	$	823.2
Accounts receivable, net	193.1		226.7
Inventories	219.0		87.9
Supplies and other inventories	110.8		93.2
Derivative assets	118.3		91.5
Income tax receivable, current	58.7		117.3
Other current assets	42.3		39.8
TOTAL CURRENT ASSETS	1,119.4		1,479.6
PROPERTY, PLANT AND EQUIPMENT, NET	1,597.3		1,286.0
OTHER ASSETS
Deposits for property, plant and equipment	52.2		83.0
Income tax receivable, non-current	62.7		121.3
Deferred income taxes	443.3		464.8
Other non-current assets	118.3		94.9
TOTAL OTHER ASSETS	676.5		764.0
TOTAL ASSETS	$	3,393.2	$	3,529.6

(continued)

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

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Statements of Unaudited Condensed Consolidated Financial Position

Cleveland-Cliffs Inc. and Subsidiaries - (Continued)



	(In Millions)
	June 30, 2019			December 31, 2018
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	188.1		$	186.8
Accrued employment costs	58.4			74.0
Accrued interest	31.3			38.4
Partnership distribution payable	44.1			43.5
Other current liabilities	115.5			125.5
TOTAL CURRENT LIABILITIES	437.4			468.2
PENSION AND POSTEMPLOYMENT BENEFIT LIABILITIES	239.3			248.7
ENVIRONMENTAL AND MINE CLOSURE OBLIGATIONS	176.7			172.0
LONG-TERM DEBT	2,104.5			2,092.9
OTHER LIABILITIES	149.7			123.6
TOTAL LIABILITIES	3,107.6			3,105.4
COMMITMENTS AND CONTINGENCIES (REFER TO NOTE 20)
EQUITY
SHAREHOLDERS' EQUITY
Preferred Stock - no par value
Class A - 3,000,000 shares authorized
Class B - 4,000,000 shares authorized
Common Shares - par value $0.125 per share
Authorized - 600,000,000 shares (2018 - 600,000,000 shares);
Issued - 301,886,794 shares (2018 - 301,886,794 shares);
Outstanding - 270,042,018 shares (2018 - 292,611,569 shares)	37.7			37.7
Capital in excess of par value of shares	3,863.6			3,916.7
Retained deficit	(2,952.6		)	(3,060.2		)
Cost of 31,844,776 common shares in treasury (2018 - 9,275,225 shares)	(391.3		)	(186.1		)
Accumulated other comprehensive loss	(271.8		)	(283.9		)
TOTAL EQUITY	285.6			424.2
TOTAL LIABILITIES AND EQUITY	$	3,393.2		$	3,529.6

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



	(In Millions, Except Per Share Amounts)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
REVENUES FROM PRODUCT SALES AND SERVICES
Product	$	697.4		$	672.0		$	842.8		$	841.2
Freight	45.8			42.3			57.4			53.1
	743.2			714.3			900.2			894.3
COST OF GOODS SOLD	(480.2		)	(429.8		)	(606.3		)	(548.3		)
SALES MARGIN	263.0			284.5			293.9			346.0
OTHER OPERATING EXPENSE
Selling, general and administrative expenses	(30.6		)	(26.2		)	(58.7		)	(51.3		)
Miscellaneous – net	(5.6		)	(4.1		)	(9.2		)	(10.2		)
	(36.2		)	(30.3		)	(67.9		)	(61.5		)
OPERATING INCOME	226.8			254.2			226.0			284.5
OTHER INCOME (EXPENSE)
Interest expense, net	(26.1		)	(31.2		)	(51.2		)	(63.6		)
Gain (loss) on extinguishment of debt	(17.9		)	0.2			(18.2		)	0.2
Other non-operating income	0.6			4.4			1.0			8.8
	(43.4		)	(26.6		)	(68.4		)	(54.6		)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	183.4			227.6			157.6			229.9
INCOME TAX BENEFIT (EXPENSE)	(22.0		)	1.8			(18.3		)	(13.9		)
INCOME FROM CONTINUING OPERATIONS	161.4			229.4			139.3			216.0
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX	(0.6		)	(64.3		)	(0.6		)	(135.2		)
NET INCOME	$	160.8		$	165.1		$	138.7		$	80.8

EARNINGS (LOSS) PER COMMON SHARE – BASIC
Continuing operations	$	0.59		$	0.77		$	0.49		$	0.73
Discontinued operations	—			(0.22		)	—			(0.46		)
	$	0.59		$	0.55		$	0.49		$	0.27
EARNINGS (LOSS) PER COMMON SHARE – DILUTED
Continuing operations	$	0.57		$	0.76		$	0.47		$	0.72
Discontinued operations	—			(0.21		)	—			(0.45		)
	$	0.57		$	0.55		$	0.47		$	0.27
AVERAGE NUMBER OF SHARES (IN THOUSANDS)
Basic	275,769			297,618			282,647			297,442
Diluted	285,479			301,275			293,580			301,143

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

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Statements of Unaudited Condensed Consolidated Comprehensive Income

Cleveland-Cliffs Inc. and Subsidiaries



	(In Millions)
	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019		2018
NET INCOME	$	160.8		$	165.1	$	138.7	$	80.8
OTHER COMPREHENSIVE INCOME
Changes in pension and other post-retirement benefits, net of tax	5.8			6.7		11.5		13.4
Changes in foreign currency translation	—			2.2		—		2.9
Changes in derivative financial instruments, net of tax	(2.1		)	0.2		0.6		0.5
OTHER COMPREHENSIVE INCOME	3.7			9.1		12.1		16.8
TOTAL COMPREHENSIVE INCOME	$	164.5		$	174.2	$	150.8	$	97.6

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



	(In Millions)
	Six Months Ended June 30,
	2019			2018
OPERATING ACTIVITIES
Net income	$	138.7		$	80.8
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation, depletion and amortization	40.9			49.4
Loss (gain) on extinguishment of debt	18.2			(0.2		)
Gain on derivatives	(27.2		)	(123.5		)
Other	46.6			12.6
Changes in operating assets and liabilities:
Receivables and other assets	127.8			61.8
Inventories	(131.1		)	(125.6		)
Payables, accrued expenses and other liabilities	(62.8		)	(4.6		)
Net cash provided (used) by operating activities	151.1			(49.3		)
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(294.4		)	(42.1		)
Deposits for property, plant and equipment	(6.5		)	(72.3		)
Proceeds on sales of assets	—			14.6
Other investing activities	8.5			—
Net cash used by investing activities	(292.4		)	(99.8		)
FINANCING ACTIVITIES
Repurchase of common shares	(252.9		)	—
Dividends paid	(28.9		)	—
Proceeds from issuance of debt	720.9			—
Debt issuance costs	(6.8		)	(1.5		)
Repurchase of debt	(729.3		)	(15.3		)
Other financing activities	(10.9		)	(8.9		)
Net cash used by financing activities	(307.9		)	(25.7		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			(1.0		)
DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING CASH CLASSIFIED WITHIN OTHER CURRENT ASSETS RELATED TO DISCONTINUED OPERATIONS	(449.2		)	(175.8		)
LESS: DECREASE IN CASH AND CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS, CLASSIFIED WITHIN OTHER CURRENT ASSETS	(3.2		)	—
NET DECREASE IN CASH AND CASH EQUIVALENTS	(446.0		)	(175.8		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	823.2			978.3
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	377.2		$	802.5

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 Deficit			Common Shares in Treasury			Accumulated Other Comprehensive Loss			Total
December 31, 2018	292.6		$	37.7	$	3,916.7		$	(3,060.2	)	$	(186.1	)	$	(283.9	)	$	424.2
Comprehensive income (loss)
Net loss	—		—		—			(22.1		)	—			—			(22.1		)
Other comprehensive income	—		—		—			—			—			8.4			8.4
Total comprehensive loss																	(13.7		)
Stock and other incentive plans	1.7		—		(56.5		)	—			46.5			—			(10.0		)
Common share repurchases	(11.5	)	—		—			—			(124.3		)	—			(124.3		)
Common share dividends ($0.05 per share)	—		—		—			(14.5		)	—			—			(14.5		)
March 31, 2019	282.8		$	37.7	$	3,860.2		$	(3,096.8	)	$	(263.9	)	$	(275.5	)	$	261.7
Comprehensive income
Net income	—		—		—			160.8			—			—			160.8
Other comprehensive income	—		—		—			—			—			3.7			3.7
Total comprehensive income																	164.5
Stock and other incentive plans	0.1		—		3.4			—			1.2			—			4.6
Common share repurchases	(12.9	)	—		—			—			(128.6		)	—			(128.6		)
Common share dividends ($0.06 per share)	—		—		—			(16.6		)	—			—			(16.6		)
June 30, 2019	270.0		$	37.7	$	3,863.6		$	(2,952.6	)	$	(391.3	)	$	(271.8	)	$	285.6

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	(In Millions)
	Number of Common Shares Outstanding	Par Value of Common Shares Issued		Capital in Excess of Par Value of Shares			Retained Deficit			Common Shares in Treasury			Accumulated Other Comprehensive Loss			Non-Controlling Interest			Total
December 31, 2017	297.4	$	37.7	$	3,933.9		$	(4,207.3	)	$	(169.6	)	$	(39.0	)	$	0.2		$	(444.1	)
Adoption of accounting standard	—	—		—			34.0			—			—			—			34.0
Comprehensive income (loss)
Net loss	—	—		—			(84.3		)	—			—			—			(84.3		)
Other comprehensive income	—	—		—			—			—			7.7			—			7.7
Total comprehensive loss																			(76.6		)
Stock and other incentive plans	0.3	—		(15.8		)	—			17.7			—			—			1.9
March 31, 2018	297.7	$	37.7	$	3,918.1		$	(4,257.6	)	$	(151.9	)	$	(31.3	)	$	0.2		$	(484.8	)
Comprehensive income
Net income	—	—		—			165.1			—			—			—			165.1
Other comprehensive income	—	—		—			—			—			9.1			—			9.1
Total comprehensive income																			174.2
Distributions to noncontrolling interest	—	—		—						—			—			(0.2		)	(0.2		)
Stock and other incentive plans	0.1	—		0.2			—			4.3			—			—			4.5
June 30, 2018	297.8	$	37.7	$	3,918.3		$	(4,092.5	)	$	(147.6	)	$	(22.2	)	$	—		$	(306.3	)

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

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Cleveland-Cliffs Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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, cash flows and changes in equity for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019 or any other future period. 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, 2018.

We have two reportable segments - the Mining and Pelletizing segment and the Metallics segment. Unless otherwise noted, discussion of our business and results of operations in this Quarterly Report on Form 10-Q refers to our continuing operations.

As more fully described in the Form 10-K for the year ended December 31, 2018, in 2018 we committed to a course of action leading to the permanent closure of the Asia Pacific Iron Ore mining operations and, as planned, completed our final shipment in June 2018. Factors considered in this decision included increasingly discounted prices for lower-iron-content ore and the quality of the remaining iron ore reserves. During 2018, we sold all of the assets of our Asia Pacific Iron Ore business through a series of sales to third parties. As a result of our planned exit, management determined that our Asia Pacific Iron Ore operating segment met the criteria to be classified as held for sale and a discontinued operation under ASC Topic 205, Presentation of Financial Statements. As such, all Asia Pacific Iron Ore operating segment results are classified within discontinued operations. Refer to NOTE 14 - DISCONTINUED OPERATIONS for further information.

Basis of Consolidation

The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including the following operations as of June 30, 2019:



Name	Location	Business Segment	Status of Operations
Northshore	Minnesota	Mining and Pelletizing	Active
United Taconite	Minnesota	Mining and Pelletizing	Active
Tilden	Michigan	Mining and Pelletizing	Active
Empire	Michigan	Mining and Pelletizing	Indefinitely Idled
Toledo HBI	Ohio	Metallics	Construction Stage

Intercompany transactions and balances are eliminated upon consolidation.

Equity Method Investments

Our 23% ownership interest in Hibbing is recorded as an equity method investment. As of June 30, 2019 and December 31, 2018, our investment in Hibbing was $12.9 million and $15.4 million, respectively, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position.

Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein.

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NOTE 2 - NEW ACCOUNTING STANDARDS

Issued and Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases are classified as either operating or finance leases. We adopted this standard on its effective date of January 1, 2019 using the optional alternative approach, which requires application of the new guidance at the beginning of the standard's effective date. Adoption of the updated standard did not have a material effect on our consolidated financial statements.

Issued and Not Effective

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326), which introduces a new accounting model, CECL. CECL requires earlier recognition of credit losses, while also providing additional transparency about credit risk. CECL utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. We plan to adopt this standard on its effective date of January 1, 2020, and do not expect the standard to have a material effect on our consolidated financial statements.

NOTE 3 - SEGMENT REPORTING

In alignment with our strategic goals, our Company’s continuing operations are organized and managed in two operating segments according to our differentiated products. Our Mining and Pelletizing segment is a major supplier of iron ore pellets to the North American steel industry from our mines and pellet plants located in Michigan and Minnesota. In our Metallics segment, we are currently constructing an HBI production plant in Toledo, Ohio. We expect to complete construction and begin production in 2020. In the second quarter of 2019, Northshore mine began supplying DR-grade pellets to our Metallics segment, which will be used as feedstock for the HBI production plant.

We evaluate performance based on sales margin, defined as revenues less cost of goods sold identifiable to each segment. Additionally, we evaluate performance on a segment basis, as well as a consolidated basis, based on EBITDA and Adjusted EBITDA. These measures are 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 iron ore industry. In addition, management believes EBITDA and Adjusted EBITDA are useful measures 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 present a summary of our reportable segments including a reconciliation of segment revenues to total revenues, segment sales margin to total sales margin and a reconciliation of Net income to EBITDA and Adjusted EBITDA:



	(In Millions)
	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
	Mining and Pelletizing			Metallics		Total			Mining and Pelletizing			Metallics		Total
Operating segment revenues from product sales and services	$	747.2		$	—	$	747.2		$	904.2		$	—	$	904.2
Elimination of intersegment revenues	(4.0		)	—		(4.0		)	(4.0		)	—		(4.0		)
Total revenue	$	743.2		$	—	$	743.2		$	900.2		$	—	$	900.2

Operating segment sales margin	$	264.6		$	—	$	264.6		$	295.5		$	—	$	295.5
Elimination of intersegment sales margin	(1.6		)	—		(1.6		)	(1.6		)	—		(1.6		)
Total sales margin	$	263.0		$	—	$	263.0		$	293.9		$	—	$	293.9

Revenues from product sales and services of $714.3 million and $894.3 million, respectively, and sales margin of $284.5 million and $346.0 million, respectively, related to our Mining and Pelletizing segment accounted for all of our consolidated revenues and sales margin for the three and six months ended June 30, 2018.

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	(In Millions)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	160.8		$	165.1		$	138.7		$	80.8
Less:
Interest expense, net	(26.3		)	(32.3		)	(51.4		)	(65.8		)
Income tax benefit (expense)	(22.0		)	1.8			(18.3		)	(13.9		)
Depreciation, depletion and amortization	(21.0		)	(25.5		)	(40.9		)	(49.4		)
EBITDA	$	230.1		$	221.1		$	249.3		$	209.9
Less:
Foreign exchange remeasurement	$	(0.1	)	$	(0.1	)	$	—		$	(0.5	)
Impact of discontinued operations	(0.4		)	(54.7		)	(0.4		)	(117.8		)
Gain (loss) on extinguishment of debt	(17.9		)	0.2			(18.2		)	0.2
Severance costs	—			—			(1.7		)	—
Adjusted EBITDA	$	248.5		$	275.7		$	269.6		$	328.0

EBITDA:
Mining and Pelletizing	$	274.6		$	296.0		$	317.4		$	368.5
Metallics	(1.1		)	(1.2		)	(1.9		)	(1.5		)
Corporate and Other (including discontinued operations)	(43.4		)	(73.7		)	(66.2		)	(157.1		)
Total EBITDA	$	230.1		$	221.1		$	249.3		$	209.9

Adjusted EBITDA:
Mining and Pelletizing	$	280.5		$	301.3		$	328.0