clf-20240930

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 September 30, 2024


			☐			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, a 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 493,943,553 as of November 5, 2024.

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TABLE OF CONTENTS

Page Number

DEFINITIONS

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CHANGES IN EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4.

CONTROLS AND PROCEDURES

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

ITEM 1A.

RISK FACTORS

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 4.

MINE SAFETY DISCLOSURES

ITEM 5.

OTHER INFORMATION

ITEM 6.

EXHIBITS

SIGNATURES

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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,” "Cleveland-Cliffs" and “Cliffs” are to Cleveland-Cliffs Inc. and subsidiaries, collectively. Unless otherwise indicated, references to "$" is to United States currency.


Abbreviation or acronym						Term
7.000% 2032 Senior Notes						7.000% Senior Guaranteed Notes due 2032 issued by Cleveland-Cliffs Inc. on March 18, 2024 and August 16, 2024 in an aggregate principal amount of $1,425 million
ABL Facility						Asset-Based Revolving Credit Agreement, dated as of March 13, 2020, among Cleveland-Cliffs Inc., the lenders party thereto from time to time and Bank of America, N.A., as administrative agent, as amended as of March 27, 2020, December 9, 2020, December 17, 2021, June 9, 2023, July 31, 2024, and September 13, 2024, and as may be further amended from time to time
Adjusted EBITDA						EBITDA, excluding certain items such as EBITDA of noncontrolling interests, Weirton indefinite idle, extinguishment of debt, acquisition-related costs and adjustments, arbitration decision, and other, net
Arrangement Agreement						Arrangement Agreement, by and between Stelco, Purchaser and Cleveland-Cliffs Inc., dated July 14, 2024
AOCI						Accumulated other comprehensive income (loss)
ASU						Accounting Standards Update
BOF						Basic oxygen furnace
Bridge Facility						Financing arrangement contemplated by the Commitment Letter under which Cleveland-Cliffs Inc. had the option to borrow certain funds in relation to the Stelco Acquisition
CHIPS Act						The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022
CO2e						Carbon dioxide equivalent
Commitment Letter						Commitment Letter, dated as of July 14, 2024, pursuant to which Wells Fargo Bank National Association, Wells Fargo Securities, LLC, and JP Morgan Chase Bank, N.A. committed to providing Cleveland-Cliffs Inc. with financing under a Bridge Facility
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act
DOE						U.S. Department of Energy
EAF						Electric arc furnace
EBITDA						Earnings before interest, taxes, depreciation and amortization
EPA						U.S. Environmental Protection Agency
EPS						Earnings per share
EV						Electric vehicle
Exchange Act						Securities Exchange Act of 1934, as amended
FASB						Financial Accounting Standards Board
FMSH Act						Federal Mine Safety and Health Act of 1977, as amended
GAAP						Accounting principles generally accepted in the United States
GHG						Greenhouse gas
GOES						Grain oriented electrical steel
HBI						Hot briquetted iron
HRC						Hot-rolled coil steel
Inflation Reduction Act						Inflation Reduction Act of 2022
Infrastructure and Jobs Act						Infrastructure Investment and Jobs Act of 2021
Metric ton (mt)						2,205 pounds
MSHA						Mine Safety and Health Administration of the U.S. Department of Labor
Net ton (nt)						2,000 pounds
NOES						Non-oriented electrical steel
OCED						Office of Clean Energy Demonstrations
OPEB						Other postretirement benefits
Platts 62% price						Platts IODEX 62% Fe Fines CFR North China
Purchaser						13421422 Canada Inc., a Canadian corporation and a direct, wholly-owned subsidiary of Cleveland-Cliffs Inc.
SEC						U.S. Securities and Exchange Commission
Section 232						Section 232 of the Trade Expansion Act of 1962 (as amended by the Trade Act of 1974)
Securities Act						Securities Act of 1933, as amended
Stelco						Stelco Holdings Inc., a Canadian corporation
Stelco Acquisition						The acquisition of all of the outstanding common shares of Stelco by the Company, as provided for in the Arrangement Agreement
SunCoke Middletown						Middletown Coke Company, LLC, a subsidiary of SunCoke Energy, Inc.
USMCA						United States-Mexico-Canada Agreement
USW						United Steelworkers
VIE						Variable interest entity

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PART I



ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION

CLEVELAND-CLIFFS INC. AND SUBSIDIARIES


(In millions, except share information)	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	39	$	198
Accounts receivable, net	1,583		1,840
Inventories	4,236		4,460
Other current assets	169		138
Total current assets	6,027		6,636
Non-current assets:
Property, plant and equipment, net	8,687		8,895
Goodwill	1,005		1,005
Pension and OPEB assets	378		329
Other non-current assets	699		672
TOTAL ASSETS	$	16,796	$	17,537
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,983	$	2,099
Accrued employment costs	413		511
Accrued expenses	379		380
Other current liabilities	480		518
Total current liabilities	3,255		3,508
Non-current liabilities:
Long-term debt	3,774		3,137
Pension and OPEB liabilities	666		821
Deferred income taxes	567		639
Other non-current liabilities	1,439		1,310
TOTAL LIABILITIES	9,701		9,415
Commitments and contingencies (See Note 17)
Equity:
Common shares - par value $0.125 per share
Authorized - 1,200,000,000 shares (2023 - 1,200,000,000 shares);
Issued - 531,051,530 shares (2023 - 531,051,530 shares);
Outstanding - 468,067,482 shares (2023 - 504,886,773 shares)	66		66
Capital in excess of par value of shares	4,875		4,861
Retained earnings	1,426		1,733
Cost of 62,984,048 common shares in treasury (2023 - 26,164,757 shares)	(1,153)		(430)
Accumulated other comprehensive income	1,640		1,657
Total Cliffs shareholders' equity	6,854		7,887
Noncontrolling interests	241		235
TOTAL EQUITY	7,095		8,122
TOTAL LIABILITIES AND EQUITY	$	16,796	$	17,537

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 September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)	2024		2023		2024		2023
Revenues	$	4,569	$	5,605	$	14,860	$	16,884
Operating costs:
Cost of goods sold	(4,673)		(5,125)		(14,517)		(15,661)
Selling, general and administrative expenses	(112)		(139)		(347)		(415)
Acquisition-related costs	(14)		(5)		(14)		(5)
Restructuring and other charges	(2)		—		(131)		—
Asset impairments	—		—		(79)		—
Miscellaneous – net	(27)		(11)		(63)		(26)
Total operating costs	(4,828)		(5,280)		(15,151)		(16,107)
Operating income (loss)	(259)		325		(291)		777
Other income (expense):
Interest expense, net	(102)		(70)		(235)		(226)
Loss on extinguishment of debt	—		—		(27)		—
Net periodic benefit credits other than service cost component	62		50		184		150
Changes in fair value of foreign currency contracts, net	(7)		—		(7)		—
Other non-operating income (expense)	—		(2)		3		4
Total other expense	(47)		(22)		(82)		(72)
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

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 (LOSS)

CLEVELAND-CLIFFS INC. AND SUBSIDIARIES


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Net income (loss)	$	(230)	$	275	$	(274)	$	589
Other comprehensive income (loss):
Changes in pension and OPEB, net of tax	(29)		(27)		(86)		(80)
Changes in derivative financial instruments, net of tax	2		31		69		(103)
Changes in foreign currency translation	1		—		—		—
Total other comprehensive income (loss)	(26)		4		(17)		(183)
Comprehensive income (loss)	(256)		279		(291)		406
Comprehensive income attributable to noncontrolling interests	(12)		(11)		(33)		(35)
Comprehensive income (loss) attributable to Cliffs shareholders	$	(268)	$	268	$	(324)	$	371

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


	Nine Months Ended September 30,
(In millions)	2024		2023
OPERATING ACTIVITIES
Net income (loss)	$	(274)	$	589
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	693		738
Restructuring and other charges	131		—
Asset impairments	79		—
Pension and OPEB credits	(157)		(119)
Loss on extinguishment of debt	27		—
Other	66		253
Changes in operating assets and liabilities:
Accounts receivable, net	258		(164)
Inventories	190		538
Income taxes	(46)		16
Pension and OPEB payments and contributions	(162)		(84)
Payables, accrued employment and accrued expenses	(217)		(95)
Other, net	(11)		(57)
Net cash provided by operating activities	577		1,615
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(490)		(481)
Other investing activities	13		11
Net cash used by investing activities	(477)		(470)
FINANCING ACTIVITIES
Repurchase of common shares	(733)		(152)
Proceeds from issuance of senior notes	1,421		750
Repayments of senior notes	(845)		—
Borrowings (repayments) under credit facilities, net	47		(1,539)
Debt issuance costs	(73)		(34)
Other financing activities	(76)		(165)
Net cash used by financing activities	(259)		(1,140)
Net increase (decrease) in cash and cash equivalents	(159)		5
Cash and cash equivalents at beginning of period	198		26
Cash and cash equivalents at end of period	$	39	$	31

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, 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
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 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, 2022	513.3	$	66	$	4,871	$	1,334	$	(310)	$	1,830	$	251	$	8,042
Comprehensive income (loss)	—	—		—		(57)		—		(179)		15		(221)
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	(6.5)	—		—		—		(95)		—		—		(95)
Stock and other incentive plans	0.1	—		9		—		3		—		—		12
Net distributions to noncontrolling interests	—	—		—		—		—		—		(14)		(14)
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

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 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. 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, 2023.

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 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.

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.

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 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. 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. 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.

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, 2023 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

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.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance requires additional annual and interim disclosures for income taxes. This new standard does not affect the

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recognition, measurement or financial statement presentation. The amendments are effective for fiscal years beginning after December 15, 2024.

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)

INVENTORIES

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


(In millions)	September 30, 2024		December 31, 2023
Product inventories
Finished and semi-finished goods	$	2,319	$	2,573
Raw materials	1,486		1,476
Total product inventories	3,805		4,049
Manufacturing supplies and critical spares	431		411
Inventories	$	4,236	$	4,460

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 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.

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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 incurred1	58		48		64		170
Cash payments	—		(2)		—		(2)
Non-cash	—		—		(64)		(64)
Balance as of March 31, 2024	$	58	$	46	$	—	$	104
Costs incurred2	23		2		15		40
Cash payments	(8)		(10)		—		(18)
Non-cash	—		—		(15)		(15)
Balance as of June 30, 2024	$	73	$	38	$	—	$	111
Costs incurred3	—		2		—		2
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.

CASH FLOW INFORMATION

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


	Nine Months Ended September 30,
(In millions)	2024		2023
Capital additions	$	557	$	508
Less:
Non-cash accruals	(58)		(98)
Equipment financed with seller	50		47
Right-of-use assets - finance leases	75		78
Cash paid for capital expenditures including deposits	$	490	$	481

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


	Nine Months Ended September 30,
(In millions)	2024		2023
Income taxes paid	$	13	$	91
Income tax refunds	(5)		(142)
Interest paid on debt obligations net of capitalized interest1	193		202

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

NOTE 3 - 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.

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The following table represents our Revenues by market:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Steelmaking:
Direct automotive	$	1,334	$	1,958	$	4,411	$	5,808
Infrastructure and manufacturing	1,160		1,427		3,973		4,315
Distributors and converters	1,317		1,321		4,131		4,020
Steel producers	608		737		1,846		2,234
Total Steelmaking	4,419		5,443		14,361		16,377
Other Businesses:
Direct automotive	123		133		411		415
Infrastructure and manufacturing	9		9		29		29
Distributors and converters	18		20		59		63
Total Other Businesses	150		162		499		507
Total revenues	$	4,569	$	5,605	$	14,860	$	16,884

The following tables represent our Revenues by product line:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Steelmaking:
Hot-rolled steel	$	1,003	$	1,269	$	3,246	$	3,747
Cold-rolled steel	671		651		2,131		2,038
Coated steel	1,377		1,748		4,546		5,154
Stainless and electrical steel	449		568		1,390		1,757
Plate	237		382		887		1,112
Slab and other steel products	276		322		929		1,015
Other	406		503		1,232		1,554
Total Steelmaking	4,419		5,443		14,361		16,377
Other Businesses:
Other	150		162		499		507
Total revenues	$	4,569	$	5,605	$	14,860	$	16,884

NOTE 4 - 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. 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 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 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. 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.

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Our results by segment are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Revenues:
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)
Total Adjusted EBITDA	$	124	$	614	$	861	$	1,632

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
Less:
Interest expense, net	(102)		(70)		(235)		(226)
Income tax benefit (expense)	76		(29)		99		(118)
Depreciation, depletion and amortization	(235)		(249)		(693)		(738)
Total EBITDA	31		623		555		1,671
Less:
EBITDA of noncontrolling interests1	20		20		56		60
Weirton indefinite idle2	(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)		—
Other, net	(19)		(8)		(24)		(16)
Total Adjusted EBITDA	$	124	$	614	$	861	$	1,632

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.

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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
Depreciation, depletion and amortization:
Steelmaking	$	(228)	$	(241)	$	(669)	$	(711)
Other Businesses	(7)		(8)		(24)		(27)
Total depreciation, depletion and amortization	$	(235)	$	(249)	$	(693)	$	(738)

Capital additions1:
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.

The following summarizes our assets by segment:


(In millions)	September 30, 2024		December 31, 2023
Assets:
Steelmaking	$	16,235	$	16,880
Other Businesses	637		657
Intersegment eliminations	(489)		(507)
Total segment assets	16,383		17,030
Corporate	413		507
Total assets	$	16,796	$	17,537

NOTE 5 - 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, 2024		December 31, 2023
Land, land improvements and mineral rights	$	1,389	$	1,389
Buildings	938		946
Equipment	9,916		9,680
Other	315		302
Construction in progress	714		590
Total property, plant and equipment1	13,272		12,907
Allowance for depreciation and depletion	(4,585)		(4,012)
Property, plant and equipment, net	$	8,687	$	8,895

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.

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NOTE 6 - GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES

GOODWILL

The following is a summary of Goodwill by segment:


(In millions)	September 30, 2024		December 31, 2023
Steelmaking	$	956	$	956
Other Businesses	49		49
Total goodwill	$	1,005	$	1,005

INTANGIBLE ASSETS AND LIABILITIES

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


	September 30, 2024						December 31, 2023
(In millions)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Intangible assets1:
Customer relationships	$	90	$	(22)	$	68	$	90	$	(18)	$	72
Developed technology	60		(17)		43		60		(14)		46
Trade names and trademarks	18		(6)		12		18		(5)		13
Mining permits	72		(28)		44		72		(28)		44
Supplier relationships	29		(5)		24		29		(3)		26
Total intangible assets	$	269	$	(78)	$	191	$	269	$	(68)	$	201
Intangible liabilities2:
Above-market supply contracts	$	(71)	$	28	$	(43)	$	(71)	$	24	$	(47)

1 Intangible assets are classified as Other non-current assets. Amortization related to mining permits 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 $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. Estimated future amortization expense is $3 million for the remainder of 2024 and $13 million annually for the years 2025 through 2029.

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. Estimated future income from amortization is $1 million for the remainder of 2024 and $5 million annually for the years 2025 through 2029.

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NOTE 7 - DEBT AND CREDIT FACILITIES

The following represents a summary of our long-term debt:


(In millions)
Debt Instrument	Issuer1	Annual Effective Interest Rate	September 30, 2024		December 31, 2023
Senior Secured Notes:
6.750% 2026 Senior Secured Notes	Cliffs	6.990%	$	—	$	829
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
6.750% 2030 Senior Notes	Cliffs	6.750%	750		750
4.875% 2031 Senior Notes	Cliffs	4.875%	325		325
7.000% 2032 Senior Notes	Cliffs	7.054%	1,425		—
6.250% 2040 Senior Notes	Cliffs	6.340%	235		235
ABL Facility	Cliffs2	Variable3	47		—
Total principal amount			3,835		3,192
Unamortized discounts and issuance costs			(61)		(55)
Total long-term debt			$	3,774	$	3,137

1 Unless otherwise noted, references in this column and throughout this NOTE 7 - 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 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%.

7.000% 2032 SENIOR NOTES OFFERING

On March 18, 2024, 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 $825 million aggregate principal amount of our 7.000% 2032 Senior Notes, which were issued at par. The 7.000% 2032 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 7.000% 2032 Senior Notes bear interest at a rate of 7.000% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2024. The 7.000% 2032 Senior Notes mature on March 15, 2032.

The 7.000% 2032 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 7.000% 2032 Senior Notes are guaranteed on a senior unsecured basis by our material direct and indirect wholly owned domestic subsidiaries. The 7.000% 2032 Senior Notes are structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries that do not guarantee the 7.000% 2032 Senior Notes.

The 7.000% 2032 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 7.000% 2032 Senior Notes. The 7.000% 2032 Senior Notes are redeemable prior to March 15, 2027, 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 7.000% 2032 Senior Notes prior to March 15, 2027, at a redemption price equal to 107.000% of the principal amount thereof with the net cash proceeds of one or more equity offerings. The 7.000% 2032 Senior Notes are redeemable beginning on March 15, 2027, at a redemption price equal to 103.500% of the principal amount thereof, decreasing to 101.750% on March 15, 2028, and are redeemable at par beginning on March 15, 2029. 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 7.000% 2032 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 7.000% 2032 Senior Notes contain certain customary covenants; however, there are no financial covenants.

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ABL FACILITY

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.

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


(In millions)	September 30, 2024
Available borrowing base on ABL Facility1	$	3,833
Borrowings	(47)
Letter of credit obligations2	(46)
Borrowing capacity available	$	3,740

1 As of September 30, 2024, 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 af