Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v2.4.0.6
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2012
Segment Reporting [Abstract]  
SEGMENT REPORTING
NOTE 2 - SEGMENT REPORTING
Our Company’s primary operations are organized and managed according to product category and geographic location: U.S. Iron Ore, Eastern Canadian Iron Ore, Asia Pacific Iron Ore, North American Coal, Latin American Iron Ore, Ferroalloys and our Global Exploration Group. The U.S. Iron Ore segment is comprised of our interests in five U.S. mines that provide iron ore to the integrated steel industry. The Eastern Canadian Iron Ore segment is comprised of two Eastern Canadian mines that primarily provide iron ore to the seaborne market for Asian steel producers. The Asia Pacific Iron Ore segment is located in Western Australia and provides iron ore to the seaborne market for Asian steel producers. The North American Coal segment is comprised of our six metallurgical coal mines and one thermal coal mine that provide metallurgical coal primarily to the integrated steel industry and thermal coal primarily to the energy industry. There are no intersegment revenues.
The Latin American Iron Ore operating segment is comprised of our 30 percent Amapá interest in Brazil, which we expect the sale of to close during the first half of 2013. The Ferroalloys operating segment is comprised of our interests in chromite deposits held in Northern Ontario, Canada and the Global Exploration Group is focused on early involvement in exploration activities to identify new projects for future development or projects that add significant value to existing operations. The Asia Pacific Coal, Latin American Iron Ore, Ferroalloys and Global Exploration Group operating segments do not meet reportable segment disclosure requirements and, therefore, are not reported separately.
During the fourth quarter of 2012, we sold our 45 percent economic interest in Sonoma, which comprised the Asia Pacific Coal operating segment. Refer to NOTE 7 - DISCONTINUED OPERATIONS.
We evaluate segment performance based on sales margin, defined as revenues less cost of goods sold and operating expenses identifiable to each segment. This measure of operating performance is an effective measurement as we focus on reducing production costs throughout the Company.
The following table presents a summary of our reportable segments for the years ended December 31, 2012, 2011, and 2010, including a reconciliation of segment sales margin to Income (Loss) from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures:
 
(In Millions)
 
2012
 
2011
 
2010
Revenues from product sales and services:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
2,723.3

 
46
%
 
$
3,509.9

 
53
%
 
$
2,443.7

 
54
%
Eastern Canadian Iron Ore
1,008.9

 
17
%
 
1,178.1

 
18
%
 
477.7

 
11
%
Asia Pacific Iron Ore
1,259.3

 
22
%
 
1,363.5

 
21
%
 
1,123.9

 
25
%
North American Coal
881.1

 
15
%
 
512.1

 
8
%
 
438.2

 
10
%
Other
0.1

 
—
%
 
0.3

 
—
%
 
0.3

 
—
%
Total revenues from product sales and services
$
5,872.7

 
100
%
 
$
6,563.9

 
100
%
 
$
4,483.8

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
Sales margin:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
976.2

 
 
 
$
1,679.3

 
 
 
788.4

 
 
Eastern Canadian Iron Ore
(121.4
)
 
 
 
290.9

 
 
 
133.6

 
 
Asia Pacific Iron Ore
311.0

 
 
 
699.5

 
 
 
566.2

 
 
North American Coal
(1.8
)
 
 
 
(58.4
)
 
 
 
(28.6
)
 
 
Other
8.1

 
 
 
(0.4
)
 
 
 
(0.9
)
 
 
Sales margin
1,172.1

 
 
 
2,610.9

 
 
 
1,458.7

 
 
Other operating expense
(1,480.9
)
 
 
 
(314.1
)
 
 
 
(225.9
)
 
 
Other income (expense)
(193.0
)
 
 
 
(106.3
)
 
 
 
33.6

 
 
Income (loss) from continuing operations before income taxes and equity income (loss) from ventures
$
(501.8
)
 
 
 
$
2,190.5

 
 
 
1,266.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
100.9

 
 
 
$
86.2

 
 
 
61.7

 
 
Eastern Canadian Iron Ore
160.2

 
 
 
124.6

 
 
 
41.9

 
 
Asia Pacific Iron Ore
151.9

 
 
 
100.9

 
 
 
133.9

 
 
North American Coal
98.2

 
 
 
86.5

 
 
 
60.4

 
 
Other
14.6

 
 
 
28.7

 
 
 
24.4

 
 
Total depreciation, depletion and amortization
$
525.8

 
 
 
$
426.9

 
 
 
322.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital additions (1):
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
168.8

 
 
 
$
191.4

 
 
 
84.7

 
 
Eastern Canadian Iron Ore
865.2

 
 
 
303.1

 
 
 
18.8

 
 
Asia Pacific Iron Ore
87.7

 
 
 
262.0

 
 
 
53.6

 
 
North American Coal
144.1

 
 
 
181.0

 
 
 
89.5

 
 
Other
69.5

 
 
 
23.4

 
 
 
29.2

 
 
Total capital additions
$
1,335.3

 
 
 
$
960.9

 
 
 
275.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
1,735.1

 
 
 
1,691.8

 
 
 
1,537.1

 
 
Eastern Canadian Iron Ore
7,605.1

 
 
 
7,973.1

 
 
 
629.6

 
 
Asia Pacific Iron Ore
1,506.3

 
 
 
1,511.2

 
 
 
1,195.3

 
 
North American Coal
1,877.8

 
 
 
1,814.4

 
 
 
1,623.8

 
 
Other
570.9

 
 
 
1,017.6

 
 
 
1,257.8

 
 
Total segment assets
13,295.2

 
 
 
14,008.1

 
 
 
6,243.6

 
 
Corporate
279.7

 
 
 
533.6

 
 
 
1,534.6

 
 
Total assets
13,574.9

 
 
 
14,541.7

 
 
 
7,778.2

 
 
                                         
(1)    Includes capital lease additions and non-cash accruals. Refer to NOTE 21 - CASH FLOW INFORMATION
Included in the consolidated financial statements are the following amounts relating to geographic location:
 
(In Millions)
 
2012
 
2011
 
2010
Revenue
 
 
 
 
 
United States
$
2,108.5

 
$
2,774.1

 
$
1,966.3

China
2,008.2

 
2,114.5

 
1,212.6

Canada
728.1

 
914.3

 
696.5

Other countries
1,027.9

 
761.0

 
608.4

Total revenue
5,872.7

 
6,563.9

 
4,483.8

Property, Plant and Equipment, Net
 
 
 
 
 
United States
$
2,795.3

 
$
2,684.9

 
$
2,498.8

Australia
1,042.4

 
1,017.8

 
973.7

Canada
7,369.6

 
6,701.4

 
506.7

Total Property, Plant and Equipment, Net
11,207.3

 
10,404.1

 
3,979.2


Concentrations in Revenue
In 2012, one customer individually accounted for more than 10 percent of our consolidated product revenue. In 2011 and 2010, one customer and three customers, respectively, individually accounted for more than 10 percent of our consolidated product revenue. Total revenue from those customers accounted for more than 10 percent of our consolidated product revenues and represents approximately $923.7 million, $1.4 billion and $1.8 billion of our total consolidated product revenue in 2012, 2011 and 2010, respectively, and is attributable to our U.S. Iron Ore, Eastern Canadian Iron Ore and North American Coal business segments.
The following table represents the percentage of our total revenue contributed by each category of products and services in 2012, 2011, and 2010:
 
 
2012
 
2011
 
2010
Revenue Category
 
 
 
 
 
 
Iron ore
 
81
%
 
88
%
 
84
%
Coal
 
13
%
 
8
%
 
9
%
Freight and venture partners’ cost reimbursements
 
6
%
 
4
%
 
7
%
Total revenue
 
100
%
 
100
%
 
100
%