Cleveland-Cliffs Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2014

Dec. 31, 2013

The following represents the assets and liabilities of the Company measured at fair value at December 31, 2014 and 2013:



	(In Millions)
	December 31, 2014
Description	Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Derivative assets	—		—		63.2		63.2
Available-for-sale marketable securities	4.3		—		—		4.3
Total	$	4.3	$	—	$	63.2	$	67.5
Liabilities:
Derivative liabilities	$	—	$	—	$	11.8	$	11.8
Foreign exchange contracts	—		31.5		—		31.5
Total	$	—	$	31.5	$	11.8	$	43.3



	(In Millions)
	December 31, 2013
Description	Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash equivalents	$	85.0	$	—	$	—	$	85.0
Derivative assets	—		—		58.9		58.9
Available-for-sale marketable securities	21.4		—		—		21.4
Foreign exchange contracts	—		0.3		—		0.3
Total	$	106.4	$	0.3	$	58.9	$	165.6
Liabilities:
Derivative liabilities	$	—	$	2.1	$	10.3	$	12.4
Foreign exchange contracts	—		26.9		—		26.9
Total	$	—	$	29.0	$	10.3	$	39.3

Fair Value, Recurring and Nonrecurring, Valuation Techniques

The following table illustrates information about quantitative inputs and assumptions for the derivative assets and derivative liabilities categorized in Level 3 of the fair value hierarchy:

Qualitative/Quantitative Information About Level 3 Fair Value Measurements

($ in millions)

Fair Value at

Balance Sheet Location

Valuation Technique

Unobservable Input

Range or Point Estimate

(Weighted Average)

12/31/2014

Provisional Pricing Arrangements

11.8

Other current liabilities

Market Approach

Management's

Estimate of 62% Fe

$72

Customer Supply Agreement

63.2

Other current assets

Market Approach

Hot-Rolled Steel Estimate

$590 - $640 ($610)

Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation

The following tables represent a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013.



	(In Millions)
	Derivative Assets (Level 3)						Derivative Liabilities (Level 3)
	Year Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Beginning balance - January 1	$	58.9		$	62.4		$	(10.3	)	$	(11.3	)
Total gains (losses)
Included in earnings	187.8			152.3			(11.8		)	(10.3		)
Settlements	(183.5		)	(155.8		)	10.3			11.3
Transfers into Level 3	—			—			—			—
Transfers out of Level 3	—			—			—			—
Ending balance - December 31	$	63.2		$	58.9		$	(11.8	)	$	(10.3	)
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) on assets still held at the reporting date	$	187.8		$	152.3		$	(11.8	)	$	(10.3	)

Schedule Of Carrying Value And Fair Value Of Financial Instruments

A summary of the carrying amount and fair value of other financial instruments at December 31, 2014 and 2013 were as follows:



		(In Millions)
		December 31, 2014				December 31, 2013
	Classification	Carrying Value		Fair Value		Carrying Value			Fair Value
Long-term debt:
Senior notes—$700 million	Level 2	689.5		367.3		699.4			718.2
Senior notes—$1.3 billion	Level 2	1,279.9		704.0		1,289.6			1,404.9
Senior notes—$400 million	Level 2	393.7		228.1		398.4			432.1
Senior notes—$500 million	Level 2	477.4		312.0		496.5			523.8
Revolving loan	Level 2	—		—		—			—
Equipment Loan Facilities	Level 2	119.0		119.0		140.8			140.8
Fair Value Adjustment to Interest Rate Hedge	Level 2	2.8		2.8		(2.1		)	(2.1		)
Total long-term debt		$	2,962.3	$	1,733.2	$	3,022.6		$	3,217.7

Fair Value Measurements, Nonrecurring

The following tables present information about the impairment charges on both financial and nonfinancial assets that were measured on a fair value basis at December 31, 2014 and December 31, 2013. The table also indicates the fair value hierarchy of the valuation techniques used to determine such fair value.



	(In Millions)
	Year Ended December 31, 2014
Description	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Total Losses
Assets:
Goodwill impairment - Asia Pacific Iron Ore reporting unit	$	—	$	—	$	—	$	—	$	73.5
Other long-lived assets - Property, plant and equipment and Mineral rights:
Asia Pacific Iron Ore reporting unit	—		—		72.4		72.4		526.5
North American Coal reporting unit
CLCC thermal asset group	—		—		62.6		62.6		195.5
Pinnacle asset group	—		—		30.7		30.7		394.5
Oak Grove asset group	—		—		23.4		23.4		267.5
Eastern Canadian Iron Ore reporting unit
Bloom Lake asset group	—		—		187.9		187.9		7,043.7
Wabush asset group	—		—		42.7		42.7		132.6
Ferroalloys reporting unit	—		—		12.2		12.2		259.5
Other reporting units	—		—		—		—		19.2
Other long-lived assets - Intangibles and other long-term assets:
Asia Pacific Iron Ore reporting unit	—		—		7.0		7.0		24.2
Eastern Canadian Iron Ore reporting unit
Bloom Lake asset group	—		—		—		—		56.2
Wabush asset group	—		—		—		—		36.7
Ferroalloys reporting unit	—		—		—		—		0.3
Investment in ventures impairment - Global Exploration	—		—		—		—		9.2
	$	—	$	—	$	438.9	$	438.9	$	9,039.1



	(In Millions)
	Year Ended December 31, 2013
Description	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Total Losses
Assets:
Goodwill impairment - Ferroalloys reporting unit	$	—	$	—	$	—	$	—	$	80.9
Other long-lived assets - Property, plant and equipment	—		—		46.3		46.3		155.4
Other long-lived assets - Intangibles and long-term deposits	—		—		1.6		1.6		14.5
Investment in ventures impairment - Amapá	—		—		—		—		67.6
Total	$	—	$	—	$	47.9	$	47.9	$	318.4

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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