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

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Income (Loss) from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures includes the following components:



	(In Millions)
	2014			2013			2012
United States	$	(1,884.2	)	$	837.7		$	838.6
Foreign	(7,719.5		)	(348.4		)	(1,340.4		)
	$	(9,603.7	)	$	489.3		$	(501.8	)

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The components of the provision (benefit) for income taxes on continuing operations consist of the following:



	(In Millions)
	2014			2013			2012
Current provision (benefit):
United States federal	$	(159.9	)	$	101.3		$	71.1
United States state & local	(0.6		)	4.0			7.6
Foreign	17.2			87.9			50.2
	(143.3		)	193.2			128.9
Deferred provision (benefit):
United States federal	(258.9		)	23.3			221.2
United States state & local	(43.0		)	3.0			1.4
Foreign	(856.8		)	(164.4		)	(95.6		)
	(1,158.7		)	(138.1		)	127.0
Total provision on income (loss) from continuing operations	$	(1,302.0	)	$	55.1		$	255.9

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate is as follows:



	(In Millions)
	2014					2013					2012
Tax at U.S. statutory rate of 35 percent	$	(3,361.3	)	35.0	%	$	171.3		35.0	%	$	(175.6	)	35.0	%
Increase (decrease) due to:
Foreign exchange remeasurement	(4.1		)	—		(2.6		)	(0.5	)	62.3			(12.4	)
Non-taxable income related to noncontrolling interests	290.1			(3.0	)	(1.5		)	(0.3	)	61.0			(12.0	)
Impact of tax law change	13.0			(0.1	)	—			—		(357.1		)	71.2
Percentage depletion in excess of cost depletion	(87.9		)	0.9		(97.6		)	(19.9	)	(109.1		)	21.7
Impact of foreign operations	592.0			(6.2	)	(10.2		)	(2.1	)	65.2			(13.0	)
Income not subject to tax	(46.5		)	0.5		(106.6		)	(21.8	)	(108.0		)	21.5
Goodwill impairment	22.7			(0.2	)	20.5			4.2		202.2			(40.3	)
State taxes, net	(43.6		)	0.5		5.6			1.1		7.3			(1.5	)
Settlement of financial guaranty	(343.3		)	3.6		—			—		—			—
Manufacturer’s deduction	—			—		(7.9		)	(1.6	)	(4.7		)	0.9
Valuation allowance	1,660.6			(17.3	)	73.0			14.9		634.5			(126.5	)
Tax uncertainties	0.2			—		19.6			5.3		(14.8		)	2.9
Prior year adjustment in current year	(10.4		)	0.1		(11.4		)	(3.6	)	(5.7		)	1.1
Other items — net	16.5			(0.2	)	2.9			0.6		(1.6		)	0.4
Income tax (benefit) expense	$	(1,302.0	)	13.6	%	$	55.1		11.3	%	$	255.9		(51.0	)%

Income Taxes Other Than Continuing Operations Disclosure Text Block [Table Text Block]

The components of income taxes for other than continuing operations consisted of the following:



	(In Millions)
	2014			2013			2012
Other comprehensive (income) loss:
Pension/OPEB liability	$	39.8		$	100.0		$	13.8
Mark-to-market adjustments	3.6			2.0			1.7
Other	(1.1		)	(12.4		)	2.6
Total	$	42.3		$	89.6		$	18.1

Paid in capital — acquisition of noncontrolling interest	$	—		$	102.1		$	—
Paid in capital — stock based compensation	$	(4.8	)	$	3.5		$	(12.8	)
Discontinued Operations	$	—		$	(2.0	)	$	10.4

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Significant components of our deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows:



	(In Millions)
	2014			2013
Deferred tax assets:
Pensions	$	108.3		$	88.4
MRRT starting base allowance	—			300.3
Postretirement benefits other than pensions	63.0			58.0
Alternative minimum tax credit carryforwards	267.7			299.2
Investments in ventures	6.0			—
Asset retirement obligations	48.9			61.7
Operating loss carryforwards	1,083.5			524.4
Product inventories	32.3			16.4
Property, plant and equipment and mineral rights	901.6			56.0
State and local	41.9			—
Lease liabilities	14.1			31.9
Other liabilities	153.6			138.3
Total deferred tax assets before valuation allowance	2,720.9			1,574.6
Deferred tax asset valuation allowance	(2,224.5		)	(864.1		)
Net deferred tax assets	496.4			710.5
Deferred tax liabilities:
Property, plant and equipment and mineral rights	(20.0		)	(1,400.8		)
Investment in ventures	(198.0		)	(196.4		)
Intangible assets	(7.3		)	(33.5		)
Income tax uncertainties	(49.5		)	(48.5		)
Product inventories	(16.6		)	(12.8		)
Other assets	(80.2		)	(93.0		)
Total deferred tax liabilities	(371.6		)	(1,785.0		)
Net deferred tax assets (liabilities)	$	124.8		$	(1,074.5	)

Deferred Tax Assets and Liabilities by Location [Table Text Block]

The deferred tax amounts are classified in the Statements of Consolidated Financial Position as current or long-term consistently with the underlying asset or liability that generates the basis difference between financial reporting and tax. Following is a summary:



	(In Millions)
	2014		2013
Deferred tax assets:
United States	$	165.9	$	7.2
Foreign
Current	2.2		29.4
Long-term	12.0		41.5
Total deferred tax assets	180.1		78.1
Deferred tax liabilities:
United States	—		175.3
Foreign
Current	4.0		6.1
Long-term	51.3		971.2
Total deferred tax liabilities	55.3		1,152.6
Net deferred tax assets (liabilities)	$	124.8	$	(1,074.5	)

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	(In Millions)
	2014			2013		2012
Unrecognized tax benefits balance as of January 1	$	74.4		$	55.5	$	102.1
Increases for tax positions in prior years	3.4			13.6		2.7
Increases for tax positions in current year	2.5			5.3		11.1
Increase due to foreign exchange	(0.2		)	—		—
Settlements	(0.5		)	—		(60.4		)
Lapses in statutes of limitations	(3.7		)	—		—
Other	(1.2		)	—		—
Unrecognized tax benefits balance as of December 31	$	74.7		$	74.4	$	55.5