Annual report pursuant to Section 13 and 15(d)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

v3.3.1.900
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
12 Months Ended
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Fair Value Of Assets And Liabilities
The following represents the assets and liabilities of the Company measured at fair value at December 31, 2015 and 2014:
 
(In Millions)
 
December 31, 2015
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
$
30.0

 
$

 
$

 
$
30.0

Derivative assets

 

 
7.8

 
7.8

Total
$
30.0

 
$

 
$
7.8

 
$
37.8

Liabilities:

 

 

 

Derivative liabilities
$

 
$
0.6

 
$
3.4

 
$
4.0

Total
$

 
$
0.6

 
$
3.4

 
$
4.0

 
(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
$

 
$

 
$
9.5

 
$
9.5

Foreign exchange contracts

 
31.5

 

 
31.5

Total
$

 
$
31.5

 
$
9.5

 
$
41.0

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)
 
12/31/2015
Provisional Pricing Arrangements
 
$
2.0

 
Other current assets
 
Market Approach
 
Management's
Estimate of 62% Fe
 
$43
 
$
3.4

 
Other current liabilities
 
 
 
Customer Supply Agreement
 
$
5.8

 
Other current assets
 
Market Approach
 
Hot-Rolled Steel Estimate
 
$415 - $450 ($430)
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, 2015 and 2014.
 
(In Millions)
 
Derivative Assets (Level 3)
 
Derivative Liabilities
(Level 3)
 
Year Ended
December 31,
 
Year Ended
December 31,
 
2015
 
2014
 
2015
 
2014
Beginning balance - January 1
$
63.2

 
$
57.7

 
$
(9.5
)
 
$
(1.0
)
Total gains (losses)
 
 
 
 
 
 
 
Included in earnings
35.1

 
187.8

 
(61.0
)
 
(9.5
)
Settlements
(90.5
)
 
(182.3
)
 
67.1

 
1.0

Transfers into Level 3

 

 

 

Transfers out of Level 3

 

 

 

Ending balance - December 31
$
7.8

 
$
63.2

 
$
(3.4
)
 
$
(9.5
)
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
$
29.1

 
$
187.8

 
$
(3.4
)
 
$
(9.5
)
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, 2015 and 2014 were as follows:
 
 
 
(In Millions)
 
 
 
December 31, 2015
 
December 31, 2014
 
Classification
 
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair
Value
Long-term debt:
 
 
 
 
 
 
 
 
 
Senior Notes—$700 million
Level 1
 
$
410.6

 
$
69.4

 
$
686.0

 
$
367.3

Senior Notes—$1.3 billion
Level 1
 
787.9

 
137.4

 
1,270.5

 
704.0

Senior Notes—$400 million
Level 1
 
288.9

 
52.8

 
391.9

 
228.1

Senior Notes—$500 million
Level 1
 
309.1

 
87.1

 
475.3

 
312.0

Senior First Lien Notes—$540 million
Level 1
 
497.4

 
414.5

 

 

Senior Second Lien Notes—$544.2 million
Level 1
 
403.2

 
134.7

 

 

ABL Facility
Level 2
 

 

 

 

Fair Value Adjustment to Interest Rate Hedge
Level 2
 
2.3

 
2.3

 
2.8

 
2.8

Total long-term debt
 
 
$
2,699.4

 
$
898.2

 
$
2,826.5

 
$
1,614.2

Fair Value Measurements, Nonrecurring
The following tables present information about the impairment charges on both financial and nonfinancial assets and liabilities that were measured on a fair value basis at March 31, 2015 and December 31, 2014. There were no financial and non-financial assets and liabilities that were measured on a non-recurring fair value basis at December 31, 2015. The tables also indicate the fair value hierarchy of the valuation techniques used to determine such fair value.
 
 
(In Millions)
 
 
March 31, 2015
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 Gains
Liabilities:
 
 
 
 
 
 
 
 
 
 
$544.2 Million 7.75% 2020 Second Lien Notes
 
$

 
$
397.2

 
$

 
$
397.2

 
$
269.5

 
 
$

 
$
397.2

 
$

 
$
397.2

 
$
269.5

The $544.2 million 7.75 percent Second Lien Notes issued in the exchange offers were recorded as an extinguishment of debt as the change in debt terms was considered substantial. As such, the newly issued Second Lien Senior Notes were recorded at fair value at the issuance date. In order to determine the fair value of the Second Lien Senior Notes on the date of the exchange, we utilized the median bid-ask spread obtained from various investment banks for the exchange date. The bid-ask spread is indicative of the fair value of the notes on the exchange date. The 27.0 percent discount equated to a discount of $147.0 million on the issue value of $544.2 million, or an estimated fair value of $397.2 million.
 
 
(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

Other reporting units
 

 

 

 

 
11.3

Other long-lived assets -
Intangibles and other long-term assets:
 
 
 
 
 
 
 
 
 
 
Asia Pacific Iron Ore reporting unit
 

 

 
7.0

 
7.0

 
24.2

Investment in ventures
impairment - Global Exploration
 

 

 

 

 
9.2

 
 
$

 
$

 
$
79.4

 
$
79.4

 
$
644.7