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

Annual report pursuant to Section 13 and 15(d)

RELATED PARTIES

Cleveland-Cliffs Inc.

ArcelorMittal USA

U.S. Steel

RELATED PARTIES

12 Months Ended

Dec. 31, 2019

NOTE 16 - RELATED PARTIES

Hibbing is a co-owned joint venture with companies that are integrated steel producers or their subsidiaries. In 2018, we tendered our resignation as the mine manager of the Hibbing mine and we transitioned this role to the majority owner in August 2019. The following is a summary of the mine ownership of the co-owned iron ore mine at December 31, 2019:

Product revenues from related parties were as follows:



	(In Millions)
	Year Ended December 31,
	2019			2018			2017
Product revenues from related parties	$	915.3		$	1,234.5		$	806.7
Total product revenues	1,848.1			2,172.3			1,644.6
Related party product revenue as a percent of total product revenue	49.5		%	56.8		%	49.1		%

The following table presents the classification of related party assets and liabilities in the Statements of Consolidated Financial Position:



	(In Millions)
	December 31,
Balance Sheet Location of Assets (Liabilities)	2019			2018
Accounts receivable, net	$	31.1		$	176.0
Derivative assets	44.5			89.3
Other current liabilities	(2.0		)	(45.3		)
	$	73.6		$	220.0

Derivative assets

A supply agreement with one customer provides for supplemental revenue or refunds to the customer based on the hot-rolled coil steel price at the time the product is consumed in the customer’s blast furnace. The supplemental pricing is characterized as a freestanding derivative. Refer to NOTE 12 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES for further information.

Other current liabilities

During 2017, our ownership interest in Empire increased to 100% as we reached an agreement to distribute the noncontrolling interest net assets of $132.7 million to ArcelorMittal USA, in exchange for its interest in Empire. The net assets were agreed to be distributed in three installments of $44.2 million each, the balance of which was recorded in Other current liabilities in the Statements of Consolidated Financial Position. The final installment was paid in August 2019.