Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v2.4.0.8
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2013
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, 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 four metallurgical coal operations and one thermal coal mine that provide metallurgical coal primarily to the integrated steel industry and thermal coal primarily to the energy industry. Inter-segment revenues have been eliminated in consolidation.
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 Ferroalloys and Global Exploration Group operating segments do not meet reportable segment disclosure requirements and, therefore, are not reported separately.
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, 2013, 2012, and 2011 including a reconciliation of segment sales margin to Income (Loss) from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures:
 
(In Millions)
 
2013
 
2012
 
2011
Revenues from product sales and services:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
2,667.9

 
47
 %
 
$
2,723.3

 
46
%
 
$
3,509.9

 
53
%
Eastern Canadian Iron Ore
978.7

 
17
 %
 
1,008.9

 
17
%
 
1,178.1

 
18
%
Asia Pacific Iron Ore
1,224.3

 
22
 %
 
1,259.3

 
22
%
 
1,363.5

 
21
%
North American Coal
821.9

 
14
 %
 
881.1

 
15
%
 
512.1

 
8
%
Other (including inter-segment revenue eliminations)
(1.4
)
 
—
 %
 
0.1

 
—
%
 
0.3

 
—
%
Total revenues from product sales and services
$
5,691.4

 
100
 %
 
$
5,872.7

 
100
%
 
$
6,563.9

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
Sales margin:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
901.9

 
 
 
$
976.2

 
 
 
$
1,679.3

 
 
Eastern Canadian Iron Ore
(103.3
)
 
 
 
(121.4
)
 
 
 
290.9

 
 
Asia Pacific Iron Ore
367.1

 
 
 
311.0

 
 
 
699.5

 
 
North American Coal
(14.5
)
 
 
 
(1.8
)
 
 
 
(58.4
)
 
 
Other (including inter-segment sales margin eliminations)
(1.9
)
 
 
 
8.1

 
 
 
(0.4
)
 
 
Sales margin
1,149.3

 
 
 
1,172.1

 
 
 
2,610.9

 
 
Other operating income (expense)
(478.3
)
 
 
 
(1,480.9
)
 
 
 
(314.1
)
 
 
Other income (expense)
(181.7
)
 
 
 
(193.0
)
 
 
 
(106.3
)
 
 
Income (loss) from continuing operations before income taxes and equity income (loss) from ventures
$
489.3

 
 
 
$
(501.8
)
 
 
 
$
2,190.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization:
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
120.3

 
 
 
$
100.9

 
 
 
$
86.2

 
 
Eastern Canadian Iron Ore
178.5

 
 
 
160.2

 
 
 
124.6

 
 
Asia Pacific Iron Ore
153.7

 
 
 
151.9

 
 
 
100.9

 
 
North American Coal
128.9

 
 
 
98.2

 
 
 
86.5

 
 
Other
11.9

 
 
 
14.6

 
 
 
28.7

 
 
Total depreciation, depletion and amortization
$
593.3

 
 
 
$
525.8

 
 
 
$
426.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital additions (1):
 
 
 
 
 
 
 
 
 
 
 
U.S. Iron Ore
$
53.3

 
 
 
$
168.8

 
 
 
$
191.4

 
 
Eastern Canadian Iron Ore
625.5

 
 
 
865.2

 
 
 
303.1

 
 
Asia Pacific Iron Ore
13.0

 
 
 
87.7

 
 
 
262.0

 
 
North American Coal
55.0

 
 
 
144.1

 
 
 
181.0

 
 
Other
5.5

 
 
 
69.5

 
 
 
23.4

 
 
Total capital additions
$
752.3

 
 
 
$
1,335.3

 
 
 
$
960.9

 
 
                                         
(1)    Includes capital lease additions and non-cash accruals. Refer to NOTE 21 - CASH FLOW INFORMATION.
A summary of assets by segment is as follows:
 
(In Millions)
 
December 31,
2013
 
December 31, 2012
 
December 31, 2011
Assets:
 
 
 
 
 
U.S. Iron Ore
$
1,671.6

 
$
1,735.1

 
$
1,691.8

Eastern Canadian Iron Ore
7,915.5

 
7,605.1

 
7,973.1

Asia Pacific Iron Ore
1,078.4

 
1,506.3

 
1,511.2

North American Coal
1,841.8

 
1,877.8

 
1,814.4

Other
455.6

 
570.9

 
1,017.6

Total segment assets
12,962.9

 
13,295.2

 
14,008.1

Corporate
159.0

 
279.7

 
533.6

Total assets
$
13,121.9

 
$
13,574.9

 
$
14,541.7


Included in the consolidated financial statements are the following amounts relating to geographic location:
 
(In Millions)
 
2013
 
2012
 
2011
Revenue
 
 
 
 
 
United States
$
1,857.6

 
$
2,108.5

 
$
2,774.1

China
1,909.4

 
2,008.2

 
2,114.5

Canada
871.2

 
728.1

 
914.3

Other countries
1,053.2

 
1,027.9

 
761.0

Total revenue
$
5,691.4

 
$
5,872.7

 
$
6,563.9

Property, Plant and Equipment, Net
 
 
 
 
 
United States
$
2,721.6

 
$
2,795.3

 
$
2,684.9

Australia
751.0

 
1,042.4

 
1,017.8

Canada
7,680.8

 
7,369.6

 
6,701.4

Total Property, Plant and Equipment, Net
$
11,153.4

 
$
11,207.3

 
$
10,404.1


Concentrations in Revenue
In 2013, one customer individually accounted for more than 10 percent of our consolidated product revenue. In 2012 and 2011, one customer in each year individually accounted for more than 10 percent of our consolidated product revenue. Total revenue from this customer accounted for more than 10 percent of our consolidated product revenues and represents approximately $1.0 billion, $923.7 million and $1.4 billion of our total consolidated product revenue in 2013, 2012 and 2011, 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 2013, 2012, and 2011:
 
 
2013
 
2012
 
2011
Revenue Category
 
 
 
 
 
 
Iron ore
 
80
%
 
81
%
 
88
%
Coal
 
13
%
 
13
%
 
8
%
Freight and venture partners’ cost reimbursements
 
7
%
 
6
%
 
4
%
Total revenue
 
100
%
 
100
%
 
100
%