Cleveland-Cliffs Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES (Notes)

GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES (Notes)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill

The increase in the balance of Goodwill as of June 30, 2020, compared to December 31, 2019, is due to the preliminary assignment of $137.2 million to Goodwill in 2020 based on the preliminary purchase price allocation for the acquisition of AK Steel. The carrying amount of goodwill related to our Mining and Pelletizing segment was $2.1 million as of both June 30, 2020 and December 31, 2019.

Intangible Assets and Liabilities

The following is a summary of our intangible assets and liabilities:



		(In Millions)
	Classification¹	Gross Amount			Accumulated Amortization			Net Amount
As of June 30, 2020
Intangible assets:
Customer relationships	Intangible assets, net	$	77.0		$	(1.5	)	$	75.5
Developed technology	Intangible assets, net	60.0			(1.2		)	58.8
Trade names and trademarks	Intangible assets, net	11.0			(0.4		)	10.6
Mining permits	Intangible assets, net	72.2			(24.5		)	47.7
Total intangible assets		$	220.2		$	(27.6	)	$	192.6
Intangible liabilities:
Above-market supply contracts	Intangible liabilities, net	$	(75.0	)	$	2.7		$	(72.3	)

As of December 31, 2019
Intangible assets:
Mining permits	Intangible assets, net	$	72.2		$	(24.1	)	$	48.1

¹Amortization of intangible liabilities related to above-market supply contracts and intangible assets related to mining permits is recognized in Cost of goods sold. Amortization of all other intangible assets is recognized in Selling, general and administrative expenses.

Amortization expense related to intangible assets was $2.4 million and $3.5 million for the three and six months ended June 30, 2020, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30, 2019, respectively.

Estimated future amortization expense related to intangible assets at June 30, 2020 is as follows:



	(In Millions)
Years ending December 31,
2020 (remaining period of the year)	$	5.0
2021	10.0
2022	10.0
2023	10.0
2024	10.0
2025	10.0

Income from amortization related to the intangible liabilities was $0.6 million and $2.7 million for the three and six months ended June 30, 2020, respectively.

Estimated future amortization income related to the intangible liabilities at June 30, 2020 is as follows:



	(In Millions)
Years ending December 31,
2020 (remaining period of the year)	$	4.1
2021	8.2
2022	8.2
2023	8.2
2024	8.2
2025	8.2