Cleveland-Cliffs Reports Second-Quarter 2024 Results
Second-Quarter 2024 Highlights
-
Revenues of
$5.1 billion - Steel shipments of 4.0 million net tons
-
Net income of
$9 million and adjusted net income1 of$50 million -
Adjusted EPS1 of
$0.11 per diluted share -
Adjusted EBITDA2 of
$323 million -
Net debt3 decrease of
$237 million to$3.4 billion -
Cash flow from operations of
$519 million -
Free cash flow4 of
$362 million - Repurchased7.5 million shares
-
Liquidity of
$3.7 billion as ofJune 30, 2024
Second-quarter 2024 revenues were
For the second quarter of 2024, the Company recorded GAAP EPS of
Second-quarter 2024 Adjusted EBITDA2 was
During the second quarter of 2024, the Company repurchased 7.5 million CLF common shares under the previously authorized
Cliffs’ Chairman, President and CEO
Steelmaking Segment Results |
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended |
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
External Sales Volumes - In Thousands |
|
|
|
|
|
|
|
|
|
||||||||||
Steel Products (net tons) |
|
3,989 |
|
|
|
4,202 |
|
|
|
7,929 |
|
|
|
8,287 |
|
|
|
3,940 |
|
Selling Price - Per Net Ton |
|
|
|
|
|
|
|
|
|
||||||||||
Average net selling price per net ton of steel products |
$ |
1,125 |
|
|
$ |
1,255 |
|
|
$ |
1,150 |
|
|
$ |
1,193 |
|
|
$ |
1,175 |
|
Operating Results - In Millions |
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
$ |
4,915 |
|
|
$ |
5,808 |
|
|
$ |
9,942 |
|
|
$ |
10,934 |
|
|
$ |
5,027 |
|
Cost of goods sold |
|
(4,770 |
) |
|
|
(5,179 |
) |
|
|
(9,527 |
) |
|
|
(10,211 |
) |
|
|
(4,757 |
) |
Gross margin |
$ |
145 |
|
|
$ |
629 |
|
|
$ |
415 |
|
|
$ |
723 |
|
|
$ |
270 |
|
Second-quarter 2024 steel product sales volumes of 4.0 million net tons consisted of 35% hot-rolled, 29% coated, 16% cold-rolled, 5% plate, 4% stainless and electrical, and 11% other, including slabs and rail.
Steelmaking revenues of
Liquidity and Cash Flow
As of
Outlook
Cliffs is lowering its full-year 2024 expected capital expenditures range to
In addition, the Company's objective of year-over-year steel unit cost reductions of approximately
About
Forward-Looking Statements
This release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry or our businesses, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: continued volatility of steel, iron ore and scrap metal market prices, which directly and indirectly impact the prices of the products that we sell to our customers; uncertainties associated with the highly competitive and cyclical steel industry and our reliance on the demand for steel from the automotive industry; potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity, oversupply of iron ore, prevalence of steel imports and reduced market demand; severe financial hardship, bankruptcy, temporary or permanent shutdowns or operational challenges of one or more of our major customers, key suppliers or contractors, which, among other adverse effects, could disrupt our operations or lead to reduced demand for our products, increased difficulty collecting receivables, and customers and/or suppliers asserting force majeure or other reasons for not performing their contractual obligations to us; risks related to
For additional factors affecting the business of Cliffs, refer to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended
|
|||||||||||||||||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED OPERATIONS |
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended |
||||||||||||||
(In millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Revenues |
$ |
5,092 |
|
|
$ |
5,984 |
|
|
$ |
10,291 |
|
|
$ |
11,279 |
|
|
$ |
5,199 |
|
Operating costs: |
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold |
|
(4,930 |
) |
|
|
(5,340 |
) |
|
|
(9,844 |
) |
|
|
(10,536 |
) |
|
|
(4,914 |
) |
Selling, general and administrative expenses |
|
(103 |
) |
|
|
(149 |
) |
|
|
(235 |
) |
|
|
(276 |
) |
|
|
(132 |
) |
Restructuring and other charges |
|
(25 |
) |
|
|
— |
|
|
|
(129 |
) |
|
|
— |
|
|
|
(104 |
) |
Asset impairments |
|
(15 |
) |
|
|
— |
|
|
|
(79 |
) |
|
|
— |
|
|
|
(64 |
) |
Miscellaneous – net |
|
(13 |
) |
|
|
(12 |
) |
|
|
(36 |
) |
|
|
(15 |
) |
|
|
(23 |
) |
Total operating costs |
|
(5,086 |
) |
|
|
(5,501 |
) |
|
|
(10,323 |
) |
|
|
(10,827 |
) |
|
|
(5,237 |
) |
Operating income (loss) |
|
6 |
|
|
|
483 |
|
|
|
(32 |
) |
|
|
452 |
|
|
|
(38 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
(69 |
) |
|
|
(79 |
) |
|
|
(133 |
) |
|
|
(156 |
) |
|
|
(64 |
) |
Loss on extinguishment of debt |
|
(6 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(21 |
) |
Net periodic benefit credits other than service cost component |
|
62 |
|
|
|
50 |
|
|
|
122 |
|
|
|
100 |
|
|
|
60 |
|
Other non-operating income |
|
1 |
|
|
|
4 |
|
|
|
3 |
|
|
|
6 |
|
|
|
2 |
|
Total other expense |
|
(12 |
) |
|
|
(25 |
) |
|
|
(35 |
) |
|
|
(50 |
) |
|
|
(23 |
) |
Income (loss) from continuing operations before income taxes |
|
(6 |
) |
|
|
458 |
|
|
|
(67 |
) |
|
|
402 |
|
|
|
(61 |
) |
Income tax benefit (expense) |
|
15 |
|
|
|
(102 |
) |
|
|
23 |
|
|
|
(89 |
) |
|
|
8 |
|
Income (loss) from continuing operations |
|
9 |
|
|
|
356 |
|
|
|
(44 |
) |
|
|
313 |
|
|
|
(53 |
) |
Income from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Net income (loss) |
|
9 |
|
|
|
356 |
|
|
|
(44 |
) |
|
|
314 |
|
|
|
(53 |
) |
Income attributable to noncontrolling interests |
|
(7 |
) |
|
|
(9 |
) |
|
|
(21 |
) |
|
|
(24 |
) |
|
|
(14 |
) |
Net income (loss) attributable to Cliffs shareholders |
$ |
2 |
|
|
$ |
347 |
|
|
$ |
(65 |
) |
|
$ |
290 |
|
|
$ |
(67 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - basic |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations |
$ |
0.00 |
|
|
$ |
0.68 |
|
|
$ |
(0.13 |
) |
|
$ |
0.56 |
|
|
$ |
(0.14 |
) |
Discontinued operations |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.68 |
|
|
$ |
(0.13 |
) |
|
$ |
0.56 |
|
|
$ |
(0.14 |
) |
Earnings (loss) per common share attributable to Cliffs shareholders - diluted |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations |
$ |
0.00 |
|
|
$ |
0.67 |
|
|
$ |
(0.13 |
) |
|
$ |
0.56 |
|
|
$ |
(0.14 |
) |
Discontinued operations |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.67 |
|
|
$ |
(0.13 |
) |
|
$ |
0.56 |
|
|
$ |
(0.14 |
) |
The sum of quarterly EPS may not equal EPS for the year-to-date period based on changes in share count due to discrete quarterly calculations. |
|
|||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION |
|||||
|
|||||
(In millions) |
|
|
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
110 |
|
$ |
198 |
Accounts receivable, net |
|
1,773 |
|
|
1,840 |
Inventories |
|
4,199 |
|
|
4,460 |
Other current assets |
|
110 |
|
|
138 |
Total current assets |
|
6,192 |
|
|
6,636 |
Non-current assets: |
|
|
|
||
Property, plant and equipment, net |
|
8,728 |
|
|
8,895 |
|
|
1,005 |
|
|
1,005 |
Pension and OPEB assets |
|
354 |
|
|
329 |
Other non-current assets |
|
649 |
|
|
672 |
TOTAL ASSETS |
$ |
16,928 |
|
$ |
17,537 |
LIABILITIES |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
2,080 |
|
$ |
2,099 |
Accrued employment costs |
|
431 |
|
|
511 |
Accrued expenses |
|
296 |
|
|
380 |
Other current liabilities |
|
511 |
|
|
518 |
Total current liabilities |
|
3,318 |
|
|
3,508 |
Non-current liabilities: |
|
|
|
||
Long-term debt |
|
3,507 |
|
|
3,137 |
Pension and OPEB liabilities |
|
757 |
|
|
821 |
Deferred income taxes |
|
621 |
|
|
639 |
Other non-current liabilities |
|
1,353 |
|
|
1,310 |
TOTAL LIABILITIES |
|
9,556 |
|
|
9,415 |
TOTAL EQUITY |
|
7,372 |
|
|
8,122 |
TOTAL LIABILITIES AND EQUITY |
$ |
16,928 |
|
$ |
17,537 |
|
|||||||||||||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
9 |
|
|
$ |
356 |
|
|
$ |
(44 |
) |
|
$ |
314 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation, depletion and amortization |
|
228 |
|
|
|
247 |
|
|
|
458 |
|
|
|
489 |
|
Restructuring and other charges |
|
25 |
|
|
|
— |
|
|
|
129 |
|
|
|
— |
|
Asset impairments |
|
15 |
|
|
|
— |
|
|
|
79 |
|
|
|
— |
|
Pension and OPEB credits |
|
(53 |
) |
|
|
(39 |
) |
|
|
(104 |
) |
|
|
(79 |
) |
Loss on extinguishment of debt |
|
6 |
|
|
|
— |
|
|
|
27 |
|
|
|
— |
|
Other |
|
3 |
|
|
|
55 |
|
|
|
47 |
|
|
|
90 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
94 |
|
|
|
(76 |
) |
|
|
67 |
|
|
|
(333 |
) |
Inventories |
|
235 |
|
|
|
196 |
|
|
|
227 |
|
|
|
403 |
|
Income taxes |
|
(11 |
) |
|
|
154 |
|
|
|
(12 |
) |
|
|
169 |
|
Pension and OPEB payments and contributions |
|
(30 |
) |
|
|
(28 |
) |
|
|
(62 |
) |
|
|
(58 |
) |
Payables, accrued employment and accrued expenses |
|
(6 |
) |
|
|
12 |
|
|
|
(176 |
) |
|
|
(78 |
) |
Other, net |
|
4 |
|
|
|
10 |
|
|
|
25 |
|
|
|
(69 |
) |
Net cash provided by operating activities |
|
519 |
|
|
|
887 |
|
|
|
661 |
|
|
|
848 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Purchase of property, plant and equipment |
|
(157 |
) |
|
|
(131 |
) |
|
|
(339 |
) |
|
|
(319 |
) |
Other investing activities |
|
5 |
|
|
|
6 |
|
|
|
8 |
|
|
|
9 |
|
Net cash used by investing activities |
|
(152 |
) |
|
|
(125 |
) |
|
|
(331 |
) |
|
|
(310 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Repurchase of common shares |
|
(124 |
) |
|
|
(94 |
) |
|
|
(733 |
) |
|
|
(94 |
) |
Proceeds from issuance of senior notes |
|
— |
|
|
|
750 |
|
|
|
825 |
|
|
|
750 |
|
Repayments of senior notes |
|
(193 |
) |
|
|
— |
|
|
|
(845 |
) |
|
|
— |
|
Borrowings (repayments) under credit facilities, net |
|
28 |
|
|
|
(1,338 |
) |
|
|
370 |
|
|
|
(1,031 |
) |
Debt issuance costs |
|
— |
|
|
|
(34 |
) |
|
|
(13 |
) |
|
|
(34 |
) |
Other financing activities |
|
2 |
|
|
|
(71 |
) |
|
|
(22 |
) |
|
|
(121 |
) |
Net cash used by financing activities |
|
(287 |
) |
|
|
(787 |
) |
|
|
(418 |
) |
|
|
(530 |
) |
Net increase (decrease) in cash and cash equivalents |
|
80 |
|
|
|
(25 |
) |
|
|
(88 |
) |
|
|
8 |
|
Cash and cash equivalents at beginning of period |
|
30 |
|
|
|
59 |
|
|
|
198 |
|
|
|
26 |
|
Cash and cash equivalents at end of period |
$ |
110 |
|
|
$ |
34 |
|
|
$ |
110 |
|
|
$ |
34 |
|
1
|
|||||||||||||||||||
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE RECONCILIATION |
|||||||||||||||||||
|
|||||||||||||||||||
In addition to the consolidated financial statements presented in accordance with |
|||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended |
||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Net income (loss) attributable to Cliffs shareholders |
$ |
2 |
|
|
$ |
347 |
|
|
$ |
(65 |
) |
|
$ |
290 |
|
|
$ |
(67 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(40 |
) |
|
|
— |
|
|
|
(217 |
) |
|
|
— |
|
|
|
(177 |
) |
Loss on extinguishment of debt |
|
(6 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(21 |
) |
Other, net |
|
(1 |
) |
|
|
(8 |
) |
|
|
(5 |
) |
|
|
(10 |
) |
|
|
(4 |
) |
Income tax effect |
|
(1 |
) |
|
|
2 |
|
|
|
47 |
|
|
|
2 |
|
|
|
48 |
|
Adjusted net income attributable to Cliffs shareholders |
$ |
50 |
|
|
$ |
353 |
|
|
$ |
137 |
|
|
$ |
298 |
|
|
$ |
87 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - diluted |
$ |
0.00 |
|
|
$ |
0.67 |
|
|
$ |
(0.13 |
) |
|
$ |
0.56 |
|
|
$ |
(0.14 |
) |
Adjusted earnings per common share attributable to Cliffs shareholders - diluted |
$ |
0.11 |
|
|
$ |
0.69 |
|
|
$ |
0.28 |
|
|
$ |
0.58 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
APrimarily includes asset impairments, asset retirement obligation charges and employee-related costs. |
|||||||||||||||||||
The sum of quarterly EPS may not equal EPS for the year-to-date period based on changes in share count due to discrete quarterly calculations. |
2
|
|||||||||||||||||||
NON-GAAP RECONCILIATION - EBITDA AND ADJUSTED EBITDA |
|||||||||||||||||||
|
|||||||||||||||||||
In addition to the consolidated financial statements presented in accordance with |
|||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended |
||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Net income (loss) |
$ |
9 |
|
|
$ |
356 |
|
|
$ |
(44 |
) |
|
$ |
314 |
|
|
$ |
(53 |
) |
Less: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
(69 |
) |
|
|
(79 |
) |
|
|
(133 |
) |
|
|
(156 |
) |
|
|
(64 |
) |
Income tax benefit (expense) |
|
15 |
|
|
|
(102 |
) |
|
|
23 |
|
|
|
(89 |
) |
|
|
8 |
|
Depreciation, depletion and amortization |
|
(228 |
) |
|
|
(247 |
) |
|
|
(458 |
) |
|
|
(489 |
) |
|
|
(230 |
) |
Total EBITDA |
$ |
291 |
|
|
$ |
784 |
|
|
$ |
524 |
|
|
$ |
1,048 |
|
|
$ |
233 |
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA of noncontrolling interests |
$ |
15 |
|
|
$ |
17 |
|
|
$ |
36 |
|
|
$ |
40 |
|
|
$ |
21 |
|
|
|
(40 |
) |
|
|
— |
|
|
|
(217 |
) |
|
|
— |
|
|
|
(177 |
) |
Loss on extinguishment of debt |
|
(6 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(21 |
) |
Other, net |
|
(1 |
) |
|
|
(8 |
) |
|
|
(5 |
) |
|
|
(10 |
) |
|
|
(4 |
) |
Total Adjusted EBITDA |
$ |
323 |
|
|
$ |
775 |
|
|
$ |
737 |
|
|
$ |
1,018 |
|
|
$ |
414 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA of noncontrolling interests includes the following: |
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling interests |
$ |
7 |
|
|
$ |
9 |
|
|
$ |
21 |
|
|
$ |
24 |
|
|
$ |
14 |
|
Depreciation, depletion and amortization |
|
8 |
|
|
|
8 |
|
|
|
15 |
|
|
|
16 |
|
|
|
7 |
|
EBITDA of noncontrolling interests |
$ |
15 |
|
|
$ |
17 |
|
|
$ |
36 |
|
|
$ |
40 |
|
|
$ |
21 |
|
3
|
||||||||
NON-GAAP RECONCILIATION - NET DEBT |
||||||||
|
||||||||
Net debt is a non-GAAP financial measure that management uses in evaluating financial position. Net debt is defined as long-term debt less cash and cash equivalents. Management believes net debt is an important measure of the Company’s financial position due to the amount of cash and cash equivalents on hand. The presentation of this measure is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with |
||||||||
(In millions) |
2024 |
|
2024 |
|
2023 |
|||
Long-term debt |
$ |
3,507 |
|
$ |
3,664 |
|
$ |
3,137 |
Less: Cash and cash equivalents |
|
110 |
|
|
30 |
|
|
198 |
Net debt |
$ |
3,397 |
|
$ |
3,634 |
|
$ |
2,939 |
4
|
|||||||||||||||
NON-GAAP RECONCILIATION - FREE CASH FLOW |
|||||||||||||||
|
|||||||||||||||
Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less purchase of property, plant and equipment. Management believes it is an important measure to assess the cash generation available to service debt, strategic initiatives or other financing activities. The following table provides a reconciliation of operating cash flows to free cash flows: |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
519 |
|
|
$ |
887 |
|
|
|
661 |
|
|
|
848 |
|
Purchase of property, plant and equipment |
|
(157 |
) |
|
|
(131 |
) |
|
|
(339 |
) |
|
|
(319 |
) |
Free cash flow |
$ |
362 |
|
|
$ |
756 |
|
|
$ |
322 |
|
|
$ |
529 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240722555045/en/
MEDIA CONTACT:
Senior Director, Corporate Communications
(216) 694-5316
INVESTOR CONTACT:
Director, Investor Relations
(216) 694-7719
Source: