Cleveland-Cliffs Reports Third-Quarter 2024 Results
Third-Quarter 2024 Highlights
-
Revenues of
$4.6 billion - Steel shipments of 3.8 million net tons
-
GAAP net loss of
$230 million and adjusted net loss1 of$156 million -
Adjusted EBITDA2 of
$124 million -
Does not include Stelco's third-quarter adjusted EBITDA3 of
US$64 million and adjusted EBITDA3 margin of 13% -
Liquidity of
$3.8 billion as ofSeptember 30, 2024
Third-quarter 2024 revenues were
Cliffs’ Chairman, President and CEO
Steelmaking Segment Results
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three Months
|
||||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
External Sales Volumes - In Thousands |
|
|
|
|
|
|
|
|
|
||||||||||
Steel Products (net tons) |
|
3,840 |
|
|
|
4,106 |
|
|
|
11,769 |
|
|
|
12,393 |
|
|
|
3,989 |
|
Selling Price - Per Net Ton |
|
|
|
|
|
|
|
|
|
||||||||||
Average net selling price per net ton of steel products |
$ |
1,045 |
|
|
$ |
1,203 |
|
|
$ |
1,116 |
|
|
$ |
1,196 |
|
|
$ |
1,125 |
|
Operating Results - In Millions |
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
$ |
4,419 |
|
|
$ |
5,443 |
|
|
$ |
14,361 |
|
|
$ |
16,377 |
|
|
$ |
4,915 |
|
Cost of goods sold* |
|
(4,533 |
) |
|
|
(4,970 |
) |
|
|
(14,060 |
) |
|
|
(15,181 |
) |
|
|
(4,770 |
) |
Gross margin |
$ |
(114 |
) |
|
$ |
473 |
|
|
$ |
301 |
|
|
$ |
1,196 |
|
|
$ |
145 |
|
*Includes |
Third-quarter 2024 steel product sales volumes of 3.8 million net tons consisted of 36% hot-rolled, 28% coated, 17% cold-rolled, 4% plate, 4% stainless and electrical, and 11% other, including slabs and rail.
Steelmaking revenues of
Stelco Third-Quarter Highlights 3
Cliffs' acquisition of Stelco closed on
- Steel shipments of 639,000 net tons, including 66% hot-rolled
-
Revenues of
US$480 million -
Steel average selling price of
US$725 per net ton -
Adjusted EBITDA of
US$64 million -
Capital expenditures of
US$32 million
Capital Expenditures Outlook
Cliffs lowered its full-year 2024 expected capital expenditures range by
Additionally, Cliffs expects standalone (excluding Stelco) full-year 2025 capital expenditures to be approximately
Sustaining capital spend from Stelco is expected to be 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
FINANCIAL TABLES FOLLOW
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED OPERATIONS |
|||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three Months
|
||||||||||||||
(In millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Revenues |
$ |
4,569 |
|
|
$ |
5,605 |
|
|
$ |
14,860 |
|
|
$ |
16,884 |
|
|
$ |
5,092 |
|
Operating costs: |
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold |
|
(4,673 |
) |
|
|
(5,125 |
) |
|
|
(14,517 |
) |
|
|
(15,661 |
) |
|
|
(4,930 |
) |
Selling, general and administrative expenses |
|
(112 |
) |
|
|
(139 |
) |
|
|
(347 |
) |
|
|
(415 |
) |
|
|
(103 |
) |
Acquisition-related costs |
|
(14 |
) |
|
|
(5 |
) |
|
|
(14 |
) |
|
|
(5 |
) |
|
|
— |
|
Restructuring and other charges |
|
(2 |
) |
|
|
— |
|
|
|
(131 |
) |
|
|
— |
|
|
|
(25 |
) |
Asset impairments |
|
— |
|
|
|
— |
|
|
|
(79 |
) |
|
|
— |
|
|
|
(15 |
) |
Miscellaneous – net |
|
(27 |
) |
|
|
(11 |
) |
|
|
(63 |
) |
|
|
(26 |
) |
|
|
(13 |
) |
Total operating costs |
|
(4,828 |
) |
|
|
(5,280 |
) |
|
|
(15,151 |
) |
|
|
(16,107 |
) |
|
|
(5,086 |
) |
Operating income (loss) |
|
(259 |
) |
|
|
325 |
|
|
|
(291 |
) |
|
|
777 |
|
|
|
6 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
(102 |
) |
|
|
(70 |
) |
|
|
(235 |
) |
|
|
(226 |
) |
|
|
(69 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(6 |
) |
Net periodic benefit credits other than service cost component |
|
62 |
|
|
|
50 |
|
|
|
184 |
|
|
|
150 |
|
|
|
62 |
|
Changes in fair value of foreign currency contracts, net |
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
Other non-operating income (expense) |
|
— |
|
|
|
(2 |
) |
|
|
3 |
|
|
|
4 |
|
|
|
1 |
|
Total other expense |
|
(47 |
) |
|
|
(22 |
) |
|
|
(82 |
) |
|
|
(72 |
) |
|
|
(12 |
) |
Income (loss) from continuing operations before income taxes |
|
(306 |
) |
|
|
303 |
|
|
|
(373 |
) |
|
|
705 |
|
|
|
(6 |
) |
Income tax benefit (expense) |
|
76 |
|
|
|
(29 |
) |
|
|
99 |
|
|
|
(118 |
) |
|
|
15 |
|
Income (loss) from continuing operations |
|
(230 |
) |
|
|
274 |
|
|
|
(274 |
) |
|
|
587 |
|
|
|
9 |
|
Income from discontinued operations, net of tax |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Net income (loss) |
|
(230 |
) |
|
|
275 |
|
|
|
(274 |
) |
|
|
589 |
|
|
|
9 |
|
Income attributable to noncontrolling interests |
|
(12 |
) |
|
|
(11 |
) |
|
|
(33 |
) |
|
|
(35 |
) |
|
|
(7 |
) |
Net income (loss) attributable to Cliffs shareholders |
$ |
(242 |
) |
|
$ |
264 |
|
|
$ |
(307 |
) |
|
$ |
554 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - basic |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations |
$ |
(0.52 |
) |
|
$ |
0.52 |
|
|
$ |
(0.64 |
) |
|
$ |
1.08 |
|
|
$ |
0.00 |
|
Discontinued operations |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
$ |
(0.52 |
) |
|
$ |
0.52 |
|
|
$ |
(0.64 |
) |
|
$ |
1.08 |
|
|
$ |
0.00 |
|
Earnings (loss) per common share attributable to Cliffs shareholders - diluted |
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations |
$ |
(0.52 |
) |
|
$ |
0.52 |
|
|
$ |
(0.64 |
) |
|
$ |
1.08 |
|
|
$ |
0.00 |
|
Discontinued operations |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
|
$ |
(0.52 |
) |
|
$ |
0.52 |
|
|
$ |
(0.64 |
) |
|
$ |
1.08 |
|
|
$ |
0.00 |
|
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 |
$ |
39 |
|
$ |
198 |
Accounts receivable, net |
|
1,583 |
|
|
1,840 |
Inventories |
|
4,236 |
|
|
4,460 |
Other current assets |
|
169 |
|
|
138 |
Total current assets |
|
6,027 |
|
|
6,636 |
Non-current assets: |
|
|
|
||
Property, plant and equipment, net |
|
8,687 |
|
|
8,895 |
|
|
1,005 |
|
|
1,005 |
Pension and OPEB assets |
|
378 |
|
|
329 |
Other non-current assets |
|
699 |
|
|
672 |
TOTAL ASSETS |
$ |
16,796 |
|
$ |
17,537 |
LIABILITIES |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
1,983 |
|
$ |
2,099 |
Accrued employment costs |
|
413 |
|
|
511 |
Accrued expenses |
|
379 |
|
|
380 |
Other current liabilities |
|
480 |
|
|
518 |
Total current liabilities |
|
3,255 |
|
|
3,508 |
Non-current liabilities: |
|
|
|
||
Long-term debt |
|
3,774 |
|
|
3,137 |
Pension and OPEB liabilities |
|
666 |
|
|
821 |
Deferred income taxes |
|
567 |
|
|
639 |
Other non-current liabilities |
|
1,439 |
|
|
1,310 |
TOTAL LIABILITIES |
|
9,701 |
|
|
9,415 |
TOTAL EQUITY |
|
7,095 |
|
|
8,122 |
TOTAL LIABILITIES AND EQUITY |
$ |
16,796 |
|
$ |
17,537 |
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(230 |
) |
|
$ |
275 |
|
|
$ |
(274 |
) |
|
$ |
589 |
|
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation, depletion and amortization |
|
235 |
|
|
|
249 |
|
|
|
693 |
|
|
|
738 |
|
Restructuring and other charges |
|
2 |
|
|
|
— |
|
|
|
131 |
|
|
|
— |
|
Asset impairments |
|
— |
|
|
|
— |
|
|
|
79 |
|
|
|
— |
|
Pension and OPEB credits |
|
(53 |
) |
|
|
(40 |
) |
|
|
(157 |
) |
|
|
(119 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
27 |
|
|
|
— |
|
Other |
|
19 |
|
|
|
163 |
|
|
|
66 |
|
|
|
253 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
191 |
|
|
|
169 |
|
|
|
258 |
|
|
|
(164 |
) |
Inventories |
|
(37 |
) |
|
|
135 |
|
|
|
190 |
|
|
|
538 |
|
Income taxes |
|
(34 |
) |
|
|
(153 |
) |
|
|
(46 |
) |
|
|
16 |
|
Pension and OPEB payments and contributions |
|
(100 |
) |
|
|
(26 |
) |
|
|
(162 |
) |
|
|
(84 |
) |
Payables, accrued employment and accrued expenses |
|
(41 |
) |
|
|
(17 |
) |
|
|
(217 |
) |
|
|
(95 |
) |
Other, net |
|
(36 |
) |
|
|
12 |
|
|
|
(11 |
) |
|
|
(57 |
) |
Net cash provided (used) by operating activities |
|
(84 |
) |
|
|
767 |
|
|
|
577 |
|
|
|
1,615 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Purchase of property, plant and equipment |
|
(151 |
) |
|
|
(162 |
) |
|
|
(490 |
) |
|
|
(481 |
) |
Other investing activities |
|
5 |
|
|
|
2 |
|
|
|
13 |
|
|
|
11 |
|
Net cash used by investing activities |
|
(146 |
) |
|
|
(160 |
) |
|
|
(477 |
) |
|
|
(470 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
||||||||
Repurchase of common shares |
|
— |
|
|
|
(58 |
) |
|
|
(733 |
) |
|
|
(152 |
) |
Proceeds from issuance of senior notes |
|
596 |
|
|
|
— |
|
|
|
1,421 |
|
|
|
750 |
|
Repayments of senior notes |
|
— |
|
|
|
— |
|
|
|
(845 |
) |
|
|
— |
|
Borrowings (repayments) under credit facilities, net |
|
(323 |
) |
|
|
(508 |
) |
|
|
47 |
|
|
|
(1,539 |
) |
Debt issuance costs |
|
(60 |
) |
|
|
— |
|
|
|
(73 |
) |
|
|
(34 |
) |
Other financing activities |
|
(54 |
) |
|
|
(44 |
) |
|
|
(76 |
) |
|
|
(165 |
) |
Net cash provided (used) by financing activities |
|
159 |
|
|
|
(610 |
) |
|
|
(259 |
) |
|
|
(1,140 |
) |
Net increase (decrease) in cash and cash equivalents |
|
(71 |
) |
|
|
(3 |
) |
|
|
(159 |
) |
|
|
5 |
|
Cash and cash equivalents at beginning of period |
|
110 |
|
|
|
34 |
|
|
|
198 |
|
|
|
26 |
|
Cash and cash equivalents at end of period |
$ |
39 |
|
|
$ |
31 |
|
|
$ |
39 |
|
|
$ |
31 |
|
1
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE RECONCILIATION
In addition to the consolidated financial statements presented in accordance with
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three Months
|
||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Net income (loss) attributable to Cliffs shareholders |
$ |
(242 |
) |
|
$ |
264 |
|
|
$ |
(307 |
) |
|
$ |
554 |
|
|
$ |
2 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Weirton indefinite idleA |
|
(2 |
) |
|
|
— |
|
|
|
(219 |
) |
|
|
— |
|
|
|
(40 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(6 |
) |
Acquisition-related costs |
|
(14 |
) |
|
|
(3 |
) |
|
|
(14 |
) |
|
|
(5 |
) |
|
|
— |
|
Acquisition-related interest expense |
|
(32 |
) |
|
|
— |
|
|
|
(32 |
) |
|
|
— |
|
|
|
— |
|
Changes in fair value of foreign currency contracts, net |
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
Arbitration decision |
|
(71 |
) |
|
|
— |
|
|
|
(71 |
) |
|
|
— |
|
|
|
— |
|
Other, net |
|
(19 |
) |
|
|
(8 |
) |
|
|
(24 |
) |
|
|
(16 |
) |
|
|
(1 |
) |
Income tax effect |
|
59 |
|
|
|
— |
|
|
|
106 |
|
|
|
2 |
|
|
|
(1 |
) |
Adjusted net income (loss) attributable to Cliffs shareholders |
$ |
(156 |
) |
|
$ |
275 |
|
|
$ |
(19 |
) |
|
$ |
573 |
|
|
$ |
50 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share attributable to Cliffs shareholders - diluted |
$ |
(0.52 |
) |
|
$ |
0.52 |
|
|
$ |
(0.64 |
) |
|
$ |
1.08 |
|
|
$ |
0.00 |
|
Adjusted earnings (loss) per common share attributable to Cliffs shareholders - diluted |
$ |
(0.33 |
) |
|
$ |
0.54 |
|
|
$ |
(0.04 |
) |
|
$ |
1.12 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
A Primarily 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
|
|
Nine Months Ended
|
|
Three Months
|
||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
||
Net income (loss) |
$ |
(230 |
) |
|
$ |
275 |
|
|
$ |
(274 |
) |
|
$ |
589 |
|
|
$ |
9 |
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
(102 |
) |
|
|
(70 |
) |
|
|
(235 |
) |
|
|
(226 |
) |
|
|
(69 |
) |
Income tax benefit (expense) |
|
76 |
|
|
|
(29 |
) |
|
|
99 |
|
|
|
(118 |
) |
|
|
15 |
|
Depreciation, depletion and amortization |
|
(235 |
) |
|
|
(249 |
) |
|
|
(693 |
) |
|
|
(738 |
) |
|
|
(228 |
) |
Total EBITDA |
$ |
31 |
|
|
$ |
623 |
|
|
$ |
555 |
|
|
$ |
1,671 |
|
|
$ |
291 |
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA of noncontrolling interests |
$ |
20 |
|
|
$ |
20 |
|
|
$ |
56 |
|
|
$ |
60 |
|
|
$ |
15 |
|
Weirton indefinite idle |
|
(2 |
) |
|
|
— |
|
|
|
(219 |
) |
|
|
— |
|
|
|
(40 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(6 |
) |
Acquisition-related costs |
|
(14 |
) |
|
|
(3 |
) |
|
|
(14 |
) |
|
|
(5 |
) |
|
|
— |
|
Changes in fair value of foreign currency contracts, net |
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
Arbitration decision |
|
(71 |
) |
|
|
— |
|
|
|
(71 |
) |
|
|
— |
|
|
|
— |
|
Other, net |
|
(19 |
) |
|
|
(8 |
) |
|
|
(24 |
) |
|
|
(16 |
) |
|
|
(1 |
) |
Total Adjusted EBITDA |
$ |
124 |
|
|
$ |
614 |
|
|
$ |
861 |
|
|
$ |
1,632 |
|
|
$ |
323 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA of noncontrolling interests includes the following: |
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling interests |
$ |
12 |
|
|
$ |
11 |
|
|
$ |
33 |
|
|
$ |
35 |
|
|
$ |
7 |
|
Depreciation, depletion and amortization |
|
8 |
|
|
|
9 |
|
|
|
23 |
|
|
|
25 |
|
|
|
8 |
|
EBITDA of noncontrolling interests |
$ |
20 |
|
|
$ |
20 |
|
|
$ |
56 |
|
|
$ |
60 |
|
|
$ |
15 |
|
3 STELCO FINANCIAL RESULTS
Stelco financial information represents the historical consolidated financial information prepared by Stelco management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the
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