10-Q 1 clf-20220331.htm 10-Q clf-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 1-8944
clf-20220331_g1.jpg
CLEVELAND-CLIFFS INC.
(Exact Name of Registrant as Specified in Its Charter)
Ohio34-1464672
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
200 Public Square,Cleveland,Ohio44114-2315
(Address of Principal Executive Offices)(Zip Code)
Registrant’s Telephone Number, Including Area Code: (216694-5700
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common shares, par value $0.125 per shareCLFNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes                                           No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes                                           No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes                                          No  
The number of shares outstanding of the registrant’s common shares, par value $0.125 per share, was 524,737,194 as of April 25, 2022.



TABLE OF CONTENTS
Page Number
DEFINITIONS
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
Statements of Unaudited Condensed Consolidated Financial Position as of March 31, 2022 and December 31, 2021
Statements of Unaudited Condensed Consolidated Operations for the Three Months Ended March 31, 2022 and 2021
Statements of Unaudited Condensed Consolidated Comprehensive Income for the Three Months Ended March 31, 2022 and 2021
Statements of Unaudited Condensed Consolidated Cash Flows for the Three Months Ended March 31, 2022 and 2021
Statements of Unaudited Condensed Consolidated Changes in Equity for the Three Months Ended March 31, 2022 and 2021
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II - OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
Signatures


DEFINITIONS
    The following abbreviations or acronyms are used in the text. References in this report to the “Company,” “we,” “us,” “our” and “Cliffs” are to Cleveland-Cliffs Inc. and subsidiaries, collectively, unless stated otherwise or the context indicates otherwise.
Abbreviation or acronymTerm
4.625% 2029 Senior Notes4.625% Senior Guaranteed Notes due 2029 issued by Cleveland-Cliffs Inc. on February 17, 2021 in an aggregate principal amount of $500 million
4.875% 2031 Senior Notes4.875% Senior Guaranteed Notes due 2031 issued by Cleveland-Cliffs Inc. on February 17, 2021 in an aggregate principal amount of $500 million
ABL FacilityAsset-Based Revolving Credit Agreement, dated as of March 13, 2020, among Cleveland-Cliffs Inc., the lenders party thereto from time to time and Bank of America, N.A., as administrative agent, as amended as of March 27, 2020, and December 9, 2020, and as may be further amended from time to time
Adjusted EBITDAEBITDA, excluding certain items such as EBITDA of noncontrolling interests, asset impairment, extinguishment of debt, severance, acquisition-related costs, amortization of inventory step-up and impacts of discontinued operations
AK SteelAK Steel Holding Corporation (n/k/a Cleveland-Cliffs Steel Holding Corporation) and its consolidated subsidiaries, including AK Steel Corporation (n/k/a Cleveland-Cliffs Steel Corporation), its direct, wholly owned subsidiary, collectively, unless stated otherwise or the context indicates otherwise
AK Steel MergerThe merger of Merger Sub with and into AK Steel, with AK Steel surviving the merger as a wholly owned subsidiary of Cleveland-Cliffs Inc., subject to the terms and conditions set forth in the AK Steel Merger Agreement, consummated on March 13, 2020
AK Steel Merger AgreementAgreement and Plan of Merger, dated as of December 2, 2019, among Cleveland-Cliffs Inc., AK Steel and Merger Sub
AM USA TransactionThe acquisition of ArcelorMittal USA, consummated on December 9, 2020
AM USA Transaction AgreementTransaction Agreement, dated as of September 28, 2020, by and between Cleveland-Cliffs Inc. and ArcelorMittal
AOCIAccumulated Other Comprehensive Income (Loss)
ArcelorMittalArcelorMittal S.A., a company organized under the laws of Luxembourg and the former ultimate parent company of ArcelorMittal USA
ArcelorMittal USASubstantially all of the operations of the former ArcelorMittal USA LLC, its subsidiaries and certain affiliates, and Kote and Tek, collectively
ASCAccounting Standards Codification
ASUAccounting Standards Update
BoardThe Board of Directors of Cleveland-Cliffs Inc.
BOFBasic oxygen furnace
CARES ActCoronavirus Aid, Relief, and Economic Security Act
CERCLAComprehensive Environmental Response, Compensation and Liability Act of 1980
COVID-19A novel strain of coronavirus that the World Health Organization declared a global pandemic in March 2020
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act
EAFElectric arc furnace
EBITDAEarnings before interest, taxes, depreciation and amortization
EPAU.S. Environmental Protection Agency
EPSEarnings per share
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FeIron
FMSH ActFederal Mine Safety and Health Act of 1977, as amended
FPTFerrous Processing and Trading Company, including certain related entities
FPT AcquisitionThe purchase of FPT, subject to the terms and conditions set forth in the FPT Acquisition Agreement
FPT Acquisition AgreementSecurities Purchase Agreement, dated as of October 8, 2021, by and between Cleveland-Cliffs Inc. and Anthony Soave Revocable Trust u/a/d January 14, 1987, as amended and restated
GAAPAccounting principles generally accepted in the United States
GHGGreenhouse gas
GOESGrain oriented electrical steel
HBIHot briquetted iron
HRCHot-rolled coil steel
IRBIndustrial Revenue Bond
JSW SteelJSW Steel (USA) Inc. and JSW Steel USA Ohio, Inc., collectively
Kote and TekI/N Kote L.P. (n/k/a Cleveland-Cliffs Kote L.P.) and I/N Tek L.P. (n/k/a Cleveland-Cliffs Tek L.P.), former joint ventures between subsidiaries of the former ArcelorMittal USA LLC and Nippon Steel Corporation
Long ton2,240 pounds
Merger SubPepper Merger Sub Inc., a direct, wholly owned subsidiary of Cliffs prior to the AK Steel Merger
Metric ton2,205 pounds
MSHAU.S. Mine Safety and Health Administration
Net ton2,000 pounds
1

Abbreviation or acronymTerm
NOESNon-oriented electrical steel
NPDESNational Pollutant Discharge Elimination System, authorized by the Clean Water Act
OPEBOther postretirement benefits
Platts 62% pricePlatts IODEX 62% Fe Fines CFR North China
RCRAResource Conservation and Recovery Act
RI/FSRemedial Investigation/Feasibility Study
SECU.S. Securities and Exchange Commission
Section 232Section 232 of the Trade Expansion Act of 1962, as amended
Securities ActSecurities Act of 1933, as amended
SunCoke MiddletownMiddletown Coke Company, LLC, a subsidiary of SunCoke Energy, Inc.
Topic 805ASC Topic 805, Business Combinations
Topic 815ASC Topic 815, Derivatives and Hedging
U.S.United States of America
U.S. SteelUnited States Steel Corporation and its subsidiaries, collectively, unless stated otherwise or the context indicates otherwise
USMCAUnited States-Mexico-Canada Agreement
VIEVariable interest entity
2

PART I
Item 1.
Financial Statements
Statements of Unaudited Condensed Consolidated Financial Position
Cleveland-Cliffs Inc. and Subsidiaries
(In Millions)
March 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$35 $48 
Accounts receivable, net2,667 2,154 
Inventories5,562 5,188 
Other current assets295 263 
Total current assets8,559 7,653 
Non-current assets:
Property, plant and equipment, net9,012 9,186 
Goodwill1,127 1,116 
Other non-current assets1,070 1,020 
TOTAL ASSETS$19,768 $18,975 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$2,271 $2,073 
Accrued employment costs541 585 
Other current liabilities939 903 
Total current liabilities3,751 3,561 
Non-current liabilities:
Long-term debt5,028 5,238 
Pension liability, non-current552 578 
OPEB liability, non-current2,346 2,383 
Other non-current liabilities1,483 1,441 
TOTAL LIABILITIES13,160 13,201 
Commitments and contingencies (See Note 18)
Equity:
Common shares - par value $0.125 per share
Authorized - 1,200,000,000 shares (2021 - 1,200,000,000 shares);
Issued - 531,051,530 shares (2021 - 506,832,537 shares);
Outstanding - 524,714,208 shares (2021 - 500,158,955 shares)
66 63 
Capital in excess of par value of shares4,848 4,892 
Retained earnings (deficit)800 (1)
Cost of 6,337,322 common shares in treasury (2021 - 6,673,582 shares)
(90)(82)
Accumulated other comprehensive income715 618 
Total Cliffs shareholders' equity6,339 5,490 
Noncontrolling interest269 284 
TOTAL EQUITY6,608 5,774 
TOTAL LIABILITIES AND EQUITY$19,768 $18,975 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Statements of Unaudited Condensed Consolidated Operations
Cleveland-Cliffs Inc. and Subsidiaries
(In Millions, Except Per Share Amounts)
Three Months Ended
March 31,
20222021
Revenues$5,955 $4,049 
Operating costs:
Cost of goods sold(4,706)(3,761)
Selling, general and administrative expenses(122)(108)
Miscellaneous – net(33)(3)
Total operating costs(4,861)(3,872)
Operating income1,094 177 
Other income (expense):
Interest expense, net(77)(92)
Loss on extinguishment of debt(14)(66)
Net periodic benefit credits other than service cost component49 47 
Other non-operating expense(2) 
Total other expense(44)(111)
Income from continuing operations before income taxes1,050 66 
Income tax expense(237)(9)
Income from continuing operations813 57 
Income from discontinued operations, net of tax1  
Net income814 57 
Income attributable to noncontrolling interest(13)(16)
Net income attributable to Cliffs shareholders$801 $41 
Earnings per common share attributable to Cliffs shareholders - basic
Continuing operations$1.54 $0.08 
Discontinued operations  
$1.54 $0.08 
Earnings per common share attributable to Cliffs shareholders - diluted
Continuing operations$1.50 $0.07 
Discontinued operations  
$1.50 $0.07 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

Statements of Unaudited Condensed Consolidated Comprehensive Income
Cleveland-Cliffs Inc. and Subsidiaries
(In Millions)
Three Months Ended
March 31,
20222021
Net income$814 $57 
Other comprehensive income (loss):
Changes in pension and OPEB, net of tax1 7 
Changes in foreign currency translation (1)
Changes in derivative financial instruments, net of tax96 7 
Total other comprehensive income97 13 
Comprehensive income911 70 
Comprehensive income attributable to noncontrolling interests(13)(16)
Comprehensive income attributable to Cliffs shareholders$898 $54 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

Statements of Unaudited Condensed Consolidated Cash Flows
Cleveland-Cliffs Inc. and Subsidiaries
(In Millions)
Three Months Ended
March 31,
20222021
OPERATING ACTIVITIES
Net income$814 $57 
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation, depletion and amortization301 217 
Impairment of long-lived assets29  
Pension and OPEB credits(27)(21)
Loss on extinguishment of debt14 66 
Amortization of inventory step-up 81 
Other82 26 
Changes in operating assets and liabilities, net of business combination:
Receivables and other assets(441)(480)
Inventories(372)(172)
Pension and OPEB payments and contributions(60)(175)
Payables, accrued expenses and other liabilities193 22 
Net cash provided (used) by operating activities533 (379)
INVESTING ACTIVITIES
Purchase of property, plant and equipment(236)(136)
Other investing activities1 1 
Net cash used by investing activities(235)(135)
FINANCING ACTIVITIES
Proceeds from issuance of common shares 322 
Repurchase of common shares(19) 
Proceeds from issuance of debt 1,000 
Repayments of debt(360)(902)
Borrowings under credit facilities1,715 1,158 
Repayments under credit facilities(1,609)(1,010)
Other financing activities(38)(56)
Net cash provided (used) by financing activities(311)512 
Net decrease in cash and cash equivalents(13)(2)
Cash and cash equivalents at beginning of period48 112 
Cash and cash equivalents at end of period$35 $110 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

Statements of Unaudited Condensed Consolidated Changes in Equity
Cleveland-Cliffs Inc. and Subsidiaries
(In Millions)
Number
of
Common
Shares Outstanding
Par Value of
Common
Shares Issued
Capital in
Excess of
Par Value
of Shares
Retained
Earnings (Deficit)
Common
Shares
in
Treasury
AOCINon-controlling InterestsTotal
December 31, 2021500 $63 $4,892 $(1)$(82)$618 $284 $5,774 
Comprehensive income   801  97 13 911 
Redemption of convertible debt24 3 (28)    (25)
Stock and other incentive plans2  (16) 11   (5)
Common stock repurchases(1)   (19)  (19)
Net distributions to noncontrolling interests      (28)(28)
March 31, 2022525 $66 $4,848 $800 $(90)$715 $269 $6,608 
(In Millions)
Number
of
Common
Shares Outstanding
Par Value of Common
Shares Issued
Capital in
Excess of
Par Value
of Shares
Retained
Earnings (Deficit)
Common
Shares
in
Treasury
AOCI (Loss)Non-controlling InterestsTotal
December 31, 2020478 $63 $5,431 $(2,989)$(354)$(133)$323 $2,341 
Comprehensive income— — — 41 — 13 16 70 
Issuance of common stock20 — 78 — 244 — — 322 
Stock and other incentive plans1 — (22)— 17 — — (5)
Acquisition of ArcelorMittal USA - Measurement period adjustments— — —  — — (1)(1)
Net distributions to noncontrolling interests— — — — — — (8)(8)
March 31, 2021499 $63 $5,487 $(2,948)$(93)$(120)$330 $2,719 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

Notes to Unaudited Condensed Consolidated Financial Statements
Cleveland-Cliffs Inc. and Subsidiaries

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Business, Consolidation and Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with SEC rules and regulations and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations, comprehensive income, cash flows and changes in equity for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 or any other future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Business Operations
We are vertically integrated from mined raw materials, direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing. We are organized into four operating segments based on differentiated products, Steelmaking, Tubular, Tooling and Stamping, and European Operations. We primarily operate through one reportable segment – the Steelmaking segment.
Basis of Consolidation
The unaudited condensed consolidated financial statements consolidate our accounts and the accounts of our wholly owned subsidiaries, all subsidiaries in which we have a controlling interest and VIEs for which we are the primary beneficiary. All intercompany transactions and balances are eliminated upon consolidation.
Investments in Affiliates
We have investments in several businesses accounted for using the equity method of accounting. As of March 31, 2022 and December 31, 2021, our investment in affiliates of $129 million and $128 million, respectively, was classified in Other non-current assets.
Significant Accounting Policies
A detailed description of our significant accounting policies can be found in the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein.
Recent Accounting Pronouncements
Issued and Adopted
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update requires certain convertible instruments to be accounted for as a single liability measured at its amortized cost. Additionally, the update requires the use of the "if-converted" method, removing the treasury stock method, when calculating diluted shares. We utilized the modified retrospective method of adoption; using this approach, the guidance was applied to transactions outstanding as of the beginning of the fiscal year in which the amendment was adopted. On January 18, 2022, we redeemed all of our outstanding 1.500% 2025 Convertible Senior Notes; therefore, there was a de minimis impact as a result of our adoption of this update.
8

NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
Allowance for Credit Losses
The following is a roll-forward of our allowance for credit losses associated with Accounts receivable, net:
(In Millions)
20222021
Allowance for credit losses as of January 1$(4)$(5)
Increase in allowance (1)
Allowance for credit losses as of March 31$(4)$(6)
Inventories
The following table presents the detail of our Inventories in the Statements of Unaudited Condensed Consolidated Financial Position:
(In Millions)
March 31,
2022
December 31,
2021
Product inventories
Finished and semi-finished goods$2,943 $2,814 
Raw materials2,312 2,070 
Total product inventories5,255 4,884 
Manufacturing supplies and critical spares307 304 
Inventories$5,562 $5,188 
Cash Flow Information
A reconciliation of capital additions to cash paid for capital expenditures is as follows:
(In Millions)
Three Months Ended
March 31,
20222021
Capital additions$181 $162 
Less:
Non-cash accruals(55)23 
Right-of-use assets - finance leases 3 
Cash paid for capital expenditures including deposits$236 $136 
Cash payments (receipts) for income taxes and interest are as follows:
(In Millions)
Three Months Ended
March 31,
20222021
Taxes paid on income$1 $3 
Income tax refunds(1)(14)
Interest paid on debt obligations net of capitalized interest1
65 75 
1 Capitalized interest was $2 million and $1 million for the three months ended March 31, 2022 and 2021, respectively.
9

NOTE 3 - ACQUISITIONS
FPT Acquisition
Overview
On November 18, 2021, pursuant to the FPT Acquisition Agreement, we completed the FPT Acquisition, in which we were the acquirer. The FPT Acquisition gives us a competitive advantage in sourcing prime scrap, a key raw material for our steelmaking facilities. We incurred acquisition-related costs, excluding severance costs, of $1 million for the three months ended March 31, 2022, which was recorded in Selling, general and administrative expenses on the Statements of Unaudited Condensed Consolidated Operations.
The fair value of the total purchase consideration was determined as follows:
(In Millions)
Cash consideration:
Cash consideration pursuant to the FPT Acquisition Agreement$778 
Estimated cash consideration payable related to Internal Revenue Code Section 338(h)(10)35 
Total cash consideration813 
Fair value of settlement of a pre-existing relationship(20)
Total purchase consideration$793 
The Company's estimation of cash consideration payable related to Internal Revenue Code Section 338(h)(10) with respect to entities acquired in connection with the FPT Acquisition could potentially change as elections are expected to be finalized in the third quarter of 2022.
Valuation Assumption and Purchase Price Allocation
We estimated fair values at November 18, 2021 for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in connection with the FPT Acquisition. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. If we determine any measurement period adjustments are material, we will apply those adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined. We are in the process of conducting a valuation of the assets acquired and liabilities assumed related to the FPT Acquisition, most notably, personal and real property, deferred taxes, environmental obligations and intangible assets, and the final allocation will be made when completed, including the result of any identified goodwill. Accordingly, the provisional measurements noted below are preliminary and subject to modification in the future.
10

The preliminary purchase price allocation to assets acquired and liabilities assumed in the FPT Acquisition was:
(In Millions)
Initial Allocation of ConsiderationMeasurement Period AdjustmentsUpdated Allocation
Cash and cash equivalents$9 $ 9 
Accounts receivable, net233 2 235 
Inventories137 2 139 
Other current assets4 (1)3 
Property, plant and equipment179 26 205 
Other non-current assets74 (1)73 
Accounts payable(122) (122)
Accrued employment costs(8) (8)
Other current liabilities(9) (9)
Other non-current liabilities(21)(1)(22)
Net identifiable assets acquired476 27 503 
Goodwill279 11 290 
Total net assets acquired$755 $38 $793 
The goodwill resulting from the FPT Acquisition primarily represents the incremental benefit of providing substantial access to prime scrap for our vertically integrated steelmaking business, as well as any synergistic benefits to be realized from the FPT Acquisition within our Steelmaking segment.
The preliminary purchase price allocated to identifiable intangible assets acquired was:
(In Millions)Weighted Average Life (In Years)
Customer relationships$13 15
Supplier relationships21 18
Trade names and trademarks7 15
Total identifiable intangible assets$41 17
Intangible assets are classified as Other non-current assets on the Statements of Unaudited Condensed Consolidated Financial Position.
NOTE 4 - REVENUES
We generate our revenue through product sales, in which shipping terms indicate when we have fulfilled our performance obligations and transferred control of products to our customer. Our revenue transactions consist of a single performance obligation to transfer promised goods. Our contracts with customers define the mechanism for determining the sales price, which is generally fixed upon transfer of control, but the contracts generally do not impose a specific quantity on either party. Quantities to be delivered to the customer are determined at a point near the date of delivery through purchase orders or other written instructions we receive from the customer. Spot market sales are made through purchase orders or other written instructions. We consider our performance obligation to be complete and recognize revenue when control transfers in accordance with shipping terms.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring product. We reduce the amount of revenue recognized for estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value to be realized. Payment terms are consistent with terms standard to the markets we serve. Sales taxes collected from customers are excluded from revenues.
11

The following table represents our Revenues by market:
(In Millions)
Three Months Ended
March 31,
20222021
Steelmaking:
Automotive$1,607 $1,287 
Infrastructure and manufacturing1,542 954 
Distributors and converters1,829 1,248 
Steel producers
816 430 
Total Steelmaking5,794 3,919 
Other Businesses:
Automotive122 105 
Infrastructure and manufacturing15 10 
Distributors and converters24 15 
Total Other Businesses161 130 
Total revenues$5,955 $4,049 
The following tables represent our Revenues by product line:
(Dollars in Millions,
Sales Volumes in Thousands of Net Tons)
Three Months Ended March 31,
20222021
RevenueVolumeRevenueVolume
Steelmaking:
Hot-rolled steel$1,194 903 $895 1,182 
Cold-rolled steel984 651 632 748 
Coated steel1,775 1,242 1,308 1,369 
Stainless and electrical steel551 189 363 167 
Plate421 221 244 275 
Other steel products334 431 289 403 
Other535 N/A188 N/A
Total Steelmaking5,794 3,919 
Other Businesses:
Other161 N/A130 N/A
Total revenues$5,955 $4,049 
NOTE 5 - SEGMENT REPORTING
We are vertically integrated from mined raw materials and direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing. We are organized into four operating segments based on our differentiated products – Steelmaking, Tubular, Tooling and Stamping, and European Operations. We have one reportable segment – Steelmaking. The operating segment results of our Tubular, Tooling and Stamping, and European Operations that do not constitute reportable segments are combined and disclosed in the Other Businesses category. Our Steelmaking segment operates as the largest flat-rolled steel producer supported by being the largest iron ore pellet producer as well as a leading prime scrap processor in North America, primarily serving the automotive, distributors and converters and infrastructure and manufacturing markets. Our Other Businesses primarily include the operating segments that provide customer solutions with carbon and stainless steel tubing products, advanced-engineered solutions, tool design and build, hot- and cold-stamped steel components, and complex assemblies. All intersegment transactions were eliminated in consolidation.
We evaluate performance on an operating segment basis, as well as a consolidated basis, based on Adjusted EBITDA, which is a non-GAAP measure. This measure is used by management, investors, lenders and other
12

external users of our financial statements to assess our operating performance and to compare operating performance to other companies in the steel industry. In addition, management believes Adjusted EBITDA is a useful measure to assess the earnings power of the business without the impact of capital structure and can be used to assess our ability to service debt and fund future capital expenditures in the business.
Our results by segment are as follows:
(In Millions)
Three Months Ended
March 31,
20222021
Revenues:
Steelmaking$5,794 $3,919 
Other Businesses161 130 
Total revenues$5,955 $4,049 
Adjusted EBITDA:
Steelmaking$1,423 $502 
Other Businesses29 11 
Eliminations1
(1) 
Total Adjusted EBITDA$1,451 $513 
1 In 2022, we began allocating Corporate SG&A to our operating segments. Prior periods have been adjusted to reflect this change. The Eliminations line now only includes sales between segments.
The following table provides a reconciliation of our consolidated Net income to total Adjusted EBITDA:
(In Millions)
Three Months Ended
March 31,
20222021
Net income$814 $57 
Less:
Interest expense, net(77)(92)
Income tax expense(237)(9)
Depreciation, depletion and amortization(301)(217)
1,429 375 
Less:
EBITDA of noncontrolling interests1
22 22 
Asset impairment(29) 
Loss on extinguishment of debt(14)(66)
Severance costs(1)(11)
Acquisition-related costs excluding severance costs(1)(2)
Amortization of inventory step-up (81)
Impact of discontinued operations1  
Total Adjusted EBITDA$1,451 $513 
1 EBITDA of noncontrolling interests includes the following:
Net income attributable to noncontrolling interests$13 $16 
Depreciation, depletion and amortization9 6 
EBITDA of noncontrolling interests$22 $22 
13

The following summarizes our assets by segment:
(In Millions)
March 31,
2022
December 31,
2021
Assets:
Steelmaking$19,042 $18,326 
Other Businesses335 306 
Total segment assets19,377 18,632 
Corporate/Eliminations391 343 
Total assets$19,768 $18,975 
The following table summarizes our capital additions by segment:
(In Millions)
Three Months Ended
March 31,
20222021
Capital additions1:
Steelmaking$175 $133 
Other Businesses6 11 
Corporate 18 
Total capital additions$181 $162 
1 Refer to NOTE 2 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION for additional information.
NOTE 6 - PROPERTY, PLANT AND EQUIPMENT
The following table indicates the carrying value of each of the major classes of our depreciable assets:
(In Millions)
March 31,
2022
December 31,
2021
Land, land improvements and mineral rights$1,397 $1,291 
Buildings907 889 
Equipment8,691 8,709 
Other233 229 
Construction in progress414 408 
Total property, plant and equipment1
11,642 11,526 
Allowance for depreciation and depletion(2,630)(2,340)
Property, plant and equipment, net$9,012 $9,186 
1 Includes right-of-use assets related to finance leases of $371 million and $411 million as of March 31, 2022 and December 31, 2021, respectively.
We recorded depreciation and depletion expense of $298 million and $215 million for the three months ended March 31, 2022 and 2021, respectively. Depreciation and depletion expense for the three months ended March 31, 2022 includes $68 million of accelerated depreciation related to the indefinite idle of the Indiana Harbor #4 blast furnace.
14

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS AND LIABILITIES
Goodwill
The following is a summary of Goodwill by segment:
(In Millions)
March 31,
2022
December 31,
2021
Steelmaking$953 $942 
Other Businesses174 174 
Total goodwill$1,127 $1,116 
The increase of $11 million in the balance of Goodwill in our Steelmaking segment as of March 31, 2022, compared to December 31, 2021, is due to the change in estimated identified goodwill as a result of measurement period adjustments to the preliminary purchase price allocation for the acquisition of FPT. Refer to NOTE 3 - ACQUISITIONS for further details.
Intangible Assets and Liabilities
The following is a summary of our intangible assets and liabilities:
(In Millions)
March 31, 2022
December 31, 2021
Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Intangible assets1:
Customer relationships$90 $(9)$81 $95 $(8)$87 
Developed technology60 (8)52 60 (6)54 
Trade names and trademarks18 (3)15 18 (2)16 
Mining permits72 (26)46 72 (26)46 
Supplier relationships21  21 18  18 
Total intangible assets$261 $(46)$215 $263 $(42)$221 
Intangible liabilities2:
Above-market supply contracts$(71)$15 $(56)$(71)$14 $(57)
1 Intangible assets are classified as Other non-current assets. Amortization 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.
2 Intangible liabilities are classified as Other non-current liabilities. Amortization of all intangible liabilities is recognized in Cost of goods sold.
Amortization expense related to intangible assets was $4 million and $3 million for the three months ended March 31, 2022 and 2021, respectively. Estimated future amortization expense is $9 million for the remainder of 2022 and $13 million annually for the years 2023 through 2027.
Income from amortization related to the intangible liabilities for both the three months ended March 31, 2022 and 2021 was $1 million. Estimated future income from amortization is $4 million for the remainder of 2022 and $5 million annually for the years 2023 through 2027.
15

NOTE 8 - DEBT AND CREDIT FACILITIES
The following represents a summary of our long-term debt:
(In Millions)
Debt Instrument
Issuer1
Annual Effective
Interest Rate
March 31,
2022
December 31,
2021
Senior Secured Notes:
9.875% 2025 Senior Secured Notes
Cliffs10.57%$607 $607 
6.750% 2026 Senior Secured Notes
Cliffs6.99%845 845 
Senior Unsecured Notes:
1.500% 2025 Convertible Senior Notes
Cliffs6.26% 294 
7.000% 2027 Senior Notes
Cliffs9.24%73 73 
7.000% 2027 AK Senior Notes
AK Steel9.24%56 56 
5.875% 2027 Senior Notes
Cliffs6.49%556 556 
4.625% 2029 Senior Notes
Cliffs4.63%500 500 
4.875% 2031 Senior Notes
Cliffs4.88%500 500 
6.250% 2040 Senior Notes
Cliffs6.34%263 263 
IRBs due 2024 to 2028AK Steel