Bond Cliffside Cliffs 5.75% ( US18683KAM36 ) in USD

Issuer Cliffside Cliffs
Market price 100 %  ▼ 
Country  United States
ISIN code  US18683KAM36 ( in USD )
Interest rate 5.75% per year ( payment 2 times a year)
Maturity 28/02/2025 - Bond has expired



Prospectus brochure of the bond Cleveland-Cliffs US18683KAM36 in USD 5.75%, expired


Minimal amount 2 000 USD
Total amount 1 073 168 000 USD
Cusip 18683KAM3
Standard & Poor's ( S&P ) rating CCC ( Extremely speculative )
Moody's rating B2 ( Highly speculative )
Detailed description Cleveland-Cliffs Inc. is an American iron ore mining and steelmaking company, the largest flat-rolled steel producer in North America.

The Bond issued by Cliffside Cliffs ( United States ) , in USD, with the ISIN code US18683KAM36, pays a coupon of 5.75% per year.
The coupons are paid 2 times per year and the Bond maturity is 28/02/2025

The Bond issued by Cliffside Cliffs ( United States ) , in USD, with the ISIN code US18683KAM36, was rated B2 ( Highly speculative ) by Moody's credit rating agency.

The Bond issued by Cliffside Cliffs ( United States ) , in USD, with the ISIN code US18683KAM36, was rated CCC ( Extremely speculative ) by Standard & Poor's ( S&P ) credit rating agency.







Document
424B3 1 clf2018424b3document.htm 424B3
File d Pursua nt t o Rule 4 2 4 (b)(3 )
Re gist ra t ion N o. 3 3 3 -2 2 3 0 2 7
$ 1 ,0 7 5 ,0 0 0 ,0 0 0
Cle ve la nd-Cliffs I nc .
Offe r t o Ex c ha nge
All of t he Out st a nding Re st ric t e d 5 .7 5 % Se nior N ot e s due 2 0 2 5
I ssue d on Fe brua ry 2 7 , 2 0 1 7 a nd August 7 , 2 0 1 7
for
N e w ly I ssue d a nd Re gist e re d 5 .7 5 % Se nior N ot e s due 2 0 2 5
On February 27, 2017, we issued $500 million aggregate principal amount of our restricted 5.75% Senior Notes due 2025. On August
7, 2017, we issued an additional $575 million aggregate principal amount of our restricted 5.75% Senior Notes due 2025. We refer herein to our
existing 5.75% Senior Notes due 2025 as our Original Notes. The Original Notes were issued in private transactions exempt from the registration
requirements of the Securities Act of 1933, or the Securities Act.
We are offering to exchange up to $1,075 million aggregate principal amount of new 5.75% Senior Notes due 2025, which we refer to
herein as our Exchange Notes, for the outstanding Original Notes. We refer herein to the Original Notes and the Exchange Notes, collectively, as
the Notes. We refer to the offer to exchange as the Exchange Offer.
The terms of the Exchange Notes are substantially identical to the terms of the Original Notes, except that the Exchange Notes will be
registered under the Securities Act and the transfer restrictions and registration rights and related additional interest provisions applicable to the
Original Notes will not apply to the Exchange Notes. The Exchange Notes will be part of the same series as the Original Notes and will be issued
under the same indenture. The Exchange Notes will be exchanged for Original Notes in minimum denominations of $2,000 and integral multiples
of $1,000 in excess thereof. We will not receive any proceeds from the issuance of Exchange Notes in the Exchange Offer.
You may withdraw tenders of Original Notes at any time prior to the expiration of the Exchange Offer.
T he Ex c ha nge Offe r e x pire s a t 5 :0 0 p.m . N e w Y ork Cit y t im e on April 2 6 , 2 0 1 8 unle ss e x t e nde d, w hic h w e re fe r t o
a s t he Ex pira t ion Da t e .
We do not intend to list the Exchange Notes on any securities exchange or to seek approval through any automated quotation system, and no
active public market for the Exchange Notes is anticipated.
Y ou should c onside r c a re fully t he risk fa c t ors be ginning on pa ge 1 4 of t his prospe c t us be fore de c iding
w he t he r t o pa rt ic ipa t e in t he Ex c ha nge Offe r.
N e it he r t he Se c urit ie s a nd Ex c ha nge Com m ission, or t he SEC, nor a ny st a t e se c urit ie s c om m ission ha s a pprove d or
disa pprove d of t he Ex c ha nge N ot e s or de t e rm ine d if t his prospe c t us is t rut hful or c om ple t e . Any re pre se nt a t ion t o
t he c ont ra ry is a c rim ina l offe nse .
T he da t e of t his prospe c t us is M a rc h 2 9 , 2 0 1 8 .
Ra t he r t ha n re pe a t c e rt a in inform a t ion in t his prospe c t us t ha t w e ha ve a lre a dy inc lude d in re port s
file d w it h t he SEC, t his prospe c t us inc orpora t e s im port a nt busine ss a nd fina nc ia l inform a t ion a bout us t ha t
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
is not inc lude d in or de live re d w it h t his prospe c t us. We w ill provide t his inform a t ion t o you a t no c ha rge
upon w rit t e n or ora l re que st dire c t e d t o: Cle ve la nd -Cliffs I nc ., 2 0 0 Public Squa re , Suit e 3 3 0 0 , Cle ve la nd,
Ohio, At t e nt ion: I nve st or Re la t ions; T e le phone : (2 1 6 ) 6 9 4 -5 7 0 0 . I n orde r t o re c e ive t im e ly de live ry of a ny
re que st e d doc um e nt s in a dva nc e of t he Ex pira t ion Da t e , you should m a k e your re que st no la t e r
t ha n April 1 9 , 2 0 1 8 , w hic h is five full busine ss da ys be fore you m ust m a k e a de c ision re ga rding t he
Ex c ha nge Offe r.
T a ble of Cont e nt s

Pa ge
NOTICE TO INVESTORS
ii
WHERE YOU CAN FIND MORE INFORMATION
ii
INFORMATION WE INCORPORATE BY REFERENCE
ii
NON-GAAP FINANCIAL MEASURES
iii
PROSPECTIVE FINANCIAL INFORMATION
iv
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
v
SUMMARY
1
RISK FACTORS
14
USE OF PROCEEDS
19
RATIO OF EARNINGS TO FIXED CHARGES
19
THE EXCHANGE OFFER
20
DESCRIPTION OF OTHER INDEBTEDNESS
26
DESCRIPTION OF THE NOTES
30
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
53
CERTAIN ERISA CONSIDERATIONS
54
PLAN OF DISTRIBUTION
56
LEGAL MATTERS
57
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
57
N OT I CE T O I N V EST ORS
This prospectus may only be used where it is legal to make the Exchange Offer and by a broker-dealer for resales of
Exchange Notes acquired in the Exchange Offer where it is legal to do so.
This prospectus and the information incorporated by reference summarize documents and other information in a manner
we believe to be accurate, but we refer you to the actual documents for a more complete understanding of the information we
discuss in this prospectus and the information incorporated by reference. In deciding to exchange your Original Notes, you must
rely on your own examination of such documents, our business and the terms of the offering and the Exchange Notes, including
the merits and risks involved.
We make no representation to you that the Exchange Notes are a legal investment for you. You should not consider any
information in this prospectus to be legal, business or tax advice. You should consult your own attorney, business advisor and tax
advisor for legal, business and tax advice regarding an investment in the Exchange Notes. Neither the delivery of the prospectus
nor any exchange made pursuant to this prospectus implies that any information set forth in or incorporated by reference in this
prospectus is correct as of any date after the date of this prospectus.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of Exchange Notes. The letter of transmittal accompanying this
prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original Notes where
the Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have
agreed that, for a period ending on the date on which a broker-dealer is no longer required to deliver a prospectus in connection
with market-making or other trading activities, we will make this prospectus available to any broker-dealer for use in connection
with these resales. See "Plan of Distribution."
References in this prospectus to the terms "we," "us," "our," "the Company," or "Cliffs" or other similar terms mean
Cleveland-Cliffs Inc. and its consolidated subsidiaries, unless we state otherwise or the context indicates otherwise. As used in this
prospectus, the term "long ton" means a long ton (equal to 2,240 pounds) and the term "metric ton" means a metric ton (equal to
1,000 kilograms or 2,205 pounds).
WH ERE Y OU CAN FI N D M ORE I N FORM AT I ON
We are subject to the informational reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act.
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available
over the Internet at the SEC's website at www.sec.gov. You may read and copy any reports, statements and other information filed
by us at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further
information on the Public Reference Room.
We make available, free of charge, on our website at www.clevelandcliffs.com, our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and statements as soon as reasonably
practicable after they are filed with the SEC. The information contained on or accessible through our website is not part of this
prospectus, other than the documents that we file with the SEC that are specifically incorporated by reference into this prospectus.
I N FORM AT I ON WE I N CORPORAT E BY REFEREN CE
We are "incorporating by reference" information in documents we file with the SEC into this prospectus, which means that
we can disclose important information to you by referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus and information that we file later with the SEC will automatically update and supersede
this information. Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in or omitted from
this prospectus, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such
ii
statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this prospectus.
We incorporate by reference into this prospectus the documents listed below and any future filings we make with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of the initial filing of the registration statement of
which this prospectus forms a part and prior to the effectiveness of such registration statement and (2) after the date of this
prospectus until the completion of the Exchange Offer:
·
our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as amended by Amendment No. 1
to our Annual Report on Form 10-K/A, filed on March 13, 2018; and
·
our Current Report on Form 8-K, filed March 1, 2018.
We do not and will not, however, incorporate by reference into this prospectus any documents or portions thereof that are
not deemed "filed" with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our current reports on
Form 8-K unless, and except to the extent, specified in such current reports. You may obtain copies of these filings without charge
by accessing the investor relations section of www.clevelandcliffs.com or by requesting the filings in writing or by telephone at the
following address and telephone number.
Cleveland-Cliffs Inc.
Investor Relations
200 Public Square, Suite 3300
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
Cleveland, Ohio 44114
Telephone Number: (216) 694-5700
N ON -GAAP FI N AN CI AL M EASU RES
We believe that the financial statements and the other financial data included in or incorporated by reference into this
prospectus have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in
the United States, or GAAP, and the regulations published by the SEC, and are consistent with current practice with the exception
of the presentation of earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA excluding certain items
such as extinguishment/restructuring of debt, impacts of discontinued operations, foreign currency exchange remeasurement,
severance and contractor termination costs, certain supplies inventory write-offs, impairment of other long-lived assets and
intersegment corporate allocations of selling, general and administrative costs, which we refer to as Adjusted EBITDA, and cash
cost of goods sold and operating expense rate per long/metric ton, which are non-GAAP financial measures.
EBITDA, Adjusted EBITDA and cash cost of goods sold and operating expense rate per long/metric ton are not
measurements of financial performance or condition under GAAP and should not be considered as alternatives to net income,
operating income or any other financial performance measure derived in accordance with GAAP. Additionally, EBITDA and Adjusted
EBITDA are not intended to be measures of free cash flow available for management's discretionary use, as they do not consider
certain cash requirements, such as interest payments, tax payments and debt service requirements. These non-GAAP financial
measures are not calculated in the same manner by all companies and, accordingly, are not necessarily comparable to similarly
titled measures of other companies and may not be appropriate measures for comparing performance relative to other companies.
While we believe that the presentation of the non-GAAP financial measures will enhance an investor's understanding of our
operating performance, performance compared to other producers and a more accurate view of the cash outflows related to the
sale of iron ore, the use of the non-GAAP financial measures as analytical tools has limitations and you should not consider it in
isolation, or as a substitute for an analysis of our results of operations as reported in accordance with GAAP. For additional
information about EBITDA, Adjusted EBITDA and cash cost of goods sold and operating expense rate per long/metric ton, including
a description of how EBITDA, Adjusted EBITDA and cash cost of goods sold and operating expense rate per long/metric ton, are
calculated and reconciliations to the most directly comparable GAAP financial measures, see the section titled "Summary--
Summary Historical Consolidated Financial Data" of this prospectus.
iii
PROSPECT I V E FI N AN CI AL I N FORM AT I ON
The prospective financial information included in or incorporated by reference into this prospectus regarding our future
performance represents our management's estimates as of the date of this prospectus only. This information, which consists
entirely of forward-looking statements, has been prepared by our management and is qualified by, and subject to, the assumptions,
risks and uncertainties included or incorporated by reference in this prospectus that may cause actual results to differ materially.
Prospective financial information is necessarily speculative in nature, and it can be expected that some or all of the assumptions of
the information described above will not materialize or will vary significantly from actual results. For further discussion of some of
the factors that may cause actual results to vary materially from the information included or incorporated by reference herein, see
"Disclosure Regarding Forward-Looking Statements" and "Risk Factors." Accordingly, the prospective financial information included
in or incorporated by reference into this prospectus is only an estimate of what management believes is realizable as of the date of
this prospectus. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the
future that the data is forecast. In light of the foregoing, investors are urged to put the information in context and not to place
undue reliance on it. The prospective financial information included in this prospectus has been prepared by, and is the
responsibility of our management. Deloitte & Touche LLP has neither examined, compiled nor performed any procedures with
respect to the accompanying prospective financial information and, accordingly, Deloitte & Touche LLP does not express an
opinion or any other form of assurance with respect thereto. The Deloitte & Touche LLP report incorporated by reference into this
prospectus relates to our historical financial information. It does not extend to the prospective financial information and should not
be read to do so.
iv
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
DI SCLOSU RE REGARDI N G FORWARD-LOOK I N G ST AT EM EN T S
This prospectus, including the documents incorporated by reference, contains statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be
identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects,"
"estimates," "intends," "may," "will" or similar terms. These statements speak only as of the date of this prospectus or the date of
the document incorporated by reference, as applicable, and we undertake no ongoing obligation, other than that imposed by law, to
update these statements. These statements appear in a number of places in this prospectus, including the documents incorporated
by reference, and relate to, among other things, the intent, belief or current expectations of our directors or our officers with respect
to: our future financial condition; results of operations or prospects; estimates of our economic iron ore reserves; our business and
growth strategies; and our financing plans and forecasts. You are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from
those contained in, or implied by, the forward-looking statements as a result of various factors, some of which are unknown,
including, without limitation:
·
uncertainty and weaknesses in global economic conditions, including downward pressure on prices caused by oversupply
or imported products, the impact of barriers to trade, the outcomes of trade cases, reduced market demand and any
change to the economic growth rate in China;
·
continued volatility of iron ore and steel prices and other trends, including the supply approach of the major iron ore
producers, affecting our financial condition, results of operations or future prospects--specifically, the impact of price-
adjustment factors on our sales contracts;
·
our ability to successfully diversify our product mix and add new customers beyond our traditional blast furnace clientele,
specifically successful completion of our hot briquetted iron, or HBI, production plant;
·
our level of indebtedness could limit cash flow available to fund working capital, capital expenditures, acquisitions and other
general corporate purposes or ongoing needs of our business;
·
availability of capital and our ability to maintain adequate liquidity;
·
risks related to former and current international operations, including our ability to successfully conclude the Companies'
Creditors Arrangement Act (Canada), or CCAA, process in Canada and plan for the end of mine life in Australia in a
manner that minimizes cash outflows and associated liabilities;
·
our actual economic iron ore reserves or changes in current mineral estimates, including whether any mineralized material
qualifies as a reserve;
·
the impact of our customers reducing their steel production due to increased market share of steel produced using other
methods or lighter-weight steel alternatives;
·
the ability of our customers, joint venture partners and significant suppliers and service providers to meet their obligations
to us on a timely basis or at all;
·
the outcome of any litigation or arbitration, including any contractual disputes with our customers, joint venture partners or
significant energy, material or service providers;
·
our ability to maintain satisfactory relations with unions and employees;
·
impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or
maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any
governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory
changes;
·
problems or uncertainties with productivity, tons mined, transportation, capital spending, mine-closure obligations,
environmental liabilities, employee-benefit costs and other risks of the mining industry;
·
our ability to cost-effectively achieve planned production rates or levels, including at our HBI production plant;
·
our ability to successfully identify and consummate any strategic investments or development projects, including our HBI
production plant;
v
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
·
changes in sales volume or mix;
·
our ability to reach agreement with our customers regarding any modifications to sales contract provisions, renewals or new
arrangements;
·
events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated
assets, as well as any resulting impairment charges;
·
uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of
energy, equipment failures and other unexpected events;
·
adverse changes in currency values, currency exchange rates, interest rates and tax laws;
·
uncertainty relating to restructurings in the steel industry and/or affecting the steel industry;
·
the potential existence of significant deficiencies or material weaknesses in our internal control over financial reporting; and
·
other risks described in our reports filed with the SEC or the "Risk Factors" section of this report.
These factors and the other risk factors described in this prospectus, including the documents incorporated by reference,
are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no
assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will
have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements.
vi
SU M M ARY
This summary highlights information about us , the Exchange Offer and the Exchange Notes. This summary is not
complete and may not contain all of the information that you should consider prior to deciding whether to participate in the
Exchange Offer. For a more complete understanding of us, we encourage you to read this prospectus, including the
information incorporated by reference into this prospectus and the other documents to which we have expressly referred you.
In particular, we encourage you to read the historical financial statements, and the related notes, incorporated by reference
into this prospectus. Investing in the Notes involves significant risks, as described in the "Risk Factors" section.
Our Com pa ny
Founded in 1847, Cleveland-Cliffs Inc. is the largest and oldest independent iron ore mining company in the United
States. We are a major supplier of iron ore pellets to the North American steel industry from our mines and pellet plants
located in Michigan and Minnesota. Additionally, we operate an iron ore mining complex in Western Australia. By 2020, we
expect to be the sole producer of HBI in the Great Lakes region with the development of our first production plant in Toledo,
Ohio. Driven by the core values of safety, social, environmental and capital stewardship, our employees endeavor to provide
all stakeholders with operating and financial transparency.
We are organized through a global commercial group responsible for sales and delivery of our products and
operations groups responsible for the production of the iron ore that we market. Our continuing operations are organized
according to geographic location: U.S. Iron Ore and Asia Pacific Iron Ore.
In the U.S., we currently own or co-own four operational iron ore mines plus one indefinitely idled mine. We are
currently operating one iron ore mine in Michigan and three iron ore mines in Minnesota. All four mines are currently
operating at or near full capacity. The Empire mine located in Michigan was indefinitely idled beginning in August 2016. Our
Asia Pacific operations consist solely of our Koolyanobbing iron ore mining complex in Western Australia. Koolyanobbing is
currently operating at a level appropriate for the current price discounting environment for low-grade iron ore products
containing less than 62% iron, and we expect mining operations to cease during 2018.
U.S. Iron Ore
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
We are a major producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel
companies in the U.S. and Canada. We operate four iron ore mines: the Tilden mine in Michigan and the Northshore, United
Taconite and Hibbing mines in Minnesota. The U.S.-based mines currently have an annual rated capacity of 27.4 million long
tons of iron ore pellet production, representing 55% of total U.S. pellet production capacity. Based on our equity ownership in
these mines, our share of the annual rated production capacity is currently 21.2 million tons, representing 42% of total U.S.
annual pellet capacity. The Empire mine located in Michigan, which historically had annual rated capacity of 5.5 million long
tons, was indefinitely idled beginning in August 2016. During 2017, we acquired the remaining noncontrolling interest of the
Empire and Tilden mines from ArcelorMittal and U.S. Steel, respectively.
We produce various grades of iron ore pellets, including standard, fluxed and direct reduction grade, or DR-grade, for
use in our customers' operations as part of the steelmaking process. The variation in grades of iron ore pellets results from
the specific chemical and metallurgical properties of the ores at each mine, the requirements of the end user's steelmaking
process and whether or not fluxstone is added in the process. Although the grade or grades of pellets currently delivered to
each customer are based on that customer's preferences, which depend in part on the characteristics of the customer's
steelmaking operation, in certain cases our iron ore pellets can be used interchangeably. Standard pellets require less
processing, are generally the least costly pellets to produce and are called "standard" because no ground fluxstone, such as
limestone or dolomite, is added to the iron ore concentrate before turning the concentrate into pellets. In the case of fluxed
pellets, fluxstone is added to the concentrate, which produces pellets that can perform at higher productivity levels in the
customer's specific blast furnace and will minimize the amount of fluxstone the customer may be required to add to the blast
furnace. DR-grade pellets require additional processing to make a pellet that contains higher iron and lower silica content
than a standard pellet. Unlike standard or fluxed pellets, DR-grade pellets are fed into a direct reduced iron facility, which
then are converted into direct reduced iron, or DRI, or HBI, a high-quality raw material used to feed an electric arc furnace,
or EAF.
Each of our U.S. Iron Ore mines is located near the Great Lakes. The majority of our iron ore pellets are transported
via railroads to loading ports for shipment via vessel to blast furnace steelmakers in North America.
1
Our U.S. Iron Ore revenues primarily are derived from sales of iron ore pellets to the North American integrated steel
industry, consisting primarily of three major customers. Generally, we have multi-year supply agreements with our customers.
Sales volume under these agreements largely is dependent on customer requirements, and in certain cases, we are the sole
supplier of iron ore to the customer. Historically, each agreement has contained a base price that is adjusted annually using
one or more adjustment factors. Factors that could result in a price adjustment include changes in the Platts IODEX 62% Fe
Fines Spot Price along with pellet premiums, published Platts international indexed freight rates and changes in specified
producer price indices, including those for industrial commodities, fuel and steel. Our average remaining duration of our U.S.
Iron Ore contracts as of December 31, 2017 is approximately seven years.
Additionally, as the EAF steel market continues to grow in the U.S., there is an opportunity for our iron ore to serve
this market by providing pellets to the alternative metallics market to produce DRI, HBI and/or pig iron. In 2016 and 2017, we
produced and shipped industrial trials of low-silica DR-grade pellets, which were successfully processed in two customers'
DRI reactors to produce a high-quality DRI product. By 2020, we expect to sell these low-silica DR-grade pellets to our own
HBI facility in Toledo, Ohio.
For the years ended December 31, 2017, 2016 and 2015, we sold 18.7 million, 18.2 million and 17.3 million long
tons of iron ore pellets, respectively, from our share of the production from our U.S. Iron Ore mines. U.S. Iron Ore's three
largest customers accounted for approximately 88%, 83% and 93% of the segment's sales for the years ended December
31, 2017, 2016 and 2015, respectively.
At the end of 2017, our U.S. Iron Ore mines had proven and probable mineral reserves totaling 2,147.3 million long
tons, which equates to approximately 696.9 million saleable long tons. For the year ended December 31, 2017, our U.S. Iron
Ore segment had revenues of approximately $1,866.0 million and Adjusted EBITDA of approximately $559.4 million.
Asia Pacific Iron Ore
Our Asia Pacific Iron Ore operations are located in Western Australia and consist solely of our wholly-owned
Koolyanobbing operation. Koolyanobbing is a collective term for the ore deposits at Koolyanobbing, Mount Jackson and
Windarling. There are approximately 70 miles separating the three mining areas. Banded iron formations host the
mineralization, which is predominately hematite and goethite. Each deposit is characterized with different chemical and
physical attributes and, in order to achieve customer product quality, ore in varying quantities from each deposit must be
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
blended together.
Crushing and blending are undertaken at Koolyanobbing, where the crushing and screening plant is located. Once
the blended ore has been crushed and screened into a direct lump and fines shipping product, it is transported by rail
approximately 360 miles south to the Port of Esperance, via Kalgoorlie, for shipment to our customers in Asia.
Asia Pacific Iron Ore's production is under contract with steel companies primarily in China, Japan and South Korea.
In March 2017, we extended the majority of our supply agreements with steel producers in China for one year. These
contracts will expire in March 2018, and we will only renew contracts if it can be done in an economically viable manner. Our
supply agreement with our client in South Korea expired in December 2017. We renewed that agreement for 2018; however,
it is at a lower committed quantity than our previous agreement. Our supply agreements with our customers in Japan expire
in March 2018. These contracts could be renewed for additional volume. Pricing for our Asia Pacific Iron Ore Chinese
customers consists of shorter-term pricing mechanisms of various durations up to three months based on the average of daily
spot prices that are generally associated with the time of unloading of each shipment. Pricing with our Japanese and South
Korean customers is generally similar to the inputs used with our Chinese customers, but the pricing inputs are fixed before
shipment.
For the years ended December 31, 2017, 2016 and 2015, we sold 9.8 million, 11.6 million and 11.6 million metric
tons of iron ore, respectively, from our Western Australia mines. The segment's five largest customers together accounted for
a total of 57%, 56% and 47% of Asia Pacific Iron Ore product revenues for the years ended December 31, 2017, 2016 and
2015, respectively. For the year ended December 31, 2017, our Asia Pacific Iron Ore segment had revenues of
approximately $464.2 million and Adjusted EBITDA of approximately $50.4 million.
At the end of 2017, we had approximately 9.7 million metric tons of proven and probable reserves in our Asia Pacific
Iron Ore business, which we believe are the economic reserves and will be mined over the remaining life of the mine.
2
Our St ra t e gy
Our key strategic initiatives include:
We are Focused on Protecting our Core U.S. Iron Ore Business
We are the market-leading iron ore producer in the U.S., supplying differentiated iron ore pellets under long-term
contracts to major North American blast furnace steel producers. We have the unique advantage of being a low-cost, high-
quality producer of iron ore pellets in the Great Lakes market with significant transportation and logistics advantages to serve
the Great Lakes steel market effectively. The pricing structure and long-term nature of our existing contracts, along with our
low-cost operating profile, position U.S. Iron Ore as a strong cash flow generator in most commodity pricing environments.
Since instituting our strategy in 2014 of focusing on this core business, we have achieved significant accomplishments,
including providing volume certainty by signing a ten-year supply agreement with our largest customer; substantially reducing
operating costs by making operational improvements; and developing new pellet products to meet ever-evolving market
demands.
We recognize the importance of our strength in the U.S. Iron Ore business, and our top strategic priority is to protect
and enhance our market position. This involves continuing to deliver high-quality, custom-made pellets that allow our
customers to remain competitive in the quality, production efficiency, and environmental friendliness of their steel products.
Protecting the core business also involves continually evaluating opportunities to expand both our production capacity and
ore reserve life. In 2017, we achieved key accomplishments toward these goals by acquiring the remaining minority stake in
our Tilden and Empire mines as well as additional real estate interests in Minnesota.
Expanding our Customer Base
While we hold a strong market position in supplying iron ore to Great Lakes blast furnaces, we cannot ignore the
ongoing shift of steelmaking share in the U.S. away from our core blast furnace customers to EAF steelmakers. Over the
past 25 years, the market share of EAFs has nearly doubled. However, as EAFs have moved to higher value steel products,
they require more high-quality iron ore-based metallics instead of scrap as raw material feedstock. As a result of this trend,
one of our top strategic priorities is to become a critical supplier of the EAF market by providing these specialized metallics.
In June 2017, we announced the planned construction of an HBI production plant in Toledo, Ohio. HBI is a specialized high-
quality iron alternative to scrap that, when used as a feedstock, allows the EAF to produce more valuable grades of steel.
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
We expect our HBI to partially replace the over 3 million metric tons of ore-based metallics that are imported into the Great
Lakes every year from Russia, Ukraine, Brazil and Venezuela.
Our Toledo plant is expected to produce HBI at a rate of 1.6 million metric tons per year when brought to production
in 2020. We expect that this will create additional demand for our DR-grade pellets of 2.5 million long tons. Not only does
this production plant create another outlet for our high-margin pellets, but it also presents an attractive economic opportunity
for us. As the only producer of DR-grade pellets in the Great Lakes and with access to abundant, low-cost natural gas, we
will be in a unique position to serve clients in the region. In addition, the Toledo site is in close proximity to over 20 EAFs,
giving us a natural competitive freight advantage over import competitors.
Optimized, Divested or Shut Down All Non-Core Business Segments
Given the current price discounting environment for low-grade iron ore products containing less than 62% iron, we
are focused on optimizing the remaining ore reserve base of our Asia Pacific Iron Ore business. We will continue to operate
Asia Pacific Iron Ore with very low total capital expenditures until we cease mining operations, which we expect to occur at
some point during 2018.
Restructuring proceedings were commenced under the CCAA for the Bloom Lake Group (as defined below), part of
our Eastern Canadian Iron Ore businesses, in the first quarter of 2015. During the second quarter of 2015, the CCAA
protection granted to the Bloom Lake Group was extended to include the Wabush Group (as defined below) to facilitate the
reorganization of each of their businesses and operations. As of December 31, 2017, CCAA proceedings are still ongoing.
The Monitor appointed by the court in the CCAA proceedings for the Bloom Lake Group and the Wabush Group has
conducted a claims process pursuant to which creditors have filed claims against the Bloom Lake Group and the Wabush
Group. The Monitor is reviewing all claims filed as part of this claims process. Currently, there is uncertainty as to the
amount of the distribution that will be made to the creditors of the Bloom Lake Group and the Wabush Group, including, if
any, to us, and whether we could be held liable for claims that may be asserted by or on behalf of the Bloom Lake Group or
the Wabush Group or by their respective representatives against non-debtor affiliates of the Bloom Lake Group and the
Wabush Group. During 2017, we became aware that it was probable the Monitor
3
will assert a preference claim against us and/or certain of our affiliates. Given that it is probable the claim will be asserted by
the Monitor, we have recorded an estimated liability of $55.6 million, which includes the value of our related-party claims
against the Bloom Lake Group and the Wabush Group. Should the Monitor proceed to assert the claim, we believe the
Monitor will demand an amount in excess of the value of our related-party claims against the Bloom Lake Group and the
Wabush Group. Thus, it is possible that a change in the estimated liability may occur in the future. We deny liability for any
amount and will vigorously defend such claim.
On December 22, 2015, we closed the sale of our remaining North American Coal business, which included the
Pinnacle mine in West Virginia and the Oak Grove mine in Alabama, to Seneca Coal Resources, LLC, or Seneca. The sale
marked our exit from the coal business and represented another very important step in the implementation of our U.S. Iron
Ore pellet-centric strategy. Prior to this sale, it was determined by management as of March 31, 2015 that our North
American Coal operating segment met the criteria to be classified as held for sale under ASC 205, Presentation of Financial
Statements.
Maintaining Discipline on Costs and Capital Spending and Improving our Financial Flexibility
We believe our ability to execute our strategy is dependent on our improving financial position, balance sheet
strength and financial flexibility, which will enable us to manage through the inherent cyclical demand for our products and
volatility in commodity prices. Our streamlined organization and support functions are well-aligned to best serve our strategic
direction. Our capital allocation plan is focused on strengthening and protecting our core U.S. Iron Ore operations and
expanding our customer base.
As the implementation of our strategy has strengthened the business, we have put additional emphasis on the
continued improvement of our balance sheet via continued reduction of long-term debt. Since the middle of 2014, we have
reduced the principal of our debt by 15% and decreased our average cost of debt to 5% by using various liability
management strategies consistent with our capital allocation priorities and our stated objective of improving the strength of
our balance sheet and simplifying the capital structure. Given the cyclical nature of our business, we will continue to be
opportunistic in managing our balance sheet and capital structure, which will put us in an optimal position to manage through
any commodity environment, and we continue to seek the best opportunities to accomplish this.
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document
Com pe t it ive St re ngt hs
Resilient U.S. Iron Ore Operations
Our U.S. Iron Ore segment is the core focus of our business strategy. The U.S. Iron Ore segment is the primary
contributor to our consolidated results, generating $1,866.0 million of consolidated revenue and $559.4 million of consolidated
Adjusted EBITDA for the year ended December 31, 2017. U.S. Iron Ore produces differentiated iron ore pellets that are
customized for use in customers' blast furnaces as part of the steelmaking process. The grades of pellets currently delivered
to each customer are based on that customer's preferences, which depend in part on the characteristics of the customer's
blast furnace operation. We believe our long history of supplying customized pellets to the U.S. steel producers has resulted
in a co-dependent relationship between us and our customers. This technical and operational co-dependency has enabled
us to claim a substantial portion of the total U.S. iron ore market. Based on Cliffs' equity ownership in its U.S. mines, Cliffs'
share of the annual rated production capacity is 21.2 million long tons, representing 42% of total U.S. annual pellet capacity.
Long-lived assets with an average mine life of approximately 30 years provide the opportunity to maintain our significant
market position well into the future.
We believe U.S. Iron Ore is uniquely positioned in the global iron ore market due to its muted exposure to seaborne
iron ore pricing. More than half of U.S. Iron Ore production is sold through long-term contracts that are structured with
various formula-based pricing mechanisms that reference spot iron ore pricing, domestic steel prices, and Atlantic-based
pellet premiums, among other items, and mitigate the impact of any one factor's price volatility on our business.
In addition, we maintain a freight advantage compared to our competition as a result of our proximity to U.S.
steelmaking operations. The Great Lakes market is largely isolated and difficult to enter. Our costs are lower as a result of
inherent transportation advantages associated with our mine locations near the Great Lakes, which allows for transportation
via railroads and loading ports. U.S. Iron Ore mines also benefit from on-site pellet production and ore production facilities
located a short distance from the mines.
4
Experienced Management Team
We have a seasoned and experienced management team with extensive mining sector knowledge and the functional
disciplines required to manage and grow our business. In August 2014, the Board of Directors appointed Lourenco
Goncalves as Chairman, President and Chief Executive Officer of the Company. Mr. Goncalves joined Cliffs with over 30
years of experience in the metals and mining industries. Effective as of January 1, 2017, Timothy K. Flanagan now serves as
Executive Vice President, Chief Financial Officer of the Company. Mr. Flanagan has held several positions with the
Company since April 2008, and previously served as Vice President, Corporate Controller & Chief Accounting Officer of the
Company. Other experienced members of executive leadership include Terry Fedor, Executive Vice President, U.S. Iron Ore,
James Graham, Executive Vice President, Chief Legal Officer & Secretary, Maurice Harapiak, Executive Vice President,
Human Resources & Chief Administrative Officer, Terrence Mee, Executive Vice President, Global Commercial, and Clifford
Smith, Executive Vice President, Business Development.
Corpora t e I nform a t ion
Our principal executive offices are located at 200 Public Square, Suite 3300, Cleveland, Ohio 44114-2315. Our main
telephone number is (216) 694-5700, and our website address is www.clevelandcliffs.com. The information contained on or
accessible through our website is not part of this prospectus, other than the documents that we file with the SEC that are
specifically incorporated by reference into this prospectus.
5
T he Ex c ha nge Offe r
https://www.sec.gov/Archives/edgar/data/764065/000076406518000072/clf2018424b3document.htm[4/2/2018 9:25:42 AM]


Document Outline