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Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

v3.2.0.727
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
6 Months Ended
Jun. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] Ìý
Fair Value Of Assets And Liabilities
The following represents the assets and liabilities of the Company measured at fair value at JuneÌý30, 2015 and December 31, 2014:
Ìý
(In Millions)
Ìý
JuneÌý30, 2015
Description
Quoted Prices in Active
Markets for Identical Assets/Liabilities
(Level 1)
Ìý
Significant Other Observable Inputs
(Level 2)
Ìý
Significant Unobservable Inputs
(Level 3)
Ìý
Total
Assets:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Cash equivalents
$
130.0

Ìý
$
—

Ìý
$
—

Ìý
$
130.0

Derivative assets
—

Ìý
—

Ìý
7.7

Ìý
7.7

Available-for-sale marketable securities
0.1

Ìý
—

Ìý
—

Ìý
0.1

Total
$
130.1

Ìý
$
—

Ìý
$
7.7

Ìý
$
137.8

Liabilities:

Ìý

Ìý

Ìý

Derivative liabilities
$
—

Ìý
$
—

Ìý
$
8.0

Ìý
$
8.0

Foreign exchange contracts
—

Ìý
3.3

Ìý
—

Ìý
3.3

Total
$
—

Ìý
$
3.3

Ìý
$
8.0

Ìý
$
11.3

Ìý
(In Millions)
Ìý
DecemberÌý31, 2014
Description
Quoted Prices in Active
Markets for Identical
Assets/Liabilities (Level 1)
Ìý
Significant Other Observable Inputs
(Level 2)
Ìý
Significant Unobservable Inputs
(Level 3)
Ìý
Total
Assets:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Derivative assets
$
—

Ìý
$
—

Ìý
$
63.2

Ìý
$
63.2

Available-for-sale marketable securities
4.3

Ìý
—

Ìý
—

Ìý
4.3

Total
$
4.3

Ìý
$
—

Ìý
$
63.2

Ìý
$
67.5

Liabilities:

Ìý

Ìý

Ìý

Derivative liabilities
$
—

Ìý
$
—

Ìý
$
9.5

Ìý
$
9.5

Foreign exchange contracts
—

Ìý
31.5

Ìý
—

Ìý
31.5

Total
$
—

Ìý
$
31.5

Ìý
$
9.5

Ìý
$
41.0

Fair Value, Recurring and Nonrecurring, Valuation Techniques
The following table illustrates information about quantitative inputs and assumptions for the derivative assets and derivative liabilities categorized in Level 3 of the fair value hierarchy:
Qualitative/Quantitative Information About Level 3 Fair Value Measurements
Ìý
Ìý
(In Millions)
Fair Value at June 30, 2015
Ìý
Balance Sheet Location
Ìý
Valuation Technique
Ìý
Unobservable Input
Ìý
Range or Point Estimate per ton
(Weighted Average)
Ìý
Provisional Pricing Arrangements
Ìý
$
0.2

Ìý
Other current assets
Ìý
Market Approach
Ìý
Management's
Estimate of 62% Fe
Ìý
$60
Ìý
$
8.0

Ìý
Other current liabilities
Ìý
Ìý
Ìý
Customer Supply Agreement
Ìý
$
7.5

Ìý
Other current assets
Ìý
Market Approach
Ìý
Hot-Rolled Steel Estimate
Ìý
$485 - $530 ($502)
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation
The following tables represent a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended JuneÌý30, 2015 and 2014.
Ìý
(In Millions)
Ìý
Derivative Assets (Level 3)
Ìý
Three Months Ended
June 30,
Ìý
Six Months Ended
June 30,
Ìý
2015
Ìý
2014
Ìý
2015
Ìý
2014
Beginning balance
$
34.5

Ìý
$
43.3

Ìý
$
63.2

Ìý
$
57.7

Total gains (losses)
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Included in earnings
0.6

Ìý
33.0

Ìý
10.7

Ìý
62.0

Settlements
(27.4
)
Ìý
(43.3
)
Ìý
(66.2
)
Ìý
(86.7
)
Transfers into Level 3
—

Ìý
—

Ìý
—

Ìý
—

Transfers out of Level 3
—

Ìý
—

Ìý
—

Ìý
—

Ending balance - June 30
$
7.7

Ìý
$
33.0

Ìý
$
7.7

Ìý
$
33.0

Total gains for the period included in earnings attributable to the change in unrealized gains on assets still held at the reporting date
$
0.6

Ìý
$
33.0

Ìý
$
10.7

Ìý
$
62.0

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Ìý
(In Millions)
Ìý
Derivative Liabilities (Level 3)
Ìý
Three Months Ended
June 30,
Ìý
Six Months Ended
June 30,
Ìý
2015
Ìý
2014
Ìý
2015
Ìý
2014
Beginning balance
$
(16.2
)
Ìý
$
(4.0
)
Ìý
$
(9.5
)
Ìý
$
(1.0
)
Total gains (losses)
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Included in earnings
1.1

Ìý
(16.2
)
Ìý
(17.3
)
Ìý
(20.2
)
Settlements
7.1

Ìý
—

Ìý
18.8

Ìý
1.0

Transfers into Level 3
—

Ìý
—

Ìý
—

Ìý
—

Transfers out of Level 3
—

Ìý
—

Ìý
—

Ìý
—

Ending balance - June 30
$
(8.0
)
Ìý
$
(20.2
)
Ìý
$
(8.0
)
Ìý
$
(20.2
)
Total losses for the period included in earnings attributable to the change in unrealized losses on liabilities still held at the reporting date
$
(5.8
)
Ìý
$
(16.2
)
Ìý
$
(8.0
)
Ìý
$
(20.2
)
Schedule Of Carrying Value And Fair Value Of Financial Instruments
A summary of the carrying amount and fair value of other financial instruments at JuneÌý30, 2015 and DecemberÌý31, 2014 were as follows:
Ìý
Ìý
Ìý
(In Millions)
Ìý
Ìý
Ìý
JuneÌý30, 2015
Ìý
DecemberÌý31, 2014
Ìý
Classification
Ìý
Carrying
Value
Ìý
Fair Value
Ìý
Carrying
Value
Ìý
Fair Value
Long-term debt:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Senior Notes—$700 million
Level 1
Ìý
$
422.9

Ìý
$
208.4

Ìý
$
689.5

Ìý
$
367.3

Senior Notes—$1.3 billion
Level 1
Ìý
795.1

Ìý
357.4

Ìý
1,279.9

Ìý
704.0

Senior Notes—$400 million
Level 1
Ìý
325.8

Ìý
163.6

Ìý
393.7

Ìý
228.1

Senior Notes—$500 million
Level 1
Ìý
434.0

Ìý
318.0

Ìý
477.4

Ìý
312.0

Senior First Lien Notes —$540 million
Level 1
Ìý
504.9

Ìý
512.7

Ìý
—

Ìý
—

Senior Second Lien Notes —$544.2 million
Level 1
Ìý
402.2

Ìý
348.2

Ìý
—

Ìý
—

ABL Facility
Level 2
Ìý
—

Ìý
—

Ìý
—

Ìý
—

Fair value adjustment to interest rate hedge
Level 2
Ìý
2.5

Ìý
2.5

Ìý
2.8

Ìý
2.8

Total long-term debt
Ìý
Ìý
$
2,887.4

Ìý
$
1,910.8

Ìý
$
2,843.3

Ìý
$
1,614.2

Fair Value Measurements, Nonrecurring
Ìý
Ìý
(In Millions)
Ìý
Ìý
MarchÌý31, 2015
Description
Ìý
Quoted Prices in Active
Markets for Identical Assets/
Liabilities
(Level 1)
Ìý
Significant Other Observable Inputs
(Level 2)
Ìý
Significant Unobservable Inputs
(Level 3)
Ìý
Total
Ìý
Total Gains
Liabilities:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
$544.2 Million 7.75% 2020 Second Lien Notes
Ìý
$
—

Ìý
$
397.2

Ìý
$
—

Ìý
$
397.2

Ìý
$
269.5

Ìý
Ìý
$
—

Ìý
$
397.2

Ìý
$
—

Ìý
$
397.2

Ìý
$
269.5

The $544.2 million 7.75 percent Second Lien Notes issued in the exchange offers were recorded as an extinguishment of debt as the change in debt terms was considered substantial. As such, the newly issued Second Lien Senior Notes were recorded at fair value at the issuance date. In order to determine the fair value of the Second Lien Senior Notes on the date of the exchange, we utilized the median bid ask spread obtained from various investment banks for the exchange date. The bid ask spread is indicative of the fair value of the notes on the exchange date. The 27.0 percent discount equated to a discount of $147.0 million on the issue value of $544.2 million, or an estimated fair value of $397.2 million.
Ìý
Ìý
(In Millions)
Ìý
Ìý
December 31, 2014
Description
Ìý
Quoted Prices in Active
Markets for Identical Assets/
Liabilities
(Level 1)
Ìý
Significant Other Observable Inputs
(Level 2)
Ìý
Significant Unobservable Inputs
(Level 3)
Ìý
Total
Ìý
Total Losses
Assets:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Goodwill impairment -
Asia Pacific Iron Ore reporting unit
Ìý
$
—

Ìý
$
—

Ìý
$
—

Ìý
$
—

Ìý
$
73.5

Other long-lived assets -
Property, plant and equipment
ÌýÌýÌýÌýand Mineral rights:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Asia Pacific Iron Ore reporting unit
Ìý
—

Ìý
—

Ìý
72.4

Ìý
72.4

Ìý
526.5

Other reporting units
Ìý
—

Ìý
—

Ìý
—

Ìý
—

Ìý
11.3

Other long-lived assets -
Intangibles and other long-term assets:
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Asia Pacific Iron Ore reporting unit
Ìý
—

Ìý
—

Ìý
7.0

Ìý
7.0

Ìý
24.2

Investment in ventures
impairment - Global Exploration
Ìý
—

Ìý
—

Ìý
—

Ìý
—

Ìý
9.2

Ìý
Ìý
$
—

Ìý
$
—

Ìý
$
79.4

Ìý
$
79.4

Ìý
$
644.7