ÐÇ¿Õ´«Ã½

Quarterly report pursuant to Section 13 or 15(d)

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

v3.5.0.2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
9 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract] Ìý
Basis Of Consolidation
Basis of Consolidation
The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned and majority-owned subsidiaries, including the following operations as of SeptemberÌý30, 2016:
Name
Ìý
Location
Ìý
Ownership Interest
Ìý
Operation
Ìý
Status of Operations
Northshore
Ìý
Minnesota
Ìý
100.0%
Ìý
Iron Ore
Ìý
Active
United Taconite
Ìý
Minnesota
Ìý
100.0%
Ìý
Iron Ore
Ìý
Active
Tilden
Ìý
Michigan
Ìý
85.0%
Ìý
Iron Ore
Ìý
Active
Empire
Ìý
Michigan
Ìý
79.0%
Ìý
Iron Ore
Ìý
Idle
Koolyanobbing
Ìý
Western Australia
Ìý
100.0%
Ìý
Iron Ore
Ìý
Active

Intercompany transactions and balances are eliminated upon consolidation.
Equity Method Investments
Equity Method Investments
Our 23 percent ownership interest in Hibbing is recorded as an equity method investment. As of SeptemberÌý30, 2016 and DecemberÌý31, 2015, our investment in Hibbing was $1.9 million and $2.4 million, respectively, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position.
Foreign Currency
Foreign Currency
Our financial statements are prepared with the U.S. dollar as the reporting currency. The functional currency of our Australian subsidiaries is the Australian dollar. The functional currency of all other international subsidiaries is the U.S. dollar. The financial statements of international subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for revenues, expenses, gains and losses. Where the local currency is the functional currency, translation adjustments are recorded as Accumulated other comprehensive loss. Income taxes generally are not provided for foreign currency translation adjustments. To the extent that monetary assets and liabilities, inclusive of intercompany notes, are recorded in a currency other than the functional currency, these amounts are remeasured each reporting period, with the resulting gain or loss being recorded in the Statements of Unaudited Condensed Consolidated Operations. Transaction gains and losses resulting from remeasurement of short-term intercompany loans are included in Miscellaneous - net in the Statements of Unaudited Condensed Consolidated Operations.
For the three and nine months ended SeptemberÌý30, 2016, we incurred a net loss of $0.3 million and $1.2 million, respectively, from the impact of transaction gains and losses resulting from remeasurement. Of these amounts, for the three months ended SeptemberÌý30, 2016, losses of $1.1 million and gains of $0.6 million and for the nine months ended SeptemberÌý30, 2016, gains of $0.3 million and losses of $2.0 million resulted from remeasurement of cash and cash equivalents and remeasurement of certain obligations, respectively.
For the three and nine months ended SeptemberÌý30, 2015, net gains of $2.4 million and $15.2 million, respectively, related to the impact of transaction gains and losses resulting from remeasurement. Of these amounts, for the three months ended SeptemberÌý30, 2015, gains of $0.1 million and $1.3 million, respectively, resulted from remeasurement of short-term intercompany loans and cash and cash equivalents. Additionally, of these amounts for the nine months ended SeptemberÌý30, 2015, gains of $11.1 million and $2.0 million resulted from remeasurement of short-term intercompany loans and cash and cash equivalents, respectively.
Significant Accounting Policies
Significant Accounting Policies
A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended DecemberÌý31, 2015 included in our Annual Report on Form 10-K filed with the SEC. There have been no material changes in our significant accounting policies and estimates from those disclosed therein.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
Issued and Not Effective
In February 2016, the FASB issued ASU No.Ìý2016-02,ÌýLeases. The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after DecemberÌý15, 2018. We are currently reviewing the guidance and assessing the potential impact on our consolidated financial statements.
In March 2016, the FASB issued ASU No.Ìý2016-09,ÌýStock Compensation - Improvements to Employee Share-Based Payment Accounting.Ìý The new standard is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for fiscal years beginning after DecemberÌý15, 2016, and early adoption is permitted. We are currently reviewing the guidance and assessing the potential impact on our consolidated financial statements.
Issued and Adopted
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. The new standard addresses eight specific changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We have adopted the guidance for the period ended September 30, 2016 and have applied this amended accounting guidance to the Statements of Unaudited Condensed Consolidated Cash Flows for all periods presented. The adoption of ASU 2016-15 did not have an impact on prior results reported in the Statements of Unaudited Condensed Consolidated Cash Flows.