星空传媒 Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

听

Basis Of Consolidation

Basis of Consolidation

The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including the following operations as of September听30, 2017:



Name	听	Location	听	Ownership Interest	听	Operation	听	Status of Operations
Northshore	听	Minnesota	听	100.0%	听	Iron Ore	听	Active
United Taconite	听	Minnesota	听	100.0%	听	Iron Ore	听	Active
Tilden¹	听	Michigan	听	100.0%	听	Iron Ore	听	Active
Empire¹	听	Michigan	听	100.0%	听	Iron Ore	听	Indefinitely Idled
Koolyanobbing	听	Western Australia	听	100.0%	听	Iron Ore	听	Active
听	听	听	听	听	听	听	听	听
¹听During the third quarter of 2017, our ownership interest in Tilden and Empire changed. Refer to the Noncontrolling Interests听section below for additional information.

Intercompany transactions and balances are eliminated upon consolidation.

Equity Method Investments

Our 23% ownership interest in Hibbing is recorded as an equity method investment. As of September听30, 2017 and December听31, 2016, our investment in Hibbing was $6.1 million and $8.7 million, respectively, classified as Other liabilities in the Statements of Unaudited Condensed Consolidated Financial Position.

Noncontrolling Interests

During the third quarter of 2017, our ownership interest in Empire increased to 100% as we reached an agreement to distribute the noncontrolling interest net assets for $132.7 million to ArcelorMittal, in exchange for its interest in Empire. The net assets were agreed to be distributed in three installments of approximately $44.2 million, the first of which was paid upon the execution of the agreement and the remaining distributions are due in August 2018 and August 2019. Upon payment of the first installment, we assumed ArcelorMittal's 21% interest and have reflected this ownership percentage change in our unaudited condensed consolidated financial statements as of and for the period ended September听30, 2017. We accounted for the increase in ownership as an equity transaction, which resulted in a $16.0 million decrease in equity attributable to Cliffs' shareholders and a $116.7 million decrease in Noncontrolling interest.

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 our Australian 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. 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, including short-term intercompany loans, 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.

The following represents the transaction gains and losses resulting from remeasurement for the three and nine months ended September听30, 2017 and 2016:



听	听	(In Millions)
听	听	Three Months Ended September 30,							听	Nine Months Ended September 30,
听	听	2017			听	2016			听	2017			听	2016
Remeasurement of short-term intercompany loans	听	$	0.1		听	$	0.2		听	$	16.7		听	$	0.5
Remeasurement of cash and cash equivalents	听	(1.1		)	听	(1.1		)	听	(2.8		)	听	0.3
Other remeasurement	听	(1.4		)	听	0.6			听	(2.7		)	听	(2.0		)
Net impact of transaction gains (losses) resulting from remeasurement	听	$	(2.4	)	听	$	(0.3	)	听	$	11.2		听	$	(1.2	)

Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended December听31, 2016 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

Issued and Not Effective

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.听 The new standard simplifies hedge accounting through changes to both designation and measurement requirements.听 For hedges that qualify as highly effective, the new standard eliminates the requirement to separately measure and record hedge ineffectiveness resulting in better alignment between the presentation of the effects of the hedging instrument and the hedged item in the financial statements.听 ASU No.听2017-12 is effective for fiscal years beginning after December听15, 2018, including interim periods within those fiscal years; the ASU allows for early adoption in any interim period after issuance of the update.听 We are currently assessing the impact this ASU will have on the consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new standard requires the service cost component of pension and other postretirement benefit expenses to be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of net benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The guidance is effective for fiscal years beginning after December听15, 2017. The adoption of ASU No. 2017-07 in the first quarter of 2018 will impact the Statements of Unaudited Condensed Consolidated Operations by changing our classification of the components of pension and OPEB costs; however, it will not impact our Net Income (Loss). The following represents the estimated impact from the adoption of ASU No. 2017-07 for the nine months ended September听30, 2017:



听	听	($ in Millions)
听	听	Nine Months Ended September 30, 2017
听	听	听			听	Estimate
Financial Statement Line Impacted	听	As Reported			听	Adoption of ASU No. 2017-07			听	As Adjusted
Cost of goods sold and operating expenses	听	$	(1,328.3	)	听	$	1.3		听	$	(1,327.0	)
Selling, general and administrative expenses	听	$	(77.8	)	听	$	(5.8	)	听	$	(83.6	)
Miscellaneous - net	听	$	3.0		听	$	(1.2	)	听	$	1.8
Operating income	听	$	326.2		听	$	(5.7	)	听	$	320.5
Other non-operating income	听	$	2.3		听	$	5.7		听	$	8.0
Net Income (Loss)	听	$	53.2		听	$	鈥�		听	$	53.2

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. We plan to adopt the standard on its effective date of January 1, 2019. The new standard must be adopted using a modified retrospective approach and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently finalizing our implementation plan, compiling an inventory of existing leases and evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenues from Contracts with Customers. The new revenue guidance broadly replaces the revenue guidance provided throughout the Codification. The core principle of the revenue guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Reporting entities must prepare new disclosures providing qualitative and quantitative information on the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. New disclosures also include qualitative and quantitative information on significant judgments, changes in judgments, and contract acquisition assets. We plan to adopt the standard on its effective date of January 1, 2018 using the modified retrospective transition method. As of September 30, 2017, we have completed the evaluation of the new standard and the related review and assessment of substantially all existing contracts with our customers. We determined that revenue will generally be recognized upon delivery for our U.S. Iron Ore customers, which is earlier than under the current guidance. Current guidance requires us to recognize revenue when title transfers which is generally the point at which we receive payment. However, the total amount of revenue recognized during the year should remain substantially the same as under current GAAP. We do not anticipate any significant changes in the timing and pattern of revenue recognition for our Asia Pacific Iron Ore contracts. Based on our analysis to date, we anticipate the primary impact of the adoption on our consolidated financial statements will be the additional required disclosures around revenue recognition in the notes to the consolidated financial statements.