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Quarterly report pursuant to Section 13 or 15(d)

ACQUISITION OF AK STEEL (Tables)

v3.20.2
ACQUISITION OF AK STEEL (Tables)
9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract] Ìý
Schedule of Business Acquisitions by Acquisition, by Acquisition [Table Text Block] The fair value of the total purchase consideration was determined as follows:
(In Millions)
Fair value of Cliffs common shares issued for AK Steel outstanding common stock $ 617.6Ìý
Fair value of replacement equity awards 3.9Ìý
Fair value of AK Steel debt 913.6Ìý
Total purchase consideration $ 1,535.1Ìý
The fair value of AK Steel's debt included in the consideration is calculated as follows:
(In Millions)
Credit Facility $ 590.0Ìý
7.50% Senior Secured Notes due July 2023 323.6Ìý
Fair value of debt included in consideration $ 913.6Ìý
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable [Table Text Block] The fair value of the total purchase consideration was determined as follows:
(In Millions)
Fair value of Cliffs common shares issued for AK Steel outstanding common stock $ 617.6Ìý
Fair value of replacement equity awards 3.9Ìý
Fair value of AK Steel debt 913.6Ìý
Total purchase consideration $ 1,535.1Ìý
ÌýÌýÌýÌýThe fair value of Cliffs common shares issued for outstanding shares of AK Steel common stock and with respect to Cliffs common shares underlying converted AK Steel equity awards that vested upon completion of the Merger is calculated as follows:
(In Millions, Except Per Share Amounts)
Number of shares of AK Steel common stock issued and outstanding 316.9Ìý
Exchange ratio 0.400Ìý
Number of Cliffs common shares issued to AK Steel stockholders 126.8Ìý
Price per share of Cliffs common shares $ 4.87Ìý
Fair value of Cliffs common shares issued for AK Steel outstanding common stock $ 617.6Ìý
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] The preliminary purchase price allocation to assets acquired and liabilities assumed in the Merger was:
(In Millions)
Initial Allocation of Consideration Measurement Period Adjustments Updated Preliminary Allocation
Cash and cash equivalents $ 37.7Ìý $ 2.0Ìý $ 39.7Ìý
Accounts receivable 666.0Ìý (3.1) 662.9Ìý
Inventories 1,562.8Ìý (39.8) 1,523.0Ìý
Other current assets 67.5Ìý (15.4) 52.1Ìý
Property, plant and equipment 2,184.4Ìý (20.1) 2,164.3Ìý
Intangible assets 163.0Ìý (15.0) 148.0Ìý
Right of use asset, operating leases 225.9Ìý (16.3) 209.6Ìý
Other non-current assets 85.9Ìý 26.2Ìý 112.1Ìý
Accounts payable (636.3) (6.1) (642.4)
Accrued liabilities (222.5) 0.1Ìý (222.4)
Other current liabilities (181.8) 6.6Ìý (175.2)
Long-term debt (1,179.4) —Ìý (1,179.4)
Deferred income taxes (19.7) (0.2) (19.9)
Operating lease liability, non-current (188.1) 12.7Ìý (175.4)
Intangible liabilities (140.0) 69.5Ìý (70.5)
Pension and OPEB liabilities (873.0) 2.1Ìý (870.9)
Asset retirement obligations (13.9) (2.0) (15.9)
Other non-current liabilities (144.2) (2.3) (146.5)
Net identifiable assets acquired 1,394.3Ìý (1.1) 1,393.2Ìý
Goodwill 141.2Ìý 0.7Ìý 141.9Ìý
Total net assets acquired $ 1,535.5Ìý $ (0.4) $ 1,535.1Ìý
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] The preliminary purchase price allocated to identifiable intangible assets and liabilities acquired was:
(In Millions) Weighted Average Life (In Years)
Intangible assets:
Customer relationships $ 77.0Ìý 18
Developed technology 60.0Ìý 17
Trade names and trademarks 11.0Ìý 10
Total identifiable intangible assets $ 148.0Ìý 17
Intangible liabilities:
Above-market supply contracts $ (70.5) 12
Business Acquisition, Pro Forma Information [Table Text Block] The following table provides unaudited pro forma financial information, prepared in accordance with Topic 805, for the three and nine months ended SeptemberÌý30, 2020 and 2019, as if AK Steel had been acquired as of January 1, 2019:
(In Millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020 2019 2020 2019
Revenues $ 1,646.0Ìý $ 1,937.6Ìý $ 4,265.1Ìý $ 5,958.7Ìý
Net income (loss) attributable to Cliffs shareholders (6.0) 84.2Ìý (123.9) 213.3Ìý