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Annual report pursuant to Section 13 and 15(d)

Related Parties

v2.4.0.6
Related Parties
 12 Months Ended
Dec. 31, 2011
Related Parties [Abstract] Ìý
Related Parties

NOTE 18 — RELATED PARTIES

We co-own three of our five U.S. iron ore mines and one of our two Eastern Canadian iron ore mines with various joint venture partners that are integrated steel producers or their subsidiaries. We are the manager of each of the mines we co-own and rely on our joint venture partners to make their required capital contributions and to pay for their share of the iron ore pellets that we produce. The joint venture partners are also our customers. The following is a summary of the mine ownership of these iron ore mines at December 31, 2011:

Mine

 ÌýÌý CliffsÌýNatural
Resources		 Ìý ÌýÌý ArcelorMittal Ìý ÌýÌý U.ÌýS.ÌýSteel
Canada		 Ìý ÌýÌý WISCO Ìý

Empire

 ÌýÌý Ìý 79.0 ÌýÌý ÌýÌý Ìý 21.0 ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý

Tilden

 ÌýÌý Ìý 85.0 ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý ÌýÌý Ìý 15.0 ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý

Hibbing

 ÌýÌý Ìý 23.0 ÌýÌý ÌýÌý Ìý 62.3 ÌýÌý ÌýÌý Ìý 14.7 ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý

Bloom Lake

 ÌýÌý Ìý 75.0 ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý ÌýÌý Ìý —ÌýÌý ÌýÌý ÌýÌý Ìý 25.0 ÌýÌý

ArcelorMittal has a unilateral right to put its interest in the Empire Mine to us, but has not exercised this right to date.

Product revenues to related parties were as follows:

Ìý

Ìý ÌýÌý (In Millions) Ìý
ÌýÌý ÌýÌý 2011 Ìý Ìý 2010 Ìý Ìý 2009 Ìý

Product revenues to related parties

 ÌýÌý $ 2,192.4 ÌýÌý Ìý $ 1,165.5 ÌýÌý Ìý $ 593.8 ÌýÌý

Total product revenues

 ÌýÌý Ìý 6,551.7 ÌýÌý Ìý Ìý 4,416.8 ÌýÌý Ìý Ìý 2,216.2 ÌýÌý

Related party product revenue as a percent of total product revenue

 ÌýÌý Ìý 33.5 %Ìý Ìý Ìý 26.4 %Ìý Ìý Ìý 26.8 %Ìý

Amounts due from related parties recorded in Accounts receivable and Derivative assets, including customer supply agreements and provisional pricing arrangements, were $180.4 million and $52.4 million at December 31, 2011 and 2010, respectively. Amounts due to related parties recorded in Other current liabilities, including provisional pricing arrangements and liabilities to minority parties, were $43.0 million at December 31, 2011.

In 2002, we entered into an agreement with Ispat that restructured the ownership of the Empire mine and increased our ownership fromÌý46.7 percent toÌý79 percent in exchange for assumption of all mine liabilities. Under the terms of the agreement, we indemnified Ispat from obligations of Empire in exchange for certain future payments to Empire and to us by Ispat of $120.0 million, recorded at a present value of $26.5 million and $32.8 million at December 31, 2011 and 2010, respectively. Of these amounts, $16.5 million and $22.8 million were classified as Other non-current assets at December 31, 2011 and 2010, respectively, with the balances current, over the 12-year life of the supply agreement.

Supply agreements with one of our customers include provisions for supplemental revenue or refunds based on the customer's annual steel pricing for the year the product is consumed in the customer's blast furnace. The supplemental pricing is characterized as an embedded derivative. Refer to NOTE 3 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES for further information.