RELATED PARTIES |
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| Related Party Transactions [Abstract] | Ìý | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTIES |
NOTE 16 - RELATED PARTIES
Two of our four operating U.S. iron ore mines and our indefinitely-idled Empire mine are co-owned joint ventures with companies 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. One of the joint venture partners is also our customer. The following is a summary of the mine ownership of these iron ore mines at JuneÌý30, 2017:
As part of a 2014 extension agreement between us and ArcelorMittal, which amended certain terms of the Empire partnership agreement, certain distributions of the partners' equity amounts were required to be made on a quarterly basis beginning in the first quarter of 2015. These equity distributions were made through the termination of the partnership agreement on December 31, 2016. We paid $8.7 million in January 2017 related to 2016 distributions. During the three and six months ended JuneÌý30, 2016, we recorded distributions of $24.4 million and $41.4 million, respectively, under this agreement of which $17.0 million was paid as of JuneÌý30, 2016. In addition, we paid $11.1 million in January 2016 related to 2015 distributions. ArcelorMittal's equity balance in the Empire partnership as of December 31, 2016 was approximately $132.7 million.
During the second quarter of 2017, the partners reached an agreement in principle regarding the final distribution of partnership equity. We expect the partnership equity distribution to be made per the partnership agreement in three equal installments over a period of 24 months, commencing upon the finalization of the agreement. This agreement is expected to be finalized during the third quarter of 2017.
Product revenues from related parties were as follows:
The following table presents the classification of related party assets and liabilities in the Statements of Unaudited Condensed Consolidated Financial Position as of JuneÌý30, 2017 and DecemberÌý31, 2016:
Certain supply agreements with one U.S. Iron Ore customer provide for supplemental revenue or refunds to the customer based on the customer’s average annual steel pricing or based on the average annual daily market price for hot-rolled coil steel at the time the product is consumed in the customer’s blast furnace. The supplemental pricing is characterized as a freestanding derivative. Refer to NOTE 13 - DERIVATIVE INSTRUMENTS for further information.
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