Cleveland-Cliffs Inc
2000 Annual Report
 
Company Profile
Core Values
Comparative Hightlights
Letter to Our Shareholders
Management's Discussion
2000 Versus 1999
1999 Versus 1998
Cash Flow
Capitalization
Iron Ore
Ferrous Metallics
Actuarial Assumptions
Environmental Costs
Market Risk
Forward Looking
Financial Information
Notes to Consolidated Financial Statements
Report of Ernst & Young
Quarterly Results of Operations
Cliffs Managed Mines
Eleven Year Summary
Investor & Corporate Information
Officers and Directors
Annual Report Home
 

 

MANAGEMENT'S  DISCUSSION

Cash Flow & Liquidity
At December 31, 2000, the Company had cash and cash equivalents of $29.9 million. In addition, the full amount of a $100 million unsecured revolving credit facility was available.

Following is a summary of 2000 cash flow activity:

(In Millions)
Cash flow from operations:  
    Before changes in operating assets and liabilities $76.9
    Changes in operating assets and liabilities (48.9)
      Net cash from operations 28.0
Capital expenditures (23.4)
Investment and advances in Cliffs and Associates Limited (13.8)
Purchase of CAL interest from LTV (1.7)
Dividends (15.7)
Repurchases of common shares (15.6)
Contributions to CAL of minority shareholder 4.2
Other .3
    Decrease in cash and cash equivalents $(37.7)

The $48.9 million increase in operating assets and liabilities primarily reflected higher iron ore inventories, $54.2 million.

Following is a summary of key liquidity measures:

  At December 31 (In Millions)
  2000 1999 1998
Cash and cash equivalents $29.9 $67.6 $130.3
Working capital $145.8 $143.4 $176.1
Ratio of current assets to current liabilities 2.4:1 3.0:1 3.1:1

In 2001, the Company expects to receive refunds of approximately $14 million of current and prior years’ federal tax payments associated with the Company’s adjustment of its CAL tax basis of properties. Separately, an additional tax and interest payment of approximately $5 million related to the anticipated settlement of audit issues for tax years 1995 and 1996 is expected in 2001. A $5.2 million non-cash favorable adjustment of the Company’s tax obligations related to the audit was recorded in 2000 results.

From time to time, in the normal course of business, the Company enters into contracts to purchase iron ore to meet customer quality specifications or fulfill anticipated or forecasted shortfalls. The Company has committed to purchase approximately $19 million of pellets in 2001.

The Company anticipates that its share of capital expenditures related to the iron ore business, which were $23.4 million in 2000, will be significantly reduced in 2001. The estimate for 2001 capital expenditures is highly uncertain, and will depend on production levels at the Company-managed mines and the financial position of the mine owners. The Company expects to fund its share of capital expenditures from current operations.

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