Cleveland-Cliffs Inc. 2025 Annual Report (10-K) Summary
Business Context and Reporting Period
Company: Cleveland-Cliffs Inc. (CLF)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: A leading North American vertically integrated steel producer, focusing on value-added sheet products for the automotive industry. Operations span iron ore mining, pellet production, direct reduced iron (HBI), ferrous scrap processing, primary steelmaking, and downstream finishing.
Key Developments: Completed the Stelco Acquisition (Nov 2024); signed a Memorandum of Understanding with POSCO for a potential strategic partnership; permanently closed underperforming facilities (Steelton, Conshohocken, Riverdale); and idled portions of the Hibbing and Minorca mines to manage inventory.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenues | $18.61 billion | $19.19 billion |
| Net Loss (Attributable to Cliffs) | $(1.48) billion | $(0.76) billion |
| Adjusted EBITDA | $37 million | $773 million |
| Operating Cash Flow | $(462) million | $105 million |
| Capital Expenditures | $561 million | $695 million |
| Total Debt (Long-term + ABL) | $7.33 billion | $7.15 billion |
| Liquidity (Cash + ABL Availability) | $3.3 billion | N/A |
| Steel Shipments | 16.23 million net tons | 15.60 million net tons |
Material Changes vs. Prior Period
- Revenue Decline: Consolidated revenues decreased by 3% ($575 million) primarily due to lower realized revenue rates driven by product mix shifts and lower tons sold in the automotive and distributor markets, partially offset by incremental volume from the Stelco acquisition.
- Profitability Deterioration: Adjusted EBITDA collapsed from $773 million in 2024 to $37 million in 2025. The Steelmaking segment Adjusted EBITDA turned negative at $(16) million, down from $715 million, driven by lower gross margins, increased depreciation from idled facilities, and higher idled facility charges.
- Net Loss Expansion: Net loss attributable to shareholders more than doubled to $1.48 billion, reflecting the drop in operating income and increased interest expense ($594 million vs. $370 million) due to higher debt levels following the Stelco acquisition.
- Operational Rationalization: The company permanently closed three steelmaking facilities (Steelton, Conshohocken, Riverdale) and idled the Minorca mine and part of the Hibbing mine, resulting in approximately $300 million in employee-related costs, asset impairments, and exit costs.
Guidance, Outlook, and Risks
Management Commentary & Outlook:
- Strategic Partnerships: Management is pursuing a strategic partnership with POSCO to leverage Cliffs' U.S. footprint, expected to be accretive to shareholders. A sell-side process for non-core assets is also underway.
- Market Conditions: Outlook remains cautious due to subdued demand and inconsistent buying behavior, though management expects benefits from 50% steel tariffs and 25% auto part tariffs implemented in 2025. Domestic HRC prices averaged $851/ton in 2025, up 10% from 2024.
- Cost Discipline: The company continues to reduce unit costs and expects to maintain disciplined capital spending (~$700 million in 2026).
Key Risks & Contingencies:
- Regulatory & Environmental: Significant exposure to EPA regulations (NESHAPS, ozone, particulate matter) and Canadian environmental rules (SO2, selenium). Compliance costs are estimated at $71 million for 2026, with potential for material increases if rules are upheld.
- Trade Policy: Reliance on U.S. and Canadian tariffs to protect domestic pricing; removal of these tariffs could materially adversely affect results.
- Debt & Liquidity: High leverage limits flexibility. The company extended debt maturities to 2029 and beyond but faces significant interest expense. Liquidity is supported by $3.3 billion in cash and ABL availability.
- Legal: Ongoing litigation with Mesabi Metallics regarding antitrust and contract disputes, with trial set for May 2027.
Investor Verification Checklist
- Debt Maturity Profile: Verify the impact of the new 2031 and 2034 senior notes on future interest coverage ratios and cash flow requirements.
- Idled Facility Costs: Confirm the run-rate of fixed costs associated with the idled Minorca and Hibbing mines and the Dearborn blast furnace.
- POSCO Transaction Status: Monitor progress on the Memorandum of Understanding with POSCO; the deal is not definitive and carries execution risk.
- Environmental Liabilities: Review the $143 million asset retirement obligation for the Empire mine and the status of EPA reconsideration requests regarding NESHAPS rules.
- Automotive Demand: Assess the correlation between North American light vehicle production (15.3M units in 2025) and Cliffs' fixed-price contract renewals for 2026.