clf 02142014 q4_2013

Q4 2013 Earnings

February 14, 2014

2

FORWARD-LOOKING STATEMENTS

This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. As a general matter, forward looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to uncertainties and factors relating to Cliffs’ operations and business environment that are difficult to predict and may be beyond our control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These statements speak only as of the date of this presentation, and we undertake no ongoing obligation, other than that imposed by law, to update these statements. Uncertainties and risk factors that could affect Cliffs’ future performance and cause results to differ from the forward-looking statements in this presentation include, but are not limited to: trends affecting our financial condition, results of operations or future prospects, particularly the continued volatility of iron ore and coal prices; uncertainty or weaknesses in global economic conditions, including downward pressure on prices, reduced market demand, increases in supply and any slowing of the economic growth rate in China; our ability to successfully identify and consummate any strategic investments or capital projects and complete planned divestitures; our ability to successfully integrate acquired companies into our operations and achieve post-acquisition synergies, including without limitation, Cliffs Quebec Iron Mining Limited (formerly Consolidated Thompson Iron Mining Limited); our ability to cost effectively achieve planned production rates or levels; changes in sales volume or mix; the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration; the impact of price-adjustment factors on our sales contracts; the ability of our customers and joint venture partners to meet their obligations to us on a timely basis or at all; our ability to reach agreement with our iron ore customers regarding modifications to sales contract pricing escalation provisions to reflect a shorter-term or spot-based pricing mechanism; our actual economic iron ore and coal reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve; the impact of our customers using other methods to produce steel or reducing their steel production; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets, as well as any resulting impairment charges; the results of prefeasibility and feasibility studies in relation to development projects; impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory changes; uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy, equipment failures and other unexpected events; adverse changes in currency values, currency exchange rates, interest rates and tax laws; availability of capital and our ability to maintain adequate liquidity and successfully implement our financing plans; our ability to maintain appropriate relations with unions and employees and enter into or renew collective bargaining agreements on satisfactory terms; risks related to international operations; the potential existence of significant deficiencies or material weakness in our internal controls over financial reporting; and problems or uncertainties with leasehold interests, productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry. The information contained herein speaks as of the date of this presentation and may be superseded by subsequent events. Except as may be required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in this presentation.

Important Additional Information

Cliffs, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from Cliffs shareholders in connection with the matters to be considered at Cliffs' 2014 Annual Meeting. Cliffs intends to file a proxy statement with the U.S. Securities and Exchange Commission (the "SEC") in connection with any such solicitation of proxies from Cliffs shareholders. CLIFFS SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of Cliffs' directors and executive officers in Cliffs shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with Cliffs' 2014 Annual Meeting. Information can also be found in Cliffs' Annual Report on Form 10-K for the year ended Dec. 31, 2012, filed with the SEC on Feb. 12, 2013. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by Cliffs with the SEC for no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at Cliffs' website at www.cliffsnr.com or by contacting Carolyn Cheverine, Vice President, General Counsel & Secretary at (216) 694-7605. Shareholders may also contact D.F. King & Co., Inc., Cliffs’ proxy solicitor, toll-free at (800) 487-4870 or by email at [email protected].

3

CLIFFS’ EXECUTIVE MANAGEMENT

Gary Halverson

Terry Paradie

President & Chief Executive Officer

Executive Vice President & Chief Financial Officer

Kelly Tompkins

Executive Vice President, External Affairs & President - Global Commercial

4

February January December November

FIRST 90 DAYS AS PRESIDENT & CHIEF EXECUTIVE OFFICER

Joins Cliffs as President &

Chief Operating Officer

Announces plan to halt development of the Chromite Project

indefinitely

Performs global asset review and interacts with key

customers

Reduces long-term debt by $380 million, net debt improves to

$2.7 billion

Conducts organizational review

and management restructuring

Announces plans to idle the Wabush Mine and

significantly reduce 2014 capital expenditures

WITH STRONG BOARD ENGAGEMENT, NEW EXECUTIVE LEADERSHIP HAS MOVED QUICKLY TO RESET STRATEGIC DIRECTION AND IMPOSE FINANCIAL

AND OPERATING DISCIPLINE

Announces $90 million

reduction in expected

2014 SG&A and

exploration spending

Cliffs’ Board

appoints Gary

Halverson to

President & CEO

5

TWO FUNDAMENTAL CHANGES FOR 2014

$375 - $425

$862

$1,128

$881

2014E 2013 2012 2011

CAPITAL EXPENDITURES1

($ IN MILLIONS)

$200

$291

$425

$328

2014E 2013 2012 2011

SG&A Exploration

SG&A and EXPLORATION1

($ IN MILLIONS)

Capital Discipline Organizational Structure

• Focus on free cash flow generation

• Improve performance of currently owned assets

• Lower net debt position

• “Right-size” and delayer top levels of management

• Create direct reporting line to CEO from operations

• Streamline the business’ support functions by eliminating duplication

54% 31%

1Source: Company filings

6

MACRO CONSIDERATIONS

U.S. IRON ORE EXPECTED FULL-YEAR 2014 SALES VOLUME OF 22 - 23 MILLION TONS

• In the US, Cliffs expects healthy increases in motor vehicle production and

construction activities to support demand for steelmaking raw materials.

• Credit reforms in China are expected to support stable growth for the long term.

• Increased pressure on emissions in China and an uptick in European steel production

is expected to heighten demand for premium / value-in-use iron ore products.

FE CONTENT PREMIUMS/DISCOUNTS SINCE JULY 1, 20132

1Source: Company filings 2 Platts IODEX Iron ore fines ($/dmt) C.F.R China

-50%

0%

50%

100%

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14

65% Fe 58% Fe

Standard 29%

APIO Lump

5 - 5.5mt

ECIO Concentrate

6 - 7mt

US Export Pellets

1mt

Premium 71%

2014 SEABORNE IRON ORE SALES GUIDANCE1

7

U.S. IRON ORE

• Sales volume for the quarter was 6.2 million tons, relatively flat versus the prior year.

• Exported a record 2.4 million tons from the lower Great Lakes into the seaborne market during the year.

U.S. IRON ORE EXPECTED FULL-YEAR 2014 SALES VOLUME OF 22 - 23 MILLION TONS

21.6 21.3

22 - 23

15

17

19

21

23

25

2014 2013 2012

Domestic

2014E 2013

2012

U.S. IRON ORE SALES VOLUME1

(IN MILLIONS OF TONS)


8

EASTERN CANADIAN IRON ORE EXPECTED FULL-YEAR 2014 SALES VOLUME OF 6 – 7 MILLION TONS

EASTERN CANADIAN IRON ORE

• Reduced Bloom Lake Mine’s 2014 capital budget to include only sustaining and license-to-operate requirements.

• Examining alternatives for Bloom Lake Mine, which could include a range of outcomes, from strategic partner to sale.

• Bloom Lake’s production volume has averaged over 500,000 tons per month over last four months.

• Loaded and shipped first Chinamax vessel from Port of Sept-Iles to China during the quarter.

9

ASIA PACIFIC IRON ORE

• Reported fourth-quarter sales volume of 3.0 million tons versus 2.8 million tons sold in the fourth quarter of 2012.

• Expect improved costs in 2014 from favorable foreign exchange rates and implementation of operating efficiencies.

• 2014 sales volume is comprised of approximately 50% lump and 50% fines.

ASIA PACIFIC IRON ORE EXPECTED FULL-YEAR 2014 SALES VOLUME OF 10 – 11 MILLION TONS

10

NORTH AMERICAN COAL

• Sales volume of 1.8 million tons versus 1.9 million in the prior-year quarter.

• Achieved record sales and production volumes in 2013.

• Brought back a second shift of workers at our Toney Fork thermal coal mine in West Virginia due to improved thermal demand.

NORTH AMERICAN COAL EXPECTED FULL-YEAR 2014 SALES VOLUME OF 7 – 8 MILLION TONS

11

1,516 1,547 1,489

1,141

1,536

1,221 1,198 1,220

903

1,297

Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012

Revenue COGS

HIGHLIGHTS & CONSOLIDATED RESULTS

HISTORICAL CONSOLIDATED FINANCIAL HIGHLIGHTS1

($ IN MILLIONS)


*See Non-GAAP reconciliation in appendix

FY 2013 Adjusted

EBITDA*

$1.5B

FY 2013

Cash from

Operations

$1.1B

FY 2013

SG&A and

Exploration Expenses

32%

FY 2014

Capital Spending Budget

54%

$71

$49 $48

$80

$13 $11

$13

$23

$48

Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012

SG&A Exploration

$64

SG&A and EXPLORATION EXPENSES1

($ IN MILLIONS)

TTM

Debt to EBITDA

<2.0x

12

REVENUE-PER-TON OUTLOOK

• The realized revenue per ton and sensitivities above are based on the average year-to-date 62% Fe seaborne iron ore fines price (C.F.R. China) of $128 per ton as of Jan. 31, 2014.

• Does not reflect Cliffs’ internal seaborne iron ore price assumption for the year.

• The sensitivities consider various contract provisions and lag-year adjustments contained in certain supply agreements. Actual realized revenue per ton for the full year will depend on iron ore price changes, customer mix, freight rates, production input costs and/or steel prices (all factors contained in certain of Cliffs' supply agreements).

REALIZED REVENUE PER TON & SENSITIVITIES

(FULL-YEAR 2014)

U.S. IRON

ORE

EASTERN

CANADIAN

IRON ORE

ASIA

PACIFIC

IRON ORE

REVENUES

PER TON

$105 - $110 $95 - $100 $100 - $105

SENSITIVITY

PER TON

(+/-$10)

+/-$2 +/-$9 +/-$9

$128

$135 $133

$126

$148

$122

Jan 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012

IRON ORE BENCHMARK PRICE1

(62% FE FINES PER DMT C.F.R. CHINA)

1Platts IODEX Iron ore fines 62% Fe ($/dmt) C.F.R China

13

U.S. IRON ORE FINANCIAL HIGHLIGHTS

• Revenues per ton increased due to higher pricing for one customer due to the reset of their contract base rate. This increase was partially offset by customer mix, increased sales to seaborne customers and an unfavorable true-up on hot-rolled steel pricing.

• Cash cost per ton increased due to lower production volumes and the resulting unfavorable impact on the mines’ cost-per-ton rate.

Sales Margin - Per Long Ton Q4 2013 Q4 2012

Revenues from product sales and services* $112.70 $112.06

Cash cost** 65.51 64.55

Depreciation, depletion and amortization 6.13 4.64

Cost of good sold and operating expenses 71.64 69.19

Sales Margin $41.06 $42.87

**Cash cost per ton is defined as cost of goods sold and operating expenses per ton less depreciation, depletion and amortization per ton.

*Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues also exclude venture partner cost reimbursements.

14

EASTERN CANADIAN IRON ORE FINANCIAL HIGHLIGHTS

• Revenues per ton increased due to higher seaborne iron ore pricing and quality premiums, partially offset by product mix and higher freight rates.

• Cash cost per ton decreased due to the absence of pelletizing costs from the Pointe Noire pellet plant. This decrease was partially offset by higher mining costs driven by increased year-over-year strip ratios and additional overburden removal activities at Bloom Lake. Fourth-quarter 2013 cash costs included the supplies inventory write-down of $28 million at Wabush Mine.

Sales Margin - Per Metric Ton Q4 2013 Q4 2012

Revenues from product sales and services $108.73 $100.70

Cash cost* 110.03 116.56



Sales Margin $(23.57) $ (34.16)

*Cash cost per ton is defined as cost of goods sold and operating expenses per ton less depreciation, depletion and amortization per ton.

15

ASIA PACIFIC IRON ORE FINANCIAL HIGHLIGHTS

• Revenues per ton increase was due to higher market pricing and lump premiums, partially offset by a foreign exchange hedging loss.

• Cash cost per ton decreased due to favorable foreign exchange rate variances.

Sales Margin - Per Metric Ton Q4 2013 Q4 2012

Revenues from product sales and services $109.07 $99.96

Cash cost* 58.90 65.86



Sales Margin $37.54 $ 19.35

*Cash cost per ton is defined as cost of goods sold and operating expenses per ton less depreciation, depletion and amortization per ton.

16

NORTH AMERICAN COAL FINANCIAL HIGHLIGHTS

• Revenues per ton decrease was primarily driven by lower year-over-year market pricing for metallurgical coal products and customer mix.

• Cash cost per ton decreased due to a lower year-over-year cost rate, driven by improved operating efficiencies.

Sales Margin - Per Short Ton Q4 2013 Q4 2012

Revenues from product sales and services* $89.70 $110.14

Cash cost** 85.14 98.07



Sales Margin $(11.87) $ (2.93)

*Excludes revenues and expenses related to domestic freight, which are offsetting and have no impact on sales margin. Revenues also exclude venture partner cost reimbursements.

**Cash cost per ton is defined as cost of goods sold and operating expenses per ton less depreciation, depletion and amortization per ton.

17

LIQUIDITY AND CAPITAL STRUCTURE

TOTAL DEBT AND CREDIT FACILITY1

(OUTSTANDING, IN BILLIONS)

$3.0

$3.3 $3.3

$3.4

$4.1

Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012

• Generated $460 million in cash from operations in the fourth quarter of 2013.

• Held $336 million in cash and cash equivalents at December 31, 2013.

• Reduced capital expenditures

by 64% to $119 million in the fourth quarter of 2013.

• Exited the year with a Debt-to-EBITDA leverage ratio of less than 2.0x


Paid down $380 million in borrowings from the revolving credit facility during the quarter and collected $103 million in cash proceeds from equipment loan financing arrangements.

Q&A

News releases and other information on the Company are available on the Internet at:

http://www.cliffsnaturalresources.com

Follow @CliffsNR on Twitter

Appendix

20 20

2014 OUTLOOK

20

U.S. Iron Ore

• Sales volume of 22 - 23 million long tons

• Cash cost per ton of $65 - $70

• Depreciation, depletion & amortization of $7 per ton

Eastern Canadian Iron Ore

• Sales volume of 6 - 7 million metric tons



Asia Pacific Iron Ore

• Sales volume of 10 - 11 million metric tons



North American Coal

• Sales volume of 7 – 8 million short tons

• Revenue per ton of $85 - $90



Segment Expectations

SG&A and other expenses

• Full-year SG&A of $185 million

• Other outflows of $15 million

• Depreciation, depletion & amortization of $600 million

Cash flows and capex

• Full-year capex of $375 - $425 million

2014 Revenue Price Sensitivity

• Based on Jan. YTD iron ore pricing of $128/ton,

the following is the sensitivity to a $10 change in

the benchmark price across our iron ore business

segments1:

− USIO: $105-$110 (+/- $2) per ton2

− ECIO: $95-$100 (+/- $9) per ton3

− APIO: $100-$105 (+/- $9) per ton4

Other Guidance

1 The year-to-date iron ore price is the average 62% Fe seaborne iron ore fines price (CFR China) as of January 31, 2014. Cliffs expects to update

the year-to-date average iron ore price and the related sensitivities for its respective iron ore business segments in future reporting periods. 2 U.S. Iron Ore tons are reported in long tons. 3 Eastern Canadian lron Ore tons are reported in metric tons, F.O.B. Eastern Canada. 4 Asia Pacific

Iron Ore tons are reported in metric tons, F.O.B. the port.

21 21

NON-GAAP RECONCILIATION – ADJUSTED EARNINGS

21

In addition to the consolidated financial statements presented in accordance with U.S. GAAP, the Company has presented Adjusted Net Income attributable to Cliffs’ shareholders,

which is a non-GAAP financial measure that management uses in evaluating operating performance. The presentation of this measure is not intended to be considered in isolation

from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with U.S. GAAP. The presentation of this measure may be different from

non-GAAP financial measures used by other companies. A reconciliation of this measure to its most directly comparable GAAP measure is provided in the table below.

*Wabush-related costs include write-downs of $28 million and $30 million in the fourth-quarter and full-year 2013, respectively. This was

attributed to a supplies inventory write down which is reported in Cost of Goods Sold on the Statement of Operations.

**Quarterly weighted-average diluted shares outstanding include shares that were considered antidilutive for calculating earnings per share.

(In Millions, Except Per Share Amounts)

Three Months Ended

December 31, Year Ended

December 31,

2013 2012 2013 2012

NET INCOME (LOSS) FROM CONTINUING OPERATIONS $ (14.2 ) $ (1,901.4 ) $ 359.8 $ (1,162.5 )

Less non-cash items:

Goodwill impairment charges (80.9 ) (1,000.0 ) (80.9 ) (1,000.0 )

Wabush-related costs* (182.6 ) (49.9 ) (184.3 ) (49.9 )

Other impairment charges (15.3 ) — (15.3 ) —

Amapa impairment charge — (365.4 ) (67.6 ) (365.4 )

MRRT valuation allowance 4.3 (314.7 ) 13.6 —

AMT valuation allowance — (226.4 ) (24.4 ) (226.4 )

Tax impact 54.7 — 55.2 —

NET INCOME ATTRIBUTABLE TO CONTINUING OPERATIONS, net of tax - ADJUSTED 205.6 55.0 663.5 479.2

INCOME and GAIN ON SALE FROM DISCONTINUED OPERATIONS, net of tax — 30.8 2.0 35.9

NET INCOME - ADJUSTED 205.6 85.8 665.5 515.1

LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST 57.5 252.4 51.7 227.2

Less special charges:

Noncontrolling interest adjustment (45.1 ) (249.3 ) (45.1 ) (249.3 )

NET INCOME ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - ADJUSTED $ 218.0 $ 88.9 $ 672.1 $ 493.0

PREFERRED STOCK DIVIDENDS (12.8 ) — (48.7 ) — NET INCOME ATTRIBUTABLE TO CLIFFS COMMON SHAREHOLDERS - ADJUSTED $ 205.2 $ 88.9 $ 623.4 $ 493.0

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - ADJUSTED BASIC

Continuing operations $ 1.34 $ 0.41 $ 4.10 $ 3.21

Discontinued operations — 0.22 0.01 0.25

$ 1.34 $ 0.63 $ 4.11 $ 3.46

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CLIFFS SHAREHOLDERS - ADJUSTED DILUTED

Continuing operations $ 1.22 $ 0.41 $ 3.84 $ 3.21

Discontinued operations — 0.22 0.01 0.25

$ 1.22 $ 0.63 $ 3.85 $ 3.46

Weighted average number of shares:

Basic 153.0 142.4 151.7 142.4

Employee stock plans 0.7 — 0.5 —

Depositary Shares 25.2 — 22.1 —

Diluted** 178.9 142.4 174.3 142.4

22 22

NON-GAAP RECONCILIATION – EBITDA AND ADJUSTED EBITDA

22

In addition to the consolidated financial statements presented in accordance with U.S. GAAP, the Company has presented EBITDA and adjusted EBITDA, which are non-GAAP

financial measures that management uses in evaluating operating performance. The presentation of these measures is not intended to be considered in isolation from, as a

substitute for, or as superior to, the financial information prepared and presented in accordance with U.S. GAAP. The presentation of these measures may be different from non-

GAAP financial measures used by other companies. A reconciliation of these measures to its most directly comparable GAAP measure is provided in the table below.

*Wabush-related costs include write-downs of $28 million and $30 million in the fourth-quarter and full-year 2013, respectively. This was attributed to a supplies

inventory write down which is reported in Cost of Goods Sold on the Statement of Operations.

(In Millions) (In Millions)

Three Months Ended

December 31, Year Ended

December 31,

2013 2012 2013 2012

Net Income (Loss) (14.2 ) (1,870.6 ) 361.8 (1,126.6 )

Less:

Interest expense, net (44.6 ) (59.8 ) (179.1 ) (195.6 )

Income tax (expense) benefit 13.9 (491.1 ) (55.1 ) (255.9 )

Depreciation, depletion and amortization (155.3 ) (144.0 ) — (593.0 ) — (526.0 )

EBITDA $ 171.8 $ (1,175.7 ) — $ 1,189.0 — $ (149.1 )

Less non-cash items:

Goodwill impairment charges (80.9 ) (1,000.0 ) (80.9 ) (1,000.0 )

Noncontrolling interest adjustment 45.0 249.0 45.0 249.0

Wabush-related costs* (182.6 ) (49.9 ) (184.3 ) (49.9 )

Other impairment charges (15.3 ) — (15.3 ) —

Amapa impairment charge — (365.4 ) (67.6 ) (365.4 )

Adjusted EBITDA $ 405.6 $ (9.4 ) $ 1,492.1 $ 1,017.2

clf 02142014 q4_2013

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