Cleveland-Cliffs — Third Quarter 2026 Earnings Summary

Financial Performance

• Consolidated revenues were $5.6 billion, an increase from $5.2 billion in the second quarter of 2026.
• GAAP net income was $165 million ($0.26 per diluted share), compared to a GAAP net loss of $134 million ($0.25 per diluted share) in the second quarter of 2026.
• Adjusted net income was $0.28 per diluted share, compared to an adjusted net loss of $0.20 per diluted share in the second quarter of 2026.
• Adjusted EBITDA was $612 million, a $326 million improvement from $286 million in the second quarter of 2026.
• Steelmaking segment revenues were $5.4 billion, compared to $4.6 billion in the third quarter of 2025.
• Steelmaking segment cash margin was $685 million, compared to $205 million in the third quarter of 2025.
• Steelmaking segment gross margin was $454 million, compared to a loss of $56 million in the third quarter of 2025.
• Total liquidity was $3.2 billion as of September 30, 2026.
• Long-term debt was $7.6 billion as of September 30, 2026, compared to $7.3 billion as of December 31, 2025.
• Net cash provided by operating activities was $224 million for the three months ended September 30, 2026, compared to net cash used of $143 million in the same period in 2025.

Guidance and Future Outlook

• Fourth-quarter 2026 adjusted EBITDA is expected to be approximately $715 million, an increase from the third quarter, driven by increased pricing but partially offset by seasonality, maintenance outages, input costs, and incentive compensation accruals.
• Based on 2027 contract changes and prevailing price forecasts, the Company expects 2027 adjusted EBITDA to exceed $4 billion.
• Management expects to reach a leverage target of under 2.5x net debt to EBITDA by the middle of 2027.
• The Company anticipates a major debt reduction in the fourth quarter 2026 due to amplified free cash flow and property sale proceeds.

Business Segments and Product Lines

• Steel shipments totaled 4.2 million net tons in the third quarter of 2026.
• Steelmaking segment sales volumes were 4.2 million net tons, consisting of 46% hot-rolled, 31% coated, 15% cold-rolled, 4% plate, and 4% stainless and electrical products.
• Average net selling price per net ton of steel products was $1,177 in the third quarter of 2026, compared to $1,032 in the third quarter of 2025.
• Steelmaking revenues included $1.8 billion (34%) to distributors and converters, $1.5 billion (28%) to the automotive market, $1.5 billion (28%) to infrastructure and manufacturing, and $532 million (10%) to steel producers.
• Stelco, the Canadian subsidiary, turned into a positive contributor to EBITDA in the third quarter, marking its strongest quarter since acquisition.
• The Company indefinitely idled galvanizing lines at Stelco due to an oversupplied market for galvanized steel in Canada, while maintaining total production tonnage at Stelco and preserving approximately 2,000 Canadian jobs.

Market and Competitive Landscape

• The trade environment supports a healthy American steel industry with imports remaining well below historical levels and extended lead times.
• Customers increasingly recognize the value of a reliable domestic supply chain.
• The Canadian hot-rolled market has improved substantially, while the galvanized steel market in Canada remains clearly oversupplied.

Risks and Challenges

• The Canadian government has not taken action to correct the oversupplied market for galvanized steel in Canada, necessitating the idling of galvanizing lines.
• Forward-looking statements are subject to uncertainties including volatility in steel, scrap metal, and iron ore market prices.
• Risks include potential weaknesses in global economic conditions, excess global steelmaking capacity, and the prevalence of steel imports.
• Risks related to government actions, tariffs, trade agreements, and environmental regulations are noted.
• Potential impacts to liquidity, indebtedness levels, and the ability to reduce indebtedness or return capital to shareholders are identified as risks.

Management Commentary and Tone

• Chairman and CEO Lourenco Goncalves described the third quarter as the company's strongest in three years, with adjusted EBITDA exceeding the $575 million guidance provided three months prior.
• Management noted that average selling price, sales volumes, and unit costs all moved in the right direction relative to Q2 performance.
• Goncalves stated that the 2027 outlook has improved materially since the last earnings call due to initiatives developing more favorably than expected.
• Management characterized the decision to idle Stelco's galvanizing lines as "difficult but necessary" to focus on products with a market.

Other Key Points

• The Company continues to reduce debt in the third quarter.
• The Company expects amplified free cash flow in the fourth quarter 2026.
• The conference call for these results was held on October 19, 2026.
• The Company employs approximately 25,000 people across operations in the United States and Canada.