Cliffs Natural Resources Inc has announced an update on its 2011 expected results by business segment, along with its business segment outlook for 2012. Cliffs will report its complete fourth quarter and full year results on February 15th 2012 and hold a conference call with the investment community at 10 AM on February 16th 2012.

Cliffs expects to report full year 2011 revenue per tonne in its US Iron Ore business segment at the low end of its previous 2011 revenue per ton outlook of USD 135 to USD 140, with a rate of approximately USD 120 per tonne in the fourth quarter. The fourth quarter rate was driven by sales mix and retroactive pricing adjustments recorded for specific contracts during the quarter. The Company expects to report full year sales volume and cash cost per ton in line with its previous outlook of 24 million tonnes and USD 63 per tonne, respectively.

Eastern Canadian Iron Ore
Cliffs expects to report full year 2011 sales volume of 7.4 million tonnes in its Eastern Canadian Iron Ore segment, down from its previous outlook of 8 million tonnes. The lower than anticipated sales volume was driven by lower pellet sales volume resulting from operational challenges at Wabush Mine. During the fourth quarter, Wabush experienced a number of crusher, dryer and other equipment outages, resulting in lack of pellet availability.

In addition, Cliffs expects to report 2011 revenue per ton in Eastern Canadian Iron Ore slightly below its previous outlook of USD 160 to USD 165. Full year cash cost per ton in the segment are expected to be at the high end of Cliffs' previous outlook of USD 90 to USD 95. Higher cash costs per tonne were primarily driven by the challenges at Wabush, which included a USD 4 per tonne impact from lower fixed cost leverage and unplanned fourth quarter repair spending.

Asia Pacific Iron Ore
Cliffs expects to report full year 2011 sales volumes of 8.6 million tonnes in its Asia Pacific Iron Ore segment, down from its previous outlook of 8.8 million tonnes. The lower than anticipated sales volumes were due to timing of two shipments, one from Koolyanobbing and one from Cockatoo Island.

Revenue per tonne in Asia Pacific Iron Ore is expected to be in line with Cliffs' previous outlook of USD 155 to USD 160. Primarily as a result of higher mining costs, Cliffs expects to report cash cost per tonne in Asia Pacific Iron Ore of approximately USD 66, slightly higher than its previous outlook of USD 60 to USD 65 per tonne.

North American Coal
Cliffs' Pinnacle Mine generated strong results in the fourth quarter, with production of over 600,000 tonnes of low volatile metallurgical coal expected to be reported. In addition, Oak Grove Mine achieved year end inventory of approximately 1.9 million tonnes of raw coal (or 740,000 tonnes of clean coal equivalent) in the fourth quarter. As a result, Cliffs anticipates reporting full year 2011 production in its North American Coal segment of over 5 million tonnes and sales volume of approximately 4.2 million tonnes, slightly higher than its previous outlook. Full year 2011 revenue per tonne in North American Coal is expected to be at the high end of Cliffs' previous outlook of USD 115 to USD 120, with cash costs per ton expected to be approximately USD 112 per tonne.

Other 2011 Expectations
Cliffs anticipates reporting 2011 cash flow from operations of approximately USD 2.3 billion and capital spending of USD 880 million for the year. The company noted it anticipates recording a USD 28 million pre tax, goodwill impairment charge in the fourth quarter related to its coal operations that were acquired from INR Energy in 2010. Cliffs also noted that its fourth quarter effective income tax rate is expected to be approximately 36%. For the full year, the effective tax rate is expected to be approximately 19%, slightly above Cliffs' previous outlook of 18%.

Cliffs' 2012 Outlook
In 2012, Cliffs anticipates selling approximately half of its over 45 million tons of expected global iron ore sales volume to seaborne customers in Asia, with remaining volumes sold to North American customers. The Company expects modest 2012 growth in the U.S. economy, supporting healthy demand for Cliffs' U.S. Iron Ore business. Conversely, the Company expects meaningful growth in emerging economies, specifically China, where crude steel production and iron ore imports are anticipated to reach record annual levels.

2012 Outlook Summary

In USD
Sales volume in million tonnes