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Cliffs Natural Resources Inc. Announces Capital Allocation Strategy Focused on Driving Total Shareholder Return

Tuesday, March 13, 2012 4:15 PM


Board of Directors Approves More Than Doubling Quarterly Cash Dividend to $0.625, Representing a $2.50 Annual Dividend and Annualized $350 Million Payout Plan Marks Strategic Shift to Focus on Organic Growth Pipeline

CLEVELAND, March 13, 2012 /PRNewswire/ -- Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) today announced a new strategic capital allocation plan intended to drive Total Shareholder Return (TSR). As part of the plan, the Company's Board of Directors approved a 123% increase in the quarterly dividend to $0.625, from the previous quarterly rate of $0.28. The next quarterly dividend at the new rate will be payable on June 1, 2012, to shareholders of record on the close of business on April 29, 2012. The substantial dividend increase reinforces Cliffs' strong outlook for cash generation and commitment to using disciplined capital allocation to drive TSR.

(Logo:  http://photos.prnewswire.com/prnh/20101104/CLIFFSLOGO )

Joseph Carrabba, Cliffs' chairman, president and chief executive officer, said, "Cliffs has experienced tremendous growth through M&A in recent years and, with that, has also acquired a diverse and strong pipeline of attractive organic growth projects. As a result, we are refocusing our strategic priority to execution. Cliffs has matured to a point where our strong financial profile and cash flow generation will allow us to increasingly return large amounts of capital to our shareholders, while at the same time, fund capacity expansions already underway in Eastern Canada and other geographies."

Strategic Capital Allocation Process

While the dividend increase is the first and most immediately visible use of free cash flow, Cliffs' Board of Directors has committed to a new strategic capital allocation process that includes prioritizing all potential uses of future operating cash flow. Cliffs' strategic capital allocation process is comprised of two primary goals:

  • Deploy capital with the objective of driving top-quartile TSR, including a focus on organic growth, dividend distributions and debt reduction; and
  • Provide financial flexibility throughout the business cycle and changes in commodity pricing.

Laurie Brlas, Cliffs' executive vice president, finance and administration & chief financial officer, said, "This TSR-focused strategy is anticipated to create tangible shareholder value by returning cash to investors, providing a recognized discipline for allocating capital and, at the same time, allowing Cliffs to maintain an exciting pipeline of organic growth. We believe that a philosophical commitment to this payout level and to growing the dividend is manageable through the cycle and sustainable at varying levels of prices for the commodities we sell.


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