The Rising Influence of Rising Affluence

[DewDiligence]

Arithmetic of CLF’s financing transactions—the bottom line is an expansion of the fully-diluted share count by 19-21%:

• The May 2016 conversion price of CLF’s new preferred shares has a range of $29.00 to $35.53. Since 575K* preferred shares will be issued at $1,000 each, the aggregate amount of preferred stock will convert into 16.19M to 19.83M common shares, depending on the conversion price.

• The immediate common-stock offering will add 10.35M* shares

Thus, the total new common shares on a fully-diluted basis is between 26.5M and 30.4M, depending on the 2016 conversion price of the preferred stock.

Inasmuch as CLF had 143M basic shares outstanding prior to the new offerings (http://www.sec.gov/Archives/edgar/data/764065/000114420413007849/v334532_424b5.htm#tCODS ), the new offerings will expand CLF’s share count by 19-21%, depending on the conversion price of the preferred stock in 2016. (This calculation ignores stock-option exercises; they do not change the 19-21% range materially because counting option exercises would cause both the base share-count figure and the 2016 post-conversion share-count to increase.)

*Assuming the underwriter exercises the 15% overallotment option.