Good morning, ladies and gentlemen. My name is Sally, and I am your conference facilitator today. I would like to welcome everyone to Cliffs Natural Resources 2016 First Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. The company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking within the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995. Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause the results to differ materially are set forth in reports on Forms 10-K and 10-Q, and news releases filed with the SEC, which are available on the company website. Today's conference call is also available and being broadcast at cliffsnaturalresources.com. At the conclusion of the call, it will be archived on the website and available for replay. The company will also discuss results, excluding certain special items. Reconciliation for Regulation G purposes can be found in the earnings release, which was published this morning. At this time, I would like to introduce Kelly Tompkins, Executive Vice President and Chief Financial Officer. P. Kelly Tompkins - Chief Financial Officer & Executive Vice President: Thank you, Sally, and thanks to everyone joining us on this morning's call. I'm joined today by our Chairman and CEO, Lourenco Goncalves. I will lead off the call with a review of our first quarter results, outlook for the remainder of this year and provide some additional comments around our most recent debt exchange. Once again this quarter, the performance at our U.S.…

Thank you. . Thank you. Your first question comes from the line of Nick Jarmoszuk with Stifel. Your line is open. Nicholas Jarmoszuk - Stifel, Nicolaus & Co., Inc.: Hi, good morning. Thanks for taking my question. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Good morning, Nick. Nicholas Jarmoszuk - Stifel, Nicolaus & Co., Inc.: Good morning. So first one, let's talk about Arcelor; you guys are investing to make the superflux pellets. Is the direct implication that the contract is renewed and can you give color as to how long the duration is and any details on the economics? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Well, I will start with the details on the economics. The CapEx involved to retool, if you will, to do the modification at United Taconite to produce the Mustang pellets are around $65 million. We booked $25 million and that's what we would spend if we start deploying the capital later in this year. We still have the two contracts in place. We have plenty of time to complete our negotiation and we are not in a hurry. We continue to work together with the client to produce the perfect pellet as soon as we are ready to do so. Our commitment is to keep the client in good shape, and as soon we are done with the inventory of Viceroy, we should have Mustang to replace that. Nicholas Jarmoszuk - Stifel, Nicolaus & Co., Inc.: Okay. So nothing has been signed yet but everything is progressing in the right direction, is that the (29:56). C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: That's correct. That's a perfect assumption. Nicholas Jarmoszuk - Stifel, Nicolaus & Co., Inc.: Okay, then onto U.S. Steel, they've been talking…

And your next question comes from the line of Tony Rizzuto with Cowen and Company. Your line is open.

Lourenco, you made me giggle there a little bit. Good morning Lourenco and Kelly, it's great to see your initiatives, and (37:05) P. Kelly Tompkins - Chief Financial Officer & Executive Vice President: Thanks Tony. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Thanks, Tony. Good morning.

Yeah, it's good to see everything bearing fruit and the market cooperating a bit, with perhaps the majors exhibiting some discipline as you alluded to. I want to follow up on ArcelorMittal a little bit. It would seem that with the seaborne opportunities for their Canadian ops clearly on the rise and even sort of less attractive for them to supply their the U.S. mills, it would seem that that would seem to be working in your favor, and the comments you made about U.S. Steel and the more temporary nature, if they were to supply – look to supply, on a merchant basis, would that be a fair statement, I mean just beyond the U.S. Steel, just the further comments about ArcelorMittal? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yes, absolutely. Sure.

All right. And your volumes, and just a follow-up there, I want to make sure I understand this, because it seemed to me that the volumes for USIO would appear to be somewhat conservative. You're restarting Northshore and then you just talked about UTAC later in the year, does the UTAC restart, does that require an assumption of restarting of idled mills in the U.S. at all? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yeah, it's more than that. The restart of United Taconite is a necessity in order to continue to supply our biggest client ArcelorMittal. So United Taconite will have – we are going to restart United Taconite this year. That's how I read the market going forward at this point. You're saying (38:47) there is upside. Look, I'm a pretty conservative person, that's the reason we have been so successful. We have been working very close to the line but we never cross the line. We had been challenged to drive this company here into situations that they look complicated, and they are complicated. But we have a great team here and we continue to make the right decisions by playing aggressively, but very conservatively. And that's the way I continue to position our forecast going forward.

Understood, that's a good positioning I think to have. Just how should we think about the idling expenses in the second quarter and the rest – remainder of year, obviously, you indicated $40 million, but should we assume second quarter level will be similar to first quarter and then trailing downwards, how should we think about from a modeling perspective on that? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yeah, I will let Kelly Tompkins answer that, Tony. P. Kelly Tompkins - Chief Financial Officer & Executive Vice President: Hey, Tony, we'll be looking at about $50 million of idle expense for the year, given the fact that Northshore will be starting up in May and the assumption that we'll restart UTAC later in the year, I mean we're not going to get into a precise start date but I think it will be sometime in the fourth quarter. So, I think that's a reasonable assumption you could use in your model.

Okay, okay. And then shift gearings to APIO and the vastly improved seaborne market year-to-date, has the market opened up enough to create increased the buying interest there in your Australian ops or maybe just, more specifically, for the Port of Esperance? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Tony, look, in the last two years, we have been producing at capacity.

I know you have... C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Last year was record and then the previous year was a then record at the time. This year we are going in record levels of production over there. So demand is not a problem. The problem is all the negativity regarding prices. And a lot of the negativity regarding prices is generated by the commodities desk of the banks. We are getting to a point right now that Morgan Stanley, Citigroup, Goldman Sachs and several others with less importance, and some with absolutely no importance, they will just have to have a Q3 of negative prices in order for their average price for the year to be correct. Let me explain what I mean. Prices are so much higher right now and they keep going to their bosses and say price will go down, price will go down, price will go down and – because that they need to keep prices fixed at the end of the year. So the fulcrum is Q3. So in Q3 I see Rio Tinto, BHP and Vale not only selling iron ore for free, but also giving some money to the clients in order to make this price forecast to be correct. But people like to believe in stuff that they don't understand. So be my guest; I understand this stuff. We're going to continue to do well over there.

Understood, understood, good stuff. I'll get back in the queue. Thank you. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Just a question for you, Tony.

Yeah? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Does Cowen have an iron ore price forecast?

I think that given the prospects, we've got Roy Hill coming on, you've got S11D that looks a little bit ahead of expectations, I would think that it would be reasonable to expect some type of retracement, but I'm not looking for prices to go really below $45. I think there's going to be good support in kind of a $45 to kind of $65 range here over the near term. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Look, prices will not go below $45 because below $45 (43:04).

I don't think they will. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yeah, I know, I know. I'm agreeing with you; price will not go below $45 because below $45, the majors get crazy. The majors who start to try to stretch payables, things like that. Because it's not about – this business, Tony, is not about cash production cost per ton, this business is about cost and value in use. Cost per ton is just a metric. You produce for a demand that doesn't exist, you are going to get hurt. You have to carry a terrible, horrible, tremendous overhead. In Singapore, a lot of people doing absolutely nothing, scratching their heads all day long, but they are not counted in the cash production cost. If the executives of these companies believe that the Board of Directors are not seeing, they are wrong. But anyway, good luck for their training. (44:04)

Thank you for that, Lourenco. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Thank you.

We do have to monitor, obviously, the Chinese equation to that, obviously – what's going to happen with production going forward here too. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yeah. Okay.

Thanks very much. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yeah. All right, appreciate it. Thanks a lot, Tony.

And your next question comes from line of Michael Gambardella with JPMorgan. Your line is open. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Hi, Mike.

Michael Gambardella if your line is on mute, please un-mute. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Mike Gambardella went back to check the (44:35).

(44:37) C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Mike?

Yes, hi, Lourenco. My question was answered already. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: But mine was not, what's the current price expectation of the desk of JPMorgan for iron ore, Mike?

Well, let me just say they're below your expectations. I realize that our commodity team (44:59). C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: When are you guys going to fire these guys at the desk; they are making your company look ugly.

Okay. Well, I guess they can be thankful you're not their boss, but thank-you very much Lourenco. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Please say hello to Jamie. Next time we meet at the elevator, I promise I will talk with him about the commodities desk of JPMorgan.

I will. All right. Thanks. Bye bye. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Bye now.

Your next question comes from the line of Matthew Fields with Bank of America Merrill Lynch. Your line is open.

Hi, Lourenco. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Hi, Matthew.

As long as you're entertaining offers if you'd like to join the research team at Bank of America, we'd love to have you. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: I can't. I was not even included in the line-up for your conference in Miami and I live in Fort Lauderdale. I didn't make for (45:52) the market cap. Because $1 times 200 million shares is $200 million; at $5 it's $1 billion. But don't invite anymore. I'm not going to go. What's your question, Matthew.

You're always invited to the Credit Conference. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: I know that. I'm giving you a hard time.

I wanted to ask a little bit about the iron ore dynamics in China with a couple of different angles. One, at what price do you see kind of incentive for some domestic Chinese producers to restart production? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: No price. Because the problem in China right now is how China will position themselves to continue to behave as a superpower and not to behave like a rogue country. China is in a very decisive moment. Are they going to be part of the developing world or they are going to continue to be something very big but very bothering (46:57) for everyone else. And I believe that I know the answer. I believe that China will be a superpower, will be a first world country. We saw that happening several times in Asia. During the 1960s in Japan they grew production, curbed pollution, improved the quality of life of the Japanese; this is still in place. Then we saw that happen in Korea during the 1970s; same very thing. South Korea became a first world country, very well behaved, great air quality, great quality of life for the Korean citizens. Then we saw in a very kind of pilot scale happening in Taiwan during the late 1980s early 1990s. Taiwan was a very, very polluted country when I started selling steel in Kaohsiung, Taiwan. Three years, four years later, we could see the difference. 10 years later, it was night and day. The moves are starting to happen in China. China will control pollution; China will curb overproduction. China will reduce their production of sinter feed. China will move more toward EAF. China will use a lot more scrap. The air in China will be a lot better than it is right now. But in the meantime, if they don't do that, they can't be accepted as a market economy. The WTO will not accept that. We have been talking very seriously with a USTR, the U.S. Trade Representative ambassador Michael Froman, in order to educate the administration in terms of having the right position in terms of China. Europe has been reacting as well. So China will have to comply, Matthew. So it's not a matter of at what level. This is too much of an illusion. What's going on in China right now is that they need to improve their behavior, they need to change. Otherwise, they are not going to make it.

All right, thanks for that perspective. And then there's been a lot of noise lately about sort of financial speculation on the Dalian Exchange with credit loosening and whatnot, and then that exchange is trying to sort of put limits on – to sort of curb margin, et cetera. I know you talked about supply discipline by the majors, but do you see some sort of financial speculation playing a part in the recent strength in iron ore, or is that overstated? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: No it's not, there is a lot of speculation going on in the Dalian Commodity Exchange. Chinese people are gamblers. You go to Las Vegas, you'll see a lot of Chinese. You go to Macau, you'll only see Chinese. So they like to gamble. And the Dalian Commodity Exchange is another casino for the average Chinese. The cabbies discuss our iron ore, that's the way it is. Go to China, you'll see that. I have been going to China since 1982, so I know a little bit about that country. The problem is not the Dalian Commodity Exchange, the problem is not the behavior of the Chinese. The problem is the fact that iron ore is not pork bellies, iron ore is not soybeans, iron ore is not gold, iron ore is not a commodity like any other commodity, iron ore is a controlled commodity. There are three companies that control everything in the iron ore business, and four companies that, together, have 84% of the market. BHP, Rio Tinto, Fortescue and Vale. So it only takes one of this four or two of this four to say, enough is enough, or to start charging a premium over IODEX, or even say, you know what, my friends, Chinese,…

All right, thanks and then lastly, I just want to sort of follow up on a question Tony asked earlier about Asia Pacific. I think – I don't know what he was trying to say about demand or increased sort of buying was – do you see any more buyers for the business, like M&A wise now that prices have stabilized. (53:10) C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Oh yeah. If price is stabilized at a more decent level, well, we may have some buyer for the business. But you know what, I'm good keeping the business, it's a great business, we have a great team in Australia. We have a very well established business in Japan. Our one man operation in Tokyo with Yamada produced more business than at least one of the majors out of Australia, in Japan. So we are good, we are feeling good about our prospects in Australia. But if a buyer comes with a – and pays the right price, I will be glad to sell.

No incoming bids just yet? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: It's a lot of tire kicking but you know what, a sale is a sale only after we have a bunch of cash in my pocket. Before that, it's just a good night chitchat talk.

Fair enough. All right. Well, thanks very much, as always, Lourenco, I appreciate it? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Thanks, Matthew.

Your next question comes from the line of Evan Kurtz with Morgan Stanley. Your line is open. Evan L. Kurtz - Morgan Stanley & Co. LLC: Hey, good morning, Lourenco. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Good morning, Evan. Evan L. Kurtz - Morgan Stanley & Co. LLC: I got a question for you on APIO as well. So say we are living in this world with $60, $70 iron ore, maybe better going forward, are there any levers you can pull there to lengthen the mine life to some development work maybe and extend the volumes there a few years? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Yes, we can do that with the right economics, with the right reward, we would be able to do that. And that's true for every single mine in the world, but you asked me specific about our APIO business, and the answer is a firm yes. Evan L. Kurtz - Morgan Stanley & Co. LLC: Any kind of specifics, like if it's $60 to $70, is that enough to change the mine plan there, or do you need to see something higher than that? C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: I will not go into specifics but I'll give you, directionally, you are on the right track. Evan L. Kurtz - Morgan Stanley & Co. LLC: Okay, great. Thanks. And then my other question was just on the Nashwauk half built iron ore mine. Read an interesting article in the Duluth News about something you said as far as bringing that maybe into the Cliffs Corporation and putting the DRI plans on top of it, which first take on my end was, that makes strategic sense, second take was, how would…

Thank you, ladies and gentlemen. I will now turn the call back over to the presenters for closing remarks. C. Lourenco Goncalves - Chairman, President & Chief Executive Officer: Thank you very much for your time and interest in Cliffs. We are very excited about our prospects for the balance of 2016 and beyond, and we look forward to speak with you again next quarter. Thanks a lot and have a great day.

Thank you, ladies and gentlemen, for your participation today. This concludes today's conference call. You may now disconnect.