Cliffs Natural Resources Up 6% After Unveiling New Capital Allocation Strategy

Shares of Cliffs Natural Resources

are up 6% after the company reported a new capital allocation strategy. 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. 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. Our Board's doubling of the dividend in July 2011 and again in March this year demonstrates this commitment."