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Share Name | Share Symbol | Market | Type |
---|---|---|---|
AK Steel Holding Corp | NYSE:AKS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.55 | 0 | 01:00:00 |
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T
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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31-1401455
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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9227 Centre Pointe Drive, West Chester, Ohio
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45069
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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T
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Accelerated filer
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£
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Non-accelerated filer
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£
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Smaller reporting company
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£
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Page
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AK STEEL HOLDING CORPORATION
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||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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||||||||||||||||
(dollars in millions, except per share data)
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||||||||||||||||
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||||||||
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
(unaudited)
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2016
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2015
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2016
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2015
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||||||||
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Net sales
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$
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1,452.9
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$
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1,709.9
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$
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4,463.9
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$
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5,150.2
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||||||||
Cost of products sold (exclusive of items shown separately below)
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1,194.1
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1,524.4
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3,884.6
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4,712.2
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Selling and administrative expenses (exclusive of items shown separately below)
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80.0
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65.7
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205.7
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198.4
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Depreciation
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53.7
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55.5
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161.7
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166.6
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||||
Pension and OPEB expense (income)
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(5.7
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)
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(15.9
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)
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(29.5
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)
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(48.1
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)
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Total operating costs
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1,322.1
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1,629.7
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4,222.5
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5,029.1
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||||
Operating profit
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130.8
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80.2
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241.4
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121.1
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||||
Interest expense
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40.3
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43.0
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124.5
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130.4
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||||
Impairment of Magnetation investment
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—
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—
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—
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(256.3
|
)
|
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Other income (expense)
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(7.0
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)
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4.3
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(5.6
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)
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(10.9
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)
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Income (loss) before income taxes
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83.5
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41.5
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111.3
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(276.5
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)
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Income tax expense
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14.6
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17.2
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4.1
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39.5
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Net income (loss)
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68.9
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24.3
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107.2
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(316.0
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)
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Less: Net income attributable to noncontrolling interests
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18.0
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17.6
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52.6
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47.6
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Net income (loss) attributable to AK Steel Holding Corporation
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$
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50.9
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$
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6.7
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$
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54.6
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$
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(363.6
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)
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Basic and diluted earnings per share:
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||||||||
Net income (loss) attributable to AK Steel Holding Corporation common stockholders
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$
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0.21
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$
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0.04
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$
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0.26
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$
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(2.05
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)
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AK STEEL HOLDING CORPORATION
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||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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(dollars in millions)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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(unaudited)
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2016
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2015
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2016
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2015
|
||||||||
Net income (loss)
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$
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68.9
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$
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24.3
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$
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107.2
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$
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(316.0
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)
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Other comprehensive income (loss), before tax:
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||||||||
Foreign currency translation gain (loss)
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0.1
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—
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0.5
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(2.0
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)
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Cash flow hedges:
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Gains (losses) arising in period
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2.4
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(27.5
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35.3
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(47.0
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)
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Reclassification of losses (gains) to net income (loss)
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(1.4
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)
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14.2
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26.3
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41.4
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Pension and OPEB plans:
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Prior service credit (cost) arising in period
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(8.9
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)
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—
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(8.9
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)
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—
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Gains (losses) arising in period
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(12.8
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)
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—
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(12.8
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)
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—
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Reclassification of prior service cost (credits) included in net income (loss)
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(13.5
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)
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(15.1
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(41.1
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(45.2
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)
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Reclassification of losses (gains) included in net income (loss)
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11.8
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8.2
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23.7
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24.6
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Other comprehensive income (loss), before tax
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(22.3
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)
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(20.2
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)
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23.0
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(28.2
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)
|
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Income tax benefit related to items of comprehensive income (loss)
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(3.9
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)
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—
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—
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—
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|
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Other comprehensive income (loss)
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(18.4
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)
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(20.2
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)
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23.0
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(28.2
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)
|
||||
Comprehensive income (loss)
|
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50.5
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4.1
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130.2
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(344.2
|
)
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
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18.0
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17.6
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52.6
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47.6
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||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
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$
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32.5
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$
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(13.5
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)
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$
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77.6
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$
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(391.8
|
)
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(dollars in millions, except per share data)
|
||||||||
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|
||||
(unaudited)
|
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September 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
|
$
|
57.5
|
|
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$
|
56.6
|
|
Accounts receivable, net
|
|
489.0
|
|
|
444.9
|
|
||
Inventory, net
|
|
1,088.4
|
|
|
1,226.3
|
|
||
Other current assets
|
|
66.1
|
|
|
78.4
|
|
||
Total current assets
|
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1,701.0
|
|
|
1,806.2
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|
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Property, plant and equipment
|
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6,565.3
|
|
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6,466.0
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|
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Accumulated depreciation
|
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(4,537.7
|
)
|
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(4,379.5
|
)
|
||
Property, plant and equipment, net
|
|
2,027.6
|
|
|
2,086.5
|
|
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Other non-current assets
|
|
192.2
|
|
|
191.7
|
|
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TOTAL ASSETS
|
|
$
|
3,920.8
|
|
|
$
|
4,084.4
|
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LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
639.5
|
|
|
$
|
703.4
|
|
Accrued liabilities
|
|
248.7
|
|
|
261.5
|
|
||
Current portion of pension and other postretirement benefit obligations
|
|
46.2
|
|
|
77.7
|
|
||
Total current liabilities
|
|
934.4
|
|
|
1,042.6
|
|
||
Non-current liabilities:
|
|
|
|
|
||||
Long-term debt
|
|
2,000.2
|
|
|
2,354.1
|
|
||
Pension and other postretirement benefit obligations
|
|
1,131.0
|
|
|
1,146.9
|
|
||
Other non-current liabilities
|
|
130.4
|
|
|
136.4
|
|
||
TOTAL LIABILITIES
|
|
4,196.0
|
|
|
4,680.0
|
|
||
Equity (deficit):
|
|
|
|
|
||||
Common stock, authorized 450,000,000 shares of $0.01 par value each; issued 238,841,983 and 178,284,137 shares in 2016 and 2015; outstanding 238,269,413 and 177,893,562 shares in 2016 and 2015
|
|
2.4
|
|
|
1.8
|
|
||
Additional paid-in capital
|
|
2,520.0
|
|
|
2,266.8
|
|
||
Treasury stock, common shares at cost, 572,570 and 390,575 shares in 2016 and 2015
|
|
(2.4
|
)
|
|
(2.0
|
)
|
||
Accumulated deficit
|
|
(3,002.4
|
)
|
|
(3,057.0
|
)
|
||
Accumulated other comprehensive loss
|
|
(164.2
|
)
|
|
(187.2
|
)
|
||
Total stockholders’ equity (deficit)
|
|
(646.6
|
)
|
|
(977.6
|
)
|
||
Noncontrolling interests
|
|
371.4
|
|
|
382.0
|
|
||
TOTAL EQUITY (DEFICIT)
|
|
(275.2
|
)
|
|
(595.6
|
)
|
||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
|
$
|
3,920.8
|
|
|
$
|
4,084.4
|
|
(unaudited)
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Middletown Coke Company, LLC (“SunCoke Middletown”)
|
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|
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Cash and cash equivalents
|
|
$
|
12.2
|
|
|
$
|
7.6
|
|
Inventory, net
|
|
17.2
|
|
|
19.8
|
|
||
Property, plant and equipment
|
|
421.6
|
|
|
421.5
|
|
||
Accumulated depreciation
|
|
(68.6
|
)
|
|
(57.6
|
)
|
||
Accounts payable
|
|
11.3
|
|
|
10.8
|
|
||
Other assets (liabilities), net
|
|
(1.7
|
)
|
|
(0.5
|
)
|
||
Noncontrolling interests
|
|
369.4
|
|
|
380.0
|
|
||
|
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|
||||
Other variable interest entities
|
|
|
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|
||||
Cash and cash equivalents
|
|
$
|
1.1
|
|
|
$
|
1.1
|
|
Property, plant and equipment
|
|
11.7
|
|
|
11.5
|
|
||
Accumulated depreciation
|
|
(9.5
|
)
|
|
(9.4
|
)
|
||
Other assets (liabilities), net
|
|
1.0
|
|
|
0.9
|
|
||
Noncontrolling interests
|
|
2.0
|
|
|
2.0
|
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(dollars in millions)
|
||||||||
|
|
Nine Months Ended September 30,
|
||||||
(unaudited)
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
107.2
|
|
|
$
|
(316.0
|
)
|
Depreciation
|
|
150.8
|
|
|
155.9
|
|
||
Depreciation—SunCoke Middletown
|
|
10.9
|
|
|
10.7
|
|
||
Amortization
|
|
14.3
|
|
|
17.0
|
|
||
Impairment of Magnetation investment
|
|
—
|
|
|
256.3
|
|
||
Deferred income taxes
|
|
6.1
|
|
|
37.8
|
|
||
Pension and OPEB expense (income)
|
|
(29.5
|
)
|
|
(48.1
|
)
|
||
Contributions to pension trust
|
|
—
|
|
|
(24.1
|
)
|
||
Contribution to retirees VEBA
|
|
—
|
|
|
(3.1
|
)
|
||
Other pension payments
|
|
(32.6
|
)
|
|
(1.3
|
)
|
||
Other postretirement benefit payments
|
|
(24.3
|
)
|
|
(32.9
|
)
|
||
Changes in working capital
|
|
37.5
|
|
|
122.0
|
|
||
Other operating items, net
|
|
47.5
|
|
|
25.9
|
|
||
Net cash flows from operating activities
|
|
287.9
|
|
|
200.1
|
|
||
Cash flows from investing activities
:
|
|
|
|
|
||||
Capital investments
|
|
(81.9
|
)
|
|
(71.0
|
)
|
||
Proceeds from sale of equity investee
|
|
—
|
|
|
25.0
|
|
||
Other investing items, net
|
|
2.2
|
|
|
1.5
|
|
||
Net cash flows from investing activities
|
|
(79.7
|
)
|
|
(44.5
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net borrowings (payments) under credit facility
|
|
(360.0
|
)
|
|
(55.0
|
)
|
||
Proceeds from issuance of long-term debt
|
|
380.0
|
|
|
—
|
|
||
Redemption of long-term debt
|
|
(392.8
|
)
|
|
(10.1
|
)
|
||
Proceeds from issuance of common stock
|
|
249.4
|
|
|
—
|
|
||
Debt issuance costs
|
|
(20.4
|
)
|
|
—
|
|
||
SunCoke Middletown distributions to noncontrolling interest owners
|
|
(63.2
|
)
|
|
(69.7
|
)
|
||
Other financing items, net
|
|
(0.3
|
)
|
|
(1.0
|
)
|
||
Net cash flows from financing activities
|
|
(207.3
|
)
|
|
(135.8
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
0.9
|
|
|
19.8
|
|
||
Cash and cash equivalents, beginning of period
|
|
56.6
|
|
|
70.2
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
57.5
|
|
|
$
|
90.0
|
|
AK STEEL HOLDING CORPORATION
|
||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
|
||||||||||||||||||||||||||||
(dollars in millions)
|
||||||||||||||||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
||||||||||||||
(unaudited)
|
|
Common
Stock
|
|
Addi-
tional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accum-
ulated
Deficit
|
|
Accum-
ulated
Other
Compre-
hensive
Income (Loss)
|
|
Noncon-
trolling
Interests
|
|
Total
|
||||||||||||||
December 31, 2014
|
|
$
|
1.8
|
|
|
$
|
2,259.1
|
|
|
$
|
(1.0
|
)
|
|
$
|
(2,548.0
|
)
|
|
$
|
(204.4
|
)
|
|
$
|
415.5
|
|
|
$
|
(77.0
|
)
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
(363.6
|
)
|
|
|
|
|
47.6
|
|
|
(316.0
|
)
|
|||||||
Share-based compensation
|
|
|
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.2
|
|
|||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|||||||
Change in accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28.2
|
)
|
|
|
|
|
(28.2
|
)
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(69.7
|
)
|
|
(69.7
|
)
|
||||||||||||
September 30, 2015
|
|
$
|
1.8
|
|
|
$
|
2,266.3
|
|
|
$
|
(2.0
|
)
|
|
$
|
(2,911.6
|
)
|
|
$
|
(232.6
|
)
|
|
$
|
393.4
|
|
|
$
|
(484.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2015
|
|
$
|
1.8
|
|
|
$
|
2,266.8
|
|
|
$
|
(2.0
|
)
|
|
$
|
(3,057.0
|
)
|
|
$
|
(187.2
|
)
|
|
$
|
382.0
|
|
|
$
|
(595.6
|
)
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
54.6
|
|
|
|
|
|
52.6
|
|
|
107.2
|
|
|||||||
Issuance of common stock
|
|
0.6
|
|
|
248.8
|
|
|
|
|
|
|
|
|
|
|
249.4
|
|
|||||||||||
Share-based compensation
|
|
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.4
|
)
|
|||||||
Change in accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.0
|
|
|
|
|
|
23.0
|
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(63.2
|
)
|
|
(63.2
|
)
|
||||||||||||
September 30, 2016
|
|
$
|
2.4
|
|
|
$
|
2,520.0
|
|
|
$
|
(2.4
|
)
|
|
$
|
(3,002.4
|
)
|
|
$
|
(164.2
|
)
|
|
$
|
371.4
|
|
|
$
|
(275.2
|
)
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Finished and semi-finished
|
$
|
880.1
|
|
|
$
|
996.5
|
|
Raw materials
|
372.7
|
|
|
410.0
|
|
||
Total cost
|
1,252.8
|
|
|
1,406.5
|
|
||
Adjustment to state inventories at LIFO value
|
(164.4
|
)
|
|
(180.2
|
)
|
||
Inventory, net
|
$
|
1,088.4
|
|
|
$
|
1,226.3
|
|
Balance at December 31, 2015
|
|
$
|
22.1
|
|
Payments
|
|
(15.3
|
)
|
|
Balance at September 30, 2016
|
|
$
|
6.8
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
|
$
|
72.4
|
|
|
$
|
76.1
|
|
|
$
|
216.4
|
|
|
$
|
284.1
|
|
Gross profit
|
|
24.6
|
|
|
20.7
|
|
|
73.1
|
|
|
49.0
|
|
||||
Net income (loss)
|
|
8.1
|
|
|
5.1
|
|
|
24.6
|
|
|
(13.7
|
)
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Credit Facility
|
$
|
190.0
|
|
|
$
|
550.0
|
|
7.50% Senior Secured Notes due July 2023 (effective rate of 8.3%)
|
380.0
|
|
|
—
|
|
||
8.75% Senior Secured Notes due December 2018
|
—
|
|
|
380.0
|
|
||
5.00% Exchangeable Senior Notes due November 2019 (effective rate of 10.8%)
|
150.0
|
|
|
150.0
|
|
||
7.625% Senior Notes due May 2020
|
529.8
|
|
|
529.8
|
|
||
7.625% Senior Notes due October 2021
|
406.2
|
|
|
406.2
|
|
||
8.375% Senior Notes due April 2022
|
279.8
|
|
|
290.2
|
|
||
Industrial Revenue Bonds due 2020 through 2028
|
99.3
|
|
|
99.3
|
|
||
Capital lease for Research and Innovation Center
|
21.6
|
|
|
—
|
|
||
Unamortized debt discount/premium and debt issuance costs
|
(56.5
|
)
|
|
(51.4
|
)
|
||
Total long-term debt
|
$
|
2,000.2
|
|
|
$
|
2,354.1
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Pension Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.8
|
|
|
$
|
0.5
|
|
|
$
|
2.1
|
|
|
$
|
1.6
|
|
Interest cost
|
31.9
|
|
|
32.5
|
|
|
95.9
|
|
|
97.5
|
|
||||
Expected return on assets
|
(42.9
|
)
|
|
(49.5
|
)
|
|
(128.6
|
)
|
|
(148.9
|
)
|
||||
Amortization of prior service cost
|
1.5
|
|
|
1.1
|
|
|
4.1
|
|
|
3.3
|
|
||||
Amortization of loss
|
8.0
|
|
|
7.8
|
|
|
22.0
|
|
|
23.4
|
|
||||
Settlement loss
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
$
|
4.2
|
|
|
$
|
(7.6
|
)
|
|
$
|
0.4
|
|
|
$
|
(23.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other Postretirement Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1.2
|
|
|
$
|
1.8
|
|
|
$
|
3.6
|
|
|
$
|
5.4
|
|
Interest cost
|
5.0
|
|
|
5.7
|
|
|
14.9
|
|
|
16.9
|
|
||||
Amortization of prior service cost (credit)
|
(15.0
|
)
|
|
(16.2
|
)
|
|
(45.2
|
)
|
|
(48.5
|
)
|
||||
Amortization of (gain) loss
|
(1.1
|
)
|
|
0.4
|
|
|
(3.2
|
)
|
|
1.2
|
|
||||
Net periodic benefit cost (income)
|
$
|
(9.9
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(29.9
|
)
|
|
$
|
(25.0
|
)
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Accrued liabilities
|
$
|
7.5
|
|
|
$
|
5.6
|
|
Other non-current liabilities
|
40.2
|
|
|
41.1
|
|
|
|
Asbestos Cases Pending at September 30, 2016
|
|
Cases with specific dollar claims for damages:
|
|
|
|
Claims up to $0.2
|
|
123
|
|
Claims above $0.2 to $5.0
|
|
6
|
|
Claims above $5.0 to $15.0
|
|
2
|
|
Claims above $15.0 to $20.0
|
|
2
|
|
Total claims with specific dollar claims for damages (a)
|
|
133
|
|
Cases without a specific dollar claim for damages
|
|
208
|
|
Total asbestos cases pending
|
|
341
|
|
(a)
|
Involve a total of
2,333
plaintiffs and
17,180
defendants
|
|
|
Final
|
|
Final
|
Country
|
|
Corrosion-Resistant CVD Margins
|
|
Corrosion-Resistant AD Margins
|
China
|
|
241.07% – 39.05%
|
|
209.97%
|
India
|
|
29.49% – 8.00%
|
|
4.43% – 3.05%
|
Italy
|
|
38.51% – 0.00%
|
|
92.12% – 12.63%
|
South Korea
|
|
1.19% – 0.00%
|
|
47.80% – 8.75%
|
Taiwan
|
|
0.00%
|
|
10.34%
|
|
|
Final
|
|
Final
|
Country
|
|
Cold-Rolled CVD Margins
|
|
Cold-Rolled AD Margins
|
Brazil
|
|
11.31% – 11.09%
|
|
35.43% – 19.58%
|
China
|
|
256.44%
|
|
265.79%
|
India
|
|
10.00%
|
|
7.60%
|
Japan
|
|
NA
|
|
71.35%
|
South Korea
|
|
59.72% – 3.89%
|
|
34.33% – 6.32%
|
United Kingdom
|
|
NA
|
|
25.17% – 5.40%
|
|
|
Final
|
|
Final
|
Country
|
|
Hot-Rolled CVD Margins
|
|
Hot-Rolled AD Margins
|
Australia
|
|
NA
|
|
29.58%
|
Brazil
|
|
11.30% – 11.09%
|
|
34.28% – 33.14%
|
Japan
|
|
NA
|
|
7.51% – 4.99%
|
Netherlands
|
|
NA
|
|
3.73%
|
South Korea
|
|
58.68% – 3.89%
|
|
9.49% – 4.61%
|
Turkey
|
|
NA
|
|
6.77% – 4.15%
|
United Kingdom
|
|
NA
|
|
33.06%
|
|
|
Preliminary
|
|
Preliminary
|
Country
|
|
Stainless CVD Margins
|
|
Stainless AD Margins
|
China
|
|
193.12% – 57.30%
|
|
76.64% – 63.86%
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Share-based Compensation Expense
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Stock options
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
$
|
1.6
|
|
Restricted stock
|
0.3
|
|
|
0.3
|
|
|
1.4
|
|
|
2.9
|
|
||||
Restricted stock units issued to Directors
|
0.3
|
|
|
0.3
|
|
|
1.0
|
|
|
0.9
|
|
||||
Performance shares
|
0.4
|
|
|
0.6
|
|
|
1.2
|
|
|
1.8
|
|
||||
Total share-based compensation expense
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
$
|
4.4
|
|
|
$
|
7.2
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(1.7
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
1.0
|
|
Other comprehensive income (loss)—foreign currency translation gain (loss)
|
0.1
|
|
|
—
|
|
|
0.5
|
|
|
(2.0
|
)
|
||||
Balance at end of period
|
$
|
(1.6
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(1.0
|
)
|
Cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
21.4
|
|
|
$
|
(24.5
|
)
|
|
$
|
(34.0
|
)
|
|
$
|
(32.2
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising in period
|
2.4
|
|
|
(27.5
|
)
|
|
35.3
|
|
|
(47.0
|
)
|
||||
Income tax expense (benefit)
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gains (losses) arising in period, net of tax
|
5.3
|
|
|
(27.5
|
)
|
|
35.3
|
|
|
(47.0
|
)
|
||||
Reclassification of losses (gains) to net income (loss)—commodity contracts (a)
|
(1.4
|
)
|
|
14.2
|
|
|
26.3
|
|
|
41.4
|
|
||||
Income tax expense (benefit)
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net amount of reclassification of losses (gains) to net income (loss)
|
0.9
|
|
|
14.2
|
|
|
26.3
|
|
|
41.4
|
|
||||
Total other comprehensive income (loss), net of tax
|
6.2
|
|
|
(13.3
|
)
|
|
61.6
|
|
|
(5.6
|
)
|
||||
Balance at end of period
|
$
|
27.6
|
|
|
$
|
(37.8
|
)
|
|
$
|
27.6
|
|
|
$
|
(37.8
|
)
|
Unrealized holding gains on securities
|
|
|
|
|
|
|
|
||||||||
Balance at beginning and end of period
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Pension and OPEB plans
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(165.5
|
)
|
|
$
|
(187.3
|
)
|
|
$
|
(151.1
|
)
|
|
$
|
(173.6
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Prior service credit (cost) arising in period
|
(8.9
|
)
|
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
||||
Gains (losses) arising in period
|
(12.8
|
)
|
|
—
|
|
|
(12.8
|
)
|
|
—
|
|
||||
Subtotal
|
(21.7
|
)
|
|
—
|
|
|
(21.7
|
)
|
|
—
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gains (losses) arising in period, net of tax
|
(21.7
|
)
|
|
—
|
|
|
(21.7
|
)
|
|
—
|
|
||||
Reclassification to net income (loss):
|
|
|
|
|
|
|
|
||||||||
Prior service costs (credits) (b)
|
(13.5
|
)
|
|
(15.1
|
)
|
|
(41.1
|
)
|
|
(45.2
|
)
|
||||
Actuarial (gains) losses (b)
|
11.8
|
|
|
8.2
|
|
|
23.7
|
|
|
24.6
|
|
||||
Subtotal
|
(1.7
|
)
|
|
(6.9
|
)
|
|
(17.4
|
)
|
|
(20.6
|
)
|
||||
Income tax expense
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amount of reclassification to net income (loss), net of tax
|
(3.0
|
)
|
|
(6.9
|
)
|
|
(17.4
|
)
|
|
(20.6
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
(24.7
|
)
|
|
(6.9
|
)
|
|
(39.1
|
)
|
|
(20.6
|
)
|
||||
Balance at end of period
|
$
|
(190.2
|
)
|
|
$
|
(194.2
|
)
|
|
$
|
(190.2
|
)
|
|
$
|
(194.2
|
)
|
(a)
|
Included in cost of products sold.
|
(b)
|
Included in pension and OPEB expense (income).
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
50.9
|
|
|
$
|
6.7
|
|
|
$
|
54.6
|
|
|
$
|
(363.6
|
)
|
Less: distributed earnings to common stockholders and holders of certain stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Undistributed earnings (loss)
|
|
$
|
50.9
|
|
|
$
|
6.7
|
|
|
$
|
54.6
|
|
|
$
|
(363.6
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Common stockholders earnings—basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings to common stockholders
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss) to common stockholders
|
|
50.8
|
|
|
6.6
|
|
|
54.4
|
|
|
(362.4
|
)
|
||||
Common stockholders earnings (loss)—basic and diluted
|
|
$
|
50.8
|
|
|
$
|
6.6
|
|
|
$
|
54.4
|
|
|
$
|
(362.4
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Common shares outstanding (weighted-average shares in millions):
|
|
|
|
|
|
|
|
|
||||||||
Common shares outstanding for basic earnings per share
|
|
237.5
|
|
|
177.2
|
|
|
210.6
|
|
|
177.1
|
|
||||
Effect of exchangeable debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Effect of dilutive stock-based compensation
|
|
0.9
|
|
|
0.3
|
|
|
0.8
|
|
|
—
|
|
||||
Common shares outstanding for diluted earnings per share
|
|
238.4
|
|
|
177.5
|
|
|
211.4
|
|
|
177.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
|
0.21
|
|
|
0.04
|
|
|
0.26
|
|
|
(2.05
|
)
|
||||
Basic and diluted earnings (loss) per share
|
|
$
|
0.21
|
|
|
$
|
0.04
|
|
|
$
|
0.26
|
|
|
$
|
(2.05
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially issuable common shares (in millions) excluded from earnings per share calculation due to anti-dilutive effect
|
|
1.9
|
|
|
3.4
|
|
|
2.3
|
|
|
3.0
|
|
|
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.
|
•
|
Level 2 inputs are inputs, other than quoted prices, that are directly or indirectly observable for the asset or liability. Level 2 inputs include model-generated values that rely on inputs either directly observed or readily-derived from available market data sources, such as Bloomberg or other news and data vendors. They include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic factors. As a practical expedient, we estimate the value of common/collective trusts by using the net asset value per share multiplied by the number of shares of the trust investment held as of the measurement date. If we have the ability to redeem our investment in the respective alternative investment at the net asset value with no significant restrictions on the redemption at the consolidated balance sheet date, we categorized the alternative investment as a Level 2 measurement in the fair value hierarchy. We generate fair values for our commodity derivative contracts and foreign currency forward contracts from observable futures prices for the respective commodity or currency, from sources such as the New York Mercantile Exchange (NYMEX) or the London Metal Exchange (LME). In cases where the derivative is an option contract (including caps, floors and collars), we adjust our valuations to reflect the counterparty’s valuation assumptions. After validating that the counterparty’s assumptions for implied volatilities reflect independent source’s assumptions, we discount these model-generated future values with discount factors that reflect the counterparty’s credit quality. We apply different discount rates to different contracts since the maturities and counterparties differ. As of
September 30, 2016
, a spread over benchmark rates of less than
1%
was used for derivatives valued as assets and less than
6%
for derivatives valued as liabilities. We have estimated the fair value of long-term debt based upon quoted market prices for the same or similar issues or on the current interest rates available to us for debt on similar terms and with similar maturities.
|
•
|
Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value if observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. This level of categorization is not applicable to our valuations on a normal recurring basis other than for a portion of our pension assets.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
57.5
|
|
|
$
|
—
|
|
|
$
|
57.5
|
|
|
$
|
56.6
|
|
|
$
|
—
|
|
|
$
|
56.6
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||||
Commodity hedge contracts
|
—
|
|
|
10.6
|
|
|
10.6
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
—
|
|
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Assets measured at fair value
|
$
|
57.5
|
|
|
$
|
14.4
|
|
|
$
|
71.9
|
|
|
$
|
56.6
|
|
|
$
|
1.9
|
|
|
$
|
58.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
$
|
—
|
|
|
$
|
(6.4
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
—
|
|
|
$
|
(41.2
|
)
|
|
$
|
(41.2
|
)
|
Other non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
—
|
|
|
(2.3
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(9.5
|
)
|
|
(9.5
|
)
|
||||||
Liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(8.7
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
—
|
|
|
$
|
(50.7
|
)
|
|
$
|
(50.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at other than fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt, including current portions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value
|
$
|
—
|
|
|
$
|
(2,083.6
|
)
|
|
$
|
(2,083.6
|
)
|
|
$
|
—
|
|
|
$
|
(1,573.3
|
)
|
|
$
|
(1,573.3
|
)
|
Carrying amount
|
—
|
|
|
(2,000.2
|
)
|
|
(2,000.2
|
)
|
|
—
|
|
|
(2,354.1
|
)
|
|
(2,354.1
|
)
|
|
Commodity
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Nickel (in lbs)
|
|
—
|
|
|
164,800
|
|
||
Natural gas (in MMBTUs)
|
|
41,738,000
|
|
|
36,972,500
|
|
||
Zinc (in lbs)
|
|
41,050,000
|
|
|
54,173,800
|
|
||
Iron ore (in metric tons)
|
|
2,170,000
|
|
|
2,795,000
|
|
||
Electricity (in MWHs)
|
|
1,147,000
|
|
|
1,386,400
|
|
||
Foreign exchange contracts (in euros)
|
|
€
|
6,550,000
|
|
|
€
|
55,500,000
|
|
Asset (liability)
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||
Other current assets—commodity contracts
|
|
$
|
4.4
|
|
|
$
|
0.3
|
|
Other noncurrent assets—commodity contracts
|
|
2.2
|
|
|
0.3
|
|
||
Accrued liabilities—commodity contracts
|
|
(5.5
|
)
|
|
(40.9
|
)
|
||
Other non-current liabilities—commodity contracts
|
|
(2.2
|
)
|
|
(9.5
|
)
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
—
|
|
|
1.1
|
|
||
Commodity contracts
|
|
6.2
|
|
|
0.2
|
|
||
Other noncurrent assets—commodity contracts
|
|
1.6
|
|
|
—
|
|
||
Accrued liabilities—commodity contracts
|
|
(0.9
|
)
|
|
(0.3
|
)
|
||
Other noncurrent liabilities—commodity contracts
|
|
(0.1
|
)
|
|
—
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Gain (loss)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Derivatives designated as cash flow hedges—
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Reclassified from accumulated other comprehensive income into cost of products sold (effective portion)
|
|
$
|
1.4
|
|
|
$
|
(14.2
|
)
|
|
$
|
(26.3
|
)
|
|
$
|
(41.4
|
)
|
Recognized in cost of products sold (ineffective portion and amount excluded from effectiveness testing)
|
|
(3.7
|
)
|
|
(3.1
|
)
|
|
(13.4
|
)
|
|
(17.2
|
)
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts—recognized in other income (expense)
|
|
(0.2
|
)
|
|
0.3
|
|
|
(1.0
|
)
|
|
(1.1
|
)
|
||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Recognized in net sales
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
2.1
|
|
||||
Recognized in cost of products sold
|
|
3.9
|
|
|
(0.3
|
)
|
|
3.4
|
|
|
(1.8
|
)
|
Commodity Hedge
|
Settlement Dates
|
|
Gains (losses)
|
||
Natural gas
|
October 2016 to October 2018
|
|
$
|
4.9
|
|
Zinc
|
October 2016 to September 2018
|
|
2.9
|
|
|
Electricity
|
October 2016 to December 2017
|
|
(1.2
|
)
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net cash paid (received) during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
82.7
|
|
|
$
|
87.4
|
|
Income taxes
|
|
(2.6
|
)
|
|
0.2
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Capital investments
|
|
$
|
42.7
|
|
|
$
|
26.1
|
|
Research and Innovation Center capital lease
|
|
21.6
|
|
|
—
|
|
||
Issuance of restricted stock and restricted stock units
|
|
2.0
|
|
|
4.1
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended September 30, 2016
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,406.5
|
|
|
$
|
63.1
|
|
|
$
|
101.4
|
|
|
$
|
(118.1
|
)
|
|
$
|
1,452.9
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
1,182.0
|
|
|
45.1
|
|
|
72.6
|
|
|
(105.6
|
)
|
|
1,194.1
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
1.1
|
|
|
81.2
|
|
|
3.2
|
|
|
5.2
|
|
|
(10.7
|
)
|
|
80.0
|
|
||||||
Depreciation
|
—
|
|
|
46.2
|
|
|
2.1
|
|
|
5.4
|
|
|
—
|
|
|
53.7
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.7
|
)
|
||||||
Total operating costs
|
1.1
|
|
|
1,303.7
|
|
|
50.4
|
|
|
83.2
|
|
|
(116.3
|
)
|
|
1,322.1
|
|
||||||
Operating profit (loss)
|
(1.1
|
)
|
|
102.8
|
|
|
12.7
|
|
|
18.2
|
|
|
(1.8
|
)
|
|
130.8
|
|
||||||
Interest expense
|
—
|
|
|
39.8
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
40.3
|
|
||||||
Other income (expense)
|
—
|
|
|
(10.3
|
)
|
|
2.0
|
|
|
1.3
|
|
|
—
|
|
|
(7.0
|
)
|
||||||
Income (loss) before income taxes
|
(1.1
|
)
|
|
52.7
|
|
|
14.7
|
|
|
19.0
|
|
|
(1.8
|
)
|
|
83.5
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
9.4
|
|
|
5.5
|
|
|
0.4
|
|
|
(0.7
|
)
|
|
14.6
|
|
||||||
Equity in net income (loss) of subsidiaries
|
52.0
|
|
|
8.7
|
|
|
—
|
|
|
(0.1
|
)
|
|
(60.6
|
)
|
|
—
|
|
||||||
Net income (loss)
|
50.9
|
|
|
52.0
|
|
|
9.2
|
|
|
18.5
|
|
|
(61.7
|
)
|
|
68.9
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
18.0
|
|
|
—
|
|
|
18.0
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
50.9
|
|
|
52.0
|
|
|
9.2
|
|
|
0.5
|
|
|
(61.7
|
)
|
|
50.9
|
|
||||||
Other comprehensive income (loss)
|
(18.4
|
)
|
|
(18.4
|
)
|
|
—
|
|
|
0.1
|
|
|
18.3
|
|
|
(18.4
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
32.5
|
|
|
$
|
33.6
|
|
|
$
|
9.2
|
|
|
$
|
0.6
|
|
|
$
|
(43.4
|
)
|
|
$
|
32.5
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended September 30, 2015
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,660.9
|
|
|
$
|
64.1
|
|
|
$
|
140.1
|
|
|
$
|
(155.2
|
)
|
|
$
|
1,709.9
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
1,510.7
|
|
|
41.8
|
|
|
112.8
|
|
|
(140.9
|
)
|
|
1,524.4
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
0.9
|
|
|
68.4
|
|
|
3.3
|
|
|
5.7
|
|
|
(12.6
|
)
|
|
65.7
|
|
||||||
Depreciation
|
—
|
|
|
48.3
|
|
|
2.0
|
|
|
5.2
|
|
|
—
|
|
|
55.5
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(15.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.9
|
)
|
||||||
Total operating costs
|
0.9
|
|
|
1,611.5
|
|
|
47.1
|
|
|
123.7
|
|
|
(153.5
|
)
|
|
1,629.7
|
|
||||||
Operating profit (loss)
|
(0.9
|
)
|
|
49.4
|
|
|
17.0
|
|
|
16.4
|
|
|
(1.7
|
)
|
|
80.2
|
|
||||||
Interest expense
|
—
|
|
|
42.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
43.0
|
|
||||||
Other income (expense)
|
—
|
|
|
1.0
|
|
|
1.7
|
|
|
1.6
|
|
|
—
|
|
|
4.3
|
|
||||||
Income (loss) before income taxes
|
(0.9
|
)
|
|
7.9
|
|
|
18.7
|
|
|
17.5
|
|
|
(1.7
|
)
|
|
41.5
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
10.4
|
|
|
7.5
|
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
17.2
|
|
||||||
Equity in net income (loss) of subsidiaries
|
7.6
|
|
|
10.1
|
|
|
—
|
|
|
0.1
|
|
|
(17.8
|
)
|
|
—
|
|
||||||
Net income (loss)
|
6.7
|
|
|
7.6
|
|
|
11.2
|
|
|
17.7
|
|
|
(18.9
|
)
|
|
24.3
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
|
—
|
|
|
17.6
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
6.7
|
|
|
7.6
|
|
|
11.2
|
|
|
0.1
|
|
|
(18.9
|
)
|
|
6.7
|
|
||||||
Other comprehensive income (loss)
|
(20.2
|
)
|
|
(20.2
|
)
|
|
—
|
|
|
—
|
|
|
20.2
|
|
|
(20.2
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
(13.5
|
)
|
|
$
|
(12.6
|
)
|
|
$
|
11.2
|
|
|
$
|
0.1
|
|
|
$
|
1.3
|
|
|
$
|
(13.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Nine Months Ended September 30, 2016
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
4,311.5
|
|
|
$
|
189.0
|
|
|
$
|
321.0
|
|
|
$
|
(357.6
|
)
|
|
$
|
4,463.9
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
3,838.8
|
|
|
131.2
|
|
|
235.3
|
|
|
(320.7
|
)
|
|
3,884.6
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
3.8
|
|
|
208.4
|
|
|
9.8
|
|
|
16.7
|
|
|
(33.0
|
)
|
|
205.7
|
|
||||||
Depreciation
|
—
|
|
|
139.5
|
|
|
6.0
|
|
|
16.2
|
|
|
—
|
|
|
161.7
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(29.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.5
|
)
|
||||||
Total operating costs
|
3.8
|
|
|
4,157.2
|
|
|
147.0
|
|
|
268.2
|
|
|
(353.7
|
)
|
|
4,222.5
|
|
||||||
Operating profit (loss)
|
(3.8
|
)
|
|
154.3
|
|
|
42.0
|
|
|
52.8
|
|
|
(3.9
|
)
|
|
241.4
|
|
||||||
Interest expense
|
—
|
|
|
123.2
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
124.5
|
|
||||||
Other income (expense)
|
—
|
|
|
(19.5
|
)
|
|
6.0
|
|
|
7.9
|
|
|
—
|
|
|
(5.6
|
)
|
||||||
Income (loss) before income taxes
|
(3.8
|
)
|
|
11.6
|
|
|
48.0
|
|
|
59.4
|
|
|
(3.9
|
)
|
|
111.3
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(15.3
|
)
|
|
18.2
|
|
|
2.7
|
|
|
(1.5
|
)
|
|
4.1
|
|
||||||
Equity in net income (loss) of subsidiaries
|
58.4
|
|
|
31.5
|
|
|
—
|
|
|
—
|
|
|
(89.9
|
)
|
|
—
|
|
||||||
Net income (loss)
|
54.6
|
|
|
58.4
|
|
|
29.8
|
|
|
56.7
|
|
|
(92.3
|
)
|
|
107.2
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
52.6
|
|
|
—
|
|
|
52.6
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
54.6
|
|
|
58.4
|
|
|
29.8
|
|
|
4.1
|
|
|
(92.3
|
)
|
|
54.6
|
|
||||||
Other comprehensive income (loss)
|
23.0
|
|
|
23.0
|
|
|
—
|
|
|
0.5
|
|
|
(23.5
|
)
|
|
23.0
|
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
77.6
|
|
|
$
|
81.4
|
|
|
$
|
29.8
|
|
|
$
|
4.6
|
|
|
$
|
(115.8
|
)
|
|
$
|
77.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,002.7
|
|
|
$
|
196.3
|
|
|
$
|
399.2
|
|
|
$
|
(448.0
|
)
|
|
$
|
5,150.2
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
4,676.3
|
|
|
126.5
|
|
|
318.9
|
|
|
(409.5
|
)
|
|
4,712.2
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
4.0
|
|
|
204.6
|
|
|
10.2
|
|
|
17.6
|
|
|
(38.0
|
)
|
|
198.4
|
|
||||||
Depreciation
|
—
|
|
|
145.2
|
|
|
5.8
|
|
|
15.6
|
|
|
—
|
|
|
166.6
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(48.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48.1
|
)
|
||||||
Total operating costs
|
4.0
|
|
|
4,978.0
|
|
|
142.5
|
|
|
352.1
|
|
|
(447.5
|
)
|
|
5,029.1
|
|
||||||
Operating profit (loss)
|
(4.0
|
)
|
|
24.7
|
|
|
53.8
|
|
|
47.1
|
|
|
(0.5
|
)
|
|
121.1
|
|
||||||
Interest expense
|
—
|
|
|
128.9
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
130.4
|
|
||||||
Impairment of Magnetation investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(256.3
|
)
|
|
—
|
|
|
(256.3
|
)
|
||||||
Other income (expense)
|
—
|
|
|
(3.2
|
)
|
|
4.9
|
|
|
(12.6
|
)
|
|
—
|
|
|
(10.9
|
)
|
||||||
Income (loss) before income taxes
|
(4.0
|
)
|
|
(107.4
|
)
|
|
58.7
|
|
|
(223.3
|
)
|
|
(0.5
|
)
|
|
(276.5
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
|
22.2
|
|
|
23.5
|
|
|
(6.0
|
)
|
|
(0.2
|
)
|
|
39.5
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(359.6
|
)
|
|
(230.0
|
)
|
|
—
|
|
|
0.5
|
|
|
589.1
|
|
|
—
|
|
||||||
Net income (loss)
|
(363.6
|
)
|
|
(359.6
|
)
|
|
35.2
|
|
|
(216.8
|
)
|
|
588.8
|
|
|
(316.0
|
)
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
47.6
|
|
|
—
|
|
|
47.6
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
(363.6
|
)
|
|
(359.6
|
)
|
|
35.2
|
|
|
(264.4
|
)
|
|
588.8
|
|
|
(363.6
|
)
|
||||||
Other comprehensive income (loss)
|
(28.2
|
)
|
|
(28.2
|
)
|
|
—
|
|
|
(2.0
|
)
|
|
30.2
|
|
|
(28.2
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
(391.8
|
)
|
|
$
|
(387.8
|
)
|
|
$
|
35.2
|
|
|
$
|
(266.4
|
)
|
|
$
|
619.0
|
|
|
$
|
(391.8
|
)
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
September 30, 2016
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
16.8
|
|
|
$
|
5.1
|
|
|
$
|
35.6
|
|
|
$
|
—
|
|
|
$
|
57.5
|
|
Accounts receivable, net
|
—
|
|
|
448.9
|
|
|
31.6
|
|
|
21.6
|
|
|
(13.1
|
)
|
|
489.0
|
|
||||||
Inventory, net
|
—
|
|
|
1,020.5
|
|
|
39.7
|
|
|
42.2
|
|
|
(14.0
|
)
|
|
1,088.4
|
|
||||||
Other current assets
|
—
|
|
|
62.9
|
|
|
0.6
|
|
|
2.6
|
|
|
—
|
|
|
66.1
|
|
||||||
Total current assets
|
—
|
|
|
1,549.1
|
|
|
77.0
|
|
|
102.0
|
|
|
(27.1
|
)
|
|
1,701.0
|
|
||||||
Property, plant and equipment
|
—
|
|
|
5,857.4
|
|
|
173.5
|
|
|
534.4
|
|
|
—
|
|
|
6,565.3
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,354.8
|
)
|
|
(86.3
|
)
|
|
(96.6
|
)
|
|
—
|
|
|
(4,537.7
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,502.6
|
|
|
87.2
|
|
|
437.8
|
|
|
—
|
|
|
2,027.6
|
|
||||||
Investment in subsidiaries
|
(3,184.1
|
)
|
|
1,400.6
|
|
|
—
|
|
|
68.3
|
|
|
1,715.2
|
|
|
—
|
|
||||||
Inter-company accounts
|
2,537.5
|
|
|
(3,618.1
|
)
|
|
1,455.8
|
|
|
(461.5
|
)
|
|
86.3
|
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
122.1
|
|
|
33.0
|
|
|
37.1
|
|
|
—
|
|
|
192.2
|
|
||||||
TOTAL ASSETS
|
$
|
(646.6
|
)
|
|
$
|
956.3
|
|
|
$
|
1,653.0
|
|
|
$
|
183.7
|
|
|
$
|
1,774.4
|
|
|
$
|
3,920.8
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
607.8
|
|
|
$
|
14.9
|
|
|
$
|
17.2
|
|
|
$
|
(0.4
|
)
|
|
$
|
639.5
|
|
Accrued liabilities
|
—
|
|
|
229.6
|
|
|
6.0
|
|
|
13.1
|
|
|
—
|
|
|
248.7
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
45.9
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
46.2
|
|
||||||
Total current liabilities
|
—
|
|
|
883.3
|
|
|
20.9
|
|
|
30.6
|
|
|
(0.4
|
)
|
|
934.4
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
2,000.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,000.2
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
1,127.7
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
1,131.0
|
|
||||||
Other non-current liabilities
|
—
|
|
|
129.2
|
|
|
0.9
|
|
|
0.3
|
|
|
—
|
|
|
130.4
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
4,140.4
|
|
|
21.8
|
|
|
34.2
|
|
|
(0.4
|
)
|
|
4,196.0
|
|
||||||
Equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
(646.6
|
)
|
|
(3,184.1
|
)
|
|
1,631.2
|
|
|
(221.9
|
)
|
|
1,774.8
|
|
|
(646.6
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
371.4
|
|
|
—
|
|
|
371.4
|
|
||||||
TOTAL EQUITY (DEFICIT)
|
(646.6
|
)
|
|
(3,184.1
|
)
|
|
1,631.2
|
|
|
149.5
|
|
|
1,774.8
|
|
|
(275.2
|
)
|
||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
(646.6
|
)
|
|
$
|
956.3
|
|
|
$
|
1,653.0
|
|
|
$
|
183.7
|
|
|
$
|
1,774.4
|
|
|
$
|
3,920.8
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
December 31, 2015
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
27.0
|
|
|
$
|
5.7
|
|
|
$
|
23.9
|
|
|
$
|
—
|
|
|
$
|
56.6
|
|
Accounts receivable, net
|
—
|
|
|
411.9
|
|
|
26.3
|
|
|
29.2
|
|
|
(22.5
|
)
|
|
444.9
|
|
||||||
Inventory, net
|
—
|
|
|
1,149.6
|
|
|
39.7
|
|
|
47.0
|
|
|
(10.0
|
)
|
|
1,226.3
|
|
||||||
Other current assets
|
—
|
|
|
75.6
|
|
|
0.3
|
|
|
2.5
|
|
|
—
|
|
|
78.4
|
|
||||||
Total current assets
|
—
|
|
|
1,664.1
|
|
|
72.0
|
|
|
102.6
|
|
|
(32.5
|
)
|
|
1,806.2
|
|
||||||
Property, plant and equipment
|
—
|
|
|
5,763.8
|
|
|
168.6
|
|
|
533.6
|
|
|
—
|
|
|
6,466.0
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,218.0
|
)
|
|
(80.3
|
)
|
|
(81.2
|
)
|
|
—
|
|
|
(4,379.5
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,545.8
|
|
|
88.3
|
|
|
452.4
|
|
|
—
|
|
|
2,086.5
|
|
||||||
Investment in subsidiaries
|
(3,541.0
|
)
|
|
1,346.0
|
|
|
—
|
|
|
68.2
|
|
|
2,126.8
|
|
|
—
|
|
||||||
Inter-company accounts
|
2,563.4
|
|
|
(3,600.9
|
)
|
|
1,398.1
|
|
|
(453.5
|
)
|
|
92.9
|
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
125.6
|
|
|
33.0
|
|
|
33.1
|
|
|
—
|
|
|
191.7
|
|
||||||
TOTAL ASSETS
|
$
|
(977.6
|
)
|
|
$
|
1,080.6
|
|
|
$
|
1,591.4
|
|
|
$
|
202.8
|
|
|
$
|
2,187.2
|
|
|
$
|
4,084.4
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
669.0
|
|
|
$
|
11.7
|
|
|
$
|
23.7
|
|
|
$
|
(1.0
|
)
|
|
$
|
703.4
|
|
Accrued liabilities
|
—
|
|
|
242.3
|
|
|
6.5
|
|
|
12.7
|
|
|
—
|
|
|
261.5
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
77.3
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
77.7
|
|
||||||
Total current liabilities
|
—
|
|
|
988.6
|
|
|
18.2
|
|
|
36.8
|
|
|
(1.0
|
)
|
|
1,042.6
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
2,354.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,354.1
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
1,143.6
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
1,146.9
|
|
||||||
Other non-current liabilities
|
—
|
|
|
135.3
|
|
|
0.9
|
|
|
0.2
|
|
|
—
|
|
|
136.4
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
4,621.6
|
|
|
19.1
|
|
|
40.3
|
|
|
(1.0
|
)
|
|
4,680.0
|
|
||||||
Equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
(977.6
|
)
|
|
(3,541.0
|
)
|
|
1,572.3
|
|
|
(219.5
|
)
|
|
2,188.2
|
|
|
(977.6
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
382.0
|
|
|
—
|
|
|
382.0
|
|
||||||
TOTAL EQUITY (DEFICIT)
|
(977.6
|
)
|
|
(3,541.0
|
)
|
|
1,572.3
|
|
|
162.5
|
|
|
2,188.2
|
|
|
(595.6
|
)
|
||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
(977.6
|
)
|
|
$
|
1,080.6
|
|
|
$
|
1,591.4
|
|
|
$
|
202.8
|
|
|
$
|
2,187.2
|
|
|
$
|
4,084.4
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Nine Months Ended September 30, 2016
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(2.8
|
)
|
|
$
|
190.6
|
|
|
$
|
33.4
|
|
|
$
|
73.9
|
|
|
$
|
(7.2
|
)
|
|
$
|
287.9
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(74.5
|
)
|
|
(5.4
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
(81.9
|
)
|
||||||
Other investing items, net
|
—
|
|
|
0.2
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.2
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(74.3
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
(79.7
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (payments) under credit facility
|
—
|
|
|
(360.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360.0
|
)
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
380.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
380.0
|
|
||||||
Redemption of long-term debt
|
—
|
|
|
(392.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(392.8
|
)
|
||||||
Proceeds from issuance of common stock
|
249.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249.4
|
|
||||||
Debt issuance costs
|
—
|
|
|
(20.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.4
|
)
|
||||||
Inter-company activity
|
(246.2
|
)
|
|
266.6
|
|
|
(28.6
|
)
|
|
1.0
|
|
|
7.2
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(63.2
|
)
|
|
—
|
|
|
(63.2
|
)
|
||||||
Other financing items, net
|
(0.4
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||||
Net cash flows from financing activities
|
2.8
|
|
|
(126.5
|
)
|
|
(28.6
|
)
|
|
(62.2
|
)
|
|
7.2
|
|
|
(207.3
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(10.2
|
)
|
|
(0.6
|
)
|
|
11.7
|
|
|
—
|
|
|
0.9
|
|
||||||
Cash and equivalents, beginning of period
|
—
|
|
|
27.0
|
|
|
5.7
|
|
|
23.9
|
|
|
—
|
|
|
56.6
|
|
||||||
Cash and equivalents, end of period
|
$
|
—
|
|
|
$
|
16.8
|
|
|
$
|
5.1
|
|
|
$
|
35.6
|
|
|
$
|
—
|
|
|
$
|
57.5
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(3.1
|
)
|
|
$
|
92.9
|
|
|
$
|
28.9
|
|
|
$
|
67.1
|
|
|
$
|
14.3
|
|
|
$
|
200.1
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(64.3
|
)
|
|
(3.8
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(71.0
|
)
|
||||||
Proceeds from sale of equity investee
|
—
|
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
||||||
Other investing items, net
|
—
|
|
|
1.8
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
1.5
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(37.5
|
)
|
|
(3.8
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(44.5
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings under credit facility
|
—
|
|
|
(55.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
||||||
Redemption of long-term debt
|
—
|
|
|
(10.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
||||||
Inter-company activity
|
4.1
|
|
|
31.5
|
|
|
(27.3
|
)
|
|
6.0
|
|
|
(14.3
|
)
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(69.7
|
)
|
|
—
|
|
|
(69.7
|
)
|
||||||
Other financing items, net
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||||
Net cash flows from financing activities
|
3.1
|
|
|
(33.6
|
)
|
|
(27.3
|
)
|
|
(63.7
|
)
|
|
(14.3
|
)
|
|
(135.8
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
21.8
|
|
|
(2.2
|
)
|
|
0.2
|
|
|
—
|
|
|
19.8
|
|
||||||
Cash and equivalents, beginning of period
|
—
|
|
|
28.5
|
|
|
4.5
|
|
|
37.2
|
|
|
—
|
|
|
70.2
|
|
||||||
Cash and equivalents, end of period
|
$
|
—
|
|
|
$
|
50.3
|
|
|
$
|
2.3
|
|
|
$
|
37.4
|
|
|
$
|
—
|
|
|
$
|
90.0
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Value-added Shipments
|
|
(tons in thousands)
|
|
(tons in thousands)
|
||||||||||||
Stainless/electrical
|
|
212.2
|
14.9
|
%
|
|
216.1
|
11.5
|
%
|
|
663.1
|
14.3
|
%
|
|
667.0
|
12.3
|
%
|
Coated
|
|
758.1
|
53.2
|
|
|
883.4
|
47.2
|
|
|
2,414.6
|
52.0
|
|
|
2,493.2
|
45.9
|
|
Cold-rolled
|
|
219.3
|
15.4
|
|
|
344.6
|
18.4
|
|
|
777.9
|
16.8
|
|
|
998.2
|
18.4
|
|
Tubular
|
|
28.0
|
1.9
|
|
|
28.8
|
1.6
|
|
|
88.7
|
1.9
|
|
|
87.9
|
1.6
|
|
Subtotal value-added shipments
|
|
1,217.6
|
85.4
|
|
|
1,472.9
|
78.7
|
|
|
3,944.3
|
85.0
|
|
|
4,246.3
|
78.2
|
|
Non Value-added Shipments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hot-rolled
|
|
168.7
|
11.8
|
|
|
354.0
|
18.9
|
|
|
573.0
|
12.4
|
|
|
1,046.1
|
19.2
|
|
Secondary
|
|
39.6
|
2.8
|
|
|
44.3
|
2.4
|
|
|
122.3
|
2.6
|
|
|
141.0
|
2.6
|
|
Subtotal non value-added shipments
|
|
208.3
|
14.6
|
|
|
398.3
|
21.3
|
|
|
695.3
|
15.0
|
|
|
1,187.1
|
21.8
|
|
Total shipments
|
|
1,425.9
|
100.0
|
%
|
|
1,871.2
|
100.0
|
%
|
|
4,639.6
|
100.0
|
%
|
|
5,433.4
|
100.0
|
%
|
|
|
Nine Months Ended September 30,
|
||
Market
|
|
2016
|
|
2015
|
Automotive
|
|
67%
|
|
58%
|
Infrastructure and Manufacturing
|
|
16%
|
|
16%
|
Distributors and Converters
|
|
17%
|
|
26%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to AK Holding
|
|
$
|
50.9
|
|
|
$
|
6.7
|
|
|
$
|
54.6
|
|
|
$
|
(363.6
|
)
|
Net income attributable to noncontrolling interests
|
|
18.0
|
|
|
17.6
|
|
|
52.6
|
|
|
47.6
|
|
||||
Income tax expense (benefit)
|
|
14.6
|
|
|
17.2
|
|
|
4.1
|
|
|
39.5
|
|
||||
Interest expense
|
|
40.3
|
|
|
43.0
|
|
|
124.5
|
|
|
130.4
|
|
||||
Interest income
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.2
|
)
|
|
(0.9
|
)
|
||||
Depreciation
|
|
53.7
|
|
|
55.5
|
|
|
161.7
|
|
|
166.6
|
|
||||
Amortization
|
|
1.1
|
|
|
1.5
|
|
|
4.2
|
|
|
7.5
|
|
||||
EBITDA
|
|
178.3
|
|
|
141.2
|
|
|
400.5
|
|
|
27.1
|
|
||||
Less: EBITDA of noncontrolling interests (a)
|
|
21.7
|
|
|
21.2
|
|
|
63.5
|
|
|
58.3
|
|
||||
Impairment of Magnetation investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256.3
|
|
||||
Adjusted EBITDA
|
|
$
|
156.6
|
|
|
$
|
120.0
|
|
|
$
|
337.0
|
|
|
$
|
225.1
|
|
Adjusted EBITDA margin
|
|
10.8
|
%
|
|
7.0
|
%
|
|
7.5
|
%
|
|
4.4
|
%
|
(a)
|
The reconciliation of EBITDA of noncontrolling interests to net income attributable to noncontrolling interests is as follows:
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income attributable to noncontrolling interests
|
|
$
|
18.0
|
|
|
$
|
17.6
|
|
|
$
|
52.6
|
|
|
$
|
47.6
|
|
Depreciation
|
|
3.7
|
|
|
3.6
|
|
|
10.9
|
|
|
10.7
|
|
||||
EBITDA of noncontrolling interests
|
|
$
|
21.7
|
|
|
$
|
21.2
|
|
|
$
|
63.5
|
|
|
$
|
58.3
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
We expect relatively flat shipment levels overall in the fourth quarter compared to the third quarter of 2016.
|
2.
|
We currently estimate that the average selling price will be modestly lower than the third quarter. The decline in average selling price primarily reflects the impact on our business from the recent decline in carbon spot market pricing, lower pricing from customer contracts that are impacted by spot market indices and a slightly higher mix of shipments to the carbon spot market.
|
3.
|
We currently expect raw material costs at year end to decline from third quarter levels. Changes in expected raw material costs on our expected inventory levels at year end will affect our adjustments to LIFO in the fourth quarter. Accordingly, we anticipate a lower LIFO credit than we incurred in the third quarter.
|
4.
|
Maintenance outage costs are expected to be approximately
$25.0
, primarily due to maintenance at the Dearborn Works and Butler Works melt shops and the outage at the Dearborn Works galvanizing line to install new equipment that will enhance our high-strength carbon steel production capabilities.
|
5.
|
As a result of these factors, we expect adjusted EBITDA margins to be similar to or slightly better than the second quarter and lower than the third quarter.
|
6.
|
In connection with the approval of the Magnetation Settlement Agreement, we expect to recognize a charge in the fourth quarter of 2016 for the
$36.6
Termination Payment to the bankruptcy estate and a charge in the range of
$15.0
to
$35.0
for the present value of remaining obligations under contracts with other third parties to transport pellets to our facilities. The actual payments for these contracts will be made over the next
12.5 years
. We are working on actions to mitigate our expense for these contracts, but can give no assurance that we will be successful. We currently anticipate that the financial benefits from cost savings and cost avoidance, including savings resulting from lower pricing of replacement iron ore pellets from other suppliers, will partially offset the Termination Payment in 2016 and fully offset it by the end of 2017.
|
7.
|
We expect to record a pension settlement loss of approximately
$25.0
in the fourth quarter of 2016 to recognize a portion of the unrealized actuarial loss related to our purchase of annuity contracts with an insurance company to transfer obligations for approximately 10,000 retirees or their beneficiaries receiving pension payments. We also expect to record a pension corridor charge of approximately
$106.0
in the fourth quarter of 2016 in connection with the October remeasurement of the plan. The corridor charge is primarily a result of a decline in discount rates since the beginning of the year, partially offset by better than expected returns on plan assets. It is possible that we may need to record an additional pension corridor charge at the end of the year if key assumptions change between the October plan remeasurement and the year-end remeasurement. Under our method of accounting for pension and other postretirement benefit plans, we recognize into income, typically as a fourth quarter adjustment, any unrecognized actuarial gains and losses that exceed 10% of the larger of projected benefit obligations or plan assets (the “corridor”). These corridor charges are driven mainly by changes in assumptions and by events and circumstances beyond our control, primarily changes in interest rates, performance of the financial markets, healthcare cost trends and mortality and retirement experience. In any given year, we are unable to reliably forecast or predict whether we will incur corridor charges or, if we do, what the magnitude of those charges will be.
|
|
|
Negative Effect on
Pre-tax Income
|
||||||
Commodity Derivative
|
|
10% Decrease
|
|
25% Decrease
|
||||
Natural gas
|
|
$
|
12.7
|
|
|
$
|
31.7
|
|
Zinc
|
|
4.4
|
|
|
11.1
|
|
||
Electricity
|
|
3.5
|
|
|
8.8
|
|
||
Iron ore
|
|
8.5
|
|
|
17.5
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
Period
|
|
Total Number of Shares Purchased (a)
|
|
Average Price Paid Per Share (a)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (b)
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b)
|
|||||
July 2016
|
|
17,901
|
|
|
$
|
5.62
|
|
|
—
|
|
|
||
August 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
September 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Total
|
|
17,901
|
|
|
5.62
|
|
|
—
|
|
$
|
125.6
|
|
(a)
|
During the quarter, we repurchased common stock owned by participants in our restricted stock awards program under the terms of the AK Steel Holding Corporation Stock Incentive Plan. To pay federal, state and local taxes due upon the vesting of the restricted stock, employees may have us withhold shares that have a fair market value equal to the minimum statutory withholding rate that tax authorities could impose on the transaction. We repurchase the withheld shares at the quoted average of the reported high and low sales prices on the day we withhold the shares.
|
(b)
|
On October 21, 2008, the Board of Directors authorized us to repurchase, from time to time, up to
$150.0
of our outstanding equity securities. The Board of Directors’ authorization specified no expiration date.
|
Exhibit Number
|
Description
|
3.1
|
Restated Certificate of Incorporation of AK Steel Holding Corporation.
|
31.1
|
Section 302 Certification of Chief Executive Officer
|
31.2
|
Section 302 Certification of Chief Financial Officer
|
32.1
|
Section 906 Certification of Chief Executive Officer
|
32.2
|
Section 906 Certification of Chief Financial Officer
|
95.1
|
Mine Safety Disclosure Exhibit
|
101
|
Financial statements from the Quarterly Report on Form 10-Q of AK Steel Holding Corporation for the quarter ended September 30, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity (Deficit) and (vi) the Notes to the Condensed Consolidated Financial Statements.
|
|
|
|
AK STEEL HOLDING CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
October 25, 2016
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
|
|
|
|
Dated:
|
October 25, 2016
|
|
/s/ Gregory A. Hoffbauer
|
|
|
|
Gregory A. Hoffbauer
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
1 Year AK Steel Chart |
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