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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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☒
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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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☒
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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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Emerging growth company
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☐
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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 March 31,
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||||||
(unaudited)
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2017
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2016
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Net sales
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$
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1,533.4
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$
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1,518.8
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Cost of products sold (exclusive of items shown separately below)
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1,310.8
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1,365.5
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Selling and administrative expenses (exclusive of items shown separately below)
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71.2
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63.5
|
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Depreciation
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55.1
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|
|
53.7
|
|
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Pension and OPEB expense (income)
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(16.2
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)
|
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(11.9
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)
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Total operating costs
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1,420.9
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1,470.8
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Operating profit
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112.5
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48.0
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Interest expense
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39.4
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42.8
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Other income (expense)
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(7.8
|
)
|
|
(0.7
|
)
|
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Income before income taxes
|
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65.3
|
|
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4.5
|
|
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Income tax expense (benefit)
|
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(13.4
|
)
|
|
0.1
|
|
||
Net income
|
|
78.7
|
|
|
4.4
|
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||
Less: Net income attributable to noncontrolling interests
|
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16.2
|
|
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18.0
|
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Net income (loss) attributable to AK Steel Holding Corporation
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$
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62.5
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$
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(13.6
|
)
|
Net income (loss) per share attributable to AK Steel Holding Corporation common stockholders:
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Basic
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$
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0.20
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$
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(0.08
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)
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Diluted
|
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$
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0.19
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$
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(0.08
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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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||||||||
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Three Months Ended March 31,
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||||||
(unaudited)
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2017
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2016
|
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Net income
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$
|
78.7
|
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$
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4.4
|
|
Other comprehensive income (loss), before tax:
|
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Foreign currency translation gain (loss)
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0.3
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1.5
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Cash flow hedges:
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Gains (losses) arising in period
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(8.0
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)
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(7.8
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)
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Reclassification of losses (gains) to net income (loss)
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(3.2
|
)
|
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13.2
|
|
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Pension and OPEB plans:
|
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|
|
||||
Reclassification of prior service cost (credits) included in net income (loss)
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(13.4
|
)
|
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(13.8
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)
|
||
Reclassification of losses (gains) included in net income (loss)
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1.6
|
|
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5.9
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Other comprehensive income (loss), before tax
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(22.7
|
)
|
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(1.0
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)
|
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Income tax benefit related to items of comprehensive income (loss)
|
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—
|
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—
|
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Other comprehensive income (loss)
|
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(22.7
|
)
|
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(1.0
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)
|
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Comprehensive income (loss)
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56.0
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3.4
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Less: Comprehensive income attributable to noncontrolling interests
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16.2
|
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18.0
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Comprehensive income (loss) attributable to AK Steel Holding Corporation
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$
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39.8
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$
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(14.6
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)
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AK STEEL HOLDING CORPORATION
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(dollars in millions, except per share data)
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(unaudited)
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March 31,
2017 |
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December 31,
2016 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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185.7
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$
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173.2
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Accounts receivable, net
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524.5
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442.0
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Inventory, net
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1,105.8
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1,113.9
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Other current assets
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107.7
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94.6
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Total current assets
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1,923.7
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1,823.7
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Property, plant and equipment
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6,585.4
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6,569.0
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Accumulated depreciation
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(4,609.4
|
)
|
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(4,554.6
|
)
|
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Property, plant and equipment, net
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1,976.0
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2,014.4
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Other non-current assets
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204.7
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197.9
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TOTAL ASSETS
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$
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4,104.4
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$
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4,036.0
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$
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651.5
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$
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589.9
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Accrued liabilities
|
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176.6
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234.1
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Current portion of long-term debt
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168.5
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—
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Current portion of pension and other postretirement benefit obligations
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41.3
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41.3
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Total current liabilities
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1,037.9
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865.3
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Non-current liabilities:
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Long-term debt
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1,684.5
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1,816.6
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Pension and other postretirement benefit obligations
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1,077.6
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1,093.7
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Other non-current liabilities
|
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149.9
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|
|
148.4
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TOTAL LIABILITIES
|
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3,949.9
|
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|
3,924.0
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EXCHANGEABLE NOTES EXCHANGE FEATURE
|
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19.7
|
|
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21.3
|
|
||
Equity:
|
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Common stock, authorized 450,000,000 shares of $0.01 par value each; issued 315,663,417 and 314,739,500 shares in 2017 and 2016; outstanding 314,785,342 and 314,160,557 shares in 2017 and 2016
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3.2
|
|
|
3.1
|
|
||
Additional paid-in capital
|
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2,861.4
|
|
|
2,855.4
|
|
||
Treasury stock, common shares at cost, 878,075 and 578,943 shares in 2017 and 2016
|
|
(5.3
|
)
|
|
(2.4
|
)
|
||
Accumulated deficit
|
|
(3,002.3
|
)
|
|
(3,064.8
|
)
|
||
Accumulated other comprehensive loss
|
|
(86.2
|
)
|
|
(63.5
|
)
|
||
Total stockholders’ equity (deficit)
|
|
(229.2
|
)
|
|
(272.2
|
)
|
||
Noncontrolling interests
|
|
364.0
|
|
|
362.9
|
|
||
TOTAL EQUITY
|
|
134.8
|
|
|
90.7
|
|
||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
4,104.4
|
|
|
$
|
4,036.0
|
|
(unaudited)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Middletown Coke Company, LLC (“SunCoke Middletown”)
|
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|
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|
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Cash and cash equivalents
|
|
$
|
10.1
|
|
|
$
|
5.0
|
|
Inventory, net
|
|
17.8
|
|
|
16.2
|
|
||
Property, plant and equipment
|
|
422.4
|
|
|
422.3
|
|
||
Accumulated depreciation
|
|
(76.6
|
)
|
|
(72.5
|
)
|
||
Accounts payable
|
|
10.9
|
|
|
7.8
|
|
||
Other assets (liabilities), net
|
|
(0.7
|
)
|
|
(2.3
|
)
|
||
Noncontrolling interests
|
|
362.1
|
|
|
360.9
|
|
||
|
|
|
|
|
||||
Other variable interest entities
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
Property, plant and equipment
|
|
11.8
|
|
|
11.8
|
|
||
Accumulated depreciation
|
|
(9.6
|
)
|
|
(9.5
|
)
|
||
Other assets (liabilities), net
|
|
0.9
|
|
|
1.0
|
|
||
Noncontrolling interests
|
|
1.9
|
|
|
2.0
|
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(dollars in millions)
|
||||||||
|
|
Three Months Ended March 31,
|
||||||
(unaudited)
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
78.7
|
|
|
$
|
4.4
|
|
Depreciation
|
|
51.0
|
|
|
50.1
|
|
||
Depreciation—SunCoke Middletown
|
|
4.1
|
|
|
3.6
|
|
||
Amortization
|
|
7.2
|
|
|
5.3
|
|
||
Deferred income taxes
|
|
(11.9
|
)
|
|
4.5
|
|
||
Pension and OPEB expense (income)
|
|
(16.2
|
)
|
|
(11.9
|
)
|
||
Other postretirement benefit payments
|
|
(11.4
|
)
|
|
(9.6
|
)
|
||
Changes in working capital
|
|
(54.6
|
)
|
|
71.6
|
|
||
Other operating items, net
|
|
(10.6
|
)
|
|
18.7
|
|
||
Net cash flows from operating activities
|
|
36.3
|
|
|
136.7
|
|
||
Cash flows from investing activities
:
|
|
|
|
|
||||
Capital investments
|
|
(32.5
|
)
|
|
(28.8
|
)
|
||
Other investing items, net
|
|
1.5
|
|
|
(0.1
|
)
|
||
Net cash flows from investing activities
|
|
(31.0
|
)
|
|
(28.9
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net borrowings (payments) under credit facility
|
|
—
|
|
|
(30.0
|
)
|
||
Proceeds from issuance of long-term debt
|
|
400.0
|
|
|
—
|
|
||
Redemption of long-term debt
|
|
(367.5
|
)
|
|
—
|
|
||
Debt issuance costs
|
|
(7.8
|
)
|
|
—
|
|
||
SunCoke Middletown distributions to noncontrolling interest owners
|
|
(15.1
|
)
|
|
(21.1
|
)
|
||
Other financing items, net
|
|
(2.4
|
)
|
|
(0.3
|
)
|
||
Net cash flows from financing activities
|
|
7.2
|
|
|
(51.4
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
12.5
|
|
|
56.4
|
|
||
Cash and cash equivalents, beginning of period
|
|
173.2
|
|
|
56.6
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
185.7
|
|
|
$
|
113.0
|
|
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, 2015
|
|
$
|
1.8
|
|
|
$
|
2,266.8
|
|
|
$
|
(2.0
|
)
|
|
$
|
(3,057.0
|
)
|
|
$
|
(187.2
|
)
|
|
$
|
382.0
|
|
|
$
|
(595.6
|
)
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
(13.6
|
)
|
|
|
|
|
18.0
|
|
|
4.4
|
|
|||||||
Share-based compensation
|
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.0
|
|
|||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.3
|
)
|
|||||||
Change in accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
(1.0
|
)
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(21.1
|
)
|
|
(21.1
|
)
|
||||||||||||
March 31, 2016
|
|
$
|
1.8
|
|
|
$
|
2,268.8
|
|
|
$
|
(2.3
|
)
|
|
$
|
(3,070.6
|
)
|
|
$
|
(188.2
|
)
|
|
$
|
378.9
|
|
|
$
|
(611.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2016
|
|
$
|
3.1
|
|
|
$
|
2,855.4
|
|
|
$
|
(2.4
|
)
|
|
$
|
(3,064.8
|
)
|
|
$
|
(63.5
|
)
|
|
$
|
362.9
|
|
|
$
|
90.7
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
62.5
|
|
|
|
|
|
16.2
|
|
|
78.7
|
|
|||||||
Share-based compensation
|
|
0.1
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|||||||
Stock options exercised
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|||||||
Exchangeable notes exchange feature
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
|
|
1.6
|
|
||||||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
(2.9
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.9
|
)
|
|||||||
Change in accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22.7
|
)
|
|
|
|
|
(22.7
|
)
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(15.1
|
)
|
|
(15.1
|
)
|
||||||||||||
March 31, 2017
|
|
$
|
3.2
|
|
|
$
|
2,861.4
|
|
|
$
|
(5.3
|
)
|
|
$
|
(3,002.3
|
)
|
|
$
|
(86.2
|
)
|
|
$
|
364.0
|
|
|
$
|
134.8
|
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Finished and semi-finished
|
$
|
916.3
|
|
|
$
|
855.0
|
|
Raw materials
|
381.8
|
|
|
415.8
|
|
||
Total cost
|
1,298.1
|
|
|
1,270.8
|
|
||
Adjustment to state inventories at LIFO value
|
(192.3
|
)
|
|
(156.9
|
)
|
||
Inventory, net
|
$
|
1,105.8
|
|
|
$
|
1,113.9
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
$
|
72.5
|
|
|
$
|
69.6
|
|
Gross profit
|
|
25.5
|
|
|
23.0
|
|
||
Net income
|
|
8.9
|
|
|
7.8
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
|
$
|
6.1
|
|
|
$
|
22.1
|
|
Payments
|
|
(1.7
|
)
|
|
(4.9
|
)
|
||
Balance at end of period
|
|
$
|
4.4
|
|
|
$
|
17.2
|
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
7.50% Senior Secured Notes due July 2023 (effective rate of 8.3%)
|
380.0
|
|
|
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 (to be redeemed May 2017)
|
168.5
|
|
|
529.8
|
|
||
7.625% Senior Notes due October 2021
|
406.2
|
|
|
406.2
|
|
||
8.375% Senior Notes due April 2022
|
279.8
|
|
|
279.8
|
|
||
7.00% Senior Notes due March 2027
|
400.0
|
|
|
—
|
|
||
Industrial Revenue Bonds due 2020 through 2028
|
99.3
|
|
|
99.3
|
|
||
Capital lease for Research and Innovation Center
|
25.2
|
|
|
25.2
|
|
||
Unamortized debt discount/premium and debt issuance costs
|
(56.0
|
)
|
|
(53.7
|
)
|
||
Total debt
|
1,853.0
|
|
|
1,816.6
|
|
||
Less:
|
|
|
|
||||
Current portion of long-term debt
|
168.5
|
|
|
—
|
|
||
Total long-term debt
|
$
|
1,684.5
|
|
|
$
|
1,816.6
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Pension Benefits
|
|
|
|
||||
Service cost
|
$
|
0.7
|
|
|
$
|
0.7
|
|
Interest cost
|
27.0
|
|
|
32.0
|
|
||
Expected return on assets
|
(37.6
|
)
|
|
(42.9
|
)
|
||
Amortization of prior service cost
|
1.2
|
|
|
1.3
|
|
||
Amortization of loss
|
2.7
|
|
|
7.0
|
|
||
Net periodic benefit cost (income)
|
$
|
(6.0
|
)
|
|
$
|
(1.9
|
)
|
|
|
|
|
||||
Other Postretirement Benefits
|
|
|
|
||||
Service cost
|
$
|
1.2
|
|
|
$
|
1.2
|
|
Interest cost
|
4.3
|
|
|
5.0
|
|
||
Amortization of prior service cost (credit)
|
(14.6
|
)
|
|
(15.1
|
)
|
||
Amortization of (gain) loss
|
(1.1
|
)
|
|
(1.1
|
)
|
||
Net periodic benefit cost (income)
|
$
|
(10.2
|
)
|
|
$
|
(10.0
|
)
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Accrued liabilities
|
$
|
7.2
|
|
|
$
|
7.3
|
|
Other non-current liabilities
|
40.1
|
|
|
39.9
|
|
|
|
Asbestos Cases Pending at
|
|
|
|
March 31, 2017
|
|
Cases with specific dollar claims for damages:
|
|
|
|
Claims up to $0.2
|
|
126
|
|
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)
|
|
136
|
|
Cases without a specific dollar claim for damages
|
|
210
|
|
Total asbestos cases pending
|
|
346
|
|
(a)
|
Involve a total of
2,336
plaintiffs and
17,601
defendants
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
New Claims Filed
|
18
|
|
|
13
|
|
||
Pending Claims Disposed Of
|
11
|
|
|
46
|
|
||
Total Amount Paid in Settlements
|
$
|
0.1
|
|
|
$
|
0.3
|
|
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%
|
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%
|
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%
|
Country
|
|
Stainless CVD Margins
|
|
Stainless AD Margins
|
China
|
|
190.71% – 75.60%
|
|
76.64% – 63.86%
|
|
|
Three Months Ended March 31,
|
||||||
Share-based Compensation Expense
|
2017
|
|
2016
|
||||
Stock options
|
$
|
1.5
|
|
|
$
|
0.5
|
|
Restricted stock
|
1.9
|
|
|
0.8
|
|
||
Restricted stock units issued to Directors
|
0.4
|
|
|
0.3
|
|
||
Performance shares
|
0.4
|
|
|
0.4
|
|
||
Total share-based compensation expense
|
$
|
4.2
|
|
|
$
|
2.0
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Foreign currency translation
|
|
|
|
||||
Balance at beginning of period
|
$
|
(3.6
|
)
|
|
$
|
(2.1
|
)
|
Other comprehensive income (loss)—foreign currency translation gain (loss)
|
0.3
|
|
|
1.5
|
|
||
Balance at end of period
|
$
|
(3.3
|
)
|
|
$
|
(0.6
|
)
|
Cash flow hedges
|
|
|
|
||||
Balance at beginning of period
|
$
|
46.4
|
|
|
$
|
(34.0
|
)
|
Other comprehensive income (loss):
|
|
|
|
||||
Gains (losses) arising in period
|
(8.0
|
)
|
|
(7.8
|
)
|
||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
||
Gains (losses) arising in period, net of tax
|
(8.0
|
)
|
|
(7.8
|
)
|
||
Reclassification of losses (gains) to net income (loss)—commodity contracts (a)
|
(3.2
|
)
|
|
13.2
|
|
||
Income tax expense
|
—
|
|
|
—
|
|
||
Net amount of reclassification of losses (gains) to net income (loss)
|
(3.2
|
)
|
|
13.2
|
|
||
Total other comprehensive income (loss), net of tax
|
(11.2
|
)
|
|
5.4
|
|
||
Balance at end of period
|
$
|
35.2
|
|
|
$
|
(28.6
|
)
|
Pension and OPEB plans
|
|
|
|
||||
Balance at beginning of period
|
$
|
(106.3
|
)
|
|
$
|
(151.1
|
)
|
Other comprehensive income (loss):
|
|
|
|
||||
Reclassification to net income (loss):
|
|
|
|
||||
Prior service costs (credits) (b)
|
(13.4
|
)
|
|
(13.8
|
)
|
||
Actuarial (gains) losses (b)
|
1.6
|
|
|
5.9
|
|
||
Subtotal
|
(11.8
|
)
|
|
(7.9
|
)
|
||
Income tax expense
|
—
|
|
|
—
|
|
||
Amount of reclassification to net income (loss), net of tax
|
(11.8
|
)
|
|
(7.9
|
)
|
||
Balance at end of period
|
$
|
(118.1
|
)
|
|
$
|
(159.0
|
)
|
(a)
|
Included in cost of products sold.
|
(b)
|
Included in pension and OPEB expense (income).
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
62.5
|
|
|
$
|
(13.6
|
)
|
Less: distributed earnings to common stockholders and holders of certain stock compensation awards
|
|
—
|
|
|
—
|
|
||
Undistributed earnings (loss)
|
|
$
|
62.5
|
|
|
$
|
(13.6
|
)
|
|
|
|
|
|
||||
Common stockholders earnings—basic and diluted:
|
|
|
|
|
||||
Distributed earnings to common stockholders
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss) to common stockholders
|
|
62.4
|
|
|
(13.5
|
)
|
||
Common stockholders earnings (loss)—basic and diluted
|
|
$
|
62.4
|
|
|
$
|
(13.5
|
)
|
|
|
|
|
|
||||
Common shares outstanding (weighted-average shares in millions):
|
|
|
|
|
||||
Common shares outstanding for basic earnings per share
|
|
314.1
|
|
|
177.5
|
|
||
Effect of exchangeable debt
|
|
10.3
|
|
|
—
|
|
||
Effect of dilutive stock-based compensation
|
|
1.2
|
|
|
—
|
|
||
Common shares outstanding for diluted earnings per share
|
|
325.6
|
|
|
177.5
|
|
||
|
|
|
|
|
||||
Basic earnings per share:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
|
0.20
|
|
|
(0.08
|
)
|
||
Basic earnings (loss) per share
|
|
$
|
0.20
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
||||
Diluted earnings per share:
|
|
|
|
|
||||
Distributed earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
|
0.19
|
|
|
(0.08
|
)
|
||
Diluted earnings (loss) per share
|
|
$
|
0.19
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
||||
Potentially issuable common shares (in millions) excluded from earnings per share calculation due to anti-dilutive effect
|
|
1.1
|
|
|
3.9
|
|
|
|
•
|
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 money market mutual funds by using a $1.00 per share multiplied by the number of shares in the fund as of the measurement date. 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). We use the Black-Scholes option valuation model to value option contract derivatives (including caps, floors and collars). We use independent sources for implied volatilities, and we discount 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
March 31, 2017
, a spread over benchmark rates of less than
2%
was used for derivatives valued as assets and less than
5%
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.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents (a)
|
$
|
45.7
|
|
|
$
|
140.0
|
|
|
$
|
185.7
|
|
|
$
|
48.2
|
|
|
$
|
125.0
|
|
|
$
|
173.2
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||||
Commodity hedge contracts
|
—
|
|
|
43.6
|
|
|
43.6
|
|
|
—
|
|
|
47.0
|
|
|
47.0
|
|
||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
—
|
|
|
8.7
|
|
|
8.7
|
|
|
—
|
|
|
15.3
|
|
|
15.3
|
|
||||||
Assets measured at fair value
|
$
|
45.7
|
|
|
$
|
192.4
|
|
|
$
|
238.1
|
|
|
$
|
48.2
|
|
|
$
|
187.4
|
|
|
$
|
235.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
$
|
—
|
|
|
$
|
(1.5
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
Other non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity hedge contracts
|
—
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||||
Liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(3.0
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
—
|
|
|
$
|
(2.4
|
)
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at other than fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt, including current portions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value
|
$
|
—
|
|
|
$
|
(2,065.6
|
)
|
|
$
|
(2,065.6
|
)
|
|
$
|
—
|
|
|
$
|
(2,123.2
|
)
|
|
$
|
(2,123.2
|
)
|
Carrying amount
|
—
|
|
|
(1,853.0
|
)
|
|
(1,853.0
|
)
|
|
—
|
|
|
(1,816.6
|
)
|
|
(1,816.6
|
)
|
(a)
|
Level 2 assets include money market mutual funds invested in U.S. Treasury obligations.
|
|
Commodity
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Natural gas (in MMBTUs)
|
|
40,198,000
|
|
|
43,865,000
|
|
||
Zinc (in lbs)
|
|
53,000,000
|
|
|
58,750,000
|
|
||
Iron ore (in metric tons)
|
|
2,300,000
|
|
|
2,555,000
|
|
||
Electricity (in MWHs)
|
|
1,356,000
|
|
|
1,578,821
|
|
||
Foreign exchange contracts (in euros)
|
|
€
|
17,300,000
|
|
|
€
|
5,000,000
|
|
Asset (liability)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||
Other current assets—commodity contracts
|
|
$
|
13.3
|
|
|
$
|
18.5
|
|
Other non-current assets—commodity contracts
|
|
0.8
|
|
|
5.2
|
|
||
Accrued liabilities—commodity contracts
|
|
(1.5
|
)
|
|
(1.8
|
)
|
||
Other non-current liabilities—commodity contracts
|
|
(0.9
|
)
|
|
(0.1
|
)
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
0.1
|
|
|
0.1
|
|
||
Commodity contracts
|
|
30.3
|
|
|
28.5
|
|
||
Other non-current assets—commodity contracts
|
|
7.9
|
|
|
10.1
|
|
||
Other non-current liabilities—commodity contracts
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|
|
Three Months Ended March 31,
|
||||||
Gain (loss)
|
|
2017
|
|
2016
|
||||
Derivatives designated as cash flow hedges—
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
||||
Reclassified from accumulated other comprehensive income into cost of products sold (effective portion)
|
|
$
|
3.2
|
|
|
$
|
(13.2
|
)
|
Recognized in cost of products sold (ineffective portion and amount excluded from effectiveness testing)
|
|
(0.2
|
)
|
|
4.4
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Foreign exchange contracts—recognized in other income (expense)
|
|
(0.1
|
)
|
|
(1.8
|
)
|
||
Commodity contracts—recognized in cost of products sold
|
|
15.3
|
|
|
(0.5
|
)
|
Commodity Hedge
|
Settlement Dates
|
|
Gains (losses)
|
||
Natural gas
|
April 2017 to March 2019
|
|
$
|
15.3
|
|
Zinc
|
April 2017 to December 2018
|
|
7.2
|
|
|
Electricity
|
April 2017 to December 2018
|
|
0.2
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net cash paid (received) during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
45.1
|
|
|
$
|
4.8
|
|
Income taxes
|
|
0.1
|
|
|
(3.4
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Capital investments
|
|
$
|
21.6
|
|
|
$
|
21.2
|
|
Research and Innovation Center capital lease
|
|
—
|
|
|
9.6
|
|
||
Issuance of performance shares, restricted stock and restricted stock units
|
|
3.8
|
|
|
1.4
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended March 31, 2017
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,473.6
|
|
|
$
|
72.3
|
|
|
$
|
91.4
|
|
|
$
|
(103.9
|
)
|
|
$
|
1,533.4
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
1,286.5
|
|
|
51.9
|
|
|
62.8
|
|
|
(90.4
|
)
|
|
1,310.8
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
1.4
|
|
|
72.3
|
|
|
3.2
|
|
|
5.5
|
|
|
(11.2
|
)
|
|
71.2
|
|
||||||
Depreciation
|
—
|
|
|
47.2
|
|
|
2.0
|
|
|
5.9
|
|
|
—
|
|
|
55.1
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(16.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.2
|
)
|
||||||
Total operating costs
|
1.4
|
|
|
1,389.8
|
|
|
57.1
|
|
|
74.2
|
|
|
(101.6
|
)
|
|
1,420.9
|
|
||||||
Operating profit (loss)
|
(1.4
|
)
|
|
83.8
|
|
|
15.2
|
|
|
17.2
|
|
|
(2.3
|
)
|
|
112.5
|
|
||||||
Interest expense
|
—
|
|
|
39.0
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
39.4
|
|
||||||
Other income (expense)
|
—
|
|
|
(11.4
|
)
|
|
2.4
|
|
|
1.2
|
|
|
—
|
|
|
(7.8
|
)
|
||||||
Income (loss) before income taxes
|
(1.4
|
)
|
|
33.4
|
|
|
17.6
|
|
|
18.0
|
|
|
(2.3
|
)
|
|
65.3
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(19.9
|
)
|
|
6.7
|
|
|
0.7
|
|
|
(0.9
|
)
|
|
(13.4
|
)
|
||||||
Equity in net income (loss) of subsidiaries
|
63.9
|
|
|
10.6
|
|
|
—
|
|
|
0.1
|
|
|
(74.6
|
)
|
|
—
|
|
||||||
Net income (loss)
|
62.5
|
|
|
63.9
|
|
|
10.9
|
|
|
17.4
|
|
|
(76.0
|
)
|
|
78.7
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
16.2
|
|
|
—
|
|
|
16.2
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
62.5
|
|
|
63.9
|
|
|
10.9
|
|
|
1.2
|
|
|
(76.0
|
)
|
|
62.5
|
|
||||||
Other comprehensive income (loss)
|
(22.7
|
)
|
|
(22.7
|
)
|
|
—
|
|
|
0.3
|
|
|
22.4
|
|
|
(22.7
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
39.8
|
|
|
$
|
41.2
|
|
|
$
|
10.9
|
|
|
$
|
1.5
|
|
|
$
|
(53.6
|
)
|
|
$
|
39.8
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended March 31, 2016
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,468.2
|
|
|
$
|
58.7
|
|
|
$
|
118.1
|
|
|
$
|
(126.2
|
)
|
|
$
|
1,518.8
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
1,351.3
|
|
|
39.8
|
|
|
87.7
|
|
|
(113.3
|
)
|
|
1,365.5
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
1.3
|
|
|
64.5
|
|
|
2.6
|
|
|
6.5
|
|
|
(11.4
|
)
|
|
63.5
|
|
||||||
Depreciation
|
—
|
|
|
46.4
|
|
|
1.0
|
|
|
6.3
|
|
|
—
|
|
|
53.7
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
||||||
Total operating costs
|
1.3
|
|
|
1,450.3
|
|
|
43.4
|
|
|
100.5
|
|
|
(124.7
|
)
|
|
1,470.8
|
|
||||||
Operating profit (loss)
|
(1.3
|
)
|
|
17.9
|
|
|
15.3
|
|
|
17.6
|
|
|
(1.5
|
)
|
|
48.0
|
|
||||||
Interest expense
|
—
|
|
|
42.3
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
42.8
|
|
||||||
Other income (expense)
|
—
|
|
|
(4.1
|
)
|
|
2.0
|
|
|
1.4
|
|
|
—
|
|
|
(0.7
|
)
|
||||||
Income (loss) before income taxes
|
(1.3
|
)
|
|
(28.5
|
)
|
|
17.3
|
|
|
18.5
|
|
|
(1.5
|
)
|
|
4.5
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(6.1
|
)
|
|
6.6
|
|
|
0.2
|
|
|
(0.6
|
)
|
|
0.1
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(11.1
|
)
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||||
Net income (loss)
|
(12.4
|
)
|
|
(12.3
|
)
|
|
10.7
|
|
|
18.3
|
|
|
0.1
|
|
|
4.4
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
18.0
|
|
|
—
|
|
|
18.0
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
(12.4
|
)
|
|
(12.3
|
)
|
|
10.7
|
|
|
0.3
|
|
|
0.1
|
|
|
(13.6
|
)
|
||||||
Other comprehensive income (loss)
|
(1.0
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
1.5
|
|
|
(0.5
|
)
|
|
(1.0
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
(13.4
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
10.7
|
|
|
$
|
1.8
|
|
|
$
|
(0.4
|
)
|
|
$
|
(14.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
March 31, 2017
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
161.1
|
|
|
$
|
2.6
|
|
|
$
|
22.0
|
|
|
$
|
—
|
|
|
$
|
185.7
|
|
Accounts receivable, net
|
—
|
|
|
474.0
|
|
|
35.6
|
|
|
22.8
|
|
|
(7.9
|
)
|
|
524.5
|
|
||||||
Inventory, net
|
—
|
|
|
1,028.7
|
|
|
49.1
|
|
|
41.7
|
|
|
(13.7
|
)
|
|
1,105.8
|
|
||||||
Other current assets
|
—
|
|
|
103.6
|
|
|
1.2
|
|
|
2.9
|
|
|
—
|
|
|
107.7
|
|
||||||
Total current assets
|
—
|
|
|
1,767.4
|
|
|
88.5
|
|
|
89.4
|
|
|
(21.6
|
)
|
|
1,923.7
|
|
||||||
Property, plant and equipment
|
—
|
|
|
5,872.6
|
|
|
177.2
|
|
|
535.6
|
|
|
—
|
|
|
6,585.4
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,412.8
|
)
|
|
(89.3
|
)
|
|
(107.3
|
)
|
|
—
|
|
|
(4,609.4
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,459.8
|
|
|
87.9
|
|
|
428.3
|
|
|
—
|
|
|
1,976.0
|
|
||||||
Investment in subsidiaries
|
(3,238.0
|
)
|
|
1,442.5
|
|
|
—
|
|
|
68.3
|
|
|
1,727.2
|
|
|
—
|
|
||||||
Inter-company accounts
|
3,008.8
|
|
|
(4,126.0
|
)
|
|
1,489.6
|
|
|
(452.7
|
)
|
|
80.3
|
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
130.9
|
|
|
33.0
|
|
|
40.8
|
|
|
—
|
|
|
204.7
|
|
||||||
TOTAL ASSETS
|
$
|
(229.2
|
)
|
|
$
|
674.6
|
|
|
$
|
1,699.0
|
|
|
$
|
174.1
|
|
|
$
|
1,785.9
|
|
|
$
|
4,104.4
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
618.6
|
|
|
$
|
15.9
|
|
|
$
|
18.0
|
|
|
$
|
(1.0
|
)
|
|
$
|
651.5
|
|
Accrued liabilities
|
—
|
|
|
157.8
|
|
|
5.9
|
|
|
12.9
|
|
|
—
|
|
|
176.6
|
|
||||||
Current portion of long-term debt
|
—
|
|
|
168.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168.5
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
41.0
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
41.3
|
|
||||||
Total current liabilities
|
—
|
|
|
985.9
|
|
|
21.8
|
|
|
31.2
|
|
|
(1.0
|
)
|
|
1,037.9
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
1,684.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,684.5
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
1,074.4
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
1,077.6
|
|
||||||
Other non-current liabilities
|
—
|
|
|
148.1
|
|
|
1.6
|
|
|
0.2
|
|
|
—
|
|
|
149.9
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
3,892.9
|
|
|
23.4
|
|
|
34.6
|
|
|
(1.0
|
)
|
|
3,949.9
|
|
||||||
EXCHANGEABLE NOTES EXCHANGE FEATURE
|
—
|
|
|
19.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.7
|
|
||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
(229.2
|
)
|
|
(3,238.0
|
)
|
|
1,675.6
|
|
|
(224.5
|
)
|
|
1,786.9
|
|
|
(229.2
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
364.0
|
|
|
—
|
|
|
364.0
|
|
||||||
TOTAL EQUITY
|
(229.2
|
)
|
|
(3,238.0
|
)
|
|
1,675.6
|
|
|
139.5
|
|
|
1,786.9
|
|
|
134.8
|
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
(229.2
|
)
|
|
$
|
674.6
|
|
|
$
|
1,699.0
|
|
|
$
|
174.1
|
|
|
$
|
1,785.9
|
|
|
$
|
4,104.4
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
December 31, 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
|
$
|
—
|
|
|
$
|
147.9
|
|
|
$
|
4.4
|
|
|
$
|
20.9
|
|
|
$
|
—
|
|
|
$
|
173.2
|
|
Accounts receivable, net
|
—
|
|
|
400.4
|
|
|
30.3
|
|
|
19.6
|
|
|
(8.3
|
)
|
|
442.0
|
|
||||||
Inventory, net
|
—
|
|
|
1,038.1
|
|
|
45.3
|
|
|
42.0
|
|
|
(11.5
|
)
|
|
1,113.9
|
|
||||||
Other current assets
|
—
|
|
|
91.5
|
|
|
0.2
|
|
|
2.9
|
|
|
—
|
|
|
94.6
|
|
||||||
Total current assets
|
—
|
|
|
1,677.9
|
|
|
80.2
|
|
|
85.4
|
|
|
(19.8
|
)
|
|
1,823.7
|
|
||||||
Property, plant and equipment
|
—
|
|
|
5,857.9
|
|
|
175.9
|
|
|
535.2
|
|
|
—
|
|
|
6,569.0
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,365.8
|
)
|
|
(87.2
|
)
|
|
(101.6
|
)
|
|
—
|
|
|
(4,554.6
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,492.1
|
|
|
88.7
|
|
|
433.6
|
|
|
—
|
|
|
2,014.4
|
|
||||||
Investment in subsidiaries
|
(3,227.1
|
)
|
|
1,406.2
|
|
|
—
|
|
|
67.5
|
|
|
1,753.4
|
|
|
—
|
|
||||||
Inter-company accounts
|
2,954.9
|
|
|
(4,041.9
|
)
|
|
1,464.0
|
|
|
(458.4
|
)
|
|
81.4
|
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
126.0
|
|
|
33.0
|
|
|
38.9
|
|
|
—
|
|
|
197.9
|
|
||||||
TOTAL ASSETS
|
$
|
(272.2
|
)
|
|
$
|
660.3
|
|
|
$
|
1,665.9
|
|
|
$
|
167.0
|
|
|
$
|
1,815.0
|
|
|
$
|
4,036.0
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
557.7
|
|
|
$
|
16.7
|
|
|
$
|
15.0
|
|
|
$
|
0.5
|
|
|
$
|
589.9
|
|
Accrued liabilities
|
—
|
|
|
213.7
|
|
|
7.0
|
|
|
13.4
|
|
|
—
|
|
|
234.1
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
41.0
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
41.3
|
|
||||||
Total current liabilities
|
—
|
|
|
812.4
|
|
|
23.7
|
|
|
28.7
|
|
|
0.5
|
|
|
865.3
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
1,816.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,816.6
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
1,090.4
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
1,093.7
|
|
||||||
Other non-current liabilities
|
—
|
|
|
146.7
|
|
|
1.6
|
|
|
0.1
|
|
|
—
|
|
|
148.4
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
3,866.1
|
|
|
25.3
|
|
|
32.1
|
|
|
0.5
|
|
|
3,924.0
|
|
||||||
EXCHANGEABLE NOTES EXCHANGE FEATURE
|
—
|
|
|
21.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.3
|
|
||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
(272.2
|
)
|
|
(3,227.1
|
)
|
|
1,640.6
|
|
|
(228.0
|
)
|
|
1,814.5
|
|
|
(272.2
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
362.9
|
|
|
—
|
|
|
362.9
|
|
||||||
TOTAL EQUITY
|
(272.2
|
)
|
|
(3,227.1
|
)
|
|
1,640.6
|
|
|
134.9
|
|
|
1,814.5
|
|
|
90.7
|
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
(272.2
|
)
|
|
$
|
660.3
|
|
|
$
|
1,665.9
|
|
|
$
|
167.0
|
|
|
$
|
1,815.0
|
|
|
$
|
4,036.0
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Three Months Ended March 31, 2017
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(1.1
|
)
|
|
$
|
16.0
|
|
|
$
|
1.1
|
|
|
$
|
21.4
|
|
|
$
|
(1.1
|
)
|
|
$
|
36.3
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(30.6
|
)
|
|
(1.4
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(32.5
|
)
|
||||||
Other investing items, net
|
—
|
|
|
1.4
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.5
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(29.2
|
)
|
|
(1.4
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(31.0
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
400.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400.0
|
|
||||||
Redemption of long-term debt
|
—
|
|
|
(367.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(367.5
|
)
|
||||||
Debt issuance costs
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
||||||
Inter-company activity
|
3.6
|
|
|
1.6
|
|
|
(1.5
|
)
|
|
(4.8
|
)
|
|
1.1
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.1
|
)
|
|
—
|
|
|
(15.1
|
)
|
||||||
Other financing items, net
|
(2.5
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
||||||
Net cash flows from financing activities
|
1.1
|
|
|
26.4
|
|
|
(1.5
|
)
|
|
(19.9
|
)
|
|
1.1
|
|
|
7.2
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
13.2
|
|
|
(1.8
|
)
|
|
1.1
|
|
|
—
|
|
|
12.5
|
|
||||||
Cash and equivalents, beginning of period
|
—
|
|
|
147.9
|
|
|
4.4
|
|
|
20.9
|
|
|
—
|
|
|
173.2
|
|
||||||
Cash and equivalents, end of period
|
$
|
—
|
|
|
$
|
161.1
|
|
|
$
|
2.6
|
|
|
$
|
22.0
|
|
|
$
|
—
|
|
|
$
|
185.7
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Three Months Ended March 31, 2016
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(1.3
|
)
|
|
$
|
108.1
|
|
|
$
|
10.7
|
|
|
$
|
15.1
|
|
|
$
|
4.1
|
|
|
$
|
136.7
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(27.2
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(28.8
|
)
|
||||||
Other investing items, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(27.2
|
)
|
|
(0.7
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(28.9
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (payments) under credit facility
|
—
|
|
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
||||||
Inter-company activity
|
1.6
|
|
|
8.0
|
|
|
(9.9
|
)
|
|
4.4
|
|
|
(4.1
|
)
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.1
|
)
|
|
—
|
|
|
(21.1
|
)
|
||||||
Other financing items, net
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||||
Net cash flows from financing activities
|
1.3
|
|
|
(22.0
|
)
|
|
(9.9
|
)
|
|
(16.7
|
)
|
|
(4.1
|
)
|
|
(51.4
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
58.9
|
|
|
0.1
|
|
|
(2.6
|
)
|
|
—
|
|
|
56.4
|
|
||||||
Cash and equivalents, beginning of period
|
—
|
|
|
27.0
|
|
|
—
|
|
|
29.6
|
|
|
—
|
|
|
56.6
|
|
||||||
Cash and equivalents, end of period
|
$
|
—
|
|
|
$
|
85.9
|
|
|
$
|
0.1
|
|
|
$
|
27.0
|
|
|
$
|
—
|
|
|
$
|
113.0
|
|
|
|
Three Months Ended March 31,
|
||
Market
|
|
2017
|
|
2016
|
Automotive
|
|
67%
|
|
68%
|
Infrastructure and Manufacturing
|
|
15%
|
|
16%
|
Distributors and Converters
|
|
18%
|
|
16%
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income (loss) attributable to AK Holding
|
|
$
|
62.5
|
|
|
$
|
(13.6
|
)
|
Net income attributable to noncontrolling interests
|
|
16.2
|
|
|
18.0
|
|
||
Income tax expense (benefit)
|
|
(13.4
|
)
|
|
0.1
|
|
||
Interest expense
|
|
39.4
|
|
|
42.8
|
|
||
Interest income
|
|
(0.4
|
)
|
|
(0.3
|
)
|
||
Depreciation
|
|
55.1
|
|
|
53.7
|
|
||
Amortization
|
|
3.8
|
|
|
2.0
|
|
||
EBITDA
|
|
163.2
|
|
|
102.7
|
|
||
Less: EBITDA of noncontrolling interests (a)
|
|
20.3
|
|
|
21.6
|
|
||
Adjusted EBITDA (b)
|
|
$
|
142.9
|
|
|
$
|
81.1
|
|
Adjusted EBITDA margin
|
|
9.3
|
%
|
|
5.3
|
%
|
(a)
|
The reconciliation of EBITDA of noncontrolling interests to net income attributable to noncontrolling interests is as follows:
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income attributable to noncontrolling interests
|
|
$
|
16.2
|
|
|
$
|
18.0
|
|
Depreciation
|
|
4.1
|
|
|
3.6
|
|
||
EBITDA of noncontrolling interests
|
|
$
|
20.3
|
|
|
$
|
21.6
|
|
(b)
|
Included in adjusted EBITDA for the three months ended March 31, 2017, was
$16.3
of unrealized gains on iron ore derivatives. See Note
12
to the condensed consolidated financial statements for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
We expect relatively flat shipment levels overall in the second quarter compared to the first quarter of 2017.
|
2.
|
We currently estimate that the average selling price will be marginally higher than the first quarter. The increase in average selling price primarily reflects the impact of higher contract and spot market selling prices.
|
3.
|
We currently expect raw material costs to be slightly higher in the second quarter compared to the first quarter of 2017.
|
4.
|
Maintenance outage costs are expected to be approximately
$23.0
, compared to
$7.3
in the
first
quarter of
2017
, primarily due to planned maintenance outages at our Dearborn and Rockport Works.
|
5.
|
We expect to record additional expense of approximately
$3.4
in the second quarter of 2017 related to the call premium paid on the 2020 Notes Redemption and the write-off of unamortized debt discount and issuance costs related to the remaining 2020 Notes being redeemed in May 2017.
|
6.
|
As a result of these factors, we expect adjusted EBITDA margins to be slightly higher than the second quarter a year ago but down from the recent first quarter. Our adjusted EBITDA margin guidance excludes any impact of unrealized mark-to-market changes in our iron ore derivatives.
|
•
|
electrical steels for motors in the next generations of hybrid and electrical vehicles;
|
•
|
stainless steels with increased corrosion resistance for use in exhaust systems and other components associated with hotter-burning engines that provide increased fuel economy; and
|
•
|
Next-Generation and 3
rd
Gen AHSS with high strength and formability, which are intended to provide manufacturers significant opportunities for lightweighting, at a lower cost than aluminum.
|
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)
|
|||||
January 2017
|
|
295,070
|
|
|
$
|
9.68
|
|
|
—
|
|
|
||
February 2017
|
|
3,426
|
|
|
8.48
|
|
|
—
|
|
|
|||
March 2017
|
|
636
|
|
|
8.44
|
|
|
—
|
|
|
|||
Total
|
|
299,132
|
|
|
9.67
|
|
|
—
|
|
$
|
125.6
|
|
(a)
|
During the quarter, we repurchased common stock owned by participants under the terms of the AK Steel Holding Corporation Stock Incentive Plan. To pay federal, state and local taxes due upon the vesting of restricted stock or performance shares, 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.
|
|
|
|
AK STEEL HOLDING CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
April 28, 2017
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
|
|
|
|
Dated:
|
April 28, 2017
|
|
/s/ Gregory A. Hoffbauer
|
|
|
|
Gregory A. Hoffbauer
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
1 Year AK Steel Chart |
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