AK Steel Reports Financial Results for Third Quarter of 2012

         AK Steel Reports Financial Results for Third Quarter of 2012

PR Newswire

WEST CHESTER, Ohio, Oct. 23, 2012

WEST CHESTER, Ohio, Oct. 23, 2012 /PRNewswire/ --AK Steel (NYSE: AKS) today
reported a net loss of $60.9 million, or $0.55 per diluted share of common
stock, for the third quarter of 2012, compared to a net loss of $3.5 million,
or $0.03 per diluted share, for the third quarter of 2011. The 2012 third
quarter results include a non-cash income tax expense of $33.1 million, or
$0.30 per diluted share, as a result of the change in a tax valuation
allowance. The company reported a loss before income taxes of $28.7 million
for the third quarter of 2012, compared to a loss before income taxes of $6.8
million for the third quarter of 2011.

Net sales for the third quarter of 2012 were $1,463.5 million on shipments of
1,363,500 tons, compared to net sales of $1,585.8 million on shipments of
1,368,800 tons for the year-ago third quarter and net sales of $1,538.4
million on shipments of 1,335,800 tons for the second quarter of 2012. The
company said its average selling price for the third quarter of 2012 was
$1,073 per ton, a 7% decrease from both the second quarter of 2012 and the
third quarter of 2011. The lower average selling price for the third quarter
2012 compared to the second quarter of 2012 was primarily due to lower spot
market prices for carbon steel products, reduced raw material surcharges and a
lower value-added product mix.

The company reported adjusted EBITDA (as defined in the table below) of $27.2
million, or $20 per ton, for the third quarter of 2012 compared to adjusted
EBITDA of $59.3 million, or $43 per ton, for the third quarter of 2011. The
adjusted EBITDA excludes EBITDA of noncontrolling interests as shown in the
financial table included with this news release. Included in the results for
the third quarter of 2012 were planned major maintenance outage costs of $28.5
million, primarily for outages at the company's Ashland Works blast furnace
and Middletown Works hot strip mill, compared to outage costs of $1.7 million
for the third quarter of 2011. The 2012 third quarter results include a LIFO
credit of $27.5 million, compared to a LIFO credit of $9.5 million in the
third quarter of 2011 and a LIFO credit of $18.3 million for the second
quarter of 2012.

"Challenging domestic and global economic conditions continue to weigh on
shipping volumes and prices," said James L. Wainscott, Chairman, President and
CEO of AK Steel. "Additionally, while we expect to enjoy lower raw material
costs in the future, we are still working through some higher cost raw
material inventories."

The company ended the third quarter of 2012 with $47.1 million of cash and
cash equivalents and $557.8 million of availability under the company's
revolving credit facility, for total liquidity of $604.9 million.

Nine-Month Results
For the first nine months of 2012, the company reported a net loss of $796.9
million, or $7.21 per diluted share, which includes income tax expense of
$767.3 million, almost entirely due to a non-cash change in a tax valuation
allowance. For the corresponding 2011 period, the company reported net income
of $38.3 million, or $0.35 per diluted share.

The company reported a loss before income taxes of $9.7 million for the first
nine months of 2012, compared to income before income taxes of $64.4 million
for the first nine months of 2011.

Net sales for the first nine months of 2012 were $4,510.6 million compared to
$4,958.8 million for the first nine months of 2011. Shipments for the first
nine months of 2012 were 4,025,200 tons compared to 4,288,900 tons for the
first nine months of 2011.

The company reported adjusted EBITDA of $164.4 million, or $41 per ton, for
the first nine months of 2012, compared to adjusted EBITDA of $253.6 million,
or $59 per ton, for the same period of 2011. Earnings for the first nine
months of 2012 were negatively impacted by the decrease in sales along with
higher coke costs, which were partially offset by decreases in costs for
carbon scrap and energy.

Fourth Quarter 2012 Outlook
Consistent with its current practice, the company said that it will not
provide detailed guidance for its fourth quarter results at this time. The
company said that it intends to provide such detailed fourth quarter guidance
later during the quarter. However, in advance of that guidance, the company
noted that, based on current conditions, it expects to incur a net loss for
the fourth quarter of 2012. The company notes that this anticipated net loss
includes a non-cash tax expense for the fourth quarter as a result of an
anticipated change in its tax valuation allowance, which the company expects
to incur regardless of its fourth quarter pre-tax financial results.

Safe Harbor Statement
The statements in this release with respect to future results reflect
management's estimates and beliefs and are intended to be, and hereby are
identified as "forward-looking statements" for purposes of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Words such
as "expects," "anticipates," "believes," "intends," "plans," "estimates" and
other similar references to future periods typically identify such
forward-looking statements.

The company cautions readers that such forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from those currently expected by management, including those risks and
uncertainties discussed in the company's Annual Report on Form 10-K for the
year ended December 31, 2011, as updated in subsequent Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K filed with or furnished to the
Securities and Exchange Commission. Except as required by law, the company
disclaims any obligation to update any forward-looking statements to reflect
future developments or events.

AK Steel
AK Steel produces flat-rolled carbon, stainless and electrical steels,
primarily for automotive, infrastructure and manufacturing, construction and
electrical power generation and distribution markets. The company employs
about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville,
Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its
corporate headquarters in West Chester, Ohio. Additional information about AK
Steel is available on the company's web site at www.aksteel.com.

AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 men and
women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces
carbon and stainless electric resistance welded (ERW) tubular steel products
for truck, automotive and other markets. Additional information about AK Tube
LLC is available on its web site at www.aktube.com.

AK Coal Resources, Inc., another wholly-owned subsidiary of AK Steel, owns or
leases metallurgical coal reserves in Somerset County, Pennsylvania. AK Steel
also owns 49.9% of Magnetation LLC, a joint venture headquartered in Grand
Rapids, Minnesota, which produces iron ore concentrate from previously mined
ore reserves.

AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and shares in millions, except per share and per ton data)
                                    Three Months Ended    Nine Months Ended
                                    September30,         September30,
                                    2012       2011       2012       2011
Shipments (000 tons)                1,363.5    1,368.8    4,025.2    4,288.9
Selling price per ton               $ 1,073    $ 1,158    $ 1,120    $ 1,151
Net sales                           $ 1,463.5  $ 1,585.8  $ 4,510.6  $ 4,958.8
Cost of products sold               1,385.0    1,482.6    4,186.4    4,585.2
Selling and administrative          51.9       54.6       158.5      161.6
expenses
Depreciation                        48.2       46.1       144.9      139.3
Pension and OPEB expense (income)   (9.6)      (8.9)      (28.0)     (26.7)
Total operating costs               1,475.5    1,574.4    4,461.8    4,859.4
Operating profit (loss)             (12.0)     11.4       48.8       99.4
Interest expense                    22.4       13.5       60.4       33.7
Other income (expense)              5.7        (4.7)      1.9        (1.3)
Income (loss) before income taxes   (28.7)     (6.8)      (9.7)      64.4
Income tax provision (benefit)      23.8       (0.7)      767.3      29.6
Net income (loss)                   (52.5)     (6.1)      (777.0)    34.8
Less: Net income (loss)
attributable to noncontrolling      8.4        (2.6)      19.9       (3.5)
interests
Net income (loss) attributable to   $ (60.9)   $ (3.5)    $ (796.9)  $ 38.3
AK Steel Holding Corporation
Basic and diluted earnings per
share:
Net income (loss)
attributable to AK Steel Holding    $ (0.55)   $ (0.03)   $ (7.21)   $ 0.35
Corporation
Weighted-average shares
outstanding:
 Basic                            110.2      109.8      110.1      109.8
 Diluted                          110.2      109.8      110.1      109.9
Dividends declared and paid per     $ -        $ 0.05     $ 0.10     $ 0.15
share



AK STEEL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions, except per share amounts)
                                              September30,  December31, 2011
                                              2012
ASSETS
 Current assets:
 Cash and cash equivalents                   $   47.1       $    42.0
 Accounts receivable, net                    565.6          564.2
 Inventory, net                              727.8          418.7
 Other current assets                        66.4           249.5
 Total current assets                     1,406.9        1,274.4
Property, plant and equipment                 5,984.5        5,967.2
Accumulated depreciation                      (3,942.5)      (3,797.0)
Property, plant and equipment, net            2,042.0        2,170.2
Other non-current assets                      471.8          1,005.3
TOTAL ASSETS                                  $   3,920.7    $    4,449.9
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
 Short-term borrowings under credit          $   42.0       $    250.0
facility
 Accounts payable                            603.2          583.6
 Accrued liabilities                         185.6          172.8
 Current portion of long-term debt           0.7            0.7
 Current portion of pension and other        125.4          130.0
postretirement benefit obligations
 Total current liabilities                956.9          1,137.1
Long-term debt, including $400.0 of credit    1,349.5        650.0
facility borrowings at Sept. 30, 2012
Pension and other postretirement benefit      1,503.4        1,744.8
obligations
Other non-current liabilities                 524.8          540.8
TOTAL LIABILITIES                             4,334.6        4,072.7
Equity (deficit):
 Common stock, authorized 200,000,000
shares of $.01 par value each;
 issued 123,779,646 and 123,229,210 shares  1.2            1.2
in 2012 and 2011; outstanding
 110,630,790 and 110,284,228 shares in
2012 and 2011
 Additional paid-in capital                  1,933.7        1,922.2
 Treasury stock, common shares at cost,
13,148,856 and 12,944,982 shares              (173.3)        (171.6)
 in 2012 and 2011
 Accumulated deficit                         (2,173.9)      (1,366.0)
 Accumulated other comprehensive income      (22.2)         2.7
(loss)
 TOTAL STOCKHOLDERS' EQUITY (DEFICIT)     (434.5)        388.5
 Noncontrolling interests                    20.6           (11.3)
 TOTAL EQUITY (DEFICIT)                      (413.9)        377.2
TOTAL LIABILITIES AND EQUITY (DEFICIT)        $   3,920.7    $    4,449.9





AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)
                                                          Nine Months Ended
                                                          September30,
                                                          2012        2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                       $ (777.0)   $  34.8
 Depreciation                                            134.7       139.3
 Depreciation-SunCoke Middletown                         10.2        -
 Amortization                                            12.8        11.7
 Deferred income taxes                                   753.4       28.2
 Pension and OPEB expense (income)                       (28.0)      (26.7)
 Contributions to pension trust                          (170.2)     (170.0)
 Contributions to Middletown and Butler retirees VEBAs   (31.7)      (87.6)
 Other postretirement benefit payments                   (48.3)      (56.7)
 Working capital                                         (217.1)     (202.5)
 Working capital-SunCoke Middletown                      (29.8)      (11.1)
 Other operating items, net                              3.1         (14.8)
 Net cash flows from operating activities             (387.9)     (355.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital investments                                     (31.8)      (88.0)
 Capital investments-SunCoke Middletown                  (17.5)      (163.2)
 Investments in acquired businesses                      (38.1)      -
 Other investing items, net                              4.6         0.7
 Net cash flows from investing activities             (82.8)      (250.5)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowings under credit facility                    192.0       295.0
 Proceeds from issuance of long-term debt                373.3       -
 Redemption of long-term debt                            (73.9)      (0.5)
 Debt issuance costs                                     (8.6)       (9.2)
 Proceeds from exercise of stock options                 -           0.2
 Purchase of treasury stock                              (1.7)       (1.4)
 Common stock dividends paid                             (11.0)      (16.5)
 SunCoke Middletown advances from noncontrolling         5.5         180.3
interest owner
 Other financing items, net                              0.2         (0.1)
 Net cash flows from financing activities             475.8       447.8
Net increase (decrease) in cash and cash equivalents      5.1         (158.1)
Cash and cash equivalents, beginning of period            42.0        216.8
Cash and cash equivalents, end of period                  $ 47.1      $  58.7



AK STEEL HOLDING CORPORATION
ADJUSTED EBITDA
(Unaudited)
(Dollars in millions)


In certain of its disclosures in this news release, the company has reported
adjusted EBITDA because management believes that it enhances the understanding
of the company's financial results. EBITDA is an acronym for earnings before
interest, taxes, depreciation and amortization. It is a metric that is
sometimes used to compare the results of companies by removing the effects of
different factors that might otherwise make comparisons inaccurate or
inappropriate. For purposes of this news release, the company has made an
adjustment to EBITDA in order to exclude the effect of noncontrolling
interests. For purposes of this report, "Adjusted EBITDA" is defined as net
income (loss) attributable to AK Holding, plus income tax provision (benefit),
net interest expense, depreciation and amortization. Adjusted EBITDA is
presented because the company believes it is a useful indicator of its
performance and ability to meet debt service and capital expenditure
requirements. It is not, however, intended as an alternative measure of
operating results or cash flow from operations as determined in accordance
with generally accepted accounting principles. Adjusted EBITDA is not
necessarily comparable to similarly titled measures used by other companies.

Neither current shareholders nor potential investors in the company's
securities should rely on adjusted EBITDA as a substitute for any GAAP
financial measure and the company encourages investors and potential investors
to review the following reconciliation of net income (loss) attributable to AK
Holding to adjusted EBITDA.


                      Three Months Ended           Nine Months Ended
                      September30,                September30,
                      2012           2011          2012            2011
Net income (loss)
attributable to AK    $  (60.9)      $  (3.5)      $  (796.9)      $  38.3
Holding
Noncontrolling        8.4            (2.6)         19.9            (3.5)
interests
Income tax
provision             23.8           (0.7)         767.3           29.6
(benefit)
Interest expense      22.4           13.5          60.4            33.7
Interest income       (0.1)          (0.2)         (0.3)           (0.4)
Depreciation          48.2           46.1          144.9           139.3
Amortization          2.2            2.6           11.4            11.1
EBITDA                44.0           55.2          206.7           248.1
Less: EBITDA of
noncontrolling        16.8           (4.1)         42.3            (5.5)
interests
Adjusted EBITDA       $  27.2        $  59.3       $  164.4        $  253.6



AK STEEL HOLDING CORPORATION
STEEL SHIPMENTS
(Unaudited)
(Tons in thousands)
                                    Three Months Ended  Nine Months Ended
                                    September30,       September30,
                                    2012       2011     2012      2011
Tons Shipped by Product
Stainless/electrical                218.2      229.3    660.6     699.4
Coated                              572.5      577.2    1,753.6   1,830.3
Cold-rolled                         285.5      278.3    848.6     941.2
Tubular                             31.5       32.4     103.5     99.4
Subtotal value-added shipments      1,107.7    1,117.2  3,366.3   3,570.3
Hot-rolled                          211.2      222.6    553.3     622.2
Secondary                           44.6       29.0     105.6     96.4
Subtotal non value-added shipments  255.8      251.6    658.9     718.6
Total shipments                     1,363.5    1,368.8  4,025.2   4,288.9
Shipments by Product (%)
Stainless/electrical                16.0%      16.7%    16.4%     16.3%
Coated                              42.0%      42.2%    43.6%     42.7%
Cold-rolled                         20.9%      20.3%    21.1%     22.0%
Tubular                             2.3%       2.4%     2.6%      2.3%
Subtotal value-added shipments      81.2%      81.6%    83.7%     83.3%
Hot-rolled                          15.5%      16.3%    13.7%     14.5%
Secondary                           3.3%       2.1%     2.6%      2.2%
Subtotal non value-added shipments  18.8%      18.4%    16.3%     16.7%
Total shipments                     100.0%     100.0%   100.0%    100.0%



SOURCE AK Steel

Website: http://www.aksteel.com
Contact: Media Barry L. Racey, Director, Government and Public Relations,
+1-513-425-2749; Investors: Albert E. Ferrara, Jr., Senior Vice President,
Corporate Strategy and Investor Relations, +1-513-425-2888
 
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