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AK Steel Reports Fourth Quarter And Full-Year 2012 Financial Results

     AK Steel Reports Fourth Quarter And Full-Year 2012 Financial Results

4th Quarter 2012 Performance Summary

- Shipments of 1,406,100 tons

- Sales of $1.42 billion with an average selling price of $1,011 per ton

- Adjusted net loss of $36.6 million, or $0.30 per diluted share, and net loss
of $230.4 million, or $1.89 per diluted share

- Strong liquidity of $1.1 billion

PR Newswire

WEST CHESTER, Ohio, Jan. 29, 2013

WEST CHESTER, Ohio, Jan.29, 2013 /PRNewswire/ --AK Steel (NYSE: AKS) today
reported a net loss of $230.4 million, or $1.89 per diluted share of common
stock, for the fourth quarter of 2012, compared to a net loss of $193.9
million, or $1.76 per diluted share, for the fourth quarter of 2011. The
fourth quarter 2012 results include a pre-tax pension corridor charge of
$157.3 million, or $0.80 per diluted share, compared to a pre-tax pension
corridor charge of $268.1 million, or $1.50 per diluted share, for the fourth
quarter of 2011. Neither charge had any current cash flow impact. The fourth
quarter 2012 results also include a non-cash income tax charge of $96.4
million, or $0.79 per diluted share, as a result of a change in a deferred tax
asset valuation allowance, which includes income taxes associated with the
pension corridor charge. Excluding these pension corridor and income tax
charges, and as reconciled below, AK Steel had an adjusted net loss of $36.6
million, or $0.30 per diluted share, for the fourth quarter of 2012.

Net sales for the fourth quarter of 2012 were $1.42 billion on shipments of
1,406,100 tons, compared to sales of $1.51 billion on shipments of 1,409,900
tons for the year-ago fourth quarter. The company said its average selling
price for the fourth quarter of 2012 was $1,011 per ton, approximately 6%
lower than the $1,070 per ton reported for the fourth quarter of 2011 and the
$1,073 per ton reported for the third quarter of 2012. The lower average
selling price for the fourth quarter of 2012 compared to the fourth quarter of
2011 was primarily due to lower spot market prices for carbon steel products
and reduced raw material surcharges. The lower average selling price for the
fourth quarter of 2012 compared to the third quarter of 2012 was primarily due
to lower spot market prices for carbon steel products, reduced raw material
surcharges and a less rich value-added product mix.

The company reported adjusted EBITDA (as defined in the "Use of Non-GAAP
Financial Measures" section below) of $16.8 million, or $12 per ton, for the
fourth quarter of 2012 compared to $12.1 million, or $9 per ton, for the
fourth quarter of 2011. The 2012 fourth quarter results include a LIFO credit
of $30.8 million, compared to a LIFO credit of $44.1 million for the fourth
quarter of 2011.

"Sluggish economic conditions impacted global demand and selling prices for
steel products during the fourth quarter and the full-year of 2012," said
James L. Wainscott, Chairman, President and Chief Executive Officer of AK
Steel. "That said, AK Steel remains well-positioned to take advantage of
market opportunities with its high quality, valued-added steels as the economy
continues to slowly recover. Taking everything into account, we expect a
significantly better first quarter and full-year 2013."

The company ended 2012 with total liquidity of $1,098.9 million, consisting of
$227.0 million of cash and cash equivalents and $871.9 million of availability
under the company's revolving credit facility. There were no outstanding
borrowings under the company's revolving credit facility as of the end of
2012. Liquidity nearly doubled from the end of the third quarter of 2012 as a
result of the successful completion of several capital market transactions
during the fourth quarter of 2012.

Full-Year 2012 Results

For the full year, AK Steel reported a net loss of $1,027.3 million, or $9.06
per diluted share, compared to a net loss of $155.6 million, or $1.41 per
diluted share for 2011. These results include the pre-tax pension corridor
charges described above of $157.3 million, or $0.86 per diluted share, for
2012, and $268.1 million, or $1.50 per diluted share, for 2011. The 2012
results also include non-cash income tax charges of $865.5 million, or $7.63
per diluted share, as a result of deferred tax asset valuation allowance
changes. Neither charge had any current cash flow impact. Excluding these
pension corridor and income tax charges, and as reconciled below, AK Steel had
an adjusted net loss of $64.4 million, or $0.57 per diluted share, for the
full year 2012.

Sales for 2012 were $5.93 billion, a decrease of 8% compared to $6.47 billion
for 2011. Shipments for 2012 were 5,431,300 tons, a decrease of 5% compared to
5,698,800 tons in 2011 as a result of a weaker carbon spot market. The company
said its average selling price for full-year 2012 was $1,092 per ton,
approximately 3% lower than the $1,131 per ton reported for 2011. The lower
average selling price for full-year 2012 was primarily due to lower spot
market selling prices and reduced raw material surcharges. The company
reported adjusted EBITDA of $181.2 million, or $33 per ton, for 2012 compared
to adjusted EBITDA of $265.7 million, or $47 per ton, for 2011.

Earnings for 2012 were negatively affected compared to 2011 by the decrease in
shipments and spot market selling prices along with higher coke costs. This
negative impact was partially offset by decreases in costs for carbon scrap,
iron ore and energy.

Use of Non-GAAP Financial Measures

In certain of its disclosures in this news release, the company has reported
adjusted EBITDA and adjusted net income (loss) that excludes the effects of a
pension corridor charge and a deferred tax asset valuation allowance charge.
The company has made these adjustments because management believes that doing
so 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 and pension corridor charges. 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.

Management believes that reporting adjusted net income (as a total and on a
per share basis) with the pension corridor charge and charge for deferred tax
asset valuation allowance excluded more clearly reflects the company's current
operating results and provides investors with a better understanding of the
company's overall financial performance. In addition, the adjusted results,
although not a financial measure under GAAP, facilitate the ability to analyze
the company's financial results in relation to those of its competitors and to
the company's prior financial performance by excluding items which otherwise
would distort the comparison. Also, although the tax valuation charge reduces
reported net income, it is a non-cash charge.

Management views the reported results of Adjusted EBITDA and adjusted net
income (loss) as important operating performance measures and believes that
the GAAP financial measure most directly comparable is net income (loss) (as a
total and on a per share basis). Adjusted EBITDA and adjusted net income
(loss) are used by management as a supplemental financial measure to evaluate
the performance of the business. Management believes that these non-GAAP
measures, when analyzed in conjunction with the company's GAAP results and the
accompanying reconciliations, provides additional insight into the financial
trends of the company's business versus the GAAP results alone.

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

The following schedules reflect the reconciliations of the non-GAAP quarterly
financial measures discussed in this news release:



Reconciliation of Adjusted EBITDA
(dollars in millions)         Three Months Ended      Twelve Months Ended
                              December 31,            December 31,
                              2012        2011        2012          2011
Net income (loss)             $ (230.4)   $ (193.9)   $ (1,027.3)   $ (155.6)
attributable to AK Holding
Noncontrolling interests      8.8         (1.0)       28.7          (4.5)
Income tax provision          22.7        (123.6)     790.0         (94.0)
(benefit)
Interest expense              26.3        13.8        86.7          47.5
Interest income               (0.1)       (0.1)       (0.4)         (0.5)
Depreciation                  47.1        45.7        192.0         185.0
Amortization                  2.8         3.0         14.2          14.1
EBITDA                        (122.8)     (256.1)     83.9          (8.0)
Less: EBITDA of               17.7        (0.1)       60.0          (5.6)
noncontrolling interests
Pension corridor charge       157.3       268.1       157.3         268.1
Adjusted EBITDA               $ 16.8      $ 12.1      $ 181.2       $ 265.7



Reconciliation of Net Income (Loss)
(dollars in millions, except    Three Months Ended December  Year Ended
per share data)                 31, 2012                     December 31, 2012
Reconciliation to Net Income
(Loss) Attributable to AK
Steel Holding
Adjusted net income (loss)
attributable to AK Steel        $       (36.6)               $   (64.4)
Holding Corporation
Pension corridor charge (net    (97.4)                       (97.4)
of tax)
Non-cash income tax charge
from change in deferred tax     (96.4)                       (865.5)
asset valuation allowance
Net income (loss) attributable
to AK Steel Holding             $       (230.4)              $   (1,027.3)
Corporation, as reported
Reconciliation to Basic and
Diluted Earnings (Loss) per
Share
Adjusted basic and diluted      $       (0.30)               $   (0.57)
earnings (loss) per share
Pension corridor charge         (0.80)                       (0.86)
Non-cash income tax charge
from change in deferred tax     (0.79)                       (7.63)
asset valuation allowance
Basic and diluted earnings      $       (1.89)               $   (9.06)
(loss) per share, as reported

First Quarter 2013 Outlook

Consistent with its current practice, the company said that it will provide
detailed guidance for its first quarter in March.

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
our 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 6,100 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, controls
and is developing 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      Twelve Months Ended
                              December 31,            December 31,
                              2012        2011        2012          2011
Shipments (000 tons)          1,406.1     1,409.9     5,431.3       5,698.8
Selling price per ton         $ 1,011     $ 1,070     $ 1,092       $ 1,131
Net sales                     $ 1,423.1   $ 1,509.2   $ 5,933.7     $ 6,468.0
Cost of products sold         1,352.7     1,451.6     5,539.1       6,036.8
Selling and administrative    50.2        53.8        208.7         215.4
expenses
Depreciation                  47.1        45.7        192.0         185.0
Pension and OPEB expense      (7.3)       (9.3)       (35.3)        (36.0)
(income)
Pension corridor charge       157.3       268.1       157.3         268.1
Total operating costs         1,600.0     1,809.9     6,061.8       6,669.3
Operating profit (loss)       (176.9)     (300.7)     (128.1)       (201.3)
Interest expense              26.3        13.8        86.7          47.5
Other income (expense)        4.3         (4.0)       6.2           (5.3)
Income (loss) before income   (198.9)     (318.5)     (208.6)       (254.1)
taxes
Income tax provision          22.7        (123.6)     790.0         (94.0)
(benefit)
Net income (loss)             (221.6)     (194.9)     (998.6)       (160.1)
Less: Net income (loss)
attributable to               8.8         (1.0)       28.7          (4.5)
noncontrolling interests
Net income (loss)
attributable to AK Steel      $ (230.4)   $ (193.9)   $ (1,027.3)   $ (155.6)
Holding Corporation
Basic and diluted earnings
per share:
Net income (loss)
attributable to AK Steel      $ (1.89)    $ (1.76)    $ (9.06)      $ (1.41)
Holding Corporation
Weighted-average shares
outstanding:
Basic                         121.3       109.8       113.0         109.8
Diluted                       121.3       109.8       113.0         109.8
Dividends declared and paid   $ —         $ 0.05      $ 0.10        $ 0.20
per share



AK STEEL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions, except per share amounts)
                                          December 31, 2012  December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents                 $    227.0         $    42.0
Accounts receivable, net                  473.9              564.2
Inventory, net                            609.2              418.7
Other current assets                      132.6              249.5
Total current assets                      1,442.7            1,274.4
Property, plant and equipment             5,943.9            5,967.2
Accumulated depreciation                  (3,931.6)          (3,797.0)
Property, plant and equipment, net        2,012.3            2,170.2
Other non-current assets                  448.1              1,005.3
TOTAL ASSETS                              $    3,903.1       $    4,449.9
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Short-term borrowings under credit        $    —             $    250.0
facility
Accounts payable                          538.3              583.6
Accrued liabilities                       164.8              172.8
Current portion of long-term debt         0.7                0.7
Current portion of pension and other      108.6              130.0
postretirement benefit obligations
Total current liabilities                 812.4              1,137.1
Long-term debt                            1,411.2            650.0
Pension and other postretirement benefit  1,661.7            1,744.8
obligations
Other non-current liabilities (1)         108.8              540.8
TOTAL LIABILITIES                         3,994.1            4,072.7
Equity (deficit):
Common stock, authorized 200,000,000
shares of $.01 par value each; issued
149,094,571 and 123,229,210 shares in     1.5                1.2
2012 and 2011; outstanding 135,944,172
and 110,284,228 shares in 2012 and 2011
Additional paid-in capital                2,069.7            1,922.2
Treasury stock, common shares at cost,
13,150,399 and 12,944,982 shares in 2012  (173.3)            (171.6)
and 2011
Accumulated deficit                       (2,404.3)          (1,366.0)
Accumulated other comprehensive income    1.1                2.7
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)      (505.3)            388.5
Noncontrolling interests (1)              414.3              (11.3)
TOTAL EQUITY (DEFICIT)                    (91.0)             377.2
TOTAL LIABILITIES AND EQUITY (DEFICIT)    $    3,903.1       $    4,449.9

(1) As of December 31, 2012, the advances in SunCoke Middletown were
classified as noncontrolling interests as a result of financing activities
performed by its parent, SunCoke Energy, Inc. This was included in other
non-current liabilities in the prior period.



AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)
                                                        Twelve Months Ended
                                                        December 31,
                                                        2012        2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                       $ (998.6)   $ (160.1)
Pension corridor charge                                 157.3       268.1
Depreciation                                            178.4       183.6
Depreciation—SunCoke Middletown                         13.6        1.4
Amortization                                            17.0        15.5
Deferred income taxes                                   771.2       (92.7)
Pension and OPEB expense (income)                       (35.3)      (36.0)
Contributions to pension trust                          (170.2)     (170.0)
Contributions to Middletown and Butler retirees VEBAs   (31.7)      (87.6)
Other postretirement payments                           (64.1)      (75.5)
Working capital                                         (113.7)     1.0
Working capital—SunCoke Middletown                      (4.4)       (9.3)
Other operating items, net                              9.7         (18.9)
Net cash flows from operating activities                (270.8)     (180.5)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital investments                                     (45.5)      (101.1)
Capital investments—SunCoke Middletown                  (18.6)      (195.0)
Investments in acquired businesses                      (60.6)      (125.4)
Other investing items, net                              6.1         1.3
Net cash flows from investing activities                (118.6)     (420.2)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under credit facility       (250.0)     250.0
Proceeds from issuance of long-term debt                873.3       —
Redemption of long-term debt                            (74.0)      (0.7)
Proceeds from issuance of common stock                  96.4        —
Debt issuance costs                                     (22.3)      (10.1)
Proceeds from exercise of stock options                 —           0.2
Purchase of treasury stock                              (1.7)       (1.5)
Common stock dividends paid                             (11.0)      (22.0)
SunCoke Middletown advances from (repayments to)        (36.6)      210.7
noncontrolling interest owner
Other financing items, net                              0.3         (0.7)
Net cash flows from financing activities                574.4       425.9
Net increase (decrease) in cash and cash equivalents    185.0       (174.8)
Cash and cash equivalents, beginning of period          42.0        216.8
Cash and cash equivalents, end of period                $ 227.0     $ 42.0



AK STEEL HOLDING CORPORATION
STEEL SHIPMENTS
(Unaudited)
(Tons in thousands)
                                    Three Months Ended    Twelve Months Ended
                                    December 31,          December 31,
                                    2012       2011       2012       2011
Tons Shipped by Product
Stainless/electrical                188.5      200.9      849.1      900.3
Coated                              655.8      611.2      2,409.4    2,441.5
Cold-rolled                         290.1      262.9      1,138.7    1,204.1
Tubular                             28.5       30.7       132.0      130.1
Subtotal value-added shipments      1,162.9    1,105.7    4,529.2    4,676.0
Hot-rolled                          214.3      251.3      767.6      873.5
Secondary                           28.9       52.9       134.5      149.3
Subtotal non value-added shipments  243.2      304.2      902.1      1,022.8
Total shipments                     1,406.1    1,409.9    5,431.3    5,698.8
Shipments by Product (%)
Stainless/electrical                13.4    %  14.2    %  15.6    %  15.8    %
Coated                              46.6    %  43.4    %  44.4    %  42.9    %
Cold-rolled                         20.6    %  18.6    %  21.0    %  21.1    %
Tubular                             2.0     %  2.2     %  2.4     %  2.3     %
Subtotal value-added shipments      82.6    %  78.4    %  83.4    %  82.1    %
Hot-rolled                          15.2    %  17.8    %  14.1    %  15.3    %
Secondary                           2.2     %  3.8     %  2.5     %  2.6     %
Subtotal non value-added shipments  17.4    %  21.6    %  16.6    %  17.9    %
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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