AK Steel Provides Fourth Quarter 2013 Guidance
WEST CHESTER, Ohio, Dec. 18, 2013
WEST CHESTER, Ohio, Dec. 18, 2013 /PRNewswire/ --AK Steel (NYSE: AKS) today
provided guidance for its fourth quarter of 2013 financial results. AK Steel
said it expects to realize net income of $0.02 to $0.06 per diluted share of
common stock, excluding the effects of a potential non-cash income tax benefit
related to pension and other postretirement benefit gains, as described below.
AK Steel expects shipments of approximately 1,400,000 tons in the fourth
quarter of 2013 compared to shipments of 1,242,400 tons in the third quarter
of 2013, an increase of approximately 13%. AK Steel said that the company has
seen stronger demand in the fourth quarter compared to the third quarter,
particularly in carbon sales to the spot market. Additionally, the expected
increase in shipments from the third quarter reflects the company's recovery
from the previously disclosed unplanned Middletown Works blast furnace outage.
The company expects its average selling price for the fourth quarter of 2013
to decrease approximately 4% from its average selling price of $1,071 per ton
for the third quarter of 2013. The expected decrease in average selling price
from the third quarter is primarily due to a lower proportion of value-added
shipments to the spot market in the fourth quarter.
The company said that it expects to incur lower production costs in the fourth
quarter, primarily as a result of lower costs for iron ore pellets.
Additionally, the company expects total planned maintenance outage costs to be
about $2 million in the fourth quarter, compared to $4.2 million incurred in
the third quarter.
Unplanned Blast Furnace Outage Effect and Insurance Recovery
The company projects expense for the fourth quarter of approximately $5
million related to the Middletown Works unplanned blast furnace outage, net of
insurance recoveries. As previously disclosed, the company's losses
attributable to the unplanned blast furnace outage are partially covered by
property damage and business interruption insurance. The company continues to
work with its insurance underwriters on the claim.
AK Steel said that it expects to record a non-cash income tax expense of
approximately $2million, or $0.01 per diluted share, for the fourth quarter
of 2013, excluding any potential income tax benefit associated with the normal
year-end measurement of pension and other postretirement benefit plan
liabilities. In the third quarter of 2013, the company recorded income tax
expense of $6.7 million, or $0.05 per diluted share. The company's income tax
provision is primarily related to changes in the company's LIFO reserve, which
results in a tax valuation allowance adjustment related to the company's
deferred tax assets. Changes at year-end in the company's LIFO reserve could
affect the current tax estimate. In certain circumstances, the company may be
required to record an income tax benefit if a significant reduction of the
pension and other postretirement benefit plan liabilities occurs at year-end.
The amount of this income tax benefit is subject to changes in these
liabilities caused by changes in assumptions and events and circumstances
beyond the company's control, primarily changes in interest rates, performance
of the financial markets, healthcare cost trends and mortality and retirement
experiences, and thus is impossible to reliably forecast or predict at this
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, including the projected loss related to the
unplanned blast furnace outage and the amount of its related insurance
recoveries, 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, 2012, 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 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, produces
metallurgical coal from 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
SOURCE AK Steel
Contact: Media - Michael P. Wallner, General Manager, Communications and PR
(513) 425-2688; Investors - Roger K. Newport, Vice President, Finance and
Chief Financial Officer (513) 425-5270
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