AK Steel Reports Fourth Quarter And Full-Year 2013 Financial Results

     AK Steel Reports Fourth Quarter And Full-Year 2013 Financial Results

PR Newswire

WEST CHESTER, Ohio, Jan. 28, 2014

WEST CHESTER, Ohio, Jan. 28, 2014 /PRNewswire/ --AK Steel (NYSE: AKS) today
reported its financial results for the fourth quarter and full year of 2013.

4th Quarter 2013 Performance Summary

  oShipments of 1,420,000 tons
  oSales of $1.46 billion with an average selling price of $1,031 per ton
  oNet income of $35.2 million, or $0.26 per diluted share
  oAdjusted EBITDA of $87 million
  oSubstantial reduction of $719 million in pension/OPEB obligations
  oStrong liquidity of $845 million

AK Steel reported net income of $35.2 million, or $0.26 per diluted share of
common stock, for the fourth quarter of 2013, compared to a net loss of $230.4
million, or $1.89 per diluted share, for the fourth quarter of 2012. Excluding
the effect of an income tax adjustment described below, the company reported
adjusted net income of $12.5 million, or $0.09 per diluted share. The company
reported adjusted EBITDA (as defined in the "Non-GAAP Financial Measures"
section below) of $87.2 million, or $61 per ton, for the fourth quarter of
2013 compared to $16.8 million, or $12 per ton, for the fourth quarter of
2012. The company's results were also favorable to a third quarter 2013 net
loss of $31.7 million, or $0.23 per diluted share, and the third quarter's
adjusted EBITDA of $53.5 million, or $43 per ton.

Net sales for the fourth quarter of 2013 were $1.46 billion on shipments of
1,420,000 tons, compared to net sales of $1.42 billion on shipments of
1,406,100 tons for the year-ago fourth quarter and net sales of $1.33 billion
on shipments of 1,242,400 tons for the third quarter of 2013. The fourth
quarter increase in shipments from the prior year fourth quarter was primarily
due to stronger demand in automotive sales, partially offset by lower carbon
shipments to the spot market. The increase in shipments from the third quarter
of 2013 was primarily a result of higher carbon sales to the spot market and
reflects the benefits of the company's recovery from the previously disclosed
unplanned Middletown Works blast furnace outage in June 2013 described below.

The company said its average selling price for the fourth quarter of 2013 was
$1,031 per ton, a 2% increase from the $1,011 per ton reported for the fourth
quarter of 2012 and a 4% decrease from the $1,071 per ton reported for the
third quarter of 2013. The higher average selling price for the fourth quarter
of 2013 compared to the fourth quarter of 2012 was primarily due to a more
favorable mix of value-added products and higher prices for carbon steel sold
to the spot market, partially offset by lower prices for electrical steel. The
lower average selling price for the fourth quarter of 2013 compared to the
third quarter of 2013 was primarily due to a lower proportion of shipments of
value-added products to the spot market in the fourth quarter.

Included in the results for the fourth quarter of 2013 was a non-cash income
tax benefit of $22.7 million, or $0.17 per diluted share, as a result of the
allocation of income tax expense to other comprehensive income, compared to a
non-cash income tax charge of $15.3 million, or $0.11 per diluted share,
related to deferred tax asset valuation allowance changes for the third
quarter of 2013. The results for the fourth quarter of 2012 include a pre-tax
pension corridor charge of $157.3 million, or $0.80 per diluted share, and a
non-cash income tax charge of $96.4 million, or $0.79 per diluted share. The
2013 fourth quarter results also include a LIFO credit of $4.3 million,
compared to a LIFO credit of $30.8 million for the fourth quarter of 2012 and
a LIFO credit of $15.8 million for the third quarter of 2013.

"I am delighted with our fourth quarter 2013 results and our strong finish to
the year 2013," said James L. Wainscott, Chairman, President and CEO of AK
Steel. "As we enter 2014, we will build upon our solid foundation for the
future as we continue to make progress and add value to AK Steel."

The company ended 2013 with total liquidity of $845.1 million, an increase of
$33.2 million from September 30, 2013. Liquidity consists of cash and cash
equivalents of $30.1 million and $815.0 million of availability under the
company's revolving credit facility. There was $90.0 million of outstanding
borrowings under the company's revolving credit facility as of the end of
2013. Working capital was a source of $99.0 million and $7.3 million of cash
in the fourth quarter and full year of 2013, respectively.

Full-Year 2013 Results

For the full year, the company reported a net loss of $46.8 million, or $0.34
per diluted share, compared to a net loss of $1,027.3 million, or $9.06 per
diluted share for 2012. Included in the results for the full-year 2013 and
2012 were non-cash income tax charges of $14.4 million, or $0.10 per diluted
share, and $865.5 million, or $7.63 per diluted share, respectively, as a
result of deferred tax asset valuation allowance changes. The full-year 2012
results also included a pre-tax pension corridor charge of $157.3 million, or
$0.86 per diluted share.

Sales for 2013 were $5.57 billion, a decrease of 6% compared to $5.93 billion
for 2012. Shipments for 2013 were 5,275,900 tons, a decrease of 3% from
5,431,300 tons in 2012 as a result of lower shipments to the carbon spot
market. The company said its average selling price for full-year 2013 was
$1,056 per ton, approximately 3% lower than the $1,092 per ton reported for
2012. The lower average selling price for full-year 2013 was primarily due to
lower spot market selling prices in the first half of 2013, lower selling
prices for electrical steel and reduced raw material surcharges, partially
offset by a more favorable mix of value-added products.

The company reported adjusted EBITDA of $255.0 million, or $48 per ton, for
2013 compared to adjusted EBITDA of $181.2 million, or $33 per ton, for 2012.

During 2013, the company's pension and other postretirement benefit
obligations declined by $719.0 million as a result of cash payments of $285.3
million from the company for benefit payments and contributions to the pension
trust and VEBAs, strong asset returns on pension assets and higher interest
rates used to determine the present value of the obligations.

Middletown Works Unplanned Blast Furnace Outage

As previously disclosed, the company's blast furnace at its Middletown Works
experienced an unexpected mechanical failure in the charging apparatus
internal to the furnace on June 22, 2013. The company completed repairs and
restarted the blast furnace on July 12, 2013. The company maintains property
damage and business interruption insurance. The company's results for the
fourth quarter and full-year 2013 include recognized pre-tax losses for the
unplanned outage of $4.3 million, or $0.03 per diluted share, and $22.3
million, or $0.16 per diluted share, respectively. No significant costs
associated with the unplanned outage are expected in 2014.

First Quarter 2014 Outlook

Consistent with its current practice, the company said that it will provide
detailed guidance for its first quarter results of 2014 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, 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

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
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,
                              2013        2012        2013        2012
Shipments (000 tons)          1,420.0     1,406.1     5,275.9     5,431.3
Selling price per ton         $ 1,031     $ 1,011     $ 1,056     $ 1,092
Net sales                     $ 1,464.8   $ 1,423.1   $ 5,570.4   $ 5,933.7
Cost of products sold         1,323.9     1,352.7     5,107.8     5,539.1
Selling and administrative    52.0        50.2        205.3       208.7
expenses
Depreciation                  45.2        47.1        190.1       192.0
Pension and OPEB expense      (19.3)      (7.3)       (68.6)      (35.3)
(income)
Pension corridor charge       --          157.3       --          157.3
Total operating costs         1,401.8     1,600.0     5,434.6     6,061.8
Operating profit (loss)       63.0        (176.9)     135.8       (128.1)
Interest expense              32.3        26.3        127.4       86.7
Other income (expense)        (2.9)       4.3         (1.4)       6.2
Income (loss) before income   27.8        (198.9)     7.0         (208.6)
taxes
Income tax expense (benefit)  (24.0)      22.7        (10.4)      790.0
Net income (loss)             51.8        (221.6)     17.4        (998.6)
Less: Net income (loss)
attributable to               16.6        8.8         64.2        28.7
noncontrolling interests
Net income (loss)
attributable to AK Steel      $ 35.2      $ (230.4)   $ (46.8)    $ (1,027.3)
Holding Corporation
Basic and diluted earnings
per share:
Net income (loss)
attributable to AK Steel      $ 0.26      $ (1.89)    $ (0.34)    $ (9.06)
Holding Corporation:
Weighted-average shares
outstanding:
Basic                         135.9       121.3       135.8       113.0
Diluted                       136.3       121.3       135.8       113.0
Dividends declared and paid   $ --        $ --        $ --        $ 0.10
per share







AK STEEL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions, except per share amounts)
                                          December31, 2013  December31, 2012
ASSETS
Current assets:
Cash and cash equivalents                 $    45.3          $    227.0
Accounts receivable, net                  525.2              473.9
Inventory, net                            586.6              609.2
Other current assets                      116.1              132.6
Total current assets                      1,273.2            1,442.7
Property, plant and equipment             5,871.9            5,943.9
Accumulated depreciation                  (3,991.8)          (3,931.6)
Property, plant and equipment, net        1,880.1            2,012.3
Investment in Magnetation LLC             187.8              150.0
Other non-current assets                  264.6              298.1
TOTAL ASSETS                              $    3,605.7       $    3,903.1
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable                          $    601.8         $    538.3
Accrued liabilities                       142.9              164.8
Current portion of long-term debt         0.8                0.7
Current portion of pension and other      85.9               108.6
postretirement benefit obligations
Total current liabilities                 831.4              812.4
Long-term debt                            1,506.2            1,411.2
Pension and other postretirement benefit  965.4              1,661.7
obligations
Other non-current liabilities             110.0              108.8
TOTAL LIABILITIES                         3,413.0            3,994.1
Equity (deficit):
Common stock, authorized 200,000,000
shares of $.01 par value each; issued
149,691,388 and 149,094,571 shares in     1.5                1.5
2013 and 2012; outstanding 136,380,078
and 135,944,172 shares in 2013 and 2012
Additional paid-in capital                2,079.2            2,069.7
Treasury stock, common shares at cost,
13,311,310 and 13,150,399 shares in 2013  (174.0)            (173.3)
and 2012
Accumulated deficit                       (2,451.1)          (2,404.3)
Accumulated other comprehensive income    323.4              1.1
Total stockholders' equity (deficit)      (221.0)            (505.3)
Noncontrolling interests                  413.7              414.3
TOTAL EQUITY (DEFICIT)                    192.7              (91.0)
TOTAL LIABILITIES AND EQUITY (DEFICIT)    $    3,605.7       $    3,903.1







AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)
                                                          Twelve Months Ended
                                                          December 31,
                                                          2013      2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                         $  17.4   $ (998.6)
Pension corridor charge                                   --        157.3
Depreciation                                              176.1     178.4
Depreciation--SunCoke Middletown                          14.0      13.6
Amortization                                              19.1      17.0
Deferred income taxes                                     (7.3)     771.2
Pension and OPEB expense (income)                         (68.6)    (35.3)
Contributions to pension trust                            (181.1)   (170.2)
Contributions to Butler and Zanesville retirees VEBAs     (30.8)    (31.7)
Other postretirement payments                             (63.4)    (64.1)
Changes in working capital                                7.3       (113.7)
Changes in working capital--SunCoke Middletown            4.3       (4.4)
Other operating items, net                                2.8       9.7
Net cash flows from operating activities                  (110.2)   (270.8)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital investments                                       (60.0)    (45.5)
Capital investments--SunCoke Middletown                   (3.6)     (18.6)
Investments in acquired businesses                        (50.0)    (60.6)
Other investing items, net                                15.1      6.1
Net cash flows from investing activities                  (98.5)    (118.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under credit facility         90.0      (250.0)
Proceeds from issuance of long-term debt                  31.9      873.3
Redemption of long-term debt                              (27.4)    (74.0)
Proceeds from issuance of common stock                    --        96.4
Debt issuance costs                                       (3.4)     (22.3)
Common stock dividends paid                               --        (11.0)
SunCoke Middletown advances from (distributions to)       (64.8)    (36.6)
noncontrolling interest owners
Other financing items, net                                0.7       (1.4)
Net cash flows from financing activities                  27.0      574.4
Net increase (decrease) in cash and cash equivalents      (181.7)   185.0
Cash and cash equivalents, beginning of period            227.0     42.0
Cash and cash equivalents, end of period                  $  45.3   $ 227.0





AK STEEL HOLDING CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Dollars in millions)

In certain of its disclosures in this news release, the company has reported
adjusted EBITDA and adjusted net income (loss) that exclude the effects of a
pension corridor charge and deferred tax asset valuation allowance charges.
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 adjustments to EBITDA in order to exclude the
effect of noncontrolling interests and pension corridor accounting charges.
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 charge. 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 (loss), as a total and
on a per share basis, which is defined as net income (loss) with the charges
for deferred tax asset valuation allowance and the pension corridor charge
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 (loss), 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, provide additional insight into the financial
trends of the company's business versus the GAAP results alone.

Neither current 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 current
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 release:



Reconciliation of Adjusted EBITDA
                                                                     Three
(dollars in            Three Months Ended   Twelve Months Ended      Months
millions)              December 31,         December 31,             Ended
                                                                     September
                                                                     30,
                       2013     2012        2013       2012          2013
Net income (loss)
attributable to AK     $ 35.2   $ (230.4)   $ (46.8)   $ (1,027.3)   $ (31.7)
Holding
Net income
attributable to        16.6     8.8         64.2       28.7          16.0
noncontrolling
interests
Income tax expense     (24.0)   22.7        (10.4)     790.0         6.7
(benefit)
Interest expense       32.3     26.3        127.4      86.7          32.1
Interest income        (0.1)    (0.1)       (1.1)      (0.4)         (0.1)
Depreciation           45.2     47.1        190.1      192.0         48.4
Amortization           2.2      2.8         9.9        14.2          1.6
EBITDA                 107.4    (122.8)     333.3      83.9          73.0
Less: EBITDA of
noncontrolling         20.2     17.7        78.3       60.0          19.5
interests (a)
Pension corridor       --       157.3       --         157.3         --
charge
Adjusted EBITDA        $ 87.2   $ 16.8      $ 255.0    $ 181.2       $ 53.5
(a) The reconciliation of EBITDA of noncontrolling interests to net income
attributable to noncontrolling interests is as follows:
                                                                     Three
(dollars in            Three Months         Twelve Months            Months
millions)              Ended December 31,   Ended December 31,       Ended
                                                                     September
                                                                     30,
                       2013     2012        2013       2012          2013
Net income
attributable to        $ 16.6   $ 8.8       $ 64.2     $ 28.7        $ 16.0
noncontrolling
interests
Income tax expense     --       5.4         --         17.6          --
Depreciation           3.6      3.5         14.1       13.7          3.5
EBITDA of
noncontrolling         $ 20.2   $ 17.7      $ 78.3     $ 60.0        $ 19.5
interests







Reconciliation of Adjusted Net Income (Loss)
                                                                  Three Months
(dollars in         Three Months Ended   Twelve Months Ended
millions, except    December 31,         December 31,             Ended
per share)                                                        September
                                                                  30,
                    2013     2012        2013       2012          2013
Reconciliation to
Net Income (Loss)
Attributable to AK
Steel Holding
Adjusted net
income (loss)
attributable to AK  $ 12.5   $ (36.6)    $ (32.4)   $ (64.4)      $  (16.4)
Steel Holding
Corporation
Pension corridor
charge (net of      --       (97.4)      --         (97.4)        --
tax)
Non-cash income
tax (charge)
credit from change  22.7     (96.4)      (14.4)     (865.5)       (15.3)
in deferred tax
asset valuation
allowance
Net income (loss)
attributable to AK
Steel Holding       $ 35.2   $ (230.4)   $ (46.8)   $ (1,027.3)   $  (31.7)
Corporation, as
reported
Reconciliation to
Basic and Diluted
Earnings (Losses)
per Share
Adjusted basic and
diluted earnings    $ 0.09   $ (0.30)    $ (0.24)   $ (0.57)      $  (0.12)
(losses) per share
Pension corridor    --       (0.80)      --         (0.86)        --
charge
Non-cash income
tax (charge)
credit from change  0.17     (0.79)      (0.10)     (7.63)        (0.11)
in deferred tax
asset valuation
allowance
Basic and diluted
earnings (losses)   $ 0.26   $ (1.89)    $ (0.34)   $ (9.06)      $  (0.23)
per share, as
reported







AK STEEL HOLDING CORPORATION
STEEL SHIPMENTS
(Unaudited)
(Tons in thousands)
                                    Three Months          Twelve Months
                                    Ended December 31,    Ended December 31,
                                    2013       2012       2013       2012
Tons Shipped by Product
Stainless/electrical                195.6      188.5      822.1      849.1
Coated                              656.8      655.8      2,469.6    2,409.4
Cold-rolled                         314.9      290.1      1,115.9    1,138.7
Tubular                             29.7       28.5       122.2      132.0
Subtotal value-added shipments      1,197.0    1,162.9    4,529.8    4,529.2
Hot-rolled                          195.9      214.3      643.5      767.6
Secondary                           27.1       28.9       102.6      134.5
Subtotal non value-added shipments  223.0      243.2      746.1      902.1
Total shipments                     1,420.0    1,406.1    5,275.9    5,431.3
Shipments by Product (%)
Stainless/electrical                13.8    %  13.4    %  15.6    %  15.6    %
Coated                              46.2    %  46.6    %  46.8    %  44.4    %
Cold-rolled                         22.2    %  20.6    %  21.2    %  21.0    %
Tubular                             2.1     %  2.0     %  2.3     %  2.4     %
Subtotal value-added shipments      84.3    %  82.6    %  85.9    %  83.4    %
Hot-rolled                          13.8    %  15.2    %  12.2    %  14.1    %
Secondary                           1.9     %  2.2     %  1.9     %  2.5     %
Subtotal non value-added shipments  15.7    %  17.4    %  14.1    %  16.6    %
Total shipments                     100.0   %  100.0   %  100.0   %  100.0   %





SOURCE AK Steel

Website: http://www.aksteel.com
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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