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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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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock $0.01 Par Value
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New York Stock Exchange
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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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Page
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Item 1.
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Business.
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Market
|
|
2016
|
|
2015
|
|
2014
|
|||
Automotive
|
|
66
|
%
|
|
60
|
%
|
|
53
|
%
|
Infrastructure and Manufacturing
|
|
16
|
%
|
|
16
|
%
|
|
18
|
%
|
Distributors and Converters
|
|
18
|
%
|
|
24
|
%
|
|
29
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Geographic Area
|
|
Net Sales
|
|
%
|
|
Net Sales
|
|
%
|
|
Net Sales
|
|
%
|
|||||||||
United States
|
|
$
|
5,226.9
|
|
|
89
|
%
|
|
$
|
5,837.2
|
|
|
87
|
%
|
|
$
|
5,750.3
|
|
|
88
|
%
|
Foreign countries
|
|
655.6
|
|
|
11
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%
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|
855.7
|
|
|
13
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%
|
|
755.4
|
|
|
12
|
%
|
|||
Total
|
|
$
|
5,882.5
|
|
|
100
|
%
|
|
$
|
6,692.9
|
|
|
100
|
%
|
|
$
|
6,505.7
|
|
|
100
|
%
|
Name
|
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Age
|
|
Position
|
Roger K. Newport
|
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52
|
|
Chief Executive Officer
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Kirk W. Reich
|
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48
|
|
President and Chief Operating Officer
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Joseph C. Alter
|
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39
|
|
Vice President, General Counsel and Corporate Secretary
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Brian K. Bishop
|
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45
|
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Vice President, Carbon Steel Operations
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Stephanie S. Bisselberg
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46
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Vice President, Human Resources
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Renee S. Filiatraut
|
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53
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Vice President, Litigation, Labor and External Affairs
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Gregory A. Hoffbauer
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50
|
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Vice President, Controller and Chief Accounting Officer
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Michael A. Kercsmar
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45
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Vice President, Specialty Steel Operations
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Scott M. Lauschke
|
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47
|
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Vice President, Sales and Customer Service
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Eric S. Petersen
|
|
47
|
|
Vice President, Research and Innovation
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Maurice A. Reed
|
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54
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Vice President, Engineering, Raw Materials and Energy
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Jaime Vasquez
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54
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Vice President, Finance and Chief Financial Officer
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Item 1A.
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Risk Factors.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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2016
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2015
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||||||||||||
|
High
|
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Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
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4.48
|
|
|
$
|
1.64
|
|
|
$
|
6.17
|
|
|
$
|
3.62
|
|
Second Quarter
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5.50
|
|
|
3.31
|
|
|
5.93
|
|
|
3.81
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|
||||
Third Quarter
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7.09
|
|
|
3.87
|
|
|
3.93
|
|
|
2.05
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|
||||
Fourth Quarter
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11.39
|
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|
4.42
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|
3.25
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|
1.99
|
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Period
|
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Total
Number of
Shares
Purchased (a)
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Average Price Paid Per
Share (a)
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Total Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced Plans
or Programs (b)
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Approximate
Dollar Value of
Shares that May
Yet be Purchased
Under the Plans or
Programs (b)
|
||||||
October 2016
|
|
4,193
|
|
|
$
|
4.91
|
|
|
—
|
|
|
|
||
November 2016
|
|
2,180
|
|
|
5.78
|
|
|
—
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|
|
|
|||
December 2016
|
|
—
|
|
|
—
|
|
|
—
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|
|
|
|||
Total
|
|
6,373
|
|
|
5.21
|
|
|
—
|
|
|
$
|
125.6
|
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(a)
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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.
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(b)
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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.
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|
January 1,
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December 31,
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||||||||||||||||||||
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2012
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|
2012
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2013
|
|
2014
|
|
2015
|
|
2016
|
||||||||||||
AK Holding
|
$
|
100
|
|
|
$
|
56
|
|
|
$
|
99
|
|
|
$
|
72
|
|
|
$
|
27
|
|
|
$
|
124
|
|
NYSE Arca Steel
|
100
|
|
|
102
|
|
|
104
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|
|
75
|
|
|
42
|
|
|
80
|
|
||||||
S&P 600 Small Cap
|
100
|
|
|
115
|
|
|
160
|
|
|
167
|
|
|
162
|
|
|
202
|
|
Item 6.
|
Selected Financial Data.
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|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(dollars in millions, except per share and per ton data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
5,882.5
|
|
|
$
|
6,692.9
|
|
|
$
|
6,505.7
|
|
|
$
|
5,570.4
|
|
|
$
|
5,933.7
|
|
Pension and OPEB net corridor charge
|
43.1
|
|
|
131.2
|
|
|
2.0
|
|
|
—
|
|
|
157.3
|
|
|||||
Operating profit (loss) (a)
|
230.2
|
|
|
86.7
|
|
|
139.4
|
|
|
135.8
|
|
|
(128.1
|
)
|
|||||
Net income (loss) attributable to AK Steel Holding Corporation (b)
|
(7.8
|
)
|
|
(509.0
|
)
|
|
(96.9
|
)
|
|
(46.8
|
)
|
|
(1,027.3
|
)
|
|||||
Basic and diluted earnings (loss) per share (b)
|
(0.03
|
)
|
|
(2.86
|
)
|
|
(0.65
|
)
|
|
(0.34
|
)
|
|
(9.06
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.10
|
|
Total shipments (in thousands of tons)
|
6,051.8
|
|
|
7,089.2
|
|
|
6,132.7
|
|
|
5,275.9
|
|
|
5,431.3
|
|
|||||
Selling price per ton
|
$
|
969
|
|
|
$
|
942
|
|
|
$
|
1,058
|
|
|
$
|
1,056
|
|
|
$
|
1,092
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
173.2
|
|
|
$
|
56.6
|
|
|
$
|
70.2
|
|
|
$
|
45.3
|
|
|
$
|
227.0
|
|
Working capital
|
958.4
|
|
|
763.6
|
|
|
832.8
|
|
|
372.2
|
|
|
557.1
|
|
|||||
Total assets
|
4,036.0
|
|
|
4,084.4
|
|
|
4,828.0
|
|
|
3,579.1
|
|
|
3,873.7
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.7
|
|
|||||
Long-term debt (excluding current portion)
|
1,816.6
|
|
|
2,354.1
|
|
|
2,422.0
|
|
|
1,479.6
|
|
|
1,381.8
|
|
|||||
Current portion of pension and other postretirement benefit obligations
|
41.3
|
|
|
77.7
|
|
|
55.6
|
|
|
85.9
|
|
|
108.6
|
|
|||||
Pension and other postretirement benefit obligations (excluding current portion)
|
1,093.7
|
|
|
1,146.9
|
|
|
1,225.3
|
|
|
965.4
|
|
|
1,661.7
|
|
|||||
Total equity (deficit)
|
90.7
|
|
|
(595.6
|
)
|
|
(77.0
|
)
|
|
192.7
|
|
|
(91.0
|
)
|
(a)
|
Under our method of accounting for pensions and other postretirement benefits, we recorded pension corridor charges of $78.4, $144.3, $2.0, and $157.3 in 2016, 2015, 2014 and 2012, and OPEB corridor credits of $35.3 and $13.1 in 2016 and 2015. In 2016, we also recorded pension settlement charges of $25.0 and costs of $69.5 to terminate a pellet offtake agreement and for related transportation costs. In 2015, we also recorded a charge for a temporary facility idling of $28.1.
|
(b)
|
Included in net income (loss) attributable to AK Steel Holding Corporation for 2015 were charges for the impairments of our investments in Magnetation of $256.3, or $1.44 per diluted share, and AFSG Holdings, Inc. (“AFSG”) of $41.6, or $0.23 per diluted share; and for 2012 was a charge to income tax expense of $865.5, or $7.63 per diluted share, for an increase in the valuation allowance on deferred tax assets.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
|
|
|
|
|
|
|
Market
|
|
2016
|
|
2015
|
||
Automotive
|
|
66
|
%
|
|
60
|
%
|
Infrastructure and Manufacturing
|
|
16
|
%
|
|
16
|
%
|
Distributors and Converters
|
|
18
|
%
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
Market
|
|
2015
|
|
2014
|
||
Automotive
|
|
60
|
%
|
|
53
|
%
|
Infrastructure and Manufacturing
|
|
16
|
%
|
|
18
|
%
|
Distributors and Converters
|
|
24
|
%
|
|
29
|
%
|
•
|
Lower raw material costs for carbon scrap, iron ore pellets, coke and energy in 2015
|
•
|
Planned outages costs were $50.6 in 2015, significantly lower than planned outages costs of $74.9 in 2014
|
•
|
LIFO credits were $195.3 in 2015, compared to LIFO credits of $21.0 in 2014
|
•
|
Extreme winter weather conditions early in 2014 and unplanned maintenance outage costs of $41.2 for incidents at our Ashland Works blast furnace during 2014 negatively affected cost of products sold in 2014
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss) attributable to AK Holding
|
|
$
|
(7.8
|
)
|
|
$
|
(509.0
|
)
|
|
$
|
(96.9
|
)
|
Net income attributable to noncontrolling interests
|
|
66.0
|
|
|
62.8
|
|
|
62.8
|
|
|||
Income tax expense
|
|
3.2
|
|
|
63.4
|
|
|
7.7
|
|
|||
Interest expense
|
|
163.9
|
|
|
173.0
|
|
|
144.7
|
|
|||
Interest income
|
|
(1.6
|
)
|
|
(1.3
|
)
|
|
(0.7
|
)
|
|||
Depreciation
|
|
216.6
|
|
|
216.0
|
|
|
201.9
|
|
|||
Amortization
|
|
4.8
|
|
|
8.4
|
|
|
9.1
|
|
|||
EBITDA
|
|
445.1
|
|
|
13.3
|
|
|
328.6
|
|
|||
Less: EBITDA of noncontrolling interests (a)
|
|
80.8
|
|
|
77.1
|
|
|
77.2
|
|
|||
Pension and OPEB net corridor and settlement charges
|
|
68.1
|
|
|
131.2
|
|
|
5.5
|
|
|||
Charges for termination of pellet agreement and related transportation costs
|
|
69.5
|
|
|
—
|
|
|
—
|
|
|||
Impairment of Magnetation investment
|
|
—
|
|
|
256.3
|
|
|
—
|
|
|||
Impairment of AFSG investment
|
|
—
|
|
|
41.6
|
|
|
—
|
|
|||
Charge for facility idling
|
|
—
|
|
|
28.1
|
|
|
—
|
|
|||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
23.3
|
|
|||
Adjusted EBITDA (b)
|
|
$
|
501.9
|
|
|
$
|
393.4
|
|
|
$
|
280.2
|
|
Adjusted EBITDA margin
|
|
8.5
|
%
|
|
5.9
|
%
|
|
4.3
|
%
|
(a)
|
The reconciliation of EBITDA of noncontrolling interests to net income attributable to noncontrolling interests is as follows:
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to noncontrolling interests
|
|
$
|
66.0
|
|
|
$
|
62.8
|
|
|
$
|
62.8
|
|
Depreciation
|
|
14.8
|
|
|
14.3
|
|
|
14.4
|
|
|||
EBITDA of noncontrolling interests
|
|
$
|
80.8
|
|
|
$
|
77.1
|
|
|
$
|
77.2
|
|
(b)
|
Included in adjusted EBITDA for the year ended December 31, 2016, was $45.6 of unrealized gains on iron ore derivatives. See Note 17 to the consolidated financial statements for additional information.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Reconciliation to Net Income (Loss) Attributable to AK Steel Holding
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation, as reported
|
|
$
|
(7.8
|
)
|
|
$
|
(509.0
|
)
|
|
$
|
(96.9
|
)
|
Pension and OPEB net corridor and settlement charges
|
|
68.1
|
|
|
131.2
|
|
|
5.5
|
|
|||
Charges for termination of pellet agreement and related transportation costs
|
|
69.5
|
|
|
—
|
|
|
|
|
|||
Impairment of Magnetation investment
|
|
—
|
|
|
256.3
|
|
|
—
|
|
|||
Impairment of AFSG investment
|
|
—
|
|
|
41.6
|
|
|
—
|
|
|||
Charge for facility idling
|
|
—
|
|
|
28.1
|
|
|
—
|
|
|||
Acquisition-related expenses (net of tax)
|
|
—
|
|
|
—
|
|
|
31.7
|
|
|||
Adjusted net income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
129.8
|
|
|
$
|
(51.8
|
)
|
|
$
|
(59.7
|
)
|
|
|
|
|
|
|
|
||||||
Reconciliation to Diluted Earnings (Loss) per Share
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share, as reported
|
|
$
|
(0.03
|
)
|
|
$
|
(2.86
|
)
|
|
$
|
(0.65
|
)
|
Pension and OPEB net corridor charge/settlement loss
|
|
0.29
|
|
|
0.74
|
|
|
0.04
|
|
|||
Charges for termination of pellet agreement and related transportation costs
|
|
0.30
|
|
|
—
|
|
|
—
|
|
|||
Impairment of Magnetation investment
|
|
—
|
|
|
1.44
|
|
|
—
|
|
|||
Impairment of AFSG investment
|
|
—
|
|
|
0.23
|
|
|
—
|
|
|||
Charge for facility idling
|
|
—
|
|
|
0.16
|
|
|
—
|
|
|||
Acquisition-related expenses
|
|
—
|
|
|
—
|
|
|
0.21
|
|
|||
Adjusted diluted earnings (loss) per share
|
|
$
|
0.56
|
|
|
$
|
(0.29
|
)
|
|
$
|
(0.40
|
)
|
•
|
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 3rd Gen AHSS with high strength and formability, which will provide significant opportunities for lightweighting, thereby providing manufacturers similar overall reduction in weight relative to aluminum at a much lower cost.
|
1)
|
Based on our current forecast for raw material prices and anticipated inventory levels at the end of 2017, we currently expect that we could incur LIFO expense for the full year of approximately $100.0. However, raw material prices have been very volatile, and a combination of changes in raw material costs, other input costs or anticipated year-end inventory levels will affect our LIFO estimate and the amount recorded in the first quarter and full year.
|
2)
|
We expect outage expenses to be approximately $90.0 in 2017 compared to $62.1 in 2016. The increase is primarily due to a major routine planned outage scheduled in the second half of 2017 at the Middletown Works blast furnace and melt shop.
|
3)
|
We expect pension and OPEB income of approximately $65.0 in 2017. Our required annual pension plan contribution is approximately $45.0 for 2017.
|
4)
|
We estimate depreciation expense for 2017 will be similar to 2016.
|
5)
|
We expect that we will record an income tax benefit for 2017, primarily associated with the forecasted 2017 LIFO expense. Cash taxes for the same period will be minimal given our net operating loss carryforward positions.
|
6)
|
We estimate capital investments of approximately $130.0 to $150.0 in 2017.
|
7)
|
We expect working capital to be a small use of cash in 2017, although we drive to keep it neutral each year.
|
|
|
Payment due by period
|
||||||||||||||||||
Contractual Obligations
|
|
Less
than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More
than 5
years
|
|
Total
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
150.0
|
|
|
$
|
943.3
|
|
|
$
|
751.8
|
|
|
$
|
1,845.1
|
|
Interest on debt (a)
|
|
138.1
|
|
|
275.5
|
|
|
186.8
|
|
|
93.8
|
|
|
694.2
|
|
|||||
Lease obligations
|
|
16.0
|
|
|
26.7
|
|
|
19.1
|
|
|
48.4
|
|
|
110.2
|
|
|||||
Purchase obligations and commitments
|
|
2,399.1
|
|
|
3,191.4
|
|
|
2,224.8
|
|
|
3,226.8
|
|
|
11,042.1
|
|
|||||
Pension and OPEB obligations (b)
|
|
41.3
|
|
|
76.7
|
|
|
69.9
|
|
|
947.1
|
|
|
1,135.0
|
|
|||||
Other non-current liabilities
|
|
—
|
|
|
52.9
|
|
|
37.1
|
|
|
58.4
|
|
|
148.4
|
|
|||||
Total
|
|
$
|
2,594.5
|
|
|
$
|
3,773.2
|
|
|
$
|
3,481.0
|
|
|
$
|
5,126.3
|
|
|
$
|
14,975.0
|
|
(a)
|
Amounts include contractual interest payments using the interest rates as of December 31, 2016 applicable to our variable-rate debt and stated fixed interest rates for fixed-rate debt.
|
(b)
|
Future cash contributions to our qualified pension trust are not included in the table above. We have approximately $45.0 of required contributions for 2017. Based on current actuarial assumptions, the estimates for our contributions are approximately $60.0 for 2018 and $75.0 for 2019. Estimates of cash contributions to the pension trust to be made after 2017 are uncertain since several variable factors impact defined benefit pension plan contributions and required contributions are significantly affected by asset returns. Because we expect the pension trust to make pension benefit payments beyond the next five years, the net pension liability is included in the More than 5 years column. We estimate benefit payments, after receipt of Medicare subsidy reimbursements, will be $40.0 for 2017 and we expect them to trend down to $11.6 over the next 30 years. For a more detailed description of these obligations, see Note 7 to the consolidated financial statements.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
•
|
customer pricing contracts
|
•
|
supplier purchasing agreements
|
•
|
derivative financial instruments
|
|
|
Negative Effect on Pre-tax Income
|
||||||
Commodity Derivative
|
|
10% Decrease
|
|
25% Decrease
|
||||
Natural gas
|
|
$
|
14.0
|
|
|
$
|
35.1
|
|
Zinc
|
|
6.8
|
|
|
17.1
|
|
||
Electricity
|
|
5.1
|
|
|
12.7
|
|
||
Iron ore
|
|
16.8
|
|
|
36.3
|
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Page
|
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2016, 2015 and 2014
|
|
Dated:
|
February 17, 2017
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
Dated:
|
February 17, 2017
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
AK STEEL HOLDING CORPORATION
|
||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||
Years Ended December 31, 2016, 2015 and 2014
|
||||||||||||
(dollars in millions, except per share data)
|
||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
5,882.5
|
|
|
$
|
6,692.9
|
|
|
$
|
6,505.7
|
|
|
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of items shown separately below)
|
|
5,064.7
|
|
|
6,032.0
|
|
|
6,007.7
|
|
|||
Selling and administrative expenses (exclusive of items shown separately below)
|
|
277.2
|
|
|
261.9
|
|
|
247.2
|
|
|||
Depreciation
|
|
216.6
|
|
|
216.0
|
|
|
201.9
|
|
|||
Pension and OPEB expense (income) (exclusive of corridor and settlement charges shown below)
|
|
(43.8
|
)
|
|
(63.0
|
)
|
|
(92.5
|
)
|
|||
Pension and OPEB net corridor charge
|
|
43.1
|
|
|
131.2
|
|
|
2.0
|
|
|||
Pension settlement charges
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|||
Charges for termination of pellet agreement and related transportation costs
|
|
69.5
|
|
|
—
|
|
|
—
|
|
|||
Charge for facility idling
|
|
—
|
|
|
28.1
|
|
|
—
|
|
|||
Total operating costs
|
|
5,652.3
|
|
|
6,606.2
|
|
|
6,366.3
|
|
|||
Operating profit
|
|
230.2
|
|
|
86.7
|
|
|
139.4
|
|
|||
Interest expense
|
|
163.9
|
|
|
173.0
|
|
|
144.7
|
|
|||
Impairment of Magnetation investment
|
|
—
|
|
|
(256.3
|
)
|
|
—
|
|
|||
Impairment of AFSG investment
|
|
—
|
|
|
(41.6
|
)
|
|
—
|
|
|||
Other income (expense)
|
|
(4.9
|
)
|
|
1.4
|
|
|
(21.1
|
)
|
|||
Income (loss) before income taxes
|
|
61.4
|
|
|
(382.8
|
)
|
|
(26.4
|
)
|
|||
Income tax expense
|
|
3.2
|
|
|
63.4
|
|
|
7.7
|
|
|||
Net income (loss)
|
|
58.2
|
|
|
(446.2
|
)
|
|
(34.1
|
)
|
|||
Less: Net income attributable to noncontrolling interests
|
|
66.0
|
|
|
62.8
|
|
|
62.8
|
|
|||
Net income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
(7.8
|
)
|
|
$
|
(509.0
|
)
|
|
$
|
(96.9
|
)
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation common stockholders
|
|
$
|
(0.03
|
)
|
|
$
|
(2.86
|
)
|
|
$
|
(0.65
|
)
|
AK STEEL HOLDING CORPORATION
|
||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
Years Ended December 31, 2016, 2015 and 2014
|
||||||||||||
(dollars in millions)
|
||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
58.2
|
|
|
$
|
(446.2
|
)
|
|
$
|
(34.1
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
|
(1.5
|
)
|
|
(3.1
|
)
|
|
(3.7
|
)
|
|||
Cash flow hedges:
|
|
|
|
|
|
|
||||||
Gains (losses) arising in period
|
|
56.1
|
|
|
(64.2
|
)
|
|
(51.6
|
)
|
|||
Reclassification of losses (gains) to net income (loss)
|
|
27.2
|
|
|
61.4
|
|
|
1.1
|
|
|||
Pension and OPEB plans:
|
|
|
|
|
|
|
||||||
Prior service credit (cost) arising in period
|
|
(8.3
|
)
|
|
(7.7
|
)
|
|
10.9
|
|
|||
Gains (losses) arising in period
|
|
11.6
|
|
|
(60.8
|
)
|
|
(422.5
|
)
|
|||
Reclassification of prior service cost (credits) included in net income (loss)
|
|
(54.8
|
)
|
|
(60.2
|
)
|
|
(68.9
|
)
|
|||
Reclassification of losses (gains) included in net income (loss)
|
|
97.9
|
|
|
165.0
|
|
|
6.9
|
|
|||
Other comprehensive income (loss), before tax
|
|
128.2
|
|
|
30.4
|
|
|
(527.8
|
)
|
|||
Income tax expense in other comprehensive income (loss)
|
|
4.5
|
|
|
13.2
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
|
123.7
|
|
|
17.2
|
|
|
(527.8
|
)
|
|||
Comprehensive income (loss)
|
|
181.9
|
|
|
(429.0
|
)
|
|
(561.9
|
)
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
|
66.0
|
|
|
62.8
|
|
|
62.8
|
|
|||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
115.9
|
|
|
$
|
(491.8
|
)
|
|
$
|
(624.7
|
)
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
December 31, 2016 and 2015
|
||||||||
(dollars in millions, except per share data)
|
||||||||
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
173.2
|
|
|
$
|
56.6
|
|
Accounts receivable, net
|
|
442.0
|
|
|
444.9
|
|
||
Inventory, net
|
|
1,113.9
|
|
|
1,226.3
|
|
||
Other current assets
|
|
94.6
|
|
|
78.4
|
|
||
Total current assets
|
|
1,823.7
|
|
|
1,806.2
|
|
||
Property, plant and equipment
|
|
6,569.0
|
|
|
6,466.0
|
|
||
Accumulated depreciation
|
|
(4,554.6
|
)
|
|
(4,379.5
|
)
|
||
Property, plant and equipment, net
|
|
2,014.4
|
|
|
2,086.5
|
|
||
Other non-current assets:
|
|
|
|
|
||||
Other non-current assets
|
|
197.9
|
|
|
191.7
|
|
||
TOTAL ASSETS
|
|
$
|
4,036.0
|
|
|
$
|
4,084.4
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
589.9
|
|
|
$
|
703.4
|
|
Accrued liabilities
|
|
234.1
|
|
|
261.5
|
|
||
Current portion of pension and other postretirement benefit obligations
|
|
41.3
|
|
|
77.7
|
|
||
Total current liabilities
|
|
865.3
|
|
|
1,042.6
|
|
||
Non-current liabilities:
|
|
|
|
|
||||
Long-term debt
|
|
1,816.6
|
|
|
2,354.1
|
|
||
Pension and other postretirement benefit obligations
|
|
1,093.7
|
|
|
1,146.9
|
|
||
Other non-current liabilities
|
|
148.4
|
|
|
136.4
|
|
||
TOTAL LIABILITIES
|
|
3,924.0
|
|
|
4,680.0
|
|
||
EXCHANGEABLE NOTES EXCHANGE FEATURE
|
|
21.3
|
|
|
—
|
|
||
Equity (deficit):
|
|
|
|
|
||||
Common stock, authorized 450,000,000 shares of $.01 par value each; issued 314,739,500 and 178,284,137 shares in 2016 and 2015; outstanding 314,160,557 and 177,893,562 shares in 2016 and 2015
|
|
3.1
|
|
|
1.8
|
|
||
Additional paid-in capital
|
|
2,855.4
|
|
|
2,266.8
|
|
||
Treasury stock, common shares at cost, 578,943 and 390,575 shares in 2016 and 2015
|
|
(2.4
|
)
|
|
(2.0
|
)
|
||
Accumulated deficit
|
|
(3,064.8
|
)
|
|
(3,057.0
|
)
|
||
Accumulated other comprehensive loss
|
|
(63.5
|
)
|
|
(187.2
|
)
|
||
Total stockholders’ equity (deficit)
|
|
(272.2
|
)
|
|
(977.6
|
)
|
||
Noncontrolling interests
|
|
362.9
|
|
|
382.0
|
|
||
TOTAL EQUITY (DEFICIT)
|
|
90.7
|
|
|
(595.6
|
)
|
||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
|
$
|
4,036.0
|
|
|
$
|
4,084.4
|
|
AK STEEL HOLDING CORPORATION
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
Years Ended December 31, 2016, 2015 and 2014
|
||||||||||||
(dollars in millions)
|
||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
58.2
|
|
|
$
|
(446.2
|
)
|
|
$
|
(34.1
|
)
|
Adjustments to reconcile net income (loss) to cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
201.7
|
|
|
201.7
|
|
|
187.6
|
|
|||
Depreciation—SunCoke Middletown
|
|
14.9
|
|
|
14.3
|
|
|
14.3
|
|
|||
Amortization
|
|
18.4
|
|
|
21.2
|
|
|
20.4
|
|
|||
Impairment of Magnetation and AFSG investments
|
|
—
|
|
|
297.9
|
|
|
—
|
|
|||
Charge for transportation costs affected by termination of pellet agreement
|
|
32.9
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
|
5.0
|
|
|
62.1
|
|
|
8.2
|
|
|||
Contributions to pension trust
|
|
—
|
|
|
(24.1
|
)
|
|
(196.5
|
)
|
|||
Pension and OPEB expense (income)
|
|
(43.8
|
)
|
|
(63.0
|
)
|
|
(92.5
|
)
|
|||
Pension and OPEB net corridor charge
|
|
43.1
|
|
|
131.2
|
|
|
2.0
|
|
|||
Pension settlement charges
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|||
Contributions to retirees VEBA
|
|
—
|
|
|
(3.1
|
)
|
|
(3.1
|
)
|
|||
Affiliate (earnings) losses and distributions, net
|
|
(6.0
|
)
|
|
19.7
|
|
|
9.8
|
|
|||
Other operating items, net
|
|
18.5
|
|
|
(4.4
|
)
|
|
6.0
|
|
|||
Changes in assets and liabilities, net of effect of acquired business:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
0.1
|
|
|
228.1
|
|
|
33.8
|
|
|||
Inventories
|
|
112.4
|
|
|
(53.8
|
)
|
|
(223.4
|
)
|
|||
Accounts payable and other current liabilities
|
|
(143.2
|
)
|
|
(139.7
|
)
|
|
25.2
|
|
|||
Charge for facility idling
|
|
—
|
|
|
28.1
|
|
|
—
|
|
|||
Other assets
|
|
40.9
|
|
|
(7.6
|
)
|
|
(8.2
|
)
|
|||
Pension obligations
|
|
(33.0
|
)
|
|
(12.7
|
)
|
|
(18.2
|
)
|
|||
Postretirement benefit obligations
|
|
(34.4
|
)
|
|
(48.3
|
)
|
|
(63.9
|
)
|
|||
Other liabilities
|
|
(6.1
|
)
|
|
(1.1
|
)
|
|
9.8
|
|
|||
Net cash flows from operating activities
|
|
304.6
|
|
|
200.3
|
|
|
(322.8
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital investments
|
|
(127.6
|
)
|
|
(99.0
|
)
|
|
(81.1
|
)
|
|||
Investments in Magnetation LLC
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
|||
Investments in acquired business, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(690.3
|
)
|
|||
Proceeds from sale of equity investee
|
|
—
|
|
|
25.0
|
|
|
—
|
|
|||
Proceeds from AFSG Holdings, Inc. distribution
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|||
Other investing items, net
|
|
2.3
|
|
|
12.5
|
|
|
13.6
|
|
|||
Net cash flows from investing activities
|
|
(125.3
|
)
|
|
(47.5
|
)
|
|
(857.8
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Net borrowings (repayments) under credit facility
|
|
(550.0
|
)
|
|
(55.0
|
)
|
|
515.0
|
|
|||
Proceeds from issuance of long-term debt
|
|
380.0
|
|
|
—
|
|
|
427.1
|
|
|||
Redemption of long-term debt
|
|
(392.8
|
)
|
|
(14.1
|
)
|
|
(0.8
|
)
|
|||
Proceeds from issuance of common stock
|
|
600.4
|
|
|
—
|
|
|
345.3
|
|
|||
Debt issuance costs
|
|
(20.4
|
)
|
|
—
|
|
|
(15.5
|
)
|
|||
SunCoke Middletown distributions to noncontrolling interest owners
|
|
(85.1
|
)
|
|
(96.3
|
)
|
|
(61.0
|
)
|
|||
Other financing items, net
|
|
5.2
|
|
|
(1.0
|
)
|
|
(4.6
|
)
|
|||
Net cash flows from financing activities
|
|
(62.7
|
)
|
|
(166.4
|
)
|
|
1,205.5
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
116.6
|
|
|
(13.6
|
)
|
|
24.9
|
|
|||
Cash and cash equivalents, beginning of year
|
|
56.6
|
|
|
70.2
|
|
|
45.3
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
173.2
|
|
|
$
|
56.6
|
|
|
$
|
70.2
|
|
AK STEEL HOLDING CORPORATION
|
|||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
|
|||||||||||||||||||||||||||
Years Ended December 31, 2016, 2015 and 2014
|
|||||||||||||||||||||||||||
(dollars in millions)
|
|||||||||||||||||||||||||||
|
Common
Stock
|
|
Addi-
tional
Paid-In-
Capital
|
|
Treasury
Stock
|
|
Accum-
ulated
Deficit
|
|
Accum-
ulated
Other
Compre-
hensive
Loss
|
|
Noncon-
trolling
Interests
|
|
Total
|
||||||||||||||
December 31, 2013
|
$
|
1.5
|
|
|
$
|
2,079.2
|
|
|
$
|
(174.0
|
)
|
|
$
|
(2,451.1
|
)
|
|
$
|
323.4
|
|
|
$
|
413.7
|
|
|
$
|
192.7
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
(96.9
|
)
|
|
|
|
|
62.8
|
|
|
(34.1
|
)
|
|||||||
Issuance of common stock
|
0.4
|
|
|
344.9
|
|
|
|
|
|
|
|
|
|
|
345.3
|
|
|||||||||||
Retirement of treasury stock
|
(0.1
|
)
|
|
(173.9
|
)
|
|
174.0
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Share-based compensation
|
|
|
|
8.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.9
|
|
|||||||
Purchase of treasury stock
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|||||||
Change in accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(527.8
|
)
|
|
|
|
|
(527.8
|
)
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(61.0
|
)
|
|
(61.0
|
)
|
||||||||||||
December 31, 2014
|
$
|
1.8
|
|
|
$
|
2,259.1
|
|
|
$
|
(1.0
|
)
|
|
$
|
(2,548.0
|
)
|
|
$
|
(204.4
|
)
|
|
$
|
415.5
|
|
|
$
|
(77.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
(509.0
|
)
|
|
|
|
|
62.8
|
|
|
(446.2
|
)
|
|||||||
Share-based compensation
|
|
|
|
7.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.7
|
|
|||||||
Purchase of treasury stock
|
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|||||||
Change in accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
17.2
|
|
|
|
|
|
17.2
|
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(96.3
|
)
|
|
(96.3
|
)
|
||||||||||||
December 31, 2015
|
$
|
1.8
|
|
|
$
|
2,266.8
|
|
|
$
|
(2.0
|
)
|
|
$
|
(3,057.0
|
)
|
|
$
|
(187.2
|
)
|
|
$
|
382.0
|
|
|
$
|
(595.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
(7.8
|
)
|
|
|
|
|
66.0
|
|
|
58.2
|
|
|||||||
Issuance of common stock
|
1.3
|
|
|
599.1
|
|
|
|
|
|
|
|
|
|
|
600.4
|
|
|||||||||||
Share-based compensation
|
|
|
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.4
|
|
|||||||
Stock options exercised
|
|
|
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.4
|
|
|||||||
Exchangeable notes exchange feature
|
|
|
(21.3
|
)
|
|
|
|
|
|
|
|
|
|
(21.3
|
)
|
||||||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.4
|
)
|
|||||||
Change in accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
123.7
|
|
|
|
|
|
123.7
|
|
|||||||
Net distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(85.1
|
)
|
|
(85.1
|
)
|
||||||||||||
December 31, 2016
|
$
|
3.1
|
|
|
$
|
2,855.4
|
|
|
$
|
(2.4
|
)
|
|
$
|
(3,064.8
|
)
|
|
$
|
(63.5
|
)
|
|
$
|
362.9
|
|
|
$
|
90.7
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Carbon
|
$
|
4,014.5
|
|
|
$
|
4,746.8
|
|
|
$
|
4,423.3
|
|
Stainless and electrical
|
1,654.1
|
|
|
1,733.0
|
|
|
1,836.5
|
|
|||
Tubular
|
193.7
|
|
|
201.3
|
|
|
231.4
|
|
|||
Other
|
20.2
|
|
|
11.8
|
|
|
14.5
|
|
|||
Total
|
$
|
5,882.5
|
|
|
$
|
6,692.9
|
|
|
$
|
6,505.7
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Automotive
|
66
|
%
|
|
60
|
%
|
|
53
|
%
|
Infrastructure and Manufacturing
|
16
|
%
|
|
16
|
%
|
|
18
|
%
|
Distributors and Converters
|
18
|
%
|
|
24
|
%
|
|
29
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
6.0
|
|
|
$
|
9.0
|
|
|
$
|
8.1
|
|
Increase (decrease) in allowance
|
2.4
|
|
|
(3.0
|
)
|
|
0.9
|
|
|||
Receivables written off
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
$
|
7.8
|
|
|
$
|
6.0
|
|
|
$
|
9.0
|
|
|
2016
|
|
2015
|
||||
Finished and semi-finished
|
$
|
855.0
|
|
|
$
|
996.5
|
|
Raw materials
|
415.8
|
|
|
410.0
|
|
||
Total cost
|
1,270.8
|
|
|
1,406.5
|
|
||
Adjustment to state inventories at LIFO value
|
(156.9
|
)
|
|
(180.2
|
)
|
||
Inventory, net
|
$
|
1,113.9
|
|
|
$
|
1,226.3
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
180.2
|
|
|
$
|
375.5
|
|
|
$
|
396.5
|
|
Change in reserve
|
(23.3
|
)
|
|
(195.3
|
)
|
|
(21.0
|
)
|
|||
Balance at end of year
|
$
|
156.9
|
|
|
$
|
180.2
|
|
|
$
|
375.5
|
|
|
2016
|
|
2015
|
||||
Land, land improvements and leaseholds
|
$
|
272.6
|
|
|
$
|
263.0
|
|
Buildings
|
489.6
|
|
|
465.9
|
|
||
Machinery and equipment
|
5,714.0
|
|
|
5,628.2
|
|
||
Construction in progress
|
92.8
|
|
|
108.9
|
|
||
Total
|
6,569.0
|
|
|
6,466.0
|
|
||
Less accumulated depreciation
|
(4,554.6
|
)
|
|
(4,379.5
|
)
|
||
Property, plant and equipment, net
|
$
|
2,014.4
|
|
|
$
|
2,086.5
|
|
|
2016
|
|
2015
|
||||
Investments in affiliates
|
$
|
76.7
|
|
|
$
|
70.7
|
|
Goodwill
|
32.8
|
|
|
32.8
|
|
||
Deferred tax assets
|
53.2
|
|
|
62.7
|
|
||
Other
|
35.2
|
|
|
25.5
|
|
||
Other non-current assets
|
$
|
197.9
|
|
|
$
|
191.7
|
|
|
2016
|
|
2015
|
||||
Salaries, wages and benefits
|
$
|
105.6
|
|
|
$
|
69.4
|
|
Interest
|
35.2
|
|
|
24.2
|
|
||
Facility idling
|
6.1
|
|
|
22.1
|
|
||
Derivatives
|
1.8
|
|
|
41.2
|
|
||
Other
|
85.4
|
|
|
104.6
|
|
||
Accrued liabilities
|
$
|
234.1
|
|
|
$
|
261.5
|
|
Balance at beginning of year
|
|
$
|
22.1
|
|
Payments
|
|
(20.1
|
)
|
|
Additions to the reserve
|
|
4.1
|
|
|
Balance at end of year
|
|
$
|
6.1
|
|
|
|
|
|
Equity Ownership %
|
Combined Metals of Chicago, LLC
|
|
40.0%
|
Delaco Processing, LLC
|
|
49.0%
|
Rockport Roll Shop LLC
|
|
50.0%
|
Spartan Steel Coating, LLC
|
|
48.0%
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
|
$
|
286.4
|
|
|
$
|
356.4
|
|
|
$
|
386.1
|
|
Gross profit
|
|
96.3
|
|
|
68.3
|
|
|
93.2
|
|
|||
Net income (loss)
|
|
31.8
|
|
|
(9.8
|
)
|
|
10.8
|
|
|
|
2016
|
|
2015
|
||||
Current assets
|
|
$
|
94.1
|
|
|
$
|
89.3
|
|
Noncurrent assets
|
|
66.0
|
|
|
66.9
|
|
||
Current liabilities
|
|
14.4
|
|
|
14.5
|
|
||
Noncurrent liabilities
|
|
44.8
|
|
|
33.8
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales to equity investees
|
$
|
69.2
|
|
|
$
|
61.4
|
|
|
$
|
93.4
|
|
Purchases from equity investees
|
213.5
|
|
|
251.0
|
|
|
67.7
|
|
|
2016
|
|
2015
|
||||
Accounts receivable from equity investees
|
$
|
2.6
|
|
|
$
|
0.4
|
|
Accounts payable to equity investees
|
4.1
|
|
|
33.1
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
(11.3
|
)
|
|
$
|
(452.1
|
)
|
|
$
|
(94.3
|
)
|
Foreign
|
6.7
|
|
|
6.5
|
|
|
5.1
|
|
|||
Noncontrolling interests
|
66.0
|
|
|
62.8
|
|
|
62.8
|
|
|||
Income (loss) before income taxes
|
$
|
61.4
|
|
|
$
|
(382.8
|
)
|
|
$
|
(26.4
|
)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating and capital loss and tax credit carryforwards
|
$
|
835.2
|
|
|
$
|
847.3
|
|
Postretirement benefits
|
142.6
|
|
|
158.9
|
|
||
Pension benefits
|
260.3
|
|
|
278.6
|
|
||
Inventories
|
127.2
|
|
|
139.2
|
|
||
Other assets
|
125.1
|
|
|
132.8
|
|
||
Valuation allowance
|
(1,175.2
|
)
|
|
(1,215.5
|
)
|
||
Total deferred tax assets
|
315.2
|
|
|
341.3
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Depreciable assets
|
(213.3
|
)
|
|
(248.0
|
)
|
||
Other liabilities
|
(48.7
|
)
|
|
(30.6
|
)
|
||
Total deferred tax liabilities
|
(262.0
|
)
|
|
(278.6
|
)
|
||
Net deferred tax assets
|
$
|
53.2
|
|
|
$
|
62.7
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
1,215.5
|
|
|
$
|
1,000.4
|
|
|
$
|
764.1
|
|
Change in valuation allowance:
|
|
|
|
|
|
||||||
Included in income tax expense (benefit)
|
8.8
|
|
|
228.6
|
|
|
36.7
|
|
|||
Change in deferred assets in other comprehensive income
|
(49.1
|
)
|
|
(13.5
|
)
|
|
199.6
|
|
|||
Balance at end of year
|
$
|
1,175.2
|
|
|
$
|
1,215.5
|
|
|
$
|
1,000.4
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
0.2
|
|
|
0.2
|
|
|
(1.1
|
)
|
|||
Foreign
|
1.7
|
|
|
1.8
|
|
|
2.1
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
23.3
|
|
|
68.8
|
|
|
7.7
|
|
|||
State
|
2.3
|
|
|
6.5
|
|
|
0.2
|
|
|||
Benefits of operating loss carryforwards
|
(16.1
|
)
|
|
—
|
|
|
—
|
|
|||
Amount allocated to other comprehensive income
|
(4.5
|
)
|
|
(13.2
|
)
|
|
—
|
|
|||
Change in valuation allowance on beginning-of-the-year deferred tax assets
|
—
|
|
|
(0.7
|
)
|
|
(1.2
|
)
|
|||
Income tax expense
|
$
|
3.2
|
|
|
$
|
63.4
|
|
|
$
|
7.7
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense (benefit) at U.S. federal statutory rate
|
$
|
21.5
|
|
|
$
|
(134.0
|
)
|
|
$
|
(9.2
|
)
|
Income tax expense calculated on noncontrolling interests
|
(23.1
|
)
|
|
(22.0
|
)
|
|
(22.0
|
)
|
|||
State and foreign tax expense, net of federal tax
|
1.3
|
|
|
(0.9
|
)
|
|
(3.1
|
)
|
|||
Increase in deferred tax asset valuation allowance
|
8.8
|
|
|
228.6
|
|
|
36.7
|
|
|||
Amount allocated to other comprehensive income
|
(4.5
|
)
|
|
(13.2
|
)
|
|
—
|
|
|||
Stock compensation in excess of tax deduction
|
—
|
|
|
—
|
|
|
2.0
|
|
|||
Other differences
|
(0.8
|
)
|
|
4.9
|
|
|
3.3
|
|
|||
Income tax expense
|
$
|
3.2
|
|
|
$
|
63.4
|
|
|
$
|
7.7
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
130.3
|
|
|
$
|
59.9
|
|
|
$
|
53.8
|
|
Decreases for prior year tax positions
|
(4.5
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Increases (decreases) for current year tax positions
|
(1.6
|
)
|
|
70.7
|
|
|
7.7
|
|
|||
Decreases from statute lapses
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||
Balance at end of year
|
$
|
124.2
|
|
|
$
|
130.3
|
|
|
$
|
59.9
|
|
|
|
2016
|
|
2015
|
||||
Credit Facility
|
$
|
—
|
|
|
$
|
550.0
|
|
7.50% Senior Secured Notes due July 2023 (effective rate of 8.3%)
|
380.0
|
|
|
—
|
|
||
8.75% Senior Secured Notes due December 2018
|
—
|
|
|
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
|
529.8
|
|
|
529.8
|
|
||
7.625% Senior Notes due October 2021
|
406.2
|
|
|
406.2
|
|
||
8.375% Senior Notes due April 2022
|
279.8
|
|
|
290.2
|
|
||
Industrial Revenue Bonds due 2020 through 2028
|
99.3
|
|
|
99.3
|
|
||
Capital lease for Research and Innovation Center
|
25.2
|
|
|
—
|
|
||
Unamortized debt discount/premium and debt issuance costs
|
(53.7
|
)
|
|
(51.4
|
)
|
||
Total long-term debt
|
$
|
1,816.6
|
|
|
$
|
2,354.1
|
|
Year
|
|
|
Debt Maturities
|
||
2017
|
|
|
$
|
—
|
|
2018
|
|
|
—
|
|
|
2019
|
|
|
150.0
|
|
|
2020
|
|
|
537.1
|
|
|
2021
|
|
|
406.2
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
3,247.4
|
|
|
$
|
3,545.2
|
|
|
$
|
488.6
|
|
|
$
|
599.3
|
|
Service cost
|
3.0
|
|
|
2.2
|
|
|
4.9
|
|
|
7.1
|
|
||||
Interest cost
|
120.4
|
|
|
130.0
|
|
|
19.9
|
|
|
22.5
|
|
||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
25.6
|
|
|
24.9
|
|
||||
Actuarial loss (gain)
|
45.1
|
|
|
(147.8
|
)
|
|
(35.1
|
)
|
|
(83.3
|
)
|
||||
Amendments
|
8.4
|
|
|
13.3
|
|
|
—
|
|
|
(5.6
|
)
|
||||
Contributions to Zanesville retirees’ VEBA trust
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
||||
Benefits paid
|
(339.1
|
)
|
|
(295.1
|
)
|
|
(65.6
|
)
|
|
(76.5
|
)
|
||||
Annuity settlement
|
(210.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Medicare subsidy reimbursement received
|
—
|
|
|
—
|
|
|
5.4
|
|
|
3.3
|
|
||||
Foreign currency exchange rate changes
|
(0.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligations at end of year
|
$
|
2,874.8
|
|
|
$
|
3,247.4
|
|
|
$
|
443.7
|
|
|
$
|
488.6
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
2,511.4
|
|
|
$
|
2,863.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual gain (loss) on plan assets
|
193.3
|
|
|
(93.6
|
)
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
33.1
|
|
|
36.5
|
|
|
34.6
|
|
|
48.3
|
|
||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
25.6
|
|
|
24.9
|
|
||||
Benefits paid
|
(339.1
|
)
|
|
(295.1
|
)
|
|
(65.6
|
)
|
|
(76.5
|
)
|
||||
Annuity settlement
|
(215.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Medicare subsidy reimbursement received
|
—
|
|
|
—
|
|
|
5.4
|
|
|
3.3
|
|
||||
Fair value of plan assets at end of year
|
$
|
2,183.5
|
|
|
$
|
2,511.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status
|
$
|
(691.3
|
)
|
|
$
|
(736.0
|
)
|
|
$
|
(443.7
|
)
|
|
$
|
(488.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current liabilities
|
$
|
(1.3
|
)
|
|
$
|
(31.2
|
)
|
|
$
|
(40.0
|
)
|
|
$
|
(46.5
|
)
|
Noncurrent liabilities
|
(690.0
|
)
|
|
(704.8
|
)
|
|
(403.7
|
)
|
|
(442.1
|
)
|
||||
Total
|
$
|
(691.3
|
)
|
|
$
|
(736.0
|
)
|
|
$
|
(443.7
|
)
|
|
$
|
(488.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in accumulated other comprehensive loss, before taxes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Actuarial loss (gain)
|
$
|
209.7
|
|
|
$
|
323.5
|
|
|
$
|
(44.4
|
)
|
|
$
|
(48.8
|
)
|
Prior service cost (credit)
|
27.9
|
|
|
25.1
|
|
|
(138.7
|
)
|
|
(199.0
|
)
|
||||
Total
|
$
|
237.6
|
|
|
$
|
348.6
|
|
|
$
|
(183.1
|
)
|
|
$
|
(247.8
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Assumptions used to determine benefit obligations at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.93
|
%
|
|
4.15
|
%
|
|
3.82
|
%
|
|
4.04
|
%
|
|
4.22
|
%
|
|
3.90
|
%
|
Rate of compensation increase
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Subsequent year healthcare cost trend rate
|
|
|
|
|
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|||
Ultimate healthcare cost trend rate
|
|
|
|
|
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|||
Year ultimate healthcare cost trend rate begins
|
|
|
|
|
|
|
2025
|
|
|
2024
|
|
|
2020
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Assumptions used to determine pension and OPEB expense (income) for the year ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.95
|
%
|
|
3.82
|
%
|
|
4.53
|
%
|
|
4.22
|
%
|
|
3.90
|
%
|
|
4.48
|
%
|
Expected return on plan assets
|
7.25
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
|
|
|
|
|
|||
Rate of compensation increase
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
One Percentage Point
|
||||||
|
Increase
|
|
Decrease
|
||||
Effect on total service cost and interest cost components
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
Effect on postretirement benefit obligation
|
1.7
|
|
|
(1.6
|
)
|
|
Pension
Plans
|
|
Other
Benefits
|
|
Medicare
Subsidy
|
||||||
2017
|
$
|
271.4
|
|
|
$
|
41.3
|
|
|
$
|
(1.3
|
)
|
2018
|
259.8
|
|
|
39.3
|
|
|
(1.3
|
)
|
|||
2019
|
251.0
|
|
|
37.8
|
|
|
(1.4
|
)
|
|||
2020
|
239.4
|
|
|
36.2
|
|
|
(1.4
|
)
|
|||
2021
|
229.1
|
|
|
34.7
|
|
|
(1.5
|
)
|
|||
2022 through 2026
|
1,037.1
|
|
|
154.3
|
|
|
(9.0
|
)
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
|
|
Significant Other
Observable Inputs
|
|
|
|
|
||||||||||||||||
|
|
(Level 1)
|
|
(Level 2)
|
|
Total
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Investments in fair value hierarchy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. securities
|
|
$
|
169.4
|
|
|
$
|
138.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169.4
|
|
|
$
|
138.4
|
|
Global investments
|
|
—
|
|
|
—
|
|
|
191.0
|
|
|
179.6
|
|
|
191.0
|
|
|
179.6
|
|
||||||
Fixed-income investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Global investments
|
|
—
|
|
|
—
|
|
|
395.4
|
|
|
389.7
|
|
|
395.4
|
|
|
389.7
|
|
||||||
U.S. high-yield corporate securities
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
85.0
|
|
|
0.4
|
|
|
85.0
|
|
||||||
Other investments
|
|
—
|
|
|
—
|
|
|
28.9
|
|
|
37.2
|
|
|
28.9
|
|
|
37.2
|
|
||||||
Total pension investments in fair value hierarchy
|
|
$
|
169.4
|
|
|
$
|
138.4
|
|
|
$
|
615.7
|
|
|
$
|
691.5
|
|
|
$
|
785.1
|
|
|
$
|
829.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments with fair values measured at net asset value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common/collective trusts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. equity securities (a)
|
|
|
|
|
|
|
|
|
|
728.8
|
|
|
814.5
|
|
||||||||||
Global equity securities (b)
|
|
|
|
|
|
|
|
|
|
253.6
|
|
|
261.5
|
|
||||||||||
Emerging market equity securities (c)
|
|
|
|
|
|
|
|
|
|
127.8
|
|
|
103.9
|
|
||||||||||
U.S. corporate fixed-income securities (d)
|
|
|
|
|
|
|
|
|
|
207.4
|
|
|
415.8
|
|
||||||||||
U.S. Treasury securities and bonds (e)
|
|
|
|
|
|
|
|
|
|
80.4
|
|
|
85.3
|
|
||||||||||
Other
|
|
|
|
|
|
|
|
|
|
0.4
|
|
|
0.5
|
|
||||||||||
Total pension assets at fair value
|
|
|
|
|
|
|
|
|
|
$
|
2,183.5
|
|
|
$
|
2,511.4
|
|
(a)
|
Investments primarily in domestic equity securities, which may include common stocks, options and futures.
|
(b)
|
Investments primarily in global equity securities, which may include common stocks, options and futures.
|
(c)
|
Investments primarily in emerging market equity securities.
|
(d)
|
Investments primarily in domestic fixed income investments, which may include investment-grade and high-yield corporate bonds, interest rate swaps, options and futures.
|
(e)
|
Investments primarily in U.S. Treasury securities and bonds.
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Components of pension and OPEB expense (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
3.0
|
|
|
$
|
2.2
|
|
|
$
|
1.7
|
|
|
$
|
4.9
|
|
|
$
|
7.1
|
|
|
$
|
4.9
|
|
Interest cost
|
120.4
|
|
|
130.0
|
|
|
146.0
|
|
|
19.9
|
|
|
22.5
|
|
|
21.7
|
|
||||||
Expected return on plan assets
|
(167.1
|
)
|
|
(198.4
|
)
|
|
(202.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
5.6
|
|
|
4.4
|
|
|
4.3
|
|
|
(60.4
|
)
|
|
(64.6
|
)
|
|
(73.2
|
)
|
||||||
Recognized net actuarial loss (gain):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Annual amortization
|
29.2
|
|
|
31.2
|
|
|
2.5
|
|
|
(4.3
|
)
|
|
1.6
|
|
|
(1.3
|
)
|
||||||
Corridor charge (credit)
|
78.4
|
|
|
144.3
|
|
|
2.0
|
|
|
(35.3
|
)
|
|
(13.1
|
)
|
|
—
|
|
||||||
Settlement loss
|
29.9
|
|
|
1.0
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||||
Pension and OPEB expense (income)
|
$
|
99.4
|
|
|
$
|
114.7
|
|
|
$
|
(46.1
|
)
|
|
$
|
(75.2
|
)
|
|
$
|
(46.5
|
)
|
|
$
|
(44.4
|
)
|
•
|
Employer contributions to a multiemployer plan may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer stops contributing to a multiemployer plan, the remaining participating employers may need to assume the unfunded obligations of the plan.
|
•
|
If the plan becomes significantly underfunded or is unable to pay its benefits, we may be required to contribute additional amounts in excess of the rate required by the collective bargaining agreements.
|
•
|
If we choose to stop participating in a multiemployer plan, we may be required to pay that plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
Pension Fund
|
|
EIN/Pension Plan Number
|
|
Pension Protection Act Zone Status (a)
|
|
FIP/RP Status Pending/Implemented (b)
|
|
Contributions
|
|
Surcharge Imposed (c)
|
|
Expiration Date of Collective Bargaining Agreement
|
||||||||||||
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
|
||||||
Steelworkers Pension Trust
|
|
23-6648508/499
|
|
Green
|
|
Green
|
|
No
|
|
$
|
6.8
|
|
|
$
|
7.3
|
|
|
$
|
8.1
|
|
|
No
|
|
3/31/2017 to 9/1/2018 (d)
|
IAM National Pension Fund’s National Pension Plan
|
|
51-6031295/002
|
|
Green
|
|
Green
|
|
No
|
|
18.0
|
|
|
16.0
|
|
|
16.5
|
|
|
No
|
|
3/15/2018 to 5/31/2019 (e)
|
|||
|
|
|
|
|
|
|
|
|
|
$
|
24.8
|
|
|
$
|
23.3
|
|
|
$
|
24.6
|
|
|
|
|
|
(a)
|
The most recent Pension Protection Act zone status available in 2016 and 2015 is for each plan’s year-end at December 31, 2015 and 2014. The plan’s actuary certifies the zone status. Generally, plans in the red zone are less than 65% funded, plans in the yellow zone are between 65% and 80% funded, and plans in the green zone are at least 80% funded. The Steelworkers Pension Trust and IAM National Pension Fund’s National Pension Plan elected funding relief under section 431(b)(8) of the Internal Revenue Code and section 304(b)(8) of the Employment Retirement Income Security Act of 1974 (ERISA). This election allows those plans’ investment losses for the plan year ended December 31, 2008, to be amortized over 29 years for funding purposes.
|
(b)
|
The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented, as defined by ERISA.
|
(c)
|
The surcharge represents an additional required contribution due as a result of the critical funding status of the plan.
|
(d)
|
We are a party to three collective bargaining agreements (at our Ashland Works, Mansfield Works and at the AK Tube Walbridge plant) that require contributions to the Steelworkers Pension Trust. The labor contract for approximately 310 hourly employees at Mansfield Works expires on March 31, 2017. The labor contract for approximately 90 hourly employees at the AK Tube Walbridge plant expires January 22, 2018. The labor contract for approximately 725 hourly employees at the Ashland Works expires on September 1, 2018.
|
(e)
|
We are a party to three collective bargaining agreements (at our Butler Works, Middletown Works and Zanesville Works) that require contributions to the IAM National Pension Fund’s National Pension Plan. The labor contract for approximately 1,200 hourly employees at
|
|
2017
|
$
|
13.9
|
|
2018
|
12.8
|
|
|
2019
|
9.5
|
|
|
2020
|
7.5
|
|
|
2021
|
7.0
|
|
|
2022 and thereafter
|
14.2
|
|
|
Total minimum lease payments
|
$
|
64.9
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Environmental-related capital investments
|
$
|
4.9
|
|
|
$
|
7.1
|
|
|
$
|
7.2
|
|
Environmental compliance costs
|
123.9
|
|
|
133.2
|
|
|
112.4
|
|
|
2016
|
|
2015
|
||||
Accrued liabilities
|
$
|
7.3
|
|
|
$
|
5.6
|
|
Other non-current liabilities
|
39.9
|
|
|
41.1
|
|
|
Asbestos Cases Pending at
|
|
|
December 31, 2016
|
|
Cases with specific dollar claims for damages:
|
|
|
Claims up to $0.2
|
121
|
|
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)
|
131
|
|
Cases without a specific dollar claim for damages
|
208
|
|
Total asbestos cases pending
|
339
|
(a)
|
Involve a total of 2,331 plaintiffs and 17,227 defendants
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
New Claims Filed
|
|
40
|
|
|
52
|
|
|
50
|
|
|||
Pending Claims Disposed Of
|
|
84
|
|
|
68
|
|
|
90
|
|
|||
Total Amount Paid in Settlements
|
|
$
|
0.9
|
|
|
$
|
1.9
|
|
|
$
|
0.7
|
|
|
|
Final
|
|
Final
|
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%
|
|
|
Final
|
|
Final
|
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%
|
|
|
Final
|
|
Final
|
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%
|
|
|
Final
|
|
Final
|
Country
|
|
Stainless CVD Margins
|
|
Stainless AD Margins
|
China
|
|
190.71% – 75.60%
|
|
76.64% – 63.86%
|
|
|
Share-based Compensation Expense
|
|
2016
|
|
2015
|
|
2014
|
||||||
Stock options
|
|
$
|
1.0
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
Restricted stock
|
|
1.6
|
|
|
3.2
|
|
|
3.2
|
|
|||
Restricted stock units issued to Directors
|
|
1.3
|
|
|
0.9
|
|
|
1.1
|
|
|||
Performance shares
|
|
1.5
|
|
|
1.9
|
|
|
2.9
|
|
|||
Pre-tax share-based compensation expense
|
|
$
|
5.4
|
|
|
$
|
7.7
|
|
|
$
|
8.9
|
|
|
|
2016
|
|
2015
|
|
2014
|
Expected volatility
|
|
90.3% – 91.5%
|
|
67.6% – 75.9%
|
|
58.3% – 68.2%
|
Weighted-average volatility
|
|
90.7%
|
|
69.4%
|
|
62.6%
|
Expected term (in years)
|
|
3.3 – 6.7
|
|
3.1 – 6.6
|
|
3.0 – 6.5
|
Risk-free interest rate
|
|
1.2% – 1.8%
|
|
1.0% – 1.7%
|
|
0.9% – 2.3%
|
Dividend yield
|
|
—%
|
|
—%
|
|
—%
|
Weighted-average grant-date fair value per share of granted options
|
|
$1.29
|
|
$2.36
|
|
$3.50
|
Stock Options
|
|
Shares
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Remaining Contractual Life (in years)
|
|
Aggregate Intrinsic Value
|
||||||
Outstanding at December 31, 2015
|
|
3,303,992
|
|
|
$
|
9.26
|
|
|
|
|
|
|||
Granted
|
|
630,040
|
|
|
1.83
|
|
|
|
|
|
||||
Exercised
|
|
(827,688
|
)
|
|
6.68
|
|
|
|
|
|
||||
Forfeited and expired
|
|
(330,779
|
)
|
|
11.04
|
|
|
|
|
|
||||
Outstanding at December 31, 2016
|
|
2,775,565
|
|
|
8.12
|
|
|
5.3
|
|
$
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Exercisable at December 31, 2016
|
|
1,430,960
|
|
|
12.61
|
|
|
3.7
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Unvested at December 31, 2016
|
|
1,344,605
|
|
|
3.35
|
|
|
7.0
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Unvested at December 31, 2016 expected to vest
|
|
1,277,375
|
|
|
3.35
|
|
|
7.0
|
|
—
|
|
Restricted Stock Awards
|
Restricted Shares
|
|
Weighted- Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2015
|
599,315
|
|
|
$
|
4.54
|
|
Granted
|
617,460
|
|
|
1.80
|
|
|
Vested/restrictions lapsed
|
(560,343
|
)
|
|
3.21
|
|
|
Canceled
|
(31,407
|
)
|
|
2.89
|
|
|
Outstanding at December 31, 2016
|
625,025
|
|
|
3.11
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Company expected volatility
|
|
60.8
|
%
|
|
56.4
|
%
|
|
59.1
|
%
|
|||
S&P’s MidCap 400 index expected volatility
|
|
27.6
|
%
|
|
27.0
|
%
|
|
32.4
|
%
|
|||
Risk-free interest rate
|
|
1.1
|
%
|
|
0.9
|
%
|
|
0.9
|
%
|
|||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted-average grant-date fair value per performance share granted
|
|
$
|
1.74
|
|
|
$
|
3.09
|
|
|
$
|
6.40
|
|
Performance Share Awards
|
Performance Shares
|
|
Weighted- Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2015
|
1,004,294
|
|
|
$
|
4.40
|
|
Granted
|
484,500
|
|
|
1.74
|
|
|
Earned
|
(381,701
|
)
|
|
6.40
|
|
|
Expired or forfeited
|
(89,237
|
)
|
|
3.35
|
|
|
Outstanding at December 31, 2016
|
1,017,856
|
|
|
2.48
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign currency translation
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
(2.1
|
)
|
|
$
|
1.0
|
|
|
$
|
4.7
|
|
Other comprehensive income (loss)—foreign currency translation gain (loss)
|
|
(1.5
|
)
|
|
(3.1
|
)
|
|
(3.7
|
)
|
|||
Balance at end of period
|
|
$
|
(3.6
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
1.0
|
|
Cash flow hedges
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
(34.0
|
)
|
|
$
|
(32.2
|
)
|
|
$
|
18.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Gains (losses) arising in period
|
|
56.1
|
|
|
(64.2
|
)
|
|
(51.6
|
)
|
|||
Income tax expense (benefit)
|
|
2.0
|
|
|
(25.2
|
)
|
|
—
|
|
|||
Gains (losses) arising in period, net of tax
|
|
54.1
|
|
|
(39.0
|
)
|
|
(51.6
|
)
|
|||
Reclassification of losses (gains) to net income (loss) (a)
|
|
27.2
|
|
|
61.4
|
|
|
1.1
|
|
|||
Income tax expense (c)
|
|
0.9
|
|
|
24.2
|
|
|
—
|
|
|||
Net amount of reclassification of losses (gains) to net income (loss)
|
|
26.3
|
|
|
37.2
|
|
|
1.1
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
80.4
|
|
|
(1.8
|
)
|
|
(50.5
|
)
|
|||
Balance at end of period
|
|
$
|
46.4
|
|
|
$
|
(34.0
|
)
|
|
$
|
(32.2
|
)
|
Unrealized holding gains on securities
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Reclassification of gains (losses) to net income (loss)—income tax benefit (c)
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|||
Balance at end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Pension and OPEB plans
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
(151.1
|
)
|
|
$
|
(173.6
|
)
|
|
$
|
300.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Prior service credit (cost) arising in period
|
|
(8.3
|
)
|
|
(7.7
|
)
|
|
10.9
|
|
|||
Gains (losses) arising in period
|
|
11.6
|
|
|
(60.8
|
)
|
|
(422.5
|
)
|
|||
Subtotal
|
|
3.3
|
|
|
(68.5
|
)
|
|
(411.6
|
)
|
|||
Income tax expense (benefit) (c)
|
|
0.1
|
|
|
(26.0
|
)
|
|
—
|
|
|||
Gains (losses) arising in period, net of tax
|
|
3.2
|
|
|
(42.5
|
)
|
|
(411.6
|
)
|
|||
Reclassification to net income (loss):
|
|
|
|
|
|
|
||||||
Prior service costs (credits) (b)
|
|
(54.8
|
)
|
|
(60.2
|
)
|
|
(68.9
|
)
|
|||
Actuarial (gains) losses (b)
|
|
97.9
|
|
|
165.0
|
|
|
6.9
|
|
|||
Subtotal
|
|
43.1
|
|
|
104.8
|
|
|
(62.0
|
)
|
|||
Income tax (expense) benefit (c)
|
|
1.5
|
|
|
39.8
|
|
|
—
|
|
|||
Amount of reclassification to net income (loss), net of tax
|
|
41.6
|
|
|
65.0
|
|
|
(62.0
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
|
44.8
|
|
|
22.5
|
|
|
(473.6
|
)
|
|||
Balance at end of period
|
|
$
|
(106.3
|
)
|
|
$
|
(151.1
|
)
|
|
$
|
(173.6
|
)
|
(a)
|
Included in cost of products sold
|
(b)
|
Included in pension and OPEB expense (income)
|
(c)
|
Included in income tax expense (benefit)
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
|
$
|
(7.8
|
)
|
|
$
|
(509.0
|
)
|
|
$
|
(96.9
|
)
|
Less: distributed earnings to common stockholders and holders of certain stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undistributed earnings (loss)
|
|
$
|
(7.8
|
)
|
|
$
|
(509.0
|
)
|
|
$
|
(96.9
|
)
|
|
|
|
|
|
|
|
||||||
Common stockholders earnings—basic and diluted:
|
|
|
|
|
|
|
||||||
Distributed earnings to common stockholders
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss) to common stockholders
|
|
(7.7
|
)
|
|
(507.3
|
)
|
|
(96.6
|
)
|
|||
Common stockholders earnings (loss)—basic and diluted
|
|
$
|
(7.7
|
)
|
|
$
|
(507.3
|
)
|
|
$
|
(96.6
|
)
|
|
|
|
|
|
|
|
||||||
Common shares outstanding (weighted-average shares in millions):
|
|
|
|
|
|
|
||||||
Common shares outstanding for basic earnings per share
|
|
230.0
|
|
|
177.2
|
|
|
148.1
|
|
|||
Effect of exchangeable debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Effect of dilutive stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common shares outstanding for diluted earnings per share
|
|
230.0
|
|
|
177.2
|
|
|
148.1
|
|
|||
|
|
|
|
|
|
|
||||||
Basic and diluted earnings per share:
|
|
|
|
|
|
|
||||||
Distributed earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
|
(0.03
|
)
|
|
(2.86
|
)
|
|
(0.65
|
)
|
|||
Basic and diluted earnings (loss) per share
|
|
$
|
(0.03
|
)
|
|
$
|
(2.86
|
)
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
|
|
||||||
Potentially issuable common shares (in millions) excluded from earnings per share calculation due to anti-dilutive effect
|
|
3.0
|
|
|
3.6
|
|
|
9.7
|
|
|
|
•
|
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). In cases where the derivative is an option contract (including caps, floors and collars), we adjust our valuations to reflect the counterparty’s valuation assumptions. After validating that the counterparty’s assumptions for implied volatilities reflect independent source’s assumptions, we discount these 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 December 31, 2016, a spread over benchmark rates of less than 0.8% was used for derivatives valued as assets and less than 4.0% 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 to the extent that 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.
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents (a)
|
$
|
48.2
|
|
|
$
|
125.0
|
|
|
$
|
173.2
|
|
|
$
|
56.6
|
|
|
$
|
—
|
|
|
$
|
56.6
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||||
Commodity hedge contracts
|
—
|
|
|
47.0
|
|
|
47.0
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Other non-current assets—commodity hedge contracts
|
—
|
|
|
15.3
|
|
|
15.3
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Assets measured at fair value
|
$
|
48.2
|
|
|
$
|
187.4
|
|
|
$
|
235.6
|
|
|
$
|
56.6
|
|
|
$
|
1.9
|
|
|
$
|
58.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities—commodity hedge contracts
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
(41.2
|
)
|
|
$
|
(41.2
|
)
|
Other non-current liabilities—commodity hedge contracts
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(9.5
|
)
|
|
(9.5
|
)
|
||||||
Liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(2.4
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
—
|
|
|
$
|
(50.7
|
)
|
|
$
|
(50.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at other than fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt, including current portions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value
|
$
|
—
|
|
|
$
|
(2,123.2
|
)
|
|
$
|
(2,123.2
|
)
|
|
$
|
—
|
|
|
$
|
(1,573.3
|
)
|
|
$
|
(1,573.3
|
)
|
Carrying amount
|
—
|
|
|
(1,816.6
|
)
|
|
(1,816.6
|
)
|
|
—
|
|
|
(2,354.1
|
)
|
|
(2,354.1
|
)
|
(a)
|
Level 2 assets include money market mutual funds invested in U.S. Treasury obligations.
|
|
Commodity
|
|
2016
|
|
2015
|
||||
Nickel (in lbs)
|
|
—
|
|
|
164,800
|
|
||
Natural gas (in MMBTUs)
|
|
43,865,000
|
|
|
36,972,500
|
|
||
Zinc (in lbs)
|
|
58,750,000
|
|
|
54,173,800
|
|
||
Iron ore (in metric tons)
|
|
2,555,000
|
|
|
2,795,000
|
|
||
Electricity (in MWHs)
|
|
1,578,821
|
|
|
1,386,400
|
|
||
Foreign exchange contracts (in euros)
|
|
€
|
5,000,000
|
|
|
€
|
55,500,000
|
|
Asset (liability)
|
|
2016
|
|
2015
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||
Other current assets—commodity contracts
|
|
$
|
18.5
|
|
|
$
|
0.3
|
|
Other non-current assets—commodity contracts
|
|
5.2
|
|
|
0.3
|
|
||
Accrued liabilities—commodity contracts
|
|
(1.8
|
)
|
|
(40.9
|
)
|
||
Other non-current liabilities—commodity contracts
|
|
(0.1
|
)
|
|
(9.5
|
)
|
||
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
0.1
|
|
|
1.1
|
|
||
Commodity contracts
|
|
28.5
|
|
|
0.2
|
|
||
Other noncurrent assets—commodity contracts
|
|
10.1
|
|
|
—
|
|
||
Accrued liabilities—commodity contracts
|
|
—
|
|
|
(0.3
|
)
|
||
Other noncurrent liabilities—commodity contracts
|
|
(0.5
|
)
|
|
—
|
|
Gain (loss)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Derivatives in cash flow hedging relationships—
|
|
|
|
|
|
|
||||||
Commodity contracts:
|
|
|
|
|
|
|
||||||
Reclassified from accumulated other comprehensive income into cost of products sold (effective portion)
|
|
$
|
(27.2
|
)
|
|
$
|
(61.4
|
)
|
|
$
|
(1.1
|
)
|
Recorded in cost of products sold (ineffective portion and amount excluded from effectiveness testing)
|
|
(13.3
|
)
|
|
(23.6
|
)
|
|
(0.8
|
)
|
|||
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||||
Foreign exchange contracts—recognized in other income (expense)
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|
1.9
|
|
|||
Commodity contracts:
|
|
|
|
|
|
|
||||||
Recognized in net sales
|
|
—
|
|
|
2.2
|
|
|
(5.1
|
)
|
|||
Recognized in cost of products sold
|
|
38.6
|
|
|
(2.0
|
)
|
|
(35.0
|
)
|
Commodity Hedge
|
Settlement Dates
|
|
Gains (losses)
|
||
Natural gas
|
January 2017 to December 2018
|
|
$
|
19.9
|
|
Electricity
|
January 2017 to December 2018
|
|
(0.3
|
)
|
|
Zinc
|
January 2017 to December 2018
|
|
4.8
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash paid (received) during the period for:
|
|
|
|
|
|
|
||||||
Interest, net of capitalized interest
|
|
$
|
137.1
|
|
|
$
|
161.3
|
|
|
$
|
121.9
|
|
Income taxes
|
|
(2.6
|
)
|
|
0.7
|
|
|
(0.3
|
)
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Capital investments
|
|
$
|
33.2
|
|
|
$
|
34.4
|
|
|
$
|
29.5
|
|
Research and Innovation Center capital lease
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|||
Issuance of restricted stock and restricted stock units
|
|
2.3
|
|
|
4.1
|
|
|
4.5
|
|
|
|
2016
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Net sales
|
$
|
1,518.8
|
|
|
$
|
1,492.2
|
|
|
$
|
1,452.9
|
|
|
$
|
1,418.6
|
|
|
$
|
5,882.5
|
|
Operating profit (loss)
|
48.0
|
|
|
62.6
|
|
|
130.8
|
|
|
(11.2
|
)
|
|
230.2
|
|
|||||
Net income (loss) attributable to AK Holding
|
(13.6
|
)
|
|
17.3
|
|
|
50.9
|
|
|
(62.4
|
)
|
|
(7.8
|
)
|
|||||
Basic and diluted earnings (loss) per share
|
$
|
(0.08
|
)
|
|
$
|
0.08
|
|
|
$
|
0.21
|
|
|
$
|
(0.22
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2015
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Net sales
|
$
|
1,750.9
|
|
|
$
|
1,689.4
|
|
|
$
|
1,709.9
|
|
|
$
|
1,542.7
|
|
|
$
|
6,692.9
|
|
Operating profit (loss)
|
33.8
|
|
|
7.1
|
|
|
80.2
|
|
|
(34.4
|
)
|
|
86.7
|
|
|||||
Net income (loss) attributable to AK Holding
|
(306.3
|
)
|
|
(64.0
|
)
|
|
6.7
|
|
|
(145.4
|
)
|
|
(509.0
|
)
|
|||||
Basic and diluted earnings (loss) per share
|
$
|
(1.72
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.82
|
)
|
|
$
|
(2.86
|
)
|
|
Condensed Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,681.0
|
|
|
$
|
250.9
|
|
|
$
|
411.5
|
|
|
$
|
(460.9
|
)
|
|
$
|
5,882.5
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
5,005.4
|
|
|
176.1
|
|
|
299.4
|
|
|
(416.2
|
)
|
|
5,064.7
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
4.4
|
|
|
280.8
|
|
|
12.7
|
|
|
22.6
|
|
|
(43.3
|
)
|
|
277.2
|
|
||||||
Depreciation
|
—
|
|
|
187.8
|
|
|
7.0
|
|
|
21.8
|
|
|
—
|
|
|
216.6
|
|
||||||
Pension and OPEB expense (income) (exclusive of corridor charges shown below)
|
—
|
|
|
(43.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.8
|
)
|
||||||
Pension and OPEB net corridor charge
|
—
|
|
|
43.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.1
|
|
||||||
Pension settlement charges
|
—
|
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
||||||
Charges for termination of pellet agreement and related transportation costs
|
—
|
|
|
69.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.5
|
|
||||||
Total operating costs
|
4.4
|
|
|
5,567.8
|
|
|
195.8
|
|
|
343.8
|
|
|
(459.5
|
)
|
|
5,652.3
|
|
||||||
Operating profit (loss)
|
(4.4
|
)
|
|
113.2
|
|
|
55.1
|
|
|
67.7
|
|
|
(1.4
|
)
|
|
230.2
|
|
||||||
Interest expense
|
—
|
|
|
162.3
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
163.9
|
|
||||||
Other income (expense)
|
—
|
|
|
(16.4
|
)
|
|
8.1
|
|
|
8.6
|
|
|
(5.2
|
)
|
|
(4.9
|
)
|
||||||
Income (loss) before income taxes
|
(4.4
|
)
|
|
(65.5
|
)
|
|
63.2
|
|
|
74.7
|
|
|
(6.6
|
)
|
|
61.4
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(21.9
|
)
|
|
24.0
|
|
|
3.6
|
|
|
(2.5
|
)
|
|
3.2
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(3.4
|
)
|
|
40.2
|
|
|
—
|
|
|
(0.7
|
)
|
|
(36.1
|
)
|
|
—
|
|
||||||
Net income (loss)
|
(7.8
|
)
|
|
(3.4
|
)
|
|
39.2
|
|
|
70.4
|
|
|
(40.2
|
)
|
|
58.2
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
66.0
|
|
|
—
|
|
|
66.0
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
(7.8
|
)
|
|
(3.4
|
)
|
|
39.2
|
|
|
4.4
|
|
|
(40.2
|
)
|
|
(7.8
|
)
|
||||||
Other comprehensive income (loss)
|
123.7
|
|
|
123.7
|
|
|
—
|
|
|
(1.5
|
)
|
|
(122.2
|
)
|
|
123.7
|
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
115.9
|
|
|
$
|
120.3
|
|
|
$
|
39.2
|
|
|
$
|
2.9
|
|
|
$
|
(162.4
|
)
|
|
$
|
115.9
|
|
Condensed Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
6,498.2
|
|
|
$
|
256.2
|
|
|
$
|
533.0
|
|
|
$
|
(594.5
|
)
|
|
$
|
6,692.9
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
5,984.9
|
|
|
165.7
|
|
|
425.1
|
|
|
(543.7
|
)
|
|
6,032.0
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
4.9
|
|
|
270.4
|
|
|
13.1
|
|
|
22.6
|
|
|
(49.1
|
)
|
|
261.9
|
|
||||||
Depreciation
|
—
|
|
|
187.7
|
|
|
7.4
|
|
|
20.9
|
|
|
—
|
|
|
216.0
|
|
||||||
Pension and OPEB expense (income) (exclusive of corridor charges shown below)
|
—
|
|
|
(63.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63.0
|
)
|
||||||
Pension and OPEB net corridor charge
|
—
|
|
|
131.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131.2
|
|
||||||
Charge for facility idling
|
—
|
|
|
28.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.1
|
|
||||||
Total operating costs
|
4.9
|
|
|
6,539.3
|
|
|
186.2
|
|
|
468.6
|
|
|
(592.8
|
)
|
|
6,606.2
|
|
||||||
Operating profit (loss)
|
(4.9
|
)
|
|
(41.1
|
)
|
|
70.0
|
|
|
64.4
|
|
|
(1.7
|
)
|
|
86.7
|
|
||||||
Interest expense
|
—
|
|
|
171.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
173.0
|
|
||||||
Impairment of Magnetation investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(256.3
|
)
|
|
—
|
|
|
(256.3
|
)
|
||||||
Impairment of AFSG investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(41.6
|
)
|
|
—
|
|
|
(41.6
|
)
|
||||||
Other income (expense)
|
—
|
|
|
6.4
|
|
|
6.6
|
|
|
(11.6
|
)
|
|
—
|
|
|
1.4
|
|
||||||
Income (loss) before income taxes
|
(4.9
|
)
|
|
(205.7
|
)
|
|
76.6
|
|
|
(247.1
|
)
|
|
(1.7
|
)
|
|
(382.8
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
|
39.6
|
|
|
29.1
|
|
|
(4.6
|
)
|
|
(0.7
|
)
|
|
63.4
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(504.1
|
)
|
|
(258.8
|
)
|
|
—
|
|
|
0.6
|
|
|
762.3
|
|
|
—
|
|
||||||
Net income (loss)
|
(509.0
|
)
|
|
(504.1
|
)
|
|
47.5
|
|
|
(241.9
|
)
|
|
761.3
|
|
|
(446.2
|
)
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
62.8
|
|
|
—
|
|
|
62.8
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
(509.0
|
)
|
|
(504.1
|
)
|
|
47.5
|
|
|
(304.7
|
)
|
|
761.3
|
|
|
(509.0
|
)
|
||||||
Other comprehensive income (loss)
|
17.2
|
|
|
17.2
|
|
|
—
|
|
|
(3.1
|
)
|
|
(14.1
|
)
|
|
17.2
|
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
(491.8
|
)
|
|
$
|
(486.9
|
)
|
|
$
|
47.5
|
|
|
$
|
(307.8
|
)
|
|
$
|
747.2
|
|
|
$
|
(491.8
|
)
|
Condensed Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
6,284.2
|
|
|
$
|
326.4
|
|
|
$
|
553.9
|
|
|
$
|
(658.8
|
)
|
|
$
|
6,505.7
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
5,937.6
|
|
|
244.4
|
|
|
439.6
|
|
|
(613.9
|
)
|
|
6,007.7
|
|
||||||
Selling and administrative expenses (exclusive of items shown separately below)
|
4.6
|
|
|
251.0
|
|
|
11.9
|
|
|
27.7
|
|
|
(48.0
|
)
|
|
247.2
|
|
||||||
Depreciation
|
—
|
|
|
176.1
|
|
|
5.0
|
|
|
20.8
|
|
|
—
|
|
|
201.9
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(92.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92.5
|
)
|
||||||
Pension corridor charge
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
||||||
Total operating costs
|
4.6
|
|
|
6,274.2
|
|
|
261.3
|
|
|
488.1
|
|
|
(661.9
|
)
|
|
6,366.3
|
|
||||||
Operating profit (loss)
|
(4.6
|
)
|
|
10.0
|
|
|
65.1
|
|
|
65.8
|
|
|
3.1
|
|
|
139.4
|
|
||||||
Interest expense
|
—
|
|
|
142.1
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
144.7
|
|
||||||
Other income (expense)
|
—
|
|
|
(17.7
|
)
|
|
6.5
|
|
|
(9.9
|
)
|
|
—
|
|
|
(21.1
|
)
|
||||||
Income (loss) before income taxes
|
(4.6
|
)
|
|
(149.8
|
)
|
|
71.6
|
|
|
53.3
|
|
|
3.1
|
|
|
(26.4
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(19.2
|
)
|
|
28.6
|
|
|
(2.9
|
)
|
|
1.2
|
|
|
7.7
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(92.3
|
)
|
|
38.3
|
|
|
—
|
|
|
(0.7
|
)
|
|
54.7
|
|
|
—
|
|
||||||
Net income (loss)
|
(96.9
|
)
|
|
(92.3
|
)
|
|
43.0
|
|
|
55.5
|
|
|
56.6
|
|
|
(34.1
|
)
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
62.8
|
|
|
—
|
|
|
62.8
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
(96.9
|
)
|
|
(92.3
|
)
|
|
43.0
|
|
|
(7.3
|
)
|
|
56.6
|
|
|
(96.9
|
)
|
||||||
Other comprehensive income (loss)
|
(527.8
|
)
|
|
(527.8
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
531.5
|
|
|
(527.8
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
(624.7
|
)
|
|
$
|
(620.1
|
)
|
|
$
|
43.0
|
|
|
$
|
(11.0
|
)
|
|
$
|
588.1
|
|
|
$
|
(624.7
|
)
|
Condensed 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
|
|
||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 (DEFICIT)
|
(272.2
|
)
|
|
(3,227.1
|
)
|
|
1,640.6
|
|
|
134.9
|
|
|
1,814.5
|
|
|
90.7
|
|
||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
(272.2
|
)
|
|
$
|
660.3
|
|
|
$
|
1,665.9
|
|
|
$
|
167.0
|
|
|
$
|
1,815.0
|
|
|
$
|
4,036.0
|
|
Condensed Balance Sheets
|
|||||||||||||||||||||||
December 31, 2015
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
27.0
|
|
|
$
|
5.7
|
|
|
$
|
23.9
|
|
|
$
|
—
|
|
|
$
|
56.6
|
|
Accounts receivable, net
|
—
|
|
|
411.9
|
|
|
26.3
|
|
|
29.2
|
|
|
(22.5
|
)
|
|
444.9
|
|
||||||
Inventory, net
|
—
|
|
|
1,149.6
|
|
|
39.7
|
|
|
47.0
|
|
|
(10.0
|
)
|
|
1,226.3
|
|
||||||
Other current assets
|
—
|
|
|
75.6
|
|
|
0.3
|
|
|
2.5
|
|
|
—
|
|
|
78.4
|
|
||||||
Total current assets
|
—
|
|
|
1,664.1
|
|
|
72.0
|
|
|
102.6
|
|
|
(32.5
|
)
|
|
1,806.2
|
|
||||||
Property, plant and equipment
|
—
|
|
|
5,763.8
|
|
|
168.6
|
|
|
533.6
|
|
|
—
|
|
|
6,466.0
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,218.0
|
)
|
|
(80.3
|
)
|
|
(81.2
|
)
|
|
—
|
|
|
(4,379.5
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,545.8
|
|
|
88.3
|
|
|
452.4
|
|
|
—
|
|
|
2,086.5
|
|
||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in subsidiaries
|
(3,541.0
|
)
|
|
1,346.0
|
|
|
—
|
|
|
68.2
|
|
|
2,126.8
|
|
|
—
|
|
||||||
Inter-company accounts
|
2,563.4
|
|
|
(3,600.9
|
)
|
|
1,398.1
|
|
|
(453.5
|
)
|
|
92.9
|
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
125.6
|
|
|
33.0
|
|
|
33.1
|
|
|
—
|
|
|
191.7
|
|
||||||
TOTAL ASSETS
|
$
|
(977.6
|
)
|
|
$
|
1,080.6
|
|
|
$
|
1,591.4
|
|
|
$
|
202.8
|
|
|
$
|
2,187.2
|
|
|
$
|
4,084.4
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
669.0
|
|
|
$
|
11.7
|
|
|
$
|
23.7
|
|
|
$
|
(1.0
|
)
|
|
$
|
703.4
|
|
Accrued liabilities
|
—
|
|
|
242.3
|
|
|
6.5
|
|
|
12.7
|
|
|
—
|
|
|
261.5
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
77.3
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
77.7
|
|
||||||
Total current liabilities
|
—
|
|
|
988.6
|
|
|
18.2
|
|
|
36.8
|
|
|
(1.0
|
)
|
|
1,042.6
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
2,354.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,354.1
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
1,143.6
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
1,146.9
|
|
||||||
Other non-current liabilities
|
—
|
|
|
135.3
|
|
|
0.9
|
|
|
0.2
|
|
|
—
|
|
|
136.4
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
4,621.6
|
|
|
19.1
|
|
|
40.3
|
|
|
(1.0
|
)
|
|
4,680.0
|
|
||||||
Equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
(977.6
|
)
|
|
(3,541.0
|
)
|
|
1,572.3
|
|
|
(219.5
|
)
|
|
2,188.2
|
|
|
(977.6
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
382.0
|
|
|
—
|
|
|
382.0
|
|
||||||
TOTAL EQUITY (DEFICIT)
|
(977.6
|
)
|
|
(3,541.0
|
)
|
|
1,572.3
|
|
|
162.5
|
|
|
2,188.2
|
|
|
(595.6
|
)
|
||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
(977.6
|
)
|
|
$
|
1,080.6
|
|
|
$
|
1,591.4
|
|
|
$
|
202.8
|
|
|
$
|
2,187.2
|
|
|
$
|
4,084.4
|
|
Condensed Statements of Cash Flows
|
|||||||||||||||||||||||
Year Ended December 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
|
$
|
(3.1
|
)
|
|
$
|
186.5
|
|
|
$
|
44.3
|
|
|
$
|
92.2
|
|
|
$
|
(15.3
|
)
|
|
$
|
304.6
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(116.0
|
)
|
|
(8.8
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(127.6
|
)
|
||||||
Other investing items, net
|
—
|
|
|
3.0
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
2.3
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(113.0
|
)
|
|
(8.8
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(125.3
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (repayments) under credit facility
|
—
|
|
|
(550.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550.0
|
)
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
380.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
380.0
|
|
||||||
Redemption of long-term debt
|
—
|
|
|
(392.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(392.8
|
)
|
||||||
Proceeds from issuance of common stock
|
600.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600.4
|
|
||||||
Debt issuance costs
|
—
|
|
|
(20.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.4
|
)
|
||||||
Inter-company activity
|
(602.4
|
)
|
|
630.5
|
|
|
(36.8
|
)
|
|
(6.6
|
)
|
|
15.3
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(85.1
|
)
|
|
—
|
|
|
(85.1
|
)
|
||||||
Other financing items, net
|
5.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
||||||
Net cash flows from financing activities
|
3.1
|
|
|
47.4
|
|
|
(36.8
|
)
|
|
(91.7
|
)
|
|
15.3
|
|
|
(62.7
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
120.9
|
|
|
(1.3
|
)
|
|
(3.0
|
)
|
|
—
|
|
|
116.6
|
|
||||||
Cash and equivalents, beginning of year
|
—
|
|
|
27.0
|
|
|
5.7
|
|
|
23.9
|
|
|
—
|
|
|
56.6
|
|
||||||
Cash and equivalents, end of year
|
$
|
—
|
|
|
$
|
147.9
|
|
|
$
|
4.4
|
|
|
$
|
20.9
|
|
|
$
|
—
|
|
|
$
|
173.2
|
|
Condensed Statements of Cash Flows
|
|||||||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(3.7
|
)
|
|
$
|
49.0
|
|
|
$
|
50.6
|
|
|
$
|
108.1
|
|
|
$
|
(3.7
|
)
|
|
$
|
200.3
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(85.0
|
)
|
|
(9.0
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
(99.0
|
)
|
||||||
Proceeds from sale of equity investee
|
—
|
|
|
25.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
||||||
Proceeds from AFSG Holdings, Inc. distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|
—
|
|
|
14.0
|
|
||||||
Other investing items, net
|
—
|
|
|
12.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.5
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(47.5
|
)
|
|
(9.0
|
)
|
|
9.0
|
|
|
—
|
|
|
(47.5
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (repayments) under credit facility
|
—
|
|
|
(55.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55.0
|
)
|
||||||
Redemption of long-term debt
|
—
|
|
|
(14.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.1
|
)
|
||||||
Inter-company activity
|
4.7
|
|
|
66.1
|
|
|
(40.4
|
)
|
|
(34.1
|
)
|
|
3.7
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(96.3
|
)
|
|
—
|
|
|
(96.3
|
)
|
||||||
Other financing items, net
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||||
Net cash flows from financing activities
|
3.7
|
|
|
(3.0
|
)
|
|
(40.4
|
)
|
|
(130.4
|
)
|
|
3.7
|
|
|
(166.4
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(1.5
|
)
|
|
1.2
|
|
|
(13.3
|
)
|
|
—
|
|
|
(13.6
|
)
|
||||||
Cash and equivalents, beginning of year
|
—
|
|
|
28.5
|
|
|
4.5
|
|
|
37.2
|
|
|
—
|
|
|
70.2
|
|
||||||
Cash and equivalents, end of year
|
$
|
—
|
|
|
$
|
27.0
|
|
|
$
|
5.7
|
|
|
$
|
23.9
|
|
|
$
|
—
|
|
|
$
|
56.6
|
|
Condensed Statements of Cash Flows
|
|||||||||||||||||||||||
Year Ended December 31, 2014
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(3.4
|
)
|
|
$
|
(447.2
|
)
|
|
$
|
38.1
|
|
|
$
|
92.4
|
|
|
$
|
(2.7
|
)
|
|
$
|
(322.8
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(63.1
|
)
|
|
(5.3
|
)
|
|
(12.7
|
)
|
|
—
|
|
|
(81.1
|
)
|
||||||
Investments in Magnetation joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
|
—
|
|
|
(100.0
|
)
|
||||||
Investments in acquired business, net of cash acquired
|
—
|
|
|
(690.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(690.3
|
)
|
||||||
Other investing items, net
|
—
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(739.8
|
)
|
|
(5.3
|
)
|
|
(112.7
|
)
|
|
—
|
|
|
(857.8
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (repayments) under credit facility
|
—
|
|
|
515.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
515.0
|
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
427.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
427.1
|
|
||||||
Redemption of long-term debt
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||||
Proceeds from issuance of common stock
|
345.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345.3
|
|
||||||
Debt issuance costs
|
—
|
|
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.5
|
)
|
||||||
Inter-company activity
|
(341.0
|
)
|
|
272.9
|
|
|
(28.3
|
)
|
|
93.7
|
|
|
2.7
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(61.0
|
)
|
|
—
|
|
|
(61.0
|
)
|
||||||
Other financing items, net
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
(4.6
|
)
|
||||||
Net cash flows from financing activities
|
3.4
|
|
|
1,198.7
|
|
|
(28.3
|
)
|
|
29.0
|
|
|
2.7
|
|
|
1,205.5
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
11.7
|
|
|
4.5
|
|
|
8.7
|
|
|
—
|
|
|
24.9
|
|
||||||
Cash and equivalents, beginning of year
|
—
|
|
|
16.8
|
|
|
—
|
|
|
28.5
|
|
|
—
|
|
|
45.3
|
|
||||||
Cash and equivalents, end of year
|
$
|
—
|
|
|
$
|
28.5
|
|
|
$
|
4.5
|
|
|
$
|
37.2
|
|
|
$
|
—
|
|
|
$
|
70.2
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
a)
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets;
|
b)
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and
|
c)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.
|
Dated:
|
February 17, 2017
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
Dated:
|
February 17, 2017
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
Item 16.
|
Form 10-K Summary.
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation of AK Steel Holding Corporation (incorporated herein by reference to Exhibit 3.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, as filed with the Commission on October 25, 2016).
|
|
|
|
3.2
|
|
By-laws of AK Steel Holding Corporation, as amended and restated as of January 19, 2017 (incorporated herein by reference to Exhibit 3.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on January 20, 2017).
|
|
|
|
4.1
|
|
Indenture, dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on May 11, 2010).
|
|
|
|
4.1(a)
|
|
First Supplemental Indenture, dated as of May 11, 2010, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.2 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on May 11, 2010).
|
|
|
|
4.1(b)
|
|
Second Supplemental Indenture, dated as of March 22, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on March 22, 2012).
|
|
|
|
4.1(c)
|
|
Third Supplemental Indenture, dated as of November 20, 2012, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as guarantor, and U.S. Bank, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on November 20, 2012).
|
|
|
|
4.1(d)
|
|
Fourth Supplemental Indenture, dated as of April 29, 2014, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as parent guarantor, AK Tube LLC and AK Steel Properties, Inc., as subsidiary guarantors, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.2 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q, as filed with the Commission on May 2, 2014).
|
|
|
|
4.1(e)
|
|
Fifth Supplemental Indenture, dated as of September 16, 2014, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as parent guarantor, AK Steel Properties, Inc. and AK Tube LLC, as subsidiary guarantors, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on September 16, 2014).
|
|
|
|
4.1(f)
|
|
Sixth Supplemental Indenture, dated as of July 27, 2016, among AK Steel Corporation, as issuer, AK Steel Holding Corporation, as parent guarantor, Mountain State Carbon, LLC, as subsidiary guarantor, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.3 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
4.2
|
|
Indenture, dated as of June 20, 2016, among AK Steel Corporation, as issuer, the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent (incorporated herein by reference to Exhibit 4.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on June 20, 2016).
|
|
|
|
4.2(a)
|
|
First Supplemental Indenture dated as of July 27, 2016, among AK Steel Corporation, as issuer, Mountain State Carbon, LLC, as subsidiary guarantor and U.S. Bank National Association, as trustee and collateral agent (incorporated herein by reference to Exhibit 4.2 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.1+
|
|
Executive Deferred Compensation Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.2 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, as filed with the Commission on November 6, 2007).
|
|
|
|
Exhibit
Number
|
|
Description
|
10.2+
|
|
Directors’ Deferred Compensation Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.3 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, as filed with the Commission on November 6, 2007).
|
|
|
|
10.3
|
|
Policy Concerning Severance Agreements with Senior Executives (incorporated herein by reference to Exhibit 99.3 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, as filed with the Commission on November 14, 2003).
|
|
|
|
10.4+
|
|
Annual Management Incentive Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with the Commission on August 5, 2008).
|
|
|
|
10.4(a)+
|
|
First Amendment to the Annual Management Incentive Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.4(a) to AK Steel Holding Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Commission on February 21, 2014).
|
|
|
|
10.4(b)+
|
|
Second Amendment to the Annual Management Incentive Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, as filed with the Commission on May 5, 2015).
|
|
|
|
10.5+
|
|
Supplemental Thrift Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.5 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, as filed with the Commission on November 6, 2007).
|
|
|
|
10.6+
|
|
Executive Minimum and Supplemental Retirement Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, as filed with the Commission on November 6, 2007).
|
|
|
|
10.6(a)+
|
|
First Amendment to the Executive Minimum and Supplemental Retirement Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, as filed with the Commission on November 4, 2008).
|
|
|
|
10.6(b)+
|
|
Second Amendment to the Executive Minimum and Supplemental Retirement Plan, as amended and restated as of October 18, 2007 (incorporated herein by reference to Exhibit 10.4 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, as filed with the Commission on November 3, 2009).
|
|
|
|
10.7+
|
|
Executive Retirement Income Plan adopted March 20, 2014 (incorporated by reference to Exhibit 10.10 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
*10.8+
|
|
Form of Executive Officer Severance Agreement.
|
|
|
|
*10.9+
|
|
Form of Executive Officer Change of Control Agreement.
|
|
|
|
10.10+
|
|
Form of Restricted Stock Award for special bonus grants to executive officers and selected key managers of AK Steel (incorporated herein by reference to Exhibit 10.25 to AK Steel Holding Corporation’s Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the Commission on March 8, 2005).
|
|
|
|
10.11+
|
|
Form of the Performance Share Award Agreement for performance-based equity awards to executive officers and key managers of AK Steel (incorporated herein by reference to Exhibit 10.26 to AK Steel Holding Corporation’s Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the Commission on March 8, 2005).
|
|
|
|
Exhibit
Number
|
|
Description
|
10.12+
|
|
AK Steel Holding Corporation Stock Incentive Plan, as amended and restated as of May 26, 2016 (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on May 27, 2016).
|
|
|
|
10.13+
|
|
Long-Term Performance Plan, as amended and restated as of April 12, 2010 (incorporated herein by reference to Annex A to AK Steel Holding Corporation’s Proxy Statement for its 2010 Annual Meeting of Stockholders held May 27, 2010, as filed with the Commission on April 12, 2010).
|
|
|
|
10.14
|
|
Amended and Restated Loan and Security Agreement, dated as of March 17, 2014, among AK Steel, as Borrower, and certain financial institutions as the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on March 18, 2014).
|
|
|
|
10.14(a)
|
|
Joinder to Amended and Restated Loan and Security Agreement dated as of April 29, 2014, among AK Steel Corporation, AK Tube LLC and Bank of America, N.A., as agent for the Lenders (incorporated by reference to Exhibit 10.4 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
10.14(b)
|
|
First Amendment to Amended and Restated Loan and Security Agreement, dated as of September 16, 2014, among AK Steel Corporation, as Borrower, AK Tube LLC, as Borrowing Base Guarantor, certain financial institutions, as Lenders, and Bank of America, N.A., as agent for the Lenders (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on September 17, 2014).
|
|
|
|
10.14(c)
|
|
Second Amendment to Amended and Restated Loan and Security Agreement, dated as of July 27, 2016, among AK Steel Corporation, as Borrower, AK Tube LLC and Mountain State Carbon, LLC, each as Borrowing Base Guarantors, certain financial institutions as the lenders party thereto and Bank of America, N.A., as agent for the Lenders (incorporated herein by reference to Exhibit 10.4 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.14(d)
|
|
Joinder to Amended and Restated Loan and Security Agreement, dated as of July 27, 2016, among AK Steel Corporation, Mountain State Carbon, LLC and Bank of America, N.A., as agent for the Lenders (incorporated herein by reference to Exhibit 10.5 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.15
|
|
Air Quality Facilities Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Ohio Air Quality Development Authority - $36,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on February 7, 2012).
|
|
|
|
10.15(a)
|
|
Guaranty Agreement dated as of April 29, 2014, by AK Tube LLC and AK Steel Properties, Inc. to Wells Fargo Bank, National Association, as trustee, pertaining to the Ohio Air Quality Development Authority - $36,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated by reference to Exhibit 10.7 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
10.15(b)
|
|
Guaranty Agreement, dated as of July 27, 2016, by Mountain State Carbon, LLC to Wells Fargo Bank, National Association, as trustee, pertaining to the Ohio Air Quality Development Authority – $36,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.8 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.16
|
|
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the City of Rockport, Indiana - $30,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.2 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on February 7, 2012).
|
|
|
|
10.16(a)
|
|
Guaranty Agreement dated as of April 29, 2014, by AK Tube LLC and AK Steel Properties, Inc. to Wells Fargo Bank, National Association, as trustee, pertaining to City of Rockport, Indiana - $30,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated by reference to Exhibit 10.8 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
Exhibit
Number
|
|
Description
|
10.16(b)
|
|
Guaranty Agreement, dated as of July 27, 2016, by Mountain State Carbon, LLC to Wells Fargo Bank, National Association, as trustee, pertaining to City of Rockport, Indiana – $30,000,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.9 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.17
|
|
Loan Agreement dated as of February 1, 2012 between AK Steel Corporation and the Butler County Industrial Development Authority - $7,300,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.3 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on February 7, 2012).
|
|
|
|
10.17(a)
|
|
Guaranty Agreement dated as of April 29, 2014, by AK Tube LLC and AK Steel Properties, Inc. to Wells Fargo Bank, National Association, as trustee, pertaining to Butler County Industrial Development Authority - $7,300,000 Revenue Refunding Bonds, Series 2012-A (incorporated by reference to Exhibit 10.9 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
10.17(b)
|
|
Guaranty Agreement, dated as of July 27, 2016, by Mountain State Carbon, LLC to Wells Fargo Bank, National Association, as trustee, pertaining to Butler County Industrial Development Authority – $7,300,000 Revenue Refunding Bonds, Series 2012-A (incorporated herein by reference to Exhibit 10.10 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.18
|
|
Security Agreement, dated as of June 20, 2016, among the AK Steel Corporation and U.S. Bank National Association, as trustee and collateral agent (incorporated herein by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on June 20, 2016).
|
|
|
|
10.18(a)
|
|
Security Agreement Supplement, dated as of July 27, 2016, between Mountain State Carbon, LLC and U.S. Bank National Association, as collateral agent (incorporated herein by reference to Exhibit 10.6 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.19
|
|
Collateral Trust Agreement dated as of November 20, 2012, among AK Steel and U.S. Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 10.4 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on November 20, 2012).
|
|
|
|
10.19(a)
|
|
Supplement to Collateral Trust Agreement dated as of April 29, 2014, among AK Steel Corporation, AK Tube LLC, AK Steel Properties, Inc. and U.S. Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 10.6 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 2, 2014).
|
|
|
|
10.19(b)
|
|
Collateral Trust Agreement Joinder, dated as of June 20, 2016, among AK Steel Corporation and U.S. Bank National Association, as trustee and collateral agent (incorporated herein by reference to Exhibit 10.2 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on June 20, 2016).
|
|
|
|
10.19(c)
|
|
Supplement to Collateral Trust Agreement, dated as of July 27, 2016, among AK Steel Corporation, Mountain State Carbon, LLC and U.S. Bank National Association, as collateral agent (incorporated herein by reference to Exhibit 10.7 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as filed with the Commission on July 29, 2016).
|
|
|
|
10.20+
|
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to AK Steel Holding Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, as filed with the Commission on November 1, 2013).
|
|
|
|
10.21
|
|
Membership Interest Purchase Agreement, dated July 18, 2014, by and among Severstal Columbus Holdings, LLC, Severstal Dearborn, LLC and AK Steel Corporation (incorporated by reference to Exhibit 2.1 to AK Steel Holding Corporation’s Current Report on Form 8-K, as filed with the Commission on July 22, 2014).
|
|
|
|
*12.1
|
|
Statement re: Computation of Ratio of Earnings to Combined Fixed Charges.
|
|
|
|
AK Steel Holding Corporation
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
Signature & Title
|
|
Signature & Title
|
|
|
|
/s/ Dr. James A. Thomson
|
|
/s/ William K. Gerber
|
Dr. James A. Thomson
|
|
William K. Gerber
|
Chairman of the Board
|
|
Director
|
|
|
|
/s/ Roger K. Newport
|
|
/s/ Robert H. Jenkins
|
Roger K. Newport
|
|
Robert H. Jenkins
|
Chief Executive Officer and Director
|
|
Director
|
|
|
|
/s/ Jaime Vasquez
|
|
/s/ Gregory B. Kenny
|
Jaime Vasquez
|
|
Gregory B. Kenny
|
Vice President, Finance and Chief Financial Officer
|
|
Director
|
|
|
|
/s/ Gregory A. Hoffbauer
|
|
/s/ Ralph S. Michael, III
|
Gregory A. Hoffbauer
|
|
Ralph S. Michael, III
|
Vice President, Controller and Chief Accounting Officer
|
|
Director
|
|
|
|
/s/ Dennis C. Cuneo
|
|
/s/ Dwayne A. Wilson
|
Dennis C. Cuneo
|
|
Dwayne A. Wilson
|
Director
|
|
Director
|
|
|
|
/s/ Sheri H. Edison
|
|
/s/ Vicente Wright
|
Sheri H. Edison
|
|
Vicente Wright
|
Director
|
|
Director
|
|
|
|
/s/ Mark G. Essig
|
|
/s/ Arlene M. Yocum
|
Mark G. Essig
|
|
Arlene M. Yocum
|
Director
|
|
Director
|
|
|
|
F.
|
Executive Responsibilities.
|
Accepted and agreed to this ____ day
|
AK STEEL HOLDING CORPORATION
|
H.
|
Executive Responsibilities.
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Combined fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest credit
|
$
|
3.1
|
|
|
$
|
2.1
|
|
|
$
|
2.7
|
|
|
$
|
2.7
|
|
|
$
|
2.5
|
|
Interest factor in rent expense
|
5.6
|
|
|
5.3
|
|
|
4.3
|
|
|
3.3
|
|
|
3.8
|
|
|||||
Other interest and fixed charges
|
164.0
|
|
|
173.1
|
|
|
144.2
|
|
|
127.6
|
|
|
86.8
|
|
|||||
Preference dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total combined fixed charges
|
$
|
172.7
|
|
|
$
|
180.5
|
|
|
$
|
151.2
|
|
|
$
|
133.6
|
|
|
$
|
93.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings—pre-tax income (loss) with applicable adjustments
|
$
|
166.4
|
|
|
$
|
(239.8
|
)
|
|
$
|
77.1
|
|
|
$
|
93.7
|
|
|
$
|
(159.0
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to combined fixed charges
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest credit
|
$
|
3.1
|
|
|
$
|
2.1
|
|
|
$
|
2.7
|
|
|
$
|
2.7
|
|
|
$
|
2.5
|
|
Interest factor in rent expense
|
5.6
|
|
|
5.3
|
|
|
4.3
|
|
|
3.3
|
|
|
3.8
|
|
|||||
Other interest and fixed charges
|
164.0
|
|
|
173.1
|
|
|
144.2
|
|
|
127.6
|
|
|
86.8
|
|
|||||
Total fixed charges
|
$
|
172.7
|
|
|
$
|
180.5
|
|
|
$
|
151.2
|
|
|
$
|
133.6
|
|
|
$
|
93.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings—pre-tax income (loss) with applicable adjustments
|
$
|
166.4
|
|
|
$
|
(239.8
|
)
|
|
$
|
77.1
|
|
|
$
|
93.7
|
|
|
$
|
(159.0
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
|
NM*
|
|
(1)
|
Registration Statement (Form S-8 No. 333-124296) pertaining to the AK Steel Holding Corporation Stock Incentive Plan (as amended and restated as of January 16, 2003),
|
(2)
|
Registration Statement (Form S-3 No. 333-166303) of AK Steel Holding Corporation and AK Steel Corporation (as amended as of November 13, 2012),
|
(3)
|
Registration Statement (Form S-8 No. 333-168541) pertaining to the AK Steel Holding Corporation Stock Incentive Plan (as amended and restated as of March 18, 2010),
|
(4)
|
Registration Statement (Form S-8 No. 333-199853) pertaining to the AK Steel Holding Corporation Stock Incentive Plan (as amended and restated as of March 20, 2014),
|
(5)
|
Registration Statement (Form S-3 No. 333-194078) of AK Steel Holding Corporation and AK Steel Corporation (as amended as of September 8, 2014),
|
(6)
|
Registration Statement (Form S-3 No. 333-210785) of AK Steel Holding Corporation and AK Steel Corporation (as amended as of June 13, 2016), and
|
(7)
|
Registration Statement (Form S-8 No. 333-212777) pertaining to the AK Steel Holding Corporation Stock Incentive Plan (as amended and restated as of May 26, 2016),
|
1.
|
I have reviewed this annual report on Form 10-K of AK Steel Holding Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
February 17, 2017
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of AK Steel Holding Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
February 17, 2017
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
(1)
|
This Annual Report on Form 10-K for the period ending December 31, 2016 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)), and,
|
(2)
|
The information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
February 17, 2017
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer
|
(1)
|
This Annual Report on Form 10-K for the period ending December 31, 2016 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)), and,
|
(2)
|
The information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
February 17, 2017
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
(A)
|
The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the Mine Act (30 U.S.C. 814) for which the operator received a citation from MSHA;
|
(B)
|
The total number of orders issued under section 104(b) of the Mine Act (30 U.S.C. 814(b));
|
(C)
|
The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the Mine Act (30 U.S.C. 814(d));
|
(D)
|
The total number of imminent danger orders issued under section 107(a) of the Mine Act (30 U.S.C. 817(a));
|
(E)
|
The total dollar value of proposed assessments from MSHA under the Mine Act (30 U.S.C. 801 et seq.);
|
(F)
|
Legal actions pending before Federal Mine Safety and Health Review Commission (“FMSHRC”) involving such coal or other mine or plant as of the last day of the period;
|
(G)
|
Legal actions initiated before the FMSHRC involving such coal or other mine or plant during the period; and
|
(H)
|
Legal actions resolved before the FMSHRC involving such coal or other mine or plant during the period.
|
MSHA
|
|
Mine Name
|
|
Significant and Substantial Citations Issued (Section 104 of the Mine Act) *Excludes 104(d) citations/ orders
|
|
Failure to Abate Orders (Section 104(b) of the Mine Act)
|
|
Unwarrantable Failure Citations/Orders Issued (Section 104(d) of the Mine Act)
|
|
Imminent Danger Orders Issued (Section 107(a) of the Mine Act)
|
|
Dollar Value of Proposed Civil Penalty Assessments (in Thousands)
|
|
Legal Actions Pending as of Last Day of Period
|
|
Legal Actions Initiated During Period
|
|
Legal Actions Resolved
|
||||||||||||||
3609406
|
|
Coal Innovations #1
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
3610041
|
|
North Fork
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
3.0
|
|
(a)
|
|
3
|
|
(b)
|
|
—
|
|
|
|
—
|
|
|
(a)
|
Notification has not yet been provided regarding the monetary amount of any proposed penalties with respect to some of the disclosed citations. The recipient of the proposed citations is challenging them.
|
(b)
|
These pending legal actions all relate to contests of citations and orders referenced in Subpart B of the Mine Act’s procedural rules.
|