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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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Title of Each Class
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Trading Symbol
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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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AKS
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The 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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Emerging growth company
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☐
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AK STEEL HOLDING CORPORATION
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||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(dollars in millions, except per share data)
|
||||||||||||||||
|
|
|
|
|
|
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||||||||
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Three Months Ended June 30,
|
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Six Months Ended June 30,
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||||||||||||
(unaudited)
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2019
|
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2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
|
$
|
1,680.5
|
|
|
$
|
1,746.6
|
|
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$
|
3,378.2
|
|
|
$
|
3,405.5
|
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||||||||
Cost of products sold (exclusive of items shown separately below)
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1,449.0
|
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1,512.7
|
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2,914.4
|
|
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2,976.4
|
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||||
Selling and administrative expenses
|
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75.3
|
|
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79.5
|
|
|
151.9
|
|
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156.2
|
|
||||
Depreciation
|
|
49.6
|
|
|
54.9
|
|
|
100.0
|
|
|
109.8
|
|
||||
Ashland Works closure
|
|
—
|
|
|
—
|
|
|
64.1
|
|
|
—
|
|
||||
Total operating costs
|
|
1,573.9
|
|
|
1,647.1
|
|
|
3,230.4
|
|
|
3,242.4
|
|
||||
Operating profit
|
|
106.6
|
|
|
99.5
|
|
|
147.8
|
|
|
163.1
|
|
||||
Interest expense
|
|
37.1
|
|
|
37.9
|
|
|
75.0
|
|
|
75.5
|
|
||||
Pension and OPEB (income) expense
|
|
(6.9
|
)
|
|
(10.0
|
)
|
|
(0.4
|
)
|
|
(20.0
|
)
|
||||
Other (income) expense
|
|
(4.5
|
)
|
|
(0.2
|
)
|
|
(17.2
|
)
|
|
(4.1
|
)
|
||||
Income before income taxes
|
|
80.9
|
|
|
71.8
|
|
|
90.4
|
|
|
111.7
|
|
||||
Income tax expense (benefit)
|
|
1.0
|
|
|
(0.5
|
)
|
|
2.4
|
|
|
(5.4
|
)
|
||||
Net income
|
|
79.9
|
|
|
72.3
|
|
|
88.0
|
|
|
117.1
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
13.1
|
|
|
15.7
|
|
|
25.7
|
|
|
31.8
|
|
||||
Net income attributable to AK Steel Holding Corporation
|
|
$
|
66.8
|
|
|
$
|
56.6
|
|
|
$
|
62.3
|
|
|
$
|
85.3
|
|
Net income per share attributable to AK Steel Holding Corporation common stockholders:
|
|
|
|
|
|
|
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||||||||
Basic
|
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$
|
0.21
|
|
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$
|
0.18
|
|
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$
|
0.20
|
|
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$
|
0.27
|
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Diluted
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
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$
|
0.20
|
|
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$
|
0.27
|
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AK STEEL HOLDING CORPORATION
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
(dollars in millions)
|
||||||||||||||||
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|
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|
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|
||||||||
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(unaudited)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
79.9
|
|
|
$
|
72.3
|
|
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$
|
88.0
|
|
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$
|
117.1
|
|
Other comprehensive income (loss), before tax:
|
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||||||||
Foreign currency translation gain (loss)
|
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0.4
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(2.2
|
)
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(0.3
|
)
|
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(1.1
|
)
|
||||
Cash flow hedges:
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||||||||
Gains (losses) arising in period
|
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(24.3
|
)
|
|
(4.1
|
)
|
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(16.9
|
)
|
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(5.5
|
)
|
||||
Reclassification of losses (gains) to net income
|
|
2.1
|
|
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(5.5
|
)
|
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(4.3
|
)
|
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(13.1
|
)
|
||||
Pension and OPEB plans:
|
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||||||||
Reclassification of prior service cost (credits) to net income
|
|
(2.5
|
)
|
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(2.5
|
)
|
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(5.1
|
)
|
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(4.9
|
)
|
||||
Reclassification of losses (gains) to net income
|
|
(2.7
|
)
|
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3.6
|
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(5.3
|
)
|
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7.2
|
|
||||
Other comprehensive income (loss), before tax
|
|
(27.0
|
)
|
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(10.7
|
)
|
|
(31.9
|
)
|
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(17.4
|
)
|
||||
Income tax benefit related to items of comprehensive income (loss)
|
|
—
|
|
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—
|
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—
|
|
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—
|
|
||||
Other comprehensive income (loss)
|
|
(27.0
|
)
|
|
(10.7
|
)
|
|
(31.9
|
)
|
|
(17.4
|
)
|
||||
Comprehensive income
|
|
52.9
|
|
|
61.6
|
|
|
56.1
|
|
|
99.7
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
|
13.1
|
|
|
15.7
|
|
|
25.7
|
|
|
31.8
|
|
||||
Comprehensive income attributable to AK Steel Holding Corporation
|
|
$
|
39.8
|
|
|
$
|
45.9
|
|
|
$
|
30.4
|
|
|
$
|
67.9
|
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(dollars in millions, except per share data)
|
||||||||
|
|
|
|
|
||||
(unaudited)
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
42.2
|
|
|
$
|
48.6
|
|
Accounts receivable, net
|
|
675.2
|
|
|
635.8
|
|
||
Inventory
|
|
1,353.9
|
|
|
1,419.9
|
|
||
Other current assets
|
|
88.9
|
|
|
97.0
|
|
||
Total current assets
|
|
2,160.2
|
|
|
2,201.3
|
|
||
Property, plant and equipment
|
|
7,034.5
|
|
|
6,969.2
|
|
||
Accumulated depreciation
|
|
(5,155.3
|
)
|
|
(5,057.6
|
)
|
||
Property, plant and equipment, net
|
|
1,879.2
|
|
|
1,911.6
|
|
||
Operating lease assets
|
|
245.7
|
|
|
—
|
|
||
Other non-current assets
|
|
401.9
|
|
|
402.8
|
|
||
TOTAL ASSETS
|
|
$
|
4,687.0
|
|
|
$
|
4,515.7
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
732.3
|
|
|
$
|
801.0
|
|
Accrued liabilities
|
|
242.9
|
|
|
288.9
|
|
||
Current portion of operating lease liabilities
|
|
53.9
|
|
|
—
|
|
||
Current portion of pension and other postretirement benefit obligations
|
|
37.8
|
|
|
38.7
|
|
||
Total current liabilities
|
|
1,066.9
|
|
|
1,128.6
|
|
||
Non-current liabilities:
|
|
|
|
|
||||
Long-term debt
|
|
1,946.2
|
|
|
1,993.7
|
|
||
Long-term operating lease liabilities
|
|
212.9
|
|
|
—
|
|
||
Pension and other postretirement benefit obligations
|
|
808.0
|
|
|
829.9
|
|
||
Other non-current liabilities
|
|
177.4
|
|
|
134.0
|
|
||
TOTAL LIABILITIES
|
|
4,211.4
|
|
|
4,086.2
|
|
||
Equity:
|
|
|
|
|
||||
Common stock, authorized 450,000,000 shares of $0.01 par value each; issued 317,705,839 and 316,595,613 shares in 2019 and 2018; outstanding 316,342,354 and 315,535,765 shares in 2019 and 2018
|
|
3.2
|
|
|
3.2
|
|
||
Additional paid-in capital
|
|
2,901.0
|
|
|
2,894.9
|
|
||
Treasury stock, common shares at cost, 1,363,485 and 1,059,848 shares in 2019 and 2018
|
|
(7.2
|
)
|
|
(6.4
|
)
|
||
Accumulated deficit
|
|
(2,629.5
|
)
|
|
(2,691.8
|
)
|
||
Accumulated other comprehensive loss
|
|
(131.9
|
)
|
|
(100.0
|
)
|
||
Total stockholders’ equity
|
|
135.6
|
|
|
99.9
|
|
||
Noncontrolling interests
|
|
340.0
|
|
|
329.6
|
|
||
TOTAL EQUITY
|
|
475.6
|
|
|
429.5
|
|
||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
4,687.0
|
|
|
$
|
4,515.7
|
|
(unaudited)
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Middletown Coke Company, LLC (“SunCoke Middletown”)
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
0.1
|
|
|
$
|
1.1
|
|
Accounts receivable, net
|
|
20.0
|
|
|
0.5
|
|
||
Inventory
|
|
25.6
|
|
|
21.1
|
|
||
Property, plant and equipment
|
|
428.7
|
|
|
427.8
|
|
||
Accumulated depreciation
|
|
(118.6
|
)
|
|
(106.9
|
)
|
||
Accounts payable
|
|
16.8
|
|
|
13.7
|
|
||
Other assets (liabilities), net
|
|
—
|
|
|
(1.7
|
)
|
||
Noncontrolling interests
|
|
339.0
|
|
|
328.2
|
|
||
|
|
|
|
|
||||
Other variable interest entities
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
Property, plant and equipment
|
|
11.7
|
|
|
11.7
|
|
||
Accumulated depreciation
|
|
(9.9
|
)
|
|
(9.8
|
)
|
||
Other assets (liabilities), net
|
|
0.1
|
|
|
0.5
|
|
||
Noncontrolling interests
|
|
1.0
|
|
|
1.4
|
|
AK STEEL HOLDING CORPORATION
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(dollars in millions)
|
||||||||
|
|
Six Months Ended June 30,
|
||||||
(unaudited)
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
88.0
|
|
|
$
|
117.1
|
|
Depreciation
|
|
86.4
|
|
|
102.1
|
|
||
Depreciation—SunCoke Middletown
|
|
13.6
|
|
|
7.7
|
|
||
Amortization
|
|
17.5
|
|
|
17.3
|
|
||
Ashland Works closure
|
|
64.1
|
|
|
—
|
|
||
Deferred income taxes
|
|
0.6
|
|
|
(7.2
|
)
|
||
Pension and OPEB expense (income)
|
|
2.5
|
|
|
(16.2
|
)
|
||
Contributions to pension trust
|
|
(19.5
|
)
|
|
(15.2
|
)
|
||
Other postretirement benefit payments
|
|
(15.6
|
)
|
|
(19.3
|
)
|
||
Mark-to-market (gains) losses on derivative contracts
|
|
(61.1
|
)
|
|
(7.4
|
)
|
||
Changes in working capital
|
|
(33.4
|
)
|
|
28.8
|
|
||
Other operating items, net
|
|
(6.9
|
)
|
|
(20.3
|
)
|
||
Net cash flows from operating activities
|
|
136.2
|
|
|
187.4
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital investments
|
|
(82.4
|
)
|
|
(64.0
|
)
|
||
Other investing items, net
|
|
10.3
|
|
|
0.3
|
|
||
Net cash flows from investing activities
|
|
(72.1
|
)
|
|
(63.7
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net borrowings (payments) under credit facility
|
|
(50.0
|
)
|
|
(80.0
|
)
|
||
Redemption of long-term debt
|
|
(4.2
|
)
|
|
—
|
|
||
SunCoke Middletown distributions to noncontrolling interest owners
|
|
(15.3
|
)
|
|
(34.8
|
)
|
||
Other financing items, net
|
|
(1.0
|
)
|
|
(0.9
|
)
|
||
Net cash flows from financing activities
|
|
(70.5
|
)
|
|
(115.7
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(6.4
|
)
|
|
8.0
|
|
||
Cash and cash equivalents, beginning of period
|
|
48.6
|
|
|
38.0
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
42.2
|
|
|
$
|
46.0
|
|
AK STEEL HOLDING CORPORATION
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
|
||||||||||||||||
(dollars in millions)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(unaudited)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Common stock
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning and end of period
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
Additional paid-in capital
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
2,899.2
|
|
|
2,889.3
|
|
|
2,894.9
|
|
|
2,884.8
|
|
||||
Share-based compensation
|
|
1.8
|
|
|
1.8
|
|
|
6.1
|
|
|
6.3
|
|
||||
Balance at end of period
|
|
2,901.0
|
|
|
2,891.1
|
|
|
2,901.0
|
|
|
2,891.1
|
|
||||
Treasury stock
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
(7.2
|
)
|
|
(6.4
|
)
|
|
(6.4
|
)
|
|
(5.4
|
)
|
||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(1.0
|
)
|
||||
Balance at end of period
|
|
(7.2
|
)
|
|
(6.4
|
)
|
|
(7.2
|
)
|
|
(6.4
|
)
|
||||
Accumulated deficit
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
(2,696.3
|
)
|
|
(2,849.1
|
)
|
|
(2,691.8
|
)
|
|
(2,877.0
|
)
|
||||
Cumulative effect of adopting new hedging standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||
Net income
|
|
66.8
|
|
|
56.6
|
|
|
62.3
|
|
|
85.3
|
|
||||
Balance at end of period
|
|
(2,629.5
|
)
|
|
(2,792.5
|
)
|
|
(2,629.5
|
)
|
|
(2,792.5
|
)
|
||||
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
(104.9
|
)
|
|
(56.1
|
)
|
|
(100.0
|
)
|
|
(50.2
|
)
|
||||
Cumulative effect of adopting new hedging standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Change in accumulated other comprehensive loss
|
|
(27.0
|
)
|
|
(10.7
|
)
|
|
(31.9
|
)
|
|
(17.4
|
)
|
||||
Balance at end of period
|
|
(131.9
|
)
|
|
(66.8
|
)
|
|
(131.9
|
)
|
|
(66.8
|
)
|
||||
Noncontrolling interests
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
335.8
|
|
|
351.0
|
|
|
329.6
|
|
|
345.2
|
|
||||
Net income
|
|
13.1
|
|
|
15.7
|
|
|
25.7
|
|
|
31.8
|
|
||||
Net distributions to noncontrolling interests
|
|
(8.9
|
)
|
|
(24.5
|
)
|
|
(15.3
|
)
|
|
(34.8
|
)
|
||||
Balance at end of period
|
|
340.0
|
|
|
342.2
|
|
|
340.0
|
|
|
342.2
|
|
||||
Total equity
|
|
$
|
475.6
|
|
|
$
|
370.8
|
|
|
$
|
475.6
|
|
|
$
|
370.8
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Automotive
|
$
|
1,081.7
|
|
|
$
|
1,108.7
|
|
|
$
|
2,172.6
|
|
|
$
|
2,227.8
|
|
Infrastructure and Manufacturing
|
267.7
|
|
|
263.8
|
|
|
545.8
|
|
|
505.1
|
|
||||
Distributors and Converters
|
331.1
|
|
|
374.1
|
|
|
659.8
|
|
|
672.6
|
|
||||
Total
|
$
|
1,680.5
|
|
|
$
|
1,746.6
|
|
|
$
|
3,378.2
|
|
|
$
|
3,405.5
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Carbon steel
|
$
|
1,102.2
|
|
|
$
|
1,102.4
|
|
|
$
|
2,201.4
|
|
|
$
|
2,171.0
|
|
Stainless and electrical steel
|
431.0
|
|
|
483.1
|
|
|
875.5
|
|
|
909.2
|
|
||||
Tubular products, components and other
|
147.3
|
|
|
161.1
|
|
|
301.3
|
|
|
325.3
|
|
||||
Total
|
$
|
1,680.5
|
|
|
$
|
1,746.6
|
|
|
$
|
3,378.2
|
|
|
$
|
3,405.5
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Finished and semi-finished
|
$
|
1,003.8
|
|
|
$
|
1,054.4
|
|
Raw materials
|
350.1
|
|
|
365.5
|
|
||
Inventory
|
$
|
1,353.9
|
|
|
$
|
1,419.9
|
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
||||||
As of June 30, 2019
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
36.6
|
|
|
$
|
(10.0
|
)
|
|
$
|
26.6
|
|
Technology
|
23.0
|
|
|
(6.2
|
)
|
|
16.8
|
|
|||
Intangible assets
|
$
|
59.6
|
|
|
$
|
(16.2
|
)
|
|
$
|
43.4
|
|
|
|
|
|
|
|
||||||
As of December 31, 2018
|
|
|
|
|
|
||||||
Customer relationships
|
$
|
36.6
|
|
|
$
|
(7.4
|
)
|
|
$
|
29.2
|
|
Technology
|
19.3
|
|
|
(4.6
|
)
|
|
14.7
|
|
|||
Intangible assets
|
$
|
55.9
|
|
|
$
|
(12.0
|
)
|
|
$
|
43.9
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
$
|
83.0
|
|
|
$
|
83.5
|
|
|
$
|
160.8
|
|
|
$
|
158.3
|
|
Gross profit
|
|
24.0
|
|
|
23.6
|
|
|
45.5
|
|
|
44.7
|
|
||||
Net income
|
|
4.3
|
|
|
5.1
|
|
|
7.0
|
|
|
9.3
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Our share of income of equity investees (included in cost of products sold)
|
|
1.4
|
|
|
1.7
|
|
|
2.1
|
|
|
3.0
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Credit Facility
|
$
|
285.0
|
|
|
$
|
335.0
|
|
7.50% Senior Secured Notes due July 2023 (effective rate of 8.3%)
|
380.0
|
|
|
380.0
|
|
||
5.00% Exchangeable Senior Notes due November 2019 (effective rate of 10.8%)
|
148.5
|
|
|
148.5
|
|
||
7.625% Senior Notes due October 2021
|
406.2
|
|
|
406.2
|
|
||
6.375% Senior Notes due October 2025 (effective rate of 7.1%)
|
270.2
|
|
|
274.8
|
|
||
7.00% Senior Notes due March 2027
|
391.6
|
|
|
391.6
|
|
||
Industrial Revenue Bonds due 2020 through 2028
|
99.3
|
|
|
99.3
|
|
||
Unamortized debt discount and issuance costs
|
(34.6
|
)
|
|
(41.7
|
)
|
||
Total long-term debt
|
$
|
1,946.2
|
|
|
$
|
1,993.7
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
2019
|
|
2019
|
||||
Operating leases
|
$
|
17.2
|
|
|
33.9
|
|
|
Short-term leases
|
10.5
|
|
|
21.6
|
|
||
Variable lease costs
|
18.5
|
|
|
35.8
|
|
||
Total
|
$
|
46.2
|
|
|
$
|
91.3
|
|
|
Six Months Ended June 30,
|
||
|
2019
|
||
Cash paid for operating leases within cash flows from operating activities
|
$
|
36.6
|
|
Right-of-use assets obtained in exchange for operating lease liabilities
|
6.5
|
|
|
Weighted-average remaining lease term of operating leases (in years)
|
7.7
|
|
|
Weighted-average discount rate for operating leases
|
8.4
|
%
|
Year ending December 31:
|
|
||
2019 (remaining period of year)
|
$
|
36.1
|
|
2020
|
63.5
|
|
|
2021
|
51.4
|
|
|
2022
|
41.4
|
|
|
2023
|
35.1
|
|
|
Thereafter
|
148.5
|
|
|
Total future minimum operating lease payments
|
376.0
|
|
|
Less imputed interest
|
109.2
|
|
|
Total operating lease liabilities
|
266.8
|
|
|
Less current portion of operating lease liabilities
|
53.9
|
|
|
Long-term operating lease liabilities
|
$
|
212.9
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Pension Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.2
|
|
|
$
|
1.5
|
|
Interest cost
|
22.2
|
|
|
23.8
|
|
|
44.5
|
|
|
47.5
|
|
||||
Expected return on assets
|
(28.0
|
)
|
|
(38.8
|
)
|
|
(56.0
|
)
|
|
(77.6
|
)
|
||||
Amortization of prior service cost
|
0.8
|
|
|
0.9
|
|
|
1.5
|
|
|
1.9
|
|
||||
Amortization of (gain) loss
|
(1.8
|
)
|
|
4.0
|
|
|
(3.5
|
)
|
|
7.9
|
|
||||
Termination benefits—Ashland Works
|
—
|
|
|
—
|
|
|
9.7
|
|
|
—
|
|
||||
Net periodic benefit (income) expense
|
$
|
(6.1
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(18.8
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other Postretirement Benefits
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.8
|
|
|
$
|
1.2
|
|
|
$
|
1.7
|
|
|
$
|
2.3
|
|
Interest cost
|
4.1
|
|
|
3.9
|
|
|
8.2
|
|
|
7.8
|
|
||||
Amortization of prior service cost (credit)
|
(3.3
|
)
|
|
(3.4
|
)
|
|
(6.6
|
)
|
|
(6.8
|
)
|
||||
Amortization of (gain) loss
|
(0.9
|
)
|
|
(0.4
|
)
|
|
(1.8
|
)
|
|
(0.7
|
)
|
||||
Termination benefits—Ashland Works
|
—
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
||||
Net periodic benefit (income) expense
|
$
|
0.7
|
|
|
$
|
1.3
|
|
|
$
|
5.1
|
|
|
$
|
2.6
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Accrued liabilities
|
$
|
7.2
|
|
|
$
|
8.0
|
|
Other non-current liabilities
|
33.6
|
|
|
31.2
|
|
|
|
Asbestos Cases Pending at
|
|
|
|
June 30, 2019
|
|
Cases with specific dollar claims for damages:
|
|
|
|
Claims up to $0.2
|
|
176
|
|
Claims above $0.2 to $5.0
|
|
4
|
|
Claims above $5.0 to $20.0
|
|
3
|
|
Total claims with a specific dollar claim for damages (a)
|
|
183
|
|
Cases without a specific dollar claim for damages
|
|
174
|
|
Total asbestos cases pending
|
|
357
|
|
(a)
|
Involve a total of 2,258 plaintiffs and 20,541 defendants
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
New Claims Filed
|
27
|
|
|
21
|
|
|
38
|
|
|
33
|
|
||||
Pending Claims Disposed Of
|
17
|
|
|
31
|
|
|
24
|
|
|
42
|
|
||||
Total Amount Paid in Settlements
|
$
|
1.3
|
|
|
$
|
0.4
|
|
|
$
|
1.5
|
|
|
$
|
0.7
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Share-based Compensation Expense
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Restricted stock
|
0.3
|
|
|
0.5
|
|
|
1.8
|
|
|
2.4
|
|
||||
Restricted stock units issued to Directors
|
0.3
|
|
|
0.3
|
|
|
0.6
|
|
|
0.6
|
|
||||
Performance shares
|
0.6
|
|
|
0.6
|
|
|
1.2
|
|
|
1.1
|
|
||||
Equity-based long-term performance plan
|
0.3
|
|
|
0.1
|
|
|
0.5
|
|
|
0.2
|
|
||||
Total share-based compensation expense
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
6.1
|
|
|
$
|
6.3
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(1.3
|
)
|
|
$
|
2.2
|
|
|
$
|
(0.6
|
)
|
|
$
|
1.1
|
|
Other comprehensive income (loss)—foreign currency translation gain (loss)
|
0.4
|
|
|
(2.2
|
)
|
|
(0.3
|
)
|
|
(1.1
|
)
|
||||
Balance at end of period
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
8.2
|
|
|
$
|
14.1
|
|
|
$
|
7.2
|
|
|
$
|
22.3
|
|
Cumulative effect of adopting new hedging standard
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising in period
|
(24.3
|
)
|
|
(4.1
|
)
|
|
(16.9
|
)
|
|
(5.5
|
)
|
||||
Income tax expense (benefit) (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gains (losses) arising in period, net of tax
|
(24.3
|
)
|
|
(4.1
|
)
|
|
(16.9
|
)
|
|
(5.5
|
)
|
||||
Reclassification of losses (gains) to net income:
|
|
|
|
|
|
|
|
||||||||
Recorded in cost of products sold
|
2.1
|
|
|
(5.5
|
)
|
|
(4.3
|
)
|
|
(13.1
|
)
|
||||
Income tax (expense) benefit (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net amount of reclassification of losses (gains) to net income, net of tax
|
2.1
|
|
|
(5.5
|
)
|
|
(4.3
|
)
|
|
(13.1
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
(22.2
|
)
|
|
(9.6
|
)
|
|
(21.2
|
)
|
|
(18.6
|
)
|
||||
Balance at end of period
|
$
|
(14.0
|
)
|
|
$
|
4.5
|
|
|
$
|
(14.0
|
)
|
|
$
|
4.5
|
|
Pension and OPEB plans
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(111.8
|
)
|
|
$
|
(72.4
|
)
|
|
$
|
(106.6
|
)
|
|
$
|
(73.6
|
)
|
Reclassification to net income:
|
|
|
|
|
|
|
|
||||||||
Prior service costs (credits) (a)
|
(2.5
|
)
|
|
(2.5
|
)
|
|
(5.1
|
)
|
|
(4.9
|
)
|
||||
Actuarial (gains) losses (a)
|
(2.7
|
)
|
|
3.6
|
|
|
(5.3
|
)
|
|
7.2
|
|
||||
Subtotal
|
(5.2
|
)
|
|
1.1
|
|
|
(10.4
|
)
|
|
2.3
|
|
||||
Income tax (expense) benefit (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amount of reclassification to net income, net of tax
|
(5.2
|
)
|
|
1.1
|
|
|
(10.4
|
)
|
|
2.3
|
|
||||
Total other comprehensive income (loss), net of tax
|
(5.2
|
)
|
|
1.1
|
|
|
(10.4
|
)
|
|
2.3
|
|
||||
Balance at end of period
|
$
|
(117.0
|
)
|
|
$
|
(71.3
|
)
|
|
$
|
(117.0
|
)
|
|
$
|
(71.3
|
)
|
(a)
|
Included in pension and OPEB (income) expense
|
(b)
|
Included in income tax expense (benefit)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to AK Steel Holding Corporation
|
|
$
|
66.8
|
|
|
$
|
56.6
|
|
|
$
|
62.3
|
|
|
$
|
85.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common shares outstanding (weighted-average shares in millions):
|
|
|
|
|
|
|
|
|
||||||||
Common shares outstanding for basic earnings per share
|
|
315.8
|
|
|
314.7
|
|
|
315.7
|
|
|
314.7
|
|
||||
Effect of exchangeable debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Effect of dilutive stock-based compensation
|
|
0.7
|
|
|
1.0
|
|
|
0.7
|
|
|
1.0
|
|
||||
Common shares outstanding for diluted earnings per share
|
|
316.5
|
|
|
315.7
|
|
|
316.4
|
|
|
315.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.20
|
|
|
$
|
0.27
|
|
Diluted earnings per share
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.20
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially issuable common shares (in millions) excluded from earnings per share calculation due to anti-dilutive effect
|
|
3.7
|
|
|
2.5
|
|
|
3.7
|
|
|
2.3
|
|
|
|
•
|
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
|
•
|
Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value if 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.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
42.2
|
|
|
$
|
—
|
|
|
$
|
42.2
|
|
|
$
|
48.6
|
|
|
$
|
—
|
|
|
$
|
48.6
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||||
Commodity hedge contracts
|
—
|
|
|
36.4
|
|
|
36.4
|
|
|
—
|
|
|
13.0
|
|
|
13.0
|
|
||||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
||||||
Commodity hedge contracts
|
—
|
|
|
10.5
|
|
|
10.5
|
|
|
—
|
|
|
2.9
|
|
|
2.9
|
|
||||||
Assets measured at fair value
|
$
|
42.2
|
|
|
$
|
47.4
|
|
|
$
|
89.6
|
|
|
$
|
48.6
|
|
|
$
|
16.4
|
|
|
$
|
65.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
|
$
|
(1.2
|
)
|
Commodity hedge contracts
|
—
|
|
|
(14.2
|
)
|
|
(14.2
|
)
|
|
—
|
|
|
(5.9
|
)
|
|
(5.9
|
)
|
||||||
Other non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
||||||
Commodity hedge contracts
|
—
|
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||||
Liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(18.2
|
)
|
|
$
|
(18.2
|
)
|
|
$
|
—
|
|
|
$
|
(10.2
|
)
|
|
$
|
(10.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities measured at other than fair value
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt, including current portions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value
|
$
|
—
|
|
|
$
|
(1,859.8
|
)
|
|
$
|
(1,859.8
|
)
|
|
$
|
—
|
|
|
$
|
(1,852.4
|
)
|
|
$
|
(1,852.4
|
)
|
Carrying amount
|
—
|
|
|
(1,946.2
|
)
|
|
(1,946.2
|
)
|
|
—
|
|
|
(1,993.7
|
)
|
|
(1,993.7
|
)
|
|
Derivative Contracts
|
Settlement Dates
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Commodity contracts:
|
|
|
|
|
|
||||
Natural gas (in MMBTUs)
|
July 2019 to March 2021
|
|
37,465,000
|
|
|
39,868,000
|
|
||
Zinc (in lbs)
|
July 2019 to March 2021
|
|
38,850,000
|
|
|
52,150,000
|
|
||
Iron ore (in metric tons)
|
July 2019 to June 2021
|
|
2,140,000
|
|
|
2,125,000
|
|
||
Electricity (in MWHs)
|
July 2019 to December 2020
|
|
1,240,450
|
|
|
1,461,000
|
|
||
Foreign exchange contracts:
|
|
|
|
|
|
||||
Euros (in millions)
|
July 2019 to November 2019
|
|
€
|
4.5
|
|
|
€
|
4.0
|
|
Canadian dollars (in millions)
|
July 2019 to December 2021
|
|
C$
|
109.6
|
|
|
C$
|
118.6
|
|
Asset (liability)
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Commodity contracts
|
|
0.3
|
|
|
3.4
|
|
||
Other non-current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
0.3
|
|
|
0.4
|
|
||
Commodity contracts
|
|
0.2
|
|
|
1.0
|
|
||
Accrued liabilities:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
(0.6
|
)
|
|
(1.2
|
)
|
||
Commodity contracts
|
|
(14.2
|
)
|
|
(4.7
|
)
|
||
Other non-current liabilities:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
(0.5
|
)
|
|
(1.5
|
)
|
||
Commodity contracts
|
|
(2.9
|
)
|
|
(1.2
|
)
|
||
Derivatives not designated as cash flow hedges:
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
|
—
|
|
|
0.1
|
|
||
Commodity contracts
|
|
36.1
|
|
|
9.6
|
|
||
Other non-current assets—commodity contracts
|
|
10.3
|
|
|
1.9
|
|
||
Accrued liabilities—commodity contracts
|
|
—
|
|
|
(1.2
|
)
|
||
Other non-current liabilities—commodity contracts
|
|
—
|
|
|
(0.4
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gain (loss)
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Recognized in accumulated other comprehensive income that were included in the assessment of effectiveness
|
|
$
|
(24.8
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(18.0
|
)
|
|
$
|
(2.3
|
)
|
Reclassified from accumulated other comprehensive income into cost of products sold
|
|
(1.5
|
)
|
|
5.4
|
|
|
5.2
|
|
|
13.0
|
|
||||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
|
||||||||
Recognized in accumulated other comprehensive income that were included in the assessment of effectiveness
|
|
0.5
|
|
|
(1.5
|
)
|
|
1.1
|
|
|
(3.2
|
)
|
||||
Reclassified from accumulated other comprehensive income into cost of products sold
|
|
(0.6
|
)
|
|
0.1
|
|
|
(0.9
|
)
|
|
0.1
|
|
||||
Derivatives not designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts—recognized in cost of products sold
|
|
35.9
|
|
|
2.3
|
|
|
56.4
|
|
|
(6.4
|
)
|
||||
Foreign exchange contracts—recognized in other income (expense)
|
|
—
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
0.4
|
|
Hedge
|
|
Gains (losses)
|
||
Natural gas
|
|
$
|
(9.8
|
)
|
Zinc
|
|
(2.6
|
)
|
|
Electricity
|
|
(3.9
|
)
|
|
Canadian dollars
|
|
(1.3
|
)
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Net cash paid (received) during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
68.3
|
|
|
$
|
68.4
|
|
Income taxes
|
|
(4.2
|
)
|
|
(5.9
|
)
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Capital investments
|
|
$
|
16.8
|
|
|
$
|
29.3
|
|
Issuance of restricted stock and restricted stock units
|
|
2.6
|
|
|
4.0
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,546.5
|
|
|
$
|
80.3
|
|
|
$
|
185.3
|
|
|
$
|
(131.6
|
)
|
|
$
|
1,680.5
|
|
Cost of products sold (exclusive of items shown separately below)
|
—
|
|
|
1,363.2
|
|
|
56.9
|
|
|
147.4
|
|
|
(118.5
|
)
|
|
1,449.0
|
|
||||||
Selling and administrative expenses
|
1.4
|
|
|
72.9
|
|
|
3.3
|
|
|
9.7
|
|
|
(12.0
|
)
|
|
75.3
|
|
||||||
Depreciation
|
—
|
|
|
36.1
|
|
|
2.2
|
|
|
11.3
|
|
|
—
|
|
|
49.6
|
|
||||||
Total operating costs
|
1.4
|
|
|
1,472.2
|
|
|
62.4
|
|
|
168.4
|
|
|
(130.5
|
)
|
|
1,573.9
|
|
||||||
Operating profit (loss)
|
(1.4
|
)
|
|
74.3
|
|
|
17.9
|
|
|
16.9
|
|
|
(1.1
|
)
|
|
106.6
|
|
||||||
Interest expense
|
—
|
|
|
35.4
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
37.1
|
|
||||||
Pension and OPEB (income) expense
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
||||||
Other (income) expense
|
—
|
|
|
1.7
|
|
|
(9.6
|
)
|
|
(0.7
|
)
|
|
4.1
|
|
|
(4.5
|
)
|
||||||
Income (loss) before income taxes
|
(1.4
|
)
|
|
44.1
|
|
|
27.5
|
|
|
15.9
|
|
|
(5.2
|
)
|
|
80.9
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(6.1
|
)
|
|
6.9
|
|
|
1.5
|
|
|
(1.3
|
)
|
|
1.0
|
|
||||||
Equity in net income (loss) of subsidiaries
|
68.2
|
|
|
18.0
|
|
|
—
|
|
|
2.7
|
|
|
(88.9
|
)
|
|
—
|
|
||||||
Net income (loss)
|
66.8
|
|
|
68.2
|
|
|
20.6
|
|
|
17.1
|
|
|
(92.8
|
)
|
|
79.9
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
|
—
|
|
|
13.1
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
66.8
|
|
|
68.2
|
|
|
20.6
|
|
|
4.0
|
|
|
(92.8
|
)
|
|
66.8
|
|
||||||
Other comprehensive income (loss)
|
(27.0
|
)
|
|
(27.0
|
)
|
|
—
|
|
|
0.4
|
|
|
26.6
|
|
|
(27.0
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
39.8
|
|
|
$
|
41.2
|
|
|
$
|
20.6
|
|
|
$
|
4.4
|
|
|
$
|
(66.2
|
)
|
|
$
|
39.8
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Three Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,599.3
|
|
|
$
|
84.4
|
|
|
$
|
195.1
|
|
|
$
|
(132.2
|
)
|
|
$
|
1,746.6
|
|
Cost of products sold (exclusive of item shown separately below)
|
—
|
|
|
1,413.4
|
|
|
57.4
|
|
|
159.7
|
|
|
(117.8
|
)
|
|
1,512.7
|
|
||||||
Selling and administrative expenses
|
0.8
|
|
|
78.7
|
|
|
3.8
|
|
|
9.0
|
|
|
(12.8
|
)
|
|
79.5
|
|
||||||
Depreciation
|
—
|
|
|
43.4
|
|
|
2.0
|
|
|
9.5
|
|
|
—
|
|
|
54.9
|
|
||||||
Total operating costs
|
0.8
|
|
|
1,535.5
|
|
|
63.2
|
|
|
178.2
|
|
|
(130.6
|
)
|
|
1,647.1
|
|
||||||
Operating profit (loss)
|
(0.8
|
)
|
|
63.8
|
|
|
21.2
|
|
|
16.9
|
|
|
(1.6
|
)
|
|
99.5
|
|
||||||
Interest expense
|
—
|
|
|
36.5
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
37.9
|
|
||||||
Pension and OPEB (income) expense
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
||||||
Other (income) expense
|
—
|
|
|
4.6
|
|
|
(4.0
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||
Income (loss) before income taxes
|
(0.8
|
)
|
|
32.7
|
|
|
25.2
|
|
|
16.3
|
|
|
(1.6
|
)
|
|
71.8
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(6.0
|
)
|
|
6.3
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||||
Equity in net income (loss) of subsidiaries
|
57.4
|
|
|
18.7
|
|
|
—
|
|
|
0.2
|
|
|
(76.3
|
)
|
|
—
|
|
||||||
Net income (loss)
|
56.6
|
|
|
57.4
|
|
|
18.9
|
|
|
16.9
|
|
|
(77.5
|
)
|
|
72.3
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
15.7
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
56.6
|
|
|
57.4
|
|
|
18.9
|
|
|
1.2
|
|
|
(77.5
|
)
|
|
56.6
|
|
||||||
Other comprehensive income (loss)
|
(10.7
|
)
|
|
(10.7
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
12.9
|
|
|
(10.7
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
45.9
|
|
|
$
|
46.7
|
|
|
$
|
18.9
|
|
|
$
|
(1.0
|
)
|
|
$
|
(64.6
|
)
|
|
$
|
45.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
3,095.9
|
|
|
$
|
163.8
|
|
|
$
|
370.7
|
|
|
$
|
(252.2
|
)
|
|
$
|
3,378.2
|
|
Cost of products sold (exclusive of item shown separately below)
|
—
|
|
|
2,725.2
|
|
|
116.2
|
|
|
299.3
|
|
|
(226.3
|
)
|
|
2,914.4
|
|
||||||
Selling and administrative expenses
|
2.8
|
|
|
146.7
|
|
|
7.2
|
|
|
19.4
|
|
|
(24.2
|
)
|
|
151.9
|
|
||||||
Depreciation
|
—
|
|
|
71.8
|
|
|
4.3
|
|
|
23.9
|
|
|
—
|
|
|
100.0
|
|
||||||
Ashland Works closure
|
—
|
|
|
64.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64.1
|
|
||||||
Total operating costs
|
2.8
|
|
|
3,007.8
|
|
|
127.7
|
|
|
342.6
|
|
|
(250.5
|
)
|
|
3,230.4
|
|
||||||
Operating profit (loss)
|
(2.8
|
)
|
|
88.1
|
|
|
36.1
|
|
|
28.1
|
|
|
(1.7
|
)
|
|
147.8
|
|
||||||
Interest expense
|
—
|
|
|
71.7
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
75.0
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.4
|
)
|
||||||
Other (income) expense
|
—
|
|
|
(4.9
|
)
|
|
(14.6
|
)
|
|
(1.8
|
)
|
|
4.1
|
|
|
(17.2
|
)
|
||||||
Income (loss) before income taxes
|
(2.8
|
)
|
|
21.7
|
|
|
50.7
|
|
|
26.6
|
|
|
(5.8
|
)
|
|
90.4
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(10.7
|
)
|
|
12.7
|
|
|
1.9
|
|
|
(1.5
|
)
|
|
2.4
|
|
||||||
Equity in net income (loss) of subsidiaries
|
65.1
|
|
|
32.7
|
|
|
—
|
|
|
2.8
|
|
|
(100.6
|
)
|
|
—
|
|
||||||
Net income (loss)
|
62.3
|
|
|
65.1
|
|
|
38.0
|
|
|
27.5
|
|
|
(104.9
|
)
|
|
88.0
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
25.7
|
|
|
—
|
|
|
25.7
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
62.3
|
|
|
65.1
|
|
|
38.0
|
|
|
1.8
|
|
|
(104.9
|
)
|
|
62.3
|
|
||||||
Other comprehensive income (loss)
|
(31.9
|
)
|
|
(31.9
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
32.2
|
|
|
(31.9
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
30.4
|
|
|
$
|
33.2
|
|
|
$
|
38.0
|
|
|
$
|
1.5
|
|
|
$
|
(72.7
|
)
|
|
$
|
30.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||||||||||||||||
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
3,102.3
|
|
|
$
|
161.5
|
|
|
$
|
403.8
|
|
|
$
|
(262.1
|
)
|
|
$
|
3,405.5
|
|
Cost of products sold (exclusive of item shown separately below)
|
—
|
|
|
2,766.8
|
|
|
112.0
|
|
|
331.4
|
|
|
(233.8
|
)
|
|
2,976.4
|
|
||||||
Selling and administrative expenses
|
2.1
|
|
|
153.6
|
|
|
7.4
|
|
|
17.7
|
|
|
(24.6
|
)
|
|
156.2
|
|
||||||
Depreciation
|
—
|
|
|
86.8
|
|
|
4.0
|
|
|
19.0
|
|
|
—
|
|
|
109.8
|
|
||||||
Total operating costs
|
2.1
|
|
|
3,007.2
|
|
|
123.4
|
|
|
368.1
|
|
|
(258.4
|
)
|
|
3,242.4
|
|
||||||
Operating profit (loss)
|
(2.1
|
)
|
|
95.1
|
|
|
38.1
|
|
|
35.7
|
|
|
(3.7
|
)
|
|
163.1
|
|
||||||
Interest expense
|
—
|
|
|
72.9
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
75.5
|
|
||||||
Pension and OPEB expense (income)
|
—
|
|
|
(20.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.0
|
)
|
||||||
Other (income) expense
|
—
|
|
|
5.8
|
|
|
(7.5
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(4.1
|
)
|
||||||
Income (loss) before income taxes
|
(2.1
|
)
|
|
36.4
|
|
|
45.6
|
|
|
35.5
|
|
|
(3.7
|
)
|
|
111.7
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
(17.9
|
)
|
|
11.4
|
|
|
2.0
|
|
|
(0.9
|
)
|
|
(5.4
|
)
|
||||||
Equity in net income (loss) of subsidiaries
|
87.4
|
|
|
33.1
|
|
|
—
|
|
|
0.2
|
|
|
(120.7
|
)
|
|
—
|
|
||||||
Net income (loss)
|
85.3
|
|
|
87.4
|
|
|
34.2
|
|
|
33.7
|
|
|
(123.5
|
)
|
|
117.1
|
|
||||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
31.8
|
|
|
—
|
|
|
31.8
|
|
||||||
Net income (loss) attributable to AK Steel Holding Corporation
|
85.3
|
|
|
87.4
|
|
|
34.2
|
|
|
1.9
|
|
|
(123.5
|
)
|
|
85.3
|
|
||||||
Other comprehensive income (loss)
|
(17.4
|
)
|
|
(17.4
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
18.5
|
|
|
(17.4
|
)
|
||||||
Comprehensive income (loss) attributable to AK Steel Holding Corporation
|
$
|
67.9
|
|
|
$
|
70.0
|
|
|
$
|
34.2
|
|
|
$
|
0.8
|
|
|
$
|
(105.0
|
)
|
|
$
|
67.9
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
June 30, 2019
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
33.3
|
|
|
$
|
0.1
|
|
|
$
|
8.8
|
|
|
$
|
—
|
|
|
$
|
42.2
|
|
Accounts receivable, net
|
—
|
|
|
540.1
|
|
|
37.7
|
|
|
127.6
|
|
|
(30.2
|
)
|
|
675.2
|
|
||||||
Inventory
|
—
|
|
|
1,222.5
|
|
|
56.4
|
|
|
86.1
|
|
|
(11.1
|
)
|
|
1,353.9
|
|
||||||
Other current assets
|
—
|
|
|
74.0
|
|
|
0.1
|
|
|
14.8
|
|
|
—
|
|
|
88.9
|
|
||||||
Total current assets
|
—
|
|
|
1,869.9
|
|
|
94.3
|
|
|
237.3
|
|
|
(41.3
|
)
|
|
2,160.2
|
|
||||||
Property, plant and equipment
|
—
|
|
|
6,152.4
|
|
|
193.8
|
|
|
688.3
|
|
|
—
|
|
|
7,034.5
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,857.1
|
)
|
|
(107.0
|
)
|
|
(191.2
|
)
|
|
—
|
|
|
(5,155.3
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,295.3
|
|
|
86.8
|
|
|
497.1
|
|
|
—
|
|
|
1,879.2
|
|
||||||
Investment in subsidiaries
|
(3,058.8
|
)
|
|
1,988.0
|
|
|
—
|
|
|
71.0
|
|
|
999.8
|
|
|
—
|
|
||||||
Inter-company accounts
|
3,194.4
|
|
|
—
|
|
|
1,694.1
|
|
|
—
|
|
|
(4,888.5
|
)
|
|
—
|
|
||||||
Operating lease assets
|
—
|
|
|
213.8
|
|
|
2.7
|
|
|
29.2
|
|
|
—
|
|
|
245.7
|
|
||||||
Other non-current assets
|
—
|
|
|
59.0
|
|
|
33.4
|
|
|
309.5
|
|
|
—
|
|
|
401.9
|
|
||||||
TOTAL ASSETS
|
$
|
135.6
|
|
|
$
|
5,426.0
|
|
|
$
|
1,911.3
|
|
|
$
|
1,144.1
|
|
|
$
|
(3,930.0
|
)
|
|
$
|
4,687.0
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
666.4
|
|
|
$
|
27.5
|
|
|
$
|
62.5
|
|
|
$
|
(24.1
|
)
|
|
$
|
732.3
|
|
Accrued liabilities
|
—
|
|
|
212.5
|
|
|
7.4
|
|
|
23.0
|
|
|
—
|
|
|
242.9
|
|
||||||
Current portion of operating lease liabilities
|
—
|
|
|
50.8
|
|
|
1.0
|
|
|
2.1
|
|
|
—
|
|
|
53.9
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
37.5
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
37.8
|
|
||||||
Total current liabilities
|
—
|
|
|
967.2
|
|
|
35.9
|
|
|
87.9
|
|
|
(24.1
|
)
|
|
1,066.9
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
1,946.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,946.2
|
|
||||||
Long-term operating lease liabilities
|
—
|
|
|
183.2
|
|
|
1.7
|
|
|
28.0
|
|
|
—
|
|
|
212.9
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
805.3
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
808.0
|
|
||||||
Inter-company accounts
|
—
|
|
|
4,437.8
|
|
|
—
|
|
|
527.8
|
|
|
(4,965.6
|
)
|
|
—
|
|
||||||
Other non-current liabilities
|
—
|
|
|
145.1
|
|
|
0.7
|
|
|
31.6
|
|
|
—
|
|
|
177.4
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
8,484.8
|
|
|
38.3
|
|
|
678.0
|
|
|
(4,989.7
|
)
|
|
4,211.4
|
|
||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
135.6
|
|
|
(3,058.8
|
)
|
|
1,873.0
|
|
|
126.1
|
|
|
1,059.7
|
|
|
135.6
|
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
340.0
|
|
|
—
|
|
|
340.0
|
|
||||||
TOTAL EQUITY
|
135.6
|
|
|
(3,058.8
|
)
|
|
1,873.0
|
|
|
466.1
|
|
|
1,059.7
|
|
|
475.6
|
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
135.6
|
|
|
$
|
5,426.0
|
|
|
$
|
1,911.3
|
|
|
$
|
1,144.1
|
|
|
$
|
(3,930.0
|
)
|
|
$
|
4,687.0
|
|
Condensed Consolidated Balance Sheets
|
|||||||||||||||||||||||
December 31, 2018
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
22.1
|
|
|
$
|
8.2
|
|
|
$
|
18.3
|
|
|
$
|
—
|
|
|
$
|
48.6
|
|
Accounts receivable, net
|
—
|
|
|
515.4
|
|
|
34.0
|
|
|
95.3
|
|
|
(8.9
|
)
|
|
635.8
|
|
||||||
Inventory
|
—
|
|
|
1,299.6
|
|
|
53.9
|
|
|
75.6
|
|
|
(9.2
|
)
|
|
1,419.9
|
|
||||||
Other current assets
|
—
|
|
|
85.5
|
|
|
0.1
|
|
|
11.4
|
|
|
—
|
|
|
97.0
|
|
||||||
Total current assets
|
—
|
|
|
1,922.6
|
|
|
96.2
|
|
|
200.6
|
|
|
(18.1
|
)
|
|
2,201.3
|
|
||||||
Property, plant and equipment
|
—
|
|
|
6,111.1
|
|
|
189.7
|
|
|
668.4
|
|
|
—
|
|
|
6,969.2
|
|
||||||
Accumulated depreciation
|
—
|
|
|
(4,785.5
|
)
|
|
(102.8
|
)
|
|
(169.3
|
)
|
|
—
|
|
|
(5,057.6
|
)
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,325.6
|
|
|
86.9
|
|
|
499.1
|
|
|
—
|
|
|
1,911.6
|
|
||||||
Investment in subsidiaries
|
(3,017.4
|
)
|
|
1,931.1
|
|
|
—
|
|
|
68.2
|
|
|
1,018.1
|
|
|
—
|
|
||||||
Inter-company accounts
|
3,117.3
|
|
|
—
|
|
|
1,630.7
|
|
|
—
|
|
|
(4,748.0
|
)
|
|
—
|
|
||||||
Other non-current assets
|
—
|
|
|
54.3
|
|
|
32.9
|
|
|
315.6
|
|
|
—
|
|
|
402.8
|
|
||||||
TOTAL ASSETS
|
$
|
99.9
|
|
|
$
|
5,233.6
|
|
|
$
|
1,846.7
|
|
|
$
|
1,083.5
|
|
|
$
|
(3,748.0
|
)
|
|
$
|
4,515.7
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
722.5
|
|
|
$
|
26.2
|
|
|
$
|
55.5
|
|
|
$
|
(3.2
|
)
|
|
$
|
801.0
|
|
Accrued liabilities
|
—
|
|
|
251.5
|
|
|
8.7
|
|
|
28.7
|
|
|
—
|
|
|
288.9
|
|
||||||
Current portion of pension and other postretirement benefit obligations
|
—
|
|
|
38.4
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
38.7
|
|
||||||
Total current liabilities
|
—
|
|
|
1,012.4
|
|
|
34.9
|
|
|
84.5
|
|
|
(3.2
|
)
|
|
1,128.6
|
|
||||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
1,993.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,993.7
|
|
||||||
Pension and other postretirement benefit obligations
|
—
|
|
|
827.0
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
829.9
|
|
||||||
Inter-company accounts
|
—
|
|
|
4,312.3
|
|
|
—
|
|
|
511.2
|
|
|
(4,823.5
|
)
|
|
—
|
|
||||||
Other non-current liabilities
|
—
|
|
|
105.6
|
|
|
0.2
|
|
|
28.2
|
|
|
—
|
|
|
134.0
|
|
||||||
TOTAL LIABILITIES
|
—
|
|
|
8,251.0
|
|
|
35.1
|
|
|
626.8
|
|
|
(4,826.7
|
)
|
|
4,086.2
|
|
||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total stockholders’ equity (deficit)
|
99.9
|
|
|
(3,017.4
|
)
|
|
1,811.6
|
|
|
127.1
|
|
|
1,078.7
|
|
|
99.9
|
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
329.6
|
|
|
—
|
|
|
329.6
|
|
||||||
TOTAL EQUITY
|
99.9
|
|
|
(3,017.4
|
)
|
|
1,811.6
|
|
|
456.7
|
|
|
1,078.7
|
|
|
429.5
|
|
||||||
TOTAL LIABILITIES AND EQUITY
|
$
|
99.9
|
|
|
$
|
5,233.6
|
|
|
$
|
1,846.7
|
|
|
$
|
1,083.5
|
|
|
$
|
(3,748.0
|
)
|
|
$
|
4,515.7
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(2.2
|
)
|
|
$
|
84.4
|
|
|
$
|
35.6
|
|
|
$
|
20.4
|
|
|
$
|
(2.0
|
)
|
|
$
|
136.2
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(56.3
|
)
|
|
(3.7
|
)
|
|
(22.4
|
)
|
|
—
|
|
|
(82.4
|
)
|
||||||
Other investing items, net
|
—
|
|
|
10.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.3
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(46.0
|
)
|
|
(3.7
|
)
|
|
(22.4
|
)
|
|
—
|
|
|
(72.1
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (payments) under credit facility
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.0
|
)
|
||||||
Redemption of long-term debt
|
—
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
||||||
Inter-company activity
|
2.2
|
|
|
28.0
|
|
|
(40.0
|
)
|
|
7.8
|
|
|
2.0
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.3
|
)
|
|
—
|
|
|
(15.3
|
)
|
||||||
Other financing items, net
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||||
Net cash flows from financing activities
|
2.2
|
|
|
(27.2
|
)
|
|
(40.0
|
)
|
|
(7.5
|
)
|
|
2.0
|
|
|
(70.5
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
11.2
|
|
|
(8.1
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(6.4
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
22.1
|
|
|
8.2
|
|
|
18.3
|
|
|
—
|
|
|
48.6
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
33.3
|
|
|
$
|
0.1
|
|
|
$
|
8.8
|
|
|
$
|
—
|
|
|
$
|
42.2
|
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||||||||||||||||
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
AK
Holding
|
|
AK
Steel
|
|
Guarantor Subsidiaries of the Senior Notes
|
|
Other Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Company
|
||||||||||||
Net cash flows from operating activities
|
$
|
(1.5
|
)
|
|
$
|
123.0
|
|
|
$
|
31.1
|
|
|
$
|
38.1
|
|
|
$
|
(3.3
|
)
|
|
$
|
187.4
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital investments
|
—
|
|
|
(51.8
|
)
|
|
(2.1
|
)
|
|
(10.1
|
)
|
|
—
|
|
|
(64.0
|
)
|
||||||
Other investing items, net
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Net cash flows from investing activities
|
—
|
|
|
(52.8
|
)
|
|
(2.1
|
)
|
|
(8.8
|
)
|
|
—
|
|
|
(63.7
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net borrowings (payments) under credit facility
|
—
|
|
|
(80.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80.0
|
)
|
||||||
Inter-company activity
|
2.4
|
|
|
22.3
|
|
|
(31.1
|
)
|
|
3.1
|
|
|
3.3
|
|
|
—
|
|
||||||
SunCoke Middletown distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
(34.8
|
)
|
|
—
|
|
|
(34.8
|
)
|
||||||
Other financing items, net
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
||||||
Net cash flows from financing activities
|
1.5
|
|
|
(57.7
|
)
|
|
(31.1
|
)
|
|
(31.7
|
)
|
|
3.3
|
|
|
(115.7
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
12.5
|
|
|
(2.1
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
8.0
|
|
||||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
14.5
|
|
|
7.2
|
|
|
16.3
|
|
|
—
|
|
|
38.0
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
27.0
|
|
|
$
|
5.1
|
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
46.0
|
|
•
|
commercializing our innovative new products and services;
|
•
|
transforming our operations to significantly improve our competitive position; and
|
•
|
driving future growth in new markets and downstream businesses.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||
Net sales
|
|
$1,680.5
|
|
$1,746.6
|
|
(4
|
)%
|
|
$3,378.2
|
|
$3,405.5
|
|
(1
|
)%
|
||||
Average net selling price per ton of flat-rolled steel
|
|
1,102
|
|
|
1,101
|
|
|
—
|
%
|
|
1,107
|
|
|
1,073
|
|
|
3
|
%
|
Net sales outside the United States
|
|
152.1
|
|
|
172.9
|
|
|
|
|
295.3
|
|
|
340.7
|
|
|
|
||
Net sales outside the United States as a percent of net sales
|
|
9
|
%
|
|
10
|
%
|
|
|
|
9
|
%
|
|
10
|
%
|
|
|
|
|
Six Months Ended June 30,
|
||
Market
|
|
2019
|
|
2018
|
Automotive
|
|
64%
|
|
65%
|
Infrastructure and Manufacturing
|
|
16%
|
|
15%
|
Distributors and Converters
|
|
20%
|
|
20%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to AK Holding
|
|
$
|
66.8
|
|
|
$
|
56.6
|
|
|
$
|
62.3
|
|
|
$
|
85.3
|
|
Net income attributable to noncontrolling interests
|
|
13.1
|
|
|
15.7
|
|
|
25.7
|
|
|
31.8
|
|
||||
Income tax expense (benefit)
|
|
1.0
|
|
|
(0.5
|
)
|
|
2.4
|
|
|
(5.4
|
)
|
||||
Interest expense, net
|
|
36.9
|
|
|
37.7
|
|
|
74.6
|
|
|
75.1
|
|
||||
Depreciation and amortization
|
|
53.0
|
|
|
58.6
|
|
|
109.3
|
|
|
119.9
|
|
||||
EBITDA
|
|
170.8
|
|
|
168.1
|
|
|
274.3
|
|
|
306.7
|
|
||||
Less: EBITDA of noncontrolling interests (a)
|
|
19.3
|
|
|
19.7
|
|
|
39.3
|
|
|
39.6
|
|
||||
Ashland Works closure
|
|
—
|
|
|
—
|
|
|
77.4
|
|
|
—
|
|
||||
Adjusted EBITDA
|
|
$
|
151.5
|
|
|
$
|
148.4
|
|
|
$
|
312.4
|
|
|
$
|
267.1
|
|
Adjusted EBITDA margin
|
|
9.0
|
%
|
|
8.5
|
%
|
|
9.2
|
%
|
|
7.8
|
%
|
(a)
|
The reconciliation of net income attributable to noncontrolling interests to EBITDA of noncontrolling interests is as follows:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to noncontrolling interests
|
|
$
|
13.1
|
|
|
$
|
15.7
|
|
|
$
|
25.7
|
|
|
$
|
31.8
|
|
Depreciation
|
|
6.2
|
|
|
4.0
|
|
|
13.6
|
|
|
7.8
|
|
||||
EBITDA of noncontrolling interests
|
|
$
|
19.3
|
|
|
$
|
19.7
|
|
|
$
|
39.3
|
|
|
$
|
39.6
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reconciliation to Net Income Attributable to AK Holding
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to AK Holding, as reported
|
|
$
|
66.8
|
|
|
$
|
56.6
|
|
|
$
|
62.3
|
|
|
$
|
85.3
|
|
Ashland Works closure
|
|
—
|
|
|
—
|
|
|
77.4
|
|
|
—
|
|
||||
Adjusted net income attributable to AK Holding
|
|
$
|
66.8
|
|
|
$
|
56.6
|
|
|
$
|
139.7
|
|
|
$
|
85.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to Diluted Earnings per Share
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share, as reported
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.20
|
|
|
$
|
0.27
|
|
Ashland Works closure
|
|
—
|
|
|
—
|
|
|
0.24
|
|
|
—
|
|
||||
Adjusted diluted earnings per share
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.44
|
|
|
$
|
0.27
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
Period
|
|
Total Number of Shares Purchased (a)
|
|
Average Price Paid Per Share (a)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (b)
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b)
|
|||||
April 2019
|
|
67
|
|
|
$
|
2.48
|
|
|
—
|
|
|
||
May 2019
|
|
489
|
|
|
2.48
|
|
|
—
|
|
|
|||
June 2019
|
|
210
|
|
|
2.00
|
|
|
—
|
|
|
|||
Total
|
|
766
|
|
|
2.35
|
|
|
—
|
|
$
|
125.6
|
|
(a)
|
Employees may have us withhold shares to pay federal, state and local taxes due upon the vesting of restricted stock or performance shares under the terms of the AK Steel Holding Corporation Stock Incentive Plan. In this event, the withheld shares 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.
|
(b)
|
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.
|
|
|
|
AK STEEL HOLDING CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
July 29, 2019
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
|
|
|
|
Dated:
|
July 29, 2019
|
|
/s/ Gregory A. Hoffbauer
|
|
|
|
Gregory A. Hoffbauer
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
July 29, 2019
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
July 29, 2019
|
|
/s/ Jaime Vasquez
|
|
|
|
Jaime Vasquez
|
|
|
|
Vice President, Finance and Chief Financial Officer
|
(1)
|
This Quarterly Report on Form 10-Q for the period ending June 30, 2019 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 Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
July 29, 2019
|
|
/s/ Roger K. Newport
|
|
|
|
Roger K. Newport
|
|
|
|
Chief Executive Officer
|
(1)
|
This Quarterly Report on Form 10-Q for the period ending June 30, 2019 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 Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
July 29, 2019
|
|
/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
|
|
17
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
$
|
28
|
|
(a)
|
|
3
|
|
(b)
|
|
1
|
|
|
|
—
|
|
|
(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 is challenging several of the citations.
|
(b)
|
These pending legal actions all relate to contests of citations and orders referenced in Subpart B of the Mine Act’s procedural rules.
|