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A Message From Jim Wainscott

RESOLVE to Win in 2013:

At AK Steel, we demonstrated a strong “RESOLVE to Win” in 2013 by striving to Restore profitability and generate EBITDA to meet our needs. We remained focused on Selling more steel and growing profitable sales, Operating at higher rates of efficiency and ensuring our Liquidity remained strong while we Vertically integrated and worked hard to Exceed expectations.

ROAD to Recovery

Thanks to the hard work and dedication of the men and women of AK Steel, the company returned to profitability in the fourth quarter of 2013 and finished the year in strong fashion. In addition, we improved across virtually all facets of our business, and we are well-positioned for the future. For the full-year 2013, AK Steel’s revenues reached approximately $5.6 billion on shipments of about 5.3 million tons. Our average selling price for 2013 was $1,056 per ton, and we ended the year 2013 with solid liquidity of approximately $845 million.

Safety First, First In Safety

Safety is our top priority at AK Steel, and our 2013 safety performance was nothing short of exceptional. In fact, we tied our best-ever company performance for safety with only 16 OSHA recordable injuries for the entire year of 2013. As a result of our commitment to safety, the company received significant recognition. Our Coshocton Works, Zanesville Works and AK Tube plant in Walbridge, Ohio, each received awards for safety from the Ohio Bureau of Workers’ Compensation Division of Safety and Hygiene in 2013. Of special note, our Rockport Works and Zanesville Works both operated the entire year 2013 without a single OSHA recordable injury. That represented three consecutive years without any recordable injuries at our Zanesville plant.

Zanesville Works Zero OSHA Recordable Injuries in 2011As a result of our commitment to safety, the company earned significant recognition in 2012. Our Coshocton Works and Zanesville Works both received awards for safety from the Ohio Bureau of Workers’ Compensation Division of Safety and Hygiene in 2012, and both of our AK Tube plants were recognized by the Fabricators & Manufacturers Association, International, for their exceptional safety performance.

In addition, our Middletown Works coke plant was honored for being one the safest cokemaking facilities in America in 2013. By operating the entire year without any OSHA recordable injuries, the plant earned the coveted Max Eward Safety Award from the American Coke and Coal Chemicals Institute. The recognition marks the tenth time that our Middletown Works coke plant has received the award. These are all marvelous achievements, and they speak volumes about our people and our culture of safety at AK Steel. I offer my sincere thanks to all of our employees for making safety their number one priority every day.

Quality Performance

On the quality front, we established several all-time best records for internal quality performance in 2013. Simply put, we made our steel right the first time more than ever before. We also set numerous productivity and yield records in 2013 at our carbon and specialty steel finishing units, with the greatest gains achieved at our Butler Works and Coshocton Works locations. From an external standpoint, our quality continued to shine in the eyes of customers in 2013. According to independent surveys conducted by Jacobson and Associates, our customers, once again, rated us Number One in overall satisfaction for the full-year 2013 as compared to our specialty steel and integrated carbon steel competitors.

In recognition of our outstanding performance in the areas of quality and customer service, we were also named a finalist for the “Steel Company of the Year Award” in 2013, which is presented by American Metal Market, a leading metal industry publication. Serving customers better than any other steelmaker with some of the finest carbon, stainless and electrical steel products produced anywhere in the world is what AK Steel is all about. The high rankings and awards we receive are important because they speak to the solid relationships that we strive to build with all of our customers.

At AK Steel, serving customers better than any other steelmaker is at the heart of who we are, what we do and how we do it. The high rankings and awards we receive are important because they speak to the solid relationships that we strive to build with all of our customers. They are also a valuable indicator of future business opportunities that will come our way.

Strategic Investments

To enhance our profit margins over the long-term, we continued to develop our strategic investments in Magnetation LLC and AK Coal Resources throughout 2013. By becoming more vertically integrated on the iron ore and coal fronts, we will gain greater control over our cost structure, enhance our raw materials self-sufficiency and benefit from a financial hedge against global market price increases for those critical steelmaking inputs. In recognition of these strategic initiatives, we were honored to receive American Metal Market’s award for “Best Mergers and Acquisitions” in 2013.

Magnetation LLC

We continue to be very excited about our investment in Magnetation, our joint venture to produce iron pellets for our blast furnaces in Middletown, Ohio and Ashland, Kentucky. The joint venture utilizes magnetic separation technology to recover iron ore from existing stockpiles of previously mined material. Utilizing these iron ore “tailings” eliminates the need for traditional drilling, blasting and excavating and can result in the creation of new wetlands in an environmentally responsible manner. Construction began on Magnetation’s new iron ore pellet plant in Reynolds, Indiana during the second quarter of 2013, and the project is on-budget and moving ahead of schedule. We expect that the plant will provide initial pellets in the fourth quarter of 2014, or earlier, and that it will be at a full run-rate of about 3 million tons of pellets in 2015. This represents about 50 percent of our annual iron ore pellet needs.

AK Coal Resources, Inc.

On the coal front, we made excellent progress in 2013 at AK Coal’s first mine, the North Fork Mine, located in Somerset County, Pennsylvania. However, in light of current and anticipated near-term coal pricing, we have elected to defer the opening of additional mines. We will continue with permitting activities, but the timing of the opening of additional mines will depend on future coal market conditions. The low-vol coal reserves are not going anywhere, and when it makes good economic sense in the future to mine more of our own coal, we will do so.

Corporate Responsibility

At AK Steel, we strive to operate responsibly across all aspects of our business. On the environmental front, we completed a significant environmental remediation and restoration project on a stream in Middletown, Ohio in 2013. The project, which began in 2010, was part of an agreement with federal and state environmental protection agencies, and environmental groups, that was reached in 2006. Over the course of the project, contaminated soil was properly removed and disposed, and more than 13,000 new trees and shrubs were planted, returning the area to its natural state. The entire project was also completed without a single recordable injury – an outstanding accomplishment.

In regard to our diversity initiatives, AK Steel was named “Corporation of the Year” in 2013 by the Greater Cincinnati Minority Counsel Program (GCMCP). This prestigious recognition reflects our Legal Department’s commitment to increasing the volume of work the company assigns to minority lawyers, as well as our overall support of the GCMCP’s mission. The award exemplifies our corporate values and reflects our commitment to diversity across all areas of our business. On a personal note, I was honored to serve as the Vice Chair for the United Way of Greater Cincinnati’s 2013 fundraising campaign. I will be serving as Chair of the campaign in 2014, helping AK Steel and the United Way make a positive difference in the lives of others.

Sound Financial Management

At AK Steel, everything we do is meant to add value for our shareholders. In 2013, the company’s combined pension and other postretirement benefit obligations decreased by about $719 million, or by approximately 40 percent, compared to the end of 2012. We contributed $181 million to the company’s pension trust fund in 2013. From 2005 through the end of 2013, we have contributed more than $1.6 billion to the pension fund. We also completed the first of three annual payments of $3 million each to fund the Zanesville Works VEBA, and we completed the third and final payment to the Butler Works VEBA in 2013. AK Steel’s stock price increased 78 percent in 2013, and the company ended the year 2013 in solid financial condition with liquidity of $845 million.

EMERGE in 2014

Time and again, the men and women of AK Steel have demonstrated an incredible resolve to rise to meet the challenge. I am fortunate to lead an excellent management team with a track record of success that will continue to serve the company well as we take advantage of the opportunities in 2014 and beyond. In addition, AK Steel is well-served by its Board of Directors. Robert H. Jenkins (Lead Director), Richard A. Abdoo, John S. Brinzo, Dennis C. Cuneo, William K. Gerber, Dr. Bonnie G. Hill, Ralph S. (“Mike”) Michael III, Shirley D. Peterson and Dr. James A. Thomson have many years of distinguished service on our Board. I am also pleased to welcome two new members to our Board, Mark G. Essig and Vicente Wright. I would like to take this opportunity to thank each of our Board members for his or her strong support and leadership in 2013. I would especially like to thank Bonnie Hill, who is retiring from our Board in May of 2014 after 20 years of dedicated service. We sincerely appreciate Bonnie’s service to the company and wish her great success in her future endeavors.

Dr. Bonnie G. Hill

AK Steel demonstrated its “RESOLVE” to win in 2013, and we are determined to “EMERGE” as a stronger company in 2014 by:

Executing our plans,
Maintaining our focus on our core values,
Enhancing our earnings and cash flow as we continue to seek the full benefits of our
Raw materials strategic initiatives,
Growing profitable sales and enhancing margins because we are
Energized for our future.