AK Steel Reports First Quarter 2016 Financial Results

West Chester, OH, April 26, 2016—AK Steel (NYSE: AKS) today reported its financial results for the first quarter of 2016.

1st Quarter 2016 Performance Summary
• Shipments of 1,658,200 tons
• Sales of $1.52 billion with an average selling price of $914 per ton
• Net loss of $13.6 million, or $0.08 per diluted share
• Adjusted EBITDA of $81.1 million, or $49 per ton
• Liquidity of $693.4 million

AK Steel reported a net loss of $13.6 million, or $0.08 per diluted share of common stock, for the first quarter of 2016, compared to a net loss of $306.3 million, or $1.72 per diluted share, for the first quarter of 2015. The net loss for the year-ago first quarter included a charge of $256.3 million, or $1.44 per diluted share, to write off the company’s investment in Magnetation LLC. The company reported a 41% increase in adjusted EBITDA (as defined in the “Non-GAAP Financial Measures” section below) to $81.1 million, or 5.3% of net sales, for the first quarter of 2016 from adjusted EBITDA of $57.5 million, or 3.3% of net sales, for the first quarter of 2015.

“We achieved significant improvement from a year ago as we made the strategic decision to reduce our exposure to commodity spot markets, optimize our footprint and focus on higher value products,” said Roger K. Newport, AK Steel’s Chief Executive Officer. Mr. Newport continued, “As a result of these actions, our continuous emphasis on operational improvements and relentless attention to cost management, our adjusted EBITDA improved significantly compared to a year ago.”

Shipments of 1,658,200 tons in the first quarter of 2016 were 5% lower than the first quarter of 2015, reflecting the company’s strategic decision to reduce exposure to commodity products. Shipments of hot rolled carbon steel products, most of which were sold into the commodity spot market, declined 34% from a year ago. Partially offsetting this decline was a 7% increase in higher value coated products that are sold mostly to the automotive market. As a result of reduced volumes and lower average selling prices, net sales for the first quarter of 2016 declined to $1.52 billion from $1.75 billion in the first quarter of 2015.

The company’s adjusted EBITDA increased 41% to $81.1 million in the first quarter of 2016 from the first quarter of 2015, principally due to a better product mix, operational improvements, a continuous focus on reducing costs, and lower raw material and energy costs. The first quarter of 2016 included a LIFO credit of $12.3 million, compared to a LIFO credit of $17.1 million in the first quarter of 2015.

The company ended the first quarter of 2016 with total liquidity of $693.4 million. Cash flows from operating activities were $136.7 million and included a $71.6 million contribution from working capital, as the company continued to proactively manage its inventory levels. The company repaid borrowings under its credit facility by $30.0 million and increased cash and cash equivalents by $56.4 million during the first quarter of 2016.

AK Steel
AK Steel is a world leader in the production of flat-rolled carbon, stainless and electrical steel products, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. Headquartered in West Chester, Ohio (Greater Cincinnati), the company employs approximately 8,500 men and women at eight steel plants, two coke plants and two tube manufacturing plants across six states: Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia. Additional information about AK Steel is available at www.aksteel.com.

Safe Harbor Statement
Certain statements the company made or incorporated by reference in this release, or made in other documents furnished to or filed with the Securities Exchange Commission, as well as in press releases or in oral presentations made by company employees, reflect management’s estimates and beliefs and are intended to be “forward-looking statements” identified in the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “believes,” “intends,” “plans,” “estimates” and other similar references to future periods typically identify forward-looking statements. The company cautions readers that forward-looking statements reflect the company’s current beliefs and judgments, but are not guarantees of future performance or outcomes. They are based on a number of assumptions and estimates that are inherently affected by economic, competitive, regulatory, and operational risks, uncertainties and contingencies that are beyond the company’s control, and upon assumptions about future business decisions and conditions that may change.

Forward-looking statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events or performance will differ materially from such predictions as a result of certain risk factors, including reduced selling prices, shipments and profits associated with a highly competitive and cyclical industry; increased global steel production and imports; changes in the cost of raw materials and energy; the company’s significant amount of debt and other obligations; severe financial hardship or bankruptcy of one or more of the company’s major customers or key suppliers; reduced demand in key product markets due to competition from aluminum or other alternatives to steel; excess inventory of raw materials; supply chain disruptions or poor quality of raw materials; production disruption or reduced production levels; the company’s healthcare and pension obligations; not reaching new labor agreements on a timely basis; major litigation, arbitrations, environmental issues and other contingencies; regulatory compliance and changes; climate change and greenhouse gas emission limitations; financial, credit, capital and banking markets; derivative contracts to hedge commodity pricing volatility; potential permanent idling of facilities; inability to fully realize benefits of margin enhancement initiatives; information technology security threats and cybercrime; as well as those risks and uncertainties discussed in more detail in the company’s Annual Report on Form 10-K for the year ended December 31, 2015, as updated in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission.

As such, the company cautions readers not to place undue reliance on forward-looking statements, which speak only to the company’s plans, assumptions and expectations as of the date hereof. The company undertakes no obligation to publicly update any forward-looking statement, except as required by law.

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