Investments in Equity Investees (Notes)

6 Months Ended

Jun. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

The Company has investments in several businesses accounted for using the equity method of accounting. These investees are Combined Metals of Chicago, LLC (“Combined Metals”), Magnetation LLC (“Magnetation”) and Rockport Roll Shop LLC (“Rockport Roll Shop”), of which the Company has equity ownership of 40.0%, 49.9% and 50.0%, respectively. Cost of products sold includes the Company’s share of income from Combined Metals and Rockport Roll Shop of $2.9 and $2.4 for the three months ended June 30, 2014 and 2013, respectively, and $5.1 and $4.1 for the six months ended June 30, 2014 and 2013, respectively. Included in other income (expense) was the Company’s share of income (loss) related to Magnetation of $(2.5) and $(1.2) for the three months ended June 30, 2014 and 2013, respectively, and $(3.8) and $1.1 for the six months ended June 30, 2014 and 2013, respectively.

Summarized financial statement data for all investees is presented below.



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenue	$	85.3	$	74.3	$	157.7	$	143.9
Gross profit	23.6		26.4		48.1		51.5
Net income	5.0		5.4		10.5		16.5

Magnetation

Magnetation utilizes advanced magnetic separation technology to recover iron ore from existing stockpiles of previously-mined material, such as tailings basins. Magnetation controls substantial volumes of these existing stockpiles, as well as other resources with significant amounts of iron content that could allow it to eventually recover iron ore from traditional mining operations. Traditional mining operations are not currently anticipated to be necessary for the foreseeable future, depending upon factors such as the recovery yield of Magnetation’s concentrate plants and future acquisitions of additional tailings basins and other iron-bearing resources. Through a pellet purchase agreement, AK Steel will have the right to purchase all of the pellets produced by Magnetation’s iron ore pelletizing plant when construction is completed, currently expected to occur in late third quarter of 2014.

AK Steel has committed to an investment of capital in Magnetation totaling $297.5. With AK Steel’s $45.0 contribution in the second quarter of 2014, the Company contributed a total of $242.5 for its interest in Magnetation through June 30, 2014. The Company made an additional contribution of $45.0 in July 2014 and expects to contribute the remaining $10.0 when the pellet plant begins operations. AK Steel has no legal or contractual obligation to provide further financing to Magnetation beyond the amount mentioned above. As of June 30, 2014, the Company’s carrying cost of the investment exceeded its share of the underlying equity in net assets of Magnetation, recorded using historical carrying amounts, by $106.9. This difference is being amortized through equity in earnings and its amortization is included in the Company’s share of income (loss) amounts above.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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