Investor Presentation
November 2017
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 1
Forward-Looking Statements
We have made forward-looking statements in this presentation that are based on our management’s beliefs and assumptions and on information available to our management at the time such
statements were made and hereby are identified as “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential
operating performance improvements, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and
can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “should” or the
negative of these terms or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in our forward-looking statements. You should not rely on any
forward-looking statements. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: reduced selling prices; shipments
and profits associated with a highly competitive and cyclical industry; domestic and global steel overcapacity; changes in the cost of raw materials and energy; our significant amount of debt and other
obligations; severe financial hardship or bankruptcy of one or more of our major customers or key suppliers; our significant proportion of sales to the automotive market; reduced demand in key product
markets due to competition from aluminum and other alternatives to steel; excess inventory of raw materials; supply chain disruptions or poor quality of raw materials; production disruption or reduced
production levels; our 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; conditions in the financial, credit, capital and banking markets; our use of 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; failure to achieve
expected benefits of the Precision Acquisition and/or to integrate Precision Partners successfully and failure to achieve expected benefits of the Precision Acquisition.
The risk factors discussed in this presentation and under “Item 1A.—Risk Factors” in AK Holding’s Annual Report on Form 10-K for the year ended December 31, 2016 and under similar headings in AK
Holding’s subsequently filed quarterly reports on Form 10-Q, as well as the other risks that could cause our results to differ materially from those expressed in forward-looking statements. There may be
other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. We expressly disclaim any obligation to
update our forward-looking statements other than as required by law.
Non-GAAP financial measures
Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the
United States of America because management believes such measures are useful to investors. These non-GAAP financial measures include EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and
Adjusted EBITDA per ton. Because our calculations of these measures may differ from similar measures used by other companies, you should be careful when comparing our non-GAAP financial
measures to those of other companies. A reconciliation of non-GAAP financial measures to GAAP financial measures is included in the Appendix to this presentation.
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 2
Agenda
Business Update2.
Financial Update3.
Summary4.
New Direction Defined1.
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N
New Direction Defined
November 2017
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Industry Leading Safety Performance
OSHA Recordable Frequency (number of injuries per 200,000 manhours)
Notes: Based upon most current AISI data available and AK Steel data through first half 2017.
AK Steel data 2015 and forward includes Dearborn Works.
AK Steel’s safety performance is ~5 times
better than AISI composite
During 2016, two AK Steel facilities
operated the entire year with no OSHA
recordables
Dearborn Works had lowest ever annual
OSHA recordables in 2016
Through the first half of 2017, five AK Steel
facilities achieved zero OSHA recordables
AK Steel’s safety performance highlights
the effectiveness of its processes, which
drive business and operational execution
2.33
2.01
2.45
1.87
1.37
1.70 1.68
1.45 1.53 1.47
0.29 0.25 0.33 0.32 0.26 0.24 0.25
0.45 0.39 0.32
0.00
1.00
2.00
3.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
First
Half
AISI AK Steel
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Value added product mix
− Leader in electrical, stainless and carbon steels
− Flat-rolled, tubular, die design and tooling, hot and cold stamping
Providing solutions to customers
− Innovative materials and parts
Strengthening balance sheet
− Strong liquidity and no near-term maturities
Further de-risking the company
− Large percentage of contract business
− Not a commodity or momentum play
Key Success Factors Remain a Core Focus
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Areas of Focus
Further EBITDA margin improvements
Differentiate ourselves as a leader in lightweighting solutions
Accelerate the adoption of next generation advanced high strength steels
Minimize volatility and deliver
consistently profitable results
Additional down stream acquisitions
Further strengthening of balance sheet
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Coated
53%
Other
3%
Cold-rolled
18%
Stanless/Electrical
14%
Hot-rolled
12%
November 2017 7
High Value Product Mix With More Predictable Pricing
Fixed Base
Price Contracts
~70%
Steel Index
Based Contracts
~20%
Spot Market
~10%
Note: For the nine months ended September 30, 2017.
Flat-Rolled Product Mix Customer Contract Structure
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Margins Increased as We Reduce Commodity Exposure
Note: See Appendix for reconciliations of non-GAAP financial measures
0
2,000
4,000
6,000
8,000
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016 12 mos.
ending
3Q 2017
Fl
at
-R
ol
le
d
Shipm
en
ts
(
0
0
0s
T
on
s)
Ad
ju
st
e
d
EBIT
D
A
Ma
rg
in
Adjusted EBITDA Margin Flat-Rolled Shipments
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Technologically advanced steelmaking processes and capabilities
− Focused on optimizing facilities and operational excellence
− Recent major maintenance and upgrade projects at Middletown and
Mansfield Works completed as planned
− Operations are supported by world class research capabilities
− Intensive predictive/preventive maintenance program; investing more than
$600 million annually in maintenance expense company-wide
Investing for the future
− Dearborn Works coating line upgraded to produce next generation advanced
high strength steels
Modernized and Well-Maintained Facilities and Equipment
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Precision Partners – Delivering Customer Solutions
Full range of manufacturing
capabilities including:
− Advanced tool design
technology
− 5 hot stamping cells with 9
lines
− 85 cold stamping presses,
including 17 “tryout” presses
− 123 welding and assembly cells
− 6 laser-cutting machines
− E-coating line
Founded in 1955
Eight facilities in North America with a total of more than 1,000
employees, including ~300 engineers and skilled tool makers
Specializes in the design and engineering of tooling and die making
and the stamping of complex automotive components
Broad portfolio of highly-engineered solutions
Technology-focused company
− Unique intellectual property and extensive history of innovation
− Focus on complex, difficult-to-manufacture parts
− Results-oriented culture with a proven track record of providing
customer solutions
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Strategic Logic – Downstream Platform Serving Our Core Market
Creates a premier integrated supplier to the automotive market
Enhances our product offerings
Leverages both AK Steel’s and Precision’s research and
innovation capabilities
Accelerates introduction of lightweighting solutions
Creating a differentiated, innovative leader in the steel industry
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Business Update
November 2017
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Steel – The Automotive Solution
Existing products for virtually all applications
New product developments for lightweighting
Right product mix
Long-term view / strategic approach
Product Mix
Hot Rolled
Cold Rolled
Coated/Press
Hardenable Steel
Platform Mix
SUV/CUV/Light Trucks
Cars
Note: For the year ended December 31, 2016.
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Stainless Steel
Chrome (400 series)
− Leader in auto exhaust market
− New grades
− Automotive OEM relationships
− Brite Anneal trim for auto market
Superferritic
Precipitation hardening alloys
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Electrical Steel
High-efficiency GOES among the best in the world
Solid relationships with U.S. transformer manufacturers
International sales team
Hybrid/Electric Vehicles motors (high-efficiency NOES)
Innovation focus on higher-efficiency products in all markets
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AK Tube Delivering Value to Customers Downstream
Four facilities located in Ohio, Indiana and Mexico
Electric Resistance Welded (ERW) stainless and carbon tubing for automotive/truck
and other applications
Innovators in the production of tubing made from Advanced High Strength Steels
Annual shipments of ~140 million feet
Supplying these products enhances our position in the value chain while further
allowing us to offer more product solutions to our clients
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 17
Lightweighting Utilizing Advanced High Strength Steel (AHSS) Tubing
Automotive
− Replacing stamped structural components
with tube
− Replacing current tubular components
− Providing lightweighting solutions for light
vehicle and truck applications
Engine Cradle
A Pillar
Door Intrusion Beams
Seat Tubing
B Pillar
Roof Rail/Support
Instrument Panel Beam
Front Side Members
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Research and Innovation Center
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Inventive Steel Solutions
Press Hardenable Steel
NEXMET™
NanoSteel® Electrical Steels and DOE Collaboration
November 2017
440EX 1000 & 1200
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Financial Update
November 2017
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Strengthening the Balance Sheet
Achieved $700 million debt reduction target announced in April 2016
− Free cash flow generation
Reduced interest cost and extended debt maturity
− Created “runway” with minimal near-term maturities
More than ample liquidity
− $930 million at 09/30/17
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 22
Balance Sheet Transformation
December 31, 2015
$550
$150
$530
$406
$290
$7
$62
$30
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Credit Facility Senior Notes Senior Secured Notes Industrial Revenue Bonds
Total Debt: $2.4 billion
$700
$537
September 30, 2017
$150
$7
$406 $415
$380
$62
$280
$400
$30
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Total Debt: $2.1 billion
$150
$380
($ Millions)
Note: Excludes capital lease for Research and Innovation Center
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Historical Financial Profile
Continued benefits achieved through the strategic initiatives implemented during the past year and a half
($ Millions)
Net Sales
Growth vs. Nine Months 2016
Operating Profit
Growth vs. Nine Months 2016
Net Income
Growth vs. Nine Months 2016
Adjusted EBITDA(1)
Adjusted EBITDA Margin
Liquidity(2)
$4,585
3%
$260
8%
$118
116%
$354
7.7%
$929.5
Nine Months 2017 Snapshot
(1) See Appendix for reconciliations of non-GAAP financial measures.
(2) Liquidity defined as Revolving Credit Facility availability plus cash.
Completed acquisition of Precision Partners
Refinanced 2022 Notes and revolving credit facility
3Q 2017 results in-line with guidance
− Impacted by debt refinancing, acquisition costs and
mark-to-market hedge accounting
Previously planned and disclosed maintenance
impacts both 3Q and 4Q 2017 results
Mix management and continued focus on cost
control resulted in an 8% increase year-over-year in
YTD Adjusted EBITDA(1)
3Q 2017 Performance Update
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Summary
November 2017
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 25
Executing Our Strategy
Investing resources in higher-value products
− Positioning with customers that align with our “best value” approach
− Minimizing exposure to commoditized products and markets where quality is less valued
Implementing margin enhancement actions
− Dedicating capacity to more profitable products
− Relentless focus on cost and process improvements
Accelerating investment in research and innovation
− Working hand-in-hand with our customers and technical partners
− Substantial expansion and investments in research and innovation
Focusing on downstream, value-added products
− Advances our product innovations in the high growth automotive lightweighting space
− Expand into complementary and synergistic steel processes and products
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N
Appendix
November 2017
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Investor Contact Information
Douglas O. Mitterholzer
Assistant Treasurer and
General Manager, Investor Relations
(513) 425-5215
doug.mitterholzer@aksteel.com
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 29
Non-GAAP Financial Measures
Reconciliation of Adjusted EBITDA
Qtr ended Qtr ended Qtr ended YTD TTM
($ Millions) 2012 2013 2014 2015 2016 03/31/2017 06/30/2017 09/30/2017 09/30/2017 09/30/2017
Net income (loss) attributable to AK Steel Holding $ (1,027.3) $ (46.8) $ (96.9) $ (509.0) $ (7.8) $ 62.5 $ 61.2 $ (5.8) $ 117.9 $ 55.5
Net income (loss) attributable to NCI 28.7 64.2 62.8 62.8 66.0 16.2 15.2 17.1 $ 48.5 $ 61.9
Income tax expense (benefit) 790.0 (10.4) 7.7 63.4 3.2 (13.4) (8.7) (18.8) $ (40.9) $ (41.8)
Interest expense 86.7 127.4 144.7 173.0 163.9 39.4 38.2 37.5 $ 115.1 $ 154.5
Interest income (0.4) (1.1) (0.7) (1.3) (1.6) (0.4) (0.4) (0.5) $ (1.3) $ (1.7)
Depreciation and amortization 206.2 200.0 211.0 224.4 221.4 58.9 56.1 60.8 175.8 231.3
EBITDA $ 83.9 $ 333.3 $ 328.6 $ 13.3 $ 445.1 $ 163.2 $ 161.6 $ 90.3 $ 415.1 $ 459.7
Less: EBITDA of NCI (a) 60.0 78.3 77.2 77.1 80.8 20.3 19.6 21.1 61.0 78.3
Pension and OPEB net corridor charges / settlement
loss 157.3 5.5 131.2 68.1 — 68.1
Charges for termination of pellet agreement and
related transportation costs 69.5 — 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 $ 181.2 $ 255.0 $ 280.2 $ 393.4 $ 501.9 $ 142.9 $ 142.0 $ 69.2 $ 354.1 $ 519.0
Adjusted EBITDA margin 3.1% 4.6% 4.3% 5.9% 8.5% 9.3% 9.1% 4.6% 7.7% 8.6%
(a) The reconciliation of EBITDA of noncontrolling interest to net income attributable to noncontrolling interests is as follows:
Net income (loss) attributable to noncontrolling
interests $ 28.7 $ 64.2 $ 62.8 $ 62.8 $ 66.0 $ 16.2 $ 15.2 $ 17.1 $ 48.5 $ 61.9
Depreciation 31.3 14.1 14.4 14.3 14.8 4.1 4.4 4.0 12.5 16.4
EBITDA of noncontrolling interests $ 60.0 $ 78.3 $ 77.2 $ 77.1 $ 80.8 $ 20.3 $ 19.6 $ 21.1 $ 61.0 $ 78.3
S A F E T Y | Q U A L I T Y | P R O D U C T I V I T Y | I N N O V A T I O N November 2017 30
Non-GAAP Financial Measures
Reconciliation of Adjusted Net Income and Flat-rolled Shipments
Qtr ended Qtr ended Qtr ended YTD
($ Millions) 2012 2013 2014 2015 2016 03/31/2017 06/30/2017 09/30/2017 09/30/2017
Reconciliation to Net Income (Loss) Attributable to AK Steel Holding Corporation
Net income (loss) attributable to AK Steel Holding Corporation, as reported $ (1,027.3) $ (46.8) $ (96.9) $ (509.0) $ (7.8) $ 62.5 $ 61.2 $ (5.8) $ 117.9
Pension and OPEB net corridor and settlement charges 97.4 5.5 131.2 68.1 —
Non-cash income tax charge from change in deferred tax asset valuation
allowance 865.5 —
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 $ (64.4) $ (46.8) $ (59.7) $ (51.8) $ 129.8 $ 62.5 $ 61.2 $ (5.8) $ 117.9
Reconciliation to Diluted Earnings (Losses) per Share
Diluted earnings (loss) per share, as reported $ (9.06) $ (0.34) $ (0.65) $ (2.86) $ (0.03) $ 0.19 $ 0.19 $ (0.02) $ 0.37
Pension and OPEB net corridor charge/settlement loss 0.86 0.04 0.74 0.29
Non-cash income tax charge from change in deferred tax asset valuation
allowance 7.63
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 $ (0.57) $ (0.34) $ (0.40) $ (0.29) $ 0.56 $ 0.19 $ 0.19 $ (0.02) $ 0.37
Flat-rolled Shipments 5,299.3 5,153.7 6,007.2 6,974.0 5,936.4 1,456.2 1,434.3 1,368.6 4,259.1