© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
C r e a t i n g I n n o v a t i v e S t e e l S o l u t i o n s
First Quarter 2018 Financial Results
April 30, 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 2
AK Steel Executive Management Team
Roger Newport Chief Executive Officer
Kirk Reich President and Chief Operating Officer
Jaime Vasquez Vice President – Finance and Chief Financial Officer
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 3
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; risks related to U.S. government actions on Section 232 and 301, NAFTA and/or other trade
agreements, treaties or policies; changes in the cost of raw materials, supplies 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; the company’s significant proportion of sales to the automotive market; 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 or supplies; 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 emissions; conditions in the financial, credit, capital and banking markets; the company’s 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, cybercrime and exposure of private
information; failure to achieve the expected benefits of the Precision Partners acquisition and/or to integrate Precision Partners successfully; changes in tax laws and regulations.
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, 2017 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, Adjusted
Net Income (Loss), and Adjusted Earnings Per Share. 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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Roger Newport
Chief Executive Officer
April 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 5
Safety Highlights – 2017
Three facilities achieved ZERO OSHA recordables for
1Q 2018
Three facilities achieved ZERO OSHA recordables for
the year 2017
Continue to lead the industry by a wide margin
2.33
2.01
2.45
1.87
1.37
1.70 1.68
1.45 1.53 1.54
0.29 0.25 0.33 0.32 0.26 0.24 0.25
0.45 0.39 0.36
0.61
0.00
1.00
2.00
3.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q
2018
AISI AK Steel
OSHA Recordable Frequency is number of injuries per 200,000 employee hours
Notes: Based upon most current American Iron and Steel Institute (AISI) data available through 2017.
AK Steel data is through 03/31/18; 2015 and forward includes Dearborn Works.
OSHA Recordable Frequency
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 6
Strategic Progress
$680 million of debt refinanced and maturities extended
Lowered annual cash interest cost by ~$20 million
Enhanced and lowered cost of revolving credit facility
Strengthened
Capital
Structure
Major investment completed at Middletown Works hot-end
New tanks installed on Middletown Works electrogalvanizing line
Mansfield melt shop upgrade and new technology at caster
Enhanced
Core Business
Launched new NEXMET™ AHSS coated products; various customer trials underway
Collaboration with the DOE to develop more efficient electrical steel for motors
Acquired Precision Partners – tool design and build / hot stamping / cold stamping
Expanded
Growth
Platform
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
0
1,000
2,000
3,000
4,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
Annualized
0
30
60
90
120
2012 2013 2014 2015 2016 2017 2018
Annualized
0%
6%
12%
18%
24%
30%
2010 2011 2012 2013 2014 2015 2016 2017 2018
YTD
April 2018 7
Trade Update
Source: U.S. Dept. of Commerce, Enforcement, and Compliance
(000s Metric Tons)
Imports remain elevated
Strongly support the President’s decision to implement
tariffs under Section 232
Dramatic increase in electrical steel imports, which
continue to impact market
Critical that downstream electrical steel products be
adequately addressed
Steel Imports - % of U.S. Consumption
Grain Oriented Electrical Steel ImportsCarbon Coated Imports
(000s Metric Tons)
Source: American Iron and Steel Institute (AISI)
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
$2,210 $2,314
$2,446 $2,570
$2,686
2016 2017 2018E 2019E 2020E
17.8 17.1 17.2 17.3 17.5
2016 2017 2018E 2019E 2020E
April 2018 8
Steel Market Update
1.18 1.21
1.29
1.35
1.40
2016 2017 2018E 2019E 2020E
(Vehicles in Millions)
($ Billions)(Millions)
Overall economic conditions remain solid
Automotive market remains healthy
Spot market steel prices have increased
Service center inventories are well controlled
North America Light Vehicle Production
U.S. Housing Starts U.S. Non-Residential Construction Fixed Investment
Source: AK Steel estimates
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Kirk Reich
President and Chief Operating Officer
April 2018
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 10
Downstream Expansion Offers Higher Margin Growth Opportunity
Creates a premier integrated supplier to the automotive market
Enhances our product offerings
Leverages research and innovation capabilities
Strengthens our position in the value chain
Accelerates introduction of lightweighting solutions
Robust pipeline of downstream opportunities
Transforming AK Steel into an innovative steel solutions provider
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 11
Operations Update
Steel operations recovered from Middletown
unplanned outage
‒ ~$27 million impact included in 1Q 2018 results
Precision Partners operational improvements and
collaborations progressing as expected
AK Tube 2018 shipments expected to increase ~14%
year over year
AK Tube Annual Shipments
Precision Partners Utilization Levels Precision Partners Press & Weld Efficiency
115 115 122
139
0
50
100
150
2015 2016 2017 2018 Fcst
(Net Tons in 000s)
45%
25%
77%
98%
0%
20%
40%
60%
80%
100%
120%
Hot-Stamping Cells 3,000 Ton Press
2017
2018E
52%
71%
82%
86%
40%
50%
60%
70%
80%
90%
100%
2Q 2017 3Q 2017 4Q 2017 1Q 2018
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 12
Commercial Update
Successful 2Q contract negotiations
‒ Increased pricing
‒ Favorable sourcing on new automotive platforms
Continued progress on advanced high strength steels
Strong spot market conditions
Downstream collaborations gaining momentum
AK Steel Advanced High Strength Steel (AHSS)
Precision Partners Sales Opportunities AK Tube Advanced High Strength Steel (AHSS)
2017 2018 Fcst
(Net Tons Shipped)
2017 2018 Fcst
(Net Tons Shipped)
$0
$300
$600
$900
$1,200
2018E 2019E 2020E 2021E 2022E
($ Millions)
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
AK Steel is Recognized as an Outstanding Steel Supplier
13April 2018
Over the past year, AK Steel has received two prestigious awards from our customers:
Just two weeks ago, AK Steel was named a GM Supplier of the Year for 2017
− The award recognizes quality, execution, innovation and total enterprise cost
− AK Steel was the only North American steel company honored
AK Steel received FCA US’s “Raw Material Supplier of the Year” award in 2017
− The award honors companies that not only provide “the best ideas and cutting-edge technologies,
but also consistently exceed expectations.”
− AK Steel was the only steelmaker recognized
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Jaime Vasquez
Vice President – Finance and Chief Financial Officer
April 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 15
Financial Highlights
Note: See Appendix for reconciliations of non-GAAP financial measures
($ Millions, except per share)
1Q 2017 4Q 2017 1Q 2018
Quarter Over
Quarter % Change
Flat-Rolled Shipments 1,456 1,337 1,431 94 7%
Flat-Rolled Average Selling Price $1,005 $1,024 $1,045 $21 2%
Net Sales $1,533.4 $1,495.6 $1,658.9 $163.3 11%
Net Income (Loss) $84.4 ($80.4) $28.7 $109.1 NC
Adjusted Net Income (Loss) $84.4 ($28.4) $28.7 $57.1 NC
Adjusted EBITDA $178.2 $67.4 $118.7 $51.3 76%
Adjusted EBITDA Margin 11.6% 4.5% 7.2% 2.7 points 60%
Earnings (Loss) Per Share $0.26 ($0.26) $0.09 $0.35 NC
Adjusted EPS $0.26 ($0.09) $0.09 $0.18 NC
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
16
$0
$20
$40
$60
$80
$100
$120
$140
2017 4Q Actual Price/Mix/Volume Raw Materials &
Energy
Mark-to-Market
Hedges
Operations & Other Outages 2018 1Q Actual
Consolidated EBITDA Bridge – 4Q 2017 to 1Q 2018
$18 $16
$119
$67
$42
$43
($ Millions)
Note: See Appendix for reconciliations of non-GAAP financial measures
April 2018
$31
$16
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 17
Balance Sheet and Cash Flow Highlights
$1,281 $1,225
$1,135
$934 $909
$0
$500
$1,000
$1,500
2014 2015 2016 2017 1Q 2018
($ Millions)
Maintain focus on strengthening balance sheet
Roughly one-third of capital investments in 2018 targeted
for margin improvement
Legacy liabilities decreased ~$372 million since 2014
Changed inventory valuation methodology from LIFO to
Average Cost
$81
$99
$128
$153 $160
$0
$50
$100
$150
$200
2014 2015 2016 2017 2018E
($ Millions)
$197
$24
$0
$44 $50 $35
$10
$0
$50
$100
$150
$200
$250
2014 2015 2016 2017 2018E 2019E 2020E
($ Millions)
Pension / OPEB Liabilities
Capital Investments Pension Contributions
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
$1,040 $1,021 $1,024 $1,045
$0
$300
$600
$900
$1,200
2Q 2017 3Q 2017 4Q 2017 1Q 2018
April 2018 18
2Q 2018 Guidance
* Guidance is relative to 1Q 2018 actual results
1,434 1,369 1,337
1,431
0
250
500
750
1,000
1,250
1,500
2Q 2017 3Q 2017 4Q 2017 1Q 2018
10.7%
7.7%
4.5%
7.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2Q 2017 3Q 2017 4Q 2017 1Q 2018
(000s tons)
Second quarter 2018 estimated outlook
– Flat-rolled shipments ~5-7% higher*
– Average flat-rolled selling price ~$1,075 per ton
– Downstream revenue ~$130–150 million
– Planned maintenance outages ~$20-25 million
– Adjusted EBITDA margin ~150-200 basis points higher*
Flat-Rolled Shipments
Flat-Rolled Average Selling Price Per Ton Adjusted EBITDA Margin
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 19
2018 Full Year Guidance Estimates
Capital investments ~$160 million
Planned maintenance outages ~$50 million
Depreciation ~$220 million
Pension and OPEB income ~$32 million*
Minimal cash and book taxes
Working capital expected to be roughly flat for the year
* Includes ~$8 million expense reported in Cost of Products Sold/Selling and Administrative expenses
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Roger Newport
Chief Executive Officer
April 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
21
Strategic Progress
Optimize Assets
Lower Debt
Innovation
- People
- Carbon AHSS
- Electrical
- Stainless
Organic /
Geographic
Growth
- Acquired Dearborn
- AK Tube Mexico
Transformational
Growth
- PPHC Acquisition
Creating Shareholder Value
April 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018
THANK YOU!
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Appendix
April 2018
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© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
Investor Contact
April 2018 24
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
© 2 0 1 8 A K S t e e l . A l l r i g h t s r e s e r v e d .
April 2018 25
Strengthening Our Foundation
Began Portfolio
Optimization
Acquired
Dearborn
Idled Ashland
Hot-end
Operations
2014 2015 2016 2017
Completed Major
Hot-end Operations
Investments
Strengthened
Capital
Structure
Completed
Dearborn AHSS
Investment
Lowered
Interest Costs
Launched New
NEXMET™ AHSS
Products
Opened New
Research and
Innovation Center
Acquired
Precision Partners
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26
Longer Term Target Metrics
April 2018
Average EBITDA Margin
through a business cycle
>8%
Debt-to-EBITDA
<4.0x
Economic Profit:
Return on Invested Capital
>10.5%
EBITDA Contributions from
Downstream Business
>30%
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April 2018 27
High-Value Product Mix With More Predictable Pricing
Flat-Rolled Product Mix Customer Contract Structure
2017
2015
2017
Coated
48%
Cold-rolled
18%
Other
3%
Stainless/
Electrical
13%
Hot-rolled
18%
2015
Coated
53%
Cold-rolled
17%
Other
2%
Stainless/
Electrical
15%
Hot-rolled
13%
Fixed Base
Price Contracts
~62%Steel Index
Based Contracts
~19%
Spot Market
~19%
Fixed Base
Price Contracts
~70%Steel Index
Based Contracts
~16%
Spot Market
~14%
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April 2018 28
Significantly Improved Debt Profile
December 31, 2015
$550
$150
$530
$406
$290
$7
$62
$30
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Credit Facility Senior Notes Senior Secured Notes Industrial Revenue Bonds
Total Debt: $2.40 billion
$700
$537
March 31, 2018
$150
$7
$406
$440
$380
$62
$280
$400
$30
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Total Debt: $2.16 billion
$150
$380
($ Millions)
Note: Excludes unamortized debt discount and issuance costs
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April 2018 29
Non-GAAP Financial Measures
Reconciliation of Adjusted Net Income
Qtr ended
($ Millions) 2013 2014 2015 2016 2017 03/31/2018
Reconciliation to Net Income (Loss) Attributable to AK Steel Holding Corporation
Net income (loss) attributable to AK Steel Holding Corporation, as reported ($60.2) ($114.2) ($652.3) ($16.8) $103.5 $28.7
Pension and OPEB net corridor and settlement charges 5.5 131.2 68.1
Charges (credit) for termination of pellet agreement and related transportation costs 69.5 (19.3)
Impairment of Magnetation investment 256.3
Impairment of AFSG investment 41.6
Charge for facility idling 28.1
Asset impairment charge 75.6
Non-cash credit for U.S. tax legislation (4.3)
Acquisition-related expenses (net of tax) 31.7
Adjusted net income (loss) attributable to AK Steel Holding ($60.2) ($77.0) ($195.1) $120.8 $155.5 $28.7
Reconciliation to Diluted Earnings (Losses) per Share
Diluted earnings (loss) per share, as reported ($0.44) ($0.77) ($3.67) ($0.07) $0.32 $0.09
Pension and OPEB net corridor charge/settlement loss 0.04 0.74 0.29
Charges (credit) for termination of pellet agreement and related transportation costs 0.30 (0.06)
Impairment of Magnetation investment 1.44
Impairment of AFSG investment 0.23
Charge for facility idling 0.16
Asset impairment charge 0.24
Non-cash credit for U.S. tax legislation (0.01)
Acquisition-related expenses 0.21
Adjusted diluted earnings (loss) per share ($0.44) ($0.52) ($1.10) $0.52 $0.49 $0.09
Flat-rolled Shipments 5,153.7 6,007.2 6,974.0 5,936.4 5,596.2 1,430.9
Flat-rolled Average Selling Price $1,056 $1,058 $929 $955 $1,022 $1,045
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April 2018 30
Non-GAAP Financial Measures
Reconciliation of Adjusted EBITDA
Qtr ended
($ Millions) 2013 2014 2015 2016 2017 03/31/2018
Net income (loss) attributable to AK Steel Holding ($60.2) ($114.2) ($652.3) ($16.8) $103.5 $28.7
Net income (loss) attributable to NCI 64.2 62.8 62.8 66.0 61.4 16.1
Income tax expense (benefit) (42.3) 0.3 (6.3) (16.9) (2.2) (4.9)
Interest expense 127.4 144.7 173.0 163.9 152.3 37.6
Interest income (1.1) (0.7) (1.3) (1.6) (1.5) (0.2)
Depreciation and amortization 200.0 211.0 224.4 221.4 236.4 61.3
EBITDA $288.0 $303.9 ($199.7) $416.0 $549.9 $138.6
Less: EBITDA of NCI (a) 78.3 77.2 77.1 80.8 77.7 19.9
Pension and OPEB net corridor charges / settlement loss 5.5 131.2 68.1
Charges (credit) for termination of pellet agreement and related
transportation costs 69.5 (19.3)
Impairment of Magnetation investment 256.3
Impairment of AFSG investment 41.6
Charge for facility idling 28.1
Asset impairment charge 75.6
Acquisition-related expenses 23.3
Adjusted EBITDA $209.7 $255.5 $180.4 $472.8 $528.5 $118.7
Adjusted EBITDA margin 3.8% 3.9% 2.7% 8.0% 8.7% 7.2%
(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 $64.2 $62.8 $62.8 $66.0 $61.4 $16.1
Depreciation 14.1 14.4 14.3 14.8 16.3 3.8
EBITDA of noncontrolling interests $78.3 $77.2 $77.1 $80.8 $77.7 $19.9
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April 2018