The Future of Steel Is NOW
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The Future of Steel is NOW AK Steel’s New Research and Innovation Center ANNUAL REPORT AND FORM 10-K 2016 2016 AK STEEL ANNUAL REPORT AND FORM 10-K This also resulted in nearlyyg doubling our liquidityqy and cash position p from $0.7 billion at the end of 2015 to $1.35 billion at the end of 2016. Roger K. Newport In addition, we completed the Chief Executive Officer refinancing of $380 million of our senior secured notes, which lowered our cash interest costs and extended our debt maturityyp profile. And, we were able to de-risk our balance sheet byy transferring A Message from Roger K. Newport about $210 million of pension assets 2016 was an exciting year for AK and liabilities to a third party insurance Steel, as we made substantial progress in company.py These actions will reduce executing our long-term strategy. our exposure to volatility in the financial Our results duringgy the year markets that can impact our pension demonstrated the success of the entire investment position.p AK Steel team in executinggg our strategy All of these transactions resulted in and implementingpg one of our guiding g a stronger balance sheet and an principles of: “We Can and We imppproved capital structure. This also Will” control items within our control. enhances our financial flexibility, which Throughoutgy the year,y we continued to will allow us to continue to execute our enhance the financial strengthg of our long-term strategy. AK Steel’s Zanesville Works and Coshocton Works company through improved profitability were recognized for outstanding safety performance. and various capital market transactions. Trade Action Progress We also made greatg strides in research After extensive investigations,g the ppproud of our performance which shows and innovation to further strengthen Department of Commerce and the that all of our employeespy continue to take our foundation. International Trade Commission safety seriously each and every day. announced positivep final determinations AK Steel remains an industry leader Strengthening Financial Position in the carbon steel trade cases for hot- in safety results, with a safety record in Our financial results reflected our rolled, cold-rolled and corrosion-resistant 2016 that was 4.3 times better than strategy to reduce our exposure to products.p In addition, in March 2017, the industry average. In addition to our commodityyp products. As a result, a very y these agencies made final positive longggygstanding industry-leading results, difficult decision was announced in late determinations in our trade case covering we were still able to improvep our safety 2015 to temporarilypyp idle our Ashland stainless steel products. Anti-dumping performance by 16% over the levels Works blast furnace and melt shop and countervailingg duties were assessed achieved in 2015. operations. This enabled us to make against foreign producers engaging in Eightg of our facilities—Ashland, Butler, importantppg progress to enhance our sales illegal trade practices. Coshocton, Mansfield, Rockport and portfolio and operations.p While this was ggpgood progress, we Zanesville Works, AK Tube and AK The actions of our team generated were disappointed that our appeal of Coal—had zero OSHA recordable improved results and a stronger the 2013 Grain Oriented Electrical Steel cases duringgq the fourth quarter. And AK Steel. Our work to optimizep our trade case was denied in November for all of December, our 8,500 footprint, relentlessly focus on costs, and 2016. We are evaluating the best employees worked with zero OSHA reduce exposure to commodity spot action forward to ensure fair trade of recordable events. markets ggpgenerated improved margins. these products. Zanesville Works and Coshocton This, alonggp with the successful completion The carbon steel and stainless steel Works were recognizedg in 2016 for of several capitalp market transactions, rulings have helped level the playing field outstandinggyp safety performance by y the allowed us to significantly strengthen our and counteract injury being caused by Ohio Bureau of Workers Compensation.p balance sheet. These actions position us dumped and subsidized imports. We will Both sites earned the 100% Award for well for the future. continue to monitor and vigilantly address Safety for operating the entire year of As a result, for the full-yeary 2016, our circumstances that arise when imports 2015 without any lost-time injuries revenues were approximatelypp y $5.88 are dumped here in the U.S. In addition, or illnesses. billion on shipments of about 6.05 we will work with the administration Dearborn Works was recognized in million tons, resultingg in an average to identifyyg long-term solutions to 2016 byy the American Metal Market’s selling price of $969 per ton. address unfair trade and global steel Awards for Steel Excellence for I am pleasedppg with the progress we overcapacity, which is driven primarily “Best Operationalpp Improvement” made in strengtheninggg the financial by China. for safety, quality, reliability and position of our company. We successfully environmental progress. executed two capitalp market transactions Safety and Social Responsibility From an environmental standpoint, which resulted in $600 million in cash Safetyyy is and always will be the 2016 was also an excellent year. The proceeds that were utilized to lower foundation of all that we do. We are company set multiple annual water our debt levels and cash interest costs. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K È Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2016 OR ‘ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to Commission File No. 1-13696 AK STEEL HOLDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 31-1401455 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 9227 Centre Pointe Drive, West Chester, Ohio 45069 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (513) 425-5000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock $0.01 Par Value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ‘ No È Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes È No ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. È Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Yes ‘ No È Aggregate market value of the registrant’s voting stock held by non-affiliates at June 30, 2016: $1,102,982,730 There were 314,789,404 shares of common stock outstanding as of February 15, 2017. DOCUMENTS INCORPORATED BY REFERENCE The information required to be furnished pursuant to Part III of this Form 10-K will be set forth in, and incorporated by reference from, the registrant’s definitive proxy statement for the annual meeting of stockholders (the “2017 Proxy Statement”), which will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2016. AK Steel Holding Corporation Table of Contents Page PART I Item 1. Business .............................................................................. 1 Item 1A. Risk Factors ........................................................................... 6 Item 1B. Unresolved Staff Comments .............................................................. 12 Item 2. Properties ............................................................................. 12 Item 3. Legal Proceedings ...................................................................... 13 Item 4. Mine Safety Disclosures ................................................................. 13 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................