Supplemental Guarantor Information

AK Steel has outstanding $550.0 aggregate principal amount of 2020 Notes and $300.0 aggregate principal amount of 2022 Notes (collectively, the “Senior Notes”). The Senior Notes are governed by indentures entered into by AK Holding and its wholly-owned subsidiary, AK Steel. Under the terms of the indentures, AK Holding fully and unconditionally, jointly and severally, guarantees the payment of interest, principal and premium, if any, on the Senior Notes. AK Holding is the sole guarantor of the Senior Notes. The 2022 Notes were issued under a supplemental indenture, which includes covenants and restrictions substantially similar to the existing indentures governing the 2020 Notes and are equal in right of payment to the 2020 Notes.

The presentation of the supplemental guarantor information reflects all investments in subsidiaries under the equity method of accounting. Net income (loss) of the subsidiaries accounted for under the equity method is therefore reflected in their parents’ investment accounts. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions. Certain reclassifications of prior-year amounts have been made to conform to the current year presentation. The following supplemental condensed consolidating financial statements present information about AK Holding, AK Steel and the other non-guarantor subsidiaries.



Condensed Statements of Operations
Three Months Ended September 30, 2012

	AK Holding			AK Steel			Other		Eliminations			Consolidated Company
Net sales	$	—		$	1,409.2		$	224.8	$	(170.5	)	$	1,463.5
Cost of products sold (exclusive of items shown below)	—			1,365.9			182.8		(163.7		)	1,385.0
Selling and administrative expenses (exclusive of items shown below)	0.9			52.5			9.4		(10.9		)	51.9
Depreciation	—			43.3			4.9		—			48.2
Pension and OPEB expense (income)	—			(9.6		)	—		—			(9.6		)
Total operating costs	0.9			1,452.1			197.1		(174.6		)	1,475.5
Operating profit (loss)	(0.9		)	(42.9		)	27.7		4.1			(12.0		)
Interest expense	—			22.2			0.2		—			22.4
Other income (expense)	—			(2.1		)	7.8		—			5.7
Income (loss) before income taxes	(0.9		)	(67.2		)	35.3		4.1			(28.7		)
Income tax provision (benefit)	—			8.5			13.6		1.7			23.8
Equity in net income (loss) of subsidiaries	(60.0		)	15.7			—		44.3			—
Net income (loss)	(60.9		)	(60.0		)	21.7		46.7			(52.5		)
Less: net income (loss) attributable to noncontrolling interests	—			—			8.4		—			8.4
Net income (loss) attributable to AK Steel Holding Corporation	$	(60.9	)	$	(60.0	)	$	13.3	$	46.7		$	(60.9	)
Comprehensive income (loss)	$	(69.1	)	$	(68.2	)	$	22.4	$	54.2		$	(60.7	)



Condensed Statements of Operations
Three Months Ended September 30, 2011

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
Net sales	$	—		$	1,529.1		$	193.0		$	(136.3	)	$	1,585.8
Cost of products sold (exclusive of items shown below)	—			1,443.6			161.3			(122.3		)	1,482.6
Selling and administrative expenses (exclusive of items shown below)	1.0			54.1			11.2			(11.7		)	54.6
Depreciation	—			44.5			1.6			—			46.1
Pension and OPEB expense (income)	—			(8.9		)	—			—			(8.9		)
Total operating costs	1.0			1,533.3			174.1			(134.0		)	1,574.4
Operating profit (loss)	(1.0		)	(4.2		)	18.9			(2.3		)	11.4
Interest expense	—			13.5			—			—			13.5
Other income (expense)	—			(2.3		)	(1.4		)	(1.0		)	(4.7		)
Income (loss) before income taxes	(1.0		)	(20.0		)	17.5			(3.3		)	(6.8		)
Income tax provision (benefit)	(0.5		)	(6.9		)	7.9			(1.2		)	(0.7		)
Equity in net income (loss) of subsidiaries	(3.0		)	10.1			—			(7.1		)	—
Net income (loss)	(3.5		)	(3.0		)	9.6			(9.2		)	(6.1		)
Less: net income (loss) attributable to noncontrolling interests	—			—			(2.6		)	—			(2.6		)
Net income (loss) attributable to AK Steel Holding Corporation	$	(3.5	)	$	(3.0	)	$	12.2		$	(9.2	)	$	(3.5	)
Comprehensive income (loss)	$	(18.4	)	$	(17.9	)	$	8.1		$	7.2		$	(21.0	)



Condensed Statements of Operations
Nine Months Ended September 30, 2012

	AK Holding			AK Steel			Other		Eliminations			Consolidated Company
Net sales	$	—		$	4,319.0		$	705.4	$	(513.8	)	$	4,510.6
Cost of products sold (exclusive of items shown below)	—			4,095.7			578.5		(487.8		)	4,186.4
Selling and administrative expenses (exclusive of items shown below)	3.6			161.7			26.8		(33.6		)	158.5
Depreciation	—			130.6			14.3		—			144.9
Pension and OPEB expense (income)	—			(28.0		)	—		—			(28.0		)
Total operating costs	3.6			4,360.0			619.6		(521.4		)	4,461.8
Operating profit (loss)	(3.6		)	(41.0		)	85.8		7.6			48.8
Interest expense	—			59.8			0.6		—			60.4
Other income (expense)	—			(7.4		)	9.3		—			1.9
Income (loss) before income taxes	(3.6		)	(108.2		)	94.5		7.6			(9.7		)
Income tax provision (benefit)	—			727.6			36.6		3.1			767.3
Equity in net income (loss) of subsidiaries	(793.3		)	42.5			—		750.8			—
Net income (loss)	(796.9		)	(793.3		)	57.9		755.3			(777.0		)
Less: net income (loss) attributable to noncontrolling interests	—			—			19.9		—			19.9
Net income (loss) attributable to AK Steel Holding Corporation	$	(796.9	)	$	(793.3	)	$	38.0	$	755.3		$	(796.9	)
Comprehensive income (loss)	$	(821.8	)	$	(818.2	)	$	58.2	$	779.9		$	(801.9	)



Condensed Statements of Operations
Nine Months Ended September 30, 2011

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
Net sales	$	—		$	4,756.0		$	569.0		$	(366.2	)	$	4,958.8
Cost of products sold (exclusive of items shown below)	—			4,441.5			475.9			(332.2		)	4,585.2
Selling and administrative expenses (exclusive of items shown below)	3.6			168.3			26.6			(36.9		)	161.6
Depreciation	—			134.6			4.7			—			139.3
Pension and OPEB expense (income)	—			(26.7		)	—			—			(26.7		)
Total operating costs	3.6			4,717.7			507.2			(369.1		)	4,859.4
Operating profit (loss)	(3.6		)	38.3			61.8			2.9			99.4
Interest expense	—			33.7			—			—			33.7
Other income (expense)	—			(5.7		)	6.4			(2.0		)	(1.3		)
Income (loss) before income taxes	(3.6		)	(1.1		)	68.2			0.9			64.4
Income tax provision (benefit)	(1.4		)	3.5			27.2			0.3			29.6
Equity in net income (loss) of subsidiaries	40.5			45.1			—			(85.6		)	—
Net income (loss)	38.3			40.5			41.0			(85.0		)	34.8
Less: net income (loss) attributable to noncontrolling interests	—			—			(3.5		)	—			(3.5		)
Net income (loss) attributable to AK Steel Holding Corporation	$	38.3		$	40.5		$	44.5		$	(85.0	)	$	38.3
Comprehensive income (loss)	$	(9.8	)	$	(7.6	)	$	41.0		$	(36.9	)	$	(13.3	)



Condensed Balance Sheets
September 30, 2012

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	27.3		$	19.8		$	—		$	47.1
Accounts receivable, net	—			579.8			91.9			(106.1		)	565.6
Inventory, net	—			611.5			125.4			(9.1		)	727.8
Deferred tax assets, current	—			32.4			0.3			—			32.7
Other current assets	0.2			30.2			3.3			—			33.7
Total current assets	0.2			1,281.2			240.7			(115.2		)	1,406.9
Property, plant and equipment	—			5,402.2			582.3			—			5,984.5
Accumulated depreciation	—			(3,857.5		)	(85.0		)	—			(3,942.5		)
Property, plant and equipment, net	—			1,544.7			497.3			—			2,042.0
Other non-current assets:
Investment in AFSG Holdings, Inc.	—			—			55.6			—			55.6
Investment in Magnetation LLC	—			—			129.6			—			129.6
Investment in affiliates	(2,454.5		)	2,454.5			1,243.2			(1,243.2		)	—
Inter-company accounts	2,019.8			(4,069.0		)	(416.5		)	2,465.7			—
Goodwill	—			—			37.1			—			37.1
Deferred tax assets, non-current	—			146.4			0.2			—			146.6
Other non-current assets	—			65.7			37.2			—			102.9
TOTAL ASSETS	$	(434.5	)	$	1,423.5		$	1,824.4		$	1,107.3		$	3,920.7
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Short-term borrowings under credit facility	$	—		$	42.0		$	—		$	—		$	42.0
Accounts payable	—			583.7			43.4			(23.9		)	603.2
Accrued liabilities	—			175.0			10.6			—			185.6
Current portion of long-term debt	—			0.7			—			—			0.7
Current portion of pension and other postretirement benefit obligations	—			125.0			0.4			—			125.4
Total current liabilities	—			926.4			54.4			(23.9		)	956.9
Non-current liabilities:
Long-term debt	—			1,349.5			—			—			1,349.5
Pension and other postretirement benefit obligations	—			1,499.5			3.9			—			1,503.4
Other non-current liabilities	—			102.6			422.2			—			524.8
Total non-current liabilities	—			2,951.6			426.1			—			3,377.7
TOTAL LIABILITIES	—			3,878.0			480.5			(23.9		)	4,334.6
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	(434.5		)	(2,454.5		)	1,323.3			1,131.2			(434.5		)
Noncontrolling interests	—			—			20.6			—			20.6
TOTAL EQUITY (DEFICIT)	(434.5		)	(2,454.5		)	1,343.9			1,131.2			(413.9		)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	(434.5	)	$	1,423.5		$	1,824.4		$	1,107.3		$	3,920.7



Condensed Balance Sheets
December 31, 2011

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	19.9		$	22.1		$	—		$	42.0
Accounts receivable, net	—			587.5			69.8			(93.1		)	564.2
Inventory, net	—			304.6			122.1			(8.0		)	418.7
Deferred tax assets, current	—			216.3			0.2			—			216.5
Other current assets	0.2			31.9			0.9			—			33.0
Total current assets	0.2			1,160.2			215.1			(101.1		)	1,274.4
Property, plant and equipment	—			5,377.2			590.0			—			5,967.2
Accumulated depreciation	—			(3,726.9		)	(70.1		)	—			(3,797.0		)
Property, plant and equipment, net	—			1,650.3			519.9			—			2,170.2
Other non-current assets:
Investment in AFSG Holdings, Inc.	—			—			55.6			—			55.6
Investment in Magnetation LLC	—			—			101.2			—			101.2
Investment in affiliates	(1,589.1		)	1,589.1			1,204.3			(1,204.3		)	—
Inter-company accounts	1,977.4			(3,207.3		)	(401.7		)	1,631.6			—
Goodwill	—			—			37.1			—			37.1
Deferred tax assets, non-current	—			716.3			0.2			—			716.5
Other non-current assets	—			64.4			30.5			—			94.9
TOTAL ASSETS	$	388.5		$	1,973.0		$	1,762.2		$	326.2		$	4,449.9
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Borrowings under credit facility	$	—		$	250.0		$	—		$	—		$	250.0
Accounts payable	—			525.4			59.4			(1.2		)	583.6
Accrued liabilities	—			162.3			10.5			—			172.8
Current portion of long-term debt	—			0.7			—			—			0.7
Current portion of pension and other postretirement benefit obligations	—			129.6			0.4			—			130.0
Total current liabilities	—			1,068.0			70.3			(1.2		)	1,137.1
Non-current liabilities:
Long-term debt	—			650.0			—			—			650.0
Pension and other postretirement benefit obligations	—			1,740.7			4.1			—			1,744.8
Other non-current liabilities	—			103.4			437.4			—			540.8
Total non-current liabilities	—			2,494.1			441.5			—			2,935.6
TOTAL LIABILITIES	—			3,562.1			511.8			(1.2		)	4,072.7
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	388.5			(1,589.1		)	1,261.7			327.4			388.5
Noncontrolling interests	—			—			(11.3		)	—			(11.3		)
TOTAL EQUITY (DEFICIT)	388.5			(1,589.1		)	1,250.4			327.4			377.2
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	388.5		$	1,973.0		$	1,762.2		$	326.2		$	4,449.9



Condensed Statements of Cash Flows
Nine Months Ended September 30, 2012

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
Net cash flows from operating activities	$	(2.9	)	$	(431.6	)	$	50.7		$	(4.1	)	$	(387.9	)
Cash flows from investing activities:
Capital investments	—			(29.7		)	(19.6		)	—			(49.3		)
Investments in acquired businesses	—			—			(38.1		)	—			(38.1		)
Other investing items, net	—			5.3			(0.7		)	—			4.6
Net cash flows from investing activities	—			(24.4		)	(58.4		)	—			(82.8		)
Cash flows from financing activities:
Net borrowings under credit facility	—			192.0			—			—			192.0
Proceeds from issuance of long-term debt	—			373.3			—			—			373.3
Redemption of long-term debt	—			(73.9		)	—			—			(73.9		)
Debt issuance costs	—			(8.6		)	—			—			(8.6		)
Purchase of treasury stock	(1.7		)	—			—			—			(1.7		)
Common stock dividends paid	(11.0		)	—			—			—			(11.0		)
Inter-company activity	15.6			(19.2		)	(0.5		)	4.1			—
SunCoke Middletown advances from noncontrolling interest owner	—			—			5.5			—			5.5
Other financing items, net	—			(0.2		)	0.4			—			0.2
Net cash flows from financing activities	2.9			463.4			5.4			4.1			475.8
Net increase (decrease) in cash and cash equivalents	—			7.4			(2.3		)	—			5.1
Cash and equivalents, beginning of period	—			19.9			22.1			—			42.0
Cash and equivalents, end of period	$	—		$	27.3		$	19.8		$	—		$	47.1



Condensed Statements of Cash Flows
Nine Months Ended September 30, 2011

	AK Holding			AK Steel			Other			Eliminations			Consolidated Company
Net cash flows from operating activities	$	(1.5	)	$	(366.7	)	$	11.1		$	1.7		$	(355.4	)
Cash flows from investing activities:
Capital investments	—			(87.8		)	(163.4		)	—			(251.2		)
Other investing items, net	—			1.5			(0.8		)	—			0.7
Net cash flows from investing activities	—			(86.3		)	(164.2		)	—			(250.5		)
Cash flows from financing activities:
Net borrowings under credit facility	—			295.0			—			—			295.0
Redemption of long-term debt	—			(0.5		)	—			—			(0.5		)
Debt issuance costs	—			(9.2		)	—			—			(9.2		)
Proceeds from exercise of stock options	0.2			—			—			—			0.2
Purchase of treasury stock	(1.4		)	—			—			—			(1.4		)
Common stock dividends paid	(16.5		)	—			—			—			(16.5		)
Inter-company activity	19.2			1.7			(19.2		)	(1.7		)	—
SunCoke Middletown advances from noncontrolling interest owner	—			—			180.3			—			180.3
Other financing items, net	—			(0.1		)	—			—			(0.1		)
Net cash flows from financing activities	1.5			286.9			161.1			(1.7		)	447.8
Net increase (decrease) in cash and cash equivalents	—			(166.1		)	8.0			—			(158.1		)
Cash and equivalents, beginning of period	—			201.4			15.4			—			216.8
Cash and equivalents, end of period	$	—		$	35.3		$	23.4		$	—		$	58.7