Supplemental Guarantor Information

AK Steel’s 8.75% Senior Secured Notes due December 2018, 7.625% Senior Notes due May 2020, 7.625% Senior Notes due October 2021, 8.375% Senior Notes due April 2022 (collectively, the “Senior Notes”) and 5.00% Exchangeable Senior Notes due November 2019 (the “Exchangeable Notes”) are governed by indentures entered into by AK Holding and its 100%-owned subsidiary, AK Steel.

Under the terms of the Senior Notes indentures, AK Holding and two guarantor subsidiaries each fully and unconditionally, jointly and severally, guarantee the payment of interest, principal and premium, if any, on each of the notes comprising the Senior Notes. With respect to the Exchangeable Notes, under the terms of that indenture AK Holding fully and unconditionally, jointly and severally, guarantees the payment of interest, principal and premium, if any, on such notes. AK Holding is the sole guarantor of the Exchangeable 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. The following supplemental condensed consolidating financial statements present information about AK Holding, AK Steel, the guarantor subsidiaries of the Senior Notes and the other non-guarantor subsidiaries.



Condensed Consolidated Statements of Comprehensive Income (Loss)
Three Months Ended June 30, 2015

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes		Other Non-Guarantor Subsidiaries		Eliminations			Consolidated Company
Net sales	$	—		$	1,639.3		$	65.0	$	136.1	$	(151.0	)	$	1,689.4
Cost of products sold (exclusive of items shown separately below)	—			1,556.2			42.2		108.7		(127.9		)	1,579.2
Selling and administrative expenses (exclusive of items shown separately below)	1.4			65.4			2.7		6.5		(12.5		)	63.5
Depreciation	—			48.5			1.0		6.2		—			55.7
Pension and OPEB expense (income)	—			(16.1		)	—		—		—			(16.1		)
Total operating costs	1.4			1,654.0			45.9		121.4		(140.4		)	1,682.3
Operating profit (loss)	(1.4		)	(14.7		)	19.1		14.7		(10.6		)	7.1
Interest expense	—			43.0			—		0.5		—			43.5
Other income (expense)	—			(1.6		)	1.6		1.5		—			1.5
Income (loss) before income taxes	(1.4		)	(59.3		)	20.7		15.7		(10.6		)	(34.9		)
Income tax expense (benefit)	—			10.3			8.2		0.5		(4.4		)	14.6
Equity in net income (loss) of subsidiaries	(62.6		)	7.0			—		—		55.6			—
Net income (loss)	(64.0		)	(62.6		)	12.5		15.2		49.4			(49.5		)
Less: Net income attributable to noncontrolling interests	—			—			—		14.5		—			14.5
Net income (loss) attributable to AK Steel Holding Corporation	(64.0		)	(62.6		)	12.5		0.7		49.4			(64.0		)
Other comprehensive income (loss)	2.2			2.2			—		1.2		(3.4		)	2.2
Comprehensive income (loss) attributable to AK Steel Holding Corporation	$	(61.8	)	$	(60.4	)	$	12.5	$	1.9	$	46.0		$	(61.8	)



Condensed Consolidated Statements of Comprehensive Income (Loss)
Three Months Ended June 30, 2014

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes		Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
Net sales	$	—		$	1,483.1		$	72.3	$	133.2		$	(157.8	)	$	1,530.8
Cost of products sold (exclusive of items shown separately below)	—			1,404.1			51.9		105.3			(144.4		)	1,416.9
Selling and administrative expenses (exclusive of items shown separately below)	1.0			53.8			2.9		7.1			(10.9		)	53.9
Depreciation	—			42.3			1.0		5.2			—			48.5
Pension and OPEB expense (income)	—			(25.0		)	—		—			—			(25.0		)
Total operating costs	1.0			1,475.2			55.8		117.6			(155.3		)	1,494.3
Operating profit (loss)	(1.0		)	7.9			16.5		15.6			(2.5		)	36.5
Interest expense	—			32.5			—		0.7			—			33.2
Other income (expense)	—			(3.9		)	1.7		(0.8		)	—			(3.0		)
Income (loss) before income taxes	(1.0		)	(28.5		)	18.2		14.1			(2.5		)	0.3
Income tax expense (benefit)	—			(4.7		)	7.9		(0.4		)	(1.0		)	1.8
Equity in net income (loss) of subsidiaries	(16.1		)	7.7			—		—			8.4			—
Net income (loss)	(17.1		)	(16.1		)	10.3		14.5			6.9			(1.5		)
Less: Net income attributable to noncontrolling interests	—			—			—		15.6			—			15.6
Net income (loss) attributable to AK Steel Holding Corporation	(17.1		)	(16.1		)	10.3		(1.1		)	6.9			(17.1		)
Other comprehensive income (loss)	(27.2		)	(27.2		)	—		(0.1		)	27.3			(27.2		)
Comprehensive income (loss) attributable to AK Steel Holding Corporation	$	(44.3	)	$	(43.3	)	$	10.3	$	(1.2	)	$	34.2		$	(44.3	)




Condensed Consolidated Statements of Comprehensive Income (Loss)
Six Months Ended June 30, 2015

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes		Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
Net sales	$	—		$	3,341.8		$	130.8	$	260.5		$	(292.8	)	$	3,440.3
Cost of products sold (exclusive of items shown separately below)	—			3,165.6			87.0		203.8			(268.6		)	3,187.8
Selling and administrative expenses (exclusive of items shown separately below)	3.1			136.2			5.7		13.1			(25.4		)	132.7
Depreciation	—			96.9			2.0		12.2			—			111.1
Pension and OPEB expense (income)	—			(32.2		)	—		—			—			(32.2		)
Total operating costs	3.1			3,366.5			94.7		229.1			(294.0		)	3,399.4
Operating profit (loss)	(3.1		)	(24.7		)	36.1		31.4			1.2			40.9
Interest expense	—			86.4			—		1.0			—			87.4
Impairment of Magnetation investment	—			—			—		(256.3		)	—			(256.3		)
Other income (expense)	—			(4.2		)	3.2		(14.2		)	—			(15.2		)
Income (loss) before income taxes	(3.1		)	(115.3		)	39.3		(240.1		)	1.2			(318.0		)
Income tax expense (benefit)	—			11.8			15.7		(5.6		)	0.4			22.3
Equity in net income (loss) of subsidiaries	(367.2		)	(240.1		)	—		—			607.3			—
Net income (loss)	(370.3		)	(367.2		)	23.6		(234.5		)	608.1			(340.3		)
Less: Net income attributable to noncontrolling interests	—			—			—		30.0			—			30.0
Net income (loss) attributable to AK Steel Holding Corporation	(370.3		)	(367.2		)	23.6		(264.5		)	608.1			(370.3		)
Other comprehensive income (loss)	(8.0		)	(8.0		)	—		(2.0		)	10.0			(8.0		)
Comprehensive income (loss) attributable to AK Steel Holding Corporation	$	(378.3	)	$	(375.2	)	$	23.6	$	(266.5	)	$	618.1		$	(378.3	)




Condensed Consolidated Statements of Comprehensive Income (Loss)
Six Months Ended June 30, 2014

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes		Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
Net sales	$	—		$	2,798.2		$	140.1	$	258.0		$	(282.0	)	$	2,914.3
Cost of products sold (exclusive of items shown separately below)	—			2,708.0			101.5		204.6			(261.6		)	2,752.5
Selling and administrative expenses (exclusive of items shown separately below)	2.6			112.7			5.7		14.6			(21.5		)	114.1
Depreciation	—			84.8			2.0		10.4			—			97.2
Pension and OPEB expense (income)	—			(50.7		)	—		—			—			(50.7		)
Total operating costs	2.6			2,854.8			109.2		229.6			(283.1		)	2,913.1
Operating profit (loss)	(2.6		)	(56.6		)	30.9		28.4			1.1			1.2
Interest expense	—			64.2			—		1.2			—			65.4
Other income (expense)	—			(7.7		)	3.3		(0.5		)	—			(4.9		)
Income (loss) before income taxes	(2.6		)	(128.5		)	34.2		26.7			1.1			(69.1		)
Income tax expense (benefit)	—			(9.3		)	13.7		(1.2		)	0.4			3.6
Equity in net income (loss) of subsidiaries	(100.6		)	18.6			—		—			82.0			—
Net income (loss)	(103.2		)	(100.6		)	20.5		27.9			82.7			(72.7		)
Less: Net income attributable to noncontrolling interests	—			—			—		30.5			—			30.5
Net income (loss) attributable to AK Steel Holding Corporation	(103.2		)	(100.6		)	20.5		(2.6		)	82.7			(103.2		)
Other comprehensive income (loss)	(51.4		)	(51.4		)	—		(0.1		)	51.5			(51.4		)
Comprehensive income (loss) attributable to AK Steel Holding Corporation	$	(154.6	)	$	(152.0	)	$	20.5	$	(2.7	)	$	134.2		$	(154.6	)



Condensed Consolidated Balance Sheets
June 30, 2015

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes			Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	27.9		$	—		$	47.1		$	—		$	75.0
Accounts receivable, net	—			535.6			27.9			39.6			(35.6		)	567.5
Inventory, net	—			1,073.8			26.8			62.9			(7.0		)	1,156.5
Deferred tax assets, current	—			57.3			—			0.2			—			57.5
Other current assets	0.3			54.1			0.3			3.1			—			57.8
Total current assets	0.3			1,748.7			55.0			152.9			(42.6		)	1,914.3
Property, plant and equipment	—			5,721.7			99.3			598.1			—			6,419.1
Accumulated depreciation	—			(4,135.7		)	(73.8		)	(74.1		)	—			(4,283.6		)
Property, plant and equipment, net	—			1,586.0			25.5			524.0			—			2,135.5
Other non-current assets:
Investments in affiliates	—			42.7			—			33.6			—			76.3
Investment in subsidiaries	(3,393.3		)	1,369.5			—			—			2,023.8			—
Inter-company accounts	2,527.1			(3,518.1		)	1,376.4			(422.7		)	37.3			—
Other non-current assets	—			116.0			33.0			60.3			—			209.3
TOTAL ASSETS	$	(865.9	)	$	1,344.8		$	1,489.9		$	348.1		$	2,018.5		$	4,335.4
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	724.8		$	5.8		$	32.2		$	(1.0	)	$	761.8
Accrued liabilities	—			206.3			2.8			16.3			—			225.4
Current portion of pension and other postretirement benefit obligations	—			63.4			—			0.3			—			63.7
Total current liabilities	—			994.5			8.6			48.8			(1.0		)	1,050.9
Non-current liabilities:
Long-term debt	—			2,442.5			—			—			—			2,442.5
Pension and other postretirement benefit obligations	—			1,170.7			—			3.5			—			1,174.2
Other non-current liabilities	—			130.4			—			0.4			—			130.8
TOTAL LIABILITIES	—			4,738.1			8.6			52.7			(1.0		)	4,798.4
Equity (deficit):
Total stockholders’ equity (deficit)	(865.9		)	(3,393.3		)	1,481.3			(107.5		)	2,019.5			(865.9		)
Noncontrolling interests	—			—			—			402.9			—			402.9
TOTAL EQUITY (DEFICIT)	(865.9		)	(3,393.3		)	1,481.3			295.4			2,019.5			(463.0		)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	(865.9	)	$	1,344.8		$	1,489.9		$	348.1		$	2,018.5		$	4,335.4



Condensed Consolidated Balance Sheets
December 31, 2014

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes			Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	28.5		$	0.5		$	41.2		$	—		$	70.2
Accounts receivable, net	—			606.2			27.6			37.3			(26.8		)	644.3
Inventory, net	—			1,080.5			26.2			73.5			(8.1		)	1,172.1
Deferred tax assets, current	—			67.5			—			0.2			—			67.7
Other current assets	0.3			67.9			0.2			3.0			—			71.4
Total current assets	0.3			1,850.6			54.5			155.2			(34.9		)	2,025.7
Property, plant and equipment	—			5,695.8			97.3			595.3			—			6,388.4
Accumulated depreciation	—			(4,040.8		)	(71.8		)	(62.6		)	—			(4,175.2		)
Property, plant and equipment, net	—			1,655.0			25.5			532.7			—			2,213.2
Other non-current assets:
Investments in affiliates	—			84.5			—			304.2			—			388.7
Investment in subsidiaries	(2,970.9		)	1,582.4			—			—			1,388.5			—
Inter-company accounts	2,478.1			(3,420.4		)	1,325.5			(412.4		)	29.2			—
Other non-current assets	—			137.4			33.0			60.5			—			230.9
TOTAL ASSETS	$	(492.5	)	$	1,889.5		$	1,438.5		$	640.2		$	1,382.8		$	4,858.5
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	754.9		$	6.9		$	42.0		$	(0.7	)	$	803.1
Accrued liabilities	—			244.6			3.0			18.9			—			266.5
Current portion of pension and other postretirement benefit obligations	—			55.3			—			0.3			—			55.6
Total current liabilities	—			1,054.8			9.9			61.2			(0.7		)	1,125.2
Non-current liabilities:
Long-term debt	—			2,452.5			—			—			—			2,452.5
Pension and other postretirement benefit obligations	—			1,221.3			—			4.0			—			1,225.3
Other non-current liabilities	—			131.8			—			0.7			—			132.5
TOTAL LIABILITIES	—			4,860.4			9.9			65.9			(0.7		)	4,935.5
Equity (deficit):
Total stockholders’ equity (deficit)	(492.5		)	(2,970.9		)	1,428.6			158.8			1,383.5			(492.5		)
Noncontrolling interests	—			—			—			415.5			—			415.5
TOTAL EQUITY (DEFICIT)	(492.5		)	(2,970.9		)	1,428.6			574.3			1,383.5			(77.0		)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	(492.5	)	$	1,889.5		$	1,438.5		$	640.2		$	1,382.8		$	4,858.5



Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2015

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes			Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
Net cash flows from operating activities	$	(2.5	)	$	14.9		$	22.9		$	40.4		$	8.2		$	83.9
Cash flows from investing activities:
Capital investments	—			(45.7		)	(1.6		)	(2.4		)	—			(49.7		)
Proceeds from sale of equity investee	—			25.0			—			—			—			25.0
Other investing items, net	—			1.3			—			—			—			1.3
Net cash flows from investing activities	—			(19.4		)	(1.6		)	(2.4		)	—			(23.4		)
Cash flows from financing activities:
Net borrowings (payments) under credit facility	—			(10.0		)	—			—			—			(10.0		)
Redemption of long-term debt	—			(2.2		)	—			—			—			(2.2		)
Inter-company activity	3.5			16.0			(21.8		)	10.5			(8.2		)	—
SunCoke Middletown distributions to noncontrolling interest owners	—			—			—			(42.6		)	—			(42.6		)
Other financing items, net	(1.0		)	0.1			—			—			—			(0.9		)
Net cash flows from financing activities	2.5			3.9			(21.8		)	(32.1		)	(8.2		)	(55.7		)
Net increase (decrease) in cash and cash equivalents	—			(0.6		)	(0.5		)	5.9			—			4.8
Cash and equivalents, beginning of period	—			28.5			0.5			41.2			—			70.2
Cash and equivalents, end of period	$	—		$	27.9		$	—		$	47.1		$	—		$	75.0



Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2014

	AK Holding			AK Steel			Guarantor Subsidiaries of the Senior Notes			Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Company
Net cash flows from operating activities	$	(2.0	)	$	(375.3	)	$	15.6		$	26.3		$	4.3		$	(331.1	)
Cash flows from investing activities:
Capital investments	—			(16.7		)	(1.3		)	(9.6		)	—			(27.6		)
Investments in Magnetation joint venture	—			—			—			(45.0		)	—			(45.0		)
Other investing items, net	—			7.2			—			(0.3		)	—			6.9
Net cash flows from investing activities	—			(9.5		)	(1.3		)	(54.9		)	—			(65.7		)
Cash flows from financing activities:
Net borrowings under credit facility	—			440.0			—			—			—			440.0
Redemption of long-term debt	—			(0.4		)	—			—			—			(0.4		)
Debt issuance costs	—			(3.3		)	—			—			—			(3.3		)
Inter-company activity	3.0			(49.2		)	(14.1		)	64.6			(4.3		)	—
SunCoke Middletown distributions to noncontrolling interest owners	—			—			—			(28.9		)	—			(28.9		)
Other financing items, net	(1.0		)	(0.1		)	—			—			—			(1.1		)
Net cash flows from financing activities	2.0			387.0			(14.1		)	35.7			(4.3		)	406.3
Net increase (decrease) in cash and cash equivalents	—			2.2			0.2			7.1			—			9.5
Cash and equivalents, beginning of period	—			16.8			—			28.5			—			45.3
Cash and equivalents, end of period	$	—		$	19.0		$	0.2		$	35.6		$	—		$	54.8