Obligation AK Steel 7% ( US001546AU45 ) en USD

AK Steel

100.456 % ⇌

Etats-unis

US001546AU45 ( en USD )

7% par an ( paiement semestriel )

15/03/2027

Prospectus brochure de l'obligation AK Steel US001546AU45 en USD 7%, échéance 15/03/2027

001546AU4

BB- ( Spéculatif )

15/03/2025 ( Dans 136 jours )

L'Obligation émise par AK Steel ( Etats-unis ) , en USD, avec le code ISIN US001546AU45, paye un coupon de 7% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 15/03/2027
L'Obligation émise par AK Steel ( Etats-unis ) , en USD, avec le code ISIN US001546AU45, a été notée BB- ( Spéculatif ) par l'agence de notation Standard & Poor's ( S&P ).

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424B2 1 d338871d424b2.htm 424B2
Table of Contents
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-210785
CALCULATION OF REGISTRATION FEE

Maximum
Title of Each Class of
Aggregate
Amount of
Securities Offered

Offering Price
Registration Fee(1)
7.00% Senior Notes due 2027

$400,000,000

$46,360
Guarantees of 7.00% Senior Notes due 2027(2)

--

--

(1)
Calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended (the "Securities Act").
(2)
Pursuant to Rule 457(n) of the Securities Act, no separate registration fee is payable for the guarantees.
Table of Contents
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-210785
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 16, 2017)

AK Steel Corporation
$400,000,000
7.00% Senior Notes due 2027

AK Steel Corporation ("AK Steel") is offering $400,000,000 principal amount of 7.00% Senior Notes due 2027. The notes will bear interest at a rate of 7.00%
per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2017. The notes will mature on March 15, 2027 and
will be fully and unconditionally guaranteed by the direct parent of AK Steel, AK Steel Holding Corporation ("AK Holding"), and AK Tube LLC, AK Steel Properties,
Inc. and Mountain State Carbon, LLC, three wholly-owned subsidiaries of AK Steel (AK Holding and the Subsidiary Guarantors are collectively the "Guarantors").
Prior to March 15, 2022, the notes will be redeemable at a price equal to 100% plus a make-whole premium, plus accrued and unpaid interest. The notes will
be redeemable on or after March 15, 2022 at the redemption prices specified under "Description of Notes--Optional Redemption", plus accrued and unpaid interest. In
addition, we may redeem up to 35% of the notes before March 15, 2020 with the net cash proceeds from certain public offerings of AK Holding's common stock at a
redemption price of 107.000% plus accrued and unpaid interest.
If AK Steel experiences certain kinds of changes of control, it must offer to purchase the notes. If a change of control repurchase event occurs, subject to
certain conditions, AK Steel must give holders of the notes an opportunity to sell to AK Steel the notes at a purchase price of 101% of the principal amount of the notes,
plus accrued and unpaid interest to the date of the purchase. See "Description of Notes--Change of Control".
The notes will be AK Steel's senior unsecured obligations and will rank senior in right of payment to any of its indebtedness that is expressly subordinated in
right of payment to the notes; equal in right of payment to any of its indebtedness that is not so subordinated; effectively junior in right of payment to any of its secured
indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including accounts payable)
of its subsidiaries that do not guarantee the notes.
Concurrently with this offering, AK Steel launched a cash tender offer (the "Cash Tender Offer") for any and all of its currently outstanding 7.625% senior
notes due 2020 (the "existing 2020 Notes"). AK Steel is offering to purchase the existing 2020 Notes at a purchase price of $1,021.25 for each $1,000 principal amount of
existing 2020 Notes validly tendered and accepted by us on or before the Cash Tender Offer expiration time. AK Steel intends to use the net proceeds from this offering,
together with cash on hand and/or borrowings from its revolving credit facility, to pay the consideration for the Cash Tender Offer plus accrued and unpaid interest. The
Cash Tender Offer is not being made pursuant to this prospectus supplement or the accompanying prospectus. AK Steel intends to use the remaining proceeds not applied
in the Cash Tender Offer, if any, together with cash on hand and/or borrowings from its revolving credit facility, to redeem any of the existing 2020 Notes that remain
outstanding after the consummation of the Cash Tender Offer in accordance with the terms of the indenture governing the existing 2020 Notes. The closing of the Cash
Tender Offer is contingent upon the closing of this offering, but the closing of this offering is not conditioned upon consummation of the Cash Tender Offer.
We do not intend to apply to list the notes on any securities exchange or any automated dealer quotation system.
Investing in our securities involves risks that are described in the "Risk Factors" section beginning on page S-9 of this prospectus
supplement and under the caption "Item 1A.--Risk Factors" in AK Holding's Annual Report on Form 10-K for the year ended December 31, 2016.
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Per Note

Total

Public offering price(1)
100.000%

$ 400,000,000
Underwriting discounts and commissions

1.50%

$
6,000,000
Proceeds, before expenses, to us

98.50%

$ 394,000,000

(1) Plus accrued interest, if any, from March 23, 2017.
Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the notes or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We expect that delivery of the notes will be made to investors in book-entry form through The Depository Trust Company on or about March 23, 2017.

BofA Merrill Lynch
Wells Fargo
Citigroup
Goldman,

Securities

Sachs & Co.

BMO Capital Markets
Credit Suisse

Deutsche Bank Securities

Co-Managers
Citizens Capital Markets Fifth Third Securities

ING
PNC Capital Markets LLC Regions Securities LLC

US Bancorp

March 16, 2017
Table of Contents
TABLE OF CONTENTS

ABOUT THIS PROSPECTUS SUPPLEMENT
S-ii
FORWARD-LOOKING STATEMENTS
S-ii
SUMMARY
S-1
THE OFFERING
S-2
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA
S-5
RISK FACTORS
S-9
USE OF PROCEEDS
S-14
CAPITALIZATION
S-15
RATIO OF EARNINGS TO FIXED CHARGES
S-16
DESCRIPTION OF OTHER INDEBTEDNESS
S-17
DESCRIPTION OF NOTES
S-21
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
S-43
UNDERWRITING (CONFLICTS OF INTEREST)
S-45
LEGAL MATTERS
S-52
EXPERTS
S-52
WHERE YOU CAN FIND MORE INFORMATION
S-52
INCORPORATION BY REFERENCE
S-52

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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and also
adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into the prospectus. The
second part, the accompanying prospectus, gives more general information, some of which may not apply to this offering.
If the description of this offering or the notes varies between this prospectus supplement and the accompanying prospectus, you should
rely on the information contained in or incorporated by reference into this prospectus supplement. You should also read and consider the additional
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information under the captions "Where You Can Find More Information" and "Incorporation by Reference" in this prospectus supplement.
The underwriters are offering to sell, and are seeking offers to buy, the notes only in jurisdictions where offers and sales are
permitted. The distribution of this prospectus supplement and the accompanying prospectus and the offering of the notes in certain
jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement and the
accompanying prospectus must inform themselves about and observe any restrictions relating to the offering of the notes and the
distribution of this prospectus supplement and the accompanying prospectus outside the United States. This prospectus supplement and
the accompanying prospectus do not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy,
any securities offered by this prospectus supplement and the accompanying prospectus by any person in any jurisdiction in which it is
unlawful for such person to make such an offer or solicitation. We have not authorized anyone to provide any information other than that
contained or incorporated by reference in this prospectus supplement or in any free writing prospectus prepared by or on behalf of us or
to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you.
Unless otherwise stated, or the context otherwise requires, references in this prospectus supplement to "we," "us," "our" and "the
Company" are to AK Steel Holding Corporation ("AK Holding") and its consolidated subsidiaries, including AK Steel Corporation ("AK Steel").
FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this prospectus supplement and the documents that are incorporated by reference herein
that are based on our management's beliefs and assumptions and on information available to our management at the time such statements were
made. 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;

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· 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 or 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 obligations;

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· our 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; and

· information technology security threats and cybercrime.
The risk factors discussed under "Risk Factors" in this prospectus supplement and under similar headings in our Annual Report on Form
10-K, as well as the other risks and uncertainties described in the other documents incorporated by reference into this prospectus supplement and
the accompanying prospectus, 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.

S-iii
Table of Contents
SUMMARY
This summary does not include all information you should consider before investing in the notes offered hereby. For a more
complete understanding of our business and the notes, we urge you to carefully read this prospectus supplement, the accompanying
prospectus and the information incorporated by reference herein and therein in its entirety, including the sections entitled "Risk Factors,"
"Forward-Looking Statements" and the financial statements and the related notes incorporated by reference herein.
Business Overview
Our primary operations include eight steelmaking and finishing plants, two coke plants and two tube manufacturing plants across six
states--Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia--and a tube manufacturing plant in Mexico. These operations
produce flat-rolled carbon steels, specialty stainless and electrical steels that we sell in sheet and strip form, as well as carbon and stainless
steel that we finish into welded steel tubing. We sell these products to our customers in three markets: (i) automotive; (ii) infrastructure and
manufacturing; and (iii) distributors and converters markets. We sell carbon steel products principally to North American customers and
electrical and stainless steel products both domestically and internationally. We also produce carbon and stainless steel that we finish into
welded steel tubing used in the automotive, large truck, industrial and construction markets. In addition, we operate Mexican and European
trading companies that buy and sell steel and steel products and other materials.
We sell flat-rolled carbon steel products, consisting of premium-quality coated, cold-rolled, and hot-rolled carbon steel products,
primarily to automotive manufacturers and their suppliers, as well as to customers in the infrastructure and manufacturing market. The
infrastructure and manufacturing market primarily includes electrical transmission, heating, ventilation and air conditioning equipment, and
appliances. We also sell carbon steel products to distributors, service centers and converters, who may further process these products before
reselling them. We sell our stainless steel products to manufacturers and their suppliers in the automotive industry, to manufacturers of food
handling, chemical processing, pollution control, medical and health equipment, and to distributors and service centers. We sell our electrical
steel products in the infrastructure and manufacturing market, primarily to manufacturers of power transmission and distribution transformers,
both for new and replacement installation. We also sell electrical steel products to manufacturers of electrical motors and generators. We sell
our carbon steel products principally to customers in the United States. We sell our electrical and stainless steel products both domestically
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and internationally. Our customer base is geographically diverse and there is no single country outside the United States where our sales are
material compared to our total net sales.
For the year ended December 31, 2016, we shipped approximately 6.1 million tons of steel products, and generated revenue of
approximately $5.88 billion, net income (loss) attributable to AK Holding of $(7.8) million and adjusted EBITDA of $501.9 million.
For additional information, including information with respect to our customers, markets, properties and raw material needs, please
refer to AK Holding's Annual Report on Form 10-K for the year ended December 31, 2016, which is incorporated by reference herein.
Additional Information
AK Holding and AK Steel are incorporated under the laws of the State of Delaware. Our principal executive offices are located at
9227 Centre Pointe Drive, West Chester, Ohio 45069, and our telephone number at that address is (513) 425-5000. Our internet address is
www.aksteel.com. Other than any documents expressly incorporated by reference, the information on our website and any other website that is
referred to in this prospectus supplement is not part of this prospectus supplement.

S-1
Table of Contents
THE OFFERING

Issuer
AK Steel Corporation, a Delaware corporation.

Notes Offered
$400.0 million aggregate principal amount of 7.00% Senior
Notes due 2027.

Maturity Date
March 15, 2027.

Interest
7.00% per year. Interest will accrue from the issue date and will be payable
semiannually in arrears on March 15 and September 15 each year, beginning on
September 15, 2017.

Guarantee
The notes will be fully and unconditionally guaranteed on a senior unsecured basis by
AK Holding, the direct parent of AK Steel, and AK Tube LLC ("AK Tube"), AK Steel
Properties, Inc. ("AK Steel Properties") and Mountain State Carbon, LLC ("MSC" and
together with AK Tube and AK Steel Properties, the "Subsidiary Guarantors"), three
wholly-owned subsidiaries of AK Steel. AK Holding and the Subsidiaries are
collectively referred to herein as the "Guarantors."

Optional Redemption
AK Steel may redeem all or any portion of the notes prior to March 15, 2022 at a
redemption price equal to 100% of the principal amount of the notes plus a "make-
whole" premium, plus accrued and unpaid interest to the redemption date. AK Steel may
redeem all or any portion of the notes beginning on March 15, 2022 at the redemption
prices set forth in "Description of Notes--Optional Redemption," plus accrued and
unpaid interest to the redemption date.

In addition, before March 15, 2020, AK Steel may redeem up to 35% of the aggregate
principal amount of notes originally issued (calculated after giving effect to any
additional notes) with the proceeds of certain public offerings of our common stock at

107.000% of their principal amount plus accrued and unpaid interest. AK Steel may
make such redemption only if, after any such redemption, at least 65% of the aggregate
principal amount of notes originally issued remains outstanding.

Change of Control
If a change of control repurchase event occurs, subject to certain conditions, AK Steel
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must give holders of the notes an opportunity to sell to AK Steel the notes at a purchase
price of 101% of the principal amount of the notes, plus accrued and unpaid interest to
the date of the purchase. See "Description of Notes--Change of Control." AK Steel may
not have sufficient funds available at the time of any change of control to make any
required debt repayment (including repurchases of the notes). See "Risk Factors--Risks
Relating to the Notes and this Offering--Risks associated with change of control
provisions in the indenture governing the notes and in our Credit Facility."

Ranking
The notes will be our senior unsecured obligations and will rank:

· senior in right of payment to any of AK Steel's indebtedness that is expressly

subordinated in right of payment to the notes

S-2
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· equal in right of payment to any of AK Steel's indebtedness that is not so

subordinated;

· effectively junior in right of payment to any of AK Steel's secured indebtedness to

the extent of the value of the assets securing such indebtedness; and

· structurally junior to all indebtedness and other liabilities (including accounts

payable) of our subsidiaries that do not guarantee the notes.

Each of the guarantees will be the respective Guarantor's senior unsecured obligations

and will rank:

· senior in right of payment to any of such Guarantor's indebtedness that is expressly

subordinated in right of payment to the notes;

· equal in right of payment to any of such Guarantor's indebtedness that is not so

subordinated

· effectively junior in right of payment to any of such Guarantor's secured

indebtedness to the extent of the value of the assets securing such indebtedness; and

· structurally junior to all indebtedness and other liabilities (including accounts

payable) of such Guarantor's subsidiaries that do not guarantee the notes.

As of December 31, 2016, on an adjusted basis giving effect to this offering and the

repayment of the validly tendered existing 2020 Notes:

· we had no outstanding debt and $70.7 million of outstanding letters of credit under

our Credit Facility secured by the ABL collateral;

· we had $380.0 million of senior secured debt secured by first priority liens on the

plant, property and equipment of AK Steel and the Subsidiary Guarantors (other than
certain excluded property, and subject to permitted liens) and proceeds thereof;

· we had $1,309.3 million of unsecured senior debt; and

· our non-guarantor subsidiaries had $32.1 million of indebtedness and other liabilities
(including accounts payable, but excluding intercompany obligations and liabilities of

a type not required to be reflected on a balance sheet of such subsidiaries in
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accordance with GAAP) to which the notes would have been structurally
subordinated.

Certain Covenants
AK Steel will issue the notes under the indenture, which will, among other things, limit
AK Steel's ability and the ability of its subsidiaries to:

· create liens on its and their assets;

· incur subsidiary debt;

S-3
Table of Contents

· engage in sale/leaseback transactions; and

· engage in a consolidation, merger or sale of assets.

The indenture will also restrict the activities of AK Holding. These covenants are subject

to important exceptions and qualifications, which are described under the caption
"Description of Notes--Certain Covenants."

Use of Proceeds
We estimate that the net proceeds from the issuance and sale of the notes will be
approximately $394.0 million after deducting the underwriting discounts and
commissions. We intend to use the net proceeds from this offering, together with cash
on hand and/or borrowings under our Credit Facility, to pay the consideration for the
Cash Tender Offer and accrued and unpaid interest and estimated offering expenses
payable by us. AK Steel intends to use the remaining proceeds not applied in the Cash
Tender Offer, if any, together with cash on hand and/or borrowings under our Credit
Facility, to redeem any of the existing 2020 Notes that remain outstanding after the
consummation of the Cash Tender Offer in accordance with the terms of the indenture
governing the existing 2020 Notes. The closing of the Cash Tender Offer is contingent
upon the closing of this offering, but the closing of this offering is not conditioned upon
consummation of the Cash Tender Offer. See "Use of Proceeds" and "Capitalization."

Certain of the underwriters or their affiliates own, or manage accounts that own, existing
2020 Notes. As a result, certain of the underwriters or their affiliates will receive a
portion of the proceeds from this offering as a result of the Cash Tender Offer and/or
redemption of the existing 2020 Notes. Because certain of the underwriters or their
affiliates will receive 5% or more of the net proceeds of the offering, such underwriters

may be deemed to have a "conflict of interest" under FINRA Rule 5121. Accordingly,
this offering will be conducted in accordance with FINRA Rule 5121. No underwriter
with a "conflict of interest" under FINRA Rule 5121 will confirm sales to any
discretionary accounts without receiving specific written approval from the account
holder. See "Use of Proceeds" and "Underwriting (Conflicts of Interest)--Conflicts of
Interest."

Material U.S. Federal Income Tax Considerations For the U.S. federal income tax consequences of the holding and disposition of the
for Non-U.S. Holders
notes, see "Material U.S. Federal Income Tax Considerations for Non-U.S. Holders."

Risk Factors
Investing in the notes involves risks. You should carefully consider the risk factors set
forth under "Risk Factors" beginning on page S-9 in this prospectus supplement and
under similar headings in AK Holding's Annual Report on Form 10-K for the year
ended December 31, 2016, as well as the other risks and uncertainties described in the
other documents incorporated by reference in this prospectus supplement and the
accompanying prospectus, prior to making an investment in the notes.
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S-4
Table of Contents
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA
The following summary historical consolidated financial data as of December 31, 2016 and 2015 and for each of the years in the
three-year period ended December 31, 2016 has been derived from our audited consolidated financial statements, and all such financial
statements are incorporated by reference in this prospectus supplement. The summary historical consolidated balance sheet data as of
December 31, 2014 has been derived from our audited consolidated financial statements, which are not included or incorporated by reference
in this prospectus supplement.
This information is only a summary. You should read the data set forth in the table below in conjunction with our audited
consolidated financial statements and the accompanying notes as of December 31, 2016 and 2015 and for each of the years in the three-year
period ended December 31, 2016, which are incorporated by reference herein, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" set forth in our Annual Report on Form 10-K for the year ended December 31, 2016 which is
incorporated by reference in this prospectus supplement.

Year Ended

December 31,

2014

2015

2016

(dollars in millions, except per share and per ton data)

Net sales

$6,505.7
$6,692.9
$5,882.5
Costs of products sold (exclusive of items shown separately below)

6,007.7
6,032.0
5,064.7
Selling and administrative expenses (exclusive of items shown separately below)

247.2

261.9

277.2
Depreciation

201.9

216.0

216.6
Pension and OPEB expense (income) (exclusive of corridor and settlement charges shown below)

(92.5)

(63.0)

(43.8)
Pension and OPEB net corridor charge

2.0

131.2

43.1
Pension settlement charges

--

--

25.0
Charges for termination of pellet agreement and related transportation costs

--

--

69.5
Charge for facility idling

--

28.1

--

Total operating costs

6,366.3
6,606.2
5,652.3

Operating profit

139.4

86.7

230.2
Interest expense

144.7

173.0

163.9
Impairment of Magnetation investment

--
(256.3)

--
Impairment of AFSG investment

--

(41.6)

--
Other income (expense)

(21.1)

1.4

(4.9)

Income (loss) before income taxes

(26.4)
(382.8)

61.4
Income tax expense (benefit)

7.7

63.4

3.2

Net income (loss)

(34.1)
(446.2)

58.2
Less: Net income (loss) attributable to noncontrolling interests

62.8

62.8

66.0

Net income (loss) attributable to AK Holding

$ (96.9)
$ (509.0)
$
(7.8)

Basic and diluted earnings per share:

Net income (loss) per share attributable to AK Holding's common stockholders

$
(0.65)
$
(2.86)
$
(0.03)

S-5
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Year Ended

December 31,

2014
2015
2016
(dollars in millions, except per share and per ton data)

Other financial and cash flow data:

Capital investments

$ (81.1)
$ (99.0)
$ (127.6)
Net cash flows from operating activities

(322.8)

200.3

304.6
Net cash flows from investing activities

(857.8)

(47.5)
(125.3)
Net cash flows from financing activities

1,205.5
(166.4)

(62.7)
Balance sheet data (as of period end):

Cash and cash equivalents

$
70.2
$
56.6

173.2
Working capital

832.8

763.6

958.4
Total assets

4,828.0
4,084.4
4,036.0
Current portion of long-term debt

--

--

--
Long-term debt (excluding current portion)

2,422.0
2,354.1
1,816.6
Current portion of pension and postretirement benefit obligations

55.6

77.7

41.3
Pension and other postretirement benefit obligations (excluding current portion)

1,225.3
1,146.9
1,093.7
Total equity (deficit)

(77.0)
(595.6)

90.7
Other data (unaudited):

Amortization(1)

$
9.1
$
8.4
$
4.8
Adjusted EBITDA(2)

$ 280.2
$ 393.4
$ 501.9
Total shipments (in thousands of tons)

6,132.7
7,089.2
6,051.8
Average selling price per ton

$ 1,058
$
942
$
969

(1)
Amortization excludes amounts that are included in interest expense.

(2)
In certain of our disclosures in this prospectus supplement, we have presented adjusted EBITDA that excludes the effects of
noncontrolling interests, pension and other postretirement employee benefit ("OPEB") net corridor and settlement charges, charges for
the termination of a pellet offtake agreement and related transportation costs, impairment charges for our investments in Magnetation
LLC ("Magnetation") and AFSG Holdings, Inc. ("AFSG"), charges for temporarily idling facilities and acquisition-related expenses of
Dearborn.
EBITDA is an acronym for earnings before interest, taxes, depreciation and amortization. It is a metric that is sometimes used to compare
the results of different companies by removing the effects of different factors that might otherwise make comparisons inaccurate or
inappropriate. For purposes of this prospectus supplement, we have made adjustments to EBITDA to also exclude the effect of
noncontrolling interests, pension and OPEB net corridor and settlement charges, charges for the termination of a pellet offtake agreement
and related transportation costs, impairment charges for our investments in Magnetation and AFSG, charges for temporarily idling
facilities and the acquisition-related expenses of Dearborn. The adjusted results, although not financial measures under generally accepted
accounting principles in the United States ("GAAP") and not identically applied by other companies, facilitate the ability to analyze our
financial results in relation to those of our competitors and to our prior financial performance by excluding items that otherwise would
distort the comparison. Adjusted EBITDA is not, however, intended as an alternative measure of operating results or cash flow from
operations as determined in accordance with GAAP and is not necessarily comparable to similarly titled measures used by other
companies.
We recognize in our results of operations, as a corridor adjustment, any unrecognized actuarial net gains or losses that exceed 10% of the
larger of projected benefit obligations or plan assets. Amounts inside this 10% corridor are amortized over the plan participants' life
expectancy. The need for a corridor charge is considered at any remeasurement date, but has generally only been recorded in the fourth
quarter at the time of the annual remeasurement. After excluding the corridor charge, the remaining pension and OPEB

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expenses included in the non-GAAP measure are comparable to the accounting for pension and OPEB expenses on a GAAP basis in the
first three quarters of the year and we believe this is useful to investors in analyzing our results on a quarter-to-quarter basis, as well as
analyzing our results on a year-to-year basis. As a result of the corridor method of accounting, our subsequent financial results on both a
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424B2
GAAP and a non-GAAP basis do not contain any amortization of prior period actuarial gains or losses that exceeded the corridor
threshold because those amounts were immediately recognized as a corridor adjustment in the period incurred. Actuarial net gains and
losses occur when actual experience differs from any of the many assumptions used to value the benefit plans, or when the assumptions
change, as they may each year when we perform a valuation. The two most significant of those assumptions are the discount rate we use
to value projected plan obligations and the rate of return on plan assets. In addition, changes in other actuarial assumptions and the degree
by which the unrealized gains or losses are within the corridor threshold before remeasurement will affect the corridor adjustment
calculation. The effect of prevailing interest rates on the discount rate as of a measurement date and actual return on plan assets compared
to the expected return will have a significant impact on our liability, corridor adjustment and following year's expense for these benefit
plans.
For example, actuarial assumptions we made to remeasure the funded status of our pension and OPEB obligations in the fourth quarter of
2016 affected actuarial losses and the related pension and OPEB net corridor charge. The net corridor charge reflected (i) a decrease in the
discount rate assumption used to determine pension liabilities from 4.15% at December 31, 2015 to 3.35% at the October 2016
remeasurement (an actuarial loss of approximately $221.1 million), partially offset by (ii) gains from changes in pension and OPEB
mortality assumptions, lower claims costs and other demographic factors (netting to a gain of approximately $76.4 million) and (iii) the net
effect of the difference between the expected annualized return on assets of 7.25% ($129.4 million) and the actual annualized return on
assets of 12.7% as of the October 2016 remeasurement ($228.8 million) (netting to a gain of $99.4 million). We believe that the corridor
method of accounting for pension and OPEB obligations is rarely used by other publicly traded companies. However, because other
companies use different approaches to recognize actuarial gains and losses, our resulting pension and OPEB expense on a GAAP basis or
a non-GAAP basis may not be comparable to other companies' pension and OPEB expense on a GAAP basis. Although the net corridor
charge reduces reported operating and net income, it does not affect our cash flows in the current period. However, we expect to
ultimately settle the pension and OPEB obligations in cash.

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We believe that the above non-GAAP measures, when analyzed in conjunction with our GAAP results and the accompanying
reconciliations, provide additional insight into the financial trends of our business versus the GAAP results alone. You should not rely on
adjusted EBITDA as a substitute for any GAAP financial measure and we encourage you to review the following reconciliation of net
income (loss) attributable to AK Holding to adjusted EBITDA.

Year Ended

December 31,

2014

2015

2016

(dollars in millions, except per ton data)

Net income (loss) attributable to AK Holding

$
(96.9)
$
(509.0)
$
(7.8)
Net income (loss) attributable to noncontrolling interests

62.8

62.8

66.0
Income tax expense

7.7

63.4

3.2
Interest expense

144.7

173.0

163.9
Interest income

(0.7)

(1.3)

(1.6)
Depreciation

201.9

216.0

216.6
Amortization

9.1

8.4

4.8

EBITDA

328.6

13.3

445.1
Less: EBITDA of noncontrolling interests(a)

77.2

77.1

80.8
Pension and OPEB net corridor and settlement charges

5.5

131.2

68.1
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

23.3

--

--

Adjusted EBITDA(b)

$
280.2
$
393.4
$
501.9

(a)
The reconciliation of EBITDA of noncontrolling interests to net income attributable to noncontrolling interests is as follows:

Year Ended
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