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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________
FORM 10-Q
_________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018

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)

(513) 425-5000
(Registrant’s telephone number, including area code)

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, and (2) has been subject to filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
Large accelerated filer
 
Accelerated filer
 
Non-accelerated filer
Smaller reporting company
 
Emerging growth company
 
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. Yes No

Indicate by check mark whether the registrant is a shell company. Yes No

There were 315,541,965 shares of common stock outstanding as of October 24, 2018.
 
 
 
 
 


                

AK STEEL HOLDING CORPORATION
TABLE OF CONTENTS

 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

-i-

Table of Contents         

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(unaudited)
 
2018
 
2017
 
2018
 
2017
 
 
 
 
As Adjusted
 
 
 
As Adjusted
Net sales
 
$
1,735.6

 
$
1,494.3

 
$
5,141.1

 
$
4,584.9

 
 
 
 
 
 
 
 
 
Cost of products sold (exclusive of item shown separately below)
 
1,486.2

 
1,301.8

 
4,462.6

 
3,898.7

Selling and administrative expenses
 
79.6

 
68.2

 
235.8

 
205.5

Depreciation
 
55.0

 
58.0

 
164.8

 
168.2

Total operating costs
 
1,620.8

 
1,428.0

 
4,863.2

 
4,272.4

Operating profit
 
114.8

 
66.3

 
277.9

 
312.5

Interest expense
 
37.8

 
37.5

 
113.3

 
115.1

Pension and OPEB (income) expense
 
(10.0
)
 
(18.1
)
 
(30.0
)
 
(54.3
)
Other (income) expense
 
0.7

 
7.8

 
(3.4
)
 
19.2

Income before income taxes
 
86.3

 
39.1

 
198.0

 
232.5

Income tax expense (benefit)
 
1.4

 
(0.3
)
 
(4.0
)
 
0.1

Net income
 
84.9

 
39.4

 
202.0

 
232.4

Less: Net income attributable to noncontrolling interests
 
17.7

 
17.1

 
49.5

 
48.5

Net income attributable to AK Steel Holding Corporation
 
$
67.2

 
$
22.3

 
$
152.5

 
$
183.9

Net income per share attributable to AK Steel Holding Corporation common stockholders:
 
 
 
 
 
 
 
 
Basic
 
$
0.21

 
$
0.07

 
$
0.48

 
$
0.58

Diluted
 
$
0.21

 
$
0.07

 
$
0.48

 
$
0.57


See notes to condensed consolidated financial statements.

- 1-

Table of Contents         

AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(unaudited)
 
2018
 
2017
 
2018
 
2017
 
 
 
 
As Adjusted
 
 
 
As Adjusted
Net income
 
$
84.9

 
$
39.4

 
$
202.0

 
$
232.4

Other comprehensive income (loss), before tax:
 
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
 
(0.3
)
 
1.4

 
(1.4
)
 
4.0

Cash flow hedges:
 
 
 
 
 
 
 
 
Gains (losses) arising in period
 
(2.3
)
 
7.3

 
(7.8
)
 
(8.9
)
Reclassification of losses (gains) to net income
 
0.5

 
(0.2
)
 
(12.6
)
 
(2.1
)
Pension and OPEB plans:
 
 
 
 
 
 
 
 
Reclassification of prior service cost (credits) to net income
 
(2.4
)
 
(13.6
)
 
(7.3
)
 
(40.6
)
Reclassification of losses (gains) to net income
 
3.6

 
1.6

 
10.8

 
4.9

Other comprehensive income (loss), before tax
 
(0.9
)
 
(3.5
)
 
(18.3
)
 
(42.7
)
Income tax benefit related to items of comprehensive income (loss)
 

 

 

 

Other comprehensive income (loss)
 
(0.9
)
 
(3.5
)
 
(18.3
)
 
(42.7
)
Comprehensive income
 
84.0

 
35.9

 
183.7

 
189.7

Less: Comprehensive income attributable to noncontrolling interests
 
17.7

 
17.1

 
49.5

 
48.5

Comprehensive income attributable to AK Steel Holding Corporation
 
$
66.3

 
$
18.8

 
$
134.2

 
$
141.2


See notes to condensed consolidated financial statements.

- 2-

Table of Contents         

AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share data)
 
 
 
 
 
(unaudited)
 
September 30,
2018
 
December 31,
2017
 
 
 
 
As Adjusted
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
47.3

 
$
38.0

Accounts receivable, net
 
700.7

 
517.8

Inventory
 
1,345.5

 
1,385.0

Other current assets
 
78.9

 
130.3

Total current assets
 
2,172.4

 
2,071.1

Property, plant and equipment
 
6,916.1

 
6,831.8

Accumulated depreciation
 
(5,007.0
)
 
(4,845.6
)
Property, plant and equipment, net
 
1,909.1

 
1,986.2

Other non-current assets
 
406.4

 
417.5

TOTAL ASSETS
 
$
4,487.9

 
$
4,474.8

LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
773.6

 
$
690.4

Accrued liabilities
 
257.3

 
270.5

Current portion of pension and other postretirement benefit obligations
 
38.8

 
40.1

Total current liabilities
 
1,069.7

 
1,001.0

Non-current liabilities:
 
 
 
 
Long-term debt
 
2,034.9

 
2,110.1

Pension and other postretirement benefit obligations
 
797.5

 
894.2

Other non-current liabilities
 
148.0

 
168.9

TOTAL LIABILITIES
 
4,050.1

 
4,174.2

Equity:
 
 
 
 
Common stock, authorized 450,000,000 shares of $0.01 par value each; issued 316,569,578 and 315,782,764 shares in 2018 and 2017; outstanding 315,510,490 and 314,884,569 shares in 2018 and 2017
 
3.2

 
3.2

Additional paid-in capital
 
2,893.3

 
2,884.8

Treasury stock, common shares at cost, 1,059,088 and 898,195 shares in 2018 and 2017
 
(6.4
)
 
(5.4
)
Accumulated deficit
 
(2,725.3
)
 
(2,877.0
)
Accumulated other comprehensive loss
 
(67.7
)
 
(50.2
)
Total stockholders’ equity (deficit)
 
97.1

 
(44.6
)
Noncontrolling interests
 
340.7

 
345.2

TOTAL EQUITY
 
437.8

 
300.6

TOTAL LIABILITIES AND EQUITY
 
$
4,487.9

 
$
4,474.8


- 3-

Table of Contents         

The condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017, include the following amounts related to consolidated variable interest entities, prior to intercompany eliminations. See Note 11 for more information concerning variable interest entities.
(unaudited)
 
September 30,
2018
 
December 31,
2017
Middletown Coke Company, LLC (“SunCoke Middletown”)
 
 
 
 
Cash and cash equivalents
 
$
5.2

 
$
0.1

Inventory
 
22.0

 
18.4

Property, plant and equipment
 
426.4

 
425.9

Accumulated depreciation
 
(100.0
)
 
(88.6
)
Accounts payable
 
14.9

 
11.3

Other assets (liabilities), net
 
0.6

 
(1.0
)
Noncontrolling interests
 
339.3

 
343.5

 
 
 
 
 
Other variable interest entities
 
 
 
 
Cash and cash equivalents
 
$
0.4

 
$
0.7

Property, plant and equipment
 
11.7

 
11.7

Accumulated depreciation
 
(9.8
)
 
(9.6
)
Other assets (liabilities), net
 
0.6

 
0.8

Noncontrolling interests
 
1.4

 
1.7



See notes to condensed consolidated financial statements.

- 4-

Table of Contents         

AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
 
 
Nine Months Ended September 30,
(unaudited)
 
2018
 
2017
 
 
 
 
As Adjusted
Cash flows from operating activities:
 
 
 
 
Net income
 
$
202.0

 
$
232.4

Depreciation
 
153.3

 
155.8

Depreciation—SunCoke Middletown
 
11.5

 
12.4

Amortization
 
24.5

 
17.9

Deferred income taxes
 
(6.3
)
 
4.9

Pension and OPEB expense (income)
 
(24.2
)
 
(48.6
)
Contributions to pension trust
 
(40.7
)
 
(38.1
)
Other postretirement benefit payments
 
(28.5
)
 
(30.0
)
Changes in working capital
 
(11.1
)
 
(156.2
)
Other operating items, net
 
(30.6
)
 
3.5

Net cash flows from operating activities
 
249.9

 
154.0

Cash flows from investing activities:
 
 
 
 
Capital investments
 
(101.1
)
 
(88.7
)
Investment in acquired business, net of cash acquired
 

 
(360.9
)
Other investing items, net
 
0.2

 
4.2

Net cash flows from investing activities
 
(100.9
)
 
(445.4
)
Cash flows from financing activities:
 
 
 
 
Net borrowings (payments) under credit facility
 
(85.0
)
 
415.0

Proceeds from issuance of long-term debt
 

 
680.0

Redemption of long-term debt
 

 
(821.8
)
Debt issuance costs
 

 
(25.0
)
SunCoke Middletown distributions to noncontrolling interest owners
 
(54.0
)
 
(58.2
)
Other financing items, net
 
(0.7
)
 
(2.5
)
Net cash flows from financing activities
 
(139.7
)
 
187.5

Net increase (decrease) in cash and cash equivalents
 
9.3

 
(103.9
)
Cash and cash equivalents, beginning of period
 
38.0

 
173.2

Cash and cash equivalents, end of period
 
$
47.3

 
$
69.3


See notes to condensed consolidated financial statements.

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AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(unaudited)
 
2018
 
2017
 
2018
 
2017
 
 
 
 
As Adjusted
 
 
 
As Adjusted
Common stock
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
3.2

 
$
3.2

 
$
3.2

 
$
3.1

Share-based compensation
 

 

 

 
0.1

Balance at end of period
 
3.2

 
3.2

 
3.2

 
3.2

Additional paid-in capital
 
 
 
 
 
 
 
 
Balance at beginning of period
 
2,891.1

 
2,882.6

 
2,884.8

 
2,855.4

Share-based compensation
 
1.5

 
1.1

 
7.8

 
6.5

Stock options exercised
 
0.7

 

 
0.7

 
0.5

Exchangeable notes exchange feature
 

 

 

 
21.3

Balance at end of period
 
2,893.3

 
2,883.7

 
2,893.3

 
2,883.7

Treasury stock
 
 
 
 
 
 
 
 
Balance at beginning of period
 
(6.4
)
 
(5.4
)
 
(5.4
)
 
(2.4
)
Purchase of treasury stock
 

 

 
(1.0
)
 
(3.0
)
Balance at end of period
 
(6.4
)
 
(5.4
)
 
(6.4
)
 
(5.4
)
Accumulated deficit
 
 
 
 
 
 
 
 
Balance at beginning of period
 
(2,792.5
)
 
(2,818.9
)
 
(2,877.0
)
 
(2,980.5
)
Cumulative effect of adopting new hedging standard
 

 

 
(0.8
)
 

Net income
 
67.2

 
22.3

 
152.5

 
183.9

Balance at end of period
 
(2,725.3
)
 
(2,796.6
)
 
(2,725.3
)
 
(2,796.6
)
Accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Balance at beginning of period
 
(66.8
)
 
(127.9
)
 
(50.2
)
 
(88.7
)
Cumulative effect of adopting new hedging standard
 

 

 
0.8

 

Change in accumulated other comprehensive loss
 
(0.9
)
 
(3.5
)
 
(18.3
)
 
(42.7
)
Balance at end of period
 
(67.7
)
 
(131.4
)
 
(67.7
)
 
(131.4
)
Noncontrolling interests
 
 
 
 
 
 
 
 
Balance at beginning of period
 
342.2

 
352.4

 
345.2

 
362.9

Net income
 
17.7

 
17.1

 
49.5

 
48.5

Net distributions to noncontrolling interests
 
(19.2
)
 
(16.3
)
 
(54.0
)
 
(58.2
)
Balance at end of period
 
340.7

 
353.2

 
340.7

 
353.2

Total equity
 
$
437.8

 
$
306.7

 
$
437.8

 
$
306.7



See notes to condensed consolidated financial statements.

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AK STEEL HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(dollars in millions, except per share data, unless otherwise indicated)

NOTE 1Summary of Significant Accounting Policies
 

Basis of Presentation—These financial statements consolidate the operations and accounts of AK Steel Holding Corporation (“AK Holding”), its wholly-owned subsidiary AK Steel Corporation (“AK Steel”), all subsidiaries in which AK Holding has a controlling interest, and two variable interest entities for which AK Steel is the primary beneficiary. Unless the context provides otherwise, references to “we,” “us” and “our” refer to AK Holding and its subsidiaries. In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2018 and December 31, 2017, our results of operations for the three and nine months ended September 30, 2018 and 2017, and our cash flows for the nine months ended September 30, 2018 and 2017. Our results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results we expect for the full year ending December 31, 2018. These condensed consolidated financial statements should be read along with our audited consolidated financial statements for the year ended December 31, 2017, included in our Annual Report on Form 10-K for the year ended December 31, 2017.

Revenue Recognition—We generate our revenue through product sales, and shipping terms generally indicate when we have fulfilled our performance obligations and passed control of products to our customer. Our revenue transactions consist of a single performance obligation to transfer promised goods. We have contracts with a substantial portion of our customers. These contracts usually define the mechanism for determining the sales price, but the contacts do not impose a specific quantity on either party. Quantities to be delivered to the customer are determined at a point near the date of delivery through purchase orders or other written instructions we receive from the customer. Spot market sales are made through purchase orders or other written instructions. We recognize revenue when we have fulfilled a performance obligation, which is typically when we have shipped products at the customer’s instructions. For sales with shipping terms that transfer title and risk of loss at the destination point, we recognize revenue when the customer receives the goods and our performance obligation is complete. For sales with shipping terms that transfer title and risk of loss at the shipping point with us bearing responsibility for freight costs to the destination, we determine that we have fulfilled a single performance obligation and recognize revenue when we ship the goods. For our tooling solutions, we record progress payments that we receive from a customer as accrued liabilities until we recognize the revenue when the customer provides written acceptance that our performance obligation has been fulfilled.

Revenue is measured as the consideration we expect to receive in exchange for transferring product. We reduce the revenue recognized for estimated returns and other customer credits, such as discounts and volume rebates, based on the expected value to be realized. Payment terms are consistent with terms standard to the markets we serve. We maintain an allowance for doubtful accounts for the loss that would be incurred if a customer is unable to pay amounts due. We initially estimate the allowance required at the time of revenue recognition based on historical experience and make changes to the allowance based on various factors, including changes in the customer’s financial condition or payment patterns. Sales taxes collected from customers are excluded from revenues.

Inventory—Inventories are valued at the lower of cost or net realizable value. We measure the cost of inventories using the average cost method. See Note 3 for information on the change to the average cost method effective January 1, 2018.

Pension and Other Postretirement Benefits—On January 1, 2018, we adopted Accounting Standards Update No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Under this standard, the service cost component of periodic pension and other postretirement benefit expense is included in cost of products sold and selling and administrative expenses, consistent with our treatment of other employee compensation costs. The remainder of periodic pension and other postretirement benefit income of $10.0 and $18.1 for the three months ended September 30, 2018 and 2017 and $30.0 and $54.3 for the nine months ended September 30, 2018 and 2017, is recorded in a separate line in the condensed consolidated statements of operations below operating profit. We have retrospectively applied the change in accounting principle to all periods presented. The adoption of this standard update had no other effect on our consolidated financial statements.



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NOTE 2Acquisition of Precision Partners
 

On August 4, 2017, we acquired 100% of the equity of PPHC Holdings, LLC (“Precision Partners”), which provides advanced-engineered solutions, tool design and build, hot- and cold-stamped steel components and complex assemblies for the automotive market. Precision Partners is headquartered in Ontario, Canada and operates eight plants in Ontario, Alabama and Kentucky. We acquired Precision Partners to complement and bolster our core focus on the high-growth automotive lightweighting market, enhance our prominent position in advanced high strength steels, further strengthen close collaboration with automotive market customers, and leverage both companies’ research and innovation in materials and metals-forming. We finalized the purchase price allocation as of March 31, 2018. For the three and nine months ended September 30, 2017, we incurred acquisition costs of $4.7 and $6.2. Acquisition costs are primarily comprised of transaction fees and direct costs, including professional fees. These costs are included in selling and administrative expenses in the condensed consolidated statements of operations.

NOTE 3Supplementary Financial Statement Information
 

Revenue

Net sales by market are presented below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Automotive
$
1,036.7

 
$
948.8

 
$
3,264.5

 
$
2,986.0

Infrastructure and Manufacturing
277.1

 
239.3

 
782.2

 
717.9

Distributors and Converters
421.8

 
306.2

 
1,094.4

 
881.0

Total
$
1,735.6

 
$
1,494.3

 
$
5,141.1

 
$
4,584.9


Net sales by product line are presented below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Carbon steel
$
1,132.6

 
$
995.7

 
$
3,303.6

 
$
3,073.0

Stainless and electrical steel
454.3

 
401.2

 
1,363.5

 
1,279.2

Tubular products, components and other
148.7

 
97.4

 
474.0

 
232.7

Total
$
1,735.6

 
$
1,494.3

 
$
5,141.1

 
$
4,584.9



We sell domestically to customers located primarily in the Midwestern and Eastern United States and to foreign customers, primarily in Canada, Mexico and Western Europe. Net sales to customers located outside the United States were $149.6 and $490.3 for the three and nine months ended September 30, 2018, compared to $159.4 and $472.2 for the corresponding periods in 2017.

Inventory

Inventories as of September 30, 2018 and December 31, 2017, are presented below:
 
September 30,
2018
 
December 31,
2017
Finished and semi-finished
$
1,014.4

 
$
996.8

Raw materials
331.1

 
388.2

Inventory
$
1,345.5

 
$
1,385.0



In the first quarter of 2018, we changed our accounting method for valuing certain inventories from the last-in, first-out (LIFO) method to the average cost method. This method values inventory using average costs for materials and most recent

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production costs for labor and overhead. We believe that using the average cost method is preferable since it improves comparability with our peers, more closely tracks the physical flow of our inventory, better matches revenue with expenses and aligns with how we internally manage our business.

The effects of the change in accounting principle from LIFO to average cost have been retrospectively applied to all periods presented. As a result of the retrospective application of the change in accounting principle, certain financial statement line items in our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statements of operations and comprehensive income and cash flows for the three and nine months ended September 30, 2017 were adjusted as follows:
 
As Originally Reported
 
Effect of Change
 
As Adjusted
Condensed consolidated statement of operations for the three months ended September 30, 2017:
 
 
 
 
 
Cost of products sold (a)
$
1,348.4

 
$
(46.6
)
 
$
1,301.8

Income tax expense (benefit)
(18.8
)
 
18.5

 
(0.3
)
Net income
11.3

 
28.1

 
39.4

Net income attributable to AK Steel Holding Corporation
(5.8
)
 
28.1

 
22.3

Net income per share attributable to AK Steel Holding Corporation common stockholders:
 
 

 
 
Basic
$
(0.02
)
 
$
0.09

 
$
0.07

Diluted
(0.02
)
 
0.09

 
0.07

 
 
 
 
 
 
Condensed consolidated statement of operations for the nine months ended September 30, 2017:
 
 
 
 
 
Cost of products sold (a)
$
4,005.7

 
$
(107.0
)
 
$
3,898.7

Income tax expense (benefit)
(40.9
)
 
41.0

 
0.1

Net income
166.4

 
66.0

 
232.4

Net income attributable to AK Steel Holding Corporation
117.9

 
66.0

 
183.9

Net income per share attributable to AK Steel Holding Corporation common stockholders:
 
 
 
 
 
Basic
$
0.37

 
$
0.21

 
$
0.58

Diluted
0.37

 
0.20

 
0.57

 
 
 
 
 
 
Condensed consolidated statement of comprehensive income for the three months ended September 30, 2017:
 
 
 
 
 
Cash flow hedges—Reclassification of losses (gains) to net income
$
(1.9
)
 
$
1.7

 
$
(0.2
)
Comprehensive income
6.1

 
29.8

 
35.9

Comprehensive income attributable to AK Steel Holding Corporation
(11.0
)
 
29.8

 
18.8

 
 
 
 
 
 
Condensed consolidated statement of comprehensive income for the nine months ended September 30, 2017:
 
 
 
 
 
Cash flow hedges—Reclassification of losses (gains) to net income
$
(7.2
)
 
$
5.1

 
$
(2.1
)
Comprehensive income
118.6

 
71.1

 
189.7

Comprehensive income attributable to AK Steel Holding Corporation
70.1

 
71.1

 
141.2

 
 
 
 
 
 
Condensed consolidated balance sheet as of December 31, 2017:
 
 
 
 
 
Inventory
$
1,147.8

 
$
237.2

 
$
1,385.0

Other non-current assets
476.0

 
(58.5
)
 
417.5

Other non-current liabilities
161.6

 
7.3

 
168.9

Accumulated deficit
(3,058.6
)
 
181.6

 
(2,877.0
)
Accumulated other comprehensive loss
(40.0
)
 
(10.2
)
 
(50.2
)

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Table of Contents         

 
As Originally Reported
 
Effect of Change
 
As Adjusted
 
 
 
 
 
 
Condensed consolidated statement of cash flows for the nine months ended September 30, 2017:
 
 
 
 
 
Net income
$
166.4

 
$
66.0

 
$
232.4

Deferred income taxes
(36.1
)
 
41.0

 
4.9

Changes in working capital
(44.1
)
 
(112.1
)
 
(156.2
)
Other operating items, net
(1.6
)
 
5.1

 
3.5

(a)
Cost of products sold as originally reported reflects the change in presentation of pension and OPEB (income) expense further described in Note 1.


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Table of Contents         

The following table shows the effects of the change in accounting principle from LIFO to average cost as of September 30, 2018 and for the three and nine months ended September 30, 2018:

As Computed under LIFO
 
As Reported under Average Cost
 
Effect of Change
Condensed consolidated statement of operations for the three months ended September 30, 2018:
 
 
 
 
 
Cost of products sold
$
1,499.7

 
$
1,486.2

 
$
(13.5
)
Income tax expense (benefit)
(1.9
)
 
1.4

 
3.3

Net income
74.7

 
84.9

 
10.2

Net income attributable to AK Steel Holding Corporation
57.0

 
67.2

 
10.2

Net income per share attributable to AK Steel Holding Corporation common stockholders:
 
 
 
 
 
Basic
$
0.18

 
$
0.21

 
$
0.03

Diluted
0.18

 
0.21

 
0.03

 
 
 
 
 
 
Condensed consolidated statement of operations for the nine months ended September 30, 2018:
 
 
 
 
 
Cost of products sold
$
4,504.8

 
$
4,462.6

 
$
(42.2
)
Income tax expense (benefit)
(13.9
)
 
(4.0
)
 
9.9

Net income
169.7

 
202.0

 
32.3

Net income attributable to AK Steel Holding Corporation
120.2

 
152.5