Jan. 24, 2007 — AK Steel reported a net loss of 49.3 million on record net sales of $1,582.2 million for the fourth quarter of 2006. The loss includes a "corridor" charge of $133.2 million for non-cash actuarial losses related to the company's retiree health care benefit plans, and results from the company's unique benefit plan accounting requirements. Excluding the charge, the adjusted income before income taxes was $34.5 million.

Fourth Quarter Results — The $49.3 million net loss(- $0.45 per common share) compares to a net loss of $41.5 million ($0.38 per share) in the fourth quarter of 2005. Record net sales of $1,582.2 million compare to net sales of $1,377.0 million for the fourth quarter of 2005.

The company said that its average selling price was a record $1,041 per ton, a 21% increase from the year-ago period. AK Steel said that its adjusted operating profit for the 2006 fourth-quarter, excluding the corridor charge, was $51.3 million ($34 per ton), compared to adjusted operating profit of $83.5 million ($52 per ton) for the 2005 fourth-quarter, which excludes corridor, asset impairment and curtailment charges. Including the charges, the company reported an operating loss of $81.9 million and $49.2 million in the fourth quarter of 2006 and 2005, respectively.

Full-Year Results — Adjusted income before income taxes of $145.9 million adjusted income excludes the $133.2-million fourth-quarter corridor charge and $15.8 million of one-time charges in the third quarter related to implementation of new labor agreements at the company's Butler and Zanesville plants. This compares to adjusted income before income taxes of $170.7 million in 2005, which excluded a fourth-quarter retiree health care corridor charge, as well as pension curtailment and asset impairment charges. Including the charges, AK Steel reported net income of $12.0 million ($0.11 per share) for 2006, compared to a net loss of $2.3 million ($0.02 per share) for 2005.

Net sales were a record $6,069.0 million on shipments of 6,168,600 tons, compared to revenues of $5,647.4 million and shipments of 6,418,200 tons for 2005. AK Steel's average selling price in 2006 rose to a record $984 per ton, a 12% increase over its 2005 average of $879 per ton.

Excluding the charges noted above, the company had an adjusted operating profit for 2006 of $214.6 million ($35 per ton), compared to its 2005 adjusted operating profit of $245.8 million ($38 per ton). Including those charges for both years, 2006 operating profit was $65.6 million ($11 per ton) for 2006, compared to 2005 operating profit of $113.1 million ($18 per ton). AK Steel said that it ended 2006 with a cash balance of $519.4 million.

Comments — "2006 was a defining year for AK Steel, a year in which we had to significantly improve our competitiveness in order to keep moving toward our ultimate goal of sustained profitability," said James L. Wainscott, Chairman, President and CEO. "I am pleased to report that our employees responded to that challenge in every way, with record performances across the board."

First-Quarter 2007 Outlook — AK Steel said it expects shipments in the first quarter of 2007 to be comparable to the 2006 fourth-quarter level. The company anticipates that its first-quarter 2007 average per-ton selling prices will be 4% to 5% higher than in the fourth quarter of 2006. Higher per-ton selling prices are expected to be partially offset by higher raw material costs, compared to fourth- quarter 2006 levels. The company said it expects to generate an operating profit in the first quarter of 2007 of between $60 and $65 per ton.

Headquartered in Middletown, Ohio, AK Steel produces flat-rolled carbon, stainless and electrical steels, as well as tubular steel products for customers in the automotive, appliance, construction and manufacturing markets.