WEST CHESTER, Ohio, Dec.15,2011 /PRNewswire/ --AK Steel (NYSE: AKS) today provided guidance for its fourth quarter 2011 financial results. Because of continued uncertainty and volatility with respect to economic conditions in the U.S. and other markets served by the company, AK Steel did not provide guidance for the fourth quarter concurrent with the release of its third quarter 2011 financial results on October 22, 2011. Instead, the company opted to provide guidance later in the fourth quarter when it had more information upon which to base its estimates.
AK Steel said it now expects shipments of approximately 1.4 million tons in the 2011 fourth quarter, or about 2% higher than the third quarter of 2011, and about 3% higher than in the year-ago fourth quarter. The company said it expects that its average per-ton selling price for the fourth quarter will be about 8% lower than for the third quarter of 2011, but about 5% higher than in the year-ago fourth quarter. The expected quarter-over-quarter selling price decrease is primarily due to lower spot market pricing and a lower value-added product mix for the fourth quarter of 2011.
The company said that it expects its operating costs to be lower for the fourth quarter of 2011 compared to the third quarter of 2011 due to the lower value-added product mix and the impact of LIFO, partially offset by lower operating rates. AK Steel now expects to record a LIFO credit for the fourth quarter of 2011. Previously, AK Steel said it believed the company would incur a LIFO charge in the fourth quarter of 2011. As a result of all these factors, AK Steel said it expects to incur an operating loss in a range between $40 and $45 per ton for the fourth quarter of 2011.
In addition, as noted in its Form 10-Q filed November 3, 2011, AK Steel said it may incur a significant non-cash charge in the fourth quarter related to its method of pension accounting. Under the method, the company must recognize, in the fourth quarter, any unrecognized actuarial gains or losses that exceed by 10% or more a "corridor" defined as the larger of projected pension obligations or plan assets. The company said, utilizing the current estimated discount rate and asset return rate as a basis for its calculation, it estimates that it will incur a non-cash, pre-tax corridor charge of approximately $250 million in the fourth quarter of 2011, which is not reflected in the above guidance.
AK Steel said, however, the actual measurement date for the corridor determination is December 31, 2011, and the final amount is subject to fluctuations in market performance and interest rate assumptions from now until that date.
AK Steel also said it expects to end the fourth quarter with approximately $600 million in liquidity, approximately the same level as at the end of the third quarter of 2011.
Safe Harbor Statement
The statements in this release with respect to future results reflect management's estimates and beliefs and are intended to be, and hereby are identified as "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "believes," "intends," "plans," "estimates" and other similar references to future periods typically identify such forward-looking statements. The company cautions readers that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently expected by management, including those risks and uncertainties discussed in the company's Annual Report on Form 10-K for the year ended December31,2010, as updated in our most recent Quarterly Report on Form 10-Q. Except as required by law, the company disclaims any obligation to update any forward-looking statements to reflect future developments or events.
AK Steel
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. The company employs about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate headquarters in West Chester, Ohio. Additional information about AK Steel is available on the company's web site at www.aksteel.com.
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 men and women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets. Additional information about AK Tube LLC is available on its web site at www.aktube.com.
AK Coal Resources, Inc., another wholly-owned subsidiary of AK Steel, owns or leases metallurgical coal reserves in Somerset County, PA. AK Steel also owns 49.9% of Magnetation LLC, a joint venture headquartered in Nashwauk, MN, which produces iron ore concentrate from previously mined ore reserves.
SOURCE AK Steel
