Discounted Cash Flow (DCF) Analysis Unlevered

AK Steel Holding Corporation (AKS)

Basic Materials

Operating Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	5,570.40	6,505.67	6,693.03	5,882.51	6,080.75	6,818.34	7,132.67	7,461.48	7,805.46	8,165.29	8,541.71
Revenue (%)
EBITDA	279.63	277.79	-35.47	365.30	503.49	583.65	378.03	395.46	413.69	432.76	452.71
EBITDA (%)
EBIT	70.19	55.30	-272.41	130.59	253.57	331.37	110.56	115.65	120.98	126.56	132.40
EBIT (%)
Depreciation	209.45	222.49	236.93	234.71	249.92	252.28	267.48	279.81	292.70	306.20	320.31
Depreciation (%)

Balance Sheet Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Total Cash	45.12	70.26	56.89	172.95	37.70	48.41	83.45	87.30	91.32	95.53	99.94
Total Cash (%)
Account Receivables	525.29	644.06	445.09	441.78	518.08	635.47	610.56	638.70	668.15	698.95	731.17
Account Receivables (%)
Inventories	586.56	1,172.32	1,226.16	1,114.15	1,385.19	1,419.58	1,300.29	1,360.23	1,422.94	1,488.53	1,557.15
Inventories (%)
Accounts Payable	601.60	802.80	703.44	590.02	690.16	801.16	793.87	830.46	868.75	908.80	950.69
Accounts Payable (%)
Capital Expenditure	-63.50	-81.32	-99.06	-127.65	-152.63	-152.05	-128.39	-134.31	-140.50	-146.98	-153.75
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 3.18
Diluted Shares Outstanding	315.54
Cost of Debt
Tax Rate	-3.45
After-tax Cost of Debt	0.22
Risk-Free Rate
Market Risk Premium
Cost of Equity	24.62
Total Debt	1,993.70
Total Equity	1,003.42
Total Capital	2,997.12
Debt Weighting	66.52
Equity Weighting	33.48
Wacc

Build Up Free Cash

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	5,570.40	6,505.67	6,693.03	5,882.51	6,080.75	6,818.34	7,132.67	7,461.48	7,805.46	8,165.29	8,541.71
EBITDA	279.63	277.79	-35.47	365.30	503.49	583.65	378.03	395.46	413.69	432.76	452.71
EBIT	70.19	55.30	-272.41	130.59	253.57	331.37	110.56	115.65	120.98	126.56	132.40
Tax Rate	18.18%	-8.63%	-14.23%	50.15%	-2.17%	-3.45%	6.64%	6.64%	6.64%	6.64%	6.64%
EBIAT	57.43	60.07	-311.16	65.10	259.07	342.80	103.21	107.97	112.95	118.16	123.60
Depreciation	209.45	222.49	236.93	234.71	249.92	252.28	267.48	279.81	292.70	306.20	320.31
Accounts Receivable	-	-118.77	198.97	3.31	-76.30	-117.39	24.91	-28.15	-29.44	-30.80	-32.22
Inventories	-	-585.76	-53.84	112.02	-271.05	-34.38	119.29	-59.94	-62.71	-65.60	-68.62
Accounts Payable	-	201.20	-99.36	-113.42	100.15	110.99	-7.29	36.60	38.28	40.05	41.90
Capital Expenditure	-	17.82	17.74	28.59	24.98	-0.58	-23.66	5.92	6.19	6.48	6.78
UFCF	266.87	-202.95	-10.72	330.31	286.77	553.71	483.94	342.20	357.98	374.48	391.75
WACC
PV UFCF							433.33	274.37	257.00	240.73	225.49
SUM PV UFCF											1,468.83

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.68
Free cash flow (t + 1)	407.42
Terminal Value	5,304.89
Present Value of Terminal Value	3,053.51

Intrinsic Value

Enterprise Value	4,522.34
Net Debt	1,945.29
Equity Value	2,577.05
Shares Outstanding	315.54
Equity Value Per Share	8.17

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