(Dollars in millions, except per share and per ton amounts or as otherwise specifically noted)

AK Steel Holding Corporation (“AK Holding”) is a corporationwas formed under the laws of Delaware in 1993 and1993. Through its wholly owned subsidiary, AK Steel Corporation (“AK Steel”), it is an integrateda leading producer of flat-rolled carbon, stainless and electrical steelssteel products, primarily for the automotive, infrastructure and tubularmanufacturing, electrical power generation and distribution markets. AK Holding’s subsidiaries also provide customer solutions with carbon and stainless steel tubing products, through its wholly-owned subsidiary, AK Steel Corporation (“AK Steel”).tool design, hot- and cold-stamped steel components and assemblies. AK Steel is the successor through merger in 1999 to Armco Inc., which was formedand has built upon Armco’s rich history of creating leading-edge steel innovations since its formation in 1900.1899. Unless the context indicates otherwise, references to “we,” “us” and “our” refer to AK Holding and its subsidiaries.

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. Our goal is to carry appropriate inventory levels that will meet our customers’ needs,We are particularly focused on AHSS for the “just-in-time” delivery requirements necessaryautomotive market, and we produce virtually every AHSS grade that our customers currently need. Our automotive customers have incorporated into their products our AHSS grades, such as Dual Phase 780 and 980, for both stamped and roll-formed parts. In addition, we are currently the only domestic steel company that is marketing a groundbreaking third-generation AHSS product, which has unparalleled strength and formability attributes that may give automotive manufacturers unique opportunities for designing future vehicle platforms.

Looking forward, we have developed the next generation of AHSS with even greater strength and formability, and we believe that our addition of Precision Partners dramatically accelerates our efforts to service the demanding automotive market. Our strategy is to target markets fordrive adoption of our innovative steel products by automotive manufacturers and their Tier 1 suppliers. Our research and technical experts, along with Precision Partners’ engineers, have already begun numerous collaboration projects aimed at achieving this goal, as Precision Partners’ expertise in tool design and stamping capabilities has allowed us to deliver to customers fully formed prototypes of automotive components utilizing our innovative steel products. As such, we are now able to provide true component solutions through prototype automotive parts, rather than attempting to showcase our advanced steels to customers through computer models and flat-rolled steel samples, as in the past. This approach has and will continue to demonstrate to customers that deliver higher margins, where possible,they can significantly lightweight automotive parts on an accelerated timeline and reduce amounts sold into the lower margin steel spot markets, which has experienced substantial volatility in pricing over the past several years primarily as a result of the impact of low-priced imports of foreign steel. In late 2015, we temporarily idled the blast furnace and steelmaking operations (the “Hot End”) atcost-effective manner by using our Ashland Works in Kentucky. The Ashland Works Hot End remains temporarily idled due to continuing uncertaintyhigh-strength, highly formable grades of steel market conditions (includingin place of traditional lower-strength grades. In addition, these collaborative projects are enhancing Precision Partners’ knowledge and experience in tool design and build, and stamping of new, advanced grades of steel, enabling it to provide expert solutions to automotive customers now and in the longer-term outlook for import levels) and our ability to earn an appropriate return on its operations. In 2016, we increased capacity utilization of our carbon steelmaking operations at our Middletown Works in Ohio (“Middletown Works”) and Dearborn Works, and we reduced our production of commodity carbon, electrical and stainless steel products. Also in 2016, we enhanced asset and resource utilization to reduce operating costs and modified production capacity for higher margin carbon, electrical and stainless steel grades at all locations. See Automotive Market and Carbon Steel Spot Market for more information.

We sellcontinue to develop innovative press-hardenable steel (“PHS”) products for hot-stamping applications that achieve lightweighting solutions for our electricalcustomers. Our ULTRALUME® PHS is an aluminized Type 1 heat-treatable boron steel products in the infrastructure and manufacturing market, primarilyour customers depend on when they require high-strength parts with complex geometries. These steels enable automotive manufacturers to manufacturers of power transmission and distribution transformers, both for new and replacement installation. We also sell electrical steel products to manufacturers ofreduce vehicle

We continue to develop new and improved specialty stainless and electrical motorssteels for expanding applications in the automotive, infrastructure and generators.manufacturing, and other markets. We targetare working with our automotive customers and their exhaust system suppliers to develop new stainless steels for exhaust systems that must support engines running at higher temperatures that are needed to achieve increased fuel economy. Our new steels’ capabilities demonstrate improved thermal fatigue and corrosion resistance. We are also developing innovative solutions for customers in other markets. For example, we are developing steels with specialized finishes and colors to provide differentiation and cost savings solutions for our customers in the architectural and appliance markets.

In 2016, housing startsMay 2017, the U.S. Department of Energy (“DOE”) selected AK Steel to receive an award under the Advanced Manufacturing Office’s Next Generation Electric Machines program to develop the next generation of advanced NOES for motors used in a wide variety of industrial and automotive applications. The three-year project will be conducted in collaboration with the United States improved approximately 5% over 2015, which generally increasedDOE, Oak Ridge National Laboratory’s Power Electronics and Electric Machinery Research Center, and Regal Beloit Corporation, a leading manufacturer of electric motors and motion control products. We will receive up to $1.8 to jointly develop an innovative motor design with high-alloy NOES with a goal to achieve an efficiency improvement of more than 30% when compared to existing motor designs. While the demandprogram targets a vast array of industrial motors, pumps and generators, we intend to use the research from this project in NOES applications for products from power transmission and distribution transformer manufacturers, to whomH/EVs since they represent one of the fastest growing markets for NOES. This could be a transformational step forward if we sell electrical steels. Toare successful in this project as it would provide a lesser extent, we also experienced higher demand for stainless and carbon steels from appliance manufacturers, manufacturers of heating and air conditioning equipment and others. We saw improvements in higher value electrical steel pricing and demand during 2016, but this was partly offset by lower prices in and lower shipmentssubstantial enhancement to the electrical steel spot markets as a resultrange of a high level of commodity steel imports into the United States. Electrical steel sales and shipments to customers in foreign countries also have been negatively affected by excess global production capacity and what we believe to be preferential trade practices by certain countries that make our products more expensive to sell in those countries.battery electric vehicles.

We also attempt to reduce the risk of future supply shortages and price volatility in other ways. If multi-year contracts are available in the marketplace, we may use these contracts to secure enough supply to satisfy our key raw material needs. When multi-year contracts are not available, or are not available on acceptable terms, we enter into annual contracts or make spot purchases to meetpurchase the remainder of our raw materials needs.needs under annual contracts or make spot purchases. We also regularly evaluate using alternative sources and substitute materials.

We principally compete with domestic and foreign producers of flat-rolled carbon, stainless and electrical steel, carbon and stainless tubular product producers (both integrated steel producers and mini-mill producers) and producers of plastics,products, aluminum, carbon fiber, concrete and other materials that may be used as a substitute for flat-rolled steels in manufactured products. Mini-mills generally offerWith the acquisition of Precision Partners, we also compete against other tooling and stamping companies in a narrower range of products than integrated steel mills, but have been expanding their product capabilities in recent years. In addition, mini-mills have some competitive cost advantages as a result of their different production processes and lower labor costs associated with what are often non-union workforces. highly fragmented market.

Price, quality, on-time delivery, customer service and product innovation are the primary competitive factors in the steel industry and vary in importance according to the product category and customer requirements.

Mini-mills generally offer a narrower range of products than aluminum.integrated steel mills, but have been expanding their product capabilities in recent years. In addition, mini-mills have some competitive cost advantages as a result of their different production processes and lower labor costs associated with what are often non-union workforces. However, mini-mills do not have the equipment capabilities to produce all of the products that we offer, nor do they possess our depth of research and development. For example, mini-mills do not strategically target demanding automotive sheet applications for the exposed panels of vehicles, which is one of the technically challenging products in which we specialize.

Domestic steel producers, including us, face significant competition from foreign producers. For many reasons, these foreign producers often are able to sell products in the United StatesU.S. at prices substantially lower than domestic producers. Depending on the country of production, these reasons may include generous government subsidies; lower labor, raw material, energy and regulatory costs; less stringent environmental regulations; less stringent safety requirements; the maintenance of artificially low exchange rates against the U.S. dollar; and preferential trade practices in their home countries. In recent years, the annual level of imports of foreign steel into the United States has increased over historical levels and is affected to varying degrees by the relative level of overcapacity of steel production in thoseChina and other countries, the strength of demand for steel outside the United StatesU.S. and the relative strength or weakness of the U.S. dollar against various foreign currencies.

offering voluntary lump-sum settlements to pension plan participants, lowering retiree benefit costs for salaried employees, and transferring pension obligations to a highly rated insurance company. These actions have increasednot only reduced some of the risks associated with our abilitypension fund obligations, but more importantly have reduced our risk exposure to compete in the highly competitive global steel market over the long term and wefinancial markets that drive pension funding requirements. We continue to actively seek opportunities to reduce pension and healthcare benefits costs.

The following table provides the name, age and principal position of each of our executive officers as of February 15, 2017:9, 2018:

We caution readers that our business activities involve risks and uncertainties that could cause actual results to differ materially from those we currently expect. While the items listed below represent the most significant risks to us, we regularly monitor and report risks to the Board of Directors through a formal Total Enterprise Risk Management program.

pricing. It is impossible to predict whether the domestic and/or global economies or industry sectors of those economies that are key to our sales will continue to improve and generate enough demand to absorb some of the existing excess

as the first one sold, which means that our inventory value can reflect earlier input costs that do not reflect current input costs. The impact of LIFO accounting may be particularly significant in period-to-period comparisons.

the use of non-steel materials. For example, one major automotive company previously elected to substitute aluminum for carbon steel in the body of some of its vehicles. Although automotive manufacturers have incorporated aluminum and other competing materials at a much slower rate than some experts previously expected, if demand for steel from one or more of our major automotive customers were to significantly decline because of increased use of aluminum or other competing materials in substitution for steel, it likely would negatively affect our sales, financial results and cash flows.

control, primarily changes in interest rates, performance of the financial markets, and mortality and retirement projections. A corridor adjustment, if required after a re-measurement of our pension obligations, historically has been recorded in the fourth quarter of the year, though one may be recorded at any time if an interim remeasurement occurs. A corridor adjustment can have a significant impact on our financial statements in the periodwhen it is recorded,occurs, although theits immediate recognition of the adjustment in that period reduces the impact of unrealized gains or losses on future periods. The recognition of aA corridor charge does not have any immediate impact on our cash flows. We also contribute to multiemployer pension plans according to collective bargaining agreements that cover certain union-represented employees. Participating in these multiemployer plans exposes us to potential liabilities if the multiemployer plan is unable to pay its unfunded obligations or we choose to stop participating in the plan.

products that can command higher prices from customers. If one or more of these key cost-savings or margin enhancement projects are unsuccessful, or are significantly less effective in achieving the level and timing of combined cost savings or margin enhancement than we anticipated, or if we do not achieve results as quickly as anticipated, our financial results and cash flows could be adversely impacted.

None.

We lease a buildingour corporate headquarters in West Chester, Ohio, which we use as our corporate headquarters. The initial term of the building lease expires in 2019 and there arethrough 2029, with two five-year options to extend the lease. We lease a building forown our new Research and Innovation Center located in Middletown, Ohio, for an initial term expiring in 2034.Ohio. We also lease an administration building located in Dearborn, Michigan.

Our operations consist primarily of 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.the United States. We own all of the domestic facilitiesour steelmaking and lease the Mexicanfinishing facilities. In addition, we operate two coke plants, a metallurgical coal production facility, three tube manufacturing plant.plants and eight tooling and stamping operations in the United States, Canada and Mexico.

Ashland Works is located in Ashland, Kentucky, and produces carbon steel. It consists of a blast furnace, basic oxygen furnaces and continuous caster for the production of carbon steel and aits coating line that helps to complete the finishing operation of material processed at Middletown Works. In December 2015, we temporarily idled the Hot End, which includes thea blast furnace, basic oxygen furnaces and continuous caster, in response to excess global supply and the increase in low-priced imports into the United States. The Ashland Works Hot End remains temporarily idled. We elected not to idle the coating line at Ashland Works, which principally finishes steel for the automotive market.

Butler Works is located in Butler, Pennsylvania, and produces stainless, electrical and carbon steel. Melting takes place in a highly-efficient electric arc furnace that feeds an argon-oxygen decarburization unit for the specialty steels. A ladle metallurgy furnace feeds

two double-strand continuous casters. Butler Works also includes a hot rolling mill, annealing and pickling units and two tandem cold rolling mills. It also has various intermediate and finishing operations for both stainless and electrical steels.

Coshocton Works is located in Coshocton, Ohio, and consists of a stainless steel finishing plant containing two Sendzimer mills and two Z-high mills for cold reduction, four annealing and pickling lines, nine bell annealing furnaces, four hydrogen annealing furnaces, two bright annealing lines and other processing equipment, including temper rolling, slitting and packaging facilities.

Dearborn Works is located in Dearborn, Michigan and its operations include carbon steel melting, casting, hot and cold rolling and finishing operations for carbon steel. It consists of a blast furnace, basic oxygen furnaces, two ladle metallurgy furnaces, a vacuum degasser and two slab casters. Dearborn Works also has a hot rolling mill, a pickle line/tandem cold mill, batch anneal shops, a temper mill and a hot-dip galvanizing line for finishing products.

Mansfield Works is located in Mansfield, Ohio, and produces stainless steel. Operations include a melt shop with two electric arc furnaces, a ladle metallurgy furnace, an argon-oxygen decarburization unit, a thin-slab continuous caster and a hot rolling mill.

Middletown Works is located in Middletown, Ohio. ItOhio, and melts carbon steel and processes carbon and stainless steel. It consists of a coke facility, blast furnace, basic oxygen furnaces and continuous caster for the production of carbon steel. Middletown Works also has a hot rolling mill, cold rolling mill, two pickling lines, four annealing facilities, two temper mills and three coating lines for finishing products.

Rockport Works is located near Rockport, Indiana, and consists of a carbon and stainless steel finishing plant containing a continuous cold rolling mill, a continuous hot-dip galvanizing and galvannealing line, a continuous carbon and stainless steel pickling line, a continuous stainless steel annealing and pickling line, hydrogen annealing facilities and a temper mill.

Zanesville Works is located in Zanesville, Ohio, and consists of a finishing plant for some of the stainless and electrical steel produced at Butler Works and Mansfield Works and has a Sendzimer cold rolling mill, annealing and pickling lines, high temperaturehigh-temperature box anneal and other decarburization and coating units.

AK Tube, LLC (“AK Tube”), a subsidiary, hasowns a plant in Walbridge, Ohio, which operates six electric resistance welderwelded tube mills and a slitter. It also has a plant on leased property in Columbus, Indiana, which operates seven electric resistance welderwelded tube mills, two high-speed cold saws and one laser welder tube mill. A leased facility in Franklin, Indiana operates a high-capacity, high-speed cold saw and six nick-and-shear cutting machines.machine. AK Tube’s leased plant in Queretaro, Mexico, operates anone electric resistance welderwelded tube mill.mill and one high-speed cold saw.

AK Coal, a subsidiary, produces metallurgical coal from reserves in Somerset County, Pennsylvania.

The operation of AK Coal’s North Fork Mine and Coal Innovations, LLC coal wash plant (collectively, the “AK Coal Operations”) are subject to regulation by the Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977, as amended (“Mine Act”). MSHA inspects mining and processing operations, such as the AK Coal Operations, on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Exhibit 95.1 to this Annual Report presents citations and orders from MSHA and other regulatory matters required to be disclosed by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise under this Item 4.

AK Holding’s common stock has been listed on the New York Stock Exchange since April 5, 1995 (symbol: AKS). The reported high and low sales prices of the common stock for each quarter are presented below:

As of February 15, 2017,9, 2018, there were 314,789,404315,283,596 shares of common stock outstanding and held of record by 3,7853,629 stockholders. The closing stock price on February 15, 2017,9, 2018, was $8.49$4.50 per share. Because depositories, brokers and other nominees held many of these shares, the number of record holders is not representative of the number of beneficial holders. There were no unregistered sales of equity securities in the year ended December 31, 2016.2017.

Although we have elected to suspend ourdo not currently pay a dividend, program, no covenant restrictions currently would restrict our ability to declare and pay a dividend to our stockholders. Our $1,500.0 asset-backed revolving credit facility (the “Credit Facility”) contains certain restrictive covenants which could, under certain circumstances, restrict the dividend payments, but none of those circumstances currently apply. Under these covenants, dividendsDividends are permitted as long asif no default or event of default exists and (i) availability under the Credit Facility exceeds $337.520% of the lesser of the Credit Facility commitment or eligible collateral after advance rates or (ii) availability exceeds $262.515% of the lesser of the Credit Facility commitment or eligible collateral after advance rates and we meet a fixed charge coverage ratio of one to one as of the most recently ended fiscal quarter. At December 31, 2017, the availability under the Credit Facility significantly exceeds these amounts. If we cannot meet either of these thresholds, dividend paymentsannual dividends would be limited to $12.0 annually. At December 31, 2016, the availability undergreater of $18.0 or 0.5% of consolidated total assets, with additional dividends permitted equal to the greater of $25.0 or 0.7% of consolidated total assets in aggregate over the life of the Credit Facility significantly exceeded $337.5.

The following graph compares cumulative total stockholder return on AK Holding’s common stock for the five-year period from January 1, 20122013 through December 31, 2016,2017, with the cumulative total return for the same period of (i) the Standard & Poor’s Small Cap 600 Stock Index, and (ii) the New York Stock Exchange Arca Steel Index. These comparisons assume an investment of $100 at the beginning of the period and reinvestment of dividends.

We are the only steelmaker in the United States that can produce in all three major categoriesa leading producer of flat-rolled steels— carbon, stainless and electrical. In addition, we areelectrical steel products, primarily for the only domestic producer operating both blast furnacesautomotive, infrastructure and electric arc furnaces, which provides usmanufacturing, electrical power generation and distribution markets. We leverage our advanced research and development and operational flexibilityexcellence to specialize in technically challenging steel products and the opportunity to innovate across markets and within our product portfolios.portfolios to add value to our steel solutions. We operate 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 plantare the only steelmaker in Mexico. These operationsNorth America that can produce all three major categories of flat-rolled steels—namely carbon, steels, including premium-quality coated, cold-rolled and hot-rolled carbon steel products, and specialty stainless and electrical steels thatelectrical. In addition, through our subsidiaries, we sell in sheet and strip form, as well asprovide customer solutions with carbon and stainless steel thattubing products, advanced-engineered solutions, tool design and build, hot- and cold-stamped components and complex assemblies.

In 2016, we finish into welded steel tubing.began the process to improve our product mix, deemphasize commodity products, enhance our operational footprint and strengthen our balance sheet, and we continued to seek ways to enhance our margins in 2017. Product innovation has been a key tenet of our long-term strategy to differentiate us from our competitors. Our engineers and researchers continue to explore new solutions to serve our product development goals and operational challenges. We sell these products toexpanded our customers in three markets: (i) automotive; (ii) infrastructure and manufacturing; and (iii) distributors and converters markets. We sellgrowth platform by launching our new NEXMET family of AHSS coated carbon steel products principallyproducts. We began to North American customers and electrical and stainlessproduce our breakthrough NEXMET 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.from a new, state-of-the-art continuous galvanizing line at our Dearborn Works. In addition, we operate Mexican and European trading companies that buy and sell steel and steel products and other materials.

We remain committed to safely operatingare known throughout the steel industry for our facilitiesoperational excellence. During 2017, we enhanced our core steelmaking business by completing major investments at our Middletown Works blast furnace, melt shop and manufacturingelectrogalvanizing line. We also upgraded the melt shop and invested in new caster technology at our Mansfield Works. Because we produce technically challenging steels for customers who demand the highest quality steelsproducts on a just-in-time basis, the stability and dependability of our operations is paramount to our business model.

To give us additional flexibility to invest in an environmentally responsible manner. We experienced another year of outstanding safety performance in 2016 andstrategic initiatives, we continued to lead the steel industryimprove our capital structure in OSHA-recordable safety performance2017 by a wide margin. Our focusextending maturities and reducing interest rates and costs of our debt obligations and de-risking our balance sheet. This included refinancing debt at lower rates, eliminating certain financing obligations and extending and spreading out debt maturities.

We also made substantial progressAverage selling price per flat-rolled steel ton increased by 7% in strengthening our balance sheet during2017 from 2016, primarily due to higher prices for automotive and carbon spot market sales, and higher surcharge revenue due to higher raw material costs, partially offset by lower shipments to the automotive market. Our 2017 results included a LIFO charge of $113.4, compared to a LIFO credit of $23.3 for 2016, reflecting the increases in raw material costs year over year. In addition, we completed major planned maintenance outages totaling $84.9 and $62.1 for 2017 and 2016. We nearly doubled our total liquidity atrecorded unrealized gains on iron ore derivatives of $31.6 in 2017, as compared to unrealized gains of $45.6 in 2016. Also included in 2017 results were $21.5 of expenses related to debt refinancing, with similar expenses of $9.4 in 2016.

SteelFlat-rolled steel shipments in 20162017 were 6,051,8005,596,200 tons, a 15%6% decrease from 2015compared to 2016 shipments of 7,089,2005,936,400 tons. The decrease in overall shipments was principally driven by our strategic decision to reduce commodity steel salesa 10% decline in shipments to the distributors and convertersautomotive market which declined by 41% from 2015.compared to 2016, primarily as a result of reduced North American light vehicle production. Shipments of flat-rolled steel by product category for 20162017 and 20152016, as a percent of total flat-rolled steel shipments, were as follows:

Net sales in 2017 were $6,080.5, a 3% increase from 2016 net sales of $5,882.5. Our average net selling price was $1,022 per flat-rolled steel ton in 2017, a 7% increase from the 2016 average net selling price of $955 per flat-rolled ton. The increases reflect our strategy of producing and selling higher-value carbon, stainless and electrical steels, higher prices on both automotive and spot market sales, and higher surcharges on specialty steel products. Revenues for 2017 also included net sales of Precision Partners following the August 4, 2017 acquisition. Net sales to customers outside the United States were $627.1, or 10% of total sales, for 2017, compared to $655.6, or 11% of total sales, for 2016, primarily due to lower international sales of carbon and electrical steel.

Net sales in 2016 were $5,882.5, a 12% decrease from 2015 net sales of $6,692.9. Our average selling price was $969 per net ton in 2016, a 3% increase from the 2015 average selling price of $942 per net ton. We received lower pricing in our automotive contracts in 2016, but the impact of better market conditions, reducing our participation in the commodity steel markets and capturing higher spot market pricing offset the automotive contract pricing declines. Our average selling price was $955 per net flat-rolled ton in 2016, a 3% increase from the 2015 average selling price of $929 per net flat-rolled ton. Net sales to customers outside the United States were $655.6, or 11% of total sales, for 2016, compared to $855.7, or 13% of total sales, for 2015 with the 2016 decrease primarily due to lower electrical steel shipments.

The following table shows the percentage of our net sales attributable to each of our markets:

Selling and administrative expense increased to $277.2 in 2016 from $261.9 in 2015. The increase was due primarily to an increase for employee incentive compensation as a result of meeting objectives under annual and long-term performance-based compensation plans, partially offset by cost reduction efforts achieved throughout 2016.

Depreciation expense increased slightly to $216.6 in 2016 from $216.0 in 2015.

Pension and OPEB income of $43.8 in 2016 decreased from income of $63.0 in 2015. The decrease in income was principally a result of lower pension assets and related expected returns on assets.

Operating profit for 2016 of $230.2 was higher than 2015 operating profit of $86.7. Included in the 2016 operating profit was the net pension/OPEB corridor charge of $43.1, the pension settlement charges of $25.0 and charges for the termination of the Magnetation pellet offtake agreement and related transportation costs of $69.5. Included in the 2015 operating profit was thea $28.1 charge to temporarily idle the Ashland Works Hot End and athe net pension/OPEB corridor charge of $131.2. Also included inwas operating profit wasfrom SunCoke Middletown’s operating profitMiddletown of $66.0 and $62.6 for 2016 and 2015.

Interest expense for 2016 decreased to $163.9 from $173.0 in 2015. The decrease was primarily as a result of lower average Credit Facility borrowings outstanding during 2016 as compared to 2015 due to the two successful equity offerings completed during 2016.

Other income (expense) was $4.9 of other expense for 2016 and other income of $1.4 for 2015. During 2016, we repurchased the $380.0 of senior secured notes due 2018 and an aggregate principal amount of $10.4 of senior notes due 2022. These 2016 debt transactions generated $9.4 of losses in other income (expense). During 2015, we repurchased an aggregate principal amount of $23.8 of senior notes duethe 2021 Notes in private, open market transactions and recognized related gains on the repurchases of $9.4. See Note 6 to the consolidated financial statements for further information on long-term debt financing. Other income (expense) included our share of Magnetation losses of $16.3 for 2015.

Net loss attributable to AK Holding in 2015 was $509.0, or $2.86 per diluted share. The net loss in 2015 included a pension corridor charge of $144.3 and an OPEB corridor credit of $13.1, netting to $131.2, or $0.74 per diluted share. Additionally, the net loss in 2015 included an impairment charge for the Magnetation investment of $256.3, or $1.44 per diluted share, and an impairment charge for the AFSG investment of $41.6, or $0.23 per diluted share, and a charge to temporarily idle the Ashland Works Hot End of $28.1, or $0.16 per diluted share. Excluding these charges, we had an adjusted net loss of $51.8, or $0.29 per diluted share, for 2015.

Adjusted EBITDA

In certain of our disclosures, we have reported adjusted EBITDA, adjusted EBITDA margin and adjusted net income (loss) that exclude the effects of noncontrolling interests, pension and OPEB net corridor and settlement charges, charges (credit) for the termination of aan iron ore pellet offtake agreement and related transportation costs, impairment charges for our investments in Magnetation and AFSG, and charges for temporarily idling facilities.facilities, an asset impairment charge and a charge for the change in U.S. income tax law. We believe that reporting adjusted net income (loss) attributable to AK Holding (as a total and on a per share basis) with these items excluded more clearly reflects our current operating results and provides investors with a better understanding of our overall financial performance.

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 report, we have made adjustments to EBITDA to also exclude the effect of noncontrolling interests, pension and OPEB net corridor and settlement charges, charges (credit) for the termination of aan iron ore pellet offtake agreement and related transportation costs, impairment charges for our investments in Magnetation and AFSG and charges for temporarily idling facilities.facilities, an asset impairment charge and a charge for the change in U.S. income tax law. 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, adjusted EBITDA margin and adjusted net income (loss) are not, however, intended as alternative measures of operating results or cash flow from operations as determined in accordance with GAAP and are 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 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 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/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), 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) and (iii) the net effect of the difference between the expected annualized return on assets of 7.25% ($129.4) and the actual annualized return on assets of 12.7% as of the October 2016 remeasurement ($228.8) (netting to a gain of $99.4). 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

Neither current shareholders nor potential investors in our securities should rely on adjusted EBITDA, adjusted EBITDA margin or adjusted net income (loss) as a substitute for any GAAP financial measure and we encourage investors and potential investors to review the following reconciliations of adjusted EBITDA and adjusted net income (loss).

The new $1,350.0 Credit Facility, which expires September 2022, is secured by the same classes of our principal initiatives for 2016 was to strengthen our balance sheet and we made significant progress on this goal. Through a combination of cash flow from operations and proceeds from two equity offerings, we significantly reduced our indebtedness duringassets as the year. We ended 2016 with substantially higher liquidity than the prior year, no borrowings under our revolvingold $1,500.0 credit facility, and improved credit metrics.

We believe that our current sources of liquidity will be adequate to meet our obligations for the foreseeable future. We expect to fund future liquidity requirements for items such as employee and retiree benefit obligations, scheduled debt maturities, debt redemptions and capital investments with internally-generated cash and other financing sources. Consolidated cash and cash equivalents of $173.2$38.0 at December 31, 2016,2017, includes $5.8$0.8 of cash and cash equivalents of consolidated variable interest entities, which are not available for our use. We may use the Credit Facility as necessary to fund requirements for working capital, capital investments and other general corporate purposes. Otherwise, we have no scheduled debt maturities until November 2019, when $150.0 of 5.0% Exchangeable Senior Notes (the “Exchangeable Notes”) are due. Our Credit Facility is scheduled to expire in September 2022 and any amounts outstanding under it at the time of expiration would need to be repaid or refinanced.

The Credit Facility and indentures governing our senior indebtedness and tax-exempt fixed-rate industrial revenue bonds (“IRBs”) (collectively, the “Notes”) and Credit Facility contain restrictions and covenants that may limit our operating flexibility. The Credit Facility contains commoncustomary restrictions, including limitations on, among other things, distributions and dividends, acquisitions and investments, dispositions, indebtedness, liens and affiliate transactions. Availability is calculated as the lesser of the total commitments under the Credit Facility or eligible collateral after advance rates, less outstanding revolver borrowings and letters of credit. The Credit Facility requires us to maintain a minimum fixed charge coverage ratio of one to one if availability under the Credit Facility is less than $150.0.$135.0. We are in compliance with restrictions and covenants under our Credit Facility and Notes and, in the absence of any significant and sustained material adverse events, expect that we will remain in compliance for the foreseeable future.

The indentures governing the Notes (other than the Exchangeable Notes) include customary restrictions on (a) the incurrence of additional debt by certain of our subsidiaries, (b) the incurrence of certain liens, (c) the amount of sale/leaseback transactions, and (d) our ability to merge or consolidate with other entities or to sell, lease or transfer all or substantially all of our assets to another entity. They also contain customary events of default. In addition, the indenture governing the 7.50% Senior Secured Notes due July 2023 includes covenants with customary restrictions on the use of proceeds from the sale of collateral. The indenture governing the Exchangeable Notes does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us.

We do not expect any of these restrictions to affect or limit our ability to conduct our business in the ordinary course. During 2016,2017, we were in compliance with all the terms and conditions of our debt agreements.

Cash used for capital investments in 20162017 totaled $127.6.$152.5. For 2017,2018, we expect to make capital investments of $130.0 to $150.0.$160.0. This amount could be adjusted based on changes in market conditions or operational needs. In the near-term, we expect to fund these investments from cash generated from operations or from borrowings from our Credit Facility. We currently anticipate that our normal, ongoing maintenance capital investments (i.e., excluding strategic investments and non-routine maintenance investments, such as blast furnace re-lines) will be at a similar level over the next few years.

In addition to actions taken in prior years to reduce the growth of employee benefit obligations, including freezing all benefits under our major pension plan, we have sought and will continue to actively seek options to de-risk our pension and OPEB obligations. During 2016, we purchased two non-participating annuity contracts with an insurance company and transferred to itActions taken in prior years include closing our pension obligations of $210.3 for certain retirees or their beneficiaries receiving pension payments. In total, we transferred the obligations for approximately 10,000 retirees or their beneficiaries to the insurance company in exchange for a similar amount of pension trust assets. In addition to reducing our costs to maintain and administer benefits, these annuity contract transactions help to lower our risk related to our pension obligations, including the risk of lower investment returns on pension trust assets and lower discount rates, which would increase long-term cash funding of the pension plan. We also amended themajor pension plan as of January 1, 2016, to allownew participants, freezing all new retirees to select a lump-sum payment option. During 2014, we provided a voluntary lump-sum settlement offer to terminated vested participants inbenefits under the pension plan and as a result reducedtransferring a portion of the pension obligation. Theobligations and related assets to an insurance company.

Long-term pension and OPEB obligations declined by approximately $200.0 in 2017, primarily due to achieving higher pension plan paid approximately $105.0 in December 2014 out ofasset returns than our expected return assumption, contributing $44.1 to the pension trust, assets to participants.

We provide healthcare benefits to a significant portion of our employees and retirees. OPEB benefits have been either eliminated for new employees or are subject to caps on the share of benefits we pay. Based on the assumptions used to value other postretirement benefits, primarily retiree healthcare and life insurance benefits, annual cash payments for these benefits are expected to be in a range that trends down from $40.0$38.8 in 20172018 to $11.6$10.1 over the next 30 years.

There were no material off-balance sheet arrangements as of December 31, 2016.2017.

We sell a significant portion of our flat-rolled carbon and stainless steel flat-rolled and tubular products directly to automotive manufacturers and tiertheir Tier 1 suppliers, as well as to distributors, service centers and converters who in some cases resell the products to the automotive industry. We concentrate our carbon and stainless sales on the automotive market because these customers demand steels that are difficult to make and require the highest quality standards, just-in-time delivery, collaborative technical and customer support, and innovative products. In addition, certain competitors do not have the capability to supply all of the products that we make for our automotive customers, such as steel for exposed automotive applications and the most advanced grades of AHSS. These exacting conditions for servicing the automotive market generally enable us to seek higher selling prices than sales of more commodity types of carbon and stainless steels to other markets. Because the automotive market is an important element of our business and growth strategy, North American light vehicle production has a significant impact on our total sales and shipments. In 2016, the North American automotive industry continued to show improvement over 2015, as light vehicle production topped 17.8declined slightly to approximately 17.1 million units, whichrepresenting a 3% decrease from the prior year, but the decline was a 2% increase from 2015. The continued strengthmore significant in the automotive marketUnited States and Canada, where most of our increased share of that market collectively increasedsteel is used. As a result, our sales andsteel shipments to that market in 2016. Light vehicle sales are projected to be flat or even contract slightly in 2017, but our objective is to deepen our penetration into the automotive market with our differentiated, high-value products.

Substantially all of Precision Partners’ revenue is from the aggregate volume of steel consumedautomotive market. Its revenue from stamped components in 2017 was also impacted by the automotive industry, and impact our share of that volume. To address this threat, we and others in the steel industry have been working to create new AHSS for vehicle designs, which will enable automotive manufacturers to achieve their desired lightweighting goals without converting to aluminum or other alternative materials. We are also developing leading-edge grades of AHSS for the exposed panels of vehicles, providing weight reduction levels that are similar to aluminum at a lower cost. We currently produce virtually every grade of AHSS used today in automotive designs and are developing the next generations of AHSS to provide even greater formability. In fact, we believe that we are currently the only domestic steel company that has produced a true third-generation AHSS product, which has groundbreaking attributes that may afford automotive manufacturers unique opportunities for designing future platforms of vehicles.

We intentionally and substantially reduced our sales and shipments of lower-margin carbon steel to the spot market in 2017 and 2016. In recent years, including most of 2015,Before 2016, a significant percentage of our sales and shipments of carbon steel were made into the domestic spot market. Generally, sales into the carbon steel spot market are sold at prevailing market prices, which can be highly volatile, and can be subject to intense competition from both low-cost domestic producers and cheap, unfairly traded foreign imports. Fluctuations in spot market prices have a direct effect on our results and are driven by factors mostly outside our control. In addition, the spot market price fluctuations do not always directly correlate with our raw material and energy costs and consequently we have limited ability to pass through increases in costs to customers absent increases in the market price.

Carbon steel imports into the domestic market peaked at the end of 2014, causing hot-rolled steel market prices to drop over 42% during 2015. We believe that this dramatic price decline was principally the result of a large increase in unfairly-traded imports of carbon steel that entered the U.S. supply chain during the second half of 2014 and much of 2015. In addition, we believe that weakness in the oil and gas markets due to the substantial decline in energy prices during 2015 encouraged our competitors to re-direct their production capacity to the carbon steel spot market, adding supply to that market and further lowering prices. In response to the challenges facing the carbon steel spot market, in late 2015 we implemented a strategy to reduce our exposure to that market. The most important action to implement this strategy was our decision to temporarily idle the Ashland Works Hot End, which allowed us

We have been increasing our investment in researchare a leading manufacturer of grain-oriented electrical steel (“GOES”) and innovation. One of our principal strategies is to invest our time and resources to produce differentiated products that allow us to move up the value chain and serve both the current needs of our customers and the challenges they will face in the future. Our automotive customers have incorporated into their products our AHSS grades, such as Dual Phase 780 and 980, for both stamped and roll-formed parts. Our ULTRALUME® Press Hardenable Steel is an aluminum-silicon alloy coated steel our customers depend on when they require high strength parts with complex geometries. Theseother electrical steels, which are partwe sell to customers primarily in North America and Europe. We have experienced a substantial decline in shipments to international markets due to global overcapacity and both direct and indirect effects of our AHSS portfolio, enable automotive manufacturers to reduce vehicle weight while continuing to keep pace with critical safety requirements.

We continue our developmentare also a leading manufacturer of new and improved products that exceed our customers’ exacting standards, focusingvalue-added stainless steel, primarily for the automotive market. Stainless steel is typically priced based on Next-Generation AHSSa system of surcharges to serve future automotive industry needs. Our goal isreflect changes in the cost of certain raw materials. Thus, while we expect revenues will generally offset changes in costs, there may be a timing lag from the change in costs in one period to ensure that our AHSS reduce the weight of automobile structural body components, while maintaining the strength characteristics valued by our customers. We are enabling our automotive customers to use our innovative steel products to help achieve vehicle weight savings for ambitious fuel efficiency standards while avoiding the significant capital costs to re-design production facilities that alternative materials require.

On April 19, 2017, the Commerce Department initiated an investigation pursuant to Section 232 of the Trade Expansion Act, as amended by the Trade Act of 1974 (“Section 232”), into whether imports of foreign steel into the U.S. pose a threat to U.S. national security. On January 11, 2018, the Commerce Department delivered a report to the President making recommendations as a result of its Section 232 investigation. This report has not been publicly released. Within 90 days of receiving the report, the President is expected to determine the nature and Next-Generation AHSS products.duration of any actions to be taken to ensure that imports of foreign steel will not threaten to impair U.S. national security. Such actions may include, without limitation, quotas, tariffs, fees or other measures as a means of adjusting the threatening imports. We anticipatestrongly support these actions and we have and will continue to cooperate with the investigation to the fullest extent.

On June 3, 2015, we, along with five other domestic producers, filed anti-dumping (“AD”) and countervailing duty (“CVD”) petitions against imports of corrosion-resistant (“Coated”) steel from China, India, Italy, South Korea and Taiwan. The petitions alleged that Next-Generationunfairly traded imports of Coated steel from those five countries are causing material injury to the domestic industry. On May 25, 2016, the Commerce Department announced final affirmative determinations that (a) imports of Coated steel from China, India, Italy, South Korea and 3^rd Gen AHSSTaiwan are being sold at less-than-fair-value and should be subject to final AD duties, and that (b) imports of Coated steel from China, India, Italy and South Korea are benefiting from government subsidies and should be subject to CVD duties. After correcting certain ministerial errors, the Commerce Department calculated final dumping and subsidy margins as follows:

On June 24, 2016, the ITC determined that the domestic steel industry is materially injured by reason of imports of Coated steel from China, India, Italy, South Korea and Taiwan that are sold in the United States at less than fair value and that such products are subsidized by the governments of China, India, Italy and South Korea. As a result of the Commerce Department’s and the ITC’s final determinations, importers are required to post cash deposits with the U.S. government on imports of Coated steel from China, India, Italy, South Korea and Taiwan at the above CVD margins and AD margins. AD and CVD measures remain in effect for a minimum of five years.

Several of the named countries have filed appeals of the final determinations on Coated steel with the Court of International Trade (“CIT”). On January 23, 2018, the CIT issued a decision reversing and remanding to the Commerce Department its final determination on AD margins for subject Taiwanese producers. The Commerce Department must issue a remand decision within 90 days of the CIT decision. We intend to request that the Commerce Department issue a remand decision that supports the AD duties previously applied against the Taiwanese producers. We will enable automotive manufacturerscontinue to stampvigorously oppose this and form auto parts using traditional manufacturing methods withoutall other appeals of the additional infrastructure investment that would be required for aluminum and other competing materials.final affirmative determinations on imports of Coated steel.

On August 11, 2015, we, along with five other domestic producers, filed AD petitions against imports of hybridhot-rolled steel from Australia, Brazil, Japan, the Netherlands, South Korea, Turkey and electrical vehicles;the United Kingdom, as well as CVD petitions against imports of hot-rolled steel from Brazil, South Korea and Turkey. The petitions alleged that unfairly traded imports of hot-rolled steel from those seven countries are causing material injury to the domestic industry. On August 5, 2016, the Commerce Department announced its final affirmative determinations that (a) imports of hot-rolled steel from Australia, Brazil, Japan, the Netherlands, South Korea, Turkey and the United Kingdom are being sold at less-than-fair-value and should be subject to final AD duties and that (b) imports of hot-rolled steel from Brazil and South Korea are benefiting from government subsidies and should be subject to CVD duties. After correcting certain ministerial errors, the Commerce Department calculated final dumping and subsidy margins as follows:

Over 100 membersIn 2016, we completed a strategic upgrade of our state-of-the-art hot-dip galvanizing line at our Dearborn Works. Enhanced furnace technology and modifications to the line’s configuration expanded innovation teamthe line’s capabilities to also operate as a continuous anneal line. As a result, we began producing both coated and cold-rolled Next-Generation AHSS products, including our recently introduced NEXMET products, on the same line as our existing steels.

Iron ore is one of the principal raw materials required for our steel manufacturing operations. We purchased approximately 6.96.3 million tons of iron ore pellets in 20162017 and expect to purchase a similar amountapproximately 6.5 million tons in 2017.2018. We make most of our purchases of iron ore at negotiated prices under multi-year agreements. For 2017,2018, we expect to purchase most of our iron ore from one supplier. The price we pay for iron ore is affected by a variety of factors under the terms of our contracts, including measures of general industrial inflation and steel prices and a variable-price mechanism that adjusts the annual average price we pay for iron ore based on reference to an iron ore index referred to as the “IODEX”. A change in one of more of the factors upon which our iron ore price is determined (whether that may be the IODEX, inflation, steel prices or other indices) typically affects to varying degrees the price we pay for iron ore. Thus, the actual impact on us from a change in these factors will vary depending on the percentage of the total iron ore we purchase under each contract and how much each factor is weighted for pricing under each contract. The prices we pay for iron ore are less dependent on the IODEX than in prior years as a result of our termination of the pellet offtake agreement with Magnetation and the pricing terms in our current iron ore supply agreements.related contracts. In addition, the total net cost we pay for iron ore is affected by our hedging activities, which are described below.

During late 2016, of thewe terminated our iron ore pellet offtake agreement with Magnetation, affected the accounting treatment ofwhich caused our existing iron ore derivatives contracts.to no longer meet the accounting criteria for hedge accounting treatment. As a result, of the termination, we were required to discontinue designatingnow account for those derivatives contracts as hedging instruments, and we immediately recognizeon a mark-to-market basis with immediate recognition of changes in the fair value of the derivative contracts in earnings when the change occurs, instead of when we recognize the underlying cost of iron ore, thus potentially increasing the volatility of our results of operations. See This volatility does not affect the ultimate gains or losses on the derivative contracts we will recognize in the financial statements, but only the timing of recognition.

Several labor agreements were ratified in Item 7A, Quantitative2017. In the first quarter of 2017, members of the United Steel Workers, Local 169, ratified a labor agreement covering approximately 305 hourly employees at Mansfield Works. The new agreement expires March 31, 2021. In the third quarter of 2017, members of the United Auto Workers, Local 3044, ratified a labor agreement covering approximately 330 hourly employees at our Rockport Works. The new agreement expires September 30, 2021. In the fourth quarter of 2017, members of the United Steel Workers, Local 1915, ratified a labor agreement covering approximately 90 hourly employees at the Walbridge, Ohio facility with our wholly-owned subsidiary AK Tube LLC. The new agreement is effective January 22, 2018 and Qualitative Disclosures about Market Risk for further information.expires January 22, 2021. In the fourth quarter of 2017, members of the United Auto Workers, Local 600, ratified a labor agreement covering approximately 1,170 hourly employees at our Dearborn Works. The new agreement expires July 31, 2021.

In addition, the possibility exists that further limitations on greenhouse gas emissions may be imposed in the United States in the future through some form of federally-enacted legislation or by additional regulations.regulations in the U.S. may further impose limitations on greenhouse gas emissions. In the past, bills have been introduced in the United States Congress that aim to limit carbon emissions over long periods from facilities that emit significant amounts of greenhouse gases. Such bills, if enacted, would apply to the steel industry, in general, and to us, in particular, because producing steel from elemental iron creates carbon dioxide, one of the targeted greenhouse gases. Although we and other steel producers in the United States are actively participating in research and development to develop technology, processes and approaches for lower-emission steelmaking processes, developingreducing greenhouse gas emissions, these technologiesdevelopments will take time and nobody canit is impossible to predict when or if, theyto what degree these efforts will be successful. To address this need for developing new technologies, approaches and processes, not just in the steel industry but elsewhere, some of the proposed legislative bills includehave been introduced in the past that included a system of carbon emission credits. Such credits which would be available to certain companies for a period, similar to the European Union’s existing “cap and trade” system. Each of these billsHowever, it is likely to be altered substantially if it moves through the legislative process, making it virtually impossible to forecast the provisions of any such final legislation and its effects on us.

If regulation or legislation regulatingto address climate change or regulate carbon emissions is enacted, however, it is reasonable to assume that the net financial impact on us will be negative, despite some potential beneficial aspectsbenefits discussed below. On balance, such regulation or legislation likely would cause us to incur increased energy, environmental and other costs to comply with the limitations that would be imposed on greenhouse gas emissions. For example, additional costs could take the form of new or retrofitted equipment or the development of new technologies (e.g., sequestration), to try to control or reduce greenhouse gas emissions.

The future enactment of climate control or greenhouse gas emissions legislation or regulation also could have some beneficial impact onproduce benefits for us which maythat would offset somewhat reduce the adverse effects noted above. For example, if climate control legislation or regulation continues to drive automotive manufacturers to meet higher fuel efficiency targets, we could benefit from increased sales of our broad portfolio of products: NOES for H/EVs, stainless steels needed for exhaust systems and other components for more efficient engines, and AHSS products to lightweight automobiles. Moreover, if climate change legislation provides further incentives for energy efficiency, up to certain levels, we could benefit from increased sales of our GOES products, which are among the most energy efficientenergy-efficient electrical steels in the world. We sell our electrical steels primarily to manufacturers of power transmission and distribution transformers and electrical motors and generators, the demand for which could grow in the eventif energy efficiency standards increase. Moreover, if climate control legislation or regulation continues to drive automotive manufacturers to meet higher fuel efficiency targets, we could benefit from increased sales of our broad portfolio of products: electrical steel for hybrid and electric vehicles, stainless steels needed for exhaust systems and other components for more efficient engines, and AHSS steels to lightweight the exterior and bodies of automobiles. In addition, climate control legislation may enhance sales of our products in different ways. For instance, if the legislation promotes the use of renewable energy technology, such as wind or solar technology, it could increase demand for our high-efficiency electrical steel products used in power transformers, which are needed to connect these new sources to the electricity grid.