AK Steel Holding (AKS)

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with the Middletown Works retirees, and in a range of $23.0 to $110.1 after reflecting that Settlement, in each of the next 30 years. The total projected
future benefit obligation of the Company with respect to payments for healthcare benefits is included in “Pension and other postretirement benefit obligations” in the Company’s consolidated financial statements. The net amount
recognized by the Company as of the end of 2007 for future payment of such healthcare benefit obligations was nearly $2.0 billion.

SIZE="2">Accounting for retiree healthcare benefits requires the use of actuarial methods and assumptions, including assumptions about current employees’ future retirement dates, the anticipated mortality rate of retirees, anticipated future
increases in healthcare costs and the obligation of the Company under future collective bargaining agreements with respect to healthcare benefits for retirees. Changing any of these assumptions could have a material impact on the calculation of the
Company’s total obligation for future healthcare benefits. For example, the Company’s calculation of its future retiree healthcare benefit obligation as of the end of 2007 assumed that the Company would continue to provide healthcare
benefits to current and future retirees. If this assumption is altered, it could have a material effect on the calculation of the Company’s total future retiree healthcare benefit obligation. This assumption could be altered as a result of one
or more of the following developments.

First, retirees could consent to a change in the current level of healthcare benefits provided to
them. Second, in certain instances, the union which represented a particular group of retirees when they were employed by the Company could, in the course of negotiations with the Company, accept such a change. Third, in certain instances, at or
following the expiration of a collective bargaining agreement which affects the Company’s obligation to provide healthcare benefits to retired employees, the Company could take action to modify or terminate the benefits provided to those
retirees without the agreement of those retirees or the union, subject to the right of the union subsequently to bargain to alter or reverse such action by the Company. The precise circumstances under which retiree healthcare benefits may be altered
unilaterally or by agreement with a particular union vary depending on the terms of the relevant collective bargaining agreement. Some of these developments already have occurred and either already have impacted, or may impact in the future, the
Company’s retiree healthcare benefit obligation. The most significant of these developments are summarized below.

On
November 20, 2006, members of the United Steelworkers (USW) ratified a new 51-month labor agreement covering approximately 300 hourly production and maintenance employees at the Company’s Mansfield Works. Under the agreement, the existing
defined benefit pension plan was “locked and frozen” as of February 28, 2007 with subsequent contributions to the Steelworker’s Pension Trust fund. As a result, the Company was required to recognize the past service pension
expense that previously would have been amortized. The new contract expires on March 31, 2011.

On March 14, 2007, members of the
International Association of Machinists and Aerospace Workers (“IAM”) ratified a new 54-month labor agreement covering about 1,700 hourly production and maintenance employees at the Company’s Middletown Works. Under the agreement, the
existing defined benefit pension plan was “locked and frozen” as of May 26, 2007 with subsequent contributions to the IAM National Pension Fund. As a result, the Company was required to recognize the past service pension expense that
previously would have been amortized. The new contract expires on September 15, 2011.

As a result of the ratification of the new
labor contracts at Mansfield Works and Middletown Works, the Company recognized curtailment charges in the first and second quarters of 2007 of $15.1 and $24.7, respectively. Under these agreements, the existing defined benefit pension plan at each
facility was “locked and frozen” with subsequent Company contributions being made to multiemployer pension trusts.

Since late
2003, the Company has negotiated new labor agreements with the various unions at all of its represented facilities. These new labor agreements, along with the Company’s overall efforts to reduce its total employment costs, have enabled the
Company to reduce its pre-tax labor costs by approximately $225.0 on an

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annualized basis. In addition, during this time period the new labor contracts and the Company’s overall actions to reduce employment costs have
resulted in a significant reduction in the Company’s OPEB liability. Under GAAP, the Company may not recognize this benefit immediately. Rather, it is required to amortize the net benefits of this reduction into future years. The Company thus
will be able to recognize the benefit of this net reduction annually through its earnings in the future as a reduction in its other postretirement benefit costs.

FACE="Times New Roman" SIZE="2">On October 8, 2007, the Company announced that it had reached a settlement (the “Settlement”) of the claims in litigation filed against the Company by retirees of its Middletown Works relating to their
retiree health and welfare benefits. The Settlement was approved by the federal district court on February 21, 2008 and is expected to reduce the Company’s total OPEB liability of approximately $2.0 billion as of September 30, 2007 by
approximately $1.0 billion. Under the terms of the Settlement, the Company will make payments totaling $663.0 to a Voluntary Employees Beneficiary Association which will assume all future responsibility for health and welfare claims by the affected
retirees. If ultimately approved by the court, the Settlement not only will reduce the Company’s OPEB liability by approximately fifty percent, but also will reduce the Company’s ongoing annual healthcare expense. For a more detailed
description of the Settlement, see the discussion in the Legal Proceedings section above.