##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period
from to
 Commission File Number 000-50300
 WHEELING-PITTSBURGH CORPORATION
  DELAWARE
    
    55-0309927(State of Incorporation)
    
    (I.R.S. Employer Identification No.)1134 Market Street, Wheeling, WV
    
    26003(Address of principal executive offices)
    
    (Zip code)
   Common Stock, $0.01 par value per share
    
    Nasdaq Stock Market
  o þ
 o þ
 þ o
 o
  o þ o
 o þ
  Applicable only to registrants involved in bankruptcy proceedings during the preceding five years:
 þ o
  Documents Incorporated by Reference:




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##### 



TABLE OF CONTENTS
 PAGEPART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    16Item 1B.
    
    Unresolved Staff Comments
    
    
    22Item 2.
    
    Properties
    
    
    22Item 3.
    
    Legal Proceedings
    
    
    23Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    25PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    27Item 6.
    
    Selected Financial Data
    
    
    29Item 7.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    32Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    49Item 8.
    
    Financial Statements and Supplementary Data
    
    
    50Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
    
    
    89Item 9A.
    
    Controls and Procedures
    
    
    89Item 9B.
    
    Other Information
    
    
    89PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    90Item 11.
    
    Executive Compensation
    
    
    95Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    95Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    97Item 14.
    
    Principal Accounting Fees and Services
    
    
    99PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    100Signatures
    
    
    104EX-3.2EX-10.12.8EX-10.12.9EX-10.12.10EX-10.12.11EX-10.12.12EX-10.23EX-10.24EX-10.25EX-10.26EX-10.27EX-10.28EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I
 
 Item 1. BUSINESS
 Overview
 ®
   Recent Developments   Merger Proposals; Proxy Contest; Directors and Officers
   1




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New Management
 Production, Shipments and Pricing
   Raw Materials
 Insurance Recovery
 2




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Stock Unit Awards
 Net Operating Loss Carryover Limitation
 Termination of Stockholder Rights Plan
 Credit Arrangements and Covenant Compliance
    3




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Private Placement
 Business Strategy
 Electric arc furnace production
   4




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Strategic capital projects to improve productivity and cost position
 Capitalize on our excess coke capacity
   Achieve balanced exposure to spot and contract business
 Optimize the sale of downstream value-added products
 Steel Industry
 5




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Industry Consolidation
  Imports
  6




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Raw Material Pricing and Steel Prices
  Segments and Geographic Area
 Products and product mix
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Product Category:Higher value added products as a percentage of total shipments:Cold rolled products  trade
    
    
    5.8
    %
    
    
    6.5
    %
    
    
    8.0
    %Cold rolled products  Wheeling-Nisshin
    
    
    17.3
    %
    
    
    17.3
    %
    
    
    19.3
    %Coated products
    
    
    7.8
    %
    
    
    7.1
    %
    
    
    8.7
    %Tin mill products
    
    
    8.2
    %
    
    
    11.9
    %
    
    
    13.6
    %Fabricated products
    
    
    21.7
    %
    
    
    21.6
    %
    
    
    19.7
    %Higher value-added products
    
    
    60.8
    %
    
    
    64.4
    %
    
    
    69.3
    %Hot rolled products (including semi-finished products)
    
    
    39.2
    %
    
    
    35.6
    %
    
    
    30.7
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Average net sales per ton of steel products sold
    
    $
    730
    
    
    $
    686
    
    
    $
    661
 Hot Rolled Products
 Cold Rolled Products
 7




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##### Table of Contents



Coated Products
 Tin Mill Products
 Fabricated Products
 Construction Products
 Agricultural Products
 Specialty Products
  Year EndedDecember 31,2006
    
    
    2005
    
    
    2004(Dollars in thousands)Product:Hot rolled
    
    $
    541,794
    
    
    $
    420,745
    
    
    $
    365,089Cold rolled
    
    
    476,555
    
    
    
    471,235
    
    
    
    514,511Galvanized
    
    
    150,889
    
    
    
    109,264
    
    
    
    132,178Fabricated products
    
    
    507,087
    
    
    
    466,914
    
    
    
    375,090Ore, coke and coke by products
    
    
    79,471
    
    
    
    85,268
    
    
    
    9,074Conversion and other (1)
    
    
    14,969
    
    
    
    7,087
    
    
    
    9,852$
    1,770,765
    
    
    $
    1,560,513
    
    
    $
    1,405,794
 
 (1)
    
    Includes semi-finished, conversion and resale products. Customers and Markets
 8




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Percentage of Total Tons ShippedYear EndedDecember 31,2006
    
    
    2005 (2)
    
    
    2004 (2)Converters and processors (1)
    
    
    39
    %
    
    
    39
    %
    
    
    35
    %Construction
    
    
    25
    %
    
    
    22
    %
    
    
    20
    %Steel service centers
    
    
    16
    %
    
    
    16
    %
    
    
    16
    %Containers (1)
    
    
    10
    %
    
    
    13
    %
    
    
    18
    %Agriculture
    
    
    4
    %
    
    
    5
    %
    
    
    4
    %Other
    
    
    6
    %
    
    
    5
    %
    
    
    7
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 
 (1)
    
    Products shipped to Wheeling-Nisshin and OCC are included primarily in the converters and
processors and containers markets, respectively.(2)
    
    Certain amounts reported for 2005 and 2004 have been reclassified to correspond to
classifications reported for 2006.  Converters and Processors
 Construction
 Steel Service Centers
 9




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Containers
 Agriculture
 Joint Ventures   Wheeling-Nisshin
   
    
    WPSC may not sell its Wheeling-Nisshin shares at any time that it
is in breach of the shareholders agreement or any other agreement
with Wheeling-Nisshin, including the supply agreement.
    
    If WPSC seeks to sell some or all of its Wheeling-Nisshin shares,
it must first offer to sell, transfer or assign the offered shares
to the other Wheeling-Nisshin shareholder.
  Ohio Coatings Company
  10




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
    
    Any pledge, transfer or other distribution of shares of OCC must
be previously approved by shareholders holding at least 66.67% of
the voting power of the common shares of OCC.
    
    For 45 days after a shareholder receives notice from the other
party that a change of control of the other party has occurred,
the party receiving notice has the option to purchase all, but not
less than all, of the shares owned by the other party at a price
equal to $10,000 per share plus 10% interest or fair market value,
whichever is higher. For purposes of the shareholders agreement,
change of control for WPSC means, the transfer to persons
(other than a holding company) of a majority of the capital stock
of WPSC, or any transfer of substantially all of its assets.
    Mountain State Carbon
  11




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Other Joint Ventures
  12




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Competition
 
    
    quality;
    
    reliability;
    
    product market price;
    
    product offerings;
    
    location and shipping costs; and
    
    raw material and operating costs.
  
    
    domestic integrated steel producers, such as United States Steel Corporation, Mittal Steel USA, Inc., AK Steel
Corporation and SNA;
    
    mini-mills, such as Nucor Corporation, Steel Dynamics Inc. and Gallatin Steel Company;
    
    converters and fabricators, such as The Techs, Winner Steel, Inc., United Steel Deck and Metal Sales; and
    
    steel producers from Europe, Asia and other regions.
    Sales and Marketing
 13




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Manufacturing Process
    Raw Materials
     14




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Energy
 Backlog
 Environmental Matters
   Employees
 Cautionary Statement Concerning Forward-Looking Statements
  15




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Available Information   www.sec.gov,
 
 Item 1A. Risk Factors
  We emerged from Chapter 11 bankruptcy reorganization in August 2003, have sustained losses in the
past and may not be able to achieve profitability on a consistent basis.
  We may not be able to comply with our financial covenants, which may result in a default under our
credit agreements.
  16




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Restrictive covenants in our debt instruments may limit our flexibility and our ability to
implement our business plan.
 We may not be viable as a stand alone company if we are unable to find a strategic partner.
 17




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Because we are significantly leveraged, we may not be able to successfully run our business,
service our debt obligations or refinance our indebtedness.
   Intense competition in the steel industry and substitute materials could adversely affect our
results of operations, and ultimately, our liquidity, financial condition and the trading price of
our common stock.
  Increased imports from China or other countries could lower domestic steel prices and adversely
affect our revenue, profitability and cash flow.
   18




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The cyclical nature of the industries we serve may cause significant fluctuations in the demand for
our products and lead to periods of decreased demand.
   We may be unsuccessful in increasing the production of our electric arc furnace, which would
adversely affect our near-term and long-term financial performance.
   Any decrease in the availability, or increase in the cost, of steel slabs could adversely affect
our production and sale of steel products or increase our costs.
  Any decrease in the availability, or increase in cost, of raw materials and energy could materially
increase our costs and adversely impact our cash flow and liquidity.
   19




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We rely on a core group of significant customers for a substantial portion of our net sales, and a
reduction in demand, or inability to pay, from this group could adversely affect our total revenue.
  We may not be able to implement our business plan because we may be unable to fund the substantial
ongoing capital and maintenance expenditures that our operations require.
  A significant interruption or casualty loss at any of our facilities could increase our production
costs and reduce our sales and earnings.
  Our production costs may increase and we may not be able to sustain our sales and earnings if we
fail to maintain satisfactory labor relations.
   20




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Our senior management also work for another company whose interests may be different from ours.
  Delays or transition issues in implementing changes under new executive management could adversely
impact the Company.
  Environmental compliance and remediation costs could decrease our net cash flow, reduce our results
of operations and impair our financial condition.
   Increases in our healthcare costs for active employees and future retirees may lower our earnings
and negatively affect our competitive position in the industry.
  You may not be able to compare our historical financial information to our current financial
information, which will make it more difficult to evaluate an investment in our company.
  21




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Certain U.S. Federal income tax considerations may increase the amount of taxes we pay which could
adversely affect our liquidity and reduce profitability.
  Future sales of our common stock by our existing stockholders could adversely affect the market
price of our common stock.
   
 Item 1B. Unresolved Staff Comments
 .
 
 Item 2. PROPERTIES
 Primary Steel-producing Facility
  22




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Other Plants
  CapacityLocations and Operations
    
    Tons/Year
    
    
    Major ProductAllenport, Pennsylvania: Continuous
pickler, tandem
mill, temper mill and annealing
lines
    
    
    1,120,000
    
    
    Cold rolled sheetsBeech Bottom, West Virginia: Paint
lines
    
    
    308,000
    
    
    Painted steel in coil formMartins
Ferry, Ohio: Zinc coating lines
    
    
    750,000
    
    
    Hot-dipped galvanized sheets and coilsYorkville, Ohio: Continuous pickler,
tandem mill,
temper mills and annealing
lines
    
    
    660,000
    
    
    Blackplate and cold rolled sheets
     
 Item 3. LEGAL PROCEEDINGS
  Breach of Contract
   23




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Environmental Matters
        24




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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
      Votes
    
    
    VotesDirector
    
    For
    
    
    WithheldAlbert Adkins (Esmark nominee)
    
    
    6,113,705
    
    
    
    44,997Craig T. Bouchard (Esmark nominee)
    
    
    6,114,132
    
    
    
    44,570James P. Bouchard (Esmark nominee)
    
    
    6,114,119
    
    
    
    44,583James L. Bowen (WPC nominee and USW designee)
    
    
    8,988,057
    
    
    
    49,706Clark Burrus (Esmark nominee)
    
    
    6,113,673
    
    
    
    45,029C. Frederick Fetterolf (Esmark nominee)
    
    
    6,113,605
    
    
    
    45,097James V. Koch (Esmark nominee)
    
    
    6,113,683
    
    
    
    45,019George Munoz (Esmark nominee)
    
    
    6,113,744
    
    
    
    44,958Joseph Peduzzi (Esmark nominee)
    
    
    6,113,751
    
    
    
    44,951James A. Todd (Esmark nominee)
    
    
    6,113,719
    
    
    
    44,983Lynn R. Williams (WPC nominee and USW designee)
    
    
    8,977,560
    
    
    
    59,903
 25




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Votes
    
    
    VotesFor
    
    
    Against
    
    
    AbstainedRatification of PricewaterhouseCoopers LLP as
independent auditors for 2006
    
    
    10,195,254
    
    
    
    94,602
    
    
    
    31,588Amendment of WPCs Amended and Restated
By-Laws to fix the number of directors at eleven
    
    
    7,713,413
    
    
    
    2,547,190
    
    
    
    60,829Removal of any directors other than Esmark nominated
directors and directors designated by the United
Steelworkers
    
    
    7,633,755
    
    
    
    2,626,847
    
    
    
    60,837Repeal of any provision of, or amendment to, WPCs
Amended and Restated By-Laws unilaterally adopted
by the board of directors after August 8, 2003 and before
any of Esmarks nominees join the board of directors,
if elected
    
    
    7,652,800
    
    
    
    2,583,349
    
    
    
    85,290
 26




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PART II
 
 Item 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
REPURCHASES OF EQUITY SECURITIES
   High
    
    
    LowYear ended December 31, 2006:First quarter
    
    $
    20.74
    
    
    $
    8.57Second quarter
    
    $
    27.50
    
    
    $
    15.50Third quarter
    
    $
    23.29
    
    
    $
    16.28Fourth quarter
    
    $
    20.51
    
    
    $
    16.49Year ended December 31, 2005:First quarter
    
    $
    44.82
    
    
    $
    29.42Second quarter
    
    $
    33.10
    
    
    $
    15.29Third quarter
    
    $
    20.82
    
    
    $
    14.62Fourth quarter
    
    $
    16.70
    
    
    $
    8.03
  Dividend policy
  27




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Securities Authorized for Issuance under Equity Compensation Plans
  Number of securities
    
    
    Weighted averageto be issued upon
    
    
    exercise price ofexercise of outstanding
    
    
    outstanding
    
    
    Number of sharesoptions, warrants
    
    
    options, warants
    
    
    available forPlan category
    
    and rights
    
    
    and rights (1)
    
    
    future issuanceEquity compensation plans approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Equity compensation plans not approved
by security holders
    
    
    338,248
    
    
    $
    3.42
    
    
    
    628,953Total
    
    
    338,248
    
    
    $
    3.42
    
    
    
    628,953
 
 1.
    
    Weighted average computed based on 56,187 stock options outstanding at a weighted average exercise
price of $20.58 per share and 282,061 stock unit service and performance awards outstanding subject to
vesting at no additional cost.   Stockholder Return Performance Graph
  28




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10/28/03
    
    
    12/31/03
    
    
    12/31/04
    
    
    12/31/05
    
    
    12/31/06Wheeling-Pittsburgh Corporation
    
    $
    100.00
    
    
    $
    262.37
    
    
    $
    414.41
    
    
    $
    96.99
    
    
    $
    201.40NASDAQ U.S. Index
    
    $
    100.00
    
    
    $
    103.65
    
    
    $
    112.80
    
    
    $
    115.20
    
    
    $
    126.57S&P Steel Index
    
    $
    100.00
    
    
    $
    129.82
    
    
    $
    207.92
    
    
    $
    254.51
    
    
    $
    458.83
  
 Item 6. SELECTED FINANCIAL DATA
    29




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Reorganized Company
    
    
    
    Predecessor Company(Dollars in thousands, except per share amounts)Five Months
    
    
    
    Seven MonthsYear Ended
    
    
    
    
    
    
    Ended
    
    
    
    Ended
    
    
    Year EndedDecember 31,
    
    
    
    
    
    
    December 31,
    
    
    
    July 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    
    2003
    
    
    2002Consolidated Statement of
Operations Data:Net sales, including sales to
affiliates of $333,267, $343,546,
$367,735, $101,501, $164,273,
and $258.681
    
    $
    1,770,765
    
    
    $
    1,560,513
    
    
    $
    1,405,794
    
    
    $
    396,902
    
    
    
    $
    570,439
    
    
    $
    979,993Cost of sales, including cost
of sales to affiliates of $319,179,
$346,057, $324,813, $91,262,
$143,840 and $238,937, excluding
depreciation and amortization expense
    
    
    1,621,799
    
    
    
    1,479,474
    
    
    
    1,206,773
    
    
    
    395,950
    
    
    
    
    563,832
    
    
    
    894,449Depreciation and amoritization expense
    
    
    39,496
    
    
    
    33,984
    
    
    
    33,433
    
    
    
    10,473
    
    
    
    
    39,889
    
    
    
    74,194Selling, general and administrative
expense
    
    
    85,530
    
    
    
    71,552
    
    
    
    67,620
    
    
    
    23,671
    
    
    
    
    29,906
    
    
    
    46,993Reorganization and professional fee
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35
    )
    
    
    
    8,140
    
    
    
    11,755Operating income (loss)
    
    
    23,940
    
    
    
    (24,497
    )
    
    
    97,968
    
    
    
    (33,157
    )
    
    
    
    (71,328
    )
    
    
    (47,398
    )Interest expense and other financing
costs
    
    
    (26,749
    )
    
    
    (21,834
    )
    
    
    (19,778
    )
    
    
    (10,215
    )
    
    
    
    (9,185
    )
    
    
    (15,987
    )Other income
    
    
    13,332
    
    
    
    11,843
    
    
    
    17,520
    
    
    
    4,350
    
    
    
    
    3,228
    
    
    
    4,567Reorganization adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400,075
    
    
    
    1,262Income (loss) before taxes
    
    
    10,523
    
    
    
    (34,488
    )
    
    
    95,710
    
    
    
    (39,022
    )
    
    
    
    322,790
    
    
    
    (57,556
    )Tax provision (benefit)
    
    
    4,244
    
    
    
    (71
    )
    
    
    33,479
    
    
    
    15
    
    
    
    
    (641
    )
    
    
    11Income (loss) before minoirty interest
    
    
    6,279
    
    
    
    (34,417
    )
    
    
    62,231
    
    
    
    (39,037
    )
    
    
    
    323,431
    
    
    
    (57,567
    )Minority interest in loss of
consolidated subsidiary
    
    
    202
    
    
    
    583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    6,481
    
    
    $
    (33,834
    )
    
    $
    62,231
    
    
    $
    (39,037
    )
    
    
    $
    323,431
    
    
    $
    (57,567
    )Earnings (loss) per share:Basic
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.78
    
    
    $
    (4.11
    )
    
    
    
    *
    
    
    
    *Fully diluted
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.66
    
    
    $
    (4.11
    )
    
    
    
    *
    
    
    
    *Average basic shares outstanding
(in thousands)
    
    
    14,725
    
    
    
    14,302
    
    
    
    10,759
    
    
    
    9,500
    
    
    
    
    *
    
    
    
    *Average diluted shares outstanding
(in thousands)
    
    
    14,864
    
    
    
    14,302
    
    
    
    11,002
    
    
    
    9,500
    
    
    
    
    *
    
    
    
    *
 
 *
    
    Prior to reorganization, WPC was a wholly-owned subsidiary of WHX Corporation. 30




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Reorganized
    
    
    
    PredecessorCompany
    
    
    
    CompanyAs of
    
    
    
    As ofAs of December 31,
    
    
    
    
    
    
    July 31,
    
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2003
    
    
    
    2002Consolidated Balance Sheet
Data (end of period)Cash, cash equivalents
and short-term investments
    
    $
    21,842
    
    
    $
    8,863
    
    
    $
    31,198
    
    
    $
    4,767
    
    
    $
    7,382
    
    
    
    $
    8,543Working capital (deficit)
- unaudited
    
    
    72,939
    
    
    
    69,922
    
    
    
    153,190
    
    
    
    7,765
    
    
    
    47,100
    
    
    
    
    (255
    )Property, plant and
equipment, net
    
    
    626,210
    
    
    
    557,500
    
    
    
    487,308
    
    
    
    387,765
    
    
    
    360,213
    
    
    
    
    530,568Total assets
    
    
    1,122,545
    
    
    
    1,020,248
    
    
    
    955,486
    
    
    
    868,886
    
    
    
    878,769
    
    
    
    
    959,116Total debt, including capitalized
leases and revolving credit
facility
    
    
    397,080
    
    
    
    332,757
    
    
    
    333,583
    
    
    
    422,645
    
    
    
    380,518
    
    
    
    
    56,752Liabilities subject to compromise
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    890,301Stockholders equity (deficit)
    
    
    286,193
    
    
    
    265,504
    
    
    
    290,605
    
    
    
    104,613
    
    
    
    142,500
    
    
    
    
    (311,171
    )
 Reorganized Company
    
    
    Predecessor Company(Dollars in thousands, except per ton amounts)Five Months
    
    
    
    Seven MonthsYear Ended
    
    
    
    
    
    
    Ended
    
    
    
    Ended
    
    
    Year EndedDecember 31,
    
    
    
    
    
    
    December 31,
    
    
    
    July 31,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    
    2003
    
    
    2002Consolidated Operating
and Other Data (unaudited):Employment:Employment costs
    
    $
    292,792
    
    
    $
    271,962
    
    
    $
    239,236
    
    
    $
    94,651
    
    
    
    $
    143,265
    
    
    $
    248,829Average number of employees
    
    
    3,263
    
    
    
    3,306
    
    
    
    3,280
    
    
    
    3,299
    
    
    
    
    3,621
    
    
    
    3,796Production and Shipments:Production  tons
    
    
    2,502,315
    
    
    
    2,452,131
    
    
    
    2,362,886
    
    
    
    958,816
    
    
    
    
    1,399,853
    
    
    
    2,527,826Shipments  tons
    
    
    2,329,667
    
    
    
    2,164,404
    
    
    
    2,125,434
    
    
    
    912,937
    
    
    
    
    1,305,046
    
    
    
    2,213,506Average sales price per ton of
steel shipped
    
    $
    730
    
    
    $
    686
    
    
    $
    661
    
    
    $
    435
    
    
    
    $
    437
    
    
    $
    443Other:Operating income (loss) per ton
steel shipped
    
    $
    10
    
    
    $
    (11
    )
    
    $
    46
    
    
    $
    (36
    )
    
    
    $
    (55
    )
    
    $
    (21
    )
 31




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Item 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following should be read in conjunction with the Consolidated Financial Statements and related
notes that appear in Item 8 of this Annual Report on Form 10-K .
 This discussion contains forward-looking statements that involve numerous risks and uncertainties.
Our actual results could differ materially from those discussed in the forward-looking statements
as a result of various factors, including those set forth In Item 1  Business  Risk Factors and
elsewhere in this report.
 OVERVIEW
 ®
    Recent Developments
 Merger
Proposals; Proxy Contest; Directors and Officers
   32




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##### Table of Contents



New Management
  Production, Shipments and Pricing
    Raw Materials
  Insurance Recovery
  33




---



##### Table of Contents



Stock Unit Awards
  Net Operating Loss Carryover Limitation
 Termination of Stockholder Rights Plan
  Credit Arrangements and Covenant Compliance
     34




---



##### Table of Contents



Private Placement
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   Fresh Start Reporting
  Pension Benefits
    35




---



##### Table of Contents



Other Postretirement Benefits (OPEB)
    Asset impairments
  Deferred taxes
  36




---



##### Table of Contents



Environmental and legal contingencies
 RESULTS OF OPERATIONS
 Year ended December 31, 2006 versus year ended December 31, 2005
      37




---



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Year ended December 31, 2005 versus year ended December 31, 2004
      38




---



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LIQUIDITY AND CAPITAL RESOURCES
 Cash Flow from Operating Activities
   Cash Flow from Investing Activities
   39




---



##### Table of Contents



Cash Flow from Financing Activities
   Liquidity and Capital Resources
    40




---



##### Table of Contents



$250 Million Term Loan Agreement
     41




---



##### Table of Contents



$225 Million Revolving Credit Facility
  42




---



##### Table of Contents



$40 Million Series A Notes
 20 Million Series B Notes
 10 Million Unsecured Note
 43




---



##### Table of Contents



Collateral TypeTangible
and Intangible Assets 
and Joint Venture Equity Interest
    
    Accounts Receivable and InventoryDebt obligation secured by first 
security interest
    
    $250 Million Term Loan
    
    $225 Million Revolving Credit FacilityDebt obligation secured by second 
security interest
    
    $40 Million Series A Notes
    
    $250 Million Term LoanDebt obligation secured by third 
security interest

    
    $225 Million Revolving Credit Facility
    
    $40 Million Series A NotesDebt obligation secured by fourth 
security interest
    
    $20 Million Series B Notes
    
    $20 Million Series B Notes
  OFF-BALANCE SHEET ARRANGEMENTS
  CERTAIN OTHER OBLIGATIONS
  
    
    Modification and assumption agreement between WPSC and
Danieli Corporation. Pursuant to the modified agreement,
WPSC paid Danieli Corporation approximately $2.36 million.
Approximately $3.8 million of the balance of the amount owed
to Danieli Corporation was converted into a portion of the
secured term loans under our term loan agreement that is not
guaranteed by the Loan Board. The balance of the amount owed
to Danieli Corporation was converted into a promissory note.
    
    Loan modification agreement between WPSC and the Ohio
Department of Development. Under this agreement, we made a
$2.0 million partial prepayment of the $6.985 million owed by
WPSC to the Ohio Department of Development pursuant to a
loan, dated as of January 18, 2002, from the Ohio Department
of Development and we were granted a two-year deferral from
the effective date of the plan of reorganization of $4.985
million of such loan at an interest rate of 3% per annum,
which was originally due in August 2005. In
 44




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##### Table of Contents



August 2005,
WPSC and the Ohio Department of Development agreed to modify
the repayment terms of the loan, providing for a $1.0 million
payment in October 2005, a $1.5 million payment in July 2006,
and a $2.485 million payment in December 2006. In December
2006, we reached a tentative agreement with the Ohio
Department of Development to extend the maturity date of the
loan agreement to as late as January 2008.
    
    Loan agreement between WPSC and the State of West Virginia.
In connection with WPSCs repayment of a $5.0 million loan
from the West Virginia Development Office, WPSC entered into
a $6.5 million loan agreement with the State of West
Virginia. The loan has a five-year term expiring on August
1, 2008 and bears interest at a variable rate, which is reset
annually and currently approximates 8.7% per annum.
 CONTRACTUAL OBLIGATIONS
  Contractual Payments Due(Dollars in millions)Less than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong-term debt
    
    $
    280.9
    
    (1
    )
    
    $
    31.4
    
    
    $
    176.4
    
    
    $
    73.1
    
    
    $
    Interest on long-term debt
    
    
    42.5
    
    (2
    )
    
    
    16.7
    
    
    
    19.1
    
    
    
    6.7
    
    
    
    Capital leases
    
    
    6.2
    
    (1
    )
    
    
    0.7
    
    
    
    1.7
    
    
    
    1.4
    
    
    
    2.4Long-term operating leases
    
    
    21.1
    
    (3
    )
    
    
    3.9
    
    
    
    6.8
    
    
    
    5.3
    
    
    
    5.1Other long term liabilities:Steelworker Pension Trust
    
    
    20.5
    
    (4
    )
    
    
    12.3
    
    
    
    8.2
    
    
    
    
    
    
    
    OPEB
    
    
    31.3
    
    (5
    )
    
    
    4.7
    
    
    
    11.7
    
    
    
    14.9
    
    
    
    Coal miner retiree medical
    
    
    1.6
    
    
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    1.2Workers compensation
    
    
    29.0
    
    (6
    )
    
    
    
    
    
    
    5.8
    
    
    
    11.6
    
    
    
    11.6Purchase commitments:Oxygen supply
    
    
    93.3
    
    (7
    )
    
    
    10.0
    
    
    
    20.0
    
    
    
    23.2
    
    
    
    40.1Electricity
    
    
    83.7
    
    (8
    )
    
    
    7.5
    
    
    
    15.0
    
    
    
    14.0
    
    
    
    47.2Coal
    
    
    8.4
    
    (9
    )
    
    
    8.4
    
    
    
    
    
    
    
    
    
    
    
    Coal
    
    
    11.3
    
    (10
    )
    
    
    11.3
    
    
    
    
    
    
    
    
    
    
    
    Capital commitments
    
    
    15.5
    
    (11
    )
    
    
    15.5
    
    
    
    
    
    
    
    
    
    
    
    Capital contribution  MSC
    
    
    25.0
    
    
    
    
    
    25.0
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    670.3
    
    
    
    
    $
    147.5
    
    
    $
    264.9
    
    
    $
    150.3
    
    
    $
    107.6





|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | See Note 14 to Consolidated Financial Statement in Item 8  Financial Statements and
Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|2. |  | Represents estimated interest payments on existing long-term debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|3. |  | See Note 15 to Consolidated Financial Statements in Item 8  Financial Statements and
Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|4. |  | Amount represents estimated payments to the Steelworkers Pension Trust, pursuant to our labor
agreement with the USW, through the end of the labor contract, which expires on September 1,
2008.                                                                                                                                                                                                                                                                                                                                                                                              
|  
|5. |  | Amounts reflect our current estimate of corporate cash outflows for other post employment
benefits and include the impact of assumed mortality, medical inflation and the aging of the
population. No estimate has been made beyond 2011.                                                                                                                                                                                                                                                                                                                                                     
|  
|6. |  | Amounts reflect our current estimate of corporate cash outflows and exclude the impact of
interest and mortality. The forecast of cash outflows is estimated based on historical cash
payment information. No estimate has been made beyond 2011.                                                                                                                                                                                                                                                                                                                                             
|  
|7. |  | We entered into a 15-year take-or-pay contract in 1999 that was amended in 2003. The contract
requires us to purchase oxygen, nitrogen and argon each month with a minimum monthly charge of
approximately $0.7 million, subject to escalation clauses.                                                                                                                                                                                                                                                                                                                                       
|  
|8. |  | We entered into a 20-year take-or-pay contract in 1999, which was amended in 2003. The
contract requires us to purchase steam and electricity each month or pay a minimum monthly
charge of approximately $0.5 million, subject to increases for inflation, and a variable
charge calculated at a minimum of $3.75 times the number of tons of iron produced each month
with an agreed-to minimum of 3,250 tons per day, regardless of whether any tons are produced.
At December 31, 2006, a maximum termination payment of $27.7 million would have been required
to terminate the contract.

45



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9.
    
    In 2004, we amended our contract to purchase coal each month to a minimum monthly charge of
approximately $0.7 million. The term of the contract expires on December 31, 2007.10.
    
    In 2005, we entered into contracts to purchase 20,000 tons of coal each month from August
2006 through May 2007 at a price approximating $94.50 per ton.11.
    
    Amounts reflect contractual commitments for capital expenditures as of December 31, 2006. Planned Capital Expenditures
  
    
    $81.5 million for improvements to our primary production facility;
    
    $45.2 million for improvements of our finishing facilities;
    
    $8.1 million for improvements of our corrugating facility; and
    
    $26.6 million for environmental projects.
  VEBA TRUST AND PROFIT SHARING PLANS
   VEBA Trust
 (i)
    
    40% of operating cash flow, between $16 and $24 of operating cash flow per ton of steel
products sold to third parties, payable in cash;(ii)
    
    12% of operating cash flow, between $24 and $65 of operating cash flow per ton of steel
products sold to third parties, payable at our discretion in cash or common stock of WPC;
 46




---



##### Table of Contents



(iii)
    
    25% of operating cash flow, above $65 of operating cash flow per ton of steel products
sold to third parties, payable in cash; and(iv)
    
    15% of operating cash flow below $30 of operating cash flow per ton of steel products sold to
third parties, payable at our discretion in cash or common stock of WPC, subject to compliance
with dilution limitations.
       Profit Sharing Plans
 47




---



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RECENT ACCOUNTING STANDARDS
     48




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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk and Related Risks
  Interest Rate Risk
  Credit Risk
 Foreign Currency Exchange Risk
 49




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##### Table of Contents



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Managements Report on Internal Control Over Financial Reporting.
 
  Internal Control -
Integrated Framework
  50




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
  Consolidated financial statements
   Internal control over financial reporting
 Internal Control  Integrated Framework Internal Control  Integrated Framework
  51




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52




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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004RevenuesNet sales, including sales to affiliates
of $333,267, $343,546 and $367,735
    
    $
    1,770,765
    
    
    $
    1,560,513
    
    
    $
    1,405,794Cost and expensesCost of sales, including cost of sales to affiliates
of $319,179, $346,057 and $324,813
excluding depreciation and amortization expense
    
    
    1,621,799
    
    
    
    1,479,474
    
    
    
    1,206,773Depreciation and amortization expense
    
    
    39,496
    
    
    
    33,984
    
    
    
    33,433Selling, general and administrative expense
    
    
    85,530
    
    
    
    71,552
    
    
    
    67,620Total costs and expenses
    
    
    1,746,825
    
    
    
    1,585,010
    
    
    
    1,307,826Operating income (loss)
    
    
    23,940
    
    
    
    (24,497
    )
    
    
    97,968Interest expense and other financing costs
    
    
    (26,749
    )
    
    
    (21,834
    )
    
    
    (19,778
    )Other income
    
    
    13,332
    
    
    
    11,843
    
    
    
    17,520Income (loss) before income taxes and minority interest
    
    
    10,523
    
    
    
    (34,488
    )
    
    
    95,710Income tax provision (benefit)
    
    
    4,244
    
    
    
    (71
    )
    
    
    33,479Income (loss) before minority interest
    
    
    6,279
    
    
    
    (34,417
    )
    
    
    62,231Minority interest
    
    
    202
    
    
    
    583
    
    
    
    Net income (loss)
    
    $
    6,481
    
    
    $
    (33,834
    )
    
    $
    62,231Earnings (loss) per share:Basic
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.78Diluted
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.66Weighted average shares (in thousands):Basic
    
    
    14,725
    
    
    
    14,302
    
    
    
    10,759Diluted
    
    
    14,864
    
    
    
    14,302
    
    
    
    11,002
  53




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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
 December 31,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    21,842
    
    
    $
    8,863Accounts
receivables, less allowance for doubtful accounts of $2,882 and $2,594
    
    
    138,513
    
    
    
    132,643Inventories
    
    
    212,221
    
    
    
    166,566Prepaid expenses and other current assets
    
    
    27,911
    
    
    
    21,732Total current assets
    
    
    400,487
    
    
    
    329,804Investment in and advances to affiliates
    
    
    53,585
    
    
    
    55,100Property, plant and equipment, less accumulated depreciation of $114,813
and $75,977
    
    
    626,210
    
    
    
    557,500Deferred income tax benefits
    
    
    30,537
    
    
    
    26,264Restricted cash
    
    
    2,163
    
    
    
    13,691Intangible assets, less accumulated amortization of $2,136 and $1,795
    
    
    255
    
    
    
    4,725Other assets
    
    
    9,308
    
    
    
    33,164Total assets
    
    $
    1,122,545
    
    
    $
    1,020,248LiabilitiesCurrent liabilities:Accounts payable, including book overdrafts of $13,842 and $21,020
    
    $
    99,536
    
    
    $
    117,821Short-term debt
    
    
    110,000
    
    
    
    17,300Payroll and employee benefits payable
    
    
    34,766
    
    
    
    41,125Accrued income and other taxes
    
    
    10,333
    
    
    
    11,735Deferred income taxes payable
    
    
    30,537
    
    
    
    26,264Accrued interest and other current liabilities
    
    
    8,970
    
    
    
    5,757Deferred revenue
    
    
    1,287
    
    
    
    8,523Long-term debt due in one year
    
    
    32,119
    
    
    
    31,357Total current liabilities
    
    
    327,548
    
    
    
    259,882Long-term debt, less amount due in one year
    
    
    254,961
    
    
    
    284,100Employee benefits
    
    
    121,953
    
    
    
    123,498Other liabilities
    
    
    25,600
    
    
    
    13,030Total liabilities
    
    
    730,062
    
    
    
    680,510Minority interest
    
    
    106,290
    
    
    
    74,234Stockholders equityPreferred stock  $.001 par value; 20,000,000 shares authorized; no shares
issued or outstanding
    
    
    
    
    
    
    Common stock  $.01 par value; 80,000,000 shares authorized; 15,274,796 and
14,686,354 shares issued; 15,268,130 and 14,679,688 shares outstanding
    
    
    153
    
    
    
    147Additional paid-in capital
    
    
    289,903
    
    
    
    276,097Accumulated deficit
    
    
    (4,159
    )
    
    
    (10,640
    )Treasury stock, 6,666 shares, at cost
    
    
    (100
    )
    
    
    (100
    )Accumulated other comprehensive income
    
    
    396
    
    
    
    Total stockholders equity
    
    
    286,193
    
    
    
    265,504Total liabilities and stockholders equity
    
    $
    1,122,545
    
    
    $
    1,020,248
  54




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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Cash flow from operating activitiesNet income (loss)
    
    $
    6,481
    
    
    $
    (33,834
    )
    
    $
    62,231Adjustments to reconcile net income (loss) to cash
(used in) provided by operating activities:Depreciation and amortization expense
    
    
    39,496
    
    
    
    33,984
    
    
    
    33,433VEBA, profit sharing and other stock transactions
    
    
    11,094
    
    
    
    3,961
    
    
    
    22,981Other postretirement benefits
    
    
    (178
    )
    
    
    (786
    )
    
    
    3,359Deferred compensation and stock options
    
    
    2,558
    
    
    
    3,018
    
    
    
    2,837Interest paid-in-kind
    
    
    940
    
    
    
    1,803
    
    
    
    2,384Equity income of affiliated companies, net of dividends
    
    
    (43
    )
    
    
    (4,109
    )
    
    
    (11,884
    )(Gain) loss on disposition of assets
    
    
    (397
    )
    
    
    450
    
    
    
    361Deferred income taxes
    
    
    4,129
    
    
    
    
    
    
    
    32,505Minority interest
    
    
    (202
    )
    
    
    (583
    )
    
    
    Other
    
    
    54
    
    
    
    48
    
    
    
    Changes in current assets and current liabilities:Accounts receivable
    
    
    (5,870
    )
    
    
    11,866
    
    
    
    (40,484
    )Inventories
    
    
    (45,655
    )
    
    
    (9,897
    )
    
    
    (9,774
    )Other current assets
    
    
    (6,179
    )
    
    
    8,221
    
    
    
    (18,370
    )Accounts payable
    
    
    (11,107
    )
    
    
    13,261
    
    
    
    14,118Other current liabilities
    
    
    (11,886
    )
    
    
    2,367
    
    
    
    (13,505
    )Other assets and other liabilities, net
    
    
    7,713
    
    
    
    (18,213
    )
    
    
    (8,167
    )Net cash (used in) provided by operating activities
    
    
    (9,052
    )
    
    
    11,557
    
    
    
    72,025Cash flow from investing activitiesInvestment in affiliates
    
    
    (517
    )
    
    
    
    
    
    
    Payments from affiliates
    
    
    2,075
    
    
    
    2,025
    
    
    
    1,725Capital expenditures
    
    
    (108,994
    )
    
    
    (103,710
    )
    
    
    (132,442
    )Change in restricted cash used to fund capital expenditures
    
    
    11,528
    
    
    
    (1,189
    )
    
    
    74,636Proceeds from sale of assets
    
    
    1,526
    
    
    
    625
    
    
    
    28Net cash used in investing activities
    
    
    (94,382
    )
    
    
    (102,249
    )
    
    
    (56,053
    )Cash flow from financing activitiesBook overdraft
    
    
    (7,178
    )
    
    
    12,126
    
    
    
    2,208Net change in short-term debt
    
    
    92,700
    
    
    
    17,300
    
    
    
    (79,251
    )Additions to long-term debt
    
    
    
    
    
    
    
    
    
    
    3,000Repayment of long-term debt
    
    
    (29,371
    )
    
    
    (21,069
    )
    
    
    (15,195
    )Minority interest investment in subsidiary
    
    
    60,000
    
    
    
    60,000
    
    
    
    Issuance of common stock, net of issuance costs
    
    
    262
    
    
    
    
    
    
    
    99,697Net cash provided by financing activities
    
    
    116,413
    
    
    
    68,357
    
    
    
    10,459Net increase (decrease) in cash and cash equivalents
    
    
    12,979
    
    
    
    (22,335
    )
    
    
    26,431Cash and cash equivalents, beginning of year
    
    
    8,863
    
    
    
    31,198
    
    
    
    4,767Cash and cash equivalents, end of year
    
    $
    21,842
    
    
    $
    8,863
    
    
    $
    31,198
 See Note 21 for supplemental cash flow information
  55




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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholders Equity
(Dollars in thousands)
 AccumulatedAdditional
    
    
    Accumulated
    
    
    
    
    
    
    OtherPreferred
    
    
    Common
    
    
    Paid-in
    
    
    Earnings
    
    
    Treasury
    
    
    ComprehensiveStock
    
    
    Stock
    
    
    Capital
    
    
    (Deficit)
    
    
    Stock
    
    
    Income
    
    
    TotalBalance, December 31, 2003
    
    $
    
    
    
    $
    100
    
    
    $
    143,550
    
    
    $
    (39,037
    )
    
    $
    
    
    
    $
    
    
    
    $
    104,613Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,231
    
    
    
    
    
    
    
    
    
    
    
    62,231Shares issued:Public stock offering
    
    
    
    
    
    
    37
    
    
    
    99,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,697Employee benefit plans
    
    
    
    
    
    
    7
    
    
    
    21,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,227Restricted stock forfeiture
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    Stock-based compensation
expense recognized
    
    
    
    
    
    
    
    
    
    
    2,471
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,471Stock option grants
    
    
    
    
    
    
    
    
    
    
    366
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366Balance, December 31, 2004
    
    
    
    
    
    
    144
    
    
    
    267,327
    
    
    
    23,194
    
    
    
    (60
    )
    
    
    
    
    
    
    290,605Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,834
    )
    
    
    
    
    
    
    
    
    
    
    (33,834
    )Shares issued:Employee benefit plans
    
    
    
    
    
    
    3
    
    
    
    5,712
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,715Restricted stock forfeiture
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    (40
    )
    
    
    
    
    
    
    Compensation expense
recognized
    
    
    
    
    
    
    
    
    
    
    2,687
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,687Stock option grants
    
    
    
    
    
    
    
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    331Balance, December 31, 2005
    
    
    
    
    
    
    147
    
    
    
    276,097
    
    
    
    (10,640
    )
    
    
    (100
    )
    
    
    
    
    
    
    265,504Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,481
    
    
    
    
    
    
    
    
    
    
    
    6,481Shares issued:Employee benefit plans
    
    
    
    
    
    
    6
    
    
    
    10,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,992Stock-based compensationexpense recognized
    
    
    
    
    
    
    
    
    
    
    2,232
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,232Stock option grants
    
    
    
    
    
    
    
    
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    326Stock options exercised
    
    
    
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262Adjustment to initially apply 

FASB Statement No. 158,

without tax effect (See 
Note 17)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396
    
    
    
    396Balance, December 31, 2006
    
    $
    
    
    
    $
    153
    
    
    $
    289,903
    
    
    $
    (4,159
    )
    
    $
    (100
    )
    
    $
    396
    
    
    $
    286,193
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Notes to Consolidated Financial Statements
(Dollars in thousands, except per share and per ton amounts)
 1.
    
    Summary of Significant Accounting PoliciesNature of BusinessWheeling-Pittsburgh Corporation (the Company) manufactures and sells hot rolled, cold rolled,
galvanized, pre-painted and tin mill sheet products. The Company also manufactures fabricated
steel products, including roll-formed corrugated roofing, roof deck, form deck, floor deck,
bridgeform and other products used primarily in construction, highway and agricultural markets.Bankruptcy and ReorganizationThe Company emerged from bankruptcy effective August 1, 2003 and applied fresh start reporting
as of
July 31, 2003 pursuant to Statement of Position (SOP) 90-7, Financial Reporting by Entities in
Reorganization under the Bankruptcy Code.Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and all companies more
than 50% owned. The Company also evaluates the consolidation of entities under Financial
Accounting Standards Board Interpretation No. 46 (revised December 2003), Consolidation of
Variable Interest Entities (FIN 46(R)) which requires the Company to evaluate whether an entity
is a variable interest entity and whether the Company is the primary beneficiary of the variable
interest entity. Pursuant to FIN 46(R), the consolidated financial statements include the
accounts of Mountain State Carbon, LLC, an entity in which the Company has a 50% voting interest
(see Note 16).All material inter-company accounts, balances and transactions have been eliminated. The
Company uses the equity method of accounting to account for investments in unconsolidated
companies more than 20% owned. Unrealized profits or losses on sales to unconsolidated
companies accounted for using the equity method of accounting have been eliminated.Cash and Cash EquivalentsCash and cash equivalents include cash on hand and on deposit and highly liquid debt instruments
with maturities of three months or less. Cash that is restricted for use to fund capital
expenditures is reflected as a non-current asset. At December 31, 2006, $11,159 in cash and cash equivalents was internally restricted for joint venture activities and was not available for
general purposes.Accounts ReceivableAccounts receivable are stated at net invoice amounts less an allowance for doubtful accounts.
The Company provides a specific allowance for doubtful accounts for certain amounts remaining
unpaid beyond normal customer payment periods and provides a general allowance for doubtful
accounts based on historical loss experience. All amounts deemed to be uncollectible are
charged against the allowance for doubtful accounts in the period in which the determination is
made. Bad debt expense for 2006 and 2005 amount to $475 and $523, respectively.InventoryInventories are stated at the lower of cost or market. Cost is determined using the last-in,
first-out (LIFO) method for substantially all inventories. At December 31, 2006 and 2005,
approximately 96% and 94%, respectively, of all inventories were valued using the LIFO method.
Cost is determined for non-LIFO inventories based on actual cost using the first-in, first-out
(FIFO) method.Property, Plant and EquipmentProperty, plant and equipment acquired subsequent to July 31, 2003 is recorded at cost.
Property, plant and equipment acquired prior to August 1, 2003, was recorded at fair value as of
August 1, 2003 as a result of the application of fresh start reporting. Depreciation is
computed using the straight-line method based on estimated useful lives of 40 years for real
property and estimated useful lives ranging from 3 to 30 years for machinery and equipment.
Betterments and improvements are capitalized. Repairs and maintenance are
expensed as
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incurred. Gains and losses from the sale of property, plant and equipment are
recorded as cost of goods sold. Interest costs incurred to construct property, plant and
equipment are capitalized.The Company periodically evaluates property, plant and equipment for impairment whenever events
or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
Recoverability is determined based on an estimate of the expected future undiscounted cash
flows of the assets. If the carrying value of the assets exceeds the undiscounted cash flows of
the assets, an impairment loss is recognized. The impairment loss is measured as the excess of
the carrying value of the assets over the fair value of the assets. Fair value is estimated
using discounted future cash flows and, if available, comparable market values. Considering the
Companys integrated operations, asset impairment evaluations are performed on a group basis,
which represents the lowest level of independent cash flows.Software CostsCosts incurred for the development or purchase of internal-use software are capitalized and
amortized over the useful life of the software, which is generally five years or less.Income TaxesDeferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amount of existing assets and
liabilities and their respective tax bases. Deferred tax assets, including tax loss and tax
credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which temporary differences are expected to be recovered or
settled. The effect of a change in tax rates is recognized in the period in which enactment
occurs. Deferred income tax expense represents the change during the period in deferred tax
assets and deferred tax liabilities. The components of deferred tax assets and liabilities are
individually classified as current and non-current based on their characteristics. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be realized.Under the provisions of SOP 90-7, the benefit of pre-confirmation net operating loss
carryforwards or any benefit resulting from the reversal of a valuation allowance applicable to
other deferred tax assets are used first to reduce recorded goodwill, then to reduce other
intangible assets and finally to increase additional paid-in capital (see Note 12).Intangible AssetsThe carrying value of intangible assets with a finite useful life is reviewed for impairment
when events or changes in circumstances indicate that the carrying value of the intangible
assets may not be fully recoverable. Recoverability is determined based on an estimate of the
expected future undiscounted cash flows of the intangible assets. If the carrying value of the
intangible assets exceeds the undiscounted cash flows of the intangible assets, an impairment
loss is recognized. The impairment loss is measured as the excess of the carrying value of the
intangible assets over the fair value of the intangible assets. Fair value is estimated using a
discounted cash flow model. The Company has no intangible assets with an indefinite useful
life.Deferred Financing CostsCosts incurred to obtain, extend or amend debt obligations are capitalized and amortized over
the term of the related obligation.Pension and Other Postretirement BenefitsThe Company maintains a defined benefit pension plan for all salaried employees employed as of
January 31, 1998. The Company also maintains defined benefit retiree health care and life
insurance plans that provide benefits for substantially all salaried employees and for hourly
employees retiring after October 1, 2003. The net pension and other postretirement benefits
obligations recorded and the related periodic benefit costs are based on, among other things,
assumptions of discount rates, estimated returns on plan assets, salary increases, mortality
rates and future health care medical trend rates. Actuarial techniques and assumptions are used
to estimate these obligations and the related periodic benefit costs.The Company adopted the provisions of Statement of Financial
Accounting Standards No. 158 as of December 31, 2006 (see Note 17).
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Asset Retirement ObligationsAn asset retirement obligation associated with the retirement of long-lived assets is recognized
when a liability is incurred and the fair value of the liability can be reasonably estimated.
If fair value cannot be determined in the period in which the liability is incurred, a liability
is recognized when a reasonable estimation of fair value can be made. Fair value is based on
quoted market prices or the best information available in the circumstances.The Company may incur asset retirement obligations in the event of a permanent plant shutdown.
At December 31, 2006, the Companys plant assets had indeterminate lives and a reasonable estimate
of the fair value of associated asset retirement obligations could not be made.Revenue RecognitionRevenue from the sale of products is recognized when title, ownership and risk of loss is
transferred to the customer, which coincides with the time such products are shipped.
Prepayments for products to be delivered in future periods are recorded as deferred revenue
until shipment occurs and title, ownership and risk of loss passes to the customer. Shipping
costs billed to customers are recorded as revenues.Environmental ExpendituresEnvironmental expenditures relating to existing conditions caused by past operations that do not
contribute to future revenues are expensed. Environmental expenditures that extend the life of
related property, increase the value of related property or mitigate or prevent future
contamination are capitalized. Liabilities are recorded on an undiscounted basis when it is
probable that a liability has been incurred and the amount of the liability can be reasonably
estimated. Accruals for environmental obligations are not reduced by claims, if any, for
recoveries from insurance carriers or other third parties until it is probable that such
recoveries will be realized.Stock-based PaymentsThe Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004) (FASB No.
123(R)) in 2005 and accounts for all share-based payment transactions using a fair-value-based
measurement method. The Company elected to apply this statement using the modified
retrospective method (see Note 5).Earnings (loss) per ShareBasic earnings (loss) per share is computed by dividing net earnings (loss) applicable to common
shareholders by the weighted average number of shares of common stock outstanding during the
period. Diluted earnings (loss) per share is computed by dividing net earnings (loss)
attributable to common shareholders by the weighted average number of common shares outstanding,
adjusted for the dilutive effect of common stock equivalents. In periods where losses are
reported, the weighted average number of common shares outstanding excludes common stock
equivalents, as their inclusion would be anti-dilutive.Use of EstimatesThe consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America which requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could
differ from the estimates and assumptions made.Concentrations of Credit and Business RiskThe Company is exposed to credit risk in the event of nonpayment by customers, principally steel
service centers, converters and processors and customers in the construction and container
industries, substantially all of which are located in the United States. The Company mitigates
its exposure to credit risk by performing on-going credit evaluations and obtaining security as
appropriate.During 2006, 2005 and 2004, the Company had sales to one customer, an affiliate, which
approximated
14.1%, 13.9% and 17.5% of revenue, respectively.
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New Accounting StandardsThe Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (FASB) No. 158, Employers Accounting for Defined Benefit Plans and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R), in September
2006. FASB No. 158 requires the recognition of the funded status of a benefit plan in the
statement of financial position; requires the recognition of the gains or losses and prior
service costs or credits that arise during the period but are not recognized as components of
net periodic pension cost as a component of other comprehensive income, net of tax; requires the
measurement of defined benefit plan assets and obligations as of the fiscal year-end date; and
requires additional footnote disclosure about certain effects on net periodic benefit cost for
the next fiscal year that arise from delayed recognition of gains or losses, prior service costs
or credits and the net transition asset or obligation. FASB No. 158 is effective for fiscal
years ending after December 15, 2006 except for the requirement to measure defined benefit plan
assets and obligations as of the fiscal year-end date, which is effective for fiscal years
ending after December 15, 2008. The Company adopted the provisions of FASB No. 158 for the
fiscal year ending December 31, 2006 (see Note 17).The Securities and Exchange Commission issued Staff Accounting Bulletin No. 108 (SAB 108) in
September 2006. SAB 108 provides guidance for quantifying and evaluating prior year
misstatements and for reporting the effects of such misstatements. SAB 108 is effective for
fiscal years ending after November 15, 2006. The adoption of SAB 108 had no effect on the
Companys financial statements.The FASB issued FASB No. 157, Fair Value Measurement, in September 2006. FASB No. 157 defines
fair value, established a framework for measuring fair value in generally accepted accounting
principles and expands disclosures about fair value measurements. FASB No. 157 is effective for
fiscal years beginning after November 15, 2007. The Company does not expect the adoption of
this statement to have a material impact on its financial statements.The FASB issued FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes,
in June 2006. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements and prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company has not yet quantified the effect of FIN 48 on its financial
statements.The FASB issued FASB No. 155, Accounting for Certain Hybrid Financial Instruments  an
Amendment of FASB Statements No. 133 and 140, in February 2006. FASB No. 155 eliminates the
exemption from applying FASB No. 133 to interests in securitized financial assets and allows for
fair value measurement at acquisition, at issuance or on re-measurement on an
instrument-by-instrument basis in cases in which a derivative would otherwise have to be
bifurcated. FASB No. 155 is effective for all financial instruments acquired or issued after
the beginning of an entitys first fiscal year beginning after September 15, 2006. The Company
does not expect the adoption of this statement to have a material impact on its financial
statements.2.
    
    Segments, Geographic Area and Major CustomersThe Company is engaged in one line of business and operates in one business segment, the
production, processing, fabrication and sale of steel and steel products. The Company has a
diverse customer base, substantially all of which is located in the United States. All of the
Companys operating assets are located in the United States.During 2006, 2005 and 2004, the Company had sales to one customer, an affiliate, which
approximated
14.1%, 13.9% and 17.5% of revenue, respectively.3.
    
    Transactions with Affiliates and Related PartiesThe Company owns 35.7% of the outstanding common stock of Wheeling-Nisshin, Inc.
(Wheeling-Nisshin), which is accounted for using the equity method of accounting. The Company
had sales to Wheeling-Nisshin of $250,240, $216,697 and $246,679 during 2006, 2005 and 2004,
respectively. Management believes that sales to Wheeling-Nisshin are made at prevailing market
prices. The Company received dividends from Wheeling-Nisshin of $10,715, $5,000 and $2,500
during 2006, 2005 and 2004, respectively. At December 31, 2006 and
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2005, the Company had
accounts receivable due from Wheeling-Nisshin, Inc. of $1,853 and $3,439, respectively, and had
accounts payable to Wheeling-Nisshin of $147 and $726, respectively.The Company owns 50% of the outstanding common stock of Ohio Coatings Corporation (OCC), which
is accounted for using the equity method of accounting. The Company had sales to OCC of
$78,276, $126,849 and $121,056 during 2006, 2005 and 2004, respectively. Management believes
that sales to OCC are made at prevailing market prices. At December 31, 2006 and 2005, the
Company had accounts receivable due from OCC of $3,461 and $8,852, respectively. At December
31, 2006 and 2005, the Company has a loan receivable due from OCC of $5,625 and $7,700,
respectively, which bears interest at a variable rate, which currently approximates 7.1%. The
Company recorded interest income on the loan receivable of $417, $539 and $546 during 2006, 2005
and 2004, respectively, and received payments on the loan receivable of $2,075, $2,025 and
$1,725 during 2006, 2005 and 2004, respectively.The Company owns 49% of the outstanding common stock of Feralloy-Wheeling Specialty Processing,
Co. (Feralloy), which is accounted for using the equity method of accounting. During 2006, 2005
and 2004, the Company received dividends from Feralloy of $343, $294 and $293, respectively.During 2006, the Company acquired 50% of the outstanding common stock of Jensen Bridge & Roofing
Company, LLC (Jensen Bridge), a joint venture, that produces and sells corrugated roofing
products. The joint venture is accounted for using the equity method of accounting. The
Company had sales to Jensen Bridge of
$4,751 during 2006. Management believes that sales to Jensen Bridge are made at prevailing
market prices. At December 31, 2006, the Company had accounts receivable due from Jensen Bridge
of $1,369.During 2006, Esmark Incorporated (Esmark) incurred approximately $1,715 in connection with a
proxy contest seeking to elect a new slate of directors at the Companys 2006 annual meeting.
Esmark, pursuant to Delaware law, has requested reimbursement of these costs from the Company.
The Company accrued these costs in 2006.4.
    
    Insurance RecoveryDuring February 2007 and during February and March 2006, the Company received $6,116 and $12,659, respectively, in
partial settlement of a business interruption insurance claim relating to an insurable event
that occurred in December 2004. Of these amounts, $13,415 was recorded as a reduction of cost of
goods sold during 2006 and
$5,360 was recorded as a reduction of cost of goods sold during 2005. Business interruption
insurance recoveries are recorded in the period in which a sworn statement of proof of loss is
received from the insurance carriers or the insurance carrier acknowledges an obligation to pay
and collectibility is assured.5.
    
    Share-Based PaymentsThe Company adopted SFAS No. 123 (revised 2004), Share-Based Payment, in the first quarter of
2005 and elected to apply the statement using the modified retrospective method.Non-vested restricted stock
The Company maintains a non-vested restricted stock plan pursuant to which it granted 500,000
shares of its common stock to selected key employees on July 31, 2003. These shares vested,
subject to forfeiture, in increments of one-third of the total grant to each individual ratably
over three years. Of these shares, 493,334 shares vested and 6,666 shares were forfeited. In
March 2005, the Company granted 10,500 shares of common stock to certain employees under its
management stock incentive plan, all of which vested during 2006.The grant date fair value of non-vested restricted stock is measured as being equal to the fair
value of the Companys common stock on the date of grant. The 10,500 shares of non-vested
restricted stock granted during 2005 had a grant date fair value of $39.01 per share.
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A summary of activity under these plans as of December 31, 2006 and changes during the year then
ended is as follows:
 WeightedAverageGrant DateShares
    
    
    Fair ValueBalance, December 31, 2005
    
    
    174,500
    
    
    $
    16.44Granted
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Vested
    
    
    (174,500
    )
    
    $
    16.44Balance, December 31, 2006
    
    
    
    
    
    $
    
 Compensation expense under these plans is measured as being equal to the fair value of the
common stock issued on the grant date, amortized over the vesting period for each grant.
Compensation expense related to these plans amounted to $1,609, $2,687 and $2,471 for 2006, 2005
and 2004, respectively. The total fair value of shares vested during 2006, 2005 and 2004 was
$3,317, $3,088 and $4,943, respectively. No shares granted under these plans are subject to
retirement eligible provisions.Stock optionsThe Company maintains a stock option plan for non-employee directors of the Company pursuant to
which it granted stock options for 22,755, 25,389 and 19,215 shares of its common stock during
2006, 2005 and 2004, respectively, at a weighted average exercise price of $19.74, $16.65 and
$21.99 per share, respectively. The options were granted at a price equal to the average stock
price for a five-day period ending on the date of grant, vest upon receipt, are exercisable at
the option of the holder and lapse ten years from the date of grant. If a non-employee director
of the Company terminates association with the Company, outstanding stock options are
exercisable within 90 days from the date of such termination. During 2006, proceeds of $262
were received from the exercise of 28,965 stock options. No stock options were exercised during
2005 and 2004.The grant date fair value of stock options granted under the plan is estimated using the
Black-Scholes pricing model. The weighted average grant date fair value for stock options
granted during 2006, 2005 and 2004 was
$14.34, $13.04 and $19.05 per option, respectively, determined using the following assumptions:
 Year EndedDecember 31,2006
    
    2005
    
    2004Average risk-free interest rate
    
    
    4.93
    %
    
    
    4.38
    %
    
    
    3.41
    %Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    81.57
    %
    
    
    83.32
    %
    
    
    88.27
    %Expected life (years)
    
    
    5
    
    
    
    5
    
    
    
    5
 The Company previously used a ten-year expected life assumption relative to stock options,
which was equal to the term of the stock options issued. During 2006, the Company changed this
expected life assumption to five years, which is a simple average of the vesting period and the
term of the stock options issued. The effect of this change on previously reported amounts was
not material.
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A summary of activity under this plan as of December 31, 2006 and changes during the year then
ended is as follows:
 Weighted-Average
    
    
    AggregateExercise
    
    
    IntrinsicShares
    
    
    Price
    
    
    ValueOustanding, December 31, 2005
    
    
    62,397
    
    
    $
    15.53Granted
    
    
    22,755
    
    
    
    19.74Exercised
    
    
    (28,965
    )
    
    
    (9.03
    )Expired
    
    
    
    
    
    
    Outstanding, December 31, 2006
    
    
    56,187
    
    
    $
    20.58Exercisable, December 31, 2006
    
    
    56,187
    
    
    $
    20.58
    
    
    $
    90
 Compensation expense under this plan is equal to the fair value of the stock options
granted on the grant date. Compensation expense relative to stock options amounted to $326,
$331 and $366 for 2006, 2005 and 2004, respectively.Stock unit awardsDuring 2006, the Company granted 316,998 stock unit service awards and 103,339 stock unit
performance awards to certain employees under its management stock incentive plan, as amended.
During 2006, 80,966 stock unit service awards and 57,310 stock unit performance awards were
forfeited. Stock unit service awards will vest to each individual based solely on service,
subject to forfeiture, in amounts equal to 18,996, 30,680 and 15,356 on March 31, 2007, 2008 and
2009, respectively, and 56,997, 57,000 and 57,003 on December 19, 2007, 2008 and 2009,
respectively. Stock unit performance awards will vest to each individual in full, subject to
forfeiture, on March 31, 2009, based on a combination of service and market performance. In
general, market performance will be determined based on a comparison of the annualized total
shareholder return of the Companys stock, as defined by the plan, as compared to the percentage
increase in the Dow Jones US Steel Index over the three-year period ending December 31, 2008.
Based on market performance as measured against predetermined targets, as defined by the plan,
all, a portion or none of these stock unit performance awards may vest to each individual on
March 31, 2009. Each stock unit award is equivalent to one share of common stock of the
Company. The Company, at its sole discretion, has the option of settling stock unit awards in
cash or by issuing common stock or a combination of both. No stock unit awards granted under
the plan vested during 2006. No stock unit awards granted under this plan are subject to
retirement eligible provisions.The grant date fair value of stock unit service awards is measured as being equal to the fair
value of the Companys common stock on the date of grant. The weighted average grant date fair
value of stock unit service awards granted during 2006 was $18.41 per stock unit service award.
The grant date fair value of stock unit performance awards is estimated using a lattice-based
valuation model. The grant date fair value of stock unit performance awards granted during 2006
was $21.67 per stock unit performance award, determined using the following assumptions:
 Average risk-free interest rate
    
    
    4.80
    %Expected dividend yield
    
    
    0.00
    %Expected volatility
    
    
    68.00
    %Expected life (years)
    
    
    3Expected turnover rate
    
    
    10.00
    %
 63




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A summary of activity under this plan as of December 31, 2006 and changes during the year
then ended is as follows:
 WeightedAverageUnits/
    
    
    Grant DateShares
    
    
    Fair ValueBalance, December 31, 2005
    
    
    
    
    
    $
    Granted
    
    
    420,337
    
    
    
    19.21Forfeited
    
    
    (138,276
    )
    
    
    20.02Vested
    
    
    
    
    
    $
    Balance, December 31, 2006
    
    
    282,061
    
    
    $
    18.82
 Compensation expense for stock unit awards is equal to the grant date fair value of the
stock unit awards, amortized over the requisite service period for the entire award, using the
straight-line method. Compensation expense relative to stock unit awards amounted to $623 for
2006. At December 31, 2006, deferred compensation expense relative to stock unit awards
amounted to $4,684. This amount will be amortized to expense over the requisite service period
through December 2009.The Company authorized and issued 500,000 shares of restricted stock under its non-vested
restricted stock plan of which 6,666 shares were forfeited and remain available for issuance
under the plan. The Company authorized 1,000,000 shares of common stock for issuance under its
management stock incentive plan. At December 31, 2006, 10,500 restricted shares of common stock
had been issued under the management stock incentive plan, 56,187 options to acquire shares of
common stock were outstanding under the plan and 282,061 stock unit awards were outstanding
under the plan.6.
    
    Interest Expense and Other Financing Costs
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Interest incurred
    
    $
    26,861
    
    
    $
    19,729
    
    
    $
    18,933Less interest capitalized
    
    
    (4,583
    )
    
    
    (2,946
    )
    
    
    (4,050
    )Net interest
    
    
    22,278
    
    
    
    16,783
    
    
    
    14,883Amortization of deferred financing costs
    
    
    4,471
    
    
    
    5,051
    
    
    
    4,895Interest expense and other financing costs
    
    $
    26,749
    
    
    $
    21,834
    
    
    $
    19,778
 7.
    
    Other Income
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Equity income in affiliates
    
    $
    11,101
    
    
    $
    9,403
    
    
    $
    14,677Interest and investment income
    
    
    1,811
    
    
    
    914
    
    
    
    1,226Other
    
    
    420
    
    
    
    1,526
    
    
    
    1,617Total
    
    $
    13,332
    
    
    $
    11,843
    
    
    $
    17,520
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8.
    
    Earnings (Loss) Per ShareFor the years ended December 31, 2006, 2005 and 2004, a reconciliation of the numerator and
denominator for the calculation of basic and diluted earnings (loss) per share is as follows:
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Income (loss) available to common stockholders
    
    $
    6,481
    
    
    $
    (33,834
    )
    
    $
    62,231Weighed-average basic shares outstanding (in thousands)
    
    
    14,725
    
    
    
    14,302
    
    
    
    10,759Dilutive effect of (in thousands)+A1:Non-vested restricted common stock
    
    
    75
    
    
    
    
    
    
    
    228Stock options
    
    
    14
    
    
    
    
    
    
    
    15Stock unit awards
    
    
    50
    
    
    
    
    
    
    
    Weighed-average diluted shares outstanding (in thousands)
    
    
    14,864
    
    
    
    14,302
    
    
    
    11,002Basic earnings (loss) per share
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.78Diluted earnings (loss) per share
    
    $
    0.44
    
    
    $
    (2.37
    )
    
    $
    5.66
 For the years ended December 31, 2006 and 2005, stock options for 30,212 and 62,397 shares
of common stock at a weighted average exercise price of $24.90 and $15.53, respectively, were
excluded from the computation of diluted earnings per share as their effect was anti-dilutive.
For the year ended December 31, 2005, 341,167 shares of non-vested restricted common stock were
excluded from the computation of diluted earnings per share as their effect was anti-dilutive.9.
    
    Inventories
 December 31,2006
    
    
    2005Raw materials
    
    $
    44,189
    
    
    $
    49,193In-process
    
    
    212,315
    
    
    
    155,860Finished products
    
    
    58,606
    
    
    
    28,870Other materials and supplies
    
    
    46
    
    
    
    152Total current cost
    
    
    315,156
    
    
    
    234,075Excess of current cost over carrying value
    
    
    (102,935
    )
    
    
    (67,509
    )Total carrying value
    
    $
    212,221
    
    
    $
    166,566
 During 2006, 2005, 2004, certain inventory quantities were reduced, resulting in
liquidations of LIFO inventories carried at costs prevailing in prior periods. The effect was
to increase income by $2,647, $5,170 and $2,139, respectively.10.
    
    Investment in and Advances to AffiliatesThe Company owns 35.7% of the outstanding common stock of Wheeling-Nisshin, 50% of the
outstanding common stock of OCC, 49% of the outstanding common stock of Feralloy-Wheeling
Specialty Processing, Co. and a 50% interest in Jensen Bridge, all of which are accounted for
using the equity method of accounting. The carrying value of the Companys investment in
affiliates was $47,960 and $47,400 at December 31, 2006 and 2005, respectively.As a result of the application of fresh start reporting, the Company restated its investment in
affiliates to fair value as July 31, 2003. At December 31, 2006, the Companys interest in the
net assets of its affiliates accounted for using the equity method of accounting amounted to
$61,471, which exceeded the carrying value of the Companys investment in affiliates by $13,511.
This amount is being amortized to income over a 10-year period, which represents the estimated
remaining useful life of the long-lived assets of the affiliates as of
July 31, 2003.
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The Company has a loan receivable due from OCC, which bears interest at a variable rate, which
currently approximates 7.1%. The loan receivable due from OCC was $5,625 and $7,700 at December
31, 2006 and 2005, respectively.11.
    
    Property, Plant and Equipment
 December 31,2006
    
    
    2005Land, land improvements and mineral rights
    
    $
    11,403
    
    
    $
    8,608Buildings
    
    
    29,105
    
    
    
    21,717Machinery and equipment
    
    
    584,480
    
    
    
    458,158Construction in progress
    
    
    116,035
    
    
    
    144,994Total
    
    
    741,023
    
    
    
    633,477Less accumulated depreciation and amortization
    
    
    (114,813
    )
    
    
    (75,977
    )Net
    
    $
    626,210
    
    
    $
    557,500
 Property, plant and equipment included gross assets acquired under capital leases of $2,920
at December 31, 2006 and 2005. Related amortization included in accumulated depreciation and
amortization was $233 and $158 at December 31, 2006 and 2005, respectively. Amortization of
assets under capital leases is included in depreciation expense. At December 31, 2006, the net
book value of idled equipment included in property, plant and equipment was $3,450.12.
    
    Intangible AssetsIntangible assets represents the estimated fair value of steel supply contracts with
Wheeling-Nisshin and OCC, which were recorded as a result of the application of fresh start
reporting as of July 31, 2003. These intangible assets were being amortized over the term of
the steel supply contracts, one of which expires in 2012 and the other in 2013, using the
straight-line method. No residual value was assigned to these contracts. The Company recorded
amortization expense of $341, $449 and $923 in 2006, 2005 and 2004, respectively.Under the provisions of SOP 90-7 and FASB 109, either pre-confirmation net operating loss
carryforwards or benefits resulting from the reversal of a valuation allowance applicable to
other deferred tax assets are used first to reduce goodwill, then to reduce other intangible
assets, and finally as a credit to additional paid-in capital. During 2006 and 2005, other
intangible assets was reduced by $4,129 and $2,979, respectively, representing the tax benefit
from the utilization of pre-confirmation net operating loss carryforwards and deferred tax
assets for which a full valuation allowance has been provided.13.
    
    Short-Term DebtOn July 8, 2005, the Company entered into an amended and restated $225,000 revolving credit
agreement, which matures on July 8, 2009. This new revolving credit facility amended and
restated the Companys $225,000 revolving credit agreement entered into in August 2003, which
was scheduled to mature on August 1, 2006. At December 31, 2006 and 2005, $110,000 and $17,300
was outstanding under the revolving credit facility, respectively.The revolving credit facility requires the Company to maintain minimum borrowing availability of
$50,000 at all times or to comply with a minimum fixed charge coverage ratio if borrowing
availability under the revolving credit facility falls below $50,000 at any point in time. If
an event of default occurs under the Companys $250,000 senior secured term loan, such event
will constitute an event of default under the Companys amended and restated revolving credit
agreement. Additionally, if an event of default results in acceleration of the Companys term
loan or revolving credit agreement, such event would also result in the acceleration of
substantially all of the Companys other indebtedness pursuant to cross-default or
cross-acceleration provisions. The Company is restricted from paying any cash dividends under
the terms of the revolving credit agreement.On March 16, 2007, the revolving credit agreement was amended to allow the
 Company to access collateral in excess of the $225,000 commitment under the
 facility.  If the minimum fixed charge coverage ratio is not met by the Company at
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##### Table of Contents



the end of any quarter and excess collateral, as defined by the agreement, is available,
 the Company will be able to access up to $45,000 of such excess collateral over and
 above the $225,000 commitment amount and the Company will be required to
 maintain at least $50,000 of borrowing availability at all times.  Provided that
 sufficient collateral will support such borrowings, the Company will be permitted to
 borrow up to $220,000 under the facility.  The incremental amount of borrowing
 availability of up to $45,000 will decrease by $5,000 each quarter commencing with
 the fourth quarter of 2007 through the second quarter of 2008, and will be limited,
 thereafter, to up to $25,000 through, but not beyond, November 1, 2008.  On this
 date and thereafter, the previous requirement that the Company maintain minimum
 borrowing availability of $50,000 at all times without access to collateral beyond the
 $225,000 million amount of the facility, or to maintain a minimum fixed charge
 coverage ratio, will again be applicable.Borrowing availability under the revolving credit facility is based on eligible accounts
receivable and inventory amounts, as defined by the revolving credit facility. Borrowing
availability is reduced by amounts outstanding under the revolving credit facility and by
outstanding letters of credit. Interest on borrowings under the revolving credit facility is
payable monthly and is calculated based on LIBOR or the prime rate using spreads based on
borrowing availability, as defined by the revolving credit facility. The average rate of
interest on amounts outstanding under the revolving credit facility during 2006, 2005 and 2004
approximated 7.9%, 6.3% and 4.9%, respectively. Amounts outstanding under the revolving credit
facility are collateralized by a first lien on accounts receivable and inventory and a third
lien on other tangible and intangible assets and investments in affiliates.Due to certain mandatory lockbox requirements and other provisions under the revolving credit
agreement, amounts outstanding under the revolving credit facility have been classified as a
short-term obligation in accordance with the provisions of EITF 95-22.14.
    
    Long-Term Debt
 December 31,2006
    
    
    2005Senior secured term loan
    
    $
    193,650
    
    
    $
    218,650Series A secured notes
    
    
    40,985
    
    
    
    41,681Series B secured notes
    
    
    23,266
    
    
    
    22,661Unsecured 6% note
    
    
    11,506
    
    
    
    11,171West Virginia Department of Development
    
    
    6,539
    
    
    
    6,539Ohio Department of Development
    
    
    2,000
    
    
    
    3,985Industrial revenue bonds (capital leases)
    
    
    5,440
    
    
    
    6,190Other, including a capital lease
    
    
    3,694
    
    
    
    4,580Total
    
    
    287,080
    
    
    
    315,457Less amount due in one year
    
    
    32,119
    
    
    
    31,357Long-term debt due after one year
    
    $
    254,961
    
    
    $
    284,100
 Assuming repayment of the senior secured term loan in 2008 and without consideration of
future prepayments that may be required based on excess cash flow calculations under certain
debt obligations, long-term debt matures as follows:
 2007
    
    $
    32,1192008
    
    
    176,5352009
    
    
    1,5432010
    
    
    24,8112011
    
    
    49,657After 2011
    
    
    2,415Total
    
    $
    287,080
 $250,000 senior secured term loanOn August 1, 2003, WPSC entered into a $250,000 senior secured term loan agreement. The term
loan agreement matures on August 1, 2014. However, if the administrative agent under the loan
is unable or unwilling to re-offer certain tranches of the term loan agreement as of November 1,
2008, the maturity date for
each tranche of the term loan agreement will occur on November 1, 2008. The term loan agreement
is
 67




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##### Table of Contents



$40,000 Series A secured notes
   $20,000 Series B secured notes
   68




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##### Table of Contents



$10,000 unsecured noteOn August 1, 2003, the Company issued an unsecured note in the aggregate principal amount of
$10,000. The unsecured note matures in 2011. The unsecured note is subordinated in right of
payment to the revolving credit agreements, the term loan agreement and the Series A and B
secured notes.The unsecured note has no fixed repayment schedule. The unsecured note bears interest at 6%.
Interest is payable in June and December of each year. If cash interest is not paid, the
Company is required to pay interest in-kind.West Virginia and Ohio Departments of DevelopmentThe Company has a five-year term loan agreement with the West Virginia Department of Development
that matures August 1, 2008. The term loan bears interest at LIBOR plus 3.125%, with such rate
being reset annually. Interest is payable quarterly.The Company has a loan agreement with the Ohio Department of Development that, as amended, was
scheduled to mature in December 2006. The Company reached a tentative agreement with the Ohio
Department of Development to extend the maturity date of the loan agreement to as late as
January 2008. The loan bears interest at a rate of 3%, which is payable monthly.Industrial revenue bonds  capital leasesAmounts due under industrial revenue bonds issued by the State of Virginia are payable in annual
installments ranging from $300 in 2007 to $480 in 2014. The bonds bear interest at a rate of
7%, payable semi-annually. Amounts due under the obligations are collateralized by certain real
property.Amounts due under industrial revenue bonds issued by the State of Nevada are payable in annual
installments ranging from $225 in 2007 to $380 in 2014. The bonds bear interest at a rate of
8%, payable semi-annually. Amounts due under the obligations are collateralized by certain real
property.Other, including a capital leaseThe Company has certain other obligations outstanding that are payable in various installments
ranging from $21 per month to $300 semi-annually, with interest rates ranging from 6.1% to 9.0%
and maturities ranging from June 2007 through January 2011.15.
    
    LeasesThe Company leases certain equipment under operating lease agreements. Lease expense for 2006,
2005 and 2004 amounted to $10,101, $10,271 and $10,596, respectively. Under long-term operating
leases, minimum lease payments are $3,925 for 2007, $3,507 for 2008, $3,254 for 2009, $2,811 for
2010, $2,497 for 2011 and $5,148 thereafter.16.
    
    Variable Interest EntityOn September 29, 2005, the Company and SNA Carbon, LLC (SNA Carbon) entered into an Amended and
Restated Limited Liability Company Agreement of Mountain State Carbon, LLC, a limited liability
company (a joint venture) formed to own and refurbish the coke plant facility contributed to it
by the Company and to produce and sell metallurgical coke to and for the benefit of both
parties. Upon formation of the joint venture, each party received a 50% voting interest in the
joint venture.In general, all coke produced by the joint venture will be sold to each party at the cost
incurred by the joint venture to produce coke, excluding demolition costs, plus 5%. Pursuant to
coke supply agreements between the parties and the joint venture, the Company acquired over 60%
of all of the coke produced by the joint venture from inception through December 31, 2006.
Each party will acquire 50% of all coke
produced by the joint venture for all periods thereafter. Due to the disproportionate sale of
coke by the joint venture from inception through December 31, 2006, the Company has been
identified as the primary beneficiary of the joint venture in accordance with the provisions of
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51.
 69




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##### Table of Contents



December 31,2006
    
    
    2005Cash and cash equivalents
    
    $
    11,159
    
    
    $
    3,629Accounts receivable
    
    
    8,256
    
    
    
    962Inventory
    
    
    8,636
    
    
    
    10,120Other current assets
    
    
    1,589
    
    
    
    2,282Total current assets
    
    
    29,640
    
    
    
    16,993Restricted cash
    
    
    2,163
    
    
    
    13,691Property, plant and equipment, net
    
    
    172,248
    
    
    
    99,595Other assets
    
    
    
    
    
    
    15,617Total
    
    
    204,051
    
    
    
    145,896Accounts payable
    
    
    23,576
    
    
    
    21,986Other current liabilities
    
    
    1,619
    
    
    
    119Other liabilities
    
    
    13,130
    
    
    
    86Minority interest
    
    
    106,290
    
    
    
    74,234Total
    
    
    144,615
    
    
    
    96,425Net assets
    
    $
    59,436
    
    
    $
    49,471
  September 29,2005Year Ended
    
    
    toDecember 31,
    
    
    December 31,2006
    
    
    2005Net sales
    
    $
    57,687
    
    
    $
    1,032Cost of goods sold
    
    
    (45,401
    )
    
    
    (471
    )Depreciation and amortization expense, excluding
depreciation and amortization expense
    
    
    (4,616
    )
    
    
    (588
    )Selling, general and administrative expense
    
    
    (6,084
    )
    
    
    (839
    )Operating income (loss)
    
    
    1,586
    
    
    
    (866
    )Interest income, net
    
    
    1,146
    
    
    
    224Income (loss) before minority interest
    
    $
    2,732
    
    
    $
    (642
    )
   70




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##### Table of Contents



17.
    
    Pension and Other Postretirement and Postemployment BenefitsAll of the Companys defined benefit pension plans in effect in 1998 were merged into plans
maintained by a subsidiary of WHX Corporation (the Companys former parent) during 1998. As a
result of the Companys reorganization, effective August 1, 2003, all of these defined benefit
pension plans were frozen. The Company has no remaining obligation under any of these plans.Pension and Other Postretirement PlansEffective August 1, 2003, the Company adopted a supplemental defined benefit pension plan for
all salaried employees employed as of January 31, 1998, which provides a guaranteed minimum
benefit based on years of service and compensation. The total benefit payable under this plan
is offset by the employees account balance in a salaried defined contribution pension plan, the
employees accrued benefit payable by the Pension Benefit Guaranty Corporation related to a
defined pension benefit plan terminated in 1985 and the employees accrued benefit payable as of
July 31, 2003 under a plan sponsored by WHX Corporation.Upon emergence from bankruptcy and pursuant to the collective bargaining agreement with the USW,
the Company agreed to provide enhanced benefits to up to 650 union employees who were retirement
eligible, and who elected to retire under a job buyout program offered by the Company. Under
terms of the plan, individuals electing to retire under the job buyout program were entitled to
receive a benefit of $40 payable in equal installments until the individual reached the age of
62 or for a period of two years, whichever was longer. Benefits under the job buyout program
are paid by the Company through its defined benefit pension plan. As a result, it was
determined that obligations under this plan should be included in and disclosed as a part of the
defined benefit pension plan as of December 31, 2005. Previously, the Company reported all
obligations owing under this plan in the balance sheet as employee benefits payable.The Company maintains health care and life insurance benefit plans for retired salaried
employees and for hourly employees retiring after October 1, 2003. Hourly employees who retired
prior to October 1, 2003 are provided similar benefits under a Voluntary Employee Benefits
Association (VEBA) trust (See Note 18). In general, these plans pay a percentage of medical
costs, reduced by deductibles and other coverages. The Company has an agreement with the USW to
limit or cap the per capita cost of benefits to be paid for periods subsequent to February 1,
2009 at the per capita cost incurred during the twelve-month period ending
January 1, 2009.The Companys health care and life insurance benefit plans for retired employees provides
prescription drug benefits. At December 31, 2004, a determination as to whether the Companys
prescription drug benefit plan was actuarially equivalent of benefits provided under Medicare
part D could not be made, pending issuance of final guidance on making such a determination.
During 2005, based on final guidance, a determination was made that the Companys prescription
drug benefit plan was actuarially equivalent to the prescription drug benefits under Medicare
Part D. As a result, the Company will qualify for a Federal subsidy relative to its
prescription drug benefit plan. The effect of this subsidy was to reduce the accumulated
postretirement benefit obligation by $12,778 at December 31, 2005 and to reduce the net periodic
benefit cost for postretirement benefits by $1,910 for the year ended December 31, 2005.The Company uses a December 31 measurement date for all benefit plans.
 71




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##### Table of Contents



Benefit obligation and funded status
  Pension Benefits
    
    
    
    Postretirement BenefitsDecember 31,
    
    
    
    December 31,2006
    
    
    2005
    
    
    
    2006
    
    
    2005Change in benefit obligation:Benefit obligation, beginning of year
    
    $
    9,302
    
    
    $
    4,187
    
    
    
    $
    95,588
    
    
    $
    91,568Service cost
    
    
    178
    
    
    
    157
    
    
    
    
    1,429
    
    
    
    1,458Interest cost
    
    
    457
    
    
    
    246
    
    
    
    
    5,475
    
    
    
    5,041Job buyout program
    
    
    
    
    
    
    4,616
    
    
    
    
    
    
    
    
    Actuarial (gain) loss
    
    
    421
    
    
    
    168
    
    
    
    
    (335
    )
    
    
    833Benefits paid
    
    
    (2,311
    )
    
    
    (72
    )
    
    
    
    (4,658
    )
    
    
    (3,312
    )Benefit obligation, end of year
    
    
    8,047
    
    
    
    9,302
    
    
    
    
    97,499
    
    
    
    95,588Change in plan assets:Fair value of plan assets, beginning of year
    
    
    6,633
    
    
    
    
    
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    878
    
    
    
    52
    
    
    
    
    
    
    
    
    Company contributions
    
    
    
    
    
    
    2,069
    
    
    
    
    4,658
    
    
    
    3,312Job buyout program assets
    
    
    
    
    
    
    4,584
    
    
    
    
    
    
    
    
    Benefits paid
    
    
    (2,311
    )
    
    
    (72
    )
    
    
    
    (4,658
    )
    
    
    (3,312
    )Fair value of plan assets, end of year
    
    
    5,200
    
    
    
    6,633
    
    
    
    
    
    
    
    
    Funded status of plans
    
    
    (2,847
    )
    
    
    (2,669
    )
    
    
    
    (97,499
    )
    
    
    (95,588
    )Unrecognized actuarial loss
    
    
    1,396
    
    
    
    1,502
    
    
    
    
    20,383
    
    
    
    21,879Unrecognized prior service cost (benefit)
    
    
    1,923
    
    
    
    2,147
    
    
    
    
    (24,098
    )
    
    
    (29,000
    )Net amount recognized
    
    $
    472
    
    
    $
    980
    
    
    
    $
    (101,214
    )
    
    $
    (102,709
    )Amounts recognized in consolidated
balance sheet:Before adoption of FASB No. 158:Intangible pension asset, included in
other assets
    
    $
    
    
    
    $
    1,434
    
    
    
    $
    
    
    
    $
    Employee benefits payable  current
    
    
    
    
    
    
    
    
    
    
    
    (4,683
    )
    
    
    (6,000
    )Employee benefits  noncurrent
    
    
    472
    
    
    
    (454
    )
    
    
    
    (96,531
    )
    
    
    (96,709
    )Net amount recognized
    
    $
    472
    
    
    $
    980
    
    
    
    $
    (101,214
    )
    
    $
    (102,709
    )After adoption of FASB No. 158:Intangible pension asset, included in
other assets
    
    $
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    Employee benefits payable  current
    
    
    
    
    
    
    
    
    
    
    
    (4,683
    )
    
    
    Employee benefits  noncurrent
    
    
    (2,847
    )
    
    
    
    
    
    
    
    (92,816
    )
    
    
    Net amount recognized
    
    $
    (2,847
    )
    
    $
    
    
    
    
    $
    (97,499
    )
    
    $
    
 72




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##### Table of Contents



Pension Benefits
    
    
    
    Postretirement BenefitsDecember 31,
    
    
    
    December 31,2006
    
    
    2005
    
    
    
    2006
    
    
    2005Amounts recognized in accumulated other
comprehensive income:Unrecognized actuarial loss
    
    $
    1,396
    
    
    $
    
    
    
    
    $
    20,383
    
    
    $
    Unrecognized prior service cost (benefit)
    
    
    1,923
    
    
    
    
    
    
    
    
    (24,098
    )
    
    
    Net amount recognized
    
    $
    3,319
    
    
    $
    
    
    
    
    $
    (3,715
    )
    
    $
    
   Components of net periodic benefit costs
  Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Pension benefitsNet periodic benefit cost:Service cost
    
    $
    178
    
    
    $
    157
    
    
    $
    78Interest cost
    
    
    457
    
    
    
    246
    
    
    
    116Expected return on plan assets
    
    
    (409
    )
    
    
    
    
    
    
    Amoritization of prior service cost
    
    
    224
    
    
    
    224
    
    
    
    129Recognized actuarial loss
    
    
    58
    
    
    
    108
    
    
    
    Net periodic benefit cost
    
    $
    508
    
    
    $
    735
    
    
    $
    323
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Postretirement benefitsNet periodic benefit cost:Service cost
    
    $
    1,429
    
    
    $
    1,458
    
    
    $
    2,232Interest cost
    
    
    5,475
    
    
    
    5,041
    
    
    
    6,642Amoritization of prior service cost
    
    
    (4,901
    )
    
    
    (4,901
    )
    
    
    (408
    )Recognized actuarial (gain) loss
    
    
    1,160
    
    
    
    928
    
    
    
    408Net periodic benefit cost
    
    $
    3,163
    
    
    $
    2,526
    
    
    $
    8,874
  Pension
    
    
    PostretirementBenefits
    
    
    BenefitsAmortization of prior service costs
    
    $
    224
    
    
    $
    (4,901
    )Recognized actuarial loss
    
    
    58
    
    
    
    886Total
    
    $
    282
    
    
    $
    (4,015
    )
 73




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##### Table of Contents



Assumptions
  At December 31,2006
    
    2005Expected long-term rate of return
    
    
    8.50
    %
    
    
    8.50
    %Discount rate  pension benefit obligation
    
    
    5.90
    %
    
    
    5.50
    %Discount rate  postretirement benefit oblgation
    
    
    5.90
    %
    
    
    5.75
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
 Years EndedDecember 31,2006
    
    2005
    
    2004Expected long-term rate of return
    
    
    8.50
    %
    
    
    8.50
    %
    
    
    0.00
    %Discount rate  pension benefit obligation
    
    
    5.50
    %
    
    
    5.75
    %
    
    
    6.00
    %Discount rate  postretirement benefit oblgation
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    6.00
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    0.00
    %
   At December 31,2006
    
    2005Health care cost trend rate assumed for next year
    
    
    10.00
    %
    
    
    10.00
    %Rate to which the cost trend rate gradually declines
    
    
    5.00
    %
    
    
    5.00
    %Year that the rate reaches the rate at which it is assumed to remain
    
    
    2014
    
    
    
    2012
  1%
    
    1%Increase
    
    DecreaseEffect on service and interest costs
    
    $
    31
    
    
    $
    (41
    )Effect on accumulated benefit obligation
    
    $
    93
    
    
    $
    (139
    )
 Plan Assets
  74




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##### Table of Contents



Percentage
    
    
    TargetPolicy
    
    
    December 31,
    
    
    PercentageAsset Category
    
    Range
    
    
    2006
    
    
    2005
    
    
    2007Money market funds
    
    
    5% - 15
    %
    
    
    8
    %
    
    
    100
    %
    
    
    10
    %Debt securities
    
    
    85% - 95
    %
    
    
    92
    %
    
    
    
    
    
    
    90
    %Total
    
    
    
    
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Cash Flows
  Pension
    
    PostretirementBenefits
    
    BenefitsEmployer contributions - 2007
    
    $
    Expected benefit payments:2007
    
    $
    1,673
    
    
    $
    4,6832008
    
    
    1,216
    
    
    
    5,4212009
    
    
    869
    
    
    
    6,2362010
    
    
    614
    
    
    
    7,0612011
    
    
    601
    
    
    
    7,8662012 - 2016
    
    
    4,348
    
    
    
    48,531
 Other Plans and Benefits
      75




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##### Table of Contents



obligation under the Act relates to its previous
ownership of coal mining operations. Amounts accrued for these obligations were $1,688 and
$1,987 at December 31, 2006 and 2005, respectively.The Company provides benefits to former or inactive employees after employment but before
retirement. Those benefits include, among others, disability, severance and workers
compensation. Amounts accrued for these obligations at December 31, 2006 and 2005 were $24,462
and $23,215, respectively. These amounts were determined using a discount rate of 5.75% at
December 31, 2006 and 2005, and are included in other employee benefit liabilities.18.
    
    VEBA and Profit Sharing PlansHourly employees who retired prior to October 1, 2003, are provided medical and life insurance
benefits through a VEBA trust. The VEBA trust was established on October 1, 2003 and was
pre-funded with 4 million shares of common stock of the Company. The Company is required to
make quarterly contributions to the VEBA trust based on varying levels of operating cash flow,
as defined by the plan, ranging from 12% to 40%, in addition to 15% of operating cash flow up to
$30 per ton. Quarterly contributions are payable in cash or, at the discretion of the Company,
in common stock of the Company.During 2006, the Company incurred VEBA expense of $9,402 under the plan. The Company satisfied
$5,914 of the obligation by issuing 293,719 shares of common stock to the plan during 2006. The
remaining portion of the obligation was settled in cash. During 2005, the Company incurred VEBA
expense of $4,725 under the plan. The Company satisfied $3,200 of the obligation by issuing
151,929 shares of common stock to the plan during 2005. The remaining portion of the obligation
was settled in cash. During 2004, the Company incurred VEBA expense of $11,662 under the plan.
The Company satisfied $6,527 of the obligation by issuing 44,069 and 169,622 shares of common
stock to the plan during 2005 and 2004, respectively. The remaining portion of the obligation
was settled in cash. At December 31, 2006, the VEBA trust held 2,140,826 shares of common stock
of the Company in trust.Effective October 1, 2003, the Company established a profit sharing plan for hourly and salaried
employees. The Company is required to make quarterly contributions to the plan ranging from 4%
to 15% of operating cash flow, as defined by the plan, in excess of $30 per ton. Quarterly
contributions are payable in cash or, at the discretion of the Company, in common stock of the
Company.During 2006, the Company incurred profit sharing expense of $4,365. The Company satisfied
$4,322 of this obligation by issuing 221,185 shares of common stock to the plan during 2006.
The remaining portion of the obligation was settled in cash. During 2005, the Company incurred
profit sharing expense of $143. The Company satisfied this obligation by issuing 7,968 shares
of common stock to the plan during 2005. During 2004, the Company incurred profit sharing
expense of $16,454. The Company satisfied this obligation by issuing 547,703 shares of common
stock to the plan during 2004.19.
    
    Income TaxesThe provision for income taxes consisted of the following:
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004CurrentFederal tax provision (benefit)
    
    $
    115
    
    
    $
    (50
    )
    
    $
    841State tax provision (benefit)
    
    
    
    
    
    
    (21
    )
    
    
    133Total
    
    
    115
    
    
    
    (71
    )
    
    
    974DeferredFederal tax provision
    
    
    4,129
    
    
    
    
    
    
    
    28,715State tax provision
    
    
    
    
    
    
    
    
    
    
    3,790Total
    
    
    4,129
    
    
    
    
    
    
    
    32,505Income tax provision (benefit)
    
    $
    4,244
    
    
    $
    (71
    )
    
    $
    33,479
 76




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##### Table of Contents



Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Income (loss) before taxes
    
    $
    10,523
    
    
    $
    (34,488
    )
    
    $
    95,710Tax provision (benefit) at statutory rate
    
    $
    3,683
    
    
    $
    (12,071
    )
    
    $
    33,499Increase (decrease) in tax due to:Equity income in affiliates
    
    
    (3,069
    )
    
    
    (2,558
    )
    
    
    (4,110
    )State income tax, net
    
    
    
    
    
    
    
    
    
    
    3,836Unrelated entity proxy fee expense
    
    
    600
    
    
    
    
    
    
    
    Recognition of pre-confirmation benefits
    
    
    4,129
    
    
    
    
    
    
    
    Change in valuation allowance
    
    
    (1,319
    )
    
    
    13,736
    
    
    
    279Other
    
    
    220
    
    
    
    822
    
    
    
    (25
    )Income tax provision (benefit)
    
    $
    4,244
    
    
    $
    (71
    )
    
    $
    33,479
  December 31,2006
    
    
    2005Assets:Postretirement and postemployment benefits
    
    $
    34,091
    
    
    $
    36,152Operating loss carryforwards (expiring 2011 - 2026)
    
    
    119,296
    
    
    
    113,883Mininum tax credit carryforwards
    
    
    797
    
    
    
    797Pension and other employee benefits
    
    
    11,257
    
    
    
    9,609Provision for expenses and losses
    
    
    18,906
    
    
    
    19,115Leases
    
    
    
    
    
    
    1,933State income taxes, net
    
    
    10,496
    
    
    
    11,052Other
    
    
    9,986
    
    
    
    11,055204,829
    
    
    
    203,596Liabilities:Property, plant and equipment
    
    
    (55,700
    )
    
    
    (56,636
    )Inventory
    
    
    (36,740
    )
    
    
    (32,699
    )State income taxes, net
    
    
    (10,496
    )
    
    
    (11,052
    )Other
    
    
    (324
    )
    
    
    (321
    )(103,260
    )
    
    
    (100,708
    )Net
    
    
    101,569
    
    
    
    102,888Valuation allowance
    
    
    (101,569
    )
    
    
    (102,888
    )Net deferred tax asset (liability)
    
    $
    
    
    
    $
    
  77




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##### Table of Contents



result of the ownership change annual limitations if not otherwise utilized to
offset built-in gains during the five-year period following the date of the ownership change.Due to uncertainties surrounding future realization of the net operating loss carryforward and
other tax benefits, a full valuation allowance has been provided by the Company against the net
deferred tax asset. To the extent that tax benefits are realized from the release of the
valuation allowance applicable to pre-confirmation tax benefits, the recognition of the tax
benefit is first used to reduce goodwill, then to reduce other intangible assets and finally to
increase additional paid-in capital. At December 31, 2006, the portion of the valuation
allowance applicable to pre-confirmation tax benefits approximated $43,588, all of which, when
released, will increase additional paid-in capital.The statute of limitations has expired for years through 2002. Federal income tax returns have
been examined through 1997. Additionally, while the Company is no longer affiliated with WHX,
the Companys former parent, the Companys tax attributes could be impacted by an audit of WHX
for those years in which the Company was a subsidiary of WHX.20.
    
    Common StockCommon stock share activity was as follows:
 Issued
    
    
    Treasury
    
    
    OutstandingBalance, December 31, 2003
    
    
    10,000,000
    
    
    
    
    
    
    
    10,000,000Stock issued  public offering
    
    
    3,719,898
    
    
    
    
    
    
    
    3,719,898Stock issued  employee benefit plans
    
    
    717,325
    
    
    
    
    
    
    
    717,325Restricted stock forfeiture
    
    
    
    
    
    
    4,000
    
    
    
    (4,000
    )Balance, December 31, 2004
    
    
    14,437,223
    
    
    
    4,000
    
    
    
    14,433,223Stock issued  employee benefit plans
    
    
    238,631
    
    
    
    
    
    
    
    238,631Stock issued  restricted stock award plan
    
    
    10,500
    
    
    
    
    
    
    
    10,500Restricted stock forfeiture
    
    
    
    
    
    
    2,666
    
    
    
    (2,666
    )Balance, December 31, 2005
    
    
    14,686,354
    
    
    
    6,666
    
    
    
    14,679,688Stock issued  employee benefit plans
    
    
    559,477
    
    
    
    
    
    
    
    559,477Stock options exercised
    
    
    28,965
    
    
    
    
    
    
    
    28,965Balance, December 31, 2006
    
    
    15,274,796
    
    
    
    6,666
    
    
    
    15,268,130
 21.
    
    Supplemental Cash Flow InformationCash payments for interest and taxes were as follows:
 Year EndedDecember 31,2006
    
    2005
    
    2004Interest, net of capitalized amounts
    
    $
    21,252
    
    
    $
    14,247
    
    
    $
    12,509Income taxes
    
    
    524
    
    
    
    181
    
    
    
    1,600
  78




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##### Table of Contents



22.
    
    Financial InstrumentsThe carrying value and the estimated fair value of the Companys financial instruments were as
follows:
 December 31, 2006
    
    December 31, 2005Fair Value
    
    Carrying Value
    
    Fair Value
    
    Carrying ValueCash and cash equivalents
    
    $
    21,842
    
    
    $
    21,842
    
    
    $
    8,863
    
    
    $
    8,863Short-term debt
    
    
    110,000
    
    
    
    110,000
    
    
    
    17,300
    
    
    
    17,300Long-term debt:Senior secured term loan
    
    
    193,650
    
    
    
    193,650
    
    
    
    218,650
    
    
    
    218,650Other (see discussion below)
    
    
    93,430
    
    
    
    93,430
    
    
    
    96,807
    
    
    
    96,807
 Cash and cash equivalentsThe carrying amount of cash and cash equivalents approximates fair value.Short-term debtShort-term debt carries a fair value rate of interest. The fair value of this instrument is
estimated to reasonably approximate its carrying value.Senior secured term loanThe senior secured term loan is a guaranteed loan and, as such, carries a fair value rate of
interest. The fair value of this instrument is estimated to reasonably approximate its carrying
value.Other long-term debtOther long-term debt is not publicly traded and carries rates of interest that may or may not
reflect a fair value rate of interest. The fair value of these instruments cannot be determined
with reasonable accuracy and may or may not approximate carrying value. For this reason, fair
value has been presented as being equal to carrying value in the table above.23.
    
    Commitments and ContingenciesEnvironmental MattersPrior to confirmation of the Companys plan of reorganization effective August 1, 2003, the
Company settled all pre-petition environmental claims made by state (Ohio, West Virginia,
Pennsylvania) and Federal (U.S. Environmental Protection Agency (USEPA)) environmental
regulatory agencies. Consequently, the Company believes that it has settled and/or discharged
environmental liability for any known Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA or Superfund) sites, pre-petition stipulated penalties related to active
consent decrees, or other pre-petition regulatory enforcement actions.During the second quarter of 2006, the Company received notification from the USEPA advising
that the USEPA and the Ohio Environmental Protection Agency (Ohio EPA) will conduct an inquiry
aimed at resolving various environmental matters, all of which are identified, discussed and
reserved for as noted below. These inquiries commenced during the third quarter of 2006 and
continued during the fourth quarter of 2006.The Company estimates that demands for stipulated penalties and fines for post-petition events
and activities through December 31, 2006 could total up to $3,260, which has been fully reserved
by the Company. These claims arise from instances in which the Company exceeded post-petition
consent decree terms, including: (a)
$2,442 related to a January 30, 1996 USEPA consent decree for the Companys coke oven gas
desulphurization facility; (b) $589 related to a July 1991 USEPA consent decree for water
discharges into the Ohio River; (c) $105 related to a September 20, 1999 Ohio EPA consent decree
for the Companys coke oven gas desulphurization facility; and (d) $124 related to a 1992 USEPA
consent order for other water discharges issues. The Company may have defenses to certain of
these exceedances.In September 2000, the Company entered into a consent order with the West Virginia Department of
Environmental Protection wherein the Company agreed to remove contaminated sediments from the
bed of the Ohio River. The Company estimates the cost of removal of the remaining contaminated
sediments to be $1,558
 79




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##### Table of Contents



Commitments
     80




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##### Table of Contents



GuaranteesIn March 2006, the Company entered into an operating lease for certain mobile equipment, which
contains a residual lease guarantee approximating $581. This residual lease guarantee has been
reflected in the financial statements as an obligation and is included in other current
liabilities.OtherThe Company is the subject of, or party to, a number of other pending or threatened legal
actions involving a variety of matters. However, based on information currently available,
management believes that the disposition of these matters will not have a material adverse
effect on the business, results of operations or the financial position of the Company.24.
    
    Subsequent EventsOn March 8, 2007, the Companys Board of Directors voted to approve a merger agreement between
the Company and Esmark Incorporated and voted to recommend that the stockholders adopt such
merger agreement.At December 31, 2006, the Company was in compliance with its financial covenants
 under its revolving credit agreement and its term loan agreement.  However, no
 assurance could be provided that the Company would be in compliance with such
 financial covenants for quarters ending after December 31, 2006.  In order to
 generate liquidity and to provide reasonable assurance that the Company will
 continue to be in compliance with its financial covenants for quarters ending after
 December 31, 2006, the Company effected the transactions described below
 subsequent to December 31, 2006.On March 15, 2007, certain institutional investors who are stockholders of the Company and Esmark,
and James P. Bouchard, the Companys Chairman and Chief Executive Officer, and Craig T. Bouchard,
the Companys Vice Chairman and President agreed to purchase convertible notes from the Company,
and on March 16, 2007, the Company received $50,000 and issued convertible subordinated
promissory notes. The debt will be convertible into the Companys common stock upon consummation
of a merger between the Company and Esmark at a price of $20 per share (and the holders of the
convertible notes will be permitted to participate in the Esmark merger as stockholders of the
Company), or if not consummated, at the election of the investors, the notes may be converted at an
alternative conversion price which will not be more than $20 per share or less than $15 per share
or shall be payable in cash on November 15, 2008, subject to limitations relative to the Companys
term loan agreement and revolving credit facility. Interest shall be payable in cash at a per
annum rate of 6% payable quarterly in arrears. In the event that the merger between the Company
and Esmark is not consummated by January 1, 2008, the per annum interest rate shall increase to 9%
per annum retroactively to the issuance date. The proceeds from such convertible debt will be used
to pay down indebtedness and for general corporate purposes.On March 16, 2007, the revolving credit agreement was amended to allow the
 Company to access collateral in excess of the $225,000 commitment under the
 facility.  If the minimum fixed charge coverage ratio is not met by the Company at
 the end of any quarter and excess collateral, as defined by the agreement, is
 available, the Company will be able to access up to $45,000 of such excess collateral
 over and above the $225,000 commitment amount and the Company will be required
 to maintain at least $50,000 of borrowing availability at all times.  Provided that
 sufficient collateral will support such borrowings, the Company will be permitted to
 borrow up to $220,000 under the facility.  The incremental amount of borrowing
 availability of up to $45,000 will decrease by $5,000 each quarter commencing with
 the fourth quarter of 2007 through the second quarter of 2008, and will be limited,
 thereafter, to up to $25,000 through, but not beyond, November 1, 2008.  On this
 date and thereafter, the previous requirement that the Company maintain minimum
 borrowing availability of $50,000 at all times without access to collateral beyond the
 $225,000 million amount of the facility, or to maintain a minimum fixed charge
 coverage ratio, will again be applicable.Effective March 16, 2007, the term loan agreement was amended to waive compliance with
 the requirement to maintain minimum borrowing availability of $50,000 at all times
 or to maintain a minimum fixed charge coverage ratio.  The agreement was further
 amended to eliminate the leverage and interest coverage ratios for the duration of the
 agreement.  In place of these covenants, a standalone fixed charge coverage ratio will
 take effect for the second quarter of 2008 and thereafter.  To effect the amendment,
 the Company agreed to use the proceeds from the issuance of $50,000 of convertible
 debt to make a principal prepayment of $37,500 under its term loan agreement,
 representing satisfaction of the next six quarterly principal payments due under the
 term loan agreement and to use the remaining proceeds for general corporate
 purposes.  The Company also agreed to amend the existing $12,500 standby letter of
 credit, previously posted in favor of the term loan lenders, to $11,000 to cover interest
 payment obligations to April 1, 2007.  The letter of credit will decline as such
 interest payments are made.  The term loan lenders and Loan Board also agreed to
 waive the excess cash flow mandatory repayment provisions of the agreement.  The
 amendment also provides authorization for us to merge with Esmark.  As part of the
 amendment, we also agreed, subject to consummation of the merger with Esmark, to
 repay or refinance the term loan in full on the later of April 1, 2008 or the date of
 such consummation and to release the Loan Board of any further obligation under the
 Federal guarantee as well as the West Virginia Housing Development Fund, the State
 guarantor, of any further obligation under the state guarantee.  In the event that the
 merger with Esmark is not consummated, we agreed to change the final maturity date of the loan
 from August 1, 2014 to August 1, 2010.
 81




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##### Table of Contents



25.
    
    Summarized Financial Information of AffiliateThe Company owns 35.7% of the outstanding common stock of Wheeling-Nisshin, Inc. which is
accounted for using the equity method of accounting. Summarized financial information for this
affiliate is as follows:
 December 31,2006
    
    
    2005Current assets
    
    $
    124,086
    
    
    $
    148,563Noncurrent assets
    
    
    42,145
    
    
    
    49,570Total assets
    
    $
    166,231
    
    
    $
    198,133Current liabilities
    
    $
    16,720
    
    
    $
    33,204Noncurrent liabilities
    
    
    9,978
    
    
    
    13,154Total liabilities
    
    
    26,698
    
    
    
    46,358Total equity
    
    
    139,533
    
    
    
    151,775Total liabilities and equity
    
    $
    166,231
    
    
    $
    198,133
 Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Net sales
    
    $
    557,917
    
    
    $
    468,875
    
    
    $
    543,295Cost of goods sold, excluding depreciation and
amortization expense
    
    
    512,121
    
    
    
    431,757
    
    
    
    481,640Depreciation and amortization expense
    
    
    10,198
    
    
    
    10,296
    
    
    
    10,254Other operating costs
    
    
    8,454
    
    
    
    8,315
    
    
    
    8,818Operating income
    
    
    27,144
    
    
    
    18,507
    
    
    
    42,583Non-operating income (loss)
    
    
    2,502
    
    
    
    2,486
    
    
    
    1,265Provision for income taxes
    
    
    (11,360
    )
    
    
    (7,960
    )
    
    
    (16,501
    )Net income
    
    $
    18,286
    
    
    $
    13,033
    
    
    $
    27,347
 26.
    
    Summarized Combined Financial InformationWheeling-Pittsburgh Steel Corporation (WPSC), a wholly-owned subsidiary of the Company, is the
issuer of the outstanding $40,000 Series A notes and $20,000 Series B notes. The Series A and
Series B notes were not registered under the Securities Act of 1933 or the Securities Act of
1934. The Series A notes and Series B notes are each fully and unconditionally guaranteed,
jointly and severally, by the Company and its present and future subsidiaries. WPSC and each
subsidiary guarantor of the Series A and Series B notes are 100%-owned by the Company. Because
the subsidiary guarantors are not material, individually and in the aggregate, the consolidating
financial information for the Company and the subsidiary guarantors has been combined below in
the column entitled WPC and Subsidiary Guarantors.
 82




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##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedAssetsCash and cash equivalents
    
    $
    
    
    
    $
    21,842
    
    
    $
    
    
    
    $
    21,842Trade accounts receivables
    
    
    
    
    
    
    138,513
    
    
    
    
    
    
    
    138,513Inventories
    
    
    
    
    
    
    212,221
    
    
    
    
    
    
    
    212,221Other current assets
    
    
    122
    
    
    
    27,789
    
    
    
    
    
    
    
    27,911Total current assets
    
    
    122
    
    
    
    400,365
    
    
    
    
    
    
    
    400,487Intercompany receivables
    
    
    
    
    
    
    10,778
    
    
    
    (10,778
    )
    
    
    Investments and advances in affiliates
    
    
    295,914
    
    
    
    53,585
    
    
    
    (295,914
    )
    
    
    53,585Property, plant and equipment  net
    
    
    2,255
    
    
    
    623,955
    
    
    
    
    
    
    
    626,210Restricted cash
    
    
    
    
    
    
    2,163
    
    
    
    
    
    
    
    2,163Other non-current assets
    
    
    896
    
    
    
    39,204
    
    
    
    
    
    
    
    40,100Total assets
    
    $
    299,187
    
    
    $
    1,130,050
    
    
    $
    (306,692
    )
    
    $
    1,122,545Liabilities and stockholders equityAccounts payable
    
    $
    
    
    
    $
    99,536
    
    
    $
    
    
    
    $
    99,536Short-term debt
    
    
    
    
    
    
    110,000
    
    
    
    
    
    
    
    110,000Other current liabilities
    
    
    2,094
    
    
    
    115,918
    
    
    
    
    
    
    
    118,012Total current liabilities
    
    
    2,094
    
    
    
    325,454
    
    
    
    
    
    
    
    327,548Intercompany payable
    
    
    10,778
    
    
    
    
    
    
    
    (10,778
    )
    
    
    Long-term debt
    
    
    
    
    
    
    254,961
    
    
    
    
    
    
    
    254,961Other non-current liabilities
    
    
    122
    
    
    
    147,431
    
    
    
    
    
    
    
    147,553Minority interest
    
    
    
    
    
    
    106,290
    
    
    
    
    
    
    
    106,290Stockholders equity
    
    
    286,193
    
    
    
    295,914
    
    
    
    (295,914
    )
    
    
    286,193Total liabilities and stockholders equity
    
    $
    299,187
    
    
    $
    1,130,050
    
    
    $
    (306,692
    )
    
    $
    1,122,545
 83




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##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2005
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedAssetsCash and cash equivalents
    
    $
    
    
    
    $
    8,863
    
    
    $
    
    
    
    $
    8,863Trade accounts receivables
    
    
    
    
    
    
    132,643
    
    
    
    
    
    
    
    132,643Inventories
    
    
    
    
    
    
    166,566
    
    
    
    
    
    
    
    166,566Other current assets
    
    
    122
    
    
    
    21,610
    
    
    
    
    
    
    
    21,732Total current assets
    
    
    122
    
    
    
    329,682
    
    
    
    
    
    
    
    329,804Intercompany receivables
    
    
    
    
    
    
    4,940
    
    
    
    (4,940
    )
    
    
    Investments and advances in affiliates
    
    
    267,569
    
    
    
    55,100
    
    
    
    (267,569
    )
    
    
    55,100Property, plant and equipment  net
    
    
    2,255
    
    
    
    555,245
    
    
    
    
    
    
    
    557,500Restricted cash
    
    
    
    
    
    
    13,691
    
    
    
    
    
    
    
    13,691Other non-current assets
    
    
    896
    
    
    
    63,257
    
    
    
    
    
    
    
    64,153Total assets
    
    $
    270,842
    
    
    $
    1,021,915
    
    
    $
    (272,509
    )
    
    $
    1,020,248Liabilities and stockholders equityAccounts payable
    
    $
    
    
    
    $
    117,821
    
    
    $
    
    
    
    $
    117,821Short-term debt
    
    
    
    
    
    
    17,300
    
    
    
    
    
    
    
    17,300Other current liabilities
    
    
    276
    
    
    
    124,485
    
    
    
    
    
    
    
    124,761Total current liabilities
    
    
    276
    
    
    
    259,606
    
    
    
    
    
    
    
    259,882Intercompany payable
    
    
    4,940
    
    
    
    
    
    
    
    (4,940
    )
    
    
    Long-term debt
    
    
    
    
    
    
    284,100
    
    
    
    
    
    
    
    284,100Other non-current liabilities
    
    
    122
    
    
    
    136,406
    
    
    
    
    
    
    
    136,528Minority interest
    
    
    
    
    
    
    74,234
    
    
    
    
    
    
    
    74,234Stockholders equity
    
    
    265,504
    
    
    
    267,569
    
    
    
    (267,569
    )
    
    
    265,504Total liabilities and stockholders equity
    
    $
    270,842
    
    
    $
    1,021,915
    
    
    $
    (272,509
    )
    
    $
    1,020,248
 84




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Year Ended December 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedIncome DataNet sales
    
    $
    
    
    
    $
    1,770,765
    
    
    $
    
    
    
    $
    1,770,765Cost of products sold
    
    
    
    
    
    
    1,621,799
    
    
    
    
    
    
    
    1,621,799Depreciation and amortizaton expense
    
    
    
    
    
    
    39,496
    
    
    
    
    
    
    
    39,496Selling, administrative and general expense
    
    
    8,129
    
    
    
    77,401
    
    
    
    
    
    
    
    85,530Operating income (loss)
    
    
    (8,129
    )
    
    
    32,069
    
    
    
    
    
    
    
    23,940Interest expense
    
    
    
    
    
    
    (26,749
    )
    
    
    
    
    
    
    (26,749
    )Other income including equity earnings
of affiliates
    
    
    14,725
    
    
    
    13,332
    
    
    
    (14,725
    )
    
    
    13,332Income before income taxes
    
    
    6,596
    
    
    
    18,652
    
    
    
    (14,725
    )
    
    
    10,523Income tax provision (benefit)
    
    
    115
    
    
    
    4,129
    
    
    
    
    
    
    
    4,244Income before minority interest
    
    
    6,481
    
    
    
    14,523
    
    
    
    (14,725
    )
    
    
    6,279Minority interest
    
    
    
    
    
    
    202
    
    
    
    
    
    
    
    202Net income
    
    $
    6,481
    
    
    $
    14,725
    
    
    $
    (14,725
    )
    
    $
    6,481
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Year Ended December 31, 2005
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedIncome DataNet sales
    
    $
    
    
    
    $
    1,560,513
    
    
    $
    
    
    
    $
    1,560,513Cost of products sold
    
    
    
    
    
    
    1,479,474
    
    
    
    
    
    
    
    1,479,474Depreciation and amortizaton expense
    
    
    
    
    
    
    33,984
    
    
    
    
    
    
    
    33,984Selling, administrative and general expense
    
    
    1,397
    
    
    
    70,155
    
    
    
    
    
    
    
    71,552Operating loss
    
    
    (1,397
    )
    
    
    (23,100
    )
    
    
    
    
    
    
    (24,497
    )Interest expense
    
    
    
    
    
    
    (21,834
    )
    
    
    
    
    
    
    (21,834
    )Other income including equity earnings
of affiliates
    
    
    (32,437
    )
    
    
    11,620
    
    
    
    32,660
    
    
    
    11,843Loss before income taxes
    
    
    (33,834
    )
    
    
    (33,314
    )
    
    
    32,660
    
    
    
    (34,488
    )Income tax provision (benefit)
    
    
    
    
    
    
    (71
    )
    
    
    
    
    
    
    (71
    )Loss before minority interest
    
    
    (33,834
    )
    
    
    (33,243
    )
    
    
    32,660
    
    
    
    (34,417
    )Minority interest
    
    
    
    
    
    
    583
    
    
    
    
    
    
    
    583Net loss
    
    $
    (33,834
    )
    
    $
    (32,660
    )
    
    $
    32,660
    
    
    $
    (33,834
    )
 85




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Year Ended December 31, 2004
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedIncome DataNet sales
    
    $
    
    
    
    $
    1,405,794
    
    
    $
    
    
    
    $
    1,405,794Cost of products sold
    
    
    
    
    
    
    1,206,773
    
    
    
    
    
    
    
    1,206,773Depreciation and amortizaton expense
    
    
    
    
    
    
    33,433
    
    
    
    
    
    
    
    33,433Selling, administrative and general expense
    
    
    1,503
    
    
    
    66,117
    
    
    
    
    
    
    
    67,620Operating income (loss)
    
    
    (1,503
    )
    
    
    99,471
    
    
    
    
    
    
    
    97,968Interest expense
    
    
    
    
    
    
    (19,778
    )
    
    
    
    
    
    
    (19,778
    )Other income including equity earnings
of affiliates
    
    
    63,260
    
    
    
    17,520
    
    
    
    (63,260
    )
    
    
    17,520Income before income taxes
    
    
    61,757
    
    
    
    97,213
    
    
    
    (63,260
    )
    
    
    95,710Income tax provision (benefit)
    
    
    (474
    )
    
    
    33,953
    
    
    
    
    
    
    
    33,479Net income
    
    $
    62,231
    
    
    $
    63,260
    
    
    $
    (63,260
    )
    
    $
    62,231
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Year Ended December 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    (262
    )
    
    $
    (8,790
    )
    
    $
    
    
    
    $
    (9,052
    )Investing activities:Capital expenditures
    
    
    
    
    
    
    (108,994
    )
    
    
    
    
    
    
    (108,994
    )Restricted cash used to fund capital expenditures
    
    
    
    
    
    
    11,528
    
    
    
    
    
    
    
    11,528Other
    
    
    
    
    
    
    3,084
    
    
    
    
    
    
    
    3,084Net cash used in investing activities
    
    
    
    
    
    
    (94,382
    )
    
    
    
    
    
    
    (94,382
    )Financing activities:Net borrowings
    
    
    
    
    
    
    63,329
    
    
    
    
    
    
    
    63,329Book overdraft
    
    
    
    
    
    
    (7,178
    )
    
    
    
    
    
    
    (7,178
    )Minority interest investment
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    60,000Issuance of common stock
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    262Net cash provided by financing activities
    
    
    262
    
    
    
    116,151
    
    
    
    
    
    
    
    116,413Net change in cash and cash equivalents
    
    
    
    
    
    
    12,979
    
    
    
    
    
    
    
    12,979Cash and cash equivalents, beginning of year
    
    
    
    
    
    
    8,863
    
    
    
    
    
    
    
    8,863Cash and cash equivalents, end of year
    
    $
    
    
    
    $
    21,842
    
    
    $
    
    
    
    $
    21,842
 86




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Year Ended December 31, 2005
Reorganized Company
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    11,557
    
    
    $
    
    
    
    $
    11,557Investing activities:Capital expenditures
    
    
    
    
    
    
    (103,710
    )
    
    
    
    
    
    
    (103,710
    )Restricted cash used to fund capital expenditures
expenditures
    
    
    
    
    
    
    (1,189
    )
    
    
    
    
    
    
    (1,189
    )Other
    
    
    
    
    
    
    2,650
    
    
    
    
    
    
    
    2,650Net cash used in investing activities
    
    
    
    
    
    
    (102,249
    )
    
    
    
    
    
    
    (102,249
    )Financing activities:Net borrowings
    
    
    
    
    
    
    (3,769
    )
    
    
    
    
    
    
    (3,769
    )Book overdraft
    
    
    
    
    
    
    12,126
    
    
    
    
    
    
    
    12,126Minority interest investment
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    60,000Net cash provided by financing activities
    
    
    
    
    
    
    68,357
    
    
    
    
    
    
    
    68,357Net change in cash and cash equivalents
    
    
    
    
    
    
    (22,335
    )
    
    
    
    
    
    
    (22,335
    )Cash and cash equivalents, beginning of year
    
    
    
    
    
    
    31,198
    
    
    
    
    
    
    
    31,198Cash and cash equivalents, end of year
    
    $
    
    
    
    $
    8,863
    
    
    $
    
    
    
    $
    8,863
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended December 31, 2004
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedNet cash provided by operating activities
    
    $
    
    
    
    $
    72,025
    
    
    $
    
    
    
    $
    72,025Investing activities:Capital expenditures
    
    
    
    
    
    
    (132,442
    )
    
    
    
    
    
    
    (132,442
    )Restricted cash used to fund capital expenditures
    
    
    
    
    
    
    74,636
    
    
    
    
    
    
    
    74,636Other
    
    
    (99,967
    )
    
    
    1,753
    
    
    
    99,967
    
    
    
    1,753Net cash used in investing activities
    
    
    (99,967
    )
    
    
    (56,053
    )
    
    
    99,967
    
    
    
    (56,053
    )Financing activities:Net borrowings
    
    
    
    
    
    
    (91,446
    )
    
    
    
    
    
    
    (91,446
    )Book overdraft
    
    
    
    
    
    
    2,208
    
    
    
    
    
    
    
    2,208Issuance of common stock and paid in capital
paid-in capital
    
    
    99,967
    
    
    
    99,697
    
    
    
    (99,967
    )
    
    
    99,697Net cash provided by financing activities
    
    
    99,967
    
    
    
    10,459
    
    
    
    (99,967
    )
    
    
    10,459Net change in cash and cash equivalents
    
    
    
    
    
    
    26,431
    
    
    
    
    
    
    
    26,431Cash and cash equivalents, beginning of year
    
    
    
    
    
    
    4,767
    
    
    
    
    
    
    
    4,767Cash and cash equivalents, end of year
    
    $
    
    
    
    $
    31,198
    
    
    $
    
    
    
    $
    31,198
 87




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##### Table of Contents



27. Revenues by Product (Unaudited)
  Year EndedDecember 31,2006
    
    
    2005
    
    
    2004Product:Hot Rolled
    
    $
    541,794
    
    
    $
    420,745
    
    
    $
    365,089Cold Rolled
    
    
    476,555
    
    
    
    471,235
    
    
    
    514,511Galvanized
    
    
    150,889
    
    
    
    109,264
    
    
    
    132,178Fabricated products
    
    
    507,087
    
    
    
    466,914
    
    
    
    375,090Ore, coke and coke by products
    
    
    79,471
    
    
    
    85,268
    
    
    
    9,074Conversion and other *
    
    
    14,969
    
    
    
    7,087
    
    
    
    9,852Total
    
    $
    1,770,765
    
    
    $
    1,560,513
    
    
    $
    1,405,794
 
 *
    
    Includes semi-finished, conversion and resale products. 28. Selected Quarterly Financial Information (Unaudited)
  Income (loss)
    
    
    
    
    
    Basic
    
    Fully Dilutedfrom
    
    Net
    
    Earnings
    
    EarningsContinuing
    
    Income
    
    (loss)
    
    (loss)Net Sales
    
    Operations
    
    (loss)
    
    Per Share
    
    Per Share20061st Quarter
    
    $
    436,978
    
    
    $
    (2,110
    )
    
    $
    (2,110
    )
    
    $
    (0.15
    )
    
    $
    (0.15
    )2nd Quarter
    
    
    493,925
    
    
    
    9,329
    
    
    
    9,329
    
    
    $
    0.64
    
    
    $
    0.633rd Quarter
    
    
    482,731
    
    
    
    17,352
    
    
    
    17,352
    
    
    $
    1.18
    
    
    $
    1.164th Quarter
    
    
    357,131
    
    
    
    (18,090
    )
    
    
    (18,090
    )
    
    $
    (1.20
    )
    
    $
    (1.20
    )20051st Quarter
    
    $
    399,508
    
    
    $
    8,100
    
    
    $
    8,100
    
    
    $
    0.57
    
    
    $
    0.562nd Quarter
    
    
    415,237
    
    
    
    2,627
    
    
    
    2,627
    
    
    $
    0.18
    
    
    $
    0.183rd Quarter
    
    
    374,891
    
    
    
    (21,147
    )
    
    
    (21,147
    )
    
    $
    (1.47
    )
    
    $
    (1.47
    )4th Quarter
    
    
    370,877
    
    
    
    (23,414
    )
    
    
    (23,414
    )
    
    $
    (1.61
    )
    
    $
    (1.61
    )20041st Quarter
    
    $
    274,206
    
    
    $
    (6,718
    )
    
    $
    (6,718
    )
    
    $
    (0.71
    )
    
    $
    (0.71
    )2nd Quarter
    
    
    356,121
    
    
    
    26,997
    
    
    
    26,997
    
    
    $
    2.84
    
    
    $
    2.793rd Quarter
    
    
    401,800
    
    
    
    35,534
    
    
    
    35,534
    
    
    $
    3.52
    
    
    $
    3.424th Quarter
    
    
    373,667
    
    
    
    6,418
    
    
    
    6,418
    
    
    $
    0.46
    
    
    $
    0.45
 88




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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 Item 9A. CONTROLS AND PROCEDURES
 Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  Attestation Report of Registered Public Accounting Firm
  Change in Internal Control Over Financial Reporting
  
 Item 9B. OTHER INFORMATION
  89




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PART III
 
 Item 10. DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE
  Name
    
    Age
    
    PositionJames P. Bouchard
    
    
    45
    
    
    Chariman of the Board, Chief Executive Officer
and Director of WPCCraig T. Bouchard
    
    
    53
    
    
    Vice Chairman, President and Director of WPCV. John Goodwin
    
    
    63
    
    
    Chief Executive Officer of WPSCThomas A. Modrowski
    
    
    50
    
    
    President and Chief Operating Officer of WPSCPaul J. Mooney
    
    
    55
    
    
    Executive Vice President and Chief
Financial Officer
of WPC and WPSCDavid A. Luptak
    
    
    49
    
    
    Executive Vice President , Secretary and General
Counsel of WPC and WPSCMichael P. DiClemente
    
    
    53
    
    
    Vice President and Treasurer of WPC and WPSCVincent D. Assetta
    
    
    42
    
    
    Vice President, Controller of WPC and WPSCAlbert G. Adkins
    
    
    59
    
    
    Director of WPCJames L. Bowen
    
    
    71
    
    
    Director of WPCClark Burrus
    
    
    78
    
    
    Director of WPCC. Frederick Fetterolf
    
    
    78
    
    
    Director of WPCJames V. Koch
    
    
    64
    
    
    Director of WPCGeorge Munoz
    
    
    55
    
    
    Director of WPCJoseph Peduzzi
    
    
    41
    
    
    Director of WPCJames A Todd
    
    
    78
    
    
    Director of WPCLynn R. Williams
    
    
    82
    
    
    Director of WPC
   90




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91




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92




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COMPOSITION OF THE BOARD OF DIRECTORS
    COMMITTEES OF THE BOARD OF DIRECTORS
  Audit Committee
  93




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Compensation Committee
  Nominating and Corporate Governance Committee
  Executive Committee
  Safety and Environmental Committee
  Finance Committee
  Code of Ethics
  Section 16(a) Beneficial Ownership Reporting Compliance
  94




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Item 11. EXECUTIVE COMPENSATION
  
 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 Principal Stockholders
  
    
    each person known by us to beneficially own more than 5% of the outstanding shares of common stock;
    
    each member of our Board of Directors;
    
    each of the executive officers listed in Item 10 above; and
    
    all of our directors and executive officers as a group.
  95




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Common SharesBeneficially OwnedName and Address of Beneficial Owner
    
    Number
    
    Percentage (1)Wellington Management Company, LLP (2)
    
    
    2,089,838
    
    
    
    13.62
    %Jeffery L. Gendell (3)
    
    
    1,968,781
    
    
    
    12.83
    %Wheeling-Pittsburgh Steel Corporation Retiree Benefits Plan Trust (4)
    
    
    1,775,206
    
    
    
    11.57
    %FMR Corp. (5)
    
    
    841,516
    
    
    
    5.48
    %Deutsche Bank AG (6)
    
    
    834,836
    
    
    
    5.44
    %Albert G. Adkins (7)
    
    
    113
    
    
    
    *James L. Bowen (7)
    
    
    9,500
    
    
    
    *Clark Burrus (7)
    
    
    113
    
    
    
    *C. Frederick Fetterolf (7)
    
    
    113
    
    
    
    *James V. Koch (7)
    
    
    1,368
    
    
    
    *George Munoz (7)
    
    
    7,713
    
    
    
    *Joseph Peduzzi (7)
    
    
    113
    
    
    
    *James A. Todd (7)
    
    
    113
    
    
    
    *Lynn R. Williams (7)
    
    
    8,930
    
    
    
    *James G. Bradley (8)
    
    
    22,000
    
    
    
    *James P. Bouchard (9)
    
    
    42,237
    
    
    
    *Craig T. Bouchard (9)
    
    
    37,638
    
    
    
    *V. John Goodwin
    
    
    
    
    
    
    *Thomas V. Modrowski
    
    
    
    
    
    
    *Paul J. Mooney (8)
    
    
    10,729
    
    
    
    *David A. Luptak
    
    
    
    
    
    
    *Michael P. DiClemente (8)
    
    
    3,500
    
    
    
    *Vincent D. Assetta (8)
    
    
    3,500
    
    
    
    *All executive officers and directors as a group (18 persons) (10)
    
    
    119,042
    
    
    
    *
 
 *
    
    Less than 1%.(1)
    
    As December 31, 2006, 16,469 shares of our common stock have been reserved for issuance
upon the resolution of certain disputed claims filed by our creditors. Shares of common stock
reserved for this purpose that are not ultimately required to be issued to satisfy disputed
claims will be distributed on a pro rata basis to the other members of that class of
creditors. Accordingly, as we settle disputed claims, the number of shares and the
corresponding percentage of common stock beneficially owned by certain persons listed in the
table may increase slightly over time without further action on the part of such persons.(2)
    
    The number of shares beneficially owned is based solely on information reported in Amendment
No.3 to Schedule 13G filed with the Securities and Exchange Commission by Wellington
Management Company, LLP on February 14, 2007 with respect to its holdings as of December 31,
2006. The address of Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109.(3)
    
    Represents 768,523 shares held by Tontine Partners, L.P., 458,821 shares held by Tontine
Overseas Associates, L.L.C.., 450,310 shares held by Tontine Capital Partners, L.P., 214,703
shares held by Tontine Capital Overseas Master Fund, L.P, and 76,424 shares held by Tontine
Capital Management, L.L.C. Tontine Management, L.L.C., the general partner of Tontine
Partners, L.P., has the power to direct the affairs of Tontine Partners, L.P., including
decisions with respect to the disposition of the proceeds from the sale of the shares.
Tontine Capital Management, L.L.C., the general partner of Tontine Capital Partners, L.P., has
the power to direct the affairs of Tontine Capital Partners, L.P., including decisions with
respect to the disposition of proceeds from the sale of the shares. Tontine Capital Overseas
GP, L.L.C., the general partner of Tontine Capital Overseas Master Fund, L.P., has the power
to direct the affairs of Tontine Capital Overseas Master Fund, L.P., including decisions with
respect to the disposition of proceeds from the sale of the shares. Jeffrey L. Gendell is the
managing member of Tontine Management, L.L.C., Tontine Overseas Associates, L.L.C., Tontine
Capital Management, L.L.C. and Tontine Capital Overseas GP, L.L.C.. and in that capacity directs their operations. The
foregoing management information and number of shares beneficially owned is based solely on
information reported in Amendment No.2 to Schedule 13D filed with the Securities and Exchange
Commission by Tontine Partners, L.P., Tontine Management, L.L.C., Tontine Overseas Associates,
L.L.C., Tontine Capital Partners, L.P., Tontine Capital Management, L.L.C., Tontine Capital
Overseas Master Fund, L.P., Tontine Capital Overseas GP, L.L.C. and Mr. Gendell on December 15,
2006. The 96




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address of Tontine Partners, L.P., Tontine Management, L.L.C., Tontine Overseas
Associates, L.L.C., Tontine Capital Partners, L.P., Tontine Capital Management, L.L.C., Tontine
Capital Overseas Fund, L.P., Tontine Capital Overseas GP, L.L.C. and Jeffrey L. Gendell is 55
Railroad Avenue, 1st Floor, Greenwich, Connecticut 06830.(4)
    
    Represents shares issued to the VEBA trust. These shares are held of record by WesBanco Bank,
Inc., as trustee of the VEBA trust, which is subject to the direction of U.S. Trust
Corporation in its capacity as independent fiduciary for the VEBA trust, with respect to the
disposition and voting of the shares. The address of U.S. Trust Corporation is 114 West
47thStreet, 25thFloor, New York, NY 10036-1532. The address of the
VEBA trust is c/o WesBanco Bank, Inc., as trustee, One Bank Plaza, Wheeling, West Virginia
26003. Amendment No.6 to Schedule 13G filed with the Securities and Exchange Commission by
U.S. Trust Corporation and U.S. Trust Company, N.A. on February 14, 2007 reports sole power to
dispose or direct the disposition of [2,141,036] additional shares and shared power to dispose
or to direct the disposition of 429,008 additional shares (or approximately 2.8% of the
outstanding common stock) held by U.S. Trust Company, N.A. in its capacity as trustee of our
salaried 401K plan.(5)
    
    The number of shares beneficially owned is based solely on information reported in Amendment
No. 1 to Schedule 13G filed with the Securities and Exchange Commission by FMR Corp. on
February 14, 2007 with respect to its holdings as of December 31, 2006. Fidelity Management &
Research Company, a wholly-owned subsidiary of FMR Corp. and a registered investment advisor,
is the beneficial owner of the shares as a result of acting as investment advisor to Fidelity
Low Priced Stock Fund. Edward C. Johnson 3rd and FRM Corp., through its control of Fidelity
Management & Research Company and Fidelity Low Priced Stock Fund, each has the sole power to
dispose of the shares. Members of the family of Edward C. Johnson 3rd, chairman of FMR Corp.,
through their ownership of voting common stock of FMR Corp. and the execution of a
shareholders voting agreement, may be deemed to form a controlling group with respect to FMR
Corp. Neither FMR Corp. nor Edward C. Johnson 3rdhas the sole power to vote or
direct the voting of the shares owned directly by the Fidelity Low Priced Stock Fund, which
power resides with the Fidelity Low Priced Stock Funds Board of Trustees. Fidelity
Management & Research Company carries out the voting of the shares under written guidelines
established by the Fidelity Low Priced Stock Funds Board of Trustees. The address of FMR
Corp., Fidelity Management & Research Company, Fidelity Low Priced Stock Fund and Edward C.
Johnson 3rd is 82 Devonshire Street, Boston, Massachusetts 02109.(6)
    
    Represents 834,536 shares held by Deutsche Bank AG, London Branch and 300 shares held by
Deutsche Bank Securities, Inc. The foregoing number of shares beneficially owned is based
solely on information reported in Schedule 13G filed with the Securities and Exchange
Commission by Deutsche Bank AG on February 1, 2007 with respect to their holdings as of
December 29, 2006. The address of Deutsche Bank AG is Taunusanlage 12, D-60325 Frankfurt am
Main, Federal Republic of Germany.(7)
    
    Represents shares issuable upon exercise of currently exercisable options to purchase shares
of WPC common stock.(8)
    
    Represents shares issued under our 2003 Restricted Stock Plan and under our 2003 Management
Incentive Stock Plan.(9)
    
    Includes 100 shares of common stock owned by The Bouchard Group LLC which may be deemed to be
beneficially owned by James P. Bouchard and 28,638 shares of common stock owned by Esmark
Incorporated which may be deemed to be beneficially owned by each
Messrs. James P. Bouchard and
Craig T. Bouchard. Messrs. Bouchard have disclaimed beneficial ownership of such interests. Also
includes 10,135 shares scheduled to be granted to James P. Bouchard and 6,757 shares scheduled to
be granted to Craig T. Bouchard on March 31, 2007 pursuant to their employment agreements with the
Company should each remain employed through such date.(10)
    
    Includes shares held by Messrs. Adkins, Bowen, Burrus, Fetterolf, Koch, Muñoz, Peduzzi, Todd,
Williams, Bradley, J. Bouchard, C. Bouchard, Goodwin, Modrowski, Mooney, Luptak, DiClemente
and Assetta reported as being beneficially owned by each such person in the beneficial
ownership table. The address of all such executive officers and directors is c/o
Wheeling-Pittsburgh Corporation, 1134 Market Street, Wheeling, West Virginia 26003. The same
28,638 shares of common stock beneficially owned by Messrs. J. Bouchard and C. Bouchard have
only been included in this amount once. 
 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  97




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Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 The following fees were billed by PricewaterhouseCoopers LLP to the Company for services performed
on behalf of the Company, as described below:
 Audit Fees
 Audit-Realted Fees:
 Tax Fees
 All Other Fees
 PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
  99




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PART IV
 
 Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  (a)(1) Financial Statements
  (a)(3) Exhibits
  EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT3.1(a)**
    
    Second Amended and Restated Certificate of Incorporation.3.1(b)**
    
    Certificate of Designation of Series A Junior Participating Preferred Stock of
Wheeling-Pittsburgh Corporation.3.2
    
    Second Amended and Restated By-laws (filed herewith).4.1*
    
    Indenture, dated August 1, 2003, between Wheeling-Pittsburgh Steel Corporation and
Bank One, N.A., as trustee.4.2*
    
    Indenture, dated August 1, 2003, between Wheeling-Pittsburgh Steel Corporation and
Bank One, N.A., as trustee.4.3*
    
    Form of Common Stock Certificate of Wheeling-Pittsburgh Corporation.10.1*
    
    Close Corporation and Shareholders Agreement, dated as of March 24, 1994 (as
amended), by and among Dong Yang Tinplate America Corp., Nippon Steel Trading
America, Inc. (f/k/a Nittetsu Shoji America), Wheeling-Pittsburgh Steel Corporation
and Ohio Coatings Company.10.2*
    
    Raw Material Supply Agreement, dated as of March 25, 1994, by and between
Wheeling-Pittsburgh Steel Corporation and Ohio Coatings Company.10.3*
    
    Distribution Agreement, dated as of January 1, 2003 (as amended), by and among
Nippon Steel Trading America, Inc. (f/k/a Nittetsu Shoji America),
Wheeling-Pittsburgh Steel Corporation and Ohio Coatings Company.10.4*
    
    Second Amended and Restated Shareholders Agreement, dated as of November 12, 1990,
by and between Wheeling-Pittsburgh Steel Corporation and Nisshin Steel Co., Ltd.10.5*
    
    Amended and Restated Supply Agreement, dated as of March 29, 1993, by and between
Wheeling-Pittsburgh Steel Corporation and Wheeling-Nisshin, Inc.10.6***
    
    Amended and Restated 2003 Management Stock Incentive Plan.10.7*
    
    2003 Management Restricted Stock Plan.10.8*
    
    Term Loan Agreement, dated as of July 31, 2003, by and among Wheeling-Pittsburgh
Corporation, Wheeling-Pittsburgh Steel Corporation, the several banks and other
financial institutions or entities from time to time party thereto, Lloyds TSB Bank
PLC, as documentation agent, Australia and New Zealand Banking Group Limited, as
syndication agent, Royal Bank of Canada, as administrative agent, Emergency Steel
Loan Guarantee Board, as federal guarantor, and West Virginia Housing Development
Group, as state guarantor.10.9*
    
    Modification and Assumption Agreement, dated as of June 12, 2003, between
Wheeling-Pittsburgh Steel Corporation and Danieli Corporation.10.10*
    
    Agreement for Supply of Equipment and Services, dated as of June 12, 2003, between
Junction Industries, Inc. and Wheeling-Pittsburgh Steel Corporation.
 100




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EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT10.11(a)*
    
    Lease for 201 Mississippi Street, Gary, IN, dated as of November 13, 1995, between
Great Lakes Industrial Partners, L.P. and Wheeling-Pittsburgh Steel Corporation, as
amended.10.11(b)*
    
    Lease for 9801 Alden Avenue, Lenexa, KS, dated as of March 27, 2000, between Lenexa
Alden, LLC and Wheeling-Pittsburgh Steel Corporation.10.11(c)*
    
    Lease for 8090 Woolery Way, Fallon, NV, dated as of August 1, 1999, between FBW
Leasecorp, Inc. and Wheeling-Pittsburgh Steel Corporation.10.11(d)*
    
    Leases for 4204 Fidelity Road, Fidelity Industrial Park, Houston, TX, dated January
16, 1986, and 4206-B Fidelity Road, Jacinto City, Harris County, TX, dated
September 21, 1988, between The Texas Development Company and Wheeling-Pittsburgh
Steel Corporation, as amended.10.11(e)*
    
    Lease for 20 Three Creek Road, Emporia, VA, dated August 17, 1998, between the
Industrial Development Authority of Greensville County, Virginia and Wheeling
Corrugating Company.10.11(f)*
    
    Lease for 2001 Highway 301, Palmetto, FL, dated April 27, 2000, between Palmetto
Business Park, LP and Wheeling-Pittsburgh Steel Corporation.10.12(a)
    
    Employment Agreement, effective April 1, 2006, between James G. Bradley and
Wheeling-Pittsburgh Steel Corporation (incorporated by reference to the Current
Report on Form 8-K (File No. 0-50300) of the Company, filed with the SEC on April
27, 2006).10.12(b)++
    
    Amended and Restated Employment Agreement, effective as of April 1, 2006, between
Paul J. Mooney and Wheeling-Pittsburgh Corporation.10.12(c)++
    
    Amended and Restated Employment Agreement, effective as of April 1, 2006, between
Steven W. Sorvold and Wheeling-Pittsburgh Corporation.10.12(d)++
    
    Amended and Restated Employment Agreement, effective as of August 3, 2006, between
Donald E. Keaton and Wheeling-Pittsburgh Corporation.10.12(e)++
    
    Amended and Restated Employment Agreement, effective as of August 3, 2006, between
Harry L. Page and Wheeling-Pittsburgh Steel Corporation.10.12(f)++
    
    Employment Agreement, effective as of September 1, 2006, between Vincent D. Assetta
and Wheeling-Pittsburgh Steel Corporation.10.12(g)++
    
    Employment Agreement, effective as of September 1, 2006, between Michael P.
DiClemente and Wheeling-Pittsburgh Steel Corporation.10.12(h)
    
    Amended and Restated Employment Agreement, effective as of December 19, 2006,
between James P. Bouchard and Wheeling-Pittsburgh Corporation (filed herewith).10.12(i)
    
    Amended and Restated Employment Agreement, effective as of December 19, 2006,
between Craig T. Bouchard and Wheeling-Pittsburgh Corporation (filed herewith).10.12(j)
    
    Employment Agreement, effective as of December 19, 2006, between David A. Luptak
and Wheeling-Pittsburgh Corporation (filed herewith).10.12(k)
    
    Employment Agreement, effective as of December 19, 2006, between V. John Goodwin
and Wheeling-Pittsburgh Steel Corporation (filed herewith).10.12(l)
    
    Employment Agreement, effective as of December 19, 2006, between Thomas A Modrowski
and Wheeling-Pittsburgh Steel Corporation (filed herewith).10.13(a)*
    
    Registration Rights Agreement, dated August 1, 2003 between Wheeling-Pittsburgh
Corporation and WesBanco Bank, Inc., solely in its capacity as trustee under the
VEBA trust.10.13(b)*
    
    Stock Transfer Restriction and Voting Agreement, dated August 1, 2003, by and among
Wheeling-Pittsburgh Corporation, United States Trust Company, N.A., as independent
fiduciary for the VEBA Trust, and WesBanco Bank, Inc., as trustee under the VEBA
Trust.10.14
    
    First Amendment and Waiver, dated June 25, 2004, to the Term Loan Agreement, dated
as of July 31, 2003, among Wheeling-Pittsburgh Corporation, Wheeling-Pittsburgh
Steel Corporation, the Lenders party thereto, the Documentation Agent and
Syndication Agent named therein, Royal Bank of Canada, as administrative agent, the
Emergency Steel Loan Guarantee Board and the West Virginia Housing Development Fund
(incorporated by reference to Form S-1 Registration Statement (File No. 333-116990)
of the Company, filed with the SEC on June 30, 2004, as amended).
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EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT10.15**
    
    Second Amendment, effective as of December 30, 2004, to the Term Loan Agreement,
dated as of July 31, 2003 (as amended), among Wheeling-Pittsburgh Corporation,
Wheeling-Pittsburgh Steel Corporation, Royal Bank of Canada, as administrative
agent, the Lenders party thereto, the Emergency Steel Loan Guarantee Board and the
West Virginia Housing Development Fund.10.16
    
    Amended and Restated Revolving Loan Agreement, dated as of July 8, 2005, by and
between Wheeling-Pittsburgh Corporation, Wheeling-Pittsburgh Steel Corporation, the
banks and other financial institutions from time to time party thereto, Royal Bank
of Canada, as administrative agent, General Electric Capital Corporation, as
inventory and receivables security agent and documentation agent, and The CIT
Group/Business Credit, Inc., Wachovia Bank, National Association and Fleet Capital
Corp., as syndication agents (incorporated by reference to the Current Report on
Form 8-K (File No. 0-50300) of the Company, filed with the SEC on
July 14, 2005).10.17+
    
    Amended and Restated Limited Liability Company Agreement of Mountain State Carbon,
LLC, dated September 29, 2005, by and between Wheeling-Pittsburgh Steel Corporation
and SNA Carbon, LLC.10.18+
    
    Coke Supply Agreement, dated September 29, 2005, by and between Wheeling-Pittsburgh
Steel Corporation and Mountain State Carbon, LLC.10.19+
    
    Third Amendment, effective as of September 29, 2005, to the Term Loan Agreement,
dated as of July 31, 2003 (as amended), among Wheeling-Pittsburgh Corporation,
Wheeling-Pittsburgh Steel Corporation, Royal Bank of Canada, as administrative
agent, the Lenders party thereto, the Emergency Steel Loan Guarantee Board and the
West Virginia Housing Development Fund.10.20***
    
    Fourth Amendment and Waiver, dated as of March 10, 2006, to the Term Loan Agreement,
dated as of July 31, 2003, among Wheeling-Pittsburgh Corporation,
Wheeling-Pittsburgh Steel Corporation, the Lenders party thereto, the Documentation
Agent and Syndication Agent named therein, the Administrative Agent named therein,
the Emergency Steel Loan Guarantee Board, and the West Virginia Housing Development
Fund.10.21***
    
    Form of Restricted Stock Unit Award Agreement.10.22++
    
    Wheeling-Pittsburgh Steel Corporation Supplemental Executive Retirement Plan.10.23
    
    Letter Agreement, dated February 6, 2007, between United States Trust Company, N.A.
(UST) and Wheeling-Pittsburgh Corporation regarding the Stock Transfer Restriction
and Voting Agreement, dated August 1, 2003, by and among Wheeling-Pittsburgh
Corporation, United States Trust Company, N.A., as independent fiduciary for the
VEBA Trust, and WesBanco Bank, Inc., as trustee under the VEBA Trust (filed
herewith).10.24
    
    Fifth Amendment, dated March 15, 2007, to the Term Loan Agreement, dated as of July 31, 2003
(as amended), among Wheeling-Pittsburgh Corporation, Wheeling-Pittsburgh Steel Corporation,
Royal Bank of Canada, as administrative agent, the Lenders party thereto, the Emergency Steel
Loan Guarantee Board and the West Virginia Housing Development fund (filed
herewith).10.25
    
    Second Amendment and Consent, dated March 16, 2007, to the Amended and Restated Revolving
Loan Agreement, among Wheeling-Pittsburgh Steel Corporation, Wheeling-Pittsburgh Corporation,
General Electric Capital Corporation, as administrative agent and the banks and other
financial institutions party thereto (filed
herewith).10.26
    
    Form of Note Purchase Agreement, dated March 15, 2007, entered into between
Wheeling-Pittsburgh Corporation and each of Bouchard 10S, LLC, Bouchard Group, LLC, Tontine
Capital Overseas Master Fund, L.P., Tontine Capital Partners, L.P., and Franklin Mutual
Advisers, LLC as agent for certain of its investor funds (filed
herewith).10.27
    
    Form of Senior Subordinated Unsecured Convertible Promissory Note of Wheeling-Pittsburgh
Corporation executed in favor of Bouchard 10S, LLC, Bouchard Group, LLC, Tontine Capital
Overseas Master Fund, L.P., Tontine Capital Partners, L.P., and Franklin Mutual Advisers, LLC
as agent for certain of its investor funds (filed
herewith).10.28
    
    Form of Registration Rights Agreement, dated March 15, 2007, by and among
Wheeling-Pittsburgh Corporation and Bouchard 10S, LLC, Bouchard Group, LLC, Tontine Capital
Overseas Master Fund, L.P., Tontine Capital Partners, L.P., and Franklin Mutual Advisers, LLC
as agent for certain of its investor funds (filed
herewith).21.1***
    
    Subsidiaries of Wheeling-Pittsburgh Corporation.23.1
    
    Consent of PricewaterhouseCoopers LLP, independent registered public accounting
firm (filed herewith).31.1
    
    Certification of James P. Bouchard, Chief Executive Officer of the Registrant,
required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    Certification of Paul J. Mooney, Chief Financial Officer of the Registrant,
required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    Certification of James P. Bouchard, Chief Executive Officer of the Registrant,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).32.2
    
    Certification of Paul J. Mooney, Chief Financial Officer of the Registrant,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
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*
    
    Incorporated by reference to the Form 10 Registration Statement (File No. 0-50300) of the
Company, filed with the SEC on August 8, 2003, as amended.**
    
    Incorporated by reference to the Annual Statement on Form 10-K (File No. 0-50300) of the
Company, filed with the SEC on March 14, 2005.***
    
    Incorporated by reference to the Annual Statement on Form 10-K (File No. 0-50300) of the
Company, filed with the SEC on March 14, 2006.+
    
    Incorporated by reference to the
Current Report on Form 8-K (File No. 0-50300) of Wheeling-Pittsburgh
Corporation, filed with the SEC on October 5, 2005++
    
    Incorporated by reference to the Quarterly Report on Form 10-Q (File
No. 0-50300) of Wheeling-Pittsburgh Corporation filed with the SEC on
November 13, 2006. 103




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SIGNATURES
  WHEELING-PITTSBURGH CORPORATIONBy:
    
    /s/ James P. BouchardName: James P. BouchardTitle: Chairman, Chief Executive Officer and DirectorDate: March 20, 2007
  Signature
    
    Title
    
    Date/s/ James P. Bouchard
    
    Chairman, Chief Executive Officer
    
    March 20, 2007James P. Bouchard
    
    and Director
(Principal Executive Officer)/s/ Paul J. Mooney
    
    Executive Vice President and Chief
    
    March 20, 2007Paul J. Mooney
    
    Financial Officer
(Principal Accounting Officer)/s/ Albert G. Adkins
    
    Director
    
    March 20, 2007Albert G. Adkins/s/ Craig T. Bouchard

Craig T. Bouchard
    
    Director
    
    March 20, 2007/s/ James L. Bowen.

James L. Bowen.
    
    Director
    
    March 20, 2007/s/ Clark Burrus

Clark Burrus
    
    Director
    
    March 20, 2007/s/ C. Frederick Fetterolf

C. Frederick Fetterolf
    
    Director
    
    March 20, 2007/s/ James V. Koch

James V. Koch
    
    Director
    
    March 20, 2007/s// George Muñoz

George Muñoz
    
    Director
    
    March 20, 2007/s/ Joseph Peduzzi

Joseph Peduzzi
    
    Director
    
    March 20, 2007/s/ James A. Todd

James A. Todd
    
    Director
    
    March 20, 2007/s/ Lynn R. Williams

Lynn R. Williams
    
    Director
    
    March 20, 2007
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