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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal quarter ended March 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
    
    Rights to Purchase Series A Junior ParticipatingPreferred Stock(Title of class)
    
    (Title of class)
 þ o
  o þ o
 o þ
 Applicable only to registrants involved in bankruptcy proceedings during the preceding five years:
 þ o




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TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements:Condensed Consolidated Statements of Operations (Unaudited)
    
    
    1Condensed Consolidated Balance Sheets (Unaudited)
    
    
    2Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    3Condensed Consolidated Statement of Stockholders Equity (Unaudited)
    
    
    4Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    32PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 6. Exhibits
    
    
    33SIGNATURES
    
    
    34EX-31.1EX-31.2EX-32.1EX-32.2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations (Unaudited)
 (Dollars in thousands, except per share amounts)
 Quarter EndedMarch 31,2006
    
    
    2005Revenues:Net sales, including sales to affiliates of $94,674 and $99,839
    
    $
    436,978
    
    
    $
    399,508Cost and expenses:Cost of sales, including cost of sales to affiliates of $92,682
and $93,073, excluding depreciation and amortization expense
    
    
    408,118
    
    
    
    355,958Depreciation and amortization expense
    
    
    8,307
    
    
    
    9,469Selling, general and administrative expense
    
    
    20,650
    
    
    
    19,317Total cost and expenses
    
    
    437,075
    
    
    
    384,744Operating (loss) income
    
    
    (97
    )
    
    
    14,764Interest expense and other financing costs
    
    
    (6,151
    )
    
    
    (5,580
    )Other income
    
    
    2,816
    
    
    
    2,968(Loss) income before income taxes
    
    
    (3,432
    )
    
    
    12,152Income tax provision
    
    
    
    
    
    
    4,052(Loss) income before minority interest
    
    
    (3,432
    )
    
    
    8,100Minority interest in loss of consolidated subsidiary
    
    
    1,322
    
    
    
    Net (loss) income
    
    $
    (2,110
    )
    
    $
    8,100(Loss) earnings per share:Basic
    
    $
    (0.15
    )
    
    $
    0.57Diluted
    
    $
    (0.15
    )
    
    $
    0.56Weighted average shares (in thousands):Basic
    
    
    14,516
    
    
    
    14,109Diluted
    
    
    14,516
    
    
    
    14,364
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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets (Unaudited)
 (Dollars in thousands)
 March 31,
    
    
    December 31,2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    9,578
    
    
    $
    8,863Accounts receivables, less allowance for doubtful accounts
of $2,716 and $2,594
    
    
    178,028
    
    
    
    132,643Inventories
    
    
    218,433
    
    
    
    166,566Prepaid expenses and deferred charges
    
    
    17,722
    
    
    
    21,732Total current assets
    
    
    423,761
    
    
    
    329,804Investment in and advances to affiliated companies
    
    
    47,155
    
    
    
    55,100Property, plant and equipment, less accumulated depreciation
of $84,126 and $75,977
    
    
    577,518
    
    
    
    557,500Deferred income tax benefits
    
    
    25,441
    
    
    
    26,264Restricted cash
    
    
    17,590
    
    
    
    13,691Other intangible assets, less accumulated amortization of $1,951 and $1,795
    
    
    4,569
    
    
    
    4,725Deferred charges and other assets
    
    
    13,101
    
    
    
    33,164Total assets
    
    $
    1,109,135
    
    
    $
    1,020,248LiabilitiesCurrent liabilities:Accounts payable, including book overdrafts of $17,029 and $21,020
    
    $
    130,788
    
    
    $
    117,821Short-term debt
    
    
    85,700
    
    
    
    17,300Payroll and employee benefits payable
    
    
    45,905
    
    
    
    41,125Accrued income and other taxes
    
    
    12,219
    
    
    
    11,735Deferred income taxes payable
    
    
    25,441
    
    
    
    26,264Accrued interest and other liabilities
    
    
    6,873
    
    
    
    5,757Deferred revenue
    
    
    4,106
    
    
    
    8,523Long-term debt due in one year
    
    
    31,534
    
    
    
    31,357Total current liabilities
    
    
    342,566
    
    
    
    259,882Long-term debt
    
    
    277,396
    
    
    
    284,100Employee benefits
    
    
    123,661
    
    
    
    123,498Other liabilities
    
    
    12,732
    
    
    
    13,030Total liabilities
    
    
    756,355
    
    
    
    680,510Minority interest in consolidated subsidiary
    
    
    88,363
    
    
    
    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; 14,700,956
and 14,686,354 issued; 14,694,290 and 14,679,688 shares outstanding
    
    
    147
    
    
    
    147Additional paid-in capital
    
    
    277,120
    
    
    
    276,097Accumulated deficit
    
    
    (12,750
    )
    
    
    (10,640
    )Treasury stock, 6,666 shares, at cost
    
    
    (100
    )
    
    
    (100
    )Total stockholders equity
    
    
    264,417
    
    
    
    265,504Total liabilities and stockholders equity
    
    $
    1,109,135
    
    
    $
    1,020,248
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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
 (Dollars in thousands)
 Quarter EndedMarch 31,2006
    
    
    2005Cash flows from operating activities:Net (loss) income
    
    $
    (2,110
    )
    
    $
    8,100Adjustments to reconcile net (loss) income to cash used in
operating activities:Depreciation and amortization expense
    
    
    8,307
    
    
    
    9,469VEBA, profit sharing and other stock transactions
    
    
    347
    
    
    
    2,199Other postretirement benefits
    
    
    (444
    )
    
    
    5Deferred compensation and stock options
    
    
    839
    
    
    
    703Equity income of affiliated companies, net of dividends
    
    
    8,345
    
    
    
    2,285Loss on disposition of assets
    
    
    3
    
    
    
    229Deferred income taxes
    
    
    
    
    
    
    3,732Minority interest
    
    
    (1,322
    )
    
    
    Other
    
    
    15
    
    
    
    Changes in current assets and current liabilities:Accounts receivable
    
    
    (45,385
    )
    
    
    (47,233
    )Inventories
    
    
    (51,867
    )
    
    
    (62,989
    )Other current assets
    
    
    4,010
    
    
    
    4,753Accounts payable
    
    
    16,958
    
    
    
    (15,352
    )Other current liabilities
    
    
    1,800
    
    
    
    5,252Other assets and liabilities, net
    
    
    5,823
    
    
    
    270Net cash used in operating activities
    
    
    (54,681
    )
    
    
    (88,577
    )Cash flows from investing activities:Payments from affiliates
    
    
    350
    
    
    
    900Investment in affiliates
    
    
    (750
    )
    
    
    Capital expenditures
    
    
    (28,172
    )
    
    
    (10,121
    )Restricted cash used to fund capital expenditures
    
    
    (3,899
    )
    
    
    12,502Proceeds from sale of assets
    
    
    
    
    
    
    214Net cash provided by (used in) investing activities
    
    
    (32,471
    )
    
    
    3,495Cash flows from financing activities:Book overdraft
    
    
    (3,991
    )
    
    
    4,501Net change in short-term debt
    
    
    68,400
    
    
    
    52,300Repayment of long-term debt
    
    
    (6,542
    )
    
    
    (321
    )Minority interest investment in subsidiary
    
    
    30,000
    
    
    
    Net cash provided by financing activities
    
    
    87,867
    
    
    
    56,480Increase (decrease) in cash and cash equivalents
    
    
    715
    
    
    
    (28,602
    )Cash and cash equivalents, beginning of period
    
    
    8,863
    
    
    
    31,198Cash and cash equivalents, end of period
    
    $
    9,578
    
    
    $
    2,596
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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated
Statement of Changes in Stockholders Equity (Unaudited)
 (Dollars in thousands)
 Additional
    
    
    AccumulatedPreferred
    
    
    Common
    
    
    Paid-in
    
    
    Earnings
    
    
    TreasuryStock
    
    
    Stock
    
    
    Capital
    
    
    (Deficit)
    
    
    Stock
    
    
    TotalBalance, December 31, 2004
    
    $
    
    
    
    $
    144
    
    
    $
    267,327
    
    
    $
    23,194
    
    
    $
    (60
    )
    
    $
    290,605Shares issued:Employee benefit plans
    
    
    
    
    
    
    3
    
    
    
    5,712
    
    
    
    
    
    
    
    
    
    
    
    5,715Restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock forfeiture
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    (40
    )
    
    
    Compensation expense
recognized
    
    
    
    
    
    
    
    
    
    
    2,687
    
    
    
    
    
    
    
    
    
    
    
    2,687Stock option grants
    
    
    
    
    
    
    
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    331Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,834
    )
    
    
    
    
    
    
    (33,834
    )Balance, December 31, 2005
    
    
    
    
    
    
    147
    
    
    
    276,097
    
    
    
    (10,640
    )
    
    
    (100
    )
    
    
    265,504Shares issued:Employee benefit plans
    
    
    
    
    
    
    
    
    
    
    184
    
    
    
    
    
    
    
    
    
    
    
    184Compensation expense
recognized
    
    
    
    
    
    
    
    
    
    
    749
    
    
    
    
    
    
    
    
    
    
    
    749Stock option grants
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    90Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,110
    )
    
    
    
    
    
    
    (2,110
    )Balance, March 31, 2006
    
    $
    
    
    
    $
    147
    
    
    $
    277,120
    
    
    $
    (12,750
    )
    
    $
    (100
    )
    
    $
    264,417
 Share Activity:
    
    Issued
    
    
    Treasury
    
    
    OutstandingBalance, December 31, 2004
    
    
    14,437,223
    
    
    
    4,000
    
    
    
    14,433,223Shares issued  employee benefit plans
    
    
    238,631
    
    
    
    
    
    
    
    238,631Restricted stock issued
    
    
    10,500
    
    
    
    
    
    
    
    10,500Restricted stock forfeiture
    
    
    
    
    
    
    2,666
    
    
    
    (2,666
    )Balance, December 31, 2005
    
    
    14,686,354
    
    
    
    6,666
    
    
    
    14,679,688Shares issued  employee benefit plans
    
    
    14,602
    
    
    
    
    
    
    
    14,602Balance, March 31, 2006
    
    
    14,700,956
    
    
    
    6,666
    
    
    
    14,694,290
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Notes to Condensed Consolidated Financial Statements (Unaudited)
 (Dollars in thousands, except per share amounts)
 1.
    
    Basis of PresentationThe condensed consolidated financial statements of Wheeling-Pittsburgh Corporation and
subsidiaries (WPC or the Company) are unaudited. In the opinion of management, these financial
statements reflect all recurring adjustments necessary to present fairly the consolidated
financial position of the Company and the results of its operations and the changes in its cash
flows for the periods presented.These financial statements, including notes thereto, have been prepared in accordance with
applicable rules of the Securities and Exchange Commission and do not include all of the
information and disclosures required by generally accepted accounting principles in the United
States of America for complete financial statements. The results reported in these financial
statements may not be indicative of the results that may be expected for the entire year. This
Form 10-Q should be read in conjunction with the Companys Form 10-K for the year ended December
31, 2005.2.
    
    New Accounting StandardsThe Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 156, Accounting for Servicing of Financial Assets  an Amendment of FASB
Statement No. 140, in March 2006. SFAS No. 156 requires that all separately recognized
servicing assets and liabilities be initially measured at fair value, if practicable, and
permits the subsequent remeasurement of servicing assets and liabilities at fair value. SFAS
No. 156 is effective for fiscal years beginning after September 15, 2006. The Company does not
expect this statement to have a material impact on its financial statements.The FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  an
Amendment of FASB Statements No. 133 and 140, in February 2006. SFAS No. 155 eliminates the
exemption from applying SFAS 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. SFAS 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 this statement to have a material impact on its financial statements.The FASB issued SFAS No. 154, Accounting Changes and Error Corrections, in May 2005. SFAS No.
154 requires retrospective application to prior periods financial statements of voluntary
changes in accounting principles, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. This statement also applies to
changes required by accounting pronouncements if the pronouncement does not provide for specific
transition provisions. SFAS No. 154 is effective for accounting changes made in fiscal years
beginning after December 15, 2005. The Company does not expect this statement to have a
material impact on its financial statements.The FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4, in
December 2004. SFAS No. 151 requires that abnormal amounts of idle facility expense, freight,
handling costs and wasted materials be recognized as current-period costs and not as
inventoriable costs. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005.
The Company does not expect this statement to have a material impact on its financial
statements.3.
    
    Business SegmentThe 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.
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4.
    
    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 $71,161 and $61,824 during the quarters ended March 31, 2006
and 2005, respectively. Sales to Wheeling-Nisshin are made at prevailing market prices. During
the quarter ended March 31, 2006, the Company purchased steel slabs from Wheeling-Nisshin, at
prevailing market prices, in the amount of $24,738. The Company reported dividends from
Wheeling-Nisshin of $10,715 and $5,000 during the quarters ended
March 31, 2006 and 2005, respectively. At March 31, 2006 and December 31, 2005, the Company had
accounts receivable due from Wheeling-Nisshin, Inc. of $4,823 and $3,439, respectively, and had
accounts payable to Wheeling-Nisshin of $2,915 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 $23,513
and $38,015 during the quarters ended March 31, 2006 and 2005, respectively. Sales to OCC are
made at prevailing market prices. At March 31, 2006 and December 31, 2005, the Company had
accounts receivable due from OCC of $7,913 and $8,852, respectively. At March 31, 2006 and
December 31, 2005, the Company has a loan receivable due from OCC of $7,350 and $7,700,
respectively, which bears interest at a variable rate, which currently approximates 6.3%. The
Company recorded interest income on the loan receivable of $121 and $111 during the quarters
ended March 31, 2006 and 2005, respectively, and received principal payments on the loan of $350
and $900 during the quarters ended March 31, 2006 and 2005, respectively.During the first quarter of 2006, the Company acquired a 50% interest in Jensen Bridge & Roofing
Company, LLC (Jensen Bridge), a joint venture, to produce and sell corrugated roofing products,
by contributing $750 of inventory to the joint venture. The joint venture is accounted for
using the equity method of accounting. The Company had sales to Jensen Bridge of $182 during
the quarter ended March 31, 2006. Sales to Jensen Bridge are made at prevailing market prices.
At March 31, 2006, the Company had accounts receivable due from Jensen Bridge of $182.5.
    
    Insurance RecoveryDuring the quarter ended March 31, 2006, the Company received $12,659 in partial settlement of a
business interruption insurance claim relating to an insurable event that occurred in December
2004. Of this amount, $7,299 was recorded as a reduction of cost of goods sold in the quarter
ended March 31, 2006 and $5,360 was recorded as a reduction of cost of goods sold in the quarter
ended December 31, 2005.6.
    
    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 vest,
subject to forfeiture, in increments of one-third of the total grant to each individual ratably
over three years. Of these shares, 329,334 shares have vested to-date, 164,000 shares will vest
two business days after the earnings release for the second quarter of 2006 and 6,666 shares
have been 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 vest, subject to
forfeiture, two business days after the earnings release for the second quarter of 2006. No shares of non-vested restricted stock vested under these plans during the quarters ended March
31, 2006 and 2005. No shares granted under these plans are subject to retirement eligible
provisions.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 the quarter ended March 31, 2005 had a grant date fair value of
$39.01 per share.A summary of activity under these plans as of March 31, 2006 and changes during the quarter then
ended is as follows:
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WeightedAverageGrant DateShares
    
    
    Fair ValueBalance, December 31, 2005
    
    
    174,500
    
    
    $
    16.44Restricted stock granted
    
    
    
    
    
    
    Restricted stock forfeited
    
    
    
    
    
    
    Restricted stock vested
    
    
    
    
    
    
    Balance, March 31, 2006
    
    
    174,500
    
    
    $
    16.44
 Compensation expense under these plans is equal to the grant date fair value of the non-vested
restricted stock issued, amortized over the vesting or requisite service period for each grant.
Compensation expense related to these plans amounted to $692 and $620 for the quarters ended
March 31, 2006 and 2005, respectively. At March 31, 2006, unrecognized compensation expense
relative to non-vested restricted stock amounted to
$917. This amount will be amortized to expense ratably through August 2006.Stock options:The Company maintains a stock option plan for non-employee directors of the Company pursuant to
which it granted stock options for 5,888 and 2,722 shares of its common stock during the
quarters ended March 31, 2006 and 2005, respectively, at an exercise price of $17.92 and $38.86
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. No stock options were
exercised during the quarters ended March 31, 2006 and 2005.The grant date fair value of stock options granted under the plan is estimated using the
Black-Scholes pricing model. The grant date fair value of stock options granted during the
quarters ended March 31, 2006 and 2005 was $15.37 and $30.64 per share, respectively,
determined using the following assumptions:
 Quarter EndedMarch 31,2006
    
    
    2005Average risk-free interest rate
    
    
    4.79
    %
    
    
    4.46
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    84.28
    %
    
    
    83.86
    %Expected life (years)
    
    
    10
    
    
    
    10
 A summary of activity under this plan as of March 31, 2006 and changes during the quarter then
ended is as follows:
 WeightedAverage
    
    
    AggregateExercise
    
    
    IntrinsicShares
    
    
    Price
    
    
    ValueOutstanding, December 31, 2005
    
    
    62,397
    
    
    $
    15.53Granted
    
    
    5,888
    
    
    
    17.92Exercised
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Outstanding, March 31, 2006
    
    
    68,285
    
    
    $
    15.73
    
    
    $
    349Exercisable, March 31, 2006
    
    
    68,285
    
    
    $
    15.73
    
    
    $
    349
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Stock
unit awards:
    7.
    
    Pension and Other Postretirement BenefitsNet periodic cost for pension and other postretirement benefits for employees and covered
dependents was as follows:
 Quarter EndedMarch 31,2006
    
    
    2005Components of net periodic cost:Service cost
    
    $
    425
    
    
    $
    414Interest cost
    
    
    1,456
    
    
    
    1,324Expected return on assets
    
    
    (102
    )
    
    
    Amortization of prior service credit
    
    
    (1,169
    )
    
    
    (1,197
    )Recognized actuarial loss
    
    
    271
    
    
    
    311Net periodic cost
    
    $
    880
    
    
    $
    852
  8




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8.
    
    VEBA and Profit Sharing ExpenseDuring the quarter ended March 31, 2006, the Company incurred a VEBA obligation of $163. The
Company expects to satisfy this obligation by issuing common stock to the VEBA trust in the
second quarter of 2006. No profit sharing obligation was incurred during the quarter ended
March 31, 2006. During the quarter ended March 31, 2005, the Company incurred a VEBA obligation
of $3,315. Of this amount, $750 was settled with pre-funded amounts, resulting in net VEBA
expense of $2,565 for the quarter. The Company satisfied $2,039 of the obligation by issuing
90,261 shares of common stock to the VEBA trust during the second quarter of 2005. The
remaining portion of the obligation was settled in cash. No profit sharing obligation was
incurred during the quarter ended March 31, 2005.9.
    
    Other IncomeOther income consisted of the following:
 Quarter EndedMarch 31,2006
    
    
    2005Equity income from affiliates
    
    $
    2,370
    
    
    $
    2,715Other income
    
    
    446
    
    
    
    253Total
    
    $
    2,816
    
    
    $
    2,968
 10.
    
    (Loss) Earnings Per ShareFor the quarters ended March 31, 2006 and 2005, a reconciliation of the numerator and
denominator for the calculation of basic and diluted (loss) earnings per share is as follows:
 Quarter EndedMarch 31,2006
    
    
    2005(Loss) income available to
common shareholders
    
    $
    (2,110
    )
    
    $
    8,100Weighed-average basic shares outstanding
    
    
    14,516
    
    
    
    14,109Dilutive effect of:Non-vested restricted stock
    
    
    
    
    
    
    233Stock unit awards
    
    
    
    
    
    
    Stock options
    
    
    
    
    
    
    22Weighed-average diluted shares outstanding
    
    
    14,516
    
    
    
    14,364Basic (loss) earnings per share
    
    $
    (0.15
    )
    
    $
    0.57Diluted (loss) earnings per share
    
    $
    (0.15
    )
    
    $
    0.56
  9




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##### Table of Contents



11.
    
    InventoriesInventories are valued at the lower of cost or market value. Cost is determined by the last-in
first-out (LIFO) method for substantially all inventories. Approximately 96% of inventories are
valued using the LIFO method.
 March 31,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    72,546
    
    
    $
    49,193In-process
    
    
    180,114
    
    
    
    155,860Finished products
    
    
    42,263
    
    
    
    28,870Other materials and supplies
    
    
    166
    
    
    
    152Total current cost
    
    
    295,089
    
    
    
    234,075Excess of current cost over carrying cost
    
    
    (76,656
    )
    
    
    (67,509
    )Carrying cost
    
    $
    218,433
    
    
    $
    166,566
  12.
    
    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 (MSC), 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 will acquire
approximately 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.At March 31, 2006 and December 31, 2005, the net assets of the joint venture included in the
consolidated balance sheet of the Company were as follows:
 10




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##### Table of Contents



March 31,
    
    
    December 31,2006
    
    
    2005Cash and cash equivalents
    
    $
    6,683
    
    
    $
    3,629Accounts receivable
    
    
    3,904
    
    
    
    962Inventory
    
    
    9,757
    
    
    
    10,120Other current assets
    
    
    2,198
    
    
    
    2,282Total current assets
    
    
    22,542
    
    
    
    16,993Restricted cash
    
    
    17,590
    
    
    
    13,691Property, plant and equipment, net
    
    
    117,361
    
    
    
    99,595Other assets
    
    
    267
    
    
    
    15,617Total
    
    
    157,760
    
    
    
    145,896Accounts payable
    
    
    15,598
    
    
    
    21,986Other current liabilities
    
    
    610
    
    
    
    119Other liabilities
    
    
    87
    
    
    
    86Minority interest
    
    
    88,363
    
    
    
    74,234Total
    
    
    104,658
    
    
    
    96,425Net assets
    
    $
    53,102
    
    
    $
    49,471
  Net sales
    
    $
    4,647Cost of goods sold
    
    
    (4,958
    )Depreciation and amortization expense
    
    
    (584
    )Selling, general and administrative expense
    
    
    (1,421
    )Operating loss
    
    
    (2,316
    )Interest income, net
    
    
    225Loss before minority interest
    
    $
    (2,091
    )
   13.
    
    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.The Company estimates that demands for stipulated penalties and fines for post-petition events
and activities through March 31, 2006 could total up to $2,868, which has been fully reserved by
the Company. These claims
 11




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##### Table of Contents



arise from instances in which the Company exceeded post-petition
consent decree terms, including: (a) $2,331 related to a January 30, 1996 USEPA consent decree
for the Companys coke oven gas desulphurization facility; (b) $414 related to a July 1991 USEPA
consent decree for water discharges into the Ohio River;
(c) $101 related to a September 20, 1999 Ohio EPA consent decree for the Companys coke oven gas
desulphurization facility, and (d) $22 related to a 1992 USEPA consent order for other water
discharges issues. The Company may have defenses to 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
$1,700 at March 31, 2006, which has been fully reserved by the Company. The Company currently
expects this work to be substantially complete by the end of 2007.The Company is under a final administrative order issued by the USEPA in June 1998 to conduct a
Resource Conservation and Recovery Act Facility Investigation to determine the nature and extent
of soil and groundwater contamination at its coke plant in Follansbee, West Virginia. USEPA
approved the Companys investigation work plan, and field activities were completed in 2004. The
Company submitted the results of this investigation to the USEPA in the third quarter of 2005.
It is expected that some remediation measures will be necessary and could commence within the
next three to five years. Based on a preliminary estimate of the range of the possible cost to
remediate, the Company has reserved $4,618 for such remediation measures.The Company has also accrued $400 related to a 1989 consent order issued by the USEPA for
surface impoundment issues at a coke plant facility owned by the MSC.In July 2005, an additional environmental liability was identified regarding the potential of
migration of subsurface oil from historical operations into waters of the Commonwealth of
Pennsylvania. Consequently, a remediation plan was developed, and implementation of this plan
commenced in the fourth quarter of 2005. An estimated expenditure of about $181 is expected to
be made during 2006 to address this environmental liability.Total accrued environmental liabilities amounted to $9,767 and $9,872 at March 31, 2006 and
December 31, 2005, respectively. These accruals were based on all information available to the
Company. As new information becomes available, whether from third parties or otherwise, and as
environmental regulations change, the liabilities are reviewed and adjusted accordingly. Unless
stated above, the time frame over which these liabilities will be satisfied is presently
unknown. Further, the Company considers it reasonably possible that it could ultimately incur
additional liabilities relative to the above exposures of up to $5,000.Capital expenditures for environmental projects totaled $1,940 during the first quarter of 2006.
The Company estimates capital expenditures for environmental projects to be $16,890 for 2006,
$6,750 for 2007 and
$6,500 for 2008. However, due to the possibility of unanticipated factual or regulatory
developments, the amount and timing of future capital expenditures may vary substantially from
such estimates.CommitmentsIn June 2005, the Company entered into a contract to purchase up to 20,000 tons of metallurgical
coal each month for the period August 2006 through May 2007 at a price of $94.50 per ton.
Approximately 33,000 tons were pre-delivered under the terms of the contract during the first
quarter of 2006. The contract requires the Company to pay an average buy-out cost of $7.50 per
ton for each ton of coal that is not taken under the contract. In addition, the Company made a
prepayment of $5,100 under the terms of the contract, which will be applied ratably to reduce
the cash cost of each ton of coal delivered under the contract. This prepayment will be
forfeited if coal is not taken under the contract.In 2004, the Company entered into a take-or-pay contract to purchase coal each month with a
minimum monthly charge of approximately $700. In January 2006, the Company extended this
contract to purchase up to 11,500 tons of coal each month through December 31, 2007 at a price
ranging from $60 to $65 per ton. Payments for delivery of coal under this contract totaled $884
and $2,900 during the quarters ended March 31, 2006 and 2005, respectively.
 12




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##### Table of Contents



The Company entered into a 15-year take-or-pay contract in 1999, which was amended in 2003 and
requires the Company to purchase oxygen, nitrogen and argon each month with a minimum monthly
charge of approximately $600, subject to escalation clauses. Payments for delivery of oxygen
under this contract totaled $2,770 and $2,316 during the quarters ended March 31, 2006 and 2005,
respectively.The Company entered into a 20-year contract in 1999, which was amended in 2003 and requires the
Company to purchase steam and electricity each month or pay a minimum monthly charge of
approximately $500, 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. Payments for delivery of
steam and electricity under this contract totaled $2,783 and $2,412 during the quarters ended
March 31, 2006 and 2005, respectively. At March 31, 2006, a maximum termination payment of
approximately $30,675 would have been required to terminate the contract.Under terms of MSCs joint venture agreement, the Company and SNA Carbon have committed to spend
approximately $64,600, $12,100, $9,000 and $8,300 in 2006, 2007, 2008 and 2009, respectively, to
refurbish a coke plant facility owned by MSC. SNA Carbon is committed to provide $60,000 in
2006 to fund these expenditures.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.14.
    
    Summarized Combined Financial InformationWheeling-Pittsburgh Steel Corporation (WPSC), a wholly-owned subsidiary of the Company, is the
issuer of the outstanding $40 million Series A notes and $20 million 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 combined
consolidating financial information for the Company and the subsidiary guarantors has been
combined below in the column entitled WPC and Subsidiary Guarantors.
 13




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CONDENSED CONSOLIDATING BALANCE SHEET  March 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedAssetsCash and cash equivalents
    
    $
    
    
    
    $
    9,578
    
    
    $
    
    
    
    $
    9,578Trade accounts receivables
    
    
    
    
    
    
    178,028
    
    
    
    
    
    
    
    178,028Inventories
    
    
    
    
    
    
    218,433
    
    
    
    
    
    
    
    218,433Other current assets
    
    
    122
    
    
    
    17,600
    
    
    
    
    
    
    
    17,722Total current assets
    
    
    122
    
    
    
    423,639
    
    
    
    
    
    
    
    423,761Intercompany receivables
    
    
    
    
    
    
    5,360
    
    
    
    (5,360
    )
    
    
    Investments and advances in affiliates
    
    
    268,411
    
    
    
    47,155
    
    
    
    (268,411
    )
    
    
    47,155Property, plant and equipment, net
    
    
    2,255
    
    
    
    575,263
    
    
    
    
    
    
    
    577,518Restricted cash
    
    
    
    
    
    
    17,590
    
    
    
    
    
    
    
    17,590Other non-current assets
    
    
    896
    
    
    
    42,215
    
    
    
    
    
    
    
    43,111Total assets
    
    $
    271,684
    
    
    $
    1,111,222
    
    
    $
    (273,771
    )
    
    $
    1,109,135Liabilities and stockholders equityAccounts payable
    
    $
    1,500
    
    
    $
    129,288
    
    
    $
    
    
    
    $
    130,788Other current liabilities
    
    
    285
    
    
    
    211,493
    
    
    
    
    
    
    
    211,778Total current liabilities
    
    
    1,785
    
    
    
    340,781
    
    
    
    
    
    
    
    342,566Intercompany payable
    
    
    5,360
    
    
    
    
    
    
    
    (5,360
    )
    
    
    Long-term debt
    
    
    
    
    
    
    277,396
    
    
    
    
    
    
    
    277,396Other non-current liabilities
    
    
    122
    
    
    
    136,271
    
    
    
    
    
    
    
    136,393Minority interest
    
    
    
    
    
    
    88,363
    
    
    
    
    
    
    
    88,363Stockholders equity
    
    
    264,417
    
    
    
    268,411
    
    
    
    (268,411
    )
    
    
    264,417Total liabilities and stockholders equity
    
    $
    271,684
    
    
    $
    1,111,222
    
    
    $
    (273,771
    )
    
    $
    1,109,135
 14




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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
    
    
    $
    
    
    
    $
    117,821Other current liabilities
    
    
    276
    
    
    
    141,785
    
    
    
    
    
    
    
    142,061Total 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
 15




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS  Quarter Ended March 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedIncome DataNet sales
    
    $
    
    
    
    $
    436,978
    
    
    $
    
    
    
    $
    436,978Cost of sales
    
    
    
    
    
    
    408,118
    
    
    
    
    
    
    
    408,118Depreciation and amortizaton expense
    
    
    
    
    
    
    8,307
    
    
    
    
    
    
    
    8,307Selling, administrative and general expense
    
    
    2,019
    
    
    
    18,631
    
    
    
    
    
    
    
    20,650Operating income (loss)
    
    
    (2,019
    )
    
    
    1,922
    
    
    
    
    
    
    
    (97
    )Interest expense
    
    
    
    
    
    
    (6,151
    )
    
    
    
    
    
    
    (6,151
    )Other income including equity earnings
of affiliates
    
    
    (91
    )
    
    
    2,816
    
    
    
    91
    
    
    
    2,816Loss before income taxes
    
    
    (2,110
    )
    
    
    (1,413
    )
    
    
    91
    
    
    
    (3,432
    )Income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss before minority interest
    
    
    (2,110
    )
    
    
    (1,413
    )
    
    
    91
    
    
    
    (3,432
    )Minority interest
    
    
    
    
    
    
    1,322
    
    
    
    
    
    
    
    1,322Net loss
    
    $
    (2,110
    )
    
    $
    (91
    )
    
    $
    91
    
    
    $
    (2,110
    )
 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS  Quarter Ended March 31, 2005
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedIncome DataNet sales
    
    $
    
    
    
    $
    399,508
    
    
    $
    
    
    
    $
    399,508Cost of sales
    
    
    
    
    
    
    355,958
    
    
    
    
    
    
    
    355,958Depreciation and amortizaton expense
    
    
    
    
    
    
    9,469
    
    
    
    
    
    
    
    9,469Selling, administrative and general expense
    
    
    480
    
    
    
    18,837
    
    
    
    
    
    
    
    19,317Operating income (loss)
    
    
    (480
    )
    
    
    15,244
    
    
    
    
    
    
    
    14,764Interest expense
    
    
    
    
    
    
    (5,580
    )
    
    
    
    
    
    
    (5,580
    )Other income including equity earnings
of affiliates
    
    
    8,580
    
    
    
    2,968
    
    
    
    (8,580
    )
    
    
    2,968Income before income taxes
    
    
    8,100
    
    
    
    12,632
    
    
    
    (8,580
    )
    
    
    12,152Income tax provision
    
    
    
    
    
    
    4,052
    
    
    
    
    
    
    
    4,052Net income
    
    $
    8,100
    
    
    $
    8,580
    
    
    $
    (8,580
    )
    
    $
    8,100
 16




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  Quarter Ended March 31, 2006
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedNet cash used in operating activities
    
    $
    
    
    
    $
    (54,681
    )
    
    $
    
    
    
    $
    (54,681
    )Investing activities:Capital expenditures
    
    
    
    
    
    
    (28,172
    )
    
    
    
    
    
    
    (28,172
    )Change in restricted cash used to fund
capital expenditures
    
    
    
    
    
    
    (3,899
    )
    
    
    
    
    
    
    (3,899
    )Other
    
    
    
    
    
    
    (400
    )
    
    
    
    
    
    
    (400
    )Net cash used in investing activities
    
    
    
    
    
    
    (32,471
    )
    
    
    
    
    
    
    (32,471
    )Financing activities:Net borrowings
    
    
    
    
    
    
    61,858
    
    
    
    
    
    
    
    61,858Change in book overdraft
    
    
    
    
    
    
    (3,991
    )
    
    
    
    
    
    
    (3,991
    )Minority interest in consolidated subsidiary
    
    
    
    
    
    
    30,000
    
    
    
    
    
    
    
    30,000Net cash provided by financing activities
    
    
    
    
    
    
    87,867
    
    
    
    
    
    
    
    87,867Net change in cash and cash equivalents
    
    
    
    
    
    
    715
    
    
    
    
    
    
    
    715Cash and cash equivalents, beginning of period
    
    
    
    
    
    
    8,863
    
    
    
    
    
    
    
    8,863Cash and cash equivalents, end of period
    
    $
    
    
    
    $
    9,578
    
    
    $
    
    
    
    $
    9,578
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS  Quarter Ended March 31, 2005
 ConsolidatingWPC and
    
    
    
    
    
    
    andSubsidiary
    
    
    
    
    
    
    Eliminating
    
    
    WPCGuarantors
    
    
    WPSC
    
    
    Entries
    
    
    ConsolidatedNet cash provided by (used in) operating
activities
    
    $
    4
    
    
    $
    (88,581
    )
    
    $
    
    
    
    $
    (88,577
    )Investing activities:Capital expenditures
    
    
    (4
    )
    
    
    (10,117
    )
    
    
    
    
    
    
    (10,121
    )Change in restricted cash used to fund
capital expenditures
    
    
    
    
    
    
    12,502
    
    
    
    
    
    
    
    12,502Other
    
    
    
    
    
    
    1,114
    
    
    
    
    
    
    
    1,114Net cash provided by (used in) investing
activities
    
    
    (4
    )
    
    
    3,499
    
    
    
    
    
    
    
    3,495Financing activities:Net borrowings
    
    
    
    
    
    
    51,979
    
    
    
    
    
    
    
    51,979Change in book overdraft
    
    
    
    
    
    
    4,501
    
    
    
    
    
    
    
    4,501Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    
    
    
    
    56,480
    
    
    
    
    
    
    
    56,480Net decrease in cash and cash equivalents
    
    
    
    
    
    
    (28,602
    )
    
    
    
    
    
    
    (28,602
    )Cash and cash equivalents, beginning of period
    
    
    
    
    
    
    31,198
    
    
    
    
    
    
    
    31,198Cash and cash equivalents, end of period
    
    $
    
    
    
    $
    2,596
    
    
    $
    
    
    
    $
    2,596
 17




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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Certain sections of Managements Discussion and Analysis of Financial Condition and Results of
Operations relate to future events and expectations and, as such, constitute forward-looking
statements. These statements often include words such as anticipate, believe, estimate,
expect, intend, plan, project, target, can, could, may, should, will, would
or similar expressions. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or achievements to be
different form those expressed or implied in the forward-looking statements. For a discussion of
some of the risk factors that may cause such a difference, see Note 13 to the Condensed
Consolidated Financial Statements, the disclosures included below under Quantitative and
Qualitative Disclosures About Market Risk, and in Item 1, Financial Statements, of this Quarterly
Report on Form 10-Q and Item IA, Risk Factors, in our Annual Report on Form 10-K for the fiscal
year ended  December 31, 2005.
 OVERVIEW
 ®
    Recent Developments
 Background
  18




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##### Table of Contents



Shipments, Pricing and Production
    Raw Materials
  Potential Insurance Recovery
  Credit Arrangements and Covenant Compliance
   19




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##### Table of Contents



Stock unit awards
  RESULTS OF OPERATIONS
 Quarter ended March 31, 2006 versus quarter ended March 31, 2005
      20




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Cash Flow from Operating Activities
   Cash Flow from Investing Activities
   Cash Flow from Financing Activities
   21




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##### Table of Contents



Liquidity and Capital Resources
    $250 Million Term Loan Agreement
     22




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##### Table of Contents



$225 Million Revolving Credit Facility
    $40 Million Series A Notes
  23




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##### Table of Contents



20 Million Series B Notes
  10 Million Unsecured Note
   Collateral TypeTangible and Intangible Assets andJoint 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
  24




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##### Table of Contents



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
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.
 
    
    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
7.3% per annum.
 CONTRACTUAL COMMITMENTS
  Contractual Payments Due(Dollars in millions)
 RemainingPortion of
    
    
    2007 to
    
    
    2009 toTotal
    
    
    
    
    
    
    2006
    
    
    2008
    
    
    2010
    
    
    ThereafterLong-term debt (1)
    
    $
    302.0
    
    
    
    
    
    
    $
    24.0
    
    
    $
    205.2
    
    
    $
    23.9
    
    
    $
    48.9Capital leases (2)
    
    
    6.9
    
    
    
    
    
    
    
    0.8
    
    
    
    1.5
    
    
    
    1.5
    
    
    
    3.1Long-term operating leases (3)
    
    
    24.1
    
    
    
    
    
    
    
    2.9
    
    
    
    7.4
    
    
    
    6.1
    
    
    
    7.7Other long term liabilities:Steelworker Pension Trust
    
    
    25.9
    
    
    
    (4
    )
    
    
    8.3
    
    
    
    17.6
    
    
    
    
    
    
    
    OPEB
    
    
    27.0
    
    
    
    (5
    )
    
    
    3.4
    
    
    
    10.4
    
    
    
    13.2
    
    
    
    Coal miner retiree medical
    
    
    3.7
    
    
    
    
    
    
    
    0.1
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    3.0Workers compensation
    
    
    28.3
    
    
    
    (6
    )
    
    
    4.7
    
    
    
    12.5
    
    
    
    11.1
    
    
    
    Special bonus payment
    
    
    5.0
    
    
    
    (7
    )
    
    
    5.0
    
    
    
    
    
    
    
    
    
    
    
    Purchase commitments:Oxygen supply
    
    
    97.5
    
    
    
    (8
    )
    
    
    6.2
    
    
    
    18.4
    
    
    
    21.6
    
    
    
    51.3Electricity
    
    
    87.2
    
    
    
    (9
    )
    
    
    5.1
    
    
    
    15.0
    
    
    
    14.0
    
    
    
    53.1Coal
    
    
    15.2
    
    
    
    (10
    )
    
    
    6.2
    
    
    
    9.0
    
    
    
    
    
    
    
    Coal
    
    
    15.8
    
    
    
    (11
    )
    
    
    9.5
    
    
    
    6.3
    
    
    
    
    
    
    
    Capital commitments
    
    
    25.0
    
    
    
    (12
    )
    
    
    25.0
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    663.5
    
    
    
    
    
    
    $
    101.1
    
    
    $
    303.6
    
    
    $
    91.7
    
    
    $
    167.1
 25




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##### Table of Contents



1.
    
    Represents scheduled principal payments on existing indebtedness.2.
    
    Represents scheduled principal payments on existing capital lease obligations.3.
    
    Represents an estimate of expenditures to be made under existing long-term operating
lease agreements.4.
    
    Amount represents estimated payments to the Steelworkers Pension Trust, pursuant to
our labor agreement with the United Steelworkers of America (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 2010.6.
    
    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 for the period 2002 through 2005 and anticipates payment of
approximately $6.25 million per year.7.
    
    Special Bonus Program was established in the 2003 Modified Labor Agreement to recognize
the unique contributions and sacrifices made by the hourly workforce and their Union in
helping to keep the Company operating during the Bankruptcy.8.
    
    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 $0.6 million, subject to escalation clauses.9.
    
    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 3,000 tons per day, regardless of whether any tons are
produced. At March 31, 2006, a maximum termination payment of approximately $30.7 million
would have been required to terminate the contract.10.
    
    In 2004, we amended our take-or-pay 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, 2007.11.
    
    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. Approximately 33,000
tons were pre-delivered under the terms of the contract during the first quarter of 2006.12.
    
    Amounts reflect contractual commitments for capital expenditure as of March 31, 2006. Planned Capital Expenditures
  
    
    $86.9 million toward completion of the refurbishment of the coke plant facility contributed to MSC ($64.5 million of
which will be contributed to MSC by our joint venture partner);
 
    
    $5.7 million for cold mill improvements at our Allenport facility; and
 
    
    $1.5 million for completion of the installation of hot strip mill automatic roll changers at our Mingo Junction
facility.
  VEBA TRUST AND PROFIT SHARING PLANS
  26




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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;
 (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.
      27




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Profit Sharing Plans
     CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  28




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Fresh Start Reporting
  Pension Benefits
    Other Postretirement Benefits (OPEB)
    29




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Asset impairments
  Deferred taxes
  Environmental and legal contingencies
  RECENT ACCOUNTING STANDARDS
    30




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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk and Related Risks
   Interest Rate Risk
   Credit Risk
  31




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Foreign Currency Exchange Risk
  
 Item 4. CONTROLS AND PROCEDURES
   32




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PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   
 Item 6. EXHIBITS
 (a) Exhibits
 Exhibit No.
    
    Description10.1
    
    Employment Agreement, effective as of April 1, 2006, between James G. Bradley and
Wheeling-Pittsburgh Steel Corporation (incorporate by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed by Wheeling-Pittsburgh Corporation on April 27, 2006)10.2
    
    Employment Agreement, effective as of April 1, 2006, between Harry L. Page and
Wheeling-Pittsburgh Steel Corporation (incorporate by reference to Exhibit 10.2 to the
Current Report on Form 8-K filed by Wheeling-Pittsburgh Corporation on April 27, 2006)10.3
    
    Employment Agreement, effective as of April 1, 2006, between Donald E. Keaton and
Wheeling-Pittsburgh Steel Corporation (incorporate by reference to Exhibit 10.3 to the
Current Report on Form 8-K filed by Wheeling-Pittsburgh Corporation on April 27, 2006)31.1
    
    Certification of James G. Bradley, Chief Executive Officer of the Registrant, pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)/15d-14(a) certification).31.2
    
    Certification of Paul J. Mooney, Chief Financial Officer of the Registrant, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a)/15d-14(a) certification).32.1
    
    Certification of James G. Bradley, Chief Executive Officer of the Registrant, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).32.2
    
    Certification of Paul J. Mooney, Chief Financial Officer of the Registrant, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
 33




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SIGNATURES
  WHEELING-PITTSBURGH CORPORATION/s/
    
    Paul J. MooneyPaul J. MooneyChief Financial Officer(Authorized Officer, Principal Financial Officer andPrincipal Accounting Officer)
  34