##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the quarter ended June 30, 2004
ORo
    
    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  (Exact name of registrant as specified in its charter)


DELAWARE
(State of Incorporation)
    
    55-0309927
(I.R.S. Employer Identification No.)1134 Market Street, Wheeling, WV
(Address of principal executive offices)
    
    26003
(Zip code)


Registrants telephone number, including area code: (304) 234-2400

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Applicable only to registrants involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes þ No o

The registrant had 10,000,000 shares of its common stock, par value $0.01
per share, issued and outstanding as of July 30, 2004.





---



WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
INDEX






PagePART I FINANCIAL INFORMATIONItem 1
    
    Condensed Financial Statements:Condensed Consolidated Statements of Operations (Unaudited)
    
    
    2Condensed Consolidated Balance Sheets (Unaudited)
    
    
    3Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    4Condensed Consolidated Statement of Changes in Stockholders Equity
(Unaudited)
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    6Item 2
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    19Item 3
    
    Quantitative and Qualitative Disclosures About Market Risks
    
    
    34Item 4
    
    Controls and Procedures
    
    
    35PART II Other INFORMATIONItem 6
    
    Exhibits and Reports on Form 8-K
    
    
    36SIGNATURES
    
    
    37Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents









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)

Reorganized Company
    

    Predecessor CompanyQuarter
    
    Six Months
    

    Quarter
    
    Six MonthsEnded
    
    Ended
    

    Ended
    
    EndedJune 30,
    
    June 30,
    

    June 30,
    
    June 30,2004
    
    2004
    

    2003
    
    2003RevenuesNet sales, including sales to affiliates of
$96,865, $162,206, $73,636 and $141,180
    
    $
    356,121
    
    
    $
    630,327
    
    

    $
    250,469
    
    
    $
    489,141Cost and expensesCost of products sold, excluding
depreciation and amortization expense,
including cost of products sold to affiliates of
$68,824, $121,103, $64,640 and $123,177
    
    
    292,820
    
    
    
    548,889
    
    

    
    239,702
    
    
    
    486,955Depreciation and amortization expense
    
    
    7,512
    
    
    
    15,201
    
    

    
    16,349
    
    
    
    33,794Selling, administrative and general expense
    
    
    16,349
    
    
    
    31,295
    
    

    
    11,394
    
    
    
    25,258Reorganization and professional fee expense
    
    
    
    
    
    
    
    
    

    
    2,845
    
    
    
    6,145Total costs and expenses
    
    
    316,681
    
    
    
    595,385
    
    

    
    270,290
    
    
    
    552,152Operating income (loss)
    
    
    39,440
    
    
    
    34,942
    
    

    
    (19,821
    )
    
    
    (63,011
    )Reorganization income
    
    
    
    
    
    
    
    
    

    
    169
    
    
    
    160Interest expense on debt
    
    
    (5,058
    )
    
    
    (10,277
    )
    

    
    (4,072
    )
    
    
    (7,723
    )Other income
    
    
    4,653
    
    
    
    7,665
    
    

    
    1,612
    
    
    
    2,846Income (loss) before income taxes
    
    
    39,035
    
    
    
    32,330
    
    

    
    (22,112
    )
    
    
    (67,728
    )Income tax provision (benefit)
    
    
    11,977
    
    
    
    11,898
    
    

    
    (638
    )
    
    
    (629
    )Net income (loss)
    
    $
    27,058
    
    
    $
    20,432
    
    

    $
    (21,474
    )
    
    $
    (67,099
    )Earnings per shareBasic
    
    $
    2.85
    
    
    $
    2.15
    
    

    
    *
    
    
    
    *Diluted
    
    $
    2.79
    
    
    $
    2.11
    
    

    
    *
    
    
    
    *Weighted average shares (in thousands):Basic
    
    
    9,500
    
    
    
    9,500
    
    

    
    *
    
    
    
    *Diluted
    
    
    9,684
    
    
    
    9,691
    
    

    
    *
    
    
    
    *


* Prior to reorganization, the Company was a wholly-owned subsidiary of WHX Corporation (see Note 2)

The accompanying notes are an integral part of the financial statements.

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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

June 30,
    
    December 31,2004
    
    2003ASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,068
    
    
    $
    4,767Trade receivables, less allowance for doubtful
accounts of $2,653, and $2,061
    
    
    150,424
    
    
    
    104,025Inventories
    
    
    135,711
    
    
    
    146,895Prepaid expenses and deferred charges
    
    
    10,501
    
    
    
    11,583Total current assets
    
    
    299,704
    
    
    
    267,270Investment in affiliated companies
    
    
    45,855
    
    
    
    42,857Property, plant and equipment, less
accumulated depreciation of $24,802 and $10,051
    
    
    433,207
    
    
    
    387,765Deferred income tax benefits
    
    
    23,358
    
    
    
    23,170Restricted cash
    
    
    46,996
    
    
    
    87,138Goodwill
    
    
    18,291
    
    
    
    30,000Other intangible assets, less accumulated
amortization of $871 and $423
    
    
    8,628
    
    
    
    9,076Deferred charges and other assets
    
    
    18,680
    
    
    
    21,610Total assets
    
    $
    894,719
    
    
    $
    868,886LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade payables
    
    $
    80,921
    
    
    $
    76,108Short-term debt
    
    
    78,098
    
    
    
    79,251Payroll and employee benefits payable
    
    
    51,459
    
    
    
    57,862Accrued federal, state and local taxes
    
    
    12,829
    
    
    
    10,744Deferred income tax liabilities
    
    
    23,170
    
    
    
    23,170Accrued interest and other liabilities
    
    
    4,979
    
    
    
    9,672Long-term debt due in one year
    
    
    20,122
    
    
    
    2,698Total current liabilities
    
    
    271,578
    
    
    
    259,505Long-term debt
    
    
    323,722
    
    
    
    340,696Other employee benefit liabilities
    
    
    152,563
    
    
    
    142,433Other liabilities
    
    
    20,558
    
    
    
    21,639Total liabilities
    
    
    768,421
    
    
    
    764,273STOCKHOLDERS EQUITYCommon stock  $.01 Par value; 10 million shares
issued and outstanding
    
    
    100
    
    
    
    100Additional paid-in capital
    
    
    149,904
    
    
    
    149,901Accumulated deficit
    
    
    (18,498
    )
    
    
    (38,930
    )Deferred compensation
    
    
    (5,208
    )
    
    
    (6,458
    )Total stockholders equity
    
    
    126,298
    
    
    
    104,613Total liabilities and stockholders equity
    
    $
    894,719
    
    
    $
    868,886


The accompanying notes are an integral part of the financial statements.

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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)

Reorganized
    

    Predecessor CompanyCompany
    

    CompanySix
    

    SixMonths Ended
    

    Months EndedJune 30,
    

    June 30,2004
    

    2003Cash flows from operating activitiesNet income (loss)
    
    $
    20,432
    
    

    $
    (67,099
    )Adjustments to reconcile net income (loss) to cash provided by
operating activities:Depreciation and amortization expense
    
    
    15,201
    
    

    
    33,794Other postretirement benefits
    
    
    (69
    )
    

    
    (224
    )Deferred income taxes
    
    
    11,521
    
    

    
    Equity income of affiliated companies, net of dividends
    
    
    (3,723
    )
    

    
    377Loss on disposition of assets
    
    
    10
    
    

    
    Reorganization income
    
    
    
    
    

    
    (160
    )Deferred compensation
    
    
    1,250
    
    

    
    Interest paid-in-kind
    
    
    544
    
    

    
    Changes in current assets and current liabilities:Trade receivables
    
    
    (46,399
    )
    

    
    19,995Inventories
    
    
    11,184
    
    

    
    19,279Trade payables
    
    
    8,239
    
    

    
    9,670Other current assets
    
    
    1,082
    
    

    
    (1,212
    )Other current liabilities
    
    
    (9,011
    )
    

    
    2,327Other assets and liabilities  net
    
    
    12,051
    
    

    
    (9,840
    )Net cash provided by operating activities
    
    
    22,312
    
    

    
    6,907Cash flows from investing activitiesCapital expenditures
    
    
    (60,211
    )
    

    
    (2,450
    )Restricted cash used to fund capital expenditures
    
    
    40,142
    
    

    
    Proceeds from sale of assets
    
    
    6
    
    

    
    201Payments from affiliates
    
    
    725
    
    

    
    600Net cash used in investing activities
    
    
    (19,338
    )
    

    
    (1,649
    )Cash flows from financing activitiesBorrowing of long-term debt
    
    
    1,800
    
    

    
    1,022Repayment of long-term debt
    
    
    (1,894
    )
    

    
    (2,084
    )Net change in short-term debt
    
    
    (1,153
    )
    

    
    Short term debt (DIP facility) borrowings
    
    
    
    
    

    
    (4,557
    )Book overdraft
    
    
    (3,426
    )
    

    
    1,049Net cash used in financing activities
    
    
    (4,673
    )
    

    
    (4,570
    )Increase (decrease) in cash and cash equivalents
    
    
    (1,699
    )
    

    
    688Cash and cash equivalents at beginning of period
    
    
    4,767
    
    

    
    8,543Cash and cash equivalents at end of period
    
    $
    3,068
    
    

    $
    9,231Supplemental InformationInterest costs and other financing costs paid (net of amount capitalized)
    
    $
    9,284
    
    

    $
    6,116Income taxes paid
    
    $
    
    
    

    $
    


The accompanying notes are an integral part of the financial statements.

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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited)
(in thousands, except share amounts)

AdditionalShares
    
    Common
    
    Paid-in
    
    Deferred
    
    AccumulatedOutstanding
    
    Stock
    
    Capital
    
    Compensation
    
    Deficit
    
    TotalPredecessor CompanyBalance at December 31, 2002
    
    
    100
    
    
    $
    
    
    
    $
    335,138
    
    
    $
    
    
    
    $
    (646,309
    )
    
    $
    (311,171
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323,431
    
    
    
    323,431Fresh start adjustment
    
    
    (100
    )
    
    
    
    
    
    
    (335,138
    )
    
    
    
    
    
    
    322,878
    
    
    
    (12,260
    )Balances at July 31, 2003
(prior to issuance of stock
at reorganization)
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Reorganized CompanyIssuance of stock at
reorganization at July 31, 2003
(prior to restricted stock
award)
    
    
    9,500,000
    
    
    $
    95
    
    
    $
    142,405
    
    
    $
    
    
    
    $
    
    
    
    $
    142,500Shares issued on July 31, 2003
for restricted stock award
plans
    
    
    500,000
    
    
    
    5
    
    
    
    7,495
    
    
    
    (7,500
    )
    
    
    
    
    
    
    Compensation expense recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,042
    
    
    
    
    
    
    
    1,042Stock option grants
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,930
    )
    
    
    (38,930
    )Balance at December 31, 2003
    
    
    10,000,000
    
    
    
    100
    
    
    
    149,901
    
    
    
    (6,458
    )
    
    
    (38,930
    )
    
    
    104,613Compensation expense recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,250
    
    
    
    
    
    
    
    1,250Stock option grants
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,432
    
    
    
    20,432Balance at June 30, 2004
    
    
    10,000,000
    
    
    $
    100
    
    
    $
    149,904
    
    
    $
    (5,208
    )
    
    $
    (18,498
    )
    
    $
    126,298


The accompanying notes are an integral part of the financial statements.

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WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited)



|1. |  | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The 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, 2003.                                                                                                                                                                                                                             
|  
|   |  | The Company emerged from bankruptcy effective August 1, 2003 (see Note 2),
and applied fresh start reporting as of July 31, 2003. As a result, amounts
reported in the financial statements for the quarter and six months ended
June 30, 2003 relate to the Company prior to its reorganization and the
application of fresh start reporting. Amounts for these periods are
referred to as being applicable to the Predecessor Company. Amounts for
periods subsequent to the reorganization of the Company are referred to as
being applicable to the Reorganized Company. Due to the application of
fresh start reporting as of July 31, 2003, amounts reported for the
predecessor company and the reorganized company are not comparable and have
been separated by a black line in the financial statements.
|  
|   |  | The preparation of financial statements in conformity with generally
accepted accounting principles 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 those estimates.                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |  | Certain reclassifications of prior year amounts have been made to conform to
the current year presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|2. |  | Bankruptcy and Reorganization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | On November 16, 2000, the Company and eight of its then-existing
wholly-owned subsidiaries, which represented substantially all of the
Companys business, filed voluntary petitions for relief under Chapter 11 of
the United States Bankruptcy Code. The Company commenced Chapter 11
proceedings in order to restructure its outstanding debts and to improve its
access to additional funding needed to continue operations. Throughout the
Chapter 11 proceedings, the Company remained in possession of its properties
and assets and continued to operate and manage its businesses with the
then-existing directors and officers as debtors-in-possession subject to the
supervision of the Bankruptcy Court.                                                                                                 
|  
|   |  | As part of the Chapter 11 proceedings, the Company filed its original Joint
Plan of Reorganization on
December 20, 2002, its First Amended Joint Plan of Reorganization on January
9, 2003, its Second Amended Joint Plan of Reorganization on May 5, 2003 and
its Third Amended Joint Plan of Reorganization on May 19, 2003, reflecting
the final negotiations with pre-petition note holders, pre-petition trade
creditors and unionized employees. The Companys plan of reorganization was
confirmed on June 18, 2003 and became effective on August 1, 2003. The
Company realized approximately $558 million in cancellation of debt income
as a result of the reorganization.                                                                                                                                  
|  
|   |  | The following is a summary of some of the significant transactions
consummated on or about the effective date of the plan of reorganization:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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| |  |  | WPC amended and restated its by-laws and filed a second amended and
restated certificate of incorporation with the Delaware Secretary of
State authorizing the issuance of up to an aggregate of 80 million
            shares of common stock, par value $0.01 per share, and 20 million
            shares of undesignated preferred stock, par value $0.001 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | WPC exchanged, on a pro rata basis, $275 million in senior notes
and $75 million in term notes that existed prior to its bankruptcy
filing for an aggregate of $20 million in cash, $40 million in new
Series A secured notes issued by Wheeling-Pittsburgh Steel Corp.
(WPSC), which are collateralized by a second lien on its tangible and
intangible assets (other than our accounts receivable and inventory)
and its equity interests in its joint ventures and a third lien on its
accounts receivable and inventory, $20 million in new Series B secured
notes issued by WPSC, which are collateralized by a fifth lien on its
tangible and intangible assets, its equity interests in its joint
ventures, and its accounts receivable and inventory, and 3,410,000
shares of new common stock of WPC constituting 34.1% thereof.                                                   
|
| |  |  | WPC cancelled its then-existing senior notes and related indenture
and its then-existing term notes and the related term loan agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  |  | WPC cancelled all shares of its common stock that existed prior to
the implementation of the plan of reorganization, at which point it
ceased to be a subsidiary of WHX Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | WPSC entered into a new $250 million senior secured term loan
facility, which is guaranteed in part by the Emergency Steel Loan
Guarantee Board, the West Virginia Housing Development Fund, WPC and WP
Steel Venture Corporation, a wholly-owned subsidiary of WPC, and is
collateralized by a first lien on its tangible and intangible assets
(other than accounts receivable and inventory) and its equity interests
in its joint ventures and a second lien on its accounts receivable and
inventory. WPSC also entered into a new $225 million senior secured
revolving credit facility, which is guaranteed by WPC and WP Steel
Venture Corporation and is collateralized by a first lien on its
accounts receivable and inventory and a third lien on its other
tangible and intangible assets and its equity interests in its joint
ventures and pledged stock of its subsidiaries.
|
| |  |  | All of the obligations under the Companys $195 million
debtor-in-possession credit facility were satisfied in full and
discharged.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  |  | WPC and WPSC entered into an agreement with WHX Corporation
providing for, among other things, a $10 million capital contribution
by WHX Corporation, the capitalization of approximately $40 million in
debt owed by the Company to WHX Corporation, a $10 million unsecured
loan from WHX Corporation and an agreement with WHX Corporation, the
Pension Benefit Guaranty Corporation (PBGC), and the United
Steelworkers of America (USWA), with respect to the Companys
separation from WHX Corporations employee pension plan.                                                                                                                                                                                                                                                                                                                                                       
|
| |  |  | WPC and WPSC entered into an agreement with its unionized employees
represented by the USWA which modified the existing labor agreement to
provide for, among other things, future pension arrangements with the
USWA and reductions in the Companys employee-related costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  |  | WPC issued 4 million shares of new common stock constituting 40%
thereof for the benefit of USWA retirees in satisfaction of certain
claims under its labor agreement and an additional 1 million shares of
its new common stock constituting 10% thereof to or for the benefit of
the Companys salaried employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | WPC issued 1,590,000 shares of new common stock constituting 15.9%
thereof to certain of its creditors in satisfaction of various
unsecured claims, including claims relating to trade debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



| |  | There are still several matters pending in the Bankruptcy Court, including
the resolution of disputed unsecured and administrative claims and certain
preference actions and other litigation where we are seeking to recover
monies. As of June 30, 2004, approximately 85,811 shares of common stock
issued pursuant to the plan of reorganization were reserved for distribution
to creditors pending resolution of certain disputed claims. If those
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | claims are ultimately allowed in whole or in part by the Bankruptcy Court,
the appropriate amount of stock will be distributed to those claimants; if
the claims are disallowed, the stock will be distributed to other creditors
of the same class, pro rata. To the extent that certain administrative and
secured claims are allowed by the Bankruptcy Court, those claims will be
paid in cash, in an amount which we expect will not exceed $100,000 and for
which there are sufficient reserves held by the distribution agent. If and
to the extent those claims are allowed as pre-petition unsecured claims,
then those creditors will receive stock, which has been reserved as
described above. In addition, the Company is the plaintiff in a number of
preference actions, where it is seeking to recover monies from creditors.
The Company does not believe that any of these remaining bankruptcy
proceedings, individually or in the aggregate, will have a material adverse
effect on the Company.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Fresh Start Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In accordance with Statement of Position 90-7, Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code (SOP 90-7), the
Company adopted the provisions of fresh start reporting as of July 31, 2003.
In adopting the requirements of fresh start reporting, the Company engaged
an independent financial advisor to assist in the determination of the
enterprise value of the entity. This value was based upon various valuation
methods, including discounted cash flow methodologies, analysis of
comparable steel companies, and other applicable ratios and economic
industry information relevant to the operations of the Company. The
estimated total equity value of the reorganized company aggregating
approximately $150 million was determined after taking into account the
values of the obligations assumed in connection with the Joint Plan of
Reorganization.
|  
|   |  | The following reconciliation of the predecessor companys consolidated
balance sheet as of July 31, 2003 to that of the reorganized company as of
July 31, 2003 was prepared with the adjustments that give effect to the
reorganization and fresh start reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   |  | The adjustments entitled Reorganization Adjustments reflect the
consummation of the Joint Plan of Reorganization, including the elimination
of existing liabilities subject to compromise, and consolidated
shareholders deficit, and to reflect the aforementioned $150 million equity
value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |  | The adjustments entitled Fresh Start Adjustments reflect the adoption of
fresh start reporting, including the adjustments to record property and
equipment at its fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Pre-
    
    
    
    
    
    
    
    
    
    Post-Reorganization
    
    Reorganization
    
    Fresh Start
    
    Reorganization7/31/2003
    
    Adjustments
    
    Adjustments
    
    7/31/2003(Dollars in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    7,382
    
    
    $
    
    
    
    $
    
    
    
    $
    7,382Trade receivables, less
allowance for
doubtful accounts of $1,916
    
    
    112,649
    
    
    
    (233
    )
    
    
    
    
    
    
    112,416Inventories
    
    
    164,322
    
    
    
    
    
    
    
    (9,658
    )[d]
    
    
    154,664Prepaid expenses and deferred
charges
    
    
    6,559
    
    
    
    12
    
    
    
    
    
    
    
    6,571Total current assets
    
    
    290,912
    
    
    
    (221
    )
    
    
    (9,658
    )
    
    
    281,033Investment in affiliated companies
    
    
    59,982
    
    
    
    
    
    
    
    (19,505
    )[d]
    
    
    40,477Property,
plant and equipment lessaccumulated depreciation
    
    
    493,514
    
    
    
    
    
    
    
    (133,301
    )[d]
    
    
    360,213Deferred income tax benefits
    
    
    27,342
    
    
    
    (3,860
    )[b]
    
    
    
    
    
    
    23,482Restricted cash
    
    
    
    
    
    
    112,000
    [a]
    
    
    
    
    
    
    112,000Goodwill
    
    
    
    
    
    
    30,000
    [g]
    
    
    
    
    
    
    30,000Deferred charges and other assets
    
    
    8,964
    
    
    
    12,844
    [g]
    
    
    9,756
    [g]
    
    
    31,564Total assets
    
    $
    880,714
    
    
    $
    150,763
    
    
    $
    (152,708
    )
    
    $
    878,769


8



---



##### Table of Contents



Pre-
    
    Reorganization
    
    Fresh Start
    
    Post-Reorganization
    
    Adjustments
    
    Adjustments
    
    Reorganization7/31/2003
    
    
    
    
    
    7/31/2003(Dollars in thousands)LIABILITIES & STOCKHOLDERS EQUITY (DEFICIT)Current Liabilities:Trade payables
    
    $
    81,275
    
    
    $
    (1,334
    )[a]
    
    $
    
    
    
    $
    79,941Short-term debt
    
    
    137,214
    
    
    
    (100,299
    )[a]
    
    
    
    
    
    
    36,915Payroll and employee benefits payable
    
    
    35,118
    
    
    
    32,795
    [c]
    
    
    
    
    
    
    67,913Accrued federal, state and local taxes
    
    
    10,054
    
    
    
    1,200
    [a],[c]
    
    
    
    
    
    
    11,254Deferred income tax liabilities
    
    
    27,342
    
    
    
    (3,860
    )[a],[c]
    
    
    
    
    
    
    23,482Accrued interest and other liabilities
    
    
    8,026
    
    
    
    2,647
    [a],[c]
    
    
    
    
    
    
    10,673Long-term debt due in one year
    
    
    43,433
    
    
    
    (39,678
    )[a],[c],[f]
    
    
    
    
    
    
    3,755Total current liabilities
    
    
    342,462
    
    
    
    (108,529
    )
    
    
    
    
    
    
    233,933Long-term debt
    
    
    11,985
    
    
    
    327,863
    [a],[c]
    
    
    
    
    
    
    339,848Other employee benefit liabilities
    
    
    17,317
    
    
    
    124,981
    [c]
    
    
    
    
    
    
    142,298Other liabilities
    
    
    17,150
    
    
    
    3,040
    [a],[c]
    
    
    
    
    
    
    20,190Liabilities subject to compromise
    
    
    879,455
    
    
    
    (879,455
    )[c]
    
    
    
    
    
    
    Total liabilities
    
    
    1,268,369
    
    
    
    (532,100
    )
    
    
    
    
    
    
    736,269STOCKHOLDERS EQUITY (DEFICIT)Common Stock  $.01 Par Value; 10 million
shares issued and outstanding
    
    
    
    
    
    
    100
    [c]
    
    
    
    
    
    
    100Additional paid-in capital
    
    
    335,138
    
    
    
    149,900
    [c],[g]
    
    
    (335,138
    )[d]
    
    
    149,900Deferred compensation
    
    
    
    
    
    
    (7,500
    )[e]
    
    
    
    
    
    
    (7,500
    )Accumulated earnings (deficit)
    
    
    (722,793
    )
    
    
    540,363
    [b],[c],[f]
    
    
    182,430
    [d]
    
    
    Total stockholders equity (deficit)
    
    
    (387,655
    )
    
    
    682,863
    
    
    
    (152,708
    )
    
    
    142,500Total liabilities and stockholders equity
    
    $
    880,714
    
    
    $
    150,763
    
    
    $
    (152,708
    )
    
    $
    878,769




|   |  | Footnotes:                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | [a] Reflects the borrowing of the $250 million term loan proceeds and
amounts under the post-petition revolver and the payments necessary to
effect the Plan of Reorganization, such as the repayment of DIP facilities,
cash distributions to creditors and the payment of fees and expenses
associated with the exit financing.                                                                                               
|  
|   |  | [b] Reflects the impact on retained earnings of reorganization expenses net
of tax benefit.                                                                                                                                                                                                                                                                                                                                     
|  
|   |  | [c] Reflects the settlement of liabilities subject to compromise, including
the distribution of cash, notes and equity to the pre-petition creditors,
the assumption of OPEB and other pre-petition liabilities (capital leases,
employee benefits, taxes). Also, reflects the cancellation of debt income.                                                                                                                     
|  
|   |  | [d] Reflects the adjustments to reflect Fresh Start reporting. These
entries include the write-down of property, plant and equipment and joint
venture interests to their appraised values, elimination of retained
earnings and additional paid-in capital.                                                                                                                                                                  
|  
|   |  | [e] Reflects restricted stock awards for the distribution of employee equity
into trust.                                                                                                                                                                                                                                                                                                                                        
|  
|   |  | [f] Reflects the cancellation of debt as a result of WHX Corporation
forgiving its portion of the DIP term loan.                                                                                                                                                                                                                                                                                                                
|  
|   |  | [g] Reflects the pre-funding of VEBA obligations with 4,000,000 shares of
the Companys common stock, intangible asset related to joint venture supply
agreements, and goodwill.                                                                                                                                                                                                                                                
|  
|4. |  | New Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |  | Under the provisions of SOP 90-7, the Company was required to adopt, as of
July 31, 2003, all accounting guidance that was going to be effective within
a twelve-month period.                                                                                                                                                                                                                                                  
|  
|   |  | In May 2004, the FASB issued FASB Staff Position (FSP) No. 106-2,
Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003. FSP 106-2 provides
guidance on accounting for the effects of the new Medicare prescription drug
legislation by employers whose prescription drug benefits are actuarially
equivalent to the drug benefit under Medicare Part D.

9



---



##### Table of Contents









|   |  | FSP 106-2 supercedes FSP 106-1 and is effective for the first interim or
annual period beginning after June 15, 2004. As allowed by FSP 106-1, the
Company elected to defer recognizing the effects of the new legislation.
As of June 30, 2004, the Company has not made a final determination of and
continues to assess the impact of the new legislation on the financial
statements of the Company. The Company will adopt and apply the guidance
provided in FSP 106-2 beginning in the third quarter of 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company adopted FASB No. 132-R (revised 2003), Employers Disclosures
about Pensions and Other Postretirement Benefits an amendment of FASB
Statements No. 87, 88, and 106 (FASB 132-R). FASB 132-R revises employers
disclosures about pension plans and other postretirement benefit plans. It
requires additional disclosures about the assets, obligations, cash flows,
and net periodic benefit cost of defined benefit pension plans and other
defined benefit postretirement plans. Additionally, FASB 132-R requires
public companies to make certain disclosures in their interim financial
statements with respect to net periodic pension expense and contributions
paid. The Company has provided the required interim disclosures in Note 8
to the consolidated financial statements for their postretirement benefit
plan. Due to the immaterial amounts related to the Companys defined
benefit pension plan, disclosure has not been provided.
|  
|5. |  | Business Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | The Company is primarily engaged in one line of business and has one
industry segment, which is the making, processing and fabricating of steel
and steel products. The Companys products include hot rolled and cold
rolled sheet and coated products such as galvanized, pre-painted and tin
mill sheet. The Company also manufactures a variety of fabricated steel
products including roll formed corrugated roofing, roof deck, form deck,
floor deck, bridgeform and other products used primarily by the
construction, highway and agricultural markets.                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|6. |  | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | The Company owns a 35.7% interest in Wheeling-Nisshin, Inc. and a 50%
interest in Ohio Coatings Company, both of which are accounted for using the
equity method of accounting. During the quarters ended June 30, 2004 and
2003, the Company had sales of $96.9 million and $73.6 million to these
entities, respectively. During the six months ended June 30, 2004 and 2003,
the Company had sales of $162.2 million and $141.2 million to these
entities, respectively. At June 30, 2004 and December 31, 2003, the Company
had trade receivables due from these entities of $23.4 million and $15.7
million, respectively, and the Company had trade payables due to these
entities of $3.4 million and $4.8 million, respectively. At June 30, 2004,
the Company had a loan receivable due from Ohio Coatings Company of $10.7
million bearing interest at approximately 5% per annum The loan is to be
repaid in November 2006.                                
|  
|7. |  | Common Stock Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | In accordance with the Companys plan of reorganization, the Company
established a restricted stock plan pursuant to which we have granted to
selected key employees a total of 500,000 shares of our common stock, as of
the effective date of our plan of reorganization. All of the grants made
under the plan will vest in increments of one-third of the total grant to
each individual pro rata over three years. Restricted stock expense related
to the restricted stock awards totaled $0.6 million for the quarter ended
June 30, 2004 and $1.25 million for the six months ended June 30, 2004.
These amounts were reflected in shareholders equity as a decrease of
deferred compensation.                                                                                                                                                                                                                                                               
|  
|   |  | On March 15, 2004, 4,394 stock options were granted at a price of $24.04 per
share to certain directors of the Company and on May 14, 2004, 7,801 stock
options were granted at a price of $13.54 per share to these same directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |  | FASB No. 123, Accounting for Stock Based Compensation (FASB 123) gives
companies the option to adopt the fair market value method for expense
recognition of employee stock options or to continue to account for employee
stock options using the intrinsic value method, as outlined under Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.
The Company has elected to continue to apply the intrinsic value method to
account for employee stock options and to disclose the pro forma effect as
if the fair value method had been applied. The following table illustrates
the effect on net earnings per share if the                                                                                                                                                                                                                                                                                                   

10



---



##### Table of Contents





| |  | Company had applied the fair value recognition provisions of FASB 123 to
stock based employee compensation.
| |  | -----------------------------------------------------------------------------------------------------------

Reorganized Company
    


    Predecessor CompanyQuarter
    
    Six Months
    


    Quarter
    
    Six MonthsEnded
    
    Ended
    


    Ended
    
    EndedJune 30,
    
    June 30,
    


    June 30,
    
    June 30,2004
    
    2004
    


    2003
    
    2003(Dollars in thousands, except per share amounts)Net income (loss)
    
    $
    27,058
    
    
    $
    20,432
    
    


    $
    (21,474
    )
    
    $
    (67,099
    )Add: Stock based compensation expense, net of tax
    
    
    433
    
    
    
    790
    
    


    
    
    
    
    
    Less: Total stock-based compensation expense
determine under fair value method for all awards,
net of tax
    
    
    (494
    )
    
    
    (904
    )
    


    
    
    
    
    
    Pro forma net income (loss)
    
    $
    26,997
    
    
    $
    20,318
    
    


    $
    (21,474
    )
    
    $
    (67,099
    )Earnings per share:Basic as reported
    
    $
    2.85
    
    
    $
    2.15
    
    


    
    *
    
    
    
    *Diluted as reported
    
    $
    2.79
    
    
    $
    2.11
    
    


    
    *
    
    
    
    *Basic pro forma
    
    $
    2.84
    
    
    $
    2.14
    
    


    
    *
    
    
    
    *Diluted pro forma
    
    $
    2.79
    
    
    $
    2.10
    
    


    
    *
    
    
    
    *


* Prior to reorganization, the Company was a wholly-owned subsidiary of WHX
Corporation (see Note 2).



|8. |  | Post Retirement Benefits Other Than Pensions                                                                                                                         
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Net periodic costs for postretirement benefits other than pensions
(principally health care and life insurance) for employees and covered
dependents were as follows:

Reorganized Company
    

    Predecessor CompanyQuarter
    
    Six Months
    

    Quarter
    Six MonthsEnded
    
    Ended
    

    Ended
    
    EndedJune 30,
    
    June 30,
    

    June 30,
    
    June 30,2004
    
    2004
    

    2003
    
    2003(Dollars in thousands)Components of net periodic cost:Service cost
    
    $
    733
    
    
    $
    1,466
    
    

    $
    729
    
    
    $
    1,458Interest cost
    
    
    1,835
    
    
    
    3,670
    
    

    
    4,965
    
    
    
    9,930Amortization of prior service credit
    
    
    
    
    
    
    
    
    

    
    (678
    )
    
    
    (1,356
    )Recognized actuarial (gain)/loss
    
    
    286
    
    
    
    572
    
    

    
    (159
    )
    
    
    (318
    )Total
    
    $
    2,854
    
    
    $
    5,708
    
    

    $
    4,857
    
    
    $
    9,714




|9. |  | Other Income                                
|-- |  | --------------------------------------------
|  
|   |  | Other income was comprised of the following:

Reorganized Company
    

    Predecessor CompanyQuarter
    
    Six Months
    

    Quarter
    
    Six MonthsEnded
    
    Ended
    

    Ended
    
    EndedJune 30,
    
    June 30,
    

    June 30,
    
    June 30,2004
    
    2004
    

    2003
    
    2003(Dollars in thousands)Equity income from affiliates
    
    $
    4,248
    
    
    $
    6,369
    
    

    $
    1,327
    
    
    $
    2,215Other income
    
    
    405
    
    
    
    1,296
    
    

    
    285
    
    
    
    631Total
    
    $
    4,653
    
    
    $
    7,665
    
    

    $
    1,612
    
    
    $
    2,846




|10. |  | Earnings Per Share                                                                                                                                                                                                                                                                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Diluted earnings per share assumes the exercise of stock options and vesting
of restricted stock, provided in each case that the effect is dilutive. For
the quarter ended June 30, 2004, 12,303 shares of common stock related to
stock options and 171,349 shares of common stock related to restricted stock
have been included in the

11



---



##### Table of Contents





|    |  | computation of diluted earnings per share. For the six months ended June
30, 2004, 12,176 shares of common stock related to stock options and 178,580
shares of common stock related to restricted stock have been included in the
computation of diluted earnings per share.                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Stock options to purchase 4,394 shares of common stock were issued on March
15, 2004 at an exercise price of $24.04 per share. These outstanding stock
options were not included in the computation of diluted earnings per share
as the option price exceeded the average market price of the common stock
for the quarter and six months ended June 30, 2004.
|   
|11. |  | Inventories                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | Inventories 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 98% of inventories are valued using the LIFO
method.                                                                                                                                   

June 30,
    
    December 31,2004
    
    2003(Dollars in thousands)Finished products
    
    $
    26,150
    
    
    $
    31,227In-process
    
    
    99,866
    
    
    
    90,170Raw materials
    
    
    27,402
    
    
    
    26,808Other materials and supplies
    
    
    276
    
    
    
    378153,694
    
    
    
    148,583LIFO reserve
    
    
    (17,983
    )
    
    
    (1,688
    )$
    135,711
    
    
    $
    146,895




|12. |  | Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The application of fresh start reporting resulted in an amount being
allocated to reorganization value in excess of amounts allocated to
identifiable assets, which has been reflected in the financial statements as
goodwill. Under provisions of SOP 90-7, any benefit from the utilization of
pre-confirmation net operating loss carryforwards and any benefit resulting
from the reversal of a valuation allowance applicable to other deferred tax
assets are used first to reduce goodwill. For the quarter and six months
ended June 30, 2004, goodwill was reduced by $11.7 million, representing the
estimated benefit from the utilization of pre-confirmation net operating
loss carryforwards and the reversal of the valuation allowance applicable to
other deferred tax assets for the periods then ended.
|   
|13. |  | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | Environmental Matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Prior to confirmation of our plan of reorganization effective August 1,
2003, the Company settled all pre-petition environmental liability claims
made by environmental regulatory agencies arising out of pre-petition
stipulated penalties related to consent decrees and other pre-petition
regulatory enforcement actions. The Company also believes that it has
settled and/or discharged environmental liability for any known
Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA or Superfund) sites arising out of pre-petition activity.                                                                                                                                                                                                                                               
|   
|    |  | Currently, the Company estimates that demands for stipulated penalties and
fines for post-petition events and activities through June 30, 2004 could
total approximately $2.2 million, 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) $1.8 million related to a
January 30, 1996 USEPA consent decree for the Companys coke oven gas
desulfurization facility; (b) $0.3 million related to a July 1991 USEPA
consent decree for water discharges to the Ohio River; and (c) $0.1 million
related to a September 20, 1999 Ohio EPA consent decree for the Companys
coke oven gas desulfurization facility.                                                                                              
|   
|    |  | 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.
Approximately $1.4 million was spent on these activities in 2002 and an
additional $0.4 million in 2003. During removal activities in 2003, the
Company discovered a broader area of contaminated sediments. The Company
identified the spatial limits of these contaminated sediments and estimate
their removal costs at                                                                                                                                                                                                                                                                           

12



---



##### Table of Contents





|    |  | $4.0 million, which has been fully reserved by the Company. The Company
currently expects this work to be substantially complete by the end of 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | 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 has
approved the Companys investigation workplan, and field activities are
scheduled for 2004. Following this investigation, the Company will perform a
study to determine possible remedial measures. 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 approximately $5.6
million for such remediation measures. However, the field investigation is
not completed and the remediation plan has yet to be submitted to the USEPA;
therefore the full extent and cost of remediation could be different from
current estimates.
|   
|    |  | The USEPA conducted a multimedia inspection of our Steubenville, Mingo
Junction, Yorkville and Martins Ferry, Ohio and Follansbee, West Virginia
facilities in March and June 1999. The inspection covered environmental
regulations applicable to these plants. Many of the issues were resolved and
settled prior to emergence from Chapter 11 bankruptcy. Based on current
estimates, the Company has reserved $1.4 million for resolution of
outstanding issues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | Capital expenditures for environmental projects totaled $0.3 million for the
quarter ended June 30, 2004 and $0.6 million for the six months ended June
30, 2004. The Company estimates capital expenditures for environmental
projects to be $4.5 million for 2004, $9.0 million for 2005 and $7.0 million
for 2006. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Accrued environmental liabilities totaled $14.4 million at June 30, 2004 and
$14.7 million at December 31, 2003. 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 on a quarterly basis and the accruals
are adjusted accordingly. Unless stated above, the time-frame over which
these liabilities will be paid 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 $5.0 million.                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  | The 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 Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | WPSC is the issuer of the outstanding $40 million Series A notes and $20
million Series B notes. The Series A notes and
Series B notes are each fully and unconditionally guaranteed,
jointly and severally, by WPC and its present and future significant
subsidiaries. WPSC and each subsidiary guarantor of the Series A
and Series B notes are 100% owned by the parent guarantor, WPC.
Because the subsidiary guarantors are minor, individually and in the
aggregate, the combined consolidating financial information for WPC
and the subsidiary guarantors has been combined below in the column
entitled WPC and Subsidiary Guarantors.                                                                                                                                                                                                                                                                                                                                                           

13



---



##### Table of Contents





| |  | Prior to the Companys reorganization in
bankruptcy, WPC, then a wholly-owned subsidiary of WHX Corporation, a
public company, had issued $275 million principal amount
9 1/4% senior notes in a registered exchange offer under the
Securities Act of 1933. These notes were fully and
unconditionally guaranteed, jointly and severally, by WPCs
then-existing and future operating subsidiaries. As discussed more
fully in Note 2 above, the WPC 9 1/4% senior notes were
extinguished pursuant to the Company's plan of reorganization on or
about August 1, 2003.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CONDENSED CONSOLIDATING BALANCE SHEETS
Reorganized Company

June 30, 2004WPC and
    
    
    
    
    
    ConsolidatingSubsidiary
    
    
    
    
    
    and Eliminating
    
    WPCGuarantors
    
    WPSC
    
    Entries
    
    Consolidated(Dollars in thousands)AssetsCash and cash equivalents
    
    $
    
    
    
    $
    3,068
    
    
    $
    
    
    
    $
    3,068Trade accounts receivables
    
    
    
    
    
    
    150,424
    
    
    
    
    
    
    
    150,424Inventories
    
    
    
    
    
    
    135,711
    
    
    
    
    
    
    
    135,711Other current assets
    
    
    18
    
    
    
    10,483
    
    
    
    
    
    
    
    10,501Total current assets
    
    
    18
    
    
    
    299,686
    
    
    
    
    
    
    
    299,704Intercompany receivables
    
    
    
    
    
    
    1,070
    
    
    
    (1,070
    )
    
    
    Investments and advances in affiliates
    
    
    126,627
    
    
    
    45,855
    
    
    
    (126,627
    )
    
    
    45,855Property, plant and equipment  net
    
    
    
    
    
    
    433,207
    
    
    
    
    
    
    
    433,207Restricted cash
    
    
    
    
    
    
    46,996
    
    
    
    
    
    
    
    46,996Other non-current assets
    
    
    1,083
    
    
    
    67,874
    
    
    
    
    
    
    
    68,957Total Assets
    
    $
    127,728
    
    
    $
    894,688
    
    
    $
    (127,697
    )
    
    $
    894,719Liabilities and stockholders equityAccounts payable
    
    $
    
    
    
    $
    80,921
    
    
    $
    
    
    
    $
    80,921Other current liabilities
    
    
    
    
    
    
    190,657
    
    
    
    
    
    
    
    190,657Total current liabilities
    
    
    
    
    
    
    271,578
    
    
    
    
    
    
    
    271,578Intercompany payable
    
    
    1,070
    
    
    
    
    
    
    
    (1,070
    )
    
    
    Long term debt
    
    
    
    
    
    
    323,722
    
    
    
    
    
    
    
    323,722Other non-current liabilities
    
    
    360
    
    
    
    172,761
    
    
    
    
    
    
    
    173,121Stockholders equity
    
    
    126,298
    
    
    
    126,627
    
    
    
    (126,627
    )
    
    
    126,298Total Liabilities and Stockholders Equity
    
    $
    127,728
    
    
    $
    894,688
    
    
    $
    (127,697
    )
    
    $
    894,719


14



---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
Reorganized Company

December 31, 2003WPC and
    
    
    
    
    
    ConsolidatingSubsidiary
    
    
    
    
    
    and Eliminating
    
    WPCGuarantors
    
    WPSC
    
    Entries
    
    Consolidated(Dollars in thousands)AssetsCash and cash equivalents
    
    $
    
    
    
    $
    4,767
    
    
    $
    
    
    
    $
    4,767Trade accounts receivables
    
    
    
    
    
    
    104,025
    
    
    
    
    
    
    
    104,025Inventories
    
    
    
    
    
    
    146,895
    
    
    
    
    
    
    
    146,895Other current assets
    
    
    12
    
    
    
    11,571
    
    
    
    
    
    
    
    11,583Total current assets
    
    
    12
    
    
    
    267,258
    
    
    
    
    
    
    
    267,270Intercompany receivables
    
    
    
    
    
    
    495
    
    
    
    (495
    )
    
    
    Investments and advances in affiliates
    
    
    104,593
    
    
    
    42,857
    
    
    
    (104,593
    )
    
    
    42,857Property, plant and equipment  net
    
    
    
    
    
    
    387,765
    
    
    
    
    
    
    
    387,765Other non-current assets
    
    
    896
    
    
    
    170,098
    
    
    
    
    
    
    
    170,994Total Assets
    
    $
    105,501
    
    
    $
    868,473
    
    
    $
    (105,088
    )
    
    $
    868,886Liabilities and stockholders equityAccounts payable
    
    $
    
    
    
    $
    76,108
    
    
    $
    
    
    
    $
    76,108Other current liabilities
    
    
    33
    
    
    
    183,364
    
    
    
    
    
    
    
    183,397Total current liabilities
    
    
    33
    
    
    
    259,472
    
    
    
    
    
    
    
    259,505Intercompany payable
    
    
    495
    
    
    
    
    
    
    
    (495
    )
    
    
    Long term debt
    
    
    
    
    
    
    340,696
    
    
    
    
    
    
    
    340,696Other non-current liabilities
    
    
    360
    
    
    
    163,712
    
    
    
    
    
    
    
    164,072Stockholders equity
    
    
    104,613
    
    
    
    104,593
    
    
    
    (104,593
    )
    
    
    104,613Total Liabilities and Stockholders Equity
    
    $
    105,501
    
    
    $
    868,473
    
    
    $
    (105,088
    )
    
    $
    868,886


15



---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Reorganized Company

Quarter Ended June 30, 2004WPC and
    
    
    
    
    
    ConsolidatingSubsidiary
    
    
    
    
    
    and Eliminating
    
    WPCGuarantors
    

WPSC
    
    Entries
    
    Consolidated(Dollars in thousands)Income DataNet sales
    
    $
    
    
    
    $
    356,121
    
    
    $
    
    
    
    $
    356,121Cost of products sold,
    
    
    
    
    
    
    292,820
    
    
    
    
    
    
    
    292,820Depreciation
and amortization expense
    
    
    
    
    
    
    7,512
    
    
    
    
    
    
    
    7,512Selling, administrative and general expense
    
    
    283
    
    
    
    16,066
    
    
    
    
    
    
    
    16,349Operating income (loss)
    
    
    (283
    )
    
    
    39,723
    
    
    
    
    
    
    
    39,440Reorganization income (expense)Fair value adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on discharge of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other reorganization entries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense
    
    
    
    
    
    
    (5,058
    )
    
    
    
    
    
    
    (5,058
    )Other income including equity earnings
of affiliates
    
    
    27,233
    
    
    
    4,653
    
    
    
    (27,233
    )
    
    
    4,653Income before income taxes
    
    
    26,950
    
    
    
    39,318
    
    
    
    (27,233
    )
    
    
    39,035Income tax provision (benefit)
    
    
    (108
    )
    
    
    12,085
    
    
    
    
    
    
    
    11,977Net income
    
    $
    27,058
    
    
    $
    27,233
    
    
    $
    (27,233
    )
    
    $
    27,058


Six Months Ended June 30, 2004WPC and
    
    
    
    
    
    ConsolidatingSubsidiary
    
    
    
    
    
    and Eliminating
    
    WPCGuarantors
    
    WPSC
    
    Entries
    
    Consolidated(Dollars in thousands)Income DataNet sales
    
    $
    
    
    
    $
    630,327
    
    
    $
    
    
    
    $
    630,327Cost of products sold
    
    
    
    
    
    
    548,889
    
    
    
    
    
    
    
    548,889Depreciation and amortization expense
    
    
    
    
    
    
    15,201
    
    
    
    
    
    
    
    15,201Selling, administrative and general expense
    
    
    536
    
    
    
    30,759
    
    
    
    
    
    
    
    31,295Operating income (loss)
    
    
    (536
    )
    
    
    35,478
    
    
    
    
    
    
    
    34,942Reorganization income (expense)Fair value adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on discharge of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other reorganization entries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense
    
    
    
    
    
    
    (10,277
    )
    
    
    
    
    
    
    (10,277
    )Other income including equity earnings
of affiliates
    
    
    20,781
    
    
    
    7,665
    
    
    
    (20,781
    )
    
    
    7,665Income before income taxes
    
    
    20,245
    
    
    
    32,866
    
    
    
    (20,781
    )
    
    
    32,330Income tax provision (benefit)
    
    
    (187
    )
    
    
    12,085
    
    
    
    
    
    
    
    11,898Net income
    
    $
    20,432
    
    
    $
    20,781
    
    
    $
    (20,781
    )
    
    $
    20,432


16



---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Predecessor Company

Quarter Ended June 30, 2003ConsolidatingSubsidiary
    
    and Eliminating
    
    WPCWPC
    
    Guarantors
    
    Entries
    
    Consolidated(Dollars in thousands)Income DataNet sales
    
    $
    
    
    
    $
    250,469
    
    
    $
    
    
    
    $
    250,469Cost of products sold
    
    
    (7,982
    )
    
    
    247,684
    
    
    
    
    
    
    
    239,702Depreciation and amortization expense
    
    
    
    
    
    
    16,349
    
    
    
    
    
    
    
    16,349Selling, administrative and general expense
    
    
    (81
    )
    
    
    11,475
    
    
    
    
    
    
    
    11,394Reorganization and professional fee expense
    
    
    
    
    
    
    2,845
    
    
    
    
    
    
    
    2,845Operating income (loss)
    
    
    8,063
    
    
    
    (27,884
    )
    
    
    
    
    
    
    (19,821
    )Reorganization income (expense)
    
    
    171
    
    
    
    (2
    )
    
    
    
    
    
    
    169Interest expense
    
    
    
    
    
    
    (5,735
    )
    
    
    1,663
    
    
    
    (4,072
    )Other income including equity earnings
of affiliates
    
    
    (26,616
    )
    
    
    58,934
    
    
    
    (30,706
    )
    
    
    1,612Income (loss) before income taxes
    
    
    (18,382
    )
    
    
    25,313
    
    
    
    (29,043
    )
    
    
    (22,112
    )Income tax provision (benefit)
    
    
    3,092
    
    
    
    (3,730
    )
    
    
    
    
    
    
    (638
    )Net income (loss)
    
    $
    (21,474
    )
    
    $
    29,043
    
    
    $
    (29,043
    )
    
    $
    (21,474
    )


Six Months Ended June 30, 2003ConsolidatingSubsidiary
    
    and Eliminating
    
    WPCWPC
    
    Guarantors
    
    Entries
    
    Consolidated(Dollars in thousands)Income DataNet sales
    
    $
    
    
    
    $
    489,141
    
    
    $
    
    
    
    $
    489,141Cost of products sold
    
    
    (7,982
    )
    
    
    494,937
    
    
    
    
    
    
    
    486,955Depreciation and amortization expense
    
    
    
    
    
    
    33,794
    
    
    
    
    
    
    
    33,794Selling, administrative and general expense
    
    
    208
    
    
    
    25,050
    
    
    
    
    
    
    
    25,258Reorganization and professional fee expense
    
    
    
    
    
    
    6,145
    
    
    
    
    
    
    
    6,145Operating income (loss)
    
    
    7,774
    
    
    
    (70,785
    )
    
    
    
    
    
    
    (63,011
    )Reorganization income (expense)
    
    
    171
    
    
    
    (11
    )
    
    
    
    
    
    
    160Interest expense
    
    
    
    
    
    
    (10,634
    )
    
    
    2,911
    
    
    
    (7,723
    )Other income including equity earnings
of affiliates
    
    
    (71,394
    )
    
    
    152,855
    
    
    
    (78,615
    )
    
    
    2,846Income (loss) before income taxes
    
    
    (63,449
    )
    
    
    71,425
    
    
    
    (75,704
    )
    
    
    (67,728
    )Income tax provision (benefit)
    
    
    3,650
    
    
    
    (4,279
    )
    
    
    
    
    
    
    (629
    )Net income (loss)
    
    $
    (67,099
    )
    
    $
    75,704
    
    
    $
    (75,704
    )
    
    $
    (67,099
    )


17



---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Reorganized Company

Six Months Ended June 30, 2004WPC and
    
    
    
    
    
    ConsolidatingSubsidiary
    
    
    
    
    
    and Eliminating
    
    WPCGuarantors
    

WPSC
    
    Entries
    
    Consolidated(Dollars in thousands)Net cash used in operating activities
    
    $
    
    
    
    $
    22,312
    
    
    $
    
    
    
    $
    22,312Investing activities:Capital expenditures
    
    
    
    
    
    
    (60,211
    )
    
    
    
    
    
    
    (60,211
    )Construction of equipment using restricted cash
    
    
    
    
    
    
    40,142
    
    
    
    
    
    
    
    40,142Other
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    731Net cash used in investing activities
    
    
    
    
    
    
    (19,338
    )
    
    
    
    
    
    
    (19,338
    )Financing activities:Net borrowings
    
    
    
    
    
    
    (1,247
    )
    
    
    
    
    
    
    (1,247
    )Book overdraft
    
    
    
    
    
    
    (3,426
    )
    
    
    
    
    
    
    (3,426
    )Net cash provided by financing activities
    
    
    
    
    
    
    (4,673
    )
    
    
    
    
    
    
    (4,673
    )Net change in cash and cash equivalents
    
    
    
    
    
    
    (1,699
    )
    
    
    
    
    
    
    (1,699
    )Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    4,767
    
    
    
    
    
    
    
    4,767Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    3,068
    
    
    $
    
    
    
    $
    3,068


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Predecessor Company

Six Months Ended June 30, 2003ConsolidatingSubsidiary
    
    and Eliminating
    
    WPCWPC
    
    Guarantors
    
    Entries
    
    Consolidated(Dollars in thousands)Net cash provided by operating activities
    
    $
    2
    
    
    $
    6,905
    
    
    $
    
    
    
    $
    6,907Investing activities:Capital expenditures
    
    
    
    
    
    
    (2,450
    )
    
    
    
    
    
    
    (2,450
    )Construction of equipment using restricted cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    801
    
    
    
    
    
    
    
    801Net cash used in investing activities
    
    
    
    
    
    
    (1,649
    )
    
    
    
    
    
    
    (1,649
    )Financing activities:Net repayments
    
    
    
    
    
    
    (1,062
    )
    
    
    
    
    
    
    (1,062
    )Book overdraft
    
    
    
    
    
    
    1,049
    
    
    
    
    
    
    
    1,049Other
    
    
    
    
    
    
    (4,557
    )
    
    
    
    
    
    
    (4,557
    )Net cash used in financing activities
    
    
    
    
    
    
    (4,570
    )
    
    
    
    
    
    
    (4,570
    )Net change in cash and cash equivalents
    
    
    2
    
    
    
    686
    
    
    
    
    
    
    
    688Cash and cash equivalents at beginning of period
    
    
    37
    
    
    
    8,506
    
    
    
    
    
    
    
    8,543Cash and cash equivalents at end of period
    
    $
    39
    
    
    $
    9,192
    
    
    $
    
    
    
    $
    9,231


18



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##### Table of Contents






Item 2  MANAGEMENTSS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Certain sections of Managements Discussion and Analysis 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 Consolidated Financial Statements, the disclosures included below under
Quantitative and Qualitative Disclosures About Market Risk, and Form 10-K Part
I, Item I for the year ended December 31, 2003.

OVERVIEW

We produce flat rolled steel products for the construction industry, steel
service centers, converters, processors, and the container and appliance
industries. Our product offerings are focused predominately on higher
value-added finished steel products such as cold rolled products, tin and zinc
coated products and fabricated products. In addition, we produce semi-finished
steel products and hot rolled steel products, which represent the least
processed of our finished goods.

An operating division of Wheeling-Pittsburgh Steel Corporation (WPSC), Wheeling
Corrugating Company manufactures our fabricated steel products for the
construction, agricultural and highway industries. WPSC also has ownership
interests in two joint ventures, Wheeling-Nisshin, Inc. and Ohio Coating
Company, that together consumed more than 30% of our steel tonnage shipped in
2003, representing 27.5% of our 2003 net sales. These joint ventures produce
value-added steel products from materials and products supplied by us.

The steel industry is cyclical and highly competitive and is affected by excess
world capacity, which has restricted price increases during periods of economic
growth and led to price decreases during economic contraction. Beginning in
1998 and continuing through 2000, record high levels of foreign steel imports
as well as a general overcapacity in worldwide steel production caused a marked
deterioration of steel prices, resulting in huge losses and substantial harm to
the domestic steel industry. This record high level of foreign steel imports
over a three year period, coupled with the indebtedness we incurred as a result
of a ten-month work stoppage which ended in August 1997, and approximately $200
million of capital expenditures used to modernize our facilities to increase
quality, efficiency, safety and environmental conditions, resulted in
substantial losses and the severe erosion of our financial position and
liquidity. These losses and erosion of liquidity continued to occur
notwithstanding increases in operating efficiencies resulting from the
modernization of our facilities, various cost saving measures and the
elimination of 20% of our hourly workforce negotiated in 1997, ultimately
resulting in us filing for relief under Chapter 11 of the US Bankruptcy Code,
as described below under the heading Reorganization.

Over the past six months, several factors, including an overall increase in the
demand for steel, particularly in China and other countries, higher raw
material input costs and a continuing weak US dollar have resulted in
substantial increases in steel selling prices in the United States. The cost
to produce steel has also increased, principally due to an increase in the cost
of raw materials, in particular scrap, coal, coke and natural gas. The net
result has had a favorable impact on our operating results and most other
domestic steel producers.

In August 2004, the Army Corp of Engineers will close a lock on the Ohio River
at Louisville, KY to perform a scheduled two-week repair. River traffic will
stop during the repair, and be disrupted for some period afterwards. The
Company relies on river traffic passing through the affected area for most of
its iron ore supply and some shipments of our steel products. Currently, we
are also relying on the receipt of supplemental coke purchases passing through
this area. In preparation for the lock closure, we have accelerated receipt of
some purchased coke, made provision for the shipment of iron ore by higher cost
rail, and accelerated shipment of products to certain customers in advance of
the closure. In addition to the temporary liquidity impact from accelerated
coke purchases, we expect to incur $2 to $3 million of additional freight costs
in the third quarter attributable to the closure of the lock.

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REORGANIZATION

On November 16, 2000, Wheeling-Pittsburgh Corporation (WPC) and eight of its
then-existing wholly-owned subsidiaries, which represented substantially all of
our business, filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court. We
commenced the Chapter 11 proceedings in order to restructure our outstanding
debts and to improve our access to the additional funding that we needed to
continue our operations. Throughout the Chapter 11 proceedings, we remained in
possession of our properties and assets and continued to operate and manage our
businesses with the then-existing directors and officers as
debtors-in-possession subject to the supervision of the Bankruptcy Court.

As part of our Chapter 11 proceedings, we filed our original Joint Plan of
Reorganization on December 20, 2002, our First Amended Joint Plan of
Reorganization on January 9, 2003, our Second Amended Joint Plan of
Reorganization on May 5, 2003 and our Third Amended Joint Plan of
Reorganization on May 19, 2003, reflecting the final negotiations with
pre-petition note holders, pre-petition trade creditors and unionized
employees. Our plan of reorganization was confirmed on June 18, 2003 and became
effective on August 1, 2003. We realized approximately $558 million in
cancellation of debt income as a result of our reorganization.

The following is a summary of some of the significant transactions consummated
on or about the effective date of our plan of reorganization:



| |  | WPC amended and restated its by-laws and filed a second amended and
restated certificate of incorporation with the Delaware Secretary of
State authorizing the issuance of up to an aggregate of 80 million
            shares of common stock, par value $0.01 per share, and 20 million
            shares of undesignated preferred stock, par value $0.001 per share.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | WPC exchanged, on a pro rata basis, $275 million in senior notes and
$75 million in term notes that existed prior to its bankruptcy filing
for an aggregate of $20 million in cash, $40 million in new Series A
secured notes issued by Wheeling-Pittsburgh Steel Corporation (WPSC),
which are collateralized by a second lien on our tangible and
intangible assets (other than our accounts receivable and inventory)
and our equity interests in our joint ventures and a third lien on our
accounts receivable and inventory, $20 million in new Series B secured
notes issued by WPSC, which are collateralized by a fifth lien on our
tangible and intangible assets, our equity interests in our joint
ventures, and our accounts receivable and inventory, and 3,410,000
shares of new common stock of WPC constituting 34.1% thereof.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | WPC cancelled its then-existing senior notes and related indenture and
its then-existing term notes and the related term loan agreement.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | WPC cancelled all shares of its common stock that existed prior to the
implementation of our plan of reorganization, at which point we ceased
to be a subsidiary of WHX Corporation.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | WPSC entered into a new $250 million senior secured term loan
facility, which is guaranteed in part by the Emergency Steel Loan
Guarantee Board, the West Virginia Housing Development Fund, WPC and
WPSCs subsidiaries and is collateralized by a first lien on our
tangible and intangible assets (other than accounts receivable and
inventory) and our equity interests in our joint ventures and a second
lien on our accounts receivable and inventory. We also entered into a
new $225 million senior secured revolving credit facility, which is
guaranteed by WPC and WPSCs subsidiaries and is collateralized by a
first lien on our accounts receivable and inventory and a third lien
on our other tangible and intangible assets and our equity interests
in our joint ventures.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | All of our obligations under our $195 million debtor-in-possession
credit facility were satisfied in full and discharged.
|- |  | -------------------------------------------------------------------------------------------------------------------------



| |  | WPC and WPSC entered into an agreement with WHX Corporation providing
for, among other things, a $10 million capital contribution by WHX
Corporation, the capitalization of approximately $40 million in debt
owed by us to WHX Corporation, a $10 million unsecured loan from WHX
Corporation and an agreement with respect to our separation from WHX
Corporations employee pension plan.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | WPC and WPSC entered into an agreement with our unionized employees
represented by the United Steelworkers of America (USWA) which
modified our existing labor agreement to provide for, among other
things, future pension arrangements with the United Steelworkers of
America and reductions in our employee-related costs.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | WPC issued 4 million shares of its new common stock constituting 40%
thereof for the benefit of the USWA retirees in satisfaction of
certain claims under our labor agreement and an additional 1 million
            shares of its new common stock constituting 10% thereof to or for the
benefit of our salaried employees.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | WPC issued 1,590,000 shares of its new common stock constituting 15.9%
thereof to certain of our creditors in satisfaction of various
unsecured claims, including claims relating to trade debt.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There are still several matters pending in the Bankruptcy Court, including the
resolution of disputed unsecured and administrative claims and certain
preference actions and other litigation where we are seeking to recover monies.
As of June 30, 2004, approximately 85,811 shares of common stock issued
pursuant to the plan of reorganization were reserved for distribution to
creditors pending resolution of certain disputed claims. If those claims are
ultimately allowed in whole or in part by the Bankruptcy Court, the appropriate
amount of stock will be distributed to those claimants; if the claims are
disallowed, the stock will be distributed to other creditors of the same class,
pro rata. To the extent that certain administrative and secured claims are
allowed by the Bankruptcy Court, those claims will be paid in cash, in an
amount which we expect will not exceed $100,000 and for which there are
sufficient reserves held by the distribution agent. If and to the extent those
claims are allowed as pre-petition unsecured claims, then those creditors will
receive stock, which has been reserved as described above. In addition, we are
the plaintiffs in a number of preference actions, where we are seeking to
recover monies from creditors. We do not believe that any of these remaining
bankruptcy proceedings, individually or in the aggregate, will have a material
effect on us.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the US requires management to make judgments,
estimates and assumptions that affect reported amounts of assets and
liabilities at the balance sheet date and the reported revenues and expenses
for the period. Our judgments and estimates are based on both historical
experience and our expectations for the future. As a result, actual results may
differ materially from current expectations.

We believe that the following are the more significant judgments and estimates
used in the preparation of the financial statements.

Fresh start reporting

In accordance with SOP 90-7, effective as of July 31, 2003, we adopted Fresh
Start Reporting for our reorganized company and recorded assets and
liabilities at their fair values. Enterprise value was estimated using
discounted cash flow methodologies and analysis of comparable steel companies.

Other postemployment benefits (OPEB)

The traditional medical and life insurance benefits that were provided to past
retirees were terminated effective October 1, 2003. Pursuant to our labor
agreement, which we entered into in connection with our plan of reorganization,
past retirees will receive medical and life insurance benefits under a VEBA
trust. Future retirees under the new labor agreement will be covered by a
medical and life insurance program similar to that of active employees. All
retirees and their surviving spouses shall be required to make monthly
contributions for medical and prescription drug coverage, which, in the case of
those covered under the VEBA trust, are made directly to the trust. Because
these benefits provided by us will be paid in the future over what could be
many years, we estimate the accrued liability at each year-end balance sheet
date using actuarial methods. The two most significant assumptions used in
determining the liability are the projected medical cost trend rate and the
discount rate.

We estimate the escalation trend in medical costs based on historical rate
experience in our plans and through consultation with health care specialists.
We have assumed an initial escalation rate of 8.25% in 2003. This rate is
assumed to decrease gradually to an ultimate rate of 4.75% in 2008 and remain
at that level for all future years. The health care cost trend rate assumption
has a significant effect on the costs and obligation reported. A 1% increase in

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the health care cost trend rate would result in an increase in the accumulated
postretirement benefit obligation of approximately $19.2 million. A 1% decrease
in the health care cost trend rate would result in a decrease in the
accumulated postretirement benefit obligation of approximately $16.7 million.
A 1% increase in the health care costs trend rate would result in an increase
in post-retirement benefit expenses of approximately $1.8 million. A 1%
decrease in the health care cost trend rate would result in a decrease in
post-retirement benefit expenses of approximately $1.5 million.

The discount rate applied to our OPEB obligations is based on high quality bond
rates and the expected payout period of our OPEB obligations. The discount rate
used to measure our OPEB obligation at December 31, 2003 was 6.0%. A 1%
increase in the discount rate would result in a decrease in the accumulated
postretirement benefit obligation of approximately $16.8 million. A 1% decrease
in the discount rate would result in an increase in the accumulated
postretirement benefit obligation of approximately $20.5 million. A 1%
decrease in the discount rate would result in an increase in post-retirement
benefit expenses of approximately $2.0 million. A 1% increase in the discount
rate would result in a decrease in post-retirement benefit expenses of
approximately $1.5 million.

Asset impairments

We periodically evaluate property, plant and equipment for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. Asset impairments are recognized when the carrying value of
productive assets exceeds the net projected undiscounted cash flows from those
assets. Given our integrated operations, asset impairment evaluations are
generally done on a group basis. Undiscounted cash flows are based on
longer-term projections that consider projected market conditions and the
performance and ultimate use of the assets. If future demand and market
conditions are less favorable than those projected by management, or if the
probability of disposition of the assets differs from that previously estimated
by management, asset impairments may be required. The fair values as of August
1, 2003 used for fresh start reporting and the subsequent depreciation rates
reflected our intention to idle one of our blast furnaces.

Deferred taxes

Full realization of net deferred tax assets is dependent on our ability to
generate future taxable income and maintain substantially our existing
ownership. An ownership change, as defined in Section 382 of the Internal
Revenue Code of 1986, could impose annual limits, or completely eliminate net
operating loss carryovers. We record a valuation allowance to reduce deferred
tax assets to an amount that is more likely than not to be realized. During
2000, our company recorded a full valuation allowance against our net deferred
tax assets due to the uncertainties surrounding realization as a result of the
bankruptcy proceedings. Deferred tax assets that have arisen since that time,
which principally consist of net operating losses, have also been fully
reserved. However, as our operations continue, we will be required to
periodically reevaluate the tax treatment of these deferred tax assets in light
of actual operating results.

Environmental and legal contingencies

We provide for remediation costs, environmental penalties and legal
contingencies when the liability is probable and the amount of the associated
costs is reasonably determinable. We regularly monitor the progress of
environmental remediation and legal contingencies, and revises the amounts
recorded in the period in which changes in estimate occur. Conclusions
regarding exposure are developed in consultation with legal and environmental
counsel.

RESULTS OF OPERATIONS

The consolidated financial statements from and after the effective date of our
plan of reorganization, August 1, 2003, are those of a new reporting entity
(the Reorganized Company) and are not comparable to the pre-confirmation
periods of the old reporting entity (the Predecessor Company).

Quarter ended June 30, 2004  Reorganized Company

Net sales for the quarter ended June 30, 2004 totaled $356.1 million on
shipments of steel products totaling 548,474 tons. Steel prices averaged $649
per ton for the quarter, which included an average of $76 per ton relating to
surcharges. Steel prices increased 28% over the prior quarter, of which 7%
related to surcharge increases. Steel prices were up, in general, due to
continuing strong global demand for steel and a general improvement in economic

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conditions in the United States. The average steel price per ton reflects a
mix of products that includes 25.3% hot rolled.

Cost of goods sold totaled $292.8 million for the quarter. Cost of goods sold
averaged $534 per ton shipped for the quarter. Cost of goods sold increased by
$36.7 million over the first quarter. During the quarter, the cost of coke
increased approximately $11.0 million due to the need to acquire coke on the
open market as our coke batteries undergo repair; repair costs on the coke
batteries increased by approximately $6.0 million; VEBA and profit sharing
costs increased by approximately $10.4 million and the cost of other raw
material costs increased by approximately $3.8 million. Cost of goods sold was
reduced by $2.8 million during the quarter resulting from the settlement of
pre- petition insurance litigation. The raw steel production-operating rate
during the period was 97.9%.

Depreciation and amortization expense totaled $7.5 million for the quarter on
average fixed assets of $441.0 million. Fixed assets were recorded at fair
value based on independent appraisals as part of the reorganization.

Selling, administrative and general expense totaled $16.3 million for the
quarter.

Interest expense totaled $5.1 million for the period. Long-term debt averaged
$342.3 million during the quarter and borrowings under the revolving credit
facility ranged from $67.7 million to $98.2 million during the quarter.
Interest expense also includes amortization of capitalized finance costs.

Miscellaneous income totaled $4.7 million for the quarter, principally
reflecting equity earnings from joint ventures.

Net income for the quarter ended June 30, 2004 totaled $27.1 million, or $2.85
earnings per basic share and $2.79 earnings per diluted share.

Six months ended June 30, 2004  Reorganized Company

Net sales for the six months ended June 30, 2004 totaled $630.3 million on
shipments of steel products totaling 1,087,175 tons. Steel prices averaged $580
per ton during the period, which included an average of $58 per ton relating to
surcharges. Steel prices increased 33% over average steel prices for the
fourth quarter of 2003, of which 14% related to surcharge increases. The
average steel price per ton reflects a mix of products that includes 26.7% hot
rolled.

Cost of goods sold totaled $548.9 million for the period. Cost of goods sold
averaged $505 per ton shipped, an increase of 16% over costs incurred in the
fourth quarter of 2003. The increase in the cost was principally related to
increased raw material costs, fuel costs and those costs enumerated above with
respect to the second quarter. Cost of goods sold was reduced by $2.8 million
during the period resulting from the settlement of pre-petition insurance
litigation. The raw steel production-operating rate during the period was
94.9%.

Depreciation and amortization expense totaled $15.2 million for the period on
average fixed assets of $426.0 million. Fixed assets were recorded at fair
value based on independent appraisals as part of the reorganization.

Selling, administrative and general expense totaled $31.3 million for the
period.

Interest expense totaled $10.3 million for the period. Long-term debt averaged
$342.6 million during the period and borrowings under the revolving credit
facility ranged from $67.0 million to $98.2 million. Interest expense also
includes amortization of capitalized finance costs.

Miscellaneous income totaled $7.7 million for the period, principally
reflecting equity earnings of joint ventures.

Net income for the six months ended June 30, 2004 totaled $20.4 million, or
$2.15 earnings per basic share and $2.11 earnings per diluted share.

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Quarter ended June 30, 2003  Predecessor Company

Net sales for the quarter ended June 30, 2003 totaled $250.5 million on
shipments of steel products totaling 567,643 tons. Steel prices averaged $441
per ton. The average steel price per ton reflects a mix of products that
includes 22.8% hot rolled.

Cost of goods sold totaled $239.7 million for the period. Cost of goods sold
averaged $422 per ton shipped. The raw steel production-operating rate during
the quarter was 88.3%.

Depreciation expense totaled $16.3 million for the quarter on average fixed
assets, before revaluation, of $1,248.9 million.

Selling, administrative and general expense totaled $11.4 million for quarter.

Reorganization and professional fees related to the bankruptcy totaled $2.8
million.

Interest expense totaled $4.1 million for the period. Long-term debt averaged
$63.1million during the quarter and the revolving credit facility ranged from
$130.9 million to $153.8 million. Interest expense also includes amortization
of capitalized finance costs.

Miscellaneous income totaled $1.6 million for the quarter, principally
reflecting equity earnings of joint ventures.

Net loss for the quarter ended June 30, 2003 totaled $21.5 million. Prior to
reorganization, we were a wholly-owned subsidiary of WHX Corporation.

Six months ended June 30, 2003  Predecessor Company

Net sales for the six months ended June 30, 2003 totaled $489.1 million on
shipments of steel products totaling 1,116,500 tons. Steel prices averaged $438
per ton. The average steel price per ton reflects a mix of products that
includes 24.4% hot rolled.

Cost of goods sold totaled $487.0 million for the period. Cost of goods sold
averaged $436 per ton shipped. The raw steel production-operating rate during
the period was 92.6%.

Depreciation expense totaled $33.8 million for the period on average fixed
assets, before revaluation, of $1,248.3 million.

Selling, administrative and general expense totaled $25.3 million.

Reorganization and professional fees related to the bankruptcy totaled $6.1
million.

Interest expense totaled $7.7 million for the period. Long-term debt averaged
$63.4 million during the period and the revolving credit facility ranged from
$130.9 million to $153.9 million. Interest expense also includes amortization
of capitalized finance costs.

Miscellaneous income totaled $2.8 million for the period, principally equity
earnings of joint ventures.

Net loss for the six months ended June 30, 2003 totaled $67.1 million.

LIQUIDITY AND CAPITAL RESOURCES

Since our emergence from Chapter 11 bankruptcy proceedings, our primary sources
of liquidity have been term loans under our $250 million senior secured term
loan facility, revolving credit loans under our $225 million senior secured
revolving credit facility, and a $10 million unsecured loan from WHX
Corporation, which was subsequently sold by WHX to a third party. We have used
approximately $199.7 million of the proceeds of the foregoing debt financings
to pay our obligations under our plan of reorganization, including paying off
our debtor-in-possession credit facility and paying other cash claims under our
plan of reorganization. We expect to use the remainder of the

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proceeds to fund our ongoing operations, to service debt, to fund working
capital, to make capital expenditures on our existing facilities, including the
construction of an electric arc furnace, and for general corporate purposes.

As of June 30, 2004, we had the following amounts available for our working
capital and planned capital expenditures: cash and cash equivalents of
approximately $3.1 million; $47.0 million of restricted cash from borrowings
under our term loan facility for construction of the electric arc furnace; and
$54.7 million of availability under our new revolving credit facility, after
giving effect to the current $50 million minimum availability requirement
discussed more fully below.

We expect that the effects of our labor agreement and improved business
conditions will produce positive operating cash flows through 2004. For the
six months ended June 30, 2004, we generated cash flow from operating
activities of $22.3 million. Considering our liquidity position as of June 30,
2004 noted above and provided that business conditions continue at similar
levels, we anticipate being able to fund our debt service obligations and other
contractual obligations without the need for additional funding.

Our credit agreements require us to maintain borrowing availability of at least
$50 million under our revolving credit facility through December 31, 2004.
After December 31, 2004, we will be required to maintain borrowing availability
of at least $25 million. Under the terms of our amended term loan agreement, we
are also limited to a maximum of $150 million in borrowings, including
outstanding letters of credit, under our revolving credit facility. We
currently expect that we should be able to maintain this level of borrowing
availability of at least $50 million through December 31, 2004. This
expectation is based on our present belief that, among other things, current
market conditions with respect to orders, pricing and shipments, and our
operating performance will continue to be consistent with that of recent
months. However, it is possible that our borrowing availability could fall
below the current $50 million requirement, in the event of any adverse changes
to market conditions or our operating results, in which case we will be subject
to a fixed charge coverage ratio covenant under our term loan agreement and
revolving credit facility which we currently do not meet.

The following table summarizes the categories of collateral that we have
pledged to secure our current debt obligations and the ranking of our debt
obligations with respect to all of the security interests that we have granted
to date:

Collateral TypeTangible and intangibleassets andjoint venture equity
    
    Accounts receivable andinterest
    
    inventoryDebt obligation Secured byFirst
Security Interest
    
    $250 Million Term Loan
    
    $225 Million Revolving
Credit FacilityDebt obligation Secured bySecond Security Interest
    
    $40 Million Series A Notes
    
    $250 Million Term LoanDebt obligation Secured byThird Security Interest
    
    $225 Million
Revolving Credit Facility
    
    $40 million Series A
Notes FacilityDebt obligation Secured byFourth Security Interest
    
    Deferred payment
obligations in respect of
iron ore sales agreement
with Itabira Rio Doce
    
    Deferred payment
obligations in respect of
iron ore sales agreement
with Itabira Rio DoceDebt obligation Secured byFifth Security Interest
    
    $20 Million Series B Notes
    
    $20 Million Series B Notes


In the event that we are unable to satisfy our payment and other obligations
under our secured debt, the lenders of our secured debt have various rights and
remedies, including the right to force the sale of our assets and to apply the

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proceeds thereof to repay amounts owed by us. If such a foreclosure were to
occur, then we may be unable to maintain our operations, our business,
financial condition and results of operations could materially suffer and our
shareholders may lose all or part of their investment. A summary description
of these obligations follows:

$250 million term loan agreement

In connection with our plan of reorganization, WPSC entered into a $250 million
senior secured term loan agreement due August 1, 2014 with a bank group led by
Royal Bank of Canada as administrative agent, which is guaranteed in part by
the Emergency Steel Loan Guarantee Board, or the Steel Board, and the West
Virginia Housing Development Fund as described below. However, if the agent
for the term loan lenders is unable or unwilling, in its sole discretion, to
reoffer certain tranches of the term loan as of November 1, 2008, the maturity
date for each tranche of the term loan will be November 1, 2008. The agent is
required to provide us notice on or before May 1, 2008 as to whether it will
undertake to reoffer certain tranches of the term loan. If the agent does not
reoffer such tranches, we must pay the agent an amount equal to all outstanding
amounts under the term loan agreement on August 1, 2008. Interest on
borrowings is calculated based on either LIBOR or the prime rate using varying
spreads as defined for each of the three tranches in the agreement. The
blended rate of interest was approximately 2.8% at June 30, 2004, which
reflects the significant reduction in borrowing cost effective in June 2004, as
discussed more fully below. The term loan is to be repaid beginning in the
fourth quarter of 2004 in quarterly installments of $6.25 million with a final
payment to the agent of $150 million due on August 1, 2008 if such loan is not
reoffered.

Under the original terms of our term loan agreement, we were required to prepay
an amount equal to 50% of the net cash proceeds (as defined in the term loan
agreement) from any issuance or sale of our capital stock and to apply such net
cash proceeds to remaining installments in inverse order of maturity. In June
2004, we entered into an amendment and waiver to our term loan agreement to
eliminate these prepayment requirements with respect to any issuance or sale of
our capital stock on or before January 31, 2005. Specifically, the amendment
and waiver provides that the net cash proceeds from the sale of our common
stock in any offering on or before January 31, 2005 will be applied first to
repay any outstanding principal borrowing under our revolving credit facility
without reducing the commitment amount (excluding any letters of credit then
outstanding), second, to the extent of any excess, to fund up to $35 million in
capital expenditures and third, to the extent of any then-remaining excess, to
repay principal amounts outstanding under our term loan agreement, with such
repayments applied pro rata across all three term loan tranches and pro rata
against each scheduled maturity within each tranche. All proceeds up to $35
million that are allocated for capital expenditures will be held in a
segregated cash account. Additionally, the terms of the amendment and waiver
exclude from our restrictive covenants applicable to capital expenditures up to
$85 million relating to future capital improvement needs for our No. 8 coke
battery. The $85 million for the No. 8 coke battery and up to $35 million to
be held in the segregated cash account for capital expenditures are also
excluded from the computation of our consolidated fixed charge coverage ratio.
The amendment and waiver also limits us from having borrowings, including
outstanding letters of credit, in excess of $150 million under our revolving
credit facility. The amendment and waiver also provides for a 75 basis point
reduction in the interest rate spread for the loans in which the interest rate
is based upon the prime rate and a 120 basis point reduction in the interest
rate spread for the loans in which the interest rate is based upon the LIBOR
rate with respect to tranche B of the term loan, under which $209.2 million in
principal amount is outstanding.

Pursuant to the provisions of our term loan agreement, we are subject to, and
are currently in material compliance with, various covenants, including
compliance with the terms and conditions of the guarantee of the Steel Board
and the related guarantee of the West Virginia Housing Development Fund,
limitations on indebtedness, guaranty obligations, liens, sale of subsidiary
stock, dividends, distributions and investments. We will be subject to
additional financial covenants, including a maximum leverage ratio, minimum
interest coverage ratio and minimum fixed charge coverage ratio.

Our term loan agreement also limits our ability to incur certain capital
expenditures, including obligations under capital leases and capitalized
repairs and replacements. Under our term loan agreement, we are permitted to
incur capital expenditures with respect to certain specified projects up to
specified maximum amounts, including the EAF, an automatic roll changer system
at our Mingo Junction facility, and Allenport cold mill improvements. In
addition, the amendment and waiver permits us to incur capital expenditures
with respect to the rebuild of the No. 8 coke battery in an amount not to
exceed $85 million. We are further permitted to incur additional expenses for
capital

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improvements for other projects in amounts not to exceed in the aggregate
specified maximums for each calendar year, ranging from $33.9 million to $44
million.

$225 million revolving credit facility

In connection with our plan of reorganization, WPSC entered into a three-year
$225 million senior secured revolving credit facility with a bank group
arranged by Royal Bank of Canada and General Electric Capital Corporation.
Interest on borrowings is calculated based on either LIBOR or the prime rate
using spreads based on facility borrowing availability as defined in the
agreement. The facility matures on August 1, 2006. The blended rate of
interest was approximately 4.7% at June 30, 2004. At June 30, 2004, we had
borrowed approximately $78.1 million under the revolving credit facility and
had $54.7 million of net excess availability over the current required minimum
availability of $50 million. We are subject to, and are currently in compliance
with, various covenants set forth in the revolving credit agreement, which are
substantially similar to those contained in the term loan agreement, as
amended, as described above. Under the terms of our amended term loan
agreement, we are limited to a maximum of $150 million in borrowings, including
outstanding letters of credit, under our revolving credit facility.

Similar to the term loan agreement, we negotiated an amendment to our revolving
credit facility. Under the amendment, all proceeds up to $35 million that are
allocated for capital expenditures will be held in a segregated cash account.
The amendment also permits us to incur an additional $85 million in capital
expenditures toward the rebuild of the No. 8 coke battery. Of the $85 million
available for the No. 8 coke battery, only $18 million may be expended prior to
January 1, 2006. The $85 million for the No. 8 coke battery and up to $35
million to be held in a segregated cash account for capital expenditures are
also excluded from the computation of our consolidated fixed charge coverage
ratio.

$40 million Series A notes

On August 1, 2003, pursuant to our plan of reorganization, WPSC issued Series A
secured notes in the aggregate principal amount of $40 million in settlement of
claims under our bankruptcy proceedings. The Series A notes were issued under
an indenture among WPSC, WPC, WP Steel Venture Corporation and Bank One, N.A.,
as trustee. The Series A notes mature on August 1, 2011 and have no fixed
amortization, meaning that except for mandatory prepayments, based on excess
cash flow or proceeds of the sale of joint venture interests, no payment of
principal shall be required until such notes become due. The Series A notes
bear interest at a rate of 5% per annum until
July 1, 2008. Thereafter, such notes bear interest at a rate of 8% per annum.
In the event that at any time the distributions from Wheeling-Nisshin, Inc. and
Ohio Coatings Company (OCC) to WPSC are not adequate to pay all the interest
then due under the Series A notes or WPSC is not in compliance with the terms
of the term loan agreement or revolving credit facility, WPSC must pay both
cash interest and payment-in-kind interest at rates set forth in the Series A
notes. OCC is restricted from declaring dividends under the terms of its
credit agreement with Bank of America, N.A. However, OCC is permitted to make
distributions of interest and principal in respect of its indebtedness to WPC,
subject to certain limitation set forth in its credit agreement and its
subordination agreement. We are subject to, and are currently in compliance
with, various covenants set forth in the Series A note indenture, including
payment of principal and interest on the Series A notes, and limitations on
additional indebtedness, creation of liens, disposition of interests in
Wheeling-Nisshin, Inc. or OCC, and payments of dividends and distributions.

$20 million Series B notes

On August 1, 2003, pursuant to our plan of reorganization, WPSC issued Series B
secured notes in the aggregate principal amount of $20 million in settlement of
claims under our bankruptcy proceedings. The Series B notes were issued under
an indenture among WPSC, WPC, WP Steel Venture Corporation and Bank One, N.A.,
as trustee. The Series B notes mature on August 1, 2010 and have no fixed
amortization, meaning that no payment of principal shall be required until such
notes become due. The Series B notes bear interest at a rate of 6% per annum to
the extent interest is paid in cash. In the event that WPSC is not in
compliance with the terms of the term loan agreement, the revolving credit
facility or the Series A notes or WPSCs excess cash flow (as defined in the
Series B indenture) is insufficient to cover any or all interest payments then
due under the Series B notes, WPSC must pay both cash interest and
payment-in-kind interest at rates set forth in the Series B notes. We are
subject to, and are currently in compliance with, various covenants under the
Series B note indenture, which are substantially similar to many of those
contained in the Series A note indenture.

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$10 million unsecured note

On August 1, 2003, pursuant to our plan of reorganization, WPSC issued an
unsecured note in the aggregate principal amount of $10 million to WHX
Corporation, referred to as the WHX note. The WHX note matures in 2011 and has
no fixed amortization, meaning that no payment of principal shall be required
until such note becomes due. The WHX note bears interest at a rate of 6% per
annum. If cash interest is not paid, WPSC must pay payment-in-kind interest.
Such note is subordinated in right of payment to our credit agreements, the
Series A notes and the Series B notes. In July 2004, the WHX note was sold by
WHX to a third party.

OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2004, we had no off-balance sheet transactions, arrangements, or
other relationships with unconsolidated entities or persons that are reasonably
likely to adversely affect liquidity, availability of capital resources,
financial position or results of operations. We have investments in three joint
ventures, Wheeling-Nisshin, Inc. and OCC and Feralloy-Wheeling Specialty
Processing Co., that are each accounted for under the equity method. Pursuant
to agreements with Wheeling-Nisshin, Inc. and OCC and we have an obligation to
support their working capital requirements. However, we believe it is unlikely
that those joint ventures will require our working capital support in the
foreseeable future based upon the present financial condition, capital resource
needs and/or operations of these entities.

CERTAIN OTHER OBLIGATIONS

In connection with the implementation of our plan of reorganization, we reached
agreements with various parties to defer payments of indebtedness and reduce
costs in order to preserve liquidity upon emergence from bankruptcy. These
agreements include:



| |  | Modification and assumption agreement between WPSC and Danieli
Corporation. This agreement modifies an agreement between WPSC and
Danieli Corporation, dated July 6, 2000, pursuant to which WPSC agreed
to purchase from Danieli Corporation certain roll-changing equipment.
Under the original agreement, WPSC owed approximately $7.36 million to
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 Steel Board. The balance of
the amount owed to Danieli Corporation was converted into a promissory
note. In addition, WPSC agreed to pay Danieli Corporation
approximately $2.58 million (of which approximately $96,000 has been
paid and the balance of which is to be paid in progress payments as
work on the automatic roll changers project is completed, expected in
2006) to complete the roll-changing project and for rehabilitation,
storage and other costs of Danieli Corporation.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Loan agreement between WPSC and the State of West Virginia. In
connection with WPSCs repayment of a $5 million loan from the West
Virginia Development Office, WPSC has entered into a $6.5 million loan
agreement with the State of West Virginia. The loan has a five-year
term due August 1, 2008, and bears interest at a rate of approximately
4.564% per annum.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Agreement among WPSC, Itabira Rio Doce Company, Ltd. and Rio Doce
Limited. This agreement provides for repayment, in equal monthly
installments over a period not to exceed eighteen months from May 1,
2003, of WPSCs $5.1 million deferred payment obligation under a
certain iron ore sales agreement dated October 1, 2001. As of June
30, 2004, $1.5 million remained outstanding on this obligation.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, we have ongoing funding obligations under our labor agreement with
the USWA. Effective May 31, 2004, USWA wage rates increased by approximately
5.8%. In addition, a 12% temporary wage reduction that had

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been in effect since May 2003 was eliminated. We also increased wages for our
salaried employees by 5% effective June 1, 2004. We expect that these
adjustments to our wage rates will increase our labor costs by approximately
$4.3 million, in the aggregate, per quarter. All of the obligations referenced
in this section, except for the anticipated increase in wage rates, are
included in the table of contractual commitments set forth below.

CONTRACTURAL COMMITMENTS

As of June 30, 2004, the total of our future contractual obligations, including
the repayment of debt obligations, is summarized below.

Contractual Payments DueTotal
    
    From June 30, 2004
    
    2005 to 2006
    
    2007 to 2008
    
    ThereafterLong-Term Debt (1)
    
    
    409.9
    
    
    $
    20.1
    (2)
    
    $
    86.3
    (3)
    
    $
    226.0
    (4)
    
    $
    77.6
    (5)Capital Leases
    
    
    10.6
    
    
    
    0.9
    
    
    
    2.4
    
    
    
    1.8
    
    
    
    5.5Operating Leases:Long Term
    
    
    9.8
    
    
    
    0.9
    
    
    
    3.5
    
    
    
    3.6
    
    
    
    1.8Month to Month
    
    
    46.9
    
    
    
    4.3
    
    
    
    17.0
    
    
    
    17.0
    
    
    
    8.6Other Long Term Liabilities:OPEB
    
    
    100.2
    (6)
    
    
    2.9
    
    
    
    7.6
    
    
    
    9.4
    
    
    
    Severance
    
    
    19.7
    (7)
    
    
    5.2
    
    
    
    11.7
    
    
    
    2.3
    
    
    
    0.5Coal Miner Retiree Medical
    
    
    2.9
    
    
    
    0.1
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    2.0Workers Compensation
    
    
    20.9
    (8)
    
    
    2.5
    
    
    
    10.1
    
    
    
    8.3
    
    
    
    Purchase Commitments:Oxygen Supply
    
    
    75.0
    (9)
    
    
    3.6
    
    
    
    14.4
    
    
    
    14.4
    
    
    
    42.6Electricity
    
    
    118.5
    (10)
    
    
    4.5
    
    
    
    19.6
    
    
    
    22.1
    
    
    
    72.3Coal
    
    
    68.9
    (11)
    
    
    9.5
    
    
    
    39.6
    
    
    
    19.8
    
    
    
    Other
    
    
    1.1
    
    
    
    1.1
    
    
    
    
    
    
    
    
    
    
    
    Capital Commitments
    
    
    42.1
    (12)
    
    
    39.7
    
    
    
    2.4
    
    
    
    
    
    
    
    Total Contractual Obligations
    
    $
    926.5
    
    
    $
    95.3
    
    
    $
    215.0
    
    
    $
    325.1
    
    
    $
    210.9




|(1) |  | The interest rate associated with the term loan is a floating rate.
Interest payment projections in respect of the term loan assume that the
interest rate for 2004 will be 4% per annum and will increase by 0.5% each
year thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes interest payment obligations for the remainder of 2004 of
approximately: $5.0 million in respect of the term loan; $1.6 million in
respect of the Series A notes and the Series B notes; $307,000 in respect
of the WHX note; $305,000 in respect of the loan agreement with the State
of West Virginia; $75,000 in respect of the loan modification agreement
with the Ohio Department of Development;and $47,000 in respect of the
modification and assumption agreement with Danieli Corporation.                                                                                                                                            
|   
|(3) |  | Includes aggregate interest payment obligations for years 2005 and 2006
of approximately: $21.0 million in respect of the term loan; $6.5 million
in respect of the Series A notes and the Series B notes; $1.2 million in
respect of the WHX note; $611,000 in respect of the loan agreement with
the State of West Virginia; $100,000 in respect of the loan modification
agreement with the Ohio Department of Development; $107,000 in respect of
the modification and assumption agreement with Danieli Corporation; and
$283,000 in respect of a 5-year, $3.0 million loan agreement with Junction
Industries which bears interest at 7% per annum.
|   
|(4) |  | Includes aggregate interest payment obligations for years 2007 and 2008
of approximately: $15.9 million in respect of the term loan; $7.0 million
in respect of the Series A notes and the Series B notes; $1.2 million in
respect of the WHX note; $611,000 in respect of the loan agreement with
the State of West Virginia; $5,000 in respect of the modification and
assumption agreement with Danieli Corporation; and $113,000 in respect of
a 5-year loan agreement with Junction Industries.                                                                                                                                                     
|   
|(5) |  | Includes aggregate interest payment obligations of approximately: $10.5
million in respect of the Series A notes and the Series B notes; and $1.6
million in respect of the WHX not and $19,000 in respect of a 5-year loan
agreement with Junction Industries.                                                                                                                                                                                                                                                                                                                                                                                          

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|(6)  |  | Represents the estimated present value of our liability as of June 30,
2004. Amounts included for 2004 through 2008 reflect our current estimate
of corporate cash outflows and include the impact of assumed mortality,
medical inflation and the aging of the population. No estimate has been
made beyond 2008.                                                                                                                                                                                                                                                                                                                                                                                                      
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(7)  |  | Amount represents payments under buyout program. 650 Bargaining employees
elected buyouts that extend through 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|(8)  |  | Amount represents the present value of our liability as of June 30, 2004.
Amounts included for 2004 through 2008 and thereafter 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 and anticipates payment of approximately $5.1
million per year.                                                                                                                                                                                                                                                                                                                       
|    
|(9)  |  | 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. Payments for deliveries of oxygen totaled
$9.3 million in 2003, $7.0 million in 2002 and $7.5 million in 2001.                                                                                                                                                                                                                                                                                                                                                  
|    
|(10) |  | 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 $0.4 million. A
variable portion of the contract is calculated as $3.75 times the number
of tons of iron produced each month with an agreed to minimum of 3,000
tons per day. Payments for deliveries of steam and electricity totaled
$8.8 million in 2003, $13.8 million in 2002 and $14.6 million in 2001. If
the Company elects to terminate the contract early, a maximum termination
payment of $37.0 million would be required.                                                                        
|    
|(11) |  | In 2004,we amended its take-or-pay contract to purchase coal each month
to a minimum monthly charge of approximately $1.6 million. The term of the
contract expires on December 31, 2007, while the Company has the sole
option to terminate the contract on or after January 1, 2006. After such
date, the pricing will be subject to market conditions with a collar.
Payments for deliveries of coal totaled $11.8 million in 2003, $16.4
million in 2002 and $7.3 million in 2001. If we elect to terminate the
contract, a maximum termination payment of $37.4 million would be
required.                                                                                                                         
|    
|(12) |  | In June 2003, we entered into an agreement for the supply of equipment
and services with Junction Industries, Inc., pursuant to which Junction
Industries has agreed to provide equipment and services to design,
engineer, procure, fabricate, and assist us in the installation,
commissioning, start-up and testing of one 250-ton (tap weight) electric
arc furnace, one Consteel scrap conveyor system, ladle metallurgy furnace,
baghouse and certain other associated equipment for incorporation into the
electric arc furnace melt shop. The total cost of the electric arc furnace
is expected to be $114.9 million. As of June 30, 2004, capital commitments
remaining under the project total $41.9 million.

Planned capital expenditures

Our planned capital expenditures for the three-year period 2004 through 2006
total approximately $289.3 million, and include, but are not limited to, the
following capital expenditure projects:



| |  | $88.0 million remaining, as of January 1, 2004, for construction of the electric arc furnace, scheduled for completion in
the fourth quarter of 2004. At June 30, 2004, $41.9 million remained to be spent and is fully funded through a restricted
cash account;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | $85.0 million toward completion of a rebuild of the No. 8 coke battery, which is expected to extend the service life by 12
to 15 years, and is expected to begin in late 2005 and be completed in late 2006;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | $13.9 million for installation of hot strip mill automatic roll changers at our Mingo Junction facility, expected to occur
in 2006; and
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  | $10.4 million for cold mill improvements at our Allenport facility, expected to occur in 2005 and 2006.
|- |  | -------------------------------------------------------------------------------------------------------

In addition to the planned capital expenditure amounts identified above, we are
also contemplating, at our option, and subject to receipt of all necessary
environmental permitting requirements, a rebuild of the Nos. 1, 2 and 3 coke
batteries in 2008 and 2009, at an estimated aggregate cost of approximately
$47.0 million. Our decision to rebuild

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these coke batteries will depend, in part, on whether we believe potential
revenues from the sale of resulting excess coke production attributable to the
continued operation of these three batteries justifies these expenditures.

Under our credit agreements, we are permitted to undertake the construction of
the electric arc furnace, No. 8 coke battery rebuild, hot strip mill automatic
roll changer installation and cold mill improvements, subject to
pre-established spending limits provided in our restrictive covenants. These
covenants also limit the amounts that we can spend on any other capital
expenditure projects undertaken in 2004, 2005, and 2006 to $33.9 million, $44.0
million, and $37.1 million, respectively, subject to adjustment for permitted
carryover of a portion of any unexpended amounts in these years.

In the quarter ended June 30, 2004, we incurred approximately $36.1 million of
the planned capital expenditure amounts included in our business plan.

VEBA TRUST AND PROFIT SHARING PLANS
Below are summaries of our contribution obligations under the VEBA trust and
our two profit sharing plans, one for our USWA-represented employees and the
other for our salaried employees, excluding our officers. Our future
obligations, if any, under the VEBA trust and these plans are subject to and
based on the level of our profitability (as described below) for each completed
quarter. In addition, we have discretion, to the extent provided by the terms
of the agreement establishing the VEBA trust and the terms of the profit
sharing plans, to satisfy some or all of our funding obligations with shares of
our common stock or cash.

During the second quarter ended June 30, 2004, we incurred aggregate
contribution obligations under the VEBA trust and the profit sharing plans of
$14.3 million, of which $1.8 million will be satisfied in cash, with $8.6 being
payable in cash or common stock at our discretion. The remaining $3.9 million
of the contribution obligation incurred during the second quarter was
previously funded to the VEBA trust in the form of cash and common stock
contributions. We are unable to determine our contribution obligations for
subsequent quarters until such time as the financial results for such periods
become available.

VEBA trust

In connection with our plan of reorganization and our collective bargaining
agreement with the USWA, we established a plan to provide health care and life
insurance benefits to certain retirees and their dependents. The collective
bargaining agreement also required us to create and make contributions to a
trust to fund the payment of these retiree benefits. The trust, referred to
herein as the VEBA trust, is designed to constitute a tax-exempt voluntary
employee beneficiary association under Section 501(c)(9) of the Internal
Revenue Code. Pursuant to our plan of reorganization, we issued 4,000,000
shares of WPC common stock to the VEBA trust (the Initial Shares). Due to
certain restrictions on the VEBA trusts ability to sell stock held by the
trust to fund benefit payments (which are described in more detail below), the
agreement with the USWA provided for monthly cash contributions by us of $1.5
million, beginning in October 2003 and continuing through February 2004, and
$0.3 million from April 2004 through September 2004 for a total of $9.3 million
(collectively, the Initial Funding Obligation). In addition, the agreement
provides for ongoing contributions based on our profitability, payable within
45 days of the end of each fiscal quarter, under the following formula
(collectively, the Variable Contributions):



|(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.

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During the quarter ended June 30, 2004, variable contributions of $8.2 million
were incurred, of which, $1.8 million will be satisfied in cash, with $2.5
million being payable in cash or common stock at our discretion, which we
presently anticipate satisfying by contributing newly issued shares of our
common stock. The remaining portion of the variable contribution was
previously funded to the VEBA trust in the form of cash and common stock
contributions.

Operating cash flow, for purposes of determining Variable Contributions, is
defined as our earnings before interest and taxes, adjusted for certain amounts
as set forth in the agreement with the USWA (primarily unusual, extraordinary
or non-recurring items).

Previously, we contributed $3.0 million, in cash, to the VEBA trust toward
satisfaction of the Initial Funding Obligation. In March 2004, we agreed with
the USWA to satisfy the Initial Funding Obligation, as follows:



| |  | the trustee was authorized to sell up to 400,000 of the Initial
Shares, at its discretion (of which 42,400 shares have been sold
through June 30, 2004);
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the proceeds of the sale of 400,000 of the Initial Shares, not to
exceed $6.3 million, and the $3.0 million cash contribution previously
made will be credited, over a limited period of time, against future
Variable Contributions due under (i), (ii) and (iii) of the Variable
Contribution formula described above, if any, in accordance with the
terms of the agreement with the USWA;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the proceeds of the sale of 400,000 shares of the Initial Shares in
excess of $6.3 million, if any, will be creditable, at our discretion
against future Variable Contributions, if any are required under (i),
(ii) and (iii) of the Variable Contribution formula described above;
and
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | no later than February 14, 2008, we are required to contribute 400,000
additional shares of our common stock to the trust, minus any shares
of our common stock contributed prior to that date under (ii) of the
Variable Contribution formula described above.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To the extent that contributions become due under (ii) of the Variable
Contribution formula described above and we decide to make such contributions
in stock, we have discretion to apply up to 1.6 million of the Initial Shares
as a credit, share for share, against future contribution amounts to the trust.
Shares of WPC common stock contributed to the trust in satisfaction of, or in
the case of Initial Shares applied as a credit against, our obligations, are
valued based on the closing price of WPC common stock for the 10 trading days
immediately preceding the date of contribution.

Pursuant to a Stock Transfer Restriction and Voting Agreement, the VEBA trust
has agreed to limit the number of shares of WPC common stock that it may sell
during the four years following the effective date of our plan of
reorganization. During the first two years, the VEBA trust is not permitted to
sell any of the Initial Shares without our authorization unless it holds, at
the time of such sale, fewer than five percent of our outstanding shares of
common stock. During each of the following two years, the VEBA trust has agreed
not to sell more than 50% of the remaining Initial Shares within any
consecutive 12-month period. These restrictions will not apply to any
additional shares that we may contribute to the VEBA trust in satisfaction of
our Variable Contribution obligation, if any. As described above, we
authorized the disposition of 400,000 shares of our common stock held by the
VEBA trust in satisfaction of certain funding obligations with respect to the
trust. The VEBA trust previously sold 42,400 shares pursuant to this
authorization and we have agreed to permit the VEBA trust to sell the remaining
357,600 shares in a registered underwritten offering. In connection with the
stock transfer restrictions, the VEBA trust has also agreed that it will
abstain from voting 1.3 million shares of common stock, or such lesser number
of shares as it may hold from time to time, for the election of directors of
WPC. The VEBA trust has also agreed not to sell any shares of our common stock
for a period of 90 days following the pending issuance of our common stock.

Profit sharing plans

Pursuant to the collective bargaining agreement with the USWA, and in addition
to our obligations to make contributions to the VEBA trust based on our
profitability as described under VEBA Trust above, we have an obligation to
make quarterly profit sharing payments to or for the benefit of our active USWA
employees in an amount equal to 15% of our profits for the quarter, if any, in
excess of $30 profit per ton of steel shipped to third

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parties. For this purpose, profits are defined as earnings before interest and
taxes, calculated on a consolidated basis, excluding effects of certain amounts
as set forth in the collective bargaining agreement. The profit sharing pool
will be divided among all employees on the basis of hours attributed to each
employee within each quarter. We have the discretion to make future payments,
if any, in cash or in WPC common stock. Under the terms of the plan, we must
satisfy any profit sharing obligation with respect to the first, second and
third fiscal quarters within 45 days after the end of the quarter, while any
obligation with respect to the fourth fiscal quarter must be satisfied within
15 days after the date of the opinion of our independent registered public
accounting firm with respect to our annual audited financial statements. All
payments in stock will be contributed to the participants 401(k) account,
while payments in cash, if any, will be made directly to plan participants. To
the extent that contributions of stock under this plan in any fiscal year,
together with stock contributions to the VEBA trust, exceed 10% of our common
stock, on a fully diluted basis, we may satisfy our contribution obligation in
the form of profit sharing notes. All profit sharing payments that become due
are considered 100% vested when made.

During the quarter ended June 30, 2004, we incurred a profit sharing obligation
under this plan of $4.8 million, which may be settled in cash or in common
stock at our discretion, and which we presently anticipate satisfying by
contributing newly issued shares of our common stock.

In addition, we have adopted a profit sharing plan for salaried employees under
which we have an obligation to make quarterly profit sharing payments to or for
the benefit of our salaried employees in an amount equal to 4.19% of our
profits for the quarter, if any, in excess of $30 profit per ton of steel
shipped to third parties. For this purpose, profits are defined as earnings
before interest and taxes, calculated on a consolidated basis, excluding
effects of certain amounts as set forth in the plan. The profit sharing pool
will be divided among all salaried employees, excluding officers. During the
quarter ended June 30, 2004, a profit sharing obligation of $1.3 million was
incurred under this plan, which we presently anticipate satisfying by
contributing newly issued shares of our common stock. We have the discretion
to make future payments, if any, in cash or in WPC common stock. All payments
in stock will be contributed to the company stock fund (as defined in the plan)
under our salaried 401(k) savings plan, which restricts participants from
making dispositions of our common stock out of the fund for a period of 24
months following any contribution other than distributions following
termination of employment, or the death or disability of the participant. All
profit sharing payments that become due are considered 100% vested when made.

NEW ACCOUNTING STANDARDS

Under the provisions of SOP 90-7, the Company was required to adopt, as of July
31, 2003, all accounting guidance that was going to be effective within a
twelve-month period.

In May 2004, the FASB issued FASB Staff Position (FSP) No. 106-2, Accounting
and Disclosure Requirements Related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003. FSP 106-2 provides guidance on
accounting for the effects of the new Medicare prescription drug legislation by
employers whose prescription drug benefits are actuarially equivalent to the
drug benefit under Medicare Part D. FSP 106-2 supercedes FSP 106-1 and is
effective for the first interim or annual period beginning after June 15, 2004.
As allowed by FSP 106-1, the Company elected to defer recognizing the effects
of the new legislation. As of June 30, 2004, the Company has not made a final
determination of and continues to assess the impact of the new legislation on
the financial statements of the Company. The Company will adopt and apply the
guidance provided in FSP 106-2 beginning in the third quarter of 2004.

The Company adopted FASB No. 132-R (revised 2003), Employers Disclosures
about Pensions and Other Postretirement Benefits an amendment of FASB
Statements No. 87, 88, and 106 (FASB 132-R). FASB 132-R revises employers
disclosures about pension plans and other postretirement benefit plans. It
requires additional disclosures about the assets, obligations, cash flows, and
net periodic benefit cost of defined benefit pension plans and other defined
benefit postretirement plans. Additionally, FASB 132-R requires public
companies to make certain disclosures in their interim financial statements
with respect to net periodic pension expense and contributions paid. The
Company has provided the required interim disclosures in Note 8 to the
consolidated financial statements for their postretirement benefit plan. Due
to the immaterial amounts related to the Companys defined benefit pension
plan, disclosure has not been provided. As part of the provisions of SOP 90-7,
the Company was required to adopt on July 31, 2003 all accounting guidance that was going
to be effective within a twelve-month period.

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Item 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our quantitative and qualitative disclosures about market risk include
forward-looking statements with respect to managements opinion about the risk
associated with our financial instruments. These statements are based on
certain assumptions with respect to market prices, interest rates and other
industry-specific risk factors. To the extent these assumptions prove to be
inaccurate, future outcomes may differ materially from those discussed herein.

Commodity price risk and related risks

In the normal course of business, our company is exposed to market risk or
price fluctuation related to the purchase, production or sale of steel
products. In addition, prices for our raw materials, natural gas and
electricity requirements are subject to frequent market fluctuations. Our
companys market risk strategy generally has been to obtain competitive prices
for our products and services and to allow operating results to reflect market
price movements dictated by supply and demand. Additionally, we periodically
enter into contracts for the advance purchase of natural gas in an effort to
hedge against market fluctuations. Due to mark to market provisions in these
contracts, as our market exposure decreases, we can be required to make advance
payments that ultimately are recovered upon delivery of the commodity, but
which can temporarily reduce our liquidity until that time.

Interest rate risk

The fair value of cash and cash equivalents, receivables and accounts payable
approximate their carrying values and are relatively insensitive to changes in
interest rates due to their short-term maturity.

Under the Bankruptcy Code, interest is generally not allowable on unsecured
pre-petition obligations. Pursuant to our plan of reorganization, substantially
all of our pre-reorganization debt was repaid or otherwise satisfied and we
entered into new credit facilities. Under those new credit facilities, at June
30, 2004, we had outstanding $87.3 million aggregate principal amount of debt
under fixed-rate instruments and $334.6 million aggregate principal amount of
debt under variable-rate instruments. Since our portfolio of debt is comprised
primarily of variable-rate instruments, the fair value of the debt is
relatively insensitive to the effects of interest rate fluctuations. However,
our interest expense is sensitive to changes in the general level of interest
rates. A 100 basis point increase in the average rate for the variable-rate
debt would increase our annual interest expense by approximately $3.4 million.

Credit risk

Counter parties expose our company to credit risk in the event of
non-performance. We continually review the creditworthiness of our
counter-parties.

Foreign currency exchange risk

Our company has limited exposure to foreign currency exchange risk as almost
all of our transactions are denominated in U.S. dollars.

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Item 4  Controls and Procedures

We carried out an evaluation, under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this quarterly
report pursuant to Exchange Act Rule 13A-15. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective to ensure that material
information relating to us (including our subsidiaries) required to be included
in our reports we file with the Securities and Exchange Commission is
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms.

There have been no changes in internal control over financial reporting that
occurred during the quarter ended June 30, 2004 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.

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PART II  OTHER INFORMATION




Item 6  Exhibits and Reports of Form 8-K

(a) Exhibits

Exhibit No.
    
    Description31.1
    
    
    Certificate of James G. Bradley, Chief Executive Officer of the
Registrant, filed pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. 1350).31.2
    
    
    Certificate of Paul J. Mooney, Chief Financial Officer of the
Registrant, filed pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. 1350).32.1
    
    
    Certificate of James G. Bradley, Chief Executive Officer of the
Registrant, furnished pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (18 U.S.C. 1350).32.2
    
    
    Certificate of Paul J. Mooney, Chief Financial Officer of the
Registrant, furnished pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (18 U.S.C. 1350)


(b) Reports on Form 8-K

The Company filed a report on Form 8-K under item 12 on May 12, 2004.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

WHEELING-PITTSBURGH CORPORATION/s/
    
    Paul J. MooneyPaul J. Mooney
Chief Financial Officer
(Authorized Officer, Principal
Financial Officer and Principal
Accounting Officer)Dated: August 9, 2004


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