TABLE OF CONTENTS




|              |                                                                                                |  |  |  |  |  |  | 
|------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|INDEX        
|PART I       
|              | ITEM 1. BUSINESS                                                                              
|              | ITEM 2. PROPERTIES                                                                            
|              | ITEM 3. LEGAL PROCEEDINGS                                                                     
|              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   
|PART II      
|              | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 
|              | ITEM 6. SELECTED FINANCIAL DATA                                                               
|              | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|              | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|              | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                           
|              | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  
|PART III     
|              | ITEM 10. DIRECTORS AND OFFICERS                                                               
|              | ITEM 11. EXECUTIVE COMPENSATION                                                               
|              | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                       
|              | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                       
|              | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K                      
|              | INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENT SCHEDULE                                  
|SIGNATURES   
|Exhibit Index
|EXHIBIT 27   



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE       SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2000.

or

[  ]  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: 333-18019

|                                                      
|------------------------------------------------------
|WCI STEEL, INC.                                       
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                    
|-------------------------------------------------------------- |  | -----------------------------------
|Ohio                                                           |  | 34-1585405                         
|                                                               |  |                                    
|(State
or other jurisdiction of
incorporation or organization) |  | (I.R.S. EmployerIdentification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|1040 Pine Ave.,
S.E.,Warren, Ohio        |  | 44483-6528
|                                         |  |           
|(Address of principal executive offices) |  | (Zip Code)

|                                                    
|----------------------------------------------------
|(330) 841-8302                                      
|                                                    
|(Registrants telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

|                    |  |                                     
|------------------- |  | ------------------------------------
|Title of each class |  | Name of exchange on which registered
|                    |  |                                     
|None               

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None.

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 last 90 days.

[X] Yes    [  ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K.   [X]

The aggregate market value of the voting stock of the registrant held by
non-affiliates of the registrant at December 15, 2000 was $0.





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##### Table of Contents



WCI STEEL, INC. AND SUBSIDIARIES
FORM 10-K




INDEX

|         |  |          |  |                                                                                                      |  |          |    | 
|-------- |  | -------- |  | ---------------------------------------------------------------------------------------------------- |  | -------- | -- | 
|PART I   |  |          |  |                                                                                                      |  | Page No.
|         |  |          |  |                                                                                                      |  |         
|         |  | Item 1.  |  | Business                                                                                             |  |          | 3  | 
|        
|        
|        
|        
|         |  | Item 2.  |  | Properties                                                                                           |  |          | 11 | 
|        
|        
|        
|        
|         |  | Item 3.  |  | Legal Proceedings                                                                                    |  |          | 11 | 
|        
|        
|        
|        
|         |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                  |  |          | 12 | 
|        
|        
|        
|        
|PART II 
|        
|        
|        
|        
|         |  | Item 5.  |  | Market for Registrants Common Equity and Related Stockholder Matters                                |  |          | 13 | 
|        
|        
|        
|        
|         |  | Item 6.  |  | Selected Financial Data                                                                              |  |          | 14 | 
|        
|        
|        
|        
|         |  | Item 7.  |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations                |  |          | 15 | 
|        
|        
|        
|        
|         |  | Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                           |  |          | 20 | 
|        
|        
|        
|        
|         |  | Item 8.  |  | Financial Statements and Supplementary Data                                                          |  |          | 21 | 
|        
|        
|        
|        
|         |  | Item 9.  |  | Changes in and disagreements with Accountants on Accounting and
Financial Disclosure                 |  |          | 38 | 
|        
|        
|        
|        
|PART III
|        
|        
|        
|        
|         |  | Item 10. |  | Directors and Executive Officers of the Registrant                                                   |  |          | 39 | 
|        
|        
|        
|        
|         |  | Item 11. |  | Executive Compensation                                                                               |  |          | 41 | 
|        
|        
|        
|        
|         |  | Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                                       |  |          | 43 | 
|        
|        
|        
|        
|         |  | Item 13. |  | Certain Relationships and Related Transactions                                                       |  |          | 44 | 
|        
|        
|        
|        
|PART IV 
|        
|        
|        
|        
|         |  | Item 14. |  | Exhibits, Financial Statement Schedule, and Reports on Form 8-K                                      |  |          | 46 | 
|        
|        
|        
|        
|         |  |          |  | Financial Statement Schedule (including Independent Auditors Report
on Financial Statement Schedule) |  |          | 47 | 
|        
|        
|        
|        
|         |  |          |  | Signatures                                                                                           |  |          | 49 | 
|        
|        
|        
|        
|         |  |          |  | Exhibit Index                                                                                        |  |          | 50 | 

2



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##### Table of Contents






PART I




ITEM 1. BUSINESS

General

WCI Steel, Inc. (WCI or Company), a niche oriented integrated producer of
value-added, custom steel products, was incorporated in Ohio in 1988 and
commenced operations on September 1, 1988. WCIs primary facility covers
approximately 1,100 acres in Warren, Ohio, with additional facilities owned by
subsidiaries located in Niles and Youngstown, Ohio, all of which are situated
between Cleveland and Pittsburgh. WCI currently produces approximately 185
grades of flat rolled custom and commodity steel products. Total shipments
were 1,265,895 tons in fiscal 2000 and 1,212,259 tons in fiscal 1999. Custom
flat rolled products, which include high carbon, alloy, ultra high strength,
silicon electrical and heavy gauge galvanize steel, constituted approximately
52.1% of net tons shipped during fiscal 2000 and 56.6% during fiscal 1999 (see
Overview below for a discussion of custom products). Major users of WCI
products are steel converters, steel service centers, construction product
companies, electrical equipment manufacturers and, to a lesser extent,
automobile and automotive parts manufacturers. See discussion of possible
transaction involving certain assets of Acme Steel Company in Note 12 to
Consolidated Financial Statements, Item 8.

Products

Overview

WCI produces a wide range of custom flat rolled steel products, including
high carbon, alloy, ultra high strength, silicon electrical and heavy gauge
galvanize steel. WCIs custom products are characterized by small order
quantities, specialized chemistries, narrow widths and value added processing,
with an emphasis on customer specific quality requirements and delivery
performance and generally have less competition due to these characteristics.

WCIs commodity steel product sales consist principally of hot and cold
rolled low carbon sheet steel, other high strength applications and light gauge
galvanize products. Due to significant increases in capacity for the
production of light gauge galvanize steel and increased competition in other
high strength steels, WCI no longer considers these products to be custom
products. Export sales were approximately 2% of net sales during the last
three fiscal years.

The table below shows the impact of the change in classification in both
the total tons and the associated reduction in the Custom Product percentage
for the previous three fiscal years.

|                                              |  |                                |         |  |  |  |      |      |  |  |         |  |  |      |      |   |  |  |         |  |  |  |      |  
|--------------------------------------------- |  | ------------------------------ | ------- |  |  |  | ---- | ---- |  |  | ------- |  |  | ---- | ---- | - |  |  | ------- |  |  |  | ---- | -
|                                              |  | Net Tons Shipped              
|                                              |  |                               
|                                              |  | Fiscal years ended October 31,
|                                              |  |                               
|                                              |  | 1999                           |         |  |  |  |      | 1998 |  |  |         |  |  | 1997
|                                              |  |                                |         |  |  |  |      |      |  |  |         |  |  |     
|High strength                                 |  |                                | 48,639  |  |  |  |      |      |  |  | 56,604  |  |  |      |      |   |  |  | 64,404  | 
|                                             
|                                             
|                                             
|                                             
|Light gauge galvanize                         |  |                                | 59,135  |  |  |  |      |      |  |  | 80,577  |  |  |      |      |   |  |  | 96,344  | 
|                                              |  |                                |         |  |  |  |      |      |  |  |         |  |  |      |      |   |  |  |         | 
|Total tons reclassified to Commodity Products |  |                                | 107,774 |  |  |  | 8.9  | %    |  |  | 137,181 |  |  |      | 9.7  | % |  |  | 160,748 |  |  |  | 12.1 | %
|                                             
|                                             
|                                             
|                                             
|Previously reported Custom Product tons and % |  |                                | 794,205 |  |  |  | 65.5 | %    |  |  | 881,194 |  |  |      | 62.4 | % |  |  | 898,594 |  |  |  | 67.6 | %
|                                              |  |                                |         |  |  |  |      |      |  |  |         |  |  |      |      |   |  |  |         |  |  |  |      |  
|Revised Custom Product tons and %             |  |                                | 686,431 |  |  |  | 56.6 | %    |  |  | 744,013 |  |  |      | 52.7 | % |  |  | 737,846 |  |  |  | 55.5 | %
|                                              |  |                                |         |  |  |  |      |      |  |  |         |  |  |      |      |   |  |  |         |  |  |  |      |  

3



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The table below shows the Companys product mix for the last three years
and has been restated to reflect the change in custom product classification.

|                         |                 |  |                   |         |                   |  |           |         |      |  |           |         |      |  |       |      |   |  |       |      |   |  |       |      |  
|------------------------ | --------------- |  | ----------------- | ------- | ----------------- |  | --------- | ------- | ---- |  | --------- | ------- | ---- |  | ----- | ---- | - |  | ----- | ---- | - |  | ----- | ---- | -
|                         |                 |  | Net Tons Shipped  |         | Percent of Total 
|                         |                 |  |                   |         |                  
|                         |                 |  | Fiscal Year Ended |         | Fiscal Year Ended
|                         |                 |  | October 31,       |         | October 31,      
|                         |                 |  | 2000              |         | 1999              |  | 1998      |         | 2000 |  | 1999      |         | 1998
|                         |                 |  |                   |         |                   |  |           |         |      |  |           |         |     
|CUSTOM PRODUCTS:        
|                        
|                        
|                        
|                        
|                         | Hot Rolled      |  |                   | 394,213 |                   |  |           | 403,535 |      |  |           | 427,568 |      |  |       | 31.1 | % |  |       | 33.3 | % |  |       | 30.3 | %
|                        
|                        
|                        
|                        
|                         | Cold Rolled     |  |                   | 19,929  |                   |  |           | 13,902  |      |  |           | 17,977  |      |  |       | 1.6  | % |  |       | 1.1  | % |  |       | 1.3  | %
|                        
|                        
|                        
|                        
|                         | Coated products |  |                   | 245,969 |                   |  |           | 268,994 |      |  |           | 298,468 |      |  |       | 19.4 | % |  |       | 22.2 | % |  |       | 21.1 | %
|                         |                 |  |                   |         |                   |  |           |         |      |  |           |         |      |  |       |      |   |  |       |      |   |  |       |      |  
|Total Custom Products    |                 |  | 660,111           |         |                   |  | 686,431   |         |      |  | 744,013   |         |      |  | 52.1  | %    |   |  | 56.6  | %    |   |  | 52.7  | %   
|                        
|                        
|                        
|                        
|Total Commodity Products |                 |  | 605,784           |         |                   |  | 525,828   |         |      |  | 668,477   |         |      |  | 47.9  | %    |   |  | 43.4  | %    |   |  | 47.3  | %   
|                         |                 |  |                   |         |                   |  |           |         |      |  |           |         |      |  |       |      |   |  |       |      |   |  |       |      |  
|Total Steel Products     |                 |  | 1,265,895         |         |                   |  | 1,212,259 |         |      |  | 1,412,490 |         |      |  | 100.0 | %    |   |  | 100.0 | %    |   |  | 100.0 | %   
|                         |                 |  |                   |         |                   |  |           |         |      |  |           |         |      |  |       |      |   |  |       |      |   |  |       |      |  

Custom Products

High Carbon, Alloy, Ultra High Strength WCI has developed markets for
high carbon, alloy and ultra high strength steel products that are sold to
strip converters, steel service centers, and automobile and automotive parts
manufacturers. Products required by the strip converter customers are
characterized by small order quantities, relatively narrow widths and specific
metallurgical properties. WCI presently produces over 100 specialized
chemistries for these markets.

WCIs customers in this sector, in turn, supply end-users which have
highly specific product needs requiring the strip converter to order steel with
close gauge tolerances, minimal crown profiles, critical surface qualities and,
in certain cases, in narrow widths.

In the high carbon and alloy market, WCI competes with several other
domestic integrated and minimill producers, as well as, various steel producers
in Canada, Europe and Japan. In the ultra high strength market, WCI competes
with several integrated mills.

SiliconSilicon electrical steel is sheet steel that exhibits certain
electrical or magnetic properties. The magnetic properties of this product
permit electric motors to run at high speeds for extended periods of time with
greater efficiency while minimizing heat loss.

The market for electrical sheet steel can be divided into two main
segments: grain oriented silicon sheet and non-grain oriented silicon sheet.
The distinction between grain and non-grain oriented silicon sheet pertains to
the electrical properties of the steel. WCIs silicon annealing line is
designed for production of non-grain oriented silicon sheet and all of WCIs
silicon shipments are in this segment. Presently, there is one domestic
competitor in this segment and several foreign competitors. In addition, the
Companys product also competes with cold rolled motor laminations produced by
several other integrated steelmakers, which have been developed as a substitute
product for silicon steel in certain applications.

Heavy gauge galvanizeGalvanize steel is zinc-coated sheet steel
produced on WCIs hot dipped galvanizing line. The market for galvanize sheet
steel is divided into two broad categories: heavy and light gauge steel. Heavy
gauge galvanize steel, which is generally hot rolled based, is used in the

4



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manufacture of electrical boxes, culvert coil, construction hardware, HVAC
components and automotive stampings, as well as many other end uses.

WCIs galvanize finishing line is well suited to produce heavy gauge hot
rolled steel. WCI competes with several other integrated producers and
minimills, as well as independent producers in the heavy gauge galvanize steel
market.

Commodity Products

In fiscal 2000, WCI shipped 605,784 tons in the aggregate of sheet and
strip products consisting of hot and cold rolled low carbon, other high
strength and light gauge galvanize steel, which represented approximately 48%
of the Companys net tons shipped. Hot rolled low carbon and high strength
sheet is sold to steel service centers or manufacturers producing a broad array
of products, including tubing, stampings and roll formed parts. Cold rolled
low carbon and light gauge galvanize sheet and strip is purchased by service
centers, container manufacturers, and the automotive and appliance industries.
In these commodity steel markets, WCI competes with all major integrated
producers, minimills, and independent producers.

Marketing

WCIs marketing, sales and customer service functions are coordinated
through three wholly-owned subsidiaries, WCI Steel Sales LP (WCI Sales), WCI
Steel Metallurgical Services Inc. (WCI Metallurgical Services) and WCI Steel
Production Control Services Inc. (WCI Production Services).

WCI Sales is responsible for developing and implementing a sales and
marketing strategy aimed at increasing the sales of custom steel products and
building the strategic customer base. WCI Sales employs a direct sales force
covering approximately 250 active accounts and other potential steel accounts
within WCIs geographic market. Over 50% of WCI Sales shipments are to
customers within 200 miles of the Warren facility, and as a result of this
concentration of active and potential customers in its service area, WCI Sales
believes that it has a competitive advantage over competitors located farther
away.

Sales outside WCIs geographic market are made through independent sales
representatives on a commission basis. Although transportation costs can be
prohibitive at extreme distances from the Warren facility, select custom
products are competitively priced outside WCI Sales normal target markets. WCI
Sales believes that independent sales representatives provide the most
cost-effective method to access these customers. Approximately 3.7% of WCI
Sales volume in fiscal 2000 was sold through the independent sales
representatives.

Marketing and pricing are centralized at the Warren facility, where the
marketing strategy and pricing levels are established for all WCI products.
WCI Sales has a marketing staff that works closely with the sales and technical
service representatives to coordinate the implementation of the sales and
marketing strategy.

WCI Metallurgical Services is responsible for developing the specialized
chemistries that support WCIs custom product mix. In addition, WCI
Metallurgical has a staff of technical service representatives with strong
metallurgical and technical backgrounds who assist the sales force in the
field. Together, WCI believes the sales force and the technical staff comprise
a knowledgeable team qualified to identify and meet customer needs.

WCI Production Services provides order entry and order status services to
assist WCI Sales in meeting customer needs. WCI Production Services provides
customer service and utilizes a fully

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automated computerized sales network that provides the sales force and
customers with product specifications and timely order status information.

Customers

WCIs customer base is dominated by steel converters and steel service
centers, which in fiscal 2000 represented 74.0% of shipments. The remaining
shipments were directly to end-users.

The following table sets forth the percentage of WCIs net tons shipped to
various markets for the past three fiscal years.

|                  |                                 |      |                   |      |   |      |       |      |   |  |       |      |  
|----------------- | ------------------------------- | ---- | ----------------- | ---- | - | ---- | ----- | ---- | - |  | ----- | ---- | -
|                  |                                 |      | Fiscal Year Ended
|                  |                                 |      | October 31,      
|                  |                                 |      |                  
|Customer Category |                                 | 2000 |                   | 1999 |   | 1998
|                  |                                 |      |                   |      |   |     
|                  | Conversion / further processing |      |                   | 49.2 | % |      |       | 47.4 | % |  |       | 47.6 | %
|                 
|                 
|                 
|                 
|                  | Steel service centers           |      |                   | 24.8 | % |      |       | 23.0 | % |  |       | 24.4 | %
|                 
|                 
|                 
|                 
|                  | Construction                    |      |                   | 12.0 | % |      |       | 13.3 | % |  |       | 12.1 | %
|                 
|                 
|                 
|                 
|                  | Electrical equipment            |      |                   | 5.0  | % |      |       | 6.1  | % |  |       | 6.2  | %
|                 
|                 
|                 
|                 
|                  | Direct automotive               |      |                   | 4.9  | % |      |       | 5.7  | % |  |       | 4.7  | %
|                 
|                 
|                 
|                 
|                  | Other                           |      |                   | 4.1  | % |      |       | 4.5  | % |  |       | 5.0  | %
|                  |                                 |      |                   |      |   |      |       |      |   |  |       |      |  
|Total             |                                 |      | 100.0             | %    |   |      | 100.0 | %    |   |  | 100.0 | %   
|                  |                                 |      |                   |      |   |      |       |      |   |  |       |      |  

In fiscal years 2000, 1999 and 1998, WCIs twenty largest customers
represented approximately 62%, 59% and 57%, respectively, of net sales. The
Companys largest customer, Worthington Industries, represented approximately
10.1% and 11.3% of net sales in fiscal 2000 and 1999, respectively.

Backlog

On October 31, 2000, WCIs order backlog was approximately 144,000 net
tons with an approximate value of $64 million compared to approximately
283,000 net tons with an approximate value of $121 million at October 31, 1999,
based in each case on the then current prices. Under the applicable orders,
WCI is scheduled to ship substantially all of the orders in the October 31,
2000 backlog by December 31, 2000. Although customers may cancel orders
included in the backlog, such cancellations have been negligible in the past.

Competition

The domestic steel industry is highly competitive. Despite significant
reductions in raw steel production capacity by major domestic producers in the
1980s and increasing domestic demand in the 1990s, the domestic industry
continues to be adversely affected by excess world capacity.

In the United States, WCI competes with many other domestic steel
companies. WCI also faces increasing competitive pressures from minimills in a
portion of its custom products. Minimills are generally smaller volume steel
producers that use ferrous scrap metals as their basic raw material. Compared
to integrated producers, minimills, which rely on less capital-intensive hot
metal sources, have certain advantages. Because minimills typically are not
unionized, they have more flexible work rules, which have resulted in lower
employment costs per net ton shipped.

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Since 1989, significant flat rolled minimill capacity has been constructed
and these minimills now compete with integrated producers in product areas that
traditionally had not faced significant competition from minimills. These
minimills compete with the Company in the commodity flat rolled steel market
and, increasingly, in certain custom flat rolled steel markets. In addition,
the increased competition in commodity product markets has resulted in certain
integrated producers increasing product offerings to compete with the Companys
custom products. In view of this increased competition in the high strength
and light gauge galvanize products, WCI no longer considers these products to
be Custom Products. This increased competition has also increased the price
volatility of certain of the Companys custom products.

During 2000, the domestic steel market continued to compete with a high
level of imports of foreign produced flat rolled steel that saw significant
increases beginning in 1998. From 1993 to 1997 imported steel supplied between
18.7% and 24.8% of domestic steel demand. However, the domestic market share
of imported steel increased in 1998 and 1999 to 30.0% and 26.2%, respectively,
and is expected to be approximately 28.3% in 2000. This significant increase
in imported steel during the last three years has adversely affected shipping
volume and has resulted in significant price volatility. The high level of
imports is expected to continue to affect shipping volume in early 2001 and, in
addition to other factors, is expected to result in depressed product pricing
for most of 2001. On November 13, 2000, the domestic steel industry filed
trade cases against dumped and subsidized imports of hot rolled carbon steel
from 11 countries. From January through August 2000, unfairly traded imports
of hot rolled steel from these countries increased more than 111 percent over
the same period in 1999 and more than 400 percent compared with that period in
1998. In July 2000, the U.S. Department of Commerce released a study that
found illegal subsidies, dumping and discriminatory practices by foreign
governments have distorted steel trade worldwide and harmed U.S. steelworkers
and companies. In November 2000, the International Trade Commission concluded
that a continuation of existing antidumping and countervailing duty orders on
certain steel products from 16 countries was necessary to prevent further
injury to the U.S. industry. The U.S. International Trade Commission will
present a preliminary determination of injury by December 28, 2000.

The relative strength of the U.S. dollar and economy versus the strength
of foreign currencies and economies can significantly affect the import/export
trade balance for flat rolled steel. In addition to competition from domestic
and foreign steel producers, materials such as aluminum, cement, composites,
glass and plastics compete as substitutes for steel in many markets.

Manufacturing Process

In WCIs primary steelmaking process, iron ore pellets, coke, limestone,
sinter and other raw materials are consumed in the blast furnace to produce
hot metal. Hot metal is further converted into liquid steel through the Basic
Oxygen Furnace (BOF) process where impurities are removed, recycled scrap is
added and metallurgical properties for end use are determined on a
batch-by-batch basis. WCIs BOF has two vessels, each with a steelmaking
capacity of 182 tons per heat. From the BOF, the heats of steel are sent to
the Ladle Metallurgy Facility (LMF), where the temperature and chemistry of the
steel are adjusted to precise tolerances. In addition, the steel may be vacuum
degassed to further improve its cleanliness. Liquid steel from the LMF then is
formed into slabs through the process of continuous casting. The twin-strand
continuous slab caster (Continuous Caster) allows WCI to cast all of its steel
products. After continuous casting, slabs then are reheated, reduced and
finished by extensive rolling, shaping, tempering and, in certain cases, by the
application of coatings at WCIs downstream operations. Finished products are
usually shipped to customers in the form of coils. WCI has linked its
steelmaking and rolling equipment with a computer based integrated
manufacturing control system to coordinate production and sales activities.

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Raw Materials

WCIs steelmaking operations are dependent on reliable supplies of various
raw materials, principally iron ore pellets, coke, scrap and energy. WCI
believes that it has adequate sources of its principal raw materials to meet
its present needs.

Iron Ore Pellets

WCI has a contract with a major supplier of iron ore pellets for its
requirements through fiscal 2004. Iron ore pellets satisfied approximately
72.4% of WCIs iron requirements for the blast furnace in fiscal 2000, while
WCIs sinter plant provided the balance. The iron ore pellet contract requires
WCI to purchase all of its iron ore pellet requirements through 2004 from the
contracting vendor. WCI carries an increased level of iron ore pellet
inventory immediately preceding the winter months, due to the curtailment of
vendor shipments during the winter as a result of the freezing of the Great
Lakes.

Coke

Coke is the principal fuel used to produce liquid iron and is an essential
ingredient in steelmaking. WCI has contracts with two integrated steel
producers for its estimated coke requirements through fiscal 2003. WCIs coke
requirements are approximately 600,000 tons per year. The domestic supply of
coke has decreased significantly over the last decade and may decrease further
in the future due to the requirements of the Clean Air Act. As the Company
does not own a coke battery, it is dependent upon commercially available
domestic or imported coke to sustain its operations. Although the Company
believes that there will be adequate supplies of domestic or imported coke
available for its purposes after the expiration of its contracts in 2003, there
can be no assurance to such effect.

Scrap

WCI uses scrap steel to supplement the liquid iron produced at the blast
furnace for the steel making process. Scrap steel accounted for approximately
25.4% of the Companys liquid steel production in fiscal 2000. Scrap steel is
readily available and is purchased on an as-needed basis.

Energy and Gases

WCIs steel operation consumes large amounts of electricity, natural gas,
oxygen and other industrial gases. WCI purchases its electrical power
requirements under a contract that extends to 2002 from a local utility. WCI
can generate approximately 20% of its own electrical needs. Natural gas is
also purchased pursuant to a supply contract that extends through March 2001.
Oxygen is delivered, under a contract that extends through March 2002, from
supplier-owned plants located at the Warren facility. A new oxygen supply
agreement was entered into with the same supplier for a fifteen (15) year
period commencing upon the completion of a new supplier-owned facility also to
be located at the Warren facility. Pursuant to a contract entered into in 1988,
WCI is required to purchase all coke oven gas produced at an adjoining coke
plant, which is usable by WCI, at a price based upon, but at a discount to,
natural gas prices.

Environmental Matters

In common with much of the steel industry, the Companys facilities are
located on sites that have been used for heavy industrial purposes for decades.
The Company is and will continue to be subject to numerous federal, state and
local environmental laws and regulations governing, among other things, air
emissions, waste water discharge and solid and hazardous waste management. The
Company has made

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and intends to continue to make the necessary expenditures for
environmental remediation and compliance with environmental laws and
regulations. Environmental laws and regulations continue to change and have
generally become more stringent, and the Company may be subject to more
stringent environmental laws and regulations in the future. Compliance with
more stringent environmental laws and regulations could have a material adverse
effect on the Companys financial condition and results of operations.

The Company is subject to consent decrees as a result of two civil actions
instituted by the Department of Justice (DOJ), on behalf of the Environmental
Protection Agency (EPA). These consent decrees require the Company to complete
certain supplemental environmental projects estimated to cost between $2.1
million and $2.5 million that will be expended by late 2002. These projects
include sediment removal from the Mahoning River at an estimated remaining cost
of $0.9 million and the installation of a liner for a surface impoundment
estimated to cost $1.5 million. The consent decrees also provide for
stipulated penalties in the event of noncompliance which the Company does not
believe will be material.

As a condition of a previous Resource Conservation and Recovery Act (RCRA)
operating permit, the Company is required to undertake a corrective action
program with respect to historical material handling practices at the Warren
facility. The Company has completed the initial phase of the first
investigation step of the corrective action program, the RCRA Facility
Investigation (RFI), and has submitted its report to the EPA. The Company
believes that additional sampling will be required to complete a full RFI and
the Company will negotiate the extent of the second phase with the EPA. The
RFI workplan identifies thirteen historical solid waste management units to be
investigated. The final scope of corrective action required to remediate any
contamination that may be present at or emanating from the Warren facility is
dependent upon the completion and findings of the RFI and the development and
approval of a corrective action program. Accordingly, the Company is unable at
this time to estimate the final cost of the corrective action program or the
period over which such costs may be incurred and there can be no assurance that
any such corrective action program would not have a material adverse effect on
the operating results or financial condition of the Company.

The Company operates a landfill at its Warren facility, which receives waste
materials from the iron and steel-making operations. The Ohio EPA has issued a
permit to install a new lined landfill to replace this landfill. The plan
involves closure by removal of the present landfill by providing approximately
one-third of its contents to established markets for construction materials and
recycling most of the remaining contents over an extended period at the sinter
plant in Youngstown, Ohio operated by the Companys subsidiary, Youngstown
Sinter Company, and disposing of any non-salable or non-recyclable material in
the new lined landfill. Youngstown Sinter Company is presently exploring
modifications to sulfur dioxide emission regulations applicable to the sinter
plant to facilitate compliance with sulfur dioxide emission limits, and to
allow faster recycling of the present landfill contents. The Company does not
believe that this matter will require the Company to make any material
expenditures. The new lined landfill construction and existing landfill
closure, if pursued, is expected to be completed in seven consecutive phases.
The estimated cost through Phase I is approximately $2.7 million to $3.7
million expended over three years and the estimated cost for Phase II is
approximately $2.0 million expended over two years. Construction of the new
landfill is expected to begin during fiscal 2001. On October 27, 2000, the
Company received notice that the Ohio EPA was seeking an administrative
settlement of certain alleged violations relating to the operation of the
existing landfill. The Ohio EPA seeks to require the Company to make changes
in the lateral and/or vertical limits of the waste in the landfill, or obtain
approved modifications to allow the existing lateral and vertical limits of
waste. In addition, Ohio EPA is seeking an administrative penalty in the
amount of $109,500. The Company believes that it has significant defenses to
the alleged violations, and is attempting to negotiate a settlement of the
matter with Ohio EPA.

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A liability has been established for an amount, which the Company believes
is adequate, based on information currently available, to cover the costs to
resolve the above described matters, including remediation, if any, except for
any costs of corrective action that may result from the RFI for which no
estimate can currently be made. The outcome of the above described matters
could have a material adverse effect on the future operating results of the
Company in a particular quarter or annual period; however, the Company
believes that the effect of such matters will not have a material adverse
effect on the Companys consolidated financial position.

Employees

As of October 31, 2000, WCI had 484 salaried employees and 1,504 hourly
employees. Most of the employees are located at the Warren facility with most
of the hourly employees being represented by the United Steelworkers of America
(USWA) with which WCI has a five-year collective bargaining agreement that
expires October 31, 2004.

Benefit Plans

Hourly Profit Sharing
Plan

Certain hourly employees represented by the USWA participate in a profit
sharing plan under which the Company pays 12% of pretax income as defined in
the profit sharing agreement. The Company advances one-half of the amounts due
under this plan on a quarterly basis, within 45 days following the end of each
fiscal quarter, and pays the remaining amounts by February 15 of the subsequent
year.

Salaried Variable Compensation Plan

WCI has a variable compensation plan for salaried employees known as the
Company Performance Compensation Program (CPC). Under the CPC, salaried
employees receive variable compensation based on WCIs pretax income as defined
in the plan. CPC payments are measured as a percentage of the employees base
salary and paid quarterly.

Pension Plans

WCI has a defined contribution retirement plan that covers substantially
all salaried employees. WCI funds contributions to this plan as earned on a
monthly basis. Company contributions to the plan are based on employee age and
compensation.

The Company has a defined benefit floor offset pension plan, which covers
substantially all hourly employees at the Warren facility. The plan, when
combined with benefits from the Companys defined contribution plan which was
frozen effective September 1, 1999 and benefits from a predecessor companys
defined benefit pension plan, will provide a minimum level of pension benefits
for eligible employees. Benefits are based on age and years of service, but
not compensation. Under this plan, employees who retire on or before August
31, 1999 receive a monthly benefit equal to $35 (Benefit Multiplier) times the
number of years of service with WCI or its predecessors. Effective September
1, 2000 for retirements on or after September 1, 1999, the Benefit Multiplier
increased from $35 to $52.50 for years of service up to 30 and $70 for years of
service in excess of 30. On September 1, 2002 for retirements on or after
September 1, 1999, the Benefit Multiplier will further increase to $56.25 for
years of service up to 30 and $75 for years of service in excess of 30. If the
employee has at least 30 years of service at retirement, the monthly benefit is
subject to certain minimums based on age at retirement. No named executive
officer is eligible to participate in this plan.

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Postretirement Health Care
Plans

WCI provides postretirement health care benefits to employees who retire
while meeting certain age and service eligibility requirements. The Company
has established a trust to hold contributions to fund future postretirement
health care and life insurance obligations related to the hourly workforce.
This trust holds liens on certain assets of the Company and one of its
subsidiaries to secure the Companys obligation for postretirement health care
benefits. As a result of the collective bargaining agreement effective
September 1, 1999, the Company is permitted to pay current claims up to $8.8
million from the trust, after which time the Company will be required to pay
claims from corporate assets. All claims were paid from the trust during 2000.




ITEM 2. PROPERTIES

WCIs Warren, Ohio facility, situated on approximately 1,100 acres,
includes a blast furnace, a two vessel BOF shop, an LMF and a vacuum degasser,
a twin-strand Continuous Caster, a 56-inch hot strip mill, 54-inch tandem and
temper mills, annealing facilities, a silicon continuous annealing line,
hot-dip galvanizing line and other finishing facilities. The blast furnace was
relined during 1995 as part of its planned maintenance, a procedure which is
performed on a routine basis every six to eight years.

Youngstown Sinter Company, a subsidiary of the Company, owns and operates
a sinter plant located in Youngstown, Ohio on 51 acres. The sinter plant
converts plant waste dusts and iron ore into resources useable in the blast
furnace, reducing WCIs iron ore pellet feed requirements by approximately
27.6% in fiscal 2000.

Niles Properties, Inc., a subsidiary of the Company, is located
approximately five miles from the Warren facility, and has approximately
525,000 square feet of building space with two long-term tenants occupying 20%
of the facility. WCI is continuing to seek other appropriate tenants.

WCI believes that its facilities are well maintained and they are
considered satisfactory for their purposes.

See Note 4 to the Consolidated Financial Statements, Part II, Item 8, for
a description of liens related to the Companys property, plant and equipment.




ITEM 3. LEGAL PROCEEDINGS

On January 23, 1996, two retired employees instituted an action against
the Company and the United Steelworkers of America (USWA) in the United States
District Court for the Northern District of Ohio alleging in substance that
certain distributions made by the Company to employees and benefit plans
violated certain agreements, the Employee Retirement Income Security Act
(ERISA), the National Labor Relations Act (NLRA) and common law. On July 31,
1997, the court granted the Companys motion to dismiss this action and entered
judgement in favor of the Company and the USWA. The Plaintiffs filed an appeal
regarding the courts decision to dismiss, which was heard in June 1998. In
March 1999, the appellate court upheld the dismissal of the claims under ERISA
and common law, but reversed the dismissal of the NLRA claim and remanded to
the district court for further proceedings. On October 9, 2000 the court
granted the Companys motion to dismiss this action and entered judgement in
favor of the Company and the USWA. The plaintiffs filed an appeal regarding
the courts decision to dismiss.

In addition to the above matters, the Company is contingently liable with
respect to lawsuits and other claims incidental to the ordinary course of its
business.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a
vote of security holders during the quarter ended October 31, 2000.

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PART II




ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY
AND RELATED                STOCKHOLDER MATTERS

The Company is a direct wholly-owned subsidiary of Renco Steel Holdings,
Inc. (Renco Steel) and an indirect wholly-owned subsidiary of The Renco Group,
Inc. (Renco). There is no established public trading market for the Companys
common stock. Since December 1996, the Company has had one shareholder. The
Company paid cash dividends once during fiscal 1999 of $3,000,000 and twice
during fiscal year 2000 totaling $9,200,000. See Note 4 to the Consolidated
Financial Statements, Part II, Item 8 for limitations on dividends.

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ITEM 6. SELECTED FINANCIAL DATA

|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|------------------------- | ----------------------------------------------------------------------------- |  | ------------------------------------------------------- | ------- | -------- |  | ---- | ------- | -------- |  | -------- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                          |                                                                               |  | Fiscal Year Ended October 31                           
|                          |                                                                               |  |                                                        
|                          |                                                                               |  | 2000                                                    |         | 1999 (1) |  | 1998 |         | 1997 (2) |  | 1996 (3)
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |         
|                          |                                                                               |  | (Dollars and tons in thousands, except per ton amounts)
|Statement of Income
Data:
|                         
|                         
|                         
|                         
|                          | Net sales                                                                     |  | $                                                       | 560,689 |          |  | $    | 531,669 |          |  | $        | 665,741 |   |  | $ | 668,470 |   |  | $ | 660,801 |  
|                         
|                         
|                         
|                         
|                          | Cost of products sold                                                         |  |                                                         | 487,477 |          |  |      | 468,170 |          |  |          | 560,951 |   |  |   | 547,545 |   |  |   | 550,609 |  
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|                          | Gross margin                                                                  |  |                                                         | 73,212  |          |  |      | 63,499  |          |  |          | 104,790 |   |  |   | 120,925 |   |  |   | 110,192 |  
|                         
|                         
|                         
|                         
|                          | Depreciation and amortization                                                 |  |                                                         | 23,254  |          |  |      | 23,334  |          |  |          | 25,240  |   |  |   | 23,174  |   |  |   | 22,547  |  
|                         
|                         
|                         
|                         
|                          | Selling, general and administrative
expenses                                  |  |                                                         | 15,770  |          |  |      | 14,613  |          |  |          | 17,343  |   |  |   | 29,355  |   |  |   | 22,074  |  
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|                          | Operating income                                                              |  |                                                         | 34,188  |          |  |      | 25,552  |          |  |          | 62,207  |   |  |   | 68,396  |   |  |   | 65,571  |  
|                         
|                         
|                         
|                         
|                          | Interest expense                                                              |  |                                                         | 31,940  |          |  |      | 32,030  |          |  |          | 32,057  |   |  |   | 31,690  |   |  |   | 24,968  |  
|                         
|                         
|                         
|                         
|                          | Interest and other income                                                     |  |                                                         | 8,054   |          |  |      | 8,062   |          |  |          | 2,308   |   |  |   | 1,239   |   |  |   | 6,545   |  
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|                          | Income before income taxes
and extraordinary loss on early
retirement of debt |  |                                                         | 10,302  |          |  |      | 1,584   |          |  |          | 32,458  |   |  |   | 37,945  |   |  |   | 47,148  |  
|                         
|                         
|                         
|                         
|                          | Income taxes                                                                  |  |                                                         |        |          |  |      | (4,279  | )        |  |          | 12,365  |   |  |   | 14,482  |   |  |   | 19,108  |  
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|                          | Income before extraordinary
loss on early retirement of debt                  |  | $                                                       | 10,302  |          |  | $    | 5,863   |          |  | $        | 20,093  |   |  | $ | 23,463  |   |  | $ | 28,040  |  
|                          |                                                                               |  |                                                         |         |          |  |      |         |          |  |          |         |   |  |   |         |   |  |   |         |  
|Other Operating Data:    
|                         
|                         
|                         
|                         
|                          | Net tons shipped                                                              |  |                                                         | 1,266   |          |  |      | 1,212   |          |  |          | 1,412   |   |  |   | 1,329   |   |  |   | 1,397   |  
|                         
|                         
|                         
|                         
|                          | Percent custom products (4)                                                   |  |                                                         | 52.1    | %        |  |      | 56.6    | %        |  |          | 52.7    | % |  |   | 55.5    | % |  |   | 46.1    | %
|                         
|                         
|                         
|                         
|                          | Average selling price per net ton
shipped                                     |  | $                                                       | 443     |          |  | $    | 439     |          |  | $        | 471     |   |  | $ | 503     |   |  | $ | 473     |  
|                         
|                         
|                         
|                         
|                          | Average cost per net ton shipped                                              |  |                                                         | 385     |          |  |      | 386     |          |  |          | 397     |   |  |   | 412     |   |  |   | 394     |  
|                         
|                         
|                         
|                         
|                          | Average gross margin per net ton
shipped                                      |  |                                                         | 58      |          |  |      | 52      |          |  |          | 74      |   |  |   | 91      |   |  |   | 79      |  
|                         
|                         
|                         
|                         
|                          | Average operating income per net ton
shipped                                  |  |                                                         | 27      |          |  |      | 21      |          |  |          | 44      |   |  |   | 51      |   |  |   | 47      |  
|                         
|                         
|                         
|                         
|Balance Sheet Data:      
|                         
|                         
|                         
|                         
|                          | Cash, cash equivalents and
short-term investments                             |  | $                                                       | 89,478  |          |  | $    | 76,349  |          |  | $        | 62,195  |   |  | $ | 18,989  |   |  | $ | 139,541 |  
|                         
|                         
|                         
|                         
|                          | Working capital (excluding cash,
cash equivalents and short-term
investments) |  |                                                         | 46,946  |          |  |      | 39,113  |          |  |          | 45,645  |   |  |   | 66,913  |   |  |   | 42,093  |  
|                         
|                         
|                         
|                         
|                          | Property, plant and equipment, net                                            |  |                                                         | 202,578 |          |  |      | 208,477 |          |  |          | 217,624 |   |  |   | 224,620 |   |  |   | 205,121 |  
|                         
|                         
|                         
|                         
|                          | Total assets                                                                  |  |                                                         | 478,176 |          |  |      | 479,944 |          |  |          | 460,286 |   |  |   | 470,751 |   |  |   | 567,453 |  
|                         
|                         
|                         
|                         
|                          | Total debt (including current portion)                                        |  |                                                         | 301,380 |          |  |      | 301,502 |          |  |          | 301,618 |   |  |   | 302,937 |   |  |   | 211,506 |  
|                         
|                         
|                         
|                         
|                          | Shareholders equity (deficit)                                                |  |                                                         | (80,629 | )        |  |      | (81,731 | )        |  |          | (84,873 | ) |  |   | (90,866 | ) |  |   | 79,880  |  



---

|(1) |  | Fiscal 1999 statement of income reflects an income tax benefit
of $4.3 million resulting from the subchapter S election
described in Note 1(g), a gain of $5.0 million resulting from
an agreement with the USWA permitting the Company to pay
certain medical benefits from assets in a trust previously
restricted for other benefits and a benefit of $7.5 million
resulting from the LIFO inventory valuation method.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Fiscal 1997 statement of income reflects $8.6 million of
compensation expenses related to the debt refinancing and
equity redemption transactions effected in November 1997.                                                                                                                                                                                                                                             
|   
|   
|   
|   
|(3) |  | The Companys custom product mix and the results for fiscal
1996 were adversely impacted by a 54 day labor contract dispute
and resulting work stoppage which was concluded on October 24,
1995.                                                                                                                                                                                                                         
|   
|   
|   
|   
|(4) |  | Restated to reflect change in custom products. See Item 1. Business for a description of this change.                                                                                                                                                                                                                                                                                                                    

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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND                RESULTS OF OPERATIONS.

Unless otherwise indicated, references to a year are to the Companys
fiscal year ended
October 31.

During 2000, the domestic steel market
continued to compete with a high
level of imports of foreign produced flat rolled steel that saw significant
increases beginning in 1998. From 1993 to 1997 imported steel supplied between
18.7% and 24.8% of domestic steel demand. However, the domestic market share
of imported steel increased in 1998 and 1999 to 30.0% and 26.2%, respectively,
and is expected to be approximately 28.3% in 2000. This significant increase
in imported steel during the last three years has adversely affected shipping
volume and has resulted in significant price volatility. The high level of
imports is expected to continue to affect shipping volume in early 2001 and, in
addition to other factors, is expected to result in depressed product pricing
for most of 2001. These factors have contributed to a supply imbalance in the
domestic steel market that has resulted in decreases in order intake rates,
production levels and shipping volumes for domestic producers, including WCI.
Although the Company implemented price increases which became effective January
1, 2000 and April 1, 2000 during fiscal year 2000, the pricing environment has
seen deterioration as fiscal year 2000 ended. On November 13, 2000, the
domestic steel industry filed trade cases against dumped and subsidized imports
of hot rolled carbon steel from 11 countries. From January through August
2000, unfairly traded imports of hot rolled steel from these countries
increased more than 111 percent over the same period in 1999 and more than 400
percent compared with that period in 1998. In July 2000, the U.S. Department
of Commerce released a study that found illegal subsidies, dumping and
discriminatory practices by foreign governments have distorted steel trade
worldwide and harmed U.S. steelworkers and companies. In November 2000, the
International Trade Commission concluded that a continuation of existing
antidumping and countervailing duty orders on certain steel products from 16
countries was necessary to prevent further injury to the U.S. industry. The
U.S. International Trade Commission will present a preliminary determination of
injury by December 28, 2000.

Results of Operations

Fiscal 2000 Compared to
Fiscal 1999

Net sales in 2000 were $560.7 million on 1,265,895 tons shipped ($122.6
million and 281,195 tons shipped for the fourth quarter), representing a 5.5%
increase in net sales and a 4.4% increase in tons shipped compared to 1999.
Net sales per ton shipped increased 0.9% to $443 in 2000 compared to $439 in
1999. Net sales per ton shipped increased $14 as a result of price increases,
which became effective January 1, 2000 and, to a lesser extent, April 1, 2000,
offset by $10 per ton due to a lower custom product mix. Net sales per ton
shipped for the fourth quarter of 2000 were $436 compared to $456 for the third
quarter of 2000 and $431 for the fourth quarter of 1999. The decrease in net
sales per ton in the fourth quarter compared to the third quarter resulted from
lower steel prices and reflects the high level of imported steel, high
inventory levels at customers and slowing domestic economic conditions.
Shipments of custom carbon, alloy and electrical steels accounted for 52.1% of
total shipments in 2000 compared to 56.6% in 1999.

Gross margin (sales less cost of goods sold) was $73.2 million in 2000
compared to $63.5 million in 1999. The increase in gross margin reflects the
higher shipping volume and prices discussed above. While production costs
during fiscal year 2000 were flat compared to fiscal year 1999, production
costs during the fourth quarter of 2000 were significantly higher than the
fourth quarter of 1999 due to a reduction in production volume of 19% compared
to the same period in 1999 and a 16% reduction in production volume compared to
the third quarter of 2000. In addition, during the fourth quarter of 1999,

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the Company incurred $11.0 million of excess production costs as a result
of idling much of the facility due to start-up problems after completion of a
planned maintenance outage at the blast furnace. The Company also recorded a
LIFO inventory valuation charge of $2.1 million during the fourth quarter of
2000 compared to a benefit of $5.7 million during the fourth quarter of 1999.

Operating income was $34.2 million, or $27 per ton, in 2000 compared to
operating income of $25.6 million, or $21 per ton, in 1999. The increased
operating income in 2000 reflects the higher gross margin discussed above
partially offset by increased selling, general and administrative expenses
primarily due to higher variable compensation costs. Operating income (loss)
for the fourth quarter was ($1.1) million, ($4) per ton compared to $4.5
million, $14 per ton for the comparable period in 1999.

Interest and other income, net was $8.1 million in each of 2000 and 1999.
During the first quarter of 2000 and the fourth quarter of 1999 the Company
recorded a gain of $2.8 million and $5.0 million, respectively, as a result of
an agreement with the United Steelworkers of America, which permitted the
Company to pay certain medical benefits from assets in a trust previously
restricted for other benefits. In addition, interest income increased $1.8
million due primarily to higher cash balances in 2000 compared to 1999.

As a result of the items discussed above, the Company had income before
taxes of $10.3 million in 2000 compared to a $1.6 million in 1999.

Effective November 1, 1998, the Company was designated as a qualified
subchapter S subsidiary by Renco. Accordingly, the Company is generally not
subject to income taxes. For the 1999 period, the Company recognized an income
tax benefit of $4.3 million which included the elimination of net deferred tax
liabilities recorded as of October 31, 1998.

Fiscal 1999 Compared to
Fiscal 1998

Net sales in 1999 were $531.7 million on 1,212,259 tons shipped,
representing a 20.1% decrease in net sales and a 14.2% decrease in tons shipped
compared to 1998. Shipping volume decreased in 1999 due to the surge of
imports in late 1998, which adversely effected shipping volume during the first
quarter of 1999 and, to a lesser extent, the fourth quarter of 1998. In
addition, the Company shipped 77,244 tons of lower value added semi-finished
steel during 1998. Excluding semi-finished steel, net sales per ton shipped
decreased 9.1% to $439 in 1999 compared to $483 for 1998, primarily as a result
of lower selling prices and, to a lesser extent, changes in product mix.
Excluding semi-finished steel, custom carbon, alloy and electrical steel
accounted for 56.6% of shipments in 1999 compared to 52.7% in 1998.

Gross margin (sales less cost of goods sold) was $63.5 million in 1999
compared to $104.8 million in 1998. The decrease in gross margin reflects
lower shipping volume and prices discussed above offset somewhat by lower
production costs, raw material prices, and variable compensation expense. In
addition, gross margin was adversely impacted by the low level of operations
during the first quarter of 1999 as a result of the import surge in late 1998.
During the fourth quarter, the Company incurred $11.0 million of excess
production costs as a result of the idling of much of the facility due to
start-up problems after completion of planned maintenance outage at the blast
furnace. The Company also recorded a LIFO inventory valuation benefit of $7.5
million in 1999 ($5.7 during the fourth quarter) compared to $2.7 million in
1998 ($0.8 million during the fourth quarter).

Operating income was $25.6 million, $21 per ton, for 1999 compared to
$62.2 million, $44 per ton, for 1998. The decrease in operating income in 1999
reflects the lower gross margin discussed above offset by lower depreciation
expense and a decrease in selling, general and administrative expenses in 1999
primarily due to lower variable compensation expense.

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Interest and other income, net was $8.1 million in 1999 compared to $2.3
million in 1998. During the fourth quarter of 1999, the Company recorded a
gain of $5.0 million as a result of an agreement with the United Steelworkers
of America, which permitted the Company to pay certain medical benefits from
assets in a trust previously restricted for other benefits.

As a result of the items discussed above, the Company had income before
taxes of $1.6 million in 1999 compared to $32.5 million in 1998. Effective
November 1, 1998, the Company was designated as a qualified subchapter S
subsidiary by Renco. Accordingly, the Company is generally not subject to
income taxes and recognized an income tax benefit of $4.3 million during 1999
which includes the elimination of net deferred tax liabilities recorded as of
October 31, 1998.

Liquidity and Capital Resources

WCIs liquidity requirements result from capital investments, working
capital requirements, postretirement health care and pension funding, interest
expense and, to a lesser extent, principal payments on its indebtedness. WCI
has met these requirements in each fiscal year since 1992 from cash balances
and cash provided by operating activities. The Companys primary sources of
liquidity as of October 31, 2000 consisted of cash and cash equivalents of
$89.5 million and available borrowing under its $100 million revolving credit
agreement (Revolver).

The Revolver has a maximum borrowing limit of $100 million, is secured by
eligible inventories and receivables, as defined therein, and expires on
December 29, 2003. As of October 31, 2000, WCI had no borrowings outstanding
under the Revolver, with a borrowing limit of $83.5 million based on eligible
inventories and receivables, net of $14.1 million in letters of credit
outstanding or committed.

Cash from Operations

Cash provided by operating activities was $38.1 million for 2000 compared
to $28.7 million and $74.1 million for 1999 and 1998, respectively. The higher
operating cash flow in 2000 compared to 1999 resulted primarily from an
increase in income before taxes and non-cash postretirement benefits offset
somewhat by changes in working capital. The decrease in operating cash flow in
2000 and 1999 compared to 1998 resulted primarily from a decrease in income
before taxes.

As of October 31, 2000, at pricing then in effect, WCI had commitments
under raw material supply contracts of approximately $12.5 million for 2001,
$2.7 million for 2002 and $0.3 million thereafter.

Capital Expenditures

Capital expenditures were $15.6 million, $11.4 million and $15.6 million
during 2000, 1999 and 1998, respectively. Capital expenditures are expected to
be approximately $15 million for all of fiscal 2001 subject to the need to
reline the blast furnace. The Company expects to reline the blast furnace in
six to eighteen months. If a reline is required in six months it will be
limited in scope with an estimated cost of $10 million. A full reline in
eighteen months would have an estimated cost of approximately $30 million.
Management has funded the Companys capital expenditures in 2000, 1999 and 1998
through cash balances and cash provided by operating activities. At October
31, 2000, the Company had commitments for capital expenditures of approximately
$3.1 million.

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##### Table of Contents



Debt Transactions

Renco Steel is a holding company formed by Renco in January 1998, which
owns all the outstanding shares of capital stock of the Company. In February
1998, Renco Steel issued $120 million principal amount 10.875% Senior Secured
Notes due 2005. These notes are secured by a pledge of all the outstanding
capital stock of the Company. Historically, Renco Steel has met its debt service obligations from its cash balances and earnings thereon and through distributions from the Company as permitted under the Companys outstanding indebtedness as described
in Note 4. However, the Company does not expect to be permitted to pay dividends for the foreseeable future.

The Revolver and the indenture governing WCIs 10% Senior Secured Notes
due 2004 contain numerous covenants and prohibitions that limit the financial
activities of the Company, including requirements that the Company satisfy
certain financial ratios and limitations on the incurrence of additional
indebtedness. The ability of the Company to meet its debt service requirements
and to comply with such covenants will be dependent upon future operating
performance and financial results of the Company, which will be subject to
financial, economic, political, competitive and other factors affecting the
Company, many of which are beyond its control.

Dividends

During 2000, the Company paid dividends totaling $9.2 million as permitted
under the Senior Secured Notes indenture. As of October 31, 2000, there are no
amounts available for dividends under the Senior Secured Notes indenture and
the Company does not expect to be permitted to pay dividends for the
foreseeable future based on limitations under the Senior Secured Notes
indenture.

Postretirement Benefit Plans

The Company provides postretirement health care and life insurance
benefits to substantially all employees who retire from the Company upon
meeting certain age and length of service eligibility requirements. As a result
of the collective bargaining agreement effective September 1, 1999, the Company
is permitted to pay current claims up to $8.8 million from a trust, after which
time the Company will be required to pay claims from corporate assets. The
Company expects to meet this limitation by the end of 2001. Claims paid by the
Company or trust totaled $4.4 million, $3.4 million and $3.1 million during
2000, 1999 and 1998, respectively.

The Company has a defined benefit pension plan which covers substantially
all bargained for employees. The Company contributed $4.2 million and $6.7
million to the plan during 2000 and 1999, respectively. The Company expects to
contribute approximately $7.2 million, $20.8 million and $14.1 million to the
plan during 2001, 2002 and 2003, respectively, which is expected to satisfy the
minimum funding requirements of ERISA for those periods.

Environmental Matters

WCI has incurred and, in the future, will continue to incur capital
expenditures for matters relating to environmental control and monitoring.

Capital expenditures for environmental control and monitoring were $0.7
million, $0.4 million and $0.5 million in 2000, 1999 and 1998, respectively.
Operating costs for control and monitoring equipment, excluding depreciation
and amortization expense, were $9.3 million, $8.2 million and $9.6 million for
2000, 1999 and 1998, respectively. Operating costs for fiscal 2001 for control
and monitoring equipment are not expected to increase significantly from the
prior periods.

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##### Table of Contents



Environmental laws and regulations continue to change and generally have
become more stringent, and WCI may be subject to more stringent environmental
laws and regulations in the future. Compliance with more stringent
environmental laws and regulations could have a material adverse effect on
WCIs consolidated financial position and future results of operations.

Labor Matters

Most of the Companys hourly employees are represented by the USWA, with
which the Company has a five-year collective bargaining agreement effective
September 1, 1999 that expires October 31, 2004. This contract provides for
wage increases of $1 per hour effective September 1, 2001 and $1 per hour
effective March 1, 2003.

Accounting Standards

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities (FAS133). In June 2000, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 138,
Accounting for Derivative Instruments and Hedging Activities an amendment of
FASB Statement No. 133, (FAS138) which amended FAS133 and added guidance for
certain derivative instruments and hedging activities. The new standard, FAS133
as amended by FAS138, requires recognition of all derivatives as either assets
or liabilities at fair value. One of the primary amendments to FAS133, which
is covered by FAS138 establishes a normal purchases and normal sales
exception. This exception permits companies to exclude contracts which provide
for the purchase or sale of something other than a financial or derivative
instrument that will be delivered in quantities expected to be used or sold by
the entity over a reasonable period of time in the normal course of business
operations. The Company will adopt FAS133 as amended by FAS138 effective
November 1, 2000. The Company has forward purchase contracts for certain
energy and coating metal commodities that qualify for the normal purchase
exception provisions of FAS138. The Company does not believe adoption of
FAS133 as amended by FAS138 will have a material effect on either financial
position or results of operations.

Outlook

Steel imports to the United States continued at high levels during 2000
supplying approximately 28% of the domestic market. While trade cases have
been filed regarding dumped and subsidized imports of hot rolled carbon steel,
imports are expected to continue to supply a significant portion of domestic
demand. In addition, a general slowing in the U.S. economy and continued high
customer inventory levels, especially service center inventories, have resulted
in significantly lower order intake rates, production levels, shipping volumes
and selling prices as described previously and will result in a further decline
in steel shipments in the near term. Accordingly, WCI expects shipping volume
in the first quarter of 2001 to be approximately 10% lower than the shipping
volume in the fourth quarter of 2000. Shipping volume is expected to improve
beginning in the second quarter of 2001 as customer inventory levels decline
with shipping volume for all of 2001 expected to be nearly flat compared to
2000. As discussed previously, transaction prices have declined significantly
in the past two quarters, and the Company expects average selling prices per
ton to be approximately 5% lower in the first quarter of 2001 compared to the
fourth quarter of 2000. Due to the low production levels caused by the reduced
order intake rate, the Company expects its average cost per ton shipped to
increase 5% in the first quarter of 2001 compared to the fourth quarter of
2000. If volume improves in the second quarter of 2001 as expected, production
costs per ton are expected to decline and approximate that experienced in 2000.
As a result of these difficult market conditions, the Company expects to incur
a significant loss both in the first quarter and for the full year of 2001.
However, the Company expects to be able to maintain a significant liquidity
position.

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##### Table of Contents



Forward-Looking Statements

This report includes forward-looking statements which involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of the Company to differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks, uncertainties and other important
factors include, among others: general economic and business conditions;
increasing industry capacity and levels of imports of steel or steel products;
industry trends, including product pricing; competition; currency fluctuations;
the loss of any significant customers; availability of qualified personnel;
major equipment failures; changes in, or the failure or inability to comply
with, government regulation, including, without limitation, environmental
regulations; and the outcome of legal matters. These forward-looking
statements speak only as of the date of this report. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any change in the
Companys expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to commodity price risk with respect to natural gas
and zinc. The Company uses forward purchase contracts to manage the volatility
related to the exposure. No contracts are entered into for speculative
purposes. Based on the Companys commodity hedge exposure at October 31, 2000
and 1999, a hypothetical 10 percent change in market rates applied to the fair
value of the contracts would have no material impact on our earnings, cash
flow, or financial position.

20



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##### Table of Contents






ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WCI STEEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amount)

|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |         |  
|----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------- | ----------- | ------- | ---- | ------- | ------- | ------- | -
|                                          |                                                                                                                          |                                                      |         | October 31,
|                                          |                                                                                                                          |                                                      |         |            
|                                          |                                                                                                                          |                                                      |         | 2000        |         | 1999
|                                          |                                                                                                                          |                                                      |         |             |         |     
|ASSETS                                   
|                                         
|                                         
|                                         
|                                         
|Current assets                           
|                                         
|                                         
|                                         
|                                         
|                                          | Cash and cash equivalents                                                                                                |                                                      | $       | 89,478      |         |      | $       | 76,349  |        
|                                         
|                                         
|                                         
|                                         
|                                          | Accounts receivable, less allowances for doubtful
accounts of $750 and $874, respectively                                |                                                      |         | 47,599      |         |      |         | 57,846  |        
|                                         
|                                         
|                                         
|                                         
|                                          | Inventories                                                                                                              |                                                      |         | 96,171      |         |      |         | 83,247  |        
|                                         
|                                         
|                                         
|                                         
|                                          | Prepaid expenses and other current assets                                                                                |                                                      |         | 1,076       |         |      |         | 6,236   |        
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total current assets                                 |         |             | 234,324 |      |         |         | 223,678 |  
|                                         
|                                         
|                                         
|                                         
|Property, plant and equipment, net        |                                                                                                                          |                                                      | 202,578 |             |         |      | 208,477 |        
|                                         
|                                         
|                                         
|                                         
|Intangible pension asset, net             |                                                                                                                          |                                                      | 25,677  |             |         |      | 31,895  |        
|                                         
|                                         
|                                         
|                                         
|Other assets, net                         |                                                                                                                          |                                                      | 15,597  |             |         |      | 15,894  |        
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total assets                                         |         | $           | 478,176 |      |         | $       | 479,944 |  
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|LIABILITIES and
SHAREHOLDERS EQUITY     
|                                         
|                                         
|                                         
|                                         
|Current liabilities                      
|                                         
|                                         
|                                         
|                                         
|                                          | Current portion of long-term debt                                                                                        |                                                      | $       | 128         |         |      | $       | 122     |        
|                                         
|                                         
|                                         
|                                         
|                                          | Accounts payable                                                                                                         |                                                      |         | 47,201      |         |      |         | 59,730  |        
|                                         
|                                         
|                                         
|                                         
|                                          | Accrued liabilities                                                                                                      |                                                      |         | 50,571      |         |      |         | 48,364  |        
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total current liabilities                            |         |             | 97,900  |      |         |         | 108,216 |  
|                                         
|Long-term debt, excluding current portion |                                                                                                                          |                                                      | 301,252 |             |         |      | 301,380 |        
|                                         
|                                         
|                                         
|                                         
|Postretirement health care benefits       |                                                                                                                          |                                                      | 111,584 |             |         |      | 99,706  |        
|                                         
|                                         
|                                         
|                                         
|Pension benefits                          |                                                                                                                          |                                                      | 36,313  |             |         |      | 38,635  |        
|                                         
|                                         
|                                         
|                                         
|Other liabilities                         |                                                                                                                          |                                                      | 11,756  |             |         |      | 13,738  |        
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total liabilities                                    |         |             | 558,805 |      |         |         | 561,675 |  
|                                         
|                                         
|                                         
|                                         
|Shareholders equity (deficit)           
|                                         
|                                         
|                                         
|                                         
|                                          | Preferred stock, par value $1,000 per share, 5,000
shares authorized, none issued                                        |                                                      |         |            |         |      |         |        |        
|                                         
|                                         
|                                         
|                                         
|                                          | Common stock, no par value, stated value $.01 per
share, 40,000,000 shares authorized, 100 shares
issued and outstanding |                                                      |         |            |         |      |         |        |        
|                                         
|                                         
|                                         
|                                         
|                                          | Additional paid-in capital                                                                                               |                                                      |         | 279         |         |      |         | 279     |        
|                                         
|                                         
|                                         
|                                         
|                                          | Accumulated deficit                                                                                                      |                                                      |         | (80,908     | )       |      |         | (82,010 | )      
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total shareholders equity (deficit)                 |         |             | (80,629 | )    |         |         | (81,731 | )
|                                         
|                                         
|                                         
|                                         
|Commitments and contingencies             |                                                                                                                          |                                                      |        |             |         |      |        |        
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        
|                                          |                                                                                                                          | Total liabilities and shareholders equity (deficit) |         | $           | 478,176 |      |         | $       | 479,944 |  
|                                          |                                                                                                                          |                                                      |         |             |         |      |         |         |        

See accompanying notes to consolidated financial statements.

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WCI STEEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)

|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |         |  
|---------------------------- | ---------------------------- | -------------------------------------------- | ------- | ----------------------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                             |                              |                                              |         | Years ended October 31,
|                             |                              |                                              |         |                        
|                             |                              |                                              |         | 2000                    |         | 1999 |         | 1998   
|                             |                              |                                              |         |                         |         |      |         |        
|                             | Net sales                    |                                              | $       | 560,689                 |         |      | $       | 531,669 |         |   | $       | 665,741 |        
|                            
|                            
|                            
|                            
|                             | Operating costs and expenses
|                            
|                            
|                            
|                            
|                             |                              | Cost of products sold                        |         |                         | 487,477 |      |         |         | 468,170 |   |         |         | 560,951 |  
|                            
|                            
|                            
|                            
|                             |                              | Depreciation and amortization                |         |                         | 23,254  |      |         |         | 23,334  |   |         |         | 25,240  |  
|                            
|                            
|                            
|                            
|                             |                              | Selling, general and administrative expenses |         |                         | 15,770  |      |         |         | 14,613  |   |         |         | 17,343  |  
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|                            
|                             |                              |                                              | 526,501 |                         |         |      | 506,117 |         |         |   | 603,534 |        
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|Operating income             |                              |                                              | 34,188  |                         |         |      | 25,552  |         |         |   | 62,207  |        
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|Other income (expense)      
|                            
|                            
|                            
|                            
|                             |                              | Interest expense                             |         |                         | (31,940 | )    |         |         | (32,030 | ) |         |         | (32,057 | )
|                            
|                            
|                            
|                            
|                             |                              | Interest and other income, net               |         |                         | 8,054   |      |         |         | 8,062   |   |         |         | 2,308   |  
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|                             |                              |                                              | (23,886 | )                       |         |      | (23,968 | )       |         |   | (29,749 | )      
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|Income before income taxes   |                              |                                              | 10,302  |                         |         |      | 1,584   |         |         |   | 32,458  |        
|                            
|                            
|                            
|                            
|Income tax (benefit) expense |                              |                                              |        |                         |         |      | (4,279  | )       |         |   | 12,365  |        
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        
|Net income                   |                              | $                                            | 10,302  |                         |         | $    | 5,863   |         |         | $ | 20,093  |        
|                             |                              |                                              |         |                         |         |      |         |         |         |   |         |         |        

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



WCI STEEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT)
(Dollars in thousands)

|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |         |  
|--------------------------- | ------------------------------ | - | ------ | - | ------- | - | ----------- | --- | --------- | - | ------- | ------- | ------------- | - | ------- | ------- | -
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   | Total  
|                            |                                |   |        |   |         |   | Additional  |     |           |   |         |         | Shareholder's
|                            |                                |   | Common |   | Paid-In |   | Accumulated |     | Equity   
|                            |                                |   | Stock  |   | Capital |   | Deficit     |     | (Deficit)
|                            |                                |   |        |   |         |   |             |     |          
|Balance at October 31, 1997 |                                | $ |       |   |         | $ |            |     |           | $ | (90,866 | )       |               | $ | (90,866 | )      
|                           
|                           
|                           
|                           
|                            | Net income                     |   |        |  |         |   |             |    |           |   |         | 20,093  |               |   |         | 20,093  |  
|                           
|                           
|                           
|                           
|                            | Dividends paid on common stock |   |        |  |         |   |             |    |           |   |         | (14,100 | )             |   |         | (14,100 | )
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        
|Balance at October 31, 1998 |                                |   |       |   |         |   |            |     |           |   | (84,873 | )       |               |   | (84,873 | )      
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        
|                            | Net income                     |   |        |  |         |   |             |    |           |   |         | 5,863   |               |   |         | 5,863   |  
|                           
|                           
|                           
|                           
|                            | Capital contribution           |   |        |  |         |   |             | 279 |           |   |         |        |               |   |         | 279     |  
|                           
|                           
|                           
|                           
|                            | Dividends paid on common stock |   |        |  |         |   |             |    |           |   |         | (3,000  | )             |   |         | (3,000  | )
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        
|Balance at October 31, 1999 |                                |   |       |   |         |   | 279         |     |           |   | (82,010 | )       |               |   | (81,731 | )      
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        
|                            | Net income                     |   |        |  |         |   |             |    |           |   |         | 10,302  |               |   |         | 10,302  |  
|                           
|                           
|                           
|                           
|                            | Dividends paid on common stock |   |        |  |         |   |             |    |           |   |         | (9,200  | )             |   |         | (9,200  | )
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        
|Balance at October 31, 2000 |                                | $ |       |   |         | $ | 279         |     |           | $ | (80,908 | )       |               | $ | (80,629 | )      
|                            |                                |   |        |   |         |   |             |     |           |   |         |         |               |   |         |        

See accompanying notes to consolidated financial
statements.

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WCI STEEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)

|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |         |         |  
|------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------- | ----------------------------------------- | ------- | ----------------------- | ------- | ---- | ------- | ------ | ------- | - | ------- | ------- | ------- | -
|                                      |                                                                                  |                                             |                                           |         | Years ended October 31,
|                                      |                                                                                  |                                             |                                           |         |                        
|                                      |                                                                                  |                                             |                                           |         | 2000                    |         | 1999 |         | 1998  
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |       
|CASH FLOWS FROM OPERATING
ACTIVITIES:
|                                     
|                                     
|                                     
|                                     
|                                      | Net income                                                                       |                                             | $                                         | 10,302  |                         |         | $    | 5,863   |        |         | $ | 20,093  |        
|                                     
|                                     
|                                     
|                                     
|                                      | Adjustment to reconcile net income to net cash
provided by operating activities:
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Depreciation and amortization               |                                           |         | 20,311                  |         |      |         | 20,400 |         |   |         | 22,309  |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Amortization of deferred maintenance costs  |                                           |         | 2,943                   |         |      |         | 2,934  |         |   |         | 2,931   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Amortization of financing costs             |                                           |         | 1,291                   |         |      |         | 1,329  |         |   |         | 1,321   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Postretirement health care benefits         |                                           |         | 11,878                  |         |      |         | 6,968  |         |   |         | 6,983   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Pension benefits                            |                                           |         | 6,820                   |         |      |         | (2,202 | )       |   |         | 1,583   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Provision for losses on accounts receivable |                                           |         | 37                      |         |      |         | (84    | )       |   |         | (475    | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Deferred income taxes                       |                                           |         |                        |         |      |         | (4,758 | )       |   |         | 5,449   |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Other                                       |                                           |         | 1,190                   |         |      |         | 429    |         |   |         | 142     |        
|                                     
|                                     
|                                     
|                                     
|                                      | Cash provided (used) by changes in certain assets and
liabilities               
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Accounts receivable                         |                                           |         | 10,210                  |         |      |         | (9,038 | )       |   |         | 16,953  |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Inventories                                 |                                           |         | (12,924                 | )       |      |         | 3,893  |         |   |         | 19,153  |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Prepaid expenses and other assets           |                                           |         | 1,223                   |         |      |         | (5,372 | )       |   |         | (3,069  | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Accounts payable                            |                                           |         | (12,529                 | )       |      |         | 13,110 |         |   |         | (17,503 | )      
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Accrued liabilities                         |                                           |         | (717                    | )       |      |         | (4,483 | )       |   |         | 731     |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Other liabilities                           |                                           |         | (1,982                  | )       |      |         | (316   | )       |   |         | (2,521  | )      
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      |                                                                                  |                                             | Net cash provided by operating activities |         |                         | 38,053  |      |         |        | 28,673  |   |         |         | 74,080  |  
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|CASH FLOWS FROM INVESTING
ACTIVITIES:
|                                     
|                                     
|                                     
|                                     
|                                      | Additions to property, plant and equipment                                       |                                             |                                           | (15,602 | )                       |         |      | (11,403 | )      |         |   | (15,565 | )      
|                                     
|                                     
|                                     
|                                     
|                                      | Gross proceeds from the sale of assets                                           |                                             |                                           |        |                         |         |      |        |        |         |   | 110     |        
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      |                                                                                  |                                             | Net cash used by investing activities     |         |                         | (15,602 | )    |         |        | (11,403 | ) |         |         | (15,455 | )
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|CASH FLOWS FROM FINANCING
ACTIVITIES:
|                                     
|                                     
|                                     
|                                     
|                                      | Principal payments on long-term debt                                             |                                             |                                           | (122    | )                       |         |      | (116    | )      |         |   | (1,319  | )      
|                                     
|                                     
|                                     
|                                     
|                                      | Dividends paid                                                                   |                                             |                                           | (9,200  | )                       |         |      | (3,000  | )      |         |   | (14,100 | )      
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      |                                                                                  |                                             | Net cash used by financing activities     |         |                         | (9,322  | )    |         |        | (3,116  | ) |         |         | (15,419 | )
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      | Net increase in cash and cash equivalents                                        |                                             |                                           | 13,129  |                         |         |      | 14,154  |        |         |   | 43,206  |        
|                                     
|                                     
|                                     
|                                     
|                                      | Cash and cash equivalents at beginning of year                                   |                                             |                                           | 76,349  |                         |         |      | 62,195  |        |         |   | 18,989  |        
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      | Cash and cash equivalents at end of year                                         |                                             | $                                         | 89,478  |                         |         | $    | 76,349  |        |         | $ | 62,195  |        
|                                      |                                                                                  |                                             |                                           |         |                         |         |      |         |        |         |   |         |        
|                                      | Supplemental disclosure of cash flow information                                
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Cash paid for interest                      |                                           | $       | 30,649                  |         |      | $       | 30,707 |         |   | $       | 30,763  |        
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                  | Cash paid for income taxes                  |                                           |         | 21                      |         |      |         | 974    |         |   |         | 2,050   |        

See accompanying notes to consolidated financial
statements.

24



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##### Table of Contents



WCI STEEL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

WCI Steel, Inc. (Company or WCI) is a wholly-owned subsidiary of Renco
Steel Holdings, Inc. (Renco Steel) and an indirect wholly-owned subsidiary of
The Renco Group, Inc. (Renco).

(a) Nature of Operations

The Company is a niche oriented integrated producer of value-added, custom
steel products. The Company produces a wide range of custom flat rolled
products at its primary facility in Warren, Ohio, including high carbon, alloy,
ultra high strength, silicon electrical and heavy gauge galvanize steel. In
addition, the Company produces commodity grade products that consist of low
carbon, high strength and light gauge galvanize steel. The Companys primary
customers are steel converters, steel service centers, construction product
companies, electrical equipment manufacturers and to a lesser extent,
automobile and automotive parts manufacturers located principally in the United
States.

During 2000 and 1999, sales to the Companys largest customer accounted
for 10.1% and 11.3%, respectively, of net sales. During 1998, no single
customer accounted for 10% or more of net sales. Concentration of credit risk
related to trade receivables is limited due to the large number of customers in
a variety of industries. Approximately 50% of WCIs shipments are to customers
within 200 miles of its primary facility.

Since its inception, the Company has had labor agreements with the United
Steelworkers of America (USWA) and other organized labor organizations. The
USWA represents approximately 75% of the Companys employees. The Company has
a five-year agreement with the USWA that expires October 31, 2004.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany profits,
transactions, and balances have been eliminated in consolidation.

(c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and short-term investments
with maturities of three months or less from the date of acquisition.

(d) Inventories

Inventories are stated at the lower of cost or market. Cost is determined
by the last-in, first-out (LIFO) method.

(e) Property, Plant and
Equipment

Property, plant and equipment are recorded at cost. Depreciation is
calculated on the straight-line method over the estimated useful lives of the
assets (buildings 20 to 30 years and machinery and equipment 4 to 25 years with
a weighted average of 18 years). Expenditures for normal repairs and
maintenance are charged to expense as incurred.

25



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##### Table of Contents



(f) Other Assets

Deferred financing costs, included in other non-current assets, are
amortized using the effective yield method over the term of the related
financing and deferred blast furnace maintenance costs, also included in other
assets, are amortized using the straight-line method over a six-year period.
In addition, other non-current assets include $56,912,000 face amount of Acme
Metals Incorporated 10.875% Senior Unsecured Notes with an estimated fair value
of $8,000,000. See Note 12.

(g) Income Taxes

On January 15, 1999, Renco filed an election with the consent of its
shareholders with the Internal Revenue Service to change its taxable status
from that of a subchapter C corporation to that of a subchapter S corporation,
effective November 1, 1998. At the same time, Renco elected for the Company to
be treated as a qualified subchapter S subsidiary (QSSS). Most states in which
the Company operates follow similar tax treatment. QSSS status requires the
ultimate shareholders to include their pro rata share of the Companys income
or loss in their individual tax returns. The Company will continue to provide
for state and local income taxes for the taxing jurisdictions which do not
recognize QSSS status, however, management believes this is not material to the
Company. However, under the built in gains provisions of the tax law,
certain federal and state taxes may become payable and would be charged to the
Companys statement of income. Such taxes are measured by the excess of the
fair market value of assets over their tax bases on the effective date of the
subchapter S subsidiary election if the associated assets are disposed of
within the ten-year post-election period. It is not managements present
intention to trigger any taxes under the built-in-gains provisions of the tax
law.

(h) Environmental Compliance Costs

Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing
condition caused by past operations, and which do not contribute to current or
future revenue generation, are expensed. Liabilities are recorded when
environmental assessments and/or remedial expenditures are probable, and the
cost can be reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or the
Companys development of, or commitment to, a plan of action based on the then
known facts.

(i) Use of Estimates in Preparation of Consolidated 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 consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

26



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##### Table of Contents



(2) Inventories

Inventories consist of the following:

|                                   |  |                        |        |      |  |   |        | 
|---------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------ | 
|                                   |  | October 31,           
|                                   |  |                       
|                                   |  | 2000                   |        | 1999
|                                   |  |                        |        |     
|                                   |  | (Dollars in Thousands)
|                                  
|Raw materials                      |  | $                      | 38,873 |      |  | $ | 33,811 | 
|                                  
|                                  
|                                  
|                                  
|Finished and semi-finished product |  |                        | 60,785 |      |  |   | 49,386 | 
|                                  
|                                  
|                                  
|                                  
|Supplies                           |  |                        | 74     |      |  |   | 50     | 
|                                   |  |                        |        |      |  |   |        | 
|                                   |  |                        | 99,732 |      |  |   | 83,247 | 
|                                  
|                                  
|                                  
|                                  
|Less LIFO reserve                  |  |                        | 3,561  |      |  |   |       | 
|                                   |  |                        |        |      |  |   |        | 
|                                   |  | $                      | 96,171 |      |  | $ | 83,247 | 
|                                   |  |                        |        |      |  |   |        | 

(3) Property, Plant and Equipment

Property, plant and equipment consists of the following:

|                              |  |                        |         |      |  |   |         | 
|----------------------------- |  | ---------------------- | ------- | ---- |  | - | ------- | 
|                              |  | October 31,           
|                              |  |                       
|                              |  | 2000                   |         | 1999
|                              |  |                        |         |     
|                              |  | (Dollars in Thousands)
|                             
|Land and improvements         |  | $                      | 435     |      |  | $ | 435     | 
|                             
|                             
|                             
|                             
|Buildings                     |  |                        | 27,563  |      |  |   | 27,449  | 
|                             
|                             
|                             
|                             
|Machinery and equipment       |  |                        | 332,456 |      |  |   | 332,320 | 
|                             
|                             
|                             
|                             
|Construction in progress      |  |                        | 13,115  |      |  |   | 5,379   | 
|                              |  |                        |         |      |  |   |         | 
|                              |  |                        | 373,569 |      |  |   | 365,583 | 
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |                        | 170,991 |      |  |   | 157,106 | 
|                              |  |                        |         |      |  |   |         | 
|                              |  | $                      | 202,578 |      |  | $ | 208,477 | 
|                              |  |                        |         |      |  |   |         | 

(4) Long-Term Debt

Long-term debt consists of the following:

|                                                                                                            |  |                        |         |      |  |   |         | 
|----------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | ---- |  | - | ------- | 
|                                                                                                            |  | October 31,           
|                                                                                                            |  |                       
|                                                                                                            |  | 2000                   |         | 1999
|                                                                                                            |  |                        |         |     
|                                                                                                            |  | (Dollars in Thousands)
|Senior Secured Notes with
interest at 10% payable semi-annually, due 2004                                   |  | $                      | 300,000 |      |  | $ | 300,000 | 
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Revolving Credit Facility
(Revolver) with interest at
prime rate (9.5% at October
31, 2000) payable monthly |  |                        |        |      |  |   |        | 
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Other                                                                                                       |  |                        | 1,380   |      |  |   | 1,502   | 
|                                                                                                            |  |                        |         |      |  |   |         | 
|                                                                                                            |  |                        | 301,380 |      |  |   | 301,502 | 
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Less current portion of
long-term debt                                                                      |  |                        | 128     |      |  |   | 122     | 
|                                                                                                            |  |                        |         |      |  |   |         | 
|                                                                                                            |  | $                      | 301,252 |      |  | $ | 301,380 | 
|                                                                                                            |  |                        |         |      |  |   |         | 

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##### Table of Contents



The $300 million 10% Senior Secured Notes due 2004 (Senior Secured Notes)
are secured by a second priority lien on substantially all of the existing
property, plant and equipment of the Company which will become a first priority
lien if all of the 10.5% Senior Notes due 2002 (Senior Notes) are extinguished
($0.3 million currently outstanding). A Voluntary Employee Beneficiaries
Association trust fund, established to hold Company contributions to fund
postretirement health care and life insurance obligations for the benefit of
hourly employees, also holds a second priority lien on the security for the
Senior Secured Notes, which lien will remain a second priority lien even if the
lien in favor of the Senior Secured Notes becomes a first priority lien.

The Company has a $100,000,000 Revolver secured by and subject to eligible
inventories and receivables as defined, reduced by any outstanding letters of
credit. The Revolver is subject to a monthly service fee of $15,000 and an
annual commitment fee of 0.5% of the unused balance up to $60,000,000 payable
monthly. There were no borrowings outstanding under the Revolver as of or
during the year ended October 31, 2000. The Revolver, which expires December
29, 2003, also provides for up to an aggregate amount of $20,000,000 in letters
of credit. The Company had a borrowing limit of $83,538,000 based on eligible
inventory and receivables net of $14,095,000 in letters of credit outstanding
or committed at October 31, 2000. The Revolver is subject to a penalty of
$500,000 if terminated, without being refinanced with the same lender, prior to
December 29, 2001 and $250,000 thereafter if terminated before October 31,
2003.

The Companys Revolver and Senior Secured Notes contain certain financial
and other covenants, including maintenance of specified levels of net worth as
defined, working capital, and debt service and limitations on capital
expenditures. Additional covenants limit the incurrence of additional
indebtedness, payments affecting subsidiaries, transactions with affiliates,
sale/leaseback transactions, impairment of security interest, consolidations,
mergers and transfer of the Companys assets. The Company is permitted to
declare and pay dividends, and make other transactions with affiliates provided
no condition of default exists or will exist, and the accumulated amount of
such transactions is no greater than fifty percent (50%) of the consolidated
net income as defined (less 100% of any consolidated net loss) earned for
periods subsequent to October 31, 1996 when taken as a single accounting period
less management fees paid to Renco in excess of $1,200,000 annually for the
same period. Under these agreements, there are no amounts available for
dividends and other transactions with affiliates at October 31, 2000.

Aggregate principal payments on long-term debt for the five years
subsequent to October 31, 2000 are as follows: $128,000 in 2001, $415,000 in
2002, $837,000 in 2003, none in 2004, and $300,000,000 in 2005.

As of October 31, 2000, the fair value of the Senior Secured Notes was
$250,000,000 based on the quoted market price.

(5) Accrued Liabilities

Accrued liabilities included employment-related costs of $29,312,000 and
$25,722,000 and interest of $12,522,000 and $12,522,000 at October 31, 2000 and
1999, respectively.

(6) Employee Compensation Plans

The Company has variable compensation plans for the benefit of
substantially all employees. The amount of compensation due under these plans
is based on the Companys income as defined under each plan. Total expense
under the plans was $4,929,000, $2,670,000 and $11,761,000 for the years ended

28



---



##### Table of Contents



October 31, 2000, 1999 and 1998, respectively. Certain amounts under these
plans represent deferred compensation.

(7) Pension Plans

The Company has defined contribution retirement plans under which it
expensed approximately $2,083,000, $5,223,000 and $5,684,000 for the years
ended October 31, 2000, 1999 and 1998, respectively.

The Company also has a defined benefit pension plan for substantially all
hourly employees which provides minimum pension benefits based on age, years of
service, and benefits provided under the Companys frozen defined contribution
plan and a predecessor companys defined benefit plan. As a result of the
collective bargaining agreement effective September 1, 1999 with the USWA, the
plan was amended to provide an increase in pension benefits. In addition, as
active employees retire, assets from the Companys frozen defined contribution
component of the plan are transferred to the defined benefit component of the
plan with a corresponding increase in the projected benefit obligation. The
following table sets forth the actuarial present value of benefit obligations
and funded status of the Companys defined benefit pension plan:

|                                                                                                             |  |                        |         |      |  |   |         |  
|------------------------------------------------------------------------------------------------------------ |  | ---------------------- | ------- | ---- |  | - | ------- | -
|                                                                                                             |  | October 31,           
|                                                                                                             |  |                       
|                                                                                                             |  | 2000                   |         | 1999
|                                                                                                             |  |                        |         |     
|                                                                                                             |  | (Dollars in Thousands)
|                                                                                                            
|Projected benefit obligation                                                                                 |  | $                      | 81,195  |      |  | $ | 69,196  |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Plan assets at fair value                                                                                    |  |                        | 37,534  |      |  |   | 25,909  |  
|                                                                                                             |  |                        |         |      |  |   |         |  
|Projected benefit obligation in
excess of plan assets                                                        |  |                        | 43,661  |      |  |   | 43,287  |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Unrecognized net gain from
past experience different from
that assumed and effects of
changes in assumptions |  |                        | 25,726  |      |  |   | 25,654  |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Unrecognized prior service cost                                                                              |  |                        | (51,579 | )    |  |   | (57,953 | )
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Additional minimum liability                                                                                 |  |                        | 25,677  |      |  |   | 31,895  |  
|                                                                                                             |  |                        |         |      |  |   |         |  
|Accrued pension cost                                                                                         |  |                        | 43,485  |      |  |   | 42,883  |  
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|Less pension liability due
within one year                                                                   |  |                        | 7,172   |      |  |   | 4,248   |  
|                                                                                                             |  |                        |         |      |  |   |         |  
|Long-term pension liability                                                                                  |  | $                      | 36,313  |      |  | $ | 38,635  |  
|                                                                                                             |  |                        |         |      |  |   |         |  

An assumed discount rate of 7.5% and an expected return on plan assets of
9.0% in 2000 and 1999 were used for purposes of valuing the benefits under the
defined benefit pension plan.

29



---



##### Table of Contents



The following table sets forth a reconciliation of the beginning and end
of year projected benefit obligation:

|                                                  |  |                        |        |      |  |   |         |  
|------------------------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------- | -
|                                                  |  | 2000                   |        | 1999
|                                                  |  |                        |        |     
|                                                  |  | (Dollars in Thousands)
|                                                 
|Projected benefit obligation at
beginning of year |  | $                      | 69,196 |      |  | $ | 47,839  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Service cost                                      |  |                        | 3,971  |      |  |   | 96      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Interest cost                                     |  |                        | 4,853  |      |  |   | 3,107   |  
|                                                 
|                                                 
|                                                 
|                                                 
|Plan amendment                                    |  |                        | 11,265 |      |  |   | 30,230  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Actuarial gains                                   |  |                        | (5,237 | )    |  |   | (10,224 | )
|                                                 
|                                                 
|                                                 
|                                                 
|Benefits paid                                     |  |                        | (2,853 | )    |  |   | (1,852  | )
|                                                  |  |                        |        |      |  |   |         |  
|Projected benefit obligation at
end of year       |  | $                      | 81,195 |      |  | $ | 69,196  |  
|                                                  |  |                        |        |      |  |   |         |  

The following table sets forth a reconciliation of the beginning and end
of year fair value of plan assets:

|                                 |  |                        |        |      |  |   |        |  
|-------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------ | -
|                                 |  | 2000                   |        | 1999
|                                 |  |                        |        |     
|                                 |  | (Dollars in Thousands)
|                                
|Plan assets at beginning of year |  | $                      | 25,909 |      |  | $ | 19,015 |  
|                                
|                                
|                                
|                                
|Actual return on assets          |  |                        | (1,035 | )    |  |   | 2,046  |  
|                                
|                                
|                                
|                                
|Employer contributions           |  |                        | 4,248  |      |  |   | 6,700  |  
|                                
|                                
|                                
|                                
|Benefits paid                    |  |                        | (2,853 | )    |  |   | (1,852 | )
|                                
|                                
|                                
|                                
|Transfers from prior plans       |  |                        | 11,265 |      |  |   |       |  
|                                 |  |                        |        |      |  |   |        |  
|Plan assets at end of year       |  | $                      | 37,534 |      |  | $ | 25,909 |  
|                                 |  |                        |        |      |  |   |        |  

The following table sets forth the components of pension expense:

|                               |                                |   |                         |        |      |   |        |        |   |   |       |       |  
|------------------------------ | ------------------------------ | - | ----------------------- | ------ | ---- | - | ------ | ------ | - | - | ----- | ----- | -
|                               |                                |   | Years Ended October 31,
|                               |                                |   |                        
|                               |                                |   | 2000                    |        | 1999 |   | 1998  
|                               |                                |   |                         |        |      |   |       
|                               |                                |   | (Dollars in Thousands) 
|                              
|Service cost                   |                                | $ | 3,971                   |        |      | $ | 96     |        |   | $ | (430  | )    
|                              
|                              
|                              
|                              
|Interest cost                  |                                |   | 4,853                   |        |      |   | 3,107  |        |   |   | 3,237 |      
|                              
|                              
|                              
|                              
|Expected return on plan assets |                                |   | (2,112                  | )      |      |   | (1,400 | )      |   |   | (963  | )    
|                              
|                              
|                              
|                              
|Amortization of unrecognized: 
|                              
|                              
|                              
|                              
|                               | Prior service cost             |   |                         | 6,374  |      |   |        | 4,056  |   |   |       | 3,757 |  
|                              
|                              
|                              
|                              
|                               | Actuarial gain and losses, net |   |                         | (2,018 | )    |   |        | (1,361 | ) |   |       | (918  | )
|                               |                                |   |                         |        |      |   |        |        |   |   |       |      
|                               |                                | $ | 11,068                  |        |      | $ | 4,498  |        |   | $ | 4,683 |      
|                               |                                |   |                         |        |      |   |        |        |   |   |       |      

30



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##### Table of Contents



(8) Postretirement Health Care Benefits

The following table sets forth the accumulated postretirement benefit
obligation (APBO) of the Companys postretirement health care and life
insurance plans:

|                                                                                                       |  |                         |         |      |  |   |         |  
|------------------------------------------------------------------------------------------------------ |  | ----------------------- | ------- | ---- |  | - | ------- | -
|                                                                                                       |  | Years Ended October 31,
|                                                                                                       |  |                        
|                                                                                                       |  | 2000                    |         | 1999
|                                                                                                       |  |                         |         |     
|                                                                                                       |  | (Dollars in Thousands) 
|                                                                                                      
|APBO                                                                                                   |  | $                       | 132,686 |      |  | $ | 124,535 |  
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Plan assets at fair value                                                                              |  |                         | 15,564  |      |  |   | 18,090  |  
|                                                                                                       |  |                         |         |      |  |   |         |  
|APBO in excess of plan assets                                                                          |  |                         | 117,122 |      |  |   | 106,445 |  
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Unrecognized prior service cost
resulting from plan
amendments                                         |  |                         | (5,521  | )    |  |   | (4,059  | )
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Unrecognized net loss from past
experience different from that
assumed and from changes in
assumptions |  |                         | (17     | )    |  |   | (2,680  | )
|                                                                                                       |  |                         |         |      |  |   |         |  
|Accrued postretirement benefit
cost                                                                    |  | $                       | 111,584 |      |  | $ | 99,706  |  
|                                                                                                       |  |                         |         |      |  |   |         |  

The APBO was determined using a discount rate of 7.5% and an expected
return on plan assets of 9.0% in 2000 and 1999 and an assumed health care cost
trend rate of 7% in 2000, gradually declining to 5% after 2005. Assuming a 1%
increase in the health care cost trend rate, the APBO at October 31, 2000 would
increase by $20,737,000 along with an increase in the 2000 service and interest
cost components of $2,182,000. Assuming a 1% decrease in the health care cost
trend rates the APBO at October 31, 2000 would decrease by $16,568,000 along
with a decrease in the 2000 service and interest cost components of $1,717,000.
The following table sets forth a reconciliation of the beginning and end of
year APBO:

|                              |  |                        |         |      |  |   |         |  
|----------------------------- |  | ---------------------- | ------- | ---- |  | - | ------- | -
|                              |  | 2000                   |         | 1999
|                              |  |                        |         |     
|                              |  | (Dollars in Thousands)
|                             
|APBO at beginning of year     |  | $                      | 124,535 |      |  | $ | 130,821 |  
|                             
|                             
|                             
|                             
|Service cost                  |  |                        | 2,658   |      |  |   | 3,357   |  
|                             
|                             
|                             
|                             
|Interest cost                 |  |                        | 9,206   |      |  |   | 8,670   |  
|                             
|                             
|                             
|                             
|Actuarial (gains) losses, net |  |                        | 718     |      |  |   | (14,937 | )
|                             
|                             
|                             
|                             
|Benefits paid                 |  |                        | (4,431  | )    |  |   | (3,376  | )
|                              |  |                        |         |      |  |   |         |  
|APBO at end of year           |  | $                      | 132,686 |      |  | $ | 124,535 |  
|                              |  |                        |         |      |  |   |         |  

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The following table sets forth a reconciliation of the beginning and end
of year fair value of plan assets:

|                                 |  |                        |        |      |  |   |        |  
|-------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------ | -
|                                 |  | 2000                   |        | 1999
|                                 |  |                        |        |     
|                                 |  | (Dollars in Thousands)
|                                
|Plan assets at beginning of year |  | $                      | 18,090 |      |  | $ | 12,953 |  
|                                
|                                
|                                
|                                
|Actual return on assets          |  |                        | 1,759  |      |  |   | 3,078  |  
|                                
|                                
|                                
|                                
|Employer contributions           |  |                        | 213    |      |  |   | 2,324  |  
|                                
|                                
|                                
|                                
|Benefits paid                    |  |                        | (4,498 | )    |  |   | (265   | )
|                                 |  |                        |        |      |  |   |        |  
|Plan assets at end of year       |  | $                      | 15,564 |      |  | $ | 18,090 |  
|                                 |  |                        |        |      |  |   |        |  

Net periodic postretirement benefit costs included the following
components:

|                                         |                       |   |                         |       |      |   |        |       |  |   |        |       | 
|---------------------------------------- | --------------------- | - | ----------------------- | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- | 
|                                         |                       |   | Years Ended October 31,
|                                         |                       |   |                        
|                                         |                       |   | 2000                    |       | 1999 |   | 1998  
|                                         |                       |   |                         |       |      |   |       
|                                         |                       |   | (Dollars in Thousands) 
|                                        
|Service cost                             |                       | $ | 2,658                   |       |      | $ | 3,357  |       |  | $ | 3,068  |      
|                                        
|                                        
|                                        
|                                        
|Interest cost                            |                       |   | 9,206                   |       |      |   | 8,670  |       |  |   | 8,441  |      
|                                        
|                                        
|                                        
|                                        
|Expected return on plan assets           |                       |   | (1,477                  | )     |      |   | (1,281 | )     |  |   | (804   | )    
|                                        
|                                        
|                                        
|                                        
|Amortization of unrecognized:           
|                                        
|                                        
|                                        
|                                        
|                                         | Prior service cost    |   |                         | 1,797 |      |   |        | 1,400 |  |   |        | 1,400 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Actuarial (gain) loss |   |                         | (160  | )    |   |        | 258   |  |   |        | 489   | 
|                                         |                       |   |                         |       |      |   |        |       |  |   |        |      
|Net periodic postretirement
benefit cost |                       | $ | 12,024                  |       |      | $ | 12,404 |       |  | $ | 12,594 |      
|                                         |                       |   |                         |       |      |   |        |       |  |   |        |      

(9) Income Taxes

As a result of the change in tax status described in Note 1 (g), the
Company recognized an income tax benefit of $4,279,000 during 1999, which
includes the elimination of net deferred tax liabilities recorded as of October
31, 1998. As of October 31, 1999, the Companys book basis in its assets and
liabilities exceeded its tax basis by approximately $9,000,000. As of October
31, 2000, the Companys tax basis in its assets and liabilities exceeded its
book basis by approximately $8,700,000.

The provision for income tax expense for the year ended October 31, 1998
was comprised of federal income tax of $11,326,000 ($5,009,000 of which was
deferred) and $1,039,000 of state income tax ($440,000 of which was deferred).

(10) Leases

The Company leases a portion of its operating and data processing
equipment. Minimum future lease payments under noncancellable operating leases
are $1,634,000, $899,000, $466,000, $487,000, $90,000 and $34,000 for the years
ending October 31, 2001, 2002, 2003, 2004, 2005 and thereafter, respectively.
Rent expense for noncancellable operating leases amounted to approximately
$1,914,000, $1,873,000 and $1,811,000, for the years ended October 31, 2000,
1999 and 1998, respectively.

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(11) Related Party Transactions

The Company has a management services agreement with Renco under which
Renco provides certain management services to the Company. Under terms of this
agreement, the Company is charged a monthly fee of $100,000. The term of this
agreement extends to October 31, 2001. Total expense for management services
fees amounted to $1,200,000 for each of the years ended October 31, 2000, 1999
and 1998.

To obtain the advantages of volume, Renco purchases certain insurance
coverage for its subsidiaries, including the Company, and the actual cost of
such insurance, without markup, is reimbursed by the covered subsidiaries. The
major areas of the Companys insurance coverage obtained under the Renco
programs are property, business interruption, general, product and auto
liability, workers compensation (other than Ohio for which the Company is self
insured) and casualty umbrella.

In fiscal 2000, 1999 and 1998, the Company incurred costs of approximately
$2.0 million, $1.7 million and $1.8 million, respectively, under the Renco
insurance program. The Company believes that its insurance costs under this
program were less than it would have incurred if it had obtained its insurance
independently.

Renco Steel is a holding company formed by Renco in January 1998, which
owns all the outstanding shares of capital stock of the Company. In February
1998, Renco Steel issued $120 million principal amount 10.875% Senior Secured
Notes due 2005. These notes are secured by a pledge of all the outstanding
capital stock of the Company. Historically, Renco Steel has met its debt service obligations from its cash balances and earnings thereon and through distributions from the Company as permitted under the Companys outstanding indebtedness as described
in Note 4. However, the Company does not expect to be permitted to pay dividends for the foreseeable future.

(12) Commitments and Contingencies

At October 31, 2000, the Company had commitments to purchase data
processing services of approximately $8,452,000 in the aggregate over the
remaining 1.5 years of its management information systems agreement and
purchased services of approximately $5,496,000, $5,578,000 and $5,482,000 in
2000, 1999 and 1998, respectively, under the agreement.

At October 31, 2000, at pricing then in effect, the Company had firm
commitments for the purchase of raw materials and gases of approximately
$12,541,000 in 2001, $2,678,000 in 2002 and $316,000 thereafter. In addition,
at October 31, 2000 the Company had commitments for capital expenditures of
approximately $3,066,000.

The Company has entered into a 15 year agreement for the supply of certain
gases commencing in 2002. This contract requires the Company to pay a minimum
monthly amount on a take or pay basis. Commitments under this contract total
approximately $5.4 million per year and are subject to escalation.

In common with much of the steel industry, the Companys facilities are
located on sites that have been used for heavy industrial purposes for decades.
The Company is and will continue to be subject to numerous federal, state and
local environmental laws and regulations governing, among other things, air
emissions, waste water discharge and solid and hazardous waste management. The
Company has made and intends to continue to make the necessary expenditures for
environmental remediation and compliance with environmental laws and
regulations. Environmental laws and regulations continue to change and have
generally become more stringent, and the Company may be subject to more
stringent environmental laws and regulations in the future. Compliance with more
stringent environmental laws and regulations could have a material adverse
effect on the Companys financial condition and results of operations.

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The Company is subject to consent decrees as a result of two civil actions
instituted by the Department of Justice (DOJ), on behalf of the Environmental
Protection Agency (EPA). These consent decrees require the Company to complete
certain supplemental environmental projects estimated to cost between $2.1
million and $2.5 million that will be expended by late 2002. These projects
include sediment removal from the Mahoning River at an estimated remaining cost
of $850,000 and the installation of a liner for a surface impoundment estimated
to cost $1,550,000. The consent decrees also provide for stipulated penalties
in the event of noncompliance which the Company does not believe will be
material.

As a condition of a previous Resource Conservation and Recovery Act (RCRA)
operating permit, the Company is required to undertake a corrective action
program with respect to historical material handling practices at the Warren
facility. The Company has completed the initial phase of the first
investigation step of the corrective action program, the RCRA Facility
Investigation (RFI), and has submitted its report to the EPA. The Company
believes that additional sampling will be required to complete a full RFI and
will negotiate the extent of the second phase with the EPA. The RFI workplan
identifies thirteen historical solid waste management units to be investigated.
The final scope of corrective action required to remediate any contamination
that may be present at or emanating from the Warren facility is dependent upon
the completion and findings of the RFI and the development and approval of a
corrective action program. Accordingly, the Company is unable at this time to
estimate the final cost of the corrective action program or the period over
which such costs may be incurred and there can be no assurance that any such
corrective action program would not have a material adverse effect on the
operating results or financial condition of the Company.

On January 23, 1996, two retired employees instituted an action against
the Company and the United Steelworkers of America (USWA) in the United States
District Court for the Northern District of Ohio alleging in substance that
certain distributions made by the Company to employees and benefit plans
violated certain agreements, the Employee Retirement Income Security Act
(ERISA), the National Labor Relations Act (NLRA) and common law. On July 31,
1997, the court granted the Companys motion to dismiss this action and entered
judgement in favor of the Company and the USWA. The Plaintiffs filed an appeal
regarding the courts decision to dismiss, which was heard in June 1998. In
March 1999, the appellate court upheld the dismissal of the claims under ERISA
and common law, but reversed the dismissal of the NLRA claim and remanded to
the district court for further proceedings. On October 9, 2000 the court
granted the Companys motion to dismiss this action and entered judgement in
favor of the Company and the USWA. The plaintiffs filed an appeal regarding
the courts decision to dismiss.

In addition to the above-described matters, the Company is contingently
liable with respect to lawsuits and other claims incidental to the ordinary
course of its business. A liability has been established for an amount, which
the Company believes is adequate, based on information currently available, to
cover the costs to resolve the above described matters, including remediation,
if any, except for any costs of corrective action that may result from the RFI
for which no estimate can currently be made. The outcome of the above
described matters could have a material adverse effect on the future operating
results of the Company in a particular quarter or annual period; however, the
Company believes that the effect of such matters will not have a material
adverse effect on the Companys consolidated financial position.

On September 7, 2000 WCI entered into a non-binding letter of intent with
Acme Steel and Acme Metals Incorporated (Acme Metals), pursuant to which WCI
would acquire substantially all of Acme Steels assets and assume certain
liabilities related to Acme Steels integrated coke, iron and steel production
business. The acquisition would not include Acme Packaging Corporation (Acme
Packaging) and Alpha Tube Corporation (Alpha Tube), which are subsidiaries
of Acme Metals, or

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Acme Steels cold reduction mill and a certain slitting machine. WCI would
assume normal operating liabilities, certain employee related liabilities,
certain costs associated with a contemplated reline of Acme Steels blast
furnace and certain environmental liabilities, including the assumption of
$15.5 million in liabilities under certain environmental improvement bonds.
The cash portion of the purchase price for the
acquired assets would be $116,400,000. In addition, WCI would deliver and
assign Acme Metals 10.875% Senior Unsecured Notes having a principal amount of
$59,425,000 owned by WCI and affiliates and assume certain liabilities, as
outlined above. The purchase price would be subject to working capital and
other adjustments. The letter of intent provides that any transaction would be
conditioned upon, among other things, the negotiation of a new collective
bargaining agreement and Acme Packaging and Alpha Tube entering into supply
agreements with WCI pursuant to which WCI would provide them with steel
products. WCI has not yet determined how the transaction would be financed.

Acme Steel, Acme Metals and certain of their affiliates are debtors in a
chapter 11 case pending before the United States Bankruptcy Court for the
district of Delaware. On September 28, 2000, the Bankruptcy Court approved
Acme Steels motion seeking approval of certain bidding procedures, including
provisions for the payment of a break-up fee and expense reimbursement in
certain circumstances if the Bankruptcy Court approves either a sale of the
assets to a competing bidder or a plan of reorganization for Acme Steel that
does not include a sale of the assets to WCI. WCI is conducting a full due
diligence review and is negotiating towards the execution of a definitive
purchase agreement. There is no certainty at this time that the due diligence
review will be satisfactory, that WCI will be successful in negotiating a
definitive purchase agreement or that any such transaction will be completed if
a definitive agreement is reached.

(13) Selected Quarterly Data (Unaudited)

The following is a summary of unaudited quarterly results for the years
ended October 31, 2000 and 1999:

|                  |  |                         |         |          |  |         |         |            |  |   |         |  |  |   |         |  
|----------------- |  | ----------------------- | ------- | -------- |  | ------- | ------- | ---------- |  | - | ------- |  |  | - | ------- | -
|                  |  | Three Months Ended 2000
|                  |  |                        
|                  |  | January 31              |         | April 30 |  | July 31 |         | October 31
|                  |  |                         |         |          |  |         |         |           
|                  |  | (Dollars in thousands) 
|                 
|Net sales         |  | $                       | 141,212 |          |  | $       | 156,149 |            |  | $ | 140,726 |  |  | $ | 122,602 |  
|                 
|                 
|                 
|                 
|Gross margin      |  |                         | 22,032  |          |  |         | 24,941  |            |  |   | 18,468  |  |  |   | 7,771   |  
|                 
|                 
|                 
|                 
|Net income (loss) |  |                         | 7,586   |          |  |         | 8,022   |            |  |   | 2,400   |  |  |   | (7,706  | )

|                  |  |                         |         |          |  |         |         |            |  |   |         |  |  |   |         | 
|----------------- |  | ----------------------- | ------- | -------- |  | ------- | ------- | ---------- |  | - | ------- |  |  | - | ------- | 
|                  |  | Three Months Ended 1999
|                  |  |                        
|                  |  | January 31              |         | April 30 |  | July 31 |         | October 31
|                  |  |                         |         |          |  |         |         |           
|                  |  | (Dollars in thousands) 
|                 
|Net sales         |  | $                       | 110,277 |          |  | $       | 139,115 |            |  | $ | 143,086 |  |  | $ | 139,191 | 
|                 
|                 
|                 
|                 
|Gross margin      |  |                         | 8,413   |          |  |         | 17,263  |            |  |   | 23,691  |  |  |   | 14,132  | 
|                 
|                 
|                 
|                 
|Net income (loss) |  |                         | (3,383  | )        |  |         | 615     |            |  |   | 6,491   |  |  |   | 2,140   | 

During the three months ended January 31, 1999, the Company recognized an
income tax benefit of $4,558,000 as a result of the subchapter S election
described in Note 1(g). During the three months ended October 31, 2000 and
1999 the Company recorded a (charge) benefit of ($2,060,000) and $5,662,000,
respectively, under the LIFO inventory valuation method. In addition, during
the three months ended January 31, 2000 and October 31, 1999, the Company
recorded a gain of $2,842,000 and

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$5,046,000, respectively, as a result of an agreement with the USWA, which
permits the Company to pay certain medical benefits from assets in a trust
previously restricted for other benefits.

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INDEPENDENT AUDITORS REPORT

To the Shareholder and Board of Directors
WCI Steel, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of WCI Steel,
Inc. and subsidiaries (a wholly-owned subsidiary of Renco Steel Holdings, Inc.)
as of October 31, 2000 and 1999, and the related consolidated statements of
income, shareholders equity (deficit), and cash flows for each of the years in
the three-year period ended October 31, 2000. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of WCI Steel,
Inc. and subsidiaries as of October 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended October 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.

|                                 
|---------------------------------
|/S/ KPMG LLP                     
|                                 
|KPMG LLP                         
|                                 
|Cleveland, Ohio
November 29, 2000

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING                AND FINANCIAL DISCLOSURE

None.

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##### Table of Contents






PART III




ITEM 10. DIRECTORS AND OFFICERS

The following table sets forth certain information regarding the directors
and executive officers of the Company:

|                  |  |     |  |                                                    
|----------------- |  | --- |  | ---------------------------------------------------
|Name              |  | Age |  | Position                                           
|                  |  |     |  |                                                    
|Ira Leon Rennert  |  | 66  |  | Chairman of the Board and Director                 
|Edward R. Caine   |  | 62  |  | President and Chief Executive Officer              
|Patrick G. Tatom  |  | 50  |  | Executive Vice President                           
|David A. Howard   |  | 41  |  | Vice President, Commercial                         
|John P. Jacunski  |  | 35  |  | Vice President, Finance and Chief Financial Officer
|Patrick T. Kenney |  | 60  |  | Vice President, Operations                         
|Brian J. Mitchell |  | 56  |  | Vice President, Environmental and Engineering      

Ira Leon Rennert has been Chairman, Chief Executive Officer and principal
shareholder of WCIs indirect parent company, Renco (including predecessors),
since Rencos first acquisition in 1975, and Chairman of WCI since its
formation in 1988. Renco holds controlling interests in a number of
manufacturing and mining concerns operating in businesses not competing with
WCI, including Renco Metals, Inc., AM General Corporation, The Doe Run
Resources Corporation, and Renco Steel Holdings, Inc.,
(WCIs parent company), for all of which he serves as a Director. Mr. Rennert also serves as a Director of Lodestar Holdings, Inc. in which he holds a controlling interest.

Edward R. Caine has been President and Chief Executive Officer since April
1, 1996. Mr. Caine was a Director of the Company from April 1, 1996 through
December 16, 1996. Prior to joining WCI, Mr. Caine had 37 years of experience
in the steel industry with U.S. Steel, most recently as General Manager of U.S.
Steels Fairfield, Alabama integrated steel operations from April 1991 to March
1996.

Patrick G. Tatom has served as Executive Vice President since June 1, 1999
and as Vice President, Commercial from November 1995 to May 1999, Vice
President, Sales from February 1994 through October 1995, and General Manager
of Sales from September 1988 to February 1994.

David A. Howard has served as Vice President, Commercial since June 1,
1999 and as Vice President, Sales from August 1998 through May 1999. Mr.
Howard, who has been with the company since its inception in 1988, has held
various positions within the Company, including Marketing Manager, Regional
Sales Manager and General Manager of Sales.

John P. Jacunski has served as Vice President, Finance and Chief Financial
Officer since November 1, 1999 and as Controller from May 1995 to October 1999.
Prior to joining WCI, Mr. Jacunski was a manager with the accounting and
consulting firm of KPMG LLP and had been with that firm in various capacities
from September 1988 through April 1995.

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Patrick T. Kenney has served as Vice President, Operations since June 1994
and, prior to that, as General Superintendent of Finishing Operations of WCI
since its inception.

Brian J. Mitchell has served as Vice President, Environmental and
Engineering since June 1, 1999 and, prior to that, as General Superintendent of
Primary Operations of WCI since its inception.

Since December 16, 1996, Mr. Rennert has been the sole Director of the
Company.

The sole director of the Company serves at the pleasure of the Companys
sole shareholder, Renco Steel Holdings, Inc., for an unspecified term. The
executive officers of the Company serve at the pleasure of the Companys sole
director for an unspecified term.

40



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##### Table of Contents






ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation of
the named executive officers by the Company for services rendered to it in all
capacities during fiscal 2000, 1999 and 1998:

|                     |                                       |      |        |        |  |       |                            |             |                        |   |         |         |      |   |           |         |  |   |           |           | 
|-------------------- | ------------------------------------- | ---- | ------ | ------ |  | ----- | -------------------------- | ----------- | ---------------------- | - | ------- | ------- | ---- | - | --------- | ------- |  | - | --------- | --------- | 
|                     |                                       |      |        |        |  |       | Summary Compensation Table
|                     |                                       |      |        |        |  |       |                           
|                     |                                       |      |        |        |  |       | Annual Compensation (1)    |             | Long Term Compensation
|                     |                                       |      |        |        |  |       |                            |             |                       
|                     |                                       |      | Fiscal |        |  |       |                            |             |                        |   |         |         | LTIP |   | All Other
|Name and Position    |                                       | Year |        | Salary |  | Bonus |                            | Payouts (2) | Compensation (3)      
|                     |                                       |      |        |        |  |       |                            |             |                        |  
|Ira Leon Rennert (4) |                                       |      | 2000   |        |  |       |                           |             |                        |   |        |         |      |   |          |         |  | $ | 1,200,000 |          
|                    
|                    
|                    
|                    
|                     | Chairman of the Board                 |      |        | 1999   |  |       |                            |            |                        |   |         |        |      |   |           |        |  |   |           | 1,200,000 | 
|                    
|                    
|                    
|                    
|                     |                                       |      | 1998   |        |  |       |                           |             |                        |   |        |         |      |   |          |         |  |   | 1,200,000 |          
|                    
|Edward R. Caine      |                                       |      | 2000   |        |  | $     | 261,883                    |             |                        | $ | 100,000 |         |      | $ | 378,200   |         |  | $ | 19,500    |          
|                    
|                    
|                    
|                    
|                     | President and Chief Executive Officer |      |        | 1999   |  |       |                            | 261,425     |                        |   |         | 100,000 |      |   |           | 107,500 |  |   |           | 20,000    | 
|                    
|                    
|                    
|                    
|                     |                                       |      | 1998   |        |  |       | 259,133                    |             |                        |   | 100,000 |         |      |   | 597,500   |         |  |   | 20,000    |          
|                    
|Patrick G. Tatom     |                                       |      | 2000   |        |  | $     | 146,792                    |             |                        | $ | 50,000  |         |      | $ | 151,280   |         |  | $ | 14,103    |          
|                    
|                    
|                    
|                    
|                     | Executive Vice President              |      |        | 1999   |  |       |                            | 131,067     |                        |   |         | 50,000  |      |   |           | 43,000  |  |   |           | 12,501    | 
|                    
|                    
|                    
|                    
|                     |                                       |      | 1998   |        |  |       | 131,067                    |             |                        |   | 50,000  |         |      |   | 239,000   |         |  |   | 12,501    |          
|                    
|Dave A. Howard       |                                       |      | 2000   |        |  | $     | 130,498                    |             |                        | $ | 50,000  |         |      | $ | 151,280   |         |  | $ | 10,938    |          
|                    
|                    
|                    
|                    
|                     | Vice President, Commercial            |      |        | 1999   |  |       |                            | 114,551     |                        |   |         | 40,000  |      |   |           | 21,500  |  |   |           | 8,253     | 
|                    
|                    
|                    
|                    
|                     |                                       |      | 1998   |        |  |       | 99,168                     |             |                        |   | 40,000  |         |      |   | 10,542    |         |  |   | 6,981     |          
|                    
|John P. Jacunski     |                                       |      | 2000   |        |  | $     | 127,317                    |             |                        | $ | 50,000  |         |      | $ | 151,280   |         |  | $ | 7,813     |          
|                    
|                    
|                    
|                    
|                     | Vice President, Finance and Chief     |      |        | 1999   |  |       |                            | 106,961     |                        |   |         | 27,908  |      |   |           | 2,213   |  |   |           | 6,564     | 
|                    
|                    
|                    
|                    
|                     | Financial Officer                     |      |        | 1998   |  |       |                            | 87,910      |                        |   |         | 15,462  |      |   |           | 10,542  |  |   |           | 5,395     | 
|                    
|Patrick T. Kenney    |                                       |      | 2000   |        |  | $     | 143,168                    |             |                        | $ | 50,000  |         |      | $ | 151,280   |         |  | $ | 17,720    |          
|                    
|                    
|                    
|                    
|                     | Vice President, Operations            |      |        | 1999   |  |       |                            | 132,567     |                        |   |         | 50,000  |      |   |           | 43,000  |  |   |           | 16,413    | 
|                    
|                    
|                    
|                    
|                     |                                       |      | 1998   |        |  |       | 132,567                    |             |                        |   | 50,000  |         |      |   | 43,000    |         |  |   | 16,413    |          



---

|(1) |  | Value of perquisites and other personal benefits did not exceed the
lesser of $50,000 or 10% of total salary and bonus per named executive
officer.                                                                                                                                                                                                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | The amounts shown as LTIP Payouts in the table for each named executive
officer represent contractual payments under such officers Net Worth
Appreciation Agreement which provides that the executive officers receive
a fixed percentage of any dividend paid by the Company. See Net Worth
Appreciation Agreements.                                                                                        
|   
|   
|   
|   
|(3) |  | The other compensation shown, except for Mr. Rennert for all periods (See
note 4) consists of WCI contributions to a defined contribution pension
plan.                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(4) |  | Mr. Rennert receives no compensation directly from WCI. He is Chairman of
the Board and the principal stockholder of Renco which receives a
management fee from WCI pursuant to a Management Consultant Agreement. The
amounts shown as all other compensation to Mr. Rennert are the management
fees paid by WCI to Renco for each fiscal year. See Stock Ownership and
Certain relationships and Transactions.

Net Worth Appreciation Agreements

The named executive officers (with the exception of Mr. Rennert) and one
other individual are each parties to Net Worth Appreciation Agreements with the
Company, pursuant to which each earns as deferred compensation a fixed
percentage, ranging from 1.25% to 5%, of cumulative net income, as defined,
during the term of their employment as executive officers. Assuming all of the
Companys named executive officers had retired at October 31, 2000 and their
respective maximum percentage had vested, an aggregate of $3,298,000 would have
been payable to such executive officers pursuant to the Net Worth Appreciation
Agreements.

41



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##### Table of Contents



The Net Worth Appreciation Agreements also provide that in the event of
payment of a dividend, the active participants are entitled to receive a
percentage of the dividend equal to their full net worth percentage under their
agreement. In the event substantially all the assets of the Company are sold,
active participants are deemed to be vested and are entitled to receive a
payment equal to their percentage of the net proceeds of the sale as defined in
the agreements. The agreements also provide for payments in the event of
permanent disability or death.

Active participants are entitled to receive the balance of the vested
amount earned under their Net Worth Appreciation Agreement in 40 equal
quarterly payments commencing upon the earlier of age 62 or twenty years after
the date the participant was first employed by the Company. Receipt by each
employee of his payment is conditioned on his observance of his confidentiality
and non-compete agreement with the Company.

42



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##### Table of Contents






ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of December 15, 2000
regarding the beneficial ownership of Common Stock by each beneficial owner of
5% or more of the Common Stock, each director and each named executive officer
of the Company during the last fiscal year, and by all directors and executive
officers of the Company as a group. Except as otherwise noted, and subject to
certain terms and conditions in the Renco Steel indenture and the related
pledge agreement, the persons named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by
them.

Beneficial Ownership
as of December 15, 2000

|                                                                                                |  |              |     |         |  |  |       |  
|----------------------------------------------------------------------------------------------- |  | ------------ | --- | ------- |  |  | ----- | -
|Name of Beneficial Owners and Address                                                           |  | Shares of   
|of 5% Beneficial Owners                                                                         |  | Common Stock |     | Percent
|                                                                                                |  |              |     |        
|                                                                                               
|Renco Steel Holdings, Inc1040 Pine
Avenue, S.E.Warren, OH 44483                                 |  |              | 100 |         |  |  | 100.0 | %
|                                                                                               
|The Renco Group, Inc.(1)30 Rockefeller
Plaza, Suite 4225New York, NY 10112                      |  |              | 100 |         |  |  | 100.0 | %
|                                                                                               
|Ira Leon Rennert (1)c/o The Renco
Group, Inc.30 Rockefeller Plaza, Suite 4225New York, NY 10112 |  |              | 100 |         |  |  | 100.0 | %
|                                                                                               
|All directors and executive officers as a
group(7 persons)                                      |  |              | 100 |         |  |  | 100.0 | %



---

|(1) |  | Renco is deemed to beneficially own the Common Stock of the Company owned
by Renco Steel due to the ownership by Renco of all the outstanding shares
of Common Stock of Renco Steel, and Mr. Rennert is deemed to beneficially
own the Common Stock of the Company deemed owned by Renco due to the
ownership through trusts established by him for himself and members of his
family of all of the outstanding Common Stock of Renco.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

By virtue of Renco Steels ownership of all the outstanding shares of
Common Stock of WCI and Rencos ownership of all the outstanding shares of
Common Stock of Renco Steel, and Mr. Rennerts ownership of all the Common
Stock of Renco, Mr. Rennert is in position to control actions that require the
consent of a majority of the holders of the Companys outstanding shares of
Common Stock, including the election of the Board of Directors.

43



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##### Table of Contents






ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Under a Management Consultant Agreement, effective October 1, 1992, as
amended, between Renco and WCI, WCI pays a monthly fee of $100,000 to Renco.
The Management Consultant Agreement provides that WCI shall not make any
payment thereunder which would violate any of its agreements with respect to
any of its outstanding indebtedness. The Management Consultant Agreement
extends to October 31, 2001 and thereafter shall continue for additional terms
of three years each unless sooner terminated by either party by giving six
months prior written notice. In the year ended October 31, 2000, WCI incurred
management fees in the amount of $1,200,000. The Company believes that the
cost of obtaining the type and quality of services rendered by Renco under the
Management Consultant Agreement was, and continues to be, no less favorable
than that at which the Company could obtain such services from unaffiliated
entities.

Under the terms of a tax sharing agreement, between WCI and Renco Steel,
income taxes are allocated to WCI on a separate return basis except that
transactions for the purchase of goods and services between WCI and its
subsidiaries and Renco and its other subsidiaries are accounted for on a cash
basis rather than on an accrual basis and WCI does not receive the benefit of
net operating tax loss carryforwards, unless such tax losses were generated by
the net tax timing differences between WCIs financial reporting and tax return
treatment in calculating the allocation of income taxes. Renco Steel has
agreed to indemnify WCI for any tax imposed on or paid by WCI in excess of the
amount payable by WCI and its subsidiaries under the tax sharing agreement. On
January 15, 1999 Renco elected subchapter S tax treatment effective November 1,
1998. At the same time, Renco elected for the Company to be treated as a
qualified subchapter S subsidiary (QSSS). While in this status, the activity
within the tax sharing agreement will be applicable only to prior years audit
adjustments and/or current and future year state filings where QSSS is not
recognized and multiple Renco subsidiaries operate.

To obtain the advantages of volume, Renco purchases certain insurance
coverage for its subsidiaries, including the Company, and the actual cost of
such insurance, without markup, is reimbursed by the covered subsidiaries. The
major areas of the Companys insurance coverage obtained under the Renco
programs are property, business interruption, general, product and auto
liability, workers compensation (other than Ohio for which the Company is self
insured) and casualty umbrella. The premiums for director and officer,
fidelity, fiduciary, property, business interruption, and casualty umbrella are
allocated by Renco substantially as indicated in the underlying policies.
General and product liability, auto liability and workers compensation
coverage (excluding the Ohio self-insured program) are loss sensitive programs
with both fixed and variable premium components. The fixed premium
component for this coverage is allocated to each insured Renco subsidiary based
on factors that include historical guaranteed cost premium, the overall growth
of each subsidiary and an assessment of risk based on loss experience. The
fixed component is subject to revision resulting from the insurance carriers
audit of actual premium factors. As claims (the variable component) are paid,
each insured within the loss sensitive program is charged for its claims up to
a maximum amount and subject to an overall maximum for all insured
subsidiaries. Each insured Renco subsidiary has been assigned an individual
maximum cost based on historical guaranteed cost premiums. The overall and
individual subsidiary maximums are subject to revision based on audit of actual
premium factors. If an insured Renco subsidiary reaches its individual maximum
cost, the other insured subsidiaries are required to share proportionately in
the excess cost of the subsidiary which has reached its individual maximum.
WCI has not been required to make any payments under this provision in 2000.

In fiscal 2000, the Company incurred costs of approximately $2.0 million
under the Renco insurance program. The Company believes that its insurance
costs under this program were less than it would have incurred if it had
obtained its insurance directly.

44



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##### Table of Contents



During 2000, the Company purchased approximately $0.9 million of zinc and other
alloys from Doe Run Peru S.R. Ltd., an indirect subsidiary of Renco. The
Company believes that such purchases were on an arms length basis at a price
no less favorable than at which the Company could obtain from unaffiliated
entities.

45



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##### Table of Contents






ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K

(a) Documents Filed as a Part of This Report.

1. Consolidated Financial Statements.

The consolidated financial statements listed below together with the
report thereon of the independent auditors dated November 29, 2000, are
included in this report for ITEM 8. and is incorporated by reference herein.



| | Consolidated Balance Sheets at
October 31, 2000 and 1999.
| | ---------------------------------------------------------



| | Consolidated Statements of Income for the fiscal years ended October 31, 2000, 1999 and 1998.
| | ---------------------------------------------------------------------------------------------



| | Consolidated Statements of Shareholders Equity (Deficit) for the fiscal years ended October 31, 2000, 1999 and 1998.
| | ---------------------------------------------------------------------------------------------------------------------



| | Consolidated Statements of Cash Flows for the fiscal years ended October 31, 2000, 1999 and 1998.
| | -------------------------------------------------------------------------------------------------



| | Notes to Consolidated Financial Statements.
| | -------------------------------------------



| | Independent Auditors Report.
| | -----------------------------

2. Financial Statement Schedule.



| | Independent Auditors Report on Financial Statement Schedule.
| | -------------------------------------------------------------



| | Schedule II Valuation and Qualifying Accounts.
| | -----------------------------------------------

3. Exhibits Required to be Filed by Item 601 of Regulation S-K.



| | The information called for by this paragraph is contained in the Exhibit Index of this report which is incorporated herein by reference.
| | ----------------------------------------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K.

During the three months ended October 31, 2000 the company filed a Form 8-K on
September 20, 2000, which is incorporated herein by reference.

46



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##### Table of Contents






INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENT SCHEDULE

To the Shareholder and Board of Directors
WCI Steel, Inc. and Subsidiaries:

Under date of November 29, 2000, we reported on the consolidated balance
sheets of WCI Steel, Inc. and subsidiaries as of October 31, 2000 and 1999, and
the related consolidated statements of income, shareholders equity (deficit),
and cash flows for each of the years in the three-year period ended October 31,
2000, which are contained as part of this report herein. In connection with
our audits of the aforementioned consolidated financial statements, we also
audited the related financial statement schedule (Schedule II Valuation and
Qualifying Accounts) also contained as part of this report herein. This
financial statement schedule is the responsibility of the Companys management.
Our responsibility is to express an opinion on the financial statement
schedule based on our audits.

In our opinion, the related financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

|                                 
|---------------------------------
|/S/ KPMG LLP                     
|                                 
|KPMG LLP                         
|                                 
|Cleveland, Ohio
November 29, 2000

47



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##### Table of Contents



WCI STEEL, INC. AND SUBSIDIARIES
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
Allowance for Doubtful Accounts
For the Years Ended October 31, 2000, 1999, and 1998.
(Dollars in Thousands)

|                                     |  |            |       |             |  |            |      |                |  |            |   |     |  |   |     |   |  |   |     |  |  |  |  | 
|------------------------------------ |  | ---------- | ----- | ----------- |  | ---------- | ---- | -------------- |  | ---------- | - | --- |  | - | --- | - |  | - | --- |  |  |  |  | 
|                                     |  |            |       |             |  | Additions 
|                                     |  | Balance at |       |             |  |            |      |                |  | Balance at
|                                     |  | Beginning  |       | Charged to  |  | Charges to |      |                |  |            |   | End
|CLASSIFICATION                       |  | of Year    |       | Expense (b) |  | Other      |      | Deductions (c) |  | of Year   
|                                     |  |            |       |             |  |            |      |                |  |           
|ALLOWANCE FOR DOUBTFUL ACCOUNTS (a): | 
|                                    
|                                    
|                                    
|                                    
|Year ended October 31, 2000          |  | $          | 874   |             |  | $          | 37   |                |  |            |  |     |  | $ | 161 |   |  | $ | 750 | 
|                                    
|                                    
|                                    
|                                    
|Year ended October 31, 1999          |  |            | 904   |             |  |            | (84  | )              |  |            |  |     |  |   | (54 | ) |  |   | 874 | 
|                                    
|                                    
|                                    
|                                    
|Year ended October 31, 1998          |  |            | 1,627 |             |  |            | (475 | )              |  |            |  |     |  |   | 248 |   |  |   | 904 | 



---

|(a) |  | Allowance for doubtful accounts is shown as a reduction of accounts
receivable in the Companys Consolidated Financial Statements.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Charges (credits) to expense for the provision for doubtful accounts.                                                             
|   
|   
|   
|   
|(c) |  | Net of trade receivables written-off and recoveries of prior year writeoffs.                                                      



48



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on the 15th day of
December 2000.

WCI STEEL, INC.

|    |  |                               |                                                      
|--- |  | ----------------------------- | -----------------------------------------------------
|By: |  | /S/           EDWARD R. CAINE
|    |  |                               | Edward R. Caine
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 15th day of December 2000.

| |  |                                |                                                                                                                  
| |  | ------------------------------ | -----------------------------------------------------------------------------------------------------------------
| |  | /S/           IRA LEON RENNERT
| |  |                                | Ira Leon Rennert
Chairman of the Board and Director                                                              
|
| |  | /S/           EDWARD R. CAINE 
| |  |                                | Edward R. Caine
President and Chief Executive Officer
(principal executive officer)                              
|
| |  | /S/           JOHN P. JACUNSKI
| |  |                                | John P. Jacunski
Vice President, Finance and Chief Financial Officer
(principal financial and accounting officer)

Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.

No annual report to security holders covering the registrants last fiscal
year and no proxy statement, form of proxy or other proxy soliciting material
with respect to any annual or other meeting of security holders has been or
will be sent to security holders.

49



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##### Table of Contents






Exhibit Index

|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT       
|NO.            |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|              
|3.1            |  | Articles of Incorporation of the Registrant, filed April 13, 1998 and Articles of
Amendment filed May 18, 1988, July 15, 1988, November 29, 1991,
December 14, 1993 and July 13, 1994.(4)                                                                                                                                                                                                                                                                                                                                       
|              
|3.2            |  | Code of Regulations of the Registrant, as amended December 16, 1996.(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|              
|4.1            |  | Indenture, dated as of December 14, 1993, among Renco Steel, Inc. (which
subsequently was merged into the Registrant), as issuer, the Registrant, as guarantor,
and Shawmut Bank Connecticut, National Association (now known as Fleet
National Bank), as trustee, relating to the 10 1/2% Senior Notes Due
2002, Series A and the 10 1/2% Senior Notes Due 2002, Series B of the
Registrant containing, as exhibits, specimens of the Series A Senior
Notes and Series B Senior Notes).(2)                                     
|              
|4.1.1          |  | First Supplemental Indenture to the indenture, dated as of December 14,
1993, among Renco Steel, Inc. (which subsequently was merged into the
Registrant), as issuer, the Registrant, as guarantor, and Shawmut Bank
Connecticut, National Association (now known as Fleet National Bank), as
trustee, relating to the 10 1/2% Senior Notes Due 2002, Series A and the
10 1/2% Senior Notes Due 2002, Series B of the Registrant (containing, as
exhibits, specimens of the Series A Senior Notes and Series B Senior Notes).(2)
|              
|4.1.2          |  | Second Supplemental Indenture to the indenture, dated as of November 27,
1996, among WCI Steel, Inc., as issuer, and Fleet National Bank (formerly
known as Shawmut Bank Connecticut, National Association) as trustee,
relating to the 10 1/2% Senior Notes Due 2002, Series A and the 10 1/2%
Senior Notes Due 2002, Series B of the Registrant (containing, as
exhibits, specimens of the Series A Senior Notes and Series B Senior Notes).(5)                                                                               
|              
|4.2            |  | Indenture, dated as of November 27, 1996, between the Registrant, as
issuer, and Fleet National Bank, as trustee, relating to the 10% Senior
Secured Notes due 2004, Series A, and the 10% Senior Secured Notes due
2004, Series B of the Registrant (containing, as exhibits, specimens of
the Series A Senior Secured Notes and Series B Senior Secured Notes).(5)                                                                                                                                                            
|              
|10.1 to 10.2.8 |  | [Intentionally Omitted]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|              
|10.2.9         |  | Net Worth Appreciation Agreement, effective June 1, 1999, between the Registrant and John P. Jacunski. (7)                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.2.10        |  | Amended and Restated Net Worth Appreciation Participation Agreement, as of January 15, 1999, Between the Registrant and Edward R. Caine.(9)                                                                                                                                                                                                                                                                                                                                                                                     
|              
|10.2.11        |  | Amended and Restated Net Worth Appreciation Participation Agreement, as of January 15, 1999, Between the Registrant and Patrick G. Tatom.(9)                                                                                                                                                                                                                                                                                                                                                                                    
|              
|10.2.12        |  | Amended and Restated Net Worth Appreciation Participation Agreement, as of January 15, 1999, Between the Registrant and Patrick T. Kenney.(9)                                                                                                                                                                                                                                                                                                                                                                                   
|              
|10.2.13        |  | Amended and Restated Net Worth Appreciation Participation Agreement, as of January 15, 1999, Between the Registrant and Brian J. Mitchell.(9)                                                                                                                                                                                                                                                                                                                                                                                   
|              
|10.2.14        |  | Amended and Restated Net Worth Appreciation Participation Agreement, as of January 15, 1999, Between the Registrant and David A. Howard.(9)                                                                                                                                                                                                                                                                                                                                                                                     
|              
|10.3           |  | Management Consultant Agreement, dated October 1, 1992, between
Registrant and The Renco Group, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                         
|              
|10.3.1         |  | Amendment No. 1, dated April 22, 1994, to Management Consultant Agreement.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                   

50



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                         
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT
|NO.     |  | DESCRIPTION                                                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                         
|       
|       
|       
|       
|10.4.11 |  | Intercreditor Agreement, dated November 27, 1996, between Fleet
National Bank and Congress Financial Corporation.(5)                                                                                                                                    
|       
|10.4.12 |  | Second Amended and Restated Loan and Security Agreement between
Registrant, its subsidiaries and Congress Financial Corporation dated July 30, 1999.(8)                                                                                                 
|       
|10.4.13 |  | Guarantee by Registrant, WCI Steel Production Control Services Inc.,
WCI Steel Metallurgical Services Inc. and Niles Properties, Inc. in favor
of Congress Financial Corporation and Security Pacific Business Credit,
Inc., dated October 31, 1997. (6)
|       
|10.4.14 |  | Guarantee by WCI Steel Production Control Services Inc., WCI Steel Metallurgical
Services Inc. and WCI Steel Sales L.P. in favor of Congress Financial
Corporation and Security Pacific Business Credit, Inc., dated October 31, 1997. (6)              
|       
|10.5.1  |  | Intercreditor Agreement, dated November 27, 1996, among Fleet National Bank,
Bank One Trust Company, N.A. and the Registrant.(5)                                                                                                                        
|       
|10.5.2  |  | Indemnification Agreement, dated as of November 27, 1996, between the Registrant
and Bank One Trust Company, N.A. (5)                                                                                                                                   
|       
|10.8    |  | Agreement, dated June 11, 1990, between the City of Youngstown, Ohio and
Youngstown Sinter Company (with UDAG Grant Agreement).(1)                                                                                                                      
|       
|21      |  | List of Subsidiaries of Registrant.(6)                                                                                                                                                                                                                  
|       
|27      |  | Financial Data Schedule.                                                                                                                                                                                                                                



---

|(1) |  | Incorporated by reference to the same-numbered exhibit filed with the
Companys Registration Statement on Form S-4, as amended (File No. 33-58648),
originally filed with the Commission on February 23, 1993.   
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Incorporated by reference to the same-numbered exhibit filed with the
Companys Registration Statement on Form S-4 (File No. 33-74108), filed with the
Commission on January 14, 1994.                           
|   
|   
|   
|   
|(3) |  | Incorporated by reference to same-numbered exhibit filed with the Companys
Pre-Effective Amendment No. 2 to Registration Statement on Form S-1 (File
No. 33-75722), filed with the Commission on April 28, 1994.
|   
|   
|   
|   
|(4) |  | Incorporated by reference to the Companys Form 10-K for the fiscal year
ended October 31, 1994 (File No. 1-13028).                                                                                              
|   
|   
|   
|   
|(5) |  | Incorporated by reference to same-numbered exhibit filed with the Companys Registration Statement on Form S-4, as amended (File No. 333-18019),
originally filed with the Commission on December 17, 1996.      
|   
|   
|   
|   
|(6) |  | Incorporated by reference to the Companys Form 10-K for the fiscal year
ended October 31, 1997 (File No. 333-18019).                                                                                            
|   
|   
|   
|   
|(7) |  | Incorporated by reference to the Companys Form 10-K for the fiscal year
ended October 31, 1999 (File No. 333-18019).                                                                                            
|   
|   
|   
|   
|(8) |  | Incorporated by reference to the Companys Form 10-Q for the quarterly
period ended July 31, 1999.                                                                                                               
|   
|   
|   
|   
|(9) |  | Incorporated by reference to the Companys Form 10-Q for the quarterly
period ended April 30, 2000.                                                                                                              

51