WHEELING PITTSBURGH CORP /DE/ - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarter ended September 30, 2004
OR


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-50300

WHEELING-PITTSBURGH CORPORATION

(Exact name of registrant as specified in its charter)


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

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

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

Yes x No o

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

Yes o No x

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

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

Yes x No o

The registrant had 14,053,908 shares of its common stock, par value $0.01 per share, outstanding as of October 31, 2004.

PART I — FINANCIAL INFORMATION

Item 1 — Financial Statements

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)


	Reorganized Company									Predecessor Company
	Quarter			Nine Months			Two Months			One Month			Seven Months
	Ended			Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			July 31,			July 31,
	2004			2004			2003			2003			2003
Revenues
Net sales, including sales to affiliates of $109,496, $271,702, $38,609, $23,092 and $164,273	$	401,800		$	1,032,127		$	159,789		$	81,298		$	570,439

Cost and expenses
Cost of products sold, excluding depreciation and amortization expense, including cost of products sold to affiliates of $91,238, $231,987, $34,656, $20,662 and $143,840		321,516			870,405			159,314			76,877			563,832
Depreciation and amortization expense		7,756			22,957			3,568			6,095			39,889
Selling, administrative and general expense		17,748			49,043			9,004			4,648			29,906
Reorganization and professional fee expense		—			—			—			1,995			8,140

Total costs and expenses		347,020			942,405			171,886			89,615			641,767

Operating income (loss)		54,780			89,722			(12,097	)		(8,317	)		(71,328	)
Interest expense and other financing costs		(4,392	)		(14,669	)		(3,891	)		(1,462	)		(9,185	)
Other income		4,859			12,524			757			382			3,228
Reorganization income (expense):
Fair value adjustments		—			—			—			(152,708	)		(152,708	)
Gain on discharge of indebtedness		—			—			—			557,541			557,541
Other		—			—			—			(4,918	)		(4,758	)

Income (loss) before income taxes		55,247			87,577			(15,231	)		390,518			322,790
Income tax provision (benefit)		19,657			31,555			6			(12	)		(641	)

Net income (loss)	$	35,590		$	56,022		$	(15,237	)	$	390,530		$	323,431

Earnings per share
Basic	$	3.53		$	5.78		$	(1.60	)		*			*
Diluted	$	3.42		$	5.63		$	(1.60	)		*			*
Weighted average shares (in thousands):
Basic		10,091			9,699			9,500			*			*
Diluted		10,393			9,946			9,500			*			*

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

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)


	September 30,			December 31,
	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	15,181		$	4,767
Trade receivables, less allowance for doubtful accounts of $2,814 and $2,061		167,414			104,025
Inventories		150,721			146,895
Prepaid expenses and deferred charges		14,229			11,583

Total current assets		347,545			267,270
Investment in affiliated companies		49,630			42,857
Property, plant and equipment, less accumulated depreciation of $32,320 and $10,051		458,529			387,765
Deferred income tax benefits		20,189			23,170
Restricted cash		32,218			87,138
Goodwill		—			30,000
Other intangible assets, less accumulated amortization of $1,108 and $423		8,390			9,076
Deferred charges and other assets		19,188			21,610

Total assets	$	935,689		$	868,886

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	63,630		$	76,108
Short-term debt		—			79,251
Payroll and employee benefits payable		50,718			57,862
Accrued federal, state and local taxes		10,428			10,744
Deferred income tax liabilities		19,955			23,170
Accrued interest and other liabilities		6,268			9,672
Long-term debt due in one year		31,505			2,698

Total current liabilities		182,504			259,505
Long-term debt		312,381			340,696
Other employee benefit liabilities		149,495			142,433
Other liabilities		20,212			21,639

Total liabilities		664,592			764,273

STOCKHOLDERS’ EQUITY
Common stock — $.01 Par value; 14,057,908 and 10,000,000 shares issued, 14,053,908 and 10,000,000 shares outstanding		141			100
Additional paid-in capital		258,471			149,901
Accumulated earnings (deficit)		17,092			(38,930	)
Deferred compensation		(4,547	)		(6,458	)
Treasury stock, 4,000 shares, at cost		(60	)		—

Total stockholders’ equity		271,097			104,613

Total liabilities and stockholders’ equity	$	935,689		$	868,886

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)


	Reorganized						Predecessor
	Company						Company
	Nine			Two			Seven
	Months Ended			Months Ended			Months Ended
	September 30,			September 30,			July 31,
	2004			2003			2003
Cash flows from operating activities
Net income (loss)	$	56,022		$	(15,237	)	$	323,431
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization expense		22,957			3,568			39,889
VEBA and profit sharing expense		21,332			—			—
Other postretirement benefits		46			(3,056	)		(1,565	)
Deferred income taxes (goodwill), including recognition of post reorganization benefit of $376 (see Note 14)		29,986			—			—
Equity income of affiliated companies, net of dividends		(7,998	)		(360	)		184
Loss on disposition of assets		6			—			—
Reorganization income		—			—			(400,075	)
Deferred compensation		1,851			417			—
Interest paid-in-kind		544			—			—
Changes in current assets and current liabilities:
Trade receivables		(63,389	)		(264	)		17,944
Inventories		(3,826	)		346			19,769
Trade payables		(12,201	)		(14,184	)		9,900
Other current assets		(2,646	)		(3,120	)		918
Other current liabilities		(23,648	)		(2,901	)		(306	)
Other assets and liabilities — net		8,158			1,907			(9,902	)

Net cash provided by (used in) operating activities		27,194			(32,884	)		187

Cash flows from investing activities
Capital expenditures		(93,053	)		(12,044	)		(2,866	)
Restricted cash used to fund capital expenditures		54,920			10,012			—
Proceeds from sale of assets		11			—			201
Payments from affiliates		1,225			—			600

Net cash used in investing activities		(36,897	)		(2,032	)		(2,065	)

Cash flows from financing activities
Borrowing of long-term debt		2,400			(666	)		(1,334	)
Repayment of long-term debt		(2,452	)		—			—
Net change in short-term debt		(79,251	)		36,200			—
Short term debt (DIP facility) borrowings		—			—			1,724
Book overdraft		(277	)		1,122			327
Issuance of common stock, net of issuance costs		99,697			—			—

Net cash provided by financing activities		20,117			36,656			717

Increase (decrease) in cash and cash equivalents		10,414			1,740			(1,161	)
Cash and cash equivalents at beginning of period		4,767			7,382			8,543

Cash and cash equivalents at end of period	$	15,181		$	9,122		$	7,382

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)
(in thousands)


			Additional						Accumulated
	Common		Paid-in			Deferred			Earnings			Treasury
	Stock		Capital			Compensation			(Deficit)			Stock			Total
Predecessor Company
Balance at December 31, 2002	$	—	$	335,138		$	—		$	(646,309	)	$	—		$	(311,171	)
Net income		—		—			—			323,431			—			323,431
Fresh start adjustment		—		(335,138	)		—			322,878			—			(12,260	)

Balances at July 31, 2003 (prior to issuance of stock at reorganization)	$	—	$	—		$	—		$	—		$	—		$	—

Reorganized Company
Issuance of stock at reorganization at July 31, 2003 (prior to restricted stock award)	$	95	$	142,405		$	—		$	—		$	—		$	142,500
Shares issued on July 31, 2003 for restricted stock award plans		5		7,495			(7,500	)		—			—			—
Compensation expense recognized		—		—			1,042			—			—			1,042
Stock option grants		—		1			—			—			—			1
Net loss		—		—			—			(38,930	)		—			(38,930	)

Balance at December 31, 2003		100		149,901			(6,458	)		(38,930	)					104,613
Shares issued on August 15, 2004		4		8,545			—			—			—			8,549
Shares issued on September 21, 2004		37		99,660			—			—			—			99,697
Realization of prereorganization deferred tax assets		—		362			—			—			—			362
Restricted stock forfeiture		—		—			60			—			(60	)		—
Compensation expense recognized		—		—			1,851			—			—			1,851
Stock option grants		—		3			—			—			—			3
Net income		—		—			—			56,022			—			56,022

Balance at September 30, 2004	$	141	$	258,471		$	(4,547	)	$	17,092		$	(60	)	$	271,097

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The condensed consolidated financial statements of Wheeling-Pittsburgh Corporation and subsidiaries (WPC or the Company) are unaudited. In the opinion of management, these financial statements reflect all recurring adjustments necessary to present fairly the consolidated financial position of the Company and the results of its operations and the changes in its cash flows for the periods presented.

These financial statements, including notes thereto, have been prepared in accordance with applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. The results reported in these financial statements may not be indicative of the results that may be expected for the entire year. This Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2003.

The Company emerged from bankruptcy effective August 1, 2003 (see Note 2), and applied fresh start reporting as of July 31, 2003. As a result, amounts reported in the financial statements for the one month ended July 31, 2003 and for the seven months ended July 31, 2003 relate to the Company prior to its reorganization and the application of fresh start reporting. Amounts for these periods are referred to as being applicable to the “Predecessor Company”. Amounts for periods subsequent to the reorganization of the Company are referred to as being applicable to the “Reorganized Company”. Due to the application of fresh start reporting as of July 31, 2003, amounts reported for the predecessor company and the reorganized company are not comparable and have been separated by a black line in the financial statements.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

2. Bankruptcy and Reorganization

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

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

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

common stock, par value $0.01 per share, and 20 million shares of undesignated preferred stock, par value $0.001 per share.

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

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

• WPC cancelled all shares of its common stock that existed prior to the implementation of the plan of reorganization, at which point it ceased to be a subsidiary of WHX Corporation.

• WPSC entered into a new $250 million senior secured term loan facility, which is guaranteed in part by the Emergency Steel Loan Guarantee Board, the West Virginia Housing Development Fund, WPC and WP Steel Venture Corporation, a wholly-owned subsidiary of WPC, and is collateralized by a first lien on its tangible and intangible assets (other than accounts receivable and inventory) and its equity interests in its joint ventures and a second lien on its accounts receivable and inventory. WPSC also entered into a new $225 million senior secured revolving credit facility, which is guaranteed by WPC and WP Steel Venture Corporation and is collateralized by a first lien on its accounts receivable and inventory and a third lien on its other tangible and intangible assets and its equity interests in its joint ventures and pledged stock of its subsidiaries.

• All of the obligations under the Company’s $195 million debtor-in-possession credit facility were satisfied in full and discharged.

• WPC and WPSC entered into an agreement with WHX Corporation providing for, among other things, a $10 million capital contribution by WHX Corporation, the capitalization of approximately $40 million in debt owed by the Company to WHX Corporation, a $10 million unsecured loan from WHX Corporation and an agreement with WHX Corporation, the Pension Benefit Guaranty Corporation (PBGC), and the United Steelworkers of America (USWA), with respect to the Company’s separation from WHX Corporation’s employee pension plan.

• WPC and WPSC entered into an agreement with its unionized employees represented by the USWA which modified the existing labor agreement to provide for, among other things, future pension arrangements with the USWA and reductions in the Company’s employee-related costs.

• WPC issued 4,000,000 shares of new common stock constituting 40% thereof for the benefit of USWA retirees in satisfaction of certain claims under its labor agreement and an additional 1,000,000 shares of its new common stock constituting 10% thereof to or for the benefit of the Company’s salaried employees.

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

monies. As of September 30, 2004, approximately 59,456 shares of common stock issued pursuant to the plan of reorganization were reserved for distribution to creditors pending resolution of certain disputed claims. If those claims are ultimately allowed in whole or in part by the Bankruptcy Court, the appropriate amount of stock will be distributed to those claimants; if the claims are disallowed, the stock will be distributed to other creditors of the same class, pro rata. To the extent that certain administrative and secured claims are allowed by the Bankruptcy Court, those claims will be paid in cash, in an amount which we expect will not exceed $100,000 and for which there are sufficient reserves held by the distribution agent. If and to the extent those claims are allowed as pre-petition unsecured claims, then those creditors will receive stock, which has been reserved as described above. In addition, the Company is the plaintiff in a number of preference actions, where it is seeking to recover monies from creditors. The Company does not believe that any of these remaining bankruptcy proceedings, individually or in the aggregate, will have a material adverse effect on the Company.

3. Fresh Start Reporting

In accordance with Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (SOP 90-7), the Company adopted the provisions of fresh start reporting as of July 31, 2003. In adopting the requirements of fresh start reporting, the Company made a determination of the enterprise value of the entity based upon various valuation methods, including discounted cash flow methodologies, analysis of comparable steel companies, and other applicable ratios and economic industry information relevant to the operations of the Company. The estimated total equity value of the reorganized company aggregating approximately $150 million was determined after taking into account the values of the obligations assumed in connection with the Joint Plan of Reorganization.

The following reconciliation of the predecessor company’s consolidated balance sheet as of July 31, 2003 to that of the reorganized company as of July 31, 2003 was prepared with the adjustments that give effect to the reorganization and fresh start reporting.

The adjustments entitled “Reorganization Adjustments” reflect the consummation of the Joint Plan of Reorganization, including the elimination of existing liabilities subject to compromise, and consolidated shareholders’ deficit, and to reflect the aforementioned $150 million equity value.

The adjustments entitled “Fresh Start Adjustments” reflect the adoption of fresh start reporting, including the adjustments to record property and equipment at its fair value.


	Pre-Reorganization		Reorganization				Fresh Start				Post-Reorganization
	7/31/2003		Adjustments				Adjustments				7/31/2003
	(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	7,382	$	—			$	—			$	7,382
Trade receivables, less allowance for doubtful accounts of $1,916		112,649		(233	)			—				112,416
Inventories		164,322		—				(9,658	)	[d]		154,664
Prepaid expenses and deferred charges		6,559		12				—				6,571

Total current assets		290,912		(221	)			(9,658	)			281,033
Investment in affiliated companies		59,982		—				(19,505	)	[d]		40,477
Property, plant and equipment less accumulated depreciation		493,514		—				(133,301	)	[d]		360,213
Deferred income tax benefits		27,342		(3,860	)	[b]		—				23,482
Restricted cash		—		112,000		[a]		—				112,000
Goodwill		—		30,000		[g]		—				30,000
Deferred charges and other assets		8,964		12,844		[g]		9,756		[g]		31,564

Total assets	$	880,714	$	150,763			$	(152,708	)		$	878,769

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)


	Pre-Reorganization			Reorganization				Fresh Start				Post-Reorganization
	7/31/2003			Adjustments				Adjustments				7/31/2003
	(Dollars in thousands)
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Trade payables	$	81,275		$	(1,334	)	[a]	$	—			$	79,941
Short-term debt		137,214			(100,299	)	[a]		—				36,915
Payroll and employee benefits payable		35,118			32,795		[c]		—				67,913
Accrued federal, state and local taxes		10,054			1,200		[a],[c]		—				11,254
Deferred income tax liabilities		27,342			(3,860	)	[a],[c]		—				23,482
Accrued interest and other liabilities		8,026			2,647		[a],[c]		—				10,673
Long-term debt due in one year		43,433			(39,678	)	[a],[c],[f]		—				3,755

Total current liabilities		342,462			(108,529	)			—				233,933
Long-term debt		11,985			327,863		[a],[c]		—				339,848
Other employee benefit liabilities		17,317			124,981		[c]		—				142,298
Other liabilities		17,150			3,040		[a],[c]		—				20,190
Liabilities subject to compromise		879,455			(879,455	)	[c]		—				—

Total liabilities		1,268,369			(532,100	)			—				736,269
STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock — $.01 Par Value; 10 million shares issued and outstanding		—			100		[c]		—				100
Additional paid-in capital		335,138			149,900		[c],[g]		(335,138	)	[d]		149,900
Deferred compensation		—			(7,500	)	[e]		—				(7,500	)
Accumulated earnings (deficit)		(722,793	)		540,363		[b],[c],[f]		182,430		[d]		—

Total stockholders’ equity (deficit)		(387,655	)		682,863				(152,708	)			142,500

Total liabilities and stockholders’ equity	$	880,714		$	150,763			$	(152,708	)		$	878,769

Footnotes:

[a] Reflects the borrowing of the $250 million term loan proceeds and amounts under the post-petition revolver and the payments necessary to effect the Plan of Reorganization, such as the repayment of DIP facilities, cash distributions to creditors and the payment of fees and expenses associated with the exit financing.

[b] Reflects the impact on retained earnings of reorganization expenses net of tax benefit.

[c] Reflects the settlement of liabilities subject to compromise, including the distribution of cash, notes and equity to the pre-petition creditors, the assumption of OPEB and other pre-petition liabilities (capital leases, employee benefits, taxes) and the cancellation of debt income.

[d] Reflects the adjustments to reflect “Fresh Start” reporting. These entries include the write-down of inventories, property, plant and equipment and joint venture interests to their appraised values, elimination of accumulated deficits and additional paid-in capital.

[e] Reflects restricted stock awards for the distribution of employee equity into trust.

[f] Reflects the cancellation of debt as a result of WHX Corporation forgiving its portion of the DIP term loan.

[g] Reflects the pre-funding of VEBA obligations with 4,000,000 shares of the Company’s common stock, an intangible asset related to joint venture supply agreements and goodwill.

4. New Accounting Standards

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

In May 2004, the FASB issued FASB Staff Position (FSP) No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”. FSP 106-2 provides guidance on accounting for the effects of the new Medicare prescription drug legislation by employers whose prescription drug benefits are actuarially equivalent to the drug benefit under Medicare Part D. FSP 106-2 supercedes FSP 106-1 and is effective for the first interim or annual period beginning after June 15, 2004. As allowed by FSP 106-1, the Company elected to defer recognizing the effects of the new legislation. Based on a preliminary assessment and pending issuance of final guidance on determining actuarial equivalence, the Company cannot make a final determination as to whether its prescription drug benefits are actuarially equivalent of drug benefits under Medicare Part D. However, if the Company’s prescription drug benefits are finally determined to be actuarially equivalent to benefits under Medicare Part D, it is estimated that the effect on operations for the quarter and nine months ended September 30, 2004 will not be material.

The Company adopted FASB No. 132-R (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits an amendment of FASB Statements No. 87, 88, and 106” (FASB 132-R). FASB 132-R revises employers’ disclosures about pension plans and other postretirement benefit plans. It requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. Additionally, FASB 132-R requires public companies to make certain disclosures in their interim financial statements with respect to net periodic pension expense and contributions paid. The Company has provided the required interim disclosures in Note 9 to the condensed consolidated financial statements for their postretirement benefit plan. Due to the immaterial amounts related to the Company’s defined benefit pension plan, disclosure has not been provided.

5. Business Segment

The Company is primarily engaged in one line of business and has one industry segment, which is the making, processing and fabricating of steel and steel products. The Company’s products include hot rolled and cold rolled sheet and coated products such as galvanized, pre-painted and tin mill sheet. The Company also manufactures a variety of fabricated steel products including roll formed corrugated roofing, roof deck, form deck, floor deck, bridgeform and other products used primarily by the construction, highway and agricultural markets.

6. Sale of Scrap

Beginning in the third quarter of 2004, the Company sold all of its internally-generated scrap to a third party pursuant to a long-term scrap supply agreement. The internally-generated scrap sold to the third party is processed and resold to the Company as a part of the total scrap purchased by the Company under the long-term supply agreement. Revenue from the sale of internally-generated scrap to the third party is recorded as a reduction of cost of goods sold in the statement of operations.

7. Related Party Transactions

The Company owns a 35.7% interest in Wheeling-Nisshin, Inc. and a 50% interest in Ohio Coatings Company, both of which are accounted for using the equity method of accounting. During the quarter and nine months ended September 30, 2004, the Company had sales of $109.5 and $271.7 million to these entities, respectively. During the two months ended September 30, 2003, the Company had sales of $38.6 million to these entities. During the one month ended July 31, 2003, the Company had sales of $23.1 million to these entities. During the seven months ended July 31, 2003, the Company had sales of $164.3 million to these entities. At September 30, 2004 and December 31, 2003, the Company had trade receivables due from these entities of $23.4 million and $15.7 million, respectively, and the Company had trade payables due to these entities of $1.6 million and $4.8 million, respectively. At September 30, 2004, the Company had a loan receivable due from Ohio Coatings Company of $10.2 million bearing interest at approximately 5% per annum. The loan is to be repaid in November 2006.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

8. Stock-Based Compensation
In accordance with the Company’s plan of reorganization, the Company established a restricted stock plan pursuant to which it granted 500,000 shares of its common stock to selected key employees as of the effective date of its plan of reorganization. All of the grants made under the plan vest in increments of one-third of the total grant to each individual pro rata over three years.

During the third quarter of 2004, 165,333 shares of restricted common stock vested and 4,000 shares of restricted stock were subject to forfeiture. Restricted stock expense related to the restricted stock awards totaled $0.6 million for the quarter ended September 30, 2004 and $1.85 million for the nine months ended September 30, 2004. These amounts were reflected in shareholders’ equity as a decrease of deferred compensation.

On March 15, 2004, May 14, 2004 and August 15, 2004, respectively, the Company granted stock options for 4,394, 7,801 and 3,996 shares of its common stock to certain directors of the Company at a per share price of $24.04, $13.54 and $26.44, respectively.

FASB No. 123, “Accounting for Stock Based Compensation” (FASB 123) gives companies the option to adopt the fair market value method for expense recognition of employee stock options or to continue to account for employee stock options using the intrinsic value method, as outlined under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. The Company has elected to continue to apply the intrinsic value method to account for employee stock options and to disclose the pro forma effect as if the fair value method had been applied. The following table illustrates the effect on net earnings per share if the Company had applied the fair value recognition provisions of FASB 123 to stock based employee compensation.


	Reorganized Company									Predecessor Company
	Quarter			Nine Months			Two Months			One Month		Seven Months
	Ended			Ended			Ended			Ended		Ended
	September 30,			September 30,			September 30,			July 31,		July 31,
	2004			2004			2003			2003		2003
	(Dollars in thousands, except per share amounts)

Net income (loss)	$	35,590		$	56,022		$	(15,237	)	$	390,530	$	323,431
Add: Stock based compensation expense, net of tax		396			1,186			417			—		—
Less: Total stock-based compensation determined under fair value method for all awards, net of tax		(452	)		(1,356	)		(417	)		—		—

Pro forma net income (loss)	$	35,534		$	55,852		$	(15,237	)	$	390,530	$	323,431

Earnings per share:
Basic as reported	$	3.53		$	5.78			($1.60	)		*		*
Diluted as reported	$	3.42		$	5.63			($1.60	)		*		*
Basic pro forma	$	3.52		$	5.76			($1.60	)		*		*
Diluted pro forma	$	3.42		$	5.62			($1.60	)		*		*

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

9. Post Retirement Benefits Other Than Pensions

Net periodic cost for postretirement benefits other than pensions (principally health care and life insurance) for employees and covered dependents was as follows:


	Reorganized Company						Predecessor Company
	Quarter		Nine Months		Two Months		One Month			Seven Months
	Ended		Ended		Ended		Ended			Ended
	September 30,		September 30,		September 30,		July 31,			July 31,
	2004		2004		2003		2003			2003
	(Dollars in thousands)

Components of net periodic cost:
Service cost	$	733	$	2,199	$	417	$	243		$	1,701
Interest cost		1,835		5,505		1,186		1,656			11,586
Amortization of prior service credit		—		—		—		(226	)		(1,582	)
Recognized actuarial (gain)/loss		286		858		—		(1,452	)		(1,770	)

Net periodic cost	$	2,854	$	8,562	$	1,603	$	221		$	9,935

10. VEBA and Profit Sharing Expense

During the quarter ended September 30, 2004, the Company incurred VEBA and profit sharing expense of $14.8 million. At the sole discretion of the Company, $12.8 million of this amount is subject to satisfaction by the issuance of common stock of the Company during the fourth quarter of 2004. The remaining $2.0 million of this amount will be satisfied in cash, net of pre-funded amounts, during the fourth quarter of 2004.

During the nine months ended September 30, 2004, the Company incurred VEBA and profit sharing expense of $25.6 million. The Company satisfied $8.5 million of this amount by issuing 338,010 shares of common stock during the third quarter of 2004 and satisfied $2.3 million of this amount in cash, net of pre-funded amounts. At the sole discretion of the Company, $12.8 million of this amount is subject to satisfaction by the issuance of common stock of the Company during the fourth quarter of 2004. The remaining $2.0 million of this amount will be satisfied in cash, net of pre-funded amounts, during the fourth quarter of 2004.

11. Other Income

Other income consisted of the following:


	Quarter		Nine Months		Two Months		One Month		Seven Months
	Ended		Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		July 31,		July 31,
	2004		2004		2003		2003		2003
	(Dollars in thousands)

Equity income from affiliates	$	4,422	$	10,792	$	360	$	328	$	2,544
Other income		437		1,732		397		54		684

Total	$	4,859	$	12,524	$	757	$	382	$	3,228

12. Earnings Per Share

Diluted earnings per share assumes the exercise of stock options and vesting of restricted stock, provided in each case that the effect is dilutive. For the quarter ended September 30, 2004, 16,665 shares of common stock related to stock options and 285,090 shares of common stock related to restricted stock were included in the computation of diluted earnings per share. For the nine months ended September 30, 2004, 13,682 shares of common stock related to stock options and 233,913 shares of common stock related to restricted stock were included in the computation of diluted earnings per share.

Stock options to purchase 3,996 shares of common stock were issued on August 15, 2004 at an exercise price of $26.44 per share. These outstanding stock options were not included in the computation of diluted earnings per

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

share as the option price exceeded the average market price of the common stock for the quarter and nine months ended September 30, 2004.

13. Inventories

Inventories are valued at the lower of cost or market value. Cost is determined by the last-in first-out (LIFO) method for substantially all inventories. Approximately 98% of inventories are valued using the LIFO method.


	September 30,			December 31,
	2004			2003
	(Dollars in thousands)

Finished products	$	23,091		$	31,227
In-process		103,744			90,170
Raw materials		34,156			26,808
Other materials and supplies		198			378

		161,189			148,583
LIFO reserve		(10,468	)		(1,688	)

	$	150,721		$	146,895

Cost of products sold was reduced by $2.5 million for the quarter and nine months ended September 30, 2004 as the result of the liquidation of LIFO inventories.

14. Goodwill

The application of fresh start reporting resulted in an amount being allocated to reorganization value in excess of amounts allocated to identifiable assets, which has been reflected in the financial statements as goodwill. Under provisions of SOP 90-7, any benefit from the utilization of pre-confirmation net operating loss carryforwards and any benefit resulting from the reversal of a valuation allowance applicable to other deferred tax assets are used first to reduce goodwill. For the quarter and nine months ended September 30, 2004, goodwill was reduced by $18.3 and $30.0 million, respectively, representing the estimated benefit from the utilization of pre-confirmation net operating loss carryforwards and the reversal of the valuation allowance applicable to other deferred tax assets for the periods then ended.

15. Sale of Common Stock

On September 21, 2004, pursuant to a public offering, we sold 3,719,898 shares of common stock at $29 per share, generating gross sales proceeds of $107.9 million. These proceeds, net of issuance costs of $8.2 million, were used to repay $92.7 million due under our revolving credit facility and to fund a restricted cash account in the amount of $7.0 million to be used to fund future capital expenditures.

16. Commitments and Contingencies

Environmental Matters

Prior to confirmation of our plan of reorganization effective August 1, 2003, the Company settled all pre-petition environmental liability claims made by environmental regulatory agencies arising out of pre-petition stipulated penalties related to consent decrees and other pre-petition regulatory enforcement actions. The Company also believes that it has settled and/or discharged environmental liability for any known Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) sites arising out of pre-petition activity.

The Company estimates that demands for stipulated penalties and fines for post-petition events and activities through September 30, 2004 could total approximately $2.3 million, which has been fully reserved by the Company. These claims arise from instances in which the Company exceeded post-petition consent decree terms, including: (a) $1.9 million related to a January 30, 1996 USEPA consent decree for the Company’s coke oven gas desulfurization facility; (b) $0.3 million related to a July 1991 USEPA consent decree for water

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

discharges to the Ohio River; and (c) $0.1 million related to a September 20, 1999 Ohio EPA consent decree for the Company’s coke oven gas desulfurization facility.

In September 2000, the Company entered into a consent order with the West Virginia Department of Environmental Protection wherein the Company agreed to remove contaminated sediments from the bed of the Ohio River. Approximately $1.4 million was spent on these activities in 2002 and an additional $0.4 million in 2003. During removal activities in 2003, the Company discovered a broader area of contaminated sediments. The Company identified the spatial limits of these contaminated sediments and estimate their removal costs at $4.0 million, which has been fully reserved by the Company. The Company currently expects this work to be substantially complete by the end of 2005.

The Company is under a final administrative order issued by the USEPA in June 1998 to conduct a Resource Conservation and Recovery Act Facility Investigation to determine the nature and extent of soil and groundwater contamination at its coke plant in Follansbee, West Virginia. USEPA approved the Company’s investigation workplan, and field activities are scheduled for completion in 2004. Following this investigation, the Company will perform a study to determine possible remedial measures. It is expected that some remediation measures will be necessary and could commence within the next three to five years. Based on a preliminary estimate of the range of the possible cost to remediate, the Company has reserved approximately $5.6 million for such remediation measures. However, the field investigation is not completed and the remediation plan has yet to be submitted to the USEPA; therefore the full extent and cost of remediation could be different from current estimates.

The USEPA conducted a multimedia inspection of our Steubenville, Mingo Junction, Yorkville and Martins Ferry, Ohio and Follansbee, West Virginia facilities in March and June 1999. The inspection covered environmental regulations applicable to these plants. Many of the issues were resolved and settled prior to emergence from Chapter 11 bankruptcy. Based on current estimates, the Company has reserved $1.4 million for resolution of outstanding issues.

Capital expenditures for environmental projects totaled $1.9 million for the quarter ended September 30, 2004 and $2.4 million for the nine months ended September 30, 2004. The Company estimates capital expenditures (unadutied) for environmental projects to be $5.4 million for 2004, $12.6 million for 2005 and $12.1 million for 2006. However, due to the possibility of unanticipated factual or regulatory developments, the amount and timing of future capital expenditures may vary substantially from such estimates.

Accrued environmental liabilities totaled $14.6 million at September 30, 2004 and $14.7 million at December 31, 2003. These accruals were based on all information available to the Company. As new information becomes available, whether from third parties or otherwise, and as environmental regulations change, the liabilities are reviewed on a quarterly basis and the accruals are adjusted accordingly. Unless stated above, the time-frame over which these liabilities will be paid is presently unknown. Further, the Company considers it reasonably possible that it could ultimately incur additional liabilities relative to the above exposures of up to $5.0 million.

Other

The Company is the subject of, or party to, a number of other pending or threatened legal actions involving a variety of matters. However, based on information currently available, management believes that the disposition of these matters will not have a material adverse effect on the business, results of operations or the financial position of the Company.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

17. Summarized Combined Financial Information

WPSC is the issuer of the outstanding $40 million Series A notes and $20 million Series B notes. The Series A notes and Series B notes are each fully and unconditionally guaranteed, jointly and severally, by WPC and its present and future subsidiaries. WPSC and each subsidiary guarantor of the Series A and Series B notes are 100%-owned by the parent guarantor, WPC. Because the subsidiary guarantors are minor, individually and in the aggregate, the combined consolidating financial information for WPC and the subsidiary guarantors has been combined below in the column entitles “WPC and Subsidiary Guarantors.”

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

CONDENSED CONSOLIDATING BALANCE SHEET
Reorganized Company


	September 30, 2004
					Consolidating
	WPC and				and
	Subsidiary				Eliminating			WPC
	Guarantors		WPSC		Entires			Consolidated
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	—	$	15,181	$	—		$	15,181
Trade accounts receivables		—		167,414		—			167,414
Inventories		—		150,721		—			150,721
Other current assets		17		14,212		—			14,229

Total current assets		17		347,528		—			347,545
Intercompany receivables		—		1,160		(1,160	)		—
Investments and advances in affiliates		271,332		49,630		(271,332	)		49,630
Property, plant and equipment — net		—		458,529		—			458,529
Restricted cash		—		32,218		—			32,218
Other non-current assets		1,129		46,638		—			47,767

Total Assets	$	272,478	$	935,703	$	(272,492	)	$	935,689

Liabilities and stockholders’ equity
Accounts payable	$	—	$	63,630	$	—		$	63,630
Other current liabilities		—		118,874		—			118,874

Total current liabilities		—		182,504		—			182,504
Intercompany payable		1,160		—		(1,160	)		—
Long term debt		—		312,381		—			312,381
Other non-current liabilities		221		169,486		—			169,707
Stockholders’ equity		271,097		271,332		(271,332	)		271,097

Total Liabilities and Stockholders’ Equity	$	272,478	$	935,703	$	(272,492	)	$	935,689

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET
Reorganized Company


	December 31, 2003
					Consolidating
	WPC and				and
	Subsidiary				Eliminating			WPC
	Guarantors		WPSC		Entires			Consolidated
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	—	$	4,767	$	—		$	4,767
Trade accounts receivables		—		104,025		—			104,025
Inventories		—		146,895		—			146,895
Other current assets		12		11,571		—			11,583

Total current assets		12		267,258		—			267,270
Intercompany receivables		—		495		(495	)		—
Investments and advances in affiliates		104,593		42,857		(104,593	)		42,857
Property, plant and equipment — net		—		387,765		—			387,765
Restricted cash		—		87,138		—			87,138
Other non-current assets		896		82,960		—			83,856

Total Assets	$	105,501	$	868,473	$	(105,088	)	$	868,886

Liabilities and stockholders’ equity
Accounts payable	$	—	$	76,108	$	—		$	76,108
Other current liabilities		33		183,364		—			183,397

Total current liabilities		33		259,472		—			259,505
Intercompany payable		495		—		(495	)		—
Long term debt		—		340,696		—			340,696
Other non-current liabilities		360		163,712		—			164,072
Stockholders’ equity		104,613		104,593		(104,593	)		104,613

Total Liabilities and Stockholders’ Equity	$	105,501	$	868,473	$	(105,088	)	$	868,886

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Reorganized Company


	Quarter Ended
	September 30, 2004
							Consolidating
	WPC and						and
	Subsidiary						Eliminating			WPC
	Guarantors			WPSC			Entires			Consolidated
	(Dollars in thousands)
Income Data
Net sales	$	—		$	401,800		$	—		$	401,800
Cost of products sold,		—			321,516			—			321,516
Depreciation and amortizaton expense		—			7,756			—			7,756
Selling, administrative and general expense		132			17,616			—			17,748

Operating income (loss)		(132	)		54,912			—			54,780
Interest expense		—			(4,392	)		—			(4,392	)
Other income including equity earnings of affilliates		35,533			4,859			(35,533	)		4,859

Income before income taxes		35,401			55,379			(35,533	)		55,247
Income tax provision (benefit)		(189	)		19,846			—			19,657

Net income	$	35,590		$	35,533		$	(35,533	)	$	35,590


	Nine Months Ended
	September 30, 2004
							Consolidating
	WPC and						and
	Subsidiary						Eliminating			WPC
	Guarantors			WPSC			Entries			Consolidated
	(Dollars in thousands)
Income Data
Net sales	$	—		$	1,032,127		$	—		$	1,032,127
Cost of products sold		—			870,405			—			870,405
Depreciation and amortization expense		—			22,957			—			22,957
Selling, administrative and general expense		668			48,375			—			49,043

Operating income (loss)		(668	)		90,390			—			89,722
Interest expense		—			(14,669	)		—			(14,669	)
Other income including equity earnings of affilliates		56,314			12,524			(56,314	)		12,524

Income before income taxes		55,646			88,245			(56,314	)		87,577
Income tax provision (benefit)		(376	)		31,931			—			31,555

Net income	$	56,022		$	56,314		$	(56,314	)	$	56,022

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Reorganized Company


	Two Months Ended
	September 30, 2003
							Consolidating
	WPC and						and
	Subsidiary						Eliminating		WPC
	Guarantors			WPSC			Entries		Consolidated
	(Dollars in thousands)
Income Data
Net sales	$	—		$	159,789		$	—	$	159,789
Cost of products sold		—			159,314			—		159,314
Depreciation and amortization expense		—			3,568			—		3,568
Selling, administrative and general expense		88			8,916			—		9,004
Reorganization and professional fee expense		—			—			—		—

Operating income (loss)		(88	)		(12,009	)		—		(12,097	)
Interest expense		—			(3,891	)		—		(3,891	)
Other income including equity earnings of affilliates		(15,149	)		787			15,119		757

Income (loss) before income taxes		(15,237	)		(15,113	)		15,119		(15,231	)
Income tax provision (benefit)		—			6			—		6

Net income (loss)	$	(15,237	)	$	(15,119	)	$	15,119	$	(15,237	)

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Predecessor Company


	One Month Ended
	July 31, 2003
							Consolidating
							and
				Subsidiary			Eliminating			WPC
	WPC			Guarantors			Entires			Consolidated
	(Dollars in thousands)
Income Data
Net sales	$	—		$	81,298		$	—		$	81,298
Cost of products sold		—			76,877			—			76,877
Depreciation and amortization expense		—			6,095			—			6,095
Selling, administrative and general expense		34			4,614			—			4,648
Reorganization and professional fee expense		—			1,995			—			1,995

Operating income (loss)		(34	)		(8,283	)		—			(8,317	)
Reorganization income (expense)
Fresh start adjustments		—			(152,708	)		—			(152,708	)
Gain on discharge of debt		—			557,541			—			557,541
Other reorganization entries		—			(4,918	)		—			(4,918	)
Interest expense		—			(2,044	)		582			(1,462	)
Other income including equity earnings of affilliates		390,552			964			(391,134	)		382

Income (loss) before income taxes		390,518			390,552			(390,552	)		390,518
Income tax provision (benefit)		(12	)		—			—			(12	)

Net income (loss)	$	390,530		$	390,552		$	(390,552	)	$	390,530


	Seven Months Ended
	July 31, 2003
							Consolidating
							and
				Subsidiary			Eliminating			WPC
	WPC			Guarantors			Entires			Consolidated
	(Dollars in thousands)
Income Data
Net sales	$	—		$	570,439		$	—		$	570,439
Cost of products sold		(7,982	)		571,814			—			563,832
Depreciation and amortization expense		—			39,889			—			39,889
Selling, administrative and general expense		242			29,664			—			29,906
Reorganization and professional fee expense		—			8,140			—			8,140

Operating income (loss)		7,740			(79,068	)		—			(71,328	)
Reorganization income (expense)
Fresh start adjustments		—			(152,708	)		—			(152,708	)
Gain on discharge of debt		—			557,541			—			557,541
Other reorganization entries		(211	)		(4,547	)		—			(4,758	)
Interest expense		—			(12,677	)		3,492			(9,185	)
Other income including equity earnings of affilliates		319,540			1,705			(318,017	)		3,228

Income (loss) before income taxes		327,069			310,246			(314,525	)		322,790
Income tax provision (benefit)		3,638			(4,279	)		—			(641	)

Net income (loss)	$	323,431		$	314,525		$	(314,525	)	$	323,431

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Reorganized Company


	Nine Months Ended
	September 30, 2004
							Consolidating
	WPC and						and
	Subsidiary						Eliminating		WPC
	Guarantors			WPSC			Entries		Consolidated
	(Dollars in thousands)
Net cash provided by operating activities	$	—		$	27,194		$	—	$	27,194

Investing activities:
Capital expenditures		—			(93,053	)		—		(93,053	)
Construction of equipment using restricted cash		—			54,920					54,920
Other		(99,697	)		100,933			—		1,236

Net cash used in investing activities		(99,697	)		62,800			—		(36,897	)

Financing activities:
Net borrowings		—			(79,303	)		—		(79,303	)
Book overdraft		—			(277	)		—		(277	)
Issuance of common stock		99,697			—			—		99,697

Net cash provided by financing activities		99,697			(79,580	)		—		20,117

Net change in cash and cash equivalents		—			10,414			—		10,414
Cash and cash equivalents at beginning of period		—			4,767			—		4,767

Cash and cash equivalents at end of period	$	—		$	15,181		$	—	$	15,181


	Two Months Ended
	September 30, 2003
							Consolidating
	WPC and						and
	Subsidiary						Eliminating		WPC
	Guarantors			WPSC			Entries		Consolidated
	(Dollars in thousands)
Net cash used in operating activities	$	(8	)	$	(32,876	)	$	—	$	(32,884	)

Investing activities:
Capital expenditures		—			(12,044	)		—		(12,044	)
Construction of equipment using restricted cash		—			10,012					10,012
Other		—			—			—		—

Net cash used in investing activities		—			(2,032	)		—		(2,032	)

Financing activities:
Net borrowings		—			35,534			—		35,534
Book overdraft		—			1,122			—		1,122

Net cash provided by financing activities		—			36,656			—		36,656

Net change in cash and cash equivalents		(8	)		1,748			—		1,740
Cash and cash equivalents at beginning of period		52			7,330			—		7,382

Cash and cash equivalents at end of period	$	44		$	9,078		$	—	$	9,122

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Predecessor Company


	Seven Months Ended
	July 31, 2003
							Consolidating
							and
				Subsidiary			Eliminating		WPC
	WPC			Guarantors			Entries		Consolidated
	(Dollars in thousands)
Net cash provided by operating activities	$	(115,882	)	$	116,069		$	—	$	187

Investing activities:
Capital expenditures		—			(2,866	)		—		(2,866	)
Other		(102,485	)		103,286			—		801

Net cash used in investing activities		(102,485	)		100,420			—		(2,065	)

Financing activities:
Net borrowings		—			390			—		390
Book overdraft		—			327			—		327
Other		218,382			(218,382	)		—		—

Net cash used in financing activities		218,382			(217,665	)		—		717

Net change in cash and cash equivalents		15			(1,176	)		—		(1,161	)
Cash and cash equivalents at beginning of period		37			8,506			—		8,543

Cash and cash equivalents at end of period	$	52		$	7,330		$	—	$	7,382

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2 – MANAGEMENTS’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain sections of Management’s Discussion and Analysis relate to future events and expectations and, as such, constitute forward-looking statements. These statements often include words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “target”, “can”, “could”, “may”, “should”, “will”, “would” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be different form those expressed or implied in the forward-looking statements. For a discussion of some of the risk factors that may cause such a difference, see Note 13 to the Consolidated Financial Statements, the disclosures included below under Quantitative and Qualitative Disclosures About Market Risk, and Form 10-K Part I, Item I for the year ended December 31, 2003.

OVERVIEW

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

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

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

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

We are in the process of constructing an electric arc furnace (EAF) that will transform our operations from an integrated producer to a hybrid producer of steel, with characteristics of both an integrated producer and a mini-mill. Construction of the EAF remains on schedule and is nearing completion. On October 1, 2004, our new ladle metallurgy furnace (LMF) completed its first heat. Startup of the LMF required major components of the EAF to be operational, including the electrical substation, the water treatment facility and the baghouse, as well as ladle cars. Each of these systems will be used by both the LMF and EAF. We are expecting to produce the first heat with the EAF in November and begin ramping-up production thereafter.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

REORGANIZATON

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

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

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

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

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

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

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

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

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

• WPC and WPSC entered into an agreement with WHX Corporation providing for, among other things, a $10 million capital contribution by WHX Corporation, the capitalization of approximately $40 million in debt

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

owed by us to WHX Corporation, a $10 million unsecured loan from WHX Corporation and an agreement with respect to our separation from WHX Corporation’s employee pension plan.

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

• WPC issued 4,000,000 shares of its new common stock constituting 40% thereof for the benefit of the USWA retirees in satisfaction of certain claims under our labor agreement and an additional 1,000,000 shares of its new common stock constituting 10% thereof to or for the benefit of our salaried employees.

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

There are still several matters pending in the Bankruptcy Court, including the resolution of disputed unsecured and administrative claims and certain preference actions and other litigation where we are seeking to recover monies. As of September 30, 2004, approximately 59,456 shares of common stock issued pursuant to the plan of reorganization were reserved for distribution to creditors pending resolution of certain disputed claims. If those claims are ultimately allowed in whole or in part by the Bankruptcy Court, the appropriate amount of stock will be distributed to those claimants; if the claims are disallowed, the stock will be distributed to other creditors of the same class, pro rata. To the extent that certain administrative and secured claims are allowed by the Bankruptcy Court, those claims will be paid in cash, in an amount which we expect will not exceed $100,000 and for which there are sufficient reserves held by the distribution agent. If and to the extent those claims are allowed as pre-petition unsecured claims, then those creditors will receive stock, which has been reserved as described above. In addition, we are the plaintiffs in a number of preference actions, where we are seeking to recover monies from creditors. We do not believe that any of these remaining bankruptcy proceedings, individually or in the aggregate, will have a material effect on us.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

Fresh start reporting

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

Other postemployment benefits (OPEB)

The traditional medical and life insurance benefits that were provided to past retirees were terminated effective October 1, 2003. Pursuant to our labor agreement, which we entered into in connection with our plan of reorganization, past retirees will receive medical and life insurance benefits under a VEBA trust. Future retirees under the new labor agreement will be covered by a medical and life insurance program similar to that of active employees. All retirees and their surviving spouses shall be required to make monthly contributions for medical and prescription drug coverage, which, in the case of those covered under the VEBA trust, are made directly to the trust.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Because these benefits provided by us will be paid in the future over what could be many years, we estimate the accrued liability at each year-end balance sheet date using actuarial methods. The two most significant assumptions used in determining the liability are the projected medical cost trend rate and the discount rate.

We estimate the escalation trend in medical costs based on historical rate experience in our plans and through consultation with health care specialists. We have assumed an initial escalation rate of 8.25% in 2003. This rate is assumed to decrease gradually to an ultimate rate of 4.75% in 2008 and remain at that level for all future years. The health care cost trend rate assumption has a significant effect on the costs and obligation reported. A 1% increase in the health care cost trend rate would result in an increase in the accumulated postretirement benefit obligation of approximately $19.2 million. A 1% decrease in the health care cost trend rate would result in a decrease in the accumulated postretirement benefit obligation of approximately $16.7 million. A 1% increase in the health care costs trend rate would result in an increase in post-retirement benefit expenses of approximately $1.8 million. A 1% decrease in the health care cost trend rate would result in a decrease in post-retirement benefit expenses of approximately $1.5 million.

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

Asset impairments

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

Deferred taxes

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

Environmental and legal contingencies

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

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

Quarter ended September 30, 2004 — “Reorganized Company”

Net sales for the quarter ended September 30, 2004 totaled $401.8 million on shipments of steel products totaling 535,575 tons. Steel prices averaged $750 per ton for the quarter, which included an average of $98 per ton relating to surcharges. Steel prices increased 16% over the prior quarter, of which 3% related to surcharge increases. Steel prices were up, in general, due to continuing strong global demand for steel and a general improvement in economic conditions in the United States. The average steel price per ton reflects a mix that includes 73.5% value-added products.

Cost of goods sold totaled $321.5 million for the quarter. Cost of goods sold averaged $600 per ton shipped for the quarter. Cost of goods sold increased by $28.7 million over the second quarter. The increase in cost of goods sold as compared to the second quarter was principally due to higher raw material costs of $13.7 million, higher operating costs of $15.4 million and higher VEBA and profit sharing costs of $3.8 million, offset by slightly lower volume and mix of $4.5 million. Raw material costs were impacted by higher freight costs due to the closure of a lock on the Ohio River in August 2004. Operating costs were impacted by costs associated with preparing for the planned hot strip mill outage and costs related to measures taken to mitigate the effects of flooding on the Ohio River in September 2004. VEBA expense was reduced by a non-recurring $5.0 million item resulting from an agreement with the USWA authorizing the VEBA trust to sell certain shares of our common stock, with proceeds from the sale in excess of a pre-determined amount reducing current VEBA expense. The raw steel production operating rate during the quarter was 93.2% as compared to 97.9% for the second quarter for the reasons noted above.

Depreciation and amortization expense totaled $7.8 million for the quarter on average fixed assets of $474.1 million. Fixed assets were recorded at fair value as part of the reorganization.

Selling, administrative and general expense totaled $17.7 million for the quarter.

Interest expense totaled $4.4 million for the quarter. Long-term debt averaged $343.9 million during the quarter and borrowings under the revolving credit facility ranged from $0 to $102.6 million during the quarter. Interest expense also includes amortization of capitalized finance costs.

Other income totaled $4.9 million for the quarter, principally reflecting equity earnings from joint ventures.

Net income for the quarter ended September 30, 2004 totaled $35.6 million, or $3.53 earnings per basic share and $3.42 earnings per diluted share.

Nine months ended September 30, 2004 — “Reorganized Company”

Net sales for the nine months ended September 30, 2004 totaled $1,032.1 million on shipments of steel products totaling 1,622,750 tons. Steel prices averaged $636 per ton during the period, which included an average of $71 per ton relating to surcharges. Steel prices increased 45% over average steel prices for the fourth quarter of 2003, of which 16% related to surcharge increases. The average steel price per ton reflects a mix that includes 73.3% value-added products.

Cost of goods sold totaled $870.4 million for the period. Cost of goods sold averaged $536 per ton shipped, an increase of 23% over costs incurred in the fourth quarter of 2003. The increase in cost of goods sold is principally due to higher raw material costs, higher maintenance costs and higher VEBA and profit sharing costs. Cost of goods sold was reduced by $2.8 million during the period resulting from the settlement of pre-petition insurance litigation

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

and by a $5.0 million non-recurring VEBA expense reduction item. The raw steel production operating rate during the period was 94.4%.

Depreciation and amortization expense totaled $23.0 million for the period on average fixed assets of $442.0 million. Fixed assets were recorded at fair value as part of the reorganization.

Selling, administrative and general expense totaled $49.0 million for the period.

Interest expense totaled $14.7 million for the period. Long-term debt averaged $343.0 million during the period and borrowings under the revolving credit facility ranged from $0 to $102.6 million. Interest expense also includes amortization of capitalized finance costs.

Other income totaled $12.5 million for the period, principally reflecting equity earnings of joint ventures.

Net income for the nine months ended September 30, 2004 totaled $56.0 million, or $5.78 earnings per basic share and $5.63 earnings per diluted share.

Two months ended September 30, 2003 — “Reorganized Company”

Net sales for the two months ended September 30, 2003 totaled $159.8 million on shipments of steel products totaling 370,726 tons. Steel prices averaged $431 per ton. The average steel price per ton reflects a mix that includes 71.8% valued-added products.

Cost of goods sold totaled $159.3 million for the period. Cost of goods sold averaged $430 per ton shipped. The raw steel production operating rate during the period was 98.9%.

Depreciation expense totaled $3.6 million for the period on average fixed assets of $362.9 million. Fixed assets were recorded at fair value as part of the reorganization.

Selling, administrative and general expense totaled $9.0 million for the period.

Interest expense totaled $3.9 million for the period. Long-term debt averaged $343.2 million during the period and the revolving credit facility ranged from $50.7 million to $92.6 million. Interest expense also includes amortization of capitalized finance costs.

Other income totaled $0.8 million for the period, principally reflecting equity earnings of joint ventures.

Net loss for the two months ended September 30, 2003 totaled $15.2 million. Prior to reorganization, we were a wholly-owned subsidiary of WHX Corporation.

One month ended July 31, 2003 — “Predecessor Company”

Net sales for the month ended July 31, 2003 totaled $81.3 million on shipments of steel products totaling 188,546 tons. Steel prices averaged $431 per ton. The average steel price per ton reflects a mix that includes 73.4% value-added products.

Cost of goods sold totaled $76.9 million for the period. Cost of goods sold averaged $408 per ton shipped. The raw steel production operating rate during the period was 100.3%.

Depreciation expense totaled $6.1 million for the period on average fixed assets, before revaluation, of $1,248.9 million.

Selling, administrative and general expense totaled $4.6 million.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reorganization and professional fees related to the bankruptcy totaled $2.0 million. Non-recurring gains totaled $399.9 million for the one month ended July 31, 2003 as a result of our emergence from bankruptcy as of August 1, 2003. The $557.5 million gain on discharge of debt reflected pre-petition liabilities in excess of distributions made pursuant to our plan or reorganization. The $152.7 million fair value adjustment primarily reflected the revaluation of fixed assets. Other reorganization entries amounted to a loss of $4.9 million.

Interest expense totaled $1.5 million for the period, which primarily reflected interest on the revolving credit facility.

Other income totaled $3.2 million for the period, principally equity earnings of joint ventures.

Net income for the month ended July 31, 2003 totaled $390.5 million.

Seven months ended July 31, 2003 — “Predecessor Company”

Net sales for the seven-month period ended July 31, 2003 totaled $570.4 million on shipments of steel products totaling 1,305,046 tons. Steel prices averaged $437 per ton. The average steel price per ton reflects a mix that includes 71.2% value-added products.

Cost of goods sold for the seven-month period totaled $563.8 million. Cost of goods sold average $432 per ton shipped. The raw steel production operating rate during the seven-month period was 93.7% of capacity.

Depreciation expense for the seven-month period totaled $39.9 million on average fixed assets, before revaluation, of $1,248.3 million.

Selling, administrative and general expense for the seven-month period totaled $29.9 million.

Reorganization and professional fee expense totaled $8.1 million for the seven-month period. Non-recurring gains totaled $400.1 million for the seven-month period as a result of the Company’s emergence from bankruptcy as of July 31, 2003. The $557.5 million gain on discharge of debt reflects pre-petition liabilities in excess of distributions made pursuant to our plan or reorganization. The $152.7 million fair value adjustment primarily reflects the revaluation of fixed assets. Other reorganization entries amounted to a loss of $4.7 million.

Interest expense for the seven-month period totaled $9.2 million, which primarily reflected interest on the revolving credit facility.

Net income for the seven-month period ended July 31, 2003 totaled $323.4 million.

LIQUIDITY AND CAPITAL RESOURCES

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

Our revolving credit agreement facility requires us to maintain borrowing availability of at least $50 million through December 31, 2004. After December 31, 2004, we will be required to maintain borrowing availability of at least $25 million under the facility. Under the terms of our amended term loan agreement, we are also limited to a maximum of $150 million in borrowings, including outstanding letters of credit, under our revolving credit facility.

On September 21, 2004, pursuant to a public offering, we sold 3,719,898 shares of common stock at $29 per share, generating gross sales proceeds of $107.9 million. These proceeds, net of issuance costs of $8.2 million, were used

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

to repay $92.7 million due under our revolving credit facility and to fund a restricted cash account in the amount of $7.0 million to be used to fund future capital expenditures.

As of September 30, 2004, we had the following amounts available for our working capital and planned capital expenditures: cash and cash equivalents of $15.2 million; $32.2 million of restricted cash for construction of the electric arc furnace and for other capital expenditures; and $137.4 million of availability under our revolving credit facility, after giving effect to required reserves, outstanding letters of credit and the $150 million maximum availability limitation under the facility, as discussed more fully below.

For the nine months ended September 30, 2004, we generated cash flow from operating activities of $27.2 million. Considering our liquidity position as of September 30, 2004 noted above and provided that business conditions do not deteriorate significantly, we anticipate being able to maintain $50 million of required availability under our revolving credit agreement and to fund our debt service obligations and other contractual obligations without the need for additional financing.

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


	Collateral Type
	Tangible and intangible
	assets and
	joint venture equity	Accounts receivable and
	interest	inventory
Debt obligation Secured by First Security Interest	$250 Million Term Loan	$225 Million Revolving Credit Facility

Debt obligation Secured by Second Security Interest	$40 Million Series A Notes	$250 Million Term Loan

Debt obligation Secured by Third Security Interest	$225 Million Revolving Credit Facility	$40 million Series A Notes Facility

Debt obligation Secured by Fourth Security Interest	Deferred payment obligations in respect of iron ore sales agreement with Itabira Rio Doce	Deferred payment obligations in respect of iron ore sales agreement with Itabira Rio Doce

Debt obligation Secured by Fifth Security Interest	$20 Million Series B Notes	$20 Million Series B Notes

In the event that we are unable to satisfy our payment and other obligations under our secured debt, the lenders of our secured debt have various rights and remedies, including the right to force the sale of our assets and to apply the proceeds thereof to repay amounts owed by us. If such a foreclosure were to occur, then we may be unable to maintain our operations, our business, financial condition and results of operations could materially suffer and our shareholders may lose all or part of their investment. A summary description of these obligations follows:

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

$250 million term loan agreement

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

Under the original terms of our term loan agreement, we were required to prepay an amount equal to 50% of the net cash proceeds (as defined in the term loan agreement) from any issuance or sale of our capital stock and to apply such net cash proceeds to remaining installments in inverse order of maturity. In June 2004, we entered into an amendment and waiver to our term loan agreement to eliminate these prepayment requirements with respect to any issuance or sale of our capital stock on or before January 31, 2005. Specifically, the amendment and waiver provided that the net cash proceeds from the sale of our common stock in any offering on or before January 31, 2005 will be applied first to repay any outstanding principal borrowing under our revolving credit facility without reducing the commitment amount (excluding any letters of credit then outstanding), second, to the extent of any excess, to fund up to $35 million in capital expenditures and third, to the extent of any then-remaining excess, to repay principal amounts outstanding under our term loan agreement, with such repayments applied pro rata across all three term loan tranches and pro rata against each scheduled maturity within each tranche. All proceeds up to $35 million that are allocated for capital expenditures will be held in a segregated cash account. Additionally, the terms of the amendment and waiver exclude from our restrictive covenants applicable to capital expenditures up to $85 million relating to future capital improvement needs for our No. 8 coke battery. The $85 million for the No. 8 coke battery and up to $35 million to be held in the segregated cash account for capital expenditures are also excluded from the computation of our consolidated fixed charge coverage ratio. The amendment and waiver also limits us from having borrowings, including outstanding letters of credit, in excess of $150 million under our revolving credit facility. The amendment and waiver also provides for a 75 basis point reduction in the interest rate spread for the loans in which the interest rate is based upon the prime rate and a 120 basis point reduction in the interest rate spread for the loans in which the interest rate is based upon the LIBOR rate with respect to tranche B of the term loan, under which $209.2 million in principal amount is outstanding. On September 21, 2004, we sold 3,719,898 shares of common stock at $29 per share, generating gross sales proceeds of $107.9 million. These proceeds, net of issuance costs of $8.2 million, were used to repay $92.7 million due under our revolving credit facility and to fund a restricted cash account in the amount of $7.0 million to be used to fund future capital expenditures.

Pursuant to the provisions of our term loan agreement, we are subject to, and are currently in material compliance with, various covenants, including compliance with the terms and conditions of the guarantee of the Steel Board and the related guarantee of the West Virginia Housing Development Fund, limitations on indebtedness, guaranty obligations, liens, sale of subsidiary stock, dividends, distributions and investments.

Our term loan agreement also specifies certain financial covenants, including a maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio with which we must comply commencing with the first quarter of 2005. These financial covenants do not apply prior to that date as long as we maintain minimum availability under our revolving credit facility of at least $50 million through December 31, 2004. Whether we will be able to meet such covenants will substantially depend on our performance and the market conditions in the steel industry at the time we are required to comply with such covenants.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our term loan agreement also limits our ability to incur certain capital expenditures, including obligations under capital leases and capitalized repairs and replacements. Under our term loan agreement, we are permitted to incur capital expenditures with respect to certain specified projects up to specified maximum amounts, including the electric arc furnace, an automatic roll changer system at our Mingo Junction facility, and Allenport cold mill improvements. In addition, the amendment and waiver permits us to incur capital expenditures with respect to the rebuild of the No. 8 coke battery in an amount not to exceed $85 million. We are further permitted to incur additional expenses for capital improvements for other projects in amounts not to exceed in the aggregate specified maximums for each calendar year, ranging from $33.9 million to $44 million.

$225 million revolving credit facility

In connection with our plan of reorganization, WPSC entered into a three-year $225 million senior secured revolving credit facility with a bank group arranged by Royal Bank of Canada and General Electric Capital Corporation. Interest on borrowings is calculated based on either LIBOR or the prime rate using spreads based on facility borrowing availability as defined in the agreement. The facility matures on August 1, 2006. The blended rate of interest was approximately 4.7% at September 30, 2004. At September 30, 2004, we had no borrowings under the revolving credit facility and had $137.4 million of availability, after giving effect to required reserves, outstanding letters of credit and the a $150 million maximum availability limitation under the facility. We are subject to, and are currently in compliance with, various covenants set forth in the revolving credit agreement, which are substantially similar to those contained in the term loan agreement, as amended, as described above. Under the terms of our amended term loan agreement, we are limited to a maximum of $150 million in borrowings, including outstanding letters of credit, under our revolving credit facility.

Similar to the term loan agreement, we negotiated an amendment to our revolving credit facility. Under the amendment, all proceeds up to $35 million that are allocated for capital expenditures will be held in a segregated cash account. The amendment also permits us to incur an additional $85 million in capital expenditures toward the rebuild of the No. 8 coke battery. Of the $85 million available for the No. 8 coke battery, only $18 million may be expended prior to January 1, 2006. The $85 million for the No. 8 coke battery and up to $35 million to be held in a segregated cash account for capital expenditures are also excluded from the computation of our consolidated fixed charge coverage ratio. On September 21, 2004, we sold 3,719,898 shares of common stock at $29 per share, generating gross sales proceeds of $107.9 million. These proceeds, net of issuance costs of $8.2 million, were used to repay $92.7 million due under our revolving credit facility and to fund a restricted cash account in the amount of $7.0 million to be used to fund future capital expenditures.

$40 million Series A notes

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

$20 million Series B notes

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

$10 million unsecured note

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

OFF-BALANCE SHEET ARRANGEMENTS

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

CERTAIN OTHER OBLIGATIONS

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

(1) Modification and assumption agreement between WPSC and Danieli Corporation. This agreement modifies an agreement between WPSC and Danieli Corporation, dated July 6, 2000, pursuant to which WPSC agreed to purchase from Danieli Corporation certain roll-changing equipment. Under the original agreement, WPSC owed approximately $7.36 million to Danieli Corporation. Pursuant to the modified agreement, WPSC paid Danieli Corporation approximately $2.36 million. Approximately $3.8 million of the balance of the amount owed to Danieli Corporation was converted into a portion of the secured term loans under our term loan agreement that is not guaranteed by the Steel Board. The balance of the amount owed to Danieli Corporation was converted into a promissory note. In addition, WPSC agreed to pay Danieli Corporation approximately $2.58 million (of which approximately $96,000 has been paid and the balance of which is to be paid in progress payments as work on the automatic roll changers project is completed, expected in 2005) to complete the roll-changing project and for rehabilitation, storage and other costs of Danieli Corporation.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

(2) Loan modification agreement between WPSC and the Ohio Department of Development. Under this agreement, we made a $2.0 million partial prepayment of the $6.985 million owed by WPSC to the Ohio Department of Development pursuant to a loan, dated as of January 18, 2002, from the Ohio Department of Development and we were granted a two-year deferral from the effective date of the plan of reorganization of $4.985 million of such loan at an interest rate of 3% per annum.

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

(4) Agreement among WPSC, Itabira Rio Doce Company, Ltd. and Rio Doce Limited. This agreement provides for repayment, in equal monthly installments over a period not to exceed eighteen months from May 1, 2003, of WPSC’s $5.1 million deferred payment obligation under a certain iron ore sales agreement dated October 1, 2001. As of September 30, 2004, $0.3 million remained outstanding under this obligation.

In addition, we have ongoing obligations under our labor agreement with the USWA. Effective May 31, 2004, USWA wage rates increased by approximately 5.8%. In addition, a 12% temporary wage reduction that had been in effect since May 2003 was eliminated. We also increased wages for our salaried employees by 5% effective June 1, 2004. All of the obligations referenced in this section, except for the increase in wage rates, are included in the table of contractual commitments set forth below.

CONTRACTURAL COMMITMENTS

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

Contractual Payments Due


					2004 (from
	Total				September 30)				2005 to 2006				2007 to 2008				Thereafter
	(Dollars in millions)
Long-Term Debt (1)		407.2			$	16.1	(2	)	$	86.6	(3	)	$	220.0	(4	)	$	84.5	(5	)
Capital Leases		10.0				0.3				2.4				1.8				5.5
Operating Leases:
Long Term		9.3				0.4				3.5				3.6				1.8
Month to Month		44.7				2.1				17.0				17.0				8.6
Other Long Term Liabilities:
OPEB		100.2	(6	)		1.4				7.6				9.4				—
Severance		17.1	(7	)		2.6				11.7				2.3				0.5
Coal Miner Retiree Medical		2.9				—				0.4				0.4				2.1
Worker’s Compensation		20.2	(8	)		1.3				10.1				8.8				—
Purchase Commitments:
Oxygen Supply		73.2	(9	)		1.8				14.4				14.4				42.6
Electricity		116.3	(10	)		2.3				19.6				22.1				72.3
Coal		64.2	(11	)		4.8				39.6				19.8				—
Other		0.3				0.3				—				—				—
Capital Commitments		19.2	(12	)		16.8				2.4				—				—

Total Contractual Obligations	$	884.8			$	50.2			$	215.3			$	319.6			$	217.9

(1) The interest rate associated with the term loan is a floating rate. Interest payment projections in respect of the term loan assume that the interest rate for 2004 will be 4% per annum and will increase by 0.5% each year thereafter.

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(2) Includes interest payment obligations for the remainder of 2004 of approximately: $2.5 million in respect of the term loan; $0.8 million in respect of the Series A notes and the Series B notes; $153,000 in respect of the WHX note; no interest payments are due on the loan agreement with the State of West Virginia; $37,500 in respect of the loan modification agreement with the Ohio Department of Development; and $22,500 in respect of the modification and assumption agreement with Danieli Corporation.

(3) Includes aggregate interest payment obligations for years 2005 and 2006 of approximately: $21.0 million in respect of the term loan; $6.5 million in respect of the Series A notes and the Series B notes; $1.2 million in respect of the WHX note; $611,000 in respect of the loan agreement with the State of West Virginia; $100,000 in respect of the loan modification agreement with the Ohio Department of Development; $107,000 in respect of the modification and assumption agreement with Danieli Corporation; and $283,000 in respect of a 5-year, $3.0 million loan agreement with Junction Industries which bears interest at 7% per annum.

(4) Includes aggregate interest payment obligations for years 2007 and 2008 of approximately: $15.9 million in respect of the term loan; $7.0 million in respect of the Series A notes and the Series B notes; $1.2 million in respect of the WHX note; $611,000 in respect of the loan agreement with the State of West Virginia; $5,000 in respect of the modification and assumption agreement with Danieli Corporation; and $113,000 in respect of a 5-year loan agreement with Junction Industries.

(5) Includes aggregate interest payment obligations of approximately: $10.5 million in respect of the Series A notes and the Series B notes; and $1.6 million in respect of the WHX not and $19,000 in respect of a 5-year loan agreement with Junction Industries.

(6) Represents the estimated present value of our liability as of September 30, 2004. Amounts included for 2004 through 2008 reflect our current estimate of corporate cash outflows and include the impact of assumed mortality, medical inflation and the aging of the population. No estimate has been made beyond 2008.

(7) Amount represents payments under buyout program. 650 Bargaining employees elected buyouts that extend through 2010.

(8) Amount represents the present value of our liability as of September 30, 2004. Amounts included for 2004 through 2008 and thereafter reflect our current estimate of corporate cash outflows and exclude the impact of interest and mortality. The forecast of cash outflows is estimated based on historical cash payment information and anticipates payment of approximately $5.1 million per year.

(9) We entered into a 15-year take-or-pay contract in 1999 that was amended in 2003. The contract requires us to purchase oxygen, nitrogen and argon each month with a minimum monthly charge of approximately $0.6 million, subject to escalation clauses. Payments for deliveries of oxygen totaled $9.3 million in 2003, $7.0 million in 2002 and $7.5 million in 2001.

(10) We entered into a 20-year take-or-pay contract in 1999, which was amended in 2003. The contract requires us to purchase steam and electricity each month or pay a minimum monthly charge of approximately $0.4 million. A variable portion of the contract is calculated as $3.75 times the number of tons of iron produced each month with an agreed to minimum of 3,000 tons per day. Payments for deliveries of steam and electricity totaled $8.8 million in 2003, $13.8 million in 2002 and $14.6 million in 2001. If the Company elects to terminate the contract early, a maximum termination payment of $37.0 million would be required.

(11) In 2004,we amended its take-or-pay contract to purchase coal each month to a minimum monthly charge of approximately $1.6 million. The term of the contract expires on December 31, 2007, while the Company has the sole option to terminate the contract on or after January 1, 2006. After such date, the pricing will be subject to market conditions with a collar. Payments for deliveries of coal totaled $11.8 million in 2003, $16.4 million in 2002 and $7.3 million in 2001. If we elect to terminate the contract, a maximum termination payment of $37.4 million would be required

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

(12) In June 2003, we entered into an agreement for the supply of equipment and services with Junction Industries, Inc., pursuant to which Junction Industries has agreed to provide equipment and services to design, engineer, procure, fabricate, and assist us in the installation, commissioning, start-up and testing of one 250-ton (tap weight) electric arc furnace, one Consteel scrap conveyor system, ladle metallurgy furnace, baghouse and certain other associated equipment for incorporation into the electric arc furnace melt shop. The total cost of the electric arc furnace is expected to be $114.9 million. As of September 30, 2004, capital commitments remaining under the project total $19.2 million, not including $5.0 million in retained construction payments..

Planned capital expenditures

Our planned capital expenditures for the three-year period 2004 through 2006 total approximately $309.1 million, and include, but are not limited to, the following capital expenditure projects:

• $88.0 million remaining, as of January 1, 2004, for construction of the electric arc furnace, scheduled for completion in the fourth quarter of 2004. At September 30, 2004, there were $19.2 million in remaining capital commitments, not including $5.0 million of retained construction payments, both of which are substantially pre-funded through a restricted cash account;

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

• $15.9 million for installation of hot strip mill automatic roll changers at our Mingo Junction facility, expected to occur in 2005; and

• $10.3 million for cold mill improvements at our Allenport facility, expected to occur in 2005 and 2006.

In addition to the planned capital expenditure amounts identified above, we are also contemplating, at our option, and subject to receipt of all necessary environmental permitting requirements, a rebuild of the Nos. 1, 2 and 3 coke batteries in 2008 and 2009, at an estimated aggregate cost of approximately $47.0 million. Our decision to rebuild these coke batteries will depend, in part, on whether we believe potential revenues from the sale of resulting excess coke production attributable to the continued operation of these three batteries justifies these expenditures.

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

During the nine months ended September 30, 2004, we spent approximately $93.1 million on planned capital expenditures.

VEBA TRUST AND PROFIT SHARING PLANS

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

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

During the nine months ended September 30, 2004, we incurred aggregate contribution obligations under the VEBA trust and the profit sharing plans of $37.7 million. Of this amount, $3.3 million is subject to settlement in cash ($1.8 million of which was paid in August 2004) and $21.3 million is subject to settlement in cash or common stock at our sole discretion ($8.5 million of which was settled in common stock in August 2004). The remaining $13.1 million of the contribution obligation incurred during the nine months ended September 30, 2004 was previously funded to the VEBA trust in the form of cash and common stock contributions. We are unable to determine our contribution obligations for subsequent quarters until such time as the financial results for such periods become available.

VEBA trust

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

(i) 40% of operating cash flow, between $16 and $24 of operating cash flow per ton of steel products sold to third parties, payable in cash;

(ii) 12% of operating cash flow, between $24 and $65 of operating cash flow per ton of steel products sold to third parties, payable at our discretion in cash or common stock of WPC;

(iii) 25% of operating cash flow, above $65 of operating cash flow per ton of steel products sold to third parties, payable in cash; and

(iv) 15% of operating cash flow below $30 of operating cash flow per ton of steel products sold to third parties, payable at our discretion in cash or common stock of WPC, subject to compliance with dilution limitations.

During the nine months ended September 30, 2004, variable contributions of $21.2 million were incurred. Of this amount, $3.3 million is subject to settlement in cash ($1.8 million of which was paid in August 2004) and $4.8 million is subject to settlement in cash or common stock at our sole discretion ($2.4 million of which was settled in common stock in August 2004). The remaining portion of the variable contribution was previously funded to the VEBA trust in the form of cash and common stock contributions.

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

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

• the trustee was authorized to sell up to 400,000 of the Initial Shares, at its discretion;

• the proceeds of the sale of 400,000 of the Initial Shares, not to exceed $6.3 million, and the $3.0 million cash contribution previously made will be credited, over a limited period of time, against future Variable

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contributions due under (i), (ii) and (iii) of the Variable Contribution formula described above, if any, in accordance with the terms of the agreement with the USWA;

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

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

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

Pursuant to a Stock Transfer Restriction and Voting Agreement, the VEBA trust has agreed to limit the number of shares of WPC common stock that it may sell during the four years following the effective date of our plan of reorganization. During the first two years, the VEBA trust is not permitted to sell any of the Initial Shares without our authorization unless it holds, at the time of such sale, fewer than five percent of our outstanding shares of common stock. During each of the following two years, the VEBA trust has agreed not to sell more than 50% of the remaining Initial Shares within any consecutive 12-month period. These restrictions will not apply to any additional shares that we may contribute to the VEBA trust in satisfaction of our Variable Contribution obligation, if any. As described above, we authorized the disposition of 400,000 shares of our common stock held by the VEBA trust in satisfaction of certain funding obligations with respect to the trust (all of which had been disposed by the VEBA trust as of September 30, 2004). In connection with the stock transfer restrictions, the VEBA trust has also agreed that it will abstain from voting 1.3 million shares of common stock, or such lesser number of shares as it may hold from time to time, for the election of directors of WPC.

Profit sharing plans

Pursuant to the collective bargaining agreement with the USWA, and in addition to our obligations to make contributions to the VEBA trust based on our profitability as described under VEBA Trust above, we have an obligation to make quarterly profit sharing payments to or for the benefit of our active USWA employees in an amount equal to 15% of our profits for the quarter, if any, in excess of $30 profit per ton of steel shipped to third parties. For this purpose, profits are defined as earnings before interest and taxes, calculated on a consolidated basis, excluding effects of certain amounts as set forth in the collective bargaining agreement. The profit sharing pool will be divided among all employees on the basis of hours attributed to each employee within each quarter. We have the discretion to make future payments, if any, in cash or in WPC common stock. Under the terms of the plan, we must satisfy any profit sharing obligation with respect to the first, second and third fiscal quarters within 45 days after the end of the quarter, while any obligation with respect to the fourth fiscal quarter must be satisfied within 15 days after the date of the opinion of our independent registered public accounting firm with respect to our annual audited financial statements. All payments in stock will be contributed to the participant’s 401(k) account, while payments in cash, if any, will be made directly to plan participants. To the extent that contributions of stock under this plan in any fiscal year, together with stock contributions to the VEBA trust, exceed 10% of our common stock, on a fully diluted basis, we may satisfy our contribution obligation in the form of profit sharing notes. All profit sharing payments that become due are considered 100% vested when made..During nine months ended September 30, 2004, we incurred a profit sharing obligation under this plan of $12.9. This amount is subject to settlement in cash or in common stock at our sole discretion, $4.8 million of which was settled in common stock in August 2004. In addition, we have adopted a profit sharing plan for salaried employees under which we have an obligation to make quarterly profit sharing payments to or for the benefit of our salaried employees in an amount equal to 4.19% of our

WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations

profits for the quarter, if any, in excess of $30 profit per ton of steel shipped to third parties. For this purpose, profits are defined as earnings before interest and taxes, calculated on a consolidated basis, excluding effects of certain amounts as set forth in the plan. The profit sharing pool will be divided among all salaried employees, excluding officers.

During the nine months ended September 30, 2004, a profit sharing obligation of $3.6 million was incurred under this plan. This amount is subject to settlement in cash or common stock at our sole discretion, of which $1.3 million was settled in common stock in August 2004. Under the terms of the plan, we must satisfy any profit sharing obligations with respect to the first, second and third fiscal quarters within 45 days after the end of the quarter, while any obligation with respect to the fourth quarter must be satisfied within 15 days after the date of the opinion of our independent registered public accounting firm with respect to our annual audited financial statements. All payments in stock will be contributed to the company stock fund (as defined in the plan) under our salaried 401(k) savings plan, which restricts participants from making dispositions of our common stock out of the fund for a period of 24 months following any contribution other than distributions following termination of employment, or the death or disability of the participant. All profit sharing payments that become due are considered 100% vested when made.

NEW ACCOUNTING STANDARDS

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

The Company adopted FASB No. 132-R (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits an amendment of FASB Statements No. 87, 88, and 106” (FASB 132-R). FASB 132-R revises employers’ disclosures about pension plans and other postretirement benefit plans. It requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. Additionally, FASB 132-R requires public companies to make certain disclosures in their interim financial statements with respect to net periodic pension expense and contributions paid. The Company has provided the required interim disclosures in Note 9 to the consolidated financial statements for their postretirement benefit plan. Due to the immaterial amounts related to the Company’s defined benefit pension plan, disclosure has not been provided.

Item 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Commodity price risk and related risks

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

Interest rate risk

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

Under the Bankruptcy Code, interest is generally not allowable on unsecured pre-petition obligations. Pursuant to our plan of reorganization, substantially all of our pre-reorganization debt was repaid or otherwise satisfied and we entered into new credit facilities. Under those credit facilities, at September 30, 2004, we had outstanding $87.3 million aggregate principal amount of debt under fixed-rate instruments and $256.5 million aggregate principal amount of debt under variable-rate instruments. Since our portfolio of debt is comprised primarily of variable-rate instruments, the fair value of the debt is relatively insensitive to the effects of interest rate fluctuations. However, our interest expense is sensitive to changes in the general level of interest rates. A 100 basis point increase in the average rate for the variable-rate debt would increase our annual interest expense by approximately $2.6 million.

Credit risk

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

Foreign currency exchange risk

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

Item 4 - Controls and Procedures

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

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

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

Environmental Proceedings

On October 14, 2004, the West Virginia Department of Environmental Protection (WVDEP) requested that the Company enter into a consent decree related to alleged noncompliance with the air emissions permit for the Company’s coke producing facility in Follansbee, West Virginia. The Company has entered into negotiations with WVDEP on this matter and based on the parameters of current negotiations, the Company does not anticipate that the ultimate settlement will have a material effect on the operations, financial condition or cash flows of the Company.

Item 4 - Submission of Matters to a Vote of Securities Holders

(a) The Company’s Annual Meeting of Stockholders was held on August 5, 2004, at the Hyatt Regency Pittsburgh International Airport, 1111 Airport Boulevard, Pittsburgh, Pennsylvania 15231.

(b) At such Annual Meeting, the holders of the Company’s common stock elected the following nominees for director for a one-year term ending at the 2005 Annual Meeting:


Nominee	Total Votes For		Total Votes Withheld
Paul J. Mooney		7,241,674		1,336,352
Alicia H. Munnell		6,019,229		2,558,797
Lynn R. Williams		7,236,413		1,341,613

Item 6 – Exhibits and Reports of Form 8-K

(a) Exhibits


Exhibit No.		Description
31.1		Certificate of James G. Bradley, Chief Executive Officer of the Registrant, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

31.2		Certificate of Paul J. Mooney, Chief Financial Officer of the Registrant, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.1		Certificate of James G. Bradley, Chief Executive Officer of the Registrant, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2		Certificate of Paul J. Mooney, Chief Financial Officer of the Registrant, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

(b) Reports on Form 8-K

The Company filed a report on Form 8-K under item 12 on August 9, 2004.


	Page
PART I FINANCIAL INFORMATION
Item 1 Condensed Financial Statements:
Condensed Consolidated Statements of Operations (Unaudited)		2
Condensed Consolidated Balance Sheets (Unaudited)		3
Condensed Consolidated Statements of Cash Flows (Unaudited)		4
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)		5
Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3 Quantitative and Qualitative Disclosures About Market Risks		39
Item 4 Controls and Procedures		40
PART II OTHER INFORMATION
Item 1 Legal Proceedings		41
Item 4 Submission of Matters to a Vote of Securities Holders
Item 6 Exhibits and Reports on Form 8-K
SIGNATURES		42
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

1.		Basis of Presentation

		The condensed consolidated financial statements of Wheeling-Pittsburgh Corporation and subsidiaries (WPC or the Company) are unaudited. In the opinion of management, these financial statements reflect all recurring adjustments necessary to present fairly the consolidated financial position of the Company and the results of its operations and the changes in its cash flows for the periods presented.

		These financial statements, including notes thereto, have been prepared in accordance with applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. The results reported in these financial statements may not be indicative of the results that may be expected for the entire year. This Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2003.

		The Company emerged from bankruptcy effective August 1, 2003 (see Note 2), and applied fresh start reporting as of July 31, 2003. As a result, amounts reported in the financial statements for the one month ended July 31, 2003 and for the seven months ended July 31, 2003 relate to the Company prior to its reorganization and the application of fresh start reporting. Amounts for these periods are referred to as being applicable to the “Predecessor Company”. Amounts for periods subsequent to the reorganization of the Company are referred to as being applicable to the “Reorganized Company”. Due to the application of fresh start reporting as of July 31, 2003, amounts reported for the predecessor company and the reorganized company are not comparable and have been separated by a black line in the financial statements.

		The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

		Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

2.		Bankruptcy and Reorganization

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

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

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

			common stock, par value $0.01 per share, and 20 million shares of undesignated preferred stock, par value $0.001 per share.

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

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

	•		WPC cancelled all shares of its common stock that existed prior to the implementation of the plan of reorganization, at which point it ceased to be a subsidiary of WHX Corporation.

	•		WPSC entered into a new $250 million senior secured term loan facility, which is guaranteed in part by the Emergency Steel Loan Guarantee Board, the West Virginia Housing Development Fund, WPC and WP Steel Venture Corporation, a wholly-owned subsidiary of WPC, and is collateralized by a first lien on its tangible and intangible assets (other than accounts receivable and inventory) and its equity interests in its joint ventures and a second lien on its accounts receivable and inventory. WPSC also entered into a new $225 million senior secured revolving credit facility, which is guaranteed by WPC and WP Steel Venture Corporation and is collateralized by a first lien on its accounts receivable and inventory and a third lien on its other tangible and intangible assets and its equity interests in its joint ventures and pledged stock of its subsidiaries.

	•		All of the obligations under the Company’s $195 million debtor-in-possession credit facility were satisfied in full and discharged.

	•		WPC and WPSC entered into an agreement with WHX Corporation providing for, among other things, a $10 million capital contribution by WHX Corporation, the capitalization of approximately $40 million in debt owed by the Company to WHX Corporation, a $10 million unsecured loan from WHX Corporation and an agreement with WHX Corporation, the Pension Benefit Guaranty Corporation (PBGC), and the United Steelworkers of America (USWA), with respect to the Company’s separation from WHX Corporation’s employee pension plan.

	•		WPC and WPSC entered into an agreement with its unionized employees represented by the USWA which modified the existing labor agreement to provide for, among other things, future pension arrangements with the USWA and reductions in the Company’s employee-related costs.

	•		WPC issued 4,000,000 shares of new common stock constituting 40% thereof for the benefit of USWA retirees in satisfaction of certain claims under its labor agreement and an additional 1,000,000 shares of its new common stock constituting 10% thereof to or for the benefit of the Company’s salaried employees.

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

		monies. As of September 30, 2004, approximately 59,456 shares of common stock issued pursuant to the plan of reorganization were reserved for distribution to creditors pending resolution of certain disputed claims. If those claims are ultimately allowed in whole or in part by the Bankruptcy Court, the appropriate amount of stock will be distributed to those claimants; if the claims are disallowed, the stock will be distributed to other creditors of the same class, pro rata. To the extent that certain administrative and secured claims are allowed by the Bankruptcy Court, those claims will be paid in cash, in an amount which we expect will not exceed $100,000 and for which there are sufficient reserves held by the distribution agent. If and to the extent those claims are allowed as pre-petition unsecured claims, then those creditors will receive stock, which has been reserved as described above. In addition, the Company is the plaintiff in a number of preference actions, where it is seeking to recover monies from creditors. The Company does not believe that any of these remaining bankruptcy proceedings, individually or in the aggregate, will have a material adverse effect on the Company.

3.		Fresh Start Reporting

		In accordance with Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” (SOP 90-7), the Company adopted the provisions of fresh start reporting as of July 31, 2003. In adopting the requirements of fresh start reporting, the Company made a determination of the enterprise value of the entity based upon various valuation methods, including discounted cash flow methodologies, analysis of comparable steel companies, and other applicable ratios and economic industry information relevant to the operations of the Company. The estimated total equity value of the reorganized company aggregating approximately $150 million was determined after taking into account the values of the obligations assumed in connection with the Joint Plan of Reorganization.

		The following reconciliation of the predecessor company’s consolidated balance sheet as of July 31, 2003 to that of the reorganized company as of July 31, 2003 was prepared with the adjustments that give effect to the reorganization and fresh start reporting.

		The adjustments entitled “Reorganization Adjustments” reflect the consummation of the Joint Plan of Reorganization, including the elimination of existing liabilities subject to compromise, and consolidated shareholders’ deficit, and to reflect the aforementioned $150 million equity value.

		The adjustments entitled “Fresh Start Adjustments” reflect the adoption of fresh start reporting, including the adjustments to record property and equipment at its fair value.

		*Footnotes:*

		[a] Reflects the borrowing of the $250 million term loan proceeds and amounts under the post-petition revolver and the payments necessary to effect the Plan of Reorganization, such as the repayment of DIP facilities, cash distributions to creditors and the payment of fees and expenses associated with the exit financing.

		[b] Reflects the impact on retained earnings of reorganization expenses net of tax benefit.

		[c] Reflects the settlement of liabilities subject to compromise, including the distribution of cash, notes and equity to the pre-petition creditors, the assumption of OPEB and other pre-petition liabilities (capital leases, employee benefits, taxes) and the cancellation of debt income.

		[d] Reflects the adjustments to reflect “Fresh Start” reporting. These entries include the write-down of inventories, property, plant and equipment and joint venture interests to their appraised values, elimination of accumulated deficits and additional paid-in capital.

		[e] Reflects restricted stock awards for the distribution of employee equity into trust.

		[f] Reflects the cancellation of debt as a result of WHX Corporation forgiving its portion of the DIP term loan.

		[g] Reflects the pre-funding of VEBA obligations with 4,000,000 shares of the Company’s common stock, an intangible asset related to joint venture supply agreements and goodwill.

4.		New Accounting Standards

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

		In May 2004, the FASB issued FASB Staff Position (FSP) No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”. FSP 106-2 provides guidance on accounting for the effects of the new Medicare prescription drug legislation by employers whose prescription drug benefits are actuarially equivalent to the drug benefit under Medicare Part D. FSP 106-2 supercedes FSP 106-1 and is effective for the first interim or annual period beginning after June 15, 2004. As allowed by FSP 106-1, the Company elected to defer recognizing the effects of the new legislation. Based on a preliminary assessment and pending issuance of final guidance on determining actuarial equivalence, the Company cannot make a final determination as to whether its prescription drug benefits are actuarially equivalent of drug benefits under Medicare Part D. However, if the Company’s prescription drug benefits are finally determined to be actuarially equivalent to benefits under Medicare Part D, it is estimated that the effect on operations for the quarter and nine months ended September 30, 2004 will not be material.

		The Company adopted FASB No. 132-R (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits an amendment of FASB Statements No. 87, 88, and 106” (FASB 132-R). FASB 132-R revises employers’ disclosures about pension plans and other postretirement benefit plans. It requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. Additionally, FASB 132-R requires public companies to make certain disclosures in their interim financial statements with respect to net periodic pension expense and contributions paid. The Company has provided the required interim disclosures in Note 9 to the condensed consolidated financial statements for their postretirement benefit plan. Due to the immaterial amounts related to the Company’s defined benefit pension plan, disclosure has not been provided.

5.		Business Segment

		The Company is primarily engaged in one line of business and has one industry segment, which is the making, processing and fabricating of steel and steel products. The Company’s products include hot rolled and cold rolled sheet and coated products such as galvanized, pre-painted and tin mill sheet. The Company also manufactures a variety of fabricated steel products including roll formed corrugated roofing, roof deck, form deck, floor deck, bridgeform and other products used primarily by the construction, highway and agricultural markets.

6.		Sale of Scrap

		Beginning in the third quarter of 2004, the Company sold all of its internally-generated scrap to a third party pursuant to a long-term scrap supply agreement. The internally-generated scrap sold to the third party is processed and resold to the Company as a part of the total scrap purchased by the Company under the long-term supply agreement. Revenue from the sale of internally-generated scrap to the third party is recorded as a reduction of cost of goods sold in the statement of operations.

7.		Related Party Transactions

		The Company owns a 35.7% interest in Wheeling-Nisshin, Inc. and a 50% interest in Ohio Coatings Company, both of which are accounted for using the equity method of accounting. During the quarter and nine months ended September 30, 2004, the Company had sales of $109.5 and $271.7 million to these entities, respectively. During the two months ended September 30, 2003, the Company had sales of $38.6 million to these entities. During the one month ended July 31, 2003, the Company had sales of $23.1 million to these entities. During the seven months ended July 31, 2003, the Company had sales of $164.3 million to these entities. At September 30, 2004 and December 31, 2003, the Company had trade receivables due from these entities of $23.4 million and $15.7 million, respectively, and the Company had trade payables due to these entities of $1.6 million and $4.8 million, respectively. At September 30, 2004, the Company had a loan receivable due from Ohio Coatings Company of $10.2 million bearing interest at approximately 5% per annum. The loan is to be repaid in November 2006.

8.		Stock-Based Compensation In accordance with the Company’s plan of reorganization, the Company established a restricted stock plan pursuant to which it granted 500,000 shares of its common stock to selected key employees as of the effective date of its plan of reorganization. All of the grants made under the plan vest in increments of one-third of the total grant to each individual pro rata over three years.

		During the third quarter of 2004, 165,333 shares of restricted common stock vested and 4,000 shares of restricted stock were subject to forfeiture. Restricted stock expense related to the restricted stock awards totaled $0.6 million for the quarter ended September 30, 2004 and $1.85 million for the nine months ended September 30, 2004. These amounts were reflected in shareholders’ equity as a decrease of deferred compensation.

		On March 15, 2004, May 14, 2004 and August 15, 2004, respectively, the Company granted stock options for 4,394, 7,801 and 3,996 shares of its common stock to certain directors of the Company at a per share price of $24.04, $13.54 and $26.44, respectively.

		FASB No. 123, “Accounting for Stock Based Compensation” (FASB 123) gives companies the option to adopt the fair market value method for expense recognition of employee stock options or to continue to account for employee stock options using the intrinsic value method, as outlined under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. The Company has elected to continue to apply the intrinsic value method to account for employee stock options and to disclose the pro forma effect as if the fair value method had been applied. The following table illustrates the effect on net earnings per share if the Company had applied the fair value recognition provisions of FASB 123 to stock based employee compensation.

9.		Post Retirement Benefits Other Than Pensions

		Net periodic cost for postretirement benefits other than pensions (principally health care and life insurance) for employees and covered dependents was as follows:

10.		VEBA and Profit Sharing Expense

		During the quarter ended September 30, 2004, the Company incurred VEBA and profit sharing expense of $14.8 million. At the sole discretion of the Company, $12.8 million of this amount is subject to satisfaction by the issuance of common stock of the Company during the fourth quarter of 2004. The remaining $2.0 million of this amount will be satisfied in cash, net of pre-funded amounts, during the fourth quarter of 2004.

		During the nine months ended September 30, 2004, the Company incurred VEBA and profit sharing expense of $25.6 million. The Company satisfied $8.5 million of this amount by issuing 338,010 shares of common stock during the third quarter of 2004 and satisfied $2.3 million of this amount in cash, net of pre-funded amounts. At the sole discretion of the Company, $12.8 million of this amount is subject to satisfaction by the issuance of common stock of the Company during the fourth quarter of 2004. The remaining $2.0 million of this amount will be satisfied in cash, net of pre-funded amounts, during the fourth quarter of 2004.

11.		Other Income

		Other income consisted of the following:

12.		Earnings Per Share

		Diluted earnings per share assumes the exercise of stock options and vesting of restricted stock, provided in each case that the effect is dilutive. For the quarter ended September 30, 2004, 16,665 shares of common stock related to stock options and 285,090 shares of common stock related to restricted stock were included in the computation of diluted earnings per share. For the nine months ended September 30, 2004, 13,682 shares of common stock related to stock options and 233,913 shares of common stock related to restricted stock were included in the computation of diluted earnings per share.

13.		Inventories

		Inventories are valued at the lower of cost or market value. Cost is determined by the last-in first-out (LIFO) method for substantially all inventories. Approximately 98% of inventories are valued using the LIFO method.

		Cost of products sold was reduced by $2.5 million for the quarter and nine months ended September 30, 2004 as the result of the liquidation of LIFO inventories.

14.		Goodwill

		The application of fresh start reporting resulted in an amount being allocated to reorganization value in excess of amounts allocated to identifiable assets, which has been reflected in the financial statements as goodwill. Under provisions of SOP 90-7, any benefit from the utilization of pre-confirmation net operating loss carryforwards and any benefit resulting from the reversal of a valuation allowance applicable to other deferred tax assets are used first to reduce goodwill. For the quarter and nine months ended September 30, 2004, goodwill was reduced by $18.3 and $30.0 million, respectively, representing the estimated benefit from the utilization of pre-confirmation net operating loss carryforwards and the reversal of the valuation allowance applicable to other deferred tax assets for the periods then ended.

15.		Sale of Common Stock

		On September 21, 2004, pursuant to a public offering, we sold 3,719,898 shares of common stock at $29 per share, generating gross sales proceeds of $107.9 million. These proceeds, net of issuance costs of $8.2 million, were used to repay $92.7 million due under our revolving credit facility and to fund a restricted cash account in the amount of $7.0 million to be used to fund future capital expenditures.

16.		Commitments and Contingencies

		Environmental Matters

		Prior to confirmation of our plan of reorganization effective August 1, 2003, the Company settled all pre-petition environmental liability claims made by environmental regulatory agencies arising out of pre-petition stipulated penalties related to consent decrees and other pre-petition regulatory enforcement actions. The Company also believes that it has settled and/or discharged environmental liability for any known Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) sites arising out of pre-petition activity.

		The Company estimates that demands for stipulated penalties and fines for post-petition events and activities through September 30, 2004 could total approximately $2.3 million, which has been fully reserved by the Company. These claims arise from instances in which the Company exceeded post-petition consent decree terms, including: (a) $1.9 million related to a January 30, 1996 USEPA consent decree for the Company’s coke oven gas desulfurization facility; (b) $0.3 million related to a July 1991 USEPA consent decree for water

		discharges to the Ohio River; and (c) $0.1 million related to a September 20, 1999 Ohio EPA consent decree for the Company’s coke oven gas desulfurization facility.

		In September 2000, the Company entered into a consent order with the West Virginia Department of Environmental Protection wherein the Company agreed to remove contaminated sediments from the bed of the Ohio River. Approximately $1.4 million was spent on these activities in 2002 and an additional $0.4 million in 2003. During removal activities in 2003, the Company discovered a broader area of contaminated sediments. The Company identified the spatial limits of these contaminated sediments and estimate their removal costs at $4.0 million, which has been fully reserved by the Company. The Company currently expects this work to be substantially complete by the end of 2005.

		The Company is under a final administrative order issued by the USEPA in June 1998 to conduct a Resource Conservation and Recovery Act Facility Investigation to determine the nature and extent of soil and groundwater contamination at its coke plant in Follansbee, West Virginia. USEPA approved the Company’s investigation workplan, and field activities are scheduled for completion in 2004. Following this investigation, the Company will perform a study to determine possible remedial measures. It is expected that some remediation measures will be necessary and could commence within the next three to five years. Based on a preliminary estimate of the range of the possible cost to remediate, the Company has reserved approximately $5.6 million for such remediation measures. However, the field investigation is not completed and the remediation plan has yet to be submitted to the USEPA; therefore the full extent and cost of remediation could be different from current estimates.

		The USEPA conducted a multimedia inspection of our Steubenville, Mingo Junction, Yorkville and Martins Ferry, Ohio and Follansbee, West Virginia facilities in March and June 1999. The inspection covered environmental regulations applicable to these plants. Many of the issues were resolved and settled prior to emergence from Chapter 11 bankruptcy. Based on current estimates, the Company has reserved $1.4 million for resolution of outstanding issues.

		Capital expenditures for environmental projects totaled $1.9 million for the quarter ended September 30, 2004 and $2.4 million for the nine months ended September 30, 2004. The Company estimates capital expenditures (unadutied) for environmental projects to be $5.4 million for 2004, $12.6 million for 2005 and $12.1 million for 2006. However, due to the possibility of unanticipated factual or regulatory developments, the amount and timing of future capital expenditures may vary substantially from such estimates.

		Accrued environmental liabilities totaled $14.6 million at September 30, 2004 and $14.7 million at December 31, 2003. These accruals were based on all information available to the Company. As new information becomes available, whether from third parties or otherwise, and as environmental regulations change, the liabilities are reviewed on a quarterly basis and the accruals are adjusted accordingly. Unless stated above, the time-frame over which these liabilities will be paid is presently unknown. Further, the Company considers it reasonably possible that it could ultimately incur additional liabilities relative to the above exposures of up to $5.0 million.

		Other

		The Company is the subject of, or party to, a number of other pending or threatened legal actions involving a variety of matters. However, based on information currently available, management believes that the disposition of these matters will not have a material adverse effect on the business, results of operations or the financial position of the Company.

17.		Summarized Combined Financial Information

		WPSC is the issuer of the outstanding $40 million Series A notes and $20 million Series B notes. The Series A notes and Series B notes are each fully and unconditionally guaranteed, jointly and severally, by WPC and its present and future subsidiaries. WPSC and each subsidiary guarantor of the Series A and Series B notes are 100%-owned by the parent guarantor, WPC. Because the subsidiary guarantors are minor, individually and in the aggregate, the combined consolidating financial information for WPC and the subsidiary guarantors has been combined below in the column entitles “WPC and Subsidiary Guarantors.”

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

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

	•		WPC and WPSC entered into an agreement with WHX Corporation providing for, among other things, a $10 million capital contribution by WHX Corporation, the capitalization of approximately $40 million in debt

(2)		Loan modification agreement between WPSC and the Ohio Department of Development. Under this agreement, we made a $2.0 million partial prepayment of the $6.985 million owed by WPSC to the Ohio Department of Development pursuant to a loan, dated as of January 18, 2002, from the Ohio Department of Development and we were granted a two-year deferral from the effective date of the plan of reorganization of $4.985 million of such loan at an interest rate of 3% per annum.

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

(4)		Agreement among WPSC, Itabira Rio Doce Company, Ltd. and Rio Doce Limited. This agreement provides for repayment, in equal monthly installments over a period not to exceed eighteen months from May 1, 2003, of WPSC’s $5.1 million deferred payment obligation under a certain iron ore sales agreement dated October 1, 2001. As of September 30, 2004, $0.3 million remained outstanding under this obligation.

		WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
		Management’s Discussion and Analysis of Financial Condition and Results of Operations

	(i)		40% of operating cash flow, between $16 and $24 of operating cash flow per ton of steel products sold to third parties, payable in cash;

	(ii)		12% of operating cash flow, between $24 and $65 of operating cash flow per ton of steel products sold to third parties, payable at our discretion in cash or common stock of WPC;

	(iii)		25% of operating cash flow, above $65 of operating cash flow per ton of steel products sold to third parties, payable in cash; and

	(iv)		15% of operating cash flow below $30 of operating cash flow per ton of steel products sold to third parties, payable at our discretion in cash or common stock of WPC, subject to compliance with dilution limitations.

•		the trustee was authorized to sell up to 400,000 of the Initial Shares, at its discretion;

•		the proceeds of the sale of 400,000 of the Initial Shares, not to exceed $6.3 million, and the $3.0 million cash contribution previously made will be credited, over a limited period of time, against future Variable

(a)		The Company’s Annual Meeting of Stockholders was held on August 5, 2004, at the Hyatt Regency Pittsburgh International Airport, 1111 Airport Boulevard, Pittsburgh, Pennsylvania 15231.
(b)		At such Annual Meeting, the holders of the Company’s common stock elected the following nominees for director for a one-year term ending at the 2005 Annual Meeting: