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AK Steel and Ohio EPA
Reach Milestone Agreement

April 1, 2004 — AK Steel Corp. has reached a Consent Agreement with the Ohio Environmental Protection Agency (OEPA) to settle all air nuisance claims, brought by the agency in 2000, related to the company's Middletown Works ironmaking and steelmaking facilities.

A major component of the settlement is AK Steel's commitment to install specific pollution control measures at the plant's blast furnace to meet the Maximum Achievable Control Measure (MACT) standards of the federal Clean Air Act by May 2005, one year ahead of the federal compliance date of May 2006. The company will install MACT controls on its basic oxygen furnaces by May 2006. AK Steel said it will cost $66 million to design, engineer and install the blast furnace and basic oxygen controls.

The company has also agreed to implement several programs to address concerns of neighbors living near the Middletown Works. AK Steel said it will initiate a cleaning program for the exteriors of cars and homes that are determined to be affected by dust from the blast furnace and basic oxygen furnace operations, until such time as the mill operations achieve compliance with the new MACT standards.

In addition, the company will establish a telephone response program whereby residents who believe they may have been affected by fugitive dust emissions from the company may set up an appointment to meet a representative of the company to investigate the complaint and make arrangements with the resident for reimbursement or for appropriate cleaning services for justified complaints.

The agreement includes a civil penalty of about $1.7 million which will be largely offset by the company's agreement to install the MACT controls on its blast furnace ahead of the established federal compliance date of May 2006. The company has also agreed to implement a number of Supplemental Environmental Projects aimed at addressing community concerns. The company has agreed to pay a civil penalty, beyond the early MACT compliance offset and the credit given for the cost of the additional projects, of approximately $260,000.

One Supplemental Project is the extension of the company's existing green belt of trees and other plants. The extension will consist of approximately 225 spruce, pine and pear trees, to be planted along the plant's property line between the coke operations and the Oneida neighborhood. Through other Supplemental Environmental Projects, the company will continue to provide satellite parking and intra-plant bus transportation for employees, an environmental enhancement that was part of the company's Bubble Concept pollution controls developed in the 1980s and not required under the MACT standards, and implement dust control measures beyond those required for iron ore unloading operations.

"This is a milestone agreement for AK Steel, Middletown and Ohio," said James L. Wainscott, President and CEO of AK Steel. "This agreement can pave the way for Middletown Works to make steel for another century while being even more responsive to the concerns of our neighbors. I want to thank Governor Bob Taft for his assistance to make tax-exempt financing available for this important manufacturing project that will help preserve good paying manufacturing jobs in southwestern Ohio," said Mr. Wainscott.

AK Steel said the Consent Agreement stipulates that all complaints and appeals by both parties will be dropped, and that by agreeing to the order, AK Steel does not make any admission of any allegations within those complaints. AK Steel said the Consent Agreement is subject to certain conditions, primarily filing notices or stipulations of dismissal of claims and appeals in various state court venues and necessary court approvals of the Consent Agreement.

AK Steel produces flat-rolled carbon, stainless and electrical steel products, as well as tubular steel products, for automotive, appliance, construction and manufacturing markets.

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