Wheeling-Pittsburgh Corp. has provided an update on operational and financial expectations in light of recently quantified effects of the December 2004 ductwork collapse at the company’s basic oxygen furnace (BOF).

Approximately 10,000 tons of shipments were lost as a result of the previously announced BOF ductwork collapse, which interrupted operations for 12 days in December. Fourth quarter average selling prices per ton decreased slightly from third quarter, to about $740 per ton, while costs charged to operations are expected to be approximately $18 million more than in the third quarter.

Higher operating costs were principally related to maintenance spending in connection with planned outages at the hot strip and finishing mills, as well as costs incurred during the 12-day period following the BOF ductwork collapse, during which there was minimal production. Raw material costs increased slightly above third quarter levels despite significantly less purchased coke in the fourth quarter as the company achieved its targeted coke production levels in December.

The company now expects fourth quarter operating income to be approximately $8 to $9 million on shipments of approximately 503,000 tons. "We wanted to give the investment community a sense of the financial consequences of the BOF ductwork collapse and continuing raw material issues to the company," said James G. Bradley, Chairman, President and CEO, "BOF operations have resumed, and the start-up of our new EAF is progressing very well with production in December and January totaling 338 heats for 92,400 tons, versus the manufacturer's guaranteed performance of 186 heats and 46,500 tons — nearly double the expected production. We expect first quarter shipments to be in the 500,000 to 515,000 ton range."

Meanwhile, the company is pursuing insurance recoveries for property damage related to the BOF ductwork collapse, for which the $2 million deductible was recorded in the fourth quarter. The estimated impact of the collapse on fourth quarter earnings was approximately $23 million, before the impact on profit sharing and VEBA. In addition, shipments in the first quarter of 2005 are expected to be negatively impacted by a further loss of 85,000 tons. A business interruption claim is being prepared which, after the deductible, is expected to be significant. No recognition will be made in the fourth quarter for the anticipated recovery under the business interruption claim.

The company plans to issue full fourth quarter and annual 2004 results on March 14, 2005, as previously scheduled.

Wheeling-Pittsburgh Steel Corp. is a metal products company with approximately 3,100 employees. It has facilities in Steubenville, Mingo Junction, Yorkville and Martins Ferry, Ohio; Beech Bottom and Follansbee, W.Va.; and Allenport, Pa.