WHX CORP, 10-K405/A, 1995-04-19

WHX CORP
10-K405/A, 1995-04-19
STEEL WORKS, BLAST FURNACES & ROLLING MILLS (COKE OVENS)

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1994.

/ / TRANSITION REPORT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934

For the transition period from to

Commission file number 1-2394

WHX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 13-3768097
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
110 EAST 59TH STREET 10022
NEW YORK, NEW YORK (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 212-355-5200
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
---------------------------------------------------------------- ------------------------
<S> <C>
Common Stock, $.01 par value New York Stock Exchange
Series A Convertible Preferred Stock, $.10 par value New York Stock Exchange
Series B Convertible Preferred Stock, $.10 par value New York Stock Exchange
Warrants New York Stock Exchange
</TABLE>

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 / /

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

Aggregate market value of Common Stock held by non-affiliates of the
Registrant as of February 1, 1995 was approximately $315 million, which value,
solely for the purposes of this calculation excludes shares held by Registrant's
officers and directors. Such exclusion should not be deemed a determination by
Registrant that all such individuals are, in fact, affiliates of the Registrant.
The number of shares of Common Stock issued and outstanding as of February 1,
1995 was 27,763,623, including 469,429 shares of redeemable Common Stock.

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 / /

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PART I

ITEM 1. BUSINESS

OVERVIEW

WHX Corporation ("WHX"), (together with its consolidated subsidiaries, the
"Company"), indirectly through Wheeling-Pittsburgh Corporation ("WPC"), a
wholly-owned subsidiary, and Wheeling-Pittsburgh Steel Corporation ("WPSC"), a
wholly-owned subsidiary of WPC, is the ninth largest domestic integrated steel
manufacturer.

The Company and its subsidiaries were reorganized (the "Corporate
Reorganization") into a new holding company structure on July 26, 1994. The
steel-related businesses of the Company (including WPSC) continue to be owned by
WPC, and the other businesses and assets of the Company are owned by WHX
Corporation. Pursuant to the Corporate Reorganization, WPC became a wholly-owned
subsidiary of WHX. WHX, the new holding company, became the publicly held issuer
for all of the Common Stock, Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock and Warrants of the Company. In addition, WHX
guaranteed WPC's outstanding 9 3/8% Senior Notes due 2003 (the "Senior Notes")
and 12 1/4% First Mortgage Notes due 2000 (the "First Mortgage Notes"), as well
as certain other debt of WPC. The transactions were accounted for as a
reorganization of entities under common control. On the merger date, WHX had the
same consolidated net worth as WPC and its subsidiaries prior to the
reorganization.

Through its two operating units, the Steel Division and Wheeling
Corrugating Company ("Wheeling Corrugating"), the Company shipped 2.4 million
tons of steel products in 1994. In 1994, the Company reported sales of $1.19
billion and net income of $76.4 million (before a preferred stock dividend
requirement of approximately $13.2 million).

The Company's products include hot rolled and cold rolled sheet, and coated
products such as galvanized, prepainted 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, culvert, bridge form and
other products used primarily by the construction, highway and agricultural
markets.

The Company's strategy is to pursue growth in profitability through the
manufacture and sale of value-added steel products, and to moderate the impact
on the Company's earnings during periods of low steel demand. Its strategic
initiatives focus on:

- Expanding internally and through acquisition into value-added products,
while reducing the Company's reliance upon basic steel products;

- Deploying and investing in fixed assets that allow for high utilization
during periods of weak steel demand and expanded volume during periods of
strong steel demand; and

- Improving the Company's cost structure through prudent capital
expenditures, productivity increases, business improvement teams and a
cooperative partnership agreement with its union employees.

Value-added steel products. The Company seeks to further expand into the
manufacture of processed steel products, such as coated and fabricated steel,
while reducing its reliance upon basic products, such as hot rolled sheet. The
Company believes such products provide higher margins than are found on basic
steel products and are less sensitive to the steel industry cycle. The Company's
Wheeling-Nisshin Inc. joint venture ("Wheeling-Nisshin"), for example, which
commenced operations in 1988 and doubled its capacity in 1993, currently
produces over 600,000 tons annually of value-added products such as galvanized,
galvannealed and aluminized products and used approximately 415,000 tons of the
Company's cold rolled sheet in 1994.

Recently, the Company negotiated several transactions that furthered its
strategy of expansion into higher value-added products. In March 1995, the
Company acquired Unimast Incorporated ("Unimast"), a leading manufacturer of
steel framing and related accessories for residential and commercial building
construction with shipments of approximately 154,000 tons of steel products in
1994, for consideration of $27.5 million, including a loan to Unimast to repay
certain existing Unimast indebtedness, Unimast uses galvanized steel to

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manufacture steel framing components for wall, floor and roofing systems, in
addition to other roll formed expanded metal construction accessories. Unimast
also uses non-prime galvanized substrate for a material portion of its
requirements. As such, the Company will have an outlet to apply for further
processing some portion of its non-prime product. In December 1994, the Company
acquired the Bowman Metal Deck Division of Armco ("Bowman"), which is expected
to use approximately 40,000 tons of the Company's cold rolled and hot dipped
galvanized production annually for conversion into specialized construction
products for consideration of $4.5 million, plus payment for the inventory, and
the assumption of certain liabilities. In June 1994, the Company agreed to enter
into a joint venture with Dong Yang Tinplate Ltd. ("Dong Yang"), a leading South
Korea-based tin plate producer, and Nittetsu Shoji America, a U.S.-based tin
plate importer, to construct and operate a state-of-the-art tin coating line
facility in Belmont County, Ohio with an expected annual capacity of 250,000
tons. The Company will own 50% of the common stock of the tin mill joint
venture, Ohio Coatings Co., and will supply up to 100% of the steel substrate
used by the facility. The Company's commitment to the joint venture consists of
$22.5 million of cash and/or loan guarantees. The facility is expected to be
completed in 1997, at which time the Company will phase out its existing tin
mill production facilities which currently produce approximately 130,000 tons
annually. This will enable the Company to convert more hot rolled sheet into
tin-mill substrate as well as expand its line of tin-mill product offerings.

The Company's Wheeling Corrugating operations, its shipments to
Wheeling-Nisshin and the Company's tin plating, coating and cold rolling
operations accounted for 1.6 million tons, or approximately 69% of the Company's
shipments, in 1994. The Company believes that as a result of the proportion of
the Company's output that is further processed beyond the hot rolled stage, as
well as the rationalization of its fixed costs discussed below, the Company has,
since its reorganization pursuant to Chapter 11 of the Bankruptcy Code in 1990,
reported higher annual operating profits on a per ton basis than most of its
integrated steel competitors. In 1994, the Company generated an operating profit
of $34 per ton of steel product shipped.

Rationalization of fixed costs. The Company's strategy also focuses on the
minimization of fixed costs and maximization of capacity utilization throughout
the steel industry cycle. Since 1985, the Company's overall steelmaking capacity
has been reduced by 45%, or 2.0 million tons. As a result, the Company's
steelmaking operations are better balanced with its finishing operations,
resulting in capacity that is more efficiently employed. By having capacity at
its 80-inch hot strip mill in excess of its steelmaking capacity, the Company
seeks to take advantage of periods of strong steel demand by purchasing
semi-finished steel from third parties, while better absorbing its fixed costs
in periods of low demand by maintaining full utilization of its steel melting
facilities. The cost efficiencies afforded by this operating configuration
enhance the Company's ability to produce a low cost product. In furtherance of
this strategy, in September 1994 the Company entered into a joint venture with
ISPAT Mexicana, S.A. De C.V. ("ISPAT"), whereby ISPAT will sell to the joint
venture slabs it produces in Mexico and Canada, for conversion at the Company's
facilities in Steubenville, Ohio. The joint venture will convert the slabs into
hot rolled products which will be marketed by the Company to third-party trade
customers. The joint venture is equally owned by the Company and ISPAT and each
has committed initial contributions of $500,000. The joint venture provides the
Company greater flexibility in supplying slabs to the Company's 80-inch hot
strip mill in times of high steel demand as well as during blast furnace
outages.

Improving cost structure. The Company continually seeks to improve its
cost structure and product quality through capital expenditures, productivity
increases, business improvement teams and Cooperative Partnership Agreement
("CPA") with its union employees. In the past five years, the Company has spent
in excess of $428 million in capital expenditures to modernize and upgrade its
facilities, including upgrades to its cold rolling mills at its Allenport,
Pennsylvania and Yorkville, Ohio facilities in 1991 and 1993, respectively, and
the modernization of its 80-inch hot strip mill at Steubenville, Ohio in 1993.
The Company intends to spend approximately $100 million in 1995, which will
include approximately $40 million for a reline of the No. 5 blast furnace in
order to increase the productivity of that unit and provide the Company,
ultimately, with the ability to produce 100% of the hot metal necessary to
satisfy caster production requirements from a two, rather than the current
three, blast furnace configuration. This would allow the Company to idle one
blast furnace and possibly idle its older and less efficient coke ovens, which
the Company believes would result in a material reduction in future capital
expenditure requirements and manning levels.

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The following table lists operating statistics for the Company and the
steel industry (as reported by the American Iron and Steel Institute) for the
five-year period ending December 31, 1994.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1990 1991 1992 1993 1994
----- ----- ----- ----- -----
(TONS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Company Raw Steel Production............................... 2.49 2.22 2.35 2.26 2.27
Capability(1)............................................ 2.66 2.44 2.40 2.40 2.40
Utilization.............................................. 94% 91% 98% 94% 95%
Shipments................................................ 2.2 2.1 2.1 2.3 2.4
Industry Raw Steel Production.............................. 98.9 87.9 93.0 97.9 97.9
Capability............................................... 116.7 117.6 113.1 109.9 108.2
Utilization.............................................. 85% 75% 82% 89% 91%
Shipments................................................ 85.0 78.8 82.2 89.0 95.3
</TABLE>

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(1) The present raw steel capability of WPSC is approximately 2.4 million tons.
In February of 1991, WPSC ceased ingot processing. The 1991 raw steel
capability reflects ingot processing through February 1991.

Product Mix. The table below reflects the historical product mix of the
Company's shipments. Increases in the percentage of higher value-added products
have been realized during the 1990's as (i) the operations of Wheeling
Corrugating have been expanded and (ii) Wheeling-Nisshin's second coating line
increased its requirements of cold rolled coils from WPSC.

<TABLE>
<CAPTION>
HISTORICAL PRODUCT MIX
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YEAR ENDED DECEMBER 31,
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1990 1991 1992 1993 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PRODUCT CATEGORY:
Hot Rolled Products...................................... 36.6% 38.5%(a) 31.5% 31.2% 31.4%
Semi-Finished............................................ -- 1.7 -- 0.9 --
Higher Value-Added Products:
Cold Rolled Products -- Wheeling-Nisshin............... 9.7 11.4 12.0 15.6 17.3
Wheeling Corrugating Products.......................... 18.5 17.3 17.8 16.4 17.0
Coated Products........................................ 18.4 15.0 17.1 16.0 16.6
Cold Rolled Products -- Trade.......................... 5.6 6.9 11.4 11.1 10.5
Tin Mill Products (Tin and Black Plate)................ 11.2 9.2 10.2 8.8 7.2
----- ----- ----- ----- -----
Total.................................................... 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
OTHER DATA:
Higher Value-Added Products as a percentage
of total shipments..................................... 63.4% 59.8% 68.5% 67.9% 68.6%
</TABLE>

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(a) Includes export products representing 8.2% of total shipments in 1991.
Export sales were not significant in 1992, 1993 and 1994 and are not
expected to be significant in the foreseeable future.

STEEL DIVISION

Hot Rolled Products. Hot rolled coils represent the least processed of the
Company's finished goods. Approximately 69% of the Company's 1994 production of
hot rolled coils was further processed internally into value-added finished
products such as cold rolled coils. The balance of the tonnage is sold as hot
rolled black or pickled (acid cleaned) coils to a variety of consumers such as
converters/processors and steel service centers and the automotive and appliance
industries. The converters/processors transform the hot rolled coil into a
finished product such as pipe and tubing, while the service centers typically
slit or cut the material to size for resale to the end user. In July 1993, the
Company completed a $39 million modernization of its 80-inch hot strip mill
located at Steubenville, Ohio. The Steubenville project included installation of
a coil box

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and gauge controls that will improve gauge, shape and physical characteristics
on all tonnage passing through the hot strip mill.

From 1990 to 1994, the Company reduced its shipments of hot rolled products
from 36.6% to 31.4%, respectively, of its total product mix. Management projects
a further reduction in such percentage as resources are deployed to expand the
Company's downstream operations.

Cold Rolled Products. Cold rolled coils are manufactured from hot rolled
coils by employing a variety of processing techniques, including pickling, cold
reduction, annealing and temper rolling. Cold rolled processing is designed to
reduce the thickness and improve the shape, surface characteristics and
formability of the product. In its finished form, the product may be sold to a
variety of end users such as appliance or automotive manufacturers or further
processed internally into corrosion-resistant coated products including hot
dipped galvanized, electrogalvanized, or tin line products. In recent years, the
Company has increased its cold rolled production to support increased sales to
Wheeling-Nisshin, the expansion of Wheeling Corrugating and third-party sales of
its hot dipped and electrogalvanized products.

In May 1991, the Company completed an upgrade to its Allenport facility at
a cost of approximately $27 million that increased the productivity and
efficiency of Allenport's cold rolling mill. As the Allenport facility provides
substrate for the first line at Wheeling-Nisshin, that upgrade has enhanced the
Company's ability to support its supply commitments to Wheeling-Nisshin. To
further lower operating costs and improve its cost competitiveness, the Company
installed tension levelers at a cost of $13 million at its Yorkville and Martins
Ferry facilities. In 1992, the Company also undertook a $29 million automatic
gauge control project at its Yorkville cold rolling facility similar to that
undertaken at Allenport. This modernization, completed in 1993, has improved the
quality and productivity of the Yorkville tandem mill, which supplies a large
portion of the substrate for the second Wheeling-Nisshin line and tin and
galvanized products to the trade. Although both cold mills have been
substantially upgraded, each is relatively older compared to competitors'
facilities. The Company intends to continue to improve its cold-rolling
facilities to remain competitive, particularly as it pursues a strategy of
shifting product to higher value-added applications.

Coated Products. The Company manufactures a number of corrosion-resistant,
zinc-coated products including hot dipped galvanized sheets for resale to trade
accounts and to support the fabricating operations of Wheeling Corrugating. The
coated products are manufactured from a steel substrate of cold rolled or hot
rolled pickled coils by applying zinc to the surface of the material to enhance
its corrosion protection. The Company's trade sales of hot dipped galvanized
products are heavily oriented to unexposed applications, principally in the
appliance, construction, service center and automotive markets. Typical industry
applications include auto underbody parts, refrigerator backs and heating/air
conditioning ducts. Approximately 40% of hot dipped galvanized production
tonnage is transferred to Wheeling Corrugating for further processing. The
Company's hot dipped galvanized lines are older than those of certain of its
competitors and will require ongoing capital expenditures to remain competitive.
The Company also produces and sells electrogalvanized products for applications
in the appliance and construction markets. Unimast, which is expected to be
acquired during the first half of 1995, uses galvanized steel to manufacture
steel framing components for wall, floor and roofing systems.

Tin Mill Products. Tin mill products consist of tinplate and blackplate,
which products are utilized principally in the manufacture of food, beverage,
general line and aerosol containers. Blackplate is a cold rolled substrate
(uncoated) the thickness of which is less than .0142 inches and is utilized
extensively in the manufacture of pails and shelving. Tinplate is produced by
the electro-deposition of tin to a blackplate substrate. While the majority of
the Company's sales of these products is concentrated in a variety of container
markets, the Company also markets products for automotive applications, such as
oil filters and gaskets. The Company's participation in Ohio Coatings may enable
it to expand the Company's presence in the tin plate market. Ohio Coatings' $80
million tin coating mill, expected to commence operations in 1997, will have a
nominal annual capacity of 250,000 net tons. The Company will supply up to 100%
of the substrate requirements of the joint venture at market prices. The Company
and Nittetsu Shoji America, a U.S. based tin plate importer ("NSA") will act as
the distributors of the joint venture's products.

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WHEELING CORRUGATING (FABRICATED PRODUCTS)

Wheeling Corrugating is a leading fabricator of roll formed products for
the construction, highway, and agricultural products industries. In conjunction
with the Company's business strategy of expanding its sales of higher
value-added products, Wheeling Corrugating has increased its shipments of
fabricated products by approximately 50% since 1984. Following the establishment
of its Lenexa, Kansas and Minneapolis, Minnesota locations, Wheeling Corrugating
expanded its regional operations, through acquisitions, to Houston, Texas
(1986), Fort Payne, Alabama (1989), Wilmington, North Carolina (1993), and Gary,
Indiana and Warren, Ohio (1994). The regional presence of these facilities has
enabled Wheeling Corrugating to take advantage of low-cost barge freight from
the Company's Ohio Valley plants and to provide customers in the outlying areas
with competitive services through "just-in-time delivery." In many of its
product lines, Wheeling Corrugating has substantial market share and, therefore,
has increased opportunity to pursue higher profit margins. Wheeling Corrugating
intends to expand the manufacture, marketing and sale of products in which it
already has a significant market presence, including through potential
acquisitions and to take advantage of expected improvements in demand for
construction and highway products. The acquisition of Unimast, which is expected
to occur during the first half of 1995, will assist the Company in expanding its
market presence in these areas. The Company believes that it would be difficult
for a competitor to replicate Wheeling Corrugating's geographical breadth. The
following table sets forth certain shipment information relating to Wheeling
Corrugating's major product categories:

NET TONS SHIPPED BY WHEELING CORRUGATING

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1990 1991 1992 1993 1994
----- ----- ----- ----- -----
(TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Construction Products...................................... 182.0 158.4 157.0 146.2 151.7
Highway Products........................................... 128.3 109.2 115.3 119.0 137.7
Agricultural Products...................................... 88.8 90.2 91.8 100.7 113.6
Other...................................................... 8.1 5.2 4.6 4.0 4.0
----- ----- ----- ----- -----
Total Net Tons Shipped..................................... 407.2 363.0 368.7 369.9 407.0
===== ===== ===== ===== =====
</TABLE>

Construction Products. Construction products consist of roll-formed
sheets, which are utilized in the non-residential building markets such as
commercial, institutional and manufacturing. They are classified into three
basic categories. Roof decking is a formed steel sheet, painted or galvanized
product, which provides structural support in non-residential roofing systems.
Form deck is a formed steel sheet, painted, galvanized or uncoated, that
provides structural form support for structural or insulating concrete slabs in
non-residential floor or roofing systems. Composite floor deck is a formed steel
sheet, painted, galvanized or uncoated, that provides structural form support
and positive reinforcement for structural concrete slabs in non-residential
floor systems.

Highway Products. Highway products consist of three classifications of
material that are designed to service the highway construction industry. Culvert
products are hot dipped galvanized sheets and coils which are produced
predominantly from a hot rolled pickled substrate. Such products are marketed to
independent manufacturers of corrugated culvert pipe. Culvert pipe is spiral
formed or riveted corrugated pipe which is used for highway drainage
applications or in site preparation for homes, light buildings, and shopping
malls. Bridge form is roll-formed corrugated sheets which are swedged on both
ends and are utilized as concrete support forms in the construction of highway
bridges.

Agricultural Products. Agricultural products consist of roll-formed,
corrugated sheets which are used as roofing and siding in the construction of
barns, farm machinery enclosures and light commercial buildings. The products
can be manufactured from plain hot dipped galvanized coils or from painted coils
employing a zinc-coated base steel. Historically, these products have been sold
primarily in rural areas. In recent years, however, such products have found
increasing acceptance in light commercial buildings.

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<PAGE> 7

Other. Other products include a variety of hardened and non-hardened cut
nails sold under the trademark Labelle(R). These products are used for a number
of general construction applications including hardwood flooring work, masonry
work and boat building. Hot rolled sheet is employed as the base steel in the
manufacture of such products.

Wheeling Corrugating represented 21.3% or $254 million of the Company's net
sales in 1994. Management intends to continue to expand Wheeling Corrugating
through the acquisition of fabricating facilities that manufacture products
comparable or closely related to those of Wheeling Corrugating. In addition, the
Company's electrogalvanizing facility sold $48.6 million of steel products to
non-affiliated users in 1994, while providing an outlet for 63,000 tons of
steel. The Company intends to continue to expand its emphasis on value-added
products.

WHEELING-NISSHIN

The Company has a 35.7% equity interest in Wheeling-Nisshin, which
commenced commercial operations on April 1, 1988. Shipments by Wheeling-Nisshin
of hot dipped galvanized, galvannealed and aluminized products, principally to
the construction industry, have increased from 158,600 tons in 1988 to 628,766
tons in 1994.

In March 1993, Wheeling-Nisshin added a second hot dipped galvanizing line,
which increased its capacity by 67%, to approximately 600,000 annual tons and
allows Wheeling-Nisshin to offer the lightest-gauge galvanized sheet products
manufactured in the United States for the construction, heating, ventilation and
air-conditioning ("HVAC") and after-market automotive applications. Shipments of
cold rolled steel by the Company to Wheeling-Nisshin in 1994 were approximately
415,000 tons, or 17.3% of the Company's total tons shipped. The increase in
shipments of cold rolled sheet have reduced the Company's shipments of hot
rolled coils (a lower margin steel product) and is an integral part of the
Company's strategy of increasing its presence in higher value-added products.

The Company entered into an amended and restated agreement with
Wheeling-Nisshin in March 1993, which extended the term of the supply agreement
until 2013. Pursuant to the amended supply agreement, the Company will provide
not less than 75% of Wheeling-Nisshin's steel substrate requirements, up to an
aggregate maximum of 9,000 tons per week subject to product quality
requirements. Pricing under the supply agreement is negotiated quarterly based
on a formula which gives effect to competitive market prices.

OTHER STEEL RELATED OPERATIONS OF THE COMPANY

The Company owns an electrogalvanizing facility which had revenues of $48.6
million in 1994 and a facility that produces oxygen and other gases used in the
Company's steel-making operations. The Company is the owner of coal reserves
that have generated an average of $1.3 million in annual royalties from 1991 to
1994. The Company is also a 12 1/2% equity partner in an iron ore mining
partnership.

NON-STEEL RELATED INVESTMENTS OF THE COMPANY

In addition, the Company made the following non-steel related acquisitions.
In October 1994, WHX Entertainment Corp., a wholly-owned subsidiary of WHX,
purchased a 50 percent interest in the operations of Wheeling Downs Racing
Association ("Wheeling-Downs") from Sportsystems Corporation for $12.5 million.
Wheeling-Downs operates a racetrack and video lottery facility located in
Wheeling, West Virginia.

In April 1994, Wheeling-Pittsburgh Radio Corporation ("WPRC"), a
wholly-owned subsidiary of WHX, purchased three operating radio stations in
California and Hawaii (and an option to purchase a fourth station in Hawaii) for
$10.4 million from NewTex Communications, L.L.C. Subsequently, WPRC purchased a
fifth station for $1.6 million in the third quarter. In late November 1994, ASQ
Corporation ("ASQ"), a wholly-owned subsidiary of WPRC, entered into an
agreement whereby it obtained the right to acquire the assets and licenses of
six radio stations in the eastern and mid-western United States which are
managed by Cape Media Incorporated. ASQ is currently awaiting Federal
Communications Commission approval to complete the transaction.

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<PAGE> 8

CUSTOMERS

Through an extensive mix of products, the Company markets to a wide range
of manufacturers, converters and processors. The Company's 10 largest customers
(including Wheeling-Nisshin) accounted for approximately 37% of its net sales in
1992, and 40% in 1993 and 1994. Wheeling-Nisshin was the only customer to
account for more than 10% of net sales. Wheeling-Nisshin accounted for 10.2%,
13.3% and 15.5% of net sales in 1992, 1993, and 1994, respectively.
Geographically, the majority of the Company's customers are located within a
350-mile radius of the Ohio Valley. However, the Company has taken advantage of
its river-oriented production facilities to market via barge into more distant
locations such as the Houston, Texas and St. Louis, Missouri areas. As discussed
above, Wheeling Corrugating has acquired regional facilities to service an even
broader geographical area.

PERCENT OF TOTAL NET TONS SHIPPED

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
MAJOR CUSTOMER CATEGORY: 1990 1991 1992 1993 1994
- ------------------------------------------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Steel Service Centers................................. 35% 28% 36% 33% 32%
Converters/Processors................................. 18 21 20 26 28
Construction.......................................... 20 17 18 17 18
Containers............................................ 10 9 9 7 6
Automotive............................................ 8 7 7 6 6
Agriculture........................................... 4 5 5 5 5
Appliances............................................ 2 3 3 3 3
Exports(a)............................................ -- 8 -- 1 --
Other................................................. 3 2 2 2 2
---- ---- ---- ---- ----
Total....................................... 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
</TABLE>

- ---------------
(a) As a consequence of depressed domestic demand for steel products in 1991,
the Company marketed exports for the first time in over a decade. Owing to
these exports (principally to Japan, Korea and Mexico), the Company was able
to utilize a high level of its steelmaking capacity. Export sales were not
significant in 1992, 1993 and 1994 and are not expected to be significant in
the foreseeable future.

The Company's shipments historically have been concentrated within five
major market segments. The ability to offer competitively priced fabricated
products allows the Company to service a diverse customer base and maintain
relatively stable shipments (at virtually 100% of practical melting capacity
since 1987) even in periods of low steel demand. The Company's overall
participation in the construction and the converters/processors markets
substantially exceeds the industry average of approximately 20% for flat rolled
and tin mill products and its reliance on automotive shipments as a percentage
of total shipments is substantially less than the industry average of
approximately 24% for flat rolled and tin mill products. Set forth below is a
description of the Company's business with its five major customer categories.

Steel Service Centers. The Company's shipments to steel service centers
are heavily concentrated in the areas of hot rolled and hot dipped galvanized
coils. Due to increased in-house costs to steel companies during the 1980's for
processing services such as slitting, shearing and blanking, steel service
centers have become a major factor in the distribution of hot rolled products to
ultimate end users. In addition, steel service centers have become a significant
factor in the sale of hot dipped galvanized products to a variety of small
consumers such as mechanical contractors, who desire not to be burdened with
large steel inventories.

Converters/Processors. The Company's shipments to the
converters/processors market as a percentage of total shipments have grown from
18% in 1990 to 28% in 1994. This growth is principally attributable to the
increase in shipments of full hard and fully finished cold rolled products to
Wheeling-Nisshin, which uses cold rolled coils as a substrate to manufacture a
variety of coated products, including hot dipped galvanized and aluminized coils
for the automotive, appliance and construction markets. As a result of the
second line expansion, the Company's shipments to Wheeling-Nisshin increased
significantly in 1993 and 1994. The

7
<PAGE> 9

converters/processors industry also represents a major outlet for the Company's
hot rolled products, which are converted into finished commodities such as pipe,
tubing and cold rolled strip.

Construction. The Company's shipments to the construction industry are
heavily influenced by sales of Wheeling Corrugating, which services the
non-residential and agricultural building and highway industries, principally
through shipments of hot dipped galvanized and painted cold rolled products.
With its acquisition during the 1980's and early 1990's of regional facilities
in Houston, Texas; Fort Payne, Alabama; and Wilmington, North Carolina and in
1994 in Gary, Indiana and Warren, Ohio, Wheeling Corrugating has been able to
market its products into broad geographical areas, which the Company expects
will mitigate the effects of regional economic downturns in the construction
business. The acquisition of Unimast, which is expected to occur during the
first half of 1995, will increase the Company's shipments to the construction
industry and its ability to market its products to broad geographic areas.
Unimast has facilities located in Franklin Park, Illinois; Warren, Ohio; Morrow,
Georgia; Boonton, New Jersey and Mansfield, Texas.

Containers. The vast majority of the Company's shipments to the container
market are concentrated in tin mill products, which are utilized extensively in
the manufacture of food, aerosol, beverage and general line cans. The container
industry has represented a stable market subject to relatively little
recessionary impact. In addition, the Company considers the current balance
between supply and demand for tin mill products as the most favorable of major
product categories within the domestic steel industry. The balance of the
Company's shipments to this market consists of cold rolled products for pails
and drums, and hot rolled products for steel strapping.

Automotive. Unlike the majority of its competitors, the Company is not
heavily dependent on shipments to the automotive industry. However, the Company
has established a variety of higher value-added niches in this market,
particularly in the area of hot dipped galvanized products for deep drawn
automotive underbody parts. In addition, the Company has been a supplier of tin
mill products for automotive applications, such as oil filters and gaskets. A
third niche has been the Company's participation in painted electrogalvanized
products for auto draft stripping applications. The Company also markets to the
automotive industry through Wheeling-Nisshin, which is a major supplier of
aluminized sheet for muffler and tailpipe assemblies.

RAW MATERIALS

The Company obtains approximately half of its iron ore from spot and
medium-term purchase agreements at or below prevailing world market prices. It
has commitments for the majority of its blast furnace iron ore pellet needs
through 1995 from suppliers in North America. Effective January 1, 1992, the
Company increased its ownership interest in a mine located in Palmer, Michigan
and owned by Empire Iron Mining Partnership ("Empire") from 10% to 12.5%. The
Company is obligated to purchase approximately 12.5%, or 1,000,000 gross tons
per year (at current production levels), of the mine's annual ore output.
Interest in related ore reserves as of December 31, 1994, is estimated to be
28,199,750 gross tons. In 1994, the Company consumed approximately 2,388,000
gross tons of iron ore pellets in its blast furnaces. The Company is
contingently liable for its share of Empire's liabilities incurred, including
principal and interest on long-term debt. The Company's share of the principal
amount of such obligations was approximately $4.5 million at December 31, 1994,
which is payable in annual installments through 1996. Debt service payments are
made by Empire and the costs are passed on to its partners. The Company's pro
rata cash operating cost of Empire currently approximates the market price of
ore.

In November 1993, the Company sold the operating assets of its coal company
to an unrelated third party. The Company also entered into a long term supply
agreement with such third party to provide the Company with a substantial
portion of the Company's coal requirements at competitive prices. The Company's
operations require a substantial amount of coking coal.

The Company currently produces all of its coke requirements and typically
consumes all of the resultant by-product coke oven gas. In 1994, approximately
1.7 million tons of coking coal were consumed in the production of blast furnace
coke by the Company. Due to a planned reline of its No. 5 blast furnace, the

8
<PAGE> 10

Company plans thereafter to idle one of its blast furnaces and possibly idle its
older, less efficient coke ovens. The Company may continue to sell its excess
coke and coke oven by-products to third-party trade customers.

Material amounts of other raw materials, including limestone, oxygen,
natural gas and electricity, are required. These raw materials are readily
available and are purchased on the open market. The Company is presently
dependent on external scrap for approximately 7% of its steel melt. The cost of
these materials has been susceptible in the past to price fluctuations, but
worldwide competition in the steel industry has frequently limited the ability
of steel producers to raise finished product prices to recover higher material
costs. Certain of the Company's raw material supply contracts provide for price
adjustments in the event of increased commodity or energy prices.

BACKLOG

Order backlog was 420,900 net tons at December 31, 1994, compared to
422,400 tons at December 31, 1993. All orders related to the backlog at December
31, 1994 are expected to be shipped during the first half of 1995, subject to
delays at the customers' request. All of the December 31, 1993 backlog (except
for insignificant cancellations) was filled during 1994. The order backlog
represents orders received but not yet completed or shipped. In times of strong
demand, a higher order backlog may allow the Company to increase production
runs, thereby enhancing production efficiencies.

CAPITAL EXPENDITURES

The Company's capital expenditures (including capitalized interest) for
1994 were approximately $82.0 million, including $8.7 million on environmental
projects. From 1990 to 1994, such expenditures aggregated approximately $428
million. This level of capital expenditures was needed to maintain productive
capacity, improve productivity and upgrade selected facilities to meet
competitive requirements and maintain compliance with environmental laws and
regulations. Since 1985, the Company's capital expenditure program has been and
continues to be aimed at maintaining its core production capabilities and
selectively upgrading product characteristics. The capital expenditure program
has included improvements to the Company's infrastructure, blast furnaces,
steelmaking facilities, 80-inch hot strip mill and finishing operations, and has
resulted in improved shape, gauge, surface and physical characteristics for its
products. In particular, the quality improvements completed at the Allenport
cold rolling facility in 1992 and the installation of automatic gauge controls
at the Yorkville tandem mill in 1993 have enhanced productivity and have
improved the quality of substrate provided to Wheeling-Nisshin and other
customers. Continuous and substantial capital and maintenance expenditures will
be required to maintain operating facilities, modernize finishing facilities to
remain competitive and to comply with environmental control requirements. The
Company anticipates funding its capital expenditures in 1995 from cash on hand
and funds generated by operations.

ENERGY REQUIREMENTS

During 1994, coal constituted 73% of the Company's total energy
consumption, natural gas 21% and electricity 6%. Many of the Company's major
facilities that use natural gas have been equipped to use alternative fuels. The
Company continually monitors its operations regarding potential equipment
conversion and fuel substitution to reduce energy costs.

EMPLOYMENT

Total employment of the Company averaged 5,481 employees during 1994, of
which 4,265 were represented by the United Steel Workers of America ("USWA"),
and 63 by other unions. The remainder consisted of 979 salaried employees, 96
non-union operating employees and 78 employees of Wheeling-Pittsburgh Radio
Corporation.

The Company's prior labor agreement with the USWA expired on March 1, 1994.
At such time, the Company and the USWA were unable to reach agreement on certain
material terms of a new labor agreement, resulting in a two-day strike. On March
3, 1994, the Company and the USWA reached agreement on the terms of a new labor
agreement. The new labor agreement, which was ratified by the rank and file of
the USWA on April 18, 1994, expires on October 1, 1996. The principal terms of
the new labor agreement, among

9
<PAGE> 11

other things, are hourly wage increases, lump sum bonuses plus a contingent
payment to be paid in May 1996 based on profitability of WPSC in 1995,
improvements in severance and defined contribution pension plans, a negative
pledge on WPSC's property, plant and equipment in excess of amounts permitted to
be borrowed under the indenture for the Senior Notes, an agreement to partially
fund retiree medical benefits and the right of the USWA to have a representative
appointed to the Board of Directors of WPC. Upon the expiration of an agreement
between WPC and the Pension Benefit Guarantee Corporation during WPC's Chapter
11 reorganization (the "PBGC Agreement"), it is likely that the USWA will
request that the Company adopt a defined benefit pension plan for the benefit of
the Company's employees represented by the USWA.

WPC, as a signatory to the collective bargaining agreement between WPSC and
the USWA, is liable for all obligations under the collective bargaining
agreement, including 100% of WPSC's obligations to provide medical insurance,
life insurance, disability and surviving spouse retirement benefits to WPSC's
retired employees and their dependents ("WPSC Retiree Benefits") and WHX has
certain liability with respect to a portion of such benefits. WPC also is bound
by certain agreements with the USWA relating to (a) restrictions on dividends
payable to WPC by WPSC to the extent of 50% of the cumulative net income of WPSC
since the consummation of the Plan of the Company's predecessor on January 3,
1991, (b) tax sharing arrangements between WPC and WPSC and (c) a right of first
refusal held by the respective employees of WPSC to purchase, generally, certain
of WPSC's facilities in the event of the proposed sale of such facilities or of
the ownership interest therein.

Certain integrated steel companies implemented multicrafting in the late
1980's and realized productivity gains. The Company is working actively with its
local and international union representatives to improve work rules and
efficiencies in its manufacturing plants. These efforts include a comprehensive
multicrafting program, from which the Company expects to realize benefits
similar to those realized by its competitors.

The cooperative partnership agreement has been an integral part of the
Company's collective bargaining agreements since 1985 and a model for USWA
contracts with other integrated steel companies. Under the cooperative
partnership agreement, employees meet regularly to explore means of improving
operations and their working relationship. Union and management are currently
exploring ways to expand the cooperative partnership agreement. The utilization
of business improvement teams began in 1992 and entails a detailed analysis of
production processes and operations by teams of hourly and salaried personnel.
In addition to fostering closer cooperation among Company employees, these teams
have produced suggestions for production and operating efficiencies that have
resulted in cost savings.

The Company provides defined contribution pension programs for both hourly
and salaried employees. The Company currently funds its obligations for each of
the defined contribution plans.

COMPETITION

The market for steel in the United States is supplied principally by
domestic integrated steel producers, domestic steel mini-mills and foreign steel
producers. The integrated producers typically operate large plants with annual
capacities of one million tons or more. These plants produce steel from a
combination of iron ore, coke and steel scrap using blast furnaces and basic
oxygen furnaces. Steel mini-mills utilize electric furnaces and are able to
produce steel utilizing primarily ferrous scrap metal as their basic raw
material and serve regional markets. Until recently, technology constraints
limited mini-mills' ability to produce sheet steel products. However, at least
one mini-mill now produces sheet products based on a new technology known as
thin-slab casting. Mini-mills use steel scrap as a primary raw material. The
price of such scrap fluctuates; during periods when scrap prices are at a high
point, the operating costs of mini-mills may rise in relation to those of
integrated mills, such as the Company.

As the single largest steel consuming country in the western world, the
United States has long been a favorite market of steel producers in Europe and
Japan. Steel producers from emerging economic powers such as Korea, Taiwan and
Brazil have also recognized the United States as a target market. Many domestic
producers have found it to their advantage to form joint venture operations with
foreign producers as a way to acquire capital, technology and access to
affiliated customers.

10
<PAGE> 12

The steel industry is cyclical in nature and has been marked historically
by overcapacity, resulting in intense competition among domestic and foreign
producers exporting to the United States. Although domestic industry capacity
has been substantially reduced through strategies such as that of the Company,
overall throughput capacity still significantly exceeds demand due to
construction of mini-mills and continuing production efficiencies. The result
has been continuing intense competition and price volatility.

Total annual steel consumption in the United States has fluctuated between
88 million and slightly over 100 million tons since the early 1980s. A number of
steel substitutes, including plastics, aluminum, composites and glass, have
reduced the growth of domestic steel consumption in some markets.

Steel imports as a percentage of domestic apparent consumption, excluding
semi-finished steel, have been approximately 16% in 1992, 14% in 1993 and 20% in
1994. Strong world steel demand, attractive world export prices, U.S. dollar
exchange rates and the improved international competitiveness of the domestic
steel industry have all been factors in these import levels. However, the strong
performance of the U.S. economy, relative to weaker economies in Europe and
Japan, resulted in increased imports in 1994.

ITEM 2. PROPERTIES

The Company has one raw steel producing plant and various other finishing
and fabricating facilities. The Steubenville plant is an integrated steel
producing facility located at Steubenville and Mingo Junction, Ohio and
Follansbee, West Virginia. It is the Company's only raw steel producing
facility. Facilities include a sinter plant, coke oven batteries that produce
all coke requirements, three operating blast furnaces, two basic oxygen
furnaces, a two-strand continuous slab caster with an annual slab production
capacity of approximately 2.4 million tons, an 80-inch hot strip mill and
pickling and coil finishing facilities. The Ohio and West Virginia locations,
which are separated by the Ohio River, are connected by a railroad bridge owned
by the Company. A pipeline is maintained for the transfer of coke oven gas for
use as fuel from the coke plant to several other portions of the Steubenville
plant. The Steubenville plant primarily produces hot rolled products, which are
either sold to third parties or shipped to other affiliated facilities for
further processing. WPRC has broadcasting studios, radio antenna and tower
facilities in Fresno, California and Honolulu, Hawaii.

The following table lists the other principal plants of the Company and the
annual capacity of and the major products produced at each facility:

OTHER MAJOR FACILITIES

<TABLE>
<CAPTION>
LOCATION, OPERATIONS AND CAPACITY (TONS/YEAR) MAJOR PRODUCTS
- -------------------------------------------------------- -----------------------------------
<S> <C>
Allenport, Pennsylvania: Continuous pickler, tandem
mill,
temper mills and annealing (950,000).................. Cold rolled sheets
Beech Bottom, West Virginia: Paint line and various roll
forming equipment (120,000)........................... Painted steel in coil form,
structural forms and decking
Canfield, Ohio: Electrogalvanizing line, paint line,
ribbon
and oscillating rewind slitters (65,000).............. Electrolytic galvanized sheet and
strip
Martins Ferry, Ohio: Temper mill, zinc coating lines and
roll forming equipment (750,000)...................... Hot dipped galvanized sheets and
coils and formed steel products
Wheeling, West Virginia: Shotblaster, nailers and heat
treating (5,000)...................................... Cut nails
Yorkville, Ohio: Continuous pickler, tandem mill, temper
mill, annealing and tin plating lines (660,000)....... Tinplate, black plate and cold
rolled sheets
</TABLE>

All of the Company's major facilities operated at substantially full
utilization levels during 1994.

11
<PAGE> 13

Wheeling Corrugating fabricates products at Fort Payne, Alabama; Houston,
Texas; Lenexa, Kansas; Louisville, Kentucky; Minneapolis, Minnesota; Warren,
Ohio; Gary, Indiana; and Wilmington, North Carolina. The Fort Payne, Houston and
Wilmington facilities were acquired in 1986, 1989 and 1993, respectively. The
Gary and Warren facilities were acquired in 1994. In addition, the Company
operates six plants located throughout the United States that fabricate culvert
pipe from sheet metal. The Company maintains five regional sales offices for
flat rolled and tin mill products and nine sales offices and/or warehouses for
fabricated products. Unimast, which is expected to be acquired during the first
half of 1995, has facilities located at Franklin Park, Illinois; Warren, Ohio;
Morrow, Georgia; Boonton, New Jersey and Mansfield, Texas.

All of the above facilities currently owned by the Company are regularly
maintained in good operating condition. However, continuous and substantial
capital and maintenance expenditures are required to maintain the operating
facilities, to modernize finishing facilities in order to remain competitive and
to meet environmental control requirements.

All of the above facilities and substantially all of the other real
property of the Company are owned in fee by the Company (exclusive of coal lands
held by subsidiaries or corporations in which the Company has an interest) and
are subject to the first lien that secures ratably (i) the $9.5 million of the
First Mortgage Notes and (ii) the $14.2 million face amount (as of December 31,
1994) of Tax Benefit Transfer Letters of Credit issued to support the sale of
tax benefits associated with the construction of the slab caster located at the
Company's Steubenville facility.

ITEM 3. LEGAL PROCEEDINGS

ENVIRONMENTAL MATTERS

The Company, as are other steel manufacturers, is subject to increasingly
stringent standards relating to the protection of the environment. In order to
facilitate compliance with these environmental standards, the Company has
incurred capital expenditures for environmental control projects aggregating
$9.9 million, $8.0 million and $8.7 million for 1992, 1993 and 1994,
respectively. The Company anticipates spending approximately $67.9 million on
major environmental projects through 1998. Due to the possibility of
unanticipated factual or regulatory developments, the amount of future
expenditures may vary.

The Company has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act
("Superfund") or similar state statutes at the following sites: MIDC Municipal
Landfill, Elizabeth, Pennsylvania; United Scrap Lead, Troy, Ohio; Buckeye
Reclamation Landfill, St. Clairsville, Ohio; Tex Tin Site, Texas City, Texas;
Four County Landfill, Rochester County, Indiana; Aqua Tech Site, Greer, South
Carolina; and Beazer East Site, Follansbee, West Virginia. The Company is
subject to joint and several liability imposed by Superfund on potentially
responsible parties. Due to the technical and regulatory complexity of remedial
activities and the difficulties attendant to identifying potentially responsible
parties and allocating or determining liability among them, the Company is
unable to reasonably estimate the ultimate cost of compliance with superfund
laws. The Company believes, based upon information currently available, that the
Company's liability for clean up and remediation costs in connection with one of
these sites will be between $1 million and $4 million. At four other sites the
costs are estimated to aggregate between $25,000 and $250,000. The Company lacks
sufficient information regarding the remaining sites to form an estimate. Based
upon available information, the Company does not anticipate that assessment and
remediation costs resulting from the Company being a potentially responsible
party will have a material adverse effect on the financial condition or results
of operations of the Company. However, as further information comes into the
Company's possession, it will continue to reassess such evaluations.

The Clean Air Act Amendments of 1990 (the "Clean Air Act") will directly
affect the operations of many of the Company's facilities, including its coke
ovens. Under the Clean Air Act, coke ovens generally will be required to comply
with progressively more stringent standards which will result in an increase in
environmental capital expenditures and costs for environmental compliance. The
costs associated with

12
<PAGE> 14

anticipated compliance with these standards for the immediate future in the
amount of $13.8 million have been included in anticipated capital expenditure
requirements.

On March 31, 1993, the EPA notified the Company of Clean Air Act
violations, alleging particulate matter and hydrogen sulfide emissions in excess
of allowable concentrations, at the Company's Follansbee Coke Plant. The Company
received a letter dated September 1, 1993 from the EPA demanding $2.5 million in
penalties in settlement of notices of violations arising out of pushing emission
and desulfurization emissions at the Company's Follansbee plant which have
occurred since 1991. A complaint encompassing the alleged violations was filed
by the Department of Justice in the U.S. District for the Northern District of
West Virginia on December 3, 1993. The parties have reached a tentative
agreement to settle the civil penalties related to this matter for $700,000. The
Company has accrued for the cost of this settlement.

In an action brought in 1985 in the U.S. District Court for the Northern
District of West Virginia, the EPA claimed violations of the Solid Waste
Disposal Act at a surface impoundment area at the Follansbee facility. The
Company and the EPA entered into a consent decree in October 1989 whereby soil
and groundwater testing and monitoring procedures are required. The Company has
submitted, and is awaiting EPA approval of, a testing and monitoring plan. The
extent and cost of remediation cannot be ascertained until testing in accordance
with an approved plan is completed.

By letter dated March 15, 1994 the Ohio Attorney General advised the
Company of its intention to file suit on behalf of the Ohio EPA for alleged
hazardous waste violations at the Company's Steubenville, Mingo Junction,
Martins Ferry and Yorkville facilities. In subsequent correspondence the State
demanded a civil penalty of approximately $289,000 in addition to injunctive
relief. The injunctive relief consists of remedial activities at each facility
aggregating less than $125,000, the initiation of a waste minimization program
at the affected facilities and a Company wide compliance assessment. The Company
is in the process of conducting settlement negotiations which would include the
payment of penalties below the amount requested.

The Company is currently operating in substantial compliance with three
consent decrees (two with the EPA and one with Pennsylvania Department of
Environmental Resources) with respect to wastewater discharges at Allenport,
Pennsylvania and Mingo Junction, Steubenville, and Yorkville, Ohio.

The Company is aware of several environmental issues resulting from
operations, which include leakage from underground and aboveground storage
tanks, and the disposal and storage of residuals on its property. Each of these
situations is being assessed and remediated in accordance with regulatory
requirements. The Company does not believe the resolution of these issues or
other litigation occurring in the normal course of business will have a material
adverse effect on the financial condition or results of operations of the
Company.

Based upon the Company's prior capital expenditures, anticipated capital
expenditures, consent agreements negotiated with Federal and state agencies and
information available to the Company on pending judicial and administrative
proceedings, the Company does not expect its environmental compliance costs,
including the incurrence of additional fines and penalties, if any, relating to
the operation of its facilities, to have a material adverse effect on the
financial condition or results of operations of the Company.

GENERAL LITIGATION

The Company is a party to various litigation matters including additional
general liability claims covered by insurance. In the opinion of management,
such claims are not material to the financial condition of the Company.

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

NOT APPLICABLE

13
<PAGE> 15

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS

Pursuant to the Corporate Reorganization on July 26, 1994, WPC has become a
wholly-owned subsidiary of WHX and continues to own the steel-related businesses
of the Company, and WHX, the new holding company, owns the other businesses and
assets of the Company. WHX became the publicly held issuer for all of the Common
Stock, Series A Convertible Preferred Stock and Warrants of the Company. In
addition, WHX guaranteed WPC's outstanding public debt, the Senior Notes and the
First Mortgage Notes, and its privately held debt.

The number of shares of Common Stock issued and outstanding as of February
1, 1995 was 27,763,623, including 469,429 shares of redeemable common stock. At
February 1, 1995, 1,519,022 warrants were outstanding. Each warrant entitles the
holder thereof to purchase from WHX one share of Common Stock at any time on or
before January 3, 1996 at an exercise price of $6.3583 per share. The exercise
price may be paid by tendering cash, certain indebtedness of the Company having
a face amount (plus accrued but unpaid interest) equal to the full exercise
price or any combination of cash and such indebtedness.

The prices set forth in the following table represent the high and low
sales prices for WHX's (and prior to the Corporate Reorganization, WPC's) Common
Stock and warrants:

<TABLE>
<CAPTION>
COMMON STOCK WARRANTS
------------------- -------------------
HIGH LOW HIGH LOW
------- ------- ------- -------
<S> <C> <C> <C> <C>
1993
First Quarter............................... $10.750 $ 4.875 $ 5.375 $ 1.500
Second Quarter.............................. 14.125 8.750 8.625 4.250
Third Quarter............................... 15.250 10.000 9.750 5.625
Fourth Quarter.............................. 18.250 14.625 12.000 9.125

1994
First Quarter............................... 22.625 14.500 16.630 8.750
Second Quarter.............................. 19.625 14.250 13.375 8.875
Third Quarter............................... 19.750 15.750 13.500 10.250
Fourth Quarter.............................. 17.500 12.875 11.375 7.125
</TABLE>

As of February 1, 1995, there were approximately 10,879 recordholders of
WHX's Common Stock and 1,835 recordholders of its warrants.

WHX intends to retain any future earnings for working capital needs and to
finance capital improvements and presently does not intend to pay cash dividends
on the Common Stock for the foreseeable future. In addition the terms of the
Company's senior debt place certain limitations on WHX's ability to pay cash
dividends.

14
<PAGE> 16

ITEM 6. SELECTED FINANCIAL DATA
FIVE-YEAR STATISTICAL (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PROFIT AND LOSS:
Net sales............................ $1,102,527 $ 957,307 $ 929,786 $1,046,795 $1,193,878
Cost of products sold (excluding
depreciation and profit sharing)... 909,727 834,036 815,801 876,814 979,277
Depreciation......................... 48,933 44,982 54,931 57,069 61,514
Profit sharing....................... -- -- -- 4,819 9,257
Selling, administrative and general
expense............................ 62,094 65,217 67,105 58,564 64,540
Restructuring charges................ -- -- 7,098 -- --
---------- ---------- ---------- ---------- ----------
Operating income (loss).............. 81,773 13,072 (15,149) 49,529 79,290
Interest expense on debt............. -- 24,679 21,659 21,373 22,581
Other income......................... 8,409 8,682 3,181 11,965 17,925
B & LE Settlement.................... -- -- -- -- 36,091
---------- ---------- ---------- ---------- ----------
Income (loss) before reorganization
items, taxes, extraordinary items
and cumulative effect of accounting
changes............................ 90,182 (2,925) (33,627) 40,121 110,725
Reorganization items gain (loss)..... (289,547) -- -- -- --
Tax provision (benefit) and charge in
lieu of income tax................. 10,205 (7,642) -- 9,400 24,360
---------- ---------- ---------- ---------- ----------
Income (loss) before extraordinary
items.............................. (209,570) 4,717 (33,627) 30,721 86,365
Extraordinary items.................. 158,563 -- -- (36,953) (9,984)
---------- ---------- ---------- ---------- ----------
Net income (loss).................... (51,007) 4,717 (33,627) (6,232) 76,381
Preferred stock dividends............ -- -- -- 4,713 13,175
---------- ---------- ---------- ---------- ----------
Net income (loss) applicable to
common stock....................... $ (51,007) $ 4,717 $ (33,627) $ (10,945) $ 63,206
========== ========== ========== ========== ==========
Net income (loss) per share (1)
Operations......................... -- $ .27 $ (1.85) $ 1.02 $ 2.54
Extraordinary...................... -- -- -- (1.45) (.35)
---------- ---------- ---------- ---------- ----------
Net................................ -- $ .27 $ (1.85) $ (.43) $ 2.19
========== ========== ========== ========== ==========
Average number of common shares
outstanding........................ -- 17,184 18,194 25,452 28,833
FINANCIAL POSITION:
Cash, cash equivalent and short term
investments........................ $ 64,742 $ 44,797 $ 8,658 $ 279,856 $ 401,606
Working capital...................... 230,687 148,512 104,728 398,051 524,051
Property, plant and equipment -- net. 690,886 742,824 752,518 748,673 768,284
Plant additions and improvements..... 107,320 97,420 67,318 73,652 82,020
Total assets......................... 1,268,420 1,173,718 1,116,732 1,491,600 1,729,908
Long term debt....................... 301,974 225,017 213,826 346,823 289,500
Stockholders' equity................. 250,000 263,500 230,696 432,283 692,254

NUMBER OF STOCKHOLDERS:
Common............................... 5,171 8,769 8,893 8,648 8,729
Series A Convertible Preferred....... -- -- -- 30 27
Series B Convertible Preferred....... -- -- -- -- 22

EMPLOYMENT
Employment costs..................... $ 365,919 $ 330,223 $ 329,388 $ 322,985 $ 328,584
Average number of employees.......... 6,297 5,811 5,684 5,381 5,403

PRODUCTION AND SHIPMENTS:
Raw steel production -- tons......... 2,487,000 2,222,000 2,351,000 2,258,000 2,270,000
Shipments of steel products -- tons.. 2,205,000 2,093,000 2,068,000 2,251,000 2,397,000
</TABLE>

- ---------------
(1) Per share amounts for years prior to 1991 are not meaningful due to the
substantial change in number of shares issued pursuant to the Plan.

15
<PAGE> 17

Notes to Five-Year Statistical Summary

A Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code was
filed by the Company's predecessor and the Official Committee of Unsecured
Creditors on July 11, 1990 (the "Plan"). The Plan was confirmed on December 18,
1990 and substantially consummated on January 3, 1991.

The Plan created a holding company structure as follows: the Company's
predecessor changed its name to Wheeling-Pittsburgh Corporation and incorporated
a new wholly owned subsidiary named Wheeling-Pittsburgh Steel Corporation to
which substantially all of the Company's operating assets and liabilities were
transferred.

Chapter 11 claims filed against the Company and subsequently allowed in the
bankruptcy proceedings totaled approximately $1.3 billion, which exceeded the
amount of liabilities recorded at the time of filing by $390.4 million. The Plan
discharged the claims through distribution of $587 million in cash and escrow
accounts, the issuance of $306 million of long-term debt, the issuance of
8,500,000 shares of Common Stock to secured creditors, 5,593,944 shares of
Common Stock to unsecured creditors (all of which were classified as redeemable
common stock under the Plan) and 5,810,000 shares of Common Stock to
preconfirmation preferred and common stock equity holders. The value of the cash
and securities distributed was $158.5 million less than the allowed claims; the
resultant gain was recorded as an extraordinary gain.

The sum of the allowed claims plus post petition liabilities exceeded the
value of preconfirmation assets. Also, the Company experienced a change in
control as pre-reorganization equity holders received less than 30% of the
Common Stock issued pursuant to the Plan. AICPA Statement of Position 90-7 ("SOP
90-7"), Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code requires that under these circumstances, a new reporting entity is created
and assets and liabilities should be recorded at their fair values. This
accounting treatment is referred to in these statements as fresh start
reporting.

The Company adopted fresh start reporting in accordance with the SOP 90-7
in preparing its final balance sheet, income statement and statement of cash
flows as of December 31, 1990. That balance sheet became the opening balance
sheet for WPC. The black line denotes the change in reporting entity and basis
of reporting for the Company.

The Company recorded a fourth quarter 1992 restructuring charge of $7.1
million to reflect the elimination of 156 salaried positions through a
separation incentive program. The job eliminations represented 13% of the
salaried workforce.

In 1991 the tax benefit of $7.6 million consists of a current year
provision of $1.1 million of alternative minimum tax ("AMT"), and a reduction of
$8.7 million in federal income tax reserves. The AMT provision excludes the
benefit ($.9 million) of net operating loss carryforwards of the pre-reorganized
entity.

During 1990, the Company adopted the accounting requirements of the
Statement of Financial Accounting Standards No. 106 ("SFAS 106") "Employers'
Accounting for Postretirement Benefits Other Than Pensions." In adopting SFAS
106, the Company changed the period over which the post-employment medical and
life insurance benefits are accrued from the employee service retirement date to
the date the employee reaches full benefit eligibility. Additionally, the
Company elected to delay the recognition of changes to the unfunded obligations
that arise from the effects of current actuarial gains and losses, the effects
of changes in assumptions and the effects of plan amendments.

In contrast to postreorganization years, had interest been accrued on
non-fully secured debt under prepetition terms and conditions, interest expense,
before reduction for capitalized interest, would have increased by approximately
$51.4 million in 1990.

In 1993 the Company recorded extraordinary charges of $37.0 million, net of
taxes, for premiums paid on early debt retirement and to provide for coal
retiree medical benefits.

16
<PAGE> 18

Those benefits include, among others, disability, severance and workers'
compensation. The Company recorded a charge of $12.2 million ($10.0 million net
of tax) in the 1994 first quarter as a result of the cumulative effect on prior
years of adoption of the change in accounting method.

The Company and its subsidiaries were reorganized into a new holding
company structure on July 26, 1994. The steel-related businesses of the Company
(including WPSC) continue to be owned by WPC, and the other businesses and
assets of the Company are owned by WHX Corporation. Pursuant to the
reorganization, WPC became a wholly-owned subsidiary of WHX. WHX, the new
holding company, became the publicly held issuer for all of the Common Stock,
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
Warrants of the Company. In addition, WHX guaranteed WPC's outstanding Senior
Notes and First Mortgage Notes as well as certain other debt of WPC. The
transactions were accounted for as a reorganization of entities under common
control. On the merger date, WHX had the same consolidated net worth as WPC and
its subsidiaries prior to the reorganization.

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

RESULTS OF OPERATIONS

1994 COMPARED TO 1993

Net sales for 1994 totaled $1,193.9 million on shipments of steel products
of 2.4 million tons, compared to $1,046.8 million on shipments of 2.3 million
tons in 1993. The 14.1% increase in net sales revenue reflects a 6.5% increase
in shipping volume due to improved demand for steel products and a 6.5% increase
in steel prices. Average product prices increased by 7.1% from $465 to $498 per
ton shipped.

Cost of goods sold increased to $408 per ton shipped in 1994 from $389 per
ton shipped in 1993. The increase was due to consumption of a greater proportion
of purchased versus internally produced slabs (semi-finished steel), increased
employment costs and price increases on purchased slabs and scrap. The Company
purchased slabs in order to (i) improve profitability by increasing shipments
beyond the Company's own steel melting capacity and (ii) offset lost raw steel
production caused by certain unscheduled blast furnace outages and a two-day
strike by USWA employees in March 1994.

The operating rate (raw steel production as a percentage of continuous
caster capacity) increased to 94.6% in 1994 from 94.1% in 1993. Continuous cast
steel totaled 100% of total steel production in 1994 and 1993.

Depreciation expense increased 7.8% to $61.5 million in 1994, compared to
$57.1 million in 1993, due to increased amounts of depreciable property and
higher levels of capitalized interest.

Profit sharing contributions, based on terms of the collective bargaining
agreement, increased to $9.3 million in 1994 from $4.8 million in 1993, due
primarily to increased income before taxes.

Selling, administrative and general expense increased 10.2% to $64.5
million in 1994, compared to 1993, reflecting changes in organizational
structure and acquisition activities, and higher bonus payments and higher legal
expenses.

Interest expense increased to $22.6 million in 1994 from $21.4 million in
1993. The increase is due to higher levels of debt outstanding, partially offset
by lower interest rates. Capitalized interest totaled $8.4 million in 1994,
compared to $6.5 million in 1993.

Non-current accrued environmental liabilities decreased 8.75% to $7.3
million in 1994, compared to $8.0 million in 1993, due primarily to the payment
of outstanding environmental claims.

Other income increased to $17.9 million in 1994 from $12.0 million in 1993.
The income reflects increased investment income on higher levels of short term
investments.

The 1994 and 1993 tax provisions were calculated on an alternative minimum
tax basis. The tax provisions totaled $22.2 million and $.7 million, after
recording the benefits related to extraordinary charges, in 1994 and 1993,
respectively.

17
<PAGE> 19

Income before extraordinary items in 1994 totaled $86.4 million or $2.54
per share of common stock (including $36.1 million or $.93 per share of common
stock related to settlement of a lawsuit) compared to $30.7 million, or $1.02
per share of common stock, in 1993.

The 1994 charge for change in accounting method of $12.2 million ($10.0
million net of tax) reflects the adoption of Statement of Financial Accounting
Standard No. 112 Employers' Accounting For Postemployment Benefits ("SFAS 112").
The statement establishes accounting standards for employers who provide
benefits to former or inactive employees after employment but before retirement.
The benefits include, among others, disability, severance and workers'
compensation. The 1994 charge totaled $10.0 million, or 35 cents per common
share, compared to an extraordinary charge of $37.0 million, or $1.45 per common
share, in 1993.

Net income totaled $76.4 million or $2.19 per common share, in 1994,
compared to a net loss of $6.2 million, or 43 cents per common share, in 1993.

1993 COMPARED TO 1992

Net sales for 1993 totaled $1,046.8 million on shipments of steel products
of 2.3 million tons, compared to $929.8 million on shipments of 2.1 million tons
in 1992. The 12.6% increase in net sales revenue reflects a 8.9% increase in
shipping volume due to improved demand for steel products and a 3.3% average
product price increase, from $450 to $465 per ton shipped.

Cost of goods sold declined to $389 per ton shipped in 1993 from $395 per
ton shipped in 1992. The decline was due to increased productivity and lower raw
material and processing costs, partially offset by increased purchases of
semi-finished steel and higher employment costs related to the collective
bargaining agreement. The Company purchased semi-finished steel (slabs) in order
to (i) fill orders beyond its own steel melting capacity, and (ii) offset a 3.9%
reduction in raw steel production caused by unscheduled blast furnace outages.

The operating rate was 94.1% in 1993 as compared to 98% in 1992. The
decrease was due to unscheduled blast furnace outages. Continuous-cast steel
totaled 100% of total steel production in 1993 and 1992.

Depreciation expense increased 3.9% to $57.1 million in 1993, compared to
1992, due to increased amounts of depreciable property, partially offset by the
effect of lower levels of production on the modified unit of production
depreciation method.

The 1993 profit sharing provision is based on terms of the collective
bargaining agreement and a similar program for non-bargaining employees.

Selling, administrative and general expense declined by $8.5 million or
12.7% in 1993, compared to 1992, primarily reflecting lower employment costs due
to staff reductions and lower consulting fees.

Interest expense decreased to $21.4 million in 1993 from $21.7 million in
1992. The reduction reflects the repayment of the Company's borrowings under its
then existing revolving credit facility from the proceeds of a Common Stock
offering and the offering of its Series A Convertible Preferred Stock in 1993.
In November 1993 the Company issued $325 million of Senior Notes and used part
of the proceeds to purchase $165.5 million of its outstanding First Mortgage
Notes. Capitalized interest totaled $6.5 million in 1993, compared to $8.3
million in 1992.

Non-current accrued environmental liabilities were $8.0 million in each of
1993 and 1992.

Other income increased to $12.0 million in 1993 from $3.2 million in 1992.
The increase reflects investment income on proceeds from 1993 equity and debt
offerings and increased equity earnings due to its increased investment in its
Wheeling-Nisshin joint venture.

The 1993 tax provision was calculated on an alternative minimum tax basis.
The tax provision totaled $.7 million after recording the benefits related to
extraordinary charges.

Income before extraordinary charges for 1993 totaled $30.7 million, or
$1.02 per common share, compared to a 1992 net loss of $33.6 million, or $1.85
per common share. The 1992 net loss included a restructuring charge of $7.1
million.

In 1993 extraordinary charges of $37.0 million, or $1.45 per common share,
were recorded net of tax benefits of $8.7 million consisting of premiums paid on
early debt retirement in the amount of $23.3 million

18
<PAGE> 20

and for coal industry retiree medical benefits of $13.6 million. The tax benefit
recorded because of the extraordinary charges had the effect of eliminating any
use of pre-reorganization tax benefits.

After extraordinary charges, 1993 net loss totaled $6.2 million, or $.43
cents per common share.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operating activities for 1994 totaled $17.3 million. Short
term trading investments are reported as cash flow from operating activities.
Working capital accounts (excluding cash, short term investments and current
maturities of long-term debt) used $50.5 million of funds. Accounts receivable
increased $29.7 million (excluding a $45.0 million sale of trade receivables
presented separately as a financing activity) due to a higher level of sales.
Inventories, valued principally by the LIFO method for financial reporting
purposes, totaled $261.2 million at December 31, 1994, an increase of $21.6
million from the prior year end, which primarily reflects an increase in iron
ore pellets and slabs. Current liabilities increased $4.2 million primarily due
to increased payroll and employee benefit accruals.

The Company completed a shelf registration with the SEC in the amount of
$550 million of debt securities or preferred stock in August 1994. Pursuant to
this registration the Company sold 3,500,000 shares of Series B Convertible
Preferred Stock in September 1994 for net proceeds of $169.8 million. The net
proceeds will be used for general corporate purposes, including working capital
requirements, capital expenditures and potential acquisitions. A balance of $375
million remains available under the shelf registration.

For the year ended December 31, 1994, the Company spent $82.0 million
(including capitalized interest) on capital improvements, including $8.7 million
on environmental control projects. The Clean Air Act Amendment of 1990 is
expected to increase the Company's costs related to environmental compliance;
however, such an increase in cost is not anticipated to have a material adverse
effect on the consolidated financial condition of the Company.

Continuous and substantial capital and maintenance expenditures will be
required to maintain and, where necessary, upgrade operating facilities to
remain competitive, and to comply with environmental control requirements. It is
anticipated that necessary capital expenditures including required environmental
expenditures in future years will continue to exceed depreciation expense and
represent a material use of operating funds. Capital expenditures for 1995 are
estimated at approximately $101.7 million. Additionally, the Company through its
newly formed joint venture, Ohio Coatings Company, plans to construct an $80
million tin coating facility. The Company's obligations to Ohio Coatings consist
of $22.5 million of cash and/or loan guarantees. The Company anticipates funding
its capital expenditures through 1995 from cash on hand and funds generated from
operations.

On August 17, 1994, Wheeling-Pittsburgh Funding, Inc., a special purpose
wholly-owned subsidiary ("Funding") of WPSC, entered into an agreement to sell,
up to $75 million on a revolving basis, an undivided percentage ownership in a
designated pool of accounts receivable generated by WPSC, Wheeling Construction
Products, Inc. and Pittsburgh-Canfield Corporation. The agreement expires in
August 1999. Accounts receivable at December 31, 1994 exclude $45 million,
representing the accounts receivable sold under this Agreement. Fees paid by the
Company under this agreement in 1994 of $1.3 million are based upon a fixed rate
of 7.42% of the outstanding amount of receivables sold.

In October 1994 WPSC entered into a new Revolving Credit Facility ("RCF")
with Citibank, N.A. as agent. The RCF provides for borrowings for general
corporate purposes of up to $50 million. Interest is calculated at the Citibank
prime rate plus .5% or a Eurodollar rate plus 2.0%. Borrowings under the RCF are
secured primarily by 100% of WPSC's eligible inventory and requires that WPSC
maintain a specified level of tangible net worth. The RCF has certain
restrictions on indebtedness, liens and dividends. There were no borrowings
under the RCF during 1994.

In August 1994, WPSC entered into a separate facility for letters of credit
up to $50 million. At December 31, 1994 letters of credit totaling $26.5 million
were outstanding under this facility. The letters of credit are collateralized
by U.S. government securities owned by the Company and are subject to an
administrative charge of .4% per annum on the amount of outstanding letters of
credit.

19
<PAGE> 21

During 1994 the Company repurchased $54.3 million of its Senior Notes at
prices ranging from 91.0% to 94.5% of the outstanding principal amount. The
Company may continue from time to time to purchase additional Senior Notes, but
has no present intention to purchase any significant amount of additional Senior
Notes.

Since the Company's announcement of its stock repurchase program and
through the date hereof, the Company repurchased on the open market
approximately 557,000 shares of its Common Stock for an aggregate purchase price
of approximately $6.7 million. The Board of Directors had previously authorized
the Company to repurchase up to 10% of the Company's outstanding Common Stock,
and the Company may, from time to time, purchase additional shares of Common
Stock up to the amount authorized by the Board of Directors.

Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" ("SFAS 115") specifies the
accounting and reporting required for investments in equity securities that have
readily determinable fair values and for all investments in debt securities.
SFAS 115 is effective for fiscal years beginning after December 15, 1993. The
Company adopted SFAS 115 in the first quarter of 1994. The impact of the new
standard was not significant to the Company's results of operations or financial
condition.

Short-term liquidity is dependent, in large part, on cash on hand,
investments, general economic conditions and their effect on steel demand and
prices. Long-term liquidity is dependent upon the Company's ability to sustain
profitable operations and control costs during periods of low demand or pricing
in order to sustain positive cash flow. The Company satisfies its working
capital requirements through cash on hand, investments, the asset securitization
facility, borrowing availability under the RCF and funds generated from
operations. The Company believes that such sources will provide the Company for
the next twelve months with the funds required to satisfy working capital and
capital expenditure requirements. External factors, such as worldwide steel
production and demand and currency exchange rates, could materially affect the
Company's results of operations.

On February 24, 1995, WPC filed a registration statement relating to the
sale by it of 1,600,000 shares of its Common Stock and the sale by WHX of
5,100,000 shares of WPC's Common Stock. Consequently, upon the completion of
such offering, WHX will own 60% of the Common Stock of WPC. WPC will use $27.5
million of its net proceeds therefrom in connection with the acquisition of
Unimast. If the offering does not for any reason close, WHX would utilize
existing cash on hand of $27.5 million in connection with the acquisition of
Unimast.

The Company sent a letter to Teledyne's Board of Directors on November 28,
1994 with a merger proposal in which Teledyne's shareholders would receive
$22.00 per share in a combination of cash (at least $11 per share) and the
balance in a WHX convertible preferred stock. The Teledyne Board of Directors
rejected the proposal on December 21, 1994. On January 13, 1995, the Company's
application to the Federal Trade Commission, under Hart-Scott-Rodino, to acquire
up to 15% of the outstanding shares of Teledyne, Inc. was approved.

WPC has outstanding approximately $271 million of its Senior Notes and $9.5
million of its First Mortgage Notes. The indentures relating to both the Senior
Notes and the First Mortgage Notes contain covenants and restrictions that limit
the Company's operating flexibility. In addition, under such indentures, the
offering of WPC Common Stock constitutes an "asset sale," which, generally,
requires either WHX or WPC to apply a portion of their net proceeds therefrom to
acquire property or assets in similar lines of business within 360 days of the
closing of such offering, failing which either WHX or WPC must offer to
repurchase all outstanding Senior Notes and First Mortgage Notes at 100% of the
principal amount thereof, plus accrued and unpaid interest. Pursuant to a
separation agreement (the "Separation Agreement") to be entered into between WPC
and WHX in connection with such offering, in the event an offer to repurchase is
required to be made, WHX will loan to WPC, upon the same terms as the Senior
Notes or First Mortgage Notes being repurchased, such funds as are necessary for
WPC to fund any such repurchase obligations. In the event WHX does not, at the
required time, have sufficient funds to extend such loan, WPC will be required
to fund the repurchase obligations. WHX has agreed to indemnify WPC for any
incremental costs and expenses associated therewith.

20
<PAGE> 22

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of WHX Corporation

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income and accumulated earnings and of cash
flows present fairly, in all material respects, the financial position of WHX
Corporation and its subsidiaries (the "Company") at December 31, 1994 and 1993,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and the significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

As discussed in Note A to the consolidated financial statements, a
Corporate Reorganization was effected in 1994.

As discussed in Note B to the consolidated financial statements, on
February 24, 1995 Wheeling-Pittsburgh Corporation, a wholly owned subsidiary of
the Company, filed a registration statement with respect to an initial public
offering of its common stock.

As discussed in Note C to the consolidated financial statements, in 1994,
the Company adopted Statement of Financial Accounting Standards No. 112
"Employers' Accounting for Postemployment Benefits".

PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
February 6, 1995, except for Note B
which is as of February 24, 1995

21
<PAGE> 23

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS EXCEPT PER SHARE)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1992 1993 1994
-------- ---------- ----------
<S> <C> <C> <C>
REVENUES:
Net sales............................................... $929,786 $1,046,795 $1,193,878
COST AND EXPENSES:
Cost of products sold................................... 815,801 876,814 979,277
Depreciation............................................ 54,931 57,069 61,514
Profit sharing.......................................... -- 4,819 9,257
Selling, administrative and general expense............. 67,105 58,564 64,540
Restructuring charges................................... 7,098 -- --
-------- ---------- ----------
944,935 997,266 1,114,588
-------- ---------- ----------
Operating Income (loss)................................. (15,149) 49,529 79,290
Interest expense on debt................................ 21,659 21,373 22,581
Other income............................................ 3,181 11,965 17,925
B & LE settlement....................................... -- -- 36,091
-------- ---------- ----------
Income (loss) before taxes, change in accounting method
and extraordinary items............................... (33,627) 40,121 110,725
Tax provision........................................... -- 9,400 24,360
-------- ---------- ----------
Income (loss) before change in accounting method and
extraordinary items................................... (33,627) 30,721 86,365
Extraordinary charges -- net of tax..................... -- (36,953) --
Cumulative effect on prior years of accounting
change -- net of tax.................................. -- -- (9,984)
-------- ---------- ----------
Net income (loss)....................................... (33,627) (6,232) 76,381
Dividend requirement for preferred stock................ -- 4,713 13,175
-------- ---------- ----------
Net income (loss) applicable to common stock............ $(33,627) $ (10,945) $ 63,206
======== ========= =========
NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Primary:
Operations.............................................. $ (1.85) $ 1.02 $ 2.54
Extraordinary charges -- net of tax..................... -- (1.45) --
Cumulative effect of change in accounting principle-net
of tax................................................ -- -- (.35)
-------- ---------- ----------
Net................................................... $ (1.85) $ (.43) $ 2.19
======== ========= =========
Fully Diluted:
Operations.............................................. $ (1.85) $ .97 $ 2.14
Extraordinary charges -- net of tax..................... -- (1.38) --
Cumulative effect of change in accounting principle-net
of tax................................................ -- -- (.25)
-------- ---------- ----------
Net................................................... $ (1.85) $ (.41) $ 1.89
======== ========= =========
</TABLE>

See Notes to Consolidated Financial Statements
WHX Corporation

22
<PAGE> 24

CONSOLIDATED BALANCE SHEET (IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1993* 1994
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 5,996 $ 13,424
Short term investments............................................ 273,860 388,182
Trade receivables, less allowances for doubtful accounts of $994
and $1,030..................................................... 125,656 110,330
Inventories....................................................... 239,565 261,164
Prepaid expenses and deferred charges............................. 8,961 12,605
---------- ----------
Total current assets........................................... 654,038 785,705
Investment in associated companies.................................. 28,475 43,891
Property, plant and equipment, at cost less accumulated depreciation
and amortization.................................................. 748,673 768,284
Deferred income taxes............................................... 40,900 62,339
Deferred charges and other assets................................... 19,514 69,689
---------- ----------
$1,491,600 $1,729,908
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables.................................................... $ 113,591 $ 111,645
Payroll and employee benefits..................................... 70,425 76,475
Federal, state and local taxes.................................... 16,727 16,618
Deferred income taxes -- current.................................. 35,500 36,189
Interest and other................................................ 16,288 16,474
Long-term debt due in one year.................................... 3,456 4,253
---------- ----------
Total current liabilities...................................... 255,987 261,654
Long-term debt...................................................... 346,823 289,500
Employee benefit liabilities........................................ 416,286 429,221
Other liabilities................................................... 30,331 50,395
---------- ----------
1,049,427 1,030,770
---------- ----------
Redeemable common stock -- 596 and 473 shares....................... 9,890 6,884
---------- ----------
Stockholders' Equity:
Preferred stock -- $.10 par value; authorized 10,000 shares;
issued and outstanding: 6,500 shares........................... 300 650
Common stock $0.01 par value; authorized 60,000 shares; issued and
outstanding 26,541 and 27,229 shares........................... 265 272
Unrealized gain on securities -- available for sale............... -- 3,078
Additional paid-in capital........................................ 471,572 664,902
Accumulated earnings (deficit).................................... (39,854) 23,352
---------- ----------
432,283 692,254
---------- ----------
$1,491,600 $1,729,908
========== ==========
</TABLE>

- ---------------
* Reclassified for comparative purposes

See Notes to Consolidated Financial Statements
WHX Corporation

23
<PAGE> 25

CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1992 1993 1994
-------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $(33,627) $ (6,232) $ 76,381
Items not affecting cash from operating activities:
Depreciation and amortization.......................... 54,931 57,069 61,514
Other postretirement benefits.......................... 15,206 13,392 13,651
Coal retirees' medical benefits (net of tax)........... -- 13,600 --
Premium on early debt retirement (net of tax).......... -- 23,353 --
Cumulative effect of accounting change -- net.......... -- -- 9,984
Pre-reorganization tax benefits........................ -- -- 17,596
Decrease (increase) in working capital elements:
Trade receivables...................................... 7,570 (45,784) (29,674)
Inventories............................................ 17,644 539 (21,599)
Short term investments-trading......................... -- (273,860) (98,280)
Other current assets................................... (2,842) (484) (3,411)
Current liabilities.................................... (32,818) 47,708 4,181
Other items -- net....................................... 241 (4,265) (13,052)
-------- --------- ---------
Net cash flow from operating activities.................. 26,305 (174,964) 17,291
-------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Plant additions and improvements....................... (67,318) (73,652) (82,020)
Short term investments -- available for sale........... -- -- (16,041)
WP Radio Corp. investment.............................. -- -- (15,483)
Other investments...................................... -- (15,339) (12,500)
-------- --------- ---------
Net cash used in investing activities.................... (67,318) (88,991) (126,044)
-------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt proceeds................................ -- 315,819 --
Preferred stock issuances.............................. -- 144,950 169,750
Common stock issuances................................. -- 65,127 --
Long-term debt retirement.............................. (8,589) (173,186) (56,526)
Proceeds from receivables securitization............... -- -- 45,000
Letter of credit collateralization..................... -- -- (28,279)
Revolving Credit Facility proceeds (payments).......... 16,819 (53,240) --
Premium on early debt retirement....................... -- (31,353) --
Preferred stock dividends.............................. -- (4,712) (13,175)
Redemption of common stock/purchased put rights........ (3,356) (2,112) (589)
-------- --------- ---------
Net cash provided from financing activities.............. 4,874 261,293 116,181
-------- --------- ---------
Increase (decrease) in cash and cash equivalents......... (36,139) (2,662) 7,428
Cash and cash equivalents at beginning of year........... 44,797 8,658 5,996
-------- --------- ---------
Cash and cash equivalents at end of year................. $ 8,658 $ 5,996 $ 13,424
======== ========= =========
</TABLE>

See Notes to Consolidated Financial Statements
WHX Corporation

24
<PAGE> 26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

The accounting policies presented below have been followed in preparing the
accompanying consolidated financial statements.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of all
subsidiary companies. All significant intercompany accounts and transactions are
eliminated in consolidation. The Company uses the equity method of accounting
for investments in unconsolidated companies owned 20% or more.

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.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and on deposit and highly
liquid debt instruments with original maturities of three months or less.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The recorded amount of cash and cash equivalents approximates fair value
because of the short maturity of those instruments. Short term investments are
recorded at fair market value based on trading in the public market. Redeemable
common stock is recorded at the redemption amount which is considered to
approximate fair value. See Note G for a description of fair value of debt
instruments.

The Company accounts for short-term investments in accordance with
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". Unrealized investment gains and
losses are recognized based on specific identification of securities.

INVENTORIES

Inventories are stated at cost which is lower than market. Cost is
determined by the last-in first-out ("LIFO") method for substantially all
inventories.

PROPERTY, PLANT AND EQUIPMENT

Depreciation is computed on the modified units of production method for
financial statement purposes and accelerated methods for income tax purposes.
Interest cost is capitalized for qualifying assets during the assets'
acquisition period. Capitalized interest cost is amortized on the same basis as
the related depreciation.

Maintenance and repairs are charged to income. Renewals and betterments
made through replacements are capitalized. Profit or loss on property
dispositions is credited or charged to income.

PENSIONS, OTHER POSTRETIREMENT AND POSTEMPLOYMENT PLANS

The Company has tax qualified defined contribution pension plans covering
substantially all employees. The programs provide for contributions based on a
percentage of compensation for salaried employees and a rate per hour worked for
hourly employees. Costs for these programs are being funded currently.

The Company sponsors medical and life insurance programs for substantially
all employees. Similar group medical programs extend to pensioners and
dependents. The Company accounts for these benefits in

25
<PAGE> 27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accordance with Statement of Financial Accounting Standards No. 106 ("SFAS
106"), Employers' Accounting for Postretirement Benefits Other than Pensions.

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 ("SFAS 109"), Accounting for Income
Taxes. Recognition is given in the accounts for the income tax effect of
temporary differences in reporting transactions for financial and tax purposes
using the deferred liability method.

ENVIRONMENTAL MATTERS

The Company provides for remediation costs and penalties associated with
environmental non-compliance when the responsibility of costs is probable and
the amount is estimatible. Generally, remediation accruals are recorded when a
feasibility study or plan of action has been determined.

EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares of
Common Stock and common stock equivalents outstanding during each year,
excluding redeemable common shares.

NOTE A -- CORPORATE REORGANIZATION

The Company and its subsidiaries were reorganized into a new holding
company structure on July 26, 1994. The steel-related businesses of the Company
(including WPSC) continue to be owned by WPC, and the other businesses and
assets of the Company are owned by WHX Corporation. Pursuant to the
reorganization, WPC became a wholly-owned subsidiary of WHX. WHX, the new
holding company, became the publicly held issuer for all of the Common Stock,
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
Warrants of the Company. In addition, WHX guaranteed WPC's outstanding 9 3/8%
Senior Notes due 2003 (the "Senior Notes") and 12 1/4% First Mortgage Notes due
2000 (the "First Mortgage Notes") as well as certain other debt of WPC. The
transactions were accounted for as a reorganization of entities under common
control. On the merger date, WHX had the same consolidated net worth as WPC and
its subsidiaries prior to the reorganization.

As a condition of the Corporate Reorganization, the financial and other
covenants under the Senior Notes and First Mortgage Notes indentures also apply
to WHX and accordingly, actions taken by WHX which violate such covenants or
otherwise cause an event of default under such indentures could accelerate the
obligations due thereunder, which could have a material adverse effect on the
Company.

NOTE B -- SUBSEQUENT EVENTS

INITIAL PUBLIC OFFERING OF WPC

On February 24, 1995, WPC filed a Registration Statement on Form S-1
related to the initial public offering of 40% of the common stock of WPC. Upon
completion of the above mentioned offering, WHX will beneficially own 60% of the
outstanding shares of Common Stock of WPC and will alone control sufficient
votes to take any actions that require the consent of stockholders, including
the election of members of the board of directors.

26
<PAGE> 28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

plus accrued and unpaid interest. Pursuant to a separation agreement (the
"Separation Agreement") to be entered into between WPC and WHX in connection
with such offering, in the event an offer to repurchase is required to be made,
WHX will loan to WPC, upon the same terms as the Senior Notes or First Mortgage
Notes being repurchased, such funds as are necessary for WPC to fund any such
repurchase obligations. In the event WHX does not, at the required time, have
sufficient funds to extend such loan, WPC will be required to fund the
repurchase obligations. WHX has agreed to indemnify WPC for any incremental
costs and expenses associated therewith.

UNIMAST ACQUISITION

On February 10, 1995, the Company entered into a merger agreement among
Unimast Incorporated, Rockfeller Group Capital Corporation and WHX Acquisition
Corporation, a wholly-owned subsidiary of the Company. The purchase price to the
Company was $27.5 million, including a loan to Unimast to repay certain
indebtedness, plus the assumption of $16.0 million face amount of indebtedness.

The merger agreement also includes a contingent payment to Unimast's
current owners, based on revenues over the next three years, with a maximum
payment of $3.0 million.

TELEDYNE CORPORATION

On February 14, 1995, the Company announced its intention to commence a
proxy contest for the election of directors of Teledyne Incorporated at
Teledyne's next annual meeting of stockholders scheduled for April 26, 1995.

NOTE C -- PENSIONS, OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

PENSION PROGRAMS

The Company provides defined contribution pension programs for both hourly
and salaried employees. Tax qualified defined contribution plans provide, in the
case of hourly employees, an increasing company contribution per hour worked
based on age. A similar tax qualified plan for salaried employees provides
defined company contributions based on age and years of service.

As of December 31, 1994, $72.6 million of fully vested funds are held in
trust for benefits earned under the hourly defined contribution pension plans
and $17.8 million is held in trust for fully vested benefits earned under the
salaried employees defined contribution plans. As of December 31, 1994,
approximately 55% of the assets of the hourly pension plans were in fixed income
investments and 45% in equity investments; approximately 51% of the assets of
the salaried pension plan were in equity investments and 49% in fixed income
investments. All plan assets are invested by professional investment managers.
Pension provisions charged against income were $10.5 million, $9.6 million and
$10.5 million in 1992, 1993, and 1994 respectively.

Effective January 1, 1994 the Company began matching salaried employee
contributions to the 401(K) plan with shares of the Company's Common Stock. The
Company matches 50% of the employees contributions. The employer contribution is
limited to a maximum of 3% of an employee's salary. At December 31, 1994, the
401(K) plan held 33,154 shares of the Company's common stock.

POSTEMPLOYMENT BENEFITS

The Company adopted Statement of Financial Accounting Standard No. 112,
"Accounting for Postemployment Benefits" ("SFAS 112") as of January 1, 1994.
This statement establishes accounting standards for employers who provide
benefits to former or inactive employees after employment but before retirement.
Those benefits include, among others, disability, severance and workers'
compensation. The Company recorded a charge of $12.2 million ($10.0 million net
of tax) in the 1994 first quarter as a result of the cumulative effect on prior
years of adoption of SFAS 112.

27
<PAGE> 29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER POSTRETIREMENT BENEFITS

The Company sponsors postretirement benefit plans that cover both
management and hourly retirees and dependents. The plans provide medical
benefits including hospital, physicians' services and major medical expense
benefits and a life insurance benefit. The hourly employees' plans provide
non-contributory basic medical and a supplement to Medicare benefits, and major
medical coverage to which the Company contributes 50% of the insurance premium
cost. The management plan has provided basic medical and major medical benefits
on a non-contributory basis through age 65.

The Company accounts for these benefits in accordance with SFAS No. 106.
The cost of postretirement medical and life benefits for eligible employees are
accrued during the employee's service period through the date the employee
reaches full benefit eligibility. The Company delays recognition of changes to
the unfunded obligation that arise from the effects of current actuarial gains
and losses and the effects of changes in assumptions. The Company funds the
plans as current benefit obligations are paid. Additionally, in 1994 the Company
began funding a qualified trust in accordance with the collective bargaining
agreement effective March 1, 1994. The following table sets forth the
reconciliation of the Accumulated Postretirement Benefit Obligation ("APBO") to
the accrued obligation included in the Company's consolidated balance sheet at
December 31, 1993 and 1994.

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1993 1994
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Active employees not eligible for retirement........................... $142,367 $102,883
Active employees eligible to retire.................................... 42,841 47,221
Retirees and beneficiaries............................................. 239,670 216,763
-------- --------
Accumulated postretirement benefit obligation.......................... 424,878 366,867
Plan assets at fair market value....................................... -- 5,162
-------- --------
Obligations in excess of plan assets................................... 424,878 361,705
Unrecognized prior service cost........................................ 2,567 2,313
Unrecognized net gain(loss)............................................ (22,000) 47,980
-------- --------
Accrued postretirement benefit obligation.............................. $405,445 $411,998
======== ========
</TABLE>

At December 31, 1994, plan assets consisted primarily of short term
corporate notes.

The following table sets forth the components of the recorded net periodic
postretirement benefit costs.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1992 1993 1994
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net periodic postretirement benefit cost:
Service cost................................................ $ 5,108 $ 5,451 $ 5,322
Interest cost............................................... 32,462 30,123 27,991
Other....................................................... (290) (254) (500)
------- ------- -------
Total............................................... $37,280 $35,320 $32,813
======= ======= =======
</TABLE>

For measurement purposes, medical costs are assumed to increase at annual
rates ranging from 10.5% in 1994 (11.5% in 1993), declining gradually to 5% in
2004 and beyond. The medical cost trend rate assumption has significant effect
on the costs and obligation reported. A 1% increase in the medical cost trend
rate in each year would result in approximate increases in the accumulated
postretirement benefit obligation of $47.4 million, and net periodic benefit
cost of $5.7 million. The assumed discount rate used to measure the accumulated
postretirement benefit obligation was 8% at December 31, 1992, 7% at December
31, 1993 and 8% at December 31, 1994. The expected long term rate of return on
plan assets is 8%.

28
<PAGE> 30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COAL INDUSTRY RETIREE HEALTH BENEFIT ACT

The Coal Industry Retiree Health Benefit Act of 1992 (the "Act") created a
new United Mine Workers of America postretirement medical and death benefit plan
to replace two existing plans which had developed significant deficits. The Act
assigns companies the remaining benefit obligations for former employees and
beneficiaries, and a pro rata allocation of benefits related to unassigned
beneficiaries ("orphans"). The Company's obligation under the Act related to its
previous and present ownership of coal mining operations had been estimated at
$14.3 million and recorded as an extraordinary charge in the 1993 fourth
quarter. The Company reduced this liability in 1994 by $2.4 million to reflect
current premium payments, reductions in the number of assigned former employees
and beneficiaries and a lower anticipated medical trend rate.

NOTE D -- INCOME TAXES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1992 1993* 1994
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INCOME TAXES BEFORE EXTRAORDINARY ITEMS
Current
Federal......................................................... $ -- $13,027 $24,125
State........................................................... -- 382 1,197
------- ------- -------
Total income taxes current........................................ $ -- $13,409 $25,322
------- ------- -------
Deferred
Federal......................................................... -- (11,656) (20,750)
Pre-reorganization tax benefits recorded directly to equity..... -- 7,647 19,788
------- ------- -------
Income taxes...................................................... $ -- $ 9,400 $24,360
======= ======= =======
TOTAL INCOME TAXES
Current
Federal......................................................... $ -- $ 6,796 $24,125
State........................................................... -- -- 1,197
------- ------- -------
Total income taxes current........................................ $ -- $ 6,796 $25,322
------- ------- -------
Deferred
Federal......................................................... -- (6,096) (20,750)
Pre-reorganization tax benefits recorded directly to equity..... -- -- 17,596
------- ------- -------
Income taxes...................................................... $ -- $ 700 $22,168
======= ======= =======
COMPONENTS OF TOTAL INCOME TAXES
Operations........................................................ $ -- $ 9,400 $24,360
Extraordinary items............................................... -- (8,700) (2,192)
------- ------- -------
Income taxes...................................................... $ -- $ 700 $22,168
======= ======= =======
</TABLE>

- ---------------
* 1993 amounts have been reclassified for comparative purposes

The Company adopted SFAS 109, Accounting for Income Taxes, effective
January 1, 1993, on a prospective basis. Previously, the Company used the SFAS
96 asset and liability approach that gave no recognition to future events other
than the recovery of assets and settlement of liabilities at their carrying
amounts. There was no effect on retained earnings of adopting SFAS 109.

29
<PAGE> 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred income taxes result from temporary differences in the financial
bases and tax bases of assets and liabilities. The type of differences that give
rise to deferred income tax liabilities or assets are shown in the following
table:

DEFERRED INCOME TAX SOURCES

<TABLE>
<CAPTION>
1993 1994
------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Postretirement and postemployment employee benefits.............. $ 140.6 $ 146.4
Operating loss carryforward (expiring in 2005 to 2008)........... 47.0 20.0
ITC's and other credit carryforwards (expiring in 1995 to
2006).......................................................... 7.2 7.2
Minimum tax credit carryforwards (indefinite carryforward)....... 21.8 43.4
Provision for expenses and losses................................ 41.5 37.6
Leasing activities............................................... 28.3 27.4
State income taxes............................................... 15.3 11.6
Miscellaneous other.............................................. 7.3 8.6
------- -------
DEFERRED TAX ASSETS............................................ $ 309.0 $ 302.2
------- -------
LIABILITIES
Property plant and equipment..................................... $(145.1) $(149.0)
Inventory........................................................ (40.2) (39.9)
State income taxes............................................... (9.7) (8.5)
Miscellaneous other.............................................. (.5) (.3)
------- -------
DEFERRED TAX LIABILITY......................................... $(195.5) $(197.7)
Valuation Allowance.............................................. (108.1) (78.4)
------- -------
DEFERRED INCOME TAX ASSET -- NET................................. $ 5.4 $ 26.1
======= =======
</TABLE>

As of December 31, 1994, for financial statement reporting purposes a
balance of approximately $71 million of prereorganization tax benefits exist.
These benefits will be reported as a direct addition to equity as they are
recognized. In 1994, tax benefits of $17.6 million were recognized as a direct
addition to equity. The decrease in the valuation allowance in 1994 represents
current year recognition of tax benefits.

During 1994, the Company experienced an ownership change as defined by
Section 382 of the Internal Revenue Code. As the result of this event, the
Company will be limited in its ability to use net operating loss carryforwards
and certain other tax attributes to reduce subsequent cash tax liabilities. The
amount of taxable income that can be offset in any annual period is limited to
approximately $32 million.

Total federal and state income taxes paid in 1992, 1993 and 1994 were $2.0
million, $3.2 million and $1.8 million, respectively.

Federal tax returns have been examined by the Internal Revenue Service
(IRS) through 1987. The IRS can review earlier years to the extent any NOL's
incurred in such years are carried forward to offset future years' income.
Management believes it has adequately provided for all taxes on income.

30
<PAGE> 32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory Federal income tax rate to
pretax income from continuing operations as follows:

<TABLE>
<CAPTION>
1992 1993 1994
-------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Income (loss) before taxes, extraordinary items and
accounting changes................................ $(33,627) $40,121 $110,725
======== ======= ========
Tax provision (benefit) at statutory rate........... $(11,433) $14,042 $ 38,754
Increase (reduction) in tax due to:
Percentage depletion.............................. (1,493) (763) (673)
Equity earnings................................... -- (1,900) (1,423)
State income tax net of federal effect............ -- 1,302 2,850
Alternative minimum tax rate differential......... -- (4,223) (14,532)
Deferred tax assets for which no benefit was
recognized..................................... 12,756 -- --
Other miscellaneous............................... 170 942 (616)
-------- ------- --------
Tax provision....................................... $ 0 $ 9,400 $ 24,360
======== ======= ========
</TABLE>

NOTE E -- SHORT TERM INVESTMENTS

The Company accounts for investments in short-term investments in
accordance with Statement of Financial Accounting Standards No. 115 "Accounting
for Certain Investments in Debt and Equity Securities" ("SFAS 115").

The composition of the Company's short term investments are as follows:

<TABLE>
<CAPTION>
1993 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Trading Securities:
U. S. Treasury Bills....................................... $235,247 $313,318
U. S. Government Agency Mortgage Backed Obligations........ -- 48,046
Other...................................................... 38,613 7,699
Available-for-sale securities:
Equities................................................... -- 19,119
-------- --------
$273,860 $388,182
======== ========
</TABLE>

These investments are subject to price volatility associated with any
interest bearing instrument. Fluctuations in general interest rates effect the
value of these investments.

The Company recognizes gains and losses based on specific identification of
the securities which comprise the investment balance. At December 31, 1994
unrealized holding gains on available-for-sale securities of $3.1 million have
been reported as a separate component of stockholder's equity. Net unrealized
holding losses on trading securities included in the current period earnings are
$4.0 million. SFAS 115 was adopted effective January 1, 1994 and had no
cumulative effect on prior years.

31
<PAGE> 33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE F -- INVENTORIES

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1993 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Finished products............................................ $ 50,362 $ 49,926
In-process................................................... 115,396 120,669
Raw materials................................................ 48,232 68,302
Other materials and supplies................................. 22,253 25,376
-------- --------
236,243 264,273
LIFO reserve................................................. 3,322 (3,109)
-------- --------
$239,565 $261,164
======== ========
</TABLE>

During 1993 and 1994, certain inventory quantities were reduced, resulting
in liquidations of LIFO inventories, the effect of which increased income by
approximately $.7 million in 1993 and decreased income by approximately $.3
million in 1994.

NOTE G -- PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1993 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Land and mineral properties.......................... $ 28,591 $ 28,608
Buildings, machinery and equipment................... 803,139 906,028
Construction in progress............................. 70,864 49,094
-------- --------
902,594 983,730
Accumulated depreciation and amortization............ 153,921 215,446
-------- --------
$748,673 $768,284
======== ========
</TABLE>

The Company utilizes the modified units of production method of
depreciation which recognizes that the depreciation of steelmaking machinery is
related to the physical wear of the equipment as well as a time factor. The
modified units of production method provides for straight line depreciation
charges modified (adjusted) by the level of raw steel production. In 1993 and
1994 depreciation under the modified units of production method was $2.9 million
or 7.0% and $2.8 million or 6.1%, respectively, less than straight line
depreciation.

32
<PAGE> 34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE H--LONG-TERM DEBT

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1993 1994
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Senior Unsecured Notes due 2003, 9 3/8%(1)........................... $325,000 $270,698
First Mortgage Notes due 2000, 12 1/4%(1)............................ 9,473 9,458
IRS pension tax note due 1997,8%(1).................................. 7,333 5,500
Obligation to PBGC due 1997, 8%(1)................................... 6,623 5,153
Other................................................................ 1,850 2,944
-------- --------
350,279 293,753
Less portion due within one year..................................... 3,456 4,253
-------- --------
Total long-term debt(2)............................................ $346,823 $289,500
======== ========
</TABLE>

- ---------------
(1) WPC debt guaranteed by the Company. See Note N.

(2) The fair value of long-term debt at December 31, 1993 and December 31, 1994
was $359.0 million and $256.0 million, respectively. Fair value of long-term
debt is estimated based on trading in the public market.

Long-term debt maturing in each of the next five years is as follows: 1995,
$4.3 million; 1996, $4.0 million; 1997, $3.9 million; 1998, $0.2 million and
1999, $0.2 million.

A summary of the financial agreements at December 31, 1994 follows:

REVOLVING CREDIT FACILITY:

On October 24, 1994, WPSC entered into an amended and restated Revolving
Credit Facility ("RCF") with Citibank, N.A. as agent. The RCF provides for
borrowings for general corporate purposes up to $50 million.

The credit agreement has a one year term. Interest rates are based on the
Citibank prime rate plus .5% and/or a Eurodollar rate plus 2.0%. Borrowings
under the RCF are secured primarily by 100% of WPSC's eligible inventory and
requires that WPSC maintain a specified level of tangible net worth. There were
no borrowings outstanding under the RCF at December 31, 1994.

The RCF contains certain restrictions on Company indebtedness, liens and
dividends.

In August 1994, WPSC entered into a separate facility for letters of credit
up to $50 million. At December 31, 1994 letters of credit totaling $26.5 million
were outstanding under this facility. The letters of credit are collateralized
at 105% with U.S. government securities owned by the Company, and are subject to
an administrative charge of .4% per annum on the amount of outstanding letters
of credit. The collateral is recorded as Non-current Other Assets.

FIRST MORTGAGE NOTES:

On November 27, 1991 the Company completed an offering of $175.0 million of
12 1/4% First Mortgage Notes. Interest on the First Mortgage Notes is payable
semi-annually on May 15 and November 15 of each year, at the rate of 12 1/4% per
annum. The First Mortgage Notes are redeemable, in whole or in part, at the
option of the Company, on or after November 15, 1996, at specified redemption
prices plus accrued interest.

Pursuant to an October 1993 offer by the Company, $165.5 million aggregate
principal amount of First Mortgage Notes (or 94.5% of the outstanding First
Mortgage Notes) were tendered and accepted for payment by the Company. In
November 1993 the Company simultaneously issued $325.0 million of 9 3/8% Senior
Notes, the net proceeds of which were partially used to purchase the First
Mortgage Notes and pay related

33
<PAGE> 35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

premiums. Pursuant to the Company's reorganization in 1994, WHX guaranteed the
payment of the First Mortgage Notes.

9 3/8% SENIOR NOTES DUE 2003:

On November 23, 1993 WPC issued $325 million of its Senior Notes. Interest
on the Senior Notes is payable semi-annually on May 15 and November 15 of each
year, commencing May 15, 1994 and mature on November 15, 2003. During 1994, the
Company purchased $54.3 million of its outstanding Senior Notes at an average
price of 94% of the related outstanding principal amount.

The Senior Notes are redeemable at the option of WPC, in whole or in part,
at any time on or after November 15, 2000 at specified redemption prices, plus
accrued interest to the date of redemption.

Upon a Change of Control, WPC will have the option to redeem the Senior
Notes, in whole or in part, at a redemption price equal to the principal amount
thereof plus the Applicable Premium (as defined) and, upon a Change of Control
Triggering Event (as defined), each holder of Senior Notes will have the right
to require WPC to repurchase such holder's Notes at 101% of the principal amount
thereof, together, in each case, with accrued interest to the date of redemption
or repurchase.

The Senior Notes are unsecured obligations of WPC ranking senior in right
of payment to WPC's subordinated indebtedness, if any, and pari passu with all
other senior indebtedness of WPC. Pursuant to the Company's reorganization in
1994, WHX guaranteed the payment of the Senior Notes.

The Indenture contains certain covenants, including but not limited to,
covenants with respect to the following matters; (i) the incurrence of
additional indebtedness by WPC and its subsidiaries; (ii) the incurrence of
certain liens by WPC and its subsidiaries; (iii) the making of certain
sale-leaseback transactions; (iv) the disposition by WPC and its subsidiaries of
the proceeds of certain asset sales; (v) the making by WPC and its subsidiaries
of certain dividends and other restricted payments; (vi) the entry into certain
transactions with affiliates of WPC and (vii) the ability of WPC to engage in
certain mergers, consolidations or asset sales.

INTEREST COST

Aggregate interest costs on long-term debt and amounts capitalized during
the three years ended December 31, 1994, are as follows:

<TABLE>
<CAPTION>
1992 1993 1994
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Aggregate interest expense on long-term debt.......... $29,949 $27,905 $30,957
Less: Capitalized interest............................ 8,290 6,532 8,376
------- ------- -------
Interest expense...................................... $21,659 $21,373 $22,581
======= ======= =======
Interest paid......................................... $29,343 $28,315 $28,906
======= ======= =======
</TABLE>

NOTE I -- STOCKHOLDERS' EQUITY

The authorized capital stock of WHX consists of 60,000,000 shares of Common
Stock, $.01 par value, of which 27,701,830 shares (including redeemable Common
Stock) were outstanding as of December 31, 1994, and 10,000,000 shares of
Preferred Stock, $0.10 par value, of which 3,000,000 shares of Series A
Convertible Preferred Stock and 3,500,000 shares of Series B Convertible
Preferred Stock were outstanding as of December 31, 1994. In addition, warrants
to purchase 1,577,428 shares of Common Stock were outstanding at December 31,
1994. The warrants have an exercise price of $6.3583 per share and must be
exercised on or before January 3, 1996.

34
<PAGE> 36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SERIES A CONVERTIBLE PREFERRED STOCK

In July 1993 the Company issued 3,000,000 shares of Series A Convertible
Preferred Stock for net proceeds of $145.0 million. Dividends on the shares of
the Series A Convertible Preferred Stock, are cumulative, are payable quarterly
in arrears on January 1, April 1, July 1 and October 1 of each year, in an
amount equal to $3.25 per share per annum.

Each share of the Series A Convertible Preferred Stock is convertible at
the option of the holder thereof at any time into shares of Common Stock of the
Company, par value $.01 per share, at a conversion price of $15.78 per share of
Common Stock (equivalent to a conversion rate of approximately 3.1686 shares of
Common Stock for each share of Series A Convertible Preferred Stock), subject to
adjustment under certain conditions.

The Series A Convertible Preferred Stock is not redeemable prior to July 1,
1996. On and after such date, the Series A Convertible Preferred Stock is
redeemable at the option of the Company, in whole or in part, for cash,
initially at $52.275 per share and thereafter at prices declining ratably to
$50.00 per share on and after July 1, 2003, plus in each case accrued and unpaid
dividends to the redemption date. The Series A Convertible Preferred Stock is
not entitled to the benefit of any sinking fund.

SERIES B CONVERTIBLE PREFERRED STOCK

The Company completed a shelf registration in the amount of $550 million of
debt securities or preferred stock in August 1994. Pursuant to this registration
the Company issued 3,500,000 shares of Series B Convertible Preferred Stock in
September 1994 for net proceeds of $169.8 million. Dividends on the shares of
the Series B Convertible Preferred Stock, are cumulative, are payable quarterly
in arrears on January 1, April 1, July 1 and October 1 of each year, in an
amount equal to $3.75 per share per annum.

Each share of the Series B Convertible Preferred Stock is convertible at
the option of the holder thereof at any time into shares of Common Stock of the
Company, par value $.01 per share, at a conversion price of $20.40 per share of
Common Stock (equivalent to a conversion rate of approximately 2.4510 shares of
Common Stock for each share of Series B Convertible Preferred Stock), subject to
adjustment under certain conditions.

The Series B Convertible Preferred Stock is not redeemable prior to October
1, 1997. On and after such date, the Series B Convertible Preferred Stock is
redeemable at the option of the Company, in whole or in part, for cash,
initially at $52.625 per share and thereafter at prices declining ratably to
$50.00 per share on and after October 1, 2004, plus in each case accrued and
unpaid dividends to the redemption date. The Series B Convertible Preferred
Stock is not entitled to the benefit of any sinking fund.

REDEEMABLE COMMON STOCK

Certain present and former employees of the Company were issued preferred
shares of the Company prior to the Chapter 11 proceeding in exchange for wage
and salary concessions. Such preferred shares were exchanged for 1,279,935
shares of Common Stock under the Plan of Reorganization, which shares were
issued to an Employee Stock Ownership Plan ("ESOP") on such employees' behalf.
Beneficial owners of such shares who were active employees on August 15, 1990
and who have either retired, died or become disabled, or who reach 30 years of
service, may sell their Common Stock to the Company at a price of $15 or, upon
qualified retirement, $20 per share. These contingent obligations are expected
to extend over many years, as participants in the ESOP satisfy the criteria for
selling shares to the Company. In addition, each beneficiary can direct the ESOP
to sell any or all of its Common Stock into the public markets at any time;
provided, however, that the ESOP will not on any day sell in the public markets
more than 20% of the number of shares of Common Stock traded during the previous
day. As of December 31, 1994, 472,705 shares of such Common Stock remained
outstanding.

35
<PAGE> 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Changes in capital accounts are as follows:

<TABLE>
<CAPTION>
CONVERTIBLE
COMMON STOCK PREFERRED ACCUMULATED CAPITAL IN
----------------- ---------------- EARNINGS EXCESS OF
SHARES AMOUNT SHARES AMOUNT (DEFICIT) PAR VALUE
------ ------ ----- ------ ----------- ----------
(DOLLARS AND SHARES IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1992........................ 18,154 $182 -- $ -- $ 4,717 $258,601
EIP shares sold in public market............... 48 -- -- -- -- 759
EIP shares purchased and retired............... -- -- -- -- -- 1
General unsecured Put options exercised and
retired...................................... -- -- -- -- -- --
Warrants exercised............................. 2 -- -- -- -- 12
General unsecured Put options lapsed........... 4 -- -- -- -- 51
Net Loss....................................... -- -- -- -- (33,627) --
------ ------ ----- ------ ----------- ----------
Balance December 31, 1992...................... 18,208 182 -- -- (28,910) 259,424
EIP shares sold in public market............... 164 1 -- -- -- 1,687
EIP shares purchased and retired............... -- -- -- -- -- --
Stock options exercised........................ 113 1 -- -- -- 740
Warrants exercised............................. 6 -- -- -- -- 34
Common stock sold.............................. 8,050 81 -- -- -- 65,037
Preferred stock sold........................... -- -- 3,000 300 -- 144,650
Preferred dividends............................ -- -- -- -- (4,712) --
Net Loss....................................... -- -- -- -- (6,232) --
------ ------ ----- ------ ----------- ----------
Balance December 31, 1993...................... 26,541 265 3,000 300 (39,854) 471,572
EIP shares sold in public market............... 97 2 -- -- -- 2,414
EIP shares purchased and retired............... -- -- -- -- -- --
Stock options exercised........................ 144 1 -- -- -- 1,076
Warrants exercised............................. 414 4 -- -- -- 2,627
401K matching contribution..................... 33 -- -- -- -- 574
Common stock sold.............................. -- -- -- -- -- --
Preferred stock sold........................... -- -- 3,500 350 -- 169,043
Pre reorganization tax benefits................ -- -- -- -- -- 17,596
Preferred dividends............................ -- -- -- -- (13,175) --
Net Income..................................... -- -- -- -- 76,381 --
------ ------ ----- ------ ----------- ----------
Balance December 31, 1994...................... 27,229 $272 6,500 $650 $ 23,352 $664,902
====== ======= ===== ======= =========== =========
</TABLE>

STOCK OPTION PLAN

The Wheeling-Pittsburgh Corporation Stock Option Plan ("1991 Plan") is
intended to assist the Company in securing and retaining key employees by
allowing them to participate in the ownership and growth of the Company through
the grant of incentive and non-qualified options (collectively, the "Options")
to full-time employees of the Company and its subsidiaries. Incentive stock
options granted under the Option Plan are intended to be "Incentive Stock
Options" as defined by Section 422 of the Internal Revenue Code.

An aggregate of 2,500,000 shares of Common Stock has been reserved for
issuance upon exercise of Options under the 1991 Plan. The 1991 Plan is
administered by a committee (the "Committee") consisting of not less than three
nonemployee members appointed by the Board of Directors. The term of Options
granted under the 1991 Plan may not exceed 10 years (five years in the case of
an incentive Option granted to an optionee owning more than 10% of the voting
stock of the Company (a "10% Holder"). The Option price for Options shall not be
less than 100% of the "fair market value" of the shares of Common Stock at the
time the Option is granted; provided, however, that with respect to an incentive
option, in the case of a 10% Holder, the purchase price per share shall be at
least 110% of such fair market value. The aggregate fair market value of the
shares of Common Stock as to which an optionee may first exercise incentive
stock options in any calendar year may not exceed $100,000. Payment for shares
purchased upon exercise of Options is to be made in cash,

36
<PAGE> 38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

but, at the discretion of the Committee, may be made by delivery of other shares
of Common Stock of comparable value. The 1991 Plan will terminate on September
24, 2001 and may be terminated at any time by the Board of Directors prior to
that date.

DIRECTORS OPTION PLAN

The 1993 Directors D&O Plan (the "1993 D&O Plan") is authorized to issue
shares of Common Stock pursuant to the exercise of options with respect to a
maximum of 400,000 shares of Common Stock. The options vest over three years
from the date of grant.

OPTION GRANTS TO WPN CORP.

On July 29, 1993, the Board of Directors approved the grant of options to
WPN Corporation to purchase 1,000,000 shares of Common Stock (the "Option
Grants"). The Option Grants were approved by the stockholders on March 31, 1994.

The options are exercisable with respect to one-third of the shares of
Common Stock issuable upon the exercise thereunder at any time on or after the
date of stockholder approval of the Option Grants. The options with respect to
an additional one-third of the share of Common Stock may be exercised on the
first and second anniversaries of the Approval Date, respectively. The options,
to the extent not previously exercised, will expire on April 29, 2003.

A Summary of the Option Plans:

<TABLE>
<CAPTION>
NUMBER OF OPTIONS
-------------------------------
1991 D & O WPN OPTION PRICE
PLAN PLAN GRANTS OR RANGE
--------- ------- --------- ------------
<S> <C> <C> <C> <C>
Balance 1/1/92.................................... -- -- --
Granted......................................... 490,500 -- -- 6.125-7.250
Cancelled....................................... -- -- --
Exercised....................................... -- -- --
--------- ------- ---------
Balance 12/31/92.................................. 490,500 -- --
--------- ------- ---------
Granted......................................... 542,857 164,000 1,000,000 8.750-10.875
Cancelled....................................... (60,167) -- -- 6.125-7.250
Exercised....................................... (113,252) -- -- 6.125-7.250
--------- ------- ---------
Balance 12/31/93.................................. 859,938 164,000 1,000,000
--------- ------- ---------
Granted......................................... 526,250 60,000 -- 14.625-15.125
Cancelled....................................... (17,197) -- -- 14.625
Exercised....................................... (143,072) -- -- 6.125-8.750
--------- ------- ---------
Balance 12/31/94.................................. 1,225,919 224,000 1,000,000
--------- ------- ---------
</TABLE>

Options outstanding at December 31, 1994 which are exercisable totaled 601,295.

EARNINGS PER SHARE

The computation of primary earnings per common share is based upon the
average shares of common stock and common stock equivalents outstanding. Common
stock equivalents represent the dilutive effect of assuming the exercise of
outstanding stock options and warrants. The computation of fully diluted
earnings per

37
<PAGE> 39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

common share in 1993 and 1994 further assumes the conversion of preferred
shares. The shares used in the computation were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1992 1993 1994
----------- ----------- -----------
<S> <C> <C> <C>
Primary........................................ 18,194,013 25,451,518 28,833,470
Fully diluted.................................. 18,194,013 26,783,888 40,447,035
</TABLE>

NOTE J -- COMMITMENTS AND CONTINGENCIES

JOINT VENTURE WITH NISSHIN STEEL CO., LTD.

The Company has a 35.7% ownership in Wheeling-Nisshin, Inc
("Wheeling-Nisshin"). Under a Shareholders' Agreement, the Company has a
proportionate financing guarantee for bank and other borrowings used to
construct the plant. The total debt at December 31, 1994 was approximately $68.7
million. In conjunction with the financing, purchase and installation of a
second coating line, the Company's ownership was increased to 35.7%. Upon the
completion of the second line, the Company entered into an amended and restated
agreement with Nisshin Steel Co., Ltd. which extended the term of the supply
agreement for twenty years after the execution of such amended and restated
supply agreement. During 1994 the Company derived approximately 15.5% of its
revenues from sales of steel and processing services to Wheeling-Nisshin and at
December 31, 1994 had a receivable from Wheeling-Nisshin of $31.7 million. The
Company received dividends of $2.5 million from Wheeling-Nisshin in 1994.

ENVIRONMENTAL MATTERS

The Company, as well as other steel companies, are subject to demanding
environmental standards imposed by Federal, state and local environmental laws
and regulations. For 1992, 1993, and 1994 aggregate capital expenditures for
environmental control projects totaled approximately $9.9 million, $8.0 million
and $8.7 million, respectively. In 1992, 1993 and 1994 the Company paid $2.0
million, $0.1 million and $0.6 million, respectively, in civil penalties from
the previously established cash escrow accounts to the U.S. EPA for violations
of the Clean Water Act. The Company is currently funding its share of
remediation costs of certain hazardous wastes sites. The Company believes that
these remediation costs are not significant and will not be significant in the
foreseeable future. Non-current accrued environmental liabilities totaled $8.0
million and $7.3 million at December 31, 1993 and December 31, 1994,
respectively. Based upon the Company's prior capital expenditures, anticipated
capital expenditures, consent agreements negotiated with Federal and state
agencies and information available to the Company on pending judicial and
administrative proceedings, the Company does not expect its environmental
compliance costs, including the incurrence of any additional fines and penalties
relating to the operation of its facilities, to have a material adverse effect
on the financial condition or results of operations of the Company.

NOTE K -- RELATED PARTY TRANSACTION

WPN Corp. is the sole general partner of RM Capital Partners and of DR
Capital Partners, collectively, two of the principal stockholders of the
Company. The Chairman of the Board of the Company is the President and sole
shareholder of WPN Corp. Pursuant to a management agreement effective as of
January 3, 1991, as amended January 1, 1993 and April 11, 1994, approved by a
majority of the disinterested directors of the Company, WPN Corp. provides
certain financial, management advisory and consulting services to the Company,
subject to the supervision and control of the disinterested directors. Such
services include, among others, identification, evaluation and negotiation of
acquisitions, responsibility for financing matters for the Company and its
subsidiaries, review of annual and quarterly budgets, supervision and
administration, as appropriate, of all the Company's accounting and financial
functions and review and supervision of reporting obligations under Federal and
state securities laws. In exchange for such services, WPN Corp. receives a fixed
monthly fee, $250,000 per month through March 1994; $458,333 effective April 1,
1994 pursuant to an

38
<PAGE> 40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amendment on April 11, 1994. The Management Agreement has a one year term and is
renewable automatically for successive one year periods, unless terminated by
either party upon 60 days' notice.

NOTE L -- OTHER INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
------------------------------
1992 1993 1994
------ ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest and investment income................. $1,683 $ 6,263 $12,483
Equity income.................................. 421 5,037 5,367
Other, net..................................... 1,077 665 75
------ ------- -------
$3,181 $11,965 $17,925
====== ======= =======
</TABLE>

NOTE M -- EXTRAORDINARY CHARGES

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1993
----------------------
<S> <C>
Premium on early debt retirement(1)............... $ 31,353
Coal retiree medical benefits(2).................. 14,300
Income tax effect................................. (8,700)
----------
$ 36,953
==========
</TABLE>

- ---------------
(1) In November 1993 the Company paid a premium of $31.4 million to retire
$165.5 million (94.5%) of the First Mortgage Notes.

(2) See Note C.

NOTE N -- SUPPLEMENTAL SUBSIDIARY COMPANY SUMMARIZED FINANCIAL INFORMATION

The following summarized financial information of the Company's major
operating subsidiary, WPC, are being reported because WHX Corporation guarantees
certain indebtedness of WPC.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER
31,
1994(A)
INCOME DATA (DOLLARS IN THOUSANDS) ----------
<S> <C>
Net sales........................................................ $1,193,878
Cost of products sold............................................ 980,044
Depreciation..................................................... 61,094
Selling, general and administrative expense...................... 70,089
----------
Operating income................................................. 82,651
Interest expense................................................. (22,581)
Other income..................................................... 42,822
----------
Income before tax and cumulative change in accounting
principle...................................................... 102,892
Tax provision.................................................... 21,173
----------
Income before cumulative change in accounting principle.......... 81,719
Cumulative effect of change in accounting principle (net of
tax)........................................................... (9,984)
----------
Net Income....................................................... $ 71,735
=========
</TABLE>

- ---------------
(a) Separate WPC financial information for 1992 and 1993 is not shown since it
is substantially the same as the WHX consolidated financial statements
presented herein.

39
<PAGE> 41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AT DECEMBER 31,
BALANCE SHEET DATA (DOLLARS IN THOUSANDS) 1994(A)
---------------
<S> <C>
ASSETS
Current assets.............................................................. $ 393,245
Non-current assets.......................................................... 873,127
---------------
Total assets.................................................................. $ 1,266,372
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities......................................................... $ 251,332
Non-current liabilities..................................................... 769,256
Stockholder's equity........................................................ 245,784
---------------
Total liabilities and stockholder's equity.................................... $ 1,266,372
============
</TABLE>

- ---------------
(a) Separate WPC financial information for 1992 and 1993 is not shown since it
is substantially the same as the WHX consolidated financial statements
presented herein.

NOTE O -- SALE OF RECEIVABLES

On August 17, 1994, Wheeling-Pittsburgh Funding, Inc., a special purpose
wholly-owned subsidiary ("Funding") of WPSC, entered into an agreement to sell,
up to $75 million on a revolving basis, an undivided percentage ownership in a
designated pool of accounts receivable generated by WPSC, Wheeling Construction
Products, Inc. and Pittsburgh Canfield Corporation. The agreement expires in
August 1999. Accounts receivable at December 31, 1994 exclude $45 million,
representing uncollected accounts receivable sold with recourse limited to the
extent of uncollectible balances. Fees paid by the Company under this agreement
in 1994 of $1.3 million are based upon a fixed rate of 7.42% of the outstanding
amount of receivables sold. Based on the Company's collection history, the
Company believes that credit risk associated with the above arrangement is
immaterial.

NOTE P -- RESTRUCTURING CHARGE

The Company recorded a restructuring charge of $7.1 million in the fourth
quarter of 1992 to reflect the elimination of 156 salaried positions through a
separation incentive program. The job eliminations represented approximately 13%
of the salaried workforce.

40
<PAGE> 42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE Q -- QUARTERLY INFORMATION (UNAUDITED)

Financial results by quarter for the two years ended December 31, 1993 and
1994 are as follows:

<TABLE>
<CAPTION>
EXTRAORDINARY EARNINGS (LOSS)
CHARGES AND PER SHARE
CUMULATIVE EFFECT NET BEFORE EARNINGS
NET GROSS OF ACCOUNTING INCOME EXTRAORDINARY (LOSS)
SALES PROFIT CHANGE (LOSS) CHARGES PER SHARE
-------- ------- ----------------- -------- --------------- ---------
(DOLLARS, EXCEPT PER SHARE, IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
1993:
1st Quarter............. $235,714 $30,605 $ -- $ (2,802) $ (.15) $(.15)
2nd Quarter............. 269,029 45,222 -- 9,194 .35 .35
3rd Quarter............. 269,335 46,992 -- 10,540 .30 .30
4th Quarter............. 272,717 47,162 36,953 (23,164) .40 (.89)
1994:
1st Quarter............. 253,803 35,714 9,984 26,486(a) 1.18 .83 (a)
2nd Quarter............. 300,427 57,892 -- 12,863 .36 .36
3rd Quarter............. 309,817 59,883 -- 18,717 .55 .55
4th Quarter............. 329,831 61,112 -- 18,315 .44 .44
</TABLE>

- ---------------
(a) The 1994 first quarter includes $36.1 million income in settlement of
antitrust litigation against Bessemer and Lake Erie Railroad.

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

None.

41
<PAGE> 43

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

The following sets forth certain information with respect to the Directors
of the Company:

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
FOR THE PAST FIVE YEARS BECAME
NAME AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ----------------------------------- ----------------------------------- --- -------------
<S> <C> <C> <C>
Neil D. Arnold..................... DIRECTOR. Senior Vice President 46 1992
and Chief Financial Officer of
Varity Corporation, a manufacturer
of farm machinery, automotive
components and diesel engines,
since August 1990; prior thereto
for in excess of six years, a Vice
President or Senior Vice President
of such corporation.
Paul W. Bucha...................... DIRECTOR. President, Paul W. Bucha 51 1993
and Company, Inc., an international
marketing consulting firm, since
1979; President and Managing
Partner, Port Liberte Partners,
1984-January 1993. Port Liberte
Partners filed a petition for
bankruptcy under Chapter 11 of the
Bankruptcy Code in January 1991. A
plan of reorganization has been
confirmed by the bankruptcy court
and Port Liberte Partners emerged
from bankruptcy in December 1992.
Recipient, Congressional Medal of
Honor.
Robert A. Davidow.................. DIRECTOR. Private investor since 52 1992
January 1990. Mr. Davidow is also a
Director of Arden Group, Inc.
William Goldsmith.................. DIRECTOR. Management and Marketing 76 1987
Consultant since 1984; Chairman of
the Board, TMP, Inc., from January
1991 to 1993; Chairman and Chief
Executive Officer of Overspin Golf,
since January 1994; Chairman of the
Board and Chief Executive Officer
of Fiber Fuel International, Inc.,
from 1994 to present. Life Trustee
to Carnegie Mellon University since
1980.
Ronald LaBow....................... CHAIRMAN OF THE BOARD. President, 60 1991
Stonehill Investment Corp.
("Stonehill"), since February 1990.
Formerly with Neuberger & Berman, a
New York based investment advisory
and management firm, from 1978 to
1990. Mr. LaBow is also a director
of Regency Equities Corp.
Marvin L. Olshan................... DIRECTOR AND, SINCE 1991, SECRETARY 67 1991
OF THE COMPANY. Partner, Olshan
Grundman Frome & Rosenzweig, 1956
to present; Chairman, President and
Director, Regency Equities Corp.,
1984 to December 1990.
</TABLE>

42
<PAGE> 44

- ---------------
(1) Prior to the Corporate Reorganizations in July 1994, all WHX directors were
directors of WPC.

Directors of the Company who are not officers of the Company or WPSC are
entitled to receive compensation for serving as directors in the amount of
$40,000 per annum and $1,000 per Board Meeting, $800 per Committee Meeting
attended in person and $500 per telephonic meeting other than the Executive and
Stock Option Committees, and $1,000 per day of consultation and other services
provided other than at meetings of the Board or Committees thereof, at the
request of the Chairman of the Board. Committee Chairmen also receive an
additional annual fee of $1,800. Directors also receive options to purchase
8,000 shares of Common Stock per annum on the date of each annual meeting of
Stockholders up to a maximum of 40,000 shares of Common Stock pursuant to the
Company's 1993 Directors and Non-employee Officers Stock Option Plan.

Pursuant to a management agreement effective as of January 3, 1991, as
amended (the "Management Agreement"), approved by a majority of the
disinterested directors of the Company, WPN, of which Ronald LaBow, the Chairman
of the Board of the Company is the sole stockholder and an officer and director,
provides financial, management advisory and consulting services to the Company,
subject to the supervision and control of the disinterested directors. In 1994,
WPN received a monthly fee of $250,000 through April 1, 1994, at which time the
Management Agreement was amended to provide for a monthly fee of $458,333.33,
with total payments in 1994 of $4,875,000. The Company believes that the cost of
obtaining the type and quality of services rendered by WPN under the Management
Agreement is no less favorable than that at which the Company could obtain such
services from unaffiliated entities. The terms of such Management Agreement are
reviewed annually. See "Executive Officers -- Management Agreement with WPN."

43
<PAGE> 45

EXECUTIVE OFFICERS

The following table contains the names, positions and ages of the executive
officers of the Company who are not directors.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR THE PAST
NAME FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS(1)
- ----------------------- -------------------------------------------------------------------
<S> <C>
Frederick G. Chbosky... CHIEF FINANCIAL OFFICER. Chief Financial Officer of the Company
since June 1991; Executive Vice President -- Finance of WPSC since
December 1992; Vice President -- Finance and Chief Financial
Officer of WPSC since September 1985 and Director of WPSC since
January 1991; Vice President -- Purchasing Traffic and Raw
Materials with WPSC from 1983 to 1985; Comptroller of WPSC from
1980 to 1983; various financial positions with WPSC, 1975 to 1980.
Director, Wheeling-Nisshin, Inc.
James D. Hesse......... VICE PRESIDENT. Vice President of the Company since January 1994.
Executive Vice President and Chief Operating Officer of WPSC since
February 1994. Vice President -- Commercial of WPSC since July
1991. Vice President -- Corporate Planning and Marketing of WPSC,
August 1986 to July 1991. General Manager of Sales -- Products,
June 1980 to August 1986. Tin Mill Products Manager, September 1976
to June 1980. Various line and staff sales positions with WPSC,
1962 to 1976.
DeWayne Tuthill........ VICE PRESIDENT. Vice President of the Company since December 1993.
Executive Vice President -- Manufacturing since February 1994. Vice
President -- Purchasing, Traffic and Raw Materials of WPSC since
February 1989. Manager, Materials, Elliott Company, 1982 to 1989.
General Manager Purchasing and Traffic and various other positions,
Crucible Steel Corporation, 1965 to 1982.
Howard Mileaf.......... VICE PRESIDENT. Vice President-Special Counsel to the Company since
April 1993. Special Counsel to the Company, February 1992 to April
1993. Consultant, August 1991 to April 1993. Vice President and
General Counsel, Keene Corporation, August 1981 to August 1991.
Trustee/Director of Neuberger & Berman Equity Mutual Funds, 1984 to
present. Director, Kevlin Corporation.
</TABLE>

- ---------------
(1) Prior to the Corporate Reorganization in July 1994, all Executive Officers
were Executive Officers of WPC.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth, for the fiscal
years indicated, all compensation awarded to, earned by or paid to (i) the chief
executive officer ("CEO") of the Company (Mr. James L. Wareham, the President of
the Company) and (ii) the four most highly compensated executive officers of the
Company other than the CEO whose salary and bonus exceeded $100,000 with respect
to the fiscal year ended December 31, 1994 and who were employed by the Company
on December 31, 1994 (together with the CEO, the "Named Executive Officers").

44
<PAGE> 46

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------- --------------------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR ($) ($)(1) ($) OPTIONS(#) ($)(2)
- ---------------------------- ----- ------- -------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James L. Wareham, 1994 400,000 140,000 -- 80,000 44,877(3)
President 1993 366,667 125,000 -- 22,921 50,977(3)
1992 300,000 -- -- 25,000 9,007
Frederick G. Chbosky, 1994 140,000 37,622 -- -- 7,560
Chief Financial Officer 1993 140,000 26,334 -- 13,753 6,384
1992 140,000 -- -- 15,000 6,216
James D. Hesse, 1994 147,250 43,476 -- -- 17,737
Vice President 1993 117,000 19,917 -- 13,753 12,845
1992 117,000 -- -- 15,000 9,896
DeWayne W. Tuthill, 1994 133,808 40,768 -- -- 7,770
Vice President 1993 120,700 19,866 -- 13,753 6,681
1992 115,908 -- -- 15,000 6,103
Howard Mileaf, 1994 120,000 40,000 -- 10,000 5,616
Vice President 1993 136,125(4) 20,000 -- 15,000 900
1992 -- -- -- -- 103,500(5)
</TABLE>

- ---------------
(1) Includes bonuses in April 1994 for services rendered in 1993 and February
1995 for services rendered in 1994 pursuant to the WPSC Bonus Compensation
Program ("WPSC Bonus Program") covering officers and salaried employees of
WPSC. Messrs. Wareham and Mileaf are not eligible to participate in the
WPSC Bonus Program. Mr. Wareham's employment agreement provides for an
annual bonus to be awarded in the sole discretion of the Company. Messrs.
Wareham and Mileaf were each granted bonuses in April 1994 for services
rendered in 1993 and bonuses in March 1995 for services rendered in 1994.
All bonus amounts have been attributed to the year in which the services
were performed.

(2) Amounts shown reflect employer contributions to WPSC Salaried Employees
Pension Plan, unless otherwise noted.

(3) Includes $40,000 of insurance premiums paid by the Company.

(4) Includes payments totalling $56,125 for consulting services to the Company
performed prior to the commencement of Mr. Mileaf's full time employment
with the Company.

(5) Reflects payment relating to Mr. Mileaf's position as Special Counsel to the
Company.

Option Grants Table. The following table sets forth certain information
regarding stock option grants made to each of the Named Executive Officers
during the fiscal year ended December 31, 1994.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- -------------------------- ---------- ------------ -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
James L. Wareham.......... 80,000 15.2 14.625 4-4-04 735,808 1,864,679
James D. Hesse............ 0 0.0 0.000 -- 0 0
Frederick G. Chbosky...... 0 0.0 0.000 -- 0 0
DeWayne W. Tuthill........ 0 0.0 0.000 -- 0 0
Howard Mileaf............. 10,000 1.9 14.625 4-03-04 91,976 233,085
</TABLE>

- ---------------
All options granted above were granted pursuant to the 1991 Incentive and
Non-Qualified Stock Option Plan (the "1991 Plan") and vest ratably over a
three-year period. The options which expire on April 4, 2004 were granted on
April 5, 1994 and the options which expire on April 3, 2004 were granted on
April 4, 1994.

45
<PAGE> 47

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table sets forth certain information concerning unexercised
stock options held by the Named Executive Officers as of December 31, 1994.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT 1993 OPTIONS AT 1993
SHARES FISCAL YEAR-END(#) FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- ----------- ------------------ ---------------------
<S> <C> <C> <C> <C>
James L. Wareham.................... 0 0 24,307/103,614 134,382/118,763
James D. Hesse...................... 5,000 69,375 4,584/ 14,169 20,628/ 71,261
Frederick G. Chbosky................ 10,000 128,750 4,584/ 14,169 20,628/ 71,261
DeWayne W. Tuthill.................. 5,000 55,188 9,584/ 14,169 50,628/ 71,261
Howard Mileaf....................... 0 0 5,000/ 20,000 11,875/ 23,750
</TABLE>

- ---------------

(1) On December 31, 1994, the last reported sales price of WHX Common Stock as
reported on the New York Stock Exchange Composite Tape was $13.25.

Long-Term Incentive and Pension Plans. The Company does not have any
long-term incentive or defined benefit pension plans.

Deferred Compensation Agreements. Certain key employees of the Company are
parties to deferred compensation agreements and/or severance agreements. The
deferred compensation agreements generally provide that if the employee remains
continuously in the employ of the Company until the fifth anniversary of the
approval of the Company's Plan of Reorganization (the "Plan") (which Plan was
approved on January 3, 1991), or if the employee's employment is terminated
within such period by reason of permanent disability, retirement at age 65 or
involuntary termination without good cause, the employee is entitled to receive,
over a fifteen-year period commencing at the later of age 65 or termination of
employment, an amount equal to twice his base salary for the most recent
twelve-month period of his employment prior to January 3, 1996. The estimated
annual benefits payable to Messrs. Chbosky, Tuthill and Hesse upon retirement
are $18,667, $18,000 and $20,000, respectively. Certain other deferred
compensation payments are payable by WPSC in certain circumstances, such as a
demotion in job status without good cause, death or as a result of a change of
control of the Company. Each of Messrs. Chbosky, Tuthill and Hesse is a party to
a deferred compensation agreement such as is described above. Except as
described in this paragraph, and in the next paragraph with respect to the
employment agreement of Mr. Wareham, no plan or arrangement exists which results
in compensation to a Named Executive Officer in excess of $100,000 in any year
upon such officer's future termination of employment or upon a
change-of-control.

Employment Agreements.

Mr. James L. Wareham is employed as President of the Company and Chairman
of the Board and Chief Executive Officer of WPSC under a two-year agreement
expiring April 29, 1995, which shall be automatically extended for successive
two-year periods, unless earlier terminated. The agreement provides for an
annual salary to Mr. Wareham of $400,000 per year and an annual bonus awarded in
the sole discretion of the Company. In April 1994, Mr. Wareham was granted a
cash bonus of $125,000 and options to purchase 80,000 shares of Common Stock at
the then prevailing market price pursuant to the 1991 Plan for services rendered
in 1993. In March 1995, Mr. Wareham was granted a cash bonus of $140,000 for
services rendered in 1994. The Company considered several factors in determining
whether to pay a bonus to Mr. Wareham including the performance of Mr. Wareham
and the resulting benefits to the Company and the overall performance of the
Company as measured by the guidelines discussed herein used to determine the
bonuses of other senior executives of the Company. In addition, the employment
agreement provides for Mr. Wareham to receive the cash surrender value of life
insurance contracts purchased by the Company upon termination of his employment.
The annual premium paid by the Company on the life insurance contracts is
$40,000. In the event Mr. Wareham's employment is terminated without cause or
Mr. Wareham voluntarily terminates his

46
<PAGE> 48

employment after a change in control of the Company occurs, he is entitled to
receive a payment of $800,000, and other specified benefits for a period of one
year from the date of termination. Specified benefits under Mr. Wareham's
employment agreement may be forfeited under certain circumstances.

Compensation Committee Interlock and Insider Participation. Messrs.
Davidow, Goldsmith and Olshan each served as a member of the Compensation
Committee of the Board of Directors during the fiscal year ended December 31,
1994. Mr. Olshan is a member of Olshan Grundman Frome & Rosenzweig, which has
been retained as outside general counsel to the Company since January 1991. Fees
received from the Company by such firm during the fiscal year ended December 31,
1994 of $981,077 did not exceed 5% of the Company's revenues.

Management Agreement With WPN

Pursuant to the Management Agreement, approved by a majority of the
disinterested directors of the Company, WPN provides financial, management
advisory and consulting services to the Company, subject to the supervision and
control of the disinterested directors. Such services include, among others,
identification, evaluation and negotiation of acquisitions, responsibility for
financing matters, review of annual and quarterly budgets, supervision and
administration, as appropriate, of all of the Company's accounting and financial
functions and review and supervision of the Company's reporting obligations
under Federal and state securities laws. In exchange for such services, from
June 1992 to March 1994 WPN received a fixed monthly fee of $250,000. On April
1, 1994, the Management Agreement was amended to provide for a monthly fee of
$458,333.33. The Company provides indemnification for WPN's employees, officers
and directors against any liability, obligation or loss resulting from their
actions pursuant to the Management Agreement. The Management Agreement has a one
year term and is renewable automatically for successive one year periods, unless
terminated by either party upon 60 days' notice. On July 29, 1993, WPN was
granted options to purchase 600,000 shares of Common Stock. Mr. LaBow is the
sole stockholder and an officer and director of WPN. WPN has not derived any
other income and has not received reimbursement of any of its expenses (other
than health benefits and standard directors' fees) from the Company in
connection with the performance of services described above. The Company
believes that the cost of obtaining the type and quality of services rendered by
WPN under the Management Agreement is no less favorable than the cost at which
the Company could obtain such services from unaffiliated entities.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information concerning ownership of the
Common Stock of the Company outstanding as at March 31, 1995, by (i) each person
known by the Company to be the beneficial owner of more than five percent of the
Company's Common Stock, (ii) each director, (iii) each of the executive officers
named in the summary compensation table and (iv) by all directors and executive
officers of the Company as a group. Unless otherwise indicated, each stockholder
has sole voting power and sole dispositive power with respect to the indicated
shares.

47
<PAGE> 49

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED OF CLASS(2)
- ---------------------------------------------------------------- --------- -----------
<S> <C> <C>
FMR Corp.(3).................................................... 1,980,616 7.2%
82 Devonshire Street
Boston, Massachusetts 02109
Capital Growth Management Limited Partnership(4)................ 1,757,500 6.4%
One International Place
Boston, Massachusetts 02110
Vanguard/Windsor Fund(5)........................................ 1,601,200 5.8%
Wellington Management Company(6)................................ 1,736,005 6.3%
75 State Street
Boston, Massachusetts 02109
Neil D. Arnold.................................................. 8,000(7) *
Paul W. Bucha................................................... 8,000(7) *
Ronald LaBow(8)................................................. 2,449,773(9)(10) 8.7%
Robert A. Davidow(11)........................................... 58,371(12) *
William Goldsmith............................................... 18,667(7) *
Howard Mileaf................................................... 13,333(7)
Marvin L. Olshan................................................ 19,667(12) *
Raymond S. Troubh............................................... 15,334(13) *
James L. Wareham................................................ 40,281(7) *
Frederick G. Chbosky............................................ 20,197(14) *
James D. Hesse.................................................. 14,169(7) *
DeWayne W. Tuthill.............................................. 19,169(7) *
All Directors and Executive Officers as a Group (12
persons)(11).................................................. 2,684,961(15) 9.5%
</TABLE>

- ---------------
* less than one percent.

(1) Each director and executive officer has sole voting power and sole
investment power with respect to all shares beneficially owned by him,
unless otherwise indicated.

(2) Based upon shares of Common Stock outstanding at March 31, 1995 of
27,774,494 shares.

(3) Based on joint Schedule 13G dated February 11, 1994, as amended, filed with
the Securities and Exchange Commission (the "Commission").

(4) Based on Schedule 13G dated February 9, 1994, as amended, filed with the
Commission, representing beneficial ownership of WHX Common Stock by client
accounts managed by Capital Growth Management.

(5) Based on Schedule 13G dated February 10, 1994, as amended, filed with the
Commission. The address of such beneficial holder was not provided in such
holder's Schedule 13G.

(6) Based on Schedule 13G dated February 5, 1995, as amended, filed with the
Commission, representing beneficial ownership of WHX Common Stock by
investment advisory clients of Wellington Management Company.

(7) Consists of shares of Common Stock issuable upon exercise of options within
60 days hereof.

(8) Ronald LaBow, Chairman of the Board of the Company, is the sole stockholder
of WPN, which is the sole general partner of RM Capital Partners ("RM") and
of DR Capital Partners ("DR"). Consequently, Mr. LaBow may be deemed to be
the beneficial owner of all shares of Common Stock owned by RM and DR, each
of which owns 1,000,000 shares of Common Stock.

(9) Based on a joint Schedule 13D dated January 11, 1991, as amended and filed
with the Commission, and additional information furnished to the Company.

48
<PAGE> 50

(10) Includes 388,335 shares of Common Stock issuable upon exercise of options,
within 60 days hereof, owned by WPN, of which Mr. LaBow is the president
and sole shareholder.

(11) Robert A. Davidow, a director of the Company, is a partner in a limited
partner of each of RM and DR.

(12) Includes 18,667 shares of Common Stock issuable upon exercise of options
within 60 days hereof.

(13) Includes 13,334 shares of Common Stock issuable upon exercise of options
within 60 days hereof.

(14) Includes 14,169 shares of Common Stock issuable upon exercise of options
within 60 days hereof.

(15) Includes 574,791 shares of Common Stock issuable upon exercise of options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Frederick G. Chbosky, Chief Financial Officer of the Company and a director
and Executive Vice President -- Finance of WPSC, and Akimuni Takewaka, a
director of WPSC, are directors of Wheeling-Nisshin, Inc. ("Wheeling-Nisshin").
Mr. Takewaka is also Chairman and Chief Executive Officer of Wheeling-Nisshin.
The Company currently holds a 35.7% equity interest in Wheeling-Nisshin.

Ronald LaBow, Chairman of the Board is the sole stockholder of WPN, which
is the sole general partner of RM and DR. See "Security Ownership." The Company
is party to a Management Agreement with WPN. See "Executive
Compensation -- Management Agreement with WPN."

In April, 1994, Wheeling-Pittsburgh Radio Corporation, a wholly-owned
subsidiary of WPC, purchased (the "NewTex Acquisition") for approximately $10.5
million the equity interests of NewTex Communications, L.L.C., a Delaware
limited liability company that operates radio stations ("NewTex"). NewTex was
owned in three equal parts by two venture capital firms and by Stonehill Radio
Corp., a corporation owned by the Chairman of the Board and two officers of WPC.
Such individuals received approximately $3.4 million for their interest in
Stonehill Radio Corp., which represented their basis in Stonehill Radio Corp.
Citibank, N.A. issued a fairness opinion with respect to the NewTex Acquisition.

Marvin L. Olshan, a Director and Secretary of the Company, is a member of
Olshan Grundman Frome & Rosenzweig, which has been retained as outside general
counsel to the Company since January 1991. Fees received from the Company by
such firm during the fiscal year ended December 31, 1994 of $981,077 did not
exceed 5% of the Company's revenues.

PART IV

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

(a)3. EXHIBITS

<TABLE>
<S> <C>
2.1 Confirmation Order of the United States Bankruptcy Court for the Western
District of Pennsylvania, dated December 18, 1990, containing the Amended
Joint Plan of Reorganization of Wheeling-Pittsburgh Steel Corporation,
dated October 18, 1990, as modified and approved -- Incorporated herein by
reference to Exhibit 2.1 to WPC's Form 8-K filed December 28, 1990.
2.2 Form of Plan and Agreement of Merger, dated as of July 26, 1994 among WPC,
WHX and WP Merger Co. -- Incorporated herein by reference to Exhibit 2.2
to Company's Form S-4 Registration Statement (No. 33-53591).
3.1 Certificate of Incorporation of the Company -- Incorporated herein by
reference to Exhibit 3.2 to the Company's Form S-4 Registration Statement
(No. 33-53591).
3.2 By-laws of the Company -- Incorporated herein by reference to Exhibit 3.3
of the Company's S-4 Registration Statement (No. 33-53591).
4.1 Form of Warrant Agreement between the Company and The First National Bank
of Boston, as Warrant Agent -- Incorporated herein by reference to the
Company's Form 8-K filed December 28, 1990.
</TABLE>

49
<PAGE> 51

<TABLE>
<S> <C>
4.2 Rights Agreement dated December 3, 1990, among the Corporation, RM Capital
Sub Corporation and the United States Trust Company of New
York -- Incorporated herein by reference to Exhibit 4.6 to the Company's
Form 10-K for the fiscal year ended December 31, 1990 (the "1990 10-K").
4.3 Company Rights Agreement, as amended, dated January 3, 1991 among WPC, RM
Capital Partners, DR Capital Partners and General Holdings,
Ltd -- Incorporated herein by reference to Exhibit 4.7 to the 1990 10-K.
4.4 Form of Indenture ("First Mortgage Note Indenture") dated as of November
15, 1991 among WPC, WPSC, as guarantor, and Chemical Bank, as Trustee
(including form of First Mortgage Note) -- Incorporated herein by
reference to Exhibit 4.8 to the Company's Form S-2 Registration Statement
dated November 20, 1991.
4.5 Form of First Supplemental Indenture to the First Mortgage Note Indenture
between, WPC, WPSC, WHX and Chemical Bank -- Incorporated herein by
reference to Exhibit 4.3 to the Company's Form S-4 Registration Statement
(No. 33-53591).
4.6 Form of Second Supplemental Indenture to the First Mortgage Note Indenture
between, WPC, WPSC, WHX and Chemical Bank -- Incorporated herein by
reference to Exhibit 4.4 to the Company's Form S-4 Registration Statement
(No. 33-53591).
4.7 Indenture ("Senior Note Indenture"), between WPC and Bank One, Columbus,
NA, as Trustee -- Incorporated herein by reference to Exhibit 4.1 to WPC's
Form S-3 Registration Statement (No. 33-50709).
4.8 Form of First Supplemental Indenture to the Senior Note Indenture between,
WPC, WHX and Bank One, Columbus, NA -- Incorporated herein by reference to
Exhibit 4.5 to the Company's Form S-4 Registration Statement (No.
33-53591).
4.9 Form of Pledge and Security Agreement dated as of November 15, 1991 among
WPSC, as pledgor, Chemical Bank, as collateral agent, trustee and
administrative agent and Citibank, N.A. as agent -- Incorporated herein by
reference to Exhibit 4.9 to the Company's Form S-2 Registration Statement
dated November 20, 1991.
4.10 Form of Collateral Agency and Intercreditor Agreement dated as of November
15, 1991 among WPSC, as pledgor, Chemical Bank, as collateral agent,
trustee and administrative agent and Citibank, N.A., as
agent -- Incorporated herein by reference to Exhibit 4.10 to the Company's
Form S-2 Registration Statement dated November 20, 1991.
4.11 Form of Intellectual Property Security Agreement and Assignment dated as
of November 15, 1991 among WPSC, as pledgor, Chemical Bank, as collateral
agent, trustee and administrative agent and Citibank, N.A., as
agent -- Incorporated herein by reference to Exhibit 4.11 to the Company's
Form S-2 Registration Statement dated November 20, 1991.
4.12 Form of Mortgage dated as of November 15, 1991, WPSC to Chemical Bank, as
collateral agent, mortgage and grantee -- Incorporated herein by reference
to Exhibit 4.12 to the Company's Form S-2 Registration Statement dated
November 20, 1991.
4.13 Pooling and Servicing Agreement dated as of August 1, 1994, among
Wheeling-Pittsburgh Funding, Inc., WPSC and Bank One, Columbus,
NA -- Incorporated herein by reference to Exhibit 4.13 to the WPC's Form
S-1 Registration Statement dated February 24, 1995.
10.1 Form of Key Employee Deferred Compensation Agreement -- Incorporated
herein by reference to Exhibit 10.1 to the 1990 10-K.
10.2 Cooperation Agreement dated February 7, 1984 between the Company and
Nisshin Steel Co., Ltd. -- Incorporated herein by reference to Exhibit
10.24 to the Company's Form S-1 Registration Statement No. 2-89295 as
filed with the Securities and Exchange Commission on February 7, 1984.
10.3 Amended and Restated Shareholders Agreement dated as of December 17, 1985
between Nisshin Steel Co., Ltd. and the Company -- Incorporated herein by
reference to Exhibit 10.13 to the Company's Form 10-K Annual Report for
the year ended December 31, 1985.
</TABLE>

50
<PAGE> 52

<TABLE>
<S> <C>
10.4 Agreement dated April 30, 1993 between Registrant and James L. Wareham --
Incorporated herein by reference to Exhibit 10.4 to the Company's Form
10-K for the fiscal year ended December 31, 1993.
10.5 Form of Key Employee Severance Agreement -- Incorporated herein by
reference to Exhibit 10.8 to the 1990 10-K.
10.6 Second Amended and Restated Shareholders Agreement dated as of November
12, 1990 between the Company and Nisshin Steel Co. Ltd. -- Incorporated
herein by reference to Exhibit 10.9 to the 1990 10-K.
10.7 Management Agreement dated as of January 3, 1991 between the Company and
WPN Corp. -- Incorporated herein by reference to Exhibit 10.11 to the 1990
10-K.
10.8 Amendment No. 1 to Management Agreement dated as of January 1, 1993
between the Company and WPN Corp.-Incorporated herein by reference to
Exhibit 10.8 to the Company's Form S-2 Registration Statement filed
February 23, 1993 (the "February Form S-2").
*10.9 Amendment No. 2 to Management Agreement dated as of April 11, 1994 between
the Company and WPN Corp.
10.10 1991 Incentive and Nonqualified Stock Option Plan of the
Company -- Incorporated herein by reference to Exhibit 10.13 to the
Company's Form S-2 Registration Statement (No. 33-43139).
10.11 Amendment No. 2 to the Credit Agreement dated as of November 13, 1991 by
and between WPSC, the Lenders named therein and Citibank, N.A. as Agent
for the Lenders -- Incorporated herein by reference to Exhibit 10.17 to
the Company's Form S-2 Registration Statement (No. 33-43139).
10.12 Wheeling-ISPAT Partners general partnership agreement dated September 21,
1994 by and between WP Steel Venture Corporation and ISPAT Mexicana, S.A.
De C.V. -- Incorporated herein by reference to Exhibit 10.1 to the
Company's Form 10-Q for the quarter ended September 30, 1994.
10.13 Amended and Restated Credit Agreement dated as of October 24, 1994 among
WPSC, the lenders party thereto, and Citibank, N.A., as
agent -- Incorporated herein by reference to Exhibit 10.2 to the Company's
Form 10-Q for the quarter ended September 30, 1994.
*21.1 Subsidiaries of Registrant.
</TABLE>

- ---------------
* -- previously filed as an exhibit to the Company's 1994 Form 10-K.

(b) REPORTS ON FORM 8-K.

None

51
<PAGE> 53

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has signed this report by the undersigned,
thereunto duly authorized in the City of New York, State of New York on April
19, 1995.

WHX CORPORATION

By: /s/ RONALD LABOW
------------------------------------
Ronald LaBow
Chairman of the Board

POWER OF ATTORNEY

WHX Corporation and each of the undersigned do hereby appoint Ronald LaBow,
Marvin Olshan and James Wareham, and each of them severally, its or his true and
lawful attorney to execute on behalf of WHX Corporation and the undersigned any
and all amendments to this Annual Report on Form 10-K and to file the same with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission; each of such attorneys shall have the power
to act hereunder with or without the other.

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- ---------------

<S> <C> <C>
By: /s/ JAMES L. WAREHAM (Director and Principal Executive April 19, 1995
- ---------------------------------------- Officer)
James L. Wareham

By: /s/ FREDERICK G. CHBOSKY (Principal Financial Officer and April 19, 1995
- ---------------------------------------- Principal Accounting Officer)
Frederick G. Chbosky

By: /s/ NEIL D. ARNOLD Director April 14, 1995
- ----------------------------------------
Neil D. Arnold

By: /s/ PAUL W. BUCHA Director April 19, 1995
- ----------------------------------------
Paul W. Bucha

By: /s/ ROBERT A. DAVIDOW Director April 19, 1995
- ----------------------------------------
Robert A. Davidow

By: /s/ WILLIAM GOLDSMITH Director April 19, 1995
- ----------------------------------------
William Goldsmith

By: /s/ RONALD LABOW Director April 19, 1995
- ----------------------------------------
Ronald LaBow

By: /s/ MARVIN L. OLSHAN Director April 19, 1995
- ----------------------------------------
Marvin L. Olshan

By: /s/ RAYMOND S. TROUBH Director April 19, 1995
- ----------------------------------------
Raymond S. Troubh
</TABLE>