Thanks to a great team effort, 2008 was another record-setting year for AK Steel. In fact, it was the company’s best year yet. Our full-year 2008 revenues reached an all-time high of $7.6 billion on shipments of 5.9 million tons. The company achieved a record average selling price of $1,303 per ton for the year, with record adjusted operating profit of $124 per ton—an all-time company best.

Fundamentals: Safety, Quality and Productivity

For AK Steel, 2008 was defined by the company’s ability to achieve record results despite an unprecedented global economic downturn that began late in the year. Our results reflect our proven ability to effectively manage the things within our control that matter most—our fundamentals, which are safety, quality and productivity.

Safety is our top priority at AK Steel, and our 2008 company-wide safety performance was eight times better than the steel industry average. As a result of our steadfast commitment to safety, AK Steel earned significant recognition from industry trade associations and government agencies.

For the first time in history, the American Coke and Coal Chemicals Institute (ACCCI) bestowed its highest award for safety on two cokemaking plants in the same year, both of which were AK Steel facilities. Employees at our Ashland, Kentucky and Middletown, Ohio coke plants worked the entire year of 2008 while logging a safety record of zero OSHA recordable injuries, earning each plant the coveted Max Eward Safety Award from the ACCCI. The recognition marks the 11th time in the past 12 years that an AK Steel cokemaking facility has earned the award, and the fourth consecutive year that our Ashland coke plant received the honor. Our Middletown coke plant is now an eight-time recipient of the Max Eward Safety Award.

Our Zanesville Works and AK Tube plant in Walbridge, Ohio were also recognized for their safety performance by the Ohio Bureau of Workers’ Compensation Division of Safety and Hygiene in 2008, and AK Tube in Columbus, Indiana was honored by the Fabricators & Manufacturers Association, International for its outstanding safety performance.

In addition to safety, AK Steel was recognized for delivering exceptional quality in 2008. Once again, our carbon, stainless and electrical steel customers rated AK Steel "Number One" in product quality and overall customer satisfaction. The company was also named to an elite group of 30 steel companies from around the globe in 2008, earning the prestigious "World-Class Steelmaker" designation from World Steel Dynamics, a leading steel industry information service. AK Steel is one of only four steelmakers headquartered in the U.S. to hold the "World-Class Steelmaker" designation.

And, prior to the onset of the global recession, all of our manufacturing units were operating at excellent productivity rates, with numerous records being set at our specialty steel plants.

Optimizing Our Margins

Throughout 2008, we continued to optimize AK Steel’s profit margins. We negotiated sales agreements that address volatility in our supply chain and continued to apply variable surcharges to account for changes in raw material and energy costs. We also honed our portfolio of products, markets and customers to strengthen our solid position in the marketplace.

In response to the sudden onset of the global recession late in the year, AK Steel took swift and aggressive action to control costs throughout the company. We temporarily idled certain operations and reduced pay for all salaried employees, including myself and all other executive officers. Even our Board of Directors took a pay cut. We also modified our salaried benefit plans and offered an early retirement program. As we continue to assess market conditions, we will take additional action, when necessary, to help ensure the long-term viability of AK Steel.

Rewarding Our Shareholders

At AK Steel, we continuously strive to enhance shareholder value. In addition to outstanding safety, quality and customer satisfaction, we led the metals industry in the use of corporate assets on FORTUNE’s prestigious list of America’s most admired companies in 2008. AK Steel was also named to the S&P 500 in 2008, aligning the company with the very best of America’s most prominent corporations.

To further enhance shareholder value, AK Steel implemented a quarterly dividend in 2008—our first since 2001. We also announced a stock buy-back program and repurchased roughly 1,650,000 shares of AK Steel’s common stock. In addition, we repurchased $19.6 million of our 7% percent senior notes due in 2012, and contributed $225 million to our pension trust fund in 2008—further de-leveraging our balance sheet.

Growing Our Profits

With record adjusted pre-tax income of $693 million in 2008, AK Steel continued to move steadily toward our goal of long-term, sustained profitability. We achieved record adjusted operating profit of $728 million in 2008, or $124 per ton—another all-time company best. That represents a 20 percent increase over our previous record of $103 per ton in adjusted operating profit, which was set in 2007. Our strong cash flows during 2008 produced a solid cash balance of $563 million at year-end.

Executing Our Business Plan

Since the fall of 2003, AK Steel has dramatically re-emerged as a leader in American steel manufacturing. Our experience continues to serve us well as we navigate the current global economic crisis.

In my opinion, no other steel company has assembled such a world-class team of industry veterans and young professionals. In fact, we were proud to have five of our outstanding young professionals from Middletown Works recognized in FORTUNE's "Faces of the Future" article in 2008.

In addition, AK Steel is well-served by its outstanding Board of Directors, including Robert H. Jenkins (Lead Director), Richard A. Abdoo, John S. Brinzo, Dennis C. Cuneo, William K. Gerber, Dr. Bonnie G. Hill, Daniel J. Meyer, Ralph S. (Mike) Michael III, Shirley D. Peterson and Dr. James A. Thomson. Their experience is a tremendous asset to AK Steel, and I would like to take this opportunity to thank them for their continued contributions to the company’s success.

I would especially like to thank Dan Meyer, who will be retiring from the Board in May of 2009. Mr. Meyer has been a Director of the company since January 1, 2000. His solid leadership has played a critical role in AK Steel’s financial recovery. We sincerely appreciate Dan’s service to the company and wish him great success in his future endeavors.

As a result of AK Steel’s turnaround over the past five years, the company entered the global recession financially sound and well-positioned to weather the economic storm. While no one can predict how deep, or how long, the current economic downturn will last, AK Steel will continue to react quickly, and prudently, to these extraordinary times—to position the company to compete, and to win, in today’s global steel business.

AK Steel continued to "FORGE Ahead" in 2008, and we’ll "ROLL On" in 2009 by striving to Remain focused on our key values, Outperform the expectations of our customers and shareholders, Lower our costs and Lift (or grow) our cash position.