AK Steel Reports $92.7 Million Net Income For Second Quarter of 2004

Middletown, OH, July 20, 2004—AK Steel (NYSE: AKS) today reported net income of $92.7 million, or $0.85 per share of common stock, for the second quarter of 2004, compared to a net loss of $78.2 million, or $0.72 per share in the second quarter of 2003.

The 2004 second quarter results include an after-tax gain of $44.2 million, or $0.41 per share, on the sale of the company's Houston industrial park, completed on April 9, 2004, and a tax benefit related to discontinued operations of $27.2 million, or $0.25 per share. The tax benefit was due to AK Steel's improved financial results and outlook, and reflects the use of net operating loss carryforwards that were previously expected to expire unused.

AK Steel reported an operating profit of $56.4 million and income from continuing operations of $20.2 million, or $0.18 per share, in the second quarter of 2004, compared to an operating loss of $115.2 million and a loss from continuing operations of $86.6 million, or $0.80 per share, in the second quarter of 2003.

 “AK Steel employees have earned well-deserved congratulations for helping us quickly reach an important milestone - earning income from operations,” said James L. Wainscott, President and CEO of AK Steel. “Compared to where we were just nine months ago, that is a remarkable feat that we will savor only momentarily, as I believe all AK Steel employees recognize that much hard work remains in order to sustain and build upon the progress we have made.”

Mr. Wainscott reiterated the company's focus on what he termed “the 3 C's,” customers, costs and cash, for the first phase of the company's recovery.

“Our attention to customers has helped restore and even increase business, resulting in higher volumes and record quarterly revenues,” he said. “At the same time, we have made excellent progress in cost control and replenishing our cash position. As we move into the second phase of our return to sustainable profitability, we will work on developing long-term modifications to our labor agreements, contract sales arrangements and raw materials supply strategy.”

Net sales in the second quarter of 2004 totaled $1,311.8 million on shipments of 1,565,100 tons, 34% and 12% higher, respectively, than sales of $981.3 million and shipments of 1,399,000 tons in the year-ago quarter.

The company said that increased global steel demand spurred the higher shipment volumes and increases in spot market pricing helped increase revenues. Steel prices also rose as a result of surcharges implemented to help offset unprecedented prices paid for certain raw materials and energy sources. The company's average flat-rolled selling price per ton reached a record $835 per ton in the second quarter of 2004, up 22% from $682 per ton in the second quarter of 2003 and nearly 12% higher than the $747 per ton average in the first quarter of 2004.

For the first half of 2004, the company reported net sales of $2,446.2 million compared to $1,966.6 million in the first half of 2003. Operating profit for the first six months of 2004 was $57.9 million compared to an operating loss of $158.3 million in the same period last year. First half 2004 net income of $258.1 million, or $2.37 per share, includes $246.3 million for the combined gain on the sale of Douglas Dynamics and Greens Port Industrial Park in Houston. For the same period in 2003, AK Steel reported a net loss of $119 million, or $1.10 per share. AK Steel said its liquidity at the end of the second quarter of 2004 totaled $735 million, including cash and availability under its two credit facilities, including an accounts receivable-based revolving credit facility established in May.

Outlook

AK Steel said it expects continued improvements in its operating profitability for the third quarter and second half of 2004. The expected improvements are due primarily to anticipated higher selling prices and lower planned maintenance and overhead costs that, collectively, are expected to more than offset higher raw material costs.

AK Steel, headquartered in Middletown, Ohio, produces flat-rolled carbon, stainless and electrical steels, as well as tubular steel products for the automotive, appliance, construction and manufacturing markets. The statements in this release with respect to future earnings reflect management's estimates and beliefs and are intended to be, and hereby are identified as "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions readers that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently expected by management. Except as required by law, the Company disclaims any obligation to update any forward-looking statements to reflect future developments or events.

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