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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2004

OR

For the transition period from              to             

Commission File No. 1-13696

AK STEEL HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

(513) 425-5000

(Registrant’s telephone number, including area code)

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 filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

108,704,401 shares of common stock

(as of April 30, 2004)

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AK STEEL HOLDING CORPORATION

INDEX

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AK STEEL HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions, except per share data)

See notes to consolidated financial statements.

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AK STEEL HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

See notes to consolidated financial statements.

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AK STEEL HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

See notes to consolidated financial statements.

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AK STEEL HOLDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in millions, except per share data)

In the opinion of the management of AK Steel Holding Corporation (“AK Holding”) and AK Steel Corporation (“AK Steel”, and together with AK Holding, the “Company”), the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company as of March 31, 2004 and the results of its operations and cash flows for the three-month periods ended March 31, 2003 and 2004. The results of operations for the three months ended March 31, 2004 are not necessarily indicative of the results to be expected for the year ending December 31, 2004. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2003.

Inventories are valued at the lower of cost or market. The cost of the majority of inventories is measured on the last in, first out (LIFO) method. Other inventories are measured principally at average cost.

Net periodic benefit costs for pension and other postretirement benefits were as follows:

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The Medicare Prescription Drug, Improvement and Modernization Act of 2003 provides a federal subsidy to sponsors of retiree healthcare benefit plans that include a qualified prescription drug benefit. The Company sponsors such a plan. Based on current temporary guidance, because its benefit plan’s measurement date preceded the effective date of the Act, the Company was not permitted to recognize the effects of the Act until February 8, 2004. The Company expects that savings in per capita prescription claim costs due to the impact of the Act will result in a reduction in the Company’s accumulated postretirement benefit obligation of approximately $140.0. These savings are included in unrecognized actuarial net gains and losses and will be recognized into income over future periods. In 2004, the Company expects to recognize a reduction in net periodic benefit costs related to these savings of approximately $17.0, excluding any possible fourth quarter corridor adjustment. Final authoritative guidance on accounting for the federal subsidy, when issued, could affect these estimates and require the Company to change previously reported information.

Common stock compensation expense related to restricted stock awards granted under the Company’s Stock Incentive Plan (“SIP”) was $1.5 and $2.0 for the three-month periods ended March 31, 2003 and 2004, respectively. The Company uses the intrinsic value method to account for nonqualified stock options granted under the SIP. Had compensation expense for the Company’s stock option plans been determined based on the fair value method, the Company’s net income (loss) and basic and diluted income (loss) per share would have been adjusted as follows:

On March 31, 2004, the Company sold Douglas Dynamics, L.L.C. for $264.0, before fees and expenses, and recognized a pre-tax gain of $208.3 ($174.9, after tax, or $1.61 per share) in the first quarter. On April 9, 2004, the Company sold Greens Port Industrial Park for $75.0, before fees and expenses, and expects to recognize a pre-tax gain of approximately $46.0 in the second quarter of 2004. Both businesses were accounted for as discontinued operations. Income from discontinued operations for the three months ended March 31, 2003 and 2004 included the following:

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Comprehensive income (loss), net of tax, is as follows:

A 40% deferred tax rate is applied to derivative instrument hedges and unrealized gains and losses.

Accumulated other comprehensive loss is as follows:

The following are updates to the Company’s descriptions of pending legal proceedings and environmental matters reported in its Annual Report on Form 10-K for the calendar year 2003:

As previously reported, on January 2, 2002, John D. West, a former employee, filed a purported class action in the United States District Court for the Southern District of Ohio against the AK Steel Corporation Retirement Accumulation Pension Plan (the “AK RAPP”) and the AK Steel Corporation Benefit Plans Administrative Committee (the “AK BPAC”). The plaintiff claims that the method used under the AK RAPP to determine lump sum distributions does not comply with the Employment Retirement Income Security Act of 1974 (“ERISA”) and results in underpayment of benefits to putative class members. It previously was reported that the plaintiff had filed a motion to certify the case as a class action and that the parties have filed cross-motions for summary judgment on the merits of the plaintiff’s claims. On March 9, 2004, the Court granted the plaintiff’s motion to certify the case as a class action. On April 8, 2004, the Court granted the plaintiff’s motion for partial summary judgment and held that the manner in which the plaintiff’s lump sum disbursement was calculated under the AK RAPP violated ERISA and the Internal Revenue Code. The Court further denied the defendants’ motion for summary judgment and ordered that the matter proceed to trial on the issue of damages. No trial date has yet been set. The defendants intend to continue to contest this matter vigorously.

As previously reported, in April 2000 an action was filed in the United States District Court for the Southern District of Ohio by Bernard Fidel and others against the Company and certain of its directors and officers. The plaintiffs allege material misstatements and omissions in the Company’s public disclosure about its business and operations. It previously was reported that the parties have entered into a settlement agreement, which is subject to court approval. On March 30, 2004, the Court entered an Order preliminarily approving the settlement agreement and setting July 9, 2004 as the date for a final settlement hearing in the matter. The Company does not consider the amount of the settlement to be material and, in any event, the settlement amount is well within the limits of the Company’s applicable insurance.

As previously reported, on December 10, 2003, Richard M. Wardrop, Jr., the Company’s former chairman and CEO, filed an arbitration demand in which he asserted claims for benefits under a written severance agreement and under the Company’s Executive Minimum and Supplemental Retirement Plan as a result of the termination of his employment with the Company in September 2003. The total amount of his claims was in excess of $51.0. In April 2004, the Company and Mr. Wardrop reached a settlement of his claims which involved an agreed-upon payment of an amount significantly less than was claimed by Mr. Wardrop. The settlement involves a lump-sum pension payment that was paid entirely from a portion of the funds maintained in a “rabbi trust” account. The Company expects that the settlement will have no material impact on its earnings or liquidity. As part of the settlement, Mr. Wardrop’s arbitration proceeding has been terminated.

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As previously reported, the State of Ohio has asserted claims against the Company that air emissions from the operation of the blast furnace and basic oxygen furnace at the Company’s Middletown Works were causing a public nuisance. In June 2000, AK Steel filed a verified complaint against the State of Ohio and the Ohio Environmental Protection Agency (“OEPA”) in the Court of Common Pleas for Butler County, Ohio (the “State Action”) seeking a declaration, among other things, that the blast furnace and basic oxygen furnaces at the Middletown Works were not causing a public nuisance, and that AK Steel was in compliance with its operating permits for those facilities. It previously was reported that AK Steel and OEPA have been engaged in settlement discussions related to the OEPA air nuisance claims. On March 31, 2004, AK Steel and the OEPA executed and filed an agreed-upon Consent Order in the Court of Common Pleas for Butler County, Ohio (the “Consent Order”). A major component of the Consent Order is AK Steel’s commitment to install pollution control equipment at the Middletown Works blast furnace to meet MACT standards of the federal Clean Air Act by May 2005, one year in advance of the mandatory compliance date. AK Steel also agreed to implement a community response program, a neighborhood cleaning program and a green belt extension, to continue intra-plant employee busing and to pay a civil penalty of approximately $1.7, of which approximately $0.3 will be paid in the form of cash and the rest will be offset by credits for supplemental environmental projects. As a result of the Consent Order, all of the OEPA’s air nuisance claims relating to the Middletown Works blast furnace and basic oxygen furnaces have been resolved and the State Action has been dismissed. Certain appeals also previously reported in the Company’s Form 10-K related to the OEPA air nuisance claims are in the process of being dismissed.

In the quarter ended March 31, 2004, the Company adopted the revised FASB Interpretation No. 46, “Consolidation of Variable Interest Entities.” The revised interpretation requires the Company, under certain circumstances, to consolidate all variable interest entities. The adoption of the Interpretation did not have a material effect on the Company’s financial position, results of operations or cash flows.

AK Holding, along with Douglas Dynamics, L.L.C., AK Tube LLC and AKS Investments, Inc. (the “Guarantor Subsidiaries”), fully and unconditionally, jointly and severally guarantee the payment of interest, principal and premium, if any, on AK Steel’s 9% Senior Notes Due 2007, 8 ⁷/8% Senior Notes Due 2008, 7 ⁷/8% Senior Notes Due 2009, 7 ³/4% Senior Notes Due 2012 and Senior Secured Notes Due 2004. On March 31, 2004, Douglas Dynamics, L.L.C. was sold (see Note 6). AK Steel’s other subsidiaries are not guarantors of these notes. The Company has determined that full financial statements and other disclosures concerning AK Holding and the Guarantor Subsidiaries would not be material to investors and, accordingly, those financial statements are not presented. The following supplemental consolidating financial statements present information about AK Holding, AK Steel, the Guarantor Subsidiaries and AK Steel’s other subsidiaries.

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Statements of Operations

For the Three Months Ended March 31, 2003

Statements of Operations

For the Three Months Ended March 31, 2004

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Condensed Balance Sheets

As of December 31, 2003