Richard simplified an expression in three steps, as shown: x to the power of negative 4 multiplied by y to the power of 2, over y multiplied by x to the power of 2 multiplied by x to the power of 2 multiplied by y to the power of negative 4, the whole to the power of 3 equals x to the power of negative 12 multiplied by y to the power of 6, over y to the power of 3 multiplied by x to the power of 6 multiplied by x to the power of 6 multiplied by y to the power of negative 12 equals x to the power of negative 12 multiplied by y to the power of 6, over y to the power of negative 36 multiplied by x to the power of 36.

Which is the first incorrect step and why?

Step 1, all the exponents are multiplied by 3
Step 2, the exponents in the denominator are multiplied
Step 3, the exponents of the same base are subtracted during division
Step 3, the exponents of the same base are added during division