-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ImLJl/W8goIcGWQhCkn6ERiiqPJSOC0j8inQx+1ifqqx1vUYJjYjbHaBI+vASGqM hOpvYGo76uhKaXydu2JT/w== 0000011860-00-000022.txt : 20000504 0000011860-00-000022.hdr.sgml : 20000504 ACCESSION NUMBER: 0000011860-00-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BETHLEHEM STEEL CORP /DE/ CENTRAL INDEX KEY: 0000011860 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 240526133 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01941 FILM NUMBER: 617862 BUSINESS ADDRESS: STREET 1: 1170 EIGHTH AVE CITY: BETHLEHEM STATE: PA ZIP: 18016-7699 BUSINESS PHONE: 6106942424 MAIL ADDRESS: STREET 1: 1170 EIGHTH AVE CITY: BETHLEHEM STATE: PA ZIP: 18016-7699 10-Q 1 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 2000 Commission file number 1-1941 BETHLEHEM STEEL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 24-0526133 (State of incorporation) (I.R.S. Employer Identification No.) 1170 Eighth Avenue BETHLEHEM, PENNSYLVANIA 18016-7699 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (610) 694-2424 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 --- --- Number of Shares of Common Stock Outstanding as of May 1, 2000: 131,843,789 ----------- 2 BETHLEHEM STEEL CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX Page No. -------- PART I. Financial Information Consolidated Statements of Income- Three Months Ended March 31, 2000 and 1999 (unaudited). . . . . . . . . . . . . . . . . . . . . . 2 Consolidated Balance Sheets- March 31, 2000 (unaudited), December 31, 1999 and March 31, 1999 (unaudited). . . . . . . . . . . . . . . . . 3 Consolidated Statements of Cash Flows- Three Months Ended March 31, 2000 and 1999 (unaudited). . . . . . . . . . . . . . . . . . . . . . 4 Notes to Consolidated Financial Statements (unaudited) . . . . . . . 5 Management's Discussion and Analysis of Results of Operations and Financial Condition. . . . . . . . . . . . . . . 6 PART II. Other Information Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . 8 Item 4. Submission of Matters to a Vote of Security Holders. . 9 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 10 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 1 - 3 Bethlehem Steel Corporation CONSOLIDATED STATEMENTS OF INCOME (dollars and shares in millions, except per share data) (unaudited) Three Months Ended March 31 ---------------------- 2000 1999 --------- --------- Net Sales $1,106.8 $ 959.5 --------- --------- Costs and Expenses: Cost of sales 988.3 888.4 Depreciation and amortization 71.6 61.2 Selling, administration and general expense 27.8 29.4 --------- --------- Total Costs and Expenses 1,087.7 979.0 --------- --------- Income (Loss) from Operations 19.1 (19.5) Financing Income (Expense): Interest and other financing costs (16.6) (13.9) Interest and other income 1.2 2.3 --------- --------- Income (Loss) before Income Taxes 3.7 (31.1) Benefit (Provision) for Income Taxes (0.6) 5.5 --------- --------- Net Income (Loss) 3.1 (25.6) Dividends on Preferred and Preference Stock 10.3 10.3 --------- --------- Net Loss Applicable to Common Stock $ (7.2) $ (35.9) ========= ========= Net Loss per Common Share: Basic and Diluted $ (0.05) $ (0.28) Average Shares Outstanding: Basic and Diluted 131.2 129.7 Additional Data Steel products shipped (thousands of net tons) 2,384 2,011 Raw steel produced (thousands of net tons) 2,663 2,529
The accompanying Notes are an integral part of the Consolidated Financial Statements. - 2 - 4 Bethlehem Steel Corporation CONSOLIDATED BALANCE SHEETS (dollars in millions) ASSETS March 31 March 31 2000 December 31 1999 (unaudited) 1999 (unaudited) ----------- ----------- ----------- Current Assets: Cash and cash equivalents $ 141.7 $ 99.4 $ 84.7 Receivables, less allowances 227.0 235.0 310.5 Inventories: Raw materials 249.6 292.3 284.3 Finished and semifinished 583.2 572.5 744.0 --------- --------- --------- 832.8 864.8 1.028.3 Other current assets 9.4 10.2 8.2 --------- --------- --------- Total Current Assets 1,210.9 1,209.4 1,431.7 Investments and Miscellaneous Assets 123.9 123.1 90.4 Property, Plant and Equipment, less accumulated depreciation of $4,315.4, $4,263.6 and $4,170.7 2,881.9 2,899.7 2,678.2 Deferred Income Tax Asset - net 959.4 960.0 925.5 Net Assets of Discontinued Stainless Operations (Note 3) - 3.0 25.0 Goodwill, less accumulated amortization of $22.0, $19.0 and $10.0 338.0 341.0 350.0 --------- --------- --------- Total Assets $5,514.1 $5,536.2 $5,500.8 ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 397.4 $ 427.6 $ 380.2 Accrued employment costs 297.0 292.2 280.2 Accrued taxes 63.4 56.4 58.3 Debt and capital lease obligations 133.3 110.0 48.8 Other current liabilities 148.8 147.2 161.4 --------- --------- --------- Total Current Liabilities 1,039.9 1,033.4 928.9 Pension Liability 418.6 410.0 420.1 Postretirement Benefits Other Than Pensions 1,666.4 1,645.0 1,635.0 Long-term Debt and Capital Lease Obligations 709.1 754.1 599.4 Deferred Gain on Sales 112.8 117.4 131.3 Other Long-term Liabilities 295.2 299.2 330.4 Stockholders' Equity: Preferred Stock 11.6 11.6 11.6 Preference Stock 2.0 2.0 2.2 Common Stock 133.9 133.6 132.5 Common Stock held in treasury at cost (60.6) (60.6) (60.5) Additional paid-in capital 1,953.1 1,961.5 1,983.3 Accumulated deficit (767.9) (771.0) (613.4) --------- --------- --------- Total Stockholders' Equity 1,272.1 1,277.1 1,455.7 --------- --------- --------- Total Liabilities and Stockholders' Equity $5,514.1 $5,536.2 $5,500.8 ========= ========= =========
The accompanying Notes are an integral part of the Consolidated Financial Statements. - 3 - 5 Bethlehem Steel Corporation CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions) (unaudited) Three Months Ended March 31 ---------------------- 2000 1999 --------- --------- Operating Activities: Net income (loss) $ 3.1 $ (25.6) Adjustments for items not affecting cash from operating activities: Depreciation and amortization 71.6 61.2 Deferred income taxes 0.6 (5.5) Other - net (2.2) 1.0 Working capital (excluding financing and investing activities): Receivables - operating 5.6 (44.4) Receivables - sold - 40.0 Inventories 35.3 12.3 Accounts payable (30.2) (37.7) Employment costs and other 22.0 (16.6) --------- --------- Cash Provided from (Used for) Operations Before Funding Postretirement Benefits 105.8 (15.3) Funding Postretirement Benefits: Pension funding less than expense 8.6 4.7 Retiree healthcare and life insurance benefit payments less than expense 21.4 5.0 --------- --------- Cash Provided from (Used for) Continuing Operating Activities 135.8 (5.6) --------- --------- Cash Provided from Operating Activities of Discontinued Stainless Operations (Note 3) - 0.1 --------- --------- Investing Activities: Capital expenditures (52.9) (82.6) Payments related to the purchase of Lukens (Note 3) - (3.6) Cash proceeds from asset sales and other 3.0 82.6 --------- --------- Cash Used for Investing Activities (49.9) (3.6) --------- --------- Financing Activities: Borrowings 6.8 0.7 Debt and capital lease payments (28.4) (24.1) Cash dividends paid (10.1) (10.1) Other payments (11.9) (10.5) --------- --------- Cash Used for Financing Activities (43.6) (44.0) --------- --------- Net Increase (Decrease) in Cash and Cash Equivalents 42.3 (53.1) Cash and Cash Equivalents - Beginning of Period 99.4 137.8 --------- --------- - End of Period $ 141.7 84.7 ========= ========= Supplemental Cash Payment Information: Interest, net of amount capitalized $ 22.2 $ 21.6 Income taxes paid $ 0.2 0.1
The accompanying Notes are an integral part of the Consolidated Financial Statements. - 4 - 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The Consolidated Financial Statements as of and for the three month periods ended March 31, 2000 and 1999 were not audited. However, in Management's opinion, the information reflects all adjustments necessary for a fair statement of the results for the periods presented. Management believes all adjustments were of a normal and recurring nature. 2. These Consolidated Financial Statements should be read together with the 1999 audited financial statements in Bethlehem's Annual Report on Form 10-K filed with the Securities and Exchange Commission. Presentation of certain amounts in the prior year have been revised to be consistent with the current year. 3. On May 29, 1998, Bethlehem acquired all of the outstanding capital stock of Lukens Inc. The aggregate purchase price of $560.6 million comprises cash of $327.8 million, the issuance of 15.1 million shares of Bethlehem common stock valued at $184.8 million, and transaction related costs of $48.0 million. Transaction related costs of $3.6 million were paid during the first quarter of 1999. The transaction was accounted for as a purchase and, accordingly, Lukens' results are included in the Consolidated Financial Statements from the date of acquisition. The stainless and distribution businesses were acquired with the purchase of Lukens Inc. and are being accounted for as discontinued operations. Income or losses from these operations are not included in Bethlehem's operating results. In the first quarter of 2000, Bethlehem completed the planned divestiture of the stainless and distribution businesses acquired in the Lukens purchase for amounts essentially equal to $316 million. The net assets of these operations are shown separately on the balance sheet and consist primarily of property, plant and equipment and working capital. - 5 - 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION REVIEW OF RESULTS: FIRST QUARTER 2000 - FIRST QUARTER 1999 Bethlehem reported net income of $3 million for the first quarter of 2000, compared with net losses of $38 million for the fourth quarter of 1999 and $26 million for the first quarter of 1999. After deducting preferred dividend requirements, this is a loss of $.05 per diluted common share for the first quarter of 2000, compared with losses of $.37 and $.28 per share for the fourth quarter and first quarter of 1999. OPERATING RESULTS Our income from operations was $19 million for the first quarter of 2000, compared with losses from operations of $35 million for the fourth quarter of 1999 and $20 million for the first quarter of 1999. Our first quarter 2000 operating results improved from a year ago reflecting primarily higher shipments and lower costs, partially offset by a less favorable product mix. Our steel prices, on a constant mix basis, were slightly lower than a year ago. Our income from operations for the first quarter of 2000 improved by $54 million from a loss of $35 million for the fourth quarter of 1999 primarily due to higher realized prices and shipments. LIQUIDITY AND CAPITAL STRUCTURE At March 31, 2000, our total liquidity, comprising cash, cash equivalents and funds available under our bank credit arrangements, totaled $384 million, compared with $334 million at December 31, 1999. For the first quarter of 2000, cash provided from continuing operating activities was $136 million, compared with a cash use of $6 million for the first quarter of 1999. Principal uses of cash during the first quarter of 2000 included capital expenditures of $53 million and debt repayments of $28 million. Major uses of cash for 2000 are expected to be capital expenditures of about $250 million and public debt maturity payments of about $45 million. We expect to maintain an adequate level of liquidity during 2000 with cash provided from operations, available funds under our bank arrangements, improvements in working capital, primarily inventory reductions, and asset sales. - 6 - 8 DIVIDENDS On April 26, 2000, our Board of Directors declared dividends of $1.25 per share on Bethlehem's $5.00 Cumulative Convertible Preferred Stock, $0.625 per share on Bethlehem's $2.50 Cumulative Convertible Preferred Stock and $0.875 per share on Bethlehem's $3.50 Cumulative Convertible Preferred Stock, each payable June 10, 2000, to holders of record on May 10, 2000. No dividend was declared on Bethlehem's Common Stock. OUTLOOK The U.S. economy continues on a path of solid growth driven by strong consumer spending, low unemployment and business investment. Steel demand remains strong, led by record automotive sales and production. We currently believe that domestic industry shipments will be about 108 million tons this year. This compares with the estimated 105 million tons shipped in 1999. During the remainder of 2000, we expect to start up three new operations at Sparrows Point -- a new continuous cold mill complex, a pulverized coal injection facility and a wide-slab caster. Improving steel market conditions have allowed us to realize some further modest price restoration, and we expect that trend to continue due to our continuing strong order entry and shipment levels. Although overall steel market conditions have been improving because of continued strong domestic and improving global demand, import levels are too high because unfair trade continues. Our various trade efforts have achieved some success in restoring fair trade in certain steel products, and we will continue to take all appropriate legal, governmental affairs and public affairs actions to achieve fair trade in steel. FORWARD-LOOKING STATEMENTS This release contains forward-looking statements. Our use of the words "expect", "believe", "intent", "should", "plan" and similar words are intended to identify these statements as forward-looking. In accordance with the provisions of the Private Securities Litigation Reform Act of 1995, reference is made to "Item 1 - Business - Forward- Looking Statements" of Bethlehem's 1999 Annual Report on Form 10-K and to "Cautionary Statement" of Bethlehem's Registration Statement on Form S-4 filed with the Securities and Exchange Commission on April 24, 1998 for important factors that could cause actual results to differ materially from those projected. - 7 - 9 PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS. Bethlehem, in the ordinary course of its business, is the subject of various pending or threatened legal actions involving governmental agencies or private interests. Bethlehem believes that any ultimate liability arising from these actions should not have a material adverse effect on its consolidated financial position at March 31, 2000. Bethlehem does not have any material developments in legal proceedings to report for the first quarter of 2000. - 8 - 10 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Annual Meeting of the Stockholders of Bethlehem was held on April 25, 2000. The following nominees for director named in the Proxy Statement dated March 9, 2000 were elected at the Meeting by the votes indicated: For Withheld --- -------- Benjamin R. Civiletti 112,230,824 6,711,901 Worley H. Clark 113,269,433 5,673,292 John B. Curcio 113,255,017 5,687,708 Duane R. Dunham 113,306,023 5,636,702 Lewis B. Kaden 112,703,163 6,239,562 Harry P. Kamen 112,893,401 6,049,324 William M. Landuyt 113,402,557 5,540,168 Gary L. Millenbruch 113,351,177 5,591,548 Shirley D. Peterson 113,280,240 5,662,485 John F. Ruffle 113,369,385 5,573,340
The votes in favor of the election of the nominees represent at least 94% of the shares voted for each of the nominees. Ratification of the appointment of PricewaterhouseCoopers LLP as our Independent Auditors was approved by the following vote: For Against Abstentions --- ------- ----------- Number of Shares 116,746,781 1,291,495 904,449 There were no broker non-votes with respect to either of the matters voted upon at the Meeting. - 9 - 11 Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. The following is an index of the exhibits included in this Report on Form 10-Q: 11. Statement Regarding Computation of Earnings Per Share. 27. Financial Data Schedule. (b) Reports on Form 8-K. Bethlehem did not file any reports on Form 8-K during the First Quarter of 2000. - 10 - 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Bethlehem Steel Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Bethlehem Steel Corporation (Registrant) by /s/ L. A. Arnett ---------------------------- L. A. Arnett Vice President and Controller (principal accounting officer) Date: May 3, 2000 - 11 - 13 EXHIBIT INDEX The following is an index of the exhibits included in this Report: Item No. Exhibit - ---- ------- 11 Statement Regarding Computation of Earnings Per Share 27 Financial Data Schedule 14 EXHIBIT (11) BETHLEHEM STEEL CORPORATION Statement Regarding Computation of Earnings Per Share (dollars in millions and shares in thousands, except per share data) Three Months Ended March 31 ---------------- Basic Earnings Per Share 2000 1999 ------------------------ ---- ---- Net Income (Loss) $3.1 ($25.6) Less Dividend Requirements: $2.50 Preferred Dividend (2.5) (2.5) $5.00 Preferred Dividend (3.1) (3.1) $3.50 Preferred Dividend (4.5) (4.5) 5% Preference Dividend (0.1) (0.2) -------- -------- Total Preferred and Preference Dividends (10.2) (10.3) -------- -------- Net Income (Loss) Applicable to Common Stock ($7.1) ($35.9) ======== ======== Average Shares of Common Stock 131,198 129,670 Basic Earnings (Loss) Per Share ($0.05) ($0.28) ======== ======== Diluted Earnings Per Share -------------------------- Net Income (Loss) $3.1 ($25.6) Less Dividend Requirements: $2.50 Preferred Dividend (2.5) (2.5) $5.00 Preferred Dividend (3.1) (3.1) $3.50 Preferred Dividend (4.5) (4.5) 5% Preference Dividend (0.1) (0.2) -------- -------- Net Income (Loss) Applicable to Common Stock ($7.1) ($35.9) ======== ======== Average Shares of Common Stock and Equivalents and Other Potentially Dilutive Securities Outstanding: Common Stock 131,198 129,670 Stock Options - 51 $2.50 Preferred Stock * * $5.00 Preferred Stock * * $3.50 Preferred Stock * * 5% Preference Stock * * -------- -------- Total 153,219 129,721 ======== ======== Diluted Earnings (Loss) Per Share ($0.05) ($0.28) ======== ========
* Antidilutive 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 1000000 3-MOS MAR-31-2000 DEC-31-2000 142 0 247 20 833 1208 7197 4315 5514 1040 709 0 14 134 1125 5514 1107 1107 988 1088 0 0 17 4 (1) 3 0 0 0 3 (0.05) (0.05)
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