EX-99 3 financials.txt Exhibit 99.1 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 IN RE: BETHLEHEM STEEL CORPORATION, ET AL., Case No. 01-15288 (BRL) Debtors through 01-15302, 01-15308 through 01-15315 (BRL) MONTHLY OPERATING STATEMENT FOR THE PERIOD OCTOBER 15 TO NOVEMBER 30, 2001 DEBTORS' ADDRESS: Bethlehem Steel Corporation 1170 Eighth Avenue Bethlehem, PA 18016 DISBURSEMENTS: October 15 to November 30, 2001 (millions): $307.1 DEBTORS' ATTORNEY: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Harvey R. Miller (HM 6078) Jeffrey L. Tanenbaum (JT 9797) George A. Davis (GD 2761) NET LOSS: October 1 to November 30, 2001 (millions): ($120.6) REPORT PREPARER: Bethlehem Steel Corporation THIS OPERATING STATEMENT MUST BE SIGNED BY A REPRESENTATIVE OF THE DEBTOR The undersigned, having reviewed the attached report and being familiar with the Debtors' financial affairs, verifies under penalty of perjury, that the information contained herein is complete, accurate and truthful to the best of my knowledge. DATE: December 20, 2001 Lonnie A. Arnett ----------------------------- Lonnie A. Arnett Vice President, Controller and Chief Accounting Officer BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) (DEBTORS-IN-POSSESSION) CONSOLIDATED STATEMENTS OF EARNINGS (dollars and shares in millions, except per share data)
October 31, 2001 November 30, 2001 -------------------- ----------------------------------------------- One Month One Month ELEVEN MONTHS (unaudited) (unaudited) (unaudited) -------------------- --------------------- --------------------- NET SALES $ 274.3 $ 244.0 $ 3,106.2 -------------------- --------------------- --------------------- COSTS AND EXPENSES Cost of sales 287.6 273.1 3,215.3 Depreciation 25.6 17.8 228.5 Selling, administration and general expense 8.0 8.0 94.6 Unusual (gains) losses - - 21.2 -------------------- --------------------- --------------------- TOTAL COSTS AND EXPENSES 321.2 298.9 3,559.6 -------------------- --------------------- --------------------- LOSS FROM OPERATIONS (46.9) (54.9) (453.4) REORGANIZATION ITEMS (Note 5) (1.9) (1.3) (4.6) FINANCING INCOME (EXPENSE): Interest and other financing costs (Note 4) (12.6) (4.4) (98.3) Interest and other income - - 1.6 -------------------- --------------------- --------------------- TOTAL FINANCING INCOME (EXPENSE) (12.6) (4.4) (96.7) PARENT'S SHARE OF INCOME (LOSS) OF UNCONSOLIDATED SUBSIDIARIES 1.5 (0.1) 15.6 -------------------- --------------------- --------------------- LOSS BEFORE INCOME TAXES (59.9) (60.7) (539.1) BENEFIT (PROVISION) FOR INCOME TAXES - - (984.0) -------------------- --------------------- --------------------- NET LOSS (59.9) (60.7) (1,523.1) DIVIDENDS ON PREFERRED AND PREFERENCE STOCK 3.4 3.4 37.4 -------------------- --------------------- --------------------- NET LOSS APPLICABLE TO COMMON STOCK $ (63.3) $ (64.1) $ (1,560.5) ==================== ===================== ===================== Net Loss per Common Share: Basic and Diluted $ (0.49) $ (0.49) $ (12.00) AVERAGE SHARES OUTSTANDING: Basic and Diluted 130.2 130.3 130.0
The accompanying Notes are an integral part of the Consolidated Financial Statements. BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) (DEBTORS-IN-POSSESSION) CONSOLIDATED BALANCE SHEET (dollars in millions)
NOVEMBER 30, 2001 (unaudited) -------------------- ASSETS Current Assets: Cash and cash equivalents $ 138.6 Receivables, less allowances 388.6 Inventories: Raw materials 236.0 Finished and semifinished 460.0 -------------------- Total Inventories 696.0 Other current assets 24.9 -------------------- TOTAL CURRENT ASSETS 1,248.1 INVESTMENTS AND MISCELLANEOUS ASSETS 132.5 PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $4,256.6 2,661.1 DEFERRED INCOME TAX ASSET, net of valuation allowance of $1,431.7 - GOODWILL, less accumulated amortization of $42.0 318.0 -------------------- TOTAL ASSETS $ 4,359.7 ==================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 132.5 Accrued employment costs 28.6 Secured debt and capital lease obligations in default (Note 4) 152.1 Other current liabilities 51.5 -------------------- TOTAL CURRENT LIABILITIES 364.7 DEBTOR-IN-POSSESSION FINANCING (Note 2) 209.8 INVENTORY CREDIT FACILITY (Note 2) 289.9 DEFERRED GAIN AND OTHER LONG-TERM LIABILITIES 105.3 LIABILITIES SUBJECT TO COMPROMISE (Note 3) 3,813.0 STOCKHOLDERS' EQUITY (DEFICIT): Preferred Stock 11.6 Preference Stock 2.0 Common Stock 135.3 Common Stock held in treasury at cost (65.9) Additional paid-in capital 1,908.3 Accumulated other comprehensive loss (Note 6) (1.7) Accumulated deficit (2,412.6) -------------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (423.0) -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 4,359.7 ====================
The accompanying Notes are an integral part of the Consolidated Financial Statements. BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) (DEBTORS-IN-POSSESSION) CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)
OCTOBER 31, 2001 NOVEMBER 30, 2001 -------------------- ----------------------------------------- MONTH MONTH ELEVEN MONTHS ENDED ENDED ENDED (unaudited) (unaudited) (unaudited) -------------------- ------------------- ------------------- Operating Activities: Net loss $ (59.9) $ (60.7) $ (1,523.1) Adjustments for items not affecting cash from operating activities: (Income) loss from unconsolidated subsidiaries 1.5 0.1 (15.6) Deferred income taxes - - 984.0 Depreciation and amortization 25.6 17.8 228.5 Unusual (gains) losses - - 21.2 Recognition of deferred gains (2.0) (2.0) (20.9) Reorganization items (Note 5) 1.9 1.3 4.6 Litigation recovery - - 13.0 Other - net (0.6) 1.2 30.0 Working capital (excluding financing and investing activities): Receivables - operating (42.2) 22.9 (34.3) Receivables - financing (212.0) - (212.0) Inventories 21.2 25.5 158.3 Accounts payable 51.1 56.5 18.8 Other 0.6 7.4 5.3 Funding postretirement benefits: Pension funding less than expense 4.8 7.3 88.5 Retiree healthcare and life insurance benefit payments (more) less than expense 3.4 (1.6) 79.0 -------------------- ------------------- ------------------- Cash Provided From (Used For) Operating Activities Before Reorganization Items (206.6) 75.7 (174.7) -------------------- ------------------- ------------------- Reorganization items (Note 5) (1.9) (1.3) (4.6) -------------------- ------------------- ------------------- Cash Provided From (Used For) Operating Activities (208.5) 74.4 (179.3) -------------------- ------------------- ------------------- Investing Activities: Capital expenditures (5.3) (9.9) (71.1) Cash proceeds from asset sales 30.9 - 46.6 -------------------- ------------------- ------------------- Cash Provided From (Used For) Investing Activities 25.6 (9.9) (24.5) -------------------- ------------------- ------------------- Financing Activities: Borrowings 258.3 - 408.7 Debt and capital lease payments (31.5) (9.6) (102.1) Cash dividends paid - - (20.2) Other payments (2.7) (3.5) (33.8) -------------------- ------------------- ------------------- Cash Provided From (Used For) Financing Activities 224.1 (13.1) 252.6 -------------------- ------------------- ------------------- Net Increase (Decrease) in Cash and Cash Equivalents 41.2 51.4 48.8 Cash and Cash Equivalents - Beginning of Period 46.0 87.2 89.8 -------------------- ------------------- ------------------- - End of Period $ 87.2 $ 138.6 $ 138.6 ==================== =================== =================== Supplemental Cash Payment Information: Interest, net of amount capitalized $ 4.9 $ 0.2 $ 81.0 Income taxes paid (received) - - (0.2) Capital lease obligations incurred 0.2 - 5.2 Debt assumed in purchase combination - - 18.9 LIQUIDITY AT MONTH END $ 264.3 $ 347.9 $ 347.9
The accompanying Notes are an integral part of the Consolidated Financial Statements. BETHLEHEM STEEL CORPORATION, ET AL. CASE NO. 01-15288 (BRL) THROUGH 01-015302, 01-15308 THROUGH 01-15315 (BRL) (DEBTORS-IN-POSSESSION) NOTES TO NOVEMBER 30, 2001 FINANCIAL STATEMENTS (unaudited) 1. On October 15, 2001, Bethlehem Steel Corporation and 22 of its wholly-owned subsidiaries (collectively, the Debtors) filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the "Court"). The Debtors continue to manage their businesses as debtors-in-possession in the ordinary course of business. Transactions outside the ordinary course of business require Court approval. Subsequent to the filing of the chapter 11 petitions, the Court entered several orders authorizing, but not requiring, the Debtors to pay certain pre-petition liabilities (such as employee wages and benefits) and take certain actions to preserve the going concern value of the business that should enhance the prospects of reorganization. These consolidated financial statements of the Debtors have been prepared in conformity with generally accepted accounting principles on a going concern basis, which contemplates continuity of operations, realization of assets and payment of liabilities. Under bankruptcy law, actions by creditors to collect pre-petition indebtedness owed by the Debtors are stayed and other pre-petition contractual obligations may not be enforced against the Debtors. As a result of the chapter 11 filing, there is no assurance that the carrying amounts of assets will be realized or that liabilities will be settled for amounts recorded. After negotiations with various parties in interest, the Debtors expect to present a chapter 11 plan to restructure their obligations. A chapter 11 plan will likely change the amounts reported in the financial statements and cause a material change in the carrying amount of assets and liabilities. These financial statements have been prepared in accordance with the AICPA's Statement of Position 90-7 Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (SOP 90-7). SOP 90-7 requires segregating liabilities incurred prior to October 15, 2001 (pre-petition) that are subject to compromise and identifying all transactions and events that are directly associated with the reorganization of the Debtors. Also, in accordance with SOP 90-7, pre-petition interest is no longer being accrued on any unsecured or undersecured debt. Due to material uncertainties, it is not possible to predict the length of time the Debtors will operate under chapter 11 protection, the outcome of the proceedings in general, the effect of the proceedings on the Debtors' businesses or the recovery by creditors of the Debtors and equity holders of Bethlehem. 2. The Court approved a $450 million debtor-in-possession (DIP) financing with the General Electric Capital Corporation (GECC). The GECC financing is collateralized by, among other things, a senior lien on substantially all of the Debtors' assets, excluding inventory and those assets that had previously been subject to a lien, and a junior lien on inventory and those assets that had previously been subject to a lien. The GECC financing expires on the earlier of confirmation of a plan of reorganization or October 15, 2003. Bethlehem subsidiaries that did not file for chapter 11 protection have guaranteed the financing. The Debtors pay interest on this financing at their option at either (1) an indexed rate, typically based on the prime rate, plus 2.5% or (2) LIBOR plus 3.5%. The GECC financing contains certain financial performance covenants and restricts the ability to pay dividends. Initial proceeds from the GECC financing were used to repurchase $260 million of accounts receivable that had been sold under the Debtors' $340 million receivables purchase/sale facility. The $290 million the Debtors had borrowed under their inventory credit facility remains outstanding as secured debt. Interest is payable monthly in arrears on the GECC facility and as adequate protection on the inventory facility. 3. Except for secured debt and capital lease obligations, all recorded pre-petition liabilities of the Debtors have been classified as liabilities subject to compromise. The Court has authorized, but did not require, payments of wages and certain employee benefits and certain other pre-petition obligations. Net changes in pension and other postemployment benefits since October 15, 2001 are included in liabilities subject to compromise. Payments of $84 million have been made on pre-petition obligations, primarily for wages, active and retiree health care expenses and for other employee related costs. Liabilities subject to compromise (in millions) at November 30, 2001 were as follows: Other postemployment benefits $ 2,000.8 Pension 561.8 Unsecured debt 529.1 Accounts payable 217.6 Accrued employment costs 274.3 Other accrued liabilities 155.9 Accrued taxes and interest 73.5 ----------------- Total $ 3,813.0 ================= 4. The Debtors' filing for chapter 11 represented an Event of Default under each of their then existing debt instruments. As a result, all secured debt (including capital lease obligations), other than the DIP financing and inventory credit agreement, has been classified as a current liability at November 30, 2001, while all unsecured debt has been classified as a liability subject to compromise. Under bankruptcy law, the Debtors are not permitted to make scheduled principal and interest payments on debt, unless specifically ordered by the Court. The Court has authorized payment of interest on the GECC financing and inventory financing facilities. In addition, certain other stipulations and motions requesting or providing for adequate protection payments on certain secured debt and capital lease obligations have been filed with the Court and are awaiting a hearing. Interest on unsecured debt that was not charged to earnings for the period from the petition date to November 30, 2001 was approximately $6 million. 5. Net costs resulting from reorganization of the businesses have been reported in the statement of earnings separately as reorganization items. For the one month period ended October 31, 2001 and for the month and eleven month periods ended November 30, 2001, the following have been incurred (in millions): October 31, 2001 November 30, 2001 -------------- ---------------------------------- One One Eleven Month Month Months -------------- -------------- -------------- Professional fees $ 1.9 $ 1.5 $ 4.8 Interest income 0.0 (0.2) (0.2) ----------------- ----------------- ----------------- Total $ 1.9 $ 1.3 $ 4.6 ================= ================= ================= 6. The total non-owner changes in stockholders' equity (deficit) was a decrease of $1.5 billion for the eleven months ended November 30, 2001. It was comprised of the net loss, the transition adjustment related to adopting Statement No. 133, and the net unrealized losses on derivative instruments used for hedging. 7. Upon the filing of the chapter 11 cases, the Debtors did not close their records as of the filing date and, therefore, a statement of earnings and statement of cash flows from the filing date through October 31, 2001 is not available. Instead, information for the entire month of October has been provided. 8. Summarized financial statements for Bethlehem Steel Corporation and Consolidated Subsidiaries are as follows: STATEMENT OF EARNINGS ELEVEN MONTHS ENDED NOVEMBER 30, (dollars in millions) 2001 -------------------- Net Sales $ 3,135.2 Costs and Expenses 3,582.7 -------------------- Loss from Operations (447.5) Reorganization Items (4.6) Financing Income (Expense) - Net (87.0) -------------------- Loss before Income Taxes (539.1) Provision for Income Taxes (984.0) -------------------- Net Loss (1,523.1) Dividends on Preferred and Preference Stock 37.4 -------------------- Net Loss Applicable to Common Stock $ (1,560.5) ==================== SUMMARY BALANCE SHEET NOVEMBER 30, (dollars in millions) 2001 -------------------- ASSETS Current Assets Cash and cash equivalents $ 141.3 Receivables, less allowances 393.7 Inventories 708.3 Other current assets 25.6 -------------------- Total Current Assets 1,268.9 Investments and miscellaneous assets 141.7 Property, plant and equipment, net 2,720.4 Goodwill 318.0 -------------------- Total Assets $ 4,449.0 ==================== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Secured debt and capital lease obligations in default $ 152.1 Accounts payable 145.8 Accrued employment costs and taxes 55.6 Other current liabilities 50.6 -------------------- Total Current Liabilities 404.1 Debtor-in-Possession Financings 499.7 Defered Gain 105.0 Other Long-term Liabilities 50.1 Liabiliites Subject to Compromise 3,813.0 Total Stockholders' Deficit (422.9) -------------------- Total Liabilities and Stockholders' Deficit $ 4,449.0 ==================== BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Schedule of Federal, State and Local Taxes Collected, Received, Due or Withheld October 15, 2001 to November 30, 2001 (dollars in thousands) Gross Wages and Salaries Paid $93,910 Payroll Taxes Withheld $25,284 Employer Payroll Taxes Incurred $6,775 Gross Sales Subject to Taxes $1,777 Sales Tax Collected or Self-Assessed $299 Property Tax Payments Due (1) $13,286 Property Tax Paid None All Other Taxes Paid Wholesale license tax - Delaware $18 Business and Occup. - Washington 2 TOTAL $20 ================ (1) Represents the amount of tax payments that were to be due, however the amounts have been classified as liabilities subject to compromise and payment has been withheld. No post-petition property tax liabilities were due to be paid. BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Employee/Employer Federal Income Tax and FICA Tax Paid October 15, 2001 to November 30, 2001 (dollars in thousands) Taxing Authority Date Paid Amount Paid ---------------------------------- ----------- ----------------- Internal Revenue Service 10/19/01 $2,183 Internal Revenue Service 10/22/01 477 Internal Revenue Service 10/25/01 2,016 Internal Revenue Service 10/26/01 406 Internal Revenue Service 10/29/01 313 Internal Revenue Service 11/1/01 6,673 Internal Revenue Service 11/5/01 872 Internal Revenue Service 11/8/01 2,121 Internal Revenue Service 11/9/01 392 Internal Revenue Service 11/13/01 122 Internal Revenue Service 11/15/01 2,438 Internal Revenue Service 11/19/01 625 Internal Revenue Service 11/23/01 2,588 Internal Revenue Service 11/26/01 22 Internal Revenue Service 11/29/01 2,228 ----------------- TOTAL $23,477 ================= BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Payments for State Income Tax Withheld October 15, 2001 to November 30, 2001 (dollars in thousands) Taxing Authority Date Paid Amount Paid -------------------------------- -------------- ---------------- Indiana 10/19/01 1,092 Maryland 10/19/01 740 New York 10/19/01 697 Pennsylvania 10/22/01 282 New York 10/24/01 103 Pennsylvania 10/24/01 96 New York 10/26/01 72 Indiana 10/26/01 2 North Carolina 10/26/01 49 New York 10/31/01 21 North Carolina 10/31/01 21 Pennsylvania 11/5/01 16 New Jersey 11/5/01 16 Virginia 11/5/01 16 Illinois 11/5/01 15 Wisconsin 11/5/01 14 North Carolina 11/6/01 5 New York 11/7/01 5 Ohio 11/9/01 4 Indiana 11/9/01 6 Georgia 11/9/01 6 Kentucky 11/9/01 5 South Carolina 11/9/01 2 Missouri 11/9/01 2 State of Michigan 11/12/01 1 New York 11/14/01 1 Maryland 11/15/01 1 Indiana 11/20/01 1 Pennsylvania 11/20/01 1 Indiana 11/20/01 1 New York 11/21/01 1 Indiana 11/23/01 3 New York 11/26/01 1 New York 11/27/01 1 Other Various 4 ---------------- TOTAL $3,302 ================ BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Payments for Local Income Tax Withheld October 15, 2001 to November 30, 2001 (dollars in thousands) Taxing Authority Date Paid Amount Paid -------------------------------- ------------- ------------- Indiana Dept. of Revenue 10/19/01 $52 Coatesville Area 10/29/01 181 City of Bethlehem 10/29/01 164 Lancaster Cty. 10/29/01 43 City of Bethlehem 10/29/01 25 Central Tax Bureau of PA. 10/29/01 15 Lebanon Cty. EIT 10/29/01 5 City of Philadelphia 11/14/01 8 Indiana DOR 11/20/01 57 City of Bethlehem 11/20/01 12 Ohio Regional Tax Bureua 11/20/01 1 Other Various 2 ------------- TOTAL $564 ============= BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Payments for Employer Unemployment Insurance October 15, 2001 to November 30, 2001 (dollars in thousands) Taxing Authority Date Paid Amount Paid ------------------------------ ------------- ------------- Pennsylvania 10/26/01 33 Internal Revenue Service 10/26/01 9 Maryland 10/26/01 7 Other 10/26/01 1 ------------- TOTAL $50 ============= BETHLEHEM STEEL CORPORATION, ET AL. Case No. 01-15288 (BRL) through 01-015302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Payments for Sales and Use Taxes October 15, 2001 to November 30, 2001
(dollars in thousands) Taxing Authority Date Paid Amount Paid ----------------------------------- -------------------- --------------- CUSTOMER SALES TAXES COLLECTED Florida 10/19/01 $2 Maryland 10/19/01 1 Pennsylvania 10/19/01 31 Illinois 10/24/01 3 Lousianna 10/24/01 11 Massachusetts 10/24/01 2 Wisconsin 10/24/01 2 Georgia 11/16/2001 3 Kentucky 11/16/2001 0 Missouri 11/16/2001 1 Wisconsin 11/16/2001 43 Florida 11/19/2001 4 Maryland 11/19/2001 2 Pennsylvania 11/19/2001 23 -------------- TOTAL 77 SALES AND USE TAX - SELF ASSESSED New York 10/24/01 7 Indiana 10/19/01 74 Pennsylvania 10/19/01 45 Maryland 10/19/01 33 New York 11/16/01 19 Indiana 11/19/01 75 Pennsylvania 11/19/01 63 Maryland 11/19/01 32 Indiana 11/30/01 2 Other Various 1 -------------- TOTAL 350 -------------- TOTAL - ALL $427 ==============
BETHLEHEM STEEL CORPORATION, ET AL. CASE NO. 01-15288 (BRL) THROUGH 01-015302, 01-15308 THROUGH 01-15315 (BRL) MONTHLY OPERATING REPORT STATEMENT ON INSURANCE OCTOBER 15, 2001 TO NOVEMBER 30, 2001 All insurance policy premiums due, including those for workers compensation and disability insurance, have been paid and all the policies remain in force.