EX-99 3 mv-1029_mor.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 SEPTEMBER 1 TO SEPTEMBER 30, 2002 DEBTORS' ADDRESS: Bethlehem Steel Corporation 1170 Eighth Avenue Bethlehem, PA 18016 DISBURSEMENTS: September 1 to September 30, 2002 (millions): $319.9 (see attached schedule for disbursements by Debtor) DEBTORS' ATTORNEY: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Jeffrey L. Tanenbaum (JT 9797) George A. Davis (GD 2761) NET LOSS: September 1 to September 30, 2002 (millions): $13.5 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: October 21, 2002 /s/ Lonnie A. Arnett ------------------------------ Lonnie A. Arnett Vice President, Controller and Chief Accounting Officer Bethlehem Steel Corporation Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and shares in millions, except per share data)
September 30, 2002 ------------------------------------ Month Ended Nine Months Ended (unaudited) (unaudited) --------------- ---------------- Net Sales $ 315.5 $ 2,675.8 --------------- ---------------- Costs and Expenses Cost of sales 295.9 2,630.2 Depreciation 20.6 187.0 Selling, administration and general expense 6.4 67.1 Special charges (Note 2) - 22.5 --------------- ---------------- Total Costs and Expenses 322.9 2,906.8 --------------- ---------------- Loss from Operations (7.4) (231.0) Reorganization Items (Note 3) (1.5) (10.7) Financing Expense - net (Note 4) (4.6) (39.0) --------------- ---------------- Loss before Income Taxes (13.5) (280.7) Benefit from Income Taxes (Note 5) - 10.3 --------------- ---------------- Net Loss (13.5) (270.4) Dividend Requirements on Preferred and Preference Stock 3.2 29.6 --------------- ---------------- Net Loss Applicable to Common Stock $ (16.7) $ (300.0) =============== ================ Net Loss per Common Share: Basic and Diluted $ (0.13) $ (2.29) Average Shares Outstanding: Basic and Diluted 131.0 131.0
The accompanying Notes are an integral part of the Consolidated Financial Statements. See Note 8 for Consolidated Statement of Operations for Debtors Only. Bethlehem Steel Corporation Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) CONSOLIDATED BALANCE SHEET (dollars in millions)
September 30, 2002 (unaudited) ------------------ ASSETS Current Assets: Cash and cash equivalents $ 86.3 Receivables - net 382.5 Inventories: Raw materials 244.2 Finished and semifinished 500.7 ------------------ Total Inventories 744.9 Other current assets 24.2 ------------------ Total Current Assets 1,237.9 Investments and Miscellaneous Assets 83.2 Property, Plant and Equipment - net 2,714.7 Intangible Pension Asset 225.0 ------------------ Total Assets $ 4,260.8 ================== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 153.7 Accrued employment costs 96.8 Secured debt and capital lease obligations - current (Note 7) 93.8 Other current liabilities 86.0 ------------------ Total Current Liabilities 430.3 Secured Debt and Capital Lease Obligations 123.2 Debtor-in-Possession Financing 280.7 Debt Secured by Inventory 289.9 Deferred Gain and Other Long-term Liabilities 130.0 Liabilities Subject to Compromise (Note 6) 4,956.2 Stockholders' Deficit: Preferred Stock 11.3 Preference Stock 2.0 Common Stock 135.9 Common Stock held in treasury at cost (65.9) Additional paid-in capital 1,909.7 Accumulated other comprehensive loss (833.0) Accumulated deficit (3,105.5) ------------------ Total Stockholders' Deficit (1,949.5) ------------------ Total Liabilities and Stockholders' Deficit $ 4,260.8 ==================
The accompanying Notes are an integral part of the Consolidated Financial Statements. See Note 8 for Consolidated Balance Sheet of the Debtors Only. Bethlehem Steel Corporation Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)
September 30, 2002 ------------------------------------------ Month Nine Months Ended Ended (unaudited) (unaudited) ------------------- ------------------ Operating Activities: Net loss $ (13.5) $ (270.4) Adjustments for items not affecting cash from operating activities: Depreciation 20.6 187.0 Recognition of deferred gains (1.8) (16.3) Reorganization items 1.5 10.7 Special charges - 22.5 Other - net (2.8) 8.8 Working capital (excluding financing and investing activities): Receivables (1.1) (37.6) Inventories (6.3) (20.3) Accounts payable (10.7) (20.7) Other 3.4 25.2 Funding postretirement benefits: Pension funding less than expense 12.1 103.7 Retiree healthcare and life insurance benefit payments less than expense 4.7 35.9 ------------------- ------------------ Cash Provided By Operating Activities Before Reorganization Items 6.1 28.5 ------------------- ------------------ Reorganization items (1.5) (10.7) ------------------- ------------------ Cash Provided By Operating Activities 4.6 17.8 ------------------- ------------------ Investing Activities: Capital expenditures (2.0) (74.5) Cash proceeds from asset sales 0.4 25.7 ------------------- ------------------ Cash Used For Investing Activities (1.6) (48.8) ------------------- ------------------ Financing Activities: Borrowings (Note 7) 0.1 90.6 Debt and capital lease payments (Note 7) (3.0) (58.2) Other payments (2.0) (19.1) ------------------- ------------------ Cash Provided By (Used For) Financing Activities (4.9) 13.3 ------------------- ------------------ Net Increase (Decrease) in Cash and Cash Equivalents (1.9) (17.7) Cash and Cash Equivalents - Beginning of Period 88.2 104.0 ------------------- ------------------ - End of Period 86.3 86.3 Available Borrowing under Committed Bank Credit Arrangements 148.1 148.1 ------------------- ------------------ Total Liquidity at End of Month $ 234.4 $ 234.4 =================== ================== Supplemental Cash Information (Note 7): Interest and other financing costs, net of amount capitalized $ 3.4 $ 32.4 Income taxes paid (received) - (8.0) Capital lease obligations incurred - 1.9
The accompanying Notes are an integral part of the Consolidated Financial Statements. Bethlehem Steel Corporation Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) NOTES TO SEPTEMBER 30, 2002 CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. These Consolidated Financial Statements are unaudited and should be read together with audited financial statements in Bethlehem's Annual Report on Form 10-K for the year ended December 31, 2001 and other reports filed with the Securities and Exchange Commission during 2002. 2. During August 2002, Bethlehem announced the permanent closing of a facility for producing large diameter pipe in Steelton, Pennsylvania. As a result, we recorded a $2.5 million charge to account for the required employee benefit costs. During the second quarter of 2002, Bethlehem personnel attended a meeting requested by representatives from the New York Department of Environmental Conservation (NYDEC) to discuss the contents and timing of a Consent Order to conduct a RCRA Corrective Measures Study and to begin to implement an agreed upon plan of remediation at our closed steel manufacturing facility in Lackawanna, New York. Based upon the information received and the conceptual agreements reached at that meeting, we recorded a $20 million non-cash charge to reflect Bethlehem's most current estimate of the probable remediation costs at Lackawanna. The cash requirements for remediation are expected to be expended over a protracted period of years, according to a schedule to be agreed upon by Bethlehem and the NYDEC. 3. Net costs resulting from reorganization of the businesses have been reported in the statement of operations separately as reorganization items. For the month and the nine-months ended September 30, 2002, the following have been recorded ($ in millions):
One Nine Month Months -------------------- ---------------------- Professional and other fees $ 1.6 $ 13.3 Gains from termination of contracts - (2.0) Interest income (0.1) (0.6) -------------------- ---------------------- Total $ 1.5 $ 10.7 ==================== ======================
4. Interest at the stated contractual amount on unsecured debt that was not charged to earnings as a result of our chapter 11 filing was approximately $32 million for the nine-months ended September 30, 2002. 5. The income tax benefit recorded in 2002 represents a $10 million tax refund as a result of the "Job Creation and Workers Assistance Act of 2002" that was enacted March 8, 2002. The Act provides us the ability to carry back a portion of our 2001 Alternative Minimum Tax loss for a refund of taxes paid in prior years that was not previously available. We received the refund in July 2002. 6. Liabilities subject to compromise at September 30, 2002 follows ($ in millions): September 30, 2002 -------------------- Other postemployment benefits $ 2,043.4 Pension 1,729.2 Unsecured debt 526.7 Accounts payable 197.9 Accrued employment costs 208.2 Other accrued liabilities 173.6 Accrued taxes and interest 77.2 -------------------- Total $ 4,956.2 ==================== 7. In the second quarter of 2002, we acquired the remaining 50% portion of the Columbus Coatings Company (CCC) and Columbus Processing Company (CPC) joint ventures from LTV Steel Corporation. CCC is an automotive quality, hot-dipped galvanized coating line and CPC is a steel slitting facility, both located in Columbus, Ohio. These interests were acquired on June 5, 2002 for cash, a release of LTV's guarantee of CCC's debt and forgiveness of claims against LTV by Bethlehem and CCC. The acquisition was accounted for as a purchase. CCC's and CPC's results are included in the Consolidated Financial Statements from the date of acquisition. Pro-forma amounts for the year are not significant. The value assigned to assets and liabilities acquired follows ($ in millions): Property, plant & equipment $155.3 Debt and capital lease obligation (105.9) Other - net (.3) ----------- Net assets 49.1 Less: Investment in and receivable from joint ventures and LTV (46.7) ----------- Cash purchase price, net of cash acquired $ 2.4 =========== CCC's construction costs were financed in part with a loan under a 1999 agreement with a group of lenders. Bethlehem has guaranteed the full amount of the construction loan. Bethlehem provided CCC's lenders with a collateralized letter of credit for $30 million and a mortgage on our corporate headquarters building as additional collateral. In July 2002, CCC lenders used the letter of credit to reduce the outstanding loan balance by $30 million. Because of our chapter 11 filing, CCC and Bethlehem are in default under the construction loan agreements which would allows the lenders to call the full amount of the loan. We believe that the market value of CCC exceeds the net loan amount. We are working with the CCC lenders and others to resolve open issues or refinance the net outstanding debt. We believe these matters can be resolved without any additional significant impact on our liquidity. 8. Summarized Consolidated Statement of Operations for the nine-months ended and Balance Sheet as of September 30, 2002 for the Debtors only follows ($ in millions): Summarized Consolidated Statement of Operations Net Sales $ 2,640.1 Costs and Expenses 2,852.8 Special Charges 22.5 ---------------- Loss from Operations (235.2) Reorganization Items (10.7) Financing Expense - Net (37.2) Equity in Income of Unconsolidated Subsidiaries 2.4 ---------------- Loss Before Income Taxes (280.7) Benefit from Income Taxes 10.3 ---------------- Net Loss (270.4) Dividend Requirements on Preferred and Preference Stock 29.6 ---------------- Net Loss Applicable to Common Stock $ (300.0) ================ SUMMARIZED CONSOLIDATED BALANCE SHEET ASSETS Current Assets: Cash and cash equivalents $ 74.2 Receivables - net 370.3 Inventories 735.4 Other current assets 23.0 ---------------- Total Current Assets 1,202.9 Investments and Miscellaneous Assets 172.2 Property, Plant and Equipment - net 2,507.3 Intangible Pension Asset 225.0 ---------------- Total Assets $ 4,107.4 ================ LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 140.2 Accrued employment costs 84.9 Secured debt and capital lease obligations - current 21.8 Other current liabilities 71.2 ---------------- Total Current Liabilities 318.1 Secured Debt and Capital Lease Obligations 123.2 Debtor-in-Possession Financing 280.7 Debt Secured by Inventory 289.9 Deferred Gains and Other Long-Term Liabilities 88.8 Liabilities Subject to Compromise 4,956.2 Total Stockholders' Deficit (1,949.5) ---------------- Total Liabilities and Stockholders' Deficit $ 4,107.4 ================ BETHLEHEM STEEL CORPORATION Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) Monthly Operating Report Schedule of Disbursements
Month Ended Quarter Ended Nine Months Ended (dollars in thousands) September 30, 2002 September 30, 2002 September 30, 2002 ---------------------- ----------------------- ----------------------- Bethlehem Steel Corporation $318,845 $983,037 $2,836,037 Alliance Coatings Company, LLC 0 16,176 23,693 BethEnergy Mines Inc. 342 963 2,232 Bethlehem Cold Rold Corporation 1 12 17 Bethlehem Development Corporation 0 0 0 Bethlehem Rail Corporation 91 109 222 Bethlehem Steel de Mexico, S.A. de C.V. 42 131 476 Bethlehem Steel Export Company of Canada, Limited 0 0 0 Bethlehem Steel Export Corporation 0 0 0 BethPlan Corp. 0 0 0 Chicago Cold Rolling, L.L.C. 450 1,557 4,604 Eagle Nest Inc. 0 0 1 Encoat North Arlington, Inc. 5 61 177 Energy Coatings Company 1 2 6 Greenwood Mining Corporation 0 0 0 HPM Corporation 0 0 1 Kenacre Land Corporation 0 0 0 LI Service Company 110 367 1,072 Marmoraton Mining Company, Ltd. 1 14 53 Mississippi Coatings Limited Corporation 0 0 2,576 Mississippi Coatings Line Corporation 0 0 53 Ohio Steel Service Company, LLC 0 0 0 Primeacre Land Corporation 12 39 114 ---------------------- ----------------------- ----------------------- $319,900 $1,002,468 $2,871,334
Note: Inter-company disbursements are excluded from this schedule. Bethlehem Steel Corporation Case No. 01-15288 (BRL) through 01-15302, 01-15308 through 01-15315 (BRL) Post petition salaries and wages, including employee withholdings and employer related payroll taxes, have been paid in the ordinary course of business. Other post petition taxes, including those for sales and use taxes, property taxes and other taxes have been paid in the ordinary course of business. All insurance policy premiums due, including those for workers compensation and disability insurance have been paid. Accordingly, all such policies remain in force. Details for the above transactions will be provided to U.S. Trustee upon request.