EX-99 3 jd12-20_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 NOVEMBER 1 TO NOVEMBER 30, 2002 DEBTORS' ADDRESS: Bethlehem Steel Corporation 1170 Eighth Avenue Bethlehem, PA 18016 DISBURSEMENTS: November 1 to November 30, 2002 (millions): $293.1 (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: November 1 to November 30, 2002 (millions): $39.2 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, 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)
NOVEMBER 30, 2002 -------------------------------- ELEVEN MONTH MONTHS ENDED ENDED (unaudited) (unaudited) --------------- -------------- NET SALES $ 276.8 $ 3,295.3 --------------- -------------- COSTS AND EXPENSES Cost of sales 278.5 3,228.1 Depreciation 17.6 226.6 Selling, administration and general expense 6.5 80.3 Special charges (Note 2) 8.0 30.5 --------------- -------------- TOTAL COSTS AND EXPENSES 310.6 3,565.5 --------------- -------------- LOSS FROM OPERATIONS (33.8) (270.2) REORGANIZATION ITEMS (Note 3) (0.9) (13.1) FINANCING EXPENSE - NET (Note 4) (4.5) (48.0) --------------- -------------- LOSS BEFORE INCOME TAXES (39.2) (331.3) BENEFIT FROM INCOME TAXES (Note 5) - 10.3 --------------- -------------- NET LOSS (39.2) (321.0) DIVIDEND REQUIREMENTS ON PREFERRED AND PREFERENCE STOCK 3.3 36.2 --------------- -------------- NET LOSS APPLICABLE TO COMMON STOCK $ (42.5) $ (357.2) =============== ============== NET LOSS PER COMMON SHARE: Basic and Diluted $ (0.32) $ (2.73) AVERAGE SHARES OUTSTANDING: Basic and Diluted 131.1 131.0 The accompanying Notes are an integral part of the Consolidated Financial Statements. See Note 9 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) NOVEMBER 30, 2002 (unaudited) ------------------ ASSETS Current Assets: Cash and cash equivalents $ 101.1 Receivables - net 357.0 Inventories: Raw materials 254.1 Finished and semifinished 484.9 ------------------ Total Inventories 739.0 Other current assets 24.1 ------------------ ZOTAL CURRENT ASSETS 1,221.2 INVESTMENTS AND MISCELLANEOUS ASSETS 86.6 PROPERTY, PLANT AND EQUIPMENT - net 2,702.4 INTANGIBLE PENSION ASSET 225.0 ------------------ TOTAL ASSETS $ 4,235.2 ================== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable $ 172.7 Accrued employment costs 104.7 Secured debt and capital lease obligations - current (Notes 7 and 8) 696.1 Other current liabilities 78.2 ------------------ TOTAL CURRENT LIABILITIES 1,051.7 SECURED DEBT AND CAPITAL LEASE OBLIGATIONS 87.4 DEFERRED GAIN AND OTHER LONG-TERM LIABILITIES 125.6 LIABILITIES SUBJECT TO COMPROMISE (Note 6) 4,970.2 STOCKHOLDERS' DEFICIT: Preferred Stock 11.3 Preference Stock 2.0 Common Stock 136.1 Common Stock held in treasury at cost (65.9) Additional paid-in capital 1,909.8 Accumulated other comprehensive loss (833.0) Accumulated deficit (3,160.0) ------------------ TOTAL STOCKHOLDERS' DEFICIT (1,999.7) ------------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 4,235.2 ================== The accompanying Notes are an integral part of the Consolidated Financial Statements. See Note 9 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) NOVEMBER 30, 2002 ---------------------------------------- MONTH ELEVEN MONTHS ENDED ENDED (unaudited) (unaudited) ----------------- ------------------ OPERATING ACTIVITIES: Net loss $ (39.2) $ (321.0) Adjustments for items not affecting cash from operating activities: Depreciation 17.6 226.6 Special charges 8.0 30.5 Recognition of deferred gains (1.8) (19.9) Reorganization items 0.9 13.1 Other - net (1.3) 11.1 Working capital (excluding financing and investing activities): Receivables (2.5) (14.6) Inventories 0.9 (14.4) Accounts payable 12.9 (4.1) Other 2.6 19.0 Funding postretirement benefits: Pension funding less than expense 6.7 122.4 Retiree healthcare and life insurance benefit payments less than expense 5.1 39.7 ----------------- ------------------ CASH PROVIDED BY OPERATING ACTIVITIES BEFORE REORGANIZATION ITEMS 9.9 88.4 ----------------- ------------------ Reorganization items (0.9) (13.1) ----------------- ------------------ CASH PROVIDED BY OPERATING ACTIVITIES 9.0 75.3 ----------------- ------------------ INVESTING ACTIVITIES: Capital expenditures (16.0) (106.3) Cash proceeds from asset sales 0.5 26.5 ----------------- ------------------ CASH USED FOR INVESTING ACTIVITIES (15.5) (79.8) ----------------- ------------------ FINANCING ACTIVITIES: Borrowings (Note 8) - 90.6 Debt and capital lease payments (Note 8) (2.1) (62.3) Other payments (3.0) (26.7) ----------------- ------------------ CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (5.1) 1.6 ----------------- ------------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (11.6) (2.9) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 112.7 104.0 ----------------- ------------------ - END OF PERIOD 101.1 101.1 AVAILABLE BORROWING UNDER COMMITTED BANK CREDIT ARRANGEMENTS 132.3 132.3 ----------------- ------------------ TOTAL LIQUIDITY AT END OF MONTH $ 233.4 $ 233.4 ================= ================== SUPPLEMENTAL CASH INFORMATION (Note 8): Interest and other financing costs, net of amount capitalized $ 2.3 $ 41.6 Income taxes paid (received) - (8.7) 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 NOVEMBER 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 November 2002, Bethlehem announced the elimination of certain salaried positions and recorded an $8 million charge to account for the required employee benefit costs. During August 2002, Bethlehem announced the permanent closing of a facility for producing large diameter pipe in Steelton, Pennsylvania and 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 $20 million non-cash charge to reflect Bethlehem's most current estimate of the probable remediation costs at Lackawanna. The cash requirements for remediation are expected to be expended over a protracted period of years, according to a schedule to be agreed upon by Bethlehem and the NYDEC. 3. Net costs resulting from reorganization of the businesses have been reported in the statement of operations separately as reorganization items. For the month and the eleven-months ended November 30, 2002, the following have been recorded ($ in millions): One Eleven Month Months ------------- ------------- Professional and other fees $ 1.5 $ 16.4 Gains from termination of contracts - (2.0) Interest income (0.6) (1.3) ------------- ------------- Total $ 0.9 $ 13.1 ============= ============= 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 $39 million for the eleven-months ended November 30, 2002. 5. The income tax benefit recorded in 2002 represents a $10 million tax refund as a result of the "Job Creation and Workers Assistance Act of 2002" that was enacted on March 8, 2002. The Act provides us the ability to carry back a portion of our 2001 Alternative Minimum Tax loss for a refund of taxes paid in prior years that was not previously available. We received the refund in July 2002. 6. Liabilities subject to compromise at November 30, 2002 follows ($ in millions): Other postemployment benefits $ 2,049.1 Pension 1,754.3 Unsecured debt 526.7 Accounts payable 195.5 Accrued employment costs 196.9 Other accrued liabilities 171.4 Accrued taxes and interest 76.3 -------------------- Total $ 4,970.2 ==================== 7. Our DIP financing and secured inventory financing arrangement mature on October 15, 2003. Accordingly, the outstanding balances of $280.7 million and $289.9 million, respectively, at November 30, 2002 are classified as a current liability. 8. In the second quarter of 2002, we acquired the remaining 50% portion of the Columbus Coatings Company (CCC) and Columbus Processing Company (CPC) joint ventures from LTV Steel Corporation. CCC is an automotive quality, hot-dipped galvanized coating line and CPC is a steel slitting facility, both located in Columbus, Ohio. These interests were acquired on June 5, 2002 for cash, a release of LTV's guarantee of CCC's debt and forgiveness of claims against LTV by Bethlehem and CCC. The acquisition was accounted for as a purchase. CCC's and CPC's results are included in the Consolidated Financial Statements from the date of acquisition. Pro-forma amounts for the year are not significant. The value assigned to assets and liabilities acquired follows ($ 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. In October, we filed a motion with the Bankruptcy Court requesting approval to refinance with General Electric Capital Corporation the approximate $70 million outstanding construction loan balance. A hearing was held on December 5, 2002 and the motion was approved. Closing on the loan is expected to occur during December, 2002. The new financing arrangement matures on October 15, 2003 or with the expiration of Bethlehem's DIP financing and is collateralized by a first lien and first mortgage on all of CCC and CPC's assets and a second lien on our office building in Bethlehem, Pennsylvania. Interest accrues based on either a LIBOR or Prime Rate index and is payable monthly in arrears. 9. Summarized Consolidated Statement of Operations for the ten-months ended and Balance Sheet as of November 30, 2002 for the Debtors only follows ($ in millions): SUMMARIZED CONSOLIDATED STATEMENT OF OPERATIONS Net Sales $ 3,245.6 Costs and Expenses 3,479.5 Special Charges 30.5 ---------------- Loss from Operations (264.4) Reorganization Items (13.1) Financing Expense - Net (51.1) Equity in Loss of Unconsolidated Subsidiaries (2.7) ---------------- Loss Before Income Taxes (331.3) Benefit from Income Taxes 10.3 ---------------- Net Loss (321.0) Dividend Requirements on Preferred and Preference Stock 36.2 ---------------- Net Loss Applicable to Common Stock $ (357.2) ================ SUMMARIZED CONSOLIDATED BALANCE SHEET ASSETS Current Assets: Cash and cash equivalents $ 89.6 Receivables - net 345.1 Inventories 727.4 Other current assets 22.6 --------------- Total Current Assets 1,184.7 Investments and Miscellaneous Assets 179.6 Property, Plant and Equipment - net 2,496.8 Intangible Pension Asset 225.0 --------------- Total Assets $ 4,086.1 =============== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 161.4 Accrued employment costs 93.0 Secured debt and capital lease obligations- current (Notes 7 & 8) 626.5 Other current liabilities 62.1 --------------- Total Current Liabilities 943.0 Secured Debt and Capital Lease Obligations 87.4 Deferred Gains and Other Long-Term Liabilities 85.3 Liabilities Subject to Compromise 4,970.2 Total Stockholders' Deficit (1,999.8) --------------- Total Liabilities and Stockholders' Deficit $ 4,086.1 =============== 10. On December 16, 2002 the Pension Benefit Guarantee Corporation (PBGC) determined there was sufficient cause under applicable laws to terminate the Pension Plan of Bethlehem Steel Corporation and Subsidiary Companies (the Plan). The PBGC is proceeding to have the Plan terminated, to have the PBGC appointed as the Plan's trustee and to have December 18, 2002 established as the Plan's termination date. Bethlehem is considering all of our options, including requesting that the PBGC defer the termination date of the Plan. The results of such discussions are uncertain at this date. 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 Eleven Months Ended (dollars in thousands) November 30, 2002 November 30, 2002 ------------------------ ------------------------ Bethlehem Steel Corporation $289,193 $3,461,824 Alliance Coatings Company, LLC 0 23,693 BethEnergy Mines Inc. 448 2,809 Bethlehem Cold Rold Corporation 0 17 Bethlehem Development Corporation 0 0 Bethlehem Rail Corporation 4 235 Bethlehem Steel de Mexico, S.A. de C.V. 45 572 Bethlehem Steel Export Company of Canada, Limited 0 0 Bethlehem Steel Export Corporation 0 0 BethPlan Corp. 0 0 Chicago Cold Rolling, L.L.C. 655 5,957 Eagle Nest Inc. 0 1 Encoat North Arlington, Inc. (2) 204 Energy Coatings Company 2 20 Greenwood Mining Corporation 0 0 HPM Corporation 0 1 Kenacre Land Corporation 1 1 LI Service Company 107 1,290 Marmoraton Mining Company, Ltd. 2 65 Mississippi Coatings Limited Corporation 2,568 5,144 Mississippi Coatings Line Corporation 52 105 Ohio Steel Service Company, LLC 0 0 Primeacre Land Corporation 11 147 ------------------------ ------------------------ $293,086 $3,502,085 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.