EX-99.1 3 dex991.txt COMBINED MONTHLY OPERATING REPORT Exhibit 99.1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CASE NAME: NATIONAL STEEL CORPORATION, ET AL. CASE NO: 02-08697 THROUGH 02-08738 DECLARATION UNDER PENALTY OF PERJURY I, Kirk A. Sobecki, acting as the duly authorized agent for the Debtor in Possession declare under penalty of perjury under the laws of the United States that I have read and I certify that the figures, statements, disbursement itemizations, and account balances as listed in this Monthly Report of the Debtor are true and correct as of the date of this report to the best of my knowledge, information and belief. /s/ Kirk A. Sobecki ------------------------------------------------ For the Debtor In Possession Kirk A. Sobecki Senior Vice President and Chief Financial Officer DATED: February 13, 2003 3 Exhibit 99.1 U.S. TRUSTEE MONTHLY OPERATING REPORT December 1, 2002 to December 31, 2002 I. National Steel Corporation Unaudited Combined Financial Statements A. Combined Statement of Operations for month ended December 31, 2002 B. Combined Balance Sheet as of December 31, 2002 C. Combined Statement of Cash Flows for the month ended December 31, 2002 D. Notes to the Unaudited Combined Financial Statements II. Schedule of Disbursements 4 Exhibit 99.1 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 COMBINED STATEMENT OF OPERATIONS (In Millions of Dollars) (Unaudited) Month Ended December 31, 2002 --------------- Net Sales $ 200.0 Cost of products sold 215.5 Selling, general and administrative expense 4.4 Depreciation 12.7 Equity income of affiliates (0.1) Unusual item (6.9) --------------- Loss from Operations before Reorganization Items (25.6) Reorganization items 28.5 Financing costs 0.9 --------------- Loss before Income Taxes (55.0) Income tax expense (5.5) --------------- Net Loss $ (49.5) =============== See notes to the combined financial statements 5 Exhibit 99.1 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 COMBINED BALANCE SHEET (In Millions of Dollars) (Unaudited) December 31, 2002 ---------------- ASSETS Current assets Cash and cash equivalents $ 1.0 Receivables--net 222.1 Inventories--net 405.5 Deferred tax assets 4.7 Other 41.2 ---------------- Total current assets 674.5 Investments in affiliated companies 13.7 Property, plant and equipment, net 1,251.8 Deferred tax assets 43.3 Intangible pension asset 108.8 Other assets 109.8 ---------------- $2,201.9 ================ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 131.1 Salaries, wages, benefits and related taxes 89.2 Property taxes 24.2 Other accrued liabilities 56.0 ---------------- Total current liabilities 300.5 Debtor-in-possession financing 128.5 Other long-term liabilities (1.3) Liabilities subject to compromise 2,646.4 Stockholders' deficit Common Stock - par value $.01: Class A - authorized 30,000,000 shares, issued and outstanding 22,100,000 0.2 Class B - authorized 65,000,000 shares; issued 21,188,240; outstanding 19,188,240 0.2 Additional paid-in-capital 491.8 Retained deficit (524.1) Treasury stock, at cost: 2,000,000 shares (16.3) Accumulated other comprehensive loss: Unrealized loss on derivative instruments -- Minimum pension liability (824.0) ---------------- Total stockholders' deficit (872.2) ---------------- $2,201.9 ================ See notes to the combined financial statements 6 Exhibit 99.1 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 COMBINED STATEMENT OF CASH FLOWS (In Millions of Dollars) (Unaudited) Month Ended December 31, 2002 ---------------- Cash Flows from Operating Activities Net loss $ (49.5) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 12.7 Reorganization items 28.5 Unusual item (6.9) Deferred income taxes (0.3) Changes in assets and liabilities: Receivables--trade 20.5 Inventories (23.6) Accounts payable (17.2) Pension liability 2.7 Postretirement benefits 2.4 Accrued liabilities (12.1) Other (0.6) ---------------- Net Cash Provided by Operating Activities Before Reorganization Items (43.4) Reorganization items (excluding non-cash charges) (2.3) ---------------- Net Cash Provided by Operating Activities (45.7) Cash Flows from Investing Activities Purchases of property and equipment (9.8) Net proceeds from settlement 0.2 ---------------- Net Cash Used in Investing Activities (9.6) Cash Flows from Financing Activities Borrowings--net 56.9 Debt repayments (2.4) ---------------- Net Cash Used in Financing Activities 54.5 ---------------- Net Decrease in Cash and Cash Equivalents (0.8) Cash and cash equivalents at the beginning of the period 1.8 ---------------- Cash and cash equivalents at the end of the period $ 1.0 ================ See notes to the combined financial statements 7 Exhibit 99.1 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 NOTES TO THE COMBINED FINANCIAL STATEMENTS NOTE 1 -- BASIS OF PRESENTATION The accompanying combined financial statements presented herein have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business and do not reflect adjustments that might result if the Debtors are unable to continue as a going concern. As a result of National Steel Corporation (the "Company") and forty-one of its domestic subsidiaries (collectively the "Debtors") filing for relief under Chapter 11 of Title 11 of the United States Code, however, such matters are subject to significant uncertainty. The Debtor's financial statements presented herein, have been prepared in conformity with the AICPA's Statement of Position No. 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code, issued November 19, 1990 ("SOP 90-7"). SOP 90-7 requires a segregation of liabilities subject to compromise by the Court as of the filing date and identification of all transactions and events that are directly associated with the reorganization of the Company. Certain majority owned subsidiaries of the Company have been excluded from the financial results, as they were not included in the Chapter 11 filings. Total assets for these entities were $6.8 million as of December 31, 2002 and the net loss was $0.6 million for the month ended December 31, 2002. Preparation of the combined financial statements for the month ended December 31, 2002 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the applicable periods. Actual results could differ from those estimates. The financial results presented for the month ended December 31, 2002 are not necessarily indicative of results of operations for the full year. The Quarterly Report of NSC on Form 10-Q for the quarter ended September 30, 2002 and the Annual Report of NSC on Form 10-K for the year ended December 31, 2001 contains additional information and should be read in conjunction with this report. NOTE 2 -- REORGANIZATION ITEMS Reorganization items are comprised of items of income, expense and loss that were realized or incurred by the Company as a result of its decision to reorganize under Chapter 11 of the Bankruptcy Code. The following summarizes the reorganization charges provided by the Company: Month Ended December 31, 2002 --------------- Professional and other fees $ 2.7 Provision for potential additional costs on long-term agreements 26.1 Vendor settlement (0.4) Other 0.1 --------------- $ 28.5 =============== 8 Exhibit 99.1 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 NOTES TO THE COMBINED FINANCIAL STATEMENTS NOTE 3 -- INTEREST EXPENSE Interest at the stated contractual amount on unsecured and undersecured debt that was not charged to earnings for the month ended December 31, 2002 was approximately $4.1 million. NOTE 4 -- LIABILITIES SUBJECT TO COMPROMISE The principal categories of claims classified as liabilities subject to compromise under reorganization proceedings are identified below. All amounts below may be subject to future adjustment depending on Court action, further developments with respect to disputed claims, or other events. Additional claims may arise resulting from rejection of additional executory contracts or unexpired leases by the Company. Under an approved final plan of reorganization, these claims may be settled at amounts substantially less than their allowed amounts. Recorded liabilities subject to compromise under the Chapter 11 proceedings consisted of the following: December 31, 2002 --------------- Accounts payable $ 154.3 Short-term borrowings 100.0 Salaries, wages, benefits and related taxes 112.0 Pension liabilities 223.8 Minimum pension liabilities 932.8 Property taxes 46.3 Income taxes 1.8 Other accrued liabilities 65.1 Long-term obligations 511.6 Postretirement benefits other than pensions 403.8 Other long-term liabilities 94.9 --------------- $ 2,646.4 =============== Pursuant to the terms of the Company's Secured Super Priority Debtor in Possession Credit Agreement ("DIP Facility"), as approved by the Court, all cash received by the Company was first applied to outstanding claims under the previously existing Credit Agreement and after all such claims have been paid, to outstanding obligations under the DIP Facility. During April, all outstanding claims under the previously existing Credit Agreement were paid. All outstanding borrowings under the DIP Facility are shown under the caption "Debtor-in-possession financing" on the Combined Balance Sheet. 9 Exhibit 99.1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CASE NAME: National Steel Corporation, et al. CASE NOs: 02-08697 through 02-08738 ---------------------------------- -------------------------
SCHEDULE OF DISBURSEMENTS Month Ended December 31, Case No. 2002 ------------ ------------------ 02-08699 National Steel Corporation (Delaware) $ 258,544,291 02-08697 Granite City Steel Company 0 02-08698 National Materials Procurement Corporation 0 02-08738 National Steel Corporation (New York) 0 02-08700 American Steel Corporation 0 02-08704 D.W. Pipeline Corporation 0 02-08707 Granite Intake Corporation 0 02-08713 Great Lakes Steel Corporation 0 02-08715 The Hanna Furnace Corporation 0 02-08719 Hanna Ore Mining Corporation 0 02-08723 Ingleside Channel & Dock Co. 0 02-08728 Ingleside Holdings L.P. 0 02-08731 Ingleside Point Corporation 0 02-08737 Liberty Pipe and Tube, Inc. 0 02-08701 Mid-Coast Minerals Corporation 0 02-08705 Midwest Steel Corporation 0 02-08710 NS Holdings Corporation 1,593 02-08714 NS Land Company 0 02-08717 NS Technologies, Inc. 0 02-08721 NSC Realty Corporation 0 02-08726 NSL, Inc. 2,148,516 02-08729 Natcoal, Inc. 0 02-08732 National Acquisition Corporation 0 02-08735 National Caster Acquisition Corporation 0 02-08736 National Caster Operating Corporation 0 02-08702 National Casting Corporation 0 02-08706 National Coal Mining Company 0 02-08709 National Coating Limited Corporation 0 02-08711 National Coating Line Corporation 0 02-08716 National Mines Corporation 0 02-08720 National Ontario Corporation 0 02-08724 National Ontario II, Limited 0 02-08725 National Pickle Line Corporation 0 02-08733 National Steel Funding Corporation 0 02-08703 National Steel Pellet Company 4,972,764 02-08708 Natland Corporation 0 02-08712 Peter White Coal Mining Corp. 0 02-08718 ProCoil Corporation 1,445,968 02-08722 Puritan Mining Company 0 02-08727 Rostraver Corporation 0 02-08730 Skar-Ore Steamship Corporation 0 02-08734 The Teal Lake Iron Mining Company 0 ------------------ $ 267,113,132 ================== 10