<PAGE>
FORM 10-Q
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 September 30, 1993.
Commission file number 1-1941
BETHLEHEM STEEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State of incorporation)
24-0526133
(I.R.S. Employer Identification No.)
1170 Eighth Avenue
BETHLEHEM, PENNSYLVANIA
(Address of principal executive offices)
18016-7699
(Zip Code)
Registrant's telephone number, including area code: (215) 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 October 29, 1993:
91,306,572<PAGE>
BETHLEHEM STEEL CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
Page No.
PART I. Financial Information
Consolidated Statements of Income-
Nine Months Ended September 30, 1993
and 1992 (unaudited). . . . . . . . . . . . . . . 2
Consolidated Balance Sheets-
September 30, 1993 (unaudited), December 31, 1992
and September 30, 1992 (unaudited). . . . . . . . 3
Consolidated Statements of Cash Flows-
Nine Months Ended September 30, 1993 and
1992 (unaudited). . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . 5
Management's Discussion and Analysis of Results of
Operations and Financial Condition. . . . . . . . 7
PART II. Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . 15
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Bethlehem Steel Corporation
CONSOLIDATED STATEMENTS OF INCOME
(dollars and shares in millions, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1993 1992 1993 1992
$1,055.3 $1,007.8 Net Sales $3,193.1 $3,017.5
Costs and Expenses:
926.4 960.9 Cost of sales 2,873.9 2,839.3
69.1 66.9 Depreciation 206.3 197.5
Selling and general
38.4 38.2 administration expense 116.7 116.9
1,033.9 1,066.0 Total Costs and Expenses 3,196.9 3,153.7
21.4 (58.2) Income (Loss) from Operations (3.8) (136.2)
Financing Income (Expense):
(15.8) (13.1) Interest and other financing costs (48.0) (43.5)
1.6 1.1 Interest and other income 5.1 3.5
Income (Loss) before Income
Taxes and Cumulative Effect of
7.2 (70.2) Changes in Accounting Principles (46.7) (176.2)
24.0 12.0 Benefit for Income Taxes (Note 2) 31.3 30.0
Income (Loss) before Cumulative
Effect of Changes in
31.2 (58.2) Accounting Principles (15.4) (146.2)
Cumulative Effect of Changes
- - in Accounting Principles (Note 1) - (250.0)
31.2 (58.2) Net Income (Loss) (15.4) (396.2)
Dividend Requirements for Preferred
10.6 5.8 and Preference Stock 29.0 18.1
Net Income (Loss) Applicable to
$ 20.6 $ (64.0) Common Stock $ (44.4) $ (414.3)
Per Common Share Amounts:
Income (Loss) before Cumulative
Effect of Changes in
$ 0.23 $ (0.76) Accounting Principles $ (0.49) $ (2.08)
$ 0.23 $ (0.76) Net Income (Loss) $ (0.49) $ (5.24)
91.1 84.3 Average primary shares outstanding 90.8 79.1
The accompanying Notes are an integral part of the
Consolidated Financial Statements.
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Bethlehem Steel Corporation
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
ASSETS
September 30 December 31 September 30
1993 1992 1992
(unaudited) (unaudited)
Current Assets:
Cash and cash equivalents $ 232.5 $ 208.2 $ 126.8
Receivables, less allowances 475.1 403.3 472.5
Inventories:
Raw materials 136.6 149.7 153.7
Finished and semifinished 211.4 171.1 154.1
Contract work-in-progress, less
billings 14.2 23.6 16.1
362.2 344.4 323.9
Other current assets 5.1 5.5 8.5
Total Current Assets 1,074.9 961.4 931.7
Investments and Miscellaneous Assets 135.3 150.2 151.9
Property, Plant and Equipment, less
accumulated depreciation of $4,362.9,
$4,255.1 and $4,265.1 2,824.1 2,804.5 2,876.0
Deferred Income Tax Asset -
net (Notes 1 and 2) 947.8 915.0 905.0
Intangible Asset - Pensions (Note 3) 186.0 239.6 252.7
Total Assets $ 5,168.1 $ 5,070.7 $ 5,117.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 382.8 $ 375.7 $ 388.7
Accrued employment costs (Note 1) 256.5 254.8 262.9
Accrued taxes 59.1 67.5 72.5
Debt and capital lease obligations 100.3 69.2 75.5
Other current liabilities 109.7 126.0 144.4
Total Current Liabilities 908.4 893.2 944.0
Pension Liability (Note 3) 1,086.8 1,188.7 1,165.9
Postretirement Benefits Other Than
Pensions (Note 1) 1,433.4 1,417.9 1,422.4
Long-term Debt and Capital Lease
Obligations 728.5 726.8 756.7
Other Long-term Liabilities 415.7 465.0 390.6
Stockholders' Equity:
Preferred Stock 11.6 6.5 6.5
Preference Stock 2.9 2.9 2.9
Common Stock 93.2 92.5 92.5
Common Stock held in treasury at cost (59.7) (59.7) (59.6)
Additional paid-in capital 1,646.6 1,420.8 1,426.3
Retained deficit (1,099.3) (1,083.9) (1,030.9)
Total Stockholders' Equity 595.3 379.1 437.7
Total Liabilities and Stockholders' Equity $ 5,168.1 $ 5,070.7 $ 5,117.3
The accompanying Notes are an integral part of the
Consolidated Financial Statements.
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Bethlehem Steel Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(unaudited)
Nine Months Ended
September 30
1993 1992
Operating Activities:
Net loss $ (15.4) $ (396.2)
Adjustments for items not affecting cash
from operating activities:
Depreciation 206.3 197.5
Cumulative Effect of Accounting Changes - 250.0
Deferred Income Taxes (32.8) (30.0)
Other - net 4.2 4.8
Working capital (excluding financing and
investing activities):
Receivables (71.8) (70.3)
Inventories (17.8) 128.5
Accounts payable 19.2 (56.8)
Employment costs and other (28.3) (9.8)
Other - net 9.3 1.4
Cash Provided from Operating Activities 72.9 19.1
Investing Activities:
Capital expenditures (240.2) (262.8)
Cash proceeds from sale of businesses
and assets 12.3 63.4
Other - net (2.3) 13.9
Cash Used for Investing Activities (230.2) (185.5)
Financing Activities:
Pension financing (funding) - net (52.1) 116.1
Revolving and other credit borrowings
(payments) - net (80.0) (54.0)
Long-term debt and capital lease proceeds 166.2 84.6
Long-term debt and capital lease payments (54.0) (69.7)
Restructured facilities payments (20.9) (21.9)
Preferred Stock Issued 248.4 -
Common Stock Issued 0.1 171.3
Cash dividends paid (26.1) (17.0)
Cash Provided from Financing Activities 181.6 209.4
Net Increase in Cash and Cash Equivalents 24.3 43.0
Cash and Cash Equivalent- Beginning of Period 208.2 83.8
- End of Period $ 232.5 $ 126.8
Supplemental Cash Payment Information:
Interest, net of amount capitalized $ 44.3 $ 46.3
Income taxes $ 6.0 $ 1.2
The accompanying Notes are an integral part of the
Consolidated Financial Statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. During 1992, we adopted two new Financial Accounting Standards Board
Statements, No. 106, Accounting for Postretirement Benefits Other Than Pensions
and No. 109, Accounting for Income Taxes. The first three quarters of 1992
have been restated to reflect these changes in accounting principles, and the
first quarter of 1992 includes a $250 million net charge for the cumulative
effect of changes in accounting principles.
Statement No. 106 requires postretirement benefits other than pensions,
principally healthcare and life insurance, to be accrued as an expense over
the period active employees become eligible for the benefits. Previously,
such retiree benefits were generally expensed as claims were incurred.
Effective January 1, 1992, we recorded a $745 million charge, net of a $380
million deferred income tax benefit, for the cumulative effect of a change
in an accounting principle under Statement No. 106. The effect of this
accounting change was not material to our third quarter 1992 loss before
the cumulative effect of changes in accounting principles.
Statement No. 109 requires financial statements to reflect deferred taxes
for the future tax consequences of events recognized in different years for
financial reporting and tax reporting purposes. Effective January 1, 1992,
we recorded a $495 million net deferred income tax asset as the cumulative
effect of a change in an accounting principle. This accounting change reduced
our third quarter 1992 loss before the cumulative effect of changes in
accounting principles by $12 million.
2. On August 10, 1993, President Clinton signed into law the Omnibus Budget
Reconciliation Act of 1993. The Act increases the federal corporate income tax
rate to 35% from 34%. In 1992, Bethlehem recorded a deferred income tax asset
for the future benefit of its net operating loss carryforwards and other
temporary differences, net of a valuation allowance, under Statement No. 109,
Accounting for Income Taxes. This increase in the tax rate resulted in an
increase in our deferred income tax asset of $25 million, net of a valuation
allowance, which we recorded in the third quarter of 1993.
3. The recently negotiated labor contract with the USWA provides that
certain COLA payments which employees have been receiving for a number of
years will be included in the calculation of pension benefits. As a result,
Bethlehem's pension liability will increase from about $1.1 billion to about
$1.2 billion. In addition, since December 31, 1992, long-term interest rates
have declined. If interest rates at December 31, 1993 are at lower levels than
at December 31, 1992, Bethlehem will have to reduce the discount rate applied
to its pension obligations which would result in an increase in the pension
liability on Bethlehem's balance sheet. For each 25 basis point reduction in
such discount rate the pension liability would increase by approximately $100
million. Any increases in the liability will also increase Bethlehem's related
intangible asset and may result in a direct charge to stockholders' equity.
However, it will have no immediate effect on cash flow. The amount of such
increase and any charge to stockholders' equity will be based on the final 1993
year-end actuarial valuation, interest rates and asset values.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
4. Segment Results (dollars in millions):
(unaudited)
1993 1992
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
Net Sales:
Basic Steel Operations $ 1,029.3 $ 1,077.3 $ 1,000.4 $ 914.7 $ 948.2
Steel Related Operations 29.8 43.3 24.8 79.3 65.1
Eliminations (3.8) (3.2) (4.8) (3.6) (5.5)
Total $ 1,055.3 $ 1,117.4 $ 1,020.4 $ 990.4 $ 1,007.8
Operating Income (Loss):
Basic Steel Operations $ 30.0 $ 11.4 $ (28.8) $ (79.0) $ (55.3)
Steel Related Operations (8.6) (3.7) (4.1) 28.2 (2.9)
Total $ 21.4 $ 7.7 $ (32.9) $ (50.8) $ (58.2)
Shipments
(thousands of net tons):
Basic Steel Operations 2,160 2,290 2,219 2,060 2,101
Raw Steel Production
(thousands of net tons):
Basic Steel Operations 2,629 2,511 2,447 2,565 2,446
5. The Consolidated Financial Statements as of and for the three month and
nine month periods ended September 30, 1993 and 1992 have not been audited.
However, the information reflects all adjustments which, in the opinion of
management, are necessary to present fairly the results shown for the periods
indicated. Management believes all adjustments were of a normal recurring
nature.
6. These Consolidated Financial Statements should be read together with the
1992 audited financial statements set forth in Bethlehem's Annual Report on Form
10-K filed with the Securities and Exchange Commission.
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MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Review of Results:
Third Quarter and First Nine Months of 1993 -
Third Quarter and First Nine Months of 1992
Bethlehem reported net income of $31 million for the third quarter of
1993 and a net loss of $15 million for the first nine months of 1993 compared
to net losses of $58 million and $396 million for the third quarter and first
nine months of 1992. Bethlehem's net income for the third quarter of 1993
includes a one-time tax benefit of $25 million resulting from new tax
legislation (See Note 2 to the Consolidated Financial Statements) which
offsets approximately $20 million in one-time unusual costs incurred in
connection with recently completed labor negotiations. The improvement in
Bethlehem's results for the third quarter of 1993 compared to the year earlier
period was principally due to reduced operating costs, improved product mix at
the Burns Harbor and Sparrows Point Divisions and higher realized prices.
Bethlehem's net loss for the first nine months of 1992 included a $250
million charge for the cumulative effect of changes in accounting principles
and a $25 million litigation charge. Excluding the effects of these charges,
the improvement in Bethlehem's results for the first nine months of 1993
compared to the year earlier period was principally due to reduced operating
costs, higher volume, and an improved product mix at the Burns Harbor and
Sparrows Point Divisions.
Segment Results
Basic Steel Operations. The Basic Steel Operations segment had income
from operations of $30 million for the third quarter of 1993, compared to a
loss from operations of $55 million for the third quarter of 1992. Operating
income would have been higher in the third quarter of 1993 if it had not been
for approximately $20 million in unusual costs arising from the phase-down of
operations in connection with recently concluded labor negotiations at the
Burns Harbor and Sparrows Point Divisions and a five week strike at an
affiliated iron ore operation.
The Basic Steel Operations segment reported income from operations of $13
million for the first nine months of 1993 compared to a loss from operations
of $119 million for the year earlier period. The loss from operations for the
first nine months of 1992 includes the previously mentioned litigation charge.
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Lower operating costs, increased volume, and an improved product mix at
the Burns Harbor and Sparrows Point Divisions were the primary reasons for the
improved results for the first nine months of 1993 over the same period in
1992. Product mix was better primarily because of the successful operation of
the new hot-dip galvanizing lines at these Divisions which started up in
December 1992. Operating results in 1993 have also benefited from Sparrows
Point's modernized hot strip mill.
While steel prices for some products have improved during 1993 and, on
average, were higher in the third quarter of 1993 than in the third quarter of
1992, average realized steel prices for the first nine months of 1993 remained
below the levels realized for the first nine months of 1992.
A new six year labor agreement was reached with the United Steelworkers
of America ("USWA") in early August covering employees at the Burns Harbor and
Sparrows Point Divisions. The agreement provides for opportunities to reduce
costs and for flexible work practices and opportunities to improve
productivity in exchange for improved employment security. Employees will
receive certain improvements to their pension benefits, a signing bonus and
certain other bonuses, a $.50 per hour wage increase in August 1995 and profit
sharing. The contract provides for a reopening of certain economic provisions
after three years. A new six year labor agreement was also reached during the
third quarter with USWA-represented employees at an affiliated iron ore
operation following a five week strike.
A weak market for structural products, competitive pressures and
operating problems have adversely affected results at Bethlehem Structural
Products. Structural Products is continuing with its cost reduction plan and
work is beginning on its recently announced modernization program which, when
implemented, should improve this Division's performance.
At Pennsylvania Steel Technologies, significant progress is being made on
the modernization program which is scheduled for completion during the second
half of 1994 and which should make PST the leading low-cost domestic producer
of quality rails and specialty bloom products.
Steel Related Operations. The Steel Related Operations segment had
losses from operations of $9 million and $16 million for the third quarter and
first nine months of 1993 as the markets for these operations remain very
depressed. In addition, the BethShip Division incurred unusual costs in
connection with a new labor agreement which was reached after a two week
strike. This segment had losses from operations of $3 million and $17 million
for the third quarter and first nine months of 1992.
The BethShip Division completed work on a tunnel fabrication contract
during the third quarter of 1993 and has received a contract to renovate two
vessels for the United States Ready Reserve fleet.
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BethForge, Inc. has announced the installation of an ingot teeming
facility and vacuum degassing unit at Pennsylvania Steel Technologies to take
advantage of the new D.C. electric furnace and ladle refining furnace being
installed as part of that business's modernization program. This new
facility, with its lower cost, higher quality ingots, will replace BethForge's
existing steelmaking facility during 1995.
Liquidity
Cash and cash equivalents were $233 million at September 30, 1993
compared to $208 million at December 31, 1992 and $127 million at September
30, 1992. Cash provided by operating activities was $73 million during the
first nine months of 1993 compared to $19 million during the first nine months
of 1992.
Principal uses of cash during the first nine months of 1993 include
capital expenditures, pension funding and an increase in working capital.
Inventories were built during the third quarter in connection with recently
concluded labor negotiations at the Burns Harbor and Sparrows Point Divisions
and the upcoming blast furnace reline at Burns Harbor.
During the third quarter, Bethlehem contributed $25 million to its
pension fund for a total of $200 million for the first nine months of 1993.
In August 1993, Bethlehem completed an offering of $105 million of
10-3/8% Senior Notes due 2003. The proceeds are being used to finance the
construction of a coal injection facility at the Burns Harbor Division which
will make this Division even more competitive by lowering its operating costs
through elimination of the consumption of natural gas and reduction in the use
of coke in the blast furnaces.
At September 30, 1993, no amounts were outstanding under Bethlehem's 1992
revolving credit agreement and $106 million was used for letters of credit,
leaving $294 million available for borrowing under such agreement.
Bethlehem's accounts receivable and inventories are pledged as collateral
under the 1992 agreement. The 1992 agreement contains a restrictive covenant
that requires Bethlehem to maintain a minimum adjusted tangible net worth.
Bethlehem's adjusted tangible net worth exceeded this requirement by
approximately $546 million at September 30, 1993.
During the first six months of 1993, Bethlehem borrowed the remaining $49
million available under its $270 million loan agreement to fund construction
of the two new hot- dip galvanizing lines at the Sparrows Point and Burns
Harbor Divisions. Borrowings are collateralized by the galvanizing lines.
Borrowings of $120 million bear interest at 5.99 percent per annum and the
balance of borrowings bear interest based on the London Interbank Offered
Rate. Repayment of this loan began during the third quarter of 1993
and is being amortized ratably in equal semiannual installments over a seven
year period.
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Debt and capital lease obligations totaling $134 million were repaid
during the first nine months of 1993, including repayments under the 1992
credit agreement. In addition to capital expenditures and contributions to
the pension fund, major uses of funds during the remainder of 1993 include the
repayment of approximately $18 million of additional debt and capital lease
obligations. Bethlehem expects to maintain an adequate level of liquidity
through cash flow from operations, availability of borrowings under its 1992
revolving credit agreement, asset sales and potential debt and equity
financings. In addition, because Bethlehem has made contributions to its
pension fund in excess of requirements under the Employee Retirement Income
Security Act of 1974, it could defer all pension funding for at least two
years, although it presently has no plans to do so.
Capital Expenditures
Capital expenditures were $240 million during the first nine months of
1993 compared to $263 million during the year earlier period. Bethlehem
currently estimate that capital expenditures will be about $350 million in
1993 compared to $329 million in 1992. Capital expenditures for 1993 include
about $55 million for the coal injection facility at Burns Harbor.
Capital expenditures are expected to increase in 1994 and will include
the following projects: rebuild of a coke oven battery, reline of a blast
furnace and construction of the coal injection facility at Burns Harbor;
completion of the modernization program for Pennsylvania Steel Technologies;
and expenditures for the modernization project at Bethlehem Structural
Products Corporation.
Dividends
On October 27, 1993, the 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 December 10, 1993 to holders of record on November 10, 1993. No
dividend was declared on Bethlehem's Common Stock.
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Substantial Employee Postretirement Obligations
The recently negotiated labor contract with the USWA provides that
certain cost of living adjustment payments which employees have been receiving
for a number of years will be included in the calculation of pension benefits.
As a result Bethlehem's pension liability will increase from about $1.1
billion to about $1.2 billion. In addition, since December 31, 1992,
long-term interest rates have declined. If interest rates at December 31,
1993 are at lower levels than at December 31, 1992, Bethlehem will have
to reduce the discount rate applied to its pension obligations which would
result in an increase in the pension liability on Bethlehem's balance sheet.
For each 25 basis point reduction in such discount rate the pension liability
would increase by approximately $100 million. Any increases in the liability
will also increase Bethlehem's related intangible asset and may result in a
direct charge to stockholders' equity. However, it will have no immediate
effect on cash flow. The amount of such increase and any charge to
stockholders' equity will be based on the final 1993 year-end actuarial
valuation, interest rates and asset values.
Legislation has been introduced into Congress which could potentially
increase Bethlehem's required annual contributions to its pension plans. The
prospects for passage of such legislation and the specific impact on Bethlehem
are uncertain.
Trade Matters
The recent round of unfair trade cases resulted in significant but only
partial relief for United States steelmakers. Bethlehem and five other
leading domestic steel producers have filed appeals in 42 countervailing and
antidumping duty cases, primarily involving hot and cold-rolled steel
products, in which the United States International Trade Commission ("ITC")
issued negative injury determinations in July. Bethlehem believes those
negative determinations are contrary to the facts and the law. Bethlehem is
also vigorously defending appeals brought by foreign producers in the 30
cases, primarily involving corrosion resistant sheet and plate products, where
the ITC found that unfairly traded imports had caused injury to United States
producers. In addition, Bethlehem is asking the government to take
appropriate actions with respect to dumped and subsidized foreign steel.
Bethlehem continues to work with the Clinton Administration and Congress
to ensure that United States trade laws are not impaired. Bethlehem supports
a successful completion to the Uruguay Round including correction of the
defects in the Dunkel draft and a comprehensive, effective and enforceable
Multilateral Steel Agreement that does not limit the ability of domestic
industries to utilize the trade laws to counter the effects of unfair trade.
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Outlook
Bethlehem continues to see encouraging signs of a moderate recovery in
both the general economy and most of its markets. Orders for light flat
rolled products remain at moderately strong levels. Bethlehem does not
believe that there will be a disruptive surge of steel imports as a result of
the recent ITC ruling. The economies of Europe and Japan should gradually
emerge from recession to join other expanding economies and produce stronger
global steel demand in 1994. The near-term United States business outlook is
for slow growth, low inflation and continued competitive pressures yielding
only a slight rise in domestic industry shipments from 86 million tons this
year to 87 million tons in 1994.
Bethlehem will continue to focus on its customers' needs, reduce costs,
increase sales of higher margin products, modernize our operations, improve
quality and customer service and move towards a leaner, more decentralized
organization. These actions, as well as moderate improvement in key steel
markets and achieving fair trade in steel, should enable Bethlehem to be
profitable in the fourth quarter of 1993.
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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.
The following previously reported legal proceedings had developments
during the third quarter of 1993:
On October 16, 1990, the Justice Department on behalf of the United
States Environmental Protection Agency ("EPA") filed a civil action against
Bethlehem in the United States District Court for the Northern District of
Indiana seeking injunctive relief and civil penalties for alleged violations
of the Resource Conservation and Recovery Act ("RCRA") and the Safe Drinking
Water Act with respect to the Burns Harbor plant, including failure to manage
certain of the plant's sludges as hazardous wastes, and failure to begin a
corrective action program pursuant to the terms of a previously issued
underground injection permit. On March 19, 1993, the Court issued a
Memorandum Opinion and Order granting Partial Summary Judgment for the
government concerning the liability issues in the case and ordering Bethlehem
to comply with interim status requirements of RCRA for its terminal polishing
lagoons and landfill and to comply with the corrective action requirements of
Bethlehem's underground injection well permits. A hearing on the civil
penalty issue was concluded on July 21, 1993, and on August 31, 1993 the Court
entered a judgment against Bethlehem for $6 million. This sum consisted of
$4.2 million for alleged permit violations and $1.8 million for the alleged
landfill violations. Bethlehem continues to believe that it has meritorious
defenses and that the trail court's decisions are erroneous. Bethlehem has
filed a Notice of Appeal with the United States Court of Appeals for the
Seventh Circuit appealing the trial court's grant of summary judgment, and, in
addition, Bethlehem intends to file a timely appeal to the United States Court
of Appeals for the 7th Circuit concerning the trail court's penalty
determination.
On October 1, 1991, the Justice Department on behalf of the EPA
filed a civil action against Bethlehem in the United States District Court for
the Western District of New York. The complaint seeks injunctive relief and
civil penalties for alleged violations of Section 112 of the Clean Air Act and
the asbestos National Emissions Standards for Hazardous Air Pollutants
("NESHAP") regulations promulgated thereunder, which allegedly took place as a
result of asbestos removal activities during the demolition of the basic
oxygen furnace and the slab mill at the Lackawanna plant. Consent
Decrees, which resolve all claims raised against Bethlehem in the Complaint,
were entered by the Court on or about September 1, 1993 following the required
30 day public comment period. The Consent Decrees require Bethlehem to pay
civil penalties of $512,500 and to comply with a remedial program applicable
to asbestos removal operations conducted at the Lackawanna plant during the
three year period following entry of the decrees.
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Bethlehem believes that any ultimate liability arising from these
actions should not have a material adverse effect on its consolidated
financial position at September 30, 1993.
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 per share earnings.
(b) Reports on Form 8-K.
During the quarter ended September 30, 1993, no reports on Form 8-K
were filed by Bethlehem.
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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: November 12, 1993
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EXHIBIT INDEX
The following is an index of the exhibits included in this Report:
Item No. 11
Exhibit Statement Regarding Computation of Per Share Earnings
Sequential Page Number 17<PAGE>
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 Nine Months
Ended September 30 Ended September 30
1993 1992 Primary Earnings Per Share 1993 1992
$31.2 ($58.2) Net Income (Loss) ($15.4) ($396.2)
Less Dividend Requirements:
(2.5) (2.5) $2.50 Preferred Dividend (7.5) (7.5)
(3.1) (3.1) $5.00 Preferred Dividend (9.4) (9.4)
(4.5) - $3.50 Preferred Dividend (10.3) -
(0.5) (0.2) 5% Preference Dividend (1.8) (1.2)
(10.6) (5.8) Total Preferred and Preference Dividend (29.0) (18.1)
Net Income (Loss) Applicable
$20.6 ($64.0) to Common Stock ($44.4) ($414.3)
Average Shares of Common Stock and
Equivalents Outstanding:
91,099 84,289 Common Stock 90,804 79,120
4 * Stock Options * *
91,103 84,289 Total 90,804 79,120
$0.23 ($0.76) Primary Earnings Per Share ($0.49) ($5.24)
Fully Diluted Earnings Per Share
$31.2 ($58.2) Net Income (Loss) ($15.4) ($396.2)
Less Dividend Requirements:
(2.5) (2.5) $2.50 Preferred Dividend (7.5) (7.5)
(3.1) (3.1) $5.00 Preferred Dividend (9.4) (9.4)
(4.5) - $3.50 Preferred Dividend (10.3) -
(0.5) (0.2) 5% Preference Dividend (1.8) (1.2)
Net Income (Loss) Applicable
$20.6 ($64.0) to Common Stock ($44.4) ($414.3)
Average Shares of Common Stock and
Equivalents and Other Potentially
Dilutive Securities Outstanding:
91,099 84,289 Common Stock 90,804 79,120
4 * Stock Options * *
* * $2.50 Preferred Stock * *
* * $5.00 Preferred Stock * *
* * $3.50 Preferred Stock * *
* * 5% Preference Stock * *
91,103 84,289 Total 90,804 79,120
$0.23 ($0.76) Fully Diluted Earnings Per Share ($0.49) ($5.24)
* Antidilutive
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