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BETHLEHEM STEEL REPORTS RESULTS FOR FOURTH QUARTER 1991 AND PRELIMINARY RESULTS FOR YEAR 1991

 BETHLEHEM STEEL REPORTS RESULTS FOR FOURTH QUARTER 1991
 AND PRELIMINARY RESULTS FOR YEAR 1991
 BETHLEHEM, Pa., Jan. 29 /PRNewswire/ -- Bethlehem Steel Corporation (NYSE: BS) reported a net loss of $638 million for the fourth quarter of 1991 and $767 million for the year 1991 compared to net losses of $517 million and $464 million for the fourth quarter and year 1990.
 Results for the fourth quarter and year 1991 include a $575 million net restructuring charge principally for exiting the business of our Bar, Rod and Wire Division and for other actions announced today as part of a comprehensive plan approved by Bethlehem's Board of Directors that will substantially reduce costs, conserve cash and help return Bethlehem to profitability. Results for the fourth quarter and year 1990 included a $550 million net restructuring charge.
 Excluding the effects of these net restructuring charges, net losses were $63 million and $192 million for the fourth quarter and year 1991 compared to net income of $33 million and $87 million for the fourth quarter and year 1990. The continuing effects of the recession on steel prices and shipments and higher operating costs, primarily associated with the hot strip mill modernization at Sparrows Point and a blast furnace reline at Burns Harbor, were the principal causes of the decline in 1991's operating results.
 Bethlehem Steel issued the following analysis:
 SEGMENT RESULTS
 Basic Steel Operations: The Basic Steel Operations segment had losses from operations of $619 million and $708 million for the fourth quarter and year 1991 compared to losses from operations of $508 million and $425 million for the fourth quarter and year 1990. This segment's results for 1991 and 1990 include the previously mentioned restructuring charges.
 Steel prices continued to decline in 1991 as a result of the effects of the recession on steel demand and intense competitive pressures. Realized prices in substantially all our major product lines were lower in 1991 than in 1990 and, on average, were below the levels of the early 1980's.
 Domestic steel industry shipments declined by 7 percent in 1991 to approximately 79 million tons from 85 million tons in 1990. The decline in 1991 shipments was primarily attributable to weaker demand from the construction, machinery and automotive markets which more than offset the favorable effects of an increase in steel exports and a decrease in imports.
 The Basic Steel Operations segment's steel shipments declined in 1991 to 8.3 million net tons from 8.6 million net tons in 1990. Steel shipments in the fourth quarter of 1991 were substantially lower than in the fourth quarter of 1990 as a result of a weaker steel market and a blast furnace reline at Burns Harbor. Raw steel production was 10.0 million net tons in 1991 compared to 10.9 million net tons in 1990. Utilization of production capability was 63 percent in 1991 compared to 68 percent in 1990. Results for 1991 were also adversely affected by an unfavorable change in product mix due to a higher proportion of semifinished shipments.
 In addition to lower realized prices and shipments, our Basic Steel Operations segment incurred higher operating costs in 1991. Employment costs were higher in 1991 as a result of wage and benefit increases under our labor agreement with the United Steelworkers of America (USWA). Wages and benefits also increased under our USWA labor agreement on Jan. 1, 1992.
 Approximately $140 million in higher costs were also incurred in 1991 in connection with the hot strip mill modernization and a coke oven repair program at the Sparrows Point plant and a blast furnace reline at the Burns Harbor plant. The Sparrows Point hot strip mill commenced start-up operations in late July 1991 and is expected to reach full production by mid-1992. The blast furnace reline at Burns Harbor was completed in November 1991. During 1990, the hot strip mill modernization, coke oven repair program and a blast furnace reline at the Sparrows Point plant resulted in approximately $100 million in higher costs.
 In December 1991, we suspended all coke production at our Sparrows Point plant for at least two years to permit the assessment and implementation of the most cost effective method of completing an emissions control program to meet environmental regulations. The Sparrows Point plant will obtain coke from our Bethlehem plant and from various outside sources. We currently have contractual commitments with third parties sufficient to satisfy our coke requirements at Sparrows Point for at least the next two years.
 We have continued to experience losses at our Bar, Rod and Wire Division, and there is no reasonable prospect for its return to profitability. Accordingly, we have decided to exit this business as promptly as possible taking into consideration the requirements of our customers. We will attempt to sell the entire Division to a qualified buyer who would continue the business. If this cannot be accomplished in the near term, we will sell the individual assets. We have also decided to exit the business of our trackwork fabrication operations at Steelton, Pennsylvania. If the sale of these operations cannot be accomplished promptly, we will discontinue them as soon as customer requirements permit.
 Severe market and competitive pressures continue to affect the Rail Products and Pipe Division and the Structural Products Division. In 1991, Bethlehem terminated discussions concerning a proposed joint venture in the United States to produce and market structural and rail products. We are considering a modernization program for the rail production facilities of the Rail Products and Pipe Division, subject to satisfactory completion of a facility study currently underway. Any modernization program would also be subject to obtaining a competitive labor agreement with the USWA. The inactive rail mill in Monessen, Pennsylvania, would not be part of any modernization program, and we will begin to actively market the mill's production equipment.
 As a result of the recent termination of the proposed joint venture, Bethlehem is reevaluating various alternatives for the Structural Products Division. Obtaining competitive employment costs will be a condition for any potential modernization. As previously announced, the existing iron and steelmaking operations at the Structural Products Division, which includes the blast furnaces, basic oxygen furnaces and related facilities, will be discontinued over the next few years. In 1990 we recorded a restructuring charge in connection with discontinuing these operations.
 Steel Related Operations: This segment had losses from operations of $6 million and $21 million for the fourth quarter and year 1991 compared to losses from operations of $3 million and $18 million for the fourth quarter and year 1990. In October 1991, we sold our Freight Car Division as part of our ongoing strategy to divest assets unrelated to our core steel business. Business was poor for our BethShip operations in 1991 due, in part, to the Gulf war; however, the Sparrows Point yard has received several new orders which should improve results in 1992. During 1991, Centec, our joint venture with a subsidiary of Usinor-Sacilor, a French steelmaker, began production of centrifugally cast rolls for the metalworking industry.
 LIQUIDITY AND FINANCIAL RESOURCES
 Cash and cash equivalents declined to $84 million at December 31, 1991 from $274 million at December 31, 1990 as a result of reduced cash provided by operating activities, high levels of capital spending, continued pension funding and the payment of dividends. Cash provided by operating activities declined to $119 million in 1991 from $354 million in 1990. Capital spending increased from $488 million in 1990 to $564 million in 1991.
 During 1991, we contributed $131 million to our pension funds compared to $276 million in 1990. However, our pension liability increased to $965 million at December 31, 1991 from $827 million at December 31, 1990 primarily as a result of the actions announced today as part of the comprehensive plan approved by Bethlehem's Board of Directors. We will consider making additional contributions to our pension funds during 1992 as appropriate.
 We realized cash proceeds from asset sales of $84 million in 1991, primarily from the sale of our Freight Car Division. Excluding any proceeds from the sale of the Bar, Rod and Wire Division, we currently plan to generate about $200 million from asset sales in 1992, principally from the sale of most of our coal operations as ongoing businesses and all of the related coal reserve properties. Today, we also announced our intention to sell our cokemaking operations in Lackawanna, New York.
 During 1991, we borrowed $116 million under our $270 million loan agreement to fund construction of the two hot-dip galvanizing lines being built at our Sparrows Point and Burns Harbor plants. We also borrowed $144 million under our 1987 and 1990 revolving credit agreements and certain other credit arrangements. At December 31, 1991, $465 million was available for borrowing under our 1987 and 1990 revolving credit agreements.
 On March 15, 1992, the maximum loan amount under our 1987 revolving credit agreement will be reduced from $500 million to $469 million and will continue to be reduced by approximately $31 million on a quarterly basis over a four-year period. In addition, the maximum loan amount under our 1990 revolving credit agreement will be reduced from $100 million to $75 million on September 28, 1992. We anticipate negotiating a new revolving credit agreement in 1992 to replace our 1987 revolving credit agreement.
 During 1991, we repaid about $69 million of debt and capital lease obligations. However, as a result of our net loss for the year and the increases in our debt described above, our debt as a percentage of invested capital increased to 56 percent at December 31, 1991, compared to 31 percent at December 31, 1990. Debt is also expected to increase during 1992 primarily as a result of additional borrowings to fund construction of the two new hot-dip galvanizing lines.
 In addition to capital expenditures and potential contributions to our pension fund, major uses of cash during 1992 include the repayment of approximately $110 million of debt and capital lease obligations. We expect to maintain an adequate level of liquidity throughout 1992.
 DIVIDENDS
 In view of Bethlehem's significant losses for the fourth quarter and year 1991 and the need to conserve cash in the face of the expected loss for the first quarter of 1992 and continuing adverse steeng a quarterly dividend of 10 cents a share on its Common Stock. The Board declared the normal quarterly dividends of $1.25 per share of $5.00 Cumulative Convertible Preferred Stock and 62-1/2 cents per share of $2.50 Cumulative Convertible Preferred Stock, each payable March 10, 1992, to holders of record on February 10, 1992. In accordance with previously announced policy, future dividends will be determined by the Board of Directors on the basis of attained results and the business outlook.
 CAPITAL EXPENDITURES
 Capital expenditures were $564 million during 1991 compared to $488 million in 1990. We currently estimate that capital expenditures for 1992 will be approximately $400 million. Construction of the hot-dip galvanizing line being built at the Sparrows Point plant is scheduled for completion during the second half of 1992.
 FORCE REDUCTIONS
 During 1992 and 1993, Bethlehem plans to reduce its hourly and salaried workforce at ongoing operations by about 1,250 employees. This action and the plans to exit certain businesses as previously announced and as reported today are expected to result in total employment force reductions of about 6,500. The reduction at ongoing operations will be accomplished by immediately implementing an early retirement incentive program for certain eligible salaried employees, realigning or eliminating various functions, and further streamlining production forces.
 NEW ACCOUNTING STANDARD FOR RETIREE HEALTH CARE BENEFITS
 In 1990, the Financial Accounting Standards Board (FASB) issued a new accounting standard for postretirement employee benefits other than pensions, principally health care benefits. This new standard requires that employers, beginning in 1993, expense these benefits on an accrual basis rather than the current "pay-as-you-go" basis.
 Currently, we estimate that Bethlehem has an unrecognized, unfunded Accumulated Postretirement Benefit Obligation (the transition obligation) of between $1.1 and $1.6 billion at December 31, 1991. The standard allows companies to immediately recognize this obligation or amortize it over a 20-year period. We have not yet decided which of the two methods we will adopt. If we recognize the transition obligation immediately, our stockholders' equity will be reduced between $.7 and $1.1 billion on an after tax basis with an increase in our annual after tax expense of between $10 and $35 million. Alternatively, if we decide to amortize the transition obligation over 20 years, there would be no immediate impact on our stockholders' equity, but our annual after tax expense would increase between $50 and $90 million. This new accounting standard does not change the cash requirements for funding these benefits. These ranges assume the ability to record deferred income taxes under the FASB's new exposure draft, "Accounting for Income Taxes."
 TRADE MATTERS
 World steel markets are still burdened with international overcapacity and trade problems related to decades of subsidies, closed borders and other market distorting devices. Bethlehem fully supports current efforts to negotiate a comprehensive, enforceable and effective Multilateral Steel Agreement (MSA) addressing these issues.
 Unfortunately, a successful conclusion to MSA negotiations appears unlikely prior to the March 31, 1992 scheduled expiration of existing Voluntary Restraint Agreements (VRAs). If an agreement is not reached, then as an alternative, Bethlehem supports extending VRAs with the necessary enabling legislation for a temporary transitional period between April 1, 1992 and the date when an effective MSA is in place. Such an extension would help to avoid the disruption and confrontation that would be caused by the massive trade litigation which could occur if the VRAs are permitted to expire without successful negotiation of an effective MSA.
 BUSINESS OUTLOOK
 The economy is showing continuing signs of weakness, and there was no pickup in consumer and business spending in the fourth quarter. We ended the year with an increasingly competitive marketplace in which prices declined below 1981 levels. We will attempt to reverse this downward trend by fully implementing our recently announced price increases on many of our products.
 The 1992 outlook remains clouded by the uncertain economy and depressed consumer and business confidence. Hopefully, efforts to stimulate activity through lower interest rates, improved credit flow and tax incentives will have a positive impact before mid-year. We are currently forecasting that 1992 domestic industry shipments will be about 80 million tons, only slightly ahead of the 79 million tons now estimated for 1991.
 The absence of meaningful growth in domestic industry shipments means that intensely competitive conditions will continue to prevail in steel markets through much of 1992.
 The combination of a weak market and intense pressure from domestic and international competitors makes it unlikely that we will return to profitability in the first quarter. However, continued quality improvements and the completion of major projects such as the Burns Harbor blast furnace reline and the Sparrows Point hot strip mill modernization should enable us to take advantage of business opportunities as they arise in 1992.
 BETHLEHEM STEEL CORPORATION
 Consolidated Statements of Income
 (dollars in millions, except per share data)
 (Unaudited)
 Three Months Year
 Ended Dec. 31 Ended Dec. 31
 1991 1990 1991 1990
 NET SALES $1,025.7 $1,200.3 $4,317.9 $4,899.2
 Costs and Expenses:
 Cost of Sales 972.2 1,043.5 4,059.7 4,327.2
 Depreciation 58.8 75.2 241.4 305.7
 Selling, administrative
 and general expense 45.0 42.4 171.0 159.6
 Estimated restructuring
 losses-net 575.0 550.0 575.0 550.0
 TOTAL COSTS AND EXPENSES 1,651.0 1,711.1 5,047.1 5,342.5
 Loss from Operations (625.3) (510.8) (729.2) (443.3)
 Financing Income (Expense):
 Interest and other
 financing costs (13.2) ( 9.6) (45.5) (44.1)
 Interest and other income 0.9 4.6 9.7 29.9
 LOSS BEFORE INCOME TAXES (637.6) (515.8) (765.0) (457.5)
 Provision for Income Taxes 0.5 1.0 2.0 6.0
 NET LOSS (638.1) (516.8) (767.0) (463.5)
 Preferred and Preference
 Stock Dividends 6.1 5.9 24.7 24.2
 NET LOSS APPLICABLE
 TO COMMON STOCK $(644.2) $(522.7) $(791.7) $(487.7)
 Loss Per Common Share $(8.47) $(6.91) $(10.41) $(6.45)
 Average shares
 outstanding (thousands) 76,252 75,860 76,072 75,666
 Production Data:
 Steel products shipped
 (thousands of net tons) 2,080 2,206 8,376 8,865
 Raw steel produced
 (thousands of net tons) 2,498 2,855 10,022 10,924
 Utilization of
 production capability
 (percent) 62 71 63 68
 /delval/
 -0- 1/29/92
 /CONTACT: Henry Von Spreckelsen of Bethlehem Steel, 215-694-3711/
 (BS) CO: Bethlehem Steel Corporation ST: Pennsylvania IN: MNG SU: ERN


CC -- PH004 -- 4702 01/29/92 11:45 EST
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Date:Jan 29, 1992
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