2001

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C.  20549

                                 F O R M  10-K
(Mark One)
  x  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
 ---
     of 1934 For the Fiscal Year Ended December 31, 2001

     Transition Report Pursuant to Section 13 or 15(d) of the Securities
 ---
     Exchange Act of 1934

                           Commission file number 1-1941

               B E T H L E H E M   S T E E L   C O R P O R A T I O N
               (Exact name of registrant as specified in its charter)

                DELAWARE                              24-0526133
        (State of Incorporation)          (I.R.S. Employer Identification No.)

           1170 Eighth Avenue
         BETHLEHEM, PENNSYLVANIA                       18016-7699
(Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code:  (610) 694-2424

Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange on
      Title of each class                            which registered
      -------------------                        ------------------------

Common Stock--$1 par value per share              New York Stock Exchange
                                                  Chicago Stock Exchange
Preference Stock Purchase Rights                  New York Stock Exchange
                                                  Chicago Stock Exchange
Preferred Stock -- $1 par value per share
 $5.00 Cumulative Convertible                      New York Stock Exchange
 (stated value $50.00 per share)
 $2.50 Cumulative Convertible                      New York Stock Exchange
 (stated value $25.00 per share)
 8.45% Debentures.  Due March 1, 2005              New York Stock Exchange

    Securities registered pursuant to Section 12(g) of the Act:  None

    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
                                              ---   ---

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  x
                             ---

Aggregate Market Value of Voting Stock held by Non-Affiliates:  $63,391,747

    The amount shown is based on the closing price of Bethlehem Common Stock on
the New York Stock Exchange Composite Tape on January 28, 2002.  Voting stock
held by directors and executive officers of Bethlehem is not included in the
computation.  However, Bethlehem has made no determination that such
individuals are "affiliates" within the meaning of Rule 405 under the
Securities Act of 1933.

Number of Shares of Common Stock outstanding as of January, 28, 2002:
130,887,770

DOCUMENTS INCORPORATED BY REFERENCE:  None



<PAGE>
                                    PART I


ITEM 1. BUSINESS.

    On October 15, 2001, Bethlehem(1) and 22 of its wholly owned subsidiaries
filed voluntary petitions under chapter 11 of title 11 of the United States
Code in the United States Bankruptcy Court for the Southern District of New
York (Case Nos.  01-15288 (BRL) through 01-15302 (BRL) and 01-15308 (BRL)
through 01-15315 (BRL)).  The chapter 11 cases are being jointly administered
for procedural purposes under Case No.  01-15288 (BRL).  Bethlehem and its
subsidiaries remain in possession of their assets and properties and continue
to operate their businesses and manage their properties as
debtors-in-possession.  Despite nearly $300 million in net cost reductions
since the middle of 1998, Bethlehem has been unable to overcome the injury
caused by record levels of unfairly-traded steel imports and a slowing economy
that has severely reduced prices, shipments and production.  Since mid-1998,
Bethlehem's revenues have been reduced by about $1.4 billion annually.  The
resulting operating losses and negative cash flow severely impaired Bethlehem's
financial condition.

    As a result of the chapter 11 filing, there is no assurance that the
carrying amounts of the assets will be realized or that liabilities will be
settled for amounts recorded.  Bethlehem also is continuing to pursue various
strategic alternatives including, among other things, possible consolidation
opportunities, joint ventures with other steel operators, a stand-alone plan of
reorganization and liquidation of part or all of Bethlehem's assets.  Such
alternatives are in an early stage and have not been implemented, nor can there
be any assurance that any such alternatives will be implemented.  After further
consideration of such alternatives and negotiations with various parties in
interest, Bethlehem expects to present a chapter 11 plan, which will likely
cause a material change to the carrying amount of assets and liabilities in the
financial statements.

    For further information on Bethlehem's chapter 11 cases, see "PART 1, ITEM
3.  LEGAL PROCEEDINGS", "PART II, ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and "Note B" under "PART IV,
ITEM 14(a)(1).  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" of this Report.

Operations
----------

        Bethlehem produces a wide variety of steel mill products including
hot-rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy
plates, rail, specialty blooms, carbon and alloy bars and large-diameter pipe.
Bethlehem's principal steel operations include the Burns Harbor Division, the
Sparrows Point Division and the Pennsylvania Steel Technologies Division.
Bethlehem also has iron ore operations (which provide raw materials to
Bethlehem's steelmaking facilities at the Burns Harbor Division or sell such
materials to trade customers), railroad and trucking operations (which
transport raw materials and semifinished steel products within various
Bethlehem operations and serve other customers) and lake shipping operations
(which primarily transport raw materials to the Burns Harbor Division).  See
"PART I, ITEM 2.  PROPERTIES" of this Report for a description of the
facilities of these business units and operations.

---------------
1     "Bethlehem" when used in this Report means Bethlehem Steel Corporation, a
      Delaware corporation, and where applicable includes its consolidated
      subsidiaries.  Bethlehem was incorporated in Delaware in 1919.

                                          1








<PAGE>


     The following table shows production information for Bethlehem and for
the domestic steel industry.  The information regarding the domestic steel
industry is based on data from the American Iron and Steel Institute
("AISI"):


<TABLE>
<CAPTION>

<S>                                               <C>      <C>      <C>

                                                  2001     2000      1999
                                                  ----     ----      ----

Domestic steel industry raw steel production
 capability (million of net tons) .............   125.5    130.3    128.2
Domestic steel industry raw steel production
 (million of net tons).........................    99.3*   112.2    107.4
Domestic steel industry average raw steel
 utilization rate..............................     80%      86%      84%
Bethlehem's raw steel production capability
 (million of net tons).........................    11.0     11.3     11.3
Bethlehem's raw steel production (million of
 net tons).....................................     8.8     10.0      9.4
Bethlehem's average raw steel utilization rate.     79%      88%      83%
Bethlehem's production as a percent of the
 domestic steel industry.......................    8.8%     8.9%     9.4%
</TABLE>
__________
*  Preliminary


    Of Bethlehem's 2001 raw steel production, 89 percent was produced by basic
oxygen furnaces and 11 percent by electric furnaces.

    Bethlehem's operations are subject to planned and unplanned outages due to
required maintenance, equipment malfunctions, work stoppages, various hazards
(including explosions, fires and severe weather conditions) and the
availability of raw materials, supplies, utilities and other items needed for
the production of steel.  These outages could result in reduced production and
increased costs.

Markets
-------

    For information on Bethlehem's principal markets, see "Operating Results"
under "PART II, ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" of this Report.  Many of the markets
Bethlehem supplies, such as automotive, machinery and construction, are highly
cyclical and subject to downturns in the U.S. economy.  Also, many of
Bethlehem's customers and suppliers are subject to collective bargaining
agreements, and their ability to operate could be adversely affected by a
strike or work stoppage.

    Consolidation of customers in major steel-consuming industries, such as the
automotive and container industries, has increased their buying leverage and
may make it more difficult to increase steel prices in the future.

                                       2








<PAGE>

    Bethlehem distributes steel products principally through its own sales
organization, which has sales offices at various locations in the United States
and Mexico, and through foreign sales agents.  In addition to selling to
customers who consume steel products directly, Bethlehem sells steel products
to steel service centers, distributors, processors and converters.  Export
sales were 3 percent of total sales in each of the last three years.

    Trade orders on hand were about $0.6 billion at December 31, 2001, and $0.9
billion at December 31, 2000.  Substantially all of the orders on hand at
December 31, 2001, are expected to be filled in 2002.

Steel Price Sensitivity
-----------------------

    Bethlehem's financial results are significantly affected by relatively
small (on a percentage basis) variations in the realized prices for its
products.  For example, Bethlehem shipped 7.8 million net tons of steel
products and recorded net sales of $3.3 billion during 2001, implying an
average realized price per ton of about $430.  A one percent increase or
decrease in this implied average realized price during 2001 would, on a pro
forma basis, have resulted in an increase or decrease in net sales and pre-tax
income of about $35 million.  Competitive pressures in the steel industry are
severe.  These pressures could limit Bethlehem's ability to obtain price
increases or could lead to a decline in prices, which could have a material
adverse effect upon Bethlehem.

Competition
-----------

    The global steel industry is highly competitive.  This competition affects
the prices that Bethlehem can charge for its products, the utilization of its
production facilities, its ability to sell higher value products and ultimately
its profitability.

    Capacity.  There is excess world capacity for many of the products produced
    --------
by Bethlehem.  In addition, overcapacity has been perpetuated by the continued
operation, modernization and upgrading of marginal domestic facilities through
bankruptcy reorganization proceedings and by the sale of marginal domestic
facilities to new owners, which operate such facilities with a lower cost
structure.  Over the next few years, new domestic capacity in the plate market
and potential new domestic capacity in the rail market are expected to increase
competition in these products where Bethlehem now has a large domestic market
share.

    Electric Furnace Producers.  Domestic integrated producers, such as
    --------------------------
Bethlehem, have lost market share in recent years to domestic electric furnace
producers.  These companies are relatively efficient, low-cost producers that
make steel from scrap in electric furnaces (which are less expensive to build
than integrated facilities), have lower employment and environmental costs per
ton shipped and target regional markets.  Through the use of various higher
quality raw materials and thin slab casting technology, electric furnace
producers are increasingly able to compete directly with producers of higher
value products, including cold-rolled and coated sheets.

    Imports.  Domestic steel producers also face significant competition from
    -------
foreign producers and have been, and may continue to be, adversely affected by
unfairly-traded imports.  In certain cases, foreign producers may be pricing
their products below their production costs.  Imports of finished steel
products accounted for about 21 percent of the domestic market in 2001, 24
percent in 2000 and 22 percent in 1999.

    The following table, which is based on data reported by the AISI, shows the
percentage of the domestic apparent consumption of steel mill products supplied
by imports for various classes of products.

                                       3






<PAGE>

<TABLE>
<CAPTION>
<S>                                            <C>      <C>     <C>
                                               2001*    2000    1999
                                               ----     ----    ----

        Rail ..............................     37%      30%     37%
        Plates ............................     15       16      16
        Tin mill products .................     19       18      20
        Hot-rolled and cold-rolled sheets..     15       21      21
        Coated sheets .....................     10       10      11
        All products** ....................     24       27      26
</TABLE>


*   Preliminary

**  Excludes steel imported in the form of manufactured goods, such as
    automobiles, but includes semifinished steel.

    Excluding semifinished steel, imports of steel mill products were about
23.7 million tons in 2001, 29.7 million tons in 2000 and 27.1 million tons in
1999.

    Bethlehem is a party to a number of on-going trade proceedings.  Such
proceedings seek the imposition of antidumping and countervailing duties, which
are designed to offset dumping and the advantages of subsidies, respectively,
on material imported in violation of U.S. trade laws.  Such actions are
brought before the Department of Commerce ("DoC") and the International Trade
Commission ("ITC") which conduct an investigation to determine whether an
antidumping or countervailing duty order is appropriate.  If such an order is
granted, it is subject to an annual administrative review and will expire at
the end of five years ("sunset reviews") unless the DoC and the ITC are
convinced that injury, dumping or subsidization is likely to continue or recur
if the order is revoked.

    In November 2000, Bethlehem, three other domestic producers and the United
Steelworkers of America ("USWA") initiated antidumping actions and
countervailing duty cases against various countries alleging that imports of
hot-rolled carbon steel violated U.S. trade laws.  Favorable initial injury
determinations were made in all of the cases.  In April 2001, the DoC assessed
tariffs against 16 countries based on its determination that such countries were
unfairly trading hot-rolled carbon steel in the U.S.  The ITC's determination of
material injury in November 2001 permitted the implementation of these tariffs.

    In June 2001, the Bush Administration initiated an investigation under
Section 201 of the Trade Act to determine if the domestic steel industry was
being injured as a result of foreign steel imports.  In October 2001, the ITC
made preliminary determinations that the markets and domestic producers of
nearly all flat-rolled steel products were likely to suffer significant injury
as a result of imports.  In December 2001, the ITC submitted its remedy
recommendations to President Bush, whose remedy decision is due in early March
of this year.

    In September 2001, Bethlehem and various other domestic producers initiated
antidumping actions and countervailing duty cases against 21 countries alleging
that imports of cold-rolled sheet violated U.S. trade laws.  In November 2001,
the ITC made favorable initial injury determinations in all of the cases.

    In addition, there are currently orders in effect concerning imports from
various countries of a number of Bethlehem's products, including
corrosion-resistant steel, cut-to-length and clad plate, plate in coils and tin
plate.

    Substitute Materials.  For many steel products, there is substantial
    --------------------
competition from manufacturers of products other than steel, including
aluminum, ceramics, carbon fiber, concrete, glass, plastic and wood.  Changes
to the relative competitiveness of these substitute materials and

                                       4






<PAGE>

the emergence of additional substitute materials could adversely affect future
prices and demand for Bethlehem's products.

Capital Expenditures
--------------------

    The domestic integrated steel industry is very capital intensive.  As
discussed under "PART I, ITEM 2.  PROPERTIES -- General" of this Report,
Bethlehem's principal operations and facilities are of varying ages,
technologies and operating efficiencies.  Bethlehem will need to continue to
make significant capital expenditures in the future to maintain and improve the
competitiveness of its operations and facilities.  For further information on
capital expenditures, see "Liquidity and Cash Flow" under "PART II, ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" of this Report.

Environment
-----------

    Bethlehem's operations are subject to a broad range of laws and regulations
relating to the protection of human health and the environment.  In the past,
the company has expended, and can be expected to expend in the future,
substantial amounts to attain ongoing compliance with federal, state and local
laws and regulations, including the Clean Air Act, the Resource Conservation
and Recovery Act ("RCRA") and the Clean Water Act.  In addition, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA",
also known as "Superfund") and similar state statutes, Bethlehem has been
identified as a potentially responsible party at a number of sites requiring
evaluation and remediation. Expenditures for environmental compliance are
discussed in "Environmental Matters" under "PART II, ITEM 7.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of
this Report and those expenditures are not projected to have a material adverse
effect on Bethlehem's consolidated financial position or on its competitive
position with respect to other similarly situated domestic steelmakers subject
to the same environmental requirements.

    Under RCRA, the owners of certain facilities that manage hazardous wastes
are required to investigate and, if appropriate, remediate historic
environmental contamination found at the facility.  Except as noted below, all
of Bethlehem's major operating and inactive facilities may be subject to this
"Corrective Action Program", and Bethlehem has implemented, or is currently
implementing, corrective action programs at its facilities located in Steelton,
Pennsylvania; Lackawanna, New York; Burns Harbor, Indiana; and Sparrows Point,
Maryland.

    At Steelton, Bethlehem completed a RCRA Facility Investigation ("RFI"), a
Corrective Measures Study ("CMS") and a remediation program approved by the
United States Environmental Protection Agency ("EPA"), and completed the
remediation in 1994.  At Lackawanna, Bethlehem is conducting an RFI pursuant to
an Administrative Order on Consent with the EPA.  At Burns Harbor, Bethlehem is
also conducting an RFI in accordance with an EPA approved work plan.  At
Sparrows Point, Bethlehem, the EPA and the Maryland Department of the
Environment have agreed to a phased RFI as part of a comprehensive multimedia
pollution prevention agreement, which was entered by the U.S.  District Court
for Maryland on October 8, 1997.  The potential costs, as well as the timeframe
for the implementation of possible remediation activities, if any, at
Lackawanna, Burns Harbor and Sparrows Point cannot be reasonably estimated
until the RFIs have been completed and approved.  Nonetheless, based on current
information, Bethlehem would expect any potential cash requirements for these
sites to be incurred over a protracted period of years and, in any event, not
to be material.

                                       5








<PAGE>

    At its former plant in Bethlehem, Pennsylvania, the Company is conducting
remedial investigations pursuant to the Pennsylvania Land Recycling
("Brownfields") Program in conjunction with comprehensive redevelopment plans.
These investigations are being performed with input and oversight from both the
Pennsylvania Department of Environmental Protection and the EPA Region III
corrective action staff to ensure that the actions taken are acceptable to both
state and federal regulatory authorities.

    Bethlehem does not believe that the operations it acquired as part of the
Lukens merger in 1998 are subject to the RCRA Corrective Action Program and,
therefore, any remediation associated with those facilities will be addressed
as appropriate in the ongoing course of business.  Bethlehem may have some
residual liability for remediation associated with historic Lukens facilities,
or those that have been sold or shut down since the merger, but any such
liabilities are not anticipated to be material.

    Under CERCLA, the EPA can impose liability for site remediation on
generators and transporters of waste, as well as past and present owners and
operators of the sites where the waste was disposed of, regardless of fault or
the legality of the disposal activities.  Bethlehem is involved in approximately
34 sites where it has been advised that it may be considered a potentially
responsible party under CERCLA or corresponding state statutes.  Based on its
experience regarding site remediation, as well as its knowledge of and extent of
involvement in such sites, Bethlehem's share of costs for remediation of these
sites should not be material.

    Bethlehem has been required to pay various fines and penalties relating to
violations or alleged violations of laws and regulations in the environmental
control area.  Bethlehem paid about $350,000 in 2001, $134,000 in 2000 and
$74,000 in 1999 for such fines and penalties.

    For further information on Bethlehem's environmental matters, see
"Environmental Matters" under "PART II, ITEM 7, MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Report.

Purchased Materials and Services
--------------------------------

    Bethlehem purchases over $2 billion per year of raw materials, energy,
equipment, goods and services from commercial sources in about 40 countries.
Bethlehem's profitability could be adversely affected by difficulties in
obtaining these items, along with the terms and prices paid for them.  These
difficulties could include such things as labor strikes, political instability,
credit availability and natural disasters.  There has also been a significant
consolidation among suppliers of raw materials to the steel industry,
especially energy and iron ore, putting Bethlehem at an economic disadvantage
in resisting upward cost pressures.  See "PART I, ITEM 2.  PROPERTIES -- Raw
Material Properties and Interests" of this Report for a further description of
the sources of raw materials essential to Bethlehem's steelmaking business.

Technology
----------

    Bethlehem performs research to improve existing products, develop new
products and make operating processes more efficient.  During 2001, 2000 and
1999, Bethlehem spent about $20 million, $20 million and $21 million,
respectively, for research and development.  Bethlehem owns a number of U.S.
and foreign patents that relate to a wide variety of products and processes,
has pending patent applications and is licensed under a number of patents.
During 2001, eight U.S.  patents covering a variety of new developments were
awarded to Bethlehem.  However, Bethlehem believes that no single patent or
license or group of patents or licenses is of material importance to its
overall business.  Bethlehem also owns registered

                                       6








<PAGE>

trademarks for certain of its products and service marks for certain of its
services which, unlike patents and licenses, are renewable so long as they are
continued in use and properly protected.

Employment
----------

    At the end of 2001, Bethlehem had about 13,100 employees, 80 percent of
whom are covered by agreements with the USWA.  A strike or work stoppage could
impact Bethlehem's ability to operate if it is unable to negotiate new
agreements with its represented employees when the existing agreements expire.
Also, Bethlehem's profitability could be adversely affected if increased costs
associated with any future contract are not recoverable through productivity
improvements or price increases.

    For further information on Bethlehem's employment matters, see "Employees
and Employment Costs" under "PART II, ITEM 7.  MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Report.

Employee Postretirement Obligations
-----------------------------------

    Bethlehem provides pension, health care and life insurance benefits to most
retirees and their dependents.  These future benefits have not been fully
funded and, therefore, Bethlehem has substantial financial obligations on its
balance sheet.  At December 31, 2001, Bethlehem had recorded a liability of
$1,624 million for pensions and $2,047 million for postretirement benefits
other than pensions.  To the extent competitors do not have similar
obligations, Bethlehem has a competitive disadvantage.  Also, significant
increases in health care costs would adversely affect Bethlehem's future
profits and cash requirements.

    For further information of Bethlehem's pension and other postretirement
benefit funding and obligations, see "Liquidity and Cash Flow" under "PART II,
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" of this Report.

Joint Ventures, Partnerships, Facility Sharing Arrangements and Mergers
-----------------------------------------------------------------------

    Bethlehem has considered, and discussed with others, various opportunities
for joint ventures, partnerships, facility sharing arrangements and mergers of
all or part of Bethlehem.  Bethlehem will continue to explore such
opportunities.  See "PART I, ITEM 2.  PROPERTIES" of this Report for a
description of joint ventures in which Bethlehem participates.

Businesses Exited
-----------------

    In recent years, Bethlehem has shut down or sold several facilities and
operations.  Since 1996, Bethlehem recorded net charges of $411 million in
connection with these actions.

    If it becomes necessary for Bethlehem to exit or reduce employment at
additional businesses and operations in the future, it could incur substantial
additional charges in the process.  The charges for employees terminated as a
result of facility shutdowns or sales vary depending upon the demographics of
the workforce, but could be about $100,000 per employee.  The recording of
these charges could have a material adverse impact on Bethlehem's financial
condition because of the increase in recorded liabilities, decrease in
stockholders' equity and possible increases in required contributions to the
pension fund and retiree health care payments.

                                       7









<PAGE>
Capital Structure
-----------------

    Bethlehem's capital structure is highly leveraged.  For information on
Bethlehem's capital structure, see "Liquidity and Cash Flow" under "PART II,
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS" of this Report.

Forward-Looking Statements
--------------------------
    Bethlehem and its representatives may from time to time make
forward-looking statements in reports filed with the Securities and Exchange
Commission, reports to stockholders, press releases, other written documents
and oral presentations.  These forward-looking statements may include, among
others, statements concerning its chapter 11 bankruptcy cases, projected levels
of sales, shipments and income, pricing trends, anticipated cost-reductions,
product mix, anticipated capital expenditures and other future plans and
strategies.

    As permitted by the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Bethlehem is identifying in this Report
important factors that could cause Bethlehem's actual results to differ
materially from those projected in these forward-looking statements.  These
factors include, but are not necessarily limited to:

    .  changes arising from Bethlehem's chapter 11 cases;

    .  the length of time Bethlehem will operate under chapter 11 protection;

    .  the outcome of the chapter 11 cases in general;

    .  whether Bethlehem will continue to operate under its current
       organizational structure;

    .  whether there will be a major steel industry consolidation effort;

    .  the effect of the chapter 11 cases on Bethlehem's businesses, including
       customer and supplier reactions and the interests of various creditors
       and security holders;

    .  changes in customer spending patterns, supplier choices and demand for
       steel products;

    .  the effect of planned and unplanned outages on Bethlehem's operations;

    .  the potential impact of strikes or work stoppages at facilities of
       Bethlehem's customers and suppliers;

    .  the sensitivity of Bethlehem's results to relatively small changes in
       the prices it obtains for its products;

    .  intense competition due to excess global steel capacity, low-cost
       electric furnace facilities, imports (especially unfairly-traded
       imports) and substitute materials;

    .  the consolidation of many of Bethlehem's customers and suppliers;

    .  the high capital requirements associated with integrated steel
       facilities;

                                   8









<PAGE>


    .  the significant costs associated with environmental controls and
       remediation expenditures and the uncertainty of future environmental
       control requirements;

    .  availability, prices and terms associated with raw materials, supplies,
       utilities and other services and items required by Bethlehem's
       operations;

    .  employment matters, including costs and uncertainties associated with
       Bethlehem's collective bargaining agreements, and employee
       postretirement obligations;

    .  the effect of possible future closure or exit of businesses;

    .  Bethlehem's highly leveraged capital structure and its ability to
        obtain new capital at reasonable costs and terms;

    .  financial difficulties encountered by joint venture partners; and

    .  the effect of existing and possible future lawsuits filed against
       Bethlehem.

    "PART I, ITEM 1.  BUSINESS", "PART I, ITEM 3.  LEGAL PROCEEDINGS" and "PART
II, ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" of this Report discuss these factors in more detail and
are incorporated by reference into this section.  The forward-looking
statements included in this document are based on information available to
Bethlehem as of the date of this report.  Bethlehem does not undertake to
update any forward-looking statements that may be made from time to time by
Bethlehem or its representatives.

ITEM 2. PROPERTIES.

Burns Harbor Division
---------------------
    Location:  In Indiana, on Lake Michigan, about 50 miles southeast of
    --------
Chicago, Illinois, and in Lackawanna, New York, on Lake Erie.

    Principal products and markets:  Hot-rolled, cold-rolled,
    ------------------------------
electrogalvanized, hot-dip galvanized and galvannealed sheet, alloy and carbon
plate and coke.  Its principal markets include automotive, service centers,
construction, machinery and appliance.

    Principal facilities:  A sintering plant, coke oven batteries (one of which
    --------------------
is operated by Burns Harbor for the battery's owner), two blast furnaces,
including coal injection facilities, three basic oxygen furnaces with a
combined annual raw steel production capability of about 5 million tons, a
vacuum degassing facility, two continuous slab casters with a combined annual
production capability of about 4.8 million tons, an 80-inch hot-strip mill, two
continuous pickling lines, an 80-inch five-stand cold reducing mill, sheet
finishing mills, a continuous heat treating line, batch annealing facilities, a
72-inch hot-dip galvanizing line, a 110-inch sheared plate mill including two
continuous reheat furnaces, a roughing mill, a finishing mill and a normalizing
furnace, and a 160-inch sheared plate mill including two continuous reheat
furnaces, four batch reheat furnaces, a roughing mill, a finishing mill, an
in-line accelerated cooling facility, a quench and temper line and a batch
normalizing furnace.  Burns Harbor manages, effective January 1, 2002,
Bethlehem's wholly owned subsidiary Chicago Cold Rolling, L.L.C., which
operates a 68-inch single-stand four-high reversing cold mill with an annual
production capability of more than 300,000 tons, six hydrogen batch anneal
furnaces and a 68-inch four- high temper mill.  Burns Harbor also operates a
cold reducing mill, a continuous pickling line and a galvanizing line in
Lackawanna, New York.

                                   9






<PAGE>


    Burns Harbor continuously casts about 100 percent of its total production
volume.  Burns Harbor's utilization of raw steel production capability was 88
percent during 2001.

Sparrows Point Division
-----------------------

    Location:  On the Chesapeake Bay, near Baltimore, Maryland, and in
    --------
Coatesville and Conshohocken, Pennsylvania.

    Principal products and markets:  Hot-rolled, cold-rolled, hot-dip
    ------------------------------
galvanized and Galvalume(R) sheet, tin mill products, carbon plate,
high-strength, low alloy plate, commercial alloy plate, military alloy plate,
coiled and cut plate and clad plate.  Its principal markets for these products
include construction, containers, service centers, transportation,
infrastructure, machinery, equipment, environmental and engineering.

    Principal facilities:  Maryland:  A sintering plant, a large blast furnace,
    --------------------
two basic oxygen furnaces with an annual raw steel production capability of
about 4 million tons, a two-strand continuous slab caster, a 68-inch hot-strip
mill, a new continuous pickling and cold reducing mill, two galvanizing lines,
a Galvalume(R) line, a 48-inch hot-dip galvanizing/Galvalume(r) line and tin
mill facilities that include tin and chrome plating lines.  Coatesville:  an
electric arc furnace with an annual raw steel production capability of about
900,000 tons, two plate mills (140-inch and 206-inch) and heat treating
facilities.  Conshohocken:  a 110-inch Steckel mill, two reheat furnaces, a
roughing mill, an in-line cooling and cut-to-length line, a quench and temper
line and a batch heat-treating system.

    Sparrows Point continuously casts about 100 percent of its total production
volume at its Maryland facilities and about 54 percent at its Pennsylvania
facilities.  Sparrows Point's utilization of raw steel production capability
was 82 percent during 2001.

Pennsylvania Steel Technologies Division ("PST")
------------------------------------------------

    Location:  In Steelton, Pennsylvania.
    --------

    Principal products and markets:  Railroad rails, specialty blooms, flat
    ------------------------------
bars and large-diameter pipe for the oil and gas industries.

    Principal facilities:  DC electric arc furnace with an annual raw steel
    --------------------
production capability of about 1.1 million tons, a ladle furnace, a vacuum
degassing facility, a continuous bloom caster, a 44-inch blooming mill, a
28-inch rail mill, in-line rail head-hardening facilities, finishing and
shipping facilities for long-length (80-foot) rails, a 20-inch bar mill and an
electric fusion welded pipe mill.

    PST's utilization of raw steel production capability was 36 percent during
2001.

    Effective January 1, 2002, Bethlehem modified its organizational structure
by creating a new "Pennsylvania Division".  The Pennsylvania Division consists
of PST and Bethlehem's Coatesville and Conshohocken plants, which were formerly
part of the Sparrows Point Division.

Joint Ventures
--------------

    Bethlehem participates in the following joint ventures:

                                         10





<PAGE>

    .  Double G Coatings Company, L.P.  (located near Jackson, Mississippi) --
       operates a 270,000 ton per year sheet coating line that produces
       galvanized and Galvalume(R) coated sheets primarily for the construction
       market.  Sparrows Point provides cold-rolled coils for about half of
       Double G's annual capability and is responsible for marketing its share
       of the finished product.

    .  Columbus Coatings Company (located in Columbus, Ohio) -- operates a
       coating line that will produce quality corrosion resistant steel sheets
       primarily for the automotive market.  Burns Harbor provides cold-rolled
       coils for about half of Columbus Coatings' annual capacity and is
       responsible for marketing its share of the finished product.

    .  Columbus Processing Company LLC (located in Columbus, Ohio) -- operates
       a steel slitting and warehousing facility.

    .  Steel Construction Systems (located in Orlando, Florida) -- manufactures
       steel studs and joists for residential and light commercial buildings.

    .  Walbridge Coatings (located in Walbridge, Ohio) -- operates a 400,000
       ton per year electrogalvanizing line.  This facility produces
       corrosion-resistant sheet steel primarily for the automobile industry
       and other consumer durables markets.  Burns Harbor provides cold-rolled
       coils for 67 percent of Walbridge's annual capability and is responsible
       for marketing its share of the finished product.

    .  Indiana Pickling and Processing Company (located in Portage, Indiana) --
       operates a pickling line.

    .  TWB Company (located in Monroe, Michigan) -- operates a facility
       producing laser-welded blanks for the automotive industry.

    .  Bethlehem Roll Technologies LLC (located in Sparrows Point, Maryland) --
       operates a facility for grinding steel mill rolls for Bethlehem and
       others.

    .  Chesapeake Heavy Machine Services, L.L.C.  (located in Sparrows Point,
       Maryland) -- manages and markets the services of a machine shop.

    .  BethNova Tube, LLC (located in Jeffersonville, Indiana) -- produces
       tubes for use in hydroforming automobile and truck parts.

    Bethlehem also has an indirect equity interest in an iron ore property.
See "Raw Material Properties and Interests" below.

Raw Material Properties and Interests
-------------------------------------

    Iron Ore.  Bethlehem owns 70 percent of a company that owns and operates an
iron ore mine located in Minnesota, which (excluding tonnages applicable to
interests owned by others) it estimates contained recoverable reserves at
December 31, 2001, sufficient to produce at least 175 million tons of iron ore
pellets.  During 1997, Bethlehem sold its equity interest in Iron Ore Company
of Canada ("IOC").  Bethlehem continues as a customer of IOC and purchases iron
ore at prices which approximate market.  In addition to the estimated reserves
at its operating property in Minnesota, Bethlehem also has an indirect equity
interest in an undeveloped iron ore property located in Minnesota which
(excluding tonnages applicable to interests owned by others) it estimates
contained recoverable reserves at December 31, 2001, sufficient to produce at
least 128 million tons of iron ore pellets.  During 2001, Bethlehem sold

                                      11









<PAGE>

Belem Administracoes e Participacoes, Ltda., a Brazilian company which had an
indirect ownership interest in MBR, a Brazilian iron ore mining company.

    The iron ore operating property in which Bethlehem owns 70 percent has
mining and processing facilities which can supply a majority of Bethlehem's
current annual iron ore requirements.  The location of Bethlehem's steel
operations and the iron ore products best suited to these facilities determine
when Bethlehem sells, exchanges or purchases iron ore.  These purchases have
been from various sources under a variety of arrangements.

    Bethlehem's share of the annual iron ore production by enterprises in which
it has ownership interests, for Bethlehem's use or sale to trade customers, was
5.3 million tons in 2001 and 8.4 million tons in 2000.  In addition to these
sources, Bethlehem purchased 4.9 million tons of iron ore in 2001 and 4.6
million tons of iron ore in 2000 from sources in which it had no ownership
interests.  In 2001 and 2000, Bethlehem obtained about 51 percent and 62
percent, respectively, of its iron ore requirements from operations in which it
had ownership interests.

    No iron ore trade sales commitments exist for 2002 and beyond.

    Coal and Coke.  Bethlehem purchases all of the coal it uses from commercial
    -------------
sources.  As described above, Bethlehem operates a coke-making facility at
Burns Harbor, Indiana.

    Other Raw Materials.  Bethlehem purchases its other raw material
    -------------------
requirements from commercial sources.

Transportation
--------------

    Bethlehem owns eight subsidiary shortline railroads which transport raw
materials and semifinished steel products within various Bethlehem operations
and serve other customers on their lines.  Bethlehem manages an interstate
trucking company serving Bethlehem's operations and other facilities and
manages a rail/truck intermodal facility in Bethlehem, Pennsylvania.

    The Burns Harbor Division operates two 1,000-foot ore vessels (under
long-term charters), which are used for the transportation of iron ore on the
Great Lakes.

General
-------

    While Bethlehem's principal operations and facilities are adequately
maintained, they are of varying ages, technologies and operating efficiencies.
Bethlehem believes that most of its operations and facilities currently are
competitive with the operations and facilities of its principal competitors.
Bethlehem will continue to make capital expenditures to improve and maintain
the competitiveness of its operations and facilities.  See "PART I, ITEM 1.
BUSINESS -- Capital Expenditures" of this Report for a discussion of
Bethlehem's capital expenditures.

    Bethlehem owns all of its principal operations and facilities except for
the following facilities that have been sold and which it operates under leases
or operating agreements:  No.  1 Coke Oven Battery at Burns Harbor; the wide
continuous slab casting equipment at Sparrows Point; and two lake vessels that
transport iron ore to Burns Harbor.

ITEM 3. LEGAL PROCEEDINGS.

    On October 15, 2001, Bethlehem and 22 of its wholly owned subsidiaries
filed voluntary petitions under chapter 11 of title 11, United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York (Case Nos.  01-15288 (BRL) through 01-15302 (BRL) and
01-15308 (BRL) through 01-15315 (BRL)).  Bethlehem and its

                                    12





<PAGE>

subsidiaries remain in possession of their assets and properties, and continue
to operate their businesses and manage their properties as
debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.  As a result of the chapter 11 cases, all pending litigation against
Bethlehem and its subsidiaries is stayed automatically by section 362 of the
Bankruptcy Code and, absent further order of the Bankruptcy Court, no party may
take any action to recover on pre-petition claims against Bethlehem and its
subsidiaries.

    On August 10, 2000, the New York State Department of Environmental
Conservation ("NYDEC") issued a notice alleging violations of a consent order
and New York State Air Pollution Control Regulations by Bethlehem at the
Lackawanna Coke Division.  The alleged violations involve emissions from Coke
Oven Battery No. 7 exceeding opacity requirements and failing to install and
continuously operate a certified emissions monitor on the waste heat stack
for Coke Oven Battery No. 8.  Settlement discussions intended to lead to an
agreed order resolving the matter are being held between Bethlehem and the
NYDEC.  If settlement discussions are unsuccessful, Bethlehem believes it has
meritorious defenses and will vigorously defend the action.

    Bethlehem has been and is a party to numerous legal proceedings incurred in
the ordinary course of its business.  These proceedings include a large number
of cases in which plaintiffs allege injury due to exposure to asbestos,
allegedly resulting from past operations of Bethlehem and others.  All of the
asbestos cases resolved to date have either been dismissed as to Bethlehem or
settled for immaterial amounts.  Bethlehem cannot predict with certainty the
outcome of any legal proceedings to which it is a party.  In Bethlehem's
opinion, however, adequate reserves have been recorded for losses that are
likely to result from all legal proceedings.  To the extent that such reserves
prove to be inadequate, Bethlehem would incur a charge to earnings which could
be material to its future results of operations in particular quarterly or
annual periods.  The outcome of these proceedings, however, is not currently
expected to have a material adverse effect on Bethlehem's consolidated

financial position.

    See "PART I, ITEM 1.  BUSINESS -- Environment" of this Report for a
discussion of Bethlehem's potential responsibilities for environmental cleanup
at certain sites under RCRA and CERCLA.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    There were no matters submitted to a vote of security holders during the
fourth quarter of 2001.

                                      13








<PAGE>

Executive Officers of the Registrant.

    The executive officers of Bethlehem as of February 1, 2002, are as follows:


<TABLE>
<CAPTION>

<S>                           <C>   <C>
             Name             Age              Position
             ----             ---              --------

Robert S. Miller               60   Chairman and Chief Executive Officer

William H. Graham              56   Senior Vice President (Law), General
                                    Counsel and Secretary

Leonard M. Anthony             47   Senior Vice President and Chief Financial
                                    Officer

Lonnie A. Arnett               55   Vice President (Accounting), Controller
                                    and Chief Accounting Officer

Ronald F. Chango               54   President, Burns Harbor Division

Blaise E. Derrico              47   Treasurer

Stephen G. Donches             56   Vice President (Public Affairs)

Andrew R. Futchko              58   Vice President and General Manager,
                                    Pennsylvania Division

Robert J. Jones                57   Vice President (Operations Services)

John L. Kluttz                 59   Vice President (Union Relations)

Dr. Carl F. Meitzner           62   Vice President (Strategic Planning
                                    and Business Development)

Daniel J. Mull                 50   Vice President (Commercial) and Chief
                                    Commercial Officer

Van R. Reiner                  53   President, Sparrows Point Division

Dorothy L. Stephenson          52   Vice President (Human Resources)


</TABLE>



    All of the executive officers, except for Mr. Miller, have held
responsible management or professional positions with Bethlehem or its
subsidiaries for more than the past five years.  Mr. Miller joined Bethlehem
as an executive officer and director on September 24, 2001.

    Bethlehem's By-laws provide that the Board of Directors annually chooses
the officers and that each officer holds office until his or her successor is
elected, or his or her death, resignation or removal.

                                      14








<PAGE>

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
        RELATED SECURITY HOLDER MATTERS.

    As of January 28, 2002, about 30,500 stockholders of record held
130,887,770 shares of Bethlehem Common Stock.  The principal market for
Bethlehem Common Stock is the New York Stock Exchange ("NYSE").  Bethlehem
Common Stock is also listed on the Chicago Stock Exchange.  Bethlehem issued a
press release on December 13, 2001 announcing that it has been advised by the
NYSE that it has fallen below the NYSE's continued listing criteria relating to
minimum share price.  The NYSE may grant a period up to six months during which
Bethlehem must conform to the continued listing criteria.

    Dividends on Bethlehem Common Stock are paid quarterly when declared by
Bethlehem's Board of Directors.  Bethlehem has not paid a dividend on its
Common Stock since the fourth quarter of 1991.  During 2001, Bethlehem declared
and paid only the first and second quarter dividends on its Preferred Stock.
Under Delaware law, beginning with the second quarter of 2001, Bethlehem had
insufficient "surplus" to pay dividends on its Preferred and Common Stock.
Therefore, the remaining 2001 quarterly dividends are in arrears.  Dividend
payments are also restricted by Bethlehem's debtor-in-possession financing with
General Electric Capital Corporation.

    The following table shows the high and low sales prices of Bethlehem Common
Stock as reported in the consolidated transaction reporting system.  The
closing sale price of Bethlehem Common Stock on January 28, 2002, was $.49.


<TABLE>
<CAPTION>


                                         2001                2000
                                         ----                ----
                                     Sales Prices         Sales Prices
                                     ------------         ------------
   Period                           High        Low      High        Low
   ------                           ----        ---      ----        ---
<S>                                 <C>       <C>        <C>       <C>
First Quarter..................     $3.09     $  1.69    $9.31     $5.44
Second Quarter.................      4.30        1.66     6.19      3.56
Third Quarter..................      2.46        1.01     4.75      2.75
Fourth Quarter.................      1.46         .15     3.06      1.63
</TABLE>

                                      15








<PAGE>


ITEM 6. SELECTED FINANCIAL DATA.

Five-Year Financial and Operating Summaries


Five-Year Financial and Operating Summaries
<TABLE>
<CAPTION>
<S>                                          <C>          <C>           <C>           <C>           <c>

================================================================================================================
(Dollars in millions, except per share data)      2001         2000          1999          1998          1997
----------------------------------------------------------------------------------------------------------------
Earnings Statistics
Net sales                                    $   3,334.3  $   4,094.4   $   4,023.2   $   4,583.5   $   4,741.7

Costs and Expenses:
  Employment costs                               1,265.0      1,331.0       1,291.0       1,367.0       1,439.0
  Materials and services                         2,273.8      2,557.5       2,607.4       2,698.9       2,794.3
  Depreciation and amortization                    253.1        260.3         257.5         246.5         231.0
  Taxes (other than employment and
    income taxes)                                   36.2         41.1          45.9          46.6          38.4
  Unusual items                                    372.3        (20.9)            -          35.0        (135.0)
                                             ------------ ------------  ------------  ------------  ------------
Total Costs and Expenses                         4,200.4      4,169.0       4,201.8       4,394.0       4,367.7
                                             ------------ ------------  ------------  ------------  ------------
Income (loss) from operations before
  reorganization items                            (866.1)       (74.6)       (178.6)        189.5         374.0
Reorganization items                                (8.1)          -             -             -             -
Financing income (expense):
  Interest and other financing costs               (93.3)       (75.4)        (51.9)        (55.4)        (47.5)
  Interest income                                    1.9          6.6           8.3          10.0           9.2
Benefit (provision) for income taxes              (984.0)        25.0          39.0         (24.0)        (55.0)
                                             ------------ ------------  ------------  ------------  ------------
Net income (loss)                               (1,949.6)      (118.4)       (183.2)        120.1         280.7
Dividend requirements on Preferred and
  Preference Stock                                  40.5         40.7          41.2          41.7          41.6
                                             ------------ ------------  ------------  ------------  ------------
Net income (loss) applicable to
  Common Stock                               $  (1,990.1) $    (159.1)  $    (224.4)  $      78.4   $     239.1
                                             ============ ============  ============  ============  ============

Net income (loss) per Common share - basic   $    (15.30) $     (1.21)  $     (1.72)  $      0.64   $      2.13
                                   - diluted $    (15.30) $     (1.21)  $     (1.72)  $      0.64   $      2.03
----------------------------------------------------------------------------------------------------------------
Balance Sheet Statistics

Cash and cash equivalents                    $     104.0  $     109.7   $      99.4   $     137.8   $     252.4
Receivables, inventories and other
  current assets                                 1,098.5      1,036.7       1,110.0       1,357.0       1,211.6
Current liabilities                               (271.6)      (927.2)     (1,033.4)       (985.2)       (910.8)
                                             ------------ ------------  ------------  ------------  ------------
Working capital                              $     930.9  $     219.2   $     176.0   $     509.6   $     553.2

Property, plant and equipment - net          $   2,686.9  $   2,870.5   $   2,899.7   $   2,655.7   $   2,357.7
Total assets                                     4,244.0      5,467.0       5,536.2       5,621.5       4,802.6
Total debt and capital lease obligations         1,174.2        853.4         864.1         672.1         493.4
Total liabilities (including liabilities
  subject to compromise)                         5,924.5      4,347.0       4,259.1       4,132.0       3,587.6
Stockholders' equity (deficit)                  (1,680.5)     1,120.0       1,277.1       1,489.5       1,215.0
----------------------------------------------------------------------------------------------------------------
Other Statistics
Capital expenditures                         $      89.2  $     224.3   $     557.0   $     328.0   $     228.2
Raw steel production capability
  at year end (net tons in thousands)             11,000       11,300        11,300        11,300        10,500
Raw steel production (net tons in thousands)       8,790       10,020         9,406        10,191         9,599
Steel products shipped (net tons in thousands)     7,782        8,546         8,416         8,683         8,802
Pensioners receiving benefits at year end         74,300       73,700        74,600        74,300        70,400
Average number of employees receiving pay         13,100       14,700        15,500        15,900        16,400
Common Stock outstanding at
  year end (shares in thousands)                 130,882      129,647       131,027       129,490       112,991
Common stockholders at year end                   31,000       31,000        33,000        35,000        35,000
----------------------------------------------------------------------------------------------------------------
</TABLE>

                                      16








<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

    2001 was an extremely challenging year for the domestic steel industry and
Bethlehem.  On October 15, 2001, Bethlehem Steel Corporation and 22 of its
wholly owned subsidiaries (collectively, the "Debtors") filed voluntary
petitions under chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of New York (the "Court").
Despite nearly $300 million in net cost reductions since the middle of 1998, we
were unable to overcome the injury caused by record levels of unfairly-traded
steel imports and a slowing economy that have severely reduced prices, shipments
and production.  Since mid-1998, our revenues have been reduced about $1.4
billion annually.  The resulting operating losses and negative cash flow
severely impaired our financial condition.  Bethlehem continues to manage its
properties and operate its businesses under Sections 1107 and 1108 of the Code
as a debtor-in-possession. Due to material uncertainties, it is not possible to
predict the length of time the Debtors will operate under chapter 11 protection,
the outcome of the reorganization in general, the effect of the reorganization
on the Debtors' businesses or the recovery by creditors of the Debtors and
equity holders of Bethlehem.

    The events of September 11 contributed to a further weakening in demand for
consumer products that rely on steel, such as automobiles, appliances and new
homes, and to a worsening outlook for near-term performance.  The entire
domestic steel industry is suffering from the onslaught of record steel imports
since 1998.  Thirty steel companies have filed for bankruptcy since December
1997.

    As a result of the chapter 11 filing, there is no assurance that the
carrying amounts of the assets will be realized or that liabilities will be
settled for amounts recorded.  Bethlehem also is continuing to pursue various
strategic alternatives including, among other things, possible consolidation
opportunities, joint ventures with other steel operators, a stand-alone plan of
reorganization and liquidation of part or all of Bethlehem's assets.  Such
alternatives are in an early stage and have not been implemented, nor can there
be any assurance that any such alternatives will be implemented.  After further
consideration of such alternatives and negotiations with various parties in
interest, Bethlehem expects to present a chapter 11 plan, which will likely
cause a material change to the carrying amount of assets and liabilities in the
financial statements.

    There are recent signs that the U.S. economy is beginning to strengthen.
The manufacturing sector appears to have bottomed out in December.  Our order
entry is improving and we, and others in the industry, have announced price
increases for first quarter deliveries.  Although auto sales are expected to be
sluggish in the first half of the year, we anticipate growing strength in the
demand for steel by the middle of the year as the economy continues to improve
and customers replenish depleted inventories.

    In early March, President Bush is expected to announce his actions to
remedy the substantial injury caused to the domestic steel industry by the
flood of imported steel.  Five of six commissioners of the International Trade
Commission recommended tariffs as high as 40 percent to address the injury.  We
believe the imposition of maximum tariffs is appropriate and necessary to
reduce the levels of unfairly-traded steel imports into the United States.  We
also believe that the elimination of inefficient, high cost steel capacity both
here and abroad is essential to better balance global steel demand.

    We have has excellent steel facilities capable of producing high-quality,
low-cost products to serve the requirements of our most demanding customers.
Our goal is to ensure that our competitive facilities remain a key part of the
North American steel industry.  In order to accomplish that, however, we need a
modern, flexible labor agreement with the USWA

                                      17








<PAGE>

and a solution to our almost $5 billion retiree pension and healthcare
obligations.  Chapter 11 provides us with a structured process to achieve those
required changes.

Operating Results
-----------------
    Sales in 2001 were $3.3 billion on steel shipments of 7,782,000 tons
compared to $4.1 billion and 8,546,000 tons shipped in 2000 and $4.0 billion
and 8,416,000 tons shipped in 1999.

    Our net loss for 2001 was $1.9 billion, which included $1.4 billion in
unusual or non-recurring items.  Excluding these items, our net loss
for 2001 was $594 million ($4.87 per diluted share) compared with a loss of
$135 million for 2000 and our loss from operations for 2001 was $494 million
compared with a loss from operations of $96 million for 2000.  Average realized
prices, on a constant mix basis, declined by about 8 percent for the year 2001
and shipments were lower by about 764,000 tons.  Despite a 12 percent reduction
in raw steel production, we were able to reduce our overall cost structure
sufficiently that our operating costs per net ton shipped was about the same in
2000 and 2001.

        Unusual or non-recurring items (in millions) included:

                                                              2001
                                                           --------

          Fully Reserve Deferred Tax Asset                 $  985.0
          Unusual Items:
            Impairment of Goodwill                            317.0
            Loss on Closure of Lackawanna Coke                 40.0
            Impairment of Chicago Cold Rolling Facility        15.2
            Impairment of Burns Harbor 110" Plate Mill         11.4
            Employee Termination Costs                          7.5
            Gain on the Sale of MBR                           (22.2)
            Loss on Closure of MetalSite                        3.4
                                                           ---------
              Total Unusual Items                             372.3

          Total Unusual or Non-recurring Items             $1,357.3
                                                           =========

    We incurred financial accounting losses in 1999 through 2001.  Our results
during 2001 were worse than we anticipated at the beginning of the year and we
will not be able to use any of the net operating loss carryforward ("NOL")
expiring in 2001 in our federal income tax return for the year.  In the absence
of specific favorable factors, application of FASB Statement No.  109, issued in
1992, and its subsequent interpretations require a 100 percent valuation
allowance for any deferred tax asset when a company has cumulative financial
accounting losses, excluding unusual items, over several years.  Accordingly,
during 2001, after consideration of these factors, we provided a 100 percent
valuation allowance for our deferred tax asset increasing our non-cash provision
for income taxes for 2001 by $985 million.  We will continue this policy in the
future until, at a minimum, a chapter 11 plan of reorganization is confirmed.

    At year-end, as a result of the chapter 11 filing and the extremely
competitive steel market conditions, we analyzed our ability to recover the
carrying value of our steel assets and facilities.  We determined that the
carrying value of certain assets exceeded the related expected future cash
flows.  Accordingly, we recognized an impairment loss of (1) $317 million for
goodwill acquired in the 1998 Lukens merger, (2) $11 million for the 110-inch
plate mill at Burns Harbor which is now expected to remain idle indefinitely
and (3) $15 million for our Chicago Cold Rolling facility which substantially
reduced operations during the fourth quarter.  Also, we identified
approximately 300 non-represented salaried positions that will be eliminated
and recognized an $8 million charge for related employee benefit changes.

                                      18








<PAGE>
    Earlier in 2001, we (1) discontinued our Lackawanna Coke operations
resulting in a charge of $40 million principally to recognize related employee
benefit costs, (2) sold our interest in MBR, a Brazilian iron ore company, for
$4 million in cash and $19 million in credits against future iron ore purchases
($8 million of which has already been used) resulting in a $22 million gain and
(3) wrote-off our equity investment in MetalSite, an internet marketplace for
steel that ceased operations, resulting in a charge of $3 million.

    Operating results for 2001 include approximately $27 million of higher
costs resulting from an unscheduled outage and repair of "D" Blast Furnace at
our Burns Harbor Division.

    Interest expense during 2001 increased due to an increase in average
borrowings during the year and the absence of capitalized interest on
construction projects in 2001, which was partially offset by about $9 million
of contractual interest on unsecured debt not recorded in accordance with SOP
90-7.  (See Note B.  Reorganization Under Chapter 11).

    Our net loss for 2000 was $118 million.  This net loss includes unusual net
gains totaling $21 million.  During 2000, Metropolitan Life Insurance Company
converted to a mutual company owned by its policy owners to a publicly held
company.  As a policyholder, we received $18 million in cash in relation
to this conversion, all of which was recognized as a gain.  Also, we sold our
interest in Presque Isle Corporation for $10 million resulting in a $9 million
gain.  We recognized a $6 million charge for the closing of our Burns Harbor
Division ingot teeming and slab mill operations.  Excluding the effects of
these unusual items, 2000's net loss was $135 million or $1.34 per diluted
share.  The net loss for 1999 was $183 million, or $1.72 per diluted share.

    Operating profits improved in 2000 from 1999 principally from lower costs.
While costs per ton increased significantly in the second half of 2000 from
lower production volume and higher energy costs (principally natural gas),
costs were lower because of cost initiatives that had been underway throughout
the corporation.  Also, 1999 included about $70 million of costs related to (1)
relining the "L" Blast Furnace and other modernization and maintenance outages
at Sparrows Point and (2) the temporary idling of our majority owned iron ore
operation located in Hibbing, Minnesota.  These lower costs in 2000 were
partially offset by higher wage, retirement benefit and energy costs, start-up
costs at the Sparrows Point cold mill and a loss from a fire at our
Coatesville, Pennsylvania, plate operations.

    The effects on sales of changes in average realized steel prices, shipments
and product mix during the last two years were as follows:

Increase (decrease) from prior year:


                                  2001         2000
                                  ----         ----
           Realized Prices         (8)%          -%
           Shipments               (9)           2
           Product Mix             (2)           -
                                  -----        ----
                                  (19)%          2%
                                  =====        ====

    Raw steel production was 8.8 million tons in 2001, 10.0 million tons in
2000 and 9.4 million tons in 1999.  Production was lower during 2001 due to
operational cutbacks based on a weak steel market and from the unscheduled two
month outage of "D" Blast Furnace at Burns Harbor.  Despite this 10 percent
decline in raw steel production, we were able to maintain our 2001 cost per net
ton shipped at about the same level as 2000.  Production was lower in 1999 due
to the "L" Blast Furnace at Sparrows Point being out of service for 10 weeks for
a reline.

                                      19








<PAGE>

    The Burns Harbor Division shipped about 4.1 million tons in 2001 compared
with 4.6 million tons in 2000 and 1999.  Burns Harbor's 2001 operating results
declined significantly from 2000 principally due to lower prices and, to a
lesser extent lower shipments and an increase in costs.  Cost increases
resulted from lower production volumes and increases in pension costs, energy
and raw material prices, and an unscheduled outage of "D" Blast Furnace.

    The Sparrows Point Division (which included the Coatesville and
Conshohocken plate operations) shipped about 3.4 million tons in each of the
last three years.  Sparrows Point's 2001 operating results declined
significantly, principally from lower prices which were partially offset by an
improvement in costs.  2000 included start-up costs related to the new cold
mill facility and losses due to fire at the Coatesville facility.  Other cost
improvements occurred through reduced spending and improved productivity.

    Pennsylvania Steel Technologies ("PST") shipped about .3 million tons in
2001 compared with .5 million tons in 2000 and .4 million tons in 1999.  Results
for PST in 2001 declined due to a decline in shipments and an increase in costs
resulting from lower shipment and production volumes.

    During 2002, we are reorganizing our division structure. We are combining
our Coatesville and Conshohocken facilities with PST to create a new
Pennsylvania Division.

Percentage of Bethlehem's Net Sales
By Major Product


                                               2001      2000      1999
                                               ----      ----      ----
Steel mill products:
  Hot-rolled sheets                            15.3%     14.9%     13.5%
  Cold-rolled sheets                           15.2      18.9      18.4
  Coated sheets                                29.0      27.9      29.9
  Tin mill products                             7.9       6.3       7.0
  Plates                                       21.6      20.5      20.4
  Rail products                                 3.5       3.9       2.6
  Other steel mill products                     1.5       2.0       2.5
Other products and services
  (including raw materials and freight)         6.0       5.6       5.7
                                              ------    ------    ------
                                              100.0%    100.0%    100.0%
                                              ======    ======    ======

    Since 1999, our largest customer, General Motors Corporation, accounted for
about 10 percent of our consolidated sales.

Percentage of Steel Mill Product Shipments
By Principal Market
(Based on tons shipped)

                                               2001      2000      1999
                                               ----      ----      ----

Service Centers, Processors and Converters
  (including semifinished)                     52.9%     51.0%     49.7%
Transportation
(including automotive)                         19.0      20.3      21.3
Construction                                   13.4      13.5      12.9
Containers                                      5.9       5.5       5.4
Machinery                                       2.9       4.1       4.2
Other                                           5.9       5.6       6.5
                                              ------    ------    ------
                                              100.0%    100.0%    100.0%
                                              ======    ======    ======

                                           20







<PAGE>

Liquidity and Cash Flow

    Total liquidity (cash, cash equivalents and funds available under our bank
credit arrangements) was $276 million at December 31, 2001 and $315 million at
December 31, 2000.  In conjunction with the filing for chapter 11 protection,
we obtained a $450 million debtor-in- possession ("DIP") financing with General
Electric Capital Corporation ("GECC") during the fourth quarter.  Initial
proceeds from the financing were used to repurchase accounts receivable that
had been sold under a previous receivable facility.  As part of the GECC
financing, the $290 million that Bethlehem had borrowed under its previous
inventory credit facility remains outstanding as secured term debt.

    In 2001, $208 million in cash was used by operating activities compared with
$288 million in cash being provided by operations in 2000.  Cash used by
operations, before working capital and funding postretirement benefits, was
$343 million in 2001 from our operating loss before unusual items.  Working
capital used $33 million as declines in inventory were offset by the
requirement to repurchase receivables through our GECC financing after our
chapter 11 filing.  Also, there were about $221 million in accounts payable
subject to compromise at December 31, 2001.

    Prior to 1999, we had contributed amounts to our pension fund substantially
in excess of amounts required under current law and regulations.  Because of
these contributions and better than assumed earnings performance on our pension
fund assets through 2000, we built a funding standard credit balance that
allowed us to defer pension funding for 2000 through 2002.  We expect our 2002
pension expense to be about $150 million.

    During 2000, our postretirement healthcare and life insurance expense
("OPEB") increased as a result of required changes to our actuarial
assumptions, see Note G, Postretirement Benefits, to the Consolidated Financial
Statements.  We paid $29 million of retiree health and life insurance benefits
in 2001 from existing trust fund assets compared with about $63 million in 2000.
This reduced the amount of such benefits required to be paid directly by
Bethlehem in 2001 and 2000 to $188 and $130 million.  In the future, all OPEB
benefits will be paid directly by Bethlehem until certain restrictions on
remaining trust fund assets are removed.  In 2002, we expect to pay directly
about $225 million.

    Cash provided from operating activities in 2000 increased to $288 million
from $226 million in 1999.  The improvement resulted from a reduced operating
loss and reduced funding of postretirement benefits, offset by significant
reductions in cash provided by working capital.

    We reduced capital expenditures to $89 million in 2001 to preserve
liquidity, compared with $224 million in 2000 and $557 million in 1999.  In
2000, we completed two projects started in prior years at Sparrows Point, the
cold mill complex and the conversion of the continuous slab caster to a
wide-slab caster.  In addition, we completed construction of our automotive
quality coating line joint venture, Columbus Coatings Company, financed by a
construction loan to the venture, and entered into an operating lease for
pulverized coal injection for our "L" Blast Furnace at Sparrow Point.

    At December 31, 2001, the estimated cost of completing all authorized
capital expenditures was about $210 million, compared with $295 million at
December 31, 2000.  We expect all authorized capital expenditures to be
completed during the next three years.  These amounts exclude the previously
announced "D" Blast Furnace reline and No.  1 Caster modernization at Burns
Harbor which have been deferred until 2005.

    Asset sales in 2001 included $33 million from the sale of the South Buffalo
Railway Company, $3 million of which has been placed in escrow pending
resolution of contingent

                                      21








<PAGE>




claims.  There was no gain or loss on the transaction because any amounts had
been recognized in a previous charge.  We received $4 million from the sale of
MBR, a Brazilian iron ore company.  The sale included $19 million in credits
for future iron ore purchases (of which $8 million have already been used)
resulting in a $22 million gain.  We also received $8 million from the sale of
environmental credits and allowances.  Asset sales in 2000 included $18 million
in proceeds from the conversion of Metropolitan Life Insurance Company and $10
million from the sale of our ownership interest in the Presque Isle, a
limestone operation.  Proceeds in 2000 also included $78 million of proceeds
from the sale and leaseback of our wide slab caster at Sparrows Point and one
lake ore vessel.

    New borrowings in 2001 included $189 million under our inventory credit
agreement, all of which occurred prior to our chapter 11 filing and $219
million under the GECC financing arrangement which was used to repurchase the
accounts receivable.  Debt repayments in 2001 included $14 million under our
GECC financing, $39 million under our inventory credit agreement and $39
million for the outstanding balance of our 8 3/8% debentures.

    The LTV Corporation, which filed for chapter 11 bankruptcy protection in
December 2000 is our partner in the Columbus Coatings Company ("CCC") joint
venture.  CCC is an automotive quality, hot-dipped galvanized coating line that
began operation in 2001 to provide coating services to Bethlehem and LTV.  In
December 2001, LTV ceased operations and is trying to sell its assets,
including its share of CCC.  CCC continues to operate and provide coating
services to Bethlehem and others.

    CCC's construction costs were financed in part with a loan under a 1999
agreement with a group of lenders.  Both Bethlehem and LTV guaranteed the full
amount of the construction loan, which at December 31, 2001, had a balance of
$113 million.  After LTV's chapter 11 filing, 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.  During 2001,
Bethlehem and LTV both contributed capital to the joint venture to make any
required principal and interest payments.  LTV has informed us that they no
longer intend to make any additional capital contributions for any amounts
required under the loan agreements as of December 31, 2001, and beyond.

    Because of LTV's and our chapter 11 filings, CCC, LTV and Bethlehem are in
default under the construction loan agreements which would allow the lenders to
call the full amount of the loan.  We believe that the market value of CCC
exceeds the loan amount.  We are working with the CCC lenders and certain of
the potential buyers of LTV's ownership in CCC to resolve open issues.  We
believe these issues can be resolved without any additional significant impact
on our liquidity.

    Under bankruptcy law, actions by creditors to collect indebtedness owed by
the Debtors prior to October 15, 2001 (pre-petition) are stayed and certain
other pre-petition contractual obligations may not be enforced against the
Debtors.  Except for secured debt and capital lease obligations, all recorded
pre-petition liabilities of the Debtors have been classified as liabilities
subject to compromise in the chapter 11 process.  The Court authorized, but did
not require, payments of certain pre-petition wages, employee benefits and
other obligations.  Net changes in pension, other postemployment benefits and
certain other accrued liabilities since October 15, 2001, are included in
liabilities subject to compromise.  Payments of approximately $108 million have
been made on liabilities subject to compromise, primarily for wages, active and
retiree health care benefits and for other employee related costs.  Liabilities
subject to compromise (in millions) at December 31, 2001 follows:

                                      22








<PAGE>


     Other post employment benefits       $2,005.7
     Pension                               1,624.0
     Unsecured debt                          526.7
     Accounts payable                        220.8
     Accrued employment costs                270.6
     Other accrued liabilities               152.8
     Accrued taxes and interest               77.5
                                          --------
     Total                                $4,878.1
                                          ========

    Currently, we expect to maintain adequate financial resources during the
year 2002 while pursuing our strategic options.

Derivative Financial Instruments and Related Market Risk
--------------------------------------------------------

    We are exposed to certain risks associated with the change in foreign
currency rates, interest rates and commodity prices.  We seek to minimize the
potential adverse impact of those market risks through the use of appropriate
management techniques including derivative financial instruments.  Although
Bethlehem occasionally purchases goods and services denominated in a foreign
currency and has export sales, the amounts involved are not material.

    We are exposed to interest rate risk arising from having certain variable
rate financing arrangements.  In the past, we have used interest rate swaps to
effectively fix a portion of the interest rates on these financings.  We did
not have any interest rate swaps at December 31, 2001.

    We also use derivative financial instruments to manage the price risk for a
portion of our annual requirements for natural gas, zinc and other metals.  As
a result of adopting FASB Statement No.  133, we recorded these contracts on
our balance sheet at January 1, 2001.  The offset was to Stockholders' Equity
and there was no impact to income.  During 2001, the amounts recorded in
Stockholders' Equity were subsequently recorded in earnings.  These
instruments, that have maturity dates that coincide with our expected purchases
of the commodities, allow us to effectively establish our cost for the
commodity at the time we enter into the instrument.  To the extent we have not
entered into derivative financial instruments, our cost will increase or
decrease as the market prices for the commodities rise and fall.  We did not
have any commodity futures contracts at December 31, 2001.

Employees and Employment Costs
------------------------------

    At the end of 2001, we had about 13,100 employees compared with about 14,700
employees at the end of 2000 and 15,500 employees at the end of 1999.  About 80
percent of our employees are covered by our labor agreements with the United
Steelworkers of America ("USWA").

    On August 1, 1999, Bethlehem and the USWA entered into a five-year labor
agreement covering USWA represented employees at Bethlehem's facilities in
Burns Harbor, Lackawanna, Sparrows Point, Coatesville and Steelton.  The Burns
Harbor and Sparrows Point Divisions continue to be covered by one agreement,
while separate agreements were continued for PST and the Coatesville facility.
During 2000, an agreement was reached with the USWA for our Conshohocken
facility.

    As a result of our chapter 11 filing, we have entered discussions with the
USWA to modify our existing contract, particularly with respect to increasing
productivity by establishing more flexible work practices and implementing new
initiatives to significantly reduce our healthcare obligations.

                                      23








<PAGE>

    The main labor agreement, which expires August 1, 2004, provides for wage
increases of $2 per hour over the life of the contract and improved pension
benefits by $.50 per hour on February 1, 2000, $.50 per hour on August 1,
2001 and $1.00 per hour on February 1, 2003.

    Under other provisions of the labor agreements, we are required to pay
"shortfall amounts" each year up to 10 percent of the first $100 million and 20
percent in excess of $100 million of consolidated income before taxes, unusual
items and expenses applicable to the shortfall plan.  Shortfall amounts arise
when employees terminate employment and the ESOP Preference Stock, that is held
in trust for reimbursement of wage and benefit reductions in prior years, is
converted into Common Stock and sold for amounts less than the stated value of
the Preference Stock ($32 for Series A and $40 for Series B).  Shortfall
requirements had been averaging about $6 million per year, but we did not make
any shortfall payments during 2000 or 2001 and do not anticipate paying any in
2002 for 2001.  The amount of shortfall in arrears is about $15 million.  We
issued about 19,000 shares of Series B Preference Stock in 2001 and about
80,000 shares in 2000 to a trustee for the benefit of employees for 1999 and
1998, respectively.  We do not expect to issue any shares in early 2002 for the
2001 plan year.

Employment Cost summary
(Dollars in millions)

                                 2001        2000        1999
                             --------    ---------     --------
Salaries and Wages           $    708    $    818      $  857
Employee Benefits:
  Pension Plans:
    Current Service                60          64          60
    Past Service                   35          (9)        (20)
  Medical Insurance:
    Actives and Dependents        103          94          91
    Total OPEB                    268         264         200
  Payroll Taxes                    62          70          73
  Workers' Compensation            13          12          12
  Savings Plan and Other           16          18          18
                             --------    ---------     --------
Total Benefit Costs               557         513         434
                             --------    ---------     --------
Total Employment Costs         $1,265      $1,331      $1,291
                             ========    =========     ========
Environmental Matters

    We are subject to various federal, state and local environmental laws and
regulations concerning, among other things, air emissions, wastewater
discharges and solid and hazardous waste disposal.  During the five years ended
December 31, 2001, we spent about $65 million for environmental control
equipment.  Expenditures for new environmental control equipment totaled
approximately $10 million in 2001, $13 million in 2000 and $11 million in 1999.
The costs incurred in 2001 to operate and maintain existing environmental
control equipment were approximately $94 million (excluding interest costs but
including depreciation charges of $14 million) compared with $104 million in
2000 and $115 million in 1999.

    Bethlehem and federal and state regulatory agencies conduct negotiations to
resolve differences in interpretation of certain environmental control
requirements.  In some instances, those negotiations are held in connection
with the resolution of pending environmental proceedings.  We believe that
there will not be any significant curtailment or interruptions of any of our
important operations as a result of these proceedings and negotiations.  We
cannot predict the specific environmental control requirements that we will
face in the future.  Based on existing and anticipated regulations promulgated
under presently enacted legislation, we currently estimate that capital
expenditures for environmental control in the near-term will average about $60
million per

                                      24








<PAGE>


year.  However, estimates of future capital expenditures and operating costs
required for environmental compliance are subject to numerous uncertainties,
including the evolving nature of regulations, possible imposition of more
stringent requirements, availability of new technologies and the timing of
expenditures.

    Although it is possible that our future results of operations, in
particular quarterly or annual periods, could be materially affected by the
future costs of environmental compliance, we believe that the future costs of
environmental compliance will not have a material adverse effect on our
consolidated financial position or on our competitive position with respect to
other integrated domestic steelmakers that are subject to the same
environmental requirements.



ITEM 7A.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                MARKET RISK.

    See "Derivative Financial Instruments and Related Market Risk" under ITEM 7
above.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

    Bethlehem's Financial Statements and the accompanying Notes that are filed
as part of this Report are listed under "PART IV, ITEM 14.  EXHIBITS, FINANCIAL
STATEMENT SCHEDULES AND REPORTS ON FORM 8-K" and are set forth on pages F-1
through F-7 immediately following the signature pages of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE.

    None.





                                      25








<PAGE>
                                   PART III

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

    In addition to the information under the caption "Executive Officers of the
Registrant" in "PART I" of this Report, the information required by this Item
will be filed with the Securities and Exchange Commission as an amendment to
this Report.

ITEM 11.        EXECUTIVE COMPENSATION.

    The information required by this Item will be filed with the Securities and
Exchange Commission as an amendment to this Report.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                AND MANAGEMENT.

    The information required by this Item will be filed with the Securities and
Exchange Commission as an amendment to this Report.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The information required by this Item will be filed with the Securities and
Exchange Commission as an amendment to this Report.





                                      26








<PAGE>

                                    PART IV

ITEM 14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                        ON FORM 8-K.

(a)     Documents filed as part of this Report:

        The following is an index of the financial statements, schedules and
exhibits included in this Report or incorporated herein by reference.

        (1) Financial Statements.

BETHLEHEM STEEL CORPORATION AND CONSOLIDATED SUBSIDIARIES

<TABLE>
<CAPTION>
<S>
<C>




Page
                                                                                 ----

Consolidated Statements of Operations for years 2001, 2000 and 1999................  F-1

Consolidated Balance Sheets as of December 31, 2001 and 2000.......................  F-2

Consolidated Statements of Cash Flows for the years 2001, 2000 and 1999............  F-3

Notes to Consolidated Financial Statements (Including Quarterly Financial Data)....  F-4

Report of Independent Auditors (covering the Consolidated Financial Statements
and the Consolidated Financial Statement Schedule).................................. F-5

1869:


        (2) Consolidated Financial Statement Schedules.

II -- Valuation and Qualifying Accounts and Reserves, years ended
        December 31, 2001, 2000 and
1999........................................ F-7
</TABLE>
    Schedules not included have been omitted because they are not applicable or
the required information is shown in the consolidated financial statements or
notes.

    Separate financial statements of subsidiaries not consolidated and 50
percent or less owned persons accounted for by the equity method have been
omitted because considered in the aggregate as a single subsidiary they do not
constitute a significant subsidiary.

    (3) Exhibits.

    The following is an index of the exhibits included in this Report or
incorporated herein by reference.

(3)(a)  Second Restated Certificate of Incorporation (Incorporated by reference
        from Exhibit (3)(a) to Bethlehem's Annual Report on Form 10-K for the
        year ended December 31, 1998).

   (b)  Amendment to Second Restated Certificate of Incorporation (Incorporated
        by reference from Exhibit(3)(b) to Bethlehem's Annual Report on Form
        10-K for the year ended December 31, 2001).

                                          27








        <PAGE>


   (c)  By-laws of Bethlehem Steel Corporation, as amended October 1, 1999
        (Incorporated by reference from Exhibit 4 to Bethlehem's quarterly
        report on Form 10-Q for the quarter ended September 30, 1999).

(4)(a)  Rights Agreement, dated as of July 29, 1998, between Bethlehem Steel
        Corporation and First Chicago Trust Company of New York (Incorporated
        by reference from Bethlehem's Report on Form 8-K filed August 5, 1998).

   (b)  Amendment No.  1 to the Rights Agreement, dated as of March 17, 1999,
        between Bethlehem Steel Corporation and First Chicago Trust Company of
        New York (Incorporated by reference from Bethlehem's Amended
        Registration Statement on Form 8-A/A filed March 19, 1999).

   (c)  Amendment No.  2 to Rights Agreement, dated as of December 30, 1999,
        between Bethlehem Steel Corporation and First Chicago Trust Company of
        New York (Incorporated by reference from Bethlehem's Amended
        Registration Statement on Form 8-A/A filed December 30, 1999).

   (d)  Inventory Credit Agreement, dated as of September 12, 1995, as amended
        and restated on June 5, 1997, June 19, 1998, and June 17, 1999
        (Incorporated by reference from Exhibit 4(d) to Bethlehem's Annual
        Report on Form 10-K for the year ended December 31, 1999).

   (e)  Revolving Credit and Guaranty Agreement dated as of October 15, 2001
        (Incorporated by reference from Exhibit 4 to Bethlehem's Quarterly
        Report on Form 10-Q for the quarter ended September 30, 2001).

   (f)  Bethlehem is a party to certain long-term debt agreements where the
        amount involved does not exceed 10 percent of Bethlehem's total
        consolidated assets.  Bethlehem agrees to furnish a copy of any such
        agreement to the Commission upon request.

*(10)(a)Excess Benefit Plan of Bethlehem Steel Corporation and Subsidiary
        Companies, as amended September 20, 1995 (Incorporated by reference
        from Exhibit 10 to Bethlehem's Annual Report on Form 10-K for the
        fiscal year ended December 31, 1997).

   *(b) 1988 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated
        by reference from Exhibit 10 to Bethlehem's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1997).

   *(c) 1994 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated
        by reference from Exhibit 10(c) to Bethlehem's Annual Report on Form
        10-K for the year ended December 31, 1998).

   *(d) 1994 Non-Employee Directors Stock Plan of Bethlehem Steel Corporation
        (Incorporated by reference from Exhibit 10(d) to Bethlehem's Annual
        Report on Form 10-K for the year ended December 31, 1998).

   *(e) 1998 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated
        by reference from Exhibit 1 to Bethlehem's Proxy Statement in
        connection with its Annual Meeting of Shareholders held on April 28,
        1998).

   *(f) 2001 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated
        by reference from Exhibit 2 to Bethlehem's Proxy Statement in
        connection with its Annual Meeting of Shareholders held on April 24,
        2001).

   *(g) Special Incentive Compensation Plan of Bethlehem Steel Corporation,
        which is contained in Article Seven of the Second Restated Certificate
        of Incorporation referred to in Exhibit 3(a) to this Report.

                                          28








<PAGE>

   *(h) Supplemental Benefits Plan of Bethlehem Steel Corporation and
        Subsidiary
        Companies, as amended September 20, 1995 (Incorporated by reference
        from Exhibit 10 to Bethlehem's Annual Report on Form 10-K for the
        fiscal year ended December 31, 1997).

   *(i) Post-Retirement Retainer Plan for Non-Officer Directors (Incorporated
        by reference from Exhibit 10 to Bethlehem's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1997).

   (j)  Form of Indemnification Assurance Agreement between Bethlehem Steel
        Corporation and each of its directors and executive officers listed on
        Schedule A thereto.

   (k)  Form of Agreement between Bethlehem Steel Corporation and four executive
        officers.  Additional agreements have been entered into between
        Bethlehem Steel Corporation and 9 other executive officers and
        employees.  These additional agreements are substantially in the form
        of said Agreement except:  (i) the amount of compensation upon
        termination is two rather than three times annual salary and bonus and
        (ii) the additional agreements do not permit the recipient to terminate
        for any reason during the 30-day period following the first anniversary
        of the change in control (Incorporated by reference from Exhibit 10 to
        Bethlehem's quarterly report on Form 10-Q for the quarter ended
        September 30, 1998).

   (l)  Bethlehem Steel Corporation Non-Employee Directors Deferred
        Compensation Plan (Incorporated by reference from Exhibit 10(1) to
        Bethlehem's Annual Report on Form 10-K for the year ended December 31,
        2000).

   (23) Consent of Independent Auditors (included on page F-6 of this Report).

   (24) Power of Attorney.

---------------------
* Compensatory plans in which Bethlehem's directors and executive officers
participate.

(b) Reports on Form 8-K.

    Bethlehem filed the following Current Reports on Form 8-K during and after
the fourth quarter of 2001:

 .  October 2, 2001:  Bethlehem issued a press release concerning certain asset
    sales and the status of a new credit agreement.

 .  October 15, 2001:  Bethlehem announced its chapter 11 filings and set forth
    its unaudited financial statements for the nine-month period ended
    September 30, 2001.

 .  December 4, 2001:  Bethlehem issued a press release confirming that it is
    one of the companies talking with U.S.  Steel about the possibility of a
    major integrated steel industry consolidation.

 .  December 13, 2001:  Bethlehem issued two press releases, one concerning its
    continued listing on the New York Stock Exchange and the other concerning
    certain management changes.

 .  December 28, 2001:  Bethlehem filed a copy of its Consolidated Monthly
    Operating Statement for the period from October 15, 2001 to the end of
    November 2001, as filed with the Bankruptcy Court.

                                        29








    <PAGE>

 .  January 22, 2002:  Bethlehem filed a copy of its Consolidated Monthly
    Operating Statement for the period from December 1 to December 31, 2001, as
    filed with the Bankruptcy Court.

 .  January 23, 2002:  Bethlehem issued a press release announcing its Fourth
    Quarter and Year 2001 Results.



                                        30








    <PAGE>

SIGNATURES


    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Bethlehem Steel Corporation has duly caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 5th day of February, 2002.


                             BETHLEHEM STEEL CORPORATION,


                             By:  /s/ Lonnie A. Arnett
                                  ------------------------------
                                  Lonnie A. Arnett
                                  Vice President and Controller
                                  (principal accounting officer)


    Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf
of Bethlehem Steel Corporation and in the capacities indicated on the 5th day of
February, 2002.


<TABLE>
<CAPTION>
<S>                                    <C>



/s/ Robert S. Miller, Jr.              /s/ Leonard M. Anthony
------------------------------         ------------------------------
Robert S. Miller, Jr.                  Leonard M. Anthony
Chairman and Director                  Senior Vice President
(principal executive officer)          (principal financial officer)


/s/ Lonnie A. Arnett
------------------------------
Lonnie A. Arnett
Vice President and Controller
(principal accounting officer)

                                      31








<PAGE>


/s/ Benjamin R. Civiletti              /s/ Harry P. Kamen
------------------------------         ------------------------------
Benjamin R. Civiletti                  Harry P. Kamen
Director                               Director



/s/ Worley H. Clark                    /s/ William M. Landuyt
------------------------------         ------------------------------
Worley H. Clark                        William M. Landuyt
Director                               Director


/s/ John B. Curcio                     /s/ Shirley D. Peterson
------------------------------         ------------------------------
John B. Curcio                         Shirley D. Peterson
Director                               Director


/s/ Lewis B. Kaden                     /s/ John F. Ruffle
------------------------------         ------------------------------
Lewis B. Kaden                         John F. Ruffle
Director                               Director

</TABLE>


                                 32






<PAGE>

                     Consolidated Statements of Operations
                     -------------------------------------
<TABLE>
<CAPTION>

<S>                                                      <C>          <C>          <C>

                                                                   Year Ended December 31
(Dollars in millions, except per share data)                  2001         2000         1999
-----------------------------------------------------------------------------------------------
Net Sales                                                $  3,334.3   $  4,094.4   $  4,023.2
-----------------------------------------------------------------------------------------------

Costs and Expenses:
  Cost of sales                                             3,468.6      3,816.6      3,822.1
  Depreciation and amortization (Note A)                      253.1        260.3        257.5
  Selling, administration and general expense                 106.4        113.0        122.2
  Unusual items (Note C)                                      372.3        (20.9)          -
-----------------------------------------------------------------------------------------------
Total Costs and Expenses                                    4,200.4      4,169.0      4,201.8
-----------------------------------------------------------------------------------------------

Loss from Operations before Reorganization Items             (866.1)       (74.6)      (178.6)

Reorganization Items (Note B)                                  (8.1)          -            -

Financing Income (Expense):
  Interest and other financing costs (Notes A, B and E)       (93.3)       (75.4)       (51.9)
  Interest income                                               1.9          6.6          8.3
-----------------------------------------------------------------------------------------------

Loss Before Income Taxes                                     (965.6)      (143.4)      (222.2)

Benefit (Provision) for Income Taxes (Note D)                (984.0)        25.0         39.0
-----------------------------------------------------------------------------------------------

Net Loss                                                   (1,949.6)      (118.4)      (183.2)

Dividend Requirements on Preferred and Preference Stock        40.5         40.7         41.2
-----------------------------------------------------------------------------------------------

Net Loss Applicable to Common Stock                      $ (1,990.1)  $   (159.1)      (224.4)
===============================================================================================

Net Loss per Common Share (Note K):
  Basic and Diluted                                      $   (15.30)       (1.21)       (1.72)
===============================================================================================
The accompanying Notes are an integral part of the Consolidated Financial Statements.
</TABLE>
                                      F-1




<PAGE>

                          Consolidated Balance Sheets
                          ---------------------------
<TABLE>
<CAPTION>
<S>                                                                 <C>           <C>
                                                                            December 31
(Dollars in millions, except per share data)                             2001         2000
---------------------------------------------------------------------------------------------
Assets
Current Assets:
  Cash and cash equivalents (Note A)                                $     104.0   $    109.7
  Receivables (Note E)                                                    350.4        152.1
  Inventories (Notes A and E)
    Raw materials and supplies                                            259.5        303.3
    Finished and semifinished products                                    465.8        570.9
---------------------------------------------------------------------------------------------
    Total Inventories                                                     725.3        874.2
  Other current assets                                                     22.8         10.4
---------------------------------------------------------------------------------------------
Total Current Assets                                                    1,202.5      1,146.4
Investments and Miscellaneous Assets                                      129.6        136.1
Property, Plant and Equipment, less accumulated
  depreciation of $4,367.6 and $4,363.5 (Note A)                        2,686.9      2,870.5
Deferred Income Tax Asset - net (Note D)                                     -         985.0
Goodwill (Notes A and C)                                                     -         329.0
Intangible Pension Asset  (Note G)                                        225.0           -
---------------------------------------------------------------------------------------------
Total Assets                                                        $   4,244.0      5,467.0
=============================================================================================

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
  Accounts payable                                                  $     150.1        355.1
  Accrued employment costs                                                 34.4        137.2
  Other postretirement benefits (Note G)                                    3.5        175.0
  Accrued taxes (Note D)                                                   14.4         59.7
  Debt and capital lease obligations - current (Note E)                    19.3         55.4
  Other current liabilities                                                49.9        144.8
---------------------------------------------------------------------------------------------
Total Current Liabilities                                                 271.6        927.2
Long-term Debt and Capital Lease Obligations (Note E)                     628.2        798.0
Deferred Gain (Note F)                                                    103.2        126.2
Pension Liability (Note G)                                                   -         442.0
Other Postretirement Benefits (Note G)                                     37.8      1,780.0
Other Long-term Liabilities                                                 5.6        273.6

Liabilities Subject to Compromise (Note B)                              4,878.1           -

Stockholders' Equity (Deficit) (Notes H, I and J):
  Preferred Stock -- at $1 per share par value (aggregate liquidation
    preference of $467.9); Authorized 20,000,000 shares                    11.4         11.6
  Preference Stock -- at $1 per share par value (aggregate liquidation
    preference of $70.6); Authorized 20,000,000 shares                      2.0          2.1
  Common Stock -- at $1 per share par value;
    Authorized 250,000,000
    Issued 135,780,069 and 134,623,707 shares                             135.8        134.6
  Common Stock -- Held in treasury 4,898,134 and 4,850,953
    shares at cost                                                        (65.9)       (65.7)
  Additional paid-in capital                                            1,908.2      1,926.8
  Accumulated other comprehensive income                                (833.0)           -
  Accumulated deficit                                                 (2,839.0)       (889.4)
---------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit)                                  (1,680.5)      1,120.0
---------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity (Deficit)               $   4,244.0       5,467.0
=============================================================================================
</TABLE>


The accompanying Notes are an integral part of the Consolidated
Financial Statements.

                                      F-2




<PAGE>


                     Consolidated Statements of Cash Flows
                     -------------------------------------
<TABLE>
           <CAPTION>
           <S>                                                    <C>         <C>         <C>
                                                               Year Ended December 31
(Dollars in millions)                                        2001       2000       1999
------------------------------------------------------------------------------------------


2284:
Operating Activities:
  Net Loss                                               $(1,949.6)   $(118.4)   $(183.2)
  Adjustments for items not affecting cash
  from operating activities:
    Deferred income taxes (Note D)                           984.0      (26.0)     (39.0)
    Depreciation and amortization (Note A)                   253.1      260.3      257.5
    Unusual items (Note C)                                   372.3      (20.9)        -
    Recognition of deferred gains                            (22.7)     (17.1)     (18.6)
    Reorganization items (Note B)                              8.1         -          -
    Litigation recovery                                       13.0         -          -
    Other - net                                               (1.9)      19.1       28.8
  Working capital (excluding investing and
  financing activities):
    Receivables - operating                                    9.6       81.2      (65.7)
    Receivables - financing (Note E)                        (212.0)        -        70.0
    Inventories                                              148.7       (9.4)     175.7
    Accounts payable                                          25.1      (45.2)      10.8
    Employment costs and other                                (4.6)       1.0      (24.7)
  Funding Postretirement Benefits (Note G):
    Pension less (more) than expense                          94.5       29.0       (5.0)
    Retiree healthcare and life insurance
      benefits less than expense                              83.0      134.0       20.0
------------------------------------------------------------------------------------------
Cash Provided from (used by) Operations Before
  Reorganization Items                                      (199.4)     287.6      226.6
------------------------------------------------------------------------------------------
Reorganization Items                                          (8.1)        -          -
------------------------------------------------------------------------------------------
Cash Provided from (used by) Operating Activities           (207.5)     287.6      226.6
------------------------------------------------------------------------------------------
Investing Activities:
  Capital expenditures                                       (89.2)    (224.3)    (557.0)
  Cash proceeds from asset sales and other                    47.5      128.0      177.0
------------------------------------------------------------------------------------------
Cash Used for Investing Activities                           (41.7)     (96.3)    (380.0)
------------------------------------------------------------------------------------------
Financing Activities:
  Borrowings (Note E)                                        408.8      132.3      249.7
  Debt and capital lease payments (Note E)                  (108.9)    (226.7)     (65.1)
  Cash dividends paid (Note J)                               (20.2)     (40.4)     (40.4)
  Other payments                                             (36.2)     (41.3)     (29.2)
  Purchase of Common Stock                                      -        (4.9)        -
------------------------------------------------------------------------------------------
Cash Provided from (Used for) Financing Activities           243.5      (181.0)    115.0
------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents          (5.7)       10.3     (38.4)
Cash and Cash Equivalent - Beginning of Period               109.7        99.4     137.8
------------------------------------------------------------------------------------------
                         - End of Period                $    104.0    $  109.7   $  99.4
==========================================================================================
Supplemental Cash Flow Information:
Interest paid, net of amount capitalized                 $    92.5    $   68.8   $  46.1
Income taxes paid (received) - net (Note D)                   (1.4)        1.4       0.7
Capital lease obligations incurred                             5.2         5.3       7.9
Debt assumed in purchase combination                          18.9          -         -
==========================================================================================
</TABLE>

The accompanying Notes are an integral part of the Consolidated
Financial Statements.

                                      F-3




                                    <PAGE>




Notes to Consolidated Financial Statements
------------------------------------------------------------------------------

                            A.  ACCOUNTING POLICIES

Reorganization Under Chapter 11 - On October 15, 2001, Bethlehem and 22 of its
-------------------------------
wholly owned subsidiaries filed voluntary petitions for reorganization under
chapter 11 of the United States Bankruptcy Code.  See Note B, Reorganization
                                                              --------------
Under Chapter 11 for a discussion of the filing and its impact on these
----------------
financial statements.


Principles of Consolidation - The consolidated financial statements include the
---------------------------
accounts of Bethlehem Steel Corporation and all majority owned subsidiaries and
joint ventures.


Cash and Cash Equivalents - Cash equivalents consist primarily of overnight
-------------------------
investments, certificates of deposit and other short-term, highly liquid
instruments generally with original maturities at the time of acquisition of
three months or less.  Cash equivalents are stated at cost plus accrued
interest, which approximates market.

Inventories - Inventories are valued at the lower of cost (principally FIFO) or
-----------
market.

Property, Plant and Equipment - Property, plant and equipment is stated at
-----------------------------
cost.  Maintenance, repairs and renewals that neither materially add to the
value of the property nor appreciably prolong its life are charged to expense.
Gains or losses on dispositions of property, plant and equipment are recognized
in income.  Interest is capitalized on significant construction projects and
totaled none in 2001, $12 million in 2000 and $26 million in 1999.

Our property, plant and equipment by major classification is:

(Dollars in Millions)                               December 31
------------------------------------------------------------------------
                                               2001          2000
                                            ----------    -----------
Land (net of depletion)                     $    30.3     $     31.2
Buildings                                       666.0          677.4
Machinery and equipment                       6,224.3        6,295.6
Accumulated depreciation                     (4,367.6)      (4,363.5)
                                            ----------    -----------
                                              2,553.0        2,640.7
Construction-in-progress                        133.9          229.8
                                            ---------     ----------
  Total                                     $ 2,686.9     $  2,870.5
                                            =========     ==========
 ------------------------------------------------------------------------

Depreciation - Depreciation is based upon the estimated useful lives of each
------------
asset group.  That life is 18 years for most steel producing assets.  Steel
producing assets, other than blast furnace linings, are depreciated on a
straight-line basis adjusted by an activity factor.  This factor is based on
the ratio of production and

                              F-4 (Page 1 of 20)





<PAGE>


shipments for the current year to the average production and shipments for the
current and preceding four years at each operating location.  Annual
depreciation after adjustment for this activity factor is not less than 75% or
more than 125% of straight-line depreciation.  Depreciation after adjustment
for this activity factor was $24 million less than straight-line in 2001, $9
million less than straight-line in 2000 and $10 million less than straight-line
in 1999.  Through December 31, 2001, $29 million less accumulated depreciation
has been recorded under this method than would have been recorded under
straight-line depreciation.  The cost of blast furnace linings is depreciated
on a unit-of-production basis.

Amortization - Goodwill was amortized over a 30-year life using the
------------
straight-line method.  Amortization was $12 million in 2001, 2000 and 1999.
See Note C, Asset Impairment and Unusual Items.
            ----------------------------------

Asset Impairment - We periodically evaluate the carrying value of long-lived
----------------
assets when events and circumstances warrant such a review.  A long-lived asset
is considered impaired when the anticipated undiscounted future cash flows from
a logical grouping of assets is less than its carrying value.  In that event,
we recognize a loss equal to the amount by which the carrying value exceeds the
fair market value of assets less any estimated disposal costs.  See Note C,
Asset Impairment and Unusual Items.
----------------------------------

Foreign Currency, Interest Rate and Commodity Price Risk Management - On
-------------------------------------------------------------------
January 1, 2001, we adopted FASB Statement No.  133, Accounting for Derivative
                                                     -------------------------
Instruments and Hedging Activities.  Adopting this standard had no effect on
----------------------------------
net income.  Amounts recognized on the balance sheet at adoption were
subsequently recorded in earnings.

Periodically, we enter into financial contracts to manage risks.  We use
foreign currency exchange contracts to manage the cost of firm purchase
commitments for capital equipment or other purchased goods and services
denominated in a foreign currency.  We use interest rate swap agreements to fix
the interest rate on certain floating rate financings.  We use commodity
contracts to fix the cost of a portion of our annual requirements for natural
gas, zinc and other metals.  Generally, foreign currency and commodity
contracts are for periods of less than a year.  At December 31, 2001, we had no
open derivative financial contracts.

Environmental Expenditures - Environmental expenditures that increase the life
--------------------------
or efficiency of property, plant and equipment, or that will reduce or prevent
future environmental contamination are capitalized.  Expenditures that relate
to existing conditions caused by past operations and have no significant future
economic benefit are expensed.  Environmental expenses are accrued at the time
the expenditure becomes probable and the cost can be reasonably estimated.  We
do not discount any recorded obligations for future remediation expenditures to
their present value nor do we record recoveries of environmental remediation
costs from insurance carriers and other third parties, if any, as assets until
their receipt.

Revenue Recognition - We recognize substantially all revenues when products are
-------------------
shipped to customers and all substantial risks of ownership change.

Use of Estimates - In preparing these financial statements, we make estimates
----------------
and use assumptions that affect some of the reported amounts and disclosures.
See, for example, Note B, Reorganization Under Chapter 11; Note D, Taxes; Note
                          -------------------------------
F, Commitments and Contingent Liabilities; and Note G, Postretirement Benefits.
   --------------------------------------              -----------------------
In the future, actual amounts received or paid could differ from those
estimates.

                              F-4 (Page 2 of 20)

<PAGE>


Reclassifications - Presentation of certain amounts in prior years have been
-----------------
revised to be consistent with the current year.

New Accounting Pronouncements - During 2001, the Financial Accounting Standards
-----------------------------
Board issued Statement No.  143 Accounting for Asset Retirement Obligations.
                                -------------------------------------------
The Statement requires the recognition of a liability and an asset for the
estimated cost of disposal as part of the initial cost of a long-lived asset
and subsequent amortization of the asset to expense using a systematic and
rationale method.  Bethlehem will adopt this Statement on January 1, 2003 and
currently cannot reasonably estimate the effect of adoption of this Statement
on our financial position or results of operations.


During 2001 the Financial Accounting Standards Board issued Statement No.  144,
Accounting for the Impairment or Disposal of Long-Lived Assets.  This Statement
                   -------------------------------------------
establishes a single accounting approach for measuring impairment of long-lived
assets, including a segment of a business accounted for as a discontinued
operation whether sold or disposed of by other means.  Bethlehem adopted this
Statement on January 1, 2002, and it had no financial impact.

                              F-4 (Page 3 of 20)











<PAGE>

                      B.  REORGANIZATION UNDER CHAPTER 11

    On October 15, 2001, Bethlehem Steel Corporation and 22 of its wholly owned
subsidiaries (collectively, the Debtors) filed voluntary petitions for
reorganization under chapter 11 of the United States Bankruptcy Code (the
Code)in the United States Bankruptcy Court for the Southern District of New
York (the Court).  The wholly owned subsidiaries that did not file for chapter
11 reorganization are not material in relation to Bethlehem's consolidated
financial position and results of operations.  Bethlehem continues to manage
its properties and operate its businesses under Sections 1107 and 1108 of the
Code as a debtor-in-possession.

    These consolidated financial statements have been prepared in conformity
with generally accepted accounting principles on a going concern basis, which
contemplates continuity of operations, realization of assets and payment of
liabilities.  Under bankruptcy law, actions by creditors to collect
indebtedness owed by the Debtors prior to October 15, 2001 (pre-petition) are
stayed and certain other pre-petition contractual obligations may not be
enforced against the Debtors.  As a result of the chapter 11 filing, there is
no assurance that the carrying amounts of the assets will be realized or that
liabilities will be settled for amounts recorded.  Bethlehem also is continuing
to pursue various strategic alternatives including, among other things,
possible consolidation opportunities, joint ventures with other steel
operators, a stand-alone plan of reorganization and liquidation of part or all
of Bethlehem's assets.  Such alternatives are in an early stage and have not
been implemented, nor can there be any assurance that any such alternatives
will be implemented.  After further consideration of such alternatives and
negotiations with various parties in interest, Bethlehem expects to present a
chapter 11 plan, which will likely cause a material change to the carrying
amount of assets and liabilities in the financial statements.

    Due to material uncertainties, it is not possible to predict the length of
time the Debtors will operate under chapter 11 protection, the outcome of the
reorganization in general, the effect of the reorganization on the Debtors'
businesses or the recovery by creditors of the Debtors and equity holders of
Bethlehem.

    These consolidated financial statements have been prepared in accordance
with the AICPA's Statement of Position 90-7 Financial Reporting by Entities in
                                            ----------------------------------
Reorganization Under the Bankruptcy Code (SOP 90-7).  SOP 90-7 provides for
----------------------------------------
segregating pre-petition liabilities that are subject to compromise,
identifying all transactions and events that are directly associated with the
reorganization of the Debtors and discontinuing interest accrual on unsecured
or undersecured debt.

    Except for secured debt and capital lease obligations, all recorded
pre-petition liabilities of the Debtors have been classified as liabilities
subject to compromise.  The Court authorized, but did not require, payments of
certain pre-petition wages, employee benefits and other obligations.  Net
changes in pension, other postemployment benefits and certain other accrued
liabilities since October 15, 2001, are included in liabilities subject to
compromise.  Payments of approximately $108 million have been made on
liabilities subject to compromise, primarily for wages, active and retiree
health care benefits and for other employee related costs.  Liabilities subject
to compromise at December 31, 2001 follows:

                              F-4 (Page 4 of 20)










<PAGE>


                                                  Dec. 31,
(Dollars in millions)                               2001
-------------------------------------------------------------
Other postemployment benefits                    $ 2,005.7
Pension liability                                  1,624.0
Unsecured debt                                       526.7
Accounts payable                                     220.8
Accrued employment costs                             270.6
Other accrued liabilities                            152.8
Accrued taxes and interest                            77.5
                                                 ---------
    Total                                        $ 4,878.1
                                                 =========
-------------------------------------------------------------

    Net costs resulting from reorganization of the businesses have been
reported in the statement of earnings separately as reorganization items.  For
the year ended December 31, 2001, the following have been incurred:

(Dollars in millions)                               2001
-------------------------------------------------------------
Professional fees                                $     7.1
Losses from termination of contracts                   1.4
Interest income                                       (0.4)
                                                 ----------
     Total                                       $     8.1
                                                 ==========
-------------------------------------------------------------


    Interest on unsecured debt that was not charged to earnings for the period
from October 15 to December 31, 2001 was approximately $9 million.

                              F-4 (Page 5 of 20)










<PAGE>


                      ASSET IMPAIRMENT AND UNUSUAL ITEMS

    We recognized the following asset impairments and unusual items:

(Dollars in millions)                                2001        2000
--------------------------------------------------------------------------
Impairment of goodwill                           $   317.0     $      -
Loss on closure of Lackawanna Coke                    40.0            -
Impairment of Chicago Cold Rolling facility           15.2            -
Impairment of Burns Harbor 110" plate mill            11.4            -
Employee termination costs                             7.5            -
Loss on closure of Metalsite                           3.4            -
Gain on sale of MBR                                  (22.2)           -
Gain on Metropolitan Life conversion                    -          (17.9)
Gain on sale of Presque Isle                            -           (9.0)
Closure of Burns Harbor ingot teeming and
  slab mill                                             -            6.0
                                                 ----------    ----------
     Total                                       $   372.3     $   (20.9)
                                                 ==========    ==========
--------------------------------------------------------------------------


    At year end, as a result of the chapter 11 filing and the extremely
competitive steel market conditions, we analyzed our ability to recover the
carrying value of our steel assets and facilities.  We determined that the
carrying value of certain assets exceeded the related expected future cash
flows.  Accordingly, we recognized an impairment loss of (1) $317 million for
goodwill acquired in the 1998 Lukens merger, (2) $11 million for the 110 inch
plate mill at Burns Harbor which is now expected to remain idle indefinitely
and (3) $15 million for our Chicago Cold Rolling facility which substantially
reduced operations during the fourth quarter.  Also, during the fourth quarter,
we identified approximately 300 non-represented salaried positions that will be
eliminated and recognized $8 million for related employee benefit charges
(primarily for pensions).


    Earlier in 2001, we (1) closed our Lackawanna Coke operations resulting in
a charge of $40 million principally to recognize related employee benefit costs
($22 million for pensions, $9 million for postretirement benefits other than
pensions, and $9 million for severance and other costs), (2) sold our interest
in MBR, a Brazilian iron ore property, for $4 million in cash and $19 million
in credits against future iron ore purchases resulting in a $22 million gain
and (3) wrote- off our equity investment in Metalsite, an internet marketplace
for steel that ceased operations, resulting in a charge of $3 million.


    In 2000, we received $18 million from the conversion of Metropolitan Life
Insurance Company from a mutual company owned by its policyholders to a
publicly held company, all of which was recognized as a gain.  We sold our
equity interest in Presque Isle Corporation for $10 million resulting in a $9
million gain.  Offsetting these gains was a $6 million charge in connection
with closing our Burns Harbor ingot teeming and slab mill operation.  This
charge included $4.5 million for employee benefit related costs ($3 million for
pensions, $1 million for postretirement benefits other than pensions, and $.5
million for severance and other benefits) and $1.5 million for the net book
value of certain assets.

                                   F-4 (Page 6 of 20)










<PAGE>


                                   D. TAXES

    Our benefit (provision) for income taxes consisted of:


(Dollars in millions)                      2001         2000        1999
----------------------------------------------------------------------------
Federal - deferred                      $  (985)      $    26      $    39
Federal, state and foreign - current          1            (1)          -
                                        --------      --------     --------
   Total benefit (provision)            $  (984)      $    25      $    39
                                        ========      ========     ========
----------------------------------------------------------------------------

    The benefit (provision) for income taxes differs from the amount computed
by applying the federal statutory rate to pre-tax income (loss).  The computed
amounts and the items comprising the total differences follow:

(Dollars in millions)                      2001          2000       1999
----------------------------------------------------------------------------

Pre-tax income (loss):
United States                           $  (967)      $  (144)     $  (223)
Foreign                                       1             1            1
                                        --------      --------     --------
   Total                                $  (966)      $  (143)     $  (222)
                                        ========      ========     ========

Computed amounts                        $   338       $    50      $    78
Change in valuation allowance            (1,208)          (25)         (39)
Goodwill amortization/impairment           (115)           (4)          (4)
Percentage depletion                          5             5            6
Other differences - net                      (4)           (1)          (2)
                                        --------      --------     --------
   Total benefit (provision)            $  (984)      $    25      $    39
                                        ========      ========     ========
----------------------------------------------------------------------------

    The components of our net deferred income tax asset are as follows:

(Dollars in millions)                                December 31
----------------------------------------------------------------------------
                                                  2001         2000
                                                --------     --------
Temporary differences:
  Employee benefits                             $   985      $   915
  Depreciable assets                               (220)        (250)
  Other                                             185          205
                                                --------     --------
    Total                                           950          870
Operating loss carryforward                         475          420
Alternative minimum tax credits                      35           35
                                                --------     --------
  Deferred income tax asset                       1,460        1,325
Valuation allowance                              (1,460)        (340)
                                                --------     --------
  Deferred income tax asset - net               $   -        $   985
                                                ========     ========
----------------------------------------------------------------------------

                              F-4 (Page 7 of 20)










<PAGE>


    Temporary differences represent the cumulative taxable or deductible
amounts recorded in our financial statements in different years than recognized
in our tax returns.  Our employee benefits temporary difference includes
amounts expensed in our financial statements for postretirement pensions,
health care and life insurance that become deductible in our tax return upon
payment or funding in qualified trusts.  The depreciable assets temporary
difference represents principally cumulative tax depreciation in excess of
financial statement depreciation.  Other temporary differences represent
various net expenses accrued for financial reporting purposes that are not
deductible for tax reporting purposes until paid.  At December 31, 2001, we had
regular tax net operating loss carryforwards (NOL) of about $1.4 billion and
alternative minimum tax loss carryforwards of about $940 million.  The NOL will
expire in varying amounts from 2005 through 2021 if we are unable to use the
amounts to offset taxable income in the future.  Our ability to reduce future
income tax payments through the use of NOL could be limited if Bethlehem were
to undergo an ownership change.  A chapter 11 reorganization plan may cause
such an ownership change, may reduce the amount of NOL available and may limit
NOL usage.  Any liabilities cancelled under a chapter 11 reorganization plan
will reduce our NOL by the amount cancelled and, therefore, in substance will
be taxable income.

    FASB Statement No.  109, Accounting for Income Taxes, requires that we
record a valuation allowance when it is "more likely than not that some portion
or all of the deferred tax assets will not be realized." It further states,
"forming a conclusion that a valuation allowance is not needed is difficult
when there is negative evidence such as cumulative losses in recent years." We
incurred financial accounting losses in 1999 through 2001.  Our results during
2001 were worse than we anticipated at the beginning of the year and we will
not be able to use any of the NOL expiring in 2001 in our federal income tax
return for the year.  In the absence of specific favorable factors, application
of FASB Statement No.  109, issued in 1992, and its subsequent interpretations
require a 100% valuation allowance for any deferred tax asset when a company
has cumulative financial accounting losses, excluding unusual items, over
several years.  Accordingly, during 2001, after consideration of these factors,
we provided a 100% valuation allowance for our deferred tax asset increasing
our non-cash provision for income taxes for 2001 by $985 million.  We will
continue this policy in the future until, at a minimum, a chapter 11 plan of
reorganization is confirmed.

    In addition to income taxes, we incurred costs for certain other taxes as
follows:


(Dollars in millions)                      2001         2000        1999
----------------------------------------------------------------------------
Employment taxes                        $   69.4       $   69.7    $   73.3
Property taxes                              29.2           31.4        34.2
State taxes and other                        7.0            9.7        11.7
                                        --------       --------    --------
  Total other taxes                     $  105.6       $  110.8    $  119.2
                                        ========       ========    ========
----------------------------------------------------------------------------

                              F-4 (Page 8 of 20)










<PAGE>


                    E.  DEBT AND CAPITAL LEASE OBLIGATIONS


(Dollars in millions)                                    December 31
----------------------------------------------------------------------------
                                                       2001         2000
                                                     ---------    ---------
Secured Debt:
  Notes and loans:
    GECC DIP facility, Variable, Due 2003            $  205.6     $     -
    Inventory debt, LIBOR plus 1.125%, Due 2003         289.9        140.0
    Cold mill financing, LIBOR plus 2.5%, Due 2003       43.8         48.8
    Chicago Cold Rolling financing, Variable rate,
      Due 2005                                           18.0           -
    2%, Due 2002-2009                                     2.3          2.6

  Capital lease obligations:
    Wide slab caster, 9.867%, Due 2001-2005              46.1         49.2
    Ore vessel, 11.5%, Due 2001-2009                     26.1         28.0
    Other                                                15.7         11.8
                                                     ---------    ---------
      Total Secured Debt                                647.5        280.4

Unsecured debt:
  Notes and loans:
    7-5/8% notes, Due 2004                              150.0        150.0
    10-3/8% notes, Due 2003                             102.8        105.0
    6-1/2% notes, Due 2006                               75.0         75.0
    9.64%, Due 2001-2009                                  0.3          0.3

  Debentures:
    8.45%, Due 2005                                      73.9         78.5
    8-3/8%, Due 2001                                       -          39.0

  Pollution control and industrial revenue bonds:
    7-1/2% - 8%, Due 2015-2024                          127.7        128.9
                                                     ---------    ---------
      Total Unsecured Debt                              529.7        576.7

  Unamortized debt discount                              (3.0)        (3.7)
                                                     ---------    ---------
    Total Debt                                        1,174.2        853.4
  Amounts classified as current                         (19.3)       (55.4)
  Amounts classified as subject to compromise          (526.7)          -
                                                     ---------    ---------
    Long-term                                        $  628.2     $  798.0
                                                     =========    =========
----------------------------------------------------------------------------

    At December 31, 2001, secured debt and capital lease obligations with
contractual maturities of less than one year are classified as current.  All
unsecured debt has been classified as liabilities subject to compromise.
Interest or principal is not expected to be paid or accrued on unsecured debt
until a chapter 11 plan of reorganization defining the repayment terms has been

                              F-4 (Page 9 of 20)










<PAGE>

submitted and confirmed.

    The Court approved a $450 million debtor-in-possession (DIP) financing with
the General Electric Capital Corporation (GECC).  The Court has authorized a $5
million carve out for the protection of certain administrative costs.  The GECC
financing is collateralized by, among other things, a senior lien on
substantially all of the Debtors' assets, excluding inventory and those assets
that had previously been subject to a lien, and a junior lien on inventory and
those assets that had previously been subject to a lien.  The GECC financing
expires on the earlier of confirmation of a chapter 11 plan of reorganization
or October 15, 2003.  Bethlehem's wholly owned subsidiaries that did not file
for chapter 11 reorganization have guaranteed the financing.  Bethlehem pays
interest on this financing at its option at either (1) an indexed rate,
typically based on the prime rate, plus 2.5% or (2) LIBOR plus 3.5%.  At
December 31, 2001 our average rate was about 6%.  The GECC financing contains
certain financial performance covenants, with which we are in compliance at
December 31, 2001, and restricts our ability to pay dividends.  Initial
proceeds from the GECC financing were used to repurchase accounts receivable
that had been sold under a previous facility.  As part of the GECC financing,
the $290 million previously borrowed under an inventory credit facility remains
outstanding as secured debt for the term of the GECC financing.  Interest is
payable monthly in arrears on the GECC facility and as adequate protection on
the inventory debt.  At December 31, 2001 letters of credit outstanding under
the GECC financing amounted to $16 million and, based on net eligible
receivables in the borrowing base, $172 million was available for borrowing.

    Bethlehem incurred $8 million in debt financing costs related to the
facility that are being amortized over the two year term of the loan.

    At December 31, 2001 and 2000, the estimated fair value of our debt was
about $480 million less and $125 million less than the recorded amounts.

    Prior to the chapter 11 filing, we had a credit arrangement with a group of
15 domestic and international banks for $660 million, $150 million of which
could be used for letters of credit.  The arrangement consisted of a $340
million receivables sale/purchase agreement through a wholly-owned special
purpose subsidiary and a $320 million secured inventory credit agreement.

    The GECC financing replaced the receivable sale/purchase agreement and the
pre- petition debt outstanding under the inventory facility was converted to
term debt.

    Supplemental information on the receivable balances at December 31 follows:

(Dollars in millions)                                    December 31
----------------------------------------------------------------------------
                                                       2001         2000
                                                     ---------    ---------

Trade and other                                      $  338.9     $  108.0
Banks                                                    34.1         63.7
Allowances                                              (22.6)       (19.6)
                                                     ---------    ---------
  Total receivables - net                            $  350.4     $  152.1
                                                     =========    =========
----------------------------------------------------------------------------

    Receivables from banks are for cash collateral and required receivable
reserves that were to be returned to us upon expiration of the letters of
credit and liquidation of receivable ownership.

    The amounts included in property, plant and equipment for capital leases
were $86 million (net of $10 million accumulated amortization) and $89 million
($2 million accumulated amortization) at December 31, 2001 and 2000.

                              F-4 (Page 10 of 20)








<PAGE>


                  F.  COMMITMENTS AND CONTINGENT LIABILITIES

    In 2000, we sold and leased back under a long-term charter an ore vessel,
the M.V.  Stewart J.  Cort.  The gain of $28 million was deferred and will be
recognized over the eight-year life of the charter agreement.  We recognized $4
million of the gain during 2001.

    Also in 2000, we entered into a 12-year agreement to purchase pulverized
coal for injection into "L" Blast Furnace.  We pay a minimum of $11 million per
year plus additional amounts based on the amount of coal consumed.  During
2001, we made minimum payments of $11 million, paid variable fees of $5 million
and purchased 479,000 tons of coal for $21 million.

    Future minimum payments under noncancellable operating leases at December
31, 2001 were $33 million in 2002, $28 million in 2003, $27 million in 2004,
$25 million in 2005, $17 million in 2006 and $74 million thereafter.  Total
rental expense under operating leases was $39 million, $40 million and $35
million in 2001, 2000 and 1999.

    In 1998, we sold the No.  1 Coke Oven Battery at Burns Harbor and entered
into agreements to operate the facility and purchase about 800,000 tons of coke
per year through year 2008.  We purchased 821,000 tons of coke at a cost of $99
million in 2001, 851,000 tons at a cost of $104 million in 2000, and 857,000
tons at a cost of $103 million in 1999.  The gain on the sale of about $160
million was deferred and is being recognized over the nine-year life of the
operating and purchase agreements.  We have recognized $18 million of the gain
in each year since 1999 as a reduction of cost of sales.

    In 1997, we sold our interest in the Iron Ore Company of Canada (IOC) and
entered into a 14-year agreement to purchase up to 1.8 million tons of iron ore
pellets per year generally at market prices through the year 2004 and about
500,000 tons in the years 2005 through 2011.  In 2001, we purchased iron ore
from IOC at a cost of $41 million.

    At December 31, 2001, we had outstanding approximately $10 million of
purchase orders for additions and improvements to our properties.

    The LTV Corporation, which filed for chapter 11 bankruptcy protection in
December 2000, is our partner in the Columbus Coatings Company (CCC) joint
venture.  CCC is an automotive quality, hot-dipped galvanized coating line that
began operation in 2001 to provide coating services to Bethlehem and LTV.  In
December 2001, LTV ceased operations and is trying to sell its assets,
including its share of CCC.  CCC continues to operate and provide coating
services to Bethlehem.

    CCC's construction costs were financed in part with a loan under a 1999
agreement with a group of lenders.  Both Bethlehem and LTV guaranteed the full
amount of the construction loan, which at December 31, 2001, had a balance of
$113 million.  After LTV's chapter 11 filing, 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.  During 2001,
Bethlehem and LTV both contributed capital to the joint venture to make any
required principal and interest payments.  LTV has informed us they no longer
intend to make any additional capital contributions for any amounts required
under the loan
agreements as of December 31, 2001, and beyond.


    Because of LTV's and our chapter 11 filings, CCC, LTV and Bethlehem are in
default under the construction loan agreements which would allow the lenders to
call the full amount of the loan.  We believe that the market value of CCC
exceeds the loan amount.  We are working with the CCC lenders and certain of
the potential buyers of LTV's ownership in CCC to resolve open issues.  We
believe these issues can be resolved without any additional significant impact
on our liquidity.

    We, along with other parties, have directly or indirectly guaranteed the
debt of certain other joint ventures totaling $12 million as of December 31,
2001.

                              F-4 (Page 11 of 20)




<PAGE>


    The domestic steel industry is subject to various federal, state and local
environmental laws and regulations concerning, among other things, air
emissions, wastewater discharges and solid and hazardous waste disposal.
Bethlehem and federal and state regulatory agencies conduct negotiations to
resolve differences in interpretation of certain environmental control
requirements.  In some instances, those negotiations are held in connection
with the resolution of pending environmental proceedings.  We believe that
there will not be any significant curtailment or interruptions of any of our
important operations as a result of these proceedings and negotiations.  We
cannot predict the specific environmental control requirements that we will
face in the future.  Based on existing and anticipated regulations promulgated
under presently enacted legislation, we currently estimate that capital
expenditures for environmental control in the near-term will average about $60
million per year.  However, estimates of future capital expenditures and
operating costs required for environmental compliance are subject to numerous
uncertainties, including the evolving nature of regulations, possible
imposition of more stringent requirements, availability of new technologies and
the timing of expenditures.

    Although it is possible that our future results of operations, in
particular quarterly or annual periods, could be materially affected by the
future costs of environmental compliance, we believe that the future costs of
environmental compliance will not have a material adverse effect on our
consolidated financial position or on our competitive position with respect to
other integrated domestic steelmakers that are subject to the same
environmental requirements.

    In the ordinary course of our business, we are involved in various pending
or threatened legal proceedings.  These proceedings include a large number of
cases in which plaintiffs allege injury due to exposure to asbestos, allegedly
resulting from past operations of Bethlehem and others.  All of the asbestos
cases resolved to date have either been dismissed as to Bethlehem or settled
for immaterial amounts.  We cannot predict with  certainty the outcome of any
legal proceedings to which we are a party.  In our opinion, however, adequate
reserves have been recorded for losses that are likely to result from all legal
proceedings.  If such reserves prove to be inadequate, however, we would incur
a charge to earnings that could be material to the results of operations in a
particular future quarterly or annual period.  We believe that any ultimate
liability arising from these proceedings will not have a material adverse
effect on our consolidated financial position.  Any payments related to
litigation at the time of filing is automatically stayed during the chapter 11
proceedings.

                              F-4 (Page 12 of 20)










<PAGE>

                          G.  POSTRETIREMENT BENEFITS

    We have noncontributory defined benefit pension plans that provide
postretirement benefits for substantially all our employees.  Defined benefits
are based on years of service and the five highest consecutive years of
pensionable earnings during the last ten years prior to retirement or a minimum
amount based on years of service.  We fund annually the amount required under
ERISA minimum funding standards plus additional amounts as appropriate based on
liquidity.  In addition, we currently provide other postretirement benefits
(OPEB) for health care and life insurance to most employees and their
dependents.

    The following sets forth the plans'  funded status at our valuation date
together with certain actuarial assumptions used and the amounts recognized in
our consolidated balance sheets and income statements:
<TABLE>
<CAPTION>
<S>                                                     <C>       <C>       <C>       <C>
(Dollars in millions)                                       Pension              OPEB
-----------------------------------------------------------------------------------------------

                                                          2001      2000      2001      2000
                                                        --------  --------  --------  ---------
Change in benefit obligation:
  Projected benefit obligation - beginning of year      $ 6,060   $ 6,115   $ 2,775   $ 2,750
  Current service cost                                       60        64        13        12
  Interest cost                                             463       468       213       212
  Actuarial adjustments                                     469        (3)      223        (8)
  Other                                                      32         3        12         1
  Benefits/administration fees paid                        (589)     (587)     (205)     (192)
                                                        --------  --------  --------  ---------
  Projected benefit obligation - November 30              6,495     6,060     3,031     2,775
                                                        --------  --------  --------  ---------
Change in plan assets
  Fair value of plan assets - beginning of year           5,735     6,090        90       100
  Actual return on plan assets                             (393)      213         1         9
  Employer contributions                                      8        27         -         -
  Benefits/administration fees paid                        (597)     (595)      (74)      (19)
                                                        --------  --------  --------  ---------
  Fair value of plan assets - November 30                 4,753     5,735        17        90
                                                        --------  --------  --------  ---------

  Unfunded projected benefit obligation                   1,742       325     3,014     2,685
  Unrecognized:
    Net actuarial gain (loss)                              (958)      432      (960)     (767)
    Initial net obligation                                   (2)      (37)        -         -
    Prior service from plan amendments                     (223)     (281)      (12)      (18)
  December - net                                              7         3         5        55
                                                        --------  --------  --------  ---------
    Acrued expense                                          566       442     2,047      1,955
                                                        ========  ========  ========  =========

Balance Sheet Accounts:
  Current and long-term liabilities                     $     -   $   442   $    41   $  1,955
  Liabilities subject to compromise                       1,624         -     2,006          -
  Adjustments to recognize minimum pension liability:
    Accumulated other comprehensive income                 (833)        -         -          -
    Intangible pension asset                               (225)        -         -          -
                                                        --------  --------  --------  ---------
    Accrued expense                                     $   566   $   442   $ 2,047   $  1,955
                                                        ========  ========  ========  =========
</TABLE>

    Under applicable accounting principles, we are required to record a minimum
pension liability equal to the unfunded pension obligation of $1,624 million.
The difference between the unfunded accumulated and projected benefit
obligations represents the projected salary assumption used for actuarial
purposes.  Those applicable accounting principles require that any

                              F-4 (Page 13 of 20)










<PAGE>

excess of the minimum liability over the accrued expense be recorded as an
intangible asset up to the unamortized past service costs with the balance
charged to other comprehensive income.

<TABLE>
<CAPTION>
<S>                                   <C>        <C>         <C>       <C>       <C>        <C>

(Dollars in millions)                             Pension                         OPEB
-----------------------------------------------------------------------------------------------------
                                        2001       2000       1999      2001      2000       1999
                                      --------   --------    -------   -------   -------    -------
Components of net expense:
  Current service cost                $    60    $    64     $   60    $   13    $   12     $   11
  Interest cost                           463        468        405       213       212        158
  Expected return on plan assets         (520)      (557)      (496)       (1)       (7)        (7)
  Other                                     8         -          -          3        -          -
  Amortizations:
    Initial net obligation                 34         34         34        -         -          -
    Plan amendments                        50         50         29         2         2         -
    Actuarial (gain) loss                  -         (12)        -         34        38         23
  PBGC, Multiemployer, other                8          8          8         7         7         15
                                      --------   --------    -------   -------   -------    -------
  Net expense                             103         55         40       271       264        200
                                      ========   ========    =======   =======   =======    =======

Assumptions:
  Expected return on plan assets       9 1/2%     9 1/2%     8 3/4%        8%        8%     6 3/4%
  Discount rate - expense                  8%         8%     6 3/4%        8%        8%     6 3/4%
  Discount rate - projected obligation 7 1/8%         8%         8%    7 1/8%        8%         8%
  Rate of compensation increase            3%       2.9%       2.9%        3%      2.9%       2.9%

  Trend rate
    -beginning next year                  n/a        n/a        n/a      8.8%      8.6%     9 1/2%
    -ending rate                          n/a        n/a        n/a      4.8%      4.8%       4.8%
    -ending year                          n/a        n/a        n/a      2010      2010       2010

</TABLE>

    A one-percentage-point change in assumed health care cost trend rates would
have an effect of $20 million on the total service and interest cost components
of the 2002 other postretirement benefits expense and of $245 million on the
November 30, 2001 projected benefit obligation for other postretirement
benefits.


                                   F-4 (Page 14 of 20)










<PAGE>

                       H.  STOCKHOLDER RIGHTS AGREEMENT

    We have a Stockholder Rights Agreement under which holders of Common Stock
have rights to purchase a new series of Preference Stock, or under certain
circumstances, additional shares of Common Stock.  The rights generally become
exercisable if a person or group begins a tender or exchange offer that would
result in that person or group owning 15% or more of Bethlehem's Common stock.
Under these circumstances, each right entitles the holder to purchase one one-
hundredth of a share of Series A Junior Participating Preference Stock at an
exercise price of $60 per unit.  The rights also become exercisable if a person
or group acquires 15% or more of Common Stock or acquires 5% or more of Common
Stock and makes a filing under the Hart- Scott-Rodino Antitrust Improvements
Act of 1976.  Under these circumstances, each right entitles the holder (other
than the acquirer) to purchase, for the right's exercise price, a number of
shares of Common Stock (or, in certain circumstances, other consideration)
worth twice the right's exercise price.  We may redeem new rights under certain
circumstances at one cent per right.  If the rights are not redeemed or
extended, they will expire in October 2008.

                                   F-4 (Page 15 of 20)










<PAGE>


                               I.  STOCK OPTIONS

    At December 31, 2001, we had options outstanding under various Plans
approved by our stockholders.  New options can be granted only under the Plan
approved in 2001, which reserved 6,400,000 shares of Common Stock for such use.
At December 31, 2001, options on 4,867,450 shares of Common Stock were
available for granting.  Under the plans, the option price is the fair market
value of our Common Stock on the date the option is granted.  Options issued
under the Plans become exercisable one to four years after the date granted and
expire ten years from the date granted.  Exercisable options may be surrendered
for the difference between the option price and the quoted market price of the
Common Stock on the date of surrender.  Depending on the circumstances, option
holders receive either Common Stock, cash, or a combination of Common Stock and
cash.  Because of the surrender component in our options, related expense is
recognized periodically based on the difference between the option price and
current quoted market prices.  Compensation expense recognized and weighted
average fair value for the options granted in 2001, 2000 and 1999 were not
material.

    Changes in options outstanding during 2001, 2000 and 1999 were as follows:

                                          Number of         Weighted
                                           Options       Average Price
-----------------------------------------------------------------------
Balance December 31, 1998                5,220,298       $          14
        Granted                          1,074,950                   9
        Terminated or canceled            (318,506)                 18
        Surrendered or exercised          (294,665)                  9
-----------------------------------------------------------------------
Balance December 31, 1999                5,682,077                  13
        Granted                            889,250                   6
        Terminated or canceled            (286,899)                 15
        Surrendered or exercised            (1,000)                  6
-----------------------------------------------------------------------
Balance December 31, 2000                6,283,428                  12
        Granted                          1,145,450                   3
        Terminated or canceled            (514,919)                 13
        Surrendered or exercised           (10,360)                  8
-----------------------------------------------------------------------
Balance December 31, 2001                6,903,599       $          11
=======================================================================

    Options exercisable at the end of 2001, 2000 and 1999 were 4,575,387,
4,303,416 and 3,884,315.

    Information on our stock options at December 31, 2001 follows:

                  Number of  Average     Average       Number of     Average
   Range of        Options   Exercise  Contractual      Options      Exercise
Exercise Prices  Outstanding   Price   Life (Years)   Exercisable     Price
------------------------------------------------------------------------------
$.54                 200,000    $  1            10             -      $   -
 2.375 - 7.37      1,894,105       4             9        315,993         6
 8.125 - 20.375    4,809,494      13             4      4,259,394        14
                   ---------                            ---------
Total              6,903,599      11             6      4,575,387        13
                   =========                            =========


                                   F-4 (Page 16 of 20)










<PAGE>

                           J.  STOCKHOLDERS' EQUITY

<TABLE>                                                                                                            Accumulated
                                                                                                               -------------------
<CAPTION>                                                                                                                <C)
<S>                         <C>              <C>               <C>              <C>              <C>           <C>       Other
Shares in thousands         Preferred Stock  Preference Stock   Common Stock     Common Stock    Additional              Compre-
and dollars in millions,    $1.00 Par Value  $1.00 Par Value   $1.00 Par Value  Held in Treasury   Paid-In               hensive
except per share data)      Shares   Amount  Shares    Amount  Shares   Amount  Shares    Amount   Capital      Deficit  Income
----------------------------------------------------------------------------------------------------------------------------------

Balance December 31, 1998   11,623    $11.6  2,175       $2.2  132,228  $132.2  2,081    ($60.3)  $1,991.6     ($587.8)  $      -
Net loss for year                                                                                               (183.2)
Dividends on Preferred Stock                                                                         (40.4)
Preference Stock:
        Stock dividend                         108        0.1                                         (0.1)
        Issued                                   3                                                     0.1
        Converted                             (276)      (0.3)     276     0.3
Common Stock:
        Acquired                                                                   38      (0.3)
        Issued                                                   1,085     1.1                        10.3
----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1999    11,623    11.6  2,010        2.0  133,589   133.6  2,119     (60.6)   1,961.5      (771.0)         -
Net loss for year                                                                                               (118.4)         -
Dividends on Preferred Stock                                                                         (40.4)
Preference Stock:
        Stock dividend                         100        0.1                                         (0.1)
        Issued                                  84        0.1                                          0.1
        Converted                             (138)      (0.1)     138     0.1
Common Stock:
        Acquired                                                                2,732      (5.1)
        Issued                                                     897     0.9                         5.7
----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 2000    11,623    11.6   2,056       2.1  134,624   134.6  4,851     (65.7)   1,926.8      (889.4)         -
Net loss for year                                                                                             (1,949.6)
Minimum pension adjustment                                                                                                 (833.0)
Dividends on Preferred Stock                                                                         (20.2)
Preference Stock:
        Stock dividend                          102       0.1                                         (0.1)
        Issued                                   19        -                                             -
        Converted              (265)   (0.2)   (149)     (0.2)     783     0.8                        (0.4)
Common Stock:
        Acquired                                                                   47      (0.2)
        Issued                                                     374     0.4                         2.1
----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 2001    11,358   $11.4   2,028      $2.0  135,781  $135.8  4,898    $(65.9)  $1,908.2   $(2,839.0)   $(833.0)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                               F-4 (Page 17 of 20)










<PAGE>

    Total non-owner changes in equity for the years ended December 31, 2001 and
2000 were as follows:


(Dollars in millions)                2001          2000          1999
-----------------------------------------------------------------------
Net Loss                         $ (1,949.6)   $  (118.4)    $  (183.2)
Minimum Pension Adjustment           (833.0)          -             -
                                 -----------   -----------   ----------
                                 $ (2,782.6)   $   (118.4)   $  (183.2)
                                 ===========   ===========   ==========
-----------------------------------------------------------------------

    Preferred and Preference Stock issued and outstanding:

(Shares in thousands)                                         December 31
---------------------------------------------------------------------------
                                                             2001     2000
                                                             ----     ----
Preferred Stock - Authorized 20,000 shares
$5.00 Cumulative Convertible Preferred Stock                 2,500    2,500
$2.50 Cumulative Convertible Preferred Stock                 4,000    4,000
$3.50 Cumulative Convertible Preferred Stock                 4,858    5,123

Preference Stock - Authorized 20,000 shares
Series "A" 5% Cumulative Convertible Preference Stock        1,324    1,357
Series "B" 5% Cumulative Convertible Preference Stock          704      699
---------------------------------------------------------------------------

    Each share of $3.50 Cumulative Convertible Preferred Stock issued in 1993
is convertible into 2.39 shares of Common Stock, subject to certain events.
Each share of the $5.00 Cumulative Convertible Preferred Stock and the $2.50
Cumulative Convertible Preferred Stock issued in 1983 is convertible into 1.77
and .84 shares of Common Stock, subject to certain events.  During 2001, the
Company declared and paid only the first and second quarter dividend on
Preferred Stock.  Under Delaware law, we have insufficient "surplus" to pay
dividends on preferred and common stock.  Dividend payments are also restricted
by our GECC financing (See Note E.  Debt and Capital Lease Obligations).  The
remaining 2001 quarterly dividends are in arrears.

    In accordance with our labor agreements, we issue Preference Stock to a
trustee under the Employee Investment Program.  Series "A" and Series "B" of
Preference Stock have a cumulative dividend of 5% per annum payable at our
option in cash, Common Stock or additional shares of Preference Stock.  Each
share of Preference Stock is entitled to vote with Common Stock on all matters
and is convertible into one share of Common Stock.

                              F-4 (Page 18 of 20)










<PAGE>

                             K. EARNINGS PER SHARE

    The following presents the details of our earnings per share calculations:
<TABLE>
<CAPTION>
<S>                                             <C>          <C>          <C>

(Shares in thousands and dollars
in millions, except per share data)                  2001         2000         1999
------------------------------------------------------------------------------------------

Basic Earnings Per Share
Net loss                                        $ (1,949.6)  $   (118.4)  $   (183.2)
Less dividend requirements:
  $2.50 preferred dividend-cash                      (10.0)       (10.0)       (10.0)
  $5.00 preferred dividend-cash                      (12.5)       (12.5)       (12.5)
  $3.50 preferred dividend-cash                      (17.7)       (17.9)       (17.9)
  5% preference dividend-stock                        (0.3)        (0.3)        (0.8)
------------------------------------------------------------------------------------------
    Total preferred and preference dividends         (40.5)       (40.7)       (41.2)
Net income (loss) applicable to Common Stock    $ (1,990.1)  $   (159.1)  $   (224.4)
------------------------------------------------------------------------------------------
Average Shares of Common Stock outstanding         130,077      131,747      130,199
------------------------------------------------------------------------------------------
Basic Earnings Per Share                        $   (15.30)  $    (1.21)  $    (1.72)
==========================================================================================

Diluted Earnings Per Share
Net loss                                        $ (1,949.6)  $   (118.4)  $    (183.2)
Less dividend requirements:
  $2.50 preferred dividend-cash                      (10.0)       (10.0)        (10.0)
  $5.00 preferred dividend-cash                      (12.5)       (12.5)        (12.5)
  $3.50 preferred dividend-cash                      (17.7)       (17.9)        (17.9)
  5% preference dividend-stock                        (0.3)        (0.3)         (0.8)
------------------------------------------------------------------------------------------
Net income (loss) applicable to Common Stock    $ (1,990.1)  $   (159.1)  $    (224.4)
==========================================================================================
Average shares of Common Stock equivalents
and other potentially dilutive securities outstanding:
  Common Stock                                     130,077      131,747       130,199
  Stock Options                                          *            *             *
  $2.50 Preferred Stock                                  *            *             *
  $5.00 Preferred Stock                                  *            *             *
  $3.50 Preferred Stock                                  *            *             *
  5% Preference Stock                                    *            *             *
------------------------------------------------------------------------------------------
    Total                                          130,077      131,747       130,199
==========================================================================================
Diluted Earnings Per Share                      $   (15.30)  $    (1.21)  $     (1.72)
==========================================================================================
</TABLE>
* Antidilutive


                              F-4 (Page 19 of 20)










<PAGE>
                   L.  QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
<S>                      <C>      <C>        <C>        <C>       <C>          <C>          <C>       <C>
(Dollars in millions, except per share data)
---------------------------------------------------------------------------------------------------------------
                                           2001                                           2000
                         --------------------------------------------------------------------------------------
                            1Q         2Q         3Q        4Q          1Q           2Q         3Q        4Q
                         --------------------------------------------------------------------------------------
Net sales                $ 877.9  $   911.1  $   825.4  $  719.9  $  1,138.9   $  1,088.2   $  988.8  $  878.5
Cost of sales              910.8      915.2      844.0     798.6     1,020.4        966.0      923.8     906.4
Net income (loss)         (118.4)  (1,131.9)    (152.2)   (547.1)        3.1         31.6      (34.8)   (118.2)
Net income (loss) per
Common Share - basic &
diluted                  $ (0.99) $   (8.80) $   (1.25) $  (4.27) $    (0.05)  $     0.16   $  (0.34) $  (0.97)
---------------------------------------------------------------------------------------------------------------
</TABLE>


                  M. INFORMATION ABOUT PRODUCTS AND SERVICES

<TABLE>
<CAPTION>
<S>                                      <C>         <C>          <C>

Percentage of Bethlehem's Net Sales
By Major Product
-----------------------------------------------------------------------------
                                         2001         2000         1999
                                        ------       ------       ------
Steel mill products:
  Hot rolled sheets                      15.3%        14.9%        13.5%
  Cold rolled sheets                     15.2         18.9         18.4
  Coated sheets                          29.0         27.9         29.9
  Tin mill products                       7.9          6.3          7.0
  Plates                                 21.6         20.5         20.4
  Rail products                           3.5          3.9          2.6
  Other steel mill products               1.5          2.0          2.5
Other products and services
  (including raw materials and freight)   6.0          5.6          5.7
                                        ------       ------       ------
                                        100.0%       100.0%       100.0%
-----------------------------------------------------------------------------

</TABLE>
    Since 1999, our largest customer, General Motors Corporation, accounted for
about 10% of our consolidated sales.

                                  F-4 (Page 20 of 20)







<PAGE>

                        Report of Independent Auditors


To the Board of Directors and
Stockholders of
Bethlehem Steel Corporation:


In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Bethlehem Steel Corporation and its subsidiaries ("Bethlehem") at
December 31, 2001 and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States
of America.  In addition, in our opinion, the financial statement schedule
listed in the accompanying index presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.  These financial statements and financial
statement schedule are the responsibility of the company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared assuming
that Bethlehem will continue as a going concern, which contemplates continuity
of the company's operations and realization of its assets and payments of its
liabilities in the ordinary course of business.  As more fully described in the
notes to the consolidated financial statements, on October 15, 2001, Bethlehem
filed a voluntary petition for reorganization under Chapter 11 of the United
States Bankruptcy Code.  The uncertainties inherent in the bankruptcy process
and the company's recurring losses from operations raise substantial doubt
about Bethlehem's ability to continue as a going concern.  Bethlehem is
currently operating its business as a Debtor-in-Possession under the
jurisdiction of the Bankruptcy Court, and continuation of the company as a
going concern is contingent upon, among other things, the confirmation of a
Plan of Reorganization, the company's ability to comply with all debt covenants
under the existing debtor-in-possession financing agreements, and Bethlehem's
ability to generate sufficient cash from operations and obtain financing
sources to meet its future obligations.  If no reorganization plan is approved,
it is possible that the company's assets may be liquidated.  The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amount
and classification of liabilities that may result from the outcome of these
uncertainties.


/s/ PricewaterhouseCoopers LLP
------------------------------
Philadelphia, Pennsylvania
January 30, 2002


                                      F-5









    <PAGE>


                        CONSENT OF INDEPENDENT AUDITORS


We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 2-90795, No. 2-71699, No. 2-53880, No. 2-90796,
No.  2-67314, No.  33-23516, No. 33-23688, No. 33-52267, No. 33-58019, No.
33-58021, No.  33-60507, No. 333-53895, No. 333- 57157, and No. 333-91941)
of Bethlehem Steel Corporation of our report dated January 30, 2002 relating to
the financial statements and financial statement schedule, which appears in
this Form 10-K.


/s/ PricewaterhouseCoopers LLP
------------------------------


Philadelphia, Pennsylvania
January 30, 2002


                                      F-6




<PAGE>

                                BETHLEHEM STEEL CORPORATION


                                     10-K SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                      ($ in Millions)

<TABLE>
<CAPTION>
<S>                                          <C>                <C>               <C>                 <C>

                                                                  Charged
                                             Balance at         (Credited)                            Balance at
                                              12/31/00           to Income         Deductions          12/31/01
                                             ----------         ----------         ----------         ----------

Classification
--------------
  Doubtful Receivables & Returns                  $19.6              $7.8           ($4.8)(a)             $22.6
  Deferred Income Tax Asset                       340.0           1,200.0           (80.0)(b)           1,460.0



                                                                  Charged
                                             Balance at         (Credited)                            Balance at
                                              12/31/99           to Income         Deductions          12/31/00
                                             ----------         ----------         ----------         ----------
Classification
--------------
  Doubtful Receivables & Returns                  $19.6              $0.1           ($0.1)(a)             $19.6
  Deferred Income Tax Asset                       325.0              26.0           (11.0)(b)             340.0




                                                                  Charged
                                             Balance at         (Credited)                            Balance at
                                              12/31/98           to Income         Deductions          12/31/99
                                             ----------         ----------         ----------         ----------

Classification
--------------
  Doubtful Receivables & Returns                  $20.0              $0.8           ($1.2)(a)             $19.6
  Deferred Income Tax Asset                       320.0              39.0           (34.0)                325.0

</TABLE>

(a) Amounts written-off less collections and reinstatements.
(b) Expiration of NOL carryforward and other tax adjustments.



                                              F-7