Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS.
Bethlehem(1) is the second largest steel producer in the United States and is engaged primarily in the manufacture and sale of a wide variety of steel mill products. Bethlehem also produces and sells coal and other raw materials, repairs ships and offshore drill rigs and manufactures and sells forgings and castings.
For financial reporting purposes, Bethlehem has disaggregated the results of its operations and certain other financial information into two segments, Basic Steel Operations and Steel Related Operations. Note C to the Consolidated Financial Statements sets forth certain financial information relating to Bethlehem's industry segments for 1994, 1993 and 1992. The table below shows the percentage contribution to Bethlehem's net sales of each segment and of major classes of products for each of the years 1992 through 1994:
BASIC STEEL OPERATIONS
Bethlehem's Basic Steel Operations produces a wide variety of steel mill products, including hot rolled, cold rolled and coated sheets and strip, plates, structural shapes, piling, tin
- -------------------- (1) "Bethlehem" when used herein means Bethlehem Steel Corporation, a Delaware corporation, and where applicable includes its consolidated subsidiaries. Bethlehem was incorporated in Delaware in 1919.
mill products, specialty blooms, carbon and alloy bars, rail and pipe. Basic Steel Operations includes the following Business Units: the Burns Harbor Division, the Sparrows Point Division, Bethlehem Structural Products Corporation ("Structural Products") and Pennsylvania Steel Technologies, Inc. Also included in Basic Steel Operations are iron ore and coal operations (which provide raw materials to Bethlehem's steelmaking facilities and sell such materials to trade customers), railroad operations (which primarily transport raw materials and semifinished steel products within various Bethlehem operations) and lake shipping operations (which primarily transport raw materials to the Burns Harbor Division). See "ITEM 2.



ITEM 2. PROPERTIES.
PROPERTIES RELATING TO THE BASIC STEEL OPERATIONS SEGMENT
Burns Harbor Division
The principal operations of the Burns Harbor Division are located along the shore of Lake Michigan near Chicago, Illinois. The principal products of the Burns Harbor Division are hot rolled and cold rolled sheets and coated sheets for the automotive, service center, container, office furniture and appliance markets and plates for the construction, machinery and service center markets. Principal facilities include a sintering plant, two coke oven batteries, two blast furnaces including new coal injection facilities, three basic oxygen furnaces with a combined annual raw steel production capability of approximately five million tons, a vacuum degassing facility, two continuous slab casters with a combined annual production capability of four million tons, a 50 x 96-inch slabbing mill, two sheared plate mills (110-inch and 160-inch), an 80-inch hot-strip mill, an 80-inch five stand cold reducing mill, sheet finishing mills, a continuous heat treating line, batch annealing facilities, a 48-inch continuous electrogalvanizing line and a new 72-inch hot-dip galvanizing line. About 80 percent of the steel produced at Burns Harbor is continuously cast; the remaining 20 percent is ingot cast. Ingot cast slabs are used primarily to make steel plates.
The Galvanized Products Division, an operating unit of the Burns Harbor Division, is located in Lackawanna, New York. Facilities of the Galvanized Products Division include a continuous pickling line, a four stand cold reducing mill, a sheet finishing complex and a 72-inch hot-dip galvanizing line. The Burns Harbor Division also operates coke-making facilities at Lackawanna, New York.
The Burns Harbor Division's utilization of raw steel production capability was 92 percent during 1994, reflecting the reline of one of its two blast furnaces. See "ITEM 1. BUSINESS--General--Capital Expenditures" of this Report.
Sparrows Point Division
The operations of the Sparrows Point Division are located along the Chesapeake Bay near Baltimore, Maryland. The principal products of the Sparrows Point Division are hot rolled and cold rolled sheets, tin mill products, galvanized sheet, Galvalume(R) sheet and plates for service centers and the container, construction, appliance and other metals markets. Principal facilities include a sintering plant, three coke oven batteries (which are cold idled), a large blast furnace, two basic oxygen furnaces with an annual raw steel production capability of approximately 3.5 million tons, a two strand continuous slab caster with a present annual production capability of approximately 3.5 million tons, a 160-inch sheared plate mill, a 68-inch hot-strip mill, three cold reducing mills (66-inch, 56-inch and 48-inch), continuous and batch annealing facilities, a galvanizing line, two Galvalume(R) lines, tin mill facilities and a 48-inch hot-dip galvanizing line.
Sparrows Point is currently obtaining coke from Structural Products and from various commercial sources. The Division continuously casts essentially 100 percent of its total production volume. The Sparrows Point Division's utilization of raw steel production capability was 104 percent during 1994.
Bethlehem Structural Products Corporation
The operations of Bethlehem Structural Products Corporation are located in Bethlehem, Pennsylvania. Its principal products are structural steel shapes and piling products primarily for the building and construction markets and ingot molds for the metals industry. Principal facilities include three coke oven batteries, one blast furnace, two basic oxygen furnaces with a combined annual raw steel production capability of 1.5 million tons, one 40-inch blooming mill, a 48-inch structural rolling mill, a 44-inch structural rolling mill, and an ingot mold foundry. The existing iron and steelmaking operations, which include the blast furnace, basic oxygen furnaces, the 48-inch structural rolling mill and related facilities, will be discontinued during 1995. Structural Products' utilization of raw steel production capability was 72 percent during 1994.
In 1994 Bethlehem announced a plan for Structural Products to reduce costs and improve competitiveness. Under the plan, Structural Products will focus on the production and sale of sheet piling, standard sections and light and medium wide-flange sections, which comprise about 80 percent of the wide-flange market in the United States. The plan is the result of a number of market developments, including a reduction in the demand for heavy wide-flange sections caused by reduced high-rise building construction activity, continued low occupancy rates in commercial buildings, trends toward lighter construction in buildings and delays in the rebuilding of the nation's infrastructure.
Structural Products will continue to manufacture heavy wide-flange structurals until it phases out its iron and steelmaking operations. Its 44-inch structural rolling mill complex will be upgraded and modernized and will be sourced with continuously cast steel produced primarily at Pennsylvania Steel Technologies' newly modernized state-of-the-art operations in Steelton, Pennsylvania. The plan should make the division more competitive and should permit production of certain wide-flange sections up to 24 inches. Other benefits include higher utilization of the 44-inch structural rolling mill, higher utilization of the steelmaking facilities at Pennsylvania Steel Technologies, improved product quality and better utilization of Bethlehem's overall financial and other resources.
Pennsylvania Steel Technologies, Inc.
The operations of Pennsylvania Steel Technologies, Inc. are located near Harrisburg, Pennsylvania. Its principal products are railroad rails, specialty blooms, carbon and alloy bars, billets, special sections, and large diameter pipe. Its principal markets are rail transportation, forging, railroad axles, rerollers and oil and gas industries.
Pennsylvania Steel Technologies completed a modernization program in late 1994 designed to establish it as the low cost North American producer of high quality railroad rails, flat bars and specialty blooms. The program included a state-of-the-art DC electric furnace, a ladle furnace, a vacuum degassing unit, and in-line rail head-hardening equipment.
Principal facilities include two electric arc furnaces with a combined annual raw steel production capability of about 1.2 million tons, a continuous bloom caster, a 44-inch blooming mill, a 20-inch bar mill, a 28-inch rail mill, finishing and shipping facilities for long-length (80 foot) rails and an electric fusion welded pipe mill. Pennsylvania Steel Technologies' utilization of raw steel production capability was 38 percent during 1994.
Bethlehem also owns another rail mill located in Monessen, Pennsylvania, which is not operating. Bethlehem has announced it is seeking buyers for the production equipment of this mill.
Joint Ventures
Bethlehem participates in a joint venture, known as Double G Coatings Company, L.P., which operates a 270,000 ton per year sheet coating line near Jackson, Mississippi. The new line produces galvanized and Galvalume(R) coated sheets primarily for the construction market. Sparrows Point provides cold rolled coils for approximately half of Double G's annual capacity and is responsible for marketing its share of the finished product.
Bethlehem also participates in a joint venture which owns and operates a 400,000 ton per year electrogalvanizing line at Walbridge, Ohio. This facility produces corrosion resistant sheet steel primarily for the automobile industry and other consumer durables markets. Burns Harbor provides cold rolled coils for 75 percent of Walbridge's annual capacity and is responsible for marketing its share of the finished product.
In order to better serve the needs of the Burns Harbor Division's automotive customers, Bethlehem participates in a joint venture with a steel service center to produce tailored welded steel blanks for automotive stampings through use of a technologically advanced welding process.
Bethlehem also has indirect equity interests in various iron ore properties. See "Raw Material Properties and Interests" below.
Raw Material Properties and Interests
Iron Ore. Bethlehem has indirect equity interests in various iron ore operating properties, which (excluding tonnages applicable to interests owned by others) it estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 14 million tons of direct shipping iron ore located in Brazil and 446 million tons of iron ore concentrates and pellets, of which 182 million tons are located in Minnesota and 264 million tons in Canada. In addition
to the estimated reserves at operating properties, Bethlehem also has indirect equity interests in undeveloped or nonoperating iron ore properties, which (excluding tonnages applicable to interests owned by others) it estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 29 million tons of direct shipping iron ore located in Brazil and 126 million tons of iron ore pellets located in Minnesota.
The iron ore operating properties in which Bethlehem has interests have mining and processing facilities that are capable of supplying the major portion of Bethlehem's current annual iron ore requirements. However, taking into account the location of Bethlehem's steel operations and the iron ore products best suited to these facilities, Bethlehem has found it advantageous to engage in iron ore sales and exchanges with other consumers and to purchase a portion of its iron ore requirements. These purchases have been from various sources, including sources in which it has ownership interests, under a variety of contractual arrangements extending over varying periods of time.
Bethlehem's share of the annual iron ore pellet production by enterprises in which it had ownership interests, for Bethlehem's use or sale to trade customers, was 13.8 million tons in 1994 and 12.5 million tons in 1993. In addition to these sources, Bethlehem purchased 1.6 million tons and 1.7 million tons of iron ore in 1994 and 1993, respectively, from sources in which it had no ownership interests.
In 1994 Bethlehem obtained approximately 67 percent of its iron ore requirements from operations in which it had ownership interests, compared to 70 percent in 1993. Of the iron ore consumed by Bethlehem in 1994, approximately 56 percent consisted of pellets and 44 percent of sinter.
Through December 31, 1995, Bethlehem is committed to purchase from sources in which it has ownership interests .4 million tons of iron ore in excess of such ownership interests.
Bethlehem had trade sales of iron ore in 1994 and 1993 of 2.3 million tons and 2.0 million tons, respectively. Additional iron ore trade sales commitments through December 31, 1996 presently aggregate 1.1 million tons.
The interests in foreign iron ore properties described above are subject to the risks associated with investments in foreign countries, including the risk of nationalization.
Coal and Coke. Bethlehem owns and leases coal operating properties in West Virginia, which it estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 84 million tons of coal, of which approximately 26 percent and 74 percent, respectively, are metallurgical and steam coal.
In addition to the estimated reserves at operating properties, Bethlehem also owns and leases undeveloped or nonoperating coal properties in Pennsylvania and West Virginia, which it
estimates contained recoverable reserves at December 31, 1994 sufficient to produce at least 168 million tons of coal, of which approximately 89 percent and 11 percent, respectively, are metallurgical and steam coal.
Bethlehem's coal operations produced 3.9 million tons of coal in 1994 and in 1993. Trade shipments of coal were 2.7 million tons in 1994 compared to 2.5 million tons in 1993.
In 1994 Bethlehem obtained approximately 33 percent of its coal requirements from its own mines, compared to 31 percent in 1993. The balance of Bethlehem's requirements is purchased from commercial sources.
Bethlehem continues to operate coke-making facilities at Structural Products, Burns Harbor and at Lackawanna. During 1993 a rebuild was completed of one of the two coke oven batteries at Burns Harbor.
Other Raw Materials. Bethlehem purchases its other raw material requirements from commercial sources.
Transportation
Bethlehem owns five subsidiary shortline railroads which primarily transport raw materials and semifinished steel products within various Bethlehem operations. Bethlehem also owns a flat-bed trucking company serving Bethlehem's steel operations and other facilities.
The Burns Harbor Division operates two 1,000 foot ore vessels (one owned and one under long-term charter), which are used for the transportation of iron ore on the Great Lakes.
PROPERTIES RELATING TO THE STEEL RELATED OPERATIONS SEGMENT
BethForge, Inc. has a facility for the production of forgings and castings located in Bethlehem, Pennsylvania. An ingot teeming facility and vacuum stream degassing unit are being installed for BethForge's use at Pennsylvania Steel Technologies, Inc. in order to take advantage of the new DC electric arc furnace, ladle refining station and vacuum tank degassing unit recently installed as part of Pennsylvania Steel Technologies' modernization program. This new facility, with its lower cost, higher quality ingots, will replace BethForge's existing steelmaking facility during 1995.
CENTEC has a facility for the production of centrifugally cast rolls located in Bethlehem, Pennsylvania.
Bethlehem's BethShip Division has marine construction facilities consisting of a ship repair yard at Sparrows Point, Maryland, and a dry dock facility for the repair and inspection of offshore drill rigs and other vessels at Port Arthur, Texas. The dry dock facility at Port Arthur, Texas is for sale.
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 maintain the competitiveness of its operations and facilities. See "ITEM 1. BUSINESS--General--Capital Expenditures" of this Report for a discussion of Bethlehem's capital expenditures.
All principal operations and facilities are owned in fee by Bethlehem except for two continuous casters at Sparrows Point and Burns Harbor, a coal cleaning and processing facility at High Power Mountain in West Virginia and the drill rig repair facility at Port Arthur, Texas, each of which is being leased. As discussed in Note F to the Consolidated Financial Statements, Bethlehem capitalized the expenditures related to the leases for two continuous casters, and financed the construction of two new hot-dip galvanizing lines at its Burns Harbor and Sparrows Point operations. These two facilities are pledged as collateral for the borrowings.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
Bethlehem is a party to numerous legal proceedings incurred in the ordinary course of its business, including the matters specifically discussed below.
On October 4, 1990, the State of Maryland Department of the Environment (the "MDE") filed a civil action against Bethlehem in the Circuit Court of Baltimore County, Maryland seeking civil penalties for alleged violations of the Maryland air pollution regulations arising out of exceedances of the visible emissions standards established for various sources at the Sparrows Point Division by an October 1987 Consent Order, as amended in June 1989. On April 30, 1991, the MDE filed a complaint in intervention in a civil action filed on April 25, 1991 by the Justice Department on behalf of the United States Environmental Protection Agency (the "EPA") against Bethlehem, alleging violations of the Clean Air Act resulting from alleged violations of Maryland air pollution regulations at the Sparrows Point Division. The complaint in intervention, which was approved by the Court on June 14, 1991, incorporated all of the violations alleged in the MDE complaint. On May 1, 1992, a settlement between the parties to the EPA action was memorialized in a Consent Decree, which was entered by the Court on July 1, 1992. The Consent Decree resolved all of the issues in both the federal and state actions except for a single count in the MDE action dealing with alleged violations from the basic oxygen furnace. Bethlehem and the MDE have entered into discussions concerning potential settlement of the remaining count in the MDE action.
On October 16, 1990, the Justice Department on behalf of the EPA filed a civil action against Bethlehem in the United States District Court for the Northern District of Indiana seeking injunctive relief and civil penalties for alleged violations of the Resource Conservation and Recovery Act, as amended ("RCRA") and the Safe Drinking Water Act with respect to the Burns Harbor Division, including failure to manage certain of the operation's sludges as hazardous wastes, and failure to begin a corrective action program pursuant to the terms of a previously issued underground injection permit. On March 19, 1993, the Court issued a Memorandum Opinion and Order granting Partial Summary Judgment for the government concerning the liability issues in the case and ordering Bethlehem to comply with interim status requirements of RCRA for its terminal polishing lagoons and landfill and to comply with the corrective action requirements of Bethlehem's underground injection well permits. A hearing on the civil penalty issue was concluded on July 21, 1993, and on August 31, 1993, the Court entered a judgment against Bethlehem for $6 million. This sum consisted of $4.2 million for alleged permit violations and $1.8 million for the alleged landfill violations. Bethlehem filed separate Notices of Appeal with the United States Court of Appeals for the Seventh Circuit appealing the trial court's grant of summary judgment and its penalty determination. On September 26, 1994, the Seventh Circuit issued a decision reversing the trial court's summary judgment with respect to the alleged violations concerning the terminal polishing lagoons and landfill, holding that the sludges are not subject to regulation as hazardous waste under RCRA. The decision affirmed the summary judgment with respect to the alleged permit violations. Bethlehem's appeal of the $4.2 million civil penalty amount for the alleged permit violations remains pending before the Seventh Circuit.
On May 28, 1992, the New York State Department of Environmental Conservation ("DEC") sent Bethlehem a proposed Order on Consent to resolve various alleged violations of the New York air pollution control regulations for emissions from the Lackawanna coke ovens. The Order, which originally covered alleged violations for the period from May 1, 1990 through October 7, 1991, has been supplemented to cover all alleged violations of state air pollution regulations up to the date of execution of the proposed Order and to cite Bethlehem for failure to properly operate its sulfur recovery system in the coal chemical by-products plant and failure to properly certify opacity monitors on the under fire stacks of the coke oven batteries. In addition, the currently proposed Order includes a civil penalty of $1.1 million. Bethlehem has entered into negotiations with the DEC to attempt to resolve this matter. If those negotiations are unsuccessful, Bethlehem believes it has meritorious defenses and will vigorously defend the action.
BethEnergy Mines Inc. (formerly Bethlehem Minerals Company), a subsidiary of Bethlehem, is a party to an action entitled Church and Mullins, et al v. Bethlehem Minerals Company, et al. The case involves a dispute concerning title to coal mined by Bethlehem under a parcel of land in eastern Kentucky. The trial court opinion, delivered February 25, 1987, held that the coal in question was owned by the Church and Mullins interests and awarded damages in the amount of $16.9 million. On appeal, on January 12, 1990, the Kentucky Court of Appeals reversed the trial court judgment in part and affirmed it in part, essentially upholding the trial court's finding on the issue of title but limiting the award of damages. The Court of Appeals decision was further appealed to the Supreme Court of Kentucky, and on June 4, 1992, the Supreme Court of Kentucky, by a vote of four to three, reinstated the decision of the trial court. On June 24, 1992, Bethlehem petitioned the Kentucky Supreme Court to reconsider its ruling.
On December 23, 1994, the Court denied the Motion, upholding the original verdict, plus interest. Bethlehem has paid $37.6 million, representing the full amount of the judgment, including interest, into the trial court and intends to seek review by the U. S. Supreme Court. An adverse final resolution of the case will not have any other effect on Bethlehem's results of operations because Bethlehem sold its Kentucky coal operations in 1988.
The Justice Department, the EPA and the Texas Natural Resource Conservation Commission (formerly Texas Water Commission) have instituted a criminal investigation into certain environmental practices involving the operations of the BethShip Sabine Yard in Port Arthur, Texas. The basic operations of the Yard comprise the drydocking of marine vessels to clean and paint exterior surfaces and internal tanks, as well as performing steel hull plate repairs and other general repairs. These operations use blasting grit, paint thinner and other materials. The investigation includes the above operations and the usage, treatment, storage and disposal of those materials. Bethlehem has cooperated with the authorities as to the conduct of the investigation. The Department of Justice has indicated that it intends to institute a criminal action against BethShip Sabine Yard, and Bethlehem is engaged in discussions seeking a resolution of the issues involved.
On January 13, 1993, the EPA issued an Administrative Complaint alleging that Bethlehem had failed to report certain spills of hazardous substances from various locations at the Burns Harbor Division as required by Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). The EPA proposed a civil penalty of $207,750. Bethlehem and the EPA entered into discussions concerning potential settlement of the action. Following meetings in which Bethlehem demonstrated to the EPA that none of the spills involved reportable quantities, the EPA filed motions with the Administrative Law Judge to withdraw all counts of the complaint. On December 14, 1994, the Administrative Law Judge dismissed the complaint.
On June 9, 1994, the EPA issued an administrative Complaint and Notice of Opportunity for Hearing alleging several violations of the polychlorinated biphenyl (PCB) regulations under the Toxic Substance Control Act by Bethlehem at the Sparrows Point Division. The Complaint sets forth a proposed civil penalty of $145,500. On June 30, 1994, Bethlehem filed its Answer and Request for Hearing. Settlement discussions have been initiated between Bethlehem and the EPA. If such discussions do not succeed, Bethlehem believes it has meritorious defenses and will vigorously defend the action.
See "ITEM 1. BUSINESS--General--Environmental Control and Cleanup Expenditures" of this Report for a discussion of Bethlehem's potential responsibilities for environmental cleanup at certain sites under RCRA and CERCLA.
Bethlehem cannot predict with any certainty the outcome of any legal proceedings to which it is a party. However, in the opinion of Bethlehem's management, adequate reserves have been recorded for losses which are likely to result from these 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.
ITEM 4.

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 1994.
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EXECUTIVE OFFICERS OF THE REGISTRANT.
The executive officers of Bethlehem as of March 15, 1995, are as follows:
All of the executive officers have held responsible management or professional positions with Bethlehem or its subsidiaries for more than the past five years.
The By-laws of Bethlehem provide that the officers shall be chosen annually by the Board of Directors and that each officer shall hold office until his successor shall have been elected and shall qualify or until his earlier death or his earlier resignation or removal in the manner provided in the By-laws.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS.
As of March 15, 1995, there were 110,056,163 shares of Bethlehem Common Stock outstanding held by approximately 40,000 stockholders of record. The principal market for Bethlehem Common Stock is the New York Stock Exchange. Bethlehem Common Stock is also listed on the Chicago Stock Exchange. Dividends on Bethlehem Common Stock are paid quarterly when declared by Bethlehem's Board of Directors.
Under the provisions of Bethlehem's 10-3/8% Senior Notes due 2003, Bethlehem's ability to pay dividends on its Common Stock is restricted. See Note L to the Consolidated Financial Statements. At March 15, 1995, $435 million was available for the payment of Common Stock dividends under these provisions.
Bethlehem has not paid a dividend on its Common Stock since the fourth quarter of 1991. In accordance with Bethlehem's policy, future dividends will be determined by the Board of Directors (subject to any applicable restrictions) on the basis of attained results and the business outlook.
The following table sets forth, for the periods indicated, 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 March 15, 1995, as reported in the consolidated transaction reporting system, was $15.625.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The information required by this Item is incorporated by reference from page 22 of Bethlehem's 1994 Annual Report to Stockholders. With the exception of the information specifically incorporated by reference, the 1994 Annual Report to Stockholders is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required by this Item is incorporated by reference from pages 2 to 5 and 7 to 10, inclusive, of Bethlehem's 1994 Annual Report to Stockholders. With the exception of the information specifically incorporated by reference, the 1994 Annual Report to Stockholders is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item is incorporated by reference from pages 11 to 20, inclusive, of Bethlehem's 1994 Annual Report to Stockholders. With the exception of the information specifically incorporated by reference, the 1994 Annual Report to Stockholders is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In addition to the information set forth under the caption "Executive Officers of the Registrant" in Part I of this Report, the information required by this Item is incorporated by reference from pages 2 to 6, inclusive, of Bethlehem's Proxy Statement for the 1995 Annual Meeting of Stockholders. With the exception of the information specifically incorporated by reference, Bethlehem's Proxy Statement is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is incorporated by reference from pages 10 to 16, inclusive, of Bethlehem's Proxy Statement for the 1995 Annual Meeting of Stockholders. With the exception of the information specifically incorporated by reference, Bethlehem's Proxy Statement is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item is incorporated by reference from pages 7 and 17 to 18, inclusive, of Bethlehem's Proxy Statement for the 1995 Annual Meeting of Stockholders. With the exception of the information specifically incorporated by reference, Bethlehem's Proxy Statement is not to be deemed filed as part of this Report for purposes of this Item.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item is incorporated by reference from the material appearing under the heading "Indemnification Assurance Agreements" appearing on page 17 of Bethlehem's Proxy Statement for the 1995 Annual Meeting of Stockholders. With the exception of the information specifically incorporated by reference, Bethlehem's Proxy Statement is not to be deemed filed as part of this Report for purposes of this Item.
PART IV
ITEM 14.

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
----------------------- * Incorporated in this Report by reference from pages 11 to 20, inclusive, of Bethlehem's 1994 Annual Report to Stockholders referred to below.
The Consolidated Financial Statements, together with the report thereon of Price Waterhouse LLP dated January 25, 1995, appearing on pages 11 to 21, inclusive, of the 1994 Annual Report to Stockholders are incorporated by reference in this Form 10-K Annual Report. With the exception of those pages, the 1994 Annual Report to Stockholders is not to be deemed filed as part of this Report for purposes of this Item. The Schedules listed above should be read in conjunction with the consolidated financial statements in such 1994 Annual Report to Stockholders.
Schedules not included have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
Separate financial statements of subsidiaries not consolidated and 50 per cent 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 to Bethlehem's quarterly report on Form 10-Q for the quarter ended March 31, 1994).
(b) By-laws of Bethlehem Steel Corporation, as amended October 1, 1988 (Incorporated by reference from Exhibit (3)(b) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1993).
(4)(a) Rights Agreement, dated as of September 28, 1988, between Bethlehem Steel Corporation and Morgan Shareholder Services Trust Company (Incorporated by reference from Exhibit (4)(a) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1993).
*(10)(a) Excess Benefit Plan of Bethlehem Steel Corporation and Subsidiary Companies, as amended July 29, 1992 (Incorporated by reference from Exhibit 10(a) to Bethlehem's quarterly report on Form 10-Q for the quarter ended June 30, 1992).
*(b) 1988 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated by reference from Exhibit 10(b) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1992).
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* Compensatory plans in which Bethlehem's directors and executive officers participate.
*(c) 1994 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 26, 1994).
*(d) 1994 Non-Employee Directors Stock 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 26, 1994).
*(e) 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.
*(f) Supplemental Benefits Plan of Bethlehem Steel Corporation and Subsidiary Companies, as amended July 29, 1992 (Incorporated by reference from Exhibit 10(b) to Bethlehem's quarterly report on Form 10-Q for the quarter ended June 30, 1992).
*(g) Post-Retirement Retainer Plan for Non-Officer Directors (Incorporated by reference from Exhibit (10)(o) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1992).
(h) Form of Indemnification Assurance Agreement between Bethlehem Steel Corporation and each of its directors and executive officers listed on Schedule A thereto.
(11) Statement regarding computation of per share earnings.
(13) Those portions of the 1994 Annual Report to Stockholders of Bethlehem Steel Corporation which are incorporated by reference into this Form 10-K Annual Report.
(21) Subsidiaries of Bethlehem Steel Corporation.
(23) Consent of Independent Auditors (included on page of this Report).
(24) Power of Attorney.
(27) Financial Data Schedule.
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* Compensatory plans in which Bethlehem's directors and executive officers participate.
(B) REPORTS ON FORM 8-K.
During the quarter ended December 31, 1994, no reports on Form 8-K were filed by Bethlehem.
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 23rd day of March, 1995.
BETHLEHEM STEEL CORPORATION, by /s/ Lonnie A. Arnett -------------------------------------- Lonnie A. Arnett Vice President and Controller
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 23rd day of March, 1995.
REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Bethlehem Steel Corporation
Our audits of the consolidated financial statements referred to in our report dated January 25, 1995 appearing on page 21 of the 1994 Annual Report to Stockholders of Bethlehem Steel Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a)(2) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/s/ PRICE WATERHOUSE LLP
1177 Avenue of the Americas New York, NY 10036
January 25, 1995
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 and No. 33-58021) of our report dated January 25, 1995, appearing on page 21 of the 1994 Annual Report to Stockholders of Bethlehem Steel Corporation which is incorporated by reference in Bethlehem Steel Corporation's Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appears on page of this Form 10-K.
/s/ PRICE WATERHOUSE LLP
1177 Avenue of the Americas New York, NY 10036 March 23, 1995
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (dollars in millions)
(a) Amounts written-off less collections and reinstatements.
(b) Represents the valuation allowance recorded for a $60.5 million ($50 million after-tax) adjustment to equity required to recognize the minimum pension liability. See Note H to the Consolidated Financial Statements.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- -----------
(3)(a) Second Restated Certificate of Incorporation (Incorporated by reference from Exhibit 3 to Bethlehem's quarterly report on Form 10-Q for the quarter ended March 31, 1994).
(b) By-laws of Bethlehem Steel Corporation, as amended October 1, 1988 (Incorporated by reference from Exhibit (3)(b) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1993).
(4)(a) Rights Agreement, dated as of September 28, 1988, between Bethlehem Steel Corporation and Morgan Shareholder Services Trust Company (Incorporated by reference from Exhibit (4)(a) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1993).
*(10)(a) Excess Benefit Plan of Bethlehem Steel Corporation and Subsidiary Companies, as amended July 29, 1992 (Incorporated by reference from Exhibit 10(a) to Bethlehem's quarterly report on Form 10-Q for the quarter ended June 30, 1992).
*(b) 1988 Stock Incentive Plan of Bethlehem Steel Corporation (Incorporated by reference from Exhibit 10(b) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1992).
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* Compensatory plans in which Bethlehem's directors and executive officers participate.
*(c) 1994 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 26, 1994).
*(d) 1994 Non-Employee Directors Stock 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 26, 1994).
*(e) 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.
*(f) Supplemental Benefits Plan of Bethlehem Steel Corporation and Subsidiary Companies, as amended July 29, 1992 (Incorporated by reference from Exhibit 10(b) to Bethlehem's quarterly report on Form 10-Q for the quarter ended June 30, 1992).
*(g) Post-Retirement Retainer Plan for Non-Officer Directors (Incorporated by reference from Exhibit (10)(o) to Bethlehem's Annual Report on Form 10-K for the fiscal year ended December 31, 1992).
(h) Form of Indemnification Assurance Agreement between Bethlehem Steel Corporation and each of its directors and executive officers listed on Schedule A thereto.
(11) Statement regarding computation of per share earnings.
(13) Those portions of the 1994 Annual Report to Stockholders of Bethlehem Steel Corporation which are incorporated by reference into this Form 10-K Annual Report.
(21) Subsidiaries of Bethlehem Steel Corporation.
(23) Consent of Independent Auditors (included on page of this Report).
(24) Power of Attorney.
(27) Financial Data Schedule.
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* Compensatory plans in which Bethlehem's directors and executive officers participate.