NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Consolidated Financial Statements as of and for the three month periods ended March 31, 1998 and 1997 have not been audited. However, the information reflects all adjustments which, in the opinion of management, are necessary to present fairly the results shown for the periods indicated.  Management believes all adjustments were of a normal recurring nature.

2. These Consolidated Financial Statements should be read together with the 1997 audited financial statements set forth in Bethlehem's Annual Report on Form 10-K filed with the Securities and Exchange Commission.

3. During January 1998, Bethlehem signed an amended merger agreement to acquire Lukens Inc., a leading plate producer.  The consideration to be paid by Bethlehem to Lukens' stockholders will be in a combination of cash and Bethlehem Common Stock. Cash required for the Lukens merger is expected to be about $375 million and will be funded with available cash and short-term borrowings which will be repaid with proceeds from the sale of Lukens' stainless and distribution assets.  We expect to issue about 15 million additional shares of Bethlehem Common Stock.  The value of the Lukens merger, including the assumption of Lukens' debt, is now expected to total about $800 million.  This transaction is expected to close by the end of May 1998.