1995 Annual Report

Burns Harbor Division

The principal operations of the Burns Harbor Division are located in Indiana on Lake Michigan, about 50 miles southeast of Chicago, Illinois. Burns Harbor produces hot rolled sheet, cold rolled sheet, corrosion-resistant coated sheet steel and plates. It is a major supplier of sheet and plate products to the automotive, service center, construction, machinery and appliance 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 5.6 million tons, a vacuum degassing facility, two continuous slab casters with a combined annual production capability of approximately 4.0 million tons, a 50 x 90-inch slabbing mill, two sheared plate mills (110-inch and 160-inch), 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 48-inch continuous electrogalvanizing line and a 72-inch hot-dip galvanizing line. The Division operates a cold reducing mill, a continuous pickling line, a galvanizing line and a coke oven battery in Lackawanna, New York, and participates in a joint venture that operates an electrogalvanizing line in Walbridge, Ohio. Bethlehem also participates in two joint ventures with facilities located adjacent to the Burns Harbor operations: Indiana Pickling and Processing Company, which operates a pickling line, and Chicago Cold Rolling, L.L.C., which will operate a reversing cold mill complex.

Sparrows Point Division

The operations of the Sparrows Point Division are located on the Chesapeake Bay near Baltimore, Maryland. Sparrows Point produces hot rolled sheet, cold rolled sheet, galvanized sheet, Galvalume® sheet, tin mill products and steel plate. Its principal markets include construction, containers and service centers. Principal facilities include a sintering plant, a large blast furnace, two basic oxygen furnaces with an annual raw steel production capability of approximately 3.6 million tons, a two strand continuous slab caster with an annual production capability of approximately 3.5 million tons, a 160-inch sheared plate mill, a 68-inch hot-strip mill, three continuous pickling lines, three cold reducing mills (66-inch, 56-inch and 48-inch), continuous and batch annealing facilities, two galvanizing lines, a Galvalume® line, a 48-inch hot-dip galvanizing/Galvalume® line, and tin mill facilities that include tin and chrome plating lines. The Division also participates in a joint venture, known as Double G Coatings Company, L.P., that operates a coating line near Jackson, Mississippi. Sparrows Point provides cold rolled coils to Double G and takes approximately half of Double G's annual capacity of coated sheets.

Bethlehem Structural Products Corporation (BSPC)

Located in Bethlehem, Pennsylvania, BSPC produces structural steel shapes and piling primarily for the construction market from steel produced at Pennsylvania Steel Technologies, Inc. This business is also the only domestic producer of hot rolled sheet piling used in retaining walls and piers. Principal facilities include a 40-inch blooming mill and a 44-inch structural rolling mill. The Division also operates two coke oven batteries that supply coke to Burns Harbor, Sparrows Point and trade customers.

Pennsylvania Steel Technologies, Inc. (PST)

Located in Steelton, Pennsylvania, south of Harrisburg, Pennsylvania, PST uses electric furnace steelmaking and a continuous caster in the production of railroad rails for the rail transportation industry, specialty blooms for the forging industry and flat bars. It is one of only two rail producers in the United States. PST also produces large-diameter pipe for the oil and gas industries and supplies steel to BSPC and BethForge, Inc. Principal facilities include a new DC electric arc furnace with an annual raw steel production capability of approximately 1.3 million tons and an older AC electric arc furnace, a vacuum degassing facility, a continuous bloom caster, a 44-inch blooming mill, a 28-inch rail mill, 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.

Manufacturing, Transportation and Natural Resources

Bethlehem also has the following additional Business Units and transportation and natural resource operations:

BethForge, Inc. (Bethlehem, Pennsylvania). A facility for the production of forgings and castings for the metals, electric power generation and nuclear industries from steel produced at PST.

CENTEC Roll Corporation (Bethlehem, Pennsylvania). A facility for the production of centrifugally cast rolls for the metals industry.

BethShip, Inc. A ship repair yard at Sparrows Point, Maryland.

Transportation. Five shortline railroads serving Bethlehem's steel operations and other facilities; two 1,000 foot vessels - one owned and one under long-term charter - transporting raw materials on the Great Lakes; and a flat-bed trucking company serving Bethlehem's steel operations and other facilities.

Coal. Two mining operations and two cleaning plants in West Virginia producing metallurgical and steam coal.

Iron Ore. Three operations in which Bethlehem has partial interests: one in Minnesota, one in Canada and one in Brazil.

Bethlehem's Segments

For financial reporting purposes, Bethlehem disaggregates the results of its operations and certain other financial information into two segments: Basic Steel Operations and Steel Related Operations. Financial information with respect to these segments is included in Note B to the Consolidated Financial Statements.

Products and services of the Basic Steel Operations segment include a wide variety of steel mill products described in the table on page 7; raw materials, such as iron ore and coal, which are used in Bethlehem's steelmaking operations or sold to trade customers; and railroad and Great Lakes shipping operations, which are used primarily in Bethlehem's steelmaking operations.

The Steel Related Operations segment manufactures and fabricates various iron and steel products for the metals, electric power generation and nuclear industries through BethForge, Inc. and CENTEC Roll Corporation. BethShip, Inc., which is also part of Steel Related Operations, repairs vessels for the marine industry and the United States Government and manufactures industrial products.

The products and services of the Basic Steel Operations and Steel Related Operations segments are distributed through Bethlehem's own sales organizations, which have sales offices at various locations in the United States and Mexico, and through foreign sales agents. Export sales were 5% of total sales in 1995, 2% in 1994 and 2% in 1993.