For Immediate Release

BETHLEHEM, Pa., October 25, 2001 - In response to media inquiries concerning costs to retirees for health care provided by Bethlehem Steel Corporation, the following statement was released:

Each year, Bethlehem establishes rates for the various health care plans provided to retirees based on the cost incurred in those plans in the prior year. Health care costs have continued to increase, thus affecting rates paid by Bethlehem and premiums paid by retirees for coverage.

Premium increases will be experienced in 2002 by salaried non-represented retirees, particularly those not eligible for Medicare. That group numbers about 5,300 retirees, 1,200 of whom reside in the Lehigh Valley. The rate increase is largest for this retiree population because of the cap established in late 1996 that fixes Bethlehem Steel's health care contributions to this retiree population at the December 31, 1996 support level. The institution of that maximum contribution was well communicated to the affected employee and retiree populations in the fall of 1996.

Bethlehem Steel spends about $180 million each year to provide medical coverage to retirees and their dependents. The corporation continuously seeks ways to improve its financial strength and competitiveness, which includes ongoing analysis of ways to lower its health obligation while not compromising quality.

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