LTV Reports Fourth Quarter Results
CLEVELAND, March 6 The LTV Corporation
(OTC Bulletin Board: LTVCQ) today announced a fourth quarter 2000 net loss of
$351 million including special charges of $202 million. The loss was centered
in the integrated steel segment and was caused primarily by lower selling
prices resulting from unfairly traded imported steel, lower shipments and
higher natural gas costs in the Integrated Steel segment. Integrated Steel
selling prices were the lowest in twenty years and integrated steel shipments
were 13% below the year ago quarter and 11% below the third quarter of 2000.
The special charges of $202 million were for an asset impairment charge for
LTV's tin mill operations, additional write-offs and costs related to the
acceleration of the previously announced LTV Steel Mining shutdown and the
write-down of electroplating equipment. The fourth quarter 2000 results also
include costs of $4 million related to LTV's Chapter 11 reorganization.
Results were favorably impacted by a $10 million gain on the sale of an
interest in a metal fabrication joint venture. LTV posted a net loss of
$67 million in the fourth quarter of 1999.
William Bricker, chairman and chief executive officer of the LTV
Corporation, said, "LTV has reached agreements with its lenders for
$700 million of debtor-in-possession financing. Achieving this agreement,
which is subject to court approval, enables LTV to focus on restructuring its
steel operations." Mr. Bricker said that LTV had hired Jay Alix & Associates,
a recognized leader in corporate and operational restructuring, to lead the
effort to restructure LTV's integrated steel operations. He said that the
effort would focus on changing the operations to enable them to succeed in
today's highly competitive environment.
The LTV Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in millions, except per share data)
Three Months
Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
Sales (b) $1,069 $1,159 $4,934 $4,218
Costs and expenses:
Cost of products sold (b) 1,056 1,082 4,549 3,877
Depreciation and amortization 72 76 317 274
Selling, general and administrative 58 52 235 189
Results of affiliates' operations 13 2 22 30
Net (gain) loss on sales of equity
affiliates (10) - 74 -
Net interest expense 26 20 99 30
Other (income) expense (1) (3) (65) (12)
Special charges (a) 202 - 409 39
Chapter 11 administrative expense 4 - 4 -
Total 1,420 1,229 5,644 4,427
Income (loss) before income taxes (351) (70) (710) (209)
Income tax provsion (credit) - (3) 9 3
Net income (loss) $(351) $(67) $(719) $(212)
Earnings Per Share Data
Net income (loss) $(351) $(67) $(719) $(212)
Less: Dividends on preferred shares (2) (2) (9) (3)
Net income (loss) available to
common shareholders $(353) $(69) $(728) $(215)
Earnings (loss) per share:
Basic and diluted $(3.54) $(0.69) $(7.28) $(2.15)
Average number of common shares used
in per share calculation (thousands):
Basic and diluted 99,877 100,034 100,085 100,020
Operating Statistics
Raw steel production (million of
tons) 1.686 2.039 8.154 8.404
Steel plant operating rate 77% 94% 94% 97%
Total steel trade shipments
(millions of tons) 1.910 2.140 8.765 8.042
Notes:
(a) The fourth quarter 2000 special charges reflect additional write-offs
and costs associated with the earlier than previously announced
closure of LTV Steel Mining Company, a Minnesota ore mining operation,
an asset impairment charge related to the tin mill operations and a
write down of electroplating equipment.
In the second quarter 2000 the Company recorded special charges of
$207 million to reflect the closure of LTV Steel Mining Company and
the closure of a Cleveland tubing facility.
The 1999 special charges reflect the suspended implementation of a
business systems project and a salaried workforce reduction.
(b) The fourth quarter and year-to-date sales and cost of sales have been
restated to reflect the adoption of EITF #00-10 that requires the
recognition of shipping and handling charges as revenues. Sales and
cost of products sold increased $31 million and $24 million for the
fourth quarter ended 2000 and 1999 and increased $123 and $91 for the
years ended 2000 and 1999, respectively.
The LTV Corporation
CONDENSED CONSOLIDATED BALANCE SHEET December 31,
(in millions) 2000 1999
ASSETS
Current assets
Cash and cash equivalents $68 $72
Receivables 505 538
Inventories 971 976
Other 25 43
Total 1,569 1,629
Investments in affiliates 239 358
Goodwill and other intangibles, net
of accumulated amortization 338 313
Other noncurrent assets 112 147
Property, plant and equipment, net 3,249 3,632
Total $5,507 $6,079
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $45 $416
Other current liabilities 109 559
Long term secured debt in default 667 -
Total 821 975
Noncurrent liabilities
Long-term debt - 1,093
Postemployment health care and
other insurance benefits 46 1,546
Pension benefits 4 563
Other 52 435
Liabilities subject to compromise 3,858 -
Shareholders' equity 726 1,467
Total $5,507 $6,079
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions) Year Ended December 31,
2000 1999
Operating activities
Net income (loss) $(719) $(212)
Adjustments to reconcile income to
net cash provided by operating
activities:
Non-cash special charges and
write down of equity affiliate 493 39
Gain on sale of business (36) -
Depreciation and amortization 317 274
Changes in assets, liabilities and other 61 (83)
Net cash provided by
operating activities 116 18
Investing activities
Acquisitions of Welded Tube and Copperweld - (764)
Capital expenditures (267) (290)
Investments in steel-related businesses (26) (98)
Net sales of marketable securities - 210
Proceeds from sale of business 45 -
Proceeds from sale/leaseback and other 30 13
Net cash used in investing activities (218) (929)
Financing activities
Net borrowings (repayments) 116 818
Issuance of preferred stock - 78
Dividends paid and other (18) (14)
Net cash provided by
financing activities 98 882
Net decrease in cash and cash equivalents $(4) $(29)
SEGMENT RESULTS
The LTV Corporation operates in three reportable segments: Integrated
Steel, Metal Fabrication and Corporate and Other. Integrated Steel
manufactures and sells a diversified line of carbon flat rolled steel products
consisting of hot rolled and cold rolled sheet, galvanized and tin mill
products. The tin mill facilities were sold on March 1, 2001. Sales are made
primarily to the domestic transportation, appliance, container and electrical
equipment markets. Metal Fabrication includes pipe, conduit, mechanical and
structural tubular products for use in transportation, agriculture, oil and
gas, and construction industries. Results for the 2000 periods for this
segment include the acquisitions of Welded Tube and Copperweld Corporation
made in the fourth quarter of 1999. The segment also produces bimetallic wire
for the telecommunications and utilities industries and engineers and
manufactures pre-engineered, low-rise steel buildings systems for
manufacturing, warehousing and commercial applications. Corporate and Other
consists of steel-related joint ventures, primarily Trico Steel Company,
L.L.C. and Cliffs and Associates Limited, which are accounted for using the
equity method and corporate investments and related income and expenses. The
Cliffs and Associates Limited investment was sold in 2000.
The LTV Corporation Three Months Ended Years Ended
($ in millions) December 31, December 31,
2000 1999 2000 1999
Sales:
Integrated Steel $712 $857 $3,375 $3,476
Metal Fabrication 389 326 1,696 830
Less: Intersegment sales (32) (24) (137) (88)
Consolidated sales $1,069 $1,159 $4,934 $4,218
Pretax income (loss):
Integrated Steel $(122) $(67) $(162) $(161)
Metal Fabrication 16 17 77 52
Corporate & Other (39) (20) (212) (61)
Special charges (202) - (409) (39)
Chapter 11 administrative expenses (4) - (4) -
Total (351) (70) (710) (209)
Income taxes - (3) 9 3
Net income (loss) $(351) $(67) $(719) $(212)
Steel shipments (tons in thousands):
Integrated Steel 1,603 1,852 7,319 7,469
Metal Fabrication 417 357 1,858 859
Less: Intersegment shipments (110) (69) (412) (286)
Total steel trade shipments 1,910 2,140 8,765 8,042
