EX-99.1 3 dex991.txt COMBINED MONTHLY OPERATING REPORT FOR THE MONTH ENDED MAY 31, 2003 Exhibit 99.1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CASE NAME: National Steel Corporation, Et al. CASE NO: 02-08697 THROUGH 02-08738 DECLARATION UNDER PENALTY OF PERJURY I, Kirk A. Sobecki, acting as the duly authorized agent for the Debtor in Possession declare under penalty of perjury under the laws of the United States that I have read and I certify that the figures, statements, disbursement itemizations, and account balances as listed in this Monthly Report of the Debtor are true and correct as of the date of this report to the best of my knowledge, information and belief. /s/ Kirk A. Sobecki --------------------------------------- For the Debtor In Possession Kirk A. Sobecki President DATED: July 18, 2003 3 U.S. TRUSTEE MONTHLY OPERATING REPORT May 1, 2003 to May 31, 2003 I. National Steel Corporation Unaudited Combined Financial Statements A. Combined Statement of Receipts and Disbursements for the month ended May 31, 2003 B. Combined Statement of Net Liabilities in Liquidation as of May 31, 2003 C. Notes to the Unaudited Combined Financial Statements II. Schedule of Receipts and Other Information III. Schedule of Disbursements 4 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 COMBINED STATEMENT OF RECEIPTS AND DISBURSEMENTS (In Millions of Dollars) (Unaudited)

See notes to the combined financial statements 5 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 COMBINED STATEMENT OF NET LIABILITIES IN LIQUIDATION (In Millions of Dollars) (Unaudited)

See notes to the combined financial statements 6 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CASE NOS: 02-08697 THROUGH 02-08738 DEBTOR-IN-POSSESSION AS OF MARCH 6, 2002 NOTES TO THE COMBINED FINANCIAL STATEMENTS Note 1 - Basis of Presentation On March 6, 2002 National Steel Corporation (the "Company") and forty-one of its domestic subsidiaries (collectively "the Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the "Court"). Certain majority owned subsidiaries of the Company have been excluded from the Chapter 11 filings. The case was assigned to the Hon. John H. Squires and is being jointly administered under case number 02-08699. On April 21, 2003 the Court approved a motion to sell substantially all of our assets to United States Steel Corporation ("USS"). Closing was completed on May 20, 2003 and we ceased operations. Since the asset sale, we have conducted no operations other than in accordance with, and as required by, the Bankruptcy Code. In connection with the approval of the sale motion we agreed to file a Chapter 11 liquidation plan with the Court. Under the priority scheme established by the Bankruptcy Code, certain post-petition liabilities and pre-petition liabilities need to be satisfied before shareholders can receive any distribution. There will not be a recovery by our stockholders under any Chapter 11 plan. As a result of the events mentioned above, we adopted the liquidation basis of accounting as of May 31, 2003. The liquidation basis of accounting requires assets to be reported at their estimated realizable values and liabilities to be reported at their estimated settlement amounts. The liquidation basis of accounting requires us to accrue an estimate for expenses to be incurred during the period through closing the Chapter 11 case. We recorded an accrual of approximately $48 million in May 2003 for this estimate. Property and equipment is being reported at current estimated selling values based upon on-going negotiations with potential buyers. Actual amounts realized could differ from these estimates. Liabilities subject to compromise continue to be valued at their historical values until "legal release" by the Court. This is expected to occur once the liquidation plan is final and all assets have been distributed. Preparation of the combined financial statements for the month ended May 31, 2003 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual amounts could differ materially from those estimates. The unaudited financial results presented for the month ended May 31, 2003 are not necessarily indicative of results of operations for the full year. The Annual Report of NSC on Form 10-K for the year ended December 31, 2002 and other reports filed with the Securities and Exchange Commission during 2003 contain additional information and should be read in conjunction with this report. 7 Note 2 - Restricted Cash Restricted Cash consists of funds escrowed at the time of the asset sale as designated by the Court as follows: Real Estate Tax Escrow $ 23.1 Property Tax Escrow 41.7 Unsecured Creditor Escrowed Funds 25.0 Other Escrowed Funds 8.4 Letters of Credit 41.0 ---------------- $ 139.2 ================ Note 3 - Accounts Receivable Accounts receivable activity for the month of May 2003 is as follows: Balance, April 30, 2003 $ 229.2 May Sales 142.8 Sold to USS (229.9) May Collections (137.7) ---------------- Balance, May 31, 2003 $ 4.4 ================ Note 4 - Other Assets Other assets at May 31, 2003 consists of the following: Prepaid insurance $ 2.0 Vendor deposits 2.0 Chapter 11 Professional Fee Retainers 1.0 Prudential Stock 6.2 Environmental and Other 17.3 Other 1.3 ---------------- $ 29.8 ================ Note 5 - Accounts Payable Accounts payable activity for the month of May 2003 is as follows: Balance, April 30, 2003 $ 109.2 May Purchases 112.9 Amounts assumed by USS (133.8) May Payments (41.8) ---------------- Balance, May 31, 2003 $ 46.5 ================ 8 Note 6 -- Liabilities Subject to Compromise The principal categories of claims classified as liabilities subject to compromise are identified below. All amounts below may be subject to future adjustment depending on Court action, further developments with respect to disputed claims, or other events. Additional claims may arise resulting from rejection of additional executory contracts or unexpired leases by the Company. Under an approved final plan of liquidation, these claims may be settled at amounts substantially less than their allowed amounts. Recorded liabilities subject to compromise under the Chapter 11 proceedings consisted of the following: May 31, 2003 ---------------- Accounts payable $ 133.3 Short-term borrowings 100.0 Salaries, wages, benefits and related taxes 97.1 Pension liabilities 2,146.3 Property taxes 49.6 Income taxes 1.7 Other accrued liabilities 48.1 Long-term obligations 36.1 Postretirement benefits other than pensions 425.1 Other long-term liabilities 239.1 ---------------- $ 3,276.4 ================ 9 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ~~CASE NAME: National Steel Corporation, et al. CASE NOs.:02-08697 through 02-08738~~

SCHEDULE OF RECEIPTS For the Month Ending May 31, 2003 Category -------- Operating Receipts $ 105.7 Proceeds from Asset Sale to USS 844.1 Interest Income - Property sales & other receipts - Escrow Deposits - Other - Transfers - ------------- Total $ 949.8 ------------- PAYROLL INFORMATION For the Month Ending May 31, 2003 Gross Payroll for the Period $ 12.2 -------------- Payroll Taxes Due but Unpaid $ 0.3 -------------- Post petition salaries and wages, including employee withholdings and employer related payroll taxes, have been paid in the ordinary course of business. Other post petition taxes, including those for sales and use taxes, property taxes and other taxes have been paid in the ordinary course of business. All insurance policy premiums due, including those for workers compensation and disability insurance have been paid. Accordingly, all such policies remain in force. Details for the above transactions will be provided to the U.S. Trustee upon request. 10 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ~~CASE NAME: National Steel Corporation, et al. CASE NOs.: 02-08697 through 02-08738~~

SCHEDULE OF DISBURSEMENTS

NATIONAL STEEL CORP 8-K