TIII5 OMAITA DAITjY BEKt MONDAY, APIlIli 134 1003.
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FIRST ANNUAL REPORT
United States Steel Corporation
YEAR ENDING DECEMBER 31, 1902.
INCOME ACCOUNT FOR THE YE All.
The total net earning! of all propertied after deducting expendi
ture! for ordinary repalra and maintenance, (approximately
121,000.000), also interest on Bond and fixed charge of the
subsidiary companies, amounted to f 183,30,tKl.t
Less Appropriations for the following purposes, Tit:
Sinking Fundi on Bonds of Subsidiary Companies t (24.064.4S
Depreciation and Extinguishment Funds (regu
lar provisions for the rear) 4,834,710,21
Extraordinary Replacement Funds (regular pro
visions for the year) 9,315.614.76
Special Fund for Depreciation and Improvements 10,000,000.00 24,774.389.4?
nnlance of Ket Eavrnlass for the year f 10H,BS4,8T4.H5
Deduct:
Interest on V. 8. Bteel Corporation Bonds (or the
year $15,187,850.00
Sinking Fund on V. 8. Steel Corporation Bonds
for the year 8,040.000.00 18,227,850.00
I1.la.re WO,30yiS4.8
Dividends for the year on U. 8. Steel Corporation
Stocks, vis:
Preferred, 7 per cent 835,720,177.50
Common, 4 per cent 20,332,690.00 B,051,8$7.B0
I -divided Profits or gnrplas (or the year 934,253,686.75
The actual expenditures for ordinary repairs and maintenance were 121,230,111.11.
It cannot be stated, however, that this specific sum was taken out of the net earning
for the year, because In the manufacturing and producing properties the expenses for
repairs and maintenance enter Into and form part of production cost. And as the
net earnings of such properties are stated on the basis of gross receipts for product
shipped, less the production cost thereof, the income for the year Is charged with
outlays for repairs and malntensnce only to the extent that the production during such
period was actually shipped. But ss the shipments In 1902 equalled practically the
year's production, approximately the entire amount of the expenditures In question
baa been deducted before stating the net earnings as above.
GENERAL PROFIT AND LOSS ACCOUNT.
GROSS RECEIPTS.
Gross Sales and Earning fOOOl 10,479.89
MANUFACTURING AND OPERATING EXPENSES.
Manufacturing and Producing Cost and Operating Expenses 1411,40818.36
Balance I $149,101,661.03
Miscellaneous Manufacturing and Operating gains and ,
Losses (Net) $2,654,189.22
Rentals received 474,781.49 8,118.970.71
Total Net Manufacturing, Producing and Operating Income $151,230,631.74
OTHER INCOME.
Proportion of Net Profits of properties owned but
whose operations (gross revenue, cost of prod
uct, expenses, etc.) are not included In this
statement $1,972,116.45
Interest and Dividends on Investments and on Depos
its, et 1,454,135.60 6,426,461.96
i
Total Income eU 57,057,03.00
GENERAL EXPENSES, '
Administrative, Selling and General Expenses (not In
cluding General Expenses of Transportation
Companies) $13,202,398.89
Taxes 2.391.465.74
Commercial Discounts and Miscellaneous Interest 1,908,027.90 17,601.892.51
Balance of Income $140,166,191.14
INTEREST CHARGES, ETC.
Interest on Bonds and Mortgages of the Subsidiary
Companies $ 1,879,439.91
Interest on Bills Payable and Purchase Money Obli
gations of Subsidiary Go's, and Miscellaneous In
terest 2,234,144.41
Rentals paid 732,848.10 6.844.417.44
Wet Karal-gs for the Tear 183,308, Tea. 73
Includes charges for ordinary maintenance and repalra.
PURCHASE MONEY OBLIGATIONS, RILLS PAYABLE
AND SPECIAL DEPOSITS.
The unsecured liabilities of the subsidiary companies of the above character
were reduced during the fiscal year of 1902 and also during the period from April 1,
1901 (data of organisation of United States Steel corporation), to December 81, 1902,
by the following respective amounts, vlzt
Paid off Between Paid oft Tot. Reduct'n
Apr. 1, 180L and During Tear Apr. 1,1901, to
Dec. 31, if'l. of 19W. Dec. 31, 1902.
Purchase money obligations and bills payable ..$8,671,136.01 $12,884,658.85 $21.63.894.86
Special deposits 1,369,184.66 767,809.09 8,134,948.63
Total $11,047,870,87 $13,662,867.94 $24,700,888.61
The funds for the payment Of the above liabilities were provided entirely from
the surplus net earnings of the organisation no new capital or bonded or other lia
bility has been created In lieu thereof, although practically all of such payments
might properly be funded, as the liabilities were those of the subsidiary companies
prior to or at the time of organisation, which were In turn used for purchase of
property and construction expenditures.
As shown by the general balanoe sheet, the amount of these liabilities outstand
ing on December 81, 1902, Is as follows I
Purchsse money obligations $6,689,418.53
Bill payable 6.202,502.44
Special deposits 4.485,646.68
Total $17,377,467.65
PROPERTY ACCOUNT.
The expenditure made during the year by all the properties and charged to prop
erty account equaled, less credits for property sold, the total sum of $16,686,681.77.
These outlsys were made for the completion of construction work at manufacturing
properties under way when the United States Steel corporation was organised, also
for necessary additions and extensions authorised since Its organization, for the ac
quirement of additional ore and coal property, the opening and development of new
mines and plants,' tor additional equipment and facilities demanded by tbe growing
requirements of the business of the transportation properties, to secure material re
duction in cost of manufacture, transportation of raw and unfinished materials and
distribution of finished products, etc.
The outlays as above are classified by properties as follows:
EXPENDED BT
United States Steel corporation on account of acquirement of stocks of
subsidiary companies $ 258,473.31
Manufacturing properties 9,743,125.78
Ore properties 1,971,642.08
Coal and coke properties 2,048.168.61
Transportation properties 1,711,652.61
Miscellaneous properties Cr. 171,430.52
Totat $16,686,631.77
EMPLOYES AND PAYROLLS.
The average number of employes in the service of all properties during the
entire year was 168,127
The aggregate amount paid during the year for salaries and wages of em
ployes waa $120,628,143
The following shows the classification of the number of employes and pay rolls
between the several departments named:
EMPLOYES OF Number.
Manufacturing properties 125,826
Coal and coke properties 16,519
Iron mining properties 13,465
Transportation properties 11,160
Miscellaneous properties 1,667
i
Total s 168.127
NUMBER OF STOCKHOLDERS.
The following shows the 'number of stockholders In the United States Bteel cor
poration in March, 1903, In comparison with the number at corresponding date In
preceding yean
1902.
Preferred 5,196
Common , 17,728
1903. Increase.
81,799 6,603
26,830 9.107
Total 48,019 68.629 15.610
The following does not Include the subscriptions tor preferred stock by 27,879 em
ployes under plsn offered them tinker date of December 11, 1902.
MAINTENANCE, RENEWALS AND EXTRAORDINARY
REPLACEMENTS.
The physical condition of the properties has been fully maintained during tbe
year, the coat of which has been charged to current operations. The amount ex
pended by all properties during the year for maintenance, renewals and extraordinary
replacements aggregated $29,157,010.73.
This total la apportioned as follows:
Ordinary
EXPENDED ON Maintenance Extraordinary
and Repair. Replacements. Totat.
Manufacturing Properties $14,099,217.94 $4,971,230.41 $23,077,441.41
Coal and Coke Properties 811,804.77 94,664.19 976.469,16
Iron Ore Propertle 15S.220.1I 156,320.11
Transportation Properties:
Railroads 2,644,664.27 607.97.88 4.152,612.15
Steamships and Docks 213,801.37 191,317.80 606,119.17
Miscellaneous. Properties 15,619-66 63,612.95 89.111.71
Total $21,210,118.11 $7,926,791.60 $29,157,010.71
These expenditures were paid from funds provided from earnings to cover re
quirements of the character Included herein.
VOLUME OF BUSINESS.
The volume of business done by all companies during the year, including sles
between the companies; and the gross receipta of transportation and mtecellanebua
properties, aggregated tbe total sum of $560,610,471.19.
, PRODUCTION.
The production of the several properties for the year 1902 was as follows:
IRON ORE MINED: Tons. Tons.
From Marquette Range 1,417.370 ,
From Menominee Range 1,476,754
From Gogebic Range 1,064,492
From verminion Range 1,067,627
From Mesaba Range .......... 7.778,026 16,063,179
COKE MANUFACTURED 9.621.567
COAL MINED, not including that used la tnaklng coke 709,367
BLAST FURNACE PRODUCTS t
Pig Iron 7.862,112
Spiegel 121,266
Ferro-Mangaheee and Silicon 44,452 7,976.630
8TEBL INGOT PRODUCTIONl ,
Bessemer Ingot .'. , 6, 769.110
Open Hearth Ingots 1,984,708 9,743.911
ROLLED AND OTHER FINISHED PRODUCTS FOR
BALE. . .
" . Ttns.
Steel Rail..' 1.920.786
Blooms, Billet. Slabs. Sheet and Tin Plats Bar 782.627
Plates 649,641
Merchant Bteel, Skelp, Shapes, Hoops, Band and Cotton Tie M64.560
Tubing and Pipe 744.062
Rods 109,230
Wire and Products of Wire 1,122,809
Sheets Black, Oalvanlxed and Tin Plate 783.576
Finished Structural Work 481.029
Angle and Splice Bars and Joint , 189,954
Spikes, Bolt, Nut and Rivet 42,984
Axle 136,787
Sundry Iron and Steel Product 29,177
- .
Total .'. 1,197,212
I.."'
Spelter M 21.982
Copperas . 14,224
Bbls.
Cement 486.167
ORDERS ON HAND. .,
The tonnage of unfilled order on the book. at tie dose of 1902 equaled 6,847.251
tons of all kinds of manufactured products. At the corresponding date In preceding
years the order booked equaled 4,497.749 tons. In many of the classes of heavier
products, like rails, plates and structural material, practically the entire capacity of
the mills I sold up until nearly the end of the) year 1903.
ASSETS.
Property Account:
Properties own4 and operated by the several companies ' 11,458,035,551.87
Leu Surplus and Subsidiary Companies at date
of acquirement of their Stocks by the U. S.
Steel Corporation. April 1, 1001 $11,356,111.41
Charged off to Depreciation and and Extinguish
ment Fund 12,011,856.53
128,367,967.04
Deferred Charges to Operations:
Expenditures for Improvement. Explorations, Stripping and Development at Mines, and
for advanced Mining Royalties, chargeable to future operations of the properties
Trustees of Sinking Funds:
Cash held by Trustees on accouut of Bond Sinking Funds
($4,022,000 par value of Redeemed Bond held by Trustees not treated as an asset.)
Investments:
Outside Real Estate and Other Property -. $1,874,872.89
Insurance Fund Assets 920,615.84
81,325,207,883.43
3,178,759.67
489.246.14
2,804,488.24
Current Assets:
Inventories $104,390,844.74
Accounts Rec-lvnble 48.944.189.68
Bills Receivable 4J63.201.13
Agents' Balances 1,001,818.90
Sundry Marketable Stocks and Bonds 6,001,340.16
Cash 60,163,172.48
214.8J4,157.18
LIABILITIES.
Capital Stock of U. S. Steel Corporation:
Common $508,802,500.00
Preferred B10.28U0aoO
Capital Stocks of Subsidiary Companies not held by U. S. .' ,
Steel Corporation (par value): t
Common Stocks $41,400.00
Preferred Stocks 72,600 0O
Lake Superior Consolidated Iron Mines, Subsidiary Companies ' 08,714.88
Bonded and Debenture Debt: ...
United States Steel Corporation Bonds $308,757,000.00
Less Redeemed and held by Trustee of Sinking Fund 2,008,000.00
Balance held by the Public $301,059,000.00
Subsidiary Companies' Bonds $00,078,900.75
Less Redeemed and held by Trustees of Sinking Funds... 1,324,000.00 ' .
,.. V
Balance held by the Public $50,654,900 75
Debenture Strip, Illinois Steel Company 40,426.02
Mortgages and Purchase Money Obligations of Subsidiary Com patties: .
Mortgages $2,901,182.07
Purchase Money Obligations 6,689,418.53
Current Liabilities:
Current Accounts Payable and Pay Roll $18,675,080.13
Bills and Loans Payable 6,202.502.44
Special Deposits due Employes and others 4,488,540.58
Accrued Taxes not yet due 1,051.605.42
Accrued Interest and Unrepresented Coupons 5,808,572.96
Preferred Stock Dividend No. 7. payable February 10. 1903 8,020,010,25
Common Stock Dividend No. 7, payable March 30, 1903 6,083,025.00
$1,018,883,600.00
318,91438
360,754,326.77
9490,580,60
49,829 ,21.78
Audited and found correct,
PRICE, WATERHOU8H CO.,
Auditor.
New Tork. March 12. 1908.
Total Itseit r $1,546,544,234.65
Total Capital and Current Liabilities ..........$1,438,970,643.53
Sinking and Keserve Funds: , ''
81nking Fund on U. 8. Steel Corporation Bonds...; $1,773,883.83
Sinking Fuuds on Bonds of Subsidiary Companies 217,344.36
Depreciation and Extinguishment Funds 1.707,610.50
Improvement and Replacement Fund '. 16,664,190.90
Contingent and Miscellaneous Operating Fund 8,418.788.50
Insurance Fund 1,530,485.25
Bond Sinking Funds with Accretions
Represented by Cash, and by redeemed bonds not tren ted a assets (see contra .
Undivided Surplus of U. 8. Steel Corporation and Subsidiary Comparitea:
Capital Surplus provided In organization of U. 8. Steel Corporation $25,000,000.00
Surplus accumulated by all companies lnc organisation of U. S. Steel
Corporation 62,874.607.05 77,874,597.05
25,217,747.93
4,481,246,14
Total Liabilities 11,546,544,234.65
NOTE. In preliminary Report submitted to stockholder at the First Anuual Meeting, February 17, 1002, the
accumulated surplus of all subsidiary companies to November 30, 1001, was shown a $174,844,220.82. This total,
however, Included the surplus of tbe subsidiary companies at time of the original acquisition of their stock by
United State Steel Corporation In 1001, which surplus in this balance sheet la stated In diminution of Property
Account.
Complete copies of the detailed Annual Report in pamphlet form will be mailed stockholders on and after April 13th. Copies may al
be obtained after that date at the office of the Secretary, 71 Broadway, New York.
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