<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31, 1997 Commission File No. 1-4368
THE LTV CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-1070950
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 Public Square 44114-2308
Cleveland, Ohio (Zip Code)
Registrant's telephone number, including area code: (216)622-5000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
104,523,992 shares of common stock
(as of April 21, 1997)
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1997 1996
----------- ---------
<S> <C> <C>
SALES $ 1,071.9 $ 993.1
Costs and expenses:
Cost of products sold 931.2 879.7
Depreciation and amortization 67.6 67.1
Selling, general and administrative 37.1 34.1
Net interest and other income (8.7) (9.0)
--------- -------
Total 1,027.2 971.9
--------- -------
INCOME BEFORE INCOME TAXES 44.7 21.2
Income tax provision:
Taxes payable 1.8 0.4
Taxes not payable in cash 16.1 7.5
--------- -------
Total 17.9 7.9
--------- -------
NET INCOME $ 26.8 $ 13.3
========= =======
EARNINGS PER SHARE
Primary $ 0.25 $ 0.12
Fully diluted $ 0.25 $ 0.12
CASH DIVIDENDS PER COMMON SHARE $ 0.03 $ --
</TABLE>
- --------------
See notes to consolidated financial statements.
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<TABLE>
<CAPTION>
THE LTV CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions, except per share data)
March 31, December 31,
1997 1996
-------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 172.1 $ 107.4
Marketable securities 480.9 566.4
-------- --------
Total cash and marketable securities 653.0 673.8
Receivables, less allowance for doubtful accounts 427.3 400.3
Inventories:
Products 593.0 570.6
Materials, purchased parts and supplies 194.7 231.7
-------- --------
Total inventories 787.7 802.3
Prepaid expenses, deposits and other 18.0 11.9
-------- --------
Total current assets 1,886.0 1,888.3
-------- --------
INVESTMENTS IN AFFILIATES 263.6 256.3
OTHER NONCURRENT ASSETS 146.7 149.1
PROPERTY, PLANT AND EQUIPMENT 3,924.9 3,871.3
Allowance for depreciation (816.8) (754.5)
-------- --------
Total property, plant and equipment 3,108.1 3,116.8
-------- --------
$5,404.4 $5,410.5
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 301.7 $ 351.1
Accrued employee compensation and benefits 375.8 372.9
Other accrued liabilities 184.4 175.0
-------- --------
Total current liabilities 861.9 899.0
-------- --------
NONCURRENT LIABILITIES
Long-term debt 153.7 152.6
Postemployment health care and other insurance benefits 1,596.3 1,596.0
Pension benefits 650.5 647.9
Other 403.9 404.3
-------- --------
Total noncurrent liabilities 2,804.4 2,800.8
-------- --------
SHAREHOLDERS' EQUITY
Convertible preferred stock (stated value $50.0) 0.5 0.5
Common stock (par value $0.50 per share) 52.8 52.8
Additional paid-in capital 1,037.3 1,021.1
Retained earnings 669.8 646.7
Treasury stock (828,781 shares at cost) (10.4) --
Minimum pension liability adjustment and other (11.9) (10.4)
-------- --------
Total shareholders' equity 1,738.1 1,710.7
-------- --------
$5,404.4 $5,410.5
======== ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
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THE LTV CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1997 1996
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 26.8 $ 13.3
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 67.6 67.1
Income tax provision not payable in cash 16.1 7.5
Defined benefit pension expense 11.0 18.2
Postemployment benefit payments
less (more) than related expense 0.3 (0.3)
Changes in assets, liabilities and other (60.5) 31.2
-------- --------
Net cash provided by operating activities 61.3 137.0
-------- --------
INVESTING ACTIVITIES
Capital expenditures (58.9) (43.2)
Investment in steel-related businesses (10.5) (43.6)
Net sales (purchases) of marketable securities 85.5 (71.8)
Proceeds from dispositions of discontinued
operations, businesses and properties 0.3 5.9
Other 1.8 (3.5)
-------- --------
Net cash provided by (used in) investing activities 18.2 (156.2)
-------- --------
FINANCING ACTIVITIES
Pension funding to restored plans (0.5) (43.2)
Preferred dividends paid (0.6) (0.6)
Common dividends paid (3.2) --
Purchase of treasury shares (10.4) --
Other (0.1) --
-------- --------
Net cash used in financing activities (14.8) (43.8)
-------- --------
Net increase (decrease) in cash and cash equivalents 64.7 (63.0)
Cash and cash equivalents at beginning of period 107.4 265.9
-------- --------
Cash and cash equivalents at end of period $ 172.1 $ 202.9
======== ========
Supplemental cash flow information is presented as follows:
Interest payments $ 0.6 $ 2.8
Income tax payments 1.2 0.3
Capitalized interest 3.9 1.8
Purchases of marketable securities 748.8 1,557.6
Sales and maturities of marketable securities 836.6 1,489.4
</TABLE>
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See notes to consolidated financial statements.
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THE LTV CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
NOTE (1) - The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and disclosures required by generally accepted accounting principles for
complete financial statements. All adjustments that are, in the opinion of
management, necessary for a fair presentation have been made and are of a
recurring nature unless otherwise disclosed herein. Certain prior period amounts
have been reclassified to conform with the current period presentation. The
results of operations for the interim periods are not necessarily indicative of
results of operations for a full year. For further information, refer to the
consolidated financial statements and the notes thereto for the year ended
December 31, 1996 included in the LTV Annual Report to Shareholders incorporated
by reference into the 1996 Annual Report on Form 10-K filed with the Securities
and Exchange Commission.
NOTE (2) - The Company's income tax provision was $17.9 million in the first
three months of 1997 compared with $7.9 million in 1996. Included in the 1997
and 1996 first three months' income tax provisions are federal and state income
tax expense amounts of $16.1 million and $7.5 million, respectively, which do
not result in cash payments and were reported as increases to the additional
paid-in capital account of shareholders' equity. The Company's tax rate for the
first quarter of 1997 is higher than the prior year primarily due to higher
federal and state cash taxes.
NOTE (3) - In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share," which requires changes to the method
currently used to compute earnings per share. The impact of Statement No. 128 on
the calculation of primary and fully diluted earnings per share is not expected
to be material.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS - COMPARISON OF FIRST QUARTER 1997 AND 1996
Sales
- -----
Sales of $1.072 billion in the first quarter of 1997 increased by $79
million (8%) from the first quarter of 1996. First quarter 1997 steel shipments
of 2.1 million tons increased by 85,000 tons (4%) from the first quarter of
1996. The overall sales increase in the first quarter of 1997 also included
higher average selling prices of 4%.
Nonsteel sales in the first quarter of 1997 of $28.1 million were $2
million higher than the first quarter of 1996.
Production and Costs
- --------------------
Raw steel production of 2.2 million tons in the first quarter of 1997
increased by 33,000 tons compared with the first quarter of 1996. The average
operating rate (of AISI defined capacity) at the Company's steelmaking
facilities during the first quarter of 1997 was 108% compared with 105% in 1996.
Cost of products sold as a percentage of sales decreased to 87% in the
first quarter of 1997 from 89% in the first quarter of 1996, primarily due to
the higher average selling prices in the 1997 period, partially offset by
increased ore production costs and higher steel production costs. The higher
steel production costs were principally due to labor, and outside processing and
warehousing.
Income Taxes
- ------------
For information regarding income taxes, see Note (2) to the
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
The Company's sources of liquidity include cash and cash equivalents,
marketable securities, cash from operations, amounts available under credit
facilities and other external sources of funds. Management believes that these
sources are sufficient to fund the current requirements of working capital,
capital expenditures, investments in joint ventures, pensions and postemployment
health care.
During the first three months of 1997, cash provided by operating
activities amounted to $61.3 million. In the first three months of 1997, total
cash and cash equivalents increased by $64.7 million, primarily due to the net
sales of marketable securities of $85.5 million. Major uses of cash during the
first three months of 1997 included capital expenditures of $58.9 million,
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investments in steel-related businesses of $10.5 million, and $10.4 million for
the repurchase of Company stock. Since December 31, 1996, total cash, cash
equivalents and marketable securities have decreased by $20.8 million to $653.0
million at March 31, 1997.
The Company's receivables credit facility permits borrowings of up to
$320 million for working capital requirements and general corporate purposes,
$100 million of which may be used to issue letters of credit. At March 31, 1997,
$307.2 million was permitted to be borrowed; however, no borrowings were
outstanding and letters of credit outstanding amounted to $23.3 million under
this facility. The Company also has a separate letter of credit facility that
provides for the issuance of up to $150 million in letters of credit. At
March 31, 1997, letters of credit totaling $75.6 million were outstanding under
this facility.
The Company's long-term debt and credit facilities' agreements contain
various covenants that require the Company to maintain certain financial ratios
and amounts. These agreements, as well as the Company's agreement with the
Pension Benefit Guaranty Corporation (the "PBGC Agreement"), place certain
restrictions on payments of dividends, share repurchases, capital expenditures,
investments in subsidiaries and borrowings. Under the terms of the most
restrictive debt covenant, approximately $165.7 million of retained earnings are
available for common stock dividend payments at March 31, 1997. Substantially
all of the Company's receivables and inventories are pledged as collateral under
these debt agreements. The Company does not believe that the restrictions
contained in these financial and operating covenants will cause significant
limitations on its financial flexibility.
LTV competes directly with domestic and foreign integrated flat rolled
carbon steel producers and minimills, and indirectly with producers of plastics,
aluminum and other materials such as ceramics and wood, which sometimes can be
substituted for flat rolled carbon steel in manufacturing and construction.
Certain companies have announced plans or begun construction of additional
minimills to produce flat rolled products. Minimills are relatively efficient,
low-cost producers that generally produce steel from scrap in electric furnaces,
have lower employment and environmental costs, and generally target regional
markets. Thin slab casting technologies have allowed some minimills to enter
certain flat rolled markets that have traditionally been supplied by integrated
producers. The primary factors that affect competition include price, quality,
delivery and customer service. LTV targets quality-critical, value-added
applications and believes it is able to differentiate some of its products from
those of competitors on the basis of product quality, on-time delivery
performance, and product and technical support to customers. LTV will continue
to require substantial funds in future years to maintain and improve its steel
operations in order to compete with steel substitutes, minimills and other fully
integrated steelmakers. Capital expenditures for the full year are estimated to
total approximately $320 million. In the first quarter of 1997, the Company
invested $10.0 million in Cliffs and Associates, Ltd, a joint venture to produce
direct reduced iron (DRI) briquettes in the Republic of Trinidad and Tobago.
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ENVIRONMENTAL LIABILITIES AND RELATED COSTS
LTV is subject to changing and increasingly stringent environmental
laws and regulations concerning air emissions, water discharges and waste
disposal, as well as remediation activities that involve the clean-up of
environmental media such as soils and groundwater ("remediation liabilities").
As a consequence, the Company has incurred, and will continue to incur,
substantial capital expenditures and operating and maintenance expenses in order
to comply with such requirements. Additionally, if any of the Company's
facilities are unable to meet required environmental standards or laws, those
operations could be temporarily or permanently closed.
The Company spent $2.7 million during the first three months of 1997
for environmental clean-up and related matters at operating and idled
facilities, and at March 31, 1997, has a recorded liability of $82.3 million for
known and identifiable environmental and related matters. As the Company becomes
aware of additional matters or obtains more information, it may be required to
record additional liabilities for environmental remediation. The Company also
spent $6.8 million in the first three months of 1997 for environmental
compliance-related capital expenditures and expects it will be required to spend
an average of approximately $35 million annually in capital expenditures during
the next five years to meet environmental standards.
OUTLOOK
Through the end of the first quarter of 1997, the Company has
continued to experience a high demand for its products and a strong rate of
incoming orders, although this may not continue in the future due to rising
import levels and a strengthening dollar. These factors, along with industry
capacity additions, could negatively affect future market prices for the
Company's products.
This report includes forward-looking statements. Our use of the words
"outlook," "believes," "estimate," "expect" and similar words are intended to
identify these statements as forward looking. These statements represent our
current judgment on what the future holds. While we believe them to be
reasonable, a number of important factors could cause actual results to differ
materially from those projected. These factors include relatively small changes
in market price or market demand; changes in raw material costs; increased
operating costs; loss of business from major customers, especially for high
value-added product; unanticipated expenses; substantial changes in financial
markets; labor unrest; unfair foreign competition; major equipment failure; or
unanticipated results in pending legal proceedings. In this regard, we also
direct your attention to factors discussed above in the Management's Discussion
and Analysis.
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PART II
ITEM 1. LEGAL PROCEEDINGS.
EPA - Pittsburgh Coke Battery. LTV Steel Company, Inc. ("LTV Steel")
received a Notice of Violation ("NOV") issued by the U.S. EPA alleging
"continuous and substantial exceedances" of certain emission standards at LTV
Steel's Pittsburgh coke battery during the period May 1 through December 31,
1996. LTV Steel is subject to a maximum penalty of $25,000 per day for each
violation.
Thomson Litigation. The time for petitioning for a rehearing of the
decision of the U.S. Court of Appeals for the Second Circuit, which affirmed the
decisions of the lower federal courts in the "Thomson Litigation" referred to in
Item 3 of LTV's Report on 10-K for the year ended December 31, 1996, has
expired. LTV and Thomson have had discussions regarding the appropriate method
of calculation of interest on the judgment in LTV's favor. However, the time
period in which Thomson could petition for a writ of certiori to the U.S.
Supreme Court does not expire until June 23, 1997.
ITEM 5. OTHER INFORMATION
BY-LAW AMENDMENTS:
ADVANCE STOCKHOLDER NOTICE REQUIREMENTS AND OTHER PROVISIONS
In 1996, LTV adopted amendments to its By-Laws intended to promote the
efficient functioning of its annual meetings. The amendments confirm LTV's right
to determine the time, place and conduct of stockholder meetings, require
advance notice by mail or delivery to LTV of stockholder proposals or director
nominations for annual meetings and require persons wishing to conduct a
solicitation of written consents of stockholders or to call a special meeting of
stockholders to apply to the Board of Directors to set a record date for the
consent solicitation or to determine whether the requisite number of
stockholders desire to call a special meeting.
Under the amended By-Laws, stockholders must provide LTV with at least 60
days, but no more than 90 days, notice prior to the announced Tentative Meeting
Date of (i) business the stockholder is proposing for consideration at that
meeting and (ii) persons the stockholder intends to nominate for election as
directors at that meeting.
REQUIRED APPROVAL FOR CERTAIN PURCHASES OF
COMMON STOCK AND SERIES A WARRANTS
For the purpose of preserving LTV's ability to utilize certain favorable
tax attributes, Article Ninth of LTV's Restated Certificate of Incorporation
prohibits, with certain limited exceptions, any unapproved acquisition of Common
Stock or Series A Warrants that would cause the ownership interest percentage of
the acquirer or any other person to increase to 4.5% or above. A person's
ownership interest percentage for purposes of Article Ninth is determined by
reference to specified federal income tax principles, including attribution of
shares from certain related parties, deemed exercise of rights to acquire stock
(such as the Company's Series A Warrants) and aggregation of shares purchased
by persons acting in concert. PURCHASES OF COMMON STOCK OR SERIES A WARRANTS
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FROM ANY PERSON OTHER THAN THE COMPANY ARE SUBJECT TO THE LIMITATIONS IMPOSED BY
ARTICLE NINTH, AND ANY UNAPPROVED PURCHASE IN EXCESS OF THE AMOUNTS PERMITTED BY
ARTICLE NINTH WILL BE VOID AB INITIO. A PROSPECTIVE PURCHASER OF COMMON STOCK OR
SERIES A WARRANTS WHO BELIEVES THAT IT MAY BE SUBJECT TO THE LIMITATIONS IMPOSED
BY ARTICLE NINTH SHOULD CONSULT WITH THEIR ADVISORS OR LTV IN ADVANCE OF
ACQUIRING SUCH SECURITIES TO DETERMINE IF ADVANCE APPROVAL MUST BE OBTAINED FROM
LTV'S BOARD OF DIRECTORS.
LTV's Board of Directors was required by Article Ninth of LTV's Restated
Certificate of Incorporation to consider during 1996 whether to waive the
transfer restrictions in Article Ninth with respect to all future transfers of
securities. At its October 1996 meeting, the Board of Directors, after
considering all relevant factors, determined not to waive Article Ninth at this
time.
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ITEM 6. EXHIBITS AND REPORTS ON 8-K
(a) Exhibits
Certain of the exhibits to this Report are hereby incorporated by
reference, as specified below, to other documents filed with the Commission by
LTV. Exhibit designations below correspond to the numbers assigned to exhibit
classifications in Regulation S-K.
(2)-(1) - The LTV Second Modified Joint Plan of
Reorganization (incorporated herein by
reference to Exhibit (28)(a)-(3) to
LTV's Annual Report on Form 10-K for the
Fiscal Year ended December 31, 1992,
filed with the Commission (File No.
1-4368) on March 31, 1993)
(2)-(2) - Confirmation Order of the United States
Bankruptcy Court for the Southern
District of New York entered on May 27,
1993, confirming the LTV Second Modified
Joint Plan of Reorganization (which
includes, as Exhibit C to the
Confirmation Order, amendments to the
LTV Second Modified Joint Plan of
Reorganization) (incorporated herein by
reference to Exhibit 2(2) to LTV's
Current Report on Form 8-K, filed with
the Commission (File No. 1-4368) on June
7, 1993)
(3)-(1) - Restated Certificate of Incorporation of
LTV dated June 28, 1993 (incorporated
herein by reference to Exhibit 3.1 to
LTV's Registration Statement on Form S-1
[Registration No. 33-50217])
(3)-(2) - Certificate of Designations for Series B
Preferred Stock (incorporated herein by
reference to Exhibit 4 to SMI America, Inc.'s
13D Filing)
(3)-(3) - Amendments to LTV's By-Laws adopted on
October 25, 1996 (incorporated herein by
reference to Exhibit (3)-(1) to LTV's Report
on Form 10-Q for the quarter ended September
30, 1996)
(10)-(1) - LTV Executive Benefit Plan as amended and
restated effective January 1, 1985
(incorporated herein by reference to Exhibit
(10)(c)-(2) to LTV's Report on Form 10-K
for the year ended December 31, 1985)
(10)-(2) - Amendment to LTV Executive Benefit Plan
adopted November 20, 1987 (incorporated
herein by reference to Exhibit (10)(c)-(3) to
LTV's Report on Form 10-K for the year
ended December 31, 1987)
(10)-(3) - LTV Excess Benefit Plan dated as of January
1, 1985 (incorporated herein by reference to
Exhibit (10)(c)-(5) to LTV's Report on Form
10-K for the year ended December 31, 1984)
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(10)-(4) - Settlement Agreement dated as of June 28, 1993
between LTV, the PBGC, the Initial LTV Group (as
defined in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit 10.10 to LTV's
Report on Form 10-Q for the quarter ended June
30, 1993)
(10)-(5) - Assignment, Pledge and Security Agreement dated as
of June 28, 1993 between LTV Steel Company, Inc.
and the PBGC (incorporated herein by reference to
Exhibit 10.11 to LTV's Report on Form 10-Q for
the quarter ended June 30, 1993)
(10)-(6) - Securities Purchase Agreement dated as of May 26,
1993 by and among LTV, LTV Steel Company, Inc. and
SMI America, Inc. (incorporated herein by
reference to Exhibit 2 to SMI America, Inc.'s 13D
Filing)
(10)-(7) - Common Stock Registration Rights Agreement dated
as of June 28, 1993 by and between LTV and SMI
America, Inc. (incorporated herein by reference to
Exhibit 5 to SMI America, Inc.'s 13D Filing)
(10)-(8) - Consultation and Management Participation
Agreement dated as of June 28, 1993 between LTV
and Sumitomo Metal Industries, Ltd. (incorporated
herein by reference to Exhibit 6 to SMI America,
Inc.'s 13D Filing)
(10)-(9) - L-S Exchange Right and Security Agreement dated as
of June 28, 1993 by and among LTV/EGL Holding
Company, Sumikin EGL Corp., LTV, SMI America Inc.,
and Sumitomo Metal USA Corporation (incorporated
herein by reference to Exhibit 7 to SMI America,
Inc.'s 13D Filing)
(10)-(10) - Letter of Credit Agreement dated as of October 12,
1994 among LTV Steel Company, Inc., Continental
Emsco Company, LTV Steel Mining Company, LTV Steel
Tubular Products Company, LTV, various financial
institutions and BT Commercial Corporation
(incorporated herein by reference to Exhibit
(10)-(12) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(11) - Subsidiary Guaranty dated as of October 12, 1994
by Georgia Tubing Corporation, Youngstown Erie
Corporation, Erie B Corporation and Erie I
Corporation for the benefit of BT Commercial
Corporation as agent (incorporated herein by
reference to Exhibit (10)-(13) to LTV's Report on
Form 10-Q for the quarter ended September 30,
1994)
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(10)-(12) - Collateral Account Agreement dated as of October
12, 1994 among LTV Steel Company, Inc.,
Continental Emsco Company, LTV Steel Mining
Company, LTV Steel Tubular Products, LTV and BT
Commercial Corporation as collateral agent
(incorporated herein by reference to Exhibit
(10)-(14) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(13) - Inventory Security Agreement dated as of June 28,
1993 and amended and restated as of October 12,
1994 among LTV, LTV Steel Company, Inc., LTV Steel
Mining Company, Continental Emsco Company, LTV
Steel Tubular Products Company and BT Commercial
Corporation as agent (incorporated herein by
reference to Exhibit (10)-(15) to LTV's Report on
Form 10-Q for the quarter ended September 30,
1994)
(10)-(14) - Inventory Intercreditor Agreement dated as of June
28, 1993 and amended and restated as of October
12, 1994 among BT Commercial Corporation as agent
for the Lenders and SMI America, lnc. as agent for
the Noteholders (incorporated herein by reference
to Exhibit (10)-(16) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(15) - Intercreditor Collateral Account Agreement dated
as of October 12, 1994 by and among LTV Steel
Company, Inc., LTV and BT Commercial Corporation
(incorporated herein by reference to Exhibit
(10)-(17) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(16) - Pledge Agreement dated as of October 12, 1994
between LTV, LTV Steel Company, Inc., Continental
Emsco Company, LTV Steel Tubular Products Company,
Georgia Tubing Corporation and BT Commercial
Corporation (incorporated herein by reference to
Exhibit (10)-(18) to LTV's Report on Form 10-Q for
the quarter ended September 30, 1994)
(10)-(17) - Amended and Restated Subordination Agreement dated
as of June 28, 1993 and amended and restated as of
October 12, 1994 among the PBGC, BT Commercial
Corporation and Chemical Bank (incorporated herein
by reference to Exhibit (10)-(19) to LTV's Report
on Form 10-Q for the quarter ended September 30,
1994)
(10)-(18) - Amendments Nos. 1 and 2 to the Securities Purchase
Agreement dated as of May 26, 1993 among LTV, LTV
Steel Company, Inc. and SMI America, Inc.
(incorporated herein by reference to Exhibit
(10)-(20) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
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(10)-(19) - Amendments Nos. 1 through 4 to the Settlement
Agreement dated as of June 28, 1993 by and among
the PBGC, LTV, the Initial LTV Group (as defined
in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit (10)-(21) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1994)
(10)-(20) - Revolving Credit Agreement dated as of October 12,
1994 among LTV Sales Finance Company, the
financial institutions parties thereto as banks,
the issuing banks, the facility agent and
collateral agent (incorporated herein by reference
to Exhibit (10)-(22) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(21) - Receivables Purchase and Sale Agreement dated as
of October 12, 1994 among LTV, LTV Steel Company,
Inc., Continental Emsco Company, LTV Steel Tubular
Products Company, Georgia Tubing Corporation and
LTV Sales Finance Company (incorporated herein by
reference to Exhibit (10)-(23) to LTV's Report on
Form 10-Q for the quarter ended September 30,
1994)
(10)-(22) - Accession Agreement dated as of October 12, 1994
among LTV Sales Finance Company, the financial
institutions listed on the signature pages
thereof, the issuing bank named thereon, and
Bankers Trust Company as facility agent and
collateral agent (incorporated herein by reference
to Exhibit (10)-(24) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(23) - Trust Termination Acknowledgment and Agreement,
dated October 12, 1994, between LTV Sales Finance
Company and Wilmington Trust Company (incorporated
herein by reference to Exhibit (10)-(25) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1994)
(10)-(24) - Assignment and Transfer Agreement, dated as of
October 12, 1994, by and between LTV Master
Receivables Trust and LTV Sales Finance Company
(incorporated herein by reference to Exhibit (10)-
(26) to LTV's Report on Form 10-Q for the quarter
ended September 30, 1994)
(10)-(25) - Collateral Trust Agreement dated as of May 25,
1993 among LTV, LTV Steel Company, Inc., United
Steelworkers of America and Bank One Ohio Trust
Company, NA, as Collateral Trustee (incorporated
herein by reference to Exhibit 10.33 to LTV's
Report on Form 10-Q for the quarter ended June
30, 1993)
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<PAGE> 15
(10)-(26) - Open-2nd Mortgage, Security Agreement and Fixture
Filing dated as of June 28, 1993 by LTV Steel
Company, Inc. to Bank One Ohio Trust Company, N.A.
(incorporated herein by reference to Exhibit 10.34
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
(10)-(27) - License Agreement dated as of June 28, 1993
between LTV Steel Company, Inc. and Bank One Ohio
Trust Company, N.A. (incorporated herein by
reference to Exhibit 10.35 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(28) - Warrant Agreement dated as of June 28, 1993
between LTV and Society National Bank, as Warrant
Agent (incorporated herein by reference to Exhibit
10.37 to LTV's Report on Form 10-Q for the quarter
ended June 30, 1993)
(10)-(29) - Settlement Agreement and Stipulated Order on
behalf of the United States of America on behalf
of the United States Environmental Protection
Agency approved by the United States Bankruptcy
Court Southern District of New York (the "Court")
on April 15, 1993 and supplemented by Exhibit
10.38 below (incorporated herein by reference to
Exhibit 10.38 to LTV's Report on Form 10-Q for the
quarter ended June 30, 1993)
(10)-(30) - Second Settlement Agreement and Stipulated Order
supplementing 10.36 above and approved by the
Court on May 19, 1993 (incorporated by reference
to Exhibit 10.39 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(31) - Settlement Agreement and Stipulated Order on
behalf of the State of Minnesota approved by the
Court on May 19, 1993 (incorporated herein by
reference to Exhibit 10.39 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(32) - Settlement Agreement and Stipulated Order on
behalf of the State of Indiana on behalf of the
Indiana Department of Environmental Management
approved by the Court on May 24, 1993
(incorporated herein by reference to Exhibit 10.40
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
(10)-(33) - Settlement Agreement and Stipulated Order on
behalf of the State of New York and approved by
the Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.42 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(34) - Settlement Agreement and Stipulated Order on
behalf of the State of Connecticut and approved by
the Court on May 19, 1993 (incorporated herein by
reference to Exhibit 10.43 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
11-7
<PAGE> 16
(10)-(35) - Settlement Agreement and Stipulated Order on
behalf of the Commonwealth of Pennsylvania and
approved by the Court on May 24, 1993
(incorporated herein by reference to Exhibit 10.44
to LTV's Report on Form 10-Q for the quarter
ended June 30, 1993)
(10)-(36) - Settlement Agreement and Stipulated Order on
behalf of the State of Ohio on behalf of the Ohio
Environmental Protection Agency and approved by
the Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.45 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(37) - Settlement Agreement and Stipulated Order on
behalf of the State of Georgia and approved by the
Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.46 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(38) - Closing Agreement Between LTV, its subsidiaries
and the Commissioner of Internal Revenue as filed
with the United States Bankruptcy Court for the
Southern District of New York on May 14, 1993
(incorporated herein by reference to Exhibit 10.47
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
(10)-(39) - The LTV Corporation Non-Employee Directors Stock
Option Plan adopted on October 22, 1993
(incorporated herein by reference to Exhibit 10.49
to Amendment No. 2 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(40) - Amendment to LTV Executive Benefit Plan adopted
October 22, 1993 (incorporated herein by reference
to Exhibit 10.50 to Amendment No. 2 to LTV's
Registration Statement on Form S-1 [Registration
No. 33-50217])
(10)-(41) - LTV Executive Benefit Trust Agreement approved on
October 22, 1993 (incorporated herein by reference
to Exhibit 10.51 to Amendment No. 2 to LTV's
Registration Statement on Form S-1 [Registration
No. 33-50217])
(10)-(42) - The LTV Corporation Supplemental Management
Retirement Plan adopted on October 22, 1993
(incorporated herein by reference to Exhibit 10.52
to Amendment No. 2 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(43) - The LTV Corporation Supplemental Management
Retirement Trust Agreement approved on October 22,
1993 (incorporated herein by reference to Exhibit
10.53 to Amendment No. 2 to LTV's Registration
Statement on Form S-1 [Registration No. 33-50217])
II-8
<PAGE> 17
(10)-(44) - The LTV Corporation Management Incentive Program
as amended on January 28, 1994 (incorporated by
reference to Exhibit (10)-(53) to LTV's Report on
Form 10-K for the year ended December 31, 1993)
(10)-(45) - Amendment to The LTV Corporation Supplemental
Management Retirement Plan adopted on January 28,
1994 (incorporated by reference to Exhibit
(10)-(54) to LTV's Report on Form 10-K for the
year ended December 31, 1993)
(10)-(46) - Amendment to LTV Executive Benefit Plan adopted
October 28, 1994 (incorporated herein by reference
to Exhibit (10)-(48) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(47) - Amendment to The LTV Corporation Management
Incentive Program adopted October 28, 1994
(incorporated herein by reference to Exhibit
(10)-(49) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(48) - Amendment to The LTV Corporation Supplemental
Management Retirement Plan adopted on October 28,
1994 (incorporated herein by reference to Exhibit
(10)-(51) to LTV's Report on Form 1O-Q for the
quarter ended September 30, 1994)
(10)-(49) - Amendment No. 5 to the Settlement Agreement dated
as of June 28, 1993 by and among the PBGC, LTV,
the Initial LTV Group and LTV, as Administrator of
the Restored Plans (incorporated herein by
reference to Exhibit (10)-(55) to LTV's Report on
Form 10-K for the year ended December 31, 1994)
(10)-(50) - The Hourly Employee Stock Payment Alternative Plan
(incorporated herein by reference to Exhibit 4.3
to LTV's Registration Statement on Form S-8
[Registration No. 33-56861])
(10)-(51) - Amendments Nos. 1 through 4 to the Letter of
Credit Agreement dated as of October 12, 1994
among LTV Steel Company, Inc., Continental Emsco
Company, LTV Steel Mining Company, LTV Steel
Tubular Products Company, LTV, various financial
institutions and BT Commercial Corporation
(incorporated herein by reference to Exhibit
(10)-(56) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1995)
(10)-(52) - Amendment No. 1 to the Receivables Purchase and
Sale Agreement dated as of October 12, 1994 among
LTV, LTV Steel Company, Inc., Continental Emsco
Company, LTV Steel Tubular Products Company,
Georgia Tubing Corporation and LTV Sales Finance
Company (incorporated herein by reference to
Exhibit (10)-(57) to LTV's Report on Form 10-Q for
the quarter ended September 30, 1995)
II-9
<PAGE> 18
(10)-(53) - Amendments Nos. 6 and 7 to the Settlement
Agreement dated as of June 28, 1993 by and among
the PBGC, LTV, the Initial LTV Group (as defined
in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit (10)-(58) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1995)
(10)-(54) - Amendment No. 8 to the Settlement Agreement dated
as of June 28, 1993 by and among the PBGC, LTV,
the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated herein by
reference to Exhibit (10)-(59) to LTV's Report on
Form 10-K for the year ended December 31, 1995)
(10)-(55) - Amendment No. 5 dated as of November 15, 1995 to
the Letter of Credit Agreement dated as of October
12, 1994 among LTV, LTV Steel Company, Inc.,
Continental Emsco Company, LTV Steel Mining
Company, LTV Steel Tubular Products Company,
various financial institutions and BT Commercial
Corporation (incorporated herein by reference to
Exhibit (10)-(60) to LTV's Report on Form 10-Q
for the quarter ended March 31, 1996)
(10)-(56) - Amendment No. 6 dated as of February 14, 1996 to
the Letter of Credit Agreement dated as of October
12, 1994 among LTV, LTV Steel Company, Inc.,
Continental Emsco Company, LTV Steel Mining
Company, LTV Steel Tubular Products Company,
various financial institutions and BT Commercial
Corporation (incorporated herein by reference to
Exhibit (10)-(61) to LTV's Report on Form 10-Q
for the quarter ended March 31, 1996)
(10)-(57) - Amendment No. 7 dated as of June 30, 1996 to the
Letter of Credit Agreement dated as of October 12,
1994 among LTV, LTV Steel Company, Inc.,
Continental Emsco Company, LTV Steel Mining
Company, LTV Steel Tubular Products Company,
various financial institutions and BT Commercial
Corporation (incorporated herein by reference to
Exhibit (10)-(61) to LTV's Report on Form 10-Q
for the quarter ended June 30, 1996)
(10)-(58) - The LTV Corporation Amended and Restated
Non-Employee Directors' Equity Compensation Plan
adopted on November 22, 1996 (incorporated herein
by reference to Exhibit (10)-(58) to LTV's Report
on Form 10-K for the year ended December 31,
1996)
(10)-(59) - The LTV Corporation Amended and Restated
Non-Employee Directors' Deferred Compensation Plan
adopted on November 22, 1996 (incorporated herein
by reference to Exhibit (10)-(59) to
LTV's Report on Form 10-K for the year ended
December 31, 1996)
11-10
<PAGE> 19
(10)-(60) - The LTV Corporation Amended and Restated Executive
Deferred Compensation Plan adopted on October 25,
1996 (incorporated herein by reference to Exhibit
(10)-(60) to LTV's Report on Form 10-K for the
year ended December 31, 1996)
(10)-(61) - Amendment No. 9 to the Settlement Agreement dated
as of June 28, 1993 by and among the PBGC, LTV,
the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated herein by
reference to Exhibit (10)-(61) to LTV's Report on
Form 10-K for the year ended December 31, 1996)
(10)-(62) - Amendment No. 10 to the Settlement Agreement dated
as of June 28, 1993 by and among the PBGC, LTV,
the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (filed herewith)
(11) - Statement re Computation of Per Share Earnings
(filed herewith)
(27) - Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
No report on Form 8-K was filed by the registrant for the relevant
period.
II-11
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE LTV CORPORATION
--------------------------
(Registrant)
By /s/ Arthur W. Huge
------------------------
Arthur W. Huge
Senior Vice President
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: April 24, 1997
--------------------
II-12
<PAGE> 1
TENTH AMENDMENT TO
PBGC-LTV SETTLEMENT AGREEMENT
This Tenth Amendment to the PBGC-LTV Settlement Agreement (this
"AMENDMENT") is made as of February 25, 1997, by and among (1) Pension Benefit
Guaranty Corporation ("PBGC") and (2) The LTV Corporation, a corporation
organized under the laws of Delaware (in such capacity, "LTV"), and each other
member of the LTV Controlled Group (as defined in the Settlement Agreement).
Capitalized terms used without definition herein shall have the same meanings
as set forth in the Settlement Agreement.
RECITALS
WHEREAS, on June 28, 1993, the PBGC, LTV, each other member of the
Initial LTV Group, and the Administrator entered into the Settlement Agreement
(the "SETTLEMENT AGREEMENT");
WHEREAS, LTV has requested certain amendments to the Settlement
Agreement and the PBGC is amenable thereto; and
WHEREAS, the Settlement Agreement authorizes the amendment of that
Agreement pursuant to an agreement entered into by the PBGC and LTV evidenced
by written instrument signed by their authorized representatives.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO DEFINITION OF "LIEN"
---------------------------------
The definition of "Lien" in Section 1.1 (gg) is hereby amended by
inserting, immediately after the word "asset" in clause (a) thereof, the
parenthetical phrase "(other than a lease which is not a Capital Lease)."
<PAGE> 2
SECTION 2. AMENDMENT TO ARTICLE VIII
-------------------------
Section 8.1 (a) is hereby amended by deleting the word "and" before
clause (v) and the period after clause (v) and inserting the following clause
immediately following clause (v) thereof:
"; and (vi) this Section 8.1(a) shall not apply to the sale or lease
of assets forming a part of a sale and leaseback transaction otherwise
permitted by this Agreement."
SECTION 3. AMENDMENTS TO SECTION 12.3
--------------------------
(i) The proviso in Section 12.3(b) is hereby amended to read in its
entirety as follows:
"provided, that this provision shall not prohibit the sale and leaseback
of property (i) under circumstances where a direct Lien on such property
could have been created without violating the provisions of Section
12.3(a) or (ii) acquired by any member of The LTV Group on or prior to
June 28, 1993, provided that the aggregate amount of the liability
(determined as hereinafter provided) outstanding at any time under all
such leases of property acquired on or prior to June 28, 1993 shall not
exceed $10,000,000, it being understood that such liability shall be
determined as if the lease portion of each such sale and leaseback was
accounted for as a Capital Lease."
(ii) Clause (iv)(b) of the definition of "Permitted Indebtedness" in
Section 12.3(c) is hereby amended by changing the phrase "$50 million" to "$150
million."
SECTION 4. EFFECTIVENESS AND MISCELLANEOUS PROVISIONS
------------------------------------------
A. EFFECTIVENESS. This Amendment shall become effective as of
February 25, 1997 (THE "TENTH AMENDMENT EFFECTIVE DATE") when it, or a
counterpart thereof, is executed by a duly authorized officer of each of the
PBGC and LTV.
B. REFERENCE TO AND EFFECT ON THE SETTLEMENT AGREEMENT.
(i) On and after the Tenth Amendment Effective Date, each
reference in the Settlement Agreement to "this Agreement," "hereunder,"
"hereof" "herein" or words of like import referring to the Settlement
Agreement shall mean and be a reference to the Settlement Agreement as amended
by this Amendment.
2
<PAGE> 3
(ii) Except as specifically amended by this Amendment, the
Settlement Agreement shall remain in full force and effect.
C. APPLICABLE LAW. This Amendment shall be interpreted in
accordance with and governed by the law of the State of New York, except to the
extent preempted by federal law.
D. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties to this Amendment have caused this
Amendment to be duly executed and delivered by their respective duly authorized
officers or representatives as of the day and year first written above.
PENSION BENEFIT GUARANTY CORPORATION
By: Inelegible
------------------------------------
Title:Deputy Executive Director and
Chief Negotiator
---------------------------------
Date: 2/28/97
----------------------------------
THE LTV CORPORATION, on behalf of itself
and the other members of the LTV
Controlled Group
By: Inelegible
------------------------------------
Title: Senior VP & CFO
---------------------------------
Date: 2/24/97
----------------------------------
3
<PAGE> 1
Page 1 of 2
Exhibit (11)
THE LTV CORPORATION
Calculation of Primary Earnings Per Share (EPS)
(Dollar amounts in millions except for EPS)
(Share data in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------------------------------
1997 1996
------------------------------- -------------------------------
Shares Amount EPS Shares Amount EPS
--------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 26.8 $ 13.3
Preferred stock dividend requirements (0.6) (0.6)
--------- ---------
26.2 12.7
Share base:
Average common stock outstanding 105,028 105,360
Common Stock equivalent shares resulting from
outstanding Series A Warrants, Stock Options
and Restricted Stock 102 55
Common Stock issuable upon conversion of
Series B Preferred Stock 2,926 0.6 (A)
-------- --------- ------- ---------
108,056 $ 26.8 105,415 $ 12.7
======== ========= ======= =========
PRIMARY EARNINGS PER SHARE $ 0.25 $ 0.12
========= ========
</TABLE>
(A) Addition of these shares would result in antidilution.
<PAGE> 2
Page 2 of 2
Exhibit (11)
THE LTV CORPORATION
Calculation of Fully Diluted Earnings Per Share (EPS)
(Dollar amounts in millions except for EPS)
(Share data in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------------------
1997 1996
------------------------------- -------------------------------
Shares Amount EPS Shares Amount EPS
--------- --------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 26.8 $ 13.3
Preferred stock dividend requirements (0.6) (0.6)
--------- --------
26.2 12.7
Share base:
Average common stock outstanding 105,028 105,360
Common Stock equivalent shares resulting from
outstanding Series A Warrants, Stock Options
and Restricted Stock 108 58
Common Stock issuable upon conversion of
Series B Preferred Stock 2,926 0.6 (A)
Common Stock issuable upon conversion of
Senior Secured Convertible Notes (A) (A)
--------- --------- --------- ---------
108,062 $ 26.8 105,418 $ 12.7
========= ========= ========= =========
FULLY DILUTED EARNINGS PER SHARE $ 0.25 $ 0.12
======== =========
</TABLE>
(A) Addition of these shares would result in antidilution.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 172
<SECURITIES> 481
<RECEIVABLES> 445
<ALLOWANCES> 18
<INVENTORY> 788
<CURRENT-ASSETS> 1,886
<PP&E> 3,925
<DEPRECIATION> 817
<TOTAL-ASSETS> 5,404
<CURRENT-LIABILITIES> 862
<BONDS> 154
<COMMON> 53
0
1
<OTHER-SE> 1,684
<TOTAL-LIABILITY-AND-EQUITY> 5,404
<SALES> 1,072
<TOTAL-REVENUES> 1,072
<CGS> 931
<TOTAL-COSTS> 1,036
<OTHER-EXPENSES> (9)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 45
<INCOME-TAX> 18
<INCOME-CONTINUING> 27
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.25
</TABLE>
