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1 9 9 7
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 1 0 - K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-983
NATIONAL STEEL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Incorporated under the Laws of the State of Delaware 25-0687210
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4100 Edison Lakes Parkway, Mishawaka, IN 46545-3440
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: 219-273-7000
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Title of Each Class Name of each exchange on which registered
------------------- -----------------------------------------
Class B Common Stock New York Stock Exchange
First Mortgage Bonds, 8-3/8% Series due 2006 New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
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 period 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
At February 27, 1998, there were 43,288,240 shares of the registrant's
common stock outstanding.
Aggregate market value of voting stock held by non-affiliates: $328,286,621
The amount shown is based on the closing price of National Steel
Corporation's Common Stock on the New York Stock Exchange on February 27, 1998.
Voting stock held by officers and directors is not included in the computation.
However, National Steel Corporation has made no determination that such
individuals are "affiliates" within the meaning of Rule 405 under the Securities
Act of 1933.
Documents Incorporated By Reference:
Selected portions of the Annual Report to Stockholders for the year ended
December 31, 1997 are incorporated by reference into Part II and IV of this
Report on Form 10-K.
Selected portions of the 1998 Proxy Statement of National Steel Corporation
are incorporated by reference into Part III of this Report on Form 10-K.
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Form 10-K for the Fiscal Year Ended December 31, 1997 is hereby amended as
follows:
Exhibit 13- NOTE P--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Revised Note P to the Financial Statements, Quarterly Results of Operations
(Unaudited), is filed herewith. The effect of the revision is described
below.
An $11,100,000 cumulative effect of accounting change is now reflected in
the three months ended March 31, 1996 which was incorrectly reflected in
the three months ended September 30, 1996 when the decision to change the
accounting principle had been made.
Income before cumulative effect of accounting change now reflects
$2,135,000 of tax expense in the three months ended December 31, 1996 which
was originally reflected in the three months ended September 30, 1996.
Basic and diluted earnings per share amounts have been changed to reflect
the above mentioned changes.
The restatement adjustments do not affect the results of operations for the
full year ended December 31, 1996.
Exhibit 18- Preferability Letter on change in accounting principles
An updated preferability letter to give effect to the accounting change for
the change in measurement date for pensions and other postretirement
benefits as of the beginning of 1996.
Exhibit 23- CONSENT OF INDEPENDENT AUDITORS
A new consent is hereby submitted to reflect the dates of the above
mentioned changes.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NATIONAL STEEL CORPORATION
By: /s/ John A. Maczuzak
-------------------------------------
John A. Maczuzak
President and Chief Operating Officer
By: /s/ Michael D. Gibbons
-------------------------------------
Michael D. Gibbons
Acting Chief Financial Officer
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NOTE P--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Following are the unaudited quarterly results of operations for the years 1997
and 1996.
<TABLE>
<CAPTION>
1997
Three Months Ended March 31 June 30 September 30 December 31
Dollars in thousands (except per share amounts)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $757,618 $824,869 $788,663 $768,509
Gross margin 69,263 87,834 103,747 69,825
Unusual items ----- (25,385) (28,804) (4,556)
Income before extraordinary item 26,665 64,925 78,561 48,749
Extraordinary item ----- (5,397) ----- -----
- ---------------------------------------------------------------------------------------------------
Net income $ 26,665 $ 59,528 $ 78,561 $ 48,749
===================================================================================================
Basic earnings per share:
Income before extraordinary item $ .55 $ 1.43 $ 1.76 $ 1.08
Extraordinary item -- (.12) -- --
- ---------------------------------------------------------------------------------------------------
Net income applicable to common stock $ .55 $ 1.31 $ 1.76 $ 1.08
===================================================================================================
Diluted earnings per share:
Income before extraordinary item $ .55 $ 1.42 $ 1.72 $ 1.06
Extraordinary item -- (.12) -- --
- ---------------------------------------------------------------------------------------------------
Net income applicable to common stock $ .55 $ 1.30 $ 1.72 $ 1.06
===================================================================================================
<CAPTION>
1996
Three Months Ended March 31 June 30 September 30 December 31
Dollars in thousands (except per share amounts)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $682,143 $769,481 $735,858 $766,551
Gross margin 16,853 52,614 54,397 67,605
Income (loss) before cumulative
effect of accounting change (14,196) 17,917 13,662 25,441
Cumulative effect of accounting change 11,100 ----- ----- -----
- ---------------------------------------------------------------------------------------------------
Net income (loss) $ (3,096) $ 17,917 $ 13,662 $ 25,441
===================================================================================================
Basic and diluted earnings per share:
Income (loss) before cumulative
effect of accounting change $ (.39) $ .35 $ .25 $ .53
Cumulative effect of accounting change .25 -- -- --
- ---------------------------------------------------------------------------------------------------
Net income (loss) applicable to common stock $ (.14) $ .35 $ .25 $ .53
===================================================================================================
</TABLE>
(See Note A--Description of the Business and Significant Accounting Policies
for diluted earnings per share.)
The 1996 results have been restated from those reported in the original 1997
Form 10-K to reflect the $11,100 cumulative effect of accounting change in the
first quarter. Previously, the cumulative effect had been reported incorrectly
in the third quarter when the decision to change the accounting principle had
been made. The 1996 results also have been restated to correct an overstatement
of income tax in the third quarter and a corresponding understatement in the
fourth quarter in the amount of $2,135. While the restatement adjustments affect
the quarters of 1996, such adjustments do not affect the results of operations
for the full year ended December 31, 1996.
48
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Exhibit 18
Board of Directors
National Steel Corporation
Mishawaka, Indiana
As discussed in Notes E and F of the Notes to Consolidated Financial Statements
of National Steel Corporation and subsidiaries, included in its Form 10-K/A for
the year ended December 31, 1997, the Company changed the measurement date used
in accounting for pensions and for postretirement benefits other than pensions
from December 31 to September 30. The financial statements for the year ended
December 31, 1996 reflect this change as a change in accounting method as of the
beginning of 1996.
Management has advised us that it believes the change is to a preferable method
in the Company's circumstances because the earlier measurement date results in
more accurate year-end disclosures pertaining to the plans and more accurate
estimates of expense for interim financial reporting and because the change
enhances comparability with other major United States integrated steel
companies.
There are no authoritative criteria for determining a "preferable" measurement
date based on the particular circumstances. However, we conclude that the change
in the method of accounting for pensions and for postretirement benefits other
than pensions by the use of an earlier measurement date (that is, September 30)
is a change to an acceptable alternative method which, based on management's
business judgment to make this change for the reasons cited above, is preferable
in the Company's circumstances. We have not conducted an audit in accordance
with generally accepted auditing standards of any financial statements of the
Company as of any date or for any period subsequent to December 31, 1997, and
therefore we do not express any opinion on any financial statements of the
Company subsequent to that date.
Ernst & Young LLP
Fort Wayne, Indiana
June 5, 1998
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Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K/A)
of National Steel Corporation and subsidiaries (the "Company") of our report
dated January 28, 1998 (except for Notes C, I, and K, as to which the date is
February 26, 1998) included in the 1997 Annual Report to Shareholders of the
Company.
Our audit also included the financial statement schedule the Company listed in
item 14(a). This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
We also consent to the incorporation by reference in the following Registration
Statements:
. Form S-8 No. 33-51991 pertaining to the 1994 and 1995 Stock Grants to Union
Employees,
. Form S-8 No. 33-51081 pertaining to the 1993 National Steel Corporation Long
Term Incentive Plan,
. Form S-8 No. 33-51083 pertaining to the 1993 National Steel Corporation
Non-Employee Director's Stock Option Plan, and
. Form S-8 No. 33-61087 pertaining to the National Steel Retirement Savings
Plan and National Steel Represented Employee Retirement Savings Plan;
of our report dated January 28, 1998 (except for Notes C, I, and K as to which
the date is February 26, 1998), with respect to the consolidated financial
statements incorporated by reference in this Annual Report (Form 10-K/A) of the
Company for the year ended December 31, 1997, and and our report included in the
preceding paragraph with respect to the financial statement schedule included
therein, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Fort Wayne, Indiana
June 5, 1998
