SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
BIRMINGHAM STEEL CORPORATION NON-UNION EMPLOYEES'
401(k) PLAN
(Full Title of the Plan)
BIRMINGHAM STEEL CORPORATION
1000 URBAN CENTER DRIVE SUITE 300
BIRMINGHAM, AL 35242
(Name of issuer of the securities held pursuant to the
Plan and the address of its principal executive office)
Birmingham Steel Corporation
Non-Union Employees' 401(k) Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1994 and 1993
with Report of Independent Auditors
- - -----------------------------------------------------
Report of Independent Auditors
The Employee Benefits Committee
Birmingham Steel Corporation
Non-Union Employees' 401(k) Plan
We have audited the accompanying statements of net
assets available for benefits of the Birmingham Steel
Corporation Non-Union Employees' 401(k) Plan as of
December 31, 1994 and 1993, and the related statements
of changes in net assets available for benefits for the
years then ended. These financial statements are the
responsibility of the Plan's management. Our
responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the net
assets available for benefits of the Plan at December
31, 1994 and 1993, and the changes in net assets
available for benefits for the years then ended in
conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a
whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1994,
and reportable transactions for the year then ended, are
presented for purposes of complying with the Department
of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the
basic financial statements. The supplemental schedules
have been subjected to the auditing procedures applied
in our audit of the 1994 basic financial statements and,
in our opinion, are fairly stated in all material
respects in relation to the 1994 basic financial
statements taken as a whole.
May 19, 1995
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
1994 1993
--------------------------
ASSETS
Investments $23,868,507 $20,715,134
Receivables:
Employer
contributions 2,429,811 2,239,861
Employee
contributions 626,888 257,453
Employee loans 2,046,534 1,565,325
Accrued interest 3,568 1,206
--------------------------
5,106,801 4,063,845
Cash and
cash equivalents 1,659 92,200
--------------------------
Net assets available
for benefits $28,976,967 $24,871,179
==========================
See accompanying notes.
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS
Year ended December 31
1994 1993
----------------------
Additions to net
assets attributed
to:
Investment income:
Net (depreciation)
appreciation in
fair value
of investments $(1,561,304) $ 604,483
Interest 1,397,196 1,242,850
Dividends 45,364 47,842
----------- ----------
(118,744) 1,895,175
Contributions :
Employer 2,429,811 2,239,861
Employee 3,433,974 2,952,444
----------- ----------
5,863,785 5,192,305
----------- ----------
5,745,041 7,087,480
Deduction from net
assets attributed to:
Payments to
participants (1,639,253) (1,356,061)
Net increase 4,105,788 5,731,419
Net assets available
for benefits:
Beginning of year 24,871,179 19,139,760
----------- -----------
End of year $28,976,967 $24,871,179
=========== ===========
See accompanying notes.
1. DESCRIPTION OF THE PLAN
GENERAL
The Birmingham Steel Corporation Non-Union Employees'
401(k) Plan (the Plan), is a defined contribution plan
established effective as of August 15, 1984. The
following description of the Plan provides only
general information. Participants should refer to the
Summary Plan Description for a more complete
description of the Plans' provisions.
PARTICIPATION
The Plan covers substantially all non-union employees
of Birmingham Steel Corporation and its affiliated
companies (collectively, the Company) except its
American Steel and Wire subsidiary. Employees begin
Plan participation at the earlier of the January 1 or
July 1 following employment.
COMPANY CONTRIBUTIONS
Company contributions to the Plan are accrued in the
period in which they become obligations of the
Company. In 1994 and 1993, the Company contributed to
each participant's account an amount equal to the sum
of (a) 5% of each participant's compensation up to
$10,000; plus (b) the lesser of: (i) the amount of
each active participant's employee contributions, or
(ii) 3% of each participant's eligible compensation.
The Company may, from time to time, change the method
of determining its contribution.
EMPLOYEE CONTRIBUTIONS
Participants may make employee contributions to the
Plan by electing to reduce their gross pay in an
amount which is not less than one percent or more than
ten percent of annual compensation, subject to
certain limitations.
PARTICIPANT ACCOUNTS
The Plan provides for the establishment of an employee
account and an employer account for each participating
employee. Each participant's account is credited with
the participant's contributions and an allocation of
the Company's contribution and plan earnings.
Generally, employer contributions are allocated to
participants' accounts at the time of payment, rather
than at the time such contributions are recorded in
the Plan's financial statements. Allocations of
employer contributions are based on eligible annual
compensation as defined in the Plan agreement.
Benefit payments to participants are based upon vested
balances in the employee and employer accounts at the
date of benefit determination.
VESTING
Participants are immediately vested in their employee
account including allocated earnings thereon. Vesting
in their employer account is based on years of
continuous service. Service for vesting begins with
the participant's employment date, but not prior to
July 1, 1980. Participants are fully vested at the
earlier of death, disability, reaching normal
retirement or in accordance with the following
schedule:
Years of Service Vested Interest
- - ---------------- ---------------
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
FORFEITURES
Forfeitures of participants' non-vested interest in
Company contributions, and allocated earnings thereon,
may be used to offset the annual Company contributions
to the Plan. During the 1993 plan year, the Company's
contribution to the Plan was offset by $100,000 from
the accumulated forfeitures available. There were no
forfeitures used to reduce the Company contribution in
1994.
PAYMENT OF BENEFITS
Upon termination of service, participants may receive
either (a) a single sum payment, or (b) annual or more
frequent periodic installments over a period of the
lesser of thirty years or the joint life expectancy
of the participant and his beneficiary (where
applicable), as determined by the Employee Benefits
Committee (the Committee).
INVESTMENT PROGRAMS
The Plan allows participants to direct the investment
of their accounts by selecting among four investment
alternatives:
(a) A fund comprised primarily of the common stock of
the Company;
(b) A managed guaranteed investment contract (GIC)
fund which invests in fixed income securities;
(c) A basic value fund composed primarily of common
stocks; and
(d) A capital fund composed of stocks and bonds.
Except for the Birmingham Steel Corporation stock
fund, the investment funds are managed by the trustee
of the Plan, Merrill Lynch Trust Company, or by an
affiliate of the trustee (hereinafter referred to as
the Trustee). All assets held in the investment
funds, including Birmingham Steel Corporation common
stock, were purchased in the open market and are held
by the Trustee.
LOANS
The Plan allows Participants to borrow up to one-half
of their total vested account balance up to a maximum
of $50,000. Loans may be repaid over terms up to five
years (fifteen years for loans used to purchase
residential property) and include a reasonable rate of
interest.
2. SUMMARY OF ACCOUNTING POLICIES
INVESTMENTS
Investments in common stock and mutual funds are
stated at their quoted market values. Other
investments are stated at cost, which approximates
market values. Investment transactions are recorded
as of the trade date. Cost of common stock and mutual
fund shares is determined by the specific
identification method.
CONCENTRATION OF CREDIT RISK
At December 31, 1994, approximately 13% of the Plan's
assets are invested in the common stock of the Company
and approximately 69% of such assets are comprised of
investments in mutual funds managed by the Trustee.
The four investment options offered to participants
are designed to provide each participant the
opportunity to diversify the investment of their
accounts. Although the Committee has no involvement
in the investment transactions of the mutual funds,
the Committee periodically monitors the investment
performance of the funds and may, pursuant to the
provisions of the Plan agreement, elect to change the
Plan's investment programs and/or the trustee at any
time.
3. INVESTMENTS
Investments that represent 5% or more of the Plan's
net assets available for benefits at December 31, 1994
and 1993 are as follows:
Name of Issuer and Market
Title Shares Value Cost
- - ------------------------------------------------------
Birmingham Steel
Corporation
common stock 190,821 $ 3,816,425 $ 4,010,607
Merrill Lynch
Retirement
Preservation
Trust 12,615,375 12,615,375 12,615,375
Merrill Lynch Basic
Value Fund 157,113 3,511,486 3,340,400
Merrill Lynch
Capital Fund 152,732 3,925,221 4,059,560
----------- -----------
$23,868,507 $24,025,942
=========== ===========
Name of Issuer and Market
Title Shares Value Cost
- - ------------------------------------------------------
Birmingham Steel
Corporation
common stock 111,065 $ 3,082,057 $ 1,898,402
Merrill Lynch
Guaranteed
Investment
Contract
Managed Trust 10,859,182 10,859,182 10,859,182
Merrill Lynch Basic
Value Fund 136,873 3,198,727 2,804,217
Merrill Lynch
Capital Fund 127,822 3,575,168 3,370,781
----------- -----------
$20,715,134 $18,932,582
=========== ===========
Net (depreciation) appreciation in fair value of
investments for the years ended December 31, 1994 and
1993, including securities sold during the year, was
as follows:
1994 1993
------------------------
Birmingham Steel
Corporation
common stock $(1,059,514) $ 105,396
Mutual funds (501,790) 499,087
----------- ----------
$(1,561,304) $ 604,483
=========== ==========
4. Investment Programs
Net assets available for benefits and changes in net
assets available for benefits at December 31, 1994 and
1993, and for the years then ended, for each of the
Plan's investment programs are as follows:
<TABLE>
<CAPTION>
Stock GIC Basic Capital Loan
Fund Fund Fund Fund Fund Total
------- -------- ------- ------- ------- --------
<S>
December 31, <C> <C> <C> <C> <C> <C>
1994
Investments 3816425 12615375 3511486 3925221 - 23868507
Receivables:
Employer
contributions 225024 1458054 334860 411873 - 2429811
Employee
contributions 59501 352608 95685 119094 - 626888
Employee loans - - - - 2046534 2046534
Accrued
interest - 3568 - - - 3568
------- ------- ------- ------- ------- --------
284525 1814230 430545 530967 2046534 5106801
Cash and cash
equivalents 1659 - - - - 1659
------- ------- ------- ------- ------- --------
Net assets
available for
benefits 4102609 14429605 3942031 4456188 2046534 28976967
======= ======== ======= ======= ======= ========
Stock GIC Basic Capital Loan
Fund Fund Fund Fund Fund Total
------- -------- ------- ------- ------- --------
December 31,
1993
Investments 3082057 10859182 3198727 3575168 - 20715134
Receivables:
Employer
contributions 186635 1302397 331469 419360 - 2239861
Employee
contributions 18360 147008 41053 51032 - 257483
Employee loans - - - - 1565325 1565325
Accrued
interest - 1206 - - - 1206
------- ------- ------- ------- ------- --------
204995 1450611 372522 470392 1565325 4063845
Cash and cash
equivalents 92200 - - - - 92200
------- ------- ------- ------- ------- --------
Net assets
available for
benefits 3379252 12309793 3571249 4045560 1565325 24871179
======= ======== ======= ======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Stock GIC Basic Capital Loan
Fund Fund Fund Fund Fund Total
------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net assets
available
for benefits
as of
December 31,
1992 3023649 9807306 2292074 2961136 1055595 19139760
Investment
income 319780 590350 512359 394922 77764 1895175
Contributions 449209 2936354 780301 1026441 - 5192305
Fund transfers (169399) (375741) 86211 (45295) 504224 -
Payments to
participants (243987) (648476) (99696) (291644) (72258) (1356061)
-----------------------------------------------------
Net assets
available for
benefits as of
December 31,
1993 3379252 12309793 3571249 4045560 1565325 24871179
Investment
income (loss) (1013236) 691819 72170 38141 92362 (118744)
Contributions 533331 3325939 914866 1089649 - 5863785
Fund transfers 1245783 (896595) (411007) (452860) 514679 -
Payments to
participants (42521)(1001351) (205247) (264302) (125832)(1639253)
------- -------- ------- ------- ------- -------
Net assets
available for
benefits as of
December 31,
1994 4102609 14429605 3942031 4456188 2046534 28976967
======= ======== ======= ======= ======= ========
</TABLE>
5. INCOME TAX STATUS
On June 29, 1990, the Plan received a determination
letter from the Internal Revenue Service approving its
exemption from federal income taxes under the
provisions of Internal Revenue Code (IRC) Section
501(a) as a qualified plan under IRC Section 401(a).
A new determination letter has been requested from the
Internal Revenue Service to cover various amendments made
through May 30, 1994. The Employee Benefits Committee
expects a favorable reply. Once qualified, the Plan is
required to operate in conformity with the IRC to retain
its qualified status. The Committee is not aware of any
course of action or series of events that have occurred that
might adversely affect the Plan's qualified status.
6. TRANSACTIONS WITH PARTIES-IN-INTEREST
During the years ended December 31, 1994 and 1993, the
Plan received $45,364 and $47,842, respectively, in
cash dividends on common stock of the Company held by
the Plan. The Trustee executed all investment
transactions for the years ended December 31, 1994 and
1993. The Company has paid all administrative
expenses of the Plan, including legal, accounting and
trustee fees.
7. PLAN TERMINATION
Although management has not expressed any intent to do
so, the Company has the right under the Plan to
discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the
Employee Retirement Income Securities Act of 1974. In
the event of Plan termination, participants will
become 100% vested in their accounts in accordance
with the provisions of the Plan.
8. ACCOUNTS OF TERMINATED EMPLOYEES
Under the provisions of the Plan, the individual
accounts of terminated employees may remain in the
Plan until a break in service, as defined, occurs.
The accounts of such employees share in the allocation
of investment income but are not allocated a share of
annual Company contributions. Once such employees
experience a break in service, the vested portion of
their accounts will be paid in accordance with the
provisions of the Plan. At December 31, 1994 and
1993, approximately $420,000 and $517,000 of the net
assets of the Plan were allocated to terminated
employees. These amounts are included in net assets
available for benefits in the accompanying financial
statements, however, they are reported as liabilities
in the Plan's Form 5500.
9. SUBSEQUENT EVENT
Effective January 1, 1995, the American Steel and Wire
Corporation Savings and Retirement Plan was merged
into the Plan. In connection with the merger, the
Plan was restated to allow participation by qualifying
employees of American Steel and Wire.
SUPPLEMENTAL SCHEDULES
<TABLE>
Birmingham Steel Corporation Non-Union Employees'
401(k) Plan
Item 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES
December 31, 1994
<CAPTION>
Current
Number of Cost Basis Value of
Shares or of Investment Investment
Name of Issuer Principal at End of at End of
and Title Amount Period Period
- - -------------- --------- ------------- ----------
<S> <C> <C> <C>
Investments:
Birmingham Steel
Corporation
common stock* 190,821 $ 4,010,607 $ 3,816,425
Merrill Lynch
Retirement
Preservation
Trust* 12,615,375 12,615,375 12,615,375
Merrill Lynch Basic
Value Fund* 157,113 3,340,400 3,511,486
Merrill Lynch
Capital Fund* 152,732 4,059,560 3,925,221
Employee loans to
be repaid over
terms up to five
years (fifteen
years for loans
used to purchase
residential
property) and
include a reasonable
rate of interest 2,046,534 2,046,534
----------- -----------
$26,072,476 $25,915,041
=========== ===========
* Indicates party-in-interest to the Plan.
</TABLE>
<TABLE>
Birmingham Steel Corporation Non-Union Employees' 401(k) Plan
Item 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1994
<CAPTION>
Current
Name of No. of Value of
Issuer & Shares Pur- Cost Asset on Net
Title or Face chase Selling of Trans. Gain
Value Price Price Asset Date (Loss)
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Birmingham
Steel Corp
common
stock
Purchases 113,870 $2,774,751 $ - $ - $2,774,751 $ -
Sales 34,114 - 980,869 662,546 980,869 318,323
Merrill Lynch
Guaranteed
Investment
Contract
Managed
Trust
Purchases 5,170,121 5,170,121 - - 5,170,121 -
Sales 3,413,928 - 3,413,928 3,413,928 3,413,928 -
Merrill Lynch
Basic Value
Fund
Purchases 70,390 1,647,206 - - 1,647,206 -
Sales 50,150 - 1,159,052 1,111,023 1,159,052 48,029
Merrill Lynch
Capital Fund
Purchases 63,802 1,738,415 - - 1,738,415 -
Sales 38,892 - 1,061,967 1,049,636 1,061,969 12,331
</TABLE>
Consent of Ernst & Young, LLP, Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-23563)
pertaining to the Birmingham Steel Corporation Non-
Union Employees' 401(k) Plan of our report dated May
19, 1995, with respect to the financial statements and
schedules of the Birmingham Steel Corporation Non-
Union Employees' 401(k) Plan included in this Annual
Report (Form 11-K) for the year ended December 31,
1994.
Ernst & Young, LLP
------------------
Ernst & Young, LLP
Birmingham, Alabama
June 30, 1995
SIGNATURES
THE PLAN. Pursuant to the requirements of the
Securities Exchange Act of 1923, the trustee (or other
persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 30, 1995
BIRMINGHAM STEEL CORPORATION
NON-UNION EMPLOYEES' 401(K) PLAN
by: Birmingham Steel Corporation
James S. Rogers II
---------------------------------
James S. Rogers II-Member of the
Employee Benefits Committee of
the Plan and Vice President,
Human Resources
