<PAGE>
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, 1996
BIRMINGHAM STEEL CORPORATION 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)
<PAGE>
Birmingham Steel Corporation
401(k) Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1996 and 1995
Contents
Report of Independent Auditors..............................................F-1
Audited Financial Statements
Statements of Net Assets Available for Benefits.............................F-2
Statements of Changes in Net Assets Available for Benefits..................F-3
Notes to Financial Statements...............................................F-4
Supplemental Schedules
Item 27a - Schedule of Assets Held for Investment Purposes.................F-14
Item 27d - Schedule of Reportable Transactions.............................F-15
<PAGE>
Report of Independent Auditors
The Employee Benefits Committee
Birmingham Steel Corporation 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of the Birmingham Steel Corporation 401(k) Plan as of December 31, 1996 and
1995, 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, 1996 and 1995, 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, 1996, 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 1996 basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the 1996 basic financial statements taken as a whole.
May 9, 1997
F-1
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Birmingham Steel Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
December 31
1996 1995
------------------------------
Assets
Investments $ 46,788,921 $ 37,826,468
Receivables:
Employer contributions 947,214 986,361
Employee contributions 426,732 454,599
Employee loans 3,468,650 2,924,907
Accrued interest 9,687 7,596
------------------------------
4,852,283 4,373,463
Cash and cash equivalents - 11,306
------------------------------
51,641,204 42,211,237
Liabilities
Benefit claims payable - (73,007)
------------------------------
Net assets available for benefits $ 51,641,204 $ 42,138,230
==============================
See accompanying notes.
F-2
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
1996 1995
--------------------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 1,967,108 $ 1,092,051
Interest 2,998,756 2,332,877
Dividends 108,493 89,431
-------------------------
5,074,357 3,514,359
Contributions:
Employer 2,902,244 3,087,805
Employee 5,245,362 5,204,219
-------------------------
8,147,606 8,292,024
Transfer of assets from related plan - 6,363,232
-------------------------
13,221,963 18,169,615
Deduction from net assets attributed to:
Payments to participants (3,718,989) (5,008,352)
-------------------------
Net increase 9,502,974 13,161,263
Net assets available for benefits:
Beginning of year 42,138,230 28,976,967
-------------------------
End of year $51,641,204 $42,138,230
=========================
See accompanying notes.
F-3
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
1. Description of the Plan
General
The Birmingham Steel Corporation 401(k) Plan (the "Plan"), is a defined
contribution plan established effective as of August 15, 1984. 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. Net
assets of $6,363,232 were transferred into the Plan as a result of the merger.
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 Plan's provisions.
Participation
The Plan covers substantially all employees of Birmingham Steel Corporation and
certain affiliated companies (collectively, the "Company"). Employees may begin
participation in the Plan at the earlier of the January 1, April 1, July 1, or
October 1 following employment.
Company Contributions
Company contributions to the Plan are accrued in the period in which they become
obligations of the Company. In 1996 and 1995, 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.
F-4
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
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
fifteen 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 age or in
accordance with the following schedule:
F-5
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Years of Vested
Service Interest
- ------------------------------------------------------------------------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 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. There were no forfeitures used to reduce the
Company's contribution in 1996. Forfeitures of approximately $150,000 were used
to offset Company contributions in 1995.
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).
F-6
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Investment Programs
The Plan allows participants to direct the investment of their accounts by
selecting among six investment alternatives:
- A fund comprised primarily of the common stock of the Company;
- A managed guaranteed investment contract (GIC) fund which invests in fixed
income securities;
- A basic value fund composed primarily of common stocks;
- A capital fund composed of stocks and bonds;
- A special value fund composed of stocks and bonds; and
- A global allocation fund composed primarily of common stocks and fixed
income securities of both domestic and foreign companies.
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.
F-7
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
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.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Concentration of Credit Risk
At December 31, 1996, approximately 10% of the Plan's assets are invested in the
common stock of the Company and approximately 83% of such assets are comprised
of investments in mutual funds managed by the Trustee. The six 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.
At December 31, 1996, approximately 4% of the Company's labor force is employed
under a collective bargaining agreement.
F-8
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
3. Investments
Investments that represent 5% or more of the Plan's net assets available for
benefits at December 31, 1996 and 1995 are as follows:
1996
-----------------------------------------------
Name of Issuer and Title Shares Market Value Cost
- -------------------------------------------------------------------------------
Birmingham Steel Corporation
common stock 274,622 $ 5,217,825 $ 5,209,721
Merrill Lynch Retirement
Preservation Trust 22,296,663 22,296,663 22,296,663
Merrill Lynch Basic Value
Fund 301,327 9,341,136 7,544,200
Merrill Lynch Capital Fund 278,174 8,637,295 7,903,005
1995
-----------------------------------------------
Name of Issuer and Title Shares Market Value Cost
- -------------------------------------------------------------------------------
Birmingham Steel Corporation
common stock 250,871 $ 3,731,712 $ 4,938,477
Merrill Lynch Retirement
Preservation Trust 19,438,272 19,438,272 19,438,272
Merrill Lynch Basic Value
Fund 240,717 6,814,699 5,584,200
Merrill Lynch Capital Fund 243,902 7,451,220 6,735,218
Net appreciation (depreciation) in fair value of investments for the years
ended December 31, 1996 and 1995, including securities sold during the year,
was as follows:
1996 1995
-------------------------------
Birmingham Steel Corporation common stock $ 1,080,167 $ (1,146,101)
Mutual funds 886,941 2,238,152
-------------------------------
$ 1,967,108 $ 1,092,051
===============================
F-9
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
4. Investment Programs
Net assets available for benefits and changes in net assets available for
benefits at December 31, 1996 and 1995, and for the years then ended, for each
of the Plan's investment programs are as follows:
<TABLE>
<CAPTION>
Stock GIC Basic Capital Special Global Loan
Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1996
Investments $ 5,217,825 $22,296,663 $ 9,341,136 $ 8,637,295 $ 468,315 $ 827,687 $ - $46,788,921
Receivables:
Employer contributions 55,887 557,684 147,288 139,587 19,302 27,466 - 947,214
Employee contributions 28,539 225,737 77,371 72,890 9,345 12,850 - 426,732
Employee loans - - - - - - 3,468,650 3,468,650
Accrued interest - 9,687 - - - - - 9,687
--------------------------------------------------------------------------------------------------------
84,426 793,108 224,659 212,477 28,647 40,316 3,468,650 4,852,283
Cash and cash equivalents - - - - - - - -
--------------------------------------------------------------------------------------------------------
Net assets available
for benefits $ 5,302,251 $23,089,771 $ 9,565,795 $ 8,849,772 $ 496,962 $ 868,003 $ 3,468,650 $ 51,641,204
========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Stock GIC Basic Capital Special Global Loan
Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1995
Investments $ 3,731,712 $19,438,272 $ 6,814,699 $ 7,451,220 $ 138,112 $ 252,453 $ - $ 37,826,468
Receivables:
Employer contributions 69,089 612,836 136,969 140,518 10,782 16,167 - 986,361
Employee contributions 39,600 254,628 72,533 76,190 4,684 6,964 - 454,599
Employee loans - - - - - - 2,924,907 2,924,907
Accrued interest - 7,596 - - - - - 7,596
--------------------------------------------------------------------------------------------------------
108,689 875,060 209,502 216,708 15,466 23,131 2,924,907 4,373,463
Cash and cash equivalents 11,306 - - - - - - 11,306
Benefits payable (5,716) (39,012) (10,956) (11,475) (186) (288) (5,374) (73,007)
--------------------------------------------------------------------------------------------------------
Net assets available
for benefits $ 3,845,991 $20,274,320 $ 7,013,245 $ 7,656,453 $ 153,392 $ 275,296 $ 2,919,533 $ 42,138,230
========================================================================================================
</TABLE>
F-10
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
4. Investment Programs (continued)
<TABLE>
<CAPTION>
Stock GIC Basic Capital Special Global Loan
Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits as of
December 31, 1994 $ 4,102,609 $14,429,605 $ 3,942,031 $ 4,456,188 $ - $ - $ 2,046,534 $ 28,976,967
Investment income (loss) (1,056,670) 1,086,270 1,562,321 1,712,192 13,592 31,686 164,968 3,514,359
Contributions 587,714 4,545,158 1,357,054 1,516,476 98,996 186,626 - 8,292,024
Fund transfers 604,442 (1,409,639) (177,106) (224,685) 53,545 76,739 1,076,704 -
Payments to participants (392,104) (2,676,325) (751,584) (787,170) (12,741) (19,755) (368,673) (5,008,352)
Transfer from related plan - 4,299,251 1,080,529 983,452 - - - 6,363,232
--------------------------------------------------------------------------------------------------------
Net assets available for
benefits as of
December 31, 1995 3,845,991 20,274,320 7,013,245 7,656,453 153,392 275,296 2,919,533 42,138,230
Investment income 1,188,660 1,225,872 1,310,317 963,522 67,731 81,056 237,199 5,074,357
Contributions 621,276 4,307,295 1,421,818 1,382,554 143,246 271,417 - 8,147,606
Fund transfers 119,427 (749,155) 177,722 (436,302) 136,895 247,298 504,115 -
Payments to participants (473,103) (1,968,561) (357,307) (716,455) (4,302) (7,064) (192,197) (3,718,989)
--------------------------------------------------------------------------------------------------------
Net assets available for
benefits as of
December 31, 1996 $ 5,302,251 $23,089,771 $ 9,565,795 $ 8,849,772 $ 496,962 $ 868,003 $ 3,468,650 $ 51,641,204
========================================================================================================
</TABLE>
F-11
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
5. Income Tax Status
The Internal Revenue Service has ruled on May 15, 1996 that the Plan qualified
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is exempt from tax pursuant to Section 501(a) of the IRC. The Plan
is required to operate in conformity with the IRC to maintain its qualification.
The plan administrator 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, 1996 and 1995, the Plan received $108,493
and $89,431, 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, 1996 and 1995. 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, 1996 and 1995,
approximately $2,653,000 and $1,921,000, respectively, 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.
F-12
<PAGE>
Birmingham Steel Corporation 401(k) Plan
Notes to Financial Statements (continued)
9. Sale of the Bolt Division
In March 1995, the Company divested its Bolt division. Accordingly, participants
who were employees of the Bolt division became 100% vested. Distributions to
such individuals have been included in benefit payments.
F-13
<PAGE>
Supplemental Schedules
Birmingham Steel Corporation 401(k) Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
Number of Cost Basis Current Value
Shares or of Investment of Investment
Principal at End of at End of
Name of Issuer and Title Amount Period Period
- --------------------------------------------------------------------------------
Investments:
Birmingham Steel Corporation
common stock* 274,622 $ 5,209,721 $ 5,217,825
Merrill Lynch Retirement
Preservation Trust* 22,296,663 22,296,663 22,296,663
Merrill Lynch Basic Value
Fund* 301,327 7,544,200 9,341,136
Merrill Lynch Capital Fund* 278,174 7,903,005 8,637,295
Merrill Lynch Special Value
Fund * 26,266 459,756 468,315
Merrill Lynch Global
Allocation Fund * 56,886 812,248 827,687
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 3,468,650 3,468,650
------------------------------
$ 47,694,243 $ 50,257,571
==============================
* Indicates party-in-interest to the Plan.
F-14
<PAGE>
Birmingham Steel Corporation 401(k) Plan
<TABLE>
<CAPTION>
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1996
Number of Current Value of
Number of Shares or Purchase Selling Cost Asset on
Name of Issuer and Title Transactions Face Value Price Price of Asset Transaction Date Net Gain
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Retirement
Preservation Trust
Purchases 363 6,828,559 $6,828,559 $ - $ - $6,828,559 $ -
Sales 264 3,970,168 - 3,970,168 3,970,168 3,970,168 -
Merrill Lynch Basic Value Fund
Purchases 231 89,825 2,637,384 - - 2,637,384 -
Sales 179 29,215 - 830,901 677,384 830,901 153,517
Merrill Lynch Capital Fund
Purchases 221 85,171 2,413,331 - - 2,413,331 -
Sales 194 50,899 - 1,367,207 1,245,544 1,367,207 121,663
</TABLE>
F-15
<PAGE>
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 401(k)
Plan of our report dated May 9, 1997, with respect to the financial statements
and schedules of the Birmingham Steel Corporation 401(k) Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1996.
Ernst & Young, LLP
------------------
Ernst & Young, LLP
Birmingham, Alabama
June 25, 1997
<PAGE>
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 27, 1997
BIRMINGHAM STEEL CORPORATION
401(K) PLAN
by: Birmingham Steel Corporation
Philip L. Oakes
---------------------------------
Philip L. Oakes-Member of the
Employee Benefits Committee of
the Plan and Vice President,
Human Resources
