|
|
|
|
|
|
|
|
|
|
|
|
|
<PAGE> 1
FIRST QUARTER - 1995
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
_________________________
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended March 31, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from __________ to __________
_________________________
Commission file number 1-9117
I.R.S. Employer Identification Number 36-3425828
INLAND STEEL INDUSTRIES, INC.
(a Delaware Corporation)
30 West Monroe Street
Chicago, Illinois 60603
Telephone: (312) 346-0300
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 48,621,143 shares of the
Company's Common Stock ($1.00 par value) were outstanding as of May 5, 1995.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
(except per share data)
-----------------------
Three Months Ended
March 31
--------------------------
1995 1994
------ ------
<S> <C> <C>
NET SALES $1,257.7 $1,075.7
-------- --------
OPERATING COSTS AND EXPENSES
Cost of goods sold 1,077.8 957.1
Selling, general and administrative expenses 51.7 48.7
Depreciation 36.5 33.7
-------- --------
Total 1,166.0 1,039.5
-------- --------
OPERATING PROFIT 91.7 36.2
General corporate expense, net of income items 4.0 3.3
Interest and other expense on debt 15.8 18.3
-------- --------
INCOME BEFORE INCOME TAXES 71.9 14.6
PROVISION FOR INCOME TAXES 27.9 5.4
-------- --------
NET INCOME $ 44.0 $ 9.2
======== ========
EARNINGS PER SHARE OF COMMON STOCK
Primary $ .84 $ .03
======== ========
Fully Diluted $ .79 $ .03
======== ========
</TABLE>
See notes to consolidated financial statements
-1-
<PAGE> 3
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
---------------------------
Three Months Ended
March 31
--------------------------
1995 1994
------ ------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 44.0 $ 9.2
-------- --------
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation 36.7 33.8
Deferred employee benefit cost 1.9 11.0
Deferred income taxes 12.0 3.7
Change in: Receivables (25.1) (39.6)
Inventories (38.0) (6.2)
Accounts payable (35.2) (6.4)
Accrued salaries and wages (14.9) (4.2)
Other accrued liabilities 41.7 15.5
Other deferred items 12.7 13.4
-------- --------
Net adjustments (8.2) 21.0
-------- --------
Net cash provided from operating activities 35.8 30.2
-------- --------
INVESTING ACTIVITIES
Capital expenditures (24.6) (94.7)
Investments in and advances to joint ventures, net (1.1) 4.7
Proceeds from sales of assets .5 .3
-------- --------
Net cash used for investing activities (25.2) (89.7)
-------- --------
FINANCING ACTIVITIES
Long-term debt retired (5.4) (80.0)
Dividends paid (4.4) (6.2)
Acquisition of treasury stock (.2) (1.2)
-------- --------
Net cash used for financing activities (10.0) (87.4)
-------- --------
Net increase (decrease) in cash and cash equivalents .6 (146.9)
Cash and cash equivalents - beginning of year 107.1 250.5
-------- --------
Cash and cash equivalents - end of period $ 107.7 $ 103.6
======== ========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ 4.5 $ 7.5
Income tax, net 1.1 .4
Non-cash investing and financing activities:
Long-term debt acquired in purchase of assets - 63.3
</TABLE>
See notes to consolidated financial statements
-2-
<PAGE> 4
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
-----------------------------------------------------------
March 31, 1995 December 31, 1994
------------------------ ---------------------
ASSETS (unaudited)
- ------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 107.7 $ 107.1
Receivables 528.7 503.6
Inventories - principally at LIFO
In process and finished products $ 411.4 $ 363.8
Raw materials and supplies 56.1 467.5 65.7 429.5
--------- ---------
Deferred income taxes 41.8 41.3
--------- ---------
Total current assets 1,145.7 1,081.5
INVESTMENTS AND ADVANCES 217.5 225.1
PROPERTY, PLANT AND EQUIPMENT
Valued on basis of cost 4,292.1 4,269.2
Less: Reserve for depreciation,
amortization and depletion 2,594.5 2,558.2
Allowance for terminated facilities 100.7 1,596.9 100.7 1,610.3
--------- --------
DEFERRED INCOME TAXES 366.5 379.0
OTHER ASSETS 57.7 57.5
--------- ---------
Total Assets $ 3,384.3 $ 3,353.4
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable $ 318.1 $ 351.2
Accrued liabilities 220.9 194.1
Long-term debt due within one year 19.5 19.5
--------- ---------
Total current liabilities 558.5 564.8
LONG-TERM DEBT 700.5 705.9
DEFERRED EMPLOYEE BENEFITS 1,303.1 1,301.2
OTHER CREDITS 47.3 49.4
--------- ---------
Total liabilities 2,609.4 2,621.3
REDEEMABLE PREFERRED STOCK 185.0 185.0
COMMON STOCK REPURCHASE COMMITMENT 37.9 37.9
STOCKHOLDERS' EQUITY (Schedule A) 552.0 509.2
--------- ---------
Total Liabilities, Redeemable Preferred Stock,
and Stockholders' Equity $ 3,384.3 $ 3,353.4
========= =========
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE> 5
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
NOTE 1/FINANCIAL STATEMENTS
Results of operations for any interim period are not necessarily indicative of
results of any other periods or for the year. The financial statements as of
March 31, 1995 and for the three-month periods ended March 31, 1995 and 1994
are unaudited, but in the opinion of management include all adjustments
necessary for a fair presentation of results for such periods. These financial
statements should be read in conjunction with the financial statements and
related notes contained in the Annual Report to Stockholders for the year ended
December 31, 1994.
NOTE 2/COMMITMENTS
The total amount of firm commitments of the Company and its subsidiaries to
contractors and suppliers, primarily in connection with additions to property,
plant and equipment, was $42 million on March 31, 1995, unchanged from year end
1994.
-4-
<PAGE> 6
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - Comparison of First Quarter 1995 to First Quarter 1994
The Company reported first quarter 1995 consolidated net income of $44.0
million, the Company's best quarter since the second quarter of 1989, compared
with net income of $9.2 million in the comparable year-earlier period.
Improved operating results at both the Steel Manufacturing segment and
Materials Distribution segment were the principal factors for the improvement.
Also contributing to the improvement was lower consolidated interest expense.
Consolidated net sales increased 17 percent to a record $1.26 billion in the
1995 quarter from $1.08 billion in the 1994 first quarter, the result of higher
volume and improved average selling price.
The Steel Manufacturing segment's net sales of $651.7 million in the first
quarter of 1995 represented a 10 percent improvement from the year-ago period.
The average selling price of steel mill products shipped rose 8 percent from
the year-ago period reflecting, in part, the continued overall strength of the
market, while steel mill shipments increased 2 percent to 1,282,000 tons. In
spite of interruptions caused by unscheduled equipment outages, operating
profit in the quarter jumped to $51.3 million from $13.6 million in the
comparable 1994 quarter. The sales improvement was the primary factor leading
to the increase.
The Materials Distribution segment reported record operating profit in the
quarter of $42.1 million, up from $21.4 million a year earlier. The
improvement was due in large part to an increase in net sales, which rose 21
percent to $652.3 million from $538.6 million in the 1994 quarter, reflecting
continued strong business conditions. The net sales increase was due to a 14
percent increase in average selling price, reflecting in part the recovery of
higher materials costs from suppliers, and a 7 percent increase in volume.
Liquidity and Financing
The Company's cash and cash equivalents of $107.7 million at March 31, 1995
was virtually unchanged from the $107.1 million reported at year-end 1994.
There was no short-term borrowing at either date.
Final documentation has been completed on the new Ryerson unsecured
revolving credit facility. The new agreement extends the maturity of the
credit facility for five years and increases the amount to $200 million from
$100 million. This increases the Company's subsidiaries total committed credit
facilities to $325 million.
-5-
<PAGE> 7
In March, the Company announced the following three actions taken by the
Board of Directors. Payment of a common stock dividend was reinstated with an
initial quarterly declaration of $.05 per share. Authorization was given for
the contribution of $100 million of Company common stock to the Company's
pension trust, subject to a cap of 4.4 million shares. The contribution will
strengthen the plan's funded status and reduce required cash contributions over
the next few years. Authorization was also given for the repurchase of all
outstanding shares of Series F Exchangeable Preferred Stock, a voting preferred
stock with an outstanding stated value of $185 million and an annual dividend
rate of 9.48 percent. While there will be a "breakage fee" of approximately
$10 million associated with the repurchase, the action will reduce the
Company's annual preferred dividend payments by $17.5 million.
-6-
<PAGE> 8
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Consolidated financial statements of Inland Materials Distribution
Group, Inc. are set forth in Appendix A to this Quarterly Report on Form 10-Q.
Separate consolidated financial statements for Inland Steel Company are set
forth in Inland Steel Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3.(i) Copy of Certificate of Incorporation, as amended, of the
Company. (Filed as Exhibit 3.(i) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994,
and incorporated by reference herein.)
3.(ii) Copy of By-laws, as amended, of the Company. (Filed as
Exhibit 3.(ii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, and incorporated by
reference herein.)
4.A Copy of Certificate of Designations, Preferences and Rights of
Series A $2.40 Cumulative Convertible Preferred Stock of the
Company. (Filed as part of Exhibit B to the definitive Proxy
Statement of Inland Steel Company dated March 21, 1986 that
was furnished to stockholders in connection with the annual
meeting held April 23, 1986, and incorporated by reference
herein.)
4.B Copy of Certificate of Designation, Preferences and Rights of
Series D Junior Participating Preferred Stock of the Company.
(Filed as Exhibit 4-D to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, and
incorporated by reference herein.)
4.C Copy of Rights Agreement, dated as of November 25, 1987, as
amended and restated as of May 24, 1989, between the Company
and The First National Bank of Chicago, as Rights Agent
(Harris Trust and Savings Bank, as successor Rights Agent).
(Filed as Exhibit 1 to the Company's Current Report on Form
8-K filed on May 24, 1989, and incorporated by reference
herein.)
4.D Copy of Certificate of Designations, Preferences and Rights of
Series E ESOP Convertible Preferred Stock of the Company.
(Filed as Exhibit 4-F to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1989, and
incorporated by reference herein.)
4.E Copy of Certificate of Designations, Preferences and Rights of
Series F Exchangeable Preferred Stock of the Company. (Filed
as Exhibit 4(b) to the Company's Current Report on Form 8-K
filed on December 18, 1989, and incorporated by reference
herein.)
4.F Copy of Indenture dated as of December 15, 1992, between the
Company and Harris Trust and Savings Bank, as Trustee,
respecting the Company's $150,000,000 12-3/4% Notes due
December 15, 2002. (Filed as Exhibit 4-G to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1992, and incorporated by reference herein.)
-7-
<PAGE> 9
4.G Copy of First Mortgage Indenture, dated April 1, 1928, between
Inland Steel Company (the "Steel Company") and First Trust and
Savings Bank and Melvin A. Traylor, as Trustees, and of
supplemental indentures thereto, to and including the
Thirty-Second Supplemental Indenture, incorporated by
reference from the following Exhibits: (i) Exhibits B-1(a),
B-1(b), B-1(c), B-1(d) and B-1(e), filed with Steel Company's
Registration Statement on Form A-2 (No. 2-1855); (ii) Exhibits
D-1(f) and D-1(g), filed with Steel Company's Registration
Statement on Form E-1 (No. 2-2182); (iii) Exhibit B-1(h),
filed with Steel Company's Current Report on Form 8-K dated
January 18, 1937; (iv) Exhibit B-1(i), filed with Steel
Company's Current Report on Form 8-K, dated February 8, 1937;
(v) Exhibits B-1(j) and B-1(k), filed with Steel Company's
Current Report on Form 8-K for the month of April, 1940; (vi)
Exhibit B-2, filed with Steel Company's Registration Statement
on Form A-2 (No. 2-4357); (vii) Exhibit B-1(l), filed with
Steel Company's Current Report on Form 8-K for the month of
January, 1945; (viii) Exhibit 1, filed with Steel Company's
Current Report on Form 8-K for the month of November, 1946;
(ix) Exhibit 1, filed with Steel Company's Current Report on
Form 8-K for the months of July and August, 1948; (x) Exhibits
B and C, filed with Steel Company's Current Report on Form 8-K
for the month of March, 1952; (xi) Exhibit A, filed with Steel
Company's Current Report on Form 8-K for the month of July,
1956; (xii) Exhibit A, filed with Steel Company's Current
Report on Form 8-K for the month of July, 1957; (xiii) Exhibit
B, filed with Steel Company's Current Report on Form 8-K for
the month of January, 1959; (xiv) the Exhibit filed with Steel
Company's Current Report on Form 8-K for the month of
December, 1967; (xv) the Exhibit filed with Steel Company's
Current Report on Form 8-K for the month of April, 1969; (xvi)
the Exhibit filed with Steel Company's Current Report on Form
8-K for the month of July, 1970; (xvii) the Exhibit filed with
the amendment on Form 8 to Steel Company's Current Report on
Form 8-K for the month of April, 1974; (xviii) Exhibit B,
filed with Steel Company's Current Report on Form 8-K for the
month of September, 1975; (xix) Exhibit B, filed with Steel
Company's Current Report on Form 8-K for the month of January,
1977; (xx) Exhibit C, filed with Steel Company's Current
Report on Form 8-K for the month of February, 1977; (xxi)
Exhibit B, filed with Steel Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1978; (xxii) Exhibit B,
filed with Steel Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed
with Steel Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1980; (xxiv) Exhibit 4-D, filed with
Steel Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1982; (xxv) Exhibit 4-E, filed with Steel
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel
Company's Registration Statement on Form S-2 (No. 33-43393);
and (xxvii) Exhibit 4 filed with Steel Company's Current
Report on Form 8-K dated June 23, 1993.
4.H Copy of consolidated reprint of First Mortgage Indenture,
dated April 1, 1928, between Inland Steel Company and First
Trust and Savings Bank and Melvin A. Traylor, as Trustees, as
amended and supplemented by all supplemental indentures
thereto, to and including the Thirteenth Supplemental
Indenture. (Filed as Exhibit 4-E to Form S-1 Registration
Statement No. 2-9443, and incorporated by reference herein.)
11 Statement of Earnings per Share of Common Stock.
27 Financial Data Schedule
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the
quarter ended March 31, 1995.
-8-
<PAGE> 10
SIGNATURE
Pursuant to the requirements 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.
INLAND STEEL INDUSTRIES, INC.
By James M. Hemphill
______________________________
James M. Hemphill
Controller and
Principal Accounting Officer
Date: May 10, 1995
-9-
<PAGE> 11
Part I -- Schedule A
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
SUMMARY OF STOCKHOLDERS' EQUITY
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
---------------------------------------------------------------------
March 31, 1995 December 31, 1994
-------------------------- ---------------------------
(unaudited)
<S> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY
- --------------------
Series A preferred stock ($1 par value)
- 94,701 shares issued and outstanding as of
March 31, 1995 and December 31, 1994 $ .1 $ .1
Series E preferred stock ($1 par value)
- 3,098,628 shares and 3,102,553 shares
issued and outstanding as of March 31,
1995 and December 31, 1994, respectively 3.1 3.1
Common stock ($1 par value)
- 50,556,350 shares issued as of March 31, 1995
and December 31, 1994 50.6 50.6
Capital in excess of par value 1,092.7 1,095.5
Accumulated deficit
Balance beginning of year $(292.4) $(371.9)
Net income 44.0 107.4
Dividends
Series A preferred stock -
$.60 per share in 1995 and
$2.40 per share in 1994 - (.2)
Series E preferred stock -
$3.523 per share in 1994 - (11.0)
Income tax benefit - Series E dividend - 2.5
Series F preferred stock -
$23.70 per share in 1995 and
$94.80 per share in 1994 (4.4) (17.5)
Series G preferred stock -
$1.54165 per share in 1994 - (1.7)
Common stock - $.05 per share in 1995 (2.2) (255.0) - (292.4)
------- -------
Unearned compensation related to ESOP (98.1) (100.5)
Common stock repurchase commitment (37.9) (37.9)
Investment valuation allowance (3.4) (3.5)
Unearned restricted stock award compensation (3.5) (4.0)
Treasury stock, at cost
- 5,885,650 shares and 6,006,122
shares as of March 31, 1995 and
December 31, 1994, respectively (195.0) (200.9)
Cumulative translation adjustment (1.6) (.9)
------- -------
Total Stockholders' Equity $ 552.0 $ 509.2
======= =======
</TABLE>
-10-
<PAGE> 12
Part I -- Schedule B
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
SUMMARY FINANCIAL INFORMATION FOR BUSINESS SEGMENTS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
-----------------------
Three Months Ended
March 31
------------------------
1995 1994
------ ------
<S> <C> <C>
NET SALES
- ---------
Steel Manufacturing Operations $651.7 $590.9
Materials Distribution Operations 652.3 538.6
Eliminations and adjustments (46.3) (53.8)
-------- --------
Total Net Sales $1,257.7 $1,075.7
======== ========
OPERATING PROFIT
- ----------------
Steel Manufacturing Operations $ 51.3 $ 13.6
Materials Distribution Operations 42.1 21.4
Eliminations and adjustments (1.7) 1.2
-------- --------
Total Operating Profit $ 91.7 $ 36.2
======== ========
</TABLE>
-11-
<PAGE> 13
Exhibit 11
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
Statement of Earnings Per Share of Common Stock
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars and Shares
in Millions
(except per share data)
-----------------------
Three Months Ended
March 31
----------------------
1995 1994
---- ----
<S> <C> <C>
PRIMARY EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 44.6 41.2
Dilutive effect of stock options .1 .4
-------- --------
44.7 41.6
======== ========
Net income $ 44.0 $ 9.2
Dividends on preferred stock, net of tax benefit on dividends
applicable to leveraged Series E Preferred Stock held by the ESOP 6.5 8.0
-------- --------
Net income applicable $ 37.5 $ 1.2
======== ========
Primary earnings per share of common stock $ .84 $ .03
======== ========
FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 44.6 41.2
Assumed conversion of Series A and leveraged Series E Preferred Stock 3.1 3.0
Dilutive effect of stock options .1 .4
-------- --------
47.8 44.6
======== ========
Net income $ 44.0 $ 9.2
Dividends on antidilutive preferred stock 4.5 6.3
Additional ESOP funding required on conversion of leveraged
Series E Preferred Stock, net of tax 1.8 1.7
-------- --------
Net income applicable $ 37.7 $ 1.2
======== ========
Fully diluted earnings per share of common stock $ .79 $ .03
======== ========
</TABLE>
NOTE: Series G Preferred Stock was converted to common stock as the result
of a redemption call in May 1994.
In the three months ended March 31, 1995, the assumed conversion of
non-leveraged Series E Preferred Stock was antidilutive. In the
three months ended March 31, 1994, the assumed conversion of Series
A, non-leveraged Series E, and Series G Preferred Stock were
antidilutive.
-12-
<PAGE> 14
APPENDIX A
INLAND MATERIALS DISTRIBUTION GROUP, INC.
AND SUBSIDIARY COMPANIES
(A wholly owned subsidiary of Inland Steel Industries, Inc.)
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
-------------------
Three Months Ended
March 31
------------------------
1995 1994
-------- --------
<S> <C> <C>
NET SALES $652.3 $538.6
------ ------
OPERATING COSTS AND EXPENSES
Cost of goods sold 565.0 473.9
Selling, general and administrative expenses 39.8 38.3
Depreciation and amortization 5.4 5.0
------ ------
Total 610.2 517.2
------ ------
OPERATING PROFIT 42.1 21.4
General corporate expense (1.8) (1.8)
Interest income (expense), net .7 (.8)
------ ------
INCOME BEFORE INCOME TAXES 41.0 18.8
PROVISION FOR INCOME TAXES 16.5 6.0
------ ------
NET INCOME $24.5 $12.8
===== =====
</TABLE>
See notes to consolidated financial statements
A-1
<PAGE> 15
INLAND MATERIALS DISTRIBUTION GROUP, INC.
AND SUBSIDIARY COMPANIES
(A wholly owned subsidiary of Inland Steel Industries, Inc.)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
-------------------
Three Months Ended
March 31
----------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 24.5 $ 12.8
------ ------
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization 5.4 5.0
Deferred employee benefit cost (1.1) (.8)
Deferred income taxes 1.1 (.2)
Change in: Receivables (63.7) (48.6)
Inventories (12.0) (14.3)
Other assets (.6) -
Accounts payable 13.0 35.0
Payables to related companies 13.8 8.9
Accrued liabilities (4.7) (4.6)
------ ------
Net adjustments (48.8) (19.6)
------ ------
Net cash used for operating activities (24.3) (6.8)
------ ------
INVESTING ACTIVITIES
Capital expenditures (3.0) (2.3)
Proceeds from sales of assets .3 .3
------ ------
Net cash used for investing activities (2.7) (2.0)
------ ------
FINANCING ACTIVITIES
Long-term debt retired (.6) (.4)
Change in notes receivable from related companies 41.9 (2.0)
------ ------
Net cash provided from (used for) financing activities 41.3 (2.4)
------ ------
Net increase (decrease) in cash and cash equivalents 14.3 (11.2)
Cash and cash equivalents - beginning of year 2.5 29.5
------ ------
Cash and cash equivalents - end of period $ 16.8 $ 18.3
====== ======
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ .8 $ 1.1
Income taxes, net 9.4 5.2
</TABLE>
See notes to consolidated financial statements
A-2
<PAGE> 16
INLAND MATERIALS DISTRIBUTION GROUP, INC.
AND SUBSIDIARY COMPANIES
(A wholly owned subsidiary of Inland Steel Industries, Inc.)
CONSOLIDATED BALANCE SHEET
________________________________________________________________________________
________________________________________________________________________________
<TABLE>
<CAPTION>
Dollars in Millions
----------------------------------------------------------
ASSETS March 31, 1995 December 31, 1994
- ------ ------------------------ ---------------------------
(unaudited)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 16.8 $ 2.5
Receivables 290.8 227.1
Inventories - principally at LIFO 285.2 273.2
Notes receivable from related companies 15.7 57.6
Deferred income taxes 13.1 13.0
-------- --------
Total current assets 621.6 573.4
PROPERTY, PLANT AND EQUIPMENT
Valued on basis of cost $463.9 $461.6
Less accumulated depreciation 213.8 250.1 209.1 252.5
------ ------
DEFERRED INCOME TAXES 25.4 26.6
EXCESS OF COST OVER NET ASSETS ACQUIRED 24.7 25.0
OTHER ASSETS 2.2 1.6
-------- --------
Total Assets $ 924.0 $ 879.1
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable $ 112.8 $ 99.8
Payables to related companies - trade and other 28.6 14.8
Accrued liabilities 23.6 28.3
Long-term debt due within one year 4.7 4.7
-------- --------
Total current liabilities 169.7 147.6
LONG-TERM DEBT 23.0 23.6
DEFERRED EMPLOYEE BENEFITS AND OTHER 126.8 127.9
-------- --------
Total liabilities 319.5 299.1
STOCKHOLDER'S EQUITY 604.5 580.0
-------- --------
Total Liabilities and Stockholder's Equity $ 924.0 $ 879.1
======== ========
</TABLE>
See notes to consolidated financial statements
A-3
<PAGE> 17
INLAND MATERIALS DISTRIBUTION GROUP, INC.
AND SUBSIDIARY COMPANIES
(A wholly owned subsidiary of Inland Steel Industries, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________________
________________________________________________________________________________
NOTE 1/FINANCIAL STATEMENTS
Results of operations for any interim period are not necessarily indicative of
results of any other periods or for the year. The financial statements as of
March 31, 1995 and for the three-month periods ended March 31, 1995 and 1994
are unaudited, but in the opinion of management include all adjustments
necessary for a fair presentation of results for such periods. These financial
statements should be read in conjunction with the financial statements and
related notes contained in Appendix A of Inland Steel Industries, Inc. Annual
Report on Form 10-K for the year ended December 31, 1994.
NOTE 2/RELATED PARTY TRANSACTIONS
Inland Materials Distribution Group, Inc. ("Distribution") has agreed to
procedures established by Inland Steel Industries, Inc. ("Industries") for
charging Industries' administrative expenses to the operating companies owned
by it. Pursuant to these procedures, Distribution was charged $1.8 million by
Industries for each of the first quarters of 1995 and 1994, for management,
financial and legal services provided to Distribution.
Procedures also have been established to charge interest on all intercompany
loans within the Industries group of companies. Such loans currently bear
interest at the prime rate. Distribution's net intercompany interest income
for the first three months of 1995 totaled $.9 million as compared to $.1
million of interest expense for the first quarter of 1994.
Distribution sells to and purchases products from other companies within the
Industries group of companies. Such transactions are made at prevailing market
prices. These transactions are summarized as follows:
<TABLE>
<CAPTION>
Dollars in Millions
-------------------
Three Months
Ended March 31
--------------
1995 1994
------ ------
<S> <C> <C>
Net Product Sales $ 3.4 $ 2.6
Net Product Purchases 44.5 52.8
</TABLE>
A-4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF OPERATIONS, THE CONSOLIDATED BALANCE SHEET, AND THE
SUMMARY OF STOCKHOLDERS' EQUITY CONTAINED IN THE QUARTERLY REPORT ON FORM 10-Q
TO WHICH THIS EXHIBIT IS ATTACHED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL SCHEDULES
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 107,700
<SECURITIES> 0
<RECEIVABLES> 553,700
<ALLOWANCES> 25,000
<INVENTORY> 467,500
<CURRENT-ASSETS> 1,145,700
<PP&E> 4,292,100
<DEPRECIATION> 2,695,200
<TOTAL-ASSETS> 3,384,300
<CURRENT-LIABILITIES> 558,500
<BONDS> 700,500
<COMMON> 50,600
185,000
3,200
<OTHER-SE> 498,200
<TOTAL-LIABILITY-AND-EQUITY> 3,384,300
<SALES> 1,257,200
<TOTAL-REVENUES> 1,257,700
<CGS> 1,113,800
<TOTAL-COSTS> 1,114,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,800
<INCOME-PRETAX> 71,900
<INCOME-TAX> 27,900
<INCOME-CONTINUING> 44,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,000
<EPS-PRIMARY> .84
<EPS-DILUTED> .79
</TABLE>
|
|