<PAGE>
SECOND QUARTER - 1996
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 June 30, 1996
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: 48,633,069 shares of the
Company's Common Stock ($1.00 par value per share) were outstanding as of
August 5, 1996.
<PAGE>
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 Six Months Ended
June 30 June 30
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $1,163.0 $1,273.5 $2,343.9 $2,531.2
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES
Cost of goods sold 1,030.2 1,072.8 2,072.2 2,150.7
Selling, general and administrative expenses 53.1 52.6 106.0 104.3
Depreciation 36.5 35.7 73.3 72.2
-------- -------- -------- --------
Total 1,119.8 1,161.1 2,251.5 2,327.2
-------- -------- -------- --------
OPERATING PROFIT 43.2 112.4 92.4 204.0
General corporate income (expense), net (.5) (2.3) (1.8) (6.2)
Interest and other expense on debt (20.1) (15.8) (40.0) (31.6)
Gain from issuance of subsidiary stock (Note 2) 31.4 - 31.4 -
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 54.0 94.3 82.0 166.2
PROVISION FOR INCOME TAXES 20.3 36.4 31.1 64.3
-------- -------- -------- --------
INCOME BEFORE MINORITY INTEREST 33.7 57.9 50.9 101.9
MINORITY INTEREST IN RYERSON TULL, INC. (Note 2) - - - -
-------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY LOSS 33.7 57.9 50.9 101.9
EXTRAORDINARY LOSS ON EARLY RETIREMENT OF DEBT (Note 2) 14.5 - 14.5 -
-------- -------- -------- --------
NET INCOME $ 19.2 $ 57.9 $ 36.4 $ 101.9
======== ======== ======== ========
EARNINGS PER SHARE OF COMMON STOCK:
Primary:
Before extraordinary loss $ .65 $ 1.08 $ .96 $ 1.93
Extraordinary loss on early retirement of debt (.30) - (.30) -
-------- -------- -------- --------
Net income $ .35 $ 1.08 $ .66 $ 1.93
======== ======== ======== ========
Fully Diluted:
Before extraordinary loss $ .61 $ 1.02 $ .90 $ 1.81
Extraordinary loss on early retirement of debt (.28) - (.28) -
-------- -------- -------- --------
Net income $ .33 $ 1.02 $ .62 $ 1.81
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
-1-
<PAGE>
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Dollars in Millions
-------------------
Six Months Ended
June 30
-----------------
1996 1995
------- ------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 36.4 $101.9
------- ------
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation 73.6 72.5
Deferred employee benefit cost 11.0 7.0
Deferred income taxes 8.9 44.8
Gain from issuance of subsidiary stock (31.4) -
Change in: Receivables (15.9) (43.7)
Inventories (4.3) (53.6)
Advances - (28.2)
Accounts payable (23.5) (32.8)
Accrued salaries and wages (17.4) (2.8)
Other accrued liabilities 18.6 28.5
Other deferred items 1.5 10.1
------- ------
Net adjustments 21.1 1.8
------- ------
Net cash provided from operating activities 57.5 103.7
------- ------
INVESTING ACTIVITIES
Capital expenditures (74.4) (51.0)
Investments in and advances to joint ventures, net 7.6 5.2
Proceeds from sales of assets 4.9 1.1
------- ------
Net cash used for investing activities (61.9) (44.7)
------- ------
FINANCING ACTIVITIES
Issuance of subsidiary stock 77.1 -
Long-term debt retired (153.2) (8.9)
Dividends paid (10.5) (16.6)
Acquisition of treasury stock (2.2) (1.2)
------- ------
Net cash used for financing activities (88.8) (26.7)
------- ------
Net increase (decrease) in cash and cash equivalents (93.2) 32.3
Cash and cash equivalents - beginning of year 267.4 107.1
------- ------
Cash and cash equivalents - end of period $ 174.2 $139.4
======= ======
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ 37.4 $ 30.2
Income taxes, net 5.2 4.9
Non-cash investing and financing activities:
Reduction of deferred employee benefits resulting
from contribution of common stock to the Company's
Pension Trust - 100.0
</TABLE>
See notes to consolidated financial statements
-2-
<PAGE>
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
================================================================================
<TABLE>
<CAPTION>
Dollars in Millions
--------------------------------------------
ASSETS June 30, 1996 December 31, 1995
- ------ -------------------- --------------------
(unaudited)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 174.2 $ 267.4
Receivables 504.4 488.5
Inventories - principally at LIFO
In process and finished products $ 406.9 $ 386.0
Raw materials and supplies 58.4 465.3 75.0 461.0
-------- --------
Deferred income taxes 44.9 45.4
-------- --------
Total current assets 1,188.8 1,262.3
INVESTMENTS AND ADVANCES 236.7 241.0
PROPERTY, PLANT AND EQUIPMENT
Valued on basis of cost 4,436.8 4,364.0
Less: Reserve for depreciation, amortization and depletion 2,734.3 2,662.9
Allowance for terminated facilities 100.7 1,601.8 100.7 1,600.4
-------- --------
DEFERRED INCOME TAXES 287.6 295.0
INTANGIBLE PENSION ASSET - 102.6
PREPAID PENSION COSTS 60.8 -
OTHER ASSETS 51.1 57.0
-------- --------
Total Assets $3,426.8 $3,558.3
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable $ 290.9 $ 314.4
Accrued liabilities 224.5 223.3
Long-term debt due within one year 110.8 106.5
-------- --------
Total current liabilities 626.2 644.2
LONG-TERM DEBT 627.0 784.5
DEFERRED EMPLOYEE BENEFITS 1,249.5 1,280.3
OTHER CREDITS 64.3 66.2
-------- --------
Total liabilities 2,567.0 2,775.2
MINORITY INTEREST IN RYERSON TULL, INC. 45.7 -
COMMON STOCK REPURCHASE COMMITMENT 33.2 34.5
STOCKHOLDERS' EQUITY (Schedule A) 780.9 748.6
-------- --------
Total Liabilities, Minority Interest, Temporary Equity,
and Stockholders' Equity $3,426.8 $3,558.3
======== ========
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE>
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
June 30, 1996 and for the three-month and six-month periods ended June 30, 1996
and 1995 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, 1995.
NOTE 2/RECAPITALIZATION
In the 1996 second quarter, the Company undertook a recapitalization that
involved the Company and both its Inland Steel Company ("ISC") and Ryerson Tull,
Inc. ("RT") subsidiaries. As part of the restructuring, RT, formerly Inland
Materials Distribution Group, Inc. ("IMDG"), exchanged existing shares of IMDG
common stock, all of which were owned by the Company, for 34.0 million shares of
new-issue RT Series B common stock ($1.00 par value per share). RT also sold 5.2
million shares of new-issue Series A common stock ($1.00 par value per share) in
a public offering, the net proceeds of which approximated $77.1 million. The
Company recognized a $31.4 million gain on the sale of the RT Series A common
stock. (Minority interest in second quarter 1996 net income was $47,000.)
Prior to the issuance of the Series A common stock, RT declared and paid
dividends of $445.9 million to the Company, of which $152.1 million was in cash
and $293.8 million was in the form of a note payable. The Company used $63.2
million of the cash dividend to repay intercompany borrowing from RT and its
subsidiaries.
In July (subsequent to the date of the balance sheet presented in the attached
financial statements), RT sold $150 million of 8-1/2% Notes due July 15, 2001
and $100 million of 9-1/8% Notes due July 15, 2006 in a public offering. The net
proceeds of the offering along with a portion of RT's cash on hand was used to
pay the $293.8 million note balance due the Company.
The Company's recapitalization efforts also included the following:
Effective April 30, 1996, that portion of the Company's Pension plan covering
RT's current and former employees was separated and became a new plan. Due to
this separation, the Company remeasured each subsidiary's benefit obligation
using plan data and actuarial assumptions as of April 30, 1996, including an
increase in the discount rate from 7.75 percent used previously to 8.0 percent.
Primarily as a result of the change in the discount rate, the intangible pension
asset and the offsetting additional minimum liability in deferred employee
benefits were no longer required.
In June 1996, the Company made a tender offer for the entire $150 million
principal amount outstanding of the Company's 12-3/4% Notes. The early
retirement of $144,150,000 of Notes that were tendered resulted in the Company
recognizing an extraordinary after-tax loss of $14.5 million, $23.3 million
before income taxes, in the 1996 second quarter.
-4-
<PAGE>
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
In July 1996, ISC commenced a tender offer for all $125 million principal amount
outstanding of its Series T First Mortgage Bonds. In the third quarter of 1996,
ISC will recognize an extraordinary after-tax loss on the early retirement of
the $98.7 million of bonds tendered approximating $7.7 million, $11.6 million
before income taxes.
On June 28, 1996, RT established a new four-year $250 million credit facility at
the parent company. The $200 million Ryerson facility and the $25 million Tull
facility were concurrently terminated. As a result, the Company's subsidiaries
(including ISC) increased their committed credit facilities to $375 million, all
of which were unused at June 30, 1996.
NOTE 3/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, increased to $76 million on June 30, 1996 from $61 million
on December 31, 1995.
-5-
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS - Comparison of Second Quarter 1996 to Second Quarter 1995
- --------------------------------------------------------------------------------
For the 1996 second quarter, the Company reported consolidated net income of
$19.2 million compared with net income of $57.9 million in the comparable year-
earlier period. As in the first quarter, lower operating profit at the Steel
Manufacturing segment was the principal reason for the decline. Operating profit
at the Materials Distribution segment was also down from the year-ago period.
Also during the quarter, the Company recorded a pre-tax gain from the issuance
of Ryerson Tull Series A common stock which was offset in large part by an
extraordinary loss on the early redemption of $144,150,000 of the Company's
12-3/4% Notes.
Consolidated net sales decreased 9 percent to $1.16 billion in the 1996
second quarter from $1.27 billion in the comparable 1995 quarter, primarily as
the result of a deterioration in average selling price.
The Steel Manufacturing segment's net sales of $604.9 million in the 1996
second quarter fell 12 percent from the year-ago period. While the volume of
steel mill products shipped slipped 2 percent to 1,316,000 tons, the average
selling price fell 10 percent from the year-ago period reflecting a
deterioration in prices. Operating profit decreased to $11.3 million from $69.6
million in the comparable 1995 quarter, due primarily to the lower average
selling price.
The Materials Distribution segment's net sales decreased by 4 percent to
$607.5 million in the current quarter from $631.7 million in the 1995 second
quarter due to a 10 percent decrease in average selling price, which was offset
in part by a 7 percent increase in volume. Operating profit in the current
quarter declined to $32.7 million from $41.0 million, due primarily to the lower
average selling price.
Comparison of First Six Months of 1996 to First Six Months of 1995
- ------------------------------------------------------------------
The Company reported net income of $36.4 million for the first six months of
1996 compared with net income of $101.9 million for the comparable 1995 period.
While sharply reduced levels of operating profit at the Steel Manufacturing
segment was the principal reason for the decline, operating profit at the
Materials Distribution segment also was lower. In addition, the half, as was the
quarter, was impacted by the gain from the issuance of Ryerson Tull stock and
the extraordinary loss on the early retirement of $144,150,000 of the Company's
12-3/4% Notes.
Consolidated first half 1996 net sales of $2.34 billion were 7 percent lower
than the $2.53 billion realized in the comparable 1995 period, the result of
lower average selling prices.
The Steel Manufacturing segment net sales of $1.22 billion in the first six
months of 1996 were $116.5 million, or 9 percent, lower than that reported in
the 1995 first half, due entirely to a lower average selling price. Steel mill
shipments were up by less than one percent on a comparable period-to-period
basis. The lower average selling price was also the primary factor in the
decline of first half operating profit to $23.9 million from $120.9 million a
year ago.
Net sales of $1.23 billion for the Materials Distribution segment were 4
percent lower than the first six months of 1995 due to lower average selling
price as volume increased 4 percent on a year-to-year basis. The lower average
selling price was also responsible for the decrease in operating profit to $69.3
million from $83.0 million a year ago.
-6-
<PAGE>
Liquidity and Financing
- -----------------------
The Company's cash and cash equivalents were $174.2 million at June 30, 1996
compared with $267.4 million at year-end 1995. There was no short-term borrowing
at either date.
In June of 1996, Ryerson Tull issued 5.2 million shares of its Series A
common stock, the net proceeds of which approximated $77.1 million. The Company
recognized a gain on the sale of the Ryerson Tull stock of approximately $31.4
million.
Ryerson Tull established a new four-year $250 million credit facility prior
to the end of the second quarter. The $200 million Ryerson facility and the $25
million Tull facility were concurrently terminated. The Company's subsidiaries
(including ISC) increased their total committed credit facilities to $375
million as a result.
During June, the Company tendered for all outstanding 12-3/4% Notes of the
Company. Of the $150 million principal amount outstanding, $144,150,000 was
tendered. The Company recognized an extraordinary after-tax loss of $14.5
million, $23.3 million before income taxes, as a result of this transaction. In
connection with the tender offer, the Company solicited and received consents
from the holders of at least a majority of the 12-3/4% Notes to amendments to
the indenture governing the Notes. See Item 2 of Part II of this Form 10-Q.
In July, Ryerson Tull issued $250 million principal amount of Notes
consisting of $150 million of 8-1/2% Notes due July 15, 2001 and $100 million of
9-1/8% Notes due July 15, 2006.
Also in July, Inland Steel Company commenced a tender offer for the entire
$125 million principal amount of its Series T First Mortgage Bonds outstanding.
Of that amount, $98.7 million was tendered which will result in Inland Steel
Company recognizing an extraordinary after-tax loss of approximately $7.7
million, $11.6 million before income taxes, in the third quarter of 1996.
-7-
<PAGE>
PART II. OTHER INFORMATION
---------------------------
ITEM 2. CHANGES IN SECURITIES
(a) In connection with a tender offer for all $150,000,000 aggregate
principal of its 12-3/4% Notes, ISI solicited and received consents
from the holders of at least a majority of the aggregate principal
amount of the Notes to amendments to the indenture (the "Indenture"),
dated as of December 15, 1992, between ISI and Harris Trust and Savings
Bank, as trustee (the "Trustee"), governing the Notes. ISI and the
Trustee executed a supplemental indenture dated as of June 19,1996,
reflecting the amendments. The Amendments became effective on June 26,
1996.
The amendments to the Indenture eliminated covenants that, subject in
each case to certain exceptions, (i) restricted the incurrence of
additional indebtedness by ISI, (ii) restricted the incurrence of debt
and the issuance of preferred stock by "Restricted Subsidiaries" (as
defined in the Indenture), (iii) restricted (a) the payment of
dividends or distributions by ISI on its capital stock, (b) the
acquisition by ISI or any of its subsidiaries of the capital stock of
ISI or any of its subsidiaries or any options, warrants or rights to
purchase or acquire shares of capital stock of ISI or any of its
subsidiaries, (c) investments by ISI or any of its subsidiaries in
other persons and (d) the payment or redemption prior to maturity of
"Debt" (as defined in the Indenture) of ISI that is subordinate to the
Notes (transactions described in clauses (a) through (d) being referred
to as "Restricted Payments"), (iv) restricted limitations on the
ability of "Restricted Subsidiaries" to pay dividends or distributions,
make loans or advances to ISI or any of its subsidiaries and transfer
assets to ISI, (v) restricted the incurrence of liens by ISI and
"Restricted Subsidiaries," (vi) restricted the ability of ISI and the
"Restricted Subsidiaries" to engage in "Sale and Leaseback
Transactions" (as defined in the Indenture), (vii) restricted
"Investments" (as defined in the Indenture) by ISI and its "Restricted
Subsidiaries" in "Unrestricted Subsidiaries" (as defined in the
Indenture), (viii) restricted the ability of ISI and its "Restricted
Subsidiaries" to engage in transactions with certain "Affiliates" (as
defined in the Indenture) and (ix) imposed certain financial conditions
to the consummation of certain mergers, asset sales and acquisitions of
the stock, assets or business of other persons.
(b) See (a) above.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) A meeting of stockholders was held on May 22, 1996 and was an annual
meeting.
(b) No answer is required.
(c) The election of ten nominees for director of the Company was voted upon
at the meeting. The number of affirmative votes and the number of votes
withheld with respect to such approval is as follows:
<TABLE>
<CAPTION>
Nominee Affirmative Votes Votes Withheld
------- ----------------- --------------
<S> <C> <C>
A. Robert Abboud 51,638,482 1,031,826
James W. Cozad 51,830,355 839,953
Robert J. Darnall 51,686,859 983,449
James A. Henderson 51,850,396 819,912
Robert B. McKersie 51,830,197 840,111
Donald S. Perkins 51,823,165 847,143
Jean-Pierre Rosso 51,836,255 834,053
Joshua I. Smith 51,827,878 842,430
Nancy H. Teeters 51,840,106 830,202
Arnold R. Weber 51,836,208 834,100
</TABLE>
The results of the voting for the election of Price Waterhouse to
audit the accounts of the Company and its subsidiaries for 1996 are as
follows:
For Against Abstain
--- ------- -------
52,185,162 314,655 170,481
There were no matters voted upon at the meeting to which broker non-
votes applied.
(d) Not applicable.
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 Annual Report on Form 10-K
for the year ended December 31, 1995, and incorporated by reference
herein.)
-8-
<PAGE>
3.(ii) Copy of By-laws, as amended, of the Company. (Filed as Exhibit
3.(ii) to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995, 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 Subordinated Voting Note Due 1999 in the amount of
$185,000,000 from the Company to NS Finance III, Inc. (Filed as
Exhibit 4.8 to Form S-3 Registration Statement No. 33-62897 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.)
4.G Copy of Supplemental Indenture dated as of June 19, 1996 between the
Company and Harris Trust & Savings Bank, as Trustee, respecting the
Company's $150,000,000 12-3/4% Notes.
4.H 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-Fifth 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;
-9-
<PAGE>
(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); (xxvii) Exhibit 4
filed with Steel Company's Current Report on Form 8-K dated June 23,
1993; and (xxviii) Exhibit 4.C filed with the Steel Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995;
(xxix) Exhibit 4.C filed with the Steel Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1995; and (xxx)
Exhibit 4.C filed with Steel Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996.
4.I 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.)
10.A* Copy of form of Change in Control Agreements dated March 27, 1996
between the Company and the parties listed on the schedule thereto.
(Filed as Exhibit 10.5 to the Ryerson Tull, Inc. Form S-1
Registration Statement No. 333-3235, and incorporated by reference
herein.)
10.B* Change in Control Agreement dated as of March 27, 1996 between the
Company and Neil S. Novich (Filed as Exhibit 10.6 to the Ryerson
Tull, Inc. Form S-1 Registration Statement No. 333-3235, and
incorporated by reference herein.)
- -----------------------
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to the Company's Quarterly Report on Form 10-Q.
-10-
<PAGE>
10.C Registration Rights Agreement between Ryerson Tull, Inc. and the
Company dated as of June 26, 1996. (Filed as Exhibit 10.1 to the
Ryerson Tull, Inc. Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, and incorporated by reference herein.)
10.D Corporate Separation Agreement between Ryerson Tull, Inc. and the
Company dated as of June 26, 1996. (Filed as Exhibit 10.12 to the
Ryerson Tull, Inc. Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, and incorporated by reference herein.)
10.E Cross-License Agreement between Ryerson Tull, Inc. and the Company
dated as of June 26, 1996. (Filed as Exhibit 10.13 to the Ryerson
Tull, Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996, and incorporated by reference herein.)
10.F. Tax Sharing Agreement between Ryerson Tull, Inc. and the Company
dated as of June 26, 1996. (Filed as Exhibit 10.14 to the Ryerson
Tull, Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996, 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 any file Current Reports on Form 8-K during the
quarter ended June 30, 1996.
-11-
<PAGE>
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 /s/ James M. Hemphill
--------------------------
James M. Hemphill
Controller and
Principal Accounting Officer
Date: August 9, 1996
-12-
<PAGE>
Part I -- Schedule A
--------------------
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
SUMMARY OF STOCKHOLDERS' EQUITY
================================================================================
<TABLE>
<CAPTION>
Dollars in Millions
-------------------------------------------------------
June 30, 1996 December 31, 1995
---------------------- ----------------------
(unaudited)
<S> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY
- --------------------
Series A preferred stock ($1 par value)
- 94,201 shares issued and outstanding as of
June 30, 1996 and December 31, 1995 $ .1 $ .1
Series E preferred stock ($1 par value)
- 3,080,512 shares and 3,118,601 shares
issued and outstanding as of June 30,
1996 and December 31, 1995, respectively 3.1 3.1
Common stock ($1 par value)
- 50,556,350 shares issued as of June 30, 1996
and December 31, 1995 50.6 50.6
Capital in excess of par value 1,049.2 1,052.1
Accumulated deficit
Balance beginning of year $(172.8) $(292.4)
Net income 36.4 146.8
Dividends
Series A preferred stock -
$1.20 per share in 1996 and
$2.40 per share in 1995 (.1) (.2)
Series E preferred stock -
$1.7615 per share in 1996 and
$3.523 per share in 1995 (5.4) (11.0)
Income tax benefit - Series E dividend 1.1 2.4
Series F preferred stock -
$47.40 per share in 1995 - (8.8)
Common stock -
$.10 per share in 1996 and
$.20 per share in 1995 (5.1) (145.9) (9.6) (172.8)
------- ------
Unearned compensation related to ESOP (85.3) (89.9)
Common stock repurchase commitment (33.2) (34.5)
Investment valuation allowance (4.0) (4.0)
Unearned restricted stock award compensation (1.5) (2.4)
Treasury stock, at cost
- 1,810,571 shares and 1,814,516
shares as of June 30, 1996 and
December 31, 1995, respectively (50.1) (51.1)
Cumulative translation adjustment (2.1) (2.6)
-------- --------
Total Stockholders' Equity $ 780.9 $ 748.6
======== ========
</TABLE>
-13-
<PAGE>
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 Six Months Ended
June 30 June 30
------------------- ------------------
<S> <C> <C> <C> <C>
1996 1995 1996 1995
-------- -------- -------- --------
NET SALES
- ---------
Steel Manufacturing Operations $ 604.9 $ 685.4 $1,220.6 $1,337.1
Materials Distribution Operations 607.5 631.7 1,232.8 1,284.0
Eliminations and adjustments (49.4) (43.6) (109.5) (89.9)
-------- -------- -------- --------
Total Net Sales $1,163.0 $1,273.5 $2,343.9 $2,531.2
======== ======== ======== ========
OPERATING PROFIT
- ----------------
Steel Manufacturing Operations $ 11.3 $ 69.6 $ 23.9 $ 120.9
Materials Distribution Operations 32.7 41.0 69.3 83.0
Eliminations and adjustments (.8) 1.8 (.8) .1
---- ----- ----- ------
Total Operating Profit $ 43.2 $ 112.4 $ 92.4 $ 204.0
======= ======= ======= ========
</TABLE>
-14-
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- ------- ----------- --------
<S> <C> <C>
3.(i) Copy of Certificate of Incorporation, as amended, of the Company. (Filed as Exhibit
3.(i) to the Company's Annual Report on Form 10-K for the year ended December
31, 1995, 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 Quarterly Report on Form 10-Q for the quarter ended September 30,
1995, 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 Subordinated Voting Note Due 1999 in the amount of $185,000,000 from
the Company to NS Finance III, Inc. (Filed as Exhibit 4.8 to Form S-3 Registration
Statement No. 33-62897 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.) --
4.G Copy of Supplemental Indenture dated as of June 19, 1996 between the Company
and Harris Trust & Savings Bank, as Trustee, respecting the Company's
$150,000,000 12-3/4% Notes............................................................
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- ------- ----------- --------
<S> <C> <C>
4.H 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-Fifth 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); (xxvii) Exhibit 4
filed with Steel Company's Current Report on Form 8-K dated June 23, 1993; and
(xxviii) Exhibit 4.C filed with the Steel Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995; (xxix) Exhibit 4.C filed with the Steel
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1995; and (xxx) Exhibit 4.C filed with the Steel Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996. --
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- ------- ----------- --------
<S> <C> <C>
4.I 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.) --
10.A* Copy of form of Change in Control Agreements dated March 27, 1996 between the
Company and the parties listed on the Schedule thereto. (Filed as Exhibit 10.5 to
the Ryerson Tull, Inc. Form S-1 Registration Statement No. 333-3235, and
incorporated by reference herein.) --
10.B* Change in Control Agreement dated as of March 27, 1996 between the Company
and Neil S. Novich (Filed as Exhibit 10.6 to the Ryerson Tull, Inc. Form S-1
Registration Statement No. 333-3235, and incorporated by reference herein.) --
10.C Registration Rights Agreement between Ryerson Tull, Inc. and the Company dated
as of June 26, 1996. (Filed as Exhibit 10.1 to the Ryerson Tull, Inc. Quarterly
Report on Form 10-Q for the quarter ended June 30, 1996, and incorporated by
reference herein.) --
10.D Corporate Separation Agreement between Ryerson Tull, Inc. and the Company
dated as of June 26, 1996. (Filed as Exhibit 10.12 to the Ryerson Tull, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, and
incorporated by reference herein.) --
10.E Cross-License Agreement between Ryerson Tull, Inc. and the Company dated as of
June 26, 1996. (Filed as Exhibit 10.13 to the Ryerson Tull, Inc. Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996, and incorporated by reference
herein.) --
10.F Tax Sharing Agreement between Ryerson Tull, Inc. and the Company dated as of
June 26, 1996. (Filed as Exhibit 10.14 to the Ryerson Tull, Inc. Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996, and incorporated by reference
herein.) --
11 Statement of Earnings per Share of Common Stock.......................................
27 Financial Data Schedule...............................................................
</TABLE>
- ---------------
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to the Company's Quarterly Report on Form 10-Q.
-iii-
<PAGE>
Exhibit 4.G
================================================================================
INLAND STEEL INDUSTRIES, INC.
and
HARRIS TRUST AND SAVINGS BANK,
TRUSTEE
-------------------
SUPPLEMENTAL INDENTURE
Dated as of June 19, 1996
-------------------
Supplement to Indenture
Dated as of December 15, 1992
-------------------
12 3/4% Notes due December 15, 2002
================================================================================
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of June 19, 1996 (this "Supplemental
Indenture") between INLAND STEEL INDUSTRIES, INC., a corporation duly organized
and existing under the laws of the State of Delaware (the "Company"), having its
principal office at 30 West Monroe Street, Chicago, Illinois 60603, and HARRIS
TRUST AND SAVINGS BANK, 111 West Monroe Street, Chicago, Illinois 60603, an
Illinois state banking corporation (the "Trustee"), Trustee under the Indenture,
dated as of December 15, 1992 (the "Original Indenture"), between the Company
and the Trustee relating to the Company's 12 3/4% Notes due December 15, 2002
(the "Securities").
RECITALS OF THE COMPANY
The Company has offered to purchase for cash all of the Outstanding
Securities (the "Tender Offer") from the Holders of the Securities.
The Tender Offer was commenced by the Company pursuant to its Offer to
Purchase and Consent Solicitation dated May 20, 1996 (as the same may be amended
and supplemented through the date hereof, the "Offer to Purchase").
In connection with the Tender Offer, the Company solicited consents (the
"Consent Solicitation") to the proposed amendments (the "Proposed Amendments")
to the Original Indenture described in the Offer to Purchase.
This Supplemental Indenture evidences the Proposed Amendments described in
the Offer to Purchase.
In accordance with Section 902 of the Original Indenture, the Holders of
record as of June 19, 1996 (the record date fixed under Section 104(c) of the
Original Indenture for the purpose of determining the Holders entitled to give
consents to the Proposed Amendments) of at least a majority in aggregate
principal amount of the Outstanding Securities by Act of said Holders delivered
to the Company and the Trustee have consented to the Proposed Amendments.
The Company has done all things necessary to make this Supplemental
Indenture a valid agreement of the Company in accordance with the terms of the
Original Indenture and has satisfied all other conditions required under Article
Nine of the Original Indenture, including delivery to the Trustee of an Opinion
of Counsel relating to this Supplemental Indenture as contemplated by Section
903 of the Original Indenture.
NOW, THEREFORE, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.1 Definitions. Except as otherwise expressly provided herein or unless
the context otherwise requires, capitalized terms used but not defined in this
Supplemental Indenture shall have the meanings assigned to them in the Original
Indenture.
1.2 Effect of Headings. The Article and Section headings in this
Supplemental Indenture are for convenience only and shall not affect the
construction of the Original Indenture or this Supplemental Indenture.
1.3 Successors and Assigns. All covenants and agreements in this
Supplemental Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.
<PAGE>
1.4 Separability Clause. In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
1.5 Benefits of Supplemental Indenture. Nothing in this Supplemental
Indenture, express or implied, shall give to any person, other than the parties
to this Supplemental Indenture and their successors hereunder and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Supplemental Indenture.
1.6 Governing Law. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
1.7 Reference to and Effect on the Indenture.
(a) On and after the date of this Supplemental Indenture, each reference
in the Original Indenture to "this Indenture," "hereunder," "hereof" or "herein"
shall mean and be a reference to the Original Indenture as supplemented by this
Supplemental Indenture unless the context otherwise requires.
(b) Except as specifically amended, the Original Indenture and the
Securities are hereby ratified and confirmed and all of the terms, conditions
and provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Original Indenture for all purposes, and
every Holder of the Securities heretofore and hereafter authenticated and
delivered under the Original Indenture shall be bound hereby.
1.8 Effectiveness. This Supplemental Indenture shall take effect and be
binding upon execution and delivery by the parties of this Supplemental
Indenture; provided, however, that the provisions of the Original Indenture
referred to in Article II below (such provisions being referred to as the
"Amended Provisions") will remain in effect in the form they existed prior to
the execution of this Supplemental Indenture, the deletions and amendments of
the Amended Provisions contemplated in Article II below will not become
operative, and the terms of the Amended Provisions will not be amended,
modified, waived, or deleted, in each case until the date and time (the
"Acceptance Date") that the Company accepts for payment pursuant to the Offer to
Purchase at least a majority of the aggregate principal amount of the Securities
that are Outstanding immediately prior to such acceptance (it being understood
that Securities tendered to, but not yet accepted for payment by, the Company
shall not be treated as owned by the Company for purposes of the definition of
"Outstanding" herein and in the Original Indenture). Upon the Acceptance Date,
the Amended Provisions will be automatically deleted or modified as contemplated
in Article II below.
Any good faith determination by the Company concerning any conditions of
the Tender Offer and the Consent Solicitation, or the satisfaction thereof, and
any waiver by the Company of any such conditions shall be conclusive and binding
upon all Persons.
ARTICLE II
AMENDMENTS
2.1 Deletion of Sections. From and after the Acceptance Date, the
Original Indenture is hereby automatically amended by deleting in their entirety
the following Sections of the Original Indenture:
(a) SECTION 802. Limitation on Debt.
(b) SECTION 803. Limitation on Restricted Subsidiary Debt and Preferred
Stock.
(c) SECTION 804. Limitation on Restricted Payments.
-2-
<PAGE>
(d) SECTION 805. Distributions by Restricted Subsidiaries.
(e) SECTION 806. Limitation on Liens.
(f) SECTION 807. Limitation on Sale and Leaseback Transactions.
(g) SECTION 808. Limitation on Investments in Unrestricted Subsidiaries.
(h) SECTION 809. Limitation on Transactions with Affiliates.
(i) SECTION 812. Limitation on Mergers, Consolidations and Certain Sales
and Purchases of Assets.
All other covenants in Article Eight of the Original Indenture shall remain
in effect and shall retain their Section numbers.
2.2 Deletion of Cross-References and Modification of Certain Definitions.
From and after the Acceptance Date, the Original Indenture is hereby
automatically amended as follows:
(a) From and after the Acceptance Date, the definition of "Affiliate" in
Section 101 of the Original Indenture is hereby automatically amended by the
deletion in its entirety of the second sentence thereof which reads as follows:
"`Affiliate' shall include, for purposes of the covenants described under
Section 804 and Section 809, without limitation, any Person owning (a) 25% or
more of the Company's outstanding common stock or (b) securities having 25% or
more of the total voting power of the Company's Voting Stock."
(b) From and after the Acceptance Date, the definition of "Unrestricted
Subsidiary" in Section 101 of the Original Indenture is hereby automatically
amended by the deletion in its entirety of the phrase "(1) the Company could
incur $1.00 of additional Debt pursuant to the first paragraph of the
"Limitation on Debt" covenant and (2)".
(c) From and after the Acceptance Date, Section 501 of the Original
Indenture is hereby automatically amended by deleting in its entirety subsection
(4) thereof which reads as follows: "(4) failure to comply with the provisions
of Section 812;".
(d) From and after the Acceptance Date, Section 810 of the Original
Indenture is hereby automatically amended by deleting in its entirety the phrase
"Subject to Section 812, the" and replacing such phrase with the word "The".
(e) From and after the Acceptance Date, Section 1004 of the Original
Indenture is hereby automatically amended by deleting in its entirety the phrase
"Subject to Section 812, the" and replacing such phrase with the word "The".
2.3 Deletion of Definitions. From and after the Acceptance Date, the
Original Indenture is hereby automatically amended by deleting in their entirety
the definitions of each of the following defined terms from Section 101 of the
Original Indenture.
(a) "Consolidated Earnings Available for Fixed Charges"
(b) "Consolidated Income Tax Expense"
(c) "Consolidated Interest Coverage Ratio"
(d) "Consolidated Interest Expense"
(e) "Consolidated Inventories"
(f) "Consolidated Net Income"
(g) "Consolidated Net Worth"
(h) "Consolidated Receivables"
(i) "Consolidated Tangible Assets"
(j) "First Mortgage Indenture"
-3-
<PAGE>
(k) "ISAS Credit Facility"
(l) "Preferred Stock"
(m) "Ryerson Credit Agreement"
(n) "Tangible Assets"
(o) "Tull Credit Agreement"
(p) "Wholly-Owned Subsidiary"
-4-
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
INLAND STEEL INDUSTRIES, INC.
By /s/ VICKI L. AVRIL
---------------------------------
Treasurer
Attest:
/s/ C.B. SALOWITZ
- -------------------------------
Secretary
HARRIS TRUST AND SAVINGS BANK,
Trustee
By /s/ J. BARTOLINI
---------------------------------
Vice President
Attest:
/s/ D.G. DONOVAN
- --------------------------------
Assistant Secretary
-5-
<PAGE>
STATE OF ILLINOIS )
) SS.:
COUNTY OF COOK )
On the 19th day of June, 1996, before me personally came Vicki L. Avril, to
me known, who, being by me duly sworn, did depose and say that she is the
Treasurer of Inland Steel Industries, Inc., one of the corporations described in
and which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she signed her name thereto by like authority.
/s/ REGINA L. HOLLAND
------------------------------------
STATE OF ILLINOIS )
) SS.:
COUNTY OF COOK )
On the 19th day of June, 1996, before me personally came J. Bartolini, to
me known, who, being by me duly sworn, did depose and say that she is a Vice
President of Harris Trust and Savings Bank, one of the corporations described in
and which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she signed her name thereto by like authority.
/s/ KIMBERLY LANGE
------------------------------------
-6-
<PAGE>
Exhibit 11
----------
INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Dollars and Shares in Millions
(except per share data)
---------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1996 1995 1996 1995
----- ----- ----- ------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 48.7 47.2 48.7 45.9
Dilutive effect of stock options - .1 - .1
----- ----- ----- ------
48.7 47.3 48.7 46.0
===== ===== ===== ======
Income before extraordinary loss $33.7 $57.9 $50.9 $101.9
Extraordinary loss 14.5 - 14.5 -
----- ----- ----- ------
Net income 19.2 57.9 36.4 101.9
Dividends on preferred stock, net of tax benefit on dividends
applicable to leveraged Series E Preferred Stock held by
the ESOP 2.3 6.6 4.4 13.2
----- ----- ----- ------
Net income applicable $16.9 $51.3 $32.0 $ 88.7
===== ===== ===== ======
Primary earnings per share of common stock
Before extraordinary loss $ .65 $1.08 $ .96 $ 1.93
Extraordinary loss on early retirement of debt (.30) - (.30) -
----- ----- ----- ------
Net income $ .35 $1.08 $ .66 $ 1.93
===== ===== ===== ======
FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 48.7 47.2 48.7 45.9
Assumed conversion of Series A and leveraged
Series E Preferred Stock 3.0 3.1 3.0 3.1
Dilutive effect of stock options .1 .2 .1 .2
----- ----- ----- ------
51.8 50.5 51.8 49.2
===== ===== ===== ======
Income before extraordinary loss $33.7 $57.9 $50.9 $101.9
Extraordinary loss 14.5 - 14.5 -
----- ----- ----- ------
Net income 19.2 57.9 36.4 101.9
Dividends on antidilutive preferred stock .1 4.5 .2 8.9
Additional ESOP funding required on conversion of leveraged
Series E Preferred Stock, net of tax benefit 2.0 1.9 3.9 3.8
----- ----- ----- ------
Net income applicable $17.1 $51.5 $32.3 $ 89.2
===== ===== ===== ======
Fully diluted earnings per share of common stock
Before extraordinary loss $ .61 $1.02 $ .90 $ 1.81
Extraordinary loss on early retirement of debt (.28) - (.28) -
----- ----- ----- ------
Net income $ .33 $1.02 $ .62 $ 1.81
===== ===== ===== ======
</TABLE>
NOTE: In the three-month and six-month periods ended June 30, 1996, the
assumed conversions of Series A Preferred Stock and non-leveraged
Series E Preferred Stock were antidilutive. In the three-month and
six-month periods ended June 30, 1995, the assumed conversion of
non-leveraged Series E Preferred Stock was antidilutive.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMAITON 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 174,200
<SECURITIES> 0
<RECEIVABLES> 528,300
<ALLOWANCES> 23,900
<INVENTORY> 465,300
<CURRENT-ASSETS> 1,188,800
<PP&E> 4,436,800
<DEPRECIATION> 2,835,000
<TOTAL-ASSETS> 3,426,800
<CURRENT-LIABILITIES> 626,200
<BONDS> 627,000
<COMMON> 50,600
0
3,200
<OTHER-SE> 727,100
<TOTAL-LIABILITY-AND-EQUITY> 3,426,800
<SALES> 2,342,900
<TOTAL-REVENUES> 2,343,900
<CGS> 2,144,700
<TOTAL-COSTS> 2,145,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,000
<INCOME-PRETAX> 82,000
<INCOME-TAX> 31,100
<INCOME-CONTINUING> 50,900
<DISCONTINUED> 0
<EXTRAORDINARY> (14,500)
<CHANGES> 0
<NET-INCOME> 36,400
<EPS-PRIMARY> .66
<EPS-DILUTED> .62
</TABLE>
