<PAGE> 1
FIRST 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 March 31, 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: 48,759,206 shares of the
Company's Common Stock ($1.00 par value) were outstanding as of May 3, 1996.
<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
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
NET SALES $1,180.9 $1,257.7
------------ ------------
OPERATING COSTS AND EXPENSES
Cost of goods sold 1,042.1 1,077.8
Selling, general and administrative expenses 52.8 51.7
Depreciation 36.8 36.5
------------ ------------
Total 1,131.7 1,166.0
------------ ------------
OPERATING PROFIT 49.2 91.7
General corporate expense, net of income items 1.3 4.0
Interest and other expense on debt 19.9 15.8
------------ ------------
INCOME BEFORE INCOME TAXES 28.0 71.9
PROVISION FOR INCOME TAXES 10.8 27.9
------------ ------------
NET INCOME $17.2 $44.0
============ ============
EARNINGS PER SHARE OF COMMON STOCK
Primary $ .31 $ .84
============ ============
Fully Diluted $ .29 $ .79
============ ============
</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
----------------------
1996 1995
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 17.2 $ 44.0
---------- ----------
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation 37.0 36.7
Deferred employee benefit cost 6.4 1.9
Deferred income taxes 3.6 12.0
Change in: Receivables (17.9) (25.1)
Inventories (31.2) (38.0)
Accounts payable 1.0 (35.2)
Accrued salaries and wages (16.6) (14.9)
Other accrued liabilities 13.6 41.7
Other deferred items 1.9 12.7
---------- ----------
Net adjustments (2.2) (8.2)
---------- ----------
Net cash provided from operating activities 15.0 35.8
---------- ----------
INVESTING ACTIVITIES
Capital expenditures (32.0) (24.6)
Investments in and advances to joint ventures, net 4.3 (1.1)
Proceeds from sales of assets 1.3 .5
---------- ----------
Net cash used for investing activities (26.4) (25.2)
---------- ----------
FINANCING ACTIVITIES
Long-term debt retired (5.4) (5.4)
Dividends paid (2.6) (4.4)
Acquisition of treasury stock (1.1) (.2)
---------- ----------
Net cash used for financing activities (9.1) (10.0)
---------- ----------
Net increase (decrease) in cash and cash equivalents (20.5) .6
Cash and cash equivalents - beginning of year 267.4 107.1
---------- ----------
Cash and cash equivalents - end of period $246.9 $107.7
========== ==========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ 8.7 $ 4.5
Income tax, net 1.2 1.1
</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, 1996 December 31, 1995
----------------- ---------------------
ASSETS (unaudited)
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 246.9 $ 267.4
Receivables 506.4 488.5
Inventories - principally at LIFO
In process and finished products $ 435.4 $ 386.0
Raw materials and supplies 56.8 492.2 75.0 461.0
-------- --------
Deferred income taxes 45.3 45.4
-------- --------
Total current assets 1,290.8 1,262.3
INVESTMENTS AND ADVANCES 233.5 241.0
PROPERTY, PLANT AND EQUIPMENT
Valued on basis of cost 4,394.3 4,364.0
Less: Reserve for depreciation,
amortization and depletion 2,698.6 2,662.9
Allowance for terminated facilities 100.7 1,595.0 100.7 1,600.4
------- -------
DEFERRED INCOME TAXES 291.5 295.0
INTANGIBLE PENSION ASSET 102.6 102.6
OTHER ASSETS 59.4 57.0
-------- --------
Total Assets $3,572.8 $3,558.3
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 315.4 $ 314.4
Accrued liabilities 220.3 223.3
Long-term debt due within one year 107.3 106.5
-------- --------
Total current liabilities 643.0 644.2
LONG-TERM DEBT 778.3 784.5
DEFERRED EMPLOYEE BENEFITS 1,286.7 1,280.3
OTHER CREDITS 65.5 66.2
-------- --------
Total liabilities 2,773.5 2,775.2
COMMON STOCK REPURCHASE COMMITMENT 33.5 34.5
STOCKHOLDERS' EQUITY (Schedule A) 765.8 748.6
-------- --------
Total Liabilities, Temporary Equity,
and Stockholders' Equity $3,572.8 $3,558.3
======== ========
</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, 1996 and for the three-month periods ended March 31, 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/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 $78 million on March 31,1996 from $61 million
on December 31, 1995.
-4-
<PAGE> 6
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - Comparison of First Quarter 1996 to First Quarter 1995
The Company reported first quarter 1996 consolidated net income of $17.2
million compared with net income of $44.0 million in the comparable
year-eariler period. 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, but was a much
smaller factor in the decline. Also contributing to lower net income was
higher consolidated interest expense resulting from the conversion of $185
million of Series F Preferred Stock into debt.
Consolidated net sales decreased 6 percent to $1.18 billion in the 1996
first quarter from $1.26 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 $615.7 million in the 1996
first quarter represented a 6 percent reduction from the year-ago period.
Although the volume of steel mill products shipped increased 3 percent to
1,325,000 tons, the average selling price fell 9 percent from the year-ago
period reflecting a deterioration in prices. Operating profit decreased to
$12.6 million from $51.3 million in the comparable 1995 quarter, due primarily
to the lower average selling price.
The Materials Distribution segment's net sales dropped by 4 percent to
$625.3 in the current quarter from $652.3 in the 1995 first quarter due to a 6
percent decrease in average selling price, offset in part by increased volume.
Operating profit in the current quarter declined to $36.6 million from $42.1
million, due primarily to the lower average selling price.
Liquidity and Financing
The Company's cash and cash equivalents were $246.9 million at March 31,
1996 compared with $267.4 million at year-end 1995. There was no short-term
borrowing at either date.
Subsequent Event
On May 7, 1996, the Company announced that its Materials Distribution
subsidiary, Inland Materials Distribution Group, Inc., had changed its name to
Ryerson Tull, Inc. ("Ryerson Tull") and had filed registration statements with
the Securities and Exchange Commission for an initial public offering of up to
15 percent of Ryerson Tull's common stock (the "Common Stock Offering") and for
a public offering of up to $250 million of its notes (the "Note Offering").
The common stock offered to the public will be 6,000,000 shares (including
underwriters' over-allotment options) of Ryerson Tull's new Class A
Common Stock, while the 34,000,000 shares of Ryerson Tull's new Class B Common
Stock will be owned entirely by the Company. Each share of Class A Common
Stock will entitle its holder to one vote, whereas each share of Class B Common
Stock will entitle the holder to four votes. As a result, following the Common
Stock Offering, the Company will retain 96.3% of the aggregate voting power of
all of Ryerson Tull's common stock (95.8% if the underwriters' over-allotment
options are exercised in full).
Prior to the consummation of the Common Stock Offering, Ryerson Tull will
declare a dividend payable to the Company in cash in an amount equal to the
estimated net proceeds of the Common Stock Offering and a dividend of $293.8
million note payable to the Company (the "Note Payable"). All of the net
proceeds from the Note Offering, if consummated, together with a portion of
Ryerson Tull's available cash and/or borrowings under credit facilities, will
be used to discharge the Note Payable. If the Note Offering is not
consummated, the Note Payable will be discharged from Ryerson Tull's cash
generated from operations and/or future Ryerson Tull financings. The Company
plans to use the amounts from such dividends to retire certain of its
indebtedness and that of Inland Steel Company, as well as for general corporate
purposes. There can be no assurance that either the Common Stock Offering or
the Note Offering will be consummated.
-5-
<PAGE> 7
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On March 29, 1996, the EPA filed a lawsuit against Inland Steel Company
in the U.S. District Court for the Northern District of Indiana for alleged
violations of effluent limits contained in its NPDES permit and for the
alleged discharge of pollutants without the authorization of an NPDES
permit. While it is not possible at this time to predict the amount of
Inland Steel Company's potential liability, this matter is not expected to
materially affect Inland Steel Company's financial position. Results of
operations could be materially affected for the particular reporting periods
in which expenses are incurred.
ITEM 5. OTHER INFORMATION
Consolidated financial statements for Ryerson Tull, 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,
1996.
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.)
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.)
-6-
<PAGE> 8
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 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-Fourth 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; and (xxix)
Exhibit 4.H filed with the Steel Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995.
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.)
-7-
<PAGE> 9
10.A* Copy of form of Severance Agreement, dated March 27, 1996, between the
Company and each of the four executive officers of the Company
identified on the exhibit relating to terms and conditions of termination
of employment following a change in control of the Company.
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 March 31, 1996.
- -----------------
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to the Company's Quarterly Report on Form 10-Q.
-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, 1996
-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, 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
March 31, 1996 and December 31, 1995 $ .1 $ .1
Series E preferred stock ($1 par value)
- 3,074,555 shares and 3,118,601 shares
issued and outstanding as of March 31,
1996 and December 31, 1995, respectively 3.1 3.1
Common stock ($1 par value)
- 50,556,350 shares issued as of March 31, 1996
and December 31, 1995 50.6 50.6
Capital in excess of par value 1,049.4 1,052.1
Accumulated deficit
Balance beginning of year $(172.8) $(292.4)
Net income 17.2 146.8
Dividends
Series A preferred stock -
$.60 per share in 1996 and
$2.40 per share in 1995 (.1) (.2)
Series E preferred stock -
$3.523 per share in 1995 - (11.0)
Income tax benefit - Series E dividend - 2.4
Series F preferred stock -
$47.40 per share in 1995 - (8.8)
Common stock -
$.05 per share in 1996 and
$.20 per share in 1995 (2.5) (158.2) (9.6) (172.8)
------- -------
Unearned compensation related to ESOP (87.7) (89.9)
Common stock repurchase commitment (33.5) (34.5)
Investment valuation allowance (4.0) (4.0)
Unearned restricted stock award compensation (1.8) (2.4)
Treasury stock, at cost
- 1,774,873 shares and 1,814,516
shares as of March 31, 1996 and
December 31, 1995, respectively (49.5) (51.1)
Cumulative translation adjustment (2.7) (2.6)
-------- --------
Total Stockholders' Equity $ 765.8 $ 748.6
======== ========
</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
-------------------
1996 1995
-------- --------
<S> <C> <C>
NET SALES
Steel Manufacturing Operations $ 615.7 $ 651.7
Materials Distribution Operations 625.3 652.3
Eliminations and adjustments (60.1) (46.3)
-------- --------
Total Net Sales $1,180.9 $1,257.7
======== ========
OPERATING PROFIT
Steel Manufacturing Operations $ 12.6 $ 51.3
Materials Distribution Operations 36.6 42.1
Eliminations and adjustments - (1.7)
-------- --------
Total Operating Profit $ 49.2 $ 91.7
======== ========
</TABLE>
-11-
<PAGE> 13
APPENDIX A
RYERSON TULL, 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
----------------------
1996 1995
---------- ----------
<S> <C> <C>
NET SALES $ 625.3 $ 652.3
---------- ----------
OPERATING COSTS AND EXPENSES
Cost of goods sold 542.9 565.0
Selling, general and administrative expenses 40.2 39.8
Depreciation and amortization 5.6 5.4
---------- ----------
Total 588.7 610.2
---------- ----------
OPERATING PROFIT 36.6 42.1
General corporate expense, net of income items (.7) .4
Interest and other expense on debt .6 .7
---------- ----------
INCOME BEFORE INCOME TAXES 36.7 41.0
PROVISION FOR INCOME TAXES 14.3 16.5
---------- ----------
NET INCOME $ 22.4 $ 24.5
========== ==========
</TABLE>
See notes to consolidated financial statements
A-1
<PAGE> 14
RYERSON TULL, 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
----------------------
1996 1995
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 22.4 $ 24.5
---------- ---------
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization 5.6 5.4
Deferred employee benefit cost .9 (1.1)
Deferred income taxes 1.7 1.1
Change in: Receivables (30.8) (63.7)
Inventories (34.5) (12.0)
Other assets (.6) (.6)
Accounts payable 21.4 13.0
Payables to related companies .9 13.8
Accrued liabilities (7.3) (4.7)
---------- ---------
Net adjustments (42.7) (48.8)
---------- ---------
Net cash used for operating activities (20.3) (24.3)
---------- ---------
INVESTING ACTIVITIES
Capital expenditures (3.0) (3.0)
Proceeds from sales of assets 1.2 .3
---------- ---------
Net cash used for investing activities (1.8) (2.7)
---------- ---------
FINANCING ACTIVITIES
Long-term debt retired (.5) (.6)
Change in notes receivable from related companies 14.4 41.9
---------- ---------
Net cash provided from financing activities 13.9 41.3
---------- ---------
Net increase (decrease) in cash and cash equivalents (8.2) 14.3
Cash and cash equivalents - beginning of year 53.6 2.5
---------- ---------
Cash and cash equivalents - end of period $ 45.4 $ 16.8
========== =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ .6 $ .8
Income taxes, net 12.5 9.4
</TABLE>
See notes to consolidated financial statements
A-2
<PAGE> 15
RYERSON TULL, INC.
AND SUBSIDIARY COMPANIES
(A wholly owned subsidiary of Inland Steel Industries, Inc.)
CONSOLIDATED BALANCE SHEET
================================================================================
<TABLE>
<CAPTION>
Dollars in Millions
------------------------------------------
ASSETS March 31, 1996 December 31, 1995
- ------ -------------------- --------------------
<S> <C> <C> <C> <C>
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 45.4 $ 53.6
Receivables 274.6 243.8
Inventories - principally at LIFO 297.3 262.8
Notes receivable from related companies 54.4 68.8
Deferred income taxes 13.0 15.6
--------- ---------
Total current assets 684.7 644.6
PROPERTY, PLANT AND EQUIPMENT
Valued on basis of cost $476.8 $476.2
Less accumulated depreciation 230.6 246.2 226.5 249.7
------ ------
DEFERRED INCOME TAXES 24.4 23.5
PREPAID PENSION COSTS 27.8 27.3
EXCESS OF COST OVER NET ASSETS ACQUIRED 23.3 23.6
OTHER ASSETS 4.5 3.9
--------- ---------
Total Assets $ 1,010.9 $ 972.6
========== =========
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable $ 114.2 $ 92.8
Payables to related companies - trade and other 15.3 14.4
Accrued liabilities 25.2 32.5
Long-term debt due within one year 4.7 4.7
--------- ---------
Total current liabilities 159.4 144.4
LONG-TERM DEBT 18.4 18.9
DEFERRED EMPLOYEE BENEFITS AND OTHER 142.2 140.8
--------- ---------
Total liabilities 320.0 304.1
STOCKHOLDER'S EQUITY 690.9 668.5
--------- ---------
Total Liabilities and Stockholder's Equity $ 1,010.9 $ 972.6
========= =========
</TABLE>
See notes to consolidated financial statements
A-3
<PAGE> 16
RYERSON TULL, 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, 1996 and for the three-month periods ended March 31, 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 Appendix A of Inland Steel Industries, Inc. Annual
Report on Form 10-K for the year ended December 31, 1995.
NOTE 2/RELATED PARTY TRANSACTIONS
Ryerson Tull, Inc. ("Ryerson Tull"), formerly Inland Materials Distribution
Group, Inc., 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, Ryerson Tull
was charged $1.7 million and $1.8 million by Industries for the first quarter
of 1996 and 1995, respectively, for management, financial and legal services
provided to Ryerson Tull.
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. Ryerson Tull's net intercompany interest income
for the first three months of 1996 totaled $1.3 million as compared with $.9
million of interest expense for the first quarter of 1995.
Ryerson Tull 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
------------------------
1996 1995
---- ----
<S> <C> <C>
Net Product Sales $ 5.2 $ 3.4
Net Product Purchases 57.7 44.5
</TABLE>
A-4
<PAGE> 17
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.) --
</TABLE>
- i -
<PAGE> 18
Exhibit Sequential
Number Description Page No.
- ------ ----------- --------
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-Fourth 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; and (xxix) --
Exhibit 4.H filed with the Steel Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995.
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.) --
- ii -
<PAGE> 19
Exhibit Sequential
Number Description Page No.
- ------ ----------- --------
10.A* Copy of form of Severance Agreement, dated
March 27, 1996, between the Company and each
of the four executive officers of the Company
identified on the exhibit relating to terms
and conditions of termination of employment
following a change in control of the Company...
11 Statement of Earnings per Share of Common Stock
27 Financial Data Schedule........................
- --------------
* 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> 1
EXHIBIT 10.A
Copy of Form of Severance Agreement
dated March 27, 1996
between
Inland Steel Industries, Inc.
and each of:
Robert J. Darnall
Judd R. Cool
Earl L. Mason
Neil S. Novich
<PAGE> 2
Inland Steel Industries, Inc.
30 West Monroe Street
Chicago, Illinois 60603
March 27, 1996
Dear :
Inland Steel Industries, Inc. ("ISI") considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel of ISI and its subsidiaries (collectively, the "Company").
In this connection, the Board of Directors of ISI (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of ISI and its
stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
the possibility of a change in control of the Company, although no such change
is now contemplated. In order to induce you to remain in the employ of the
Company and in consideration of your agreement set forth in Subsection 2(ii)
hereof, ISI agrees that you shall receive the severance benefits set forth in
this letter agreement ("Agreement") in the event your employment with the
Company is terminated subsequent to a "change in control of the Company" (as
defined in Section 2 hereof) under the circumstances described below. This
Agreement shall constitute an amendment and restatement of and shall supersede
the agreement entered into between you and ISI with respect to these matters
dated . In the event that you receive severance benefits hereunder, such
benefits shall be in lieu of, and you shall not be entitled to receive, any
benefits or payments under any other severance plan, policy or agreement of or
with the Company. In addition, if you are or become entitled to benefits from
the Company pursuant to another agreement providing for benefits on account of
a
<PAGE> 3
Page 2
change in control or the law of a jurisdiction other than the United States
or any state or territory thereof as a result of an event for which benefits
are payable to you pursuant this Agreement, the benefits paid to you pursuant
to this Agreement shall be reduced by the amount paid to you pursuant to such
other agreement or law.
1. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through December 31, 1996; provided, however, that
commencing on January 1, 1997 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless,
during the preceding year but not later than June 30 of such preceding year,
ISI shall have given notice that it does not wish to extend this Agreement.
Notwithstanding the preceding sentence: (i) if your employer is a direct or
indirect subsidiary of ISI, this Agreement shall terminate on the date on which
ISI ceases to own, directly or indirectly, at least 80 percent of your employer
for any reason which does not constitute a change in control of the Company;
and (ii) if a change in control of the Company or a potential change in control
of the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of twenty-four
(24) months beyond the month in which such change in control or potential
change in control of the Company occurred unless earlier terminated under
clause (i) next above.
2. Change in Control; Potential Change in Control. (i) No benefits shall
be payable hereunder unless there shall have been a potential change in control
or a change in control of the Company, as set forth below. For purposes of
this Agreement, a "change in control of the Company" shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than (w) the Company, (x) a trustee or other fiduciary holding voting
securities under an employee benefit plan of the Company, (y) an underwriter
temporarily holding voting securities pursuant to an offering of such
securities, or (z) a corporation owned, directly or indirectly, by the
securityholders of ISI in substantially the same proportions as their ownership
of voting securities of ISI, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting
securities of ISI (not including in the voting securities beneficially owned by
such person any voting securities acquired directly from ISI or its affiliates)
representing 40% or more of the combined voting power of ISI's then outstanding
voting securities; (B) during any period of two consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board and any new director
(other than a director designated by a person who has entered into an agreement
with ISI to effect a transaction described in
<PAGE> 4
Page 3
clauses (A), (C) or (D) of this Subsection) whose election by the Board or
nomination for election by ISI's securityholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved ("Continuing Directors"), cease for any
reason to constitute a majority thereof; (C) the holders of voting securities
of ISI approve a merger or consolidation of ISI with any other corporation,
other than a merger or consolidation which would result in the voting
securities of ISI outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity), in combination with the ownership of any trustee or
other fiduciary holding voting securities under an employee benefit plan of the
Company, at least 60% of the combined voting power of the voting securities of
ISI or such surviving entity outstanding immediately after such merger or
consolidation, or a merger or consolidation effected to implement a
recapitalization of ISI (or similar transaction) in which no person acquires
more than 50% of the combined voting power of ISI's then outstanding voting
securities; (D) the holders of voting securities of ISI approve a plan of
complete liquidation of ISI or an agreement for the sale or disposition by ISI
of all or substantially all of ISI's assets; or (E) there occurs (x) a sale or
disposition, directly or indirectly, other than to a person described in
subclause (w), (x) or (z) of clause (A) of this Subsection, of voting
securities of your employer, any direct or indirect parent company of your
employer or any company that is a subsidiary of your employer and is also a
significant subsidiary (as defined below) of ISI (your employer and such a
parent or subsidiary being a "Related Company"), representing 50% or more of
the combined voting power of the securities of such Related Company then
outstanding, (y) a merger or consolidation of a Related Company with any other
corporation, other than a merger or consolidation which would result in 50% or
more of the combined voting power of the surviving company being beneficially
owned by ISI or by a majority owned direct or indirect subsidiary of ISI, or
(z) the sale or disposition of all or substantially all the assets of a Related
Company to a person other than ISI or a majority owned direct or indirect
subsidiary of ISI; provided, however, that no change in control of the Company
shall be deemed to have occurred under this Section 2(i) if (I) such
transaction includes or involves a sale to the public or a distribution to the
stockholders of ISI of more than 50% of the voting securities of your employer
or a direct or indirect parent of your employer, and (II) your employer or a
direct or indirect parent of your employer agrees to become a successor to ISI
under this Agreement or you are covered by an agreement providing for benefits
upon a change in control of your employer following an event described clause
(E). For purposes of this Agreement, the term "significant subsidiary" has the
meaning given to such term under Rule 405 of the Securities Act of 1933, as
amended.
<PAGE> 5
PAGE 4
(ii) For purposes of this Agreement, a "potential change in control of
the Company" shall be deemed to have occurred if (A) ISI enters into an
agreement, the consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including ISI) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a change in control of the Company; (C) any person, other than (w)
the Company, (x) a trustee or other fiduciary holding voting securities under
an employee benefit plan of the Company, (y) an underwriter temporarily holding
voting securities pursuant to an offering of such securities, or (z) a
corporation owned, directly or indirectly, by the securityholders of ISI in
substantially the same proportions as their ownership of voting securities of
ISI, who is or becomes the beneficial owner, directly or indirectly, of voting
securities of ISI representing 9.5% or more of the combined voting power of
ISI's then outstanding voting securities, increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by such person on
the date hereof; or (D) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential change in control of the Company has
occurred.
You agree that, subject to the terms and conditions of this Agreement, in
the event of a potential change in control of the Company, you will remain in
the employ of the Company until the earliest of (i) a date which is six (6)
months from the occurrence of such potential change in control of the Company,
(ii) the termination by you of your employment by reason of Disability or
Retirement, as defined in Subsection 3(i), or (iii) the occurrence of a change
in control of the Company. If your employment is terminated by the Company
without Cause (as defined in Subsection 3(ii) below) within twelve (12) months
after the occurrence of a potential change in control of the Company and a
change in control of the Company occurs within six (6) months after such
termination, you shall be entitled to the compensation and benefits hereunder
as if your termination of employment without Cause followed a change in control
of the Company; provided, however, that no benefits shall be payable under this
sentence if prior to the change in control of the Company, ISI ceased to own,
directly or indirectly, at least 80% of the voting securities of your employer.
(iii) The foregoing to the contrary notwithstanding, a change in control
of the Company shall not be deemed to have occurred with respect to you if (A)
the event first giving rise to the potential change in control of the Company
involves a publicly announced transaction or publicly announced proposed
transaction which at the time of the announcement has not been previously
approved by the Board and (B) you are "part of a purchasing group" proposing
the transaction. A change in control of the Company shall also not be deemed
to have occurred with respect to you if you are part of a purchasing group
which consummates the change in control transaction. You shall be deemed "part
of
<PAGE> 6
PAGE 5
a purchasing group" for purposes of the two preceding sentences if you are
an equity participant or have agreed to become an equity participant in the
purchasing company or group (except for (A) passive ownership of less than 1%
of the stock of the purchasing company or (B) ownership of equity participation
in the purchasing company or group which is otherwise not deemed to be
significant, as determined prior to the change in control of the Company by a
majority of the non-employee Continuing Directors).
3. Termination Following Change in Control. If a change in control of
the Company, as defined in Section 2 hereof, shall have occurred, you shall be
entitled to the benefits provided in Subsection 4(iii) hereof upon the
subsequent termination of your employment during the term of this Agreement
unless such termination is (A) because of your death, Disability or Retirement,
(B) by the Company for Cause, or (C) by you other than for Good Reason.
(i) Disability; Retirement. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is given you shall
not have returned to the full-time performance of your duties, your employment
may be terminated for "Disability". Termination by the Company or you of your
employment based on "Retirement" shall mean termination on or after your normal
retirement age in accordance with the Company's retirement policy generally
applicable to its salaried employees or in accordance with any retirement
arrangement established with your consent with respect to you.
(ii) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice of Termination by
you for Good Reason as defined in Subsections 3(iv) and 3(iii), respectively)
after a written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purposes of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire
<PAGE> 7
PAGE 6
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice to you and an opportunity for you, together
with your counsel, to be heard before the Board), finding that in the good
faith opinion of the Board you were guilty of conduct set forth above in
clauses (A) or (B) of the first sentence of this Subsection and specifying the
particulars thereof in detail.
(iii) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean,
without your express written consent, the occurrence after a change in control
of the Company of any of the following circumstances unless, in the case of
paragraphs (A), (E), (F), (G) or (H), such circumstances are fully corrected
prior to the Date of Termination specified in the Notice of Termination, as
defined in Subsections 3(v) and 3(iv), respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent with your
status as an executive officer of the Company or a substantial adverse
alteration in the nature or status of your responsibilities from those
in effect immediately prior to the change in control of the Company
other than any such alteration primarily attributable to the fact that
the Company may no longer be a public company;
(B) a reduction by the Company in your annual base salary as in
effect on the date hereof or as the same may be increased from time to
time;
(C) the Company's requiring that your principal place of business
be at an office located more than 50 miles from where your principal
place of business is located immediately prior to the change in control
of the Company, except for required travel on the Company's business to
an extent substantially consistent with your business travel obligations
immediately prior to the change in control of the Company;
(D) the failure by the Company, without your consent, to pay to
you any portion of your current compensation, or to pay to you any
portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date
such compensation is due;
(E) the failure by the Company to continue in effect any
compensation plan in which you participate immediately prior to the
change in control of the Company which is material to your total
compensation, including but not limited to the Inland Annual Incentive
Plan (the
<PAGE> 8
PAGE 7
"Annual Incentive Plan"), Inland Special Achievement Award
Plan, Inland 1986 Employee Stock Purchase Plan, Inland 1995 Incentive
Stock Plan, Inland Steel Industries Supplemental Retirement Benefit Plan
for Covered Employees (the "Supplemental Plan"), Inland Steel Industries
Special Retirement Benefit Plan for Covered Employees (the "Special
Benefit Plan"), Inland Steel Industries Nonqualified Thrift Plan (the
"Nonqualified Thrift Plan"), Inland Steel Industries Pension Plan (the
"Pension Plan") and Inland Steel Industries Thrift Plan (the "Thrift
Plan") or any substitute plans adopted prior to the change in control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by the Company to continue your participation therein (or in
such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of your participation relative to other participants, as existed
at the time of the change in control;
(F) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's pension, life insurance, medical, health and accident,
flexible spending or disability plans or programs in which you were
participating at the time of the change in control of the Company, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive you of any material
fringe benefit enjoyed by you at the time of the change in control of
the Company, or the failure by the Company to provide you with the
number of paid vacation days to which you are entitled on the basis of
years of service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the change in control of
the Company;
(G) the failure of ISI to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 5 hereof; or
(H) any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements
of Subsection (iv) below (and, if applicable, the requirements of
Subsection (ii) above); for purposes of this Agreement, no such
purported termination shall be effective.
Your right to terminate your employment pursuant to this Subsection shall not
be affected by your incapacity due to physical or mental illness. Your
continued
<PAGE> 9
PAGE 8
employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder.
(iv) Notice of Termination. Any purported termination of your employment
by the Company or by you shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A) if
your employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), and
(B) if your employment is terminated pursuant to Subsection (ii) or (iii) above
or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Subsection (ii) above shall not be less than thirty (30) days, and in the case
of a termination pursuant to Subsection (iii) above shall not be less than
fifteen (15) nor more than sixty (60) days, respectively, from the date such
Notice of Termination is given); provided that if within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this proviso), the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected) but shall be deemed to be within the twenty four (24) month
period following a change in control of the Company; provided further that the
Date of Termination shall be extended by a notice of dispute only if such
notice is given in good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay you your full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue you as a participant
in all compensation, benefit and insurance plans and programs in which you were
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due
<PAGE> 10
PAGE 9
under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
4. Compensation Upon Termination or During Disability. Following a
change in control of the Company, as defined by Subsection 2(i), upon
termination of your employment or during a period of Disability you shall be
entitled to the following benefits:
(i) During any period that you fail to perform your full-time duties with
the Company as a result of incapacity due to physical or mental illness, you
shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all compensation payable to you
under the Pension Plan, Supplemental Plan, Special Benefit Plan, Annual
Incentive Plan, Thrift Plan and Nonqualified Thrift Plan during such period,
until this Agreement is terminated pursuant to Section 3(i) hereof.
Thereafter, in the event your employment shall be terminated, your benefits
shall be determined under the Company's retirement, insurance and other
compensation plans and programs then in effect in accordance with the terms of
such plans and programs.
(ii) If your employment shall be terminated by the Company for Cause or
by you other than for Good Reason, Disability, death or Retirement, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, plus all other amounts to
which you are entitled under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations to you
under this Agreement.
(iii) If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability or (b) by you for Good
Reason, then you shall be entitled to the compensation and benefits provided
below:
(A) the Company shall pay you your full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which you are entitled
under any compensation plan or program of the Company, at the time such
payments are due, except as otherwise provided below.
(B) in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to you a lump sum severance payment (together with the
payments provided in paragraphs C, D and E below, the "Severance
<PAGE> 11
PAGE 10
Payments") equal to two times the sum of (x) your annual base salary in
effect immediately prior to the occurrence of the circumstance giving
rise to the Notice of Termination given in respect thereof, and (y) the
average annual amount of the Award paid to you pursuant to the Annual
Incentive Plan or similar successor plan with respect to the five years
immediately preceding that in which the Date of Termination occurs, such
average annual amount being calculated by aggregating all such Awards
paid with respect to such five years and dividing such aggregate amount
by the number of years for which such an Award was actually paid to you.
(C) notwithstanding any provision of the Annual Incentive Plan and
the Inland Special Achievement Award Plan, the Company shall pay to you
a lump sum amount equal to the sum of (x) any incentive compensation
which has been allocated or awarded to you for a completed fiscal year
or other measuring period preceding the Date of Termination but has not
yet been paid, and (y) a pro rata portion to the Date of Termination for
the current fiscal year or other measuring period of the amount equal to
the Target Award percentage applicable to you under the Annual Incentive
Plan or similar successor plan on the Date of Termination times your
annual base salary then in effect.
(D) in lieu of shares of common stock of ISI ("ISI Shares")
issuable upon exercise of outstanding options ("Options"), if any,
granted to you under ISI's stock option plans (which Options shall be
cancelled upon the making of the payment referred to below), you shall
receive an amount in cash equal to the product of (i) the excess of (x)
in the case of incentive stock options (as defined in section 422A of
the Internal Revenue Code of 1986, as amended (the "Code")) ("ISOs")),
granted after the date hereof, the closing price of ISI's shares as
reported on the New York Stock Exchange Composite Transactions on or
nearest the Date of Termination, or, in the case of all other options,
the Change in Control Price (as defined below), over (y) the per share
exercise price of each Option held by you (whether or not then fully
exercisable), times (ii) the number of ISI Shares covered by each such
option. For purposes of this Agreement, the "Change in Control Price"
means: (1) with respect to a merger or consolidation of ISI described
in Section 2(i)(C) in which the consideration per share of ISI's common
stock to be paid for the acquisition of shares of common stock specified
in the agreement of merger or consolidation is all in cash, the highest
such consideration per share; (2) with respect to a change in control of
the Company by reason of an acquisition of voting securities described
in Section 2(i)(A), the highest price per share for any share of ISI's
common stock paid by any holder of any of the securities representing
40% or more of the combined
<PAGE> 12
PAGE 11
voting power of ISI giving rise to the change in control of the Company;
and (3) with respect to a change in control of the Company by reason of
a merger or consolidation of ISI (other than a merger or consolidation
described in Clause (1) next above), stockholder approval of an
agreement or plan described in Section 2(i)(D), a change in the
composition of the Board described in Section 2(i)(B) or a change in
control of the Company pursuant to Section 2(i)(E) (relating to mergers,
consolidations and sales of securities or assets of a Related Company),
the highest price per share of common stock reported on the New York
Stock Exchange Composite Transactions (or, if such shares are not traded
on the New York Stock Exchange, such other principal market on which
such shares are traded) during the sixty (60) day period ending on the
date the change in control of the Company occurs.
(E) in lieu of ISI Shares awarded or issuable to you as
performance and/or restricted shares, if any, pursuant to the Inland
1995 Incentive Stock Plan, the Inland 1992 Incentive Stock Plan, the
Inland 1988 Incentive Stock Plan, the Inland 1984 Incentive Stock Plan
or similar successor plan (which ISI Shares shall be cancelled upon the
making of the payment referred to below), you shall receive an amount in
cash equal to the product of (i) the Change in Control Price, times (ii)
the total of the number of restricted shares awarded to you and then
outstanding pursuant to the Inland 1995 Incentive Stock Plan, the Inland
1992 Incentive Stock Plan, the Inland 1988 Incentive Stock Plan, the
Inland 1984 Incentive Stock Plan and/or any similar successor plan, plus
a number of performance shares equal to the total number of performance
shares paid or payable to you with respect to the two immediately
preceding performance periods under any performance award or awards made
pursuant to the Inland 1995 Incentive Stock Plan, the Inland 1992
Incentive Stock Plan and/or any similar successor plan.
(F) the Company shall also pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such fees
and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of Section 4999
of the Code to any payment or benefit provided hereunder). Such
payments shall be made at the later of the times specified in paragraph
(J) below, or within five (5) days after your request for payment
accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
<PAGE> 13
PAGE 12
(G) in the event that you become entitled to any payments provided
for hereinabove (the "Contract Payments"), if the Contract Payments or
other portion of the Total Payments (as defined below) will be subject
to the tax (the "Excise Tax") imposed by Section 4999 of the Code, the
Company shall pay to you, no later than the fifth day following the Date
of Termination, an additional amount (the "Gross-Up Payment") such that
the net amount retained by you, after deduction of any Excise Tax on the
Contract Payments and such other Total Payments and any federal and
state and local income and other payroll taxes and Excise Tax upon the
payment provided for by this subsection, shall be equal to the Contract
Payments and such other Total Payments.
(H) for purposes of determining whether any of the payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) any
other payments or benefits received or to be received by you in
connection with a change in control of the Company or your termination
of employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose
actions result in a change in control or any person affiliated with the
Company or such person) payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with the Company, any person
whose actions result in a change in control or any person affiliated
with the Company or such person (together with the Contract Payments,
the "Total Payments"), shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code and all "excess parachute
payments" within the meaning of Section 280G(b)(l) of the Code shall be
treated as subject to the Excise Tax unless in the opinion of tax
counsel selected by ISI's independent auditors and reasonably acceptable
to you, such other payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of Section
280G(b)(4)(A) of the Code or such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4)(B) of the Code in
excess of the base amount allocable to such reasonable compensation
within the meaning of Section 280G(b)(3) of the Code, or are otherwise
not subject to the Excise Tax, (ii) the amount of the Total Payments
which shall be treated as subject to the Excise Tax shall be equal to
the lesser of (A) the amount of the Total Payments or (B) the amount of
excess parachute payments within the meaning of Section 280G(b)(l) of
the Code (after applying clause (i) above), and (iii) the value of any
noncash benefits or any deferred payment or benefit shall be determined
by ISI's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of determining
the
<PAGE> 14
PAGE 13
amount of the Gross-Up Payment, you shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be made and state
and local income taxes at the highest marginal rate of taxation in the
state and locality of your residence on the Date of Termination, net of
the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.
(I) in the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder at the time of
termination of your employment, you shall repay to the Company at the
time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal and state and local income tax imposed on the
Gross-Up Payment being repaid by you if such repayment results in a
reduction in Excise Tax and/or a federal and state and local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of your employment (including
by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make
an additional gross-up payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.
(J) the payments provided for in paragraphs (B), (C), (D) and (E)
above, shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such payments
cannot be finally determined on or before such day, the Company shall
pay to you on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the
Date of Termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to you payable on the
fifth day after demand by the Company (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code).
<PAGE> 15
PAGE 14
(iv) If your employment shall be terminated (A) by the Company other than
for Cause, Retirement or Disability or (B) by you for Good Reason, then for a
twenty-four (24) month period after such termination, the Company shall arrange
to provide you with: (1) life, disability, accident and health insurance
benefits substantially similar to those which you are receiving immediately
prior to the Notice of Termination, (2) financial advisory services similar to
those provided currently to executives of the Company by Ayco Corporation, and
(3) outplacement services. Benefits otherwise receivable by you pursuant to
this Subsection 4(iv) shall be reduced to the extent comparable benefits are
actually received by you during the twenty-four (24) month period following
your termination, and any such benefits actually received by you shall be
reported to the Company. Any rights that you have to continuation of life,
disability, accident or health coverage under applicable state or federal law
shall be in addition to those provided under this Agreement.
(v) If your employment shall be terminated (A) by the Company other than
for Cause, Retirement or Disability or (B) by you for Good Reason, then in
addition to the retirement benefits to which you are entitled under the Pension
Plan, Supplemental Plan or Special Benefit Plan or any successor plans thereto,
the Company shall pay you in cash at the time and in the manner provided in
paragraph (J) of Subsection 4(iii), a lump sum equal to the excess of (x) the
actuarial equivalent of the retirement pension (taking into account any early
retirement subsidy associated therewith and determined as a straight life
annuity commencing at age sixty-five (65) or any earlier date, but in no event
earlier than the second anniversary of the Date of Termination whichever
annuity yields a greater benefit) which you would have accrued under the terms
of the Pension Plan, Supplemental Plan or Special Benefit Plan (without regard
to any amendments to any such plans made subsequent to a change in control of
the Company and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of retirement benefits
thereunder), determined as if you were fully vested thereunder and had
accumulated (after the Date of Termination) twenty-four (24) additional months
of age and service credit thereunder at the higher of the rate of average
compensation during the twelve (12) months prior to the change in control of
the Company or the rate of average compensation used to calculate your benefits
under such plans immediately preceding the Date of Termination, over (y) the
actuarial equivalent of the retirement pension (taking into account any early
retirement subsidy associated therewith and determined as a straight life
annuity commencing at age sixty-five (65) or any earlier date, but in no event
earlier than the Date of Termination whichever annuity yields a greater
benefit) which you had then accrued pursuant to the provisions of the Pension
Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same assumptions utilized under the Pension Plan for
purposes of determining
<PAGE> 16
PAGE 15
alternative forms of benefits immediately prior to the change in control of
the Company.
(vi) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by you to the Company, or otherwise, except as provided in Section
4(iv).
(vii) In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all benefits payable to you under the
Pension Plan, the Thrift Plan, Supplemental Plan, Special Benefit Plan,
Nonqualified Thrift Plan and any other plan or agreement relating to retirement
benefits.
5. Successors; Binding Agreement. (i) ISI will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of ISI to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that ISI or the Company would be required to perform it if no such
succession had taken place. Failure of ISI to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled to hereunder if you
terminate your employment for Good Reason following a change in control of the
Company, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. In the event a successor of ISI assumes and agrees to perform
this Agreement, by operation of law or otherwise, the term "ISI", as used in
this Agreement, shall mean such successor and the term "Company" shall mean,
collectively, such successor and the affiliates of such successor.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
<PAGE> 17
PAGE 16
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of ISI, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Illinois. All references to sections of
the Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of ISI and the Company under Section 4 shall survive the
expiration of the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Settlement of Disputes; Arbitration. All claims by you for benefits
under this Agreement shall be directed to and determined by the Board and shall
be in writing. Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to you in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to you for a review of
the decision denying a claim and shall further allow you to appeal to the Board
a decision of the Board within sixty (60) days after notification by the Board
that your claim has been denied. Any further dispute or controversy arising
under
<PAGE> 18
Page 17
or in connection with this Agreement shall be settled exclusively by
arbitration in Chicago, Illinois, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to ISI the enclosed copy of this letter which will then
constitute our agreement on this subject.
Sincerely,
INLAND STEEL INDUSTRIES, INC.
By ________________________________
Judd R. Cool
Vice President-Human Resources
Agreed to this ________ day
of ______________________, 1996.
_________________________ (Signature)
<PAGE> 1
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
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 48.8 44.6
Dilutive effect of stock options - .1
------------ ------------
48.8 44.7
============ ============
Net income $ 17.2 $ 44.0
Dividends on preferred stock, net of tax benefit on dividends
applicable to leveraged Series E Preferred Stock held by the ESOP 2.2 6.5
------------ ------------
Net income applicable $ 15.0 $ 37.5
============ ============
Primary earnings per share of common stock $.31 $.84
==== ====
FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK
Shares of common stock
Average shares outstanding 48.8 44.6
Assumed conversion of Series A and leveraged Series E Preferred Stock 3.0 3.1
Dilutive effect of stock options - .1
------------ ------------
51.8 47.8
============ ============
Net income $ 17.2 $ 44.0
Dividends on antidilutive preferred stock .1 4.5
Additional ESOP funding required on conversion of leveraged
Series E Preferred Stock, net of tax 1.9 1.8
------------ ------------
Net income applicable $ 15.2 $ 37.7
============ ============
Fully diluted earnings per share of common stock $.29 $.79
==== ====
</TABLE>
NOTE: In the three months ended March 31, 1996, the assumed conversion of
Series A and non-leveraged Series E Preferred Stock were antidilutive. In
the three months ended March 31, 1995, the assumed conversion of
non-leveraged Series E Preferred Stock was antidilutive.
<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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 246,900
<SECURITIES> 0
<RECEIVABLES> 529,500
<ALLOWANCES> 23,100
<INVENTORY> 492,200
<CURRENT-ASSETS> 1,290,800
<PP&E> 4,394,300
<DEPRECIATION> 2,799,300
<TOTAL-ASSETS> 3,572,800
<CURRENT-LIABILITIES> 643,000
<BONDS> 778,300
0
3,200
<COMMON> 50,600
<OTHER-SE> 712,000
<TOTAL-LIABILITY-AND-EQUITY> 3,572,800
<SALES> 1,180,400
<TOTAL-REVENUES> 1,180,900
<CGS> 1,078,500
<TOTAL-COSTS> 1,078,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,900
<INCOME-PRETAX> 28,000
<INCOME-TAX> 10,800
<INCOME-CONTINUING> 17,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,200
<EPS-PRIMARY> .31
<EPS-DILUTED> .29
</TABLE>
