<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
INLAND STEEL INDUSTRIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
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Notes:
<PAGE>
Value Creation
Through
Operational Excellence
April 1997
<PAGE>
Inland Steel Industries
Strategic Focus
. Improve operational performance
at Inland Steel Company
. Profitably grow Ryerson-Tull
<PAGE>
Financial Benefits of Recapitalization
. Reduce interest costs
ISI Retire debt
| 87% . Increase financial
------------------ Ownership flexibility
| |
ISC RT . Rebalance ISI, ISC & RT
| | capital structures
Retire debt New debt . Provide RT with new
13% Public source of capital
Ownership
<PAGE>
Strategic Benefits of Recapitalization
. Completes accelerated deleveraging program begun in 1993
X $700 million reduction in fixed obligations
X Annual savings of $70 million from lower fixed charges
. Facilitates growth of Ryerson Tull
X Two acquisitions since public offering
<PAGE>
Strategic Benefits of Recapitalization
. IAD's 87% economic interest in RT preserves tax consolidation (along with
voting power over 80%)
X over $800 million in NOLs plus AMT credit carryforwards
. Maintenance of IAD's voting power over 80% preserves tax-free spin-off
option. An economic interest of 50% for IAD maintains 80% voting power due
to each IAD share having 4 votes.
<PAGE>
Our Board of Directors
unanimously recommends a vote
"AGAINST"
the Greenway Proposal
. Current structure provides financial flexibility
. Significant tax savings
. Overall valuation could suffer
. Operating performance drives long-term stockholder value
<PAGE>
A spin-off is NOT in
IAD's stockholders'
best interests
AT THIS TIME!
<PAGE>
Inland Steel Industries
Financial Review
<PAGE>
INLAND STEEL INDUSTRIES
SALES
[BAR GRAPH APPEARS HERE]
Dollars in Millions
1996 1997
------------------------------------ ----
Q1 Q2 Q3 Q4 Q1
$1,181 $1,163 $1,118 $1,122 $1,207
<PAGE>
INLAND STEEL INDUSTRIES
NET INCOME
[BAR GRAPH APPEARS HERE]
Dollars in Millions
1996 1997
------------------------------------ ----
Q1 Q2 Q3 Q4 Q1
$17.2 $19.2* $8.5* $0.8* $31.2
*Quarters include extraordinary and non-recurring items.
<PAGE>
INLAND STEEL INDUSTRIES
EARNINGS* BEFORE INTEREST, TAXES,
DEPRECIATION & AMORTIZATION
[BAR GRAPH APPEARS HERE]
Dollars in Millions
1996 1997
------------------------------------ ----
Q1 Q2 Q3 Q4 Q1
$85 $111 $88 $57 $111
*Before minority interest and extraordinary items.
<PAGE>
Inland Steel Industries
Operating Profit
[BAR GRAPH APPEARS HERE]
Dollars in Millions
<TABLE>
<CAPTION>
1996 1997
------------------------------ -----
<S> <C> <C> <C> <C>
Q1 Q2 Q3 Q4 Q1
$49.2 $43.2 $50.8 $48.8* $72.8
</TABLE>
- --------
*Adjusted to exclude $26.3 million provision for workforce reduction.
<PAGE>
Inland Steel and Ryerson Tull
Operating Profit
[BAR GRAPH APPEARS HERE]
Dollars in Millions
<TABLE>
<CAPTION>
Inland Steel Ryerson Tull
<S> <C> <C>
1996
Q1 $12.6 $36.6
Q2 $11.3 $32.7
Q3 $24.9 $26.3
Q4 $(0.8)* $24.5
1997
Q1 $38.3 $35.0
</TABLE>
- --------
*Reflects $26.3 million provision for workforce reduction.
<PAGE>
Inland Steel and Ryerson Tull
Operating Profit to Operating Assets
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Inland Steel Ryerson Tull
<S> <C> <C>
1996
Q1 2.6% 17.7%
Q2 2.3% 15.6%
Q3 5.1% 12.5%
Q4 5.2% 11.7%
1997
Q1 7.7% 15.9%
</TABLE>
<PAGE>
Inland Steel Industries
Balance Sheet (Dollars in Millions)
<TABLE>
<CAPTION>
3/31/97 3/31/96 % Change
------- ------- --------
<S> <C> <C> <C>
Net Liquidity $ 81.7 $246.9 -66.9%
Long-Term Debt
(Including Debt Due
Within 1 Year) $786.6 $885.6 -11.2%
Stockholders Equity $819.6 $765.8 +7.0%
Long-Term Debt/
Total Capitalization 46.6% 52.6%
Weighted Average
Interest Rate on Debt 8.4% 9.7%
</TABLE>
<PAGE>
Inland Steel Industries
Debt to Total Capitalization -- Year End
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996
[ ] Long Term Debt 0.63 0.55 0.49 0.5 0.47
[ ] Redeemable Preferred 0.14 0.14 0.13
</TABLE>
On and off balance sheet obligations reduced by $700 million resulting in lower
annual fixed charges by more than $70 million. Full effect to be seen in 1997.
<PAGE>
Looking Ahead
Primary Strategies
- -------------------------------------------------------------------------------
Inland Steel "Operational
Company Excellence"
- -------------------------------------------------------------------------------
Ryerson "Profitable
Tull Growth"
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<PAGE>
Inland Steel Company
Focus on Operational Excellence
. New management team
. Redefinition of primary strategy
<PAGE>
Fundamentals of Operational Excellence
. CUSTOMER PERFORMANCE: Consistent quality and delivery by matching
manufacturing capabilities with products
. COST: Best total cost for products offered
. CAPABILITIES: Constant improvement in quality throughput
. CONTROL: Processes are in a state of control, driven by effective data systems
<PAGE>
Safety for Inland Steel Co.
Total-Injury Rate:
Since 1994, our rate has improved by 25%
Lost-Workday-Case Rate:
Since 1994 our rate has improved by 31%
Lost-Workday (Severity) Rate:
Since 1994 our rate has improved by 52%
<PAGE>
Customer
Performance
Costs
Opportunities
Manufacturing Prime Yield
Capability
<PAGE>
Inland Steel Company
Customer Performance -- Revenue Enhancement
. Revenues/ton back above $480
. Market share at strategic OEMs is back
. 300,000 ton product mix shift successfully completed in 1996
Plates Cold Rolled & Coated Products
. More revenue benefits to follow from improved prime yields and enhanced
finished product capabilities
<PAGE>
Inland Steel Company
OFS
. State-of-the-art information system
. Completed on-schedule and under budget
X 3 year installation
X $36.8 million capital investment
. "Real-time" access to data vs. "Batch"
<PAGE>
Impact of Higher Prime Yield
Delivery - - arrow pointing upward
Performance
Manufacturing - - arrow pointing downward
Cost
Price - - arrow pointing upward
Realizations
<PAGE>
Yield: The Historical Perspective
Raw Steel to Prime Yield
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1Q96 2Q96 3Q96 4Q96 1Q97
77.2% 78.6% 78.7% 78.7% 78.0% 80.8% 80.9% 82.6%
</TABLE>
<PAGE>
Operating Cost
Reduce operating cost by
$10 per ton each year for
the next three years
<PAGE>
ISC Cost Imperatives
. Reduce raw material and energy costs
. Eliminate purchased steel
. Reduce other purchased-material costs
. Reduce repair-and-maintenance costs
<PAGE>
ISC Cost Imperatives
. Reduce outside storage and processing costs
. Improve yield
. Reduce workforce
<PAGE>
INLAND STEEL COMPANY
Workforce Trends vs. Shipments
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Employees 14,711 13,730 12,590 11,943 11,539 10,764 10,211
Shipments (Tons in 000s) 4,171 4,251 4,835 5,170 5,117 5,096 5,040*
</TABLE>
*Annualized
<PAGE>
Manufacturing Capabilities
Purchased Semi-Finished Steel Shipments
(Tons in 000s) (Tons in 000s)
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Purchased 353 753 492 149
Semi-Finished
Shipments 4,171 4,251 4,835 5,170 5,117 5,096
</TABLE>
<PAGE>
Customer
Performance
Costs
Prime Yield
Manufacturing
Capability
<PAGE>
Ryerson Tull, Inc.
Focus on Profitable Growth
. Leverage competitive market position
. Grow internally with profitable customer groups and externally through
acquisitions
. Satisfy and retain customers better than competition
. Exploit customer and vendor system economics
. Exercise disciplined cost management
<PAGE>
Ryerson Tull, Inc.
Service Center Industry - Undergoing Tremendous Change
Historic Future Direction
-------- ----------------
Fragmented -- Rapid consolidation
Low barriers to entry -- Size has value:
buying power; critical mass
-- Sophisticated information
technology impacts distributor
and customer costs
In-house fabrication -- Outsourcing
Commodity-based
purchasing -- Value-added services
Multiple local
relationships -- Vendor consolidation/national
relationships
<PAGE>
Ryerson Tull, Inc.
External Growth - Acquisitions
. Highly fragmented industry
X 750 - 1,000 participants in U.S. and Canada
X Most have few locations and limited product
lines
X Approximately one-half of companies have
sales under $10 million
. Consolidation underway
<PAGE>
Ryerson Tull, Inc.
Acquisition Strategy/Criteria
. Well run or "fixable"
. Strategic fit
. Opportunities for expense/asset
consolidation
. Financial evaluation on the basis of cash flow
. Additive to earnings
<PAGE>
Ryerson Tull, Inc.
Internal Growth Results
[BAR GRAPH APPEARS HERE]
Market Share
7.9% 8.2% 8.3% 8.4% 8.4% 9.1%
1991 1992 1993 1994 1995 1996
<PAGE>
Ryerson Tull, Inc.
Results . . . Operating Profit/Operating Assets
[BAR GRAPH APPEARS HERE]
2.0% 3.5% 7.3% 12.1% 17.6% 14.3% 15.9%
1991 1992 1993 1994 1995 1996 1Q97
<PAGE>
Ryerson Tull, Inc.
Self-Reinforcing Growth - Economies of Scale
------ Grow Faster -----
Than The
Competition
Gain Market Costs Decline
Share Faster Than
Profitably The
Competition
Ability to Acquire And
Retain Customers More
----- Profitably and Aggressively -----
Than Competitors
<PAGE>
Inland International
. IMF Trading Company
-------------------
X Hong Kong joint venture owned on a 50/50 basis with an
affiliate of MacSteel of South Africa.
. Shanghai Ryerson Processing and Distribution Company
----------------------------------------------------
X Shanghai joint venture owned 51% by Baoshan Iron and
Steel Corporation and 49% by Inland.
. TATA-Ryerson Processing and Distribution Company
------------------------------------------------
X 50/50 joint venture in India with TATA Iron and Steel
Company (TISCO). Initial sites are Jamshedpur and Pune.
<PAGE>
Inland Steel Industries
1997 Outlook
. Good demand for products and services in both businesses.
. ISC implementing Operational Excellence with a sense of urgency.
. RT profitably growing from existing assets and through acquisitions.
. More optimistic today than a year ago.
