<PAGE>
1998
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from ______________ to _____________
Commission File No. 33-32504 and 33-1329
RYERSON TULL SAVINGS PLAN
(f/k/a Inland Steel Industries Thrift Plan)
(Full Title of the Plan)
RYERSON TULL, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
36-3425828
(I.R.S. Employer Identification No.)
2621 W. 15th Place, Chicago, Illinois
(Address of principal executive offices)
60608
(Zip Code)
Registrant's telephone number, including area code: (773) 762-2121
================================================================================
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
----------------------
DECEMBER 31, 1998 and 1997
--------------------------
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of independent accountants 1
Financial statements:
Statements of net assets available
for plan benefits at December 31,
1998 and 1997 2-3
Statement of changes in net assets
available for plan benefits for the
year ended December 31, 1998 4-5
Statement of changes in net assets
available for plan benefits for the
year ended December 31, 1997 6
Notes to financial statements 7-18
Supplemental schedules:
Assets held for investment at
December 31, 1998 Schedule I
Aggregate transactions involving an amount
in excess of 5% of the current value of
plan assets for the year ended
December 31, 1998 Schedule II
</TABLE>
All other schedules of additional financial information required by Section
2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not applicable.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
June 18, 1999
To the Board of Directors of
Ryerson Tull, Inc.
(formerly, Inland Steel Industries, Inc.)
and the Participants in the
Ryerson Tull Savings Plan
(formerly, the Inland Steel Industries
Thrift Plan)
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the net assets available for plan
benefits of the Inland Steel Industries Thrift Plan (the "Plan") at December 31,
1998 and 1997, and the changes in net assets available for plan benefits for the
year ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The Fund
Information in the Statement of Net Assets Available for Plan Benefits and the
Statement of Changes in Net Assets Available for Plan Benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. These supplemental schedules and fund information are the responsibility
of the Plan's management. Schedules I and II and the Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN
BENEFITS WITH FUND INFORMATION AT DECEMBER 31, 1998 AND 1997
------------------------------------------------------------
<TABLE>
<CAPTION>
Assets 1998 1997
- ------ ---- ----
<S> <C> <C>
Investments:
Inland Steel Industries Common Stock Fund:
Inland Steel Industries common stock
(84,596 shares and 845,725 shares at
December 31, 1998 and 1997, respectively) $ 1,427,980 $ 14,483,041
Cash 35,419 1,009,127
------------ ------------
1,463,399 15,492,168
------------ ------------
Inland Steel Industries Series E ESOP Preferred Stock Fund:
Shares allocated to participants
(zero shares and 1,603,623 shares
at December 31, 1998 and 1997, respectively) - 77,926,456
Unallocated shares (zero shares
and 1,410,925 shares at December 31,
1998 and 1997, respectively) - 68,562,489
------------ ------------
- 146,488,945
------------ ------------
Fidelity Stable Value Fixed Income Fund:
Unallocated investment contracts 43,269,011 233,070,344
Pooled investment funds 12,596,295 12,022,949
------------ ------------
55,865,306 245,093,293
------------ ------------
Mutual Benefit Fund (Note 4) 2,930,962 14,597,149
Fidelity Spartan U.S. Equity Index Portfolio 32,909,731 99,943,886
Fidelity Retirement Government Money Market Portfolio 26,743,660 6,595,304
Fidelity Asset Manager 19,320,522 70,203,218
Fidelity Magellan Fund 28,585,937 72,712,619
Fidelity Equity Income 274,449 -
Fidelity Diversified International 399,389 -
Warburg Pincus Emerging Growth Fund 4,052,777 10,959,469
Warburg Pincus International Equity Fund 1,946,004 5,225,209
Franklin Small Cap Growth 316,520 -
MAS Mid Cap Value 298,091 -
Vanguard Growth Index 2,201,428 -
Conservative Strategy 202,176 -
Moderate Strategy 573,771 -
Aggressive Strategy 1,151,721 -
------------ ------------
Total investments 179,235,843 687,311,260
------------ ------------
Loans receivable from participants (Note 1) 3,727,567 12,638,585
Employer contributions receivable 150,865 241,609
Cash held by ESOP Trust - 5,577,771
------------ ------------
Total assets 183,114,275 705,769,225
------------ ------------
</TABLE>
-2-
<PAGE>
Liabilities
-----------
<TABLE>
<CAPTION>
<S> <C> <C>
Notes payable of ESOP Trust (Note 6) - 96,512,751
Interest payable - 4,183,415
Accrued administrative expenses - 15,745
------------ ------------
Total liabilities - 100,711,911
------------ ------------
Net assets available for plan benefits $183,114,275 $605,057,314
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1998
----------------------------------------------------------
<TABLE>
<CAPTION>
Fidelity Fidelity Warburg
Fidelity Retirement Spartan Pincus
Mutual Stable Value Government Fidelity U.S. Equity Fidelity Emerging
Benefit Fixed Income Money Market Asset Index Magellan Growth
Fund Fund Portfolio Manager Portfolio Fund Fund
---- ---- --------- ------- --------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Sources of net assets:
Employee contributions - $ 1,866,569 $ 105,570 $ 993,977 $ 1,408,465 $ 1,147,261 $ 346,214
Employer contributions - (49,975) - - - - -
Unallocated funds - - 1,579,263 - - - -
Interfund transfers - 5,860,952 4,475,411 (1,064,354) (99,337) (567,669) (341,393)
RT Savings Plan transfer
at 1/1/98 (Note 3) ($1,280,875) (27,293,895) (1,178,699) (13,548,738) (17,648,746) (14,876,601) (2,336,155)
RT Savings Plan transfer
at 12/31/98 (Note 3) 1,411,874 31,817,257 20,384,163 14,877,469 24,383,986 21,635,096 2,974,740
Loans repaid - principal - 996,959 35,939 359,977 488,580 459,012 80,173
interest - 156,118 6,285 56,854 76,328 69,964 15,116
Investment income:
Interest and dividend
income 774,996 8,627,090 231,044 1,610,555 1,460,628 1,829,556 -
Realized gain (loss) - - - 4,959,454 17,159,613 12,313,068 848,624
Unrealized gain (loss) - - - 2,080 (663) (195) 196
----------- ------------- ----------- ------------ ------------ ------------ -----------
Total investment income 774,996 8,627,090 231,044 6,572,089 18,619,578 14,142,429 848,820
----------- ------------- ----------- ------------ ------------ ------------ -----------
Total sources of net assets 905,995 21,981,075 25,638,976 8,247,274 27,228,854 22,009,492 1,587,515
----------- ------------- ----------- ------------ ------------ ------------ -----------
Applications of net assets:
Termination of ESOP - - - - - - -
Withdrawals 543,823 13,445,400 412,154 2,802,712 3,749,266 3,411,413 257,966
ISC transfer at 7/16/98
(Note 3) 12,028,359 196,837,791 4,992,985 55,990,162 90,019,089 62,255,404 8,181,912
Interest expense - notes
payable - - - - - - -
Management fees - 24,812 48,441 2,700 2,240 718 41
Loans issued - 901,059 37,040 334,396 492,414 468,639 54,288
----------- ------------- ----------- ------------ ------------ ------------ -----------
Total applications of net
assets 12,572,182 211,209,062 5,490,620 59,129,970 94,263,009 66,136,174 8,494,207
----------- ------------- ----------- ------------ ------------ ------------ -----------
Increase (decrease) in net
assets ($11,666,187) ($189,227,987) $20,148,356 ($50,882,696) ($67,034,155) ($44,126,682) ($6,906,692)
=========== ============= =========== ============ ============ ============ ===========
<CAPTION>
Inland Steel
Warburg Inland Steel Industries
Pincus Industries Series E ESOP
International Common Preferred
Equity Stock Stock Loan Total
Fund Fund Fund Fund Page 1
---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
Sources of net assets:
Employee contributions $ 209,255 $ 63,220 - - $ 6,140,531
Employer contributions - 242,077 $99,054,413 - 99,246,515
Unallocated funds - - - - 1,579,263
Interfund transfers (207,652) (3,737,471) (4,318,487) - -
RT Savings Plan transfer
at 1/1/98 (Note 3) (1,219,257) (2,466,407) (21,467,477) ($3,577,468) (106,894,318)
RT Savings Plan transfer
at 12/31/98 (Note 3) 1,333,986 1,141,929 - 3,545,875 123,506,375
Loans repaid - principal 37,986 52,149 - (2,510,775) -
interest 7,443 6,679 - - 394,787
Investment income:
Interest and dividend
income - - 4,390,533 - 18,924,402
Realized gain (loss) 645,479 7,122,000 - - 43,048,238
Unrealized gain (loss) 211 (3,408) - - (1,779)
----------- ------------ ----------- ---------- -------------
Total investment income 645,690 7,118,592 4,390,533 - 61,970,861
----------- ------------ ----------- ---------- -------------
Total sources of net assets 807,451 2,420,768 77,658,982 (2,542,368) 185,944,014
----------- ------------ ----------- ---------- -------------
Applications of net assets:
Termination of ESOP - - 64,102,531 - 64,102,531
Withdrawals 145,221 705,150 2,026,357 330,113 27,829,575
ISC transfer at 7/16/98
(Note 3) 3,920,201 15,694,205 56,264,216 8,397,763 514,582,087
Interest expense - notes
payable - - 6,624,397 - 6,624,397
Management fees 26 - 237,895 - 316,873
Loans issued 21,208 50,182 - (2,359,226) -
----------- ------------ ----------- ---------- -------------
Total applications of net
assets 4,086,656 16,449,537 129,255,396 6,368,650 613,455,463
----------- ------------ ----------- ---------- -------------
Increase (decrease) in net
assets ($3,279,205) ($14,028,769) ($51,596,414) ($8,911,018) ($427,511,449)
=========== ============ =========== ========== =============
Net assets available
For plan benefits:
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1998
----------------------------------------------------------
<TABLE>
<CAPTION>
Franklin MAS
Small Mid Vanguard Fidelity Fidelity
Cap Cap Growth Conservative Moderate Aggressive Equity Diversified Total
Growth Value Index Strategy Strategy Strategy Income International Page 2
------ ----- ----- -------- -------- -------- ------ ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sources of net assets:
Employee contributions - - - - - - - - -
Employer contributions - - - - - - - - -
Unallocated funds - - - - - - - - -
Interfund transfers - - - - - - - - -
RT Savings Plan transfer
at 1/1/98 (Note 3) - - - - - - - - -
RT Savings Plan transfer
at 12/31/98 (Note 3) $316,520 $298,091 $2,201,428 $202,176 $573,771 $1,151,721 $274,449 $399,389 $5,417,545
Loans repaid - principal - - - - - - - - -
interest - - - - - - - - -
Investment income:
Interest and dividend
income - - - - - - - - -
Realized gain (loss) - - - - - - - - -
Unrealized gain (loss) - - - - - - - - -
-------- -------- ---------- ------------ -------- ---------- -------- ------------- ----------
Total investment income - - - - - - - - -
-------- -------- ---------- ------------ -------- ---------- -------- ------------- ----------
Total sources of net assets 316,520 298,091 2,201,428 202,176 573,771 1,151,721 274,449 399,389 5,417,545
-------- -------- ---------- ------------ -------- ---------- -------- ------------- ----------
Applications of net assets:
Termination of ESOP - - - - - - - - -
Withdrawals - - - - - - - - -
ISC transfer at 7/16/98
(Note 3) - - - - - - - - -
Interest expense - notes
payable - - - - - - - - -
Management fees - - - - - - - - -
Loans issued - - - - - - - - -
-------- -------- ---------- ------------ -------- ---------- -------- ------------- ----------
Total applications of net
assets - - - - - - - - -
-------- -------- ---------- ------------ -------- ---------- -------- ------------- ----------
Increase (decrease) in net
assets $316,520 $298,091 $2,201,428 $ 202,176 $573,771 $1,151,721 $274,449 $ 399,389 $5,417,545
======== ======== ========== ============ ======== ========== ======== ============= ==========
Net assets available for
plan benefits:
Beginning of year
Contribution receivable
End of year
<CAPTION>
Total Grand
Page 1 Total
------ -----
<S> <C> <C>
Sources of net assets:
Employee contributions $ 6,140,531 $ 6,140,531
Employer contributions 99,246,515 99,246,515
Unallocated funds 1,579,263 1,579,263
Interfund transfers - -
RT Savings Plan transfer
at 1/1/98 (Note 3) (106,894,318) (106,894,318)
RT Savings Plan transfer
at 12/31/98 (Note 3) 123,506,375 128,923,920
Loans repaid - principal - -
interest 394,787 394,787
Investment income:
Interest and dividend
income 18,924,402 18,924,402
Realized gain (loss) 43,048,238 43,048,238
Unrealized gain (loss) (1,779) (1,779)
------------- -------------
Total investment income 61,970,861 61,970,861
------------- -------------
Total sources of net assets 185,944,014 191,361,559
------------- -------------
Applications of net assets:
Termination of ESOP 64,102,531 64,102,531
Withdrawals 27,829,575 27,829,575
ISC transfer at 7/16/98
(Note 3) 514,582,087 514,582,087
Interest expense - notes
payable 6,624,397 6,624,397
Management fees 316,873 316,873
Loans issued - -
------------- -------------
Total applications of net
assets 613,455,463 613,455,463
------------- -------------
Increase (decrease) in net
assets ($427,511,449) ($422,093,904)
============= =============
Net assets available for
plan benefits:
Beginning of year 605,057,314
Contribution receivable 150,865
------------
End of year $183,114,275
============
</TABLE>
The accompanying notes are an integral part of these statements.
-5-
<PAGE>
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997
----------------------------------------------------------
<TABLE>
<CAPTION>
Fidelity Fidelity Warburg
Fidelity Retirement Spartan Pincus
Mutual Stable Value Government Fidelity U.S. Equity Fidelity Emerging
Benefit Fixed Income Money Market Asset Index Magellan Growth
Fund Fund Portfolio Manager Portfolio Fund Fund
---- ---- --------- ------- --------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Sources of net assets:
Employee contributions - $ 4,851,726 $ 339,320 $ 2,625,051 $ 3,525,500 $ 3,234,584 $ 845,786
Employer contributions - - - - - - -
Interfund transfers - (6,337,436) (209,209) (1,558,506) 9,306,721 (801,300) 570,772
Loans repaid - principal - 2,648,106 119,815 924,959 1,136,000 1,219,794 201,522
interest - 437,187 17,766 146,194 170,152 176,050 31,951
Investment income:
Interest and dividend
income $1,089,366 16,323,991 354,184 6,180,027 2,175,999 4,653,985 652,335
Realized gain (loss) - - - 2,269,080 6,340,645 3,334,631 367,712
Unrealized gain (loss) - - - 4,619,020 15,359,732 7,152,544 544,072
---------- -------------- --------- ----------- ----------- ----------- ----------
Total investment income 1,089,366 16,323,991 354,184 13,068,127 23,876,376 15,141,160 1,564,119
---------- -------------- --------- ----------- ----------- ----------- ----------
Total sources of net assets 1,089,366 17,923,574 621,876 15,205,825 38,014,749 18,970,288 3,214,150
---------- -------------- --------- ----------- ----------- ----------- ----------
Applications of net assets:
Withdrawals 205,599 25,791,797 523,244 4,620,637 5,547,395 4,187,547 624,240
Loans issued - 2,561,797 99,270 882,824 1,145,495 1,188,663 139,951
Interest expense - notes
payable - - - - - - -
Management fees - 83,097 1,272 8,274 6,018 2,074 385
---------- -------------- --------- ----------- ----------- ----------- ----------
Total applications of net
assets 205,599 28,436,691 623,786 5,511,735 6,698,908 5,378,284 764,576
---------- -------------- --------- ----------- ----------- ----------- ----------
Increase (decrease) in net
assets $ 883,767 ($ 10,513,117) ($ 1,910) $ 9,694,090 $31,315,841 $13,592,004 $2,449,574
========== ============== ========= =========== =========== =========== ==========
Net assets available for
plan benefits:
Beginning of year
End of year
<CAPTION>
Inland Steel
Warburg Inland Steel Industries
Pincus Industries Series E ESOP
International Common Preferred
Equity Stock Stock Loan
Fund Fund Fund Fund Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Sources of net assets:
Employee contributions $ 539,842 $ 252,162 - - $ 16,213,971
Employer contributions - 428,118 $10,643,969 - 11,072,087
Interfund transfers 348,435 (240,575) (1,078,902) - -
Loans repaid - principal 127,824 140,132 - ($6,518,152) -
interest 17,797 24,281 - - 1,021,378
Investment income:
Interest and dividend
income 753,788 184,742 11,017,876 - 43,386,293
Realized gain (loss) (205,458) 611,515 - - 12,718,125
Unrealized gain (loss) (874,784) (2,191,088) - - 24,609,496
--------- ------------- ----------- ----------- ------------
Total investment income (326,454) (1,394,831) 11,017,876 - 80,713,914
--------- ------------- ----------- ----------- ------------
Total sources of net assets 707,444 (790,713) 20,582,943 (6,518,152) 109,021,350
--------- ------------- ----------- ----------- ------------
Applications of net assets:
Withdrawals 253,281 911,583 5,279,839 750,386 48,695,548
Loans issued 72,631 125,334 - (6,215,965) -
Interest expense - notes
payable - - 8,564,320 - 8,564,320
Management fees 66 - 3,568 - 104,754
--------- ------------- ----------- ----------- ------------
Total applications of net
assets 325,978 1,036,917 13,847,727 (5,465,579) 57,364,622
--------- ------------- ----------- ----------- ------------
Increase (decrease) in net
assets $ 381,466 ($ 1,827,630) $ 6,735,216 ($1,052,573) $ 51,656,728
========= ============= =========== ===========
Net assets available for
plan benefits:
Beginning of year 553,400,586
------------
End of year $605,057,314
============
</TABLE>
The accompanying notes are an integral part of these statements.
-6-
<PAGE>
The accompanying notes are an integral part of these statements.
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1998 AND 1997
--------------------------
NOTE 1 - DESCRIPTION OF THE PLAN:
- --------------------------------
The Inland Steel Industries Thrift Plan ("Plan") is a defined contribution
profit sharing (thrift-savings) plan which is available to all salaried,
nonbargaining unit employees of Ryerson Tull, Inc. and, preceding the merger of
Ryerson Tull, Inc. ("RT") and Inland Steel Industries Inc. ("Company" or "ISI")
in February 1999, was available to all salaried nonbargaining unit employees of
the Company and certain of its subsidiaries and affiliates (the Company, the
subsidiaries, and its affiliates collectively referred to as "Employers"). The
Plan, which is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), was adopted effective January 1,
1975. In 1989, the Company amended the Plan to include an Employee Stock
Ownership Plan ("ESOP"), effective January 1, 1990.
During the year ended December 31, 1998, there were significant changes in the
composition of the subsidiaries and affiliates included within the Plan which
have materially impacted the net assets of the Plan. These are more fully
discussed in Note 3. Also, the ESOP was terminated effective as of November 9,
1998. As a result, any comment and/or description of the ESOP, within these
footnotes and financial statements as a whole, pertain primarily to the year
ended December 31, 1997 and in 1998 through the point of termination.
Employees electing to participate in the Plan may contribute up to fifteen
percent of their base salary. Participants have the option of making
contributions on a before-tax (limited to ten percent of base salary) and/or
after-tax basis. Through December 31, 1998, the first five percent of
participants' contributions (the "basic contribution") was matched as follows by
the Employers. A participant who was an employee of the Company or its
participating subsidiaries received an allocation to his or her ESOP account of
shares of Company Series E ESOP Convertible Preferred Stock ("Series E Preferred
Stock") and, under certain circumstances, Company common stock, with a fair
market value equal to such participant's basic contribution or, after
termination of the ESOP, cash. Because employees of I/N Tek and I/N Kote (joint
venture partnerships owned by former subsidiaries of the Company and Nippon
Steel Corporation) were not permitted by law to participate in the ESOP portion
of the Plan, employer matching contributions for these employees were made in
cash, which was then invested in Company common stock and credited to each
participant's Inland Steel Industries Stock Fund ("Common Stock Fund") account.
Subsequently, Inland Steel Company ("ISC"), which is a partner in I/N Tek and
I/N Kote, merged with a subsidiary of Ispat International, N.V. ("Ispat") on
July 16, 1998. The account balances of employees of ISC and certain affiliates
were spun-off to a separate plan
-7-
<PAGE>
(see Note 3). For purposes of determining the number of shares to be contributed
to participant accounts, Company common stock is valued at the closing price per
share on the New York Stock Exchange - Composite Transactions on the last day
such stock was traded prior to the date of contribution. The Series E Preferred
Stock was valued at $48.594 per share, as determined by an independent
appraiser, plus accrued dividends.
Participants can designate the investment of their contributions in integral
multiples of one percent in any of the Fidelity Retirement Government Money
Market Portfolio, Fidelity Stable Value Fixed Income Fund, Fidelity Spartan U.S.
Equity Index Portfolio (prior to 1998, the name of this fund was Fidelity U.S.
Equity Index Portfolio), Fidelity Asset Manager, Fidelity Magellan Fund, Inland
Steel Industries Common Stock Fund, Warburg Pincus Emerging Growth Fund, Warburg
Pincus International Equity fund, Conservative Investment Strategy Fund,
Moderate Investment Strategy Fund, Aggressive Investment Strategy Fund, Franklin
Small Cap Growth Fund, MAS Mid Cap Value Portfolio, Vanguard Index Trust-Growth
Portfolio, and the Fidelity Diversified International Fund (collectively "the
Funds"). The Conservative Investment Strategy Fund, Moderate Investment
Strategy Fund, Aggressive Investment Strategy Fund, Franklin Small Cap Growth
Fund, MAS Mid Cap Value Portfolio, Vanguard Index Trust-Growth Portfolio, and
Fidelity Diversified International Fund became available to Plan participants on
December 31, 1998. Individual participant accounts are maintained for each
investment fund as well as for individual ESOP accounts to record participant
contributions, employer matching contributions, investment appreciation or
depreciation, dividends and interest income. Dividends on shares of Company
common stock and Series E Preferred Stock that had been allocated to individual
participant accounts are credited to participant accounts in the form of
additional shares of stock.
Participants vest immediately in their contributions and the earnings thereon.
Participants with less than five years of vesting service become vested in the
Company's matching contributions twenty-four months after the contributions are
made. Participants become immediately vested in all of the Company's matching
contributions upon the completion of five years of vesting service or upon
termination of employment due to a distributable event, such as retirement,
death, disability or other events as set forth in the Plan. Upon termination of
employment for reasons other than a distributable event, nonvested matching
contributions are forfeited at the time of distribution. Nonvested Company
contributed Series E Preferred Stock and shares of Company common stock that are
forfeited were used to reduce future contributions by the Company. At December
31, 1997, 3,308 forfeited shares of Series E Preferred Stock were held by the
Plan for future matching contributions; the Plan held zero forfeited shares at
December 31,1998 as the ESOP was liquidated during 1998.
After a participant's shares of common stock contributed by the Company had been
held for at least twenty-four months, the participant could elect to reinvest
these shares in any of the Funds. Participants who reached the age of fifty-
nine and one-half years or who are subject to certain distributable events
could, at any time, transfer amounts allocated to their individual ESOP accounts
or shares of common stock contributed by the Company to these other investment
funds, subject to certain restrictions.
Participants may withdraw their contributions and the earnings thereon, subject
to certain
-8-
<PAGE>
limitations set forth in the Plan. Certain withdrawals are subject
to federal and state income taxes and penalties as required by the Internal
Revenue Service ("IRS").
Participants may borrow up to fifty percent or $50,000 of their vested balance,
whichever is less (subject to certain limitations set forth in the Plan),
excluding their investment in the Mutual Benefit Fund (see Note 4 - Mutual
Benefit Fund), for terms not exceeding five years, subject to acceleration under
certain circumstances. The interest rate charged on loans is based upon a
nationally published prime rate in effect at the beginning of the month in which
the loan application is accepted.
Participants are entitled to a distribution of all vested amounts upon
termination of employment with the Company. Participants may elect to receive a
lump sum payment or, under certain circumstances set forth in the Plan,
installment payments, starting no later than April 1 of the year following the
attainment of age seventy and one-half years. Participants receiving
distributions from the Common Stock Fund or from their ESOP accounts may elect
to receive such distributions in the form of whole shares of common stock, with
fractional shares distributed in cash, or entirely in cash. Amounts
attributable to a participant's interest in all other funds are distributed in
cash.
The Plan has entered into a trust agreement permitting the commingling of plan
assets with those of other plans offered by the Employers in the Inland Steel
Industries Master Trust (the "Master Trust").
Description of the Series E Preferred Stock
- -------------------------------------------
Shares of Series E Preferred Stock entitled holders to cumulative annual
dividends of $3.523 per share, payable semi-annually. The Series E Preferred
Stock shares were convertible at the option of the holder into shares of the
Company's common stock on a one-for-one basis, subject to certain adjustments.
The Company could, at its option, redeem all or any portion of the Series E
Preferred Stock at specified prices, but not less than $48.594 per share, plus
all accrued and unpaid dividends to the redemption date. Holders of Series E
Preferred Stock were entitled to preference on distribution of Company assets
over holders of Company common stock or any other class or series of stock
junior to the Series E Preferred Stock.
Administration
- --------------
The Plan is administered by the Plan Committee ("Committee"), which consists of
certain officers of the Company appointed by the Company's Board of Directors.
LaSalle National Bank serves as trustee of the Common Stock Fund and
-9-
<PAGE>
served as trustee of the ESOP Preferred Stock Fund.
Fidelity Management Trust Company ("Fidelity") is Trustee under the Plan with
responsibility for administering, holding and investing certain assets of the
Plan. The costs of certain administrative and investment services provided by
Fidelity are paid from participants' accounts or assets within the appropriate
investment option, as applicable.
This description summarizes major provisions of the Plan and is provided for
general information purposes only. It does not cover all provisions,
limitations and exclusions of the Plan. A full copy of the Plan and additional
information about the Plan may be requested from the Plan Administrator.
Plan Amendments
- ---------------
The amendment dated December 17, 1997 (effective January 1, 1998) provided for
the transfer of account balances (including participant loan balances and
allocated ESOP accounts) to the RT Plan as well as for any future transfers of
employees. Refer to Note 3 for more details.
The amendment dated July 14, 1998 (effective June 15, 1998), provided that, to
the extent that the ESOP trustee, LaSalle National Bank, does not receive timely
instructions from a participant (or beneficiary) with respect to the tender or
exchange of shares of Company Stock (of whatever class) credited to the
participant's account, the ESOP trustee will exercise its own discretion in
determining whether or not to tender or exchange such shares. The amendment
also provided for the spin-off of the account balances and related account
restrictions, including the restrictions on investment in the Inland Steel
Industries Stock Fund, of participants of ISC and certain affiliates.
The amendment dated November 5, 1998 (effective November 9, 1998), terminated
the ESOP component of the plan. Refer to Note 3 for more details regarding this
termination.
The amendment dated December 22, 1998 (effective December 31, 1998 - the "Plan
Merger Date") provides for the merger of the RT Plan with and into the Plan.
Refer to Note 3 for more details regarding this merger.
A further amendment, as disclosed in Note 10, dated January 13, 1999 (effective
January 1, 1999), renamed the Plan as the "Ryerson Tull Savings Plan".
-10-
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ---------------------------------------------------
Basis of accounting
- -------------------
The Plan's financial statements have been prepared on the accrual basis of
accounting.
Use of estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and related
notes to financial statements. Changes in such estimates may affect amounts
reported in future periods.
Investments and investment income
- ---------------------------------
Investments in Inland Steel Industries common stock are valued at the last
reported sales price on the last business day of the year. Series E Preferred
Stock was valued at $48.594 per share, as determined by an independent
appraiser, plus accrued dividends.
The Stable Value Fixed Income Fund consists of unallocated investment contracts
with various insurance companies and pooled investment funds held by Fidelity.
The unallocated investment contracts earned a fixed rate of return ranging from
5.52 percent to 7.90 percent in 1998 and are stated at contract value plus
interest earned to date. All unallocated investment contracts individually
represent less than five percent of the Plan's net assets at December 31, 1998
and 1997. The pooled investment funds, which consist of money market funds, are
valued at cost plus interest earned to date, which approximates market value.
See Note 4 and Note 5 for a description of the accounting treatment with respect
to the Mutual Benefit Fund and the Confederation Life contract, respectively.
The Fidelity Spartan U.S. Equity Index Portfolio is a pooled investment fund
which invests in various common stocks. The net assets of this fund are valued
at the closing market price on the last business day of the year for the
individual securities held in the portfolio.
The Fidelity Retirement Government Money Market Portfolio consists of short term
obligations issued or guaranteed by the U.S. Government. The assets in the fund
are stated at cost plus interest, which approximates market value.
The Fidelity Asset Manager Fund is an asset-allocation fund which consists of a
mix of short-term instruments, bonds and equities. The net assets of the fund
are valued at the closing market price on the last business day of the year for
the individual assets held in the portfolio.
The Fidelity Magellan Fund consists of common stock and securities that are
convertible into common stock. The net assets of the fund are valued at the
closing market price on the last business day of the year for the individual
assets held in the portfolio.
-11-
<PAGE>
The Warburg Pincus Emerging Growth Fund invests in domestic common stocks of
small and medium sized companies. The net assets of the fund are valued at the
closing market price on the last business day of the year for the individual
assets held in the portfolio.
The Warburg Pincus International Equity Fund invests in international equity
securities. The net assets of the fund are valued at the closing market price
on the last business day of the year for the individual assets held in the
portfolio.
The following investment options become available to participants on
December 31, 1998:
The Conservative Investment Strategy Fund invests in a set combination of
investment options primarily consisting of the Fidelity U.S. Bond Index Fund and
the Stable Value Fixed Income Fund. The net assets of this fund are valued at
the closing price of the various mutual funds that comprise this portfolio.
The Moderate Investment Strategy Fund invests in a set combination of investment
options primarily consisting of the Vanguard Index Trust Growth Portfolio,
Fidelity U.S. Bond Index Fund and the Stable Value Fixed Income Fund. The net
assets of this fund are valued at the closing price of the various mutual funds
that comprise this portfolio.
The Aggressive Investment Strategy Fund invests in a set combination of
investment options primarily consisting of the Vanguard Index Trust Growth
Portfolio, Fidelity Equity-Income Fund and Fidelity U.S. Bond Index Fund. The
net assets of this fund are valued at the closing price of the various mutual
funds that comprise this portfolio.
The Franklin Small Cap Growth Fund invests primarily in common stock of
companies with market capitalizations of less than $1 billion at the time of
investment. The net assets of the fund are valued at the closing market price
on the last business day of the year for the individual assets held in the
portfolio.
The MAS Mid Cap Value Portfolio invests primarily in common stock of companies
with market capitalizations between $500 million and $3 billion. The net assets
of the fund are valued at the closing market price on the last business day of
the year for the individual assets held in the portfolio.
The Vanguard Index Trust-Growth Portfolio invests in growth equities and has a
moderate to aggressive overall risk level. The net assets of the fund are valued
at the closing market price on the last business day of the year for the
individual assets held in the portfolio.
The Fidelity Diversified International Fund invests primarily in foreign
equities. The net assets of the fund are valued at the closing market price on
the last business day of the year for the individual assets held in the
portfolio.
Realized gains and losses on investment transactions are calculated using the
current value method. Under the current value method, realized gains and losses
on investments sold are calculated as sales proceeds less an adjusted cost
representing current value at the beginning of the year or acquisition cost if
acquired during the year.
-12-
<PAGE>
In accordance with the policy of stating investments at fair market value, the
net unrealized appreciation or depreciation of the market value of investments
for the year, if any, is reflected in the Statement of Changes in Net Assets
Available for Plan Benefits. Unrealized gains or losses are calculated as the
current value of investments held at the end of the year less their current
value at the beginning of the year or acquisition cost if acquired during the
year.
Interest income is accrued as earned, and dividend income is recorded as of the
record date.
Allocation of Master Trust assets and transactions
- --------------------------------------------------
In order to preserve, for participating plans, an interest in the combined
assets of the Master Trust, Fidelity, the trustee, determines computed shares in
the Master Trust for each plan. Current month's Master Trust investment
transactions are allocated based on each plan's computed share in the Master
Trust at the end of the prior month, adjusted for current month's contributions
less payments to participants. These allocated amounts are then added to or
subtracted from the prior month's computed shares, as adjusted, to determine
computed shares at the end of the month. Master Trust investment transactions
allocated to the Plan include dividend and interest income, gains and losses on
sales of investments, unrealized appreciation or depreciation of investments,
and administrative expenses. At December 31, 1998, due to the merger with the RT
Plan, the net assets of the Plan comprise 100% of the assets held in the Master
Trust.
Contributions and withdrawals
- -----------------------------
Until termination of the ESOP and the concomitant repayment of the ESOP Notes,
the Employers contributed, at a minimum, an amount at least equal to the
principal and interest payments due on the Notes of the ESOP Trust less any
preferred dividends (see Note 6). These contributions were used for payments of
principal and interest and were not allocated to participants' account. The
Employers' matching contributions, allocated to participants' accounts, were in
the form of ESOP or common shares. Contributions are recorded in the period
accrued by the Company. After termination of the ESOP, all Employer
contributions were made in cash and allocated to participants' accounts.
Withdrawals and transfers are valued as of the close of the business day in
which they occur.
Administrative expenses
- -----------------------
Certain trustee fees, certain recordkeeping fees, certain legal fees and the
investment management fees of all funds except the ESOP Fund and the Common
Stock Fund are paid by the Plan. All other management fees and administrative
expenses of the Plan are paid by the Company.
-13-
<PAGE>
NOTE 3 - PLAN SPIN-OFFS, MERGERS AND OTHER SIGNIFICANT ACTIVITY:
- ---------------------------------------------------------------
Effective as of January 1, 1998, the assets and liabilities under the profit
sharing and stock bonus portion of the Plan attributable to employees of Ryerson
Tull, Inc. and its subsidiary Joseph T. Ryerson & Sons, Inc., were spun-off to
the RT Plan. The spin-off did not affect the leveraged ESOP component. All
unallocated suspense account shares and all liability for the outstanding ESOP
loan under the Plan were retained by the Plan, and no portion of such suspense
account shares or ESOP debt was transferred to the RT Plan. The fair market
value of assets including outstanding participant and loans transferred to the
RT Plan amounted to $106,894,318.
Effective as of July 16, 1998, the portion of the Plan consisting of account
balances (including any outstanding loan balances) of ISC Employees (as such
term is defined in the Agreement and Plan of Merger among the Company, ISC,
Ispat and Inland Merger Sub, Inc., dated as of May 27, 1998 - the "Merger
Agreement"), was spun-off. The spun-off plan (which is known as the "Ispat
Inland Savings Plan") is being continued with ISC as its plan sponsor. Effective
as of the closing date of the merger, the shares of Series E Preferred Stock
attributable to the account balances of ISC employees under the Plan were
redeemed in accordance with the Certificate of Designation by the Company and
the proceeds thereof, together with the other assets attributable to the ISC
Employees, were spun off to the Inland Steel Company Savings Plan. The total
assets of the funds transferred to ISC were $514,582,087, which includes the
redemption of the shares of ISC employees of the Series E Preferred stock,
including accrued dividends and a redemption premium related to these shares.
Effective November 9, 1998, the ESOP was terminated. The entire amount of the
redemption proceeds attributable to Series E Preferred stock held in the ESOP
suspense account, totaling $63.4 million, was applied to repayment of the
outstanding ESOP debt. Pursuant to a guarantee of the ESOP debt, the Company
paid $39.7 million, to the ESOP note holders to compensate them for prepayment
of the ESOP notes (see Note 6).
The entire amount of the redemption proceeds attributable to Series E Preferred
shares previously released from the ESOP suspense account was transferred to
Fidelity as Plan trustee and invested in the Fidelity Retirement Government
Money Market Portfolio. Thereafter, participants could elect to have any
portion for their account balances so invested or transferred to any one or more
of the other investments options maintained under the Plan.
Effective as of December 31, 1998 (the "Plan Merger Date"), the RT Plan was
merged with and into the Plan. Each individual who was a "Participant" in the
RT Plan became a participant in the Plan effective as of the Plan Merger Date,
and each entity that is an "Employer" under the RT Savings Plan immediately
prior to the Plan Merger Date became an Employer under the Plan. Any amount not
previously allocated to participants' accounts under the Plan was allocated, as
of December 31, 1998, as an employer contribution in accordance with the terms
of the Plan as amended to reflect the Plan Merger. The fair market value of
assets (including participant loans) transferred from the RT Plan amounted to
$128,923,920.
-14-
<PAGE>
NOTE 4 - MUTUAL BENEFIT FUND:
- ----------------------------
The Plan maintains an unallocated investment contract with Mutual Benefit Life
Insurance Company ("Mutual Benefit"). This contract was initially purchased in
January 1989 as an investment of the Fixed Income Investment Fund. The stated
terms of the contract include an interest rate of 8.75 percent per annum, with
interest paid annually each December 31, and scheduled maturities of fifty
percent of the contract value at September 30, 1991 and the remaining balance of
the contract value plus any unpaid interest at March 31, 1992.
On July 16, 1991, Mutual Benefit was placed under rehabilitation directed by New
Jersey insurance regulators and policy withdrawals and redemptions were
suspended pending completion of this plan. Consequently, none of the scheduled
maturity payments of the Plan's contract with Mutual Benefit have been received.
Interest on the contract through December 31, 1990 has been received.
In response to Mutual Benefit being placed under rehabilitation, the Plan was
amended, effective July 1, 1991, to segregate the carrying value of the Mutual
Benefit contract, including accrued interest determined in accordance with the
terms of the Mutual Benefit contract through June 30, 1991, into a separate
fund, called the Mutual Benefit Fund. The amount credited to each participant's
Mutual Benefit account was equal to the participant's proportionate interest in
the carrying value of the Mutual Benefit Fund at June 30, 1991. No
contributions, withdrawals, loans or transfers to or from the Mutual Benefit
Fund are permitted, except in certain circumstances as described below. Loans,
withdrawals and transfers are limited to the participants' vested balances in
the Plan, as defined by the Plan, excluding the participants' balances in the
Mutual Benefit Fund.
In November 1993, the Mutual Benefit rehabilitation plan was approved by the
courts and in January 1994, the rehabilitation plan was finalized. In
accordance with the terms of the rehabilitation plan, during March 1994, Plan
participants were given the option of withdrawing their interests in the Mutual
Benefit Fund at a reduced value (the "opt-out election") or participating in the
rehabilitation plan (the "opt-in election"). Such withdrawal payments were made
in September 1994 through a transfer to participants' Stable Value Fixed Income
Fund accounts.
Participants who chose the opt-in election will be entitled to their full
principal balance plus accrued interest, but will not receive any cash payments,
except under certain circumstances, until after the end of the Rehabilitation
Period on December 31, 1999. Opt-in participants have been credited with the
contract interest rate of 8.75 percent for 1991, 4.0 percent for 1992, 3.5
percent for both 1993 and 1994, 3.55 percent for 1995, 5.75 percent for 1996,
6.35 percent for 1997 and 9.75 percent for 1998. Interest rates for future
years will be determined annually based on the investment results of Mutual
Benefit. At December 31, 1999, account balances attributed to opt-in
participants are to be paid out, however, the Company was notified that a payout
of the Mutual Benefit Funds may occur during 1999, exclusive of residual surplus
settlement proceeds related to pending litigation.
The principal and interest on the Mutual Benefit contract is reinsured by a
group of insurance
-15-
<PAGE>
companies led by Metropolitan Life Insurance Company and Prudential Life
Insurance Company. The carrying value of the portion of the Mutual Benefit
contract related to the opt-in participants has not been reduced for any
potential loss relating to this contract. At December 31, 1998, the carrying
value of the Mutual Benefit Fund in the accompanying financial statements
reflects the July 16, 1991 contract value, plus accrued interest through
December 31, 1998 under the terms of the rehabilitation plan.
It may be possible under the rehabilitation plan for the Plan to withdraw its
participation in the Mutual Benefit contract. However, the amounts to be
received from such withdrawal would be based on the liquidation value of Mutual
Benefit assets at that time. In 1998, Mutual Benefit announced that such
withdrawals may be at contract value, plus accrued interest, without the payment
of any fee. Mutual Benefit may also permit individual participant withdrawals
for retired participants, certain hardships, death or disability. However, the
availability and amount of such withdrawals could only be determined upon the
submission of a request to Mutual Benefit and its subsequent review of that
request.
Certain unsecured creditors of Mutual Benefit challenged the rehabilitation plan
shortly after its approval. In 1996, a settlement agreement was reached with
the majority of these unsecured creditors, thereby reducing the possibility of
the rehabilitation plan being overturned and any resulting adverse effects on
the value of the Mutual Benefit Account.
NOTE 5 - CONFEDERATION LIFE:
- ---------------------------
The Plan maintained an unallocated insurance contract with Confederation Life
Insurance Company ("Confederation Life"). This contract was initially purchased
as an investment of the Stable Value Fixed Income Fund in February 1993. The
stated terms of the contract included an interest rate of 6.08 percent per
annum, with interest paid annually each February, and a scheduled maturity of
January 1, 1998.
In August 1994, following the placement of Confederation Life's Canadian
operations under the regulatory control of the Canadian government, Michigan
insurance regulators filed an order of rehabilitation against the U.S. Branch of
Confederation Life Insurance Company.
In response to the seizure of Confederation Life, the trustee and investment
manager of the Stable Value Fixed Income Fund (Fidelity) suspended the accrual
of interest for the period August 12, 1994 to August 31, 1994 and, effective
September 1, 1994, resumed interest accruals at an annual effective rate of 2.00
percent. The contract was not segregated from the Stable Value Fixed Income Fund
and participants continued to have the right to make contributions, loans,
transfers, and withdrawals to and from this fund. In October 1996, the
Confederation Life rehabilitation plan was approved by the courts and in
November 1996, the rehabilitation plan was finalized.
The carrying value of the Confederation Life contract in the accompanying
financial statements reflects the principal amount of the contract of $5,000,000
plus accrued interest of $296,018 for the year ended December 31, 1996, in
accordance with the terms stated above. The carrying value represented
Fidelity's best estimate of the fair market value of this contract based on the
-16-
<PAGE>
financial information available as of December 31, 1996.
In accordance with the rehabilitation plan, during March 1997, the Plan elected
to receive its contract payments including accrued interest in installments
commencing in April 1997. As of May 30, 1997, the Plan had received contract
payments totaling $5,908,981 from Confederation Life and state guaranty
associations. Additional payments are expected to be minor. The excess of the
contract payments received as compared to the carrying value of the
Confederation Life contract at December 31, 1996 is due to the rate at which
interest was accrued by the Plan and was recognized as income over a twelve
month period extending into 1998.
NOTE 6 - NOTES PAYABLE:
- ----------------------
In July 1989, the Company and ISC, then a wholly owned subsidiary of the
Company, provided loans to the ESOP Trust of $146,913,160 and $3,086,800,
respectively. The ESOP Trust used the proceeds of these loans to purchase
3,086,800 leveraged shares of Series E Preferred Stock from the Company. In
September 1990, the ESOP Trust refinanced its loan from the Company through the
private placement of notes totaling $146,913,160 with eighteen lenders. The
notes were payable in semi-annual installments through July 2004, with an
initial average interest rate of 8.65 percent per annum, and were guaranteed by
Joseph T. Ryerson & Son, Inc., then a wholly owned subsidiary of the Company.
The note due to ISC was repaid in installments during 1990 and 1991. The ESOP
loans were pre-paid in full on November 9, 1998.
Interest and principal payments made by the ESOP Trust were funded by dividends
paid by the Company on leveraged shares of the Series E Preferred Stock and
additional contributions made by the Company. From time to time, the Company
elected to provide additional shares of nonleveraged Series E Preferred Stock to
the ESOP Trust to cover employee matching requirements not covered by the
release of shares through scheduled principal and interest payments by the ESOP
Trust on its outstanding notes.
Cash held by the ESOP Trust at December 31, 1997 of $5,327,757, was used for
payment of principal and interest due on the Notes Payable of the ESOP Trust.
The remaining cash held by the ESOP Trust of $250,014 at December 31, 1997, was
used to purchase additional shares of nonleveraged Series E Preferred Stock that
were allocated to participants' accounts. Cash balance at December 31, 1998 was
zero due to the termination of ESOP during 1998.
NOTE 7 - TAX STATUS OF THE PLAN:
- -------------------------------
On March 18, 1997, the IRS issued a favorable determination letter conditioned
upon the adoption of a technical amendment with respect to the qualified tax
status of the Plan, as amended, as of September 9, 1996. Such technical
amendment was adopted by the Plan subsequent to March 18, 1997. The Plan's tax
counsel believes that the Plan is designed in compliance with the applicable
requirements of the Internal Revenue Code. The Plan Administrator believes that
the Plan is being operated in compliance with the applicable requirements of the
Internal Revenue Code.
-17-
<PAGE>
NOTE 8 - PLAN TERMINATION:
- -------------------------
The Company anticipates that the Plan will continue, but reserves the right to
terminate the Plan at any time. Upon termination of the Plan, all amounts
allocated to the participants' accounts, including all employer matching
contributions, shall vest immediately. The Trustees shall then direct the
method and manner of distribution of the Plan's assets to participants or their
beneficiaries.
NOTE 9 - THE MASTER TRUST:
- -------------------------
As described in Note 1, the Plan's trust agreement permits the commingling of
Plan assets in the Master Trust with those of other plans offered by the
Employers. Fidelity determines the Plan's proportionate share of trust assets
and related changes in trust assets, as described in Note 2, and such amounts
are reflected in the Plan's statements of net assets available for benefits and
of changes in net assets available for benefits. At December 31, 1998, the
Plan's interest in the total investment assets of the Master Trust was 100%.
The following table presents the net assets held by the Master Trust as of
December 31, 1998:
<TABLE>
<CAPTION>
1998
----
<S> <C>
Investments at fair market value:
Interest bearing cash $ 147,119
Pooled investment funds 131,572,472
Common stock 1,316,280
Guaranteed investment contracts 46,199,972
Participant loans 3,878,432
------------
Net assets held by the Master Trust $183,114,275
============
</TABLE>
-18-
<PAGE>
The following table presents net investment income for the Master Trust for the
year ended December 31, 1998:
<TABLE>
<CAPTION>
<S> <C>
1998
----
Net appreciation in fair value of investments $52,715,772
Dividends 15,055,944
Interest 12,077,787
-----------
Total investment income 79,849,503
-----------
Participant benefits 33,332,990
Administrative expenses 333,822
Interest Expense 6,624,397
-----------
Total expenses 40,291,209
-----------
Net investment income $39,558,294
===========
</TABLE>
The following table presents the changes in the net appreciation or depreciation
in fair value of investments (including gains and losses on investments sold
during the year and unrealized gains and losses on investments purchased and
held during the year) held by the Master Trust for the year ended December 31,
1998:
<TABLE>
1998
----
<S> <C>
Common stock $ 7,870,333
Pooled investment funds 44,845,439
-----------
Net appreciation in fair value of investments $52,715,772
===========
</TABLE>
NOTE 10 - SUBSEQUENT EVENTS:
- ---------------------------
Effective as of January 1, 1999, via a plan amendment, the Plan was renamed as
the "Ryerson Tull Savings Plan" for periods after December 31, 1998.
On November 17, 1998 Inland Engineered Material Corporation, a subsidiary of the
Company, was sold. The employees employed by the Inland Engineered Material
Corporation had their Plan assets (approximately $2 million) transferred from
the Plan to the to Engineered Metal Corporation Savings Plan (the purchasing
parties saving plan) in February 1999.
-19-
<PAGE>
SCHEDULE 1
-----------
INLAND STEEL INDUSTRIES THRIFT PLAN
ASSETS HELD FOR INVESTMENT AT PLAN YEAR-END
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Identity of issue, borrower, Description of investment including Current
lessor or similar party maturity date, rate of interest Cost Value
- ------------------------ -------------------------------- --------------- -----------
<S> <C> <C> <C>
Cash held by Common Stock Fund 35,419 35,419
Receivables
- -----------
Loans to participants* 3,727,567 3,727,567
Contributions receivable 150,865 150,865
--------------- -----------
Sub-total - Receivables 3,878,432 3,878,432
--------------- -----------
Corporate Stocks - Common
- -------------------------
Inland Steel Industries, Inc.* 84,596 shares common stock 2,262,741 1,427,980
--------------- -----------
Interest in Pooled Investment Funds
- -----------------------------------
Fidelity Short-term Investment Fund* 12,596,295 12,596,295
Fidelity Spartan U.S. Equity Index Portfolio* 748,629 shares in pooled investment fund 26,776,359 32,909,731
Fidelity Retirement Government Money Market* 26,743,662 shares in pooled investment fund 26,743,661 26,743,660
Fidelity Asset Manager* 1,111,013 shares in pooled investment fund 18,645,748 19,320,522
Fidelity Magellan Fund* 236,599 shares in pooled investment fund 26,954,499 28,585,937
Fidelity Equity Income 4,941 shares in pooled investment fund 268,909 274,449
Fidelity Diversified International Fund 22,539 shares in pooled investment fund 394,183 399,389
Franklin Small Cap Value Fund 14,024 shares in pooled investment fund 293,816 316,520
MAS Mid Cap Value Fund 14,401 shares in pooled investment fund 284,501 298,091
Vanguard Growth Index Fund 69,511 shares in pooled investment fund 2,032,273 2,201,428
Conservative Strategy Fund 19,291 shares in pooled investment fund 199,328 202,176
Moderate Strategy Fund 53,724 shares in pooled investment fund 547,418 573,771
Aggresive Strategy Fund 104,417 shares in pooled investment fund 1,088,120 1,151,721
Warburg Pincus Emerging Growth Fund 101,395 shares in pooled investment fund 3,992,040 4,052,777
Warburg Pincus International Equity Fund 109,387 shares in pooled investment fund 2,010,787 1,946,004
--------------- -----------
Sub-total - Interest in Pooled Investment Funds 122,827,937 131,572,471
--------------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Identity of issue, borrower, Description of investment including Current
lessor or similar party maturity date, rate of interest Cost Value
- ------------------------ ------------------------------- --------- ---------
<S> <C> <C> <C>
Unallocated Investment Contracts
- --------------------------------
Bankers Trust Synthetic MBS Contract, due on various maturity 979,859 979,859
dates through 11/26/99, 6.06%
CDC Capital Inc Investment Contract, due on various maturity 2,184,454 2,184,454
dates through 1/4/00, 7.78%
CDC Capital Inc Investment Contract, due on various maturity 422,879 422,879
dates through 8/15/01, 6.46%
Chase Manhattan Bank Synthetic ABS Contract, due on various maturity 1,058,975 1,058,975
dates through 6/17/02, 7.40%
Combined Insurance Investment Contract, due on various maturity 1,297,266 1,297,266
dates through 3/31/99, 6.12%
Combined Insurance Investment Contract, due on various maturity 495,911 495,911
dates through 2/28/03, 6.35%
Deutsche Bank Synthetic ABS Contract, due on various maturity 1,356,015 1,356,015
dates through 5/10/02, 6.57%
Deutsche Bank Synthetic ABS Contract, due on various maturity 223,209 223,209
dates through 11/15/99, 6.08%
Deutsche Bank Synthetic ABS Contract, due on various maturity 1,348,715 1,348,715
dates through 8/15/03, 6.54%
Deutsche Bank Synthetic MBS Contract, due on various maturity 69,075 69,075
dates through 1/15/99, 5.56%
John Hancock Mutual Investment Contract, due on various maturity 1,914,294 1,914,294
dates through 4/16/02, 7.03%
Life of Virginia Investment Contract, due on various maturity 1,102,874 1,102,874
dates through 11/15/02, 6.03%
Lincoln National Investment Contract, due on various maturity 2,681,661 2,681,661
dates through 1/4/00, 5.85%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Identity of issue, borrower, Description of investment including Current
lessor or similar party maturity date, rate of interest Cost Value
- --------------------------- ------------------------------- ------------ -----------
<S> <C> <C> <C>
Unallocated Investment Contracts (Cont.)
- ---------------------------------------
Metropolitan Life Investment Contract, due on various maturity 984,923 984,923
dates through 6/1/99, 6.42%
Monumental Life Insurance Investment Contract, due on various maturity 1,241,738 1,241,738
on 9/28/00, 6.77%
Monumental Life Insurance Investment Contract, due on various maturity 990,078 990,078
dates through 7/31/00, 6.67%
Monumental Life Insurance Synthetic MBS Contract, due on various maturity 2,148,424 2,148,424
dates through 7/25/01, 7.68%
Monumental Life Insurance Synthetic MBS Contract, due on various maturity 528,039 528,039
dates through 3/26/01, 6.16%
Monumental Life Insurance Synthetic MBS Contract, due on various maturity 1,615,155 1,615,155
dates through 3/15/01, 5.81%
Monumental Life Insurance Synthetic MBS Contract, due on various maturity 485,742 485,742
dates through 3/15/01, 5.81%
Morgan Guaranty Synthetic ABS Contract, due on various maturity 669,335 669,335
dates through 5/15/03, 5.92%
Morgan Guaranty Synthetic ABS Contract, due on various maturity 1,827,968 1,827,968
dates through 8/15/00, 7.85%
Morgan Guaranty Synthetic MBS Contract, due on various maturity 2,126,934 2,126,934
dates through 1/15/01, 7.90%
Mutual Benefit Life Insurance Company Group Annuity Contract GA-5016-002 2,930,962 2,930,962
original maturity schedule for two
installments due on 9-01-91 and 3-31-92,
original interest 8.75%
New York Life Investment Contract, due on various maturity 1,671,214 1,671,214
dates through 11/19/01, 6.88%
Ohio National Investment Contract, due on various maturity 1,194,179 1,194,179
dates through 4/10/01, 7.02%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Identity of issue, borrower, Description of investment including Current
lessor or similar party maturity date, rate of interest Cost Value
- -------------------------- ------------------------------- ------------ ------------
<S> <C> <C> <C>
Unallocated Investment Contracts (Cont.)
- ----------------------------------------
Principal Mutual Investment Contract, due on various maturity 1,018,154 1,018,154
dates through 7/2/01, 7.15%
Principal Mutual Investment Contract, due on various maturity 557,005 557,005
dates through 12/31/00, 7%
Principal Mutual Investment Contract, due on various maturity 1,257,534 1,257,534
dates through 8/30/01, 7.23%
Safeco Life Insurance Investment Contract, due on various maturity 1,093,360 1,093,360
dates through 8/31/00, 7.09%
State Street Bank Synthetic ABS Contract, due on various maturity 660,286 660,286
dates through 6/25/03, 6.10%
State Street Bank Synthetic ABS Contract, due on various maturity 679,151 679,151
dates through 7/15/02, 5.89%
State Street Bank Synthetic ABS Contract, due on various maturity 691,671 691,671
dates through 9/25/00, 5.85%
State Street Bank Synthetic Corporate Contract, due on various maturit 670,150 670,150
dates through 1/16/01, 5.52%
State Street Bank Synthetic MBS Contract, due on various maturity 671,162 671,162
dates through 4/15/03, 5.89%
State Street Bank Synthetic MBS Contract, due on various maturity 793,846 793,846
dates through 4/15/03, 6.21%
Transamerica Life Insurance Synthetic ABS Contract, due on various maturity 585,616 585,616
dates through 3/6/02, 5.81%
Transamerica Life Insurance Synthetic MBS Contract, due on various maturity 413,136 413,136
dates through 2/17/04, 5.79%
Transamerica Occidental Investment Contract, due on various maturity 1,190,427 1,190,427
dates through 2/12/01, 6.89%
Identity of issue, borrower, Description of investment including Current
lessor or similar party maturity date, rate of interest Cost Value
- --------------------------- ----------------------------------- ---- -------
Unallocated Investment Contracts (Cont.)
- ----------------------------------------
UBS AG Synthetic ABS Contract, due on various maturity 441,394 441,394
dates through 4/15/02, 6.78%
UBS AG Synthetic ABS Contract, due on various maturity 772,538 772,538
dates through 8/15/02, 6.82%
UBS AG Synthetic ABS Contract, due on various maturity 1,154,665 1,154,665
---------- -----------
dates through 9/20/01, 6.36%
Sub-total - Unallocated Investment Contracts 46,199,973 46,199,973
---------- -----------
Total Assets 175,204,502 183,114,275
=========== ===========
</TABLE>
* Permitted party in interest transaction.
<PAGE>
SCHEDULE II
---------------
INLAND STEEL INDUSTRIES THRIFT PLAN
-----------------------------------
AGGREGATE TRANSACTIONS INVOLVING AN AMOUNT
IN EXCESS OF 5% OF THE CURRENT VALUE OF
PLAN ASSETS FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------------------
<TABLE>
<CAPTION>
Expense
incurred
Identify of party Number of Purchase Number of Selling Lease with
involved Description of asset Purchases price Sales price rental transaction
- ------------------------- ----------------------- ----------- ----------- ----------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Series of Transactions
- -------------------------
with the Same Party
- -------------------------
Fidelity Management Stable Value 213 $35,540,815 - -
Trust Company Fixed Income Fund 194 $253,340,215 - -
Fidelity Management ESOP Fund 142 3,368,221 - -
Trust Company 135 62,819,460 - -
Fidelity Management Inland Steel Stock 156 6,718,594 - -
Trust Company 149 26,862,945 - -
Fidelity Management Fidelity Magellan 196 8,324,407 - -
Trust Company 158 78,473,296 - -
Fidelity Management Fidelity Asset 184 8,501,634 - -
Trust Company Manager 154 70,117,647 - -
Fidelity Management Spartan U.S. 208 14,952,671 - -
Trust Company Equity Index 171 114,406,762 - -
Fidelity Management Mutual Benefit 33 774,996 - -
Trust Company Fund 26 14,091,270 - -
<CAPTION>
Identify of party Cost of Net gain
involved asset or (loss)
- ------------------------- --------------- --------------
Series of Transactions
- -------------------------
with the Same Party
- -------------------------
<S> <C> <C>
Fidelity Management $ 35,540,815 -
Trust Company 253,340,215 -
Fidelity Management 3,368,221 -
Trust Company 48,393,921 $14,425,539
Fidelity Management 6,718,594 -
Trust Company 24,602,966 2,259,979
Fidelity Management 8,324,407 -
Trust Company 56,177,458 22,295,838
Fidelity Management 8,501,634 -
Trust Company 57,033,157 13,084,490
Fidelity Management 14,952,671 -
Trust Company 66,312,730 48,094,032
Fidelity Management 774,996 -
Trust Company 14,091,270 -
</TABLE>
25
<PAGE>
SIGNATURES
Ryerson Tull Savings Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
RYERSON TULL SAVINGS PLAN
-------------------------
(Name of Plan)
Date: June 24, 1999 By: TERENCE R. ROGERS
-------------------------------
Terence R. Rogers
Treasurer and Member of
Ryerson Tull Savings Plan Committee
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------ ----------------------------------
<S> <C>
23 Consent of Independent Accountants
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-32504) and Post-Effective Amendment No. 1 to Form
S-8 Registration Statement (No. 33-1329) of Ryerson Tull, Inc. of our report
dated June 18, 1999 relating to the financial statements, which appears on this
Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
June 25, 1999
