UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K/A
/X/ ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-9887
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A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Oregon Steel Mills, Inc. Employee Stock Ownership Plan
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B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive officer:
Oregon Steel Mills, Inc.
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1000 Broadway Building, Suite 2200, Portland, Oregon 97205
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK
OWNERSHIP PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1997 AND 1996
<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
DECEMBER 31, 1997 AND 1996
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PAGE
Report of Independent Accountants......................................... 1
Statement of Net Assets Available for Benefits............................ 2
Statement of Changes in Net Assets Available for Benefits................. 3
Notes to the Financial Statements......................................... 4
Supplemental Information Required by ERISA
Schedule 1 - Schedule of Assets Held for
Investment Purposes................................................ 7
Schedule 2 - Schedule of Reportable Transactions...................... 8
Schedule 3 - Schedule of Non-Exempt Transactions...................... 9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
June 1, 1998
To the Board of Trustees of
Oregon Steel Mills, Inc.
Employee Stock Ownership Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Oregon Steel Mills, Inc. Employee Stock Ownership Plan at December 31,
1997 and 1996, and the changes in net assets available for benefits for the
years then ended, 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 made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules 1, 2 and 3 is presented for purposes of additional analysis and is not
a required part of the basic financial statements but is additional information
required by ERISA. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PRICE WATERHOUSE LLP
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
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1997 1996
------------ -------------
ASSETS:
Cash equivalents $ 2,502 $ 15,190
Investment in Oregon Steel Mills, Inc.
common stock, at fair value 39,806,656 34,015,448
Employer contribution receivable 1,500,000 -
----------- -----------
Net assets available for plan benefits $41,309,158 $34,030,638
=========== ===========
The accompanying notes are an integral part of this statement.
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
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<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investment income:
Net appreciation in fair value of investments $ 9,550,744 $ 6,008,612
Dividends 1,103,699 1,231,418
Interest 256 1,904
Employer contributions 1,500,911 945
----------- -----------
Total additions 12,155,610 7,242,879
----------- -----------
Benefits distributed to participants 3,249,046 3,723,506
Transfer of assets to the Oregon Steel Mills, Inc. Thrift Plan 524,345 209,762
Pass-through of dividends to participants 1,103,699 1,231,418
----------- -----------
Total deductions 4,877,090 5,164,686
----------- -----------
Net increase 7,278,520 2,078,193
Net assets available for benefits:
Beginning of year 34,030,638 31,952,445
----------- -----------
End of year $41,209,158 $34,030,638
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO THE FINANCIAL STATEMENTS
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1. DESCRIPTION OF THE PLAN
GENERAL
The Oregon Steel Mills, Inc. (the Company) Employee Stock Ownership Plan
(the Plan) was established by the Company on November 27, 1980 and amended
and restated effective January 1, 1994 to invest primarily in common stock
of the Company for the benefit of eligible employees. All employees with at
least six months of service for the Company, other than those whose terms
and conditions of employment are determined by collective bargaining
agreements that do not provide for participation in the plan, are eligible
to participate in the plan. Wells Fargo Bank is the Plan Trustee.
Administration of the Plan is performed by an administrative committee
appointed by the Company's Chief Executive Officer.
CONTRIBUTIONS
Under the provisions of the Plan, a defined contribution plan, the employer
may make discretionary contributions to the Plan, generally in the form of
newly issued shares of the Company's common stock. Employer contributions
are allocated to each participant's account based on the proportion that
each participant's compensation bears to total compensation, subject to
specified limitations. Voluntary contributions by employees are not
permitted. Any forfeitures resulting from the termination of participants
not fully vested are allocated among the accounts of persons who are
participants on the last day of the Plan's fiscal year, or whose
participation in the Plan terminated during the year because of normal
retirement (as defined in the Plan), death, total disability or layoff, in
the proportion that each such person's compensation taken into account
under the Plan bears to such compensation of all those persons for the
fiscal year.
ELIGIBILITY, VESTING AND BENEFITS
Each eligible employee becomes a participant in the Plan on the first day
after completing six months of service. Each participant's account under
the Plan includes the Company's contributions and the participant's
allocated share of income, losses, and the unrealized appreciation or
depreciation of Plan investments. A participant becomes fully vested after
completing seven years of credited service or in the event of death or
termination from employment as a result of permanent disability, or upon
reaching the age of 65. Participants terminating for any other reason who
have less than seven years of service are credited with amounts vested
under the seven-year vesting schedule in which participants' accounts are
vested at a rate of 10% per year for each of the first four years, and 20%
for each of the next three years. Vested benefits are distributable in the
form of common stock to the participants upon termination of employment in
a lump-sum payment, except, at the election of the participant, payment may
be deferred until the participant reaches age 70 1/2 if the vested account
balance exceeds $3,500. In addition, eligible active participants may elect
a sale of common stock by the Plan and a transfer of the proceeds from the
sale to the Company's Thrift Plan.
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO THE FINANCIAL STATEMENTS
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1. DESCRIPTION OF THE PLAN (CONTINUED)
TAX STATUS
The Company has received a determination letter from the Internal Revenue
Service that the Plan, as established on November 27, 1980 and amended and
restated effective January 1, 1994, is qualified under Internal Revenue
Code Section 401(a), and the related trust is exempt from taxation under
Section 501(a).
DISPOSITION OF FUNDS UPON TERMINATION OF THE PLAN
While the Company has not expressed any intent to terminate the Plan, it
may do so at its sole discretion. In the event of termination of the Plan,
participants' accounts become fully vested and nonforfeitable and the
assets of all participants' accounts will be distributed to or for the
benefit of the participants in accordance with the Plan's provisions.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are prepared on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments have been recorded at market values as determined by the quoted
closing market price reported on the New York Stock Exchange at December
31, 1997 and 1996.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
EXPENSES OF THE PLAN
Certain administrative functions are performed by officers or employees of
the Company or its subsidiaries. No such officer or employee receives
compensation from the Plan. Administrative expenses are paid directly by
the Company at its discretion.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and expense during
the reporting period. Actual results could differ from those estimates.
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO THE FINANCIAL STATEMENTS
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3. INVESTMENTS
The Plan's assets held for investment purposes at December 31 are presented
in the following table:
1997 1996
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Oregon Steel Mills, Inc. common shares:
Number of shares 1,867,761 2,030,773
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Cost $20,787,798 $20,897,500
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Market* $39,806,656 $34,015,448
Cash and cash equivalents 2,502 15,190
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Total assets held for investment
purposes $39,809,158 $34,030,638
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*Represents greater than 5% of the Plan's net assets available for
benefits.
4. TRANSACTIONS WITH PARTIES-IN-INTEREST
<TABLE>
Transactions with Oregon Steel Mills, Inc. during the year ended
December 31, 1997 are as follows:
<CAPTION>
CURRENT NET GAIN
COST OF VALUE ON EACH
ASSET OF ASSET TRANSACTION
------------- ------------- ------------
<S> <C> <C> <C>
Dividends received from
Oregon Steel Mills, Inc. $ - $ 1,103,699 $ -
Pass-through of dividends to participants - 1,103,699 -
Contribution from Oregon Steel Mills, Inc. 1,500,911 1,500,911 -
Purchase of 847 shares, par value $.01 14,467 14,467 -
144,347 shares, par value $0.01, distributed
to particpants 109,401 3,249,046 3,141,163
Sale of 19,512 shares, par value $0.01, and
transfer of cash to Oregon Steel Mills, Inc.
Thrift Plan 14,788 524,345 509,557
</TABLE>
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
SCHEDULE 1
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
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<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, MARKET
LESSOR OR SIMILAR PARTY PAR, OR MATURITY VALUE COST VALUE
- ------------------------------------- ----------------------------- ------------ -----------
<S> <C> <C> <C>
Oregon Steel Mills, Inc.* Common stock, $.01 par value $20,787,798 $39,806,656
Cash 2,502 2,502
</TABLE>
*Represents party-in-interest investment.
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<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
SCHEDULE 2
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
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Transactions of an amount in excess of 5% of the current value of the Plan's
assets as of the beginning of the year, reportable under the provisions of the
Employee Retirement Income Security Act of 1974, were as follows:
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON
PURCHASE SELLING COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
- ----------------------------- ----------------------- ------------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Oregon Steel Mills, Inc. 144,390 shares, par
value
$0.01, distributed to
participants $ - $ - $109,401 $3,249,046 $3,141,163
Oregon Steel Mills, Inc. Sale of 19,512 shares,
par value
$0.01, and transfer of
cash to Oregon Steel
Mills, Inc. Thrift
Plan 524,345 14,788 524,345 509,557
</TABLE>
-8-
<PAGE>
OREGON STEEL MILLS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
SCHEDULE 3
LINE 27E - SCHEDULE OF NON-EXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
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Party-in-interest transactions reportable under the provisions of the Employee
Retirement Income Security Act of 1974 for the year ended December 31, 1997 were
as follows:
<TABLE>
<CAPTION>
DESCRIPTION OF
RELATIONSHIP TRANSACTION INCLUDING
TO PLAN, MATURITY DATE, RATE
IDENTITY OF EMPLOYER OR OTHER OF INTEREST, COLLATERAL PURCHASE SELLING LEASE
PARTY INVOLVED PARTY-IN-INTEREST PAR OR MATURITY VALUE PRICE PRICE RENTAL
- ---------------- ----------------- ----------------------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
Oregon Steel Sponsor Company Dividends received from $ - $ - $ -
Mills, Inc. Oregon Steel Mills, Inc.
Oregon Steel Sponsor Company Pass-through of dividends
Mills, Inc. to participants
Oregon Steel Sponsor Company Contribution from
Mills, Inc. Oregon Steel Mills, Inc.
Oregon Steel Sponsor Company 847 shares, par value
Mills, Inc. $0.01, purchased
</TABLE>
EXPENSES
INCURRED IN NET GAIN
CONNECTION CURRENT OR (LOSS)
WITH COST OF VALUE ON EACH
TRANSACTION ASSET OF ASSET TRANSACTION
- ------------ ----------- ---------- --------------
$ - $ - $1,103,699 $ -
- 1,103,699 -
1,500,911 1,500,911 -
14,467 14,467 -
-9-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securitiies Exchange Act of 1934,
the trustees have duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 17, 1998
OREGON STEEL MILLS, INC.
By /s/ L. Ray Adams
Vice President of Finance and
Chief Financial Officer
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EXHIBIT 23.0
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-26739) of Oregon Steel Mills, Inc. of our report
dated June 1, 1998 relating to the Oregon Steel Mills, Inc. Employee Stock
Ownership Plan which appears on page 1 of this Form 11-K/A.
/s/PRICEWATERHOUSECOOPERS LLP
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PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
September 17, 1998
