<PAGE>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.20549
Amendment No. 2
FORM 10-K/A
(X) Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 26, 1993 or
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
-------------------------------
Commission file number 0-14727
ACME METALS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 36-3802419
(State of (I.R.S.
incorporation) Employer
Identification
No.)
13500 SOUTH PERRY AVE., RIVERDALE, ILLINOIS 60627-1182
(Address of principal executive offices) (Zip Code)
(708) 849-2500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of each Class
---------------------------------------
Common stock, par value $1.00 per share
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the
past 90 days. Yes X No __
The aggregate market value as of February 11, 1994 of common stock, $1 par
value, held by non-affiliates of the Registrant was: $136,403,555
Number of shares of Common Stock outstanding as of February 11, 1994, 5,477,923
The following documents are partially incorporated into this report by
reference:
(1) Proxy Statement filed in connection with the Annual Meeting of
Shareholders scheduled April 28, 1994 partially incorporated by reference
into Part III, Items 10, 11, 12 and 13.
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<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to Item 8 is submitted in a separate section of this Annual
Report on Form 10-K. See the audited Consolidated Financial Statements and
Schedules of The Company Metals Incorporated attached hereto and listed in the
index on page 32 of this report.
-25-
<PAGE>
ACME METALS INCORPORATED
Form 10-K - Item 8 and Items 14 (a) (1) and 14 (a) (2)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
The following Consolidated Financial Statements of Acme Metals
Incorporated and the related Report of Independent Accountants are included in
Item 8 and Item 14 (a) (1):
<TABLE>
<CAPTION>
Page in
this
Form 10-K
-----------
<S> <C>
Report of Independent Accountants 33
Consolidated Statements of Operations for the fiscal years ended
December 26, 1993 December 27, 1992 and December 29, 1991 34
Consolidated Balance Sheets at December 26, 1993, December 27, 1992 and
December 29, 1991 35
Consolidated Statements of Cash Flows for the fiscal years ended
December 26, 1993, December 27, 1992 and December 29, 1991 36
Consolidated Statements of Changes in Shareholders' Equity for the
fiscal years ended December 26, 1993, December 27, 1992 and
December 29, 1991 37
Notes to Consolidated Financial Statements 38
</TABLE>
The following Consolidated Financial Statement Schedules of Acme Metals
Incorporated are included in Item 14 (a) (2):
<TABLE>
<S> <C>
Quarterly Results (Unaudited) 51
Schedule V - Property, Plant and Equipment 52
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment 53
Schedule VIII - Valuation and Qualifying Accounts and Reserves 54
Schedule X - Supplementary Income Statement Information 54
</TABLE>
All other schedules have been omitted because they are not applicable, or
not required, or because the required information is shown in the consolidated
financial statements or notes thereto.
-32-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Acme Metals Incorporated
In our opinion, the accompanying consolidated financial statements listed in the
index appearing on page 32 present fairly, in all material respects, the
financial position of Acme Metals Incorporated and its subsidiaries at December
26, 1993 and December 27, 1992, and the results of their operations and their
cash flows for each of the three years in the period ended December 26, 1993, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial 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.
As discussed in the Notes to Consolidated Financial Statements, Acme Metals
Incorporated changed its method of accounting for postretirement benefits other
than pensions and income taxes in 1992.
/s/ Price Waterhouse
March 21, 1994
Chicago, Illinois
-33-
<PAGE>
ACME METALS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Years Ended
-------------------------------------------
December 26, December 27, December 29,
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
NET SALES $ 457,406 $ 391,562 $ 376,951
COSTS AND EXPENSES:
Cost of products sold 397,526 347,624 335,503
Depreciation expense 14,657 14,392 13,700
------------- ------------- -------------
Gross profit 45,223 29,546 27,748
Selling and administrative expense 30,633 28,901 29,219
Restructuring charge 2,700
Nonrecurring charge 1,925
------------- ------------- -------------
Operating income (loss) 12,665 (2,055) (1,471)
NON-OPERATING INCOME (EXPENSE):
Interest expense (5,384) (5,569) (5,533)
Interest income 1,571 1,700 1,322
Unusual income item 1,210 1,047 1,241
Other - net 370 355 1,391
------------- ------------- -------------
Income (loss) before income taxes and cumulative effect of changes
in accounting principles 10,432 (4,522) (3,050)
Income tax provision (credit) 4,173 (1,673) (732)
------------- ------------- -------------
6,259 (2,849) (2,318)
Cumulative effect of changes in accounting principles:
Retiree health care and life insurance benefits, net of taxes (42,246)
Income taxes (8,077)
-------------
(50,323)
------------- ------------- -------------
Net income (loss) $ 6,259 $ (53,172) $ (2,318)
------------- ------------- -------------
------------- ------------- -------------
PER SHARE:
Income (loss) before cumulative effect of changes in accounting
principles $ 1.15 $ (0.53 ) $ (0.43 )
Cumulative effect of changes in accounting principles:
Retiree health care and life insurance benefits, net of
taxes (7.82 )
Income taxes (1.50 )
------------- ------------- -------------
Net income (loss) $ 1.15 $ (9.85 ) $ (0.43 )
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
-34-
<PAGE>
ACME METALS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
December 26, December 27,
1993 1992
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 50,444 $ 49,224
Receivables, less allowances of $1,155 in 1993 and $1,081 in 1992 58,479 47,091
Inventories 47,867 39,488
Deferred income taxes 12,337 11,754
Other current assets 1,267 1,303
------------- -------------
Total current assets 170,394 148,860
------------- -------------
INVESTMENTS AND OTHER ASSETS:
Investments in associated companies 14,701 14,105
Other assets 13,389 7,197
------------- -------------
Deferred income taxes 19,846 9,851
------------- -------------
Total investments and other assets 47,936 31,153
------------- -------------
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost 408,556 405,684
Accumulated depreciation (293,017) (284,995)
------------- -------------
Total property, plant and equipment 115,539 120,689
------------- -------------
$ 333,869 $ 300,702
------------- -------------
------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 32,800 $ 25,985
Accrued expenses 34,089 28,641
Income taxes payable 3,641 1,299
Current maturities of long-term debt 6,667 3,500
------------- -------------
Total current liabilities 77,197 59,425
------------- -------------
LONG-TERM LIABILITIES:
Long-term debt 49,333 56,000
Other long-term liabilities 10,543 7,951
Postretirement benefits other than pensions 82,630 80,959
Retirement benefit plans 30,963 7,072
------------- -------------
Total long-term liabilities 173,469 151,982
------------- -------------
Commitments and contingencies (see note titled COMMITMENTS AND
CONTINGENCIES)
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value, 2,000,000 shares authorized, no
shares issued
Common stock, $1 par value, 20,000,000 shares authorized, 5,406,387
and 5,357,870 shares issued in 1993 and 1992, respectively 5,406 5,358
Additional paid-in capital 48,344 47,679
Retained earnings 50,748 44,489
Minimum pension liability adjustment (21,295) (8,231)
------------- -------------
Total shareholders' equity 83,203 89,295
------------- -------------
$ 333,869 $ 300,702
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
-35-
<PAGE>
ACME METALS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Years Ended
-------------------------------------------
December 26, December 27, December 29,
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 6,259 $ (53,172) $ (2,318)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation 15,234 14,705 14,224
Deferred income taxes (1,629) (1,848) 1,049
Cumulative effect of changes in accounting 50,323
Gain on sale of assets (1,047)
Nonrecurring charge 1,925
Investment in associated company (596)
CHANGE IN CURRENT ASSETS AND LIABILITIES:
Receivables (11,388) 1,403 741
Inventories (8,379) 1,698 7,922
Accounts payable 6,815 4,843 (2,242)
Other current accounts 7,826 3,170 (2,475)
Other, net (26) 3,943 4,820
------------- ------------- -------------
Net cash provided by operating activities 16,041 24,018 21,721
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (11,749) (7,557) (10,611)
Proceeds from sales of assets 995
------------- ------------- -------------
Net cash used for investing activities (11,749) (6,562) (10,611)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt (3,500)
Repurchase of common stock (98) (79) (462)
Other 526 113 19
------------- ------------- -------------
Net cash provided by (used for) financing activities (3,072) 34 (443)
------------- ------------- -------------
Net increase in cash and cash equivalents 1,220 17,490 10,667
Cash and cash equivalents at beginning of year 49,224 31,734 21,067
------------- ------------- -------------
Cash and cash equivalents at end of year $ 50,444 $ 49,224 $ 31,734
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
-36-
<PAGE>
ACME METALS INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
Common Additional Minimum
stock, $1 paid-in Retained Pension Treasury
par value capital earnings Liability stock
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE - DECEMBER 30, 1990 $ 5,948 $ 46,813 $ 115,281 $ 0 $ (15,312)
Net loss (2,318)
Stock plans - issuance of shares 61 646
Tax benefit arising from stock plan transactions 7
Purchase of common stock for treasury (462)
----------- ----------- ----------- ---------- ----------
BALANCE - DECEMBER 29, 1991 6,009 47,466 112,963 0 (15,774)
----------- ----------- ----------- ---------- ----------
Net loss (53,172)
Stock plans - issuance of shares 7 191
Tax benefit arising from stock plan transactions 22
Purchase of common stock for treasury (79)
Redemption of stock rights (107)
Retirement of treasury stock (658) (15,195) 15,853
Minimum pension liability (8,231)
----------- ----------- ----------- ---------- ----------
BALANCE - DECEMBER 27, 1992 5,358 47,679 44,489 (8,231) 0
----------- ----------- ----------- ---------- ----------
Net income 6,259
Stock plans - issuance of shares 48 635
Tax benefit arising from stock plan transactions 30
Minimum pension liability (13,064)
----------- ----------- ----------- ---------- ----------
BALANCE - DECEMBER 26, 1993 $ 5,406 $ 48,344 $ 50,748 $ (21,295) $ 0
----------- ----------- ----------- ---------- ----------
----------- ----------- ----------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of this financial statement.
-37-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Acme Metals
Incorporated (the Company) and its majority-owned subsidiaries. Investments in
mining ventures are accounted for by the equity method. All intercompany
transactions have been eliminated.
The Company's fiscal year ends on the last Sunday in December.
INVENTORIES
Inventories are stated at the lower of cost or market. The primary method used
to determine inventory costs is the last-in, first-out (LIFO) method.
PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION
Property, plant and equipment are stated at cost. Depreciation of plant and
equipment is computed principally on a straight-line basis over the estimated
useful lives of the assets. Expenditures for maintenance, repairs and minor
renewals and betterments are charged to expense as incurred. Furnace relines and
major renewals and betterments are capitalized.
Upon disposition of property, plant and equipment, the cost and related
accumulated depreciation are removed from the accounts, and the resulting gain
or loss is recognized.
The Company from time to time reviews the carrying value of certain of its
assets and recognizes impairments when appropriate.
RETIREMENT BENEFIT PLANS
Pension costs include service cost, interest cost, return on plan assets and
amortization of the unrecognized initial net asset. The Company's policy is to
fund not less than the minimum funding required under ERISA.
The Company has postretirement health care and life insurance plans. The
provision for postretirement costs in 1991 includes current costs, amortization
of prior service costs over periods not exceeding twenty-five years and interest
on the accrued liability. The provisions for postretirement costs in 1993 and
1992 were determined pursuant to the provisions of Financial Accounting
Standards Board Statement (FAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." Under this statement, the annual
expense represents a combination of interest and service cost provisions of the
annual accrual. The postretirement benefits are not funded.
INCOME TAXES
The credit for deferred income taxes in 1993 and 1992 were determined pursuant
to the provisions of FAS No. 109, "Accounting for Income Taxes." Under this
statement, the provision for deferred income taxes represents the tax effect of
temporary differences between the financial reporting basis and the tax basis of
the Company's assets and liabilities. In 1991, the provision for deferred income
taxes represents the tax effect of differences in the timing of income and
expense recognition for tax and financial reporting purposes.
PER SHARE DATA
Amounts per common share are based on the weighted average number of common and
dilutive common equivalent shares outstanding during the year: 5,439,784 in
1993, 5,396,311 in 1992 and 5,373,564 in 1991.
CONSOLIDATED STATEMENT OF CASH FLOWS
For purposes of the Consolidated Statement of Cash Flows, the Company considers
all highly liquid investments purchased with a maturity of three months or less
to be cash equivalents.
-38-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current year
presentation.
RESTRUCTURING CHARGE:
During 1992, the Company substantially completed its program to reduce its
salaried work force by 10% which was completed during 1993. Voluntary retirement
offers which included an increased pension benefit and extra vacation pay, were
extended to a number of employees for a limited period of time. Other employees
were terminated with severance pay. The pre-tax reserve of $2.7 million
established by the Company included $1.1 million related to the increased
pension benefits and acceleration of the payment of pension benefits, a special
postretirement termination charge of $1.3 million, a postretirement plan
curtailment gain of $0.4 million and $0.7 million related to increased vacation
benefits, severance pay and a reserve for contingencies related to the program.
NONRECURRING CHARGE:
The Company recorded a $1.9 million non-recurring charge in 1993 including $1.3
million in connection with a decision made during the year to permanently idle
Acme Steel s No. 3 Hot Strip Mill and Billet Mill; a $0.6 million charge to
close Acme Packaging's Pittsburg-East facility in California; and, the
elimination of a strapping line at its New Britain, Connecticut facility
following a determination made during the year to consolidate production
facilities and eliminate unprofitable lines.
UNUSUAL INCOME ITEM:
In 1993, the Company recorded a benefit in connection with its investment in
Wabush Iron Company (WabIron). As a result of the finalization of a plan of
reorganization for LTV Steel Company, a former participant in WabIron, Acme was
awarded $1.2 million (market value) of LTV securities in a settlement of a
bankruptcy claim filed by all of the participants in the Wabush Mines Project
joint venture.
During 1992, the Company sold all of its interests in certain coal producing
property located in West Virginia. This transaction added approximately $1
million of pre-tax income to 1992 results.
In 1991, the Company recorded a benefit from an unusual item related to the
assignment of it's rights in claims allowed in the LTV Steel Company, Inc.
bankruptcy to a third party. This transaction added $1.2 million of pre-tax
income to 1991 results.
INVENTORIES:
Inventories are summarized as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Raw materials $ 6,201 $ 4,594
Semi-finished and finished products 32,364 26,540
Supplies 9,302 8,354
--------- ---------
$ 47,867 $ 39,488
--------- ---------
--------- ---------
</TABLE>
On December 26, 1993 and December 27, 1992, inventories valued on the LIFO
method were less than the current costs of such inventories by $57.4 million and
$55.4 million, respectively.
In 1992, inventory quantities decreased from the prior year, the effect of which
decreased cost of products sold and net loss by $0.4 million and $0.2 million,
respectively.
-39-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
1993 1992
----------- -----------
(in thousands)
<S> <C> <C>
Land $ 3,786 $ 3,786
Buildings 49,578 48,530
Equipment 352,306 349,494
Construction in progress 2,886 3,874
----------- -----------
408,556 405,684
Less accumulated depreciation (293,017) (284,995)
----------- -----------
$ 115,539 $ 120,689
----------- -----------
----------- -----------
</TABLE>
The difference between depreciation expense presented in the Consolidated
Statement of Cash Flows and the Consolidated Statement of Operations represents
that portion of depreciation expense that is classified in selling and
administrative expense on the Consolidated Statement of Operations.
RETIREMENT BENEFIT PLANS:
The Company has various retirement benefit plans covering substantially all
salaried and hourly employees. Certain salaried employees with one full calendar
quarter of service are eligible to participate in the Company's defined
contribution plan and employee stock ownership plan (ESOP). Company
contributions to the defined contribution plan and employee stock ownership plan
are based upon 7.5% and 3.5% (the ESOP contribution was reduced from 6.5% to
3.5% in the second quarter of 1993), respectively, of eligible compensation.
Amounts charged to operations under these plans were $3.4 million in 1993, $4.1
million in 1992 and $3.6 million in 1991.
Salaried employees who joined the Company prior to December 31, 1981 and certain
hourly employees participate in defined benefit retirement plans which provide
benefits based upon either years of service and final average pay or fixed
amounts for each year of service.
The net defined benefit pension credit (expense) included the following
components:
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
(in thousands)
<S> <C> <C> <C>
Service cost $ (1,852) $ (1,979) $ (1,984)
Interest cost on projected benefit obligation (14,526) (14,231) (13,923)
Actual return on plan assets 16,094 9,715 28,085
Net amortization and deferral 7,662 (12,157)
---------- ---------- ----------
Net pension credit (cost) $ (284) $ 1,167 $ 21
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Pension plan curtailment losses of $1.1 million are included in the 1992
restructuring charge.
Actuarial assumptions used to calculate the defined benefit pension credits
(costs) were:
<TABLE>
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
Weighted average discount rate 8.5% 8.5% 9%
Increase in future compensation levels 5% 5% 5%
Expected rate of return on plan assets 9.75% 9.75% 9.75%
</TABLE>
-40-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The following table sets forth the funded status of the Company's defined
benefit retirement plans and amounts recognized in the balance sheet.
<TABLE>
<CAPTION>
1993 1992
-------------------------- --------------------------
Underfunded Overfunded Underfunded Overfunded
Plans Plans Plans Plans
------------- ----------- ------------- -----------
(in thousands)
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
vested benefits of $182,993 in 1993 and
$155,815 in 1992 $ 189,939 $ 9,648 $ 138,372 $ 33,635
Effect of increase in future compensation
levels 4,419 709 4,525 725
------------- ----------- ------------- -----------
Projected benefit obligation for service
rendered to date 194,358 10,357 142,897 34,360
Plan assets at fair value, primarily U.S.
government bonds and notes and common stock of
publicly traded companies 158,975 9,860 131,300 37,258
Unrecognized net loss from past experience
different from that assumed and effects of
changes in assumptions 51,465 2,461 29,367 4,503
Prior service cost not yet recognized in net
periodic pension cost 5,539 1,440 192
Unrecognized net asset at December 30, 1985
being recognized over 15 years (12,879) (604) (11,773) (3,637)
Minimum pension liability adjustment (39,705) (14,509)
------------- ----------- ------------- -----------
Prepaid (accrued) pension cost $ (30,963) $ 1,360 $ (7,072) $ 3,956
------------- ----------- ------------- -----------
------------- ----------- ------------- -----------
</TABLE>
In accordance with FAS No. 87, the Company has recorded an adjustment, as shown
in the table above, to recognize a minimum pension liability relating to certain
under-funded pension plans. The additional $25.2 million adjustment arose at the
end of 1993 primarily as a result of a lowering of the discount rate to 7.5
percent from 8.5 percent. Accordingly, for pension plans with accumulated
benefits in excess of the fair value of plan assets at December 26, 1993, the
accompanying consolidated balance sheet includes an additional long-term pension
liability of $40.1 million, a long-term intangible asset of $5.8 million and a
charge to shareholders' equity of $21.3 million, net of a deferred tax benefit,
representing the excess of the additional long-term liability over unrecognized
prior service cost.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS:
The Company and its subsidiaries sponsor several unfunded defined benefit
postretirement plans that provide medical, dental, and life insurance for
retirees and eligible dependents.
In 1993 and 1992 the cost for all plans, calculated pursuant to FAS No. 106,
"Employers Accounting for Postretirement Benefits Other Than Pensions" amounted
to $7.9 million and $7.8 million, respectively. The cost in 1991, which was
calculated under the previous accounting method totalled $6.4 million.
-41-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The net periodic postretirement benefit cost for 1993 and 1992, net of retiree
contributions of approximately 10% of costs, included the following components:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Service cost - benefits attributed to service during the period $ 1,185 $ 1,109
Interest cost on accumulated postretirement benefit obligation 6,743 6,708
Net amortization and deferral (64)
--------- ---------
Net periodic postretirement benefit cost $ 7,864 $ 7,817
--------- ---------
--------- ---------
</TABLE>
The following table sets forth the plans' combined status at December 26, 1993
and December 27, 1992:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 55,687 $ 57,685
Fully eligible active plan participants 9,675 6,751
Other active plan participants 25,619 20,983
--------- ---------
90,981 85,419
Unrecognized net gain and prior service cost (3,036) (10)
--------- ---------
Accrued postretirement benefit cost $ 87,945 $ 85,409
--------- ---------
--------- ---------
</TABLE>
The accrued postretirement obligation was determined by application of the terms
of medical, dental, and life insurance plans, together with relevant actuarial
assumptions and health care cost trend rates projected at annual rates ranging
ratably from 12 percent in 1992 to 5 percent through 1999. The effect of a 1
percent annual increase in these assumed cost trend rates would increase the
accumulated postretirement benefit obligation by approximately $10.9 million;
the annual service costs would increase by approximately $1.2 million. The
obligation for postretirement benefits was remeasured as of January 1, 1994
using a 7.5% discount rate, as compared to the 8.5% discount rate used for the
January 1, 1993 valuation.
The reduction in the discount rate contributed to a net increase in the
obligations of approximately $5 million. As the measurement of net periodic
postretirement benefits cost is based on beginning of the year assumptions, the
higher revalued obligation at the end of fiscal 1993 did not have any impact on
the expense recorded for 1993.
In accordance with the new labor agreement with the hourly workers effective
January 1, 1994, individuals retiring on or after January 1, 1993 will be
covered by a new managed care medical plan (PPO). This new plan is expected to
help control future medical costs to be paid by the Company.
POSTEMPLOYMENT BENEFITS:
In November 1992, the Financial Accounting Standards Board issued Statement No.
112, "Employers' Accounting for Postemployment Benefits," which requires accrual
basis accounting for Postemployment benefits, and must be adopted not later than
fiscal 1994. Postemployment benefits include all benefits paid after employment
but before retirement, such as layoff and disability benefits. The Company has
not yet determined the impact, if any, or the timing of this change on the
financial statements.
-42-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
ACCRUED EXPENSES:
Included in the Consolidated Balance Sheet caption Accrued expenses are the
following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Accrued salaries and wages $ 16,235 $ 11,177
Accrued postretirement health care and life insurance 5,328 4,450
Accrued taxes other than income taxes 4,970 4,736
Other current liabilities 7,556 8,278
--------- ---------
$ 34,089 $ 28,641
--------- ---------
--------- ---------
</TABLE>
INVESTMENTS IN ASSOCIATED COMPANIES
The Company has a 31.7 percent interest in an iron ore mining venture. In 1993,
1992 and 1991, the Company made iron ore purchases of $18.3 million, $21.7
million, and $26.8 million, respectively from the venture. At December 26, 1993,
$4.2 million was owed to the venture for iron ore purchases; amounts owed to the
venture for such ore purchases were $3.6 million at December 27, 1992.
The Company has a 37% interest in Olga Coal Company. In 1987, Olga Coal Company
filed for protection under Chapter 11 of the U.S. Bankruptcy Act and the coal
mining operation was idled. The coal mining investment is carried at no value in
the Consolidated Balance Sheet.
INCOME TAXES:
The provision (credit) for taxes consisted of the following:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(in thousands)
<S> <C> <C> <C>
Taxes on income:
Current:
Federal $ 5,399 $ 62 $ (1,781)
State 403 113 --
--------- --------- ---------
5,802 175 (1,781)
Deferred (1,629) (1,848) 1,049
--------- --------- ---------
$ 4,173 $ (1,673) $ (732)
--------- --------- ---------
--------- --------- ---------
</TABLE>
In 1992, the Company adopted FAS No. 109, "Accounting for Income Taxes," and
reported the cumulative effect of the change in the method of accounting for
income taxes as of the beginning of the 1992 fiscal year in the consolidated
statement of operations. The cumulative effect of the change in accounting for
income taxes increased the 1992 net loss by $8.1 million or $1.50 per share and
was reported separately in the consolidated statement of operations for the year
ended December 27, 1992. The change in accounting for income taxes increased the
credit for taxes in 1992 by $0.9 million.
-43-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Significant components of the Company's deferred tax liabilities and assets at
December 26, 1993 and December 27, 1992 is summarized below.
<TABLE>
<CAPTION>
Liabilities 1993 1992
- ----------------------------------------------------------------------------- --------- ---------
(Expressed in
thousands)
<S> <C> <C>
Property, plant and equipment $ 21,319 $ 21,535
--------- ---------
Gross deferred tax liabilities 21,319 21,535
--------- ---------
<CAPTION>
Assets
- -----------------------------------------------------------------------------
<S> <C> <C>
Postretirement benefits other than pensions 34,381 32,222
Inventory 4,313 3,185
Reserves 670 426
Pensions 8,620 565
Other employee benefits 2,712 2,039
Other assets 910 736
Miscellaneous 310 236
Alternative minimum tax credits 1,496 3,005
Other 90 726
--------- ---------
Gross deferred tax assets 53,502 43,140
--------- ---------
Net deferred tax asset $ 32,183 $ 21,605
--------- ---------
--------- ---------
</TABLE>
The Company believes it is more likely than not to realize the net deferred tax
asset and accordingly no valuation allowance has been provided. This conclusion
is based on, (i) reversing deductible temporary differences (excluding
postretirement amounts) being offset by reversing taxable temporary differences,
(ii) the extremely long period that is available to realize the future tax
benefits associated with the postretirement related deductible temporary
differences and, (iii) the Company's expected future profitability.
In 1993 and 1992, the change in the deferred income tax liability primarily
represents the effect of changes in the amounts of temporary differences from
December 27, 1992 to December 26, 1993 and December 29, 1991 to December 27,
1992, respectively. For 1991, the deferred income tax liability results from
timing differences, created principally by the use of accelerated tax
depreciation, in the recognition of income and expense for tax and financial
reporting purposes.
The Company's federal tax liability is the greater of its regular tax or
alternative minimum tax. At December 26, 1993, the Company had available
alternative minimum tax credits of $1.5 million. This amount can be carried
forward indefinitely and utilized as a tax credit to reduce, to a certain
extent, regular tax liabilities of future years.
-44-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The effective income tax rates for 1993, 1992 and 1991 are reconciled to the
federal statutory tax rate in the following table:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ------------ ------------
<S> <C> <C> <C>
Statutory federal income tax rate 34.0% (34.0)% (34.0)%
Change in tax rate due to:
Federal surtax 1.9 -- --
Depreciation -- -- 5.1
Reorganization and restructuring costs -- 1.7 3.9
State taxes - net of federal tax effect 4.7 .8 (2.0)
Reserves no longer required -- (6.4) --
Penalties .6 2.3 --
Other - net (1.2) (1.4) 3.0
--- ----- -----
40.0% (37.0)% (24.0)%
--- ----- -----
--- ----- -----
</TABLE>
There are currently certain federal tax matters that, upon resolution, could
enable the Company to carryback its entire 1986 net operating loss.
In 1993, cash flows were reduced by $4.5 million resulting from income tax
payments of $5.0 million and income tax refunds of $0.5 million in connection
with net operating loss carryback claims. In 1992, cash flows were increased by
$4.8 million resulting from $6.0 million of income tax refunds in connection
with net operating loss carryback claims and income tax payments of $1.2
million. No cash payments for income taxes were made in 1991.
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT:
The Company's long-term debt at December 26, 1993 and December 27, 1992 is
summarized as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Senior notes, 9.35%, due 1994-1999 $ 50,000 $ 50,000
Note payable, 6.5% to 6.75%, due 1998-2008 6,000 9,500
--------- ---------
56,000 59,500
Less current portion 6,667 3,500
--------- ---------
$ 49,333 $ 56,000
--------- ---------
--------- ---------
</TABLE>
-45-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The maturities during the five years ending December 27, 1998 are $6.7
million in 1994 and 1995, $16.7 million in 1996, $6.7 million in 1997 and $7.2
million in 1998. Cash flows from operating activities were reduced by cash paid
for interest on debt by $5.2 million in 1993 and $5.6 million in 1992 and 1991.
The Company has a revolving credit agreement with a group of banks which
provides aggregate commitments of $60 million. At December 26, 1993 and December
27, 1992, no amounts were outstanding under the credit agreement. The Company
pays an annual commitment fee ranging from three-eighths to one-half percent on
the unused portion of the credit line. The credit agreement includes a covenant
that restricts the payment of dividends. At December 26, 1993, retained earnings
available for the payment of dividends amounted to $10 million.
FAIR VALUE OF FINANCIAL INSTRUMENTS
CASH AND SHORT-TERM INVESTMENTS
The carrying amount approximates fair value because of the short maturity
of those instruments.
LONG-TERM DEBT
The fair value of the Company's long-term debt is estimated by calculating
the present value of the remaining interest and principal payments on the debt
to maturity. The present value computation uses a discount rate equal to the
prime rate at the end of the reporting period plus or minus the spread between
the prime rate and the rate negotiated on the debt at the inception of the loan.
<TABLE>
<CAPTION>
1993 1992
---------------------------- ----------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 50,444 $ 50,444 $ 49,224 $ 49,224
Long-term debt
- Senior notes, 9.35%, due 1994-1999 50,000 56,130 50,000 57,992
- Note payable, 6.50% to 6.75%, due 1998-2008 6,000 7,021 9,500 10,524
------------- ------------- ------------- -------------
$ 106,444 $ 113,595 $ 108,724 $ 117,740
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
COMMON STOCK:
The Company has a stock incentive program which provides, among other
benefits, for the granting of stock options and stock awards to officers and key
employees. Stock options for the Company's common stock are granted at prices
not less than the market price at date of grant and no option may be exercised
more than ten years from the grant date.
-46-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Information regarding stock options is summarized below:
<TABLE>
<CAPTION>
Option Per share
Shares option price
--------- ---------------------
<S> <C> <C>
OUTSTANDING AT DECEMBER 30, 1990 382,475 $ 8.375 - $24.25
Granted 198,500 $13.563
Exercised (2,250) $ 8.375
Canceled (18,700) $ 8.375 - $24.25
---------
OUTSTANDING AT DECEMBER 29, 1991 560,025 $ 8.375 - $24.25
Granted 58,000 $18.75
Exercised (10,100) $ 8.375 - $15.625
Canceled (30,950) $13.563 - $24.25
---------
OUTSTANDING AT DECEMBER 27, 1992 576,975
Granted 88,500 $14.50
Exercised (39,450) $ 8.375 - $17.00
Canceled (17,675) $13.563 - $24.25
---------
OUTSTANDING AT DECEMBER 26, 1993 608,350
---------
---------
</TABLE>
At December 26, 1993, 490,850 options were exercisable; 447,650 options
were exercisable at December 27, 1992.
Stock awards granted in 1993 totaled 15,400 shares at a value of either
$16.00 or $16.75 per share depending on the grant date. Stock awards granted in
1992 totaled 18,650 shares at a value of either $ 15.00 or $ 18.75 per share
depending on the grant date. Stock awards granted in 1991 totaled 60,900 shares
at a value of either $ 11.75 or $ 13.563 per share depending on the grant date.
COMMITMENTS AND CONTINGENCIES:
The Company's interest in an iron ore mining joint venture requires
payment of its proportionate share of all fixed operating costs, regardless of
the quantity of ore received, plus the variable operating costs of minimum ore
production for the Company's account. Normally, the Company reimburses the joint
venture for these costs through its purchase of ore at the higher of cost or
market prices. During 1993, the Company obtained approximately 56% of its iron
ore needs from the joint venture and purchases during 1993 generally
approximated market prices.
The Company is subject to various federal, state and local environmental
statutes and regulations which provide a comprehensive program for controlling
the release of materials into the environment and require responsible parties to
remediate certain waste disposal sites. In addition, various health and safety
statutes and regulations apply to the work-place environment. Administrative,
civil and criminal penalties may be applicable for failure to comply with these
laws.
These environmental laws and regulations are subject to periodic revision
and modification. The United States Congress, by example, has recently completed
a major overhaul of the federal Clean Air Act which is a major component of the
federal environmental statutes affecting the Company's operations.
From time to time, the Company is also involved in administrative
proceedings involving the issuance, or renewal, of environmental permits
relating to the conduct of its business. The final issuance of these permits
have been resolved on terms satisfactory to the Company; and, in the future, the
Company expects such permits will similarly be resolved on satisfactory terms.
Although management believes it will be required to make further
substantial expenditures for pollution abatement facilities in future years,
because of the continuous revision of these regulatory and
-47-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
statutory requirements, the Company is not able to reasonably estimate the
specific pollution abatement requirements, the amount or timing of such
expenditures to maintain compliance with these environmental laws. While such
expenditures in future years may be substantial, management does not presently
expect they will have a material adverse effect on the Company's future ability
to compete within its markets.
In those cases where the Company has been identified as a Potentially
Responsible Party ("PRP") or is otherwise made aware of a possible exposure to
incur costs associated with an environmental matter, management determines (i)
whether, in fact, the Company has been properly named or is otherwise obligated,
(ii) the extent to which the Company may be responsible for costs associated
with the site in question, (iii) an assessment as to whether another party may
be responsible under various indemnification agreements the Company is a party
to, and (iv) an estimate, if one can be made, of the costs associated with the
clean-up efforts or settlement costs. It is the Company's policy to make
provisions for environmental clean-up costs at the time that a reasonable
estimate can be made. At December 26, 1993, the Company had recorded reserves of
less than $0.3 million for environmental clean-up matters. While it is not
possible to predict the ultimate costs of resolving environmental related issues
facing the Company, based upon information currently available, they are
currently not expected to have a material effect on the consolidated financial
condition of the Company.
In connection with the spin-off from new Interlake, Acme Steel Company
entered into certain indemnification agreements with new Interlake. As discussed
in Item 3, Legal Proceedings, significant environmental and tax matters are
subject to indemnification by new Interlake under these agreements. To date
Interlake has met its obligations with respect to all matters covered by these
agreements. The inability of new Interlake to fulfill its obligations, for any
reason, under these indemnification agreements could result in increased future
obligations for the Acme Steel Company.
BUSINESS SEGMENTS:
Commencing in 1993, the Company has elected to present its operations in
two segments, Steel Making and Steel Fabricating. Prior year amounts have been
restated for comparison purposes.
Steel Making operations include the manufacture of sheet, strip and
semifinished steel in low-, mid-, and high-carbon alloy and special grades.
Principal markets include agricultural, automotive, industrial equipment,
industrial fasteners, welded steel tubing, processor and tool manufacturing
industries.
The Steel Fabricating business segment processes and distributes steel
strapping, strapping tools and industrial packaging (Acme Packaging
Corporation), welded steel tube (Alpha Tube Corporation) and auto and light
truck jacks (Universal Tool & Stamping). The Steel Fabricating Segment sells to
a number of markets.
All sales between segments are recorded at current market prices. Income
from operations consists of total sales less operating expenses. Operating
expenses include an allocation of expenses incurred at the Corporate Office that
are considered by the Company to be operating expenses of the segments rather
than general corporate expenses. Income (loss) from operations does not include
other non-operating income or expense, interest income or expense, the
cumulative effect of changes in accounting principles, or income taxes.
Identifiable assets are those that are associated with each business segment.
Corporate assets are principally investments in cash equivalents and deferred
income taxes.
The products and services of the Steel Making and Steel Fabricating
Segments are distributed through their own respective sales organizations which
have sales offices at various locations in the United States. Export sales are
insignificant for the years presented.
-48-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
SEGMENT INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
--------- ------------ ---------
<S> <C> <C> <C>
Sales
Trade:
Steel Making $ 187,750 $ 145,627 $ 140,877
Steel Fabricating 269,656 245,935 236,074
Intersegment:
Steel Making 116,094 114,517 110,184
Steel Fabricating 1,873 1,023 --
Eliminations: (117,967) (115,540) (110,184)
--------- ------------ ---------
Total $ 457,406 $ 391,562 $ 376,951
--------- ------------ ---------
--------- ------------ ---------
Income (Loss) from Operations
Steel Making $ 736(1) $ (9,363)(3) $ (4,110)
Steel Fabricating 11,929(2) 7,308(4) 2,639
--------- ------------ ---------
Total $ 12,665 $ (2,055) $ (1,471)
--------- ------------ ---------
--------- ------------ ---------
Identifiable Assets:
Steel Making $ 203,366 $ 185,743 $ 171,389
Steel Fabricating 108,254 94,514 84,100
Corporate 22,249 20,445 35,247
--------- ------------ ---------
Total $ 333,869 $ 300,702 $ 290,736
--------- ------------ ---------
--------- ------------ ---------
Depreciation:
Steel Making $ 11,285 $ 10,805 $ 10,010
Steel Fabricating 3,842 3,804 4,124
Corporate 107 96 90
--------- ------------ ---------
Total $ 15,234 $ 14,705 $ 14,224
--------- ------------ ---------
--------- ------------ ---------
Capital Expenditures:
Steel Making $ 9,368 $ 5,661 $ 8,402
Steel Fabricating 2,283 1,823 2,027
Corporate 98 73 182
--------- ------------ ---------
Total $ 11,749 $ 7,557 $ 10,611
--------- ------------ ---------
--------- ------------ ---------
<FN>
(1) Includes a $1.3 million write off of Acme Steel Company's No. 3 Hot
Strip Mill and Billet Mill.
(2) Includes a $0.6 million expense to close Acme Packaging s Pittsburg-East
facility in California and the write-off of a strapping line at its New
Britain, Connecticut facility.
(3) Includes a $2.1 million restructuring charge in connection with a 10%
salaried work force reduction plan.
(4) Includes a $0.3 million restructuring charge in connection with a 10%
salaried work force reduction plan.
</TABLE>
-49-
<PAGE>
ACME METALS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
SUBSEQUENT EVENT:
On March 3, 1994, Acme Metals Incorporated (the "Company") agreed to sell an
issue of securities on a private placement basis exclusively in Canada. Within
160 days of the closing of this transaction (expected on March 28, 1994), the
securities will be exchangeable for 5,000,000 common shares of the Company
(5,600,000 common shares if an over-allotment option for the securities is
exercised before closing) subject to the fulfillment of certain conditions.
Conditions include the approval by the Board of Directors of the Company of the
construction of a continuous thin slab caster-hot rolled mill and confirmation
of the availability of debt financing sufficient for such construction.
The securities and the underlying common shares have not been registered under
the Securities Act of 1933 (the "Securities Act") and may not be offered or sold
in the United States or to a U.S. person, as defined in Regulation S under the
Securities Act, absent registration or an applicable exemption from registration
requirements.
-50-
<PAGE>
ACME METALS INCORPORATED
QUARTERLY RESULTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
1993
- ----
Net sales $ 107,863 $ 117,169 $ 111,919 $ 120,455
Gross profit 7,518 11,670 9,206 16,829
Net income (loss) 114 2,056 115 3,974
Net income (loss) per share $ 0.02 $ 0.38 $ 0.02 $ 0.73
- -------------------------------------------------------------------------------------------------------------------
1992
- ----
Net sales $ 98,522 $ 99,993 $ 94,884 $ 98,163
Gross profit 7,967 5,897 6,303 9,379
Net income (loss)(1) (50,144) (1,288) (2,647) 907
Net income (loss) per share(1) $ (9.29) $ (0.24) $ (0.49) $ 0.17
Net income before accounting changes 179 (1,288) (2,647) 907
Net income per share before accounting changes $ 0.03 $ (0.24) $ (0.49) $ 0.17
- -------------------------------------------------------------------------------------------------------------------
1991
- ----
Net sales $ 92,403 $ 91,732 $ 98,545 $ 94,271
Gross profit 6,025 5,642 8,223 7,858
Net income (loss) (1,001) (626) 229 (920)
Net income (loss) per share $ (0.19) $ (0.11) $ 0.04 $ (0.17)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The fourth quarter of 1993 includes a $1.2 million benefit related to Acme's
investment in Wabush Mines, a $1.3 million expense to write-off the Steel
subsidiary's No. 3 Hot Strip Mill and Billet Mill, and $0.6 million of expense
associated with the closure of the Packaging subsidiary's Pittsburg-East
facility in California and the write-off of a strapping line at the Packaging
subsidiary's New Britain, Connecticut facility.
The third quarter of 1992 includes a $3.1 million restructuring charge in
connection with the Company's work force reduction plan.
The fourth quarter of 1992 includes a $1 million gain on the sale of all the
Company's interests in a coal producing property in West Virginia, and a
postretirement plan curtailment gain of $0.4 million related to the
restructuring charge was included in fourth quarter results.
The second quarter of 1991 includes an unusual item related to the assignment of
Acme's rights in claims allowed in the LTV Steel Company, Inc. bankruptcy to a
third party which added $1.2 million to pre-tax income.
(1) Reflects the adoption of Financial Accounting Standards (FAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" and
FAS No. 109, "Accounting for Income Taxes" in the first quarter of 1992.
-51-
<PAGE>
ACME METALS INCORPORATED
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(in thousands)
<TABLE>
<CAPTION>
Other
Balance at changes Balance
beginning Additions add at end
Fiscal Year of year at cost Retirements (deduct) of year
- ------------------------------ ---------- --------- ----------- --------- --------
<S> <C> <C> <C> <C> <C>
1993
------
Land $ 3,786 $ 3,786
Buildings 48,530 $ 1,084 $ (36) 49,578
Equipment 349,494 11,653 (8,841) 352,306
Construction in progress 3,874 (988) 2,886
---------- --------- ----------- --------- --------
Total $ 405,684 $ 11,749 $ (8,877) $ 0 $408,556
---------- --------- ----------- --------- --------
---------- --------- ----------- --------- --------
1992
------
Land $ 3,786 $ 3,786
Buildings 47,804 $ 960 $ (247) $ 13(a) 48,530
Equipment 347,767 3,739 (2,882) 870(a) 349,494
Construction in progress 1,016 2,858 3,874
Coal land and development 1,598 (1,598)(b)
---------- --------- ----------- --------- --------
Total $ 401,971 $ 7,557 $ (3,129) $ (715) $405,684
---------- --------- ----------- --------- --------
---------- --------- ----------- --------- --------
1991
------
Land $ 3,786 $ 3,786
Buildings 47,228 $ 592 $ (16) 47,804
Equipment 335,091 13,105 (429) 347,767
Construction in progress 4,102 (3,086) 1,016
Coal land and development 1,598 1,598
---------- --------- ----------- --------- --------
Total $ 391,805 $ 10,611 $ (445) $ 0 $401,971
---------- --------- ----------- --------- --------
---------- --------- ----------- --------- --------
<FN>
(a) Represents the cumulative effect on a prior purchase business
combination as a result of the Company's implementation of FAS No. 109,
Accounting for Income Taxes.
(b) Represents a sale of all of the Company's interests in a coal producing
property in West Virginia.
(c) The estimated lives used in determining annual rates of depreciation (on
a straight-line basis) to be applied to the cost of principal classes of
assets are:
Years
--------
Buildings 30 to 50
Equipment 5 to 18
</TABLE>
-52-
<PAGE>
ACME METALS INCORPORATED
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
(in thousands)
<TABLE>
<CAPTION>
Additions
charged
Balance at to costs Other
beginning and changes add Balance at
Fiscal Year of year expenses Retirements (deduct) end of year
- ---------------------------------------------------------- ----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1993
------
Buildings $ 31,191 $ 851 $ (35) $ 32,007
Equipment 253,804 14,383 (7,177) 261,010
----------- --------- ----------- ----------- -----------
Total $ 284,995 $ 15,234 $ (7,212) $ 0 $ 293,017
----------- --------- ----------- ----------- -----------
----------- --------- ----------- ----------- -----------
1992
------
Buildings $ 30,588 $ 848 $ (247) $ 2(a) $ 31,191
Equipment 241,653 13,858 (2,106) 399(a) 253,804
----------- --------- ----------- ----------- -----------
Total $ 272,241 $ 14,706 $ (2,353) $ 401 $ 284,995
----------- --------- ----------- ----------- -----------
----------- --------- ----------- ----------- -----------
1991
------
Buildings $ 29,818 $ 770 $ 30,588
Equipment 228,568 13,454 $ (369) 241,653
----------- --------- ----------- ----------- -----------
Total $ 258,386 $ 14,224 $ (369) $ 0 $ 272,241
----------- --------- ----------- ----------- -----------
----------- --------- ----------- ----------- -----------
<FN>
(a) Represents the cumulative effect on a prior purchase business
combination as a result of the Company's implementation of FAS No. 109,
Accounting for Income Taxes.
</TABLE>
-53-
<PAGE>
ACME METALS INCORPORATED
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in thousands)
<TABLE>
<CAPTION>
Additions
---------------------
Balance at Charged to Charged
beginning costs and to other Balance at
Fiscal Year of year expenses Accounts Deductions end of year
- --------------------------------------------------------- ----------- ----------- -------- --------- -----------
<S> <C> <C> <C> <C> <C>
1993
------
Allowance for doubtful accounts receivable $ 1,081 $ 240 $ 232(a) $ (398)(b) $ 1,155
----------- ----------- -------- --------- -----------
----------- ----------- -------- --------- -----------
1992
------
Allowance for doubtful accounts receivable $ 741 $ 645 $ 300(a) $ (605)(b) $ 1,081
----------- ----------- -------- --------- -----------
----------- ----------- -------- --------- -----------
1991
------
Allowance for doubtful accounts receivable $ 523 $ 1,045 $ 91(a) $ (918)(b) $ 741
----------- ----------- -------- --------- -----------
----------- ----------- -------- --------- -----------
<FN>
(a) Consists principally of recoveries of accounts charged off in prior
years.
(b) Uncollectible accounts charged off.
</TABLE>
SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION
(in thousands)
<TABLE>
<CAPTION>
Charged to costs and expenses for the year
ended
-------------------------------------------
December 26, December 27, December 29,
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Maintenance and repairs $ 39,456 $ 34,337 $ 32,418
------------- ------------- -------------
------------- ------------- -------------
Taxes, other than payroll and income taxes (principally real
estate and personal property taxes) $ 5,343 $ 5,882 $ 4,762
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
Other items requiring disclosure are not shown as they individually are less
than 1% of net sales.
-54-
