-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, lB+YteZTRxaIDrYFlZyI2+Fb5PRR/eGvJcnjdf/QilwjNpLknwahopSx4gpQX1bH JrURj4MenGDtHBeFzZu5Og== 0000950131-95-002063.txt : 19950803 0000950131-95-002063.hdr.sgml : 19950803 ACCESSION NUMBER: 0000950131-95-002063 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950802 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL STEEL CORP CENTRAL INDEX KEY: 0000070578 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 250687210 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00983 FILM NUMBER: 95558462 BUSINESS ADDRESS: STREET 1: 4100 EDISON LAKES PARKWAY CITY: MISHAWAKA STATE: IN ZIP: 465453440 BUSINESS PHONE: 2192737000 MAIL ADDRESS: STREET 1: 4100 EDISON LAKE PARKWAY CITY: MISHAWAKA STATE: IN ZIP: 46545-3440 10-Q 1 FORM 10-Q 1995 SECOND QUARTER F O R M 1 0 - Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-983 NATIONAL STEEL CORPORATION (Exact name of registrant as specified in its charter) Delaware 25-0687210 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4100 Edison Lakes Parkway, Mishawaka, IN 46545-3440 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code): 219-273-7000 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 number of shares outstanding of the Registrant's Common Stock $ .01 par value, as of July 28, 1995, was 43,286,156 shares. NATIONAL STEEL CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE ---- Statements of Consolidated Income - Three Months Ended June 30, 1995 and 1994 3 Statements of Consolidated Income - Six Months Ended June 30, 1995 and 1994 4 Consolidated Balance Sheets - June 30, 1995 and December 31, 1994 5 Statements of Consolidated Cash Flows - Six Months Ended June 30, 1995 and 1994 6 Statements of Changes in Consolidated Stockholders' Equity and Redeemable Preferred Stock-Series B - Six Months Ended June 30, 1995 and Year Ended December 31, 1994 7 Notes to Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. OTHER INFORMATION Legal Proceedings 15 Submission of Matters to a Vote of Security Holders 17 Exhibits and Reports on Form 8-K 17 2 PART I. - FINANCIAL INFORMATION
NATIONAL STEEL CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (In Thousands of Dollars, Except Per Share Amounts) (Unaudited) THREE MONTHS ENDED JUNE 30, 1995 1994 -------- -------- NET SALES $736,611 $650,682 Cost of products sold 620,804 573,919 Selling, general and administrative 37,261 31,132 Depreciation, depletion and amortization 35,348 35,589 Equity income of affiliates (142) (209) -------- -------- INCOME FROM OPERATIONS 43,340 10,251 Other (Income) Expense Interest and other financial income (3,884) (973) Interest and other financial expense 14,066 15,778 -------- -------- 10,182 14,805 -------- -------- INCOME (LOSS) BEFORE INCOME TAXES 33,158 (4,554) Income tax provision (credit) 2,841 (5,395) -------- -------- NET INCOME 30,317 841 Less preferred stock dividends 2,739 2,740 -------- -------- Net income (loss) applicable to Common Stock $ 27,578 $ (1,899) ======== ======== PER SHARE DATA APPLICABLE TO COMMON STOCK: NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ .64 $ (.05) ======== ======== Weighted average shares outstanding (in thousands) 43,276 36,361
See notes to consolidated financial statements. 3
NATIONAL STEEL CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (In Thousands of Dollars, Except Per Share Amounts) (Unaudited) SIX MONTHS ENDED JUNE 30, 1995 1994 ---------- ---------- NET SALES $1,489,287 $1,273,420 Cost of products sold 1,239,520 1,145,578 Selling, general and administrative 71,576 67,558 Depreciation, depletion and amortization 72,181 69,690 Equity (income) loss of affiliates (1,523) 14 Restructuring Charge 5,336 -0- ---------- ---------- INCOME (LOSS) FROM OPERATIONS 102,197 (9,420) Other (Income) Expense Interest and other financial income (6,632) (1,554) Interest and other financial expense 28,142 31,974 Litigation judgment -0- (110,972) ---------- ---------- 21,510 (80,552) ---------- ---------- INCOME BEFORE INCOME TAXES 80,687 71,132 Income tax provision (credit) 5,676 (7,720) ---------- ---------- NET INCOME 75,011 78,852 Less preferred stock dividends 5,479 5,480 ---------- ---------- Net income applicable to Common Stock $ 69,532 $ 73,372 ========== ========== PER SHARE DATA APPLICABLE TO COMMON STOCK: NET INCOME APPLICABLE TO COMMON STOCK $ 1.65 $ 2.02 ========== ========== Weighted average shares outstanding (in thousands) 42,126 36,361
See notes to consolidated financial statements. 4 NATIONAL STEEL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars, Except Share Amounts) (Unaudited)
ASSETS JUNE 30, DECEMBER 31, 1995 1994 ----------- ----------- Current assets Cash and cash equivalents $ 263,083 $ 161,946 Receivables - net 292,289 292,869 Inventories: Finished and semi-finished products 268,282 261,480 Raw materials and supplies 114,179 106,532 ----------- ----------- 382,461 368,012 ----------- ----------- Total current assets 937,833 822,827 Investments in affiliated companies 58,340 57,676 Property, plant and equipment 3,455,586 3,360,467 Less: Allowances for depreciation, depletion and amortization (2,039,097) (1,966,539) ----------- ----------- 1,416,489 1,393,928 Other assets 236,382 224,954 ----------- ----------- TOTAL ASSETS $ 2,649,044 $ 2,499,385 =========== =========== LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 222,065 $ 272,586 Accrued liabilities 302,671 289,943 Long term obligations and related party indebtedness due within one year 173,354 35,669 ----------- ----------- Total current liabilities 698,090 598,198 Long term obligations 350,276 360,375 Long term indebtedness to related parties 169,496 310,409 Other long term liabilities 837,555 810,292 Redeemable Preferred Stock - Series B 65,780 66,530 Stockholders' equity Common Stock - par value $.01: Class A - authorized 30,000,000 shares; issued and outstanding 22,100,000 shares 221 221 Class B- authorized 65,000,000 shares; issued and outstanding 21,176,156 shares in 1995 and 14,261,100 shares in 1994 212 143 Preferred Stock - Series A 36,650 36,650 Additional paid-in-capital 465,190 360,525 Retained earnings (deficit) 25,574 (43,958) ----------- ----------- Total stockholders' equity 527,847 353,581 ----------- ----------- TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY $ 2,649,044 $ 2,499,385 =========== ===========
See notes to consolidated financial statements. 5
NATIONAL STEEL CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS (In Thousands of Dollars) (Unaudited) SIX MONTHS ENDED JUNE 30, 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 75,011 $ 78,852 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 72,181 69,690 Carrying charges related to facility sales and plant closings 12,153 14,781 Equity (income) loss of affiliates (1,523) 14 Dividends from affiliates 900 900 Postretirement benefits 22,679 27,590 Deferred income taxes (17,815) (10,800) Cash provided (used) by working capital items: Receivables 580 (40,401) Inventories (14,449) 29,827 Accounts payable (50,521) (51,652) Accrued liabilities 12,497 23,517 Other 7,162 5,981 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 118,855 148,299 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of plant and equipment (95,119) (90,105) ----------- ----------- NET CASH USED BY INVESTING ACTIVITIES (95,119) (90,105) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of Class B Common Stock 104,734 --- Debt repayments (13,327) (54,348) Borrowings --- 87,950 Payment of released Weirton benefit liabilities (8,008) (8,979) Dividend payments on Preferred Stock-Series A (1,999) (1,999) Dividend payments on Preferred Stock-Series B (860) (87) Payment of unreleased Weirton liabilities and their release in lieu of cash dividends on Preferred Stock-Series B (3,139) (3,139) ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 77,401 18,625 ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 101,137 76,819 Cash and Cash Equivalents, Beginning of the Period 161,946 5,322 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 263,083 $ 82,141 =========== ===========
See notes to consolidated financial statements. 6
NATIONAL STEEL CORPORATION AND SUBSIDIARIES STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY AND REDEEMABLE PREFERRED STOCK - SERIES B (In Thousands of Dollars) (Unaudited) REDEEMABLE COMMON COMMON PREFERRED ADDITIONAL RETAINED TOTAL PREFERRED STOCK - STOCK - STOCK - PAID-IN- EARNINGS STOCKHOLDERS' STOCK - CLASS A CLASS B SERIES A CAPITAL (DEFICIT) EQUITY SERIES B -------- -------- --------- ---------- --------- ------------- --------- BALANCE AT JANUARY 1, 1994 $221 $143 $36,650 $360,314 $(207,366) $ 189,962 $68,030 Net income 168,512 168,512 Amortization of excess of book value over redemption value of Redeemable Preferred Stock - Series B 1,500 1,500 (1,500) Cumulative dividends on Preferred Stocks - Series A and B (12,538) (12,538) Exercise of stock options 211 211 Minimum pension liability 5,934 5,934 ---- ---- ------- -------- --------- --------- ------- BALANCE AT DECEMBER 31, 1994 221 143 36,650 360,525 (43,958) (353,581) 66,530 Net income 75,011 75,011 Amortization of excess of book value over redemption value of Redeemable Preferred Stock - Series B 750 750 (750) Cumulative dividends on Preferred Stocks - Series A and B (6,229) (6,229) Issuance of Common Stock - Class B 69 104,665 104,734 ---- ---- ------- -------- --------- --------- ------- BALANCE AT JUNE 30, 1995 $221 $212 $36,650 $465,190 $ 25,574 $ 527,847 $65,780 ==== ==== ======= ======== ========= ========= =======
See notes to consolidated financial statements. 7 NATIONAL STEEL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1995 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements of National Steel Corporation and its majority owned subsidiaries (the "Company") presented herein are unaudited. However, in the opinion of management, such statements include all adjustments necessary for a fair presentation of the results for the periods indicated. All such adjustments made were of a normal recurring nature, except for the items discussed in Notes 2 and 3. The financial results presented for the three and six month periods ended June 30, 1995 are not necessarily indicative of results of operations for the full year. The Annual Report of the Company on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K") contains additional information and should be read in conjunction with this report. Certain items in prior years have been reclassified to conform with the current year presentation. NOTE 2 - RESTRUCTURING CHARGE Reduction in Workforce - During the fourth quarter of 1994, the Company finalized and implemented a plan that resulted in a workforce reduction of approximately 400 salaried nonrepresented employees. Accordingly, a restructuring charge of $34.2 million, $25.6 million net of tax, was recorded during the fourth quarter of 1994. This charge and the amount reserved was comprised of retiree medical benefits ("OPEB") of $22.0 million, severance of $10.9 million, a pension credit of $1.8 million and other charges totaling $3.1 million. During the first quarter of 1995, the Company recorded, as expected, an additional restructuring charge of $5.3 million, $3.6 million net of tax, as a result of the various elections made by the terminated employees during the first quarter of 1995. This charge was comprised of OPEB's of $4.5 million, severance of $1.6 million, and a pension credit of $.8 million. The following represents the components of the $34.2 million reserve recorded at December 31, 1994, the cash utilizations during the first six months of 1995, the components of the additional $5.3 million restructuring charge recorded during the first quarter of 1995 and the balance of the reserve at June 30, 1995.
BALANCE BALANCE DECEMBER 31, CASH JUNE 30, 1994 UTILIZATIONS ADJUSTMENTS 1995 ------------- ------------- ----------- -------- (DOLLARS IN MILLIONS) OPEB $22.0 $ 0.0 $ 4.5 $26.5 Severance 10.9 (11.6) 1.6 .9 Pensions (1.8) 0.0 (0.8) (2.6) Other 3.1 (1.2) 0.0 1.9 ----- ------ ----- ----- $34.2 $(12.8) $ 5.3 $26.7 ===== ====== ===== =====
The remaining OPEB and pension balances will require the utilization of cash over the retirement lives of the affected employees. The remaining aggregate balance of $2.8 million related to severance and other charges will require the utilization of cash within the 1995 fiscal year. The Company does not expect to record any additional charges associated with this reduction in workforce. 8 NOTE 3 - LITIGATION JUDGMENT Bessemer & Lake Erie Railroad (the "B&LE") Litigation Judgment - On January 24, 1994, the United States Supreme Court denied the B&LE's petition for certiorari in the Iron Ore Antitrust Litigation, thus sustaining the Company's judgment against the B&LE. On February 11, 1994, the Company received $111.0 million, including interest, in satisfaction of this judgment. This gain has been reclassified from Income from Operations to Other Income to more properly reflect the trend in operating income and had no effect on net income or earnings per share as previously reported. The Company used $40.6 million of the proceeds to repurchase a portion of its outstanding First Mortgage Bonds. Pursuant to the terms of the 1993 labor agreement between the Company and the United Steelworkers of America (the "USWA"), approximately $11 million of the proceeds were deposited into a Voluntary Employee Benefits Association trust established to fund the Company's OPEB obligation with respect to USWA represented employees. The Company did not recognize any income taxes associated with these proceeds, other than alternative minimum tax of $3.1 million, as regular federal income tax expense was offset by the utilization of previously reserved tax assets. NOTE 4 - PRIMARY OFFERING OF CLASS B COMMON STOCK AND USE OF PROCEEDS TO PREPAY DEBT On February 1, 1995, the Company completed a primary offering of 6,900,000 shares of Class B Common Stock, bringing the total number of shares of Class B Common Stock issued and outstanding to 21,176,156. Subsequent to the offering, NKK Corporation, through its ownership of all 22,100,000 issued and outstanding shares of Class A Common Stock, holds 67.6% of the combined voting power of the Company. The remaining 32.4% of the combined voting power is publicly held. The issuance and sale of the additional shares of Class B Common Stock generated net proceeds of approximately $104.7 million. During the third quarter 1995, the Company will use all of the proceeds from this offering, along with an additional amount which will be funded from the Company's available cash, to prepay a portion of the related party debt associated with the rebuild of the No. 5 Coke Oven Battery serving the Great Lakes Division. NOTE 5 - ENVIRONMENTAL AND LEGAL PROCEEDINGS The Company's operations are subject to numerous laws and regulations relating to the protection of human health and the environment. Because these environmental laws and regulations are quite stringent and are generally becoming more stringent, the Company has expended, and can be expected to expend in the future, substantial amounts for compliance with these laws and regulations. It is the Company's policy to expense or capitalize, as appropriate, environmental expenditures that relate to current operating sites. Environmental expenditures that relate to past operations and which do not contribute to future or current revenue generation are expensed. With respect to costs for environmental assessments or remediation activities, or penalties or fines that may be imposed for noncompliance with such laws and regulations, such costs are accrued when it is probable that liability for such costs will be incurred and the amount of such costs can be reasonably estimated. The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA'), and similar state superfund statutes generally impose joint and several liability on present and former owners, operators, transporters and generators for remediation of contaminated properties, regardless of fault. The Company and certain of its subsidiaries are involved as a potentially responsible party ("PRP") at a number of off-site CERCLA or state superfund site proceedings. At some of these sites, any remediation costs incurred by the Company would constitute liabilities for which FoxMeyer Health Corporation ("FOX") is required to indemnify the Company ("FOX Environmental Liabilities"). In addition, at some of these sites, the Company does not have sufficient information regarding the nature and extent of the contamination, the wastes contributed by other PRPs, or the required remediation activity to estimate its potential liability. In connection with those sites involving FOX Environmental Liabilities, in January 1994, the Company received $10.0 million from FOX as an unrestricted prepayment for such liabilities for which the Company recorded $10.0 million as a liability in its consolidated balance sheet. The Company is required to repay FOX portions of the $10.0 million to the extent the Company's expenditures for such FOX Environmental Liabilities do not meet specified levels by certain dates over a twenty year period. At both June 30, 1995 and December 31, 1994, the balance recorded as prepaid FOX Environmental Liabilities totaled $10.0 million. 9 The Company has also recorded the reclamation and other costs to restore its coal and iron ore mines at its shutdown locations to their original and natural state, as required by various federal and state mining statutes. Since the Company has been conducting steel manufacturing and related operations at numerous locations for over sixty years, the Company potentially may be required to remediate or reclaim any contamination that may be present at these sites. The Company does not have sufficient information to estimate its potential liability in connection with any potential future remediation at such sites. Accordingly, the Company has not accrued for such potential liabilities. As any of these environmental matters discussed above progress or the Company becomes aware of additional matters, the Company may be required to accrue charges in excess of those previously accrued. However, although the outcome of any of the matters described, to the extent they exceed any applicable reserves, could have a material adverse effect on the Company's results of operations and liquidity for the applicable period, the Company has no reason to believe that such outcomes, whether considered individually or in the aggregate, will have a material adverse effect on the Company's financial condition. The Company recorded environmental liabilities aggregating approximately $17.7 million and $17.1 million at June 30, 1995 and December 31, 1994, respectively. Since 1989, the United States Environmental Protection Agency (the "EPA") and the eight Great Lakes states have been developing the Great Lakes Initiative, which will impose water quality standards that are even more stringent than the best available technology standards currently being enforced. On March 23, 1995, the EPA published the final "Water Quality Guidance for the Great Lakes System" (the "Guidance Document"). The Guidance Document establishes minimum water quality standards and other pollution control policies and procedures for waters within the Great Lakes System. Although the full impact of the Guidance Document is not yet known, preliminary studies conducted by the American Iron and Steel Institute prior to the original publication of the Guidance Document in proposed form in April 1993 estimated that the potential capital cost for a fully integrated steel mill to comply with draft standards under the Great Lakes Initiative could range from approximately $50 million to $175 million and the potential annual operating and maintenance cost would be approximately 15% of the estimated capital cost. Until the impact of the Guidance Document can be fully analyzed, the Company is unable to determine whether such estimates are accurate and whether the Company's actual costs for compliance will be comparable. Although the Company believes only the Great Lakes Division would be required to incur significant costs for compliance, there can be no assurances that such compliance will not have a material adverse effect on the Company's financial condition. The Company is involved in various non-environmental legal proceedings most of which occur in the normal course of its business. The Company does not believe that the proceedings will have a material adverse effect, either individually or in the aggregate, on the Company's financial position. However, with respect to certain of the proceedings, if reserves prove to be inadequate and the Company incurs a charge to earnings, such charge could have a material adverse effect on the Company's results of operations for the applicable period. Certain other proceedings, if decided adversely to the Company, could have a material adverse effect on cash flows. See "Part II, Item 1 - Legal Proceedings". NOTE 6 - INCOME TAXES The Company's effective tax rate is lower than the federal statutory rate primarily because of the continued utilization of available operating loss carryforwards. As such, the Company anticipates paying alternative minimum tax at an effective rate of 18.5% in 1995. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - COMPARISON OF THE THREE-MONTH PERIODS ENDED JUNE 30, 1995 AND 1994 Blast Furnace Reline - -------------------- The B Blast Furnace at the Company's Granite City Division temporarily ceased production on April 7, 1995 to undergo a planned reline which was completed in July. During the first quarter of 1995, the Company stockpiled inventories in anticipation of the outage. Therefore shipments during the second quarter were not unfavorably impacted. The Company estimates that this outage unfavorably impacted second quarter results of operations by approximately $17 million. Net Sales - --------- Net sales for the second quarter of 1995 totalled $736.6 million, an improvement of $85.9 million, or 13.2%, compared to the corresponding period in 1994. This increase in sales is primarily attributable to a 5.8% increase in shipments along with an increase in realized selling prices which was somewhat offset by an unfavorable shift in product mix to lower margin hot rolled products. Steel shipments for the second quarter of 1995 were 1,348,000 tons compared to the 1,274,000 tons shipped during the same period in 1994. This improvement is attributable to a number of factors, including an overall increase in demand for the Company's products as well as improved operating practices. Cost of Products Sold - --------------------- The Company's cost of products sold as a percentage of net sales declined from 88.2% during the second quarter of 1994, to 84.3% during the corresponding 1995 period. This decrease is reflective of improvements in productivity and quality as well as an increase in production volumes. Raw steel production was 1,337,000 net tons during the second quarter of 1995, a 6.8% decrease compared to the 1,434,000 net tons produced during the same 1994 period. Other (Income) Expense - ---------------------- Financing Costs - Net financing costs of $10.2 million during the second quarter of 1995 represents a 31.2% decrease compared to net financing costs of $14.8 million during the corresponding 1994 period. This decrease is primarily attributable to higher short term investment earnings resulting from the receipt of cash generated by the issuance of 6.9 million shares of Class B Common Stock, coupled with a decrease in interest expense as a result of the reduction in debt. Income Taxes - ------------ The Company's effective tax rate is lower than the federal statutory rate primarily because of the continued utilization of available operating loss carryforwards. As such, the Company anticipates paying alternative minimum tax at an effective rate of 18.5% in 1995. 11 COMPARISON OF THE SIX-MONTH PERIODS ENDED JUNE 30, 1995 AND 1994 Net Sales - --------- Net sales for the first half of 1995 totalled $1.5 billion, a 17.0% increase when compared to the first half of 1994. This increase was attributable to both an increase in shipments and realized selling prices which was somewhat offset by an unfavorable product mix shift to lower margin hot rolled products. Steel shipments for the first half of 1995 were 2,770,000 tons, a 10.5% increase from the 2,507,000 tons shipped during the corresponding 1994 period. Raw steel production increased to 2,923,000 tons, a 4.6% increase from the 2,795,000 tons produced during the six month period ended June 30, 1994. Cost of Products Sold - --------------------- Cost of products sold as a percentage of net sales decreased from 90.0 % in the first half of 1994 to 83.2% for the corresponding 1995 period. This decrease is reflective of improvements in realized selling prices, product mix and performance yields, as well a reduction in product costs. Restructuring Charge - -------------------- As described above in note 2 to the Financial Statements, during the fourth quarter of 1994, the Company finalized and implemented a plan that resulted in a workforce reduction of approximately 400 salaried nonrepresented employees resulting in a restructuring charge of $34.2 million, $25.6 million net of tax, being recorded during the fourth quarter of 1994. During the first quarter of 1995, the Company recorded, as expected, an additional restructuring charge of $5.3 million, $3.6 million net of tax, as a result of the various elections made by the terminated employees during the first quarter of 1995. This charge was comprised of OPEB's of $4.5 million, severance of $1.6 million, and a pension credit of $.8 million. The following represents the components of the $34.2 million reserve recorded at December 31, 1994, the cash utilizations during the second quarter of 1995, the components of the additional $5.3 million restructuring charge recorded during the first quarter of 1995 and the balance of the reserve at June 30, 1995.
BALANCE BALANCE DECEMBER 31, CASH JUNE 30, 1994 UTILIZATIONS ADJUSTMENTS 1995 ------------ ------------ ----------- -------- (DOLLARS IN MILLIONS) OPEB $22.0 $ 0.0 $ 4.5 $26.5 Severance 10.9 (11.6) 1.6 .9 Pensions (1.8) 0.0 (0.8) (2.6) Other 3.1 (1.2) 0.0 1.9 ----- ------ ----- ----- $34.2 $(12.8) $ 5.3 $26.7 ===== ====== ===== =====
The remaining OPEB and pension balances will require the utilization of cash over the retirement lives of the affected employees. The remaining aggregate balance of $2.8 million related to severance and other charges will require the utilization of cash within the 1995 fiscal year. The Company does not expect to record any additional charges associated with this reduction in workforce. 12 Other (Income) Expense - ---------------------- Financing Costs - Net financing costs of $21.5 million during the first six months of 1995 represents a 29.3% decrease compared to net financing costs of $30.4 million during the corresponding 1994 period. This decrease is primarily attributable to higher short term investment earnings resulting from the receipt of cash generated by the issuance of 6.9 million shares of Class B Common Stock, coupled with a decrease in interest expense as a result of the reduction in debt. Bessemer & Lake Erie Railroad (the "B&LE") Litigation Judgment - On January 24, 1994, the United States Supreme Court denied the B&LE petition to hear the appeal in the Iron Ore Antitrust Litigation, thus sustaining a judgment in favor of the Company against the B&LE. On February 11, 1994, the Company received $111.0 million, including interest, in satisfaction of this judgment. This gain has been reclassified from Income from Operations to Other Income to more properly reflect the trend in operating income and had no effect on net income or earnings per share as previously reported. Other - ----- Primary Offering of Class B Common Stock and Use of Proceeds - On February 1, 1995, the Company completed a primary offering of 6,900,000 shares of Class B Common Stock, bringing the total number of shares of Class B Common Stock issued and outstanding to 21,176,156. Subsequent to the offering, NKK Corporation, through its ownership of all 22,100,000 issued and outstanding shares of Class A Common Stock, holds 67.6% of the combined voting power of the Company. The remaining 32.4% of the combined voting power is held by the public. The issuance of the additional shares of Class B Common Stock generated net proceeds of approximately $104.7 million. During the third quarter of 1995, the Company intends to use all of the proceeds from this offering, along with an additional amount which will be funded from the Company's available cash, to prepay a portion of the related party debt associated with the rebuild of the No. 5 Coke Oven Battery serving the Great Lakes Division. Construction of Coating Lines - The Company is in the process of constructing a $67 million coating line which will be located at the Company's Granite City Division. The line, which is rated at 270,000 annual net tons, is expected to be completed in twelve to fifteen months and will increase the Company's coated product capacity to more than two million tons annually. The Company will market products from this new coating line to the metal buildings market for use in pre-engineered buildings and in the emerging market for residential roofing, siding and framing. The Company intends to finance the construction of this line by utilizing internally generated funds. On July 25, 1995, the Company's Board of Directors approved the construction of an additional coating facility. This second coating line, which is also rated at 270,000 annual net tons, is intended to service the low rise construction market. The location and financing alternatives for this second coating facility are still being evaluated. The construction of these two additional coating facilities is a part of the Company's long term strategy to increase the percentage of its shipments of higher margin products. 13 LIQUIDITY AND SOURCES OF CAPITAL The Company's liquidity needs arise primarily from capital investments, working capital requirements and principal and interest payments on its indebtedness. In addition to the Company's 1995 and 1993 public offerings of Class B Common Stock and the receipt of approximately $111.0 million in February 1994 from the satisfaction of a judgment in favor of the Company against the B&LE, the Company has satisfied these liquidity needs with funds provided by long term borrowings and cash provided by operations. Cash and cash equivalents totaled $263.1 million at June 30, 1995 as compared to $161.9 million at December 31, 1994. This increase is primarily a result of the proceeds realized in connection with the primary offering of 6,900,000 shares of Class B Common Stock completed on February 1, 1995. During the third quarter of 1995, the Company intends to use all of the proceeds from this offering, along with an additional amount which will be funded from the Company's available cash, to prepay a portion of the related party debt associated with the rebuild of the No. 5 Coke Oven Battery serving the Great Lakes Division. Cash Flows from Operating Activities For the six months ended June 30, 1995, cash provided by operating activities decreased by $29.4 million compared to the same 1994 period. Cash provided by operating activities, excluding the effects of the restructuring charge and the B&LE litigation judgment recorded during the first six months of 1995 and 1994, respectively, increased by $82.1 million. This increase is primarily due to an improvement in income from operations, which was partially offset by the impact of working capital items, which reduced cash flows by $51.9 million for the six month period. Cash Flows from Investing Activities Capital investments for the six months ended June 30, 1995 and 1994 amounted to $95.1 and $90.1 million, respectively. The 1995 spending is largely attributable to a planned blast furnace reline at the Granite City Division as well as the commencement of construction of a steel coating line at the same location. The 1994 spending was largely attributable to the completion of a pickle line servicing the Great Lakes Division. The Company plans to invest an additional $114.1 million during the remainder of 1995 for capital expenditures to improve its plant and equipment. Cash Flows from Financing Activities Financing activities for the first six months of 1995 included the issuance of 6,900,000 shares of Class B Common Stock which generated net proceeds of $104.7 million, offset by debt repayments of $13.3 million and other payments totaling $14.0 million. Financing activities for the first six months of 1994 included borrowings of $88.0 million related to the completion of a pickle line servicing the Great Lakes Division, as well as the prepayment of $40.6 million aggregate principal amount of its outstanding First Mortgage Bonds. Sources of Financing The Company's available sources of liquidity consist of a Receivables Purchase Agreement with commitments of up to $200 million and $15 million in an uncommitted, unsecured line of credit. On May 16, 1995, the Receivables Purchase Agreement was amended to increase the amount available under this agreement from a maximum of $180 million to a maximum of $200 million. Additionally, the expiration date was extended from May 16, 1997 to May 16, 2000. On June 30, 1995, there were no cash borrowings outstanding under the Receivables Purchase Agreement, and outstanding letters of credit under the Receivables Purchase Agreement totaled $84.9 million. Total debt and redeemable preferred stock as a percentage of total capitalization improved to 59.0% at June 30, 1995, as compared to 68.6% at December 31, 1994, primarily as a result of the Company's improved net income and the proceeds received in connection with the aforementioned stock offering. 14 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Baker's Port, Inc. v. National Steel Corporation. With respect to the matter involving claims arising out of the sale of land in Texas to Baker's Port, Inc. ("BPI"), previously reported in the Company's 1994 Form 10-K and Form 10-Q for the quarter ended March 31, 1995 (the "first quarter Form 10-Q"), the parties have tentatively agreed to a settlement of this matter. In summary, the settlement provides that (i) the lawsuit will be dismissed with prejudice and the parties will give each other mutual releases of all claims, (ii) BPI will convey the subject property back to Natland Corporation ("Natland") (with the exception that BPI will retain ownership of 7.8 acres and a two story building situated thereon in which BPI's headquarters are located), (iii) Natland will pay to BPI the sum of $3,500,000 ($2,150,000 at the closing and $1,350,000 when a certain portion of the property is sold by Natland) and (iv) upon sale of the subject property, Natland will retain the first $18,000,000 of net proceeds and any net proceeds over $18,000,000 will be shared equally between Natland and BPI. The settlement is subject to the parties agreeing upon and executing formal documentation embodying the aforesaid terms. The Company anticipates that it will record a gain upon final settlement. Detroit Coke Corporation v. NKK Chemical USA, Inc. With respect to the matter involving the claim of Detroit Coke Corporation ("Detroit Coke") that the defendants supplied it with defective coal and coal blends which allegedly caused damage to its coke making facility and environmental problems, previously reported in the Company's 1994 Form 10-K, on or about May 12, 1995, the court entered an order granting summary judgment in favor of the remaining defendants as to all claims, except those claims against NKK Chemical pertaining to amounts allegedly due for coke and coke oven gas supplied under the Coke Purchasing Agreement between Detroit Coke and NKK Chemical. Thereafter, on June 15, 1995, Detroit Coke moved for reconsideration of the court's May 12, 1995 Order. The Company has submitted a memorandum of law in opposition to Detroit Coke's motion for reconsideration. No decision has yet been rendered on this motion. Management believes that the final disposition of the foregoing matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows. ENVIRONMENTAL MATTERS The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), and similar state superfund statutes generally impose joint and several liability on present and former owners and operators, transporters and generators for remediation of contaminated properties, regardless of fault. The Company and certain of its subsidiaries are involved as a potentially responsible party ("PRP") at a number of off-site CERCLA or state superfund site proceedings. Martha C. Rose Chemical Superfund Site. With reference to the matter involving the Martha C. Rose Site in Holden, Missouri, previously reported in the Company's 1994 Form 10-K, in March 1995, the PRP Steering Committee reserved approximately $30 million to cover the costs of project completion, Environmental Protection Agency ("EPA") oversight and future operations and maintenance. The remaining $5 million of the funds previously collected will be refunded to the various PRP's. The Company's share of this refund will be immaterial as the Company was a de minimis party in this action. Springfield Township Site. With reference to the matter involving the Springfield Township Site located in Davisburg, Michigan, previously reported in the Company's 1994 Form 10-K, personnel representing the EPA have indicated an intention to change the soil treatment technology at the site from incineration to a less costly and less controversial treatment method. Specifically, the EPA is expected to amend the Record of Decision later in 1995 to authorize the use of significantly less expensive alternative technologies, such as soil washing. Projected cost estimates for the final remedy could be as low as $10 million (as compared to the original estimates of $20-33 million) if soil washing rather than incineration was implemented at this site. The impact of this reduction on the Company's prior settlement offer has yet to be determined. 15 FOX Sites. Lowry Landfill Site. With respect to the matter involving the Lowry Landfill Site in Aurora, Colorado, previously reported in the Company's 1994 Form 10-K and first quarter Form 10-Q, the Alumet Partnership ("Alumet") has reached a settlement with the EPA and the Department of Justice concerning any liability Alumet may have with respect to this Site. The terms of the settlement are embodied in a consent decree that was executed by both Alumet and the Department of Justice, lodged with the District Court for the District of Colorado on July 10, 1995, and published for public comment in the Federal Register on July 25, 1995. If the consent decree is ultimately approved, Alumet will pay the sum of $7.3 million in full settlement of all third party claims, including all claims by the Government and by private plaintiffs (including the City and County of Denver, Waste Management of Colorado, Inc. and Chemical Waste Management) with respect to this matter. The Company's share of the settlement will be 50% of the overall amount, or $3.65 million, and will be covered by the Fox $10 million prepayment. See "Part I - Financial Information, Note 5 -Environmental and Legal Proceedings". Other Great Lakes Division Outfalls Proceeding. With reference to the matter involving certain outfalls located at the Company's Great Lakes Division facility, including the outfalls at the 80 inch hot strip mill, previously reported in the Company's 1994 Form 10-K and its first quarter Form 10-Q, the Company has received ten additional letters from the U. S. Coast Guard ("USCG") during the second quarter of 1995 regarding the planned assessment of additional civil penalties totaling $95,000 for alleged oil discharges from National Pollutant Discharge Elimination System ("NPDES") outfalls. The Company paid $5,000 on July 11, 1995 in settlement by one of these ten. Discussions with the USCG regarding the remaining $90,000 of these planned assessments are ongoing. Also, with reference to the Michigan Department of Natural Resources ("MDNR") potential enforcement action with respect to exceedances of limitations at the 80 inch hot strip mill outfall, previously reported in the Company's 1994 Form 10-K, by letter dated June 19, 1995, MDNR accepted the Company's proposal to proceed with a treatability study and preliminary engineering between July 15, 1995 and July 15, 1996. During that same period of time, the Company will attempt to make a compliance demonstration to establish that there is no need to proceed with an alternate control system. MDNR and the Company will be attempting to negotiate a consent order incorporating these concepts and resolving all remaining issues. In connection with certain of these proceedings, the Company has only commenced investigation or otherwise does not have sufficient information to estimate its potential liability, if any. Although the outcomes of the proceedings described above or any fines or penalties that may be assessed in any such proceedings, to the extent that they exceed any applicable reserves, could have a material adverse effect on the Company's results of operations for the applicable period, the Company has no reason to believe that any such outcomes, fines or penalties, whether considered individually or in the aggregate, will have a material adverse effect on the Company's financial position or cash flows. 16 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of stockholders was held on April 26, 1995. In connection with the meeting, proxies were solicited pursuant to the Securities Exchange Act. The following are the voting results on proposals considered and voted upon at the meeting, all of which were described in the Company's Proxy Statement dated March 16, 1995. 1. All nominees for director listed in the Proxy Statement were elected.
NAME VOTES FOR VOTES WITHHELD -------------------- ---------- -------------- Edwin V. Clarke, Jr. 61,896,577 967,115 V. John Goodwin 62,608,977 254,715 Masayuki Hanmyo 62,609,077 254,615 Frank Lucchino 62,696,277 167,415 Hiroshi Matsumoto 62,608,777 254,915 Keisuke Murakami 62,609,077 254,615 Osamu Sawaragi 62,609,077 254,615 Kenichiro Sekino 62,609,077 254,615 Robert J. Slater 62,696,577 167,115
2. The proposal to ratify the selection of Ernst & Young LLP as the Company's outside auditors for 1995 passed. (For 62,854,990, abstained 5,389, against 3,313) Effective June 30, 1995, Keisuke Murakami retired and resigned from the Board of Directors. Effective July 1, 1995, the Board appointed Susumu Terao to fill the vacant director position. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following is an index of the exhibits included in this Report on Form 10-Q: 10A Amendment Number One to the Receivables Purchase Agreement, dated as of May 31, 1995, between the Company and National Steel Funding Corporation. 27A Financial Data Schedule (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the second quarter of 1995. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONAL STEEL CORPORATION BY /s/ Robert M. Greer ---------------------------------------------- Robert M. Greer, Senior Vice President and Chief Financial Officer BY /s/ Carl M. Apel ---------------------------------------------- Carl M. Apel, Corporate Controller, Accounting and Assistant Secretary Date: July 28, 1995 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONAL STEEL CORPORATION BY ________________________________________________ Robert M. Greer, Senior Vice President and Chief Financial Officer BY ________________________________________________ Carl M. Apel, Corporate Controller, Accounting and Assistant Secretary Date: July 28, 1995 EX-10.A 2 AMDT 1 RECEIVE PURCHASE CONFORMED COPY AMENDMENT NO. 1 TO RECEIVABLES PURCHASE AGREEMENT AMENDMENT dated as of May 31, 1995 (the "Amendment") among NATIONAL STEEL FUNDING CORPORATION, a Delaware corporation, the financial institutions listed on the signature pages hereof, as Buyers, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE FUJI BANK AND TRUST COMPANY, THE MITSUBISHI BANK, LTD. and COMERICA BANK, as Letter of Credit Issuing Banks, J.P. MORGAN DELAWARE, as Reserve Letter of Credit Bank, NATIONAL STEEL CORPORATION, a Delaware corporation, as Servicer, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and J.P. MORGAN DELAWARE, a Delaware banking corporation, as Structuring and Collateral Agent. W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Receivables Purchase Agreement dated as of May 16, 1994 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to provide for, among other things, an extension of the facility; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such terms in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of Section 1.01 of the Agreement. Section 1.01 of the Agreement is amended by (a) replacing the date "May 16, 1997" in the definition of "Expiry Date" with the date "May 16, 2000", and (b) adding "; and provided further that such letter of credit may be amended from time to time to increase the face amount thereof" in the definition of "Reserve Letter of Credit" after the word "Certificates" appearing in the last line thereof. SECTION 3. Amendment of Section 6.01(q) of the Agreement. Section 6.01(q) of the Agreement is amended by replacing the amount "$36,000,000" with the amount "$40,000,000". SECTION 4. Amendment to Exhibit. The Agreement is amended by replacing Exhibit O, Form of Reserve Letter of Credit, with an amended Exhibit O, Form of Reserve Letter of Credit, in the form of Exhibit A hereto. SECTION 5. Additional Banks; Total Commitments. Upon execution and delivery of this Amendment, Mellon Bank N.A. shall become a party to the Agreement and a "Buyer" for all purposes thereof and hereof, entitled to all rights and subject to all duties thereunder and hereunder. The Agreement is amended so that the aggregate amount of Commitments is $200,000,000 and each Buyer's Commitment is the amount set forth opposite its name on the signature page hereof. The Buyer whose commitment is changed to zero shall, on the date this Amendment becomes effective pursuant to Section 7 cease to be a "Buyer" party to the Agreement; provided that the provisions of Section 8.03 shall continue to inure to the benefit of such Buyer. SECTION 6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof (i) when the Administrative Agent shall have received duly executed counterparts hereof signed by NSFC, the Reserve L/C Bank, the Issuing Banks, the Agents, the Servicer and the Buyers (or, in the case of any party as to which an executed counterpart shall not have been received, the Administrative Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party) and (ii) each of the following conditions shall have been satisfied, in form and substance acceptable to the Agents: (i) a good standing certificate for NSFC issued by the Secretary of State of the State of Delaware; (ii) (A) a copy of the resolutions of the board of directors of NSFC certified as of the date of this Amendment by its secretary or an assistant secretary authorizing the execution, delivery and performance of this Amendment and approving the transactions contemplated hereby; and (B) a certificate of the secretary or an assistant secretary of NSFC dated the date of this Amendment and certifying (x) the names and signatures of the officers authorized on its behalf to execute this Amendment and any other documents to be delivered by NSFC hereunder, (y) a copy of NSFC's by-laws, and (z) the certificate of incorporation of NSFC; (iii) (A) a copy of the resolutions of the board of directors of NSC certified as of the date of this Amendment by its secretary or an assistant secretary authorizing the execution, delivery and performance of this Amendment and approving the transactions contemplated hereby; and (B) a certificate of the secretary or an assistant secretary of NSC dated the date of this Amendment and certifying (x) the names and signatures of the officers authorized on its behalf to execute this Amendment and any other documents to be delivered by NSC hereunder, (y) a copy of NSC's by-laws, and (z) the certificate of incorporation of NSC; (iv) a good standing certificate for NSC issued by the Secretary of State of NSC's jurisdiction of incorporation, dated a date reasonably near the date of this Amendment; (v) opinions dated the date of this Amendment of Yukevich, Blume & Zangrilli, counsel for NSFC and NSC in substantially the forms of Exhibit B-1 and B-2 hereto; and covering such other matters as the Administrative Agent may reasonably request; (vi) the Reserve L/C Bank shall have executed and delivered to the Collateral Agent the Reserve Letter of Credit substantially in the form of Exhibit A hereto; and (vii) evidence satisfactory to the Collateral Agent that the rating assigned to the Buyer's Certificates shall have been reaffirmed by S&P. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. NATIONAL STEEL FUNDING CORPORATION By: /s/ William E. McDonough Title: Treasurer NATIONAL STEEL CORPORATION, as Servicer By: /s/ Robert M. Greer Title: Senior Vice President & Chief Financial Officer MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent By: /s/ Laura E. Reim Title: Vice President J.P. MORGAN DELAWARE, as Structuring and Collateral Agent and Reserve Letter of Credit Issuing Bank By: /s/ Robert J. Henchey Title: Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Letter of Credit Issuing Bank By: /s/ Laura E. Reim Title: Vice President THE FUJI BANK AND TRUST COMPANY, as Letter of Credit Issuing Bank By: /s/ Katsuyuki Takagi Title: Vice President THE MITSUBISHI BANK, LTD., as Letter of Credit Issuing Bank By: /s/ Hajime Kaneko Title: Vice President & Manager COMERICA BANK, as Letter of Credit Issuing Bank By: /s/ Phillip A. Coosaia Title: Assistant Vice President BUYERS: Commitment: $15,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ Laura E. Reim Title: Vice President Commitment: $15,000,000 J.P. MORGAN DELAWARE By: /s/ Robert J. Henchey Title: Vice President Commitment: $30,000,000 THE FUJI BANK AND TRUST COMPANY Commitment: $30,000,000 THE FUJI BANK AND TRUST COMPANY By: /s/ Katsuyuki Takagi Title: Vice President Commitment: $25,000,000 COMERICA BANK By: /s/ Phillip A. Coosaia Title: Assistant Vice President Commitment: $20,000,000 THE MITSUBISHI BANK, LTD. By: /s/ Hajime Kaneko Title: Vice President and Manager Commitment: $15,000,000 THE BANK OF TOKYO TRUST COMPANY By: /s/ Akihiko Hagura Title: Vice President Commitment: $15,000,000 THE DAI-ICHI KANGYO BANK, LTD., NEW YORK BRANCH By: /s/ Gregg Silver Title: Vice President and Group Leader, Asset Securitization Group Commitment: $15,000,000 THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY By: /s/ Hiroshi Suzuki Title: Senior Vice President Commitment: $15,000,000 THE LONG-TERM CREDIT BANK OF JAPAN, LTD. By: /s/ Taisuke Hitomi Title: Deputy General Manager Commitment: $15,000,000 NBD BANK, N.A. By: /s/ Mark A. Weitzel Title: Second Vice President Commitment: $10,000,000 THE YASUDA TRUST AND BANKING CO., LTD. By: /s/ Koichi Nakayama Title: Vice President Commitment: $10,000,000 MELLON BANK, N.A. By: /s/ Richard K. James Title: Vice President Commitment: $0 BANK OF AMERICA ILLINOIS By: /s/ Erle R.L. Archer Title: Vice President TOTAL COMMITMENTS: $200,000,000 EX-27 3 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 263,083 0 307,444 15,155 382,461 937,833 3,455,586 2,039,097 2,649,044 698,090 519,772 433 65,780 36,650 490,764 2,649,044 1,489,287 1,489,287 1,239,520 1,239,520 143,787 (30) 21,510 80,687 5,676 75,011 0 0 0 75,011 1.65 1.65
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