-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CJbTkAglPzQx28FtPJFak9lFEw6Tu78k93ZjOy42I0phNcxZxZeSH4QoVdnxleuQ k+O5O6WcTqZCRlQMRvz0Sg== 0000779334-97-000012.txt : 19970701 0000779334-97-000012.hdr.sgml : 19970701 ACCESSION NUMBER: 0000779334-97-000012 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIRMINGHAM STEEL CORP CENTRAL INDEX KEY: 0000779334 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 133213634 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09820 FILM NUMBER: 97632576 BUSINESS ADDRESS: STREET 1: 1000 URBAN CENTER PARKWAY STREET 2: SUITE 300 CITY: BIRMINGHAM STATE: AL ZIP: 35242 BUSINESS PHONE: 2059701255 MAIL ADDRESS: STREET 1: P.O. BOX 1208 CITY: BIRMINGHAM STATE: AL ZIP: 35201-1208 11-K 1 ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 BIRMINGHAM STEEL CORPORATION 401(k) PLAN (Full Title of the Plan) BIRMINGHAM STEEL CORPORATION 1000 URBAN CENTER DRIVE SUITE 300 BIRMINGHAM, AL 35242 (Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office) Birmingham Steel Corporation 401(k) Plan Financial Statements and Supplemental Schedules Years ended December 31, 1996 and 1995 with Report of Independent Auditors Birmingham Steel Corporation 401(k) Plan Financial Statements and Supplemental Schedules Years ended December 31, 1996 and 1995 Contents Report of Independent Auditors..............................................F-1 Audited Financial Statements Statements of Net Assets Available for Benefits.............................F-2 Statements of Changes in Net Assets Available for Benefits..................F-3 Notes to Financial Statements...............................................F-4 Supplemental Schedules Item 27a - Schedule of Assets Held for Investment Purposes.................F-14 Item 27d - Schedule of Reportable Transactions.............................F-15 Report of Independent Auditors The Employee Benefits Committee Birmingham Steel Corporation 401(k) Plan We have audited the accompanying statements of net assets available for benefits of the Birmingham Steel Corporation 401(k) Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1996, and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1996 basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1996 basic financial statements taken as a whole. May 9, 1997 F-1 Birmingham Steel Corporation 401(k) Plan Statements of Net Assets Available for Benefits December 31 1996 1995 ------------------------------ Assets Investments $ 46,788,921 $ 37,826,468 Receivables: Employer contributions 947,214 986,361 Employee contributions 426,732 454,599 Employee loans 3,468,650 2,924,907 Accrued interest 9,687 7,596 ------------------------------ 4,852,283 4,373,463 Cash and cash equivalents - 11,306 ------------------------------ 51,641,204 42,211,237 Liabilities Benefit claims payable - (73,007) ------------------------------ Net assets available for benefits $ 51,641,204 $ 42,138,230 ============================== See accompanying notes. F-2 Birmingham Steel Corporation 401(k) Plan Statements of Changes in Net Assets Available for Benefits Year ended December 31 1996 1995 -------------------------- Additions to net assets attributed to: Investment income: Net appreciation in fair value of investments $ 1,967,108 $ 1,092,051 Interest 2,998,756 2,332,877 Dividends 108,493 89,431 ------------------------- 5,074,357 3,514,359 Contributions: Employer 2,902,244 3,087,805 Employee 5,245,362 5,204,219 ------------------------- 8,147,606 8,292,024 Transfer of assets from related plan - 6,363,232 ------------------------- 13,221,963 18,169,615 Deduction from net assets attributed to: Payments to participants (3,718,989) (5,008,352) ------------------------- Net increase 9,502,974 13,161,263 Net assets available for benefits: Beginning of year 42,138,230 28,976,967 ------------------------- End of year $51,641,204 $42,138,230 ========================= See accompanying notes. F-3 Birmingham Steel Corporation 401(k) Plan Statements of Changes in Net Assets Available for Benefits 1. Description of the Plan General The Birmingham Steel Corporation 401(k) Plan (the "Plan"), is a defined contribution plan established effective as of August 15, 1984. Effective January 1, 1995, the American Steel and Wire Corporation Savings and Retirement Plan was merged into the Plan. In connection with the merger, the Plan was restated to allow participation by qualifying employees of American Steel and Wire. Net assets of $6,363,232 were transferred into the Plan as a result of the merger. The following description of the Plan provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. Participation The Plan covers substantially all employees of Birmingham Steel Corporation and certain affiliated companies (collectively, the "Company"). Employees may begin participation in the Plan at the earlier of the January 1, April 1, July 1, or October 1 following employment. Company Contributions Company contributions to the Plan are accrued in the period in which they become obligations of the Company. In 1996 and 1995, the Company contributed to each participant's account an amount equal to the sum of (a) 5% of each participant's compensation up to $10,000; plus (b) the lesser of: (i) the amount of each active participant's employee contributions, or (ii) 3% of each participant's eligible compensation. The Company may, from time to time, change the method of determining its contribution. F-4 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Employee Contributions Participants may make employee contributions to the Plan by electing to reduce their gross pay in an amount which is not less than one percent or more than fifteen percent of annual compensation, subject to certain limitations. Participant Accounts The Plan provides for the establishment of an employee account and an employer account for each participating employee. Each participant's account is credited with the participant's contributions and an allocation of the Company's contribution and plan earnings. Generally, employer contributions are allocated to participants' accounts at the time of payment, rather than at the time such contributions are recorded in the Plan's financial statements. Allocations of employer contributions are based on eligible annual compensation as defined in the Plan agreement. Benefit payments to participants are based upon vested balances in the employee and employer accounts at the date of benefit determination. Vesting Participants are immediately vested in their employee account including allocated earnings thereon. Vesting in their employer account is based on years of continuous service. Service for vesting begins with the participant's employment date, but not prior to July 1, 1980. Participants are fully vested at the earlier of death, disability, reaching normal retirement age or in accordance with the following schedule: F-5 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Years of Vested Service Interest - ------------------------------------------------------------------------------ Less than 1 0% 1 20% 2 40% 3 60% 4 80% 5 or more 100% Forfeitures Forfeitures of participants' non-vested interest in Company contributions, and allocated earnings thereon, may be used to offset the annual Company contributions to the Plan. There were no forfeitures used to reduce the Company's contribution in 1996. Forfeitures of approximately $150,000 were used to offset Company contributions in 1995. Payment of Benefits Upon termination of service, participants may receive either (a) a single sum payment, or (b) annual or more frequent periodic installments over a period of the lesser of thirty years or the joint life expectancy of the participant and his beneficiary (where applicable), as determined by the Employee Benefits Committee (the Committee). F-6 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Investment Programs The Plan allows participants to direct the investment of their accounts by selecting among six investment alternatives: - A fund comprised primarily of the common stock of the Company; - A managed guaranteed investment contract (GIC) fund which invests in fixed income securities; - A basic value fund composed primarily of common stocks; - A capital fund composed of stocks and bonds; - A special value fund composed of stocks and bonds; and - A global allocation fund composed primarily of common stocks and fixed income securities of both domestic and foreign companies. Except for the Birmingham Steel Corporation Stock Fund, the investment funds are managed by the trustee of the Plan, Merrill Lynch Trust Company, or by an affiliate of the trustee (hereinafter referred to as the Trustee). All assets held in the investment funds, including Birmingham Steel Corporation common stock, were purchased in the open market and are held by the Trustee. Loans The Plan allows Participants to borrow up to one-half of their total vested account balance up to a maximum of $50,000. Loans may be repaid over terms up to five years (fifteen years for loans used to purchase residential property) and include a reasonable rate of interest. F-7 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 2. Summary of Accounting Policies Investments Investments in common stock and mutual funds are stated at their quoted market values. Other investments are stated at cost, which approximates market values. Investment transactions are recorded as of the trade date. Cost of common stock and mutual fund shares is determined by the specific identification method. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Concentration of Credit Risk At December 31, 1996, approximately 10% of the Plan's assets are invested in the common stock of the Company and approximately 83% of such assets are comprised of investments in mutual funds managed by the Trustee. The six investment options offered to participants are designed to provide each participant the opportunity to diversify the investment of their accounts. Although the Committee has no involvement in the investment transactions of the mutual funds, the Committee periodically monitors the investment performance of the funds and may, pursuant to the provisions of the Plan agreement, elect to change the Plan's investment programs and/or the trustee at any time. At December 31, 1996, approximately 4% of the Company's labor force is employed under a collective bargaining agreement. F-8 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 3. Investments Investments that represent 5% or more of the Plan's net assets available for benefits at December 31, 1996 and 1995 are as follows: 1996 ----------------------------------------------- Name of Issuer and Title Shares Market Value Cost - ------------------------------------------------------------------------------- Birmingham Steel Corporation common stock 274,622 $ 5,217,825 $ 5,209,721 Merrill Lynch Retirement Preservation Trust 22,296,663 22,296,663 22,296,663 Merrill Lynch Basic Value Fund 301,327 9,341,136 7,544,200 Merrill Lynch Capital Fund 278,174 8,637,295 7,903,005 1995 ----------------------------------------------- Name of Issuer and Title Shares Market Value Cost - ------------------------------------------------------------------------------- Birmingham Steel Corporation common stock 250,871 $ 3,731,712 $ 4,938,477 Merrill Lynch Retirement Preservation Trust 19,438,272 19,438,272 19,438,272 Merrill Lynch Basic Value Fund 240,717 6,814,699 5,584,200 Merrill Lynch Capital Fund 243,902 7,451,220 6,735,218 Net appreciation (depreciation) in fair value of investments for the years ended December 31, 1996 and 1995, including securities sold during the year, was as follows: 1996 1995 ------------------------------- Birmingham Steel Corporation common stock $ 1,080,167 $ (1,146,101) Mutual funds 886,941 2,238,152 ------------------------------- $ 1,967,108 $ 1,092,051 =============================== F-9 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 4. Investment Programs Net assets available for benefits and changes in net assets available for benefits at December 31, 1996 and 1995, and for the years then ended, for each of the Plan's investment programs are as follows:
Stock GIC Basic Capital Special Global Loan Fund Fund Fund Fund Fund Fund Fund Total -------------------------------------------------------------------------------------------------------- December 31, 1996 Investments $ 5,217,825 $22,296,663 $ 9,341,136 $ 8,637,295 $ 468,315 $ 827,687 $ - $46,788,921 Receivables: Employer contributions 55,887 557,684 147,288 139,587 19,302 27,466 - 947,214 Employee contributions 28,539 225,737 77,371 72,890 9,345 12,850 - 426,732 Employee loans - - - - - - 3,468,650 3,468,650 Accrued interest - 9,687 - - - - - 9,687 -------------------------------------------------------------------------------------------------------- 84,426 793,108 224,659 212,477 28,647 40,316 3,468,650 4,852,283 Cash and cash equivalents - - - - - - - - -------------------------------------------------------------------------------------------------------- Net assets available for benefits $ 5,302,251 $23,089,771 $ 9,565,795 $ 8,849,772 $ 496,962 $ 868,003 $ 3,468,650 $ 51,641,204 ========================================================================================================
Stock GIC Basic Capital Special Global Loan Fund Fund Fund Fund Fund Fund Fund Total -------------------------------------------------------------------------------------------------------- December 31, 1995 Investments $ 3,731,712 $19,438,272 $ 6,814,699 $ 7,451,220 $ 138,112 $ 252,453 $ - $ 37,826,468 Receivables: Employer contributions 69,089 612,836 136,969 140,518 10,782 16,167 - 986,361 Employee contributions 39,600 254,628 72,533 76,190 4,684 6,964 - 454,599 Employee loans - - - - - - 2,924,907 2,924,907 Accrued interest - 7,596 - - - - - 7,596 -------------------------------------------------------------------------------------------------------- 108,689 875,060 209,502 216,708 15,466 23,131 2,924,907 4,373,463 Cash and cash equivalents 11,306 - - - - - - 11,306 Benefits payable (5,716) (39,012) (10,956) (11,475) (186) (288) (5,374) (73,007) -------------------------------------------------------------------------------------------------------- Net assets available for benefits $ 3,845,991 $20,274,320 $ 7,013,245 $ 7,656,453 $ 153,392 $ 275,296 $ 2,919,533 $ 42,138,230 ========================================================================================================
F-10 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 4. Investment Programs (continued)
Stock GIC Basic Capital Special Global Loan Fund Fund Fund Fund Fund Fund Fund Total -------------------------------------------------------------------------------------------------------- Net assets available for benefits as of December 31, 1994 $ 4,102,609 $14,429,605 $ 3,942,031 $ 4,456,188 $ - $ - $ 2,046,534 $ 28,976,967 Investment income (loss) (1,056,670) 1,086,270 1,562,321 1,712,192 13,592 31,686 164,968 3,514,359 Contributions 587,714 4,545,158 1,357,054 1,516,476 98,996 186,626 - 8,292,024 Fund transfers 604,442 (1,409,639) (177,106) (224,685) 53,545 76,739 1,076,704 - Payments to participants (392,104) (2,676,325) (751,584) (787,170) (12,741) (19,755) (368,673) (5,008,352) Transfer from related plan - 4,299,251 1,080,529 983,452 - - - 6,363,232 -------------------------------------------------------------------------------------------------------- Net assets available for benefits as of December 31, 1995 3,845,991 20,274,320 7,013,245 7,656,453 153,392 275,296 2,919,533 42,138,230 Investment income 1,188,660 1,225,872 1,310,317 963,522 67,731 81,056 237,199 5,074,357 Contributions 621,276 4,307,295 1,421,818 1,382,554 143,246 271,417 - 8,147,606 Fund transfers 119,427 (749,155) 177,722 (436,302) 136,895 247,298 504,115 - Payments to participants (473,103) (1,968,561) (357,307) (716,455) (4,302) (7,064) (192,197) (3,718,989) -------------------------------------------------------------------------------------------------------- Net assets available for benefits as of December 31, 1996 $ 5,302,251 $23,089,771 $ 9,565,795 $ 8,849,772 $ 496,962 $ 868,003 $ 3,468,650 $ 51,641,204 ========================================================================================================
F-11 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 5. Income Tax Status The Internal Revenue Service has ruled on May 15, 1996 that the Plan qualified under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is exempt from tax pursuant to Section 501(a) of the IRC. The Plan is required to operate in conformity with the IRC to maintain its qualification. The plan administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 6. Transactions with Parties-In-Interest During the years ended December 31, 1996 and 1995, the Plan received $108,493 and $89,431, respectively, in cash dividends on common stock of the Company held by the Plan. The Trustee executed all investment transactions for the years ended December 31, 1996 and 1995. The Company has paid all administrative expenses of the Plan, including legal, accounting and trustee fees. 7. Plan Termination Although management has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Securities Act of 1974. In the event of Plan termination, participants will become 100% vested in their accounts in accordance with the provisions of the Plan. 8. Accounts of Terminated Employees Under the provisions of the Plan, the individual accounts of terminated employees may remain in the Plan until a break in service, as defined, occurs. The accounts of such employees share in the allocation of investment income but are not allocated a share of annual Company contributions. Once such employees experience a break in service, the vested portion of their accounts will be paid in accordance with the provisions of the Plan. At December 31, 1996 and 1995, approximately $2,653,000 and $1,921,000, respectively, of the net assets of the Plan were allocated to terminated employees. These amounts are included in net assets available for benefits in the accompanying financial statements, however, they are reported as liabilities in the Plan's Form 5500. F-12 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) 9. Sale of the Bolt Division In March 1995, the Company divested its Bolt division. Accordingly, participants who were employees of the Bolt division became 100% vested. Distributions to such individuals have been included in benefit payments. F-13 Supplemental Schedules Birmingham Steel Corporation 401(k) Plan Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1996 Number of Cost Basis Current Value Shares or of Investment of Investment Principal at End of at End of Name of Issuer and Title Amount Period Period - -------------------------------------------------------------------------------- Investments: Birmingham Steel Corporation common stock* 274,622 $ 5,209,721 $ 5,217,825 Merrill Lynch Retirement Preservation Trust* 22,296,663 22,296,663 22,296,663 Merrill Lynch Basic Value Fund* 301,327 7,544,200 9,341,136 Merrill Lynch Capital Fund* 278,174 7,903,005 8,637,295 Merrill Lynch Special Value Fund * 26,266 459,756 468,315 Merrill Lynch Global Allocation Fund * 56,886 812,248 827,687 Employee loans to be repaid over terms up to five years (fifteen years for loans used to purchase residential property) and include a reasonable rate of interest 3,468,650 3,468,650 ------------------------------ $ 47,694,243 $ 50,257,571 ============================== * Indicates party-in-interest to the Plan. F-14 Birmingham Steel Corporation 401(k) Plan
Item 27d - Schedule of Reportable Transactions Year ended December 31, 1996 Number of Current Value of Number of Shares or Purchase Selling Cost Asset on Name of Issuer and Title Transactions Face Value Price Price of Asset Transaction Date Net Gain - --------------------------------------------------------------------------------------------------------------------------------- Merrill Lynch Retirement Preservation Trust Purchases 363 6,828,559 $6,828,559 $ - $ - $6,828,559 $ - Sales 264 3,970,168 - 3,970,168 3,970,168 3,970,168 - Merrill Lynch Basic Value Fund Purchases 231 89,825 2,637,384 - - 2,637,384 - Sales 179 29,215 - 830,901 677,384 830,901 153,517 Merrill Lynch Capital Fund Purchases 221 85,171 2,413,331 - - 2,413,331 - Sales 194 50,899 - 1,367,207 1,245,544 1,367,207 121,663
F-15 Consent of Ernst & Young, LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-23563) pertaining to the Birmingham Steel Corporation 401(k) Plan of our report dated May 9, 1997, with respect to the financial statements and schedules of the Birmingham Steel Corporation 401(k) Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1996. Ernst & Young, LLP ------------------ Ernst & Young, LLP Birmingham, Alabama June 25, 1997 SIGNATURES THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1923, the trustee (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Date: June 27, 1997 BIRMINGHAM STEEL CORPORATION 401(K) PLAN by: Birmingham Steel Corporation Philip L. Oakes --------------------------------- Philip L. Oakes-Member of the Employee Benefits Committee of the Plan and Vice President, Human Resources -----END PRIVACY-ENHANCED MESSAGE-----