-----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, JxHTR6t8lvg/EgoBfMI/yCMvcM4e5fV0jHAJI+Np+UnL3e95086hcmea51wVsYc3 F+EwRXbIDN1+4ILG29VsdQ== 0000779334-98-000024.txt : 19980701 0000779334-98-000024.hdr.sgml : 19980701 ACCESSION NUMBER: 0000779334-98-000024 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980630 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: SEC FILE NUMBER: 001-09820 FILM NUMBER: 98657949 BUSINESS ADDRESS: STREET 1: 1000 URBAN CENTER PARKWAY STREET 2: SUITE 300 CITY: BIRMINGHAM STATE: AL ZIP: 35242 BUSINESS PHONE: 2059701256 MAIL ADDRESS: STREET 1: P.O. BOX 1208 CITY: BIRMINGHAM STATE: AL ZIP: 35201-1208 11-K 1 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, 1997 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, 1997 and 1996 with Report of Independent Auditors Birmingham Steel Corporation 401(k) Plan Financial Statements and Supplemental Schedules Years ended December 31, 1997 and 1996 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 Line 27a - Schedule of Assets Held for Investment Purposes...............F-12 Line 27d - Schedule of Reportable Transactions...........................F-13 F-1 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, 1997 and 1996, 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, 1997 and 1996, 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, 1997, 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 1997 basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1997 basic financial statements taken as a whole. /s/ Ernst & Young LLP June 25, 1998 Birmingham Steel Corporation 401(k) Plan Statements of Net Assets Available for Benefits F-2 December 31 1997 1996 --------------------------------------------- Assets Cash and cash equivalents $ 161 $ - Investments 56,996,490 46,788,921 Receivables: Employer contributions 1,032,426 947,214 Employee contributions 463,510 426,732 Employee loans 4,299,285 3,468,650 Accrued interest 12,773 9,687 --------------------------------------------- 5,807,994 4,852,283 ============================================= Net assets available for benefits $ 62,804,645 $ 51,641,204 ============================================= See accompanying notes. Birmingham Steel Corporation 401(k) Plan Statements of Changes in Net Assets Available for Benefits F-3 Year ended December 31 1997 1996 ------------------------------------------- Additions to net assets attributed to: Investment income: Net appreciation in fair value of investments $ 1,905,128 $ 1,967,108 Interest 3,930,474 2,998,756 Dividends 111,396 108,493 ------------------------------------------- 5,946,998 5,074,357 Contributions: Employer 3,264,314 2,902,244 Employee 6,274,018 5,245,362 ------------------------------------------ 9,538,332 8,147,606 Deduction from net assets attributed to: Payments to participants (4,321,889) (3,718,989) ------------------------------------------- Net increase 11,163,441 9,502,974 Net assets available for benefits: Beginning of year 51,641,204 42,138,230 ------------------------------------------- End of year $ 62,804,645 $ 51,641,204 =========================================== See accompanying notes. Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements December 31, 1997 and 1996 F-4 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. 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 an affiliated company (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 1997 and 1996, 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. 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 Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) F-5 1. Description of the Plan (continued) 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: 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 contributions in 1997 and 1996. 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 1. Description of the Plan (continued) Investment Programs The Plan allows participants to direct the investment of their accounts by selecting among seven investment alternatives: o A fund comprised primarily of the common stock of the Company; o A collective trust which invests in fixed income securities such as guaranteed investment contracts (GIC); o A basic value fund composed primarily of common stocks; A capital fund composed of stocks and bonds; o A special value fund composed of stocks and bonds; A global allocation fund composed primarily of common stocks and fixed income securities of both domestic and foreign companies; and A collective trust which invests in equity securities listed in the S&P 500 stock index. Except for the Birmingham Steel Corporation Stock Fund, the investment funds and trusts 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. Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) F-7 2. Summary of Accounting Policies Investments Investments in common stock, mutual funds and trusts 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, 1997, approximately 7% of the Plan's assets are invested in the common stock of the Company and approximately 83% of the Plan's assets are comprised of investments in mutual funds or trusts managed by the Trustee. The seven 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, 1997, approximately 4% of the Company's labor force is employed under a collective bargaining agreement. Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) F-8 3. Investments Investments that represent 5% or more of the Plan's net assets available for benefits at December 31, 1997 and 1996 are as follows:
1997 ------------------------------------------------------------------ Name of Issuer and Title Shares Market Value Cost - ---------------------------------------------------------------------------------------------------------- Birmingham Steel Corporation common stock 296,385 $ 4,668,090 $ 5,460,111 Merrill Lynch Retirement Preservation Trust 24,661,553 24,661,553 24,661,553 Merrill Lynch Basic Value Fund 359,381 13,325,831 10,150,715 Merrill Lynch Capital Fund 314,314 10,846,962 9,374,484 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
Net appreciation (depreciation) in fair value of investments for the years ended December 31, 1997 and 1996, including securities sold during the year, was as follows: 1997 1996 --------------------------------------------- Birmingham Steel Corporation common stock $ (861,197) $ 1,080,167 Mutual funds 2,766,325 886,941 ============================================= $ 1,905,128 $ 1,967,108 ============================================= Birmingham Steel Corporation 401(k) Plan Notes to Financial Statements (continued) F-9 4. Investment Programs Net assets available for benefits at December 31, 1997 and 1996 for each of the Plan's investment programs are as follows:
Stock Preservation Basic Capital Special Global Equity Loan Fund Trust Fund Fund Fund Fund Trust Fund Total -------------------------------------------------------------------------------------------------------- December 31, 1997 Cash and cash equivalents $ - $ 161 $ - $ - $ - $ - $ - $ - $ 161 Investments 4,668,090 24,661,553 13,325,831 10,846,962 1,630,473 1,444,455 419,126 - 56,996,490 Receivables: Employer contributions 71,134 523,594 171,717 154,405 48,064 46,886 16,626 - 1,032,426 Employee contributions 39,905 196,105 85,409 76,916 29,058 26,597 9,520 - 463,510 Employee loans - - - - - - - 4,299,285 4,299,285 Accrued interest - 12,773 - - - - - - 12,773 --------------------------------------------------------------------------------------------------------- 111,039 732,472 257,126 231,321 79,122 73,483 26,146 4,299,285 5,807,994 ========================================================================================================= Net assets available for benefits $4,779,129 $25,394,186 $13,582,957 $11,078,283 $1,707,595 $1,517,938 $445,272 $4,299,285 $62,804,645 ========================================================================================================== 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 ========================================================================================================= 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 =========================================================================================================
F-10 4. Investment Programs (continued) Changes in net assets available for benefits for the years ended December 31, 1997 and 1996 for each of the Plan's investment programs are as follows:
Stock Preservation Basic Capital Special Global Equity Loan Fund Trust Fund Fund Fund Fund Trust Fund Total ---------------------------------------------------------------------------------------------------------- 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 Investment income (749,801) 1,402,932 2,854,305 1,878,805 152,983 111,650 15,278 280,846 5,946,998 Contributions 792,782 4,256,671 1,762,041 1,540,382 522,014 579,452 84,990 - 9,538,332 Fund transfers (420,235) (1,607,580) 438,506 (286,506) 653,452 19,616 345,004 857,743 - Payments to participants (145,868) (1,747,608) (1,037,690) (904,170) (117,816) (60,783) - (307,954) (4,321,889) ------------------------------------------------------------------------------------------------------------- Net assets available for benefits as of December 31, 1997 $4,779,129 $25,394,186 $13,582,957 $11,078,283 $1,707,595 $1,517,938 $ 445,272 $4,299,285 $62,804,645 =============================================================================================================
F-11 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, 1997 and 1996, the Plan received $111,396 and $108,493, 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, 1997 and 1996. 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, 1997 and 1996, approximately $2,350,000 and $2,653,000, respectively, of the net assets of the Plan were allocated to terminated employees. Of these amounts, $160 and $494,660 related to terminated employees who had requested distribution but are included in net assets available for benefits in the accompanying financial statements as of December 31, 1997 and 1996, respectively. This amount has been reported as a liability in the Plan's Form 5500. Birmingham Steel Corporation 401(k) Plan Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1997 EIN 13-3213634 Plan No. 001 F-12
Number of Shares or Name of Issuer and Title Principal Amount Cost Current Value - ---------------------------------------------------------------------------------------------------------- Investments: Birmingham Steel Corporation common stock* 296,385 $ 5,460,111 $ 4,668,090 Merrill Lynch Retirement Preservation Trust* 24,661,553 24,661,553 24,661,553 Merrill Lynch Basic Value Fund* 359,381 10,150,715 13,325,831 Merrill Lynch Capital Fund* 314,314 9,374,484 10,846,962 Merrill Lynch Special Value Fund * 83,486 1,647,761 1,630,473 Merrill Lynch Equity Index Trust * 6,411 402,500 419,126 Merrill Lynch Global Allocation Fund * 102,154 1,513,615 1,444,455 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 * 4,299,285 4,299,285 -------------------------------------------- $ 57,510,024 $ 61,295,775 ============================================ * Indicates party-in-interest to the Plan.
F-13 Birmingham Steel Corporation 401(k) Plan Line 27d - Schedule of Reportable Transactions Year ended December 31, 1997 EIN 13-3213634 Plan No. 001
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 657 7,782,498 $7,782,498 $ - $ 7,782,498 $ 7,782,498 $ - Sales 502 5,417,608 - 5,417,608 5,417,608 5,417,608 - Merrill Lynch Basic Value Fund Purchases 361 122,835 4,423,770 - 4,423,770 4,423,770 - Sales 317 56,785 - 2,011,143 1,627,718 2,011,143 383,425 Merrill Lynch Capital Fund Purchases 347 91,752 3,102,191 - 3,102,191 3,102,191 - Sales 360 52,710 - 1,775,227 1,543,937 1,775,227 231,290
EXHIBIT 23 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 June 25, 1998, 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, 1997. /s/Ernst & Young LLP -------------------- Ernst & Young LLP Birmingham, Alabama June 25, 1998 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 29, 1998 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-----