-----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, lgsQu7m22QRM8qm4wWTqWCYAlfuQhqQV5lTsGZ0yWHCESPxaCfcSU8LYqAM/xa2C YH1TGpRXDZfb7ga/i8zZGw== 0000950124-95-001405.txt : 19950511 0000950124-95-001405.hdr.sgml : 19950511 ACCESSION NUMBER: 0000950124-95-001405 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09117 FILM NUMBER: 95536072 BUSINESS ADDRESS: STREET 1: 30 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3128993917 MAIL ADDRESS: STREET 1: 30 WEST MONROE STREET STREET 2: 16TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 10-Q 1 10-Q 1 FIRST QUARTER - 1995 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q _________________________ [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1995 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ _________________________ Commission file number 1-9117 I.R.S. Employer Identification Number 36-3425828 INLAND STEEL INDUSTRIES, INC. (a Delaware Corporation) 30 West Monroe Street Chicago, Illinois 60603 Telephone: (312) 346-0300 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 48,621,143 shares of the Company's Common Stock ($1.00 par value) were outstanding as of May 5, 1995. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions (except per share data) ----------------------- Three Months Ended March 31 -------------------------- 1995 1994 ------ ------ NET SALES $1,257.7 $1,075.7 -------- -------- OPERATING COSTS AND EXPENSES Cost of goods sold 1,077.8 957.1 Selling, general and administrative expenses 51.7 48.7 Depreciation 36.5 33.7 -------- -------- Total 1,166.0 1,039.5 -------- -------- OPERATING PROFIT 91.7 36.2 General corporate expense, net of income items 4.0 3.3 Interest and other expense on debt 15.8 18.3 -------- -------- INCOME BEFORE INCOME TAXES 71.9 14.6 PROVISION FOR INCOME TAXES 27.9 5.4 -------- -------- NET INCOME $ 44.0 $ 9.2 ======== ======== EARNINGS PER SHARE OF COMMON STOCK Primary $ .84 $ .03 ======== ======== Fully Diluted $ .79 $ .03 ======== ========
See notes to consolidated financial statements -1- 3 INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions --------------------------- Three Months Ended March 31 -------------------------- 1995 1994 ------ ------ OPERATING ACTIVITIES Net income $ 44.0 $ 9.2 -------- -------- Adjustments to reconcile net income to net cash provided from operating activities: Depreciation 36.7 33.8 Deferred employee benefit cost 1.9 11.0 Deferred income taxes 12.0 3.7 Change in: Receivables (25.1) (39.6) Inventories (38.0) (6.2) Accounts payable (35.2) (6.4) Accrued salaries and wages (14.9) (4.2) Other accrued liabilities 41.7 15.5 Other deferred items 12.7 13.4 -------- -------- Net adjustments (8.2) 21.0 -------- -------- Net cash provided from operating activities 35.8 30.2 -------- -------- INVESTING ACTIVITIES Capital expenditures (24.6) (94.7) Investments in and advances to joint ventures, net (1.1) 4.7 Proceeds from sales of assets .5 .3 -------- -------- Net cash used for investing activities (25.2) (89.7) -------- -------- FINANCING ACTIVITIES Long-term debt retired (5.4) (80.0) Dividends paid (4.4) (6.2) Acquisition of treasury stock (.2) (1.2) -------- -------- Net cash used for financing activities (10.0) (87.4) -------- -------- Net increase (decrease) in cash and cash equivalents .6 (146.9) Cash and cash equivalents - beginning of year 107.1 250.5 -------- -------- Cash and cash equivalents - end of period $ 107.7 $ 103.6 ======== ======== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest (net of amount capitalized) $ 4.5 $ 7.5 Income tax, net 1.1 .4 Non-cash investing and financing activities: Long-term debt acquired in purchase of assets - 63.3
See notes to consolidated financial statements -2- 4 INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions ----------------------------------------------------------- March 31, 1995 December 31, 1994 ------------------------ --------------------- ASSETS (unaudited) - ------ CURRENT ASSETS Cash and cash equivalents $ 107.7 $ 107.1 Receivables 528.7 503.6 Inventories - principally at LIFO In process and finished products $ 411.4 $ 363.8 Raw materials and supplies 56.1 467.5 65.7 429.5 --------- --------- Deferred income taxes 41.8 41.3 --------- --------- Total current assets 1,145.7 1,081.5 INVESTMENTS AND ADVANCES 217.5 225.1 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost 4,292.1 4,269.2 Less: Reserve for depreciation, amortization and depletion 2,594.5 2,558.2 Allowance for terminated facilities 100.7 1,596.9 100.7 1,610.3 --------- -------- DEFERRED INCOME TAXES 366.5 379.0 OTHER ASSETS 57.7 57.5 --------- --------- Total Assets $ 3,384.3 $ 3,353.4 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 318.1 $ 351.2 Accrued liabilities 220.9 194.1 Long-term debt due within one year 19.5 19.5 --------- --------- Total current liabilities 558.5 564.8 LONG-TERM DEBT 700.5 705.9 DEFERRED EMPLOYEE BENEFITS 1,303.1 1,301.2 OTHER CREDITS 47.3 49.4 --------- --------- Total liabilities 2,609.4 2,621.3 REDEEMABLE PREFERRED STOCK 185.0 185.0 COMMON STOCK REPURCHASE COMMITMENT 37.9 37.9 STOCKHOLDERS' EQUITY (Schedule A) 552.0 509.2 --------- --------- Total Liabilities, Redeemable Preferred Stock, and Stockholders' Equity $ 3,384.3 $ 3,353.4 ========= =========
See notes to consolidated financial statements -3- 5 INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________ NOTE 1/FINANCIAL STATEMENTS Results of operations for any interim period are not necessarily indicative of results of any other periods or for the year. The financial statements as of March 31, 1995 and for the three-month periods ended March 31, 1995 and 1994 are unaudited, but in the opinion of management include all adjustments necessary for a fair presentation of results for such periods. These financial statements should be read in conjunction with the financial statements and related notes contained in the Annual Report to Stockholders for the year ended December 31, 1994. NOTE 2/COMMITMENTS The total amount of firm commitments of the Company and its subsidiaries to contractors and suppliers, primarily in connection with additions to property, plant and equipment, was $42 million on March 31, 1995, unchanged from year end 1994. -4- 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - Comparison of First Quarter 1995 to First Quarter 1994 The Company reported first quarter 1995 consolidated net income of $44.0 million, the Company's best quarter since the second quarter of 1989, compared with net income of $9.2 million in the comparable year-earlier period. Improved operating results at both the Steel Manufacturing segment and Materials Distribution segment were the principal factors for the improvement. Also contributing to the improvement was lower consolidated interest expense. Consolidated net sales increased 17 percent to a record $1.26 billion in the 1995 quarter from $1.08 billion in the 1994 first quarter, the result of higher volume and improved average selling price. The Steel Manufacturing segment's net sales of $651.7 million in the first quarter of 1995 represented a 10 percent improvement from the year-ago period. The average selling price of steel mill products shipped rose 8 percent from the year-ago period reflecting, in part, the continued overall strength of the market, while steel mill shipments increased 2 percent to 1,282,000 tons. In spite of interruptions caused by unscheduled equipment outages, operating profit in the quarter jumped to $51.3 million from $13.6 million in the comparable 1994 quarter. The sales improvement was the primary factor leading to the increase. The Materials Distribution segment reported record operating profit in the quarter of $42.1 million, up from $21.4 million a year earlier. The improvement was due in large part to an increase in net sales, which rose 21 percent to $652.3 million from $538.6 million in the 1994 quarter, reflecting continued strong business conditions. The net sales increase was due to a 14 percent increase in average selling price, reflecting in part the recovery of higher materials costs from suppliers, and a 7 percent increase in volume. Liquidity and Financing The Company's cash and cash equivalents of $107.7 million at March 31, 1995 was virtually unchanged from the $107.1 million reported at year-end 1994. There was no short-term borrowing at either date. Final documentation has been completed on the new Ryerson unsecured revolving credit facility. The new agreement extends the maturity of the credit facility for five years and increases the amount to $200 million from $100 million. This increases the Company's subsidiaries total committed credit facilities to $325 million. -5- 7 In March, the Company announced the following three actions taken by the Board of Directors. Payment of a common stock dividend was reinstated with an initial quarterly declaration of $.05 per share. Authorization was given for the contribution of $100 million of Company common stock to the Company's pension trust, subject to a cap of 4.4 million shares. The contribution will strengthen the plan's funded status and reduce required cash contributions over the next few years. Authorization was also given for the repurchase of all outstanding shares of Series F Exchangeable Preferred Stock, a voting preferred stock with an outstanding stated value of $185 million and an annual dividend rate of 9.48 percent. While there will be a "breakage fee" of approximately $10 million associated with the repurchase, the action will reduce the Company's annual preferred dividend payments by $17.5 million. -6- 8 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION Consolidated financial statements of Inland Materials Distribution Group, Inc. are set forth in Appendix A to this Quarterly Report on Form 10-Q. Separate consolidated financial statements for Inland Steel Company are set forth in Inland Steel Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 3.(i) Copy of Certificate of Incorporation, as amended, of the Company. (Filed as Exhibit 3.(i) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, and incorporated by reference herein.) 3.(ii) Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3.(ii) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, and incorporated by reference herein.) 4.A Copy of Certificate of Designations, Preferences and Rights of Series A $2.40 Cumulative Convertible Preferred Stock of the Company. (Filed as part of Exhibit B to the definitive Proxy Statement of Inland Steel Company dated March 21, 1986 that was furnished to stockholders in connection with the annual meeting held April 23, 1986, and incorporated by reference herein.) 4.B Copy of Certificate of Designation, Preferences and Rights of Series D Junior Participating Preferred Stock of the Company. (Filed as Exhibit 4-D to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, and incorporated by reference herein.) 4.C Copy of Rights Agreement, dated as of November 25, 1987, as amended and restated as of May 24, 1989, between the Company and The First National Bank of Chicago, as Rights Agent (Harris Trust and Savings Bank, as successor Rights Agent). (Filed as Exhibit 1 to the Company's Current Report on Form 8-K filed on May 24, 1989, and incorporated by reference herein.) 4.D Copy of Certificate of Designations, Preferences and Rights of Series E ESOP Convertible Preferred Stock of the Company. (Filed as Exhibit 4-F to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1989, and incorporated by reference herein.) 4.E Copy of Certificate of Designations, Preferences and Rights of Series F Exchangeable Preferred Stock of the Company. (Filed as Exhibit 4(b) to the Company's Current Report on Form 8-K filed on December 18, 1989, and incorporated by reference herein.) 4.F Copy of Indenture dated as of December 15, 1992, between the Company and Harris Trust and Savings Bank, as Trustee, respecting the Company's $150,000,000 12-3/4% Notes due December 15, 2002. (Filed as Exhibit 4-G to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and incorporated by reference herein.) -7- 9 4.G Copy of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company (the "Steel Company") and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, and of supplemental indentures thereto, to and including the Thirty-Second Supplemental Indenture, incorporated by reference from the following Exhibits: (i) Exhibits B-1(a), B-1(b), B-1(c), B-1(d) and B-1(e), filed with Steel Company's Registration Statement on Form A-2 (No. 2-1855); (ii) Exhibits D-1(f) and D-1(g), filed with Steel Company's Registration Statement on Form E-1 (No. 2-2182); (iii) Exhibit B-1(h), filed with Steel Company's Current Report on Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with Steel Company's Current Report on Form 8-K, dated February 8, 1937; (v) Exhibits B-1(j) and B-1(k), filed with Steel Company's Current Report on Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed with Steel Company's Registration Statement on Form A-2 (No. 2-4357); (vii) Exhibit B-1(l), filed with Steel Company's Current Report on Form 8-K for the month of January, 1945; (viii) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the month of November, 1946; (ix) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the months of July and August, 1948; (x) Exhibits B and C, filed with Steel Company's Current Report on Form 8-K for the month of March, 1952; (xi) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1956; (xii) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1957; (xiii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1959; (xiv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of December, 1967; (xv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of April, 1969; (xvi) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of July, 1970; (xvii) the Exhibit filed with the amendment on Form 8 to Steel Company's Current Report on Form 8-K for the month of April, 1974; (xviii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of September, 1975; (xix) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1977; (xx) Exhibit C, filed with Steel Company's Current Report on Form 8-K for the month of February, 1977; (xxi) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1978; (xxii) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1980; (xxiv) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1982; (xxv) Exhibit 4-E, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel Company's Registration Statement on Form S-2 (No. 33-43393); and (xxvii) Exhibit 4 filed with Steel Company's Current Report on Form 8-K dated June 23, 1993. 4.H Copy of consolidated reprint of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, as amended and supplemented by all supplemental indentures thereto, to and including the Thirteenth Supplemental Indenture. (Filed as Exhibit 4-E to Form S-1 Registration Statement No. 2-9443, and incorporated by reference herein.) 11 Statement of Earnings per Share of Common Stock. 27 Financial Data Schedule (b) Reports on Form 8-K. The Company did not file any reports on Form 8-K during the quarter ended March 31, 1995. -8- 10 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INLAND STEEL INDUSTRIES, INC. By James M. Hemphill ______________________________ James M. Hemphill Controller and Principal Accounting Officer Date: May 10, 1995 -9- 11 Part I -- Schedule A INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY OF STOCKHOLDERS' EQUITY ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions --------------------------------------------------------------------- March 31, 1995 December 31, 1994 -------------------------- --------------------------- (unaudited) STOCKHOLDERS' EQUITY - -------------------- Series A preferred stock ($1 par value) - 94,701 shares issued and outstanding as of March 31, 1995 and December 31, 1994 $ .1 $ .1 Series E preferred stock ($1 par value) - 3,098,628 shares and 3,102,553 shares issued and outstanding as of March 31, 1995 and December 31, 1994, respectively 3.1 3.1 Common stock ($1 par value) - 50,556,350 shares issued as of March 31, 1995 and December 31, 1994 50.6 50.6 Capital in excess of par value 1,092.7 1,095.5 Accumulated deficit Balance beginning of year $(292.4) $(371.9) Net income 44.0 107.4 Dividends Series A preferred stock - $.60 per share in 1995 and $2.40 per share in 1994 - (.2) Series E preferred stock - $3.523 per share in 1994 - (11.0) Income tax benefit - Series E dividend - 2.5 Series F preferred stock - $23.70 per share in 1995 and $94.80 per share in 1994 (4.4) (17.5) Series G preferred stock - $1.54165 per share in 1994 - (1.7) Common stock - $.05 per share in 1995 (2.2) (255.0) - (292.4) ------- ------- Unearned compensation related to ESOP (98.1) (100.5) Common stock repurchase commitment (37.9) (37.9) Investment valuation allowance (3.4) (3.5) Unearned restricted stock award compensation (3.5) (4.0) Treasury stock, at cost - 5,885,650 shares and 6,006,122 shares as of March 31, 1995 and December 31, 1994, respectively (195.0) (200.9) Cumulative translation adjustment (1.6) (.9) ------- ------- Total Stockholders' Equity $ 552.0 $ 509.2 ======= =======
-10- 12 Part I -- Schedule B INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY FINANCIAL INFORMATION FOR BUSINESS SEGMENTS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions ----------------------- Three Months Ended March 31 ------------------------ 1995 1994 ------ ------ NET SALES - --------- Steel Manufacturing Operations $651.7 $590.9 Materials Distribution Operations 652.3 538.6 Eliminations and adjustments (46.3) (53.8) -------- -------- Total Net Sales $1,257.7 $1,075.7 ======== ======== OPERATING PROFIT - ---------------- Steel Manufacturing Operations $ 51.3 $ 13.6 Materials Distribution Operations 42.1 21.4 Eliminations and adjustments (1.7) 1.2 -------- -------- Total Operating Profit $ 91.7 $ 36.2 ======== ========
-11- 13 Exhibit 11 INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES Statement of Earnings Per Share of Common Stock ________________________________________________________________________________ ________________________________________________________________________________
Dollars and Shares in Millions (except per share data) ----------------------- Three Months Ended March 31 ---------------------- 1995 1994 ---- ---- PRIMARY EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 44.6 41.2 Dilutive effect of stock options .1 .4 -------- -------- 44.7 41.6 ======== ======== Net income $ 44.0 $ 9.2 Dividends on preferred stock, net of tax benefit on dividends applicable to leveraged Series E Preferred Stock held by the ESOP 6.5 8.0 -------- -------- Net income applicable $ 37.5 $ 1.2 ======== ======== Primary earnings per share of common stock $ .84 $ .03 ======== ======== FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 44.6 41.2 Assumed conversion of Series A and leveraged Series E Preferred Stock 3.1 3.0 Dilutive effect of stock options .1 .4 -------- -------- 47.8 44.6 ======== ======== Net income $ 44.0 $ 9.2 Dividends on antidilutive preferred stock 4.5 6.3 Additional ESOP funding required on conversion of leveraged Series E Preferred Stock, net of tax 1.8 1.7 -------- -------- Net income applicable $ 37.7 $ 1.2 ======== ======== Fully diluted earnings per share of common stock $ .79 $ .03 ======== ========
NOTE: Series G Preferred Stock was converted to common stock as the result of a redemption call in May 1994. In the three months ended March 31, 1995, the assumed conversion of non-leveraged Series E Preferred Stock was antidilutive. In the three months ended March 31, 1994, the assumed conversion of Series A, non-leveraged Series E, and Series G Preferred Stock were antidilutive. -12- 14 APPENDIX A INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES (A wholly owned subsidiary of Inland Steel Industries, Inc.) CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions ------------------- Three Months Ended March 31 ------------------------ 1995 1994 -------- -------- NET SALES $652.3 $538.6 ------ ------ OPERATING COSTS AND EXPENSES Cost of goods sold 565.0 473.9 Selling, general and administrative expenses 39.8 38.3 Depreciation and amortization 5.4 5.0 ------ ------ Total 610.2 517.2 ------ ------ OPERATING PROFIT 42.1 21.4 General corporate expense (1.8) (1.8) Interest income (expense), net .7 (.8) ------ ------ INCOME BEFORE INCOME TAXES 41.0 18.8 PROVISION FOR INCOME TAXES 16.5 6.0 ------ ------ NET INCOME $24.5 $12.8 ===== =====
See notes to consolidated financial statements A-1 15 INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES (A wholly owned subsidiary of Inland Steel Industries, Inc.) CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions ------------------- Three Months Ended March 31 ---------------------- 1995 1994 -------- -------- OPERATING ACTIVITIES Net income $ 24.5 $ 12.8 ------ ------ Adjustments to reconcile net income to net cash used for operating activities: Depreciation and amortization 5.4 5.0 Deferred employee benefit cost (1.1) (.8) Deferred income taxes 1.1 (.2) Change in: Receivables (63.7) (48.6) Inventories (12.0) (14.3) Other assets (.6) - Accounts payable 13.0 35.0 Payables to related companies 13.8 8.9 Accrued liabilities (4.7) (4.6) ------ ------ Net adjustments (48.8) (19.6) ------ ------ Net cash used for operating activities (24.3) (6.8) ------ ------ INVESTING ACTIVITIES Capital expenditures (3.0) (2.3) Proceeds from sales of assets .3 .3 ------ ------ Net cash used for investing activities (2.7) (2.0) ------ ------ FINANCING ACTIVITIES Long-term debt retired (.6) (.4) Change in notes receivable from related companies 41.9 (2.0) ------ ------ Net cash provided from (used for) financing activities 41.3 (2.4) ------ ------ Net increase (decrease) in cash and cash equivalents 14.3 (11.2) Cash and cash equivalents - beginning of year 2.5 29.5 ------ ------ Cash and cash equivalents - end of period $ 16.8 $ 18.3 ====== ====== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest (net of amount capitalized) $ .8 $ 1.1 Income taxes, net 9.4 5.2
See notes to consolidated financial statements A-2 16 INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES (A wholly owned subsidiary of Inland Steel Industries, Inc.) CONSOLIDATED BALANCE SHEET ________________________________________________________________________________ ________________________________________________________________________________
Dollars in Millions ---------------------------------------------------------- ASSETS March 31, 1995 December 31, 1994 - ------ ------------------------ --------------------------- (unaudited) CURRENT ASSETS Cash and cash equivalents $ 16.8 $ 2.5 Receivables 290.8 227.1 Inventories - principally at LIFO 285.2 273.2 Notes receivable from related companies 15.7 57.6 Deferred income taxes 13.1 13.0 -------- -------- Total current assets 621.6 573.4 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost $463.9 $461.6 Less accumulated depreciation 213.8 250.1 209.1 252.5 ------ ------ DEFERRED INCOME TAXES 25.4 26.6 EXCESS OF COST OVER NET ASSETS ACQUIRED 24.7 25.0 OTHER ASSETS 2.2 1.6 -------- -------- Total Assets $ 924.0 $ 879.1 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 112.8 $ 99.8 Payables to related companies - trade and other 28.6 14.8 Accrued liabilities 23.6 28.3 Long-term debt due within one year 4.7 4.7 -------- -------- Total current liabilities 169.7 147.6 LONG-TERM DEBT 23.0 23.6 DEFERRED EMPLOYEE BENEFITS AND OTHER 126.8 127.9 -------- -------- Total liabilities 319.5 299.1 STOCKHOLDER'S EQUITY 604.5 580.0 -------- -------- Total Liabilities and Stockholder's Equity $ 924.0 $ 879.1 ======== ========
See notes to consolidated financial statements A-3 17 INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES (A wholly owned subsidiary of Inland Steel Industries, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ________________________________________________________________________________ ________________________________________________________________________________ NOTE 1/FINANCIAL STATEMENTS Results of operations for any interim period are not necessarily indicative of results of any other periods or for the year. The financial statements as of March 31, 1995 and for the three-month periods ended March 31, 1995 and 1994 are unaudited, but in the opinion of management include all adjustments necessary for a fair presentation of results for such periods. These financial statements should be read in conjunction with the financial statements and related notes contained in Appendix A of Inland Steel Industries, Inc. Annual Report on Form 10-K for the year ended December 31, 1994. NOTE 2/RELATED PARTY TRANSACTIONS Inland Materials Distribution Group, Inc. ("Distribution") has agreed to procedures established by Inland Steel Industries, Inc. ("Industries") for charging Industries' administrative expenses to the operating companies owned by it. Pursuant to these procedures, Distribution was charged $1.8 million by Industries for each of the first quarters of 1995 and 1994, for management, financial and legal services provided to Distribution. Procedures also have been established to charge interest on all intercompany loans within the Industries group of companies. Such loans currently bear interest at the prime rate. Distribution's net intercompany interest income for the first three months of 1995 totaled $.9 million as compared to $.1 million of interest expense for the first quarter of 1994. Distribution sells to and purchases products from other companies within the Industries group of companies. Such transactions are made at prevailing market prices. These transactions are summarized as follows:
Dollars in Millions ------------------- Three Months Ended March 31 -------------- 1995 1994 ------ ------ Net Product Sales $ 3.4 $ 2.6 Net Product Purchases 44.5 52.8
A-4 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF OPERATIONS, THE CONSOLIDATED BALANCE SHEET, AND THE SUMMARY OF STOCKHOLDERS' EQUITY CONTAINED IN THE QUARTERLY REPORT ON FORM 10-Q TO WHICH THIS EXHIBIT IS ATTACHED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL SCHEDULES 1,000 3-MOS DEC-31-1995 MAR-31-1995 107,700 0 553,700 25,000 467,500 1,145,700 4,292,100 2,695,200 3,384,300 558,500 700,500 50,600 185,000 3,200 498,200 3,384,300 1,257,200 1,257,700 1,113,800 1,114,300 0 0 15,800 71,900 27,900 44,000 0 0 0 44,000 .84 .79
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