-----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, IXLttp8eT4/8e+Qebey5Sp+YUa5PExzsSlZLNz3ZPnIkIdyNLOEBc2hj0joQ+4Y4 SD3kCI8uucgQirNj+ZKuyQ== 0000950131-94-001718.txt : 19941122 0000950131-94-001718.hdr.sgml : 19941122 ACCESSION NUMBER: 0000950131-94-001718 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94558895 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 FORM 10-Q THIRD QUARTER - 1994 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 September 30, 1994 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: 44,472,972 shares of the Company's Common Stock ($1.00 par value per share) were outstanding as of November 7, 1994. 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 Nine Months Ended September 30 September 30 ------------------ ------------------ 1994 1993 1994 1993 -------- ------ -------- -------- NET SALES $1,129.5 $972.0 $3,340.8 $2,909.9 -------- ------ -------- -------- OPERATING COSTS AND EXPENSES Cost of goods sold 975.5 855.1 2,909.6 2,630.9 Selling, general and administrative expenses 49.2 49.5 149.3 146.3 Depreciation 35.6 34.1 105.2 98.2 -------- ------ -------- -------- Total 1,060.3 938.7 3,164.1 2,875.4 -------- ------ -------- -------- OPERATING PROFIT 69.2 33.3 176.7 34.5 -------- ------ -------- -------- General corporate expense, net of income items 4.1 5.1 10.0 18.1 Interest and other expense on debt 17.6 19.2 54.4 58.7 -------- ------ -------- -------- INCOME (LOSS) BEFORE INCOME TAXES 47.5 9.0 112.3 (42.3) PROVISION FOR INCOME TAXES 16.8 8.0Cr. 40.9 25.4Cr. -------- ------ -------- -------- NET INCOME (LOSS) $ 30.7 $ 17.0 $ 71.4 $ (16.9) ======== ====== ======== ======== EARNINGS (LOSS) PER SHARE OF COMMON STOCK: PRIMARY $ .54 $ .25 $ 1.15 $ (1.16) ======== ====== ======== ======== FULLY DILUTED $ .50 $ .23 $ 1.07 $ (1.16) ======== ====== ======== ========
See notes to consolidated financial statements -1- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ================================================================================
Dollars in Millions ------------------- Nine Months Ended September 30 ------------------- 1994 1993 ------- ------ OPERATING ACTIVITIES Net income (loss) $ 71.4 $(16.9) ------- ------ Adjustments to reconcile net income (loss) to net cash provided from operating activities: Depreciation 105.7 98.6 Deferred employee benefit cost 35.6 29.9 Deferred income taxes 36.5 (26.9) Change in: Receivables (45.8) (51.9) Inventories (105.5) 9.8 Accounts payable (12.1) (17.6) Accrued salaries and wages (1.4) (3.7) Other accrued liabilities 12.9 18.3 Other deferred items 19.8 13.0 ------- ------ Net adjustments 45.7 69.5 ------- ------ Net cash provided from operating activities 117.1 52.6 ------- ------ INVESTING ACTIVITIES Capital expenditures (135.3) (57.1) Investments in and advances to joint ventures, net 10.7 (5.0) Proceeds from sales of assets 5.0 3.1 ------- ------ Net cash used for investing activities (119.6) (59.0) ------- ------ FINANCING ACTIVITIES Long-term debt issued 19.7 46.8 Long-term debt retired (171.7) (70.9) Dividends paid (22.3) (24.0) Acquisition of treasury stock (3.7) (3.5) ------- ------ Net cash used for financing activities (178.0) (51.6) ------- ------ Net decrease in cash and cash equivalents (180.5) (58.0) Cash and cash equivalents - beginning of year 250.5 137.7 ------- ------ Cash and cash equivalents - end of period $ 70.0 $ 79.7 ======= ====== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest (net of amount capitalized) $ 44.6 $ 48.3 Income taxes, net 5.5 1.5 Non-cash investing and financing activities: Long-term debt acquired in purchase of assets 63.3 -
See notes to consolidated financial statements -2- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET ===============================================================================
Dollars in Millions --------------------------------------- September 30, 1994 December 31, 1993 ------------------- ------------------ (unaudited) ASSETS - - ------ CURRENT ASSETS Cash and cash equivalents $ 70.0 $ 250.5 Receivables 473.1 427.3 Inventories - principally at LIFO In process and finished products $ 425.3 $ 331.9 Raw materials and supplies 57.1 482.4 45.0 376.9 -------- -------- Deferred income taxes 47.4 44.2 -------- -------- Total current assets 1,072.9 1,098.9 INVESTMENTS AND ADVANCES 209.0 221.0 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost 4,277.9 4,083.7 Less: Reserve for depreciation, amortization and depletion 2,570.6 2,467.6 Allowance for terminated facilities 108.4 1,598.9 108.4 1,507.7 -------- -------- DEFERRED INCOME TAXES 390.0 428.4 INTANGIBLE PENSION ASSET 122.1 122.1 OTHER ASSETS 61.1 57.7 -------- -------- Total Assets $3,454.0 $3,435.8 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY - - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 287.0 $ 300.9 Accrued liabilities 214.3 202.8 Long-term debt due within one year 70.7 98.8 -------- -------- Total current liabilities 572.0 602.5 LONG-TERM DEBT 716.8 777.1 DEFERRED EMPLOYEE BENEFITS 1,406.7 1,371.1 OTHER CREDITS 59.0 61.7 -------- -------- Total liabilities 2,754.5 2,812.4 REDEEMABLE PREFERRED STOCK 185.0 185.0 COMMON STOCK REPURCHASE COMMITMENT 38.0 40.8 STOCKHOLDERS' EQUITY (Schedule A) 476.5 397.6 -------- -------- Total Liabilities, Temporary Equity, and Stockholders' Equity $3,454.0 $3,435.8 ======== ========
See notes to consolidated financial statements -3- 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 September 30, 1994 and for the three-month and nine-month periods ended September 30, 1994 and 1993 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, 1993. NOTE 2/CAPITAL STOCK In the second quarter of 1994, as the result of the Company's call for redemption, shareholders converted the 1.5 million shares of Series G $4.625 Cumulative Convertible Exchangeable Preferred Stock outstanding into 2.7 million shares of the Company's common stock. NOTE 3/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, increased to $63 million on September 30, 1994 from $15 million on December 31, 1993. -4- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - Comparison of Third Quarter 1994 to Third Quarter 1993 - - ------------------------------------------------------------------------------ The Company reported a consolidated net income of $30.7 million in the 1994 third quarter, compared with consolidated net income of $17.0 million in the year-earlier period. The 1993 third quarter net income included an income tax credit provision of approximately $11 million, resulting from the cumulative favorable effect of a change in the federal tax rate from 34 percent to 35 percent. Improved operating profit at both of the Company's business segments was the principal factor in the year-to-year improvement. Consolidated net sales increased 16 percent in the 1994 third quarter to $1.13 billion, the result of higher volume and improved average selling price at both of the Company's business segments. The Integrated Steel segment's net sales increased 14 percent in the current quarter to $614 million, due to a 10 percent increase in the volume of steel mill products shipped and an improvement in the average selling price of 4 percent. Revenue growth continues to outpace the increase in operating costs, and was the principal factor in the segment's improved operating profit of $42.2 million, compared with an operating profit of $22.2 million in the 1993 third quarter. Steel Service Center segment net sales rose 17 percent in the 1993 third quarter to $561 million, due to a 13 percent volume improvement and a 4 percent increase in average selling price per ton. Operating profit increased $15.2 million to $26.9 million due primarily to increased sales. Comparison of First Nine Months of 1994 to First Nine Months of 1993 - - -------------------------------------------------------------------- A consolidated net income of $71.4 million for the first nine months of 1994 compared favorably with a net loss of $16.9 million in the year-earlier period. The principal factor contributing to the year-to-year increase was improved operating results, especially at the Integrated Steel segment. Consolidated net sales of $3.34 billion were 15 percent higher than the first nine months of 1993, due to both higher volume and improved average selling prices at both of the Company's business segments. Integrated Steel segment net sales increased 14 percent to $1.85 billion in the first nine months of 1994 as a result of improved average selling price, which contributed 8 percent of the increase, and higher shipment levels, which added 6 percent. The improvement in average selling price was the principal factor operating profit increased to $102.4 million in the first nine months of 1994 from an operating loss of $7.1 million in the year-earlier period. Steel Service Center segment net sales of $1.65 billion in the first nine months of 1994 were 15 percent higher than the like 1993 period, due to a 12 percent increase in volume and a 3 percent improvement in average selling price. Operating profit for the 1994 period of $72.5 million was 73 percent ahead of the comparable 1993 period. The volume increase was the primary factor accounting for the improvement. -5- Liquidity and Financing - - ----------------------- The Company's cash and cash equivalents at September 30, 1994 were $70 million, compared with $251 million at year-end 1993. There was no short-term borrowing at either date. Cash flow from operating activities during the first nine months of 1994 was positive $117 million, compared with $53 million in the year-earlier period. Net income of $71 million, combined with non-cash expenses of $178 million related to depreciation, deferred employee benefit cost and deferred income taxes more than offset working capital required for increased inventories and receivables. During the first half of 1994, Inland Steel Company redeemed all $75 million of its outstanding Series O, P and Q First Mortgage Bonds and acquired the equity interest in the operating lease of the No. 2 Basic Oxygen Furnace Shop continuous casters for $83 million. In connection with this purchase, Inland Steel Company recorded $63 million of debt. Inland Steel Company also called and subsequently prepaid approximately $48 million of caster-related debt. In addition, in early May, Inland Steel Company called all remaining debt related to this continuous caster facility (approximately $48 million) for prepayment in November 1994. During the second quarter, Inland Steel Company redeemed $20 million principal amount of 8.125 percent Pollution Control Revenue bonds. The redemption was funded largely by the proceeds from the issuance of a like amount of Pollution Control Revenue bonds with a 7.125 percent coupon. The Company called for redemption all outstanding shares of Series G $4.625 Cumulative Convertible Exchangeable Preferred Stock during the second quarter. The call resulted in conversion of 1.5 million shares of Series G Preferred Stock outstanding, increasing the number of shares of common stock outstanding by 2.7 million shares. This will reduce ongoing preferred dividends by approximately $7 million on an annual basis. -6- PART II. OTHER INFORMATION --------------------------- ITEM 5. OTHER INFORMATION Consolidated financial statements for 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 September 30, 1994. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 3(i) Copy of Certificate of Incorporation, as amended, of the Company. 3(ii) Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3-B to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, 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.) 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 -7- 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 September 30, 1994. -8- 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 (Chief Accounting Officer) Date: November 10, 1994 -9- Part I -- Schedule A -------------------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY OF STOCKHOLDERS' EQUITY ================================================================================
Dollars in Millions --------------------------------------------- September 30, 1994 December 31, 1993 -------------------- -------------------- (unaudited) STOCKHOLDERS' EQUITY - - -------------------- Series A preferred stock ($1 par value) - 96,354 shares and 96,589 shares issued and outstanding as of September 30, 1994 and December 31, 1993, respectively $ .1 $ .1 Series E preferred stock ($1 par value) - 3,095,848 shares and 3,114,568 shares issued and outstanding as of September 30, 1994 and December 31, 1993, respectively 3.1 3.1 Series G preferred stock ($1 par value) - 1,500,000 shares issued and outstanding as of December 31, 1993 - 1.5 Common stock ($1 par value) - 50,556,350 shares and 47,854,208 shares issued as of September 30, 1994 and December 31, 1993, respectively 50.6 47.9 Capital in excess of par value 1,097.0 1,113.7 Accumulated deficit Balance beginning of year $(371.9) $(302.3) Net income (loss) 71.4 (37.6) Dividends Series A preferred stock - $1.80 per share in 1994 and $2.40 per share in 1993 (.2) (.2) Series E preferred stock - $1.7615 per share in 1994 and $3.523 per share in 1993 (5.5) (11.0) Income tax benefit - Series E dividend 1.4 3.6 Series F preferred stock - $71.10 per share in 1994 and $94.80 per share in 1993 (13.2) (17.5) Series G preferred stock - $1.54165 per share in 1994 and $4.625 per share in 1993 (1.7) (319.7) (6.9) (371.9) ------- ------- Unearned compensation related to ESOP (103.4) (112.2) Common stock repurchase commitment (38.0) (40.8) Investment valuation allowance (3.3) (5.2) Unearned restricted stock award compensation (2.9) (2.1) Treasury stock, at cost - 6,137,667 shares and 6,767,139 shares as of September 30, 1994 and December 31, 1993, respectively (207.0) (236.5) ------- -------- Total Stockholders' Equity $ 476.5 $ 397.6 ======= ========
-10- Part I -- Schedule B -------------------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY FINANCIAL INFORMATION FOR BUSINESS SEGMENTS (UNAUDITED) ================================================================================
Dollars in Millions --------------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 ------------------- --------------------- 1994 1993 1994 1993 -------- ------ -------- -------- NET SALES - - --------- Integrated Steel Operations $ 613.5 $539.9 $1,847.6 $1,626.8 Steel Service Center Operations 560.7 478.2 1,647.3 1,426.4 Eliminations and adjustments (44.7) (46.1) (154.1) (143.3) -------- ------ -------- -------- Total Net Sales $1,129.5 $972.0 $3,340.8 $2,909.9 ======== ====== ======== ======== OPERATING PROFIT (LOSS) - - ----------------------- Integrated Steel Operations $ 42.2 $ 22.2 $ 102.4 $ (7.1) Steel Service Center Operations 26.9 11.7 72.5 41.8 Eliminations and adjustments .1 (.6) 1.8 (.2) -------- ------ -------- -------- Total Operating Profit $ 69.2 $ 33.3 $ 176.7 $ 34.5 ======== ====== ======== ========
-11- EX-3.(I) 2 EXHIBIT 3(I) Exhibit 3(i) CERTIFICATE OF INCORPORATION of INLAND STEEL INDUSTRIES, INC. as Amended to and Including September 8, 1994 ------------------- First: The name of this Corporation is INLAND STEEL INDUSTRIES, INC. Second: The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. Third: The nature of the business or purpose to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. Fourth: The total number of shares of stock which this Corporation shall have authority to issue is 115,000,000, of which 15,000,000 shares shall be Preferred Stock, $1.00 par value per share (hereinafter sometimes referred to as "Preferred Stock"), and 100,000,000 shares shall be Common Stock, $1.00 par value per share (hereinafter sometimes referred to as "Common Stock"). The shares of stock of this Corporation may be issued from time to time for such consideration as may be fixed from time to time by the Board of Directors. PART I PREFERRED STOCK The Board of Directors is expressly authorized to adopt, from time to time, a resolution or resolutions providing for the issue of Preferred Stock in one or more series, to fix the number of shares in each such series and to fix the designations and the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof, of each such series. The authority of the Board of Directors with respect to each such series shall include a determination of the following, which may vary as between the different series of Preferred Stock: -2- (a) The number of shares constituting the series and the distinctive designation of the series; (b) The dividend rate on the shares of the series, the conditions and dates upon which dividends thereon shall be payable, the extent, if any, to which dividends thereon shall be cumulative, and the relative rights of preference, if any, of payment of dividends thereon; (c) Whether or not the shares of the series are redeemable and, if redeemable, the time or times during which they shall be redeemable and the amount per share payable on redemption thereof, which amount may, but need not, vary according to the time and circumstances of such redemption; (d) The amount payable in respect of the shares of the series, in the event of any liquidation, dissolution or winding up of this Corporation, which amount may, but need not, vary according to the time or circumstances of such action, and the relative rights of preference, if any, of payment of such amount; (e) Any requirement as to a sinking fund for the shares of the series, or any requirement as to the redemption, purchase or other retirement by this Corporation of the shares of the series; (f) The right, if any, to exchange or convert shares of the series into other securities or property, and the rate or basis, time, manner and condition of exchange or conversion; (g) The voting rights, if any, to which the holders of shares of the series shall be entitled in addition to the voting rights provided by law; and (h) Any other terms, conditions or provisions with respect to the series not inconsistent with the provisions of this Article Fourth or any resolution adopted by the Board of Directors pursuant hereto. The number of authorized shares of Preferred Stock may be increased or decreased by the affirmative vote of the holders of a majority of the stock of this Corporation entitled to vote at a meeting of stockholders. No holder of shares of Preferred Stock of this Corporation shall, by reason of such holding, have any preemptive right to subscribe to any additional issue of stock of any class or series nor to any security convertible into such stock. -3- PART II COMMON STOCK (a) Dividends. Subject to any prior rights to receive dividends to which the holders of shares of any series of the Preferred Stock may be entitled, the holders of shares of Common Stock shall be entitled to receive dividends, if and when declared payable from time to time by the Board of Directors, from funds legally available therefor. (b) Liquidation. In the event of any dissolution, liquidation or winding up of this Corporation, whether voluntary or involuntary, after there shall have been paid to the holders of shares of Preferred Stock the full amounts to which they shall be entitled, the holders of the then outstanding shares of Common Stock shall be entitled to receive, pro rata, any remaining assets of this Corporation available for distribution to its stockholders. The Board of Directors may distribute in kind to the holders of the shares of Common Stock such remaining assets of this Corporation or may sell, transfer or otherwise dispose of all or any part of such remaining assets to any other corporation, trust or entity and receive payment therefor in cash, stock or obligations of such other corporation, trust or entity or any combination thereof, and may sell all or any part of the consideration so received, and may distribute the consideration received or any balance or proceeds thereof to holders of the shares of Common Stock. The voluntary sale, conveyance, lease, exchange or transfer of all or substantially all the property or assets of this Corporation (unless in connection therewith the dissolution, liquidation or winding up of this Corporation is specifically approved), or the merger or consolidation of this Corporation into or with any other corporation, or the merger of any other corporation into it, or any purchase or redemption of shares of stock of this Corporation of any class, shall not be deemed to be a dissolution, liquidation or winding up of this Corporation for the purpose of this paragraph (b). (c) Voting. Except as provided by law or this Certificate of Incorporation with respect to voting by class or series, each outstanding share of Common Stock of this Corporation shall entitle the holder thereof to one vote on each matter submitted to a vote at a meeting of stockholders. (d) Reservation of Common Stock. Such numbers of shares of Common Stock as may from time to time be required for such purpose shall be reserved for issuance (i) upon conversion of any shares of Preferred Stock or any obligation of this Corporation convertible into shares of Common Stock and (ii) upon exercise of any options or warrants to purchase shares of Common Stock. -4- (e) Preemptive Rights. No holder of shares of Common Stock of this Corporation shall, by reason of such holding, have any preemptive right to subscribe to any additional issue of stock of any class or series nor to any security convertible into such stock. PART III VOTING NOTES The holders of the Corporation's 10.23% Subordinated Voting Notes (the "Exchange Notes"), which may be issued from time to time in exchange for the Corporation's Series F Exchangeable Preferred Stock, shall be entitled to vote on all matters submitted to a vote of the stockholders of the Corporation, voting together with the holders of Common Stock (and of any other shares of capital stock of the Corporation entitled to vote at a meeting of stockholders) as one class. Each $1,000 aggregate principal amount of Exchange Notes shall be entitled to a number of votes equal to the number of votes to which each share of Series F Exchangeable Preferred Stock was entitled on the effective date of the exchange of such share of Series F Exchangeable Preferred Stock for an Exchange Note, subject to adjustment as provided in paragraph 3 of the Exchange Notes. Holders of the Exchange Notes shall be deemed to be stockholders of the Corporation, and the Exchange Notes shall be deemed to be shares of stock for the purpose of any provision of the Delaware General Corporation Law that requires the vote of stockholders as a prerequisite to any corporate action. Fifth: Any action required or permitted to be taken by the stockholders of the Corporation, whether voting as a class or otherwise, must be taken at a duly called annual or special meeting of the stockholders of the Corporation and may not be taken by consent in writing of such stockholders, except that the Board of Directors at any time may by resolution provide that the holders of Preferred Stock, or any series thereof, may take any action required or permitted to be taken by such holders by consent in writing without a meeting. Sixth. The name and mailing address of the incorporator is as follows: Mr. Clark L. Wagner c/o Inland Steel Industries, Inc. 30 West Monroe Street Chicago, Illinois 60603 Seventh: The Corporation is to have perpetual existence. -5- Eighth: The Corporation may indemnify, in accordance with and to the full extent now or hereafter permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, an action by or in the right of the Corporation), by reason of his acting as a director, officer, employee or agent of, or his acting in any other capacity for, on behalf of, or at the request of, the Corporation, against any liability or expense actually and reasonably incurred by such person in respect thereof. Ninth: No director of this Corporation shall be personally liable to this Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director, except for liability (i) for any breach of the director's duty of loyalty to this Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of any of the provisions of this Article Ninth shall apply to or have any effect on the liability or alleged liability of any director of this Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. Tenth: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the by-laws of the Corporation. Eleventh: Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the by-laws of the Corporation. Elections of directors need not be by written ballot unless the by-laws of the Corporation shall so provide. Twelfth: The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. Thirteenth: The Board of Directors is authorized to sell, assign, transfer, convey and otherwise dispose of a part of the property, assets and effects of this Corporation, less than the whole or substantially the whole thereof, on such terms and conditions as they shall -6- deem advisable, without the assent of the stockholders in writing or otherwise; and also to sell, assign, transfer, convey and otherwise dispose of the whole, or substantially the whole, of the property, assets, effects, franchises and good will of the Corporation on such terms and conditions as they shall deem advisable but only with the assent in writing, or pursuant to the vote, of the holders of not less than two-thirds in interest of all the stock of this Corporation, but in any event not less than the amount required by law. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 26th day of February, 1986. /s/ Clark L. Wagner ------------------------------------- Clark L. Wagner EX-11 3 EXHIBIT 11 Exhibit 11 ---------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK (UNAUDITED) ================================================================================
Dollars and Shares in Millions (except per share data) -------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 ------------------ ------------------ 1994 1993 1994 1993 -------- -------- ------- --------- PRIMARY EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 44.3 35.3 42.6 35.3 Dilutive effect of stock options .6 .2 .5 - ----- ----- ----- ------ 44.9 35.5 43.1 35.3 ===== ===== ===== ====== Net income (loss) $30.7 $17.0 $71.4 $(16.9) Dividends on preferred stock, net of tax benefit on dividends applicable to leveraged Series E Preferred Stock held by the ESOP 6.6 8.0 21.8 24.0 ----- ----- ----- ------ Net income (loss) applicable $24.1 $ 9.0 $49.6 $(40.9) ===== ===== ===== ====== Primary earnings (loss) per share of common stock $ .54 $ .25 $1.15 $(1.16) ===== ===== ===== ====== FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 44.3 35.3 42.6 35.3 Assumed conversion of leveraged Series E Preferred Stock 3.0 3.0 3.0 - Dilutive effect of stock options .6 .2 .7 - ----- ----- ----- ------ 47.9 38.5 46.3 35.3 ===== ===== ===== ====== Net income (loss) $30.7 $17.0 $71.4 $(16.9) Dividends on antidilutive preferred stock, net of tax benefit on dividends applicable to leveraged Series E Preferred Stock held by the ESOP 4.5 6.3 15.9 24.0 Additional ESOP funding required on conversion of leveraged Series E Preferred Stock, net of tax benefit 2.1 1.7 5.9 - ----- ----- ----- ------ Net income (loss) applicable $24.1 $ 9.0 $49.6 $(40.9) ===== ===== ===== ====== Fully diluted earnings (loss) per share of common stock $ .50 $ .23 $1.07 $(1.16) ===== ===== ===== ======
NOTE: Series G Preferred Stock was converted to common stock as the result of a redemption call in May 1994. In the three-month period ended September 30, 1994 and 1993, and in the nine-month period ended September 30, 1994, only the assumed conversion of leveraged Series E Preferred Stock was dilutive. In the nine-month period ended September 30, 1993, the assumed conversions of Series A, Series E, and Series G Preferred Stock were antidilutive. -12- EX-27 4 EXHIBIT 27
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 9-MOS DEC-31-1994 SEP-30-1994 70,000 0 500,000 26,900 482,400 1,072,900 4,277,900 2,570,600 3,454,000 572,000 716,800 50,600 185,000 3,200 422,700 3,454,000 3,337,600 3,340,800 3,011,900 3,014,800 0 0 54,400 112,300 40,900 71,400 0 0 0 71,400 1.15 1.07
EX-99 5 APPENDIX A 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 Nine Months Ended Months Ended September 30 September 30 --------------- ------------------- 1994 1993 1994 1993 ------ ------ -------- -------- NET SALES $560.7 $478.2 $1,647.3 $1,426.4 ------ ------ -------- -------- OPERATING COSTS AND EXPENSES Cost of goods sold 490.8 423.6 1,444.9 1,257.4 Selling, general and administrative expenses 37.6 37.7 113.8 111.6 Depreciation and amortization 5.4 5.2 16.1 15.6 ------ ------ -------- -------- Total 533.8 466.5 1,574.8 1,384.6 ------ ------ -------- -------- OPERATING PROFIT 26.9 11.7 72.5 41.8 General corporate expense 1.8 1.8 5.3 5.5 Interest expense, net of interest income .9 3.1 2.7 8.5 ------ ------ -------- -------- INCOME BEFORE INCOME TAXES 24.2 6.8 64.5 27.8 PROVISION FOR INCOME TAXES 8.5 2.5 25.0 8.3 ------ ------ -------- -------- NET INCOME $ 15.7 $ 4.3 $ 39.5 $ 19.5 ====== ====== ======== ========
See notes to consolidated financial statements A-1 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 -------------------- Nine Months Ended September 30 -------------------- 1994 1993 ------ ------ OPERATING ACTIVITIES Net income $ 39.5 $ 19.5 ------ ------ Adjustments to reconcile net income to net cash used for operating activities: Depreciation and amortization 16.1 15.6 Deferred employee benefit cost (.1) 2.6 Deferred income taxes 1.2 (5.7) Change in: Receivables (52.9) (42.3) Inventories (35.4) (13.8) Accounts payable 12.5 (18.9) Payables to related companies 10.2 5.3 Accrued liabilities (3.4) (.9) ------ ------ Net adjustments (51.8) (58.1) ------ ------ Net cash used for operating activities (12.3) (38.6) ------ ------ INVESTING ACTIVITIES Capital expenditures (11.5) (12.9) Proceeds from sales of assets 2.8 .8 ------ ------ Net cash used for investing activities (8.7) (12.1) ------ ------ FINANCING ACTIVITIES Long-term debt issued - 7.5 Long-term debt retired (4.7) (5.1) Change in notes receivable from/payable to related companies (1.8) 48.3 ------ ------ Net cash provided from (used for) financing activities (6.5) 50.7 ------ ------ Net decrease in cash and cash equivalents (27.5) - Cash and cash equivalents - beginning of year 29.5 - ------ ------ Cash and cash equivalents - end of period $ 2.0 $ - ====== ====== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest (net of amount capitalized) $ 3.5 $ 6.6 Income taxes, net 17.3 15.6
See notes to consolidated financial statements A-2 INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES (A wholly owned subsidiary of Inland Steel Industries, Inc.) CONSOLIDATED BALANCE SHEET ==============================================================================
Dollars in Millions ---------------------------------------------- ASSETS September 30, 1994 December 31, 1993 - - ------ -------------------- -------------------- (unaudited) CURRENT ASSETS Cash and cash equivalents $ 2.0 $ 29.5 Receivables 248.9 196.0 Inventories - principally at LIFO 314.3 278.9 Deferred income taxes 12.2 11.8 ------ ------- Total current assets 577.4 516.2 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost $461.2 $455.2 Less accumulated depreciation 210.4 250.8 198.0 257.2 ------ ------- DEFERRED INCOME TAXES 26.9 28.5 EXCESS OF COST OVER NET ASSETS ACQUIRED 25.4 26.4 ------ ------ Total Assets $880.5 $828.3 ====== ====== LIABILITIES AND STOCKHOLDER'S EQUITY - - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 89.7 $ 77.2 Payables to related companies Notes 27.8 29.6 Other 19.2 9.0 Accrued liabilities 25.2 28.6 Long-term debt due within one year 4.7 5.0 ------ ------- Total current liabilities 166.6 149.4 LONG-TERM DEBT 23.8 28.2 DEFERRED EMPLOYEE BENEFITS AND OTHER 123.9 124.0 ------ ------ Total liabilities 314.3 301.6 STOCKHOLDER'S EQUITY 566.2 526.7 ------ ------ Total Liabilities and Stockholder's Equity $880.5 $828.3 ====== ======
See notes to consolidated financial statements A-3 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 September 30, 1994 and for the three-month and nine-month periods ended September 30, 1994 and 1993 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, 1993. NOTE 2/RELATED PARTY TRANSACTIONS The Company 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, the Company was charged $5.4 million and $5.5 million by Industries for the first nine months of 1994 and 1993, respectively, for management, financial and legal services provided to the Company. 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. The Company's net intercompany interest expense for the first nine months of 1994 totaled $.5 million as compared to $6.2 million for the first nine months of 1993. The Company 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 Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 1994 1993 1994 1993 -------- -------- -------- -------- Net Product Sales $ 2.7 $ 2.9 $ 8.2 $ 8.5 Net Product Purchases 43.7 44.5 151.0 138.4 A-4 -----END PRIVACY-ENHANCED MESSAGE-----