ISG Reports Record Fourth-Quarter and Year 2004 Results Results Summary ($ in millions, except per ton and per share amounts) RICHFIELD, Ohio, Feb. 9 /PRNewswire-FirstCall/ -- International Steel Group Inc. (NYSE:ISG) today reported fourth-quarter 2004 net income of $606.0 million ($5.87 per diluted share) and net income of $1,027.4 million ($9.99 per diluted share) for the year ended December 31, 2004. The fourth quarter and year include an unusual income tax benefit of about $390 million ($3.78 per diluted share). Excluding this unusual income tax benefit, net income was $216.1 million ($2.10 per diluted share) and $637.5 million ($6.20 per diluted share) for the fourth quarter and year 2004. ISG's management believes that ISG's net income excluding this unusual tax benefit is more indicative of ISG's results of operations. ISG's rapid growth through acquisitions makes comparisons to prior-year amounts not meaningful. Our fourth quarter 2004 operating income was $258.9 million, $68 per ton shipped, compared to $340.4 million, $84 per ton shipped, in the third quarter 2004. Net sales declined slightly to $2,553.5 million in the fourth quarter 2004 from $2,608.3 million in the third quarter. Shipments declined to 3,828,000 tons in the fourth quarter from 4,039,000 tons in the third quarter principally as a result of a planned outage at our Burns Harbor steelmaking facilities. Our average net sales per ton shipped was $667 in the fourth quarter 2004 compared to $646 in the third quarter. The tables below show shipments by product and certain other data for the periods shown. Actual Fourth Third Year Ended Quarter Quarter December 2004 2003 2004 2004 2003 Shipments Hot Rolled 40% 44% 42% 41% 46% Cold Rolled 17 17 18 19 19 Coated 21 21 21 21 20 Plate 9 10 9 10 8 Tin Plate 7 4 6 5 3 Other 6 4 4 4 4 100% 100% 100% 100% 100% Net sales (dollars in millions) $2,553.5 $1,418.3 $2,608.3 $9,015.9 $4,070.0 Average net sales per ton shipped $ 667 $ 405 646 $ 580 $ 391 Shipments (tons in thousands) 3,828 3,501 4,039 15,545 10,406 Raw steel production (tons in thousands) 4,621 4,142 4,726 17,758 11,274 Net income (loss) applicable to common stock (dollars in millions) $ 606.0 $ (48.7) $ 256.4 $1,027.4 $ (97.1) Diluted income (loss) per common share $ 5.87 $ (0.57) $ 2.51 $ 9.99 $ (1.26) Pro forma* Fourth Third Year Ended Quarter Quarter December 2004 2003 2004 2004 2003 Shipments Hot Rolled 40% 43% 42% 41% 41% Cold Rolled 17 16 18 18 17 Coated 21 21 21 21 21 Plate 9 8 9 9 8 Tin Plate 7 8 6 7 9 Other 6 4 4 4 4 100% 100% 100% 100% 100% Net sales (dollars in millions) $2,553.5 $1,701.9 $2,608.3 $9,472.6 $6,366.6 Average net sales per ton shipped $ 667 $ 410 $ 646 $ 578 $ 413 Shipments (tons in thousands) 3,828 4,150 4,039 16,398 15,433 Raw steel production (tons in thousands) 4,621 4,808 4,726 18,468 16,861 Net income (loss) applicable to common stock (dollars in millions) $ 606.0 $ (46.6) $ 256.4 $ 1052.5 $ (1.7) Diluted income (loss) per common share $ 5.87 $ (0.56) $ 2.51 $ 10.22 $ (0.02) * Pro forma information reflects the acquisitions of the Bethlehem and Weirton assets as if they had occurred on January 1, 2003. Costs and Expenses Cost of sales for the fourth quarter 2004 was 86 percent of sales compared to 83 percent in the third quarter largely due to increases in alloys, natural gas and scrap costs combined with higher maintenance spending and fixed costs being unabsorbed during the Burns Harbor production outages. The planned outages included 52 days at the caster, 13 days at the blast furnace and 6 days at the hot mill. Our LIFO provision was $52 million in the fourth quarter compared to $24 million in the third quarter. Profit sharing, VEBA costs and production bonuses for all employees declined to about $40 per ton shipped in the fourth quarter 2004 from about $44 per ton shipped in the third quarter. Selling, general and administrative expenses were higher in the fourth quarter 2004, principally as a result of expenses relating to the merger with Mittal Steel (see Pending Merger below). Miscellaneous income in the fourth quarter of $17 million resulted from our share of tariffs the United States government collected under antidumping laws for unfairly traded imports. The "Continued Dumping and Subsidy Offset Act" enables affected producers to receive the proceeds from those tariffs. Income Taxes As of December 31, 2003, ISG had incurred a cumulative tax loss from inception and, therefore, the estimated $1 billion of potential deferred tax asset acquired in the Bethlehem acquisition was fully offset by a valuation allowance. ISG's pre-tax income of $756 million during 2004 and probability of continued significant profitability, the strong global steel market and available tax planning strategies made it more likely than not that ISG will realize benefits from deferred taxes. Therefore, the valuation allowance was reduced, resulting in about $390 million of unusual non-cash, income tax benefits in the fourth quarter. Future adjustments to the valuation allowance are possible based on periodic reviews required under generally accepted accounting principles. ISG's effective tax rate before the valuation allowance reduction of about 15% for the year 2004 results in an effective rate of about 12% for fourth quarter. The 15% effective rate for the year 2004 takes into consideration the temporary differences that arose during the year, the benefit of the NOL carryforward arising in 2003 and the benefit of NOL carryforwards available for 2004 from the Bethlehem acquisition. In addition, as required by generally accepted accounting principles, we recognized in 2004 the benefit of temporary differences, principally depreciation, that are expected to be available in 2005 and 2006 to carryback against the current income taxes paid for 2004. In 2005, we expect our effective rate to be a more typical 38 percent to 39 percent. Liquidity and Cash Flow from Operations At December 31, 2004, we had liquidity of $848.1 million consisting of cash of $606.7 million and available borrowing capacity of $241.4 million under our revolving credit facility. Cash provided by operating activities for the year 2004 was $694.7 million compared to $288.9 million for 2003. Capital Expenditures We made capital expenditures of $267.2 million and acquisitions of $223.9 million during 2004. The acquisitions include a Hot Briquetted Iron Facility and substantially all the assets of Georgetown Steel Corporation and Weirton Steel Corporation. We anticipate $425 million in capital expenditures for the year 2005. Outlook Underlying demand remains fairly good in most market segments. Order entry has increased somewhat from the seasonally slow fourth quarter. Customer inventories, especially at service centers, are relatively high but are being consumed. Our first quarter 2005 shipments are expected to be about 4.0 million tons and average sales per ton shipped is expected to increase modestly. Costs per ton shipped should be about the same as the fourth quarter. This is because we do not have any major equipment outages planned and we expect some reduction in the cost of natural gas and scrap which should be offset by higher prices for iron ore and coal. Pending Merger In October 2004, Ispat International N.V., which has been renamed Mittal Steel Company N.V., and ISG announced that they had entered into a merger agreement under which Mittal Steel N.V. and ISG will merge. We received early termination of the waiting period under the Hart-Scott-Rodino Act in December 2004. The merger of ISG and Mittal is subject to approval by their shareholders and to other customary closing conditions and is expected to be completed by the end of March 2005. About International Steel Group Inc. International Steel Group Inc. is one of the largest steel producers in North America. It manufactures a variety of steel products including hot- rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, wire rod and rail products and semi-finished shapes to serve the automotive, construction, pipe and tube, appliance, container and machinery markets. For additional information on ISG, visit http://www.intlsteel.com/. Forward-Looking Statements Statements in this release that are not historical facts, including statements accompanied by words such as "will," "believe," "expect," "estimate," or similar terms, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements. These statements contain time-sensitive information that reflects management's best analysis only as of the date of this release. ISG does not undertake any ongoing obligation, other than that imposed by law, to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Factors that may cause actual results and performance to differ materially from those in the forward-looking statements include, but are not limited to, negative overall economic conditions or conditions in the markets served; competition within the steel industry; changes in U.S. or foreign trade policy affecting steel imports or exports; changes in foreign currencies affecting the strength of the U.S. dollar; actions by domestic and foreign competitors; the inability to achieve the Company's anticipated growth objectives; changes in availability or cost of raw materials, energy or other supplies; labor issues affecting the Company's workforce or the steel industry generally; and the inability to implement the Company's operating culture and philosophy at acquired facilities. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in ISG's filings with the Securities and Exchange Commission. Additional Information and Where to Find It Mittal Steel filed with the Securities and Exchange Commission an amended registration statement on Form F-4 with the SEC on February 3, 2005, which includes a preliminary proxy statement of ISG and a preliminary prospectus of Mittal Steel and other relevant documents in connection with the proposed merger involving Mittal Steel and ISG. Investors and security holders of Mittal Steel and ISG are urged to read the definitive proxy statement/prospectus, the documents incorporated by reference therein, and other relevant materials when they become available because they will contain important information about Mittal Steel and ISG and the proposed merger. Investors and security holders may obtain a free copy of these materials (when they are available) and other documents filed with the Securities and Exchange Commission at the SEC's website at http://www.sec.gov/. Mittal Steel and ISG and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the ISG stockholders with respect to the proposed merger. Information regarding the interests of these officers and directors in the proposed merger is included in the preliminary proxy statement/prospectus contained in the above- referenced amended registration statement. You may obtain documents filed with the SEC by Mittal Steel free of charge if you request them in writing from Mittal Steel Company N.V., 15th Floor, Hofplein 20, 3032 AC Rotterdam, The Netherlands, or by telephone at +31 10 217 8800. You may also obtain documents filed with the SEC by ISG free of charge if you request them in writing from Investor Relations, International Steel Group Inc., 4020 Kinross Lakes, Parkway, Richfield, Ohio 44286-9000, or by telephone at (330) 659-7430. International Steel Group Inc. Consolidated Statements of Operations (unaudited) (dollars in millions, except per share and per ton data) Third Fourth Quarter Quarter Year Ended December 2004 2003 2004 2004 2003 Net sales $2,553.5 $1,418.3 $2,608.3 $9,015.9 $4,070.0 Costs and expenses: Cost of sales 2,202.7 1,277.7 2,164.6 7,827.9 3,836.9 Selling,general and administrative 78.1 56.9 66.3 260.6 153.6 Depreciation and amortization 30.8 30.5 37.0 129.1 76.0 Miscellaneous income (17.0) -- $ -- (17.0) -- Total costs and expenses 2,294.6 1,365.1 2,267.9 8,200.6 4,066.5 Operating income 258.9 53.2 340.4 815.3 3.5 Interest and other financing expense, net 11.5 20.2 13.2 59.6 50.9 Income before taxes on income 247.4 33.0 327.2 755.7 (47.4) Provision (benefit) for income taxes 31.3 2.8 70.8 118.2 (29.2) Valuation allowance adjustment (389.9) 5.3 -- (389.9) 5.3 Total provision (benefit) (358.6) 8.1 70.8 (271.7) (23.9) Net income (loss) 606.0 24.9 256.4 1,027.4 (23.5) Deemed dividend on conversion of Class B common stock -- (73.6) -- -- (73.6) Net income (loss) applicable to common stock $ 606.0 $ (48.7) $ 256.4 $1,027.4 $ (97.1) Income (loss) per share Basic $ 6.06 $ (0.57) $ 2.59 $ 10.41 $ (1.26) Diluted $ 5.87 $ (0.57) $ 2.51 $ 9.99 $ (1.26) Other information: Shipments (tons in thousands) 3,828 3,501 4,039 15,545 10,406 Raw steel production (tons in thousands) 4,621 4,142 4,726 17,758 11,274 Operating income per ton shipped $68 $15 $84 $52 $ -- Average sales per ton shipped $667 $405 $646 $580 $391 International Steel Group Inc. Consolidated Balance Sheets (dollars in millions) December 31, December 31, Assets 2004 2003 Current assets: (unaudited) Cash and cash equivalents $ 606.7 $ 193.6 Receivables 830.7 555.1 Inventories 1,320.4 866.8 Deferred income taxes 75.1 -- Assets held for sale 39.6 68.6 Prepaid and other current assets 58.0 24.5 Total current assets 2,930.5 1,708.6 Property, plant and equipment, at cost 1,314.9 948.3 Less: accumulated depreciation and amortization (210.0) (86.4) Property, plant and equipment, net 1,104.9 861.9 Investments in joint ventures 27.9 27.0 Deferred income taxes 354.8 - Other assets 70.5 38.7 Total assets $4,488.6 $2,636.2 Liabilities and Stockholders' Equity Current liabilities: Current portion of debt and capital leases $ 57.6 $ 46.8 Accounts payable 753.3 439.5 Accrued compensation and benefits 285.3 206.7 Other current liabilities 284.8 133.5 Total current liabilities 1,381.0 826.5 Long term liabilities: Debt 637.2 362.8 Capital leases 169.6 212.7 Accrued environmental 164.3 161.2 Pensions and other retiree benefits 123.0 101.0 Other obligations 9.4 16.6 Total liabilities 2,484.5 1,680.8 Stockholders' equity: Preferred stock -- -- Common stock 1.0 1.0 Additional paid-in-capital 1,023.3 978.4 Retained earnings (deficit) 998.4 (29.0) Accumulated other comprehensive income 1.0 5.0 Treasury stock, at cost (19.6) -- Total stockholders' equity 2,004.1 955.4 Total liabilities and stockholders' equity $4,488.6 $2,636.2 International Steel Group Inc. Consolidated Statements of Cash Flows (unaudited) (dollars in millions) Year Ended December 2004 2003 Cash flows from operating (unaudited) activities: Net income (loss) $1,027.4 $ (23.5) Adjustments for items not affecting cash from operating activities Deferred income taxes (429.9) 20.5 Depreciation and amortization 129.1 76.0 Other 19.4 16.2 Changes in working capital and other items: Receivables (185.8) 11.2 Inventories (365.7) 67.5 Prepaids and other current assets (37.1) -- Accounts payable 273.7 58.5 Income taxes 170.2 (74.0) Accrued compensation and benefits 62.6 67.9 Other 30.8 68.6 Net cash provided by operating activities 694.7 288.9 Cash flows from investing activities: Capital expenditures and investments (267.2) (96.9) Acquisitions, net of cash received (223.9) (822.6) Proceeds from asset sales 18.4 34.3 Net cash used in investing activities (472.7) (885.2) Cash flows from financing activities: Borrowings under revolving credit facility -- 941.6 Payments under revolving credit facility -- (1,002.3) Proceeds from debt 594.6 710.0 Payments on debt (348.3) (469.3) Payments on capital leases (36.0) (23.7) Issuance of common stock, net 12.4 648.5 Purchase of treasury stock (19.6) -- Deferred financing fees (12.0) (24.7) Net cash provided by financing activities 191.1 780.1 Increase in cash and cash equivalents 413.1 183.8 Cash and cash equivalents - beginning of period 193.6 9.8 Cash and cash equivalents - end of period $ 606.7 $ 193.6 Other information: Interest paid $ 38.6 $ 34.3 Interest capitalized 1.3 0.4 Income taxes (received) paid (12.4) 30.0 Capital lease obligation incurred 7.9 0.2 DATASOURCE: International Steel Group Inc. CONTACT: Blaise Derrico, Manager, Investor Relations of International Steel Group Inc., +1-330-659-7430 Web site: http://www.intlsteel.com/

Copyright

ING Groep NV (NYSE:ISG)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more ING Groep NV Charts.
ING Groep NV (NYSE:ISG)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more ING Groep NV Charts.